28-comment sample chosen for difficulty

These 28 comments were selected for their likelihood of causing the worst analytical failures — not to flatter the tooling: all eight manufacturer letters plus PhRMA (pro-rebate voices in a ~90%-opposed record), position traps, identity traps, OCR-hostile scans, numeric-dense letters, campaign variants, and both length extremes — including a 17-million-character attachment dump the pipeline correctly quarantines. If the analysis holds here, the routine 95% of the corpus follows.

The topic ledger — all 36 entries

Every argument, Pilot Notice claim, and score in this packet organizes under these 36 topics, distilled from the Pilot Notice and AHA’s own comment. This is the vocabulary we most need you to check — renames and splits are cheap now, expensive after the full run.

IDPriorityTopic & statement
admin-burden-understatedhighHRSA massively understates administrative workload and labor cost
HRSA's burden estimates (2 then 5 hrs/week in the ICR; ~$34,320/entity in the letter) are unexplained and understate reality; hospitals need >=1 new FTE on average (>= $750M in labor), reconciliation is an entirely new category of work, and prep costs are sunk.
esp-data-premisehighThe "you already submit this data to 340B ESP" premise is false
HRSA's workload logic rests on 340B ESP precedent, but ESP covers a minuscule claim share (<1-4%), different/looser fields, contract pharmacy claims only, and no post-submission reconciliation; Beacon's criteria are stricter and the requirements are unprecedented.
float-cash-flowhighWAC-upfront float creates unaffordable cash-flow and financing costs
Paying WAC and awaiting rebates is an interest-free loan to manufacturers: wholesaler invoices come due in 5-7 days (before any 10-day rebate), wholesalers may demand prepay deposits, and thin-cash hospitals face borrowing costs, bond-covenant and payroll risk.
cogs-discount-losshighPermanent loss of COGS / prompt-pay wholesaler discounts
Buying through WAC accounts forfeits negotiated wholesaler discounts of 3-10% of drug cost — a permanent, non-timing loss HRSA never analyzed.
drug-stocking-accesshighStocking unaffordable at WAC; unit-level rebates don't solve it
Hospitals cannot front list price to stock costly IRA drugs (Stelara >$28k/package, >5x 340B); they will forgo stocking, transfer, or turn away patients. HRSA's full-package/unit-level answers ignore advance ordering, safety stock, and partial-package reality.
pharmacy-carveoutsmediumPharmacy chains will refuse 340B pricing on rebate drugs
During the first program, national chains (incl. Walmart, Walgreens) announced they would not provide 340B pricing on the 10 IRA drugs; recurrence would force patients, especially rural, to travel.
no-benefit-no-cbahighNo identified benefit; no lawful cost-benefit analysis
HRSA never identifies a concrete benefit of rebates over upfront discounts, claims it need not quantify benefits, and its testing rationale is circular — while costs run $200M-$1B+.
obbba-timingmediumWorst-possible timing given OBBBA and hospital finances
The program launches exactly as OBBBA's $68B two-year revenue hit, rising expenses, OPPS cuts, and tariffs land on hospitals.
reliance-interestslowThirty years of reliance on upfront discounts
Entities reasonably relied on 30 years of upfront discounts (ADAP the lone exception) and HRSA's own recent court defenses of that model; HRSA never properly weighed that reliance.
framing-privilege-covered-entitiesmediumThe statute privileges covered entities, not a two-industry balance
HRSA's balance-the-industries framing is a false equivalence; the committee standard requires the mechanism most effective and efficient "from the standpoint of each type of covered entity", and entities have the firsthand knowledge.
not-a-pilotmediumMandatory for 14,000 entities = a pilot in name only
Mandatory participation for every covered entity buying a participating manufacturer's drugs is not a "pilot" or "test" — even under PhRMA's own definition.
further-comment-periodmediumA second comment period on program specifics is required
Approving plans without further comment on the program's specific features fails to consider important aspects of the problem; plans should be public before approval.
dedup-figures-contestedhighDuplicate-discount magnitude figures are unverified manufacturer claims
The $1.5B (2019), ~25%-of-transactions, and "tens of billions" figures are manufacturer/industry assertions HRSA adopts without evidence — manufacturers' own $4B litigation claim collapsed to "potentially millions"; no federal estimate exists.
integrity-authoritymediumRebates are unnecessary and unlawful as program-integrity tools
Congress centralized 340B enforcement in HHS (audits, ADR); discounts must continue during investigations; audit thresholds are modest and never denied; and HRSA's own design (no compliance-based denials) concedes rebates can't police integrity.
dedup-alternativeshighLess-burdensome deduplication alternatives exist and were dismissed
HRSA admitted in court that manufacturers have other deduplication means; clearinghouse and two-account/lower-of designs would work without rebates; HRSA's no-legal-authority objection is dubious given the Part D clearinghouse precedent.
transparency-claimlowRebate "transparency" benefits only manufacturers and their vendor
The only parties gaining data visibility are drug companies and their IT vendor; real transparency would route data to HHS via a neutral clearinghouse.
platform-conditionsmediumHRSA must impose conditions on the rebate IT platform
HRSA claimed no authority over Beacon while imposing IT conditions on manufacturers; it can and must require a neutral, supported, secure, pre-tested platform with real service obligations.
vendor-neutrality-conflicthighSecond Sight/Beacon is drug-industry-entangled and unfit
Second Sight Solutions is a subsidiary of a PhRMA-linked consulting firm with a record of false denials, no customer support, a $1,000 liability cap, data-sale rights, and MDPNP-era failures.
hrsa-vendor-sourcinghighDe-anonymize and fact-check HRSA's vendor and commenter citations
Identify every commenter HRSA references anonymously — above all the "technology company that has engaged with HRSA since 2019" (platform, unit-level rebates, APIs, 10-minute onboarding, 7,000+ ESP entities, 53 TPAs) — and match unattributed verbatim quotes in the Notice to drug-company letters.
denials-disputeshighDenial and dispute machinery is inadequate and costly
"Good faith" dispute duties are meaningless, denial grounds were never truly limited, enforcement is an unrealistic nuclear option, the ADR is backlogged over a year — a dedicated 30-day process with human contacts and attested denials is required.
patient-care-harmmediumPatient care and services will be harmed — predictably, not speculatively
Diverting $200-500M+ from care necessarily has patient impact: service lines (oncology, OB, behavioral health), assistance programs, and drug access are jeopardized; HRSA's no-harm position ignores the record.
assume-five-hours-weekhighICR: 5 hours/week per covered entity suffices
HRSA's ICR estimates data-collection burden at 5 hours/week per entity (raised from 2); the pilot letter itself instead offers ~$34,320/entity and 15-minute uploads.
assume-costs-transitionalhighCosts are "transitional"
Implementation costs will diminish as processes standardize.
assume-absorbed-existing-staffhighTasks absorbed within existing structures / third parties
Additional staffing will generally be unnecessary; tasks fold into existing operations or TPAs.
assume-esp-precedenthighEntities already submit this data (340B ESP / platforms since 2021)
Same fields already submitted by >7,000 entities via 340B ESP; same company used for contract-pharmacy conditions since 2021.
assume-rebate-before-invoicehighRebates arrive before wholesaler invoices are due
With 10-day payment and prompt submission, rebates precede wholesaler payment obligations, so cash-flow impact is minimal.
assume-dup-discount-magnitudehighDuplicate discounts are massive ($1.5B / 25% / tens of billions)
The manufacturer-sourced duplicate-discount magnitude figures (~25% of transactions; tens of billions annually) are reliable and sound for HRSA to rely on, even though no federal estimate exists. supports = evidence the magnitudes are real/credible; contradicts = evidence they are overstated, unevidenced, or wrong.
assume-incentivizes-compliancemediumRebates "by their very nature" incentivize compliance/participation
Requiring validated claims before rebate payment inherently INCENTIVIZES covered entities to improve compliance — a behavioral-deterrence claim HRSA asserts structurally with nothing empirical cited. Tag ONLY arguments that assert or dispute the incentive/deterrence effect on covered-entity behavior itself (e.g. 'entities will have a strong incentive to ensure data quality', 'discouraging retroactive reclassification'). Arguments that rebates mechanically PREVENT or DETECT bad claims, without a behavioral-incentive assertion, do NOT engage this entry.
assume-iqvia-studyhighIQVIA cash-flow study shows negligible financing costs
IQVIA white paper: rebate-model interest costs 0.19%/0.03%, <1.2% worst case, <0.5% of list price financing; used to dismiss cash-flow and small-entity concerns.
assume-three-axis-studymedium3 Axis Advisors study shows rebates improve cash flow
2021 3 Axis study (Kalderos-linked) cited for rebates improving contract-pharmacy cash flow.
assume-no-patient-harmmediumA 10-day lag won't harm patients or communities
The pilot changes only mechanism/timing; no material impairment of cash flow or services is anticipated.
assume-small-entities-finehighSmall/rural entities will not struggle
"We do not believe small hospitals and non-hospital healthcare entities will struggle to accommodate such changes" — relying on the IQVIA financing analysis.
topic-prior-experience-proofhigh"We already experienced this" — prior reimbursement abuse as proof
FIRST-PARTY COVERED-ENTITY accounts of actual past harm under analogous mechanisms — MFP under-payment or latency, 340B ESP false denials or support failures, first-program disruptions, pharmacy carve-outs — that convert speculative concerns about manufacturer behavior into demonstrated patterns. supports = a covered entity (or its association, for named members) recounts such harm first-hand; contradicts = a first-party account of SMOOTH experience with those mechanisms. A MANUFACTURER'S account of covered-entity noncompliance (duplicate claims it found, audit obstruction, unresolved disputes) is NOT this topic in either direction — that is dedup-figures/integrity evidence.
topic-golden-commentshighGolden comments — manufacturers, vendors, and studies to profile
Locate and profile the submissions of PhRMA, Johnson & Johnson, Second Sight Solutions, other manufacturers, and any comments citing the William Sarraille analysis — then align them against the Notice's language and citations.
topic-dual-system-duplicationmediumRunning rebate and discount systems in parallel
With <=5.5% of sales on rebates, entities run BOTH workflows — the duplicative-operations cost HRSA counts as a mitigation (94.5% unchanged) rather than a burden.
topic-medical-claims-data-difficultymediumMedical (vs pharmacy) claims data is the hard part
Medical claims for physician-administered drugs live in EHR/billing systems without TPA feeds; assembling them is manual and cross-system — a burden distinct from pharmacy claims.

Scroll for all entries · full file: claims_ledger.csv

LENS 01

Powerful arguments, weak answers

Each argument carries an argument-quality score (lived experience, cited data, causal mechanism, quantified impact — evidence over identity) and a response-quality score (how the Pilot Notice actually treated it). Their product ranks the fight:

priority = AQS × (1 − RQS) × topic weight
Commenter & response classAQS · RQS · priority
Wayne Community Health Centers Inc.topic only 0.720.40.432

Wayne Community Health Centers' own MFP reconciliation experience shows that manufacturer-controlled rebate systems can misclassify claims, demand extra data, deny payments, and delay dispute resolution. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“Wayne Community Health Centers, Inc. has already experienced operational challenges related to rebate reconciliation under the Medicare Maximum Fair Price (MFP) program, including: Incorrect classification of non-340B claims as 340B …”
“These experiences demonstrate that rebate systems can introduce significant administrative complexity, inaccurate claim determinations, and delayed payments, all of which create financial instability for safety-net providers. Expanding …”

HRSA’s nearest response V.E-p4 · V.E-p6 · VIII.C-p4

“Specifically, the Pilot requires manufacturers to document and report denied claims, including the basis for each denial and the status of any associated dispute.”
UVA Healthtopic only 0.720.40.432

UVA Health’s preparation for the prior proposed pilot revealed concrete legal, operational, security, documentation, and support problems with the Beacon platform. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“Under HRSA’s original pilot Rebate Program proposed August 2025, the approved drug companies were planning to use Second Sight Solutions’ Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that …”
“During UVA Health’s registration and onboarding to the mandatory Beacon platform for participation in the rebate pilot program, UVA Health encountered significant legal, operational, and security challenges that created substantial risk …”

HRSA’s nearest response V.C.6-p9 · V.C.6-p10 · V.C.6-p11 · V.G-p9

“Additionally, consistent with comments from manufacturers and technology stakeholders, the record shows that rebate processing platforms have already been developed or are in the process of being operationalized and are designed to integrate with existing …”
Eli Lilly and Companytopic only 0.6640.40.3984

Lilly's attempted audits found substantial Medicaid managed-care duplicate discounts and covered-entity noncooperation, showing that current audits do not adequately prevent duplicates. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“As HRSA knows, Lilly attempted to audit two covered entities but ultimately, we were forced to abandon the audits as futile given the covered entities refusal to provide documents from the HRSA-approved audit plans.”
“Using claim level data begrudgingly provided by covered entities and matching these to Medicaid rebate claims provided by states for just two quarters, Lilly identiied more than 90,000 duplicate claims worth millions of dollars.”

HRSA’s nearest response V.B-p8 · VI-p21 · VI-p22

“Retrospective reviews, audits, and dispute resolution processes are inherently reactive, identifying potential duplicate discounts only after they have occurred.”
FQHC 340B Compliance LLCtopic only 0.6280.40.3768

Duplicate 340B discounts are exceptional rather than widespread because covered entities and their service vendors use safeguards to prevent a claim from being captured more than once. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“In general, the opportunity for duplication of 340B discounts is the exception not the norm. In our work with TPAs and gateway processors across the 340B industry, there are safeguard logics in place, including for referrals that limit …”
“In practice, FQHC 340B has observed that covered entities work together diligently to put processes in place to ensure that multiple 340B discounts are not received on the same claim.”

HRSA’s nearest response V.B-p4 · V.B-p7 · V.B-p8 · VI-p3 · VI-p4

“Covered entity groups acknowledge the importance of preventing duplicate discounts but contend that the current framework, when properly implemented, is sufficient to meet statutory requirements, including in the context of MDPNP implementation.”
Public Health Management Corporation (PHMC)partial 0.90.60.36

Manufacturer discretion over rebate denials and late corrected payments would expose PHMC to unrecoverable losses and requires enforceable safeguards. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their …”
“Given our current volume of the 10 selected drugs, even a very conservative 15% denial rate would result in a net annual loss of $90,232 in year one to $385,475 in year three.”

HRSA’s nearest response V.E-p4 · V.E-p6 · V.D-p7 · VIII.C-p3 · VIII.C-p4

“Plan must ensure that all rebates are paid to the covered entity (or denied, with documentation to support) within 10 calendar days of completed data submission.”
Avera Healthpartial 0.90.60.36

Beacon and Second Sight's data terms, inaccurate eligibility identification, and manufacturer-directed dispute process demonstrate a conflicted and insufficient platform for a rebate model. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Avera Health facilitiesto use Beacon or lose access to 340B pricing for …”
“On a recent call with Beacon personnel, they stated that Beacon expects 10-12% of the MDPNP claims to be 340B eligible. However, at Avera Health facility owned pharmacies, Beacon is identifying over 30% of our MDPNP claims as 340B …”

HRSA’s nearest response V.E-p4 · V.E-p6 · VIII.A-p6 · VIII.D-p1

“Covered entity data that is handled by technology platforms and received by manufacturers as a part of this Pilot should not be used for any purpose other than those explicitly identified in this Pilot.”
Avera Healthpartial 0.90.60.36

Avera's experience with manufacturer-controlled claims platforms shows that they produce inaccurate data, improper denials, and insufficient recourse for covered entities. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“In Iowa, where the state has no contract pharmacy protection laws, our contract-pharmacy-related savings have decreased by 15%, directly limiting the extent to which we can support our communities.”
“Regarding good-faith inquiries: contractors such as Kalderos and IQVIA have sent us claims asking if these were duplicate discounts. At times the claims provided to us have been for other unrelated facilities. How do we trust their data …”

HRSA’s nearest response V.E-p4 · V.E-p6 · VIII.C-p4

“Specifically, the Pilot requires manufacturers to document and report denied claims, including the basis for each denial and the status of any associated dispute.”
HopeHealth, Incpartial 0.90.60.36

Manufacturer discretion, vague denial rationales, and unenforced payment deadlines would cause unrecovered losses and prolonged disputes, as HopeHealth says has already occurred in MFP deduplication. (analyst restatement)

The commenter’s own words (verbatim, span-validated)

“Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their …”
“Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $1 million for the 2026 MFP drug list.”

HRSA’s nearest response V.D-p7 · V.E-p4 · V.E-p6 · VIII.C-p4

“Plan must ensure that 340B rebates are not denied based on eligibility or compliance concerns with diversion or Medicaid duplicate discounts, pursuant to section 340B(a)(5)(A) and (B) of the Public Health Service Act and should provide for rationale and …”

Expand a row for the argument and HRSA’s nearest response, quoted verbatim with paragraph addresses. The top two rows are first-party experience — a health center’s own Medicaid rebate reconciliation, a health system’s prior-pilot platform failures — each answered with generic reassurance.

LENS 02

Their words, HRSA’s voice

Every uncited assertion in the Pilot Notice is screened for verbatim overlap with the record, then checked for direction (commenters quote HRSA’s notices constantly; those are flagged and discounted). What survives is adoption: HRSA rebutting covered entities in manufacturers’ own language.

HRSA, §V.C.6 — own assertion, dismissing burden claims

“Covered entities derive significant financial benefit from participation in the Program.”

Johnson & Johnson’s comment

“These reports make clear that, under the current discount model, covered entities derive significant financial benefit from the 340B Program and are spending significant shares of their 340B revenues on vendors…”

HRSA, §V.G — the data premise behind every burden answer

“The data elements required under the Pilot are comparable to, and in many cases, a subset of the information that covered entities already collect, maintain…”

Teva’s comment

“…data already collected and maintained in the ordinary course of operations…standardizes the submission of information that covered entities already possess.”

HRSA, §V.A — balancing away reliance interests

“…the rapidly changing 340B landscape…particularly with respect to transparency, oversight, and the prevention of duplicate discounts and diversion.”

AstraZeneca’s comment

“These developments have introduced structural challenges that the status quo is not well-positioned to address, particularly with respect to transparency, oversight, and the prevention of duplicate discounts and diversion.”

LENS 03

Identifying the commenter

The Pilot Notice describes what commenters told HRSA 242 times, usually without naming anyone. Searching the public record for each characterization’s distinctive figures and phrasing already yields a confirmed match or a short candidate list for 96 of those 242 references — about 40% — and that is before the deep per-comment analysis, which so far covers only the eight largest manufacturers plus twenty other comments. Industry voices are also heavily over-featured: pro-rebate commenters wrote 5.2% of the record but hold 23.6% of these references. By section (marker = the record’s 5.2% base rate):

§V.C.4 59% of 17
§V.C.3 47% of 19
§II.C 40% of 10
§V.C.2 40% of 10
§VI 38% of 8
§V.C.6 29% of 24

Pro-side share of each section’s commenter references · sections with ≥5 references

The most concentrated case is §V.C.4, built around an “unnamed technology company engaged with HRSA since 2019” whose claims the Pilot Notice relays at length:

“One such commenter, a technology company that has engaged with HRSA since 2019 to develop and operationalize a 340B rebate model, states that its platform is capable of effectuating discounted pricing directly to covered entities as a re…”
“This commenter reports that multiple manufacturers are already using its platform to collect claims data, that thousands of covered entities have registered on the platform, and that covered entities have reported fully onboarding in les…”
De-anonymized. Four independent verbatim matches identify this commenter as Kalderos, the rebate-platform vendor — a commercially interested party whose self-description anchors the Pilot Notice’s feasibility case. The asymmetry runs both directions: industry gets named statistics and direct quotes; covered-entity concerns are aggregated into “commenters expressed concern.”

Every public comment

All 2,453 submissions to the docket, in full and exactly as filed — no analysis layered on top. Use your browser’s find (Cmd+F / Ctrl+F) to search every word; long comments scroll within their own panel. One submission, a 16,997,761-character attachment dump, keeps its entry with its body omitted.

HRSA-2026-0001-0003Louisiana Rural Hospital Coalition, Inc.2026-02-23T05:00Z6,842 chars
Re: Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot February 23, 2026 RURAL HOSPITAL COALITION Dear Health Resources and Services Administration, 30 I Main Street Suite 1620 Baton Rouge. Li\ 7080 I (P) 225-3 89-9429 www .larhc.org Re: Docket No. HRSA-2026-03042 - Request for Information: 340B Rebate Model Pilot Program The Louisiana Rural Hospital Coalition (LRHC} appreciates the opportunity to comment on the Health Resources and Services Administration (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program under section 340B of the Public Health Service Act. LRHC represents forty-nine (49) rural hospitals across Louisiana that rely on the 340B Drug Pricing Program to sustain essential health care services in medically underserved and geographically isolated communities. For the reasons outlined below, LRHC strongly opposes implementation of a 340B rebate model pilot program and urges HRSA to maintain the longstanding upfront discount structure that has governed the program for more than three decades. I. The Rebate Model Undermines the Statutory Purpose of 340B Congress established the 340B Program to allow covered entities "to stretch scarce Federal resources as far as possible." The upfront discount structure is integral to that purpose. Rural hospitals operate on extremely thin or negative margins, with limited days cash on hand and constrained access to capital. A rebate-based system would require rural hospitals to: Purchase drugs at higher upfront acquisition costs; Await rebate adjudication and payment; and Absorb any delays, denials, or disputes during reconciliation. This fundamentally shifts financial risk from manufacturers to safety-net providers-contrary to congressional intent. II. Severe cash Flow Risks for Rural Hospitals Rural hospitals in Louisiana typically remit payment to wholesalers within standard commercial terms {often 15-30 days), sometimes sooner to access prompt-pay discounts. Under a rebate model: Hospitals would pay full or near-wholesale acquisition costs upfront. Rebate recovery would depend on manufacturer processing timelines. Even a 10-day rebate window would not align with real-world reconciliation, dispute resolution, or data validation processes. For facilities operating with limited liqujdity, even short-term delays could: Disrupt payroll or vendor obligations; Increase borrowing costs; 1 Reduce service lines; or Accelerate closures in already vulnerable communities. In short, the rebate model converts a predictable upfront discount Into an accounts receivable risk that rural hospitals are ill-equipped to manage. Ill. Significant Administrative and IT Burden The RFI appropriately requests detailed estimates of administrative and systems costs. For rural hospitals, these burdens would be disproportionate. Implementation would require: New claims-level tracking systems; Data submission platforms capable of transmitting required rebate elements; Reconciliation staff; Legal and compliance oversight for denial disputes; Enhanced audit infrastructure. Unlike large health systems, rural hospitals lack economies of scale. Many depend on third-party administrators for 3408 compliance. A rebate system would increase vendor fees, expand staffing needs, and divert clinical leadership attention from patient care. The shift would not be marginal-it would represent a structural redesign of 3408 operations. IV. Increased Risk of Rebate Denials and Disputes Even with guardrails, rebate models inherently create adjudication disputes. Manufacturers could deny claims based on: Alleged duplicate discounts, Data mismatches, Timeliness issues, Eligibility interpretations. While HRSA suggests limiting denial grounds, the practical effect will be increased administrative appeals, delayed payments, and uncertainty. For rural hospitals, uncertainty is destabilizing. V. Threats to Patient Access In Louisiana's rural communities, 3408 savings directly support: Oncology infusion services, Behavioral health programs, Obstetrics and maternal care, Medication assistance programs, Free or discounted drugs for uninsured patients. If cash flow becomes unpredictable, hospitals will be forced to reassess high-cost service lines- 2 ~ i I particularly oncology and specialty pharmaceuticals. The likely outcome: Reduced local access to specialty medications; Increased travel burdens for patients; Higher uncompensated care; Worsened health disparities. VI. Rebate Model Does Not Solve Duplicate Discount Concerns Manufacturers argue that rebates may help address duplicate discounts and issues related to the Medicare Drug Price Negotiation Program's Maximum Fair Price provisions. However: Covered entities already maintain procedures to prevent Medicaid duplicate discounts. Data-sharing improvements can be achieved without restructuring the payment model. A rebate pilot risks creating new compliance complexity rather than solving existing issues. Structural disruption of a 30-year-old discount framework is not a proportionate response to targeted program integrity concerns. VII. Disproportionate Impact on Rural and Small Providers HRSA specifically requested comment on organization-specific factors such as rural status. Rural hospitals face: Smaller administrative teams; Limited IT sophistication; Higher per-unit compliance costs; Greater financial vulnerability. A rebate pilot may be technically "voluntary," but manufacturers' participation decisions could effectively compel rural hospital involvement, placing them at competitive and financial disadvantage. VIII. Condusion The Louisiana Rural Hospital Coalition respectfully urges the Health Resources and Services Administration to: 1. Reject implementation of a 340B Rebate Model Pilot Program; 2. Preserve the upfront ceiling price discount structure; 3. Pursue targeted, data-driven solutions to duplicate discount concerns without altering the core payment mechanism; and 4. Conduct a formal rural impact analysis before considering any structural changes to the 3408 Program. The rebate model would transfer financial risk to the very providers the 3408 statute was designed to protect. 3 we appreciate the opportunity to provide these comments and stand ready to provide additional data regarding the rural hospital impact. Sincerely, ~n-?s:;.ld_s ___ _ Executive Director ~IA~ Randy Morris Board Chairman Blake Kramer Tim Curry Director Director ~P~12 Lee Chastant Director ~ Jackie Reviel Director Stephanie Guidry Director 4 Todd Eppler Board Secretary/Treasurer Brandon Hillman Director Mary Ellen Pratt Director
HRSA-2026-0001-0004Anonymous Anonymous2026-02-23T05:00Z735 chars
I'm against the overall idea of delaying 340B drug pricing discounts until AFTER the manufacturer validates the claim - that seems a bit too fox in the hen house, no? Why not compromise? Why not do a 90-day look-back per drug that is 340B eligible for a covered entity and let them continue to buy up to that quantity of drug at 340B price UPFRONT, and have the drug manufacturers audit that data instead? If the drug manufacturers are saying that the 340B program is rife with unvalidated claims, put the onus on them not the hospitals trying to deliver and extend patient care. Healthcare margins, especially for hospitals, are razor-thin if not negative; shift the financial onus to the manufacturers who are financially stronger.
HRSA-2026-0001-0005Gibson Area Hospital2026-02-23T05:00Z2,553 chars
HRSA RFI Response Critical Access Hospital (Illinois) Submitted on behalf of a Critical Access Hospital located in Illinois We appreciate the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a rural Critical Access Hospital, we are concerned that shifting from a point-of-sale discount to a manufacturer rebate structure would significantly increase upfront acquisition costs and create substantial cash flow strain for small safety-net providers. Under the current 340B framework, eligible drugs are purchased at discounted pricing, allowing predictable budgeting and responsible reinvestment into patient services. Under a rebate model, the hospital would be required to purchase certain IRA-affected drugs at materially higher upfront costs and await reimbursement at a later date. Our internal analysis indicates that for IRA-impacted drugs alone, the rebate approach would increase upfront acquisition cost exposure by more than twenty-five times current levels. This change would shift the hospital from a modest five-figure purchasing obligation to a seven-figure working capital requirement. In practical terms, this represents over one million dollars in additional funds that must be advanced before rebate payment is received. For a Critical Access Hospital operating on narrow margins, this is not simply a timing adjustment. It represents a fundamental shift in financial risk. Unlike manufacturers and large health systems, rural hospitals do not maintain large reserve balances or expansive credit facilities to absorb reimbursement delays or payment disputes. Even short disruptions in rebate timing could create operational pressure and restrict planning stability. The rebate model effectively transfers discount realization risk from manufacturers to covered entities. This introduces uncertainty into purchasing, forecasting, and service line sustainability, particularly for infusion and specialty drug programs where acquisition costs are significant. While we support program integrity and thoughtful oversight, any movement toward a rebate-based structure must include guaranteed payment timelines, clear adjudication standards, and enforceable protections against delayed or denied rebates. The 340B program is intended to strengthen rural access to care. A framework that dramatically increases upfront purchasing exposure risks undermining that objective. We respectfully urge HRSA to carefully consider the impact on Critical Access Hospitals before advancing a rebate model.
HRSA-2026-0001-0006Visiting Nurse Association of Central Jersey Community Health Center, Inc.2026-02-23T05:00Z2,277 chars
Dear HRSA, Thank you for the opportunity to provide commentary regarding the prospective 340B Rebate Model Pilot Program. My name is John Zim. I am the CFO of VNACJ Community Health Center, based out of Monmouth County, New Jersey. Our organization has a 340B in-house pharmacy, as well as several 340B contract pharmacy arrangements. We write approximately 40,000 scripts per year, and our 340B program - especially with the advent (Nov 2025) of HRSA's dispensing fee slide - provides critical access to low-cost medications to our 18,000 unique patients. Our organization is built to break-even, at best. While costs have risen, our H80 funds now represent 12% of our operating budget, and our ability to generate reserves for unexpected occurrences is fiscally wishful. The 340B program is critical in our ability to provide quality care to the underserved, given the aforementioned. Our ability to procure drugs for our patients at the 340B discount price upfront is a working capital necessity. In an environment wherein we would need to purchase 340B qualifying claim drugs at non-340B pricing upfront, cash flow to float this inventory between initial acquisition and potential rebate is unavailable. Our credit terms with drug wholesalers are as advantageous as our FQHC prowess allows, and access to credit lines to float funds for non-340B inventory procurement is limited, at best. Even if we were able to secure lines, the credit lines would consistently be outstanding - and interest expenditures would compile. Ultimately, this rebate model would almost certainly require our organization to restrict the impacted medications for our patients. Or, we would need to limit the number of patients we would be able to serve, as we would need to cut personnel in order to sustain the increased cash outlay to support the high-cost upfront inventory. In either event, we would experience a devastating blow to our mission and purpose as an FQHC, serving the underserved. I am kindly requesting your consideration to exempt FQHC's as a covered entity type under the 340B Rebate Model Pilot Program, and will surely provide any context you may need to support this request. Thank you for your time. John Zim CFO VNACJ Community Health Center, Monmouth County, NJ
HRSA-2026-0001-0007Russell County Hospital2026-02-24T05:00Z4,308 chars
See attached file(s) HRSA RFI Response Critical Access Hospital (Kentucky) Submitted on behalf of a Critical Access Hospital located in Kentucky Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Critical Access Hospital serving a rural Kentucky community, our organization operates within a highly constrained financial environment. Pharmacy purchasing decisions are made carefully to maintain continuity of care while preserving the hospitals limited financial flexibility. Based on internal modeling of IRA-affected medications, our current annual 340B acquisition cost for these drugs is approximately forty thousand dollars. Under a rebate-based purchasing model, upfront acquisition costs would increase to approximately 1.7 million dollars annually. This represents more than forty times increase in the amount that must be advanced before reimbursement is received. For a hospital of our size, that scale of increase is material. Critical Access Hospitals do not operate with expansive reserves or access to large financing mechanisms. Advancing drug costs at this level requires reallocating funds that would otherwise support staffing, capital maintenance, and patient care operations. Additionally, the rebate model introduces a dependence on accurate and timely manufacturer reimbursement. Any delay, partial repayment, or administrative discrepancy would require internal review and reconciliation, adding further strain to existing pharmacy and finance personnel. The 340B program has historically provided certainty at the point of acquisition, allowing rural hospitals to manage costs in a predictable manner. Requiring small hospitals to absorb substantially higher upfront drug costs alters that balance and increases financial risk exposure. Critical Access Hospitals play an essential role in preserving access to care in rural regions of Kentucky. Any proposed modification to the 340B structure should carefully evaluate how such increases in upfront cost requirements would affect hospitals operating with limited margin for error. We appreciate HRSAs consideration of these concerns. HRSA RFI Response Critical Access Hospital (Kentucky) Submitted on behalf of a Critical Access Hospital located in Kentucky Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Critical Access Hospital serving a rural Kentucky community, our organization operates within a highly constrained financial environment. Pharmacy purchasing decisions are made carefully to maintain continuity of care while preserving the hospitals limited financial flexibility. Based on internal modeling of IRA-affected medications, our current annual 340B acquisition cost for these drugs is approximately forty thousand dollars. Under a rebate-based purchasing model, upfront acquisition costs would increase to approximately 1.7 million dollars annually. This represents more than forty times increase in the amount that must be advanced before reimbursement is received. For a hospital of our size, that scale of increase is material. Critical Access Hospitals do not operate with expansive reserves or access to large financing mechanisms. Advancing drug costs at this level requires reallocating funds that would otherwise support staffing, capital maintenance, and patient care operations. Additionally, the rebate model introduces a dependence on accurate and timely manufacturer reimbursement. Any delay, partial repayment, or administrative discrepancy would require internal review and reconciliation, adding further strain to existing pharmacy and finance personnel. The 340B program has historically provided certainty at the point of acquisition, allowing rural hospitals to manage costs in a predictable manner. Requiring small hospitals to absorb substantially higher upfront drug costs alters that balance and increases financial risk exposure. Critical Access Hospitals play an essential role in preserving access to care in rural regions of Kentucky. Any proposed modification to the 340B structure should carefully evaluate how such increases in upfront cost requirements would affect hospitals operating with limited margin for error. We appreciate HRSAs consideration of these concerns.
HRSA-2026-0001-0008Linda Stevens · Hammond, IN, United States2026-02-24T05:00Z3,369 chars
Regarding HHS Docket No. HRSA-2026-03042 The statutory purpose of the 340B Program, as enacted by Congress, is to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. For Federally Qualified Health Centers (FQHCs) and Community Mental Health Centers (CMHCs), this purpose is fulfilled through upfront access to medications at the 340B ceiling price not through retrospective rebate structures that shift financial risk to safety-net providers. Under the current structure, a covered entity may spend approximately $1,000 per month on select 340B medications at ceiling pricing. At average wholesale pricing, those same medications may cost approximately $36,000 per month. That difference roughly $35,000 monthly represents exposure that would immediately create an operational deficit for many FQHCs. Payment methodologies do not allow health centers to offset such deficits simply by increasing patient volume. FQHCs in Illinois and nationwide already operate at negative margins (approximately -6.7% and -2.1%, respectively). A rebate model requiring upfront wholesale acquisition cost while relying on non-guaranteed reimbursement introduces substantial cash-flow risk. Wholesalers require prompt payment; unless structured with enforceable timelines, manufacturers would not carry equivalent financial accountability. Even modest delays or partial denials would destabilize safety-net operations. This risk is magnified by anticipated reductions in Medicaid and Marketplace coverage, which are expected to increase the number of uninsured and self-pay patients below 200% FPL. These populations depend on covered entities to access affordable medications for chronic disease, behavioral health conditions, and life-sustaining therapies. A rebate model that increases upfront exposure directly threatens patient access. For these reasons, any 340B Rebate Model that shifts financial risk from manufacturers to covered entities undermines statutory intent and should not proceed. If HRSA advances a pilot despite these concerns, essential guardrails must include: Mandatory, enforceable rebate payment within a fixed timeframe (e.g., 10 calendar days), with automatic approval if not denied within that period. Interest accrual and civil monetary penalties for delayed or improper payments. Full transparency regarding rebate calculations, administrative fees, actual acquisition costs, PBM arrangements, and vertical ownership structures. Prohibition on manufacturer shipment restrictions to 340B contract pharmacies. Elimination of unnecessary claims-level data demands beyond what is required to prevent duplicate discounts. Clear operational separation of 340B purchasing through wholesalers and contract pharmacies without imposing duplicative billing burdens on in-house administered drugs or vaccines appropriately billed under Medicaid or existing 340B arrangements. The central issue is patient access. The 340B Program exists to ensure that individuals below 200% of the Federal Poverty Level can obtain medications at a reasonable cost. Any restructuring that destabilizes covered entities risks forcing patients to ration or forgo life-sustaining treatment a result inconsistent with both statutory purpose and public health objectives.
HRSA-2026-0001-0009Anonymous Anonymous2026-02-24T05:00Z5,173 chars
HHS Docket No. HRSA-2026-03042 HRSA RFI Response Critical Access Hospital (Nebraska) Submitted on behalf of a Critical Access Hospital located in Nebraska Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Critical Access Hospital serving a rural Nebraska community, our organization operates with limited financial margin and tightly managed expense planning. Drug acquisition costs are coordinated carefully within the broader framework of hospital operations, including emergency services, inpatient care, and outpatient treatment programs. Based on internal modeling of IRA-affected medications, our current annual 340B acquisition cost for these drugs is approximately sixty-four thousand dollars. Under a rebate-based purchasing model, upfront acquisition costs would increase to more than 1.5 million dollars annually. This represents an increase of more than twenty times the amount currently required to acquire these medications. For a hospital of our size, advancing purchases at that scale prior to reimbursement is substantial. Critical Access Hospitals do not maintain large discretionary reserves, and significant fluctuations in expense timing require careful balancing against payroll, supply costs, and facility maintenance obligations. The concentration of more than one million dollars in additional advance drug purchasing within a single category of medications materially alters financial planning assumptions. Even when reimbursement is ultimately received, the timing and reconciliation process introduce uncertainty that must be actively managed. A rebate framework would also require ongoing monitoring of manufacturer repayment, review of claim-level data, reconciliation of payment variances, and coordination between pharmacy and finance personnel. In small hospitals, these responsibilities are often handled by teams with overlapping roles rather than dedicated rebate management staff. Critical Access Hospitals serve geographically isolated communities where alternative care options are limited. Financial adjustments in one operational area can have cascading effects across the organization. The 340B program has historically provided pricing certainty at the time of acquisition, allowing rural providers to sustain access to medications close to home. Any proposed modification should carefully evaluate how significant increases in advance purchasing requirements would affect small hospitals operating with limited margin for variability. We appreciate HRSAs thoughtful consideration of these concerns. HRSA RFI Response Critical Access Hospital (Nebraska) Submitted on behalf of a Critical Access Hospital located in Nebraska Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Critical Access Hospital serving a rural Nebraska community, our organization operates with limited financial margin and tightly managed expense planning. Drug acquisition costs are coordinated carefully within the broader framework of hospital operations, including emergency services, inpatient care, and outpatient treatment programs. Based on internal modeling of IRA-affected medications, our current annual 340B acquisition cost for these drugs is approximately sixty-four thousand dollars. Under a rebate-based purchasing model, upfront acquisition costs would increase to more than 1.5 million dollars annually. This represents an increase of more than twenty times the amount currently required to acquire these medications. For a hospital of our size, advancing purchases at that scale prior to reimbursement is substantial. Critical Access Hospitals do not maintain large discretionary reserves, and significant fluctuations in expense timing require careful balancing against payroll, supply costs, and facility maintenance obligations. The concentration of more than one million dollars in additional advance drug purchasing within a single category of medications materially alters financial planning assumptions. Even when reimbursement is ultimately received, the timing and reconciliation process introduce uncertainty that must be actively managed. A rebate framework would also require ongoing monitoring of manufacturer repayment, review of claim-level data, reconciliation of payment variances, and coordination between pharmacy and finance personnel. In small hospitals, these responsibilities are often handled by teams with overlapping roles rather than dedicated rebate management staff. Critical Access Hospitals serve geographically isolated communities where alternative care options are limited. Financial adjustments in one operational area can have cascading effects across the organization. The 340B program has historically provided pricing certainty at the time of acquisition, allowing rural providers to sustain access to medications close to home. Any proposed modification should carefully evaluate how significant increases in advance purchasing requirements would affect small hospitals operating with limited margin for variability. We appreciate HRSAs thoughtful consideration of these concerns.
HRSA-2026-0001-0010RiverView Health2026-02-24T05:00Z5,536 chars
See attached file(s) HRSA RFI Response Critical Access Hospital (Minnesota) Submitted on behalf of a Critical Access Hospital located in Minnesota Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a Critical Access Hospital serving a rural Minnesota community, we are concerned about the operational and administrative implications of transitioning from a point-of-sale discount structure to a manufacturer rebate framework. While the estimated IRA-related impact represents approximately five percent of our overall 340B program value, even modest percentage shifts are meaningful for rural hospitals operating on thin margins. More significantly, the proposed rebate model introduces administrative complexity that would disproportionately burden small safety-net providers. Critical Access Hospitals operate with lean staffing models. Pharmacy, finance, compliance, and revenue cycle responsibilities frequently overlap, and teams already manage substantial regulatory and reporting requirements. A rebate-based framework would require additional claims-level tracking, reconciliation of manufacturer payments, monitoring of rebate timeliness, and resolution of disputes related to denials or underpayments. For small rural hospitals, this represents a material operational redesign rather than a minor procedural adjustment. Unlike large health systems, Critical Access Hospitals do not maintain specialized rebate management infrastructure or dedicated adjudication teams. The administrative cost of implementing and maintaining rebate monitoring processes would reduce the overall value of the 340B program and divert limited resources away from patient care. The current 340B structure allows covered entities to realize savings at the point of purchase, enabling predictable budgeting and reinvestment into community services. Converting that structure into a post-purchase reimbursement model shifts financial and administrative risk onto providers that are already operating with limited staffing and constrained margins. Minnesotas existing state protections related to manufacturer restrictions further complicate this landscape. Introducing a federal rebate model layered onto current state law could create additional compliance complexity and duplicative oversight obligations for rural hospitals attempting to remain compliant in both regulatory environments. The 340B program plays a critical role in sustaining access to care in rural communities. Any structural change that increases administrative burden and shifts risk onto small safety-net providers warrants careful evaluation. We appreciate HRSAs consideration of the operational realities facing Critical Access Hospitals. HRSA RFI Response Critical Access Hospital (Minnesota) Submitted on behalf of a Critical Access Hospital located in Minnesota Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a Critical Access Hospital serving a rural Minnesota community, we are concerned about the operational and administrative implications of transitioning from a point-of-sale discount structure to a manufacturer rebate framework. While the estimated IRA-related impact represents approximately five percent of our overall 340B program value, even modest percentage shifts are meaningful for rural hospitals operating on thin margins. More significantly, the proposed rebate model introduces administrative complexity that would disproportionately burden small safety-net providers. Critical Access Hospitals operate with lean staffing models. Pharmacy, finance, compliance, and revenue cycle responsibilities frequently overlap, and teams already manage substantial regulatory and reporting requirements. A rebate-based framework would require additional claims-level tracking, reconciliation of manufacturer payments, monitoring of rebate timeliness, and resolution of disputes related to denials or underpayments. For small rural hospitals, this represents a material operational redesign rather than a minor procedural adjustment. Unlike large health systems, Critical Access Hospitals do not maintain specialized rebate management infrastructure or dedicated adjudication teams. The administrative cost of implementing and maintaining rebate monitoring processes would reduce the overall value of the 340B program and divert limited resources away from patient care. The current 340B structure allows covered entities to realize savings at the point of purchase, enabling predictable budgeting and reinvestment into community services. Converting that structure into a post-purchase reimbursement model shifts financial and administrative risk onto providers that are already operating with limited staffing and constrained margins. Minnesotas existing state protections related to manufacturer restrictions further complicate this landscape. Introducing a federal rebate model layered onto current state law could create additional compliance complexity and duplicative oversight obligations for rural hospitals attempting to remain compliant in both regulatory environments. The 340B program plays a critical role in sustaining access to care in rural communities. Any structural change that increases administrative burden and shifts risk onto small safety-net providers warrants careful evaluation. We appreciate HRSAs consideration of the operational realities facing Critical Access Hospitals.
HRSA-2026-0001-0011Chattanooga C.A.R.E.S., Inc. dba Cempa Community Care2026-02-24T05:00Z4,881 chars
See attached file(s) Submitted via Federal Register March 1, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Director Britton: On behalf of Cempa Community Care, a Federally Qualified Health Center Look-Alike and Ryan White provider serving Tennessee, we submit the following comments regarding the proposed 340B Rebate Model Pilot Program. Cempa provides comprehensive primary care, infectious disease specialty services, behavioral health, dental services, and pharmacy services to underserved and medically vulnerable populations. The 340B Drug Pricing Program is not a peripheral financing mechanism for our organization; it is a core structural support that enables medication access, clinical expansion, and sustained care delivery in communities with significant health disparities. How Cempa Uses 340B Savings Savings generated through the 340B Program are reinvested directly into patient care and operational sustainability. These funds support medication affordability, pharmacy infrastructure, integrated behavioral health, care coordination, HIV and STD services, and expanded access in medically underserved areas. The program allows us to extend services beyond what traditional reimbursement structures would support. We are personally and institutionally invested in the integrity of the 340B Program. In Tennessee, our education and advocacy efforts contributed to the enactment of the first state law prohibiting for-profit participation as an STD in-kind 340B covered entity. That policy reform was grounded in a simple principle: 340B eligibility should align with public health accountability and oversight. Position on the Rebate Model Based on our experience operating within tight margins and complex compliance requirements, Cempa does not support the implementation of a rebate-based payment model under the 340B Program. The current upfront discount structure provides predictability, transparency, and operational stability. A rebate-based model would shift financial risk, administrative burden, and compliance exposure onto covered entities without demonstrating a clear improvement in patient access or program integrity. Key Concerns Administrative Burden and Cost A rebate model would require significant expansion of staffing, IT systems, vendor contracts, and compliance infrastructure. For safety-net providers, these additional costs would reduce the very savings the program is intended to generate. Cash Flow Risk Requiring covered entities to purchase drugs at full price and await manufacturer reimbursement introduces material financial instability. Even modest reimbursement delays could disrupt pharmacy operations and patient access. Rebate Denials and Disputes Experience in other rebate environments demonstrates that payment delays, denials, and protracted appeals are common. Safety-net providers are not structured to absorb these risks without consequences to care delivery. Expanded Claims-Level Reporting Additional claims-level reporting requirements would create operational strain and compliance complexity without clear evidence that such data collection would meaningfully improve duplicate discount prevention or oversight. Program Integrity Considerations Cempa strongly supports appropriate oversight and accountability within the 340B Program. However, we do not believe a rebate-based structure is necessary to achieve those objectives. In fact, there is a separate and significant program integrity issue that warrants attention: the rapid and explosive growth of STD in-kind designations nationally. Unlike traditional covered entities such as FQHCs, these entities are not subject to the same level of grant oversight, reporting requirements, audit scrutiny, or reinvestment transparency. In many instances, they do not receive grant funding, yet they benefit from 340B eligibility without equivalent compliance structures. Addressing rebate mechanics will not solve these underlying accountability gaps. If HRSAs objective is to strengthen program integrity, policy attention should focus on ensuring consistent oversight standards across all covered entity types. Conclusion Cempa respectfully urges HRSA not to proceed with a rebate-based payment model. Any reforms to the 340B Program should preserve the upfront discount structure, avoid shifting financial risk to safety-net providers, and focus on strengthening oversight mechanisms where disparities currently exist. We remain committed to partnering with HRSA to protect both patient access and program integrity. Sincerely, Shannon Burger, DSc, MBA, CPA Chief Executive Officer
HRSA-2026-0001-0012Trade Alliance to Promote Prosperity2026-02-24T05:00Z10,606 chars
Comments Supporting the 340B Rebate Model Pilot Program Executive Summary These comments respond to HRSAs Request for Information regarding the proposed 340B Rebate Model Pilot Program. The proposed rebate model: Is consistent with Section 340B of the Public Health Service Act (PHSA) (42 U.S.C. 256b). Is necessary to prevent unlawful duplicate discounts in light of the Medicare Drug Price Negotiation Program established under the Inflation Reduction Act (IRA) (42 U.S.C. 1320f et seq.). Imposes negligible financing costs on covered entities based on independent analysis. Enhances program integrity and transparency. Protects taxpayers from potentially billions of dollars in duplicate discounts. A claims-level rebate reconciliation mechanism is not only permissible under federal statuteit is increasingly necessary to harmonize overlapping federal drug pricing obligations. By preventing unlawful duplicate discounts and ensuring that manufacturers provide only the single discount required under law, the 340B rebate pilot protects funding for high-risk biomedical research and U.S. drug innovation, thereby maintaining U.S. leadership globally. By reducing billions in cost-shifting to the commercial market, it also helps stabilize premiums, limit upward pressure on list prices, and create a more predictable, accountable system that protects consumers and American global competitiveness. Therefore, HRSA should continue advancing the rebate model pilot and establish clear operational standards. See also the attachment. 1 Re: Request for Information 340B Rebate Model Pilot Program Federal Register Doc. No. 2026-03042 Agency: Health Resources and Services Administration (HRSA) Submitted by: Trade Alliance to Promote Prosperity Kent Kaiser, Ph.D., Executive Director www.promote-trade.org Comments Supporting the 340B Rebate Model Pilot Program Executive Summary These comments respond to HRSAs Request for Information regarding the proposed 340B Rebate Model Pilot Program. The proposed rebate model: Is consistent with Section 340B of the Public Health Service Act (PHSA) (42 U.S.C. 256b). Is necessary to prevent unlawful duplicate discounts in light of the Medicare Drug Price Negotiation Program established under the Inflation Reduction Act (IRA) (42 U.S.C. 1320f et seq.). Imposes negligible financing costs on covered entities based on independent analysis. Enhances program integrity and transparency. Protects taxpayers from potentially billions of dollars in duplicate discounts. A claims-level rebate reconciliation mechanism is not only permissible under federal statuteit is increasingly necessary to harmonize overlapping federal drug pricing obligations. By preventing unlawful duplicate discounts and ensuring that manufacturers provide only the single discount required under law, the 340B rebate pilot protects funding for high-risk biomedical research and U.S. drug innovation, thereby maintaining U.S. leadership globally. By reducing billions in cost-shifting to the commercial market, it also helps stabilize premiums, limit upward pressure on list prices, and create a more predictable, accountable system that protects consumers and American global competitiveness. Therefore, HRSA should continue advancing the rebate model pilot and establish clear operational standards. 2 I. Statutory Framework Governing 340B Pricing A. 340B Ceiling Price Requirements Section 340B(a)(1) of the PHSA requires manufacturers participating in Medicaid to enter into a pharmaceutical pricing agreement under which covered outpatient drugs shall be made available to covered entities at or below the statutory ceiling price (42 U.S.C. 256b(a)(1)). The ceiling price formula incorporates the Medicaid Drug Rebate Program (MDRP) average manufacturer price (AMP) and unit rebate amount (URA) pursuant to 42 U.S.C. 256b(a)(1) and 42 U.S.C. 1396r-8. The statute does not prescribe the delivery mechanism for effectuating the discount. Whether the discount is delivered upfront or through a post-sale rebate, the statutory requirement is satisfied so long as the covered entity ultimately receives the ceiling price required under 42 U.S.C. 256b(a)(1). B. Statutory Prohibition on Duplicate Discounts Section 340B(a)(5)(A) provides: A drug shall not be subject to both a discount under this section and a rebate under section 1927 of the Social Security Act (42 U.S.C. 256b(a)(5)(A)). This duplicate discount prohibition reflects congressional intent that manufacturers provide only one legally required price concession per unit. The Secretary and covered entities bear responsibility for ensuring compliance with this prohibition. II. Interaction with the Inflation Reduction Act (IRA) A. Maximum Fair Price Requirements The Inflation Reduction Act of 2022 (Pub. L. No. 117-169, 1100111003), codified at 42 U.S.C. 1320f et seq., established the Medicare Drug Price Negotiation Program and the Maximum Fair Price (MFP) requirement for selected drugs. Manufacturers must ensure that the negotiated MFP is made available to eligible Medicare beneficiaries and dispensing entities pursuant to 42 U.S.C. 1320f-2. B. Coordination Between 340B and MFP CMS guidance implementing the IRA confirms that manufacturers are not required to provide both: 1. A 340B ceiling price under 42 U.S.C. 256b; and 2. An MFP-based price concession under 42 U.S.C. 1320f et seq., for the same unit of drug. Where the 340B ceiling price is lower than the MFP, the manufacturer satisfies its statutory obligation by providing the lower 340B price, consistent with CMS Medicare Drug Price Negotiation Program Guidance (20232025). This statutory structure reinforces the core principle that a single unit may not be subject to multiple federally mandated discounts. 3 III. Legal Necessity of a Claims-Level Deduplication Mechanism Absent a standardized claims-level identification system: Manufacturers cannot reliably determine whether a dispensed unit was acquired at 340B pricing. The same unit could be subject to both a 340B discount and an MFP price concession. The statutory prohibition on duplicate discounts under 42 U.S.C. 256b(a)(5)(A) cannot be effectively enforced. Current replenishment models do not uniformly generate claims-level identifiers demonstrating that a specific dispensed unit received 340B pricing. The rebate model pilot introduces claims-level transparency necessary to: Identify 340B-eligible units; Reconcile price concessions; Prevent unlawful duplicate discounts. Public estimates suggest that, absent such a mechanism, duplicate discounts could total approximately $4 billion in 2026. While projections may vary, the compliance risk is structural and significant. The rebate model therefore serves as a necessary compliance mechanism to harmonize obligations under 42 U.S.C. 256b and 42 U.S.C. 1320f et seq. IV. Financial Impact on Covered Entities A. Independent Empirical Analysis An independent white paper by IQVIA examined the cash flow impact of a rebate-based 340B delivery model and found: Annual financing costs attributable to rebate timing would amount to less than 0.2% of a drugs list price, even under conservative assumptions. In many scenarios, providers financing costs remain unchanged or decrease. These findings directly rebut assertions that the rebate model would create material liquidity strain. B. Commercial Payment Cycles Standard commercial practice provides covered entities approximately 30 days to remit payment to wholesalers. The proposed rebate pilot requires manufacturers to remit rebates within 10 days. Under this structure: Rebate funds are typically received before wholesaler invoices are due. Working capital exposure is short-cycle and limited. The model does not require sustained floating of large unreimbursed balances. Accordingly, claims that the rebate model would destabilize covered entities lack empirical support. 4 V. Precedent for Rebate Mechanisms Rebate mechanisms are well-established within federal drug pricing programs, including: The Medicaid Drug Rebate Program under 42 U.S.C. 1396r-8; and AIDS Drug Assistance Programs (ADAPs), which use rebate mechanisms to achieve 340B-equivalent pricing. These precedents demonstrate that rebate-based pricing delivery is consistent with federal healthcare program operations and does not inherently threaten provider solvency. VI. Program Integrity and Oversight Government Accountability Office (GAO) and HHS Office of Inspector General (OIG) reports have identified limitations in claims-level transparency and duplicate discount prevention within the 340B program. The rebate model pilot: Introduces standardized claims data reporting; Enhances traceability of discounted units; Mitigates risk of diversion and duplicate discounts; Strengthens compliance with 42 U.S.C. 256b(a)(5)(A). By incorporating claims-level reconciliation, the pilot reduces exposure to unlawful duplicate price concessions and enhances statutory compliance. VII. Summary The proposed 340B rebate model pilot: 1. Is consistent with PHSA 340B(a)(1) and 340B(a)(5) (42 U.S.C. 256b). 2. Is necessary to prevent unlawful duplicate discounts in light of IRA MFP requirements (42 U.S.C. 1320f et seq.). 3. Imposes negligible financing costs on covered entities. 4. Enhances transparency and accountability. 5. Protects taxpayers from potentially billions of dollars in improper duplicate discounts. VIII. Bottom Line for American Global Leadership and American Consumers The 340B rebate pilot prevents unlawful duplicate discounts that could otherwise stack 340B pricing with Medicares Maximum Fair Price under the Inflation Reduction Act. By ensuring manufacturers provide only the one discount required by law, the pilot protects revenue needed to fund high-risk biomedical research and sustain U.S. leadership in global drug innovation. At the same time, preventing billions in duplicate discounts reduces cost-shifting into the commercial markethelping stabilize premiums and limit upward pressure on list prices. The result is a more predictable, accountable system that supports American competitiveness while helping protect consumers from higher healthcare costs. For these reasons, HRSA should continue advancing the rebate model pilot and establish clear operational standards.
HRSA-2026-0001-0013PhRMA2026-02-24T05:00Z4,186 chars
See attached file 670 Maine Avenue, SW Suite 1000, Washington, DC 20024 PHRMA.ORG February 24, 2026 VIA ELECTRONIC FILING http://www.regulations.gov Mr. Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fisher Lane Rockville, MD 20857 Dear Administrator Engels: The Pharmaceutical Research and Manufacturers of America (PhRMA) is pleased to see the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) titled Request for Information: 340B Rebate Model Pilot Program soliciting comment and information to inform a potential new 340B Rebate Model Pilot Program.1 We fully support the agencys efforts to gather input from all stakeholders to inform its consideration of a potential new rebate model pilot, and we intend to submit comments in response to the RFI by the comment submission deadline. It has come to our attention that some stakeholders have asked HRSA to extend the timeline for stakeholder comments on the RFI until April 20, 2026. We respectfully submit that the 33 days notice established by the operative deadline for submitting comments on the RFI affords stakeholders a reasonable and sufficient opportunity to provide meaningful input. Thirty-day comment periods are commonplace even where notice-and-comment is required under the Administrative Procedure Act or another legal provision. Moreover, with respect to this particular RFI, stakeholders have previously engaged extensively with the agency on the use of rebate mechanisms in the 340B program, including in connection with HRSAs previous effort to launch a rebate pilot program. Extending the RFIs comment period beyond March 19, 2026, would further delay any implementation of a rebate model pilot, the need for which HRSA has already recognized. An extension also would impair the interests HRSA previously acknowledged warrant action through a rebate pilot by postponing the agencys ability to evaluate stakeholder input and consider implementation of a rebate model. We therefore urge the agency to consider the costs to manufacturers (including in the form of duplicate 340B and Inflation Reduction Act (IRA) discounts, which are inconsistent with the IRA) of delaying consideration of information relevant to a potential new 340B rebate model pilot. For the reasons discussed above, we respectfully urge HRSA to proceed on the timeline set forth in the RFI, including adherence to the current comment period. Maintaining the existing timeline will facilitate full and appropriate stakeholder participation while avoiding unnecessary delay in the agencys consideration of a rebate model pilot. 1 91 Fed. Reg. 7287 (Feb. 17, 2026). 670 Maine Avenue, SW Suite 1000, Washington, DC 20024 PHRMA.ORG We also wish to bring to HRSAs attention an internal inconsistency in the RFI regarding the treatment of confidential business information for which clarification might help ensure meaningful input is not unduly withheld. In several places, the RFI states that responses will be publicly posted in their entirety and without change.2 By contrast, the ADDRESSES section instructs commenters to refrain from including confidential business information you do not want publicly disclosed, while also stating that [a]ny proprietary information on comments will not be publicly posted.3 Because the RFI solicits information that may be proprietary or commercially sensitive, HRSA may wish to clarify (1) whether proprietary information can be submitted and if so, the method for submitting such information; and (2) the manner in which the agency will treat and protect any such information submitted. We appreciate HRSAs consideration of these comments and look forward to continued engagement as the agency further considers a 340B rebate model. Sincerely, /s/ James C. Stansel Executive Vice President and General Counsel 2 Id. at 7287 ([a]ll comments received will be posted without change to [regulations.gov]) and 7291 (HRSA shall publicly post the public comments received in their entirety). 3Id. at 728788.
HRSA-2026-0001-0014Anonymous Anonymous2026-02-24T05:00Z3,340 chars
HRSA RFI Response 340B Consulting Organization Submitted on behalf of a 340B consulting firm serving covered entities across multiple states Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. Our firm works directly with covered entities across the 340B landscape, including Critical Access Hospitals, Sole Community Hospitals, Disproportionate Share Hospitals, and HRSA-funded health centers. We support compliance oversight, financial modeling, audit readiness, and day-to-day operational management. Our perspective is grounded in the practical realities of how the program functions on the ground. In response to this RFI, we conducted rebate impact modeling across a range of entity types and drug portfolios. What became immediately clear is that the effect of a rebate model is highly variable. For some small rural hospitals, IRA-affected drugs would require advancing ten to forty times their current acquisition amount before reimbursement. For larger hospitals, the more significant issue is claims volume, reconciliation complexity, and manufacturer-specific variability. For HRSA-funded health centers, the interaction between grant-based budgeting and increased advance purchasing obligations presents a different operational challenge. This is not simply a policy discussion. It affects how covered entities operate day to day. Administrative Execution A rebate model requires claims-level identification, data validation, submission tracking, monitoring of manufacturer repayment, reconciliation of discrepancies, and documentation retention. Even where third-party administrators are engaged, oversight responsibility ultimately remains with the covered entity. Many smaller organizations do not maintain dedicated rebate management staff. Additional monitoring functions would need to be absorbed within existing teams that are already managing compliance, audit preparation, and reporting requirements. Payment Timing and Reliability Defined reimbursement timelines are important. However, consistency in execution is equally critical. Even small documentation disputes or data mismatches can create delays that require follow-up and manual reconciliation. For entities operating with limited reserves, the time between purchase and repayment has direct implications for financial planning. That dynamic should not be underestimated. Standardization and Guardrails If a rebate model is pursued, standardization will be essential. Uniform submission formats, clearly defined denial criteria, and transparent adjudication timelines will determine whether the model remains manageable or becomes administratively burdensome. From our vantage point working alongside covered entities daily, predictability matters as much as pricing. The 340B Program has functioned as an upfront discount program for more than thirty years. Transitioning to a rebate-based structure is not simply a change in payment sequence. It introduces new monitoring responsibilities and alters established workflows across pharmacy and finance operations. We appreciate HRSAs deliberate approach in seeking stakeholder input and encourage careful consideration of operational feasibility, execution consistency, and administrative clarity before advancing a rebate framework.
HRSA-2026-0001-0015Anita Bennett · Midlothian, VA, United States2026-02-24T05:00Z9,521 chars
Re: HRSA RFI Potential Use of Rebates to Effectuate the 340B Ceiling Price On behalf of our community health center, a federally qualified health center with a special population designation as a Healthcare for the Homeless (HCH) grantee, I appreciate the opportunity to respond to HRSAs Request for Information regarding a potential rebate model under the 340B Drug Pricing Program. Our organization serves patients who are disproportionately uninsured, underinsured, experiencing homelessness, and living with complex chronic and behavioral health conditions. For our patients, access to affordable medications is often the difference between stability and crisis. The current upfront discount structure under 340B allows community health centers (CHCs) to stretch scarce federal resources and reinvest savings directly into patient care. A rebate model would fundamentally shift financial risk onto safety-net providers. Unlike large hospital systems, CHCs do not have significant reserves or access to large lines of credit. We operate on thin margins, and 340B savings are not surplus revenue, they are reinvested into enabling services such as outreach, case management, behavioral health, substance use treatment, transportation, and sliding-fee care. Under a rebate model, CHCs would be required to purchase medications at wholesale acquisition cost and wait for manufacturer rebates after dispensing and claims adjudication. For our organization, this would require: Carrying substantial upfront medication costs. Potentially securing a line of credit or loan to finance drug inventory. Absorbing interest expenses while awaiting rebate reconciliation. Managing cash flow uncertainty tied to rebate timing and accuracy. The interest expense alone would erode the very savings Congress intended to support patient care. For a safety-net provider serving individuals experiencing homelessness, many of whom require high-cost specialty or behavioral health medications, this risk is unsustainable. Administrative burden and operational costs would further diminish savings. A rebate framework would require new infrastructure for tracking, reconciliation, dispute resolution, and compliance. CHCs would likely need to: Hire dedicated staff to manage rebate submissions and oversight; or Contract with third-party administrators who charge fees. Either option diverts limited 340B savings away from patient services. For smaller and mid-sized CHCs, the fixed administrative cost per prescription would disproportionately impact operations and weaken program value. Patient access risks are significant. Healthcare for the Homeless programs care for patients who are often late to care, have high acuity, and face barriers to medication adherence. Any disruption in medication access, whether due to inventory constraints, cash flow delays, or administrative errors, would directly impact patient health. Delays in access to antipsychotics, insulin, HIV medications, or substance use treatment medications can result in hospitalization, emergency department utilization, or loss of housing stability. The current upfront discount model provides predictability and immediate purchasing power. A rebate system introduces uncertainty into drug availability and threatens continuity of care. Conclusion The 340B Program was designed to strengthen the healthcare safety net, not shift financial and administrative risk onto it. For community health centers, particularly Healthcare for the Homeless grantees, a rebate model would: Increase financial exposure Add administrative burden Reduce net savings available for patient care Weaken, rather than strengthen, the safety net We respectfully urge HRSA to carefully consider the disproportionate impact a rebate framework would have on community health centers and the medically vulnerable populations we serve. Any changes to the 340B structure must preserve upfront discounts, protect cash flow stability, and ensure that safety-net providers are not required to assume risks they are not financially equipped to bear. Excluding or exempting CHCs from the rebate program would also provide data and transparency about the true utilization of the 340B program for future decision-making. Please EXCLUDE CHCs from the 340B rebate program. Thank you for the opportunity to provide input on this critical issue. Re: HRSA RFI Potential Use of Rebates to Effectuate the 340B Ceiling Price population designation as a Healthcare for the Homeless (HCH) grantee, I appreciate the opportunity to respond to HRSA's Request for Information regarding a potential rebate model under the 340B Drug Pricing Program. Our organization serves patients who are disproportionately uninsured, underinsured, experiencing homelessness, and living with complex chronic and behavioral health conditions. For our patients, access to affordable medications is often the difference between stability and crisis. The current upfront discount structure under 340B allows community health centers (CHCs) to "stretch scarce federal resources" and reinvest savings directly into patient care. A rebate model would fundamentally shift financial risk onto safety-net providers. Unlike large hospital systems, CHCs do not have significant reserves or access to large lines of credit. We operate on thin margins, and 340B savings are not surplus revenue, they are reinvested into enabling services such as outreach, case management, behavioral health, substance use treatment, transportation, and sliding-fee care. Under a rebate model, CHCs would be required to purchase medications at wholesale acquisition cost and wait for manufacturer rebates after dispensing and claims adjudication. For our organization, this would require: Carrying substantial upfront medication costs. Potentially securing a line of credit or loan to finance drug inventory. . Absorbing interest expenses while awaiting rebate reconciliation. . Managing cash flow uncertainty tied to rebate timing and accuracy. The interest expense alone would erode the very savings Congress intended to support patient care. For a safety-net provider serving individuals experiencing homelessness, many of whom require high-cost specialty or behavioral health medications, this risk is unsustainable. Administrative burden and operational costs would further diminish savings. A rebate framework would require new infrastructure for tracking, reconciliation, dispute resolution, and compliance. CHCs would likely need to: Hire dedicated staff to manage rebate submissions and oversight; or Contract with third-party administrators who charge fees. Either option diverts limited 340B savings away from patient services. For smaller and mid-sized CHCs, the fixed administrative cost per prescription would disproportionately impact operations and weaken program value. Patient access risks are significant. Re: HRSA RFI Potential Use of Rebates to Effectuate the 340B Ceiling Price On behalf of our community health center, a federally qualified health center with a special population designation as a Healthcare for the Homeless (HCH) grantee, I appreciate the opportunity to respond to HRSA's Request for Information regarding a potential rebate model under the 340B Drug Pricing Program. Our organization serves patients who are disproportionately uninsured, underinsured, experiencing homelessness, and living with complex chronic and behavioral health conditions. For our patients, access to affordable medications is often the difference between stability and crisis. The current upfront discount structure under 340B allows community health centers (CHCs) to "stretch scarce federal resources" and reinvest savings directly into patient care. A rebate model would fundamentally shift financial risk onto safety-net providers. Unlike large hospital systems, CHCs do not have significant reserves or access to large lines of credit. We operate on thin margins, and 340B savings are not surplus revenue, they are reinvested into enabling services such as outreach, case management, behavioral health, substance use treatment, transportation, and sliding-fee care. Under a rebate model, CHCs would be required to purchase medications at wholesale acquisition cost and wait for manufacturer rebates after dispensing and claims adjudication. For our organization, this would require: Carrying substantial upfront medication costs. Potentially securing a line of credit or loan to finance drug inventory. - Absorbing interest expenses while awaiting rebate reconciliation. Managing cash flow uncertainty tied to rebate timing and accuracy. The interest expense alone would erode the very savings Congress intended to support patient care. For a safety-net provider serving individuals experiencing homelessness, many of whom require high-cost specialty or behavioral health medications, this risk is unsustainable. Administrative burden and operational costs would further diminish savings. A rebate framework would require new infrastructure for tracking, reconciliation, dispute resolution, and compliance. CHCs would likely need to: Hire dedicated staff to manage rebate submissions and oversight; or Contract with third-party administrators who charge fees. Either option diverts limited 340B savings away from patient services. For smaller and mid-sized CHCs, the fixed administrative cost per prescription would disproportionately impact operations and weaken program value. Patient access risks are significant.
HRSA-2026-0001-0016Consumer Choice Center2026-02-25T05:00Z8,788 chars
Please see attached file for comments. Health Resources and Services Administration Request for Information: 340B Rebate Model Pilot Program Thomas J. Engels, Administrator 340Bpricing@hrsa.gov Comment of Consumer Choice Center Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Submitted via: Regulations.gov (per RFI instructions) I. Introduction The Consumer Choice Center (CCC) appreciates HRSAs Request for Information (RFI) regarding whether and how to implement a rebate model to effectuate the 340B ceiling price, and HRSAs stated intent to evaluate operational impacts, financial impacts, and access to drugs for patients across the supply chain. II. CCCs core concern: todays 340B often benefits providers and intermediaries, while patients still face high prices and medical debt Congresss stated intent for 340B was to help covered entities stretch scarce Federal resources... reaching more eligible patients and providing more comprehensive services. In practice, however, the structure of modern 340B can allow providers and third-party administrators to capture the value of 340B discounts without reliably reducing what patients pay at the pharmacy counter or on their medical bills. The Consumer Choice Centers analysis highlights that the programs growth and complexity has produced a large industry of middlemen whose business depends on processing more 340B activity, making weak controls a major policy problem, not a technical footnote. Most importantly for patients, CCC has described a core issue in plain terms: eligibility is often determined after dispensing, typically by the covered entity or its hired administratormeaning the discount can become a back-end revenue stream rather than a front-end reduction in patient cost. That reality is especially troubling in a system where medical debt is widespread: KFF estimates at least $220 billion in medical debt nationally, and KFF reports that in 2022 about four in ten adults (41%) had medical or dental debt under a broad definition. Federal oversight work also underscores the patient-benefit gap. GAO reported that among 55 covered entities responding to its questionnaire, 25 said they did not offer discounts at their contract pharmacies, and GAO further noted that passing discounts to patients is not a requirement of the 340B Program (with some separate grant-related obligations for certain grantees). HHS OIG likewise found that some covered entities do not offer the discounted 340B price to uninsured patients in their contract pharmacy arrangements, even as contract pharmacy arrangements complicate diversion and duplicate discount prevention. III. CCCs recommendation: if HRSA tests a rebate model, the pilot must be explicitly patient-centeredand measure reductions in out-of-pocket costs and medical debt We agree that a rebate model can improve integrity because it changes the order of operations from trust and clean up later to verify first, then pay, tying the discount to verified eligibility. HRSAs RFI explains that manufacturer proposals generally would require covered entities to purchase at a higher price and then receive a rebate reflecting the difference between that initial price and the 340B pricei.e., shifting from an up-front discount to a rebate framework. But CCC urges HRSA not to treat this as merely a payment-mechanics exercise between manufacturers and covered entities. A pilot should directly confront the central legitimacy problem: when 340B value accrues to providers while patients still pay full price, the programs purpose is not being met. Ultimately, patients should benefit from the discount and not the profit and loss statement of a hospital that knows how to game the system. Accordingly, the Consumer Choice Center recommends that HRSA condition pilot participation on demonstrable, auditable patient benefit, especially for uninsured and underinsured patients most at risk of medical debt. Patient-centered recommendations responsive to HRSAs targeted areas Costs to covered entities: require transparency and align administrative effort with patient benefit HRSA asks stakeholders to describe current administrative costs and estimate incremental costs under a rebate model, including staffing, IT, vendors, and compliance. We recognize that a rebate model can introduce new workflows. However, todays program already relies heavily on post-dispense labeling and reconciliation, often through hired administrators. CCC recommends HRSA require: A single, standardized submission format (to avoid multiplying vendor complexity); and Full transparency on administrator fees and incentive structures, given the growth of third-party middlemen business models that expand with more 340B processing. Payment timing and cash-flow: do not allow a pilot that protects institutional cash flow while patients keep paying full price HRSA requests input on cash-flow impacts and how a rebate timeline could function. CCCs view is simple: a pilot that improves payment certainty for institutions but does not change what patients pay will fail the consumer test. The Consumer Choice Center recommends: Enforceable, short payment timelines for rebates/denials (with standardized denial codes); and A parallel patient-facing requirement: participating entities must provide either (a) an up-front discounted price for uninsured patients, or (b) a rapid, automatic refund/credit mechanism linked to the same claim identifiers. Rebate denials: standardized reasons, fast cures, and dispute transparency HRSA seeks comment on guardrails and process for denials. CCC recommends: Denials limited to objective reasons (e.g., duplicate discount confirmed; missing required fields; clear ineligibility); Standard denial codes and cure windows; Data collection: include patient benefit and medical debt mitigation metrics, not just eligibility mechanics HRSA requests input on data elements and reporting. The Consumer Choice Center agrees that claims-level data are necessary for verification and non-duplication. This needs to be consistent with the rationale for verify first, pay later. But HRSA should also require data that answers the publics most important question: did patients actually benefit? Program integrity: define integrity as both correct pricing and faithful delivery of benefits to patients HRSA asks whether a rebate model improves integrity, reduces diversion/improper claims, and improves transparency. CCC agrees a rebate model can improve integrity by tying discounts to verified eligibility rather than after-the-fact labeling. But the Consumer Choice Center emphasizes that integrity should also mean the program actually advances its patient-serving purpose: Particularly for uninsured patients, where GAO and OIG findings show patient discounts are inconsistent at contract pharmacies. Conclusion The 340B Program now operates at enormous scaleHRSA cites approximately 14,000 covered entities, 800 manufacturers, and $81.4 billion in covered outpatient drug purchases in 2024making it even more important that the programs benefits are visible and patient-centered. In a country where medical debt is widespread and measured in the hundreds of billions of dollars, 340B cannot credibly remain a program where savings often accrue to institutions while patients still face high costs and financial distress. If HRSA proceeds with a rebate pilot, CCC urges HRSA to make patient benefit a condition of participation and a measured outcome, including explicit metrics tied to reduced out-of-pocket costs and reduced medical debt. Respectfully submitted, Fred Roeder Health Economist and Managing Director Consumer Choice Center About the Consumer Choice Center (CCC): CCC is an independent, non-partisan consumer advocacy group that champions freedom of choice, innovation, and abundance in everyday life. We advocate for policies that are fit for growth, defend lifestyle choice, and embrace technological innovation, using research and educational outreach to policymakers and the broader public. CCC empowers consumers to raise their voice in the media, online, and in civic life, and is active internationally. CCC was launched in 2017 and later became an independent U.S.-based 501(c)(4) organization. Fred Roeder is a health economist and managing director of the Consumer Choice Center. He has worked in healthcare reform in North America and Europe. One of his passions is to analyze how disruptive industries and technologies allow patients more choice at a lower cost. He also loves researching how innovation makes our lives better, healthier, and longer.
HRSA-2026-0001-0017Aventi Health2026-02-25T05:00Z2,696 chars
Hello, I HRSA and HHS should take a step back and ask the question: If 340B claims are provided to manufacturers to ensure accurate and comprehensive identification of 340B qualified prescriptions in a timely manner. What benefit or purpose is there of a rebate-type model versus the current point of sale discount given for 340B pricing? A proponent of a rebate model might say that it is necessary in order to avoid "pay and chase" where duplicate discounts/rebates are given and determined retrospectively putting a manufacturer in a position to have to recover the duplicate dollar amount. This argument is null if data is made available to ensure that no further rebates or discounts are granted to any other stakeholder, whether the intersection be in Medicaid, MFP/IRA, commercial or anywhere else. Think of each transaction as having only one slot for a discount. If 340B occupies the slot, then all other rebates/discounts do not need to be given. A rebate model simply isn't necessary in order to accomplish the goal of preventing duplicate discounts if data is provided. Additionally, 340B claims data is already being shared with industry point solutions. A further question would be, if data is already being shared with manufacturers through these channels, then why aren't duplicate discounts being prevented. That answer would have to be given by these technology companies. I would urge HHS to consider that Beacon and 340B ESP (BRG) are for profit companies and stand to gain financially by pushing a rebate model however as explained above, the rebate model is not necessary if data is collected. Instead of a rebate model, we need to focus on sharing comprehensive 340B claims data with manufacturers. This has to be done in an organized fashion and done through the right channels. A "neutral" clearinghouse would not be the correct pathway either as a "neutral" party is only neutral until they aren't. Think of Facebook. Facebook is/was free until ads began to takeover so its not neutral any longer. The solution lies in agent representing the 340B community and agent representing the pharmaceutical manufacturer community. Just like in any negotiation, mediation or transaction, each sides interests are considered and enforced. Again, don't be fooled into going down the rebate model path without first taking a step back and asking why or is there another way. The answer should be clear especialy considering that data is a requirement for 340B entities for the now dropped rebate pilot, so again, if data is/was part of the equation to be shared, what purpose or benefit is the rebate model aside than giving BRG/Second Sight Solutions another way to make money.
HRSA-2026-0001-0018Pueblo Community Health Center2026-02-25T05:00Z2,997 chars
See attached file(s) 110 East Routt Avenue, Pueblo, CO 81004 (719) 543-8711 www.PuebloCHC.org Submitted via Federal Register February 25, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Director Britton: I am submitting these comments on behalf of Pueblo Community Health Center (PCHC), Inc., Pueblo, Colorado, a federally qualified health center participating in the 340B Drug Pricing Program. We serve Pueblo and adjacent counties in southern Colorado. In 2025, we provided care to ~26,600 patients. The 340B Program is critical to our mission and investments in delivering access to high quality medical, dental, behavioral, perinatal, and pharmacy care. How We Use 340B. Savings and revenue generated through the 340B Program are used by PCHC to support patient care and operations, including: Offering prenatal outreach clinics in rural communities without access to this care Offering low-cost prescription medicine to patients, i.e., nominal co-payments Group mental health therapy sessions Services that are not reimbursable that address social determinants of health such as case management, health education, patient navigation, and care coordination Capital investments that provide more space to expand services These uses are directly tied to our mission and allow us to operate effectively within limited financial margins. We do not support implementing a rebate-based payment model under the 340B Program. The current model provides predictable pricing and minimizes administrative complexity. A rebate-based approach would require financial capacity we dont possess and add to our paperwork and compliance risks. Cash Flow. We dont have cash reserves to finance the time between providing 340B medicines to patients and waiting for the rebate. Administrative Burden and Cost. A rebate model would require, at a minimum, 1.0 FTE to manage the added work, which diverts funds away from patient care. Rebate Denials and Disputes. Payment delays, denials, and resource-intensive appeals processes would add to financial strain and administrative effort. Data Collection and Reporting. Expanded claims-level data requirements would strain existing systems and could increase our vendor costs. Program Integrity. Existing regulations place significant compliance responsibility on covered entities and provide a path for drug companies to prevent 340B program diversion. We respectfully ask HRSA not to move forward with a rebate-based payment model. In fact, I request that federal qualified health centers be exempted from the rebate model program if it is initiated. Thank you for the opportunity to provide input. Sincerely, Donald Moore, MHA, FACMPE Chief Executive Officer dmoore@pueblochc.org
HRSA-2026-0001-0019(no commenter metadata)2026-02-25T05:00Z1,934 chars
Dear HRSA Leadership, Thank you for the opportunity to comment on the proposed 340B rebate model. I serve as the Director of Pharmacy at a small rural hospital in Alaska. The 340B program is not simply a financial benefit for us, it is what allows us to sustain outpatient infusion services, expand medication access, and support Medicare and chronically ill patients in a geographically isolated community. We are concerned that moving from an upfront discount model to a rebate model would create significant financial and operational strain for rural hospitals like ours. Under a rebate system, we would be required to purchase medications at full price and wait for reimbursement. For a small hospital with limited cash reserves, even short delays in rebate payment could materially impact our ability to operate and reinvest in patient care. The uncertainty around timing and validation of rebates would introduce financial volatility that rural facilities are not equipped to absorb. In addition, the administrative burden of tracking claim-level data, submitting rebate requests to multiple manufacturers, reconciling payments, and managing disputes would require staffing and infrastructure that small hospitals simply do not have. These are resources that would otherwise be directed toward direct patient care. In frontier Alaska, patients already travel long distances and face significant access barriers. The 340B program helps us maintain local access to essential therapies. Any change that introduces financial uncertainty or operational complexity risks destabilizing services in communities that have no alternative provider options. We respectfully urge HRSA to carefully consider the disproportionate impact a rebate model would have on rural and critical access hospitals before expanding this approach. Thank you for your consideration and for your continued commitment to serving vulnerable communities.
HRSA-2026-0001-0020Knox Community Hospital2026-02-26T05:00Z5,242 chars
See attached file(s) regarding HHS Docket No. HRSA-2026-03042 Knox Community Hospital February 16, 2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Knox Community Hospital appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Knox Community Hospital urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Alison Mills 340B Coordinator Knox Community Hospital Knox Community Hospital February 16, 2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Knox Community Hospital appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Knox Community Hospital urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Alison Mills 340B Coordinator Knox Community Hospital
HRSA-2026-0001-0021Anonymous Anonymous2026-02-26T05:00Z95 chars
NO ON THE REBATE PROGRAM - IT WILL BE DEVESTATING TO HEALTH CENTERS AND THE AMERICANS WE SERVE.
HRSA-2026-0001-0022McDonough District Hospital2026-02-26T05:00Z3,779 chars
HHS Docket No. HRSA-2026-03042 HRSA RFI Response Sole Community Hospital (Illinois) Submitted on behalf of a Sole Community Hospital located in Illinois Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Sole Community Hospital serving our region in Illinois, we provide critical inpatient and outpatient services to a population with limited alternative access points 24 hours a day every day of the year. Financial stability is central to sustaining those services. Our analysis of IRA-affected drugs, including high-volume therapies such as Eliquis and Jardiance, indicates that a rebate-based purchasing model would increase upfront acquisition costs from a relatively modest annual amount to more than three hundred thousand dollars. This represents an increase of more than eighteen times current levels for these medications alone. While rebate reimbursement may ultimately offset these costs, the requirement to advance substantially higher amounts prior to payment changes the financial dynamics of pharmacy operations. Sole Community Hospitals must manage drug purchasing carefully to maintain service continuity, particularly for widely prescribed chronic therapies that patients depend on consistently. Increased upfront acquisition requirements also introduce additional oversight responsibilities, including monitoring manufacturer repayment, reconciling variances, and addressing potential delays. These functions require coordination across pharmacy, finance, and compliance teams. Sole Community Hospitals occupy a distinct role within the healthcare landscape. Any adjustment to the 340B structure should account for the financial and operational balance required to sustain access in communities where provider options are limited. We appreciate HRSAs consideration of these perspectives as it evaluates the proposed rebate model. HRSA RFI Response Sole Community Hospital (Illinois) Submitted on behalf of a Sole Community Hospital located in Illinois Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a Sole Community Hospital serving our region in Illinois, we provide critical inpatient and outpatient services to a population with limited alternative access points 24 hours a day every day of the year. Financial stability is central to sustaining those services. Our analysis of IRA-affected drugs, including high-volume therapies such as Eliquis and Jardiance, indicates that a rebate-based purchasing model would increase upfront acquisition costs from a relatively modest annual amount to more than three hundred thousand dollars. This represents an increase of more than eighteen times current levels for these medications alone. While rebate reimbursement may ultimately offset these costs, the requirement to advance substantially higher amounts prior to payment changes the financial dynamics of pharmacy operations. Sole Community Hospitals must manage drug purchasing carefully to maintain service continuity, particularly for widely prescribed chronic therapies that patients depend on consistently. Increased upfront acquisition requirements also introduce additional oversight responsibilities, including monitoring manufacturer repayment, reconciling variances, and addressing potential delays. These functions require coordination across pharmacy, finance, and compliance teams. Sole Community Hospitals occupy a distinct role within the healthcare landscape. Any adjustment to the 340B structure should account for the financial and operational balance required to sustain access in communities where provider options are limited. We appreciate HRSAs consideration of these perspectives as it evaluates the proposed rebate model.
HRSA-2026-0001-0023Iroquois Healthcare Association2026-02-26T05:00Z25,432 chars
See attached file(s) for Iroquois Healthcare Association's public comments on HHS Docket No. HRSA 2026-03042. Please contact Lauren Ford at lford@iroquois.org with any questions. Kevin M. Kerwin, Esq. President and CEO Representing health care providers in Upstate and Rural New York ---------- 15 Executive Park Drive Clifton Park, New York 12065 Telephone (518) 383-5060 ---------- www.iroquois.org February 26, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Iroquois Healthcare Alliance (IHA), we appreciate the opportunity to submit comments on the Department of Health and Human Services (HRSA) Request for Information: 340B Rebate Model Pilot Program. IHA represents approximately 50 nonprofit and public hospitals and health systems across upstate and rural New York, the vast majority of which participate in the 340B program and depend on it to sustain essential services for their communities. We write in strong opposition to any shift away from the existing upfront discount model. The answer to whether HRSA should implement a rebate model is no. Our member hospitals serve some of the most medically underserved communities in New York State. Many operate as the sole source of inpatient care, labor and delivery services, and behavioral health treatment across entire counties. The 340B program is not a peripheral benefit for these institutions. It is a financial cornerstone that allows them to stretch limited resources, extend care to uninsured and low-income patients, and maintain services that would otherwise be financially unsustainable. Any mechanism that delays, complicates, or undermines access to 340B savings puts those services at risk. As described below, a rebate model would impose significant administrative, financial, and operational burdens on IHA member hospitals that far outweigh any potential benefits. More fundamentally, HRSA's interest in testing a rebate mechanism appears to rest on the incorrect premise that the agency must balance the interests of covered entities and pharmaceutical manufacturers when selecting a discount mechanism. That is not the standard. The statute requires that HRSA give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The upfront discount model has served that purpose since the program's inception in 1992. There is no sound basis for abandoning it now. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would impose significant new administrative costs on IHA member hospitals. These institutions designed their operations, staffing structures, and financial systems around the upfront discount model. A transition to a rebate mechanism is not a technical adjustment. It would require fundamental changes to how hospitals process claims, reconcile payments, manage cash flow, and interact with third-party administrators. Across our membership, hospitals have identified potential cost increases including: new or upgraded IT systems and data infrastructure, additional staffing or reallocation of existing clinical and administrative staff to compliance functions, new contracts with third-party administrators or vendors, legal and consulting costs associated with program implementation, and ongoing reconciliation and dispute resolution functions that do not exist under the current model. For smaller rural hospitals with lean administrative teams, even modest increases in compliance workload can have outsized impacts. HRSA's prior estimate of two additional hours per week bears no relationship to what our members have experienced or anticipate. If the pilot program were to expand beyond the original 10 drugs, these costs would multiply accordingly. More drugs mean more claims, more rebates to track and reconcile, more money that hospitals must float while awaiting reimbursement, and a greater likelihood of disputes and delays. Each of those outcomes reduces the resources available for direct patient care. Staffing Impacts Under a Potential 340B Rebate Program IHA member hospitals, particularly those in rural areas, consistently face workforce shortages. Most do not have excess administrative capacity to absorb new compliance obligations without either hiring additional staff or diverting existing employees from clinical and operational functions. A rebate model would require both. Hospitals have indicated they would need dedicated staff to manage claims submission, data validation, rebate tracking, and dispute resolution under a rebate model. In some cases, this would require diverting pharmacy staff or billing personnel who are currently focused on patient care activities. In rural communities where hiring qualified staff is already difficult and expensive, those transitions take time and come at a real cost. HRSA should not underestimate how disruptive that reallocation would be for hospitals that are already stretched thin. Systems and Infrastructure IHA member hospitals built their 340B program infrastructure around an upfront discount model. Their electronic health records, pharmacy systems, and third-party administrator relationships are configured accordingly. A shift to a rebate mechanism would require significant modifications to these systems. A core operational challenge involves medical claims data. Unlike pharmacy claims, medical claims data is typically housed in EHR systems that do not feed directly into third-party administrators. Providing that data for rebate submission would likely require manual processes, adding burden and increasing the risk of error. This is not a problem that can be solved simply by directing hospitals to use existing data feeds. The data flows do not exist in the form that a rebate model would require. Payment Timing and Cash Flow Impacts The upfront discount model allows hospitals to access 340B pricing at the point of purchase. A rebate model would require hospitals to pay full wholesale acquisition cost upfront and wait for reimbursement afterward. Even under the most favorable assumptions, that delay creates a real cash flow impact. For many IHA member hospitals, operating margins are already razor thin. Several operate under bond covenants or loan agreements that include liquidity requirements. Floating the difference between WAC and 340B ceiling prices, even for a limited drug list, could put those institutions in technical default or force them to draw down reserves that are critical to operations. HRSA's prior assertion that rebates would typically be paid before the wholesaler invoice is due does not reflect the financial realities of rural hospital operations. A 10-day payment window, if it were consistently honored, would help, but it would not eliminate the risk. Adverse Impacts on Member Hospitals and the Communities They Serve The cumulative effect of increased administrative costs, staffing burdens, and cash flow risk is straightforward: IHA member hospitals would have less money available for patient care. For hospitals that are already making difficult decisions about which services they can sustain, that reduction is not abstract. It translates directly into program cuts, service line reductions, and in some cases potential facility closures. Several IHA member hospitals use 340B savings to cross-subsidize services that are financially unsustainable on their own, including labor and delivery units, behavioral health programs, and outpatient clinics serving uninsured patients. These are services that exist because 340B savings make them possible. A rebate model that erodes those savings puts those services in jeopardy. In communities where IHA members are the only hospital within a reasonable distance, the consequences of service reductions are severe. IHA member hospitals also serve disproportionately high shares of Medicaid and uninsured patients. They are, by statutory definition, safety-net providers. HRSA should weigh the impact of this proposal with that context in mind. Reliance Interests The RFI invites comment on reliance interests in the upfront discount model. IHA's members have strong and reasonable reliance interests. Since the 340B program was created in 1992, covered entities have consistently obtained their statutory discounts through upfront pricing. Hospitals have structured their operations, staffing, vendor contracts, and financial planning around that model for more than 30 years. That is not incidental. It is the foundation on which 340B program participation is built. The RFI suggests that the mere existence of statutory authority to implement a rebate model implies that covered entities cannot reasonably rely on the current approach continuing. We disagree. Statutory authority is not the same as a signal of intent, and a decades-long administrative practice of providing upfront discounts creates precisely the kind of settled expectation that agencies must take seriously before changing course. HRSA has not identified a problem with the upfront discount model that would justify the disruption a rebate mechanism would cause. Concerns About Third-Party IT Platforms IHA has significant concerns about the use of third-party IT platforms to administer any rebate program. During the prior iteration of the Rebate Program, hospitals and their administrators encountered serious problems with the Beacon platform operated by Second Sight Solutions, including issues with terms and conditions, shifting data requirements, and inadequate customer service. Any future rebate model must include clear guardrails around platform governance, data security, and patient information protections. Covered entities must have meaningful recourse when platforms fail to perform. HRSA should not allow drug companies to define or control the technology infrastructure through which hospitals access their statutory discounts. Alternatives to a Rebate Model IHA supports the position that there are viable, less burdensome alternatives to a rebate model that could address any legitimate 340B/MDPNP deduplication concerns. In particular, we urge HRSA to explore a neutral third-party clearinghouse approach. Such a model could achieve the same deduplication objectives without requiring hospitals to pay full price upfront, restructure their IT systems, or take on the administrative burden of a rebate-based compliance framework. To date, IHA member hospitals have not reported widespread 340B/MDPNP deduplication problems that would necessitate a structural overhaul of the discount mechanism. The rebate model is not a solution to a problem our members have identified. It is a proposal that creates new problems in the name of solving ones that have been manageable under the current system. If HRSA can identify no less burdensome alternative, it must at minimum provide a reasoned explanation for why a clearinghouse approach is not viable. That explanation has not been provided. Conclusion IHA respectfully urges HRSA to abandon the proposed rebate model. The costs to our member hospitals and the patients they serve are real and substantial. The upfront discount model has worked for more than three decades. It is the mechanism around which hospitals have built their operations, and it is the mechanism most consistent with the statutory purpose of the 340B program. If HRSA nevertheless proceeds, covered entities must have a full and meaningful opportunity to comment on the specific features of any program before it is implemented. Hospitals cannot provide complete cost estimates or operational assessments without knowing which drugs will be included, what data will be required, what grounds exist for denial of rebates, and what dispute resolution processes will apply. A failure to provide that information before finalizing a program would effectively preclude informed public comment. We appreciate HRSA's consideration of these comments and the opportunity to represent the perspective of rural and regional hospitals that serve some of New York's most vulnerable communities. Please contact us with any questions. Sincerely, Kevin M. Kerwin, Esq. President and CEO Iroquois Healthcare Association Kevin M. Kerwin, Esq. President and CEO Representing health care providers in Upstate and Rural New York ---------- 15 Executive Park Drive Clifton Park, New York 12065 Telephone (518) 383-5060 ---------- www.iroquois.org February 26, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Iroquois Healthcare Alliance (IHA), we appreciate the opportunity to submit comments on the Department of Health and Human Services (HRSA) Request for Information: 340B Rebate Model Pilot Program. IHA represents approximately 50 nonprofit and public hospitals and health systems across upstate and rural New York, the vast majority of which participate in the 340B program and depend on it to sustain essential services for their communities. We write in strong opposition to any shift away from the existing upfront discount model. The answer to whether HRSA should implement a rebate model is no. Our member hospitals serve some of the most medically underserved communities in New York State. Many operate as the sole source of inpatient care, labor and delivery services, and behavioral health treatment across entire counties. The 340B program is not a peripheral benefit for these institutions. It is a financial cornerstone that allows them to stretch limited resources, extend care to uninsured and low-income patients, and maintain services that would otherwise be financially unsustainable. Any mechanism that delays, complicates, or undermines access to 340B savings puts those services at risk. As described below, a rebate model would impose significant administrative, financial, and operational burdens on IHA member hospitals that far outweigh any potential benefits. More fundamentally, HRSA's interest in testing a rebate mechanism appears to rest on the incorrect premise that the agency must balance the interests of covered entities and pharmaceutical manufacturers when selecting a discount mechanism. That is not the standard. The statute requires that HRSA give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The upfront discount model has served that purpose since the program's inception in 1992. There is no sound basis for abandoning it now. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would impose significant new administrative costs on IHA member hospitals. These institutions designed their operations, staffing structures, and financial systems around the upfront discount model. A transition to a rebate mechanism is not a technical adjustment. It would require fundamental changes to how hospitals process claims, reconcile payments, manage cash flow, and interact with third-party administrators. Across our membership, hospitals have identified potential cost increases including: new or upgraded IT systems and data infrastructure, additional staffing or reallocation of existing clinical and administrative staff to compliance functions, new contracts with third-party administrators or vendors, legal and consulting costs associated with program implementation, and ongoing reconciliation and dispute resolution functions that do not exist under the current model. For smaller rural hospitals with lean administrative teams, even modest increases in compliance workload can have outsized impacts. HRSA's prior estimate of two additional hours per week bears no relationship to what our members have experienced or anticipate. If the pilot program were to expand beyond the original 10 drugs, these costs would multiply accordingly. More drugs mean more claims, more rebates to track and reconcile, more money that hospitals must float while awaiting reimbursement, and a greater likelihood of disputes and delays. Each of those outcomes reduces the resources available for direct patient care. Staffing Impacts Under a Potential 340B Rebate Program IHA member hospitals, particularly those in rural areas, consistently face workforce shortages. Most do not have excess administrative capacity to absorb new compliance obligations without either hiring additional staff or diverting existing employees from clinical and operational functions. A rebate model would require both. Hospitals have indicated they would need dedicated staff to manage claims submission, data validation, rebate tracking, and dispute resolution under a rebate model. In some cases, this would require diverting pharmacy staff or billing personnel who are currently focused on patient care activities. In rural communities where hiring qualified staff is already difficult and expensive, those transitions take time and come at a real cost. HRSA should not underestimate how disruptive that reallocation would be for hospitals that are already stretched thin. Systems and Infrastructure IHA member hospitals built their 340B program infrastructure around an upfront discount model. Their electronic health records, pharmacy systems, and third-party administrator relationships are configured accordingly. A shift to a rebate mechanism would require significant modifications to these systems. A core operational challenge involves medical claims data. Unlike pharmacy claims, medical claims data is typically housed in EHR systems that do not feed directly into third-party administrators. Providing that data for rebate submission would likely require manual processes, adding burden and increasing the risk of error. This is not a problem that can be solved simply by directing hospitals to use existing data feeds. The data flows do not exist in the form that a rebate model would require. Payment Timing and Cash Flow Impacts The upfront discount model allows hospitals to access 340B pricing at the point of purchase. A rebate model would require hospitals to pay full wholesale acquisition cost upfront and wait for reimbursement afterward. Even under the most favorable assumptions, that delay creates a real cash flow impact. For many IHA member hospitals, operating margins are already razor thin. Several operate under bond covenants or loan agreements that include liquidity requirements. Floating the difference between WAC and 340B ceiling prices, even for a limited drug list, could put those institutions in technical default or force them to draw down reserves that are critical to operations. HRSA's prior assertion that rebates would typically be paid before the wholesaler invoice is due does not reflect the financial realities of rural hospital operations. A 10-day payment window, if it were consistently honored, would help, but it would not eliminate the risk. Adverse Impacts on Member Hospitals and the Communities They Serve The cumulative effect of increased administrative costs, staffing burdens, and cash flow risk is straightforward: IHA member hospitals would have less money available for patient care. For hospitals that are already making difficult decisions about which services they can sustain, that reduction is not abstract. It translates directly into program cuts, service line reductions, and in some cases potential facility closures. Several IHA member hospitals use 340B savings to cross-subsidize services that are financially unsustainable on their own, including labor and delivery units, behavioral health programs, and outpatient clinics serving uninsured patients. These are services that exist because 340B savings make them possible. A rebate model that erodes those savings puts those services in jeopardy. In communities where IHA members are the only hospital within a reasonable distance, the consequences of service reductions are severe. IHA member hospitals also serve disproportionately high shares of Medicaid and uninsured patients. They are, by statutory definition, safety-net providers. HRSA should weigh the impact of this proposal with that context in mind. Reliance Interests The RFI invites comment on reliance interests in the upfront discount model. IHA's members have strong and reasonable reliance interests. Since the 340B program was created in 1992, covered entities have consistently obtained their statutory discounts through upfront pricing. Hospitals have structured their operations, staffing, vendor contracts, and financial planning around that model for more than 30 years. That is not incidental. It is the foundation on which 340B program participation is built. The RFI suggests that the mere existence of statutory authority to implement a rebate model implies that covered entities cannot reasonably rely on the current approach continuing. We disagree. Statutory authority is not the same as a signal of intent, and a decades-long administrative practice of providing upfront discounts creates precisely the kind of settled expectation that agencies must take seriously before changing course. HRSA has not identified a problem with the upfront discount model that would justify the disruption a rebate mechanism would cause. Concerns About Third-Party IT Platforms IHA has significant concerns about the use of third-party IT platforms to administer any rebate program. During the prior iteration of the Rebate Program, hospitals and their administrators encountered serious problems with the Beacon platform operated by Second Sight Solutions, including issues with terms and conditions, shifting data requirements, and inadequate customer service. Any future rebate model must include clear guardrails around platform governance, data security, and patient information protections. Covered entities must have meaningful recourse when platforms fail to perform. HRSA should not allow drug companies to define or control the technology infrastructure through which hospitals access their statutory discounts. Alternatives to a Rebate Model IHA supports the position that there are viable, less burdensome alternatives to a rebate model that could address any legitimate 340B/MDPNP deduplication concerns. In particular, we urge HRSA to explore a neutral third-party clearinghouse approach. Such a model could achieve the same deduplication objectives without requiring hospitals to pay full price upfront, restructure their IT systems, or take on the administrative burden of a rebate-based compliance framework. To date, IHA member hospitals have not reported widespread 340B/MDPNP deduplication problems that would necessitate a structural overhaul of the discount mechanism. The rebate model is not a solution to a problem our members have identified. It is a proposal that creates new problems in the name of solving ones that have been manageable under the current system. If HRSA can identify no less burdensome alternative, it must at minimum provide a reasoned explanation for why a clearinghouse approach is not viable. That explanation has not been provided. Conclusion IHA respectfully urges HRSA to abandon the proposed rebate model. The costs to our member hospitals and the patients they serve are real and substantial. The upfront discount model has worked for more than three decades. It is the mechanism around which hospitals have built their operations, and it is the mechanism most consistent with the statutory purpose of the 340B program. If HRSA nevertheless proceeds, covered entities must have a full and meaningful opportunity to comment on the specific features of any program before it is implemented. Hospitals cannot provide complete cost estimates or operational assessments without knowing which drugs will be included, what data will be required, what grounds exist for denial of rebates, and what dispute resolution processes will apply. A failure to provide that information before finalizing a program would effectively preclude informed public comment. We appreciate HRSA's consideration of these comments and the opportunity to represent the perspective of rural and regional hospitals that serve some of New York's most vulnerable communities. Please contact us with any questions. Sincerely, Kevin M. Kerwin, Esq. President and CEO Iroquois Healthcare Association
HRSA-2026-0001-0024(no commenter metadata)2026-02-27T05:00Z1,557 chars
As a Board Member for Project Response located in Melbourne, FL, I am offering the comments below on behalf of the clients we serve and the phenomenal work by staff who ensure our clients stay healthy and viable. I am aware that HRSA government agency issued a RFI to gather information and assess the potential use of rebates to effect the ceiling price under the 340B Program. I agree with Project Response that rebate programs create financial hardship on the organization which ultimately creates a trickle-down, adversarial impact on the organization's finances as well as on the clients. For example, this rebate proposal would require Project Response to purchase drugs at retail cost upfront and subsequently submit a prior authorization-like request for 340B pricing. This process significantly increases the time for processing drug expenses and places a financial burden on the organization, specifically, since reimbursements can take an excessive amount of time to be implemented. From the client perspective, reimbursement processes may create a delay in the clients obtaining their life-saving medication within a timely manner, ultimately interrupting their dosage modality. My request is that Project Response and other state agencies that provide services to HIV/AIDS clients do not have their services or processes interrupted due to financial constraints that are unnecessary. The 340B Pilot Program is an unnecessary distraction that does not add value to the operation of Project Response or the efficacy of service to their clients.
HRSA-2026-0001-0025(no commenter metadata)2026-02-27T05:00Z2,218 chars
My name is Blake Kramer, and I am writing on behalf of Franklin Medical Center, a small rural hospital in Louisiana, regarding the proposed use of a rebate model in place of the existing 340B program. Speaking as a rural hospital administrator, any sort of rebate model for 340B can only be viewed as a nightmare scenario. Rural hospital struggles with finances generally and cash flow specifically are well known. The most recent Chartis study projected that 41% of all rural hospitals are operating in the red. This is with massive Medicaid cuts incoming. The 340B program is a critical lifeline to maintain the operations of our organizations and to sustain access to healthcare for millions of Americans. A rebate model will completely disrupt the cash flow currently provided by 340B. It will increase costs immediately and force rural hospitals that are already stretched thin on staffing to find additional personnel to file for the rebates and to monitor the pharmaceutical company compliance with providing the rebates. This is in addition to the difficulty in trying to stay compliant with the existing regulations, which are enormously burdensome to small rural facilities. Moreover, we need to be honest about enforcement here. Drug manufacturers have been violating the letter and spirit of the 340B program for years now with absolutely zero consequences outside of a few strongly-worded letters. Rural hospitals have no confidence whatsoever in the fortitude of the federal government to compel Big Pharma to pay the rebates in an accurate and timely manner. The ultimate outcome of a rebate model is going to be rural hospitals begging for their money and drug companies not paying it because they know they can get away with it. We acknowledge that there might be issues with the 340B program. We also vehemently deny that these issues are present in any meaningful way among the rural hospitals who use these funds appropriately and with their communities and patients as the foremost concerns. If HRSA or CMS wants to deal with these issues, they should feel free to do so without punishing innocent parties. If a rebate model is necessary, rural hospitals should, at a minimum, be carved out.
HRSA-2026-0001-0026Glyn Foreman · Sulphur, LA, United States2026-02-27T05:00Z8,315 chars
WCCH respectfully requests that HRSA preserve the financial stability and operational feasibility that safety-net hospitals depend upon under the current 340B structure. Any pilot model should prioritize payment certainty, standardized national processes, and clear enforcement mechanisms to prevent delays or disputed rebates that could jeopardize patient access to essential services. As a Disproportionate Share Hospital serving a medically vulnerable population, WCCH urges HRSA to ensure that program modifications do not shift disproportionate financial or administrative risk onto providers that rely on 340B savings to sustain critical community care. February 26, 2026 Submitted via Regulations.gov Health Resources and Services Administration U.S. Department of Health and Human Services Re: HRSA-2026-0001 Request for Information Regarding 340B Rebate Model Pilot To Whom It May Concern: West Calcasieu Cameron Hospital (WCCH), a Disproportionate Share Hospital (DSH) serving Southwest Louisiana, appreciates the opportunity to comment on HRSAs Request for Information regarding a potential 340B rebate model pilot program. WCCH relies on the 340B program to support care for uninsured, underinsured, and medically vulnerable patients in our community. We are concerned that transitioning to a rebate model would introduce significant financial risk, administrative burden, and operational complexity without clear offsetting benefit. I. Rebate Reconciliation and Payment Certainty Our primary concern is the reconciliation process under a rebate model. Unlike the current upfront discount structure, a rebate model would require hospitals to purchase medications at full acquisition cost, submit claim-level data, and await manufacturer reimbursement. This shift creates exposure to delayed, partial, or disputed payments and introduces substantial working capital strain, particularly for high-cost oncology and specialty medications. If HRSA proceeds with a rebate model, it must include standardized payment timelines, enforceable dispute resolution processes, uniform national data standards, and financial safeguards to ensure that safety-net hospitals are not forced to absorb delayed or unrecovered rebates. II. Administrative and Operational Costs A rebate model would materially increase operational burden. Hospitals would need additional personnel and infrastructure to manage claim-level tracking, reconciliation, dispute resolution, and audit preparation. These expanded responsibilities would involve coordination across pharmacy, finance, IT, compliance, and revenue cycle departments, resulting in structural cost increases, particularly for rural and community DSH hospitals. III. IT Infrastructure and Data Requirements Implementation would require substantial upgrades to IT systems, including secure PHI transmission protocols, contract pharmacy integration, enhanced audit trail documentation, and ongoing maintenance. Many hospitals are not currently equipped with standardized, interoperable systems capable of supporting large-scale retrospective rebate reconciliation. IV. Impact on Patient Access 340B savings support oncology services, medication assistance programs, clinical pharmacy services, care coordination, and uncompensated care. Any delay, reduction, or uncertainty in rebate recovery directly affects funding for these essential services. For DSH hospitals operating on narrow margins, instability in 340B savings could reduce access to high-cost therapies and weaken local safety-net infrastructure. V. Duplicate Discount and Medicare Drug Price Negotiation Complexity A rebate model does not eliminate challenges related to Medicaid duplicate discounts or Medicare Drug Price Negotiation Program nonduplication requirements. Retrospective reconciliation may increase disputes, audit activity, and inconsistent eligibility determinations. Uniform national standards would be necessary to prevent fragmented implementation and heightened compliance risk. Conclusion The current 340B upfront discount model provides pricing certainty and predictable support for safety-net providers. A rebate model would shift financial risk and increase administrative complexity for DSH hospitals. WCCH respectfully urges HRSA to carefully evaluate whether the risks and burdens of a rebate model outweigh its intended objectives. Sincerely, Jobie James Chief Financial Officer West Calcasieu Cameron Hospital Sulphur, Louisiana February 26, 2026 Submitted via Regulations.gov Health Resources and Services Administration U.S. Department of Health and Human Services Re: HRSA-2026-0001 Request for Information Regarding 340B Rebate Model Pilot To Whom It May Concern: West Calcasieu Cameron Hospital (WCCH), a Disproportionate Share Hospital (DSH) serving Southwest Louisiana, appreciates the opportunity to comment on HRSAs Request for Information regarding a potential 340B rebate model pilot program. WCCH relies on the 340B program to support care for uninsured, underinsured, and medically vulnerable patients in our community. We are concerned that transitioning to a rebate model would introduce significant financial risk, administrative burden, and operational complexity without clear offsetting benefit. I. Rebate Reconciliation and Payment Certainty Our primary concern is the reconciliation process under a rebate model. Unlike the current upfront discount structure, a rebate model would require hospitals to purchase medications at full acquisition cost, submit claim-level data, and await manufacturer reimbursement. This shift creates exposure to delayed, partial, or disputed payments and introduces substantial working capital strain, particularly for high-cost oncology and specialty medications. If HRSA proceeds with a rebate model, it must include standardized payment timelines, enforceable dispute resolution processes, uniform national data standards, and financial safeguards to ensure that safety-net hospitals are not forced to absorb delayed or unrecovered rebates. II. Administrative and Operational Costs A rebate model would materially increase operational burden. Hospitals would need additional personnel and infrastructure to manage claim-level tracking, reconciliation, dispute resolution, and audit preparation. These expanded responsibilities would involve coordination across pharmacy, finance, IT, compliance, and revenue cycle departments, resulting in structural cost increases, particularly for rural and community DSH hospitals. III. IT Infrastructure and Data Requirements Implementation would require substantial upgrades to IT systems, including secure PHI transmission protocols, contract pharmacy integration, enhanced audit trail documentation, and ongoing maintenance. Many hospitals are not currently equipped with standardized, interoperable systems capable of supporting large-scale retrospective rebate reconciliation. IV. Impact on Patient Access 340B savings support oncology services, medication assistance programs, clinical pharmacy services, care coordination, and uncompensated care. Any delay, reduction, or uncertainty in rebate recovery directly affects funding for these essential services. For DSH hospitals operating on narrow margins, instability in 340B savings could reduce access to high-cost therapies and weaken local safety-net infrastructure. V. Duplicate Discount and Medicare Drug Price Negotiation Complexity A rebate model does not eliminate challenges related to Medicaid duplicate discounts or Medicare Drug Price Negotiation Program nonduplication requirements. Retrospective reconciliation may increase disputes, audit activity, and inconsistent eligibility determinations. Uniform national standards would be necessary to prevent fragmented implementation and heightened compliance risk. Conclusion The current 340B upfront discount model provides pricing certainty and predictable support for safety-net providers. A rebate model would shift financial risk and increase administrative complexity for DSH hospitals. WCCH respectfully urges HRSA to carefully evaluate whether the risks and burdens of a rebate model outweigh its intended objectives. Sincerely, Jobie James Chief Financial Officer West Calcasieu Cameron Hospital Sulphur, Louisiana
HRSA-2026-0001-0027Lesli Tomlin · Colorado City, TX, United States2026-02-27T05:00Z3,720 chars
Due to the character limit allowed in the comment, information had to be condensed significantly. Please contact me for further comments with considerable details. I write specifically from the perspective of a pharmacy director at a rural hospital, where the hospital and pharmacy department operate with limited staffing, tight margins, and significant responsibility across multiple operational domains. On any given day, I serve as: Clinical pharmacist covering inpatient and ER services Director of pharmacy overseeing regulatory compliance (HRSA, CMS, state board) 340B program lead responsible for audits, contract pharmacy oversight, and diversion prevention Buyer and inventory manager navigating drug shortages Antimicrobial stewardship activities IT liaison for EHR, billing, and medication safety systems 24 hour pharmacist on call Unlike large health systems with dedicated 340B compliance teams and finance departments, rural hospitals rely on a few pharmacists and technicians to keep the entire medication-use system functioning safely and legally. The proposed rebate model would add another major administrative and financial management layer without providing the personnel or infrastructure to support it. Under the current 340B model, we are able to purchase outpatient drugs at a discounted price upfront. Those savings are predictable and allow us to: Maintain essential service lines that are not profitable Offset uncompensated care Support medication access programs for uninsured patients Retain pharmacy staff in a workforce shortage environment Requiring rural hospitals to purchase medications at full wholesale acquisition cost and wait for rebates would create significant cash flow instability. Rural hospitals often operate with minimal reserves. Delayed rebates, disputed claims, or administrative errors could directly threaten our ability to: Maintain adequate inventory Respond to drug shortages Continue offering certain services In a small facility, even temporary reimbursement delays can have significant consequences. In larger institutions, rebate reconciliation might be absorbed by centralized finance or compliance teams. In a rural hospital, that responsibility would fall directly on 1 person who already has their hands full. The rebate model would require: Enhanced claim-level tracking and validation Reconciliation of manufacturer payments Monitoring for underpayments or denials Ongoing communication with manufacturers and third-party administrators Expanded documentation for audit defense Each of these functions requires time, technical infrastructure, and expertise. For rural facilities, that time comes directly from already stressed workloads. Adding a rebate system does not simply increase administrative work it diverts limited clinical leadership away from direct patient care and safety. Many rural hospitals operate on lean IT infrastructures. System integrations required to support a rebate model normally involves costly third-party services. The 340B program is not an abstract policy in rural America. It is a mechanism that keeps services open. Rural communities already face hospital closures and pharmacy deserts. Policies that increase instability for safety-net providers will only accelerate that trend. As a rural hospital pharmacy director, I respectfully urge HRSA to withdraw any plans to implement a 340B rebate model pilot. The 340B program, as currently structured, provides predictable and immediate support that allows rural hospitals to continue serving vulnerable populations. Altering that structure threatens the stability of facilities that many communities depend upon as their sole source of care.
HRSA-2026-0001-0028Dana Adcock · Havana, IL, United States2026-02-27T05:00Z874 chars
As a rural healthcare organization, our participation in the 340B program is essential to sustaining local access to care. The current upfront discount structure helps us manage limited operating margins, maintain critical services, and invest in programs that would otherwise be unavailable in small communities. Any shift to a rebate-based model must carefully consider the operational realities of rural providers, particularly the potential impact on cash flow, administrative burden, and our ability to respond quickly to patient needs. We encourage thoughtful evaluation of how such a model could affect medication access, staffing resources, and the financial stability of safety-net providers. Safeguards to prevent duplicate discounts, ensure transparency, and avoid unintended consequences will be key to maintaining the integrity and purpose of the 340B program.
HRSA-2026-0001-0029(no commenter metadata)2026-03-02T05:00Z627 chars
The rebate model, is a poor idea. It will require practices to encumber scare capital while waiting to be reimbursed. If there is a problem with the rebate submission, this will extend the time capital is encumbered or risk not getting reimbursed at all, making the program unsustainable. The other problem is that the rebate model imposes more administrative burdens on practices at a time when practice are struggling to be more efficient with scarce manpower resources. The best solution is to do away with rebates and discount the drugs upfront. This will result in less administrative burdens on the practices and on 340B.
HRSA-2026-0001-0030Anonymous Anonymous2026-03-02T05:00Z2,234 chars
Submitted on behalf of a Critical Access Hospital located in Kansas Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. Our hospital serves as a primary source of care for our community and surrounding rural counties. Access to pharmacy services, infusion therapy, emergency care, and outpatient treatment depends on stable and predictable drug purchasing costs. Under the current 340B structure, IRA-affected medications represent a manageable upfront expense. Under a rebate model, that obligation would increase to more than half a million dollars annually, reflecting a more than twenty times increase in upfront acquisition cost. For a hospital of our size, this increase is significant. Critical Access Hospitals often operate with overlapping responsibilities across pharmacy, finance, and compliance teams. Introducing a rebate-based system would require additional tracking of eligible claims, monitoring of manufacturer reimbursement, reconciliation of payments, and management of potential discrepancies. These functions would need to be absorbed within existing staffing structures. In addition to the operational requirements, advancing substantially higher drug acquisition costs before reimbursement is received adds pressure to long-term planning. Rural hospitals must carefully manage reserves to account for seasonal fluctuations in patient volume, workforce challenges, and unexpected capital needs. Changes to drug purchasing timing affect that balance. 340B savings help sustain essential services that may otherwise operate at a loss. Any increase in administrative workload or advance purchasing requirements reduces flexibility in how those resources are allocated. Critical Access Hospitals frequently serve as the only hospital within a broad geographic area. Financial strain in one area of operations has ripple effects across the organization and, ultimately, the community. The 340B program has played an important role in preserving access to medications close to home. Any modification to its structure should carefully consider the capacity limitations and operational realities of small rural providers. We appreciate HRSAs thoughtful review of these concerns.
HRSA-2026-0001-0031(no commenter metadata)2026-03-02T05:00Z414 chars
I am the Executive Director of a stand alone non profit community health clinic in Missouri. If we move to rebate model, our clinic will definitely CLOSE OUR DOORS. We do not have a bank roll to support a rebate model. We will not survive. We have already cut costs and use a volunteer model for care. DO NOT MOVE FORWARD WITH THIS IDEA. WHO DOES IT BENEFIT??? I can tell you it DOES NOT benefit not-for-profits.
HRSA-2026-0001-0032CACTUS HEALTH SERVICES INC2026-03-02T05:00Z2,069 chars
The proposed 340B rebate model would have a significant and detrimental impact on our health centers financial stability and our ability to continue serving our rural community. Under the current 340B structure, we receive the drug discount at the time of purchase. This upfront savings allows us to stretch limited resources and reinvest directly into patient care services, including pharmacy access, chronic disease management, preventive care, and services for uninsured and underinsured patients. The proposed rebate model would require us to purchase medications at full price and then wait for reimbursement through a rebate process. For a rural health center like ours, this shift would create substantial cash-flow challenges. We do not have large reserve funds to absorb the upfront cost of medications while waiting for rebate payments. Delays, administrative burdens, or disputes in the rebate process could further strain our financial position. The financial impact would be tremendous. 340B savings are not excess revenue they are reinvested into expanding access to care, offsetting uncompensated services, supporting sliding fee discounts, and maintaining essential clinical programs. Losing timely access to those savings could jeopardize staffing, service lines, and pharmacy operations. Most importantly, this would directly affect patient care. We serve a rural population across approximately a 60-mile radius. Many of our patients face transportation barriers, limited provider availability, and economic hardship. Any disruption to our financial sustainability would reduce access to affordable medications and healthcare services for the very population the 340B program was designed to protect. Our mission is centered on assisting and improving the health of our community. The proposed rebate model would undermine that mission by creating financial instability and threatening the survival of our health center. In a rural setting where healthcare resources are already limited, the consequences would be significant and long-lasting.
HRSA-2026-0001-0033(no commenter metadata)2026-03-02T05:00Z4,089 chars
I appreciate HRSAs effort to explore a 340B Rebate Model Pilot Program and its goal of improving transparency and program integrity. From the perspective of correctional healthcare operations, I respectfully offer considerations specific to state correctional systems. Correctional systems function as safety-net providers for medically complex, high-risk populations, including individuals with opioid use disorder (OUD), serious mental illness, HIV, hepatitis C, and other chronic conditions. Access to 340B pricing is a critical mechanism that supports medication access within secure facilities and facilitates continuity of care during reentry. A rebate-based model introduces several operational challenges in the correctional setting: 1. Cash Flow and Budget Stability Correctional healthcare is funded through state appropriations and with some jurisdictions using vendor contracts with fixed annual budgets. Real-time 340B pricing allows predictable pharmaceutical expenditures. Given these budget constraints, a rebate system may not be feasible for some states as some states will simply not have the resources to pay upfront and wait for rebate. Furthermore, a rebate structure that delays reimbursement could create budget volatility, particularly for high-cost medications such as long-acting injectable antipsychotics, hepatitis C therapies, and medications for opioid use disorder (MOUD). Correctional systems do not have the same financial flexibility as large hospital systems to absorb reimbursement delays. 2. Interaction with Medicaid and 1115 Reentry Waivers Some states are currently implementing an 1115 Medicaid waiver that expands pre-release services and care coordination. As correctional systems increasingly align medication management with Medicaid eligibility activation prior to release, any 340B rebate model must clearly address: Duplicate discount prevention in managed care environments Coordination between state Medicaid agencies and correctional pharmacy systems Rebate eligibility during pre-release coverage windows Failure to clarify these intersections may create compliance risk or discourage participation in reentry health initiatives. 3. Contracted Healthcare Delivery Models Some correctional systems operate through comprehensive medical vendor contracts. A rebate model must clearly define: Which entity holds rebate eligibility (state agency vs. contracted vendor) Documentation and reporting responsibilities Audit accountability Ambiguity in these areas could create disputes between state agencies, vendors, and manufacturers. 4. Security and Logistical Constraints Correctional pharmacies operate under unique security and inventory control requirements. Systems are not always structured for complex rebate reconciliation processes. Any pilot should minimize additional technological burdens and avoid requiring real-time external data interfaces that may conflict with correctional IT security standards. 5. Impact on MOUD and Public Safety Outcomes Access to affordable buprenorphine, extended-release naltrexone, and other evidence-based treatments is essential to reducing overdose risk post-release. If rebate delays or administrative complexity reduce correctional participation in 340B purchasing, the downstream impact may include increased recidivism, overdose mortality, and emergency department utilization. For these reasons, I respectfully recommend that HRSA: Allow voluntary participation for correctional entities Provide explicit guidance on Medicaid and 1115 waiver interaction Establish prompt rebate timelines to protect cash flow Clearly delineate responsibility among covered entities and contracted vendors Include correctional systems in pilot evaluation metrics Correctional healthcare systems are increasingly integrated into state public health strategies. Any 340B reform should preserve the financial stability necessary to sustain access to essential medications for justice-involved individuals. Thank you for the opportunity to provide input on this important initiative.
HRSA-2026-0001-0034Amador Health Center, Inc2026-03-02T05:00Z4,080 chars
Amador Health Center, Inc. is a nonprofit Federally Qualified Health Center serving medically underserved patients in southern New Mexico. We operate with a lean administrative infrastructure and serve a high proportion of Medicaid-insured and uninsured individuals. Savings generated under the 340B program are essential to maintaining affordable access to medications and supporting integrated care services. We appreciate HRSAs request for stakeholder input regarding the proposed 340B Rebate Model Pilot Program. The Rebate Model Effectively Functions as an Unfunded Mandate Although characterized as a change in pricing mechanics, the proposed rebate structure effectively shifts financial timing risk and compliance burden to covered entities without corresponding federal support. Under the current model, 340B discounts are realized at the point of purchase. This predictability allows small health centers to manage inventory, set patient pricing, and plan working capital responsibly. Under a rebate model, covered entities would be required to: Purchase medications at full acquisition cost Track eligible transactions at the claim level Submit rebate claims Monitor and reconcile manufacturer payments Resolve disputes and manage audit exposure Carry the cash flow risk during the reimbursement period The proposal does not provide funding to offset increased administrative staffing, system upgrades, compliance oversight, or expanded working capital needs. For small safety-net providers, this amounts to a structural transfer of costs. Operationally, it functions as an unfunded mandate. Cash Flow Risk for Small FQHCs Large health systems may have sufficient reserves to absorb reimbursement delays. Small community health centers do not have that flexibility. Even relatively short rebate payment lags create measurable working capital pressure. That pressure competes directly with payroll, pharmacy inventory management, behavioral health staffing, and enabling services. 340B savings are not surplus revenue. They are integrated into the financial structure that supports: Sliding fee pharmacy access Medication assistance for uninsured patients Care coordination and case management Behavioral health integration Introducing financial volatility into that structure increases risk to patient services. Increased Administrative Burden The rebate model would require substantial additional administrative processes, including transaction-level tracking, reconciliation systems, and dispute management. FQHC administrative teams are intentionally lean. Additional compliance layers divert resources from direct patient care and care coordination. Absent additional funding, those administrative costs reduce the net benefit the 340B program is intended to provide. Policy Rationale The RFI does not clearly identify a deficiency in the current 340B structure for community health centers that necessitates restructuring the pricing mechanism. If the goal is improved program integrity, HRSA already maintains audit and enforcement authority. If the goal is enhanced transparency, reporting mechanisms can be strengthened without shifting financial timing risk onto safety-net providers. From the perspective of a small FQHC, it is not evident how the rebate model improves patient access, strengthens statutory intent, or enhances operational stability. Recommendation If HRSA proceeds with a pilot program, we strongly recommend: Exempting small Federally Qualified Health Centers below a defined purchasing or revenue threshold Making participation strictly voluntary Establishing enforceable rebate payment timelines Implementing safeguards to prevent cash flow disruption Community Health Centers were included in the 340B statute to stretch scarce federal resources for underserved populations. Structural changes that increase financial and administrative strain on small safety-net providers risk undermining that purpose. Respectfully submitted, Amador Health Center, Inc. Federally Qualified Health Center Las Cruces, New Mexico
HRSA-2026-0001-0035Penn State Health2026-03-03T05:00Z10,103 chars
See attached file(s) February 25, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources & Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program. HRSA-2026-03042 Dear Director Britton: In response to the February 17, 2026, Request for Information (RFI) regarding the proposed 340B Rebate Model Pilot Program. I respectfully submit this comment in strong opposition to the proposed rebate model and urge careful reconsideration of its implications for covered entities such as Penn State Health Milton S. Hershey Medical Center (HMC). As a major academic medical center and safety-net provider serving Central Pennsylvania, HMC relies on the current 340B upfront discount structure to sustain essential services for vulnerable populations. The proposed shift to a rebate-based model would introduce significant operational, financial and compliance burdens that risk undermining the core purpose of the 340B Drug Pricing Program. 1. Cash Flow and Financial Instability The current 340B model provides upfront discounts that enable covered entities to immediately realize cost savings, which are then reinvested into patient care, uncompensated services, community health programs, and access initiatives. Transitioning to a rebate model would require providers to purchase drugs at higher upfront costs and wait for reimbursement. For large academic systems such as Penn State Health, this change could result in millions of dollars in delayed reimbursements. Even temporary cash flow disruptions may: o Constrain investment in oncology, transplant, rural outreach, and specialty clinics o Increase reliance on credit or internal reserves o Introducing financial volatility tied to rebate processing timeliness This is particularly concerning in an environment of already narrow hospital margins and growing uncompensated care burdens. 2. Administrative and Compliance Complexity The rebate model would create substantial administrative complexity, including: o Claims-level tracking and reconciliation o Manufacturer-specific rebate processing workflows o Dispute resolution mechanisms o Heightened audit exposure Penn State Health Hershey Medical Center operates a sophisticated compliance infrastructure, yet even well-resourced academic centers would face significant system reconfiguration costs, staffing needs, and IT upgrades to accommodate rebate processing. Smaller affiliated providers and rural partners would face even greater challenges. This additional administrative layer risks diverting resources away from patient care and into compliance bureaucracy. 3. Risk of Delayed or Denied Rebates Unlike the current model, where pricing is applied at the point of sale, a rebate framework introduces uncertainty regarding: o Timeliness of rebate payments o Accuracy of manufacturer calculations o Potential disputes over eligibility Any systemic delays could impar the financial predictability that covered entities rely upon to plan service expansions and community investments. The uncertainty inherent in a rebate system shifts risk from manufacturers to providers contrary to the statutory intent of the 340B program. 4. Impact on Patient Access Penn State Health Hershey Medical Center serves complex patients across oncology, transplant, pediatrics, behavioral health and rural health networks. Savings generated through the 340B program directly support: o Medication access programs o Charity care and sliding scale assistance o Care coordination services o Community-based clinics Reducing financial predictability threatens these programs and may ultimately limit access for low-income and medically underserved patients in Central Pennsylvania. 5. Departure from Congressional Intent The 340B statute was designed to enable covered entities to stretch scarce federal resources as far as possible. The upfront discount structure has been central to achieving that purpose. Converting to a rebate model risk altering the programs operational foundation without clear evidence that such a shift would improve patient outcomes or program integrity. Before implementing a pilot that could materially disrupt provider operations, policymakers should: o Conduct a formal financial impact assessment o Evaluate administrative feasibility across different covered entity types o Ensure statutory authority clearly supports the proposed model o Engage directly with affected academic medical centers and rural health partners While program integrity and transparency are important goals, the proposed 340B Rebate Model Pilot Program poses significant financial, operational, and patient access risks for Penn State Health Hershey Medical Center. I respectfully urge the agency to refrain from implementing the rebate pilot in its current form and to instead pursue collaborative, stakeholder informed approaches that preserve the stability and effectiveness of the 340B program. Thank you for the opportunity to provide comment. February 25, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources & Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program. HRSA-2026-03042 Dear Director Britton: In response to the February 17, 2026, Request for Information (RFI) regarding the proposed 340B Rebate Model Pilot Program. I respectfully submit this comment in strong opposition to the proposed rebate model and urge careful reconsideration of its implications for covered entities such as Penn State Health Milton S. Hershey Medical Center (HMC). As a major academic medical center and safety-net provider serving Central Pennsylvania, HMC relies on the current 340B upfront discount structure to sustain essential services for vulnerable populations. The proposed shift to a rebate-based model would introduce significant operational, financial and compliance burdens that risk undermining the core purpose of the 340B Drug Pricing Program. Cash Flow and Financial Instability The current 340B model provides upfront discounts that enable covered entities to immediately realize cost savings, which are then reinvested into patient care, uncompensated services, community health programs, and access initiatives. Transitioning to a rebate model would require providers to purchase drugs at higher upfront costs and wait for reimbursement. For large academic systems such as Penn State Health, this change could result in millions of dollars in delayed reimbursements. Even temporary cash flow disruptions may: Constrain investment in oncology, transplant, rural outreach, and specialty clinics Increase reliance on credit or internal reserves Introducing financial volatility tied to rebate processing timeliness This is particularly concerning in an environment of already narrow hospital margins and growing uncompensated care burdens. Administrative and Compliance Complexity The rebate model would create substantial administrative complexity, including: Claims-level tracking and reconciliation Manufacturer-specific rebate processing workflows Dispute resolution mechanisms Heightened audit exposure Penn State Health Hershey Medical Center operates a sophisticated compliance infrastructure, yet even well-resourced academic centers would face significant system reconfiguration costs, staffing needs, and IT upgrades to accommodate rebate processing. Smaller affiliated providers and rural partners would face even greater challenges. This additional administrative layer risks diverting resources away from patient care and into compliance bureaucracy. Risk of Delayed or Denied Rebates Unlike the current model, where pricing is applied at the point of sale, a rebate framework introduces uncertainty regarding: Timeliness of rebate payments Accuracy of manufacturer calculations Potential disputes over eligibility Any systemic delays could impar the financial predictability that covered entities rely upon to plan service expansions and community investments. The uncertainty inherent in a rebate system shifts risk from manufacturers to providers contrary to the statutory intent of the 340B program. Impact on Patient Access Penn State Health Hershey Medical Center serves complex patients across oncology, transplant, pediatrics, behavioral health and rural health networks. Savings generated through the 340B program directly support: Medication access programs Charity care and sliding scale assistance Care coordination services Community-based clinics Reducing financial predictability threatens these programs and may ultimately limit access for low-income and medically underserved patients in Central Pennsylvania. Departure from Congressional Intent The 340B statute was designed to enable covered entities to stretch scarce federal resources as far as possible. The upfront discount structure has been central to achieving that purpose. Converting to a rebate model risk altering the programs operational foundation without clear evidence that such a shift would improve patient outcomes or program integrity. Before implementing a pilot that could materially disrupt provider operations, policymakers should: Conduct a formal financial impact assessment Evaluate administrative feasibility across different covered entity types Ensure statutory authority clearly supports the proposed model Engage directly with affected academic medical centers and rural health partners While program integrity and transparency are important goals, the proposed 340B Rebate Model Pilot Program poses significant financial, operational, and patient access risks for Penn State Health Hershey Medical Center. I respectfully urge the agency to refrain from implementing the rebate pilot in its current form and to instead pursue collaborative, stakeholder informed approaches that preserve the stability and effectiveness of the 340B program. Thank you for the opportunity to provide comment.
HRSA-2026-0001-0036Julie Anderson · S, TN, United States2026-03-03T05:00Z3,151 chars
Re: HHS Docket No. HRSA-2026-03042 I am writing to express serious concerns about the proposed rebate model and its potential impact on the 340B Drug Pricing Program for my facility. The 340B program was established by Congress in 1992 to enable covered entitiessuch as community health centers, rural hospitals, and safety-net providersto stretch scarce federal resources and better serve vulnerable and underserved populations. Through upfront discounted pricing, providers are able to reinvest savings into expanded services, including free or reduced-cost medications, chronic disease management, behavioral health services, and outreach programs. Specifically, our hospital was able to open an outpatient infusion center. As we are rurally located, this has helped so many patients not have to travel long distances for much needed medicines. The proposed rebate model would fundamentally alter this structure by replacing upfront discounts with a retrospective rebate process. This shift would create several harmful consequences: 1. Strain on Cash flow: Our hospital operates on extremely tight margins. Requiring us to purchase medications at full price and wait for rebates would impose significant financial strain, particularly for our outpatient infusion center where drugs are extremely costly without the 340B discount. Our hospital simply does not have the capital reserves necessary to float these costs. 2. Administrative Burden and Complexity A rebate model introduces additional administrative processes, reconciliation requirements, and dispute resolution challenges. This increased complexity would divert staff time and resources away from patient care and toward compliance management. 3. Risk of delayed or Incomplete Rebates Any delay, denial, or dispute in rebate payments could destabilize already fragile safety-net systems in hospitals like Sweetwater Holspital. The predictability of upfront discounts is critical for budgeting and long-term planning. 4. Reduced Patient Access to Care If providers are forced to limit services due to financial instability, patients will ultimately bear the burden. This would completely undermine the intention of the program, in my opinion. Reduced access to affordable medications and supportive services would disproportionately harm low-income, rural, and medically underserved communities. The 340B programs success depends on its structure as a point-of-sale discount system. Altering it to a rebate-based model would undermine its core purpose and threaten the viability of providers who rely on it to deliver essential care. For these reasons, I strongly urge careful reconsideration of the proposed rebate model and its unintended consequences. Preserving the integrity and functionality of the 340B program is critical to maintaining access to care for millions of vulnerable patients. Thank you for your attention to this important matter. I welcome the opportunity to discuss these concerns further. Sincerely, Julie Anderson, RPh., 340B Program Manager Sweetwater Hospital Association, Sweetwater, TN 37874 julie.anderson@sweetwaterhospital.org
HRSA-2026-0001-0037Jennifer Melgaard · Rugby, ND, United States2026-03-03T05:00Z13,454 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Heart of America Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Heart of America Medical Center in Rugby, North Dakota that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which at Heart of America Medical Center in Rugby, North Dakota has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Heart of America Medical Center in Rugby, North Dakota has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Heart of America Medical Center in Rugby, North Dakota can spend on patient care and comprehensive health care services. Any rebate program would require Heart of America Medical Center in Rugby, North Dakota to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Heart of America Medical Center in Rugby, North Dakota understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Heart of America Medical Center in Rugby, North Dakota would see an increased cost burden if the rebate model was allowed. Key cost drivers could include: Heart of America Medical Center in Rugby, North Dakota does not currently have the staff needed to comply with a Rebate Program. To maintain this rebate program, Heart of America Medical Center would have to reallocate 30 hours per month from important medical care to administrative functions. This would also divert our already minimal current pharmacy staff from tending to the needs of our patients in the retail and hospital settings. For one medication only, the hospital could have had to spend $28,550 vs $2869 in 2025. That is a difference of $25,681 for just one medication, and this rebate model currently includes 10 medications, and that number could increase in the next few years. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Heart of America Medical Center in Rugby, North Dakota has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. A new IT system may need to be set up to accommodate this new model. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Heart of America Medical Center in Rugby, North Dakota will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Heart of America Medical Center in Rugby, North Dakota uses our 340b funds to help support programs, such as cardiac rehab program and diabetes education. If 340b funds are reduced due to the Rebate Program, these patients may have to travel at least 60 miles to access programs such as these. For all these reasons, Heart of America Medical Center in Rugby, North Dakota respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Heart of America Medical Center in Rugby, North Dakota and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Jennifer Melgaard, PharmD Director of Pharmacy Heart of America Medical Center, Rugby, North Dakota 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Heart of America Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Heart of America Medical Center in Rugby, North Dakota that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which at Heart of America Medical Center in Rugby, North Dakota has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Heart of America Medical Center in Rugby, North Dakota has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over 2 delays and denials, and therefore less money that Heart of America Medical Center in Rugby, North Dakota can spend on patient care and comprehensive health care services. Any rebate program would require Heart of America Medical Center in Rugby, North Dakota to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Heart of America Medical Center in Rugby, North Dakota understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Heart of America Medical Center in Rugby, North Dakota would see an increased cost burden if the rebate model was allowed. Key cost drivers could include: o Heart of America Medical Center in Rugby, North Dakota does not currently have the staff needed to comply with a Rebate Program. To maintain this rebate program, Heart of America Medical Center would have to reallocate 30 hours per month from important medical care to administrative functions. This would also divert our already minimal current pharmacy staff from tending to the needs of our patients in the retail and hospital settings. o For one medication only, the hospital could have had to spend $28,550 vs $2869 in 2025. That is a difference of $25,681 for just one medication, and this rebate model currently includes 10 medications, and that number could increase in the next few years. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Heart of America Medical Center in Rugby, North Dakota has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. A new IT system may need to be set up to accommodate this new model. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Heart of America Medical Center in Rugby, North Dakota will no longer be able to use our 340B savings as 3 effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Heart of America Medical Center in Rugby, North Dakota uses our 340b funds to help support programs, such as cardiac rehab program and diabetes education. If 340b funds are reduced due to the Rebate Program, these patients may have to travel at least 60 miles to access programs such as these. For all these reasons, Heart of America Medical Center in Rugby, North Dakota respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Heart of America Medical Center in Rugby, North Dakota and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Jennifer Melgaard, PharmD Director of Pharmacy Heart of America Medical Center, Rugby, North Dakota
HRSA-2026-0001-0038Longview Wellness Center, Inc. dba Wellness Pointe2026-03-03T05:00Z3,162 chars
Re: HHS Docket No. HRSA-2026-03042 To Whom It May Concern: I strongly oppose implementation of any 340B rebate model for Federally Qualified Health Centers (FQHCs). For health centers, a rebate model is not a minor administrative change. It would shift 340B from an upfront statutory discount to a post-purchase reimbursement process that forces safety net providers to finance drug costs up front, absorb claim adjudication risk, and wait for repayment. That approach is inconsistent with the purpose of 340B, which is to help covered entities stretch scarce federal resources to serve more patients and provide more comprehensive services. FQHCs operate with limited liquidity and often very thin, if not negative, operating margins. They are not structured to carry large increases in working capital tied to pharmacy purchasing. Under the rebate approach previously proposed, covered entities would have to pay full wholesale cost first, then submit documentation that the drug was dispensed to an eligible 340B patient, then wait for manufacturer review, approval, and rebate payment. An analysis of the initial list of 10 drugs showed that our upfront acquisition costs would increase by approximately 640%. A distributor also estimated total processing time could delay rebate recovery by roughly 45 days from the date of claim. For an FQHC, that is a serious cash-flow problem. A rebate model would also create substantial new administrative burden. It would require new workflows for claim submission, data validation, reconciliation, denial management, audit support, staff training, vendor coordination, and legal oversight. It would likely require additional IT capabilities and increased sharing of claim-level data, creating added privacy and security risks. These costs would be ongoing and would fall especially hard on small, rural, and underserved health centers with limited administrative infrastructure. Even if HRSA attempted to impose guardrails on rebate denials, denial risk itself is a major problem. Every delayed, disputed, or denied rebate means the health center may not receive the benefit Congress intended under 340B. That uncertainty would pressure FQHCs to limit access to high-cost drugs, reduce pharmacy support, or divert funds from other essential services. Rural and medically underserved communities would be harmed first and most. If HRSA seeks to improve program integrity, reduce duplicate discounts, or address data issues tied to other federal payment programs, it should do so through targeted oversight, standardized data approaches, and direct compliance mechanisms. It should not do so by forcing FQHCs to front full drug costs and function as lenders to manufacturers. HRSA should not implement a 340B rebate model for FQHCs, whether through a pilot or broader program change. At minimum, FQHCs should be excluded entirely. The traditional upfront discount is what makes 340B workable for the health center safety net. Replacing it with a rebate model would predictably weaken cash flow, increase administrative cost, heighten financial risk, and reduce patient access to needed medications and services.
HRSA-2026-0001-0039Big Sandy Medical Center2026-03-03T05:00Z775 chars
I'm commenting on the impact the 340b pilot rebate program would have on our healthcare organization and community. We are a very rural critical access hospital located in a small farming and ranching community. Many of our residents are uninsured or underinsured and depend on the 340b discount pricing to obtain access to their prescribed meds. The rebate program would end the 340b program for us and our community members due to the impact on our cash flow. The 340b program is a great program for underserved communities like ours. Let's keep it that way. Please don't let Big Pharma wiggle their way out of commitments they made to serving communities like ours. At a minimum, please exempt small frontier hospitals from the rebate program. Much appreciated.
HRSA-2026-0001-0040Fulton County Health Center2026-03-04T05:00Z9,043 chars
See attached file(s) Subject: HHS Docket No. HRSA-2026-03042 Comment on Proposed 340B Rebate Model Statutory and Rural Impact Concerns To Whom It May Concern: On behalf of our small rural Critical Access Hospital (CAH), we respectfully submit the following comments to the Health Resources and Services Administration (HRSA) regarding the proposed 340B rebate model. Our hospital has participated in the 340B Drug Pricing Program since 2011 according to our Critical Access Hospital designation and government contract status. Congress established the 340B program with clear intent: to enable covered entities serving vulnerable populations to stretch scarce federal resources as far as possible and expand access to care. The ability to access 340B pricing at the point of sale has been central to fulfilling that purpose. The proposed rebate model materially alters that structure. Operational Impracticability for Small Rural Hospitals: As a small rural facility, we operate with extremely limited administrative staffing. We do not have the workforce capacity to build and sustain the infrastructure required to track accumulations, submit justification documentation, reconcile rebate payments, and manage potential disputes or delays. For the current year, our plan is not to submit rebate information to Beacon for the 10 Manufacturer Transition Framework (MTF) drugs. After careful review, we determined that the administrative burden and associated operational costs required to pursue rebates would exceed the financial benefit of the 340B savings for those medications. While the current number of affected drugs is limited, the expansion of the MTF list year over year will further worsen the cost-benefit ratio. The practical consequence is that we are being forced to forgo 340B savingsnot due to ineligibility or compliance deficienciesbut because the rebate model introduces administrative complexity and financial risk that small rural providers are not equipped to absorb. This outcome directly undermines Congressional intent by functionally restricting access to 340B pricing for the very providers the statute was designed to support. Financial Exposure and Cash Flow Risk: The rebate model shifts financial exposure from manufacturers to covered entities. Under this structure, hospitals must purchase medications at wholesale acquisition cost and wait for reimbursement. For large systems, this may represent a manageable accounting process. For small rural Critical Access Hospitals operating on narrow or negative margins, it creates significant cash-flow strain and uncertainty. Rural hospitals are already under extraordinary financial pressure due to declining reimbursement from both public and private payors, workforce shortages, and increasing supply costs. The 340B program has been essential in allowing us to offset medication costs and sustain vital healthcare services in our community. Delays or uncertainty in accessing those savings threaten service lines, staffing stability, and ultimately access to care for rural patients. Program Integrity Without Structural Harm: We fully support strong program integrity measures and recognize manufacturer concerns regarding duplicate discounts. However, a back-end rebate model is not the only mechanism available to address those concerns. More proportionate alternatives include: Increased frequency of HRSA-led audits. Documentation of internal compliance audits or third-party external audits as proof of program integrity. Enhanced claims transparency and coordination processes that preserve upfront 340B pricing. Our hospital has consistently maintained rigorous internal auditing practices and stands ready to demonstrate compliance. Oversight solutions should strengthen accountability without transferring financial risk or erecting administrative barriers that effectively exclude small rural providers. Conclusion: The 340B statute was designed to protect and strengthen safety-net providers. The proposed rebate model shifts risk, increases administrative burden, and creates financial exposure in a manner that disproportionately harms small rural Critical Access Hospitals. We respectfully urge HRSA to reject policies that effectively narrow access to upfront 340B pricing and to instead pursue oversight mechanisms that preserve Congressional intent, maintain program integrity, and protect rural healthcare access. Thank you for your consideration and for your continued commitment to rural communities. Subject: HHS Docket No. HRSA-2026-03042 Comment on Proposed 340B Rebate Model Statutory and Rural Impact Concerns To Whom It May Concern: On behalf of our small rural Critical Access Hospital (CAH), we respectfully submit the following comments to the Health Resources and Services Administration (HRSA) regarding the proposed 340B rebate model. Our hospital has participated in the 340B Drug Pricing Program since 2011 according to our Critical Access Hospital designation and government contract status. Congress established the 340B program with clear intent: to enable covered entities serving vulnerable populations to stretch scarce federal resources as far as possible and expand access to care. The ability to access 340B pricing at the point of sale has been central to fulfilling that purpose. The proposed rebate model materially alters that structure. Operational Impracticability for Small Rural Hospitals: As a small rural facility, we operate with extremely limited administrative staffing. We do not have the workforce capacity to build and sustain the infrastructure required to track accumulations, submit justification documentation, reconcile rebate payments, and manage potential disputes or delays. For the current year, our plan is not to submit rebate information to Beacon for the 10 Manufacturer Transition Framework (MTF) drugs. After careful review, we determined that the administrative burden and associated operational costs required to pursue rebates would exceed the financial benefit of the 340B savings for those medications. While the current number of affected drugs is limited, the expansion of the MTF list year over year will further worsen the cost-benefit ratio. The practical consequence is that we are being forced to forgo 340B savingsnot due to ineligibility or compliance deficienciesbut because the rebate model introduces administrative complexity and financial risk that small rural providers are not equipped to absorb. This outcome directly undermines Congressional intent by functionally restricting access to 340B pricing for the very providers the statute was designed to support. Financial Exposure and Cash Flow Risk: The rebate model shifts financial exposure from manufacturers to covered entities. Under this structure, hospitals must purchase medications at wholesale acquisition cost and wait for reimbursement. For large systems, this may represent a manageable accounting process. For small rural Critical Access Hospitals operating on narrow or negative margins, it creates significant cash-flow strain and uncertainty. Rural hospitals are already under extraordinary financial pressure due to declining reimbursement from both public and private payors, workforce shortages, and increasing supply costs. The 340B program has been essential in allowing us to offset medication costs and sustain vital healthcare services in our community. Delays or uncertainty in accessing those savings threaten service lines, staffing stability, and ultimately access to care for rural patients. Program Integrity Without Structural Harm: We fully support strong program integrity measures and recognize manufacturer concerns regarding duplicate discounts. However, a back-end rebate model is not the only mechanism available to address those concerns. More proportionate alternatives include: Increased frequency of HRSA-led audits. Documentation of internal compliance audits or third-party external audits as proof of program integrity. Enhanced claims transparency and coordination processes that preserve upfront 340B pricing. Our hospital has consistently maintained rigorous internal auditing practices and stands ready to demonstrate compliance. Oversight solutions should strengthen accountability without transferring financial risk or erecting administrative barriers that effectively exclude small rural providers. Conclusion: The 340B statute was designed to protect and strengthen safety-net providers. The proposed rebate model shifts risk, increases administrative burden, and creates financial exposure in a manner that disproportionately harms small rural Critical Access Hospitals. We respectfully urge HRSA to reject policies that effectively narrow access to upfront 340B pricing and to instead pursue oversight mechanisms that preserve Congressional intent, maintain program integrity, and protect rural healthcare access. Thank you for your consideration and for your continued commitment to rural communities.
HRSA-2026-0001-0041Bingham Healthcare2026-03-05T05:00Z5,229 chars
See attached file(s) 02/12/2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Bingham Healthcare appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict with the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Bingham Healthcare strongly urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Wade H Flowers, Pharm.D. Director of Pharmacy Services / 340b Program Coordinator Bingham Healthcare 02/12/2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Bingham Healthcare appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict with the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Bingham Healthcare strongly urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Wade H Flowers, Pharm.D. Director of Pharmacy Services / 340b Program Coordinator Bingham Healthcare
HRSA-2026-0001-0042National Association of Chain Drug Stores2026-03-05T05:00Z5,647 chars
See attached file(s) March 19, 2026 Mr. Thomas Engels Administrator, Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted via: http://www.regulations.gov Re: 340B Rebate Model Pilot Program; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of pharmacies operating in the United States, the National Association of Chain Drug Stores (NACDS) appreciates the opportunity to submit comments on the U.S. Department of Health and Human Services (HHS) Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program. NACDS is comprised of chains of diverse sizes that operate standalone pharmacies and pharmacies in grocery and mass retail settings. Chains operate over 40,000 pharmacies, and NACDS member companies include regional chains, with a minimum of four stores, and national companies. NACDS members also include more than 900 supplier partners and over 70 international members representing 21 countries. As a vital stakeholder in the nations healthcare system, the community pharmacy sector plays a key role in providing access to critical, affordable medications and healthcare services for Americans, including in rural areas with otherwise limited healthcare access options. NACDS implores HRSA to ensure that community pharmacies, already under insurmountable pressure due to pervasive under-reimbursement by Pharmacy Benefit Managers, who serve as contract pharmacies, are engaged as vital stakeholders in the 340B Drug Pricing Program and incur no additional risk as a result of any future implementation of the Pilot Program. Administrative Costs Under a Potential 340B Rebate Model Pilot Program I. The 340B Pilot Program suggests that the plan should specify if rebates are paid at the package level or at the unit level. Significant inventory management complexities are unavoidable and administratively burdensome for pharmacies due to the differing pricing structures for Maximum Fair Price (MFP) drugs dispensed to Medicare beneficiaries and to beneficiaries of other payers. In an effort to minimize any additional administrative burden associated with inventory management, NACDS strongly urges HRSA to require rebates to be paid at the unit level. 340B Pilot Program Implementation Recommendations II. Some pharmaceutical manufacturers have alleged the need for a rebate model to prevent providing both a 340B discount and an MFP refund on the same claim. However, there are alternative methodologies to prevent 340B/MFP duplicate discounts and other types of duplicate discounts that do not rely upon a rebate model. NACDS implores HRSA to consider alternative methodologies for achieving the stated manufacturer goals of avoiding duplicate discounts. The agencies should consider the development of a centralized clearinghouse run by a conflict-free vendor that would use 340B claims data retrospectively submitted by covered entities to remove those claims from the claims on which manufacturers must pay MFP refunds. In fact, CMS has already stated it plans to develop and test such a model to prevent duplicate discounts for 340B and Medicare Part D inflation rebates. NACDS suggests that a centralized clearinghouse seek to achieve the following: A clearinghouse should prevent duplicate discounts before they occur, rather than identifying and correcting duplicate discounts after they have occurred and the claim adjudicated. A clearinghouse should only be used to prevent duplicate discounts prohibited under federal law (i.e., Medicaid, Medicare drugs subject to MFP, and Medicare drugs subject to inflation rebates). A clearinghouse should replace all state requirements for identifying 340B Medicaid claims. If a clearinghouse is used to prevent duplicate discounts for drugs subject to MFP, or any other instance where a drug is subject to multiple discounts, manufacturers should not be permitted to have individual deduplication requirements for covered entities as part of their MFP effectuation plans required by CMS. Covered entities should only be required to submit to the clearinghouse the minimum necessary 340B claims data. A clearinghouse should provide covered entities an opportunity to submit supplemental data (e.g., indicating a claim previously identified as 340B is non-340B or a claim not previously submitted and determined as 340B is 340B). If a covered entity submits the required 340B claims data to the clearinghouse, then it should be presumed that the entity has met its legal obligation to prevent duplicate discounts. The clearinghouse should only provide data to manufacturers that indicates that a particular claim was 340B, not the underlying data submitted by covered entities. Covered entities, not manufacturers, should decide whether a patient is eligible for 340B. If the agency elects to use a vendor to operate the clearinghouse, the vendor must be determined to be conflict-free (i.e., does not contract with pharmaceutical manufacturers). Thank you for your consideration. Please do not hesitate to contact Dr. Christie Boutte, PharmD, NACDS Senior Vice President, Reimbursement, Innovation, and Advocacy, at CBoutte@nacds.org if you have any questions or would like to discuss further. Sincerely, Steven C. Anderson, FASAE, CAE, IOM President and Chief Executive Officer National Association of Chain Drug Stores
HRSA-2026-0001-0043FoundCare Inc2026-02-24T05:00Z2,369 chars
Please see attached for comment regarding Docket No. HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program HRSA RFI Response HRSA-Funded Health Center (Florida) Submitted on behalf of a HRSA-funded Community Health Center located in Florida Thank you for the opportunity to provide comments regarding the proposed 340B rebate model (HRSA-2026-03042). As a HRSA-funded health center serving a high proportion of Medicaid, uninsured, and underinsured patients in Florida, our organization relies on the 340B program to support comprehensive primary care, pharmacy services, chronic disease management, and enabling services. Using actual 2025 Q1Q3 claims data, we modeled the projected impact of transitioning IRA- affected drugs from current 340B acquisition cost to a rebate-based WAC purchasing structure. Under the existing framework, these medications represent approximately $345,000 in annual acquisition cost. Under a rebate model, upfront purchasing requirements would increase to approximately $2.7 million. This represents nearly eight times our current upfront drug cost for these medications. For a federally funded health center operating within structured grant budgets and fixed reimbursement rates, advancing this level of acquisition cost prior to reimbursement is a significant change in financial responsibility. Community health centers do not operate with large discretionary reserves. Drug purchasing is closely aligned with patient volume, Medicaid reimbursement, and federal grant allocations. Requiring health centers to temporarily absorb substantially higher costs introduces repayment timing uncertainty into routine operations. In addition to the financial component, a rebate structure requires ongoing tracking of eligible claims, monitoring of manufacturer repayment, reconciliation of variances, and management of any disputed amounts. These administrative responsibilities would need to be absorbed within existing staffing models. The 340B program has enabled health centers to reinvest savings directly into patient care and expanded access. Any change to the structure of that program should consider how increased upfront acquisition requirements align with the mission and funding model of HRSA-supported health centers. We appreciate HRSAs thoughtful evaluation of these impacts.
HRSA-2026-0001-0044(no commenter metadata)2026-02-25T05:00Z24,639 chars
340 Reb 1 On behalf of MyMichigan Healths 340B hospitals, consisting of: MyMichigan Medical Center Alpena, MyMichigan Medical Center Gladwin, MyMichigan Medical Center Sault, MyMichigan Medical Center Standish, and MyMichigan Medical Center West Branch, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on MyMichigan Health that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which MyMichigan Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. MyMichigan Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that MyMichigan Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require MyMichigan Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, MyMichigan Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had 2 expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The estimated additional costs to implement a 340B rebate model would be in excess of $250,000 the first year, with expectations that expenses would increase annually to maintain it. These expenses include increased staffing, diverting current staff, IT systems licensing and coordination, legal review, consulting services, third-party vendors fees, compliance activities, labor hours, and process for challenging denials. The quote we received from our third party administrator for implementation and fees to cover the first year was $102,500, and it would require additional staffing to oversee the claims processing, data submission, reconciliation of rebates, audit support, and challenging denials. While a few of these costs may be one time, far and away these would be ongoing expenses that would increase over time. Staffing Impacts Under a Potential 340B Rebate Program. MyMichigan Health does not currently have the staff needed to comply with a Rebate Program. Rural safety net hospitals operate on limited budgets and the intent of the 340B program was to stretch scarce federal resources. This model would severely impact our ability to serve our indigent patient population. HRSA has grossly underestimated the labor burden of implementing a rebate model. This model would require a completely different workflow and as it would be implemented gradually, and covered entities would essentially be operating under multiple models and workflows. This would require an additional 1-2 full time employees initially, and more as the program expanded. This is a resource burden with a lot of hidden costs, and individuals that have the knowledge of the 340B program and the skills required to hold this position are rare. Securing a qualified candidate and training them properly would take at least one year. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. MyMichigan Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. As shared earlier, IT and third party vendor costs would be significant and ongoing. Implementation requires not only financial resources, but additional staffing resources involving multiple departments, including but not limited to IT, 340B compliance team, legal, billing, pharmacy, and finance. This model will create unnecessary staffing burdens on the hospitals and potentially lead to overtime and contracted labor expenses to make sure patient care is not impacted. 3 Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. While we do provide some data to 340B ESP, it is not the same data elements that would be required for the rebate model. We do heavily rely on our third party vendors to develop reports and provide the required data in the correct format. Some vendors are simply unable to provide the information that is needed, and we will have to manually retrieve and report it. This would require us to access multiple systems as insurers reimburse claims differently for hospital versus pharmacy, and we would also have to satisfy multiple manufacturers different data element requests. We have already had many challenges trying to comply with the 41 manufacturers restricting contract pharmacy access and 340B ESP has not provided the service required to resolve our issues. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force MyMichigan Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. MyMichigan Healths 340B hospitals would be unlikely to have enough cash on hand to cover these upfront costs, especially as the program expands. Additionally, we submit payments to our wholesalers weekly and the 10-day turnaround for rebate payments, if met, still would not be timely to cover these additional costs. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that MyMichigan Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our charity care program to support underinsured and uninsured patients will be severely impacted. The money spent on implementing and maintaining this rebate model will directly impact our ability to serve our most vulnerable community members. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed 4 premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. MyMichigan Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon posted its Terms of Use for the Beach Rebate Model platform and required Covered Entities to accept them before submitting rebate requests via the platform. Beacon Terms contain numerous aggressive, inequitable, and concerning provisions that negatively impact participating Covered Entities legal rights. MyMichigan Health tried to engage with Beacon to revise the terms and conditions and they refused. MyMichigan Health would not enter into a contract on Beacons terms if we had a choice between vendors, but we did not. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on MyMichigan Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, MyMichigan Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. 5 If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow MyMichigan Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. On behalf of MyMichigan Healths 340B hospitals, consisting of: MyMichigan Medical Center Alpena, MyMichigan Medical Center Gladwin, MyMichigan Medical Center Sault, MyMichigan Medical Center Standish, and MyMichigan Medical Center West Branch, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on MyMichigan Health that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which MyMichigan Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. MyMichigan Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that MyMichigan Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require MyMichigan Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, MyMichigan Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The estimated additional costs to implement a 340B rebate model would be in excess of $250,000 the first year, with expectations that expenses would increase annually to maintain it. These expenses include increased staffing, diverting current staff, IT systems licensing and coordination, legal review, consulting services, third-party vendors fees, compliance activities, labor hours, and process for challenging denials. The quote we received from our third party administrator for implementation and fees to cover the first year was $102,500, and it would require additional staffing to oversee the claims processing, data submission, reconciliation of rebates, audit support, and challenging denials. While a few of these costs may be one time, far and away these would be ongoing expenses that would increase over time. Staffing Impacts Under a Potential 340B Rebate Program. MyMichigan Health does not currently have the staff needed to comply with a Rebate Program. Rural safety net hospitals operate on limited budgets and the intent of the 340B program was to stretch scarce federal resources. This model would severely impact our ability to serve our indigent patient population. HRSA has grossly underestimated the labor burden of implementing a rebate model. This model would require a completely different workflow and as it would be implemented gradually, and covered entities would essentially be operating under multiple models and workflows. This would require an additional 1-2 full time employees initially, and more as the program expanded. This is a resource burden with a lot of hidden costs, and individuals that have the knowledge of the 340B program and the skills required to hold this position are rare. Securing a qualified candidate and training them properly would take at least one year. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. MyMichigan Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. As shared earlier, IT and third party vendor costs would be significant and ongoing. Implementation requires not only financial resources, but additional staffing resources involving multiple departments, including but not limited to IT, 340B compliance team, legal, billing, pharmacy, and finance. This model will create unnecessary staffing burdens on the hospitals and potentially lead to overtime and contracted labor expenses to make sure patient care is not impacted. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. While we do provide some data to 340B ESP, it is not the same data elements that would be required for the rebate model. We do heavily rely on our third party vendors to develop reports and provide the required data in the correct format. Some vendors are simply unable to provide the information that is needed, and we will have to manually retrieve and report it. This would require us to access multiple systems as insurers reimburse claims differently for hospital versus pharmacy, and we would also have to satisfy multiple manufacturers different data element requests. We have already had many challenges trying to comply with the 41 manufacturers restricting contract pharmacy access and 340B ESP has not provided the service required to resolve our issues. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force MyMichigan Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. MyMichigan Healths 340B hospitals would be unlikely to have enough cash on hand to cover these upfront costs, especially as the program expands. Additionally, we submit payments to our wholesalers weekly and the 10-day turnaround for rebate payments, if met, still would not be timely to cover these additional costs. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that MyMichigan Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our charity care program to support underinsured and uninsured patients will be severely impacted. The money spent on implementing and maintaining this rebate model will directly impact our ability to serve our most vulnerable community members. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. MyMichigan Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon posted its Terms of Use for the Beach Rebate Model platform and required Covered Entities to accept them before submitting rebate requests via the platform. Beacon Terms contain numerous aggressive, inequitable, and concerning provisions that negatively impact participating Covered Entities legal rights. MyMichigan Health tried to engage with Beacon to revise the terms and conditions and they refused. MyMichigan Health would not enter into a contract on Beacons terms if we had a choice between vendors, but we did not. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on MyMichigan Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, MyMichigan Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow MyMichigan Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions.
HRSA-2026-0001-0045David Nemiroff · Garden City, NY, United States2026-02-25T05:00Z4,836 chars
Re: Request for Information 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) To Whom It May Concern: I am writing on behalf of Harmony Healthcare Long Island, a communitybased healthcare provider that relies on the 340B Drug Pricing Program to stretch scarce resources and ensure access to care for medically undeserved and lowincome patients across Long Island. In 2025 we served over 48,000 individuals. 90% live under the federal poverty level and 25% are uninsured. We appreciate HRSAs willingness to seek stakeholder input following the courts vacatur and remand of the prior rebate pilot and recognize the agencys responsibility to ensure program integrity. However, we are deeply concerned that any shift from the longstanding upfront 340B discount to a manufacturercontrolled rebate model would materially harm Harmony Healthcare Long Island and the patients we serve. 1. CashFlow Disruption Would Undermine Patient Care Under the current 340B structure, covered entities receive the statutory discount at the point of purchase, allowing us to predictably manage cash flow and reinvest savings directly into patient services. We used our savings in 2025 to support almost 5,000 individuals receive free or discounted medications. A rebate model would require Harmony Healthcare Long Island to pay full market prices upfront and wait for reimbursement, transferring financing risk from manufacturers to safetynet providers. We anticipate that we will have to put up to $500,000+ at risk in this new rebate model. Money we may have to borrow and pay interest on. National hospital and provider organizations have consistently warned that this float requirement would strain already thin margins and divert working capital away from patient care, particularly for organizations serving Medicaidinsured and uninsured populations. For community providers like ours, even short delays or partial denials of rebates could translate into reduced clinical services, staffing constraints, or delayed care. In 2025 our margin was less than 1% so we do not have the financial capacity to support a "float." 2. Increased Administrative and Compliance Burden HRSAs RFI appropriately asks stakeholders to describe the administrative costs of a rebate model. From our perspective, a rebatebased system would be significantly more complex than the current discount mechanism, requiring new IT systems, expanded data reporting, and ongoing reconciliation of manufacturer rebate determinations. As noted by multiple provider groups and legal analyses, rebate models introduce uncertainty around rebate eligibility, timing, and dispute resolution, while offering covered entities limited recourse when rebates are delayed or denied. These additional burdens would disproportionately affect smaller and communitybased providers like Harmony Healthcare Long Island that do not have large compliance or finance departments. We estimate it could cost us an additional $150,000 in new hires to manage the rebate program and new software and internal audit costs. These are conservative estimates based on current data available. So the costs could be much higher. 3. Risk to Access for Vulnerable Patients The 340B statute was designed to enable covered entities to stretch scarce Federal resources as far as possible. Any model that delays or jeopardizes access to 340B savings undermines this core purpose. Provider and hospital associations have warned that rebate models risk reducing access to medications and essential services for vulnerable populations by destabilizing the financial foundation of the safety net. At Harmony Healthcare Long Island, 340B savings directly support patient access initiatives, care coordination, and medication affordability. A rebate model that introduces uncertainty or delays into this funding stream would have realworld consequences for the communities we serve. 4. Request to HRSA For these reasons, we respectfully urge HRSA to: Preserve the upfront discount model as the default mechanism for the 340B Program. Refrain from implementing any rebate model that is mandatory for covered entities or that shifts financial risk to safetynet providers. If HRSA continues to explore rebate concepts, ensure that participation is fully voluntary for covered entities, includes guaranteed prompt payment, clear standards for rebate approval/denial, and no unfunded administrative mandates. We appreciate the opportunity to comment and urge HRSA to carefully weigh the operational, financial, and patientaccess impacts on community providers like Harmony Healthcare Long Island before considering any fundamental change to a program that has supported vulnerable patients for more than 30 years. Respectfully submitted, David Nemiroff, LCSW President/CEO Harmony Healthcare Long Island
HRSA-2026-0001-0046(no commenter metadata)2026-02-26T05:00Z22,372 chars
Rooks County Health Center (RCHC), a 22-bed critical access hospital in Plainville, Kansas, strongly opposes the Department of Health and Human Services (HHS) "Request for Information: 340B Rebate Model Pilot Program" to replace the current upfront discount mechanism. RCHC argues that a rebate model would impose enormous and unsustainable administrative costs and burdens that far outweigh any potential benefits. Key points of opposition include: Financial Strain: A shift to a rebate model would impose estimated one-time startup costs of $95,000$115,000 and ongoing annual costs of $70,000$90,000. These costs would consume an estimated 2030% of RCHC's 340B margin for the drugs included in the pilot, substantially eroding the program's benefit. Staffing Impacts: The program would require at least 0.81.0 additional full-time equivalent (FTE) staff member for claims review, tracking, and reconciliationa difficult position to fill in a rural areaand would divert existing staff from clinical and core financial duties. RCHC estimates an added administrative workload of 80100 hours per month, significantly more than HRSA's estimate. Cash Flow Issues: The rebate model would force RCHC to purchase high-cost drugs at full price and wait for rebates, effectively providing interest-free loans to drug companies. This would reduce the hospital's cash on hand, potentially forcing delays in capital projects like the planned MRI/nuclear medicine and rehabilitation expansion, and limiting inventory of high-cost specialty drugs. Adverse Patient Impact: The reduction in net 340B savings would lead to reduced or delayed services, a possible reduction in charity care, and decreased ability to subsidize essential services, potentially forcing patients to travel long distances for care. Reliance Interests: RCHC has structured its operations, staffing, and financial planning around the upfront discount model for years and reasonably relied on this consistent mechanism. A switch to a rebate model disrupts these settled interests without a clear, systemic problem with the current system. Data/Platform Concerns: The model would require submission of more granular claims data and raise concerns about the security and privacy of patient data, particularly given prior issues with the proposed Beacon IT platform's terms, data requirements, and customer service. RCHC urges HRSA to abandon the rebate concept and adopt a neutral, third-party clearinghouse as a less burdensome alternative for 340B/MDPNP duplicate discount prevention. If HRSA proceeds, RCHC demands an opportunity to comment on the specific, critical details of the final program. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Rooks County Health Center (RCHC) in Plainville, Kansas, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. RCHC is a 22bed critical access hospital and the only hospital in Rooks County, serving an effective service area of nearly 1,300 square miles and more than 8,000 residents of northwest Kansas. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Rooks County Health Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model appears based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Rooks County Health Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Rooks County Health Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Rooks County Health Center can spend on patient care and comprehensive health care services. Administrative costs Any rebate program would require Rooks County Health Center to spend significant sums on new administrative costs. RCHC participates in 340B as a small rural critical access hospital with approximately 170 employees and 22 staffed beds. When we chose to participate in the 340B program, RCHC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. For up to 25 drugs under a 340B Rebate Model Pilot Program, RCHC estimates: Onetime startup costs (first 1218 months): approximately $95,000$115,000, including: IT build and interface work with our 340B thirdparty administrator (TPA) and pharmacy system: $40,000$50,000 (vendor quotes for interface development, mapping, and testing). Internal project management, policy updates, and staff training (pharmacy, revenue cycle, finance, compliance): $25,000$30,000 in labor time. Legal and compliance review of new contracts, Beacon/other platform terms, and datause agreements: $15,000$20,000. External consulting support for initial implementation and reconciliation process design: $15,000. Ongoing annual costs: approximately $70,000$90,000 per year, including: 0.50.6 FTE pharmacy/finance analyst dedicated to rebate claim submission, tracking, reconciliation, and appeals (salary and benefits): $45,000$55,000. Increased TPA fees for building and maintaining rebatespecific data feeds, claim edits, and reporting: $10,000$15,000 annually (preliminary vendor estimates tied to perclaim or perdrug fees). Additional audit preparation and support (internal and external): $5,000$10,000 annually. Ongoing legal/compliance review of changing manufacturer requirements and denial policies: $5,000$10,000 annually. RCHCs key cost drivers will be increased staffing, TPA/vendor charges, and complex new reconciliation workflows. These incremental costs would cover: Claimlevel eligibility validation and flagging for the rebate program. Data extraction and submission to manufacturers or a rebate platform. Rebate tracking, reconciliation of payments, and chasing down missing or underpaid rebates. Responding to and challenging denials, supporting audits, and maintaining documentation. Today, under the upfront 340B discount model, much of this burden does not exist. Our current administrative structure can manage 340B with a small fraction of the labor and vendor costs described above. Moving some drugs to a rebate model would therefore layer new costs on top of our existing 340B operations rather than replace them. RCHCs current net annual benefit from 340B savingsafter existing administrative costsis on the order of $300,000$400,000 across our outpatient drug portfolio, a material margin contribution for a rural governmental hospital district. If the rebate model applies to 25 highcost negotiated drugs, the additional $70,000$90,000 in yearly administrative costs would consume an estimated 2030% of our 340B margin for those drugs alone. This would substantially erode the core benefit of the 340B Program and is disproportionate for a hospital of our size. Staffing impacts Rooks County Health Center does not currently have the staff needed to comply with a Rebate Program. Our pharmacy, finance, and revenue cycle teams are lean and crosstrained, supporting inpatient acute care, outpatient services, emergency care, rehabilitation, and specialty clinics for the region. Implementation of a 340B Rebate Model Pilot Program would: Require at least 0.81.0 additional FTE, likely a pharmacy business analyst or 340B/revenue cycle coordinator, dedicated to: Claims review, eligibility checking, and file creation. Rebate submission and tracking across up to 25 drugs and multiple manufacturers. Investigating shortpays and denials and coordinating appeals. Divert approximately 0.20.3 FTE of existing pharmacist and finance staff time from direct clinical support and broader financial management to new administrative tasks. Given our rural location and tight labor market, RCHC would need at least 90120 days of advance notice to recruit, hire, and train this additional FTE. In practice, filling such a specialized role in northwest Kansas could take longer. HRSAs current estimate of only 5 hours per week in additional work for up to 25 drugs dramatically underestimates the real operational demands in a small rural setting. For RCHC, we project approximately 80100 hours per month in added administrative workload across pharmacy, finance, IT, and compliance, even after initial implementation, based on: Weekly file generation and validation for multiple manufacturers. Monthly reconciliation of payments, variance research, and resubmission of disputed claims. Ongoing monitoring of changing manufacturer rules and documentation requirements. For a critical access hospital with limited nonclinical headcount, this is a significant and unsustainable increase. Systems and infrastructure Rooks County Health Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. We utilize our EHR and pharmacy systems in combination with a 340B TPA to manage eligibility, mixeduse, and contract pharmacy claims. There is currently no automated pathway for the type of detailed medical claims data and linelevel documentation that drug manufacturers are likely to demand under a rebate model. To implement a 340B Rebate Model Pilot Program, RCHC would require: New or modified IT interfaces between our EHR, pharmacy system, billing system, and TPA to create appropriate claim files for each manufacturer or platform. Custom reporting tools to extract diagnosis codes, place of service, and other clinical details that typically are not part of standard 340B claim files. Secure filetransfer processes and auditready archival of submitted and paid rebate data. We estimate: System development and integration: $40,000$50,000 onetime for vendor programming, testing, and staff time. Ongoing maintenance and support: approximately $10,000 per year for interface monitoring, updates, and troubleshooting. Because our TPA does not have a direct, automated data feed into our EHR for all of the detailed clinical information that a rebate model might require, assembling the necessary medical claims data would largely fall to manual work: running custom reports, cleaning data, and reformatting files for upload. This creates significant risk of error, delays, and potential PHI exposure that does not exist under the current upfront discount model. Data collection burden During the prior iteration of the Rebate Program, both HRSA and drug companies suggested that a rebate mechanism would not impose new datarelated burdens on 340B hospitals, asserting that hospitals already provide the required information through tools like 340B ESP. That has not been our experience. For Rooks County Health Center, a rebate model would require: Submission of more granular claims data than is typically required today, including diagnosis codes, sites of care, and patientlevel details that are not currently sent to manufacturers. Additional internal controls to protect PHI and comply with HIPAA and state privacy laws in the context of expanded data sharing. This would be a new and substantial burden for our small rural facility, not an incremental or negligible change. Payment timing and cash flow Unlike the existing upfront discount mechanism, any rebate mechanism will force Rooks County Health Center to effectively provide drug companies interestfree loans as we await the discounts we are owed under the 340B statute. Even if drug companies paid within a 10day period as required under the prior iteration of the Rebate Program, that delayed discount would have meaningful impact on our institution and the patients we serve. As a 22bed critical access hospital whose financial stability is central to maintaining essential services in Rooks County, RCHC closely manages cash on hand to support payroll, supplies, capital equipment, and ongoing expansion projects such as our planned MRI and nuclear medicine addition and dedicated rehabilitation center. Having to purchase highcost drugs at full price and wait weeks for rebates would: Reduce our average days cash on hand. Force us to prioritize liquidity over investments in service expansion and modernization. Limit our ability to maintain inventory of certain highcost specialty drugs for oncology, rheumatology, and other chronic conditions. In effect, the rebate model shifts the financing burden from large manufacturers to small rural hospitals that are least able to absorb it. Adverse patient and community impacts All of these many different costs and burdens add up. Unfortunately, that means that Rooks County Health Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. If the Rebate Program is implemented as described, RCHC anticipates: Reduced or delayed services: Potential delays in implementing our permanent MRI and nuclear medicine facility and rehabilitation center project due to reduced available capital from 340B savings. Slower replacement of diagnostic imaging and other clinical equipment. Impact on patient services: Possible reduction in charity care and financial assistance programs for underinsured and uninsured patients if net 340B savings decline. Decreased ability to subsidize less profitable yet essential services such as outpatient rehabilitation, chronic disease management, and some specialty clinics. Potential access issues for highcost drugs: RCHC may no longer be able to routinely stock certain highpriced drugs if we must float the difference between the full price and the 340B price over a prolonged period. This could force patients to travel 6090 miles to larger urban hospitals (e.g., in Hays or Salina), imposing significant hardship on elderly, lowincome, and transportationlimited patients. RCHC serves a disproportionate share of Medicare and Medicaid patients typical of rural Kansas critical access hospitals and is the largest employer in Plainville (population approximately 1,700). Any reduction in our services or financial stability has a cascading effect on the health and economic vitality of the entire region. Uncertainty over whether HRSA will proceed with a rebate program has already affected our financial planning. We have modeled scenarios in which we defer or phase large capital projects, including imaging and rehabilitation expansions, if 340B margins are reduced or become unpredictable. This uncertainty complicates longterm planning, recruitment of providers, and commitments to new service lines. Reliance interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. Since its inception, the 340B Program has consistently provided discounts through upfront pricing rather than postsale rebates. Rooks County Health Center reasonably relied on this history when designing its internal operations, staffing, thirdparty contractual relationships, and financial planning for the use of 340B savingsall based on an upfrontdiscount model. Concretely, RCHC: Budgets expected upfront 340B savings into annual operating plans to support services such as emergency care, diagnostic imaging, physical therapy, and specialty clinics. Incorporates 340B savings into cashonhand projections and multiyear capital plans, including the MRI/nuclear medicine and rehabilitation expansion project. Uses 340B savings to help stabilize staffing in key clinical areas in a very competitive rural labor market. A fundamental switch now would disrupt these settled reliance interests. Absent any identified, systemic problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in pilot form. Problems with the Beacon IT platform Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the program. In the limited time we had to prepare for the start of that program, we encountered serious problems with Beacon. For Rooks County Health Center, those concerns included: Terms and Conditions: Overly broad datause language and inadequate assurances regarding PHI protection and limitations on secondary data use, which raised red flags for our legal and compliance staff. Shifting data requirements: Frequently changing specifications for file formats, data elements, and submission methods, causing confusion and increasing the risk of inadvertent noncompliance. Customer service: Limited responsiveness and lack of clear escalation paths when technical or policy questions arose. Any future Rebate Program must have appropriate guardrails in place to mitigate privacy and security concerns related to patient information and data submission. At a minimum, HRSA should: Require standardized, HIPAAcompliant datause agreements with clear limitations on use and redisclosure of coveredentity and patient data. Establish minimum performance standards for any platform vendor, including uptime, response times, and support quality. Provide a transparent mechanism for covered entities to raise and resolve concerns about vendor practices directly with HRSA. Alternatives to avoid 340B/MDPNP duplicate discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Rooks County Health Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Association (AHA) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a thirdparty clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the thirdparty clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Rooks County Health Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, thirdparty clearinghouse. If, however, HRSA chooses to move forward with this effort, it must allow Rooks County Health Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program, including the rural residents RCHC serves in northwest Kansas. Please contact me if you have questions. Sincerely, Jeff Van Dyke Chief Executive Officer Rooks County Health Center 1210 N Washington Plainville, Kansas, 67663
HRSA-2026-0001-0047Bluestem Health2026-02-27T05:00Z5,826 chars
See attached file(s) February 27, 2026 To Whom It May Concern: We appreciate the opportunity to share feedback on HRSAs Request for Information about a possible shift to a rebate-based model in the 340B Drug Pricing Program. Bluestem Health is a Federally Qualified Health Center and a 340B-covered entity. We recognize that HRSA is focused on program integrity, transparency, and legal compliance. Shifting from the current upfront discount model to a rebate-based system would bring major changes to how covered entities operate, manage finances, and handle administration. Based on our experience, we outline key points and potential impacts below. 1. Administrative and Operational Impacts A rebate-based 340B model would make administration much more complex for Bluestem Health. Currently, we receive savings at the time of purchase, allowing us to focus on patient care rather than tracking and reconciling purchases later. A rebate framework would require: Tracking of every eligible 340B claim across multiple dispensing locations Ongoing reconciliation between acquisition cost, rebate eligibility, and rebate receipt These changes would increase our administrative burden and reduce resources available for clinical care and patient support. We anticipate needing to hire or reclassify at least one full-time staff member to manage this change. 2. Financial and Cash-Flow Considerations Switching to a rebate model would create serious cash-flow challenges for Bluestem Health, especially since safety-net providers like us already work with tight budgets. We are already facing a $1.3 million deficit in 2026, have had a reduction-in-force, and this model would exacerbate it. 340B savings would be delayed, potentially by months. Cash reserves would need to absorb timing gaps between purchase and rebate receipt. For organizations with limited working capital, this delay could restrict the ability to: Maintain medication access for uninsured or underinsured patients. Support pharmacy services and care coordination programs Sustain other patient-focused services funded by 340B savings. 3. Staffing and IT Infrastructure Implications Implementing a rebate model would require new or expanded investments in: Pharmacy information systems and data analytics platforms Claims adjudication and rebate tracking software Additional pharmacy, finance, and compliance staff Many covered entities, especially smaller hospitals and clinics cannot afford these extra costs without reducing other services. Hiring specialized staff or working with outside vendors would further increase expenses. 4. Rebate Denials and Dispute Processes A rebate model introduces the risk of: Partial or full rebate denials Delayed adjudication Increased disputes between manufacturers and covered entities It is essential to have clear, timely, and consistent ways to resolve disputes. Without set timelines and clear rules, covered entities could face prolonged uncertainty, which would undermine financial planning and service delivery. Weve also had experiences trying to communicate with pharmaceutical manufacturers in our Prescription Assistance program and other customer support issues. Trying to communicate with them has proven very difficult, making it hard to reach someone and help them understand our patients needs. I do not see them adding staff to handle phone calls and emails when we have issues. This would add to our administrative burden and increase the time our staff spends on the phone. 5. Data Collection and Reporting Requirements If data collection and reporting requirements increase, covered entities may need to submit detailed prescription-level data, potentially across multiple systems and vendors. This raises concerns about: Data accuracy and consistency Administrative burden Risk of errors leading to rebate denials or compliance findings Any pilot program should balance oversight goals with what is practical for participating entities. 6. Program Integrity and Duplicate Discount Prevention Federally Qualified Health Centers help maintain program integrity and prevent duplicate discounts. However, a rebate model does not automatically fix this issue and could make it more complicated. In Nebraska, we are a carved-out state, so 340B covered entities cannot bill Medicaid. As a result, the duplicate discount issue has never applied to us. 7. Effects on Patient Access to Medications The 340B Program helps covered entities expand access to medications and related services for vulnerable populations. Delays in receiving savings under a rebate model could: Reduce medication assistance programs. Limit the availability of pharmacy services. Increase financial barriers for uninsured and underinsured patients. Any pilot program should closely review how these changes could affect patient access and health outcomes. Conclusion We appreciate HRSAs efforts to work with stakeholders and consider changes to the 340B Program. Based on our experience, a rebate-based model would create major administrative, financial, and operational challenges for covered entities and could unintentionally affect patient access and safety-net services. We urge HRSA to consider these impacts carefully and ensure any pilot program includes: Voluntary participation Clear operational guidance Protections against cash-flow disruption Transparent dispute resolution mechanisms Ongoing evaluation of patient access outcomes Thank you for considering our input. We are open to further discussion and can provide more information or clarification as HRSA moves forward. Respectfully submitted, Brad L. Meyer, FACMPE Chief Executive Officer
HRSA-2026-0001-0048Jonathan Gleason · Hill City, KS, United States2026-02-27T05:00Z12,140 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Graham County Hospital in Hill City Kansas, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Graham County Hospital that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism which Graham County Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Graham County Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Graham County Hospital can spend on patient care and comprehensive health care services. 2 Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Graham County Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Graham County Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Graham County Hospital anticipates the incremental administrative and operational costs will amount to hundreds or more hours for both our in-house staff and third- party staff by our TPA, IT group, legal and others. Key cost drivers for Graham County Hospital include an estimated 1.5 additional FTEs which include salary and benefits for additional staff and IT to qualify every expenditure and then pursue rebate reimbursement through an already proven difficult system (Beacon). As such we anticipate it will cost our hospital upwards of an estimated $120,000+ per year. An additional $24,000 per year in third party fees to set up and actively engage in data feeds necessary to comply, additionally an unknown potential legal cost to recoup justified rebates from the deep pockets of drug manufacturers. Thus, reducing the available benefit to our rural community as we seek to stretch scarce resources in our area, by an estimated $144,000 or more per year. An amount that for our rural hospital has the potential to push us into the red for a program that was intended to promote long term sustainability and stretching of scarce resources. The activities required of Graham County Hospital in the event a rebate program were approved would cover claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials, IT networking burdens, and legal challenges. All of which incur additional cost on a program that needs to be protected in its current format of an upfront discount. In addition, the cash flow requirements to support 340b medications and wholesale cost would be in the millions for our small critical access hospital, and the upfront cost would likely be sufficient to shutter our 340b program completely to our rural community. 3 Additional costs not included are costs associated with training staff, lost revenue during the training and transition period, and many other unforeseen circumstances surrounding a rebate program. Staffing Impacts Under a Potential 340B Rebate Program. Graham County Hospital does not currently have the staff needed to comply with a Rebate Program. As indicated before, a rebate model pilot program would require additional full-time employees and has the potential to cause current medical providers to reallocate work hours away from direct patient care to perform administrative functions. A minimum of 1.5 additional FTEs would be required as noted before to track, reconcile, work to ensure IT network administration, and legal framework for difficult to obtain rebates. HRSAs prior estimate of 2 additional work hours per week is a gross underestimation of the time it takes to file, reconcile, administer from an IT standpoint, and legal pressure for rebates we are duly owed. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Graham County Hospitals Third Party Administrator has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We will likely have additional fees from PDMI as they work to adapt their technology. We know for a fact that PDMI is currently unable to capture real pricing paid, and then post rebate pricing. Thus, making reporting inaccurate. We have also been made aware that PDMI may be unable to adjudicate our patient assistance card with these rebate metrics. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our hospital currently collects and maintains 340B data through our EHR, pharmacy dispensing system, wholesaler platform, and TPA (PDMI) We use third-party support for program oversight and conduct routine internal reviews along with annual 4 mock audits. 340B ESP is used only for limited manufacturer-required contract pharmacy verification it is not a rebate invoicing platform. A rebate model would significantly change our operations. Unlike the current upfront discount model, we would need to retrospectively identify eligible claims, reconcile NDC-level utilization, track payer reimbursements, and submit ongoing rebates through Beacon. It is not accurate that hospitals already submit all data required under a rebate model. The data we provide today through 340B ESP and payers for billing purposes does not include the detailed financial reconciliation and rebate tracking elements required under a manufacturer rebate framework. Implementing such a model would create ongoing administrative burden and additional costs for our hospital, which operates on narrow margins as a rural safety net provider. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Graham County Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We will likely shut down our patient assistance program. This program allows us to directly pass 340B savings to patients. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Graham County Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. We built a new family practice clinic to better serve our patients. Of course, part of the budget for this project included 340B revenue. Such a significant change could impact our ability to operate this. 5 340B savings through upfront discounts are budgeted directly into our finances to support cash-on-hand financial projections, annual 340B savings, impact to long term planning/projects for new services, repairs, provider support services, and many other items. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We were unable to get registered for multiple weeks even though it was eventually determined that we had submitted the correct supporting documentation. For all of these reasons, Graham County Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Graham County Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jonathan Gleason CEO Graham County Hospital Hill City, Kansas
HRSA-2026-0001-0049Charles Rohrbaugh · Baker, WV, United States2026-03-05T05:00Z24,157 chars
See attached file(s) HHS Docket No. HRSA-2026-03042 E. A. Hawse Health Center, Inc. 17978 SR 55 Baker, WV 26801 Date: February 19, 2026 Submitted to HRSA per their RFI To: The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Subject: Formal Comment Opposing HRSAs 340B Rebate Model Proposal Dear Administrator Engels: On behalf of E. A. Hawse Health Center, Inc., a Federally Qualified Health Center serving medically underserved populations across the region, I appreciate the opportunity to comment on the Health Resources and Services Administrations proposed 340B Rebate Model. After careful review, our organization has significant concerns regarding the financial feasibility, and operational practicality of this proposal. FQHCs only account for 6% of all 340B savings and every dollar saved through the program is required by statute to be accounted for. Therefore, FQHCs should be exempted from the rebate model to keep from unnecessarily disrupting primary care. I. Statutory Conflict The 340B statute, codified at 42 U.S.C. 256b(a)(1), clearly requires that manufacturers offer covered entities the opportunity to purchase covered outpatient drugs at or below the ceiling price. HRSAs rebate model replaces this front-end purchase mechanism with a retrospective rebate structure, which is inconsistent with Congressional intent, which was to stretch scarce Federal dollars. Is HRSA prepared to increase funding to covered entities which would be forced to absorb the initial purchase price of these drugs while waiting as much as 7 weeks for a rebate, provided the manufacturer approved the sale as 340B? II. Financial and Cash Flow Impacts Over the past twelve months, E. A. Hawse Health Center filled more than 181,000 prescriptions, of which at least 1,645 340B-eligible prescriptions were for drugs appearing on CMSs Medicare Fair Price (MFP) list annually, or roughly 137 monthly. Under the proposed rebate model, the monthly acquisition cost at commercial price would total $248,203.50, with expected rebate reimbursement of $496,407.00 received after 4560 days, creating an ongoing accounts receivable exposure of approximately $500,000. This structure forces FQHCs to finance the rebate lag, maintaining a constant six-figure deficit that diverts funds from patient care. III. Administrative Burden and Compliance Risk The rebate model would impose significant new administrative burdens on covered entities. For E. A. Hawse Health Center, this translates to roughly 400700 staff hours annuallyor 0.250.4FTE dedicated solely to rebate processing, reconciliation, and dispute resolution. IV. Rebate Rejections, Delays, and Manufacturer Control Manufacturers would retain control over whether to honor rebate requests, with expected rejection rates of 1015% and potential delays exceeding 90 days. HRSA has not established any enforceable dispute resolution mechanism, leaving covered entities financially vulnerable. If the current ADR procedure is what is used, HRSA admits it will take up to 18 months to resolve any dispute with no penalties to the manufacturers. My organization carves out of Medicaid, and there is only one BIN number to bill Medicaid prescriptions in West Virginia, so its pretty simple to avoid duplicate discounts. Additionally, the tracking system (funded by PhRMA) Beacon rebate platform is the same software as the MTF Beacon MFP platform which in the first two months of operation has proven to be wildly inaccurate and slanted to rebate denial over coverage. Correcting the errors is proving to be time consuming, labor intensive and generally unsatisfactory. It appears HRSA is in lockstep with the manufacturer desire to eliminate the 340B program, ignoring legislative intent and crippling the National Health Care safety net system. V. Impact on Patient Affordability and Compliance with Executive Orders Under this model, FQHCs would no longer know the true 340B cost at the point of sale, making compliance with Executive Orders requiring insulin and epinephrine to be sold at or below the 340B price impossible. This undermines affordable access for uninsured and underinsured patients. Last year, E. A. Hawse provided $4,352,924.26 in uncompensated discounts to underinsured/uninsured patients. We filled 34,389 cash prescriptions at an average price of $38.18 per prescription compared to 147,213 non-cash prescriptions with an average price of $142.82 per prescription. Financial expert Dave Ramsay said most families are the cost of a flat tire from bankruptcy. If an average tire costs roughly the same as a non-340B prescription, how many families would have been financially ruined without the 340B program as we have applied it? In addition, any savings generated through the program are put back into the program to provide sliding fee benefits above what our 330 grant covers, provide for school-based health, behavioral health, Dental care, diabetic services and any of the many other patient-oriented services we currently provide. VI. 340B program Integrity We are enrolled in the Beacon MFP, which works for the Manufacturers, and we enrolled in Beacon 340B prior to the withdrawal of the last rebate model. We identify all 340B prescriptions when a 340B drug is dispensed. Its not our integrity I worry about. I have seen very little if any from the Manufacturers. The disinformation disseminated by PhRMA is criminal. After decades of overcharging the American public for their products, they cannot withstand scrutiny from outside eyes. VII. Conclusion The HRSA 340B Rebate Model imposes unsustainable financial and administrative burdens and jeopardizes patient access. I respectfully urge HRSA to withdraw the proposal to maintain the statutory integrity and purpose of the 340B program. It can be clearly shown that the only party that would benefit from a Rebate program would be the manufacturers. The safety net would be gone and thousands if not millions would suffer. Thank you for the opportunity to submit these comments. Sincerely, Charlie Rohrbaugh Chief Operating Officer & Pharmacy Director E. A. Hawse Health Center, Inc. crohrbaugh@hawsehealth.com HHS Docket No. HRSA-2026-03042 E. A. Hawse Health Center, Inc. 17978 SR 55 Baker, WV 26801 Date: February 19, 2026 Submitted to HRSA per their RFI To: The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Subject: Formal Comment Opposing HRSAs 340B Rebate Model Proposal Dear Administrator Engels: On behalf of E. A. Hawse Health Center, Inc., a Federally Qualified Health Center serving medically underserved populations across the region, I appreciate the opportunity to comment on the Health Resources and Services Administrations proposed 340B Rebate Model. After careful review, our organization has significant concerns regarding the financial feasibility, and operational practicality of this proposal. FQHCs only account for 6% of all 340B savings and every dollar saved through the program is required by statute to be accounted for. Therefore, FQHCs should be exempted from the rebate model to keep from unnecessarily disrupting primary care. I. Statutory Conflict The 340B statute, codified at 42 U.S.C. 256b(a)(1), clearly requires that manufacturers offer covered entities the opportunity to purchase covered outpatient drugs at or below the ceiling price. HRSAs rebate model replaces this front-end purchase mechanism with a retrospective rebate structure, which is inconsistent with Congressional intent, which was to stretch scarce Federal dollars. Is HRSA prepared to increase funding to covered entities which would be forced to absorb the initial purchase price of these drugs while waiting as much as 7 weeks for a rebate, provided the manufacturer approved the sale as 340B? II. Financial and Cash Flow Impacts Over the past twelve months, E. A. Hawse Health Center filled more than 181,000 prescriptions, of which at least 1,645 340B-eligible prescriptions were for drugs appearing on CMSs Medicare Fair Price (MFP) list annually, or roughly 137 monthly. Under the proposed rebate model, the monthly acquisition cost at commercial price would total $248,203.50, with expected rebate reimbursement of $496,407.00 received after 4560 days, creating an ongoing accounts receivable exposure of approximately $500,000. This structure forces FQHCs to finance the rebate lag, maintaining a constant six-figure deficit that diverts funds from patient care. III. Administrative Burden and Compliance Risk The rebate model would impose significant new administrative burdens on covered entities. For E. A. Hawse Health Center, this translates to roughly 400700 staff hours annuallyor 0.250.4FTE dedicated solely to rebate processing, reconciliation, and dispute resolution. IV. Rebate Rejections, Delays, and Manufacturer Control Manufacturers would retain control over whether to honor rebate requests, with expected rejection rates of 1015% and potential delays exceeding 90 days. HRSA has not established any enforceable dispute resolution mechanism, leaving covered entities financially vulnerable. If the current ADR procedure is what is used, HRSA admits it will take up to 18 months to resolve any dispute with no penalties to the manufacturers. My organization carves out of Medicaid, and there is only one BIN number to bill Medicaid prescriptions in West Virginia, so its pretty simple to avoid duplicate discounts. Additionally, the tracking system (funded by PhRMA) Beacon rebate platform is the same software as the MTF Beacon MFP platform which in the first two months of operation has proven to be wildly inaccurate and slanted to rebate denial over coverage. Correcting the errors is proving to be time consuming, labor intensive and generally unsatisfactory. It appears HRSA is in lockstep with the manufacturer desire to eliminate the 340B program, ignoring legislative intent and crippling the National Health Care safety net system. V. Impact on Patient Affordability and Compliance with Executive Orders Under this model, FQHCs would no longer know the true 340B cost at the point of sale, making compliance with Executive Orders requiring insulin and epinephrine to be sold at or below the 340B price impossible. This undermines affordable access for uninsured and underinsured patients. Last year, E. A. Hawse provided $4,352,924.26 in uncompensated discounts to underinsured/uninsured patients. We filled 34,389 cash prescriptions at an average price of $38.18 per prescription compared to 147,213 non- cash prescriptions with an average price of $142.82 per prescription. Financial expert Dave Ramsay said most families are the cost of a flat tire from bankruptcy. If an average tire costs roughly the same as a non-340B prescription, how many families would have been financially ruined without the 340B program as we have applied it? In addition, any savings generated through the program are put back into the program to provide sliding fee benefits above what our 330 grant covers, provide for school-based health, behavioral health, Dental care, diabetic services and any of the many other patient-oriented services we currently provide. VI. 340B program Integrity We are enrolled in the Beacon MFP, which works for the Manufacturers, and we enrolled in Beacon 340B prior to the withdrawal of the last rebate model. We identify all 340B prescriptions when a 340B drug is dispensed. Its not our integrity I worry about. I have seen very little if any from the Manufacturers. The disinformation disseminated by PhRMA is criminal. After decades of overcharging the American public for their products, they cannot withstand scrutiny from outside eyes. VII. Conclusion The HRSA 340B Rebate Model imposes unsustainable financial and administrative burdens and jeopardizes patient access. I respectfully urge HRSA to withdraw the proposal to maintain the statutory integrity and purpose of the 340B program. It can be clearly shown that the only party that would benefit from a Rebate program would be the manufacturers. The safety net would be gone and thousands if not millions would suffer. Thank you for the opportunity to submit these comments. Sincerely, Charlie Rohrbaugh Chief Operating Officer & Pharmacy Director E. A. Hawse Health Center, Inc. crohrbaugh@hawsehealth.com HHS Docket No. HRSA-2026-03042 E. A. Hawse Health Center, Inc. 17978 SR 55 Baker, WV 26801 Date: February 19, 2026 Submitted to HRSA per their RFI To: The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Subject: Formal Comment Opposing HRSAs 340B Rebate Model Proposal Dear Administrator Engels: On behalf of E. A. Hawse Health Center, Inc., a Federally Qualified Health Center serving medically underserved populations across the region, I appreciate the opportunity to comment on the Health Resources and Services Administrations proposed 340B Rebate Model. After careful review, our organization has significant concerns regarding the financial feasibility, and operational practicality of this proposal. FQHCs only account for 6% of all 340B savings and every dollar saved through the program is required by statute to be accounted for. Therefore, FQHCs should be exempted from the rebate model to keep from unnecessarily disrupting primary care. I. Statutory Conflict The 340B statute, codified at 42 U.S.C. 256b(a)(1), clearly requires that manufacturers offer covered entities the opportunity to purchase covered outpatient drugs at or below the ceiling price. HRSAs rebate model replaces this front-end purchase mechanism with a retrospective rebate structure, which is inconsistent with Congressional intent, which was to stretch scarce Federal dollars. Is HRSA prepared to increase funding to covered entities which would be forced to absorb the initial purchase price of these drugs while waiting as much as 7 weeks for a rebate, provided the manufacturer approved the sale as 340B? II. Financial and Cash Flow Impacts Over the past twelve months, E. A. Hawse Health Center filled more than 181,000 prescriptions, of which at least 1,645 340B-eligible prescriptions were for drugs appearing on CMSs Medicare Fair Price (MFP) list annually, or roughly 137 monthly. Under the proposed rebate model, the monthly acquisition cost at commercial price would total $248,203.50, with expected rebate reimbursement of $496,407.00 received after 4560 days, creating an ongoing accounts receivable exposure of approximately $500,000. This structure forces FQHCs to finance the rebate lag, maintaining a constant six-figure deficit that diverts funds from patient care. III. Administrative Burden and Compliance Risk The rebate model would impose significant new administrative burdens on covered entities. For E. A. Hawse Health Center, this translates to roughly 400700 staff hours annuallyor 0.250.4FTE dedicated solely to rebate processing, reconciliation, and dispute resolution. IV. Rebate Rejections, Delays, and Manufacturer Control Manufacturers would retain control over whether to honor rebate requests, with expected rejection rates of 1015% and potential delays exceeding 90 days. HRSA has not established any enforceable dispute resolution mechanism, leaving covered entities financially vulnerable. If the current ADR procedure is what is used, HRSA admits it will take up to 18 months to resolve any dispute with no penalties to the manufacturers. My organization carves out of Medicaid, and there is only one BIN number to bill Medicaid prescriptions in West Virginia, so its pretty simple to avoid duplicate discounts. V. Impact on Patient Affordability and Compliance with Executive Orders Under this model, FQHCs would no longer know the true 340B cost at the point of sale, making compliance with Executive Orders requiring insulin and epinephrine to be sold at or below the 340B price impossible. This undermines affordable access for uninsured and underinsured patients. Last year, E. A. Hawse provided $4,352,924.26 in uncompensated discounts to underinsured/uninsured patients. We filled 34,389 cash prescriptions at an average price of $38.18 per prescription compared to 147,213 non-cash prescriptions with an average price of $142.82 per prescription. Financial expert Dave Ramsay said most families are the cost of a flat tire from bankruptcy. If an average tire costs roughly the same as a non-340B prescription, how many families would have been financially ruined without the 340B program as we have applied it? In addition, any savings generated through the program are put back into the program to provide sliding fee benefits above what our 330 grant covers, provide for school-based health, behavioral health, Dental care, diabetic services and any of the many other patient-oriented services we currently provide. VI. 340B program Integrity We are enrolled in the Beacon MFP, which works for the Manufacturers, and we enrolled in Beacon 340B prior to the withdrawal of the last rebate model. We identify all 340B prescriptions when a 340B drug is dispensed. Its not our integrity I worry about. I have seen very little if any from the Manufacturers. The disinformation disseminated by PhRMA is criminal. After decades of overcharging the American public for their products, they cannot withstand scrutiny from outside eyes. VII. Conclusion The HRSA 340B Rebate Model imposes unsustainable financial and administrative burdens and jeopardizes patient access. I respectfully urge HRSA to withdraw the proposal to maintain the statutory integrity and purpose of the 340B program. It can be clearly shown that the only party that would benefit from a Rebate program would be the manufacturers. The safety net would be gone and thousands if not millions would suffer. Thank you for the opportunity to submit these comments. Sincerely, Charlie Rohrbaugh Chief Operating Officer & Pharmacy Director E. A. Hawse Health Center, Inc. crohrbaugh@hawsehealth.com HHS Docket No. HRSA-2026-03042 E. A. Hawse Health Center, Inc. 17978 SR 55 Baker, WV 26801 Date: February 19, 2026 Submitted to HRSA per their RFI To: The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Subject: Formal Comment Opposing HRSAs 340B Rebate Model Proposal Dear Administrator Engels: On behalf of E. A. Hawse Health Center, Inc., a Federally Qualified Health Center serving medically underserved populations across the region, I appreciate the opportunity to comment on the Health Resources and Services Administrations proposed 340B Rebate Model. After careful review, our organization has significant concerns regarding the financial feasibility, and operational practicality of this proposal. FQHCs only account for 6% of all 340B savings and every dollar saved through the program is required by statute to be accounted for. Therefore, FQHCs should be exempted from the rebate model to keep from unnecessarily disrupting primary care. I. Statutory Conflict The 340B statute, codified at 42 U.S.C. 256b(a)(1), clearly requires that manufacturers offer covered entities the opportunity to purchase covered outpatient drugs at or below the ceiling price. HRSAs rebate model replaces this front-end purchase mechanism with a retrospective rebate structure, which is inconsistent with Congressional intent, which was to stretch scarce Federal dollars. Is HRSA prepared to increase funding to covered entities which would be forced to absorb the initial purchase price of these drugs while waiting as much as 7 weeks for a rebate, provided the manufacturer approved the sale as 340B? II. Financial and Cash Flow Impacts Over the past twelve months, E. A. Hawse Health Center filled more than 181,000 prescriptions, of which at least 1,645 340B-eligible prescriptions were for drugs appearing on CMSs Medicare Fair Price (MFP) list annually, or roughly 137 monthly. Under the proposed rebate model, the monthly acquisition cost at commercial price would total $248,203.50, with expected rebate reimbursement of $496,407.00 received after 4560 days, creating an ongoing accounts receivable exposure of approximately $500,000. This structure forces FQHCs to finance the rebate lag, maintaining a constant six-figure deficit that diverts funds from patient care. III. Administrative Burden and Compliance Risk The rebate model would impose significant new administrative burdens on covered entities. For E. A. Hawse Health Center, this translates to roughly 400700 staff hours annuallyor 0.250.4FTE dedicated solely to rebate processing, reconciliation, and dispute resolution. IV. Rebate Rejections, Delays, and Manufacturer Control Manufacturers would retain control over whether to honor rebate requests, with expected rejection rates of 1015% and potential delays exceeding 90 days. HRSA has not established any enforceable dispute resolution mechanism, leaving covered entities financially vulnerable. If the current ADR procedure is what is used, HRSA admits it will take up to 18 months to resolve any dispute with no penalties to the manufacturers. My organization carves out of Medicaid, and there is only one BIN number to bill Medicaid prescriptions in West Virginia, so its pretty simple to avoid duplicate discounts. V. Impact on Patient Affordability and Compliance with Executive Orders Under this model, FQHCs would no longer know the true 340B cost at the point of sale, making compliance with Executive Orders requiring insulin and epinephrine to be sold at or below the 340B price impossible. This undermines affordable access for uninsured and underinsured patients. Last year, E. A. Hawse provided $4,352,924.26 in uncompensated discounts to underinsured/uninsured patients. We filled 34,389 cash prescriptions at an average price of $38.18 per prescription compared to 147,213 non- cash prescriptions with an average price of $142.82 per prescription. Financial expert Dave Ramsay said most families are the cost of a flat tire from bankruptcy. If an average tire costs roughly the same as a non-340B prescription, how many families would have been financially ruined without the 340B program as we have applied it? In addition, any savings generated through the program are put back into the program to provide sliding fee benefits above what our 330 grant covers, provide for school-based health, behavioral health, Dental care, diabetic services and any of the many other patient-oriented services we currently provide. VI. 340B program Integrity We are enrolled in the Beacon MFP, which works for the Manufacturers, and we enrolled in Beacon 340B prior to the withdrawal of the last rebate model. We identify all 340B prescriptions when a 340B drug is dispensed. Its not our integrity I worry about. I have seen very little if any from the Manufacturers. The disinformation disseminated by PhRMA is criminal. After decades of overcharging the American public for their products, they cannot withstand scrutiny from outside eyes. VII. Conclusion The HRSA 340B Rebate Model imposes unsustainable financial and administrative burdens and jeopardizes patient access. I respectfully urge HRSA to withdraw the proposal to maintain the statutory integrity and purpose of the 340B program. It can be clearly shown that the only party that would benefit from a Rebate program would be the manufacturers. The safety net would be gone and thousands if not millions would suffer. Thank you for the opportunity to submit these comments. Sincerely, Charlie Rohrbaugh Chief Operating Officer & Pharmacy Director E. A. Hawse Health Center, Inc. crohrbaugh@hawsehealth.com
HRSA-2026-0001-0050Minnesota Community Care2026-02-26T05:00Z3,741 chars
Hello, my name is Ken Nelson, PharmD and I am the Head of Pharmacy for Minnesota Community Care which is Minnesota's largest Federally Qualified Healthcare Center (FQHC). I have been involved with pharmacy for over 36 years and am also an Apexus Certified Expert for the 340B program. I am here to strongly advocate that FQHC (and look alikes) are excluded from the post dispense 340B Rebate Model Pilot Program due the immediate and significant financial burden and damage it will place on our organization. Our organization has purchased 340B drugs via our wholesaler (McKesson) without problem for over two decades. Every single penny that the 340B program generates goes back into our organization to help support medical care for our marginalized communities. Our organization seldom times has paused payment to our drug wholesaler due to overall financial stress on the organization to meet critical operational needs. I had to pause payment as recent as yesterday and have done so multiple times already in 2026. It is important to understand that our FQHC is on the brink in the current environment of purchasing drugs even at 340B prices. It would be catastrophic for our organization and unattainable if we were suddenly forced to pay full WAC pricing on drugs and then expect a rebate in 10-30 days. We have a tenuous relationship at best with our drug wholesaler who has worked with us as we struggle to pay our 340B priced medications. It is extremely unlikely that they would extend our credit by many hundreds of thousands of dollars while drug wholesalers play the game of evaluating claims via the 340B Remodel Model Pilot program. I have seen the slow but sure decay of the contract pharmacy program as a result of the 340B ESP platform put in place by the drug manufacturers. Drug manufacturers continually ignore State laws and change program participation on a regular basis with this platform. The end result of this has been the direct loss of hundreds of thousands of dollars in revenue that would have gone back into direct care. This proposed 340B Rebate Model Pilot program will rapidly and effectively extinguish our pharmacy program, patient access and eventually the entire clinic operations. It is interesting to think that even though we are a closed door FQHC, i.e. all patients seen by our providers qualify for 340B drugs, that now drug manufacturers want to implement a platform that essentially causes the cessation of this care and benefits the drug manufacturer materially to verify patient/dispense eligibility. Also, against Minnesota State Law, this 340B Rebate Model will prevent access to these drugs at contract pharmacies simply because they won't be available. It goes without saying that drug manufactures will utilize whatever means necessary to ultimately provide less and less 340B drugs. My understanding is that the large hospital systems are the main reason for drug manufacturers pushing back on the system. If this is the case, this rebate model pilot should focus specifically on them while EXCLUDING FQHCs. In the State of Minnesota, FQHCs only receive around 3% of the total 340B savings generated. Although it is only 3%, the amount is critical for our very survival. FQHCs actually need increased support to provide cheaper primary care to our communities. This 340B Rebate Model Pilot Program will have a devastating adverse effects our safety net organizations. Please see attachment below showing the cost difference between 340B priced drugs and WAC cost purchasing required bye the proposed 340B Rebate Model Pilot Program. There is > 4-million-dollar acquisition price difference on these MFN drugs. We simply cannot afford this upfront money and will cease to exist.
HRSA-2026-0001-0051(no commenter metadata)2026-03-05T05:00Z2,800 chars
See attached file(s) Prowers Medical Center February 18, 2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Prowers Medical Center appreciates the opportunity to comment on HRSA's RFI regarding a potential 340B rebate model. We strongly oppose any rebate-based framework and urge HRSA not to pursue a rebate pilot in any form. 1.Rebate Models Conflict with the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the program's mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the program's safety-net purpose. 2. Cash-Flow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for high-cost specialty drugs. Even modest delays would create: Material cash-flow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead System-wide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHS's prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safety-net providers. 5.No Evidence Suggests a Rebate Model Can Be Implemented Without Harming Safety-Net Providers HRSA's RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Prowers Medical Center urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the program's statutory mission. Sincerely, Karl C. Nieschburg, MBA, CHC CHPC CHFP Compliance Officer Robin Thacker PharmD, BCPS, RPh Pharmacist Prowers Medical Center 401 Kendall Drive, Lamar, CO 81052 719-336-6740 (Direct) 719-336-8378 (Fax) prowersmedical.com
HRSA-2026-0001-0052Community Health Programs, Inc.2026-03-06T05:00Z10,945 chars
See attached file(s) Thank you for the opportunity to comment on the Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 HRSA should not implement a rebate model under the 340B Program. The 340B Rebate Model Pilot Program is a direct threat to the core mission of Community Health Centers and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on health centers. By requiring health centers to purchase medications at full price and wait for a rebate, this model would cause significant financial turmoil and directly impact CHCs ability to serve the 34 million patients who rely on us. The National Association for Community Health Centers (NACHC) data indicates that without discounted or free medications, a substantial portion of CHC patientsup to 3 million or morewould lose access to essential treatments. These patients often have chronic conditions like diabetes, heart disease, and behavioral health needs. They depend on the essential drugs included in the rebate pilot more than patients with any other conditions. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs health centers can afford to stock, directly contradicting the programs goal of increasing access to affordable medications. Since 90% of health center patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center. As a Covered Entity, we have several concerns, including but not limited to the following: 1. Costs to covered entities: a. Current administrative costs under the upfront 340B discount: i. The total cost for year 2025 in 340B transactions was $1,157,557.00 b. Administrative costs under a potential 340B rebate pilot program: i. The total cost for year 2025 if we needed to purchase at WAC price would have been $3,139.959.75 upfront. c. Staffing impacts under a potential 340B rebate pilot program: i. Health Centers will need to hire or reassign existing staff to untangle the complexities related to varying data submission requirements, timelines, and systems. Depending on the volume of prescriptions a pharmacy fills, health centers will face an increased administrative burden in terms of monitoring rebate claims and payments. In an attempt to address manufacturers concerns about duplicate discounts, the Pilot Program would force health centers to divert even more scarce resources away from patient care. Health centers have already absorbed significant administrative and technology costs over the past four years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. d. Systems and infrastructure for implementation of a potential 340B rebate model pilot program: i. The lack of standardization and varying requirements from each manufacturer will likely force health centers to use multiple systems to manage and report the same data, thereby increasing both costs and operational burdens. Health centers will need to invest in IT infrastructure upgrades and reassign staff to manage this new complexity, including reconciling payments and initiating dispute processes for denied rebates. The 340B Rebate Model Pilot Program is not only a financial threat to health centers but also a duplicative and unnecessary administrative burden. 2. Payment timing and potential cash flow impacts for covered entities: a. While rebates are expected to arrive within 10 days, there may be delays in receiving the full rebate, such as denials, which could create financial strain on health centers. Health Centers appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must guess the rebate amount and could potentially undercharge or overcharge patients due to confusion. 3. Rebate denials: a. If the rebate is denied, the health center takes a net loss on the transaction. The proposed 340B Rebate Model Pilot also presents challenges for compliance with 340B actual acquisition cost billing in fee-for-service Medicaid, which may lead to increased Medicaid costs. Both are because pharmacy software will not have access to the 340B price, which is necessary for accurate drug pricing. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Thank you for the opportunity to comment on the Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 HRSA should not implement a rebate model under the 340B Program. The 340B Rebate Model Pilot Program is a direct threat to the core mission of Community Health Centers and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on health centers. By requiring health centers to purchase medications at full price and wait for a rebate, this model would cause significant financial turmoil and directly impact CHCs ability to serve the 34 million patients who rely on us. The National Association for Community Health Centers (NACHC) data indicates that without discounted or free medications, a substantial portion of CHC patientsup to 3 million or morewould lose access to essential treatments. These patients often have chronic conditions like diabetes, heart disease, and behavioral health needs. They depend on the essential drugs included in the rebate pilot more than patients with any other conditions. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs health centers can afford to stock, directly contradicting the programs goal of increasing access to affordable medications. Since 90% of health center patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center. As a Covered Entity, we have several concerns, including but not limited to the following: Costs to covered entities: Current administrative costs under the upfront 340B discount: The total cost for year 2025 in 340B transactions was $1,157,557.00 Administrative costs under a potential 340B rebate pilot program: The total cost for year 2025 if we needed to purchase at WAC price would have been $3,139.959.75 upfront. Staffing impacts under a potential 340B rebate pilot program: Health Centers will need to hire or reassign existing staff to untangle the complexities related to varying data submission requirements, timelines, and systems. Depending on the volume of prescriptions a pharmacy fills, health centers will face an increased administrative burden in terms of monitoring rebate claims and payments. In an attempt to address manufacturers concerns about duplicate discounts, the Pilot Program would force health centers to divert even more scarce resources away from patient care. Health centers have already absorbed significant administrative and technology costs over the past four years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Systems and infrastructure for implementation of a potential 340B rebate model pilot program: The lack of standardization and varying requirements from each manufacturer will likely force health centers to use multiple systems to manage and report the same data, thereby increasing both costs and operational burdens. Health centers will need to invest in IT infrastructure upgrades and reassign staff to manage this new complexity, including reconciling payments and initiating dispute processes for denied rebates. The 340B Rebate Model Pilot Program is not only a financial threat to health centers but also a duplicative and unnecessary administrative burden. Payment timing and potential cash flow impacts for covered entities: While rebates are expected to arrive within 10 days, there may be delays in receiving the full rebate, such as denials, which could create financial strain on health centers. Health Centers appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must guess the rebate amount and could potentially undercharge or overcharge patients due to confusion. Rebate denials: If the rebate is denied, the health center takes a net loss on the transaction. The proposed 340B Rebate Model Pilot also presents challenges for compliance with 340B actual acquisition cost billing in fee-for-service Medicaid, which may lead to increased Medicaid costs. Both are because pharmacy software will not have access to the 340B price, which is necessary for accurate drug pricing. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients.
HRSA-2026-0001-0053(no commenter metadata)2026-03-09T04:00Z819 chars
It's VERY IMPORTANT to make sure everyone understands that we REQUIRE THIS PROGRAM TO SURVIVE. We operate on less than 500K annually, and we have no other viable revenue streams. The 340B program is MADE for organizations like ours. We would 100% close our doors if we did not have the 340B program. We are not cheating the system. The system cheats us daily and we are just trying to survive. A rebate model will destroy our nonprofit clinic. This program is made to help small nonprofits succeed. We can't do it with (very low) insurance reimbursements alone. It doesn't work that way. Do not change the 340B program. Small nonprofit community-based health care organizations like ours are getting swept in with big hospitals and health systems when pharma argues against 340B. DO NOT CHANGE TO A REBATE MODEL.
HRSA-2026-0001-0054George Regional Health System2026-03-09T04:00Z1,155 chars
A rebate program would be contrary to the language and spirit of the 340b drug program. 1. Rebate Models would provide wide-spread opportunity for abuse by manufacturers 2. Rebate Models would increase costs to Covered Entities in several forms *Covered Entities would essentially be financing the full costs of drugs from the manufactures which is contrary to the intended purpose of 340b plans *Covered Entities would lose interest income on the organizational moneys that are generally help in interest bearing accounts for the CE. *CEs would effectively be forced to provide new staff to facility the plan 4. Duplicate discounts concerns from manufactures are a Red Heron and a moot point. *Most CEs opt out of using 340b drugs for Medicaid recipients, thereby removing any possibility of a manufacturer paying a duplicate discount! 5. 340b statues were created to assist and entice CEs to continue caring for disproportion charity care patients. To now require CEs to pay full price to only hopefully receive the price discount later is simply against the language and spirit of the 340b statute.
HRSA-2026-0001-0055Voices For The Rare2026-03-06T05:00Z2,220 chars
Please see the attached formal statement from Voices For The Rare regarding our opposition to the 340B Rebate Model and its impact on rare disease patients in rural Arizona. Holly Martinez, CEO, Voices For The Rare POLICY MEMO: The 340B "Patient-First" Reform TO: Board of Directors, Voices For The Rare / Legislative Partners FROM: Holly Martinez, CEO DATE: March 6, 2026 SUBJECT: Protecting the 340B Safety Net from Systemic Mission Drift 1. The Problem: "Mission Drift" The 340B program was designed to help rural and low-income patients afford medication. However, large hospital systems have shifted the programs focus: Revenue over Access: Hospitals buy drugs at a 57% average discount but often charge patients and insurers the full list price. The "Profit Gap": There is currently no federal requirement for hospitals to pass these savings directly to the patient. The Minnesota Warning: In 2024, 340B revenue in Minnesota doubled to $1.34 billion, yet 80% of that went to just 23 large hospitals, while the actual safety-net clinics (FQHCs) received the smallest share. 2. The Arizona Context (2026) HB 2965 (2026): Arizona is currently considering legislation to protect the 340B supply chain. While the bill aims to prevent manufacturers from restricting drug delivery, the Voices For The Rare position should push for transparency on how that saved money is used. The "Rural Tax" Connection: For patients in Pinal County, 340B should be used to lower out-of-pocket costs and fund local clinicsnot just pad the bottom line of urban hospital hubs. 3. Strategic "Ammo" for Advocates We are calling on Arizona legislators to: Mandate Transparency: Require hospitals to report 340B revenue and demonstrate a direct, quantifiable benefit to the patients (e.g., lower co-pays). Prevent "Rebate Models": Oppose the federal shift toward "rebate" models (currently being debated by HRSA as of Feb 2026) which would force cash-strapped rural clinics to pay full price upfront and wait months for reimbursement. Protect the Rural Safety Net: Ensure that 340B savings stay in the communities they were generated in, supporting patients who face the highest travel and care burdens.
HRSA-2026-0001-0056AcadianaCares2026-03-09T04:00Z1,372 chars
Collection of Data Submitted by Covered Entities to Manufacturers: This requirement to pair data from covered entities directly to pharmaceutical companies basically forces covered entities to submit data that the pharmaceutical companies will then use to ascertain price margins and then change re-reimbursement rates accordingly. The larger specific burden on covered entities is that covered entities instead of purchasing drugs at the discounted wholesale cost will have to purchase the drugs at full price, then submit data and wait for reimbursement. This would tie up extra money for weeks at a time, possibly causing covered entities to have to borrow money to pay wholesalers while awaiting reimbursement. Covered entities are supposed to be able to utilize these funds to broaden their impact with their patients, but instead will have to pay interest, etc. for for the higher priced drugs. Covered Entities would have to also create new positions to set up the data exchange, and follow up on each transaction to ensure that the rebates are claimed. The cost to set up this data exchange would be great, and would require continuous monitoring to ensure that our reimbursements align with the medications purchased. Finally, the covered entity may have to obtain new software programs and integrate it with existing programs in order to meet this new burden.
HRSA-2026-0001-0057Delta Health2026-03-09T04:00Z12,633 chars
See attached file(s) DELTA HEALTH March 9th, 2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Delta Health appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. Small rural safety-net hospital, by definition, are particularly vulnerable to this change due to lacking financial and staffing resources. Shifting to a claim by claim submission module creates a manual process that is not support by current TPA technology. Our facility would need at least another full-time employee to manage a program such as this to be in compliance even with a very small 340B program. Unfortunately, 340B is already cumbersome and managing a detailed compliant audit ready program is already challenging and the proposed rebate structure does not relieve any program requirements or add efficiency but adds additional layers that are resource prohibitive. Pharmacy and medical claims submission in an alternative site (Beacon) exposes facilities and patients unnecessarily to breaches in HIPAA data. No patient information should be shared externally to justify a qualifying claim. The facility is responsible for determination of eligible claims and purchasing and is ensured by robust HRSA auditing to maintain program integrity. If there is a dispute between facility and manufacturer on claim eligibility with the rebate program, structure and process regarding dispute resolution is lacking as well as statue to enforce this process. 340B statue does not yet have in place resolution responsibility and repercussions for manufacturers leaving facilities exposed. Manufacturers cannot expect to timely resolve any disputes with the extreme number of claims nationwide that will be submitted. Multiple manufacturer program requirements makes compliance for each different manufacturer impossible. There should be 1 standardized rebate model as the ability to comply with 10 different programs is absolutely not possible. Adding this additional layer of complexity is unnecessary. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs If the goal is to prevent duplicate discounts and provide better access to data for manufacturers to verify upfront validity of claims, current statute does not support manufacturers making decisions about claim validity. Why not approach this issue from the state Medicaid rebate side rather than the facility, claim by claim. Rural hospitals are already at risk of closing nationwide and are relying on 340B savings to ensure delivery of basic services to patients to keep costs down. 340B program was not designed to pass on savings to patients but to support healthcare networks that take care of low income patients as defined by the CMS 340B designated facility type, program rules, and DSH percentage. Our 340B program keeps the doors open and the lights on by helping to meet budgetary shortfalls. The intent of our 340B program is to ensure access to healthcare for vulnerable patient populations in Western Colorado. State Medicaid disenrollment and decreased reimbursements from Medicare and Medicaid already puts extreme strain on at risk small rural healthcare facilities putting patients at risk of facilities closing. As of July 1st, 2025, Colorado Department of Health Care Policy and Financing (HCPF) decreased reimbursement for 340B facilities for outpatient services to 65% of the payment for non 340B healthcare systems. Significant time delays between upfront 340b ceiling pricing and already low reimbursement would be catastrophic for small rural hospitals. 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that currently ensures predictable, verifiable pricing at the point of sale. If the manufacturer goal is to prevent duplicate discounts, why not add federal legislation requiring all states to carve-out all Medicaid claims to avoid duplicate discounts. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. The manufacturer rebate pilot program did not thoroughly explore impacts to all parties nor does it consider the vulnerability of rural health care facilities. The rebate model is not a neutral comparative process in lieu of current processes. For these reasons, Delta Health urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Cari Dillon, PharmD Director of Pharmacy Delta Health DELTA HEALTH March 9th, 2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Delta Health appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. Small rural safety-net hospital, by definition, are particularly vulnerable to this change due to lacking financial and staffing resources. Shifting to a claim by claim submission module creates a manual process that is not support by current TPA technology. Our facility would need at least another full-time employee to manage a program such as this to be in compliance even with a very small 340B program. Unfortunately, 340B is already cumbersome and managing a detailed compliant audit ready program is already challenging and the proposed rebate structure does not relieve any program requirements or add efficiency but adds additional layers that are resource prohibitive. Pharmacy and medical claims submission in an alternative site (Beacon) exposes facilities and patients unnecessarily to breaches in HIPAA data. No patient information should be shared externally to justify a qualifying claim. The facility is responsible for determination of eligible claims and purchasing and is ensured by robust HRSA auditing to maintain program integrity. If there is a dispute between facility and manufacturer on claim eligibility with the rebate program, structure and process regarding dispute resolution is lacking as well as statue to enforce this process. 340B statue does not yet have in place resolution responsibility and repercussions for manufacturers leaving facilities exposed. Manufacturers cannot expect to timely resolve any disputes with the extreme number of claims nationwide that will be submitted. Multiple manufacturer program requirements makes compliance for each different manufacturer impossible. There should be 1 standardized rebate model as the ability to comply with 10 different programs is absolutely not possible. Adding this additional layer of complexity is unnecessary. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs If the goal is to prevent duplicate discounts and provide better access to data for manufacturers to verify upfront validity of claims, current statute does not support manufacturers making decisions about claim validity. Why not approach this issue from the state Medicaid rebate side rather than the facility, claim by claim. Rural hospitals are already at risk of closing nationwide and are relying on 340B savings to ensure delivery of basic services to patients to keep costs down. 340B program was not designed to pass on savings to patients but to support healthcare networks that take care of low income patients as defined by the CMS 340B designated facility type, program rules, and DSH percentage. Our 340B program keeps the doors open and the lights on by helping to meet budgetary shortfalls. The intent of our 340B program is to ensure access to healthcare for vulnerable patient populations in Western Colorado. State Medicaid disenrollment and decreased reimbursements from Medicare and Medicaid already puts extreme strain on at risk small rural healthcare facilities putting patients at risk of facilities closing. As of July 1st, 2025, Colorado Department of Health Care Policy and Financing (HCPF) decreased reimbursement for 340B facilities for outpatient services to 65% of the payment for non 340B healthcare systems. Significant time delays between upfront 340b ceiling pricing and already low reimbursement would be catastrophic for small rural hospitals. 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that currently ensures predictable, verifiable pricing at the point of sale. If the manufacturer goal is to prevent duplicate discounts, why not add federal legislation requiring all states to carve-out all Medicaid claims to avoid duplicate discounts. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. The manufacturer rebate pilot program did not thoroughly explore impacts to all parties nor does it consider the vulnerability of rural health care facilities. The rebate model is not a neutral comparative process in lieu of current processes. For these reasons, Delta Health urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Cari Dillon, PharmD Director of Pharmacy Delta Health
HRSA-2026-0001-0058Bitterroot Health Daly Hospital2026-03-09T04:00Z15,730 chars
See attached file(s) 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 1 of 7 3/9/2026 Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Bitterroot Health Daly Hospital, a rural mixed-use covered entity serving communities throughout the Bitterroot Valley, I appreciate the opportunity to comment on the proposed 340B Model Rebate Pilot Program. After a detailed analysis of the operational, financial, and compliance implications, we must respectfully oppose the proposed rebate-based model. While the pilot initially applies to only 10 drugs, expanding to 25 drugs in the second year and likely more thereafter, even this limited scope imposes significant structural burdens on our 340B program. The foundational infrastructure required to support a rebate model must be built upfront. As a result, the operational and financial burden on covered entities is not proportional to the number of drugs in the pilot; we incur nearly the full administrative and IT burden from day one, even for a small initial drug list. 1. Compliance Assessment The proposed rebate model introduces substantial new compliance risks for Bitterroot Health Daly Hospital. The implementation of the 340B Rebate Model Pilot Program will result in the loss of real-time pricing as a control. Today, we rely on real-time 340B pricing and accumulators to prevent diversion and duplicate discounts. The rebate model replaces this structure with retrospective, post-adjudication rebate reconciliation, which weakens our ability to ensure each dispensation is correctly priced at the time of service. The 340B Rebate Model Pilot Program also creates Parallel pricing pathways and documentation burden. Even with only 10 drugs, we must maintain two separate compliance frameworks: one for traditional point-of-sale discounts and one for rebate- based pricing. This includes separate documentation, audit trails, and reconciliation logic for rebate-eligible versus non-rebate drugs. 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 2 of 7 The 340B Rebate Model Pilot Program complicates our multi-TPA fragmentation. Our 340B program operates across four TPA environments: SunRx, AuthorityRx, Wellpartner, and Walgreens internal TPA. These systems have different logic, data structures, and matching rules. Implementing rebate reconciliation across all of them introduces new risk that claims may be misclassified, unreconciled, or documented inconsistently, especially over time. Scaling risk with expansion from 10 to 25+ drugs. As the pilot drug list grows, the number of exceptions, mismatches, and reconciliation failures will grow disproportionately, further elevating HRSA audit exposure. Taken together, the rebate model exposes Bitterroot Health Daly Hospital to significant new compliance risk without providing commensurate safeguards or standardized support to manage this complexity. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bitterroot Health Daly Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 2. Operational Implications During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Implementing the 340B rebate model requires Bitterroot Health Daly Hospital to operate two incompatible 340B models in paralleldiscount and rebateeven in the earliest phase with only 10 drugs. 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 3 of 7 Our mixed-use environment includes 136,000+ annual administrations across infusion, clinics, and outpatient hospital services. Under the rebate model, eligibility for pilot drugs must be tracked and reconciled retrospectively, which strains Wellpartner accumulator logic. Exception volumes increase as dispenses and rebates are resolved on different timelines, and each pilot drug dispensation adds a layer of post-hoc validation and documentation not required today. Our contract pharmacy networkmanaged through SunRx and AuthorityRx, along with a Walgreens contract pharmacymust also maintain dual workflows. We process over 25,000 claims annually. Claims for pilot drugs must be flagged and tracked separately for rebate submission. Walgreens internal TPA structure is proprietary and may not support standardized rebate files, adding further reconciliation difficulty. Each TPA must handle two different financial and compliance pathways, increasing the potential for error. To participate in the pilot, Bitterroot Health Daly Hospital must build new interfaces for rebate eligibility files, rebate claim submissions, and manufacturer response files; adjust EMR and billing systems for new indicators and reconciliation keys; and maintain expanded data retention and audit file structures for both discount and rebate transactions. These operational burdens exist even when only 10 drugs are included and grow as the list expands to 25 or more. 3. Financial Impact Even for a 10-drug pilot, Bitterroot Health Daly Hospital incurs nearly all of the structural costs required by a rebate framework. (See Appendix A) Based on our staffing costs and volumes, we estimate a one-time startup investment (interfaces, policy updates, training, accumulator updates) of approximately $95,000 $185,000. Ongoing annual administrative and IT costs for the initial 10-drug scope are estimated at $80,000$140,000 per year. As the pilot expands to 25 drugs and beyond, ongoing annual administrative costs are expected to escalate toward approximately $120,000$185,000+ per year at 25 drugs and $150,000$210,000+ as more drugs are added. These costs directly erode the net 340B benefit available to support patient care. Bitterroot Health Daly Hospital currently generates approximately $100,000 in 340B benefit per month, which is reinvested into patient care programs on a real-time basis. Under a rebate model, even if only a portion of this benefit is tied to pilot drugs, rebate payments may be delayed for months, introducing material cash-flow instability. As the 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 4 of 7 pilot expands, the proportion of revenue subject to delay increases, undermining our ability to use savings predictably to support core clinical services. 4. Cash-Card Program Impact A particularly serious concern for Bitterroot Health Daly Hospital is the impact of the rebate model on our SunRx cash-card program. Our SunRx cash-card program provides medications to patients at the 340B acquisition cost plus a small dispensing fee and generates no revenue for the hospital; it exists solely to improve medication affordability for patients who might otherwise forgo needed treatment. Under the current 340B discount model, these prescriptions are purchased at the 340B price and passed through to the patient at that same price, so there is no financial exposure for the hospital. Under the proposed rebate model, however, all pilot-drug cash-card prescriptions must be purchased at WAC rather than the 340B price. Based on our current utilization of the initial 10 pilot drugs, we estimate an additional drug acquisition cost of approximately $523,333 per month solely for SunRx cash-card prescriptions, or about $6.28 million per year in incremental WAC spend for a program designed to operate at zero margin. Rebate recovery is not guaranteed for these transactions. Manufacturer rebate matching typically depends on commercial or Medicaid adjudication fields that cash- card claims do not contain. As a result, a portion of these claims will likely be ineligible for rebate payment, even when dispensed appropriately. If we assume a conservative rebate denial or mismatch rate of 1830% for cash-card claims, our projected monthly unrecoverable loss is approximately $94,200$157,000, or roughly $1.13$1.88 million annually. As the pilot expands from 10 to 25 drugs, this exposure grows proportionally and could exceed $1.8 million per year in unrecoverable loss, even if the program is administered flawlessly on our side. This means the rebate model converts a zero-margin, patient-benefit program into a high-risk financial loss center for our rural hospital and directly threatens our ability to continue offering this critical access program. 5. Access to Care Implications for Our Rural Patient Population The 340B program enables Bitterroot Health Daly Hospital to sustain services that would otherwise be financially unsustainable in a rural market, including oncology infusion services; outpatient specialty clinics such as cardiology, orthopedics, urology, and behavioral health; medication access and assistance programs; chronic disease management and care coordination; and emergency and urgent care medication 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 5 of 7 availability. The combination of new structural costs (startup and ongoing), large WAC exposure in our SunRx cash-card program, potential permanent rebate losses, and significant cash- flow delays directly threatens the viability of these service lines. For a rural hospital with limited resources, the proposed rebate model undermines both the intent of the 340B statute and our ability to maintain access to essential care for vulnerable patients. 6. Recommendation For Bitterroot Health Daly Hospital, the rebate model increases HRSA compliance risk, doubles operational complexity by forcing parallel discount and rebate workflows, adds substantial structural administrative and IT costs, exposes our SunRx cash-card program to millions of dollars in WAC spend and unrecoverable losses, and threatens access to essential services for our rural community. For these reasons, Bitterroot Health Daly Hospital respectfully opposes the proposed 340B Model Rebate Pilot Program and urges HRSA to reconsider implementing a rebate structure for rural mixed-use hospitals, especially those operating cash-card and other zero-margin patient assistance programs. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bitterroot Health Daly Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, John Bishop Chief Executive Officer Bitterroot Health Daly Hospital 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 6 of 7 APPENDIX A Estimated Administrative, Operational, and Drug Cost Impacts All estimates below are specific to Bitterroot Health Daly Hospital, based on our actual FTE costs, mixed-use volumes, contract pharmacy configuration, Medicaid carve-out status, and SunRx cash-card utilization. A. One-Time Startup Administrative and IT Costs (Largely independent of initial drug count; required to stand up the rebate infrastructure.) Policy & procedure overhaul: $10,000$20,000 HRSA audit framework redesign: $7,000$15,000 IT interface builds (SunRx, AuthorityRx, Wellpartner, Walgreens): $40,000$90,000 EMR/billing system modifications: $10,000$20,000 Mixed-use accumulator enhancements: $10,000$25,000 Staff training & temporary coverage: $18,000$35,000 Total one-time startup administrative/IT cost: $95,000$185,000. B. Ongoing Annual Administrative & IT Costs Initial 10-drug pilot: $80,000$140,000 per year Expanded 25-drug list: $120,000$185,000+ per year Beyond 25 drugs: $150,000$210,000+ per year. C. SunRx Cash-Card Drug Acquisition Cost Exposure (Pilot Drugs) For the initial 10-drug pilot, incremental WAC acquisition cost for SunRx cash-card prescriptions is approximately $523,333 per month, or $6.28 million per year. Assuming 1830% of cash-card claims do not successfully match manufacturer rebate criteria, monthly unrecoverable loss is estimated at approximately $94,200$157,000, or $1.13$1.88 million per year. As the pilot expands toward 25 drugs, these values are expected to scale upward proportionally. D. Cash-Flow Exposure from Rebate Delays For the SunRx cash-card program pilot drugs alone, at $523,333 per month in WAC spend, delayed rebates create approximately $1.57 million tied up for a 3-month delay, $3.14 million for a 6-month delay, and $4.71 million for a 9-month delay. This is in 1200 Westwood Drive, Hamilton, MT 59840 (406) 363-2211 bitterroothealth.org Page 7 of 7 addition to cash-flow delays on any other 340B benefit associated with rebate-model drugs. E. Contract Pharmacy Revenue Erosion Although smaller than the cash-card impact, the rebate model is also expected to erode contract pharmacy net benefit due to timing mismatches and reconciliation uncertainty across SunRx, AuthorityRx, and Walgreens. Initial 10-drug scope: approximately $8,000$20,000 annual contract pharmacy revenue loss. Expanded 25-drug scope: approximately $20,000$55,000+ annual loss. Appendix Summary for Bitterroot Health Daly Hospital One-time startup admin/IT: $95,000$185,000. Ongoing annual admin/IT: $80,000$140,000 (initial 10 drugs), increasing to $120,000$185,000+ at 25 drugs and $150,000$210,000+ as scope expands. SunRx cash-card WAC exposure: $6.28 million per year, scaling upward with scope. Estimated unrecoverable cash-card loss: $1.13$1.88 million per year, higher as scope expands. Cash-flow tie-up on cash-card WAC (39 months): approximately $1.57$4.71 million, higher as scope expands. Contract pharmacy revenue erosion: $8,000$20,000 annually at initial scope, increasing to $20,000$55,000+ annually with expansion.
HRSA-2026-0001-0059John Maddock · Henrico, VA, United States2026-03-10T04:00Z2,663 chars
I am currently a member of the board of a federally qualified health center with a special population designation as a Healthcare for the Homeless grantee. As you are aware, the current upfront discount structure under 340B allows community health centers to conserve resources and immediately reinvest savings directly into patient care. A rebate model will fundamentally shift financial risk onto community health centers by having community health centers front the cost of medications while waiting on rebates. This will at a minimum delay and perhaps prevent community health centers from immediately employing these up-front costs to provide critical services such as outreach, case management, behavioral health, substance use treatment, transportation, and sliding-fee care. Requiring community health centers to purchase medications at wholesale acquisition cost and then wait for a rebated will result in community health centers carrying substantial upfront medication costs, possibly having to secure a line of credit or loan to finance drug inventory, absorbing interest expenses and having to manage cash flow uncertainty. For community health centers who serve the homeless, the administrative burden and risks caused by the foregoing is unsustainable and will result in reduced or eliminates services. Healthcare for the Homeless programs care for patients who are often late to care, have high acuity, and face barriers to medication adherence. Any disruption in medication access, whether due to inventory constraints, cash flow delays, or administrative errors, will directly impact patient health. Delays in access to antipsychotics, insulin, HIV medications, or substance use treatment medications can result in hospitalization, emergency department utilization, or loss of housing stability. None of which benefits the community at large. Unlike a rebate program, the current upfront discount model provides predictability and immediate purchasing power for community health centers, as was intended. A rebate system introduces uncertainty into drug availability and threatens continuity of care. I respectfully urge HRSA to carefully consider the disproportionate impact a rebate framework would have on community health centers and the medically vulnerable populations community health centers serve. Any changes to the 340B structure must preserve upfront discounts, protect cash flow stability, and ensure that safety-net providers are not required to assume risks they are not financially equipped to bear. In conclusion, please exclude community health centers from the 340B rebate program. Thank you for your consideration.
HRSA-2026-0001-0060April Castuciano · St. Louis, MO, United States2026-03-10T04:00Z393 chars
As a staff member at Family Care Health Centers in St. Louis, MO I am concerned that requiring health centers to front the full cost of medications shifts financial risk onto safety-net providers. The over 17,000 patients we serve depend on us for vital services. Community health centers are not designed to absorb large financial shocks. When risk increases, our communities feel the impact.
HRSA-2026-0001-0061Julie Gwin · Reno, NV, United States2026-03-10T04:00Z1,337 chars
Re: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW I am writing to strongly oppose the 340B Rebate Model Pilot Program. I am the COO of an FQHC, and I am also a nurse. This program will seriously damage the financial stability of my FQHC and will likely put many FQHCs simply out of business, leaving vulnerable Americans without health care. This "rebate" will actually force us to pay up front for millions of dollars in medications, cash that FQHCs do not have on hand. We will have to cut programs and staff to try to find the money to fund the medications our patients need, and simply hope that the rebate actually returns the money to us after the fact. In addition, the new data claims submission requirements by Eli Lilly and Norvo will cost us tens of thousands of dollars per year in unnecessary overhead. We will have to hire multiple new staff just to file reports to the pharma companies--it is purely a waste of time and money and will increase our overhead costs markedly, taking away from the time and resources we have for our patients. These programs are nothing more than a cash grab by wealthy, for-profit pharmaceutical companies that already make billions of dollars, by hurting small nonprofit healthcare centers that care for the poorest, most vulnerable people.
HRSA-2026-0001-0062Anonymous Anonymous2026-03-10T04:00Z22,652 chars
Section 340B of the Public Health Service Act (42 U.S.C. 256b) was enacted to ensure that safety-net providers are able to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. (H.R. Rep. No. 102-384(II), at 12 (1992)). For more than thirty years, the program has operated through an upfront discount structure, under which covered entities purchase covered outpatient drugs at the statutory 340B ceiling price through established pharmaceutical distribution channels. The Request for Information (RFI) seeks stakeholder input regarding the potential implementation of a rebate-based model, under which covered entities would initially purchase drugs at a higher price and later receive reimbursement from manufacturers reflecting the difference between the acquisition price and the 340B ceiling price. While 42 U.S.C. 256b(a)(1) provides that the Secretary may effectuate the statutory price limitation through a rebate or discount, the longstanding upfront discount model has been integral to the effective operation of the program and to the ability of safety-net providers to deploy program savings toward patient care. Based on operational experience across the 340B supply chain, a rebate model would introduce substantial financial, operational, and administrative risks that could undermine the statutory purpose of the program. Instead of implementing a rebate model, HRSA should preserve the upfront discount framework while pursuing targeted program integrity initiatives that strengthen transparency, prevent duplicate discounts, and support coordination with other federal drug pricing programs. See attachment for more details. March 10, 2026 Health Resources and Services Administration (HRSA) Oice of Pharmacy Aairs 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, The following comments are submitted anonymously by an individual with more than twenty years of experience working within the healthcare system in the State of Florida, including extensive involvement in pharmacy operations, reimbursement administration, and compliance oversight related to the 340B Drug Pricing Program. Throughout this time, the commenter has worked closely with hospitals, outpatient clinics, and other safety-net providers that rely on the 340B program to sustain care for medically underserved populations. In these roles, the commenter has participated directly in the operational management and compliance oversight of 340B program activities, including pharmacy purchasing, contract pharmacy administration, claims reconciliation, program integrity monitoring, and coordination with wholesalers, pharmacies, manufacturers, and third-party administrators. These responsibilities have included implementation of internal controls designed to prevent diversion and duplicate discounts as required under 42 U.S.C. 256b(a)(5), as well as preparation for and participation in compliance reviews and audits. Through this experience, the commenter has observed firsthand how the operational structure of the 340B program enables safety-net providers to expand access to essential medications and clinical services for vulnerable patients. For many healthcare organizations, 340B program savings are reinvested into services such as medication assistance programs, oncology treatment support, chronic disease management initiatives, behavioral health programs, and community outreach services that directly benefit patients who may otherwise face significant barriers to care. Over the past three decades, covered entities have built substantial operational infrastructure around the programs longstanding upfront discount purchasing framework, including pharmacy systems, contract pharmacy arrangements, compliance monitoring processes, and financial planning structures. These systems represent significant reliance interests developed under the current program structure. As a result, structural changes to the way 340B pricing are eectuated have the potential to introduce operational disruption that could ultimately aect the ability of safety-net providers to sustain patient care programs supported by 340B savings. The comments that follow are oered to provide practical operational insight regarding how the proposed rebate model may aect stakeholders across the pharmaceutical supply chain, including covered entities, pharmacies, manufacturers, wholesalers, and pharmacy benefit managers. Most importantly, these comments are intended to highlight how changes to the operational structure of the 340B program could influence the ability of safety-net providers to maintain medication access and clinical services for underserved patient populations. The commenter recognizes and supports HRSAs responsibility to ensure the integrity of the 340B program and appreciates the agencys eorts to solicit stakeholder input through this Request for Information. Strengthening transparency, improving coordination across federal drug pricing programs, and preventing duplicate discounts are important goals. However, policy changes should be carefully evaluated to ensure they do not unintentionally introduce financial or operational barriers that could undermine the programs statutory purpose of supporting care for vulnerable patients. These comments are provided to assist HRSA in evaluating potential policy approaches that both strengthen program integrity and preserve the ability of the 340B program to continue serving as a critical resource for safety-net healthcare providers and the patients they serve. Thank you, Anonymous I. Introduction Section 340B of the Public Health Service (PHS) Act was enacted to enable safety-net providers to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. (H.R. Rep. No. 102-384(II), at 12 (1992)). Under 42 U.S.C. 256b(a)(1), manufacturers participating in the Medicaid Drug Rebate Program must enter into a pharmaceutical pricing agreement with the Secretary of Health and Human Services agreeing that the price charged to covered entities will not exceed the statutory 340B ceiling price. For more than three decades, this statutory framework has operated as an upfront discount model, whereby covered entities purchase covered outpatient drugs at the 340B ceiling price through established wholesaler distribution channels. The Request for Information proposes consideration of a rebate-based model, under which covered entities would initially purchase drugs at higher prices and subsequently seek reimbursement from manufacturers for the dierence between the acquisition price and the 340B ceiling price. While section 340B(a)(1) acknowledges that the Secretary may implement discounts through either rebate or discount, any change to the programs longstanding operational structure must remain consistent with the statutory purpose of the program and must avoid creating barriers to patient access or operational burdens on safety-net providers. After evaluating the operational, financial, and program integrity considerations outlined in this RFI, we recommend that HRSA not implement a rebate-based model and instead pursue a standardized validation and transparency framework that preserves the upfront discount structure while strengthening safeguards against duplicate discounts and diversion. II. Alternative Policy Framework A rebate model is not necessary to achieve the program integrity goals cited in the RFI. Instead, HRSA could implement a Validated Upfront Discount Model with the following components: 1. Retention of the existing upfront 340B ceiling price purchase structure. 2. Standardized post-dispense data submission for selected drugs. 3. A neutral clearinghouse or administrator to validate required data elements. 4. Standardized duplicate discount controls. 5. Uniform denial rules and dispute resolution procedures. This approach maintains alignment with 42 U.S.C. 256b(a)(1) while enabling HRSA to collect empirical data on duplicate discounts, diversion, and maximum fair price (MFP) non-duplication under the Medicare Drug Price Negotiation Program (42 U.S.C. 1320f- 2(d)). III. Response to HRSA RFI Comment Areas 1. Costs to Covered Entities Current Administrative Costs Covered entities currently incur substantial administrative costs to maintain compliance with the 340B program, including: split-billing software and third-party administrator (TPA) services contract pharmacy oversight and reconciliation compliance monitoring and internal audit activities Medicaid duplicate discount tracking HRSA audit preparation and documentation These activities are required to comply with statutory and program requirements including: 42 U.S.C. 256b(a)(5)(B) prohibition on duplicate discounts 42 U.S.C. 256b(a)(5)(C) prohibition on diversion HRSA 340B Program Integrity Requirements Covered entities already maintain robust systems to ensure compliance with these requirements. Large covered entities may process hundreds of thousands to several million 340B eligible prescription transactions annually across in-house and contract pharmacies. Even a limited rebate pilot aecting a subset of drugs could generate tens of thousands of rebate submission events per year, requiring reconciliation, adjudication tracking, and audit documentation. Incremental Costs of a Rebate Model Implementation of a rebate model would significantly increase administrative and operational costs due to the need to: submit claims-level rebate requests reconcile manufacturer responses track denied rebate claims manage appeals processes maintain additional IT infrastructure for data transmission conduct expanded audit and compliance activities In addition, covered entities would likely need to hire additional sta to manage rebate submission and reconciliation workflows. Sta will vary by 340B participants due to volume of prescriptions being filled and audited. Most places already have a process for 100% audit of all claims whereas others do top 50 each month per pharmacy. Therefore, full-time employees can vary from 1-10 of additional support needed. Covered entities have structured pharmacy operations, patient assistance programs, and clinical service expansion strategies around the longstanding upfront discount framework of the 340B Program. Covered entities have developed compliance infrastructure, contractual arrangements with pharmacies, and supply chain purchasing practices based on this structure. Abruptly converting the program into a rebate-based framework would disrupt these reliance interests and could create significant operational instability for safety-net providers. These incremental costs would be ongoing and material, particularly for hospitals, FQHCs, and other safety-net providers operating on narrow margins. Many covered entity types would have to close its doors at a faster rate than todays, which is already an alarming problem that goes against caring for the patient. They wont be able to with the proposed rebate!!! Systems and Infrastructure Impacts A rebate model would require new or significantly modified systems including: claims submission platforms manufacturer-specific data portals enhanced TPA integrations additional data storage and compliance infrastructure Because manufacturers may implement dierent rebate processes, covered entities could face fragmented and inconsistent operational requirements across manufacturers that is unmeasurable at the moment and impact the staing mentioned above. Based on typical health system pharmacy infrastructure costs, development of rebate submission interfaces, manufacturer-specific reporting, and reconciliation workflows could require initial implementation costs ranging from several hundred thousand to multiple million dollars depending on organizational size and pharmacy network complexity. A standardized validation framework administered through a neutral data clearinghouse would reduce these burdens. Contract pharmacies play a significant role in 340B program operations by supporting dispensing, claims adjudication, and replenishment processes on behalf of covered entities. A rebate model would introduce new operational requirements for contract pharmacies, including claims identification, rebate submission coordination, and dispute tracking. Because contract pharmacies operate across multiple covered entities and manufacturers, inconsistent rebate submission requirements could significantly increase administrative complexity and compliance risk across pharmacy networks. Alternatively this could create another layer where contract pharmacies could cease operations or limit them. Again, this is not new in todays reality where pharmacies are closing. 2. Payment Timing and Cash Flow Impacts The current 340B program structure allows covered entities to purchase drugs at the discounted ceiling price through wholesalers. Under a rebate model, covered entities would instead purchase drugs at higher acquisition costs and wait for reimbursement. This change would create significant cash flow risks because: wholesaler payment terms typically require payment within 30 days rebate submissions may be rejected or delayed disputes or denials may extend repayment timelines Even if manufacturers were required to adjudicate rebates within 10 calendar days, operational realities, including data validation and dispute resolution, would likely extend payment timelines. Safety-net providers rely on predictable drug acquisition costs to sustain clinical services. Shifting financing obligations to covered entities could reduce available resources for patient care and undermine the statutory purpose of the program. 3. Rebate Denials If HRSA were to test any rebate or validation model, strict guardrails must govern rebate denials. Denials should be limited to clearly documented circumstances, such as: duplicate rebate requests for the same claim verified duplicate discounts involving Medicaid rebates under 42 U.S.C. 256b(a)(5)(B) claims outside the scope of the pilot program Manufacturers should be required to provide: standardized denial codes supporting documentation explanation of the specific data element triggering denial HRSA should also require a uniform appeals process with defined timelines and dispute resolution standards. Without these safeguards, rebate denials could introduce unnecessary financial uncertainty for covered entities. 4. Data Collection by Covered Entities Covered entities currently collect substantial data necessary to support program integrity, including: dispensing records patient encounter documentation purchase records contract pharmacy reconciliation data Medicaid carve-in/carve-out indicators These systems already support compliance with diversion and duplicate discount requirements under 42 U.S.C. 256b(a)(5). Rather than requiring additional ad hoc data submissions to individual manufacturers, HRSA should establish a national minimum data set for program integrity purposes. Recommended core data elements include: covered entity identifier dispensing date or administration date National Drug Code (NDC) quantity dispensed prescription or claim identifier payer type Medicaid indicator where applicable For clinician-administered drugs, applicable data elements may include: HCPCS/J-code revenue code units administered site of service HRSA should prohibit manufacturers from requesting additional patient-level data beyond this standardized minimum set. 5. Duplicate Discounts and MDPNP Non-Duplication Importantly, the MDPNP nonduplication provision does not require restructuring the 340B acquisition model. Instead, coordination mechanisms that identify when a drug is subject to a negotiated Maximum Fair Price can be implemented through claims-level identifiers and standardized reporting without requiring covered entities to finance drug acquisition costs through a rebate system. Under 42 U.S.C. 1320f-2(d), manufacturers participating in the Negotiation Program are not required to provide the Maximum Fair Price (MFP) where the 340B ceiling price is lower. However, the potential for duplicate discounts can be addressed through improved data standardization rather than converting the program to a rebate model. A better approach would include: standardized claim-level identifiers improved coordination with State Medicaid Agencies standardized claim flags where feasible post-adjudication validation through a neutral administrator This framework would allow manufacturers to identify potential duplicate discounts without imposing rebate workflows across the entire program. 6. Required Reporting To ensure transparency and accountability, HRSA should require participating manufacturers to submit standardized reports during any pilot program. Recommended reporting metrics include: number of rebate claims submitted number of claims approved and denied value of approved rebates reasons for denial average adjudication time number of disputes and appeals HRSA should publicly publish aggregated results at regular intervals to evaluate the pilot programs eectiveness and inform future policy decisions. 7. 340B Program Integrity Program integrity can be strengthened without replacing the existing discount model. Key improvements HRSA should consider include: national data standardization enhanced audit transparency consistent duplicate discount coordination with State Medicaid programs neutral data exchange infrastructure uniform manufacturer reporting requirements These steps would strengthen compliance while minimizing administrative burden. One of the primary operational challenges in the current 340B environment is the lack of standardized data submission requirements across manufacturers. If HRSA seeks to improve program transparency and integrity, the most eective approach would be the development of uniform national standards for claim identification, data reporting, and duplicate discount coordination rather than introducing a rebate-based acquisition model. IV. Patient Access Considerations The statutory purpose of the 340B program is to expand access to care for underserved populations. A rebate model risks undermining this goal by: increasing operational costs for safety-net providers creating cash-flow uncertainty introducing administrative delays in accessing program savings Any structural change that reduces the ability of covered entities to deploy program savings toward patient services would be inconsistent with congressional intent. V. Recommendation HRSA should preserve the longstanding upfront discount structure of the 340B program and instead pursue a 340B Program Integrity Demonstration Project focused on: standardized data reporting duplicate discount prevention MFP non-duplication coordination transparent pilot reporting This approach would allow HRSA to gather empirical data while minimizing disruption to safety-net providers and preserving the statutory purpose of the program. VI. Conclusion The 340B program has operated successfully for more than thirty years as an upfront discount model that supports the nations safety-net providers. While HRSAs eorts to improve program transparency and integrity are important, converting the program to a rebate-based structure would impose significant financial and operational burdens on covered entities without clear evidence that such a model would improve compliance outcomes. HRSA should instead strengthen the existing framework through standardized reporting, improved data exchange, and targeted program integrity initiatives. Current 340B Upfront Discount model- How the program works today Product flow Financial Flow Key notes: Manufacturer funds the discount through a wholesaler chargeback Covered Entity purchases drug at the 340B price upfront (not including other financial impacts on non-340B eligible claims covered entity faces (either at full cost WAC or negotiated contracts GPO. No financing burden on safety-net providers because the 340B discount is applied at the time of purchase Manufacturer Sells drug Wholesaler distributes drug Covered Entity Pharmacy (Inhouse or Contract) dispenses medication Patient Patient/Insurer/PBM Reimbursement Pharmacy (Inhouse or contract) pharmacy fee/revenue share Covered Entity (hospital/FQHC/Clinic etc) pays 340B discount price Wholesaler chargeback request Manufacturer reimburses wholesaler Proposed HRSA Rebate Product flow Financial flow: Covered entity pays FULL price Manufacturer later issues rebate Risks introduces: cash-flow strain as the covered entity must finance drug acquisition unit rebate is approved and paid administrative complexity rebate denials and disputes payment delays operational fragmentation Manufacturer standard commercial price/ sells drug Wholesaler full price purchase/ distributes drug Covered Entity rebate request submission/ dispenses medication Manufacturer rebate payment/ Patient gets drug Patient/Insurer/PBM Reimbursement Pharmacy (Inhouse or contract) pharmacy fee Covered Entity (hospital/FQHC/Clinic etc) pays FULL acquisition cost (WAC) Wholesaler pays manufacturer Manufacturer Recommended Alternative Validated Upfront Discount Model Financial Flow Post-Dispense Validation Layer Benefits preserves upfront 340B discount improves program transparency and integrity strengthens duplicate discount prevention reduces some administrative burden in comparison to proposed model maintains patient access Manufacturer 340B ceiling price Wholesaler discounted purchase Covered Entity Oharmacy dispense/administer drug Patient Patient/Insurer/PBM Pharmacy (Inhouse or contract) Covered Entity (hospital/FQHC/Clinic etc) pays 340B discount upfront Wholesaler Manufacturer Covered Entity / Pharmacy submits standardized claim file Neutral Data Clearinghouse validation for: duplicate discounts diversion safeguards MFP nonduplication Manufacturer receives validation result
HRSA-2026-0001-0063Salinas Valley Health2026-03-10T04:00Z17,673 chars
See attached file(s) Re: HRSA-2026-0001 Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) (as extended to April 20, 2026) 1. Costs to Covered Entities 1(a) Current administrative costs under up-front 340B discounts. 340B compliance is already resource-intensive under the up-front model. Covered entities must maintain patient eligibility logic, site-of-service alignment, prescriber linkage, Medicaid duplicate discount controls, contract pharmacy oversight, audit response readiness, and ongoing reconciliation across multiple data sources and third parties. Key cost drivers today include: Staffing/FTE time devoted to eligibility rules, accumulators, audit preparation, and policy monitoring. IT/informatics labor to build feeds, map locations, maintain prescriber lists, and reconcile to wholesaler/TPA data. Third-party vendor costs (TPAs, contract pharmacies, analytics tools, legal review). Compliance activities (internal audits, corrective action plans, documentation, training). 1(b) Incremental administrative and operational costs under a rebate model. A rebate model would add substantial new work that does not exist today, including: claim/data submission to manufacturers (or their agents), rebate request tracking, denial management, dispute escalation, and reconciliation of rebate payments back to purchases/dispenses/claimsoften at the NDC level and across multiple systems (EHR, pharmacy system, wholesaler, TPA, payers). Incremental costs would include both: One-time start-up: systems build, interfaces, new workflows, legal/security review, staff training, policy/controls redesign; and Ongoing: monthly/quarterly submissions, monitoring, appeals, compliance reporting, and audit support. A rebate models core administrative burden falls on covered entities, requiring them to prove entitlement to the ceiling price after the fact, rather than receiving it at the time of purchase. 1(c) Staffing impacts. A rebate model would likely require additional FTE capacity (or force reallocation away from patient- facing work) to manage: Rebate submission operations and exception queues, Denial adjudication and dispute management, Continuous data quality monitoring and reconciliation. 1(d) Systems and infrastructure. A rebate model would require new or materially expanded infrastructure, including: Standardized claims/purchase/replenishment crosswalks, Automated matching logic and exception handling, Secure data transfer, retention, and audit trails, Reporting to demonstrate compliance and manage disputes. 1(e) Other costs/impacts. Additional burdens likely include legal review of manufacturer/third-party agreements, cybersecurity risk management, and potential constraints imposed by third-party terms of use that are incompatible with covered entities operational realities and public accountability. A rebate model also risks downstream operational friction that could reduce medication access (delays, denials, cash constraints). 2. Payment Timing and Cash-Flow Impacts A rebate model shifts covered entities from receiving a discount at purchase to fronting higher acquisition costs and waiting for reimbursement. This creates material harm to cash flow, days cash on hand, and borrowing needsespecially for safety-net hospitals. Even if HRSA required manufacturers to pay/deny within 10 calendar days of submission, the model still imposes a working-capital burden because: Covered entities must still purchase at a higher price first, Complete and correct submissions will be disputed, Denials and resubmissions extend timelines, and Payment timing mismatches will be common across claims adjudication, reversals, and rebills. Recommendation: If HRSA pursues a pilot, require: Mandatory interest/penalties for late payments, Clear definitions of complete submission, A uniform, centralized HRSA-administered portal for submission and tracking (to avoid fragmented manufacturer processes), and A mechanism to ensure covered entities are not financing the model. 3. Rebate Denials Denials create the largest operational risk in any rebate framework. Recommendation: Denials must be limited to narrow, objective circumstances (e.g., documented duplicate rebate already paid for the same claim to another covered entity). Manufacturers must provide standardized denial reason codes, claim-level documentation sufficient to validate, and a clear resubmission path. HRSA should establish an independent, time-bound dispute resolution process (not controlled by manufacturers or their vendors), with reporting of denial rates and reasons. 4. Data Collection by Covered Entities Covered entities already collect and retain substantial data to support 340B compliance, but a rebate model would require more granular, standardized, and often non-routinely-available data. Key concern: The data manufacturers are requesting (often NDC-level, claim-level, encounter-level, and eligibility logic artifacts) is not uniformly commonly available in a single system and frequently requires research, transformations, and crosswalks. Recommendation (minimum necessary data): HRSA should define a minimal standardized dataset with a strict minimum necessary principle, and prohibit manufacturers from expanding requirements beyond HRSAs standard. Data elements should be limited to what is needed to: Identify the drug/NDC and quantity, Identify the covered entity and eligible site, Confirm an eligible patient relationship/encounter framework consistent with 340B requirements, Flag Medicaid duplicate discount risks using standardized identifiers, Provide traceable audit trails without exposing unnecessary PHI. Privacy/security: HRSA should require: Uniform data security standards and retention limits, Prohibition on repurposing data for non-340B objectives, Standard BAAs/DUAs where appropriate, Clear breach notification requirements and liability allocation. 5. Manufacturer Efforts to Avoid Duplicate Discounts (including MDPNP/MFP issues) The RFI notes manufacturers interest in rebate approaches tied to MDPNP nonduplication and duplicate discount concerns. Covered entities support program integrity, including prevention of duplicate discounts. However, a rebate model should not become a mechanism to shift administrative workload to covered entities or to impose non-standard data demands that function as a de facto prior authorization for the 340B price. Recommendation: HRSA should define a consistent, limited set of identifiers to support nonduplication, rather than allowing varied manufacturer-specific requirements. Any MDPNP-related operationalization should be standardized and narrowly tailored to avoid creating inconsistent or unworkable compliance burdens across manufacturers. 6. Required Reporting Manufacturer reporting to HRSA should be robust and public-facing, because manufacturers will control key parts of the rebate process and could create access barriers through delays or denials. Recommendation (required manufacturer reporting): Rebate payment timeliness (median/mean days), Denial rates and denial reason distribution, Dispute volumes and resolution time, Net financial impacts (aggregate), Any system outages or submission failures, Any unilateral changes to procedures or data requirements. HRSA should publish summary data at regular intervals to support transparency and allow stakeholders to assess whether the pilot is functioning without harming access. 7. 340B Program Integrity and Other Potential Benefits A rebate model may create certain theoretical integrity benefits (e.g., additional claim-level visibility), but those benefits must be weighed against real risks: Increased administrative burden and cost, Cash-flow harm and reduced access to drugs, Increased disputes and denials, Greater cybersecurity/PHI exposure, Fragmentation across manufacturers and third parties. Recommendation: If HRSA proceeds, limit scope and protect access. Keep the pilot narrowly scoped, time-limited, and voluntary. Prohibit unilateral manufacturer implementations outside HRSA-approved parameters. Require strong guardrails, uniform standards, and covered-entity protections (timeliness, penalties, dispute resolution). Consider alternatives that preserve up-front pricing (e.g., improved transparency/standardized Medicaid identifiers, strengthened HRSA audit tools, or other targeted integrity measures) rather than moving to a rebate framework. Conclusion The 340B Program was designed to stretch scarce Federal resources and support access to care. A rebate model risks shifting financial and administrative burden onto covered entities and could undermine medication access through cash-flow constraints, denials, and operational complexity. This does not stretch Federal resources but rather constrains them. Re: HRSA-2026-0001 Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) (as extended to April 20, 2026) 1. Costs to Covered Entities 1(a) Current administrative costs under up-front 340B discounts. 340B compliance is already resource-intensive under the up-front model. Covered entities must maintain patient eligibility logic, site-of-service alignment, prescriber linkage, Medicaid duplicate discount controls, contract pharmacy oversight, audit response readiness, and ongoing reconciliation across multiple data sources and third parties. Key cost drivers today include: Staffing/FTE time devoted to eligibility rules, accumulators, audit preparation, and policy monitoring. IT/informatics labor to build feeds, map locations, maintain prescriber lists, and reconcile to wholesaler/TPA data. Third-party vendor costs (TPAs, contract pharmacies, analytics tools, legal review). Compliance activities (internal audits, corrective action plans, documentation, training). 1(b) Incremental administrative and operational costs under a rebate model. A rebate model would add substantial new work that does not exist today, including: claim/data submission to manufacturers (or their agents), rebate request tracking, denial management, dispute escalation, and reconciliation of rebate payments back to purchases/dispenses/claimsoften at the NDC level and across multiple systems (EHR, pharmacy system, wholesaler, TPA, payers). Incremental costs would include both: One-time start-up: systems build, interfaces, new workflows, legal/security review, staff training, policy/controls redesign; and Ongoing: monthly/quarterly submissions, monitoring, appeals, compliance reporting, and audit support. A rebate models core administrative burden falls on covered entities, requiring them to prove entitlement to the ceiling price after the fact, rather than receiving it at the time of purchase. 1(c) Staffing impacts. A rebate model would likely require additional FTE capacity (or force reallocation away from patient-facing work) to manage: Rebate submission operations and exception queues, Denial adjudication and dispute management, Continuous data quality monitoring and reconciliation. 1(d) Systems and infrastructure. A rebate model would require new or materially expanded infrastructure, including: Standardized claims/purchase/replenishment crosswalks, Automated matching logic and exception handling, Secure data transfer, retention, and audit trails, Reporting to demonstrate compliance and manage disputes. 1(e) Other costs/impacts. Additional burdens likely include legal review of manufacturer/third-party agreements, cybersecurity risk management, and potential constraints imposed by third-party terms of use that are incompatible with covered entities operational realities and public accountability. A rebate model also risks downstream operational friction that could reduce medication access (delays, denials, cash constraints). 2. Payment Timing and Cash-Flow Impacts A rebate model shifts covered entities from receiving a discount at purchase to fronting higher acquisition costs and waiting for reimbursement. This creates material harm to cash flow, days cash on hand, and borrowing needsespecially for safety-net hospitals. Even if HRSA required manufacturers to pay/deny within 10 calendar days of submission, the model still imposes a working-capital burden because: Covered entities must still purchase at a higher price first, Complete and correct submissions will be disputed, Denials and resubmissions extend timelines, and Payment timing mismatches will be common across claims adjudication, reversals, and rebills. Recommendation: If HRSA pursues a pilot, require: Mandatory interest/penalties for late payments, Clear definitions of complete submission, A uniform, centralized HRSA-administered portal for submission and tracking (to avoid fragmented manufacturer processes), and A mechanism to ensure covered entities are not financing the model. 3. Rebate Denials Denials create the largest operational risk in any rebate framework. Recommendation: Denials must be limited to narrow, objective circumstances (e.g., documented duplicate rebate already paid for the same claim to another covered entity). Manufacturers must provide standardized denial reason codes, claim-level documentation sufficient to validate, and a clear resubmission path. HRSA should establish an independent, time-bound dispute resolution process (not controlled by manufacturers or their vendors), with reporting of denial rates and reasons. 4. Data Collection by Covered Entities Covered entities already collect and retain substantial data to support 340B compliance, but a rebate model would require more granular, standardized, and often non-routinely-available data. Key concern: The data manufacturers are requesting (often NDC-level, claim-level, encounter-level, and eligibility logic artifacts) is not uniformly commonly available in a single system and frequently requires research, transformations, and crosswalks. Recommendation (minimum necessary data): HRSA should define a minimal standardized dataset with a strict minimum necessary principle, and prohibit manufacturers from expanding requirements beyond HRSAs standard. Data elements should be limited to what is needed to: Identify the drug/NDC and quantity, Identify the covered entity and eligible site, Confirm an eligible patient relationship/encounter framework consistent with 340B requirements, Flag Medicaid duplicate discount risks using standardized identifiers, Provide traceable audit trails without exposing unnecessary PHI. Privacy/security: HRSA should require: Uniform data security standards and retention limits, Prohibition on repurposing data for non-340B objectives, Standard BAAs/DUAs where appropriate, Clear breach notification requirements and liability allocation. 5. Manufacturer Efforts to Avoid Duplicate Discounts (including MDPNP/MFP issues) The RFI notes manufacturers interest in rebate approaches tied to MDPNP nonduplication and duplicate discount concerns. Covered entities support program integrity, including prevention of duplicate discounts. However, a rebate model should not become a mechanism to shift administrative workload to covered entities or to impose non-standard data demands that function as a de facto prior authorization for the 340B price. Recommendation: HRSA should define a consistent, limited set of identifiers to support nonduplication, rather than allowing varied manufacturer-specific requirements. Any MDPNP-related operationalization should be standardized and narrowly tailored to avoid creating inconsistent or unworkable compliance burdens across manufacturers. 6. Required Reporting Manufacturer reporting to HRSA should be robust and public-facing, because manufacturers will control key parts of the rebate process and could create access barriers through delays or denials. Recommendation (required manufacturer reporting): Rebate payment timeliness (median/mean days), Denial rates and denial reason distribution, Dispute volumes and resolution time, Net financial impacts (aggregate), Any system outages or submission failures, Any unilateral changes to procedures or data requirements. HRSA should publish summary data at regular intervals to support transparency and allow stakeholders to assess whether the pilot is functioning without harming access. 7. 340B Program Integrity and Other Potential Benefits A rebate model may create certain theoretical integrity benefits (e.g., additional claim-level visibility), but those benefits must be weighed against real risks: Increased administrative burden and cost, Cash-flow harm and reduced access to drugs, Increased disputes and denials, Greater cybersecurity/PHI exposure, Fragmentation across manufacturers and third parties. Recommendation: If HRSA proceeds, limit scope and protect access. Keep the pilot narrowly scoped, time-limited, and voluntary. Prohibit unilateral manufacturer implementations outside HRSA-approved parameters. Require strong guardrails, uniform standards, and covered-entity protections (timeliness, penalties, dispute resolution). Consider alternatives that preserve up-front pricing (e.g., improved transparency/standardized Medicaid identifiers, strengthened HRSA audit tools, or other targeted integrity measures) rather than moving to a rebate framework. Conclusion The 340B Program was designed to stretch scarce Federal resources and support access to care. A rebate model risks shifting financial and administrative burden onto covered entities and could undermine medication access through cash-flow constraints, denials, and operational complexity. This does not stretch Federal resources but rather constrains them.
HRSA-2026-0001-0064(no commenter metadata)2026-03-11T04:00Z12,285 chars
See attached file(s) Lincoln Health Hugo, Colorado 80821 March 9, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Lincoln Health appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a rebate model for the 340B Drug Pricing Program. As a rural safety-net provider Critical Access Hospital (CAH) serving a geographically isolated population in eastern Colorado, Lincoln Health relies on the statutory 340B discount model to maintain access to essential medications and sustain clinical services for underserved patients. Our responses below reflect the operational, financial, and compliance realities faced by this CAH when evaluating a rebate-based model. Administrative Cost Impact The implementation of a rebate-based purchasing model would significantly increase administrative workload for Lincoln Health. Based on our current operational structure, the anticipated increase in administrative costs would be no less than $500 per month. This estimate reflects the additional staffing time required for reconciliation of claims, rebate tracking, accounting adjustments, and dispute resolution with manufacturers or third-party administrators. Payment Timing and Cash Flow Implications The timing of rebate payments presents a major concern for Lincoln Healths -5% operating margin. Current pharmacy market conditions provide a clear example. The Maximum Fair Pricing (MFP) process and rebate mechanisms were originally intended to be linked. However, when the rebate model was withdrawn, the MFP process continued, creating significant reconciliation challenges for pharmacies. Pharmacies have reported challenges including: Difficulties linking de-identified claims in the Beacon MFP platform with the Medicare Transaction Facilitator. Incorrect identification of prescriptions as 340B eligible. Accounting corrections issued months after transactions. For Lincoln Health, delayed or inaccurate rebate payments could create substantial operational risks. Implications if a Rebate is Denied If a manufacturer denies or delays a rebate, the covered entity bears the financial risk. Industry discussions at the 340B Coalition, have documented instances where pharmacies attempted repeatedly to contact manufacturers regarding rebate discrepancies without receiving responses. In some cases, providers were advised to file cases with federal agencies, yet no mechanism existed to compel timely manufacturer payment. If pharmaceutical companies delay rebates beyond a proposed 10-day payment window, the cash flow impact to Lincoln Health could reach $50,000 to $100,000, which is financially unsustainable. Impact on Data Collection and Reporting A rebate model would significantly complicate internal data collection and financial reconciliation processes. Currently, Lincoln Health must verify each rebate transaction individually to ensure that funds have been received. Third-party administrators use inconsistent reporting formats. For example: Some TPAs report the price paid for the drug. Others report the post-rebate price. These inconsistencies make financial reconciliation difficult and could create major operational barriers when attempting to pass savings to patients through mechanisms such as pharmacy cash-card programs. In addition, Lincoln Health is already required to spend significant time each month submitting data to a manufacturer-owned platform called 340B ESP. The data required for Maximum Fair Pricing can already be obtained through this system. Requiring covered entities to duplicate this work under a rebate model would be costly, unnecessary, and burdensome. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers frequently raise concerns regarding duplicate discounts. However, duplicate discounts are defined in statute only in relation to Medicaid. Pharmaceutical manufacturers have voluntarily negotiated rebate arrangements with pharmacy benefit managers for Medicare and commercial insurance markets. These private rebate agreements are not part of the 340B statutory framework and should not shift operational burdens to covered entities. Manufacturers already have the ability to audit covered entities when reasonable cause exists. In practice, these audits occur infrequently because reasonable cause is rarely established. Reporting Requirements Current rebate reporting tools are insufficient for financial oversight. Participants working with the Beacon rebate platform have noted that the available reporting does not adequately support financial reconciliation. Basic accounting reports necessary for CFOs or financial departments to reconcile deposits against bank statements were not initially included in the platform design. Without robust and standardized reporting functionality, covered entities would face significant accounting challenges under a rebate model. Impact on the Integrity of the 340B Program Lincoln Health believes a rebate model fundamentally undermines the statutory framework of the 340B program. The governing statute requires pharmaceutical manufacturers to provide covered outpatient drugs to covered entities at the 340B ceiling price at the time of purchase. Replacing that statutory discount with a rebate mechanism introduces uncertainty regarding whether the covered entity will ever receive the required pricing. If rebate payments are delayed, disputed, or denied, the covered entity effectively purchases the drug at wholesale acquisition cost, directly contradicting the statutory intent of the program. In conclusion, Lincoln Health strongly encourages HRSA to maintain the existing point-of-sale discount structure of the 340B program. A rebate-based model would introduce unnecessary financial risk, administrative burden, and operational complexity for rural safety-net providers that rely on the program to sustain patient access to care. Lincoln Health Hugo, Colorado 80821 March 9, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Lincoln Health appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a rebate model for the 340B Drug Pricing Program. As a rural safety-net provider Critical Access Hospital (CAH) serving a geographically isolated population in eastern Colorado, Lincoln Health relies on the statutory 340B discount model to maintain access to essential medications and sustain clinical services for underserved patients. Our responses below reflect the operational, financial, and compliance realities faced by this CAH when evaluating a rebate-based model. Administrative Cost Impact The implementation of a rebate-based purchasing model would significantly increase administrative workload for Lincoln Health. Based on our current operational structure, the anticipated increase in administrative costs would be no less than $500 per month. This estimate reflects the additional staffing time required for reconciliation of claims, rebate tracking, accounting adjustments, and dispute resolution with manufacturers or third-party administrators. Payment Timing and Cash Flow Implications The timing of rebate payments presents a major concern for Lincoln Healths -5% operating margin. Current pharmacy market conditions provide a clear example. The Maximum Fair Pricing (MFP) process and rebate mechanisms were originally intended to be linked. However, when the rebate model was withdrawn, the MFP process continued, creating significant reconciliation challenges for pharmacies. Pharmacies have reported challenges including: Difficulties linking de-identified claims in the Beacon MFP platform with the Medicare Transaction Facilitator. Incorrect identification of prescriptions as 340B eligible. Accounting corrections issued months after transactions. For Lincoln Health, delayed or inaccurate rebate payments could create substantial operational risks. Implications if a Rebate is Denied If a manufacturer denies or delays a rebate, the covered entity bears the financial risk. Industry discussions at the 340B Coalition, have documented instances where pharmacies attempted repeatedly to contact manufacturers regarding rebate discrepancies without receiving responses. In some cases, providers were advised to file cases with federal agencies, yet no mechanism existed to compel timely manufacturer payment. If pharmaceutical companies delay rebates beyond a proposed 10-day payment window, the cash flow impact to Lincoln Health could reach $50,000 to $100,000, which is financially unsustainable. Impact on Data Collection and Reporting A rebate model would significantly complicate internal data collection and financial reconciliation processes. Currently, Lincoln Health must verify each rebate transaction individually to ensure that funds have been received. Third-party administrators use inconsistent reporting formats. For example: Some TPAs report the price paid for the drug. Others report the post-rebate price. These inconsistencies make financial reconciliation difficult and could create major operational barriers when attempting to pass savings to patients through mechanisms such as pharmacy cash-card programs. In addition, Lincoln Health is already required to spend significant time each month submitting data to a manufacturer-owned platform called 340B ESP. The data required for Maximum Fair Pricing can already be obtained through this system. Requiring covered entities to duplicate this work under a rebate model would be costly, unnecessary, and burdensome. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers frequently raise concerns regarding duplicate discounts. However, duplicate discounts are defined in statute only in relation to Medicaid. Pharmaceutical manufacturers have voluntarily negotiated rebate arrangements with pharmacy benefit managers for Medicare and commercial insurance markets. These private rebate agreements are not part of the 340B statutory framework and should not shift operational burdens to covered entities. Manufacturers already have the ability to audit covered entities when reasonable cause exists. In practice, these audits occur infrequently because reasonable cause is rarely established. Reporting Requirements Current rebate reporting tools are insufficient for financial oversight. Participants working with the Beacon rebate platform have noted that the available reporting does not adequately support financial reconciliation. Basic accounting reports necessary for CFOs or financial departments to reconcile deposits against bank statements were not initially included in the platform design. Without robust and standardized reporting functionality, covered entities would face significant accounting challenges under a rebate model. Impact on the Integrity of the 340B Program Lincoln Health believes a rebate model fundamentally undermines the statutory framework of the 340B program. The governing statute requires pharmaceutical manufacturers to provide covered outpatient drugs to covered entities at the 340B ceiling price at the time of purchase. Replacing that statutory discount with a rebate mechanism introduces uncertainty regarding whether the covered entity will ever receive the required pricing. If rebate payments are delayed, disputed, or denied, the covered entity effectively purchases the drug at wholesale acquisition cost, directly contradicting the statutory intent of the program. In conclusion, Lincoln Health strongly encourages HRSA to maintain the existing point-of-sale discount structure of the 340B program. A rebate-based model would introduce unnecessary financial risk, administrative burden, and operational complexity for rural safety-net providers that rely on the program to sustain patient access to care.
HRSA-2026-0001-0065(no commenter metadata)2026-03-11T04:00Z74,468 chars
See attached file(s) UNIVERSITY OF ARKANSAS FOR MEDICAL SCIENCES (UAMS) HRSA RFI Potential 340B Rebate Model Pilot Program 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Please see confidential submission for this response. This total reflects the scale and complexity of UAMS operations as Arkansass only academic medical center and statewide specialty referral hub, including: - high-volume outpatient prescription dispensing, - specialty pharmacy prescriptions, - infusion and clinic-administered outpatient drugs captured through split-billing systems, and - contract pharmacy dispenses serving patients across Central and rural Arkansas. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. UAMS currently incurs material administrative costs to operate 340B under the upfront discount model, including both internal costs and third-party/vendor costs. These include: Internal administrative costs - 340B program oversight and governance (policy maintenance, compliance leadership oversight) - pharmacy operations and split-billing monitoring - eligibility workflows supporting patient definition compliance (linkage to outpatient status and covered entity responsibility for care) - diversion prevention controls, documentation, and ongoing monitoring - duplicate discount prevention (including Medicaid workflows, modifier management, and coordination with state/managed care processes where applicable) - audit readiness, document retention, internal sampling, and corrective action processes - third-party administrator (TPA) services oversight - finance and revenue cycle coordination Third-party costs - split-billing software licensing, maintenance, and support - contract pharmacy administration and reconciliation services (TPA fees) - interface fees for EHR/pharmacy/billing data integration - external audit/consulting support used to validate program controls or prepare for HRSA audits UAMS also incurs administrative cost from cross-departmental effort (pharmacy, revenue cycle, compliance, legal, IT, and finance), particularly for contract pharmacy oversight and reconciliation. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for UAMS include: - Staffing / labor hours: Dedicated 340B operations, contract pharmacy oversight staff, analysts performing eligibility review and reconciliation, compliance/audit staff supporting documentation and corrective actions. - IT systems and interfaces: Split-billing and replenishment systems; interfaces between EHR, pharmacy dispensing platforms, wholesaler purchasing files, claims adjudication files, and contract pharmacy data feeds. - Third-party vendor/TPA costs: Contract pharmacy administration and data matching; claims feeds; reporting and audit modules; ongoing vendor support for data issues. - Compliance activities: Routine reconciliations; eligibility and accumulator logic testing; audit response capacity; policy updates in response to manufacturer actions and evolving program interpretation. - Complexity multipliers: Specialty drug growth, increasing claim complexity, contract pharmacy network scale, and multi-site outpatient clinics. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. A rebate model would materially increase administrative and operational costs for UAMS because it converts 340B from a prospective purchasing discount into a claims-based receivables and dispute management system. One-time startup costs (implementation) - build/configure rebate submission workflows (new SOPs, internal controls, segregation of duties) - IT build-out: mapping claims data elements; establishing secure transmission; integrating with clearinghouse/manufacturer portals - accounting/finance redesign: receivables recognition, cash application, reconciliation procedures, audit trail standards - staff training and role redesign (pharmacy, revenue cycle, finance, compliance) - legal/compliance review of new data sharing terms and privacy protections - contract amendments with TPAs, contract pharmacies, wholesalers (as applicable) Estimated one-time: Please see confidential submission for this response. Ongoing costs (steady-state operations) - daily/weekly rebate claim creation and submission for eligible dispenses/administered drugs - monitoring payment timeliness against 10-day requirement; tracking outstanding receivables - denial intake, documentation review, and appeals/dispute resolution - reconciliation across: claims eligibility purchase files rebate remittances - expanded audit support (internal and external) due to new failure points (missing fields, late payments, denials) - additional patient access management activities if inventory or dispensing workflows are impacted - additional work for MDPNP/MFP-related rebate submissions (if applicable) and interactions with Medicare drug pricing program non-duplication logic Estimated ongoing: Please see confidential submission for this response. UAMS notes that even a limited drug set pilot creates full-system costs because workflows must accommodate mixed models (upfront 340B for some drugs, rebate model for others). ii. Describe the methodology and assumptions used to develop these estimates. UAMS would estimate costs by: - process mapping current-state vs. future-state workflows (pharmacy purchasing, dispensing/administering, claim adjudication, split-billing, compliance monitoring, audit response) - assigning staff time to new functions (rebate claim submission, tracking, dispute resolution, reconciliation) - using vendor quotes for required interfaces/modules and ongoing transaction fees - modeling expected volume for pilot drugs (including specialty/high-cost therapies that carry disproportionate reconciliation effort) - assuming non-zero denial rates and dispute volume (because disputes are a predictable outcome of any new claims validation system) Assumptions include: - multiple manufacturers with differing technical requirements unless HRSA standardizes formats - initial period of elevated errors and resubmissions (implementation drag) - need for auditable documentation for each claim paid/denied and each dispute resolution outcome iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. Incremental costs would cover: - Claims processing / identification: isolating eligible dispenses, confirming outpatient status, associating covered entity identifiers, identifying contract pharmacy dispenses, and ensuring payer classification. - Data submission: generating standardized files (or portal submissions), transmission security, completeness verification, resubmission management. - Reconciliation: matching each rebate to a claim; matching claim to purchasing record; matching to financial ledger; ensuring no double-counting; variance analysis. - Denial management: triage, evidence collection, appeals, tracking resolution timelines. - Audit support: maintaining new documentation layers; responding to HRSA/manufacturer/clearinghouse audits; testing controls. - Financial operations: receivables aging, cash posting, forecasting, and internal reporting. Effect on current administrative costs: - UAMS would not eliminate existing upfront 340B administrative costs because split-billing, eligibility verification, contract pharmacy oversight, diversion prevention, and audit readiness would still be required. - The rebate model largely adds a second operating system: current controls remain plus new claims/receivables/dispute machinery. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Offsets could be achieved by: - Per-claim administrative payments paid automatically through the clearinghouse (e.g., fixed fee per accepted submission). - Federal clearinghouse funding so covered entities are not charged submission/transaction fees. - Manufacturer-funded administrative support through standardized program fees (not negotiated bilaterally). - Automation requirements that reduce manual labor (standard file formats, standardized denial reason codes, standardized adjudication timelines). Quantification approach: - HRSA could establish a standardized cost-to-comply methodology (time-and-motion or activity-based costing), validated through sampled entities of different sizes (AMCs like UAMS, rural hospitals, FQHCs). - UAMS recommends HRSA set an offset formula tied to transaction volume and drug complexity (e.g., specialty/high-cost drugs require more reconciliation effort). v. Comment on the impact of these incremental costs under your current operations. For UAMS, incremental costs would: - require additional staffing and/or vendor capacity, - increase audit exposure and compliance risk due to new failure points (missing fields, late payments, denials), - divert resources from patient-facing services funded by 340B savings, and - create operational friction that could slow dispensing/infusion workflows unless fully automated and reliably funded. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Yes. UAMS anticipates both: - additional FTEs dedicated to rebate submission, reconciliation, and dispute management; and - reallocation of existing time from pharmacy operations, clinic support, revenue cycle, and compliance teams toward rebate administration. Quantification: - additional monthly hours for reconciliation/denials are expected to scale with pilot volume and denial rate. -Please see confidential submission for this response. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. - Please see confidential submission for this response. Likely roles: - Rebate Operations Analyst(s): create/submit rebate files, manage completeness checks, resubmissions. - Reconciliation Accountant/Analyst: match rebates to claims/purchases; manage receivables aging; variance analysis. - Denial/Dispute Specialist: manage denial documentation, appeals, tracking timelines. - IT/Data Integration Analyst: maintain interfaces, data mapping, error resolution. - Compliance/Audit Support: monitor controls, prepare audit documentation, conduct periodic testing. These roles would be permanent if the rebate model is ongoing, because core functions repeat each cycle (submission payment reconciliation audit). d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. UAMS would require: - modifications to split-billing systems to support a rebate-eligible claim extract workflow - integration between EHR/pharmacy systems, claims adjudication feeds, and rebate submission platform - secure transmission tools (encrypted file transfer; access controls; audit logs) - reconciliation and reporting tools capable of claim-level tracking and denial analytics - financial systems configuration for receivables, cash application, and audit trails - standardized identifiers (e.g., OPA ID mapping to claim submissions) and contract pharmacy linkages Without a centralized HRSA clearinghouse, UAMS would also need to support multiple manufacturer portals and file formats, materially increasing complexity and error rates. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Estimated costs (placeholders): -Please see confidential submission for this response. UAMS notes that recurring costs may scale with transaction volume if priced per submission or per claim. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Additional costs include: - Legal review / contracting: data use agreements, vendor amendments, manufacturer terms (one-time + recurring as terms evolve) - Training: pharmacy, clinic, finance, and IT training (one-time at go-live; recurring for turnover) - Consulting support: implementation assistance, compliance redesign, internal control testing (often one-time + periodic) - Change management: operational testing, dual-processing during transition (one-time but substantial) - Potential service impacts: if liquidity/administrative burden grows, there may be downstream pressure to reduce program-supported services (risk-dependent; could become recurring) ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). UAMS-specific factors include: - Statewide referral hub role: disruptions at UAMS ripple across rural referring facilities and specialty access statewide. - High Medicaid and uninsured volume: increases sensitivity to cash flow disruptions and administrative costs. - Specialty drug intensity: oncology/transplant/biologics amplify working-capital exposure because unit costs are high. - Contract pharmacy reliance for geographic access: rural access often depends on local dispensing points outside Little Rock. - Academic mission: clinical programs support training/workforce development; instability can impact broader state health capacity. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Potential access impacts include: - Reduced inventory of high-cost specialty drugs if upfront acquisition costs rise and rebates lag or are disputed. - Delays initiating therapy (oncology infusions, biologics) if procurement becomes more conservative. - Contraction of contract pharmacy access if reconciliation complexity and financial risk increase, especially affecting rural patients. - Reduced capacity for medication assistance/adherence programs funded by predictable 340B savings. - Operational delays at point of service if additional validation steps slow dispensing. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Yes. A 10-day payment requirement reduces but does not eliminate cash flow risk because: - UAMS would still purchase drugs at higher upfront prices (e.g., WAC or non-340B pricing) and carry the differential as receivables until rebate payment. - Any delay caused by incomplete claim determinations, transmission errors, denials, or disputes extends the float period and increases financing exposure. Financial risks include: - Liquidity risk: interim financing needs rise, especially for specialty drugs with very high acquisition cost. - Timing volatility: inconsistent manufacturer processing creates unpredictability in cash receipts. - Credit/borrowing risk: increased reliance on credit lines or internal reserves. - Denial/dispute risk: delayed or denied rebates become revenue leakage or extended receivables aging. Even small percentage delays applied to large specialty spend can produce a material cash burden for a statewide AMC like UAMS. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Please see confidential submission for this response. Terms are generally similar for 340B and non-340B purchases because wholesaler payment terms are tied to contractual purchasing arrangements, not the covered entitys subsequent reimbursement model. In the current model, the key benefit is that UAMS pays the reduced 340B price within standard terms rather than financing a higher price pending rebates. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. The primary wholesaler for UAMS allows for the following prompt pay incentives: Please see confidential submission for this response. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. UAMS typically remits payment within 5 calendar days under current wholesaler terms, depending on payment cycle, invoice reconciliation, and purchasing volume. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Yes. The current model delivers 340B benefit at purchase, aligned with wholesaler invoicing. A rebate model moves the benefit after dispensing, meaning UAMS must: - pay wholesaler invoices on normal terms at higher prices, and - wait for rebates (or denials/disputes) later. Alternative arrangements that could mitigate impacts: - Hybrid model: wholesalers invoice at an estimated 340B price; manufacturers reconcile differences via periodic true-up (reduces float). - Prefunded manufacturer escrow/clearinghouse accounts: ensures payment capacity and accelerates settlement. - Extended wholesaler terms specifically for pilot drugs: aligns invoice due dates with rebate receipts (requires negotiation and may not be uniformly available). - Central clearinghouse netting: clearinghouse offsets payables/receivables to reduce cash movement and timing mismatch. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. To ensure adherence, the pilot must be structured with objective triggers and enforceable consequences: 1) Uniform definition of complete claim - HRSA should publish the authoritative claim data schema. - Manufacturers should be prohibited from adding bespoke completeness requirements. 2) Centralized submission + timestamping - Claims submitted through a HRSA/CMS-designated clearinghouse with automated completeness validation. - The 10-day clock starts at clearinghouse acceptance. 3) Deemed approval - If manufacturer neither pays nor issues a compliant denial within 10 days, the claim is deemed approved and payment is automatically initiated. 4) Interest/penalties - Automatic interest accrual beginning day 11; escalating penalties for repeated noncompliance. 5) Standard denial reason codes + documentation rules - Denials must include specific codes, supporting documentation, and a correction path. - Unsupported denials cannot stop the clock. 6) Public performance reporting - HRSA publishes manufacturer timeliness and denial metrics, creating accountability. 7) Financial assurance - Require prefunding, escrow, or other guarantee mechanisms to ensure manufacturers can meet accelerated payment timelines. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Additional structural tools: - Clearinghouse pay-first, dispute-later approach: pay within 10 days, then reconcile disputes through independent adjudication without delaying cash. - Short-cycle remittances: daily/weekly EFT batches rather than monthly payments. - Caps on denial rates pending audit: manufacturers exceeding thresholds must undergo review and corrective action. - Standardized dispute resolution timelines: fixed deadlines for appeals to prevent indefinite receivables aging. - Prohibition on retroactive recoupment after defined window: enhances financial predictability for safety-net providers. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Yes. Guardrails are essential because denials can easily become a mechanism for delaying payment. UAMS recommends denials be limited to a narrow set of objective circumstances, such as: - verified duplicate rebate already paid on the same claim/identifier; - covered entity not eligible/registered at time of dispense (with HRSA confirmation); - data integrity failure that cannot be corrected through resubmission (with specified documentation). Denials should not be allowed for broad or subjective reasons (e.g., manufacturer-specific eligibility theories, demands for non-standard data, or disputes about patient definition beyond HRSA standards). Guardrails should prevent manufacturers from shifting compliance burden onto covered entities through denial practices. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Standard process elements should include: - Uniform denial template (HRSA-issued): claim ID, denial code, specific rationale, required documentation, correction path. - Standard denial code set (limited, enumerated). - Strict timelines: denial within 10 days; covered entity appeal window; manufacturer response deadline; final adjudication deadline. - Independent dispute resolution: HRSA or third-party arbitration with binding outcomes. - Payment protections: dispute does not halt payment if deemed approval applies (or escrow is used). 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. UAMS uses integrated systems and vendor support to manage 340B compliance, including: - EHR (patient encounter/outpatient status and clinical linkage), - pharmacy dispensing systems (NDC, quantity, days supply, prescriber, site), - split-billing software (eligibility logic and replenishment), - wholesaler purchasing files (invoice and purchase data), - TPAs for contract pharmacy administration (claim feeds, accumulators, reports), - document retention systems for audit support and policy documentation. Data is retained according to compliance and audit readiness needs, including HRSA audit support and internal monitoring. b. Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). UAMS employs: - automated validation checks (missing fields, NDC mapping, eligibility flags), - routine reconciliations (dispense eligibility purchase), - contract pharmacy claim validation and sampling, - internal compliance audits and corrective action tracking, - periodic vendor controls testing and exception reporting, - HRSA audit readiness procedures (document retention, sampling protocols). c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Yes. A rebate model would require ongoing (not one-time) additional data collection and processing because payment depends on claim-level submission, tracking, and dispute management. Changes include: - creation of rebate submission-ready claim files, - tracking submission acceptance timestamps, - maintaining payment/denial/dispute status per claim, - expanded financial reporting and receivables tracking, - expanded retention of submission and response artifacts to defend audits and disputes. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. UAMS recommends the pilot require only minimum necessary elements sufficient for eligibility confirmation and duplicate discount prevention: Pharmacy claims (contract + in-house) - NDC (11-digit), quantity - date of service - covered entity identifier (OPA ID) - contract pharmacy identifier (NPI/NCPDP) where applicable - payer type (Medicaid FFS / Medicaid MCO / Medicare / commercial) - prescription number - 340B indicator (pilot flag) and submission timestamp Medical benefit/administered drugs - NDC - units administered/wasted - date of service - payer type - covered entity identifier Availability and sources: - Most elements already exist in claims and EHR/pharmacy systems. - Contract pharmacy elements are already transmitted to TPAs and claims processors in standard feeds. - The gap is standardization and authoritative payer/duplicate discount flagsbest solved through clearinghouse/state/CMS integration rather than covered-entity reporting. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Recommendations: - enforce minimum necessary data standards; prohibit patient-level clinical detail unless strictly required. - centralized secure portal/clearinghouse with encryption, role-based access, audit logs. - standardized data use agreements (DUAs) and business associate agreements (BAAs) where needed. - prohibition on manufacturers requesting additional covered entity data beyond pilot schema. - strong breach notification and data retention limits; require deletion schedules. - independent security certification for any clearinghouse handling PHI/PII. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. UAMS historically prevented duplicate discounts by: - applying state-required claim indicators/modifiers when applicable, - maintaining auditable records of 340B eligibility determinations and purchases, - using split-billing systems that track Medicaid-related carve-in/carve-out logic as configured, - conducting periodic reconciliations and internal audits, - retaining contract pharmacy and in-house dispense records sufficient for HRSA audit support and state Medicaid coordination. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection and record-maintenance practices. Since January 1, 2026, UAMS has enhanced monitoring to address new non-duplication dynamics associated with MFP implementation by: - strengthening payer classification validation for affected drugs, - expanding tracking of claims that may be subject to MFP pathways, - reinforcing audit trails for outpatient eligibility and dispensing records, c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. UAMS experience reflects common system limitations: - payer data and encounter records can be delayed or incomplete, - claim identifiers are not uniform across systems, - the distinction between program payment pathways is often not visible to covered entities at the time of dispense. Where MFP access is not provided due to non-duplication provisions, identification is operationally challenging without standardized flags and consistent payer/system reporting. d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Challenges include: - data availability gaps: limited access to authoritative Medicaid rebate invoicing decisions and delayed MCO encounter data - claim identification: no universal claim ID across PBMs, Medicaid rebate systems, and manufacturer reconciliation - timing mismatches: dispensing occurs daily; Medicaid rebate invoicing is quarterly; disputes occur months later - inconsistent state approaches: modifiers/flags vary and are not uniformly enforced across Medicaid/MCO environments e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Minimum necessary elements: - prescription number - NDC, quantity, date of service - payer classification (Medicaid FFS vs MCO vs Medicare vs other) - covered entity identifier (OPA ID) - contract pharmacy identifier where applicable - authoritative Medicaid rebate exclusion flag (best provided by state/CMS, not inferred) - pilot 340B rebate request indicator + submission timestamp UAMS highly recommends ONLY a non-biased, third party platform be allowed to serve as a data hub for 340B claims. Also, the third party platform should focus on data collection and strategic program improvements, without any financial implications (rebates) being included in the process. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? UAMS recommends monthly submission to HRSA of: - rebate payment timeliness (median/mean; % paid within 10 days) - total rebates requested, paid, denied, pending - denial reasons by standardized code and denial documentation completeness - dispute rates, resolution times, outcomes - aging of outstanding receivables - system outage or processing failure incidents affecting timeliness - any unilateral manufacturer completeness criteria applied (should be prohibited) b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should publish quarterly aggregated manufacturer performance: - % paid within 10 days - denial rate and top denial reason codes - average time to dispute resolution - volume of claims processed - outstanding unpaid amounts (aggregated) - compliance actions taken (high-level, non-confidential) Public reporting creates accountability and allows stakeholders to detect systemic problems early. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Frequency: - Monthly to HRSA for oversight; quarterly public reporting. Duration: - at least 35 years to capture: - implementation stabilization (year 1), - operational maturity (years 23), - longitudinal effects on access and participation (years 45). 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A rebate pilot could improve integrity by: - enabling post-dispense validation against standardized criteria, - creating clearer audit trails and standardized submission records, - reducing ambiguity in duplicate discount prevention. However, integrity gains are contingent on: - standardized national claim formats, - strict limits on manufacturer data demands, - fast and enforceable payment timelines, - safeguards preventing denials from becoming payment delay tools. If the pilot increases burden or financial risk, it may reduce participation and unintentionally harm program integrity by destabilizing safety-net operations. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Yes, if the pilot includes authoritative payer classification and a standardized Medicaid rebate exclusion flag (preferably state/CMS-driven). Without authoritative flags, manufacturers will still rely on inference, resulting in disputes and data demands that do not reliably prevent duplicate discounts. ii. Reduce diversion or improper claims; and Potentially, if eligibility validation is standardized and auditable and does not rely on subjective manufacturer interpretations. Post-dispense validation could detect certain errors, but diversion prevention will still require covered entity controls and HRSA oversight. iii. Increase pricing transparency across stakeholders. Potentially, but transparency should focus on: - payment timeliness, - denial/dispute rates, - process performance, not on patient-level data or covered entity-specific sensitive operational details. Transparency must not become a pathway to require additional covered entity data beyond what is necessary. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Recommendations: - national standardized data schema and reason code sets - centralized clearinghouse submission with automated completeness validation - strict minimum necessary data; prohibit extra manufacturer data requests - automate reporting and provide template formats to reduce manual work - require HRSA to publish aggregate performance metrics and compliance actions d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. Potential benefits: - standardized documentation may improve audit defensibility, - consistent denial codes and metrics can identify systemic issues, - improved duplicate discount certainty could reduce disputes and manufacturer restrictions (if manufacturers accept the model). Whether benefits outweigh costs depends on: - true administrative burden, - payment reliability, - denial/dispute behavior, - whether cash flow risks are mitigated through enforceable rules. For a statewide safety-net AMC like UAMS, benefits are unlikely to outweigh costs unless payment is reliably timely, denials are tightly constrained, and the system is highly automated with administrative offsets. UNIVERSITY OF ARKANSAS FOR MEDICAL SCIENCES (UAMS) HRSA RFI Potential 340B Rebate Model Pilot Program 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Please see confidential submission for this response. This total reflects the scale and complexity of UAMS operations as Arkansass only academic medical center and statewide specialty referral hub, including: - high-volume outpatient prescription dispensing, - specialty pharmacy prescriptions, - infusion and clinic-administered outpatient drugs captured through split-billing systems, and - contract pharmacy dispenses serving patients across Central and rural Arkansas. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. UAMS currently incurs material administrative costs to operate 340B under the upfront discount model, including both internal costs and third-party/vendor costs. These include: Internal administrative costs - 340B program oversight and governance (policy maintenance, compliance leadership oversight) - pharmacy operations and split-billing monitoring - eligibility workflows supporting patient definition compliance (linkage to outpatient status and covered entity responsibility for care) - diversion prevention controls, documentation, and ongoing monitoring - duplicate discount prevention (including Medicaid workflows, modifier management, and coordination with state/managed care processes where applicable) - audit readiness, document retention, internal sampling, and corrective action processes - third-party administrator (TPA) services oversight - finance and revenue cycle coordination Third-party costs - split-billing software licensing, maintenance, and support - contract pharmacy administration and reconciliation services (TPA fees) - interface fees for EHR/pharmacy/billing data integration - external audit/consulting support used to validate program controls or prepare for HRSA audits UAMS also incurs administrative cost from cross-departmental effort (pharmacy, revenue cycle, compliance, legal, IT, and finance), particularly for contract pharmacy oversight and reconciliation. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for UAMS include: - Staffing / labor hours: Dedicated 340B operations, contract pharmacy oversight staff, analysts performing eligibility review and reconciliation, compliance/audit staff supporting documentation and corrective actions. - IT systems and interfaces: Split-billing and replenishment systems; interfaces between EHR, pharmacy dispensing platforms, wholesaler purchasing files, claims adjudication files, and contract pharmacy data feeds. - Third-party vendor/TPA costs: Contract pharmacy administration and data matching; claims feeds; reporting and audit modules; ongoing vendor support for data issues. - Compliance activities: Routine reconciliations; eligibility and accumulator logic testing; audit response capacity; policy updates in response to manufacturer actions and evolving program interpretation. - Complexity multipliers: Specialty drug growth, increasing claim complexity, contract pharmacy network scale, and multi-site outpatient clinics. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. A rebate model would materially increase administrative and operational costs for UAMS because it converts 340B from a prospective purchasing discount into a claims-based receivables and dispute management system. One-time startup costs (implementation) - build/configure rebate submission workflows (new SOPs, internal controls, segregation of duties) - IT build-out: mapping claims data elements; establishing secure transmission; integrating with clearinghouse/manufacturer portals - accounting/finance redesign: receivables recognition, cash application, reconciliation procedures, audit trail standards - staff training and role redesign (pharmacy, revenue cycle, finance, compliance) - legal/compliance review of new data sharing terms and privacy protections - contract amendments with TPAs, contract pharmacies, wholesalers (as applicable) Estimated one-time: Please see confidential submission for this response. Ongoing costs (steady-state operations) - daily/weekly rebate claim creation and submission for eligible dispenses/administered drugs - monitoring payment timeliness against 10-day requirement; tracking outstanding receivables - denial intake, documentation review, and appeals/dispute resolution - reconciliation across: claims eligibility purchase files rebate remittances - expanded audit support (internal and external) due to new failure points (missing fields, late payments, denials) - additional patient access management activities if inventory or dispensing workflows are impacted - additional work for MDPNP/MFP-related rebate submissions (if applicable) and interactions with Medicare drug pricing program non-duplication logic Estimated ongoing: Please see confidential submission for this response. UAMS notes that even a limited drug set pilot creates full-system costs because workflows must accommodate mixed models (upfront 340B for some drugs, rebate model for others). ii. Describe the methodology and assumptions used to develop these estimates. UAMS would estimate costs by: - process mapping current-state vs. future-state workflows (pharmacy purchasing, dispensing/administering, claim adjudication, split-billing, compliance monitoring, audit response) - assigning staff time to new functions (rebate claim submission, tracking, dispute resolution, reconciliation) - using vendor quotes for required interfaces/modules and ongoing transaction fees - modeling expected volume for pilot drugs (including specialty/high-cost therapies that carry disproportionate reconciliation effort) - assuming non-zero denial rates and dispute volume (because disputes are a predictable outcome of any new claims validation system) Assumptions include: - multiple manufacturers with differing technical requirements unless HRSA standardizes formats - initial period of elevated errors and resubmissions (implementation drag) - need for auditable documentation for each claim paid/denied and each dispute resolution outcome iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. Incremental costs would cover: - Claims processing / identification: isolating eligible dispenses, confirming outpatient status, associating covered entity identifiers, identifying contract pharmacy dispenses, and ensuring payer classification. - Data submission: generating standardized files (or portal submissions), transmission security, completeness verification, resubmission management. - Reconciliation: matching each rebate to a claim; matching claim to purchasing record; matching to financial ledger; ensuring no double-counting; variance analysis. - Denial management: triage, evidence collection, appeals, tracking resolution timelines. - Audit support: maintaining new documentation layers; responding to HRSA/manufacturer/clearinghouse audits; testing controls. - Financial operations: receivables aging, cash posting, forecasting, and internal reporting. Effect on current administrative costs: - UAMS would not eliminate existing upfront 340B administrative costs because split-billing, eligibility verification, contract pharmacy oversight, diversion prevention, and audit readiness would still be required. - The rebate model largely adds a second operating system: current controls remain plus new claims/receivables/dispute machinery. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Offsets could be achieved by: - Per-claim administrative payments paid automatically through the clearinghouse (e.g., fixed fee per accepted submission). - Federal clearinghouse funding so covered entities are not charged submission/transaction fees. - Manufacturer-funded administrative support through standardized program fees (not negotiated bilaterally). - Automation requirements that reduce manual labor (standard file formats, standardized denial reason codes, standardized adjudication timelines). Quantification approach: - HRSA could establish a standardized cost-to-comply methodology (time-and-motion or activity-based costing), validated through sampled entities of different sizes (AMCs like UAMS, rural hospitals, FQHCs). - UAMS recommends HRSA set an offset formula tied to transaction volume and drug complexity (e.g., specialty/high-cost drugs require more reconciliation effort). v. Comment on the impact of these incremental costs under your current operations. For UAMS, incremental costs would: - require additional staffing and/or vendor capacity, - increase audit exposure and compliance risk due to new failure points (missing fields, late payments, denials), - divert resources from patient-facing services funded by 340B savings, and - create operational friction that could slow dispensing/infusion workflows unless fully automated and reliably funded. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Yes. UAMS anticipates both: - additional FTEs dedicated to rebate submission, reconciliation, and dispute management; and - reallocation of existing time from pharmacy operations, clinic support, revenue cycle, and compliance teams toward rebate administration. Quantification: - additional monthly hours for reconciliation/denials are expected to scale with pilot volume and denial rate. -Please see confidential submission for this response. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. - Please see confidential submission for this response. Likely roles: - Rebate Operations Analyst(s): create/submit rebate files, manage completeness checks, resubmissions. - Reconciliation Accountant/Analyst: match rebates to claims/purchases; manage receivables aging; variance analysis. - Denial/Dispute Specialist: manage denial documentation, appeals, tracking timelines. - IT/Data Integration Analyst: maintain interfaces, data mapping, error resolution. - Compliance/Audit Support: monitor controls, prepare audit documentation, conduct periodic testing. These roles would be permanent if the rebate model is ongoing, because core functions repeat each cycle (submission payment reconciliation audit). d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. UAMS would require: - modifications to split-billing systems to support a rebate-eligible claim extract workflow - integration between EHR/pharmacy systems, claims adjudication feeds, and rebate submission platform - secure transmission tools (encrypted file transfer; access controls; audit logs) - reconciliation and reporting tools capable of claim-level tracking and denial analytics - financial systems configuration for receivables, cash application, and audit trails - standardized identifiers (e.g., OPA ID mapping to claim submissions) and contract pharmacy linkages Without a centralized HRSA clearinghouse, UAMS would also need to support multiple manufacturer portals and file formats, materially increasing complexity and error rates. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Estimated costs (placeholders): -Please see confidential submission for this response. UAMS notes that recurring costs may scale with transaction volume if priced per submission or per claim. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Additional costs include: - Legal review / contracting: data use agreements, vendor amendments, manufacturer terms (one-time + recurring as terms evolve) - Training: pharmacy, clinic, finance, and IT training (one-time at go-live; recurring for turnover) - Consulting support: implementation assistance, compliance redesign, internal control testing (often one-time + periodic) - Change management: operational testing, dual-processing during transition (one-time but substantial) - Potential service impacts: if liquidity/administrative burden grows, there may be downstream pressure to reduce program-supported services (risk-dependent; could become recurring) ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). UAMS-specific factors include: - Statewide referral hub role: disruptions at UAMS ripple across rural referring facilities and specialty access statewide. - High Medicaid and uninsured volume: increases sensitivity to cash flow disruptions and administrative costs. - Specialty drug intensity: oncology/transplant/biologics amplify working-capital exposure because unit costs are high. - Contract pharmacy reliance for geographic access: rural access often depends on local dispensing points outside Little Rock. - Academic mission: clinical programs support training/workforce development; instability can impact broader state health capacity. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Potential access impacts include: - Reduced inventory of high-cost specialty drugs if upfront acquisition costs rise and rebates lag or are disputed. - Delays initiating therapy (oncology infusions, biologics) if procurement becomes more conservative. - Contraction of contract pharmacy access if reconciliation complexity and financial risk increase, especially affecting rural patients. - Reduced capacity for medication assistance/adherence programs funded by predictable 340B savings. - Operational delays at point of service if additional validation steps slow dispensing. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Yes. A 10-day payment requirement reduces but does not eliminate cash flow risk because: - UAMS would still purchase drugs at higher upfront prices (e.g., WAC or non-340B pricing) and carry the differential as receivables until rebate payment. - Any delay caused by incomplete claim determinations, transmission errors, denials, or disputes extends the float period and increases financing exposure. Financial risks include: - Liquidity risk: interim financing needs rise, especially for specialty drugs with very high acquisition cost. - Timing volatility: inconsistent manufacturer processing creates unpredictability in cash receipts. - Credit/borrowing risk: increased reliance on credit lines or internal reserves. - Denial/dispute risk: delayed or denied rebates become revenue leakage or extended receivables aging. Even small percentage delays applied to large specialty spend can produce a material cash burden for a statewide AMC like UAMS. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Please see confidential submission for this response. Terms are generally similar for 340B and non-340B purchases because wholesaler payment terms are tied to contractual purchasing arrangements, not the covered entitys subsequent reimbursement model. In the current model, the key benefit is that UAMS pays the reduced 340B price within standard terms rather than financing a higher price pending rebates. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. The primary wholesaler for UAMS allows for the following prompt pay incentives: Please see confidential submission for this response. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. UAMS typically remits payment within 5 calendar days under current wholesaler terms, depending on payment cycle, invoice reconciliation, and purchasing volume. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Yes. The current model delivers 340B benefit at purchase, aligned with wholesaler invoicing. A rebate model moves the benefit after dispensing, meaning UAMS must: - pay wholesaler invoices on normal terms at higher prices, and - wait for rebates (or denials/disputes) later. Alternative arrangements that could mitigate impacts: - Hybrid model: wholesalers invoice at an estimated 340B price; manufacturers reconcile differences via periodic true-up (reduces float). - Prefunded manufacturer escrow/clearinghouse accounts: ensures payment capacity and accelerates settlement. - Extended wholesaler terms specifically for pilot drugs: aligns invoice due dates with rebate receipts (requires negotiation and may not be uniformly available). - Central clearinghouse netting: clearinghouse offsets payables/receivables to reduce cash movement and timing mismatch. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. To ensure adherence, the pilot must be structured with objective triggers and enforceable consequences: 1) Uniform definition of complete claim - HRSA should publish the authoritative claim data schema. - Manufacturers should be prohibited from adding bespoke completeness requirements. 2) Centralized submission + timestamping - Claims submitted through a HRSA/CMS-designated clearinghouse with automated completeness validation. - The 10-day clock starts at clearinghouse acceptance. 3) Deemed approval - If manufacturer neither pays nor issues a compliant denial within 10 days, the claim is deemed approved and payment is automatically initiated. 4) Interest/penalties - Automatic interest accrual beginning day 11; escalating penalties for repeated noncompliance. 5) Standard denial reason codes + documentation rules - Denials must include specific codes, supporting documentation, and a correction path. - Unsupported denials cannot stop the clock. 6) Public performance reporting - HRSA publishes manufacturer timeliness and denial metrics, creating accountability. 7) Financial assurance - Require prefunding, escrow, or other guarantee mechanisms to ensure manufacturers can meet accelerated payment timelines. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Additional structural tools: - Clearinghouse pay-first, dispute-later approach: pay within 10 days, then reconcile disputes through independent adjudication without delaying cash. - Short-cycle remittances: daily/weekly EFT batches rather than monthly payments. - Caps on denial rates pending audit: manufacturers exceeding thresholds must undergo review and corrective action. - Standardized dispute resolution timelines: fixed deadlines for appeals to prevent indefinite receivables aging. - Prohibition on retroactive recoupment after defined window: enhances financial predictability for safety-net providers. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Yes. Guardrails are essential because denials can easily become a mechanism for delaying payment. UAMS recommends denials be limited to a narrow set of objective circumstances, such as: - verified duplicate rebate already paid on the same claim/identifier; - covered entity not eligible/registered at time of dispense (with HRSA confirmation); - data integrity failure that cannot be corrected through resubmission (with specified documentation). Denials should not be allowed for broad or subjective reasons (e.g., manufacturer-specific eligibility theories, demands for non-standard data, or disputes about patient definition beyond HRSA standards). Guardrails should prevent manufacturers from shifting compliance burden onto covered entities through denial practices. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Standard process elements should include: - Uniform denial template (HRSA-issued): claim ID, denial code, specific rationale, required documentation, correction path. - Standard denial code set (limited, enumerated). - Strict timelines: denial within 10 days; covered entity appeal window; manufacturer response deadline; final adjudication deadline. - Independent dispute resolution: HRSA or third-party arbitration with binding outcomes. - Payment protections: dispute does not halt payment if deemed approval applies (or escrow is used). 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. UAMS uses integrated systems and vendor support to manage 340B compliance, including: - EHR (patient encounter/outpatient status and clinical linkage), - pharmacy dispensing systems (NDC, quantity, days supply, prescriber, site), - split-billing software (eligibility logic and replenishment), - wholesaler purchasing files (invoice and purchase data), - TPAs for contract pharmacy administration (claim feeds, accumulators, reports), - document retention systems for audit support and policy documentation. Data is retained according to compliance and audit readiness needs, including HRSA audit support and internal monitoring. b. Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). UAMS employs: - automated validation checks (missing fields, NDC mapping, eligibility flags), - routine reconciliations (dispense eligibility purchase), - contract pharmacy claim validation and sampling, - internal compliance audits and corrective action tracking, - periodic vendor controls testing and exception reporting, - HRSA audit readiness procedures (document retention, sampling protocols). c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Yes. A rebate model would require ongoing (not one-time) additional data collection and processing because payment depends on claim-level submission, tracking, and dispute management. Changes include: - creation of rebate submission-ready claim files, - tracking submission acceptance timestamps, - maintaining payment/denial/dispute status per claim, - expanded financial reporting and receivables tracking, - expanded retention of submission and response artifacts to defend audits and disputes. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. UAMS recommends the pilot require only minimum necessary elements sufficient for eligibility confirmation and duplicate discount prevention: Pharmacy claims (contract + in-house) - NDC (11-digit), quantity - date of service - covered entity identifier (OPA ID) - contract pharmacy identifier (NPI/NCPDP) where applicable - payer type (Medicaid FFS / Medicaid MCO / Medicare / commercial) - prescription number - 340B indicator (pilot flag) and submission timestamp Medical benefit/administered drugs - NDC - units administered/wasted - date of service - payer type - covered entity identifier Availability and sources: - Most elements already exist in claims and EHR/pharmacy systems. - Contract pharmacy elements are already transmitted to TPAs and claims processors in standard feeds. - The gap is standardization and authoritative payer/duplicate discount flagsbest solved through clearinghouse/state/CMS integration rather than covered-entity reporting. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Recommendations: - enforce minimum necessary data standards; prohibit patient-level clinical detail unless strictly required. - centralized secure portal/clearinghouse with encryption, role-based access, audit logs. - standardized data use agreements (DUAs) and business associate agreements (BAAs) where needed. - prohibition on manufacturers requesting additional covered entity data beyond pilot schema. - strong breach notification and data retention limits; require deletion schedules. - independent security certification for any clearinghouse handling PHI/PII. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. UAMS historically prevented duplicate discounts by: - applying state-required claim indicators/modifiers when applicable, - maintaining auditable records of 340B eligibility determinations and purchases, - using split-billing systems that track Medicaid-related carve-in/carve-out logic as configured, - conducting periodic reconciliations and internal audits, - retaining contract pharmacy and in-house dispense records sufficient for HRSA audit support and state Medicaid coordination. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection and record-maintenance practices. Since January 1, 2026, UAMS has enhanced monitoring to address new non-duplication dynamics associated with MFP implementation by: - strengthening payer classification validation for affected drugs, - expanding tracking of claims that may be subject to MFP pathways, - reinforcing audit trails for outpatient eligibility and dispensing records, c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. UAMS experience reflects common system limitations: - payer data and encounter records can be delayed or incomplete, - claim identifiers are not uniform across systems, - the distinction between program payment pathways is often not visible to covered entities at the time of dispense. Where MFP access is not provided due to non-duplication provisions, identification is operationally challenging without standardized flags and consistent payer/system reporting. d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Challenges include: - data availability gaps: limited access to authoritative Medicaid rebate invoicing decisions and delayed MCO encounter data - claim identification: no universal claim ID across PBMs, Medicaid rebate systems, and manufacturer reconciliation - timing mismatches: dispensing occurs daily; Medicaid rebate invoicing is quarterly; disputes occur months later - inconsistent state approaches: modifiers/flags vary and are not uniformly enforced across Medicaid/MCO environments e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Minimum necessary elements: - prescription number - NDC, quantity, date of service - payer classification (Medicaid FFS vs MCO vs Medicare vs other) - covered entity identifier (OPA ID) - contract pharmacy identifier where applicable - authoritative Medicaid rebate exclusion flag (best provided by state/CMS, not inferred) - pilot 340B rebate request indicator + submission timestamp UAMS highly recommends ONLY a non-biased, third party platform be allowed to serve as a data hub for 340B claims. Also, the third party platform should focus on data collection and strategic program improvements, without any financial implications (rebates) being included in the process. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? UAMS recommends monthly submission to HRSA of: - rebate payment timeliness (median/mean; % paid within 10 days) - total rebates requested, paid, denied, pending - denial reasons by standardized code and denial documentation completeness - dispute rates, resolution times, outcomes - aging of outstanding receivables - system outage or processing failure incidents affecting timeliness - any unilateral manufacturer completeness criteria applied (should be prohibited) b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should publish quarterly aggregated manufacturer performance: - % paid within 10 days - denial rate and top denial reason codes - average time to dispute resolution - volume of claims processed - outstanding unpaid amounts (aggregated) - compliance actions taken (high-level, non-confidential) Public reporting creates accountability and allows stakeholders to detect systemic problems early. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Frequency: - Monthly to HRSA for oversight; quarterly public reporting. Duration: - at least 35 years to capture: - implementation stabilization (year 1), - operational maturity (years 23), - longitudinal effects on access and participation (years 45). 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A rebate pilot could improve integrity by: - enabling post-dispense validation against standardized criteria, - creating clearer audit trails and standardized submission records, - reducing ambiguity in duplicate discount prevention. However, integrity gains are contingent on: - standardized national claim formats, - strict limits on manufacturer data demands, - fast and enforceable payment timelines, - safeguards preventing denials from becoming payment delay tools. If the pilot increases burden or financial risk, it may reduce participation and unintentionally harm program integrity by destabilizing safety-net operations. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Yes, if the pilot includes authoritative payer classification and a standardized Medicaid rebate exclusion flag (preferably state/CMS-driven). Without authoritative flags, manufacturers will still rely on inference, resulting in disputes and data demands that do not reliably prevent duplicate discounts. ii. Reduce diversion or improper claims; and Potentially, if eligibility validation is standardized and auditable and does not rely on subjective manufacturer interpretations. Post-dispense validation could detect certain errors, but diversion prevention will still require covered entity controls and HRSA oversight. iii. Increase pricing transparency across stakeholders. Potentially, but transparency should focus on: - payment timeliness, - denial/dispute rates, - process performance, not on patient-level data or covered entity-specific sensitive operational details. Transparency must not become a pathway to require additional covered entity data beyond what is necessary. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Recommendations: - national standardized data schema and reason code sets - centralized clearinghouse submission with automated completeness validation - strict minimum necessary data; prohibit extra manufacturer data requests - automate reporting and provide template formats to reduce manual work - require HRSA to publish aggregate performance metrics and compliance actions d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. Potential benefits: - standardized documentation may improve audit defensibility, - consistent denial codes and metrics can identify systemic issues, - improved duplicate discount certainty could reduce disputes and manufacturer restrictions (if manufacturers accept the model). Whether benefits outweigh costs depends on: - true administrative burden, - payment reliability, - denial/dispute behavior, - whether cash flow risks are mitigated through enforceable rules. For a statewide safety-net AMC like UAMS, benefits are unlikely to outweigh costs unless payment is reliably timely, denials are tightly constrained, and the system is highly automated with administrative offsets.
HRSA-2026-0001-0066Labette County Medical Center2026-03-11T04:00Z11,884 chars
Please accept our comments against the 340B Rebate Model Pilot Program. March 4, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Labette County Medical Center, a sole community rural hospital located in Parsons, Kansas, we appreciate the opportunity to comment on the Department of Health and Human Services Request for Information regarding a 340B Rebate Model Pilot Program. Labette County Medical Center serves a large rural region of Southeast Kansas where access to healthcare services is limited. Our hospital provides essential services to patients who would otherwise need to travel long distances to receive care. Like many rural hospitals, we rely heavily on the 340B Programs upfront discount structure to stretch scarce resources and maintain access to essential services for our community. Rural hospitals operate under uniquely fragile financial conditions. Thin operating margins, a high percentage of Medicare and Medicaid patients, workforce shortages, and increasing supply costs create an environment where even modest policy changes can have disproportionate impacts. For hospitals like ours, the 340B Program is not simply a financial toolit is a lifeline that helps sustain services our community depends on. Administrative Costs Labette County Medical Center processed approximately 10,992 340B transactions during the most recent fiscal year. Current administrative costs associated with maintaining compliance include: Third-party processors: $167,901.94 annually Program staffing: $67,000 annually Compliance auditing: $16,000 annually IT support and reporting infrastructure: $12,562 annually Under a rebate model, we anticipate significant increases in administrative burden. IT costs would likely double due to enhanced reporting requirements. Staffing costs would also double to approximately $134,000 annually due to the need to track rebateeligible drugs, submit claims, reconcile payments, and manage manufacturer disputes. Staffing Impacts Implementation of a rebate model would require doubling our current staffing dedicated to 340B program administration. These additional personnel would be responsible for rebate submission, reconciliation, dispute resolution, and expanded compliance reporting. These positions would be permanent roles due to the ongoing administrative demands of the program. Systems and Infrastructure Our pharmacy and information technology systems were designed around the existing upfront discount model. A rebate system would require significant system redesign, including new reporting capabilities and expanded data extraction from multiple hospital systems. These system changes would require both startup development costs and ongoing maintenance expenses. Data Collection Burdens Currently, Labette County Medical Center uses thirdparty vendors to assist with 340B compliance tracking, reconciliation, and auditing. A rebate model would require additional pharmacy and medical claims data that are not currently captured in formats readily available for submission to manufacturers. Much of this data would likely require manual extraction from different systems, increasing administrative workload and risk of error. Cash Flow Impacts Cash flow stability is critically important for rural hospitals. Under the current model, we pay our drug wholesaler within approximately 15 days. A rebate model would require our hospital to float approximately $205,000 in drug purchasing costs every 10 days while waiting for rebate payments from manufacturers. This delay would place significant strain on our financial resources and could disrupt our ability to maintain consistent drug purchasing schedules. Impact on Rural Healthcare Access The financial pressures already facing rural hospitals are substantial. In recent years, restrictions and changes to the 340B Program have already reduced our savings by approximately 80 percent or a negative ($5,000,000) economic impact. Additional administrative costs and financial delays associated with a rebate model would further erode the resources we rely on to sustain patient care. 340B savings support critical healthcare services in rural communities. Reductions in those savings threaten services such as rural health clinic access, care for uninsured and underinsured patients, workforce recruitment, and community health programs. For many patients in Southeast Kansas, our hospital represents the only accessible source of healthcare within a reasonable distance. Reliance on the Upfront Discount Model For more than three decades, the 340B Program has functioned through an upfront discount mechanism. Hospitals like ours built our operational systems, staffing structures, and financial planning around this model. Transitioning to a rebate structure would impose significant operational burdens on covered entities. Conclusion For these reasons, Labette County Medical Center respectfully urges HRSA to reconsider implementation of a 340B rebate model. The additional administrative complexity, staffing requirements, system modifications, and financial strain would disproportionately harm rural hospitals and the patients we serve. Instead, HRSA should consider alternative approaches such as neutral thirdparty clearinghouses to address manufacturer concerns while preserving the integrity and sustainability of the 340B Program. We appreciate the opportunity to provide these comments and welcome continued dialogue on policies that protect access to healthcare in rural America. Sincerely, Tracy Gilmore Brian A. Williams 340B Specialist President and CEO Labette County Medical Center bwilliams@labettehealth.com tgilmore@labettehealth.com 620-820-5371 March 4, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Labette County Medical Center, a sole community rural hospital located in Parsons, Kansas, we appreciate the opportunity to comment on the Department of Health and Human Services Request for Information regarding a 340B Rebate Model Pilot Program. Labette County Medical Center serves a large rural region of Southeast Kansas where access to healthcare services is limited. Our hospital provides essential services to patients who would otherwise need to travel long distances to receive care. Like many rural hospitals, we rely heavily on the 340B Programs upfront discount structure to stretch scarce resources and maintain access to essential services for our community. Rural hospitals operate under uniquely fragile financial conditions. Thin operating margins, a high percentage of Medicare and Medicaid patients, workforce shortages, and increasing supply costs create an environment where even modest policy changes can have disproportionate impacts. For hospitals like ours, the 340B Program is not simply a financial toolit is a lifeline that helps sustain services our community depends on. Administrative Costs Labette County Medical Center processed approximately 10,992 340B transactions during the most recent fiscal year. Current administrative costs associated with maintaining compliance include: Third-party processors: $167,901.94 annually Program staffing: $67,000 annually Compliance auditing: $16,000 annually IT support and reporting infrastructure: $12,562 annually Under a rebate model, we anticipate significant increases in administrative burden. IT costs would likely double due to enhanced reporting requirements. Staffing costs would also double to approximately $134,000 annually due to the need to track rebateeligible drugs, submit claims, reconcile payments, and manage manufacturer disputes. Staffing Impacts Implementation of a rebate model would require doubling our current staffing dedicated to 340B program administration. These additional personnel would be responsible for rebate submission, reconciliation, dispute resolution, and expanded compliance reporting. These positions would be permanent roles due to the ongoing administrative demands of the program. Systems and Infrastructure Our pharmacy and information technology systems were designed around the existing upfront discount model. A rebate system would require significant system redesign, including new reporting capabilities and expanded data extraction from multiple hospital systems. These system changes would require both startup development costs and ongoing maintenance expenses. Data Collection Burdens Currently, Labette County Medical Center uses thirdparty vendors to assist with 340B compliance tracking, reconciliation, and auditing. A rebate model would require additional pharmacy and medical claims data that are not currently captured in formats readily available for submission to manufacturers. Much of this data would likely require manual extraction from different systems, increasing administrative workload and risk of error. Cash Flow Impacts Cash flow stability is critically important for rural hospitals. Under the current model, we pay our drug wholesaler within approximately 15 days. A rebate model would require our hospital to float approximately $205,000 in drug purchasing costs every 10 days while waiting for rebate payments from manufacturers. This delay would place significant strain on our financial resources and could disrupt our ability to maintain consistent drug purchasing schedules. Impact on Rural Healthcare Access The financial pressures already facing rural hospitals are substantial. In recent years, restrictions and changes to the 340B Program have already reduced our savings by approximately 80 percent or a negative ($5,000,000) economic impact. Additional administrative costs and financial delays associated with a rebate model would further erode the resources we rely on to sustain patient care. 340B savings support critical healthcare services in rural communities. Reductions in those savings threaten services such as rural health clinic access, care for uninsured and underinsured patients, workforce recruitment, and community health programs. For many patients in Southeast Kansas, our hospital represents the only accessible source of healthcare within a reasonable distance. Reliance on the Upfront Discount Model For more than three decades, the 340B Program has functioned through an upfront discount mechanism. Hospitals like ours built our operational systems, staffing structures, and financial planning around this model. Transitioning to a rebate structure would impose significant operational burdens on covered entities. Conclusion For these reasons, Labette County Medical Center respectfully urges HRSA to reconsider implementation of a 340B rebate model. The additional administrative complexity, staffing requirements, system modifications, and financial strain would disproportionately harm rural hospitals and the patients we serve. Instead, HRSA should consider alternative approaches such as neutral thirdparty clearinghouses to address manufacturer concerns while preserving the integrity and sustainability of the 340B Program. We appreciate the opportunity to provide these comments and welcome continued dialogue on policies that protect access to healthcare in rural America. Sincerely, Tracy Gilmore Brian A. Williams 340B Specialist President and CEO Labette County Medical Center bwilliams@labettehealth.com tgilmore@labettehealth.com 620-820-5371
HRSA-2026-0001-0067Madison Valley Medical Center2026-03-12T04:00Z3,067 chars
Dear HRSA, Thank you for the opportunity to comment on the proposed rebate model for the 340B Drug Pricing Program. As the CEO of a small rural hospital, I would like to express significant concern about the potential unintended consequences this proposal could have on rural providers and the communities we serve. The proposed rebate structure would create substantial financial challenges for small hospitals. Under the current model, hospitals are able to acquire medications at the discounted 340B price at the point of purchase. Requiring hospitals to first purchase drugs at full market price and then seek reimbursement through a rebate process would force small facilities like ours to carry a significant upfront financial burden. For rural hospitals operating with extremely thin margins and limited cash reserves, advancing large sums to pharmaceutical manufacturers could place serious strain on operating capital and jeopardize financial stability. In addition to the financial burden, the rebate approach would introduce considerable administrative complexity. Small rural hospitals typically operate with lean administrative teams. Implementing a rebate tracking and reconciliation system would require new processes, additional staffing, and increased compliance oversight. These administrative costs would divert limited resources away from patient care and essential hospital operations. Most concerning is the potential impact on patient access to care. The 340B program plays a critical role in allowing rural hospitals to maintain services that would otherwise be financially unsustainable. If hospitals are forced to absorb significant upfront drug costs and additional administrative expenses, many will be compelled to reduce services, delay investments in patient care, or reduce staffing levels. In some cases, these pressures could contribute to hospital closures in rural communities that already have limited healthcare access. The rebate model also threatens the ability of small hospitals to continue providing uncompensated and undercompensated care. Many rural facilities rely on the financial support generated through the current 340B structure to subsidize services for uninsured and underinsured patients. Disruptions to this funding mechanism would directly affect the most vulnerable populations in our communities. For rural hospitals, the 340B program is not simply a purchasing mechanismit is an essential support that helps sustain access to care. Policies that increase financial risk, administrative burden, and operational uncertainty could have far-reaching consequences for rural healthcare delivery. I respectfully urge HRSA to carefully consider the disproportionate impact that a rebate-based model would have on small and rural hospitals and to maintain a structure that preserves stability, access to medications, and the financial viability of rural healthcare providers. Thank you for your consideration. Sincerely, Allen S. Rohrback, Jr. Chief Executive Officer Madison Valley Medical Center Ennis, MT 59729
HRSA-2026-0001-0068Steven Case · Sidney, MT, United States2026-03-12T04:00Z2,504 chars
340B Rebate Model Pilot Program If this rebate model were to be implemented, it would require all 340b facilities to make up front payments for the 25 drugs and then request a rebate from the manufacturer. This is an additional administrative burden but also facilities would be required to carry these costs until reimbursement is received from the manufacturer. The 340B program seems to be not well understood as far as from a legal or a decision maker perspective. By definition, the 340B Program enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The manufacturers that participate in Medicaid have agreed to provide discounted medications to covered entities as discounted prices. The reason that these definitions are so relevant are obvious, adding levels of administration and delays in payment, drug acquisition, or upfront cash expenditures are not viable options for front-line entities trying to care for patients at a grass roots level. This rebate program will CERTAINLY cause, at the minimum, a loss of critical services such as oncology, obstetrics, surgical services, and outpatient clinic referral services among many others - and will likely cause the complete closure of many small health systems that serve to create a refuge in areas suffering from healthcare drought. The patients that rely solely on critical access hospitals, disproportionate share centers, children's hospitals, etc. are numerous and are just as important as any patient that receives care at large institutions and academic medical centers. The personal touch, empathy, and kindness are unmatched at the institutions mentioned above as well as the second -to-none care provided by the physicians, nurses, pharmacists, and ancillary staff that work around the clock with minimal staff to keep these patients healthy. The mere thought of implementing a program that appears designed to break the back of the 340B program seems like such a poorly conceived process that I am stunned that it has gained any traction at all. If duplicate discounts are the issue, ramp up efforts to identify these situations and stop them. Making the entire program come into question to prevent the acts of a few bad players should not even make it to committee. Please reconsider all of the patients that will be impacted as well as all of us that bleed along with our patients out here on the front lines.
HRSA-2026-0001-0069MCR Health, Inc.2026-03-13T04:00Z2,819 chars
Re: HRSA RFI Potential Use of Rebates to Effectuate the 340B Ceiling Price On behalf of MCR Health, Inc (MCR), a federally qualified health center serving to improve the health care of the most vulnerable populations, the opportunity to respond to HRSAs Request for Information regarding a potential rebate model under the 340B Drug Pricing Program is appreciated. MCR is one of the leading healthcare providers of primary care, specialty services and behavioral health in the three counties where we are located. The patients served are located in both rural and urban communities. A significant number of our patients are low income, uninsured and underinsured, leaving them with limited options to receive and pay for much-needed healthcare. It is critical for the patients we serve to have access to affordable medications to avoid negative health outcomes. The impact of proposed rebate model would negatively impact MCRs and other community health centers ability to continue to provide the needed medication to the most vulnerable populations by: Increasing the estimated annual 340B cost of rebate pilot drugs to community health centers. Increasing the estimated annual wholesale acquisition cost of rebate pilot drugs to community health centers. Increasing the number of business days which a community health center will need to cover expense pending receipt of rebate without large discretionary cash reserves. Additional need for staffing required for claims processing, data submission, reconciliation, audits. Incurred costs associated with upgrading or purchasing a new technology system to monitor payment and rejections of pharmaceuticals. The uncertainty of rebate dollars will impact the cost plus model used for the uninsured patient population. The lack of information on dispute resolution may delay payment. In addition to the negative fiscal impact to community health centers and its patients, the prescribing habits would likely change as community health centers are forced to change their medication formulary if this system is implemented. This would mean CHANGING the patients current medication (that would be on the rebate program), to another medication not on the rebate program. This medication could be LESS EFFECTIVE than their current medication. This could lead to less compliance, decreased outcomes, and possible increase in hospitalizations. The current upfront discount model provides predictability and immediate purchasing power. A rebate system introduces uncertainty into drug availability and threatens continuity of care. We respectfully urge HRSA to carefully consider the resulting impact this proposed rebate model will have on the most vulnerable populations served and if the rebate program moves forward, exclude community health centers.
HRSA-2026-0001-0070Job Creators Network2026-03-13T04:00Z3,210 chars
See attached file(s) March 13, 2026 Administrator Thomas Engels Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: RFI on 340B Rebate Model Pilot Program Administrator Engels, The 340B Drug Pricing Program is well-intentioned, but weak government oversight has allowed it to balloon into an expensive, bureaucratic quagmire. Its unchecked growth and soaring expenditures are driving up healthcare and prescription drug costs across the boardfinancial strain that small businesses and patients are ultimately left to absorb. The rebate model pilot program at question is a step in the right direction that will help to tame this out-of-control federal initiative. Creating a system of after-the-fact rebates for 340B hospitals as opposed to up-front discounts will cut down on program abuse and encourage transparency. Its a win-win scenario. Low-income Americans will continue to have access to cheaper medicines as program waste is reduced. The oversight and transparency is sorely needed. Since the programs inception, the number of 340B eligible hospitals has exploded by 60-fold while spending on prescription drugs through the initiative has risen sharply. In just 12 years, 340B drug purchases have climbed by an annual average of 19 percentamounting to an increase of more than $35 billion over that period. The acceleration begs the question: Why are so many medical institutions jumping into bed with Uncle Sam? A lack of transparency and federal oversight has left a gaping loophole for hospitals to take advantage of. These organizations have the opportunity to access discounted drugs but subsequently sell them at marked-up pricesleaving room to make a quick buck, or million, from the government-sanctioned scheme. Tellingly, rather than helping to curb costs for low- income patients, a 2025 study from Magnolia Market Access finds that one-third of 340B savings are directed to hospital financial portfolios. That aligns with a 2025 analysis from my organization, the Job Creators Network (JCN), that reveals hospitals participating in the 340B program are holding billions of dollars in offshore accounts. An examination of tax records finds that roughly 50 institutions across six states have more than $17 billion stashed in places ranging from the Caribbean to Eastern Europe. American companies operating in the free market canand shouldcapitalize on opportunities to better position themselves financially. These types of incentives are what drive economic growth and innovation. But, at the same time, policymakers have a responsibility to ensure that government programs dont unintentionally create a counterproductive mess that strains the healthcare economyharming small businesses and patients in the process. Implementing and enforcing the 340B Rebate Model Pilot Program is a sound administrative step that Congress should build upon. Doing so would help ensure that Main Street is no longer saddled with the hidden costs of a government health program that has veered miles off course. Respectfully submitted, Alfredo Ortiz Chief Executive Officer Job Creators Network
HRSA-2026-0001-0071Pacific Research Institute2026-03-13T04:00Z5,144 chars
Please see the attached comment. March 13, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Subject: Request for Information: 340B Rebate Model Pilot Program, Docket No. HRSA-2026-03042 Dear Director Britton, We're writing in response to HRSA's request for information regarding the potential use of rebates in the 340B Drug Pricing Program (Docket No. HRSA-2026-03042). Our organization, the Pacific Research Institute, is a California-based, national non-profit committed to promoting freedom, opportunity, and personal responsibility for all individuals in the United States by advancing free-market policy solutions. In our decades of work as health policy scholars, we have followed the evolution of 340B closely. The policy, which was enacted in 1992, was conceived as a relatively small safety-net program aimed at helping low-income and underserved patients gain access to affordable medicines. Years of lax oversight and enforcement, however, have allowed the 340B program to grow exponentially. In 2024, 340B covered entities purchased $81.4 billion in drugs through the program -- up from just $6.6 billion in 2010. Today, 340B largely serves as a profit center for over 14,000 covered entities around the country. The vast majority of 340B-enrolled hospitals provide lower-than-average levels of charity care. A rebate model would bring much-needed transparency and accountability to the program and return it to its original mission. And for that reason, we strongly support it. The pilot program will reduce the number of duplicate discounts -- instances in which manufacturers offer upfront discounts to covered entities, and then later also give rebates to insurers like Medicaid. By 2021, the value of duplicate discounts was estimated to be as high as $25 billion -- or about a quarter of all 340B sales that year. These duplications are banned by HRSA, at least where Medicaid rebates are involved. But that prohibition has been difficult to enforce due to widespread opacity concerning 340B cash flows, and specifically a dearth of claims-level data for 340B covered entities. Under a rebate model, this would no longer be the case, as covered entities would be required to provide claims-level data to drug manufacturers before receiving a rebate. That information would enable P.O. Box 60485 Pasadena, CA 91116 (415) 989-0833 www.pacificresearch.org companies to determine which pricing framework applies to each claim -- whether a Medicaid rebate, a 340B discount, or a Maximum Fair Price (MFP) under the Medicare Drug Price Negotiation Program -- thereby helping prevent duplicate discounts. Any new burdens such a model might create for covered entities, meanwhile, would be minimal. Rebates are already a common tool for providing hospitals with access to reduced-price medicines through programs like Medicaid. As a result, adopting a rebate model in 340B will require little adjustment on the part of covered entities. We were encouraged to see that the revised RFI indicates the potential pilot would include drugs subject to the Medicare Drug Price Negotiation Program in Initial Price Applicability Years (IPAY) 2026 and 2027. Taken together, these two cohorts represent 25 drugs and expand on the scope of the original, now-withdrawn proposal, which was restricted to only the first 10 drugs selected for IPAY 2026. However, the rebate model should not stop there. Limiting the model to still just a handful of medicines will allow duplicate discounts and other abuses to continue unchecked throughout much of 340B. This concern is particularly acute as the Medicare Drug Price Negotiation Program takes effect, introducing MFPs that may overlap with existing 340B discounts. Without a clear mechanism to distinguish which pricing applies to a given claim, the risk of duplicate discounts will only grow. Given how ubiquitous rebates are in other federal health programs -- and how dramatically such a reform promises to fortify the program's integrity -- including all medicines in the rebate model would make far more sense. To avoid further exploitation of the 340B program, it's also essential that any rebate model apply to all covered entities equally. Any attempt to provide special exemptions for specific covered entities will only weaken the reform's impact. If properly designed and implemented, a 340B rebate model would bring much-needed transparency, accountability, and integrity to one of the country's most abused healthcare programs. We strongly urge you to pursue a 340B Rebate Model Pilot Program. And we thank you for this opportunity to share our thoughts. Sincerely, Sally C. Pipes President, CEO, and Thomas W. Smith Fellow in Health Care Policy Pacific Research Institute Wayne Winegarden Sr. Fellow in Business & Economics, and Director of the Center for Medical Economics Pacific Research Institute P.O. Box 60485 Pasadena, CA 91116 (415) 989-0833 www.pacificresearch.org
HRSA-2026-0001-0072Mason District Hospital2026-03-12T04:00Z5,193 chars
See attached file(s) Mason District Hospital 03-12-2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Mason District Hospital appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Mason District Hospital urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Jeremiah Vance Director of Pharmacy Mason District Hospital Mason District Hospital 03-12-2026 Re: HRSA Request for Information on a Potential 340B Rebate Model To Whom It May Concern: Mason District Hospital appreciates the opportunity to comment on HRSAs RFI regarding a potential 340B rebate model. We strongly oppose any rebatebased framework and urge HRSA not to pursue a rebate pilot in any form. 1. Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the programs mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the programs safetynet purpose. 2. CashFlow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for highcost specialty drugs. Even modest delays would create: Material cashflow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead Systemwide error rates The existing upfront discount model is the only approach that ensures predictable, verifiable pricing at the point of sale. 4. The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHSs prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safetynet providers. 5. No Evidence Suggests a Rebate Model Can Be Implemented Without Harming SafetyNet Providers HRSAs RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unmet. For these reasons, Mason District Hospital urges HRSA to reject any 340B rebate model and maintain the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the programs statutory mission. Sincerely, Jeremiah Vance Director of Pharmacy Mason District Hospital
HRSA-2026-0001-0073Equitas Health2026-03-12T04:00Z10,901 chars
Please see the attached comment from Equitas Health. 1 March 12, 2026 Submitted via www.regulations.gov1 Administrator Thomas J. Engels Director Chantelle Britton Office of Pharmacy Affairs Health Resources and Services Administration (HRSA) US Dept. of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Feedback on the Request for Information for the 340B Rebate Model Pilot Program (ATTN: HRSA-2026-03042) Dear Administrator Engels and Director Britton, Equitas Health is a federally qualified health center look-alike (FQHC look-alike) and one of the largest LGBTQ+ and HIV/AIDS serving healthcare organizations in the country. Each year, we serve tens of thousands of patients in Ohio, Texas, Kentucky, and West Virginia, and since 1984, we have been working to advance care for all. Our mission is to be the gateway to good health for those at risk of or affected by HIV; for the lesbian, gay, bisexual, transgender, and queer/questioning (LGBTQ+) community; and for those seeking a welcoming healthcare home. In doing so, we offer primary and specialized medical care, pharmacy services, dentistry, mental health and recovery services, HIV/STI prevention and treatment services, Ryan White HIV case management, overall care navigation, and a number of community health initiatives.2 In fall 2025, we provided feedback on the original proposal for Health Resources and Services Administrations (HRSAs) proposed 340B rebate model pilot program, and as a covered entity of the 340B Drug Pricing Program, we appreciate the additional opportunity to provide feedback on HRSAs new request for information (RFI) related to the proposed 340B rebate model pilot program, particularly since we remain deeply concerned about the creation of such a program. Overview the 340B Rebate Model Pilot Program As discussed in our public comment from fall 2025, HRSAs 340B rebate model pilot program as originally designed was limited to ten drugs and their associated manufacturers, and as you know, the ten drugs were subject to the 2026 price caps set under the Inflation Reduction Act 1 Document prepared by Rhea Debussy, PhD (she/her), Director of External Affairs with support from Nick Saltsman, PharmD, RPh, AAHIVP (he/him), Chief Pharmacy Officer at Equitas Health. Document reviewed by Candace Janidlo (she/her), Legislative Affairs Manager, and Tim Wilson, Esq. (he/him), Associate General Counsel at Equitas Health. 2 https://equitashealth.com/about-us/ 2 (IRA). The ten drugs and manufacturers approved for the original pilot program included the following: 1) Eliquis of Bristol Myers Squibb; 2) Enbrel of Immunex Corporation; 3) Entresto of Novartis Pharmaceutical Corporation; 4) Farxiga of Astra Zeneca; 5) Imbruvica of Pharmacyclics; 6) Januvia of Merck, Sharp, & Dohme; 7) Jardiance of Boehringer Ingelheim; 8) Novolog (and related formulations) of Novo Nordisk, Inc.; 9) Stelara of Janssen Biotech, Inc.; and 10) Xarelto of Janssen Pharmaceuticals.3 As previously designed, HRSAs 340B rebate model pilot program would allow covered entities to order through our existing supply chain, but wholesalers would sell said medication at the higher wholesale acquisition cost, rather than the lower 340B price point. This would have required covered entities, including community health centers, Ryan White clinics, and others, to float the higher cost, submit a rebate request to the manufacturer, and obtain rebate approval from the manufacturer, prior to obtaining the savings for their patients. In the updated RFI, the proposal for a 340B rebate model pilot program does not mention being restricted to the ten drugs, which many covered entities find concerning. Ongoing Concerns About the 340B Rebate Model Pilot Program Like many other community health centers and Ryan White clinics, our agency remains deeply concerned about HRSAs proposed 340B rebate model pilot program, and we are deeply concerned that the updated RFI seems to indicate that the program may be extended beyond the original drugs described in fall 2025. Below, we have provided some additional details about our concerns, based upon the specific sections and questions noted in the updated RFI from HRSA. Costs to Covered Entities: Regarding our current administrative costs under the upfront 340B discount, we retain 5 full-time employees (FTEs) on our auditing team, while also retaining an additional 4 FTEs for front-line focused work. Under the proposed 340B rebate model, we estimate an exponential rise in the administrative costs related to this program, and specifically, we would need to expand our auditing team by an additional 2 to 3 FTEs and 2 more FTEs for our front-line focused work. Further, the system changes would require dedicated personnel from our finance team, which would require an additional 2 FTEs in that unit. In short, we would need to expand from our current staffing of 9 FTEs to 15 to 16 FTEs, which means our staffing costs alone would rise by an estimated 40%. Should the rebate model be implemented, staffing would not be the only area of increased costs; we would also incur additional costs for upgrades to our auditing software and workflows to reconcile rebates for 340B eligible claims. Payment Timing and Potential Cash Flow Impacts for Covered Entities: As mentioned in our public comment from fall 2025, covered entities, like Equitas Health, would be required to purchase approved medications for wholesale acquisition costs, rather than the discounted 340B price point. For some medications, these difference between these costs are dramatically more expensive, and requiring covered entities to float this cost can have an adverse impact on the revenue streams and fiscal health of those organizations. Relatedly, this can ultimately impact the services funded by 340B-generated savings that are provided to patients. Reviewing some of our recent data, our 340B eligible drug costs after the discount for a single month was $5.2 million; the costs of these drugs, at 3 https://www.hrsa.gov/opa/340b-model-pilot-program 3 a wholesale rate (i.e. the required purchase price under this proposed model) would be 35% to 45% higher, meaning that we would estimate a cash flow issue of roughly $1.82 million to $2.34 million per month. While we appreciate that HRSA intends to mandate prompt payment within 10 days, the reality is that this model because of the administrative burdens for drug manufacturers to validate that there are no duplicate discounts will likely require closer to 1 month to issue payment, which further exacerbates the cash flow issues for covered entities like community health centers. Rebate Denials: As noted above, we are concerned about the impact of cash flow issues, and we are also deeply concerned that rebate denials will become an issue due to the increased administrative burdens for both covered entities and drug manufacturers alike. While we appreciate HRSAs interest in learning about recommended guardrails for such a rebate model program, Equitas Health strongly recommends that HRSA halts the implementation of such a rebate model program entirely, as we are not able to recommend enough guardrails to mitigate our deep concerns and the impacts that they will have on our patients. Data Collection by Covered Entities: As HRSA knows, many covered entities particularly community health centers and Ryan White clinics like Equitas Health already report data to the federal government. Our concern for additional data collection and reporting to drug manufacturers is that many contract pharmacies which are often used to increase access to care for patients in rural settings may have increased difficulties in collecting and reporting such data to manufacturers. For these contract pharmacies to perform this additional workflow, they would likely require additional staffing, system upgrades, and the like, which would increase overhead costs that may then be passed along to patients. In short, our concern is not about reporting data to HRSA, as we already do that; rather, our concern is that additional data collection, particularly from contract pharmacies, may increase costs, which are then passed along to patients who already struggle to make ends meet. Efforts to Avoid Duplicate Discounts: Simply put, Equitas Health follows all statutory and regulatory requirements in an effort to avoid duplicate discounts as mandated by both HRSA and the state of Ohio. In this regard, the rebate model program is trying to fix a problem that does not exist. Required Reporting: We do not have any additional insights to add in this regard. As previously mentioned, Equitas Health strongly recommends that HRSA halts the implementation of such a rebate model program entirely, as we are not able to recommend enough guardrails to mitigate our deep concerns and the impacts that they will have on our patients. 340B Program Integrity and Other Potential Benefits of a 340B Rebate Model Program: As we noted in fall 2025, we are concerned about the collection of 340B claims data under this proposal, as this can lead to discriminatory pricing for covered entities and their approved contract pharmacies. Instead, we continue to strongly urge HRSA to create a neutral clearinghouse model. To maintain the integrity of the 340B program and the savings 4 that it provides to covered entities and their patients, this is a more appropriate method for guarding against duplicate discounts and diversion, which further ensures the long-term success and integrity of the program. Overall Policy Recommendations With this in mind, Equitas Health continues to recommend the following policy actions to the Office of Pharmacy Affairs of HRSA: 1) Establish a neutral 340B clearinghouse, which will ease covered entities concerns about the potential for discriminatory pricing from manufacturers; 2) Solicit continued feedback from key stakeholders including community health centers and Ryan White clinics before launching any 340B rebate model program; and 3) Halt the implementation of such a rebate model program at this time, as we are not able to recommend enough guardrails to mitigate our deep concerns and the impacts that they will have on our patients. Concluding Remarks We greatly appreciate the opportunity to provide continued feedback on the Health Resources and Services Administrations (HRSAs) proposed 340B rebate model program, particularly since we are deeply concerned about the creation of such a program. Should you have any questions about our comments, please feel free to Rhea Debussy, PhD (she/her), Director of External Affairs at Equitas Health via email at info@equitashealth.com or via phone at (833)-378-4827.
HRSA-2026-0001-0074McCurtain Memorial Hospital2026-03-12T04:00Z30,598 chars
See attached file(s) Mccurtain Memorial Hopsital 3/12/26 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Due to our transition to a new 340B third-party software platform, we are unable to reliably extract the total number of 340B transactions processed during our most recent fiscal year from the legacy system. We can supplement this information if historical data become available. The fact that a software transition prevents easy retrieval of historical transaction data also illustrates the operational fragility of adding another claims-based reporting and reconciliation layer to 340B operations for smaller covered entities. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. Our current direct and allocated 340B administrative cost is approximately $160,800 annually. This includes approximately $12,000 per year for Verity split-billing services, $22,800 per year for contract pharmacy administration for one contract pharmacy, $78,000 in allocated Drug Room Supervisor salary, $36,000 per year in allocated pharmacist oversight time, and $12,000 per year, in estimated hospital administration/financial compliance oversight. A $5,000 annual external audit as well as a $250/month cash card. This estimate does not include ad hoc IT support, external audit costs, legal review, or the opportunity cost of redirecting limited staff from other operational responsibilities. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. The primary cost drivers are third-party administrator fees, staffing, contract pharmacy oversight, external audits, IT systems, compliance activities, and labor hours needed for eligibility review, split-billing oversight, replenishment review, reconciliation, reporting, and internal monitoring. For a rural critical access hospital, staffing is a particularly significant cost driver because the same limited group of employees must perform both ongoing operational work and 340B compliance oversight. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Rebate Model Pilot Program, distinguishing between one-time startup costs and ongoing costs. We estimate that a potential 340B Rebate Model Pilot Program would impose at least $50,000 in incremental administrative and operational cost in the first year, and total impact could be higher if the cost of an added full-time employee must be fully loaded into the model. Startup costs would include workflow redesign, report development, system configuration, testing, and staff training. Ongoing costs would include claims identification, data submission, reconciliation, denial management, audit support, follow-up with manufacturers, and continuous monitoring. We believe this estimate is conservative. In HRSAs February 2026 proposed ICR, the agency estimated that covered entities could be required to submit claims data 52 times per year with an average burden of 5 hours per response, underscoring that recurring reporting burden alone would be material even before adding local IT, vendor, and staffing expense. ii. Describe the methodology and assumptions used to develop these estimates. Our estimate was developed using estimated hourly wage rates and the anticipated time that pharmacy, compliance, finance, and IT staff would need to devote to new rebate-model functions. We assumed the organization would need to identify affected claims after dispense, generate new reports, submit data in required formats, reconcile submissions to purchases and payments, investigate exceptions, address denials and appeals, retain supporting documentation for audit purposes, and educate staff on revised workflows. We also assumed that current 340B responsibilities would continue and would not be reduced simply because some drugs move to a rebate model. iii. Specify the activities or functions these incremental costs would cover and what effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. These incremental costs would cover claims processing, data extraction and submission, reconciliation, denial review and appeal, audit support, EHR optimization, report building, policy and procedure updates, staff education, and manufacturer communication. Moving some drugs to a rebate model would not meaningfully reduce our existing administrative costs under the upfront 340B discount model. Instead, it would add another layer of work on top of our current 340B compliance obligations. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? We do not see a feasible way to structure a rebate model so that it imposes no cost on our organization. At most, costs could be partially offset if manufacturers or HRSA funded all required interfaces, report development, vendor programming, onboarding, training, reconciliation tools, and audit support, and also paid interest or penalties on late rebates. Any offset should be quantified using documented internal labor hours, loaded wage rates, vendor invoices, IT build costs, consulting invoices, and unpaid or delayed rebate balances. Even with those measures, internal staff burden and opportunity cost would remain. v. Comment on the impact of these incremental costs under your current operations. Under our current operations, these additional costs would directly call into question the feasibility of the program. We are a rural critical access hospital with limited resources. Additional administrative expense reduces the resources available for patient care, pharmacy support, and other core functions. At a certain point, the rebate model risks making continued participation operationally impractical. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation would require additional full-time employees or would cause current full-time employees to reallocate work hours from medical care to perform administrative functions. Yes. Implementation would require additional help and would also force current staff to reallocate work hours away from existing operational and patient-care-support responsibilities to perform administrative functions such as data submission, reconciliation, denial follow-up, and compliance tracking. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We anticipate needing at least one additional full-time employee, and this role would likely be permanent, not temporary, because the work would be ongoing. This individual would oversee rebate submission workflows, reconciliation, manufacturer communication, denial tracking and appeal, audit readiness, report review, and coordination among pharmacy, finance, compliance, and IT. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required. A rebate model would require new or modified reports, secure claims-data extraction and submission processes, reconciliation dashboards, denial tracking tools, and interfaces among our EHR/pharmacy systems, our third-party 340B software, and any manufacturer or third-party rebate platform. We would also need logic to identify selected drugs, map dispenses to required claim fields, and retain supporting documentation. Even creating the necessary report set has already proven to be difficult in our environment. ii. Provide estimated costs for system development, procurement, maintenance, or integration and specify whether such costs would be one-time or recurring. We expect both one-time and recurring costs. One-time costs would include report development, build, testing, and implementation. Recurring costs would include IT maintenance, vendor modification fees, staff time, and repeated rework needed to respond to continual changes proposed by pharmaceutical companies. Because requirements are unlikely to remain static, these recurring costs are likely to be substantial. e. Other Anticipated Costs or Impacts i. Identify any additional costs not otherwise captured above. Additional costs would include recurring consulting services, legal review, staff training, change-management activities, and independent audit support. Consulting costs in particular are likely to recur because covered entities will need help adapting to continual manufacturer-driven changes. ii. Identify any organization-specific factors that could impact your organizations ability to participate. Our organization is a rural critical access hospital with limited financial and administrative resources, limited local 340B expertise, and a lean staffing model. Because we operate in a cost-based reimbursement environment, we have much less ability than larger systems to absorb new compliance, staffing, and IT expense. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. The rebate model could materially reduce patient access to drugs if it makes 340B participation operationally or financially unsustainable for our organization. If administrative burden and payment uncertainty erode the value of 340B savings, the result could be reduced pharmacy support, reduced services, and diminished access for rural patients who already have limited alternatives. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing would have a major effect on our cash flow. As a critical access hospital, cash flow is essential to our daily operations. We currently maintain only about 30 days cash on hand. Any delay between drug acquisition and rebate receipt would require us to carry higher upfront inventory costs without assurance of prompt or full repayment. That creates real operational risk, especially for high-cost drugs. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Our 340B wholesaler purchases are paid under our standard wholesaler contract terms and routine accounts-payable cycle. At present, our understanding is that 340B and non-340B drugs generally move through similar wholesaler payment processes, although finance/accounts payable should confirm whether any contract-specific differences apply. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We are not currently aware of any prompt-pay incentives or discounts that materially affect our operations. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. 30- 45 Days. c. Describe whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts. Yes. A rebate-based payment model would materially alter payment timing compared to current wholesaler arrangements. Under the current model, wholesaler invoices are predictable and paid on a routine schedule. Under a rebate model, payment would depend on a series of additional steps: claim identification, data extraction, data submission, manufacturer review, possible denial or requests for additional information, and final payment. Each added step introduces timing risk and uncertainty. Alternative arrangements such as provisional payments, advance funding, escrow, or shorter true-up cycles could mitigate some of this impact, but they would not fully eliminate the working-capital burden. d. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to a requirement to pay or deny rebates within 10 calendar days of data submission. To ensure compliance with a 10-day standard, the program would need strong enforcement mechanisms. Those should include standardized electronic submission and remittance processes; mandatory timestamping of claims received, adjudicated, paid, or denied; automatic interest and penalties for late payment; deemed approval if the manufacturer does not respond within the required timeframe; HRSA review of payment-timeliness data; and suspension or revocation of participation for repeated noncompliance. Without rigorous oversight, manufacturers will have a financial incentive to delay payment or increase denials. This is consistent with HRSAs earlier pilot criteria, which contemplated payment or documented denial within 10 days and manufacturer reporting on claim delays and denials. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cash-flow impacts for covered entities. Additional protections should include severe penalties for untimely or incomplete payments, automatic interest on overdue amounts, standardized dispute-resolution timelines, and an independent review or arbitration process that is much faster than existing lengthy appeal mechanisms. Another option would be a manufacturer-funded clearinghouse or escrow arrangement that allows covered entities to receive payment quickly while disputes are resolved separately. CMS already allows dispensing entities using the MTF to self-identify anticipated material cash-flow issues, which underscores that cash-flow accommodations are a recognized operational need in adjacent federal drug-pricing implementation. 3. Rebate Denials a. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Yes. More specific guardrails are necessary. Denials should be limited to clearly enumerated, objectively verifiable reasons such as a documented duplicate payment to another covered entity on the same claim, a confirmed duplicate with another federal price concession, or a material data error that the covered entity has an opportunity to correct. Denials should not be based on vague or generalized allegations of diversion or compliance concerns. The program should also require software-based tracking of denials and severe penalties for inappropriate denials. This is especially important because HRSAs earlier notice stated that rebates should not be denied based on diversion or Medicaid duplicate-discount concerns and that denial decisions should include specific rationale and documentation. b. Describe what standard process elements should be required for rebate denials, including template forms and timeline for adjudications of improper denials. Rebate denials should follow a standardized national process across all manufacturers. Required elements should include a uniform denial form, standard denial codes, clear instructions for correction or appeal, required supporting documentation, an initial determination within a fixed timeframe, and a rapid appeal determination within a second fixed timeframe. A practical framework would be a 10-day initial adjudication, 10 days for covered-entity correction or appeal, and a final determination within 30 days. If the manufacturer fails to provide the required documentation, the denial should be overturned by default. Standardization is essential to avoid requiring covered entities to manage multiple manufacturer-specific denial systems. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used. Our organization currently collects and maintains 340B participation data through a combination of internal pharmacy dispensing data, purchasing data, billing data, EHR records, wholesaler information, and third-party administrator data. We rely on a third-party vendor to assist with core 340B functions, including split-billing and contract pharmacy administration. We also maintain internal records, policies, and supporting documentation for compliance, audit readiness, and program oversight. b. Identify current measures to ensure data accuracy, completeness, and consistency. Current measures include validation checks, replenishment and purchase-to-dispense reconciliations, contract pharmacy oversight, internal review of exception reports, maintenance of written policies and procedures, and internal and external audit activities. These controls align with HRSAs longstanding expectations that covered entities maintain accurate records, prevent duplicate discounts and diversion, and conduct regular oversight of contract pharmacies. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Yes. A rebate model would materially change our data collection activities. The change would not be limited to a one-time build. One-time work would include report development, workflow redesign, staff training, and testing. Ongoing work would include claims-level submissions, validation, tracking adjustments and reversals, reconciling submissions to payments, addressing denials, and retaining additional documentation. Even where the underlying data already exists in some form, it is not currently assembled in a single, standardized, manufacturer-ready format for continuous rebate processing. HRSAs earlier notice contemplated submission windows, real-time reconciliation, and ongoing claims-based reporting, all of which point to continuingnot one-timeadministrative effort. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program; whether such data elements are currently available; the source(s) for such data; and whether such data is already being furnished to existing third parties. For pharmacy claims, the minimum data set should start with the core fields HRSA previously listed for a rebate pilot: date of service, date prescribed, Rx number, fill number, 11-digit NDC, quantity dispensed, prescriber ID, service provider ID, 340B ID, BIN, and PCN. Any additional fields should be limited to what is truly necessary for reconciliation, such as payer type, claim control number, reversal/adjustment status, and whether the claim originated from an in-house or contract pharmacy. For medical claims, the minimum necessary data set should include date of service, date of administration, HCPCS/CPT code, NDC or crosswalk to NDC, units administered, claim or encounter number, ordering/administering provider identifier, site of care, 340B ID, payer type, revenue code, modifier if used, and reversal or adjustment information. Many of these fields are available from our EHR, pharmacy, billing, and vendor systems, but not all are readily extractable in a uniform format without custom report development. At contract pharmacies, some data are already furnished to our third-party vendor. In-house medical and pharmacy data are generally available internally, but not currently packaged for routine submission to manufacturers. e. Provide recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate privacy and security concerns. Privacy and security guardrails should require the minimum necessary data, de-identification or tokenization wherever possible, encryption in transit and at rest, role-based access controls, full audit logs, strict data retention limits, a clear prohibition on secondary use of data, and prompt breach-notification requirements. Business associate agreements, data-use agreements, and downstream subcontractor obligations should be required wherever third parties handle the data. Covered entities should not be required to provide patient-identifying information unless there is a clear legal necessity and no less intrusive alternative. These safeguards are consistent with HRSAs prior expectation that any platform collect only the minimum necessary data and maintain HIPAA-consistent protections. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organizations practices to prevent duplicate discounts focused on maintaining accurate Medicaid carve-in/carve-out settings, maintaining accurate records, using our 340B software and internal controls to identify eligible 340B dispenses, and reconciling dispensing, purchasing, and billing data. We also relied on written policies, third-party oversight, and audit activity to help prevent duplicate discounts and document compliance. This approach is consistent with HRSAs duplicate-discount guidance, which requires covered entities to maintain mechanisms to prevent duplicate discounts and to keep Medicaid Exclusion File information accurate. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP. Since January 1, 2026, the MDPNP has added another layer of complexity for selected drugs. Operationally, our organization has opted out of MDPNP inclusion due to our 3rd party administrators software not being ready to upload to beacon. c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Our organization has opted out of the MDPNPs inclusion. d. Identify any challenges encountered in identifying potential duplicate discounts under 340B and CMS payment programs. The main challenges include data availability across multiple systems, inconsistent claim identifiers, timing mismatches between dispense and replenishment, limitations in report functionality, difficulty identifying the correct drug and payer status at the right point in the workflow, and limited staff time to investigate exceptions. Medical claims present additional complexity because NDC capture, units, and encounter data may not be stored the same way as pharmacy claims. CMS has acknowledged that 340B replenishment models and point-of-sale identification can be difficult to reconcile, that covered entities may have to navigate a wide variety of manufacturer methodologies, and that most 340B claims are processed through TPAs after dispense. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. At minimum, manufacturers would need standardized data elements that can reliably identify the covered entity, the specific claim or encounter, the drug dispensed or administered, the quantity or units, the dispensing or service date, the site of care or pharmacy, payer type, and whether the claim was adjusted or reversed. A rebate model could serve as an additional or alternative source for some of these data elements only if the program uses one standardized format and one submission process. If it instead creates separate manufacturer-specific submission rules, it will increase burden without reliably solving duplicate-discount identification. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? Manufacturers should be required to submit data to HRSA at least monthly. Required data should include, by drug and by covered entity, units purchased, units rebated, dollar amounts owed and paid, average days to payment, pending claims, denial counts and denial reasons, appeal counts and outcomes, reversal and adjustment activity, system outages, dispute volumes, and any instances of late or incomplete payment. HRSAs proposed ICR already contemplates monthly manufacturer reporting to support compliance monitoring and transparency, so monthly reporting should be treated as the minimum cadence. b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should publicly share aggregate manufacturer data at least quarterly. Public reporting should include total claims submitted, total amounts owed and paid, payment timeliness, denial rates, denial reasons, dispute volumes, appeal outcomes, and audit findings. The public data should be aggregated enough to protect confidential pricing and patient information, but detailed enough to show whether manufacturers are complying consistently and whether the pilot is creating access or cash-flow problems for covered entities. That type of reporting would align with HRSAs stated goal of improving transparency and informing future policy decisions. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Manufacturer reporting should be monthly throughout the full duration of any pilot, with at least quarterly public reporting and a comprehensive annual evaluation. Reporting must continue long enough to measure operational burden, cash-flow effects, payment delays, denial trends, appeals, audit findings, and patient-access impacts over time. A short or one-time reporting window would not adequately reflect the true burden of an ongoing rebate model. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A rebate pilot would likely weaken, not strengthen, 340B program integrity unless it is highly standardized, tightly policed, and carefully limited in scope. Under the current upfront discount model, covered entities can align purchasing, dispensing, and compliance controls around established workflows. A rebate model introduces more steps, more handoffs, more opportunities for delay and denial, and more room for inconsistent manufacturer interpretation. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs? Only to a limited extent, and only if the data elements, submission process, and adjudication rules are standardized. Otherwise, the burden is shifted to covered entities without a reliable guarantee that duplicate discounts will actually be prevented more accurately. ii. Reduce diversion or improper claims? Not materially. Rebate processing is a financing mechanism, not a substitute for established program-integrity oversight. Existing audit, monitoring, and compliance mechanisms are the more appropriate tools for diversion and improper claims. HRSA already requires auditable records and internal controls, and its prior notice stated that diversion and Medicaid duplicate-discount concerns should be addressed through existing audit and ADR mechanisms rather than routine rebate denials. iii. Increase pricing transparency across stakeholders? Only if HRSA requires standardized reporting, uniform remittance information, and public disclosure of payment timeliness, denial rates, and methodology. Without those protections, transparency could actually worsen because covered entities would be forced to navigate multiple opaque manufacturer processes. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. HRSA should use one national data standard, one submission route, one set of denial codes, one appeal timeline, minimum necessary data elements, automated reconciliation tools, and consistent public reporting. Covered entities should be allowed to rely on existing third-party administrator data feeds rather than build entirely new manual workflows. Manufacturers should bear interface and platform costs rather than passing them on to covered entities, consistent with HRSAs earlier pilot criteria. d. Describe any other potential benefits of a 340B Rebate Model Pilot Program and to what extent these benefits outweigh any potential costs. The only meaningful potential benefits of a rebate pilot would be improved post-dispense traceability, more structured reporting, and possibly a clearer audit trail for selected drugs. Even those benefits depend on strong standardization and oversight. For a rural critical access hospital like ours, those potential benefits do not outweigh the likely costs: added administrative burden, cash-flow strain, more staffing and IT expense, more denials and disputes, and the risk that the program becomes infeasible to maintain. In our setting, the rebate model threatens access more than it improves transparency.
HRSA-2026-0001-0075Jefferson Community Health & Life2026-03-16T04:00Z8,384 chars
See attached file(s) JEFFERSON COMMUNITY le4# Health & Life The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf ofJefferson Community Health & Life in Fairbury, Nebraska, we appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly believe HRSA should not implement a rebate-based model. The current upfront discount mechanism has allowed hospitals like ours to stretch scarce federal resources and provide essential services to rural communities. Jefferson Community Health & Life is a nonprofit rural health system serving residents ofJefferson County and the surrounding region. Our organization operates a 17-bed acute care hospital, a 40-bed long-term care facility, a rural health clinic, a home health agency, and a community wellness center. As a small rural provider, our financial margins are limited, and the savings generated through the 340B program help us maintain services that would otherwise be difficult to sustain. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require substantial new administrative processes. Under the current system, our pharmacy and finance teams rely on established workflows with wholesalers and third-party administrators to ensure compliance with the 340B program. A rebate model would require our staff to track claims, submit rebate requests, reconcile payments, and resolve disputes with manufacturers. These processes would require additional staff time and potentially additional personnel. For small rural hospitals like ours, even modest increases in administrative burden can significantly impact already limited staffing resources. Vendor partners and third-party administrators would also likely need to modify systems to support a rebate process, resulting in additional costs for system development, data integration, and ongoing maintenance. PO Box 277 Fairbury, NE 68352 4O2-7z9-3351 JCHealthandLife.org Staffing Impacts Jefferson Community Health & Life does not currently employ staff dedicated solely to managing manufacturer rebates. Implementing such a system would require staff to divert time from patient-centered responsibilities to perform administrative functions related to claims submission, reconciliation, and manufacturer communications. HRSA's estimate that these processes would require only minimal additional hours significantly underestimates the complexity of implementing and maintaining a rebate-based program, particularly if as many as 25 drugs are included in the pilot. Systems and Infrastructure Our current technological systems and pharmacy operations are designed around the longstanding upfront discount model. Implementing a rebate program would require modifications to pharmacy systems, billing systems, and potentially our electronic health record to capture and transmit claims-level data to manufacturers or third-party platforms. These changes would likely require vendor assistance and ongoing support costs that place an additional financial burden on rural hospitals. Cash Flow Impacts Under the current 340B structure, discounts are applied at the time of purchase, which helps maintain stable cash flow for hospitals. A rebate model would require Jefferson Community Health & Life to purchase medications at full price and wait for reimbursement from manufacturers. Even if rebates were issued quickly, this change would force our hospital to temporarily absorb potentially significant drug costs. For rural hospitals operating with limited margins, delays in reimbursementeven short onescan create financial strain and may limit our ability to maintain adequate drug inventories for patients. Impact on Patient Care and Community Services Savings generated through the 340B program help Jefferson Community Health & Life support numerous programs and services that directly benefit our community. Many of these programs operate at a financial loss but are essential for maintaining access to care in rural Nebraska. For example, Jefferson Community Health & Life subsidizes several critical services: Our home health agency allows patients to receive skilled care in their homes rather than traveling long distances for treatment. In fiscal year 2024, this service generated $189,237 in revenue but incurred $506,157 in expenses, resulting in a net loss of $316,920 that the hospital absorbed to maintain access to care. Our Gardenside long-term care facility provides a home for up to 40 individuals who require skilled or long-term care. In fiscal year 2024, this service operated at a loss of $861,474, which the hospital absorbed to ensure local residents can remain close to their families and community. Jefferson Community Health & Life also operates the Burkley Fitness Center as a community wellness resource. In fiscal year 2024, the hospital subsidized approximately $49,156 to keep this preventive health resource accessible and affordable for local residents. Beyond these services, Jefferson Community Health & Life provides numerous community health programs and financial assistance. In fiscal year 2024, the hospital provided approximately $66,000 in charity care to patients meeting federal poverty guidelines and wrote off more than $682,000 in bad debt for patients unable to pay for services. We also provide reduced-cost health screenings and community health education programs. In fiscal year 2024, our screening programs reached more than 563 individuals and provided an estimated $44,000 in community benefit through reduced-cost services. Community education programs reached more than 1,000 individuals through health presentations, support groups, and outreach activities. Jefferson Community Health & Life also invests in the future health care workforce by hosting medical, physician assistant, nurse practitioner, and pharmacy students for rural clinical rotations, as well as supporting scholarships for students pursuing careers in health care. These programs are critical to maintaining the health and vitality of our rural community. Savings generated through the 340B program help make these programs possible. If a rebate model reduces the value or predictability of 340B savings, hospitals like ours may be forced to reconsider how we allocate limited resources, potentially reducing community health programs, preventive services, and other initiatives that benefit our patients. Reliance on the Current Upfront Discount Model Since the inception of the 340B program, covered entities have relied on the upfront discount model to structure their pharmacy operations and financial planning. Jefferson Community Health & Life has built its internal systems, vendor relationships, and financial projections around this structure. Changing to a rebate model now would disrupt these longstanding operational systems and impose new costs and administrative burdens that hospitals never anticipated when they joined the 340B program. Alternative Approaches If HRSA believes additional mechanisms are needed to address duplicate discount concerns, we encourage the agency to explore less burdensome alternatives, such as the use of a neutral third-party clearinghouse. Such approaches could address program integrity issues without imposing significant operational and financial burdens on covered entities. Conclusion For all of these reasons, Jefferson Community Health & Life respectfully urges HRSA not to implement a rebate model for the 340B program. The current upfront discount structure has enabled hospitals like ours to stretch limited resources and provide critical services to our community. A rebate model would create unnecessary administrative burdens, financial uncertainty, and potential reductions in services for the patients who rely on us. Thank you for the opportunity to provide comments on this important issue. Sincerely, Chance Klasek Chief Financial Officer Jefferson Community Health & Life Fairbury, Nebraska
HRSA-2026-0001-0076Terry Wilcox · Vienna, VA, United States2026-03-14T04:00Z953 chars
Re: Docket No. HRSA-2026-03042 340B Rebate Model Pilot Program To Whom It May Concern: I am writing in response to the Request for Information on the proposed 340B rebate model pilot. As a patient/caregiver, I believe the 340B program should clearly and measurably benefit patients. Too often, patients are not told when a medication was purchased at a 340B discount, and there is little transparency into how those savings are used. If HRSA moves forward with a rebate model, it should prioritize transparency, accountability, and patient benefit. Any new structure should make it clear whether savings are reaching patients and helping reduce out-of-pocket costs. Patients deserve to know when discounts are applied and whether those savings are lowering their financial burden. Strong oversight and reporting will help ensure the program works to the benefit of Patients Thank you for the opportunity to provide input. Sincerely, Harlow Wilcox
HRSA-2026-0001-0077(no commenter metadata)2026-03-13T04:00Z3,716 chars
Comments of the Confederated Tribes of the Colville Reservation The Confederated Tribes of the Colville Reservation P.O. Box 150, Nespelem, WA 99155 (509) 634-2200 FAX: (509) 634-4116 March 12, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Exemption Indian Health Care Providers from HRSAs 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: The Confederated Tribes of the Coville Reservation (CCT or the Colville Tribes) respectfully requests an exemption for Tribal Health Care Providers and Indian Health Care Providers from the Health Resources and Services Administrations (HRSA) 340B Rebate Model Pilot Program (Program). This same request has also been made by both Department of Health and Human Services Secretarys Tribal Advisory Committee and the Centers for Medicaid and Medicare Services Tribal Technical Advisory Group. In 2025, the HRSA proposed the pilot Program where Tribal Health Care Providers and Indian Health Care Providers would be required to pay the full price for medications upfront, with rebates issued later. Tribal Health Care Providers and Indian Health Care Providers are operating on constricted budgets and often do not have the ability to pay the full retail price of medication, which can be 100 times current 340B prices. Unless an exemption is granted, the Program will further strain the already limited cash flows of Tribal Health Care Providers and Indian Health Care Providers. The Program mandates a financial burden on Tribal Health Care Providers and Indian Health Care Providers by requiring providers wait for manufacturer rebates and compromising their purchasing power for necessary medications to sustain current levels of care. Also, many tribes use the savings from 340B pricing (the difference between the discounted purchase price and the insurance reimbursement) to fund services that are not fully covered by the Indian Health Service, like mental health services and traditional healing practices. Waiting for reimbursements could compromise tribal providers ability to offer these critical services. For Tribal Health Care Providers and Indian Health Care Providers, the inclusion of diabetes medications (Jardiance, Januvia, Farxiga, and Insulin) in the Program reimbursement list is significant, as diabetes rates in many tribal communities are higher than the national average. Docusign Envelope ID: 516C4544-F145-4F73-974C-DCD77C18EDDF Page 2 of 2 2 Additionally, the Colville Tribes is concerned that itand other Tribal Health Care Providers and Indian Health Care Providersmay need to hire additional staff or reassign existing healthcare workers to manage new data submission and dispute resolution processes with manufacturers. This may require updates to their IT systems that may not be equipped to handle the data reporting mandated by the Program. Finally, the Administration should defend tribes from federal administrative burdens and duplicative purchases that deplete already thin margin healthcare budgets. For all of these reasons, the Colville Tribes respectfully request that HRSA exempt Tribal Health Care Providers and Indian Health Care Providers from the Program. If you have any questions, please reach out to me directly or to Natasha John at Natasha.John@PowersLaw.com. Thank you for your consideration of this request. Sincerely, Jarred-Michael Erickson, Chairman Confederated Tribes of the Colville Reservation Docusign Envelope ID: 516C4544-F145-4F73-974C-DCD77C18EDDF
HRSA-2026-0001-0078Roger Lacoy · Des Moines, IA, United States2026-03-17T04:00Z2,442 chars
To Whom It May Concern: As a Patient Board Member of PHC Inc., a Des Moines, Iowa-based health care organization, I am submitting these formal comments in response to HRSA's Request for Information regarding the use of rebate models to affect the 340B Program ceiling price. These comments reflect the concerns of the clients we serve and the dedicated staff who provide that care. PHC Inc. strongly opposes the proposed rebate model. Under this structure, covered entities would be required to purchase medications at full retail cost upfront and subsequently submit prior authorization-like requests to receive 340B pricing retroactively. This model imposes a severe and unsustainable financial burden on organizations like ours particularly those serving vulnerable populations such as clients living with HIV/AIDS. Our concerns are threefold: First, the financial strain is immediate and significant. Requiring upfront payment at retail prices would threaten PHC Inc.'s operational and financial stability, diverting resources away from direct patient care. Second, reimbursement timelines are unreliable. Retroactive rebate processing is routinely slow and administratively complex. The cash flow disruption this creates is not merely an inconvenience it is an operational crisis for safety-net providers. Third, and most critically, clients like me will be harmed. Delays in reimbursement can directly translate into delays in medication access for patients who depend on timely, uninterrupted care. For individuals managing HIV/AIDS and other serious conditions, interruptions to medication regimens can have life-threatening consequences. The proposed 340B Pilot Program offers no operational benefit to covered entities such as PHC Inc. and introduces unnecessary administrative complexity that undermines the very purpose of the 340B Program to stretch scarce resources and expand access to care for underserved communities. We respectfully but firmly request that HRSA exempt organizations serving HIV/AIDS clients and similarly vulnerable populations from any rebate-based pilot program, and that HRSA reaffirm its commitment to the 340B Program's original mission of supporting safety-net providers. Thank you for the opportunity to submit these comments. PHC Inc. welcomes further dialogue on this critical issue. Respectfully submitted, Roger A. Lacoy Board Member, PHC Inc. Des Moines, Iowa Rodgerlacoy@gmail.com
HRSA-2026-0001-0079Good Samaritan Health Center2026-03-17T04:00Z7,662 chars
See attached file(s) To Whom It May Concern regarding Federal Register Doc. No. 2026-03042 Good Samaritan Health Center of Cobb appreciates the opportunity to comment on the proposed implementation of the 340B Rebate Model Pilot Program. Good Samaritan serves to outreach our local Cobb community by offering quality, affordable health care and medications to the surrounding population. The majority of Good Sam patients do not have insurance or other health care coverage and pay out of pocket for visits and medications. Good Samaritans primary focus is to provide necessary, life sustaining mediations to our patients at an affordable price. Good Samaritan does not receive any third- party reimbursements for medications purchased through the 340B program and strongly feels that this Pilot Program will greatly limit our ability to serve our community by imposing financial and administrative burden on our clinic. For the reasons listed below, Good Samaritan strongly opposes implementation of the 340B Rebate Model Pilot Program. 1. The Rebate Model hinders the purpose of 340B. 340B was established to allow covered entities to stretch scarce Federal resources to provide services within the community that might otherwise be unavailable to patients. Many FQHC clinics like Good Samaritan operate on very thin budgets and keep inventory supplies low in order to best meet patient needs. Shifting the financial burden to small clinics trying to best meet patient needs does not fulfill the intent of the 340B program. 2. The Rebate Model increases operating costs for small FQHC clinics, like Good Samaritan. Compliance with the rebate model will require many additional support hours to sustain. Limited and stretched healthcare staff would need training, additional work hours for entering claims, additional work hours for tracking submissions, additional work hours for reconciling claims, additional work hours for follow-up with rejected claims, additional burden on administrative staff, and a diversion of clinical support time from patients. 3. The Rebate Model will put small FQHC clinics at a substantial financial risk when dispensing high- dollar, life sustaining medications. With any high- cost product, there will be a risk of claim denial and reimbursement denial. Clinics will be forced to choose whether purchasing and dispensing high dollar medications at market price, providing them to patients at a 340B price, and waiting for reimbursement determination and payment; can be undertaken without putting the clinic at significant financial risk. Clinics may be forced to reduce the medications available to their patients to avoid greater financial risk. Conditions, such as diabetes, are prevalent in underserved communities. Being able to provide better diabetes control by offering better, more costly diabetes medications IMPROVES patients outcomes and lives while also reducing the financial burden on communities due to reduced ER visits, hospitalizations, and comorbidities. 4. The Rebate Model does not address the core complaint of duplicate discounts. Covered entities already follow robust compliance and self-audit procedures. A rebate program may create more unintentional transparency issues by creating more complexity to the program. In conclusion, the 340B statute was designed to protect and strengthen HRSA clinics like Good Samaritan. The proposed rebate model shifts the risks, administrative burden, and oversight responsibility to the shoulders of small clinics like Good Sam; that are already operating on a thin budget with limited staffing. We respectfully urge HRSA to reject this 340B Rebate Model and protect covered entities like Good Samaritan. Thank you for the opportunity to comment on this matter and Good Sam appreciates the support of 340B. To Whom It May Concern regarding Federal Register Doc. No. 2026-03042 Good Samaritan Health Center of Cobb appreciates the opportunity to comment on the proposed implementation of the 340B Rebate Model Pilot Program. Good Samaritan serves to outreach our local Cobb community by offering quality, affordable health care and medications to the surrounding population. The majority of Good Sam patients do not have insurance or other health care coverage and pay out of pocket for visits and medications. Good Samaritans primary focus is to provide necessary, life sustaining mediations to our patients at an affordable price. Good Samaritan does not receive any third- party reimbursements for medications purchased through the 340B program and strongly feels that this Pilot Program will greatly limit our ability to serve our community by imposing financial and administrative burden on our clinic. For the reasons listed below, Good Samaritan strongly opposes implementation of the 340B Rebate Model Pilot Program. The Rebate Model hinders the purpose of 340B. 340B was established to allow covered entities to stretch scarce Federal resources to provide services within the community that might otherwise be unavailable to patients. Many FQHC clinics like Good Samaritan operate on very thin budgets and keep inventory supplies low in order to best meet patient needs. Shifting the financial burden to small clinics trying to best meet patient needs does not fulfill the intent of the 340B program. The Rebate Model increases operating costs for small FQHC clinics, like Good Samaritan. Compliance with the rebate model will require many additional support hours to sustain. Limited and stretched healthcare staff would need training, additional work hours for entering claims, additional work hours for tracking submissions, additional work hours for reconciling claims, additional work hours for follow-up with rejected claims, additional burden on administrative staff, and a diversion of clinical support time from patients. The Rebate Model will put small FQHC clinics at a substantial financial risk when dispensing high- dollar, life sustaining medications. With any high- cost product, there will be a risk of claim denial and reimbursement denial. Clinics will be forced to choose whether purchasing and dispensing high dollar medications at market price, providing them to patients at a 340B price, and waiting for reimbursement determination and payment; can be undertaken without putting the clinic at significant financial risk. Clinics may be forced to reduce the medications available to their patients to avoid greater financial risk. Conditions, such as diabetes, are prevalent in underserved communities. Being able to provide better diabetes control by offering better, more costly diabetes medications IMPROVES patients outcomes and lives while also reducing the financial burden on communities due to reduced ER visits, hospitalizations, and comorbidities. The Rebate Model does not address the core complaint of duplicate discounts. Covered entities already follow robust compliance and self-audit procedures. A rebate program may create more unintentional transparency issues by creating more complexity to the program. In conclusion, the 340B statute was designed to protect and strengthen HRSA clinics like Good Samaritan. The proposed rebate model shifts the risks, administrative burden, and oversight responsibility to the shoulders of small clinics like Good Sam; that are already operating on a thin budget with limited staffing. We respectfully urge HRSA to reject this 340B Rebate Model and protect covered entities like Good Samaritan. Thank you for the opportunity to comment on this matter and Good Sam appreciates the support of 340B.
HRSA-2026-0001-0080(no commenter metadata)2026-03-17T04:00Z9,171 chars
See Attached DoCusign Envelope ID: 52A4AB55-1258-4436-91D3-F928DD161BC2 St. Tammany HEALTH SYSTEM March 9, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of St. Tammany Parish Hospital Service District No. 1, d/b/a St. Tammany Health System ("STHS") in Covington, Louisiana, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on STHS that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism which STHS has relied on for years is the best way to fulfill that purpose of the 340B program. The RFI poses thirty (30) questions and encourages commenters to include supporting facts, research, and evidence in their responses. STHS has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that 1202 South Tyler Street 985.898.4000 main Covington, LA 70433 sttammany.health DocuSign Envelope ID: 52A4AB55-1258-4436-91D3-F92BDD161BC2 S St. Tammany HEALTH SYSTEM HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that STHS can spend on patient care and comprehensive health care services. Administrative Costs and Staffing Impacts Under a Potential 340B Rebate Program. Any rebate program would require STHS to spend significant sums on new administrative costs. When we chose to participate in the 340B program, STHS understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Although key elements of the final model remain undetermined, STHS currently lacks adequate staffing to support a rebate-based program. To effectively administer the rebate processincluding submission management, reconciliations, and handling any delays or denialsan additional 2.0 FTEs would be required. Furthermore, significant lead time would be necessary for recruiting and training these employees, especially given ongoing challenges in pharmacy hiring; several positions have remained unfilled for months due to a shortage of qualified candidates. STHS has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. While final pricing for required data feeds and mapping from our third-party administrators is still pending, we anticipate that these costs will exceed $100,000. Additional anticipated expenses include legal review to ensure 1202 South Tyler Street 985.898.4000 main Covington, LA 70433 sttammany.health Docusign Envelope ID: 52A4AB55-1258-4436-91D3-F928DD161BC2 C St. Tammany HEALTH SYSTEM compliance with rebate program requirements and, if necessary, the engagement of external consultants with expertise in rebate model implementation. All of these various costs and obligations accumulate over time. Our preliminary analysis indicates that ongoing annual incremental administrative and operational expenses are estimated to be between $340,000 and $950,000, which covers staffing, financial tracking, IT maintenance, reporting updates, vendor fees, and audit or consulting services. These expenditures are expected to rise further should the model's scope be expanded. Consequently, STHS will not be able to utilize 340B savings as efficiently and broadly as previously achieved with the upfront discount model. This change may impact the availability of resources and services for our patients and the community. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via 'rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. STHS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on STHS, HRSA should rely on those other options. Any other decision would 1202 South Tyler Street 985.898.4000 main Covington, LA 70433 sttammany.health Docusign Envelope ID: 52A4AB55-1258-4436-91D3-F928DD161BC2 St. Tammany HEALTH SYST impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, STHS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow STHS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Gratefully, -DocuSigned by: Jean Coffman -64F1B51CDCD0497 Joan M. Coffman, FACHE President & CEO 1202 South Tyler Street 985.898.4000 main Covington, LA 70433 sttammany.health
HRSA-2026-0001-0081TYLER HARLOW · Lynchburg, VA, United States2026-03-19T04:00Z1,942 chars
Thank you for opening this comment period and allowing me to speak. I am a Pharmacy Director for a Federally Qualified Health Center in central Virginia that employs over 250 people and serves over 24,OOO pts. Our pharmacy represents approximately 20% of our center's revenue, so anything that inflates our costs or delays savings will have a tremendous affect on our center's operations. As a nonprofit, we operate on a much tighter budget than the manufacturers and use that budget completely in our local community to improve the health and well-being of our neighbors. I won't speculate on how the manufacturers' budgets are utilized to improve my local community. Expanding the rebate model would force us to take funding away from current programs (free transportation, translation services, behavioral health services, free diabetic testing supplies, and others) in order to audit and reconcile rebate claims. This takes away from our mission to expand access to quality healthcare for all. I also have reservations about allowing the manufacturers to unilaterally select the Clearinghouse without input from anyone on our side. I have not been super satisfied with Beacon and feel like there are better alternatives in the market that would offer a better experience for pharmacy users. I agree with manufacturers that there needs to be better oversight on the 340B program but I don't believe this is the correct mechanism. I haven't seen evidence of diversion that this rebate model aims to correct. If the issue is how 340B savings are utilized by covered entities, this does nothing to address that. Our organization would be more than willing to walk representatives through our sites and explain how those savings are poured back into the community to uphold the spirit of the original legislation. I worry about the added stress put on our patients and local emergency room should our 340B safety net be compromised.
HRSA-2026-0001-0082Anthony DiGiorgio2026-03-19T04:00Z3,632 chars
I support moving forward with a carefully designed pilot. A rebate-based mechanism is not a cure-all, but it is a serious and reasonable attempt to address one of the 340B programs core defects: the lack of reliable, standardized, claims-level transparency around who received a 340B-priced drug, through what channel, and whether the transaction created unlawful duplication or diversion risk. The current model relies too heavily on opaque post hoc reconciliation across covered entities, contract pharmacies, third-party administrators, PBMs, Medicaid programs, and manufacturers. That is not a stable compliance architecture for a program of this size. Minnesotas first-in-the-nation reporting found at least $630 million in net 340B revenue in 2023, with roughly 80 percent going to the largest DSH hospitals, but the report also stated that it did not measure how the revenue was used or the extent to which patients benefited. It further found over $120 million in payments to contract pharmacies and third-party administrators, and emphasized that missing office-administered drug data likely made the topline figures a substantial underestimate. The overlap between 340B discounts and Medicaid rebates remains difficult to police, especially in managed care and contract-pharmacy settings. Interview-based work from Health Management Associates found that duplicate discounts remain a persistent problem, that their scope is hard to quantify, and that better claims-level data from covered entities is necessary. The report also found that contract pharmacies add another layer of complexity and that a more coordinated federal solution is likely needed. HRSA should make duplicate-discount prevention one of the pilots primary purposes, not an afterthought. The pilot should be integrated with the existing Medicaid Exclusion File, 340B claim modifiers where available, and a clear dispute process. Covered entities should not simply submit data into a void, and manufacturers should not be forced to guess whether claims are clean. If HRSA wants stakeholders to accept a rebate model, it needs to create a credible mechanism for de-duplication across Medicaid fee-for-service, Medicaid managed care, and any relevant inflation-rebate or negotiation-related claims streams. The absence of a reliable de-duplication method is one reason this issue keeps resurfacing. HRSA should publish aggregated results by covered-entity type, site type, pharmacy channel, and drug category. It should report approval and denial rates, average rebate lag, volume of identified duplicate claims, dispute outcomes, and the share of rebates associated with contract-pharmacy versus in-house activity. Without public reporting, the pilot will not resolve the broader credibility problem surrounding 340B. HRSA should use this pilot to force the program toward a more coherent principle: if the government is going to preserve a discount program this large, it should at least be able to say with confidence where the discount went, whether the right entity received it, whether the same claim triggered another rebate elsewhere, and whether patients were any better off because of it. Right now, too much of that remains uncertain. A rebate model will not solve every structural problem in 340B. But if HRSA designs the pilot around standardized claims-level data, enforceable de-duplication, prompt payment, contract-pharmacy oversight, and public reporting, it could provide something the program has long lacked: a real test of whether transparency and accountability can be introduced without undermining legitimate safety-net care.
HRSA-2026-0001-0083Windrose Health Network, Inc.2026-03-18T04:00Z4,544 chars
Dear Director Chantelle Britton: Windrose Health Network (WHN) is 4-site Community Health Center located in Central Indiana. In 2024, Windrose provided over 70,000 medical and BH visits to over 21,000 patients. Approximately 58% of our patients live at or below 100% of the FPL and 79% live at or below 150% of the FPL. Additionally, around 42% of our patients do not speak English and require interpreters for even simple tasks such as scheduling appointments or receiving test results. I am also pleased to note that WHN was a Gold Quality Award winner from HRSA in 2023 & 2024 and a Silver Quality Award winner in 2022 & 2025. Without the savings from the 340B Program, WHN would not be able to continue serving the same number of patients at the same high level of care that they currently receive. As you know, CHCs are the best, most innovative, and resilient part of our nations health system. For sixty years, CHCs have provided high-quality, comprehensive, affordable primary and preventive care. In addition to medical services, CHCs provide integrated dental, behavioral health, pharmacy, vision, and other health services to Americas most vulnerable, medically underserved communities in rural, urban, suburban, frontier, mountain, and island communities. Today, the health center workforce of 326,000 serves nearly 34 million people at over 17,000 locations, ensuring patients receive the care they need and pay what they can based on a sliding fee scale. Windrose Health Network strongly Urges HRSA To Exempt Community Health Centers from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to the core mission of Community Health Centers and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on health centers. Let me provide you with one single example of this impact - - WHN can presently purchase Jardiance, a very effective diabetic drug that is commonly prescribed for our diabetic patients - - and one that is in the Pilot Program - - for .30/script. The Wholesale Acquisition Cost of this drug is approximately $800. If our pharmacy was to fill only 25 Jardiance scripts per month (and we presently prescribe many more Jardiance scripts than 25 per month) our acquisition cost would increase from $7.50 to $20,000. This is one small example of one drug and 25 scripts per month. Applied to the entire 340B program, this would represent an astronomical cost increase to WHN that would disrupt our cashflows to the point where we may have to consider dropping out of the 340B Program. By requiring health centers to purchase medications at full price and wait for a rebate, this model would cause significant financial turmoil and directly impact CHCs ability to serve the 34 million patients who rely on us. The National Association for Community Health Centers (NACHC) data indicates that without discounted or free medications, a substantial portion of CHC patients, up to 3 million or more, would lose access to essential treatments. These patients often have chronic conditions like diabetes, heart disease, and behavioral health needs. They depend on the essential drugs included in the rebate pilot more than patients with any other conditions. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs health centers can afford to stock, directly contradicting the programs goal of increasing access to affordable medications. Since 90% of health center patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Windrose Health Network appreciates the opportunity to respond to this 340B rebate model pilot program and looks forward to continuing to engage with HRSA on this prominent issue.
HRSA-2026-0001-0084MANA, A National Latina Organization2026-03-18T04:00Z4,653 chars
See attached file(s) MANA, A National Latina Organization 1001 Connecticut Avenue NW Suite 730 Washington, DC 20036 www.hermana.org March 18, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Subject: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton, As president and CEO of MANA, A National Latina Organization that's committed to advancing health equity for Latinas and their families, I am grateful for the opportunity to comment on HRSA's Request for Information regarding a potential "340B Rebate Model Pilot Program." Congress created the 340B program to enable safety-net providers to better care for vulnerable patients -- including the medically underserved Latino communities we advocate for. Despite that worthy goal, the 340B program currently lacks transparency. As a result, it's impossible to determine whether, and to what extent, resources are reaching the patients who need them most. That's why MANA strongly supports any renewed efforts to implement a rebate-based pilot program. As we explained in our comment letter regarding the original, now- withdrawn pilot, moving from upfront discounts to a claims-based rebate structure would improve transparency and help address long-standing concerns regarding diversion and duplicate discounts. The 340B program has grown exponentially, from approximately 90 qualifying hospitals at its inception to more than 2,600 today. The increase in scale and complexity has made oversight more challenging. A rebate model would provide a stronger accountability framework while maintaining the program's core promise. Latinas experience higher rates of being uninsured, are more likely to serve as caregivers in multigenerational households, and suffer disproportionately from diseases such as obesity, diabetes, and chronic kidney disease. These are precisely the types of conditions that require consistent access to prescription therapies, and any consideration of a rebate model should be evaluated in light of whether it promotes access to these therapies. Leadership Service Education Advocacy MANA, A National Latina Organization 1001 Connecticut Avenue NW Suite 730 Washington, DC 20036 www.hermana.org Page 2 - 340B Rebate Model Pilot Program_MANA HRSA's previous rebate pilot applied only to the first 10 drugs selected for Medicare price negotiation. In the current revised pilot, we are pleased to see that HRSA included both the I-Pay 2026 and I-Pay 2027 drugs, bringing the total number of drugs in the pilot to 25. Including these additional drugs will allow HRSA to generate more reliable and representative data and transparency to better evaluate the rebate model across more therapies that treat chronic conditions disproportionately affecting Latino communities. If any rebate pilot proves successful in reducing waste and duplicate discounts -- as we believe it will -- HRSA ought to require that manufacturers provide 340B pricing on all drugs via these rebates, rather than upfront discounts. We also urge HRSA to not exempt particular covered entities from any new pilot. If certain covered entities are exempted, HRSA will be unable to determine whether observed outcomes reflect the rebate model itself or differences in participation. A full and consistent application of the rebate structure is essential to producing meaningful results. Of course, HRSA can and should offer additional administrative support, such as technical training and assistance, to federally qualified health centers and other smaller covered entities. MANA also encourages HRSA to establish clear evaluation criteria and publicly report findings at regular intervals. Claims-level reporting should capture patient coverage status, site of care, and geographic indicators such as ZIP code or county. These data points will allow HRSA to assess whether savings are truly reaching medically underserved communities and improving access for patients who face the greatest barriers to care. A new rebate pilot program could strengthen the integrity of the 340B program while serving the Latina community. MANA commends HRSA for renewing this effort and respectfully encourages the agency to include I-Pay 2026 and I-Pay 2027 drugs, require uniform participation without carve-outs, and implement robust evaluation and reporting standards. Sincerely, Amy L. Hinojosa President and CEO MANA, A National Latina Organization
HRSA-2026-0001-0085Jordan Valley Health2026-03-18T04:00Z11,796 chars
See attached file(s) Jordan Valley Health Comments on HRSA RFI: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Submitted via Regulations.gov March , 2026 I. Executive Summary Jordan Valley Health is a Federally Qualified Health Center (FQHC) that delivers comprehensive primary care, behavioral health, dental, and enabling services to medically underserved poputations across southern Missouri. For all of the reasons below, Jordan Valley Health respectfully requests that Federally Qualified Health Centers be exempted from this rulemaking. In 2025, Jordan Valley Health: Served 69,720 unique patients Provided 248,773 total visits Employed approximately 800 individuals Jordan Valley Health serves patients across southern Missouri, with clinic locations in Missouri's 4th and 7th Congressional Districts. Patients routinely travel from surrounding counties and neighboring congressional districts to access care at our facilities. The 340B Program is an essential component of our financial model, allowing us to stretch scarce federal resources to maintain access to medications and clinical services for patients regardless of abilityto pay. We appreciate HRSA's deliberate approach in issuingthis RFI. However, from the perspective of a community health centernot merely a pharmacythe shift from an upfront discount to a rebate-based model introduces material financial, operational, staffing, and patient-access risks that fundamentally threaten our ability to fulfill our statutory mission. Any 340B rebate model must be voluntary, narrowly scoped, manufacturer-funded, and demonstrably cash-neutral in real time for covered entities. Absent these protections, a rebate model would undermine patient access and the purpose of the 340B statute. II. Costs to Covered Entities 1.a. Current Administrative Costs Under the Upfront 340B Discount Jordan Valley Health currently manages 340B participation through a combination of internal staff and third-partyvendors. Administrative costs include: Program oversight and compliance Contract pharmacy administration Eligibility tracking and audits IT systems and claims reconciliation Legal and policy review These activities are already tightly staffed and funded through operating margins supported, in part, by upfront 340B savings. Key cost drivers today include: Pharmacy and compliance staff labor Contract pharmacy administration fees 340B split-billing and audit software External audit and legal support Importantly, the current upfront discount model does not require claim-level rebate submission, manufacturer adjudication processes, or accounts receivable management tied to realization of the ceiling price. 1.b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate model would introduce entirely new workflows not currently required under the upfront discount structure, including: Claim-level rebate submission and tracking Manufacturer-specific reconciliation processes Denial management and appeals Documentation retention and audit defense Expanded data reporting obligations Accounts receivable management associated with delayed rebate realization Updated Incremental Cost Scenario (Annualized) Cost Category Estimated Incremental Cost Additional 340B/vendor platform fees $75,000 - $125,000 Internal labor (pharmacy, finance, compliance) $100,000 - $180,000 Legal, policy, and audit support $30,000 $60,000 IT integration and data management $50,000 - $100,000 Total Estimated Incremental Cost $255,000 - $465,000 annually These costs would be recurring and unfunded. For a health center serving nearly 70,000 patients annually, these funds would otherwise support direct patient services. 1.c. Staffing Impacts Implementation of a rebate modelwould require either: Hiring additional administrative FTEs, or Reallocating existing clinical and operational staff away from patient care In either case, the impact is negative for access to care. Estimated staffing impact: 1.0-2.0 additional FTEs across pharmacy, finance, and compliance Permanent (not temporary), as rebate administration would be ongoing For community health centers already facing workforce shortages, this is not sustainable. 1.d. Systems and Infrastructure A rebate model would require: New or modified claims and data submission platforms Secure data exchanges with manufacturers Expanded audit and reporting capabilities Rebate tracking and receivable management systems These systems would require significant upfront investment and recurring maintenance costs, none of which improve clinical outcomes. 1.e. Other Anticipated Impacts A rebate model would also introduce: Increased legal and compliance risk Training costs across pharmacy, finance, and leadership Reduced ability to invest in enabling services (transportation, case management) Disproportionate harm to rural and resource-constrained health centers Jordan Valley Health serves rural and medically underserved populations across southern Missouri. Any instability or delay in 340B savings would directly affect medication affordability programs, behavioral health expansion, dental services, and other critical patient supports. III. Payment Timing and Cash Flow Impacts Cash flow risk represents the single greatest threat posed by a rebate-based model. Sample Cash Flow Scenario Current Model (Upfront Discount): Drug acquisition cost (340B): $60 Wholesaler payment due: Net 30 Predictable and budgeted expense Rebate Model: Drug acquisition cost (non-340B): $100 Rebate expected: $40 Timing uncertainty: 10+ days (or longer if denied or delayed) Impact: $40 per prescription tied up in receivables At scale: At 4,000 prescriptions/month: $160,000 in monthly cash exposure Nearly $2 million in annual working capital at risk For community health centers operating on thin margins, this level of liquidity risk is unacceptable. Even a nominal 10-day payment requirement does not eliminate denial risk, submission disputes, processing lag, or manufacturer variability. A rebate model effectively shifts short-term financing responsibility from manufacturers to safety-net providers. Recommendations If HRSA proceeds: Rebates must be pre-funded or escrowed Payments must be automatic, not contingent Interest penalties must apply for late payments Covered entities must not bear denial risk upfront IV. Rebate Denials Rebate denials must be rare, standardized, and transparent. We strongly recommend: Limiting denial reasons to documented duplicate discounts or diversion Mandatory standardized denial templates Defined appeal timelines HRSA oversight of unresolved disputes Manufacturers should not be permitted to use denials as a utilization or cost-containment mechanism. V. Data Collection and Privacy Community health centers already maintain robust data systems for 340B compliance. A rebate model would require expanded claims-level reporting and increased transmission of data to manufacturers, raising additional administrative burden and patient privacy concerns. HRSA should: Define a minimum required dataset Prohibit manufacturer-specific or proprietary data demands Require HIPAA-aligned safeguards and appropriate agreements Standardize reportingformats VI. Duplicate Discount Controls Are Already Effective Missouri's Medicaid program already employs robust, claims-level safeguards to prevent duplicate discounts underthe 340B program. Covered entities that elect to carve-in Medicaid are required to register with HRSA and be listed on the Medicaid Exclusion File usingtheir National Provider ldentifier (NPI) and MO HealthNet provider number. This system is specifically designed to identify 340B- participating providers and prevent duplicate discounts at the program level. At the point of service, 340B drugs must be identified on each claim using standardized submission clarification codes or modifiers. These claim-level identifiers allow the state to distinguish 340B drugs from non-340B drugs in real time and ensure that Medicaid rebates are not improperly collected on 340B-purchased drugs. Missouri enforces these requirements through audit and recoupment authority. Failure to properly identify 340B claims can result in rebate collection and audit penalties, creating strong incentives for compliance. These existing safeguards are actively implemented in Missouri today and demonstrate that duplicate discount prevention is alreadyfunctioning effectively at both the provider and state level. A rebate-based model does not meaningfully improve these protections and instead shifts additional administrative burden and financial risk onto covered entities. VII. Program Integrity and Net Assessment While we support program integrity and transparency, a rebate-based model: Increases administrative cost Introduces cash flow instability Diverts resources from patient care Provides no corresponding clinical benefit For a health center serving nearly 70,000 patients annually, the costs materially outweigh anytheoretical benefits. VIII. 340B Savings Directly Support Patient Care and Access 340B savings are not retained as marginthey are reinvested directly into patient care, access, and services that would otherwise be unavailable in medically underserved communities. At Jordan Valley Health, internal analysis shows that 340B savings are allocated across critical service categories, including: Approximately 23.75% supports preventive services such as screenings, nutrition support, and health education Approximately 17.25% supports chronic disease management, medication adherence, and clinical pharmacyservices Approximately 10.50% supports behavioral health services, including care for patients with substance use disorder and mental illness Approximately 20.00% supports maternal and prenatal services, including enhanced imaging and care coordination Approximately 9-10% supports capital investments, including maintaining facilities and expanding access points of care Additional 340B-supported activities include: Unreimbursed or under-reimbursed medical and dental services Rural access initiatives such as mobile clinics, telehealth, and transportation Workforce development, including residency programs and care team expansion A significant portion of these investments directly supports Medicaid, Medicare, and uninsured patients, as well as individuals with complex health and social needs. Any disruption in the timing or predictability of 340B savings-such as under a rebate- based modelwould directly reduce the ability of community health centers to sustain these services. Unlike larger health systems, community health centers rely on the upfront nature of 340B savings to fund ongoing operations and patient care. IX. Conclusion We urge HRSA to proceed with extreme caution. Any 340B rebate model must be: Voluntary for covered entities Narrowly scoped and time-limited Fully funded by manufacturers Cash-neutral in real time Designed to protect patient access above all else Absent these safeguards, a rebate-based approach risks undermining the statutory purpose of the 340B Program and weakening the nation's health care safety net. At a minimum, HRSA should delay inclusion of Federally Qualified Health Centers in any rebate-based model until operational, financial, and program integrity concerns are fully resolved. For all of the reasons above, Jordan Valley Health respectfully requests that Federally Qualified Health Centers be exempted from this rulemaking. dy Matthet-Stinson President I CEO
HRSA-2026-0001-0086Porter-Starke Services DBA Marram health Center2026-03-18T04:00Z10,051 chars
See attached file(s) On behalf of Porter-Starke Services DBA Marram Health Center, I appreciate the opportunity to provide feedback regarding the proposed implementation of a rebate model within the 340B Drug Pricing Program. We strongly oppose moving from the current upfront discount process to rebate models. These models will create significant administrative, operational, financial, and patient care risks that will undermine the intent of the program. The current 340B model provides clarity and efficiency through point-of-sale discounts. A rebate model would introduce needless administrative complexity, requiring covered entities to track, submit, reconcile, and appeal rebate claims across multiple manufacturers. This creates a disorganized, error prone system that shifts administrative burden excessively onto covered entities, many of which already operate with limited staffing and infrastructure. Additionally, variances in manufacturer rebate processing standards, timelines, and dispute resolution processes would create inconsistency and inefficiency across the program. Covered entities would be forced to navigate a multitude of requirements, increasing the likelihood of delays, denials, and compliance risk, which I believe is the primary driver for implementing the voucher/rebate model. The most immediate and significant concern is the unfavorable cash flow impact. Under a rebate model, covered entities would be required to purchase medications at full cost and await reimbursement. For providers operating on thin margins, this creates an unjust financial burden. This shift effectively transfers financial risk from manufacturers to covered entities. It requires providers to front substantial capital, with no guarantee of timely or complete reimbursement. Delays, disputes, or denials in rebate payments would directly impair funds, potentially forcing organizations to reduce services, limit drug lists, or delay medication acquisition. The rebate model introduces a fundamental misalignment of incentives. Manufacturers would be responsible for issuing payments that directly reduce their own revenue. There is no inherent mechanism ensuring timely, accurate, or complete rebate disbursement. Without strong, enforceable standards, and even with them, covered entities would bear the burden of monitoring and enforcing compliance. This creates a system where payment integrity depends on entities with a financial incentive to delay or reduce reimbursement. The 340B Program exists to expand access to medications for vulnerable populations. A rebate model undermines that. Cash flow constraints and administrative burdens may lead covered entities to limit inventory, reduce participation in certain drug classes, or delay dispensing. Ultimately, any disruption in financial stability translates directly into reduced patient care. The populations served by 340B entities are least able to absorb such disruptions. Covered entities have built care models, pharmacy operations, and patient assistance programs around the predictability of upfront 340B pricing. This reliance is both reasonable and necessary to sustain services for underserved populations. While statutes may allow for rebate or discount, the established implementation of upfront discounts has created a functional and stable system. Abruptly shifting to a rebate model would unnecessarily destabilize this system and compromise program efficiency. While HRSA notes the potential for rebate models to address duplicate discounts, these concerns can be more effectively managed within the existing framework through improved data sharing and enforcement procedures. A rebate model does not inherently eliminate duplicate discount risk; rather, it introduces additional layers where errors and variabilities may occur. Increased complexity rarely equates to increased integrity. If HRSA seeks to explore rebate mechanisms, any such effort should be extremely limited in scope and accompanied by strict safeguards, including but not limited to: Mandatory and standardized rebate timelines with automatic penalties for delays. Real time adjudication systems to prevent cash flow disruptions. Centralized administration to reduce variability amongst separate manufacturers. Building and implementing enforcement mechanisms to ensure compliance. However, even with these safeguards, a rebate model would still remain inferior to the current upfront discount structure. In conclusion, the proposed rebate model introduces significant monetary risk, staffing burdens, and operational uncertainty while offering no clear improvement over the existing system. Most importantly, it threatens the ability of covered entities to provide consistent access to medications for vulnerable populations. For these reasons, we strongly urge HRSA to maintain the current upfront discount model and not proceed with a rebate approach. Respectfully, James Welch, CCA Health Information Management Coordinator 340B Program Manager On behalf of Porter-Starke Services DBA Marram Health Center, I appreciate the opportunity to provide feedback regarding the proposed implementation of a rebate model within the 340B Drug Pricing Program. We strongly oppose moving from the current upfront discount process to rebate models. These models will create significant administrative, operational, financial, and patient care risks that will undermine the intent of the program. The current 340B model provides clarity and efficiency through point-of-sale discounts. A rebate model would introduce needless administrative complexity, requiring covered entities to track, submit, reconcile, and appeal rebate claims across multiple manufacturers. This creates a disorganized, error prone system that shifts administrative burden excessively onto covered entities, many of which already operate with limited staffing and infrastructure. Additionally, variances in manufacturer rebate processing standards, timelines, and dispute resolution processes would create inconsistency and inefficiency across the program. Covered entities would be forced to navigate a multitude of requirements, increasing the likelihood of delays, denials, and compliance risk, which I believe is the primary driver for implementing the voucher/rebate model. The most immediate and significant concern is the unfavorable cash flow impact. Under a rebate model, covered entities would be required to purchase medications at full cost and await reimbursement. For providers operating on thin margins, this creates an unjust financial burden. This shift effectively transfers financial risk from manufacturers to covered entities. It requires providers to front substantial capital, with no guarantee of timely or complete reimbursement. Delays, disputes, or denials in rebate payments would directly impair funds, potentially forcing organizations to reduce services, limit drug lists, or delay medication acquisition. The rebate model introduces a fundamental misalignment of incentives. Manufacturers would be responsible for issuing payments that directly reduce their own revenue. There is no inherent mechanism ensuring timely, accurate, or complete rebate disbursement. Without strong, enforceable standards, and even with them, covered entities would bear the burden of monitoring and enforcing compliance. This creates a system where payment integrity depends on entities with a financial incentive to delay or reduce reimbursement. The 340B Program exists to expand access to medications for vulnerable populations. A rebate model undermines that. Cash flow constraints and administrative burdens may lead covered entities to limit inventory, reduce participation in certain drug classes, or delay dispensing. Ultimately, any disruption in financial stability translates directly into reduced patient care. The populations served by 340B entities are least able to absorb such disruptions. Covered entities have built care models, pharmacy operations, and patient assistance programs around the predictability of upfront 340B pricing. This reliance is both reasonable and necessary to sustain services for underserved populations. While statutes may allow for rebate or discount, the established implementation of upfront discounts has created a functional and stable system. Abruptly shifting to a rebate model would unnecessarily destabilize this system and compromise program efficiency. While HRSA notes the potential for rebate models to address duplicate discounts, these concerns can be more effectively managed within the existing framework through improved data sharing and enforcement procedures. A rebate model does not inherently eliminate duplicate discount risk; rather, it introduces additional layers where errors and variabilities may occur. Increased complexity rarely equates to increased integrity. If HRSA seeks to explore rebate mechanisms, any such effort should be extremely limited in scope and accompanied by strict safeguards, including but not limited to: Mandatory and standardized rebate timelines with automatic penalties for delays. Real time adjudication systems to prevent cash flow disruptions. Centralized administration to reduce variability amongst separate manufacturers. Building and implementing enforcement mechanisms to ensure compliance. However, even with these safeguards, a rebate model would still remain inferior to the current upfront discount structure. In conclusion, the proposed rebate model introduces significant monetary risk, staffing burdens, and operational uncertainty while offering no clear improvement over the existing system. Most importantly, it threatens the ability of covered entities to provide consistent access to medications for vulnerable populations. For these reasons, we strongly urge HRSA to maintain the current upfront discount model and not proceed with a rebate approach. Respectfully, James Welch, CCA Health Information Management Coordinator 340B Program Manager
HRSA-2026-0001-0087(no commenter metadata)2026-03-18T04:00Z22,402 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Massac Memorial Hospital in Metropolis, IL we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Massac Memorial Hospital in Metropolis, IL that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Massac Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commentors to include supporting facts, research, and evidence in their responses. Massac Memorial Hospital in Metropolis, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs means more claims to submit, more rebates to track and reconcile, more money that we will need to float to the drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Massac Memorial Hospital can spend on patient care and comprehensive health services. Administrative Costs Under A Potential 340B Rebate Program: Any rebate program would require Massac Memorial Hospital in Metropolis, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Massac Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. We would have to pay an outside entity to help us extract the data needed from our EMR and put it into a format suitable for ESP. We already have staffing restraints on Information Systems Analysts and will have to outsource that knowledge and expertise to create a file for submission. This has been quoted at $2,500 just to create the file and extract the needed data fields from our EMR. Other cost drivers would be increased staffing. We currently go above and beyond to prevent any type of diversion with 340B claims. We currently review 100% of contract pharmacy claims. We can not fight for rebates and monitor the integrity of that process and continue to care for program integrity without additional staff. This would be an ongoing cost for this additional FTE. This would cost the hospital around $48,000 per year. These additional expenditures would cover claims processing, data submission, reconciliation of rebates, and additional compliance concerns unknown to us at this time. We will also have additional fees to our TPA to facilitate uploads of data. With the assumption that the consultant group we pay for an added layer of guidance and program integrity will increase as well. We would have to exclude these drugs from our split bill savings to our hospital because we would be paying out more money to manage the rebates than we receive in savings currently. All of the extra time, hiring, labor, training, education, and support take away from us doing what we are here to do. That is to take care of patients in our rural community. This added layer of burden will ultimately impact the patients we serve. Staffing Impacts Under a Potential 340B Rebate Program: Massac Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. We would need an additional FTE in addition to current staff additional training and education. This hiring process is concerning because we already live in a rural community where Information Analyst positions are proving difficult to fill. HRSA estimated 2 hours of additional work per week with the rebate program. That is grossly underestimated. I would invite anyone to review our current workload for 340B and the amount of time and attention we give to program integrity. Not to mention the amount of money we currently pay out to manage the program and place high priority on compliance and integrity. This would divert additional time from patients and program integrity and would tip the scales to needing an additional employee to manage the rebate process. Working to reconcile rebates and rejections would be a daily task. Once rejections become reality, it will take time to drill down to the issue and correct issues. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Massac Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Additional funds would be needed for any data extraction and reporting. Each report needed is quoted at $2,500. We have already run into roadblocks with providing medical claims data. Relying on other staff and departments to piece together a puzzle. We will have to manually run this report each day and upload to ESP. This would be an additional task for the added FTE. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply not true. Massac Memorial Hospital utilizes reporting from TPAs, consultant groups, and internal data sources. We would have to pull medical claims data in a different format which would require a manual daily upload. We have not currently been able to get a report of claim level data that includes the claim line. It has already proven to be a pain spot and would require further funds be spent to extract this data in a different way for any type of automatic upload. Reliance Interests: The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Massac Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our financials are budgeted with the upfront savings from prior years. These guide planning and projects to serve patients better in future years. If this is disrupted, it will take time to see how the hospital fairs in the change before utilizing those funds for patient centered uses, such as transportation. Efforts to Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Massac Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. At this point, no drug company has raised a 340B/MDPNP deduplication issue with Massac Memorial Hospital to date. If they raised an issue, we would certainly work hand in hand for program integrity. For all the reasons communicated, Massac Memorial Hospital in Metropolis, IL respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Massac Memorial Hospital in Metropolis, IL and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details. A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the program. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Lauren Scott, PharmD Pharmacy Manager Massac Memorial Hospital 28 Chick Street Metropolis, IL 62960 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Massac Memorial Hospital in Metropolis, IL we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Massac Memorial Hospital in Metropolis, IL that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Massac Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commentors to include supporting facts, research, and evidence in their responses. Massac Memorial Hospital in Metropolis, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs means more claims to submit, more rebates to track and reconcile, more money that we will need to float to the drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Massac Memorial Hospital can spend on patient care and comprehensive health services. Administrative Costs Under A Potential 340B Rebate Program: Any rebate program would require Massac Memorial Hospital in Metropolis, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Massac Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. We would have to pay an outside entity to help us extract the data needed from our EMR and put it into a format suitable for ESP. We already have staffing restraints on Information Systems Analysts and will have to outsource that knowledge and expertise to create a file for submission. This has been quoted at $2,500 just to create the file and extract the needed data fields from our EMR. Other cost drivers would be increased staffing. We currently go above and beyond to prevent any type of diversion with 340B claims. We currently review 100% of contract pharmacy claims. We can not fight for rebates and monitor the integrity of that process and continue to care for program integrity without additional staff. This would be an ongoing cost for this additional FTE. This would cost the hospital around $48,000 per year. These additional expenditures would cover claims processing, data submission, reconciliation of rebates, and additional compliance concerns unknown to us at this time. We will also have additional fees to our TPA to facilitate uploads of data. With the assumption that the consultant group we pay for an added layer of guidance and program integrity will increase as well. We would have to exclude these drugs from our split bill savings to our hospital because we would be paying out more money to manage the rebates than we receive in savings currently. All of the extra time, hiring, labor, training, education, and support take away from us doing what we are here to do. That is to take care of patients in our rural community. This added layer of burden will ultimately impact the patients we serve. Staffing Impacts Under a Potential 340B Rebate Program: Massac Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. We would need an additional FTE in addition to current staff additional training and education. This hiring process is concerning because we already live in a rural community where Information Analyst positions are proving difficult to fill. HRSA estimated 2 hours of additional work per week with the rebate program. That is grossly underestimated. I would invite anyone to review our current workload for 340B and the amount of time and attention we give to program integrity. Not to mention the amount of money we currently pay out to manage the program and place high priority on compliance and integrity. This would divert additional time from patients and program integrity and would tip the scales to needing an additional employee to manage the rebate process. Working to reconcile rebates and rejections would be a daily task. Once rejections become reality, it will take time to drill down to the issue and correct issues. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Massac Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Additional funds would be needed for any data extraction and reporting. Each report needed is quoted at $2,500. We have already run into roadblocks with providing medical claims data. Relying on other staff and departments to piece together a puzzle. We will have to manually run this report each day and upload to ESP. This would be an additional task for the added FTE. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply not true. Massac Memorial Hospital utilizes reporting from TPAs, consultant groups, and internal data sources. We would have to pull medical claims data in a different format which would require a manual daily upload. We have not currently been able to get a report of claim level data that includes the claim line. It has already proven to be a pain spot and would require further funds be spent to extract this data in a different way for any type of automatic upload. Reliance Interests: The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Massac Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our financials are budgeted with the upfront savings from prior years. These guide planning and projects to serve patients better in future years. If this is disrupted, it will take time to see how the hospital fairs in the change before utilizing those funds for patient centered uses, such as transportation. Efforts to Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Massac Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. At this point, no drug company has raised a 340B/MDPNP deduplication issue with Massac Memorial Hospital to date. If they raised an issue, we would certainly work hand in hand for program integrity. For all the reasons communicated, Massac Memorial Hospital in Metropolis, IL respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Massac Memorial Hospital in Metropolis, IL and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details. A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the program. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Lauren Scott, PharmD Pharmacy Manager Massac Memorial Hospital 28 Chick Street Metropolis, IL 62960
HRSA-2026-0001-0088Large Urology Group Practice Association (LUGPA)2026-03-18T04:00Z3,737 chars
See attached file for LUGPA's 340B Rebate Model RFI Response. March 16, 2026 Via Electronic Submission Health Resources and Services Administration (HRSA) 5600 Fishers Lane, Mail Stop 10W29 Rockville, Maryland 20857 340Bpricing@hrsa.gov RE: Response to RFI on the 340B Rebate Model Pilot Program; Large Urology Group Practice Response (HRSA-2026-03042) Dear HRSA: The Large Urology Group Practice Association (LUGPA), representing and advocating on behalf more than 150 independent urology group practices and their patients for almost two decades, is pleased to provide our comments to the Health Resources and Services Administrations (HRSAs) Request for Information regarding the proposed 340B rebate model. LUGPA strongly supports HRSAs efforts to introduce mechanisms that improve transparency, accountability, and appropriate utilization within the 340B Drug Pricing Program. HRSA is evaluating whether post-purchase rebates may serve as an alternative method for effectuating the statutory 340B ceiling price, as compared to pre-purchase discounts. LUGPA believes this rebate approach would be appropriate to better manage and protect the significant sums made available to covered entities under the 340B Drug Pricing Program. The current structure, which provides large upfront discounts to hospitals, has enabled significant diversion of funds away from the programs intended beneficiaries. Numerous analyses have documented that the 340B Program has expanded rapidly while lacking sufficient guardrails to ensure that savings support vulnerable patients.1 A rebate model would strengthen 340B program integrity by reducing opportunities for diversion and duplicate discounts. It would also align with HRSAs statutory authority to use either discounts or rebates to implement the ceiling price. LUGPA believes that the existing 340B structure has contributed to market distortions that disadvantage community-based providers. Covered entities ability to purchase drugs at steeply discounted prices, unavailable to independent physicians and unaccountable to spending restrictions, has accelerated healthcare provider consolidation and shifted care away from lower-cost community settings. LUGPA supports reforms that may help to reduce these distortions and ensure that 340B benefits are appropriately documented and transparent, such that they might flow to patients as intended, rather than subsidizing hospital expansion or growing administrative spending. We recognize that some hospital groups have expressed concerns about administrative burden and 1 See e.g., Conti, R. M., & Bach, P. B. (2014). The 340B drug discount program: Hospitals generate profits by expanding to reach more affluent communities. Health Affairs, 33(10), 17861792. https://doi.org/10.1377/hlthaff.2014.0540. Page 2 of 2 cash flow under a rebate model. LUGPA believes, consistent with HRSAs proposal, that these concerns can be addressed through thoughtful program design and must be weighed against the substantial and well-documented abuses in the current system. We commend HRSA for issuing this RFI and continuing down a path towards implementing a 340B rebate pilot. We encourage the Administration to move forward with a rebate model that: Improves transparency in drug acquisition and pricing; Ensures appropriate utilization of 340B savings; Reduces diversion and duplicate discounts; and Protects taxpayers and the integrity of the 340B Program On behalf of LUGPA, we would like to thank HRSA for providing us with this opportunity to respond to the RFI. Thank you, Scott Sellinger, MD, FACS President Mara Holton, MD Chair, Health Policy
HRSA-2026-0001-0089(no commenter metadata)2026-03-17T04:00Z45,457 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Saunders Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Saunders Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Saunders Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Saunders Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Saunders Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Saunders Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Saunders Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Critical Access Hospital Perspective on Administrative and Operational Burden of a 340B Rebate Model As a Critical Access Hospital serving a rural community, we operate with extremely limited administrative staff and thin financial margins. The current structure of the 340B Drug Pricing Program is workable for rural hospitals because the program relies on an upfront discount at the point of purchase. That structure is administratively simple and predictable. 2 Transitioning even a subset of drugs to a rebate-based system fundamentally changes the operational model of the program and introduces administrative complexity that rural hospitals are not designed to absorb. While the rebate pilot may appear administratively simple at a national level, the operational reality for Critical Access Hospitals is that this change would require new systems, new workflows, and ongoing manual oversight for every claim involving one of the negotiated drugs. Given that up to 25 drugs could be included in the rebate pilot in 20262027, the burden is not hypotheticalit would affect a significant portion of high-cost drugs used in outpatient infusion and specialty care settings. Estimated Administrative and Operational Costs One-Time Implementation Costs Even before the program begins, rural hospitals would incur substantial one-time costs to redesign internal systems and workflows. Key startup activities include: modifying split-billing systems reconfiguring EHR and pharmacy charge capture building data feeds with third-party administrators developing policies and procedures staff training and compliance review Because most Critical Access Hospitals rely heavily on 340B third-party administrators (TPAs) to manage compliance and split billing, vendor configuration will represent one of the largest implementation expenses. Estimated one-time costs include: TPA system configuration and data integration: $15,000$35,000 Internal IT system modifications: $12,000$20,000 Policy development and compliance program updates: ~$4,000 Staff training across pharmacy, billing, and finance teams: ~$3,000 Legal and consulting review: $5,000$10,000 For a small rural hospital, this results in one-time implementation costs of approximately $39,000$72,000. For many Critical Access Hospitals, that amount represents the equivalent of several months of pharmacy operating margin. Ongoing Administrative Costs The ongoing administrative burden of a rebate system is significantly higher than the current upfront discount model. Today, once the drug is purchased at the 340B price, the transaction is largely complete from an administrative perspective. Under a rebate model, however, hospitals must: Identify eligible claims Submit rebate requests Track manufacturer payments Reconcile payments against claims Investigate missing or denied rebates Maintain documentation for audits For a rural hospital with limited staff, these steps translate directly into new labor requirements. Estimated ongoing annual administrative burden includes: Claims identification and tracking: ~120 hours Rebate submission and management: ~150 hours Reconciliation and payment tracking: ~120 hours Denial investigation and appeals: ~80 hours Audit preparation and documentation retention: ~60 hours 3 In addition to internal labor, most hospitals will rely on their TPA to manage rebate tracking and reporting. Estimated annual TPA costs: $10,000$20,000 per year Combined internal labor and vendor costs result in ongoing annual administrative costs of approximately $36,000 $46,000. For a rural hospital with only a handful of pharmacy staff and minimal finance infrastructure, this effectively represents the creation of an entirely new administrative function. Key Cost Drivers Third-Party Administrator Fees Most Critical Access Hospitals do not have the internal IT or compliance infrastructure to independently manage 340B claim tracking. As a result, hospitals depend heavily on TPAs to: track eligible claims generate rebate submission files reconcile manufacturer payments maintain audit documentation TPAs have already indicated that rebate tracking functionality will require new system modules and data feeds, which will result in both setup and recurring costs. Labor and Workflow Disruption Unlike large health systems, rural hospitals do not have dedicated 340B compliance teams. Responsibility for these tasks would fall to: pharmacy staff revenue cycle personnel finance teams compliance staff In practical terms, this means existing staff would be diverted from patient care support functions to manage rebate administration. The estimated 350450 hours of annual administrative work represents roughly 0.20.25 FTE of new administrative burden. For small hospitals already experiencing workforce shortages, even this seemingly small amount of time is extremely difficult to absorb. Denial Management and Payment Uncertainty The most concerning operational change is the shift from guaranteed upfront savings to delayed rebate payments. Under a rebate system, hospitals must purchase drugs at higher acquisition costs and then wait for manufacturers to process and pay rebates. This introduces two major challenges: Cash flow pressure Administrative burden from unpaid rebates Hospitals anticipate significant time spent tracking unpaid rebates and disputing eligibility determinations. Cash Flow Impact 4 Critical Access Hospitals operate with extremely limited financial reserves. Under a rebate system, hospitals may be required to purchase negotiated drugs at wholesale acquisition cost or other higher prices, waiting weeks or months for rebates to be paid. For high-cost outpatient drugs used in oncology, rheumatology, and infusion services, this could require $50,000 $200,000 in additional working capital at any given time. For rural hospitals already struggling with operating margins, this level of financial exposure introduces substantial risk. Additional Implementation Costs Beyond direct administrative costs, hospitals will incur additional expenses related to: Staff Training Employees across pharmacy, finance, and billing departments will require training on: rebate submission workflows documentation requirements compliance risk mitigation Estimated cost: $3,000$5,000 (one-time) Overall Impact on Rural Hospitals The current structure of the 340B program is manageable for rural providers because it is predictable and administratively simple. Replacing upfront discounts with a rebate structure introduces: new administrative costs delayed savings realization cash flow risk increased compliance complexity For Critical Access Hospitals operating with extremely limited staff and financial resources, these changes create disproportionate operational burdens. Even modest administrative requirements can have outsized effects on rural hospitals that lack the scale and infrastructure of large health systems. As a result, the proposed rebate structure risks undermining the ability of rural hospitals to fully benefit from the 340B program, which was specifically designed to support providers serving vulnerable and geographically isolated populations. Staffing Impacts Under a Potential 340B Rebate Program. Saunders Medical Center does not currently have the staff needed to comply with a Rebate Program. Staffing and Workforce Impact of a 340B Rebate Model Implementation of a potential 340B Rebate Model Pilot Program would require our hospital to reallocate significant staff time away from existing responsibilities and may ultimately require the addition of new administrative support. As a Critical Access Hospital, we operate with a very small administrative and pharmacy workforce, and we do not have dedicated 340B program staff. Instead, program oversight and operational tasks are shared across pharmacy, billing, finance, and compliance personnel. Because of this structure, any additional administrative requirements associated with a rebate model would directly shift staff time away from patient-care-related functions. 5 Reallocation of Current Staff Time Under a rebate-based system covering up to 25 negotiated drugs, several new administrative tasks would be required for every applicable claim. These include identifying eligible claims, submitting rebate requests, tracking rebate payments, reconciling manufacturer payments with internal claim data, investigating missing or denied rebates, and maintaining documentation for compliance and audit purposes. Based on our current workflows and staffing structure, we estimate the following annual staff time would be required: Pharmacy staff oversight and verification of eligible drug claims: 120 hours annually Revenue cycle or billing staff time to identify and prepare claims data for submission: 150 hours annually Finance staff time for reconciliation of rebate payments and tracking outstanding rebates: 120 hours annually Compliance staff time for documentation retention, reporting, and audit preparation: 60 hours annually Additional time for denial investigation and manufacturer dispute resolution: 80 hours annually In total, we estimate approximately 530 hours annually in additional administrative workload. This equates to roughly 0.25 full-time equivalent (FTE) administrative effort. In a large health system this amount of work might be distributed across a dedicated 340B team. In a rural Critical Access Hospital like ours, these responsibilities would fall to a small number of employees who are already performing multiple operational roles. As a result, these tasks would require staff to divert time away from existing duties supporting clinical care and hospital operations. Potential Need for Additional Staffing While we will initially attempt to absorb the workload through redistribution of responsibilities, sustained administration of a rebate model would likely require additional administrative staffing or contracted vendor support. We anticipate that the rebate model would require approximately 0.25 to 0.5 FTE of additional administrative capacity depending on drug utilization and the complexity of manufacturer rebate processes. The primary roles and responsibilities of this position would include: Identifying and validating eligible claims for negotiated drugs Preparing and submitting rebate data files to manufacturers or third-party administrators Tracking rebate payments and maintaining reconciliation records Investigating unpaid or denied rebates Coordinating documentation for audits and compliance reviews Communicating with manufacturers and third-party vendors regarding discrepancies In many rural hospitals, this function would likely be combined with existing responsibilities within the pharmacy or revenue cycle departments. Hiring Timeline Recruiting additional administrative personnel in rural healthcare settings often requires significant lead time due to workforce shortages and limited candidate pools. Hiring challenges in rural communities may make it difficult to fill these roles. HRSA Estimate of Five Hours per Week 6 HRSAs estimate that the rebate model would require only five hours per week in additional administrative work significantly underestimates the operational complexity associated with rebate administration. That estimate does not appear to account for the full set of activities required to administer a rebate model, including: identifying eligible claims across multiple billing systems verifying drug eligibility and patient claim details generating and submitting rebate data files reconciling manufacturer payments against submitted claims tracking unpaid rebates investigating discrepancies appealing denied rebates maintaining documentation required for compliance and audits Each of these steps involves multiple departments and multiple systems, including pharmacy inventory systems, split-billing software, electronic health records, and financial accounting systems. Even if only a small number of claims are associated with each negotiated drug, the administrative work occurs at the claim level, meaning each instance must be identified, submitted, tracked, and reconciled individually. Additionally, the estimate does not appear to account for time spent managing manufacturer payment delays or disputes, which are common in rebate-based systems. Tracking and resolving these issues can require significant manual effort. Based on our internal analysis, the rebate model would require approximately 10 to 12 hours per week of additional administrative effort, more than double HRSAs estimate. This estimate could increase further if claim volumes or denial rates are higher than expected. Impact on Rural Healthcare Workforce Critical Access Hospitals operate with extremely lean staffing models. Pharmacy and finance staff are frequently responsible for multiple operational functions simultaneously. The introduction of a rebate-based model for negotiated drugs would require these same staff to take on additional compliance, reporting, and financial reconciliation responsibilities. As a result, the administrative burden of this model would disproportionately impact rural hospitals compared to larger health systems that have dedicated 340B program teams. Even modest administrative requirements can have meaningful operational impacts in rural hospitals where staffing flexibility is limited. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Saunders Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. IT Systems, Software, and Data Infrastructure Requirements Implementation of a 340B rebate model would require significant changes to the information technology infrastructure used to manage pharmacy purchasing, charge capture, claims processing, and 340B compliance. The 7 current structure of the 340B program relies on an upfront discount at the time of drug purchase, which allows hospitals to manage compliance primarily through pharmacy inventory management and split-billing software. A rebate model fundamentally changes that workflow by requiring claim-level identification, submission, reconciliation, and tracking of manufacturer payments. For Critical Access Hospitals with limited IT resources, this shift introduces several new technical requirements. At a minimum, hospitals would need to modify or develop systems capable of: identifying negotiated drugs subject to the rebate model at the claim level flagging those claims within billing or pharmacy systems exporting claim data in formats required for rebate submissions transmitting that data to third-party administrators or directly to manufacturers reconciling rebate payments against submitted claims tracking unpaid or denied rebates These functions require coordination across multiple systems that were not originally designed to interact in this way, including pharmacy inventory systems, electronic health records, billing platforms, and 340B split-billing software. Estimated IT Costs Because most Critical Access Hospitals rely heavily on third-party vendors to support 340B compliance and data management, implementation of the rebate model would require both internal system changes and vendor- driven development costs. Estimated implementation costs include: One-Time Costs Third-party administrator configuration and integration Development of new data feeds, rebate tracking modules, and reporting tools would likely cost $15,000$35,000. Internal IT system configuration and development Internal staff or vendor consultants would need to modify reporting capabilities, build extraction tools for claims data, and develop reconciliation processes. Estimated cost: $12,000$20,000. Testing and validation of new workflows Ensuring data accuracy across pharmacy, billing, and vendor systems would require staff testing and validation. Estimated cost: $5,000$8,000 in labor and vendor support. Estimated total one-time IT costs: $32,000$63,000. Ongoing Costs Once implemented, hospitals would incur ongoing costs related to maintaining and operating these systems. Third-party administrator recurring service fees Additional rebate tracking and reporting services are expected to cost approximately $10,000$20,000 annually. Ongoing IT support and system maintenance Internal staff or contracted vendor support will be required to maintain data feeds, troubleshoot reporting errors, and update drug eligibility lists. Estimated cost: $5,000$10,000 annually. Estimated total recurring annual IT costs: $15,000$30,000. 8 Challenges with Medical Claims Data One of the most significant challenges associated with the rebate model is the requirement to provide detailed medical claims data in order to verify rebate eligibility. Unlike pharmacy claims processed through pharmacy benefit managers, outpatient hospital drug claims are embedded within complex medical billing systems and electronic health records. Extracting these data elements in a format suitable for rebate submissions is not straightforward. In our organization, our third-party administrator responsible for 340B split-billing does not have a direct real-time data feed into our electronic health record. Instead, the TPA receives limited billing information through periodic data files and relies on internal hospital processes to validate claim eligibility. Because of this structure, producing the detailed claims data necessary for rebate submission would likely require manual data extraction and validation by hospital staff. Staff would need to: identify claims associated with negotiated drugs extract relevant billing and charge data from the EHR or billing system verify eligibility criteria prepare files in the format required by the third-party administrator or manufacturer transmit those files for rebate processing These steps would involve coordination between pharmacy, revenue cycle staff, and IT personnel. In many cases, the necessary data elements are stored in different systems that do not automatically communicate with each other, requiring manual reconciliation. Manual Workflows and Operational Burden Because our TPA does not maintain a direct interface with our EHR, staff would likely need to generate custom reports and manually validate claims before transmitting data for rebate processing. This would create several operational challenges: manual report generation from the EHR or billing system manual review of drug charge codes and claim details manual file formatting and submission to the TPA manual reconciliation of submitted claims against received rebates Even small discrepancies in coding, drug identifiers, or claim timing could result in rebate denials, which would then require additional manual investigation and resubmission. For rural hospitals with small IT teams and limited data infrastructure, these processes introduce a level of technical and administrative complexity that does not exist under the current upfront discount model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 9 Current Data Collection, Maintenance, and Validation for 340B Participation Our organization participates in the 340B Drug Pricing Program and currently manages program compliance through a combination of internal pharmacy oversight and a contracted third-party administrator (TPA). Because Critical Access Hospitals operate with limited administrative infrastructure, third-party vendors play an essential role in supporting our compliance and data management activities. At present, our 340B data processes are structured around the upfront discount model, which allows drug eligibility to be determined primarily through pharmacy inventory and charge capture workflows rather than through claims-based rebate processing. Current Data Collection Data used to support our 340B program participation is primarily collected through: Pharmacy inventory and purchasing systems Electronic health record (EHR) medication administration records Hospital billing and charge capture systems Split-billing software maintained by our third-party administrator When eligible outpatient drugs are dispensed or administered, those transactions are captured through our internal charge capture processes and transmitted to the split-billing system managed by the TPA. The TPA software then evaluates the transaction against 340B eligibility criteria and determines whether the medication should be replenished at the 340B price. Role of Third-Party Vendors Our organization relies on a third-party administrator to manage the majority of the technical and operational components of 340B compliance. The TPA is responsible for: operating split-billing software identifying eligible outpatient drug utilization maintaining replenishment records supporting audit documentation and reporting assisting with internal compliance reviews Because the TPA does not have a direct live data interface with our electronic health record, relevant billing and utilization data are transmitted through scheduled data feeds or periodic data extracts. Data Maintenance and Retention Data associated with 340B transactions are maintained through both internal hospital systems and the TPAs compliance platform. Our organization retains records necessary to demonstrate compliance with program requirements, including: drug purchase records replenishment documentation patient encounter and billing records charge capture documentation 10 TPA-generated reports These records are maintained in accordance with hospital record retention policies and federal program guidance. Data Validation and Auditing Our hospital performs periodic internal reviews to validate the accuracy of our 340B processes. These reviews typically include: verifying that outpatient eligibility criteria are applied correctly confirming that replenishment purchases align with eligible drug utilization reviewing TPA-generated reports for accuracy maintaining documentation necessary for potential audits Our third-party administrator also provides reporting tools that assist with compliance monitoring and audit preparation. Overall, the current model relies heavily on automated eligibility determinations within split-billing software, with limited need for manual claims reconciliation or payment tracking. Impact of a 340B Rebate Model on Data Collection Activities Implementation of a rebate model would significantly change how hospitals must collect, manage, and validate 340B-related data. The current system determines eligibility at the point of drug utilization and purchase, allowing the hospital to receive the 340B price upfront. Under a rebate structure, however, hospitals would be required to track drug utilization at the individual claim level and submit detailed claims data in order to receive rebates after the drug has been purchased. This shift would require hospitals to collect and maintain additional data elements that are not currently required for routine 340B program operations. Changes to Data Collection Under a rebate model, hospitals would need to implement new processes to: identify claims involving negotiated drugs subject to the rebate program extract detailed claims data from billing systems prepare rebate submission files containing required claim-level information transmit those files to manufacturers or TPAs reconcile rebate payments with submitted claims track unpaid or denied rebates These activities represent a substantial change from the current process and would require the creation of new data collection and reporting workflows. 11 One-Time and Ongoing Data Management Changes Some aspects of the rebate model would involve one-time implementation changes, while many of the operational burdens would be ongoing. One-Time Changes Initial implementation would require: configuration of TPA systems to support rebate submission workflows development of data extraction processes from the EHR or billing system creation of new reporting and tracking tools development of policies and procedures governing rebate data management These implementation steps would likely require significant involvement from internal IT staff and third-party vendors. Ongoing Changes Unlike the current 340B purchasing model, a rebate system would introduce ongoing operational responsibilities including: continuous identification of eligible claims recurring submission of rebate data files tracking manufacturer rebate payments reconciliation of payments against claims investigation of missing or denied rebates maintaining documentation for compliance and audit purposes Because many TPAs do not have direct integration with hospital electronic health record systems, hospitals may also need to perform manual data extraction and validation on an ongoing basis to ensure the accuracy of submitted rebate data. These new requirements would significantly increase the administrative complexity associated with 340B participation. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Saunders Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Impact of Incremental Administrative and Operational Costs The additional administrative and operational costs associated with a potential rebate model within the 340B Drug Pricing Program would have a meaningful impact on our hospitals ability to maintain services for the patients and communities we serve. Critical Access Hospitals operate on extremely narrow financial margins and maintain very lean administrative staffing structures. Any increase in administrative cost or operational complexity forces difficult decisions about 12 how limited resources are allocated. Unlike large health systems, rural hospitals do not have excess administrative capacity or financial reserves to absorb new compliance requirements without consequences. While the rebate model may appear to represent a modest administrative change at the federal level, for small rural providers it introduces new costs, new staffing demands, and cash flow pressures that ultimately reduce the resources available for direct patient services. Services That May No Longer Be Sustainable If these additional administrative costs are implemented, our hospital would be forced to evaluate reductions in certain services that are currently supported in part by savings generated through the 340B program. Savings generated through the program help support services that are essential in rural communities but are often financially challenging to sustain, including: outpatient infusion services specialty drug administration chronic disease management programs medication assistance programs for underinsured patients pharmacy support services for high-risk patients If administrative costs increase and savings become less predictable under a rebate model, hospitals may be forced to scale back these programs or reduce service availability. In particular, infusion services and specialty medication administration are especially vulnerable because they rely heavily on high-cost drugs that may be included in the rebate program. Potential Reductions in Patient Services Additional administrative costs and delayed rebate payments could lead to several service impacts, including: reduced availability of outpatient infusion services fewer specialty drug therapies offered locally reduced pharmacy-supported patient care programs reduced ability to provide medication assistance for underinsured patients These types of service reductions disproportionately affect rural patients who already face limited healthcare access. Critical Projects That May Be Delayed or Canceled Like many rural hospitals, we continuously balance operational investments with limited financial resources. Unexpected increases in administrative cost may require us to delay or cancel projects that are designed to improve patient care or hospital operations. Examples of projects that could be impacted include: electronic health record upgrades rural telehealth expansion initiatives pharmacy workflow modernization 13 patient care infrastructure improvements recruitment and retention efforts for clinical staff For rural hospitals, even modest new administrative expenses can compete directly with investments intended to improve patient access and quality of care. Impact of Program Uncertainty on Financial Planning Uncertainty regarding whether a rebate model will be implemented has already created challenges for financial planning. Hospitals must evaluate potential operational risks and budget for possible compliance requirements without clear guidance on how the program would function. This uncertainty complicates long-term planning for pharmacy operations, staffing, and capital investments. Rural hospitals operate with limited financial flexibility, and uncertainty surrounding potential program changes forces leadership to take a more cautious approach to spending and project planning. In some cases, hospitals may delay investments or operational improvements until they better understand how the rebate model may affect pharmacy revenue streams and administrative costs. Impact on Patients and the Community The most significant concern associated with the rebate model is its potential impact on patient access to care in rural communities. Our hospital serves a geographically dispersed population where access to healthcare services is already limited. Patients often travel distances for specialty services, and the availability of local treatment options is critical for maintaining continuity of care. When rural hospitals lose the ability to sustain certain services locally, patients frequently must travel to larger urban medical centers for treatment. For many patientsparticularly elderly individuals, those with chronic illness, or those with limited transportationthese travel requirements create significant barriers to care. If the rebate model increases administrative burden and reduces the financial sustainability of certain services, the impact will ultimately fall on the patients who rely on rural hospitals for accessible healthcare. Characteristics of Our Hospital and Community As a Critical Access Hospital, our organization serves a rural community with a high proportion of Medicare and Medicaid patients. Many patients in our service area are older adults managing multiple chronic conditions that require ongoing medical care and medication management. Our hospital is one of the few healthcare providers in the region offering certain outpatient services. If services such as infusion therapy or specialty drug administration were reduced or eliminated locally, patients may be required to travel significant distances to larger hospitals in order to receive treatment. For patients undergoing ongoing therapiessuch as cancer treatment or autoimmune disease management these travel requirements can become a substantial burden. 14 Rural transportation challenges, weather conditions, and limited caregiver support can make these longer trips extremely difficult for patients. Impact on Access to High-Cost Drugs A rebate model also creates the potential for access challenges related to high-cost medications. Under the current system, hospitals purchase eligible drugs at the 340B price. Under a rebate structure, hospitals may be required to purchase drugs at a higher acquisition cost and wait for rebates to be paid later. For expensive specialty medications, this creates cash flow risks that may limit a hospitals ability to stock certain drugs. In some cases, hospitals may determine that they cannot safely carry the financial exposure associated with high- cost medications if rebates are delayed or denied. This could result in fewer drugs being stocked locally and may require patients to seek treatment at larger facilities outside their communities. For rural patients already facing transportation barriers and limited healthcare access, this type of shift can significantly disrupt continuity of care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Saunders Medical Center relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Our organization has experience interacting with manufacturer-operated rebate portals such as the Beacon Portal. Based on that experience, we have significant concerns about how a broader rebate model would function operationally for hospitals, particularly small rural providers. These concerns relate primarily to unilateral terms and conditions, shifting data submission requirements, operational inefficiencies, and limited customer support when problems arise. Our organization has had to interact with Beacon in order to submit claims information and other data associated with manufacturer rebate eligibility verification. 15 The process required hospitals to provide detailed claims-level data in order to demonstrate that drugs were eligible under the manufacturers rebate program. In practice, this required coordination between pharmacy staff, revenue cycle staff, and our third-party administrator in order to extract and prepare the necessary information. For small hospitals with limited IT infrastructure, this process proved to be administratively complex and time- consuming. Problems With Beacons Terms and Conditions One of the most significant concerns with the Beacon platform relates to the Terms and Conditions hospitals are required to accept in order to participate. These agreements are typically presented as non-negotiable contracts that hospitals must accept in order to submit data or receive rebates. The terms are often drafted in ways that: place extensive obligations on hospitals regarding data submission and verification shift liability related to data accuracy onto hospitals allow manufacturers to change program requirements or portal functionality with limited notice provide limited transparency regarding how submitted data will be used or stored Hospitals are frequently required to accept these terms before they can even access the platform, which leaves providers with little practical ability to negotiate protections related to data governance, liability, or operational processes. For hospitals subject to strict patient privacy requirements and internal compliance policies, accepting such broad contractual language can create legal and compliance concerns. Problems With Shifting Data Requirements Another major challenge experienced with Beacon has been frequent changes to data submission requirements. During participation, hospitals encountered situations where: required data elements changed with limited advance notice formatting requirements for claim submissions were modified additional documentation fields were added eligibility verification standards were adjusted These changes required hospitals to repeatedly modify internal workflows and data extraction processes. For organizations without dedicated data teams or sophisticated data infrastructure, these adjustments often required manual work by pharmacy, billing, and IT staff. This unpredictability created operational disruption and increased administrative burden. Hospitals must rely on stable and predictable data standards in order to build efficient workflows. When requirements change frequently, the result is additional manual intervention, delayed submissions, and increased risk of data errors. 16 Problems With Customer Service and Issue Resolution When problems occurred within the Beacon systemsuch as submission errors, unclear data requirements, or questions about claim eligibilityour organization experienced difficulty obtaining timely support. Common issues included: delayed responses to support inquiries limited transparency regarding why submissions were rejected lack of clear documentation explaining data validation errors difficulty escalating unresolved issues When claims were rejected or flagged, it was often unclear what specific data elements caused the issue. This required staff to spend additional time investigating the problem and attempting to correct the submission. For hospitals with limited administrative staff, these types of unresolved system issues can consume significant operational time. Implications for a Potential 340B Rebate Program Our experience with Beacon raises concerns about how a rebate model could function if hospitals are required to submit sensitive patient and claims data to multiple manufacturer-operated platforms. If each manufacturer requires hospitals to interact with separate portals with unique terms, data requirements, and workflows, the administrative burden could become substantial. More importantly, the fragmentation of data submission systems raises serious concerns about privacy, security, and governance of patient information. Hospitals are responsible for safeguarding protected health information and must ensure that any third-party systems handling patient data meet strict security and compliance standards. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Saunders Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Saunders Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Saunders Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to 17 provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brent Cernik Director of Pharmacy Saunders Medical Center
HRSA-2026-0001-0090ERIK LYON · OROVILLE, CA, United States2026-03-20T04:00Z4,613 chars
See attached file(s) Feather River Tribal Health, Inc. Sonsorin Tribes: Be Creek Rancheria, Mooretown Rancheria & Ente rise Ranche ia OROV1LLE CLINIC YUBA CITY CLINIC 2145 5'" Avenue Oroville CA 95965 555 Wcst Onstott Road Yuba City CA 95993 (530) 534-5394 (530) 751-8454 HHS Docket No. HRSA-2026-03042 Dear Health Resources and Services Administration (HRSA), On behalf of Feather River Tribal Health, we respectfully submit the following concerns regarding the proposed 340B Rebate Model Pilot Program. As a Tribal health program serving a rural and medically underserved population, we rely heavily on the current 340B upfront discount structure to sustain essential patient care services and community health initiatives. 1.Cash Flow and Financial Risk Under the existing 340B model, covered entities are able to purchase medications at discounted prices upfront, allowing for predictable budgeting and financial stability. Transitioning to a rebate-based model would require our program to pay full price initially and wait for reimbursement. This shift introduces significant cash flow challenges, particularly for programs like ours that operate on thin margins. Delayed or denied rebates could result in substantial financial losses and disrupt our ability to maintain consistent services. 2. Administrative Burden The implementation of a rebate model would substantially increase administrative complexity. Tracking eligible claims, managing manufacturer rebate submissions, and addressing disputes would require additional staff time and resources. For smaller Tribal health programs, this added burden would necessitate increased staffing and operational costs, diverting resources away from patient care. 3. Rebate Uncertainty and Disputes Unlike the current guaranteed upfront discounts, rebates introduce uncertainty. Payments may be delayed, reduced, or denied, and manufacturers may challenge claim eligibility based on patient definitions or concerns about duplicate discounts. The appeals and dispute resolution processes are often lengthy and resource-intensive, undermining the financial predictability that the 340B program currently provides. 4. Compliance and Audit Risk The rebate model may increase scrutiny from regulatory bodies and manufacturers, raising the risk of compliance issues. Tribal programs may face heightened exposure to duplicate discount violations and diversion findings, along with more frequent audits and potential penalties. This environment increases both financial and operational risk. 5. IT and Data Infrastructure Challenges Operationalizing a rebate system would require advanced claims tracking systems, integration with pharmacy benefit managers and manufacturers, and real-time eligibility verification. Many AAAHC Accredited Organization This institution is an equal opportunity provider and employer. small and rural Tribal health programs lack the necessary infrastructure, and the cost of implementation would be significant and potentially prohibitive. 6. Reduced Program Value Delays in rebate payments could significantly reduce the net value of the 340B program. This reduction would directly impact our ability to fund uncompensated care, community health programs, patient assistance services, and other critical support mechanisms that our patients depend on. 7. Impact on Timely Patient Care Feather River Tribal Health serves a rural population with a high burden of chronic disease and significant transportation barriers. Our 340B savings are essential to providing affordable medications, transportation services, and outreach programs that support medication adherence. A rebate model requiring upfront payment at wholesale acquisition cost, combined with delayed reimbursement, could impair our ability to restock medications and sustain these vital services. Ultimately, this may lead to interruptions in care and poorer health outcomes for our patients. In conclusion, we are deeply concerned that the proposed rebate model would disproportionately impact Tribal health programs and the vulnerable populations we serve. We respectfully urge HRSA to carefully consider these challenges and engage with Tribal stakeholders to ensure that any program changes preserve access to affordable medications and maintain the integrity and intent of the 340B program. Thank you for your consideration and continued commitment to supporting Tribal health systems. Sincerely, Erik Lyon Chief Executive Officer Feather River Tribal Health r i k 1 \ on a, filln.on! 530-534-5394
HRSA-2026-0001-0091David Kepler · Richland Center, WI, United States2026-03-20T04:00Z3,889 chars
Greetings, My name is David Kepler, and I am the Director of Pharmacy at The Richland Hospital in Richland Center, WI. I am writing to express deep concern about the proposed shift to a rebate model within the 340B Program. From my perspective and experience, such a change would cause significant harm to safety-net hospitals and the vulnerable patient populations they serve. For decades, the 340B Program has enabled providers to deliver sustained, high-quality careparticularly in underserved communities. Many safety-net hospitals already operate on extremely thin margins, and a rebate-based structure would jeopardize their financial viability. Some may ultimately be forced to reduce services or close altogether. If HRSA, HHS, CMS, and pharmaceutical manufacturers were truly prioritizing patient access and community health, a rebate model would not be under consideration. There are already clear indications that manufacturers intend to leverage questionable practices under a 340B rebate model. A prominent example is their push to require invoice-level detail at the point of data submission. This demand fundamentally conflicts with the established logic and operational cycle of 340B replenishment, in which purchasing and utilization are intentionally decoupled. By insisting on a documentation standard that does not reflect how the 340B Program is designed to operate, manufacturers are effectively trying to rewrite the rules governing 340B interactions creating administrative hurdles that fall disproportionately on covered entities and undermine the programs core purpose. Compounding this issue is the lack of meaningful provider-level validation, despite the models requirement to submit provider NPI data. Without safeguards to ensure that the provider information aligns with the entity submitting the data, the system creates an unnecessary and entirely avoidable risk: rebates could be misdirected and paid to the wrong party, even in cases of unintentional error. These concerns represent only a fraction of the broader risks inherent in a rebate-based model. Such a framework centralizes significant authority in the hands of pharmaceutical manufacturers, granting them unilateral authority and disproportionate control over program interpretation, data adjudication, and enforcement decisions. This imbalance not only undermines the statutory intent of the 340B Program, it increases the likelihood of lost 340B savings while leaving covered entities vulnerable to opaque decision-making and inconsistent standards. Ultimately, the rebate model introduces operational uncertainty, administrative inefficiency, and significant financial risk while simultaneously weakening support for the very services the 340B Program was created to sustain. These essential services include ensuring access to medications and essential medical care for uninsured and underinsured patients, maintaining the financial stability of safety-net hospitals, and supporting community outreach efforts that protect public health, promote disease prevention, reduce disease transmission, and keep people engaged in ongoing care. To echo 340B Health President and CEO Maureen Testoni The 340B Programs upfront discount structure provides hospitals with predictability and stability, enabling them to stretch scarce resources to meet community needs. A rebate approach reverses that payment model by requiring hospitals to pay full price upfront and wait for reimbursement. That shift would disrupt cash flow, increase administrative burdens and introduce uncertainty that many safety-net hospitals cannot absorb. I urge policymakers to consider the real-world consequences of a rebate-based model and to protect the integrity of the 340B Program for the communities that depend on it. Sincerely, David Kepler Director of Pharmacy Richland Hospital dave.kepler@richlandhospital.com
HRSA-2026-0001-0092Anonymous Anonymous2026-03-20T04:00Z3,789 chars
We are responding to the 340B Rebate Pilot RFI as a public hospital district and the sole provider of primary, specialty and emergency care for a remote and geographically isolated county in Washington state. Our county has a significant aging population and a high proportion of Medicare and Medicaid beneficiaries. As a critical access hospital, we operate with limited margins and rely on 340B program savings to support access to essential services that are not otherwise financially sustainable. At the same time, rural providers are navigating increasing financial pressure associated with federal policy changes, including provisions under H.R.1 and related budgetary and reimbursement dynamics. These policies contribute to tightening margins through reimbursement constraints and funding uncertainty. In light of these considerations, the stability of the 340B program is more critical than ever. The current 340B model provides upfront drug discounts that enable us to reinvest savings into patient care. These savings are directly used to support: A low-volume obstetrics program, which operates with high fixed costs and low reimbursement and would be at risk without supplemental financial support Primary care services, including access for publicly insured and uninsured patients Integrated behavioral health services embedded within primary care Care coordination and social needs interventions for high-risk patients Emergency and outpatient services that are essential for rural access but operate on thin or negative margins A rebate-based model would require us to purchase drugs at full acquisition cost and await reimbursement. Given our limited cash reserves, even modest delays in rebate payments would create material cash flow constraints, affecting our ability to sustain the services listed above. These risks are compounded in the current federal policy environment, where rural hospitals are already absorbing multiple sources of financial pressure. We anticipate substantial operational challenges associated with a rebate model: Managing submissions, tracking payments, and reconciling discrepancies across multiple manufacturers would require new administrative infrastructure Increased reliance on retrospective processes introduces additional compliance risk and administrative burden Addressing these requirements would require us to make significant investments in information technology, staffing, and external vendor support, which would significantly reduce the financial benefit of program participation. We support efforts to strengthen 340B program integrity and transparency. However, we believe these objectives can be achieved within the existing upfront discount framework through enhanced oversight, improved data validation, and targeted auditing. A rebate-based model introduces additional complexity without clear evidence that it would more effectively address integrity concerns. Even as a pilot, the proposed model presents significant barriers to participation for rural providers. Implementation would require upfront investments and operational changes that are not easily reversible. Additionally, pilot results may not be generalizable if participation is limited to larger, better-resourced entities or, conversely, may impose disproportionate risk on smaller participants. The proposed approach introduces financial and operational risks that are not aligned with the realities of rural safety net providers and may adversely affect access to essential services, including obstetric care, in our community. We appreciate the opportunity to provide input and ask that the Health Resources and Services Administration continue to explore approaches that support access to care for vulnerable populations in rural counties.
HRSA-2026-0001-0093The Richland Hospital2026-03-20T04:00Z18,608 chars
Please see the attached letter 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Richland Hospital in Richland Center, WI, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on The Richland Hospital in Richland Center, WI that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which The Richland Hospital in Richland Center, WI has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Richland Hospital in Richland Center, WI has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The 2 Richland Hospital in Richland Center, WI can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require The Richland Hospital in Richland Center, WI to spend significant sums on new administrative costs. When we chose to participate in the 340B program, The Richland Hospital in Richland Center, WI understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We would estimate the incremental administrative and operational costs our organization would incur under a 340B Model Rebate Pilot Program o one-time startup costs of at least 120 hours and tens of thousands of dollars o ongoing costs of at least 40 hours and thousands of dollars per month Key cost drivers would include increased staffing requirements, diverting current staff This additional expense would include activities or functions of claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials. Undeniably the change of some drugs to a rebate model would increase the current administrative costs under the upfront 340B discount. Staffing Impacts Under a Potential 340B Rebate Program. The Richland Hospital in Richland Center, WI does not currently have the staff needed to comply with a Rebate Program. We currently contract out for 340b management services, despite this, we would expect contract expenses to increase under a rebate model and reallocation of pharmacist work hours from medical care to perform administrative functions. (approximately 20-40 hours per month) HRSAs prior estimate of 2 hours per week in additional work is a gross underestimate. 3 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. The Richland Hospital in Richland Center, WI has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force The Richland Hospital in Richland Center, WI to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that The Richland Hospital in Richland Center, WI will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. The Richland Hospital in Richland Center, WI reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on The Richland Hospital in Richland Center, WI, HRSA should rely on those 4 other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, The Richland Hospital in Richland Center, WI respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow The Richland Hospital in Richland Center, WI and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, David Kepler Director of Pharmacy The Richland Hospital Richland Center, WI The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Richland Hospital in Richland Center, WI, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on The Richland Hospital in Richland Center, WI that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which The Richland Hospital in Richland Center, WI has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Richland Hospital in Richland Center, WI has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The Richland Hospital in Richland Center, WI can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require The Richland Hospital in Richland Center, WI to spend significant sums on new administrative costs. When we chose to participate in the 340B program, The Richland Hospital in Richland Center, WI understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We would estimate the incremental administrative and operational costs our organization would incur under a 340B Model Rebate Pilot Program one-time startup costs of at least 120 hours and tens of thousands of dollars ongoing costs of at least 40 hours and thousands of dollars per month Key cost drivers would include increased staffing requirements, diverting current staff This additional expense would include activities or functions of claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials. Undeniably the change of some drugs to a rebate model would increase the current administrative costs under the upfront 340B discount. Staffing Impacts Under a Potential 340B Rebate Program. The Richland Hospital in Richland Center, WI does not currently have the staff needed to comply with a Rebate Program. We currently contract out for 340b management services, despite this, we would expect contract expenses to increase under a rebate model and reallocation of pharmacist work hours from medical care to perform administrative functions. (approximately 20-40 hours per month) HRSAs prior estimate of 2 hours per week in additional work is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. The Richland Hospital in Richland Center, WI has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force The Richland Hospital in Richland Center, WI to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that The Richland Hospital in Richland Center, WI will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. The Richland Hospital in Richland Center, WI reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on The Richland Hospital in Richland Center, WI, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, The Richland Hospital in Richland Center, WI respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow The Richland Hospital in Richland Center, WI and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, David Kepler Director of Pharmacy The Richland Hospital Richland Center, WI
HRSA-2026-0001-0094(no commenter metadata)2026-03-20T04:00Z11,327 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 DearAdministrator Engels: On behalf of Massac Memorial Hospital in Metropolis, IL we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Massac Memorial Hospital in Metropolis, IL that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Massac Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commentors to include supporting facts, research, and evidence in their responses. Massac Memorial Hospital in Metropolis, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs means more claims to submit, more rebates to track and reconcile, more money that we will need to float to the drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Massac Memorial Hospital can spend on patient care and comprehensive health services. Administrative Costs Under A Potential 340B Rebate Program: Any rebate program would require Massac Memorial Hospital in Metropolis, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Massac Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. We would have to pay an outside entity to help us extract the data needed from our EMR and put it into a format suitable for ESP. We atready have staffing restraints on Information Systems Analysts and will have to outsource that knowledge and expertise to create a file for submission. This has been quoted at $2,500 just to create the file and extract the needed data fields from our EMR. Other cost drivers would be increased staffing. We currently go above and beyond to prevent any type of diversion with 340B claims. We currently review 100% of contract pharmacy claims. We can not fight for rebates and monitor the integrity of that process and continue to care for program integrity without additional staff. This would be an ongoing cost for this additional FTE. This would cost the hospital around $48,000 peryear. These additional expenditures would cover claims processing, data submission, reconciliation of rebates, and additional compliance concerns unl<nown to us at this time. We will also have additional fees to our TPA to facilitate uploads of data. With the assumption that the consultant group we pay for an added layer of guidance and program integrity will increase as well. We would have to exclude these drugs from our split bill savings to our hospital because we would be paying out more money to manage the rebates than we receive in savings currently. All of the extra time, hiring, labor, training, education, and support tal<e away from us doing what we are here to do. That is to take care of patients in our rural community. This added layer of burden will ultimately impact the patients we serve. Staffing Impacts Under a Potential 340B Rebate Program: Massac Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. We would need an additional FTE in addition to current staff additional training and education. This hiring process is concerning because we already live in a rural community where Information Analyst positions are proving difficult to fill. HRSA estimated 2 hours of additional work per week with the rebate program. That is grossly underestimated. I would invite anyone to review our current worldoad for 340B and the amount of time and attention we give to program integrity. Not to mention the amount of money we currently pay out to manage the program and place high priority on compliance and integrity. This would divert additional time from patients and program integrity and would tip the scales to needing an additional employee to manage the rebate process. Working to reconcile rebates and rejections would be a daily task. Once rejections become reality, it will tal<e time to drill down to the issue and correct issues. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Massac Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Additional funds would be needed for any data extraction and reporting. Each report needed is quoted at $2,500. We have already run into roadblocks with providing medical claims data. Relying on other staff and departments to piece together a puzzle. We will have to manually run this report each day and upload to ESR This would be an additional task for the added FTE. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESR That is simply not true. Massac Memorial Hospital utilizes reporting from TPAs, consultant groups, and internal data sources. We would have to pull medical claims data in a different format which would require a manual daily upload. We have not currently been able to get a report of claim level data that includes the claim line. It has already proven to be a pain spot and would require further funds be spent to extract this data in a different way for any type of automatic upload. Reliance Interests: The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount." Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency wilt, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Massac Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractuat relationships, and financial planning for the use of 340B savingsall based on an upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Our financials are budgeted with the upfront savings from prior years. These guide planning and projects to serve patients better in future years. If this is disrupted, it will tal<e time to see how the hospital fairs in the change before utitizing those funds for patient centered uses, such as transportation. Efforts to Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Massac Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Sincerely, gOr At this point, no drug company has raised a 340B/MDPNP deduplication issue with Massac Memorial Hospital to date. If they raised an issue, we would certainlywork hand in hand for program integrity. For all the reasons communicated, Massac Memorial Hospital in Metropolis, IL respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must altow Massac Memorial Hospital in Metropolis, IL and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details. A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the program. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications forthe millions of patients who rely on the 340B Program. Please contact me if you have any questions. _.,,t_i-N-Q_O Lynn Goines Chief Financial Officer Massac Memorial Hospital 28 Chick Street Metropolis, IL 62960
HRSA-2026-0001-0095(no commenter metadata)2026-03-20T04:00Z3,908 chars
See attached file(s) Good Trouble Coalition Public Comment on Changes to 340B Rebate Model Pilot Program 90 Fed. Reg. 36, 163 and 90 Fed. Reg. 38,165 For further information contact: goodtrouble@goodtroubleindiana.org The Good Trouble Coalition formally opposes FSSA plan to redirect essential healthcare funding away from local communities The Good Trouble Coalition strongly opposes a proposed Indiana Family and Social Services Administration (FSSA) policy change (Notice 20260225-IR-405260059ONA). The proposal seeks to prevent local clinics and hospitals from using federal grant-issued drug discounts to fund community care, diverting those savings for the state treasury instead. Since 1992, 340B grant recipient hospitals and clinics have been able to purchase medications at a discount, which generates savings that fund essential services, such as mental health integration, telehealth services, transportation assistance, mobile health units, and school-based health clinics. The FSSAs proposal would end this model, moving those savings into the state treasury through a rebate-only system. These savings are especially crucial for rural patients who already face significant access challenges. Advocates for Community Health confirm that health centers reinvest every dollar of 340B savings back into patient care, often in ways that are essential to sustaining health care access in rural communities. Hoosiers already have decreased rural health access due to clinic and hospital closures; this loss of funding exacerbates those gaps in care. The proposed changes to 340B create a "leaky bucket" fiscal scenario for Indiana. Currently, 100% of 340B savings remain within local Indiana clinics. Under the proposed rebate model, the state is required to return approximately 65% of the value of those funds to the federal government under matching rules. This results in a net loss of healthcare capital, surrendering ten dollars of local medical service for roughly three dollars and fifty cents of state budget offset. This is all within the setting of Indianas projected 5 billion dollar budget surplus in 2027. We cannot support a policy that sacrifices local healthcare capacity to shore up budget shortfalls when our state has a projected budget surplus in the billions. This proposal forces our safety-net organizations into an immediate budget crisis while sending the majority of the savings back to Washington, D.C. instead of keeping those dollars here in Indiana. The Coalitions opposition is centered on three key findings: 1. Threat to Safety-Net Stability: Removing 340B reimbursement puts high-impact community programs at immediate risk of closure. 2. Drain on Hoosier Resources: The policy reduces the total amount of healthcare funding remaining in the state by prioritizing state-level rebates over local discounts. Because of Medicaid matching rules, 65% of state-provided rebates have to be sent to the federal government. This doesnt currently happen in the 340B program. 3. Availability of Better Solutions: Other states maintain federal compliance and prevent "duplicate discounts" by using claim-level tracking technology. The FSSA can achieve its administrative goals without dismantling the funding that sustains Indianas front-line providers. The Good Trouble Coalition is calling on the FSSA to withdraw this proposal and work with stakeholders to implement tracking solutions that satisfy federal rules while keeping healthcare dollars in Indiana communities. About the Good Trouble Coalition: The Good Trouble Coalition is a nonpartisan, grassroots group of Hoosier healthcare and public health stakeholders who collaborate to educate, empower, and facilitate political advocacy to improve life in Indiana in the areas of patient-centered care, public health, and health equity. goodtroubleindiana.org
HRSA-2026-0001-0096Anonymous Anonymous2026-03-20T04:00Z7,638 chars
See attached file(s) Re: HHS Docket No. HRSA-2026-03042 Dear HRSA, Thank you for the opportunity to comment on the proposed 340B rebate model. Our organization, located in New York State, is comprised of a DSH, a CAH, and a SCH registration on the Office of Pharmacy Affairs 340B OPAIS. Our hospital network provides medical care to many rural patients who are underinsured, uninsured and / or classified in an elderly or indigent population bracket. As stated on HRSAs website, The 340B Program enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We use our 340B program to provide our patients access to additional health care services, as intended by the 340B program definition. Over 475,000 processed claims went through our hospital network in a recent quarter. Many of the claims came from our specialty services of Mental Health, Harm Reduction, Diabetes Care, Rheumatology, Neurology, Heart Care, and Women and Childrens clinics. The reinvestment of 340B savings helps our organization provide charity care, hospital and clinic convenience programs, financial patient assistance, transitions of care programs, a meds to beds program and Emergency Medical Services Drug donations. Built into our current financial infrastructure is the up-front 340B savings from 340B program participation. Changing to a rebate model for 340B program savings would affect all aspects of our business footprint. We would need to cut back on specialty clinic services, reduce our charity care, and in some areas cut back clinic hours or close clinics. In addition, our ordering processes for medication procurement at all clinics and pharmacies would need adjustment. The rebate model would not just affect 340B claims or clinics but all aspects of our business models and workflows. I. Cost to covered entities a. Claims for our network are just under 2 million per year. b. Rebate program implementation for 340B would require additional staffing to reconcile and track rebates, evaluation and changes in workflows across the system for pharmacies and clinics, and increase spend for medications with increased upfront acquisition costs. c. Time to process rebates, conduct reconciliations, denials and disputes would affect the amount of cash on hand for the organization. II. Payment Timing a. Rebate timing would be dependent on manufacturer processing timelines with arduous effects on our organization. b. 10 days reconciliation for rebates seems unrealistic in a real-world approach. Minimal rebate amounts coming in on various days of the month will cause cash flow issues affecting vendor payment obligations and incur late fees in most cases. c. Wholesaler prompt payment discounts would no longer be feasible under a rebate model for our organization. d. Lack of available funding would close rural community clinics and affect access to affordable patient care. Uncertainty generated by the rebate program and its effect on cash flow makes investments in program expansion a high-risk business practice. e. Rural area health systems are not equipped to overhaul how they conduct business in order to switch to a rebate model instead of up-front saving model for 340B. The financial strain to change a 30-year old process is overwhelming. f. Investments into continued 340B give back programs is difficult to forecast when organizations do not know when or how much they will be receiving in rebate payments. g. A rebate disproportionately benefits the manufacturer. Even with the intent of paying the full rebate due to CEs, manufacturers would still gain 10 days' worth of interest on funds that normally CEs use for day-to-day business operations. This creates a possible scenario in which a manufacturer could reject eligible claims, eventually lose a dispute, and pay the CE the withheld rebate payment while benefiting any interest earned during the dispute; essentially giving the manufacturer an interest-free loan. III. Rebate Denials Administrative and IT Burdens a. Additional staff required to manage the rebate programs for the network would exceed $500,000 in upfront costs. b. Assessment of IT platforms to identify risks to the organization would impede the already demanding IT project calendar. c. New workflows would be required for compliance oversight. d. Compliance guidelines should come to covered entities from HRSA and not from manufacturers as an interpretation for their own benefit. IV. Data Collection a. Data mismatches, timeliness of payments, and lack of eligibility guidelines will all inhibit data collection. b. Increased strain on IT resources to create proper data collection reports. c. Third party vendor relationship strains in order to collect and reconcile data and rebate payments within appropriate timeframes. d. Auditing for missed payments, incorrect payments and claims resolution will be burdensome and very time consuming. V. Patient Threats a. Threat to patients access to affordable care. Specialty clinics will need to reduce hours and operational expenses. b. Community give back programs, medication assistance programs and free or discounted medications would be in jeopardy of dissolution. c. 340B savings fund Oncology services, Behavioral Health, Mental Health and Harm Reduction services, Womens and Childrens programs and Heart Health clinics. When cash flow becomes unpredictable, the organization will need to assess the high overhead services: specifically Oncology and Specialty Pharmaceutical care. VI. Duplicate Discounts a. Manufacturers argue that the rebates will address duplicate discount, however, they already use Kalderos and direct manufacturer outreach to identify duplicate discounts, therefore rebates are not required to manage duplicate discounts. b. A new model of 340B rebates can create new compliance complexity and risks. c. Medicaid already utilizes charge modifiers for proper payment and elimination of duplicate discounts; a successful process already exists for reference. VII. Rural Hospitals a. Rural hospitals have smaller financial wallets to cover expansion of administrative teams for auditing and compliance. b. Limited IT resources for rural hospitals. c. Greater financial vulnerability and reduction of patient services. VIII. Conclusion The 340B Program was designed to stretch scarce Federal resources and support patient access to care. Rebate model overhaul of the 340B program would shift financial and administrative burdens to our hospitals and risk patient access to affordable medications and care. The rebate model would cause our organization to re-create all workflows from financial to clinical and increase the risk of doing business in many rural communities. That is not the intent of the 340B program. The manufacturers, with no specific HRSA guidelines or compliance risks, should not run the 340B program, which seems to be the intent of the 340B rebate program. Upholding the 340B program, as originally intended, should remain intact so that patients are the end user recipients of any 340B savings by having access to affordable care and medications, regardless of where they live.
HRSA-2026-0001-0097(no commenter metadata)2026-03-20T04:00Z2,421 chars
Comment letter from Northern Montana hospital in Havre, Montana. Ai r N r ORTHERN MONTANA Health Care A Healthy Community Starts Here March 17, 2026 P.O. Box 1231 Havre, Montana 59501 vvvvw.NMHcare.org The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program - HHS Docket No. HRSA-2026-03042 On behalf of Northern Montana Hospital (NMH) in Havre, Montana, thank you for the opportunity to comment on the proposed 340B Rebate Model Pilot Program. NMH strongly opposes shiftingfrom the longstanding upfront discount model to any rebate-based mechanism. As a rural Critical Access Hospital, NMH does not have adequate personnel to support the significant administrative, data-submission, and reconciliation workload required under a rebate model. Our current staffing structurealready stretched to meet essential patient care needscannot absorb the additional duties that claim-level submissions and rebate tracking would impose. We also note that the rebate model is unnecessary to address duplicate discount concerns. NMH has not experienced any 340B/MDPNP deduplication issues, nor has any manufacturer ever raised such a concern with us. Our existing processes are effective and far less burdensome than what a rebate system would require. A rebate model would also create cash-flow strain by requiring NMH to pay full price for drugs and wait for reimbursement. As a rural facility, we prefer not to float high-cost drugs for any period of time. For these reasons, we urge HRSA to abandon any rebate model and instead pursue less burdensome, neutral alternatives such as a third-party clearinghouse for deduplication. Maintaining the upfront discount model is the only workable and sustainable approach for small rural hospitals like ours. Thank you for considering our comments. Sincerely, Kevin A. Harada President/CEO Northern Montana Hospital 30 - 13th Street (406)265-2211 Northern Montana Northern Montana Northern Montana Northern Montana Care Center Specialty Medical Center Family Medical Center Sletten Cancer Center 24 - 13th Street 20 - 13th Street West 1410 1st Avenue 40 - 13th Street West (406)265-2238 (406)265-7831 (406)265-5408 (406)262-6000 Quality, Caring, Service
HRSA-2026-0001-0098Allen Parish Hospital District No 3 DBA Allen Parish Community Healthcare2026-03-19T04:00Z3,843 chars
Comment from Allen Parish Community Healthcare - See attached file Allen Parish Community Healthcare A better you begins with us. HRSA March 19, 2026 RE: Response to RFI 340B Rebate Model Program To whom it may concern: A 340B rebate model as previously proposed, where rural hospitals pay upfront drug acquisition cost at the much higher WAC (wholesale acquisition cost) then wait for manufacturer rebate reimbursement, poses significant threats to the financial viability of Allen Parish Community Healthcare and all rural hospitals by disrupting cash flow and increasing operational burdens. With 48% of rural hospitals currently operating at a loss, these, along with manufacturer restrictions, jeopardize critical services like primary care, emergency care, cancer screening, and many additional healthcare services and community health programs offered by Allen Parish Community Healthcare. Key Impacts: Cash Flow and Operational Strain: Instead of upfront discounts, hospitals must purchase drugs at the Wholesale Acquisition Cost (WAC) and wait for rebates. This creates an interest-free loan to manufacturers, putting immense pressure on facilities with tight liquidity. For example: Cost analysis on the current acquisition 340B cost vs. the proposed WAC acquisition cost for the drugs purchased by our facility under this rebate model reveals that our facility would incur an increase in the upfront acquisition drug cost of these medications. This equates to a 714% up front acquisition cost increase for our rural hospital. This is neither reasonable nor sustainable for our hospital. Administrative Burden: The model requires increased staffing to track, reconcile, and dispute denied claims, a significant burden for already strained, small-staffed rural facilities. A: 108 6th Ave. Kinder, Louisiana, 70648 P: 337-738-2527 W: AllenHealth.net Allen Parish Community Healthcare A better you begins with us. Financial Instability: With ~45% of rural hospitals operating with negative margins, this model threatens the savings of our small rural hospital, with which such savings literally keep our doors open for our community Reduced Patient Access: The erosion of 340B savings will force rural hospitals to eliminate essential services forcing patients to travel long distances for care in rural areas that are already facing economic, health, and access to care disparities. In Fiscal year 2025 the 340B Drug Pricing Program afforded us the opportunity to invest approximately $500,000 of net savings toward the delivery of standard healthcare services, as well as expanded specialty services such as mammography, colorectal screening, and outpatient surgical services for our rural community. Economic Impacts: Not only does this rebate model threaten access to vital healthcare services, but it also threatens the economy of this already strained population/community. Our hospital and clinic employ 180 citizens from this community equaling $10,662,000 payroll/salaries annually. In turn, our employees invest their hard-earned dollars back into the local businesses and economy. Overall: Adoption of the 340B Rebate Model is a serious and immediate threat to the very same vulnerable population and communities in which the 340B Program was intended to serve. Rather than enforcing such restrictions, perhaps the focus should shift to a tighter enforcement of eligibility guidelines for participation in the program. Ensure the small, rural hospitals who service the underinsured and underserved communities in the country are allowed to participate while preventing large corporations who buy up the smaller struggling facilities with the sole purpose of accessing 340B eligibility. ffeerl Jackie Reviel CEO Allen Parish Community Healthcare -A: 108 6th Ave. Kinder, Louisiana, 70648 P: 337-738-2527 W: AllenHealth.net
HRSA-2026-0001-0099(no commenter metadata)2026-03-19T04:00Z9,809 chars
See attached file(s) Public Comment on HRSA 340B Rebate Model Pilot Program I am writing to provide comment on the proposed 340B Rebate Model Pilot Program and to express serious concern regarding its potential impact on Title X clinics, particularly those serving rural and frontier communities. I serve as a Clinic Director for a Title X program in rural eastern Montana, where we operate multiple clinic sites across a geographically vast and sparsely populated region. Our program serves a highly underserved population, many of whom rely on us as their only source of reproductive and preventive healthcare services. The current 340B model is essential to our ability to provide timely, affordable care. The proposed rebate model would fundamentally disrupt this system by requiring clinics to purchase medications at full cost upfront and then seek reimbursement at a later date. For small, grant-funded programs like ours, this is not financially feasible. Financial Impact and Operational Reality Under the current 340B structure, our program is able to purchase medications at significantly reduced prices. If required to purchase at full wholesale acquisition cost (WAC), the financial burden would increase dramatically: Long-Acting Reversible Contraceptives (LARCs): 340B cost: approximately $250$400 per device WAC cost: approximately $900$1,300 per device Estimated increase: $600$900 per patient For a rural program placing even 4060 devices per year, this represents an additional $24,000$54,000 annually in upfront costs Short-Acting Contraceptives (oral, patch, ring, Depo): 340B cost: often $5$30 per cycle WAC cost: $50$150+ per cycle Estimated annual increase across a modest patient panel: $10,000$25,000 STI Treatment (e.g., ceftriaxone, doxycycline, azithromycin): 340B pricing allows low-cost or no-cost treatment WAC pricing can increase per-treatment costs by 35x Estimated annual increase: $5,000$10,000 Total Estimated Financial Exposure: Our rural Title X program could be required to front $40,000$90,000 annually in medication costswhich would equal 50100% of our total grant funding. Cash Flow and Reimbursement Risk Even with eventual reimbursement, the delay creates an unsustainable gap: Quarterly reimbursement cycles leave clinics carrying large receivables HRSA eligibility determinations introduce risk of non-payment Rural clinics lack reserves or access to credit to absorb this risk Real Patient Impact Recently, we cared for a young woman in her early 20s who works hourly and lives over 60 miles from our nearest clinic site. She had already experienced one unintended pregnancy and came to us specifically requesting a long-acting reversible contraceptive so she could continue working and supporting herself. Because of the current 340B program, we were able to provide her with a same-day device at low or no cost. She did not have to return for a second visit, take additional time off work, or find transportation againbarriers that, in our community, often result in patients not returning at all. Under a rebate model, we likely would not have been able to afford to keep that device in stock or absorb the upfront cost. She would have been asked to come back at a later date or referred elsewhereoptions that are often not realistic in rural Montana. In situations like this, delays are not just inconvenientthey directly increase the likelihood of unintended pregnancy and lost opportunity for preventive care. Impact on Access to Care In rural communities, financial barriers at the clinic level become access barriers for patients: Reduced availability of LARC methods Delayed or deferred STI treatment Increased unintended pregnancies Loss to follow-up due to travel, work, and childcare constraints For many patients, there is no alternative provider within a reasonable distance. Administrative Burden The rebate model would also significantly increase administrative workload: Tracking and submitting reimbursement claims Managing denials and appeals Reconciling across multiple funding streams For small clinics, this diverts limited staff away from patient care. Conclusion The proposed rebate model shifts financial risk onto safety-net providers and undermines the purpose of the 340B program. For rural Title X clinics, this model is not workable. It would create financial instability, increase administrative burden, and reduce access to essential healthcare services for vulnerable populations. I strongly urge HRSA to reconsider this approach or provide explicit exemptions for Title X providers and rural health programs. Without these considerations, the proposed changes will weakennot strengthenthe healthcare safety net. Thank you for the opportunity to provide comment. Sincerely, Lynn L Newnam, RN, DON Family Planning Clinic Director Dawson County Family Planning Glendive, Montana 59330 Public Comment on HRSA 340B Rebate Model Pilot Program I am writing to provide comment on the proposed 340B Rebate Model Pilot Program and to express serious concern regarding its potential impact on Title X clinics, particularly those serving rural and frontier communities. I serve as a Clinic Director for a Title X program in rural eastern Montana, where we operate multiple clinic sites across a geographically vast and sparsely populated region. Our program serves a highly underserved population, many of whom rely on us as their only source of reproductive and preventive healthcare services. The current 340B model is essential to our ability to provide timely, affordable care. The proposed rebate model would fundamentally disrupt this system by requiring clinics to purchase medications at full cost upfront and then seek reimbursement at a later date. For small, grant-funded programs like ours, this is not financially feasible. Financial Impact and Operational Reality Under the current 340B structure, our program is able to purchase medications at significantly reduced prices. If required to purchase at full wholesale acquisition cost (WAC), the financial burden would increase dramatically: Long-Acting Reversible Contraceptives (LARCs): 340B cost: approximately $250$400 per device WAC cost: approximately $900$1,300 per device Estimated increase: $600$900 per patient For a rural program placing even 4060 devices per year, this represents an additional $24,000$54,000 annually in upfront costs Short-Acting Contraceptives (oral, patch, ring, Depo): 340B cost: often $5$30 per cycle WAC cost: $50$150+ per cycle Estimated annual increase across a modest patient panel: $10,000$25,000 STI Treatment (e.g., ceftriaxone, doxycycline, azithromycin): 340B pricing allows low-cost or no-cost treatment WAC pricing can increase per-treatment costs by 35x Estimated annual increase: $5,000$10,000 Total Estimated Financial Exposure: Our rural Title X program could be required to front $40,000$90,000 annually in medication costswhich would equal 50100% of our total grant funding. Cash Flow and Reimbursement Risk Even with eventual reimbursement, the delay creates an unsustainable gap: Quarterly reimbursement cycles leave clinics carrying large receivables HRSA eligibility determinations introduce risk of non-payment Rural clinics lack reserves or access to credit to absorb this risk Real Patient Impact Recently, we cared for a young woman in her early 20s who works hourly and lives over 60 miles from our nearest clinic site. She had already experienced one unintended pregnancy and came to us specifically requesting a long-acting reversible contraceptive so she could continue working and supporting herself. Because of the current 340B program, we were able to provide her with a same-day device at low or no cost. She did not have to return for a second visit, take additional time off work, or find transportation againbarriers that, in our community, often result in patients not returning at all. Under a rebate model, we likely would not have been able to afford to keep that device in stock or absorb the upfront cost. She would have been asked to come back at a later date or referred elsewhereoptions that are often not realistic in rural Montana. In situations like this, delays are not just inconvenientthey directly increase the likelihood of unintended pregnancy and lost opportunity for preventive care. Impact on Access to Care In rural communities, financial barriers at the clinic level become access barriers for patients: Reduced availability of LARC methods Delayed or deferred STI treatment Increased unintended pregnancies Loss to follow-up due to travel, work, and childcare constraints For many patients, there is no alternative provider within a reasonable distance. Administrative Burden The rebate model would also significantly increase administrative workload: Tracking and submitting reimbursement claims Managing denials and appeals Reconciling across multiple funding streams For small clinics, this diverts limited staff away from patient care. Conclusion The proposed rebate model shifts financial risk onto safety-net providers and undermines the purpose of the 340B program. For rural Title X clinics, this model is not workable. It would create financial instability, increase administrative burden, and reduce access to essential healthcare services for vulnerable populations. I strongly urge HRSA to reconsider this approach or provide explicit exemptions for Title X providers and rural health programs. Without these considerations, the proposed changes will weakennot strengthenthe healthcare safety net. Thank you for the opportunity to provide comment. Sincerely, Lynn L Newnam, RN, DON Family Planning Clinic Director Dawson County Family Planning Glendive, Montana 59330
HRSA-2026-0001-0100(no commenter metadata)2026-03-19T04:00Z18,700 chars
See attached file(s) 1 March 19, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Electra Memorial Hospital, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Electra Memorial Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Electra Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Electra Memorial Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that 2 HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Electra Memorial Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Electra Memorial Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Electra Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Additional Time/Personnel needed to operate the 340B Model Rebate Pilot Program o Current Administrative 0.5 FTE will increase to a possible 1.5 FTE Approximately $120,000 o Current 1.5 FTE for 340B will need to be increased to 2.5 or 3. Approximately $80,000 o Start up Cost 160 Hours between Admin and Operational Cost Approximately $15,000 Vendor Cost Current Vendor Cost is $60,000 Additional estimated cost could be $30,000. Including set up time and fees. Office Cost o Current office space is not available to house any more staff at our current locations. Offices must be added or leased Estimated Cost $50,000 3 Staffing Impacts Under a Potential 340B Rebate Program. Electra Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. Additional staff of 1 administration and 1.5 operational staff will be needed to complete additional duties o Operational Staff Claims Management Retail Pharmacy is built on the cost of a prescription being known at the time of dispensing. If the drug is purchased at WAC and then a rebate is needed to determine the final cost, additional staff time is needed up front to ensure that the prescription will not produce a negative return. Once a prescription leaves a pharmacy it cannot be returned. If an item leaves and produces a negative return the pharmacy has no choice but to take the loss. Rebate Management With the addition of the Medicare rebate program, we have learned that additional staff is necessary to track and reconcile the rebates. o Administrative Staff With the addition of staff there is always a need for supervision of those staff. Supervision in pharmacies is performed by the pharmacist, which is expensive due to their education and skill set. The Pharmacist in this case will need 340B training or experience. Both will cause us to incur additional expenses. o HRSA estimates of 5 additional hours per week is a vast understatement of the time needed to undertake a rebate model. Estimate for Electra Memorial Hospital Operational Time o Additional time needed for medication ordering/receiving 0.5 Hours x 5 days x 3 Pharmacies 7.5 hours/week o Rebate/Claims Processing 1 Hour x 5 days x 3 Pharmacies 15 Hours/week o Additional Estimated time for RX filling 2 hours x 2 Pharmacies x 5 days plus 1 hour x 1 Pharmacy x 5 days 4 1 hour x 1 day x 2 pharmacies 27 hours o Pharmacy Computer system management o 0.5 hours x 6 Days x 2 Pharmacies 6 Hours Administrative Staff o Additional employee management/oversite 5 Hours Weekly o Program Oversite 10 Hours weekly o Additional time to Check Prescriptions 15 Hours Weekly Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Electra Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Outpatient Pharmacy is built on a system of upfront payment for medications that are dispensed. Rebates do not allow this system to work efficiently. o Medication will have to be filled at a loss. Reimbursement from Insurance Companies and Pharmacy Benefit Management companies are well below WAC. o Wholesalers are indicating that they will no longer provide discounts on 340B medications that are bought at WAC. Loss of around $5,000 annually Current Pharmacy computer systems were not built for medication rebates. o Pharmacy Technicians/administrative staff must go back into the systems and receive payments manually and adjust daily to reconcile. Current Interfaces were not built with 340B rebates in mind. o Hospital EHR requires between $10,000 and $15,000 for changes to the current interface to add additional data for the rebate. o Current Retail Switch Data that is sent daily to the TPA has not been configured in a way to submit the required data. Current Problems seen with Medicare rebate that will carry over to 340B rebate Model. 5 o Data is sent and deidentified (scrubbed for PHI) by the third party and creates a nightmare for trying to match the data back to the actual claim that is being paid. o No way to automate the Rebate/claims reconciliation process because the matching back up of the data is a manual process that is time consuming. o Payment takes 30 to 45 days. o There is no way the drug manufacturers can receive data, process, and give payment to the CE within 10 days. Medicare rebate program is proof. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. o We do not currently provide any Data to ESP except for claims at one Contract Pharmacy that accounts for less than 20 prescriptions per month. o New restrictions being applied will eliminate this pharmacy at the end of the month. o Reporting to 340B ESP will require data to be submitted on two Covered Entity owned pharmacies and claims from outpatients at the critical access hospital the will require: o Changes to two different computer systems o TPA involvement on reformatting data and adding additional data fields o Interface changes and additions o Data is Currently being collected but does not meet all the requirements that the rebate model will Require. Significant Changes will need to be made, unlike the OPAs assumption that all the data is already being collected. o Hospital currently does not send specific insurance information across to the TPA, rather reports if it is commercial, Medicare, or Medicaid. This does not supply specific insurance information such as policy number. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Electra Memorial Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. 6 o Payment timing will be a significant burden to the Hospital and their ability to operate. o 70% of the prescriptions filled by the Hospitals pharmacies qualify for 340B Currently the hospital purchases, on average, about $250,000 worth of medications bimonthly, with payment required within 7 days. Rebate model could double that to $500,000 with payment required in 7 days. o With the lessons learned over the first two months of the Medicare rebate program it is obvious that there is no way the drug companies could provide reimbursement with-in 10 days. Often times it takes between 30 and 45 days for any payment to be received. Certainly, they could not provide the rebate in time for us to pay our wholesaler. o This increase would be a significant strain on cash flow and the ability of the hospital to have enough cash on hand to operate. o We currently operate with only 40 days cash on hand. Paying full price for drugs and waiting for the rebate would lower that to only 20 days, risking our ability to make payroll and meet other obligatory timelines. o HUD loan covenants require us to maintain financial liquidity ratios that would be impossible to maintain with lower cash on hand and higher receivables. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Electra Memorial Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The impact of these incremental costs will be devastating to our facility. o We will no longer be able to pay our vendors in a timely manner. If we have to float Big Pharma, our vendors will have to float us. o Clinical staff will have to be cut to increase the number of administrative staff required to track and recover rebates. o Replacement of radios and purchase of a ventilator for our EMS service along with purchase of new monitors for the emergency room and inpatient services have all been paused in anticipation of this drain on cash flow. o Uncertainty over whether HRSA will proceed with a rebate program has affected our hospitals financial planning not only for the previously mentioned projects, but also for future hiring and education positions that will likely not be filled. 7 We are the sole provider of health care in the two communities we serve, and as a critical access hospital with 3 rural health clinics, we are required to offer our financial assistance program to all that qualify. This includes a disproportionate number of Medicare, Medicaid and uninsured patients. Our covered entity-owned pharmacies and our only contract pharmacy are the only pharmacies in our communities. A 340B Rebate Program will force us to remove high- cost drugs from our stock because we cannot afford to float the difference between the full price and the 340B price. This will cause our patients to have even greater difficulty accessing the medication they need, and likely result in hospitalizations. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Electra Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. A change to a rebate mechanism will put serious strain to our cash on hand. That could affect our: o Ability to make Payroll o Pay Medication Wholesale Invoices o Provide Charity Care when needed Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 8 In the weeks before the last rebate system was to be launched beacon provided education. However, they could not run any demos on our specific data to show what was expected. Beacon also is in charge of the Medicare rebate program. It is obvious that this company is not neutral and favors the manufactures over the Covered Entity. o When inquiring about specific rebates, Beacon says that data has to be provided to ESP, a website and program they own also. Any model that is proposed should include a neutral party. Not one that is paid by the Drug Manufacturers. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Electra Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide an explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Electra Memorial Hospital has worked diligently with all manufacture inquires. A Third-Party rebate model is not the answer to the problems that have been created by the manufactures. Duplicate discounts to Medicare and Medicaid are few and far between when you review any of the HRSA audit findings. Manufacturers are wanting ALL prescription data to avoid discounts to PBM and Insurance Companies on drugs they have given a 340B discount. o The complexity of the Drug Pricing Program and discounts and incentives being paid has become too complicated to manage. The only way manufactures can deal with the program they have helped design is to get ALL of the end user data. Duplicate Discounts at Electra Memorial are taken very seriously. o A TPA is used to monitor and make sure that Medicaid prescriptions are not purchased with 340B pricing. 9 o Hospital outpatient medications are filed with Modifiers to ensure that Medicaid and Medicare know 340B purchased medications were used. For all of these reasons, Electra Memorial Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Electra Memorial Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Rebecca McCain CEO Electra Memorial Hospital Electra, Texas
HRSA-2026-0001-0101Susan Fisher · Reno, NV, United States2026-03-20T04:00Z1,659 chars
To whom it may concern, I serve on the board of directors of Northern Nevada HOPES, a community-based and award-winning organization that serves our most vulnerable population; homeless and/or imminently homeless, those with alcohol or substance additions, and those with mental health and behavioral health issues. I am writing as an individual member of my community and a strong supporter of NNHOPES' mission. I join HOPES in strong opposition to the proposed rebate model. This approach would impose significant financial and operational burdens on safety-net providers by requiring large upfront drug purchases, increasing compliance complexity, and shifting financial risk onto organizations that already operate on very thin margins. For a safety-net provider like HOPES, this model would divert limited resources away from patient care and inevitably result in reductions to services, staffing, or access in order to absorb the costs of upfront purchasing and expanded compliance requirements. We are particularly concerned that HRSA is moving forward with implementation plans thatwould include drugs subject to Medicare Maximum Fair Prices in 2026 and 2027 prior to fully receiving and considering public comment. Advancing such a significant policy change without meaningful stakeholder input risks serious unintended consequences for federally qualified health centers and the patients they serve. We urge HRSA to pause implementation, conduct a comprehensive impact analysis on safety-net providers, and engage directly with health centers before advancing changes that could undermine access to care for vulnerable populations. Thank you.
HRSA-2026-0001-0102Don Robbins · Metropolis, IL, United States2026-03-20T04:00Z11,301 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Massac Memorial Hospital in Metropolis, IL we are grateful for the opportunityto comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Massac Memorial Hospital in Metropolis, IL that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Massac Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commentors to include supporting facts, research, and evidence in their responses. Massac Memorial Hospital in Metropolis, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs means more claims to submit, more rebates to track and reconcile, more money that we will need to float to the drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Massac Memorial Hospital can spend on patient care and comprehensive health services. Administrative Costs Under A Potential 340B Rebate Program: Any rebate program would require Massac Memorial Hospital in Metropolis, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Massac Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. We would have to pay an outside entity to help us extract the data needed from our EMR and put it into a format suitable for ESR We already have staffing restraints on Information Systems Analysts and will have to outsource that knowledge and expertise to create a file for submission. This has been quoted at $2,500 just to create the file and extract the needed data fields from our EMR. Other cost drivers would be increased staffing. We currently go above and beyond to prevent any type of diversion with 340B claims. We currently review 100% of contract pharmacy claims. We can not fight for rebates and monitor the integrity of that process and continue to care for program integrity without additional staff. This would be an ongoing cost for this additional FTE. This would cost the hospital around $48,000 per. year. These additional expenditures would cover claims processing, data submission, reconciliation of rebates, and additional compliance concerns unknown to us at this time. We will also have additional fees to our TPA to facilitate uploads of data. With the assumption that the consultant group we pay for an added layer of guidance and program integrity will increase as well. We would have to exclude these drugs from our split bill savings to our hospital because we would be paying out more money to manage the rebates than we receive in savings currently. All of the extra time, hiring, labor, training, education, and support tal<e away from us doing what we are here to do. That is to take care of patients in our rural community. This added layer of burden will ultimately impact the patients we serve. Staffing Impacts Under a Potential 340B Rebate Program: Massac Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. We would need an additional FTE in addition to current staff additional training and education. This hiring process is concerning because we already live in a rural community where Information Analyst positions are proving difficult to fill. HRSA estimated 2 hours of additional work per week with the rebate program. That is grossly underestimated. I would invite anyone to review our current workload for 340B and the amount of time and attention we give to program integrity. Not to mention the amount of money we currently pay out to manage the program and place high priority on compliance and integrity. This would divert additional time from patients and program integrity and would tip the scales to needing an additional employee to manage the rebate process. Working to reconcile rebates and rejections would be a daily task. Once rejections become reality, it will take time to drill down to the issue and correct issues. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Massac Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Additional funds would be needed for any data extraction and reporting. Each report needed is quoted at $2,500. We have already run into roadblocks with providing medical claims data. Relying on other staff and departments to piece together a puzzle. We will have to manually run this report each day and upload to ESR This would be an additional task for the added FTE. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESR That is simply not true. Massac Memorial Hospital utilizes reporting from TPAs, consultant groups, and internal data sources. We would have to pull medical claims data in a different format which would require a manual daily upload. We have not currently been able to get a report of claim level data that includes the claim line. It has already proven to be a pain spot and would require further funds be spent to extract this data in a different way for any type of automatic upload. Reliance Interests: The RFI expressly invites comment on "reliance interests in continuingto obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount." Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Massac Memorial Hospital reasonably relied on this historywhen designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Our financials are budgeted with the upfront savings from prior years. These guide planning and projects to serve patients better in future years. If this is disrupted, it will take time to see how the hospital fairs in the change before utilizing those funds for patient centered uses, such as transportation. Efforts to Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Massac Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSAto adopt a third-party clearinghouse, ratherthan a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neitherviable nor less costlythan a rebate mechanism. At this point, no drug company has raised a 340B/MDPNP deduplication issue with Massac Memorial Hospital to date. If they raised an issue, we would certainly work hand in hand for program integrity. For all the reasons communicated, Massac Memorial Hospital in Metropolis, IL respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Massac Memorial Hospital in Metropolis, IL and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details. A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the program. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications forthe millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Don Robbins Chief Executive Officer Massac Memorial Hospital 28 Chick Street Metropolis, IL 62960
HRSA-2026-0001-0103CapitalRx2026-03-23T04:00Z11,437 chars
See attached file(s) CORPORATE MAILING ADDRESS 228 Park Avenue South Suite 87234, New York, NY 10003 (888) 617-6521 info@cap-rx.com www.judi.health Capital Rx 340B RFI Response Capital Rx responds to this RFI as a vendor to many Covered Entities and hospitals who utilize the 340B program to help uninsured and indigent communities and individuals gain access to significant discounts utilizing the 340B program in accessing their needed medications. Our customers also use 340B to further their mission of serving the healthcare needs of their communities and stretch their capital to provide excellent services. Lastly, our customers utilize the 340B program for their employees and their family members who qualify as patients for the 340B program to drive down costs. Our team at Capital Rx has been involved in 340B for 20 years. We have very deep experience working with Covered Entities, Drug Manufacturers and Contract Pharmacies and sit in a neutral position within the stakeholders as we make no money off of this program as we help the stakeholders solve the duplicate discount issue. Our interests began with submitting for rebate payments via the benefit programs we have built for our Covered Entity customers. A few years ago, in an attempt to stop duplicate discounts, drug manufacturers began data mining publicly available data to determine pharmacies most likely to be processing 340B claims. This included Covered Entity owned in-house pharmacies. When their data mining found that a pharmacy was likely processing 340b claims, they stopped paying rebates to that Covered Entities in-house pharmacy. The issue with 340B is and has always been that there is no transparency with the 340B claims. With the rapid growth of 340B, it undoubtedly resulted in abuse of the program. Some intentional and some unintentional. Capital Rxs interest is exclusively in doing the right thing and solving the duplicate discount issue and as a result other issues that have arisen such as the alternative distribution problem where some Covered Entities have aggregated dispenses from their contract pharmacies thru their in- house pharmacy. When replenishment occurs, they re-distribute the drugs to their contract pharmacy network. Drug Manufactures offered a solution a few years ago via 340B ESP (A BRG Company). Pharma felt that this solution would solve for transparency and the duplicate discounts issues. This has largely failed for a few primary reasons: Not consistently applied by all of pharma, it does not solve the problem In house pharmacies data are not being submitted Distrust, pharma is not entitled to the data Capital Rx sits in a unique position with 340B Stakeholders. We are a healthcare technology company. We make no money on rebates and as a result, we are completely neutral within 340B. Our only interest is to solve the problems of duplicate discount and alternative distribution and do the right thing. Working with our customers and drug manufacturers, we have created a solution that will solve duplicate discounts, alternative distribution, and transparency. Our solution works because: CORPORATE MAILING ADDRESS 228 Park Avenue South Suite 87234, New York, NY 10003 (888) 617-6521 info@cap-rx.com www.judi.health We sit neutral in the market. Our interest is to simply solve the issues of duplicate discounts and alternative distribution. We can aggregate all our customers 340B claims, including in house and contract pharmacies for all patients within 340b (all identified 340B claims, most conservative). We recognize a claim is not 340B until its replenished. Our solution becomes the most conservative approach for drug manufacturers and removes the need to reconcile the very complex world of chargeback credits to claims When we submit a rebate file, we can represent that all 340B claims have been removed from rebate submissions, and we credit the rebate file for older claims that flip to 340B where a rebate was paid. Our rebate file is cumulatively accurate when submitted. Pharma can access this data base by submitting their rebate files for scrubbing. We push back to Pharma a scrubbed rebate file clean of 340B claims for our customers. Pharma and PBMs will be charged a per claim fee for the solution. When completed, this solution will eventually become an industry utility where all PBMs, Payors and Pharma can engage. Benefits compared to the proposed rebate pilot program Covered Entities DO NOT need to purchase the drugs at WAC. They can continue to purchase at 340B and submit claims to our 340B data base All data will be completely fire-walled and protected. The issues surrounding 340B ESP will not exist here. The data will be completely protected. Covered Entities will instruct their 340B TPAs to provide us the data. There is no drain on resources for the Covered Entities. The costs for the services are Bourne by PBMs, Payors and Pharma. There is NO COST to Covered Entities that participate. It should also be noted that implementing this program significantly lifts the integrity of the 340B program and eliminates the issues surrounding duplicate discounts and alternative distribution. All this data would be made available to HRSA, Pharma and Covered Entities for auditing as needed. Covered Entities will be able to access a full suite of reports to support HRSA auditing efforts. Finally, implementing this program solves the issues going forward. There remains a sizeable issue reconciling the past. This solution will also allow for efficiently reconciling of past 340B claims vs rebates paid. If the result of the reconciliation is monies are due to either Pharma or Covered Entities, reasonable accommodations between the parties should be made to facilitate an equitable financial true up. Capital Rx 340B RFI Response Capital Rx responds to this RFI as a vendor to many Covered Entities and hospitals who utilize the 340B program to help uninsured and indigent communities and individuals gain access to significant discounts utilizing the 340B program in accessing their needed medications. Our customers also use 340B to further their mission of serving the healthcare needs of their communities and stretch their capital to provide excellent services. Lastly, our customers utilize the 340B program for their employees and their family members who qualify as patients for the 340B program to drive down costs. Our team at Capital Rx has been involved in 340B for 20 years. We have very deep experience working with Covered Entities, Drug Manufacturers and Contract Pharmacies and sit in a neutral position within the stakeholders as we make no money off of this program as we help the stakeholders solve the duplicate discount issue. Our interests began with submitting for rebate payments via the benefit programs we have built for our Covered Entity customers. A few years ago, in an attempt to stop duplicate discounts, drug manufacturers began data mining publicly available data to determine pharmacies most likely to be processing 340B claims. This included Covered Entity owned in-house pharmacies. When their data mining found that a pharmacy was likely processing 340b claims, they stopped paying rebates to that Covered Entities in-house pharmacy. The issue with 340B is and has always been that there is no transparency with the 340B claims. With the rapid growth of 340B, it undoubtedly resulted in abuse of the program. Some intentional and some unintentional. Capital Rxs interest is exclusively in doing the right thing and solving the duplicate discount issue and as a result other issues that have arisen such as the alternative distribution problem where some Covered Entities have aggregated dispenses from their contract pharmacies thru their in-house pharmacy. When replenishment occurs, they re-distribute the drugs to their contract pharmacy network. Drug Manufactures offered a solution a few years ago via 340B ESP (A BRG Company). Pharma felt that this solution would solve for transparency and the duplicate discounts issues. This has largely failed for a few primary reasons: Not consistently applied by all of pharma, it does not solve the problem In house pharmacies data are not being submitted Distrust, pharma is not entitled to the data Capital Rx sits in a unique position with 340B Stakeholders. We are a healthcare technology company. We make no money on rebates and as a result, we are completely neutral within 340B. Our only interest is to solve the problems of duplicate discount and alternative distribution and do the right thing. Working with our customers and drug manufacturers, we have created a solution that will solve duplicate discounts, alternative distribution, and transparency. Our solution works because: We sit neutral in the market. Our interest is to simply solve the issues of duplicate discounts and alternative distribution. We can aggregate all our customers 340B claims, including in house and contract pharmacies for all patients within 340b (all identified 340B claims, most conservative). We recognize a claim is not 340B until its replenished. Our solution becomes the most conservative approach for drug manufacturers and removes the need to reconcile the very complex world of chargeback credits to claims When we submit a rebate file, we can represent that all 340B claims have been removed from rebate submissions, and we credit the rebate file for older claims that flip to 340B where a rebate was paid. Our rebate file is cumulatively accurate when submitted. Pharma can access this data base by submitting their rebate files for scrubbing. We push back to Pharma a scrubbed rebate file clean of 340B claims for our customers. Pharma and PBMs will be charged a per claim fee for the solution. When completed, this solution will eventually become an industry utility where all PBMs, Payors and Pharma can engage. Benefits compared to the proposed rebate pilot program Covered Entities DO NOT need to purchase the drugs at WAC. They can continue to purchase at 340B and submit claims to our 340B data base All data will be completely fire-walled and protected. The issues surrounding 340B ESP will not exist here. The data will be completely protected. Covered Entities will instruct their 340B TPAs to provide us the data. There is no drain on resources for the Covered Entities. The costs for the services are Bourne by PBMs, Payors and Pharma. There is NO COST to Covered Entities that participate. It should also be noted that implementing this program significantly lifts the integrity of the 340B program and eliminates the issues surrounding duplicate discounts and alternative distribution. All this data would be made available to HRSA, Pharma and Covered Entities for auditing as needed. Covered Entities will be able to access a full suite of reports to support HRSA auditing efforts. Finally, implementing this program solves the issues going forward. There remains a sizeable issue reconciling the past. This solution will also allow for efficiently reconciling of past 340B claims vs rebates paid. If the result of the reconciliation is monies are due to either Pharma or Covered Entities, reasonable accommodations between the parties should be made to facilitate an equitable financial true up.
HRSA-2026-0001-0104Eastern Plains Healthcare Consortium2026-03-24T04:00Z15,134 chars
See attached file(s) Eastern Plains Healthcare Consortium Representing 13 independent rural member hospitals across eastern Colorado March 13, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Eastern Plains Healthcare Consortium (EPHC) appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a rebate model for the 340B Drug Pricing Program. EPHC represents 13 independent rural member hospitals across eastern Colorado that work together to preserve access to essential healthcare services in frontier and geographically isolated communities. For our member hospitals, the statutory 340B point-of-sale discount is not an abstract policy issue - it is a practical tool that helps sustain pharmacy access, support clinical services, and stretch scarce resources in communities with limited healthcare infrastructure. Our responses below reflect the operational, financial, and compliance realities shared across EPHC member hospitals when evaluating a rebate-based model. Administrative Cost Impact The implementation of a rebate-based purchasing model would significantly increase administrative workload for EPHC member hospitals. Based on the size, staffing models, and pharmacy volume of our members, we anticipate additional administrative costs would range from roughly $500 to $2,500 per month per hospital, with some facilities potentially incurring even higher costs during implementation or dispute periods. These estimates reflect additional staff time for claim-level reconciliation, rebate tracking, accounting adjustments, exception handling, coordination with third-party administrators, and dispute resolution with manufacturers. Payment Timing and Cash Flow Implications The timing of rebate payments presents a major concern for EPHC member hospitals, many of which operate on negative or very narrow margins and do not have the cash reserves to absorb prolonged delays in 340B reimbursement. Current pharmacy market conditions provide a clear example. The Maximum Fair Pricing (MFP) process and rebate mechanisms were originally intended to be linked. However, when the broader rebate model was withdrawn and the MFP process still moved forward, pharmacies and covered entities were left with significant reconciliation challenges. Member hospitals and pharmacies have reported challenges including: Difficulties linking de-identified claims in the Beacon MFP platform with the Medicare Transaction Facilitator. Incorrect identification of prescriptions as 340B eligible. Accounting corrections issued months after transactions. Across our membership, delayed or inaccurate rebate payments could create substantial operational risk, particularly for hospitals that rely on timely pharmacy savings to support patient care and day-to-day cash flow. Implications if a Rebate is Denied If a manufacturer denies or delays a rebate, the covered entity bears the financial risk. Industry discussion has documented repeated instances in which pharmacies and covered entities attempted to resolve rebate discrepancies with manufacturers but received little or no timely response. In some cases, providers were told to elevate concerns to federal agencies, yet no practical mechanism existed to compel prompt payment or correction. For EPHC member hospitals, delays beyond a proposed 10-day payment window could create cash flow exposure ranging from tens of thousands of dollars to, for some hospitals, more than $100,000 depending on drug mix, prescription volume, and payer composition. That level of uncertainty is not sustainable for rural providers. Impact on Data Collection and Reporting A rebate model would significantly complicate internal data collection and financial reconciliation processes across our membership. Currently, member hospitals must already devote meaningful time to verifying 340B-related transactions and ensuring that expected funds are received. Third-party administrators and manufacturers often use inconsistent reporting formats. For example: Some TPAs report the price paid for the drug. Others report the post-rebate price. These inconsistencies make financial reconciliation difficult and would create major operational barriers for member hospitals trying to track savings accurately, support financial oversight, and where applicable pass assistance through to patients. In addition, member hospitals are already required to spend significant time each month submitting data to manufacturer-owned platforms such as 340B ESP. Much of the information needed for Maximum Fair Pricing can already be obtained through these existing systems. Requiring covered entities to duplicate that work under a rebate model would be costly, unnecessary, and burdensome. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers frequently raise concerns regarding duplicate discounts. However, duplicate discounts are defined in statute only in relation to Medicaid. Pharmaceutical manufacturers have voluntarily negotiated rebate arrangements with pharmacy benefit managers for Medicare and commercial insurance markets. Those private rebate agreements are not part of the 340B statutory framework and should not shift operational burdens onto rural covered entities. Manufacturers already have the ability to audit covered entities when reasonable cause exists. In practice, those audits are relatively uncommon because reasonable cause is not easily established. Reporting Requirements Current rebate reporting tools are insufficient for financial oversight. Participants working with the Beacon rebate platform have noted that available reporting does not adequately support financial reconciliation. Basic accounting reports needed by CFOs and finance departments to reconcile deposits against bank activity were not initially built into the platform in a meaningful way. Without robust, standardized, and auditable reporting functionality, member hospitals would face major accounting and compliance challenges under a rebate model. Impact on the Integrity of the 340B Program EPHC believes a rebate model fundamentally undermines the statutory framework of the 340B program. The governing statute requires pharmaceutical manufacturers to provide covered outpatient drugs to covered entities at the 340B ceiling price at the time of purchase. Replacing that statutory discount with a rebate mechanism introduces uncertainty as to whether and when the covered entity will actually receive the required pricing. If rebate payments are delayed, disputed, or denied, member hospitals are effectively forced to purchase drugs at wholesale acquisition cost and wait for relief that may never arrive. That result is inconsistent with the statutory design and intent of the 340B program. In conclusion, Eastern Plains Healthcare Consortium strongly encourages HRSA to maintain the existing point-of-sale discount structure of the 340B program. A rebate-based model would introduce unnecessary financial risk, administrative burden, and operational complexity for rural member hospitals that depend on 340B savings to preserve access to care in eastern Colorado communities. This uncertainty directly threatens patient access to medications and the ability of rural hospitals to sustain essential pharmacy and clinical services. Eastern Plains Healthcare Consortium Representing 13 independent rural member hospitals across eastern Colorado March 13, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Eastern Plains Healthcare Consortium (EPHC) appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a rebate model for the 340B Drug Pricing Program. EPHC represents 13 independent rural member hospitals across eastern Colorado that work together to preserve access to essential healthcare services in frontier and geographically isolated communities. For our member hospitals, the statutory 340B point-of- sale discount is not an abstract policy issue - it is a practical tool that helps sustain pharmacy access, support clinical services, and stretch scarce resources in communities with limited healthcare infrastructure. Our responses below reflect the operational, financial, and compliance realities shared across EPHC member hospitals when evaluating a rebate-based model. Administrative Cost Impact The implementation of a rebate-based purchasing model would significantly increase administrative workload for EPHC member hospitals. Based on the size, staffing models, and pharmacy volume of our members, we anticipate additional administrative costs would range from roughly $500 to $2,500 per month per hospital, with some facilities potentially incurring even higher costs during implementation or dispute periods. These estimates reflect additional staff time for claim-level reconciliation, rebate tracking, accounting adjustments, exception handling, coordination with third-party administrators, and dispute resolution with manufacturers. Payment Timing and Cash Flow Implications The timing of rebate payments presents a major concern for EPHC member hospitals, many of which operate on negative or very narrow margins and do not have the cash reserves to absorb prolonged delays in 340B reimbursement. Current pharmacy market conditions provide a clear example. The Maximum Fair Pricing (MFP) process and rebate mechanisms were originally intended to be linked. However, when the broader rebate model was withdrawn and the MFP process still moved forward, pharmacies and covered entities were left with significant reconciliation challenges. Member hospitals and pharmacies have reported challenges including: Difficulties linking de-identified claims in the Beacon MFP platform with the Medicare Transaction Facilitator. Incorrect identification of prescriptions as 340B eligible. Accounting corrections issued months after transactions. Across our membership, delayed or inaccurate rebate payments could create substantial operational risk, particularly for hospitals that rely on timely pharmacy savings to support patient care and day-to-day cash flow. Implications if a Rebate is Denied If a manufacturer denies or delays a rebate, the covered entity bears the financial risk. Industry discussion has documented repeated instances in which pharmacies and covered entities attempted to resolve rebate discrepancies with manufacturers but received little or no timely response. In some cases, providers were told to elevate concerns to federal agencies, yet no practical mechanism existed to compel prompt payment or correction. For EPHC member hospitals, delays beyond a proposed 10-day payment window could create cash flow exposure ranging from tens of thousands of dollars to, for some hospitals, more than $100,000 depending on drug mix, prescription volume, and payer composition. That level of uncertainty is not sustainable for rural providers. Impact on Data Collection and Reporting A rebate model would significantly complicate internal data collection and financial reconciliation processes across our membership. Currently, member hospitals must already devote meaningful time to verifying 340B- related transactions and ensuring that expected funds are received. Third-party administrators and manufacturers often use inconsistent reporting formats. For example: Some TPAs report the price paid for the drug. Others report the post-rebate price. These inconsistencies make financial reconciliation difficult and would create major operational barriers for member hospitals trying to track savings accurately, support financial oversight, and where applicable pass assistance through to patients. In addition, member hospitals are already required to spend significant time each month submitting data to manufacturer-owned platforms such as 340B ESP. Much of the information needed for Maximum Fair Pricing can already be obtained through these existing systems. Requiring covered entities to duplicate that work under a rebate model would be costly, unnecessary, and burdensome. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers frequently raise concerns regarding duplicate discounts. However, duplicate discounts are defined in statute only in relation to Medicaid. Pharmaceutical manufacturers have voluntarily negotiated rebate arrangements with pharmacy benefit managers for Medicare and commercial insurance markets. Those private rebate agreements are not part of the 340B statutory framework and should not shift operational burdens onto rural covered entities. Manufacturers already have the ability to audit covered entities when reasonable cause exists. In practice, those audits are relatively uncommon because reasonable cause is not easily established. Reporting Requirements Current rebate reporting tools are insufficient for financial oversight. Participants working with the Beacon rebate platform have noted that available reporting does not adequately support financial reconciliation. Basic accounting reports needed by CFOs and finance departments to reconcile deposits against bank activity were not initially built into the platform in a meaningful way. Without robust, standardized, and auditable reporting functionality, member hospitals would face major accounting and compliance challenges under a rebate model. Impact on the Integrity of the 340B Program EPHC believes a rebate model fundamentally undermines the statutory framework of the 340B program. The governing statute requires pharmaceutical manufacturers to provide covered outpatient drugs to covered entities at the 340B ceiling price at the time of purchase. Replacing that statutory discount with a rebate mechanism introduces uncertainty as to whether and when the covered entity will actually receive the required pricing. If rebate payments are delayed, disputed, or denied, member hospitals are effectively forced to purchase drugs at wholesale acquisition cost and wait for relief that may never arrive. That result is inconsistent with the statutory design and intent of the 340B program. In conclusion, Eastern Plains Healthcare Consortium strongly encourages HRSA to maintain the existing point-of-sale discount structure of the 340B program. A rebate-based model would introduce unnecessary financial risk, administrative burden, and operational complexity for rural member hospitals that depend on 340B savings to preserve access to care in eastern Colorado communities. This uncertainty directly threatens patient access to medications and the ability of rural hospitals to sustain essential pharmacy and clinical services.
HRSA-2026-0001-0105(no commenter metadata)2026-03-24T04:00Z4,914 chars
See Attached Hospital & Health System Blair Fort Calhoun Tekamah March 18th, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Community Hospital and Health System (MCH) in Blair, Nebraska, I appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information: 340B Rebate Model Pilot Program. This RFI asks, among other things, whether HRSA should replace the longstanding upfront discount model with a rebate-based mechanism. For the reasons outlined below, it should not. Any rebate mechanism would impose substantial administrative, financial, and operational burdens on MCH that far outweigh any potential benefit. HRSA's own estimates demonstrate the magnitude of these costs. More fundamentally, the premise that HRSA must balance the interests of drug manufacturers against those of 3408 covered entities misapprehends the statute's purpose. Congress directed HRSA to ensure that covered entities can stretch scarce federal resources to reach more eligible patients and provide more comprehensive services. Preserving the upfront discount model is the most effective and reliable way to fulfill that mandate. The RFI encourages commenters to provide supporting facts and data. MCH has done so to the best of our ability within the limited timeframe available. For cost-modeling purposes, we assumed any future rebate program would include both the drugs previously approved under HRSA's original rebate pilot and those approved for 2027 under the Medicare Drug Price Negotiation Program. As the number of covered drugs and participating manufacturers increases, so do claims submissions, reconciliation activities, dispute risk, and the amount of capital hospitals must advance while awaiting statutory discountsleaving fewer resources available for patient care. A rebate-based model would significantly increase administrative and compliance costs, require additional staffing that rural hospitals like ours do not have, and force costly changes to IT systems built around an upfront discount framework. Based on national estimates and internal modeling, MCH's annual administrative costs would increase by $75,000 to $250,000, IT implementation costs could reach $300,000, and ongoing system costs would be substantial. Most concerning, upfront drug acquisition costs for IRA-affected medications would increase from approximately $64,000 annually to more than $1.5 million, a more than twenty-fold increase. 810 N. 22nd Street | Blair, Nebraska 68008 | Phone: 402.426.2182 | www.mchhs.org Memorial Community Hospital & Health System Blair Fort Calhoun Tekamah For a critical access hospital operating on thin margins, advancing drug purchases at that scale materially alters financial planning assumptions and introduces risk that must be actively managed. These added burdens would directly reduce the resources available for patient care in the Blair community. MCH's 340B savings are not excess revenuethey are essential to sustaining services that would otherwise be unavailable in a rural setting. Over the past several years, those savings have enabled us to expand oncology, infusion, and specialty services so patients can receive care close to home. Diverting those dollars to administrative overhead, IT systems, and cash-flow management would threaten the continued availability of these services and negatively affect patient access and outcomes. MCH has also consistently maintained strong safeguards to prevent duplicate discounts. No manufacturer has ever raised a duplicate-discount concern with us. We employ dedicated staff, contract with specialized third-party administrators, conduct routine audits, and use real-time claim scrubbing and Medicaid carve-in and carve-out controls. Imposing a rebate model would add complexity and cost without improving program integrity. For all of these reasons, MCH respectfully submits that the costs of any 340B rebate program would exceed any anticipated benefit. HRSA should abandon the rebate concept and instead pursue less burdensome alternatives, such as a neutral third-party clearinghouse. If HRSA nevertheless proceeds, covered entities must be afforded a meaningful opportunity to comment on the specific design and operational details of any proposed program before implementation. Thank you for your consideration of these comments and for your continued engagement on an issue with profound implications for rural hospitals and the patients we serve. Sincerely, MiBame Manuela Banner, RN, MHA, FACHE President & Chief Executive Officer 810 N. 22d Street | Blair, Nebraska 68008 | Phone: 402.426.2182 | www.mchhs.org
HRSA-2026-0001-0106Community Memorial Healthcare2026-03-25T04:00Z916 chars
We are a small CAH facility with limited staff. We do not have the luxury of maintaining a dedicated 340B staff. The rebate program will put a tremendous amount of expense dedicated to upfront costs regarding purchasing medications at full price and then waiting for manufacturers to offer the rebate. It will also put tremendous expenses on our facility for the implementation of this program. Our EHR would need to undergo many changes to become compliant with the proposed rebate programs data points. This would cause our facility to create a manual reporting process that is very labor intense. This increase in cost surrounding our currently very compliant 340B program may put us at risk of continuing in the 340B program. Without the 340B program our facility will be at greater risk to provide many services to our community including (but not limited to) the ability to offer charity care and home health.
HRSA-2026-0001-0107(no commenter metadata)2026-03-27T04:00Z5,970 chars
See Attached 6W-1 Nevada 1 1 Hospital Association 5190 Neil Road Suite 400 Reno, NV 89502 (775) 827-0184 Fax (775) 827-0190 March 12, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of the 340B hospitals in Nevada, we appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly urge HRSA not to replace the longstanding upfront discount structure of the 340B program with a rebate-based model. The current upfront discount system has allowed covered entities to reliably access 340B savings and use those resources to expand care for underserved patients and communities. Shifting to a rebate model would introduce significant operational burdens, financial uncertainty, and administrative costs that would ultimately undermine the program's core purpose. First, a rebate mechanism would create substantial administrative complexity for covered entities. Hospitals have built their compliance, pharmacy operations, and technology systems around the existing upfront discount model. Transitioning to a rebate system would require new claims submission processes, data tracking, reconciliation activities, dispute resolution mechanisms, and additional staffing or vendor support. These new requirements would divert limited resources away from patient care. 6W-1 Nevada Hospital Association 5190 Neil Road Suite 400 Reno, NV 89502 (775) 827-0184 Fax (775) 827-0190 Second, a rebate model would create cash-flow challenges and financial risk for hospitals. Under a rebate system, hospitals would have to purchase drugs at higher upfront prices and wait for reimburseinent of the statutory discount. Even short delays in rebate payments could force hospitals to effectively extend interest-free loans to manufacturers and increase financial pressure on safety-net providers already operating on thin margins. Third, switching to a rebate model would give manufacturers unilateral control to determine whether a claim qualifies for 340B pricing. Under the current upfront discount model, covered entities are responsible for determining patient and claim eligibility and for ensuring compliance with program requirements, including preventing duplicate discounts. A rebate model would effectively shift this authority to manufacturers, who would decide after the fact whether to honor or deny a rebate. This is inconsistent with the statutory framework of the 340B program, which places responsibility for eligibility determinations and compliance squarely on covered entities not manufacturers. Allowing manufacturers to second-guess or override these determinations would undermine the structure of the program and create significant uncertainty for hospitals attempting to comply with the law. Fourth, medication claims in mixed-use settings would be particularly difficult to administer under a rebate model. Many 340B drugs are administered to patients in outpatient status within hospital facilities and billed as part of a medical claim rather than a pharmacy claim. Extracting the necessary drug-level information from these medical claims is operationally complex and often requires multiple data systems, manual reconciliation, and post-billing adjustments. Even today, hospitals and their vendors continue to struggle to reliably capture this information in a way that is timely and accurate. A rebate model would require hospitals to assemble and transmit detailed claim data to manufacturers after the fact, creating significant administrative burden and introducing the risk that valid 340B claims could be denied due to data formatting issues, timing discrepancies, or incomplete information. Fifth, these additional costs and operational burdens would reduce the ability of 340B hospitals to stretch scarce resources, which is the central purpose of the program. 340B savings support a wide range of services for vulnerable patients, including uncompensated care, behavioral health services, oncology prograrns, and community outreach. Any policy that diminishes those savings or makes them less predictable risks reducing access to care in the communities that rely most heavily on safety-net hospitals. Finally, hospitals have reasonably relied for decades on the program's upfront discount structure in designing their operational systems, contractual relationships, and long-term financial planning. A fundamental shift to a rebate model would disrupt these reliance interests without clear evidence that such a change is necessary. ---1 Nevada NI Hospital Association 5190 Neil Road Suite 400 Reno, NV 89502 (775) 827-0184 Fax (775) 827-0190 To the extent HRSA is concerned about issues such as duplicate discounts related to the Medicare Drug Price Negotiation Prograrn, there are less burdensome alternatives available, including neutral third-party clearinghouse approaches that could address these concerns without imposing significant new costs on covered entities. For these reasons, we urge HRSA to maintain the current upfront discount framework for the 340B program and avoid implementing a rebate model that would undermine the prowarn's effectiveness. Thank you for the opportunity to comrnent on this important issue. We appreciate HRSA's consideration and look forward to continued engagement to ensure the 340B program continues to support hospitals serving vulnerable patients and comrnunities. Very truly yours, Patrick D. Kelly President and CEO & mal Nevada 1 1 Hospital Association 5190 Neil Road Suite 400 Reno, NV 89502 (775) 827-0184 Fax (775) 827-0190
HRSA-2026-0001-0108Jay D · Cheyenne, WY, United States2026-03-26T04:00Z3,552 chars
Gemini said I can certainly help you draft a formal response. When writing to a federal agency like HRSA, it is most effective to focus on administrative burden, financial risk, and operational delays. Since this pilot shifts the 340B program from an "upfront discount" to a "pay-now-get-rebated-later" model, here are the strongest arguments against it. Key Points to Include (The "Why it's Bad" List) Cash Flow Strain: Small clinics and safety-net hospitals often operate on thin margins. Forcing them to pay the full Wholesale Acquisition Cost (WAC) upfrontwhich can be thousands of dollars per specialty drugcould drain their operating cash while they wait for rebates. Administrative Burden: Covered entities will have to track every single claim to ensure they actually receive the rebate. If a manufacturer denies a claim or misses the 10-day window, the hospital has to spend staff time (and money) chasing it down. Data Privacy: Requiring hospitals to upload claims data to a third-party manufacturer platform creates new cybersecurity risks and potential HIPAA concerns. Precedent: If this pilot "succeeds" for these 10 drugs, it could expand to all 340B drugs, fundamentally breaking the financial model that keeps many rural hospitals open. Draft Letter/Comment Subject: Comments on the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2025-14619) To the Health Resources and Services Administration (HRSA), I am writing to express my strong concerns regarding the proposed 340B Rebate Model Pilot Program. While the stated goal of deduplication is understandable, the shift from an upfront discount to a post-purchase rebate model poses significant risks to the safety-net providers the 340B program was designed to protect. 1. Financial Hardship and Cash Flow: The most immediate impact of this pilot is the financial strain on covered entities. Requiring hospitals and clinics to pay the full Wholesale Acquisition Cost (WAC) upfront creates a "float" period where the manufacturer holds the facility's capital. For high-cost specialty drugs, this could lead to millions of dollars in restricted cash flow, potentially forcing providers to cut services or reduce staff while waiting for reimbursements. 2. Increased Administrative Costs: The 340B program is already complex. Adding a "reconciliation" layer requires covered entities to monitor manufacturer IT platforms, verify 10-day payment windows, and dispute denied claims. These administrative costs will be borne entirely by the healthcare providers, effectively reducing the net benefit of the 340B discount. 3. Risk of Non-Compliance and Delays: While the Notice mandates a 10-day rebate window, there is no clear penalty for manufacturers who fail to meet this deadline or who use "technical errors" in data submission to delay payments. This places the burden of proof and the financial risk solely on the healthcare provider. 4. Data Security Concerns: Forcing covered entities to share detailed claim-level data with manufacturers or third-party platform vendors increases the "surface area" for data breaches. This creates unnecessary compliance hurdles regarding patient privacy and data integrity. Conclusion: The 340B statute was intended to stretch scarce federal resources. This rebate model does the opposite: it protects manufacturer margins at the expense of provider liquidity. I urge HRSA to reconsider this pilot and instead focus on backend deduplication methods that do not require covered entities to pay full price upfront. Sincerely, Jayla
HRSA-2026-0001-0109David Stanley · Bennington, KS, United States2026-03-26T04:00Z391 chars
The HRSA bill adding levels of bureaucracy paperwork and cost to our healthcare system especially to those serving the low income seems like a ply to help the drug companies and hurt the poor. Getting the savings without the fight, burden, cost, and padding to the drug companies seems to be the logical way. Let's vote to not force the health centers to cover the drug companies expenses.
HRSA-2026-0001-0110(no commenter metadata)2026-03-27T04:00Z10,080 chars
HRSA-2026-03042 See attached file(s) MEMORIAL HOSPITAL 1900 STATE STREET CHESTER, ILLINOIS 62233 (618) 826-4581 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Wormation: 340B Rebate Model Pilot Program, HMS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Randolph Hospital District dba Memoriat Hospital of Chester, IL, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Memorial Hospital of Chester, IL that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Memorial Hospital of Chester, IL has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supportingfacts, research, and evidence in their responses. Memorial Hospital of Chester, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will inctude only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we wilt need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Memorial Hospitat of Chester, IL can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Memorial Hospital of Chester, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Memorial Hospital of Chester, IL understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Memorial Hospital of Chester, IL does not currentty have the staff needed to comply with a Rebate Program. As a Critical Access Hospital, our staff already balance multiple programs and departments to ensure high-quatity patient care. Memorial Hospital of Chester, IL also owns and operates an in-house Retail Pharmacyfocused on patient medication access and adherence. The proposed model's impact on our mixed-use and retail operations creates a need for an additional full-time 340B Account Manager at an annual salary of $95,000. Due to our rural location in Southern Illinois, we anticipate a one-time cost of $20,000 for specialized recruitment and training. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Memorial Hospital of Chester, IL has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Memorial Hospital of Chester, IL utilizes Sentry as our Third-Party Administrator (TPA) for retail and mixed-use management. To manage the Rebate Model Pilot Program, Sentry provided an add-on software module requiring one-time implementation fee of $5,000 and recurring annual costs of $15,000. Payment Timing And Potential Cash Flow Impacts. Untike the existing upfront discount mechanism, any rebate mechanism will force Memorial Hospital of Chester, IL to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse impacts of These dditional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Memorial Hospital of Chester, IL will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. In our most recent fiscal year, Memorial Hospital of Chester, IL, saved retail pharmacy customers $106,000 through loyalty pricing and pharmacy financiat assistance programs. The complexities and pricing uncertainties of the proposed rebate model threaten to diminish these savings, potentially leading to non-compliance for patients who rely on this assistance to afford life-saving medications. In our most recent fiscal year, Memorial Hospital of Chester, IL provided qualifying patients with $165,000 in free or reduced healthcare costs. Following the success of our 340B program, we expanded our financial assistance eligibility in Fiscal Year 2022 from 200% to 300% of Federal Poverty Guidelines, making our program more inclusive than Medicaid and significantly broadening our community reach. Reverting to our prior eligibility levels would be detrimental to the many residents who now depend on these savings for essential healthcare at our Hospital and Rural Health Clinics. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiting prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount." Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Memorial Hospital of Chester, IL reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financiat planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified probtems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose of Memorial Hospital of Chester, IL , HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Memorial Hospital of Chester, IL respectfully submits that the costs of any Rebate Program will outweigh any expected be efits. HRSA therefore should abandon the concept altogether and embrace a neugr<atp third party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Memorial Hospital of Chester, IL and other covered entities to comment on the specifics of its new program. White we have endeavored to provide the most detailed information possible, we are doing so without precise knowtedge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound imptications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brett Bollmann, CEO Memorial Hospital of Chester, IL
HRSA-2026-0001-0111Saint Peter's University Hospital2026-03-26T04:00Z11,666 chars
Please see the attached file. 254 Easton Avenue New Brunswick, NJ 08901 732.745.8600 saintpetershcs.com The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Saint Peter's University Hospital, New Brunswick, NJ, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Saint Peter's University Hospital, New Brunswick, NJ that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Saint Peter's University Hospital, New Brunswick, NJ has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Saint Peter's University Hospital, New Brunswick, NJ has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the IO drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) I II I ( . 111 E ... rt.i f ' for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Saint Peter's University Hospital, New Brunswick, NJ can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Saint Peter's University Hospital, New Brunswick, NJ to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Saint Peter's University Hospital, New Brunswick, NJ understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital-and far above and beyond what we are experiencing now. The rebate model will require both staffing and administrative costs. Managing rebates is similar to managing patient accounts receivable. This will require rebate billing and tracking software, which is included within our estimate. At least two full-time employees will be needed initially. Should the rebate model expand to include additional medications, additional staff will be required to manage denials and appeals. If the rebate program were to include all 340B-eligible medications, we estimate that Saint Peter's University Hospital, New Brunswick, NJ would need a total of 12 full-time employees. The cost of the rebate billing and tracking software, although difficult to estimate, could reasonably be approximately $500,000 per year. Full staffing of 12 employees would be approximately $1 million, including benefits. Our current 340B program cost nearly 15% (or $1.4 million) simply to identify 340B-eligible drugs that qualify for a discount. This cost will continue even if the rebate model is implemented. Staffing Impacts Under a Potential 340B Rebate Program. Saint Peter's University Hospital, New Brunswick, NJ does not currently have the staff needed to comply with a Rebate Program. 2 Saint Peter's University Hospital, New Brunswick, NJ estimates that additional staff will be required to effectively monitor and maintain a 340B rebate program. These employees will need to perform the following tasks: Creating invoices to manufacturers for each eligible 340B drug. Managing all billing and supporting documentation manually, as no current software solution is available. Providing oversight to ensure quality and accuracy of rebate billing. Following up on claims not processed in a timely manner bymanufacturers. Tracking and appealing claim denials. Collaborating with IT staff, who will need to develop and maintain billing and tracking systems, as manual management of the rebate process is not sustainable. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Saint Peter's University Hospital, New Brunswick, NJ has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Saint Peter's University Hospital, New Brunswick, NJ already pays an outside vendor to transmit ESP 340B information to manufacturers and will continue to do so under the rebate model. The ESP information is not a billing or collection system and, therefore, will not be helpful in billing and collecting 340B rebate claims. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Saint Peter's University Hospital, New Brunswick, NJ to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. 3 Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Saint Peter's University Hospital, New Brunswick, NJ will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on "reliance interests m continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via 'rebate or discount. '"' Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will-or reasonably may-exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Saint Peter's University Hospital, New Brunswick, NJ reasonably relied on this history when designing its internal operations, staffing, third- party contractual relationships, and financial planning for the use of 340B savings-all based on an upfront-discountmodel. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Saint Peter's University Hospital, New Brunswick, NJ HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities theyserve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any 4 other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. It is important to point out that the drug manufactures already create geographic restrictions on 340B drugs to retail contract pharmacies. These geographic restrictions ARE NOT in any HRSA regulations and we expect these restrictions will continue even with the rebate model. For all these reasons, Saint Peter's University Hospital, New Brunswick, NJ respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Saint Peter's University Hospital, New Brunswick, NJ and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Garrick J. Stoldt Chief Financial Officer Saint Peter's University Hospital
HRSA-2026-0001-0112Stephen F. Austin Community Health Center Inc.2026-03-26T04:00Z6,511 chars
My Community Health Network (MyCHN), a Federally Qualified Health Center (FQHC) based in Texas, appreciates the opportunity to provide input on the proposed 340B Rebate Model Pilot Program. We support efforts to improve transparency and program integrity; however, we have significant concerns regarding the operational and financial implications of a rebate-based model on covered entities. The current upfront discount structure is critical to maintaining cash flow stability, enabling FQHCs like ours to reinvest savings into expanded access to care, pharmacy services, and programs for underserved populations. Transitioning to a rebate model introduces substantial risks, including delays in reimbursement, increased administrative burden, and potential barriers to patient accessparticularly for high-cost specialty medications. These challenges could disproportionately impact safety-net providers and ultimately undermine the intent of the 340B program. We encourage HRSA to carefully evaluate: 1. The cash flow impact on covered entities, especially those serving high volumes of uninsured and underinsured patients 2. Administrative complexities and associated costs of rebate reconciliation and dispute resolution 3. Safeguards to ensure timely and accurate rebate payments 4. The potential effect on patient access to medications and continuity of care We recommend that any pilot program include clear protections, standardized processes, and robust stakeholder engagement, with measurable outcomes that assess both financial and patient care impacts. We have provided additional detailed analysis and supporting data in the attached document. Thank you for the opportunity to comment on this important issue. Stephen F. Austin Community Health Center Inc. (MyCHN) 340B Rebate Model RFI Response I. Organization Overview Stephen F. Austin Community Health Center Inc. (MyCHN) is a Federally Qualified Health Center (FQHC) serving approximately 48,000 patients across 22 locations in Texas. The 340B program is critical to sustaining access to care for underserved populations. II. Use of 340B Savings Category Allocation % Sliding Fee Scale (Uninsured) 83% Non-reimbursable CCM 7% Outreach & Enrollment 5% Other Charity/Programs 5% III. Estimated Financial Impact of Rebate Model Impact Area Estimated Effect Revenue Loss Risk ~$2M $7M annually Additional Operational Cost ~$0.7M $2.0M annually Financing Cost (Cash Flow) ~$0.5M $1.5M annually Working Capital Requirement ~$20M+ increase Projected Net Savings $0 to Negative IV. Narrative Summary The proposed 340B rebate model would significantly disrupt MyCHNs ability to sustain its 340B program. The model introduces cash flow challenges, increases administrative burden, and creates substantial risk of revenue loss. Most critically, it threatens funding for programs supporting uninsured patients and underserved populations. A. Cash Flow and Financial Risk Under the current model, MyCHN purchases drugs at 340B pricing, allowing immediate cost control and reinvestment. Under a rebate model: Drugs must be purchased at full cost (WAC) Rebates are received after dispensing (often 3090+ days delay) Estimated impact: Required working capital increase: $20M$25M+ Significant liquidity strain Increased reliance on credit or financing mechanisms B. Revenue Loss Risk The rebate model introduces risks including: Delayed rebate payments Denied or reduced rebates Increased reconciliation complexity Estimated financial exposure: 5%15% potential revenue loss Equivalent to $2M$7M annually C. Increased Operational Burden Additional requirements under the rebate model include: Expanded data submission and validation (ESP-related) Rebate tracking and reconciliation processes Increased audit and compliance workload Estimated additional cost: $750,000 to $2,000,000 annually Additional staffing (24 FTEs) IT system upgrades and integration costs D. Contract Pharmacy Network Risk The contract pharmacy model is already operationally complex and cost-intensive. Under a rebate model: Delayed reimbursement cycles Increased administrative burden Reduced financial incentives for participation Potential impact: Contraction of contract pharmacy network Loss of access points for patients Estimated multi-million dollar reduction in program benefit V. Operational Challenges Current State MyCHN already faces operational challenges related to: Data submission requirements through ESP Manufacturer restrictions Claims matching and reconciliation Under Rebate Model These challenges would significantly increase: Real-time eligibility verification requirements Claim-level tracking complexity Dispute resolution workload This would impact multiple departments, including pharmacy, IT, compliance, and revenue cycle operations. VI. Patient Impact The proposed rebate model would directly affect patient access to care. Programs at Risk Sliding fee scale discounts (83% of savings) Medication access for uninsured patients Outreach and enrollment services Non-reimbursable care coordination services Expected Outcomes Reduced access to medications Increased medication non-adherence Higher emergency department utilization Worsening health outcomes for underserved populations VII. Conclusion The proposed 340B rebate model would fundamentally disrupt the financial and operational viability of MyCHNs 340B program. Specifically, the model: Introduces significant cash flow burden Increases administrative and compliance complexity Creates substantial risk of revenue loss Threatens programs that directly support underserved patients Most critically, over 80% of MyCHNs 340B savings are reinvested into patient care, particularly for uninsured populations. Any reduction in these savings will directly result in reduced access to care. VIII. Recommendation MyCHN strongly recommends that: The current 340B purchasing model be preserved Any proposed changes prioritize patient access and program stability Administrative burden be minimized unless clear benefit is demonstrated The 340B program remains a vital tool in supporting access to care for vulnerable populations, and changes that undermine its effectiveness will have significant negative consequences for both providers and patients.
HRSA-2026-0001-0113Roger Sanders · Topeka, KS, United States2026-03-27T04:00Z1,268 chars
Please personalize this message. Add a few sentences about your experience with hospital drug costs, medical bills, or lack of transparency. Personal stories carry more weight than form letters. Comments are posted publicly on regulations.gov. Do not include personal or confidential information you do not want publicly shared. Re: Docket No. HRSA-2026-03042 340B Rebate Model Pilot Program To Whom It May Concern: I am writing in response to the Request for Information on the proposed 340B rebate model pilot. As a patient/caregiver, I believe the 340B program should clearly and measurably benefit patients. Too often, patients are not told when a medication was purchased at a 340B discount, and there is little transparency into how those savings are used. If HRSA moves forward with a rebate model, it should prioritize transparency, accountability, and patient benefit. Any new structure should make it clear whether savings are reaching patients and helping reduce out-of-pocket costs. Patients deserve to know when discounts are applied and whether those savings are lowering their financial burden. Strong oversight and reporting will help ensure the program works as intended. Thank you for the opportunity to provide input. Sincerely, [Your Name]
HRSA-2026-0001-0114Daniels Memorial Hospital dba Daniels Memorial Healthcare Center2026-03-30T04:00Z4,320 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: My name is Kody Brinton, and I am a CEO at Daniels Memorial Healthcare Center, which is a Critical Access Hospital and Rural Health Clinic in Scobey, Montana. I am writing to express deep concern about the proposed shift to a rebate model within the 340B Program. From my perspective and experience, such a change would cause significant harm to safety-net hospitals and the vulnerable patient populations they serve. For decades, the 340B Program has enabled providers to deliver sustained, high-quality care particularly in underserved communities. Many safety-net hospitals already operate on extremely thin margins, and a rebate-based structure would jeopardize their financial viability. Some may ultimately be forced to reduce services or close altogether. If HRSA, HHS, CMS, and pharmaceutical manufacturers were truly prioritizing patient access and community health, a rebate model would not be under consideration. There are already clear indications that manufacturers intend to leverage questionable practices under a 340B rebate model. A prominent example is their push to require invoice- level detail at the point of data submission. This demand fundamentally conflicts with the established logic and operational cycle of 340B replenishment, in which purchasing and utilization are intentionally decoupled. By insisting on a documentation standard that does not reflect how the 340B Program is designed to operate, manufacturers are effectively trying to rewrite the rules governing 340B interactions creating administrative hurdles that fall disproportionately on covered entities and undermine the programs core purpose. Compounding this issue is the lack of meaningful provider-level validation, despite the models requirement to submit provider NPI data. Without safeguards to ensure that the provider information aligns with the entity submitting the data, the system creates an unnecessary and entirely avoidable risk: rebates could be misdirected and paid to the wrong party, even in cases of unintentional error. These concerns represent only a fraction of the broader risks inherent in a rebate-based model. Such a framework centralizes significant authority in the hands of pharmaceutical manufacturers, granting them unilateral authority and disproportionate control over program interpretation, data adjudication, and enforcement decisions. This imbalance not only undermines the statutory intent of the 340B Program, it increases the likelihood of lost 340B savings while leaving covered entities vulnerable to opaque decision-making and inconsistent standards. Ultimately, the rebate model introduces operational uncertainty, administrative inefficiency, and significant financial risk while simultaneously weakening support for the very services the 340B Program was created to sustain. These essential services include ensuring access to medications and essential medical care for uninsured and underinsured patients, maintaining the financial stability of safety-net hospitals, and supporting community outreach efforts that protect public health, promote disease prevention, reduce disease transmission, and keep people engaged in ongoing care. To echo 340B Health President and CEO Maureen Testoni The 340B Programs upfront discount structure provides hospitals with predictability and stability, enabling them to stretch scarce resources to meet community needs. A rebate approach reverses that payment model by requiring hospitals to pay full price upfront and wait for reimbursement. That shift would disrupt cash flow, increase administrative burdens and introduce uncertainty that many safety- net hospitals cannot absorb. I urge policymakers to consider the real-world consequences of a rebate-based model and to protect the integrity of the 340B Program for the communities that depend on it. Sincerely, Kody Brinton CEO Daniels Memorial Healthcare Center P: (406) 487-2300 kbrinton@dmha.net
HRSA-2026-0001-0115Tiffany Tyson · Charleston, WV, United States2026-03-26T04:00Z1,062 chars
I am submitting this comment as an individual. I am the Secretary of the Board of Directors for Cabin Creek Health Systems in West Virginia, and I am also a Medicaid recipient and community member. From personal experience, I know that even small increases in upfront prescription costs can create real barriers for Medicaid patients and families, often forcing difficult choices between medications and basic necessities. From a Board perspective, a 340B rebate model would shift financial risk onto community health centers through delayed and uncertain reimbursements, threaten essential services, and increase administrative burden that diverts resources away from patient care. Policies that reduce access to affordable medications ultimately harm patients and families who already face significant financial challenges. For these reasons, I urge HRSA to preserve predictable, upfront 340B pricing and reconsider moving forward with a rebate model. Respectfully submitted, Tiffany Tyson Secretary, Board of Directors Cabin Creek Health Systems West Virginia
HRSA-2026-0001-0116Dirk Hutchinson · Salina, KS, United States2026-03-27T04:00Z1,465 chars
I am submitting this comment as an individual. My comments reflect my personal perspective as a retired physician and a board member of Salina Family Healthcare Center. I am very concerned about how a 340B rebate model would impact my Federally Qualified Health Center and the over 12,000 patients it serves. From my 39 years in practice, I know that even small increases in up-front medication costs can cause patients to delay or avoid taking prescriptions. Access problems don't show up in data until after patients have already gone without their needed medications. Our community health center uses 340B savings to support services that patients rely on every day. Increased medication costs or payment uncertainty put those services at risk. From the board's perspective, shifting financial risk onto safety-net providers, creates instability which directly affects patient access and continuity of care. If this policy change makes it harder for patients to access medications, the harm outweighs any administrative or theoretical benefit. The proposed rebate model, which when implemented, will require extensive guardrails, leads me to suspect that there are fundamental flaws with the approach itself. Every additional layer of rebate tracking and reconciliation pulls staff time and funding away from direct services to patients. Any model that increases paperwork without improving care contradicts the purpose of the 340B program. Dirk Hutchinson, M.D.
HRSA-2026-0001-0117Jon Starks · Salina, KS, United States2026-03-28T04:00Z1,401 chars
I serve on the Finance Committee for the Salina Family Healthcare Center in Salina, KS. In the last Finance Committee meeting, which was held on March 17, we discussed (again) the 340B Rebate Model Pilot Program. I am submitting this comment as an individual. My comments reflect my personal perspective as a member of the Finance Committee of the Salina Family Healthcare Center. I am very concerned about how a rebate model would impact my healthcare center and the over 12,000 patients it serves. 1) A rebate model may negatively affect access to drugs for patients: affordability decisions occur at the pharmacy counter, not weeks later. Delaying 340B discounts shifts risk onto health centers and weakens their ability to reliably offer affordable medications. 2) Impact on patient services and communities: community health centers use 340B savings to support services patients rely on every day. Increased costs or uncertainty put those services at risk. 3) Financial risk translates into real-world consequences: requiring health centers to front the cost of medications shifts financial risk onto safety-net providers. 4) Increased administrative burden diverts resources from patient care; a rebate model increases paperwork, tracking, reconciliation and dispute resolution. These activities require staff time and financial resources that do not improve patient outcomes.
HRSA-2026-0001-0118Great Lakes Bay Health Centers2026-03-29T04:00Z903 chars
As a Federally Qualified Health Center the rebate model would be devastating. Not only would their be massive and immediate cash flow issues that would cut into our ability to sustain critical patient enabling services, but it's imperative that our patients be able to access affordable medication. If we are left to simply anticipate a rebate, do we do the same for the patient? Imagine how many patients would not be able to access medicine if they had to wait for us to rebate it after the fact. Quite simply this idea is ridiculous. As a final point, this would further hurt us as we would have to add even more costs - hiring staff to monitor rebates. We see patients that cause us to lose money. That is our role. Now you want us to find more money, when you're trying to take more away, that doesn't directly impact patient care? Say that out loud. Health Centers and our patients deserve better.
HRSA-2026-0001-0119Rosa Clark Medical Clinic2026-03-30T04:00Z783 chars
We are a small FQHC with an annual operating budget of less than $5,000,000. Over 50% of our patients are uninsured. We rely heavily on 340B income to support the services we currently offer. If we were to receive the funds through a rebate, we would have to pay interest on the operating funds needed until the rebates were paid. The interest on this money would raise our expenses considerably and we would have to decrease services and limit new patient admissions. We are already struggling with drug company reduced reimbursement for 340B pharmacies and with higher insurance deductibles covered by our sliding fee scale. These changes are threatening our ability to provide the safety net services we have been providing and that we were designed to provide in the country.
HRSA-2026-0001-0120Anonymous Anonymous2026-03-30T04:00Z1,653 chars
Struggling hospitals and covered entities are able to extend limited drug resources to underserved communities by way of the 340B program. The proposed rebate model enables manufacturers to determine eligibility and choose what claim to approve and what to deny instead of HRSA. HRSA has established clear eligibility criteria for participation in the 340B program, and periodic unannounced audit is a very efficient quality assurance tool. Covered entities also currently complete annual recertification process during which financial data are submitted to HRSA. The 340B program is working well as is. If any improvement is needed, it should be to limit the number of contract pharmacy a covered entity is allowed to have (10 max). But the rebate program is very costly and the burden will be on the covered entity who is already struggling (hence eligible for 340B as proven by annual submission of DSH % for example). Giving pharmaceutical companies the ability to dictate the operation of the 340B program is a conflict of interest as manufacturers will definitely look out for their own interest first versus the needs of the community which is the sole purpose of the 340B program in the first place. Prior to January 1st, we already received quotes from several 340B split-billing applications trying to use the proposed rebate program as another revenue-generating opportunity to the detriment of hospitals like ours. Thankfully, HRSA postponed the decision on time. I whole-heartedly plead with HRSA to completely stop the efforts of pharmaceutical companies to ruin the 340B program under the disguise of a rebate program. Thank you. Jennifer
HRSA-2026-0001-0121Alchemy2026-03-31T04:00Z5,580 chars
See attached file(s) Alchemy 4901 Virginian Lane Charlotte, NC, 28226 alchemyhealth.com HRSA Rebate Model RFI Response Alchemy appreciates the opportunity to respond to HRSAs Request for Information (RFI) regarding the proposed 340B Rebate Model Pilot Program. Alchemy builds and operates Covered Entity (CE) -owned in-house pharmacies for Federally Qualified Health Centers (FQHCs), STD clinics, and Ryan White grantees in 16 states across the country. In this work, we see firsthand the critical services these clinics provide, serving 1 in 5 rural Americans, 1 in 8 children, and 1 in 15 adults over age 65 (UDS). They are the backbone of Americas healthcare safety net. We also see the razor-thin margins under which they operate and how they live out the original intent of the 340B program every day: stretching scarce federal resources to launch mobile clinic programs to test and treat people where they are, reduce low-income Americans prescription drug costs, help people navigate insurance enrollment, and support countless other health, community, and wraparound Social Determinants of Health (SDoH)-oriented services. With this context in mind, we evaluated the financial impact of the proposed rebate model on the cash flow and working capital requirements of these covered entities. To ground the discussion in real-world data, we calculated the additional working capital required using actual dispense data from a small (9,000 patient) FQHC with whom we have the honor of partnering to operate their in-house pharmacy. The results are stark. For the pilot alone - assuming it includes all 2026 and 2027 negotiated IRA medications - the additional monthly cash on hand required is between $23,000 and $51,000. This figure will only increase as more medications are added to the rebate model. This model would also increase the cost to purchase the medications by 471%. The details are provided in Table 1 below, with the variation depending on whether the CE owns the pharmacy or relies on a contract pharmacy model. The difference is driven primarily by the timing of rebate submission. Entity-owned pharmacies can submit rebate claims within days of dispense, while contract pharmacy and vendor-supported models often require CEs to wait for reconciliation / TPA reports before rebate claims can be submitted, significantly delaying rebate receipt and increasing working capital requirements. Table 1: Working Capital Impact of the Proposed Rebate Model Pilot at a small FQHC The increase in working capital is driven by the requirement that covered entities purchase drugs at Wholesale Acquisition Cost (WAC) and wait for both payer reimbursement and manufacturer rebate payments; the total working capital required is primarily determined by wholesaler payment terms, inventory days on hand, payer reimbursement timing, and the time between dispensing and rebate submission, as outlined in Appendix Table A. While these numbers may appear small in absolute terms, it is important to put them in context. This additional working capital represents approximately 79% to 144% of the monthly net proceeds of the pharmacy. In other words, under a rebate model, nearly three-quarters or more of a months 340B savings would be tied up as working capital rather than invested into patient services. At this particular pharmacy, 340B savings go entirely to funding a sliding scale fee program that allows patients to receive medications at reduced prices, as well as outreach programs and other services designed to improve patient access and adherence. Over a quarter of patients receiving prescriptions from this pharmacy receive medications at reduced prices funded by 340B savings. If a significant portion of pharmacy proceeds must instead be held as working capital, the clinic will have fewer funds available to support discounted medications and other key services. It is important to note that the scenarios modeled are the best case, in which the covered entity operates an in-house pharmacy and has greater control over participation and rebate claim submission. This is not the norm. The majority of FQHCs, STD clinics, and Ryan White grantees rely on external contract pharmacies. What we saw in the lead-up to the anticipated launch of the first rebate pilot program in the fall of 2025 was that at least one of the largest national chain pharmacies indicated it would no longer dispense the drugs included in the rebate model. This would not only reduce the 340B savings that safety-net providers rely on, but also reduce patient access at a time when pharmacy deserts are only growing. This is not theoretical; this is what was about to happen under the initial rebate pilot and is very likely to happen again under this broader rebate pilot. In summary, the proposed rebate model will shift the financial burden and payment risk from manufacturers to covered entities. While the total 340B discount may remain the same on paper, CEs would be required to purchase drugs at WAC, wait for rebate payments, and absorb the financial risk associated with payment timing and potential denials. For safety-net providers operating on thin margins, this shift would tie up a substantial portion of their cash flow, reducing funds available to be reinvested into patient care. This means fewer resources going to support the low-income patients the 340B program was designed to serve. Sincerely, Peter Park Founder & Co-CEO Sid Viswanathan Founder & Co-CEO Appendix Table A: Assumptions
HRSA-2026-0001-0122StayWell Health Care Inc.2026-03-31T04:00Z9,251 chars
See attached file(s) StayWell Health Center 7 locations serving Waterbury & the surrounding communities Phone: 203.756.8021 | Fax: 203.596.9038 | www.staywellhealth.org HRSA RFI Response HRSA-Funded Health Center (Connecticut) Submitted on behalf of a HRSA-funded Community Health Center located in Connecticut Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a HRSA-funded health center serving a medically underserved population in Connecticut, our organization relies on the 340B program to support comprehensive primary care, behavioral health services, and enabling services for patients who are uninsured or underinsured. Under the current 340B purchasing structure, IRA-affected medications represent a manageable upfront acquisition cost. Under a rebate-based model, that same category of drugs would require advancing nearly ten times the current amount, increasing annual upfront drug expenditures by several hundred thousand dollars. For a federally funded health center operating within grant-based budgets and fixed reimbursement rates, this is not a minor adjustment. Health centers function within tightly structured federal funding frameworks. Financial planning aligns with Section 330 grant requirements, Medicaid reimbursement constraints, and sliding fee scale policies. Introducing significantly higher upfront drug acquisition costs requires reallocating funds that would otherwise support direct patient services. Unlike larger health systems, community health centers do not maintain substantial reserve funds or specialized rebate administration departments. Monitoring manufacturer repayments, reconciling discrepancies, and managing repayment timing would add operational demands to already resource- limited teams. The 340B program has historically enabled health centers to expand access, invest in care coordination, and sustain pharmacy services for vulnerable populations. Converting that model into a post-purchase reimbursement process introduces uncertainty into service planning and resource allocation. Please note that with the current changes proposed to 340B, this will have a lasting negative impact on StayWell. StayWell has been able to utilize the 340B program for the mutual benefit of the center, patients and pharmacies for many years. Without 340B our loss for the past year would have been close to $3,000,000. Fortunately, due to having this program, our losses were only $438,000 this year. If we did not have access to the 340B program, we would have also had a loss of $1,600,000 in 2024 and $900,000 in 2023. If the changes to the 340B program go through, this will impact us financially for years to come. Any proposed changes to the 340B structure should carefully consider how increased upfront drug costs and rebate monitoring responsibilities align with the mission and funding model of HRSA-supported StayWell Health Center 10 locations serving Waterbury & the surrounding communities Phone: 203.756.8021 | Fax: 203.596.9038 | www.staywellhealth.org health centers. We appreciate HRSAs evaluation of these impacts as it considers next steps. StayWell Health Center 7 locations serving Waterbury & the surrounding communities Phone: 203.756.8021 | Fax: 203.596.9038 | www.staywellhealth.org HRSA RFI Response HRSA-Funded Health Center (Connecticut) Submitted on behalf of a HRSA-funded Community Health Center located in Connecticut Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a HRSA-funded health center serving a medically underserved population in Connecticut, our organization relies on the 340B program to support comprehensive primary care, behavioral health services, and enabling services for patients who are uninsured or underinsured. Under the current 340B purchasing structure, IRA-affected medications represent a manageable upfront acquisition cost. Under a rebate-based model, that same category of drugs would require advancing nearly ten times the current amount, increasing annual upfront drug expenditures by several hundred thousand dollars. For a federally funded health center operating within grant-based budgets and fixed reimbursement rates, this is not a minor adjustment. Health centers function within tightly structured federal funding frameworks. Financial planning aligns with Section 330 grant requirements, Medicaid reimbursement constraints, and sliding fee scale policies. Introducing significantly higher upfront drug acquisition costs requires reallocating funds that would otherwise support direct patient services. Unlike larger health systems, community health centers do not maintain substantial reserve funds or specialized rebate administration departments. Monitoring manufacturer repayments, reconciling discrepancies, and managing repayment timing would add operational demands to already resource- limited teams. The 340B program has historically enabled health centers to expand access, invest in care coordination, and sustain pharmacy services for vulnerable populations. Converting that model into a post-purchase reimbursement process introduces uncertainty into service planning and resource allocation. Please note that with the current changes proposed to 340B, this will have a lasting negative impact on StayWell. StayWell has been able to utilize the 340B program for the mutual benefit of the center, patients and pharmacies for many years. Without 340B our loss for the past year would have been close to $3,000,000. Fortunately, due to having this program, our losses were only $438,000 this year. If we did not have access to the 340B program, we would have also had a loss of $1,600,000 in 2024 and $900,000 in 2023. If the changes to the 340B program go through, this will impact us financially for years to come. Any proposed changes to the 340B structure should carefully consider how increased upfront drug costs and rebate monitoring responsibilities align with the mission and funding model of HRSA-supported StayWell Health Center 10 locations serving Waterbury & the surrounding communities Phone: 203.756.8021 | Fax: 203.596.9038 | www.staywellhealth.org health centers. We appreciate HRSAs evaluation of these impacts as it considers next steps. HRSA RFI Response HRSA-Funded Health Center (Connecticut) Submitted on behalf of a HRSA-funded Community Health Center located in Connecticut Thank you for the opportunity to provide comments regarding the potential implementation of a 340B rebate model. As a HRSA-funded health center serving a medically underserved population in Connecticut, our organization relies on the 340B program to support comprehensive primary care, behavioral health services, and enabling services for patients who are uninsured or underinsured. Under the current 340B purchasing structure, IRA-affected medications represent a manageable upfront acquisition cost. Under a rebate-based model, that same category of drugs would require advancing nearly ten times the current amount, increasing annual upfront drug expenditures by several hundred thousand dollars. For a federally funded health center operating within grant-based budgets and fixed reimbursement rates, this is not a minor adjustment. Health centers function within tightly structured federal funding frameworks. Financial planning aligns with Section 330 grant requirements, Medicaid reimbursement constraints, and sliding fee scale policies. Introducing significantly higher upfront drug acquisition costs requires reallocating funds that would otherwise support direct patient services. Unlike larger health systems, community health centers do not maintain substantial reserve funds or specialized rebate administration departments. Monitoring manufacturer repayments, reconciling discrepancies, and managing repayment timing would add operational demands to already resource-limited teams. The 340B program has historically enabled health centers to expand access, invest in care coordination, and sustain pharmacy services for vulnerable populations. Converting that model into a post-purchase reimbursement process introduces uncertainty into service planning and resource allocation. Please note that with the current changes proposed to 340B, this will have a lasting negative impact on StayWell. StayWell has been able to utilize the 340B program for the mutual benefit of the center, patients and pharmacies for many years. Without 340B our loss for the past year would have been close to $3,000,000. Fortunately, due to having this program, our losses were only $438,000 this year. If we did not have access to the 340B program, we would have also had a loss of $1,600,000 in 2024 and $900,000 in 2023. If the changes to the 340B program go through, this will impact us financially for years to come. Any proposed changes to the 340B structure should carefully consider how increased upfront drug costs and rebate monitoring responsibilities align with the mission and funding model of HRSA-supported health centers. We appreciate HRSAs evaluation of these impacts as it considers next steps.
HRSA-2026-0001-0123(no commenter metadata)2026-03-31T04:00Z10,271 chars
See attached file(s) HEALTH NETWORK, INC. FEDERALLY QUALIFIED HEALTH CENTER 4175 WEST 20TH AVENUE HIALEAH, FL 33012 5875 March 31, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Citrus Health Network (CHN) is responding to the Request for Information (RFI) that seeks stakeholder input regarding the potential implementation of a rebate-based model. CHN is a Federally Qualified Health Center serving approximately 30,000 patients in South Florida. CHN is opposed to the proposed 340B Rebate Model Pilot Program as it would create significant financial costs, would prevent the savings to benefit patient care as intended by the 340B Program and would reduce access to affordable medications for our patients. While 42 U.S.C. 256b(a)(1) provides that the Secretary may effectuate the statutory price limitation through a "rebate or discount," the longstanding upfront discount model has been integral to the effective operation of the program and to the ability of safety-net providers to fund patient care to persons who are uninsured or underinsured. If the rebate model is implemented, we strongly urge HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot Program. CHN outlines below the information requested to demonstrate that the Rebate Model should not be implemented: Costs to Covered Entities- The administrative costs alone in this 340B model are projected to be at least $300,000 a year because at least 3FTEs would be needed to administer the tracking of data, billing, rebates, compliance and appeals. Software enhancements or new licenses would be needed to track vendor reports. In addition, CHN would need to make $200,000 per month available in cash up front to pay the full price, pending the rebate. The increased upfront annual drug expenditure under WAC would be $2,259,226 in 2026 and nearly 6 million by 2028. This represents an 830062% increase in upfront capital required for procurement. Based on experience with other rebate models, often rebates are denied due to minor errors or administrative issues, which then costs the Center the full price. In addition, the cost of the line of credit to cover the costs we would not get back through the rebate. continued.. Accredited by the Joint Conunivsion on Accreditation of Healthcare Organizations THE CHILDREN'S M TRUST MIAMO Affshonaumir ICD iunry CHN is also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on the requirement to appropriately bill 340B drugs to Medicaid plans. CHN may not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Payment timing and cash flow The proposed model would result in non-profit Federally Qualified Health Centers providing interest-free loans to pharmaceutical companies and distributors by requiring the health center to pay the full price and then applying for the rebate which may or may not come up to 90 days later. Under the proposed 340B Rebate Model Pilot, health centers would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHN's ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. The delay in payment starts when the pharmacy orders the drug at full price, then receives a prescription, fills it, waits for the patient to receive it, submits the confirmation for the rebate, then waits for the rebate to be approved and paid. This could cause a delay of 90 days, just to get the rebate, even with the HRSA 10 day payment requirement. As soon as 2026, CHN would need to have over $555,000 in cash on hand for 90 days, to wait for the rebate to come through, assuming the rebates are approved. By 2028, this number soars to over $1,400,000. This number does not include interest on a line of credit that would be needed to cover this cash flow challenge, which could average about 7% which we would not get back. CHN does not have these cash reserves on hand and line of credits are challenging to obtain and can have high interests. Rebate denials CHN is familiar with rebate models used in managed care contracts. All contracts have conditions on rebates, resulting in denials. Based on actual experience with managed care plans, we would have a denial rate of at least 15%. The administrative process can also be delayed so that is why we expect 90 day delays if they are even approved. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. Data Collection CHN operates our own pharmacies. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Manufacture efforts to avoid Duplicate Discounts The health center, our contracted vendors and payors have already developed policies and procedures to avoid duplicate discounts. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate the maximum fair price from 340B pricing is inconsistent with HRSA's stated authority. There also alternative models that can reduce duplication. 340B Program integrity Section 340B of the Public Health Service Act (42 U.S.C. 256b) was enacted to ensure that safety- net providers are able to "stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." (H.R. Rep. No. 102-384(I1), at 12 (1992)). Based on operational experience across the 340B supply chain, a rebate model would introduce substantial financial, operational, and administrative risks that could undermine the statutory purpose of the program. For more than thirty years, the program has operated through an upfront discount structure, under which covered entities purchase covered outpatient drugs at the statutory 340B ceiling price through established pharmaceutical distribution channels. Patient Access We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHN's pharmacies will not have access to the 340B price when the patient needs the medication so it would not be clear how much to charge the patient. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. In addition, the 340B model has allowed the CHCs to use the program income to help subsidize the costs of serving patients who uninsured or underinsured. If the Rebate Model is approved, the additional costs and loss of revenue will likely result in closure of programs that enhance patient care. For all the stated reasons, we urge HRSA to not implement the proposed 340B Rebate Model Pilot Program. f HRSA chooses to implement it, we strongly urge HRSA to exempt Community Health Centers ( Cs) from the 340B Rebate Model Pilot Program. Thank you for the consideration of these ents. Sinc Armando Me Pharmacy Dire tor
HRSA-2026-0001-0124U of L Health2026-04-01T04:00Z6,494 chars
The attached comments are from U of L Health, Louisville Kentucky. U of L Health is an academic medical center associated with the University of Louisville and serving all 120 counties in the state of Kentucky. UL Health April 1, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Comments Opposing the 340B Rebate Model Pilot Program Dear Administrator Engels: UofL Health submits these comments in response to HRSA's Request for Information regarding the proposed 340B Rebate Model Pilot Program. UofL Health is a nonprofit, academic health system based in Louisville, Kentucky, and a primary safety net provider for Medicaid, underinsured, and uninsured patients across the Commonwealth. In partnership with the University of Louisville School of Medicine, we operate teaching hospitals that deliver essential trauma, specialty, and tertiary care services statewide. UofL Health strongly opposes implementation of a rebate-based construct for the 340B Drug Pricing Program. The proposed model is inconsistent with the statutory purpose of the 340B program and would materially impair the ability of covered entities to stretch scarce resources to serve vulnerable populations. 340B Enables Measurable, Statewide Impact The 340B program is not theoreticalit produces direct, measurable benefits for patients and communities across Kentucky. UofL Health alone generates approximately $125 million annually in savings through 340B, which is reinvested entirely into patient care, access expansion, and community health initiatives. These resources support: Statewide Access to Care o Patients served from every county in Kentucky o Expansion of care sites in medically underserved areas, including new urgent care and hospital capacity in West Louisville and Bullitt County o Telehealth behavioral health access across 15 emergency departments statewide Specialty and High-Acuity Services o The Brown Cancer Center serving more than 15,000 patients annually from 113 counties o Kentucky's only dedicated Heart Hospital, serving over 60,000 patients statewide o A leading Level 1 Trauma Center supporting a statewide trauma system and training EMS providers across Kentucky Care for Complex and Vulnerable Populations Uoll Health, Inc. is 501(c)(3) a nonprofit corporation is governed by an independent Board of Directors and is a related organization (as defined under 42 CFR 413.17) with the University of Louisville's School of Medicine. UofL Health, Inc., on behalf of its teaching hospitals and providers, entered into academic affiliation agreement with the University of Louisville in which the University of Louisville agreed that its Health Sciences Center would be the academic partner with UofL Health, Inc. to maintain and etance the University of Louisville's affiliated graduate medical education as well as its research in medicine, dentistry, nursing and public health. These added costs do not improve access, affordability, or prograrn integrity. Instead, they divert resources away from patient care. 2 o Multidisciplinary programs for Cystic Fibrosis, Multiple Sclerosis, and substance use recovery o Violence intervention and prevention programs such as Pivot to Peace, SAFE Services, and Future Healers o Community outreach programs like Stop the Bleed to improve emergency response capacity o Sexual Assault Nurse Examiner program that provides medical care, support services, and forensic evidence collection for victims of sexual assault across the state of Kentucky These investments are only possible because 340B provides predictable, upfront savings that can be immediately deployed to meet patient needs. The Rebate Model Undermines These Outcomes The proposed rebate model would replace the current upfront discountan efficient and predictable mechanismwith a delayed reimbursement construct that shifts financial and liquidity risk from manufacturers to safety net providers. Nothing in the 340B statute contemplates requiring covered entities to finance manufacturer obligations or absorb working capital risk as a condition of participation. For UofL Health, this shift would be particularly destabilizing: We operate with approximately 35 days cash on hand, insufficient to absorb the float required for high-cost therapies Many of the services supported by 340Boncology, transplant, specialty pharmacy require significant upfront drug acquisition costs HRSA's assumption of 10-day rebate turnaround under "perfect conditions" does not reflect real-world operational complexity, including disputes, data mismatches, and delays Even short-term disruptions in cash flow would force difficult tradeoffsreducing services, delaying expansion, or limiting access for vulnerable populations. Administrative Burden Without Benefit The rebate model would also impose significant administrative complexity: Third-party administrators and reconciliation systems Expanded audit, compliance, and legal review Dispute resolution infrastructure Direct Patient Impact Most concerning, the rebate model would directly undermine the very outcomes the 340B program was designed to achieve: Reduced ability to expand care in rural and underserved communities Threats to specialty services such as oncology, transplant, and behavioral health Constrained funding for community-based programs addressing violence, chronic disease, and health disparities In short, the rebate model would convert a program that currently expands access into one that introduces financial uncertainty and limits care delivery. Conclusion The existing 340B upfront discount model works. It aligns with statutory intent, provides certainty, and enables immediate reinvestment in patient care. UofL Health's experience demonstrates that 340B savings are directly translated into expanded access, improved outcomes, and stronger communities across Kentucky. Replacing this model with a rebate-based approach would introduce unnecessary financial risk and administrative inefficiencywhile undermining the very safety net the program was designed to support. For these reasons, UofL Health strongly urges HRSA to abandon the proposed rebate model and preserve the current 340B framework. Thank you for the opportunity to provide these comments. Sincerely, -2, Jason Smith Chief Executive Officer UofL Health 3
HRSA-2026-0001-0125Kathryn Ryan · Easton, NH, United States2026-04-01T04:00Z728 chars
I am discouraged by the erosion of the 340B program and it's effects on our community health center (Ammonoosuc Community Health, Littleton, NH) in rural New Hampshire. 340B has enabled free or deeply discounted medication access for patients without prescription coverage, and acted as a safety-net providing essential revenue for hospitals and health clinics, vaccines, and specialized care programs. It has helped with access to health care, particularly in underserved, rural communities. This loss of revenue, coupled with the decline in Medicare and Medicaid coverage has constrained our ability to provide consistent quality care for our patients. Kathryn Ryan Ammonoosuc Community Health Services Board of Directors
HRSA-2026-0001-0126Abdus Abdullah · United States2026-04-01T04:00Z822 chars
I am writing in response to the Request for Information on the proposed 340B rebate model pilot. As a patient/caregiver, I believe the 340B program should clearly and measurably benefit patients. Too often, patients are not told when a medication was purchased at a 340B discount, and there is little transparency into how those savings are used. If HRSA moves forward with a rebate model, it should prioritize transparency, accountability, and patient benefit. Any new structure should make it clear whether savings are reaching patients and helping reduce out-of-pocket costs. Patients deserve to know when discounts are applied and whether those savings are lowering their financial burden. Strong oversight and reporting will help ensure the program works as intended. Thank you for the opportunity to provide input.
HRSA-2026-0001-0127Beth Harwood2026-04-01T04:00Z1,278 chars
I write in strong opposition to the proposed 340B rebate model. For community health centers like Ammonoosuc Community Health Services (ACHS), the 340B program is not a revenue stream it is a mechanism that allows ACHS to reinvest pharmaceutical savings into direct patient care for those who need it most. The proposed rebate model would replace a functional, patient-centered system with costly, complex administration that serves no clinical purpose. The numbers at ACHS tell the story clearly: since 2017, their 340B savings have fallen by 81%. Adding the administrative costs required by a rebate model would erode ACHS' savings by 95% effectively ending the program's benefit for our patients. Nationally, CHCs estimate that compliance with a rebate model would cost $30,000 to $200,000 per year in new staffing alone. This is not about fraud prevention. Robust oversight mechanisms already exist. This is about making the program so burdensome that safety-net providers cannot sustain participation. I urge you to protect the 340B program as it was intended: as a tool to expand access to care for underserved communities. Reject the rebate model. Keep patients over profits. Beth Harwood Patient, Former Employee and BOD Chair Ammonoosuc Community Health Services
HRSA-2026-0001-0128Heather Porter · Littleton, NH, United States2026-04-01T04:00Z169 chars
I am strongly urging HRSA to make CHC's exempt from the 340B model Pilot Program. It will cause disproportionate harm to individuals served by CHC's across the county.
HRSA-2026-0001-0129Nancy A Noonan · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0130Joyce Aaron · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0131Enrico Abate · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0132Judith Abbey · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0133Said Abdelfattah · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0134Tomczak Abby · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0135Mary Abdelkodoos · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0136Darrel Abel · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0137Chase Abell · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0138Zachary Abercrombie · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0139Kalkidan Abey · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0140John Abeyta · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0141GCA340B2026-04-01T04:00Z5,464 chars
See attached file(s) PrimeCare 340B, LLC dba GCA340B | PO Box 154, Canyon TX 79015 | www.gca340b.com | support@gca340b.com To Whom it May Concern: We respectfully urge HRSA not to adopt a 340B rebate model for covered entities. Such a shift would impose significant administrative and financial burdens on safety-net providersparticularly rural hospitalswhile undermining the programs ability to support access to care for underserved patients. The current upfront discount model is essential to maintaining stable operations, predictable savings, and uninterrupted patient services. Patient Access and Care Delivery Impact For safety-net hospitals, 340B is not an abstract financial mechanism; it is a critical tool that enables them to keep medications affordable and sustain essential services in medically underserved areas. Moving to a rebate model would replace the immediate, point-of-sale discount with a post-dispense reimbursement process that is inherently vulnerable to delays, denials, and disputes. This uncertainty would make it impossible for rural providers to responsibly budget for patient-facing programs such as medication assistance, care coordination, and community outreach. Requiring covered entities and contract pharmacies to pay full commercial prices upfront would also create substantial cash-flow strain. Small and rural hospitals do not have the working capital to float high-cost drug purchases while waiting months for rebate adjudication. This creates a real risk that medication procurement decisions become driven by liquidity rather than clinical need. Any disruption in the ability to consistently purchase and dispense medications directly harms adherence and disproportionately affects low-income patients who already face limited pharmacy access and transportation barriers. Program Integrity Risks: Denials, Disputes, and Lack of Transparency A rebate model would effectively make manufacturers the post-dispense gatekeepers of 340B pricing. Without strong, uniform, enforceable standards, manufacturers could delay or deny rebates based on opaque or proprietary criteria that covered entities cannot see or verify. Even denials stemming from routine data mismatches would generate significant administrative rework, appeals, and audit exposureburdens that fall hardest on small providers with limited compliance resources. Over time, the friction and uncertainty of chasing rebates would diminish the value of 340B savings and reduce provider participation in 340B-supported initiatives. Importantly, these administrative burdens do not meaningfully improve duplicate discount prevention beyond what targeted, standardized solutions could achieve. To avoid these predictable failures, a rebate model would requireat minimum: Standardized, uniform data elements Strict, enforceable deadlines for rebate payment Mandatory, detailed denial reason codes A transparent, timely, and uniform appeals process Penalties for late payments or unjustified denials PrimeCare 340B, LLC dba GCA340B | PO Box 154, Canyon TX 79015 | www.gca340b.com | support@gca340b.com Absent these protections, the rebate model would shift financial and operational risk from manufacturers to safety-net providers, resulting in a de facto reduction in 340B value through administrative friction and delayed cash flow. Even with such protections, the rebate model remains more complex, more costly, and less workable than the current systemparticularly for rural hospitals. Recommended Alternatives to a Rebate Model We strongly encourage HRSA to pursue targeted, standardized solutions that address duplicate discount concerns without jeopardizing provider liquidity or patient access: Maintain the upfront discount model while strengthening targeted integrity tools. Implement a standardized third-party clearinghouse to address duplicate discount concerns, rather than requiring each covered entity to build its own rebate adjudication infrastructure. Require reciprocal transparency: if covered entities must submit claims-level data, manufacturers should be required to return standardized decision data and be subject to oversight. Establish clear timeliness standards and enforceable dispute-resolution processes for manufacturer denials. Pilot narrow, high-impact interventionssuch as standardized claim identifiers and Medicaid coordinationbefore considering any wholesale redesign of 340B pricing mechanics. HRSA has already acknowledged that manufacturers have alternative mechanisms to address duplicate discount concerns. These options should be prioritized over a disruptive and untested rebate model. Summary For these reasons, we strongly urge HRSA to maintain the current upfront discount model and not move forward with a rebate-based approach. A rebate model would: 1. Impose substantial new administrative and vendor costs 2. Introduce cash-flow instability that rural providers cannot absorb 3. Shift adjudication power and risk to manufacturers through opaque denial processes 4. Reduce resources available for charity care, medication access, and essential services for vulnerable patients We respectfully request that HRSA pursue targeted, standardized solutions that preserve timely access to 340B savings and protect patient care in rural communities. Respectfully, Jared McMahan President | GCA340B Jared.McMahan@gca340b.com
HRSA-2026-0001-0142Srephen Abrams · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0143Dorothye Abramson · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0145Kimberly Abshear · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0146Norma Achey · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0147Justin Acker · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0148John Ackerman · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0154Betsy Adkins · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0155Francis Adrian · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0156Anonymous Anonymous2026-04-01T04:00Z35,002 chars
See attached file(s) 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org April 2, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 and Request to for the Bipartisan Appropriations Letter to Block Implementation of the 340B Model to be signed. Dear Administrator Engels: On behalf of Bothwell Regional Health Center, I gratefully take the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no and we strongly ask for the rebate model to not be implemented. As explained below, any rebate mechanism will impose enormous costs and burdens on Bothwell Regional Health Center located in Sedalia, Missouri that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bothwell Regional Health Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. I have done my best to provide detailed answers in the limited time available to me. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bothwell Regional Health Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Bothwell Regional Health Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that there were some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Based on the rebate model information provided and using data from our 340B program, Bothwell Regional Health Center anticipates having 4,000 claims to monitor per year to ensure the appropriate funds are returned by the manufacturer. Additionally, over the course of a year, Bothwell will need to float (or rather, loan) about 3 million dollars to purchase medications for our patients. It makes no sense to ask rural hospitals; that by default of the 340B registration requirements, are unable to fund the additional upfront costs with purchasing the medications. Once approved for the program, rural hospitals should only be required to submit data for review by the manufacturers. Based on the strict eligibility guidelines and the compliance focused policies and procedures we have implemented in order to run a compliant 340B program, I anticipate having zero rejected rebates based on claim eligibility. If this is the case for the vast majority of rural hospitals, will this mean the model will be terminated? If so, will the manufacturers be required to reimburse our entity for all the administrative costs, loss of programs for our 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org community, increased staffing costs, etc for the year our entity was forced to loan our scarce funds to the manufactures? Staffing Impacts Under a Potential 340B Rebate Program. Bothwell Regional Health Center does not currently have the staff needed to comply with a Rebate Program. The current estimate from HRSA states these additional steps would only require an additional 5 hours of work per week; this is not realistic. A hospital such as ours has multiple contract pharmacies, multiple TPAs handling our claims transmission as well as mixed use inventory. While some of the TPAs are implementing ways of transmitting data to Beacon, Bothwell will still need to monitor the multiple TPAs, input data from our mixed used claims that qualify, manually submit claims from an in house employee pharmacy and monitor finances in case we need to delay orders of especially high WAC priced medications. The increased WAC impact will need to be followed closely and communicated via reports and presentations to our Leadership Team for financial planning. I believe each rebate claim would require approximately 30 minutes of additional attention. With an estimate of 4,000 affected claims, there is no way we could absorb this into our current workload. An additional full time employee is required to ensure we receive full compensation from our WAC purchases. This burden placed on hospitals operating on a shoestring budget is unacceptable. Our hospital was just forced to do a reduction in force and expenses, with another round expected by summer. The rebate model would require us to create and fill additional 340B role(s). Each full time employee hired to manage the rebate model would cost Bothwell approximately $55,000/year in compensation and benefits. While I would love to create an opportunity for a member of community, it seems both financially burdensome as well as unjust to hire an employee without knowing the true future of the rebate program. Our purpose is to serve our community, both patients and employees, with integrity. To create a role that may only exist for one year goes against our intent to act with purpose and integrity in all things. 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bothwell Regional Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our organization already spent countless hours setting up the necessary data feeds for four separate TPAs. To require us to go back and update the feeds to include the necessary medical data presents yet another financial burden. Bothwell utilizes an external report writer to set up the data transmission files. Since this is an external service provided, the data is not available to research exact time allocation and subsequent hours billed. However, I feel that an estimate of at least $2,000 is accurate. Utilizing an external report writer to set up our initial data feeds was an expected expense with an anticipated large return of value from the savings that would be generated. Requiring an additional expense for new data feeds, just for the opportunity to part with even more of our low cash reserves in hope that our organization will receive a rebate that will net the same amount of savings pre-rebate model goes against the entire goal of the 340B program. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Two years ago, the State of Missouri passed bill SB 751 340B. This bill has provisions that prohibit manufacturers from denying, restricting or prohibiting the acquisition or delivery of 340B drugs. Therefore, our organization is not required to submit every claim to ESP. We comply with the manufacturers that request to have the claim data through ESP. This is not the entirety of our claim data. Requiring our entity to add yet another step to our already complex 340B program is unduly burdensome to our rural, safety net hospital. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bothwell Regional Heath Center to effectively provide drug companies interest-free loans as we await the discounts that we 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Bothwell Regional Health Center started our 340B program in October 2023. The planning/implementation phase took close to a year. During the planning phase it was communicated that the first year of program participation would incur more drug spend than maintenance years due to the requirement for our DSH hospital to purchase new 340B inventory at WAC cost until 340B accumulations had been established. This was a known and quantifiable expenditure that our organization was able to anticipate. Implementing a rebate model that requires hospitals to again purchase items at WAC places financial stress on the organization with no burden to the manufacturers. The manufacturers already benefited from our initial WAC purchases (vs the lower GPO prices that DSH entities are prohibited from) and now they will benefit again. Although the entity will eventually recoup the difference via a rebate, it is essentially asking financially strapped safety net hospitals to give a loan to multi-billion dollar drug manufacturers. What do the manufacturers plan to do with the funds that they hold for up to 10 days? They will likely achieve a stable and sizeable amount of money in their coffers as the constant money cycle occurs. Will they be able to earn interest on this money while financial burden remains on critical rural hospitals and the vulnerable community they serve? Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bothwell Regional Heath Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. One such example could be Pomalyst, used to treat Multiple Myelome (blood cancer) and AIDS-related Kaposi Sarcoma. The current 340B purchase price is $9,036.85 per bottle. The WAC purchase price is currently $25,049.70. This will mean Bothwell will have to float $16,012.85 per bottle. We currently have two cancer patients on this medication which would require us to plan to spend over $50k each month and then wait for $32k to be refunded to us by the 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org manufacturer. This is just one of the 25 drugs that will be part of the rebate model. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bothwell Regional Heath Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. While our hospital does not have prior experience with the Beacon platform, I do have concerns. Currently, the hospitals participating in the 340B program use a variety of TPAs. This is beneficial in many ways such as spreading the vast amounts of data transmission through multiple platforms. This ensures that no one program becomes overloaded with data transmissions that may cause program failures and delays. Hospitals also have the ability to change platforms if they feel their current platform is not up to par. Bothwell recently experienced dissatisfaction with our original TPA. We found the customer service lacking and felt that our TPA needs had changed in the two years of our 340B participation. We then researched and chose a new TPA that is a better fit for our 340B program. Requiring all hospitals to use a single platform for the rebate model creates a monopoly with no recourse for entities that may experiences 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org issues with Beacon while desperately waiting on refunds to keep their doors open. Not only will Beacon have sensitive financial information for each entity but patient medical data as well. These two components are highly sought after by cybercriminals and therefore place Beacon at a high risk for cyberattacks. Is Beacon prepared to withstand the increased risk of a cyberattack? How will Beacon protect the entities that are forced to provide such sensitive information from a data breach? Will Beacon face any fines or be forced to reimburse entities for missed refunds if they fail to complete their part of the claim submission process? Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bothwell Regional Heath Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Bothwell Regional Heath Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bothwell Regional Heath Center and other covered hospitals to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to 601 East Fourteenth Street | Sedalia, MO 65301 | PHONE: 660-826-8833 | WEB: www.brhc.org permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lori Wightman Chief Executive Officer Bothwell Regional Health Center April 2, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 and Request to for the Bipartisan Appropriations Letter to Block Implementation of the 340B Model to be signed. Dear Administrator Engels: On behalf of Bothwell Regional Health Center, I gratefully take the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no and we strongly ask for the rebate model to not be implemented. As explained below, any rebate mechanism will impose enormous costs and burdens on Bothwell Regional Health Center located in Sedalia, Missouri that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bothwell Regional Health Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. I have done my best to provide detailed answers in the limited time available to me. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bothwell Regional Health Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Bothwell Regional Health Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that there were some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Based on the rebate model information provided and using data from our 340B program, Bothwell Regional Health Center anticipates having 4,000 claims to monitor per year to ensure the appropriate funds are returned by the manufacturer. Additionally, over the course of a year, Bothwell will need to float (or rather, loan) about 3 million dollars to purchase medications for our patients. It makes no sense to ask rural hospitals; that by default of the 340B registration requirements, are unable to fund the additional upfront costs with purchasing the medications. Once approved for the program, rural hospitals should only be required to submit data for review by the manufacturers. Based on the strict eligibility guidelines and the compliance focused policies and procedures we have implemented in order to run a compliant 340B program, I anticipate having zero rejected rebates based on claim eligibility. If this is the case for the vast majority of rural hospitals, will this mean the model will be terminated? If so, will the manufacturers be required to reimburse our entity for all the administrative costs, loss of programs for our community, increased staffing costs, etc for the year our entity was forced to loan our scarce funds to the manufactures? Staffing Impacts Under a Potential 340B Rebate Program. Bothwell Regional Health Center does not currently have the staff needed to comply with a Rebate Program. The current estimate from HRSA states these additional steps would only require an additional 5 hours of work per week; this is not realistic. A hospital such as ours has multiple contract pharmacies, multiple TPAs handling our claims transmission as well as mixed use inventory. While some of the TPAs are implementing ways of transmitting data to Beacon, Bothwell will still need to monitor the multiple TPAs, input data from our mixed used claims that qualify, manually submit claims from an in house employee pharmacy and monitor finances in case we need to delay orders of especially high WAC priced medications. The increased WAC impact will need to be followed closely and communicated via reports and presentations to our Leadership Team for financial planning. I believe each rebate claim would require approximately 30 minutes of additional attention. With an estimate of 4,000 affected claims, there is no way we could absorb this into our current workload. An additional full time employee is required to ensure we receive full compensation from our WAC purchases. This burden placed on hospitals operating on a shoestring budget is unacceptable. Our hospital was just forced to do a reduction in force and expenses, with another round expected by summer. The rebate model would require us to create and fill additional 340B role(s). Each full time employee hired to manage the rebate model would cost Bothwell approximately $55,000/year in compensation and benefits. While I would love to create an opportunity for a member of community, it seems both financially burdensome as well as unjust to hire an employee without knowing the true future of the rebate program. Our purpose is to serve our community, both patients and employees, with integrity. To create a role that may only exist for one year goes against our intent to act with purpose and integrity in all things. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bothwell Regional Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our organization already spent countless hours setting up the necessary data feeds for four separate TPAs. To require us to go back and update the feeds to include the necessary medical data presents yet another financial burden. Bothwell utilizes an external report writer to set up the data transmission files. Since this is an external service provided, the data is not available to research exact time allocation and subsequent hours billed. However, I feel that an estimate of at least $2,000 is accurate. Utilizing an external report writer to set up our initial data feeds was an expected expense with an anticipated large return of value from the savings that would be generated. Requiring an additional expense for new data feeds, just for the opportunity to part with even more of our low cash reserves in hope that our organization will receive a rebate that will net the same amount of savings pre-rebate model goes against the entire goal of the 340B program. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Two years ago, the State of Missouri passed bill SB 751 340B. This bill has provisions that prohibit manufacturers from denying, restricting or prohibiting the acquisition or delivery of 340B drugs. Therefore, our organization is not required to submit every claim to ESP. We comply with the manufacturers that request to have the claim data through ESP. This is not the entirety of our claim data. Requiring our entity to add yet another step to our already complex 340B program is unduly burdensome to our rural, safety net hospital. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bothwell Regional Heath Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Bothwell Regional Health Center started our 340B program in October 2023. The planning/implementation phase took close to a year. During the planning phase it was communicated that the first year of program participation would incur more drug spend than maintenance years due to the requirement for our DSH hospital to purchase new 340B inventory at WAC cost until 340B accumulations had been established. This was a known and quantifiable expenditure that our organization was able to anticipate. Implementing a rebate model that requires hospitals to again purchase items at WAC places financial stress on the organization with no burden to the manufacturers. The manufacturers already benefited from our initial WAC purchases (vs the lower GPO prices that DSH entities are prohibited from) and now they will benefit again. Although the entity will eventually recoup the difference via a rebate, it is essentially asking financially strapped safety net hospitals to give a loan to multi-billion dollar drug manufacturers. What do the manufacturers plan to do with the funds that they hold for up to 10 days? They will likely achieve a stable and sizeable amount of money in their coffers as the constant money cycle occurs. Will they be able to earn interest on this money while financial burden remains on critical rural hospitals and the vulnerable community they serve? Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bothwell Regional Heath Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. One such example could be Pomalyst, used to treat Multiple Myelome (blood cancer) and AIDS-related Kaposi Sarcoma. The current 340B purchase price is $9,036.85 per bottle. The WAC purchase price is currently $25,049.70. This will mean Bothwell will have to float $16,012.85 per bottle. We currently have two cancer patients on this medication which would require us to plan to spend over $50k each month and then wait for $32k to be refunded to us by the manufacturer. This is just one of the 25 drugs that will be part of the rebate model. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bothwell Regional Heath Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. While our hospital does not have prior experience with the Beacon platform, I do have concerns. Currently, the hospitals participating in the 340B program use a variety of TPAs. This is beneficial in many ways such as spreading the vast amounts of data transmission through multiple platforms. This ensures that no one program becomes overloaded with data transmissions that may cause program failures and delays. Hospitals also have the ability to change platforms if they feel their current platform is not up to par. Bothwell recently experienced dissatisfaction with our original TPA. We found the customer service lacking and felt that our TPA needs had changed in the two years of our 340B participation. We then researched and chose a new TPA that is a better fit for our 340B program. Requiring all hospitals to use a single platform for the rebate model creates a monopoly with no recourse for entities that may experiences issues with Beacon while desperately waiting on refunds to keep their doors open. Not only will Beacon have sensitive financial information for each entity but patient medical data as well. These two components are highly sought after by cybercriminals and therefore place Beacon at a high risk for cyberattacks. Is Beacon prepared to withstand the increased risk of a cyberattack? How will Beacon protect the entities that are forced to provide such sensitive information from a data breach? Will Beacon face any fines or be forced to reimburse entities for missed refunds if they fail to complete their part of the claim submission process? Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bothwell Regional Heath Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Bothwell Regional Heath Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bothwell Regional Heath Center and other covered hospitals to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lori Wightman Chief Executive Officer Bothwell Regional Health Center
HRSA-2026-0001-0157Uimaitua Afematamarasco · United States2026-04-01T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0158Miriam Aframe · United States2026-04-01T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0159Sahil Afshan · United States2026-04-01T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0160Harlan County Health Systems2026-04-01T04:00Z9,659 chars
See attached file(s) Harlan County Health System CAH281300-00 717 N Brown Street Alma, Nebraska 68920 April 2, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Harlan County Health System welcomes the opportunity to provide feedback on the Request for Information concerning a potential rebate-based model within the 340B Drug Pricing Program. As a Critical Access Hospital serving a rural community in south- central Nebraska, our facility depends on the statutory point-of-sale discount structure to preserve medication access and sustain vital healthcare services for vulnerable populations. The following responses highlight the operational, fiscal, and compliance challenges we would encounter under a rebate framework. Administrative Cost Impact Transitioning to a rebate model would impose substantial administrative burdens. We estimate incremental monthly expenses of at least $750, accounting for additional staff hours devoted to claims reconciliation, rebate validation, financial reporting adjustments, and manufacturer or third-party administrator dispute management. Payment Timing and Cash Flow Implications Rebate payment delays pose a critical concern given our operating margin of -8%. Experiences with the Maximum Fair Pricing (MFP) initiative illustrate the risks: discontinuation of the rebate component created persistent reconciliation difficulties, including misclassification of prescriptions, delayed financial adjustments, and challenges correlating anonymized claims data across systems. For Harlan County Health System, similar delays or inaccuracies would create severe operational exposure. Implications if a Rebate is Denied When manufacturers deny or postpone rebate issuance, the covered entity absorbs the financial loss. Cases discussed within the 340B Coalition reveal repeated outreach attempts without manufacturer response and no effective enforcement pathway. Should rebates be delayed beyond a proposed 10-day payment standard, our facility could face a cash shortfall of $50,000 to $100,000a burden we cannot sustain. Impact on Data Collection and Reporting Adopting a rebate framework would complicate financial reconciliation and data management. Currently, each rebate payment must be validated individually. Third- party administrators use varying reporting methods, with some disclosing gross acquisition prices and others only net post-rebate figures. This lack of standardization hinders accurate accounting and impedes programs aimed at delivering patient savings, such as pharmacy discount cards. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers often raise duplicate discount concerns; however, statutory prohibitions apply only to Medicaid. Independent rebate contracts with pharmacy benefit managers for Medicare and commercial populations fall outside 340B mandates and should not create additional compliance obligations. Audits based on reasonable suspicion are rare in practice. Reporting Requirements Existing rebate platforms lack sufficient tools for proper financial oversight. Organizations using the Beacon system report that required accounting reports to match deposits with bank records were absent. Without comprehensive and uniform reporting, covered entities would face significant accounting challenges under a rebate model. Impact on the Integrity of the 340B Program A rebate structure fundamentally conflicts with the statutory design of the 340B program. Federal law mandates that manufacturers sell covered outpatient drugs at the 340B ceiling price at the time of purchase. Post-transaction rebates introduce uncertainty about whether covered entities ultimately receive mandated pricing. Delays, disputes, or denials effectively force the entity to pay wholesale acquisition cost, undermining the programs legislative purpose. Moreover, the rebate framework would fundamentally revamp the existing 340B program and its essential purpose. The current program provides lower prices on medications that support covered entities financial stability, enabling them to deliver healthcare in rural areas with limited populations and resources. The proposed rebate model effectively rewrites this process and could undermine the programs entire premise. In summary, Harlan County Health System urges HRSA to preserve the existing point- of-sale discount mechanism central to 340B. A rebate-driven alternative would impose undue financial risk, administrative burden, and operational inefficiency on rural safety- net institutions that rely on this program to ensure patient access to affordable medications. Harlan County Health System CAH281300-00 717 N Brown Street Alma, Nebraska 68920 April 2, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Harlan County Health System welcomes the opportunity to provide feedback on the Request for Information concerning a potential rebate-based model within the 340B Drug Pricing Program. As a Critical Access Hospital serving a rural community in south-central Nebraska, our facility depends on the statutory point-of-sale discount structure to preserve medication access and sustain vital healthcare services for vulnerable populations. The following responses highlight the operational, fiscal, and compliance challenges we would encounter under a rebate framework. Administrative Cost Impact Transitioning to a rebate model would impose substantial administrative burdens. We estimate incremental monthly expenses of at least $750, accounting for additional staff hours devoted to claims reconciliation, rebate validation, financial reporting adjustments, and manufacturer or third-party administrator dispute management. Payment Timing and Cash Flow Implications Rebate payment delays pose a critical concern given our operating margin of -8%. Experiences with the Maximum Fair Pricing (MFP) initiative illustrate the risks: discontinuation of the rebate component created persistent reconciliation difficulties, including misclassification of prescriptions, delayed financial adjustments, and challenges correlating anonymized claims data across systems. For Harlan County Health System, similar delays or inaccuracies would create severe operational exposure. Implications if a Rebate is Denied When manufacturers deny or postpone rebate issuance, the covered entity absorbs the financial loss. Cases discussed within the 340B Coalition reveal repeated outreach attempts without manufacturer response and no effective enforcement pathway. Should rebates be delayed beyond a proposed 10-day payment standard, our facility could face a cash shortfall of $50,000 to $100,000a burden we cannot sustain. Impact on Data Collection and Reporting Adopting a rebate framework would complicate financial reconciliation and data management. Currently, each rebate payment must be validated individually. Third-party administrators use varying reporting methods, with some disclosing gross acquisition prices and others only net post-rebate figures. This lack of standardization hinders accurate accounting and impedes programs aimed at delivering patient savings, such as pharmacy discount cards. Manufacturer Efforts to Prevent Duplicate Discounts Manufacturers often raise duplicate discount concerns; however, statutory prohibitions apply only to Medicaid. Independent rebate contracts with pharmacy benefit managers for Medicare and commercial populations fall outside 340B mandates and should not create additional compliance obligations. Audits based on reasonable suspicion are rare in practice. Reporting Requirements Existing rebate platforms lack sufficient tools for proper financial oversight. Organizations using the Beacon system report that required accounting reports to match deposits with bank records were absent. Without comprehensive and uniform reporting, covered entities would face significant accounting challenges under a rebate model. Impact on the Integrity of the 340B Program A rebate structure fundamentally conflicts with the statutory design of the 340B program. Federal law mandates that manufacturers sell covered outpatient drugs at the 340B ceiling price at the time of purchase. Post-transaction rebates introduce uncertainty about whether covered entities ultimately receive mandated pricing. Delays, disputes, or denials effectively force the entity to pay wholesale acquisition cost, undermining the programs legislative purpose. Moreover, the rebate framework would fundamentally revamp the existing 340B program and its essential purpose. The current program provides lower prices on medications that support covered entities financial stability, enabling them to deliver healthcare in rural areas with limited populations and resources. The proposed rebate model effectively rewrites this process and could undermine the programs entire premise. In summary, Harlan County Health System urges HRSA to preserve the existing point-of-sale discount mechanism central to 340B. A rebate-driven alternative would impose undue financial risk, administrative burden, and operational inefficiency on rural safety-net institutions that rely on this program to ensure patient access to affordable medications.
HRSA-2026-0001-0161Melissa Buddensee · NH, United States2026-04-01T04:00Z886 chars
I am a family physician with 17 years of experience, currently also serving as Chief Medical Officer for an FQHC in rural northern New Hampshire. We have been heavily dependent on 340b funds which have been essential for maintaining services and obtaining life-saving medications for our patients. Moving to a rebate model will add unsustainable administrative burden to our health center at a time when we are already overburdened. We have not the staff nor the funds for this. Adding insult to injury, a rebate model will leave the funds in the hands of the pharmaceutical companies and delay then reaching our FQHC, where they are sorely needed to care for our families, friends and neighbors. We have no margin to continue providing care the most vulnerable members of our community. Please don't move to a 340b rebate model, which favors Big Pharma profits over patients' health.
HRSA-2026-0001-0162Lee Cordell · Mobridge, SD, United States2026-04-01T04:00Z2,789 chars
Dear Administrator, I appreciate the opportunity to provide comments regarding the proposed 340B Rebate Model Pilot Program. As a pharmacy leader serving a rural hospital and vulnerable patient population, I write to express strong concerns that a rebate-based model is not sustainable, introduces unnecessary complexity, and undermines the core intent of the 340B Drug Pricing Program. For more than three decades, the 340B program has functioned through upfront discounts, enabling covered entities to stretch scarce federal resources and expand access to care. The proposed rebate model represents a fundamental shift away from this structure by requiring providers to purchase drugs at full price and seek reimbursement after the fact. This is not a refinement of the program, but a redesign that undermines the mechanism that allows safety-net providers to function effectively. Under a rebate model, covered entities would be required to purchase drugs at higher costs and wait for reimbursement from manufacturers. This creates significant financial strain, particularly for rural and critical access hospitals. It exposes organizations to rebate delays or denials and requires carrying substantially higher inventory costs. For many facilities, this is not a manageable operational adjustment, but a serious financial risk. The rebate model also introduces unnecessary administrative burden. Covered entities would need to track claims at a granular level, reconcile rebate payments, manage disputes, and invest in additional systems and staffing. In a healthcare system already dealing with extensive complexity, this adds inefficiencies without improving patient care. Additionally, this approach allows manufacturers to dictate how and when discounts are provided. This shifts control away from covered entities and introduces variability and uncertainty into a program that is meant to be stable and predictable. Manufacturers should not be in a position to define access to pricing that is established under federal statute. The impact of this model ultimately extends to patients. Increased costs and operational burden may force covered entities to limit access to certain therapies or reduce services. Resources that should be directed toward patient care may instead be diverted to administrative processes. The 340B program was designed to improve access to care and support providers serving vulnerable populations. A rebate-based model does the opposite. It adds cost, increases complexity, and weakens the effectiveness of the program. For these reasons, I strongly urge HRSA to reject the implementation of a rebate-based model and instead reinforce the current structure that has successfully supported covered entities for decades. Thank you for your consideration.
HRSA-2026-0001-0163Paul Fournier · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0164Paul Fournier · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0165Ashley Agasi · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0166Kylee Agee · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0167Marjorie Agnew · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0168Julio Agosto · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0169Lexia Aguero · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0170Ronald Foster · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0171Thomasine Fountain · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0172Paul Fournier · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0173Edward Fox · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0174Sherri Fox · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0175Patricia Fracchia · United States2026-04-01T04:00Z32 chars
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HRSA-2026-0001-0176Debra Wood · Chapman, KS, United States2026-04-01T04:00Z4,387 chars
I am submitting this comment as an individual. My comments reflect my personal perspective as a member of the Finance Committee at Salina Family Healthcare Center. I am very concerned about how a rebate model would impact my health center and the over 12,000 patients it serves. Salina Family Healthcare Center relies on the 340B Drug Pricing Program to stretch limited resources and ensure access to affordable medications for low-income, uninsured, underinsured, and medically underserved patients. The proposed shift from an up-front point-of-sale discount to a rebate-after-the-fact model would fundamentally undermine the programs purpose and create serious financial, operational, and patient-care risks for community health centers like ours. The current up-front discount structure is essential for health center stability. Receiving the 340B discount at the point of sale enables our health center to immediately realize savings, which are reinvested directly into patient care. These savings support critical services, including sliding-fee discounts, chronic disease management, behavioral health integration, pharmacy access, and care coordination. A rebate model would require health centers to front the full cost of drugs and wait weeks or months for reimbursement, effectively forcing safety-net providers to serve as short-term lenders to drug manufacturers. For many health centers, including ours, this is not financially feasible. Unlike large hospital systems or commercial entities, community health centers operate on thin margins with limited reserves. Delayed reimbursement creates cash flow uncertainty that could affect payroll, vendor payments, and the ability to purchase medications at all. Even temporary cash shortfalls could lead to reduced services, staffing cuts, or delayed careoutcomes that directly harm patients. In addition to cash flow concerns, the administrative complexity of a rebate model would impose significant burdens on health centers. Tracking prescriptions, verifying eligibility, submitting rebate claims, resolving disputes, and managing delayed or denied rebates would require new systems, additional staff time, and increased compliance costs. These administrative expenses would divert scarce resources away from patient care and disproportionately harm smaller and rural providers who lack the infrastructure to manage complex rebate processes. There is also a substantial risk that rebate payments would be delayed, disputed, or incomplete. Health centers would have limited leverage to challenge manufacturers over missing or denied rebates, creating financial uncertainty and unpredictability in program savings. The cumulative effect would be erosion of the very savings Congress intended the 340B program to provide to safety-net providers. Most importantly, this proposal threatens patient access. At Salina Family Healthcare Center, 340B savings help ensure that patients can afford lifesaving and maintenance medications. If health centers are forced to limit pharmacy services, reduce discounted medication programs, or absorb higher drug costs while waiting for rebates, patients will experience increased out-of-pocket costs, medication delays, or treatment interruptions. For patients managing diabetes, hypertension, mental health conditions, or HIV, even short disruptions in medication access can have serious and costly health consequences. Congress designed the 340B program to support covered entities in serving vulnerable populations, not to create administrative hurdles or financial instability. A rebate-based model shifts risk from manufacturers to safety-net providers and contradicts the programs statutory intent. Any changes to the 340B program should strengthen, not weaken, health centers' ability to care for their communities. For these reasons, I strongly oppose any proposal to replace the current up-front 340B discount structure with a rebate-after-the-fact model. I urge policymakers to preserve the point-of-sale discount system and to work collaboratively with covered entities to address program integrity concerns without jeopardizing patient care or the financial viability of community health centers. Thank you for the opportunity to submit this comment and for considering the real-world impact this proposal would have on health centers and the patients who depend on them.
HRSA-2026-0001-0177Enrico Abate · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0178Noemi Aguiar · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0179Ashante Aguilar · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0180Claudia Aguirre · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0181Kevin Ahern · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0182Madina Ahmed · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0183Mouzam Ahsan · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0184Anthony Aikens · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0185Joynethia Aker Long · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0186Emily Akers · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0187Amkol Akop · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0188Shake Akopyan · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0189Evelyn Akram · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0190Tiffani Ala · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0191Brittany Alandander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0192Jamie Alanis · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0193Ann Alberty · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0194Sheryl Albin · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0195Bob Alcorn · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0196Agustin Aldama · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0197Makita Alee · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0198Marina Aleksanyan · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0199Euripides Aleman · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0200Booker Alesha · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0201Dara Alewine · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0202Catherine Alexander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0203Cheritta Alexander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0204Mary France · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0205Samuel France · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0206James Francis · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0207Bertram Francks · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0208Etta Frank · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0209Linda Alexander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0210Noreen Alexander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0211Sean Alexander · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0212Jill Alfano · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0215Stephanie Alicea · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0216Haider Alkazaly · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0217Jennifer Allan · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0218Bobby Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0219Charles Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0220Crystal Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0221Erick Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0222Henry Franklin · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0223Florine Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0224Mary Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0225Pamela Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0226Temeka Allen · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0227Carrie Allison · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0228Sonny Almario · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0229Carol Almasi · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0230Maria Almeida · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0232Francisco Alonzo · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0233Kenneth Alston · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0234Sharon Alston · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0235Stephen Altergott · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0236Rebecca Althoff · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0237Edgardo Alvarez · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0238Maria Alvarez · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0239Rosanna Alvarez · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0240Roger Alwell · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0241Cheryl Aman · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0242Walters Amanda · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0244Lorraine Amaral · United States2026-04-02T04:00Z32 chars
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HRSA-2026-0001-0245Isela Amaro · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0247Jose Amaya · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0248Linda Ames · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0249Steven Amesquita · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0250Adina Amore · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0251Rodger Amos · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0252Carol Andersch · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0253Cindy Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0254Coatis Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0255Deona Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0256Dorothy Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0257Jamie Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0258Jim Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0259Katie Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0260Margaret Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0261Patricia Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0262Patti Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0263Rachel Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0264Zina Anderson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0265Linda Andes · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0266Angel Andrawes · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0267Wanda Andrade · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0268Lisa Andrea · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0269Dennis Andres · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0270Anthony Andrews · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0271Michael Flores · Bel Aire, KS, United States2026-04-03T04:00Z449 chars
Local NFP health care providers are a critical element in maintaining good community health. These providers are not wealthy or wildly profitable. They are NFPs. They cannot afford to provide interest-free loans to pharmaceutical firms, which is what this proposal calls for. This will result in failure of some NFPs, and some citizens will no longer get the medications they need. I cannot believe anyone in good conscience could support this.
HRSA-2026-0001-0272Jill Anella · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0273Edward Angelis · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0276Lee Ann Timberlake · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0277Kimberly Anthony · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0278Michael Anthony · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0279Porter Anthony · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0280Martha Antillon · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0290Susan Arellano · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0291Heather Aretz · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0292Lorena Argueta · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0293Lisa Arias · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0294Yaridany Arias · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0295Dan Armbruster · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0296Pella Regional Health Center2026-04-03T04:00Z21,175 chars
Please see attachment RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 3, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Pella Regional Health Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, if we forgo early payment discounts to preserve cash flow, it would result in a significant financial loss to our organization, further compounding the negative financial impact. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. By requiring higher upfront drug spending and delayed reimbursement, this model diverts funds that are currently used to expand access and improve services. As a result, we anticipate a decrease in resources available to support uncompensated and unreimbursed care, limiting our ability to serve vulnerable and underinsured populations. In addition, financial strain from carrying higher-cost inventory and delayed rebates may force difficult decisions around delaying or scaling back capital improvements, limiting the addition of new service lines or specialties, and constraining staffing or operational investments. Over time, these pressures could impact overall hospital operations, reducing flexibility to respond to community needs and limiting our ability to invest in programs that improve access, quality, and patient outcomes. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Pella Regional Health Center 404 Jefferson St., Pella, IA 50219 PS-006 404 Jefferson Street Pella, Iowa 50219 641.628.3150 PellaHealth.org Providing healthcare and healing services with Christian compassion. April 3, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA2026 03042) Dear Administrator Engels: Pella Regional Health Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. PS-006 404 Jefferson Street Pella, Iowa 50219 641.628.3150 PellaHealth.org Providing healthcare and healing services with Christian compassion. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, if we forgo early payment discounts to preserve cash flow, it would result in a significant financial loss to our organization, further compounding the negative financial impact. This impact disrupts decades of business practices built around 340B upfront discounts. PS-006 404 Jefferson Street Pella, Iowa 50219 641.628.3150 PellaHealth.org Providing healthcare and healing services with Christian compassion. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. By requiring higher upfront drug spending and delayed reimbursement, this model diverts funds that are currently used to expand access and improve services. As a result, we anticipate a decrease in resources available to support uncompensated and unreimbursed care, limiting our ability to serve vulnerable and underinsured populations. In addition, financial strain from carrying higher-cost inventory and delayed rebates may force difficult decisions around delaying or scaling back capital improvements, limiting the addition of new service lines or specialties, and constraining staffing or operational investments. Over time, these pressures could impact overall hospital operations, reducing flexibility to respond to community needs and limiting our ability to invest in programs that improve access, quality, and patient outcomes. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit PS-006 404 Jefferson Street Pella, Iowa 50219 641.628.3150 PellaHealth.org Providing healthcare and healing services with Christian compassion. denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Pella Regional Health Center 404 Jefferson St., Pella, IA 50219
HRSA-2026-0001-0297John Franklin · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0298Slugger Franks · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0299Harmony Healthcare LI2026-04-03T04:00Z25,510 chars
See attached file(s) 41 0 HarmonyHealthcare Long Island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www.harmonyhealthcareli.org April 2, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Harmony Healthcare Long Island, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of 62% of net 340B savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring Community Health Centers to purchase medications at full price and wait for manufacturer rebates, the proposed rebate model would create significant financial instability and undermine our ability to care for the more than Harmony Healthcare Long Island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue HarmonyHealthcare Long Island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www. harmonyhealthcareli.org and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournal s.org/do i/pdf/10.1161/circulationaha.123 .065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national- surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year. Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Harmony Healthcare Long Island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue HarmonyH ealthcare Long Island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www. harmonyhealthcareli.org anticipated demand of reporting 340B rebate claims.' Harmony Healthcare Long Island estimates to need 1 additional FTE to manage the demand of 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Harmony Healthcare Long Island estimates an additional $100,000 in staffing costs in addition to another $300,000 to cover both the upfront cost of drugs as well as any further administrative fees for TPAs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments totaling more than 15 hours a week, will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Harmony Healthcare Long island urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Close to $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 45,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $75,000 annually. Internal NACHC assessment (99 responses). Ibid. Harmony Healthcare Long island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue 1110 HarmonyHealthcare Long island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www.harmonyhealthcareli.org HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding- fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.1z In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Harmony Healthcare Long Island utilizes the 340B drug pricing program to directly offset the cost of medications for our self-pay and uninsured patients, ensuring access to essential therapies regardless of ability to pay. Through the significant upfront savings generated by the 340B discount, our organization can purchase medications at reduced prices and apply those savings to fully subsidize or deeply discount prescription drugs for patients who lack insurance coverage. This allows many self-pay patients to receive critical medications at zero out-of-pocket cost, preventing treatment interruptions, medication rationing, and avoidable health complications. Our 340B savings are not retained as surplus revenue; rather, they are reinvested immediately into patient medication assistance and affordability programs that are integral to achieving positive health I2 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bnhc.hrsa.gov/compliance/compliance- manual/chapter9#footnote 10 Harmony Healthcare Long island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue HarmonyHealthcare Long Island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www.harmonyhealthcareli.org for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow impact: WAC 340B for 2025 purchases by NDC & volume, reflected in 01 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $220,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $36,000 to purchase these same drugs at the 340B ceiling price. This represents a 600x increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Harmony Healthcare Long Island anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as our self-pay medication discount program, as well as our mobile coach which provides medical treatment and medications to patients who are unable to reach our centers. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund employees such as Outreach Coordinators and Community Health Advocates. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 9,680 uninsured patients from rationing their insulin or heart medication. 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Harmony Healthcare Long island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue HarmonyH ealthcare Long Island 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www.harmonyhealthcareli.org manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.' If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $200,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real- time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second Iayer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; " Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www. federalreg i ster. gov/documents/2025/08/01/2025-14619/340b-program-notice-abp ication-process-for-the-340b-rebate-model-p i lot- program Harmony Healthcare Long Island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue HarmonyHealthcare Long Island Sincerely, Davi rniro President & CEO 400 Oak Street, Suite 104, Garden City, New York 11530 516.296.3742 www.harmonyhealthcareli.org Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Harmony Healthcare Long island strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Harmony Healthcare Long island believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Harmony Healthcare Long island appreciates the opportunity to respond to this Request for Information on the 340B Rebate M ilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, eas contact Nicholas Kohlhepp at nkohlhepp@harmonyhealthcareli.org Harmony Healthcare Long island Locations Elmont Freeport Hempstead Oceanside Roosevelt Westbury 161 Hempstead Turnpike 101 South Bergen Place 619 Fulton Avenue 3227 Long Beach Road, Ste 2 380 Nassau Road 682 Union Avenue
HRSA-2026-0001-0300Ammonoosuc Community Health Services, Inc2026-04-03T04:00Z407 chars
CHC's do not have the financial resources to purchase medications at full price and wait for their rebate, if that happens at all. This puts CHC's who serve ~52 million patients (who are in need of these services) in an unheard-of risk of losing programs detrimental to their care! Why??? is this burden being placed on CHC's who already operate with lean federal dollars to care for the nations people???
HRSA-2026-0001-0301(no commenter metadata)2026-04-03T04:00Z2,730 chars
See attached file(s) April 3, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of Mitchell County Hospital District, a rural Critical Access Hospital in Texas, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program. We strongly oppose implementation of a rebate-based model, as it would introduce significant administrative burden, create material cash flow risk, and reduce our ability to provide care to our rural community. Key Financial Impact 6.5 Days Cash at Risk $517,620 in 340B benefit (FY2025) ~10% of Charity Care Supported $4.7M in charity care (FY2025) Administrative and Operational Impact The rebate model would require approximately 1.0 FTE to manage claims submission, reconciliation, and appeals. Vendor support is estimated at $23,700 to over $50,000 annually, creating a material burden for a rural provider. Data and Transparency Concerns While we currently submit sufficient data through 340B ESP, a rebate model would require expanded data collection not readily accessible and requiring manual effort. Manufacturers are not required to provide corresponding data back, limiting visibility into denials and appeals. Cash Flow and Charity Care Impact Mitchell County Hospital District operates with less than 30 days cash on hand. 340B savings represent 6.5 days of cash and support nearly 10% of charity care. Delayed reimbursement creates immediate liquidity risk. Patient Access Impact 340B enables access to medications in a rural community. A rebate model introduces uncertainty and may limit patient support services and medication access. Program Integrity Risks A rebate model shifts control to manufacturers and increases denial risk without transparency, placing rural providers at a disadvantage. Recommended Alternatives Maintain the upfront discount model and consider a third-party clearinghouse to address duplicate discount concerns more efficiently. Current Model Rebate Model Immediate savings Delayed reimbursement Minimal burden Higher admin burden Predictable Uncertain timing Supports care Threatens access Conclusion Mitchell County Hospital District urges HRSA not to implement a rebate-based model. It would increase burden, create instability, and reduce resources for patient care. Sincerely, Diane C. Moore, MBA Chief Financial Officer Mitchell County Hospital District Diane C Moore Digitally signed by Diane C Moore Date: 2026.04.03 08:17:31 -05'00'
HRSA-2026-0001-0302Sarah Anders · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0303Phillip Andrews · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0304Ammonoosuc Community Health Services, Inc., (ACHS)2026-03-30T04:00Z48,239 chars
See attached file(s) AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. March 30, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for lnformation: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Ammonoosuc Community Health Services Inc., (ACHS) I thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to ACHS's posed by the proposed rebate model. The 340B program is foundational to Achs's ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to safety-net providers, like ACHS, directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We respectfully request that HRSA except health centers from the proposed rebate model. Alternatively, HRSA could require a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a fraction of the cost and administrative burden of a rebate model. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses In 2017 ACHS reinvested $894,420 of 340B savings into ACHS patient care As of March 30, 2026, annualized savings are $172,008. This represents an 81% economic erosion in our 340B savings and ability to reinvest in patient care. See Figure 1 ACHS Trended 340B savings per month below. Expressed in human terms at an MAIN OFFICE ACHS-Woodsville ACHS-Whitefield ACHS-Warren 25 Mt. Eustis Road 79 Swiftwater Road 14 King Square 333 NH Route 25 Littleton, NH 03561 Woodsville, NH 03785 Whitetield, NH 03598 Warren, NH 03279 P (603) 4/14-2464 P (603) 747-3740 P (603) 837-2333 P (603) 764-5704 F (603) 444-5209 F (603) 747-0416 F (603) 837-9790 F (603) 764-5705 www.ammonoosuc.org $54, $27,225 \ $19,065 $18,887, 34 AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. average investment of $171 per primary care visit'. The loss of $722,412 in annual 340B savings is 4,225 visits. Given the national average of 4 primary care visits per person per year2, this results in a decrease in access for 1,056 patients! Figure 1 ACHS Trended 340B savings per month. AMMONpo9SUC COMMUNITY HEALTH SERVICES TRENDED 340B SAVINGS $80,000 . $- 1/1/20181 /1/20191 /1 /20201 /1 /20211 /1 /20221 /1/20231/1/20241/1/2025, .1/1/2018'1/1/2019 1/1/2020 1/1/2021.1/1/2022 1/1/2023 1/1/202411/1/2025 6Average month[y Sayings for the year. $74,535 $73,342 $76,241 $54,342 $27,225 $19,065 $18,887 ; $14,334 I YEAR Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 1 How Much is an Average Primary Care Doctor Visit? - Advance Study 2 FastStats -13liwsician office visits MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) /144-5209 ACHS-Woodsville 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 Page 2 of 16 ACHS-Whitefield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AVERAGE MONTHLY SAVINGS IN DOLLARS $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $74,535 *., $73,342: ' 0, AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. Executive Summary: We strongly urge HRSA to exempt CHCs, like ours, from any rebate model to protect the financial stabitity of safety-net providers and ensure continued access to care for the most vulnerable patients for the following reasons: This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. The proposed 340B Rebate Model Pilot Program is not only a financial threat to us, but also a duplicative and unnecessary administrative burden. CHCs, like ACHS, will incur additional workforce and IT costs to complywith multiple manufacturer rebate requirements. The proposed 340B Rebate Model Pilot would directly impact on our ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Our pharmacies, entity-owned and contract, will not have access to the 340B price when the patient needs medication. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. We respectfully request that if a rebate pilot is implemented: Manufacturers should be required to pay rebates within 10 days of both initial and corrected determinations. HRSA should explicitly exclude Clinic-administered drugs from any 340B rebate model pilot. HRSA should require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled organizations like ours to purchase outpatient medications at significantly reduced prices, enabling us to provide affordable MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 444-5209 ACfIS-Woodsv691e Page 3 of 16 ACHS-Whitefield 79 Swiftwater Road 14 King Square Woodsville, NH 03785 Whitefield, NH 03598 P (603) 747-3740 P (603) 837-2333 F (603) 747-0416 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs, like ours. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For ACHS, this means it will impact: Number of 340B transactions/ how many patients does your CHC serve o As shown above in human terms this adversely affects over 1,000 patients. Current admin costs for your 340B program o $735,246 How do you use your 340B revenue specifically? ACHS reinvests the 340B savings into the following illustrative areas. , o Affordable medications. o Patient Navigators - Medication Assistance Counselors & Certified Health Insurance Marketplace Assistors. We strongty urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioningto other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularlyfor patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 4,14-2464 F (603) 444-5209 ACHS-Woodsville 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 Page 4 of 16 ACHS-Whitetield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs, like ACHS, serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.3 This patient population relies on affordable medications to manage these long- term conditions. We are deeply concerned that implementing a rebate model would cause ACHS patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe - alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.4 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.6 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs, like ours, seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive 3 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haernost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 5 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. htt )s://www.aha 'ourna s.orc,/doil 10.1161/circulationaha.123.065748 6 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. littps:I/www.sairilisaxovklataidala-we-collectinsduh-national-survevdrusa-use-and-healtlthlational-releases MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 444-5209 ACHS-Woodsville Page 5 of 16 ACHS-Whitefield 79 Swiftwater Road 14 King Square Woodsville, NH 03785 Whitefield, NH 03598 P (603) 747-3740 P (603) 837-2333 F (603) 747-0416 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.amrnonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.' lmpairingaccess to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,8 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable forthe patient and precludes CHCs, like ours, from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to ACHS, but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes 7 Hauser RA, et al. Long-Tenn Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23:13:773999. doi: 10.3389/fneur.2022.773999. PM1D: 3528(1262: PMCID: PMC8906841. 8 2025 UDA Data, HRSA (hrsa.gov) MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 411-5209 ACHS-Woodsville 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 Page 6 of 16 ACHS-Whitefield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.amrnonoosue.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Sliding Fee Discount: ACHS provided [2025 Sliding Fee Discount from UDS] in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: ACHS anticipates needingAnticipated Additional 1-2 FTE as a Result of Rebate Model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, ACHS anticipates an increase which would likely eliminate all savings to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that ACHS anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 futl-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.9 ACHS anticipates adding 1-2 FTE that alone would put the program out of existence for all intents and purposes where the cost of administration will exceed the cost of any savings. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.1 CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For ACHS an additional 1-2 FTE would add an additional $64,480 - $128,960 of non-value-added administrative expense against a currently eroded (81% erosion since 2017) of $172,008 netting a mere $43,048 compared to 2017 savings of $849,420 or 95% erosion in 340B savings! Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. ACHS ESTIMATED HOURS TO REPORT CLAIMS, is 40-80 hours/ week will be required to report 340B rebate claims to a third-party platform, assuming all 9 Internal NACHC assessment (99 responses). 13 Ibid. MAIN OFFICE ACHS-Woodsville Page 7 of 16 ACHS-Whitefield ACHS-Warren 25 Mt. Eustis Road 79 Swiftwater Road 14 King Square 333 NH Route 25 Littleton, NH 03561 Woodsville, NH 03785 Whitefield, NH 03598 Warren, NH 03279 P (603) 41d -2464 P (603) 747-3740 P (603) 837-2333 P (603) 764-5704 F (603) 444-5209 F (603) 747-0416 F (603) 837-9790 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. ACHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharrnacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. In our experience these costs run in the tens of thousands of dollars upfront and then require ongoing costs to keep they up today, compliant and cyber secure to the best of our ability. will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B by 95% from $849,420 in FY2-17 to $43,048 post implementation of a rebate model year. Total Cost: For ACHS, which serves 8,445 patients, the total projected increase in expenses, including labor, IT, and carrying costs-is estimated at $150,000 annually. The In-House Pharmacy: The Burden of IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Unfortunately, in 2018 the ACHS in-house pharmacy was forced to close due to predatory contracting with PBM who siphoned savings to their book of business. This was the beginning of the erosion in our 340B program, made worse due to contract pharmacy limitations, and now due to a rebate model it will likely result in the elimination of the 340B program for ACHS and the monies we had invested in much needed patient care. MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 444-5209 ACHS-Woodsville 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 Page 8 of 16 ACHS-Whitefield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.arnmonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. ACHS currently partners with fewer pharmacies due to unilateral restrictions which has constrained access in our mountainous rural area. At time forcing us to select one pharmacy across twenty-six towns where one in three of our friends, families, and neighbors call ACHS their care provider of choice. This creates a significant patient safety issue. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across tens of different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative challenges. In our region, this would leave patients in the twenty -six towns that represent our service area in Northern Grafton and Southern Cos Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already," and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.12 in addition to the PBM forced closure of our integrated in-house pharmacy, two Rite Aid stores have closed, and the walgreen's stores are trending for bankruptcy. The forced PBM forced closure of the ACHS in-house pharmacy decimated our clinical pharmacy services that l instituted during the years that l co-lead the National HRSA/CMS funded patient safety pharmacy collaborative. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty ofwaitingfor a manufacturerto approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their 11 Vulnerability Index Ap.troach to Identify Pharmacy Deserts and Keystone Pharmacies Pharmao, and Clinical Pharmacolouv JAMA Network Open . JAMA Nctwork httr/S:UWWW.healthaffairs.orti/doilahsi 10.l377Ihlthaff.2024.00192?jw' -alCode=hlthati MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 41'1-2464 F (603) 444-5209 ACHS-Woodsville Page 9 of 16 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 ACHS-Whiretleld 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AMMONOOS UC COMMUNITY HEALTH SERVICES, INC. patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.14 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B 13 HRSA FAQ 14 Such discounts are subject to potential legal and contractual restrictions. htt ps://bphc. hrsa. -ov/com pl iance/compl iance- manua lich apter9ffootnote 1 0 MAIN OFFICE ACHS-Woodsville PagE 10 of 16 ACHS-Whitefield ACHS-Warren 25 Mt. Eustis Road 79 Swiftwater Road 14 King Square 333 NH Route 25 Littleton, NH 03561 Woodsville, NH 03785 Whitefield, NH 03598 Wanen, NH 03279 P (603) 444-2464 P (603) 747-3740 P (603) 837-2333 P (603) 764-5704 F (603) 444-5209 F (603) 747-0416 F (603) 837-9790 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. rebate pilot, manufacturers and theirvendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (- 5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate ModeL This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Ammonoosuc Community Health Services, Inc., (ACHS) anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Medication Therapy Management, Medication Assistance Counseling, oral health vouchers. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund lay off community health workers, patient navigators, and mediation assistance counselors. Patient FinancialAssistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,405 patients who live under 200% of the federal poverty level and as such are sliding fee scale eligible from rationing their insulin or heart medication. B. Wholesaler lmplications Another concern is that purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting their ability to order medications until MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603)1114-5209 ACHS-Woodsville Page 11 of 16 ACHS-Whitetield 79 Swiftwater Road 14 King Square Woodsville, NH 03785 Whitefield, NH 03598 P (603) 747-3740 P (603) 837-2333 F (603) 747-0416 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.arnmonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. ACHS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, ACHS estimates its 2027 Annual Rebate Opportunity Cost to be approximately $172,000 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. ACHS estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend would wipe out the savings program driving it into negative savings. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves in violation of HRSA expectation of minimum of 180 days cash on hand. This is not a sustainable solution; the interest costs alone are estimated to be thousands of dollars annual funds that are currently dedicated to KEY HEALTH PROGRAMS including and not limited to affordable medications, patient navigation, community health workers, medication assistance councilors, oral health vouchers. This creates an environment of clinical instability. In our region, where patients have no choice but to rely on ACHS, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) d44-5209 ACHS-Woodsville Page 12 of 16 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 ACHS-Whitefield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened abilityto provide the steeply discounted medications that our sliding fee scale patients risking potential adverse drug events, delays in care, emergency department and acute care use some of which could be life threatening. a. Financial Impact of Rebate Denials and Delays Ammonoosuc Community Health Services, Inc., (ACHS) urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism," but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, ACHS takes a net loss on the transaction, having already paid the full WAC price to the whotesater and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative e.g., 10% denial rate would result in a net annual loss of $ 17,201. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state- level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictabte denials and delays create serious cash flow issues for 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregis,,Jlaov/documents/2025/08101/2025-14619/3401:tproaram-notice-ap ication-process-for-the-340b- rebate-modcl-pilot-prouam MAIN OFFICE ACHS-Woodsville Page 13 of 16 ACHS-Whitefield ACHS-Warren 25 Mt. Eustis Road 79 Swiftwater Road 14 King Square 333 NH Route 25 Littleton, NH 03561 Woodsville, NH 03785 Whitefield, NH 03598 Warren, NH 03279 P (603) 444-2464 P (603) 747-3740 P (603) 837-2333 P (603) 764-5704 F (603) 414-5209 F (603) 747-0416 F (603) 837-9790 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. CHCs operating on thin margins, which depend on timely reimbursementto sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claim-level documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs, like ours, already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, ACHS utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 414-2464 F (603) 444-5209 ACHS-Woodsville Page 14 of 16 ACHS-Whitefield 79 Swiftwater Road 14 King Square Woodsville, NH 03785 Whitefield, NH 03598 P (603) 747-3740 P (603) 837-2333 F (603) 747-0416 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. ACHS also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. ACHS participates in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. We have always had a clean audit! CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a NationaL, Neutral Claims Clearinghouse Instead of a rebate program, we recommend OPA use a NeutraL Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducingthe need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 111-5209 ACHS-Woodsville 79 Swiftwater Road Woodsville, NH 03785 P (603) 747-3740 F (603) 747-0416 Page 15 of 16 ACHS-Whitefield 14 King Square Whitefield, NH 03598 P (603) 837-2333 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org AMMONOOSUC COMMUNITY HEALTH SERVICES, INC. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Ammonoosuc Community Health Services, Inc., (ACHS) strongly urges HRSAto exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Ammonoosuc Community Health Services, Inc., (ACHS) believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Ammonoosuc Community Health Services, Inc., (ACHS) appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Edward D Shanshala II, MSHSA, MSEd Be mindful, be active, and be well, Edward D Shanshala II, MSHSA, MSEd Ed.Shanshala_@A HS-IncoCrg 603-991-7756 (24/7) MAIN OFFICE 25 Mt. Eustis Road Littleton, NH 03561 P (603) 444-2464 F (603) 444-5209 ACHS-Woodsville Page 16 of 16 ACHS-Whitetield 79 Swiftwater Road 14 King Square Woodsville, NH 03785 Whitefield, NH 03598 P (603) 747-3740 P (603) 837-2333 F (603) 747-0416 F (603) 837-9790 ACHS-Warren 333 NH Route 25 Warren, NH 03279 P (603) 764-5704 F (603) 764-5705 www.ammonoosuc.org
HRSA-2026-0001-0305Wheeler Health2026-04-03T04:00Z37,335 chars
See attached file(s) 91 Northwest Drive | Plainville, CT 06062 | 860-793-3500 www.wheelerclinic.org April 3, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wheeler Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Wheeler Health reports an average loss of $500,000 to $3 million from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Wheeler offers integrated primary care and behavioral health services in our five (5) health centers located in Hartford, New Britain, Bristol, Waterbury, and Plainville, in addition to our 17 school- based behavioral health centers in Bristol and New Britain. Our health centers serve over 22,000 children, families, and adults annually. For Wheeler Health in particular, this means it will impact: 2 Nearly 600 unique patients and over 2,100 transactions Current administrative costs of $60K Investments in non-revenue generating positions to support patients and increase quality of care, along with covering losses for uncompensated care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Wheeler Health provided $406,132 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wheeler Health anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wheeler Health anticipates an increase of $20,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and costs of implementing new systems and processes. According to an internal assessment, Wheeler Health estimates needing to hire 0.5 to 1 full- time equivalent (FTE) to meet the anticipated demand of reporting 340B rebate claims. Additionally, Wheeler Health estimates the cost to hire additional staff to be between $30,000 to $100,000 annually. These additional costs are not an option for Wheeler Health. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, Wheeler Health will face an increased administrative burden in terms of monitoring rebate claims and payments. Wheeler Health estimates 20 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. 5 Wheeler Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Wheeler Health currently partners with 8 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 8 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in our geographic areas, including Hartford, New Britain, Waterbury, Bristol, and Plainville with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,7 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.8 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 7 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 6 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Wheeler staff work with patients to understand the value of access to lower cost prescription drugs offered through the 340B program that would normally be too expensive for them to pay out of pocket, ultimately resulting in higher quality care and outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $200K to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1K to purchase these same drugs at the 340B ceiling price. This represents a 2000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wheeler Health anticipates needing to reduce: 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as mobile medical services and community events promoting blood pressure monitoring and other risk factors. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund community health workers, care managers, directly increasing wait times for appointments and access to community supports that address upstream drivers of health. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,100 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wheeler Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Wheeler Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $25K. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wheeler Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $17K. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. This is not a sustainable solution. 9 a. Financial Impact of Rebate Denials and Delays Wheeler Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $10K. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System, including data on 340B-purchased drugs, associated costs/revenues, and detailed information about patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 11 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Wheeler Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wheeler Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Wheeler Health appreciates the opportunity to respond to this RFI on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at STrocchi@wheelerhealth.org or 860-793-3379. Sincerely, Sabrina Trocchi, PhD, MPA President/CEO Wheeler Health
HRSA-2026-0001-0306Cindy Frausto · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0307Danny Frazier · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0308Brandon Frazzetta · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0309Don Freed · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0310Mary Freeman · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0311Blacktail Health2026-04-03T04:00Z117,837 chars
HHS Docket No. HRSA202603042 March 27, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Butte Silver Bow Primary Health Care Clinic (DBA Blacktail Health), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Blacktail Health anticipates a loss of around $1 million from entity- owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was 2 created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Blacktail Health in particular, this will result in: A significant strain on our monthly cashflow. A negative impact on the 50,112 340B transactions we completed in 2025 and the 12,100 patients we served in 2025. A significant increase to our current administrative costs for our 340B program, which were over $1.8 million dollars in 2025. A negative impact on the programs that are available and optimized due to being allowed to purchase our medications at the upfront 340B price. These programs include medical, dental, behavioral health, and pharmacy services. Specifically, as part of our pharmacy sliding fee discount program, we pass on the 340B price to our patients, and this would be impossible to continue with having to pay the full cost upfront and hoping for the rebate to come through. Our overall 340B savings would be impacted by the rebate model which jeopardizes many of our other programs. These include clinical pharmacy where there are not enough payers that cover the crucial service and therefore, we rely on 340B savings to sustain. 340B savings also allows us to support our mobile medical clinic, 340B audit preparation, facility improvements, pharmacy adherence packaging services and pharmacy delivery, enabling services, etc. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. 6 2025 UDA Data, HRSA (hrsa.gov) 5 HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Blacktail Health provided $1,943,993.14 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Blacktail Health anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Blacktail Health anticipates an increase of $125,000 to $150,000 per year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 6 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 In addition to implementing a third party administrator at our entity owned pharmacies, Blacktail Health will need to add at least 1 FTE to help manage a rebate program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Blacktail Health anticipates an annual cost exceeding $4 to $5 million. This includes upfront costs to purchase the 10 medications identified for the 2026 pilot program, increased labor and IT costs, and potential losses from denied rebates and expired drugs without rebate recover. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Blacktail Health estimates that 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Blacktail Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Blacktail Health estimates a one-time cost of up to $25,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 13,000 patients, the projected total increase in expenses, including labor, IT, and carrying costs is estimated at $ 125,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. At Blacktail Health pharmacies, we manage our retail and 340B inventories virtually via our pharmacy computer software. Our pharmacy software has limited capabilities for advanced reporting. We implemented a Third-Party Administrator (TPA) at the end of 2025 in anticipation of a rebate pilot program. This decision was made due to increased operational burden a rebate program would impose and the lack of operational capacity we have to manage a rebate program. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Integration of a TPA and other needed vendors cost Blacktail Health an estimated $20,000 integration cost. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend a minimum of 15 to 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Silver Bow County and Beaverhead County in rural Montana with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Blacktail 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 Health pharmacies offer sliding-scale discounts on prescription medications to patients at or below 200% of the federal poverty level. This allows us to help uninsured and underinsured patients afford prescriptions medications. Without this upfront discount, critical medications would be unaffordable for many of our patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,852,488.30 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $371,779.72 to purchase these same drugs at the 340B ceiling price. This represents a 1,592,595% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Blacktail Health anticipates needing to reduce: 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy services at all of our clinics, our mobile health unit that provides health care to the unhoused in our community, care management services, and adherence packaging services at our pharmacies. Workforce & Staffing: The administrative burden of this pilot would require us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund full time clinical pharmacists and care managers in our clinics and clinical staff at our mobile health unit. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,915 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Blacktail Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Blacktail Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately 12 $432,166.44. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Blacktail Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $ 1,852,488.30 for the MFP drugs in 2026. The projected upfront annual drug spend would increase $2,119,902.60 for the MFP drugs in 2027, and $2,443,288.63 for the MFP drugs in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves and potentially take out a line of credit. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Blacktail Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Blacktail Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of $ 371,779.72 for the MFP drugs in 2026. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 14 denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 16 purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 17 If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 18 specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications 19 at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 20 as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 21 charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 22 generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 36 C.F.R. 447.518(a). 23 implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront 24 discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 26 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 27 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 28 factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 29 Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 30 transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under a NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 31 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. 32 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Blacktail Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Blacktail Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 34 Blacktail Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact myself or Kate McGree, our Director of Pharmacy, at kmcgree@blacktailhealth.org. Sincerely, Tammy A. Cox, PharmD Executive Director Blacktail Health tcox@blacktailhealth.org
HRSA-2026-0001-0312Patricia Freeman · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0313William Freeman · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0314Edward French Torres · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0315Paul Frerichs · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0316Gillian Frey · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0317Elliot Hospital2026-04-03T04:00Z12,622 chars
Please accept our comments attached on behalf of a Rural Referral Center against the Rebate Model. The Honorable Thomas J. Engels Adrninistrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Adrninistrator Engels: On behalf of Elliot Hospital, a Rural Referral Center in Manchester, NH, we are grateful for the opportunity to comment on the Department of Health and Hurnan Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." As explained below, any rebate mechanism will irnpose enormous costs and burdens on Elliot Hospital that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. A shift to a new kind of discount mechanism dernands new resources, irnposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital and far above and beyond what we are experiencing now. A pilot program will be particularly detrimental to our limited resources since it requires covered entities to maintain both systems and workflows at the same tirne, exponentially increasing the cost and labor involved in rnaintaining Program integrity and cornpliance. Manufacturers are increasingly demanding arbitrary data submissions in increasingly burdensome methods for the primary goal of limiting covered entities from accessing 340B discounts purely to further profits, instead of working with healthcare providers to support the well-being of our cornrnunities. Elliot Hospital has been supporting our cornmunity for 135 years by caring for patients patients that are mothers and fathers to the next generation, family members to those near and far, community members that help rnake our world a better place. Our mission is to Inspire, Heal, and Serve, and we only ask the sarne level of compassionate collaboration of drug manufacturers in pursuing a fair and transparent way to balance interests of all involved parties while keeping patient care as the primary focus and goal of the 340B program. Current Costs Under the Upfront 340B Discount. Elliot Hospital processes approximately 600,000 340B hospital transactions, 36,000 340B retail transactions, and 6,000 340B contract pharmacy transactions per year. We incur administrative costs for a 340B split-billing administrator, contract pharmacy adrninistrator, external vendor audits, legal and compliance support, and labor involved in the oversight of operations and compliance of a team with more than twenty team members directly involved in the Program. However, the rnajority of the data processing work is completed by just a few of our team that are also balancing a full workload for other roles and responsibilities. Impact on Hospital-Owned Retail and Specialty Pharmacy Services. Elliot Hospital also operates a hospital-owned retail and specialty pharmacy that dispenses more than $30 million in 340B- eligible specialty medications each year. These drugs support patients living with cancer, multiple sclerosis, HIV, autoirnrnune diseases, and other complex conditions who depend on timely access to high-cost, highly coordinated care. A rebate model would place an especially heavy strain on our specialty pharrnacy operations. Many of these medications cost well over $20,000 per fill, and waiting weeks or rnonths for a rebate would require the hospital to carry rnillions of dollars in upfront drug costs. That level of financial exposure threatens the long-term stability of these services. Specialty pharmacy claims also draw from multiple data sources (hubs, payers, our EMR, and external dispensing systems) and none of these systerns are built to meet the new formatting, submission, and reconciliation requirements manufacturers are proposing. Even a small number (1- 2%) of denied or disputed rebates on these high-cost rnedications would result in significant financial losses and could ultirnately lirnit patient access to essential therapies. For these reasons, the rebate model creates disproportionate risks for specialty pharmacy operations and the vulnerable patients who rely on them. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would place significant burden on the covered entity and the administrative burden would be overwhelming for Elliot Hospital. Initial administrative impact is estimated at $1.5 million annually for Elliot Hospital. This upfront increased cost burden will eat into the benefits of the 340B Program and reduce our available savings by more than 10%. This does not account for the countless hours of labor required to prepare and handle the change. We have already had to divert IT, pharmacy, revenue integrity, and othet resources to evaluate and prepare for the requirernents of the rebate model. We would continue to need many hours per week to track, analyze, validate, and process rebates and handle credit/rebills required for discrepancies. Staffing Impacts Under a Potential 340B Rebate Program. Elliot Hospital does not currently have the staff needed to cornply with a Rebate Program. We estimate it would require the following adjustments to our team: Additional 2 full time employees would be required to handle data processing, rebate tracking and validation, and manufacturer communication. o Hiring would require 3 6 rnonths to find qualified individuals with the necessary niche skill set. Additional 5 10 hours weekly would be required from each healthcare tearn member to perform the administrative function of 340B integrity review and optimization activities. Lacking the staff necessary to handle the additional work, Elliot Hospital would be missing out on statutory 340B discounts that we are entitled to since we would not be able to find, dispute, and reconcile rebate discrepancies that are not received from the manufacturer. This unfairly favors the drug companies inaction by the drug company creates profit for the company, but inaction by the covered entity results in missed essential savings needed to stretch scarce federal resources. 2 Systeins and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program. Elliot Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount rnodel. Any shift to a rebate mechanism will force us to incur significant burden to change those systems. For example, our split-billing and retail accumulator logic has a price evaluation prior to purchasing a 340B accumulated item. Because the 340B price will not be available at the time of ordering, the systern will automatically select a non-340B purchase source that is lower priced than the wholesale price listed on the 340B account. There is no current support in our electronic medical record (EMR) to highlight or flag the medications that will be rebate eligible. It will require manual adjustment per participating NDC purchase to override the systern and purchase in a manner eligible for a rebate. Due to the cornplexity of the systems and the large amount of end users that would require training, our choices will be to force all NDCs to use 340B creating a compliance and financial risk or forgo the potential 340B discount. Either practice will erode our ability to maintain 340B accumulations and access the 340B discount. It is also unacceptable that we must take it on faith that if we purchase the eligible item at a wholesale price higher than other available contracted prices, that we rnay have access to a rebate if our claim subrnission and formatting is acceptable to drug manufacturers that have no published standatd for what they deem acceptable. Payment Timing and Potential Cash Flow Impacts for Covered Entities. Unlike the existing upfront discount mechanism, any rebate mechanism will force Eliiot Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Data Collection by Covered Entities. Both HRSA and the drug cornpanies stated that a rebate mechanistn would not impose new data-related burdens on 340B hospitals like ours. That is incorrect. The data and formatting required are so new that there is no report that is ready for submission when pulled. Elliot Hospital will need to pull reports from no less than four systems, and each data set requires slightly different data fortnatting that creates hours-long Excel labor. For example, claims require various formatting such as: NDCs must be changed from the standard 5-4-2 format to the 11 digit format with leading zeros. NDCs must be searched and matched for each manufacturer policy of where and how claims are to be submitted dependent on rnanufacturer. The date field must be changed from date and time to date only, particularly with reports coming from our EMR. The health plan name must be adjusted to a format that is accepted ampersand (&), apostrophes, and periods are not accepted but used by our data systems. The appropriate HCPCS code or unit of rneasure must be deterinined for each NDC since this differs based on the system data is pulled from. Furthermore, although third party systems have offered direct data feed into Beacon to be available as soon as possible (which may take months or years to implement), there is no visibility in Beacon that allows a covered entity to confirm automated data submissions have been accepted or meet 3 claim requirements to be considered conforming. With no ability to check the data submitted, it forces covered entities to take on this work manually to ensure rebate availability. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the trernendous costs that a rebate mechanism will impose on Elliot Hospital, HRSA should rely on those other options. Any othet decision would impermissibly privilege the intetests of drug cornpanies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate rnechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a rninimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Elliot Hospital has never had a drug company raise any deduplication issues to date, and has always cooperated voluntarily with third party administrators seeking data clarification on behalf of drug manufacturers. For all of these reasons, Elliot Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neuhal, third-party clearinghouse. If, however, HRSA chooses to move fotward with this ill-conceived effort, it must allow Elliot Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider irnportant aspects of the problem. We appreciate your considetation of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, ichael S. Tlzrilli Sr. Vice President & Chief Financial Officer Elliot Hospital 1 Elliot Way Manchester, N H 03103 4
HRSA-2026-0001-0318Carmen Frias · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0319Kurt Fricker · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0320Michael Friedman · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0321Stanley Frierson · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0322Mary Claire Friesema · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0323Memorial Healthcare2026-04-03T04:00Z6,627 chars
See attached file. 11 March 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Parklawn Building Room 13N188 Rockville, MD 20857 RE: Concerns About Submission of Claims Data for All 340B Dispenses Dear Administrator Engels: Memorial Healthcare is writing to inform HRSA of the significant financial pressure on our hospital to comply with new drug manufacturer demands for claims data for all 340B dispenses, including from in-house pharmacies, both retail and mixed-use, and our serious concerns with providing the data. We have been notified by Novo Nordisk that we will no longer receive 340B pricing on Novo Nordisk drugs unless we transmit claims data for all 340B dispenses from in- house pharmacies, including both retail and mixed-use, effective April 1, 2026. Prior to this, Exelixis announced a new policy to bar access to 340B pricing for drugs dispensed from 340B hospital-owned pharmacies unless the hospital shares claims data, effective Oct. 1, 2025. And Eli Lilly and Company (Lilly) announced recently that we will no longer receive 340B pricing on any Lilly drugs unless we transmit claims data for all 340B dispenses, including 340B drugs dispensed at in-house pharmacies and medical claims, effective Feb. 1, 2026. These manufacturers policies conflict with the 340B statute and would impose severe administrative and financial burdens on 340B hospitals. We urge you to prevent manufacturers from illegally denying 340B pricing for drugs covered under the 340B statute and dispensed by us directly to our patients. Manufacturers are required under the 340B statute to offer covered entities covered outpatient drugs for purchase at or below the applicable ceiling price. In return, manufacturers have access to the Medicaid and Medicare Part B markets. There are no provisions in the 340B statute permitting conditions to be placed on drugs purchased by the covered entity for it to directly administer or dispense to its patients. Contrary to Novo Nordisks and Lillys description in their policy changes, the data that it is conditioning access to 340B pricing on is not minimal or standard business information and far exceeds data previously requested by 340B ESP. 340B hospitals have never been required to compile and submit medical claims data for any purpose, and doing so would be expensive and burdensome. Diverting health care resources to administrative data collection and claims tracking will further erode our 340B savings, limiting our scarce resources intended for patient care. As noted above, Novo Nordisk is now the third drug manufacturer attempting to impose these illegal conditions, demonstrating a dangerous trend among manufacturers. Exelixis was the first to announce its intent to deny 340B pricing unless hospitals submit claims data from its pharmacies, followed shortly by Eli Lilly and Company (Lilly). We urge HRSA to use all enforcement options provided under the 340B statute to prevent Novo Nordisk, Lilly, Exelixis, and other manufacturers from attempting to implement these types of unlawful and burdensome policies. We look forward to hearing from you. Please feel free to contact us if you have any questions. Sincerely, Tom Kurtz President & CEO Memorial Healthcare 11 March 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Parklawn Building Room 13N188 Rockville, MD 20857 RE: Concerns About Submission of Claims Data for All 340B Dispenses Dear Administrator Engels: Memorial Healthcare is writing to inform HRSA of the significant financial pressure on our hospital to comply with new drug manufacturer demands for claims data for all 340B dispenses, including from in-house pharmacies, both retail and mixed-use, and our serious concerns with providing the data. We have been notified by Novo Nordisk that we will no longer receive 340B pricing on Novo Nordisk drugs unless we transmit claims data for all 340B dispenses from in-house pharmacies, including both retail and mixed-use, effective April 1, 2026. Prior to this, Exelixis announced a new policy to bar access to 340B pricing for drugs dispensed from 340B hospital-owned pharmacies unless the hospital shares claims data, effective Oct. 1, 2025. And Eli Lilly and Company (Lilly) announced recently that we will no longer receive 340B pricing on any Lilly drugs unless we transmit claims data for all 340B dispenses, including 340B drugs dispensed at in-house pharmacies and medical claims, effective Feb. 1, 2026. These manufacturers policies conflict with the 340B statute and would impose severe administrative and financial burdens on 340B hospitals. We urge you to prevent manufacturers from illegally denying 340B pricing for drugs covered under the 340B statute and dispensed by us directly to our patients. Manufacturers are required under the 340B statute to offer covered entities covered outpatient drugs for purchase at or below the applicable ceiling price. In return, manufacturers have access to the Medicaid and Medicare Part B markets. There are no provisions in the 340B statute permitting conditions to be placed on drugs purchased by the covered entity for it to directly administer or dispense to its patients. Contrary to Novo Nordisks and Lillys description in their policy changes, the data that it is conditioning access to 340B pricing on is not minimal or standard business information and far exceeds data previously requested by 340B ESP. 340B hospitals have never been required to compile and submit medical claims data for any purpose, and doing so would be expensive and burdensome. Diverting health care resources to administrative data collection and claims tracking will further erode our 340B savings, limiting our scarce resources intended for patient care. As noted above, Novo Nordisk is now the third drug manufacturer attempting to impose these illegal conditions, demonstrating a dangerous trend among manufacturers. Exelixis was the first to announce its intent to deny 340B pricing unless hospitals submit claims data from its pharmacies, followed shortly by Eli Lilly and Company (Lilly). We urge HRSA to use all enforcement options provided under the 340B statute to prevent Novo Nordisk, Lilly, Exelixis, and other manufacturers from attempting to implement these types of unlawful and burdensome policies. We look forward to hearing from you. Please feel free to contact us if you have any questions. Sincerely, Tom Kurtz President & CEO Memorial Healthcare
HRSA-2026-0001-0324Marengo Memorial Hospital d/b/a Compass Memorial Healthcare2026-04-03T04:00Z5,023 chars
The proposed rebate program would create undue financial and staffing burdens for our organization, force reductions in essential services, and disproportionately harm rural and underserved patients. We urge HRSA to pause implementation, undertake a thorough rural impact assessment, and adopt exemptions or mitigation measures to protect the safetynet providers and communities that rely on 340B savings To: Docket No. HRSA-2026-03042 Subject: Administrative, Financial, and Service-Delivery Harms of Proposed Rebate Program on Rural Hospitals The proposed HRSA rebate program will impose substantial administrative and financial burdens on our rural hospital and materially threaten services we established and sustain through 340B program savings. Financial and administrative burden One-time implementation costs: Approximately $300,000 for claim-tracking setup, rebate submissions, reconciliation, data-feed configuration, legal and compliance review, and consulting services. Ongoing annual costs: Up to $500,000 for rebate management, additional staffing, vendor fees, audits, and continuous claims reconciliation. Beacon/platform costs: HRSA references using the Beacon platform; many rural hospitals do not have Beacon or equivalent integrations. Onboarding or purchasing comparable services could add up to $160,000 in additional costs. Negative impacts on services supported by 340B savings Expansion and maintenance of services: 340B savings have directly funded new and expanded services for our service area, including (but not limited to) behavioral health and substance-use treatment, mobile clinic outreach, care coordination and case management, transportation assistance, sliding-scale pharmacy discounts, prenatal/OB access, and telehealth expansion. Risk to access and quality: Reducing or eliminating 340B net savings through rebates will force program cuts or elimination, reduced hours, staff layoffs/freeze, and curtailed patient supportsadversely affecting access to care, medication affordability, and preventive services for rural residents. Disproportionate harm: Rural hospitals lack scale to absorb these fixed and recurring costs or to replace lost 340B revenue. The combined effect of increased administrative burden and reduced program funding will widen health disparities in underserved areas. The proposed rebate program will create significant one-time and ongoing costs (estimated $300K one-time; up to $500K annually; plus, up to $160K for necessary platform onboarding) and will undermine essential services we have implemented using 340B savings. We urge HRSA to reconsider adopting this program to prevent disproportionate harm to the communities we serve. To: Docket No. HRSA-2026-03042 Subject: Administrative, Financial, and Service-Delivery Harms of Proposed Rebate Program on Rural Hospitals The proposed HRSA rebate program will impose substantial administrative and financial burdens on our rural hospital and materially threaten services we established and sustain through 340B program savings. Financial and administrative burden One-time implementation costs: Approximately $300,000 for claim-tracking setup, rebate submissions, reconciliation, data-feed configuration, legal and compliance review, and consulting services. Ongoing annual costs: Up to $500,000 for rebate management, additional staffing, vendor fees, audits, and continuous claims reconciliation. Beacon/platform costs: HRSA references using the Beacon platform; many rural hospitals do not have Beacon or equivalent integrations. Onboarding or purchasing comparable services could add up to $160,000 in additional costs. Negative impacts on services supported by 340B savings Expansion and maintenance of services: 340B savings have directly funded new and expanded services for our service area, including (but not limited to) behavioral health and substance-use treatment, mobile clinic outreach, care coordination and case management, transportation assistance, sliding-scale pharmacy discounts, prenatal/OB access, and telehealth expansion. Risk to access and quality: Reducing or eliminating 340B net savings through rebates will force program cuts or elimination, reduced hours, staff layoffs/freeze, and curtailed patient supportsadversely affecting access to care, medication affordability, and preventive services for rural residents. Disproportionate harm: Rural hospitals lack scale to absorb these fixed and recurring costs or to replace lost 340B revenue. The combined effect of increased administrative burden and reduced program funding will widen health disparities in underserved areas. The proposed rebate program will create significant one-time and ongoing costs (estimated $300K one-time; up to $500K annually; plus, up to $160K for necessary platform onboarding) and will undermine essential services we have implemented using 340B savings. We urge HRSA to reconsider adopting this program to prevent disproportionate harm to the communities we serve.
HRSA-2026-0001-0325Elia Armendarez · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0326Ettie Armendariz · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0329Delonia Armstrong · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0331Richard Armstrong · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0340Alicia Arroyo · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0345Esteban Arteaga · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0394Anonymous Anonymous2026-04-03T04:00Z841 chars
I think this proposal raises important concerns about access to affordable medications. The 340B program plays a big role in helping hospitals and clinics serve low-income and underserved communities. If providers are required to pay full price upfront and wait for rebates, this could create financial challenges, especially for smaller or rural facilities that may not have the resources to cover those costs in advance. This change could unintentionally limit these providers' ability to offer affordable medications or maintain the same level of care. Any adjustments to the program should prioritize patient access and ensure that safety-net providers are not placed under additional financial strain. Overall, I believe it is important to carefully consider how this model would impact both providers and the patients who rely on them.
HRSA-2026-0001-0395Barbara Baiz · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0396Edgar Baker · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0397Jeanette Baker · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0398Jeremiah Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0399Jerry Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0400Jim Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0401Philip Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0402Sharon Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0403Tanya Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0404Deborah Benge · United States2026-04-04T04:00Z241 chars
Patients deserve to know when discounts are applied and whether those savings are lowering their financial burden. Strong oversight and reporting will help ensure the program works as intended. Thank you for the opportunity to provide input.
HRSA-2026-0001-0405Maria Beni · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0406Lorrainelorraine Benitez · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0407Kathleen Benjamin · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0408Brooke Benna · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0409Amanda Benneson · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0410Dawn Bennett · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0411Margaret Bennett · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0412Max Bennett · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0413Anne Benson · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0414Mike Benson · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0415Ronald Berry · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0416Ronald Berry · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0417Nicole Bertram · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0418Grant Best · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0419Drake Betty · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0420Carter Beuttel · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0421Carlton Beverly · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0422Hiedi Bex · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0423Beverly Beyer · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0424Hardyal Bhola · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0425Dorothy Biagas · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0426Rossana Biancani · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0427David Bierbrauer · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0428Kimberley Billingslea · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0429Delawarence Billingsley · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0430Kristopher Billingsley · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0431Jeanna Binder · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0432Austin Black · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0433Alicia Black · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0434Adam Black · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0435Richard Biviano · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0436Linda Benedict · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0437Charlene Bence · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0438Rebecca Benavides · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0439Fernando Benavides · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0440Aj Bellise · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0441Leila Bellinger · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0442Tracy Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0443Kelly Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0444Katie Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0445Heidi Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0446Donna Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0447Debra Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0448Dane Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0449Rose Bitondo · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0450Tomi Bisson · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0451Randy Bishop · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0452Jeremy Bishop · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0453Rick Birman · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0454Alex Binkley · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0455Barbara Binion · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0456Crystal Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0457Lisa Beliveau · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0458Jessica Belieu · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0459Sharon Belge · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0460Beverly Belcher · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0461Janet Behringer · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0462Lorri Behagg · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0463Sophie Beg · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0464Rod Beers · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0465Seshi Beerelli · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0466Penny Been · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0467Natalie Beeler · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0468Gary Bednarz · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0469John Bedard · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0470Joshua Beckett Flores · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0471Rebecca Beck · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0472Jeremy Beck · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0473Taina Becerra · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0474Jimmy Beavers · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0475Robert Bingaman · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0476Tinson Baker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0477Elsie Balan · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0478Hannah Balash · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0479Chere Baldwin · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0480Joethel Baldwin · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0481Jess Balestrieri · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0482Laura Ball · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0483Michael Ball · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0484Tierney Balland · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0485Monty Ballard · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0486Crystal Banks · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0487Marina Banks · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0488Larry Banksjr · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0489Claude Bannick · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0490Shean Bannister · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0491Rick Baptiste · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0492Khara Bara · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0493Samuel Baraki · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0494Robert Barbarino · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0495Cindy Barber · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0496Damion Barber · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0497Aisling Barbour · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0498Jeanette Barger · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0499Ray Barger · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0500Ralph Barker · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0501Ray Barnard · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0502Becky Barnes · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0503Robert Barnes · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0504Sharon Barnes · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0505Jerome Barnett · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0506John Barnett · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0507Traci Barnett · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0508Walter Barnett · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0509Elizabeth Barrera · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0510Jazmin Barrera · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0511Jose Barrientos · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0512Maria Barrientos · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0513Nora Barringer · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0514Janet Barrios · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0515Brenda F Barrois · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0516Abdul Barry · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0517Alan Barry · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0518Erin Barry · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0519Louis Bartiromo · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0520Steven Bartle · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0521Lynn Bartley · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0522Michelle Bartley · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0523Cleavon Barton · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0524Marilyn Bas · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0525Kerry Basham · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0526Charlotte Bason · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0527Hayaty Bassal · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0528Howard Bassen · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0529Statney Bates · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0530Rosa Batista · United States2026-04-03T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0531Nathan Batistig · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0532Dona Battle · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0533Pamela Bauer · United States2026-04-03T04:00Z32 chars
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HRSA-2026-0001-0534Jeanine Baxendale · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0535Deborah Baxter · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0536Detrice Beaird · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0537Jody Bean · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0538Jordan Beard · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0539Shelly Beard · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0540Beth Beardmore · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0541Mary Beaty Beaty · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0542Meghan Beaty · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0543Jimmy Beavers · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0544Taina Becerra · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0545Jeremy Beck · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0546Rebecca Beck · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0547Joshua Beckett Flores · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0548John Bedard · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0549Gary Bednarz · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0550Natalie Beeler · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0551Penny Been · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0552Seshi Beerelli · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0553Rod Beers · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0554Sophie Beg · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0555Lorri Behagg · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0556Janet Behringer · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0557Beverly Belcher · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0558Sharon Belge · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0559Jessica Belieu · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0560Lisa Beliveau · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0561Crystal Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0562Dane Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0563Debra Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0564Donna Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0565Heidi Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0566Katie Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0567Kelly Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0568Tracy Bell · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0569Leila Bellinger · United States2026-04-04T04:00Z32 chars
duplicate of HRSA-2026-0001-0404
HRSA-2026-0001-0570Aj Bellise · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0571Fernando Benavides · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0572Rebecca Benavides · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0573Charlene Bence · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0574Linda Benedict · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0575Tomas Benero · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0576Bridget Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0577Garvin Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0578Heidi Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0579Keith Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0580Tarik Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0581Verna Black · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0582Dennis Blackmon · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0583Andy Blair · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0584Shayla Blair · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0585Robyn Blaisdell · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0586Judy Blakely · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0587Leon Blalark · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0588Sherry Bland · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0589Donna Blankenship · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0590Carol Blaydon · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0591Edward Blevins · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0592Kelly Blevins · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0593John Bley · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0594Scott Bleyle · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0595Matt Blon · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0596Katherine Blood · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0597Kathleen Bloomfield · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0598Janet Blue Blue · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0599Keith Boaze · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0600Bob Bobby · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0601Janine Bobeck · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0602Kay Boege · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0603Daniel Bogardus · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0604Tim Bogdansky · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0605Tiffany Boggis · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0606Nick Bohnenkamp · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0607Katherine Boldt · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0608Renald Bolduc · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0609Laura Bolen · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0610Brenda Boler · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0611Deborah Bollig · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0612Allin Bond · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0613Catherine Bond · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0614Meghan Bondy · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0615Wilmer Bonilla · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0616Elizabeth Bonner · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0617Jordan Bonnett · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0618Stephen Bonville · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0619Pat Boomhower · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0620Jill Boone · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0621Wesley Boone · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0622Joy Boos · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0623Lindaj Booth · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0624Andrew Booty · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0625Darren Boozer · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0626Jessica Boozer · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0627Frank Borba · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0628Steve Bornsheuer · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0629Kara Bosworth · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0630Manuel Botelho · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0631Victor Bottenfield · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0632Jeffrey Bouche · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0633Maya Bouchet · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0634Richard Boula · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0635Necia Freeman · United States2026-04-04T04:00Z32 chars
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HRSA-2026-0001-0636Pacific Islands Primary Care Association2026-04-05T04:00Z21,985 chars
See attached file(s) April 6, 2026 Chantelle Bri2on Director Office of Pharmacy Affairs Health Resources and Services AdministraDon 5600 Fishers Lane Rockville, MD 20857 RE: Request for Informa1on: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Submi&ed via regula/ons.gov Dear Director Bri2on: On behalf of the Pacific Island three (3) 340B eligible Community Health Centers (CHCs) and the over 38,000 of paDents they serve, the Pacific Islands Primary Care AssociaDon (PIPCA) appreciates the opportunity to comment on HRSAs Request for InformaDon (RFI) regarding a potenDal 340B rebate pilot. This le2er supplements those submi2ed by our regions CHCs, which provide CHC-specific data in response to quesDons raised in the RFI. Summary of Recommenda/ons: In short, PIPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered enDDes (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negaDve financial impacts on CHCs and their paDents. 1 HRSA requested input on these in the first paragraph of the RFI summary. Regional Office Hermosa Vista Office Park, Suite 1A PO Box 5617 CHRB Saipan, MP 96950 Phone: 670-322-5617 Website: pacificislandspca.org E-mail: info@pacificislandspca.org Pacific Islands Primary Care Association Board of Directors President Dr. Josephine Saimon Pohnpei Community Health Center Pohnpei, Federated States of Micronesia Vice President Dr. Louisa Santos Pacific Basin Dental Association Secretary Cindy Hoepner Kagman Community Health Center Commonwealth of the Northern Mariana Islands Treasurer Shermalin Pineda Guam Community Health Centers Guam Lele Ah Mu American Pacific Nursing Leaders Council Elisapeta Ponausuia American Samoa Community Health Center American Samoa Inouefich Shomour Chuuk Community Health Center Chuuk, Federated States of Micronesia Dr. Dustin Bantol Ebeye Community Health Center Republic of the Marshall Islands Nena Tolenoa Kosrae Community Health Center Kosrae, Federated States of Micronesia Dr. Robert Maddison Pacific Basin Medical Association James Arriola Pacific Behavioral Health Collaborating Council Theresa Arriola Pacific Island Health Officers Association Edolem Ikerdeu Palau Community Health Center Republic of Palau Dennis Rodriguez Todu Guam Foundation Guam John Gilmatam Waab Community Health Center Yap, Federated States of Micronesia Honolulu Office 737 Bishop Street, Suite 2075 Honolulu HI 96813-3211 Phone: 808-537-5855 2 Summary of Comments: In these comments, PIPCA explains: A. The importance of 340B savings to the Pacific Island CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 17,000 low-income and uninsured paDents. B. How a rebate model will create massive cashflow, administraDve, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potenDally stop providing rebate drugs enDrely resulDng in avoidable harm to paDents health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protecDons that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creaDng the harms. A. 340B savings underwrite a wide range of services that CHCs low-income pa/ents rely on. CHCs serve as the backbone of the naDons safety net. NaDonally, in 2024 they served over 32 million paDents, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these paDents with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuDcals regardless of their ability to pay. 340B savings are essenDal to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured paDents. Consistent with federal law3 and regulaDon4, CHCs invest every penny of 340B savings into acDviDes that expand access to care for the underserved populaDons they care for. 340B savings not only reduce the cost of medica1on for many pa1ents, but they are also a cri1cal funding source that underwrites many of the services that CHC pa1ents rely on. For example, in the Pacific Islands, CHCs rouDnely rely on 340B savings to support services such as dental care, mental health services, care coordinaDon and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reducDons in savings will lead directly to reducDons in care for CHC paDents. As a result, the rebate model will undermine not only paDent access to affordable medicaDons, but also the broader system of care that CHCs have built to meet their paDents needs. 2 Source: h=ps://data.hrsa.gov/topics/healthcenters/uds/overview/naBonal 3 SecBon 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 B. A rebate model will create massive cashflow, administra/ve, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs esDmated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 Dmes more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a mulD-step financing process; other steps (e.g., waiDng for drugs to be dispensed, meeDng wholesaler payment deadlines) will sDll force CHCs to borrow substanDal amounts of cash. Also note that CHCs face substanDal difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negaDve margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administra/ve burdens: A rebate model will require CHCs to implement costly IT systems to collect and submit claim-level data, reconcile payments across mulDple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negoDated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incenDvized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a paDent because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resul/ng from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and poten/ally stop providing rebate drugs en/rely resul/ng in avoidable harm to pa/ents health. Reduc/on in services: As required by law and regulaDon, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved paDents. Thus, every Dme 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their paDents currently depend. The impacts will extend far beyond affordable pricing on medicaDons, to all the types of services underwri2en by 340B savings (as described in SecDon A.) 4 Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starDng in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income pa/ents: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low- income paDents. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that conDnue purchasing them under 340B expect to be forced to offer smaller discounts to their paDents, for the same reasons. As a result, CHCs paDents will face higher out-of-pocket costs, parDcularly for high-cost therapies. This will open lead to delays in starDng or conDnuing treatment, and increased non- adherence, causing rates of avoidable complicaDons and hospitalizaDons to rise. CHCs have already experienced significant reduc/ons to 340B savings in recent years leading to reduc/ons in services and opera/ons. Some individuals might argue that CHCs are exaggeraDng how a rebate model will impact their operaDons and paDent access. These claims ignore the financial realiDes that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restricDons have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., liping the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflaDon-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that health centers have laid off staff, reduced service lines, and reduced hours of operaDon. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administraDve burdens, reducDons in services, harm to paDents - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered enDDes. However, if HRSA insists on proceeding with a rebate model, it is criDcal that CHCs be exempted, as: Dispropor'onate nega've impact: o Medicare-nego'ated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negoDaDon are commonly prescribed Part D medicaDons, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), 5 while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negoDaDon. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protec/ons in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protecDons into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to miDgate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough Dme to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no addiDonal administraDve costs of running the rebate model shall be passed onto the covered enDDes. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the A2achment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing 6 the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a paDent because they are expired, damaged, etc. Since the creaDon of the 340B program, CHCs have been able to a2ribute certain undispensed drugs to 340B (with proper documentaDon), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effecDvely transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essenDal to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in mulD-unit packages. 5. Prohibi1on on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to idenDfy drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare InflaDon Rebate Program. Not always available to the covered en1ty. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered enDDes. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effecDvely eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administra1ve rules. There are mulDple administraDve decisions involved in establishing and operaDng a rebate model. HRSA should establish a standardized set of procedures and Dmeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and Dmelines for the same issue. (For example, in December 2025, each manufacturers established different rules and Dmelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplica/on at a /ny frac/on of the cost and administra/ve burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administraDve burdens on CEs. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplicaDon5 - can be achieved quickly, without overturning the 5 Health Resources and Services AdministraBon 340B Program NoBce: ApplicaBon Process for the 340B Rebate Model Pilot Program, August 1, 2025. h=ps://federalregister.gov/d/2025-14619 7 fundamental structure of the program, and at a fracDon of the cost and administraDve burden as the rebate model, through the creaDon of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. SubstanDally reduce administraDve burden on CEs. By reducing costs on CE, avoid the service reducDons that would result from a rebate model. Provide manufacturers with the necessary deduplicaDon data within the same 45-day Dmeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our na1ons primary care safety netand the ability of their 32 million low-income and uninsured pa1ents to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reducDons in the essenDal services these paDents rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, parDcularly the financial effects a rebate model will have on CHCs, and how this will impact paDents who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternaDves -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or paDent access to care. Thank you for your consideraDon and for your conDnued commitment to the naDons safety net. For further informaDon, please contact abuyum@pacificislandspca.org. Sincerely, Arielle Buyum ExecuDve Director Pacific Islands Primary Care AssociaDon 8 A"achment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submisng rebate requests. Monitoring which requests were paid. DispuDng denials. Explaining to paDents why their drugs discounted price has changed. For all drugs subject to Medicaid Actual AcquisiDon Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automaDcally entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new repor1ng requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (esDmated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: EvaluaDng cash flow needs and seeking credit opDons. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenDng the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-0637Randall Bourgeois · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0638Jeanette Fristad · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0639Joann Bourque · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0640Steven Bouton · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0641Diane Bouts · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0642Emily Bowdish · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0643Gloria Bowers · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0644Gloria Bowers · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0645Jessica Bowers · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0646Rhonda Bowers · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0647Robert Kraft · Salina, KS, United States2026-04-06T04:00Z2,187 chars
See attached file(s) April 6, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Director Britton: Thank you for allowing comments on HRSAs Request for Information (RFI) on the use of a 340B Program rebate model. My name is Dr. Robert Kraft, and I serve as the Chief Executive Officer of Salina Family Healthcare Center (SFHC). My Chief Pharmacy Officer, Derek Pihl, responded to the RFI on behalf of SFHC, so I am extending my comments as an individual respondent. First, I appreciate that manufacturers have concerns about duplicate discounts and data accuracy. I appreciate that a solution to these concerns can be reasonably sought. I appreciate that a rebate model sounds reasonable. Unfortunately, the realities of a rebate model make it completely untenable as the solution that manufacturers are seeking. A rebate model will cause more valid claims to be denied than duplicate discounts prevented. A rebate model will shift the carrying costs of the drug supply from large manufacturers to safety net providers like SFHC. A rebate model will make it nearly, if not totally, impossible to provide discounts to the uninsured at the point of sale. I know a lot of federally qualified health centers will provide specific data to demonstrate these impacts, but I want to strip all the data down to the bare reality. The most vulnerable in our society will be hurt by a rebate model in the 340B program. The richest in the pharmaceutical production, distribution, and sales system will be made richer. The solution to the duplicate discount concern is a neutral national claims clearinghouse that correctly balances manufacturer concerns and the needs of Americas most vulnerable. Please consider piloting this more right-sized approach before providing the manufacturers with all the power to dictate the terms of the congressionally mandated 340B Program. Sincerely, Robert Kraft, MD Chief Executive Officer, Salina Family Healthcare Center
HRSA-2026-0001-0648Kimberly Bowker · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0649Earnest Bowles · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0650Francyne Bowlsby · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0651Earnest Bowles · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0652Francyne Bowlsby · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0653Samaritan2026-04-06T04:00Z55,100 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 that far outweighs any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. o Estimated cost of $50,000 one-time set up costs & $100,000 annual cost. Identify and quantify any key cost drivers (e.g., increased staffing, diverting current staff, IT systems, third-party vendors, compliance activities, labor hours, process for challenging denials). Be specific where possible (e.g., how much are your TPAs charging to set up the data feeds necessary to comply, did the TPAs quote additional costs for the rebate pilot, did other vendors quote costs) o Increased staffing/consultant fees along with $1,000 per month TPA fees. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. o Budgeting Financial planning for the amount of WAC expenditure needed for upfront purchase of each included NDC on an annual basis. o Data submission validation of billed claims accepted by the payer and application of the appropriate modifier to each claim, ensuring only the required information is submitted for each manufacturers individual policy and State in which the CE is located o Reconciliation Routine monitoring of claims submissions, daily tracking of rebate status per claim and rebate amount received vs. rebate amount expected, dispute initiation, discussions, and resolution with the manufacturer(s) o Audit Support Cost incurred through additional required staffing and/or consulting services to support the additional workload o Challenging Denials research and review of denied rebate payments, communications and resolution with the manufacturer(s) and if no resolution, time included for entering into and working through the ADR Process. Identify any additional costs to your organization associated with implementation of a potential 340B Rebate Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring.) o It will either require us to hire an additional FTE or contract with a company to provide those support hours. It would require 1 FT employee to reconcile payments against cost, upload data to Beacon and work denials, etc. It will take 6 to 12 months to advertise and find a qualified employee to hire. o Additional assistance from 340B Consulting Company & Third Pary Administrator - estimate $50,000. If notable, compare those administrative costs to your marginal savings from 340B (either total or for those 25 potential drugs) to show how much this will eat into the benefits of the 340B Program. o All 25 Drugs - 340B cost is $279,513 versus AWP cost of $1,390,209 - savings of $1,110,696. o All Drugs - 340B cost is $4,374,939 versus AWP cost of $9,798,575 - savings of $5,423,636. Staffing Impacts Under a Potential 340B Rebate Program. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 does not currently have the staff needed to comply with a Rebate Program. It will either require us to hire an additional FTE or contract with a company to provide those support hours. It would require 1 FT employee to reconcile payments against cost, upload data to Beacon and work denials, etc. It will take 6 to 12 months to advertise and find a qualified employee to hire. Explain why HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. o Appropriate monitoring and tracking of rebates relative to the Maximum Fair Price (MFP) because of the Inflation Reduction Act (IRA) have already proven that Covered Entities must expend a significant amount of time troubleshooting issues, reviewing claims, and identifying 340B-purchased drugs in the Beacon portal. Additionally, the recent policy pivots of Eli Lilly, Novo Nordisk, and Exelixis to require medical claims data has resulted in significant issues related to submission in 340B ESP including the following: Tracking The requirement for CEs to track individual policies by each individual manufacturer including the following information is completely unmanageable: 340B claims required Medical Claims, Entity-owned pharmacy(ies), Contract Pharmacy(ies) all, one, or some combination of the 3? Whether having an entity-owned pharmacy negates eligibility for contract pharmacy designation. Number of contract pharmacies that are included one, two, all? Number of days between claim submission and date of dispense 45, 60, etc.? Active State Laws versus manufacturer compliance - WHETHER MANUFACTURERS ARE CHOOSING TO FOLLOW THEM AND IF SO, TO WHAT EXTENT. (Manufacturers will not allow 340B ESP to release this data in writing. It must be discussed via a call with 340B ESP for clarity.) Timing Medical claims, by nature, are not billed in the same manner as Retail Pharmacy Claims. Medical claims can be billed out weeks after the drug was dispensed to the patient in the setting of physician-administered drugs. This proves to be a monumental issue for CEs attempting to recoup a rebate on a claim that was billed weeks after dispensing as CEs will need to wait until a claim has been billed to provide accurate billing information to the manufacturers expecting this data within 45 or even 60 days of dispense. Confusion around medical claims submissions At what point should the CE submit claims data time of dispense, time of billing, or after the final bill has been paid? Reporting Due to the nature of medical billing and billing software living outside of the EMR for some CEs, some difficulty may exist in obtaining routine billing information for import into the CEs chosen TPA. Insurance-rejected claims A patients insurance may change during the billing process, or the insurance company may reject the claim. When this occurs, what is the remedy for claims with inaccurate billing information? Identification of claims with disallowed information If both a HCPCS code and a billing unit of measure is submitted, 340B ESP has stated that the claim submission will fail. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our TPA would charge a one-time report build cost of $2,500 along with an additional $500 per month report fee ($6,000 annual fee). Highlight particularly why its difficult to provide medical claims data and how that would likely involve manual work to provide that data to your TPA since they do not have a data feed directly into your EHR. o Medical Claims billing follows a much different process and timeline than billing for outpatient retail pharmacy claims. Feeds/Files Current Medical Claims data submitted from the Samaritans EMR to the TPA does not include information on billed claims (e.g. claim number, claim line, etc.), but rather on dispenses and/or administrations which occur long before the claim is billed. This issue will cause additional time in development of reports with the requested data and/or manual updates prior to submission. Timing Medical bills submitted days to weeks after a drug has been administered to the patient making the 45-day requirement for most claims submissions untenable. Process Patient insurance can change causing delays in billing. Some patients have self-pay, Medicaid or other insurance pending which depends on the insurer for timing of coverage. Claims can be rejected requiring correction or billing to other insurance plans. All of these changes and required tracking make it exceedingly difficult to ensure medical claims submissions occur within the allowed window. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. o Describe how your organization currently collects, maintains, retains, and validates or audits data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. o Samaritan collects and audits data utilizing the following EMR and TPA software platforms for Medical and Contract Pharmacy Claims. o A monthly report of claims from the entire previous month is run from Third Pary Administrator software and a sampling of claims is selected from each 340B area (mixed-use, clinics and contract pharmacy(ies). o These samples are then reviewed by Drug Pricing Program Coordinator, for all the eligibility elements required for qualification of a 340B claim including but not limited to the following: Patient status (if physician-administered) 11-digit NDC match between EMR and TPA (if physician- administered) Ordering provider Written location Encounter location Insurance coverage (and appropriate NPI and billing modifiers, as applicable) Supporting encounter documentation (e.g., office visit note, etc.) from an eligible location of the covered entity Referral documentation (if applicable) Original office visit with patient at an eligible location of the covered entity (if a referral prescription) Encounter notes from visit at the location to which the patient was referred (if a referral prescription) Evidence of communication between referring provider and provider to whom the patient was referred (if a referral prescription) Copy of original order (if referral from outside provider into Samaritan) Documentation of Samaritans care of the patient e.g., vital signs, procedure note, etc. if referral from outside provider into Samaritan) o Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. o The 340B Rebate Model Pilot Program would significantly change current data collection activities due to the requirement for medical billing claims. As previously described, medical billing differs significantly from contract pharmacy billing in both timing and process. Since the billing data is required as opposed to dispense/administration data, this requires information from Samaritans billing software which would require a one-time new report build and ongoing maintenance and attention to ensure that all required claims that have been billed reach the manufacturer. It would also require additional manual daily monitoring to ensure the following: 1) all requirements for each claims submission are met PER MANUFACTURER 2) all rebates are received by Samaritan within the required timeframe 3) the appropriate basis of rebate calculation (WAC, GPO, or 340B) was utilized by the manufacturer on each claim 4) rebate is disputed if incorrect and work with manufacturer to address and close the issue o Describe whether you will need to pull information from different internal hospital systems to comply with the data demands, whether you will need to manually do any work, etc. o Manual work is described in response above. o HRSA has said in its Information Collection Request: OPA expects that data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant. Is this true? Will it be this easy? Why not? o Manufacturers do not have enough insight into claims billing in general to make this statement which is without merit. Please see above for described differences in processes and timing between medical billing and outpatient retail pharmacy billing. o Additionally, if fields for BIN, PCN, and Group Number become required, there are some pharmacies (most notably, Walgreens) that do not provide BIN, PCN, and Group Number information to the CEs. Instead, all insurance is divided into the categories of either Medicare, Commercial (into which Medicaid MCO claims are lumped), or Uninsured. Medicaid FFS is assumed to be carved out, but CEs have no way of validating this. o IF YOU DO NOT BELIEVE THAT A REBATE PROGRAM WOULD CHANGE DATA COLLECTION FOR YOUR HOSPITAL, YOU CAN REMOVE THIS SECTION. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We have to pay Cencora within 7 days of receiving the invoice/product for the 25 drugs for one year the days cash on hand effect is 0.55 at the 340B price but if we have to pay the AWP price it would cost us 2.78 days cash on hand. For all the drugs at the 340B price for one year it is 8.75 days cash on hand versus AWP price is 19.60 days cash on hand. That is a substantial difference that effects the hospital along with the declining reimbursement from the insurance companies paired with the increasing costs. Due to the new hospital, increased costs and decreased reimbursement we are currently watching our cash flow. It would be an additional strain on our organization to have to implement the rebate model. It could cause us to violate our bond covenants if things do not turn around. Our financial covenants are our days cash on hand and our debt service coverage ratios. o Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Currently we have to pay within 7 days but would ask or try to negotiate a longer term if the rebate model was implemented. Not sure if Cencora would allow that so we would be stuck expending cash 3 plus days before seeing the rebate funds. If we paid late Cencora would charge us a finance charge. o In the past, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. Is this true? If not, explain why. This is false based on the timing and process of medical claims submission. If the process takes days to weeks for medical claims billing to occur, the replenished drug will in many cases be needed for use by the CE prior to initiation of the claim billing process. Most wholesalers have a Net 30 term requiring the bill to be paid within 30 calendar days of invoice receipt. If the medical claim is not billed weeks later than the date of service or if the medical claim is rejected for any reason requiring an even longer timeline, the CE will not receive the rebate before the purchase invoice from a wholesaler for the WAC amount is due. Therefore, CEs will have to float money to spend on paying higher prices before the rebates occur. This does not account for manufacturer rejections of rebates or instances in which rebate disputes may occur. o A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Is 10 days short enough? Yes, it would affect our cash and our profitability. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We use the 340B savings to help cover our charity care costs. If we did not have the 340B savings it would be continually harder and harder to keep the doors open. o DESCRIBE AS BEST AS POSSIBLE THE IMPACT ON YOUR PATIENTS AND COMMUNITY TO SHOW WHY A REBATE MODEL IS SO HARMFUL. The following is our payer mix - 33.4% Medicare, 27.9% Medicaid, 2.6% Self- Pay and only 36.2% commercial. Samaritan is the largest hospital in Grant County. There are other critical access hospitals in Grant County but they do not provide the services Samaritan does. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. We budget based on historical costs so if the costs increase, we would be over budget. We also budget for Debt service coverage and days cash on hand ratios so if the costs increase substantially, it will affect those ratios negatively which would affect our organizations long term plans. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Describe any programs you had with Beacon. o Describe problems with Beacons Terms and Conditions. 1) The Terms and Conditions are required (non-negotiable) for all Covered Entities for a sole platform that demands patient claims data from CEs, which have long protected patient data, in exchange for financial reimbursement. 2) The statement above, taken directly from the MFP terms and conditions basically indicates that the dispensing entity is granting Second Sight complete WORLDWIDE, IRREVOCABLE access to collect, DISCLOSE, and CREATE DERIVATIVE WORKS OF patient claims data. This statement seems contrary to HIPAA requirements. Manufacturers do not in any way need and should not receive unmitigated access to patient information for their own financial gain and/or business interests. 3) Please see verbiage above relative to CE rights. Second Sights statement includes the exact opposite rights for CEs and only grants REVOCABLE, limited right and license to access and use the MFP platform. 4) There is no reason to provide commercial payers ANY access to or derivative of any piece of data submitted to Second Sight for purposes of the 340B program. If allowed, this data will be utilized expressly for manufacturer business interests (e.g., rebate negotiations with commercial payers outside of the 340B program). 5) Beacon will be handling patient medical claims for CEs nationwide and yet will have practically no liability (up to $1,000) for damages EVEN IF SECOND SIGHT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. This is unacceptable. o Describe problems with Beacons shifting data and other requirements. Shifting data requirements among the different manufacturers is incredibly cumbersome to manage. Some manufacturers require certain pieces of data while others do not. These shifting requirements make submission of only the required data elements difficult for CEs to navigate and track among other responsibilities. o Describe problems with Beacons customer service when problems arose. PHI is a concern with the rebate model. We do not have confidence in the systems in place to make sure PHI and data integrity are kept at a high standard. There have been many security breaches in the last few years which are detrimental to an organization. The rebate model just increases the likely hood of a successful attack. Also, our patients prefer to have their data kept confidential and not sent to manufacturers. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Teresa Gall Senior Accountant and 340B Manager Samaritan, 2000 S. Clover Dr., Moses Lake, WA 98837 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 that far outweighs any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. Estimated cost of $50,000 one-time set up costs & $100,000 annual cost. Identify and quantify any key cost drivers (e.g., increased staffing, diverting current staff, IT systems, third-party vendors, compliance activities, labor hours, process for challenging denials). Be specific where possible (e.g., how much are your TPAs charging to set up the data feeds necessary to comply, did the TPAs quote additional costs for the rebate pilot, did other vendors quote costs) Increased staffing/consultant fees along with $1,000 per month TPA fees. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. Budgeting Financial planning for the amount of WAC expenditure needed for upfront purchase of each included NDC on an annual basis. Data submission validation of billed claims accepted by the payer and application of the appropriate modifier to each claim, ensuring only the required information is submitted for each manufacturers individual policy and State in which the CE is located Reconciliation Routine monitoring of claims submissions, daily tracking of rebate status per claim and rebate amount received vs. rebate amount expected, dispute initiation, discussions, and resolution with the manufacturer(s) Audit Support Cost incurred through additional required staffing and/or consulting services to support the additional workload Challenging Denials research and review of denied rebate payments, communications and resolution with the manufacturer(s) and if no resolution, time included for entering into and working through the ADR Process. Identify any additional costs to your organization associated with implementation of a potential 340B Rebate Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring.) It will either require us to hire an additional FTE or contract with a company to provide those support hours. It would require 1 FT employee to reconcile payments against cost, upload data to Beacon and work denials, etc. It will take 6 to 12 months to advertise and find a qualified employee to hire. Additional assistance from 340B Consulting Company & Third Pary Administrator - estimate $50,000. If notable, compare those administrative costs to your marginal savings from 340B (either total or for those 25 potential drugs) to show how much this will eat into the benefits of the 340B Program. All 25 Drugs - 340B cost is $279,513 versus AWP cost of $1,390,209 - savings of $1,110,696. All Drugs - 340B cost is $4,374,939 versus AWP cost of $9,798,575 - savings of $5,423,636. Staffing Impacts Under a Potential 340B Rebate Program. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 does not currently have the staff needed to comply with a Rebate Program. It will either require us to hire an additional FTE or contract with a company to provide those support hours. It would require 1 FT employee to reconcile payments against cost, upload data to Beacon and work denials, etc. It will take 6 to 12 months to advertise and find a qualified employee to hire. Explain why HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Appropriate monitoring and tracking of rebates relative to the Maximum Fair Price (MFP) because of the Inflation Reduction Act (IRA) have already proven that Covered Entities must expend a significant amount of time troubleshooting issues, reviewing claims, and identifying 340B-purchased drugs in the Beacon portal. Additionally, the recent policy pivots of Eli Lilly, Novo Nordisk, and Exelixis to require medical claims data has resulted in significant issues related to submission in 340B ESP including the following: Tracking The requirement for CEs to track individual policies by each individual manufacturer including the following information is completely unmanageable: 340B claims required Medical Claims, Entity-owned pharmacy(ies), Contract Pharmacy(ies) all, one, or some combination of the 3? Whether having an entity-owned pharmacy negates eligibility for contract pharmacy designation. Number of contract pharmacies that are included one, two, all? Number of days between claim submission and date of dispense 45, 60, etc.? Active State Laws versus manufacturer compliance - WHETHER MANUFACTURERS ARE CHOOSING TO FOLLOW THEM AND IF SO, TO WHAT EXTENT. (Manufacturers will not allow 340B ESP to release this data in writing. It must be discussed via a call with 340B ESP for clarity.) Timing Medical claims, by nature, are not billed in the same manner as Retail Pharmacy Claims. Medical claims can be billed out weeks after the drug was dispensed to the patient in the setting of physician-administered drugs. This proves to be a monumental issue for CEs attempting to recoup a rebate on a claim that was billed weeks after dispensing as CEs will need to wait until a claim has been billed to provide accurate billing information to the manufacturers expecting this data within 45 or even 60 days of dispense. Confusion around medical claims submissions At what point should the CE submit claims data time of dispense, time of billing, or after the final bill has been paid? Reporting Due to the nature of medical billing and billing software living outside of the EMR for some CEs, some difficulty may exist in obtaining routine billing information for import into the CEs chosen TPA. Insurance-rejected claims A patients insurance may change during the billing process, or the insurance company may reject the claim. When this occurs, what is the remedy for claims with inaccurate billing information? Identification of claims with disallowed information If both a HCPCS code and a billing unit of measure is submitted, 340B ESP has stated that the claim submission will fail. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our TPA would charge a one-time report build cost of $2,500 along with an additional $500 per month report fee ($6,000 annual fee). Highlight particularly why its difficult to provide medical claims data and how that would likely involve manual work to provide that data to your TPA since they do not have a data feed directly into your EHR. Medical Claims billing follows a much different process and timeline than billing for outpatient retail pharmacy claims. Feeds/Files Current Medical Claims data submitted from the Samaritans EMR to the TPA does not include information on billed claims (e.g. claim number, claim line, etc.), but rather on dispenses and/or administrations which occur long before the claim is billed. This issue will cause additional time in development of reports with the requested data and/or manual updates prior to submission. Timing Medical bills submitted days to weeks after a drug has been administered to the patient making the 45-day requirement for most claims submissions untenable. Process Patient insurance can change causing delays in billing. Some patients have self-pay, Medicaid or other insurance pending which depends on the insurer for timing of coverage. Claims can be rejected requiring correction or billing to other insurance plans. All of these changes and required tracking make it exceedingly difficult to ensure medical claims submissions occur within the allowed window. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Describe how your organization currently collects, maintains, retains, and validates or audits data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Samaritan collects and audits data utilizing the following EMR and TPA software platforms for Medical and Contract Pharmacy Claims. A monthly report of claims from the entire previous month is run from Third Pary Administrator software and a sampling of claims is selected from each 340B area (mixed-use, clinics and contract pharmacy(ies). These samples are then reviewed by Drug Pricing Program Coordinator, for all the eligibility elements required for qualification of a 340B claim including but not limited to the following: Patient status (if physician-administered) 11-digit NDC match between EMR and TPA (if physician-administered) Ordering provider Written location Encounter location Insurance coverage (and appropriate NPI and billing modifiers, as applicable) Supporting encounter documentation (e.g., office visit note, etc.) from an eligible location of the covered entity Referral documentation (if applicable) Original office visit with patient at an eligible location of the covered entity (if a referral prescription) Encounter notes from visit at the location to which the patient was referred (if a referral prescription) Evidence of communication between referring provider and provider to whom the patient was referred (if a referral prescription) Copy of original order (if referral from outside provider into Samaritan) Documentation of Samaritans care of the patient e.g., vital signs, procedure note, etc. if referral from outside provider into Samaritan) Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. The 340B Rebate Model Pilot Program would significantly change current data collection activities due to the requirement for medical billing claims. As previously described, medical billing differs significantly from contract pharmacy billing in both timing and process. Since the billing data is required as opposed to dispense/administration data, this requires information from Samaritans billing software which would require a one-time new report build and ongoing maintenance and attention to ensure that all required claims that have been billed reach the manufacturer. It would also require additional manual daily monitoring to ensure the following: all requirements for each claims submission are met PER MANUFACTURER all rebates are received by Samaritan within the required timeframe the appropriate basis of rebate calculation (WAC, GPO, or 340B) was utilized by the manufacturer on each claim rebate is disputed if incorrect and work with manufacturer to address and close the issue Describe whether you will need to pull information from different internal hospital systems to comply with the data demands, whether you will need to manually do any work, etc. Manual work is described in response above. HRSA has said in its Information Collection Request: OPA expects that data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant. Is this true? Will it be this easy? Why not? Manufacturers do not have enough insight into claims billing in general to make this statement which is without merit. Please see above for described differences in processes and timing between medical billing and outpatient retail pharmacy billing. Additionally, if fields for BIN, PCN, and Group Number become required, there are some pharmacies (most notably, Walgreens) that do not provide BIN, PCN, and Group Number information to the CEs. Instead, all insurance is divided into the categories of either Medicare, Commercial (into which Medicaid MCO claims are lumped), or Uninsured. Medicaid FFS is assumed to be carved out, but CEs have no way of validating this. IF YOU DO NOT BELIEVE THAT A REBATE PROGRAM WOULD CHANGE DATA COLLECTION FOR YOUR HOSPITAL, YOU CAN REMOVE THIS SECTION. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We have to pay Cencora within 7 days of receiving the invoice/product for the 25 drugs for one year the days cash on hand effect is 0.55 at the 340B price but if we have to pay the AWP price it would cost us 2.78 days cash on hand. For all the drugs at the 340B price for one year it is 8.75 days cash on hand versus AWP price is 19.60 days cash on hand. That is a substantial difference that effects the hospital along with the declining reimbursement from the insurance companies paired with the increasing costs. Due to the new hospital, increased costs and decreased reimbursement we are currently watching our cash flow. It would be an additional strain on our organization to have to implement the rebate model. It could cause us to violate our bond covenants if things do not turn around. Our financial covenants are our days cash on hand and our debt service coverage ratios. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Currently we have to pay within 7 days but would ask or try to negotiate a longer term if the rebate model was implemented. Not sure if Cencora would allow that so we would be stuck expending cash 3 plus days before seeing the rebate funds. If we paid late Cencora would charge us a finance charge. In the past, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. Is this true? If not, explain why. This is false based on the timing and process of medical claims submission. If the process takes days to weeks for medical claims billing to occur, the replenished drug will in many cases be needed for use by the CE prior to initiation of the claim billing process. Most wholesalers have a Net 30 term requiring the bill to be paid within 30 calendar days of invoice receipt. If the medical claim is not billed weeks later than the date of service or if the medical claim is rejected for any reason requiring an even longer timeline, the CE will not receive the rebate before the purchase invoice from a wholesaler for the WAC amount is due. Therefore, CEs will have to float money to spend on paying higher prices before the rebates occur. This does not account for manufacturer rejections of rebates or instances in which rebate disputes may occur. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Is 10 days short enough? Yes, it would affect our cash and our profitability. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We use the 340B savings to help cover our charity care costs. If we did not have the 340B savings it would be continually harder and harder to keep the doors open. DESCRIBE AS BEST AS POSSIBLE THE IMPACT ON YOUR PATIENTS AND COMMUNITY TO SHOW WHY A REBATE MODEL IS SO HARMFUL. The following is our payer mix - 33.4% Medicare, 27.9% Medicaid, 2.6% Self-Pay and only 36.2% commercial. Samaritan is the largest hospital in Grant County. There are other critical access hospitals in Grant County but they do not provide the services Samaritan does. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. We budget based on historical costs so if the costs increase, we would be over budget. We also budget for Debt service coverage and days cash on hand ratios so if the costs increase substantially, it will affect those ratios negatively which would affect our organizations long term plans. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Describe any programs you had with Beacon. Describe problems with Beacons Terms and Conditions. The Terms and Conditions are required (non-negotiable) for all Covered Entities for a sole platform that demands patient claims data from CEs, which have long protected patient data, in exchange for financial reimbursement. The statement above, taken directly from the MFP terms and conditions basically indicates that the dispensing entity is granting Second Sight complete WORLDWIDE, IRREVOCABLE access to collect, DISCLOSE, and CREATE DERIVATIVE WORKS OF patient claims data. This statement seems contrary to HIPAA requirements. Manufacturers do not in any way need and should not receive unmitigated access to patient information for their own financial gain and/or business interests. Please see verbiage above relative to CE rights. Second Sights statement includes the exact opposite rights for CEs and only grants REVOCABLE, limited right and license to access and use the MFP platform. There is no reason to provide commercial payers ANY access to or derivative of any piece of data submitted to Second Sight for purposes of the 340B program. If allowed, this data will be utilized expressly for manufacturer business interests (e.g., rebate negotiations with commercial payers outside of the 340B program). Beacon will be handling patient medical claims for CEs nationwide and yet will have practically no liability (up to $1,000) for damages EVEN IF SECOND SIGHT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. This is unacceptable. Describe problems with Beacons shifting data and other requirements. Shifting data requirements among the different manufacturers is incredibly cumbersome to manage. Some manufacturers require certain pieces of data while others do not. These shifting requirements make submission of only the required data elements difficult for CEs to navigate and track among other responsibilities. Describe problems with Beacons customer service when problems arose. PHI is a concern with the rebate model. We do not have confidence in the systems in place to make sure PHI and data integrity are kept at a high standard. There have been many security breaches in the last few years which are detrimental to an organization. The rebate model just increases the likely hood of a successful attack. Also, our patients prefer to have their data kept confidential and not sent to manufacturers. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Samaritan, 2000 S. Clover Dr, Moses Lake, WA 98837 and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Teresa Gall Senior Accountant and 340B Manager Samaritan, 2000 S. Clover Dr., Moses Lake, WA 98837
HRSA-2026-0001-0654Earnest Bowles · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0655Francyne Bowlsby · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0656Laurie Bowman · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0657Marilyn Bowman · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0658Nancy Bowman · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0659Shekoti Boyce · United States2026-04-06T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0660Salina Health Education Foundation dba Salina Family Healthcare Center2026-04-06T04:00Z17,326 chars
Salina Family Healthcare Center (SFHC) refers you to the document attached for our comments regarding HRSAs Request for Information on a potential 340B rebate model. Based on centerspecific financial analysis and operational experience, our comments describe how a rebatebased approach would destabilize health center finances, increase administrative and compliance risk, and reduce patient accessparticularly for safetynet providers. We respectfully urge HRSA to exempt Community Health Centers from any rebatebased 340B pilot and to preserve upfront 340B pricing. April 6, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Director Britton: On behalf of Salina Health Education Foundation dba Salina Family Healthcare Center (SFHC), thank you for the opportunity to provide comments on HRSAs Request for Information (RFI) regarding the potential use of rebates to effectuate the 340B ceiling price. We also appreciate HRSA extending the RFI comment deadline to April 20, 2026, allowing stakeholders additional time to submit meaningful input on operational, financial, and access impacts. SFHC is a Community Health Center (CHC)more specifically, a Federally Qualified Health Center (FQHC)that serves Saline County and four surrounding rural counties in Kansas. In 2025, we cared for 12,205 patients55.1% living at or below 200% of the Federal Poverty Level, 17.9% uninsured, and 29.4% enrolled in Medicaid. As a CHC, we are required to use 340B to keep medications affordable at the time of care and reinvest savings to sustain access to services. In 2025 alone, SFHC saved patients approximately $8.5 million compared to cash prices through 340B discounts and related programs. We also provided our patients with several 340B-supported services that are either poorly funded or have no other funding source. These services include behavioral health, care coordination, community outreach mobile medical services, free medication delivery, and enhanced clinical pharmacy care services, which consist of medication reconciliation, medication therapy management, medication synchronization, and chronic condition management. After analyzing our data to answer HRSAs questions, SFHC strongly urges HRSA to exempt CHCs from any rebate pilot. HRSAs RFI asks how a rebate model would affect covered entities costs, cash flow, rebate denials, data collection, and patient access. For CHCs, the answer is consistent across these categories: a rebate model shifts financial and administrative risk onto safety-net providers and will predictably reduce patient access to 340B-supported services and affordable medications. SFHC acknowledges that our comments do not address every question HRSA posed in its RFI. CHCs vary significantly in size, structure, pharmacy operations, and financial capacity, and individual centers are best positioned to respond in detail to the questions most relevant to their operational realities. For more comprehensive and nationallevel analysis, HRSA should also consider the comments submitted by the National Association of Community Health Centers (NACHC), which reflect aggregated feedback from health centers across the country. Other health centers may address questions that SFHC does not, and SFHC may address issues that are less prominent in other submissions. Taken together, we hope the collective input from the health center community provides HRSA with a complete and accurate picture of the operational, financial, and patientcare risks posed by a rebate model, and why such a model would be particularly harmful to CHCs and the patients we serve. Financial and Cash Flow Impacts on Covered Entities (RFI Topics: Costs to Covered Entities and Payment Timing and Cash FlowSections 1(a)(iiii), 1(b)(i iii), and 2(a), 2(b)(i), 2(c)) To provide context for the scale of SFHCs current 340B operations, during calendar year 2025 we processed approximately 73,468 total 340B transactions: 67,191 through our entity-owned pharmacy and 6,277 through contract pharmacy arrangements. These transactions are supported by existing compliance infrastructure, pharmacy systems, and third-party vendors designed around upfront 340B pricing reflected directly in wholesaler catalogs and pharmacy dispensing software. Under SFHCs current wholesaler arrangements, 340B-eligible drugs are purchased upfront at the 340B ceiling price, and payment is made under Net 7 terms. This structure provides pricing certainty at the time of purchase and dispensing, allows SFHC to accurately apply patient discounts and comply with Medicaid billing requirements, and enables us to take advantage of sub-ceiling pricing and prompt-pay discounts that reduce actual acquisition cost below the statutory ceiling price. A rebate model that forces SFHC to purchase drugs at full Wholesale Acquisition Cost (WAC) would substantially and immediately increase upfront drug acquisition costs, fundamentally altering how we finance patient care. Based on internal analysis using our actual purchasing data and prescription volume, SFHC estimates that the proposed rebate pilot program would increase our annual upfront drug spendfor just the first 10 drugs subject to the pilotby approximately $1.6 million in the first year, rising from about $175,000 to $1,783,000. This represents a 919% increase, driven solely by the shift from upfront 340B pricing to delayed and uncertain manufacturer rebates. Importantly, a rebate model erodes not only the timing of cash flow but also the total value of 340B savings. By eliminating upfront 340B pricing and replacing it with retrospective rebates, the model removes access to sub-ceiling pricing and prompt-pay discounts that are built into current wholesaler arrangements. This results in a permanent loss of value even when rebates are ultimately paid, making the rebate model structurally more expensive and not financially neutral for covered entities over time. Even with conservative assumptions, SFHCs analysis for just the first 10 drugs in the rebate pilot shows that the average increase in inventory held while awaiting rebate reimbursement would exceed $130,000 within a 30-day cycle, and nearly $470,000 when modeled over a 45-day cyclea realistic timeframe given existing rebate submission and payment practices. This materially reduces working capital that would otherwise support staffing, care coordination, pharmacy operations, and uncompensated patient services. For a CHC operating on thin margins, these cash flow impacts are destabilizing and unsustainable. Rebate Uncertainty, Administrative Burden, and Denial Risk (RFI Topics: Administrative Costs, Staffing Impacts, and Rebate DenialsSections 1(b)(i), 1(b)(iii), 1(c)(iii), and 3) SFHCs analysis assumes 10% of prescriptions will not result in a rebate payment due to various reasons. These reasons include drugs that are broken or shorted in manufacturer bottles, drugs purchased at the WAC price that expire before use, and manufacturer rebate denials or non-payment rate that are consistent with current manufacturer auditing, reconciliation, and dispute practices. Even at this conservative level, annual opportunity losses due to the rebate pilot for just the first 10 drugs exceed $165,000. These losses represent dollars already paid to wholesalers and discounts already extended to patients, with no practical mechanism for recovery once a rebate is denied or delayed. Critically, these losses occur after full WAC pricing has already been paid, exposing covered entities to one-sided financial risk without any corresponding increase in patient services, efficiency, or program integrity. Beyond the direct financial loss, the rebate pilot would introduce extensive administrative burden: claim identification, submission, tracking, reconciliation, dispute management, and audit responseoften across manufacturer specific platforms and standards. SFHC previously created a 340B Analyst position partly due to administrative work associated with manufacturers restricting the use of their drugs at contract pharmacies. In 2025, SFHC had 1,124 prescriptions excluded from its 340B program, equating to nearly $419,500 in lost 340B savings. The portion of our 340B Analysts 2025 hours spent on administrative workclaim submissions and oversight for contract pharmacy prescriptions not excluded from our 340B programaccounted for roughly $39,000. SFHC estimates it would need to add at least one additional full FTE at an estimated annual expense of $77,000 to manage the additional administrative burdens of the rebate pilot. The administrative activities are additive, not substitutive. For SFHC, each additional FTE required to manage 340B administration diverts funding that would otherwise support patient services, discounts, and patient facing roles such as pharmacy technicians, care coordinators, or community health workers. The administrative complexity of a rebate model therefore translates directly into reduced capacity to deliver care. Medicaid Billing, Patient Discount Compliance, and Federal Access Requirements (RFI Topics: Patient Access, Payment Timing, Program Integrity, and Changes to Data Collection Sections 1(e)(iii), 2(a), 4(c), and 6(a)) A rebate model also creates significant compliance challenges for CHCs that extend beyond cash flow and administrative burdens. For CHCs, the loss of access to the 340B ceiling price at the point-of-sale specifically the removal of the 340B price from wholesaler catalogs and pharmacy dispensing software undermines our ability to comply with multiple federal requirements. First, FQHCs are legally required to provide discounted medications to eligible patients at or below 200% of the Federal Poverty Level at the time care is delivered. SFHC provided nearly $3,400,000 in pharmacy discounts to its eligible patients in 2025. SFHCs pharmacy discount program depends on knowing the drugs 340B price at the time the prescription is dispensed. When pharmacy systems and wholesaler files reflect only WAC pricing, the health center loses the ability to accurately calculate and apply compliant patient discounts without investing time and money into workaround programming solutions. Even if solutions are found and implemented, a reasonable risk remains that we will not receive the rebate after already discounting the prescription for our patient much lower than we paid for it. To offset the risk, health centers may be forced to offer lesser discounts (higher prices) for their discount program-eligible patients directly affecting access to affordable medication for the vulnerable patient population that needs it most. Second, 340B covered entities are required to bill Medicaid fee-for-service based on actual acquisition cost (AAC). Under a rebate model, the AAC price reflects WAC, not the 340B ceiling price. This disconnect forces CHCs to either bill Medicaid at the much higher WAC AAC or invest time and money into workaround solutions as described above, so the pharmacy software knows the 340B AAC up front. Similarly, the same risk exists where the rebate may not actually be paid on a drug that was already billed to Medicaid at the lower 340B AACwell below what was paid for the drug. Third, the rebate model conflicts with a Presidential Executive Order requiring health centers to provide discounted pricingno more than the 340B ceiling pricefor injectable epinephrine and insulin. Complying with the Executive Order requirement depends on the availability of the discounted 340B price at the pharmacy counter, not weeks or months later. When the 340B price is removed from wholesaler catalogs and pharmacy software, there is no operational mechanism to provide the mandated discount at the time of dispensing without paying for workaround solutions and incurring the same risk described previously. Taken together, these issues demonstrate that a rebate model is incompatible with CHC compliance requirements. CHCs must ensure affordability at the time of care, comply with AAC-based billing methodologies, and meet specific federal access mandates. A model that removes real-time pricing from pharmacy systems forces health centers into unavoidable compliance conflicts across Medicaid, Section 330 grant requirements, and federal access directives. Disproportionate Impact on Contract Pharmacy Access (RFI Topics: OrganizationSpecific Factors, Patient Access, and Program IntegritySections 1(e)(iiiii) and 6(a)) Rebate impacts extend beyond entity-owned pharmacy operations. Because a rebate model shifts the financial risk to the pharmacy, even modest increases in financial exposure or administrative burden may cause contract pharmacies to block affected drugs or exit participation altogether. In rural and underserved communities, these disruptions quickly translate into reduced access and fewer viable dispensing options for patients. SFHCs contract pharmacy activity represents only about 9% of our 340B prescription volume but generates nearly 50% of our net 340B savings. This means a rebate model disproportionately threatens these arrangements. The critical resources generated through contract pharmacy, which are reinvested directly into patient services as previously described, face significant risk under a rebate model. Impacts on Inventory Decisions and Patient Access (RFI Topics: Patient Access and Payment TimingSections 1(e)(iii) and 2(a)) These cash flow pressures have direct clinical consequences. Many high cost, high impact medications already require significant upfront investment under current rules. A rebate-based purchasing model compounds that exposure and materially alters inventory decision-making for safety-net providers. Certain specialty and chronic medications would require upfront inventory cost increases exceeding 1,000%, making it substantially more difficult to stock and dispense them consistently. Even widely used chronic disease therapiessuch as diabetes and cardiovascular medicationsshow material increases in upfront outlay per order. Over time, this forces difficult decisions about inventory levels, dispensing delays, or whether certain medications can remain available at the health center pharmacy at all. In practical terms, patients may face delayed therapy initiation, reduced access to essential medications at the time of care, or increased reliance on external dispensing channels. These outcomes directly undermine the statutory purpose of the 340B program and HRSAs access goals. CHCs are uniquely required to provide discounted pharmaceuticals at the time of care; a backside rebate model is incompatible with that obligation. A Workable Alternative: A Neutral National Claims Clearinghouse (RFI Topics: Alternatives, Duplicate Discount Prevention, Data Workflow Impacts, and Program IntegritySections 1(e)(ii), 4(c), 6(b)(i), and 6(c)) SFHC recognizes HRSAs concerns regarding duplicate discounts and data accuracy and supports reasonable, targeted solutions to address those concerns. However, those goals can be achieved without dismantling the upfront 340B pricing structure that CHCs rely upon. As described in our previous comments, a neutral national claims clearinghouse represents a more workable and proportionate alternative. Under this approach, covered entities would continue to purchase drugs at the 340B ceiling price at the point-of-sale, preserving pricing certainty and patient affordability. Claims and encounter data necessary for duplicate discount prevention would be submitted to a centralized, neutral entity that has no financial incentive to deny claims or delay validation. This model addresses manufacturer concerns while avoiding the core structural flaws of a rebate-based approach. It preserves point-of-sale affordability, avoids turning safety-net providers into de facto lenders, prevents manufacturer-controlled eligibility determinations, and reduces administrative fragmentation by standardizing deduplication through a single neutral channel. SALINA FAMILY HEALTHCARE CENTER Conclusion Based on center-specific financial analysis, operational experience, and patient care realities, SFHC strongly urges HRSA to exempt CHCs from any 340B rebate model pilot or implementation. A rebate model would materially destabilize health center finances, erode 340B value, increase administrative burden and compliance risk, and reduce patient accesswithout delivering offsetting benefits for patients or program integrity. HRSA should instead preserve upfront 340B pricing for CHCs and pursue alternatives, such as a neutral claims clearinghouse, that address duplicate discount concerns without undermining safety-net providers' ability to stretch scarce resources to serve vulnerable populations. Thank you again for the opportunity to comment. Please feel free to contact me at dpihl@salinahealth.org or (785) 825-7251 x240 with any questions. Respectfully submitted, 20his Derek R. Pihl, PharmD Chief Pharmacy Officer Salina Family Healthcare Center
HRSA-2026-0001-0661Shenandoah Community Health2026-04-06T04:00Z12,487 chars
Please see the attached letter submitted as comment for Shenandoah Community Health, a FQHC serving patients in West Virginia and Virginia. Thank You. 99 Tavern Road Martinsburg, WV 25401 PO Box 1146 Martinsburg, WV 25402 304.263.4999 phone 304.263.0984 fax www.shencommhealth.com Shenandoah Community Health Martinsburg, West Virginia April 6, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, Shenandoah Community Health (SCH) is a Community Health Center (CHC) with our main site based in Martinsburg, WV. We operate multiple sites across 4 counties in 2 states - West Virginia and Virginia. SCHs wide range of coordinated healthcare services includes routine adult primary care as well as chronic disease treatment and management; pediatrics; mental health and substance use treatment; specialized care for women including prenatal care, postnatal care, and gynecology; as well as comprehensive dental care for children and adults. As a medical home, SCH offers WIC Nutrition Programs (in 5 WV counties); HIV case management; weight and wellness program; on-site pharmacies; lab, x-ray, and ultrasound services; nursing outreach to migrant and seasonal farmworkers and the homeless; medication assistance; assistance with health insurance enrollment; social work services; and school-based health (including behavioral health programs). SCH also serves as an education partner for nursing and medical students to obtain their required clinical rotations. Shenandoah Community Health serves all patientsadults and children regardless of ability to pay. For over 30 years, the 340B program has been key to increasing medication access to our patient population and living our mission of reducing barriers to care. 99 Tavern Road Martinsburg, WV 25401 PO Box 1146 Martinsburg, WV 25402 304.263.4999 phone 304.263.0984 fax www.shencommhealth.com As reflected in our most recent Uniform Data System (UDS) submission, SCH serves a large and medically complex patient population with significant reliance on affordable access to medications as a core component of primary care. The majority of SCHs nearly 30,000 unique patients are low-income, uninsured, or publicly insured, and a substantial portion manage one or more chronic conditions requiring ongoing pharmacologic treatment. SCHs pharmacies play a critical role in ensuring continuity of care, medication adherence, and compliance with statutory sliding fee scale requirements. For these reasons, the 340B Drug Pricing Program is foundational to SCHs ability to fulfill its mission and maintain financial stability while serving patients with limited financial resources. SCH previously submitted formal comments to HRSA in September 2025 regarding the initial 340B Rebate Model Pilot proposal. Many of the concerns raised at that time remain unresolved and are further intensified by the expanded scope and operational complexity outlined in the current Request for Information. SCHs experience operating entity-owned pharmacies with physical inventory, complying with manufacturer data-submission requirements, and navigating emerging Medicare Drug Price Negotiation Program (MFP) obligations uniquely positions us to assess the real-world implications of a rebate-based pricing model on community health centers. SCH undertook a comprehensive internal evaluation of the proposed 340B Rebate Model's financial implications for its operations and cash flow. Utilizing SCHspecific historical purchasing data, current 340B ceiling prices, Wholesale Acquisition Cost (WAC) pricing, wholesaler payment terms, inventory turnover assumptions, and prudent rebate timing and denial estimates, the analysis revealed that the proposed rebate model is projected to present immediate, material, and escalating financial risks for SCH over the next three years. Under the rebate model, SCH would be required to purchase selected drugs at full WAC pricing and wait for manufacturer rebate payments after medications are dispensed to patients. Based on SCHs actual purchasing patterns, the rebate model would increase SCHs up-front annual drug spend by approximately $1.19 million in the first year, rising to approximately $2.26 million in the second year and approximately $2.90 million in the third year as additional drugs are phased into the model. This represents an increase in up-front inventory spend of more than 800 percent in year one, with sustained elevated exposure in subsequent years. These increases directly erode SCHs liquidity. Even under relatively optimistic assumptions regarding rebate payment timing, SCH would experience a cash-on-hand reduction of approximately $146,600 at 45 days in year one, increasing to approximately $276,800 in year two and approximately $351,400 in year three. If rebate payments are delayed, disputed, or denied, the exposure becomes substantially more severe. At a 99 Tavern Road Martinsburg, WV 25401 PO Box 1146 Martinsburg, WV 25402 304.263.4999 phone 304.263.0984 fax www.shencommhealth.com 90-day interval, SCHs cash-on-hand impact increases to approximately $293,200 in year one, approximately $553,600 in year two, and over $702,800 in year three. For a community health center operating on thin margins, these sustained reductions in liquidity threaten SCHs ability to meet payroll, maintain pharmacy inventory, pay vendors, and continue essential patient services. In addition to liquidity impacts, SCH estimates significant rebate-related opportunity costs associated with delayed payments, denied rebates, and the loss of prompt-pay and volume-based purchasing discounts. These opportunity costs are estimated at approximately $179,000 in the first year, increasing to approximately $354,000 in the second year and nearly $479,000 in the third year. These losses represent resources that would otherwise be reinvested directly into patient care, medication assistance programs, enabling services, and access-expanding initiatives. The financial risks of the rebate model are compounded by substantial new administrative and workforce burdens. To comply with ongoing monitoring, tracking, reconciliation, and dispute resolution requirements for both 340B and Maximum Fair Price rebate claims, SCH anticipates the need to hire one to two additional full-time equivalent staff, such as pharmacy technicians or entry-level accounting personnel. These positions would be dedicated to claim-level data submission, manufacturer-specific reconciliation processes, denial follow-up, audit preparation, and coordination across pharmacy, finance, and compliance functions. These duties cannot be absorbed by existing staff without materially impairing patient-facing operations. Based on SCHs wage and benefit structure, the fully loaded annual employer cost per additional FTE is approximately $65,530. This includes an average base salary of $41,600 per year, employer-paid payroll taxes totaling approximately $3,182 annually under the Federal Insurance Contributions Act, employer-paid benefits estimated at $19,500 per year, and a 403(b) retirement match of approximately $1,248 annually. Accordingly, SCH estimates a recurring workforce cost of approximately $65,530 per year for one additional FTE and approximately $131,060 per year for two additional FTEs. These costs are permanent, non-revenue-generating, and further diminish the net value of the 340B program for SCH. Absent additional federal funding, these new staffing costs would necessarily be offset through reductions in patient-facing services, including fewer medication assistance resources, longer pharmacy turnaround times, and decreased capacity to provide discounted medications for uninsured and underinsured patients. The downstream impact of these financial and administrative pressures on patients is significant. SCHs UDS data reflect a patient population with a high prevalence of chronic disease, behavioral health needs, and economic vulnerability. A substantial portion of SCH visits involve medication-dependent care, including 99 Tavern Road Martinsburg, WV 25401 PO Box 1146 Martinsburg, WV 25402 304.263.4999 phone 304.263.0984 fax www.shencommhealth.com diabetes management, cardiovascular disease, mental health treatment, HIV care, and womens health services. The rebate model undermines SCHs ability to apply sliding fee discounts at the point of sale because pharmacy pricing systems would reflect WAC rather than the 340B ceiling price. This introduces pricing uncertainty, delays, and potential cost increases for patients at the pharmacy counter, increasing the risk of medication non-adherence, disease progression, and avoidable emergency department utilization. Shenandoah Community Health believes that the rebate model also creates a direct conflict with statutory requirements to provide sliding fee discounts and affordable medications within HRSA-approved scope of project. By severing the connection between acquisition cost and point-of-sale pricing, the rebate model makes compliance operationally impracticable for community health centers. SCH remains deeply concerned about the interaction between the proposed rebate model and the Inflation Reduction Acts Medicare Drug Price Negotiation Program. Without explicit statutory guardrails, standardized denial criteria, enforceable payment timelines, and a neutral dispute resolution process, the rebate model shifts financial risk unilaterally to covered entities while granting manufacturers broad discretion over payment determinations. This risk is particularly concerning given the already extensive compliance framework under which community health centers operate, including HRSA Operational Site Visits, internal audits, external oversight, and mandatory UDS reporting. SCH and other community health centers are national models of compliance and stewardship, not sources of program misuse. The compounding effects of a rebate programyear after yearwill force health centers nationwide to continuously scale back patient-facing services to compensate for lost savings and the escalating cash flow and administrative burdens imposed by the model. As these financial pressures mount, patients will experience increasingly limited access to affordable medications, longer wait times for essential care, and diminished support for chronic disease management and preventive services. Some health centers will be compelled to reduce the range of available services, close sites, merge with other health centers, or ultimately cease to function in their communities. Ultimately, the cumulative impact will drastically undermine the ability of health centers to serve vulnerable populations, putting patient health and wellbeing at significant risk. For these reasons, Shenandoah Community Health strongly urges HRSA to exempt community health centers from participation in the 340B Rebate Model Pilot Program. Over the next three years, the proposed model would dramatically increase up-front drug purchasing costs, materially erode cash on hand, destabilize cash flow, require permanent increases in administrative staffing, undermine statutory sliding fee scale obligations, and place patient access at risk. The 340B program was designed to help health centers stretch scarce federal 99 Tavern Road Martinsburg, WV 25401 PO Box 1146 Martinsburg, WV 25402 304.263.4999 phone 304.263.0984 fax www.shencommhealth.com resources, not to force safety-net providers into prolonged financial limbo while waiting for retrospective rebates. SCH respectfully requests that HRSA reconsider this approach and ensure that any future program modifications preserve up-front affordability, protect patient access, and reflect the operational realities of community health centers. SCH appreciates the opportunity to submit these comments and looks forward to continued engagement with HRSA on this critically important issue. Sincerely, Stephen McCahan, PharmD, RPh Chief Compliance Officer samccahan@svms.net 304.263.4999 Ext. 1047 99 Tavern Road | P.O. Box 1146 Martinsburg, WV 25401
HRSA-2026-0001-0662Premier, Inc.2026-04-06T04:00Z12,790 chars
Premier Inc. appreciates the opportunity to submit comments on the Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) which was published in the February 17, 2026 Federal Register. Addtional comments are attached. 200 Massachusetts Avenue NW, Suite 330, Washington, DC 20001 | premierinc.com April 6, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically to: http://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program [Docket No. HRSA-2026-03042] Dear Administrator Engels: Premier Inc. appreciates the opportunity to submit comments on the Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) which was published in the Feb. 17, 2026 Federal Register. Premier writes on behalf of our member hospitals and health systems many of which participate in the 340B program and the patients and communities they serve. Many Premier members rely on the programs existing upfront discount construct as an essential tool that helps them maintain access to outpatient medications and invest limited resources into services that expand access to care, particularly for underserved and medically complex patient populations. I. BACKGROUND ON PREMIER Premier is a leading healthcare improvement company and national supply chain leader, uniting an alliance of 4,350 hospitals and approximately 325,000 continuum of care providers to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, consulting and other services, Premier enables better care and outcomes at a lower cost. A Malcolm Baldrige National Quality Award recipient, Premier plays a critical role in the rapidly evolving healthcare industry, collaborating with healthcare providers, manufacturers, distributors, government and other entities to co- develop long-term innovations that reinvent and improve the way healthcare is delivered nationwide. Headquartered in Charlotte, North Carolina, Premier is passionate about transforming American healthcare. II. 340B DRUG DISCOUNT PROGRAM Congress created the 340B Drug Pricing Program in 1992 to allow certain safety net hospitals and other healthcare entities (known as covered entities) to purchase outpatient drugs at a discount from drug manufacturers to stretch scarce Federal resources and to expand healthcare services to vulnerable populations. For nearly three decades, the 340B program has been critical in helping covered entities expand access to lifesaving prescription drugs and comprehensive healthcare services to low-income, underinsured and uninsured individuals in communities across the country. The savings produced by the 340B program have become essential to covered entities (e.g., those with a Medicare disproportionate share percentage of more than 11.75 percent) in meeting the needs of the communities and patients they serve. Under the program, drug manufacturers are required to offer lower prices on covered outpatient drugs to covered entities and other providers, enabling them to invest the difference between the discounted price and the RFI on 340B Rebate Model Pilot Program Response April 6, 2026 Page 2 of 4 2026 All rights reserved. | Premier Inc. | 2 amount paid by Medicare in healthcare services for underserved and uninsured patients. The ability to channel these resources toward expanded patient services, rather than toward the upfront purchase of covered outpatient drugs at inflated Wholesale Acquisition Cost (WAC) pricing, is more critical than ever as our nation continues to face continued healthcare challenges. III. POTENTIAL 340B DRUG REBATE PROGRAM HRSA is seeking input on whether the agency should pursue a rebate-based mechanism under the 340B Drug Pricing Program and, if so, how such an approach might be structured, what standards should govern manufacturer participation, and what operational and financial implications it would create across the drug supply chain. This request for information comes on the heels of recent litigation developments in which federal courts halted HRSAs earlier 340B Rebate Model Pilot Program. Following those rulings, HHS agreed to withdraw the pilot entirely and begin with a fresh notice-and-comment process for any future rebate initiative. Premiers Recommendations Premier is concerned that a rebate-based model even if designed as a pilot could create significant and potentially unsustainable financial risks and operational complexity for participating hospitals. Since the 340B program became law over three decades ago, HHS has recognized a single mechanism to make the 340B price available to participating hospitals and other covered entities an upfront discounted price. Replacing an established successful point-of-sale discount with a post-purchase reimbursement structure would shift costs and compliance burdens onto providers that are already managing workforce shortages, escalating drug costs and tight margins. For many hospitals, that shift would not be a technical adjustment; it would be a fundamental change in cash flow, billing/claims operations, and compliance processes that represents an existential threat to their ability to reliably furnish high-cost therapies and sustain community-based services. It would also run counter to Congressional intent in creating the 340B program to enable covered entities to access discounted drug prices to lower initial costs and stretch scarce resources, allowing them to reach more eligible patients and provide more comprehensive services. 340B drug discounts help defray the costs that 340B hospitals and other covered entities incur in furnishing medicines to 340B eligible patients at low or no cost; the savings are also used to furnish other healthcare services to low-income patients, the uninsured and the underinsured. 1) A rebate model risks undermining the 340B programs core function for covered entities. The current 340B structure provides predictable, upfront pricing that hospitals can incorporate into pharmacy operations and budgeting. In contrast, a rebate model would introduce uncertainty. If rebate payment timelines, documentation standards, and manufacturer adjudication practices vary or change over time, hospitals may be left with delayed reimbursement, uncompensated costs and administrative disputes. That uncertainty is especially consequential for rural hospitals and safety-net facilities with limited operating reserves, that must preserve cash on hand to support day-to-day patient care and capital needs. 2) Administrative and systems burden would be substantial, particularly for hospitals with limited infrastructure. A rebate framework would likely require new claims-level identification, tracking, submission, reconciliation and dispute management workflows. Many hospitals would need to invest in new technology, vendor support, compliance staff, legal review and cross-department coordination (pharmacy, revenue cycle, IT, finance, compliance and legal). Those costs are not one-time. They would be ongoing, and they would divert scarce resources away from patient- facing services. 3) Cash-flow effects could be material and immediate. By design, a rebate model would require hospitals (or their contract pharmacy partners, depending on program mechanics) to pay higher acquisition costs up front and then wait for manufacturers to repay amounts owed. That RFI on 340B Rebate Model Pilot Program Response April 6, 2026 Page 3 of 4 2026 All rights reserved. | Premier Inc. | 3 structure effectively compels hospitals to finance manufacturers repayment obligations and exposes hospitals to the financial impact of delayed, partial or denied rebates. For hospitals that must meet minimum liquidity thresholds due to bond covenants, credit rating considerations, or capital plans this is not a theoretical concern. It is a real- world risk that can affect access to capital, facility modernization, and workforce investments. 4) A rebate pilot could create inconsistent manufacturer requirements and inadequate accountability. Premier is also concerned that a rebate-based approach could result in the establishment of inconsistent documentation and data submission requirements that evolve without transparent oversight. Any model HRSA considers must avoid a system where providers bear the burden of navigating moving targets, opaque processes, or private-party rulemaking that is not clearly authorized, publicly communicated, and consistently enforced. 5) HRSA should not repeat past implementation challenges that prompted litigation and program withdrawal. HRSAs current RFI follows recent litigation and related federal actions involving the agencys earlier 340B Rebate Model Pilot Program, and HHSs decision to withdraw the prior pilot and pursue a new notice-and-comment process for any future rebate initiative. Premier urges HRSA to carefully weigh what those developments signal: the need for clear legal grounding, transparent governance and practical workability, especially for hospitals with limited administrative capacity. Furthermore, CMS rebate reconciliation process and validation for initial Inflation Reduction Act (IRA) drugs have presented challenges related to efficiency and accuracy. The platform often misclassifies non-340B eligible claims as 340B eligible, and vice versa, resulting in confusion and delays. Additionally, the appeals process to resolve these issues is complex and time intensive. In response, several hospitals have been forced to redirect existing staff or hire new FTEs to manage errors and appeals. It is essential to address these platform issues before considering any expansion of the rebate model. Given these concerns, Premier urges HRSA not to proceed with a rebate model pilot program that replaces the existing upfront discount mechanism. The risks to provider financial viability, administrative feasibility, and the reliability of 340B savings are substantial and those risks would ultimately be borne by patients and communities served by 340B hospitals. If HRSA nonetheless elects to move forward in some form, Premier recommends that HRSA establish, at minimum, the following guardrails to protect hospitals and program integrity: Provider protections against cash-flow harm: Require prompt, enforceable rebate timelines with clear consequences for noncompliance; prohibit practices that shift financing costs to covered entities. Uniform, HRSA-controlled requirements: Standardize submission fields, documentation, audit standards, and change-control processes set and governed by HRSA, not manufacturers or private platforms. Clear, efficient dispute resolution with meaningful enforcement: Create a defined process with deadlines, escalation pathways, and remedies that do not require hospitals to absorb prolonged nonpayment or costly bilateral negotiation Minimize operational complexity and avoid pilot creep: Limit scope, ensure adequate testing, and avoid layering multiple manufacturer-specific requirements that multiply complexity. Data security and confidentiality: Ensure that any data flows and vendor platforms meet robust security expectations appropriate for sensitive healthcare and claims information, with transparent accountability. Ongoing transparency and evaluation: Provide public reporting on pilot operations, issues encountered, resolution rates, payment timeliness, and administrative cost impacts so that stakeholders can assess whether the model is workable and lawful. RFI on 340B Rebate Model Pilot Program Response April 6, 2026 Page 4 of 4 2026 All rights reserved. | Premier Inc. | 4 IV. CONCLUSION In closing, Premier appreciates the opportunity to submit these comments on the Request for Information: 340B Rebate Model Pilot Program (Docket No. HRSA-2026-03042), given this is an issue with significant implications for hospitals and patients. Premier looks forward to working with CMS to strengthen the 340B program by ensuring that hospitals and other 340B entities can fulfill Congressional intent of the program, which is to expand care for vulnerable populations. If you have any questions regarding our comments or need more information, please contact me at john_knapp@premierinc.com. Sincerely, John Knapp Vice President, Government Affairs Premier Inc.
HRSA-2026-0001-0663Minneola District Hospital NBR 22026-04-06T04:00Z13,987 chars
Please find attached the written comments for Minneola District Hospital NBR 2. Minneola District Hospital CAH171368-00 212 Main Street Minneola, Kansas 67865 March 31st, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Minneola District Hospital welcomes this opportunity to provide feedback on the Request for Information concerning a potential rebate-based model within the 340B Drug Pricing Program. As a Critical Access Hospital serving a rural community in southwest Kansas, Minneola District Hospital depends on the statutory point-of-sale discount structure to preserve medication access and sustain vital healthcare services for vulnerable populations. The following responses address the operational, fiscal, and compliance challenges our facility would encounter under a rebate framework. Administrative Cost Impact Transitioning to a rebate model would impose substantial administrative burdens on Minneola District Hospital. We estimate the incremental monthly administrative expenses to be at least $750. These costs account for expanded staff hours devoted to claims reconciliation, rebate validation, financial reporting adjustments, and manufacturer or third-party administrator dispute management. Payment Timing and Cash Flow Implications Rebate payment delays pose a critical concern for Minneola District Hospital given the already thin operating margins typical of rural Critical Access Hospitals in southwest Kansas. Recent pharmacy sector experiences illustrate the risk. The Maximum Fair Pricing (MFP) initiative was designed to integrate with rebate processes. When the rebate component was discontinued, MFP protocols remained active, generating persistent reconciliation difficulties for pharmacies. Documented pharmacy challenges include: Inability to correlate anonymized claims data between Beacon MFP and the Medicare Transaction Facilitator systems. Misclassification of prescriptions as 340B-qualifying when they were not. Financial adjustments processed several months post-transaction. For Minneola District Hospital, such payment lags or inaccuracies would create severe operational exposure. Implications if a Rebate is Denied When manufacturers deny or postpone rebate issuance, the covered entity absorbs the financial loss. Discussions within the 340B Coalition have revealed cases where pharmacy providers made repeated outreach attempts to manufacturers regarding rebate inconsistencies without response. Providers were subsequently directed to escalate matters to federal oversight bodies, yet no enforcement pathway existed to ensure manufacturers remitted payments promptly. Should pharmaceutical companies extend rebate timelines beyond a proposed 10-day payment standard, the resulting cash shortfall for Minneola District Hospital could range from $50,000 to $100,000, a burden our organization cannot sustain. Impact on Data Collection and Reporting Adopting a rebate framework would substantially complicate Minneola District Hospital's internal financial reconciliation and data management workflows. At present, our facility must validate each rebate payment on an individual transaction basis. Third-party administrators employ varying reporting methodologies. Specific examples include: Certain TPAs disclose the gross acquisition price. Other TPAs provide only the net post-rebate figure. This lack of standardization complicates accurate financial reconciliation and would undermine efforts to deliver patient savings through programs such as pharmacy discount cards. Manufacturer Efforts to Prevent Duplicate Discounts Pharmaceutical manufacturers routinely assert duplicate discount concerns. However, statutory prohibitions against duplicate discounts apply exclusively to Medicaid transactions. Manufacturers have independently entered into rebate contracts with pharmacy benefit managers covering Medicare and commercial insurance populations. These commercial rebate arrangements fall outside the 340B legislative mandate and should not impose additional compliance responsibilities on covered entities. Manufacturers retain existing audit rights when reasonable suspicion of noncompliance arises. In reality, audits occur rarely because grounds for reasonable cause are seldom identified. Reporting Requirements Existing rebate platforms lack sufficient reporting capabilities for proper financial oversight. Organizations utilizing the Beacon rebate system have reported that available reporting tools do not adequately facilitate financial reconciliation. Core accounting reports required by chief financial officers to match deposits with bank records were absent from the original platform configuration. Absent comprehensive and uniform reporting functions, covered entities would encounter significant accounting obstacles under a rebate regime. Impact on the Integrity of the 340B Program Minneola District Hospital contends that a rebate structure fundamentally conflicts with the statutory design of the 340B program. Federal law mandates that manufacturers sell covered outpatient drugs to covered entities at the 340B ceiling price upon purchase. Substituting that immediate statutory discount with a post- transaction rebate process introduces ambiguity regarding whether the covered entity will ultimately obtain the mandated pricing. When rebates are postponed, contested, or rejected, the covered entity effectively acquires medication at wholesale acquisition cost, which undermines the core legislative purpose of the program. In summary, Minneola District Hospital urges HRSA to preserve the existing point-of-sale discount mechanism central to the 340B program. A rebate-driven alternative would impose unwarranted financial exposure, administrative strain, and operational inefficiency on rural safety-net institutions that depend on this program to ensure patient access to affordable medications. Minneola District Hospital CAH171368-00 212 Main Street Minneola, Kansas 67865 March 31st, 2026 Health Resources and Services Administration - Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 - Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Minneola District Hospital welcomes this opportunity to provide feedback on the Request for Information concerning a potential rebate-based model within the 340B Drug Pricing Program. As a Critical Access Hospital serving a rural community in southwest Kansas, Minneola District Hospital depends on the statutory point-of-sale discount structure to preserve medication access and sustain vital healthcare services for vulnerable populations. The following responses address the operational, fiscal, and compliance challenges our facility would encounter under a rebate framework. Administrative Cost Impact Transitioning to a rebate model would impose substantial administrative burdens on Minneola District Hospital. We estimate the incremental monthly administrative expenses to be at least $750. These costs account for expanded staff hours devoted to claims reconciliation, rebate validation, financial reporting adjustments, and manufacturer or third-party administrator dispute management. Payment Timing and Cash Flow Implications Rebate payment delays pose a critical concern for Minneola District Hospital given the already thin operating margins typical of rural Critical Access Hospitals in southwest Kansas. Recent pharmacy sector experiences illustrate the risk. The Maximum Fair Pricing (MFP) initiative was designed to integrate with rebate processes. When the rebate component was discontinued, MFP protocols remained active, generating persistent reconciliation difficulties for pharmacies. Documented pharmacy challenges include: Inability to correlate anonymized claims data between Beacon MFP and the Medicare Transaction Facilitator systems. Misclassification of prescriptions as 340B-qualifying when they were not. Financial adjustments processed several months post-transaction. For Minneola District Hospital, such payment lags or inaccuracies would create severe operational exposure. Implications if a Rebate is Denied When manufacturers deny or postpone rebate issuance, the covered entity absorbs the financial loss. Discussions within the 340B Coalition have revealed cases where pharmacy providers made repeated outreach attempts to manufacturers regarding rebate inconsistencies without response. Providers were subsequently directed to escalate matters to federal oversight bodies, yet no enforcement pathway existed to ensure manufacturers remitted payments promptly. Should pharmaceutical companies extend rebate timelines beyond a proposed 10-day payment standard, the resulting cash shortfall for Minneola District Hospital could range from $50,000 to $100,000, a burden our organization cannot sustain. Impact on Data Collection and Reporting Adopting a rebate framework would substantially complicate Minneola District Hospital's internal financial reconciliation and data management workflows. At present, our facility must validate each rebate payment on an individual transaction basis. Third-party administrators employ varying reporting methodologies. Specific examples include: Certain TPAs disclose the gross acquisition price. Other TPAs provide only the net post-rebate figure. This lack of standardization complicates accurate financial reconciliation and would undermine efforts to deliver patient savings through programs such as pharmacy discount cards. Manufacturer Efforts to Prevent Duplicate Discounts Pharmaceutical manufacturers routinely assert duplicate discount concerns. However, statutory prohibitions against duplicate discounts apply exclusively to Medicaid transactions. Manufacturers have independently entered into rebate contracts with pharmacy benefit managers covering Medicare and commercial insurance populations. These commercial rebate arrangements fall outside the 340B legislative mandate and should not impose additional compliance responsibilities on covered entities. Manufacturers retain existing audit rights when reasonable suspicion of noncompliance arises. In reality, audits occur rarely because grounds for reasonable cause are seldom identified. Reporting Requirements Existing rebate platforms lack sufficient reporting capabilities for proper financial oversight. Organizations utilizing the Beacon rebate system have reported that available reporting tools do not adequately facilitate financial reconciliation. Core accounting reports required by chief financial officers to match deposits with bank records were absent from the original platform configuration. Absent comprehensive and uniform reporting functions, covered entities would encounter significant accounting obstacles under a rebate regime. Impact on the Integrity of the 340B Program Minneola District Hospital contends that a rebate structure fundamentally conflicts with the statutory design of the 340B program. Federal law mandates that manufacturers sell covered outpatient drugs to covered entities at the 340B ceiling price upon purchase. Substituting that immediate statutory discount with a post-transaction rebate process introduces ambiguity regarding whether the covered entity will ultimately obtain the mandated pricing. When rebates are postponed, contested, or rejected, the covered entity effectively acquires medication at wholesale acquisition cost, which undermines the core legislative purpose of the program. In summary, Minneola District Hospital urges HRSA to preserve the existing point-of-sale discount mechanism central to the 340B program. A rebate-driven alternative would impose unwarranted financial exposure, administrative strain, and operational inefficiency on rural safety-net institutions that depend on this program to ensure patient access to affordable medications. KANSAS OPEN RECORDS ACT (KORA) PUBLIC RECORDS REQUEST FORM Hospital District Name: _______________________________ Requestor Name: _______________________________________ Organization (if applicable): ___________________________ Mailing Address: _______________________________________ City/State/Zip: _______________________________________ Phone: ________________________________________________ Email: ________________________________________________ Preferred Method of Response: Email / Paper Copies / Inspection Only / Digital Media Describe the records requested (include dates, departments, subject matter): _________________________________________________________________________ _________________________________________________________________________ _________________________________________________________________________ Signature: _____________________________ Date: _______________ NOTICE OF PUBLIC RECORDS ACCESS In accordance with the Kansas Open Records Act (K.S.A. 45-215 et seq.), public records of the Hospital District are open for inspection unless specifically exempted by law. HOW TO REQUEST RECORDS: Requests may be submitted in writing, by email, by mail, hand delivery, or by completing the Hospital Districts KORA Request Form. The Hospital District will act upon requests as soon as possible, but no later than three (3) business days after receipt. OFFICIAL CUSTODIAN: Name: _______________________________ Title: _______________________________ Address: _____________________________ Phone: _______________________________ Email: _______________________________ Fees may apply for copying, staff time, postage, and data retrieval. Prepayment may be required if estimated fees exceed $25.00. Medical record requests are processed separately under HIPAA and are not handled under KORA.
HRSA-2026-0001-0664MGRMC2026-04-06T04:00Z11,102 chars
See attached file(s) Comments on HRSA 340B Rebate Model Mount Graham Regional Medical Center To Whom It May Concern: Mount Graham Regional Medical Center is a small rural hospital, in southeast Arizona, serving a geographically dispersed community with limited local access to health care and pharmacy services. From our perspective, implementation of a 340B rebate model would create a meaningful operational and financial burden that is not reflected in HRSAs current assumptions. For purposes of these comments, we have assumed the rebate model could extend to all Medicare negotiated-price drugs for applicability years 2026 and 2027, spanning approximately 25 drugs and 13 manufacturers, and that covered entities would be required to submit claims-level data, track rebate payments by manufacturer, reconcile underpayments and denials, and maintain privacy, audit, and compliance documentation. 1. Estimated staff time required We estimate the following ongoing weekly labor would be required to comply with a rebate model: Pharmacy purchasing / 340B operations: 8 hours per week Claim extraction, submission, and exception review: 6 hours per week Reconciliation of rebate payments, denials, and underpayments: 5 hours per week Finance review and cash tracking: 2 hours per week Compliance / privacy oversight and audit documentation: 2 hours per week IT / reporting support: 1 hour per week This totals approximately 24 hours per week, or about 1,248 hours annually. In addition, we estimate a one-time implementation burden of approximately 120 to 180 hours for workflow design, policy revision, report setup, staff training, and vendor onboarding. Even at this more conservative estimate, the burden is substantially greater than a 5-hour-per-week assumption. 2. Estimated new FTEs and labor cost We estimate we would need approximately 0.50 additional FTE to operate a rebate model consistently, plus reallocated time from existing hospital staff. A reasonable staffing mix for our facility would be: 0.25 FTE pharmacy analyst / 340B support 0.10 FTE pharmacy buyer / purchasing support 0.05 FTE finance support 0.05 FTE compliance / privacy support 0.05 FTE IT / data support Estimated annual labor cost: 0.50 FTE incremental loaded labor cost: $52,000 to $68,000 annually Reallocated management and pharmacist oversight time: $12,000 to $20,000 annually Total estimated annual labor impact: $64,000 to $88,000 per year This estimate reflects a more conservative staffing approach, but it still represents a significant administrative addition for a small rural hospital with limited existing infrastructure. 3. Estimated external costs We also expect external costs to comply with a rebate model, particularly if outside support is needed for data formatting, submission workflows, and reconciliation. Estimated first-year external costs include: Split-billing / rebate submission vendor setup or expansion: $20,000 to $40,000 Annual vendor subscription / transaction / support fees: $18,000 to $36,000 IT interface, report development, or data formatting support: $8,000 to $18,000 Legal / compliance / consulting review: $5,000 to $12,000 Staff training and workflow redesign support: $2,500 to $6,000 Total estimated first-year external cost: $53,500 to $112,000. 4. Cash-flow impact and downstream consequences The most serious consequence of a rebate model is the cash-flow disruption caused by requiring hospitals to purchase eligible drugs at full WAC upfront and wait for repayment later. Using a more conservative planning assumption, we estimate the rebate model could increase our average monthly drug cash exposure by approximately $75,000 to $150,000, depending on volume, timing of claims submission, rebate payment lag, and the mix of high- cost drugs affected. We estimate the direct financing and working-capital burden of carrying that additional monthly exposure could reasonably cost $6,000 to $15,000 annually, in addition to reduced purchasing flexibility, higher risk of invoice aging, and greater pressure on cash reserves. 5. Impact on patients and the community For a small rural hospital, these added labor, vendor, and cash-flow costs would compete directly with patient-care priorities. If a rebate model is implemented, resources would likely have to be shifted away from pharmacy service expansion, medication access efforts, technology improvements, and other rural service-line investments that improve access close to home. Based on the estimates above, the combined annual impact for our facility could reasonably fall in the range of $123,500 to $215,000 in recurring labor, vendor, and financing-related costs, plus one-time implementation burden and unquantified operational risk. Estimated burden summary Category Estimate Ongoing staff time 24 hours/week (about 1,248 hours/year) One-time implementation 120180 hours New staffing need About 0.50 FTE total Annual labor cost $64,000$88,000 First-year external cost $53,500-$112,000 Monthly added cash exposure $75,000-$150,000 Annual financing / working-capital impact $6,000-$15,000 Total recurring annual impact $123,500-$215,000 Conclusion We strongly urge HRSA not to move forward with a 340B rebate model. Even under conservative assumptions, the model would require meaningful new staffing, significant vendor and compliance costs, material cash-flow disruption, and diversion of limited resources away from patient care and community services. For rural hospitals, this is not merely an administrative inconvenience; it is a direct threat to our ability to preserve access to care in underserved communities. Sincerely, Jade Ashby, PharmD, RPh Director of Pharmacy Mt. Graham Regional Medical Center Safford, AZ Comments on HRSA 340B Rebate Model Mount Graham Regional Medical Center To Whom It May Concern: Mount Graham Regional Medical Center is a small rural hospital, in southeast Arizona, serving a geographically dispersed community with limited local access to health care and pharmacy services. From our perspective, implementation of a 340B rebate model would create a meaningful operational and financial burden that is not reflected in HRSAs current assumptions. For purposes of these comments, we have assumed the rebate model could extend to all Medicare negotiated-price drugs for applicability years 2026 and 2027, spanning approximately 25 drugs and 13 manufacturers, and that covered entities would be required to submit claims-level data, track rebate payments by manufacturer, reconcile underpayments and denials, and maintain privacy, audit, and compliance documentation. 1. Estimated staff time required We estimate the following ongoing weekly labor would be required to comply with a rebate model: Pharmacy purchasing / 340B operations: 8 hours per week Claim extraction, submission, and exception review: 6 hours per week Reconciliation of rebate payments, denials, and underpayments: 5 hours per week Finance review and cash tracking: 2 hours per week Compliance / privacy oversight and audit documentation: 2 hours per week IT / reporting support: 1 hour per week This totals approximately 24 hours per week, or about 1,248 hours annually. In addition, we estimate a one-time implementation burden of approximately 120 to 180 hours for workflow design, policy revision, report setup, staff training, and vendor onboarding. Even at this more conservative estimate, the burden is substantially greater than a 5-hour-per-week assumption. 2. Estimated new FTEs and labor cost We estimate we would need approximately 0.50 additional FTE to operate a rebate model consistently, plus reallocated time from existing hospital staff. A reasonable staffing mix for our facility would be: 0.25 FTE pharmacy analyst / 340B support 0.10 FTE pharmacy buyer / purchasing support 0.05 FTE finance support 0.05 FTE compliance / privacy support 0.05 FTE IT / data support Estimated annual labor cost: 0.50 FTE incremental loaded labor cost: $52,000 to $68,000 annually Reallocated management and pharmacist oversight time: $12,000 to $20,000 annually Total estimated annual labor impact: $64,000 to $88,000 per year This estimate reflects a more conservative staffing approach, but it still represents a significant administrative addition for a small rural hospital with limited existing infrastructure. 3. Estimated external costs We also expect external costs to comply with a rebate model, particularly if outside support is needed for data formatting, submission workflows, and reconciliation. Estimated first-year external costs include: Split-billing / rebate submission vendor setup or expansion: $20,000 to $40,000 Annual vendor subscription / transaction / support fees: $18,000 to $36,000 IT interface, report development, or data formatting support: $8,000 to $18,000 Legal / compliance / consulting review: $5,000 to $12,000 Staff training and workflow redesign support: $2,500 to $6,000 Total estimated first-year external cost: $53,500 to $112,000. 4. Cash-flow impact and downstream consequences The most serious consequence of a rebate model is the cash-flow disruption caused by requiring hospitals to purchase eligible drugs at full WAC upfront and wait for repayment later. Using a more conservative planning assumption, we estimate the rebate model could increase our average monthly drug cash exposure by approximately $75,000 to $150,000, depending on volume, timing of claims submission, rebate payment lag, and the mix of high-cost drugs affected. We estimate the direct financing and working-capital burden of carrying that additional monthly exposure could reasonably cost $6,000 to $15,000 annually, in addition to reduced purchasing flexibility, higher risk of invoice aging, and greater pressure on cash reserves. 5. Impact on patients and the community For a small rural hospital, these added labor, vendor, and cash-flow costs would compete directly with patient-care priorities. If a rebate model is implemented, resources would likely have to be shifted away from pharmacy service expansion, medication access efforts, technology improvements, and other rural service-line investments that improve access close to home. Based on the estimates above, the combined annual impact for our facility could reasonably fall in the range of $123,500 to $215,000 in recurring labor, vendor, and financing-related costs, plus one-time implementation burden and unquantified operational risk. Estimated burden summary Conclusion We strongly urge HRSA not to move forward with a 340B rebate model. Even under conservative assumptions, the model would require meaningful new staffing, significant vendor and compliance costs, material cash-flow disruption, and diversion of limited resources away from patient care and community services. For rural hospitals, this is not merely an administrative inconvenience; it is a direct threat to our ability to preserve access to care in underserved communities. Sincerely, Jade Ashby, PharmD, RPh Director of Pharmacy Mt. Graham Regional Medical Center Safford, AZ
HRSA-2026-0001-0665Christina Boyd · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0666Gina Boyd · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0667Grant Boyd · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0668Gregory Boyd · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0669Tyra Boyd · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0670Taxpayers Protection Alliance2026-04-06T04:00Z10,368 chars
See attached file(s) March XX, 2026 Department of Health and Human Services Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Comments of the Taxpayers Protection Alliance RE: Notice of Request for Public Comments on 340B Rebate Model Pilot Program Docket No. HRSA-2026-03042 On behalf of the millions of taxpayers and consumers we represent, the Taxpayers Protection Alliance (TPA) is pleased to provide the following comments regarding the 340B Rebate Model Pilot Program in response to the request for information issued by the Health Resources and Services Administration (HRSA). The 340B Drug Pricing Program was originally intended to provide discounted drugs and improve care for underserved populations, but it has faced criticism and rightfully so due to excessive waste, fraud, and abuse of the program, which increases costs for patients and taxpayers. The 340B program was established by Congress in 1992. To participate in the Medicaid program, pharmaceutical companies are required to join the 340B program and provide discounts ranging from 20 to 50 percent for specific federally funded healthcare facilities and disproportionate share hospitals (DSH), also known as covered entities. The program is designed to provide discounted medications to low-income patients and uninsured individuals. However, because there is no precise definition of who qualifies as a patient and there are incentives to maintain discounted prices for profit, the program has grown out of control and now requires significant reform. TPA has long supported reforms that would overhaul the program and restore its original intent. Congress must establish a clear definition of an eligible 340B patient as an uninsured, low-income individual who does not qualify for Medicare or Medicaid, thereby tightening eligibility criteria and aligning the program more closely with its original purpose. Additionally, duplicate discounting must be addressed, which could be achieved through increased oversight. Implementing stricter reporting requirements would enhance transparency and accountability by providing clearer documentation of the programs outcomes and expenditures, ensuring that program resources reach the intended patient populations, thereby improving the overall program. HRSAs proposed 340B Rebate Model Pilot Program is a positive step toward reforming 340B by enhancing transparency and reducing fraud and duplicate discounts through shifting the current upfront discount to a post-purchase rebate. The model would decrease duplicate discounts where a drug receives both a 340B discount and a Medicaid rebate. Ensuring that each claim is traceable and holding the program accountable could result in billions of dollars in savings for taxpayers. The Congressional Budget Offices September 9th, 2025, report on the 340B program is just the latest confirmation that the program has increased costs for taxpayers. The report found that 340B costs state and federal taxpayers an estimated $6.5 billion per year due to lost Medicaid rebates. The expansion of the 340B program warrants concern. In 2023, the program attained a historic peak of $66 billion in drug discounts provided by pharmaceutical manufacturers to hospitals. Furthermore, a June 2015 report by the Government Accountability Office revealed that Medicare beneficiaries at 340B hospitals received prescriptions for more drugs or for higher-priced drugs. This naturally raises questions regarding the programs incentive structure and the allocation of the resulting savings. Meanwhile, 340B hospitals are pocketing discounts under the program. This leaves patients and taxpayers footing the bill for a program intended to help them. DSHs are charging significantly higher prices for oncology drugs, for example, often five times the cost to acquire them. In 2016, this led to $1.9 billion in profits for hospitals, largely borne by taxpayers. By 2024, Medicare payments for 340B drugs under Part B were 48 percent higher than the 340B ceiling price. Although the 340B program was originally created to help underserved populations, it has consistently failed to do so and is plagued by inefficiencies, misuse, and unintended costs that undermine its original intent. Reforms like clearer eligibility criteria, enhanced oversight, and a transparent post-purchase rebate model are essential to restoring the programs integrity and ensuring that benefits reach low-income and uninsured individuals. Thank you for your continued attention to this critical issue. Taxpayers Protection Alliance, 1101 14th Street, NW, Suite 500, Washington, D.C. 20005 (202) 930-1716 www.protectingtaxpayers.org March XX, 2026 Department of Health and Human Services Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Comments of the Taxpayers Protection Alliance RE: Notice of Request for Public Comments on 340B Rebate Model Pilot Program Docket No. HRSA-2026-03042 On behalf of the millions of taxpayers and consumers we represent, the Taxpayers Protection Alliance (TPA) is pleased to provide the following comments regarding the 340B Rebate Model Pilot Program in response to the request for information issued by the Health Resources and Services Administration (HRSA).1 The 340B Drug Pricing Program was originally intended to provide discounted drugs and improve care for underserved populations, but it has faced criticism and rightfully so due to excessive waste, fraud, and abuse of the program, which increases costs for patients and taxpayers.2 The 340B program was established by Congress in 1992. To participate in the Medicaid program, pharmaceutical companies are required to join the 340B program and provide discounts ranging from 20 to 50 percent for specific federally funded healthcare facilities and disproportionate share hospitals (DSH), also known as covered entities.3 The program is designed to provide discounted medications to low-income patients and uninsured individuals. However, because there is no precise definition of who qualifies as a patient and there are incentives to maintain discounted prices for profit, the program has grown out of control and now requires significant reform. TPA has long supported reforms that would overhaul the program and restore its original intent. Congress must establish a clear definition of an eligible 340B patient as an uninsured, low- income individual who does not qualify for Medicare or Medicaid, thereby tightening eligibility criteria and aligning the program more closely with its original purpose. Additionally, duplicate discounting must be addressed, which could be achieved through increased oversight. Implementing stricter reporting requirements would enhance transparency and accountability by providing clearer documentation of the programs outcomes and expenditures, ensuring that 1https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate-model- pilot-program. 2 https://www.hrsa.gov/opa. 3 https://www.hrsa.gov/opa/eligibility-and-registration/hospitals/disproportionate-share-hospitals. Taxpayers Protection Alliance, 1101 14th Street, NW, Suite 500, Washington, D.C. 20005 (202) 930-1716 www.protectingtaxpayers.org program resources reach the intended patient populations, thereby improving the overall program. HRSAs proposed 340B Rebate Model Pilot Program is a positive step toward reforming 340B by enhancing transparency and reducing fraud and duplicate discounts through shifting the current upfront discount to a post-purchase rebate. The model would decrease duplicate discounts where a drug receives both a 340B discount and a Medicaid rebate. Ensuring that each claim is traceable and holding the program accountable could result in billions of dollars in savings for taxpayers. The Congressional Budget Offices September 9th, 2025, report on the 340B program is just the latest confirmation that the program has increased costs for taxpayers.4 The report found that 340B costs state and federal taxpayers an estimated $6.5 billion per year due to lost Medicaid rebates.5 The expansion of the 340B program warrants concern. In 2023, the program attained a historic peak of $66 billion in drug discounts provided by pharmaceutical manufacturers to hospitals.6 Furthermore, a June 2015 report by the Government Accountability Office revealed that Medicare beneficiaries at 340B hospitals received prescriptions for more drugs or for higher- priced drugs. 7 This naturally raises questions regarding the programs incentive structure and the allocation of the resulting savings. Meanwhile, 340B hospitals are pocketing discounts under the program. This leaves patients and taxpayers footing the bill for a program intended to help them. DSHs are charging significantly higher prices for oncology drugs, for example, often five times the cost to acquire them.8 In 2016, this led to $1.9 billion in profits for hospitals, largely borne by taxpayers.9 By 2024, Medicare payments for 340B drugs under Part B were 48 percent higher than the 340B ceiling price.10 Although the 340B program was originally created to help underserved populations, it has consistently failed to do so and is plagued by inefficiencies, misuse, and unintended costs that undermine its original intent. Reforms like clearer eligibility criteria, enhanced oversight, and a transparent post-purchase rebate model are essential to restoring the programs integrity and ensuring that benefits reach low-income and uninsured individuals. Thank you for your continued attention to this critical issue. 4 https://www.cbo.gov/publication/60661. 5 https://phrma.org/blog/the-hidden-cost-of-340b-a-multi-billion-dollar-burden-on-taxpayers-and-medicaid. 6 https://www.statnews.com/pharmalot/2024/10/18/340b-medicines-hospitals-pharmacies-pharmaceuticals/. 7 https://www.gao.gov/assets/d15442high.pdf. 8 https://communityoncology.org/wp- content/uploads/2022/09/COA_340B_hospital_transparency_report_2_final.pdf. 9 https://pubmed.ncbi.nlm.nih.gov/31664442/. 10 https://www.medpac.gov/wp-content/uploads/2023/10/340B-ceiling-prices-April-2024-SEC.pdf. Taxpayers Protection Alliance, 1101 14th Street, NW, Suite 500, Washington, D.C. 20005 (202) 930-1716 www.protectingtaxpayers.org
HRSA-2026-0001-0671Debra Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0672Ethan Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0673Howard Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0674La Betha Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0675Sabrina Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0676Carol Boykins · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0677Tami Boyle · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0678Lynn Boys · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0679James Boyse · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0680Alisha Brabson · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0681Debra Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0682Ethan Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0683Howard Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0684La Betha Boyer · United States2026-04-06T04:00Z32 chars
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HRSA-2026-0001-0685Debra Boyer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0686Ethan Boyer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0687Howard Boyer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0688La Betha Boyer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0689Sabrina Boyer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0690Tina Brannon · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0691Michael Brashear · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0692Marilyn Bratcher · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0693Randall Bray · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0694Tomas Brazaitis · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0695Brenda Brazell · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0696Shari Breech · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0697Bill And Dawn Breisch · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0698Nancy Breit · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0699Heather Breland · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0700Barbara Brennan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0701Joan Brennan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0702Fred Brett · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0703Laura Brewer · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0704Jeannie Bricker · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0705John Bridges · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0706Kelly Briggman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0707Rachael Briggs · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0708Joana Bright · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0709Patty Brimley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0710Cassandra Brindley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0711Roger Brink · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0712Tucker Brinkman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0713Jerry Briscoe · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0714Elizabeth Britt · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0715Wayne Broadway · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0716Aaron Brock · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0717Cathy Brock · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0718Alexander Brodsky · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0719Derrick Brookens · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0720Bettina Brooks · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0721Erlanger Health System2026-04-07T04:00Z12,707 chars
See attached file(s) Re: Docket No. HRSA-2026-03042 Request for Information: 340B Renate Model Pilot Program to Health Resources and Services Administration U.S. Department of Health and Human Services Submitted By: Sarah Boutilier, Director of Pharmacy Business and Analytics Date: 04.07.2026 Erlanger Health System (EHS) is comprised of 1 Disproportionate Share Hospital, 2 Critical Access Hospitals, and 1 FQHC, which currently serves the underserved populations of Chattanooga and Hamilton County, TN at 4 locations. EHS serves approximately 1.5 million patients annually, including 14.63% of uncompensated care. As a group of covered entities participating in the 340B Drug Pricing since 1992, we rely on 340B savings to sustain critical services for vulnerable patient populations, preserving the presence of trauma Level 1/NICU level 4 care in the region. EHS supports HRSAs efforts to evaluate program integrity and operational feasibility. However, EHS has significant concerns regarding patient care implications of the transition from an upfront discount model to a rebate-based reimbursement structure. I. Administrative and Operational Impact Current 340B Operations EHS processes approximately 3.1 million 340B-eligible prescriptions annually. Our current annual administrative costs include: Split-billing software and IT systems 340B compliance staff Audit preparations and compliance consulting External auditing Projected Impact Under a Rebate Model Under a rebate model, EHS anticipates significant increases in administrative complexity due to: Claims-level rebate tracking Reconciliation of paid vs denied rebate claims Dispute resolution processes Increased reporting and documentation requirements EHS estimates significant operational cost increases due to: Additional FTEs IT system modifications, integration, and ongoing maintenance Vendor fees for rebate adjudication services The transition timeline alone would require a lengthy timeline and be an upfront additional cost to EHS. II. Cash Flow and Financial Stability The current upfront discount structure allows EHS to purchase medications at the 340B ceiling price at the time of acquisition, preserving working capital. For safety-net providers operating on thin margins, delayed rebate payments will likely: Reduce funds available for uncompensated care Delay expansion of clinical services Increase reliance on lines of credit EHS estimates potential annual interest or financing costs if short-term borrowing is required to bridge rebate delays. III. Risk of Rebate Denials and Disputes Unlike the current point-of-sale discount model, a rebate system introduces risk of: Rebate denials due to coding discrepancies Manufacturer-specific adjudication standards Delayed or partial payments Based on EHSs experience with other existing rebate programs, we anticipate an initial denial rate of approximately 35%, requiring additional reconciliation and appeal resources. Each denied claim is estimated to require approximately 30 minutes of staff time, equating to a significant increase in the workforce. The communication regarding proposed rebate models stated that the intention was to have no administrative burden or increased cost to the covered entities. This has not been realized with the current rebate structures. EHS strongly recommends that HRSA: Establish standardized denial codes Implement mandatory dispute timelines Require transparent manufacturer reporting Provide centralized oversight of denial patterns IV. Duplicate Discount and Compliance Considerations While preventing duplicate discounts is an important statutory objective, a rebate model may inadvertently increase duplicate discount risk if claims data are incomplete or misaligned across Medicaid, managed care, and commercial payers. EHS currently maintains robust duplicate discount prevention controls, including: Medicaid Exclusion File oversight Carve-in/carve-out reconciliation processes Quarterly internal compliance audits Transitioning to a rebate model would require system redesign and increased resource allocation. Clear federal guidance, standardized data elements, and uniform reporting requirements will be essential to protect program integrity. V. Impact on Patient Care and Community Benefit 340B savings enable EHS to fund the following services: Regional Trauma Level I services Regional NICU Level IV services Medication Assistance Program Cancer Support Groups Community VolunTEENs summer programs Weight loss and Bariatric support/educational programs Well Women Early Detection Programs Stroke Camp Injury prevention education for adults and pediatrics Oncology Community Outreach Nurse Family Partnership Cardiology Compassion Closet program Safety and Health educational programs Smoke B Gone Clinic Childhood Health Eating and Active Living Center Childhood Cancer Survivorship Program Any disruption in rebate payments or increase in administrative costs would directly reduce resources available for these programs. VI. Recommendations If HRSA proceeds with a pilot program, EHS strongly recommends: 1. Limiting the pilot to the retail setting in a defined subset of medications impacted by the IRA 2. Establishing mandatory rebate payment timelines (e.g., 30 days). 3. Creating a centralized dispute resolution mechanism. 4. Providing covered entities with advance funding mechanisms during the pilot phase. 5. Requiring real-time transparency dashboards accessible to covered entities. 6. Collecting standardized metrics on: o Payment timeliness o Denial rates o Administrative burden o Net financial impact o Patient access outcomes EHS also recommends a phased implementation period of no less than 24 months. EHS appreciates HRSAs engagement with stakeholders on this important issue. While we support efforts to strengthen program integrity, EHS believes a rebate model poses significant operational, financial, and patient-access risks that must be carefully evaluated. EHS respectfully urges HRSA to ensure that any pilot program: Preserves the financial stability of safety-net providers Minimizes administrative burden Protects patient access to medications Includes transparent, enforceable safeguards EHS would welcome the opportunity to provide additional data or participate in stakeholder discussions. Re: Docket No. HRSA-2026-03042 Request for Information: 340B Renate Model Pilot Program to Health Resources and Services Administration U.S. Department of Health and Human Services Submitted By: Sarah Boutilier, Director of Pharmacy Business and Analytics Date: 04.07.2026 Erlanger Health System (EHS) is comprised of 1 Disproportionate Share Hospital, 2 Critical Access Hospitals, and 1 FQHC, which currently serves the underserved populations of Chattanooga and Hamilton County, TN at 4 locations. EHS serves approximately 1.5 million patients annually, including 14.63% of uncompensated care. As a group of covered entities participating in the 340B Drug Pricing since 1992, we rely on 340B savings to sustain critical services for vulnerable patient populations, preserving the presence of trauma Level 1/NICU level 4 care in the region. EHS supports HRSAs efforts to evaluate program integrity and operational feasibility. However, EHS has significant concerns regarding patient care implications of the transition from an upfront discount model to a rebate-based reimbursement structure. Administrative and Operational Impact Current 340B Operations EHS processes approximately 3.1 million 340B-eligible prescriptions annually. Our current annual administrative costs include: Split-billing software and IT systems 340B compliance staff Audit preparations and compliance consulting External auditing Projected Impact Under a Rebate Model Under a rebate model, EHS anticipates significant increases in administrative complexity due to: Claims-level rebate tracking Reconciliation of paid vs denied rebate claims Dispute resolution processes Increased reporting and documentation requirements EHS estimates significant operational cost increases due to: Additional FTEs IT system modifications, integration, and ongoing maintenance Vendor fees for rebate adjudication services The transition timeline alone would require a lengthy timeline and be an upfront additional cost to EHS. Cash Flow and Financial Stability The current upfront discount structure allows EHS to purchase medications at the 340B ceiling price at the time of acquisition, preserving working capital. For safety-net providers operating on thin margins, delayed rebate payments will likely: Reduce funds available for uncompensated care Delay expansion of clinical services Increase reliance on lines of credit EHS estimates potential annual interest or financing costs if short-term borrowing is required to bridge rebate delays. Risk of Rebate Denials and Disputes Unlike the current point-of-sale discount model, a rebate system introduces risk of: Rebate denials due to coding discrepancies Manufacturer-specific adjudication standards Delayed or partial payments Based on EHSs experience with other existing rebate programs, we anticipate an initial denial rate of approximately 35%, requiring additional reconciliation and appeal resources. Each denied claim is estimated to require approximately 30 minutes of staff time, equating to a significant increase in the workforce. The communication regarding proposed rebate models stated that the intention was to have no administrative burden or increased cost to the covered entities. This has not been realized with the current rebate structures. EHS strongly recommends that HRSA: Establish standardized denial codes Implement mandatory dispute timelines Require transparent manufacturer reporting Provide centralized oversight of denial patterns Duplicate Discount and Compliance Considerations While preventing duplicate discounts is an important statutory objective, a rebate model may inadvertently increase duplicate discount risk if claims data are incomplete or misaligned across Medicaid, managed care, and commercial payers. EHS currently maintains robust duplicate discount prevention controls, including: Medicaid Exclusion File oversight Carve-in/carve-out reconciliation processes Quarterly internal compliance audits Transitioning to a rebate model would require system redesign and increased resource allocation. Clear federal guidance, standardized data elements, and uniform reporting requirements will be essential to protect program integrity. Impact on Patient Care and Community Benefit 340B savings enable EHS to fund the following services: Regional Trauma Level I services Regional NICU Level IV services Medication Assistance Program Cancer Support Groups Community VolunTEENs summer programs Weight loss and Bariatric support/educational programs Well Women Early Detection Programs Stroke Camp Injury prevention education for adults and pediatrics Oncology Community Outreach Nurse Family Partnership Cardiology Compassion Closet program Safety and Health educational programs Smoke B Gone Clinic Childhood Health Eating and Active Living Center Childhood Cancer Survivorship Program Any disruption in rebate payments or increase in administrative costs would directly reduce resources available for these programs. Recommendations If HRSA proceeds with a pilot program, EHS strongly recommends: Limiting the pilot to the retail setting in a defined subset of medications impacted by the IRA 2. Establishing mandatory rebate payment timelines (e.g., 30 days). 3. Creating a centralized dispute resolution mechanism. 4. Providing covered entities with advance funding mechanisms during the pilot phase. 5. Requiring real-time transparency dashboards accessible to covered entities. 6. Collecting standardized metrics on: Payment timeliness o Denial rates o Administrative burden o Net financial impact o Patient access outcomes EHS also recommends a phased implementation period of no less than 24 months. EHS appreciates HRSAs engagement with stakeholders on this important issue. While we support efforts to strengthen program integrity, EHS believes a rebate model poses significant operational, financial, and patient-access risks that must be carefully evaluated. EHS respectfully urges HRSA to ensure that any pilot program: Preserves the financial stability of safety-net providers Minimizes administrative burden Protects patient access to medications Includes transparent, enforceable safeguards EHS would welcome the opportunity to provide additional data or participate in stakeholder discussions.
HRSA-2026-0001-0722Joann Bourque · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0723Steven Bouton · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0724Kimberly Bowker · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0725Barbara Bracali · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0726Cathy Bradbury · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0727James C Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0728Krista Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0729Lindel Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0730Matthew Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0731James Brady · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0732James C Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0733Krista Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0734Lindel Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0735Matthew Bradley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0736James Brady · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0737Paul Brady · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0738Emily Braga · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0739Camaron Bragg · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0740Edward Braillard · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0741Amber Brainard · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0742Wendy Brajcki · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0743Janice Bramblett · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0744Annette Bramlett · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0745Tianna Branch · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0746Tracy Brandwene · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0747Barbara Branham · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0748Catherine Branham · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0749Don Brooks · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0750Karen Brooks · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0751Yvonne Brooks Davidson · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0752Robert Brookshire · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0753Debby Brose · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0754Richard Brose · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0755Aaron Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0756Andy Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0757Ashley Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0758Cecile Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0759Diana Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0760Dorcas Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0761Dorothy Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0762Effren Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0763Elizabeth Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0764Evelyn Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0765Frank Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0766Heather Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0767Hollen Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0768Janette Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0769Jeanette Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0770Joseph Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0771Lakeva Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0772Latisha Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0773Leanne Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0774Leeroy Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0775Leon Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0776Lynette Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0777Mary Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0778Nellie Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0779Nicholas Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0780Nicole Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0781Roger Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0782Romunzo Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0783Shirlean Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0784Sue Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0785Tangie Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0786Todd Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0787Wanda Brown · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0788Zac Browning · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0789Michael Broyard · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0790Jennifer Brucculeri · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0791Michael Bruce · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0792Stephanie Bruce · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0793Alisha Bruck · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0794Kumara Brumfield · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0795Michelle Brumfield · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0796Ellen Brunelle · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0797Willie Bruner · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0798Bambi Brunt · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0799Yamilet Bruzual · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0800Angela Bryan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0801Joseph Bryan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0802Cleveland Bryant · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0803Gregory Bryant · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0804Tainia Bryant · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0805Torre Bryant · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0806Wendy Bryant · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0807Geoff Brzuchalski · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0808Monica Buchanan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0809Natasha Buchanan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0810Michelle Buchananfrost · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0811April Buchko · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0812Malgorzata Bucka · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0813Cathy Buckles · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0814Charlotte Buckley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0815Kelly Buckley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0816Stephen Buckley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0817Warren Bucklin · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0818Jennette Buckner · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0819Bobby Budhu · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0820Marge Buehler · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0821Betty Bueno · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0822Rosemary Bueno · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0823Dakota Buesing · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0824Denise Buie · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0825Anne Buith · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0826Sarah Bullwinkel · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0827Ernest Bumgarner · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0828Freddie Bunch · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0829Timothy Bunn · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0830Janice Bunting · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0831Jeffery Burch · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0832Thomas Burdick · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0833Kerry Burford · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0834Beverly Burgess · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0835Joan Burgess · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0836Solomon Burke · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0837Steven Burke · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0838Teena Burke · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0839Kelley Burkes · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0840Charmiskie Burkhalter · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0841Jeremy Burks · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0842Jeri Burks · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0843Letty Deanna Burleson · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0844Brenda Burnett · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0845Tracy Burney · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0846Colleen Burns · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0847Leon Burns · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0848Sharon Burns · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0849Andrew Burrell · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0850Shawnetta Burroughs · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0851Franklin Burt · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0852Diane Burton · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0853Ronnie Burton · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0854Walter Burton · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0855Darlene Buruato · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0856Cheree Busch · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0857Jason Busell · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-0858Rhonda Bush · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0859Braulio Bustamante · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0860Christian Butak · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0861Ladonna Butenhoff · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0862Adriene Butler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0863Andrew Butler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0864Daniel Butler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0865Michael Butler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0866Sheryl Butler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0867Kelly Butterbaugh · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0868Madeline Buzzo · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0869Alexis Byrd · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0870Kathy Byrd · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0871Marcelle Byrd · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0872Rebecca Byrd · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0873Tiffany Byrd · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0874Miguel Cabada · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0875Carmelito Cabale · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0876Gabriela Cabello · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0877Steve Cabral · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0878Francine Cabrera · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0879Jose Cabrera · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0880Lisana Cabrera · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0881Karen Cacho · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0882Joy Caciopoli · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0883Jose Cadena · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0884Evens Cadet · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0885Carmen Cadizsully · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0886Sarah Cain · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0887Michael Calderon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0888Michael Calixtro · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0889Michele Calkins · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0890Sandra Callahan · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0891William Callahan · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0892Marruby Callaway · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0893Lora Callicott · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0894Henry Calloway · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0895Mel Calvert · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0896Nathon Cammon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0897Cathy Campbell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0898Connie Campbell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0899Jasmine Campbell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0900Maryanne Campbell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0901Senead Campbell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0902Mario Campos · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0903Russell Cannon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0904Trenton Cannon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0905Cynthia Cantrell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0906Kasey Cantrell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0907Ryder Cantrell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0908Arturo Cantu · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0909Lori Capelle · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0910Sanghyon Cappiello · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0911Jed Carandang · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0912Linda Carbajo · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0913Pam Cardinal · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0914Maria Cardona · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0915Rachel Careau · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0916Martha Carelock · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0917Emily Carey · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0918Penny Carey · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0919Marija Carhart · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0920India Caribe · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0921Gerald Carillo · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0922Larry Carl · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0923Catheryn Carlson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0924Lillian Carlson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0925Maxwell Carlson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0926Richard Carlson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0927Tom Carlson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0928William Carlyle · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0929Michele Carmignani · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0930Grif Carnes · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0931Robert Carnes · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0932Salomon Caroline · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0933Varo Carolyn Hanna · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0934Cathy Carpenter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0935Courtney Carpenter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0936Demetria Carpenter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0937Jennifer Carpenter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0938Keashonna Carpenter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0939Roberta Carper · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0940Jme Carr · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0941Tammy Carr · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0942Juana Carranco · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0943Alfred Carraway · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0944Nicolas Carreno · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0945Dick Carretta · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0946Manuel Carrillo · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0947Courtney Carroll · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0948Estella Carroll · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0949Tristan Carroll · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0950Barbara Carson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0951James Carson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0952Lisa Carson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0953Antonnie Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0954Audrey Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0955John Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0956Lavon Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0957Michael Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0958Paulette Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0959Sonya Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0960Tina Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0961Yvonne Carter · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0962Louis Cartier · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0963Timothy Carver · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0964Patricia Casada · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0965Theresa Casares · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0966Gloria Casebolt · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0967Helen Casey · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0968Vickie Caskey · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0969Frank Casper · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0970Etta Cassell · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0971Jan Cassio · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0972Anna Castaneda · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0973Federico Castaneda · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0974Kenneth Castanon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0975Claire Castellano · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0976April Castle · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0977Jenny Casto · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0978Mariana Castrillon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0979Alfred Castro · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0980Javier Castro · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0981John Castro · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0982Ffry Catherine · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0983Larry Cato · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0984Kellie Catron · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0985Betty Cavin · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0986Cheryl Cebula · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0987Euceda Cecilia · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0988Maria Cedeno · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0989Mabel Ceja · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0990Jose Celaya · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0991Vincent Cenkner · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0992Alejandro Cervantes · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0993Fritz Cesar · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0994Lalita Chaitoo · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0995Carlton Chambers · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0996John Chambers · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0997Russell Champagne · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0998Jonathan Chan · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-0999Shuford Chandler · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1000Witkowski Chandra · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1001Pat Chaney · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1002Rhiannon Chaney · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1003Eve Chang · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1004Jon Chao · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1005Bryan Chapman · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1006Christopher Chapman · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1007Immanuel Charles · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1008Priscilla Charles · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1009Rosalyn Charles · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1010Algernon Chase · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1011Aruj Chaudhry · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1012Christina Chavarria · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1013Darren Chavez · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1014Eddie Chavez · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1015Jenny Chavez · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1016Rick Chavez · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1017Tyrone Chavez · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1018Arjun Chawla · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1019Whitbeck Chelsea · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1020Chihcheng Chen · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1021Debby Chenoweth · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1022Erica Chess · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1023Mira Choi · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1024Kelly Chon · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1025Mike Chorak · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1026Richard Chouinard · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1027Sandra Chriestenson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1028Dee Christenson · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1029Michelle Christian · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1030Ralph Christian · United States2026-04-07T04:00Z32 chars
duplicate of HRSA-2026-0001-0126
HRSA-2026-0001-1031Christina Christina Hoefflicker · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1032Karen Chronister · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1034Calvin Chun · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1035Arthur Church · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1036Patty Church · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1037Farias Cibelle · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1038Marie Cifatte · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1045Delia Clardy · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1046Albert Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1047Chaunae Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1048Craig Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1052G Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1056Mischel Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1060Sylvia Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1061Terrence Clark · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1069Elaine Clement · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1070Rick Clement · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1071Anne Clements · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1072Fitzgerald Clements · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1078Thomas Clinton · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1086Aaron Coalson · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1087Brian Cobb · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1088Kolten Cobb · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1089Dana Coble · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1090Elizabeth Cobuccio · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1091Oscar Cochran · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1092Henry Cockrell · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1093Deborah Coelho · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1094Ray Coffey · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1095Joseph Cogan · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1096Judith Cohen · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1097Anyura Cole · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1098Marilyn Caroline Cole · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1099Rachel Cole · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1100Rachel Cole · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1101Beverly Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1102James Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1103Jeffrey Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1104Lida Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1105Patricia Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1106Rose Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1107William Coleman · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1108Milton Coley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1109Cookeville Regional Medical Center2026-04-07T04:00Z27,352 chars
See attached file(s) COOKEVILLE REGIONAL MEDICAL CENTER It's the Way WeCARE 1 Medical Center Boulevard Cookeville, TN 38501 (931) 528-2541 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Cookeville Regional Medical Center in Cookeville, Tennessee we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Cookeville Regional Medical Center that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Cookeville Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Cookeville Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to subrnit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Cookeville Regional Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Cookeville Regional Medical Center to spend significant sums on new administrative costs. When 'we chose to participate in the 340B program, Cookeville Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. These costs stem from the need to track, validate, submit, reconcile, and appeal rebates at the claim level, functions that do not exist under the current 340B structure. Our estimated costs are as follows: Start Up Costs: Informatics Infrastructure and System Configuration o Build or modify split-billing software to track rebate-eligible claims at the NDC level o Develop interfaces between HER, pharmacy systems, wholesalers, and split-billing software o Estimated cost: $50,000 - $150,000 o Estimated labor: 400 - 800 IT hours TPA/Vendor Implementation Fees o Data feed setup for rebate submission and tracking o Custom reporting and claim level adjudication logic for rebate drugs o Estimated cost: $25,000 - $50,000 Policy Development and Staff Training o Develop SOPs for rebate tracking, reconciliation, and dispute management o Training pharmacy, billing, and finance teams o Estimate cost: $10,000 - $20,000 o Estimated labor: 150 - 300 hours Legal and Compliance Review o Review of manufacturer rebate agreements, dispute processes, and audit risk exposure o Estimated cost: $25,000 - $50,000 Ongoing (Annual) Costs Dedicated staff o The rebate model introduces a continuous need for claim-level management 2 o Need: 4 new FTEs for a pharmacy analyst, finance specialist, reconciliation and denial coordinator, and 340B manager o Responsibilities would include claim identification, submission, tracking, reconciliation, and denial management o Estimate cost: $300,000 - $400,000/year TPA and Vendor Fees o Increased per claim processing fees o Additional modules for rebate tracking and reporting o Estimated cost: $25,000 - $50,000/year Audit & Compliance Burden o Increased potential for audit and therefore internal audit preparation o Documentation retention and validation o Estimated Cost: $25,000 - $50,000/year Cash Flow o Delayed realization of 340B savings o Increased working capital requirements o Estimated financial impact: $250,000 - $500,000 Cookeville Regional Medical Center firmly believes that the costs to meet the requirements of the rebate model for the 25 drugs would outweigh the savings earned from these drugs resulting in not only a loss of savings but an actual increase in costs. Staffing Impacts Under a Potential 340B Rebate Program. Cookeville Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. Implementation of a 340B rebate model would require both the addition of new full-time employees (FTEs) and the reallocation of existing staff away from patient care and core operational responsibilities. The administrative complexity of tracking, submitting, reconciling, and appealing rebates at the claim level cannot be absorbed within current staffing models. Need for Additional FTEs and Staff Reallocation 3.0 net new FTEs dedicated specifically to rebate operations 1.0 FTE equivalent in reallocated time from existing staff (pharmacy, billing, and finance) Impact on current staff: Pharmacists, pharmacy technicians, and revenue cycle staff would need to divert time from: Medication verification and dispensing oversight Clinical initiatives and patient care activities Existing 340B compliance and audit readiness 3 This diversion creates both operational strain and potential patient care impact, particularly in resource-limited settings. Roles, Responsibilities, and Hiring Timeline 340B Rebate Program Analyst (2.0 FTE) o Identify rebate-eligible claims across all dispensing locations o Ensure accurate data capture (NDC, payer, patient eligibility) o Submit rebate requests to manufacturers or TPAs o Maintain documentation for compliance and audit readiness Reconciliation & Revenue Cycle Specialist (1.0 FTE) o Track expected vs. received rebate payments o Investigate discrepancies and underpayments o Manage denial workflows and appeals o Coordinate with finance on cash flow tracking IT/Systems Support (1 FTE, often shared) o Maintain data interfaces between EHR, pharmacy systems, and TPA platforms o Troubleshoot data integrity issues affecting rebate eligibility Estimated Hiring Timeline Minimum 3-6 months advance notice would be required to: o Recruit candidates with 340B expertise (a limited talent pool) o Train staff on new workflows and systems o Build and validate operational processes before go-live Without adequate lead time, organizations would face significant compliance risk and financial loss due to missed or inaccurate rebate submissions. HRSA's estimate of 5 hours per week for managing rebates across up to 25 drugs significantly understates the operational reality. Based on current 340B program experience and analogous rebate processes, this estimate does not reflect the multi-step, labor-intensive nature of rebate administration. Key Reasons the Estimate is Unrealistic Claim-Level Complexity o Each eligible prescription must be: I Identified at the NDC level I Matched to payer and patient eligibility I Validated against exclusion criteria Even a modest volume (e.g., 20-50 claims per day across 25 drugs) quickly scales beyond a few hours per week Rebate Submission Process 4 o Unlike upfront discounts, rebates require: Manual or semi-automated submission processes Data formatting and validation Tracking submission status Estimated time: 10-20 hours/week alone Reconciliation Requirements o Each rebate must be reconciled against expected payment: Underpayments and missing rebates must be identified Payment timelines vary by manufacturer Estimated time: 10-15 hours/week Denial Management and Appeals o Rebate denials are expected due to: Data discrepancies Manufacturer-specific requirements Each denial requires investigation, documentation, and resubmission Estimated time: 5-10+ hours/week, depending on denial rates Compliance and Audit Readiness o Documentation must be maintained for: HRSA audits Manufacturer disputes Estimated time: 5-10 hours/week Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Cookeville Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Implementing a 340B Rebate Model would require significant upgrades and new infrastructure, as current systems are built for upfront discountsnot claim-level rebate processing. Key required changes include: Split-billing system enhancements to identify rebate-eligible drugs at the NDC level and differentiate by payer and site of care New data aggregation capabilities to combine pharmacy, medical claims, and patient eligibility data Custom interfaces between the EHR, pharmacy systems, and third-party administrators (TPAs), as most TPAs lack direct EHR integration Rebate tracking tools to manage submissions, monitor payments, and reconcile discrepancies Expanded reporting capabilities for compliance, audit support, and financial tracking Estimated IT Costs 5 One-time costs: System development and integration: $150,000 - $300,000 Split-billing upgrades: $50,000 - $100,000 Data warehouse/reporting build: $75,000 - $150,000 Total one-time: $275,000 - $550,000 Ongoing annual costs: o TPA/vendor fees: $50,000 - $125,000 o IT support and maintenance: $40,000 - $100,000 o Data infrastructure: $15,000 - $40,000 o Total recurring: $105,000 - $265,000 annually Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our organization currently collects and maintains 340B-related data through a combination of internal systems and third-party administrators (TPAs). Key data elements include: Pharmacy dispensing data (NDC, quantity, date of service) Patient eligibility and encounter data from the EHR Payer information and limited claims-level data Purchase and inventory records from wholesalers A TPA is used to support: Split-billing and accumulation logic Contract pharmacy claim identification Basic reporting and audit support Internally, we maintain responsibility for: Data validation and audit readiness Policy oversight and compliance monitoring Periodic internal audits and HRSA audit preparation Importantly, current processes are designed around retrospective eligibility determination and upfront discounts, not real-time, claim-level rebate submissions. A 340B rebate model would fundamentally change our data collection activities, introducing both new data requirements and new processes. These changes would be: Ongoing, not one-time, due to continuous claim submission, reconciliation, and dispute resolution 6 New requirements would include: Capturing and validating complete claim-level data for each eligible transaction Tracking payer-specific information (e.g., Medicare eligibility) with greater precision Maintaining submission-ready datasets for manufacturers Supporting rebate reconciliation and audit trails To meet rebate data requirements, we would need to pull and integrate information from multiple internal systems, including: Electronic Health Record (EHR) patient and encounter data Pharmacy dispensing systems drug and NDC-level detail Billing/claims systems payer, adjudication, and reimbursement data TPA platforms - 340B eligibility determinations These systems are not fully integrated, and TPAs typically do not have direct access to complete medical claims data. As a result: Data must be manually extracted, matched, and validated across systems Staff must resolve discrepancies (e.g., mismatched NDCs, payer classification issues) Data must be reformatted to meet manufacturer or TPA submission requirements This introduces a significant ongoing manual workload, not currently required under the upfront discount model. The assertion that required data is already being collected and shared (e.g., via 340B ESP or existing vendor relationships) and therefore would not impose significant burden is not accurate. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Cookeville Regional Medical Center in Cookeville, Tennessee to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A rebate-based model would materially and negatively impact our cash flow by requiring us to front the full wholesale acquisition cost (WAC) of drugs and wait for reimbursement. Under the current 340B model, we receive upfront discounts, which are predictable and immediately realized. A rebate model shifts that burden to the hospital, effectively requiring us to finance drug manufacturers. We do not maintain excess cash reserves to reliably absorb this shift without operational strain. Even short delays or partial denials would create cash flow volatility, particularly given the high cost of specialty medications included among the 25 negotiated drugs. This introduces real financial risk, including potential pressure on: Days cash on hand and liquidity ratios 7 Debt service coverage requirements As a result, a rebate model could place us at risk of violating bond covenants or other financial agreements, particularly if rebate payments are delayed, denied, or disputed. The assumption that rebates would be received before wholesaler invoices are due is not realistic: Wholesaler payments are typically due within 15-30 days Rebate submission requires data validation, formatting, and transmission, which itself introduces delays Manufacturers may take additional time to review, approve, or deny claims Even under a proposed 10-day payment window, this does not account for: Time required to compile and submit complete and accurate data Back-and-forth communication for rejected or incomplete submissions Variability in manufacturer processing and payment systems In practice, payments would not consistently be received before invoices are due, creating a timing gap that negatively impacts cash flow. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Cookeville Regional Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. As a result of these added burdens, our hospital will be forced to redirect limited resources away from patient care and into administrative functions, which will have real consequences: Reduced funding for patient assistance programs, including medication access support for uninsured and underinsured patients Scaling back outpatient clinical services, particularly those that operate at a loss but are supported by 340B savings Reduced investment in care coordination, population health, and chronic disease management programs Potential reduction in specialty pharmacy and infusion services, particularly for high-cost drugs with delayed reimbursement Limitations on expanding community-based clinics or outreach programs Delays or cancellation of capital and clinical improvement projects, including technology upgrades and service line expansions These are not theoretical impactsthese are the exact areas 340B savings are currently used to sustain. 8 Additionally, the uncertainty surrounding a potential rebate program has already impacted financial planning, requiring more conservative budgeting and limiting our ability to confidently invest in new initiatives. Cookeville Regional Medical Center serves a significant Medicare and Medicaid population, as well as patients from surrounding rural communities with limited access to care. In many cases, our hospital serves as a primary access point for specialized services in the region, meaning reductions would have a broad regional impact, not just within our immediate community. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Cookeville Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Cookeville Regional Medical Center has long relied on the predictability and immediacy of upfront 340B discounts when designing our financial and operational strategies. These savings are not treated as incidentalthey are fully integrated into our budgeting, cash flow management, and long-term planning. Specifically: Annual Budgeting: 340B savings are incorporated into our operating budget each year and are used to offset losses from essential but under-reimbursed services, particularly those serving Medicare and Medicaid populations. Cash Flow and Liquidity Planning: Because savings are realized at the point of purchase, they are reflected in our days cash on hand projections and working capital planning. This predictability allows us to maintain financial stability while continuing to serve a high proportion of vulnerable patients. Service Line Support: 340B savings are directly used to sustain infusion services, oncology care, and outpatient programs that would otherwise operate at a financial loss. Capital and Strategic Projects: We rely on these savings to support facility improvements, equipment purchases, and expansion of community-based services, including outpatient access points and care coordination programs. 9 Third-Party and Operational Infrastructure: Our contracts with TPAs, wholesalers, and internal staffing models have all been built around an upfront discount framework, not a delayed rebate system. A shift to a rebate model would disrupt these established financial assumptions, introducing uncertainty in both timing and amount of savings. This would directly impact our ability to plan and invest in patient care, forcing more conservative financial strategies and potentially delaying or eliminating key initiatives. Importantly, our reliance on upfront discounts is not only reasonableit is based on decades of consistent program operation. Transitioning to a rebate mechanism would undermine these settled expectations and impose significant financial and operational instability, without any demonstrated need to change the current model. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. During the initial rollout of the 340B Rebate Program, our organization began onboarding with the Beacon platform and quickly identified significant concerns despite the limited preparation window. Key Issues: Terms and Conditions: Beacon placed disproportionate liability on covered entities and lacked clarity around data ownership and permitted use, raising legal and compliance concerns. Shifting Data Requirements: Data submission requirements were unclear and frequently changing, often requiring information from multiple internal systems and creating ongoing rework and risk of errors. Customer Support Challenges: Support was slow and inconsistent, with unclear guidance and no defined escalation process, making implementation difficult. Recommendations Stable, standardized data requirements established in advance Strong privacy protections, including required BAAs and Data Use Agreements Balanced legal terms that do not shift undue risk to providers Reliable support with defined service levels Transparency in how data is used and validated Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP 10 pricing. Given the tremendous costs that a rebate mechanism will impose on Cookeville Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date, no drug manufacturer has raised a 340B/MDPNP duplicate discount concern with our organization that required implementation of a rebate-based solution. Existing safeguards and processes have been sufficient to prevent and address any potential overlap, without the need for a fundamentally different payment model. We currently manage deduplication through a combination of: Split-billing software and TPA oversight to ensure accurate 340B eligibility determinations Payer-level identification and exclusion logic, particularly for Medicare claims Standard, contract pharmacy safeguards, including data sharing mechanisms used to prevent duplicate discounts These processes are well-established, automated where possible, and integrated into existing workflows. Any potential discrepancies can be identified and resolved retrospectively without significant operational burden. Our current approach has been effective and far less burdensome than a rebate model would be: Deduplication today is handled through targeted data validation and existing system logic, not continuous claim-level financial reconciliation It does not require new staffing, complex data submissions, or ongoing dispute management Issues, when they arise, can be addressed directly and efficiently without disrupting cash flow In contrast, a rebate model would: Introduce significant administrative complexity and cost Require manual data aggregation across multiple systems Create cash flow risk and payment uncertainty Add layers of reconciliation and denial management that are unrelated to actual deduplication needs 11 We support the use of a third-party clearinghouse model as a more practical and less burdensome alternative. A clearinghouse could: Facilitate prospective or near real-time identification of potential duplicate discounts Leverage existing data flows without requiring full rebate infrastructure Maintain program integrity without shifting financial risk to covered entities For all of these reasons, Cookeville Regional Medical Center in Cookeville, Tennessee respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Cookeville Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Marilyn "Buffy" CEO Cookeville Regional Medical Center Cookeville, Tennessee 12
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HRSA-2026-0001-1172Spartanburg Medical Center2026-04-07T04:00Z9,367 chars
See attached file(s) April 7, 2026 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Dear Administrator Engels: On behalf of Spartanburg Medical Center, a division of Spartanburg Regional Healthcare System (SRHS), we appreciate the opportunity to submit comments in response to HRSAs Request for Information regarding a potential 340B Rebate Model Pilot Program. While we understand HRSAs interest in evaluating alternative approaches to effectuating the 340B ceiling price, we strongly oppose any move away from the longstanding upfront discount model that has anchored the 340B program for more than three decades. These comments reflect both the operational realities of a large, integrated safety-net health system and our direct experience administering a clinically embedded, highly compliance-conscious 340B program. Consistent with our 2024 SUSTAIN 340B Act RFI response, this letter focuses on pragmatism, accountability, and, most importantly, the downstream impact of policy changes on our patients and communities. Spartanburg Medical Center and Our 340B Program Spartanburg Medical Center is a 747 bed research and teaching hospital, designated as both a Disproportionate Share Hospital and Sole Community Hospital, and has participated in the 340B program as a covered entity since 2014. As part of SRHS, a self-funded political subdivision of the State of South Carolina that receives no local tax dollars, our organization delivers care across multiple acute care hospitals, an employed physician network, post acute services, and the Gibbs Cancer Center & Research Institute. From a pharmacy perspective, SRHS operates inpatient pharmacy services, outpatient infusion pharmacies, ambulatory care pharmacy services embedded directly within clinics, and a system owned retail and specialty pharmacy network of four pharmacies that serve both urban and rural communities. These services were intentionally designed around the upfront 340B discount model, allowing pharmacy operations to be clinically integrated into care delivery and aligned with patient access needs at the point of care. The predictability and immediacy of upfront 340B pricing is foundational to how these services function to serve our patients. A Rebate Model Undermines the Purpose of 340B The statutory purpose of the 340B program is explicit: to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate based construct runs counter to this purpose by redirecting limited resources away from patient care and toward administrative processing, cash flow management, and dispute resolution. Unlike the upfront discount model, a rebate approach would require covered entities to purchase drugs at full Wholesale Acquisition Cost (WAC), finance the price differential while awaiting reimbursement, and absorb the real and significant risk of delayed, denied, or disputed rebate payments. For safety net hospitals operating on narrow margins, this is not a technical adjustment, it is a fundamental shift in financial risk that directly threatens patient services. Administrative and Operational Burdens Our 340B program was built based on decades of consistent agency practice applying discounts at the point of sale. A rebate model would force the creation of an entirely new administrative infrastructure, including expanded staffing, new IT and data exchange capabilities, additional compliance oversight, legal review, and reliance on expensive third party vendors. These burdens are neither speculative nor temporary. They represent recurring costs that permanently erode the value of the 340B program. Even a limited pilot would require parallel systems, increase audit and compliance risk, and divert staff time away from clinical and patient facing functions, without delivering any corresponding benefit to covered entities or patients. Stated plainly, the rebate model will stand to only decrease the overall net value of the program to patients. We have already seen material disruption of our program first hand through a series of egregious errors from 340BESP, the peer application to Beacon which was to be used to execute the rebate model pilot. We have seen manufacturers creating their own policies and arbitrary rules around which entities can and cannot access the discounts upfront. Once they essentially have a grip on the savings in the form of a rebate, they will undoubtedly continue to make non-standardized changes to how that savings is, or is not, paid back to covered entities. Additionally, we have seen the cash flow impact of the new Medicare Drug Price Negotiation Program (MDPNP), and the delays that Beacon is adding to that process with a insincere good faith inquiry process that seeks to deny refunds if their opaque system thinks a drug might have been purchased through 340B channels. Cash Flow Disruption Creates Direct Risk to Patient Care Under the existing model, 340B savings are realized immediately and reinvested directly into patient care. At SRHS, those savings support access to high cost oncology therapies, infusion services delivered close to home, bedside prescription delivery at discharge, medication assistance programs, and pharmacy access for rural patients who otherwise face significant geographic and financial barriers. During the past fiscal year our pharmacies provided 4,000 deliveries to patients in our rural communities at no cost to the patient. A rebate model would instead require covered entities to function as interest free lenders to drug manufacturers, creating cash flow volatility that complicates budgeting, liquidity management, and long term planning. Even modest reimbursement delays could affect our ability to consistently stock specialty and oncology medications and maintain clinically integrated pharmacy services across the continuum of care. Community Impact: Reduced Access Is the Inevitable Outcome Any erosion of 340B savings translates directly into reduced patient access. For our communities, this would mean fewer resources to support medication affordability at hospital discharge, diminished access to specialty pharmacy services embedded within oncology and chronic disease clinics, and increased reliance on outside pharmacies that may be geographically distant or operationally disconnected from a patients care team. These impacts would be felt most acutely by rural, uninsured, and underinsured patients, the very populations the 340B program was designed to protect. Reliance Interests Are Reasonable and Longstanding HRSA has asked whether covered entities reliance on upfront discounts is reasonable given the Secretarys authority to permit discounts via rebate or discount. Respectfully, this question overlooks decades of settled policy. Since the inception of the 340B program, HRSA has consistently implemented the statute through upfront pricing. Spartanburg Medical Center reasonably relied on this stability when making long-term investments in pharmacy infrastructure, clinical integration, staffing models, contractual arrangements, and financial planning tied directly to patient facing services. Absent evidence that the upfront model has failed, disrupting these reliance interests, even through a pilot, is unjustified. Rebate Models Are Not Necessary for Program Integrity Manufacturers already possess viable, lawful mechanisms to address concerns related to Medicaid duplicate discounts and Medicare Drug Price Negotiation Program non duplication. To the extent additional safeguards are warranted, they should be pursued through less burdensome alternatives, such as a neutral third party (non-PhRMA sponsored) clearinghouse, rather than by shifting cost and risk onto covered entities. Our experience does not indicate systemic deduplication failures that would justify a wholesale redesign of the 340B pricing mechanism. Recent Judicial Findings Reinforce the Need for Caution Recent judicial findings pausing implementation of the prior rebate pilot underscore the importance of fully evaluating the operational and financial harm to covered entities before pursuing any rebate-based construct. Any future policy must carefully account for these real world impacts. Conclusion and Path Forward For these reasons, Spartanburg Medical Center respectfully urges HRSA to abandon the concept of a 340B rebate model pilot and preserve the upfront discount framework that has enabled the program to function effectively for more than 30 years. Policies that dilute the value of 340B savings will inevitably diminish access to care for the patients and communities the program exists to serve. We appreciate HRSAs commitment to stakeholder engagement and stand ready to work collaboratively on solutions that strengthen program integrity without destabilizing the safety net infrastructure Congress intended the 340B program to support. Sincerely, Spartanburg Medical Center A Division of Spartanburg Regional Healthcare System
HRSA-2026-0001-1173Sunrise Community Health2026-04-07T04:00Z50,279 chars
See attached file(s) gas sunrise COMMUNITY HEALTH TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Sunrise Community Health Center DATE: Apr. 7, 2026 RE: Comments on HRSA's Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 At Sunrise Community Health we are committed to providing affordable access to quality care for all. We believe that healthy people create healthy communities, and we strive to deliver the right care, at the right time and at the right cost. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our 2 onsite and 1 contract pharmacies. The 340B program is foundational to my organization's ability to serve the most vulnerable members of my community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in my community and nationwide. Sunrise Community Heath, and others across the country, would face staggering, detrimental impacts if the rebate model were to go into effect: Sunrise Community Health would see an average loss of 13% from entity-owned pharmacy services and a 13% reduction in savings from our contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. We expect our upfront pharmacy costs to increase by 13% due to a rebate model, pulling dollars away from direct patient services, including behavioral health, oral care, primary care, and pharmacy. We further expect the administrative costs to apply for and track the rebates to cost my organization 1.0 FTE and $50,000, which will further strain our ability to serve our patients. For Sunrise Community Health Center, this financial turmoil and undermining of Congressional intent of the program to "stretch scarce Federal resources as far as possible"1 means directly and negatively: 1 18 340B House Report Legislative History. H.R. REP. 102-384(11). Impacting the 10,186 patients who accessed affordable or free medications through our participation in the 340B program Increasing the administrative costs by $50,000 for our 340B program Impeding my organization's ability to provide Medication Therapy Management (MTM) services provided through Sunrise in-house pharmacies, hospital discharge medication reconciliation conducted by pharmacists to reduce medication errors and hospital readmissions, expansion of in-house pharmacy services at major clinic Iocations to improve medication access, adult immunization services provided through pharmacy staff, hiring of pharmacy assistants and insurance prior authorization specialists to improve medication access and reduce delays in therapy, pharmacy student rotations and mentoring programs, supporting workforce development in underserved communities, medication Assisted Treatment (MAT) programs, including patient education and clinical case review, opioid Oversight Committee activities, including patient education and safety monitoring, hepatitis C treatment programs, including patient education, clinical review, and treatment coordination, hiring case managers to support patient care in the following areas (Opioid treatment programs, hepatitis C care coordination, Medication Assisted Treatment (MAT)), Diabetes education programs, hypertension management programs and coordination of specialty services including (Pain Management, podiatry care) to our 10,186 patients. Sunrise Community Health Center requests the Health Resources and Services Administration (HRSA) exempt all CHCs, from any proposed 340B rebate model, including the one under consideration in HRSA's Request for Information (HHS Docket # 2026- 03042). We oppose any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or burdens to the 340B program. Sunrise Community Health Center already had effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the program's intent and the fundamental responsibility of HRSA and HHS to administer this program in the interest of eligible Americans, and the nonprofit, local, trusted community providers who serve them. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is infeasible for my organization, and likely many others, to respond individually to each question. Therefore, we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. RFI Tarqet Area 1: Costs to Covered Entities Financial impacts It is difficult to understate the cost to Sunrise Community Health Center if we are forced to administer our 340B program through a rebate model due to the lack of detail on exactly which drugs would be included. As a proxy, in in 2025, if Sunrise Community Health Center had purchased the same volume of the ten drugs currently part of the Medicare Fair Price (MFP) drugs without the 340B discount, purchasing at the Wholesale Acquisition Cost (WAC) would have increased upfront costs by 422%. Given that HRSA has not determined or announced the drugs in this potential 340B rebate model pilot program, the expected dollar increase in upfront cost that my CHC will have to account for may rise substantially, if and as more drugs are added to a 340B rebate model. To cover the upfront cost of purchasing drugs and operationalizing the rebate model, Sunrise Community Health Center anticipates needing to consider: Scaling back our non-revenue-generating, but essential, clinical services, like our Medication Therapy Management (MTM) services provided through Sunrise in-house pharmacies, hospital discharge medication reconciliation conducted by pharmacists to reduce medication errors and hospital readmissions, expansion of in-house pharmacy services at major clinic locations to improve medication access, adult immunization services provided through pharmacy staff, hiring of pharmacy assistants and insurance prior authorization specialists to improve medication access and reduce delays in therapy, pharmacy student rotations and mentoring programs, supporting workforce development in underserved communities, medication Assisted Treatment (MAT) programs, including patient education and clinical case review, opioid Oversight Committee activities, including patient education and safety monitoring, hepatitis C treatment programs, including patient education, clinical review, and treatment coordination, hiring case managers to support patient care in the following areas (Opioid treatment programs, hepatitis C care coordination, Medication Assisted Treatment (MAT)), Diabetes education programs, hypertension management programs and coordination of specialty services including ( Pain Management and podiatry care) Reducing our clinic hours weekly, which impacts access to care for our patients who juggle long work hours and may only be able to come in for care during extended hours or weekends, Diverting support staff and funds away from our clinical staff to manage the rebate model, or Reducing the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities. It is incomprehensible to impose a rebate model on local, nonprofit CHCs when two-thirds of CHCs in Colorado had negative or breakeven financial operating margins in 2024 and 2025 and it is anticipated a similar number of CHCs will face this financial challenge in 2026. As CHCs, we currently rely on our statutorily allowed savings from the 340B program to fill this gap and make us closer to whole; the burden of a rebate model will exacerbate these financial difficulties and, ultimately, will be insurmountable for my organization, and likely others across Colorado. Pricinq impacts 3 By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within our HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact Sunrise Community Health Center ability to offer patients steeply discounted medications at the point-of-sale by requiring us to purchase medications at the WAC pricing. We currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems are continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate the drug's price for the patient. The rebate model generates uncertainty about its impact on my CHC's ability to offer sliding fee discounts at the point of sale and forces us to estimate discounts without knowing whether or when a rebate will be paid. This exposes us to financial loss if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced, Colorado's Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCS must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi- billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions my organization made in the most recent fiscal year, this is an incomplete request: HRSAwill not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs, like Sunrise Community Health Center, have on it by solely asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to my organization and patients, while we had 161,049 340B transactions with 173 of pharmaceutical manufacturers in 2025, my CHC was able to provide 10,186 patients with 161,049 prescriptions at $5,916,536.64. Through the 340B program, those patients were able to access $14,681,382.36 in savings; for many of my patients, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. 2 42 U.S. Code 254b(k)(3)(G)(i) 4 The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be disproportionately affected. CHC patients rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, our patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. If a rebate model goes into effect, my pharmacy will need to evaluate the possibility of evolving our drug purchasing practices. With the expected upfront cost equating to the drug's WAC, it will not make fiscal sense to maintain a stock of certain medications. Sunrise Community Health Center has considered shifting to purchase drugs only after the prescription has been made by the patient's provider, requiring that patient to return to the clinic or their local pharmacy to pick it up. This fundamentally shifts CHCs away from the same day model of care we currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model would require that would force our patients to return to the clinic or local pharmacy multiple times a week to pick up their prescription(s) is simply an unconscionable barrier and burden Imposing a rebate model on CHCs would only serve to weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, particularly those who are low-income and have insurance with high co-pays or deductible or are uninsured, further limiting their options for affordable care. Staffinp impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be harmful and burdensome. Sunrise Community Health Center currently employs the equivalent of 2.5 FTE of pharmacy, financial, IT, 340B coordinator to manage our 340B program currently, at a cost of $334,000 per year. To sufficiently and appropriately track the submission of the data and 5 the receipt of rebates across our in-house and contract pharmacies would require the hiring of at least 1 of FTE, further compiling onto our anticipated annual increase in costs. For every FTE we must hire to balance the program, we will no longer be able to fund patient support roles, like community health workers. Across Colorado, CHCs have the shared concern that a rebate model would require more staff time and administrative cost than current 340B program management; CHCs estimated that managing a rebate model would require the hiring of additional staff to adequately manage, though many of these CHCs also are struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every hour that one of my pharmacists spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care our patients depend on. This diversion of time and resources is not a minor inconvenience for Sunrise Community Health Center to navigate: it is a structural undermining of the care model that we depend on to serve our community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. Sunrise Community Health Center will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already- strained operational capabilities. Sunrise Community Health Center will have to hire 1.0 FTE for this increased burden. Managing the rebate model would require significant changes to my CHC's pharmacy software and third-party administrator workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard notifications, and design new, internal workflows; $50,000 will be required to simply reach to baseline of compliance before a single rebate is ever received. Additionally, beyond implementation, third-party administrator and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be permanent, recurring costs that further diminish our 340B savings. For CHCs, like mine, that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide real-time, accurate information at the pharmacy counter, including updating our electronic health record and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring our organization to account for 6 high upfront cost increases to pay software vendors for custom API builds and price file reconciliation tools. Additionally, for CHCs like mine, that contract with pharmacy partners, the rebate model threatens the very existence and possibility of these contract arrangements. We currently contract with 1 contract pharmacies, and it is likely that our third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to us, the covered entity, through increased per- claim fees. This number of contract pharmacies we partner with further compiles the number of rebate pathways our pharmacy staff need to track in order to ensure rebates are paid correctly and timely. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility our contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patients options of accessible, affordable locations to access their medications, particularly in rural communities. This would further harm our patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. Sunrise Community Health Center can estimate that the total projected increase in expenses, solely to manage a rebate model, including labor, IT, and carrying costs, is estimated at 100,000 annually. RFI Tarqet Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities Sunrise C is very concerned by potential cash flow issues of the proposed rebate model. This is linked to the model requiring upfront purchase of the drugs, how quickly a rebated could be requested, and possible denials. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that Sunrise Community Health Center must forgo discounts or face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should we negotiate with wholesalers or banks to increase our borrowing limit. Sunrise Community Health Center relies on these discounts and terms outlined in contracts with our wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers are actively advising CHCs to seek loans. 7 We are also concerned that the rebate model will cause Sunrise Community Health Center to lose non-340B discounts we currently receive, which lower our drug spending significantly, including: 6 Loss of sub-ceiling discounts, which reduced the net cost of the ten pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate "sub-ceiling" discounts on 340B drugs on behalf of covered entities, like CHCs. By allowing a rebate model, HRSA thus eliminates the possibility forApexus to negotiate discounts on the ten drugs that would likely be included in the pilot program, effectively transferring this discount from CHCs and their patients to the pharmaceutical manufacturer. Loss of prompt payment discounts, which lower CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a "prompt payment" discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced "Cost of Goods Sold" discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. RFI Tartlet Area 3: Rebate Denials Every dollar my organization pays upfront at WAC is a dollar that remains frozen in the manufacturer's reconciliation system. It is a dollar that my organization cannot rely on to provide health care services to my patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain our drug supply is not just unethical; it creates an environment of clinical instability with direct patient impacts. In our community, where the patients we serve rely on us to access care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to our community's safety net and our patients' health. If we are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. Sunrise Community Heath Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the 8 MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. If a rebate is denied, my CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative 5% denial rate would result in a net annual loss of $257,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Neqotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We respectfully request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program i nteg rity. Rebate delays and lack of enforcement languaqe While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. 9 Any delay beyond the 10-day window creates an immediate cash flow crisis. We are particularly worried that the need to purchase drugs at full WAC will cause us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. We have concerns about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Beacon Channel Management's Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, we are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacon's technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and 10 the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts and the Medicaid rebate routes to the state, as required by state statute. CHCs, like mine, maintain up-to-date profiles in the Office of Pharmacy Affairs Information System (OPAIS), so our number of in-house and contract pharmacies are accurate. Additionally, we submit a modifier on each Medicaid claim, so the rebate is appropriately and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in our agreements with our third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. For Medicare, CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries on how to address the findings. Since Jan. 1, 2026, while we understand that manufacturers' investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reportinq Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress...constrained the [Health and Human Services] Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."3 We believe that Congress did not intend to protect manufacturers or PBMs from 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 11 their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. The 340B statute's design reflects Congress's intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers Manufacturers should be required to report the percentage of denied claims with a detailed explanation for why the clairn was denied As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSA's statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. 4 Kaideros, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 12 RFI Tarqet Area 7: 340B Proqram Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers "stretch scarce Federal resources as far as possible," and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute': historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: we are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. Leqal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, https://www.commonwealthfund.org/publications/explainer/2025/auq/340b-druq-pricing-program-how-it-works-and-why-its- controversial 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxp.orq/wp-content/uploads/2026/01/CSRXP-Marqin-Analvsis-Chart.pdf 13 including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: "The Committee bill does not specify whether 'covered entities' would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of 'covered entity.'" The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. H.R. REP. 102-384(11) 14 When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Act's statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinqhouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot "to address 340B and MFP deduplication" can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more 15 than three decades and is essential to CHCs' participation in the program and, most importantly, protect patient access to affordable medications. We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for Sunrise Community Health Center as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions or would like to know more about how Sunrise Community Health Center uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to Charles Countee at ccountee.sunrise@nocoha.org. Mitzi M Moran Chief Executive Officer rh i cYfr' -- 16
HRSA-2026-0001-1174Optimus Health Care, Inc.2026-04-07T04:00Z13,086 chars
See attached file(s) April 6, 2026 Ms. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Optimus Health Care, Inc. (Optimus), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Optimus posed by the proposed rebate model. The 340B program is foundational to Optimus ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize Community Health Centers (CHC) pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million. For Optimus, we estimate an increase in upfront drug purchasing costs of approximately $7M$10.7M annually, representing a 300%400% increase over current 340B purchasing levels. Projected Cost Increases: Optimus anticipates significant increases in operational costs, including $750,000$2M annually in additional staffing, IT, and administrative expenses. Rural Health Center Breakdown: While Optimus is not a rural CHC, we experience similar access challenges, including transportation barriers that significantly impact patients' ability to obtain medications. Optimus is a Federally Qualified Health Center operating 24 sites across 3 cities covering 20 square miles. Optimus serves over 38,000 unique patients annually resulting in 180,000 visits. Our patient population is highly vulnerable, with 60% covered by Medicaid and 15% uninsured. We provide fully subsidized care, including medications, for approximately 3,000 patients experiencing homelessness. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve patients. For Optimus in particular, these funds directly support our sliding fee discount program, which ensures access to care regardless of a patients ability to pay, as well as critical wraparound services such as transportation, language access, care coordination, and connections to stable housing and nutritious food. Without this support, many patients will face significant barriers to accessing even basic care. A reduction in 340B funding will also necessitate staffing cuts, further constraining access. We estimate that approximately 3,400 patients will experience reduced access to affordable, high-quality medical, dental, and behavioral health services, resulting in a loss of nearly 10,000 visits annually. These visits are for essential care that will go unmet or be deferred. As access diminishes, patients will be forced to seek care in higher-cost settings such as emergency departments, driving up overall healthcare costs while worsening continuity of care. Additionally, many of our highest-need patients will lose access to free or deeply discounted medications, further exacerbating chronic conditions and avoidable complications. The cumulative effect of these changes will be a measurable decline in health outcomes for our patients, an outcome the 340B program was designed to prevent. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that Optimus serves. Our patient population includes individuals with diabetes, cardiovascular disease, and those served through the Ryan White program. These populations rely heavily on affordable medications to manage chronic conditions. Any disruption in access will result in increased hospitalizations, treatment delays, and adverse outcomes. Administrative Complexities and Financial Challenges for CHCs The proposed rebate model will create significant administrative burdens. Optimus anticipates needing at least 1 additional FTE to manage rebate compliance and reporting that will cost an estimated $75,000-$100,000 annually. We utilize a third-party administrator (TPA), and managing rebate processes across 81 contract pharmacies will significantly increase operational complexity and cost more than $100,000 annually. Optimus, like nearly all FQHCs, operates at razor thin margins and cannot absorb such additional costs without reducing expenses. The reduction in expenses will undoubtedly result in reduced patient access, a concern that the 340B program is supposed to assist covered entities in maintaining. Financial Challenges Under the proposed rebate model, Optimus would be required to purchase drugs at full Wholesale Acquisition Cost (WAC). Our current annual drug spend of $3,577,300 would increase to an estimated $10.7M$14.3M annually. This represents a significant increase in upfront capital requirements and introduces substantial cash flow risk. Conclusion Optimus strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. This model would create significant financial, operational, and clinical risks, ultimately reducing access to care for vulnerable populations. We appreciate the opportunity to provide input and look forward to continued engagement. If you have any questions, please contact Tizita Fekredengel at tfekredengel@opthc.org. Sincerely, Karen Daley Chief Executive Officer Optimus Health Care, Inc. 305 Boston Avenue Stratford, CT 06614 April 6, 2026 Ms. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Optimus Health Care, Inc. (Optimus), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Optimus posed by the proposed rebate model. The 340B program is foundational to Optimus ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize Community Health Centers (CHC) pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million. For Optimus, we estimate an increase in upfront drug purchasing costs of approximately $7M$10.7M annually, representing a 300%400% increase over current 340B purchasing levels. Projected Cost Increases: Optimus anticipates significant increases in operational costs, including $750,000$2M annually in additional staffing, IT, and administrative expenses. Rural Health Center Breakdown: While Optimus is not a rural CHC, we experience similar access challenges, including transportation barriers that significantly impact patients' ability to obtain medications. Optimus is a Federally Qualified Health Center operating 24 sites across 3 cities covering 20 square miles. Optimus serves over 38,000 unique patients annually resulting in 180,000 visits. Our patient population is highly vulnerable, with 60% covered by Medicaid and 15% uninsured. We provide fully subsidized care, including medications, for approximately 3,000 patients experiencing homelessness. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve patients. For Optimus in particular, these funds directly support our sliding fee discount program, which ensures access to care regardless of a patients ability to pay, as well as critical wraparound services such as transportation, language access, care coordination, and connections to stable housing and nutritious food. Without this support, many patients will face significant barriers to accessing even basic care. A reduction in 340B funding will also necessitate staffing cuts, further constraining access. We estimate that approximately 3,400 patients will experience reduced access to affordable, high-quality medical, dental, and behavioral health services, resulting in a loss of nearly 10,000 visits annually. These visits are for essential care that will go unmet or be deferred. As access diminishes, patients will be forced to seek care in higher-cost settings such as emergency departments, driving up overall healthcare costs while worsening continuity of care. Additionally, many of our highest-need patients will lose access to free or deeply discounted medications, further exacerbating chronic conditions and avoidable complications. The cumulative effect of these changes will be a measurable decline in health outcomes for our patients, an outcome the 340B program was designed to prevent. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that Optimus serves. Our patient population includes individuals with diabetes, cardiovascular disease, and those served through the Ryan White program. These populations rely heavily on affordable medications to manage chronic conditions. Any disruption in access will result in increased hospitalizations, treatment delays, and adverse outcomes. Administrative Complexities and Financial Challenges for CHCs The proposed rebate model will create significant administrative burdens. Optimus anticipates needing at least 1 additional FTE to manage rebate compliance and reporting that will cost an estimated $75,000-$100,000 annually. We utilize a third-party administrator (TPA), and managing rebate processes across 81 contract pharmacies will significantly increase operational complexity and cost more than $100,000 annually. Optimus, like nearly all FQHCs, operates at razor thin margins and cannot absorb such additional costs without reducing expenses. The reduction in expenses will undoubtedly result in reduced patient access, a concern that the 340B program is supposed to assist covered entities in maintaining. Financial Challenges Under the proposed rebate model, Optimus would be required to purchase drugs at full Wholesale Acquisition Cost (WAC). Our current annual drug spend of $3,577,300 would increase to an estimated $10.7M$14.3M annually. This represents a significant increase in upfront capital requirements and introduces substantial cash flow risk. Conclusion Optimus strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. This model would create significant financial, operational, and clinical risks, ultimately reducing access to care for vulnerable populations. We appreciate the opportunity to provide input and look forward to continued engagement. If you have any questions, please contact Tizita Fekredengel at tfekredengel@opthc.org. Sincerely, Karen Daley Chief Executive Officer Optimus Health Care, Inc. 305 Boston Avenue Stratford, CT 06614
HRSA-2026-0001-1175Terry Wilcox · Vienna, VA, United States2026-04-07T04:00Z5,552 chars
Comment on HRSA 340B Rebate Model RFI Submitted by: Terry Wilcox I am submitting this comment as a caregiver and patient advocate who has spent more than a decade working alongside patients and families trying to navigate a healthcare system that is often anything but transparent. What I hear from patients every day is not complicated. They want to understand how their care works, what it costs, and who is benefiting from it. Too often, they are the last to know. That is especially true when it comes to the 340B program. Most patients I speak with have never heard of 340B. They do not know when their medications are purchased under the program. They are not told when their care is connected to it. And they have no way of knowing whether the program is benefiting them in any meaningful way. At the same time, I am seeing and documenting situations where patients receiving care at 340B-participating hospitals are still being billed aggressively, sent to collections, or pushed into financial distress. Whatever the original intent of the program may have been, that reality should raise serious concerns about whether it is working for many patients today, especially those treated in 340B hospitals. As HRSA considers a rebate model or any future changes to the program, I would urge the agency to focus on one simple question: Does this program clearly and measurably benefit patients? If the answer is not clear, then that is where the work needs to begin. At a minimum, patients should: Be informed when their care or medications are part of the 340B program Understand how the program is intended to benefit them Have confidence that the program is being used in a way that aligns with its purpose Transparency is not a technical issue, it is a basic expectation. If a patient is part of a program that generates significant revenue within the healthcare system, they should at least know that. And ultimately, they should see some direct benefit from it. Patients are not line items in a system. They are the reason the system exists. As a point of clarification, the organization I co-founded did engage a third party to help raise awareness of this RFI and encourage participation. However, we did not direct or control how individual comments were submitted. I would encourage HRSA to focus on substantive, individualized patient input and ensure the process reflects genuine patient perspectives. I appreciate the opportunity to submit this comment and hope HRSA will take seriously the need to bring greater transparency and accountability to a program that affects so many patients often without their knowledge. Sincerely, Terry Wilcox Patient Advocate and Caregiver Co-Founder, Patients Rising Please see the attached comment. Comment on HRSA 340B Rebate Model RFI Submitted by: Terry Wilcox I am submitting this comment as a caregiver and patient advocate who has spent more than a decade working alongside patients and families trying to navigate a healthcare system that is often anything but transparent. What I hear from patients every day is not complicated. They want to understand how their care works, what it costs, and who is benefiting from it. Too often, they are the last to know. That is especially true when it comes to the 340B program. Most patients I speak with have never heard of 340B. They do not know when their medications are purchased under the program. They are not told when their care is connected to it. And they have no way of knowing whether the program is benefiting them in any meaningful way. At the same time, I am seeing and documenting situations where patients receiving care at 340B-participating hospitals are still being billed aggressively, sent to collections, or pushed into financial distress. Whatever the original intent of the program may have been, that reality should raise serious concerns about whether it is working for many patients today, especially those treated in 340B hospitals. As HRSA considers a rebate model or any future changes to the program, I would urge the agency to focus on one simple question: Does this program clearly and measurably benefit patients? If the answer is not clear, then that is where the work needs to begin. At a minimum, patients should: Be informed when their care or medications are part of the 340B program Understand how the program is intended to benefit them Have confidence that the program is being used in a way that aligns with its purpose Transparency is not a technical issue, it is a basic expectation. If a patient is part of a program that generates significant revenue within the healthcare system, they should at least know that. And ultimately, they should see some direct benefit from it. Patients are not line items in a system. They are the reason the system exists. As a point of clarification, the organization I co-founded did engage a third party to help raise awareness of this RFI and encourage participation. However, we did not direct or control how individual comments were submitted. I would encourage HRSA to focus on substantive, individualized patient input and ensure the process reflects genuine patient perspectives. I appreciate the opportunity to submit this comment and hope HRSA will take seriously the need to bring greater transparency and accountability to a program that affects so many patients often without their knowledge. Sincerely, Terry Wilcox Patient Advocate and Caregiver Co-Founder, Patients Rising
HRSA-2026-0001-1176Patrick Correll · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1256Brayden Daley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1257Quan Daley · United States2026-04-07T04:00Z32 chars
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HRSA-2026-0001-1329Anonymous Anonymous2026-04-08T04:00Z349 chars
Many 340B programs are being run by a team of one. In some organizations, that means a single person is responsible for compliance, operations, TPA oversight, audit preparation, and contract pharmacy management on top of everything else happening in a safety-net setting. And now were being asked to take on even more through proposed rebate models.
HRSA-2026-0001-1330Family Health Centers, Inc.2026-04-13T04:00Z2,991 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net.
HRSA-2026-0001-1331Cassandra Hobbs · United States2026-04-13T04:00Z2,904 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Cassandra Hobbs, PharmD Clinical Pharmacist Family Health Centers, Inc.
HRSA-2026-0001-1332Anonymous Anonymous2026-04-13T04:00Z1,862 chars
My name is Vanessa, and I am a Program Manager at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Vanessa Robles Washington County, Oregon
HRSA-2026-0001-1333S Robinson · United States2026-04-13T04:00Z3,038 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annually, a 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffing, diverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, S Robinson Health Education
HRSA-2026-0001-1334M Coole · Louisville, KY, United States2026-04-12T04:00Z3,046 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Miranda Coole MD Chief Medical Officer Family Health Centers, Inc.
HRSA-2026-0001-1335Anonymous Anonymous2026-04-12T04:00Z1,731 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Ruth J. Wright, Pharmacy Technician
HRSA-2026-0001-1336Michael Funk · Louisville, KY, United States2026-04-11T04:00Z2,852 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. I strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety. Michael T. Funk Chair, Family Health Center Board
HRSA-2026-0001-1337Robert REH · Louisville, KY, United States2026-04-11T04:00Z2,485 chars
Dear Director Britton: On Behalf of Family Health Centers, Inc (FHC) in Louisville, Ky and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSA's proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care: FHC reinvests 100% of 340 B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care . In 2025,340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 Million annually--a 44 fold increase. Even with a proposed 10 day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests and managing denials would require substantial new systems and staffing--diverting limited resources away from patient care. Patients will be harmed-- Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks.For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. I STRONGLY URGE HRSA PURSUE A BETTER PATH: DO NOT IMPLEMENT A MANDATORY REBATE MODEL ON CHC's. PURSUE A NEUUTRAL CLAIMS CLEARINGHOUSE TO ADDRESS DUPLICATE DISCOUNTS AND EXEMPT COMMUNITY HEALTH CENTERS IF A REBATE MODEL MOVES FORWARD. Thank you for your consideration and continued support of the nation's health care safety net. Sincerely; Robert J Reh Board Member Family Health Centers, Inc.
HRSA-2026-0001-1338(no commenter metadata)2026-04-11T04:00Z684 chars
Once again those in the greatest need for this service are being overlooked by the large pharma companies for profit rather than quality of healthcare. As a healthcare provider it is exhausting to want to provide the best of care to those less fortunate and continue to work in this field. Why are we having to advocate for good healthcare for this country when it is so readily available? There was a time when quality of life was more important than profits. This isn't the greatest country when it selectively decides who's entitled to good healthcare and whom is not. At least I know that I practice with the true desire to help all as God would have wanted. Can you say the same?
HRSA-2026-0001-1339Yuri C · CA, United States2026-04-10T04:00Z1,271 chars
Re: Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program I am disabled by a chronic condition and a two- time survivor of cancer. I need to use a lot of medication for my various health conditions. There are many prescriptions that would improve my life, that I cannot afford. Some of my medications are astronomical, and I have to take them, putting me into even more financial strain. (I already live on limited disability income). The 340B program should clearly and measurably benefit patients. I am not informed when a medication was purchased at a 340B discount, and there is limited transparency into how those savings are used. How are medications so expensive for me, when they're getting them at discounted prices? How can I, or other patients know about these discounts and also receive some discount on our costs? If HRSA considers implementing a rebate model, I urge the agency to prioritize transparency, accountability, and patient impact. Any new framework should ensure that savings are traceable and that patients understand whether those discounts reduce their out-of-pocket costs. Patients deserve clarity and confidence that the program is working as intended. Thank you for receiving input, Yuri C. Oakland, CA
HRSA-2026-0001-1340Aurora boyd · louisville, KY, United States2026-04-10T04:00Z81 chars
This is a ridiculous idea and is just a stall tactic so corps can get more money.
HRSA-2026-0001-1341Melissa Mather · LOUISVILLE, KY, United States2026-04-10T04:00Z3,062 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. I strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety-net. Sincerely, Melissa Mather, MPH Chief Communications Officer Family Health Centers, Inc.
HRSA-2026-0001-1342Sophia Bitner · Louisville, KY, United States2026-04-10T04:00Z1,650 chars
Dear Director Britton, I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Sophia Bitner
HRSA-2026-0001-1343Thomas Young · Louisville, KY, United States2026-04-10T04:00Z1,755 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Thomas Young Director of Language Access Services Family Health Centers of Louisville
HRSA-2026-0001-1344JEFFREY GLAZER · louisville, KY, United States2026-04-10T04:00Z4,778 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Jeffrey Glazer M.D. Physician Family Health Centers, Inc. ****************** Short and Sweet Version RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Jeffrey Glazer M.D.
HRSA-2026-0001-1345M H · louisville, KY, United States2026-04-10T04:00Z1,640 chars
Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Family Health Centers employee
HRSA-2026-0001-1346Family Health Centers Louisville2026-04-10T04:00Z3,050 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Carly Faulkenberg, RN EHR Clinical Trainer Family Health Centers, Inc.
HRSA-2026-0001-1347Ana Martinez · Hillsboro, OR, United States2026-04-14T04:00Z1,755 chars
I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration.
HRSA-2026-0001-1348Caitlin Karplus · Portland, OR, United States2026-04-14T04:00Z1,925 chars
My name Caitlin Karplus and I am a primary care provider at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and would instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way. This would directly increase the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Caitlin Karplus Newberg, Oregon
HRSA-2026-0001-1349Kristian Farmer · Mt. Washington, KY, United States2026-04-14T04:00Z2,875 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Kristian Farmer Housing Case Manager Family Health Centers, Inc.
HRSA-2026-0001-1350Jennifer Lietzke · Oregon City, OR, United States2026-04-13T04:00Z1,948 chars
Hi, my name is Jennifer Lietzke, MD. I am a family physician at a federally qualified health center (FQHC) in Beaverton and Hillsboro, Oregon. I am submitting this comment as an individual physician. My comments reflect my personal perspective as a family medicine doctor at a medium-sized FQHC serving over 50,000 patients annually across both urban and rural communities in Oregon. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. The rebate model will burden FQHCs with the need for additional staffing due to increased paperwork to manage the rebates. Up-front discounts are easier and faster for both staff and patients. If my clinic needed to budget for additional pharmacy staff, that would reduce our budget elsewhere. In turn direct patient care would suffer. In addition, the requirement for FQHCs to pay full price upfront and wait for rebates creates financial strain and instability on an organization that has budgetary constraints at baseline. The rebate model directly impacts an FQHCs' ability to purchase medications for patients in a timely and affordable way. This, in turn, will result in delays in receiving medications that prevent morbidity and mortality. Any reduction or delay in 340B savings would result in FQHCs redirecting funding in order to purchase medications, meaning that other the budget would need to be cut elsewhere. This would impact the number of medical providers and support staff serving a high-needs population. Ultimately, this proposed change to the 340B program would shift financial risk onto safety-net providers (ie FQHCs) and the patients we serve. This will result in real harm in marginalized communities. The current structure of the 340B program is superior to the proposed changes. Thank you for your consideration in this matter.
HRSA-2026-0001-1351Emily Paddon2026-04-13T04:00Z744 chars
As a nurse practitioner, I have countless patients who have been positively impacted by the 340B drug pricing program. The 340B program has helped my patients afford essential drugs to manage chronic conditions such as diabetes, kidney disease, asthma, and heart failure. Without this program, the majority of my patients would not be able to afford their medications, which would worsen health outcomes, increase mortality, and increase costs for the healthcare system. This program is essential to both uninsured patients as well as those who are insured, because many essential medications are not covered by insurance. Please protect the 340B program. Losing it would be devastating to me, my clinic, and the thousands of patients we serve.
HRSA-2026-0001-1352Saurabh Patel2026-04-13T04:00Z1,888 chars
My name is Saurabh and I am a pharmacist at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Saurabh Patel Hillsboro, Oregon
HRSA-2026-0001-1353GENESIS CRUZ · Cornelius, OR, United States2026-04-13T04:00Z1,878 chars
My name is Gensis and I am a Community Health Worker at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Warmly, Genesis Cornelius, Oregon
HRSA-2026-0001-1354Anonymous Anonymous2026-04-13T04:00Z1,907 chars
My name is Christopher Gebhardt, and I am a Physician Associate at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Christopher Gebhardt, PA-C, MPH, CPH Physician Associate
HRSA-2026-0001-1355Kerri Nussbaum · OR, United States2026-04-13T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1356Lindsey Reakes · McMinnville, OR, United States2026-04-13T04:00Z1,907 chars
My name is Lindsey Reakes and I am a pharmacist at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Lindsey Reakes Clinical Pharmacist Associate Director of Pharmacy
HRSA-2026-0001-1357Julie Ann Wilkerson · Crown City, OH, United States2026-04-13T04:00Z4,037 chars
I am submitting this response based on approximately seventeen years of experience working within the 340B Drug Pricing Program across pharmacy operations, compliance, and financial oversight. The current 340B program operates as an upfront discount model, which is foundational to how covered entities deliver care. It allows organizations to obtain medications at reduced cost at the time of purchase, ensuring immediate patient affordability and predictable financial management. A shift to a rebate-based model is not a minor adjustmentit is a fundamental restructuring of the program. A rebate model would introduce significant administrative burden. Current 340B systems and workflows are built around point-of-sale eligibility and pricing, not post-adjudication reimbursement. Implementation would require new processes for claim-level submissions, reconciliation across multiple data sources, denial tracking, and appeals. These functions do not exist today in most programs and would require additional staffing and system redesign. The staffing impact alone is substantial. Covered entities would need to dedicate personnel to rebate processing, reconciliation, and dispute resolution. These responsibilities cannot be absorbed without either increasing staffing or diverting resources from patient care and compliance activities. System requirements would also increase. Existing pharmacy and 340B platforms are not designed to support manufacturer-facing rebate workflows, requiring system modifications, integrations, and ongoing maintenance. These changes would create both one-time and recurring costs. The most significant concern is the impact on cash flow. Under the current model, savings are realized at the time of purchase. Under a rebate model, covered entities must front the full acquisition cost and wait for reimbursement. Even with a proposed ten-day turnaround, delays, denials, and disputes introduce financial uncertainty. This increases working capital requirements and creates risk for organizations operating on narrow margins, potentially limiting services or access to medications. Rebate denials present an additional risk. Without strict guardrails, denials could become a primary source of administrative burden and financial instability. Any model would require clearly defined denial criteria, required documentation, and enforceable timelines for adjudication and appeals. A rebate model would also expand data requirements. While much of the necessary data exists, it is not always standardized or structured for external submission. This introduces risks related to data integrity, consistency, and security, particularly with increased reliance on third-party vendors. While I recognize the importance of preventing duplicate discounts and strengthening program integrity, a rebate model is not necessary to achieve these goals. Existing mechanisms can be improved within the current framework without introducing the complexity and risk associated with a rebate system. Similarly, the potential benefits of increased transparency or reduced diversion are uncertain. These objectives can be addressed through enhanced reporting and oversight without restructuring the pricing model. A rebate approach shifts administrative burden and financial risk to covered entities without clear evidence of meaningful benefit. If HRSA elects to proceed with a pilot, it should be limited in scope, voluntary, and supported by strong safeguards, including enforceable payment timelines and standardized processes. Consideration should also be given to offsetting the additional burden placed on covered entities. In conclusion, the 340B program has functioned effectively for over thirty years under an upfront discount model, enabling covered entities to stretch scarce resources and expand access to care . A rebate model introduces financial risk, operational complexity, and potential barriers to patient access. These risks should be carefully weighed before any implementation is pursued.
HRSA-2026-0001-1358Ben Burton · Cornelius, OR2026-04-13T04:00Z2,252 chars
My name is Ben burton and I am a Physician at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. One of the biggest advantages of the current 304 B model is how easily patients can receive discounted medications. Multiple drug discount programs exist with heavy administrative burdens. These programs generally fall short and provide little benefit to my community. The 340B program stands out by providing true access to medications for patients with financial barriers. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Ben Burton, DO Hillsboro, Oregon
HRSA-2026-0001-1359Anonymous Anonymous2026-04-13T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1360Virginia Garcia Memorial Health Center2026-04-13T04:00Z1,911 chars
My name is Melinda Pedroza and I am a Dental Assistant trainer at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Melinda Pedroza Hillsboro, Oregon
HRSA-2026-0001-1361Anonymous Anonymous2026-04-13T04:00Z1,879 chars
My name is Leonela Herrera and I am a Referral Trainer at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Leonela H. Beaverton, Oregon
HRSA-2026-0001-1362(no commenter metadata)2026-04-13T04:00Z561 chars
As a county owned critical access hospital, we depend greatly on the 340B program to continue to provide for our community. We are very concerned that the additional administrative hurdles being proposed will limit our ability to effectively provide the intended savings of the program to our patients while increasing the cost of managing the program for our hospital and clinics. We ask that these changes, and the use of a third party to administer the program, be reconsidered. The 340B program is critical for our organization and the community we serve.
HRSA-2026-0001-1363Lisa Kipersztok · Beaverton, OR, United States2026-04-13T04:00Z1,855 chars
My name is Lisa Kipersztok and I am a family doctor / primary care doctor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration.
HRSA-2026-0001-1364Jessica Goetz · Portland, OR, United States2026-04-13T04:00Z1,907 chars
My name is Jessica Goetz and I am a Social Care Supervisor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Jessica Goetz Hillsboro, Oregon
HRSA-2026-0001-1365Robin Olafson · Banks, OR, United States2026-04-13T04:00Z1,883 chars
My name is Robin Olafson and I am a Clinical Educator- Registered Nurse at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Robin Olafson RN, MSN-ed
HRSA-2026-0001-1366Larissa Whalen Garfias · Forest Grove, OR, United States2026-04-13T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1367Anonymous Anonymous2026-04-13T04:00Z1,919 chars
My name is Julianne Bohnenkamp, and I am a Social Care Supervisor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Julianne Bohnenkamp Cornellius, Oregon
HRSA-2026-0001-1368Emily Andrade · Cornelius, OR, United States2026-04-13T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1369(no commenter metadata)2026-04-13T04:00Z7,565 chars
See Attached r -R-Nur-r di is L71_ IL I MI L7, COFFEE REGIONAL MEDICAL. CENTER 1101 Ocilla Road P.0 Box 1287 Douglas, GA 31534 912-384-1900 coffeeregional.org May 31, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program, HHS Dockef No. HRSA-2026- 03042 Dear Administrator Engels: Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Coffee Regional Medical Center in Douglas, Georgia, we appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly oppose implementation of a rebate model. Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no. As explained below, any rebate mechanism will impose enormous costs and burdens on Coffee Regional Medical Center that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered-entities solhat theycan "stretch scarce-federal resources as far as passible, eat-hing more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Coffee Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Coffee Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026, lnformation Collection Request. With the addition o the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Coffee Regional Medical Center can spend on patient care and comprehensive health care services. The current upfront discount mechanism has worked effectively for decades to allow covered entities to stretch scarce resources and expand access to care. A rebate model would impose significant administrative, financial, and operational burdens that would ultimately harm the patients and communities we serve. Administrative Costs: Coffee Regional Medical Center estimates that implementation of a 340B rebate model would result in approximately $530,234 in incremental annual administrative and operational costs, effectively doubling our current 340B administrative spend of $265,117. These costs include both one-time startup expenses (IT system redesign, vendor onboarding, staff training, and legal review) and ongoing recurring costs (claims submission, rebate tracking, reconciliation, dispute management, audit preparation, and compliance oversight). Key cost drivers include increased staffing and labor costs, IT system modifications, expanded third- party vendor fees, and additional compliance and audit activities. These new administrative functions represent a fundamental shift from the current model and will significantly erode the financial benefit of the 340B program. Staffing impacts: Currently, Coffee Regional Medical Center operates its 340B program with one full-time equivalent employee. A rebate model would require at least one to two additional full-time employees, including a dedicated rebate analyst and compliance specialist. Additionally, clinical and pharmacy staff would be required to divert time away from patient care to support administrative functions. HRSA's estimate of five additional hours per week is a significant underestimation. With Coffee Regionat Medical Center having over 345,000 annual 340B transactions, even minimal per-claim processing time would result in substantial additional workload. In addition, we estimate a minimum of six to nine months would be required to recruit and train additional staff. Systems and Infrastructure: Our current systems are designed to support an.upfront discount model. Transitioning to a rebate model would require substantial IT investment, including new data extraction tools, system integrations, and manual workflows. Due to a lack of direct integration between our EHR and third-party administrators, significant manual effort would be required, increasing both cost and risk of error. Data Collection Burden: A rebate model would significantly increase data collection and reporting requirements. Contrary to assumptions, this process would not be automated and would require manual aggregation and validation of data across multiple systems, increasing administrative burden and compliance risk. Cash Flow and Financial Risk: The shift to a rebate model would have a severe impact on cash flow. Coffee Regional Medical Center estimates approximately $6.6 million in financial risk due to delayed, partial, or denied rebates. Even a 10-day payment window is insufficient, as real-world delays and disputes would extend timelines. This effectively forces hospitals to finance drug purchases upfront, creating significant liquidity challenges. Impact on Patient Care: As a rural disproportionate share hospital and sole community provider, we operate with thin margins and high uncompensated care. A rebate model would result in reduced patient assistance programs, decreased access to medications, and potential scaling back of critical services, including oncology and infusion care. Reliance on 340B Savings: 340B savings are directly reinvested into patient care, including medication assistance, transportation support, and community health programs. These savings have enabled millions of dollars in patient assistance and expansion of critical services. A rebate model would destabilize this structure and undermine long-term planning. For these reasons, Coffee Regional Medical Center strongly opposes the implementation' of a reb-ate model. The current upfront discount mechanism has worked effectively for decades to allow covered entities to stretch scarce resources and expand access to care. A rebate model would irnpose significant administrative, financial, and operational burdens that would ultimately harm the patients and communities we serve. Coffee Regional Medical Center urges HRSA to maintain the current upfront discount model and reject implementation of a rebate program. Sincerely, ((Lt. L(1.4.4)/ Vicki Lewis President/CEO Coffee Regional Medical Center Douglas, Georgia
HRSA-2026-0001-1370Janet Kennedy · Paoli, IN, United States2026-04-14T04:00Z2,773 chars
On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net.
HRSA-2026-0001-1371Evan Sims · Louisville, KY, United States2026-04-14T04:00Z2,893 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Evan Sims Health Education Staff Family Health Centers, Inc.
HRSA-2026-0001-1372Kellee Duke · Louisville, KY, United States2026-04-14T04:00Z208 chars
Please exempt exempt community health centers from this pilot! I am a nurse practitioner at an FQHC and my patient need our services now more than ever. This pilot would be harmful to them and this community.
HRSA-2026-0001-1373Aldina Orellana · Portland, OR, United States2026-04-13T04:00Z2,274 chars
My name is Aldin Orellana and I am a Physician Associate at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large FQHC serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. In addition to this, a rebate model would threaten patient safety in a world that already has enough barriers to care, this rebate model would threaten patient stability even more. This rebate model wouldn't stop at the pharmaceutical level, it would put more strain on other pharmacies, emergency departments, and urgent care clinics in which patients would try to seek appointments for their medications. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medication can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Aldina Orellana, PA-C Hillsboro, Oregon
HRSA-2026-0001-1374Elsbeth Lo · Cornelius, OR, United States2026-04-13T04:00Z1,894 chars
My name is Elsbeth Lo and I am a family physician at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Elsbeth Lo Cornelius, Oregon
HRSA-2026-0001-1375Anonymous Anonymous2026-04-13T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1376Traci Hanlon2026-04-13T04:00Z1,889 chars
My name is Traci Hanlon and I am the Quality Assurance Manager and an RN at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Traci Hanlon MN, RN Hillsboro Oregon
HRSA-2026-0001-1377Charles Bodreau · Beaverton, OR, United States2026-04-13T04:00Z1,880 chars
My name is Charles Bodreau and I am a Clinical Pharmacist at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Charles Bodreau Beaverton, Oregon
HRSA-2026-0001-1378Vanessa Sayago · Cornelius, OR, United States2026-04-13T04:00Z1,891 chars
My name is Vanessa Sayago, and I am a Social Care Navigator at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Vanessa Sayago Cornellius, Oregon
HRSA-2026-0001-1379Virginia Garcia Memorial Health Center2026-04-13T04:00Z1,920 chars
My name is Julianne Bohnenkamp and I am a Social Care Supervisor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Julianne Bohnenkamp Cornellius, Oregon
HRSA-2026-0001-1380(no commenter metadata)2026-04-08T04:00Z34 chars
I AGREE TO ALL FEDERAL REGULATIONS
HRSA-2026-0001-1381Complete Health2026-04-08T04:00Z1,601 chars
For safety net providers like Complete Health, liquidity is not an abstract financial concept - it is the difference between maintaining access to care and reducing services. Nearly half of FQHCs nationwide operate on fewer than 90 days of liquidity; ours operates on far less than that. The proposed rebate model would require our organization to purchase medications at full Wholesale Acquisition Cost (WAC) and wait 30-85 days for reimbursement through manufacturer rebates. This delay would have debilitating impact on our liquidity. - Based on projected rebate model impact on MFP drugs in 2026, we would need an additional $870,225 in liquidity - We conservatively estimate a loss of about $44,708 in revenue through rebate denials - The 90 day cash on hand impact is to the tune of $313,454 For an organization like ours, this isn't possible. It would push us below minimum operating thresholds required for financial stability. It would increase our reliance on lines of credit and short-term borrowing. All of this would expose our organization to costs that divert funds from patient care. Unlike large health systems, FQHCs like mine do not have access to unrestricted capital reserves. FQHCs like Complete Health are the clearest expression of the 340B programs original intentstretching scarce federal resources to serve vulnerable populationsand any policy that weakens our ability to do so undermines the very purpose of the program. We strongly urge you to reconsider. Tim Trithart CEO Community Health Center of the Black Hills (dba Complete Health) Rapid City, South Dakota
HRSA-2026-0001-1382Lakewood Health System2026-04-08T04:00Z13,407 chars
Lakewood Health System appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program, published February 17, 2026. Please refer to the attachment for our public comments. Administrator Thomas Engels Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Lakewood Health System Comment Letter Re: Request for Information 340B Rebate Model Pilot Program (Federal Register Doc. No. 202603042) Dear Administrator Engels: Lakewood Health System (LHS) appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program, published February 17, 2026. As a rural independent health system serving central Minnesota, we rely heavily on the upfront 340B discounts. Lakewood Health Systems participation in the 340B drug savings program allows us the ability to stretch scarce federal resources and provide comprehensive services to all the rural residents we serve. As an anchor institution, we have the responsibility to not only provide high quality healthcare, but ensure a thriving, healthy community for some of Minnesotas most vulnerable through our 340B safety-net program. 340B allows Lakewood to allocate investments in vital outreach and safety net efforts such as the essential community health service examples below: 24/7 Emergency Department Rural Ambulance Services Rural Oncology Services Food Insecurity Program Full Obstetrics including rural delivery *Ensuring access and affordability to critically vital and essential community health services for our rural residents are crucial. Most of these services historically operate on a loss but are essential to the health and well-being of our rural residents, and are fueled by Lakewoods 340B savings. We respectfully submit the following comments regarding the proposed implementation of a rebatebased model under the 340B Program. Operational, Administrative and Financial Concerns with a 340B Drug Rebate Model OPERATIONAL CONCERNS o 340B Covered Entities (CE) have a dependence on the current 340B upfront discount system with infrastructure built over 3 decades. o A rebate model would interfere with 340B upfront discounts, which has been a core design and reliance interest for CEs ADMINISTRATIVE CONCERNS o Administrative burdens would significantly increase due to expansion into all payers, including tracking inventory, reconciling rebates, and managing outstanding receivables. We anticipate adding at minimum a 1.0 FTE to manage a drug rebate model with all the added complexity to an already extremely complex program, which we take pride in our 340B compliance. We are already seeing unilateral MFP denials from drug manufacturers based on flawed logic. A neutral, 3rd party clearinghouse is needed now more than ever. o Unpredictable purchasing & reimbursement cycles and lack of pricing transparency FINANCIAL CONCERNS/FINANCIAL PROTECTION o A 340B Drug Rebate Model would require Lakewood to Pay an estimated $833,774 in 2026 alone in increased upfront, drug acquisition costs before receiving reimbursement. Minnesota has a MN Care Tax Rate of 1.8%. With a 340B Drug Rebate Model for IRA drugs needing a MFP rebate, we will never be reimbursed for the higher upfront cost of the tax. The MN Care Tax would be $15,000 in 2026 alone for 10 IRA drugs in a rebate model versus $0 for a discount clearinghouse model. By 2030, this unreimbursed tax would likely by greater than $100,000. o This financial loss paired with drug cost float would directly affect our staffing ability and cause more harm in our ability to manage the 340B program safety-net. A Rebate model would create significant cashflow challenges in 2026 and beyond with IRA drugs increasing 8-fold from 2026 (10 drugs) to 2030 (80 drugs), ultimately resulting in Financial Instability. We anticipate increased drug float/upfront costs to be $5- 10 million range by 2030 This increased drug float will lessen the ability to continue to provide high quality patient care due to the increased financial strain and loss of safety-net o Protect rural and critical access hospitals from further financial disruption, which is already occurring and increasingly projected to occur due to the perfect storm of factors including: HR 1/OBBBA (Medicaid and ACA cuts) 1 Trillion in Federal Medicaid Cuts including 137 Billion cut to rural hospitals over 10 years Drug Mfg Unilateral Contract Pharmacy Restrictions Tens of Billions in lost 340B Safety Net Savings since 2020 Payor Reimbursement Gaps Proposed 340B Rebate Pilot as previously stated Perfect Storm Association & Data regarding Rural Hospitals Closing Roughly 750 rural hospitals (over 30%) are deemed at risk of closing due to financial problems. More than 300-400 of these hospitals are at immediate risk of closure, with 46% of all rural hospitals currently operating with negative or near-negative margins Nearly 60% of rural hospitals no longer provide labor and delivery services, with 117 hospitals eliminating these services since 2020 (drug mfg restriction imposed in 2020). CONCLUSION/RECOMMENDATIONS: Quite simply, a rebate model creates massive operational, administrative and financial burdens. And greatly expands the original scope of the IRA/MFP beyond Medicare into all payors (Commercial, Medicaid, and Cash Discounts) thus increasing the complexity many fold and hurts financial assistance. Maintain upfront 340B discounts for all covered entities through a Neutral, Federally Contracted Clearinghouse o A Neutral 3rd Party Clearinghouse would minimize administrative burden and is the best solution to the current problem that exists within the IRA MFP/CMS MTF. o A Clearinghouse would help address program integrity (de-duplication, etc.) without imposing any significant operational and financial burdens on covered entities. o A Clearinghouse would prevent the huge drug float with upfront costs that would result in millions of dollars being floated by our rural hospital and billions of dollars being floated nationwide by grantees, health centers and hospitals. We would see increased drug float/upfront costs in the $5-10 million range by 2030 if the rebate model were to proceed. Protect rural and critical access hospitals from further financial disruption o Lakewood Health System urges HRSA to preserve the core design of the 340B Program. A rebate model would undermine financial stability, reduce the safety-net and further diminish access to essential healthcare services for rural communities. We appreciate the opportunity to provide feedback. Respectfully submitted, Mark Carlson, PharmD, 340B ACE Director of 340B, Specialty and Retail Pharmacy LAKEWOOD HEALTH SYSTEM 49725 County 83 | Staples, MN 56479 Administrator Thomas Engels Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Lakewood Health System Comment Letter Re: Request for Information 340B Rebate Model Pilot Program (Federal Register Doc. No. 202603042) Dear Administrator Engels: Lakewood Health System (LHS) appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program, published February 17, 2026. As a rural independent health system serving central Minnesota, we rely heavily on the upfront 340B discounts. Lakewood Health Systems participation in the 340B drug savings program allows us the ability to stretch scarce federal resources and provide comprehensive services to all the rural residents we serve. As an anchor institution, we have the responsibility to not only provide high quality healthcare, but ensure a thriving, healthy community for some of Minnesotas most vulnerable through our 340B safety-net program. 340B allows Lakewood to allocate investments in vital outreach and safety net efforts such as the essential community health service examples below: 24/7 Emergency Department Rural Ambulance Services Rural Oncology Services Food Insecurity Program Full Obstetrics including rural delivery *Ensuring access and affordability to critically vital and essential community health services for our rural residents are crucial. Most of these services historically operate on a loss but are essential to the health and well-being of our rural residents, and are fueled by Lakewoods 340B savings. We respectfully submit the following comments regarding the proposed implementation of a rebatebased model under the 340B Program. Operational, Administrative and Financial Concerns with a 340B Drug Rebate Model OPERATIONAL CONCERNS 340B Covered Entities (CE) have a dependence on the current 340B upfront discount system with infrastructure built over 3 decades. A rebate model would interfere with 340B upfront discounts, which has been a core design and reliance interest for CEs ADMINISTRATIVE CONCERNS Administrative burdens would significantly increase due to expansion into all payers, including tracking inventory, reconciling rebates, and managing outstanding receivables. We anticipate adding at minimum a 1.0 FTE to manage a drug rebate model with all the added complexity to an already extremely complex program, which we take pride in our 340B compliance. We are already seeing unilateral MFP denials from drug manufacturers based on flawed logic. A neutral, 3rd party clearinghouse is needed now more than ever. Unpredictable purchasing & reimbursement cycles and lack of pricing transparency FINANCIAL CONCERNS/FINANCIAL PROTECTION A 340B Drug Rebate Model would require Lakewood to Pay an estimated $833,774 in 2026 alone in increased upfront, drug acquisition costs before receiving reimbursement. Minnesota has a MN Care Tax Rate of 1.8%. With a 340B Drug Rebate Model for IRA drugs needing a MFP rebate, we will never be reimbursed for the higher upfront cost of the tax. The MN Care Tax would be $15,000 in 2026 alone for 10 IRA drugs in a rebate model versus $0 for a discount clearinghouse model. By 2030, this unreimbursed tax would likely by greater than $100,000. This financial loss paired with drug cost float would directly affect our staffing ability and cause more harm in our ability to manage the 340B program safety-net. A Rebate model would create significant cashflow challenges in 2026 and beyond with IRA drugs increasing 8-fold from 2026 (10 drugs) to 2030 (80 drugs), ultimately resulting in Financial Instability. We anticipate increased drug float/upfront costs to be $5-10 million range by 2030 This increased drug float will lessen the ability to continue to provide high quality patient care due to the increased financial strain and loss of safety-net Protect rural and critical access hospitals from further financial disruption, which is already occurring and increasingly projected to occur due to the perfect storm of factors including: HR 1/OBBBA (Medicaid and ACA cuts) 1 Trillion in Federal Medicaid Cuts including 137 Billion cut to rural hospitals over 10 years Drug Mfg Unilateral Contract Pharmacy Restrictions Tens of Billions in lost 340B Safety Net Savings since 2020 Payor Reimbursement Gaps Proposed 340B Rebate Pilot as previously stated Perfect Storm Association & Data regarding Rural Hospitals Closing Roughly 750 rural hospitals (over 30%) are deemed at risk of closing due to financial problems. More than 300-400 of these hospitals are at immediate risk of closure, with 46% of all rural hospitals currently operating with negative or near-negative margins Nearly 60% of rural hospitals no longer provide labor and delivery services, with 117 hospitals eliminating these services since 2020 (drug mfg restriction imposed in 2020). CONCLUSION/RECOMMENDATIONS: Quite simply, a rebate model creates massive operational, administrative and financial burdens. And greatly expands the original scope of the IRA/MFP beyond Medicare into all payors (Commercial, Medicaid, and Cash Discounts) thus increasing the complexity many fold and hurts financial assistance. Maintain upfront 340B discounts for all covered entities through a Neutral, Federally Contracted Clearinghouse A Neutral 3rd Party Clearinghouse would minimize administrative burden and is the best solution to the current problem that exists within the IRA MFP/CMS MTF. A Clearinghouse would help address program integrity (de-duplication, etc.) without imposing any significant operational and financial burdens on covered entities. A Clearinghouse would prevent the huge drug float with upfront costs that would result in millions of dollars being floated by our rural hospital and billions of dollars being floated nationwide by grantees, health centers and hospitals. We would see increased drug float/upfront costs in the $5-10 million range by 2030 if the rebate model were to proceed. Protect rural and critical access hospitals from further financial disruption Lakewood Health System urges HRSA to preserve the core design of the 340B Program. A rebate model would undermine financial stability, reduce the safety-net and further diminish access to essential healthcare services for rural communities. We appreciate the opportunity to provide feedback. Respectfully submitted, Mark Carlson, PharmD, 340B ACE Director of 340B, Specialty and Retail Pharmacy LAKEWOOD HEALTH SYSTEM 49725 County 83 | Staples, MN 56479
HRSA-2026-0001-1383Health Education Advocacy and Learning, Inc.(HEAL Collaborative)2026-04-08T04:00Z4,767 chars
HRSA-2026-03042 See attached file(s) April 2, 2026 The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 United States Re: Request for Information: 340B Rebate Model Pilot Program (FR Doc. 2026-03042) To Whom It May Concern, Health Education Advocacy and Learning, Inc. (HEAL Collaborative) writes in support of the Health Resources and Services Administration's (HRSA) 340B rebate model. We strongly believe this model is an important step toward bringing transparency and accountability to the 340B prescription drug pricing program. HEAL Collaborative is a nonprofit organization committed to building healthier, more resilient communities through health education, advocacy, and collaborative learning. We work alongside meaningful partners, including medical professionals, policymakers, and patient advocates to bring relevant health education resources to the communities that need them most. Our programs are open to everyone, with no barriers to participation. We especially welcome members of the public who are disproportionately impacted by chronic illness, as we believe that access to quality health education, affordable care, and lifesaving medications is a right, not a privilege. The 340B program was designed to help safety-net providers serve low-income and underserved populations by improving access to affordable prescription medications and healthcare services. However, the program has significantly expanded, and many covered entities are failing to deliver benefits to patients. In 2024, purchases under the 340B program reached $81.4 billion, a 23% increase from 2023, yet there has been no corresponding increase in guardrails or reporting requirements to ensure patient benefit. In fact, in a recent analysis by HEAL, it was revealed that certain 340B hospitals are failing to reinvest drug discount savings into patient care, with average hospital assets increasing by nearly 40% while average uncompensated care per bed fell almost 15% between 2014 and 2022. HEAL Collaborative commends HRSA for proposing the rebate model as a thoughtful step toward meaningful 340B reform. We believe it can serve as a critical tool in ensuring the program fulfills its mission of supporting safety-net providers and the vulnerable communities they serve. The proposed rebate model would also address the duplicate discount issue. Currently, 340B covered entities are able to obtain duplicate discounts through the 340B and Medicare Fair Price programs with no reliable mechanism to monitor this. This lack of oversight allows hospital systems to further take advantage of a program meant to serve vulnerable patients. The model would also help ensure that 340B dollars reach their intended destination. By requiring documentation of the prescription, purchase, and payment before rebates are applied, the model introduces common-sense safeguards that are standard practice across many federal healthcare programs. This will help ensure that the location where a patient is served receives the 340B price, rather than large healthcare systems that identify eligible prescriptions across the country through costly third-party administrators. Safety-net providers particularly community health centers and federal grantees will continue to benefit under a rebate model. It will not radically alter the 340B program, but will help guarantee that 340B dollars go where they are supposed to go. A lack of transparency and accountability within the 340B program carries wide-reaching negative consequences. For underserved communities, these challenges are even more pronounced due to existing health disparities and socioeconomic barriers. When 340B savings are diverted from their intended purpose, vulnerable populations, including the communities HEAL Collaborative serves, lose critical access to affordable medications and healthcare services, perpetuating health inequities and undermining the safety-net infrastructure these communities depend on. A properly functioning rebate model will help ensure that patients with health and financial challenges are the ones benefiting from 340B, rather than large health systems, chain pharmacies, and pharmacy benefit managers. When this is demonstrated through the pilot program, we hope HRSA will move to expand it so that all prescriptions benefit from this new oversight. We welcome the opportunity to collaborate with HRSA as the pilot program progresses and would be glad to discuss our perspective further. Please feel free to contact us for any additional information. Sincerely, Howard A. Mosby Corporate Treasurer Health Education Advocacy and Learning, Inc.
HRSA-2026-0001-1384(no commenter metadata)2026-04-08T04:00Z15,970 chars
See attached letter. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of North Oaks Medical Center, located in Tangipahoa Parish in the state of Louisiana, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on North Oaks Medical Center that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services?" Preserving the upfront discount mechanism, which North Oaks Medkal Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. North Oaks Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs. such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit. more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that North Oaks Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require North Oaks Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, North Oaks Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations. and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital and far above and beyond what we are experiencing now. We currently have staff dedicated to auditing and analyzing our 340B program, however we anticipate an additional 1.0 FTE will be needed to facilitate the additional requirements ofthe rebate program. The employee would be responsible for claims processing, data submission, reconciliation/chasing down rebates, audit support, and challenging denials. At our own expense, we would need to provide 340B education to any new employee. Currently our third-party administrators or TPA's do not charge for additional data extraction for the rebate model. If there are more requirements or additional rebates then the TPA's may be forced to charge covered entities in order to offset additional data requirements on the covered entity's behal Of note, the Walgreens contract pharmacies chose not to participate in the initial rebate model program. In addition, covered entities will be required to not only upload required information to 340 ESP but will be required to upload data to the Beacon model. There is another platform that two manufacturers are requiring data upload. This will total three data extracts and uploads. The information in the 340B ESP model is not always transparent and we have had issues with inaccuracies in the current data submission model. It is anticipated that these issues may transition into the rebate model. Staffing Impacts Under a Potential 340B Rebate Program. North Oaks Medical Center does not currently have the staff needed to comply with a Rebate Program. We currently have staff dedicated to auditing and analyzing our 340B program, however we anticipate an additional 1.0 FTE will be needed to facilitate the additional requirements of the rebate program. The employee's primary function would be to ensure compliance with the rebate program. They would be responsible for data collection, running reports, compliance audits, reconciliation of rebates and investigating and challenging denials. As stated above at our own expense we would need to train any new staff members in 340B processes and compliance. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. North Oaks Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We anticipate there will be initial costs associated with developing the necessary report configurations for the rebate model. Costs would include man hours that have not been dedicated 2 to this process and would be start up costs and ongoing costs depending on the scope of the rebate model. This function would fall on our Information Technology and Health and Business Analytics department. This would take away from some of their existing projects to dedicate additional resources to the rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program. both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our hospital already collects and submits data to 340B ESP; however, we submit pharmacy claims. The rebate model mandates that we submit medical claims which are in a different format and data system than prescription claims. As stated earlier, this would be an initial cost of rnan hours for report development from our Information Technology or Health and Business Analytics department. As stated previously, due to lack of transparency there are numerous inaccuracies in the 340B ESP model, and we anticipate this will also be an issue with the rebate model. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force North Oaks Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount w ill have meaningful impact on our institution and the patients we serve. In our case, we anticipate floating $11.680 monthly or $140,160 annually for the initial four manufacturers. If approved and there are more manufacturers that mandate the rebate model the cost can grow exponentially potentially to $871,450 monthly or $10,457,400 annually. In addition, our hospital relies on bond financing to raise money for new projects that enhance patient care. Our bonds include covenants requiring us to maintain a certain amount of cash-on-hand. The "rebate models" would cause cash-on-hand to drop low enough to risk violating our bond covenants. We also have a prompt pay discount associated with our primary wholesaler of net 7 days. If we are unable to meet this due to an increased payment amount, then we will not have the advantage of the discount. We will also incur fees if outside of that window and this may be cost prohibitive. In particular, depending on the number of manufacturers requiring the rebate model and the different ways they are requesting the data we anticipate new FTEs, new technology to provide the 3 required purchase data and to track the rebates they are owed, future legal challenges to denied rebates, etc. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that North Oaks Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The shift to a 340B rebate model would impose significant financial and administrative burdens on North Oaks Medical Center because we would be required to pay full wholesale acquisition cost upfront and wait for delayed rebate reimbursement. instead of receiving immediate price reductions as the 340B Program has always provided. These additional administrative requirements- such as submitting detailed claims data through manufacturer-selected rebate platforms and managing multi-step verification processeswould divert staff time and resources away from patient care and prevent us from reinvesting 340B savings into essential programs as comprehensively as before. As a result, we would no longer be able to sustain many of the patient-focused services supported by upfront 340B savings, including charity care, medication-assistance programs, behavioral health support, chronic disease management, and transportation and care-coordination services for our rural population, all of which rely heavily on predictable funding streams that cannot withstand cash-flow delays. Critical capital and operational projects would need to be paused or canceled due to the uncertainty created by HRSA's ongoing reconsideration and the vacated pilot approval, which has disrupted financial planning and forced delays in multi-year budgeting and hiring decisions. With a current DSH percentage of 20.29, these compounded impacts are particularly harmful because North Oaks serves a disproportionately high number of Medicare, Medicaid, and uninsured patients who depend on us for access to essential services; any reduction in services would require many of our rural and low-income patients to travel long distances for care they currently receive locally. Furthermore, because the rebate model requires hospitals to float the full price of costly medications, North Oaks may be unable to keep certain high-priced oncology, immunology, or specialty drugs in inventory, limiting patient access to life-sustaining therapies and creating longer wait times or care delays that federal courts have already recognized as a serious risk under this model. For all these reasons, the rebate model would have a deeply harmful impact on our patients, our community, and our ability to continue operating as a safety-net provider. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light ofthe Secretary's express statutory authority to provide for discounts via `rebate or discount.' Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently 4 provided discounts through upfront pricing rather than post-sale rebates. North Oaks Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours. there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. As stated previously, our hospital relies on bond financing to raise money for new projects that enhance patient care. Our bonds include covenants requiring us to maintain a certain amount cash-on-hand. The "rebate models" would cause cash-on-hand to drop low enough to risk violating our bond covenants. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We did not get to the point where we submitted data through Beacon, however there are numerous existing inaccuracies in the 340B ESP model due to a lack of transparency, and we only anticipate those issues with the Beacon model. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and M_DPNP pricing. Given the tremendous costs that a rebate mechanism will impose on North Oaks Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful. and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse. rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum. HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. North Oaks Medical Center has not been notified of any deduplication issues. 5 Sincerely, Michele K. Sutton, FACHE President & CEO North Oaks Medical Center located in Hammond, Louisiana oney Pearson Pharmacy Director North Oaks Medical Center located in Hammond, Louisiana For all of these reasons, North Oaks Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow North Oaks Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge ofwhich drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. 6
HRSA-2026-0001-1385Health Care Advocates International, Inc.2026-04-08T04:00Z67,734 chars
See attached file(s) April 8, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health Care Advocates International, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to covered entities posed by the proposed rebate model. The 340B program is foundational to covered entitys ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize covered entity pharmacy operations nationwide. Based on national assessments from 340b groups such as NACHC, we know that covered entities are facing staggering impacts: Financial Losses: Health Care Advocates International anticipates a loss of $335,000 from entity-owned pharmacy operations and due to the administrative hurdles of manual reconciliation. Projected Cost Increases: covered entities anticipate significant increases in operational costs. National data shows that a single mid-sized Covered Entity expects to incur over $250,000 in additional costs annually to manage the pilot. I. We Strongly Urge HRSA To Exempt covered entities from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to Covered Entities' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled Covered Entities to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on Covered Entities. By requiring Covered Entities to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect Covered Entities ability to serve the millions patients who rely on us. For Health Care Advocates International in particular, this means it will impact: Over two hundred patients served by our clinic 2 Current admin costs for your 340B program: $40,000 for consultant plus $200,000 for a full time equivalent pharmacist staff We use our 340B revenue to help with patient care, pharmacy shipping, cost of medical care, care for uninsured patients, community outreach and advocacy and free testing events. We strongly urge HRSA to exempt Covered Entities from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that Covered Entities serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 340B Rebate Model Operational & Administrative Cost Calculator Description To support Covered Entities in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. Covered Entities have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Health Care Advocates International provided $15,821.77 in 2025 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Health Care Advocates International anticipates needing one additional FTEs pharmacist to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Health Care Advocates International anticipates an increase of $45,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 3 Workforce Impact Below is specific data on the administrative costs that Covered Entities anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding Covered Entities estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.1 Health Care Advocates International anticipates needing to hire 1 FTE. Additionally, several Covered Entities estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.2 One midwestern Covered Entity, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. Covered Entities operate on razor-thin margins, and these additional costs are not an option for many entities. Health Care Advocates International anticipates an additional staffing cost $30,000 to $200,000 annually based on this data. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, Covered Entities will face an increased administrative burden in terms of monitoring rebate claims and payments. Health Care Advocates International anticipates at least 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force Covered Entities to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Health Care Advocates International urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on Covered Entities would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Health Care Advocates International estimates $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our Covered Entity, which serves over 200 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $335,000 annually. 1 Internal NACHC assessment (99 responses). 2 Ibid. 4 The In-House Pharmacy: The Burden of Deep IT Integration For Covered Entitles that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our Entity Owned pharmacy uses PioneerRx, which had significant hurdles rolling out the MFP rebate model reporting and we anticipate similar challenges. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Health Care Advocates International anticipates a one time cost of $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For Covered Entity contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My Covered Entity currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in Covered Entities are designed in a cost-effective manner that reflects the nuances of Covered Entity billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.3 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by Covered Entities. Because PPS visits are paid at a flat rate, the medications administered in Covered Entities are often not included on claims billed to payers. Simplified Records: Because Covered Entities maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the Covered Entities maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few Covered Entity records include electronic medication administration records (eMARs), which are common in 5 hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require Covered Entity to pay for a standalone software system. Minimal Risk of Duplicate Discounts: Covered Entities primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by Covered Entities and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on Covered Entities without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, Covered Entities would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish Covered Entities ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. Covered Entities will have to wait to receive their rebate payment after providing medications to their patients. This change will force Covered Entities to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact Covered Entities ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Covered Entities pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a Covered Entities ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about Covered Entities ability to apply sliding- fee discounts at the point of sale. By statute and regulation, Covered Entities are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.4 In line with their mission, Covered Entities offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.5 A Covered Entity can adjust the cost of health care services, including medications, based on a patients income and family size. 4 HRSA FAQ 5 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 6 Covered Entities are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when Covered Entities have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).6 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, Covered Entity pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from Covered Entity pharmacies suggest a planned cadence of 2-week data submissions for entity- owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on Covered Entities. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the Covered Entity can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Covered Entities must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the COVERED ENTITY takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact Covered Entities and trickle down to patients. It is important to note that many Covered Entities are currently under financial strain. Nearly half of Covered Entities operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs Covered Entities will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support Covered Entities in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all Covered Entities. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B7 and WAC pricing data for 6https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 https://340bpricing.hrsa.gov/ 7 the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.8 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: COVERED ENTITYs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $95,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $950 to purchase these same drugs at the 340B ceiling price. This represents a 1,000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our Covered Entity is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Health Care Advocates International anticipates needing to reduce: Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every FTE Rebate Coordinator we are forced to hire, we lose the ability to fund a FTE clinic staff member directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our underinsured and uninsured patients from rationing their medications. B. Wholesaler Implications 8 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some Covered Entities have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Health Care Advocates International asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many Covered Entities are forced to pay invoices before their due dates to remain within their credit limits. Given that Covered Entities typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: Covered Entities often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, COVERED ENTITYs are unable to disclose their exact prompt- pay discount. However, HEALTH CARE ADVOCATES INTERNATIONAL estimates its 2027 Annual Rebate Opportunity Cost to be approximately $250,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HEALTH CARE ADVOCATES INTERNATIONAL estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $8,000. This will only increase as additional medications are added to the rebate list. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution. Forcing Covered Entities into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Health Care Advocates International urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a Covered Entities statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to 9 deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation Covered Entities need to understand or contest those decisions.9 If a rebate is denied, the Covered Entity takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $4,750. This is a sum our Covered Entity cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the Covered Entity mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces Covered Entities to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the Covered Entity. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for Covered Entities operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 9 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most Covered Entities participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many Covered Entities to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on Covered Entities, a system that forces Covered Entities to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Health Care Advocates International strongly urges HRSA to exempt all Covered Entities from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing Covered Entities to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, Covered Entities would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track 11 rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Health Care Advocates International believes that a 340B rebate pilot would cause disproportionate harm to patients served by Covered Entities and other safety net providers. Health Care Advocates International appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Patricia McKnight at pattiemcknight@hcaillc.com or 203-345-0404 x109. Sincerely, Pattie McKnight, Executive Director Health Care Advocates International April 8, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health Care Advocates International, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to covered entities posed by the proposed rebate model. The 340B program is foundational to covered entitys ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize covered entity pharmacy operations nationwide. Based on national assessments from 340b groups such as NACHC, we know that covered entities are facing staggering impacts: Financial Losses: Health Care Advocates International anticipates a loss of $335,000 from entity-owned pharmacy operations and due to the administrative hurdles of manual reconciliation. Projected Cost Increases: covered entities anticipate significant increases in operational costs. National data shows that a single mid-sized Covered Entity expects to incur over $250,000 in additional costs annually to manage the pilot. We Strongly Urge HRSA To Exempt covered entities from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to Covered Entities' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled Covered Entities to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on Covered Entities. By requiring Covered Entities to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect Covered Entities ability to serve the millions patients who rely on us. For Health Care Advocates International in particular, this means it will impact: Over two hundred patients served by our clinic Current admin costs for your 340B program: $40,000 for consultant plus $200,000 for a full time equivalent pharmacist staff We use our 340B revenue to help with patient care, pharmacy shipping, cost of medical care, care for uninsured patients, community outreach and advocacy and free testing events. We strongly urge HRSA to exempt Covered Entities from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that Covered Entities serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 340B Rebate Model Operational & Administrative Cost Calculator Description To support Covered Entities in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. Covered Entities have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Health Care Advocates International provided $15,821.77 in 2025 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Health Care Advocates International anticipates needing one additional FTEs pharmacist to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Health Care Advocates International anticipates an increase of $45,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that Covered Entities anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding Covered Entities estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Health Care Advocates International anticipates needing to hire 1 FTE. Additionally, several Covered Entities estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern Covered Entity, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. Covered Entities operate on razor-thin margins, and these additional costs are not an option for many entities. Health Care Advocates International anticipates an additional staffing cost $30,000 to $200,000 annually based on this data. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, Covered Entities will face an increased administrative burden in terms of monitoring rebate claims and payments. Health Care Advocates International anticipates at least 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force Covered Entities to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Health Care Advocates International urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on Covered Entities would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Health Care Advocates International estimates $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our Covered Entity, which serves over 200 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $335,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For Covered Entitles that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our Entity Owned pharmacy uses PioneerRx, which had significant hurdles rolling out the MFP rebate model reporting and we anticipate similar challenges. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Health Care Advocates International anticipates a one time cost of $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For Covered Entity contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My Covered Entity currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in Covered Entities are designed in a cost-effective manner that reflects the nuances of Covered Entity billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by Covered Entities. Because PPS visits are paid at a flat rate, the medications administered in Covered Entities are often not included on claims billed to payers. Simplified Records: Because Covered Entities maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the Covered Entities maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few Covered Entity records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require Covered Entity to pay for a standalone software system. Minimal Risk of Duplicate Discounts: Covered Entities primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by Covered Entities and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on Covered Entities without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, Covered Entities would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish Covered Entities ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. Covered Entities will have to wait to receive their rebate payment after providing medications to their patients. This change will force Covered Entities to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact Covered Entities ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Covered Entities pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a Covered Entities ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about Covered Entities ability to apply sliding-fee discounts at the point of sale. By statute and regulation, Covered Entities are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, Covered Entities offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A Covered Entity can adjust the cost of health care services, including medications, based on a patients income and family size. Covered Entities are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when Covered Entities have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, Covered Entity pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from Covered Entity pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on Covered Entities. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the Covered Entity can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Covered Entities must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the COVERED ENTITY takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact Covered Entities and trickle down to patients. It is important to note that many Covered Entities are currently under financial strain. Nearly half of Covered Entities operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs Covered Entities will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support Covered Entities in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all Covered Entities. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: COVERED ENTITYs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $95,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $950 to purchase these same drugs at the 340B ceiling price. This represents a 1,000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our Covered Entity is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Health Care Advocates International anticipates needing to reduce: Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every FTE Rebate Coordinator we are forced to hire, we lose the ability to fund a FTE clinic staff member directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our underinsured and uninsured patients from rationing their medications. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some Covered Entities have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Health Care Advocates International asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many Covered Entities are forced to pay invoices before their due dates to remain within their credit limits. Given that Covered Entities typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: Covered Entities often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, COVERED ENTITYs are unable to disclose their exact prompt-pay discount. However, HEALTH CARE ADVOCATES INTERNATIONAL estimates its 2027 Annual Rebate Opportunity Cost to be approximately $250,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HEALTH CARE ADVOCATES INTERNATIONAL estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $8,000. This will only increase as additional medications are added to the rebate list. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution. Forcing Covered Entities into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our million patients across the country depend on. Financial Impact of Rebate Denials and Delays Health Care Advocates International urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a Covered Entities statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation Covered Entities need to understand or contest those decisions. If a rebate is denied, the Covered Entity takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $4,750. This is a sum our Covered Entity cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the Covered Entity mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces Covered Entities to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the Covered Entity. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for Covered Entities operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most Covered Entities participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many Covered Entities to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on Covered Entities, a system that forces Covered Entities to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Health Care Advocates International strongly urges HRSA to exempt all Covered Entities from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing Covered Entities to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, Covered Entities would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Health Care Advocates International believes that a 340B rebate pilot would cause disproportionate harm to patients served by Covered Entities and other safety net providers. Health Care Advocates International appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Patricia McKnight at pattiemcknight@hcaillc.com or 203-345-0404 x109. Sincerely, Pattie McKnight, Executive Director Health Care Advocates International
HRSA-2026-0001-1386Anonymous Anonymous2026-04-08T04:00Z3,862 chars
See attached file(s) 46 Albion Street | Bridgeport CT 06605 | 203-330-6000 | www.swchc.org April 8, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southwest Community Health Center (Southwest), a HRSA-funded health center based in Connecticut, I would like to thank the Health Resources and Services Administration for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct an in-depth analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Southwest is already experiencing significant and measurable financial disruption because of the Medicare Drug Price Negotiation Program and Maximum Fair Price implementation. Based on internal analysis, approximately 91% of IRA-impacted claims for the organization are tied to Medicare, which introduces a dual pressure point of lower reimbursement on these claims and increasing exclusion from 340B benefit as large retail pharmacy chains block or carve out Medicare claims altogether. This is actively reducing access to 340B savings and creating instability in how the program functions day to day. The financial impact is substantial. Southwest is projecting an MFP and IRA related loss of $485,564. Our current annualized upfront cost of goods is $53,962. If the 340B program shifts to a rebate-based structure, we will experience an increase of $868,990 to a total of $922,952 in upfront costs. This change would force our health center to take on significantly higher upfront drug costs, fundamentally changing the financial structure of the 340B program and placing strain on already limited resources, which have been further reduced by the MFP and IRA-related losses. There is also additional risk if rebates are denied or delayed. Beyond the financial impact, the operational burden required to support a rebate-based model is substantial. Health centers like Southwest are not structured to operate as rebate administrators. This model requires new workflows, additional staffing resources, and ongoing monitoring to track claims, manage submissions, and reconcile payments. For 46 Albion Street | Bridgeport CT 06605 | 203-330-6000 | www.swchc.org organizations already operating with lean teams, this will create an unsustainable lift that diverts time and attention away from patient care and core clinical operations. The downstream impact on patients is also a concern. As financial pressure increases and administrative burden grows, health centers may be forced to re-evaluate programs and services supported by 340B savings. These savings are critical to maintaining access to medications, expanding services, and supporting vulnerable populations. Any disruption to this funding stream directly impacts the ability of the organization to meet patient needs. The impact of a rebate model is not theoretical. It is operational, financial, and directly tied to patient care. Southwest Community Health Center respectfully urges HRSA to exempt health centers from the rebate-based model as it introduces significant financial and operational challenges that safety net providers are not equipped to absorb. Without clear guardrails and consideration for the infrastructure required to support this model, there is real risk to the sustainability of 340B programs and the services they fund. Protecting the integrity of the program is critical to ensuring continued access to care for the vulnerable populations it was designed to serve. Sincerely Yours, Mollie Melbourne President/Chief Executive Officer
HRSA-2026-0001-1387TidalHealth Peninsula Regional Inc2026-04-08T04:00Z7,905 chars
See attached file(s) 1 April 8, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via https://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of TidalHealth Peninsula Regional, Inc. (DSH210019) and TidalHealth Nanticoke (DSH080006), thank you for the opportunity to comment on the Department of Health and Human Services Request for Information regarding the 340B Rebate Model Pilot Program. Among other questions, the RFI asks whether HRSA should implement a rebate model under the 340B program in place of the longstanding upfront discount model. Our answer is no. As explained below, a rebate mechanism would impose substantial operational, financial, and administrative burdens on the TidalHealth system that would far outweigh any perceived benefits. HRSAs own calculations suggest significant implementation costs. More fundamentally, HRSAs rationale to test a rebate model is seemingly based on the premise that HRSA must balance the interests of covered entities and manufacturers when selecting a discount mechanism. In our opinion, HRSA must give primacy to the intended purpose of the 340B program: enabling covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount model, on which covered entities have relied for decades, is the approach most consistent with fulfilling that purpose of the 340B program. The RFI encourages commenters to include supporting facts, research, and evidence. TidalHealth has made every effort to provide detailed and practical information within the limited timeframe available. For purposes of estimating burden, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our estimated costs have increased materially over the prior estimates based on the 2026 drugs alone. More drugs and more manufacturers would mean more claims to submit, more rebates to track and reconcile, more capital tied up while awaiting our payment of statutory 2 discounts, more disputes over delays and denials, and ultimately fewer resources available for TidalHealth to spend for patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require TidalHealth to incur significant new administrative costs. When TidalHealth chose to participate in the 340B program, it did so with the understanding that participation involved reasonable administrative obligations tied to an upfront discount model. Our staffing, workflows, contractual arrangements, and compliance infrastructure were built around that model. A transition to a rebate-based approach would require new resources and redesigned processes, imposing considerable costs and burdens that go far above and beyond those we anticipated and well beyond those imposed under the current framework. We estimated initial information technology and third party vendor implementation costs of approximately $10,000 for application redesign and contract modifications. In addition, to support data submission, tracking, reconciliation, and denial management, we estimate that TidalHealth would require an additional 2.0 FTEs dedicated to the rebate program administration. Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, a rebate model would require TidalHealth to purchase all affected IRA NDCs at much higher acquisition cost (e.g., WAC price), and then wait for repayment through a rebate process. Based on our prior 12-month purchase activity, we estimate that this would require approximately $2 million to $4 million in additional annual working capital to absorb the upfront expense. Even if manufacturers were to issue rebates within a 10-day period, as stated under the prior iteration of the rebate model, the delayed receipt of 340B savings would still have a meaningful financial impact on our organization and, by extension, on the patients we serve. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and manufacturers suggested that a rebate mechanism would not impose new data-related burdens on covered entities like TidalHealth because the relevant information was already being provided through 340B ESP. That assertion does not reflect our experience. TidalHealth does not currently participate in data submission through 340B ESP due to the administrative complexity of the process and the burden to resolve the claims denial issues in the past. In addition, manufacturers are now seeking inpatient medical claim data which represents a significant and unprecedented expansion of the data elements being requested. The requested medical claim data specification is not standardized, and it may increase the likelihood of claim denials and delayed payments. Additionally, the bulk transfer of sensitive claim data to a third- party vendor increases the attack surface for cybersecurity incidents and heightens HIPAA 3 compliance risk. These concerns are especially significant given the recent rise in major cyberattacks affecting healthcare organizations. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. TidalHealth has reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on the current model. A fundamental change now would disrupt those settled reliance interests and impose substantial new burdens on covered entities without any demonstrated corresponding benefit. In the absence of any identified failure of the upfront discount model and given the significant burdens a rebate model would impose, HRSA should not switch to a rebate mechanism, even in so-called pilot form. The 340B Rebate Model Pilot Program risks destabilizing the safety net by prioritizing manufacturer convenience over provider sustainability. We urge HRSA to reconsider this model or, at minimum, ensure that the safeguards listed above are legally binding requirements for all participating manufacturers. We appreciate your consideration of these comments and welcome continued engagement with HRSA on this critical issue, which has profound implications for the millions of patients served by the 340B Program. Please contact me with any questions. Sincerely, Dr. John Jordan Authorizing Official, 340B Program TidalHealth Peninsula Regional TidalHealth Nanticoke (a.k.a. Nanticoke Memorial Hospital) DSH210019 DSH080006 100 East Carroll Street 801 Middleford Road Salisbury, MD 21801-5422 Seaford, DE 19973
HRSA-2026-0001-1388Louisiana Hospital Association2026-04-09T04:00Z5,929 chars
On behalf of our member hospitals and health systems, the Louisiana Hospital Association appreciates the opportunity to submit comments on HRSA's 340B Rebate Model RFI. If you have any questions or need additional information, please let us know. April 8, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Ln Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of our member hospitals and health systems, the Louisiana Hospital Association (LHA) appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. As outlined below, implementing any rebate mechanism would impose substantial new costs and administrative burdens on hospitals costs that far outweigh any potential benefits. More fundamentally, the Health Resources and Services Administrations (HRSA) desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSAs obligation is to prioritize the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which hospitals have relied on for years, is the best way to fulfill that purpose of the 340B program. Administrative Costs Under Potential 340B Rebate Program. Any rebate program would require hospitals to incur significant, unplanned administrative expenses. Upon participation in the 340B program, hospitals understand that they will incur some reasonable administrative costs. Hiring, operations, and program administration are all built around an upfront discount model. A shift to a new kind of discount mechanism demands new resources and processes that would impose considerable additional costs and burdens that go far above and beyond what has been expected and planned for at 340B hospitals and far above and beyond what they are experiencing now. The agency will receive comments from covered entities that provide facility-level specifics, but broadly speaking, areas that would drastically be affected by a rebate model include, but are not limited to: Staffing currently structured around the upfront discount model Systems and infrastructure programs and processes are designed for compliance and transparency in the current model Additional data collection processes Payment timing and potential cash flow impacts Honorable Thomas J. Engels April 8, 2026 Page 2 Collectively, these costs and burdens would diminish hospitals ability to use 340B savings as effectively and comprehensively as they do today under the upfront discount model. As a result, patients and communities will be adversely affected. Additionally, the potential impacts to rural hospitals cannot be ignored. Rural hospitals provide not only vital services to their communities but are also economic drivers in their respective regions. Forcing them to shoulder additional costs, administrative burden, and potential financial challenges further jeopardize their stability and existence. Reliance Interests. The Request for Information expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Since its inception, the 340B Program has consistently provided discounts through upfront pricing rather than post-sale rebates. Hospitals have reasonably relied on this history when designing their internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts to Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we echo the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third- party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. For all these reasons, the LHA respectfully submits that the costs of any rebate program will outweigh any expected benefits. If, however, HRSA chooses to move forward with this effort, it must allow hospitals and other covered entities to comment on the specifics of its new program. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Paul A. Salles President & CEO
HRSA-2026-0001-1389Sierra View Medical Center2026-04-09T04:00Z9,991 chars
See attached file. 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Sierra View Medical Center in Porterville, CA, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. Preserving the upfront discount mechanism, which Sierra View Medical Center in Porterville, CA has relied on for 22 years, is the best way to fulfill the purpose of the 340B program. As explained below, any rebate mechanism will impose enormous costs and burdens on Sierra View Medical Center in Porterville, CA that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Sierra View Medical Center in Porterville, CA has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely 2 disputes over delays and denials, and therefore less money that Sierra View Medical Center in Porterville, CA can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Sierra View Medical Center in Porterville, CA to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Sierra View Medical Center in Porterville, CA understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Sierra View Medical Center does not currently have the staff needed to comply with a Rebate Program. This new rebate pilot would cause us to incur hiring another full-time employee to just handle the claims data submissions, on top of our already newly created 340B Program Coordinator position. This additional 40 hour per week FTE would be responsible for data claim submissions, IT data feeds, TPA interfacing, reconciliation of rebates and denials, and auditing of these new data claims. HRSAs current estimate of only 5 hours per week to manage the details of this rebate program are very underestimated. This new position would cost us up to 30% of our current 340B contract pharmacy savings. Not to mention the burden of having to pay the full cost up front for these life-saving medications. Data Infrastructure Implementation of a Potential 340B Rebate Program. Sierra View Medical Center in Porterville, CA has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. From our understanding, the rebate program may ask for medical claims data that is not currently being fed to our TPA partner from our EHR. We would have to manually provide that data needed, which would again increase our time and labor costs for this rebate program. Sierra View has also encountered issues with Second Sight Solutions, which is the platform for Beacon currently. We have had issues with uploading our claims data and reconciling purchased drugs. We do not use the Beacon platform for MFP drugs 3 currently, as we do not have an in-house pharmacy, but we are concerned with the operations of the platform under Second Sight Solutions that we use now with our contract pharmacies. Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Sierra View Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A rebate- based payment model would put a burden on our cash on hand. Also, we are unsure that we would receive our rebate payments within 10 days. Sierra View Medical Center would have to shift financials to pay for drugs up front, and hope for the rebate to be returned. This also brings up another concern of ours in that this program allows manufacturers the ability to deny rebates. This is contrary to what the 340B statute implies. If a covered entity is eligible for the 340B discount, the manufacturer cannot deny the ceiling price. Patient Care and Community Services Impact. All of these many different costs and burdens add up. Unfortunately, that means that Sierra View Medical Center in Porterville, CA will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The majority of our 340B savings go to support our Sierra View Medical Center charity care for underinsured and uninsured patients. We also have been currently using our 340B savings to support our new OB Clinic at Sierra View. Without our 340B savings, our charity care, OB Clinic beginnings, and future rural health initiatives would be thwarted. Our community and the people we serve would be negatively affected by the rebate program. Alternatives to Avoid Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Sierra View Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 4 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. With the need for more staff expenditure, cost of drug purchases up-front, increased costs with our current TPA vendors, concerns with the data platform, and ultimately the reduction of savings to our current hospital programs, we do not believe that the rebate program is a viable solution for covered entities who rely on these savings to help their communities. For all of these reasons, Sierra View Medical Center in Porterville, CA, RESPECTFULLY submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Sierra View Medical Center in Porterville, CA and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Donna Hefner Chief Executive Officer Sierra View Medical Center Porterville, CA
HRSA-2026-0001-1390Anonymous Anonymous2026-04-09T04:00Z11,480 chars
See attached file(s) HRSA RFI Comment Submission 340B Rebate Model Pilot Program Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Date: April 09, 2026 Dear Director Britton: As a Federally Qualified Health Center (FQHC), we would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: I. Financial Impact A. WAC Exposure: Current annual 340B acquisition cost is $315,000. Under the rebate model, projected WAC acquisition cost increases to $4.3 million, a more than thirteen-fold increase in required upfront capital. This level of capital outlay is incompatible with FQHC operating reserves and cash-flow capacity. B. Cash-Flow Exposure: Assuming a 24-day rebate lag: Monthly WAC spend: $358,333 Monthly 340B-equivalent spend: $26,250 Monthly WAC- 340B gap: $332,083 Monthly cash-flow deficit: approximately: $265,666 This recurring deficit exceeds available reserves and jeopardizes the health centers ability to maintain pharmacy operations. C. Sensitivity Analysis: Impact of Longer Rebate Lags To reflect real-world rebate delays, we modeled 30-, 45-, and 60-day lag scenarios using NACHCs standard factors. 24-day lag: $265,666 30-day lag: $332,083 45-day lag: $498,125 60-day lag: $664,166 Even under the best scenario, the health center must advance approximately $270,000 every month. A realistic 45-day lag pushes the deficit close to $500,000 per month, far beyond the liquidity capacity of an FQHC. Any rebate denial converts WAC exposure into a permanent loss. D. Cash-Pay Exposure: Total annual claims are 94,723, of which 38,594 are cash-pay. Forty-one percent of claims generate no reimbursement. For these patients, WAC cost is fully unreimbursed unless a rebate is successfully processed. Any delay, denial, or data mismatch results in permanent WAC liability. E. Opportunity Cost: Lost PVP and prompt-pay savings total $86,000 annually. Capital carrying costs adds $15,936 annually. Total annual opportunity cost is approximately $101,936. This loss compounds the financial strain created by WAC purchasing and rebate lag. II. Operational and Compliance Burdens The rebate model requires purchasing all IRA-affected drugs at WAC and validating 340B eligibility only after dispensing. This necessitates dual inventory systems, expanded internal controls, permanent audit trails, MDPNP non-duplication validation, increased reconciliation workload, and a higher risk of rebate denials due to data discrepancies. If a rebate is denied, the health center remains permanently responsible for the full WAC cost. III. Administrative and IT Requirements Compliance with the rebate model requires significant infrastructure investment, including MDPNP-aligned data exchange, Beacon platform integration, rebate file submission workflows, error resolution, and ongoing reconciliation and audit readiness. Our FQHC would require two additional full-time employees (approximately $200,000 annually) and $50,000 to $100,000 in IT upgrades. These costs divert resources from direct patient care and core clinical operations. IV. Impact on Patient Access Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. V. Recommendation Given the combined impact of: $4.3 million in required upfront purchasing 38,594 annual cash-pay claims $266,000 to $664,000 monthly cash-flow exposure depending on rebate lag $101,936 annual opportunity cost Loss of PVP and prompt-pay savings New staffing and IT burdens High risk of rebate denials While we support HRSAs commitment to program integrity, we respectfully recommend that HRSA exclude FQHCs from the rebate-based pilot, or make participation voluntary with federal support for administrative, IT, and cash-flow stabilization. HRSA RFI Comment Submission 340B Rebate Model Pilot Program Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Date: April 09, 2026 Dear Director Britton: As a Federally Qualified Health Center (FQHC), we would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: I. Financial Impact A. WAC Exposure: Current annual 340B acquisition cost is $315,000. Under the rebate model, projected WAC acquisition cost increases to $4.3 million, a more than thirteen-fold increase in required upfront capital. This level of capital outlay is incompatible with FQHC operating reserves and cash-flow capacity. B. Cash-Flow Exposure: Assuming a 24-day rebate lag: Monthly WAC spend: $358,333 Monthly 340B-equivalent spend: $26,250 Monthly WAC- 340B gap: $332,083 Monthly cash-flow deficit: approximately: $265,666 This recurring deficit exceeds available reserves and jeopardizes the health centers ability to maintain pharmacy operations. C. Sensitivity Analysis: Impact of Longer Rebate Lags To reflect real-world rebate delays, we modeled 30-, 45-, and 60-day lag scenarios using NACHCs standard factors. 24-day lag: $265,666 30-day lag: $332,083 45-day lag: $498,125 60-day lag: $664,166 Even under the best scenario, the health center must advance approximately $270,000 every month. A realistic 45-day lag pushes the deficit close to $500,000 per month, far beyond the liquidity capacity of an FQHC. Any rebate denial converts WAC exposure into a permanent loss. D. Cash-Pay Exposure: Total annual claims are 94,723, of which 38,594 are cash-pay. Forty-one percent of claims generate no reimbursement. For these patients, WAC cost is fully unreimbursed unless a rebate is successfully processed. Any delay, denial, or data mismatch results in permanent WAC liability. E. Opportunity Cost: Lost PVP and prompt-pay savings total $86,000 annually. Capital carrying costs adds $15,936 annually. Total annual opportunity cost is approximately $101,936. This loss compounds the financial strain created by WAC purchasing and rebate lag. II. Operational and Compliance Burdens The rebate model requires purchasing all IRA-affected drugs at WAC and validating 340B eligibility only after dispensing. This necessitates dual inventory systems, expanded internal controls, permanent audit trails, MDPNP non-duplication validation, increased reconciliation workload, and a higher risk of rebate denials due to data discrepancies. If a rebate is denied, the health center remains permanently responsible for the full WAC cost. III. Administrative and IT Requirements Compliance with the rebate model requires significant infrastructure investment, including MDPNP-aligned data exchange, Beacon platform integration, rebate file submission workflows, error resolution, and ongoing reconciliation and audit readiness. Our FQHC would require two additional full-time employees (approximately $200,000 annually) and $50,000 to $100,000 in IT upgrades. These costs divert resources from direct patient care and core clinical operations. IV. Impact on Patient Access Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. V. Recommendation Given the combined impact of: $4.3 million in required upfront purchasing 38,594 annual cash-pay claims $266,000 to $664,000 monthly cash-flow exposure depending on rebate lag $101,936 annual opportunity cost Loss of PVP and prompt-pay savings New staffing and IT burdens High risk of rebate denials While we support HRSAs commitment to program integrity, we respectfully recommend that HRSA exclude FQHCs from the rebate-based pilot, or make participation voluntary with federal support for administrative, IT, and cash-flow stabilization.
HRSA-2026-0001-1391Keystone Rural Health Center2026-04-09T04:00Z42,045 chars
See attached file(s) Keystone A, Health April 09, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Keystone Rural Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Keystone Rural Health Center plays a vital role in our community by providing quality, compassionate primary medical, dental, behavioral and social services to anyone, especially those who need it most. The 340B program is critical to our ability to provide comprehensive services to our medically underserved and often uninsured or underinsured patients. The savings and resources we generate by participating in the 340B program allow us to provide the services our patients need most and for which there is no other source of funding. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. If seeking transparency is the goal, a rebate model is not needed. A rebate model only places "control" into the hands of the drug manufacturers. As recently quoted by a well-known drug manufacturer attorney, "Data without a rebate mechanism leaves a pharmaceutical company in the position of knowing it has given 340B prices in situations where it should not have but having to Leading the way to a healthier community Keystone Health Administration and Executive Offices 111 Chambers Hill Drive, Suite 200 Chambersburg, PA 17201 Tel: 717-709-7900 Fax: 717-709-7926 TlY: 717-263-0276 wNwi.keystonehealth.org navigate the impractical thicket of HRSA approval of an audit, and then covered entity refusal to pay a frustrating dance I have danced." As directly stated by this attorney, they are seeking full control to approve/deny 340B at their discretion without the intervention of HRSA. If CHCs were required to purchase medications at full price and the wait for rebates, the model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Keystone Rural Health Center in particular, this means it will impact: 108,201 340B transactions in 2025/ 65,000 patients served Our 340B program supports our shortfall of funds for our primary care operations that we otherwise would not have to support these losses without cutting services. This includes family medicine, internal medicine, pediatrics, community outreach, school- based clinic, infectious diseases, dental, crisis and our enabling services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www. a hajournals.0 rg/clo i/m11710.1161/eireulat iona ha.123.065748 4 2025 UDA Data, HRSA (hrsa.gov) 3 dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Keystone Rural Health Center provided $1,724,368 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Pharmaceuticals are not required to be discounted, but we have always done so in serving our mission. With a rebate model, we may be forced to no longer offer this service to our patients. Staffing Impact: Keystone Rural Health Center anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. With the current MTF process for just the first 10 drugs through our entity-owned pharmacy, our staff is spending between 8-20 hours weekly to reconcile claims, submit good faith inquiries and provide information required for the good faith inquiries. If this expands to additional drugs and contract pharmacies, it will significantly expand our hours needed to be compliant. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Keystone Rural Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 4 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 65 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 65 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Franklin County with no affordable medication options. With the current MTF process, we have had various contract pharmacies officially carve-out those claims from 340B. This would likely continue to follow with any additional drugs that would be moved to a rebate model impacting our 340B contribution margins. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.5 In 2025, our health center administered 10,660 patient medication transactions through clinic encounters. In addition to the increased complexities involved with uploading medical claims for a rebate, many of these drugs are in multi-dose packages and unless the entire package is utilized before the expiration date, we would be unable to request the rebate. We would most certainly not utilize the entire package within a 45-day period. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 5 Internal NACHC survey data 5 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Agricultural Worker Program: Keystone Rural Health Center is contracted to provide healthcare for agricultural workers in the state of PA. Because the majority of these medications are dispensed directly from the clinic (following PA dispensing laws), these would be considered as medical claims. We purchase these drugs at up-front 340B discounts so that we can dispense these drugs to patients. In 2025, we dispensed nearly 1,600 prescriptions from our farmworker clinics. We could not sustain the full retail cost to stock these medications and certainly would not dispense full packages within 45 days. With a rebate model, our cost to stock these drugs for our farmworker program would increase by $350,000 annually, which is an increase of 7,000%. A rebate model would remove our ability to provide affordable medications to these patients. Uploading medical claims data will be complex and tedious. Due to the high cost of inventory software, we maintain paper logs for our clinic administered drugs which include our farmworker stocked drugs. Even when full packages are dispensed, creating these reports would easily take at least 5-10 times longer than uploading pharmacy claims. Finding a process to pull data from paper logs will be extremely challenging and then needing to pull the remaining required data from our EMR will be additional work. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates 6 confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. Currently, our TPA provides a cash card program so that our financially eligible patients can get their appropriate 340B discount automatically calculated through the connection to our wholesaler's 340B pricing. If a rebate model is initiated, our TPA has informed us that their cash card program will no longer work since the 340B price will be removed from the wholesaler account. We will then need to find a new process, which will likely be manually calculated at each prescription, or we may not be able to offer 340B discounts for these eligible patients. In 2025, our 340B discount contributed $1,724,368 for our reduced fee uninsured prescriptions. This is another cost that we would not be able to carry, in hopes that we will be awarded a rebate. Due to these complexities, we may no longer be able to provide discounted medications to our reduced-fee patients. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.6 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.' A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. For our uninsured patients below 200% FPL, we discount the drug beyond the 340B price in order to provide affordable medications to our patients. In accordance, we also offer a copay assistance program to our underinsured patients below 200% FPL who have high-cost copays that are unaffordable. A rebate model may result in the need to no longer offer this assistance. At Keystone Rural Health Center, our Infectious Diseases clinic cares for approximately 200 HIV positive patients. The cost of HIV drugs are very costly and a rebate model on these drugs alone would create cash flow problems. These cash flow problems would cause risk for these patients since we would not be able to caay the cost of stocking these drugs. In 2025, our health center purchased 843 HIV/PrEP drugs, and 451 of those were for Biktarvy a very expensive drug. The increase in drug spend for Biktarvy alone would be $1,322,019. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).8 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 6 HRSA FAQ 7 Such discounts are subject to potential legal and contractual restrictions. haps://hphc.hrsa,govicompflanceleoropliance- manuaUchapter94footnotel0 81111p://enliveahealth.colblogivear-end-business-health-eheck-key-metries-everv-pharmacv-owner-should-review 7 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B9 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. Pa For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 9 haps://340hpricim2.hrsa.Elovi 10 htips:iiwtivw.ems.Q,ovifiileai 8 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost an increased amount of $7,409,398 to purchase these 2026 and 2027 IRA drugs under the proposed rebate model. This is an increase of $7,409,398 at 38,002% more to purchase these same drugs than at the 340B ceiling price. Average increase in inventory costs pending rebate payments will cause a 45-day cash on hand impact of $905,496. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Keystone Rural Health Center anticipates needing to reduce: B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Keystone Rural Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other maj or revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality 9 requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Keystone Rural Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,166,506. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Keystone Rural Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $349,089. When adding the 2027 MFP drugs, this number will increase to $603,664. a. Financial Impact of Rebate Denials and Delays Keystone Rural Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $3,252,613. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. A claim is not a 340B claim unless a 340B is attached. With a rebate model, there are no "true" 340B claims until after reconciliation with a rebate approved. Therefore, our requirement to send the 340B price with our entity-owned pharmacy's Medicaid Fee For Service claims will no longer exist. The Medicaid requirement to reimburse the pharmacy for AAC would be the full WAC price paid. In the Code of Federal Regulations, AAC is defined as "pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers". Therefore, per CMS rules, Medicaid departments should reimburse providers at AAC. The agency's payment methodology must be in accordance with the definition of AAC. This will have a big impact on our state's budget. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays 'Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) httos://w w w.federal regi sten ao vidocuments/2025/08/01/2025-14619/340b-p ro gra m-noti ce-ap p cat ion-process-fo r-the-340b- reba te-m ode 1-p i o t-pro 9.-rarn 10 create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected deten-ninations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 11 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. ATI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Keystone Rural Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications 12 required by law. We believe that a 340B rebate pilot would cause disproportionate harm to patients served by CEICs and other safety net providers. Keystone Rural Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Sue Barnhart, our 340B Program Director. Sincerely, 7701t.41-e--1 anne Cochran Keystone Rural Health Center President and CEO cc: John McElwee, VP/CFO 13
HRSA-2026-0001-1392National Hispanic Health Foundation2026-04-09T04:00Z9,911 chars
See attached file(s) April 9, 2026 Chantelle V. Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042 -- Request for Information on the 340B Rebate Model Pilot Program Dear Director Britton: The National Hispanic Health Foundation (NHHF) appreciates the opportunity to respond to HRSA's Request for Information regarding a "340B Rebate Model Pilot Program." As an organization dedicated to improving health outcomes for Hispanic communities, NHHF strongly supports efforts to ensure federal programs operate transparently and benefit the intended patient populations. In keeping with that commitment, we view the rebate-based model pilot as a promising step toward strengthening oversight of the 340B program and addressing persistent health inequities. Hispanic communities face persistent disparities in access to care and higher rates of chronic conditions such as diabetes, kidney disease, and obesity. Successfully managing these conditions -- and improving health outcomes -- depends on consistent access to affordable medications. Congress created the 340B program to help safety-net providers purchase medicines at discounted prices and expand access to care for vulnerable and underserved patients. Over time, however, the program has drifted from that mission, allowing large hospital systems and contract pharmacy networks to capture significant financial benefits at the expense of the communities it was intended to serve. Recent analysis from the Congressional Budget Office illustrates the scale of this shift. Spending through the 340B program grew from $6.6 billion in 2010 to nearly $44 billion in 2021, driven in part by hospitals' expanding use of contract pharmacies and the acquisition of outpatient clinics. Many of these facilities are located in wealthy, majority-white neighborhoods, rather than in underserved neighborhoods where safety-net resources are most needed. The 340B program lacks meaningful guardrails to ensure that discounts benefit patients. Participating hospitals and other covered entities can retain the difference between the deeply discounted prices they pay for medicines and the reimbursements they receive from insurers, creating incentives to favor higher-priced drugs. At the same time, limited claims-level transparency makes it difficult to detect problems such as duplicate discounts, where covered entities secure a 340B discount and a Medicaid rebate on the same drug purchase. For these reasons, NHHF supports the rebate model pilot. A claims-based rebate structure would provide greater visibility into how 340B discounts are applied, giving policymakers a clearer understanding of how program savings move through the healthcare system. Greater data transparency would also aid in identifying duplicate discounts and in strengthening oversight, while preserving the program's underlying purpose of supporting care for underserved populations. NHHF welcomes HRSA's recent confirmation that the rebate model pilot will include drugs selected for the Medicare Drug Price Negotiation Program in Initial Price Applicability Years (IPAY) 2026 and 2027. Developing a pilot program to include a limited number of therapies across both years (25 total) will allow HRSA to evaluate the rebate approach across a broader, more representative set of commonly prescribed medications and better understand how the model operates in practice. Broad participation will also be essential to the pilot's success. Limiting participation or creating carve-outs for particular entities could undermine HRSA's ability to assess the model's impact. Implementing the pilot across the full range of organizations that participate in the 340B program -- not just hospitals -- will provide a clearer picture of its operational and patient-access implications. NHHF further encourages HRSA to establish clear metrics for evaluating the pilot and to provide transparent reporting on its findings. Tracking data on patient populations served, geographic distribution of care, and the flow of program savings will help ensure the program delivers meaningful benefits to the intended communities, including many Hispanic patients who face persistent barriers to care. The National Hispanic Health Foundation appreciates HRSA's efforts to examine ways to strengthen the 340B program and ensure that it fulfills its original purpose of expanding access to care for vulnerable populations. A carefully designed rebate model pilot -- including drugs selected for IPAY 2026 and 2027 and implemented without carve-outs -- would provide valuable insight into how the program can better serve patients while improving transparency and accountability. Thank you for the opportunity to provide input on this important issue. Sincerely, Elena Rios, MD, MSPH, MACP President National Hispanic Health Foundation April 9, 2026 Chantelle V. Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042 -- Request for Information on the 340B Rebate Model Pilot Program Dear Director Britton: The National Hispanic Health Foundation (NHHF) appreciates the opportunity to respond to HRSA's Request for Information regarding a "340B Rebate Model Pilot Program." As an organization dedicated to improving health outcomes for Hispanic communities, NHHF strongly supports efforts to ensure federal programs operate transparently and benefit the intended patient populations. In keeping with that commitment, we view the rebate-based model pilot as a promising step toward strengthening oversight of the 340B program and addressing persistent health inequities. Hispanic communities face persistent disparities in access to care and higher rates of chronic conditions such as diabetes, kidney disease, and obesity. Successfully managing these conditions -- and improving health outcomes -- depends on consistent access to affordable medications. Congress created the 340B program to help safety-net providers purchase medicines at discounted prices and expand access to care for vulnerable and underserved patients. Over time, however, the program has drifted from that mission, allowing large hospital systems and contract pharmacy networks to capture significant financial benefits at the expense of the communities it was intended to serve. Recent analysis from the Congressional Budget Office illustrates the scale of this shift. Spending through the 340B program grew from $6.6 billion in 2010 to nearly $44 billion in 2021, driven in part by hospitals' expanding use of contract pharmacies and the acquisition of outpatient clinics. Many of these facilities are located in wealthy, majority-white neighborhoods, rather than in underserved neighborhoods where safety-net resources are most needed. The 340B program lacks meaningful guardrails to ensure that discounts benefit patients. Participating hospitals and other covered entities can retain the difference between the deeply discounted prices they pay for medicines and the reimbursements they receive from insurers, creating incentives to favor higher-priced drugs. At the same time, limited claims-level transparency makes it difficult to detect problems such as duplicate discounts, where covered entities secure a 340B discount and a Medicaid rebate on the same drug purchase. For these reasons, NHHF supports the rebate model pilot. A claims-based rebate structure would provide greater visibility into how 340B discounts are applied, giving policymakers a clearer understanding of how program savings move through the healthcare system. Greater data transparency would also aid in identifying duplicate discounts and in strengthening oversight, while preserving the program's underlying purpose of supporting care for underserved populations. NHHF welcomes HRSA's recent confirmation that the rebate model pilot will include drugs selected for the Medicare Drug Price Negotiation Program in Initial Price Applicability Years (IPAY) 2026 and 2027. Developing a pilot program to include a limited number of therapies across both years (25 total) will allow HRSA to evaluate the rebate approach across a broader, more representative set of commonly prescribed medications and better understand how the model operates in practice. Broad participation will also be essential to the pilot's success. Limiting participation or creating carve-outs for particular entities could undermine HRSA's ability to assess the model's impact. Implementing the pilot across the full range of organizations that participate in the 340B program -- not just hospitals -- will provide a clearer picture of its operational and patient-access implications. NHHF further encourages HRSA to establish clear metrics for evaluating the pilot and to provide transparent reporting on its findings. Tracking data on patient populations served, geographic distribution of care, and the flow of program savings will help ensure the program delivers meaningful benefits to the intended communities, including many Hispanic patients who face persistent barriers to care. The National Hispanic Health Foundation appreciates HRSA's efforts to examine ways to strengthen the 340B program and ensure that it fulfills its original purpose of expanding access to care for vulnerable populations. A carefully designed rebate model pilot -- including drugs selected for IPAY 2026 and 2027 and implemented without carve-outs -- would provide valuable insight into how the program can better serve patients while improving transparency and accountability. Thank you for the opportunity to provide input on this important issue. Sincerely, Elena Rios, MD, MSPH, MACP President National Hispanic Health Foundation
HRSA-2026-0001-1393Pushmataha Family Medical Center, Inc.2026-04-09T04:00Z43,768 chars
Please see attached. HHS Docket No. HRSA-2026-03042 a- YMEDICAL CENTER April I, 2025 Chantelle Britton Director Office of Pharmacy Affairs Ilealth Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Prograin Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Pushmataha Family Medical Center, Inc. (PFMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate modcl. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our comnlunity. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. 0 Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. PFMC became a Federally Qualified Health Center in Clayton, Oklahoma in 2005. In 2015 we opened our second location in Boswell, Oklahoma. We currently serve approximately 5,000 patients a year and provide approximately 17,000 visits per year. Our services include medical, dental, vision, chiropractic, and behavioral health. Our population is largely underserved, uninsured, and low income. lt is our mission to provide affordable, comprehensive, and high-quality health care to all. The 340B program is vital to this mission. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at fun price and wait for rebates. this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For PFMC in particular, this means it will impact: 2,038 340B transactions/ 4,984 patients 5375,254 in current administrative costs Ability to have a part-time D.O. on contract to provide services to our patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most 'ulnerabk patients. 11. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. V% e have significant concerns about thc impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, puhnonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed ' Richard P, Ku L. Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. Ambul Care Manage. 2012 Jan-Mar:35(1):50-9. doi: 10.1097/JAC.0b0l3e3I823d27b6. PMID: 22156955. 2 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitafization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include sorne behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo. a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affbrdability of insulin is a matter of life and death. Furthermore, Fxecutive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted rnedications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 34013 price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. lmposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F. et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Remits from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111(ith.15415. Epuh 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer. M.. et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflocin or Placebo in Patients with Heart Failure. Circulation. hup,willittiournals,orvdoilajc I 0. I 16( cOcoicttiorv,tlill 23.ii65'4 X Substance Abuse and Mcntal I lealth Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (MS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Hcalth Services Administration. lk '06, i,,,duhTplionat-sun 0 di tio-tim:-;ind-hcaith mit Ilmal - ri Icaso 5 Hauser RA. et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extcnsion Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. 35280262; PMCID: PMC8906841. 6 2025 UDA Data. HRSA (hrsa.gov) 3 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should cxcmpt CHCs from the 340B Rebate Model Pilot because they wiH incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers" existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PFMC provided S632,356 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PFMC anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate modcl. External Vendor Costs: Given increased complexity, PFMC anticipates an increase of SI00,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 4 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' PFMC estimates we will need to hire 1.0 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200.000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PFMC estimates that the cost to hire additional staff to be between $40.000 to $70,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PFMC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation. our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 4,984 patients, the total projected increase in expensesincluding labor. IT, and carrying costs-is estimated at $20,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. PFMC estimates this cost to be $75,000. 7 Internal NACHC assessment (99 responses)- ibid. 5 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. PFMC estimates $75,000 in one-time integration costs. Ongoing Resource Diversion: Staffwho currently manage clinical pharmacy services will be forced to spend 8 hours per week manually pulling "Purchase Files" and -Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 8 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass CM the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 8 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Pushmataha County/Southeastern Oklahoma with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,' and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Svstems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 ysInpubitity Indax aigitouch w Pittirnuarmitta anta:ItnicitiTharmucpwgyi AMA Nctwork Opcu I JAMANetwork bitis:, /viww,hcajthaffoirs..ogectoieUbsi KU Mithuff.2024 ,00192'?jou m h It half " Intansi NACHC survey &Au 6 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment afier providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 3408 Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 3408 price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog. since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.t3 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. For 2025, PFMC issued $369,593 in sliding fee discounts for 340B prescriptions. I2 tIRSA FAQ 13 Such diwounts are subject to potential legal and contractual restrictions hplic l rwi conr.~lianc4 7 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventor), could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every' 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding cnforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate. manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CI ICs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfullv requftt that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand. and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Druz Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost lmpact Calculator, which utilizes CHC-specific purchasing data, 340Bj5 and WAC pricing data for the first quarter 14https:,Yertlivohcalth.corblogyear-enti-business-ticalth-c-kcs -ftwtricN-eivr% -pharmacy-ovi ner-$11oksitt-tc% " httos:/340brivirig.hrsajlovi 8 of 2026 (Ql 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volurne to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume. reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60. & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving thc Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Ql 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $334,892 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $14,907 to purchase these same drugs at the 340B ceiling price. This represents a 2,247% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PFMC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as moderate complexity lab tests that we currently perform in-house, chiropractic services, CDO/Marketplace services, among other outreach programs. Operating Hours: We anticipate needing to reduce our clinic hours 8 per week, specifically impacting our evening hours, which are the only times our working-class and self- employed patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a fuH-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. l$) httprWWWW.Cills,govirtie$:Zipi Iccted-drug-lig-ncgotitticdiriccs-also4nown-Vaximunl-fair-Friccs-siatutv4ivkAil2 9 Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 715 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For exampte, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PFMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo.- This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float- manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payrnents are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits diflicult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PFMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $67,337. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PFMC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by S27,908 in 2026, $36,098 in 2027, and S37,017 in 2028. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $20,094 annuallyfunds that are currently dedicated to our current part-time D.O./maintaining current LPN workforce. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PFMC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced 10 '7 Application Process for the 3409 Rebate Model Pilot Program. 2025-14619 i90 rR 361631 . %%, WW,ICKQUIV212,1StSp1. tit 'co incr ).: it, ') service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PFMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $50,817. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized. transparent, and neutral dispute resolution process. the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash tlow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; rebale-inodcl-oilot-brogram 11 ,..ition-rroccs$-Ior-the-341t Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including intemal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establisbing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate modeL Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 12 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile clairns and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. lt is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PFMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PFMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PFMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Angela Batton, CEO, at ahatton u pfmcok.com Sincerely. 5-00vank, Angela Batton, CEO Pushmataha Family Medical Center, Inc. 13
HRSA-2026-0001-1394Clinica Family Health & Wellness2026-04-09T04:00Z50,234 chars
See attached file(s) ot#Clinica( 7/ family health & wellness TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Clinica Family Health and Wellness DATE: April 15, 2026 RE: Comments on HRSA's Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Clinica Family Health & Wellness is a nonprofit Federally Qualified Health Center (FQHC) serving Adams, Boulder, Broomfield, and Gilpin counties in Colorado. We serve approximately 50,000 individuals annually, half of whom live at or below the federal poverty level, 31% are uninsured, and 55% rely on Medicaid or Medicare. In 2025, our participation in the 340B Drug Discount Program enabled 17,681 patients to directly access $26 million in prescription savings. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our three onsite pharmacies and thirty-four contract pharmacies. The 340B program is foundational to my organization's ability to serve the most vulnerable members of my community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in my community and nationwide. Clinica, and others across the country, would face staggering, detrimental impacts if the rebate model were to go into effect: Clinica does not bill Medicare Part D at our entity-owned pharmacies but would see a nearly 50% reduction in savings from our contract pharmacy arrangements due to the administrative hurdles which have forced the blocking of the initial 10 MFP negotiated drugs. This loss will increase as more drugs are added. We expect our upfront pharmacy costs to increase by nearly 2000% due to a rebate model, pulling dollars away from direct patient services. At Clinica, we have always 1735 S. Public Rd, Lafayette, CO 80026 l Phone 303.650.4460 l www.Clinica.org 4oCi n Ica ,40!" family health & wellness passed through savings to patients in the form of Iow-cost medications at entity owned pharmacies, which would be difficult to sustain in a rebate model. We further expect the administrative costs to apply for and track the rebates to cost my organization at least 1 FTE and $180,000, which will further strain our ability to serve our patients. For Clinica, this financial turmoil and undermining of Congressional intent of the program - to "stretch scarce Federal resources as far as possible"' - means directly and negatively: Impacting the 17,681 patients who accessed affordable medications through our participation in the 340B program, Increasing the administrative costs by over $180,000 for our 340B program, and Impeding my organization's abilityto continue to provide low-cost pharmacy services to uninsured patients who have no other options to access often life-saving medications. Clinica requests the Health Resources and Services Administration (HRSA) exempt all CHCs, from any proposed 340B rebate model, including the one under consideration in HRSA's Request for Information (HHS Docket # 2026-03042). We oppose any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or burdens to the 340B program. Clinica already had effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the program's intent and the fundamental responsibility of HRSA and HHS to administerthis program in the interest of eligible Americans, and the nonprofit, local, trusted community providers who serve them. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is infeasible for my organization, and likely many others, to respond individually to each question. Therefore, we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. RFI Target Area 1: Costs to Covered Entities Financial impacts 1 18 340B House Report Legislative History. H.R. REP. 102-384(11). 2 >C1 G n ica family health & wellness It is difficult to understate the costto Clinica if we are forced to administer our 340B program through a rebate model due to the lack of detail on exactly which drugs would be included. As a proxy, in 2025, if Clinica had purchased the same volume of drugs currently without the 340B discount, purchasing at the Wholesale Acquisition Cost (WAC) would have increased upfront costs by 1865.30%. To cover the upfront cost of purchasing drugs and operationalizing the rebate model, Clinica anticipates needing to consider: Scaling back our non-revenue-generating, but essential, pharmacy services. Reducing our pharmacy hours, which impacts access to care for our patients. Diverting support staff and funds away from our clinical staff to manage the rebate model, or Reducing the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities. It is incomprehensible to impose a rebate model on local, nonprofit CHCs when two-thirds of CHCs in Colorado had negative or breakeven financial operating margins in 2024 and 2025 and it is anticipated a similar number of CHCs will face this financial challenge in 2026. As CHCs, we currently rely on our statutorily allowed savings from the 340B program to fill this gap and make us closer to whole; the burden of a rebate model will exacerbate these financial difficulties and, ultimately, will be insurmountable for my organization, and likely others across Colorado. Pricing impacts By statute and regulation, CHCs are required to offer discounts for all health care services within our HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact Clinica's ability to offer patients steeply discounted medications at the point-of-sale by requiring us to purchase medications at the WAC pricing. We currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software 2 42 U.S. Code 254b(k)(3)(G)(i) 3 * ini ca family health & wellness systems are continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate the drug's price for the patient. The rebate model generates uncertainty about its impact on my CHC's ability to offer sliding fee discounts at the point of sale and forces us to estimate discounts without knowing whether or when a rebate will be paid. This exposes us to financial loss if that rebate is denied, delayed, or different than the expected amount - entirely undermining the federally required discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced, Colorado's Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCS must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi-billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions my organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs, like Clinica, have on it by solely asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to my organization and patients, my CHC was able to provide 17681 patients with 131,471 prescriptions. Through the 340B program, those patients, nearly all of whom were uninsured, were able to access $26 million in savings. For many of our patients, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 - and were previously indicated in an earlier proposed rebate model - are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be disproportionately affected. CHC patients rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. 4 #4)Clini a family health & wellness Due to cost and availability constraints of these drugs created by the 340B rebate model, our patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. If a rebate model goes into effect, my pharmacy will need to evaluate the possibility of evolving our drug purchasing practices. With the expected upfront cost equating to the drug's WAC, it will not make fiscal sense to maintain a stock of certain medications. Clinica has considered no longer carrying drugs subject to a rebate model or shifting to purchase drugs only after the prescription has been requested by the patient, thus requiring that patient to return to the entity-owned pharmacy to pick it up. This fundamentally shifts CHCs away from the same day model of care we currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model would require that would force our patients to return to the clinic or local pharmacy multiple times a week to pick up their prescription(s) is simply an unconscionable barrier and burden. Imposing a rebate model on CHCs would only serve to weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordabie medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enab!es CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, particularly those who are low-income and have insurance with high co-pays or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be harmful and burdensome. Clinica currently employs the equivalent of 3.5 FTE of pharmacy, financial, IT, compliance, and revenue cycle to manage our 340B program, at a family health & wellness cost of -$300,000 per year. To sufficiently and appropriately track the submission of the data and the receipt of rebates across our in-house and contract pharmacies would require the hiring of at least one additional FTE, further compiling onto our anticipated annual increase in costs. For every FTE we must hire to balance the program, we will no longer be able to fund patient support roles, like clinical pharmacists and pharmacy technicians. Additionally, the breadth of knowledge required to manage a rebate program is not as simple as hiring one additional FTE. It requires high levels of expertise in many different areas such as pharmacy, finance, IT, and procurement. These skills would likely be found only by hiring multiple different people to function at the level required to keep up with the complexity of the systems involved in managing a rebate model. Across Colorado, CHCs have the shared concern that a rebate model would require more staff time and administrative cost than current 340B program management; CHCs estimated that managing a rebate model would require the hiring of additional staff to adequately manage, though many of these CHCs also are struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every hour that one of our pharmacists spends reconciling rebate claims is an hour not spent on medication safety verification and patient counseling. Every dollar spent on compliance and administration is a dollar no longer available for wrap-around services, and the integrated care our patients depend on. This diversion of time and resources is not a minor inconvenience for Clinica to navigate: it is a structural undermining of the care model that we depend on to serve our community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. Clinica will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant - and impossible - increase in already-strained operational capabilities. Clinica anticipates needing to hire at least 1.0 FTE which will cost approximately $140,000 more annually. Managing the rebate model would require significant changes to my CHC's pharmacy 6 nica family health & wellness software and third-party administrator workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard notifications, and design new, internal workflows; $40,000 will be required to simply reach to baseline of compliance before a single rebate is ever received. Additionally, beyond implementation, third-party administrator and software vendors will likely charge ongoing service fees to maintain these complex rebate- tracking features. These would be permanent, recurring costs that further diminish our 340B savings. For CHCs, like mine, that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide real-time, accurate information at the pharmacy counter, including updating our electronic health record and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring our organization to account for high upfront cost increases to pay software vendors for custom API builds and price file reconciliation tools. Additionally, for CHCs like mine, that contract with pharmacy partners, the rebate model threatens the very existence and possibility of these contract arrangements. We currently contract with thirty-four contract pharmacies, and it is likely that our third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to us, the covered entity, through increased per-claim fees. This number of contract pharmacies we partner with further compiles the number of rebate pathways our pharmacy staff need to track in order to ensure rebates are paid correctly and timely. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility our contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patients' options of accessible, affordable locations to access their medications, particularly in rural communities, like the ones we serve in Nederland and Blackhawk, Colorado. This would further harm our patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. Clinica can estimate that the total projected increase in expenses, solely to manage a rebate model, including labor, IT, and carrying costs, is estimated at -$880,000 annually. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities 7 0"-fC nica family health & wellness Clinica is very concerned by potential cash flow issues of the proposed rebate model. This is linked to the model requiring upfront purchase of the drugs, how quickly a rebated could be requested, and possible denials. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that Clinica must forgo discounts or face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should we negotiate with wholesalers or banks to increase our borrowing limit. Clinica relies on these discounts and terms outlined in contracts with our wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and exorbitant interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the upfront need will be crippling and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $87,500 on my expected $700,000 increase in upfront cost. Cencora's standard policy is an 18% annual interest rate on all balances that have not been paid off within 30 days of the purchase. This cost is only for the ten MFP drugs proposed in the first 340B rebate model pilot program; the cost will further increase if and as more drugs are added to a 340B rebate model. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent my CHC from ordering medications until payments are submitted. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers are actively advising CHCs to seek loans. We are also concerned that the rebate model will cause Clinica to lose non-340B discounts we currently receive, which lower our drug spending significantly, including: Loss of sub-ceiling discounts, which reduced the net cost of the ten pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with 8 Clini a family health & wellness HRSA as the Prime Vendor to negotiate "sub-ceiling" discounts on 340B drugs on behalf of covered entities, like CHCs. By allowing a rebate model, HRSA thus eliminates the possibility for Apexus to negotiate discounts on the ten drugs that would likely be included in the pilot program, effectively transferring this discount from CHCs and their patients to the pharmaceutical manufacturer. Reduced "Cost of Goods Sold" discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. RFI Target Area 3: Rebate Denials Every dollar my organization pays upfront at WAC is a dollar that remains frozen in the manufacturer's reconciliation system. It is a dollar that my organization cannot rely on to provide health care services to my patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain our drug supply is notjust unethical; it creates an environment of clinical instability with direct patient impacts. In our community, where the patients we serve rely on us to access care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to our community's safety net and our patients' health. If we are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. Clinica urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated 9 40fr)ff ini family health & wellness processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. If a rebate is denied, my CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative 5% denial rate would result in a net annual loss of $420,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We respectfully request that if the rebate model is finalized, HRSA 10 family health & wellness provide a detailed plan to ensure rebates are paid - with enforcement mechanisms outlined for incorrect or delayed denials - given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. Any delay beyond the 10-day window creates an immediate cash flow crisis. We are particularly worried that the need to purchase drugs at full WAC will cause us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. We have concerns about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Beacon Channel Management's Medicare Transaction Facilitator Concerns 11 *CI Rnica family health & wellness Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, we are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data - if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacon's technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. Clinica performs comprehensive quarterly audits, engages an external partner for one mock-HRSA audit annually, reviews and updates policies and procedures annually, and self-discloses any over-replenishment at contract pharmacies. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and stafftraining, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts 12 *Clini ca family health & wellness CHCs, like Clinica, maintain up-to-date profiles in the Office of Pharmacy Affairs Information System (OPAIS) Medicaid Exclusion File. In Colorado, Medicaid also has a secondary system in place to avoid duplicate discounts. We submit a modifier on each carve-in Medicaid claim at in-house pharmacies and with clinic administered medications, so the rebate is not sought by the state as the medications are purchased at 340B pricing. At contract pharmacies, we are required to carve Medicaid out of 340B capture, thus allowing the state to seek a rebate on these claims. This carve out at contract pharmacies happens in collaboration with third- party administrations and identification of Medicaid BIN/PCNs ineligible for 340B. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. For Medicare, CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries on how to address the findings as well as lacking system support with TPAs to support Medicare Part D claims. As a result, our TPAs have blocked all the MFP drugs from capture, resulting in an approximately $50,000 loss in 340B savings monthly. Since Jan. 1, 2026, while we understand that manufacturers' investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication - a 340B rebate model - would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot 13 -wr family health & wellness or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress...constrained the [Health and Human Services] Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 14 t # Clinica family health & wellness pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. The 340B statute's design reflects Congress's intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSA's statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers "stretch scarce Federal resources as far as possible," and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that 5 https://www.commonwealthfund.orq/publications/explainer/2025/aucl/340b-drua-oricing-program-how-it-works-and-why-its- controversial 15 xi *CI nica family health & wellness CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit ofthe discounted medication: we are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%' to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado - the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately - rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherentiy biased participants in the 340B program, to force CHCs to be charged one of the highest possibte prices to acquire drugs. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this itlegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxo.ora/wo-content/uoloads/2026/01/CSRxP-Marqin-Analysis-Chart.pdf 16 0. #Clinica family health & wellness and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC- provider to a non-provider - the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity - not HHS nor the manufacturer - from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices - MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for 17 1,,Clinica family health & wellness addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: "The Committee bill does not specify whether 'covered entities' would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of 'covered entity."' The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Act's statutory intent, is extra- statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug - that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot - "to address 340B and MFP deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. H.R. REP. 102-384(11) 18 * ini ca family health & wellness Under a clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to CHCs' participation in the program and, most importantly, protect patient access to affordable medications. We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. 19 *IP Clini a family health & wellness Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for Clinica as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions or would like to know more about how Clinica uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to Simon Smith, CEO at simon.smith@clinica.org or Melinda Gonzales, Director of Pharmacy at mgonzales@clinica.org. Kelly Daugherty EVP, Service Delivery Operations Clinica Family Health & Wellness 20
HRSA-2026-0001-1395Clinica Family Health & Wellness2026-04-09T04:00Z9,153 chars
See attached file(s) 1735 S. Public Rd, Lafayette, CO 80026 | Phone 303.650.4460 | www.Clinica.org TO: Mr. Thomas J. Engels, Administrator Health Resources and Services Administration Ms. Chantelle Britton, Director Office of Pharmacy Affairs, HRSA FROM: Clinica Family Health and Wellness DATE: April 15, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program HHS Docket # HRSA-2026-03042 Clinica Family Health & Wellness is a nonprofit Federally Qualified Health Center (FQHC) serving Adams, Boulder, Broomfield, and Gilpin counties in Colorado. We serve approximately 50,000 individuals annuallyhalf of whom live at or below the federal poverty level, 31% are uninsured, and 55% rely on Medicaid or Medicare. In 2025, our participation in the 340B Drug Discount Program enabled 17,681 patients to directly access 340B prescription savings. We appreciate HRSAs willingness to extend the comment period and engage stakeholders on this complex issue. However, after thorough analysis of the proposed rebate models operational, financial, and legal implications, Clinica respectfully but firmly opposes the proposed 340B Rebate Model Pilot Program and urges HRSA to exempt all Community Health Centers (CHCs) from its scope. The model would impose serious harm on safety net providers and the patients we exist to serve, without achieving deduplication goals more efficiently than available alternatives. I. Financial Impact Is Severe and Disproportionate Transitioning from up-front 340B discounts to a rebate model would require Clinica to purchase drugs at Wholesale Acquisition Cost (WAC) before receiving any reimbursementan upfront cost increase of nearly 2,000%. Clinica projects total annual costs to manage the rebate model at approximately $880,000, including: $700,000+ in additional upfront drug purchasing costs (a 1,865% WAC increase based on 2025 volume) 1735 S. Public Rd, Lafayette, CO 80026 | Phone 303.650.4460 | www.Clinica.org $140,000 annually for at least 1.0 additional FTE to manage rebate tracking, compliance, and reconciliation $40,000 in upfront IT costs to reach baseline compliance, plus ongoing vendor service fees These costs arrive at a moment of significant financial strain. Two-thirds of Colorado CHCs already operated at negative or breakeven margins in 2024 and 2025, and Clinica itself has been forced to reduce staff, eliminate programs, and consolidate services in response to Medicaid unwinding. The 340B programs upfront discount structure has been essential to maintaining financial stability. A rebate model would significantly compound these pressures. II. Patient Access to Affordable Medications Would Be Jeopardized The 340B program was designed to ensure that patients receive affordable medications through an upfront discount on the purchase of a drug. A rebate model undermines this in several concrete ways: Clinica cannot accurately calculate real-time discounts when purchasing at WAC. Pharmacy software continuously overwrites manually added 340B price files, making point-of-sale discount calculation unreliable. Stocking certain rebate-model drugs may no longer be fiscally viable, potentially requiring patients to make multiple return tripsa significant burden for low-income patients managing complex, chronic conditions and/or transportation barriers. Patients managing diabetes, hypertension, and arthritisconditions that are prevalent in CHC populations and heavily represented in the Medicare Drug Price Negotiation Program drug listface the greatest risk of disrupted access, medication rationing, and adverse health outcomes. The 17,681 patients who accessed low cost medications through Clinicas 340B participation would face immediate and meaningful affordability barriers if up-front discounts are replaced by delayed rebates. III. Cash Flow Risk and Rebate Denial Create Unacceptable Uncertainty The rebate model effectively requires safety net providers to front capital to pharmaceutical manufacturersan arrangement that is both operationally unworkable and financially dangerous for organizations with thin margins: 1735 S. Public Rd, Lafayette, CO 80026 | Phone 303.650.4460 | www.Clinica.org A conservative 5% rebate denial rate would result in a net annual loss of approximately $420,000a sum Clinica cannot absorb without directly reducing patient services. Financing upfront WAC costs through loans carries significant cost: SBA loans run 12.5%+ annually ($87,500 in additional cost on a $700,000 increase), and Cencora charges 18% on balances unpaid within 30 days. Exceeding wholesaler credit limits could halt medication ordering entirely, with direct and immediate consequences for patient care. The proposed 10-day rebate payment window lacks meaningful enforcement mechanisms. Experience with the current MFP/Beacon Medicare Transaction Facilitator demonstrates that manufacturers routinely deny claims on vague or unpublished criteria and have failed to pay corrected rebates on timeproviding little confidence that a 340B rebate model would perform more reliably. IV. The Rebate Model Raises Significant Legal Concerns Clinica respectfully submits that the proposed rebate model raises legal questions HRSA should carefully consider before proceeding: The 340B statute grants covered entitiesnot manufacturerssole authority to determine patient eligibility for 340B drugs. A rebate model effectively transfers this determination to manufacturers, which is inconsistent with the statutes plain language. The Inflation Reduction Act does not authorize HRSA to permit manufacturers to charge prices above the 340B ceiling price, nor does it establish a 340B rebate mechanism for Medicare claims. Requiring CHCs to provide commercial claims data to manufacturers as a condition of 340B access appears to exceed HRSAs statutory authority and raises Administrative Procedure Act concerns, as the D.C. District Court has affirmed that Congress constrained the Secretarys ability to adopt regulations that have the force of law and did not authorize extra-statutory hurdles to 340B participation. Congressional intent is clear: the 340B program was designed to help safety net providers stretch scarce Federal resources as far as possible, and Congress directed HHS to use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. A rebate model does not meet this standard for CHCs. 1735 S. Public Rd, Lafayette, CO 80026 | Phone 303.650.4460 | www.Clinica.org V. CHCs Maintain Rigorous 340B Compliance CHCs are not the source of the program integrity concerns the rebate model is designed to address. Clinica conducts quarterly internal audits, annual external mock-HRSA audits, continuous staff training, and proactively self-discloses over-replenishments. Colorados Medicaid program already has statutory protections against duplicate discounts in place. The compliance infrastructure CHCs have built is robust and proventhe additional burden of a rebate model falls most heavily on the providers with the strongest existing safeguards. VI. A Workable Alternative Exists HRSAs stated goalpreventing duplicate discounts on 340B and MFP drugscan be achieved without a rebate model. We urge HRSA to consider a neutral, secure claims data clearinghouse in which CHCs submit standardized claims data for MFP drugs purchased under 340B and dispensed to Medicare Part D patients within 45 days. The clearinghouse would aggregate and transmit this data to the Medicare Transaction Facilitator to identify ineligible claims. This approach preserves the upfront discount structure, eliminates cash flow risk, substantially reduces administrative burden, and achieves deduplication goals at a fraction of the costall in a manner fully consistent with Congressional intent and the 340B statutes design. Conclusion Clinica respectfully requests that HRSA exempt all CHCs from the proposed 340B Rebate Model Pilot Program. CHCs represent only approximately 5% of total 340B program spendingHRSA can successfully pilot an alternative deduplication approach without including us. The cost of inclusion is not a manageable administrative adjustment; for many CHCs, it threatens the financial stability of the safety net that millions of Americans depend on. We remain committed to the integrity of the 340B program and to working constructively with HRSA to achieve deduplication goals through mechanisms that do not undermine the programs purpose. We encourage HRSA to pursue the clearinghouse alternative and to preserve the up-front discount structure that has defined the 340B program for more than 30 years. 1735 S. Public Rd, Lafayette, CO 80026 | Phone 303.650.4460 | www.Clinica.org For questions, please contact Simon Smith, CEO, at simon.smith@clinica.org, or Melinda Gonzales, Director of Pharmacy, at mgonzales@clinica.org. Simon Smith President & CEO, Clinica Family Health & Wellness
HRSA-2026-0001-1396Temple University Health System2026-04-09T04:00Z29,112 chars
Please see the attached response to HRSA's RFI:340B Rebate Model Page 1 of 10 Abhinav Rastogi, MBA, MIS President and CEO Temple University Health System 3509 North Broad Street Philadelphia, PA 19140 April 9, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted Electronically via https://www.regulations.gov Re: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Temple University Hospital, a 340B covered entity serving a highly vulnerable population in Philadelphia, Pennsylvania, I thank you for the opportunity to comment on the above referenced notice of the Health Resources and Services Administration (HRSA). To preserve major safety-net institutions like Temple University Hospital (TUH) and the intent of the 340B program, we recommend that HRSA not implement a rebate model. The 340B Drug Pricing Program enables safety-net hospitals to purchase outpatient drugs at significant discounts from manufacturers. Its purpose is to help these facilities "stretch scarce federal resources as far as possible, reaching more patients and providing more comprehensive services." Congress designed the program as an upfront discount model, and a shift to a retrospective rebate structure represents a fundamental departure from that statutory framework. There is no cost to taxpayers since the program allows covered entities to leverage discounts from pharmaceutical companies, enabling hospitals to provide their communities with access to care that they might not otherwise receive. We estimate that the fiscal impact of the 340B rebate model pilot program will be about $3.8 million for TUH in 2026. This figure includes direct start-up costs, operational expenses, third- party processing fees, legal advice, training, and consulting expenditures, as well as the anticipated negative effect on cash flow and the expectation of manufacturer denials. If the rebate program is expanded in subsequent years to cover an additional 15 drugs each year within the drug negotiation program, projected costs would increase to more than $7 million in 2027 and $10 million in 2028. Notably, these costs are not associated with improvements in patient care or program integrity, but rather with administrative restructuring required by the rebate model. Page 2 of 10 Given their high profitability, pharmaceutical manufacturers suffer no hardship selling drugs to covered entities with an upfront discount. However, the planned 340B rebate model will cause financial and administrative challenges to covered entities, especially those whose patient populations are highly dependent on government payers. Importantly, these burdens would be imposed without clear evidence that a rebate model is necessary to address duplicate discount concerns or program integrity risks. Pharmaceutical manufacturers typically have operating margins above 20%, including the manufacturers of the ten drugs in the 2026 340B rebate model. In contrast, Pennsylvania general acute care hospitals had a 2024 average operating margin of 6.8%, with 37% of hospitals reporting negative margins and another 14% of hospital with margins between 04%, according to the Pennsylvania Healthcare Cost Containment Council (PHC4). With over half of Pennsylvania hospitals with slim or negative margins, the Commonwealths safety net system is already weak. Moreover, as H.R. 1 takes effect, hospital margins will further erode. This disparity underscores that the financial risk of a rebate model would be borne disproportionately by safety-net providers rather than manufacturers. Beginning on page 4 of this letter, we provide detailed responses to the specific questions posed in HRSAs RFI. Below is a concise summary of our concerns. 1. Increase Operational Costs. We anticipate additional operational costs of $650,000 that could otherwise be invested in patient care and community health improvement. This includes start-up costs, ongoing staff costs, 3d party platform and associated costs. These represent new administrative layers that do not exist under the current model. 2. Impede Cash Flow. TUH expects a $411,000 decrease in cash reserves in 2026 under the rebate model. Expanding the rebate model in 2027 to include 15 negotiated drugs would reduce cash reserves by $1.151 million; a further expansion in 2028 with 15 more drugs is expected to decrease cash reserves by $1.945 million. Rebates replace upfront discounts, causing delays in reimbursement that will challenge the operational budget and limit spending on routine costs and patient care. Payment delays effectively shift financing responsibility from manufacturers to safety-net providers, jeopardizing their liquidity and increasing their risk of breaking bond covenant and lowering credit ratings. 3. Incentivize Manufacturer Denials. If manufacturers deny discounts, covered entities will face negative consequences. Such denials would drive up drug expenses for TUH, limiting our capacity to offer medical care and servicesan outcome directly opposed to the intent of the 340B program. Absent clear, enforceable standards and penalties, the rebate model creates incentives for delay or denial that do not exist under the current upfront discount structure. Based on a denial rate of 18%, which corresponds to TUH's historical rate of denials from health insurers, TUHs savings from the 340B program would be negatively impacted by about $2.7 million in 2026. Although we could recover some of this on appeal, the process would nevertheless tie up significant capital as denials are adjudicated. We Page 3 of 10 would expect the cost of manufacturer denials to grow each year by about $3 million in 2027 and 2028. 4. Undermine Program Integrity. A rebate model will compromise the overall 340B program by reducing oversight and leading to practices that weaken trust, cause confusion, and reduce compliance. Fragmenting responsibility across multiple entities and platforms introduces new points of failure and increases audit complexity. 5. Reduce Care Access for All. The 340B rebate program will limit access to care for vulnerable groups, as well as patients on Medicare and those with commercial insurance. By decreasing funding for safety-net providers, the rebate model could lead to reductions in medical services, hinder investments in modern technology, facility development, and workforce initiatives, restricting care availability for everyone. While HRSA has expressed interest in exploring alternative models to address duplicate discounts and improve transparency, these objectives can be achieved through targeted, less disruptive approaches that preserve the upfront discount structure. The rebate model is not the least burdensome or most effective mechanism to achieve these goals. Background on Temple University Hospital Temple University Hospital (TUH) is an indispensable provider of health care in the largest city in America without a public hospital. As a disproportionate share hospital (DSH) and major academic medical center, TUH plays a critical role in maintaining access to care for low-income and medically complex patients. It serves the greatest volume and highest percentage of patients covered by Medicaid among Pennsylvanias full-service safety-net providers. 340B savings are not supplementary; they are foundational to TUHs ability to sustain these services and reinvest in patient care. Without the savings achieved through 340B, TUH could not invest in effective and innovative programs that meet the critical healthcare needs of our communities. TUHs Episcopal Campus and our new hospital for Women and Families both serve North Philadelphia and its surrounding Kensington neighborhood, which are widely known for their incidence of poverty; for open-air dealing of opioids tainted by fentanyl, xylazine, medetomidine and other adulterants; and for community-based and domestic violence. These overlapping public health challenges require sustained, resource-intensive clinical and social interventions that depend on stable funding streams like 340B. Over the last three years, TUH doubled the size of its Emergency Department, tripled the capacity of its Crisis Response Center, and opened a substance use disorder clinic on its Episcopal Campus. TUH also expanded its Burn Center to offer advanced wound care treatments and created an Intermediate Care Unit to support patients going through withdrawal from medetomidinea strong veterinary sedative now frequently found in Philadelphia's illicit drug supply. TUH is a critical component of Philadelphias Kensington Wellness Court, a diversionary program offering pathways to safety, treatment, and recovery as an alternative to incarceration. These investments reflect the type of community-based, cross-sector care delivery that the 340B program is intended to support. Page 4 of 10 Last year, TUH opened its hospital for Women and Families to expand access to medical and social services, aiming to lower maternal mortality in an area where many infants are born to mothers covered by Medicaid. The facility improves care for moms and babies with neonatal abstinence syndrome and integrates physical, behavioral, and substance use treatment for women. This integrated care model is particularly dependent on flexible funding streams that can support services not otherwise fully reimbursed under traditional payment systems. Hospitals in similarly challenged communities typically exit the market, close services associated with public health needs or suffer insolvency. In southeastern Pennsylvania, the recent closures of the Crozer Health System and Hahnemann Hospital, and the struggles of St. Christophers Hospital for Children serve as notable examples. TUH upholds its mission by maintaining a strong commitment to serving the community through prudent investments in public health and safety infrastructure. However, this commitment is increasingly difficult to sustain amid tightening margins and growing uncompensated care burdens. Although we acknowledge HRSA's responsibility in enforcing 340B discounts and evaluating alternative models, TUH would be substantially impacted by HRSAs proposals to shift from upfront discounts to rebates within the 340B Drug Pricing Program. Such a shift would not occur in a vacuumit would directly affect TUHs ability to maintain the programs and services described above. In response to HRSAs specific questions in its request for information, we outline below how a transition to a 340B rebate model would change how financial risk is distributed, escalate administrative workloads, influence cash flow, and further challenge the financial stability of TUH. Taken together, these impacts would have downstream consequences for patient access, service availability, and community health outcomes. Cost to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount Transactions. In FY25, our organization processed a total of 826,296 transactions under the 340B program: 487,000 mixed use 17,008 contract Rx 322,288 in-house pharmacy transactions. Current Administrative Costs. $7,371,137 total costs: $917,000 for operations and staffing $1,527,405 for third party administration $4,926,732 in pharmacy dispensing fees Key Cost Drivers. Operating under a 340B rebate model would require TUH to incur additional costs associated with operational oversight, compliance, third- party administration fees, IT infrastructure, and ongoing system expenses, as well as claims reconciliation to ensure timely and accurate realization of 340B savings. These requirements represent a shift from a point-of-sale discount model to a claims adjudication model, significantly increasing administrative intensity. Page 5 of 10 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Incremental and Operational Costs. The 2026 Maximum Fair Price (MFP) drug list covers ten drugs across over eighty-four National Drug Codes (NDC) in various pharmacy settings. Additional Administrative Costs. We estimate these to be $488,000 including first year operational and start-up costs of $101,000; ongoing expenses of $302,000; and third-party processing costs of $85,000 per year. If the rebate model expands to include more drugs and integrates with the Medicare Transaction Facilitator (MTF), part of CMS Medicare Price Negotiator Program, the amount would rise to about$553,000. These estimates assume stable system performance and do not account for costs associated with disputes, appeals, or system outages. Methodology and Assumptions. Building the necessary IT infrastructure requires updates to data fields across hospital electronic health records (EHR), retail pharmacy systems, and feeds to various contract pharmacy programs. Since drug manufacturers may use platforms beyond Beacon, multiple secure shell file transfer protocol (sFTP) feeds are needed. Updating these feeds involves revising specifications, testing, and validating data exchanges with third party administrators and pharmacy partners on several pharmacy platforms. Estimated Year 1 salary and benefits costs. We would expect to spend $101,000 in the first year, assuming salary and benefit cost at $97.50/hour, as follows: 1. A qualified 340B team, including a dedicated IT analyst, would spend 500 hours over ninety days to develop, review, test, and validate rebate model specifications at a cost of $49,000. 2. Additional salary and benefit of $52,000, assuming 16 hours per week for the remaining 38 weeks of the year. Ongoing costs. These include data extraction, ongoing claims submission across various TPA platforms, meeting deadlines like 45-day windows, rebate tracking and reconciliation, and claim audits. These tasks require two full-time professional staff, one 340B team member and one accounting/IT supportat an annual salary and benefit cost of $302,000. Third Party Processing Costs. The annual cost for a 340B rebate software system starts at $85,000, based on tracked data volume, but could increase to $150,000 per year if the rebate model expands to include more drugs and integrates with the intersections between the MTF and 340B rebate programs. The third-party platform is needed for processing claims, tracking submissions from both internal and contracted pharmacies, reconciling claim data, and overseeing denials. Current Tracking. We currently track about 700 MTF transactions each month for ten MFP drugs scheduled for 2026 (8,400 per year). This Page 6 of 10 number will increase significantly when fifteen MFP drugs are added in 2027 and 2028. Activities and functions included in incremental costs. The 340B Rebate Model Pilot Program imposes significant administrative demands, such as building IT infrastructure to facilitate data exchange between pharmacies and hospitals across various platforms. The model would require a considerable increase in daily tasks, including timely data submission, rebate tracking and reconciliation, appeals for missed rebates, and close monitoring of the process to ensure accuracy. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program Additional FTEs needed for implementation. As stated above; to implement the rebate model, 2 full-time employees (FTEs) are required: one will join the 340B team to oversee $15 million in spending on 10 MFP 2026 drugs, and another IT/accounting professional to provide ongoing support. If more drugs are added in in 2027, annual drug costs will rise by $27 million and $29 million, which will require 2 additional FTEs each year to manage at an additional $302,000 per year. Roles, Responsibilities, and Functions of Additional FTEs. As described above, one FTE will be assigned to address operational requirements related to the 340B Rebate Model. An additional FTE will focus on oversight, including financial reconciliation of claims. d. Systems Infrastructure for Implementation of a 340B Rebate Model Pilot Program Description of new IT infrastructure needed. Existing IT systems supporting the 340B program need updates to data specifications and infrastructure, including elements required for claims submission. If the rebate model becomes permanent, a dedicated IT platform will be necessary to track claims and payment reconciliations, with estimated annual costs of $150,000. Estimated costs for system development. Estimated platform and data feed build costs: $137,500 (labor); recurring labor costs: $135,000 plus benefits. Supporting a 340B rebate model for 10 drugs requires a software platform costing $85,000, with annual costs rising above $150,000 if additional drugs are added. e. Other Anticipated Costs Under a Potential 340B Rebate Model Pilot Program Additional associated costs. Legal review, training, and consulting services could exceed $100,000 in year 1. Organization specific factors: The 340B rebate model increases costs and reduces TUHs ability to serve its community. Managing the complex rebate process diverts resources from the original intent of the 340B statute, which was to help hospitals stretch federal funds and provide more comprehensive care to low-income communities. Page 7 of 10 Specific impacts on patient access to drugs. The 340B rebate program will limit access to drugs and care for vulnerable groups, as well as patients on Medicare and those with commercial insurance. By decreasing funding for safety-net providers, such a program could lead to reductions in medical services, hinder investments in modern technology, facility development, and workforce initiatives, restricting care availability for everyone. Additionally, the rebate model necessitates timely task completiontypically within 45 daysand failure to meet these requirements may compromise essential savings and patient care accessibility. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Impact of payment timing on cash flow. In 2026, the 10 drugs listed as associated with the MTF would cost our organization $38M per year if purchased at WAC prices, compared with the $23M that TUH currently pays with 340B discount. While rebates would theoretically offset this difference, TUH must commit at least 10 days' working capital during processing, causing a lasting cash reserve reduction of $411,000. If additional drugs are included in 2027, this reduction could exceed $2 million. This effectively converts the 340B program into an interest-free loan from safety-net providers to manufacturers. b. Typical payment terms under current wholesaler contracts. Wholesaler agreements and discounts are structured based on overall pharmaceutical expenditures, the proportion of 340B drug purchases, and payment terms. 340B drugs receive a greater discount than non-340B drug purchases, with each $10,000,000 reduction in 340B drug spend equating to a $100,000 decrease in cost of goods savings for safety net hospitals. Additionally, decreased 340B upfront spending may jeopardize the base cost of goods discount. This presents a significant concern if hospitals transition from an upfront drug discount model to a 340B rebate approach. c. Description of how a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. If our organization had to make substantial WAC purchases, payment timing to drug wholesalers would be significantly delayed compared to current agreements, making it harder for us to pay promptly. Extending the payment period from 15 to 30 days would add 0.75% to the total cost of goods, resulting in more than $315,000 in extra monthly fees. This estimate is based on the current average drug spend and the proportion of 340B versus non-340B spending. However, if WAC spending increased further, missing biweekly payment terms could cost us over $3,780,000 per year, since the 0.75% fee would apply to an even larger portion of WAC purchases due to fewer upfront 340B purchases. d. Description of how payment model could be structured to ensure that manufacturers adhere to a 10-day payment requirement. Manufacturers would be required to provide data verifying compliance with the 10-calendar-day payment requirement. Covered entities will have limited recourse in cases of manufacturer noncompliance unless meaningful penalties are established and strictly enforced. Such Page 8 of 10 penalties should include automatic interest accrual, civil monetary penalties, and potential exclusion from participation in the rebate model. e. Potential Structure for a 340B rebate model pilot to address cashflow. The 340B rebate model should include direct advance federal financial support to offset cash flow disruptions and extra costs. The COVID-19 safety net pool, which aided hospitals facing cash flow issues, is a useful precedent. A 340B safety net pool would address immediate liquidity needs and help hospitals maintain essential care during the pilot. Rebate Denials a. Guardrails for denials. Drug manufacturers should not be permitted to determine patient eligibility or interpret the provisions of the 340B Public Health Act. Their involvement is confined to denying claims solely in cases where payment has previously been issued to another entity or to the same entity. HRSAnot manufacturersshould retain primary interpretive authority over eligibility and compliance standards. b. Suggested standard process elements. Manufacturers should report denials, costs, and reasons associated with denials to HRSA to ensure compliance. Also, covered entities must have recourse to challenge denials in a fair and timely fashion. Data Collection by Covered Entities a. Description of TUH process for collecting, maintaining, and retaining relevant 340B data. 340B data is distributed across various platforms, including mixed-use third- party administration systems, contract pharmacy systems, claim hubs, pharmacy management systems, and hospital electronic medical record systems. Additionally, 340B purchase information is maintained within wholesaler and drug distributor systems. b. Current strategies to maintain data accuracy. TUH reviews all retail pharmacy and contract pharmacy claims produced internally to ensure compliance, accuracy, completeness, and consistency. It performs focused audits on mixed claims data. A transition to a rebate model would require segregating certain drugs and NDCs from each data source and compiling claims data for 340B Rebate Drugs from mixed use, in-house pharmacy, and contract pharmacy. The process would span several IT platforms, including electronic health records, in-house pharmacy operating systems, and numerous third-party contract pharmacy administrator systems, since the universe of 340B claims data is drawn from various sources. c. Impact of a 340B rebate model pilot on data collection. Implementing a 340B rebate model would increase ongoing data collection and claims reconciliation across retail, contract pharmacy, and mixed-use settings. Even tracking just 10 drugs could add over 8,400 annual claims, placing $15.1 million at WAC-340B cost at risk. Inadequate monitoring or reconciliation could harm our healthcare institution. d. Description of specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and Page 9 of 10 whether such data is already being furnished to existing third parties. The implementation of a 340B Rebate Model is not required, as all 340B claims can be accurately identified using a National Council for Prescription Drug Programs (NCPDP) claim submittal code or by uploading maximum fair price (MFP) claims that coincide with the 340B program. e. Recommendations for ensuring a potential 340B Rebate Model Pilot Program has appropriate guardrails to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. The 340B Rebate Model data feeds contain multiple data points that may enable manufacturers to solicit providers. Data fields should exclude protected health information, revenue figures, or any information not pertinent to the 340B drug pricing program. Program Integrity a. How a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. The 340B Rebate Model represents a major change from the original intent of the 340B drug pricing program. Manufacturer-developed rebate models create significant expense and administrative burden for safety net hospitals that will reduce access to care. b. Explanation of whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs. The 340B drug rebate model would significantly impede covered entities and do little to reduce duplicate discounts. There are more efficient methods to identify claims without withholding essential funds from safety net hospitals. ii. Reduce diversion or improper claims. The 340B drug rebate model introduces significant administrative complexities without effectively addressing diversion or improper claims, resulting in reduced access to care. iii. Increase pricing transparency for stakeholders. The 340B Rebate Model lowers transparency and reduces program savings intended for patient care. A simple claim identifier can prevent duplicate discounts, like both a 340B discount and an MFP rebate on the same prescription. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Sharing 340B claims data can be accomplished through a pharmacy switch or by submitting claims without pausing upfront discounts. Another approach is to add a claim modifier to claims that are both MFP and 340B, or to submit an MFP/340B claims via a portal, thus maintaining integrity and eliminating duplication of MFP and 340B savings. These approaches would achieve HRSAs stated goals of transparency and duplicate discount prevention without introducing the financial and operational risks associated with a rebate model. Importantly, they build on existing infrastructure rather than requiring entirely new systems. Page 10 of 10 d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. The 340B Rebate model will unnecessarily increase the complexity of the 340B drug pricing program. While it will add no meaningful value, it will severely limit hospitals ability to provide access to quality health care for the patients and communities they serve. Conclusion Any rebate model would create significant costs and burdens for Temple University Hospital, outweighing any benefits. HRSAs consideration of the rebate system is well intended but seems misguided. The proposed rebate model introduces substantial operational complexity, shifts financial risk to safety-net providers, and threatens to destabilize access to care in already fragile communitieswithout unmistakable evidence that it would meaningfully improve program integrity or reduce duplicate discounts. Importantly, HRSA has alternative policy tools availableincluding standardized claim identifiers, enhanced data sharing mechanisms, and targeted oversightthat can achieve the agencys stated goals without fundamentally altering the structure of the 340B program. To advance the sustainability of major safety-net institutions such as Temple University Hospital and uphold the objectives of the 340B program, we respectfully request that HRSA refrain from implementing a 340B Rebate Model Pilot. At a minimum, HRSA should defer implementation until more targeted and administratively feasible alternatives are fully evaluated and validated. Thank you for the opportunity to comment on this important topic. Should you have any questions or wish to discuss, please contact Katherine Levins at Katherine.Levins@tuhs.temple.edu. Sincerely, Abhinav Rastogi, MBA, MIS President & CEO Temple University Health System
HRSA-2026-0001-1397(no commenter metadata)2026-04-09T04:00Z41,311 chars
See attached file(s) \ April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Arizonas 23 Community Health Centers (CHCs) and the 870,000 patients they serve, the Arizona Alliance for Community Health Centers (AACHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states Community Health Centers, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, AACHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, AACHC explains: A. The importance of 340B savings to Arizonas CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 502,677 low-income and 149,371 uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. 1 HRSA requested input on these in the first paragraph of the RFI summary. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Arizona, CHCs routinely rely on 340B savings to support services such as behavioral health services, prenatal care, and clinical pharmacy programs. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Arizonas CHCs will provide details on these financing needs. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs in Arizona have already begun to lay off staff in pharmacy programs and outreach services. These reductions have led to pauses in the implementation of services that would minimize barriers to care like prescription home delivery programs for patients and has resulted in Arizona CHCs considering a pause in critical services like adult dental care. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. o Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: a. Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. b. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a. Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and b. Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a. Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. b. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Jessicay@aachc.org. Sincerely, Jessica Yanow, MPH President & CEO Arizona Alliance for Community Health Centers Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Arizonas 23 Community Health Centers (CHCs) and the 870,000 patients they serve, the Arizona Alliance for Community Health Centers (AACHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states Community Health Centers, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, AACHC strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, AACHC explains: The importance of 340B savings to Arizonas CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 502,677 low-income and 149,371 uninsured patients. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law and regulation, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Arizona, CHCs routinely rely on 340B savings to support services such as behavioral health services, prenatal care, and clinical pharmacy programs. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Arizonas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs in Arizona have already begun to lay off staff in pharmacy programs and outreach services. These reductions have led to pauses in the implementation of services that would minimize barriers to care like prescription home delivery programs for patients and has resulted in Arizona CHCs considering a pause in critical services like adult dental care. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Jessicay@aachc.org. Sincerely, Jessica Yanow, MPH President & CEO Arizona Alliance for Community Health Centers Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1398ECHO Community Health Care2026-04-09T04:00Z83,056 chars
See attached file(s) April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of ECHO Community Healthcare (ECHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: ECHC anticipates a loss from entity-owned pharmacy operations due to the numerous cuts to the program. ECHCs in-house pharmacy opened at the end of 2025 and is slow to ramp up. Quantifying the loss is not an option since their has been limited activity to date. We have seen a 50% reduction in cost savings for the contract pharmacies since its peak in 2020. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. ECHC has a very robust contract pharmacy network for 340B. Since 2020 ECHO has lost more than 50% of the cost savings once realized. Program expense YTD is 73% of gross cost savings from the program. This has significantly impacted our organization. We have eliminated services and corresponding FTEs as a result. ECHC serves 14,000 patients a year. ECHO subsidizes the dental program, provides adult immunizations and patient transportation with the program cost savings. In addition, ECHC opened an in-house dental clinic in 2025. This has been a slow ramp up and has been operating at a loss. The 340B program is subsidizing this loss. Without the additional cost savings, the services listed above would likely be eliminated. As ECHC has had three years of operating losses and would not be able to absorb the additional loss. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: ECHC provided $1,455,643 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: ECHC anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, ECHC anticipates an increase of $10K in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. ECHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Walgreens and Wellpartner (CVS, Walmart and Meijer) pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Vanderburgh and surrounding counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. ECHCs in-house pharmacy is providing 340B drugs to patients at a drastically reduced cost. We have 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 heard many testimonies from patients who could not afford their medications. Now through our program they are able to purchase and control their health issues. One patient paid hundreds at a retail chain pharmacy. Now gets the same medication for a fraction of the cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. ECHC estimates it would a significant cost to purchase these 10 drugs under the proposed rebate model. ECHC will have cash flow issues purchasing these at WAC and waiting for the rebate to be sent. Shifting the burden to the health center will likely be detrimental. The margins are very thin when things are flowing as they should. The margins are negative currently and would only increase the loss and jeopardize the financial viability of the health center. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, ECHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as dental services and in-house pharmacy SFS. Operating Hours: We anticipate needing to reduce our clinic hours or closing certain locations specifically impacting patient access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other services. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,460 uninsured and 3,358 homeless patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. ECHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Since ECHC has operating loses over the past three years. A line of credit would not be easy to obtain. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would face further financial hardship. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on ECHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays ECHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a negative impact to the health center. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion ECHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. ECHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ECHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at smcmillen@echochc.org Sincerely, Sandee McMillen, CEO ECHO Community Health Care April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of ECHO Community Healthcare (ECHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: ECHC anticipates a loss from entity-owned pharmacy operations due to the numerous cuts to the program. ECHCs in-house pharmacy opened at the end of 2025 and is slow to ramp up. Quantifying the loss is not an option since their has been limited activity to date. We have seen a 50% reduction in cost savings for the contract pharmacies since its peak in 2020. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. ECHC has a very robust contract pharmacy network for 340B. Since 2020 ECHO has lost more than 50% of the cost savings once realized. Program expense YTD is 73% of gross cost savings from the program. This has significantly impacted our organization. We have eliminated services and corresponding FTEs as a result. ECHC serves 14,000 patients a year. ECHO subsidizes the dental program, provides adult immunizations and patient transportation with the program cost savings. In addition, ECHC opened an in-house dental clinic in 2025. This has been a slow ramp up and has been operating at a loss. The 340B program is subsidizing this loss. Without the additional cost savings, the services listed above would likely be eliminated. As ECHC has had three years of operating losses and would not be able to absorb the additional loss. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: ECHC provided $1,455,643 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: ECHC anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, ECHC anticipates an increase of $10K in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. ECHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Walgreens and Wellpartner (CVS, Walmart and Meijer) pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Vanderburgh and surrounding counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. ECHCs in-house pharmacy is providing 340B drugs to patients at a drastically reduced cost. We have heard many testimonies from patients who could not afford their medications. Now through our program they are able to purchase and control their health issues. One patient paid hundreds at a retail chain pharmacy. Now gets the same medication for a fraction of the cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. ECHC estimates it would a significant cost to purchase these 10 drugs under the proposed rebate model. ECHC will have cash flow issues purchasing these at WAC and waiting for the rebate to be sent. Shifting the burden to the health center will likely be detrimental. The margins are very thin when things are flowing as they should. The margins are negative currently and would only increase the loss and jeopardize the financial viability of the health center. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, ECHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as dental services and in-house pharmacy SFS. Operating Hours: We anticipate needing to reduce our clinic hours or closing certain locations specifically impacting patient access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,460 uninsured and 3,358 homeless patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. ECHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Since ECHC has operating loses over the past three years. A line of credit would not be easy to obtain. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would face further financial hardship. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on ECHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays ECHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a negative impact to the health center. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion ECHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. ECHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ECHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at smcmillen@echochc.org Sincerely, Sandee McMillen, CEO ECHO Community Health Care
HRSA-2026-0001-1399Valleywise Health2026-04-09T04:00Z62,413 chars
See attached file(s) Stephen A. Purves, FACHE President & CEO Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 April 3, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: REQUEST FOR INFORMATION: 340B REBATE MODEL PILOT PROGRAM, HHS DOCKET NO. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Maricopa County Special Health Care District DBA Valleywise Health, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Valleywise Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Valleywise Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Valleywise Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Valleywise Health can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Valleywise Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Valleywise Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Valleywise Health is dedicated to compliance to the 340B Program and maintains staff to ensure that proper attention is given to review, audit and oversight of all aspects of our program. Valleywise Health is in constant communication with our contract pharmacy partners within the community and ensures that all decisions are within the statutes and guidance of HRSA and other 340B regulatory agencies. With the implementation of manufacturer exclusion and the reporting and monitoring through 340B ESP, as well as the 2026 rollout of the IRA/MFP process, the Valleywise Health team has expanded to additional personnel to meet the needs to fulfil these initiatives. Should the Rebate Model Pilot be enacted, the need for additional staff to review, track and reconcile these claims will increase exponentially. Using the IRA/MFP process as a guide, the additional time and manpower needed to facilitate proper attention to a program our size, would, at a minimum, require an additional three full time benefited employees at an estimated rate of $294,840 per year. This staff would need to be literate in 340B policy and have a strong working knowledge of the processes associated with Beacon and all platforms used in a Rebate Model Pilot. The 340B Apexus Certified Expert (ACE) training through the prime vendor program would also take time and involve testing fees that have not been budgeted for the organization. When weighing this prospect against the minimal returns already associated with current manufacturer exclusions, the IRA/MFP program and foreseeable delays in payment from a Rebate Model Pilot, the cost to revenue ratio is burdensome for Valleywise Health to carry. In addition to the administration costs associated with the running of the program, there are the increased, upfront purchasing prices of the medications themselves that must be a consideration to additional expenses. Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 When previous years ordering figures are calculated in the aspect of a Rebate Model, utilizing WAC pricing before a rebate, Valleywise Health can expect an additional purchase spend of $1,760,928.46 for 2027. That is a 578710% increase from the current 340B spend for the items from the 2026-2027 proposed Rebate Model. Drug Manufacturers and others proposing the Rebate Model Pilot would point out that most of these costs would be recouped through repayment after reconciling the claims, but this has significant consequences for covered entities. The Rebate Model asks organizations such as Valleywise Health, which operate on already thin margins, to float these costs over time, in the hopes that drug manufacturers will offer accurate and timely compensation. According to industry-wide experience with the IRA/MFP model already in place, to be housed on a similar platform, this compensation may not be as readily available as assured. Valleywise Health, while a large system within Maricopa County, nevertheless runs on constrained budgeting due to the margins received from a high Medicaid and uninsured/underinsured population. Valleywise Health prides itself on its ability to serve the under- and non-insured, but an initial $1.7 million increase would be devastating to our operational costs and affect areas of care outside of pharmacy. Staffing Impacts Under a Potential 340B Rebate Program. Valleywise Health does not currently have the staff needed to comply with a Rebate Program. Implementation of a potential 340B Rebate Model Pilot would require additional full-time employees to be hired. The logistical considerations needed to track and reconcile claims with manufacturer criteria over various mechanisms and platforms would require a substantial and unbudgeted increase in labor for this manual process. Valleywise Health estimates that, at a minimum, the addition of three Fulltime Employees will be needed to monitor, reconcile, and gather information for disputed claims. These employees would be required to be well versed in purchasing, 340B regulatory processes, and have a working familiarity with the Beacon platform and any other associated applications utilized by any manufacturer. These employees will need to be budgeted, hired, trained and in place before the expected 2027 start date to avoid a delay in rebate processing and repayment. Using the IRA/MFP program as a benchmark, HRSAs estimation of an additional 5 hours per week for the proposed Rebate Model Pilot is understating the required time and effort that would be needed to affect this model. The IRA/MFP program, currently dedicated to only 10 drugs for a subset of health plans (Medicare D), is a smaller initiative but has shown covered entities the true stress of these types of programs. The Rebate Model Pilot, encompassing a larger drug pool and inclusive of all insurers, all claims, and all purchases would be of a far more detriment to Valleywise Health. Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Valleywise Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. As with most pharmacy processing software, industry-wide, Valleywise Health utilizes pricing files that come directly from our product wholesaler. Our system is geared to use this pricing to calculate accurate totals for insurance payor adjudicated claims as well as cash pay patients. In the case of 340B eligible prescriptions, the pharmacy processing system uses upfront pricing to calculate the value of a prescription claim in real-time. Pharmacy staff can view transactions and ensure that the result is appropriate compensation for the cost of the drug, the materials used for packaging (vial, lid, label, etc.) as well as the contracted dispensing fee. In the proposed Rebate Model program, the pricing of medications and processing is not a straightforward proposition. Beginning with the pricing file which would now reflect WAC pricing instead of the 340B discount, the software would lead to an inaccurate pricing structure as a basis for prescription cost formulation. This would not only give a false sense of compensation, often resulting in a negative balance after adjudication, but would create overinflated pricing when used for Sliding Fee Discount (SFD) patients and those 340B eligible cash paying patients. The Rebate Model pricing would lead to exaggerated pricing, upfront, with the hopes that the rebate, whenever posted, will make the pharmacy whole concerning appropriate compensation. In essence, the proposed Rebate Model would ask the software to act in reverse order which it is not designed to do. This not only lends to a misalignment of finances for the pharmacy program but also can lead to unintentional errors in relation to contracted agreements with insurers and PBMs who mandate how claims are calculated and adjudicated. The pharmacy processing program used by Valleywise Health cannot compensate for all the necessary steps, tracking and reconciliation needed to ensure proper payment through the Rebate Model system. The zig zag logic needed to complete and provide accurate financial data is not available. The current, and foreseeable platform cannot be recalibrated without meticulous planning, design, and build of a computer system that will have to differentiate between various scenarios for the chosen drugs over multiple payor systems and accounting for the adjudication specifications which contractually bind Valleywise Health with each individual insurance and PBM. And while it is true that there are currently AI models presenting themselves to handle the Rebate Model program on behalf of covered entities, this software is extravagant in cost and would still require additional manpower to view, track and reconcile claims to ensure appropriate compensation and compliance with the 340B Program. Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 A price quoted from one vendor in this arena consists of $115k/yr for our eleven hospital owned retail pharmacies and is subject to increased costs should our claims surpass the prearranged compensation limit. For Valleywise Health, a disproportionate share hospital serving mostly under/uninsured and Medicare clientele with limited compensation and reimbursement, this would represent an extraordinary investment for unproven technology which would still require additional personnel to manage in addition to the burden on limited resources available on the internal technology and digital services team. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. The data collection for 340B ESP, while cumbersome, is relatively seamless when compared to the proposed Rebate Model Pilot. The elements gathered for 340B ESP reporting are specific to manufacturer exclusions and limited mainly to the contract pharmacy arena. These claims account for only a fraction (less than 3%) of the total Valleywise Health 340B Program and currently fall under the purview of Contract Pharmacy Third-Party Administrators (TPAs) that provides the resources for transmission of this information. The Rebate Model Pilot would significantly increase the burden on the covered entity, especially those, like Valleywise Health, which manage multiple hospital owned retail pharmacy locations. While the Rebate Model would be limited to only certain drugs for 2026- 2027, the number of claims raises exponentially. And, unlike 340B ESP reporting, the responsibility falls on the covered entity for reporting, transmission, reconciliation, and denial investigation. The data collection needed to participate fully in a Rebate Model Pilot would require access and meticulous data management of various reporting elements within the organization. Valleywise Health does not currently have the necessary technology or reporting capabilities needed to ensure that all data requirements are met from a singular source. Any reporting would need to be compiled from information over various platforms (wholesaler, EMR systems, and other database records) and maneuvered to fit the Beacon or other application requirements. This process would be labor intensive, requiring many systems, manhours, and various tools with the knowledge that any missed opportunities would result in a manufacturer denial of claim and at a monetary loss to the organization. This loss of savings would have impact to our programs utilized to support those most vulnerable patients of Valleywise Health. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Valleywise Health to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. If the proposed Rebate Model Program is to be viewed within the context of the current 2026 IRA/MFP Program, the ten-day window for reimbursement suggested to by the manufacturer is inaccurate at best. Assuming the timing and process are similar to the already standing Beacon platform, there will be a time differential lasting more than 10 days to complete the viewing, reconciliation and payment of rebate claims. This lapse in appropriate returns will cause Valleywise to float the costs of the selected medications over extended periods of time, likely several weeks, until these claims can be reconciled and the appropriate dollars seen deposited back to the pharmacy. As the Rebate Model grows to encompass more drugs over each year, the missing compensation would be expected to grow as well. Using the IRA/MFP as a guide, Valleywise Health can be expected to have an outstanding balance of at least $4,284 or more to float per month of 2026 extending past the 10-day period. And, again, it will only increase as more products are added with the Rebate Model or if the pharmacy increases the dispensation volumes of these drugs. This balance not only causes havoc with budgeting and reporting month after month but can also influence invoice and wholesaler payments as Valleywise Health holds an established agreement with our wholesaler to include payment terms of Net 10 days after statement. The 10-day payment period also does not take into consideration claims requiring resolution or contact with Beacon and the manufacturer for 340B eligibility. This process may take longer to resolve and, again, puts off fund collection further out than the promised window. As HRSA plans on letting manufacturers place their own logic as part of the Rebate Model program, this will lend itself to the increased chance of errors with data transmissions, etc. intensifying the time and manpower needed to resolve these issues and placing a further strain for appropriate compensation reclamation. Adverse Impacts of These Additional Costs And Burdens. All these many different costs and burdens add up. Unfortunately, that means that Valleywise Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Valleywise Health is the largest Disproportionate Share Hospital (DSH) in Maricopa County with a >51% allowable disproportionate share percentage and is one of the largest safety net health systems in Arizona. Valleywise Health is dedicated to fulfilling the spirit of the 340B Program, in that it maintains that all cost savings should be of benefit to the patients and public Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 we serve. To this end, Valleywise Health utilizes a majority of 340B savings to increase access to medications for our patients and their families. Outpatient 340B eligible prescriptions account for 96.3% of all prescriptions filled within the Valleywise Health system. Payor Percentile Commercial 10.6% Internal Plans 10.6% Medicaid 24.5% Medicare 8.6% SFD/340B Eligible Cash Pay 42% The proposed Rebate Model Pilot would have great repercussions for our Sliding Fee Discount (SFD) and 340B eligible cash pay patients as well as decrease reimbursement accuracy for Arizona State Medicaid claims. Utilizing upfront 340B pricing, Valleywise Health passes on the discount of all 340B qualifying medications to our clientele. The pharmacy processing software can use the 340B price file to formulate an accurate cost to the patient which is vastly below those prices charged by other facilities or chain pharmacies in the community. This has allowed patients with no insurance coverage to have greater access to their medication therapy when meeting the 340B eligibility requirements. This includes those medications currently proposed to be enrolled in the Rebate Model. Unfortunately, the Rebate Model, by not supplying upfront pricing, will make this program almost impossible to maintain for these selected drugs. The pharmacy software cannot process claims with the necessary logic to retroactively discount a medication and apply rebate and reimbursement data when/should this information be presented at a later time. Pharmacy staff would have to manually calculate the pricing with a greater chance of error and override the prescription processing software to ensure the patient is charged correctly. All this in the hope that the rebate will be forthcoming to match the invoice and financial reporting. Should the rebate payment be held for more than the 10-day period or be found to be lacking in manufacturer criteria for 340B eligibility, these debts would be carried by the pharmacy department until reconciled or have to be written off as a loss for the organization. Another issue that faces Valleywise Health concerns statutes put forth by Arizona state Medicaid. Per Arizona Health Care Cost Containment System (AHCCCS), organizations such as Valleywise Health can only charge the established CMS 340B cost of medication and a nominal $10.11 dispensing fee. Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 With a volume of 24.5% of Medicaid scripts, Valleywise Health barely breaks even with these claims when considering the cost of supplies and overhead. With a Rebate Model this puts an undue burden on covered entities trapped in such relationship with Medicaid Fee for Service (FFS) and state managed care organizations (MCOs). With reimbursement mandated by law, a Rebate Model is harmful to Safety Net organizations such as ours. The upfront pricing and purchasing of 340B priced products which have been streamlined with the pharmacy processing system will now faulter. As WAC costs replace 340B pricing in the product files, the system formulations would show a marked increase in cost during adjudication with the resulting claim reimbursement showing a negative outcome for every Medicaid claim related to these products. The pharmacy would carry these negative figures until appropriate rebate monies have been reclaimed to make the financial ledgers whole. And, again, if there should be an error within the Beacon system or within the logic used by the manufacturer these deficits may be maintained by the pharmacy for a long period of time or may never be resolved at all. There is also a question of legality regarding the transmission of WAC cost vs. 340B pricing. Arizona law mandates the transmission of 340B cost with modifiers for each Medicaid adjudication. Yet the Rebate Model Pilot will involuntarily require Valleywise Health to actively use an inaccurate base price (different than CMS) for the core of cost calculation. Has HRSA considered the ramifications of the Rebate Model to existing agreements held by a covered entity and the state, contracted with an insurance payor and PBM regarding transmission of pricing information, modifier usage and reimbursement rates? Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post- sale rebates. Valleywise Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. As a public, safetynet health system, our organization has historically operated with very low or no operating margin. The savings generated through the 340B Programs upfront drug pricing discounts are therefore not treated as excess revenue, but as a critical financing Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 mechanism to sustain access, stabilize cash flow, and preserve our mission to serve lowincome and uninsured patients. First, 340B savings directly enhance patient access to medications. The discounted drug pricing allows us to offer medications at costs patients can afford, costs that would otherwise be prohibitive for our patients. In the absence of 340B, many of these prescriptions would either go unfilled or require full or partial writeoff to charity care. In this way, 340B functions as a substitute for uncompensated care funding, ensuring patients receive medically necessary medications rather than forgoing treatment. Second, from a financial planning perspective, our system budgets 340B savings as a core component of cashonhand projections. Like many safetynet providers, we experienced significant financial stress during and after the COVID19 pandemic, including rapid cost escalation and deferred capital needs. Years of operating at substantial losses decreased our cash on hand to low double-digit levels. 340B savings have been essential part of our financial rebuilding of our liquidity and mitigating future financial shocks, including anticipated pressures associated with upcoming policy and reimbursement changes, such as OBBBArelated impacts. Maintaining sufficient cash reserves is not discretionary for our organization. It is necessary to ensure continuity of services for our patient population. Third, 340B savings support longterm sustainability and capital planning. Because our operating margins have been insufficient to routinely fund capital through operations, 340B provides flexibility to address nondeferrable investments, including: Replacement of endoflife clinical and information technology equipment, Ongoing maintenance of aging clinics and facilities, and Support for essential but nonreimbursed services, including our Family Resource Centers and other communitybased programs operating through our FQHCs. Many of our services are missioncritical yet operate at a financial loss. Without 340B savings, funding for these programs would directly compete with patient care resources or be deferred, increasing longterm risk. In summary, 340B savings are not isolated or surplus funds. They are deliberately incorporated into our financial planning to improve patient medication access, stabilize cashonhand for a historically lowmargin safetynet system, and sustain essential services, facilities, and equipment that would otherwise be financially unsupportable. The program enables us to fulfill our public health mission while responsible for preparing for future financial and policy challenges Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Utilization of the Beacon platform for IRA/MFP claims tracking is problematic at best. The interface is not intuitive, and the available information is lacking. The Beacon software was sold as an all-inclusive platform where claims could be loaded, viewed, reconciled, and denied claims clarified, but this is not the case. To date the Beacon portal requires at least two other applications (CMS, reconciliation software, etc.) for complete visibility into claims details and investigation into denials by the manufacturers. The current Beacon platform used for IRA/MFP processing only accounts for 10 specific drugs to a unique subset of Medicare D insurers. If the proposed Retail Model Pilot were to be embraced, the claims data would be drastically increased and the problematic issues concordantly substantial. But unlike the IRA/MFP process, the covered entity would be in a larger more ominous position financially, as claims in a Rebate Model Pilot would account for a larger opportunity for mismatched and unreconciled data on this platform. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Valleywise Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Valleywise Health maintains extensive internal auditing for all aspects of its 340B Program (hospital owned pharmacies, mixed use areas, and contract pharmacies). Per HRSA guidelines, Valleywise Health also submits to an annual third-party audit of its processes, logic, and outcomes. These audits and other regulatory statutes placed in the organizations policy and procedures document Valleywise Healths dedication to compliance with all HRSA statutes and guidelines; chief among them the avoidance of duplicate discount claims. Since the implementation of the Valleywise Health 340B Program, Valleywise Health has undergone three separate HRSA/OPA audits with satisfactory outcomes. Valleywise Health has also complied with all manufacturers good faith inquiries when these questions have been posed. All requested information was supplied within the deadline periods with no findings or repayments requested. Steve.Purves@valleywisehealth.org | 602.344.5522 | 2609 E. Roosevelt St., Phoenix, AZ 85008 With all the required avenues of checks-and-balances already built into the 340B Program to fend off duplicate discount claims and the responsibility of covered entities to comply with all governmental and manufacturer requests, etc., the further complications of a Rebate Model Pilot seem unnecessary and overly burdensome. For all of these reasons, Valleywise Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Valleywise Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Stephen A. Purves President & CEO Valleywise Health Phoenix, Arizona April 3, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: REQUEST FOR INFORMATION: 340B REBATE MODEL PILOT PROGRAM, HHS DOCKET NO. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Maricopa County Special Health Care District DBA Valleywise Health, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Valleywise Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Valleywise Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Valleywise Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Valleywise Health can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Valleywise Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Valleywise Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Valleywise Health is dedicated to compliance to the 340B Program and maintains staff to ensure that proper attention is given to review, audit and oversight of all aspects of our program. Valleywise Health is in constant communication with our contract pharmacy partners within the community and ensures that all decisions are within the statutes and guidance of HRSA and other 340B regulatory agencies. With the implementation of manufacturer exclusion and the reporting and monitoring through 340B ESP, as well as the 2026 rollout of the IRA/MFP process, the Valleywise Health team has expanded to additional personnel to meet the needs to fulfil these initiatives. Should the Rebate Model Pilot be enacted, the need for additional staff to review, track and reconcile these claims will increase exponentially. Using the IRA/MFP process as a guide, the additional time and manpower needed to facilitate proper attention to a program our size, would, at a minimum, require an additional three full time benefited employees at an estimated rate of $294,840 per year. This staff would need to be literate in 340B policy and have a strong working knowledge of the processes associated with Beacon and all platforms used in a Rebate Model Pilot. The 340B Apexus Certified Expert (ACE) training through the prime vendor program would also take time and involve testing fees that have not been budgeted for the organization. When weighing this prospect against the minimal returns already associated with current manufacturer exclusions, the IRA/MFP program and foreseeable delays in payment from a Rebate Model Pilot, the cost to revenue ratio is burdensome for Valleywise Health to carry. In addition to the administration costs associated with the running of the program, there are the increased, upfront purchasing prices of the medications themselves that must be a consideration to additional expenses. When previous years ordering figures are calculated in the aspect of a Rebate Model, utilizing WAC pricing before a rebate, Valleywise Health can expect an additional purchase spend of $1,760,928.46 for 2027. That is a 578710% increase from the current 340B spend for the items from the 2026-2027 proposed Rebate Model. Drug Manufacturers and others proposing the Rebate Model Pilot would point out that most of these costs would be recouped through repayment after reconciling the claims, but this has significant consequences for covered entities. The Rebate Model asks organizations such as Valleywise Health, which operate on already thin margins, to float these costs over time, in the hopes that drug manufacturers will offer accurate and timely compensation. According to industry-wide experience with the IRA/MFP model already in place, to be housed on a similar platform, this compensation may not be as readily available as assured. Valleywise Health, while a large system within Maricopa County, nevertheless runs on constrained budgeting due to the margins received from a high Medicaid and uninsured/underinsured population. Valleywise Health prides itself on its ability to serve the under- and non-insured, but an initial $1.7 million increase would be devastating to our operational costs and affect areas of care outside of pharmacy. Staffing Impacts Under a Potential 340B Rebate Program. Valleywise Health does not currently have the staff needed to comply with a Rebate Program. Implementation of a potential 340B Rebate Model Pilot would require additional full-time employees to be hired. The logistical considerations needed to track and reconcile claims with manufacturer criteria over various mechanisms and platforms would require a substantial and unbudgeted increase in labor for this manual process. Valleywise Health estimates that, at a minimum, the addition of three Fulltime Employees will be needed to monitor, reconcile, and gather information for disputed claims. These employees would be required to be well versed in purchasing, 340B regulatory processes, and have a working familiarity with the Beacon platform and any other associated applications utilized by any manufacturer. These employees will need to be budgeted, hired, trained and in place before the expected 2027 start date to avoid a delay in rebate processing and repayment. Using the IRA/MFP program as a benchmark, HRSAs estimation of an additional 5 hours per week for the proposed Rebate Model Pilot is understating the required time and effort that would be needed to affect this model. The IRA/MFP program, currently dedicated to only 10 drugs for a subset of health plans (Medicare D), is a smaller initiative but has shown covered entities the true stress of these types of programs. The Rebate Model Pilot, encompassing a larger drug pool and inclusive of all insurers, all claims, and all purchases would be of a far more detriment to Valleywise Health. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Valleywise Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. As with most pharmacy processing software, industry-wide, Valleywise Health utilizes pricing files that come directly from our product wholesaler. Our system is geared to use this pricing to calculate accurate totals for insurance payor adjudicated claims as well as cash pay patients. In the case of 340B eligible prescriptions, the pharmacy processing system uses upfront pricing to calculate the value of a prescription claim in real-time. Pharmacy staff can view transactions and ensure that the result is appropriate compensation for the cost of the drug, the materials used for packaging (vial, lid, label, etc.) as well as the contracted dispensing fee. In the proposed Rebate Model program, the pricing of medications and processing is not a straightforward proposition. Beginning with the pricing file which would now reflect WAC pricing instead of the 340B discount, the software would lead to an inaccurate pricing structure as a basis for prescription cost formulation. This would not only give a false sense of compensation, often resulting in a negative balance after adjudication, but would create overinflated pricing when used for Sliding Fee Discount (SFD) patients and those 340B eligible cash paying patients. The Rebate Model pricing would lead to exaggerated pricing, upfront, with the hopes that the rebate, whenever posted, will make the pharmacy whole concerning appropriate compensation. In essence, the proposed Rebate Model would ask the software to act in reverse order which it is not designed to do. This not only lends to a misalignment of finances for the pharmacy program but also can lead to unintentional errors in relation to contracted agreements with insurers and PBMs who mandate how claims are calculated and adjudicated. The pharmacy processing program used by Valleywise Health cannot compensate for all the necessary steps, tracking and reconciliation needed to ensure proper payment through the Rebate Model system. The zig zag logic needed to complete and provide accurate financial data is not available. The current, and foreseeable platform cannot be recalibrated without meticulous planning, design, and build of a computer system that will have to differentiate between various scenarios for the chosen drugs over multiple payor systems and accounting for the adjudication specifications which contractually bind Valleywise Health with each individual insurance and PBM. And while it is true that there are currently AI models presenting themselves to handle the Rebate Model program on behalf of covered entities, this software is extravagant in cost and would still require additional manpower to view, track and reconcile claims to ensure appropriate compensation and compliance with the 340B Program. A price quoted from one vendor in this arena consists of $115k/yr for our eleven hospital owned retail pharmacies and is subject to increased costs should our claims surpass the prearranged compensation limit. For Valleywise Health, a disproportionate share hospital serving mostly under/uninsured and Medicare clientele with limited compensation and reimbursement, this would represent an extraordinary investment for unproven technology which would still require additional personnel to manage in addition to the burden on limited resources available on the internal technology and digital services team. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. The data collection for 340B ESP, while cumbersome, is relatively seamless when compared to the proposed Rebate Model Pilot. The elements gathered for 340B ESP reporting are specific to manufacturer exclusions and limited mainly to the contract pharmacy arena. These claims account for only a fraction (less than 3%) of the total Valleywise Health 340B Program and currently fall under the purview of Contract Pharmacy Third-Party Administrators (TPAs) that provides the resources for transmission of this information. The Rebate Model Pilot would significantly increase the burden on the covered entity, especially those, like Valleywise Health, which manage multiple hospital owned retail pharmacy locations. While the Rebate Model would be limited to only certain drugs for 2026-2027, the number of claims raises exponentially. And, unlike 340B ESP reporting, the responsibility falls on the covered entity for reporting, transmission, reconciliation, and denial investigation. The data collection needed to participate fully in a Rebate Model Pilot would require access and meticulous data management of various reporting elements within the organization. Valleywise Health does not currently have the necessary technology or reporting capabilities needed to ensure that all data requirements are met from a singular source. Any reporting would need to be compiled from information over various platforms (wholesaler, EMR systems, and other database records) and maneuvered to fit the Beacon or other application requirements. This process would be labor intensive, requiring many systems, manhours, and various tools with the knowledge that any missed opportunities would result in a manufacturer denial of claim and at a monetary loss to the organization. This loss of savings would have impact to our programs utilized to support those most vulnerable patients of Valleywise Health. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Valleywise Health to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. If the proposed Rebate Model Program is to be viewed within the context of the current 2026 IRA/MFP Program, the ten-day window for reimbursement suggested to by the manufacturer is inaccurate at best. Assuming the timing and process are similar to the already standing Beacon platform, there will be a time differential lasting more than 10 days to complete the viewing, reconciliation and payment of rebate claims. This lapse in appropriate returns will cause Valleywise to float the costs of the selected medications over extended periods of time, likely several weeks, until these claims can be reconciled and the appropriate dollars seen deposited back to the pharmacy. As the Rebate Model grows to encompass more drugs over each year, the missing compensation would be expected to grow as well. Using the IRA/MFP as a guide, Valleywise Health can be expected to have an outstanding balance of at least $4,284 or more to float per month of 2026 extending past the 10-day period. And, again, it will only increase as more products are added with the Rebate Model or if the pharmacy increases the dispensation volumes of these drugs. This balance not only causes havoc with budgeting and reporting month after month but can also influence invoice and wholesaler payments as Valleywise Health holds an established agreement with our wholesaler to include payment terms of Net 10 days after statement. The 10-day payment period also does not take into consideration claims requiring resolution or contact with Beacon and the manufacturer for 340B eligibility. This process may take longer to resolve and, again, puts off fund collection further out than the promised window. As HRSA plans on letting manufacturers place their own logic as part of the Rebate Model program, this will lend itself to the increased chance of errors with data transmissions, etc. intensifying the time and manpower needed to resolve these issues and placing a further strain for appropriate compensation reclamation. Adverse Impacts of These Additional Costs And Burdens. All these many different costs and burdens add up. Unfortunately, that means that Valleywise Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Valleywise Health is the largest Disproportionate Share Hospital (DSH) in Maricopa County with a >51% allowable disproportionate share percentage and is one of the largest safety net health systems in Arizona. Valleywise Health is dedicated to fulfilling the spirit of the 340B Program, in that it maintains that all cost savings should be of benefit to the patients and public we serve. To this end, Valleywise Health utilizes a majority of 340B savings to increase access to medications for our patients and their families. Outpatient 340B eligible prescriptions account for 96.3% of all prescriptions filled within the Valleywise Health system. The proposed Rebate Model Pilot would have great repercussions for our Sliding Fee Discount (SFD) and 340B eligible cash pay patients as well as decrease reimbursement accuracy for Arizona State Medicaid claims. Utilizing upfront 340B pricing, Valleywise Health passes on the discount of all 340B qualifying medications to our clientele. The pharmacy processing software can use the 340B price file to formulate an accurate cost to the patient which is vastly below those prices charged by other facilities or chain pharmacies in the community. This has allowed patients with no insurance coverage to have greater access to their medication therapy when meeting the 340B eligibility requirements. This includes those medications currently proposed to be enrolled in the Rebate Model. Unfortunately, the Rebate Model, by not supplying upfront pricing, will make this program almost impossible to maintain for these selected drugs. The pharmacy software cannot process claims with the necessary logic to retroactively discount a medication and apply rebate and reimbursement data when/should this information be presented at a later time. Pharmacy staff would have to manually calculate the pricing with a greater chance of error and override the prescription processing software to ensure the patient is charged correctly. All this in the hope that the rebate will be forthcoming to match the invoice and financial reporting. Should the rebate payment be held for more than the 10-day period or be found to be lacking in manufacturer criteria for 340B eligibility, these debts would be carried by the pharmacy department until reconciled or have to be written off as a loss for the organization. Another issue that faces Valleywise Health concerns statutes put forth by Arizona state Medicaid. Per Arizona Health Care Cost Containment System (AHCCCS), organizations such as Valleywise Health can only charge the established CMS 340B cost of medication and a nominal $10.11 dispensing fee. With a volume of 24.5% of Medicaid scripts, Valleywise Health barely breaks even with these claims when considering the cost of supplies and overhead. With a Rebate Model this puts an undue burden on covered entities trapped in such relationship with Medicaid Fee for Service (FFS) and state managed care organizations (MCOs). With reimbursement mandated by law, a Rebate Model is harmful to Safety Net organizations such as ours. The upfront pricing and purchasing of 340B priced products which have been streamlined with the pharmacy processing system will now faulter. As WAC costs replace 340B pricing in the product files, the system formulations would show a marked increase in cost during adjudication with the resulting claim reimbursement showing a negative outcome for every Medicaid claim related to these products. The pharmacy would carry these negative figures until appropriate rebate monies have been reclaimed to make the financial ledgers whole. And, again, if there should be an error within the Beacon system or within the logic used by the manufacturer these deficits may be maintained by the pharmacy for a long period of time or may never be resolved at all. There is also a question of legality regarding the transmission of WAC cost vs. 340B pricing. Arizona law mandates the transmission of 340B cost with modifiers for each Medicaid adjudication. Yet the Rebate Model Pilot will involuntarily require Valleywise Health to actively use an inaccurate base price (different than CMS) for the core of cost calculation. Has HRSA considered the ramifications of the Rebate Model to existing agreements held by a covered entity and the state, contracted with an insurance payor and PBM regarding transmission of pricing information, modifier usage and reimbursement rates? Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Valleywise Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. As a public, safetynet health system, our organization has historically operated with very low or no operating margin. The savings generated through the 340B Programs upfront drug pricing discounts are therefore not treated as excess revenue, but as a critical financing mechanism to sustain access, stabilize cash flow, and preserve our mission to serve lowincome and uninsured patients. First, 340B savings directly enhance patient access to medications. The discounted drug pricing allows us to offer medications at costs patients can afford, costs that would otherwise be prohibitive for our patients. In the absence of 340B, many of these prescriptions would either go unfilled or require full or partial writeoff to charity care. In this way, 340B functions as a substitute for uncompensated care funding, ensuring patients receive medically necessary medications rather than forgoing treatment. Second, from a financial planning perspective, our system budgets 340B savings as a core component of cashonhand projections. Like many safetynet providers, we experienced significant financial stress during and after the COVID19 pandemic, including rapid cost escalation and deferred capital needs. Years of operating at substantial losses decreased our cash on hand to low double-digit levels. 340B savings have been essential part of our financial rebuilding of our liquidity and mitigating future financial shocks, including anticipated pressures associated with upcoming policy and reimbursement changes, such as OBBBArelated impacts. Maintaining sufficient cash reserves is not discretionary for our organization. It is necessary to ensure continuity of services for our patient population. Third, 340B savings support longterm sustainability and capital planning. Because our operating margins have been insufficient to routinely fund capital through operations, 340B provides flexibility to address nondeferrable investments, including: Replacement of endoflife clinical and information technology equipment, Ongoing maintenance of aging clinics and facilities, and Support for essential but nonreimbursed services, including our Family Resource Centers and other communitybased programs operating through our FQHCs. Many of our services are missioncritical yet operate at a financial loss. Without 340B savings, funding for these programs would directly compete with patient care resources or be deferred, increasing longterm risk. In summary, 340B savings are not isolated or surplus funds. They are deliberately incorporated into our financial planning to improve patient medication access, stabilize cashonhand for a historically lowmargin safetynet system, and sustain essential services, facilities, and equipment that would otherwise be financially unsupportable. The program enables us to fulfill our public health mission while responsible for preparing for future financial and policy challenges Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Utilization of the Beacon platform for IRA/MFP claims tracking is problematic at best. The interface is not intuitive, and the available information is lacking. The Beacon software was sold as an all-inclusive platform where claims could be loaded, viewed, reconciled, and denied claims clarified, but this is not the case. To date the Beacon portal requires at least two other applications (CMS, reconciliation software, etc.) for complete visibility into claims details and investigation into denials by the manufacturers. The current Beacon platform used for IRA/MFP processing only accounts for 10 specific drugs to a unique subset of Medicare D insurers. If the proposed Retail Model Pilot were to be embraced, the claims data would be drastically increased and the problematic issues concordantly substantial. But unlike the IRA/MFP process, the covered entity would be in a larger more ominous position financially, as claims in a Rebate Model Pilot would account for a larger opportunity for mismatched and unreconciled data on this platform. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Valleywise Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Valleywise Health maintains extensive internal auditing for all aspects of its 340B Program (hospital owned pharmacies, mixed use areas, and contract pharmacies). Per HRSA guidelines, Valleywise Health also submits to an annual third-party audit of its processes, logic, and outcomes. These audits and other regulatory statutes placed in the organizations policy and procedures document Valleywise Healths dedication to compliance with all HRSA statutes and guidelines; chief among them the avoidance of duplicate discount claims. Since the implementation of the Valleywise Health 340B Program, Valleywise Health has undergone three separate HRSA/OPA audits with satisfactory outcomes. Valleywise Health has also complied with all manufacturers good faith inquiries when these questions have been posed. All requested information was supplied within the deadline periods with no findings or repayments requested. With all the required avenues of checks-and-balances already built into the 340B Program to fend off duplicate discount claims and the responsibility of covered entities to comply with all governmental and manufacturer requests, etc., the further complications of a Rebate Model Pilot seem unnecessary and overly burdensome. For all of these reasons, Valleywise Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Valleywise Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Stephen A. Purves President & CEO Valleywise Health Phoenix, Arizona
HRSA-2026-0001-1400(no commenter metadata)2026-04-09T04:00Z10,357 chars
See attached file(s) Liberlynayton 1353 North Travis Street Liberty, TX 77575 00' agiii (;/( )N,u l,1)l(:.Al. \ ( :1;:v1,11z (936) 336-7316 (936) 336-7772 fax The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3408 Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 DearAdministrator Engels: On behalf of Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575 , has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, understood that we would incur some reasonable administrative costs. We designed our hiring, operations and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Based on our assessment, current staff cannot take on additional work without affecting productivity, that we are facing a situation of "excessive workload" that necessitates a new headcount. Consideringthat up to 25 drugs could be included in the Rebate Program, a 1.0 FTE is totally required to run the program. Currently also, we only have two staff to run our Electronic Health Record, 340B files and rebates as well as overall IT situation, adding a specialized resource is essential for compliance and financial viability. Operational Complexity: The new rebate model transitions from upfront discounts to a "pay now, get paid later" structure, increasing operational burden and creating a "must" for new automated, staff-managed processes. Data Intensive Processes: Staff must manage multiple Third-Party Administrators (TPAs) and integrate them with the EHR to identify 340B-rebate eligible claims, which requires specialized knowledge. Reconciliation & Compliance: The team must handle data nuances-such as cash prescriptionsand reconcile claims with rebate payments to prevent lost revenue and ensure compliant, accurate audits. Preventing Financial Loss: Without dedicated staff, manual processes can lead to errors in reporting, delayed payments, and failure to comply with HRSA regulations, leading to potential penalties. The Pilot will also require robust data systems that can: Ingest and Screen Claims:Automated systems for identifying, validating, and submitting 340B-eligible claims to manufacturers. p Track Rebate Performance: Dashboards to monitor cash flow, rebate timelines, and claim statuses (10-day window). Manage Financials: Systems to manage the transition from upfront discounts to purchasing at a higher cost followed by a sometimes delayed, rebate payment. Manage Disputes: New workflows to handle denied rebates Data Challenges & Manual Work o Difficulty Providing Claims Data: Medical claims data is often in fragmented EHR systems that don't share a direct, automated feed with Third-Party Administrators (TPAs), leading to difficulty in identifying the exact 340B-qualified patient and providerfor a claim. Manual Workload: Without a direct, automated data feed, staff must manually pull, screen, and submit this data to the TPA. a Administrative Burden: The shift to a rebate model requires tracking every single unit of drug and its 340B eligibility, increasing the administrative burden significantly. Payment TimingAnd Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Liberty Dayton Regional Medical Center, located at 1353 N. Travis St, Liberty, Texas 77575, to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required underthe prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Negative Impact (Operational): Despite the 10-day requirement, the reversal of cash flow necessitates "floating" the high acquisition cost for 10+ days (or longer if submissions are rejected), which can strain cash reserves, particularly for safety-net providers on thin margins. Impact on Working Capital:Organizations may need to increase their working capital to finance the upfront cost of the high-cost drugs selected for the pilot (e.g., Eliquis, Xarelto, Jardiance) Rebate Delays/Denials: If manufacturers fail to meet the 10-day requirement, or if they deny claims based on inaccurate data or administrative errors, the 340B savings are delayed or lost entirely. Increased Administrative Costs: The administrative burden to manage daily, "forensic-level" tracking of claims, documentation, and reconciliation is high, with estimates that it could cost some entities over $150,000-$500,000 annually, an amount Liberty Dayton Regional Medical Center will not be able to sustain. Increased Operational Complexity: The need to map data, manage the 45-day submission window, and handle potential denials adds significant staff time and technology costs. Accounting and Auditing Hurdles: A lag between drug purchase (expense) and rebate receipt (income) will require new "allowance for doubtful rebate" accounts and may impact reported margins at year-end Liberty Dayton Regional Medical Center is a 25-bed critical access hospital that services the community of Liberty County an estimated 100,000 people who are mostly indigent and self-pay. In orderto comply with the requirements ofthis 340B Rebate Pilot Program, we need to come up with: 1. $42,000 for a dedicated IT personnel and equipment 2. $16,000 for new Oracle (EHR) interface setup 3. $39,500 for a dedicated Pharmacy Technician 4. $ An estimated $150,000 -$300,000 cash flow for drug costs and TPA payments For all of these reasons Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. lf, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Liberty Dayton Regional Medical Center, located at 1353 N. Travis St. Liberty, Texas 77575, and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Rhonda Campbell, RN, RHCEOC Liberty Dayton Regional Medical Center, 1353 N. Travis St. Liberty, Texas 77575
HRSA-2026-0001-1401Primary Healthcare Center of Dade, Inc.2026-04-09T04:00Z61,079 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Primary Health Care Center of Dade, Inc. 340B ID CH044790 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors Curant, RxPreferred, Walgreens, Wellpartner Contact Name Richard Christman Contact Email christmanr@primaryhealthcarecenter.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 10,000 contract pharmacy and in-house 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $850k in administrative 340B cost for contract pharmacy and in-house pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Continued program administrative duties could result in the need for a specific 340B employee which would mean that another employee would have to be eliminated elsewhere because funds are not available for additional staff. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 24 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 24 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 24 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 24 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 24 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 24 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 24 340B Rebate Intake Form Field Response i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 24 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Diminished access to drugs for patients and decreased patient care would be a direct result of the 340B rebate model. Under a rebate structure, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. These financial delays also create significant operational risks. Wholesalers typically have strict repayment terms, and if rebaterelated cashflow issues cause late payments, wholesalers may cut an FQHC off from purchasing 340B drugs. When this happens, we are no longer able to provide our patients with the savings and affordable access that the 340B program is designed to support. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for thevulnerable populations we serve. Field Response 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 24 340B Rebate Intake Form 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Any delay in payment would have a devastating effect on cash flow, as FQHCs are not highmargin or highcashflow operators. Our organizations days cash on hand has ranged from only 7 to 20 days over the past 12 months, leaving very little buffer to absorb delayed reimbursement. Under a rebate model, we would be required to pay the full acquisition cost of highcost medications upfront while waiting for rebate payments to arrive, creating substantial financial strain and exposing us to real liquidity risk. Having to carry these costs for even ten days could force us to reduce other expenses or potentially reduce staff simply to cover the increased cash demands of purchasing 340B drugs. Any reduction in staff would directly diminish patient care capacity and limit access to essential services. The resulting cashflow pressure would also reduce our ability to maintain medication assistance programs, support wraparound services, and respond to patient needs in real time. In short, delayed payment timing under a rebate model would introduce serious financial risks that threaten both operational stability and patient access to care. Page 10 of 24 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard 30day window from the invoice date, which is generally the same payment timeline applied to our non340B drug purchases. While these terms are consistent across drug types, the consequences of late payment are far more severe for 340B products. The largest wholesalers we work with impose immediate late fees and will cut off our ability to order 340B drugs if payments are not made on time. This is not a hypothetical riskwe have been cut off before. When a cutoff occurs, it creates a domino effect that is extremely difficult to reverse. Once we are unable to order 340B drugs, we cannot offer 340B pricing to our patients, which means they lose access to the savings the program is designed to provide. At the same time, we stop receiving the 340B savings that help sustain our pharmacy services and patient support programs. Reestablishing access after a cutoff is challenging and can take time, during which patients experience reduced access to affordable medications. Under the current upfront discount model, these 30day terms are manageable because the 340B price is applied immediately at the point of sale, allowing us to avoid carrying the full acquisition cost. However, a shift to a rebatebased model would require us to pay the full drug cost within the same 30day window while waiting for rebate reimbursement later, significantly increasing the risk of late payments and potential wholesaler cutoffs. This would jeopardize both our operational stability and our ability to provide affordable medications to the patients who rely on us. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. Page 11 of 24 340B Rebate Intake Form 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. We typically remit payment within 30 to 40 days. It is not uncommon for us to incur late fees from the drug wholesaler. 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. Our cash flow does not allow us to pay cost up front and be repaid later. Cash days on hand are not available to pay the cost up front. Page 12 of 24 340B Rebate Intake Form 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. The only way to "require" that the rebate be paid within 10 days is to hit the manufacturers with high fees. Most concerning is the implied possibility that a manufacturer would have the ability to deny the payment of the rebate. Seems as though there could be significant delays related to the manufacturers denying payments as a means to actually delay payment. Furthermore depending on the amount of denials from manufacturers, it might be necessary to employ staff to manage denials from manufacturers similar to the process of managing denials with insurance companies. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. The rebate model is not optimal for FQHC's which have very tight cash flow and can not float the cost for period of time. Not to mention the administrative burden of tracking the repayments and then having to address any denials. Field Response 3. Rebate Denials Process Page 13 of 24 340B Rebate Intake Form 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4. Data Collection By Covered Entities Page 14 of 24 340B Rebate Intake Form 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 15 of 24 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 16 of 24 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 17 of 24 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 18 of 24 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 19 of 24 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 20 of 24 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 21 of 24 340B Rebate Intake Form 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. Page 22 of 24 340B Rebate Intake Form 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 23 of 24 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 24 of 24
HRSA-2026-0001-1402Oconee Valley Healthcare, Inc.2026-04-09T04:00Z58,816 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name OCONEE VALLEY HEALTHCARE, INC. 340B ID CH0421720 Entity Type HRSA - FUNDED HEALTH CENTER State GEORGIA In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors 340B DIRECT, PHARAMFORCE, WALGREENS, WELLPARTNER Contact Name DAVE RINGER Contact Email dringer@ovhealth.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 70,000 contract pharmacy 340B transaction. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $1M in administrative 340B cost for contract pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing costs represent a significant driver, as dedicated personnel are required to manage 340B program compliance and ongoing program monitoring. Additional labor demands arise from the need for cross-functional coordination between pharmacy, finance, compliance, and clinical teams. Third-party vendors and contract pharmacy arrangements also drive costs. OVH relies on external vendors for 340B program administration, audit support, and compliance monitoring. Additionally, contract pharmacy networks involve complex fee structures, including dispensing fees, administrative fees, and revenue-sharing arrangements, all of which impact net program savings. Compliance and regulatory requirements are a substantial cost driver due to the highly regulated nature of the 340B program. Entities must allocate resources toward routine internal audits, policy development, staff training, and preparation for HRSA audits. The need to maintain auditable records and ensure adherence to evolving federal guidance increases both direct and indirect administrative burden. Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 23 340B Rebate Intake Form Field Response i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 23 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 23 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 23 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 23 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 23 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 23 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 23 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 23 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 10 of 23 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Page 11 of 23 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4. Data Collection By Covered Entities 3. Rebate Denials Process Page 12 of 23 340B Rebate Intake Form 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 13 of 23 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 14 of 23 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 15 of 23 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 16 of 23 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 17 of 23 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 18 of 23 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 19 of 23 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 20 of 23 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 21 of 23 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 22 of 23 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 23 of 23
HRSA-2026-0001-1403Palmetto Health Council, Inc.2026-04-09T04:00Z59,863 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Palmetto Health Council, Inc. 340B ID CH045260 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors Wellpartner Contact Name Dr. Tara Brown Contact Email t.brown@yourtownhealth.com Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 18,000 in-house pharmacy 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $230k in administrative 340B cost for in-house pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Labor and benefits represent the largest component. Additional key cost drivers include information technology systems that support EHR integration, pharmacy management, and reporting; third-party vendors that provide in-house and contract pharmacy administration; and compliance and administrative oversight, including policy maintenance, staff training, and financial management. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 25 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 25 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 25 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 25 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 25 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 25 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 25 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. One-time Costs: Legal review of rebate model agreements, policies, and compliance implications to ensure alignment with federal 340B requirements and FQHC regulations; nformation technology (IT) system modifications, including electronic health record (EHR), pharmacy management systems, and third-party administrator (TPA) configuration to track eligible claims, manage rebate submissions, and reconcile payments; Staff training for pharmacy, billing, compliance, and finance personnel on new workflows, documentation requirements, and reconciliation processes; Policy and procedure development, including compliance monitoring protocols. Recurring costs: Ongoing administrative and staff time required for rebate tracking, reconciliation, and dispute resolution. Additional compliance oversight and auditing to ensure proper identification of eligible prescriptions and rebate accuracy; Consulting or TPA support services to manage increased operational complexity; Cash flow management costs associated with purchasing medications at higher upfront costs prior to receipt of rebates. Page 8 of 25 340B Rebate Intake Form ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. We operate on narrow financial margins and rely on the upfront 340B discount to sustain clinical services, care coordination, and enabling services for underserved populations. Patients includes a high percentage of low-income, uninsured, and underinsured individuals, increasing financial sensitivity to delays in cost recovery. Limited administrative and IT infrastructure compared to larger health systems may make implementation and ongoing management of rebate reconciliation more burdensome. Page 9 of 25 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Cash flow delays: Requiring covered entities to pay full acquisition cost upfront and wait for rebates may reduce available operating capital, potentially limiting our ability to maintain current medication inventories or expand services; Service reductions: Reduced 340B savings may limit our ability to fund enabling services such as medication assistance programs, care coordination, and chronic disease management. Operational delays: Increased administrative complexity may result in delays resolving rebate disputes, further affecting financial sustainability. Disproportionate impact on vulnerable populations: Patients served by FQHCs, including uninsured and low-income individuals, may face increased barriers to obtaining affordable medications if program savings are reduced or delayed. Cash flow constraints associated with delayed rebates could significantly impact our ability to maintain current pharmacy services and patient care programs. Field Response 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 10 of 25 340B Rebate Intake Form 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. It would significantly affect our cash flow and introduce financial risk. Under the current 340B model, our organization purchases medications at the discounted 340B acquisition cost, which allows predictable and sustainable pharmacy operations. Under a rebate model, we would be required to purchase medications at full wholesale acquisition cost (WAC) or other higher, non-340B prices and wait for rebate reimbursement. Even if rebates are paid within ten calendar days of submission of a complete claim, this structure would require our organization to carry substantially higher upfront inventory costs. Given the volume and cost of medications dispensed, this could result in tens of thousands of dollars in additional working capital requirements at any given time. This creates several financial risks, including: Cash flow strain due to the lag between drug purchase and rebate receipt. Increased reliance on operating reserves or lines of credit, potentially incurring interest expense. Financial exposure if rebates are delayed, disputed, or denied. Reduced financial stability and predictability, which could affect our ability to sustain patient services supported by 340B savings. As a safety-net provider operating on narrow margins, even short payment delays or discrepancies could have meaningful operational and financial consequences. 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs are generally consistent with standard pharmaceutical wholesaler terms and typically require payment within approximately 30 calendar days from the invoice date. These payment terms generally do not differ between 340B and non-340B drug purchases. Our organization benefits from the ability to purchase 340B drugs at discounted acquisition cost upfront, which eliminates the need to carry higher-cost inventory while awaiting reimbursement. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our organization does not currently receive any prompt payment incentives of discounts from our drug wholesalers. Page 11 of 25 340B Rebate Intake Form 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 30 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. Currently, our organization pays the already-discounted 340B acquisition cost within standard wholesaler payment terms. Under a rebate model, we would be required to pay the full, undiscounted acquisition cost upfront and then wait for rebate reimbursement. This shift would increase upfront cash requirements substantially; introduce uncertainty related to rebate timing, accuracy, and disputes; eliminate the predictability associated with upfront 340B discounts; increase administrative burden related to reconciliation and tracking. Alternative payment arrangements that could mitigate these impacts include: advance rebate payments or prospective discounting mechanisms; escrow arrangements funded by manufacturers to ensure timely rebate availability; guaranteed rebate payment timeframes with financial penalties for delays. these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. Mandatory, enforceable payment deadlines with automatic financial penalties for late payments. Interest accrual requirements on overdue rebate payments. Escrow or pre-funding requirements to ensure rebate funds are readily available. Page 12 of 25 340B Rebate Intake Form 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Standardized, uniform rebate submission and validation processes to minimize disputes and delays. Automated rebate processing systems with transparent tracking and reporting capabilities. Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3. Rebate Denials Process Page 13 of 25 340B Rebate Intake Form 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4. Data Collection By Covered Entities Page 14 of 25 340B Rebate Intake Form 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. Page 15 of 25 340B Rebate Intake Form 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5. Duplicate Discount Prevention Page 16 of 25 340B Rebate Intake Form 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. Page 17 of 25 340B Rebate Intake Form 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 18 of 25 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 19 of 25 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 20 of 25 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 21 of 25 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 22 of 25 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 23 of 25 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 24 of 25 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 25 of 25
HRSA-2026-0001-1404Cornell Scott Hill Health Center Corp2026-04-09T04:00Z8,127 chars
See attached file(s) 1 Background Since 1968, we have provided high-quality, personalized, convenient care for everyone and our services are designed to restore and sustain your health. The best healthcare works with you to ensure that the service you receive is tailored to meet your unique needs efficiently, effectively, and with compassion thats how at Cornell Scott-Hill Health Center provide care. We offer comprehensive primary care for adults and children, including adult medicine, pediatrics, dentistry, child and family guidance, womens health, behavioral health, and so much more from multiple New Haven, West Haven, and Ansonia locations. And many of these care services are available via telehealth as a more convenient option for you and/or your family. Our pharmacy, located at 400 Columbus Avenue, also offers delivery services, ensuring that your prescriptions are filled and arrive on time. We have School-Based Health Centers available at participating schools in New Haven, Hamden, or West Haven. Organizational Position: Cornell Scott-Hill Health Center (CSHHC) strongly urges the Health Resources and Services Administration (HRSA) to exempt Federally Qualified Health Centers (FQHCs) from participation in the proposed 340B Rebate Model Pilot Program. Based on CSHHCs internal operational analysis, audited pharmacy performance, and multi-year financial modeling, the proposed rebate model would significantly increase administrative burden, destabilize CSHHC cash flow, and materially impair patient access to affordable medications. These impacts directly contradict the statutory intent of the 340B Drug Pricing Program to enable safety-net providers to stretch scarce federal resources to serve vulnerable populations. 2 Operational Impact: Under the current 340B program structure, CSHHC has operationalized pharmacy services using predictable upfront discounts applied at the time of drug purchase. The proposed rebate model fundamentally significantly complicates this structure by requiring claim level data submission, reconciliation, and dispute resolution after dispensing. CSHHCs most recent internal 340B audit identified 8,392 claims with preliminary eligibility concerns requiring review and validation, demonstrating the scale of claims-level oversight already required under existing rules. A rebate-based model would substantially expand this workload by: Requiring submission of claims data within 45 days Requiring rebate reconciliation and monitoring within 10 days post claim submission Adding ongoing dispute management and documentation tracking across manufacturers Implementation of this more complicated process would also require significant system changes, including Epic Willow reconfiguration, enrollment in manufacturer-selected platforms, and expanded reconciliation workflows across in-house and contract pharmacy operations. Collectively, these changes would convert routine pharmacy purchasing into a high-volume data and audit operation, diverting limited administrative and clinical resources away from direct patient care and requiring us to incur the cost of additional staff to perform these tasks. Financial Risk: CSHHC relies on upfront 340B discounts to support pharmacy operations, sliding-scale medication affordability, and non-reimbursable patient services. Replacing these discounts with delayed manufacturer rebates would shift financial risk from manufacturers to safety-net providers. Based on CSHHCs pharmacy workbook and pro forma analysis: Baseline annual pharmacy revenue: approximately $5.8 million Five-year projected pharmacy revenue: exceeding $26.7 million 3 Net pharmacy income: ranging from approximately $607,000 in Year 1 to over $4.0 million by Year 5 All net pharmacy income projections assume upfront access to 340B pricing and additional operating cost. Delays, denials, or disputes in rebate processing would require CSHHC to carry higher inventory costs, draw on operating reserves, or reduce subsidization of medications. Internal management and board materials reflect national benchmarks showing that FQHC revenue is tied to pharmacy operations enabled by 340B savings. Any destabilization of 340B revenue therefore poses a direct threat to organizational bottom line. Even modest disruptions in rebate recovery would materially impair cash flow needed to purchase inventory, sustain staffing, and maintain affordable access to medications. We reviewed data for last year for the 10 medications that would be impacted by this change and then compared it to 340B pricing: see below. 340B Discount price approximately $25,000 WAC costs approximately $1,200,000 Staffing Impact: Implementation of a rebate-based model would require new, permanent administrative staffing that does not exist under the current upfront discount structure. Based on current prescription volume and internal planning, CSHHC estimates the need for: 1.01.5 additional FTEs, including: o A Rebate/Compliance Coordinator to manage claim-level submissions, tracking, and dispute resolution across manufacturers o Expanded pharmacy finance and IT support to reconcile WAC purchases with received rebates and manage system modifications o Estimated annual cost per FTE: $85,000$110,000 (salary + fringe) o Total incremental annual staffing cost: approximately $125,000$165,000 These positions represent new, unfunded costs that would permanently reduce net 340B savings. For every administrative FTE added to support rebate compliance, CSHHC would be forced to divert resources away from patient-facing services and medication affordability subsidies. 4 Impact on Patient Access and Health Equity: CSHHC uses 340B savings to subsidize prescription costs through a sliding-scale program with patient copays ranging from $4.50 to $18.00, depending on income level. These subsidies are critical to medication adherence for uninsured and underinsured patients managing chronic conditions. Under a rebate model: 340B pricing would no longer be available at the point of care Pricing certainty for patients would be lost The organization would assume financial risk for medications dispensed before rebate validation Non-revenue generated services that will be impacted by this change: anticoagulation, blister packing, pharmacy counseling and extended operation hours Reduced liquidity would limit CSHHCs ability to continue zero-pay or deeply discounted prescriptions, forcing difficult tradeoffs that directly undermine patient access to life-sustaining therapies. Compliance and Audit Exposure: CSHHC maintains a strong internal compliance framework, including eligibility controls, routine audits, board oversight, and UDS reporting. However, the rebate model introduces new failure points that do not advance program integrity, including: Increased risk of missed eligible claims Greater documentation complexity Expanded exposure during HRSA audits due to claim level rebate verification These risks shift enforcement and financial responsibility away from manufacturers and onto covered entities already operating on thin margins. Conclusion and Recommendation The 340B Drug Pricing Program was established to enable covered entities to stretch scarce federal resources and expand access to care. For FQHCs, the proposed rebate model undermines this purpose by: Increasing administrative burden 5 Destabilizing cash flow Requiring unfunded staffing expansion Threatening patient access to affordable medications Cornell Scott-Hill Health Center strongly recommends that HRSA: 1. Exempt Federally Qualified Health Centers from the 340B Rebate Model Pilot Program, and 2. Preserve the current upfront discount mechanism for FQHC covered entities Maintaining predictable 340B pricing is essential to sustaining pharmacy operations, protecting patient access, and ensuring long-term safety-net stability. Sincerely, Michael R. Taylor President & Chief Executive Officer
HRSA-2026-0001-1405Premier Health2026-04-10T04:00Z15,540 chars
See attached file April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Miami Valley Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantifyOur estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Miami Valley Hospital April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Miami Valley Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantifyOur estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Miami Valley Hospital
HRSA-2026-0001-1406Baldwin Family Health Care2026-04-10T04:00Z123,270 chars
See attached file(s) April 9, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Baldwin Family Health Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs like Baldwin Family Health Care report an average loss of $1 million to $2.5 million from entity-owned pharmacy operations and $500,000 to $1.2 Million for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC like ours expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In 2025, Baldwin Family Health Care (BFHC) served 23,699 patients, 77% of whom live at or below 200% of the Federal Poverty Guideline. BFHCs payer mix reflects its deep commitment to underserved populations, with nearly half of patients insured through Medicaid and more than 7.5% uninsured. As one of the first federally qualified health centers in the United States to pioneer a one stop, multiple services model of care, BFHC remains a vital lifeline for individuals and families throughout northern Michigan. BFHC relies on 340B savings to advance its mission by expanding access to affordable prescription medications while also ensuring the integrity and compliance of the 340B program. These savings are reinvested directly into expanded and enhanced services that address the complex medical, behavioral, and social needs of medically underserved patients in our service area. Examples of how BFHC utilizes 340B savings include, but are not limited to, the following: Community-Based and School Outreach Services Optometry Dental services Behavioral health services Expanded Pharmacy Services Clinical Pharmacy Services, including: o Diabetes medication management o Substance Use Disorder (SUD) medication management o Anticoagulation medication management Comprehensive Medication Reviews (CMR) and Medication Therapy Management (MTM) Medication reconciliation and adherence reviews Telehealth visits for medication management Opiate overdose prevention education and Narcan distribution Free convenience and multidose medication packaging Free prescription delivery Additional Patient and Community Support Patient assistance with enrollment in Patient Assistance Programs for high-cost medications Operation of a retail pharmacy to benefit both BFHC patients and the surrounding community Maintenance of updated medical technology and equipment Recruitment and retention activities to attract healthcare providers to underserved rural communities Community Health Workers RN Case Managers supporting Chronic Care Management and Transitions of Care Respite care services Radiology services In-kind contributions supporting grant funded programs and initiatives The implementation of a 340B rebate model would significantly divert critical 340B savings away from patient care and community services to cover the additional administrative and financial burdens required to ensure the receipt of timely and accurate rebates. These redirected resources would directly reduce BFHCs ability to sustain and expand the essential services described above, ultimately impacting access to care for the medically underserved population BFHC is designed to serve. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Baldwin Family Health Care provided $1,644,515 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Baldwin Family Health Care anticipates needing 1.5-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Baldwin Family Health Care anticipates an estimated increase of $21,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Baldwin Family Health Care anticipates that we will need to hire 1.5 2 FTEs appropriately manage the increase in regulatory, operational, administrative, and compliance burden created by a rebate model Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Baldwin Family Health Care estimates that the additional staffing required to manage the administrative tasks associated with the Rebate model will be approximately $140,000-$212,000. 7 Internal NACHC assessment (99 responses). 8 Ibid. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 10 hours per week will be required just to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Baldwin Family Health Care urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. A significant investment will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which currently serves 23,699 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $21,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. BFHCs current pharmacy management system does not support a variable pricing model, which would be required under a 340B rebate structure. Specifically, the system lacks the ability to transition drug pricing from the initial Wholesale Acquisition Cost (WAC) at the point of dispensing to the final rebated 340B ceiling price. Even if such functionality could be developed, implementation would be dependent on the pharmacy software vendor prioritizing the enhancement. Preliminary estimates indicate that programming costs would be in the tens of thousands of dollars, resulting in a substantial unfunded expense for the health center. If the system cannot be programmed to accommodate this pricing transition, Baldwin Family Health Care would be required to manually update acquisition and pricing data for every affected National Drug Code (NDC) on a quarterly basis to reflect 340B ceiling price changes. This process would be highly labor intensive, increase the risk of pricing inaccuracies, and elevate the potential for 340B compliance findings. Reimbursement Tracking and Manual Claims Reconciliation In addition to pricing challenges, the 340B rebate model would require BFHC to implement manual tracking and reconciliation of prescription claims and associated reimbursements to ensure accurate recovery of 340B rebates. Current pharmacy systems are not designed to track claims across a lifecycle that includes initial payer reimbursement at WAC pricing followed by delayed rebate payments tied to 340B eligibility. Under a rebate model, staff would need to: Identify and flag eligible 340B prescriptions at the claim level Track third-party reimbursement amounts received for each claim Monitor rebate submissions and payments from manufacturers or intermediaries Manually reconcile rebate payments against individual claims and NDCs Investigate discrepancies, denials, and timing variances These activities would require significant ongoing staff time, new workflows, and additional internal controls. Manual reconciliation substantially increases the risk of errors, delayed revenue recovery, and audit exposure while diverting pharmacy and administrative staff away from patient-focused services. Collectively, the software limitations, manual pricing updates, and reimbursement reconciliation requirements illustrate the significant operational and financial burden a 340B rebate model would impose on covered entities such as BFHC. Resources currently devoted to expanding access, enhancing clinical services, and supporting medically underserved patients would instead be redirected toward administrative processes necessary solely to manage rebate compliance. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC does not currently partners with contract pharmacies because of manufacture restrictions and are unable to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. CHC staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear CHCs contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In those regions, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Baldwin Family Health Care offers a sliding scale pharmacy discount program for eligible patients, under which medications are dispensed at 340B cost-plus a reduced dispensing fee. The sliding fees for dispensing range from $5.00 to $9.00, depending on the patients income level and placement within the sliding fee discount scale. This structure ensures that patients with the greatest financial need face the lowest out-of-pocket costs for essential medications. In addition to the sliding scale discount, BFHC provides direct patient assistance with enrollment in manufacturer Patient Assistance Programs (PAPs) for high-cost medications. This support includes eligibility screening, application completion, and follow-up, further reducing financial barriers to accessing necessary therapies for uninsured and underinsured patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,887,692, annually, to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $125,953 to purchase these same drugs at the 340B ceiling price. This represents a 1,400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Baldwin Family Health Care anticipates needing to reduce: Essential Clinical Services (Rural Access and Health Equity Impact): To offset the upfront cost of purchasing medications under a 340B rebate model, Baldwin Family Health Care would be forced to scale back nonrevenue generating but critically important clinical services, disproportionately affecting our rural and medically underserved patients. These services include clinical pharmacist appointments for complex patients, such as individuals with diabetes requiring intensive medication therapy management (MTM) and patients receiving anticoagulation therapy. In rural Michiganwhere access to specialty care is limited and transportation barriers are significantthese pharmacist-led services often represent consistent access for patients to have medication optimization and safety monitoring. In addition, we would also be forced to reconsider the free adherence services we offer such as multidose compliance packaging and home delivery. Reductions in these services could negatively impact chronic disease outcomes for high-risk patients who already face substantial barriers to care. Operating Hours: We anticipate needing to reduce our clinic hours by 2.5 hours per week, specifically impacting our evening and weekend hours, which are the times our working patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker, directly reducing health care access by reducing our patients ability to overcome barriers like transportation and insurance coverage. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,800 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Baldwin Family Health Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt- pay discount. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Baldwin Family Health Care estimates that being required to purchase the 10 selected drugs at WAC rather than at 340B ceiling prices would increase the health centers upfront monthly drug expenditures by approximately $157,308. This upfront financial burden escalates significantly as additional MFP drugs are incorporated into future years. Based on BFHCs historical purchasing data, the estimated increase in upfront drug spending would rise to approximately $310,000 per month in 2027 and $376,000 per month in 2028 as additional MFP drugs take effect. These increases would place substantial strain on the health centers cash flow and operating margins and could further limit BFHCs ability to sustain essential patient services and invest in expanded access to care. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to Utilize limited financial reserves. This is not a sustainable solution; funds that are currently dedicated to supporting health center operations would be tied up in drug purchasing. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Baldwin Family Health Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Baldwin Family Health Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $288,316. Moreover, experience with the current Medicare Transaction Facilitator (MTF) process has demonstrated an average error rate of approximately 30% in accurately identifying 340B-eligible claims. If a similar error rate were to persist under a 340B rebate model, Baldwin Family Health Cares losses would increase substantiallyresulting in approximately $571,000 in annual losses for the 2026 Medicare Fair Price drugs alone. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra- statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non- 340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal 36 C.F.R. 447.518(a). liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government- led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over- identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical 44 32 C.F.R. 199.21(q)(2)(iii)(E) 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Conclusion Baldwin Family Health Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Baldwin Family Health Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Baldwin Family Health Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lisa Dysard, Chief Pharmacist at LDysard@familyhealthcare.org. Sincerely, Julie Tatko, President and CEO Baldwin Family Health Care
HRSA-2026-0001-1407Little River Medical Center2026-04-10T04:00Z52,183 chars
Please find the attached file that has comments concerning the 340B Rebate Model Pilot Program. LRMIC April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Little River Medical Center (LRMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Implementation of a 340B Rebate Model Program will result in CHCs incurring an uncertain amount of increased losses at entity-owned pharmacy operations and at contract pharmacy arrangements due to increases in the administrative hurdles of manual claims reconciliation processes that will need to be implemented. Projected Cost Increases: CHCs anticipate significant increases in operational costs if a 340B Rebate Model Pilot Program is instituted. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health CHCs expect even more of an impact. Without doubt, LRMC would expect to be affected with increased financial loss and cost increases with implementation of a 340B Rebate Model Pilot Program. This can be definitively stated based on what LRMC has already witnessed thus far in 2026 with the implementation of the Medicare Drug Price Negotiation Program (MDPNP) and based on the analysis that will be presented in this comment submission. Since its founding in 1978, LRMC has delivered comprehensive preventative health care services to residents of Horry County, South Carolina, and Brunswick County, North Carolina. LRMC currently operates seven brick-and-mortar locations and maintains a fleet of four mobile units, providing a wide range of services including medical, dental, behavioral health, pharmacy, and additional support offerings. In 2025, LRMC served a total of 34,339 patients, with more than 89% of those patients living at or below 200% of the Federal Poverty Guideline. Since 1992, LRMC has actively participated in the 340B Discount Drug Program, enabling qualifying patients to access discounted pharmaceuticals at each eligible 340B site, across its now five owned and operated pharmacy locations, as well as through contract pharmacy partners. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the fifty-two million patients who rely on them for their care. For LRMC, this means it will impact: The delivery of affordable prescriptions to our 34,399 340B eligible patients at any pharmacy that LRMC owns and operates and at contract pharmacy locations that serve them. In 2025, LMRC provided over 200,000 340B eligible prescription to these patients at pharmacy locations it owns and operates and with contract pharmacy partners. Center cash flow. The impact of drug cost is substantial. For 2026 if the same drugs included in the 340B Rebate Model Pilot Program would only be those that are included in the MDPNP, LRMC projects that its annualized drug spend would increase by $2.8 million. While the 2026 cost increase in drug purchase acquisition is concerning, for 2027 and 2028 if only the announced drugs being selected for the MDPNP would be included in any 340B Rebate Model Program, this annualized drug spend would increase even more exponentially. The ability for LRMC to maintain its current level of service and operating hours. The operational changes in intensity of services provided and the hours where those services will be available will need to be reduced so LRMC can remain available for its services in the future. Hours of operation will need to be shortened, which will disproportionally affect patients who are at 200% or less of the Federal Poverty Guideline. Patients who often are in this demographic are those who require more intense case management specifically those patients who experience homelessness or may be affected by diseases such as Medication for Opioid Use Disorder (MOUD) and Human Immunodeficiency Virus (HIV)/Acquired Immunodeficiency Syndrome (AIDS). Service hour reduction will not be enough to absorb the shock of any 340B Rebate Model that comes to fruition. LRMC will need to divest investments it has made in land acquisition in its service area where there were hopes to expand its footprint in the community which will further reduce its ability to provide future primary care services to future patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact 2 Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1.111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www. samhsa. gov/data/data-we-col lect/nsduh-national-surveydrug-use-and-health/national -releases 3 Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.' Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over three million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that fifty-two million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up- front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262: PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, LRMC provided $17.9 million in sliding fee discounts, in the form of discounted medications and medical services to the 34,399 patients it served in 2025. We anticipate that our ability to offer the same levels of sliding fee discounts in the future would be affected with any institution of a rebate model. Staffing Impact: LRMC anticipates needing to hire 1.5 to 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity with the proposal, LRMC anticipates there will be an increase in costs to employ the support of external vendors. These external vendors may include 340B consultants, legal counsel, third-party administrators, software providers, and reconciliation services, all of which may amass increased expenses by at least an additional $45,000 in the months after enactment of a 340B rebate model program and some will require ongoing annualized expenses thereafter. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 LRMC anticipates that it will need to add 1.5 to 2 FTEs to operationalize any 340B rebate program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. LRMC anticipates that costs outlined above would be estimated at $3.1 million in 2026, $7.7 million in 2027, and $10.8 million in 2028. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. LRMC estimates that up to 12-14 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the same reporting third-party platform. Any lack of standardization and varying requirements across manufacturers will force LRMC and all CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. LRMC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates if any such program would come to fruition. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate upfront costs to adapt software. LRMC believes that these costs could range from $6,000 - $10,000 to simply reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our Pharmacy Management System (PMS) plus TPA vendors associated with contract pharmacy partners will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish 340B savings being returned to LRMC. No such increases in cost have been telegraphed yet by either our PMS or TPAs so it is impossible to accurately project what these increased costs could be. Total Cost: For our CHC, which serves 34,339 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $194,000 - $218,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use TPAs, in-house pharmacies must directly integrate their Electronic Health Record (EHR) and PMS with a complex new rebate infrastructure. At present the EHR utilized by LRMC cannot fully integrate with our PMS which will lead to an increased need for manual based processes to be further implemented. This admission is part of the baseline assessment in estimating the need to add at least 1.5 2 FTEs. One-Time Integration Costs: LRMC anticipates upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools if such a solution is available or integration across our EHR and PMS. A complete understanding of what would need to be completed for such an integration is not known at this time as the rebate model significantly shifts how EMRs and PMSs ingest price file information from drug wholesalers. As an example of how the expenses could mount, our PMS alone charges a rate of $200.00 per hour for developer support. LRMC would anticipate that we may need upwards of 40 hours or more of developer time from our PMS to integrate appropriate price file reconciliation tools which would result in an additional $8,000 or more of expense. Ongoing Resource Diversion: In addition to onboarding 1.5 2 new FTEs, 2 Current FTEs who manage pharmacy services at LRMC may be forced to spend up to 4 to 8 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. This re-allocation of duties may put additional pressure on other departments that those FTEs support which could directly require evaluation of FTE support levels at LRMC post implementation of any 340B rebate model pilt program where there may be a need add additional new FTEs. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. LRMC currently partners with eighty-nine pharmacies to increase access to affordable medications. 6 TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. As aforementioned, LRMC anticipates that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees where that cost is not able to be estimated at this time. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across eighty-nine different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this could leave patients no affordable medication options if they cannot access a pharmacy owned and operated by LRMC. Horry and Brunswick counties cover 2,305 square miles Horry County alone is the largest county in South Carolina. As a reminder, over 17% of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30% of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping at LRMC are currently designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require LRMC to purchase new software, invest in further system integration, and train its staff. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software selected." Bundled Payments: The majority of clinic-administered drugs LRMC administers are bundled into the prospective payment system (PPS) billing when administered to patients. Because PPS visits are paid at a flat rate, the medications administered at LRMC are often not included on claims billed to payers. Simplified Records: Because LRMC maintains limited inventories of CADs and they are typically not separately billed on claims, LRMC chooses to record administration of CADs on paper inventory logs and by using methodologies that do not cost it more to satisfy auditable record keeping requirements that are within its EHR. While LRMC maintains perpetual inventories and complete administrative records, the fact that paper and partial electronic systems would need to convert to a fully electronic system to submit data for rebate consideration of CADs is problematic. LRMC and very few other CHCs records include full electronic medication administration records (eMARs), which is more common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require LRMC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the MDPNP. Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, CADs drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology I JAMA Network Open I JAMA Network 19 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make tough decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Pharmacies owned by LRMC and the contract pharmacy partners of LRMC, will not have up front access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of prescription adjudication and a patient making a purchase of the prescription. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. LRMC currently provides a formulary of free and deeply discounted pharmaceuticals to all 340B eligible patients. In addition to this benefit, LRMC offers a sliding-fee discount of charges when 340B drug is dispensed to 340B eligible patients who are at or below 200% of the Federal Poverty Guideline. For pharmaceuticals purchased at the 340B price that are not on the free or deeply discounted formularies, the 340B cost of drug plus a professional dispensing fee is charged to a sliding-fee eligible patient. 340B eligible patients who are in the nominal fee sliding-fee category are charged the lowest professional dispensing fee for a prescription and the professional dispensing fee for a prescription increases as patients move closer to 200% of the Federal Poverty Guideline. If pharmaceuticals included in the 340B Rebate Model Pilot Program are purchased at WAC - with a rebate possibly being paid later if the prescription claim is deemed to be 340B eligible upon data review - LRMC does not feel that it will be able to maintain the outlined pricing structures in place for 340B eligible patients who may or may not be sliding-fee eligible. This determination is due to the risk of LRMC not possibly being paid a rebate for a 340B eligible claims submission that was submitted as there would be zero to a very low percentage chance of LRMC being successful in collecting the difference in the WAC and 340B drug cost from the 340B eligible patient after any 12 HRSA FAQ '3 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9# footnote 10 8 prescription adjudication and purchase of the prescription has taken place. The attempt to explain this cumbersome process is the complete antithesis of how any pharmacy was expected to operate for the past thirty plus years since the origination of the 340B Program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The monetary impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments: however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the budgetary impact of purchasing drugs at the full WAC price, NACHC collaborated with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes 14n' ttps://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacv-owner-should-review 9 CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on LRMC purchasing data, we estimate it would cost $2.8 million to purchase these ten drugs under the proposed rebate model. Currently, our organization spends $1.7 million to purchase these same ten drugs at the 340B ceiling price. This represents a 65% increase in upfront capital required for procurement of these ten drugs. The increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, LRMC and all CHCs are navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs at WAC and operationalizing the rebate, LRMC anticipates needing to reduce: Essential Clinical Services: To offset WAC purchases, we would be forced to scale back non- revenue-generating but essential services, such as Affordable Healthcare Marketplace enrollment support; patient transportation services; mobile medical and some mobile dental services; medication distribution support services at LRMC locations that do not have a pharmacy onsite; quality improvement initiatives that are not contractually or grant/funding dependent; and targeted outreach services that assist special populations such as the homeless. Operating Hours: LRMC anticipates needing to reduce the operational clinic hours of our sites providing medical and pharmacy services by 10-15 hours each operating week. The reduction in hours would be after 5 PM on weekdays and on Saturday mornings. The reduction in operating 15 https://340hpricing.hrsa.gov/ 16 https://www.cms.gov/filesizip/selected-drug-list-negotiated-prices-also-knovvn-maximum-fair-prices-statutezip.zip 10 hours would affect access to care for many patients. We anticipate that reduction in medical and pharmacy hours availability would most greatly affect our pediatric and working-adult patient populations. We believe this as there would be disruptions when those populations would be available to seek such services while satisfying employment obligations when one may be a caretaker of a patient or be the patient themselves. Workforce & Staffing: The administrative burden of this pilot requires us will require LRMC to divert funds away from clinical staf For every "Rebate Coordinator" - or the like LRMC needs to hire, LRMC will lose the ability to fund a Community Health Worker, Behavioral Health Coordinator, or Early Intervention Service Patient Navigator - all of which assist patients seek services internally offered at LRMC and through our external community partners which assist patients in remaining well. Patient Financial Assistance: LRMCs ability to provide 340B eligible patients 340B purchased medications at its currently offered manner described above at zero, deeply discounted, or via sliding- fee discount to those patients who are eligible will need to be changed significantly. If the cash from a rebate is not in our financial accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that assists our 30,568 sliding-fee eligible patients who will need to make choices if they will ration their medications or be forced into therapeutic changes that may not be as costly. Both options are not optimal to treat the health conditions that they may face. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. LRMC anticipates this due to the current credit line that is offered on all of its drug purchasing accounts. LRMC and many CHCs believe that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. LRMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high- risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient- care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will lead LRMC to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, LRMC is forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: LRMC receives prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. LRMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $360,000. This cost aggregates the estimated monetary impact of rebate denials and loss of purchase discounts. 11 Increased Costs: LRMC estimates that purchasing the ten selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend on MDPNP drugs by $233,000 in 2026; $600,000 in 2027; and $825,000 in 2028. Every dollar that LRMC pays upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to any immediate public health emergency that affects our community or any emergency that may affect our systems and infrastructure that allows us to deliver care to the community. To navigate the rebate model, LRMC would be forced to take out a line of credit. This is not a sustainable solution; the interest costs annually alone are estimated to be $250,000 which are funds that currently are used to deliver medical, dental, behavioral health, pharmacy, and other additional supportive services to patients. Forcing LRMC further into debt to creates an environment of clinical instability. For patients who rely on LRMC as the community's safety net - the risk of our credit limit being reached or our reserves being depleted is a direct threat to their well-being. If LRMC would be forced into financial limbo, the "trickle-down" effect is immediate. Patients would experience longer wait times, reduced service availability, and an inability to access steeply discounted medications. a. Financial Impact of Rebate Denials and Delays LRMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to function as the sole arbiter of all CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler if they have provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs in 2026, even a conservative 5% denial rate would result in a net annual loss of $142,000. An 8% denial rate for the ten selected drugs in 2026 would result in a $227,600 annual loss. For 2028, if the rebate program were only limited to the drugs that have been announced as being included on the MDPNP, a 5% denial rate would result in a net annual loss of $594,600, and an 8% denial rate would result in a net annual loss of $888,700. These are losses that LRMC cannot absorb, as it represents a direct extraction of resources from our budget. Any reduction in financial resources will directly affect our ability to fulfill the mission of LRMC which is "Changing lives and serving our community." The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This will force CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid a requirement in the State 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www. federalregister.gov/documents/2025/08/01/2025-14619/34013-program-notice-application-process-for-the-340b-rebate- model -pi lot-program 12 of South Carolina since LRMC elects to -carve in" Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for LRMC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with Medicaid Rebate Program or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a ten-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated delinquent payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. 13 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. ATI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems. and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion LRMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program- -to allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. As evidenced a rebate model would create significant cash flow challenges, forcing LRMC and all CHCs to make tough decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, LRMC and all CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally 14 y, Ac9... Pa e a m avis, Pres' ent & CEO Little River Medical Center impossible to provide the sliding fee scale and steeply discounted medications required by law. LRMC unequivocally believes that a 340B rebate pilot would cause disproportionate harm to patients served by all CHCs and other safety net providers. LRMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot. If you have any questions, please contact Kris Chiplinski, Chief Pharmacy Officer, kchiplinski@lrmcenter.com. 15
HRSA-2026-0001-1408WOMAN'S HOSPITAL2026-04-10T04:00Z10,433 chars
See attached file(s). Woman's Hospital, Baton Rouge, LA appreciates the opportunity to provide the attached comment letter signed electronically. 4/10/26 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Womans Hospital Foundation, dba Womans Hospital, appreciates the opportunity to submit comments in response to HRSAs request for information regarding a potential 340B rebate model pilot program. Womans Hospital is a disproportionate share hospital (DSH) with a DSH percentage of approximately 40.37 percent, reflecting a substantial Medicaid and low-income Medicare patient population. The hospital specializes in the care of women and infants and operates one of the largest delivery services in the nation and the largest in Louisiana, with nearly 8,000 deliveries annually. In addition to delivering babies and caring for the most vulnerable infants in its Neonatal Intensive Care Unit, Womans Hospital offers other health care services to women, including gynecologic and breast cancer outpatient department services for the detection and treatment of these cancers. The hospital provides radiation and infusion therapies, the latter often requiring high-priced drugs for use in the Medicaid and low-income patient population. The federal 340B Drug Pricing Program is essential to Womans Hospitals ability to meet the healthcare needs of underserved communities. The hospital realizes approximately $16 million annually in 340B savings against an annual drug spend of approximately $38 million. These savings are reinvested directly into patient-focused programs and services that would otherwise be financially unsustainable. Based on Womans Hospitals operational experience, financial data, and recent experience with rebate-based mechanisms, the hospital has significant concerns regarding the feasibility, cost, governance, and unintended consequences of implementing a rebate-based model within the 340B Program. Administrative, Operational, Financial, and Medication Access Concerns 2 A. Administrative and Operational Burden Womans Hospital currently incurs approximately $125,000 annually in administrative costs to operate a compliant 340B Program under the existing upfront discount model. These costs include monthly compliance audits, annual external audits, third-party administrator (TPA) software for inventory and claims management, and staff time dedicated to purchasing review, compliance monitoring, and documentation. A rebate-based model would not replace these costs. Instead, it would impose new, duplicative, and ongoing administrative requirements, including claim-level rebate submission, reconciliation of payments, monitoring for untimely payments, management of manufacturer denials, and dispute resolution. These activities do not exist under the current upfront discount model and would materially increase administrative burden without offsetting reductions elsewhere. B. Potential Costs of Unauthorized or Unilateral Manufacturer Requirements Based on Womans Hospitals experience during pre-implementation planning for HRSAs rebate pilot, the hospital is concerned that manufacturers and associated third-party platforms may impose additional, evolving, and unauthorized requirements that further increase administrative costs and compromise covered entities ability to access 340B savings. During prior planning, changes to guidance associated with the Beacon platform materially affected Womans Hospitals operational assumptions. Specifically, responses posted on Beacons FAQ page were modified without public notice, explanation, or formal authorization by HRSA. Reliance on an FAQ pageparticularly one hosted and controlled by an interested private party rather than a federal agencyis an inappropriate and unreliable mechanism for communicating requirements that affect a statutorily authorized federal program. Womans Hospital is concerned that under a rebate model, manufacturers or their designated platforms could continue to alter data requirements, submission standards, or validation rules in ways that increase administrative burden, delay payment, or reduce access to discounts. Any requirements governing participation in a 340B rebate pilot must be clearly articulated, formally authorized, and consistently enforced by HRSAnot unilaterally imposed or modified by manufacturers with a direct financial interest in limiting the number or value of 340B discounts. C. Information Technology and Security Concerns 3 Womans Hospital is also concerned about inconsistent standards related to information technology security and data governance. Covered entities are expected to comply with extensive data submission and security requirements; however, during prior interactions, the Beacon platform declined to complete a standard security questionnaire to verify compliance with data protection requirements. Covered entities were instead directed to a public webpage describing general security protocols. This asymmetry raises significant concerns regarding data security, accountability, and oversight. Any rebate pilot that requires submission of patient-level or claim-level data must include uniform, enforceable security standards applicable to all parties, including manufacturers and their designated platforms. Reliance Interests in the Upfront Discount Model Womans Hospital has reasonably relied on the availability of 340B ceiling prices through upfront discounts as the only operationally viable method for effectuating the statutory benefit. This reliance interest reflects decades of program implementation, the scale of hospital drug purchasing, and the need for predictable cash flow to support patient care. Although the statute permits discounts via rebate or discount, the longstanding operational structure of the 340B Program has been an upfront discount model. Transitioning to a rebate-based approach would fundamentally shift financial risk to covered entities by requiring hospitals to finance manufacturers statutory obligations while awaiting reimbursement. This shift is inconsistent with the purpose of the 340B Program to enable covered entities to stretch scarce resources. Costs to Covered Entities A. Current Administrative Costs Under the Upfront Discount Model Womans Hospital processes drug purchases resulting in over 30,000 drug packages annually, translating into significantly higher claim volumes due to multidose packaging. Current administrative costs total approximately $125,000 per year, driven by staffing, TPA software, compliance audits, and documentation requirements. B. Incremental Costs Under a Rebate Model 4 Implementation of a rebate model would result in incremental and ongoing costs, including: A minimum of 1.5 additional FTEs, at an annual cost of approximately $105,000 Recruitment and onboarding costs of approximately $5,000 per FTE Additional TPA costs of $6,000 annually for clean-site submission Additional TPA costs exceeding $10,000 annually for contract pharmacy rebate functionality These estimates are based on actual purchasing volume, observed claim volumes exceeding 125 claims per business day, and experience with rebate-based processes under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs prior estimate of minimal incremental workload significantly understates the operational realities faced by hospitals. Payment Timing and Cash Flow Impacts A rebate-based model would require Womans Hospital to pay full acquisition cost upfront and await reimbursement of statutory discounts. Even if rebates were paid within 10 days, the hospital estimates lost interest earnings of approximately $20,000 annually. Delays beyond 10 daysas already experienced under the Medicare Transaction Facilitator could increase losses to as much as $115,000 annually. In addition, costs associated with denials and disputes are estimated to range from $175,000 to $877,000, representing 1 to 5 percent of annual 340B savings. These impacts would further widen existing cash-flow timing gaps inherent in hospital operations. Program Integrity, Oversight, and Rebate Denials Womans Hospital supports strong program integrity safeguards. However, integrity must be achieved through clear federal oversight, not through ad hoc or evolving manufacturer requirements. Any rebate pilot would require: Narrowly defined and limited grounds for denial Mandatory documentation and standardized denial templates Enforceable timelines for adjudication HRSA oversight of all requirements imposed on covered entities 5 To date, no manufacturer has raised a 340B/MDPNP duplicate discount concern with Womans Hospital, indicating that existing safeguards are effective. Impact on Patient Access and Community Services The 340B Program enables Womans Hospital to sustain essential services, including mobile mammography, perinatal mental health services, bedside prescription delivery, specialty gene therapy, HIV post-exposure prophylaxis, and care for low-income patients through Louisiana State University affiliated clinics. Policies that delay or reduce access to 340B savings will directly affect patient care in the communities we serve. Conclusion For the reasons described above, Womans Hospital has significant concerns regarding the administrative feasibility, financial sustainability, governance, and patient-care implications of a 340B rebate model pilot program. The existing upfront discount mechanism is operationally efficient, financially predictable, and consistent with the statutory purpose of the 340B Program. A rebate-based model would increase administrative burden, destabilize hospital cash flow, and introduce risks associated with unauthorized manufacturer requirementswithout demonstrable improvements in program integrity. Womans Hospital respectfully urges HRSA to weigh these impacts carefully and to reject the adoption of a rebate-based model for the 340B Drug Pricing Program. Sincerely, Ruth Johnson Ruth Johnson Vice President of Governmental Affairs
HRSA-2026-0001-1409Bighorn Valley Health Center, Inc dba One Health2026-04-10T04:00Z43,182 chars
See attached file(s) April 6, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Bighorn Valley Health Center, Inc dba One Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: national data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. For rural CHCs, these costs are even more devastating. Rural centers like ours invest nearly one-quarter (25%) of our 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. One Health is an FQHC serving 25,000 patients spread across sixteen rural and frontier counties in Montana and Wyoming, a service area equal to the size of the state of Pennsylvania. Our ability to effectively care for this underserved and vulnerable population will be markedly hampered by the proposed 340B Rebate Model Pilot Program. As such, I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For One Health in particular, the impact would include 109,000 340B transactions and 24,796 patients each year. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up- front 340B discount, the drugs included in the pilot would become operationally impossible. This 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3- Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025 One Health provided $4,096,208 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: We will need 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, One Health anticipates an increase of $25,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate needing to hire an additional 1.5 FTE to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. o We estimate the additional staff costs to be approximately $160,000 and an increase in upfront drug costs to exceed $2.9 million annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 40 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. One Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. One Health estimates a one-time cost of $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 24,796 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $85,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. We anticipate that staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in five frontier counties in Montana and Wyoming without any affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more 12 HRSA FAQ affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to- rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC- specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $2.9 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $40,000 to purchase these same drugs at the 340B ceiling price. This represents a 7,194% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, One Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as peer support services for patient with substance use disorder, nutrition counseling for patients struggling with diabetes and obesity, and community health workers who help patients navigate the complex healthcare system. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Operating Hours: We anticipate needing to possibly reduce our clinic hours at multiple sites, specifically impacting on the extended hours we offer to facilitate care for our hard-working patients who seek care at times when they dont need to forego wages. Workforce & Staffing: The administrative burden of this pilot will require us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Behavioral Health Care Manager or Community Health Worker. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,504 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. One Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, One Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $550,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. One Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $243,000. For 2027, One Health estimates an additional monthly increase of $294,000. By 2028 One Health estimates an additional monthly increase of $313,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to seek out opportunities to take out lines of credit with willing financial institutions, often at great financial burden. This is not a sustainable solution; the interest costs alone are estimated to approach $400,000 annuallyfunds that are currently dedicated to providing vital primary care to our rural community members. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on One Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays One Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $292,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model- pilot-program IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion One Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. One Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. We greatly appreciate the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our 340B Program Supervisor, Dr. Stephanie Chosa, PharmD, at stephanie.chosa@onechc.org. Sincerely, David Mark, MD, CEO One Health
HRSA-2026-0001-1410SWLA Center for Health Services2026-04-10T04:00Z43,222 chars
See attached file(s) April 6, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of SWLA Center for Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 SWLA Center for Health Services, Inc. is a 501(c)(3) not-for-profit community-based organization, incorporated in 1978. As a recipient of a 330 CHC grant, the Center began receiving Bureau of Primary Health Care funding in 1984. The Center operates facilities in Lake Charles, Lafayette, Crowley and Oberlin, Louisiana. SWLA Center for Health Services provides quality, cost-effective and comprehensive primary health care and support services in an environment that embraces respect and dignity. SWLA Center for Health Services aspires to eliminate all disparities in access to health care. SWLA Center for Health Services is honored to serve our community (patients) with respect and dignity as we strive to provide the highest quality health care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SWLA Center for Health Services, in particular, this means it will impact: 76,189 340B prescription transactions 22,695 patients $1,170,674 administrative cost 68% of patients at SWLA Center for Health Services live below 200% of the federal poverty level (FPL). We offer free delivery and mail prescription services but with the cash flow concerns of the rebate model, those services could be put in jeopardy. SWLA Center for Health Services uses 340B savings to provide clinical services to low- income, vulnerable patients who may not have access to comprehensive or specialty care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SWLA Center for Health Services provided $101,857 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SWLA Center for Health Services anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, SWLA Center for Health Services anticipates an increase of $6,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SWLA Center for Health Services will need 1 full-time employee and 1 part-time employee. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SWLA Center for Health Services will see an increased upfront annual drug spending in 2026 of $735,621 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Around 10 additional hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. SWLA Center for Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $6,500 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 22,695 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $794,901 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our pharmacy software will only be able to provide Wholesale Acquisition Cost (WAC) but will need to have a system set in place to let us know the 340B cost for the medications filled in the pharmacy. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 36 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 36 different pharmacy locations to ensure rebates are paid correctly. 7 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Internal NACHC survey data 8 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. SWLA Center for Health Services are able to help our patients without insurance or who have insurance but still experience copays that they cannot afford. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations data, we estimate it would cost $736,664 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $28,693 to purchase these same drugs at the 340B ceiling price. This represents a 2,467.40% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SWLA Center for Health Services anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as nutritional services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,658 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SWLA Center for Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, SWLA Center for Health Services estimates its 2027 Annual Rebate Opportunity Cost to be 11 approximately $357,200. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. SWLA Center for Health Services estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,305,911.31 in 2027 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays SWLA Center for Health Services urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $111,319. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 13 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SWLA Center for Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted 14 medications required by law. SWLA Center for Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SWLA Center for Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Aarielle Washington (email: awashington@swlahealth.org). Sincerely, Aarielle Washington Director of Pharmacy SWLA Center for Health Services
HRSA-2026-0001-1411Health West, Inc.2026-04-10T04:00Z81,595 chars
See attached file(s) April 7, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health West, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Health West anticipates a first-year loss of $215,000 from entity-owned pharmacy operations and $110,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Health West expects that our operational costs will increase $125,000 annually just to manage the pilot. o Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to expand services: Family Medicine Residency, Psychiatry, Dental Residency, Nurse Practitioner Program, Physician Assistant Program, Nursing Program, Dental Assistant Program, PharmD Residency Program and Students, HIV and HepC Programs, Prescription Medication Assistance Programs. Health West is a non-profit, federally funded community health center with 18 clinics in Idaho, Utah, and Wyoming. For nearly 50 years, Health West has offered affordable access to quality healthcare, servicing low-income, uninsured, and medically underserved individuals. As a community health center, Health West provides primary care, behavioral health, pharmacy, and dental services utilizing programs such as 340B. Health West also serves as an educational resource to residency programs, training the next generation of healthcare providers. Health West continues to collaborate with community leaders, healthcare providers, and community organizations to assess healthcare needs and develop programs and services to address the evolving healthcare needs of its communities. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Health West in particular, this means it will impact: 29,795 340B transactions serving 25,218 patients. Of which 5,620 are uninsured. Current admin costs for our 340B program are $380,000 Our ability to continue offering a wide range of services: Family Medicine Residency, Psychiatry, Dental Residency, Nurse Practitioner Program, Physician Assistant Program, Nursing Program, Dental Assistant Program, PharmD Residency Program and Students, HIV and HepC Programs, Prescription Medication Assistance Programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured1. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 1 https://data.hrsa.gov/topics/healthcenters/uds/overview/state/UT/table?tableName=9D 3 of illnesses like diabetes, hypertension, and obesity.2 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.4 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.5 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.6 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,7 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 6 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 7 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Health West will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already- strained operational capabilities. Sliding Fee Discount: Health West provided $7,082,885 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Health West anticipates needing a minimum of 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Health West anticipates an increase of $50,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. An estimated 1.5 additional FTEs to administer the rebate program. An estimated annual increase of $243,000 in salaries and wages Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Health West urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 25,218 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,920,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. At an estimated cost of $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For our contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 56 pharmacies. Our rural clinics, which lack in house pharmacy capabilities, must rely on contract pharmacy relationships to increase access to affordable medications and expand our geographic reach 6 to populations without readily available healthcare services. Contract pharmacies allow Health West to serve patients where prescriptions are actually filled. Many outpatient drug especially specialty medications are limited in their distribution, require specialty pharmacy infrastructure, and are unable to be stocked at in-house pharmacies. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 56 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Idaho, Utah, and Wyoming with no affordable medication options. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 8 Internal NACHC survey data 7 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Health West offers many prescription assistance programs to provide patients with discounted medications based on income level and household size, often times more than 50% below the market rate. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,725,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,105,000 to purchase these same drugs at the 340B ceiling price. This represents a 68% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Health West anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as school based behavioral health and counseling programs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund one school-based counselor. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5,620 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Health West asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 10 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Health West estimates its 2027 Annual Rebate Opportunity Cost to be approximately $640,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Health West estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $135,000. Considering the 2027 and 2028 MFP drugs, the estimated upfront monthly cost increase will be $267,000 in 2027, and $324,000 in 2028 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Health West, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Health West urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $178,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 12 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety- net providers that the 340B program was designed to support. 13 Conclusion Health West strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Health West believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Health West appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brady Brower bbrower@healthwestinc.org. Sincerely, Mindy Benedetti Health West, Inc. April 7, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health West, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Health West anticipates a first-year loss of $215,000 from entity-owned pharmacy operations and $110,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Health West expects that our operational costs will increase $125,000 annually just to manage the pilot. Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to expand services: Family Medicine Residency, Psychiatry, Dental Residency, Nurse Practitioner Program, Physician Assistant Program, Nursing Program, Dental Assistant Program, PharmD Residency Program and Students, HIV and HepC Programs, Prescription Medication Assistance Programs. Health West is a non-profit, federally funded community health center with 18 clinics in Idaho, Utah, and Wyoming. For nearly 50 years, Health West has offered affordable access to quality healthcare, servicing low-income, uninsured, and medically underserved individuals. As a community health center, Health West provides primary care, behavioral health, pharmacy, and dental services utilizing programs such as 340B. Health West also serves as an educational resource to residency programs, training the next generation of healthcare providers. Health West continues to collaborate with community leaders, healthcare providers, and community organizations to assess healthcare needs and develop programs and services to address the evolving healthcare needs of its communities. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Health West in particular, this means it will impact: 29,795 340B transactions serving 25,218 patients. Of which 5,620 are uninsured. Current admin costs for our 340B program are $380,000 Our ability to continue offering a wide range of services: Family Medicine Residency, Psychiatry, Dental Residency, Nurse Practitioner Program, Physician Assistant Program, Nursing Program, Dental Assistant Program, PharmD Residency Program and Students, HIV and HepC Programs, Prescription Medication Assistance Programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Health West will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already-strained operational capabilities. Sliding Fee Discount: Health West provided $7,082,885 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Health West anticipates needing a minimum of 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Health West anticipates an increase of $50,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. An estimated 1.5 additional FTEs to administer the rebate program. An estimated annual increase of $243,000 in salaries and wages Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Health West urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 25,218 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,920,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. At an estimated cost of $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For our contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 56 pharmacies. Our rural clinics, which lack in house pharmacy capabilities, must rely on contract pharmacy relationships to increase access to affordable medications and expand our geographic reach to populations without readily available healthcare services. Contract pharmacies allow Health West to serve patients where prescriptions are actually filled. Many outpatient drug especially specialty medications are limited in their distribution, require specialty pharmacy infrastructure, and are unable to be stocked at in-house pharmacies. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 56 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Idaho, Utah, and Wyoming with no affordable medication options. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Health West offers many prescription assistance programs to provide patients with discounted medications based on income level and household size, often times more than 50% below the market rate. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,725,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,105,000 to purchase these same drugs at the 340B ceiling price. This represents a 68% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Health West anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as school based behavioral health and counseling programs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund one school-based counselor. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5,620 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Health West asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Health West estimates its 2027 Annual Rebate Opportunity Cost to be approximately $640,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Health West estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $135,000. Considering the 2027 and 2028 MFP drugs, the estimated upfront monthly cost increase will be $267,000 in 2027, and $324,000 in 2028 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Health West, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Health West urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $178,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Health West strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Health West believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Health West appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brady Brower bbrower@healthwestinc.org. Sincerely, Mindy Benedetti Health West, Inc.
HRSA-2026-0001-1412Connecticut Hospital Association2026-04-10T04:00Z7,918 chars
Attached, please find the comment letter from the Connecticut Hospital Association. April 9, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, The Connecticut Hospital Association (CHA) is a not-for-profit membership organization that represents hospitals and health-related organizations. CHAs mission is to advance the health of individuals and communities by leading, representing, and serving hospitals and healthcare providers across the continuum of care that are accountable to the community and committed to advancing health and health equity. We appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information (RFI): 340B Rebate Model Pilot Program, which seeks feedback on whether HHSs Health Resources and Services Administration (HRSA) should implement a rebate model under the 340B Drug Pricing Program (340B Program) and how best to operationalize any such rebate framework for stakeholders. CHA strongly opposes HRSA implementing a rebate model under the 340B Program. We cannot overstate how detrimental a shift in the way the 340B discount is currently administered, even as a test pilot, would be for our hospitals and their communities. Preserve the Existing 340B Program For more than 30 years, the purpose of the 340B Program has been to help hospitals stretch scarce federal resources to support low-income, uninsured, rural, and medically at-risk individuals, as well as support the delivery of whole-person care, improve health equity, and help hospitals invest in their communities. As covered entities under the 340B Program, eligible Connecticut hospitals achieve these goals by purchasing drugs at discounted prices, which in turn generates savings that hospitals then use to provide free or reduced- cost care for their patients and to fund the delivery of essential health services to vulnerable populations in their communities. Restructuring the discount framework (even as a pilot model) to shift away from the longstanding, upfront savings model and instead require hospitals to pursue retrospective manufacturer rebates will destabilize the 340B Program. HRSAs RFI does not provide a reason for why a shift in the discount framework is necessary or what a change in the programs administration is intended to achieve. Instead, HRSA appears to introduce a solution to an undefined problem. Given the multitude of potential negative implications, CHA strongly believes HRSA should abandon the concept altogether and not risk weakening a program that has proven successful. In support of this position, we outline the considerable financial and administrative challenges operationalizing a rebate pilot presents for Connecticut hospitals. 110 Barnes Road P.O. Box 90 Wallingford, Connecticut 06492-0090 Telephone: (203) 265-7611 Fax: (203) 284-9318 http://www.cthosp.org The Honorable Thomas J. Engels April 9, 2026 Page 2 Financial Impacts of a Rebate Model On top of existing financial pressures, hospitals today face increasing financial strain due to impending federal policy changes that will impact reimbursement and reduce patient access to health insurance coverage, potentially resulting in a substantial rise in uncompensated care. Transitioning any portion of the 340B Program to a rebate model would further compound these challenges by requiring hospitals, in effect, to extend interest- free loans to manufacturers costs that have not been budgeted for and that many hospitals cannot absorb while awaiting reimbursement. This will result in an exacerbation of the considerable financial strain hospitals are currently operating under and hinder their ability to fund and continue to provide essential services. Additionally, HRSA has indicated that it is looking to expand the rebate model pilot program to all drugs included in the Inflation Reduction Acts Medicare Drug Price Negotiation Program through 2027, which means hospitals would need to estimate and plan for a cost burden that would include 25 total drugs across 13 drug companies. Hospitals may also be required to pay the wholesale acquisition cost (WAC), or the highest sale price for a drug (a price rarely even paid in the market, as the WAC price can be as much as or more than 100 times the 340B price for the drug). CHA urges HRSA to consider the implications of this cost burden, including the fact that hospitals are unlikely to have sufficient cash reserves to absorb these substantial upfront costs for 25 drugs at above-market prices, and the budget constraints that would be required for these purchases would ultimately constrain drug availability and delay patient care. Smaller or rural hospitals are especially less positioned to offset or absorb the financial impacts of this shift, putting the vulnerable patients within their communities at a disadvantage. Furthermore, a rebate model raises concerns that manufacturers could institute mechanisms that would delay or deny payment to hospitals. HRSA has not clarified whether safeguards would be put in place to prevent manufacturers from denying rebates or imposing limitations on the criteria for doing so, nor whether hospitals would have access to an expedited appeals process to address denied claims or payment delays. Administrative Burdens and Resource Challenges Associated With a Rebate Model For decades, hospitals have been able to reliably estimate the internal resources necessary to operate the upfront discount model, and the benefits of participation have far outweighed any administrative burdens. However, with the addition of a potential rebate model pilot, hospitals will need to pivot to accommodate two fundamentally different models at the same time. The irrefutable burden of having to administer two counterintuitive discount models simultaneously will be enormously resource intensive, as hospitals would need to contemplate implementing new workflows and processes to track claims, hire more staff, submit rebate requests, reconcile payments, refute potential reimbursement denials, and invest in new information technology systems. Again, it must be emphasized that having to account for potentially 25 different drugs across 13 drug companies as part of a rebate mechanism only exacerbates these administrative burdens. Similarly, administrative burdens resulting from the rebate pilot would not be felt uniformly amongst hospitals, as smaller and rural hospitals would be disproportionately impacted. For all hospitals, there is concern about what trialing a rebate pilot could mean for the future of the 340B Program, and, absent any clearly identified problems with the current upfront discount framework, implementing a rebate pilot is a slippery slope that will perpetuate uncertainty about what will be required to maintain participation in the program. The Honorable Thomas J. Engels April 9, 2026 Page 3 Hospitals are essential partners to HRSA in accomplishing the 340B Programs objective. Absent any clearly identified issues with the existing upfront discount model and considering the significant financial and administrative burdens a rebate approach would impose on hospitals, there is no justification for HRSA to move forward with testing ways to operationalize rebates. Therefore, CHA strongly urges HRSA to abandon consideration of a rebate model pilot, as it will only undermine hospitals ability to fulfill their mission and restrict the 340B Programs reach. Sincerely, Marielle E. Daniels Director, Regulatory Advocacy MED:ljs
HRSA-2026-0001-1413Columbia Memorial Hospital2026-04-10T04:00Z31,708 chars
Columbia Memorial Hospital (CMH) is a community-based Critical Access Hospital located in Astoria, Oregon, serving patients across a rural coastal region. As a covered 340B entity (CAH381320-00), CMH is submitting this public comment in response to HRSAs Request for Information regarding the 340B Rebate Model Pilot Program. CMH Date: 4/8/26 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Heatth and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 DearAdministrator Engels, On behalf of Columbia Memorial Hospital (CMH), a Critical Access Hospital (CAH) located in Astoria, Oregon, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Columbia Memorial Hospital that far outweigh any benefits that might come from it. Our analysis shows HRSA's own calculations of program burden vastly underestimate the impact this change will have on our organization. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Columbia Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Columbia Memorial Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved Columbia Memorial Hospital CMH-OHSU Health Cinics Lower Columbia Hospice CMH Urgent Care 2111 ExchangeStreet 2111 Exchange Street 2111 Exchange Street 2111 Exchange street Astoria, OR 97103 Astoria, OR 97103 Astoria, OR 97103 Astotia, OR 97103 (503) 325-4321 (503) 325-4321 (503) 338-6230 (503) 325-4321 CMH under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that our hospital wilt be required to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that our Critical Access Hospital can spend on patient care and comprehensive health care services in our rural community. Administrative Costs Under a Potential 340B Rebate Program: Any rebate program would require Columbia Memorial Hospital to spend significant amounts of our 340B savings on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. Based on CMH's experience with the Medicare Fair Price (MFP) program, which has already introduced significant administrative burden despite being limited in scope, as well as our existing 340B administrative requirements, we anticipate that implementation of a 340B rebate model (including up to 25 drugs) would result in a substantial and ongoing operationat impact. We estimate the need for at least one additional FTE (340B coordinator) to manage data submission, rebate tracking and reconciliation, and the investigation and appeal of denied rebates. This would be in addition to recent increases in staffing required to track claims associated with the MFP program. In addition to this dedicated role, implementation of a rebate model would require significant involvement from multiple departments across the organization, including pharmacy (clinical validation and drug tracking), finance (cash tracking, reconciliation, and variance analysis), information technology (data extraction, interface development, and system maintenance), and analytics/reporting teams (development of new reports and 2 CMH ongoing monitoring tools). Leadership oversight would also be required to managefinancial risk and compliance exposure. As a result, the administrative cost burden extends well beyond a single position and represents a system-wide operational impact. A rebate model also introduces an entirely new layer of operational complexity requiring claim-level lifecycle tracking, from dispensing to submission, manufacturer adjudication, rebate payment, and potential denial or appeal. These activities are not part of current 340B operations and would require new processes, reporting capabilities, and continuous oversight. Because the proposed rebate model would initially apply only to a subset of drugs (e.g., up to 25 selected drugs), CMH would be required to operate and maintain two parallel 340B program structures simultaneously, one system based on the traditional upfront discount model and one based on a rebate model. This dual-model environment would significantly increase operational complexity, requiring separate workflows, tracking mechanisms, compliance processes, and reporting structures for different drug sets within the same program. Staff would need to distinguish between discount-eligible and rebate-eligible drugs at the claim level, increasing the risk of errors, duplicate work, and compliance challenges. Maintaining two concurrent models is inherently inefficient and would further amplify administrative burden, staffing needs, and system requirements. This dual-model structure introduces fragmentation, duplication, and avoidable compliance risk into program operations without improving efficiency or program integrity. CMH would also incur one-time and ongoing costs for administrative and reconciliation software, as current systems are not capable of managing the added complexity of rebate tracking, denials, and appeals. Based on discussions with vendors and our experience with third-party tools, we anticipate significant upfront implementation costs and ongoing recurring expenses (in the thousands of dollars per month), which will scale with program complexity, ctaim volume, and number of participating manufacturers. Staffing Impacts Under a Potential 340B Rebate Program: Columbia Memorial Hospital does not currently have the staffing resources necessaryto complywith a 340B Rebate Model Pilot Program. Based on our experience with the Medicare Fair Price (MFP) program and current 340B administrative requirements, implementation of a rebate model would require at least one additional full-time employee dedicated to 340B program administration. This individual would be responsible for data 3 CMH subrnission, rebate tracking and reconciliation, investigation and appeal of denied rebates, coordination with vendors and manufacturers, and ongoing compliance support. At CMH, we currently pay our one 340B Coordinator approximately $59/hour ($122,720 annually) before benefits, which reflects the prevailing wage in Oregon for an individual with the pharmacy and informatics expertise required to support this work. Funds to support this additional FTE will come directly from the 340B resources that the hospital currently receives as a result of the savings. Funds that are currently used to support programs like the only inpatient maternity department in Clatsop County. Given the specialized nature of 340B program administration and our rural location, we would require approximately 3-6 months of advance notice to recruit, hire, and train appropriate staff. In addition to this new position, we anticipate a meaningful reallocation of existing staff time across pharmacy, finance, and IT. These teams would be required to support data validation, reconciliation processes, and ongoing monitoring of manufacturer requirements, diverting resources awayfrom patient care and other operational priorities. We are a small Critical Access Hospital, and we know HRSA's estimate of approximately five hours per week of additional administrative work is a significant underestimation. Our experience with the MFP program demonstrates that rebate tracking and reconciliation are not fully automated and require substantial manual effort. Manufacturers frequently deny rebates based on limited or circumstantial evidence, requiring detailed investigation and time-intensive appeals that can take hours of work to prepare and weeks for manufacturers to resolve. Additionally, manufacturer requirements and processes change frequently, and arbitrarily, requiring continuous monitoring and adjustment. When these activities are scaled across up to 25 drugs, and potentially across all eligible claimsnot just Medicare Part D claimsthe administrative burden becomes ongoing and resource-intensive, far exceeding a minimal weekly time commitment and necessitating dedicated staffing and sustained operational support. 4 CMH Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Columbia Memorial Hospital has designed our technological systems and operational infrastructure around the current 340B discount model. A shift to a rebate- based mechanism would require significant modifications to our existing systems and processes which will carry significant initial and ongoing costs. To implement a rebate model, CMH would need to invest in new or enhanced software solutions to support claims identification, data aggregation, rebate tracking, and reconciliation. Our current systemsincluding our EHR and existing 340B third-party administrator platformsare not designed and cannot be readily adapted to manage the added complexity of tracking rebate eligibility, and reconciling payments in an environment where denials and appeals are common. As a result, we anticipate the need for third-party administrative and reconciliation tools, as well as additional interfaces between systems. Based on our experience with vendors, we expect one-time implementation costs in the thousands of dollars, including system configuration, interface development, and data mapping. In addition, we anticipate ongoing monthly costs in the thousands of dollars for software licensing, transaction fees, and system maintenance. These costs would be recurring and would increase with the volume and complexity of claims included in the rebate program. As noted above, there will also be staffing costs associated with the development and ongoing maintenance of these tools. A key challenge is the requirement to provide more detailed medical claims data for hospital-based services. Our third-party administrators (TPAs) do not currently have access to the level of detail being proposed as part of the pilot, and there is no direct data feed from our electronic health record (EHR) to support this level of reporting. As a result, much of the required information would need to be manually extracted from multiple systems, validated for accuracy, and reformatted to meet vendor and manufacturer specifications prior to submission. There is also a lack of clarity regarding what specific data elements would be required for medications administered in the hospital or in our clinics that are currently eligible underthe existing 340B process, which adds further complexity and implementation risk. Developing new reports and workflows to support these requirements would be time- consuming and prone to error, requiring significant staff involvement across IT, pharmacy, and finance. Unlike the current modelwhere eligibility is determined by the covered entity just after the time of dispensing or administration, the rebate model introduces a 5 M retrospective, multi-step process that relies on data systems not designed for this purpose and places adjudication in the hands of manufacturers, where financial incentives may not align with timely and consistent rebate approval. Overall, the transition to a rebate-based model would require substantial investment in new systems, ongoing vendor costs, and increased manual processes, all of which add complexity and administrative burden without improving patient care. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Columbia Memorial Hospital currently collects, maintains, and validates 340B- related data through a combination of internal systems and third-party vendors. Our electronic health record (EHR), pharmacy systems, and 340B software platforms are used to track eligibility, prevent duplicate discounts, and support internal auditing processes. We also utilize third-party administrators (TPAs) to manage contract pharmacy claims and ensure compliance with current program requirements. CMH has a strong track record of compliance, with no findings in recent HRSA or external audits and no identified duplicate discounts through our internal auditing processes. While CMH does submit data to manufacturer platforms such as ESP, this is limited to contract pharmacy claims and was implemented in response to manufacturer restrictionsnot as a requirement of the 340B statute or HRSA. The data currently submitted is relatively high-level and limited in scope compared to what has been proposed under the rebate model. A potential 340B Rebate Model Pilot Program would significantly change our current data collection activities. The proposed model would require the inclusion of in-house pharmacy claims and medications administered in hospital outpatient and clinic settings, which are not currently part of external data submission processes. This would represent a fundamentally new and ongoing operational requirementnot a one-time change. CMH would need to pull data from multiple internal systems, including the EHR, pharmacy 6 CMH dispensing systems, and billing/claims systems, and in many cases perform manual extraction, validation, and formatting to meet submission requirements. We do not agree with HRSA's assertion that the data required under a rebate model would be comparable to data already being collected or shared. The current data shared with TPAs and manufacturers is limited, standardized, and largely automated for contract pharmacy claims. In contrast, the proposed rebate model would require more detailed, patient-level data across multiple care settings, including hospital-administered drugs, which are not currently transmitted externally in this manner. Existing systems and vendor relationships are not designed to support this level of data integration or reporting. CMH also has concerns about the requirement to share more detailed, potentially patient-specific data outside the organization without clear guidance on how that data will be used, stored, or protected, introducing additional compliance, privacy, and operational risks. As outlined above, the rebate model represents a fundamentally new and ongoing operational requirement that would require complex data aggregation across multiple internal systems, often relying on manual workflows. Overall, this is not an extension of current practices but a significant expansion in scope and complexity that would materially increase administrative burden, require additional staffing resources, and introduce greater risk of data inconsistencies, compliance exposure, and operational inefficiencies. Existing systems and vendor relationships are not designed to support this level of integration, aggregation, and reporting. Furthermore, because the rebate program applies to only a limited set of medications (25), CMH would be required to maintain a parallel system to continue managing the existing discount model for all other medications, further compounding operational complexity and increasing the risk of errors. Payment Timing and Potential Cash Flow Impacts: Unlike the existing upfront discount mechanism, any rebate mechanism will force Columbia Memorial Hospitalto effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. 7 CMH Columbia Memorial Hospital relies on the current 340B upfront discount model, which provides immediate cost relief at the time of drug purchase. Prior to manufacturer- imposed restrictions over the last several years, CMH realized approximately $4,000,000 in savings on hospital-based drug purchases and $500,000 in net revenue from contract pharmacies. However, contract pharmacy restrictions have increased administrative burden and reduced contract pharmacy revenue to approximately $100,000 in 2025, despite no evidence that CMH was in violation of any 340B program requirements. A shift to a rebate- based model would further exacerbate these challenges by requiring CMH to pay full price upfront and wait for reimbursement, effectively forcing the hospital to finance pharmaceutical manufacturers through interest-free loans. Even with a proposed 10-day payment window, this model would have a meaningful impact on our cash flow. Based on our experience with the Medicare Fair Price (MFP) program and current manufacturer behaviors, payment timetines are frequently delayed due to data validation requirements, denials, and appeals. Rebates are often denied based on limited or circumstantial evidence, requiring additional time and administrative effort to resolve. As a result, actual payment timing would likely extend well beyond the proposed 10-day window. Unlike the current wholesaler model, where discounts are applied at the time of purchase and payment terms are predictable, a rebate model introduces uncertainty in both the timing and amount of reimbursement. CMH would be required to carry the full acquisition cost of drugs, often high-cost specialty medications, while managing delays and variability in rebate payments. This creates financial risk, particutarly for a Critical Access Hospital operatingwith limited margins and constrained liquidity. While CMH maintains strong financial stewardship, as a CriticalAccess Hospital, we do not maintain excess cash reserves to absorb sustained delays in reimbursementwithout impact. The cumulative effect of carrying these costs, particularly across multiple high-cost drugs, could strain liquidity and, depending on scale and duration, may impact compliance with financial covenants or internal liquidity targets. The assertion that rebates would be paid prior to wholesaler invoice obligations is not consistent with our operational experience. Our wholesaler invoices are subject to standard payment terms (typically net 15 days, with discounts tied to timely payment) and must be paid regardless of rebate status. In contrast, rebate payments are contingent on 8 CMH submission, validation, and manufacturer approval processes that are outside of the hospital's control. Accordingly, CMH does not believe a 10-day payment window would be consistently achievable in practice. Adverse Impacts of These Additional Costs and Burdens: All of these many different costs and burdens add up. Columbia Memorial Hospital is a 25-bed Critical Access Hospital that has participated in the 340B Program since 2011. Over the past 15 years, we have built a highly compliant program with robust internal and external auditing processes. In the past six years, CMH has undergone a HRSA audit, two external audits, and annual full-program audits with no findings, demonstrating our strong commitment to program integrity. Based on this experience, we believe that broad allegations of duplicate discounts and program abuse do not accurately reflect how compliant hospitals manage the 340B Program. The additional administrative and financial burdens associated with a rebate model would further erode already diminished 340B resources. Rural hospitals like CMH are facing significant pressures from workforce shortages, reimbursement challenges, and rising supply costs, particularly pharmaceutical expenses, which represent one of our largest cost drivers. Redirecting limited 340B savings toward administrative overhead, staffing, and vendor costs reduces our ability to reinvest those resources into patient care. At CMH, 340B savings directly support essential services, including the only maternity department in Clatsop County, where patients travel up to 90 minutes for delivery services. These funds are not excess revenue; they are a critical lifeline that allows us to sustain access to care in a rural community. In addition to supporting inpatient maternity services, 340B savings at CMH are used to sustain access to essential services such as pulmonology, endocrinology, and care coordination for vulnerable patient populations. These services are critical in a rural community where alternative care options are limited and often require significant travel. Any reduction in 340B resources could directly impact our ability to maintain these services locally. While we recognize HRSA's interest in increased transparency, we believe there are more efficient and less burdensome approaches. For example, a national clearinghouse for contract pharmacy claims data, administered by HRSA (not pharmaceutical manufacturers), could improve visibility while maintaining appropriate safeguards for 9 CMH sensitive patient information. It is not currently clear how manufacturers are usingthe data being shared in ESP, nor how they woutd use the more detaited data they are requesting as part of the proposed rebate program, which raises additional concerns. Placing further administrative and financial burden on Critical Access Hospitals, many of which are already operating on thin or negative margins, risks reducing access to care in rural communities. We urge HRSA to carefulty consider these impacts when evaluating a potential rebate model. Given the disproportionate impact on Critical Access Hospitals and rural providers, HRSA should not proceed with a rebate model. At a minimum, any future consideration must fully account for the unique financial and operational constraints of small and rural providers. Reliance Interests: The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Columbia Memorial Hospital reasonably relied on this history when designing our internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the significant costs outlined above that this disruption witl impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform: Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 10 CMH Columbia Memorial Hospital did not fully implement the Beacon IT platform due to the short preparation window. However, during our review and preparation efforts, we identified several significant concerns that would have impacted our ability to safely and effectively participate in a rebate program. First, Beacon's Terms and Conditions raised concerns related to data ownership, use, and liability. The agreements did not provide sufficient clarity regarding how submitted data, potentially including patient-level information, would be used, stored, or shared. As a covered entity, CMH has a responsibility to safeguard patient information, and we were not comfortable with the level of ambiguity around data governance and protection. Second, Beacon's data requirements and submission expectations were unclear and evolving during the short implementation period. Requirements appeared to change frequently, with limited guidance on data definitions, formatting, and validation standards. This created uncertainty and made it difficult to develop reliable workflows or ensure compliance with submission expectations. Third, customer support and communication were limited and insufficient given the complexity of the program. As questions arose related to data requirements, system functionality, and compliance expectations, responses were often delayed or lacked the specificity needed to move forward with confidence. For a program of this scale and complexity, this level of support is not adequate. Based on this experience, we have several recommendations for any potential 340B Rebate Model Pilot Program. First, clear and standardized data requirements must be established well in advance of implementation, with sufficient time for testing and validation. Second, any platform used for data submission should include strong, transparent data governance policies, including clear limitations on how data can be used, stored, and shared, and explicit protections for patient privacy. Third, covered entities should not be required to submit sensitive patient-level data to platforms operated by or on behalf of pharmaceutical manufacturers. If data submission is required, it should be managed through a neutral, HRSA-administered or regulated entity, with appropriate oversight and security controls. Finally, robust customer support and implementation resources must be available to ensure hospitals can comply without excessive administrative burden or risk. 11 CMH Without these guardrails, the use of a platform such as Beacon raises significant concerns related to privacy, security, operational feasibility, and comptiance risk. Efforts To Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made it clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our organization, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities we serve. Our existing deduplication processes are well-controlled and far less burdensome than a rebate model. Eligibility is determined just after the time of dispensing or administration, and contract pharmacy claims are managed through established third-party administrator workflows. These processes are largely automated, standardized, and integrated into our operations, allowing us to maintain compliance without significant additional administrative burden. To date, no drug manufacturer has raised a 340B/MDPNP deduplication concern with CMH. This reinforces that a rebate-based model is not necessary to address duplicate discount concerns for compliant covered entities. As noted previously, Columbia Memorial Hospital has not experienced any identified issues related to 340B/MDPNP duplicate discounts over the past 10 years. Through our established compliance processes, including internal and external auditing, third-party oversight, and routine monitoring, we have consistently ensured appropriate identification and prevention of duplicate discounts. This has been validated bya HRSA audit, two external audits, and annualfull-program audits, allwith nofindings, demonstratingthe effectiveness of our current approach. Likewise, we support the American Hospital Association's position that there are viable, lawfuL and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 12 C A H For all of these reasons, Columbia Memorial Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA, therefore, shouLd abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this misguided effort, it must allow Cotumbia Memorial Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Sincerely, Erik Thorsen Chief Executive Officer Columbia Memorial Hospital 13
HRSA-2026-0001-1414United Community Health Center2026-04-10T04:00Z21,689 chars
See attached file for UCHC's full comment. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 April 9, 2025 Fp.3 UCHC UNITED COMMUNITY HEALTH CENTER RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of United Community Health Center (UCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. For twenty years, it has been UCHC's mission to provide affordable, quality and culturally sensitive healthcare services to the diverse communities we serve. Last year it was our privilege to serve 5,320 patients across a total of 18,080 clinical visits. Iowa's CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an integral part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. Summary of Recommendations: In short, UCHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSA's and manufacturers' stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that... govern the approval of manufacturers rebate plans' must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Additionally, if HRSA chooses to proceed with a rebate pilot program, HRSA should select a start date for the implementation of the rebate model that is no sooner than January 1st, 2027, to allow CEs sufficient time to prepare to comply with program requirements. HRSA requested input on these in the first paragraph of the RFI summary. Summary of Comments: In these comments, UCHC explains: A. The importance of 340B savings to UCHCs' ability to provide high-quality, affordable primary care, behavioral health, and dental care to our 3,827 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs' low-income patients rely on. CHCs serve as the backbone of the nation's safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high- quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs' financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the limited access populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHCpatients rely on. For example, Iowa's CHCs routinely rely on 340B savings to support services such as offering sliding fee discounts on services reducing the overall cost of medications, maintaining access to dental and maternal health services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients' needs. B.A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federat Register 75.307 - Program Income 2 currently paid for those chugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs' buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last year's proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically at-risk patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, CHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. 3 As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it would not be surprising if CHCs were forced to reduce the extent of their sliding fee discounts and may have to cut back on the services they provide and lay off staff members. D. CHCs must be exempted from any rebate model due to their heightened risk to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. 4 E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the "standards and procedures that should govern the approval of manufacturers rebate plans." While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to "advance" CHCs enough rebates for cover the greater of two full package sizes or two months' worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments. Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHC's average number of dispenses for that drug over a typical two-month period. This "two-package or two-month" standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summer's FRN stated that "no additional administrative costs of running the rebate model shall be passed onto the covered entities." However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a. Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and b. Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of "undispensed" units. "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs' costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturer's rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a. It is unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. b. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs' contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturer's unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) 7. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSA's primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication"5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nation's primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSA's decisions in this area. A rebate model would directly threaten CHCs' financial stability and force reductions in the essential services these patients rely on. We appreciate HRSA's commitment to a transparent process and trust the agency will: 5 Health Resources and Services Administration 340B Promrn Notice: Aoolirntion Process _for the 340B Rebate Model Pilot Progtarn, August 1. 2025. https://federalregister.gov/d/2025-14619 6 Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs' financial viability or patient access to care. If HRSA chooses to proceed with a rebate pilot program, we request that HRSA select a January 1st, 2027, start date to allow CEs time to prepare to comply with program requirements. Thank you for your consideration and for your continued commitment to the nation's safety net. For further information, please contact Peter Atiemo, CEO of UCHC at (712) 213-0109 EXT 1106. Sincerely, ---P-eiti- 4finr Peter Atiemo 7 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should "be borne by the manufacturer." Time and effort from CHCs' pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drug's discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. lnterest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs' financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs' costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. 8
HRSA-2026-0001-1415The Monadnock Community Hospital2026-04-10T04:00Z9,858 chars
See attached file 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Monadnock Community Hospital, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Monadnock Community Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Monadnock Community Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Monadnock Community Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Monadnock Community Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Monadnock Community Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Monadnock Community Hospital that we would incur 2 some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A rebate model would require substantial one-time startup costs and recurring operational expenses. One-time costs would likely include legal and compliance review, workflow redesign, staff training, system mapping, payer and vendor contract changes, and integration of claims and rebate tracking processes across multiple departments. Ongoing costs would likely include claim reconciliation, rebate submission and follow-up, denial management, dispute resolution, data validation, audit support, and management oversight, all of which would divert hospital resources away from patient care. These costs in total would be substantial for the hospital. Staffing Impacts Under a Potential 340B Rebate Program. Monadnock Community Hospital does not currently have the staff needed to comply with a Rebate Program. Implementation of a 340B Rebate Model Pilot Program would almost certainly require additional dedicated administrative staff and could also pull existing staff away from clinical and operational duties. At a minimum, MCH would likely need personnel with responsibilities in claims reconciliation, rebate submission, data validation, denial tracking, payer follow-up, and compliance oversight, because the current staffing model is built around an upfront discount program rather than a post-sale rebate process. Depending on the final program rules, MCH would likely need at least 12 additional full- time equivalents to manage the workflow, with more support possibly required during implementation and audit periods. Advance notice of at least 612 months would be needed to recruit, hire, train, and embed those staff into existing revenue cycle and compliance processes. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Monadnock Community Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. MCHs current technological and operational infrastructure is designed for an upfront discount model, not a rebate workflow. A rebate program would likely require new or significantly modified systems for claim capture, eligibility validation, third-party administrator reporting, data extraction from the EHR, rebate submission, reconciliation, and denial management. Because MCH is a community hospital with a broad service mix and many outpatient and inpatient 3 touchpoints, the data demands would be substantial and would need to be coordinated across pharmacy, revenue cycle, finance, compliance, and clinical operational which highlight particularly why its difficult to provide medical claims data and how that would likely involve manual work to provide that data to our TPA since we do not have a data feed directly into your EHR. Estimated IT costs would include one-time implementation expenses for software procurement or customization, interface development, testing, training, and go-live support, plus recurring maintenance, licensing, and technical support costs. The hospital would also need ongoing reporting tools and manual backup processes to manage exceptions, especially if claim data must be compiled outside the normal EHR workflow. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Monadnock Community Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Monadnock Community Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Monadnock Community Hospital Budgets a 0.5% margin annually which is approximately $500K annually. Having a shift to the 340b rebate model would create a major disruption to a delicate financial balance at our nonprofit hospital. For all of these reasons, Monadnock Community Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. 4 If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Monadnock Community Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Rochelle J. Sokol, MBA Chief Financial & Chief Operations Officer Monadnock Community Hospital
HRSA-2026-0001-1416Michigan Health & Hospital Association2026-04-10T04:00Z13,119 chars
See attached file(s) April 10, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Administrator Engels, On behalf of Michigans more than 80 hospital covered entities, the Michigan Health & Hospital Association (MHA) is grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The specific question being posed by the RFI, whether HRSA should implement a rebate model under the 340B program, has a specific answer, and that answer is no. The MHA opposes efforts to fundamentally shift the 340B program from an upfront discount to a rebate model. Since the outset, HHS has successfully operated the 340B program as an upfront discount. Imposing a rebate model will cause direct harm to hospital covered entities. The enormous cost and administrative burden brought about by the imposition of any rebate model goes against the fundamental premise of the 340B program stretching scarce resources to serve more eligible patients with comprehensive, high-quality services. By stretching scarce resources, 340B helps safety net providers maintain, improve and expand patient access to community-based care, all without allocation of state or federal taxpayer dollars. Michigan 340B hospital covered entities take these responsibilities seriously, as 340B program participation is a lifeline for them and for the communities they serve. The increased costs associated with shifting to a rebate model would directly harm services patients rely on that are supported by the 340B program. Michigan hospital covered entities value 340B program participation and work tirelessly to ensure program dollars support multiple opportunities to increase access to healthcare, ultimately improving Michigans overall health. The program benefits allow our community hospitals to provide an array of services they could not offer without 340B program participation. Savings derived from hospital program participation assist an incredible range of services, including (but not limited to): Supporting vital service lines like inpatient psychiatric services, obstetrics and gynecology. Allowing hospitals to design and implement robust financial assistance programs, which provide individuals in the community with extremely low- or no-cost care. Funding comprehensive cancer care. Supporting specialized hemophilia care. Funding specialized neonatal intensive care. Improving prescription drug affordability. We cannot be supportive of a rebate model. The financial implications for altering the longstanding upfront discount 340B program model would be devastating. Drug costs are higher than ever before, with a new drug entering the market topping more than $370,000 in 2024. Hospitals are some of the largest purchasers of drugs overall. Moving to a rebate model would upend the delicate balance of hospital financing. The enormous cost that hospitals will incur, both upfront increased costs of purchases and enormous new administrative costs, directly conflict with the goals of the 340B program. Instead of the 2 program supporting safety net hospitals, implementation of a rebate model will increase hospital costs, add administrative burden and reduce the overall benefit of the program to patients and communities. Michigan was one of only four states in the country where hospitals reported negative margins in 2024. Allowing large-scale, for-profit drug companies to force hospitals to pay upfront and beg for the chance of recuperation of funds is alarming. Drug manufacturer margins can be upwards of 49.6%, with that revenue generated here in the U.S. promptly going out of the country to support many offshore drug corporations. In alignment with other policies of this administration, we encourage you to champion upfront discount policies in 340B that keep the program benefits in our country, serving our residents. In addition to our concerns about the financial impact this and any future rebate model would have on all 340B hospitals, it will have a severe impact on rural hospitals. Michigan is the seventh most rural state in the nation, with 57 of 83 counties considered rural. Roughly 1.8 million Michigan residents reside in those counties and based on data from the Center for Healthcare Quality and Payment Reform, Michigan has 32% of its rural hospitals facing heightened risk of future closure. Four hospitals within that group are at risk of immediate closure. It is unsettling to push these rural facilities into a position where a program theyve relied on to keep patient services afloat now requires upfront payment, with only the hopes of repayment from a partner who has not historically acted in a manner aligned with partnership. The One Big Beautiful Bill Act highlighted the importance of rural health, with historic investment in the Rural Health Transformation Program. This rebate model is the antithesis of that prioritization and instead looks to punish 340B hospitals especially critical access, rural referral centers, sole community hospitals and DSH hospitals serving rural Michigan. Again, we urge you to align any program changes with the original intent of the program and not to fundamentally shift the program to benefit for-profit drug manufacturers. Finally, our membership shares deep concerns with the ongoing patchwork approaches to program requirements that manufacturers currently implement and would likely implement in a rebate model. Different approaches to rebate model compliance by each manufacturer should be considered a concerted attempt by the pharmaceutical industry to undermine the program, while causing direct harm to participating hospitals. Individual manufacturer compliance requirements would increase administrative costs and burdens, while directly diminishing the overall value of the 340B benefit to patients and community members. Again, we oppose program changes that pad the pockets of drug manufacturers and support maintaining program requirements that allow for benefits to be retained in the communities where care is being provided. The MHA thanks you for your engagement in this vitally important issue. Sincerely, Laura Appel Executive Vice President, Government Relations & Public Policy Michigan Health & Hospital Association April 10, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Administrator Engels, On behalf of Michigans more than 80 hospital covered entities, the Michigan Health & Hospital Association (MHA) is grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The specific question being posed by the RFI, whether HRSA should implement a rebate model under the 340B program, has a specific answer, and that answer is no. The MHA opposes efforts to fundamentally shift the 340B program from an upfront discount to a rebate model. Since the outset, HHS has successfully operated the 340B program as an upfront discount. Imposing a rebate model will cause direct harm to hospital covered entities. The enormous cost and administrative burden brought about by the imposition of any rebate model goes against the fundamental premise of the 340B program stretching scarce resources to serve more eligible patients with comprehensive, high-quality services. By stretching scarce resources, 340B helps safety net providers maintain, improve and expand patient access to community-based care, all without allocation of state or federal taxpayer dollars. Michigan 340B hospital covered entities take these responsibilities seriously, as 340B program participation is a lifeline for them and for the communities they serve. The increased costs associated with shifting to a rebate model would directly harm services patients rely on that are supported by the 340B program. Michigan hospital covered entities value 340B program participation and work tirelessly to ensure program dollars support multiple opportunities to increase access to healthcare, ultimately improving Michigans overall health. The program benefits allow our community hospitals to provide an array of services they could not offer without 340B program participation. Savings derived from hospital program participation assist an incredible range of services, including (but not limited to): Supporting vital service lines like inpatient psychiatric services, obstetrics and gynecology. Allowing hospitals to design and implement robust financial assistance programs, which provide individuals in the community with extremely low- or no-cost care. Funding comprehensive cancer care. Supporting specialized hemophilia care. Funding specialized neonatal intensive care. Improving prescription drug affordability. We cannot be supportive of a rebate model. The financial implications for altering the longstanding upfront discount 340B program model would be devastating. Drug costs are higher than ever before, with a new drug entering the market topping more than $370,000 in 2024. Hospitals are some of the largest purchasers of drugs overall. Moving to a rebate model would upend the delicate balance of hospital financing. The enormous cost that hospitals will incur, both upfront increased costs of purchases and enormous new administrative costs, directly conflict with the goals of the 340B program. Instead of the program supporting safety net hospitals, implementation of a rebate model will increase hospital costs, add administrative burden and reduce the overall benefit of the program to patients and communities. Michigan was one of only four states in the country where hospitals reported negative margins in 2024. Allowing large-scale, for-profit drug companies to force hospitals to pay upfront and beg for the chance of recuperation of funds is alarming. Drug manufacturer margins can be upwards of 49.6%, with that revenue generated here in the U.S. promptly going out of the country to support many offshore drug corporations. In alignment with other policies of this administration, we encourage you to champion upfront discount policies in 340B that keep the program benefits in our country, serving our residents. In addition to our concerns about the financial impact this and any future rebate model would have on all 340B hospitals, it will have a severe impact on rural hospitals. Michigan is the seventh most rural state in the nation, with 57 of 83 counties considered rural. Roughly 1.8 million Michigan residents reside in those counties and based on data from the Center for Healthcare Quality and Payment Reform, Michigan has 32% of its rural hospitals facing heightened risk of future closure. Four hospitals within that group are at risk of immediate closure. It is unsettling to push these rural facilities into a position where a program theyve relied on to keep patient services afloat now requires upfront payment, with only the hopes of repayment from a partner who has not historically acted in a manner aligned with partnership. The One Big Beautiful Bill Act highlighted the importance of rural health, with historic investment in the Rural Health Transformation Program. This rebate model is the antithesis of that prioritization and instead looks to punish 340B hospitals especially critical access, rural referral centers, sole community hospitals and DSH hospitals serving rural Michigan. Again, we urge you to align any program changes with the original intent of the program and not to fundamentally shift the program to benefit for-profit drug manufacturers. Finally, our membership shares deep concerns with the ongoing patchwork approaches to program requirements that manufacturers currently implement and would likely implement in a rebate model. Different approaches to rebate model compliance by each manufacturer should be considered a concerted attempt by the pharmaceutical industry to undermine the program, while causing direct harm to participating hospitals. Individual manufacturer compliance requirements would increase administrative costs and burdens, while directly diminishing the overall value of the 340B benefit to patients and community members. Again, we oppose program changes that pad the pockets of drug manufacturers and support maintaining program requirements that allow for benefits to be retained in the communities where care is being provided. The MHA thanks you for your engagement in this vitally important issue. Sincerely, Laura Appel Executive Vice President, Government Relations & Public Policy Michigan Health & Hospital Association
HRSA-2026-0001-1417(no commenter metadata)2026-04-11T04:00Z21,487 chars
See attached file(s) Edwards County Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Edwards County Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Edwards County Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Edwards County Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Edwards County Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Edwards County Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Edwards County Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Edwards County Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Edwards County Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. An estimated 20 additional hours a week will be needed to administer this new program model. Though this may be insignificant to some organizations, it is a substantial amount of additional time for my staff, which already has multiple tasks beyond 340B administrative functions. This will require more dollars to be spent on staff and administrative work, thus cutting into the benefits we are supposed to fund with these dollars. The reality is Edwards County Medical Center could close its doors if 340B dollars cannot continue to help us on our bottom line. Staffing Impacts Under a Potential 340B Rebate Program. Edwards County Medical Center does not currently have the staff needed to comply with a Rebate Program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Edwards County Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We have had to partner with a third party vendor to be able to collect, maintain, retain, validate, and audit data related to 340B Program participation. There are already significant additional costs that we incur. The 340B Rebate Model Pilot Program will only add more expenses and continue to take money away from the purpose of providing care. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Edwards County Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We do not have cash on hand to fund the rebate model. We barely have cash on hand to pay our bills! Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Edwards County Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We have been able to implement a pain management clinic that continues to grow. Without the 340B funds we will have to seriously consider whether we can continue this service to our community. We will also have to look at other services lines, like womens health and cardiology, and potentially stop offer them. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Edwards County Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Edwards County Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Edwards County Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Edwards County Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alisha Herrmann Chief Executive Officer Edwards County Medical Center, Kinsley, KS 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Edwards County Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Edwards County Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Edwards County Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Edwards County Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and 2 denials, and therefore less money that Edwards County Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Edwards County Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Edwards County Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. An estimated 20 additional hours a week will be needed to administer this new program model. Though this may be insignificant to some organizations, it is a substantial amount of additional time for my staff, which already has multiple tasks beyond 340B administrative functions. This will require more dollars to be spent on staff and administrative work, thus cutting into the benefits we are supposed to fund with these dollars. The reality is Edwards County Medical Center could close its doors if 340B dollars cannot continue to help us on our bottom line. Staffing Impacts Under a Potential 340B Rebate Program. Edwards County Medical Center does not currently have the staff needed to comply with a Rebate Program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Edwards County Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We have had to partner with a third party vendor to be able to collect, maintain, retain, validate, and audit data related to 340B Program participation. There are already significant additional costs that we incur. The 340B Rebate Model Pilot Program will only add more expenses and continue to take money away from the purpose of providing care. 3 Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Edwards County Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We do not have cash on hand to fund the rebate model. We barely have cash on hand to pay our bills! Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Edwards County Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We have been able to implement a pain management clinic that continues to grow. Without the 340B funds we will have to seriously consider whether we can continue this service to our community. We will also have to look at other services lines, like womens health and cardiology, and potentially stop offer them. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Edwards County Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT 4 platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Edwards County Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Edwards County Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Edwards County Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alisha Herrmann Chief Executive Officer Edwards County Medical Center, Kinsley, KS
HRSA-2026-0001-1418(no commenter metadata)2026-04-13T04:00Z44,557 chars
See attached file(s) April 10, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Morehouse Community Medical Centers, Inc. (dba CommuniHealth Services), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and in excess of 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MCMC, this means it will impact: 17,532 340B transactions/patients served annually Approximately $694,000 annually in slide savings for our underserved population Unfunded services like transportation, care coordination, and pharmacy assistance for low- income patients. The proposed Rebate Model also could impact the use of 340B savings to expand the services were able to provide, as well as access to care opportunities (addition of access points to service our three-parish service area). We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.0F1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.1F2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.2F3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.3F4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.4F5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,5F6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Last year, MCMC provided $694,000 in sliding fee discounts, providing discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCMC anticipates needing 3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, MCMC anticipates an increase of at least $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.6F7 For MCMC, we anticipate an additional 3 FTEs, should the proposed 340B Rebate Model reach full potential. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7F8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. MCMC estimates an annual cost increase of up to $3 million with the full implementation of the proposed 340B Rebate Model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. For MCMC, we anticipate, at minimum, the addition of 30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans, with that number growing exponentially should the 340B Rebate Model hit full potential. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. MCMC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. A variety of costly modifications to our current software and processes will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 17,532 patients, the projected total increase in expenses (including labor, IT, and carrying costs) is estimated at $1.75 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We currently estimate a one-time cost of $150,000 for known integration needs. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend more than 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 22 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Morehouse, Union, and Ouachita parishes with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8F9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9F10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10F11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 11 Internal NACHC survey data 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11F12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12F13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. MCMC currently utilizes sliding fee discounts for services offered through our health center, such as medical, dental, and prescription drugs. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13F14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14F15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15F16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1 million dollars to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $30,000 to purchase these same drugs at the 340B ceiling price. This represents a 3,333.33% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MCMC anticipates needing to reduce: Essential Clinical Services: To absorb the upfront cost of medications, we would be forced to scale back critical, non-revenue-generating services that our patients rely on to access care. This includes transportation assistance, pharmacy delivery services, care coordination, and social determinants of health (SDOH) referral support. Reducing these services creates immediate barriers to care, particularly for our most vulnerable patients, and undermines our ability to manage chronic conditions and prevent avoidable hospitalizations. Workforce & Staffing: The administrative burden created by this pilot would force us to redirect limited resources away from direct patient care. Funding required for rebate tracking and compliance would come at the expense of clinical support staff. For every Rebate Coordinator position added, we would lose the ability to fund two essential support roles, such as care coordinators, intake coordinators, and outreach specialists. In total, this translates to the elimination of approximately six positions that are critical to patient access, care continuity, and population health management. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates through our sliding fee scale will be significantly compromised. When funds are delayed or held by manufacturers, we lose the flexibility to offer immediate assistance at the point of care. Without that support, our 1,337 uninsured patients face a real risk of rationing essential medications, including insulin, cardiovascular drugs, and other life-sustaining therapies. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at 11 WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. MCMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, MCMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately 90% of rebates will be denied based on the current error rate of MFP drugs MCMC is experiencing. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. MCMC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend significantly. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on MCMC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays MCMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or 12 ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16F17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in Significant losses. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 14 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MCMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MCMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. MCMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Karen Williams, Director of Compliance & Risk Management (karen.williams@communihealth.org). Sincerely, Katie Parnell, CEO Morehouse Community Medical Centers, Inc. (dba CommuniHealth Services)
HRSA-2026-0001-1419Aspire Indiana Health2026-04-13T04:00Z44,017 chars
See attached file(s) April , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Aspire Indiana Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Aspire Indiana Health anticipates a loss of [$300,000 to $1 million from our 340B program and pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 2 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Aspire Indiana Health in particular, this means it will impact: Approximately 30,000 340B transactions a year for 17,000 patients served through Primary Care, Behavioral Health, and Substance Use Treatment services. Our ability to offset uncompensated care, provide sliding scale medication prices, transportation aid, expanding the availability, breadth, and depth of medical mental health, addition, and social determinants of health services Anticipated increased third-party administrative costs for 340B program participation We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Aspire Indiana Health provided nearly 4 million dollars in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Aspire Indiana Health anticipated the difficulties and financial impact stemming from a 340B rebate as well as manufacturer restrictions and Medicare negotiated drug changes from the Inflation Reduction Act. To account for the increase in regulatory, operational, administrative, and compliance burden created from all of these changes, Aspire entered into a partnership with an organization to assist with these challenges. Aspire is being charged an additional 2-6% per eligible claim compared to its previous vendor for pharmacy administration activities. Additional costs related to legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services are anticipated as the program complexity increases. 5 Staffing Impact: In part because of these and other threats to the 340B program, Aspire had to perform a recent reduction in force for 40+ employees, including a member of Aspires 340B compliance team. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Aspire Indiana Health has been forced into another scenario that Health Centers will have to consider, letting staff go to create space to hire organizations. Health Centers may come to the realization that contracting out these services is the best option considering the limited resources and capabilities to navigate program requirements ourselves. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Many hours and effort will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Aspire Indiana Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 100+ pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 150 in-house and contract pharmacy locations to ensure rebates are paid correctly, and diversion and duplicate discounts prevented. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Indiana with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Aspire Indiana Health works with patients who are low income to offer discounted medications that are assessed at the 340B price. The rebate model makes this assessment difficult and increases the risk of cost for the patient and Aspire Indiana Health. Additional savings from 340B are also used to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 help with sliding fee discounts for a variety of our patient services. 340B program changes and challenges decrease Aspires ability to assist patients to the same degree while also limiting Aspires ability to subsidize important programs for our patients' healthcare success. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $718,000 dollars to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $138,000 dollars to purchase these same drugs at the 340B ceiling price. This represents a 421% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Aspire Indiana Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we could be forced to scale back non-revenue-generating but essential services, such as transportation, care coordination support, increase wait times for services, scale back of operations at lower- volume clinic locations, etc. Operating Hours: Aspire would have to consider scaling back the number of hours per location, decreasing accessibility and risking patients being redirected to higher cost settings for care. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from staff. Aspire has already had to navigate reduction in staff and further program difficulties could lead to further reductions as costs increase and savings decrease. Less available employee resources put into our services lowers our ability to serve our patients. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1800+ uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Aspire Indiana Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Aspire Indiana Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $275,000 dollars. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Aspire Indiana Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $580,000 dollars. These numbers only drastically increase over time with 2027 and 2028 with increases to our upfront monthly drug spend being estimated at $2 million and $3 million dollars respectively. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our 11 organization would be forced to consider significant financial actions: mortgaging capital assets, or liquidating invested funds that are kept to address disruptions in insurance reimbursement, or other less than advantageous lines of credit or loans. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Aspire Indiana Health the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Aspire Indiana Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 2026 and 2027 selected drugs, even a conservative 10% denial rate would result in a net annual loss of approximately $240,000 dollars. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 13 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Aspire Indiana Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Aspire Indiana Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Aspire Indiana Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this 14 prominent issue. If you have any questions, please contact Kevin Sheward, Vice President, Strategy & Business Development at kevin.sheward@aspireindiana.org. Sincerely, Kevin Sheward Aspire Indiana Health Kevin Sheward (Apr 10, 2026 14:50:42 EDT) Kevin Sheward
HRSA-2026-0001-1420Tennessee Hospital Association2026-04-13T04:00Z8,505 chars
Please find the Tennessee Hospital Association's formal comment letter attached here. April 13, 2026 e-comment submitted electronically The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042) Dear Administrator Engels: The Tennessee Hospital Association (THA), on behalf of its over 160 healthcare facility members, of whom 39 participate in the 340B program with nine of those being critical access hospitals, appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information on the 340B Rebate Model Pilot Program. THA continues to have serious concerns with any transition from the longstanding upfront discount model to a rebate-based framework. For over three decades, the 340B program has successfully operated through upfront discounts, enabling hospitals to stretch scarce resources and expand access to care for vulnerable populations. A rebate model would fundamentally alter this structure, introducing significant financial, operational, and compliance risks without any clear evidence of corresponding benefits. While THA strongly urges HRSA not to proceed with a rebate model pilot, we offer the following comments in response to the RFI to ensure that, if the pilot is pursued, your agency understands the potential consequences for hospitals, particularly those serving rural and underserved communities. I. COSTS TO COVERED ENTITIES WILL INCREASE The current upfront discount model already requires substantial administrative infrastructure, including staffing, third-party administrator (TPA) services, IT systems, Page 2 of 5 compliance monitoring, and audit readiness. However, a rebate model would layer an entirely new operational system on top of existing requirements rather than replace them. Hospitals would incur both one-time and ongoing costs, including: Development of new IT systems and interfaces to support rebate submissions and reconciliation Increased TPA fees and vendor costs to manage additional data flows Legal and compliance expenses related to disputes, denials, and audits Expanded staffing needs to support claims submission, tracking, reconciliation, and appeals Importantly, even a limited pilot involving a small number of drugs would require full-scale infrastructure development. For many hospitals, particularly critical access hospitals and rural providers, these additional costs could erode or entirely offset the financial benefit of participating in the 340B program. This directly undermines the statutory purpose of the program. II. CASH FLOW DISRUPTION POSES MATERIAL FINANCIAL RISK Under a rebate model, hospitals would be required to purchase drugs at wholesale acquisition cost (WAC) and wait for reimbursement through rebates. This represents a significant shift in financial risk from manufacturers to providers. Even with a nominal requirement for rebate payments within a specified timeframe, hospitals would face: Increased working capital requirements Exposure to delays due to incomplete claims, disputes, or denials Greater reliance on lines of credit or internal reserves Reduced financial predictability For hospitals operating on thin margins, particularly rural and safety-net providers, these cash flow disruptions could impair their ability to maintain essential services. Critical access hospitals, which are already financially vulnerable, would be disproportionately impacted. III. ADMINISTRATIVE COMPLEXITY AND COMPLIANCE RISK WILL INCREASE A rebate model introduces significant new complexity into 340B program operations. Hospitals would be required to: Operate dual systems (upfront discount and rebate) simultaneously Page 3 of 5 Track and reconcile claims across multiple manufacturers, TPAs, and dispensing channels Manage claim-level submissions, denials, and appeals Maintain expanded audit trails and documentation This complexity increases the likelihood of errors, duplicate discount risks, and audit exposure. It also risks diverting staff time away from patient care and toward administrative functions. Without a standardized, centralized system, hospitals may be required to interact with multiple manufacturer-specific platforms, each with different requirements, further compounding the administrative burden. IV. STRONG GUARDRAILS AND STANDARDIZATION ARE ESSENTIAL If HRSA elects to move forward with a rebate model pilot, the program must include robust safeguards to protect covered entities. At a minimum, THA recommends: 1. Full Cost Reimbursement Manufacturers must be required to cover all administrative, IT, staffing, and legal costs associated with the rebate modelnot just data submission costs. 2. Centralized Clearinghouse HRSA should establish or designate a neutral, centralized platform for all rebate submissions, data validation, and payment processing to ensure consistency across manufacturers and to reduce administrative burden. 3. Strict Payment Enforcement Clear, enforceable timelines for rebate payments must be established, including automatic penalties and interest for late payments. 4. Standardized Denial Processes Denials should be limited to narrowly defined, objective criteria and must include standardized reason codes, documentation, and appeal pathways. 5. Formal Dispute Resolution Mechanism HRSA should create a transparent and timely dispute resolution process, rather than relying on informal complaint channels. 6. Data Standardization and Privacy Protections Required data elements should be limited to the minimum necessary and standardized across all participants, with strong protections for patient privacy and data security. V. REBATE MODEL MAY NEGATIVELY IMPACT ACCESS TO CARE The 340B program enables hospitals to fund essential services, including: Medication assistance programs Page 4 of 5 Chronic disease management Behavioral health services Specialty care, including obstetrics, in rural and underserved areas Increased costs and administrative burdens, along with delayed reimbursements associated with a rebate model, would reduce the resources available for these critical services. Hospitals may be forced to scale back service lines, limit access to high-cost therapies, or reduce contract pharmacy networks, particularly in rural areas where access is already limited. VI. HRSA SHOULD DEFINE CLEAR METRICS FOR EVALUATING THE PILOT The RFI does not clearly define how HRSA would measure the success of a rebate model pilot. Before proceeding, the agency should establish transparent, publicly available metrics, including: Acceptable thresholds for payment timelines and denial rates Impact on hospital administrative costs and staffing Effects on cash flow and financial stability Implications for patient access and service delivery Without clear evaluation criteria, stakeholders will not be able to assess whether the pilot has met its stated objectives. VII. THERE IS NO CLEAR POLICY JUSTIFICATION FOR A REBATE MODEL THA remains concerned that the rebate model is a solution in search of a problem. The upfront discount model has functioned effectively for decades, and the RFI does not provide evidence that a rebate model would improve program integrity, reduce duplicate discounts, or enhance transparency in a way that justifies the significant disruption it would cause. Conclusion The Tennessee Hospital Association strongly urges HRSA not to pursue a 340B rebate model pilot program. The risks to hospitals, patients, and communities, particularly in rural areas, far outweigh any potential benefits. If HRSA proceeds, it must incorporate robust safeguards, ensure full cost coverage by manufacturers, and establish clear, enforceable standards to minimize harm to covered entities. Page 5 of 5 THA and its members appreciate HRSAs consideration of these comments and welcome continued opportunities to work with the agency. If you or your staff wish to discuss this letter, please contact me at radams@tha.com. Sincerely, Rodney R. Adams Sr. Vice President, Finance & Reimbursement Tennessee Hospital Association
HRSA-2026-0001-1421Family Health Centers, Inc.2026-04-13T04:00Z26,244 chars
See attached file. Family < > Health Centers Everyone is welcome here. April 13, 2026 ve.df Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Submitted via regulations.gov Dear Director Britton: PORTLAND 2215 Portland Avenue Louisville, KY 40212 EAST BROADWAY 834 East Broadway Louisville, KY 40204 IROQUOIS 4100 Taylor Boulevard Louisville, KY 40215 IROQUOIS ANNEX Pharmacy & lmmediate Care 4112 Taylor Boulevard Louisville, KY 40215 IROQUOIS HIGH SCHOOL School Based Health Center On behalf of Family Health Centers, Inc. (FHC) in Louisville and the more than 4615 Taylor Blvd 39,000 patients we serve, thank you for the opportunity to comment on the Health Louisville, KY 40215 Resources and Services Administration (HRSA) Request for Information (RFI) regarding a potential 340B rebate pilot. Established in 1976, FHC is a Federally Qualified Health Center (FQHC) operating seven primary care sites, Portland, East Broadway, Fairdale, Iroquois, Americana, and Iroquois High School, as well as a behavioral health hub at West Market and the Phoenix Health Care for the Homeless program, which provides housing support, medical respite care, and street outreach. FHC operates a growing, integrated pharmacy program embedded within five clinical locations. This program helps address pharmacy deserts in underserved urban areas and ensures patients can access medications at affordable prices. As you know, community health centers purchase outpatient medications at 340B- discounted prices and reinvest those savings directly into patient care, as required by federal law. These resources remain within the safety-net system, supporting charitable care, sliding-fee discounts, and enhanced services that are often under- or uncompensated but criticalto improving health outcomes. Duringthe COVID-19 pandemic, FHC also introduced free pharmacy delivery to ensure our most vulnerable patients could safely access medications at home. FAIRDALE 1000 Neighborhood Place Fairdale, KY 40118 AMERICANA Refugee & Immigrant Health 4805 Southside Drive Louisville, KY 40214 WEST MARKET Counseling Center 2500 West Market Street Louisville, KY, 40212 PHOENIX Healthcare for the Homeless 712 Muhammad Ali Blvd. Louisville, KY 40202 PHOENIX MEDICAL RESPITE 120 West Broadway Louisville, KY 40202 Over the past five years, FHC has provided more than $31 million in charitable care PHOENIX COMMON supported by 340B savings. These funds have enabled services such as chronic ASSESSMENT disease management, community health workers, robust health education The Ollie Green ll Building 1300 South 4th Street, Suite 200 programming, and interpretation services, which is required but not reimbursed by Louisville, KY40208 insurance or covered by grants. These essential supports are what allow community health centers to truly meet patients where they are. 502-774-8631 www.fhclouisville.org The 340B rebate model is intended to prevent duplicate discounts and rebates forthe same drug. However, such a model is not necessary to achieve that goal and would impose significant administrative and financial burdens on community health centers. Federal policy changes should aim to accomplish their objectives in the least burdensome way and with minimal disruption to safety-net providers.' This rebate model fails to meet that standard and instead risks shifting resources away from patient care while benefiting manufacturers at the expense of providers and the communities they serve. SUMMARY OF RECOMMENDATIONS Family Health Centers strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSA's and manufacturers' stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that... govern the approval of manufacturers rebate plans2" must include at least seven safeguards to reduce the negative financial impacts on CHCs and their patients. COMMENTS A. 340B savings underwrite a wide range of services that Family Health Centers' low-income patients rety on. Family Health Centers, Inc. is the largest safety-net provider in Louisville-Jefferson County. In 2025, FHC provided care to more than 39,000 children and adults. The majority of our patients face significant barriers to accessing the traditional health care system; 88% live at or below the federat poverty level, 26% are uninsured, and 10% are experiencing homelessness. Many also face additional chatlenges such as limited transportation. Our patient population is racially and ethnically diverse (74% identify as racial or ethnic minorities), and 41% prefer to receive care in a language otherthan English. FHC works to bridge these gaps through sliding-fee discounts and enabling services that ensure patients can access the care they need, regardless of their ability to pay. 340B savings are essential to FHC's ability to provide affordable, comprehensive care to low- income and uninsured patients. Consistent with federal law and requirements under Section 330 of the Public Health Service Act, FHC reinvests 100% of its 340B savings into activities that expand ' 5 U.S.C. 500-596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda. ov/re ulator -information/search-fda- uidance-documents/least-burdensome- rovisions-conce t-and-Ninci les (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 2 First paragraph of the RFI summary 2 Family Health Centers, Inc. HRSA-2026-03042 access to care for underserved populations. These savings not only reduce the cost of medications but also serve as a criticalfunding source that sustains a wide range of essential services. In 2025, FHC reinvested 340B savings into: Medical care for uninsured and underinsured patients: $6.9 million in discounts, charitable care, and bad debt coverage Population health and care coordination programs Enrollment assistance for Medicaid and Marketplace health insurance plans Interpretation and language access services Laboratory services Case management, community health workers, health education, and chronic disease management Integrated behavioral health services, including counseling, psychiatric medication management, and substance use treatment Phase I dental services, including preventive care, cleanings, extractions, and X-rays In 2025, 340B savings accounted for 57% of FHC's total gross revenue, exceeding all other funding sources combinedand serving as a foundational component of our ability to deliver care to the communities we serve. B. A rebate modet wilt create massive cashflow, administrative, and other costs for CHCs. A 340B rebate model would impose substantial and unsustainable burdens on community health centers (CHCs), particularly in the areas of cash flow, administrative complexity, and financial risk. Unsustainable cash flow demand: In late 2025, CHCs estimated that purchasing the ten drugs included in the proposed 2026 pilot at Wholesale Acquisition Cost (WAC) would increase upfront costs by 50 to nearly 500 times current 340B pricing. For Family Health Centers, Inc. (FHC), annual spending on these medications would increase from approximately $126,000 to $5.6 million, a 44-fold increase. While the proposal suggests manufacturers would pay rebates within ten days, this does not mitigate the broader cash flow burden. The rebate timeline addresses only one step in a complex, multi-step financing process. CHCs must still purchase medications upfront, meet wholesaler payment deadlines, and manage inventory before any reimbursement is received, forcing many to borrow significant capital to sustain operations. Significant administrative burden. A rebate model would require CHCs to implement new IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It would also require increased financial oversight to manage borrowing costs and wholesaler fees. Even under current processes, the administrative burden is substantial. FHC dispenses only eight of the ten drugs included in the pilot, yet reconciliation is already highly labor- intensive. The current workflow requires: Accessing claim status through Beacon MFP Manually opening each claim to verify 340B eligibility (no bulk view available) Cross-referencing claims using secondary identifiers across systems 3 Family Health Centers, Inc. HRSA-2026-03042 Reprocessing and revisiting claims multiple times depending on status Because systems cannot process claims in batches, each claim must be handled individually, often multiple times before submission. HRSA estimates approximately five hours annually for administrative burden. However, based on real-world experience, FHC estimates this work would require approximately five hours every other daytotaling nearly 780 hours annually. In addition, denied claims create a separate, more complex workflow: Submitting invoices for both 340B and non-340B purchases Reconciling high-frequency pharmacy purchases not tied to individual claims Matching received payments to approved claims To meet these requirements, FHC estimates the need for three additional full-time staff (FTEs) dedicated solely to rebate reconciliation and dispute management. This process places the greatest administrative burden on CHCsthe stakeholders with the fewest resourceswhile manufacturers, who benefit financially from denied claims, retain control over approval and dispute timelines. Financial risk from rebate denials: The rebate model would effectively require nonprofit safety-net providers to extend an interest-free loan to large pharmaceutical manufacturers while assuming the risk of claim denials. CHCs rely on 340B savings to sustain operations and provide affordable medications, often operating on narrow margins. Even modest denial rates would have significant financial consequences. For FHC, a denial rate of: 5% could result in losses exceeding $114,000 10% could result in losses exceeding $228,000 In addition, more than $2.2 million in funds would be tied up as cash floated to manufacturers (see Attachment 2). Without clear guardrails or enforcement timelines, manufacturers have little incentive to ensure timely or fair reimbursement, further increasing financial uncertainty for CHCs. Losses from undispensed medications: The proposed rebate model does not account for medications that are not ultimately dispensed due to expiration, damage, or packaging constraints. For example, many medications are packaged in 100-count bottles, while insurers often reimburse only 30-day supplies. Under a rebate model, CHCs would be required to purchase these medications at full WAC without receiving rebates for unused units. This would force providers like FHC to absorb these losses, further eroding already thin pharmacy margins and, in many cases, making these medications financially unsustainable to provide. 4 Family Health Centers, Inc. HRSA-2026-03042 C. The costs resulting from a rebate model will force CHCs to scale back services, reduce discounts on drug, and potentially stop providing rebate drugs entirely - resulting in avoidable harm to patients' health. Reduction in services: As required under federal law and regulation, Family Health Centers, Inc. (FHC) reinvests every dollar of 340B savings into services that expand access to care for medically underserved patients. Any reduction in 340B savings, an inevitable outcome under a rebate model, would directly force FHC to scale back services that patients rely on. The eight of the ten drugs currently dispensed by FHC represent approximately 20% of total pharmacy revenue. The impact would extend beyond medication affordability to the full range of services supported by 340B savings, as described in Section A. Stopping dispensing rebate drugs: Faced with these financial pressures, many CHCs made the difficult decision in late 2025 to stop purchasing or dispensing drugs subject to the rebate model upon its implementation on January 1, 2026. Major chain pharmacies have taken similar actions. Both Walgreens and Walmart, the second and third-largest pharmacy chains in the United States, publicly announced plans to carve out rebate drugs from 340B. Compared to hospitals and other covered entities, FQFICs are particularlyvulnerable because they rely heavily on contract pharmacies to ensure access to affordable medications. For FHC patients, more than one-third rely on external pharmacies fortheir prescriptions. When contract pharmacies stop purchasingthese drugs under 340B, patients face significantly higher out-of-pocket costs-especially for high-cost therapies. This often leads to delays in treatment initiation or continuation, reduced adherence, and ultimately higher rates of avoidable complications and hospitalizations. Reduced access to affordable drugs for low-income patients: A rebate model would significantly limit FHC's ability to provide affordable medications to uninsured patients. FHC uses a cost-plus model (acquisition cost plus a nominal dispensing fee) for patients on a sliding fee scale, passing 340B savings directly to patients. This approach keeps medication costs affordable. Under a rebate model, maintaining this pricing structure would introduce substantial financial risk to Family Health Centers, making it increasingly difficult to sustain. KentuckyFee-For-Services rules further complicates the Rebate Model: Under 907 KAR 23:020, Section 5, Kentucky Medicaid requires that 340B-covered entities dispensing to Fee-for-Service Medicaid beneficiaries bill no more than their actual 340B acquisition cost, plus a professional dispensing fee. If Family Health Centers, Inc. is required to purchase drugs at WAC under a rebate model while still billing Medicaid at 340B acquisition cost, the organization would be forced to front significant costs. This effectively requires FHC to float funds to the state while awaiting reimbursement from manufacturers, reimbursement that is uncertain and may be delayed or denied altogether. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above (e.g., avoidable cash flow demands, administrative burdens, and harm to patients) apply to a degree to all 340B Covered Entities (CE), and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on 5 Family Health Centers, Inc. HRSA-2026-03042 proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of CHCs'340B purchases than for other CEs types. This is because the drugs subject to Medicare negotiation are common Part D medications, which CHCs frequently prescribe. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasingrebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the "standards and procedures that should govern the approval of manufacturers rebate plans." While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, the following protections should be required elements of the manufacturers' plans: 1. For each rebate drug, a requirement to "advance" CHCs enough rebates for cover the greater of two full package sizes or two months' worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers must advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers must advance enough rebates to cover their average number of dispenses for that drug over a typical two- month period. The "two-package or two-month" standard will provide CHCs with enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot, fully, promptly and transparently. We appreciated that the last summer's FRN stated that "no additional administrative costs of running the rebate model shall be passed onto the covered entities." However, the manufacturer plans that HRSA approved in the autumn fell far short of this commitment, as it failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and 6 Family Health Centers, Inc. HRSA-2026-03042 Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot, and also proposes a methodology for allocating these costs across manufacturers. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of "undispensed" units. "Undispensed" units are those units of a drug that, during the normal and appropriate course of business, are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), butthe proposed January 2026 pilot contained no mechanism for them to request or receive rebates on these units. This suggests that CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs' costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturer's rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Removing BIN and PCN from the list of required data elements. These data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens - a major contact pharmacy for Family Health Centers locally and CHCs in many part of the country, does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data in order to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs' contract pharmacies. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSA's primary goal of the rebate pilot -"to address 340B and Maximum Fair Price (MFP)deduplication"3 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. 3 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 7 Family Health Centers, Inc. HRSA-2026-03042 Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Align with the government's prevailing policy of "Least Burdensome Provisions"1. CONCLUSION In closing, the sustainability of our nation's primary care safety net, and the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care, depends on HRSA's decisions in this area. A rebate model would directly threaten CHCs' financial stability and force reductions in the essential services these patients rely on. We appreciate HRSA's commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularlythe financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs' financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nation's safety net. I can be reached at birwin@fhclouisville.org. Sincerely, Bart Irwin, PhD, MSSW Chief Executive Officer Family Health Centers, Inc. 8 Family Health Centers, Inc. HRSA-2026-03042 ATTACHMENT 1 Costs incurred by Family Health Centers as a direct result of the rebate pilot which the Summer 2025 FRN said should "be borne by the manufacturer." Pharmacy staff time includes, but not limited to: Reviewing and compiling data on submitted rebate requests. Monitoring which requests were paid. Disputing denials. Reconciling payments to aged receivables Explaining to patients why their drug's discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) Adjusting financial reports to reflect receivables and payments. Family Health Centers estimates that in addition to the additional 3 FTEs needed to hire, current 340B staff would need to allocate 30% of time (2 FTEs), to oversee the rebate model. Direct financial losses include, including but are not limited to. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price): 2025 Sub-ceiling discounts totaled more than $91,000; these go beyond oral medications, they are on everyday items like blood glucose monitors, IUDs etc. Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. For Family Health Centers this means prompt payment discounts applied across the board would result in a loss of over $1.25million peryear. Time and effort from CHCs' financial staff, including but are not limited to: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs' costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. Conservatively, Family Health Centers estimates additional accounting time to be at minimum 10 hours a month. 9 Family Health Centers, Inc. HRSA-2026-03042 $602.99 1976 $0.29 $59,575.41 $119,150.82 Jardiance 25mg $1,190,935.20 $316.14 750 $28.19 $11,855.25 $23,710.50 Januvia 1 00mg $215,962.50 Totals $114,119.64 $228,239.28 $2,256,174.92 Eliquis 5mg Farxiga 10mg $5.84 $580.83 $0.29 $574.53 $42,632.92 $42,745.03 $21,316.46 $21,372.52 $422,042.66 $427,234.56 734 744 ATIACHMENT 2 1. FINANCIAL RISK TO FHC FOR DENIAL CLAIMS FOR FOUR DRUGS 10 Family Health Centers, Inc. HRSA-2026-03042
HRSA-2026-0001-1422Columbus Regional Hospital2026-04-13T04:00Z6,437 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information from HRSA regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA 2026 03042) Dear Administrator Engels: We are grateful for the opportunity to comment on behalf of Columbus Regional Hospital (CRH), a 225- bed not-for-profit county hospital serving a 10-county region in south-central Indiana. CRH relies on the 340B Drug Pricing Program to provide essential emergency, obstetric, surgical and comprehensive acute and outpatient care in numerous specialty services including Oncology, Pulmonology, Cardiology and Gastroenterology. We appreciate HRSAs willingness to seek stakeholder input following the courts vacatur and remand of the prior rebate pilot and recognize the agencys responsibility to ensure program integrity. However, we are deeply concerned that any shift from the longstanding upfront 340B discount to a manufacturer- controlled rebate model would significantly harm Columbus Regional Hospital and the patients we serve. Cash Flow Disruption Would Undermine Patient Care and Risk Access for Vulnerable Patients Under the current 340B structure, covered entities receive the statutory discount at the point of purchase, allowing hospitals to predictably manage cash flow and reinvest savings directly into patient services. A 340B rebate model will create a duplicate delay and disadvantage for hospitals. For entities subject to the GPO-prohibition, such as DSH hospitals, the current existing inventory replenishment model already contains delayed access to 340B pricing because the qualifying medication is purchased at a non-discounted (WAC) price initially, eligible 340B utilization accounted for in accumulations and then the subsequent purchase is made at the 340B discount. A rebate model would create an additional (second) non-discounted purchase at WAC and further delayed access to the discount due to partial medication package utilization in hospitals creating a duplicate delay and disadvantage for hospitals. Using our utilization projections and differences between the undiscounted (WAC) prices and the 340B prices, the hospital would have approximately $23,000,000 in funds held by manufacturers in 2026 under the rebate model. That is an insurmountable impact to cashflow. County hospitals operate on thin margins and do not have the reserves to carry this financial burden waiting for manufacturers to pay rebates (which they would control the ability to deny). The 340B statute was designed to enable covered entities to stretch scarce Federal resources to better serve vulnerable and underserved populations. Any model that delays or jeopardizes access to 340B savings undermines this core purpose. Rebate models risk reducing access to medications and essential services for vulnerable populations by destabilizing the financial foundation of the safety net. At Columbus Regional Hospital, 340B savings directly and indirectly support patient access initiatives, care coordination, and healthcare affordability for our patients. Our 340B savings are used to serve patients in our low-income primary care clinic, oncology services, substance abuse disorder services, medication management clinic, and to provide uncompensated care across all our services. Savings offset uncompensated care, including unpaid costs of care for Medicaid and other government programs. CRH continues to offer services in maternity and mental health care, which are services being closed in nearby local hospitals due to insufficient funds in the current environment. A 340B rebate model that introduces uncertainty or delays into the funding stream would have real world consequences for Indiana patients. Increased Administrative and Compliance Burden A rebate-based system would be significantly more complex than the current discount mechanism, requiring new IT systems, expanded data reporting, and ongoing reconciliation of manufacturer rebate determinations. Moving data from administration documentation to medical claims is currently not supported by the technical infrastructure and would require significant infrastructure build by each entity, TPA, wholesaler, medical record system, and more. All of these will place more burden on hospitals to cover all of those cost increases, further devaluing the 340B program and reducing the downstream impact to providing uncompensated care. The primary responsibility to protect private health information lies with the entity and hastily established systems place hospitals at an unreasonable risk for liability if there is a breach. Manufacturers have no risk and it is an unbalanced and unreasonable shift of risk for the technical aspects of information required by the 340B pilot model. Rebate models introduce uncertainty around rebate eligibility, timing, and dispute resolution, while offering covered entities limited recourse when rebates are delayed or denied. These additional burdens would disproportionately affect smaller and county-based hospitals like Columbus Regional Hospital that do not have large compliance or finance departments. We estimate it could cost us an additional $500,000 in new full-time hires and subscriptions to vendors to manage the new work streams created by a rebate program. These are conservative estimates based on current data available. Request to HRSA For these reasons, we respectfully urge HRSA to preserve the upfront discount model as the default mechanism for the 340B Program and to refrain from implementing any rebate model that shifts financial risk to safety-net providers. If HRSA pursues a rebate model, please consider excluding county hospitals from this requirement. We appreciate the opportunity to comment and urge HRSA to carefully weigh the operational, financial, and patient access impacts on county hospital providers like Columbus Regional Hospital before considering any fundamental change to a program that has supported vulnerable patients for more than 30 years. Sincerely, Raymond Lee Kiser, MD, MBA Executive Vice President & Chief Medical Officer Columbus Regional Hospital 2400 East 17th Street, Columbus, IN 47201 Raymond Lee Kiser, MD
HRSA-2026-0001-1423Family Health Centers at NYU Langone2026-04-13T04:00Z14,938 chars
See attached file(s) 1 April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Family Health Centers at NYU Langone and the 117,407 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The Family Health Centers at NYU Langone is one of more than 80 community health centers across the State. CHCs are nonprofit, community-run clinics, providing high- quality, affordable primary and preventive care, along with behavioral health, dental care, substance use treatment, and social support services to all, regardless of insurance status or ability to pay. Caring for 2.5 million patients, the majority of CHC patients are extremely low-income70% live at or below the Federal poverty line, 60% rely on Medicaid, and 13% are uninsured. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. Summary of Recommendations: In short, the Family Health Centers at NYU Langone strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 2 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low- income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For the Family Health Centers at NYU Langone, a 340B Rebate Model Pilot Program will impact our ability to provide: Finance the sliding fee scales Subsidize low cost or free medications for low-income patients Subsidize high deductibles for the underinsured Offer enhanced care coordination for those who are chronically ill We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to 3 medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire additional staff. We expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 4 External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. The Family Health Centers at NYU Langone helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as: Offer STI prevention services (i.e. PrEP and PEP) Create and implement nutrition and diabetes education programs Conduct outreach to local community members 5 Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non- adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and 6 administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. 7 Conclusion The Family Health Centers at NYU Langone strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Larry McReynolds at LarryK.Mcreynolds@nyulangone.org. Sincerely, Larry McReynolds Executive Director
HRSA-2026-0001-1424Kansas Hospital Association2026-04-13T04:00Z8,771 chars
Please find in the attached file comments from the Kansas Hospital Association regarding HRSA's RFI on a 340B Rebate Model Pilot Program. April 3, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of the Kansas Hospital Association (KHA) and our ninety KHA member 340B participating hospitals, we appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. Any rebate mechanism will impose enormous costs and burdens on hospitals, especially critical access hospitals, that far outweigh any benefits that might come from it. The administrative burden to implement a rebate model will consume a significant portion of 340B savings, further reducing 340B supported patient care access. HRSAs expressed desire to test a rebate model appears to be based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. We believe that HRSA must give primacy to the needs of patients and covered entities that serve them so that the covered entities can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Kansas 340B hospitals have relied on for decades, is the best way to fulfill the purpose of the 340B program. The RFI poses many questions and encourages commenters to include supporting facts, research, and evidence in their responses. KHA has heard from our 340B member hospitals that they will have to hire or reallocate staff to administer a rebate model. The funds to cover the increased administrative costs of a rebate model will significantly reduce 340B funding available to serve patients. We have assumed that any future Rebate Program will include the ten drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our members cost estimates have increased significantly over the estimates calculated for the 2026 drugs alone. As the rebate model grows, there will be less 340B savings for hospitals to dedicate to patient care and comprehensive health care services. Any rebate program would require Kansas 340B hospitals to spend significant sums to cover new administrative burdens. Hospitals current 340B administration program hiring, operations, and processes support an upfront discount model. A shift to a rebate model demands new resources, imposing considerable additional costs and burdens on hospitals that go far beyond what is budgeted and planned for as a 340B hospital. Key cost drivers to hospitals include paying list price for medications with no guarantee that the 340B price will be honored by manufacturers; increased staffing costs, reallocating current staff, additional IT expenditures and support, third-party vendors, compliance activities, and denials and delays on rebate payment by pharmaceutical manufacturers. Most of our critical access hospitals operate on a negative margin and are in financially challenging positions. Conversion to a rebate model which forces struggling hospitals to pay list price for medications will mean that many hospitals will not be able to make these payments and will further reduce 340B covered services to their patients. Some hospitals have expressed concern that they may not be able to increase their line of credit with their wholesaler/distributer in order to purchase 340B medications at list price. There would also be significant systems and infrastructure impacts caused by a 340B rebate program. Kansas 340B hospitals current technological systems and operational infrastructure to support 340B is based on an upfront discount model. Any shift to a rebate mechanism forces hospitals to incur significant costs to change those systems. Such changes include new or modified IT systems, software, and data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. With respect to deduplication, HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on 340B hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Importantly, unlike the existing upfront discount mechanism, any rebate mechanism will force our member 340B hospitals to effectively provide drug companies interest-free loans as they await the discounts that they are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount to our hospitals is financially untenable and will result in reduced services for their patients. In Kansas, hospital operating margins in 2024 averaged -7 percent. While the national average for hospital days cash on hand is 218 days, in Kansas, that number is 62 days. Sixty rural Kansas hospitals are at risk of closing. They cannot afford to give drug companies interest-free loans. A rebate model could result in more rural hospital closures. These additional cost burdens of a rebate model significantly increase costs for hospitals, reduce services to patients, and will put rural hospitals further at risk of closure. The 340B Program is intended to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Converting the historical upfront discounts to a rebate model uses those resources to float pharmaceutical manufacturers that continue to make significant profits and will reduce health care services for patients. This model will reduce access to care for patients, especially in rural areas, while further enriching pharmaceutical manufacturers. For all of these reasons, the Kansas Hospital Association respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, we implore HRSA to allow participating 340B hospitals and other covered entities to comment on the specifics of its new program. While we have endeavored to addresses the issues and have encouraged our member 340B hospitals to provide the most detailed information possible, our comments are without having precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this critical issue, which has profound implications for the millions of patients who rely on the 340B Program for access to critical health care. Please contact us if you have questions. Sincerely, Karen Braman, RPh, MS Senior Vice President, Clinical and Strategic Initiatives kbraman@kha-net.org Jaron Caffrey, MHSA Director, Workforce and Healthcare Policy jcaffrey@kha-net.org
HRSA-2026-0001-1425Mountain Family Health Centers2026-04-13T04:00Z39,857 chars
See attached file(s) Mountain Family H E AL TH C E N TE R S April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountain Family Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for collecting feedback on the proposed 340b Rebate Model Pilot Program. The 340B program serves as a critically important resource for our patients who rely affordable access to life saving medication and Mountain Familys ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Mountain Family Health Center spent $515,000 on 340b medications in 2025. If the proposed rebate model requiring the upfront expense of the full retail drug costs were in place during the same time frame, this expense would have been $4,379,750, an 850 percent increase. The outlay of this cash would represent 17 percent of our entire organizational budget. Mountain Family Health Centers served almost 17,000 unique patients in 2025, 45 percent of which were uninsured. We provide high-quality integrated medical, behavioral health, and dental care regardless of insurance coverage or ability to pay. Without immediate access to discounted medications, many of our patients would forgo these life-saving treatments and Mountain Familys ability to ensure access to uninsured patients would be greatly diminished. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Mountain Family Health Mountain Family H E AL TH C E N TE R S Centers in particular, this means it will impact: In 2025, 800 unique patients received 340b prescriptions (both in-house and contract pharmacies). We anticipate a 10 percent increase in administrative costs if the proposed rebate model were to go into effect. Mountain Family Health Center utilizes our 340b revenue to subsidize the care for the more than 7,500 uninsured patients who consider Mountain Family their medical home. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life- sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. Mountain Family H E AL TH C E N TE R S drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we- collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Mountain Family H E AL TH C E N TE R S unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Mountain Family Health Centers provided $4,236,016 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Mountain Family Health Centers anticipates allocating 500 additional staff hours to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Mountain Family Health Centers anticipates needing to allocated an additional 500 hours of additional staff, likely requiring additional staff to meet the program requirements of the proposed rebate model. This will cost Mountain Family almost $20,000 in additional expense. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Mountain Family is concerned at the additional staff and consultant expenses that will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mountain Family Health Centers urges HRSA to require 7 Internal NACHC assessment (99 responses). Mountain Family H E AL TH C E N TE R S uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with five pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate- tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 43 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Garfield, Pitkin, and Eagle Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 Internal NACHC survey data Mountain Family H E AL TH C E N TE R S Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Mountain Family H E AL TH C E N TE R S pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Mountain Family H E AL TH C E N TE R S Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost over $4.3 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $515,000 to purchase these same drugs at the 340B ceiling price. This represents an 850 percent increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Mountain Family Health Centers these proposed changes will impact our ability to provide subsidized care to over 7,500 uninsured patients who consider Mountain Family their medical home. As revenue from 340b becomes less stable, this will also negatively impact our ability to remain fully staffed at our eight clinic locations, threatening timely access for our 17,000 unique patients. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mountain Family Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with Mountain Family H E AL TH C E N TE R S extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt- pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model and given limited credit options in our service area our organization would be forced to limit program investment to account for the resources tied up in the rebate reconciliation process. In our region, where patients have no choice but to rely on Mountain Family Health Centers, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Mountain Family Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5 percent denial rate would result in a net annual loss of $218,988. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot- program Mountain Family H E AL TH C E N TE R S functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Mountain Family H E AL TH C E N TE R S Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Mountain Family Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mountain Family Health Centers believes that a 340B rebate pilot Mountain Family H E AL TH C E N TE R S would cause disproportionate harm to patients served by CHCs and other safety net providers. Mountain Family Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me directly, dmoyer@mountainfamily.org Sincerely, Dustin Moyer CEO Mountain Family Health Centers
HRSA-2026-0001-1426Alliance of Safety-Net Hospitals2026-04-13T04:00Z9,154 chars
See attached comment. info@safetynetalliance.org (703) 444-0989 safetynetalliance.org 4075 Wilson Blvd, Ste 840, Arlington VA 22203 April 13, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: I am writing on behalf of the Alliance of Safety-Net Hospitals (ASH), a network of hospitals dedicated to helping American families stay healthy, working, and independent. ASH would like to offer feedback in response to the Request for Information the Health Resources and Services Administration (HRSA) published in the Federal Register on February 17, 2026 presenting a potential 340B Rebate Model Pilot Program. ASH member community safety-net hospitals and others like them serve a high proportion of Medicaid and uninsured patients and often operate 340B drug purchasing programs to help them stretch scarce federal resources to provide care to their patients. Community safety-net hospitals are the health care backbone of these hard-working communities and have built a foundation of services and community outreach activities based on the specific needs of their communities. Many of these services and activities are funded in part from the savings they derive from the 340B discount program and safety-net hospitals have come to rely on these savings when planning to meet new community needs. If HRSA changes the 340B program to a rebate model, these community safety-net hospitals will quickly face financial pressure to reduce or even eliminate some of these services and to stop innovating in response to new and emerging challenges. For the reasons outlined below, ASH asks HRSA to withdraw its plan to shift the 340B program to a rebate model and to investigate other, better, less damaging ways to prevent the duplicate discounts that are HRSAs reason for proposing such a change. The Importance of 340B to Community Safety-Net Hospitals It is impossible to overstate the importance of the 340B program to community safety-net hospitalsand more significantto the patients those hospitals serve. The 340B program enables community safety-net hospitals to reinvest the savings they gain through the program into their communities: in new services those communities need, such as outreach programs, even including some services that safety-net hospitals know will lose money but they introduce them anyway because they know their communities need them; 24/7 pharmacies; new community clinics; subsidizing the medical practices of physicians who otherwise would not choose to establish their practices in these communities; and other efforts that, without the savings 340B makes possible, these hospitals simply would not be able to afford. Large swaths of the communities these hospitals serve are healthier today than they would have been without the savings the 340B program generatessavings these hospitals consistently, effectively, and resourcefully reinvest in their communities. Safety-Net Hospitals Cannot Pay Up Front for 340B-Covered Prescription Drugs Congress created the 340B program to provide direct support to safety-net hospitals that need to stretch every penny they have to care for their Medicaid and uninsured patients. Most of these hospitals operate on extremely thin margins and for them, changing to a rebate model would fundamentally alter the 340B programfor the worse. It would change the 340B program from the direct support that Congress intended when it enacted the program in 1992 into an indirect, delayed support that Congress never contemplated, hurting the hospitals that care for low-income patients in their communities. ASH does not believe Congress had this in mind when it created the 340B program and finds it difficult to believe that HRSA would turn its back on such a successful program to prioritize the needs of drug manufacturers over the needs of low-income prescription drug consumers. Changing to a rebate model would do thisit would place enormous pressure on community safety-net hospitals and others to find the money they would need to pay for these prescription drugs up front. To afford those up-front costs, community safety-net hospitals and other 340B providers like them would have to divert money from services designed specifically for their hard-working communitiesservices that fulfill the very purpose of the 340B program. Community Safety-Net Hospitals Would Be Disadvantaged by a Rebate Model A rebate structure in the 340B program could place low-margin safety-net hospitals and other 340B participants at a significant disadvantage in comparison to the large drug manufacturers that are expected to pay rebates in a timely manner. In the RFI, HRSA asked for feedback on how a rebate payment timeline such as 10 calendar days would affect covered entities cash flow. As described above, most community safety-net hospitals and other 340B providers would struggle greatly to fund upfront drug acquisition costspurchases that would effectively amount to short-term loans to pharmaceutical companies. At best, this model gives manufacturers interest-free loans and at worst it enables manufacturers to seek investment returns on the payments they receive from covered entities prior to issuing the rebates that are due. ASH urges HRSA to consider this imbalance of purchasing power in any future rebate model structure by imposing interest penalties on manufacturers that fail to pay within the required time. If providers meet all documentation requirements for rebates and manufacturers do not deliver payment within 10 days, they should be charged a 10 percent interest fee to compensate for the financial strain they have placed on the low-margin providers that participate in the 340B program. Program Integrity Protections ASH and other national provider voices, alongside the Centers for Medicare & Medicaid Services (CMS), have worked over the last several years to eliminate unnecessary paperwork and bureaucratic delays in obtaining health care and ensuring prompt payment to providers. If HRSA moves forward with the transition to a rebate model for 340B drug purchases, the agency must prioritize clear administrative standards and keep paperwork burdens low to help balance the needs of the 340B entities and the interests of manufacturers while protecting seamless access to covered outpatient drugs. We expect covered entities would be required to submit distinct data elements that manufacturers need to process rebate requests, so manufacturers must be required to respond in a timely manner either with payment or requests for missing information. We recommend that HRSA set strict limits on the types of additional documentation requests and reasons for payment denial that manufacturers can use in administering any future rebate model. Without such protections, 340B providers will be forced to dedicate their scarce staffing resources to running down paperwork instead of reconciling their financial outlays and focusing on patient care. Similar to the penalty if a manufacturer fails to pay covered entities within 10 calendar days, ASH recommends that HRSA charge manufacturers interest penalties for any rebate requests that go unanswered within five calendar days and any additional documentation requests or denials that are not sufficiently specific for the entities to respond. ASH urges HRSA to keep in mind the imbalance of power involved when large for-profit drug manufacturers are processing financial requests from small, rural, and safety net 340B covered entities. Patient Perspective From ASHs perspective, the potential benefits of transitioning to a rebate model are dwarfed by the potential damage the proposed change could wreak on the health care safety net because covered entities would need to redirect resources away from providing care to go chasing after their rebates. We are particularly concerned about the future viability of 24/7 pharmacies and the community benefit programs that are often funded by the savings generated by the current 340B program. The cost savings 340B hospitals experience allows them to care for more working families, including those eligible for Medicaid. Safety-net providers should never be forced to attempt to weigh the high cost of establishing and staffing outpatient clinics in low-income areas against the future cost of adding to their administrative staff to ensure their ability to collect the rebates due to them. For these reasons, ASH urges CMS to abandon the plan to turn the 340B upfront drug discount program into an after-the-fact rebate model. * * * The Alliance of Safety-Net Hospitals appreciates the opportunity to submit feedback in response to the RFI and welcomes any questions HRSA may have about the views we have expressed in this letter. Sincerely, Ellen Kugler, Esq. Executive Director
HRSA-2026-0001-1427Health Center Association of Nebraska2026-04-13T04:00Z22,013 chars
See attached file(s) HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the seven Nebraska Community Health Centers (CHCs) and the over 123,000 patients they serve, Health Center Association of Nebraska (HCAN) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, HCAN strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, HCAN explains: A. The importance of 340B savings to Nebraska CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their low-income and uninsured patients. B. How a rebate model will create massive cash flow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely, resulting in avoidable harm to patients health. 1 HRSA requested input on these in the irst paragraph of the RFI summary. HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 D. Why HRSA should never impose a mandatory rebate model on CEs and why, if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4 CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they serve. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Nebraska, CHCs routinely rely on 340B savings to support services such as: dental care, nutrition support services, in-home case management services, and behavioral health services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cash flow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 and almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Nebraska CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains), and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall, many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHC patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that Nebraska CHCs have already had to make difficult financial decisions, including laying off staff, consolidating service locations, thereby reducing access to services, and foregoing opening new service locations across the state. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot - fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at arb@hcanebraska.org or (402) 932-3132/ Sincerely, Amy R. Behnke CEO Health Center Association of Nebraska HEALTH CENTER ASSOCIATION OF NEBRASKA (HCAN) 3929 S 147TH ST., STE 100A OMAHA, NE 68144 402-933-3389 Attachment Costs incurred by CHCs as a direct result of the rebate pilot, which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1428North Olympic Healthcare Network2026-04-13T04:00Z43,730 chars
Please see the file attached as a public comment in opposition to the 340b rebate model being proposed. April 13, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of North Olympic Healthcare Network (NOHN), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: North Olympic Healthcare Network anticipates a loss of $300,000 - $400,000 from entity-owned pharmacy operations and $150,000 - 250,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. North Olympic Healthcare Network (NOHN) is the Federally Qualified Community Health Center serving nearly 20,000 people in the rural and remote region of Washington States Olympic Peninsula. We provide integrated, full-spectrum Primary Care, Behavioral Health, Dental care, Vision services, Pharmacy, Care Coordination, Mobile Health, Outreach and Enabling services to everyone in our rural community regardless of their ability to pay. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 2 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For North Olympic Healthcare Network in particular, this means it will impact the care for almost 20,000 Health Center patients who benefit from unreimbursed services paid for by 340b savings such as: Discount prescription drug prices for patients Providing sliding fee discounts to eligible patients Provide outreach, navigation, and transportation services Provides care coordination and case management services to patients Subsidize dental access for uninsured Medicare patients Expand access to behavioral health and SUD services Cover the unreimbursed or uncovered costs of care for commercial and Medicare patients Subsidize health service and community health improvement services We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: North Olympic Healthcare Network provided $778,225 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: North Olympic Healthcare Network anticipates needing 1.5 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, North Olympic Healthcare Network anticipates an increase of $20,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 NOHN estimates a need for at least 1.5 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. NOHN would incur $83,555 in unreimbursed workforce expenses to hire the necessary staff to administer this requirement that would further limit our ability to serve and care for our patients. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NOHN urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves almost 20,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at almost $104,000 in the first year. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools and anticipate those costs to be at least $20,000 for NOHN. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 26 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 26 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Clallam County, Washington with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSA FAQ 8 drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. NOHN has discounted prescription drug prices for patients and provided sliding fee pharmacy discounts to qualifying health center patients by passing 340b savings directly to the patient. These programs have provided access to medications previously unattainable to many patients historically due to cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,264,620 to purchase drugs under the proposed rebate model. Currently, our organization spends $212,692 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, North Olympic Healthcare Network anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as drug discounts, outreach and navigation, transportation services, care coordination and case management for our patients. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund full-time Community Health Worker or a Patient Care Coordinator, directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 250 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. North Olympic Healthcare Network asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either take out a line of credit or utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on North Olympic Healthcare Network, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays North Olympic Healthcare Network urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial 11 liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $250,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 13 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion North Olympic Healthcare Network strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law North Olympic Healthcare Network believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. North Olympic Healthcare Network appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Beau J. Brown at bbrown@nohn-pa.org. Sincerely, Beau J. Brown North Olympic Healthcare Network
HRSA-2026-0001-1429Catholic Health System2026-04-13T04:00Z11,153 chars
Please see the attached comment letter in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program for Sisters of Charity Hospital. April 13, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Sisters of Charity Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. If we have to buy these 25 drugs at the higher prices and wait for rebates, for a minimum of 10 days, our cash on hand will be significantly decreased. This would materially reduce our cash on hand, undermine financial stability, constrain strategic decision-making, and limit our ability to invest in growth or respond to financial shocks. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Implementing a rebate model would require, at minimum: Coordinating with multiple third-party administrators to collect and submit claims data Manually reviewing and correcting claims for eligibility Responding to vague or inaccurate manufacturer platform messages Continually verifying pricing restoration across hundreds of NDCs and contract pharmacy accounts Managing 45-day lookback periods for purchases and claims Following up on unexplained pricing drops and pursuing refunds through credit/rebill processes Tracking rebates, auditing payments, resolving denials, and potentially pursuing relief through HRSAs Administrative Dispute Resolution process We anticipate needing to hire at least one full-time employee at an estimated annual cost of $80,000, in addition to engaging an external vendor at approximately $60,000 per year. Existing staff would also need to be reallocated from compliance and auditing functions, weakening rather than strengtheningprogram integrity. We are particularly concerned about rebate delays for physician-administered drugs, which are not billed or available for claim submission in real time. These claims are often generated weeks after administration due to hospital billing processes. Delays or errors could result in denied rebates or missed submission windows set by manufacturers, further increasing financial risk. Contrary to HRSAs assumptions, we do not currently transmit many of the data points envisioned under a rebate model to our TPAs. Incorporating new fieldssuch as claim line number, claim line detail, and health plan identifierswould require significant time, system development, testing, and validation. Additional uncertainty remains regarding how Medicaid claims would be handled under a rebate framework. Ultimately, increased rebate costs, delays, and denials would directly reduce funds available for patient care. Resources would be diverted to administrative overhead, and uncertainty around rebate timing would make it difficult to plan and sustain long-term community benefit initiatives. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any challenges within the MDPNP process should be addressed by CMS through targeted improvementsnot by fundamentally restructuring 340B. Since January 1, 2026, our hospital has experienced significant 340B/MDPNP deduplication issues, including unflagged Medicare WAC claims and rebate deposit timelines averaging four weeks. A broader 340B rebate model would only exacerbate these existing problems. Thank you for considering our comments. Sincerely, Sisters of Charity Hospital
HRSA-2026-0001-1430Catholic Health System2026-04-13T04:00Z11,798 chars
Please see the attached comments in response to HRSA's Request for Information on the 340B Rebate Pilot Program for Mount St Mary's Hospital. ______________________________________________________________________ 5300 Military Road Niagara Falls, New York 14092 Ph: (716)297-4800 www.chsbuffalo.org April 13, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Mount St. Marys Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebates and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the ______________________________________________________________________ 5300 Military Road Niagara Falls, New York 14092 Ph: (716)297-4800 www.chsbuffalo.org significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. If we have to buy these 25 drugs at the higher prices and wait for rebates, for a minimum of 10 days, our cash on hand will be significantly decreased. This would materially reduce ______________________________________________________________________ 5300 Military Road Niagara Falls, New York 14092 Ph: (716)297-4800 www.chsbuffalo.org our cash on hand, undermine financial stability, constrain strategic decision-making, and limit our ability to invest in growth or respond to financial shocks. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Implementing a rebate model would require, at minimum: Coordinating with multiple third-party administrators to collect and submit claims data Manually reviewing and correcting claims for eligibility Responding to vague or inaccurate manufacturer platform messages Continually verifying pricing restoration across hundreds of NDCs and contract pharmacy accounts Managing 45-day lookback periods for purchases and claims Following up on unexplained pricing drops and pursuing refunds through credit/rebill processes Tracking rebates, auditing payments, resolving denials, and potentially pursuing relief through HRSAs Administrative Dispute Resolution process We anticipate needing to hire at least one full-time employee at an estimated annual cost of $80,000, in addition to engaging an external vendor at approximately $60,000 per year. Existing staff would also need to be reallocated from compliance and auditing functions, weakeningrather than strengtheningprogram integrity. We are particularly concerned about rebate delays for physician-administered drugs, which are not billed or available for claim submission in real time. These claims are often generated weeks after administration due to hospital billing processes. Delays or errors ______________________________________________________________________ 5300 Military Road Niagara Falls, New York 14092 Ph: (716)297-4800 www.chsbuffalo.org could result in denied rebates or missed submission windows set by manufacturers, further increasing financial risk. Contrary to HRSAs assumptions, we do not currently transmit many of the data points envisioned under a rebate model to our TPAs. Incorporating new fieldssuch as claim line number, claim line detail, and health plan identifierswould require significant time, system development, testing, and validation. Additional uncertainty remains regarding how Medicaid claims would be handled under a rebate framework. Ultimately, increased rebate costs, delays, and denials would directly reduce funds available for patient care. Resources would be diverted to administrative overhead, and uncertainty around rebate timing would make it difficult to plan and sustain long-term community benefit initiatives. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any challenges within the MDPNP process should be addressed by CMS through targeted improvementsnot by fundamentally restructuring 340B. Since January 1, 2026, our hospital has experienced significant 340B/MDPNP deduplication issues, including unflagged Medicare WAC claims and rebate deposit timelines averaging four weeks. A broader 340B rebate model would only exacerbate these existing problems. Thank you for considering our comments. Sincerely, Mount St. Marys Hospital
HRSA-2026-0001-1431Nuestra Clinica del Valle, Inc.2026-04-13T04:00Z11,129 chars
On behalf of Nuestra Clinica Del Valle, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Nuestra Clinica del Valle, Inc. (NCDV) a federally qualified heath center has served low income and uninsured families of Hidalgo and Starr Counties in the Rio Grande Valley of Texas for over fifty years. NCDVs service area covers 2,923 square miles along the United States/Mexico border. Hidalgo and Starr County residents face grave socio-demographic disparities in comparison to Texas and the U.S. The per capita income (PCI) and educational attainment levels for the area are among the lowest in the country. Likewise, the poverty and unemployment rates are high in comparison. Approximately one-third of residents in the area have no insurance coverage. This large group of individuals includes the working poor who are ineligible for publicly funded insurance coverage. The working poor are defined as individuals with income less than 200% of the federal poverty line (FPL). In FY2025, NCDV served 22,183 patients. Of these, 60% were uninsured and a total of $10,569,366 sliding fee discounts were provided. I. Utilization of 340B Savings Nuestra Clinica Del Valle, Inc. utilizes 340B savings in the following ways: - Sliding Fee Scale - Behavioral Health - Social Services - Nutrition Education - Outreach and enrollment The 340B savings are applied to support the Sliding Fee Scale, ensuring access to care for uninsured and underinsured patients. These funds are also reinvested to sustain and expand non-revenue-generating behavioral health services. Program savings are allocated to nutrition education initiatives that promote preventative care and long term wellness. Additionally, 340B resources support outreach and enrollment activities that connect patients to healthcare services and coverage options. Collectively, these non revenue generating services represent approximately 15% of the organizations total operating budget. Redirecting 340B savings to these areas allows the organization to maintain financial sustainability while expanding access, improving health equity, and fulfilling its mission to serve medically underserved communities. II. Current Operations Costs of 340B Program - 22,183 Patients Served - 23 Employees - $3,106,217 Annual Program Expenses III. Estimated Financial Impact of Rebate Model - Staffing Impact: NCDV anticipates needing 3 FTE as a result of Rebate Model, costing our organization an estimated $165,000 in additional costs. - Based on our organizations data, we estimate it would cost $1,000,000 per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $8,578.48 per month to purchase these same drugs at the 340B ceiling price. - Total Cost: For our CHC, which serves 22,183 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $12,265,000 annually - Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of approximately $600,000. IV. Health Center Impacts Implementation of the proposed 340B rebate model would create significant financial, administrative, and operational challenges. Cashflow will significantly decrease due to additional costs, timing, and risk associated with purchases and reimbursement. Claim denials due to administrative and manufacturers error will create unrecoverable financial losses and threaten the livelihood of the organization. Patients will experience disruptions in medication access leading to delayed treatment, poorer health outcomes, and increased reliance on emergency care. Conclusion Nuestra Clinica Del Valle, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Nuestra Clinica Del Valle, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Nuestra Clinica Del Valle, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. NUESTRA CLINICA DEL VALLE, INC. ADMINISTRATIVE OFFICES P.O. BOX 1689 PHARR, TEXAS 78577 956-787-8915 April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Nuestra Clinica Del Valle, Inc., I would like to thank the Health Resources and Services Administration (H RSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. Nuestra Clinica del Valle, Inc. (NCDV) a federally qualified heath center has served low income and uninsured families of Hidalgo and Starr Counties in the Rio Grande Valley of Texas for over fifty years. NCDV's service area covers 2,923 square miles along the United States/Mexico border. Hidalgo and Starr County residents face grave socio- demographic disparities in comparison to Texas and the U.S. The per capita income (PCI) and educational attainment levels for the area are among the lowest in the country. Likewise, the poverty and unemployment rates are high in comparison. Approximately one-third of residents in the area have no insurance coverage. This large group of individuals includes the "working poor" who are ineligible for publicly funded insurance coverage. The "working poor" are defined as individuals with income less than 200% of the federal poverty line (FPL). In FY2025, NCDV served 22,183 patients. Ofthese, 60% were uninsured and a total of $10,569,366 sliding fee discounts were provided. I. Utilization of 340B Savings Nuestra Clinica Del Valle, Inc. utilizes 340B savings in the following ways: Sliding Fee Scale Behavioral Health Social Services Nutrition Education Outreach and enrollment 1518 E. Santa Rosa Ave. Edcouch, TX 78538 956-262-1363 317 E. Dukakis Ave. Alton, TX 78573 956-519-1800 1500 First Street Mercedes, TX 78570 956-565-3191 300 N. 86th St. San Carlos. TX 78539 956-287-8850 105 South 10th Street Donna, TX 78537 956-464-5809 2900 Raul Longoria San Juan, TX 78589 956-781-6077 801 W. 1st Street San Juan, TX 78589 956-787-0787 806 W. 3rd St San Juan, Texas 78589 956-787-0787 611 N. Bryan Rd. Mission, TX 78572 956-580-3303 600 N. Garza, Suite A RGC. Tex. 78582 956-487-0846 2891 E. Grant St. Roma, Texas 78584 956-849-2100 The 340B savings are applied to support the Sliding Fee Scale, ensuring access to care for uninsured and underinsured patients. These funds are also reinvested to sustain and expand non-revenue-generating behavioral health services. Program savings are allocated to nutrition education initiatives that promote preventative care and long-term wellness. Additionally, 340B resources support outreach and enrollment activities that connect patients to healthcare services and coverage options. Collectively, these non-revenue-generating services represent approximately 15% of the organization's total operating budget. Redirecting 340B savings to these areas allows the organization to maintain financial sustainability while expanding access, improving health equity, and fulfilling its mission to serve medically underserved communities. II. Current Operations Costs of 340B Program 22,183 Patients Served 23 Employees $3,106,217 Annual Program Expenses III. Estimated Financial Impact of Rebate Model Staffing Impact: Nuestra Clinica Del Valle, Inc. anticipates needing 3 FTE as a result of Rebate Model, costing our organization an estimated $ 165,000 in additional costs. Based on our organization's data, we estimate it would cost $1,000,000 per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $8,578.48 per month to purchase these same drugs at the 340B ceiling price. Total Cost: For our CHC, which serves 22,183 patients, the total projected increase in expensesincluding labor, IT, and carrying costs-is estimated at $12,265,000 annual ly Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of approximately $600,000. IV. Health Center Impacts Implementation of the proposed 340B rebate model would create significant financial, administrative, and operational challenges. Cashflow will significantly decrease due to additional costs, timing, and risk associated with purchases and reimbursement. Claim denials due to administrative and manufacturers error will create unrecoverable financial losses and threaten the livelihood of the organization. Patients will experience disruptions in medication access leading to delayed treatment, poorer health outcomes, and increased reliance on emergency care. Conclusion Nuestra Clinica Del Valle, inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Nuestra Clinica Del Valle, lnc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Nuestra Clinica Del Valle, inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lucy Torres at ltorres@nuestraclinicadelvalle.org. Sincerely, 4 Luccares Chief Executive Officer Nuestra Clinica Del Valle, Inc.
HRSA-2026-0001-1432Primary Health Solutions2026-04-13T04:00Z36,617 chars
See attached file(s) Hearthi Solutionsry April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2025-14619) Dear Director Britton: Primary Health Solutions (PHS) is a non-profit Federally Qualified Health Center (FQHC) in Southwest Ohio, dedicated to providing affordable, integrated, and quality primary, dental, behavioral, and vision care to the community, regardless of income or insurance status. As you know, CHCs are the best, most innovative, and resilient part of our nation's health system. For sixty years, CHCs have provided high-quality, comprehensive, affordable primary and preventive care. In addition to medical services, CHCs provide integrated dental, behavioral health, pharmacy, vision, and other health services to America's most vulnerable, medically underserved communities in rural, urban, suburban, frontier, mountain, and island communities. Today, the health center workforce of 326,000 serves nearly 34 million people at over 17,000 locations, ensuring patients receive the care they need and pay what they can based on a sliding fee scale.' The collective mission and mandate of Primary Health Solutions and the 1,512 CHCs nationwide are to close the primary care gap and provide high-quality, cost-effective primary and preventive medical care to communities across this country. When we improve patients' health, we help people to go back to work, and we lower health care costs,2 and we support local economies.3 I. Primary Health Solutions Strongly Urges HRSA To Exempt Community Health Centers from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to the core mission of Community Health Centers and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal 2025 UDA Data, HRSA. (hrsa.gov) 2 https://www.nachc.org/wp-content/uploads/2025/01/PolicvPapers NationalValuelmpact FINAL Jan2025.pdf 3 Ibid. 1 resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on health centers. By requiring health centers to purchase medications at full price and wait for a rebate, this model would cause significant financial turmoil and directly impact CHCs ability to serve the 34 million patients who rely on us. The National Association for Community Health Centers (NACHC) data indicates that without discounted or free medications, a substantial portion of CHC patientsup to 3 million or morewould lose access to essential treatments.4 These patients often have chronic conditions like diabetes, heart disease, and behavioral health needs. They depend on the essential drugs included in the rebate pilot more than patients with any other conditions. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs health centers can afford to stock, directly contradicting the program's goal of increasing access to affordable medications. Since 90% of health center patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center.5 We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. A. Primary Health Solutions Harbors Significant Concerns That a Rebate Model Would Create Administrative Complexities and Financial Challenges for Health Centers. Under the proposed 340B Rebate Model Pilot, health centers would be required to purchase drugs at full retail price, also known as Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically impact health centers' ability to purchase drugs due to the uncertainty of waiting for a manufacturer to approve a rebate, thereby constraining a health center's cash flow. Health centers will have to wait to receive their rebate payment after providing medications to their patients. Primary Health Solutions appreciates HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Recent data suggests that the median cash-on-hand for CHCs is 100 days, and a quarter of CHCs have -4% operating margins. Primary Health Solutions anticipates additional financial challenges for health centers due to future changes in Medicaid eligibility and Marketplace insurance, which will likely increase uncompensated care costs. Health centers utilize the revenue generated from the 340B Program to provide affordable healthcare services and medications to uninsured and underinsured patients. If health centers are required to participate in the 340B Rebate Model Pilot Program, this will significantly impact their "scarce federal resources" and ability to fulfill the health center mission to serve all patients, regardless of their ability to pay. Health centers will have to make difficult decisions on how to utilize their limited financial resources, which could result in cutting essential health services, reducing operating hours, or discontinuing services that support patients' healthy outcomes. Additionally, a rebate model would create confusion with its interaction and impact on a health center's ability to offer sliding fee discounts at the point of purchase. By statute and regulation, 4 lAws: www.hcadvocacy.org wp-content mploads 2023 02 NACHC-340B-Rwort-Summarv-June-2022.pdf 5 Ibid. 2 CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.6 In alignment with their mission, CHCs often implement flat discounts or sliding fee discounts to make prescription drugs more affordable for low-income individuals. A health center can adjust the cost of health care services, including medications, based on a patient's income and family size. The proposed 340B Rebate Model Pilot would have a direct impact on health centers' ability to offer patients steeply discounted medications at the point of sale, resulting from purchasing the full WAC pricing upfront. Health centers' pharmacies, entity-owned and contract pharmacies, will not have access to the 340B price at the time the patient needs the medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. While rebates are expected to arrive within 10 days, there may be delays in receiving the full rebate, such as denials, which could create financial strain on health centers. Primary Health Solutions appreciates HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must guess the rebate amount and could potentially undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the health center takes a net loss on the transaction. The proposed 340B Rebate Model Pilot also presents challenges for compliance with 340B actual acquisition cost billing in fee-for-service Medicaid, which may lead to increased Medicaid costs. Both are because pharmacy software will not have access to the 340B price, which is necessary for accurate drug pricing. HRSA should exempt health centers from the 340B Rebate Model Pilot because health centers will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements. Similar to navigating manufacturers' existing contract pharmacy restrictions, health centers will need to hire or reassign existing staff to untangle the mentioned complexities related to varying data submission requirements, timelines, and systems. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, health centers will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and varying requirements from each manufacturer will likely force health centers to use multiple systems to manage and report the same data, thereby increasing both costs and operational burdens. Health centers will need to invest in IT infrastructure upgrades and reassign staff to manage this new complexity, including reconciling payments and initiating dispute processes for denied rebates. Primary Health Solutions urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 6 HRSA FAQ 3 The proposed 340B Rebate Model Pilot Program is not only a financial threat to health centers but also a duplicative and unnecessary administrative burden. In an attempt to address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force health centers to divert even more scarce resources away from patient care. Health centers have already absorbed significant administrative and technology costs over the past four years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Adding additional requirements under the proposed pilot would not only be a double burden but would fundamentally weaken the ability of health centers to provide affordable medications. This would have a direct impact on the most underserved CHC patients who rely on the up-front 340B discount to afford their treatments. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. For this reason, Primary Health Solutions urges HRSA to deny manufacturers' requests to participate in the 340B Rebate Model Pilot Program if they have existing contract pharmacy restrictions. B. Operating as National Models of Compliance, Health Centers are Subject to a Robust, Layered Oversight Structure That Ensures Both Transparency and Unwavering Program Integrity. Health centers already operate under a comprehensive regulatory framework, established through the Health Center Program and the 340B statute, to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, we utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. Health centers must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. Health centers pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, adhering to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and the use of external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, health centers participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, as well as detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating health centers' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for health centers, implementing a rebate model would cause disproportionate harm to health centers and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to 4 support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts for patients under 200% of the federal poverty guidelines. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file will give the WAC price, making the price unattainable for the patient. If health centers are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, Primary Health Solutions encourages HRSA to exempt all CHCs from this pilot program. II. Primary Health Solutions Urges HRSA to Exempt Health Centers from the 340B Rebate Model Pilot to Protect the Most Vulnerable Patients' Access to Life-Saving Medications. The drugs included in the proposed 2026 rebate model are primarily used to manage chronic conditions prevalent in primary care settings, meaning health center patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. Primary Health Solutions is deeply concerned that the implementation of a rebate model would cause health center patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) like Xarelto and Eliquis are vital for patients with deep- vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.7 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiancet, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failureall of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.8 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans depending on health centers for essential diabetes 7 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.11 1 rjth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 8 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 care,9 the affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on health centers providing access to discounted insulin to low-income patients. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) price instead of the discounted 340B price. This makes the price unattainable for the patient and precludes health centers from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on health centers would only weaken the safety-net providers that 34 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services are also the ones who depend on health centers to provide access to affordable medications. Without the up-front 340B discount, this would become operationally impossible for the drugs included in the pilot. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Concerns Regarding the Pilot Program's Design and Scope A. Primary Health Solutions requests additional guidance from HRSA and CMS on the intersection of the IRA and 340B Rebate Model Pilot Program. While Primary Health Solutions acknowledges the pilot's intent to establish a fair and transparent process, we are deeply concerned that its proposed approach for addressing Inflation Reduction Act (IRA) requirements will create significant administrative, financial, and operational burdens for health centers. The IRA is a statutory requirement, and its provisions are not suggestions. HRSA must provide clear guidance on how its pilot will work with these existing mandates. However, the pilot's guidance on Medicare duplicate discounts fails to align with and, in fact, appears to contradict the clear statutory language of Section 1193(d) of the IRA. The IRA provides two distinct nonduplication scenarios, explicitly directing manufacturers to provide the lower of the two prices: 1. When the 340B ceiling price is lower than the MFP, manufacturers are required to provide the 340B price. 2. When the MFP is lower than the 340B ceiling price, manufacturers are required to provide the MFP. The pilot's guidance, however, lacks the specificity to ensure these statutory protections are upheld. This ambiguity could be interpreted to allow manufacturers to improperly deny 340B rebates whenever an MFP applies, even in cases where the MFP is higher than the 340B ceiling price. This lack of guardrails risks both improper denial of valid rebates and the inconsistent application of statutory protections, which would directly harm health centers and their patients. Primary Health Solutions strongly urges OPA to revise the pilot guidance to explicitly map each allowable denial of claims to the corresponding statutory provision in the IRA. The guidance must also define the specific calculation methodology for non-duplicated amounts and require claim-level 9 2025 UDA Data, HRSA (hrsa.gov) 6 documentation for all denials based on MFP duplication. This is essential to ensure that the pilot does not inadvertently create barriers to care by enabling manufacturers to violate federal law. Additionally, the proposed 340B claims repository, as outlined in the CY2026 Medicare Physician Fee Schedule, would require covered entities to submit detailed, claim-level data on 340B drugs dispensed under Medicare Part D. While this is intended to help CMS exclude 340B-purchased units from inflation rebate calculations under the IRA, it would create new and ongoing reporting requirements for health centers. This will require further investments in staff administrative responsibilities, IT infrastructure, and vendor management, which will ultimately divert resources away from direct patient care. If finalized in tandem with OPA's proposed rebate model, these changes would create an unsustainable level of strain on health centers. The rebate model would force health centers to wait extended time periods for vital 340B revenue. At the same time, the new IRA-related reporting requirements would add to an already strained administrative workload. These two sets of proposals, though seemingly separate, would compound the administrative and financial burdens on health centers, hindering their ability to provide crucial care. To ensure a functional and compliant system, HRSA must provide a clear and comprehensive plan that addresses how its pilot program will work in harmony with the statutory requirements of the Inflation Reduction Act. B. BIN/PCN Data Is Not Essential for the Deduplication of 340B and MFP Discounts. Primary Health Solutions respectfully urges OPA not to include Bank Identification Number (BIN) and Processor Control Number (PCN) as permitted data elements for the pilot's pharmacy claim submissions. Requiring this data would create an unnecessary administrative burden for health centers without providing any enhanced program integrity. This request is based on the following critical points: Inconsistency with CMS and Prevailing Manufacturer Requirements: CMS has not included BIN/PCN in the required data elements for 340B deduplication of Medicare Part D inflationary penalties. In fact, a majority of manufacturers (38 of 39) with existing 340B contract pharmacy restrictions also do not require BIN/PCN. Aligning the 340B rebate pilot's data specifications with these prevailing standards will promote consistency across the industry and avoid imposing non-essential, unique reporting requirements on health centers. Operational Impossibility for a Key Patient Population: BINIPCN are limited to retail prescription claims with insurance coverage. They are frequently unavailable for prescriptions filled for uninsured individuals who pay with cash or use a health center's sliding fee scale program. Requiring this data would effectively exclude a core portion of the patient population that health centers serve, creating an operational barrier for a model intended to be transparent and comprehensive. BIN/PCN fields are also not used for clinic-administered or physician- dispensed medications, further limiting their applicability. 7 Data Inaccuracy and Administrative Inefficiency: Plan sponsors, not covered entities, are the reliable source for BIN/PCN data. Manufacturers receive these values directly from plan sponsors. Forcing health centers to provide this data introduces an unnecessary potential for inaccuracy and administrative inefficiency. This information is also subject to change post- adjudication, making covered entities an inherently less accurate source. Deduplication can be effectively achieved using other claim-level identifiers listed in the HRSA notice, without imposing this additional burden on covered entities. Primary Health Solutions strongly encourages OPA to remove BIN/PCN from the allowable pharmacy claim data fields that can be requested. This approach would better align the pilot with anticipated CMS standards and prevailing manufacturer requirements, ensuring the pilot's success without creating an unneeded burden on health centers. C. Limiting the Scope of Manufacturer Data Requests While not explicitly defined in the pilot program, the opportunity for manufacturers to request purchasing data presents a significant and unnecessary administrative burden on health centers. The precedent has already been set, as Johnson & Johnson's proposed rebate model included a provision to request purchasing data directly from covered entities. Johnson & Johnson proposed in their initial rebate model,1 published August 23, 2024, that they would be requesting purchasing data from covered entities: DSII Covered Entities will submit standard information about the purchase and dispense or administration of STELARA and XARELTO that Covered Entities collect, report, and maintain in the normal course of business." It is reasonable to anticipate that similar requests will be made again in future rebate models. To avoid placing this unnecessary burden on health centers, Primary Health Solutions respectfully suggests that purchasing data be made available to manufacturers from other reliable sources. The 340B Prime Vendor Program, Apexus, has access to the vast majority of 340B purchasing data. The remaining data would primarily result from direct purchases from the manufacturers, who would already have access to this information. Given the major disruption the 340B rebate program is anticipated to have on health centers, a system that forces health centers to provide data that is already accurately and readily available from other sources is not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. D. Limit the 340B Rebate Mode1 Pilot to Retail Pharmacy Claims Only Primary Health Solutions strongly urges OPA to reconsider applying the pilot program to all areas of 340B. While OPA recognizes that a rebate model could fundamentally shift how the 340B Program has operated for over 30 years, its decision to apply the pilot to all outpatient 10 httppTheaconchannelmanagement.com/pageskesources (Johnson & Johnson Policy Documents) 8 settings, including physician- and clinic-administered drugs, is a significant overreach for an untested pilot program. This broad approach is fundamentally at odds with the current statutory landscape. Until 2028, the Medicare Drug Price Negotiation Program (MDPNP) Maximum Fair Prices (MFP) only apply to the retail claim setting." This means there is no risk of duplicate discounts with MFPs outside of the retail setting for at least the next two years. Extending the pilot program to non-retail claims - where no duplicate discount risk currently exists would create a major disruption to health centers and their patients for no clear benefit. Given the major disruption the rebate model will bring and the lack of risk of 340B and MFP claim duplication outside of the retail setting until 2028, we encourage OPA to limit the pilot program to claims and purchases made in the retail space for at least the initial year. This measured approach would allow covered entities time to adapt to the new model in a single setting, while still addressing the primary driver of the pilot program: preventing duplicate discounts. This limitation is essential to prevent significant harm to health centers, which serve as the nation's safety-net providers, while HRSA evaluates this untested model. E. Preserving Flexibility in a New Rebate Model: Unit or Package-level Rebates Historically, the 340B Program has been intentionally flexible to accommodate the significant variance in covered entity types and organizational structures. With manufacturers now able to define rebate models within the 340B Rebate Model Pilot Program, we anticipate that covered entities will lose much of this flexibility, including the ability to choose the purchasing model that best fits their needs. This shift represents a significant departure from the program's history and poses a threat to the health centers' ability to participate successfully. In preparing these comments, we considered the benefits and drawbacks of unit- and package- level rebate models and concluded that there is no "one-size-fits-all" solution. Each approach introduces its own set of administrative and financial challenges for health centers. Unit-Level Accumulation and Rebating: This approach has the benefit of mirroring the vetted process used by state Medicaid agencies, which could allow for more timely payments and prevent delays in receiving a rebate when a full package size is not met. However, it introduces significant challenges for the more than 90% of health center- owned pharmacies that operate with physical inventories. In this scenario, expired or wasted inventory that is not tied to a patient's dispensation would result in a lost rebate, increasing costs for health centers. It is unclear if a process similar to the JW (Waste) billing modifiers used in Medicare Part B would be allowed under this pilot to mitigate this financial risk. Package-Level Accumulation and Rebating: This model would be beneficial if it tied rebates to purchases rather than individual patient dispensations, which aligns more closely with physical inventory models. However, we anticipate challenges if dispensation data does not match purchasing data, as has been experienced with 340B ESP and current " https://www.hrsa.gov/opa/340b-rnodel-pilot-program 9 contract pharmacy restrictions. This could lead to manufacturer platform algorithms rejecting valid claims, particularly for slow-moving medications, which are a common part of normal pharmacy operations. It also risks significant delays in payment as health centers wait for a full package size to be dispensed, or worse, not being paid at all if the package size is not met within a manufacturer-defined timeframe. As some have noted, under this model, health centers could be waiting 10 years to receive a rebate. Ultimately, Primary Health Solutions cannot recommend one scenario over the other, as both present significant financial and operational burdens. We, therefore, request that OPA consider the need for flexibility in the application of these rebate models. Any approved model must include safeguards to minimize waste and the financial impact on health centers. We specifically request that OPA be cautious in approving models with limited timeframes for entities to accumulate toward a full package size, as this will result in additional costs to health centers through lost rebate opportunities. IV. Primary Health Solutions Strongly Urges HRSA to Create More Safeguards for Covered Entities and Their Patients Primary Health Solutions has serious concerns that the proposed pilot program lacks adequate enforcement mechanisms to hold drug manufacturers accountable. Health centers and their patients cannot afford to operate on an "honor system" when patient access to affordable medications has been significantly curtailed through ongoing contract pharmacy restrictions. The recent D.C. District Court ruling reinforces that HRSA has the statutory authority to "superintend" and "control" the 340B Program, and that a formal dispute resolution process is a key part of that authority. The proposed pilot program, in its current form, presents several key deficiencies regarding enforcement and accountability: Lack of Explicit Enforcement and Penalties: The guidance provides no explicit progressive enforcement or penalties for manufacturers if they fail to provide a rebate within the 10-day timeframe. The 340B statute, however, explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. Without clear consequences, this pilot risks becoming a mechanism for manufacturers to unilaterally withhold discounts and engage in "unbridled self-enforcement." Insufficient Communication and Dispute Resolution: The pilot lacks an official and effective communication channel for covered entities. The 340B statute and historical guidance require a formal dispute resolution process, with HRSA playing a central, decision-making role. Relying on a simple email inbox is a direct contradiction of this established "unitary administrative and enforcement scheme." Unreasonable Compliance Timeline: Providing health centers with only 60 days to comply with a manufacturer's rebate model pilot plan creates an extreme administrative burden and operational challenges. A core principle of the 340B program is that any anti- fraud efforts must "minimize the administrative and financial burdens" on covered entities. 10 This short timeline is destined to create a variety of challenges that will directly impact patients' access to affordable medications. To address these critical issues, Primary Health Solutions recommends that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject matter expertise to understand the complexities of pharmacy software, billing, and data components. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to handle grievances. Primary Health Solutions is concerned that the pilot program fails to provide such protections, leaving health centers without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. V. Conclusion Primary Health Solutions strongly urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. This pilot, as currently proposed, represents a fundamental departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. The retrospective rebate model would impose immense administrative, financial, and operational burdens on health centers, hindering their ability to provide essential services to the 34 million Americans who rely on them. As we have detailed, this model would create significant cash flow challenges, forcing health centers to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It also creates a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Given the existing, robust compliance and oversight framework already in place for health centers, we believe this pilot would cause disproportionate harm to the very providers the program was designed to support. Instead of enhancing program integrity, the pilot's lack of clear enforcement, conflicting statutory requirements, and burdensome data demands will only create an untenable system that puts patient access at risk. We urge HRSA to reconsider its approach and ensure that the future of 340B protects, rather than harms, the most vulnerable patients. Primary Health Solutions appreciates the opportunity to respond to this 340B rebate model pilot program and looks forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Trevor Perkins, Director of Pharmacy at trevorp@mypriamryhealthsolutions.org. 11 Dr. Ste J. R FAANP reside ary Health o utions 12
HRSA-2026-0001-1433Merika Goldstein · OR, United States2026-04-13T04:00Z1,929 chars
See attached file(s) My name is Merika Goldstein and I am a Family Nurse Practitioner at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Merika Goldstein Cornellius, Oregon
HRSA-2026-0001-1434Uncompahgre Medical Center2026-04-13T04:00Z41,724 chars
See attached letter from Uncompahgre Medical Center in regard to the 340B Rebate Model Pilot Program. UMC UNCOMPAIIGRE MEDICAL CENTER April 15, 2026 Chantelle Britton Director Office of PharmacyAffairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Uncompahgre Combined Clinics, dba Uncompahgre Medical Center (UMC) would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $700,000 from entity- owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Uncompahgre Combined Clinics, dba Uncompahgre Medical Center I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For UMC in particular, this means it will impact: We have 1176 unique 340B patients O Current admin costs for our 340B program is roughly $100,000.00. We use the revenue captured from 340B in a variety of ways, including reduce or eliminate medication costs for uninsured/underinsured patients, provide transportation assistance (gas cards, rides), support care coordination for high-risk patients, support integrated care models (medical + dental + behavioral health) & Fund training, continuing education, and certifications We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care forthe most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularlyfor patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is facing a deepening mental health crisis, with nearly one in four Americans (23.4%) living with a mental illness. Beginning in 2027, the Medicare Drug Price Negotiation Program (MDPNP) will include certain behavioral health medicationsraising serious concerns about access for vulnerable populations. Vraylar (cariprazine), an atypical antipsychotic, is a cornerstone in the treatment of schizophrenia and other serious mental health conditions. However, a rebate-based pricing model may introduce regulatory barriers for Community Health Centers (CHCs), limiting their ability to provide this essential medication to uninsured and underinsured patients. The 2027 drug list also includes Austedo (deutetrabenazine), used to treat tardive dyskinesia and often debilitating side effect of antipsychotic medications. Clinical studies have shown that 73% of patients treated with Austedo achieved meaningful symptom improvement, significantly enhancing their quality of life. Any disruption in access to these critical medication's risks worsening outcomes for patients and further intensifying an already fragile mental health landscape The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 2 Cools F, et al. Risks associated with discontinuation oforal anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. Imp, : .,tltn3ixurFuiLnruicloilhilf !RI l 6 I cireiiiiii 23.II657 2025 UDA Data, HRSA (hrsa.gov) 3 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide slidingfee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program presents not only a significant financial threat to Community Health Centers (CHCs) but also imposes a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from participation, as compliance will require substantial new investments in workforce capacity and information technology systems to manage varying manufacturer rebate requirements. A recent assessment by the National Association of Community Health Centers underscores these concerns, highlighting the added staffing and IT costs required to maintain compliance across multiple rebate structures. Much like the challenges CHCs already face with evolving contract pharmacy restrictions, this pilot would force health centers to navigate complex and inconsistent data submission requirements, tight reporting timelines, payment reconciliations, and frequent disputes over denied rebates. For CHCs with higher prescription volumes, these challenges are further amplifiedcreating an ongoing administrative strain that diverts limited resources away from patient care. Rather than streamlining operations, the rebate model risks compounding existing burdens and undermining the ability of CHCs to effectively serve their communities. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessingthe financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. 4 Sliding Fee Discount: Uncompahgre Medical Center provided $112,047.59 in sliding fee discounts, provided through discounted medications and medical services in 2025. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Uncompahgre Medical Center anticipates needing 1 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity Uncompahgre Medical Center anticipates an increase of $250,000 for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal assessment, we estimate needing to hire at least 1 full-time equivalent (FTE) Additionally, we estimate the cost to hire additional staff to be between $500,00 to 1 million annually, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 30 hours her week will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Uncompahgre Medical Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receivingtimely and appropriate 340B rebates. Pharmacy Software &Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal 5 workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will. likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which served 2,170 unique patients in 2025, the total projected increase in expensesincluding labor, IT, and carrying costs, is estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep 11 Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools upwards of $60,000.00 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 30 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.5 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which 5 Internal NACHC survey data 6 are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. O HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waitingfor a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.6 At UMC, we do everything we can to make medications attainable for those who would otherwise have to go without. Through our sliding fee carefully adjusted 6 HRSA FAQ 7 based on a patient's income and family sizewe try to ease the financial burden of care. Even so, only about 175 patients each year can access medications at a reduced cost, leaving many others still struggling to afford what they need. This is why access to the 340B Drug Pricing Program is so critical. Without the ability to purchase medications at reduced prices, safety-net providers tike UMC face heartbreaking limitations in how much relief we can offer. For many of our patients, these savings are not just helpfulthey are the difference between taking prescribed medication and going without, between managing a chronic condition and facingworsening health. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stocktheir shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).7 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and theirvendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that littps://enlivc.nlicalili I oivrier-sholikl-revk.0, 8 many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calcu Description To support CHCs in assessingthe financial impact of purchasing drugs at the fullWAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B8 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.9 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $368,168.32 to purchase these 10 drugs underthe proposed rebate model. Currently, ourorganization spends $7,923.01 to purchase these same drugs at the 340B ceiling price. This represents a 4546% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's abilityto maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot 8 hum://340bprieing.hrsa.Lo.. 9 PS:I/WWW.C111s.govililesizip/selected-druu- i !ickmliateil-prices-also-known-ninimum-fair-priccs-statutezin.zip 9 sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Uncompahgre Medical Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as providing FREE immunizations to rural school districts and local EMS/Fire stations, / our medication therapy management (MTM) program for complex diabetic patients and dietary counseling. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund an additional full-time Community Health Worker or a Behavioral Health Consultant], directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 179 uninsured patients from rationing their insulin or heart medication. B. Wholesaler lmplications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Uncompahgre Medical Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B program to "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact 10 prompt-pay discount. However, Uncompahgre Medical Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $300,000.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Uncompahgre Medical Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $361,168.32. This dollar amount will double if you include 2027 & 2028 MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises orfacility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are astronomical. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Uncompahgre Medical Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened abilityto provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Uncompahgre Medical Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.10 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $100,000 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) laps %+ %,..1o.lcnilrcv.isier.Lo,clocllinclli,.2H.]5/08111I,'2025-1-16 I 913,10I)-prograni-.1.1olic:;-anDlication-Drocess-ror-the-340b- tcha I+ -nr onram 11 CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state- level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operatingon thin margins, which depend on timely reimbursementto sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 12 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuringthat no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. 13 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Uncompahgre Medical Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original. intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Uncompahgre Medical Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Uncompahgre Medical Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Katie Marolf, kmarolf@umclinic.org Charles Porth, CEO Uncompahgre Medical Center 14
HRSA-2026-0001-1435Morris County Hospital2026-04-13T04:00Z25,269 chars
Please review the attached PDF letter with three Exhibits attached to it for support documents. Thank you very much for considering its contents. Kevin Leeper CEO, Morris County Hospital MORRIS COUNTY sivRITAL -'444 Alorris County Hospital 600 N Washington Council Grove, KS 66846 (620) 767-6811 Fax (620) 767-561 l The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Prograns, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Morris County Hospital (MCH), Council Grove, KS, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Morris County Hospital that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Morris County Hospital has relied on for years, is the best way to fulfill the purpose of the 340B program. The RFI poses 30 questions (some are duplicative) and encourages commenters to include supporting facts, research, and evidence in their responses. Morris County Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs rnean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Morris County Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Morris County Hospital, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Morris County Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital and far above and beyond what we are experiencing now. Estimate and identify the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. First of all, MCH averages about 300 each 340B eligible scripts filled every month. Our TPA does a very nice job summarizing the costs, payments, and miscellaneous expenses attached to each of these filled prescriptions. But our responsive effort today primarily deals with the aggregate totals of these 300 dispenses, knowing we must pay our pharmacies, our wholesalers, and our consultants for their work in creating these crucial dispenses for our patients' collective benefits. Today it requires three of us in-house approximately 15-20 collective hours a month to validate these orders and get them paid, confirm proper prices charged to our patients deserving the 340B pricing, and keeping our compliance oversight in good standing. This is because our TPA's software performs the lion's share of the tracking and reporting functions, such that consistent, reliable data is at our fingertips. To alter this entire structure with having to manually account for 300 individual rebates cycling back through Beam and the respective authorizing drug manufacturers will turn our 340B program into a workflow quagmire. The program today pretty well operates seamlessly behind the scenes of all these dispenses, and the three of us who oversee the program have no significant reconciliation efforts outside of the original ordering of the drugs and validating correct pricing at the point of being invoiced. To keep up with constant churn of over 3,600 annual dispenses and determining if we were refunded (or not) the WAC vs. 340B price differential will require an estimated 340 additional labor hours per month, inclusive of time spent on the phone or email with Beam and/or the drug manufacturers chasing the unauthorized or denied rebate dispenses. Denials are what constitute significant administrative hours an estimated 60% of these extra hours! These hours will have to be conducted by the equivalent of a Pharmacy tech or an LPN, individuals who have a comfort level with medications and their intended uses. So, with benefits, two $25/hour FTEs will cost us approximately $8,666 per month, or $104K annually. And this expenditure serves no other additional value to our current efforts that make certain our contracted pharmacy(s) actually recover dollars currently received in the 2-3- day turnaround cycle of medication dispensing and insurance reimbursement. As for our outside consultant, who will help our new hired staffwith questions regarding claims submission and rebate reconciliation, let it be known that they have already levied what amounts to a 25.8% increase in our support fees (over the first three months of 2026) in anticipation of this rebate program kicking off on January 1, 2026, and the extra staff they brought on for the additional oversight. Understanding the impact of lower revenues generated because of the large looming reduction in the Medicare payment rate for the ten initial Maximum Fair Pricing (MFP) drugs effective in January, they switched us to a flat monthly fee vs. a percent of revenue generated. Hence, we are seeing that 25.8% net rate increase for their services what would have cost MCH in January thru March under the % of net profit model, $19,079, actually cost us $24,000 with the fixed rate methodology (see EXHIBIT 2). This was driven up by our consultant's upstaffing for the now delayed rebate plan AND because of the implementation of the Medicare savings plan on those same 10 drugs. With these ten MFP drugs, CMS is already recording substantial savings with their new program, resulting in each respective 340B covered entity suffering substantial hits to their 340B program, even ahead of this unfair rebate consideration. I say enough is enough, and this proposed rebate model needs to die for good, right now! The above two arguments demonstrate the extra hospital borne costs to be incurred by the pending rebate scenario. But this extra cost and effort do not speak to the "relativity" of this topic in the first place...which is that Big Pharma does not like discounting their products for the betterment of covered entities and /or for the Government which has mandated reductions to the 10 MFP MC drugs, already mentioned! Please look closer to the data at the bottom of EXHIBIT 2. Since January 1, 2026, note the percentage change from 2025 to 2026 in insurance paid revenue capture, for the four major players in the 340B contract pharmacy program: 1.) the Drug Companies/Wholesalers for their cost ofgoods sold are seeing 40.2% of the gross revenues, up from 28.6% in 2025, 2.) the Contracted Pharmacy for their dispensing fees are seeing only 28.9% of the gross revenue, down from 33.2% in 2025, largely from the decline in MC payments for the MFP drugs, 3.) the Third Party vendors are seeing 4.8% of the gross revenue receipts, up bit from the 3.9% in 2025, and 4.) the Covered Entity (MCH) is seeing only 26.1% of the gross revenue, down from 34.3% in 2025. This is an interesting twist which identifies the margin shifts as a result of the Medicare repricing for the 10 MFP drugs. Pharma didn't lose a thing in this CMS "cost reduction effort" ...only the Dispensing Pharmacy and Hospitals, which generate the referrals and do the work in getting the consumer the medicines! Makes us wonder why the Drug Companies feel so cheated when you can see from these results, they get the largest cut out of the across-the-board book of insurance paid claims! So why should Pharma be listened to with their pursuit of this rebate pilot? Their earning reported year in and year out stack up far higher than 95% ofthe covered entities now serving the American public! By the way all the Morris County Hospital data summarized in EXHIBITS 1-3 is extracted from detailed monthly dispensing reports generated by our two outside compliance vendors / consultants: MacroHelix and Citizen's Medical Center, Colby, KS. The other detrimental financial impact that would be driven by the proposed rebate model for eventually receiving the legislative mandated 340B discounts is the obvious cash flow challenges MCH would have to endure. EXHIBITS 1 and 3 speak to this huge concern. EXHIBIT 1 was created to estimate the additional monthly cash expenditures that WAC pricing would require - $86,001.12...for just the initial bank of 10 drugs. We learned that the approved rebates would have to be paid within ten days, but those are only for the approved dispenses. We do not believe that the rebate plan was created just to delay 100% of the current 340B dispenses. We assumed that 20% of the dispenses would be challenged to one degree or another, causing most of the extra man hours of work which was mentioned above. But even with that delay in payment and/or nonpayment, we determined that our cash position could put us in violation ofone ofour bond covenants, specifically our current debt service coverage ratio, which requires a ratio of 1.25 (see EXHIBIT 3a without rebate, and EXHIBIT 3b with rebate). This cash flow squeeze would also greatly diminish our ability to pay for untimely repairs and replacement of needed capital or minor equipment. Having days of cash on hand for emergencies has been something we have worked very hard to preserve, and paying WAC prices for a Pharma review function seems totally unfair. As already mentioned, we take staying in compliance with the rigorous 340B OPAIS and 340B ESP standards very seriously. Why do we need another force testing us to make sure we are following their own set of rules...especially when that other force is totally governed by a for-profit- share-holder system?? As stated,...we do not think a rebate model adds anything to overall public or privately owned healthcare services, except considerable disruption. If notable, which it is, compare those administrative costs to your marginal savings from 340B (either total or for those 10 drugs) to show how much this will eat into the benefits of the 340B Program. Back to EXHIBIT 2, you will see that our monthly net margin from 2025 to 2026 is already down 26%, from $88,974 to $70,494. That is a result of reduced payment for the Medicare MFP drugs. To lose up to 20% more from delayed or denied rebate dispenses would likely force us to close some services, even if they are quite valuable to our local population. Obstetrics and/or pulmonary rehab are two services that regularly draw our financial scrutiny, because they are either low volume or seasonal, and they yield negative margins for many months of the year. Our current level of 340B revenues helps to sustain them...but very likely not so if the 340B program keeps on being continually threatened. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Morris County Hospital, Council Grove, KS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings all based on an upfront- discount model. A fundamental switch now woukl disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the substantial costs that this disruption will impose on 340B Respectfully, hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Efforts To Avoid 340.B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. that is the purpose of the 340B ESP application. Given the tremendous costs that a rebate mechanism will impose on Morris County Hospital, Council Grove, KS, and HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For aH of these reasons, Morris County HospitaI, Council Grove, KS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Morris County Hospital, Council Grove, KS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additionaI comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have further questions. Kevin A. Leeper CEO Morris County Hospital, Council Grove, KS 620-767-6811, x146 EXHIBIT 1 MCH CASH FLOW IMPACT from 340B Rebate Pilot Approved Drugs - Effective 1-1-26 COSTREVIEW PER 30 DAY DISPENSE 10 Manufacturers Drug (Only these 11) NDC 4 Used For Pricing 340B Price Wholesale Price Variance - Rebate Potential Aug Dispenses initial Cash Flow impact Sept. Dispenses Initial Cash Flow Impact Oct. Dispenses Initial Cash Flow Impact Nov. Dispenses Initial Cash Flow impact 3 - Month Cash impact Bristol Myers Squibb Eliquis 00003089421 10.44 788.25 777.81 44 34.223.64 51 39,668.31 59 45,890.79 119,782.74 immunex Corp. (Amgen) Enbrel NA NA NA NA NA NA NA NA NA NA NA NA NA Astra Zeneca AB Farxiga 00310621030 0.31 511.44 511.13 25 12,778.25 24 12,267.12 38 19,422.94 44,468.31 Pharmacyclics (Abbvie) imbruvica NA NA NA NA NA NA NA NA NA NA NA NA NA Merck Sharp Dohme Januvia 00006022131 46.27 343.15 296.88 2 593.76 2 593.76 1 296.88 1,484.40 Boehringer ingelheim Jardiance 00597015330 0.31 520.42 520.11 51 26,525.61 35 18,203.85 27 14,042.97 58,772.43 Novo Nordisk Flasp 00169320415 60.09 581.18 521.09 4 2,084.36 0 0.00 3 1,563.27 3,647.63 Novo Nordisk Novolog 0016975011 37.62 41.60 3.98 4 15.92 4 15.92 1 Janssen Biotech (J&J) Sterela NA NA NA NA NA NA NA NA NA NA NA NA NA Janssen Pharm. (J&J) Xaratto 50458057930 0.31 466.49 466.18 18 8,391.24 12 5,594.16 16 7,458.88 21,444.28 Novartis * Entresto 00078069620 351.44 733.42 381.98 10 3,819.80 6 2.291.88 6 2,291.88 B,403.56 Total: 88,432.58 78,635.00 90,967.61 258,003.35 , Average Ext a Monthly Cash Spent: $86,001.12 - Effective 4-1-2026 REVENUE / MARGIN COST REVIEW PER 30 DAY DISPENSE MCH Net Profit 10 Manufacturers Drug (Only these 11) 3 Months Usage from Above MC Usage at 40% of Total 340B Price Wholesale Price 2026 MC MFP REVENUE Revenue Formerly Paid - 2025 Dispens Fee Apothecary@ 15+35% Dispens Fee Apothecary At new MFP Rate Initial Profit at 340B Rate Initial Profit al AWP Rate Expected Profit After Rebate Expected profit w/ MC's MFP Bristol Myers Squibb Eliquis 154 62 10.44 788.25 231.00 595.00 223.25 95.85 55,641.74 -64,141.00 54,033,98 40,922.66 lmmunex Corp. (Amgen) Enbrel NA NA NA NA NA NA NA NA NA NA NA NA Astra Zeneca AB FarxIga 87 35 0.31 511.44 178.00 609.00 228.15 77.30 33,106.98 -11,361.33 33,080.01 23,281.65 Pharmacyclics (Abbvie) Imbruvlca NA NA NA NA NA NA NA NA NA NA NA NA Merck Sharp Dohme Januvia 5 2 46.27 343.15 113.00 241.00 99.35 54.55 476.90 -1,007.50 245.55 310.50 Boehringer Ingelheim Jardlance 113 45 0.31 520.42 197.00 619.00 231.65 83.95 43,735.52 -15,036.91 43,700.49 31,414.57 Novo Nordisk Flasp 7 3 60.09 581.18 119.00 586.00 220.10 56,65 2,140.67 -1,506.96 1,720.04 1229.57 Novo Nordisk Novolog 9 4 37.62 41.60 119.00 148.00 66.80 56.65 392.22 356.40 53.64 306.93 Janssen Biotech (J&J) Sterela NA NA NA NA NA NA NA NA NA NA NA NA Janssen Pharm. (J&J) Xaralto 46 18 0.31 466.49 197.00 595.00 223.25 83.95 17,086.24 -4,358.04 17,071.98 6,903.14 Novartis * Entresto 22 9 351.44 733.42 295.00 715.00 265.25 118.25 2,162.82 -6,240.74 -5,568.86 1,215.41 Total: 130,743.09 (103,296 08) 120,336.83 81,584.42 " includes Salt /Mo. Citizen's Fee " Includes $8X /Mo. Citizen's Fee " includes $8K/Mo. Citizen's Fee Ave / Month 43,581.03 40,112.28 27,194.81 Annualized: 522 ,972.36 481,347.32 326,337.66 Minimum Decline in 2026 Rembursement: 5155,010 I 67.80% Of Former Profit EXHI BIT 2 Month RX Revenue Disp Fee 340B Acq Cost CE initial Profitability Citizen's MH Fee as % of Net Profit CE Net Profit Less $1K Fee MacroHelix Citizen's MH Fee As of 1 1-2026 Each Month Jan25 $233,777.00 $84 SS 1 92 560.814.46 $88.340.54 57,067.24 S80,273.30 %of Revenue 36 20%. 26.01% 37.79% 8.00% 34 34% Feb-25 $235.518 09 $84.883 40 $58.604.55 $92 /j30.13 $7,362.41 $83,667 72 %of Revenue 36.04% 24.88% 39.08% 8.00% 35 52% Mar25 $234.77971 $84 418 46 $61,624 65 $88 736.60 $7,098.93 $80,637.67 %of Revenue 35.96% 26 25% 37.80% 8_00% 34 35% Apr-25 $205.181 60 $74.236.82 $45 693.03 $85 251.78 $6,820.14 $77,431.64 %of Revenue 36 18% 22.27% 41.55% 8.00% 37 74% May 25 $243.062 65 $87.921.84 $51.545 46 $103595.44 $8,287.64 594,307.80 %of Revenue 36.17% 21 21% 42.624 6.0o% 38 80% Jun-25 $218.729 11 $79.054 53 $42.312 17 $97 362 43 $7,788.99 $88,573 44 % ol Revenue 36.14% 19.34% 44_51% 8.00% 40 49% Jul-25 $276.330 22 $87 526.39 $80.373 76 $108,430 C7 $8.674.41 $98.755 66 % of Revenue 31.67% 29.09% 39.24% 8.00% 35 74% Aug-25 $286.379 :8 $88.752 10 $84.744 86 $112,822.32 $9.025.79 5102,796.53 % of R even ue 30.99% 29.59% 39 40A 8.00% 35 90% Sep-25 $267 208 72 S79.759.32 585,477.87 $101,971.53 $8,157 72 $92.813 81 %of Revenue 29.85% 31.99% 38.16% 8.00% 34 73% Oct-25 $295,861.34 $89,711 11 $99,755.85 $106,394.3-8 S8,511 55 $96,882 83 %of Revenue 30 32% 33 72% 35.96% 8 00% 32 75% Nov-25 $251.772.01 $75,550.41 $83.511.06 $92.710.54 57.416.84 $8.4.293 70 %of Revenue 30.01% 3317% 36.82% 8.00% 33.48% Dec-25 5324,824.94 5104,589.42 $124.302 30 $95.933.22 5/.674.66 $87.258 56 %of Revenue 32.20% 38_27% 29_53% 8.00% 26.86% Jan-26 $233,097.98 567,833.13 $92,532.761 $72.732.09 $5,818 57 M3,732.09 $8,000.00 %of Revenue 29.10% 39.70% 31.20% 8.00% 27.34% Feb-26 $138.403 59 $39.597.49 $56,708.5Z $42,097.58 $3.367 81 $33,097.58 $8,000.00 %of Revenue 28.61% 40.97% 30.42% 8 00% 2391% Mar-26 5426,614.96 $125,730.48 $177,229.961 $123,654.54 $9,892 36 $114,654.54 $8.000.00 %of Revenue 29 47% 41 54% 28.99% 8 00% 26 88% Apr-26 SI 9,078.74 524,000.00 %of Revenue Inc Variance $4,921.26 May-26 %of Revenue Jun-26 Jul-26 Aug-26 % of Revenue 2025 Totals. 53.073.424 el 51.021.025 72 $878,760 02 $-1,173,578 98 593,886.32 $1,067,692.66 $24,000.00 Macro Helix (WO: 100.00% 33 22% 28.59% 38.18% 3.05% 34.74% $256 11S 72 $85685 48 573 230 00 $97.798 25 $7 823.86 $88 974 39 MCH 3408 340B Acq All 3rd Party CE Net Contract RX Program RX Revenue Disp Fee Cost Fees Profitability 12 Mos. of 2025 $3,073,424.67 $1,021,025.72 $878,760.02 5119 898 52 $1 067,692 66 ' ,of Revenue 100.00% 33.22% 28.59% 3 90% 34.29% Avei Month $256.118.72 585,085 48 $73,230 00 $9.991 54 $88 974 39 In 2026 Went to Foxed rate " 3 Mos. of 2026 5798,116.55 5233 '61.10 5326.471.24 $24.000.00 $211,484.21 i, of Revenue 100.00% 25.92% 40.22% 4 80% 26.06% Ave/ Month 5266.038.85 $77.720.37 $108,823.75 $8.000.00 $70,494 74 lf n 2026 the of Net Profit" method was used would only have pd 31%079 But Pa d $24,000 due to Consultant planning for Rebate/MFP Impact So Rebale/MFP Model has added 54.921 to MCH's conseing cost in 1st 3 mos of '26' '4. of Revenue Generated Ave I Month Ave / Month % of Revenue lUerniced 26.1% 40.2% $108,823 75 2028 3 Mos. YTD Totals. $12b.471 Ni < Drug Companies Covered > Entity $21 '..4fs4 :7 I 570 494 74 28.6% $73,230.00 2026 12 Mos YTD Totals 5878,760.02 < nrug Companies Covered > Entity $1.087,692.66 588 974 39 34.3% 2.0.9.4. 577 72C 37' L 2026 3 Mos YTD Totals. 2025 12 Mos. YTD Totals $233,161 10 < Partnering 11 Pharmacy 3.0 party ,. Vendors $24 000.00 58,000.00 4.8% _._. 33.2% 585,085.48 $1 021,025.72 < Parinering Pharmacy 3rd Party > Vendors 5119,898.52 $9,991.54 3,9% EXHIBIT 3a DEBT SERVICE RATIO IN NON REBATE MODEL (Pre WAC) YTD YTD 1/31/2026 2/28/2026 Net income Available for Debt Service Net Income (Loss) 24,481.00 Depreciation and Amortization 62,486.00 Interest Expense 9,848.00 Net Income Available for Debt Sery ce: 56,815.00 Debt Service Payments Interest Bonds 55,203.75 Principal Bonds Interest Capital Leases 1,141.46 Principal Capital Leases 10,414.18 < See Exhibit 1 66,759.39 Historic Debt Service Coverage Ratio 1.45 UDIV/0! Required Debt Service Coverate Ratio 1.25 1.25 At ratio of 1.45, MCH Comfortably meets its Bond Covenants EXHIBIT 3b YID 1/31/2026 DEBT SERVICE RAT O IN REBATE MODEL (w/ WAC:i Net income Available for Debt Service Net Income (Loss) 24,481.00 Depreciation and Amortizatini 62,486.00 Interest Expense 9,848.00 Net Income Available for Debt Service: 96,815.00 Debt 5ervice Payments Interest Bonds Principal Bonds 55,203.75 Interest Capital Leases 1,141.46 Principal Capital Leases 10,414.18 Ave. Mnthly Drug Cost Differential 340B vs WAC 86,000.00 Estimating 80% of scripts to be approved & rebated tirnely, (68,800_00) meaning 20% will have to be chased down and/or appealed. 83,959.39 New calculation of Debt Service Coverage Ratio 1.15 Required Debt Service Coverate Ratio 1.25 At a ratio of 1.15, MCH Fails to meet its Bonn' Covenant Obligations.
HRSA-2026-0001-1436Save 340B2026-04-13T04:00Z4,349 chars
See attached file(s) April 13, 2026 Chantelle Britton Director, O8ice of Pharmacy A8airs The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 United States Re: Request for Information: 340B Rebate Model Pilot Program (FR Doc. 2026-03042) Director Britton, SAVE 340B appreciates the opportunity to submit comments in response to HRSAs Request for Information (RFI) regarding the potential implementation of a 340B Rebate Model Pilot Program (Docket No. HRSA-2026-93942). SAVE 340B is a coalition of community advocates committed to educating stakeholders, taxpayers, and public o8icials about widespread abuse and fraud within the 340B Drug Pricing Program. The coalition supports of policy reforms that safeguard the programs integrity and restore it to its original purpose of serving vulnerable patients. We support HRSAs continued development of a rebate-based pilot program as a thoughtful and measured approach to strengthening oversight of the 340B program, improving transparency, and restoring confidence that 340B discounts are reaching the patients the program was designed to help. The 340B program is in urgent need of reform. Established to stretch limited federal health care resources and enhance care for underserved communities, the program has increasingly drifted from that mission. In many cases, 340B hospitals and clinics are retaining savings generated by discounted drugs rather than ensuring those benefits are passed on to eligible patients. Over the last decade, the 340B program has expanded dramatically particularly among large hospital systems far outpacing HRSAs ability to track drug utilization, confirm patient eligibility, or monitor how program savings are ultimately used. Under the current model, there is insu8icient visibility into whether discounted drugs are consistently dispensed to eligible patients, or whether the resulting savings are used in a manner consistent with congressional intent. To restore the program to its original intent, reform e8orts should include: Ensuring Discounts Reach Patients: Mandate that 340B discounts directly translate into lower medication costs for eligible patients, reducing their out-of- pocket expenses. Clarifying Patient Definition: Establish a clear and enforceable definition of an eligible "patient" to ensure discounts reach individuals who truly need medication assistance. Preventing Duplicate Discounts & Diversion: Implement mechanisms, such as a neutral claims data clearinghouse and claims modifiers, to prevent manufacturers from providing both a 340B discount and a Medicaid rebate for the same drug. Improving Oversight & Auditing: Strengthen HRSA's statutory oversight authority with appropriate funding and staffing to conduct rigorous audits of covered entities, ensuring compliance and addressing abuses. Comprehensive Transparency: Require all covered entities, including hospitals and contract pharmacies, to publicly report how they use 340B program savings, ensuring funds are reinvested into community healthcare services and directly benefit patients. Regulating Contract Pharmacies: Limit the proliferation of contract pharmacies, especially in wealthier areas, and require them to prioritize service to medically underserved populations. Strengthening Accountability: Establish clear requirements and metrics for covered entities to demonstrate their commitment to serving low-income communities, with enforceable mechanisms to prevent program abuse. SAVE 340B believes that testing a rebate model is consistent with congressional intent insofar as it seeks to verify that 340B discounts are tied to eligible patients and meaningful patient benefit. We support HRSAs eUorts to evaluate a 340B rebate model through a structured pilot program. We believe this approach represents a meaningful step toward restoring transparency, accountability, and patient-focused integrity to the 340B program. We urge HRSA to continue this work, engage openly with stakeholders, and use the pilot to build a stronger, more credible program that demonstrably fulfills its mission. Thank you for your kind consideration. Hon. Elba Wedgeworth Chair, Save 340-B Fmr. President, Denver City Council
HRSA-2026-0001-1437Sarah Bush Lincoln Health System authorized to submit comment - Advantage Healthcare Advisors2026-04-13T04:00Z3,703 chars
Comment letter from Sarah Bush Lincoln Health System in Mattoon, Illinois. Sarah Bush Lincoln Trusted Compassionate Care April 10, 2026 Health Resources and Services Administration Mr. Thomas J. Engels, Administrator U.S. Department of Health and Human Services Rockville, MD 20852 Re: HRSA Request for Information on a Potential 340B Rebate Model We are writing to express our concerns about the potential 340B rebate model. Sarah Bush Lincoln Health System appreciates the chance to comment on HRSA's RFI regarding a potential 340B rebate model. We oppose the rebate-based framework and urge HRSA not to pursue a rebate pilot in any form for the following reasons. 1.Rebate Models Conflict With the Statutory Structure and Operational Reality of 340B The 340B statute is built around upfront access to ceiling prices, not retrospective reimbursement. A rebate model would fundamentally alter the program's mechanics by shifting financial risk and timing burdens onto covered entities, contrary to congressional intent and the program's safety-net purpose. Drug manufacturers have significantly higher margins compared to most 340B eligible entity hospitals operating at very low or negative margins. Shifting this business risk to many hospitals operating at negative operating margins could negatively impact their patient care and core mission. 2.Cash-Flow Disruption Would Be Severe and Systemic Rebate models require entities to pay full acquisition cost upfront, including for high-cost specialty drugs. Even modest delays would create: Material cash-flow deficits Increased borrowing and interest exposure Reduced liquidity for pharmacy operations and patient programs 3. Administrative Complexity Would Increase Costs, Error Rates and Compliance Risk A rebate framework introduces new layers of data exchange, claim matching, reconciliation, and dispute resolution across manufacturers, TPAs, and state Medicaid agencies. This complexity increases: Duplicate discount risk Audit exposure Administrative overhead System-wide error rates 1000 Health Center Drive P.O. Box 372 Mattoon, IL 61938-0372 217-258-2525 www.sarahbush.org The existing upfront discount model is an approach that ensures predictable, verifiable pricing at the point of sale and it should be improved if it does not meet certain needs. Creating a second duplicate approach from scratch for a subset of drugs where that system is yet to be fully designed, tested or proven makes no sense. Costs and management effort to run both can only be more and create rnore potential for error. 4.The Prior Rebate Pilot Demonstrated Fundamental Legal and Operational Failures Federal courts found that HHS's prior rebate pilot likely violated administrative law and failed to consider impacts on 340B hospitals. These deficiencies were not procedural; they reflected core flaws in the rebate concept itself, including insufficient analysis of financial and operational consequences for safety-net providers. 5.No Evidence Suggests a Rebate Model Can Be Implemented Without Harming Safety-Net Providers HRSA's RFI does not identify new data demonstrating that a rebate model can preserve program integrity, avoid duplicate discounts, or maintain provider solvency. The burden of proof remains unrnet. Conclusion Sarah Bush Lincoln Health System urges HRSA to reject any 340B rebate model and rnaintain and improve as needed the longstanding upfront discount structure that ensures predictable access to ceiling prices and supports the program's statutory mission. Sincerely, Sean Fischer Vice President Finance and Chief Financial Officer Sarah Bush Lincoln Health System
HRSA-2026-0001-1438Wabash General Hospital District2026-04-14T04:00Z12,572 chars
See attached file(s) IV Wabash General Hospital People you know, helping people you love The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 DearAdministrator Engels: On behatf of Wabash General Hospital District, a Critical Access Hospital located in Mt. Carmet, Illinois, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 3408 Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, anyrebate mechanism wilt impose enormous costs and burdens on Wabash General Hospital District that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingty based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Wabash General Hospital District has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Wabash General Hospital District has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that anyfuture Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. 1418 College Drive Mt. Carmel, IL 62863 618.262.8621 www.wabashgeneral.com if HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Wabash General Hospital District can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Wabash General Hospital District to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Wabash General Hospital District understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Under the rebate program, we estimate the incremental administrative and operation start- up costs to be $122,000 to $178,000, including information technology redesign, TPA interface setup and staff training. Ongoing annual costs are estimated at $160,000 to $230,000 including staffing, compliance monitoring, dispute management, and manual reconciliation. These amounts are based on increased staffing for manual claims-level submissions, reconciliation and denials and disputes, TPA charges, IT labor hours for redevelopment, monitoring and audit preparation. In addition, legal review, cybersecurity, and consulting support would range from $27,000 to $41,500 as well as reduced service capacity. Overall, the rebate overhead would consume approximately 30% of our savings for the 10 pilot drugs. Staffing Impacts Under a Potential 340B Rebate Program. Wabash General Hospital District does not currently have the staff needed to comply with a Rebate Program. The rebate model. would require continuous manual extraction, validation, reconciliation and dispute resolution - not a simple, weekly upload. In our estimate, we would need to shift current responsibilities and hire the following staff members to ensure program success: 1.0 FTE - 340B Program Analyst 0.5 FTE - Pharmacy Technician 0.25 FTE - Finance Specialist 0.1-0.2 FTE - Compliance Officer Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Wabash General Hospital District has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism wilt force us to incur significant costs to change those systems. The rebate program will require new NDC-level data extracts and reporting logic, a manual claim-matching system, secure file exchange connections and internal dashboards and reconciliation mechanisms. We estimate these costs will range from $85,000 to $120,000 for development and $12,000 to $18,000 for annual maintenance. Also, we estimate that the data transfer, which requires manual batching and review, will consume approximately 10-15 hours per week since our EHR does not have a direct interface to our TPA. Data Collection By Covered Entities. Duringthe prior iteration ofthe Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. The new rebate program wilt require us to provide patient identifiers, service dates, billing providers, payer types, NDCs, locations, and units billed far more than current 340B requirements. There witl also be additional burdens including manual extraction from our EHR, billing system, dispensing system, ERP system and TPA outputwhich will require spreadsheet- levet cross walking. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Wabash General Hospital District to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We estimate that with the 10 pilot drugs there would be a monthly exposure of $8,400 - $15,000 while floating cost purchases. This would severely impact our days-cash-on-hand and could put us at risk with loan covenants. We are required to pay wholesaler invoices within 15 days or less and rebate payments are not guaranteed within 10 days due to denials and data delays. The 10-day payment window can also be adversely affected by holidays, weekends, denial cycles and corrections. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Wabash General Hospital District will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community wilt suffer in concrete ways. Currentlywe utilize 340B savings to provide support to the communities we serve by employing athletic trainers for rural school districts and community colleges, sponsorships for economic development, partnering with non-profit organizations, and providing patient financial assistance. With the onset of the rebate program, we are closely monitoring the change in savings and will adjust our commitments accordingty. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount." Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Wabash General Hospital District reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning forthe use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settted reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitats like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. We budget 304B savings into long-term operating projects, capital ptanning, staff retention and expansion of service lines. Switching to rebates disrupts financial assumptions and planning. Problems With the Beacon IT PLatform. Under HRSA's original Rebate Program, the approved drug companies were ptanning to use Second Sight Solutions' Beacon IT ptatform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon's terms and conditions require excessive data-sharing permissions. They are constantly changing data requirements and their system was unstable during testing. To mitigate privacy and security concerns we recommend third-party security audit requirements, standardized data fields, a formal dispute-resolution process, and covered- entity oversight. Efforts To Avoid 340B/MDPNP DupLicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Wabash General Hospital District, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that coutd achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP dedupkation, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neitherviable nor less costlythan a rebate mechanism. For all of these reasons, Wabash General Hospital District respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. H RSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Wabash General Hospital District and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lynn Leek, CPA Chief Financial Officer Wabash General Hospital District
HRSA-2026-0001-1439Horizon Health Care, Inc.2026-04-14T04:00Z42,624 chars
See attached file !A%RIZON HEALTH April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Horizon Health Care, Inc. (Horizon), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: At Horizon, we operate health centers in 19 rural/frontier communities and utilize strictly contract pharmacy arrangements to dispense medications to our patients. The additional administrative costs associated with using contract pharmacies and the use of an outside 3rd party administrator equate to 30% of the total 340B savings generated after purchasing the drugs at the 340B price. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural health centers, like Horizon invest 100% of our 340B savings in keeping primary healthcare available and accessible for everyone. For example, we invest a significant amount of resources into telehealth platforms to ensure patients have access to acute healthcare needs when healthcare professionals are out of the clinic as well as access to behavioral health professionals across our entire service area, recruitment and retention of highly qualified healthcare professionals, and other rural- specific infrastructure investments. For the past 47+ years, Horizon, a Federally Qualified Health Center (FQHC), has been a leader in providing high-quality, affordable primary health care services to nearly 27,000 patients in rural and frontier communities across 28,000 square miles of South Dakota. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Horizon in particular, this means it will impact: 19 rural/frontier communities across 28,000 square miles of South Dakota. 27,000 patients that rely on Horizon for their primary healthcare needs. 21,000+ 340B prescriptions filled annually at our contract pharmacies. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahaiournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Horizon provided $1,810,779 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Horizon anticipates needing 1.0 additional FTEs initially to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Horizon anticipates an increase of over $13,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 4 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Initially, Horizon anticipates needing an additional 1.0 FTE to fulfill the additional administrative tasks that coincide with the new rebate model including reconciling, filing, tracking, and working denials with manufacturers. As time progresses, we will have to evaluate the staffing levels and determine if more FTEs will be required. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities, including Horizon. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of reconciling, filing, tracking, and monitoring rebate claims and payments. It is anticipated that an additional 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Horizon urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Horizon's TPA will charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings that are meant for patients. Total Cost: For our CHC, which serves 27,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $103,000 annually. The Contract Pharmacy: The Burden of Network Coordination For Horizon contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Horizon currently partners with 22 pharmacies to increase access to affordable medications. Internal NACHC assessment (99 responses). 8 Ibid. 5 TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We know that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased monthly fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 22 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 19 different communities and surrounding areas with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharrnacies I Pharmacy and Clinical Pharmacology t JAMA Network Open I JAMA Network 1 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 6 disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Horizons' contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on our ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholcsalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bpbc.hrsa.gov/compliance/compliance- manual/chapter911footnotel0 tahrips://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. This represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing.hrsa.gov/ 16 https://www.cms,_gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $2,761,958 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,372,576 to purchase these same drugs at the 340B ceiling price. This represents a 100% increase in up-front capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, Horizon is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Horizon anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to evaluate the long-term sustainability of smaller remote clinic locations where the next available access to primary care services may be up to two hours away. Operating Hours: We anticipate needing to reduce access through reduced clinic hours, specifically impacting non-traditional hours that are most utilized by our working adults and the agricultural community that may not be able to access the care they need during the normal workday. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund clinical positions to provide the care needed for our 19 communities. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 6,368 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, in our case, paying for medications upfront at WAC prices would require taking out loans as our extremely low financial reserves will not be able to cover the increased cash output, thereby defeating the purpose of the 340B program. Horizon asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B program, to "stretch" scarce federal resources, by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying 9 on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Horizon estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,389,382. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to try and secure a line of credit with a lender. This is not a sustainable solution; the interest costs alone will divert funds that are currently dedicated to ensuring access is available in the 19 rural/frontier communities that we serve today. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Horizon, the risk of our credit limit being reached is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 27,000 patients across South Dakota depend on. a. Financial Impact of Rebate Denials and Delays Horizon urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of our statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $70,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 11 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. vI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 12 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Horizon strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program, to allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to allow that our patients desperately rely on for their personal wellness. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up- front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Horizon believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Horizon appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at wericksonAhorizonhealthcare.org or via phone at (605)772-4525. Wade Erickson Chief Executive Officer 13
HRSA-2026-0001-1440Pharmaceutical Labor Management Association2026-04-14T04:00Z4,528 chars
See attached file(s) April 13, 2026 The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (FR Doc. 2026-03042) To Whom It May Concern, On behalf of the Pharmaceutical Industry Labor-Management Association (PILMA), we write in strong support of the Health Resources and Services Administration's proposed 340B rebate model pilot program. PILMA is a shared coalition of labor unions and biopharmaceutical industry employers united by a commitment to growing the economy, creating high-quality union jobs, fostering medical innovation, and supporting access to affordable, high-quality healthcare for working families. As a partnership backed by labor, PILMA brings a direct worker perspective to the policies that shape union-sponsored health plans, wages, and benefits. It is from that perspective that we write today: the 340B program, as currently structured, is failing working families and the jointly administered Taft-Hartley health plans that serve them. The 340B program was created to extend the purchasing power of safety-net providers and ensure that savings could be reinvested in care for the uninsured and underinsured. That honorable original purpose has eroded significantly over time due to unintended flaws in the original policy framework. Today, covered entities are under no obligation to direct 340B savings toward patient benefit or be targeted in communities that need it the most, and the program has undergone rapid, largely unchecked expansion: 340B drug expenditures eclipsed $81 billion in 2024, a figure that continues to grow at around 23% per year. PILMA's own research has demonstrated that unchecked use of 340B has increased prescription drug spending for Taft-Hartley plans by $1 billion per year due to the increased cost per claim. This occurs because 340B purchases displace the manufacturer rebates that health plans would otherwise collect, leaving plan sponsors and ultimately workers and retirees to absorb the difference through higher premiums and out-of-pocket costs. HRSA's proposed rebate model represents a meaningful and well-designed step toward identifying flaws and restoring integrity to the 340B program. By linking 340B discounts to verified claims-level data, the rebate model would introduce the kind of basic best accountability practice and transparency that has long been absent from the 340B program but is present in most other programs and industry. The ability to track how discounts are applied, and to confirm that they are not generating duplicate discounts or being used to inflate provider revenues at the expense of payers and patients, would be a common sense but substantial improvement over the current system. Strengthened data collection and reporting requirements are overdue guardrails that will benefit all stakeholders. PILMA has consistently argued that federal action not a patchwork of state-by-state mandates is the appropriate vehicle for 340B reform. State expansions of the 340B program, such as those PILMA has opposed in New York and Minnesota, deepen existing problems and increase administrative complexity without establishing the clear, uniform standards that the program requires. HRSA's proposed rebate model pilot is precisely the kind of targeted, evidence-based federal action that can set a national standard and demonstrate how reform can be implemented responsibly. We support the pilot's focused scope to begin with a limited set of drugs as a prudent approach that allows for rigorous evaluation before broader consideration. This measured design appropriately minimizes disruption to legitimate safety-net providers while generating the data necessary to assess outcomes and guide next steps. PILMA membership believes it is critical that this program be advanced in its entirely without interference in order to provide the best results possible. Working families and retirees covered by Taft-Hartley health plans cannot afford to continue subsidizing a system that does not deliver benefits to patients as designed. PILMA respectfully urges HRSA to move forward with implementation of the 340B rebate model pilot. We are committed to engaging constructively as this effort advances and welcome the opportunity to discuss our perspective further. Thank you for your consideration. Sincerely, Pharmaceutical Industry Labor-Management Association (PILMA)
HRSA-2026-0001-1441Neighborhealth2026-04-14T04:00Z5,916 chars
Please see the attached comment letter. We appreciate the opportunity to provide feedback on the proposed 340B rebate pilot program. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Docket No. HRSA-2026-03042, Request for Information: 340B Rebate Model Pilot Program DearAdministrator Engels: On behalf of NeighborHealth, thank you forthe opportunityto comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. NeighborHealth is a Federally Qualified Health Center (FQHC) that relies on the 340B Drug Pricing Program to stretch scarce federat resources and maintain access to affordabte medications and support services for tow-income patients. We strongly oppose applying a rebate model to FQHC covered entities. A rebate model would fundamentalty shift financial, administrative, and operational burden from manufacturers to safety-net providers, undermining the core purpose of the program. HRSA shoutd preserve the current upfront discount model and, if any pilot proceeds, expticitty exclude FQHCs and fully offset any new costs imposed on covered entities. I. A rebate model would impose significant financial strain on FQHCs Under the current 340B model, NeighborHealth purchases drugs at the discounted ceiling price. A rebate model would require us to pay fult acquisition cost upfront, submit claims after dispensing, and wait for reimbursementconverting the 340B benefit into an accounts receivable. Even under optimistic assumptions (30-day recovery period), this would create approximately $800,000 in working capital exposure for NeighborHealth for just the 10 drugs selected under the Medicare Drug Price Negotiation Program in 2026. Under HRSA's prior framework, exposure could extend up to 55 days. In practical terms, NeighborHealth, and similar entities, woutd be required to finance the 340B discount interest-free. At the same time, the model introduces a new administrative burden. We estimate the need for at least 1 additional FTE (-$120,000 annually) to manage rebate submissions, reconciliations, disputes, and compliance. These costs are unreimbursed and woutd grow as more drugs are included. These financial pressures are not theoretical. Health centers operate on extremely thin margins. In 2024, the national average operating margin was -2.4%, and NeighborHealth faced similar constraints. Requiring upfront financing and adding new administrative costs would directly divert resources from patient care. II. A rebate model introduces avoidable operational and financial risk The current 340B model is operationally simple: purchase at a discount and dispense. A rebate model introduces multiple points of failure; claims submission, validation, reconciliation, and dispute resolution. If a rebate is delayed, denied, or disputed, the patient has already received the medication, but the entity remains responsible for the full acquisition cost. This risl< is especially acute for sliding fee scale patients, where pricing is tied closelyto 340B cost. If rebates are not recovered, NeighborHealth absorbs the loss. Over time, this could force entities to scale back affordability programs that directly support patients. Although prior frameworl<s required manufacturers to respond within 10 days, they did not include meaningful enforcement mechanisms such as penalties or escrow requirements. As a result, the model is structurally imbalanced: providers bear upfront financial risk, while manufacturers retain control over payment timing and disputes. III. The proposed model does not justify its burden with meaningful program-integrity gains NeighborHealth already operates under robust 340B compliance requirements, including statutory prohibitions on duplicate discounts and extensive oversight mechanisms such as audits, recertification, and internal controls. While a rebate model may offer incremental benefits for specific use cases, such as Medicare Drug Price Negotiation Program deduplication, this narrow advantage does not justify imposing broad financial and operational burdens across all payer types. More targeted solutions, such as improved coordination, clearer operational standards, and enhanced audit processes, can address program integrity concerns without fundamentally restructuring the payment model. IV. FQHCs should be excluded from any pilot FQHCs serve the most financially vulnerable populations and operate with minimal margin for absorbing new costs or cash flow disruption. Even a limited pilot would: Tie up critical resources in accounts receivable Introducing unreimbursed administrative costs Expose entities to financial losses from denied or delayed claims For NeighborHealth, this translates to $800,000 in working capital exposure and $120,000 in annual administrative costs for just a limited subset of drugs. The entities most essential to the 340B program's safety-net mission should not bear disproportionate risk. Recommendations NeighborHealth respectfully urges HRSA to: 1. Maintain the current upfront 340B discount model 2. Exclude FQHCs and Community Health Centers from any rebate pilot 3. Pursue targeted program-integrity improvements within the existing framework Conclusion The 340B Program is essential to the patients and communities we serve. A rebate model would shift financial risk, administrative burden, and operational complexity onto safety-net entities at least able to absorb them. The result would not be theoretical; it would directly reduce patient access to medications and care. HRSA should preserve the current model and exclude FQHCs from any rebate pilot. Thank you for your consideration. Respectfully, 9 , James Hazard President & CEO NeighborHealth 10 Gove Street I East Boston, MA 02128
HRSA-2026-0001-1442(no commenter metadata)2026-04-14T04:00Z20,569 chars
See attached file(s) Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Coalition of Orange County Community Health Centers and the ~340,000 patients we serve, the Coalition of Orange County Community Health Centers (Coalition OC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, the Coalition OC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, the Coalition OC explains: A. The importance of 340B savings to California CHCs ability to provide high- 1 HRSA requested input on these in the first paragraph of the RFI summary. Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS quality, affordable primary care, behavioral health, and dental care to their ~340,000 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in California, CHCs routinely rely on 340B savings to support services such as dental care, SUD treatment, mental health services, school-based health programs, care coordination, and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Californias CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high- cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS decade. Given these pressures, it is not surprising that many of our member CHCs have been forced to lay off staff, reduce staff hours, and reduce service lines. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025- 14619 Isabel Becerra President & Chief Executive Officer 600 City Parkway West, Suite 200, Orange, CA 92868 (714) 352-5990 CoalitionOC.org MEMBERS Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Dani Bryant, dbryant@coalitionoc.org Sincerely, Isabel Becerra President & Chief Executive Officer Coalition of Orange County Community Health Centers t
HRSA-2026-0001-1443Promise Community Health Center2026-04-14T04:00Z21,861 chars
See attached document for response. April 14, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Promise Community Health Center (Promise CHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 2008, it has been Promise CHCs mission to provide accessible, holistic health care that adapts to the needs of the community to improve the wellbeing of all persons. Last year we had the privilege of serving 6,618 patients in a total of 23,795 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are a vital part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. Summary of Recommendations: In short, Promise CHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Additionally, if HRSA chooses to proceed with a rebate pilot program, HRSA should select a start date for the implementation of the rebate model that is no sooner than January 1st, 2027, to allow CEs sufficient time to prepare to comply with program requirements. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Summary of Comments: In these comments, Promise CHC explains: A. The importance of 340B savings to Promise CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to our 4,478 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high- quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the limited access populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, Iowas CHCs routinely rely on 340B savings to support services such as offering sliding fee discounts on services reducing the overall cost of medications, maintaining access to dental and maternal health services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically at-risk patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, CHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. 4 CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it would not be surprising if CHCs were forced to reduce the extent of their sliding fee discounts and may have to cut back on the services they provide and lay off staff members. D. CHCs must be exempted from any rebate model due to their heightened risk to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 5 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments. Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a. Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and b. Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a. It is unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. 6 b. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) 7. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. If HRSA chooses to proceed with a rebate pilot program, we request that HRSA select a January 1st, 2027, start date to allow CEs time to prepare to comply with program requirements. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 7 Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Kendra Borchers at kborchers@promisechc.org. Sincerely, Kendra Borchers, PharmD Promise Community Health Center 33 4th Street NW Sioux Center, IA 51250 712-722-1700 ext. 475 kborchers@promisechc.org 8 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1444Rady Children's Health2026-04-14T04:00Z11,176 chars
On behalf of Rady Children's Health, I respectfully submit the attached response. April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: we appreciate the opportunity to respond to the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Southern California that unites the expertise of and Rady . With three hospitals, a growing network of primary and centers, is a trusted partner for families seeking safe, high-quality care. Nearly 60 percent of our patients are covered by Medicaid, making us particularly vulnerable to impending Medicaid program changes. From a pediatric hospital perspective, the 340B Drug Discount Program allows our hospitals to stretch scarce Medicaid dollars by allowing us to purchase outpatient drugs at lower prices, giving us opportunity to sustain care for the sickest kids in our communities. ly opposes implement a rebate model under the 340B program instead of maintaining the upfront discount program that has enabled access to lifesaving drugs to vulnerable populations. Currently, the 340B Drug Discount program gives eligible hospitals and clinics (covered entities) up-front discounts on outpatient drugs. To ensure compliance with the program requirements, covered entities are subject to annual recertification and manufacturer audits. Like covered entities, manufacturers are also subject to HRSA audits, but covered entities have no authority to audit manufacturers and there is no annual recertification process for them. the interests of 340B hospitals and drug companies when choosing a discount mechanism. Already, there is an imbalance of oversight. P a g e | 2 HRSA must prioritize the needs of covered entities to adhere to the spirit of the legislation - so Particularly as we brace ourselves for drastic reductions in Medicaid reimbursements, HRSA to preserve the upfront discount mechanism to stabilize our ability to maintain access to critical health care services to the children in our communities. In our response below, for purposes of estimating costs, we have assumed that any future rebate program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Information Collection Request. While the impact of the initial impact on pediatric hospitals may not be significant, our cost estimates will increase with the addition of more drugs approved for the rebate model. After all, more drugs and more drug companies means claims to submit, rebates to track and reconcile, up-front drug costs while we await our statutory discount, likely disputes over delays and denials, and therefore money will have available to spend on patient care and comprehensive health care services. Medicaid Carve-in Requirement The Medicaid program in California (Medi-Cal) 340B drugs for Medi-Cal patients. This means that while providers can choose whether to use 340B drugs to treat Medi-Cal patients, if they do so, the must follow strict billing and claims rules to prevent duplicate discounts. Once a provider elects to use a 340B drug, they must bill Medi-Cal at the 340B actual acquisition cost, plus a dispensing fee. This process adds additional administrative burden and dilutes the value of participating in the program. Adding a new included in the new model until after the manufacturer rebate has been received by the provider. Providers will also be expected to comply with the six-month timely filing requirement following the month of service, so if there is a delay in manufactures issuing a rebate, providers will be forced to forgo reimbursement for those drugs altogether. Particularly for covered entities in carve-in states, this proposed rebate model will have a significant impact on safety-net providers. High-Cost Drugs The 340B Drug Discount Program makes high-cost drugs more accessible. Pediatric hospitals -saving drugs on the market to treat rare diseases. For example, a single dose of some gene therapies has a full sticker price of over $3.2 million per dose. Through 340B, the therapy can be purchased for $700,000 less, making resources available for the purchase of additional drugs. If the program transitions to a rebate model, pediatric hospitals would be limited in their ability to make these therapies available, particularly in difficult financial environments. A drug P a g e | 3 rebate model will impact access to high-cost drugs for the sickest pediatric patients. Below are our detailed responses to the questions based on the information available: Administrative Costs Any rebate program will significantly increase administrative costs to . Already, nearly $2 million annually for staff, operations, technology and program administration to ensure compliance with an upfront discount program. A new rebate model will require new and additional resources and processes, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a pediatric health system, including adding at least one full-time equivalent employee to track compliance to a dual claims system, and at least $100,000 annual investment in a custom design platform identify, submit and track claims. Additional impacts include: Cashflow disruption: pay full price for 340B drugs, including high-cost therapies. This will interrupt our ability to purchase additional therapies to treat more patients and will delay reimbursement for services that are already paid under cost. More complex inventory and compliance requirements: Entities will have to invest in additional people, processes and technology to carefully track and monitor compliance with federal, state, and drug manufacture requirements which are not well aligned due to the added complexity this rebate model program introduces to the 340B program. It will become more challenging to ensure 340B-eligible dispensing complies with all requirements, avoid diversion, and prevent duplicate discounts. Medicaid reimbursement and policy complications: Changes in acquisition cost definitions may require adjustments to billing practices and compliance with state- specific rules. Already for California, the state has signaled reimbursement on claims with a 340B drug will be delayed until the rebate is issued, further delaying payment for providing Medi-Cal services. Problems With the Beacon IT Platform Information Technology platform to operate the program. In the few weeks we had to prepare for the start of that program, we identified serious concerns with Beacon with significant and long-term implications to the safety and security of patient and provider data. For example, under the program, Beacon will have unrestricted, perpetual, and irrevocable license to use and modify covered entity data even after termination. This will P a g e | 4 allow Beacon to share or commercialize de-identified or aggregated data without compensation or approval, at the same time, regardless of the magnitude of harm or financial loss. Despite covered entity concerns, t - on accuracy, performance, or uptime. Covered Entities must indemnify Beacon for a broad range of claims, including data submission issues. The engagement was also very one-sided, giving Beacon the ability modify terms at any time and continued use automatically accepts new terms. Beacon can terminate access without cause, with no guarantee of data return or continuity. It also gives Beacon the ability to monitor all system activity and share information with manufacturers or agencies without providing covered entities reciprocal audit rights to understand how their data is used. All disputes must occur exclusively in Illinois, with a class- action waiver limiting legal recourse. Covered entity concerns resemble a Takings Clause issue because Beacon requires covered entities to use its platform to access 340B rebates while permanently surrendering broad, irrevocable rights to their proprietary data without compensation. The Takings Clause found in the Fifth Amendment to the U.S. Constitution prohibits the government from taking private property for public use without just compensation. Although Beacon is not a government entity, the structure mirrors an unconstitutional condition: compelling a transfer of a valuable property interest as the price of participating in a federally linked program. reevaluate their engagement with Beacon to safeguard patient and provider data and ensure a level playing field for providers and manufacturers. Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. P a g e | 5 Conclusion For all of these reasons, respectfully submits that the costs of Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Rady and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a rebate program and many other critical details ( ., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the patients who rely on the 340B Program. Please contact me or Clara Evans, Vice President of Government Affairs at 858.966.8206 or at cevans@rchsd.org if you have questions. Sincerely, Lynn H. Grieves Chief Compliance Officer
HRSA-2026-0001-1445Monica Heineman · Cozad, NE, United States2026-04-14T04:00Z9,957 chars
Please, see attached letter HEALTH SYSTEMS The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, l am writing on behalf of Cozad Community Hospital, a 20-bed Critical Access Hospital located in Cozad, Nebraska. We appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information regarding a potential 340B Rebate Model Pilot Program. Cozad Community Hospital strongly opposes replacing the longstanding upfront 340B discount structure with a rebate-based model. The current discount-at- purchase system has operated effectively for decades and allows rural hospitals like ours to reliably use 340B savings to expand patient services. A rebate mechanism would create significant administrative burden, increase operational costs, and introduce financial riskultimately reducing the resources available for patient care. The purpose of the 340B program is to allow covered entities to stretch scarce federal resources as far as possible to reach more patients and provide more comprehensive services. Preserving the upfront discount model remains the most effective way to achieve that goal. As a small Critical Access Hospital, our administrative resources are limited. Our 340B compliance activities are carefully structured around the current upfront discount model. Transitioning to a rebate-based system would require new administrative workflows and ongoing monitoring that our current staffing structure was not designed to support. If a rebate pilot were implemented for up to 25 drugs, including those negotiated under the Medicare Drug Price Negotiation Program for 2026 and 2027, our hospital anticipates the following incremental costs. One-time startup costs are Cozad Community Hospital 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 Cozad Community Medical Clinic 1803 Papio Lane Cozad, NE 69130 Ph. (308) 784-3535 Fx. (308) 784-3534 Cozad Community Physical Therapy 303 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2231 Fx. (308) 784-3449 Cozad Community Hospital Foundation 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 We treat you like family. HEALTH SYSTEMS estimated at $10,000-$20,000, including IT configuration and reporting modifications, workflow redesign, policy updates, and stafftraining. Ongoing administrative activities under a rebate model would include identifying and validating rebate-eligible claims, tracking and reconciling expected versus received rebates, investigating and appealing denied claims, and maintaining additional compliance documentation. We estimate these activities would require approximately 0.25-0.5 full-time equivalent administrative support, representing approximately $30,000-$60,000 annually in salary and benefits. Cozad Community Hospital currently utilizes MacroHelix as our third-party administrator to support 340B program compliance. While there have not been additional charges for updating data feeds at this time, the operational workload associated with tracking payments and addressing denials would still require significant internal stafftime. For a small rural hospital, these new costs represent a substantial portion of 340B savings. Our hospital does not currently maintain sufficient staffing levels to support the additional administrative complexity of a rebate-based system. Staff would be responsible for validating rebate-eligible claims, tracking and reconciling rebate payments, investigating and appealing denied rebates, and supporting additional compliance documentation. HRSA's estimate that this process would require approximately five hours per week appears to significantly underestimate the operational workload. Even a small number of rebate-eligible drugs could generate numerous transactions each month, all requiring monitoring and reconciliation. Because our hospital operates with a small administrative team, this workload would likely require reallocation of staff time away from patient-care-supporting functions or the addition of staff, increasing costs and reducing efficiency. Cozad Community Hospital's information systems were implemented to support the current upfront 340B purchasing model. While our systems efficiently manage compliance today, a rebate model would shift the burden to claims management and payment reconciliation, creating substantial new work. Hospitals would be required to identify rebate-eligible claims, validate submitted data, track claims, reconcile payments, and investigate denied or delayed rebates. For a small Critical Access Hospital, these additional processes represent a meaningful operational burden. Cozad Community Hospital 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 Cozad Community Medical Clinic 1803 Papio Lane Cozad, NE 69130 Ph. (308) 784-3535 Fx. (308) 784-3534 Cozad Community Physical Therapy 303 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2231 Fx. (308) 784-3449 Cozad Community Hospital Foundation 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 We treat you like family. HEALTH SYSTEMS Under the current 340B structure, hospitals purchase medications at the discounted price at the time of purchase. A rebate model would require hospitals to purchase drugs at full price and wait for reimbursement, effectively forcing hospitals to provide interest-free loans to manufacturers. Even with a short turnaround time, hospitals would still need to absorb the upfront cost difference. For small rural hospitals with limited operating margins, even temporary exposure to high-cost medications creates financial risk. Payment delays or disputes could result in significant outstanding balances while awaiting reimbursement. A rebate model could also affect our abilityto stock certain high-cost medications. If required to purchase these at full price while waiting for rebates, we may need to reconsider stocking some therapies due to financial risk. For rural patients, this could mean delays in treatment or traveling longer distances for care. 340B savings are critically important to the financial stability of small rural hospitals like ours. Cozad Community Hospital uses these savings to enhance patient care infrastructure, expand medication affordability programs, strengthen clinical pharmacy services, and sustain hospital operations while preserving access to local pharmacy services. The estimated $30,000$60,000 in additional annual administrative costs associated with a rebate model represents a meaningful portion of our 340B savings. Redirecting those funds to administrative requirements would reduce the resources available to support patient care. In rural communities like Cozad, hospitals and local pharmacies often represent the only accessible points of care, meaning financial pressures are not absorbed they are felt directly by patients. Cozad Community Hospital and other hospitals like us operate with limited margins, so even incremental cost increases can have immediate and significant consequences. A rebate model would impose a disproportionate burden on Critical Access Facilities, potentially jeopardizing the ability to maintain essential services, sustain operations, and ensure continued access to medications. This level of risk stands in stark contrast to the relatively modest 5.9 percent impact of 340B discounts, as reported by Matrix Global Advisors (June 2025), when considered against the approximately $1.6 to $1.74 trillion in global pharmaceutical manufacturer revenue, based on publicly available industry estimates. Cozad Community Hospital 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 Cozad Community Medical Clinic 1803 Papio Lane Cozad, NE 69130 Ph. (308) 784-3535 Fx. (308) 784-3534 Cozad Community Physical Therapy 303 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2231 Fx. (308) 784-3449 Cozad Community Hospital Foundation 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 We treat you like family. HEALTH SYSTEMS Since its creation, the 340B program has consistently operated through upfront discounts rather than post-sale rebates. Hospitals have structured their operations, staffing, and financial planning around this long-standing model. A shift to a rebate mechanism would disrupt these established systems and impose substantial new costs without clear benefit. Cozad Community Hospital 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 Cozad Community Medical Clinic 1803 Papio Lane Cozad, NE 69130 Ph. (308) 784-3535 Fx. (308) 784-3534 Cozad Community Physical Therapy 303 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2231 Fx. (308) 784-3449 For these reasons, Cozad Community Hospital respectfully urges the Health Resources and Services Administration to maintain the existing upfront discount structure and not implement a rebate model pilot program. We appreciate the opportunity to provide input on this important issue and welcome continued dialogue to ensure that the 340B program continues to support the patients and communities who rely on it. Sincerely, Monica Heineman, PharmD Director of Pharmacy Cozad Community Hospital Phone: 308-784-2261 ext 1289 Fax: 308-784-2664 Cozad Community Hospital Foundation 300 E. 12th St. P.O. Box 108 Cozad, NE 69130 Ph. (308) 784-2261 Fx. (308) 784-4691 We treat you like family.
HRSA-2026-0001-1446El Rio Health2026-04-14T04:00Z116,200 chars
See attached file for comments from El Rio Health on proposed 340b rebate pilot. April 7, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of El Rio Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: El Rio Health anticipates an average loss of 16% from entity-owned pharmacy operations and 33% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For El Rio in particular, this means it will impact: El Rio health pharmacies dispensed over 750,000 340B prescriptions in 2025 and served over 130,000 patients in the Tucson area. Our current administrative cost for 340B monitoring is $96,000 per year. It would at least double to monitor the rebates The 340B revenue is used for unreimbursed services, such as clinical pharmacy visits, free prescription home delivery and mail, and a host of other patient services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description 5 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025 El Rio Health provided $18,351,329 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: El Rio Health anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, El Rio Health anticipates an increase of $10,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 El Rio Health will need an additional 0.5 FTE to meet the reporting needs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours monthly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. El Rio Health urges HRSA to require uniformity among eligible 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 130,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $300,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 162 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 10 different pharmacy locations to ensure rebates are paid correctly. 7 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in all of Northern Arizona and Pima County in Southern Arizona with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. El Rio Health uses a sliding fee scale based on the 340B acquisition cost plus a dispensing fee. This ensures the 340B discount is passed directly to the patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $11.98M to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $3.96M to purchase these same drugs at the 340B ceiling price. This represents a $303% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, El Rio Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our clinical pharmacy program that treats our most vulnerable patients with diabetes. Operating Hours: We anticipate needing to reduce our clinic hours and possibly closing some rural pharmacies, specifically impacting healthcare across rural Northern Arizona. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a direct patient care employee, such as a clinical pharmacist. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12,000 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. El Rio Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. 11 Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, El Rio Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $15,000 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. El Rio Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $882,500 in 2026 and $668,000 in 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize financial reserves or take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $847,000 annuallyfunds that are currently dedicated to key programs, such as clinical pharmacy services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on El Rio Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays El Rio Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without 12 providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $401,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 14 Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 17 Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 23 Internal NACHC survey data 18 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 19 Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 20 Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. 28 42 U.S.C. 256b(a)(1) 29 Id. 30 42 U.S.C. 256b(a)(1) 21 The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 22 The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 23 Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 39 42 C.F.R. 447.502 24 In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 26 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. 45 32 C.F.R. 199.21(q)(2)(iii)(E) 27 D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 28 undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 29 the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 59 42 U.S.C. 256b(a)(5)(B) 30 statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 31 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 32 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion El Rio Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. El Rio Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. El Rio Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at clintonk@elrio.org or 520-601-0607. Sincerely, Clinton Kuntz President & CEO El Rio Health
HRSA-2026-0001-1447Madison Community Hospital d/b/a Madison Regional Health System2026-04-14T04:00Z12,492 chars
See attached document. 323 SW 10th St. | Madison, SD 57042 Phone: 605-256-6551 Fax: 605-256-6469 www.madisonregionalhealth.org The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Madison Community Hospital d/b/a Madison Regional Health System (MRHS), we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on MRHS that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients, sustaining vital healthcare services in our rural communities, and the ability to provide more comprehensive services. Preserving the upfront discount mechanism, which MRHS has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. MRHS has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that MRHS can spend on access to patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require MRHS to spend significant sums on new administrative costs. When we chose to participate in the 340B program, MRHS understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Additional contract staff to review program compliance and rebate accuracy both for incoming and outgoing information. o Estimating: $10,000/month Additional billing and Pharmacists time for challenging denials. o Estimating: $10,000/month Costs incurred from our contract pharmacy to implement the rebate model are unknown at this time but would expect to be in the tens of thousands. Rebate models could further decrease reimbursement due to manufacturer maximum fair price (MFP). Due to the MFP rule our contract pharmacies may eliminate these products and exclude them from our contract all together. Instead of immediate savings, providers must pay higher up-front drug prices which will ultimately affect cash flow until manufacturer rebates are processed. In the event there are issues with rebate denials this will further delay/impact cash flow. Due to additional administrative burden related to rebates we would have to add FTEs in both our Pharmacy and Finance departments. o Estimating: $70,000/year for Pharmacist o Estimating: $30,000/year for Finance Staffing Impacts Under a Potential 340B Rebate Program. MRHS does not currently have the staff needed to comply with a Rebate Program. Due to additional administrative burden related to rebates we would have to add staff members in both our Pharmacy and Finance departments. o Estimation: $70,000/year for Pharmacist (20 hours week) Responsible for auditing data outflow, patient and drug eligibility o Estimation: $30,000/year for Finance (20 hours week) Responsible for reconciling rebate payments to claims and working claim denials Advance notice to hiring any additional staff for this program would be a minimum of 6 months. Due to the rural nature of our community, finding the staff with experience in the 340b program is almost impossible, therefore adding to the delay of having to educate/train a new staff member delaying this at an estimate of another 12 months. HRSAs estimate of only 5 hours needed per week in addition to work for this new rebate model is very underestimated because the volume of dispensations with these products will have a significant effect on the number of hours needed for this program. The reconciliation process from ordering the product to receiving the rebate will have to be very detailed and thoroughly monitored. In a rural community, it will be difficult to find staff members well skilled in the 340b program. As a healthcare provider our experience with having to file insurance claims and the amount of denials that are received create burdensome administrative work and we would foresee that this would be a significant issue with a rebate program as well. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. MRHS has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. At a minimum any new EHR interfaces would require a minimum of $25,000 from our EHR vendor. This cost is a base fee and does not include any additional fees from the vendor. This $25,000 would be a one-time fee along with a monthly support and service fee. At this time, the monthly support and service fees are unknown but estimated at $2,000 per month. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We utilize 340b management software for maintaining reports and the information submitted to the 340b program. The additional fees from our vendor for the 340b rebate model are unknown at this time. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force MRHS to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. While a 10 day turn around on receiving rebates would not put us at financial risk of violating our debt covenants, the impact of the denials, which we believe will be significant in numbers, will delay payment and put us at potential risk for lowering our days cash on hand, and not meeting our debt covenants. The delay in receiving rebates and delaying our cash, may potentially delay payments to our drug wholesaler. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that MRHS will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Due to any additional administrative costs our organization would be required to make budget cuts elsewhere with either service reductions/closures or staffing cuts in areas that will affect patient care. This may force our organization to make difficult decisions that could eliminate service lines that will negatively impact the communities and the patients we serve. 340b dollars have allowed rural communities to sustain and provide vital life saving services to our communities. We cannot continue to maintain these services with the constant cuts in programs such as the 340b drug discount program. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. MRHS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. We rely on the 340B savings program during our budgeting process as we project cash-on-hand, debt covenant requirements, as well our overall operating budget including patient care services and staffing needs and abilities. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. Our facility rushed to setup an account with Beacon, however, with the delay in the rollout of the rebate program we have not had much experience with the Beacon platform, therefore cannot comment on any issues with the platform or the potential impact to MRHS. For all of these reasons, MRHS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow MRHS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the services provided by covered entities participating in the 340B Program. Sincerely, Teresa Mallett Teresa Mallett, MHA, RHCEOC CEO Madison Regional Health System, Madison, SD
HRSA-2026-0001-1448Great Salt Plains Health Center, Inc.2026-04-14T04:00Z46,447 chars
See attached file(s) 405 S. Oklahoma Ave Cherokee, OK 73728 580-596-2800 April 6, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Great Salt Plains Health Center, Inc. (GSP Health), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The GSP Health experience with the 340B Program is about potential loss of savings, but more importantly about access to medications needed by our low-income patients. Since 2008, we have worked exclusively with contract pharmacies in our communities. Our patients live and work in a very rural part of Northwest Oklahoma. In most cases, our rural communities can only support one pharmacy in these communities. We have made a conscious effort to contract with those community retail pharmacies to dispense our 340B medications, in order to support those pharmacies and keep them in operation. Unfortunately, in the past few years we have already seen a decline in the availability of medications from contract pharmacies due to actions taken by pharmaceutical manufacturers including shipping restrictions. Those difficulties include: GSP Health patients without access to our 340B medications from a contract pharmacy Contract pharmacy closing due to low volume when 340B business was not an option Lack of transportation for low-income patients to travel long distances to a contract pharmacy Loss of savings from contract pharmacies which supports critical services If the 340B Rebate Program were to be implemented at GSP Health: Contract Pharmacies will not offer the drugs included in the rebate program to our patients There are few alternatives to our patients if rebate program drugs are not available There will be no options for critical medications needed for our low-income patients with no insurance coverage. Health outcomes for low-income patients will unnecessarily decline GSP Health is in the process of opening our first in-house pharmacy. This decision was made in 2024 as an effort to improve medication access to our patients. The access difficulties were a direct result of shipping restrictions to contract pharmacies. If the rebate model is allowed to continue, it will impact GSP Health as follows: Pharmacy revenue has been budgeted to help cover critical services. The rebate model will cause unnecessary in-house pharmacy expenses which will cause a decrease in net savings. Dental services at GSP Health net -$750,000 annually. If the rebate model is allowed to continue, we will likely cut dental services as a result of less net savings in the pharmacy than budgeted. Unfortunately, most of our dental patients cannot find the care they need from any other dentist in the area. In order to provide dental services we must have revenue from other sources which are primarily from 340B savings. One additional in-house pharmacy employee will be required to perform administrative duties associated with the 340B Rebate Program. These wages and benefits will decrease the net pharmacy gain by approximately $75,000 annually. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For GSP Health in particular, this means it will impact: More than 13,000 patients in Northwest Oklahoma Decrease in net 340B savings by $500,000 annually Decrease in dental services which net -$750,000 annually We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Great Salt Plains Heath Center provided $1,072,648 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Great Salt Plains Heath Center anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Great Salt Plains Heath Center anticipates an increase of $50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As mentioned above, Great Salt Plains Health Center will need 1 to 2 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on 7 Internal NACHC assessment (99 responses). 8 Ibid. discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Great Salt Plains Health Center anticipates 20 hours per week will be required to report, monitor, and refute denials of 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Great Salt Plains Heath Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 15,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to exceed $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 75 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 75 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rural Northwest Oklahoma with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Great Salt Plains Health Center offers 340B-discounted pricing to patients at or below 200% of the Federal Poverty Level. This enables predictable, low-cost access to essential medications at the point of sale. Any delay or uncertainty in 340B savings under a rebate-based model could limit our ability to consistently provide these reduced prices. Additionally, if manufacturers were to deny a claim under the rebate model, we will not be able to recoup funds from patients retroactively. This leads to additional loss of the ability to cover the cost of medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. As we continue to navigate the difficult process of opening our first in-house pharmacy, we are attempting to anticipate the impact of the 340B Rebate model. Based on our organizations limited data, we estimate a cost of 400% more than budgeted in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Great Salt Plains Heath Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as two full time dental clinics operating at a $750,000 annual loss. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Full Time Community Health Worker, a Full Time Patient Insurance Navigator, or a Full Time Dental Assistant. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1500 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Great Salt Plains Heath Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Great Salt Plains Heath Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend dramatically. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize our limited financial reserves or establish a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $25,000 annually funds that are currently dedicated to medical, dental, and behavioral health services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Great Salt Plains Heath Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Great Salt Plains Heath Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $50,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Great Salt Plains Heath Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Great Salt Plains Heath Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Great Salt Plains Heath Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at tstarkey@gsphealth.org Sincerely, Tim Starkey, MBA, FACHE Chief Executive Officer Great Salt Plains Heath Center
HRSA-2026-0001-1449Valley Community Healthcare2026-04-14T04:00Z11,785 chars
Please see file attached for our comments. April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Valley Community Healthcare, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program. The 340B program is essential to our ability to provide affordable medications and comprehensive services to underserved populations. However, the proposed rebate model introduces significant financial, operational, and patient care risks that would destabilize our organization and others like us. Summary of Impact to Valley Community Healthcare Loss of 340B Savings: Valley Community Healthcare anticipates a loss of over $200,000 annually due to WAC purchasing, delayed rebates, and administrative burden. Increased Upfront Drug Costs: Estimated increase from $34,072 (340B) to $285,000 (WAC) for selected drugsan 835% increase in upfront capital. Staffing Impact: Additional 12 FTEs required to manage reconciliation and compliance. Vendor Costs: Estimated $50,000 increase in external vendor and system costs. Reduced Patient Support: Decreased ability to provide sliding fee discounts and zero-cost medications. I. Request for Exemption of CHCs Valley Community Healthcare strongly urges HRSA to exempt Community Health Centers (CHCs) from the rebate model. The proposed shift from upfront discounts to retrospective rebates fundamentally alters the structure of the 340B program and places financial risk on safety-net providers. Valley Community Healthcare serves approximately 21,000 patients, many of whom are uninsured or underinsured, with 11% experiencing housing instability. 340B savings are directly reinvested into patient care. Requiring upfront WAC purchasing would constrain cash flow and force reductions in essential services. II. Patient Access and Clinical Impact The rebate model creates immediate barriers to medication access by eliminating upfront discounted pricing. Patients may face delays, therapy changes, or medication abandonment due to cost uncertainty Chronic disease management (e.g., diabetes, cardiovascular disease) will be significantly impacted Loss of access to high-cost therapies (e.g., anticoagulants, SGLT2 inhibitors, behavioral health medications) will increase hospitalizations and adverse outcomes For Valley Community Healthcare patients, many of whom rely on sliding fee discounts, this model makes medications operationally unaffordable at the point of care. III. Financial and Operational Burden Cash Flow Constraints Under the rebate model, Valley Community Healthcare must: Purchase medications at full WAC pricing Wait 4085 days for rebate reconciliation depending on submission timelines Absorb financial risk for denied or delayed rebates This creates: Liquidity challenges Risk of exceeding wholesaler credit limits Potential need for loans or lines of credit Programmatic/Community Impact To offset these costs, Valley Community Healthcare may have to take the following actions: Reduce availability of primary care services, including dental Reduce current expanded hours which include evenings and Saturdays Sustain insufficient staffing to meet patient demand Incur reduced access for the most vulnerable populations IV. Administrative Complexity The rebate model introduces duplicative and unnecessary administrative burden: Tracking and reconciling rebates across multiple manufacturers and pharmacies Managing increased TPA fees and system upgrades Monitoring claims across 75 contract pharmacy locations Converting manual and paper-based records into electronic submission formats Valley Community Healthcare estimates: 12 additional FTEs required Significant increase in compliance, IT, and reconciliation workload Additionally, contract pharmacy partners may withdraw due to increased complexity, reducing patient access to medications across Los Angeles County. V. Risk of Rebate Denials and Delays The rebate model shifts financial risk to providers: Rebates may be denied without transparent justification Payment timelines lack enforceable accountability Even a 5% denial rate would result in substantial financial loss Without standardized rules, Valley Community Healthcare is effectively providing an interest-free loan to manufacturers, undermining program intent. VI. Clinic-Administered Drugs (CAD) Concerns Including clinic-administered drugs would impose disproportionate burden: CHCs often use bundled PPS billing, limiting claim-level data Significant investment required for new software and eMAR systems Minimal risk of duplicate discounts already exists Valley Community Healthcare strongly recommends excluding CADs from any rebate model. VII. Recommended Alternatives Rather than implementing a rebate model, HRSA should consider: A Neutral Claims Clearinghouse (NCC) to address duplicate discounts Standardized national processes that: o Preserve upfront 340B pricing o Reduce administrative burden o Improve accuracy and transparency Conclusion The proposed 340B Rebate Model Pilot Program would have severe financial and operational consequences for Valley Community Healthcare. It would: Reduce access to affordable medications Strain already limited financial resources Increase administrative complexity Undermine the intent of the 340B program Valley Community Healthcare respectfully urges HRSA to exempt CHCs from the rebate model and pursue alternative solutions that protect patient access and program integrity. Thank you for the opportunity to provide input. Please contact me with any questions. Sincerely, Anita Zamora Anita Zamora RN, CNS, MSN President & Chief Executive Officer Valley Community Healthcare 6801 Coldwater Canyon Avenue North Hollywood, CA 91605 April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Community Healthcare, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program. The 340B program is essential to our ability to provide affordable medications and comprehensive services to underserved populations. However, the proposed rebate model introduces significant financial, operational, and patient care risks that would destabilize our organization and others like us. Summary of Impact to Valley Community Healthcare Loss of 340B Savings: Valley Community Healthcare anticipates a loss of over $200,000 annually due to WAC purchasing, delayed rebates, and administrative burden. Increased Upfront Drug Costs: Estimated increase from $34,072 (340B) to $285,000 (WAC) for selected drugsan 835% increase in upfront capital. Staffing Impact: Additional 12 FTEs required to manage reconciliation and compliance. Vendor Costs: Estimated $50,000 increase in external vendor and system costs. Reduced Patient Support: Decreased ability to provide sliding fee discounts and zero-cost medications. I. Request for Exemption of CHCs Valley Community Healthcare strongly urges HRSA to exempt Community Health Centers (CHCs) from the rebate model. The proposed shift from upfront discounts to retrospective rebates fundamentally alters the structure of the 340B program and places financial risk on safety-net providers. Valley Community Healthcare serves approximately 21,000 patients, many of whom are uninsured or underinsured, with 11% experiencing housing instability. 340B savings are directly reinvested into patient care. Requiring upfront WAC purchasing would constrain cash flow and force reductions in essential services. II. Patient Access and Clinical Impact The rebate model creates immediate barriers to medication access by eliminating upfront discounted pricing. Patients may face delays, therapy changes, or medication abandonment due to cost uncertainty Chronic disease management (e.g., diabetes, cardiovascular disease) will be significantly impacted Loss of access to high-cost therapies (e.g., anticoagulants, SGLT2 inhibitors, behavioral health medications) will increase hospitalizations and adverse outcomes For Valley Community Healthcare patients, many of whom rely on sliding fee discounts, this model makes medications operationally unaffordable at the point of care. III. Financial and Operational Burden Cash Flow Constraints Under the rebate model, Valley Community Healthcare must: Purchase medications at full WAC pricing Wait 4085 days for rebate reconciliation depending on submission timelines Absorb financial risk for denied or delayed rebates This creates: Liquidity challenges Risk of exceeding wholesaler credit limits Potential need for loans or lines of credit Programmatic/Community Impact To offset these costs, Valley Community Healthcare may have to take the following actions: Reduce availability of primary care services, including dental Reduce current expanded hours which include evenings and Saturdays Sustain insufficient staffing to meet patient demand Incur reduced access for the most vulnerable populations IV. Administrative Complexity The rebate model introduces duplicative and unnecessary administrative burden: Tracking and reconciling rebates across multiple manufacturers and pharmacies Managing increased TPA fees and system upgrades Monitoring claims across 75 contract pharmacy locations Converting manual and paper-based records into electronic submission formats Valley Community Healthcare estimates: 12 additional FTEs required Significant increase in compliance, IT, and reconciliation workload Additionally, contract pharmacy partners may withdraw due to increased complexity, reducing patient access to medications across Los Angeles County. V. Risk of Rebate Denials and Delays The rebate model shifts financial risk to providers: Rebates may be denied without transparent justification Payment timelines lack enforceable accountability Even a 5% denial rate would result in substantial financial loss Without standardized rules, Valley Community Healthcare is effectively providing an interest-free loan to manufacturers, undermining program intent. VI. Clinic-Administered Drugs (CAD) Concerns Including clinic-administered drugs would impose disproportionate burden: CHCs often use bundled PPS billing, limiting claim-level data Significant investment required for new software and eMAR systems Minimal risk of duplicate discounts already exists Valley Community Healthcare strongly recommends excluding CADs from any rebate model. VII. Recommended Alternatives Rather than implementing a rebate model, HRSA should consider: A Neutral Claims Clearinghouse (NCC) to address duplicate discounts Standardized national processes that: Preserve upfront 340B pricing Reduce administrative burden Improve accuracy and transparency Conclusion The proposed 340B Rebate Model Pilot Program would have severe financial and operational consequences for Valley Community Healthcare. It would: Reduce access to affordable medications Strain already limited financial resources Increase administrative complexity Undermine the intent of the 340B program Valley Community Healthcare respectfully urges HRSA to exempt CHCs from the rebate model and pursue alternative solutions that protect patient access and program integrity. Thank you for the opportunity to provide input. Please contact me with any questions. Sincerely, Anita Zamora Anita Zamora RN, CNS, MSN President & Chief Executive Officer Valley Community Healthcare 6801 Coldwater Canyon Avenue North Hollywood, CA 91605
HRSA-2026-0001-1450Project Health, Inc.2026-04-14T04:00Z42,441 chars
See attached file(s) Project Health, Inc. Address: 1425 S US 301, Sumterville, FL 33585 Phone Number: 888-298-5510 Administration Fax: 352-793-6269 Medical Fax: 352-793-9558 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Project Health, Inc. (PHI), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Here is what we know, in CY2025, PHI cared for just over 26,000 patients where over 70% of those patients were either uninsured or covered by Medicaid/Medicare. The 340B program is foundational to PHIs ability to continue to serve these most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average annual loss of $500,000 $750,000 from entity-owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In CY2025, Project Health, Inc. provided $3,035,211 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Staffing Impact: Project Health, Inc. anticipates needing 1.0 to 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Project Health, Inc. anticipates an increase of $25,000 to $50,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Project Health, Inc. anticipates needing 1.0 to 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PHI anticipates a cost of $80,000 to $160,000 in salary and fringe for these additional FTEs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. PHI believes anywhere from 15-30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Project Health, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. PHI believes an investment of $15,000 to $20,000 may be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which served just over 26,000 patients in CY2025, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,000 to $200,000 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs of $10,000 to $15,000 to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20-40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with more than 50 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across +50 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,014,925 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $162,281 to purchase these same drugs at the 340B ceiling price. This represents a 525% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Project Health, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we could be forced to scale back services, such as Adult Dentistry, Podiatry, and Case Management. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical and support staff. PHI will not be able to expand our Enabling Services as we hoped given the workforce requirements now being called on by this Rebate Model Pilot. For example, venturing into Community Health Workers who could assist the community in navigating our services Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5,059 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Project Health, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Increased Upfront Costs: PHI estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $853,598. If we account for the additional drugs that will be on the MFP list come 2027 and 2028, the increase in upfront costs now rises to $2,871,225 annually. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize our limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Project Health, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Project Health, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $101,715. When we consider the drugs that will be on the MFP list for 2027 and 2028, this 10% denial rate results in a net annual loss of $436,013. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Project Health, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Project Health, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Project Health, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact PHIs Chief Strategy Officer, John M Sivon at jsivon@telmedical.com. Sincerely, Vicki Wynns, CEO Project Health, Inc.
HRSA-2026-0001-1451Christ Community Health Services Augusta2026-04-14T04:00Z58,019 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Christ Community Health Services Augusta, Inc. 340B ID CHC24172-00 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) N Contract Pharmacies (Y/N) Y List TPA Vendors RxPreferred, Walgreens, Wellpartner Contact Name Dr. Robert Campbell Contact Email drc@christcommunityaugusta.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 9,500 contract pharmacy 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $1.5M in administrative 340B cost for contract pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for current contracting include, IT systems, third-party vendors, compliance consultants, and internal financial controls. These costs are variable based on the evolving complexity of the 340b program requirements determined by manufacturers. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 23 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 23 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 23 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 23 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 23 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 23 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 23 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 23 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 23 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 10 of 23 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Page 11 of 23 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4. Data Collection By Covered Entities 3. Rebate Denials Process Page 12 of 23 340B Rebate Intake Form 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 13 of 23 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 14 of 23 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 15 of 23 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 16 of 23 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 17 of 23 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 18 of 23 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 19 of 23 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 20 of 23 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 21 of 23 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 22 of 23 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 23 of 23
HRSA-2026-0001-1452Mitchell Berger · Rockville, MD, United States2026-04-12T04:00Z5,772 chars
Dear Ms. Britton: I write to make the following comments concerning this RFI and HRSAs proposed 340B Rebate Model Pilot program. Specifically, I urge HRSA as part of rebate model program changes, if implemented, to take specific steps to support mental health and substance use disorder patients, programs and providers. Please note that the views expressed are mine alone and not those of an agency, organization or other individual(s). Full comment below. Sincerely, Mitchell Berger Page1 To: Chantelle Britton, Director, Office of Pharmacy Affairs (OPA), Office of Special Health Initiatives, HRSA From: Mitchell Berger, (comments made in personal capacity), mazruia@hotmail.com. 4.12.26 Re: Request for Information: 340B Rebate Model Pilot Program [HRSA-2026-0001-0001] https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information- 340b-rebate-model-pilot-program Dear Ms. Britton: I write to make the following comments concerning this RFI and HRSAs proposed 340B Rebate Model Pilot program. Specifically, I urge HRSA as part of rebate model program changes, if implemented, to take specific steps to support mental health and substance use disorder patients, programs and providers. Please note that the views expressed are mine alone and not those of an agency, organization or other individual(s). While this topic is controversial and HRSA is trying to balance many complex policy and legal considerations, many 340B hospitals and clinics (e.g., federally qualified health centers) provide significant behavioral health care to low-income populations, including children and adolescents and those in rural areas.1 For instance, in a recent report the HHS Office of Inspector General observed that HRSA-funded clinics are using 340B contract pharmacies to reduce the cost of drugs used for treatment with MOUD [medications for opioid use disorder].2 HRSA-funded Ryan White clinics also may play a major role in providing behavioral health care to persons with HIV/AIDS who have co-occurring behavioral health conditions. One step HRSA could take is requiring an impact analysis performed by a third-party prior to implementing model rebate changes assessing how inclusion of any medications used in substance use disorder or mental health treatment may impact patient access, both to the medications themselves as well as other services such as counseling or peer support provided by 340B providers. While the proposed pilot did not include medications for mental health or substance use disorders, such medications eventually could be included if the pilot is fully scaled and implemented. Privacy and confidentiality guardrails also will be important. While HRSA in August 2025 appropriately recognized the importance of complying with the Health Insurance Portability and Accountability Act and and any other applicable privacy and data security laws, federal Confidentiality of Substance Use Disorder Patient Records requirements and analogous state/territorial laws3 would be especially important for behavioral health patients (IT platforms used for this program should limit data collection to the minimum information necessary to 1 Analysis of 340B Disproportionate Share Hospital Services to Low-Income Patients March 12, 2018, L&M Policy Research, LLC prepared for 340B Health, https://www.340bhealth.org/files/340B_Report_03132018_FY2015_final.pdf 2 Most Health Centers Provide Some Behavioral Health Services to Patients With Substance Use Disorder, Despite Facing Challenges That Limit Comprehensive Treatment, August 2025, https://oig.hhs.gov/documents/evaluation/10903/OEI-BL-22- 00520.pdf 3 https://www.cdii.ca.gov/compliance-and-policy/state-health-information-guidance-shig/ Page2 accomplish program purposes and ensure use of a Part-2 compliant consent before claims are submitted for a rebate.4 Behavioral health patients also could be supported by potentially exempting from these rebate programs certain providers and clinics based on low numbers of staff (e.g., 50 or fewer staff members) or operating margins (2-3 percent) as some have suggested. Categorical exemptions for programs such as federally qualified health centers, rural health centers and hospitals and Ryan White programs also could be considered. Collaboration and communication with behavioral health patients, family members/caregivers, agencies, providers and other organizations also will be essential. Though the docket comments thus far do not reflect major emphasis on behavioral health, some relevant comments have been submitted (https://www.regulations.gov/document/HRSA-2026- 0001-0001). Accordingly, I urge HRSA to include federal/state/tribal/territorial behavioral health agencies, behavioral health professional associations, patient and consumer advocates and organizations and others in its outreach and communication efforts about this program and to seek input from these entities and others on how changes may impact behavioral health patients, family/caregivers and providers. Sincerely, Mitchell Berger Note: I am submitting these suggestions in my personal/private capacity. Please note that the views expressed are mine only and not those of an agency organization or other individual(s). 4 https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program; https://www.hhs.gov/hipaa/part-2/index.html; https://www.nachc.org/policy-advocacy/policy- priorities/340b-drug-pricing-program/340b-rebate-model-pilot-program) Digitally signed by Mitchell Berger DN: cn=Mitchell Berger, c=US, email=mazruia@hotmail.com Date: 2026.04.12 19:45:53 -04'00' Mitchell Berger
HRSA-2026-0001-1453NEW Health Program Association2026-04-14T04:00Z6,006 chars
Please see attached file Comment on HRSA RFI 340B Rebate Pilot NEW Health Programs Association appreciates the opportunity to provide comments on HRSAs Request for Information regarding the proposed 340B Drug Pricing Program rebate pilot. NEW Health is a small, rural Federally Qualified Health Center (FQHC) and serves as the sole safety-net provider of medical, dental, and pharmacy services in our region. Our organization exists to meet the needs of a medically underserved population that would otherwise face significant barriers to care. While we support HRSAs mission to enhance program integrity and transparency, we have significant concerns that a rebate-based purchasing model would create severe and immediate financial harm for small rural FQHCs like ours and, in turn, reduce access to essential services for vulnerable patients. 1. Immediate and Severe Cash Flow Risk for Small Rural FQHCs A rebate-based 340B model would fundamentally shift the financial mechanics of the program in a way that disproportionately harms small safety-net providers. Under the current point-of-sale 340B purchasing model, entities like NEW Health rely on upfront discounted pricing to maintain operational liquidity. A rebate approach would instead require covered entities to pay full acquisition cost and waitpotentially months for manufacturer reimbursement. For a small rural FQHC with limited reserves, this creates an untenable cash-flow burden. Unlike large health systems, we do not have access to large lines of credit, dedicated treasury functions, or financial buffers capable of absorbing prolonged reimbursement delays. Even short delays in rebate payment could impair our ability to maintain appropriate drug inventory, meet wholesaler payment terms, sustain pharmacy staffing levels, and continue offering affordable medications to patients. 2. Compounding Financial Pressure from the MFP Model These concerns are not hypothetical. NEW Health is already experiencing a year-over-year reduction in 340B revenue exceeding $100,000 per month as a direct result of the Medicare Fair Pricing (MFP) model that took effect in 2026. This ongoing reduction has materially constrained our ability to reinvest 340B savings into patient care services. Layering a rebate-based 340B model on top of existing revenue erosion would compound financial instability, placing rural FQHCs at heightened risk of service reduction or elimination altogether. The cumulative impact of multiple federal pricing initiatives must be considered holistically rather than in isolation. 3. Threat to Patient Access and Safety-Net Sustainability For NEW Health, 340B savings are not margin; they are mission-critical funding that supports sliding-scale pharmacy services, medication access for uninsured patients, chronic disease management programs, staffing for pharmacy and care coordination services, and the continued operation of our pharmacy as a community access point. Any disruption to 340B cash flowparticularly one that is systemic and ongoingdirectly threatens our ability to serve patients. As the only safety-net provider in our region, there are no alternative care sites for our patients should services be reduced. A rebate model that destabilizes small, rural covered entities would ultimately work against the core statutory purpose of the 340B Program, which is to enable covered entities to stretch scarce federal resources to reach more patients and provide more comprehensive services. 4. Administrative Complexity and Operational Burden Beyond financial risk, a rebate-based model introduces substantial administrative complexity that small FQHCs are ill-equipped to absorb. Implementing a rebate system would require new claims adjudication processes, manufacturer and payer data reconciliation, dispute resolution workflows, audit preparedness across multiple stakeholders, and additional staffing or third-party vendors. For rural FQHCs already operating with lean administrative teams, these requirements would divert limited resources away from patient care and toward compliance managementwithout corresponding benefit to patients. 5. Equity Considerations: Disproportionate Impact on Rural and Small Entities Any pilot must consider equity across covered entity types. A one-size-fits-all rebate approach implicitly favors large systems with greater purchasing volume, sophisticated revenue cycle infrastructure, and access to capital and credit. Small rural FQHCs face structurally different realities. Without explicit safeguards, a rebate pilot risks exacerbating disparities between urban and rural providersultimately undermining equitable access to care. 6. Recommendations If HRSA proceeds with any form of rebate-based pilot, NEW Health strongly urges the following safeguards: - Exempt small and rural FQHCs from mandatory participation. - Ensure prompt, guaranteed rebate timelines with enforceable payment standards. - Provide federal bridge financing or advanced payments to offset cash-flow disruption. - Limit administrative burden through standardized, centralized reconciliation mechanisms. - Conduct formal financial impact analyses on rural and small covered entities prior to broader implementation. Absent these protections, the risk to patient access and safety-net sustainability is unacceptably high. Conclusion NEW Health Programs Association respectfully urges HRSA to recognize that a rebate-based 340B purchasing modelparticularly when implemented alongside other pricing reformsposes a significant and concrete threat to the viability of small rural FQHCs and the patients who depend on them. We stand ready to collaborate with HRSA on solutions that enhance program integrity without destabilizing the very providers the program was designed to support. Thank you for the opportunity to provide input and for your continued commitment to the mission of the 340B Drug Pricing Program.
HRSA-2026-0001-1454New Hampshire Hospital Association2026-04-14T04:00Z7,985 chars
See attached file(s) 125 Airport Road Concord, NH 03301-7300 603.225.0900 Fax: 603.225.4346 http://www.nhha.org The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the New Hampshire Hospital Association (NHHA) and our 16 member hospitals who participate in the 340B program, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on our members that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which New Hampshires 340B hospitals have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. NHHA has done its best to provide answers to as many of the questions as possible. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require hospitals to spend significant sums on new 125 Airport Road Concord, NH 03301-7300 603.225.0900 Fax: 603.225.4346 http://www.nhha.org administrative costs. When choosing to participate in the 340B program, it was accepted that there would be reasonable administrative costs incurred to be compliant. Hospitals designed their hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our member institutions that go far above and beyond what was expected and planned forand far above and beyond what hospitals are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Our members do not currently have the staff to comply with a Rebate Program. Implementing this new model would require additional full-time employees and would pull medical providers away from care to perform administrative functions. HRSAs estimate of just 4 additional hours per week is a gross underestimate and simplifies the reality of complying with the 340B program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our members have designed their technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force members to incur significant costs to change those systems, at a time when financial margins are already strained. This is before factoring in any manual reporting that will take place if systems cant keep up with new requirements. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force our members to effectively provide drug companies with interest-free loans as they await the discounts owed under the 340B statute. Even if drug companies paid within a 10- day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on hospitals and the patients they serve. Many hospitals dont have the cash on hand to withstand a rebate model. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express 125 Airport Road Concord, NH 03301-7300 603.225.0900 Fax: 603.225.4346 http://www.nhha.org statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Our members have reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, NHHA respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. 125 Airport Road Concord, NH 03301-7300 603.225.0900 Fax: 603.225.4346 http://www.nhha.org If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow New Hampshire 340B hospitals to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact Christian Ramsey, NHHAs Director of Financial Policy & Reimbursement, at 603-415-4253 or cramsey@nhha.org if you have questions. Sincerely, Steve Ahnen President New Hampshire Hospital Association
HRSA-2026-0001-1455(no commenter metadata)2026-04-14T04:00Z15,841 chars
Please see attachment. Because there is Strength in Unity Submitted electronically via: www.Regulations.gov Thomas J. Engles Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Dear Administrator Engles, On behalf of the United South and Eastern Tribes Sovereignty Protection Fund (USET SPF), we write to provide the Health Resources and Services Administration (HRSA) with comments regarding the proposal to change the 340B Drug Pricing Program from an upfront discount to a rebate model, and the need for HRSA to exempt Tribal Nations from this change. For nearly 35 years, the Program has operated under a model in which eligible entities can purchase prescription drugs at significantly discounted prices up front. This has allowed Tribal Nations to access and provide life-saving specialty medications for our citizens. A 340B rebate model would create financial, operational, and administrative risks that have not been properly considered by HRSA. At minimum, this will stretch already scarce capacity and resources in the Indian Health System and, at worst, may force Tribal pharmacies to close or force them to limit access to these critical medications, which could create life or death consequences for the patients we serve. USET SPF urges HRSA to fully exempt Tribal Nations from any rebate models within the 340B program and allow us to continue accessing the program in its current form. USET SPF is a non-profit, inter-tribal organization advocating on behalf of thirty-three (33) federally recognized Tribal Nations from the Northeastern Woodlands to the Everglades and across the Gulf of Mexico.1 USET SPF is dedicated to promoting, protecting, and advancing the inherent sovereign rights and authorities of Tribal Nations and in assisting its membership in dealing effectively with public policy issues. 1 USET SPF member Tribal Nations include: Alabama-Coushatta Tribe of Texas (TX), Aroostook Band of Micmac Indians (ME), Catawba Indian Nation (SC), Cayuga Nation (NY), Chickahominy Indian Tribe (VA), Chickahominy Indian TribeEastern Division (VA), Chitimacha Tribe of Louisiana (LA), Coushatta Tribe of Louisiana (LA), Eastern Band of Cherokee Indians (NC), Houlton Band of Maliseet Indians (ME), Jena Band of Choctaw Indians (LA), Mashantucket Pequot Indian Tribe (CT), Mashpee Wampanoag Tribe (MA), Miccosukee Tribe of Indians of Florida (FL), Mississippi Band of Choctaw Indians (MS), Mohegan Tribe of Indians of Connecticut (CT), Monacan Indian Nation (VA), Nansemond Indian Nation (VA), Narragansett Indian Tribe (RI), Oneida Indian Nation (NY), Pamunkey Indian Tribe (VA), Passamaquoddy Tribe at Indian Township (ME), Passamaquoddy Tribe at Pleasant Point (ME), Penobscot Indian Nation (ME), Poarch Band of Creek Indians (AL), Rappahannock Tribe (VA), Saint Regis Mohawk Tribe (NY), Seminole Tribe of Florida (FL), Seneca Nation of Indians (NY), Shinnecock Indian Nation (NY), Tunica-Biloxi Tribe of Louisiana (LA), Upper Mattaponi Indian Tribe (VA) and the Wampanoag Tribe of Gay Head (Aquinnah) (MA). HRSA Must Honor Federal Trust and Treaty Obligations to Tribal Nations USET SPF reminds HRSA that, as an arm of the federal government, it is required to uphold federal trust and treaty obligations owed to Tribal Nations. A critical component of trust and treaty obligations is the requirement to provide all resources necessary to facilitate the highest possible health status for American Indians and Alaskan Natives (AIANs). The 340B program, in its original and current form, is an invaluable resource for Tribal health programs in our efforts to provide quality and robust healthcare to our citizens and communities, and HRSA has an obligation to ensure we maintain access to this resource in a way that works for the Indian Health System. Refusal to grant an exemption from the rebate model for Tribal entities will, at minimum, result in diminished patient access to essential medications and, at worst, will destabilize Tribal health programs and threaten their continued existence, all of which is a violation of federal trust and treaty obligations. We also remind HRSA that RFIs are not a substitute for formal Tribal consultation. HRSA is required by Executive Order and the Department of Health and Human Services (HHS) own Tribal Consultation Policy to conduct Tribal consultation on any federal action that may affect programs and services delivered by and to Tribal Nations. The 340B program is a vital resource for Tribal health programs and a change of this magnitude requires consideration through formal Tribal consultation prior to HRSA acting. Significantly Higher Upfront Costs Will Severely Impact Tribal Healthcare Access Imposing a rebate model on 340B program covered entities will increase costs, sometimes exponentially, and an increase in cost this significant has the potential to create disastrous effects for Tribal health and pharmacy programs. Using the 10 drugs included in the original pilot as an example, these medications are estimated to cost 127 to 200,000 times more than the original 340B pricing. As Tribal clinics and pharmacies already operate on razor thin margins, due to chronic federal underfunding, this could have devastating effects on Tribal Nations and Urban Indian Organizations (UIOs) ability to provide access to medications our communities rely upon. Under a rebate-only model, Tribal health entities may be forced to delay or deny medications, reduce services, or reallocate limited financial and human resources away from patient care. This is particularly concerning, as American Indian and Alaskan Native (AI/AN) people suffer disproportionate rates of diabetes, cardiovascular disease, autoimmune conditions, and other chronic diseases, conditions that are treated by the very medications on which HRSA is considering imposing a rebate model. Without access to advance discounts through the 340B pricing, Tribal clinics and pharmacies may be unable to purchase these medications, threatening the health and wellbeing of our communities and worsening health disparities. One medication (Jardiance) included in the original pilot and used to treat Type 2 diabetes, chronic kidney disease, and heart failure is estimated to increase in cost from $141 to nearly $205,000 annually per patient. Another medication used to treat autoimmune disorders (Enbrel) could increase in cost from less than a dollar per year to over $73,000 per year, per patient. Given the high rates of these conditions in our communities, Tribal health programs could see their upfront annual drug costs increase by hundreds of thousands or even millions of dollars. Tribal health programs often do not have space in our budgets to absorb an upfront cost increase of this scale, even if we will eventually receive a rebate. If there are insufficient funds to purchase these medications upfront at the higher cost, Indian Health Care Providers may be forced to delay or deny medications, as even the 10-day timeframe for responding to claims may be too long for Tribal entities to absorb. The very nature of the populations we serve and the financial regulations and structures under which Tribal health programs must operate results in a lack of available funds to cover these costs, as every spare dollar is already required by law to be reinvested in our health programs. Moreover, the actual time period between an entity paying for a drug and receiving a rebate could also be much longer than 10 days because covered entities cannot file for a rebate until the medication is actually dispensed to the patient and the claims data is submitted. Uncertain timelines and potentially indefinite delays in receiving the rebates will only exacerbate the cash-flow issues already presented by a rebate model. Even if we could manage to cover the increased upfront cost, few to no Tribal programs have the resources to absorb these costs indefinitely, if rebates are denied or significantly delayed. This uncertainty could force Tribal programs to limit access to drugs under the rebate model for fear of being unable to recoup the cost. Uncertainty over the amount needed to cover medication expenses in the absence of a clear price ceiling (as exists under the current 340B model) may also compel Tribal programs to pause or forego critically needed equipment, technology, or facility updates to save funds for future unknown cost increases. These decisions would further limit access to care and services and threaten the health of our citizens. Tribal Nations already constantly have to deny or defer care to our citizens due to a lack of available funding or resources. A rebate model that creates exponentially higher upfront costs would only exacerbate these resource and cash-flow issues, which in turn could force us to further limit or deny care to our citizens and communities. These medications treat life-threatening conditions that plague our communities thanks to centuries of federal under-investment in the Indian Health System. The federal trust obligation to provide all resources necessary to ensure the highest possible health status for AI/AN people is in direct conflict with the rebate model proposal. The current 340B model that allows Tribal Nations to purchase these medications at the discounted price up front is a critical, life-saving resource in Indian Country. HRSA has an obligation to ensure that this resource is not diminished for Tribal entities. Administrative and Operational Burdens Created by a Rebate Model Beyond the simple cost of the medications, a 340B rebate model would also create significant administrative and operational challenges for Indian Health Care Providers that could further threaten our ability to operate and provide care to our communities. It is important to understand that due chronic federal underfunding, Tribal health providers operate with extremely limited capacity and resourcesfinancial, human, and technological. Indian Health Care Providers across the country deal with significant workforce shortages of 25-30%, and these rates may be as high as 50% in some areas. This means that clinics and pharmacies often lack not only physicians and nurses, but administrative and billing staff that are necessary for continued operations. Additionally, severe underinvestment in Tribal health technology and systems means that entities also often lack the tools needed to comply with changing requirements. Imposing a rebate model on the 340B program would require entities to create new IT systems and workflows to create and track rebates and claims, which will require dedicated human and technical resources. This will require Tribal health programs to either hire additional staff or pull existing staff away from their current duties to keep up with the significantly increased paperwork and processes required to access these medications and recoup rebates. As Tribal programs are already understaffed and routinely struggle to hire new staff due to the rurality of our communities and limited financial resources, it is likely that some Tribal entities will be unable to muster the capacity and resource necessary to support a rebate model. As a result, Tribal entities may be forced to limit patient access to care simply because we do not have the staff to execute and track rebate claims. In addition, a rebate model will create increased compliance, audit and legal burdens for Tribal health programs. The ability to purchase these medications outright at the discounted price means that Tribal programs avoid the legal and administrative processes involved in filing and executing rebates with multiple private manufacturers (as well as the training required to educate employees on these processes and requirements). Considering the chronic workforce and capacity issues Tribal health programs face, this increased workload combined with the administrative burdens associated with operating health programs subject to federal compliance standards could become unsustainable for Tribal health programs. Additionally, some entities may decide that the increased administrative burden and audit responsibilities outweigh the benefits of purchasing these medications. Therefore, Tribal Nations are requesting that HRSA issue an exemption to Tribal entities from the 340B rebate model pilot and maintain current practices to ensure that Tribal Nations are not forced to choose between providing critical healthcare services for our people and maintaining compliance with burdensome administrative requirements. Tribal Entities Must Retain Recourse Avenues Through the Federal Government for Rebate Denials The proposal to shift the 340B program to a rebate model undermines federal trust and treaty obligations by shifting responsibility and authority over the program to private entities that do not share in the unique political relationship between Tribal Nations and the federal government. Under the present 340B model, Tribal covered entities can seek recourse through the federal government when manufacturers inappropriately overcharge for medications, just as manufacturers can seek recourse via audits through HRSA when 340B providers act inappropriately. Conversely, the proposed rebate model would provide manufacturers with wide discretion to deny rebate claims and would force covered entities to challenge denials with the drug companies themselves, not the federal government. The proposed model also would not impose any consequences on manufacturers that inappropriately delay or deny rebates. Given the financial and resource challenges we have outlined, Tribal entities do not have the resources necessary to challenge large private companies over these rebates. More importantly, the 340B program is a resource Tribal programs employ to provide healthcare to our communities, and the federal government has a responsibility to provide all resources necessary to support the provision of this healthcare, which we are owed. Allowing private entities nearly unchecked discretion to deny or delay rebate claims for any number of reasons as the RFI does not specify parameters for denials or impose consequences for manufacturer misconduct could inappropriately diminish this resource for Tribal entities. Under any 340B model, Tribal entities must retain the authority to seek recourse through the federal government, and that requires the federal government to retain the authority to compel manufacturers to comply with federal requirements. Conclusion USET SPF respectfully requests that HRSA exempt Tribal 340B providers from the rebate model to avoid severe and lasting negative impacts on the Indian Health System. Without an exemption, AI/AN patients will lose access to life-saving medications, and the very existence of Tribal health programs may be threatened. The Department of Health and Human Services is well aware of the resource challenges faced by Tribal health programs that would make a rebate program unworkable, as well as the persistent and disproportionate health issues present in Indian Country that necessitate access to these medications. We therefore urge the Department to uphold the federal trust and treaty obligations to provide for AI/AN healthcare by exempting Tribal entities from the rebate model. Should you have any questions or require further information, please contact Ms. Liz Malerba, USET SPF Director of Policy and Legislative Affairs, at LMalerba@usetinc.org or 615-838-5906. Sincerely, Kirk Francis Kitcki A. Carroll President Executive Director
HRSA-2026-0001-1456RetireSafe2026-04-14T04:00Z5,668 chars
See attached file(s) April 14, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Dear Mr. Engels, Thank you for the opportunity to provide feedback to the Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS), on a potential 340B Rebate Model Pilot Program. On behalf of senior advocacy organization RetireSafe, I am writing today to support and encourage the implementation of a rebate program to ensure savings intended to help low-income patients are not pocketed by participating providers. The 340B program was originally developed to help low-income patients access the medications they need in the face of high costs. The program allows participating hospitals and clinics to purchase drugs at discounted rates, and, in theory, offer reduced prices to patients in need. In practice, a lack of transparency and oversight has allowed some 340B hospitals to abuse the system, pocketing savings meant to help patients. Rather than utilizing federal resources to help the vulnerable, the 340B program has become a mechanism for hospitals to absorb funds. 340B and profit-motivated expansion have also driven up Medicare Part B premiums. General increases in health spending and government payments to hospitals have led Medicare to shift the cost burden onto beneficiaries through higher premiums. Tens of millions of seniors rely on Part B to afford provider-administered infusions and injections they require to treat a variety of conditions and maintain their quality of life. Abuse of the 340B program is now saddling these patients with higher costs and decreased access while participating entities profit. The proposed rebate model is an important first step in bringing transparency and integrity to the historically opaque 340B program. Through this limited pilot, participating hospitals would be required to provide data showing that eligible prescriptions were dispensed to eligible patients. Once that data is submitted, manufacturers would be required to quickly pay the 340B rebates. By requiring a self-enforcing system for covered entities to provide proof of their 340B activities, the program has the potential to reduce opportunities for abuse and stop covered entities from fraudulently profiting off a program meant to help low-income patients. Not to mention, the federal government would be less involved with this program, ultimately saving taxpayers money. This is a win-win for seniors. Thank you for your efforts to protect patients from abuse of the 340B program. I strongly urge you to implement a Rebate Model Pilot Program to ensure 340B works as intended and that patients in need, not participating hospitals, reap its benefits. Sincerely, Mark Gibbons President/CEO RetireSafe April 14, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Dear Mr. Engels, Thank you for the opportunity to provide feedback to the Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS), on a potential 340B Rebate Model Pilot Program. On behalf of senior advocacy organization RetireSafe, I am writing today to support and encourage the implementation of a rebate program to ensure savings intended to help low-income patients are not pocketed by participating providers. The 340B program was originally developed to help low-income patients access the medications they need in the face of high costs. The program allows participating hospitals and clinics to purchase drugs at discounted rates, and, in theory, offer reduced prices to patients in need. In practice, a lack of transparency and oversight has allowed some 340B hospitals to abuse the system, pocketing savings meant to help patients. Rather than utilizing federal resources to help the vulnerable, the 340B program has become a mechanism for hospitals to absorb funds. 340B and profit-motivated expansion have also driven up Medicare Part B premiums. General increases in health spending and government payments to hospitals have led Medicare to shift the cost burden onto beneficiaries through higher premiums. Tens of millions of seniors rely on Part B to afford provider-administered infusions and injections they require to treat a variety of conditions and maintain their quality of life. Abuse of the 340B program is now saddling these patients with higher costs and decreased access while participating entities profit. The proposed rebate model is an important first step in bringing transparency and integrity to the historically opaque 340B program. Through this limited pilot, participating hospitals would be required to provide data showing that eligible prescriptions were dispensed to eligible patients. Once that data is submitted, manufacturers would be required to quickly pay the 340B rebates. By requiring a self-enforcing system for covered entities to provide proof of their 340B activities, the program has the potential to reduce opportunities for abuse and stop covered entities from fraudulently profiting off a program meant to help low-income patients. Not to mention, the federal government would be less involved with this program, ultimately saving taxpayers money. This is a win-win for seniors. Thank you for your efforts to protect patients from abuse of the 340B program. I strongly urge you to implement a Rebate Model Pilot Program to ensure 340B works as intended and that patients in need, not participating hospitals, reap its benefits. Sincerely, Mark Gibbons President/CEO RetireSafe
HRSA-2026-0001-1457(no commenter metadata)2026-04-14T04:00Z19,489 chars
This submission is anonymous. We are a DSH hospital in rural Alabama who choose to be anonymous to avoid discrimination from manufacturers. We strongly opposes the implementation of a rebate model to effectuate the 340B ceiling price. A rebate model does not improve the 340B Program. It restructures it in ways that benefit manufacturers at the direct expense of covered entities and the patients they serve. Under a rebate model, safety-net providers would be required to pay full acquisition cost upfront, wait for manufacturer-controlled reimbursement, manage claim-level denials, and absorb the administrative and financial burden of a system designed to serve manufacturers compliance interestsnot patients access to affordable medications. The 340B statute authorizes a ceiling price. It does not authorize manufacturers to design a payment system that imposes conditions, timelines, and adjudication discretion that effectively erode that price in practice. The upfront discount model enforces the ceiling price at the point of purchase. A rebate model turns every transaction into a negotiationone in which manufacturers hold the leverage. As a rural Disproportionate Share Hospital in Alabama, this covered entity operates on thin margins to serve a high-need, largely uninsured and underinsured population. The cash flow disruption, staffing burden, and denial risk of a rebate model are not abstract concerns. They are direct threats to the ability to maintain medication access for vulnerable patients. HRSAs mission is to protect that accessnot to create new mechanisms that jeopardize it. If HRSA proceeds with a pilot, the safeguards outlined in this comment represent the minimum necessary to prevent direct harm. However, the appropriate course is not to redesign the rebate model. The appropriate course is to preserve the longstanding upfront discount structure that has functioned effectively for decades and to focus program integrity efforts on standardized, enforceable, and auditable compliance measures that do not fundamentally alter the programs payment architecture. Request for Information: 340B Rebate Model Pilot Program 1. Executive Summary and Overall Position a. This covered entity submits this comment in response to HRSAs Request for Information (RFI) regarding the potential implementation of a rebate model to effectuate the 340B ceiling price. This covered entity strongly supports the 340B Drug Pricing Program and the statutory purpose articulated by Congress: enabling covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. b. This covered entity has significant concerns that a rebate model particularly one that is claim-level, manufacturer-adjudicated, and dependent on post-purchase reimbursementwould impose substantial administrative and operational burden, increase financial risk to covered entities, create opportunities for inappropriate denial practices, and increase the likelihood of medication access disruption for vulnerable patients. c. While HRSA has expressed interest in testing rebates in connection with manufacturer concerns regarding nonduplication (including the Medicare Drug Price Negotiation Program (MDPNP)) and program integrity objectives (duplicate discounts and diversion), This covered entity believes these goals can and should be pursued through targeted, standardized, and enforceable integrity measures rather than by structurally converting 340B from an upfront discount program into a rebate program. d. If HRSA proceeds with any rebate model pilot, This covered entity urges HRSA to ensure the pilot is: i. Narrow in scope, time-limited, and voluntary for covered entities; ii. Operationally feasible, including standardized data formats and centralized processing; iii. Financially neutral for covered entities (hold-harmless requirements); iv. Strictly enforceable against manufacturers (timelines, automatic approvals, penalties); v. Limited in denial grounds, with standardized documentation and dispute resolution; and vi. Protective of patient access, privacy, and security. 2. Covered Entity Context and Reliance Interests a. This covered entity participates in the 340B Program as a Disproportionate Share Hospital (DSH) and provides services to a high- need population, including individuals who are uninsured and underinsured. The 340B Program is integral to this covered entitys ability Request for Information: 340B Rebate Model Pilot Program to provide comprehensive services, including but not limited to maintaining access to outpatient drugs. b. This covered entity relies on the upfront discount model to support predictable purchasing, inventory management, patient access, and budget stability. The 340B statute has operated for decades as an upfront discount system, and covered entities have built compliance infrastructure, pharmacy operations, and vendor relationships around that model. A rebate model introduces substantial new complexity and risk, including payment timing mismatches, claim-level disputes, and increased exposure to denial practices. c. While HRSA correctly notes that the statute references rebate or discount, This covered entity believes that any shift to rebates must be treated as a major program redesign requiring strict safeguards to ensure the statutory ceiling price is actually realized by covered entities in practicewithout delay, denial, or added cost that effectively erodes the value of 340B. 3. Responses to HRSA Targeted Questions a. Current administrative costs i. This covered entity currently incurs administrative costs associated with 340B compliance and operations. These costs reflect the complexity of ensuring compliance with HRSA requirements, including diversion prevention, Medicaid duplicate discount avoidance, record retention, and audit readiness. These costs are incurred even under the upfront discount model. b. Key cost drivers i. Staffing for pharmacy operations, compliance, finance, and IT support; ii. Split-billing software and contract pharmacy administrator fees; iii. Claim reconciliation and monthly audit support; iv. Compliance monitoring and policy development; v. ESP & Beacon Submissions; and vi. Data retention and reporting; and vii. Annual independent audit. c. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Incremental costs (startup vs ongoing) 1. A rebate model would require This covered entity to implement duplicative processes not required under the upfront discount model, including claim-level submission to manufacturers, monitoring manufacturer adjudications, Request for Information: 340B Rebate Model Pilot Program tracking payments, managing denials, and reconciling rebates against purchasing and dispensing activity. 2. These estimates include costs related to: a. Data mapping and interface builds; b. New workflows for claim submission; c. Ongoing reconciliation and dispute resolution; d. Expanded compliance monitoring; and e. Incremental vendor costs. f. Cost of consulting services to oversee compliance and reconciliation of the rebate processes. ii. Incremental activities 1. Identification and extraction of eligible claims; 2. Formatting and submission of required claim-level data; 3. Validation and resubmission of rejected files; 4. Reconciliation of rebate payments to submitted claims; 5. Tracking of adjudication timelines; 6. Denial review, appeals, and escalation; 7. Expanded audit support and documentation; and 8. Increased cybersecurity and privacy controls. iii. Offsetting incremental costs 1. If HRSA proceeds with a rebate model pilot, HRSA should require that manufacturers fully offset incremental administrative and operational costs borne by covered entities. 2. Covered entities should not be required to absorb new costs resulting from a manufacturer-driven payment mechanism. HRSA should consider: a. Standardized per-claim administrative payments by manufacturers; b. A centralized, stakeholder agnostic rebate adjudication platform funded by manufacturers; c. A prohibition on requiring covered entities to contract with additional vendors solely to comply with the rebate model; and d. Standardized reporting and audit requirements that do not exceed current 340B expectations. iv. Operational impact 1. A rebate model would materially disrupt this covered entity operations by shifting resources away from patient care and toward claim submission, reconciliation, and dispute Request for Information: 340B Rebate Model Pilot Program resolution. This diversion of resources is inconsistent with the statutory purpose of the 340B Program. d. Staffing Impacts i. Implementation of a rebate model would likely require additional staff or reallocation of existing staff time from patient-facing functions. 1. Roles impacted: Compliance, finance, and legal. ii. Smaller covered entities and rural providers would face disproportionate burden due to limited staffing and inability to scale administrative infrastructure. 1. It is expected that outsourcing services with a consulting firm would be required for compliance and reconciliation. e. Systems and Infrastructure i. A rebate model would require new or modified systems, including: 1. Claim extraction and normalization tools; 2. Interfaces with manufacturer systems or centralized platforms; 3. Expanded split-billing and accumulator logic; 4. Reconciliation and accounting modules; and 5. Audit and reporting systems. ii. These costs would likely be higher for covered entities with multiple contract pharmacies, multiple vendor platforms, or limited internal IT capacity. f. Other Costs and Impacts i. Additional costs could include: 1. Legal review of manufacturer rebate plan terms; 2. Training of staff and vendors; 3. Compliance consulting; 4. Renegotiation of contract pharmacy arrangements; 5. Operational disruption during transition. ii. A rebate model could also reduce the feasibility of contract pharmacy participation, particularly if pharmacies or TPAs cannot support manufacturer-specific requirements. This could directly reduce patient access, particularly in rural or underserved areas where contract pharmacy arrangements are the primary mechanism for medication access. Worth noting, manufacturers are already limited access to 340B drugs at contract pharmacies by limiting utilization of 340B to only 1 (or a limited number) of pharmacies. Request for Information: 340B Rebate Model Pilot Program iii. Collectively, the annual increased cost to the covered entity resultant from a rebate model is expected to be between $120,000 and $180,000. 4. Payment Timing and Potential Cash Flow Impacts a. Cash flow impact i. A rebate model shifts cash flow risk to covered entities. Under the upfront discount model, covered entities pay the ceiling price at purchase. Under a rebate model, covered entities would pay a higher price and wait for reimbursement. ii. Even if HRSA required manufacturers to pay rebates within 10 calendar days of submission, covered entities would still face: 1. Delays due to file rejections or data format disputes; 2. Denials requiring appeal; 3. Mismatches between purchase timing and claim timing; and 4. Delays due to contract pharmacy claim lags. iii. For safety-net providers operating on thin margins, these risks are material and may reduce the ability to maintain medication access. b. Current Wholesaler Terms i. A rebate model would create a timing mismatch: wholesalers require payment on standard terms, while rebates are contingent on manufacturer adjudication. This mismatch creates working capital requirements that many covered entities cannot absorb without reducing services. c. Ensuring manufacturer adherence i. If HRSA proceeds, it must implement enforceable requirements, including: 1. Standardized submission formats; 2. Automatic approval/payment if manufacturer does not respond within the deadline; 3. Interest penalties for late payment; 4. Reporting of timeliness metrics; 5. HRSA enforcement authority for repeated violations; and 6. Independent auditability of manufacturer adjudication systems. ii. Other structures to address cash flow 1. HRSA should consider mechanisms such as: a. Advance funding/escrow arrangements; b. Automated rebate processing without manual claim submission by covered entities; c. Centralized adjudication; and Request for Information: 340B Rebate Model Pilot Program d. Elimination of claim-level manufacturer discretion. 5. Rebate Denials a. Guardrails i. HRSA should impose strict guardrails. Denials must be limited to objectively verifiable circumstances and must not become a de facto mechanism for restricting access to 340B pricing. ii. Denials should not be permitted based on: 1. Manufacturer-defined eligibility interpretations; 2. Discretionary determinations; 3. Manufacturer-specific data requirements beyond HRSA minimum standards; or 4. Retrospective reclassification without clear evidencea practice very common in the present 340B ESP platform b. Standard process elements i. HRSA should require: 1. Standardized denial reason codes; 2. Mandatory supporting documentation; 3. A uniform denial template; 4. Strict adjudication timelines; 5. A covered entity appeal pathway; 6. Automatic reversal for improper denials; and 7. HRSA escalation with enforceable remedies. ii. HRSA should also require manufacturers to report denial rates and denial reasons publicly to deter abuse and promote accountability. 6. Data Collection by Covered Entities a. Data accuracy and controls i. Current controls include: 1. Validation checks; 2. Periodic reconciliations; 3. Vendor QA processes; 4. Internal audit review; and 5. Retention policies consistent with HRSA expectations. b. Changes under rebate model i. A rebate model would require expanded data collection and transmission, including claim-level data elements not currently required for 340B ceiling price access. This increases administrative burden and privacy/security risk. c. Recommended data elements i. HRSA should define a standardized minimum dataset, not manufacturers. The dataset should be limited to what is necessary Request for Information: 340B Rebate Model Pilot Program to effectuate the ceiling price and support nonduplication objectives. HRSA should avoid requiring patient-identifying information. ii. Elements could include: 1. NDC 2. Quantity 3. Date of service 4. CE Identifier 5. Pharmacy Identifier 6. Claim Identifier 7. Payer Identifier 8. A limited set of adjudication fields (rebate requested, rebate paid, denial code) iii. HRSA should explicitly prohibit manufacturers from requiring additional fields beyond the standardized dataset, such as what is required for HRSA Data Requests for audits d. Privacy and security guardrails i. HRSA should require: 1. Minimum necessary data standards 2. Tokenization/de-identification; 3. Encryption in transit and at rest; 4. Strict access controls and audit logs; 5. Vendor BAAs where applicable; 6. Retention limits; and 7. Restrictions on secondary use of data 7. Required Reporting a. Manufacturer reporting to HRSA i. Manufacturers should be required to submit at least quarterly: 1. Total rebate requests received; 2. Approvals, denials, and pending volumes; 3. Denial reasons by standardized code; 4. Average adjudication time; 5. Percent paid within required timeline; 6. Dollars paid and dollars denied; 7. Appeal volumes and outcomes; and 8. Audit results related to rebate processing. b. Public reporting i. HRSA should publicly report manufacturer compliance metrics at least quarterly, including timeliness and denial rates, to promote transparency and accountability. Request for Information: 340B Rebate Model Pilot Program c. Frequency and duration i. The pilot should have: 1. A defined start and end date; 2. A minimum evaluation period sufficient for analysis (e.g., 12 24 months); and 3. Required interim reporting to allow course correction. 8. 340B Program Integrity and Other Potential Benefits a. Integrity impacts i. A rebate model increases operational complexity and therefore increases risk of error, denial, and access disruption. While HRSA is appropriately focused on diversion and duplicate discounts, these issues should be addressed through standardized, targeted measures rather than a broad structural shift that places burden on covered entities. b. Potential benefits i. A rebate model may provide manufacturers additional data to support their internal compliance processes. However, any benefits to manufacturers must not come at the expense of covered entities ability to access the ceiling price reliably and without delay. For this reason, there should be reciprocal action by manufacturers in being fair and reasonable stakeholders in this vital program. With this, manufacturers and CEs can both realize benefits, such as: 1. CEs provide data to support internal compliance requests of manufacturers 2. In exchange, manufacturers remove all limitations of 340B utilization at contract pharmacies. The present limitation of 1 (or a small number) of contract pharmacies available for 340B use should go away in light of the above CE provision. c. Recommendations i. If HRSA proceeds with a pilot, HRSA should: 1. Limit scope to a narrow set of drugs and manufacturers; 2. Make covered entity participation voluntary; 3. Require standardized minimum data elements; 4. Prohibit manufacturer-specific expansions; 5. Require automatic payment within strict timelines; 6. Restrict denial grounds and require documentation; 7. Impose penalties for late payments and improper denials; 8. Require manufacturer funding of covered entity administrative costs; and 9. Establish an enforceable dispute resolution pathway. Request for Information: 340B Rebate Model Pilot Program 10. Require utilization of an agnostic, third-party centralized clearinghouse with oversight by HRSA. d. Benefits vs Costs i. For covered entities, the costs and risks of a rebate model outweigh the benefits unless HRSA ensures that covered entities are held harmless and the model is tightly controlled, standardized, and enforceable. ii. We believe that a good faith effort by covered entities to reasonably work with manufacturers to enhance the integrity of the 340B program should be met with a removal of current limitation of 340B drug pricing at all contracted pharmacies of the covered entity. 9. Conclusion a. This covered entity appreciates HRSAs effort to solicit input in a transparent manner. The 340B Program is a cornerstone of the health care safety net. Any shift away from the longstanding upfront discount model must not undermine the ability of covered entities to stretch scarce resources and maintain patient access. b. If HRSA proceeds with a rebate model pilot, HRSA must ensure the pilot is narrow, voluntary, time-limited, standardized, and enforceableand that covered entities are protected from administrative burden, cash flow risk, and inappropriate denial practices. Thank for your consideration in this matter! -An Alabama DSH
HRSA-2026-0001-1458Grace Community Health Center, Inc.2026-04-14T04:00Z117,035 chars
Please reference the attached document. In summary, Community Health Centers must be exempted from any 340B rebate model. Without such exemption, the proposal will directly compromise our ability to provide timely, high quality, whole person care to the communities we love and serve. Michael Stanley, CLEO Chad Stevens, CFO Dr. Kelly Evans, CMO Jeff Campbell, COO ri,?Graceif-leaLth April 7, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilut Program (IIRSA-2026-03042) Dear Director Britton: On behalf of Grace Community Health Center, Inc., dba Grace Health, we appreciate HRSA's decision to extend the comment deadline to April 20, 2026. This additional time has allowed us to conduct a thorough cvaluation of the proposed 340B Rebate Model and its implications for Community Health Centers. Based on that analysis, our position is clear: Community Health Centers must be exempted from any 340B rebate model. Without such an exemption, the proposal will directly compromise our ability to provide timely, high-quality, whole-person care to the communities we serve. The 340B program is not supplemental; it is foundational to how CHCs deliver care to the most vulnerable populations in this country. The proposed rebate structure fundamentally alters that model by shifting financial and operational risk from pharmaceutical manufacturers to frontline safcty-net providers. This shift is not sustainable and will destabilizc pharmacy operations across the CHC network. National data reinforces the severity of this impact. Assessments from NACHC indicate that CHCs will face significant financial losses, increased administrative burden, and reduced capacity to serve patients if this model is implemented. Financial Losses: Grace Health anticipates $IM+ annual loss from entity-owned pharmacy operations and 25% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost lncrcases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur S3M+ in additional costs annually to manage thc pilot. o Rural Health Center Breakdown: For rural CI ICs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For ovcr thrcc decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-incomc and uninsured patients. As congressional intcnt made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Grace Health in particular, this means it will impact: 48,000 + patients. Our ability to offer under/uncompensated care, specifically with o School-Based Health Services o Dental Services o Bchavioral Health Services o Clinical Pharmacy Services We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 11. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of rcach. Paticnts may bc forced to make tough decisions in transitioning to other medications, duc to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebatc model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a sigial that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. 2 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to lifc-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, arc uscd to manage chronic conditions prevalent in primary carc settings, mcaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for paticnts with deep vcin thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool tbr survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebatc modcl would cffcctivcly dcny our paticnts acccss to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United Statcs is in the midst of an alarming mcntal health crisis. Nearly one in four (23.4%) Americans live with a mcntal illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics arc the mainstay of trcatmcnt for Schizophrcnia. A rcbatc model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardivc Dyskincsia, a common sidc effect of antipsychoties. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 hnpairing access to these drugs could result in exacerbation of the mental health crisis. Richard P, Ku L. Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with thc usc of community health centers. J Arnbul Care Manage. 2012 Jan-Mar:35( I ):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks as.sociated with discontinuation of oral anticoagulation in ncwly diaposed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. I Thromb Hacmost. 2021 Sep;19(9):2322-2334. doi: 10.1III/jth.15415. Epub 2021 Jul 23. PMII): 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long:Fenn Randornived Treatment with Empagliflotin or Placcbu in Patients with Heart Failure. Circulation. t : LIII:ijourn ;II Tar.: i i 6 I ..circulkainnatin.L23.0657-ts Substance Abuse and Maltal Health Scniccs Administration. (2025). Kcy substance use and mental health indicators in the Unitcd Statcs: Results from thc 2024 National Survey on Dnig Use and Health (HHS Publication No. PEP25-07-007, NSDUI I Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Scrviccs Administration. go\ data ktit:i-\\ tbduh-national-survedrug-use-and-hcalth/nationaI-relcascs I lauser RA. et al. Long-Tcmi Dcutctrabcnazinc Treatment for Tardive DyskinQsia ls Associated With Sustained Benefits and Safeiy: A 3-Year. ()pen-I .ahel Fxlension Study Front Ncurol. 2022 Feb 23:13:773999. doi: 10.3389Incur.2022.773999. PM11): 35280262: PMC ID: PMC890684 I. 3 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diahetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebatc model. In thc proposcd model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer thc rcquired discount at the point of care. Imposing a rebate model on CHCs would only weakcn the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fcc discounts to patients with incomes at or below 200% of the federal poverty guidelines. Thc same patients who nccd access to discounted mcdical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially thosc who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implcmenting new protocols, diverts limited staff resources away from dircct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine rnedication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a mcaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to makc impossible choices: cutting progams, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. 111. Administrative Complexities and Financial Challenges for CHCs 'The proposcd 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnccessary administrative burden. To address manufacturers' -concems- about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs havc already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot progam would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. 2025 UDA Data, HRSA (hrsa_gov) 4 HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associatcd with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing thc financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, stafling, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Grace Health provided more than S2.3M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fec discounts will decrease sigiificantly under a rebate model. Staffing Impact: Gracc Health anticipates needing 1 to 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliancc burden created by a rebate model. External Vendor Costs: Given increased complexity, Grace Health anticipates an increase of $50,000 to S1M to annual costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Relow is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processcs. Workforcc Impact According to an intemal NACHC assessment, 47% of responding CHCs estimatc needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing l to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' lntcrnal NACHC assessment (99 responses). 5 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operatc on razor-thin margins, and these additional costs are not an option for many entities. Gracc Health specifically anticipates a reduction in clinic bascd, paticnt-facing personnel while reallocating resources in order to staff appropriately to meet the administrative demands of a rebate model. Depending on the volume of prescriptions a pharmacy fills for thc 10 sclected drugs, CHCs will face an increased administrative burdcn in terms of monitoring rebate claims and payments. For a organization the size of Grace Health, this could be anywhere from 20 to 40 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will forcc CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Grace Health urges HRSA to require uniformity among cligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration ( bant,..es Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens whcn manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. As much as $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permancnt, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 44,000 patients, the total projected increase in expenses, including labor, IT, and carrying costs-is estimated at $100,000 to $150,000 annually. The In-House Pharmacv: The Burden of Deep IT Intcgration For CHCs that operate their own pharmacies, like Grace Health, the rebatc model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customizeion to provide real-time, accurate information at the pharmacy counter. s Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staffwho currcntly manage clinical pharmacy services will be forced to spcnd 10 to 15 hours per week manually pulling "Purchasc Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. I he Contract Pharmacy: I he B- urden ot !Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the vcry existence of these arrangcmcnts. My CHC currently partners with 57 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staffmust monitor claims across 61 (including entity-owned) different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program cntirely rather than manage the administrative headache. ln our region, this would leave patients in southeastern Kentucky with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with ncarly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: l'he Kurden ot New Systems Km:mired Clinic-administered drug (CAD) operations and record-keeping in CHCs arc designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs arc bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Shnplified Records: Because CHCs maintain limited inventories of CADs and they are typically not scparatcly billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to cicctronic data before submitting for rcbate. Vcry fcw CHC rccords includc cicctronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalonc software systcm. 9 Vulnerability Index Approach to ktentify PhartuaL), l ept (qo s his Pharmacy and Clinical Phannacolov; .IAM A Nciwork OpsmjjAM A NowQd to 7 ww.hcalthatiairs.oN doi absi l377/hlthaff.2024.UCI l92?jounialCodc=hlthaff Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drasticaliy diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting csscntial health services, reducing operating hours, or discontinuing services that support patients' health outcomcs. The proposed 340B Rebatc Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when thc patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longcr bc rcflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs. ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. At Grace Hcalth, medications are provided to eligible patients through a structured sliding fee discount program based on income level. This tiered approach ensures that patients receive affordable access to necessary medications in alignment with their financial circumstances. Our current pharmacy sliding fee structure for qualifying patients is as follows: Sliding Fee 1: $4 plus the cost of the medication Sliding Fee 2: $5 plus the cost of the medication Sliding Fee 3: $6 plus the cost of the medication Sliding Fee 4: $7 plus the cost of the medication 11 FIRSA FAQ t2 Such discounts are subject to potential legal and contractual restrictions. iittp: bohc.hrsa.yov.:cornpliancc. compliancc7 8 For the purposes of this program, the "cost of the medication" reflects the 340B acquisition cost. Under a rebate model, Grace Hcalth would be required to assume the financial risk associated with cach sliding fee prescription, relying on the timely and accurate receipt of manufacturer rebates. In the absence of consistcnt and prompt rebate payments, the organization would be responsiblc for covering the full acquisition cost of medications upfront. This model is not financially sustainable and would significantly jeopardize our ability to continue offering discountcd medications to our most vulnerable patient populations. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually cntcred 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is dcnicd or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, hatting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, thc previously proposed rebate pilot allowed covercd cntities up to 45 days to submit data, meaning thc potential time from dispense to rebate can cxtcnd to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data cvcry 14 days would anticipate a purchase-to-rcbatc payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could crcate financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on cxperience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and thcir vendors have failed to pay thc rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefmed and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to thc patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. %ear-eitd-husiness-health-theck-kcy-metrics-c\crt -nhannuc,y-imncr-slunild-reviev. 9 Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionatcly impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost lmpact Calculator, which utilizes CHC-spccific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluatcs: lncrease Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine thc annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intcrvals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory rnodcls, frequency of data submission, and manual processes for referral claim capturc can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (dcscribcd above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost 511,833,935.91 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends S3,376,723.65 to purchase these same drugs at the 340B ceiling price. This represents a 251% increase in upfront capital rtNuircd for procurcmcnt. 14 https: 340bpncing.hrsagov, 11 lit III,: %1/4 zip, scion ed-drug-I ist-rtev,otiated-prices-also-know n-maximunt-fair-oriccs-statutezia.ZIP 10 This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Grace Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy services, school based health and dental, and behavioral health. Operating Hours: Wc anticipate needing to reduce our clinic hours 10 hours per week, specifically impacting on members of our cornmunity who can only physically come to our clinics after hours or on wcekcnds. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For cvcry "Rebate Coordinator" wc arc forced to hire, wc losc thc ability to fund morc csscntial paticnt-facing staff who carry out the mission of Gracc Health every day. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,556 under/uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentialb lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Grace Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match thc initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs arc forced to pay invoices before their due dates to rcmain within their credit limits. Given that CHCs typically operate with extremely limited financial 11 margins, they arc often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchasc volume, and sub-cciling discounts on their drug purchases. Forcing a WAC-upfront modcl thrcatcns our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Grace Hcalth cstimatcs its 2027 Annual Rebate Opportunity Cost to be approximately $1,073,573.89 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Grace Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $250,000. In 2027 that number is estimated to double to over $500,000! This is not sustainable! Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would bc forced to takc out a linc of credit / utilizc limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be very substantial annually funds that are currently dedicated to behavioral health, school-based nursing and dental services and clinical pharmacy services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In a large portion our region, where patients have no choice but to rely on Grace Health the risk of our credit limit being reached or our reserves being depleted is a direct threat to thc community's safety nct. If wc are forccd into fmancial limbo, thc "trickle- down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Gracc Health urges HRSA to recognize that without rigorous, non-discretionary safcguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct fmancial harm. The framcwork proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they arc nevcr cicarly told cxist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routinc pharmacy operations. lf a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and providcd thc drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conscrvative 5% denial ratc would result in a nct annual 16 Application Proccss for the 340B Rebate Model Pilot Program. 2025-14619 (90 FR 36163) iittps::LInki_Aj sg alliccgit.17,,gyv.d.,:uillents- 21.125 (IS (I i -202 13/4 I 9.'401)-program-noticc-application-process-for-chc-340b- Mmte-rnmlel-pilot-proznirn 12 loss of $162,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients. regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will causc them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is - frozen" in the rebate system. The financial harm is compounded by thc fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable dcnials and dclays create scrious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen. the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vaguc rcasons ticd to arbitrary, unpublished standards created by manufacturcrs. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid 13 Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.' 7 The previously proposed rebate construct and the one currently used by manufacturcrs for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturcrs will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient carc delivery and fails to align with the 340B program's intent -to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.''" Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstratcs that, even whcn a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. lf HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delaycd payments has on paticnt care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assipment. Given the time to complete the review and up to 180 days to return a dctcrmination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited disputc pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper dcnials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of I-1 Manufacturer Audit Guidelines hiips , I1CS liNa'onxttisnute-restitutitm-nrocesN-1 tlh.txl l 18 340B House Report Legislative History. H.R. REP. 102-384(10. Administrativc Disputc Rcsolution Regulation, ;-,irt,s: wntent21:2 FR-2024-04-19 .ndt7.2024-08262.pdf 14 covered entities are formally and consistently addressed. This panel should include pharmacists with the neccssary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a systcm of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturcrs accountablc, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.c., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and correctcd determinations; and A clear enforccment framework, including consequences for repeated late payments or improper dcnials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered cntitics should not bc rcquircd to policc manufacturers' behavior through repeated appeals to manufacturers or thc administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (c.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through thcir vcndor, arc starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package sizc before purchascs arc madc. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burdcn of Proof on Manufact u rers Manufacturers must bear the burden of establishing that a rebate is not owcd. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to 15 covered entities.2 Systems or methodologies that effectively transfer this detennination to manufacturcrs, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared -340B transparency measures" as pricing conditions on covered entities. Unfortunatcly, while this has increased manufacturers' visibility, it has significantly rcduccd transparcncy for CHCs. Undcr thc currcnt manufacturcr conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subjcct to an unpublishcd standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes' to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturcrs nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description 'I'Ypc Definition P ] 340B Claiin Indicator Pricing Claim included a 340B modifier. 1'2 340B Claim Pricing Claim submitted by thc entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prmcriber Pricing Prescription vaitten by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P3 Contract Price Pricing Basis price is a Contract Pri. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. PS Entity Identified 340B Pricing Claim rnanually identified ilS 340B in Beacon by Dispensing F.mity. 1'9 340B Pharrnacy Allocation l'ricing Claim identified as 340B according to the aggregate 340B purchase histoiy of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharniacy claims Only 2j) Section 340B of the Public Health Service Act. hays:, -aral-hcalth.phs-act-section- 340b.ptit 21 hups., III fp. support.heaconchannelmanagenicnt.com. en. :trt i I csi I 3 3 35320-valitlatitm-codes-wnl-pri ci ng-codcs-g lossary 16 If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare ncgotiated prices do not apply until future years, would impose extraordinary administrativc burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could bc readily repurposed for rebate submission or rcconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditablc records for CADs arc frcquently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not rctrospcctive rcbatc processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving progam integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicablc to certain drugs do not takc effect until 2028, underscoring the lack of near-term appl icabi 1 ity. Bccausc CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mcchanisms already include HRSA audits and thc ADR process. These tools are 22 Imp. puhl a,cYtiun.tcxlrrul 2U25-I46l9Nil 7 5 % 9 1 6 " Intcrnal NACHC survcy data 17 spccifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until thcy arc billcd as discrctc claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework cstablishcd through the Health Center Program and the 340B statute to make medications aftbrdable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without thc savings generated from the 340B proigam. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and stafftraining, CI ICs participating in the 340B program are required to report 340B-related information annually through the Unitbrm Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements providc a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs- exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten thc stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program: rather, they are national models of compliance. CHCs are rcquired to providc sliding fee discounts to paticnts at or bclow 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsurcd and undcrinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. ln a rebate model, the price file lists the WAC pricc, making the price unattainablc for the paticnt. lf CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. 18 VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the samc unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of dcduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed bclow, CMS could implcmcnt Mcdicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priccd drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims rcpository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIH of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.2' If both a 340B rebate modcl and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever dcduplication mechanism is ultimatcly selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether -covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mcchanism. A mechanism that is appropriate to one type of -covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreernents, will use the 24 5 L.S.C. !; .500-596: Food & Drug Admin.. Least Burdensome Provisions: Concept and Principles v..ida.gm relLylat.w% -.,reir,:b-tai-zklitlance-doeuments,least-burdensome-provisions-concept-and-orineiples isited N.1ar. 13. 20261: H.R. REP. 102-38400). Medicare and Medicaid Programs; Calendar Ycar 2026 Payment Policics Under the Physician Fce Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, haps: www.govinfogov. etmtenepkwFR-2025- ll-o5 _pa 2025-1 97g7.pd 19 mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and thc IRA. Whcn enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety -net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts thc intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with IIRSA's stated authority. Thc 340B statutc not thc IRA - cursorily mcntions thc term "rcbate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of FIRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protcctions against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of I IRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturcr from charging abovc the 340B cciling price - - the maximum price that covered entities may permissibly be requircd to pay for thc drug.-29 Thc only rebatc mcchanism HHS has contended is available to it is found under Scction 340B, and, as stated above, Section 340B does not pertain 77 H.R. REP, 102-38401) 24 42 U.S.C. 256b(a)(1) 29 Id. 20 to Medicare claims. Accordingly, IIRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at Ieast the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensoine mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated abovc, the 340B statute not the IRA cursorily mentions the term - rebate- in a parenthetical in the lirst paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided hy the Secretary)."3 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Mcdicaid Drug Rcbatc Program ("MDRP") statutcs' bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HIM and not a drug mannfacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entityl, not HHS or a drugmaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.3I Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has bcen made - meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a -covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only gfier the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statutc grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance -1 42 U.S.C. 256b(a)(l ) " lndccd. thc 340B statute slates that thc covered entity may choosc - options- for billing 340B drugs to Mcdicaid. Spccifically. it states that the III IS may "developflimore detailed guidance describing methodologies and options amilable to covered entities for billing eovaed outpaticnt drugs to Statc Mcdicaid agencies in a rnanner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a sy stcm to ensurc that thc covered cntity does what thc statutc says it's obligated to do - prevent duplitmte discounts. Id. " 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reunbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the fonn is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rcbate payment under subsection (b) with respect to such a drug.- ) " 42 U.S.C. 256b(a)(5)(C). 42 U.S.C. 256b(a)(5)(C). 21 or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providcrs. Nevertheless, the 340B rebate model proposes to illegally usurp the covered cntity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfi-ont pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate- in a parenthetical of the statute's first paragraph docs not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute hecause it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebatc pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concemed that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements arc virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until aftcr thc manufacturer has paid the rebate. Specifically, CHCs arc rcquired to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending On whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal rcgulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical bencfit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. 35 See 42 U.S.C 256b(a)(5)(A). C.F.R. 447.518(a). 22 A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing thcm to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC pricc and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been falsc. This creatcs operational, financial, and lcgal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Mcdicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the pricc at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of' an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an crroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HI-IS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a scrious, unjustificd, and unprecedented misstep that threatens the stability of the entire 340B program and Mcdicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For cxamplc, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral cicaringhouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturcr's rebate liability is adjustcd, rather than the local CHC. 47 Ctrs. for Medicare & Medicaid Servs., IPA Y 2028 Final Guidance, II tips: vi.v.w.csiv,govitilovdocunieniiipay-2028-firtal- auidath..,.1.,II 23 Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as 'the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rehate model. In submitting comments regarding I IRSA's previous 340B rebate modcl, two statcs expressed serious concerns about how a 340B rcbate model would negatively impact the state for this reason. Specifically, the Pennsylvania Dcpartment of Hurnan Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for thcsc drugs will increase."39 The Oregon Health Authority commented, "Ulf Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."4 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managcd care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managcd care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmakcr, thc authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, statc Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that statcs must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entitics to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seizcd from them and given to drugmakers. This is not only an irresponsiblc policy; it is also quite a dangerous policy, as it creates a scrious impcdimcnt to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. IR 42 C.F.R. 447.502 " [14): Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095. htth. VIM 1.2:1i.111O1e, ." . k:1.1111I1Oll R.S.....i-21125-000 I -0095. Commcnt on Agency Information Collection Activities; Proposed Collection; 340R Drug Pricing Program, l)ocket No. HRSA-2025-0001-0980, Imp.. lk ions 20% !RSA-2023-0(M 24 Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectivcly raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which arc factorcd into the true -actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to ovcr-idcntify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the bcnefit of the 340B pricc on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of salc before rebate paymcnt. And it raises serious federal questions relating to whether a federal grantee may bc rcquircd to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B pricc. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Mcdicaid claims for reimbursement for drugs identified as 340B-eligible by thc covcrcd cntity that are ultimately denied a 340B rebate by drugtnakers. HRSA's authorization of this illegal framework would violatc the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managcd care plans, usc unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 4I See. e.g.. 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 42 42 C.F.R. 438.3(s)(7) The MCO, PII-IP. or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Numbcr (PCN) combination, and group number identilierii for all Medicaid managed care enrollee identification cards for phannacy benefits. haps: . 1.4,.cctr..O% current titte-42 ...h<iptcr-1\ Nuth.hapter- C odit-43,`. Neetuin-l3x 3 25 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as statcd above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shull not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) ofsuch Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act."'3 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with thc duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid P1an Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discountv The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whethcr a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codificd in federal regulations, interacts with the 340B Drug Pricing Program in a manncr designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs thc TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a -covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a -covered drug" for purposes of TRICARE's rctail network pricing and TRICARE's manufacturer rebate obligations.' The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligatc participants to identify 340B drugs to prevent the assessment or payment of TR1CARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug s 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the 41 42 U.S.C. 256tOX5XAXemphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 26 pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered cntity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also docs not gct the bencfit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mcchanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and thc health carc program for uniformed service members, retirees, and their families. D. Commercial Duplicatc Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any fcderally authorized program. The purposc of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statute's design rcflccts Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by 1QVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidancc, to transfer this valuable property away from covercd entities and into manufacturers' possession without compensation or a valid public use. That data will bc used by drugmakcrs to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.' They are negotiated with markct discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered cntities are forced to provide it. This is because manufacturers will use commercial claims data to disputc rebate obligations to Genesis Health Care, inc. v. Becerra, No. 4:19-ev-01531-RBH, slip op. (as.c. Nov. 3, 2023). 46 Kaldero.s, Sightlines Issue No. 3, Double, doubk, toil and trouble with commercial contracts, :wx .kahicros.cosn (Oct. 2023), N. 3. (stating that commercial claims data is worth billions of dollars). Kalderos, Sightlines Issue No. 3. Double. double, toil and trouble with commercial contracts, W WA. .Kaldcros.coin (Oct. 2023), Issue No_ 3. (stating that "5% of commercial rebates paid by munufacturers are likely duplicates with the 340B Drug Pricing Program rneaning a total of roughly $6 billion annually7) Kalderos, Sightlines Issue No. 3. Double. double, toil and trouble with commercial contracts, k.i'deros colt (Oct. 2023), I N. , 3. (widely uscd drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth --at lcast . . . $6 billion annually" in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double. double. toil and trouble with commercial contracts. %%%%..,,' .K.aldertis. CI Mil (()ct. 2023), (stating that "5% of commercial rchates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a lotal of roughly $6 billion annually."). Kaldcros, Sightlines Issue No. 3. Double. double, toil and trouble with commercial contracts. www ,Kahleros.com (Oct. 2023), Isitte No. 3. (rebate data is worth billions). 27 commercial PBMs, and those PBMs will then, in tum, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to cxclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-nct providcrs to generate savings on commercial 340B claims to offsct thc vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp thc 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chosc not to create one. Whcn Congress enacted the 340B statute, it includcd explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositivc. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission undcr thc rebate pilot exceeds the agency's statutory authority.53 Thc 340B statutc authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily cntitled. As the District of D.C. explained, "Congress therefore constrained thc Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."54 Even if thc statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silenec.~5i By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethcred to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount `' See, e.g., Genesis Health Care. Inc. v. Becerra. 701 F. Supp. 3d 3112, 330 (D.S.C. 2023) (stating that "the goul of the 340B statute ... is to makc 'covered cntitics' profitable in the face of the prescription drug price increases that followed thc Mcdicaid Drug Rebate Pmgram and thut continue to this day."). 52 34013 Report, Legislative Map: Contract Pharmacy Protection Bills, hups: 2-10breport. coin Islative-inav contract- phan [lacy -prk cvt i I I : 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, htrps: 2.40brcport.i0lri kill skin e-rnap. I a 54 s-ras,o.1-thai -pn i hi t-phrn- ut: cn 53 Pharmaccutical Research & Manufacturers of America v. t:.S. Department of Health & Human SaViVCS, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med l lealth System v. Health Rcsourccs & Scrviccs Administration, No_ 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3. 2026). " Sanofi Avcntis U.S. LLC v. U.S. Dep't of Health & Ilum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion. or otherwise not in accordance with law"). 28 prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the lirst time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers. including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered cntities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.S7 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purposc of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Pay ments to CHCs We respectfully assert that the 340B Rebate Pilot program must bc replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CNC paticnt eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebatc based on thc data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statutc grants thc covered entity discretion to determine which of its patients arc covcrcd. Importantly, thc statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, thc only provision that mcntions thc term -patient" in the 340B statute prohibits the covered entity - not HHS nor thc manufacturer from reselling or transferring 340B drugs to nonpatients.41 This is commonly referenced as the -diversion prohibition.- Thus, the statute exclusively grants the covered entity the authority to determine which of its patients arc eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care profcssionals because, after all, the health professional is responsible for establishing the paticnt rclationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugrnakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate s' 42 U.S.C. l320a-7b (making it illcgal to pay remuneration in exchange for itcms or services billable to federal health care programs.) 9 42 U.S.C. I 256b(a)(5)(B) 29 Pilot will dctcrmine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistancc Programs, which are mere payment systcms for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among othcr things. Hcncc, a rcbatc modcl is appropriatc for thcm. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual [s] registered in a State operated or funded AIDS drug purchasing assistance program from the requirements of `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program."59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.6 IX. Establishing a National, Ncutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burdcn of a rebate model. As described above, a 340B rebate pilot would impose significant cash tlow demands and administrative hurdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning thc fundamental structure of thc program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispcnsation. Thc NCC would aggregate this data and transmit it to the Mcdicarc Transaction Facilitator, which would usc it to identify claims that arc ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; idcntify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicatc covered cntity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 14 Notice Reganling Scction 602 of thc Vctcrans Hcalth Carc Act of 1992 Paticnt and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).l G0 H.R. REP. 102-384, 16 30 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliancc systems, and thc staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to COVer these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframc. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. lf a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about thc practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation proccsscs, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agcncics would no longer need to build, administer, or finance their own systems to identify 340B claims. lnstead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data scts. Medicare inflation rebates. CMS also needs 340B claims data to exclude 3408 drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutralio. For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, 31 covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with thc 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and thc platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must bc a foundational design principle for any national clearinghousc. For these reasons, we rccommend that the NCC be developed and administered either dircctly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, ncccssary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who rnay access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that thc NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for thc purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is cligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, nctwork participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to disputc rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 61 lutos: bcaconchannelmanaktmau%:orn rc.ourccs (Johnson & Johnson Policy Documents) 32 Sinccrcly, / Michael Stanley, CEO Grace Community Hcalth Cent nc. 33 E. Bipartisan Congressional Support Because a neutral clearinghouse offcrs a cost-effective and low-burden way to prcvcnt statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples includc: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral cicaringhouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan -Group of Six" Senators released draft scctions of this bill in early 2024. These sections included a neutral cicaringhouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sourccs. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperativc that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-nct providcrs that the 340B prop-am was designed to support. Conclusion Grace Health strongly urges HRSA to exempt Communit) Health Centers from any 3.1011 Rebate Model Pilot Program. The proposed rebate model departs from the core intcnt of the 340B prowam by shiffing financial and operational burden onto safety-net providers. It would create significant cash flow challenges, require costly administrative and IT investments, and force difficult tradeoffs in staffing, services, and medication access. Most critically, without upfront 340B pricing, CHCs will be unable to rcliably provide sliding fee discounts and affordable medications at the point of caredirectly impacting uninsured and vulnerable patients. This model will reduce access to care and harm the patients that the 340B program v$ as designed to serve. Grace Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot and looks forward to continuing to engage HRSA on this prominent issue. If you have any questions, please contact our PC, David Casey Whittaker, at casey.whittakerggracehealthky.org.
HRSA-2026-0001-1459Jackie Green · Louisville, KY, United States2026-04-14T04:00Z1,830 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of- pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Jackie Green Jackie Green Live Local Lightly Earth Home 40202 bikecourier.org/earth-home-40202/ Deep Ecology Louisville facebook.com/profile.php?id=61581836699217#
HRSA-2026-0001-1460Virginia Garcia Memorial Health Center2026-04-14T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1461Virginia Garcia Memorial Health and Wellness Center in Cornelius Oregon2026-04-14T04:00Z1,884 chars
My name is Becky and I am a Mentor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Becky Campbell Hillsboro, Oregon
HRSA-2026-0001-1462nathan pate · Paoli, IN, United States2026-04-15T04:00Z32 chars
duplicate of HRSA-2026-0001-1528
HRSA-2026-0001-1463Anonymous Anonymous2026-04-15T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1464Deborah Elder · Louisville, KY, United States2026-04-15T04:00Z1,685 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Deborah Elder
HRSA-2026-0001-1465Amalia Gonzalez2026-04-15T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1466Upper Great Lakes Family Health Center2026-04-15T04:00Z121,931 chars
Please see attached document. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. April 15th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Upper Great Lakes Family Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Upper Great Lakes Family Health Center anticipates an average loss of $925,453.02 annually in rebate opportunity cost, and an average increase in upfront annual drug spend of $3,661,451.10. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Upper Great Lakes Family Health Center in particular, this means it will impact: Approximately 31,000 eligible prescriptions for 26,218 individual patients served $3,044,000 already spent on administering and maintaining pharmacy programs for our patients The services we provide as some of the only healthcare providers in our rural area, including services that many local health systems are ceasing to provide, such as womens health services and behavioral health. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and 6 2025 UDA Data, HRSA (hrsa.gov) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Upper Great Lakes Family Health Center provided $90,630 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model, if not be completely eliminated. Staffing Impact: Upper Great Lakes Family Health Center anticipates needing 0.5 1 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Upper Great Lakes Family Health Center anticipates an increase of $24,000 annually to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Upper Great Lakes Family Health Center estimates that anywhere from 5-15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Upper Great Lakes Family Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $3,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 26,218 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $24,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 61 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across sixty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Western Upper Peninsula of Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Federally Qualified Health Centers are required to offer healthcare services to all patients regardless of their ability to pay. Upper Great Lakes Family Health Center extends this model to pharmacy services whenever possible. We provide discounted 340B medications to eligible patients who qualify for our Sliding Fee Program. In the current state, our pharmacies are able to provide this medication to the patient at point-of-sale with 340B pricing. If that pricing is not available at the point-of-sale, this could become not only administratively burdensome, but financially as well. In some situations, it may become outright impossible. When the Rebate Model Pilot was first introduced in 2025, many of our Third Party Administrators informed us that they could not support the extension of 340B pricing to our sliding fee patients; there has been no indication that this has changed. We are incredibly concerned that if this Rebate Model goes into effect, many of our patients will have no other choice than to go without life saving medications. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations historical purchase data, we estimate it would cost us an increase of $2,437,274.77 in annual drug spend for the 10 drugs included in the 2026 Rebate Model alone. By 2028, we would be looking at an increase of $4,658,760.83. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Upper Great Lakes Family Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Womens Health, Behavioral Health, and Financial Counselors, just as a few examples. Two years ago, a major health system decided to close the only hospital in the Ontonagon area. This left patients with no access to urgent or emergency care after normal business hours. Our clinic in Ontonagon is in a position to help increase access to urgent care, but this requires us to offer competitive compensation to attract and retain providers who are willing to deliver these services particularly during extended hoursin a remote area with significant workforce shortages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. Our clinics operate across a wide and geographically isolated service area, where recruiting providers is already extremely challenging. To maintain access to care, we must offer higher salaries than other health centers may. Needing to add new positions such as Rebate Coordinators to ensure we are receiving rebates on eligible claims would require us to eliminate or reduce essential positions. Each administrative position we need to hire would directly displace a fulltime Community Health Worker who supports our highestrisk patients, or dental hygienists and dentists who are already in critically short supply. This would further lengthen dental wait times, which are already unacceptably long in our area. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Upper Great Lakes Family Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Upper Great Lakes Family Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $989,515.78. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Upper Great Lakes Family Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $3,908,787.72. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize our limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Upper Great Lakes Family Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Upper Great Lakes Family Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $245,773.35. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. 20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. 23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In 23 Internal NACHC survey data Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may 28 42 U.S.C. 256b(a)(1) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. 36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does 36 C.F.R. 447.518(a). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. 44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. 44 32 C.F.R. 199.21(q)(2)(iii)(E) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. 48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra- statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. 58 This is commonly referenced as the diversion 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 58 42 U.S.C. 256b(a)(5)(B) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59 And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Providing exceponal health care services for all people in the Upper Great Lakes region regardless of their ability to pay. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Upper Great Lakes Family Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Upper Great Lakes Family Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Upper Great Lakes Family Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Anna Rumbles, Director of Pharmacy Services, anna.rumbles@uglhealth.org. Sincerely, Trevor Hodges Chief Executive Officer Upper Great Lakes Family Health Center
HRSA-2026-0001-1467Victoria Pedraza · Forest Grove, OR, United States2026-04-15T04:00Z1,905 chars
My name is Vicki and I am a Sr. Manager of Customer Care at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Vicki Pedraza Forest Grove, Oregon
HRSA-2026-0001-1468Virginia Garcia Memorial Health Center2026-04-15T04:00Z1,885 chars
My name is Rosario and I am a Pharmacy Tech at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Rosario Murillo McMinnville, Oregon
HRSA-2026-0001-1469Chelsea McGuire · Portland, OR, United States2026-04-16T04:00Z950 chars
I am a family physician practicing in Oregon at a FQHC. The current 340B program is incredibly important to our ability to serve our patients and ensure access to critical medications with fewer barriers. The proposed 340B Rebate Model Pilot Program would require health centers like ours to pay full price for certain medications and receive discounts later as rebates. This change will: Increase upfront medication costs Disrupt access to medications for our patients Negatively impact care for patients with chronic conditions Our healthcare, food access, housing, transportation and parks and recreation systems, among others, all already disadvantage low income communities, putting them at higher risk of developing chronic conditions such as diabetes, hypertension and osteoporosis. Please do not advance this proposed 340B Rebate Model program, which would be a step-backward instead of forward for our patients. Thank you.
HRSA-2026-0001-1470The Ohio Society of Health-System Pharmacy2026-04-15T04:00Z11,395 chars
Attached is the response of the Ohio Society of Health-System Pharmacy. April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of the hundreds of Ohio Hospital and Health-System pharmacists, technicians, and interns, the Ohio Society of Health-System Pharmacy appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer- imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug- specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Daniel Arendt Director of Legislative Affairs The Ohio Society of Health-System Pharmacy
HRSA-2026-0001-1471(no commenter metadata)2026-04-14T04:00Z9,936 chars
Sending anonymous to avoid discrimination by drug manufacturers. As a Mississippi Disproportionate Share Hospital strongly opposes the implementation of a rebate model to effectuate the 340B ceiling price. A rebate model does not improve the 340B Program. It restructures it in ways that benefit manufacturers at the direct expense of covered entities and the patients they serve. Under such a model, safety-net providers would be required to pay full acquisition cost upfront, wait for manufacturer-controlled reimbursement, manage claim-level denials, and absorb the administrative and financial burden of a system designed to serve manufacturers compliance interestsnot patients access to affordable medications. The 340B statute authorizes a ceiling price. It does not authorize manufacturers to construct a payment framework that imposes conditions, timelines, and adjudication discretion that effectively erode that price in practice. The upfront discount model enforces the ceiling price at the point of purchase. A rebate model transforms each transaction into a negotiationone in which manufacturers hold the leverage. As a Disproportionate Share Hospital in Mississippi, this covered entity operates on thin margins while serving a high-need population, including many uninsured and underinsured patients. The cash flow disruption, staffing burden, and denial risk inherent in a rebate model are not theoretical concernsthey are direct threats to the ability to maintain access to medications for vulnerable communities. HRSAs mission is to protect that access, not to introduce new mechanisms that undermine it. If HRSA proceeds with a pilot, the safeguards outlined in this comment represent the minimum necessary to prevent harm. However, the appropriate course is not to redesign the program around a rebate model. The appropriate course is to preserve the longstanding upfront discount structure that has functioned effectively for decades and to focus program integrity efforts on standardized, enforceable, and auditable compliance measures that do not fundamentally alter the programs payment architecture. Request for Information: 340B Rebate Model Pilot Program Comment Submission Mississippi Disproportionate Share Hospital (DSH) Re: HRSA 340B Rebate Model RFI Introduction and Position On behalf of a Mississippi-based Disproportionate Share Hospital (DSH), we appreciate the opportunity to respond to HRSAs Request for Information regarding potential changes to the 340B Drug Pricing Program, including the introduction of a rebate-based model. Our hospital serves a high proportion of uninsured and underinsured patients across a largely rural region. The 340B Program is foundational to our ability to maintain access to essential medications and sustain critical clinical services. Any structural changes to how 340B pricing is delivered must be evaluated through the lens of patient access, operational feasibility, and financial stability. We strongly oppose replacing or functionally converting the current upfront discount structure into a rebate-driven system. While we recognize HRSAs interest in addressing program integrity and manufacturer concerns, a rebate model introduces significant risks that outweigh any perceived benefits. Reliance on the Current Model For decades, the 340B Program has operated as an upfront discount mechanism. Hospitals like ours have built compliant systems, pharmacy workflows, and financial planning processes around that structure. This predictability allows us to stretch limited resources and reinvest savings directly into patient care. A rebate approach would fundamentally alter that framework. Instead of receiving the ceiling price at the point of purchase, we would be required to pay higher acquisition costs and then seek reimbursement after the fact. This shift alone introduces uncertainty, delays, and administrative burden that are incompatible with safety-net operations. Operational and Administrative Burden Even under the current model, maintaining 340B compliance requires substantial effort staffing, split-billing systems, audit readiness, and ongoing monitoring. A rebate model would layer on entirely new processes, including: Claim-level data extraction and submission Tracking manufacturer adjudications and timelines Managing denials, appeals, and resubmissions Request for Information: 340B Rebate Model Pilot Program Reconciling payments across multiple systems Expanding compliance and audit documentation These are not minor adjustmentsthey represent a parallel infrastructure that would divert resources away from patient care. Based on our internal estimates, the added annual cost could range from approximately $120,000 to $180,000, not including indirect operational disruption. Smaller and rural hospitals like ours would be disproportionately affected, as we lack the scale to absorb these new administrative demands without external support. Cash Flow and Financial Risk The most immediate concern with a rebate model is the shift in financial risk to covered entities. Under the current system, pricing is known and realized at purchase. Under a rebate system: We would pay full or near-full price upfront Reimbursement would depend on manufacturer review Payment timing would be uncertain and potentially delayed Even with strict timelines, delays caused by data discrepancies, denials, or contract pharmacy lag would create real cash flow challenges. For hospitals operating on thin margins, this could directly impact our ability to maintain drug inventories and patient services. Denial Risk and Manufacturer Control A rebate model inherently gives manufacturers greater control over whether and when 340B pricing is realized. Without strict and enforceable guardrails, this creates the risk of: Inconsistent or subjective denial practices Additional documentation requirements beyond HRSA standards Retroactive claim challenges Increased disputes requiring appeal To prevent misuse, any rebate framework would require standardized denial codes, strict timelines, automatic approvals when deadlines are missed, and meaningful penalties for noncompliance. Without these protections, the model could effectively erode access to 340B pricing. Request for Information: 340B Rebate Model Pilot Program Data, Privacy, and Security Concerns A claim-level rebate system would require expanded data sharing far beyond what is currently necessary to access 340B pricing. This raises several concerns: Increased administrative burden related to data collection and validation Heightened cybersecurity and privacy risks Potential for manufacturers to request non-standard or excessive data elements If pursued, HRSAnot manufacturersmust define a limited, standardized dataset and enforce strict minimum necessary principles. Impact on Contract Pharmacies and Patient Access Contract pharmacies are essential for reaching patients in rural and underserved areas. A rebate model could destabilize these arrangements by introducing additional complexity, system requirements, and uncertainty around reimbursement. At a time when manufacturers have already restricted access through contract pharmacy limitations, adding further barriers would likely reduce participation and directly impact patient access to medications. Program Integrity Considerations We support HRSAs goal of strengthening program integrity, including preventing diversion and duplicate discounts. However, these objectives can be achieved through targeted, standardized solutionssuch as improved data alignment and enforcement mechanismswithout overhauling the pricing structure of the program. A rebate model increases complexity and, paradoxically, may introduce new avenues for error and dispute. If a Pilot Is Considered While we do not support implementation of a rebate model, if HRSA elects to proceed with a pilot, it is critical that: Participation is voluntary for covered entities The scope is limited and time-bound Covered entities are held financially harmless Request for Information: 340B Rebate Model Pilot Program Manufacturers bear administrative costs A centralized, neutral clearinghouse is used Payment timelines are strictly enforced with penalties Denial criteria are narrowly defined and standardized Absent these protections, a pilot would expose covered entities to unacceptable levels of risk. Conclusion a. The 340B Program is a cornerstone of the healthcare safety net in Mississippi. Its effectiveness depends on the ability of covered entities to access predictable, upfront pricing and reinvest those savings directly into patient care. b. A rebate model would fundamentally undermine that structure. By shifting financial risk to covered entities, introducing administrative complexity, and enabling delays and denials, it threatens to erode the value of the program and reduce access to medications for the very patients the program is intended to serve. c. The challenges cited in support of a rebate model do not justify a wholesale restructuring of the program. More targeted, enforceable solutions exist that can address program integrity without placing additional burden on safety-net providers. d. For Mississippi DSH hospitals and similarly situated providers, the risks are not theoretical they are immediate and material. A rebate model would divert limited resources away from patient care, strain already thin operating margins, and create barriers to timely medication access. e. For these reasons, HRSA should not move forward with a rebate-based approach. Preserving the current upfront discount model is essential to maintaining the stability, effectiveness, and intent of the 340B Program.
HRSA-2026-0001-1472Ohio Association of Community Health Centers2026-04-14T04:00Z21,362 chars
Please see attached from the Ohio Association of Community Health Centers. 1 April16, 2026 Chantelle Briton Director Office of Pharmacy Affairs Health Resources and Services Administraon 5600 Fishers Lane Rockville, MD 20857 RE: Request for Informaon: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Briton: On behalf of the Ohio Association of Community Health Centers (OACHC), thank you for the opportunity to provide comments on HRSAs Request for Informaon (RFI) regarding a potenal 340B rebate pilot. This leter supplements those submited by our states Community Health Centers, which provide health cetner-specific data in response to quesons raised in the RFI. OACHC supports 61 Federally Qualified Health Centers (FQHCs) and FQHC Look-Alikesbetter known as Community Health Centers (CHCs). Together, these CHCs deliver comprehensive primary care to more than one million Ohioans through 600+ sites located in 76 of Ohios 88 counties. Community Health Centers are nonprofit providers dedicated to ensuring access to comprehensive, integrated, whole-person care for medically underserved populations, regardless of insurance status. For over 60 years, CHCs have provided essential services often under one roof, including medical, dental, behavioral health, vision, pharmacy, and supportive care. Summary of Recommendaons: In short, OACHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered enty (CE). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 2 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the upfront financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negave financial impacts on CHCs and their paents. Summary of Comments: In these comments, OACHC explains: A. The importance of 340B savings to Ohio CHCs ability to provide high-quality, affordable comprehensive primary care, including behavioral health and dental care, to over a million low-income and uninsured paents. B. How a rebate model will create massive cashflow, administrave, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potenally stop providing rebate drugs enrely resulng in avoidable harm to paents health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protecons that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creang the harms. A. 340B savings underwrite a wide range of services that CHCs low-income paents rely on. CHCs serve as the backbone of the naons safety net. Naonally, in 2024 they served over 32 million paents, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these paents with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceucals regardless of their ability to pay. 340B savings are essenal to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured paents. Consistent with federal law3 and regulaon4, CHCs invest every penny of 340B savings into acvies that expand access to care for the underserved populaons they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Ohio, CHCs rounely rely on 340B savings to support services such as: dental care, SUD treatment, nutrion programs, 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Source: htps://data.hrsa.gov/topics/healthcenters/uds/overview/naonal 3 Secon 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 mental health services, school-based health programs, care coordinaon and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reducons in savings will lead directly to reducons in care for CHC paents. As a result, the rebate model will undermine not only paent access to affordable medicaons, but also the broader system of care that CHCs have built to meet their paents needs. B. A rebate model will create massive cashflow, administrave, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs esmated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 mes more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a mul-step financing process; other steps (e.g., waing for drugs to be dispensed, meeng wholesaler payment deadlines) will sll force CHCs to borrow substanal amounts of cash. Comments submited by Ohios CHCs will provide details on these financing needs. Also note that CHCs face substanal difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negave margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across mulple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negoated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incenvized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a paent because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on 4 units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulng from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potenally stop providing rebate drugs enrely resulng in avoidable harm to paents health. Reduction in services: As required by law and regulaon, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved paents. Thus, every me 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their paents currently depend. The impacts will extend far beyond affordable pricing on medicaons, to all the types of services underwriten by 340B savings (as described in Secon A.) Eliminating rebate-based dispensing practices: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starng in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income paents. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that connue purchasing them under 340B expect to be forced to offer smaller discounts to their paents, for the same reasons. As a result, CHCs paents will face higher out-of-pocket costs, parcularly for high-cost therapies. This will oen lead to delays in starng or connuing treatment, and increased non-adherence, causing rates of avoidable complicaons and hospitalizaons to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerang how a rebate model will impact their operaons and paent access. These claims ignore the financial realies that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restricons have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. 5 o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., liing the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflaon-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that that CHCs in Ohio have already taken steps in response to lower 340B savings e.g., laying off staff, reducing services lines, hiring freezes, and stopping expansion plans. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrave burdens, reducons in services, harm to paents - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered enes. However, if HRSA insists on proceeding with a rebate model, it is crical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negoaon are commonly prescribed Part D medicaons, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negoaon. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protecons in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protecons into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to migate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: 6 Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough me to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no addional administrave costs of running the rebate model shall be passed onto the covered enes. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Atachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a paent because they are expired, damaged, etc. Since the creaon of the 340B program, CHCs have been able to atribute certain undispensed drugs to 340B (with proper documentaon), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effecvely transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essenal to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in mul-unit packages. 5. Prohibion on requiring BINs or PCNs on rebate claims. These two data elements are both: 7 Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to idenfy drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflaon Rebate Program. Not always available to the covered enty. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered enes. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effecvely eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrave rules. There are mulple administrave decisions involved in establishing and operang a rebate model. HRSA should establish a standardized set of procedures and meframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and melines for the same issue. (For example, in December 2025, each manufacturers established different rules and melines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplicaon at a ny fracon of the cost and administrave burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrave burdens on covered enes (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplicaon5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fracon of the cost and administrave burden as the rebate model, through the creaon of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substanally reduce administrave burden on CEs. By reducing costs on CE, avoid the service reducons that would result from a rebate model. Provide manufacturers with the necessary deduplicaon data within the same 45-day meframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. 5 Health Resources and Services Administraon 340B Program Noce: Applicaon Process for the 340B Rebate Model Pilot Program, August 1, 2025. htps://federalregister.gov/d/2025-14619 8 Conclusion In closing, the sustainability of our naons primary care safety netand the ability of their 32 million low-income and uninsured paents to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reducons in the essenal services these paents rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, parcularly the financial effects a rebate model will have on CHCs, and how this will impact paents who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternaves -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or paent access to care. Thank you for your consideraon and for your connued commitment to the naons safety net. For further informaon, please feel free to contact me at jdirossi@ohiochc.org. Sincerely, Julie DiRossi-King CEO & President Ohio Associaon of Community Health Centers 9 Atachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and subming rebate requests. Monitoring which requests were paid. Dispung denials. Explaining to paents why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquision Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automacally entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporng requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (esmated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluang cash flow needs and seeking credit opons. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenng the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1473Yale New Haven Health2026-04-14T04:00Z5,442 chars
See attached file(s) Bridgeport Hospital | Greenwich Hospital | Lawrence + Memorial Hospital | Westerly Hospital Yale New Haven Hospital | Northeast Medical Group April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA202603042 Dear Administrator Engels: On behalf of Yale New Haven Health, Connecticut ("YNHH"), we appreciate the opportunity to comment on the Department of Health and Human Services Request for Information regarding a potential 340B Rebate Model Pilot Program (the "RFI"). These comments reflect YNHHs current operational experience and goodfaith estimates based on information available at this time and are not intended to constitute binding commitments, admissions of fact, or concessions regarding compliance or future operational capabilities. The RFI asks whether HRSA should implement a rebate model under the 340B Program instead of the longstanding upfront discount framework. Based on YNHHs experience, a rebate mechanism as described in the RFI or prior pilot efforts would impose substantial administrative, operational, and financial burdens that are likely to outweigh any anticipated benefits. Administrative Costs. Implementation of a rebate program would require YNHH to incur significant additional administrative costs beyond those associated with the existing upfront discount model on which our systems and staffing have long been based. Based on preliminary, scenariodependent estimates, a rebate model could require up to approximately 120 additional staff hours per week across multiple functions. These estimates are illustrative and subject to change depending on final program design, the scope of covered drugs, data requirements, vendor participation, and disputeresolution processes. Staffing Impacts. YNHH does not currently maintain excess staffing capacity for rebatebased claims processing. Under a potential rebate model, YNHHS may need to hire additional fulltime employees and/or reallocate existing staff from other operational or compliance activities. Early estimates contemplate the possible addition of approximately three fulltime employees, though actual staffing needs would depend on final program details and manufacturer implementation practices. Systems and Infrastructure. YNHHs current information technology and operational infrastructure was designed to support an upfront discount model. Transitioning to a rebate model would require system modifications, additional compliance workflows, and potential engagement of thirdparty vendors, as well as ongoing legal and consulting support. Many of these costs would be recurring, and precise cost estimates cannot be determined without detailed program specifications. Data Collection. A rebate model would require YNHH to compile, validate, and submit data drawn from multiple internal systems. To the extent such data is not currently required for receipt of upfront ceiling prices, these requirements would represent new and ongoing administrative burdens. Any estimates provided reflect YNHHs current understanding and may evolve as program details become available. Cash Flow and Timing Impacts. A rebate mechanism would require YNHH to purchase drugs at prices above the 340B ceiling price and await reimbursement of statutory discounts. The resulting timing delays including the potential for disputed or denied rebatescould materially affect cash flow, financial planning, and YNHHs ability to allocate resources to patient care, a particular concern to mission critical care delivery for vulnerable populations. Reliance Interests. YNHH has reasonably relied on HRSAs longstanding use of the upfront discount model in structuring its operations, staffing models, thirdparty relationships, and communitybenefit initiatives. A fundamental shift to a rebate framework would disrupt these reliance interests and impose transition costs that are neither speculative nor minimal, but instead grounded in decades of program experience. ThirdParty Platforms. During prior rebate model efforts, YNHH encountered challenges related to thirdparty technology platforms, including evolving terms, datahandling concerns, and limited transparency in disputeresolution processes. These observations underscore the importance of robust safeguards, clear standards, and accountability mechanisms in any future program design. Conclusion. For the reasons described above, YNHH respectfully submits that, based on currently available information, the likely costs and burdens of a rebatebased 340B model would exceed any anticipated benefits. YNHH urges HRSA to preserve the upfront discount framework or, alternatively, consider less burdensome approachessuch as a neutral thirdparty clearinghouseshould additional deduplication mechanisms be deemed necessary. YNHH appreciates the opportunity to provide these comments and remains willing to engage constructively with HRSA should the agency seek further information or stakeholder input on specific program designs. Sincerely, Marjorie Lazarre Marjorie Lazarre, PharmD MBA VP & Chief Pharmacy Officer, System Pharmacy Services Yale New Haven Health
HRSA-2026-0001-1474(no commenter metadata)2026-04-14T04:00Z9,481 chars
This comment is submitted anonymously by a Louisiana Critical Access Hospital to avoid potential retaliation or discriminatory practices by pharmaceutical manufacturers. A Louisiana Critical Access Hospital firmly rejects any move toward implementing a rebate-based model to achieve the 340B ceiling price. A rebate structure does not strengthen the 340B Programit fundamentally alters it in a way that shifts cost, complexity, and risk onto providers while advantaging manufacturers. Under a rebate approach, rural safety-net hospitals would be forced to purchase medications at full price, wait on manufacturer reimbursement, navigate claim-level adjudication, and manage denialsall while carrying the financial and administrative burden of a system that prioritizes manufacturer oversight rather than patient access. The intent of the 340B statute is clear: covered entities should have access to medications at or below the established ceiling price. That intent is fulfilled through the current upfront discount model. Replacing it with a rebate system introduces unnecessary friction and uncertainty. Instead of ensuring access at the point of purchase, it creates a delayed and conditional process where manufacturers effectively control whether and when the ceiling price is realized. As a Critical Access Hospital in Louisiana, this organization operates with limited resources to serve rural communities with high levels of need, including patients who are uninsured or underinsured. The operational realities of a rebate modelcash flow delays, increased staffing demands, and the likelihood of denied or disputed claimspose a direct risk to maintaining consistent access to medications. These are not theoretical concerns; they represent real operational threats to rural healthcare delivery. HRSAs role is to preserve and strengthen access for vulnerable populations. Introducing a rebate mechanism moves in the opposite direction by adding instability to a program that currently provides predictable and reliable support to safety-net providers. Should HRSA move forward with any form of rebate pilot, it must include strict protections to prevent harm to covered entities. However, no set of safeguards can fully address the structural issues inherent in a rebate model. The appropriate path forward is to maintain the established upfront discount system and to focus on improving program integrity through clear, consistent, and enforceable standards that do not shift financial risk onto providers. Request for Information: 340B Rebate Model Pilot Program Comment Submission Louisiana Critical Access Hospital (CAH) Re: HRSA 340B Rebate Model RFI Introduction and Position On behalf of a Louisiana Critical Access Hospital, we appreciate the opportunity to respond to HRSAs Request for Information regarding potential changes to the 340B Drug Pricing Program, including consideration of a rebate-based approach. Our facility operates in a rural area where access to care is already limited, and a large portion of our patients are uninsured or underinsured. The 340B Program is not supplemental for usit is essential to keeping services available and medications accessible in our community. We strongly oppose any effort to transition the program from its current upfront discount structure to a rebate model. While the stated intent may be to address program integrity concerns, the practical effect would be to introduce instability, increase administrative burden, and place new financial strain on providers least equipped to absorb it. Reliance on the Current Model The existing 340B framework provides certainty. We are able to purchase medications at the ceiling price at the time of acquisition, which allows us to manage inventory, forecast expenses, and maintain consistent patient access. Replacing that model with a rebate process would upend this predictability. Instead of knowing our costs upfront, we would be required to operate in a system dependent on delayed reimbursement and external adjudication. For a Critical Access Hospital, that level of uncertainty is not workable. Operational and Administrative Burden Participation in 340B already requires careful oversight, dedicated staff time, and investment in systems. A rebate model would add a second layer of processes that are far more complex and resource-intensive. This would include submitting claim-level data, tracking manufacturer decisions, resolving disputes, and reconciling payments across multiple platforms. For a small rural hospital, these are not incremental tasksthey represent a fundamental expansion of administrative workload. Request for Information: 340B Rebate Model Pilot Program We would likely need to invest in new systems, rely on outside vendors, and divert staff from patient-focused responsibilities. Estimated additional costs of $110,000 to $185,000 annually would be significant for an organization of our size. Cash Flow and Financial Risk The most concerning aspect of a rebate model is the shift in financial responsibility. Currently, we benefit from the 340B price at the point of purchase. Under a rebate system, we would be required to pay a higher price upfront and then wait for repayment. That delay combined with the risk of denials or disputescreates real financial exposure. Critical Access Hospitals operate with limited reserves. Even short-term disruptions in cash flow can affect our ability to maintain medication supply and continue services without interruption. Denial Risk and Manufacturer Control A rebate framework would place significant authority with manufacturers to determine whether payments are approved, delayed, or denied. This introduces a level of subjectivity and variability that does not exist under the current model. For small hospitals, navigating denials and appeals would require time and expertise that we do not have in excess. Even with guardrails, the potential for inconsistent decisions and prolonged disputes makes this model inherently unreliable for a safety-net program. Data, Privacy, and Security Concerns A rebate system would require far more detailed data submission at the claim level, increasing both workload and risk. Rural hospitals are not structured to manage large-scale data exchanges with multiple external entities, particularly when requirements may vary. Expanding data sharing also increases exposure to privacy and cybersecurity risks that must be carefully considered. Any additional data requirements would need to be minimal, standardized, and strictly controlledthough even then, the burden remains significant. Request for Information: 340B Rebate Model Pilot Program Impact on Contract Pharmacies and Patient Access Contract pharmacies are a critical extension of care in rural Louisiana. They allow us to reach patients who would otherwise face significant barriers to accessing medications. A rebate model would introduce new operational challenges that could discourage participation by pharmacies and administrators. Combined with existing manufacturer limitations, this could further restrict access and leave patients with fewer options. Program Integrity Considerations We support efforts to strengthen oversight and ensure compliance within the 340B Program. However, those goals can be achieved without fundamentally altering how the program delivers pricing. A rebate model does not simplify complianceit adds layers of complexity that increase the likelihood of errors, disputes, and delays. There are more direct and effective ways to address program integrity concerns without creating new burdens for covered entities. If a Pilot Is Considered Although we do not support moving forward with a rebate model, if HRSA chooses to test such an approach, it must be designed with strict limitations: Participation must be voluntary Scope must be narrow and time-limited Covered entities must be fully protected from financial loss Manufacturers must absorb all administrative costs A centralized, neutral clearinghouse must be used Payment timelines must be enforced without exception Denials must be limited, standardized, and transparent Without these protections, participation would not be feasible for a Critical Access Hospital. Conclusion a. The 340B Program is essential to maintaining access to care in rural Louisiana. Its current structure allows hospitals like ours to operate with a degree of financial certainty that is necessary to serve vulnerable populations. Request for Information: 340B Rebate Model Pilot Program b. A rebate model would replace that certainty with delay, complexity, and riskfundamentally weakening the programs effectiveness. c. For Critical Access Hospitals, the impact would be immediate and significant. Increased administrative demands, unpredictable reimbursement, and cash flow strain would directly affect our ability to provide care. d. This is not a theoretical concern. A rebate system would shift resources away from patient services and introduce barriers that could limit access to medications in already underserved areas. e. For these reasons, HRSA should not pursue a rebate-based approach. Preserving the current upfront discount model is critical to ensuring the 340B Program continues to function as intended and support the communities that rely on it.
HRSA-2026-0001-1475North Country Family Health Center, Inc.2026-04-14T04:00Z14,631 chars
See attached file(s) April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton, On behalf of North Country Family Health Center, Inc. and the over 21,000 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. North Country Family Health Center was founded in 1971 to meet the needs of an underserved population in rural, northern NY. Our organization has been serving families from our community for decades and relies heavily on the 340B Program to ensure our scarce resources are stretched as far as possible to further our mission of improving the health, wellness, and quality of life of the individuals of Jefferson and Lewis Counties. The proposed shift of responsibility from manufacturers to safety-net providers, like us (federally qualified health centers (FQHCs) also known as community health centers (CHCs)) via a rebate model would pose significant operational and financial challenges. Summary of Recommendations In short, North Country Family Health Center, Inc. strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. Background A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For North Country Family Health Center, Inc., a 340B Rebate Model Pilot Program will impact: Our ability to provide direct patient care including to our significantly underfunded school-based health programs. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices. This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire additional staff or outsourcing additional consulting time to manage these complicated requirements. We estimate the cost to hire additional staff to be $35,000- 50,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Significant investment on our part will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. North Country Family Health Center, Inc. helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as our school-based health services. Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours or staffing which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion North Country Family Health Center, Inc. strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low- income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact me at jhorton@nocofamilyhealth.org. Sincerely, Joey Marie Horton Chief Executive Officer North Country Family Health Center
HRSA-2026-0001-1476Brazos Valley Community Action Agency, Inc. dba HealthPoint2026-04-14T04:00Z41,122 chars
See attached file(s) (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 Date: April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I. Introduction and Organizational Overview HealthPoint respectfully submits the following comments in response to the Health Resources and Services Administration's (HRSA) Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program (Docket No. HRSA-2026-03042). HealthPoint appreciates HRSA's extension of the comment deadline to April 20, 2026, which has allowed us to conduct a thorough analysis of the operational, financial, and legal risks this proposal poses to our organization and the patients we serve. HealthPoint is a Federally Qualified Health Center (FQHC, also referred to as a Community Health Center or CHC) serving approximately 44,000 patients annually across 12 clinic sites in 8 counties (Brazos, Burleson, Grimes, Leon, Madison, Waller, Trinity, and Robertson) in rural central Texas. Our patient population includes a high proportion of uninsured, medically underserved, and economically vulnerable individuals, as well as Medicaid beneficiaries. HealthPoint operates 1 in-house pharmacy and has 37 contract pharmacy partners. In FY 2025, HealthPoint processed approximately: 37,394 total 340B-eligible prescriptions o 33,566 in-house pharmacy o 3,828 contract pharmacies (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 generating approximately $838,000 in net 340B program savings after program administration costs. These savings are directly reinvested into patient care services, including: Sliding fee scale discounts for uninsured and low-income patients Behavioral health integration Chronic disease management programs Care coordination and care gap closure services Expanded pharmacy access across rural and underserved communities II. Position Statement HealthPoint strongly urges HRSA to exempt Federally Qualified Health Centers from the 340B Rebate Model Pilot Program. Transitioning from the current upfront discount model to a rebate-based model would impose severe and disproportionate harm on FQHCs such as HealthPoint. Specifically, such a transition would: 1. Create material cash flow risk by requiring upfront payment at full Wholesale Acquisition Cost (WAC), converting guaranteed savings into accounts receivable exposure. 2. Impose substantial new administrative and IT burdens on an organization already operating on narrow margins. 3. Require permanent additional staffing, diverting resources from direct patient care. 4. Introduce financial and operational instability that threatens patient access to life- sustaining medications. 5. Create serious legal compliance risks, including potential False Claims Act exposure under Medicaid billing requirements; and 6. Provide minimal incremental program integrity benefit for HealthPoint, which has elected Medicaid carve-out at the entity level, structurally addressing the duplicate discount risk the pilot was designed to mitigate. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 III. HRSAs Statutory Authority and Congressional Intent The 340B statute at 42 U.S.C. 256b(a)(1) authorizes the Secretary to enter into agreements with manufacturers taking into account any rebate or discount, as provided by the Secretary. This quoted clause cannot be read as blanket authorization for the rebate model HRSA now proposes. HRSAs authority under the 340B statute is bounded by its terms, which do not extend to imposing a rebate mechanism to resolve pricing conflicts between 340B discounts and the Inflation Reduction Act (IRA)s Maximum Fair Price (MFP) for Medicare Part D claims, a statutory context in which no duplicate discount prohibition exists.1 Congressional intent reinforces this limitation. The legislative history of the 340B program explicitly recognized that the appropriate pricing mechanism varies by covered entity type, directing the Secretary to use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. H.R. REP. 102-384(II). Congress further specified that [a] mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type. H.R. REP. 102-384(II). A rebate model is not the most effective or efficient mechanism for FQHCs, operationally, financially, and legally; it is precisely the opposite. Mandating it for covered entities whose existing compliance posture already addresses duplicate discount risk directly contradicts this express congressional direction. The IRA further constrains HRSAs authority in this context. The IRA requires only that a manufacturer make available the lower of MFP or the 340B ceiling price, it does not authorize manufacturers to charge above the 340B statutory ceiling price pending rebate adjudication. Applying a rebate model to resolve pricing conflicts between 340B discounts and Medicare MFP claims is therefore an ultra vires extension of HRSAs rebate authority and would directly contradict the IRAs plain protections for covered entities. This legal infirmity is not merely theoretical: on February 10, 2026, the U.S. District Court for the District of Maine vacated and remanded the pilot program in its entirety in American Hospital Association et al. v. Kennedy et al., No. 25-cv-600 (D. Me.). HHS is now reconsidering whether a rebate model can be implemented consistently with its statutory authority, a question HealthPoint submits must be answered in the negative as applied to FQHCs. 1 The Inflation Reduction Acts Maximum Fair Price (MFP) mechanism applies to Medicare Part D claims. The 340B programs duplicate discount prohibition codified at 42 U.S.C. 256b(a)(5)(A) applies separately to Medicaid fee-for-service claims. These are legally distinct protections governing different payer contexts. HealthPoints opposition to the rebate model encompasses both: the IRA/MFP context (Medicare) and the classic duplicate discount prohibition (Medicaid), each of which presents independent grounds for FQHC exemption. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 HealthPoint concurs with the legal analysis advanced by the National Association of Community Health Centers (NACHC) that the 340B statutes duplicate discount prohibition applies exclusively to Medicaid fee-for-service claims, a statutory protection that has no statutory analogue in the Medicare context. HRSAs attempt to import that Medicaid-specific construct into the Medicare MFP framework constitutes a textbook ultra vires action subject to challenge under 5 U.S.C. 706(2)(C) of the Administrative Procedure Act. See also Sanofi Aventis U.S. LLC v. HHS, 58 F.4th 696 (3d Cir. 2023) (affirming limits on HRSAs 340B enforcement authority). IV. HealthPoints Medicaid Carve-Out Election: A Dispositive Program Integrity Factor HealthPoint has elected Medicaid carve-out for its 340B program at the entity level. Under this billing election, HealthPoint does not submit 340B-priced drug claims to Texas Medicaid Prescription Program for reimbursement. HealthPoint is listed on HRSAs Medicaid Exclusion File, which directs that 340B acquisition prices may not be used as the basis for Medicaid billing. This is a billing election, not a purchasing restriction, HealthPoint continues to purchase drugs through the 340B program, structurally eliminating any duplicate discount between the 340B ceiling price and the Medicaid drug rebate. For Medicaid managed care claims, HealthPoint maintains processes consistent with CMS requirements. This entity-level election is highly material to the program integrity rationale offered in support of the rebate pilot. HealthPoint does not submit 340B-priced drug claims to Texas Medicaid Prescription Program for reimbursement, and Medicaid managed care claims are handled consistent with applicable carve-out requirements. As a direct result: The duplicate discount risk between Medicaid rebates and 340B discounts is already structurally eliminated at the transaction level. HealthPoint maintains existing controls specifically designed to ensure carve-out compliance. The HRSA-articulated rationale for the rebate pilot, addressing IRA Maximum Fair Price (MFP) and 340B deduplication, does not require a rebate mechanism to accomplish its stated integrity goals for Texas-based FQHCs. The administrative and financial burden imposed by a rebate model would not be proportionate to any marginal compliance enhancement achievable for HealthPoint. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 Imposing a nationwide rebate framework that disregards covered entities existing Medicaid billing posture would penalize compliant FQHCs, including those that have already elected carve-out, without advancing the programs core integrity objectives. HRSA should explicitly exempt FQHCs with an entity-level Medicaid carve-out election from any 340B rebate model pilot or rebate-based pricing requirement. V. Cash Flow Risk and Financial Exposure A. Current Upfront Discount Model Under the current model, HealthPoint purchases covered outpatient drugs at the 340B ceiling price at the time of acquisition. Drug purchases are paid to wholesalers under standard payment terms. This structure provides complete predictability and immediate recognition of savings. HealthPoints average monthly ($138,177.25) 340B drug purchasing volume is approximately $1,658,127.07 annually at ceiling price, under standard wholesaler payment terms of 10 days for McKesson and 30 days for Cardinal B. Risk Under a Rebate Model Under a rebate model, HealthPoint would be required to pay full WAC acquisition cost upfront, submit claims for rebates, and then await adjudication and payment from manufacturers. This shift transforms guaranteed upfront pricing into accounts receivable exposure. Under a rebate model, HealthPoints annual 340B drug purchasing volume at full WAC pricing would be approximately: $3,714,000 in FY 2026; an estimated $5,295,000 in FY 2027; and an estimated $5,500,000 in FY 2028. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 Based on prior experience with MFP deduplication adjudication timelines, a rebate delay of 55 days or more would expose HealthPoint to substantial working capital shortfalls. This exposure reflects only drugs currently on the IRA/MFP drug list; as additional drugs enter the negotiation program beginning in 2027, HealthPoints total financial risk under a rebate model will increase materially. HealthPoints internal trend data since January 2026 is consistent with an anticipated manufacturer denial rate of approximately 15 percent, compounding the cash flow exposure described above. FQHCs operate on narrow operating margins. HealthPoints operating margin for FY 2025 was approximately 2 percent, consistent with the national FQHC profile: nearly half of FQHCs nationally operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Introducing volatility into pharmacy purchasing costs would: Increase reliance on lines of credit and financial carrying costs Reduce budget predictability and disrupt annual financial planning Require dipping into limited financial reserves or taking on debt to fund drug procurement, defeating the statutory purpose of the 340B program to 'stretch scarce Federal resources' Potentially cause HealthPoint to exceed wholesaler credit limits, halting the ability to order medications until payments are submitted Jeopardize prompt-pay and sub-ceiling discounts that are negotiated with wholesalers. HealthPoints current McKesson Net-10 and Cardinal Net-30 terms enable prompt-pay discounts and access to sub-ceiling pricing that reduce overall drug costs below the statutory ceiling price. Compound the financial harm beyond the WAC-to-ceiling-price spread alone by forcing WAC-upfront purchasing, which would increase outstanding balances and threaten eligibility for these discounts Divert senior leadership attention from patient care operations to financial risk management The rebate model shifts financial risk from manufacturers to safety-net providers. This inversion is contrary to the statutory purpose of Section 340B of the Public Health Service Act. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 VI. Patient Access and Clinical Impact The patient impact of the rebate model is not abstract. Many drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions that are disproportionately prevalent among HealthPoint's patient population. HealthPoint's patients have a significantly higher burden of chronic conditions including diabetes, hypertension, cardiovascular disease, and obesity compared to commercially insured populations. For these patients, 340B-supported medication access is not supplemental, it is primary. A. Specific Drug Access Concerns Direct oral anticoagulants (DOACs) such as apixaban (Eliquis) and rivaroxaban (Xarelto) are critical therapies for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many HealthPoint patients, minimal and often less safe alternatives exist. Research demonstrates that discontinuing these medications leads to a statistically significant increase in the risk of stroke, heart attack, and death. Access disruption is not a clinical inconvenience; it is a life-safety risk. Older alternatives such as warfarin require frequent laboratory monitoring and dose adjustments, increasing both patient contact burden and laboratory costs, an inferior substitution for an already high-volume, resource- constrained patient population. SGLT2 inhibitors such as dapagliflozin (Farxiga) and empagliflozin (Jardiance) are a standard of care for Type 2 Diabetes, chronic kidney disease, and heart failure , all highly prevalent in HealthPoints rural Texas service area. Research has demonstrated that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. Insulin access is particularly critical. With a significant proportion of HealthPoint's patient population requiring essential diabetes care, affordability of insulin is a matter of life and death. Critically, Executive Order No. 14273 conditions future Section 330(e) funds on FQHCs providing low-income patients with access to discounted insulin. Under a rebate model, there is currently no operational method to provide these discounted medications at the point of care, as the wholesaler price file would reflect full WAC rather than the 340B (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 price. This would directly preclude HealthPoint from fulfilling its legal obligation to offer the required discount at the point of sale. Behavioral health medications entering the MDPNP in 2027, including atypical antipsychotics and tardive dyskinesia treatments, would similarly be affected. HealthPoint's integrated behavioral health model depends on reliable access to these medications for some of the most vulnerable patients we serve. B. Sliding Fee Scale Operational Impossibility HealthPoint is required by law to offer sliding fee discounts to patients at or below 200% of the federal poverty level. Under the current model, HealthPoint relies on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Under a rebate model, the wholesaler price file would reflect WAC rather than the 340B ceiling price. Pharmacy management software is not designed to incorporate manually overridden price files, and current systems continuously overwrite manually entered 340B prices with every wholesaler price load. This eliminates the operational ability to determine an accurate discounted patient price at the pharmacy counter. A rebate model does not merely complicate sliding fee scale compliance, it makes point-of-sale 340B discounting operationally impossible under current pharmacy system architecture. VII. Legal and Regulatory Compliance Risks A. False Claims Act Exposure HealthPoint faces serious False Claims Act exposure under a rebate model that is not present under the current upfront discount structure. Federal Medicaid regulations require that reimbursement be based on actual acquisition cost (AAC), with distinct methodologies for 340B and non-340B drugs. Under a rebate model, the wholesaler price file reflects WAC, not the 340B ceiling price, at the moment a claim is submitted. A drug is not confirmed as a 340B purchase until the manufacturer chooses to pay the rebate, which may occur 40 to 85 days after dispensing. The specific mechanism generating False Claims Act exposure for HealthPoint arises directly from Texas Medicaids Submission Clarification Code requirements, exposure that does not exist under the current upfront discount structure. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 Pharmacy billing software does not allow the use of an external price file, which would force HealthPoint to manually insert 340B acquisition cost values for each Medicaid claim, an operationally infeasible process that introduces systematic error risk. Submitting an erroneous Medicaid claim exposes HealthPoint to significant civil and criminal liability. The Texas Health and Human Services Commission (HHSC) Vendor Drug Program requires that all outpatient pharmacy claims filled with 340B stock for 340B-eligible patients be identified by submitting a value of 20 in the Submission Clarification Code (SCC) field (NCPDP field 420-DK). HHSC only excludes claims from its drug rebate invoicing system when this code is submitted; without it, the states automated system invoices the manufacturer for a rebatecreating a duplicate discount. Under a rebate model, however, the 340B status of a transaction is not confirmed until the manufacturer adjudicates and pays the rebate, potentially 40 to 85 days post-dispensing. HealthPoint would therefore be required to submit the SCC 20 code before knowing whether the manufacturer will ultimately recognize the transaction as 340B-eligible. If the manufacturer subsequently denies the rebate, HealthPoint will have submitted a claim under the 340B identifier for a transaction that did not receive the 340B price, claim that Texas HHSC requires be reversed and resubmitted, creating a cascading compliance burden and systematic false claims exposure with every adjudication cycle. B. HRSA's Statutory Authority Limitations HealthPoint concurs with the legal analysis advanced by NACHC that HRSA's rebate authority under 42 U.S.C. 256b(a)(1) is constrained by the 340B statute's bounds. That statute's duplicate discount prohibition applies exclusively to Medicaid fee-for-service claims, statutory protection that has no statutory counterpart in the Medicare context. HRSA's extension of its rebate authority to reconcile 340B pricing with the IRA's Medicare Maximum Fair Price, by importing a Medicaid-specific statutory construct into the Medicare program without congressional authorization, constitutes an ultra vires application of that authority. Furthermore, the 340B statute exclusively grants covered entities the authority to determine which patients are eligible for 340B drugs. By requiring upfront WAC pricing and allowing manufacturers to determine whether a rebate is owed, the proposed rebate model transfers that determination, and authority over patient eligibility status, from the covered entity to the manufacturer. This directly contradicts the plain language of the diversion prohibition at 42 U.S.C. 256b(a)(5)(B). (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 C. Commercial Claims Data HealthPoint strongly objects to any rebate pilot design that would require covered entities to submit commercial claims data to pharmaceutical manufacturers as a condition of accessing 340B pricing. Commercial claims data represents valuable proprietary information. Compelling its transfer to manufacturers without statutory authorization, without compensation, and in a context where manufacturers may use it to harm FQHCs through PBM contracting and network discrimination, is not authorized by the 340B statute and would be subject to serious legal challenge under the Administrative Procedure Act. VIII. Administrative and IT Systems Burden A. Current Administrative Structure HealthPoint currently maintains the following 340B administrative infrastructure: Current 340B compliance staffing: 0.5 FTE dedicated to 340B compliance functions. Current pharmacy reconciliation staffing: 0 FTEs dedicated to pharmacy reconciliation. Third-party administrators (TPAs): 340B Direct, Macro Helix, Well Partner, and Walgreens, at a combined annual cost of $210,870. These systems are optimized for the upfront discount model and would require fundamental redesign under a rebate framework. B. Incremental Burden Under a Rebate Model A rebate model would require HealthPoint to develop and maintain: Claims-level rebate submission processes and validation workflows Expanded data collection across NDC, prescriber, payer type, and MFP status fields Reconciliation of submitted versus paid rebates, with denial tracking and appeals management Custom pharmacy software modifications and API integrations with manufacturer rebate platforms Parallel documentation systems for clinic-administered drugs (CADs), many of which are currently maintained in paper logs Enhanced cybersecurity safeguards for expanded data transmission (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 HealthPoint estimates that a rebate model would require: Estimated additional compliance FTEs required under rebate model: 2.0 FTE. Estimated additional finance and reconciliation FTEs required: 1.0 FTE. Estimated incremental annual staffing cost (3.0 additional FTEs): approximately $360,000 per year. Estimated one-time IT system modification cost: approximately $50,000. Estimated ongoing annual IT and vendor contract cost increase: approximately $250,000 per year. NACHC's national assessment of FQHCs found that 47% of responding organizations estimate needing 0.5 to 1.0 additional FTE, and 36% estimate needing 1 to 2 additional FTEs, solely managing rebate claim reporting. One mid-sized FQHC anticipates annual costs exceeding $3 million. These are not one-time transition costs; they are permanent operational cost increases. Every dollar diverted to rebate administration is a dollar unavailable for patient services. C. Contract Pharmacy Network: Coordination Burden and Pharmacy Exodus Risk HealthPoints 37 contract pharmacy partners are integral to medication access across our 8-county rural service area. A rebate model would impose significant coordination burdens on this network. Under manufacturer-driven rebate frameworks, varying submission requirements across manufacturers would require high-level TPA intervention for each contract pharmacy relationship, with cost pass-through likely in the form of increased per- claim TPA fees layered on top of HealthPoints existing $210,870 annual TPA expenditure. Staff would be required to monitor rebate claims across all 37 pharmacy locations to ensure correct adjudication, compounding the administrative burden already documented in Section VIII.B. Most critically, a rebate model introduces serious risk that contract pharmacies will exit the 340B arrangement entirely rather than absorb the administrative complexity. NACHC has documented that over 17% of the U.S. population already lives in a pharmacy desert. In HealthPoints rural central Texas service area, spanning Brazos, Burleson, Grimes, Leon, Madison, Waller, Trinity, and Robertson counties, contract pharmacy loss would not redirect patients to alternative pharmacies. It would eliminate access altogether. For a (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 rural FQHC serving patients where the contract pharmacy is the only dispensing option within a reasonable distance, the pharmacy exodus risk is not a theoretical concern; it is a direct patient access emergency waiting to occur. D. Clinic-Administered Drugs: Operational Impossibility and Exclusion Requirement Clinic-administered drugs (CADs) present a distinct and particularly unworkable subset of the rebate models administrative burden. The majority of CADs dispensed at HealthPoint are bundled into Prospective Payment System (PPS) billing at a flat rate; these medications are administered in-clinic and are not separately itemized on claims submitted to payers. Applying a rebate model to CADs would require HealthPoint to develop a parallel, claims- level tracking system for drugs that have no individual billing transaction to anchor a rebate submission. Compounding this, CAD administration and inventory records at HealthPoint are commonly maintained in paper logs, as noted in Section VIII.B. Converting paper records to electronic data for each rebate submission cycle would impose significant labor costs with no offsetting integrity benefit: CADs administered at FQHCs are primarily billed under Medicare Part A, which is not included in the Medicare Drug Price Negotiation Program through 2027, and Medicare Part B negotiated pricing provisions do not take effect until 2028. There is therefore minimal duplicate discount risk for CADs under the current program timeline. HealthPoint explicitly requests that HRSA exclude clinic-administered drugs from any rebate pilot that proceeds. E. Rebate Denials and Payment Risk Even with guardrails, rebate adjudication introduces significant denial risk. Experience with existing manufacturer-run MFP deduplication processes demonstrates that covered entities receive denials based on vague or undefined criteria, with limited transparency into determination methodology. The previously proposed rebate pilot permitted covered entities up to 45 days to submit data, meaning the potential time from drug dispense to rebate receipt could extend to 55 days or longer. Based on prior experience with manufacturer-run rebate adjudication and industry patterns for IRA/MFP-designated drugs, HealthPoint estimates an anticipated rebate denial rate of approximately 15 percent. Applied to HealthPoints annual net 340B program savings of $838,000, this denial rate would result in an estimated net annual loss of approximately $125,700, direct and permanent reduction in resources otherwise available for patient care services. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 HealthPoint requests that, if any rebate pilot is implemented, manufacturers be required to pay rebates within 10 calendar days of both initial and corrected determinations, with mandatory interest penalties for delayed payments and a clear enforcement framework subject to HRSA oversight. IX. HealthPoints Existing Compliance Framework HealthPoint maintains robust 340B compliance systems, including: Regular internal compliance audits Third-party administrator oversight Medicaid carve-out compliance controls consistent with HealthPoints entity-level carve-out election Documentation retention protocols meeting HRSA audit standards Annual UDS reporting on 340B-purchased drugs, costs, revenues, and patient impact Participation in HRSA Operational Site Visits verifying Health Center Program compliance HealthPoint has not identified evidence that a rebate model would meaningfully reduce diversion risk or duplicate discounts beyond the safeguards already in place. FQHCs are not the source of misuse in the 340B program; rather, they are national models of compliance and transparency. The incremental integrity benefit of a rebate model does not justify the financial, operational, and legal disruption it would impose. X. Alternative Recommendations HealthPoint strongly encourages HRSA to pursue less burdensome alternatives that address program integrity objectives without shifting financial risk to safety-net providers. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 A. Establish a Neutral Claims Clearinghouse (NCC) HealthPoint endorses NACHCs recommendation that HRSA establish a Neutral Claims Clearinghouse (NCC) as the primary mechanism for MFP-340B deduplication and Medicaid duplicate discount prevention. Under an NCC: Covered entities would submit standardized claims data to a secure federal or federally contracted platform for each MFP drug dispensed to a Medicare Part D patient, within a defined submission window. The NCC would aggregate and transmit this data to the Medicare Transaction Facilitator, enabling identification of claims ineligible for a Medicare MFP rebate without requiring FQHCs to purchase at WAC. The upfront 340B discount would be preserved, eliminating cash flow disruption entirely. Administrative burden would be substantially reduced compared to a rebate model, as covered entities would submit to a single standardized system rather than navigating multiple manufacturer-specific platforms. Critically, the NCC approach would accomplish the stated deduplication goal at a fraction of the cost and administrative burden of a rebate model, while preserving the fundamental structure of the 340B program that has enabled safety-net providers to serve their communities for over three decades. HealthPoint notes that the NCC concept has received bipartisan congressional support, including in the 340B PROTECT Act, the SUSTAIN 340B Act (bipartisan Senate draft), and the 340B ACCESS Act. This legislative record supports feasibility and broad stakeholder acceptance of the NCC approach. For the NCC to function effectively, it must be administered by the federal government or an independent government contractor, with governance rooted in federal oversight to ensure neutrality and stakeholder confidence. Data submitted to the NCC should be subject to strict purpose limitations and must not be accessible to PBMs or used for commercial contracting, network decisions, or any purpose beyond statutorily authorized deduplication. Allowable data elements should be limited to the minimum necessary for deduplication purposes: NDC, quantity dispensed, date of service, prescription number, dispensing pharmacy NPI, and covered entity 340B ID. Prohibited data elements must (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 include patient-identifiable information, diagnosis codes, CPT codes, purchasing data, and any data that could be used for commercial contracting or network decisions. These boundaries are essential to ensure the NCC serves its statutory deduplication function without enabling manufacturer or PBM misuse of covered entity data. B. Additional Alternative Measures In addition to an NCC, HealthPoint recommends that HRSA consider the following measures to address program integrity without a rebate model: 1. Implement a publicly available Medicaid Plan Billing Information Database containing BIN, PCN, and Group Number identifiers for all Medicaid FFS and managed care plans, enabling covered entities to comply systematically with duplicate discount obligations. 2. Improve standardized duplicate discount data exchange mechanisms between manufacturers, state Medicaid agencies, and covered entities. 3. Clarify MFP claim identification processes to reduce ambiguity and manufacturer- driven denial disputes. 4. Enhance manufacturer transparency reporting requirements, including publication of all determination methodologies and denial criteria. 5. Strengthen and resource existing HRSA audit guidance rather than creating new parallel compliance infrastructure. C. Required Guardrails if a Pilot Proceeds Should HRSA proceed with a rebate model notwithstanding HealthPoints objections, HealthPoint urges that any pilot be narrowly scoped and subject to the following minimum protections: Exempt FQHCs entirely. The administrative, financial, and legal risks to FQHCs are disproportionate and not justified by any demonstrated compliance benefit, particularly for covered entities that have already elected Medicaid carve-out and structurally eliminated duplicate discount risk. Standardize manufacturer submission requirements. Manufacturers must use uniform data submission standards, timelines, and platforms across all rebate claims. Varying requirements dramatically amplify the administrative burden on covered entities and introduce systematic error risk. (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 Reverse the burden of proof. Rebate claims must be presumed valid unless the manufacturer demonstrates a specific, statutorily sanctioned basis for denial. All determination processes, eligibility calculations, and denial categories must be publicly disclosed. Manufacturers must bear the burden of establishing that a rebate is not owed. Establish enforceable payment timelines with automatic penalties. Rebate payments must be made within 10 calendar days of both initial and corrected determinations, with mandatory interest penalties for late payment and a clear enforcement framework subject to HRSA oversight. Establish an expedited dispute resolution pathway. The existing Administrative Dispute Resolution processwhich can take up to two yearsis wholly inadequate for routine rebate disputes. A separate, expedited dispute resolution pathway must be established with defined timelines, escalation protocols, and agency oversight. Limit any pilot to retail pharmacy claims only. Clinic-administered drugs, bundled PPS claims, and any drug not generating a discrete, payer-submitted pharmacy claim must be explicitly excluded. A retail-only scope limitation is the minimum necessary to make a rebate pilot operationally feasible without imposing the full administrative impossibility documented in this letter. Any broader scope would produce cascading compliance failures without advancing the deduplication objective. Explicitly exclude clinic-administered drugs (CADs). CADs are primarily billed under Medicare Part A, which is outside the scope of the MDPNP through 2027. The absence of a discrete billing transaction, combined with paper-based record- keeping, makes CAD rebate submissions operationally infeasible. HRSA should issue an explicit categorical exclusion for CADs in any pilot program documentation. XI. Conclusion HealthPoint respectfully and strongly urges HRSA not to implement the 340B Rebate Model Pilot Program and specifically urges HRSA to exempt all Federally Qualified Health Centers from any rebate-based pricing mechanism. For FQHCs operating in Texas and across the nation, the proposed rebate model would: Eliminate the program integrity rationale for carve-out entities: HealthPoints entity-level Medicaid carve-out election already structurally addresses duplicate (A dba of Brazos Valley Community Action Agency, Inc.) HealthPoint 340B RFI Comment HRSA-2026-03042 Brazos Valley Community Action Agency, Inc. DBA: HealthPoint 1500 University Drive East, College Station, TX 77840 Phone 979-383-2340 Fax 979-260-9390 discount risk at the transaction level, making the rebate models primary justification inapplicable. Create significant cash flow and credit exposure: Requiring upfront WAC purchases converts guaranteed savings into uncertain receivables, threatening HealthPoint's ability to maintain adequate medication supplies. Impose operational and IT burdens that are neither sustainable nor proportionate: Administrative, staffing, and systems costs would permanently divert resources from patient care. Introduce serious legal compliance risks: Medicaid billing requirements create potential False Claims Act exposure that does not exist under the current model. Make sliding fee scale compliance operationally impossible: Pharmacy software architecture cannot accommodate point-of-sale 340B pricing when the wholesaler price file reflects WAC. Threaten patient access to life-sustaining medications: Disruption to DOACs, SGLT2 inhibitors, insulin, and behavioral health medications would cause measurable harm to HealthPoint's most vulnerable patients. The current upfront discount model remains the most stable, predictable, and mission- aligned structure for achieving the statutory purpose of the 340B program to 'stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.' HealthPoint appreciates the opportunity to provide substantive input on this RFI and remains committed to transparency, compliance, and continued partnership with HRSA in strengthening the integrity and effectiveness of the 340B program. For questions regarding this submission, please contact: Trina La, SVP Pharmacy, trinala@healthpoint-tx.com. Respectfully submitted, Theresa (Terri) Sabella Chief Executive Officer HealthPoint (Brazos Valley Community Action Agency, Inc.)
HRSA-2026-0001-1477Kari Quickenden · Rock Springs, WY, United States2026-04-14T04:00Z8,215 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Hospital of Sweetwater County, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. We were recently approved to enter the 340B program, effective April 1, 2026, under our Critical Access Hospital (CAH) designation. For a new entrant to the program, the HRSA rebate model introduces significant uncertainty and administrative costs beyond what we anticipated upon entry. The cash flow constraints could jeopardize our hospital's finances, directly undermining our hospital's purpose in seeking entry into the 340B program. The 340B Rebate Model Pilot Program may impose costs and burdens on Memorial Hospital of Sweetwater County that far outweigh any potential benefits. HRSAs own cost calculations are extraordinary. More fundamentally, HRSAs desire to test a rebate model seems to rest on the mistaken premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism Memorial Hospital of Sweetwater County planned to use when applying for the program is the best way to fulfill the 340B program's purpose. Any rebate program would require Memorial Hospital of Sweetwater County to incur significantly higher administrative costs. When we elected to apply for the 340B program, Memorial Hospital of Sweetwater County understood that we would incur some reasonable administrative costs. We planned our hiring, operations, and program administration around an upfront discount model. A shift to a new discount mechanism 2 may require additional resources, imposing considerable additional costs and burdens on our institution that far exceed what we had expected and planned for as a 340B hospital. As we set up our 340B program operations, we initially planned to allocate 1 FTE to manage it. However, under a rebate model, we anticipate needing additional FTEs or contract management assistance to manage the 340B program. These are additional costs we did not plan for and are difficult to incur, given our financial situation as a rural CAH. By requiring us to pay full price for drugs, under the rebate model, and to float large sums of cash while awaiting a rebate, we may cut into our days of cash on hand. These are funds we have reserved for bond covenants, emergencies, and other patient care needs that will instead need to be diverted to manage this unnecessary rebate model. Memorial Hospital of Sweetwater County respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. If, however, HRSA chooses to move forward with it, it must allow Memorial Hospital of Sweetwater County and other covered entities to comment on the specifics of its new program. Failure to permit additional comments on the program's specific features will, in effect, be a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Sincerely, Kari Quickenden, PharmD, MHSA Chief Clinical Officer/Acting CEO 1200 College Drive Memorial Hospital of Sweetwater County Rock Springs, WY 82901 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Hospital of Sweetwater County, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. We were recently approved to enter the 340B program, effective April 1, 2026, under our Critical Access Hospital (CAH) designation. For a new entrant to the program, the HRSA rebate model introduces significant uncertainty and administrative costs beyond what we anticipated upon entry. The cash flow constraints could jeopardize our hospital's finances, directly undermining our hospital's purpose in seeking entry into the 340B program. The 340B Rebate Model Pilot Program may impose costs and burdens on Memorial Hospital of Sweetwater County that far outweigh any potential benefits. HRSAs own cost calculations are extraordinary. More fundamentally, HRSAs desire to test a rebate model seems to rest on the mistaken premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism Memorial Hospital of Sweetwater County planned to use when applying for the program is the best way to fulfill the 340B program's purpose. Any rebate program would require Memorial Hospital of Sweetwater County to incur significantly higher administrative costs. When we elected to apply for the 340B program, Memorial Hospital of Sweetwater County understood that we would incur some reasonable administrative costs. We planned our hiring, operations, and program administration around an upfront discount model. A shift to a new discount mechanism may require additional resources, imposing considerable additional costs and burdens on our institution that far exceed what we had expected and planned for as a 340B hospital. As we set up our 340B program operations, we initially planned to allocate 1 FTE to manage it. However, under a rebate model, we anticipate needing additional FTEs or contract management assistance to manage the 340B program. These are additional costs we did not plan for and are difficult to incur, given our financial situation as a rural CAH. By requiring us to pay full price for drugs, under the rebate model, and to float large sums of cash while awaiting a rebate, we may cut into our days of cash on hand. These are funds we have reserved for bond covenants, emergencies, and other patient care needs that will instead need to be diverted to manage this unnecessary rebate model. Memorial Hospital of Sweetwater County respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. If, however, HRSA chooses to move forward with it, it must allow Memorial Hospital of Sweetwater County and other covered entities to comment on the specifics of its new program. Failure to permit additional comments on the program's specific features will, in effect, be a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Sincerely, Kari Quickenden, PharmD, MHSA Chief Clinical Officer/Acting CEO 1200 College Drive Memorial Hospital of Sweetwater County Rock Springs, WY 82901
HRSA-2026-0001-1478DC Primary Care Association2026-04-14T04:00Z20,787 chars
See attached file(s) April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of DCs 8 Community Health Centers (CHCs) and the more than 184,000 patients they serve, the DC Primary Care Association (DCPCA) appreciates the opportunity to comment on the Health Resources and Services Administration (HRSA) Request for Information (RFI) regarding a potential 340B rebate pilot. Summary of Recommendations: In short, DCPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, DCPCA explains: A. The importance of 340B savings to DC CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their nearly 30,000 low-income and uninsured patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 B. How a rebate model will create massive cashflow barriers, administrative burdens, and other undue costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations and the Districts safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Washington DC, CHCs routinely rely on 340B savings to support services such as dental care, SUD treatment, mental health services, school-based health programs, care coordination, and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow challenges, administrative burdens, and other undue costs for CHCs. Significant and unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at the Wholesale Acquisition Cost 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 (WAC) would be between 50 to almost 500 times more than they currently pay for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines, fronting the full WAC price) will still force CHCs to borrow substantial amounts of cash. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful additional financial management resources to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, and Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains). Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all types of services underwritten by 340B savings (as described in Section A). 4 Stopping dispensing rebate drugs: In the face of these financial pressures and borrowing costs, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs that were subject to the rebate model had it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced that they would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the average manufacturer price cap on Medicaid rebates and lowering the wholesale acquisition cost for some drugs in Medicare) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., significant cash flow demands resulting in high borrowing costs, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. 5 E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturers plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed and reimbursement is provided monthly.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. 6 This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring Bank Identification Numbers (BINs) or Processor Control Numbers (PCNs) on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the Inflation Reduction Act Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contract pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cash flow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 7 Avoid cash flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and sustained CHC access to savings they invest in patient care. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives, such as a neutral clearinghouse model, that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Patricia Quinn, Senior Director of Government Affairs and Policy, at PQuinn@dcpca.org. Sincerely, Ruth Pollard President and CEO 8 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price). Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Costs associated with undispensed units Interest paid on loans (from wholesalers or other creditors). Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. DCPCA 340B rebate RFI comment 4.13.26 FINAL Final Audit Report 2026-04-09 Created: 2026-04-09 By: Patricia Quinn (pquinn@dcpca.org) Status: Signed Transaction ID: CBJCHBCAABAArhd-AGNR5k3WLo6VPbCja8WtN-RtOLal "DCPCA 340B rebate RFI comment 4.13.26 FINAL" History Document created by Patricia Quinn (pquinn@dcpca.org) 2026-04-09 - 9:44:40 PM GMT Document emailed to Ruth Fisher Pollard (rfpollard@dcpca.org) for signature 2026-04-09 - 9:44:44 PM GMT Email viewed by Ruth Fisher Pollard (rfpollard@dcpca.org) 2026-04-09 - 9:46:12 PM GMT Document e-signed by Ruth Fisher Pollard (rfpollard@dcpca.org) Signature Date: 2026-04-09 - 9:46:25 PM GMT - Time Source: server Agreement completed. 2026-04-09 - 9:46:25 PM GMT
HRSA-2026-0001-1479Fresno Community Hospital and Medical Center dba Community Health System2026-04-14T04:00Z8,121 chars
Please see attached comment of Fresno Community Hospital and Medical Center dba Community Health System Community Health System P.O. Box 1232, Fresno, CA 93715 | CommunityMedical.org The Honorable Thomas J. Engels April 20, 2026 Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Fresno Community Hospital and Medical Center dba Community Health System (CHS) submits this response to the Health Resources and Services Administrations (HRSA) February 17, 2026, Request for Information: 340B Rebate Model Pilot Program. We respectfully urge HRSA to reconsider the proposed pilot. Hospitals like CHS, with around 85% of its patient population insured under Medicare or Medicaid, stretch scarce financial resources to provide the best patient care available. Transitioning the 340B program from the up-front discount program that has worked for decades to a rebate program diverts funds and personnel from patient care to administrative overhead, with little resulting benefit to the 340B program as a whole. CHS, a nonprofit health system, operates four hospitals, a cancer institute, and several long-term care, outpatient, and other healthcare facilities in Californias Central Valley. The emergency department of Community Regional Medical Center (CRMC), a CHS hospital, is among the top 15 busiest in the country and is the second busiest in California. Through its two Disproportionate Share Hospitals, CRMC and Clovis Community Medical Center, and other facilities, CHS serves as the regions safety net healthcare provider and is committed to our mission of bettering the lives of all those we serve. I. A Rebate Program Would Impose Substantial Administrative Burdens on Cash-Strapped Hospitals. CHS shares the concerns of the American Hospital Association (AHA) and 340B Health with the 340B Programs potential pivot toward a rebate model. This proposed shift to a new kind of discount mechanism demands additional resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital. The resource demands to CHS just to get the program up and running, including the time and effort of implementing the program, creating each manufacturers required data templates, working with our bank to break out rebate payments for each site, developing a reconciliation program to ensure rebates are being received and tracked, training staff to implement the program, working with our Third-Party Administrator (TPA) to facilitate the required data pulls, and developing a process to manually extract data from individual claims, are daunting. In addition, a rebate program will substantially increase 340B program costs to CHS going forward. When HRSA first introduced a proposed rebate program in its August 7, 2025, 340B Program Notice, HRSA and drug manufacturers contended the program would not impose new administrative burdens on hospitals because we already compile and track the required information through 340B ESP. On the contrary, the data fields for 340B ESP are different than the proposed fields for the rebate program. Additionally, the current up-front discount process does not saddle hospitals with the burden of submitting, tracking, and reconciling individual rebate requests for the thousands of 340B prescriptions most hospitals generate every year. Community Health System P.O. Box 1232, Fresno, CA 93715 | CommunityMedical.org Should HRSA go forward with the proposed rebate pilot, CHS anticipates needing to hire multiple additional Full-Time Equivalents (FTE) to prepare data submissions to manufacturers, submit and track rebate submissions, adjudicate rebate payments, challenge denials, and resubmit rebates when manufacturers deny them, which could occur for any number of reasons having nothing to do with program integrity or preventing duplicate discounts. This process will be particularly onerous because some of the data fields manufacturers are requiring, specifically Health Plan ID and a drug line-item and billing breakdown for each insurance and insurance billing code, will need to be manually pulled for each and every claim. Moreover, our TPA will charge for the monthly file documentation and data pulls required to submit rebate requests. Given the resource demands of hiring new staff and paying our TPAs data-pull fees, we anticipate our annual rebate-related expenses would exceed $276,000. In addition to siphoning resources from patient care to administrative overhead, a rebate program would subject CHS to additional financial pressures by delaying the benefits of 340B pricing while manufacturers process rebate requests (essentially an interest-free loan on funds to which CHS and other hospitals are legally entitled) and eliminating the cost-of-goods discount CHS currently receives from its drug wholesaler when purchasing drugs on its 340B account, which would increase our acquisition costs for drugs included in the rebate pilot by 9.5%. II. A Rebate Program Is Not Necessary to 340B Program Integrity, and Effective, Less- Burdensome Alternatives Exist. The purported purpose of rebate programs to ensure that health systems are only receiving reimbursement for eligible 340B drugs is already addressed more than adequately by the various program integrity obligations currently imposed on 340B covered entities. By law, covered entities must prevent diversion and duplicate discounts, keep auditable records, and recertify eligibility annually. HRSA conducts routine audits and can require repayments or remove entities for non-compliance. Manufacturers likewise have explicit audit rights: under 42 U.S.C. 256b(a)(5)(C), a covered entity must permit audits by HRSA and the manufacturer. Duplicate discount prevention is further operationalized through HRSAs Medicaid Exclusion File and state mechanisms, such as requiring claim modifiers for 340B drugs. Finally, manufacturers concerns regarding double dipping with regard to drugs on the Maximum Fair Price (MFP) list are adequately addressed through required data exchanges and payment facilitation on the Medicare Transaction Facilitator (MTF) platform developed by the Centers for Medicare and Medicaid under the Medicare Drug Price Negotiation Program. Should HRSA nonetheless conclude that the 340B program requires additional safeguards, AHAs proposal that HRSA adopt a third-party clearinghouse provides an effective and far less burdensome alternative to a rebate program. This approach ensures 340B/MDPNP deduplication and program integrity while avoiding the administrative burdens and payment delays inherent in a rebate approach. While CHS appreciates HRSAs primary interest in a rebate program is preserving program integrity, drug manufacturers have a different reason to promote the program, namely the same reason any vendor opts for rebates instead of up-front discounts: they create friction in the discount process, making it easier for the vendor to delay passing on savings to the customer or, if the vendor can find a technical reason to deny the rebate, avoid giving the discount altogether. This strategy is not consistent with the purpose of the 340B program of enabling covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Community Health System P.O. Box 1232, Fresno, CA 93715 | CommunityMedical.org CHS appreciates the opportunity to comment on the proposed rebate pilot program and urges HRSA to reconsider the proposed pilot and any large-scale role out of 340B rebate pilot programs in the future. Respectfully, _____________________ Tracy Kiritani Vice President, Hospital Financial Operations 340B Authorizing Official
HRSA-2026-0001-1480FRHS2026-04-14T04:00Z39,168 chars
See attached letter. April 13, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Firelands Regional Health System (Firelands Regional Medical Center and The Bellevue Hospital), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Firelands Regional Medical Center and The Bellevue Hospital and other Covered Entities. As 340B-participating hospitals, Firelands Regional Medical Center and The Bellevue Hospital are a core component of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Firelands Regional Medical Center and The Bellevue Hospital participate in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Firelands Regional Medical Center and The Bellevue Hospitals 340B Program participation enables us to commit additional resources each year to the community safety net population we serve. Firelands Regional Medical Center and The Bellevue Hospital also use 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would April 13, 2026 Page 2 needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Firelands Regional Medical Center and The Bellevue Hospital wish to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Firelands Regional Medical Center and The Bellevue Hospital submit the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEUVE HOSPITALS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 13, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Firelands Regional Medical Center and The Bellevue Hospital and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Firelands Regional Medical Center and The Bellevue Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Firelands Regional Medical Center and The Bellevue Hospital. Examples include, manufacturers contract pharmacy restrictions, data disclosure requirements, good-faith inquiries, audits, and more. Regarding contract pharmacies: manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission and supporting our community. Regarding data disclosures: manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price. Regarding good-faith inquiries: manufacturers employees and contractors such as Kalderos and IQVIA have sent us overreaching demands. Manufacturers such as AbbVie and Boehringer 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 13, 2026 Page 4 Ingelheim reach out with lists of questions like interrogatories and document demands. A rebate model would only further exacerbate these issues. Regarding anticipated rebate denials: we further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to fairly adjudicated rebate requests. To resolve issues, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. If they mistakenly pay an MDPNP refund for a 340B drug, the entity simply needs to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Regarding entity-owned pharmacy float : finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Firelands Regional Medical Center and The Bellevue Hospitals purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Firelands Regional Medical Center and The Bellevue Hospital trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Firelands Regional Medical Center 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 13, 2026 Page 5 and The Bellevue Hospital would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Firelands Regional Medical Center and The Bellevue Hospital have seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 9 42 U.S.C. 256b(a)(1). April 13, 2026 Page 6 6. WHAT STATUTE OR REGULATION PERMITS FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITALS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL FOR THE VALUE OF ITS DATA? One of Firelands Regional Medical Center and The Bellevue Hospitals principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program. 11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 13, 2026 Page 7 value, and are they not required to compensate Firelands Regional Medical Center and The Bellevue Hospital for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Firelands Regional Medical Center and The Bellevue Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Firelands Regional Medical Center and The Bellevue Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Firelands Regional Medical Center and The Bellevue Hospitals perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Firelands Regional Medical Center and The Bellevue Hospitals patient population, we serve many other patients, including patients with no coverage at all. Requiring Firelands Regional Medical Center and The Bellevue Hospital to initially overpay for non- Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 13, 2026 Page 8 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL? IF NOT, WHY NOT? As noted above, Firelands Regional Medical Center and The Bellevue Hospital firmly believe that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Firelands Regional Medical Center and The Bellevue Hospital urge HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEVUE HOSPITAL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Firelands Regional Medical Center and The Bellevue Hospitalto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. April 13, 2026 Page 9 The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Firelands Regional Health System has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Firelands Regional Medical Center and The Bellevue Hospital are deeply concerned that a rebate model would empower manufacturers to further abuse the program. One solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 13, 2026 Page 10 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Firelands Regional Medical Center and The Bellevue Hospital hope that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Firelands Regional Medical Center and The Bellevue Hospital encourage improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experience including use of batch flat-file submissionsand contribute to the development of government- backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Firelands Regional Medical Center and The Bellevue Hospital maintain auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 13, 2026 Page 11 manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Firelands Regional Medical Center and The Bellevue Hospital to significantly expand staffing devoted to 340B program administration. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Firelands Regional Medical Center and The Bellevue Hospital purchase drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Firelands Regional Medical Center and The Bellevue Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly April 13, 2026 Page 12 increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Firelands Regional Medical Center and The Bellevue Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Firelands Regional Medical Center and The Bellevue Hospital would be required to generate new claims- level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Firelands Regional Medical Center or The Bellevue Hospitals operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Firelands Regional Medical Center and The Bellevue Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on itare at risk. April 13, 2026 Page 13 We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Respectfully, Kevin Riley Chief Financial Officer | Firelands Health 1111 Hayes Avenue | Sandusky, OH 44870 April 13, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 13, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 13, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-1481(no commenter metadata)2026-04-15T04:00Z16,727 chars
This comment is submitted anonymously by a Mississippi Critical Access Hospital due to concerns about potential retaliation or adverse treatment from pharmaceutical manufacturers. A Mississippi Critical Access Hospital firmly opposes any transition of the 340B Program to a rebate-based model. A rebate framework does not strengthen or modernize the programit shifts financial exposure, administrative burden, and operational risk onto covered entities while granting manufacturers increased control over how and when the ceiling price is realized. Under such a system, rural hospitals would be required to purchase medications at full cost, then navigate a reimbursement process dictated by manufacturers, including claim-level review, delays, and potential denials. This fundamentally changes the program from a predictable purchasing structure into a post-transaction recovery process with uncertain outcomes. The 340B statute guarantees access to medications at or below a defined ceiling price. It does not contemplate a system in which that price is contingent upon subsequent manufacturer approval or reimbursement. The current upfront discount model ensures compliance at the point of sale. A rebate model, by contrast, introduces variability and shifts decision-making authority to manufacturers, effectively undermining the certainty the statute was designed to provide. As a Critical Access Hospital serving rural Mississippi, this facility operates within tight financial constraints while caring for a population with significant healthcare needs, including a high percentage of uninsured and underinsured patients. The financial strain associated with fronting full drug acquisition costs, combined with the staffing demands required to manage rebate submissions and disputes, would place immediate and ongoing pressure on operations. Any disruption in this processwhether through delays or denialswould directly affect the hospitals ability to maintain access to necessary medications. The 340B Program exists to help safety-net providers extend limited resources to better serve vulnerable communities. A rebate-based structure introduces instability into a system that currently functions with clarity and predictability. Rather than improving oversight, it creates new points of friction that ultimately jeopardize patient access. If a rebate model pilot is implemented, meaningful protections would be necessary to limit harm to covered entities. However, such measures cannot fully resolve the underlying issue: a rebate system alters the fundamental mechanics of the program in a way that disadvantages providers and introduces avoidable risk. The appropriate path forward is to maintain the existing upfront discount structure and to focus on strengthening program integrity through consistent, transparent, and enforceable compliance standards that do not shift financial responsibility onto covered entities. Request for Information: 340B Rebate Model Pilot Program Comment Submission Mississippi Critical Access Hospital (CAH) Re: HRSA 340B Rebate Model RFI 1. Executive Summary and Overall Position a. This Mississippi Critical Access Hospitalthe only hospital serving our countysubmits these comments in response to HRSAs Request for Information regarding a potential rebate model for the 340B ceiling price. The 340B Program exists for a simple, practical reason: to allow hospitals like ours to stretch limited resources and keep care available in communities that would otherwise go without. b. We are firmly opposed to a rebate model. Requiring rural hospitals to pay higher prices upfront and then seek reimbursement later is not a technical changeit is a fundamental shift that creates financial risk, adds administrative burden, and opens the door to delays and denials that directly threaten patient access. c. The concerns cited in support of a rebate approachduplicate discounts, diversion, and manufacturer visibilitycan be addressed through straightforward, enforceable program integrity measures. They do not justify dismantling a system that currently works. d. If HRSA moves forward despite these concerns, any pilot must be narrow, voluntary, time- limited, and structured so that covered entities are fully protected from financial loss, administrative expansion, and manufacturer discretion. 2. Covered Entity Context and Reliance Interests a. As a Critical Access Hospital in Mississippi, we serve a rural, high-need population with limited alternatives for care. Many of our patients are uninsured or underinsured, and travel distances for healthcare are significant. We are not one provider among manywe are the provider. b. The upfront discount model is what makes the 340B Program usable in the real world. It allows us to know our costs at the time of purchase, manage inventory responsibly, and maintain stable operations. A rebate model replaces that certainty with delay, dispute, and unpredictability. c. While the statute references both rebates and discounts, converting the program to a rebate structure would be a major redesign. Without strict protections, such a change would reduce the real value of 340B and make it hardernot easierfor hospitals like ours to serve patients. Request for Information: 340B Rebate Model Pilot Program 3. Responses to HRSA Targeted Questions a. Current administrative costs i. Even under the current model, maintaining 340B compliance requires meaningful investment in staffing, systems, and oversight. b. Key cost drivers i. Pharmacy, compliance, finance, and IT staffing; ii. Split-billing systems and contract pharmacy administration; iii. Ongoing reconciliation and audit preparation; iv. Compliance monitoring and policy management; v. ESP and Beacon-related processes; vi. Data management and reporting; and vii. Independent annual audits. c. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Incremental costs (startup vs. ongoing) 1. A rebate model would require building an entirely new set of processes on top of existing operationsclaim submission, tracking, reconciliation, and dispute resolution. 2. This includes system upgrades, workflow redesign, vendor support, and consulting oversight. ii. Incremental activities 1. Identifying and submitting eligible claims; 2. Managing rejected or incomplete submissions; 3. Reconciling payments against claims and purchases; 4. Tracking adjudication timelines; 5. Handling denials and appeals; and 6. Expanding audit and documentation requirements. iii. Offsetting incremental costs 1. Covered entities should not be expected to absorb the cost of a manufacturer-driven payment system. 2. At minimum, manufacturers should be required to fully fund any administrative burden created by a rebate model. iv. Operational impact 1. A rebate model would shift staff time and resources away from patient care and into administrative processes that do not improve outcomes. Request for Information: 340B Rebate Model Pilot Program d. Staffing Impacts i. Additional staffing or reallocation would be unavoidable, particularly in compliance and finance. ii. Rural hospitals lack the scale to absorb this work internally and would likely need external support. e. Systems and Infrastructure i. A rebate model would require new tools for claim extraction, submission, reconciliation, and reporting. ii. For small hospitals with limited IT capacity, this represents a significant barrier. f. Other Costs and Impacts i. Additional costs would include legal review, training, consulting, and contract adjustments. ii. Contract pharmacy participation may decline due to increased complexity, further limiting access in rural areas. iii. Estimated additional annual costs range from $120,000 to $180,000an amount that is significant for a CAH. 4. Payment Timing and Potential Cash Flow Impacts a. Cash flow impact i. A rebate model shifts financial risk to covered entities by requiring upfront payment at higher prices with delayed reimbursement. ii. Delays caused by denials, disputes, or processing issues are not hypotheticalthey are expected. iii. For a hospital that is the only provider in its county, even short-term cash flow disruption can impact our ability to maintain medication supply and patient services. b. Current wholesaler terms i. Payment obligations to wholesalers are fixed, while rebate payments would be uncertain creating a gap that small hospitals cannot reliably absorb. c. Ensuring manufacturer adherence i. Even with strict rules, enforcement challenges remain, and the burden of delay still falls on the hospital. Request for Information: 340B Rebate Model Pilot Program 5. Rebate Denials a. Guardrails i. A rebate model introduces a new and unnecessary layer of denial risk that does not exist under the current upfront discount structure. Today, covered entities receive the 340B price at the time of purchase. Under a rebate model, that certainty is replaced with a process where payment is contingent on manufacturer review. ii. This creates inherent risk that valid claims may be delayed, partially paid, or denied altogether. Even if denial criteria are formally limited, the introduction of manufacturer adjudication opens the door to inconsistent interpretation, shifting requirements, and administrative friction. iii. Denials must be strictly limited to clear, objective, and verifiable circumstances. They should not be based on manufacturer-defined interpretations, additional data requirements, or retrospective reclassification. Without these protections, denial practices could effectively become a barrier to accessing 340B pricing. b. Standard process elements i. If a rebate model were implemented, HRSA would need to establish a highly standardized and enforceable framework, including: 1. Uniform denial reason codes; 2. Required supporting documentation for every denial; 3. Defined adjudication timelines; 4. A clear and accessible appeal process; 5. Automatic reversal of unsupported denials; and 6. Escalation mechanisms with enforceable consequences. ii. Even with these measures, the core issue remains: covered entities should not have to pursue or defend access to the 340B price after the fact. The need for denial management itself reflects a structural weakness in the rebate model. iii. Public reporting of denial rates and trends would be necessary, but transparency alone does not prevent inappropriate denials or mitigate their operational impact. 6. Data Collection by Covered Entities a. Data accuracy and controls i. Covered entities already maintain robust controls to ensure compliance with 340B requirements, including validation processes, reconciliation activities, vendor oversight, and audit readiness. These controls are designed around the current upfront pricing model. Request for Information: 340B Rebate Model Pilot Program b. Changes under rebate model i. A rebate model would significantly expand data collection and submission requirements by introducing claim-level reporting that is not currently required to access 340B pricing. ii. This would require new workflows, additional validation steps, and increased coordination across systems and vendors. For small and rural hospitals, this represents a meaningful operational burden rather than a marginal adjustment. iii. Increased data handling also introduces additional points of failure, raising the likelihood of rejected submissions, delayed payments, and disputes. c. Recommended data elements i. If data submission is required, HRSAnot manufacturersmust define a standardized, limited dataset. ii. The dataset should include only what is necessary to process payment and support program integrity, such as: 1. NDC; 2. Quantity; 3. Date of service; 4. Covered entity identifier; 5. Pharmacy identifier; 6. Claim identifier; and 7. Basic adjudication fields. iii. Manufacturers should not be permitted to impose additional or proprietary data requirements, which would create fragmentation and increase administrative burden. d. Privacy and security guardrails i. Expanded data transmission increases exposure to privacy and cybersecurity risks, particularly for smaller providers with limited IT infrastructure. ii. HRSA should require strict safeguards, including: 1. Minimum necessary data standards; 2. De-identification where possible; 3. Encryption in transit and at rest; 4. Access controls and audit logs; and 5. Limitations on data retention and secondary use. iii. Even with these safeguards, the increased data burden is a significant drawback of the rebate model. Request for Information: 340B Rebate Model Pilot Program 7. Required Reporting a. Manufacturer reporting to HRSA i. A rebate model would require comprehensive reporting from manufacturers to ensure accountability, including: 1. Total rebate requests submitted; 2. Approval, denial, and pending volumes; 3. Denial reasons; 4. Average adjudication times; 5. Percentage of payments made within required timelines; 6. Total dollars paid and denied; and 7. Appeal outcomes. ii. Without this level of reporting, HRSA would have limited visibility into whether the model is functioning as intended. b. Public reporting i. Transparency through public reporting of manufacturer performance metrics would be necessary to promote accountability. ii. However, reporting alone does not resolve delays, denials, or administrative burden experienced by covered entities. It is a monitoring toolnot a solution. c. Frequency and duration i. Any pilot program should have clearly defined timelines, including a fixed duration and interim reporting requirements. ii. Ongoing evaluation would be critical, but the need for such oversight underscores the complexity and risk introduced by a rebate model. 8. 340B Program Integrity and Other Potential Benefits a. Integrity impacts i. While improving program integrity is an important goal, a rebate model does not simplify oversightit adds complexity. ii. By introducing additional steps, data exchanges, and adjudication processes, the model increases the likelihood of errors, disputes, and delays. iii. A more effective approach would focus on targeted improvements to existing processes, rather than restructuring the program in a way that creates new risks. Request for Information: 340B Rebate Model Pilot Program b. Potential benefits i. A rebate model may provide manufacturers with additional data visibility. However, any benefit to manufacturers must be weighed against the operational and financial impact on covered entities. ii. For rural hospitals, those impacts are significant and immediate, while the benefits are indirect and uncertain. c. Recommendations i. HRSA should prioritize practical, enforceable solutions that address specific program integrity concerns without altering the core structure of 340B. ii. Any effort to increase data sharing or oversight should be balanced with reductions in existing barriers, including current limitations on contract pharmacy utilization. d. Benefits vs. costs i. For Critical Access Hospitals, the costs and risks associated with a rebate model are clear: increased administrative burden, financial exposure, and operational disruption. ii. The benefits, by contrast, are limited and largely accrue outside of covered entities. iii. As a result, the rebate model represents a net negative for providers and the patients they serve. 9. Conclusion a. The 340B Program is essential to keeping our hospitaland our communityserved. As the only hospital in our county, we do not have the luxury of absorbing unnecessary risk or disruption. b. A rebate model replaces a working, predictable system with one defined by delay, complexity, and uncertainty. That is not an improvementit is a step backward. c. For a Critical Access Hospital, this is a matter of basic operational reality. If we are required to front higher drug costs and wait for reimbursement, we are forced to take on financial risk that we cannot safely carry. d. When that happens, the impact is not abstractit affects whether medications are available, whether services can be maintained, and whether patients can access care close to home. e. HRSA should not move forward with a rebate-based model. Preserving the upfront discount structure is the most direct, practical, and reliable way to ensure the 340B Program continues to function as intendedfor the patients and communities that depend on it.
HRSA-2026-0001-1482International Foundation for Autoimmune and Autoinflammatory Arthritis (AiArthritis)2026-04-15T04:00Z4,256 chars
See attached file(s) April 14, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: The International Foundation for Autoimmune & Autoinflammatory Arthritis (AiArthritis) appreciates the opportunity to provide input on the Health Resources and Services Administrations (HRSA) Request for Information regarding the potential use of a rebate model within the 340B Drug Pricing Program. Who We Are - We dont represent the patient voice, we are the patient voice AiArthritis is a patient-led, non-profit organization representing individuals living with autoimmune and autoinflammatory diseases, many of whom rely on complex, high-cost therapies to manage chronic conditions. For these patients, consistent and affordable access to treatment is essential. As such, we advocate for changes to the 340B Program that help ensure the program works as intended to improve access to critical drug therapies for low-income and/or uninsured populations. Support for Reform and Greater Transparency AiArthritis strongly supports reforms to establish full transparency, accountability, and oversight within the 340B Program. While the program was established to help covered entities stretch scarce resources, available data indicates that the lack of oversight and safeguards has lead to program abuses. A recent Milliman analysis commissioned by AiArthritis found that 340B hospitals receive higher reimbursement rates and dramatically higher margins for certain autoimmune therapies compared to non-340B hospitalsa pattern that has been shown for most other disease states. Although some entities may properly use this revenue to support patient services, current program requirements fail to require that savings from heavily-discounted 340B drugs are directly used to improve affordability or access. Many AiArthritis patients continue to face high out-of-pocket costs for prescription drugs, even as the 340B Program is intended to expand access to care. As noted in the analysis, this disconnect raises important questions about whether program savings are consistently reaching patients. Support for Exploring a Rebate-Based Model These dynamics underscore the need for reforms that more clearly align the structure and incentives of the 340B Program with patient benefit. In this context, AiArthritis supports HRSAs effort to evaluate a rebate-based model as a potential approach to modernizing program administration. A rebate framework may offer an opportunity to introduce greater transparency, improve accountability, and create clearer mechanisms for ensuring that statutory pricing requirements are met. However, any rebate model must be carefully designed to avoid unintended consequences for patients. In particular, HRSA should ensure that: Patients do not experience delays in access to needed medications as a result of rebate processing or administrative complexity; The model includes appropriate safeguards and oversight to ensure that program benefits are meaningfully supporting patient access and affordability. Ensuring 340B Works for Patients Ultimately, reforms to the 340B Program, including the potential adoption of a rebate model, should be evaluated based on their ability to improve real-world patient access to care. For individuals living with autoimmune and autoinflammatory conditions, treatment decisions are highly individualized, and uninterrupted access to the right therapy is critical. AiArthritis encourages HRSA to prioritize patient-centered outcomes, increase transparency into how program savings are generated and used, and ensure that any future model better aligns program incentives with the needs of patients. Please feel free to use AiArthritis as a resource related to 340B issues and we look forward to continued engagement on efforts to strengthen the program to ensure patients fully benefit as intended. Sincerely, Mark Hobraczk, JD, MPA Director of Public Policy Person living with ankylosing spondylitis (an AiArthritis disease)
HRSA-2026-0001-1483Compass Community Health2026-04-15T04:00Z47,930 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Compass Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Compass Community Health anticipates a loss of $1.2 million from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Compass Community Health proudly serves more than 3,800 patients, consisting of 23,000+ visits across Scioto and adjoining counties in Ohio, providing comprehensive, patient- centered care to individuals and families in need. Our services include primary care, behavioral health, substance use disorder treatment, pediatric occupational and speech therapies, and in-house pharmacy support to ensure continuity of care. With two fixed-site locations in Portsmouth, OH and a mobile health unit that extends our reach throughout the surrounding communities, Compass Community Health is committed to removing barriers and delivering equitable, high-quality healthcare to every person we serve. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission, creates a sustainability threat, and is a significant departure from the original purpose of the 340B Drug 2 Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Compass Community Health in particular, this means it will impact: 33,937 340B transactions, 24,000 visits, 3,800 unique patients. Increase to current admin costs of $259,314.58 for the 340B program By law and by mission, Compass Community Health uses savings resulting from participation in the 340B Drug Pricing Program to expand our patients ability to access medications and vital health services. Section 330(e)(5)(D) of the Public Health Service Act, as well as the regulations governing our Federal grant, require that every penny of savings resulting from our participation in 340B be used to expand access to care for our patient population. This commitment aligns directly with our mission: To provide quality, compassionate, and affordable care to improve the health and wellness of our community. CHCs operate on razor thin margins who may not have the operating reserves to absorb the capital requirements or incur additional expenses to establish a line of credit (or financial resource) to assist with capital requirements. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 CHCs are crucial in the health delivery system aiding in addressing the mental health crisis. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Compass Community Health provided $70,555.75 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Staffing Impact: Compass Community health anticipates needing 1-1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Compass Community Health anticipates an increase of $40,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Compass Community Health anticipates needing 1-1.5 additional FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Compass Community Health anticipates the annual cost to hire additional staff to exceed $56,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Compass Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates especially during a consistent period of shortage for healthcare workers, increased burnout of healthcare staff, and rising wages and benefits costs. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Additionally, supplemental costs will be incurred by Compass Community Health, and other CHCs, in order to maintain a baseline of compliance before a single rebate is ever received. These costs are still being determined and will be anywhere from $2,000+ along with an additional monthly expense. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 3,800 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1.2 million annually. This is not realistic or sustainable for CHCs. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Compass Community Healths estimated upfront cost is $32,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 16-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC historically partnered with three pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Scioto County, OH with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients 11 Internal NACHC survey data 8 medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Compass Community Health (CCH) ensures medications remain affordable and accessible through a coordinated approach that integrates its Sliding Fee Discount Program (SFDP), cash-pay discounts, and reinvestment of 340B savings. Eligible patients receive reduced-cost medications at the point of sale based on household income and family size, consistent with federal poverty guidelines. For patients who do not qualify for SFDP, CCH offers a standardized cash-pay discount to maintain access. Additionally, savings generated through the 340B Drug Pricing Program are directly reinvested to lower prescription costs and expand services for underserved populations. This model allows CCH to provide immediate, predictable affordability for patients at the time of dispensingan approach that would be significantly disrupted under a rebate model, where delayed reimbursement introduces financial uncertainty and limits the health centers ability to consistently apply discounts at the point of sale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $894,381.28 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $11,355.84 to purchase these same drugs at the 340B ceiling price. This represents a 7,777% increase in upfront capital required for procurement. This level of increase in capital requirements is not realistic and unsustainable. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Compass Community Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating including, but not limited to, essential services, such as pediatric focused occupational therapy, pediatric speech therapy, patient referral and medication coordination including assistance with medication authorization processes, and clinical staff support. Operating Hours: We anticipate we may be forced to reduce clinic hours and consider reducing evening hours that provides supplemental same day accessibility as an alternative to urgent care and/or emergency room visits. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund essential patient facing services directly linked to patient care. Examples including, and are not limited to, pediatric therapies (occupational and speech), patient referral and medication coordination, and clinical staff support. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our patients with chronic, life-threatening conditions to go without essential medications. Examples include insulin(s), anxiety or depression medications along with psychotropic prescriptions. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Compass Community Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. 11 This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Compass Community Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $33,436.31 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Compass Community Healths Data: Compass Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $73,585.45 The anticipated inclusion of MFP 2027-2028 drugs would disproportionately impact behavioral health medications, particularly Rexulti, which represents a high-volume, high-cost chronic therapy within our patient population. The shift to a rebate model would require the health center to front substantial acquisition costs for these medications, creating material working capital strain and potential barriers to patient access. The inclusion of the MFP 2027-2028 drugs would increase our upfront monthly drug spend by an additional $18,705.97, totaling $92,291.42. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to further assess these operational impacts and determine the capital viability. Potential supplemental options may include seeking financing, such as a line of credit or extending credit terms, translating to even more expense. As previously noted, these are not sustainable options for CHCs operating on razon thin margins while also navigating workforce shortages, wage and benefits increases, inflationary impacts, and basic operational changes. Simply put, this is not a sustainable model, CHCs will be crippled, and the federal investment in CHCs (who are the nations largest health care delivery system) will be forced to reduce services to our most vulnerable patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Compass Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 12 a. Financial Impact of Rebate Denials and Delays Compass Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $44,151.27 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 14 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Compass Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Compass Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Compass Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Julie Wilkerson, 340B & Risk Manager, jwilkerson@compasscommunityhealth.org. Sincerely, Summer Kirby, CEO Compass Community Health
HRSA-2026-0001-1484Bridgercare2026-04-15T04:00Z20,356 chars
See attached file(s) www.bridgercare.org Department of Health and Human Services Health Resources and Services Administration Our organization strongly opposes the implementation of a 340B Rebate Model Pilot Program due to the significant financial, administrative, and operational burdens it would impose on Title X-funded, non-profit clinics. With the current upfront discount model, 340B participation is sustainable and allows us to provide essential medications eiciently with minimal administrative overhead. A rebate-based system would fundamentally shift this structure, requiring us to purchase medications at full cost and await reimbursement, creating substantial cash flow challenges. Clinics like ours operate on narrow margins and rely on 340B savings to sustain services. This change introduces untenable financial risk and would require new staing, system investments, and ongoing administrative resources that are not feasible within our current infrastructure. Most importantly, this proposal would directly threaten patient access to care. Our clinic relies on maintaining in-house inventory to provide same-day access to contraception, including long-acting reversible contraceptives (LARCs), and timely treatment for sexually transmitted infections. A rebate model would likely force a transition to an order-as-needed system, resulting in delays, reduced patient follow-through, and poorer health outcomes, particularly for the low-income populations served by Title X providers. While we support eorts to improve program integrity and transparency, this model shifts disproportionate burden onto covered entities and undermines the core purpose of the 340B program: to expand access to aordable, timely care for vulnerable patients. Below are the specifics broken down as requested. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. During Fiscal Year 2025 (July 1, 2024 June 30, 2025), our organization processed a total of 2,764 340B-eligible items dispensed within the clinic. ii. Our current administrative costs associated with 340B Program operations and compliance are minimal. Initial setup requires limited sta time from the Clinic Support Manager to establish medications within our 340B purchasing system. Ongoing administrative responsibilities primarily consist of annual program maintenance and revalidation, conducted by the Operations Director. We do not incur significant costs related to third-party vendors, including contract pharmacies. iii. Key cost drivers for our 340B administrative activities are limited and include: One-time medication setup within the 340B purchasing system. Annual program maintenance and revalidation activities. Overall, both initial and ongoing administrative costs remain low and require minimal sta time and organizational resources. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. We estimate that implementation of a 340B Model Rebate Pilot Program would result in significant new financial and administrative burdens for our organization. One-time (Startup) Costs: Approximately $100,000 in upfront costs including: www.bridgercare.org Purchase and maintain existing medication inventory at wholesale acquisition cost (WAC) or retail pricing, rather than at the current 340B discounted rate. System development, sta training and workflow development. IT configurations, integrations, and potential vendor onboarding. Legal and compliance review of rebate contracts and program requirements. Ongoing Annual Costs: Approximately $110,000 per year, including: Salary and benefits for at least one full-time employee (FTE) dedicated to rebate tracking, submission, and reconciliation. Ongoing sta training due to program complexity and turnover. Administrative time associated with monitoring rebate eligibility and compliance. Third party vendor services fees, IT support, maintenance, and updates. Estimated losses from missed, delayed, or denied rebates. Revenue loss associated with reduced service capacity due to inventory constraints. Additionally, these estimates include administrative and operational costs associated with filing rebate requests for drugs subject to the Maximum Fair Price (MFP) under the Medicare Drug Price Negotiation Program (MDPNP). ii. These estimates are based on current purchasing volumes, inventory practices, and staffing models, as well as the anticipated operational changes required under a rebate-based system. Key assumptions include: Current inventory practices require maintaining adequate stock to support same-day care, particularly for high-cost contraceptive methods. Transitioning to a rebate model would require fronting the full acquisition cost of medications. A dedicated staff member would be required to ensure timely and accurate rebate submissions and tracking. A percentage of rebates would be unrecoverable due to administrative complexity, payer variability, or processing errors. Patient behavior would be negatively impacted if same-day services are not available, resulting in lost visits and revenue. iii. The estimated costs reflect the need to support new and expanded administrative functions, including: Claims identification and eligibility determination for rebate submission. Data tracking and submission of rebate requests across payers. Reconciliation of expected versus received rebate payments. Accounts receivable follow-up for unpaid or denied rebates. Audit preparation and compliance documentation. Inventory and cash-flow management adjustments. Under the current upfront 340B discount model, these activities are minimal. Transitioning to a rebate model would fundamentally shift the program from a low- www.bridgercare.org administrative-burden system to one requiring continuous, resource-intensive oversight, significantly increasing operational complexity and cost. iv. To eectively oset these administrative and operational costs, a rebate model would need to include: Prospective payments or advance funding mechanisms to mitigate cash- flow barriers associated with upfront purchasing. Administrative fee add-ons or per-claim processing payments to account for increased labor and system costs. Guaranteed, timely rebate payments with standardized processes to minimize denials and delays. Simplified and centralized submission systems to reduce administrative burden. Accurate quantification of osets could be achieved by: Establishing standardized per-claim administrative cost estimates. Tracking actual sta time and system costs associated with rebate processing. Comparing expected versus actual rebate recovery rates. Even with these mechanisms, the financial risk would remain disproportionately borne by clinics and covered entities. v. The impact of these incremental costs on our organization would be substantial and potentially destabilizing. As a Title X-funded, non-profit family planning clinic operating on a sliding fee scale, our margins are extremely limited. Currently, all medications we purchase and dispense are 340B-eligible. A transition to a rebate model would therefore aect 100% of our pharmaceutical operations. For example, we currently maintain an in-clinic inventory of long-acting reversible contraceptives (LARCs), as well as other birth control methods and STI treatments, to support same-day access: Current 340B cost for 10 of each item in inventory: $20,050.70. Estimated retail cost under the proposed rebate model: $79,643.20. We perform an average of 23 LARC insertions per day. Under a rebate model, the requirement to front these significantly higher costs would create untenable cash-flow constraints. As a result, we may be forced to shift to an order-as-needed model, which would eliminate same-day access to care. This change would be directly contrary to our mission and would disproportionately impact the patients we serve, many of whom rely on timely access to contraception. Delays in care would likely result in: Reduced patient follow-through. Increased unintended health outcomes. Loss of revenue from missed services. In addition, the administrative burden of managing rebates across all medications would require a fundamental restructuring of our operations, diverting limited resources away from patient care. www.bridgercare.org Overall, the transition to a rebate-based model would introduce significant financial risk, increase administrative complexity, and threaten our ability to provide timely, equitable reproductive healthcare. c. Staing Impacts Under a Potential 340B Rebate Model Pilot Program i. Yes, implementation of a 340B Rebate Model Pilot Program would require additional staing and would significantly impact current work allocation. Our organization anticipates the need to hire at least one additional full-time employee (1.0 FTE) dedicated to 340B rebate administration. Without this additional staing, existing clinical and administrative sta, including medical providers, would need to reallocate time away from direct patient care to perform rebate-related administrative functions. Given the complexity and volume of rebate tracking, submission, and reconciliation activities (impacting 100% of our medications), it is not operationally feasible to absorb these responsibilities within current staing levels without negatively aecting patient care capacity. Any diversion of provider or clinical support sta time would greatly reduce appointment availability and limit access to same-day services. ii. We anticipate the need for one permanent full-time employee (1.0 FTE) to support ongoing 340B rebate program requirements. This position would be responsible for: Identifying and tracking all rebate-eligible claims across payers. Submitting rebate requests in accordance with program requirements. Monitoring and reconciling rebate payments against expected amounts. Following up on denied, delayed, or missing rebates. Maintaining documentation for compliance and audit readiness. Coordinating with internal sta and external vendors as needed. Supporting inventory and financial tracking related to upfront medication purchasing. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Implementation of a 340B rebate model would require significant enhancements to existing systems, including: Modifications to our electronic health record (EHR) and practice management system to flag 340B-eligible claims at the point of service. Development or procurement of a rebate tracking and management system capable of: Aggregating claims data across payers. Tracking submission status and rebate payments. Reconciling expected vs. actual reimbursement. Secure data transmission infrastructure to submit rebate requests to multiple manufacturers or centralized platforms. Reporting tools to support audit readiness and compliance documentation. www.bridgercare.org As a Title X clinic with limited IT infrastructure, these capabilities are not currently in place and would require external vendor support or new system procurement. ii. Costs for system development, procurement, maintenance, or integration that would be a major factor. One-time costs: System configuration, integration, and potential vendor onboarding: $25,000 $50,000. Sta training and workflow development: $5,000$10,000. Ongoing annual costs: Software licensing or vendor service fees: $15,000$30,000 annually. IT support, maintenance, and updates: $5,000$10,000 annually. These costs would be recurring and represent a substantial increase compared to current minimal system-related expenses under the upfront discount model. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Additional costs may be associated with implementation of the Rebate Model Pilot Program. One-time costs: Legal and compliance review of rebate contracts and program requirements. Initial sta training and workflow redesign. Recurring costs: Ongoing sta training due to program complexity and turnover. External consulting or audit support to ensure compliance. Increased financial risk due to unrecoverable rebates. Reduction in services oered (e.g., limiting on-site medication inventory). ii. Our organization is a Title X-funded, non-profit, community-based clinic serving a predominantly low-income population on a sliding fee scale. Key factors include: Limited operating margins and cash reserves. Reliance on 340B pricing for aordable medication access. Rural service area, which limits patient ability to return for multiple visits. Lack of internal IT and administrative infrastructure to support complex rebate processes. These factors significantly constrain our ability to absorb financial risk or administrative expansion. iii. A rebate model would likely result in: Elimination of same-day access to medications, particularly LARCs. Transition to order-as-needed models, causing delays in care. Increased patient attrition due to additional visits required. Reduced adherence to treatment plans. For Title X populations, delays in contraception and STI treatment can lead to: Increased unintended pregnancies. Worsened public health outcomes. Greater long-term healthcare costs. www.bridgercare.org 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Payment timing is critical to our financial viability. Even a 10-day turnaround introduces risk due to: Upfront purchasing at significantly higher cost (WAC/retail). High daily dispensing volume of costly medications (e.g., LARCs). Any delays beyond stated timelines would: Create immediate cash-flow shortages. Limit our ability to restock medications. Potentially disrupt patient care services. b. Payment Terms. i. We currently receive no prompt payment or early payment discounts on 340B supplies. ii. Our organization typically remits payment within 30 days, consistent with standard terms. c. A rebate model would fundamentally alter timing by: Requiring full upfront payment at higher prices. Introducing delayed reimbursement dependent on rebate processing. This creates a timing mismatch that increases financial risk. Alternative arrangements (e.g., advance payments, shorter rebate cycles) could partially mitigate, but would not eliminate, this risk. d. The program could include: Financial penalties for late payments. Interest accrual on delayed rebates. Mandatory reporting and transparency requirements. Centralized clearinghouse to standardize submissions and timelines. e. Other ways to address payment timing and potential cashflow impacts for covered entities: Real-time or near-real-time adjudication systems. Standardized submission formats to reduce processing delays. Pre-funded rebate pools. 3. Rebate Denials a. Yes, strict guardrails are essential to prevent inappropriate denials, reduce administrative burden, and ensure financial predictability. b. Required elements for a rebate denial should include: Standardized denial reason codes. Mandatory documentation supporting denial. Defined timelines for resubmission or appeals. Formal appeals process with resolution deadlines. Uniform submission templates. 4. Data Collection by Covered Entities www.bridgercare.org a. Our 340B data is currently managed through our electronic health record and practice management system. We have no other third-party vendors for 340B administration. Minimal tracking is also required through Excel spreadsheet. b. Currently our oice completes: Monthly reconciliations between inventory and dispensing records. Complete internal review during annual revalidation. Limited audit activity due to program simplicity. c. Changing to the Rebate Model would require significant ongoing changes, including: Real-time claim-level tracking. Expanded data storage and reporting. Continuous reconciliation processes. d. Minimum required claim elements include: Patient encounter and eligibility indicators. National Drug Code (NDC). Prescriber and service location. Payer and claim adjudication details. Dispense date and quantity. This data could be provided on a CMS-1500 claim form, but would then include more than the minimum necessary requirements as defined by HIPAA. e. We would recommend:. Use of HIPAA-compliant transmission systems. Data Use and Business Associate agreements with manufacturers and vendors. Minimum necessary data standards. Encryption and audit trails. 5. Manufacturer Eorts to Avoid Duplicate Discounts a. Our organization carves-in our supplies, and since 100% of our supply is 340B eligible, we do not have to maintain separate physical stock. 340B items are charged to Medicaid at their purchase price, tracked using a specialty service item codes. Prices are updated quarterly with actual invoicing information. Annual reporting confirms no medications were charged at commercial pricing. Any mistakes are immediately resubmitted with corrected claims and overpayments are returned. b. Our organization has increased attention to identifying drugs subject to Maximum Fair Price (MFP) and created manual tracking due to lack of integrated systems. c. Our organization's experience of MFP has been limited ability due to lack of real-time visibility, inconsistent payer data, and capacity issues. d. There is some administrative burden of manual tracking in order to identify potential duplicate discounts, but it is minimal under our current system. e. For a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs they would likely need: Claim-level identifiers (patient claim number, date of service, NDC information, billed units, etc.) Payer type www.bridgercare.org 6. Required Reporting a. Manufacturers should be required to submit rebate approval/denial rates, payment timelines, and dispute volumes on a monthly or quarterly basis to ensure compliance. b. HRSA should publicly share aggregated data on compliance (above) and payment timelines also on a monthly or quarterly basis. c. Manufacturer data to support the assessment of the rebate program should be provided monthly during pilot. Multi-year tracking should be used for evaluation. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Our organization believes that transitioning to a Rebate Model would negatively aect the integrity of the 340B program due to increased complexity, and burden shift from manufactures to covered entities who are likely already over capacity. This would lead to a high risk of errors and missed claims that would disproportionally aect those the which need the support of the program the most. b. A rebate-based model would: i. Assist manufacturers in their eorts to avoid paying duplicate discounts under 340B and CMS payment programs, but would shift a large financial burden to covered entities. ii. Could improve traceability but increases administrative risk leading to improper claims. iii. Potentially improve pricing transparency across stakeholders, but operationally burdensome for the populations it is meant to support. c. We would recommend standardized, centralized systems for improving data collection and reporting to strengthen the 340B Program's integrity. We would also urge HRSA to consider who has the ability to absorb additional cost and administrative burden; It is not the organizations who actually provide the discounted medications through the 340B program. d. While transparency and traceability may improve by switching to a rebate program, costs and operational risks significantly outweigh benefits especially for small, Title X- funded providers.
HRSA-2026-0001-1485Baylor Scott & White Health2026-04-15T04:00Z5,088 chars
BSWH comment letter attached. Page 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Via electronic submission to: https://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Baylor Scott & White Health (BSWH) appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. As the largest not-for-profit healthcare system in Texas, BSWH includes 53 hospitals, more than 1,300 health system care sites, and importantly six covered entities that participate in the 340B program. The 340B program is a critical component of the safety net healthcare system and provides significant benefit to the patients served. The RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has performed well for decades. Respectfully, BSWH remains concerned about implementation of a rebate model, and urges HRSA to reconsider based on the feedback shared below. HRSA Significantly Underestimates Administrative Burden HRSA estimates that implementation of a rebate model would require approximately five additional hours per week of program compliance and operations burden. Based on BSWHs direct operational experience with existing claims-based compliance platforms, this estimate is not accurate. A rebate model would require the creation of entirely new workflows, including claims extraction, validation, submission, tracking, reconciliation, dispute resolution, and audit support. These activities are labor-intensive, highly manual, and ultimately require BSWH to hire seven to eight FTEs and spend hundreds of hours a month on program compliance and operations. Today, even limited claims submission processes require significant staff time due to inconsistent drug manufacturer requirements, lack of standardized data formats, and tight submission deadlines (often within 45 days of service). These constraints increase the likelihood of denials and rework. A rebate model would scale these burdens across a broader set of drugs and manufacturers, compounding inefficiencies and administrative complexity. Substantial New Staffing and Vendor Costs Implementation of a rebate model would require BSWH to hire additional personnel and expand third- party vendor support. Based on our current experience: Each covered entity facility would require at least one additional full-time employee dedicated to rebate administration, including claims submission, tracking, and dispute resolution management. Additional centralized financial and administrative staff (estimated 12 FTEs) would be required to manage reconciliation, accounting, and compliance oversight. New technology requirements and vendors along with third-party administrators would impose new and ongoing costs to support data extraction, formatting, submission, and reporting. These are not one-time implementation costs. These costs would be permanent additions to the cost structure of program participation. Page 2 Opportunity Cost: Administrative Burden Diverts Resources from Patient Care The cumulative effect of the proposed rebate model requirements is a meaningful diversion of resources away from patient care. 340B program savings that currently support patient assistance programs, clinical operations, and pharmacy services would be reassigned to administrative compliance functions. Financial resources would be redirected toward staffing, consultants, and IT systems rather than community benefit programs and expanded access to care. The rebate model introduces operational complexity, increases permanent administrative staffing needs, and creates ongoing compliance costs that reduce the net value of the 340B program. These burdens are particularly acute for large, multi-entity systems like BSWH, where scale amplifies both cost and operational risk. Conclusion The existing upfront discount model is efficient, predictable, and aligned with the statutory purpose of the 340B program. In contrast, a rebate model would introduce substantial administrative burden, require significant new and ongoing investments in staffing and infrastructure, and reduce the ability of covered entities to use 340B savings to support patient care. For these reasons, BSWH respectfully urges HRSA not to proceed with 340B rebate model implementation. If HRSA continues to explore program changes, we recommend returning to upfront payments, the way the program has operated for the past 30 years. We appreciate your consideration and welcome further engagement on this issue. Sincerely, _______________________________ Lisa Athens, J.D. SVP Chief Risk Officer 301 N. Washington Ave. | Administration Bldg. 4th floor | Dallas, Texas 75246 214-820-9982 Office | 214-820-2384 Fax lisa.athens@BSWHealth.org
HRSA-2026-0001-1486Ohio Hills Health Services2026-04-15T04:00Z52,510 chars
See attached file(s) OHHC Ohio Hills Health Centers April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Ohio Hills Health Services (OHHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: OHHS anticipates a loss of approximately $1,269,060.00 from entity-owned pharmacy operations and a 27% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CH expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Ohio Hills Health Services began in 1976 and today provides medical, dental and behavioral health care services to 9300 Ohioans from 9 eastern Ohio counties. OHHC currently operates six health center locations in five counties including two school-based health centers and our service area covers4,000 square miles. Ohio Hills Health Services appreciates the opportunity to share our estimated burden with HRSA on compliance with the 340B rebate model pilot program. Given the severe administrative, financial, and operational burden a rebate model would place on CHCs, Ohio Hills Health Servies again requests that CHCs be exempted from the pilot program. Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org OHHC Ohio Hills Health Centers For 60 years, CHCs have provided high-quality, affordable, comprehensive care - including primary, preventive, dental, behavioral health, pharmacy, vision, and other essential health services to nearly 34 million patients annually at over 17,000 locations across rural and non-rural communities. This includes over 10 million rural residents (at least 1 in 5), more than 20 million (at least 1 in 3) in poverty, and more than 6 million (at least 1 in 5) uninsured people. CHCs serve at least 1 in 10 Americans and up to 1 in 7' yet account for only 1% of total U.S. healthcare spending, saving Medicaid and Medicare billions annually by reducing costly emergency, inpatient, and specialty care. 2 Research shows that every dollar invested in primary care yields a 13-to-1 return in overall health system savings. 3 In addition to medical services, CHCs provide dental, behavioral health, pharmacy services, and other "enabling" or support services that facilitate access to care for individuals and families in medically underserved communities, regardless of insurance status or ability to pay. Ohio Hills Health Services maintains its role as the national voice for CHCs and believes that high-quality primary health care is essential in creating healthy communities. Ohio Hills Health Services is a non-profit health care operation organized by communities in Eastern Ohio to promote healthy lifestyles and to provide comprehensive treatment and preventive services for area residents. The primary focus is to provide prompt, courteous, and affordable health care that is responsive and sensitive to individual needs. Ohio Hills Health Services is founded on the philosophy that the delivery of health care to the entire community and all its subgroups, including the medically indigent segment, is possible and practicable in a framework which does not separate subsets from total population and offers treatment regardless of economic status, race, national, geographic, or religious background, or political philosophy. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. 1https:/www,weitzmaninstitute.ore/the-hidden-patient-base/ 2 Volerman A. Carlson B, Wan W, Murugesan M, Asfour N. Bolton J, Chin MH, Sripipatana A. Nocon RS. Utilization, quality, and spending for pediatric Medicaid enrollees with primary care in health centers vs non-health centers. BMC Pediatr. 2024 Feb 8;24(1):100. doi: 10.1186/s12887-024-04547-y. PMID: 38331758; PMCID: PMC10851548. https://pubmed.ncbi.nlm.nih.gov/38331758/ 3 https://www.oregon.gov/oha/HPA/dsi-pcpch/Documents/PCPC1I-Program-Implementation-Rcport-Final-Sept-2016.pdf Family Heatth Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is on equal opportunity provider. 740-239-6447 1 ohiohills.org OHHC Ohio Hills Health Centers By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For OHHS, this means it will impact: In CY 2025 OHHS had 66,000 340B transactions and 9300 unduplicated patients annually that will directly be negatively affected by a rebate model. A rebate model will drastically reduce cash flow for OHHS which, in turn, reduces OHHS' ability to provide much needed services to it 9300 patients and will reduce its ability to fill reduced costs prescriptions in a timely manner. . Current admin costs for your 340B program OHHS currently utilizes its 340B savings to fund both its dental program and behavioral health program. OHHS provided free and discounted dental care to almost 3000 patients across 4 dental sites. OHHS is one of only a couple dental providers who accept Ohio Medicaid. A 340B rebate model will severely reduce OHHS's ability to provide these necessary services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.4 This patient population relies on affordable medications to manage these long-term conditions. 4Rchard P, Ku L Dor A. Tan E, Shin P. Rosenbau S. Cost savings associate with the use o communiy health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-64471ohiohills.org OHHC Ohio Hills Health Centers We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.$ Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.6 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.7 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.8 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,9 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would 5 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep; 19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 6 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.ore/doi/pdf/10.1161/circulationaha.123.06.5748 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Usc and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. hutps://www.samhsa.gov/data/data-we-collect/nsdub-national-surveydrug-use-and-health/national-releases 8 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Labcl Extension Study. Front Neurol. 2022 Feb 23:13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 2025 UDA Data, HRSA (hrsa.gov) Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Cente rs: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is on equal opportunity provider. 740-239-64471 ohiohills.org OHHC Ohio Hills Health Centers reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Ohio Hills Health Services provided $101,001.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Family Health Centers: Barnesvile, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447|ohiohills.org OHHC Ohio Hills Health Centers Staffing Impact: OHHS anticipates needing an additional 1.5 to 2.0 FTEs as a Result of Rebate Model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, OHHS anticipates an increase of $250,000.00 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project As previously stated, OHHS estimates an additional 1.5 to 2.0 FTEs will be needed to manage the additional work created by a 340B rebate model. Given market conditions for its region, OHHS estimates an annual salary of $40,000 will be required to recruit staff for these positions. Given a base salary plus benefits of 30% OHHS will have and additional $105,000 in salary costs due to the rebate program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.11 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHs operate on razor-thin margins, and these additional costs are not an option for many entities. OHHS estimates its up-front costs to purchase 340B pharmaceuticals will increase by over $2,000,000. This is quite frankly unsustainable for OHHS that has a $400,000 loss in FY 2025. This rebate model will force many smaller CHC to shutter critical services or close their doors permanently. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. OHHS estimates approximately 4000 hours annually will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Ohio Hills Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 10 Intermal NACHC assessment (99 responses). 11bid. Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 1 ohiohills.org OHHC Ohio Hills Health Centers Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. OHHS estimates $50,000.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 9327 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at $100,000.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. OHHS' in- house pharmacy utilizes Pioneer for its software. According to Pioneer representatives, a custom interface will need to be developed by its EMR vendor (EclinicalWorks) to pull the data needed to report the required information. This cost is estimated at $25,000 up from monthly maintenance fees of $500 to $750 monthly. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. As mentioned above, this is estimated at $25,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination Family Health Centers: Barnesville, Caldwell. Freeport, Quaker City, Woodsfield Dental Centers: Freeport, Barnesville Administrative Offices 101 East Main Street This institution is on equal opportunity provider. Barnesville, OH 43713 740-239-64471 ohiohills.org OHHC Ohio Hills Health Centers For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with nine pharmacies to increase access to affordable medications. . TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across the nine different pharmacy locations to ensure rebates are paid correctly. - Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in six county area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,12 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. 13 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.14 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 12 Vulnerability Index Approach to Ilentifv Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology I JAMA Network Open JAMA Network 13https://www.hcalthafTairs.org/doi/abs/10.1377/hlthafC.2024.001922joumalCodc=h1thaff Internal NACHC survey data Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org OHHC Ohio Hills Health Centers expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.' In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. 16 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. OHHS utilizes the 340B savings fund and its non-profitable services such as dental and behavioral health. OHHS also uses this 340B savings to lower the costs of many medications for it patients. Recently, an OHHS patient, who had no insurance, was able to get a very important antibiotic for only $5.00. 15 HRSA FAQ 16 Such discounts are subject to potential legal and contractual restrictions. https:/bphc.hrsa.gov/compliance/compliance- manual/chapter#footnote10 Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org OHHC Ohio Hills Health Centers This patient would not have been able to afford this prescription if not for OHHS and the 340B program. If OHHS had to pay retail costs for this antibiotic, the $5.00 dispensing fee would not have been possible. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).17 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 17https://enlivenhealth.co/blog/vear-cnd-business-health-check-key-metrics-every-pharnacy-owner-should-review Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 1O1 East Main Street Barnesville, OH 43713 This institution is on equal opportunity provider. 740-239-6447 ohiohils.org OHHC Ohio Hills Health Centers 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B18 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. 19 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost OHHS $5,017.34 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $460.23 to purchase these same drugs at the 340B ceiling price. This represents a 1000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, OHHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back or even shutter non-revenue-generating but essential services, such as the dental services and behavioral health services. https://340bpricing.hrsa.gov/ 19https://www.cms.gow/files/zip/sclected-drug-list-negotiated-prices-also-known-inaximum-fair-prices-statutezip.zip Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 ohiohills.org OHHC Ohio Hills Health Centers Operating Hours: We anticipate needing to reduce our clinic hours by 12 hours per week, specifically impacting evening hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund Certified Application Counselors which will negatively affect OHHS' patients ability to source Marketplace health insurance or apply for Medicaid or Medicare. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 1000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Ohio Hills Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Ohio Hills Health Services estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,269,060.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Ohio Hills Health Services estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $100,346.80. Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org COHHC Ohio Hills Health Centers Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. OHHS has no financial reserves currently. This is not a sustainable solution; the interest costs alone are estimated to be $7,980,00 annually funds that are currently dedicated to OHHS' free and discounted quarterly lab screening and hiring another nurse practitioner to replace one that is resigning. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Ohio Hills Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Ohio Hills Health Services urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $54,685.32. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers 20 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) htps:/www.fcderalregister.gov/documents/2025/08/01/2025-14619/340b-program-noticc-application-process-for-the-340b- rebate-model-pilot-progran Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org OHHC Ohio Hills Health Centers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. . Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447| ohiohills.org OHHC Ohio Hills Health Centers CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. - Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. . Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City, Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is an equal opportunity provider. 740-239-6447 | ohiohills.org OHHC Ohio Hills Health Centers Conclusion Ohio Hills Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Ohio Hills Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Ohio Hills Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at jbritton@ohiohillshealth.org Sincerely, 42t Jeff Britton, MBA, RRT, RCP Ohio Hills Health Services Family Health Centers: Barnesville, Caldwell, Freeport, Quaker City. Woodsfield Administrative Offices Dental Centers: Freeport, Barnesville 101 East Main Street Barnesville, OH 43713 This institution is on equal opportunity provider. 740-239-6447 1 ohiohills.org
HRSA-2026-0001-1487Syracuse Community Health2026-04-15T04:00Z15,346 chars
See attached file(s) SYRACUSE COMMUNITY HEALTH April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Syracuse Community Health and the 30,oo0 patients we serve annually, thank you for the opportunity to comment on HRSA's Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Our mission at Syracuse Community Health is to provide quality healthcare services to all individuals with a commitment to those who might otherwise be excluded from the healthcare system, while remaining cost-effective, efficient and competitive. With our 13 clinical locations across Syracuse and Onondaga County, we provide healthcare services to everyone, regardless of their ability to pay. Our Sliding Fee Program, supported by our 340B drug program, allows patients to pay an amount they can afford, based on family income and size. Here at Syracuse Community Health, social justice is an important part of our mission. For us, social justice means building up our community in a way that empowers all people, including the disadvantaged and marginalized, to reach their full potential. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of over $1 million from entity-owned pharmacy operations and for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Syracuse Community Health strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSA's and manufacturers' stated goals for the rebate model without imposing the harms detailed below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 1 SYRACUSE COMMUNITY HEALTH 4If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that [....] govern the approval of manufacturers' rebate plans" must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers "stretch scarce Federal resources as far as possible." A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Syracuse Community Health, a 340B Rebate Model Pilot Program will impact: The loss of over $3.2 million over the next 3 years relating to the 340B-Qualified prescriptions This loss of revenue will impact our ability to provide much-needed community programs like dental care, SUD treatment, mental health services and school-based health programs that have been supported by the 340B program. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients' access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 SYRACUSE COMMUNITY HEALTH Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 34oB Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate model's complicated requirements, we anticipate needing to hire two additional staff members whose sole responsibility would be to track the required information to meet the significant burden of this rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. The first $100,000 of software integration will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 34oB consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes 3 SYRACUSE COMMUNITY HEALTH withhigher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. Syracuse Community Health helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination, behavioral health services, dental services, and school-based health programs. Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours, which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 34oB Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly 4 SYRACUSE COMMUNITY HEALTH vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to "advance" CHCs enough rebates to cover the greater of two full package sizes or two months' worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSA's goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy 5 SYRACUSE COMMUNITY HEALTH And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Syracuse Community Health strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New York's primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSA's decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nation's safety net. If you have any questions, please contact Dr. Ofrona Reid, OReid@syracusecommunityhealth.org Sinceraly Ofrona A. Reid, MD, MBA, MS President & CEO 6
HRSA-2026-0001-1488Chiricahua Community Health Centers, Inc.2026-04-15T04:00Z128,715 chars
See attached file(s) We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chiricahua Community Health Centers, Inc. (Chiricahua), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Should the proposed rebate model be approved, Chiricahua projects a $500,000 loss from entity-owned pharmacy operations in the coming year, with projected losses increasing annually to approximately $1 million in lost 340B savings in 2028. Projected Cost Increases: The proposed rebate model would significantly impact pharmacy operational costs. Chiricahua expects to incur more than $6.1 million in additional annual costs, driven primarily by the substantially higher up-front cost of medication acquisition required under the proposed model, along with associated inventory financing and cash flow impacts. These projected impacts are especially concerning for CHCs serving rural, medically underserved regionswhere 340B savings are not optional but essential for maintaining access to care. Cochise County is designated as a Health Professional Shortage Area for medical, mental health, and dental services. Chiricahua is the countys only Federally Qualified Health Center, serving a region in southeastern Arizona roughly the size of Connecticut and Rhode Island combined and spanning one hundred miles of the U.S.Mexico border. Geographic isolation and widespread poverty make preventive and primary care delivery particularly complex. In 2025, Chiricahua cared for 33,472 individuals and dispensed 214,457 340B prescriptions to eligible patientsreaching more than one quarter of the countys residents. Twenty-two percent of those served lived below the federal poverty level. The health needs of Cochise County further illustrate the degree to which our communities rely on stable, predictable access to care. Rural residents experience higher rates of chronic illness and domestic violence, driven by social isolation, transportation barriers, and limited employment opportunities. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Insurance coverage remains a significant indicator of access: in Cochise County, 11.2% of adults and 9.3% of children are uninsured. Rates of diabetes, obesity, and drug overdose all exceed statewide averages. Fourteen percent of residents reported experiencing at least 14 days per month of poor physical health, and 15% reported the same for mental health. Taken together, these conditions underscore the severity of local need and the indispensable role of safety net programs. Overall, an estimated 16.3% of county residents live below the federal poverty thresholdrising to 19.6% among childrenhighlighting the critical importance of stable, accessible health services in this region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Chiricahua uses its 340B savings to subsidize a range of critical clinical and enabling services that are either under-reimbursed or not reimbursed at all, thereby expanding access and improving care for underserved patients. These savings support Care Management services for Medicare beneficiaries, Pediatric services that are otherwise funded through time-limited grants, and Care Management staffing levels that have already been reduced but are being maintained at the current level despite reimbursement pressures. Chiricahua also applies 340B savings to address Social Determinants of Health, sustain Dental serviceswithout the 340B savings adult dental patients would have to be significantly limited and support clinical pharmacy services that are not independently reimbursed. Additional uses include Diabetes Self-Management Training across all payers, and pharmacy home delivery and mail-order programs that improve medication, access and adherence without generating additional reimbursement. Finally, 340B savings help fund vital support services such as Domestic Violence staff, ensuring that Chiricahua can continue providing comprehensive, patient-centered care consistent with its mission to serve vulnerable populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Chiricahua Community Health Centers, Inc., provided $5,329,078.81 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Chiricahua Community Health Centers, Inc., anticipates needing 2.4 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Chiricahua Community Health Centers, Inc., anticipates an increase of $6,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Chiricahua, the estimated annual cost to hire additional staff is approximately $ 168,480 and projected upfront drug acquisition cost increases exceeding $6 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Chiricahua urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate significant upfront expenses to modify our pharmacy software, implement custom dashboard enhancements, and design new internal workflows. An estimated $73,478.32 will be required simply to establish baseline compliance before a single rebate is received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 69 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Cochise County, Arizona with no affordable 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Building on this framework, Chiricahua offers a sliding fee discount on medications, including insulin and injectable epinephrine, by providing eligible patients access to these medications at no more than Chiricahuas 340B acquisition cost plus a small administration fee. This discounted pricing is available to patients who meet defined financial need requirements. Eligibility is determined through Chiricahuas Sliding Fee Discount Program (SFDP), and any patient approved for medical or dental sliding fee status automatically receives the corresponding pharmacy discount level. To remain compliant with federal 340B requirements, patients must be established with Chiricahua and meet all elements of the 340B patient definition. Once qualified, patients pay the lowest applicable amount: either their insurance copay or the discounted sliding fee price. The SFDP then supports the patient when financial need is present, ensuring that cost never exceeds the 340B price plus the nominal fee. Chiricahua provides these reduced-cost medications through its inhouse pharmacies, using standardized and compliant procedures so that all eligible patients have consistent access to discounted insulin and injectable epinephrine. This structure ensures that Chiricahua can fulfill both its mission and federal obligations while maintaining affordability for patients. CHCs rely on wholesaler price files to determine drug acquisition costs and to calculate patient discounts in real time. However, pharmacy software systems are not designed to support manually added price files, particularly within a single inventory category. When new wholesaler price files are loaded, the system automatically overwrites any manually entered 340B pricing. Under a rebate model, the wholesaler file would reflect WAC rather than the 340B ceiling price, removing the operational ability to determine an accurate discounted patient price at the point of sale. This gap forces CHCs to estimate patient discounts without knowing whetheror whena rebate will be paid, exposing them to financial risk if rebates are delayed or denied and compromising their ability to meet federally required sliding-fee obligations. In addition to the pricing uncertainty, CHCs are deeply concerned about the cash-flow implications of having to purchase medications at full WAC. Paying WAC upfront increases the likelihood that CHCs will approach or exceed wholesaler credit limits, at which point the ability to order medications may be halted until outstanding balances are resolved. Although rebate payments are expected to arrive approximately 10 days after data submission, earlier versions of the rebate pilot allowed up to 45 days for covered entities to submit data. This means the total lag from dispensing the medication to receiving the rebate could reach 55 days. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The financial strain is even more pronounced for CHCs that operate entity-owned pharmacies with physical inventories. Because these pharmacies must stock shelves at WAC, the delay between purchase and rebate directly affects operational liquidity. Retail pharmacies typically turn inventory every 30 days. Even assuming a faster-than-average 15-day inventory turnover, CHC pharmacies could face a 70- to 85-day gap between purchase and rebate under a 45-day submission window. Anecdotal feedback from CHC pharmacies suggests plans for a 14-day reporting cadence for entity-owned inventory. Even under this more frequent submission schedule, the expected purchase-to-rebate time frame remains 40 to 55 dayslong enough to create significant and ongoing cash-flow challenges. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on organizational data, Chiricahua estimates that purchasing the ten drugs under the proposed rebate model for 2026 would require $4,623,980 in up front capital. In contrast, the same medications currently cost $175,744.69 when purchased at the 340B ceiling price. This represents a 2,531 percent increase in up-front procurement costs. As previously noted, when applied across the broader drug portfolio, the proposed rebate program is projected to result in an aggregate up-front cost increase exceeding $6.1 million annually by 2028. Chiricahua Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To absorb the upfront cost of medications purchased at WAC, Chiricahua would be forced to scale back essential, non-revenue-generating services that are central to patient care and care-coordination. These include: Case Management, which provides direct support to high-risk Medicare patients by coordinating care, assisting with complex medical needs, and reducing avoidable hospitalizations. Patient Transportation Services, which ensure that vulnerable patientsmany of whom live in remote areasare able to reach medical appointments with Chiricahua providers and specialty care, often located more than two hours away. Community Health Workers, who are critical in identifying and assisting individuals in geographically isolated parts of the county, connecting them to primary care, preventive screenings, and social-service supports. These programs are fundamental to achieving quality, continuity, and access to care in underserved communities; reducing them to offset WAC-level drug costs would have direct and harmful consequences for patient outcomes. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Chiricahua Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Chiricahua Community Health Centers Inc. estimates that the associated rebate opportunity cost for 2026 would be approximately $470,286. As the number of drugs subject to the rebate model increases, this unrealized rebate value is projected to grow to just under $1 million annually by 2028. Chiricahua Community Health Centers Inc. estimates that purchasing drugs subject to the rebate model at wholesale acquisition cost rather than at 340B ceiling prices would increase up front monthly drug expenditures by approximately $379,333 in 2026, $487,689 in 2027, and $678,709 in 2028. Every dollar expended upfront at Wholesale Acquisition Cost (WAC) represents funds that remain effectively immobilized within the manufacturers rebate reconciliation process. During the period in which Chiricahua awaits rebate reimbursement, these dollars cannot be deployed to support operational needs, thereby constraining the organizations capacity to respond to urgent public health events, infrastructure failures, or other immediate system demands. Operating under a rebate-based model would require Chiricahua to rely heavily on its limited financial reserves to sustain medication purchasing at WAC. This reliance is not financially sustainable. These reserves currently support core service linesincluding Laboratory, Mental Health, Dental, Substance Use Disorder treatment, Nutrition Services, Case Management, Transportation, Outreach, Eligibility Assistance, and Community Health Workerseach of which plays a critical role in fulfilling the Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer organizations mission and federal program obligations. Diverting these resources to cover inflated drug acquisition costs undermines the stability of these essential services. Forcing Community Health Centers (CHCs) to absorb the financial burden of WAC-priced purchasing while awaiting delayed rebate payments introduces significant operational and clinical risk. In Chiricahuas service area, where patients rely exclusively on the health center for comprehensive primary and preventive care, any disruption to medication procurement due to depleted reserves or exhausted wholesaler credit limits directly jeopardizes the communitys safety net. If Chiricahua is pushed into a prolonged rebate-dependent cash-flow position, the downstream impacts are immediate and measurable: extended patient wait times, reduced service availability, constrained clinical capacity, and diminished ability to provide deeply discounted medications. These consequences affect not only the patients served by Chiricahua, but also mirror the risks faced by the more than 52 million patients nationwide who depend on CHCs for accessible and affordable care. In this context, cash-flow instability is not merely a financial concernit constitutes a threat to continuity of care and to the equitable access that CHCs are federally mandated to provide. a. Financial Impact of Rebate Denials and Delays Chiricahua Community Health Centers, Inc., urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC incurs a net loss on the transaction, having already paid the full wholesale acquisition cost to the wholesaler while dispensing the medication to the patient at a steeply discounted rate. Based on current utilization of the ten selected drugs, even a conservative rebate denial rate of 10 percent would result in an estimated $500,000 net annual loss in 2026. As additional drugs become subject to the rebate model, this loss is projected to grow to nearly $1 million annually by 2028. This level of financial loss is not absorbable for our CHC, as it represents a direct diversion of limited resources from our safety net budget. Any reduction in available financial resources will directly undermine our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.16 The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. 16 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.19 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also impose substantial administrative and technological burdens on CHCs. National analyses indicate that compliance would require new software systems, integration with existing platforms, and recurring staff training. NACHC estimates these expenses at $30,000 to $50,000 per year, with the potential for significantly higher costs depending on the specific technology selected. Chiricahuas own assessment projects $7,500 in implementation costs and $2,500 per month in maintenance, totaling $37,500 annually, solely to support the software required to track and process rebate-related data. To meet rebate-model requirements, CHCs would need to implement new tracking functionality either within their electronic medical record systems or through external standalone platforms. This would entail ongoing licensing fees, vendor support costs, and continual workflow redesigning both clinical and administrative operations. Importantly, these expenses are ongoing and additive, not one-time 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer investments, and would be incurred despite the fact that CADs are not currently billed to Medicare Parts B or D. Further, the Medicare Part B negotiated pricing provisionsrelevant to only a limited subset of medicationsdo not take effect until 2028, underscoring the lack of near-term applicability and raising questions about why CHCs would be required to absorb substantial administrative and technology costs for a billing context that does not yet exist. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B 27 Id. 28 42 U.S.C. 256b(a)(1) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 34 C.F.R. 447.518(a). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer- payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 56 42 U.S.C. 256b(a)(5)(B) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily- prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Chiricahua strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Chiricahua believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Chiricahua appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact please contact Director of Pharmacy David Merrell, PharmD at DMerrell@Chiricahua.org or Chief External Affairs Officer Dennis Walto, MA at DWalto@Chiricahua.org. Sincerely, _________________________________ CEO Jonathan Melk, MD FAAP Chiricahua Community Health Centers, Inc. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F
HRSA-2026-0001-1489David Merrell · Douglas, AZ, United States2026-04-15T04:00Z129,207 chars
See attached file(s) The proposed 340B Rebate Model Pilot would significantly undermine Community Health Centers ability to provide sliding fee discounts and affordable medications to patients. By requiring pharmacies to purchase drugs at full Wholesale Acquisition Cost upfront, CHC pharmacies, including entity owned and contract pharmacies, would no longer have access to 340B pricing at the time the patient needs the medication. This shift would introduce delays, create financial strain, and erect new barriers to care, particularly for uninsured and underinsured patients who rely on point-of-sale discounts. A rebate-based model represents a fundamental departure from the original intent of the 340B program, which was designed to allow safety net providers to stretch scarce federal resources and expand access to comprehensive care. Ultimately, this model would make it operationally impossible for many Health Centers to provide the sliding fee scale discounted medications required by law. Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chiricahua Community Health Centers, Inc. (Chiricahua), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Should the proposed rebate model be approved, Chiricahua projects a $500,000 loss from entity-owned pharmacy operations in the coming year, with projected losses increasing annually to approximately $1 million in lost 340B savings in 2028. Projected Cost Increases: The proposed rebate model would significantly impact pharmacy operational costs. Chiricahua expects to incur more than $6.1 million in additional annual costs, driven primarily by the substantially higher up-front cost of medication acquisition required under the proposed model, along with associated inventory financing and cash flow impacts. These projected impacts are especially concerning for CHCs serving rural, medically underserved regionswhere 340B savings are not optional but essential for maintaining access to care. Cochise County is designated as a Health Professional Shortage Area for medical, mental health, and dental services. Chiricahua is the countys only Federally Qualified Health Center, serving a region in southeastern Arizona roughly the size of Connecticut and Rhode Island combined and spanning one hundred miles of the U.S.Mexico border. Geographic isolation and widespread poverty make preventive and primary care delivery particularly complex. In 2025, Chiricahua cared for 33,472 individuals and dispensed 214,457 340B prescriptions to eligible patientsreaching more than one quarter of the countys residents. Twenty-two percent of those served lived below the federal poverty level. The health needs of Cochise County further illustrate the degree to which our communities rely on stable, predictable access to care. Rural residents experience higher rates of chronic illness and domestic violence, driven by social isolation, transportation barriers, and limited employment opportunities. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Insurance coverage remains a significant indicator of access: in Cochise County, 11.2% of adults and 9.3% of children are uninsured. Rates of diabetes, obesity, and drug overdose all exceed statewide averages. Fourteen percent of residents reported experiencing at least 14 days per month of poor physical health, and 15% reported the same for mental health. Taken together, these conditions underscore the severity of local need and the indispensable role of safety net programs. Overall, an estimated 16.3% of county residents live below the federal poverty thresholdrising to 19.6% among childrenhighlighting the critical importance of stable, accessible health services in this region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Chiricahua uses its 340B savings to subsidize a range of critical clinical and enabling services that are either under-reimbursed or not reimbursed at all, thereby expanding access and improving care for underserved patients. These savings support Care Management services for Medicare beneficiaries, Pediatric services that are otherwise funded through time-limited grants, and Care Management staffing levels that have already been reduced but are being maintained at the current level despite reimbursement pressures. Chiricahua also applies 340B savings to address Social Determinants of Health, sustain Dental serviceswithout the 340B savings adult dental patients would have to be significantly limited and support clinical pharmacy services that are not independently reimbursed. Additional uses include Diabetes Self-Management Training across all payers, and pharmacy home delivery and mail-order programs that improve medication, access and adherence without generating additional reimbursement. Finally, 340B savings help fund vital support services such as Domestic Violence staff, ensuring that Chiricahua can continue providing comprehensive, patient-centered care consistent with its mission to serve vulnerable populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Chiricahua Community Health Centers, Inc., provided $5,329,078.81 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Chiricahua Community Health Centers, Inc., anticipates needing 2.4 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Chiricahua Community Health Centers, Inc., anticipates an increase of $6,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Chiricahua, the estimated annual cost to hire additional staff is approximately $ 168,480 and projected upfront drug acquisition cost increases exceeding $6 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Chiricahua urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate significant upfront expenses to modify our pharmacy software, implement custom dashboard enhancements, and design new internal workflows. An estimated $73,478.32 will be required simply to establish baseline compliance before a single rebate is received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 69 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Cochise County, Arizona with no affordable 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Building on this framework, Chiricahua offers a sliding fee discount on medications, including insulin and injectable epinephrine, by providing eligible patients access to these medications at no more than Chiricahuas 340B acquisition cost plus a small administration fee. This discounted pricing is available to patients who meet defined financial need requirements. Eligibility is determined through Chiricahuas Sliding Fee Discount Program (SFDP), and any patient approved for medical or dental sliding fee status automatically receives the corresponding pharmacy discount level. To remain compliant with federal 340B requirements, patients must be established with Chiricahua and meet all elements of the 340B patient definition. Once qualified, patients pay the lowest applicable amount: either their insurance copay or the discounted sliding fee price. The SFDP then supports the patient when financial need is present, ensuring that cost never exceeds the 340B price plus the nominal fee. Chiricahua provides these reduced-cost medications through its inhouse pharmacies, using standardized and compliant procedures so that all eligible patients have consistent access to discounted insulin and injectable epinephrine. This structure ensures that Chiricahua can fulfill both its mission and federal obligations while maintaining affordability for patients. CHCs rely on wholesaler price files to determine drug acquisition costs and to calculate patient discounts in real time. However, pharmacy software systems are not designed to support manually added price files, particularly within a single inventory category. When new wholesaler price files are loaded, the system automatically overwrites any manually entered 340B pricing. Under a rebate model, the wholesaler file would reflect WAC rather than the 340B ceiling price, removing the operational ability to determine an accurate discounted patient price at the point of sale. This gap forces CHCs to estimate patient discounts without knowing whetheror whena rebate will be paid, exposing them to financial risk if rebates are delayed or denied and compromising their ability to meet federally required sliding-fee obligations. In addition to the pricing uncertainty, CHCs are deeply concerned about the cash-flow implications of having to purchase medications at full WAC. Paying WAC upfront increases the likelihood that CHCs will approach or exceed wholesaler credit limits, at which point the ability to order medications may be halted until outstanding balances are resolved. Although rebate payments are expected to arrive approximately 10 days after data submission, earlier versions of the rebate pilot allowed up to 45 days for covered entities to submit data. This means the total lag from dispensing the medication to receiving the rebate could reach 55 days. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The financial strain is even more pronounced for CHCs that operate entity-owned pharmacies with physical inventories. Because these pharmacies must stock shelves at WAC, the delay between purchase and rebate directly affects operational liquidity. Retail pharmacies typically turn inventory every 30 days. Even assuming a faster-than-average 15-day inventory turnover, CHC pharmacies could face a 70- to 85-day gap between purchase and rebate under a 45-day submission window. Anecdotal feedback from CHC pharmacies suggests plans for a 14-day reporting cadence for entity-owned inventory. Even under this more frequent submission schedule, the expected purchase-to-rebate time frame remains 40 to 55 dayslong enough to create significant and ongoing cash-flow challenges. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on organizational data, Chiricahua estimates that purchasing the ten drugs under the proposed rebate model for 2026 would require $4,623,980 in up front capital. In contrast, the same medications currently cost $175,744.69 when purchased at the 340B ceiling price. This represents a 2,531 percent increase in up-front procurement costs. As previously noted, when applied across the broader drug portfolio, the proposed rebate program is projected to result in an aggregate up-front cost increase exceeding $6.1 million annually by 2028. Chiricahua Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To absorb the upfront cost of medications purchased at WAC, Chiricahua would be forced to scale back essential, non-revenue-generating services that are central to patient care and care-coordination. These include: Case Management, which provides direct support to high-risk Medicare patients by coordinating care, assisting with complex medical needs, and reducing avoidable hospitalizations. Patient Transportation Services, which ensure that vulnerable patientsmany of whom live in remote areasare able to reach medical appointments with Chiricahua providers and specialty care, often located more than two hours away. Community Health Workers, who are critical in identifying and assisting individuals in geographically isolated parts of the county, connecting them to primary care, preventive screenings, and social-service supports. These programs are fundamental to achieving quality, continuity, and access to care in underserved communities; reducing them to offset WAC-level drug costs would have direct and harmful consequences for patient outcomes. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Chiricahua Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Chiricahua Community Health Centers Inc. estimates that the associated rebate opportunity cost for 2026 would be approximately $470,286. As the number of drugs subject to the rebate model increases, this unrealized rebate value is projected to grow to just under $1 million annually by 2028. Chiricahua Community Health Centers Inc. estimates that purchasing drugs subject to the rebate model at wholesale acquisition cost rather than at 340B ceiling prices would increase up front monthly drug expenditures by approximately $379,333 in 2026, $487,689 in 2027, and $678,709 in 2028. Every dollar expended upfront at Wholesale Acquisition Cost (WAC) represents funds that remain effectively immobilized within the manufacturers rebate reconciliation process. During the period in which Chiricahua awaits rebate reimbursement, these dollars cannot be deployed to support operational needs, thereby constraining the organizations capacity to respond to urgent public health events, infrastructure failures, or other immediate system demands. Operating under a rebate-based model would require Chiricahua to rely heavily on its limited financial reserves to sustain medication purchasing at WAC. This reliance is not financially sustainable. These reserves currently support core service linesincluding Laboratory, Mental Health, Dental, Substance Use Disorder treatment, Nutrition Services, Case Management, Transportation, Outreach, Eligibility Assistance, and Community Health Workerseach of which plays a critical role in fulfilling the Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer organizations mission and federal program obligations. Diverting these resources to cover inflated drug acquisition costs undermines the stability of these essential services. Forcing Community Health Centers (CHCs) to absorb the financial burden of WAC-priced purchasing while awaiting delayed rebate payments introduces significant operational and clinical risk. In Chiricahuas service area, where patients rely exclusively on the health center for comprehensive primary and preventive care, any disruption to medication procurement due to depleted reserves or exhausted wholesaler credit limits directly jeopardizes the communitys safety net. If Chiricahua is pushed into a prolonged rebate-dependent cash-flow position, the downstream impacts are immediate and measurable: extended patient wait times, reduced service availability, constrained clinical capacity, and diminished ability to provide deeply discounted medications. These consequences affect not only the patients served by Chiricahua, but also mirror the risks faced by the more than 52 million patients nationwide who depend on CHCs for accessible and affordable care. In this context, cash-flow instability is not merely a financial concernit constitutes a threat to continuity of care and to the equitable access that CHCs are federally mandated to provide. a. Financial Impact of Rebate Denials and Delays Chiricahua Community Health Centers, Inc., urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC incurs a net loss on the transaction, having already paid the full wholesale acquisition cost to the wholesaler while dispensing the medication to the patient at a steeply discounted rate. Based on current utilization of the ten selected drugs, even a conservative rebate denial rate of 10 percent would result in an estimated $500,000 net annual loss in 2026. As additional drugs become subject to the rebate model, this loss is projected to grow to nearly $1 million annually by 2028. This level of financial loss is not absorbable for our CHC, as it represents a direct diversion of limited resources from our safety net budget. Any reduction in available financial resources will directly undermine our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.16 The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. 16 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.19 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also impose substantial administrative and technological burdens on CHCs. National analyses indicate that compliance would require new software systems, integration with existing platforms, and recurring staff training. NACHC estimates these expenses at $30,000 to $50,000 per year, with the potential for significantly higher costs depending on the specific technology selected. Chiricahuas own assessment projects $7,500 in implementation costs and $2,500 per month in maintenance, totaling $37,500 annually, solely to support the software required to track and process rebate-related data. To meet rebate-model requirements, CHCs would need to implement new tracking functionality either within their electronic medical record systems or through external standalone platforms. This would entail ongoing licensing fees, vendor support costs, and continual workflow redesigning both clinical and administrative operations. Importantly, these expenses are ongoing and additive, not one-time 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer investments, and would be incurred despite the fact that CADs are not currently billed to Medicare Parts B or D. Further, the Medicare Part B negotiated pricing provisionsrelevant to only a limited subset of medicationsdo not take effect until 2028, underscoring the lack of near-term applicability and raising questions about why CHCs would be required to absorb substantial administrative and technology costs for a billing context that does not yet exist. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B 27 Id. 28 42 U.S.C. 256b(a)(1) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 34 C.F.R. 447.518(a). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer- payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 56 42 U.S.C. 256b(a)(5)(B) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily- prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Chiricahua strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Chiricahua believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Chiricahua appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact please contact Director of Pharmacy David Merrell, PharmD at DMerrell@Chiricahua.org or Chief External Affairs Officer Dennis Walto, MA at DWalto@Chiricahua.org. Sincerely, _________________________________ CEO Jonathan Melk, MD FAAP Chiricahua Community Health Centers, Inc. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F
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See attached file(s) April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Crescent Community Health Center (Crescent), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. At Crescent, our mission is to provide high-quality, respectful, affordable, and comprehensive care to improve the health and well-being of our communities. Last year we had the privilege of serving a total of 10,993 patients across 43,490 visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Crescent report an average loss of $363,000 from entity-owned pharmacy operations and 68% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Crescent in particular, this means it will impact: The 33,300 340B transactions we process annually which bolster the services we provide for our 10,993 patients. Raise our current 340B administrative compliance costs tens of thousands of dollars a year. Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Crescent provided $1,935,213 in sliding fee discounts, to 2,420 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Crescent anticipates needing hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Crescent anticipates an increase of $96,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. As noted above, we anticipate needing to hire at least one additional FTE to manage the 340B rebate program. Additionally, we will need reallocate a sizeable amount of existing staff time to monitor and analyze the results which we estimate will cost us $20,000 annually in shifted staff time. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Crescent we estimate that our carrying costs will be $200,000 monthly this on top of our additional staffing costs will cost our health center over $2,400,000 a year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At Crescent we estimate that 20 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Crescent urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $36,000 annually. Total Cost: For our CHC, which serves 10,993 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis close to $2,500,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with one pharmacy to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims with an external hospital pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our ten-county region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert, and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty regarding CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 Consistent with their mission, CHCs provide flat or sliding-scale discounts on prescription drugs to improve affordability for low-income individuals.13 A CHC may adjust the cost of health care services, including medications, based on a patients income and family size. At Crescent, we use our 340B savings in a variety of ways, including offering sliding fee discounts on services and reducing the overall cost of medications. Crescent also utilizes 340B savings to support patient-centered services that enhance access to care and promote medication adherence. Specifically, these savings support our medication delivery program and the provision of medication organizers (pill boxes) for patients with complex medication regimens, helping to reduce missed doses. In addition, our clinical pharmacy team provides services on our medical floor, including patient education for diabetes and hypertension, medication monitoring, and ongoing follow-up to support improved clinical outcomes. CHCs are particularly concerned that requiring purchase at full WAC will create cash-flow constraints and may result in covered entities exceeding wholesaler credit limits, thereby interrupting the ability to order medications until payments are received. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock shelves with purchases at WAC. Retail pharmacies typically turn their inventory 1012 times per year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 7085 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of two-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 4055 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $627,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $28,000 to purchase these same drugs at the 340B ceiling price. This represents a 2100% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Crescent anticipates needing to reduce: Essential Clinical Services: In order to manage the initial expenses associated with medications, it may become necessary to reduce non-revenue-generating yet vital services, including patient financial assistance, medication packaging, delivery, clinical pharmacist support, and Medication Therapy Management (MTM) services for uninsured individuals or those without payer reimbursement. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2518 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Crescent asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: Crescent estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $200,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Crescent the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Crescent urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 3% denial rate would result in a net annual loss of $15,600. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Crescent strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Crescent believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Crescent appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me via email at cwolbers@crescentchc.org. Sincerely, Chad Wolbers CEO Crescent Community Health Center April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Crescent Community Health Center (Crescent), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. At Crescent, our mission is to provide high-quality, respectful, affordable, and comprehensive care to improve the health and well-being of our communities. Last year we had the privilege of serving a total of 10,993 patients across 43,490 visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Crescent report an average loss of $363,000 from entity-owned pharmacy operations and 68% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Crescent in particular, this means it will impact: The 33,300 340B transactions we process annually which bolster the services we provide for our 10,993 patients. Raise our current 340B administrative compliance costs tens of thousands of dollars a year. Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Crescent provided $1,935,213 in sliding fee discounts, to 2,420 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Crescent anticipates needing hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Crescent anticipates an increase of $96,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As noted above, we anticipate needing to hire at least one additional FTE to manage the 340B rebate program. Additionally, we will need reallocate a sizeable amount of existing staff time to monitor and analyze the results which we estimate will cost us $20,000 annually in shifted staff time. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Crescent we estimate that our carrying costs will be $200,000 monthly this on top of our additional staffing costs will cost our health center over $2,400,000 a year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At Crescent we estimate that 20 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Crescent urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $36,000 annually. Total Cost: For our CHC, which serves 10,993 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis close to $2,500,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with one pharmacy to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims with an external hospital pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our ten-county region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert,9 and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum 9 Cencora, Insight into U.S. pharmacy deserts (2024) 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty regarding CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 Consistent with their mission, CHCs provide flat or sliding-scale discounts on prescription drugs to improve affordability for low-income individuals.13 A CHC may adjust the cost of health care services, including medications, based on a patients income and family size. At Crescent, we use our 340B savings in a variety of ways, including offering sliding fee discounts on services and reducing the overall cost of medications. Crescent also utilizes 340B savings to support patient-centered services that enhance access to care and promote medication adherence. Specifically, these savings support our medication delivery program and the provision of medication organizers (pill boxes) for patients with complex medication regimens, helping to reduce missed doses. In addition, our clinical pharmacy team provides services on our medical floor, including patient education for diabetes 8 and hypertension, medication monitoring, and ongoing follow-up to support improved clinical outcomes. CHCs are particularly concerned that requiring purchase at full WAC will create cash- flow constraints and may result in covered entities exceeding wholesaler credit limits, thereby interrupting the ability to order medications until payments are received. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock shelves with purchases at WAC. Retail pharmacies typically turn their inventory 1012 times per year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 7085 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of two-week data submissions for entity- owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 4055 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 9 which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $627,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $28,000 to purchase these same drugs at the 340B ceiling price. This represents a 2100% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Crescent anticipates needing to reduce: Essential Clinical Services: In order to manage the initial expenses associated with medications, it may become necessary to reduce non-revenue-generating yet vital services, including patient financial assistance, medication packaging, delivery, clinical pharmacist support, and Medication Therapy Management (MTM) services for uninsured individuals or those without payer reimbursement. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2518 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Crescent asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: Crescent estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $200,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Crescent the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays 11 Crescent urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 3% denial rate would result in a net annual loss of $15,600. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 13 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Crescent strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Crescent believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Crescent appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me via email at cwolbers@crescentchc.org. Sincerely, Chad Wolbers CEO Crescent Community Health Center
HRSA-2026-0001-1491(no commenter metadata)2026-04-15T04:00Z84,827 chars
On behalf of Utah Partners for Health, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Utah Partners for Health, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Utah Partners for Health anticipates a loss of $60,000 to $650,000 from our entity-owned pharmacy. Projected Cost Increases: Utah Partners for Health expects that our operational costs will increase ~$100,720 annually just to manage the pilot program as follows: o ~$36,000 per year due to additional pharmacy position to manage payment reconciliation. o ~$41,720 contracting with a third-party administrator for claims processing. o ~$23,000 for increased administrative monitoring. Utah Partners for Health (UPFH) provides Comprehensive, Integrated Primary Care and Behavioral Health services for at-risk, low-income, underserved, and uninsured individuals and their families in the Greater Salt Lake community, providing accessible, high-quality, patient- centered care through medical, dental, vision, mental health, and pharmacy services that improve their well-being regardless of their ability to pay. Through our clinics, mobile health units, and partnerships with community organizations such as Intermountain Health, the University of Utah, and the Promise Neighborhoods initiative with United Way, we serve thousands of underserved and at-risk individuals and families each year. UPFH provides vital healthcare services to those who need them most, offering services on a sliding scale to ensure equitable access to all individuals in Salt Lake. Income and minority 2 status play a crucial role in accessing and affording health care. According to 2025 Kaiser Family Foundation polling, approximately 50% of American adults report that the cost of healthcare is a burden, with 25% expressing difficulty affording healthcare in the last year. Notably, Black and Hispanic adults, those with lower incomes, and the uninsured are particularly likely to report problems affording health care. Further, 36% of adults delayed necessary care in the last year, with a staggering 75% of uninsured individuals under the age of 65 not accessing critical care due to unaffordability. A 2023 National Association of Community Health Centers report highlights the importance of institutions like UPFH, noting that almost one-third of Americans are affected by a shortage of local community care providers. The report further states that an additional 15 million individuals would lack primary care if it werent for community health centers. UPFH aims to break down these barriers to care by delivering essential services to the areas most vulnerable populations. Sixty-seven percent of patients are uninsured, 60% live below 100% of the Federal Poverty Level (FPL), and 89% live below 200% of FPL, with 75% of patients being non-white or Hispanic. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Utah Partners for Health in particular, this means it will impact: We filled 17,475 prescriptions for 340B patients in 2025 serving 3,622 underserved patients in Utah and over 55% of our 340B patients being uninsured. Our current admin cost for our 340B program is $46,360 per year and with the proposed 340B rebate model it would increase to ~$36,000 per year due to increased pharmacy positions to payment reconciliation, ~$41,720 contracting with a third-party administrator for claims processing, and ~$23,000 for increased administrative monitoring. This would be an annual increase of ~$100,720 for our organization for 2026 alone. The administrative cost would increase every year as the number of medications on the 340B rebate model increases. While 83% of our 340B savings go back to direct prescriptions savings for our 340B patients we would be forced to decrease patients savings by increasing cost of mediation to pay for additional costs accrued throughout the year. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured1. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.2 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.4 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) 1 https://data.hrsa.gov/topics/healthcenters/uds/overview/state/UT/table?tableName=9D 2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Americans live with a mental illness.5 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.6 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,7 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Utah Partners for Health will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description 5 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 6 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 7 2025 UDA Data, HRSA (hrsa.gov) 5 To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already- strained operational capabilities. Sliding Fee Discount: Utah Partners for Health provided $3,786,277 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Utah Partners for Health anticipates needing 1 technician and 0.25 pharmacists in additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Utah Partners for Health anticipates an increase of $41,720 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Utah Partners for Health will be forced to onboard additional pharmacy employees in the amount of 1 FTE pharmacy technicians and 0.25 FTE pharmacists just to manage the 340B rebate model claims processing information and reconciliation. This cost estimates to be $35,000 per year for a pharmacy technician and $35,000 to $40,000 per year for an 0.25 FTE pharmacist/administrator. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. Utah Partners for health anticipates a 10 hour per week increase will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Utah Partners for Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. 6 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Utah Partners for health will spend $35,000 upfront simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 3,622 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,720 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure by hiring a third-party administrator to manage claims that have always been managed in house up to this point. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 8 Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Our sliding fee discounts are based off patients income, and we apply only a small fill fee to the cost of the medication. This allows our uninsured and underinsured patients to have access to life-changing medications. Some of the medications that are being considered for the rebate pilot program are pertinent to our patients health outcomes. By adding additional costs and waiting time for reimbursement our medical and pharmacy staff will be forced to utilize less effective medication alternatives for our patients. Increasing the cost for the patient and decreasing the outcomes of treatment. 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 12 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $961,370 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $117,254 to purchase these same drugs at the 340B ceiling price. This represents an 820% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Utah Partners for Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as MAT program and MTM services Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund 0.5 FTE MTM pharmacist and 1 FTE MAT medical assistance, directly increasing wait times for these curtail appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,723 uninsured patients from rationing their insulin or heart medication. 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Utah Partners for Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Utah Partners for Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately ~48,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Data: Utah Partners for Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $961,370. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our credit limit with wholesalers or take out a line of credit from a bank to cover these additional upfront costs. This is not a sustainable solution; the interest costs alone are estimated to be $76,909 annuallyfunds that are currently dedicated to managing patients with substance use disorder and medication therapy management for patients with diabetes. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Utah Partners for Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays Utah Partners for Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 8% denial rate would result in a net annual loss of $87,617. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 13 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety- net providers that the 340B program was designed to support. Conclusion Utah Partners for Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Utah Partners for Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Utah Partners for Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Heidi Schiller, Pharmacy Director at hschiller@upfh.org Sincerely, Veronica Hobby Utah Partners for Health 14 April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Utah Partners for Health, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Utah Partners for Health anticipates a loss of $60,000 to $650,000 from our entity-owned pharmacy. Projected Cost Increases: Utah Partners for Health expects that our operational costs will increase ~$100,720 annually just to manage the pilot program as follows: ~$36,000 per year due to additional pharmacy position to manage payment reconciliation. ~$41,720 contracting with a third-party administrator for claims processing. ~$23,000 for increased administrative monitoring. Utah Partners for Health (UPFH) provides Comprehensive, Integrated Primary Care and Behavioral Health services for at-risk, low-income, underserved, and uninsured individuals and their families in the Greater Salt Lake community, providing accessible, high-quality, patient-centered care through medical, dental, vision, mental health, and pharmacy services that improve their well-being regardless of their ability to pay. Through our clinics, mobile health units, and partnerships with community organizations such as Intermountain Health, the University of Utah, and the Promise Neighborhoods initiative with United Way, we serve thousands of underserved and at-risk individuals and families each year. UPFH provides vital healthcare services to those who need them most, offering services on a sliding scale to ensure equitable access to all individuals in Salt Lake. Income and minority status play a crucial role in accessing and affording health care. According to 2025 Kaiser Family Foundation polling, approximately 50% of American adults report that the cost of healthcare is a burden, with 25% expressing difficulty affording healthcare in the last year. Notably, Black and Hispanic adults, those with lower incomes, and the uninsured are particularly likely to report problems affording health care. Further, 36% of adults delayed necessary care in the last year, with a staggering 75% of uninsured individuals under the age of 65 not accessing critical care due to unaffordability. A 2023 National Association of Community Health Centers report highlights the importance of institutions like UPFH, noting that almost one-third of Americans are affected by a shortage of local community care providers. The report further states that an additional 15 million individuals would lack primary care if it werent for community health centers. UPFH aims to break down these barriers to care by delivering essential services to the areas most vulnerable populations. Sixty-seven percent of patients are uninsured, 60% live below 100% of the Federal Poverty Level (FPL), and 89% live below 200% of FPL, with 75% of patients being non-white or Hispanic. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Utah Partners for Health in particular, this means it will impact: We filled 17,475 prescriptions for 340B patients in 2025 serving 3,622 underserved patients in Utah and over 55% of our 340B patients being uninsured. Our current admin cost for our 340B program is $46,360 per year and with the proposed 340B rebate model it would increase to ~$36,000 per year due to increased pharmacy positions to payment reconciliation, ~$41,720 contracting with a third-party administrator for claims processing, and ~$23,000 for increased administrative monitoring. This would be an annual increase of ~$100,720 for our organization for 2026 alone. The administrative cost would increase every year as the number of medications on the 340B rebate model increases. While 83% of our 340B savings go back to direct prescriptions savings for our 340B patients we would be forced to decrease patients savings by increasing cost of mediation to pay for additional costs accrued throughout the year. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Utah Partners for Health will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already-strained operational capabilities. Sliding Fee Discount: Utah Partners for Health provided $3,786,277 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Utah Partners for Health anticipates needing 1 technician and 0.25 pharmacists in additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Utah Partners for Health anticipates an increase of $41,720 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Utah Partners for Health will be forced to onboard additional pharmacy employees in the amount of 1 FTE pharmacy technicians and 0.25 FTE pharmacists just to manage the 340B rebate model claims processing information and reconciliation. This cost estimates to be $35,000 per year for a pharmacy technician and $35,000 to $40,000 per year for an 0.25 FTE pharmacist/administrator. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. Utah Partners for health anticipates a 10 hour per week increase will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Utah Partners for Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Utah Partners for health will spend $35,000 upfront simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 3,622 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,720 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure by hiring a third-party administrator to manage claims that have always been managed in house up to this point. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Our sliding fee discounts are based off patients income, and we apply only a small fill fee to the cost of the medication. This allows our uninsured and underinsured patients to have access to life-changing medications. Some of the medications that are being considered for the rebate pilot program are pertinent to our patients health outcomes. By adding additional costs and waiting time for reimbursement our medical and pharmacy staff will be forced to utilize less effective medication alternatives for our patients. Increasing the cost for the patient and decreasing the outcomes of treatment. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $961,370 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $117,254 to purchase these same drugs at the 340B ceiling price. This represents an 820% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Utah Partners for Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as MAT program and MTM services Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund 0.5 FTE MTM pharmacist and 1 FTE MAT medical assistance, directly increasing wait times for these curtail appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,723 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Utah Partners for Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Utah Partners for Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately ~48,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Data: Utah Partners for Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $961,370. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our credit limit with wholesalers or take out a line of credit from a bank to cover these additional upfront costs. This is not a sustainable solution; the interest costs alone are estimated to be $76,909 annuallyfunds that are currently dedicated to managing patients with substance use disorder and medication therapy management for patients with diabetes. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Utah Partners for Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Utah Partners for Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 8% denial rate would result in a net annual loss of $87,617. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Utah Partners for Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Utah Partners for Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Utah Partners for Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Heidi Schiller, Pharmacy Director at hschiller@upfh.org Sincerely, Veronica Hobby Utah Partners for Health
HRSA-2026-0001-1492Blue Ridge Health2026-04-15T04:00Z41,884 chars
On behalf of Blue Ridge Community Health Services, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. PLEASE SEE ATTACHED LETTER WITH ADDITIONAL COMMENTS. Thank you BLUE RIDGE HEALTH April 14. 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Blue Ridge Community Health Services, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 2o. 2o26. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 34oB program is foundational to CHC's ability to serve the most vulnerable members of our community. However. the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. Blue Ridge Community Health Services expects to annually spend over 3o0% more in drug purchasing costs and to add $282,ooo in administrative personnel to manage the work associated with a rebate model. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as expanding services and providing telehealth. We rely on 34oB savings to support our operational budget, which contributes more than the Federal 33o grant funds supply for our health center. Blue Ridge Community Health Services, Inc. (BRCHS) has provided more than 6o years of health center services in Western North Carolina (NC), serving as the medical home for those most in need in Buncombe, Haywood. Henderson, Jackson, Macon, Polk, Rutherford, Swain, and Transylvania counties. BRCHS provides care from more than 7o service delivery locations, including freestanding comprehensive integrated primary care sites. general pediatric locations that also provide specialty pediatric services (neurology. endocrinology. and pulmonology). a shelter-based location, freestanding dental-only centers, behavioral health sites, mobile medical and dental unit/vans, and school-based health centers (SBHC). Directly provided services include general primary care. diagnostic lab, diagnostic radiology. screenings, emergency and after-hours coverage, voluntary family planning. immunizations. well child care. gynecology. prenatal care, intrapartum services, postpartum care, preventive dental. pharmaceutical services, case management, eligibility assistance, health education, outreach, transportation. translation, additional dental services, mental health services, substance use disorder services, optometry. nutrition. psychiatry. and specialty pediatric services - endocrinology. pulmonology, and neurology. Contractual and referral relationships are also in place to expand access to additional specialty services. In 2o24. BRCHS served 87.821 patients with 214.704 medical clinic visits, 10.071 medical virtual visits, 16.583 dental clinic visits, 33.761 mental health clinic visits, and 11,488 mental health virtual visits. As an existing health center with over six decades of experience caring for medically underserved populations, BRCHS is well-positioned to address the escalating needs in this rural region of the state. I. We Strongly Urge HRSA To Exempt CHCs from the 34oB Rebate Model Pilot Program. from the original purpose of the 34oB Drug Pricing Program. For over three decades, the 34oB program has enabled the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. Byrequiring CHCs to purchase medications at full price and wait for rebates. this model would cause significant Community Health Services in particular, this means it will impact: Over 82,000 unique patients Increase 34oB administrative costs beyond the current annual spend of $7 million our communities like dental, behavioral health, primary care, and school-based health We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly. a 34oB rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides. this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability. as a direct result of a 34oB rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays. and adverse outcomes. particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 34oB Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027. and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings. meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential. life-sustaining therapies. For instance, direct oral anticoagulants (DoACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis. pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal - and often less safe - alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack. and death.2 Similarly. the impact on patients requiring SGLT2 inhibitors. such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 3o-day withdrawal of these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027. the MDPNP will include some behavioral health drugs. Vraylar is an atypical 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation.https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health surveydrug-use-and-health/national-releases 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally. he 2027 list includes Austedo. a drug used to treat Tardive Dyskinesia. a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success. resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore. Executive Order #14273 conditions future Section 33o(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 34oB price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 2oo% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 34oB discount. the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 34oB Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 34oB Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines. payment reconciliations. and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 34oB Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 34oB Compliance. to create an Operational & Administrative Cost Calculator. The tool aggregates program savings. UDS financial data, staffing. external consulting costs. dispensing/capture activity. and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Blue Ridge Community Health Services, Inc provided $42 million in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Blue Ridge Community Health Services, Inc anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. This represents an additional $27o,ooo in compensation expense. External Vendor Costs: Given increased complexity. Blue Ridge Community Health Services, Inc anticipates an increase of $12,ooo to costs for external support vendors. These vendors may include 34oB consultants. legal counsel. program coordination, third-party administrators, electronic medical records. pharmacy software, and reconciliation services. 5 Hauser RA. et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841 6 2025 UDA Data, HRSA (hrsa.gov) 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM Workforce Impact needing to add two additional staff members to help manage the administrative burden at an estimated cost of over $270,000. T CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the o selected drugs, CHCs wil face an increased administrative burden in terms of monitoring rebate claims and payments. Blue Ridge Community Health Services estimates an additional 3o hours per week will be required to report 34oB rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Blue Ridge Community Health Services. Inc urges HRsA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 34oB rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staf: it requires significant changes to pharmacy software and Third- Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally. if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent. recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 82,ooo patients, the total projected increase in expensesincluding labor. IT. and carrying costsis estimated at $282,oo0 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant. in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs). in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Manual Changes and maintenance: A rebate model will require we manually create systems within our entity- owned pharmacies and software to manage the rebate impacts that flip our purchasing and pricing systems upside down. It is not reasonable to expect or assume that our pharmacy management system that is deployed to independent pharmacies across the country will develop workflows specifically for 34oB covered entities to manage the cost flip and resulting impacts. This translates to needing a local, manual change to our system that our own personnel will have to implement, monitor, and modify with quarterly pricing changes. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend 3o hours per week manually pulling "Purchase Files" and "Price Files' to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 82 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate- tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 82 different pharmacy locations to ensure rebates are paid correctly. 7 Internal NACHC assessment (99 responses). 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy. we fear our contract pa wil t poa nth than m tai hec . this would leave patients in Rutherford and Macon Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already. and the closings of pharmacies have only exacerbated this. with nearly 30 percent of pharmacies that had been open from 2o10 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $3o,0oo to $5o,0oo annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims. it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minmal Risk of Duplicate Discounts: HCs primarily bll under Medicare Part which is ot tatutorily included in the Medicare Drug Price Negotiation Program D. Maximum Fair Prices are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid. each state already has mechanisms in place to address duplicate discounts. remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 34oB Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price. also known as the Wholesale Acquisition Cost (WAC). This departure from over 3o years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 34oB Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 34oB price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 34oB price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with our mission. Blue Ridge Community Health Services offers sliding-scale discounts on prescription drugs to make them more affordable for low-income 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024,.00192?journalCode=hlthaff 10Internal NACHC survey data 11 HRSA FAQ 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM individuals. We pass through the 34oB cost of drugs plus a nominal dispensing fee to qualified patients. These calculations therein rely on the 34oB cost being known and available on the front side at the point of purchase from the wholesaler. CHCs are particularly worried that the need to purchase drugs at full wAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 1o days from completed data submissions. the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. scenario of 15 days to the average 3o days for inventory to turn, CHC pharmacies with physical inventory could be waiting 7o-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 1o-day timeframe for rebate payments: however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 34oB de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 34oB rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 1o days of both initial and corrected determinations. Lack of access to upfront 34oB discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than go days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below. you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 34oB Rebate Model. 34oB Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant. FQHC 34oB Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 34oB Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 34oB"4 and WAC pricing data for the first quarter of 2o26 (Q1 2o26). and the CMS list of MDPNP selected drugs by NDC.5 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 34oB prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30. 45. 6o. & go days. Represents potential WAC purchase to 34oB rebate payment cycles. Inventory models, frequency of data submission. and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 34oB Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay. purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual W/AC spend (described above). 1Such discounts aresubject to potential legal and contractual restrictions. https:/bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14 https://340bpricing.hrsa.gov/ 15 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM Year levels. financial resources. ceiling price. This represents a 3oo% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA oB Rebate Model Pilot. As previously discussed our CHC is navigating a difficult and operationalizing the rebate, Blue Ridge Community Health Services, Inc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as our mobile health unit that provides healthcare services to rural areas and our medication therapy management (MTM) program for complex diabetic patients. Operating Hours: We anticipate reducing our evening and weekend clinic hours by at least 8-16 hours per week, specifically impacting evening and weekend hours, which are the only times our patients who are day workers and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staffing. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time Community Health Worker or Care Manager directly increasing wait times for services and wrap around support. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 82,ooo uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full wAc will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example. some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 34oB program. Blue Ridge Community Health Services, Inc asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 34oB programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees. and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay. purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms. potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However. Blue Ridge Community Health Services, Inc estimates its 2o27 Annual Rebate Opportunity Cost to be approximately $3.7 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Blue Ridge Community Health Services, Inc estimates that purchasing the 10 selected 2o26 drugs at WAC instead of 34oB ceiling prices will increase our upfront monthly drug spend by $12 million. Looking beyond the 2026 drug list, the increased annual upfront cost for the 2027 and 2028 drugs are $22.9 million and $26.7 million respectively. 220 5TH AVENUE EAST | HENDERSONVILLE, NC 28792 | 828.692.4289 | BRCHS.COM Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region. being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo. the "trickle-down" effect is immediate: longer wait times. reduced service availability. and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Blue Ridge Community Health Services urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 34oB Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.6 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 1o selected drugs, even a conservative 15% denial rate would result in a net annual loss of $2 million. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfll the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 34oB price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally. the lack of real- time 34oB pricing presents challenges for compliance with 34oB actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process. the manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear. enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRsA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e.. 34oB with MDRP or MDPNP): Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework. including consequences for repeated late payments or improper denials by manufacturers: Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) program matter expertise to understand the complexities of pharmacy software, billing. and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 34oB statute to make medications affordable for patients. In alignment with Section 33o of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size. ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 34oB compliance protocols, including internal audits. training. and external oversight. CHCs participating in the 340B program are required to report 34oB-related information annually through the Uniform Data System (UDS). This includes data on 34oB-purchased drugs, associated costs and revenues. and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial. and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 34oB program: rather. they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: - Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 34oB discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems. and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 34oB program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 34oB claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 34oB rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 34oB program was designed to support. Conclusion Blue Ridge Community Health Services strongly urges HRSA to exempt CHCs from any 34oB Rebate Model Pilot Program. A 34oB rebate program represents a departure from the original intent of the 34oB programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model Community Health Services. Inc believes that a 34oB rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Blue Ridge Community Health Services, Inc appreciates the opportunity to respond to this Request for Information on the 3oB Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Gwen Ernesty. Chief Pharmacy Officer at gernesty@brchs.com. Sincerely. reelwell Tammx xGreenwell, MPH, CPHQ, FACMPE Blue Ridg ge Health Chief Executive Officer NC 28792 | 828.692.4289 | BRCHS.COM
HRSA-2026-0001-1493Sunset Community Health Center2026-04-15T04:00Z43,751 chars
See attached file(s) SUNSET HEALTH April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Sunset Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Sunset Community Health Center anticipates a loss of approximately $979,000 from entity-owned pharmacy operations and contract pharmacy arrangements estimating around a 21%-25% reduction in 340b savings due to the administrative hurdles of manual reconciliation, rebate denials, and loss of contractual wholesaler discounts for the first year of implementation of a proposed rebate model. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Sunset Community Health Center is a non-profit, Federally Qualified Health Center (FQHC) located in Yuma, Arizona. As a FQHC, Sunset Community Health Center is community-driven and provides high-quality, comprehensive primary and preventive care to all people, regardless of their ability to pay. Sunset Community Health Center continues to serve as a critical resource within the rural healthcare safety net. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Sunset Community Health Center in particular, this means it will impact: 28,229 patients and a total of 170,394 eligible 340b transactions Current operations and programs offered leading to cuts on non-revenue generating departments (community health workers, outreach programs, and community events like flu vaccine campaigns) The ability to expand services for patients within the community (prescription home delivery program, opening of a remote dispensing pharmacy in a rural area with no formal pharmacy services within approximately 20 miles, implementation of clinical pharmacy program to provide vital education to patients) We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 2 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. 5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23; 13:773999. doi: 10.3389/fneur.2022.773999, PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Sunset Community Health Center provided $1,029,494 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Sunset Community Health Center anticipates needing at least 0.5 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 4 External Vendor Costs: Given increased complexity, Sunset Community Health Center anticipates an increase of $5,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Sunset Community Health Center anticipates requiring at minimum 0.5 full-time equivalent to be able to appropriately meet the requirements of the rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Sunset Community Health Center estimates the addition of 0.5 full-time equivalent to be around $33,800 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Sunset Community Health Center estimates about 20 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Sunset Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Sunset Community Health Center anticipates a one-time upfront cost of $30,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). $ Ibid. 5 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 28,229 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $10,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The feasibility of pharmacy management systems to be able to accommodate a rebate model is challenging as they are less customizable. The systems receive pricing reports directly from the wholesaler. This would update all of our drug costs to WAC pricing, impacting our Medicaid billing process and Sliding Fee Scale Program, as that is based on acquisition cost. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manages pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 66 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Lateney: The rebate model creates a reconciliation gap. Our staff must monitor claims across sixty-six different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Yuma County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology I JAMA Network Open JAMA Network 10 https:/www.healthaffairs,org/doi/abs/10.1377/hlthaff.2024,001922journalCode=hIthaff 6 would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the . Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's 11 Internal NACHC survey data L medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. 12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Sunset Community Health Center makes drugs affordable for patients by offering a sliding fee scale program that is income based. This program alleviates the financial burden that many of our patient population faces. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully 12 HRSA FAQ manual/chapter9#footnote10 8 request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $6,541,349.33 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $480,630.70 to purchase these same drugs at the 340B ceiling price. This represents a 1260% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously 15https:/340bpricing.hrsa.gov/ 16https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Sunset Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our outreach programs that provide immunizations to the community and farm workers, our mobile medical units that bring care closer to rural areas within the community, and our medication therapy management program that assist patient's with their complex medication regimens. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund other essential personnel within the CHC like a full-time Community Health Worker or a Behavioral Health technician directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,822 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Sunset Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto ""stretch"" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Sunset Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be 10 approximately S1,282,941.02. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Sunset Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $505,059.89. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. In our region, where patients have no choice but to rely on Sunset Community Health Center, the risk of our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Sunset Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $638,630.72. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https:/www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 12 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Sunset Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted 13 medications required by law. Sunset Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Sunset Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jacey Sims, PharmD at jasims@mysunsethealth.org. Sincerely, TZ45 Jonathan Leonard, MPA Chief Executive Officer Sunset Community Health Center 14
HRSA-2026-0001-1494Melissa Baugher · Sierra Vista, AZ, United States2026-04-15T04:00Z131,070 chars
I am writing to express serious concern about the unintended consequences of the Inflation Reduction Act (IRA), specifically the implementation of the Medicare Manufacturer Price (MFP), on the 340B Drug Pricing Program and the patients and communities it was designed to protect. The 340B program enables safetynet providers to stretch scarce federal resources and reinvest savings into services for vulnerable populations. In rural and underserved areas, these savings directly support patient access to care, including medication affordability, expanded pharmacy services, care coordination, chronic disease management, and transportation assistance. For many rural hospitals, clinics, and community pharmacies, 340B is not supplementalit is foundational. The application of the MFP under the IRA has significantly reduced 340B pricing differentials. While drug price negotiation aims to make medications more affordable at the federal level, the interaction between MFP and 340B has created a compounding financial effect that severely diminishes 340B savings. These reductions are not theoretical; they translate immediately into fewer resources available to serve patients. Rural providers already operate on razor-thin margins. When 340B savings are eroded, providers are forced to make difficult decisions that directly affect patient access. This includes reduced pharmacy hours, elimination of medication assistance programs, fewer clinical pharmacy services, delayed expansion of care programs, and in some cases, the risk of service line closures. Patients in rural communities often have limited alternativeswhen access is reduced, care is delayed or lost entirely. Patients served by 340B entities are disproportionately older adults, individuals with fixed or low incomes, and those managing chronic or complex conditions. For these patients, reduced access to affordable medications can lead to medication nonadherence, worsening health outcomes, increased emergency department utilization, and higher overall healthcare costsoutcomes that directly conflict with the goals of the IRA. It is critical that future rulemaking and implementation guidance address the downstream effects of MFP on the 340B program. Policymakers should consider safeguards or adjustments that preserve the integrity of 340B and ensure that safetynet providers, particularly in rural and underserved areas, retain the ability to meet patient needs. Drug affordability and patient access should not be competing priorities. Both canand mustbe achieved. I urge consideration of corrective action to prevent further erosion of the 340B program and to protect access to care for the patients and communities who rely on it most. Thank you for the opportunity to comment and for your consideration of the real-world impacts these policies are having on rural healthcare delivery. Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chiricahua Community Health Centers, Inc. (Chiricahua), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Should the proposed rebate model be approved, Chiricahua projects a $500,000 loss from entity-owned pharmacy operations in the coming year, with projected losses increasing annually to approximately $1 million in lost 340B savings in 2028. Projected Cost Increases: The proposed rebate model would significantly impact pharmacy operational costs. Chiricahua expects to incur more than $6.1 million in additional annual costs, driven primarily by the substantially higher up-front cost of medication acquisition required under the proposed model, along with associated inventory financing and cash flow impacts. These projected impacts are especially concerning for CHCs serving rural, medically underserved regionswhere 340B savings are not optional but essential for maintaining access to care. Cochise County is designated as a Health Professional Shortage Area for medical, mental health, and dental services. Chiricahua is the countys only Federally Qualified Health Center, serving a region in southeastern Arizona roughly the size of Connecticut and Rhode Island combined and spanning one hundred miles of the U.S.Mexico border. Geographic isolation and widespread poverty make preventive and primary care delivery particularly complex. In 2025, Chiricahua cared for 33,472 individuals and dispensed 214,457 340B prescriptions to eligible patientsreaching more than one quarter of the countys residents. Twenty-two percent of those served lived below the federal poverty level. The health needs of Cochise County further illustrate the degree to which our communities rely on stable, predictable access to care. Rural residents experience higher rates of chronic illness and domestic violence, driven by social isolation, transportation barriers, and limited employment opportunities. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Insurance coverage remains a significant indicator of access: in Cochise County, 11.2% of adults and 9.3% of children are uninsured. Rates of diabetes, obesity, and drug overdose all exceed statewide averages. Fourteen percent of residents reported experiencing at least 14 days per month of poor physical health, and 15% reported the same for mental health. Taken together, these conditions underscore the severity of local need and the indispensable role of safety net programs. Overall, an estimated 16.3% of county residents live below the federal poverty thresholdrising to 19.6% among childrenhighlighting the critical importance of stable, accessible health services in this region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Chiricahua uses its 340B savings to subsidize a range of critical clinical and enabling services that are either under-reimbursed or not reimbursed at all, thereby expanding access and improving care for underserved patients. These savings support Care Management services for Medicare beneficiaries, Pediatric services that are otherwise funded through time-limited grants, and Care Management staffing levels that have already been reduced but are being maintained at the current level despite reimbursement pressures. Chiricahua also applies 340B savings to address Social Determinants of Health, sustain Dental serviceswithout the 340B savings adult dental patients would have to be significantly limited and support clinical pharmacy services that are not independently reimbursed. Additional uses include Diabetes Self-Management Training across all payers, and pharmacy home delivery and mail-order programs that improve medication, access and adherence without generating additional reimbursement. Finally, 340B savings help fund vital support services such as Domestic Violence staff, ensuring that Chiricahua can continue providing comprehensive, patient-centered care consistent with its mission to serve vulnerable populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Chiricahua Community Health Centers, Inc., provided $5,329,078.81 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Chiricahua Community Health Centers, Inc., anticipates needing 2.4 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Chiricahua Community Health Centers, Inc., anticipates an increase of $6,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Chiricahua, the estimated annual cost to hire additional staff is approximately $ 168,480 and projected upfront drug acquisition cost increases exceeding $6 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Chiricahua urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate significant upfront expenses to modify our pharmacy software, implement custom dashboard enhancements, and design new internal workflows. An estimated $73,478.32 will be required simply to establish baseline compliance before a single rebate is received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 69 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Cochise County, Arizona with no affordable 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Building on this framework, Chiricahua offers a sliding fee discount on medications, including insulin and injectable epinephrine, by providing eligible patients access to these medications at no more than Chiricahuas 340B acquisition cost plus a small administration fee. This discounted pricing is available to patients who meet defined financial need requirements. Eligibility is determined through Chiricahuas Sliding Fee Discount Program (SFDP), and any patient approved for medical or dental sliding fee status automatically receives the corresponding pharmacy discount level. To remain compliant with federal 340B requirements, patients must be established with Chiricahua and meet all elements of the 340B patient definition. Once qualified, patients pay the lowest applicable amount: either their insurance copay or the discounted sliding fee price. The SFDP then supports the patient when financial need is present, ensuring that cost never exceeds the 340B price plus the nominal fee. Chiricahua provides these reduced-cost medications through its inhouse pharmacies, using standardized and compliant procedures so that all eligible patients have consistent access to discounted insulin and injectable epinephrine. This structure ensures that Chiricahua can fulfill both its mission and federal obligations while maintaining affordability for patients. CHCs rely on wholesaler price files to determine drug acquisition costs and to calculate patient discounts in real time. However, pharmacy software systems are not designed to support manually added price files, particularly within a single inventory category. When new wholesaler price files are loaded, the system automatically overwrites any manually entered 340B pricing. Under a rebate model, the wholesaler file would reflect WAC rather than the 340B ceiling price, removing the operational ability to determine an accurate discounted patient price at the point of sale. This gap forces CHCs to estimate patient discounts without knowing whetheror whena rebate will be paid, exposing them to financial risk if rebates are delayed or denied and compromising their ability to meet federally required sliding-fee obligations. In addition to the pricing uncertainty, CHCs are deeply concerned about the cash-flow implications of having to purchase medications at full WAC. Paying WAC upfront increases the likelihood that CHCs will approach or exceed wholesaler credit limits, at which point the ability to order medications may be halted until outstanding balances are resolved. Although rebate payments are expected to arrive approximately 10 days after data submission, earlier versions of the rebate pilot allowed up to 45 days for covered entities to submit data. This means the total lag from dispensing the medication to receiving the rebate could reach 55 days. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The financial strain is even more pronounced for CHCs that operate entity-owned pharmacies with physical inventories. Because these pharmacies must stock shelves at WAC, the delay between purchase and rebate directly affects operational liquidity. Retail pharmacies typically turn inventory every 30 days. Even assuming a faster-than-average 15-day inventory turnover, CHC pharmacies could face a 70- to 85-day gap between purchase and rebate under a 45-day submission window. Anecdotal feedback from CHC pharmacies suggests plans for a 14-day reporting cadence for entity-owned inventory. Even under this more frequent submission schedule, the expected purchase-to-rebate time frame remains 40 to 55 dayslong enough to create significant and ongoing cash-flow challenges. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on organizational data, Chiricahua estimates that purchasing the ten drugs under the proposed rebate model for 2026 would require $4,623,980 in up front capital. In contrast, the same medications currently cost $175,744.69 when purchased at the 340B ceiling price. This represents a 2,531 percent increase in up-front procurement costs. As previously noted, when applied across the broader drug portfolio, the proposed rebate program is projected to result in an aggregate up-front cost increase exceeding $6.1 million annually by 2028. Chiricahua Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To absorb the upfront cost of medications purchased at WAC, Chiricahua would be forced to scale back essential, non-revenue-generating services that are central to patient care and care-coordination. These include: Case Management, which provides direct support to high-risk Medicare patients by coordinating care, assisting with complex medical needs, and reducing avoidable hospitalizations. Patient Transportation Services, which ensure that vulnerable patientsmany of whom live in remote areasare able to reach medical appointments with Chiricahua providers and specialty care, often located more than two hours away. Community Health Workers, who are critical in identifying and assisting individuals in geographically isolated parts of the county, connecting them to primary care, preventive screenings, and social-service supports. These programs are fundamental to achieving quality, continuity, and access to care in underserved communities; reducing them to offset WAC-level drug costs would have direct and harmful consequences for patient outcomes. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Chiricahua Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Chiricahua Community Health Centers Inc. estimates that the associated rebate opportunity cost for 2026 would be approximately $470,286. As the number of drugs subject to the rebate model increases, this unrealized rebate value is projected to grow to just under $1 million annually by 2028. Chiricahua Community Health Centers Inc. estimates that purchasing drugs subject to the rebate model at wholesale acquisition cost rather than at 340B ceiling prices would increase up front monthly drug expenditures by approximately $379,333 in 2026, $487,689 in 2027, and $678,709 in 2028. Every dollar expended upfront at Wholesale Acquisition Cost (WAC) represents funds that remain effectively immobilized within the manufacturers rebate reconciliation process. During the period in which Chiricahua awaits rebate reimbursement, these dollars cannot be deployed to support operational needs, thereby constraining the organizations capacity to respond to urgent public health events, infrastructure failures, or other immediate system demands. Operating under a rebate-based model would require Chiricahua to rely heavily on its limited financial reserves to sustain medication purchasing at WAC. This reliance is not financially sustainable. These reserves currently support core service linesincluding Laboratory, Mental Health, Dental, Substance Use Disorder treatment, Nutrition Services, Case Management, Transportation, Outreach, Eligibility Assistance, and Community Health Workerseach of which plays a critical role in fulfilling the Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer organizations mission and federal program obligations. Diverting these resources to cover inflated drug acquisition costs undermines the stability of these essential services. Forcing Community Health Centers (CHCs) to absorb the financial burden of WAC-priced purchasing while awaiting delayed rebate payments introduces significant operational and clinical risk. In Chiricahuas service area, where patients rely exclusively on the health center for comprehensive primary and preventive care, any disruption to medication procurement due to depleted reserves or exhausted wholesaler credit limits directly jeopardizes the communitys safety net. If Chiricahua is pushed into a prolonged rebate-dependent cash-flow position, the downstream impacts are immediate and measurable: extended patient wait times, reduced service availability, constrained clinical capacity, and diminished ability to provide deeply discounted medications. These consequences affect not only the patients served by Chiricahua, but also mirror the risks faced by the more than 52 million patients nationwide who depend on CHCs for accessible and affordable care. In this context, cash-flow instability is not merely a financial concernit constitutes a threat to continuity of care and to the equitable access that CHCs are federally mandated to provide. a. Financial Impact of Rebate Denials and Delays Chiricahua Community Health Centers, Inc., urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC incurs a net loss on the transaction, having already paid the full wholesale acquisition cost to the wholesaler while dispensing the medication to the patient at a steeply discounted rate. Based on current utilization of the ten selected drugs, even a conservative rebate denial rate of 10 percent would result in an estimated $500,000 net annual loss in 2026. As additional drugs become subject to the rebate model, this loss is projected to grow to nearly $1 million annually by 2028. This level of financial loss is not absorbable for our CHC, as it represents a direct diversion of limited resources from our safety net budget. Any reduction in available financial resources will directly undermine our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.16 The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. 16 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.19 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also impose substantial administrative and technological burdens on CHCs. National analyses indicate that compliance would require new software systems, integration with existing platforms, and recurring staff training. NACHC estimates these expenses at $30,000 to $50,000 per year, with the potential for significantly higher costs depending on the specific technology selected. Chiricahuas own assessment projects $7,500 in implementation costs and $2,500 per month in maintenance, totaling $37,500 annually, solely to support the software required to track and process rebate-related data. To meet rebate-model requirements, CHCs would need to implement new tracking functionality either within their electronic medical record systems or through external standalone platforms. This would entail ongoing licensing fees, vendor support costs, and continual workflow redesigning both clinical and administrative operations. Importantly, these expenses are ongoing and additive, not one-time 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer investments, and would be incurred despite the fact that CADs are not currently billed to Medicare Parts B or D. Further, the Medicare Part B negotiated pricing provisionsrelevant to only a limited subset of medicationsdo not take effect until 2028, underscoring the lack of near-term applicability and raising questions about why CHCs would be required to absorb substantial administrative and technology costs for a billing context that does not yet exist. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B 27 Id. 28 42 U.S.C. 256b(a)(1) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 34 C.F.R. 447.518(a). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer- payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 56 42 U.S.C. 256b(a)(5)(B) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily- prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Chiricahua strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Chiricahua believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Chiricahua appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact please contact Director of Pharmacy David Merrell, PharmD at DMerrell@Chiricahua.org or Chief External Affairs Officer Dennis Walto, MA at DWalto@Chiricahua.org. Sincerely, _________________________________ CEO Jonathan Melk, MD FAAP Chiricahua Community Health Centers, Inc. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F
HRSA-2026-0001-1495Self Regional Healthcare2026-04-15T04:00Z21,675 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Self Regional Healthcare in Greenwood, SC, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Self Regional Healthcare in Greenwood, SC that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Self Regional Healthcare in Greenwood, SC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Self Regional Healthcare in Greenwood, SC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Self 2 Regional Healthcare in Greenwood, SC can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Self Regional Healthcare in Greenwood, SC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Self Regional Healthcare in Greenwood, SC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The organization at a minimum would have to hire 5 full-time employees to accurately track and submit rebate requests. If full-time employees were not hired, then a third-party administrator would need to be contracted to track rebates but a person at the organization would need to take 20 hours per week making sure that we are receiving the rebates and everything is correct with the third-party administrator. Total increase in administrative costs with either option would be at a minimum of $500,000 per year. The $500,000 minimum increase is based on the acquisition of 5 FTEs that would include salary and benefits. As an organization we have already looked at a third- party administrator that could help with rebate identification and their services were $120,000 for a year. Additional costs would be time for an employee to verify rebates identified by the third-party administrator. The key cost drivers would be increased staffing, diverting current staff, IT systems, third-party vendors, compliance monitoring, labor hours, and the process for challenging denials. Although the current TPAs the organization uses will not institute a charge for the rebate model, it does take labor hours to gather the information needed from the TPAs to submit the required details for the rebate model. As stated previously, the organization explored a service that could help monitor rebates, but the initial cost would be $120,000 along with a monthly fee. The biggest function of these incremental costs would cover reconciliation, claims processing, data submission, challenging denials, and audit support. Reconciliation 3 is the biggest concern with the increased administration cost. There are thousands of prescriptions that are run daily and a person or TPA would need to verify the rebate had been performed. The organization has already had to confer with the legal team to review the terms and conditions associated with a platform like Beacon which takes away from time they could be performing other tasks. The new 5 FTEs mentioned previously would need to be trained in 340B and the rebate model. The associated increase in costs will likely hurt medication access for patients in the community since the increase in costs will come from the 340B budget that is used to offset patients copays. These costs will cause a recurring issue with providing the best patient care and cause an increase in readmissions. These increased administrative costs would take approximately 8% of the organizations current marginal savings on the 10 IRA medications subject to the rebate model. The approximation does not consider the decreased reimbursements the organization is already seeing for the 10 IRA medications. Further administration costs will likely affect patient care as the organization will not be able to take the financial burden to offset patients medication costs. Staffing Impacts Under a Potential 340B Rebate Program. Self Regional Healthcare in Greenwood, SC does not currently have the staff needed to comply with a Rebate Program. The rebate model would require 5 FTEs to perform administrative functions. This would cost a minimum of $500,000 for salary and benefits. This would also take hours away from current staff to perform tasks. Staff that are currently in clinical roles but have 340B experience will need to reallocate work hours associated with their clinical work to work related to the 340B rebate program. The FTEs responsibilities would be to identify 340B prescription eligibility, submit rebate requests, reconcile rebate requests, investigate short-paid or denied rebates, and track outstanding receivables. This is not a batch task that can be done in one sitting. These are processes that need to be monitored continuously. It takes our organization approximately 60 days from onboarding to being able to work independently. 4 The estimate of 2 hours per week in additional work is a gross underestimate of what will need to be implemented to perform the requirements needed of the rebate program. For an example, if a pharmacy fills 2,000 prescriptions per day, and 1% is denied, it is safe to assume a minimum of 5 minutes of time to reconcile the prescription will be needed, not including submitting information for a rebate denial. This is already 2 hours a day not 2 hours a week. Furthermore, this is just an example for a denial, it does not consider time needed to track rebate reconciliation. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Self Regional Healthcare in Greenwood, SC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Unlike contract pharmacies that use TPAs, in house pharmacies must directly integrate our EHR and pharmacy management system (PMS) with a complex new rebate infrastructure. The entity would have to integrate rebate data into our PMS to accurately determine our financial reports for our in-house pharmacy. We anticipate an estimated $120,000 one-time integration cost to pay a software vendor for custom API builds and price file reconciliation tools. The entitys IT department is having to create files to send to our TPA so that we can give the required data for medical claims. Furthermore, the data that the EHR is submitting to the TPA is not compatible with what ESP wants and likely what Beacon will accept. This will require staff to manually fix the data to have it accepted into the clearinghouse. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our entity currently utilizes our TPAs reporting functions to collect data needed for audits. We retain this information in a network folder that can be viewed by people on the team. Validation of the audits occur monthly and requires the sample provided by the TPA and manual validation of the dispense by the entitys EHR. 5 Current data collection activities would change due to the requirements of the medical dispenses needed. This would be an ongoing activity. As mentioned previously, a representative from the entity would have to manually adjust data pulled from the TPA to have the clearinghouse accept it. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Self Regional Healthcare in Greenwood, SC to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on the entity. Self Regional Healthcare appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the entity can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. Self Regional Healthcare is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. The entity must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the entity takes a net loss on the transaction. Self Regional Healthcare respectfully requests that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Self Regional Healthcares upfront annual drug spend would increase dramatically by approximately $800,000 per month. This would be a 100x increase in upfront capital required for procurement. There could also be compounding cash flow issues 6 if there are denials as mentioned above. Ten days is not a short enough time frame to resolve these possible cash flow issues. Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. For example, having Self Regional Healthcare pay for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Self Regional Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Drug companies state that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This is not true, especially in the case of a denial which requires no time frame for the manufacturer to pay the rebate. Also, Self Regional Healthcare would need to pay the wholesaler more often as to not exceed the credit limit with the wholesaler, putting us at great financial risk as we are not guaranteed the rebate due to it being at the discretion of the manufacturer. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Self Regional Healthcare in Greenwood, SC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as our medication management clinic that helps patients manage complex disease states such as diabetes and heart failure. 7 Self Regional Healthcare anticipates reducing clinic and pharmacy hours specifically impacting the working class. The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund appropriate clinic and pharmacy staff directly increasing wait times for patients and prescriptions. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured or underinsured patients from rationing their diabetic or heart medications such as insulin. This could cause needless admissions to the hospital that could cost government-sponsored Medicare plans more money in the long run. Self Regional Healthcare would possibly not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price. A rebate model would directly impact patient care in our rural community by delaying and destabilizing the funding that Self Regional Healthcare relies on to support medication access and clinical services. For patients, this could result in delays in starting therapy, fewer resources to help navigate insurance and affordability barriers, and increased out-of-pocket costs. Additionally, if hospitals like ours are forced to reduce services or potentially close due to the financial burden, the impact on our community would be devastating. This would further widen existing gaps in care, where patients already face limited healthcare resources and significant barriers to timely, affordable treatment. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Self Regional Healthcare in Greenwood, SC reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount 8 model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. The terms and conditions allow second sight solution and therefore manufacturers to use submitted claims data for purposes beyond just identifying duplicate discounts, creating potential, long-term exposure of sensitive patient and financial data. Beacons terms permit updates to the terms of use without requiring prior notification to covered entities and it constitutes automatic acceptance of these new terms. Covered entities are forced to accept the terms to access 340B pricing to which they are entitled, creating an unfair balance of power. Risk and liability are shifted to the covered entity rather than Beacon or the manufacturers in the terms and conditions. No compensation for missed revenue and minimal liability for direct damages if there is a Beacon system failure or data security issue. Beacon can also shift data requirements at any time which could cause an issue for the entity to get rebates if they ask for a new data requirement that is not easily attainable. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Self Regional Healthcare in Greenwood, SC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. 9 Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP de-duplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Self Regional Healthcare in Greenwood, SC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Self Regional Healthcare in Greenwood, SC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Name Title Repeat Hospital Name and Location
HRSA-2026-0001-1496Providence2026-04-15T04:00Z13,412 chars
See attachment. Providence 1801 Lind Avenue SW Renton, WA 98057 providence.org April 15, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Providence, thank you for the opportunity to provide feedback in response to the Request for Information that the Health Resources and Services Administration (HRSA) published in the Federal Register on February 17, 2026 related to a potential 340B Rebate Model Pilot Program. Providence is a non-profit health system in the United States with a seven-state footprint that spans Alaska, Washington, Oregon, California, Montana, New Mexico, and Texas. Our diverse family of organizations employs 117,000 people who serve in 51 hospitals, more than 1,000 clinics, a health plan with more than 600,000 beneficiaries, senior services, home health, hospice, PACE, housing, and many other health and educational services. Driven by a belief that health is a human right, we are committed to understanding and responding to the needs of the many communities we serve, and to providing high-quality, unbiased health care for all. We have a special focus on serving those who are vulnerable or marginalized, including people who depend on Medicaid coverage for access to care. Each year we work to provide care and services where they are needed most, including investments in community benefit that totaled $1.9 billion in 2024. Together, we are transforming care with a holistic and deeply compassionate approach to medicine. As a health system, Providence processes millions of 340B transactions annually among forty-two 340B covered entities that support patients who need high-priced medications at our safety-net hospitals and clinics that are the backbones of health care in their community. We want to ensure the longevity of the 340B program for these patients and look forward to working alongside HRSA to improve the program. As our feedback points out, the transition to a rebate model could jeopardize our financial stability and inhibit patient access in high-Medicaid communities. Rebate Model is Unnecessary & Untenable The 340B program was created to give safety-net providers the tools they need to stretch every scarce dollar they receive to care for low-income communities. Since its inception, the program has been structured to offer an upfront discount on covered outpatient drugs and participating hospitals like Providence built a foundation of patient services and community outreach activities around those savings. We fear that a shift from a discount to a rebate would shake that foundation in an irreparable way and take resources straight out of these communities. HRSA Has Not Established the Need for a Rebate Model In the RFI, HRSA describes its concern that the current 340B payment process may be permitting entities to collect duplicate discounts on their 340B covered drugs from the drug manufacturer and their state Medicaid program. HRSA believes a rebate model would help prevent that duplication, but Providence urges HRSA to investigate further the true magnitude of the suspected duplicate discounts. The publicly reported 340B covered entity audit results include findings of inaccurate or incomplete information in the HRSA Medicaid Exclusion File (MEF) that could lead to duplicate discounts, but crucially, the appearance of this finding does not mean that a second discount was actually obtained. Furthermore, this finding could indicate either that one duplicate discount was inadvertently obtained or that the entity obtained hundreds of unique duplicate discounts from the state Medicaid program. Through the corrective action process, HRSA directs covered entities to work with states and manufacturers to determine whether a duplicate discount occurred as a result of the incorrect MEF listing. The covered entity is required to repay manufacturers in an amount equal to the reduction in the price of the drug, which ensures any duplicate discounts, whether accidental or fraudulent, are remedied. These audits show that there are issues with the MEFs accuracy and completeness, but those issues are not being addressed by the transition to a rebate model. HRSA should explore the option of using a third-party clearinghouse, rather than a rebate mechanism, to advance the goal of eliminating duplicate discounts and enhancing program integrity. In any future rulemaking, we hope that HRSA can explain why a rebate model is a stronger mechanism than a clearinghouse to protect against duplicate discounts. Many 340B Entities Cannot Pay Upfront The 340B program was established as a tool for safety-net hospitals to stretch every dollar they receive from government payers to care for Medicaid patients, and HRSA should not expect those providers to have the financial freedom to pay upfront for covered drugs and wait for a rebate. Hospitals have reasonably come to rely on the 340B discount price and set their spending plans accordingly to cover fixed costs for internal operations, staffing, and third-party contractual support. A fundamental switch now would disrupt these settled reliance interests and impose massive new costs on safety-net hospitals. Practically speaking, it will be important for a rebate payment to come in the form of an electronic funds transfer (EFT) rather than a physical check issued to the covered entity. This not only shortens the time when our hospital would be loaning the rebate amount to the manufacturer, it helps guarantee that the funds will be directed to the specific entity that gave the outlay to purchase the covered drugs. In our large organization, like many others, it is very impractical to receive and track paper checks issued to the 340B entities in the Providence health system and ensure the funds are deposited in the account that needs the reimbursement to be made whole. EFT processing should be easier for manufacturers and providers alike, to protect against wide financial swings in a rebate model. Rebates Disadvantage Non-Profit Entities HRSA asked whether rebate payment would affect covered entities cash flow, for instance with a 10 calendar-day timeline after submission of a complete rebate request to the manufacturer. Providence must emphasize how this rebate model will disadvantage non-profit entities in favor of for-profit drug manufacturers. Non-profit organizations will be loaning money to large, for-profit manufacturers in the hopes that the rebate will be secured within 10 calendar days. To balance this power dynamic, we urge HRSA to impose a 10 percent interest penalty on any rebate payments that fall outside the required payment timeline. At best, this model gives manufacturers interest-free loans and at worst, it allows manufacturers to seek investment returns on the amounts they receive from covered entities prior to issuing the rebates that are due. If all documentation requirements are met for the rebate request and manufacturers do not deliver payment within 10 days, they should be charged a 10 percent interest fee to compensate for the financial strain on hospitals. Projected Administrative and Staff Costs Providence has structured our staffing and 340B program administration with an upfront discount model in mind, and the shift to a rebate model will demand new resources and considerable cost changes. Unfortunately, HRSAs cost estimates for a rebate transition are significantly understated. We appreciate the opportunity to weigh in with our projected costs. The information below combines salary estimates from the American Hospital Association (AHA) with Providences specific expectations of our new FTE needs under a 340B rebate model. Hourly Wage Rate** Hours /Week Number of Weeks Number of 340B Hospitals Annualized Cost Annualized Burden Hours Note Pharmacist (3 FTE) $138.72 5 52 42 $1,514,822 10,920 Lawyer $214.14 2 52 42 $935,364 4,368 Accounting/ Finance $78.22 5 52 42 $854,162 10,920 IT $154.24 2 52 42 $673,720 4,368 TOTAL $3,978,068 30,576 **Based on HRSA OPAIS Data for 340B hospitals participating as of 1/1/2026 This chart makes it evident that a rebate model will cost entities well above the estimated 5 hours per week that HRSA estimates for a 25-drug model. We expect an annual cost of over $3 million to appropriately staff our program for rebate processing. These administrative changes will not be linear, especially as the program expands from 10 to 25 drugs or beyond. Data Integrity & Rebate Denials If HRSA moves forward with the transition to a rebate model for 340B drug purchases, there are several critical protections that must be in place to balance the interests of the 340B entities and the manufacturers to protect access to covered drugs. HRSA requested feedback on the potential rebate processing tool that drug manufacturers would use in a future rebate model, which could be the Beacon IT system that was previously considered by the group of manufacturers that were planning to participate in the HRSA rebate pilot program. In our experience with the Beacon platform as we were preparing to participate in the Medicare Maximum Fair Price (MFP) program, we found the software was untested and not user friendly. For example, we could not export spreadsheets from the Beacon system. Even more critically, Beacon was unable to provide Providence with cyber security assessments so that our team could understand the level of privacy protections for our patient information and financial data. At all levels of health care administration, we must strive to eliminate unnecessary paperwork and bureaucratic delays, and the potential rebate model should be no different. Certainly, covered entities will be required to submit distinct data elements that manufacturers need to process the rebate request, and manufacturers must be required to respond in a timely manner either with payment or requests for missing information. It will be critical for HRSA to set limitations on the types of additional documentation requests and denial reasons that the manufacturers can employ in this model or else entities will be chasing paperwork instead of reconciling their financial outlays and moving on to focus on patient care. Manufacturers must clearly explain what additional documentation they need to inform their decision on the rebate request. Similar to the failure to pay covered entities within 10 calendar days, the manufacturers should be charged an interest penalty for any rebate requests that go unanswered within 5 calendar days and any additional documentation requests or denials that are not sufficiently specific for the entities to respond. HRSA must keep in mind the imbalance of power involved when large for-profit drug manufacturers are processing financial requests from small, rural, safety-net, and/or non-profit covered entities. Patient Perspective Given the lack of evidence on whether upfront discounts are leading to duplicate discounts, Providence believes the potential benefits of transitioning to a rebate model will outweigh the potential costs for patient access. As covered entities rearrange their financial resources to support the rebate amounts, many will need to make difficult choices to downsize patient services. We believe 24/7 pharmacies and community benefit programs will be at particular risk since the costs avoided by the current 340B discount pricing usually support those efforts. At this time of health care workforce crises and rural health care strains, the diluted hospital resources may lead to fewer outpatient drugs covered by hospital pharmacies or even new pharmacy deserts. The discounts that hospitals access by participating in the 340B program have served as an incentive for many facilities to increase the number of Medicaid beneficiaries they serve. The high cost of establishing and staffing an outpatient clinic in a low-income neighborhood can be balanced against the future cost avoidance the hospital could rely on when purchasing 340B covered drugs for that location. Under a rebate model, health system leadership would use an entirely different calculus when deciding whether or when the time is right to build out new outpatient locations. Financial returns or at least reserves would need to be available on day one to fund the acquisition cost of that new locations outpatient drugs while awaiting a rebate. We anticipate these new revenue flow considerations will prevent health systems from developing new service locations or expanding existing ones and will certainly remove the 340B incentives to serve high-Medicaid communities. Conclusion Thank you for the opportunity to provide feedback on HRSAs future plans to consider a 340B rebate model. We hope you find our input informative. For more information about the views we have expressed, please contact me at alison.santore@providence.org. Sincerely, Ali Santore Chief External Affairs Officer Providence
HRSA-2026-0001-1497Marion General Hospital2026-04-15T04:00Z35,127 chars
See attached letter MARION HEALTH April 15, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for Information ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by Marion General Hospital, Inc. DSH150011 ("Marion General Hospital"), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Marion General Hospital and other Covered Entities. As a 340B-participating Disproportionate Share Hospital, Marion General Hospital is a core component of the healthcare safety net in Marion Indiana and the greater Grant County Indiana area. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Marion General Hospital participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Marion General Hospital's 340B Program participation enables us to commit an additional 2.9 million dollars per year to the Marion Indiana community safety net population we serve. Marion General Hospital also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Marion General Hospital wishes to 441 N. Wabash Avenue | Marion, IN 46952-2690 | Telephone (765) 660-6000 | marionhealth.com 017074 (11/2021) April 15, 2026 Page 2 make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDaMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of "consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,"1 Marion General Hospital submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH MARION GENERAL HOSPITAL'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug. A rebate model would shift this compliance burden and its associated costs from the manufacturer-where Congress placed it--to Marion General Hospital and other Covered Entities. 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 15, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval, 5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Marion General Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2.HOW COULD HRSA OR MARION GENERAL HOSPITAL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Marion General Hospital. Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased in the past 6 years, directly limiting the extent to which we can support our community. We have made the decision recently to limit our contract pharmacies to one specialty pharmacy due to oversight and third- party administrator costs being more than the returns we were realizing from many of our contract arrangements. This brought our contract pharmacies from twenty contract pharmacies down to one contract pharmacy. This greatly limits the number of patients we can serve, and this is direct result of manufacturer restrictions since 2020. 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO MARION GENERAL HOSPITAL TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs antd o $2. billion n ross rt coss in 04 M Ft Sheet, Medicare Du ie Neotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (2001). April 15, 2026 Page 4 If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Marion General Hospital would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entity's contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5.WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Marion General Hospital has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entity's interest in knowing what the law is 8 42 U.S.C. 256b(a)(1). April 15, 2026 Page 5 and how it would be enforced? These are serious matters, and they warrant seriousand publicly documented-consideration. 6. ME B R V TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE MARION GENERAL HOSPITAL'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF MARION GENERAL HOSPITAL? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE MARION GENERAL HOSPITAL FOR THE VALUE OF ITS DATA? One of Marion General Hospital's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.10 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that 9See 45 C.F.R. 160.103. ava tyoical for Fl:RiA, as HsSA shdurd be avgre. April 15, 2026 Page 6 value, and are they not required to compensate Marion General Hospital for that value? Isn't this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? Marion General Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Marion General Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Marion General Hospital's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Marion General Hospital's patient population, we serve many other patients, including patients with no coverage at all. Requiring Marion General Hospital to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 15, 2026 Page 7 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO MARION GENERAL HOSPITAL? IF NOT, WHY NOT? As noted above, Marion General Hospital firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Marion General Hospital urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON MARION GENERAL HOSPITAL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered EntitiesMarion General Hospitalto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. April 15, 2026 Page 8 The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information Marion General Hospital has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in the entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers' noncompliance rate so high, Marion General Hospital is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 11 See 45 C.F.R. 164.501. 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 15, 2026 Page 9 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Marion General Hospital hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Marion General Hospital encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experience-including use of batch flat-file submissions- and contribute to the development of government-backed systems that advance legitimate program goals. ResPoNSES TO HRSA's ReQuEST fOR InfoRMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Marion General Hospital maintains auditable purchasing records, conducts routine internal reconciliations, conducts annual internal audits by a third party, works with consultant to ensure compliance and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 15, 2026 Page 10 operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Marion General Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Marion General Hospital's current staffing model includes one full-time 340B Specialist and a Pharmacy Systems Manager who devotes approximately 40% of their time to 340B monitoring and compliance. If the Rebate Model Pilot Program is implemented and subsequently expanded, we anticipate the need to add an additional full-time 340B Specialist and increase the oversight time required from our Pharmacy Systems Manager. This added staffing and oversight burden would ultimately erode 340B savings, as Marion General Hospital would incur increased operational costs to manage and sustain a rebate-based model. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In preparation for the Rebate Model go-live on January 1, 2026, Marion General Hospital engaged with our current third-party administrator to evaluate their solution for submitting rebate-related data. Through this engagement, we received pricing for the required software and determined that the cost would exceed the anticipated savings generated from the drug mix included in the Rebate Model Pilot Program as of January 1, 2026. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. April 15, 2026 Page 11 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Marion General Hospital purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Marion General Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. Marion General Hospital already faces significant challenges in controlling the rising costs of high-cost specialty medications. Implementing a rebate model would further exacerbate these financial pressures, particularly for a safety-net provider operating on very thin operating margins. 2REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Marion General Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Marion General Hospital would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Marion General Hospital's operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to April 15, 2026 Page 12 finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Marion General Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it-are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, fatyit Tony Roberts Chief Financial Officer Marion General Hospital, Inc. April 15, 2026 Page 13 Appendix: Summary of HrsA's Audits of Drug Manufacturers HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 2020 2021 2022 Clean Audits 2023 Audits with Findings 2024 2025 2026 FINDING: FAILED TO OFFER 34OB PRICE 2018 2019 2020 2021 Manufacturer Did Not Fail to Offer 340B Price 2022 Manufacturer Failed to Offer 340B 2023 Price 2024 2025 2026 April 15, 2026 Page 14 FINDING: OVERCHARGED COVERED ENTITIES 2018 2019 2020 2021 Manufacturer Did Not Overcharge 2022 Covered Entities Manufacturer Overcharged Covered 2023 Entities 2024 2025 2026 FINDING: FAILED TO SUBMIT PRICING DATA 2018 2019 2020 2021 Manufacturer Submitted Pricing Data 2022 Manuafcturer Failed to Submit 2023 Pricing Data 2024 2025 2026 April 15, 2026 Page 15 FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 Manufacturer Determined Ceiling Price for New Drugs 2022 Manufacturer Failed to Determine 2023 340B Ceiling Price for New Drugs 2024 2025 2026
HRSA-2026-0001-1498CommonSpirit Health2026-04-15T04:00Z6,487 chars
Please see the attached comment letter from St. Anthony North Hospital in Westminster, CO St. Anthony North Hospital 14300 Orchard Parkway Westminster, CO 80023 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Anthony North Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Anthony North Hospital has served the north Denver metro area for decades and ensures that the northern suburbs of Denver have world-class, quality care, close to home. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Anthony North Hospital that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Anthony North Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Dr. Constance Schmidt Hospital President St. Anthony North Hospital, Westminster, CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
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Please see the attached feedback from St. Anthony Summit Hospital in Frisco, CO St. Anthony Summit Hospital 340 Peak One Drive Frisco, CO 80424 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Anthony Summit Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Anthony Summit is a Level III trauma center serviced by Flight For Life Colorado and nationally recognized for excellence in patient satisfaction. We provide a full range of medical specialties and health care services to Summit County and the surrounding mountain towns. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Anthony Summit Hospital that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Anthony Summit Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Trixie VanderSchaaff Hospital President St. Anthony Summit Hospital, Frisco CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1500CommonSpirit Health2026-04-15T04:00Z6,517 chars
Please see the attached letter from St. Elizabeth Hospital in Fort Morgan, CO St. Elizabeth Hospital 1000 Lincoln Street Fort Morgan, CO 80701 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Elizabeth Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Elizabeth Hospital has served the community of Fort Morgan for more than 70 years. Given St. Elizabeths is the only hospital in rural Fort Morgan, Colorado, the services we offer are vital for the health and wellbeing of their community. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Elizabeth Hospital that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Elizabeth Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, John Swanhorst Hospital President St. Elizabeth Hospital, Fort Morgan, CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1501Rutland Regional Medical Center2026-04-15T04:00Z19,243 chars
Please see attached comments from Rutland Regional Medical Center, Rutland, VT, 05701 Rutland Regional Medical Center www.RRMC.org | 160 Allen Street, Rutland, VT | 802.775.7111 April 15, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA2026-03042) Dear Administrator Engels: Rutland Regional Medical Center (RRMC) is a 145-bed rural hospital that services Rutland County, Vermont, portions of southern and central Vermont, and communities in eastern New York State, and that participates in the 340B as a covered entity (CE). We provide these comments on the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs; 10 subject to the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 15 beginning in 2027. The RFI asks "whether HRSA should implement a rebate model under the 340B program." Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. RRMC has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis (not post-sale rebates) and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. 340B hospitals are a vital health care resource for low-income, rural, and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, Congress established 340B to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt established practices and expectations grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSA's assumption that a rebate model, even one designed with safeguards, could cause only a "minimal impact" on 340B covered entities is incorrect. Healthy You. Healthy Together. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, which are outcomes that conflict with the program's statutory intent. HRSA's continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSA's withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. As explained below, any rebate mechanism will impose enormous costs and burdens on RRMC that far outweigh any benefits that might come from it. Administrative Costs and Staffing Impacts Under a Potential 340B Rebate Program Any rebate program would require RRMC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, RRMC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital. HRSA's estimate of only 5 hours per week in additional work is a gross underestimate of the staff time we would need to dedicate to a rebate program. RRMC does not currently have the staff needed to participate in a rebate program. If HRSA implements a rebate program, we anticipate a need to hire an additional two FTEs to manage rebate program operations for the initial 25 drugs, which we estimate will cost roughly $130,000 per year. We will need to devote staff time to received, and disputing rebate denials. We will also need to reallocate IT staff to support any 340B rebate program operations. Devoting IT resources to a 340B rebate program would take resources away from critical tasks that directly support our patient care efforts. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program RRMC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Specifically, we will need to pull data from our EMR to obtain medical claims data to submit with rebate requests. We will also need to engage analysists or consultants to develop a method to reconcile 340B rebates to submissions and dispute rebate denials. Data Collection by Covered Entities In support of rebate programs, HRSA and drug manufacturers have suggested that a rebate program would not impose new data-related burdens on 340B hospitals like ours. For example, both have insisted that hospitals already provide the required information through the 340B ESP platform. That is incorrect. Although we currently submit data through 340B ESP, we only do so for pharmacy claims. A rebate program would require us to submit data for both pharmacy claims and medical claims, which would be a clear change from current practice. Reporting medical claims data would require pulling information from a different system. Therefore, any rebate program would require us to develop brand new systems to collect data and process submissions on a regular basis. 2 Also, under ESP, hospitals can still access upfront 340B pricing and they have 45 days to submit data, so hospitals have time collecting data without delaying access to 340B pricing. Under a rebate program, hospitals will need to collect data as fast as possible to submit rebate requests quickly and minimize how long they will need to wait to access 340B pricing. This would be significantly more burdensome than any existing claims data sharing requirement. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force RRMC to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. We understand that HRSA's new rebate policy would cover the 25 drugs subject to the MDPNP in 2026 and 2027, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if drug manufacturers pay rebates within 10 days, we would still be forced to provide interest- free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340B's long history as an upfront discount program. We estimate that having to purchase the 25 drugs at wholesale acquisition cost (WAC) prices would increase our annual drug costs by at least $765,624. Based on data analysis limitations, this number is surely on the lower side of impact to our organization. Additionally, if we are required to wait 30 days to receive payment, as discussed further below, our drug acquisition costs would increase further because the added delay would push us into a less favorable wholesaler payment category, resulting in higher purchasing costs. These estimates assume that manufacturers approve 100% of rebate requests and we are not required to initiate disputes, which would further extend the periods during which we incur higher drug costs. It would be incorrect to assume that an entity will remain whole because rebates will be paid out before wholesaler invoices are due. On average, our invoices are due 15 days after receipt. At best, if we receive a drug from our wholesaler, dispense the drug, and submit a rebate request on the same day, and if a manufacturer pays a rebate 10 days later, we will not receive payment before our invoice is due. In most cases, we will receive payment well after the invoice is due. The reality is that some time can pass after we purchase and receive a drug before it is dispensed. On average, it can take a month after receiving a drug before the drug is dispensed and we can submit a rebate request. Even if we receive a rebate 10 days after the request, we will have carried the increased WAC costs for the purchase for upwards to 45 days and will have received the rebate well after the invoice was due. Moreover, the above timeline assumes we will be able to submit rebate requests as soon as a drug is dispensed. However, the claims data needed to submit a rebate request is not always available immediately after a dispense. Delays in accessing claims data will further extend the period during which we need to float increased WAC costs. 3 Adverse Impacts of These Additional Costs and Burdens All these many different costs and burdens add up. Unfortunately, that means that RRMC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. RRMC will be especially impacted by a rebate program given the critical role it plays to support rural patient populations. Medicare has granted RRMC a sole community hospital (SCH) designation due to its rural status. Rural hospitals like RRMC face significant challenges, including an aging population, increased mental health needs, addiction, housing shortages, recruitment challenges, limited access to childcare, and of course, access to health care. We use our 340B savings to address access issues for our rural communities. The increased costs we would incur from a rebate program would make it even more difficult for us to provide access to care for rural populations. Vermont hospitals are already operating under extraordinary financial constraint. RRMC's FY27 budget is being developed in accordance with our regulator (the Green Mountain Care Board) budgetary guidance that require a -1% commercial reimbursement growth, -1% commercial Net Patient Revenue growth, and operating expense growth capped at 2.4%, while Vermont Act 55 of 2025 has separately capped reimbursement for many outpatient hospital-administered drugs at no more than 120% of ASP. In that environment, moving 340B from an upfront discount model to a rebate model would further destabilize covered entities by forcing them to absorb acquisition cost upfront, wait for repayment, and build additional administrative infrastructure to track and reconcile rebates. This will reduce already thin cash flow and increase operating expenses at the exact moment Vermont hospitals are being directed to do the opposite. HRSA's current RFI expressly contemplates a rebate model pilot for 340B ceiling-price compliance, but for hospitals in states like Vermont, layering a rebate model on top of existing state drug-reimbursement caps would materially weaken the ability of the 340B program to support access and community benefit. Reliance Interests The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via 'rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. RRMC reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings, which are all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. 4 Rebate Denials If HRSA proceeds with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers' vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Efforts To Avoid 340B/MFP Duplication We are in the early stages of monitoring implementation of the MDPNP and how it intersects with our 340B program. What is clear, though, is that a 340B rebate program would be much more burdensome than other mechanisms available to prevent duplication between 340B pricing and the maximum fair price (MFP) under the MDPNP. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Moreover, a rebate program is not needed to ensure duplication under the MDPNP. HRSA has already said that drug companies have other available options to address the need to deduplicate 340B and MFP pricing, and hospitals have identified viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. For example, HRSA could adopt a third-party clearinghouse, rather than a rebate mechanism, to address 340B/MFP duplication. Hospital groups have also shared other options for addressing 340B/MFP duplication and other types of 340B duplication, such as the model used by Oregon Medicaid to prevent 340B/Medicaid rebate duplication using retrospective electronic claims file submissions. Given the tremendous costs that a rebate mechanism will impose on RRMC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse or other option is neither viable nor less costly than a rebate mechanism. 340B Program Integrity The RFI asks for comments on potential benefits of a rebate program to address 340B program integrity, including assisting manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs and reduce diversion. We disagree with HRSA that rebates would improve 340B program integrity and are needed to prevent diversion or Medicaid duplicate discounts. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A rebate program would be significantly more burdensome than these existing mechanisms. If HRSA is interested in exploring ways to improve Medicaid duplicate discount prevention, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. For 5 example, Medicaid agencies could adopt Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting covered entity data retrospectively, allowing the agency to exclude 340B claims from rebate requests. In reality, manufacturer interest in 340B rebate programs is not about 340B program integrity. Drug companies want to use covered entity claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers' beneficial treatment under the pharmacy benefit manager's (PBM's) formulary. This purpose has nothing to do with 340B program integrity and covered entities should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers' commercial agreements. At a minimum, manufacturers should not be permitted to use covered entity rebate claims data for commercial purposes. For all the reasons outlined above, the costs of any rebate program will outweigh any expected benefits. Therefore, HRSA should abandon the concept altogether and embrace a less costly and burdensome option to address 340B duplication concerns. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow RRMC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a rebate program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact me if you have questions. Sincerely, Judi K. Fox President & CEO Rutland Regional Medical Center 6
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Sterling Health Solutions, Inc. - HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) Response to RFI 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris April 10, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Sterling Health Solutions, Inc. (SHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: SHS anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $4.75 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. SHS invests nearly three-quarters (75%) of our 340B savings in rural-specific infrastructure and services, such as mobile clinics, free transportation, free food, and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For our organization in particular, this means it will impact: Providing 340B discounts to Slide participants Providing free transportation and other support services supported currently by the 340B program Increase costs in administrative oversight, estimated 2.5 additional FTEs Reduction in community outreach programs due to lost revenue. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SHS provided sliding fee discounts for over 25,000 unique prescriptions during 2025. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SHS anticipates needing 2.5 additional FTEs to manage and comply with the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, SHS anticipates an increase of over $50,000 in administrative costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that SHS anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris claims. Due to having both in-house and contract locations, SHS is estimating the increase in FTEs to be 2.5 between Pharmacy, Finance, and IT functions. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SHS is estimating the increase in annual costs to exceed $4.75 million. This includes upfront drug purchases at WAC to account for over $4.5 million. Factoring in the cost for additional FTEs and financing costs, the $4.75 million estimate cost increase is conservative. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. SHS estimates it will require 20 hours per week per pharmacy to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Sterling Health Solutions urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Over $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Total Cost: For our CHC, which serves 30,556 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $4.75 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools to be a minimum of $50,000 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend numerous hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The cost tied to this diversion is unknown but could require an additional FTE per pharmacy site. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with over 60 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Nicholas, Menifee, and Bath Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this statistic, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris SHS provides all our Slide eligible patients prescription medication at the current 340B price plus a low fill fee of $7. When applicable, the total cost is waived to help maintain medication adherence. SHS will not be able to waive the cost of medication due to the overall increase in expense if the price increases to the full WAC. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to an average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity- owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $6.5 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2 million to purchase these same drugs at the 340B ceiling price. This represents over a 300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Sterling Health Solutions anticipates needing to reduce: 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as free transportation, community outreach programs, school based clinics, and mobile clinic operations. Operating Hours: We anticipate needing to reduce our clinic hours by reducing or eliminating weekend hours and evening hours at some locations. These changes will directly impact access to care for our patients. Weekend and evening hours are the only times our working-class and agricultural patients can seek care without losing compensation. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. This diversion will reduce the number of Community Health Workers, Peer Support, and other community outreach clinical staff members. This reduction in staff will directly impact patients ability to access care for both physical and mental health needs. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Sterling Health Solutions asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Sterling Health Solutions estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $4.5 million. This cost will only increase as additional medications are added to the program in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to [take out a line of credit / utilize limited financial reserves]. This is not a sustainable solution; the interest costs alone are estimated to be over $180 thousand annually that are currently dedicated to providing free transportation, free food, community outreach programs, telehealth services, and mobile clinics. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on our clinics, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. C. Financial Impact of Rebate Denials and Delays Sterling Health Solutions urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $325 Thousand. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi- billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 236 West Main Street Mount Sterling, Kentucky 40353 Phone: 859-274-0783 Fax: 859-274-4312 www.sterlinghealthky.org Mount Sterling Owingsville Winchester Carlisle Stanton Paris Identify Medicaid Duplicate discounts, a NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. Conclusion Sterling Health Solutions, Inc strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Sterling Health Solutions believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Sterling Health Solutions, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kim Moore, our Director of Pharmacy, kmoore@sterlinghealthky.org Sincerely, Tina Bryant Tina Bryant, CEO Sterling Health Solutions, Inc.
HRSA-2026-0001-1503Glacial Ridge Health System2026-04-15T04:00Z8,387 chars
Letter from Glacial Ridge Health System regarding the 340B Model Pilot Program, HHS Docket No. HRSA-2026-03042 2 GLACIAL RIDGE Phone: 320.634.452 HEALTH SYSTEM Fax: 320.634.2253 heartfelt care glacialridge.org 10 Fourth Avenue SE Glenwood, Minnesota 56334 Glacial Ridge Health System Glenwood, Minnesota The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Glacial Ridge Health System, a Critical Access Hospital serving rural Minnesota, we appreciate the opportunity to respond to HRSA's Request for Information regarding the potential implementation of a 340B rebate model. Glacial Ridge strongly opposes the transition from an upfront discount model to a rebate- based approach. Such a shift would introduce significant financial strain, operational complexity, and administrative burden that would directly undermine our ability to provide care. The impact is not theoretical. It is operational, immediate, and measurable within our organization. Financial and Cash Flow Impact The most significant concern is the shift in cash flow responsibility. Under the current 340B structure, Glacial Ridge accesses discounted pricing at the time of purchase. Under a rebate model, we would be required to purchase medications at wholesale acquisition cost and wait for reimbursement. Based on current projections tied to IRA-impacted drugs, this would increase our annual upfront drug spend from approximately $431,272 to $1,776,653 a difference of $1,345,381 in additional upfront cost of goods. For a rural Critical Access Hospital, this is not manageable. It requires us to carry a GLACIAL RIDGE Phone: 320.634.452 HEALTH SYSTEM Fax: 320.634.225 heartfelt care glacialridge.or 10 Fourth Avenue SE Glenwood, Minnesota 56334 significant financial burden while awaiting reimbursement that is not guaranteed to be timely, complete, or even approved. This fundamentally changes the role of the covered entity, forcing us to absorb risk that the 34oB program was never intended to place on providers. Glacial Ridge does not have the financial flexibility to front these costs without impact. The uncertainty tied to rebate timing and potential denials introduces real financial risk that could disrupt operations and long-term planning. Administrative and Staffing Burden A rebate model introduces a level of administrative work that does not exist today and cannot be absorbed within current operations. At a high level, the process requires identifying eligible claims, submitting detailed data, tracking rebate status, reconciling payments, and managing disputes. While these steps may appear straightforward conceptually, in practice they represent a continuous and resource-intensive workflow that requires dedicated attention. Even with support from external partners, internal coordination remains necessary. Staff will be required to assist in validating data, supporting reconciliation efforts, and addressing discrepancies. This creates a shift in focus away from core responsibilities and toward administrative functions that do not directly support patient care. HRSA's estimate of minimal weekly effort does not align with the operational reality. Reconciliation alone particularly when dealing with missing or denied rebates requires consistent follow-up, investigation, and resubmission. This is not a one-time lift; it is an ongoing obligation. Operational and System Challenges Glacial Ridge's current systems and workflows are designed around an upfront purchasing model. A rebate structure introduces a claims-based process that requires coordination across multiple systems that are not fully integrated. To comply with a rebate model, data would need to be pulled from the electronic health record, pharmacy systems, and billing platforms, then compiled, validated, and submitted GLACIAL RIDGE Phone: 320.634.4521 HEALTH SYSTEM Fax: 320.634.2253 heartfelt care@ glacialridge.org 10 Fourth Avenue SE Glenwood, Minnesota 56334 externally. Much of this work cannot be automated with existing infrastructure and would rely heavily on manual processes. This introduces inefficiencies and increases the likelihood of errors. It also creates ongoing operational strain, as staff must continuously manage and reconcile information across disconnected systems. The effort required to build, maintain, and support these processes represents both a short-term implementation burden and a long-term operational challenge. Data Collection and Submission Reality There is an assumption that the data required for a rebate model is already being collected in a usable format. That is not the case. While Glacial Ridge maintains necessary data for 340B compliance today, the rebate model requires that data to be restructured, validated at the claim level, and submitted in a standardized format across external platforms. This requires pulling data from multiple internal sources, aligning it, and ensuring accuracy prior to submission. This process introduces new steps, new risks, and new dependencies. It is not simply an extension of current operations - it is an entirely different workflow layered on top of existing responsibilities. Impact on Patient Care and Community The financial and operational strain created by a rebate model does not exist in isolation. It directly impacts patient care. 340B savings are critical to sustaining services in a rural setting. These funds support pharmacy operations, expand access to medications, and help offset uncompensated care. When those savings are delayed, reduced, or placed at risk, the effects are immediate. Glacial Ridge would be forced to evaluate where adjustments must be made. This could include scaling back services, delaying investments, or limiting access to certain medications. For the community we serve, these are not minor inconveniences they are meaningful reductions in access to care. GLACIAL RIDGE Phone: 320.634.4521 HEALTH SYSTEM Fax: 320.634.2253 heartfelt care@ glacialridge.org 10 Fourth Avenue SE Glenwood, Minnesota 56334 Beacon Platform Experience and Concerns In preparation for prior rebate model discussions, Glacial Ridge worked alongside its consulting partner to evaluate the Beacon platform and related requirements. That experience highlighted several concerns that remain relevant. Data requirements were not clearly defined and continued to evolve, making it difficult to establish stable workflows. System integration was limited, requiring manual processes to meet submission expectations. Additionally, support and guidance were not always timely or consistent when questions or issues arose. These challenges underscore the risk of implementing a rebate model without clear, standardized processes and strong operational support. Any future model would require significantly more structure, transparency, and accountability to be viable. Reliance on the Current Model Glacial Ridge has built its 340B program around the longstanding upfront discount structure. This includes how we budget, how we staff, and how we deliver services to our patients. That reliance is reasonable. The program has consistently operated in this manner, allowing covered entities to plan and operate with stability. A shift to a rebate model disrupts that foundation and introduces uncertainty into every aspect of program management. Conclusion For Glacial Ridge Health System, the proposed rebate model is not a minor operational change. It is a fundamental restructuring of how the 340B program functions one that shifts financial risk, increases administrative burden, and threatens the stability of rural healthcare providers. The impact is not theoretical. It is operational. We strongly urge HRSA to maintain the current upfront discount model and to consider alternative approaches that address program integrity without introducing unnecessary GLACIAL RIDGE Phone: 320.634.4521 HETH SYSTE Fax: 320.634.2253 heartfelt care@ glacialridge.org 10 Fourth Avenue SE Glenwood, Minnesota 56334 burden on covered entities. We appreciate the opportunity to provide input on this important issue and welcome continued engagement. Sincerely, Kih8t Kirk Stensrud, CEO Glacial Ridge Health System
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See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs, Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Via electronic delivery to https://www.regulations.gov RE: Los Angeles County Department of Public Healths Response to the Request for Information on the 340B Rebate Model Pilot Program (HHS Docket No. HRSA 2026-03042) Dear Director Britton: On behalf of the Los Angeles County (County) Department of Public Health (DPH), thank you for the opportunity to submit comments in response to the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program (Rebate Model Pilot). A potential rebate model would impose substantial administrative and financial burdens on safety-net providers like DPH, threaten access to medication, and undermine local, State, and federal public health goals, including efforts to address and end multiple epidemics, including HIV, sexually transmitted diseases (STDs) and tuberculosis (TB). As such and for the reasons described below, DPH strongly urges HRSA not to move forward with a Rebate Model Pilot or any similar approach that would limit covered entities access to upfront 340B discounts. The County is the most populous local public health jurisdiction in the nation, home to more than 10 million residents, 88 cities, and many unincorporated communities. DPH is the leading public health authority in the County and, in this role, works closely to promote population health and reduce health disparities that are particularly acute in the region as compared to the rest of the nation. DPH oversees and coordinates one of the most complex care and prevention systems in the nation. Through a network of public and private clinics, safety-net providers, public and private hospitals, and community-based organizations, DPHs system serves many low-income and medically complex residents. BARBARA FERRER, Ph.D., M.P.H., M.Ed. Director MUNTU DAVIS, M.D., M.P.H. County Health Officer ANISH P. MAHAJAN, M.D., M.S., M.P.H. Chief Deputy Director 313 North Figueroa Street, Suite 806 Los Angeles, CA 90012 Tel (213) 288-8117 Fax (213) 975-1273 www.publichealth.lacounty.gov BOARD OF SUPERVISORS Hilda L. Solis First District Holly J. Mitchell Second District Lindsey P. Horvath Third District Janice Hahn Fourth District Kathryn Barger Fifth District The 340B Program is an essential financing mechanism that allows safety-net providers to stretch scarce resources while delivering the full continuum of services to achieve public health goals. Shifting away from an upfront discount structure risks immediate harm and creates a pathway for broader manufacturer control over discount delivery, claims data, and denials. Accordingly, DPH urges HRSA to halt any plans to implement a Rebate Model Pilot and refrain from further pursuing rebate-based 340B pricing. The RFI frames the Rebate Model Pilot as an effort to prevent duplicate discounts and strengthen program integrity. However, 340B Program participants have long relied on established carve-in and carve-out practices, payer identification, and reconciliation processes to successfully prevent duplicate discounts. While preventing duplicate discounts and maintaining program integrity is important, shifting the burden of effort from pharmaceutical companies to covered entities like public health departments through a rebate-based model is inappropriate and inefficient. Instead, we urge HRSA to explore more efficient strategies that would strengthen the current 340B system and help to ensure a robust and resilient drug supply, such as improved data sharing, clearer federal guidance, standardized expectations, and improved coordination with Medicaid programs. Pursuing these alternate strategies may resolve duplicate discount issues without burdening covered entities with significant new costs and financial risks. Below please find specific comments from DPH on targeted areas identified in the RFI: 1. Costs to Covered Entities A rebate model would significantly increase costs for DPH and would fundamentally alter the cost structure of 340B participation for safety-net providers in the County. While the current upfront discount model already requires meaningful administrative infrastructure, those costs are predictable, stable, and embedded in existing operations. By contrast, a rebate-based model would introduce new and ongoing costs that safety-net providers will find difficult to financially absorb. Under the current structure, covered entities cover administrative costs related to contract pharmacy oversight, billing and replenishment processes, eligibility verification, and routine auditing. These activities are well established and allow providers to plan drug purchasing and service delivery without having to maintain large cash reserves or engage in claim-by-claim financial reconciliation with manufacturers. As a result, administrative costs under the upfront discount model are manageable and proportional to program benefits. A rebate model would replace this predictability with a multi-step reimbursement process requiring covered entities to purchase drugs at higher upfront prices and then seek reimbursement after the fact. This shift would generate significant costs associated with assembling and submitting claim-level rebate requests; tracking manufacturer adjudications; managing denials, appeals, and resubmissions; performing additional reconciliations across pharmacy, wholesaler, and manufacturer data; and maintaining documentation for audits and dispute resolution. In practice, providers would be required to operate workflows with increased complexity and cost. These burdens would include substantial one-time startup costs including, but not limited to, workflow modifications, systems integration, policy development, staff training, and contract amendments, followed by ongoing costs that scale with prescription volume. From DPHs experience managing large, complex safety-net systems, these costs would not be offset by compensatory system changes and would divert limited resources away from patient care. Ultimately, these financial pressures would affect patient access. Reduced or uncertain 340B savings would limit providers ability to dispense medications, sustain contract pharmacy access points across the County, and fund the wraparound services that enable patients to initiate and remain in care. By potentially limiting access to medications that treat infectious diseases, any cost savings from the pilot would likely be subsumed by potential increased transmission of expensive diseases like TB, HIV, and syphilis. These outcomes would disproportionately harm communities already facing the greatest barriers to care, including uninsured and underinsured people with communicable diseases. Staffing Costs Staffing impacts would be significant under a Rebate Model Pilot as it would require additional capacity in finance, pharmacy operations, compliance, information technology (IT), and legal support. Absent new funding, providers would be forced to reallocate staff time away from clinical care and care coordination toward administrative rebate management. For safety-net providers operating with lean staffing models, this diversion would directly impact services that are essential to achieving public health goals and improved health outcomes for patients. DPHs pharmacy program has limited resources and staff3 pharmacists, 3 technicians, and 1 director yet supports a County of more than 10 million residents. DPH is also facing a $46 million budget reduction, in part due to cuts to federal grant funding, that required ending clinic services at 7 of 14 health centers on February 27, 2026. Services will continue to be provided at the remaining public health clinics, at nearby community health clinics, and through telehealth options when appropriate and feasible. A potential Rebate Model Pilot would require ongoing staff time to submit rebate claims, track payments, resolve errors and denials, and manage multiple manufacturer systems. For a local government agency, adding permanent staff requires formal budget approval and may not be feasible without reducing other services. System Costs Systems and infrastructure costs would also increase under a potential Rebate Model Pilot as it would require new or modified IT systems to compile, validate, transmit, and store claim-level data across multiple stakeholders. Moreover, these changes will likely be dictated by manufacturers or their vendors. Local government health systems like DPH face additional procurement and security review requirements, making rapid system changes costly. Allowing manufacturers to select or control IT platforms raises further concerns regarding conflicts of interest, data governance, and long-term cost increases. DPH would need a dedicated system to track rebateeligible claims and reconcile payments, with an estimated onetime cost of nearly $350,000. The Departments current electronic health record system cannot perform such billing functions, nor track or reconcile payments. These expenses are not feasible during a period of significant budget reductions and elimination of clinical services access points. 2. Payment Timing and Cash Flow Impacts A rebate model would create negative impacts on cash flow for DPH and safety-net providers in the County and spur significant financial risks. Under the current model, discounts are offered at the point of purchase, enabling predictable budgeting and uninterrupted medication access for patients. Under a rebate-based approach, covered entities would be required to carry higher upfront drug costs while awaiting manufacturer adjudication and payment. The current upfront discount model allows DPH to act quickly and protect the public. A rebate model would require the County to pay full price for medications and wait for reimbursement, creating significant cashflow strain, and reducing the ability to respond to communicable disease outbreaks. Reimbursement delays or uncertainty would force difficult choices, including limiting which drugs are offered for the prevention and control of communicable diseases, postponing highcost purchases, or reducing services supported by 340B savings. These impacts would fall directly on lowincome and uninsured patients. Even if HRSA were to require manufacturers to pay or deny rebates in a timely fashion (for example ten calendar days of data submission) this does not eliminate risk. Determinations of claim completeness are subject to dispute and delay, and any denial or request for additional documentation extends the reimbursement timeline. For DPHs contracted providers, the increased need for cash flow would directly compete with funding for essential services and threaten continuity of care. Furthermore, even with a timely turnaround, any delay or dispute would leave DPH carrying large costs, which does not have these resources. This change is unrealistic as DPH is at risk of facing hundreds of millions of dollars in potential federal grant reductions over the upcoming years and is already managing funding reductions at the federal, State and local level. DPH simply cannot operate under a pay now, get reimbursed later system. 3. Rebate Denials A rebate model introduces operational and financial risks that DPH does not have the staff to manage. The small pharmacy team cannot absorb the additional workload of investigating denied rebates, resubmitting claims, and tracking unresolved payments. Any denied rebate would leave DPH paying full price for the drug, which is not sustainable for a local public health department. Unlike large health systems, public health departments do not have substantial cash reserves. Higher upfront drug costs could directly affect clinic operations, staffing, and patient services, undermining the purpose of the 340B Program, which is to stretch limited resources. DPH is concerned that, under a rebate-based model, denials would become a primary mechanism through which manufacturers reduce effective 340B discounts. 4. Data Collection by Covered Entities A rebate model would increase the administrative and reporting burden across the local health system, substantially expanding data collection and reporting requirements, requiring new workflows, systems integration, ongoing submissions, denial management, and expanded auditing practices. DPHs electronic health record system does not have the necessary functionality and upgrading it to accommodate these needs would cost an estimated $350,000 plus ongoing staff time. These changes would increase ongoing administrative and staffing costs in an already under-resourced environment. Furthermore, collecting and validating this information would pull staff away from patient care, reducing DPHs capacity to provide important services. 5. Manufacturer Efforts to Avoid Duplicate Discounts DPH and its partners have long relied on established carve-in and carve-out practices, payer identification, and reconciliation processes to prevent duplicate discounts. While preventing duplicate discounts is important, shifting this burden to covered entities through a rebate-based model is inappropriate and inefficient. DPH recommends that HRSA instead prioritize standardized data definitions, improved coordination, and targeted enforcement under the existing upfront discount structure. A rebate model is not necessary to achieve these goals and risks imposing disproportionate burden on safety-net providers. Strengthening the current system through better data sharing, clearer federal guidance, standardized expectations, and improved coordination with Medicaid programs would address these concerns. Enhancing existing data processes may resolve duplicatediscount issues without altering how the 340B Program operates. 6. Required Reporting A rebate model would significantly increase reporting requirements for covered entities, which is far beyond what is necessary to effectively manage this program at the local level and what is feasible for DPH. As noted, DPH would need to report rebateeligible claims, rebate submissions, denials and appeals, payment reconciliation, and audit documentation. This level of reporting cannot be accomplished without reducing pharmacy services and access to care. 7. 340B Program Integrity A rebate model will undermine, rather than enhance, 340B program integrity. Increased complexity, expanded data sharing, and greater manufacturer control create opportunities for delay, denial, and disruption of patient access. Program integrity must be measured not only by compliance processes, but by the programs ability to deliver statutory pricing benefits to safety- net providers without interrupting patient care. DPH supports HRSAs goal of strengthening program integrity and believes this can be achieved without shifting to a rebate model. Integrity can be improved through clearer guidance and better data sharing. Preventing duplicate discounts is important, but in DPHs experience, current rules are interpreted differently by manufacturers, Medicaid programs, and covered entities. Improved data sharing would also reduce errors. A consistent 340B claim flag across all state Medicaid programs, a standard set of data fields for rebate submissions, or a single federal portal would allow manufacturers to verify claims without creating additional burden for covered entities. These enhancements can be made within the existing upfront discount model and would strengthen program integrity without the added complexity of a rebate system. For the reasons described above, DPH urges HRSA to withdraw any future consideration of a 340B Rebate Model Pilot Program and maintain the 340B Program as an upfront discount program, consistent with longstanding practice and statutory intent. A rebate model would harm safetynet providers including local health departments like DPH by increasing administrative workload, creating financial risk, and reducing access to essential medications for vulnerable patient populations, which undermine the core purpose of the 340B Program. DPHs priority is protecting the health of County residents. A rebate model would add cost, delay, and administrative burden at a time when the County is already facing major budget cuts, staffing shortages, and ends to clinic services. Further, DPH strongly urges HRSA to maintain the current upfront discount model and pursue more efficient strategies like improved data sharing, clearer federal guidance, standardized processes and improved coordination with Medicaid programs. Thank you for the opportunity to submit this comment. Sincerely, Barbara Ferrer, Ph.D., M.P.H., M.Ed. Director, County of Los Angeles Department of Public Health
HRSA-2026-0001-1505CommonSpirit Health2026-04-15T04:00Z6,515 chars
Comment Letter for St. Francis Medical Center in Colorado Springs, CO St. Francis Medical Center 6001 E Woodmen Road Colorado Springs, CO 80923 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Francis Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Francis Medical Center proudly serves patients in north Colorado Springs and surrounding communities. As a high-quality, patient centric facility, St. Francis Medical Center is trusted by the patients we serve. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Francis Medical Center that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Francis Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Dr. Gina Temple Hospital President St. Francis Medical Center, Colorado Springs CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1506White Mountain Regional Medical Center2026-04-15T04:00Z34,731 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of White Mountain Regional Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on White Mountain Regional Medical Center that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which White Mountain Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. White Mountain Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that White Mountain 2 Regional Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require White Mountain Regional Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, White Mountain Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Administrative costs and operational costs would most certainly increase as we would have to spend more money on monitoring the program and ensuring compliance with the statutes and regulations already in place but would be further complicated by a rebate model. These administrative costs would come from time spent by staff directly monitoring reimbursements, claims eligibility, compliance, and meeting with other industry players such as TPAs and Mock auditors. The level of complication that a rebate model would add to an already time-consuming and expensive process would remarkably increase. One-time costs for upgraded software capabilities would be incurred. I expect that the cost of yearly mock audits performed by outside consultants will significantly increase as their burden of work and time spent would increase. And I expect that administrative hours spent on increased monitoring and regular meetings with TPAs, as well as operational hours spent on tracking eligibility, and compliance will significantly increase both in the immediacy and over the long term to as much as 15-20 hours per week at the beginning and 10-15 hours per week over the long term. Increased hours spent on changing to a rebate model would require increased staffing levels, diverting IT personnel (at least initially). We would likely have to set up new and specific data feeds. Our EHR platform has historically charged up to 10 thousand dollars to create a new interface. Our third-party vendors involvement would likely substantially increase and therefore likely increase the costs incurred by of third party vendors. Our TPA hasnt yet raised prices on us, but we anticipate that as their body of work increases, they will pass those costs along to us. 3 Specific activities that cost money that we anticipate would increase are claims processing and data submission. The more challenging this gets (and we anticipate it will, due to rebate model) the more our TPAs are likely to charge us. We expect that reconciling claims and chasing down rebates, and challenging denials could potentially add 10-15 hours per week of pharmacist and/or technician time. Audit support as well as internal audit activities will also increase because of the increased complexity of rebates. Those internal audits take place once quarterly and require several hours to perform and provide feedback to facility stakeholders. That time- intensive process will increase if a rebate model is enacted. Staffing Impacts Under a Potential 340B Rebate Program. White Mountain Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. We anticipate that a rebate model would cause current medical providers in our facility to reallocate work from patient care and clinical activities to administrative duties to comply with the new rules and requirements put in place by a rebate model. This would pull time from our pharmacists, our pharmacy technicians, our chief compliance officer, our clinic manager, clinic medical providers, and possibly more. To that end, my opinion and understanding is that HRSAs estimate that a 340b rebate model would only add 2 hours per week is a significant underestimate of the challenges and work involved in managing a rebate model-based program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. White Mountain Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. While we dont fully understand the full scope of the costs, we do anticipate that we will have to develop new technological infrastructure including new interfaces between our EHR and our TPA. As mentioned above, this has an up-front cost of 10,000 dollars per interface and there might be multiple interfaces to build, especially if we find we must interface with the Beacon IT Platform. Indirect recurring cost that we anticipate is that up to this point, our TPA technology platforms do not have the capacity to track rebates given to the facility. They will therefore have to design and build new software 4 systems and interfaces between them, us, the contract pharmacies, beacon, 340b ESP., etc. Those increases in upfront and maintenance costs will have to come from somewhere and we anticipate that most of the expenses will fall on our facility, initially and as time goes on. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We of course complied with the mandate to submit data and information through 340B ESP to maintain our compliance with the 340B program but doing so increased our level of monitoring and placed an additional burden. We feel frustrated that HRSA is now coming back and stating that with a rebate program, we must submit data to another online, 3rd party platform to remain eligible for the program. We especially feel frustrated that with all of these increased reporting requirements that do nothing but burden covered entities, the reality is that manufacturers have used and will continue to use these multiple levels of reporting mandates to make things more difficult for covered entities and restrict access to 340B pricing. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force White Mountain Regional Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. We further have very little trust that drug companies arent going to find every reason to delay paying claims and further the window for reasonable payment. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that White Mountain Regional Medical Center will no longer be able to use our 340B savings as effectively 5 and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We affirm that as a small critical access hospital we have very few administrative and operational resources. We run at a tight administrative and operational capacity and those involved in the 340B program already perform multiple other necessary functions for the facility and for the community. We simply dont have the resources to do everything we need to do and if the 340B program is moved to a rebate model, we anticipate that we will have to cut other services and benefits provided to our patients and community. If a rebate model is implemented, it could also prevent or delay us as a facility from providing much needed upgrades to our Electronic Health Record and other IT priorities, it could prevent investments in new equipment and upgrades to patient care areas. It could most certainly impact healthcare worker training and retention programs. Weve made a lot of progress in the last few years as a facility in striving to provide the highest quality of care we can by upgrading equipment, patient care areas, staff training and competencies, and we feel like limiting access to 340B revenue by moving to a rebate model would have the effect of reversing those recent gains we have made. We also may have to limit outpatient services provided to our community such as labs, imaging, outpatient infusion services, OR services, and rehabilitation services. Those are all services that we have historically used 340B revenue to fund. Furthermore, a certain number of our patients rely on access to effective but expensive medication that we are able to keep in stock due to 340B pricing. The rebate model format could have the disastrous effect of limiting cash on hand at our facility and negatively impacting our budgets and therefore limiting inventory levels of medication that we are able to keep in stock, especially the expensive ones that we get through 340B. All of this results in having less of what we need when we need it and ultimately leads to poor outcomes for our local patients. The reality is that we serve one of the poorest counties in the rural United States and serve mostly Medicare and Medicaid patients. The next nearest facility to us is more than 50 miles away. If our local patients lose access to services provided here at White Mountain Regional Medical Center, they will have to travel an hour each way to receive those same services and benefits. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such 6 reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. White Mountain Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on White Mountain Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To be clear, to this date, I have not had a manufacturer raise significant concerns to me or to our facility about deduplication. There simply hasnt been a concern raised and according to our most recently completed external audit, there isnt a concern in our program for discount duplication. We are working with our TPA to ensure that any Medicaid plans that receive discounts have been carved out the from our 340B claims data to ensure that there is no chance of duplicate discounts. Therefore, 7 we see that manufacturers pushing for a rebate model to prevent duplication is trying to solve a problem that really isnt there. A rebate model isnt needed to prevent duplication. All the rebate model does is put drug companies in charge of the money and allow them to withhold it at any time, for virtually any reason, and then make covered entities jump through hoops to challenge or reverse those withholdings. This 340B revenue, by law, was meant to be distributed to covered entities to ensure increased equity across health care and access to care for the most disadvantaged populations. Changing to a rebate model will drastically undercut those original mandates. For all of these reasons, White Mountain Regional Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow White Mountain Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Joshua Burton, PharmD. Executive Director Pharmacist White Mountain Regional Medical Center Eagar, AZ 85925 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of White Mountain Regional Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on White Mountain Regional Medical Center that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which White Mountain Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. White Mountain Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that White Mountain Regional Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require White Mountain Regional Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, White Mountain Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Administrative costs and operational costs would most certainly increase as we would have to spend more money on monitoring the program and ensuring compliance with the statutes and regulations already in place but would be further complicated by a rebate model. These administrative costs would come from time spent by staff directly monitoring reimbursements, claims eligibility, compliance, and meeting with other industry players such as TPAs and Mock auditors. The level of complication that a rebate model would add to an already time-consuming and expensive process would remarkably increase. One-time costs for upgraded software capabilities would be incurred. I expect that the cost of yearly mock audits performed by outside consultants will significantly increase as their burden of work and time spent would increase. And I expect that administrative hours spent on increased monitoring and regular meetings with TPAs, as well as operational hours spent on tracking eligibility, and compliance will significantly increase both in the immediacy and over the long term to as much as 15-20 hours per week at the beginning and 10-15 hours per week over the long term. Increased hours spent on changing to a rebate model would require increased staffing levels, diverting IT personnel (at least initially). We would likely have to set up new and specific data feeds. Our EHR platform has historically charged up to 10 thousand dollars to create a new interface. Our third-party vendors involvement would likely substantially increase and therefore likely increase the costs incurred by of third party vendors. Our TPA hasnt yet raised prices on us, but we anticipate that as their body of work increases, they will pass those costs along to us. Specific activities that cost money that we anticipate would increase are claims processing and data submission. The more challenging this gets (and we anticipate it will, due to rebate model) the more our TPAs are likely to charge us. We expect that reconciling claims and chasing down rebates, and challenging denials could potentially add 10-15 hours per week of pharmacist and/or technician time. Audit support as well as internal audit activities will also increase because of the increased complexity of rebates. Those internal audits take place once quarterly and require several hours to perform and provide feedback to facility stakeholders. That time-intensive process will increase if a rebate model is enacted. Staffing Impacts Under a Potential 340B Rebate Program. White Mountain Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. We anticipate that a rebate model would cause current medical providers in our facility to reallocate work from patient care and clinical activities to administrative duties to comply with the new rules and requirements put in place by a rebate model. This would pull time from our pharmacists, our pharmacy technicians, our chief compliance officer, our clinic manager, clinic medical providers, and possibly more. To that end, my opinion and understanding is that HRSAs estimate that a 340b rebate model would only add 2 hours per week is a significant underestimate of the challenges and work involved in managing a rebate model-based program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. White Mountain Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. While we dont fully understand the full scope of the costs, we do anticipate that we will have to develop new technological infrastructure including new interfaces between our EHR and our TPA. As mentioned above, this has an up-front cost of 10,000 dollars per interface and there might be multiple interfaces to build, especially if we find we must interface with the Beacon IT Platform. Indirect recurring cost that we anticipate is that up to this point, our TPA technology platforms do not have the capacity to track rebates given to the facility. They will therefore have to design and build new software systems and interfaces between them, us, the contract pharmacies, beacon, 340b ESP., etc. Those increases in upfront and maintenance costs will have to come from somewhere and we anticipate that most of the expenses will fall on our facility, initially and as time goes on. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We of course complied with the mandate to submit data and information through 340B ESP to maintain our compliance with the 340B program but doing so increased our level of monitoring and placed an additional burden. We feel frustrated that HRSA is now coming back and stating that with a rebate program, we must submit data to another online, 3rd party platform to remain eligible for the program. We especially feel frustrated that with all of these increased reporting requirements that do nothing but burden covered entities, the reality is that manufacturers have used and will continue to use these multiple levels of reporting mandates to make things more difficult for covered entities and restrict access to 340B pricing. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force White Mountain Regional Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. We further have very little trust that drug companies arent going to find every reason to delay paying claims and further the window for reasonable payment. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that White Mountain Regional Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We affirm that as a small critical access hospital we have very few administrative and operational resources. We run at a tight administrative and operational capacity and those involved in the 340B program already perform multiple other necessary functions for the facility and for the community. We simply dont have the resources to do everything we need to do and if the 340B program is moved to a rebate model, we anticipate that we will have to cut other services and benefits provided to our patients and community. If a rebate model is implemented, it could also prevent or delay us as a facility from providing much needed upgrades to our Electronic Health Record and other IT priorities, it could prevent investments in new equipment and upgrades to patient care areas. It could most certainly impact healthcare worker training and retention programs. Weve made a lot of progress in the last few years as a facility in striving to provide the highest quality of care we can by upgrading equipment, patient care areas, staff training and competencies, and we feel like limiting access to 340B revenue by moving to a rebate model would have the effect of reversing those recent gains we have made. We also may have to limit outpatient services provided to our community such as labs, imaging, outpatient infusion services, OR services, and rehabilitation services. Those are all services that we have historically used 340B revenue to fund. Furthermore, a certain number of our patients rely on access to effective but expensive medication that we are able to keep in stock due to 340B pricing. The rebate model format could have the disastrous effect of limiting cash on hand at our facility and negatively impacting our budgets and therefore limiting inventory levels of medication that we are able to keep in stock, especially the expensive ones that we get through 340B. All of this results in having less of what we need when we need it and ultimately leads to poor outcomes for our local patients. The reality is that we serve one of the poorest counties in the rural United States and serve mostly Medicare and Medicaid patients. The next nearest facility to us is more than 50 miles away. If our local patients lose access to services provided here at White Mountain Regional Medical Center, they will have to travel an hour each way to receive those same services and benefits. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. White Mountain Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on White Mountain Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To be clear, to this date, I have not had a manufacturer raise significant concerns to me or to our facility about deduplication. There simply hasnt been a concern raised and according to our most recently completed external audit, there isnt a concern in our program for discount duplication. We are working with our TPA to ensure that any Medicaid plans that receive discounts have been carved out the from our 340B claims data to ensure that there is no chance of duplicate discounts. Therefore, we see that manufacturers pushing for a rebate model to prevent duplication is trying to solve a problem that really isnt there. A rebate model isnt needed to prevent duplication. All the rebate model does is put drug companies in charge of the money and allow them to withhold it at any time, for virtually any reason, and then make covered entities jump through hoops to challenge or reverse those withholdings. This 340B revenue, by law, was meant to be distributed to covered entities to ensure increased equity across health care and access to care for the most disadvantaged populations. Changing to a rebate model will drastically undercut those original mandates. For all of these reasons, White Mountain Regional Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow White Mountain Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Joshua Burton, PharmD. Executive Director Pharmacist White Mountain Regional Medical Center Eagar, AZ 85925
HRSA-2026-0001-1507Munson Healthcare2026-04-15T04:00Z4,038 chars
On behalf of Munson Healthcare, I appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The specific question being posed by the RFI, whether HRSA should implement a rebate model under the 340B program, has a specific answer, and that answer is no. Munson Healthcare opposes efforts to fundamentally shift the 340B program from an upfront discount to a rebate model. Please see attached for the full comment letter from Munson Healthcare 1105 Sixth Street (231) 935-5000 voice munsonhealthcare.org Traverse City, MI 49684-2386 April 15, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042) Administrator Engels, On behalf of Munson Healthcare, I appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The specific question being posed by the RFI, whether HRSA should implement a rebate model under the 340B program, has a specific answer, and that answer is no. Munson Healthcare opposes efforts to fundamentally shift the 340B program from an upfront discount to a rebate model. As you may know, Munson Healthcare is the largest rural healthcare provider in the state, consisting of eight hospitals and serving 540,000 residents in 24 counties across 11,000 square miles of Northern Michigan. We provide comprehensive, integrated healthcare services to a geographically dispersed population and are eligible for the 340B Drug Pricing program because we serve a disproportionate share of low-income Medicare and Medicaid patients and because we operate several Critical Access Hospitals and Sole Community Hospitals. Since the outset, HHS has successfully operated the 340B program as an upfront discount. Imposing a rebate model will cause direct harm to hospital covered entities like Munson Healthcare. The enormous cost and administrative burden brought about by the imposition of any rebate model goes against the fundamental premise of the 340B program stretching scarce resources to serve more eligible patients with comprehensive, high- quality services. For Munson Healthcare, the program benefits allow our community hospitals to provide an array of services they could not offer without 340B program participation. Savings derived from hospital program participation assist an incredible range of services, including (but not limited to): Supporting financial navigators for cancer patients Supporting community health education and community-based clinical services Providing transportation services that are vital for the geographically dispersed population we serve Supporting vital service lines like inpatient psychiatric services, obstetrics and gynecology. Funding comprehensive cancer care Supporting specialized hemophilia care Providing charity care, a full write off of hospital costs, for those in our community who qualify and are unable to pay In addition, moving to a rebate model would upend the delicate balance of hospital financing. The enormous cost that hospitals will incur, both upfront increased costs of purchases and enormous new administrative costs, directly conflict with the goals of the 340B program. Instead of the program supporting safety net hospitals, implementation of a rebate model will increase hospital costs, add administrative burden and reduce the overall benefit of the program to patients and communities. Thank you for your attention to these issues. Should you have any questions, please feel free to contact me, or Mr. Gabe Schneider, Director of Government Relations for Munson Healthcare, who can be reached at gschneider@mhc.net or 517-449-6453. Sincerely,
HRSA-2026-0001-1508(no commenter metadata)2026-04-15T04:00Z17,740 chars
See attached file(s) Response to HRSA Request for Information HHS Docket No. HRSA-2026-03042 To Whom It May Concern: On behalf of Adams County Memorial Hospital and Adams Community Pharmacy, thank you for the opportunity to comment on HRSAs Request for Information regarding the potential use of rebates to effectuate the 340B ceiling price under the 340B Program. Adams County Memorial Hospital is a county-owned independent health system serving a rural Indiana community with significant financial and access challenges. Our service area includes a large Medicare and Medicaid population, uninsured and underinsured patients, and a substantial Amish population, many of whom have limited ability to afford medications and health care services. Adams Community Pharmacy is a community pharmacy owned by the hospital. Although it is not an in-house hospital pharmacy, it is an important part of our overall care model and is distinctive in our community because of the assistance we provide to patients who otherwise cannot afford needed medications. For organizations like ours, the 340B Program is not a theoretical policy issue. It is a practical lifeline that helps us stretch limited resources to maintain essential services and improve medication access for vulnerable patients. We strongly urge HRSA not to replace upfront 340B discounts with a rebate-based model. Even if structured as a pilot, such a model would impose major administrative burdens, create material cash-flow risk, and threaten patient access to medications and other essential health services. 1. Upfront discounts are essential to the way covered entities operate The current 340B model works because the discount is available at the time of purchase. That structure allows covered entities to buy drugs at the statutorily required ceiling price without needing to advance substantial working capital and wait for reimbursement later. A rebate model would fundamentally change that structure. Covered entities would first have to purchase drugs at higher acquisition costs and then wait for repayment. For many rural hospitals, small health systems, and hospital-owned community pharmacies, that shift would create significant financial strain. It would force providers to finance the federal discount themselves while assuming the risk of delay, denial, reconciliation errors, and nonpayment disputes. That is not a minor operational change. It is a fundamental transfer of financial burden from manufacturers to covered entities. 2. A rebate model would create significant cash-flow risk The most serious concern with a rebate model is cash flow. Rural hospitals and safety-net providers typically do not have excess liquidity available to absorb higher upfront drug purchasing costs while waiting for rebate payments. Even short delays would matter. For our organization, payment timing would affect cash flow. Drug purchasing occurs continuously. Payroll, supply costs, and other operating costs continue regardless of whether a rebate is pending. If rebate payments are delayed, disputed, or denied, the covered entity bears the immediate financial burden. That burden is especially concerning for organizations already operating on thin margins and serving a high percentage of Medicare, Medicaid, and self-pay patients. Even a nominally short payment window does not eliminate this risk. In practice, the process would still require claim identification, submission, validation, reconciliation, denial management, resubmission, and audit support. Each of those steps introduces friction and delay. A system that depends on timely and accurate downstream payment is inherently less stable than a system that provides the discount upfront. 3. Administrative and operational burden would increase substantially A rebate model would require covered entities and hospital-owned pharmacies to build or expand systems for claim-level data capture and submission, rebate tracking and reconciliation, denial review and appeal, audit preparation and documentation, coordination with wholesalers, pharmacies, and third-party administrators, IT modifications and ongoing monitoring, and staff training and compliance oversight. These activities would increase both one-time implementation costs and recurring operating costs. For a rural organization, even a modest increase in FTE needs, vendor expenses, or IT support has real consequences. Time and money spent on rebate administration are time and money diverted from patient care. These burdens would be especially pronounced where pharmacy operations involve community-based dispensing, assistance programs, and vulnerable patients with complex financial circumstances. A rebate model would not simplify operations. It would add a new layer of complexity on top of existing compliance obligations. 4. Rebate denials and disputes would create uncertainty and risk Any rebate system will produce denials, exceptions, and disputes. Even if HRSA attempted to limit the grounds for denial, manufacturers would still review claims, assess data sufficiency, and determine whether they believe payment is appropriate. That creates uncertainty for covered entities and invites delay. From the provider perspective, the issue is not only whether denials are formally allowed in narrow circumstances. The issue is whether covered entities will have to spend staff time and resources contesting denials, correcting data, and waiting for funds that are essential to ongoing operations. If HRSA proceeds further in considering any rebate model, there would need to be strict, enforceable guardrails, including mandatory timelines, standardized denial codes, full documentation requirements, rapid appeal rights, automatic penalties for late payment, and meaningful oversight by HRSA. But even with such guardrails, the rebate structure would still be inferior to the current upfront discount model. 5. Patient access would be harmed The 340B Program allows covered entities to support services and medication access that otherwise would be difficult to sustain. A rebate model threatens those benefits by increasing financial uncertainty and administrative cost. For our organization, this concern is immediate and concrete. Adams Community Pharmacy serves patients who often struggle to afford medications, and we provide assistance that is not otherwise readily available in our community. If covered entities must absorb higher upfront drug costs and devote more resources to administrative rebate functions, fewer resources will remain available for medication assistance, care coordination, and other community benefit activities supported by 340B savings. The result could be reduced access to medications, delayed therapy, greater financial hardship for patients, and worsening health outcomes. Those harms would fall most heavily on rural, low-income, elderly, and uninsured populations. 6. Rural and community-specific factors matter Rural and independent providers face unique challenges: limited administrative staff, limited access to capital, greater dependence on a small number of key personnel and vendors, higher sensitivity to cash-flow disruption, older and poorer patient populations, and fewer alternative pharmacy and provider options in the community. These realities make a rebate model especially problematic for small and rural covered entities. What may appear manageable in theory can become unworkable in practice when implemented in resource-constrained settings. 7. A rebate model is not necessary to preserve program integrity We recognize HRSAs interest in avoiding duplicate discounts, preventing diversion, and gathering better data. Those are legitimate goals. But they do not justify shifting the 340B Program away from its longstanding upfront discount structure. Program integrity can be strengthened through more targeted means, such as clearer guidance, standardized data elements, improved coordination with state Medicaid agencies, better dispute resolution tools, and focused oversight mechanisms. HRSA should pursue solutions that address integrity concerns without destabilizing the financial model on which covered entities depend. A rebate-based approach would solve one set of concerns, if at all, by creating many others. It is not a balanced tradeoff for safety-net providers. Thank you for the opportunity to comment on this important issue. Sincerely, Dane Wheeler Chief Strategy Officer Adams County Memorial Hospital / Adams Community Pharmacy 1100 Mercer Avenue Decatur, IN 46733 dane.wheeler@adamshealthnetwork.org 1 Response to HRSA Request for Information HHS Docket No. HRSA-2026-03042 Submitted by Adams County Memorial Hospital and Adams Community Pharmacy Re Comments on potential implementation of a 340B rebate model To Whom It May Concern: On behalf of Adams County Memorial Hospital and Adams Community Pharmacy, thank you for the opportunity to comment on HRSAs Request for Information regarding the potential use of rebates to effectuate the 340B ceiling price under the 340B Program. Adams County Memorial Hospital is a county-owned independent health system serving a rural Indiana community with significant financial and access challenges. Our service area includes a large Medicare and Medicaid population, uninsured and underinsured patients, and a substantial Amish population, many of whom have limited ability to afford medications and health care services. Adams Community Pharmacy is a community pharmacy owned by the hospital. Although it is not an in-house hospital pharmacy, it is an important part of our overall care model and is distinctive in our community because of the assistance we provide to patients who otherwise cannot afford needed medications. For organizations like ours, the 340B Program is not a theoretical policy issue. It is a practical lifeline that helps us stretch limited resources to maintain essential services and improve medication access for vulnerable patients. We strongly urge HRSA not to replace upfront 340B discounts with a rebate-based model. Even if structured as a pilot, such a model would impose major administrative burdens, create material cash-flow risk, and threaten patient access to medications and other essential health services. 1. Upfront discounts are essential to the way covered entities operate The current 340B model works because the discount is available at the time of purchase. That structure allows covered entities to buy drugs at the statutorily required ceiling price without needing to advance substantial working capital and wait for reimbursement later. A rebate model would fundamentally change that structure. Covered entities would first have to purchase drugs at higher acquisition costs and then wait for repayment. For many rural hospitals, small health systems, and hospital-owned community pharmacies, that shift would create significant financial strain. It would force providers to finance the federal discount themselves while assuming the risk of delay, denial, reconciliation errors, and nonpayment disputes. That is not a minor operational change. It is a fundamental transfer of financial burden from manufacturers to covered entities. 2. A rebate model would create significant cash-flow risk The most serious concern with a rebate model is cash flow. Rural hospitals and safety-net providers typically do not have excess liquidity available to absorb higher upfront drug purchasing costs while waiting for rebate payments. Even short delays would matter. For our organization, payment timing would affect cash flow. 2 Drug purchasing occurs continuously. Payroll, supply costs, and other operating costs continue regardless of whether a rebate is pending. If rebate payments are delayed, disputed, or denied, the covered entity bears the immediate financial burden. That burden is especially concerning for organizations already operating on thin margins and serving a high percentage of Medicare, Medicaid, and self-pay patients. Even a nominally short payment window does not eliminate this risk. In practice, the process would still require claim identification, submission, validation, reconciliation, denial management, resubmission, and audit support. Each of those steps introduces friction and delay. A system that depends on timely and accurate downstream payment is inherently less stable than a system that provides the discount upfront. 3. Administrative and operational burden would increase substantially A rebate model would require covered entities and hospital-owned pharmacies to build or expand systems for claim-level data capture and submission, rebate tracking and reconciliation, denial review and appeal, audit preparation and documentation, coordination with wholesalers, pharmacies, and third-party administrators, IT modifications and ongoing monitoring, and staff training and compliance oversight. These activities would increase both one-time implementation costs and recurring operating costs. For a rural organization, even a modest increase in FTE needs, vendor expenses, or IT support has real consequences. Time and money spent on rebate administration are time and money diverted from patient care. These burdens would be especially pronounced where pharmacy operations involve community- based dispensing, assistance programs, and vulnerable patients with complex financial circumstances. A rebate model would not simplify operations. It would add a new layer of complexity on top of existing compliance obligations. 4. Rebate denials and disputes would create uncertainty and risk Any rebate system will produce denials, exceptions, and disputes. Even if HRSA attempted to limit the grounds for denial, manufacturers would still review claims, assess data sufficiency, and determine whether they believe payment is appropriate. That creates uncertainty for covered entities and invites delay. From the provider perspective, the issue is not only whether denials are formally allowed in narrow circumstances. The issue is whether covered entities will have to spend staff time and resources contesting denials, correcting data, and waiting for funds that are essential to ongoing operations. If HRSA proceeds further in considering any rebate model, there would need to be strict, enforceable guardrails, including mandatory timelines, standardized denial codes, full documentation requirements, rapid appeal rights, automatic penalties for late payment, and meaningful oversight by HRSA. But even with such guardrails, the rebate structure would still be inferior to the current upfront discount model. 5. Patient access would be harmed The 340B Program allows covered entities to support services and medication access that otherwise would be difficult to sustain. A rebate model threatens those benefits by increasing financial uncertainty and administrative cost. 3 For our organization, this concern is immediate and concrete. Adams Community Pharmacy serves patients who often struggle to afford medications, and we provide assistance that is not otherwise readily available in our community. If covered entities must absorb higher upfront drug costs and devote more resources to administrative rebate functions, fewer resources will remain available for medication assistance, care coordination, and other community benefit activities supported by 340B savings. The result could be reduced access to medications, delayed therapy, greater financial hardship for patients, and worsening health outcomes. Those harms would fall most heavily on rural, low- income, elderly, and uninsured populations. 6. Rural and community-specific factors matter Rural and independent providers face unique challenges: limited administrative staff, limited access to capital, greater dependence on a small number of key personnel and vendors, higher sensitivity to cash-flow disruption, older and poorer patient populations, and fewer alternative pharmacy and provider options in the community. These realities make a rebate model especially problematic for small and rural covered entities. What may appear manageable in theory can become unworkable in practice when implemented in resource-constrained settings. 7. A rebate model is not necessary to preserve program integrity We recognize HRSAs interest in avoiding duplicate discounts, preventing diversion, and gathering better data. Those are legitimate goals. But they do not justify shifting the 340B Program away from its longstanding upfront discount structure. Program integrity can be strengthened through more targeted means, such as clearer guidance, standardized data elements, improved coordination with state Medicaid agencies, better dispute resolution tools, and focused oversight mechanisms. HRSA should pursue solutions that address integrity concerns without destabilizing the financial model on which covered entities depend. A rebate-based approach would solve one set of concerns, if at all, by creating many others. It is not a balanced tradeoff for safety-net providers. Conclusion: HRSA should preserve the current upfront discount structure and should not move forward with a rebate-based 340B model. A rebate approach would impose significant administrative burden, create material cash-flow risk, increase disputes and uncertainty, and jeopardize patient access to medications and services in rural and underserved communities. Thank you for the opportunity to comment on this important issue. Sincerely, Dane Wheeler 4 Chief Strategy Officer Adams County Memorial Hospital / Adams Community Pharmacy 1100 Mercer Avenue Decatur, IN 46733 dane.wheeler@adamshealthnetwork.org
HRSA-2026-0001-1509Kootenai Health2026-04-15T04:00Z15,067 chars
See attached file(s) 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org April 15, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA 202603042) Dear Administrator Engels: Kootenai Health, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. Over the course of one year, we believe our hospital would be required to front to drug manufacturers approximately $24,304,529. This impact disrupts decades of business practices built around 340B upfront discounts. To contextualize the value of this number, our prior experience with a similar program, the MFP rebate program, shows that we are typically required to advance payment for approximately two to three months before realizing any rebate recovery. This represents an upfront cash outlay of roughly $5.2 million. Even then, due to ongoing administrative issues, we have only been able to successfully collect rebates on approximately 25% of eligible drugs to date. Additionally, administration of the program requires staffing an estimated 1.0 additional FTE, at an annual cost of approximately $100,000 in salaries and wages. Taken together, the net financial impact on our safetynet hospital is an upfront burden exceeding $5 million, along with continued operational expenses. To put this into perspective, this initial outlay alone represents approximately 7.5% of the total annual value of our 340B program, effectively redirecting program resources back to drug manufacturers rather than supporting patient care and safetynet services. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org dedicate staff just to address these issues. With rebates applying across all hospital settings not just contract pharmacy the administrative burden and financial risk would increase greatly. Some of the cost increases we anticipate include the need for additional FTE staffing, expanded reliance on vendor services, increased IT resources, and overall effective loss effective pricing. Additional FTE responsibilities would include data submission, rebate tracking, auditing and validation of received rebates, and ongoing coordination with manufacturers vendors to resolve missing or delayed payments. We anticipate requiring between 1-2 additional FTE to manage these tasks. Based on the current healthcare landscape, we foresee difficulty finding funds to hire additional FTE, leaving reassignment of existing staff to manage 340B rebates as our only option. Ultimately, we believe this reallocation will detract from our work towards program compliance and efficiency. Additionally, pulling staff from other pharmacy areas could reduce our capacity to provide patient-facing care. As an alternative to hiring additional employees or reallocating existing staff hours, we may need to engage third-party vendors to assist with the responsibilities outlined above. While we have previously met with several vendors and reviewed their solutions, the associated monthly fees are significant. Currently we anticipate the cost of a dedicated 340B rebate management platform to range between $10,000 - $15,000 per month. Regardless of the approach taken, these changes will result in significant and ongoing operational costs. In addition, it is likely that remediation efforts through HRSAs Alternate Dispute Resolution (ADR) process will be required at some point. Pursuing ADR would result in further costs, as we would need to engage with third-party legal consultants to assist with navigating the process. Our recent experience with the IRA Maximum Fair Price (MFP) rebate program reinforces concerns about the administrative burden these changes would create. Contesting missing MFP rebates in the Beacon platform is an unintuitive, multi-step process that requires substantial time and effort for each incorrectly processed claim. Inquiries must be submitted through one platform, with supporting data uploaded to a separate system for each claim. From identifying errors, submitting a good-faith inquiry, uploading supporting claims data, and validating the response, each claim can take up to 30 minutes to resolve. To date, we have identified hundreds of claims each month requiring this level of manual intervention. While we recognize that this may not be a direct reflection of how the 340B rebate program will ultimately operate, it represents our main experience with the vendor previously selected to operationalize the program. Based on this we believe our concerns are reasonable and warrant consideration. 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. The process of extracting and reporting Beacons required fields is overly burdensome. Many of the fields required for medical claims are not currently being submitted for any other 340B purpose. For example, the requirement to submit a claims number presents two problematic options. One option is to submit a different number altogether, such as transaction number, and risk future compliance scrutiny. Another option is waiting until the bill is actually processed and submitted. This could cause delays exceeding the 10 days manufacturers are required to pay rebates within. Under our current process, transaction data is submitted directly to our third-party administrator (TPA) to track accumulations. This allows for, at most, a one-day delay between drug administration to the patient and our ability to replenish inventory at the 340B discounted price. Additionally, because we have operated under this model for many years, a sudden change in process would create an immediate and significant cash-flow gap. As mentioned before, covered entities would be required to front substantially higher acquisition costs while awaiting rebate reimbursement, placing further strain on already limited financial resources. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include reduction in funds available for patient assistance programs, such as free discharge medications, or reduced cost copays at our retail and specialty pharmacies, as well as a diminished ability to expand services to meet the rapidly growing needs of our community and affiliated rural critical access hospitals. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. 2003 Kootenai Health Way Coeur dAlene, ID 83814 208.625.4000 tel kh.org A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Kootenai Health 2003 Kootenai Health Way, Coeur dAlene, ID 83814
HRSA-2026-0001-1510Shelly Golden2026-04-15T04:00Z36,318 chars
Please see the attached letter from Hutchinson Health, DSH240187, in regards to HRSA's RFI for 340B rebate model. Hutchinson Health 1095 Highway 15 South Hutchinson, MN 55350 Hutchinson Health 320-234-5000 healthpartners.com April 15, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for Information ("'RFT") regarding a potential 340B rebate model. This letter, submitted respectfully by Hutchinson Health, responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Hutchinson Health and other Covered Entities. As a 340B-participating hospital, Hutchinson Health is a core component of the healthcare safety net in Hutchinson, MN and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Hutchinson Health participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Hutchinson Health's 340B Program participation enables us to commit approximately $7 million dollars per year to the Hutchinson community safety net population we serve. Hutchinson Health also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating Our mission is to improve health and well-being in partnership with our members, patients and community. April 15, 2026 Page 2 manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Hutchinson Health wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUnDaMENTaL QUEsTioNS PrEsENTeD BY Any 340B REBAtE MoDEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of Hutchinson Health submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH HUTCHINSON HEALTH'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug. 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 15, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed it-to Hutchinson Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval, 5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Hutchinson Health when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2.HOW COULD HRSA OR HUTCHINSON HEALTH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Hutchinson Health. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by $12M in the past 6 years, directly limiting the extent to which we can support our community. Yet, somehow, this isn't enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have demanded that we disclose patients' protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patient's protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 202 7). 7 Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (2001). April 15, 2026 Page 4 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO HUTCHINSON HEALTH TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Hutchinson Health would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide["8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entity's contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Hutchinson Health has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. $ 42 U.S.C. 256b(a)(1). April 15, 2026 Page 5 Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entity's interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documented-consideration. 6.WHAT STATUTE OR REGULATION PERMITS HUTCHINSON HEALTH TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE HUTCHINSON HEALTH'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF HUTCHINSON HEALTH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE HUTCHINSON HEALTH FOR THE VALUE OF ITS DATA? One of Hutchinson Health's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.10 Manufacturers openly use the data to deny commercial 9See 45 C.F.R. 160.103. Bvall aDce re tyaical for PHRMA. adic April 15, 2026 Page 6 PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Hutchinson Health for that value? Isn't this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? Hutchinson Health believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Hutchinson Health urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9.WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Hutchinson Health's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Hutchinson Health's patient population, we serve many other patients, including patients with no April 15, 2026 Page 7 coverage at all. Requiring Hutchinson Health to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO HUTCHINSON HEALTH? IF NOT, WHY NOT? As noted above, Hutchinson Health firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Hutchinson Health continues to experience manufacturer restrictions on 340B pricing for our contract pharmacies regardless of the fact that we have a contract pharmacy protection law in the state of Minnesota. An additional challenge we face is manufacturers' continuous changes to their contract pharmacy policies. Manufacturers are often not transparent with these changes nor do they communicate them to us timely. Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Hutchinson Health urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. April 15, 2026 Page 8 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON HUTCHINSON HEALTH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Hutchinson Healthto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustment-not payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Hutchinson Health has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of 11 See 45 C.F.R. 164.501. April 15, 2026 Page 9 audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers' noncompliance rate so high, Hutchinson Health is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Hutchinson Health hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Hutchinson Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. ReSPoNSES TO HRSA's ReQueST fOR InforMATION 1.COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Hutchinson Health maintains auditable purchasing 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 15, 2026 Page 10 records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Hutchinson Health has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Hutchinson Health partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Hutchinson Health utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Hutchinson Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Hutchinson Health is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. April 15, 2026 Page 11 d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, the time and resources needed (personnel and financial) are difficult to estimate. We know for certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Hutchinson Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Hutchinson Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. As a covered entity in the state of Minnesota, we are required to pay Minnesota Care Tax (2% of acquisition cost) on all purchased medications. If a rebate model goes into effect and we are required to pay WAC upfront, our tax expense will increase significantly. This increased expense is not factored into the 340B rebate we would receive and further reduces 340B benefit which ultimately impacts patient access to care. 2REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate April 15, 2026 Page 12 submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent - and realistic - mechanism for resolving disputes. Without these safeguards, Hutchinson Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3.DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Hutchinson Health would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Hutchinson Health's operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Hutchinson Health and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards. Nathan Pulseher, President, Hutchinson Health April 15, 2026 age 13 Appendix: Summary of Hrsa's Audits of Drug Manufacturers HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 2020 2021 2022 Clean Audits 2023 Audits with Findings 2024 2025 2026 FINDING: FAILED TO OFFER 34OB PRICE 2018 2019 2020 2021 Manufacturer Did Not Fail to Offer 3408 Price 2022 Manufacturer Failed to Offer 340B 2023 Price 2024 2025 2026 April 15, 2026 age 1 FINDING: OVERCHARGED COVERED ENTITIES 2018 2019 2020 2021 Manufacturer Did Not Overcharge 2022 Covered Entities Manufacturer Overcharged Covered 2023 Entities 2024 2025 2026 FINDING: FAILED TO SUBMIT PRICING DATA 2018 2019 2020 2021 Manufacturer Submitted Pricing Data 2022 Manuafcturer Failed to Submit 2023 Pricing Data 2024 2025 2026 1 2 April 15, 2026 Page 15 FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 Manufacturer Determined Ceiling Price for New Drugs 2022 Manufacturer Failed to Determine 2023 3408 Ceiling Price for New Drugs 2024 2025 2026
HRSA-2026-0001-1511CAN Community Health, Inc.2026-04-15T04:00Z29,404 chars
Please see the attached response. RFI 340B Rebate Program Pilot Under the traditional 340B model, covered entities purchase drugs at a discounted price upfront, allowing immediate cost savings to support uncompensated care, patient assistance programs, and community health services. The proposed rebate-based mechanism reverses this dynamic: covered entities will pay full wholesale acquisition cost (WAC) or near-commercial pricing at the point of sale, with rebates issued weeks or months later. This shift creates a substantial temporary cash outflow, especially for high-cost specialty medications where a single claim can exceed $5,000 or more. The delay in the discount effectively forces covered entities to act as interest-free lenders to manufacturers, something they are ill-equipped to do. Various covered entities like federal grantees (Ryan White clinics, STD clinics), FQHCs, FQHC-LA, rural clinics, critical access hospitals, and alike that operate with very slim operating margins on average, thus many lack large reserves to absorb temporary liquidity shocks. Paying full WAC without an immediate discount ties up capital that would otherwise fund patient care and essential programs, particularly in underserved communities where these dollars sustain primary care, HIV treatment, and indigent drug coverage. Liquidity shortfalls can lead to delayed payroll, deferred facility updates, reduced charity care, and in several cases, closure of healthcare service lines including pharmacy programs. Ultimately, this undermines the 340B statutes intent to stretch scarce federal resources and expand care to underserved populations. Historical precedent shows payment delays are common, for example, Medicaid drug rebate program and commercial rebate programs already exhibit frequent payment delays, disputes, and reconciliation issues, often extending beyond 90 days. Without enforceable rebate timelines, covered entities face heightened financial risk with no guaranteed recourse. Some considerations or policy recommendations to mitigate cash-flow harm may include the following: (1) Accelerate rebate cycle: require monthly rebate processing (not quarterly) for participants. (2) Interim Payment mechanism: Mandate partial upfront discounts or establish a temporary working capital fund for safety-net providers. (3) Transparency and Penalties: Require manufacturers to report rebate turnaround times and impose penalties for delays beyond 45 days. Are there any additional flexibilities to maximize efficiency and efficacy for participating manufacturers that should be considered in the pilot design? Allow for Covered Entities to opt into an upfront discount hybrid model for certain high-cost drugs to avoid excessive cash-flow strain caused by delayed rebate payments. Prioritize shorter rebate cycles for certain safety-net providers like FQHCs, FQHC- LA, Ryan White clinics, STD Clinics (including Direct and In-Kind), critical access hospitals, rural providers and other Grantees with limited reserves. Create a centralized, standardized rebate portal a single, CMS/HRSA OPA- endorsed electronic rebate submission platform to streamline invoice processing, dispute resolution, and payment reconciliation, reducing duplicative systems across manufacturers, while mandate removal of 340B ESP. Allow for multiple submission options allow for EDI/API feed, SFTP batch files, and portal upload so CEs of all sizes can participate without retooling. Extend the 45-day submission window for documented exceptions (i.e., natural disasters, system downtime, payer reprocessing) and permit automated late true- ups without penalties to reduce manual disputes. This flexibility can help with rolling true-ups and allow for grace periods. Allow for at least 120-days after dispense to accommodate contract pharmacy claim lags and retroactive eligibility corrections. Clear mapping tables should be provided by the manufacturers electing per-unit or per-package rebates, publishing the mapping in the portal to prevent mismatches. This will allow for all key stakeholders like CEs, TPAs, and wholesalers to follow a unified rebate model by NDC. Permit weekly consolidated ACH with remittance files by CE to reduce financial flow delays and reduce banking overhead while still meeting the 10-day turnaround. Institute a sandbox (soft-launch) by providing a test environment and optional 30- day shadow mode before Go-Live to validate claim matching and reconciliation. Offer wholesaler chargeback tracker for sites with mature split-billing so fewer claims need rebate handling. Are there any additional safeguards to mitigate adverse, unintended impacts for covered entities that should be considered in the pilot design? Non-discrimination protections: Explicitly prohibit manufacturers from imposing inventory restrictions, pricing penalties, or limited distribution models on Covered Entities participating in the rebate program. Transparency mandates: Require manufacturers to provide clear rebate calculation methodology so Covered Entities can validate payment accuracy. Continuity of Access for Contract Pharmacies: Mandate manufacturers to lift contract pharmacy restrictions, ensuring the pilot design includes all contract pharmacy claims (NO single contract pharmacy designation), exclusion would disproportionately harm underserved communities. Allow for cash-flow protection with prompt-pay advance or net-7 rebate SLA for Grantees; allow CEs to charge manufacturers interest/credit if the 10-day payment deadline is missed; and no additional fees of any kind to CEs. Provide transparent denials and appeals with standard denial reason codes, mandatory documentation, and a time-boxed appeal path with manufacturer escalation (clear escalation process and contacts) and OPA visibility to keep oversight on manufacturers. Ensure continuity and minimum 99.9% platform uptime, outage bulletins, and a fallback submission channel (secure email or SFTP) so CEs arent penalized if the platform is down. Ensure privacy guardrails by strictly limiting collected fields to those listed, any option fields must be off by default and zero-to-minimal PHI. Lastly, require BAAs and annual security attestations by manufacturers and CEs. No backdoor compliance penalties reaffirming that diversion/duplicate-discount concerns cannot be used to deny rebates, such issues should be routed to audits/ADR only, allowing OPA oversight and authority for Corrective Action Plan. No Patient-cost sharing impact: Safeguard that pilot participation cannot increase patient out-of-pocket costs or create formulary disruption for covered entities patients. Mandate quarterly or semi-annual assessments to determine whether rebate delays or administrative costs are reducing the net benefit for covered entities, with an opt-out provision if harm is demonstrated. Are there any additional data or reporting elements that should be required to improve implementation and evaluation of the pilot? Require public reporting on average rebate processing times and payment completion rates, ensuring accountability. Covered entities should receive detailed reports linking each rebate to a corresponding claim, enabling audit readiness and duplicate discount prevention. Collect and analyze data on drug availability trends, including any reported shortages or shipping delays tied to rebate program participation. Require pilot evaluation to include net benefit analysis for covered entities (rebates received, added admin burden). Allow for dispute resolution transparency by publishing frequency and resolution outcomes of rebate disputes, highlighting systemic issues early. Are there any potential implementation issues not yet sufficiently accounted for in the pilot design (e.g., logistical or administrative burdens)? Moving from upfront discounts to rebate models could significantly delay funds especially for high-cost specialty drugs. Pilot should provide: (1) transitional funding support; and (2) accelerated rebate cycles for critical access providers. Covered entities may require additional staff or third-party vendors for rebate tracking. CMS or HRSA OPA should consider: (1) administrative stipends or grants; (2) pre-approved vendor lists for compliance. Many CEs rely on multiple contract pharmacies; reconciliation across multiple dispensing sites introduces high error risk without robust systems in place or automation. Without a real-time Medicaid carve-in/carve-out modifier, CEs face compliance exposure. The pilot should integrate: (1) State Medicaid rebate system alignment; and (2) shared data repository for verification. Increased data exchange elevates HIPAA and cybersecurity risks, CMS or HRSA OPA should require: (1) standard encryption protocols; and (2) BAAs between all parties. Lack of a standard, time-bound resolution process could delay payments indefinitely, CMS or HRSA OPA should mandate: (1) independent arbitration; and (2) clear escalation timelines. Bottom line: the 340B Rebate Pilot, as currently structured, transfers financial burden and liquidity risk from manufacturers (large, well-capitalized companies) to safety-net providers (resource-constrained entities). Without safeguards, this approach jeopardizes patient access and the viability of critical community health programs. 1. Financial and Cash Flow Impact WAC upfront cost increase: Purchasing at WAC represents an approximate 25% - 40% increase in drug costs making covered entities interest-free lenders. No payor offset: Payors reimburse based on fixed fee schedules. A covered entity paying WAC receives no additional reimbursement to offset the upfront cost increase. The entire WAC premium must be carried as a receivable until rebate payment is received a liquidity burden that falls entirely on the covered entity. High-cost specialty drug exposure: Across a high volume of monthly claims, the aggregate float on specialty drugs alone represents a significant working capital requirement that safety-net providers are not structured to absorb. MFP savings compression: Covered entities will be losing program savings in 2026 on these medications, growing to a larger share in 2027 as more drugs enter negotiation. These losses compound under a rebate model, as reimbursement on negotiated drugs is increasingly indexed to cost reducing margin on both the purchase and the reimbursement side simultaneously. Rebate recovery risk: Covered entities do not have a 100% conformance rate under existing manufacturer ESP data submission requirements. Under a rebate model, this conformance rate would translate directly to denied rebates on a material portion of submitted claims. Generic drug access at risk: Generics and non-specialty medications already produce low to no savings and in some cases loses. CEs continue to capture these medications to ensure patient access. A rebate model that further erodes net savings would force reconsideration of this policy, directly limiting patient access to medications. 2. Staffing Impact Minimum additional FTEs required (base salary, national healthcare averages): Role Est. Annual Salary Type Rebate Reconciliation Analyst $94,000 Permanent Denial Management Specialist $94,000 Permanent Finance and Accounting FTE $76,000 Permanent Total Estimated Annual Salary Burden $264,000 / year Additionally, TPA partners will potentially increase per-claim administrative fees ~1-2% to support rebate submission and reconciliation on behalf of covered entities a material ongoing cost increase applied across high annual claim volumes above current TPA fee levels. 3. Systems and Infrastructure CAN currently manages 340B compliance across 15+ platforms. The following changes would be required under a rebate model, each carrying both one-time and ongoing costs: TPA platforms: All TPA platforms require reconfiguration to support rebate submission workflows. No current TPA platform supports this function. Timeline and cost are vendor- dependent; CAN bears full coordination, testing, and validation burden across all platforms simultaneously. Reporting environments: Full rebuilding of all existing 340B reporting environments for a new net savings calculation, plus development of new environments for rebate tracking at the individual claim level. Estimated internal effort: 34 weeks. Financial systems: Multi-month reconfiguration of wholesaler reconciliation, dispensing fee structures, and medication replenishment workflows to accommodate WAC-based purchasing with delayed rebate recovery. Dual compliance overhead: For drugs remaining under the upfront discount model, all current infrastructure costs continue unchanged. CAN would carry dual compliance overhead simultaneously for the duration of any pilot with no reduction in existing platform, staffing, or reporting costs. 4. Data Collection Cross-system matching risk: CAN currently achieves a 43% conformance rate under existing manufacturer ESP submission requirements, reflecting the structural difficulty of matching claims across multiple TPAs, EMR systems, and pharmacy relationships. Under a rebate model, this conformance rate determines rebate payment making data matching a direct financial risk rather than a compliance metric. 5. Implementation Risks Policy and legal review: All 340B compliance policies require revision before go-live. Legal review of wholesaler contract amendments (Cardinal Health, McKesson), payment terms, and manufacturer rebate agreement structures is required current contracts are built around upfront discount pricing and do not contemplate WAC-plus-rebate arrangements. HRSA audit continuity: CAN has undergone 11 HRSA audits with 10 resulting in zero findings. The eleventh remains outstanding but we anticipate a similar result. Running parallel upfront discount and rebate compliance tracks simultaneously would fragment documentation, increase audit complexity, and materially increase the burden of audit preparation and response. Compounding backlog risk: If rebates are not received before the next month's claims are due for review, reconciliation cycles begin stacking. With a structural 23 month audit backlog already present, the addition of rebate reconciliation and denial management would create an unmanageable compounding workload without the new FTEs described above. RFI 340B Rebate Program Pilot Under the traditional 340B model, covered entities purchase drugs at a discounted price upfront, allowing immediate cost savings to support uncompensated care, patient assistance programs, and community health services. The proposed rebate-based mechanism reverses this dynamic: covered entities will pay full wholesale acquisition cost (WAC) or near-commercial pricing at the point of sale, with rebates issued weeks or months later. This shift creates a substantial temporary cash outflow, especially for high-cost specialty medications where a single claim can exceed $5,000 or more. The delay in the discount effectively forces covered entities to act as interest-free lenders to manufacturers, something they are ill-equipped to do. Various covered entities like federal grantees (Ryan White clinics, STD clinics), FQHCs, FQHC-LA, rural clinics, critical access hospitals, and alike that operate with very slim operating margins on average, thus many lack large reserves to absorb temporary liquidity shocks. Paying full WAC without an immediate discount ties up capital that would otherwise fund patient care and essential programs, particularly in underserved communities where these dollars sustain primary care, HIV treatment, and indigent drug coverage. Liquidity shortfalls can lead to delayed payroll, deferred facility updates, reduced charity care, and in several cases, closure of healthcare service lines including pharmacy programs. Ultimately, this undermines the 340B statutes intent to stretch scarce federal resources and expand care to underserved populations. Historical precedent shows payment delays are common, for example, Medicaid drug rebate program and commercial rebate programs already exhibit frequent payment delays, disputes, and reconciliation issues, often extending beyond 90 days. Without enforceable rebate timelines, covered entities face heightened financial risk with no guaranteed recourse. Some considerations or policy recommendations to mitigate cash-flow harm may include the following: (1) Accelerate rebate cycle: require monthly rebate processing (not quarterly) for participants. (2) Interim Payment mechanism: Mandate partial upfront discounts or establish a temporary working capital fund for safety-net providers. (3) Transparency and Penalties: Require manufacturers to report rebate turnaround times and impose penalties for delays beyond 45 days. Are there any additional flexibilities to maximize efficiency and efficacy for participating manufacturers that should be considered in the pilot design? Allow for Covered Entities to opt into an upfront discount hybrid model for certain high-cost drugs to avoid excessive cash-flow strain caused by delayed rebate payments. Prioritize shorter rebate cycles for certain safety-net providers like FQHCs, FQHC- LA, Ryan White clinics, STD Clinics (including Direct and In-Kind), critical access hospitals, rural providers and other Grantees with limited reserves. Create a centralized, standardized rebate portal a single, CMS/HRSA OPA- endorsed electronic rebate submission platform to streamline invoice processing, dispute resolution, and payment reconciliation, reducing duplicative systems across manufacturers, while mandate removal of 340B ESP. Allow for multiple submission options allow for EDI/API feed, SFTP batch files, and portal upload so CEs of all sizes can participate without retooling. Extend the 45-day submission window for documented exceptions (i.e., natural disasters, system downtime, payer reprocessing) and permit automated late true- ups without penalties to reduce manual disputes. This flexibility can help with rolling true-ups and allow for grace periods. Allow for at least 120-days after dispense to accommodate contract pharmacy claim lags and retroactive eligibility corrections. Clear mapping tables should be provided by the manufacturers electing per-unit or per-package rebates, publishing the mapping in the portal to prevent mismatches. This will allow for all key stakeholders like CEs, TPAs, and wholesalers to follow a unified rebate model by NDC. Permit weekly consolidated ACH with remittance files by CE to reduce financial flow delays and reduce banking overhead while still meeting the 10-day turnaround. Institute a sandbox (soft-launch) by providing a test environment and optional 30- day shadow mode before Go-Live to validate claim matching and reconciliation. Offer wholesaler chargeback tracker for sites with mature split-billing so fewer claims need rebate handling. Are there any additional safeguards to mitigate adverse, unintended impacts for covered entities that should be considered in the pilot design? Non-discrimination protections: Explicitly prohibit manufacturers from imposing inventory restrictions, pricing penalties, or limited distribution models on Covered Entities participating in the rebate program. Transparency mandates: Require manufacturers to provide clear rebate calculation methodology so Covered Entities can validate payment accuracy. Continuity of Access for Contract Pharmacies: Mandate manufacturers to lift contract pharmacy restrictions, ensuring the pilot design includes all contract pharmacy claims (NO single contract pharmacy designation), exclusion would disproportionately harm underserved communities. Allow for cash-flow protection with prompt-pay advance or net-7 rebate SLA for Grantees; allow CEs to charge manufacturers interest/credit if the 10-day payment deadline is missed; and no additional fees of any kind to CEs. Provide transparent denials and appeals with standard denial reason codes, mandatory documentation, and a time-boxed appeal path with manufacturer escalation (clear escalation process and contacts) and OPA visibility to keep oversight on manufacturers. Ensure continuity and minimum 99.9% platform uptime, outage bulletins, and a fallback submission channel (secure email or SFTP) so CEs arent penalized if the platform is down. Ensure privacy guardrails by strictly limiting collected fields to those listed, any option fields must be off by default and zero-to-minimal PHI. Lastly, require BAAs and annual security attestations by manufacturers and CEs. No backdoor compliance penalties reaffirming that diversion/duplicate-discount concerns cannot be used to deny rebates, such issues should be routed to audits/ADR only, allowing OPA oversight and authority for Corrective Action Plan. No Patient-cost sharing impact: Safeguard that pilot participation cannot increase patient out-of-pocket costs or create formulary disruption for covered entities patients. Mandate quarterly or semi-annual assessments to determine whether rebate delays or administrative costs are reducing the net benefit for covered entities, with an opt-out provision if harm is demonstrated. Are there any additional data or reporting elements that should be required to improve implementation and evaluation of the pilot? Require public reporting on average rebate processing times and payment completion rates, ensuring accountability. Covered entities should receive detailed reports linking each rebate to a corresponding claim, enabling audit readiness and duplicate discount prevention. Collect and analyze data on drug availability trends, including any reported shortages or shipping delays tied to rebate program participation. Require pilot evaluation to include net benefit analysis for covered entities (rebates received, added admin burden). Allow for dispute resolution transparency by publishing frequency and resolution outcomes of rebate disputes, highlighting systemic issues early. Are there any potential implementation issues not yet sufficiently accounted for in the pilot design (e.g., logistical or administrative burdens)? Moving from upfront discounts to rebate models could significantly delay funds especially for high-cost specialty drugs. Pilot should provide: (1) transitional funding support; and (2) accelerated rebate cycles for critical access providers. Covered entities may require additional staff or third-party vendors for rebate tracking. CMS or HRSA OPA should consider: (1) administrative stipends or grants; (2) pre-approved vendor lists for compliance. Many CEs rely on multiple contract pharmacies; reconciliation across multiple dispensing sites introduces high error risk without robust systems in place or automation. Without a real-time Medicaid carve-in/carve-out modifier, CEs face compliance exposure. The pilot should integrate: (1) State Medicaid rebate system alignment; and (2) shared data repository for verification. Increased data exchange elevates HIPAA and cybersecurity risks, CMS or HRSA OPA should require: (1) standard encryption protocols; and (2) BAAs between all parties. Lack of a standard, time-bound resolution process could delay payments indefinitely, CMS or HRSA OPA should mandate: (1) independent arbitration; and (2) clear escalation timelines. Bottom line: the 340B Rebate Pilot, as currently structured, transfers financial burden and liquidity risk from manufacturers (large, well-capitalized companies) to safety-net providers (resource-constrained entities). Without safeguards, this approach jeopardizes patient access and the viability of critical community health programs. 1. Financial and Cash Flow Impact WAC upfront cost increase: Purchasing at WAC represents an approximate 25% - 40% increase in drug costs making covered entities interest-free lenders. No payor offset: Payors reimburse based on fixed fee schedules. A covered entity paying WAC receives no additional reimbursement to offset the upfront cost increase. The entire WAC premium must be carried as a receivable until rebate payment is received a liquidity burden that falls entirely on the covered entity. High-cost specialty drug exposure: Across a high volume of monthly claims, the aggregate float on specialty drugs alone represents a significant working capital requirement that safety-net providers are not structured to absorb. MFP savings compression: Covered entities will be losing program savings in 2026 on these medications, growing to a larger share in 2027 as more drugs enter negotiation. These losses compound under a rebate model, as reimbursement on negotiated drugs is increasingly indexed to cost reducing margin on both the purchase and the reimbursement side simultaneously. Rebate recovery risk: Covered entities do not have a 100% conformance rate under existing manufacturer ESP data submission requirements. Under a rebate model, this conformance rate would translate directly to denied rebates on a material portion of submitted claims. Generic drug access at risk: Generics and non-specialty medications already produce low to no savings and in some cases loses. CEs continue to capture these medications to ensure patient access. A rebate model that further erodes net savings would force reconsideration of this policy, directly limiting patient access to medications. 2. Staffing Impact Minimum additional FTEs required (base salary, national healthcare averages): Role Est. Annual Salary Type Rebate Reconciliation Analyst $94,000 Permanent Denial Management Specialist $94,000 Permanent Finance and Accounting FTE $76,000 Permanent Total Estimated Annual Salary Burden $264,000 / year Additionally, TPA partners will potentially increase per-claim administrative fees ~1-2% to support rebate submission and reconciliation on behalf of covered entities a material ongoing cost increase applied across high annual claim volumes above current TPA fee levels. 3. Systems and Infrastructure CAN currently manages 340B compliance across 15+ platforms. The following changes would be required under a rebate model, each carrying both one-time and ongoing costs: TPA platforms: All TPA platforms require reconfiguration to support rebate submission workflows. No current TPA platform supports this function. Timeline and cost are vendor- dependent; CAN bears full coordination, testing, and validation burden across all platforms simultaneously. Reporting environments: Full rebuilding of all existing 340B reporting environments for a new net savings calculation, plus development of new environments for rebate tracking at the individual claim level. Estimated internal effort: 34 weeks. Financial systems: Multi-month reconfiguration of wholesaler reconciliation, dispensing fee structures, and medication replenishment workflows to accommodate WAC-based purchasing with delayed rebate recovery. Dual compliance overhead: For drugs remaining under the upfront discount model, all current infrastructure costs continue unchanged. CAN would carry dual compliance overhead simultaneously for the duration of any pilot with no reduction in existing platform, staffing, or reporting costs. 4. Data Collection Cross-system matching risk: CAN currently achieves a 43% conformance rate under existing manufacturer ESP submission requirements, reflecting the structural difficulty of matching claims across multiple TPAs, EMR systems, and pharmacy relationships. Under a rebate model, this conformance rate determines rebate payment making data matching a direct financial risk rather than a compliance metric. 5. Implementation Risks Policy and legal review: All 340B compliance policies require revision before go-live. Legal review of wholesaler contract amendments (Cardinal Health, McKesson), payment terms, and manufacturer rebate agreement structures is required current contracts are built around upfront discount pricing and do not contemplate WAC-plus-rebate arrangements. HRSA audit continuity: CAN has undergone 11 HRSA audits with 10 resulting in zero findings. The eleventh remains outstanding but we anticipate a similar result. Running parallel upfront discount and rebate compliance tracks simultaneously would fragment documentation, increase audit complexity, and materially increase the burden of audit preparation and response. Compounding backlog risk: If rebates are not received before the next month's claims are due for review, reconciliation cycles begin stacking. With a structural 23 month audit backlog already present, the addition of rebate reconciliation and denial management would create an unmanageable compounding workload without the new FTEs described above.
HRSA-2026-0001-1512Shelly Golden2026-04-15T04:00Z35,893 chars
Please see the attached letter from HealthPartners RC dba Olivia Hospital & Clinic, CAH241306, in regards to HRSA's RFI for 340B rebate model. Olivia Hospital & Clinic 100 Healthy Way Olivia Hospital & Clinic Olivia, MN 56277 800-916-1836 heaithpartners.com April 15, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for Information ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by HealthPartners RC dba Olivia Hospital & Clinic (Olivia), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Olivia and other Covered Entities. As a 340B-participating hospital, Olivia is a core component of the healthcare safety net in Olivia, MN and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Olivia participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Olivia's 340B Program participation enables us to commit an additional $1.5 million dollars per year to the Olivia community safety net population we serve. Olivia also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Our mission is to improve health and wel-being in partnership with our members, patients and community. April 15, 2026 Page 2 Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Olivia wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDaMENTaL QUESTIOnS PrEsENTED BY Ay 340B REBAtE MODEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of Olivia submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1.WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH OLIVIA'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 191 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 15, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Olivia and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval,5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Olivia when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2.HOW COULD HRSA OR OLIVIA TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Olivia. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by $4M in the past 6 years, directly limiting the extent to which we can support our community. Yet, somehow, this isn't enough for the manufacturers or, apparently, HHS and HRSA OPA." Manufacturers have demanded that we disclose patients' protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patient's protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 202 7). 7 Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (2001). April 15, 2026 Page 4 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO OLIVIA TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Olivia would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entity's contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Olivia has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. 8 42 U.S.C. 256b(a)(1). April 15, 2026 Page 5 Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entity's interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documented--consideration. 6.WHAT STATUTE OR REGULATION PERMITS OLIVIA TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7.WOULD DRUG MANUFACTURERS BE PERMITTED TO USE OLIVIA'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF OLIVIA? IF SO, WILL MAX P ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE OLIVIA FOR THE VALUE OF ITS DATA? One of Olivia's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.10 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. 9See 45 C.F.R. 160.103. By all appearances, Berkeiey Research Group feels it is be er to hide the fact that PhiRMA pays re typical for PhiRMA as HRSA should be aware, For an exarnple of BRG's use of S -called H document ent-Activity_2024.pc April 15, 2026 Page 6 Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Olivia for that value? Isn't this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? Olivia believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Olivia urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Olivia's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Olivia's patient population, we serve many other patients, including patients with no coverage at all. Requiring Olivia to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping April 15, 2026 Page 7 expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO OLIVIA? IF NOT, WHY NOT? As noted above, Olivia firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address which they will have little incentive to do. Olivia continues to experience manufacturer restrictions on 340B pricing for our contract pharmacies regardless of the fact that we have a contract pharmacy protection law in the state of Minnesota. An additional challenge we face is manufacturers' continuous changes to their contract pharmacy policies. Manufacturers are often not transparent with these changes nor do they communicate them to us timely. Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Olivia urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON OLIVIA? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Oliviato use April 15, 2026 Page 8 Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Olivia has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers' noncompliance rate so high, Olivia is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for 11See 45 C.F.R. 164.501. 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 15, 2026 Page 9 HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Olivia hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concems. Olivia encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. ReSPONSES TO HRSA's ReQueST fOR InfoRMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Olivia maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Olivia has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Olivia partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 15, 2026 Page 10 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Olivia utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Olivia to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Olivia is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, April 15, 2026 Page 11 the time and resources needed (personnel and financial) are difficult to estimate. We know for certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Olivia purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Olivia could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. As a covered entity in the state of Minnesota, we are required to pay Minnesota Care Tax (2% of acquisition cost) on all purchased medications. If a rebate model goes into effect and we are required to pay WAC upfront, our tax expense will increase significantly. This increased expense is not factored into the 340B rebate we would receive and further reduces 340B benefit which ultimately impacts patient access to care. 2REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Olivia will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. April 15, 2026 Page 12 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Olivia would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Olivia's operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Olivia and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety net-and the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Nathan Pulscher, Central MN Executive Leader, Olivia Hospital April 15, 2026 Pae 13 Appendix: Summary of Hrsa's Audits of Drug Manufacturers HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 2020 2021 2022 Clean Audits 2023 Audits with Findings 2024 2025 2026 FINDING: FAILEDTO OFFER 340B PRICE 2018 2019 2020 2021 Manufacturer Did Not Fail to Offer 340B Price 2022 Manufacturer Failed to Offer 340B 2023 Price 2024 2025 2026 April 15, 2026 PPage 14 FINDING: OVERCHARGED COVERED ENTITIES 2018 2019 2020 2021 Manufacturer Did Not Overcharge 2022 Covered Entities Manufacturer Overcharged Covered 2023 Entities 2024 2025 2026 FINDING: FAILED TO SUBMIT PRICING DATA 2018 2019 2020 2021 Manufacturer Submitted Pricing Data 2022 Manuafcturer Failed to Submit 2023 Pricing Data 2024 2025 2026 April 15, 2026 Page 15 FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 Manufacturer Determined Ceiling Price for New Drugs 2022 Manufacturer Failed to Determine 2023 340B Ceiling Price for New Drugs 2024 2025 2026
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Comment from Mercy Medical Center in Durango, CO Mercy Regional Medical Center 1010 Three Springs Boulevard Durango, CO 81301 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Mercy Regional Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Mercy Hospital is an 82-bed acute-care hospital in Durango, Colorado. Mercy Hospital was founded in 1882 but has grown to become Southwest Colorado's largest and most technologically advanced medical facility and serves the four corner region. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Regional Medical Center that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Regional Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Josh Neff Hospital President Mercy Regional Medical Center, Durango CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
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Please see the attached letter on behalf of UMC El Paso regarding the Request for Information: 340B Rebate Model Pilot Program. 4815 Alameda Avenue El Paso, Texas 79905 T: 915.544.1200 www.umcelpaso.org April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: The El Paso County Hospital District d/b/a University Medical Center of El Paso (UMC El Paso) appreciates the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. We are an essential hospital and depend on 340B savings to advance the programs statutory goals of expanding access to comprehensive services to our community.1 We urge HRSA to consider the cost of rebate models on essential hospitals like ours and not move forward with a rebate model or related pilot program given they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. UMC El Paso is a public health system located in El Paso, Texas that sees over a million outpatient visits a year. The 340B program enables our hospital to maintain access to essential medications and sustain services for vulnerable patients across our region. Because of 340B savings, we can support items like our HealthCare Options program (County Indigent Program) to our low income and uninsured patients which affords them medications for $8 copays (even then, if a patient is unable to afford the $8, the medication is provided free of charge). Our Pharmacy team assists with the administration and medication dispensing for this program. Additionally, we offer cost-plus dispensing for qualified 340B patients with Charity Care/Self-pay financial assistance. It is worth noting that our 340B program was fully audited by HRSA approximately two years ago with no findings. The Rebate Pilot would jeopardize funds for indigent self-pay programs and other hospital assistance programs that are important to our patient population. The shifts in cost to the pharmacy department would reduce patient account discounts for inpatient operations. Further, the Rebate Pilot will potentially eliminate current pharmacy services and limit service expansions, such as mail-order medications, same-day delivery, community health drives, and vaccinations due to staff realignment for chart auditing and other rebate requirements. 1 H.R. REP. 102-384(II), p. 12. Page 2 of 4 April 15, 2026 RE: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Shifting the 340B program to a rebate model would cut savings and reduce benefits for El Pasos low- income and uninsured residents. These individuals rely on 340B for low-cost, essential medications. To address this need, UMC El Paso filled over 570,000 prescriptions through the 340B program (includes all 340B medications filled in the retail setting) last year. We appreciate the opportunity to share specific details on how rebate models would affect our ability to serve patients under the 340B pilot program that was stopped by federal courts. We continue to question the legality of allowing rebate models that undermine HRSAs authority and upend 30 years of established precedent for delivering benefits to patients and the health systems that serve them. For additional comments on our legal concerns with rebate models, please refer to comments also submitted by Americas Essential Hospitals. THE FINANCIAL AND OPERATIONAL COSTS OF REBATE MODELS ARE UNSUSTAINABLE As an essential hospital, UMC El Paso operates on thin financial margins and cannot afford the disruptions to our finances that a 340B rebate model would impose. Essential hospitals provide a disproportionate share of uncompensated and under-reimbursed care, and this commitment to underserved communities brings unique financial challenges. In 2023, members of Americas Essential Hospitals had an aggregate operating margin of -7.1%, which was far worse than the aggregate operating margins for all other hospitals (-2.3%).2 Even if rebate models work as intended, they would disrupt our finances by substantially increasing our administrative costs, limiting our hospitals access to 340B subprime discounts, and requiring our hospital to float substantial sums of money to boost pharmaceutical companies profits. If pharmaceutical companies deny rebates for our 340B-eligible patients, we will incur substantial financial constraints. Overall, we estimate that implementing a rebate model will affect our financial stability, resulting in $4 million in monthly cash flow disruptions, $18 million in annual upfront drug costs, and $2 million in losses from claim denials. Additionally, we anticipate $246,000 in new annual staffing expenses and $400,000 in annual increased drug supply costs. ADMINISTRATIVE BURDEN FROM REBATE MODEL IMPLEMENTATION New 340B requirements from manufacturers add substantial administrative costs to the program that divert funding from patient care. Our hospital currently employs zero full-time employees (FTEs) specific to compliance with 340B (yet remain compliant in all regards). We anticipate that a limited rebate pilot, including just the products selected for the Medicare Drug Price Negotiation Selected Drug list, and claims fields included in the initial pilot will necessitate three additional FTEs to manage claims level tracking and submission as well as reconciliation and dispute management. Managing different manufacturer requirements will create significant operational complexity beyond the current 340B system. Hiring additional staff for the rebate pilot would add $246,000 in annual salary costs, at minimum. 2 Miu R, Kelly K, Nelb R. Essential Data 2025: Our Hospitals, Our PatientsResults of Americas Essential Hospitals 2023 Annual Member Characteristics Survey. Americas Essential Hospitals. December 2025. essentialdata.info. Accessed Feb. 23, 2026. Page 3 of 4 April 15, 2026 RE: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Preparing to implement the previously proposed rebate program involved staff coordination across departments, including pharmacy, operations, government relations, and fiscal. This complex coordination necessitated meaningful Pharmacy staff engagement, which we estimate included 30 hours from the Pharmacy Director, 44 hours from the Pharmacy System Analyst, and 15 hours for technician assistance, for a total of 89 hours of staff time, and $5,000 of associated salary costs. LOSS OF SUBCEILING DISCOUNTS By requiring covered entities to purchase drugs at wholesale acquisition costs instead of receiving upfront discounts, rebate models appear to eliminate the possibility for covered entities to access 340B subceiling discounts. The loss of these discounts creates an $18 million annual increase in upfront costs, directly threatening patient access to care. COSTS OF FLOATING FUNDING TO PHARMACEUTICAL COMPANIES By fundamentally changing the nature of the 340B rebate program from a point-of-sale discount to a post- purchase reimbursement system, rebate models would require hospitals to float substantial sums of money to manufacturers, which would reduce our cash on hand and the interest income that it could have generated. This policy allows manufacturers to generate interest from money owed to safety net providers, rather than allowing those monies to be held by our health system. UMC El Paso estimates that this policy would reduce our cash on hand by $4 million per month. The proposed rule would result in an estimated reduction of approximately 2 days cash on hand. This deterioration in liquidity and operating revenue would meaningfully constrain our systems ability to fund planned capital infrastructure investments and maintain operational flexibility. A reduction of this magnitude introduces financial uncertainty that could delay medical equipment procurement and workforce investments necessary to sustain patient care delivery. ADDED COSTS FOR MAINTAINING AN ADEQUATE SUPPLY OF DRUGS PATIENT NEED The 340B program is currently designed to provide up-front discounts, which help hospitals ensure an adequate supply of drugs to meet their patients need. Ensuring an adequate supply of drugs is important for responding to emergencies and meeting the needs of patients with complex care needs. However, under a rebate model, hospitals would lose access to 340B pricing for stockpiled drugs that are not able to be used because of the everyday realities of patient care. Assuming a 2% rate of purchased drugs that cannot be used, we estimate added costs of $400,000 for our system. The costs of this policy will fall on patients with rare diseases and complex care needs who already have challenges accessing the care they need. High-cost drugs for specialty services like rheumatology, infectious disease, dermatology, and neurology could be negatively impacted. Oncology medications purchased at 340B pricing, affords us the ability to stretch our budget without raising out-of-pocket costs to qualified patients- therefore enabling us to treat more patients. Loss of 340B savings limits the number of patients to be treated and will increase medication costs, putting some treatment options out of reach for many patients. POTENTIAL COSTS OF INAPPROPRIATELY DENIED OR SIGNIFICANTLY DELAYED REBATE We must also assume that some percentage of claims will be inappropriately denied; fighting and resolving these denials will involve significant capital outlay. Using a conservative estimate that 10% of claims will be denied, we estimate a $2 million loss in revenue. This does not include the tireless work our pharmacy team has encountered with CMSs Maximum Fair Price Program which has resulted in 40% of claims that Page 4 of 4 April 15, 2026 RE: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program must be disputed. Should 40% of claims be disputed or denied in the 340B rebate program, then the loss could go up to $8 million. HRSA has previously acknowledged the likely challenge of delayed or denied rebates but has not proposed efficient and enforceable methods to address these issues. HRSAs previously issued FAQ indicate that, in the event of a dispute, covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue, and only once the parties have failed to find a consensus should the covered entity contact a generic HRSA email. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment when manufacturers are responsible for the failures. POTENTIAL COSTS OF UNAUTHORIZED MANUFACTURER REQUIREMENTS Based on our experience with the pre-implementation of HRSAs rebate pilot, we are concerned that manufacturers will change requirements and impose additional burdens that will add to our administrative costs and compromise our ability to receive the 340B savings that the statute requires. Resources expended navigating manufacturers systems add further administrative burden to the 340B programto the detriment of hospitals that treat a disproportionate share of low-income patients or operate in rural areas. As demonstrated, the 340B program is vital for hospitals like UMC El Paso to sustain essential services and expand access to care. Policies that delay or reduce access to 340B savings will directly affect patient care in our community. We deeply appreciate the opportunity to comment on this RFI. We respectfully encourage HRSA to weigh the tremendous negative impact to the program and respectfully disagree with the implementation of a rebate model for the 340B Drug Pricing Program. Please feel free to contact me with any questions or concerns at (915) 521-7600. Sincerely, R. Jacob Cintron President & CEO University Medical Center of El Paso
HRSA-2026-0001-1515Summit Healthcare2026-04-15T04:00Z9,453 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Summit Healthcare Association, we appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information regarding the proposed 340B Rebate Model Pilot Program. Summit Healthcare Association includes Summit Healthcare Regional Medical Center, specialty clinics, Rural Health Clinics, family practice, orthopedic services, and system-affiliated outpatient services serving a rural and frontier population in northeastern Arizona. Among other things, the RFI asks whether HRSA should implement a rebate model under the 340B program instead of the longstanding upfront discount model. For rural safety-net providers like Summit Healthcare Association, the answer is unequivocally no. The 340B program was established to allow covered entities to stretch scarce federal resources and provide comprehensive services to vulnerable populations. As a Disproportionate Share Hospital (DSH) system with approximately 73% of our patient population covered by Medicare and Medicaid, including Tribal populations and other medically underserved rural residents, Summit Healthcare Association relies on upfront 340B savings to sustain essential healthcare services. A shift to a rebate model would fundamentally undermine this purpose and create significant financial, operational, and patient access risks. Administrative and Operational Burden Under a Rebate Model A rebate model would impose substantial and unsustainable administrative and operational costs on Summit Healthcare Association. Our current 340B infrastructure is designed around the upfront discount model. Transitioning to a rebate system would require new staffing, manual claims tracking, reconciliation processes, dispute resolution workflows, legal review, staff training, and expanded third-party administrator (TPA) coordination. Summit Healthcare would be required to hire at least one full-time business partner, estimated at approximately $96,000 annually, solely to manage rebate submissions, tracking, reconciliation, audit preparation, and manufacturer dispute management. Our existing staff are already operating at full capacity and cannot absorb these additional responsibilities without diverting time away from patient care and essential operations. For a limited pilot drug set, the administrative costs alone would nearly eliminate the financial benefit of the program, demonstrating that a rebate model is economically inefficient and contrary to the statutory intent of the 340B program. Staffing Impacts and Unrealistic Federal Burden Estimates HRSAs prior estimates that rebate compliance would require only a few hours per week are not realistic for a rural health system. Because our TPA does not have a direct automated data feed into our EHR, claims data extraction, validation, formatting, and submission would require significant manual labor across multiple systems, including our EHR, billing platforms, pharmacy dispensing systems, and outpatient records. This process would require daily staff involvement, not weekly oversight, and would necessitate dedicated personnel with specialized 340B and compliance expertise, which are difficult to recruit in rural regions. Systems and Infrastructure Limitations Summit Healthcare Association operates an in-house pharmacy and an outpatient pharmacy that are fully integrated into our rural care delivery model. Our current systems are structured for point-of-sale 340B discounts, not retrospective rebate reconciliation. A rebate model would require: New data extraction tools Manual claims-level reporting infrastructure Expanded data retention and audit systems Additional TPA interfaces and reporting requirements Ongoing IT maintenance and compliance oversight Because these systems are not currently configured for rebate processing, implementation would require significant one-time development costs and ongoing operational expenses. Payment Timing, Cash Flow, and Bond Covenant Risk Summit Healthcare Association is subject to bond covenants that require the organization to maintain specific days cash on hand and liquidity thresholds. A rebate-based 340B model would require the system to purchase high-cost medications at full acquisition cost and then wait for rebate reimbursement, effectively forcing our organization to float substantial drug expenditures for an undefined and potentially extended period of time. This represents a fundamental shift from the current upfront discount structure that preserves liquidity and supports stable rural health system operations. Because we must maintain contractual liquidity ratios, delayed rebate payments would materially reduce our days cash on hand and create a credible risk of bond covenant non-compliance. Even short reimbursement delays could negatively impact required financial ratios and place our system in a financially vulnerable position. As a rural DSH healthcare system operating on thin margins and limited unrestricted cash reserves, Summit Healthcare Association does not have the financial flexibility of large urban systems to function as a financing mechanism for pharmaceutical manufacturers while awaiting rebates. Requiring rural hospitals to front millions of dollars in drug purchasing costs would function as an interest-free loan to manufacturers and directly reduce funds available for patient care and essential services. Impact on Access to Medications, Oncology, and IV Therapy Services Summit Healthcare Association provides critical rural access to oncology and stroke treatments, IV therapy services, specialty medications, and hospital-based pharmaceutical care through our in-house and outpatient pharmacies. These services are essential in a geographically isolated region where alternative providers may be hours away. A rebate model would create significant barriers to stocking and administering high-cost specialty and oncology medications. If required to pay full price upfront while awaiting delayed rebates, our system may be forced to limit inventory of certain high-cost therapies due to cash flow constraints. This would directly delay or restrict access to life-saving treatments for rural patients who already face transportation barriers, provider shortages, and limited specialty care availability. Any disruption to 340B savings would disproportionately impact patients requiring infusion therapies, oncology and stroke medications, and specialty pharmaceuticals that are financially unsustainable without upfront discounts. Impact on Rural, Tribal, and Vulnerable Populations Summit Healthcare Association serves a patient population that is approximately 73% Medicare and Medicaid, including Tribal populations and other medically underserved rural residents. As the primary regional healthcare provider, our hospital, Rural Health Clinics, and specialty clinics deliver essential services that are not otherwise locally available. If 340B savings are reduced due to administrative costs, cash flow strain, or delayed rebate reimbursement, rural patients may be forced to travel significant distances (2 to 4 hours) for specialty medications, oncology and stroke care, IV therapy, and hospital services. This would exacerbate existing health disparities and reduce access to timely care in a frontier region. Reliance on the Upfront 340B Discount Model Summit Healthcare Associations financial planning, pharmacy operations, medication access programs, capital planning, and service sustainability models are built upon the longstanding upfront discount structure of the 340B program. These savings support hospital operations, Rural Health Clinics, specialty services, pharmacy access, and care for high proportions of Medicare, Medicaid, and Tribal patients. A sudden transition to a rebate model would disrupt established reliance interests, destabilize financial planning, and threaten the sustainability of essential rural healthcare infrastructure. Conclusion For all of these reasons, Summit Healthcare Association respectfully urges HRSA to reject the implementation of a 340B rebate model pilot program. The proposed rebate structure would impose excessive administrative burdens, create significant cash flow instability, increase the risk of bond covenant non-compliance, and directly threaten access to oncology, stroke, IV therapy, specialty medications, and essential hospital services in a rural and medically underserved region. The current upfront discount model has functioned effectively for decades and remains the most appropriate mechanism to ensure that covered entities can stretch scarce federal resources and provide comprehensive care to vulnerable populations. We appreciate the opportunity to provide comments on this critical issue and respectfully request that HRSA preserve the existing 340B upfront discount framework to protect rural hospitals and the patients we serve. Sincerely, William Gardner, MSN, MBA, HCM, RN Chief Executive Officer Summit Healthcare Association
HRSA-2026-0001-1516Colin Esper · Sierra Vista, AZ, United States2026-04-15T04:00Z129,207 chars
In my role as a Pharmacy Technician Home Delivery Driver, whose delivery program is subsidized ENTIRELY by the savings we receive from the 340B program, it is extremely likely that if both this pilot and program (rebates instead of up front discounts) go through, not only would I lose my job and livelihood, but many of the patients I interact with every day would likely have to go without their medications. These patients are incapable of picking up their medications, and many of our patients cannot afford to get medications at any other facility. We also use the savings provided by the 340B program to subsidize medication costs for patients who, even with the maximum government assistance possible, still cannot afford their medications. Both our staff and patients will suffer irreparable harm from this change, and I implore you to rethink this before going forward. Receiving upfront discounts on 340B medications is CRUCIAL to ensuring patients in rural communities maintain their health. Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chiricahua Community Health Centers, Inc. (Chiricahua), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Should the proposed rebate model be approved, Chiricahua projects a $500,000 loss from entity-owned pharmacy operations in the coming year, with projected losses increasing annually to approximately $1 million in lost 340B savings in 2028. Projected Cost Increases: The proposed rebate model would significantly impact pharmacy operational costs. Chiricahua expects to incur more than $6.1 million in additional annual costs, driven primarily by the substantially higher up-front cost of medication acquisition required under the proposed model, along with associated inventory financing and cash flow impacts. These projected impacts are especially concerning for CHCs serving rural, medically underserved regionswhere 340B savings are not optional but essential for maintaining access to care. Cochise County is designated as a Health Professional Shortage Area for medical, mental health, and dental services. Chiricahua is the countys only Federally Qualified Health Center, serving a region in southeastern Arizona roughly the size of Connecticut and Rhode Island combined and spanning one hundred miles of the U.S.Mexico border. Geographic isolation and widespread poverty make preventive and primary care delivery particularly complex. In 2025, Chiricahua cared for 33,472 individuals and dispensed 214,457 340B prescriptions to eligible patientsreaching more than one quarter of the countys residents. Twenty-two percent of those served lived below the federal poverty level. The health needs of Cochise County further illustrate the degree to which our communities rely on stable, predictable access to care. Rural residents experience higher rates of chronic illness and domestic violence, driven by social isolation, transportation barriers, and limited employment opportunities. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Insurance coverage remains a significant indicator of access: in Cochise County, 11.2% of adults and 9.3% of children are uninsured. Rates of diabetes, obesity, and drug overdose all exceed statewide averages. Fourteen percent of residents reported experiencing at least 14 days per month of poor physical health, and 15% reported the same for mental health. Taken together, these conditions underscore the severity of local need and the indispensable role of safety net programs. Overall, an estimated 16.3% of county residents live below the federal poverty thresholdrising to 19.6% among childrenhighlighting the critical importance of stable, accessible health services in this region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Chiricahua uses its 340B savings to subsidize a range of critical clinical and enabling services that are either under-reimbursed or not reimbursed at all, thereby expanding access and improving care for underserved patients. These savings support Care Management services for Medicare beneficiaries, Pediatric services that are otherwise funded through time-limited grants, and Care Management staffing levels that have already been reduced but are being maintained at the current level despite reimbursement pressures. Chiricahua also applies 340B savings to address Social Determinants of Health, sustain Dental serviceswithout the 340B savings adult dental patients would have to be significantly limited and support clinical pharmacy services that are not independently reimbursed. Additional uses include Diabetes Self-Management Training across all payers, and pharmacy home delivery and mail-order programs that improve medication, access and adherence without generating additional reimbursement. Finally, 340B savings help fund vital support services such as Domestic Violence staff, ensuring that Chiricahua can continue providing comprehensive, patient-centered care consistent with its mission to serve vulnerable populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Chiricahua Community Health Centers, Inc., provided $5,329,078.81 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Chiricahua Community Health Centers, Inc., anticipates needing 2.4 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Chiricahua Community Health Centers, Inc., anticipates an increase of $6,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At Chiricahua, the estimated annual cost to hire additional staff is approximately $ 168,480 and projected upfront drug acquisition cost increases exceeding $6 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Chiricahua urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate significant upfront expenses to modify our pharmacy software, implement custom dashboard enhancements, and design new internal workflows. An estimated $73,478.32 will be required simply to establish baseline compliance before a single rebate is received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 69 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Cochise County, Arizona with no affordable 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Building on this framework, Chiricahua offers a sliding fee discount on medications, including insulin and injectable epinephrine, by providing eligible patients access to these medications at no more than Chiricahuas 340B acquisition cost plus a small administration fee. This discounted pricing is available to patients who meet defined financial need requirements. Eligibility is determined through Chiricahuas Sliding Fee Discount Program (SFDP), and any patient approved for medical or dental sliding fee status automatically receives the corresponding pharmacy discount level. To remain compliant with federal 340B requirements, patients must be established with Chiricahua and meet all elements of the 340B patient definition. Once qualified, patients pay the lowest applicable amount: either their insurance copay or the discounted sliding fee price. The SFDP then supports the patient when financial need is present, ensuring that cost never exceeds the 340B price plus the nominal fee. Chiricahua provides these reduced-cost medications through its inhouse pharmacies, using standardized and compliant procedures so that all eligible patients have consistent access to discounted insulin and injectable epinephrine. This structure ensures that Chiricahua can fulfill both its mission and federal obligations while maintaining affordability for patients. CHCs rely on wholesaler price files to determine drug acquisition costs and to calculate patient discounts in real time. However, pharmacy software systems are not designed to support manually added price files, particularly within a single inventory category. When new wholesaler price files are loaded, the system automatically overwrites any manually entered 340B pricing. Under a rebate model, the wholesaler file would reflect WAC rather than the 340B ceiling price, removing the operational ability to determine an accurate discounted patient price at the point of sale. This gap forces CHCs to estimate patient discounts without knowing whetheror whena rebate will be paid, exposing them to financial risk if rebates are delayed or denied and compromising their ability to meet federally required sliding-fee obligations. In addition to the pricing uncertainty, CHCs are deeply concerned about the cash-flow implications of having to purchase medications at full WAC. Paying WAC upfront increases the likelihood that CHCs will approach or exceed wholesaler credit limits, at which point the ability to order medications may be halted until outstanding balances are resolved. Although rebate payments are expected to arrive approximately 10 days after data submission, earlier versions of the rebate pilot allowed up to 45 days for covered entities to submit data. This means the total lag from dispensing the medication to receiving the rebate could reach 55 days. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The financial strain is even more pronounced for CHCs that operate entity-owned pharmacies with physical inventories. Because these pharmacies must stock shelves at WAC, the delay between purchase and rebate directly affects operational liquidity. Retail pharmacies typically turn inventory every 30 days. Even assuming a faster-than-average 15-day inventory turnover, CHC pharmacies could face a 70- to 85-day gap between purchase and rebate under a 45-day submission window. Anecdotal feedback from CHC pharmacies suggests plans for a 14-day reporting cadence for entity-owned inventory. Even under this more frequent submission schedule, the expected purchase-to-rebate time frame remains 40 to 55 dayslong enough to create significant and ongoing cash-flow challenges. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on organizational data, Chiricahua estimates that purchasing the ten drugs under the proposed rebate model for 2026 would require $4,623,980 in up front capital. In contrast, the same medications currently cost $175,744.69 when purchased at the 340B ceiling price. This represents a 2,531 percent increase in up-front procurement costs. As previously noted, when applied across the broader drug portfolio, the proposed rebate program is projected to result in an aggregate up-front cost increase exceeding $6.1 million annually by 2028. Chiricahua Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To absorb the upfront cost of medications purchased at WAC, Chiricahua would be forced to scale back essential, non-revenue-generating services that are central to patient care and care-coordination. These include: Case Management, which provides direct support to high-risk Medicare patients by coordinating care, assisting with complex medical needs, and reducing avoidable hospitalizations. Patient Transportation Services, which ensure that vulnerable patientsmany of whom live in remote areasare able to reach medical appointments with Chiricahua providers and specialty care, often located more than two hours away. Community Health Workers, who are critical in identifying and assisting individuals in geographically isolated parts of the county, connecting them to primary care, preventive screenings, and social-service supports. These programs are fundamental to achieving quality, continuity, and access to care in underserved communities; reducing them to offset WAC-level drug costs would have direct and harmful consequences for patient outcomes. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Chiricahua Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Chiricahua Community Health Centers Inc. estimates that the associated rebate opportunity cost for 2026 would be approximately $470,286. As the number of drugs subject to the rebate model increases, this unrealized rebate value is projected to grow to just under $1 million annually by 2028. Chiricahua Community Health Centers Inc. estimates that purchasing drugs subject to the rebate model at wholesale acquisition cost rather than at 340B ceiling prices would increase up front monthly drug expenditures by approximately $379,333 in 2026, $487,689 in 2027, and $678,709 in 2028. Every dollar expended upfront at Wholesale Acquisition Cost (WAC) represents funds that remain effectively immobilized within the manufacturers rebate reconciliation process. During the period in which Chiricahua awaits rebate reimbursement, these dollars cannot be deployed to support operational needs, thereby constraining the organizations capacity to respond to urgent public health events, infrastructure failures, or other immediate system demands. Operating under a rebate-based model would require Chiricahua to rely heavily on its limited financial reserves to sustain medication purchasing at WAC. This reliance is not financially sustainable. These reserves currently support core service linesincluding Laboratory, Mental Health, Dental, Substance Use Disorder treatment, Nutrition Services, Case Management, Transportation, Outreach, Eligibility Assistance, and Community Health Workerseach of which plays a critical role in fulfilling the Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer organizations mission and federal program obligations. Diverting these resources to cover inflated drug acquisition costs undermines the stability of these essential services. Forcing Community Health Centers (CHCs) to absorb the financial burden of WAC-priced purchasing while awaiting delayed rebate payments introduces significant operational and clinical risk. In Chiricahuas service area, where patients rely exclusively on the health center for comprehensive primary and preventive care, any disruption to medication procurement due to depleted reserves or exhausted wholesaler credit limits directly jeopardizes the communitys safety net. If Chiricahua is pushed into a prolonged rebate-dependent cash-flow position, the downstream impacts are immediate and measurable: extended patient wait times, reduced service availability, constrained clinical capacity, and diminished ability to provide deeply discounted medications. These consequences affect not only the patients served by Chiricahua, but also mirror the risks faced by the more than 52 million patients nationwide who depend on CHCs for accessible and affordable care. In this context, cash-flow instability is not merely a financial concernit constitutes a threat to continuity of care and to the equitable access that CHCs are federally mandated to provide. a. Financial Impact of Rebate Denials and Delays Chiricahua Community Health Centers, Inc., urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC incurs a net loss on the transaction, having already paid the full wholesale acquisition cost to the wholesaler while dispensing the medication to the patient at a steeply discounted rate. Based on current utilization of the ten selected drugs, even a conservative rebate denial rate of 10 percent would result in an estimated $500,000 net annual loss in 2026. As additional drugs become subject to the rebate model, this loss is projected to grow to nearly $1 million annually by 2028. This level of financial loss is not absorbable for our CHC, as it represents a direct diversion of limited resources from our safety net budget. Any reduction in available financial resources will directly undermine our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.16 The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. 16 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.19 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also impose substantial administrative and technological burdens on CHCs. National analyses indicate that compliance would require new software systems, integration with existing platforms, and recurring staff training. NACHC estimates these expenses at $30,000 to $50,000 per year, with the potential for significantly higher costs depending on the specific technology selected. Chiricahuas own assessment projects $7,500 in implementation costs and $2,500 per month in maintenance, totaling $37,500 annually, solely to support the software required to track and process rebate-related data. To meet rebate-model requirements, CHCs would need to implement new tracking functionality either within their electronic medical record systems or through external standalone platforms. This would entail ongoing licensing fees, vendor support costs, and continual workflow redesigning both clinical and administrative operations. Importantly, these expenses are ongoing and additive, not one-time 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer investments, and would be incurred despite the fact that CADs are not currently billed to Medicare Parts B or D. Further, the Medicare Part B negotiated pricing provisionsrelevant to only a limited subset of medicationsdo not take effect until 2028, underscoring the lack of near-term applicability and raising questions about why CHCs would be required to absorb substantial administrative and technology costs for a billing context that does not yet exist. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B 27 Id. 28 42 U.S.C. 256b(a)(1) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 34 C.F.R. 447.518(a). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer- payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 56 42 U.S.C. 256b(a)(5)(B) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily- prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F Jonathan P. Melk, M.D. Chief Executive Officer jmelk@cchci.org 1205 F Avenue, Douglas, AZ 85607 520-364-1429 Chief Executive Officer E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Chiricahua strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Chiricahua believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Chiricahua appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact please contact Director of Pharmacy David Merrell, PharmD at DMerrell@Chiricahua.org or Chief External Affairs Officer Dennis Walto, MA at DWalto@Chiricahua.org. Sincerely, _________________________________ CEO Jonathan Melk, MD FAAP Chiricahua Community Health Centers, Inc. Docusign Envelope ID: 4A39124E-3D8E-460D-B18A-8458D10F009F
HRSA-2026-0001-1517NASTAD2026-04-15T04:00Z38,361 chars
On behalf of NASTAD, which represents the public health agencies responsible for administering Ryan White HIV/AIDS Program (RWHAP) Part B and AIDS Drug Assistance Programs (ADAPs), as well as U.S. Centers for Disease Control and Prevention (CDC)-funded HIV prevention and viral hepatitis programs, and federal recipients and subrecipients participating in the Ending the HIV Epidemic in the U.S. (EHE) initiative, we respectfully submit these comments in response to the above-captioned Request for Information (RFI). Our members and their various subrecipients and subgrantees are deeply embedded in the 340B Drug Pricing Program, which is a critical source of cost containment and support for the safety-net providers that serve our nations most vulnerable populations. As HHS reconsiders whether to implement a 340B Rebate Model Pilot Program, NASTAD urges HRSA to approach any revised rebate model pilot with careful attention to the severe operational, financial, and patient access impacts on the federally funded safety-net programs and covered entities it oversees. On behalf of NASTAD, which represents the public health agencies responsible for administering Ryan White HIV/AIDS Program (RWHAP) Part B and AIDS Drug Assistance Programs (ADAPs), as well as U.S. Centers for Disease Control and Prevention (CDC)- funded HIV prevention and viral hepatitis programs, and federal recipients and subrecipients participating in the Ending the HIV Epidemic in the U.S. (EHE) initiative, we respectfully submit these comments in response to the above-captioned Request for Information (RFl). Our members and their various subrecipients and subgrantees are deeply embedded in the 340B Drug Pricing Program, which is a critical source of cost containment and support for the safety-net providers that serve our nation's most vulnerable populations. As HHS reconsiders whether to implement a 340B Rebate Model Pilot Program consistent with its statutory authority following the February 10, 2026, decision of the U.S. District Court for the District of Maine in American Hospital Association et al. v. Kennedy et al., No. 25-cv-600 (D. Me.), NASTAD urges HRSA to approach any revised rebate model pilot with careful attention to the severe operational, financial, and patient access impacts on the federally funded safety-net programs and covered entities (CEs) it oversees. We organized these comments around the three areas on which HRSA has solicited input: (l) administrative, operational, financial, and medication access concerns; (Il) covered entities' programmatic and financial interests in continuing to obtain 340B ceiling prices through upfront discounts; and (II) proposed alternatives and scope-limiting measures. On behalf of NASTAD, which represents the public health agencies responsible for administering Ryan White HIV/AIDS Program (RWHAP) Part B and AIDS Drug Assistance Programs (ADAPs), as well as U.S. Centers for Disease Control and Prevention (CDC)- funded HlV prevention and viral hepatitis programs, and federal recipients and subrecipients participating in the Ending the HIV Epidemic in the U.S. (EHE) initiative, we respectfully submit these comments in response to the above-captioned Request for Information (RFl). Our members and their various subrecipients and subgrantees are deeply embedded in the 340B Drug Pricing Program, which is a critical source of cost containment and support for the safety-net providers that serve our nation's most vulnerable populations. As HHS reconsiders whether to implement a 340B Rebate Model Pilot Program consistent with its statutory authority following the February 10, 2026, decision of the U.S. District Court for the District of Maine in American Hospital Association et al. v. Kennedy et al., No. 25-cv-600 (D. Me.), NASTAD urges HRSA to approach any revised rebate model pilot with careful attention to the severe operational, financial, and patient access impacts on the federally funded safety-net programs and covered entities (CEs) it oversees. We organized these comments around the three areas on which HRSA has solicited input: (I) administrative, operational, financial, and medication access concerns; (Il) covered entities' programmatic and financial interests in continuing to obtain 340B ceiling prices through upfront discounts; and (Ill) proposed alternatives and scope-limiting measures. 444 North Capitol Street NW, Suite 339 Washington, DC 20001 (202) 434.8090 | NASTAD.org Officers Chair Sarah Braunstein, New York City Vice-Chair Andy Dillehay, Nebraska Secretary Stella Martin , New Mexico Treasurer Tom Dunn, Michigan Chair-Elect Maria Jackson, Colorado Immediate Past-Chair Clover Barnes, District of Columbia Board Members Arlis Jenkins (Arizona) Tiffany Woods (California) Thaddeus Pham (Hawaii) Chelsea Frand (Houston) Andrea Perez (Illinois) Jeremy Turner (Indiana) Joyce Mbugua (Iowa) Debbie Guilbault (Kansas) Samuel Burgess (Louisiana) Barry Callis (Massachusetts) Dustin Hampton (Missouri) Anthony Hannah (North Carolina) Kathleen Brady (Philadelphia) Larisa Bruner (South Carolina) Phadre Johnson (Tennessee) Samuel Hebbe-Goings (Texas) Syd Robinson (Wisconsin) April 17, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 NASTAD Comments in Response to Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels: On behalf of NASTAD, which represents the public health agencies responsible for administering Ryan White HIV/AIDS Program (RWHAP) Part B and AIDS Drug Assistance Programs (ADAPs), as well as U.S. Centers for Disease Control and Prevention (CDC)-funded HIV prevention and viral hepatitis programs, and federal recipients and subrecipients participating in the Ending the HIV Epidemic in the U.S. (EHE) initiative, we respectfully submit these comments in response to the above-captioned Request for Information (RFI). Our members and their various subrecipients and subgrantees are deeply embedded in the 340B Drug Pricing Program, which is a critical source of cost containment and support for the safety- net providers that serve our nations most vulnerable populations. As HHS reconsiders whether to implement a 340B Rebate Model Pilot Program consistent with its statutory authority following the February 10, 2026, decision of the U.S. District Court for the District of Maine in American Hospital Association et al. v. Kennedy et al., No. 25-cv-600 (D. Me.), NASTAD urges HRSA to approach any revised rebate model pilot with careful attention to the severe operational, financial, and patient access impacts on the federally funded safety-net programs and covered entities (CEs) it oversees. We organized these comments around the three areas on which HRSA has solicited input: (I) administrative, operational, financial, and NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 2 medication access concerns; (II) covered entities programmatic and financial interests in continuing to obtain 340B ceiling prices through upfront discounts; and (III) proposed alternatives and scope-limiting measures. Background: NASTAD Constituencies and the 340B Program The breadth of NASTADs membership and its relationship to the 340B program is important context for these comments. NASTADs core constituency includes the public health agencies in all 50 states, the District of Columbia, and U.S. territories responsible for administering RWHAP Part B programs and ADAPs, HRSA EHE initiative recipients, and Section 318 HIV prevention and viral hepatitis grantees. ADAPs hold a distinct position within the 340B program, setting them apart from other CEs such as hospitals, community health centers, and RWHAP Part A, C, and D recipients and subrecipients. These differences primarily lie in their purchasing mechanisms and patient eligibility definitions, which allow ADAPs to maximize their resources to provide life-saving medications to low-income individuals with HIV. Most 340B CEs require an established clinical relationship as the foundation of the patient definition. ADAPs, however, do not provide health care services or maintain medical records. Instead, ADAP clients categorically meet the 340B patient definition if they are enrolled as ADAP clients, as authorized by HRSA. ADAPs typically secure 340B pricing through one of two mechanisms: Direct purchase: The ADAP (or a third-party vendor on its behalf) purchases all medications on its formulary at 340B- or sub-340B-discounted prices directly from a wholesaler, specialty distributor, or manufacturer. Medications are dispensed via pre-purchased central pharmacy inventories, pre-purchased contract pharmacy inventories, or ship-to/bill-to replenishment contract pharmacy arrangements. Rebate mechanism: Established via federal guidelines in 1998, the ADAP reimburses retail pharmacies a contracted rate at the point of sale for non-340B- purchased drugs dispensed to ADAP clients. The ADAP then invoices drug manufacturers quarterly for the appropriate 340B discount amount based on units of each medication dispensed. The rebate amount is typically the difference between AMP and the 340B ceiling price, with some manufacturers providing voluntary supplemental rebates. Any rebates directly generated by a federal dollar expenditure must be used in accordance with RWHAP statutory requirements and HRSA HIV/AIDS Bureau policy. NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 3 These compliance obligations add an additional layer of complexity to any transition away from established rebate mechanisms. Section I: Administrative, Operational, Financial, and Medication Access Concerns NASTAD and its members have significant concerns across each of the four dimensions on which HRSA has solicited comment. The operational challenges we describe below are not theoretical: NASTAD spent the period between August 2025 and January 2026 intensively engaged with pharmaceutical manufacturers, Beacon Channel Management (BCM)the third-party administrator retained by participating manufacturersand HRSA to prepare for the rebate pilots January 1, 2026, start date. That experience generated a detailed body of evidence about the models operational deficiencies, which we summarize below. 1. Data Access Limitations HRSAs original application notice specified 11 data elements required for claim submissions. Several of these data elements are problematic for ADAPs and other NASTAD-member CEs: Date Prescribed, Prescriber ID, and Service Provider ID: Date Prescribed, Prescriber ID, and Service Provider ID are generally unavailable for ADAP primary payor dispenses. ADAPs do not function as clinical providers and do not maintain the prescription-level records these fields presuppose. BIN and PCN Numbers: RX Bank Identification Numbers (BINs) and RX Processor Control Numbers (PCNs) are not uniformly applicable to ADAP claims, particularly for full-pay (uninsured) clients where the ADAP is the primary payor. BCMs interim solutionentering Cash in these fieldsis an inadequate and potentially problematic workaround that lacks standardization. Fill Number: Fill Number data are not among the claim-level data elements ADAPs typically submit in quarterly rebate invoicing and may be unavailable from pharmacy dispensing records. Transaction vs. Dispensing Dates: For ADAPs with delayed submission needs, transaction dates and dispensing dates may differ; BCM has confirmed transaction dates may substitute for dispensing dates, but this represents a deviation from standard claims practice that should be formally codified in any revised pilot design. These data limitations are not unique to ADAPs: other RWHAP CEs, as well as Section 318 and EHE grantee subrecipients, may similarly lack access to data elements that NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 4 presuppose a clinical care relationship between the CE and the patient. HRSA must design any rebate model pilots data requirements to reflect the full range of 340B CE types and operational models. 2. Unfunded Administrative Mandates The assertion that the pilot will impose no additional administrative costs on CEs is demonstrably contradicted by NASTADs direct implementation experience. Preparation for the January 1, 2026, launch imposed substantial and uncompensated administrative burdens on NASTAD, its member agencies, and their contractors, including: Staff Time: State ADAP programs devoted significant staff time across multiple agenciesprogram, finance, and ITto prepare for compliance with the new system, even before a single claim was submitted. In some states, limited administrative capacity means these changes cannot realistically be implemented at alljeopardizing those programs continued access to 340B savings. IT System Modifications: ADAPs, their contract pharmacies, pharmacy benefit managers (PBMs), and other third-party vendors were required to make system modifications to capture and report required data elements. These modifications require significant investment and, under state procurement rules, may require formal rebidding of competitively awarded contracts. Such procurement processes can take months or more than a year to completeif they are permissible at all under applicable state rules. Contract Renegotiations: The new model required CEs to renegotiate contracts with pharmacies and vendors. State grantees and subgrantees operating under competitive procurement requirements may face legal exposure if contract terms are modified mid-award. Depending on when a contract was executed, its terms, and applicable state procurement code, amendments may be prohibited entirely. Government Entity Registration Barriers: Government-operated ADAPs do not have Articles of Incorporation, a BCM registration requirement. BCMs alternative of accepting state statutes or authorizing legislation is workable but required NASTAD advocacy to resolve. BCM applied this alternative inconsistently in practice, however, accepting equivalent authorizing documents from some states while rejecting similar submissions from otherssuggesting that barriers of this kind are likely to recur. NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 5 Third-Party Administrator Banking Issues: ADAPs that use PBMs or other third- party administrators to manage rebate claims encountered a BCM requirement that third parties register using the CEs banking information. BCMs platform did not support this configuration, creating unresolved financial pipeline problems. ACH Payment Barriers: Some ADAPs cannot accept Automated Clearing House (ACH) payments due to state treasury policies, requiring manual resolution with BCM. No universal solution exists for non-ACH-capable state entities. These are not edge-case problemsthey reflect structural incompatibilities between how state-operated ADAP programs function and what the rebate pilots operational design assumed. 3. Financial Concerns: WAC-Based Purchasing and Cash Flow For CEs with direct purchase mechanisms, the requirement to purchase drugs at WAC represents an acute threat to program solvency. NASTADs member programs, including RWHAP Part B ADAPs and Section 318 and EHE grantee subrecipients, operate on tight, federally capped budgets and cannot absorb WAC pricing upfront. The financial risks include: Prohibitive WAC Pricing: HIV antiretrovirals and other high-cost specialty medications are among the most expensive drugs in the U.S. Requiring safety- net programs to purchase these at WAC would deplete available program funds and likely force service reductions for patients pending rebate receipt. Service reductions could include waitlists, formulary restrictions, or disenrollment outcomes with direct consequences for individual health outcomes and community-level HIV transmission rates. Cash Flow Timing Risks: Federal grant awards frequently arrive in partial Notices of Award (NOAs) and may be delayed. Programs operating without full funding while purchasing at WAC face catastrophic cash flow gaps. In the absence of sufficient cash on hand, programs may be forced to suspend medication purchases entirely, threatening viral suppression, patient health, and community-level efforts to reduce HIV transmission. Government Fiscal Policies Pertaining to Rebates: In a number of states, counties, and municipalities, rebates from federal program expenditures must be deposited into the jurisdictions General Fund rather than returned to the originating program. Under such policies, a program would bear the full upfront WAC cost and yet would not receive the rebate to offset it, creating an immediate NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 6 and unsustainable structural funding gap. Where rebate funds must pass through legislative appropriation before returning to the originating program, significant delays further compound the fiscal burden and disrupt service delivery. Prompt Payment Discounts: The high upfront cost of WAC purchasing could prevent ADAPs and other safety-net programs from paying pharmaceutical wholesalers within standard prompt payment windows, causing them to lose valuable prompt payment discounts and increase net program costs. These concerns apply with equal force to all RWHAP CE types, EHE subrecipients, and Section 318 subgrantees with direct purchase 340B programs. 4. Risks of Manufacturer-Controlled and Fragmented Claims Platforms Placing rebate claim adjudication in the hands of platforms developed by manufacturer- contracted vendors introduces unacceptable financial and programmatic risks. NASTADs experience with BCM during the pre-implementation period revealed serious deficiencies: No Reconciliation Support: BCM does not provide a Reconciliation of State Invoice (ROSI) or equivalent document with rebate payments. While the platform is intended to provide claim-level WAC and 340B price data, this falls short of the financial reconciliation documentation that state programs are required to maintain. Lack of Deduplication: BCM cannot deduplicate rebate claims submitted through the pilot from traditional quarterly rebate claims submitted by ADAPs or other CEs to manufacturers. The responsibility for deduplication is left to individual manufacturers, with no standardized process, creating conditions for disputes and financial loss. No Established Priority When Multiple CEs Submit: When an ADAP and another CE submit claims for the same dispensenotably when an ADAP client is dispensed a medication prescribed by another 340B covered entity, including in circumstances where the ADAP is the primary payor of the medicationBCM pays the first claim received and denies the second. ADAPs operating under delayed submission schedules, which is a near-certain outcome given the operational barriers described above, could systematically lose rebates to faster-acting CEs. This is an unacceptable outcome for programs serving uninsured and underinsured HIV patients. NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 7 45-Day Calendar Day Deadline: The original 45-day deadline for claim submission ran in calendar daysnot business daysa distinction that is especially consequential for state government programs with fiscal year cycles, holidays, and quarterly legislative reporting requirements. Rebates submitted after 45 days are forfeited; no manufacturer had authorized a longer submission window prior to the programs pause. BCM confirmed that its platform can technically accommodate 90- or 120-day windows if manufacturers authorize them, but none did so voluntarily. HRSA should mandate extended submission windows for state-operated programs. Bulk Purchase / Dispensing Timing Mismatch: ADAPs that purchase medications in bulk cannot submit rebate claims at the time of purchase; claims may only be submitted at the time of dispensing. For programs with large inventory reserves, this disconnect between purchase and dispensing creates cash flow strain and forecasting uncertainty. For direct purchase programs, the inability to claim rebates on pre-dispensed inventory also undermines their capacity to maintain on-hand stock as a buffer against funding delaysleaving them more vulnerable to service disruptions when federal awards are late or partial. These are not speculative risksthey are documented operational deficiencies observed during NASTADs pre-implementation engagement. 5. Overreach in Data Collection Scope The original application notice required CEs to submit claims data from all payors, despite the pilots exclusive focus on drugs subject to maximum fair pricing under the Inflation Reduction Act (IRA)that is, drugs on the CMS Medicare Drug Price Negotiation Selected Drug List. The collection of data on claims paid by commercial insurance, state Medicaid programs, or uninsured patients has no logical connection to evaluating a Medicare-centric rebate initiative. This requirement constitutes a significant unfunded mandate and creates unnecessary privacy and security risks for CE patients. NASTAD strongly urges HRSA to limit any data collection in a revised pilot to Medicare-primary claims for the specified NDCs. 6. Medication Access Concerns The cumulative effect of the administrative and financial burdens described above is an elevated risk of disruption to patients access to medications. For ADAPs serving people with HIV, an interruption in medication access is not a minor inconvenienceit can NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 8 result in viral rebound, drug resistance, and serious health consequences. The following scenarios illustrate the access risks inherent in the rebate pilot model: Forfeited Savings: If an ADAP misses the 45-day submission deadlinedue to system delays, government fiscal cycles, or administrative capacitythe 340B savings for those dispenses are forfeited entirely. The loss of these savings could force ADAPs to reduce formulary breadth, increase cost-sharing, or otherwise limit patient access. Denied Rebates Due to Priority Rules: When another CE submits a rebate claim before the ADAP for the same dispense, the ADAPs claim is denied. There is no recourse or appeals process for this outcome under the current BCM framework. Medicaid Retroactive Coverage Complications: ADAPs that dispense medications to patients awaiting Medicaid eligibility determination must reverse 340B rebate claims through BCM when Medicaid retroactive coverage is confirmed. The reversal processsubmitting a negative-quantity claim to zero out the originalis technically complex and prone to error. ACTF Pricing Protections: If a revised rebate pilot expands to include antiretroviral drugs subject to AIDS Crisis Task Force (ACTF) pricing agreements, the pilot model must account for the full (340B-plus-supplemental) rebate amount. BCMs current framework does not have a mechanism for ACTF supplemental rebates. Section II: Reliance Interests in Continuing to Obtain 340B Ceiling Prices Through Upfront Discounts NASTADs members have developed deep and reasonable reliance interests in continuing to obtain 340B ceiling prices through established mechanismseither upfront discounts (direct purchase) or quarterly rebate invoicing (rebate mechanism). These interests are strongest and most concrete for ADAPs operating under established rebate mechanisms, and they are directly relevant to HHSs reconsideration of its statutory authority. 1. ADAPs with Established Rebate Mechanisms: Existing Systems and Infrastructure Many ADAPs have operated sophisticated, HRSA-sanctioned quarterly rebate invoicing systems for more than two decades, pursuant to federal guidance issued in 1998 establishing the rebate option for ADAPs under the 340B program. These systems represent substantial long-term investment by state programs, including: NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 9 Multi-year contracts with PBMs, data warehouse vendors, and third-party rebate administrators structured around quarterly rebate cycles State IT systems and pharmacy claims data infrastructure built to produce quarterly rebate invoices in manufacturer-specified formats Manufacturer-specific rebate agreements negotiated and executed under the quarterly invoicing paradigm, including supplemental rebate commitments State fiscal and accounting systems aligned with quarterly rebate receipt, reporting, and reinvestment under RWHAP requirements For ADAPs with rebate mechanisms, the quarterly invoicing system is not merely convenientit is the structural foundation of their 340B program operations. Requiring these programs to simultaneously maintain their existing quarterly invoicing obligations with manufacturers not in the pilot while also transitioning to an entirely new monthly claims submission system for pilot drugs would impose dual-track administrative and financial burdens with no corresponding benefit. 2. The J&J Exception: Evidence that Exemption Is Feasible and Appropriate During NASTADs pre-implementation engagement with the Initial Price Applicability Year (IPAY) 2026 drug manufacturers, NASTAD submitted formal requests to virtually all manufacturers participating in the rebate pilot to seek exemptions for ADAPs with established rebate mechanisms. Only Johnson & Johnson (J&J) granted this exemption, permitting ADAPs to continue submitting claims for its two IPAY 2026 drugs through existing quarterly rebate invoicing processes. This accommodation is documented in Footnote 2 of J&Js policy posted to the BCM portal. All other IPAY 2026 manufacturers either ignored NASTADs request or rejected it outright. This outcome is both unreasonable and inequitable: it created a fragmented compliance landscape in which ADAPs with rebate mechanisms were simultaneously required to operate two entirely different rebate claim submission systems for drugs that are therapeutically and operationally indistinguishable from one another, with access to the established quarterly process available only for J&J drugs. The J&J exception is critically important to HRSAs reconsidering of the pilots design for two reasons. First, it demonstrates that manufacturer-level exemptions for ADAPs with established rebate mechanisms are technically and operationally feasible. Second, it establishes a clear precedent: one manufacturer recognized that imposing a new rebate platform on ADAPs that already operate sophisticated, compliant rebate systems is duplicative and unnecessary. HRSA should not allow the arbitrary decisions of other manufacturers to define the operational reality for ADAPs. NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 10 3. Reliance Interests of Other NASTAD-Member Covered Entities RWHAP Part A subrecipients, Part C and D recipients, EHE subrecipients, and Section 318 subgrantees with 340B CE status have similarly structured their 340B program operationscontracts, system configurations, financial modelsaround upfront discount access or established rebate mechanisms. These entities, often community health centers, sexual health clinics, HIV specialty clinics, and viral hepatitis programs, have relied on the stability of the 340B upfront discount model to support patient care programs and extend the reach of limited federal grant dollars. Disrupting these arrangements mid-grant-cycle imposes costs that cannot be absorbed without affecting services to patients. Section III: Proposed Alternatives and Scope-Limiting Measures Based on our implementation experience and the concerns detailed in Sections I and II, NASTAD respectfully offers the following specific recommendations for HRSAs consideration in designing any revised rebate pilot. 1. Require Exemptions for ADAPs with Established Rebate Mechanisms NASTADs foremost recommendationand the one most grounded in operational experienceis that HRSA require, as a condition of any manufacturers participation in a revised rebate pilot, that manufacturers provide exemptions for ADAPs with established rebate mechanisms, allowing such programs to continue submitting 340B rebate claims through their existing quarterly invoicing processes. This recommendation is supported by the following rationale: ADAPs with rebate mechanisms already provide manufacturers with comprehensive, claim-level data through quarterly invoicing. The 340B programs stated objectivespricing transparency and prevention of duplicate discountsare already served by these systems. J&Js voluntary exemption demonstrates that this accommodation is operationally feasible and does not undermine the manufacturers ability to verify claims. HRSA should codify this approach as a program requirement rather than leaving it to manufacturer discretion. Requiring ADAPs with rebate mechanisms to simultaneously maintain two parallel rebate submission systemsone for pilot drugs, one for non-pilot drugsimposes purely administrative burdens with no programmatic benefit and is contrary to HRSAs own administrative efficiency goals. NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 11 The failure of all other IPAY 2026 manufacturers to extend the same courtesy as J&J, despite NASTADs direct engagement, confirms that voluntary accommodation is insufficient and that HRSA must act affirmatively to protect these programs. At minimum, if HRSA declines to mandate exemptions, HRSA should issue strong guidance clearly recommending that manufacturers participating in any revised pilot accommodate ADAPs with existing rebate mechanisms through continuation of quarterly invoicing, and should track and publicly report manufacturer compliance with that guidance. 2. Exempt Direct Purchase ADAPs for Full-Pay and Uninsured Client Dispenses For ADAPs with direct purchase mechanisms, the requirement to purchase drugs at WAC and await rebate reimbursement is incompatible with program fiscal structures. NASTAD strongly requests that 340B-discounted direct purchases of drugs dispensed to ADAPs full-pay medication program clients and to uninsured clientswhere the 340B CE is the primary payorbe exempt from any rebate pilot. This exemption is essential to protect the financial viability of programs that serve the most economically vulnerable patients in the HIV care continuum. 3. Extend and Mandate Adequate Submission Windows The 45-calendar-day submission deadline is operationally incompatible with the fiscal and administrative realities of state-operated ADAP programs. HRSA should mandate submission windows of at least 120 calendar days for state-operated ADAPs and other federally funded CEs. BCM has confirmed that its platform is technically capable of accommodating extended windows; HRSA should require manufacturers to authorize them, rather than leaving this to voluntary manufacturer discretion. Similarly, the 10- calendar-day payment window for approved claims should be extended and enforced to ensure timely cash flow for programs operating on limited federal grant budgets. 4. Establish a Centralized, Neutral Third-Party Data Submission Platform The fragmentation of claim submission across multiple manufacturer-controlled platformseach with its own data requirements, deadline policies, and adjudication logicis operationally unsustainable and financially risky for CEs. NASTAD strongly recommends that HRSA establish a single, centralized data submission pathway administered by a neutral third party, such as HRSAs Office of Pharmacy Affairs (OPA), as a condition of any revised pilot. This platform should: NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 12 Apply uniform, standardized data elements and submission requirements across all participating manufacturers Require standardized, transparent denial reason codes and a clear, timely appeals process for all claim denials Include mandatory prompt payment requirements (minimum 10 business days from claim approval) and public reporting on payment timeliness Provide formal reconciliation documentation (equivalent to a ROSI) with all rebate payments Establish clear priority rules and a fair dispute resolution mechanism when multiple CEs submit claims for the same dispense Prohibit manufacturers from passing any platform administrative costs to CEs Be subject to independent, third-party audits with public reporting of results The experience with 340B ESP (operated by Second Sight Solutions as a vendor contracted by manufacturers) should serve as a cautionary example. That platform imposed significant administrative burdens, caused extreme processing delays (frequently 12 weeks or more despite promised 10-business-day turnarounds), and expanded data collection well beyond the scope of the 340B statute. A revised pilot must not replicate this model. 5. Limit Pilot Scope to Medicare-Primary Claims for IRA-Negotiated NDCs Any revised pilot should strictly limit data collection and the rebate mechanism to claims for the specified IPAY 2026 (and, if included, IPAY 2027) NDCs where Medicare is the primary payor. Collecting data on commercial insurance, Medicaid, or uninsured patient claims has no logical nexus to evaluating a Medicare-focused rebate model. Such overreach imposes disproportionate administrative burdens on CEs and creates patient privacy and data security risks that are not justified by the pilots stated objectives. 6. Protect ACTF Pricing in Any Pilot Expansion Should HRSA expand any revised pilot to include antiretroviral drugs subject to ADAP AIDS Crisis Task Force (ACTF) supplemental pricing agreements, NASTAD urges HRSA to first advocate for the full exemption of all ADAPs from the pilot for those drugs. If an exemption cannot be secured, HRSA must require that manufacturers participating in the pilot honor the full (340B-plus-supplemental) rebate amount for ACTF drugs. Any rebate platform used for ACTF-covered drugs must be configured to capture and process supplemental rebate amounts. Failure to ensure this would effectively reduce NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 13 ADAP savings on these drugs below their negotiated levels, undermining NASTADs longstanding supplemental rebate agreements. 7. Establish a Covered Entity Advisory Committee The operational deficiencies documented during the pre-implementation period for the now-paused pilot demonstrate that HRSA and participating manufacturers did not adequately engage with the full range of CE types prior to program launch. NASTAD strongly recommends that HRSA establish a formal CE advisory committeewith representative participation from ADAPs, RWHAP subrecipients, EHE entities, Section 318 grantees, and viral hepatitis programsto guide the design, implementation, and evaluation of any revised pilot program. This committee should meet regularly and have a clear mechanism for its recommendations to be incorporated into program policy. 8. Provide Comprehensive Technical Assistance to All Affected CEs The transition to a rebate modeleven in a limited pilotwill be complex and challenging for CEs. HRSA should provide comprehensive, proactive technical assistance to all 340B CEs expected to participate, potentially delivered through HRSAs prime vendor, APEXUS. This assistance should include training, written guidance materials, and a dedicated help desk to address operational questions and challenges during implementation. Particular attention should be paid to the needs of government- operated ADAPs and small CEs with limited administrative capacity. Conclusion NASTAD strongly supports HHSs reconsideration of whether a 340B Rebate Model Pilot Program is consistent with its statutory authority and urges the agency to approach this question with full appreciation of the administrative, financial, and patient access consequences for the safety-net programs HRSA itself funds and oversees. The experiences documented in these commentsdrawn from NASTADs intensive preparation for the now-paused pilotdemonstrate that the model, as previously designed, would impose severe and uncompensated burdens on ADAPs, RWHAP subrecipients, EHE entities, and Section 318 grantee subrecipients operating under established 340B program structures. If HRSA proceeds with any form of revised rebate pilot, it must, at minimum: require manufacturers to exempt ADAPs with established rebate mechanisms from the pilot (drawing on the precedent established by Johnson & Johnson); exempt direct purchase ADAPs serving full-pay and uninsured clients; mandate adequate submission windows; establish a centralized, neutral data submission platform with robust CE protections; limit data collection to Medicare-primary claims; protect ACTF pricing; and provide NASTAD 444 North Capitol Street NW, Suite 339 - Washington, DC 20001 - (202) 434.8090 - NASTAD.org 14 comprehensive technical assistance. NASTAD and its member agencies stand ready to collaborate with HRSA to develop a model that, if implemented, genuinely strengthens the 340B program and protects the clients these programs serve. Thank you for the opportunity to provide these comments. Please contact Tim Horn, Director, Medication Access (thorn@NASTAD.org), with any questions regarding these comments. Sincerely, Natalie Cramer Acting Executive Director NASTAD
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Comments from St. Thomas More in Canon City, CO St. Thomas More Hospital 1338 Phay Avenue Canon City, CO 81212 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Thomas More Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Nestled in the foothills of the Sangre de Cristo Mountains in Caon City, Colorado, St. Thomas More is a critical access hospital that serves as a vital resource for the residents and visitors to this mountainous area. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Thomas More Hospital that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Thomas More Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Michael Cafasso Hospital President St. Thomas More Hospital, Canon City, CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
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Comments from St. Mary Corwin, Pueblo CO St. Mary Corwin Hospital 1008 Minnequa Avenue Pueblo, CO 81004 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Mary Corwin Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Mary Corwin Hospital has proudly served the residents of Pueblo, Colorado and surrounding areas for over 140 years. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Mary Corwin Hospital that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Mary Corwin Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Michael Cafasso Hospital President St. Mary Corwin Hospital, Pueblo, CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1520(no commenter metadata)2026-04-15T04:00Z42,368 chars
See attached file(s) GREATER VALLEY HEALTH CENTER 1935 3rd Avenue East, Kalispell, MT 59901 | 406-607-4900 |www.greatervalleyhealth.org April 9, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Flathead Community Health Center, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Flathead Community Health Center, Inc. anticipates a significant financial loss from entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Flathead Community Health Center, Inc. continues to provide exceptional patient-centered care regardless of ability to pay. We strive to cultivate a healthy community with access to quality care for all. Our service areas span the Flathead Valley in Northwest Montana that includes over 10,000 patients, 3 clinic locations, and 2 pharmacies. Our patient population benefits tremendously from accessibility to quality healthcare, especially in the rural area of Hungry Horse, MT. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Flathead Community Health Center, Inc. in particular, this means it will impact: About 30,000 340B prescriptions and about 10,000 GVHC pts annually Current admin costs for our 340B program = $364,788 T We use our 340B savings to: Reduce cost barriers for patients, increasing medication access and supporting our uninsured/underinsured patients o Support pharmacy operations for sustainability o Expand clinical services and support an integrated care model that includes school- based clinics o Support behavioral health and SUD services o Support transportation assistance, interpretation services, outreach and enrollment assistance We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure.Circulation.https://www,abajoumals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data- we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3- Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Flathead Community Health Center, Inc. provided $528,439 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Flathead Community Health Center, Inc. anticipates needing at least 1 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Flathead Community Health Center, Inc. anticipates an estimated increase of $150,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Flathead Community Health Center, Inc. is anticipating hiring 1 FTE to meet this need. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, 7 Internal NACHC assessment (99 responses). s Ibid. 4 increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Flathead Community Health Center, Inc. estimates the additional staff needed would cost about $85,000 annually in addition to the upfront investment that would be incurred for the initial drug spend. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Flathead Community Health Center, Inc. estimates that reporting 340B rebate claims to a third-party platform will require an additional 20 hours per week for claims reporting, payment verification, GFI creation, and ongoing program integrity, assuming all nine drug manufacturers' plans are implemented. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Flathead Community Health Center, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. This estimated cost of about $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 10,000 patients, the total projected increase in expenses including labor, IT, and carrying costs-is estimated at about $30,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5-10 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also 5 require new software, system integration, and staff training. NACHC estimates these costs would range Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding- fee discounts at the point of purchase. 9 Internal NACHC survey data 6 A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Flathead Community Health Center, Inc. reinvests its 340B program savings directly into services that support and benefit its patient population. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https:/bphc.hrsa,gov/compliance/compliance- manual/chapter9#footnote10 12https:fenlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC- specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate decisions about allocating limited financial resources. Based on our organization's data, we estimate an additional initial upfront investment of $2.2 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $55,000 per year to purchase these same drugs at the 340B ceiling price. This represents a significant increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Flathead Community Health Center, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit and expansion of medical, dental and pharmacy services to rural outreach communities. 13 https://340bpricing.hrsa.gov/ 14 https:/www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full- time Patient Navigator/Enrollment Specialist that is mandatory to address eminent patient needs as a result of the Medicaid reenrollment processes, directly increasing wait times for health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 1600 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Flathead Community Health Center, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Flathead Community Health Center, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $716,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Flathead Community Health Center, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $186,691 for the 2026 year. In 2027, our upfront monthly spend will increase by $198,811. In 2028, our upfront monthly spend will increase by $203,751. Every dollar we pay upfront at WAC is a dollar that remains "frozen"" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit in addition to utilizing limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $22,000 (with avg rates 7.75 - 11%) annuallyfunds that are currently dedicated to the expansion of services including capital and personnel investments. Forcing 9 CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Flathead Community Health Center, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Flathead Community Health Center, Inc. urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of about $143,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: a A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model- pilot-program 10 Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 11 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Flathead Community Health Center, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Flathead Community Health Center, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Flathead Community Health Center, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dr. Yvonne Christow, Pharmacy Director, at ychristow@greatervallevhealth.org. Sincerely, Adam Naumann, CEO Flathead Community Health Center, Inc. dba Greater Valley Health Center 12
HRSA-2026-0001-1521East Valley Community Health Center2026-04-15T04:00Z17,564 chars
See attached file(s) OUR MISSION: To provide access to excellent health care while engaging and empowering our patients, employees, and partners to improve their well-being and the health of our communities. www.evchc.org 501(c)(3) Tax I.D #23-7068586 Headquarters: 420 South Glendora Avenue West Covina, California 91790-3001 626-919-4333 April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of East Valley Community Health Center (EVCHC) I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. EVCHC is a medium size CHC operating since 1970, when it started as a free clinic, in the East San Gabriel and Pomona areas of Los Angeles County, California. We provide comprehensive primary care, dental, vision and mental health services to low-income and underserved individuals and families. Annually we provide over 150,000 patient visits to 32,000 individuals. As part of our comprehensive services, our patients benefit from 340B pricing for their medications, offered at three in-house pharmacies and contracted neighborhood pharmacies. The savings from the 340B program are directly utilized to fund pharmaceuticals for patients who are not able to pay for the 340B priced medications and to pay the salaries of our Registered Dietitians. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. It is likely that a rebate model would cost EVCHC upwards $500,000 for up front drug purchases at WAC pricing, additional staffing, at least 1.0 2.0 FTEs ($150,000) will be needed for payment reconciliation support, claims submission, and consultant support. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety- net providers and ensure continued access to care for the most vulnerable patients. Page 2 of 6 Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Page 3 of 6 The implementation of the Rebate Model will have the following impact on EVCHC: Cash Flow Strain o Requires upfront purchase at full cost (WAC) with delayed rebates o Reduces immediate access to 340B savings that fund operations and services Revenue Uncertainty o Rebates are not guaranteed (subject to validation/denial) o Creates unpredictability in 340B program income and budgeting Significant Administrative Burden o Adds complex claim-level tracking, submission, and reconciliation processes o Requires new staffing, workflows, and oversight Operational & IT Complexity o Demands enhanced data integration across EMR, pharmacy, and TPA systems Disproportionate Financial Impact o EVCHC would have to dedicate limited reserves or extend lines of credit to absorb delayed rebates and added costs Cost Shifting o Transfers financial and administrative burden from manufacturers to providers o Increases cost of operating the 340B program Disruption to Existing Pharmacy Models o Undermines established CE-owned and contract pharmacy workflows The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Page 4 of 6 To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such Registered Dietitians, who currently work with thousands of our patients with co- morbidities, as well as diabetes and HIV. The cuts would disrupt participation in group classes to improve the nutrition habits of pregnant parents, children and adolescent patients and their families. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. Wholesaler Implications - Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Financial Impact of Rebate Denials and Delays East Valley Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.1 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Page 5 of 6 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is Page 6 of 6 a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion East Valley Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. EVCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. EVCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at amardini@evchc.org Sincerely, Alicia Mardini, MBA Chief Executive Officer East Valley Community Health Center
HRSA-2026-0001-1522Cook County Hospital District d/b/a North Shore Health2026-04-15T04:00Z12,340 chars
Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Cook County Hospital District d/b/a North Shore Health, Grand Marais, MN, (NSH) we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. In addition to other items, this RFI asks whether HRSA should implement a rebate model under the 340B program in place of the longstanding upfront discount model. Our answer is unequivocally No. As explained below, any rebate mechanism will impose enormous costs and burdens on NSH that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. Preserving the upfront discount mechanism, which NSH has relied on for years, is the best way to fulfill that purpose of the 340B program. NSH has done its best to provide detailed answers in the limited time and human resources available to us. Administrative Costs Transitioning to a rebate model would require significant new administrative investments. NSH current staffing, operations, and compliance systems is structured around the existing upfront discount model. A fundamental shift in the program would necessitate new processes, staffing, and infrastructure. These costs will far exceed what we anticipated when electing to participate in the 340B program. Based on the proposed rebate framework, NSH would likely be forced to discontinue participation in the 340B program. We do not have the staffing capacity or infrastructure required to implement and sustain the additional administrative processes. Since joining the 340B program in 2021, our savings have been as follows: 2023: $392,650 2024: $174,551 2025: $213,164 During this same period, our operating losses were: 2023: $2,367,890 2024: $2,134,941 2025: $2,630,730- unaudited These figures underscore how critical 340B savings are to sustaining our operations and services. NSH is a rural hospital, organized as a hospital district with taxing authority. Our organization includes a 16-bed Critical Access Hospital, a 37-bed skilled nursing facility, ambulance services, 24/7 emergency care, home health services, and a wide range of diagnostic and therapeutic services. As the only hospital in Cook County, Minnesota, we serve approximately 5,600 residents as well as a significant seasonal tourist population in a geographically large and sparsely populated region. The nearest hospital is 84 miles away, and the nearest trauma center is 110 miles away. Given these realities, maintaining access to care in our community depends heavily on programs like 340B. Staffing Impacts NSH does not currently have sufficient staff to comply with a rebate-based system. Our pharmacy services are provided by two pharmacists who already operate at capacity. Even a modest increase in workload would be unsustainable. Recruiting additional qualified professionals in our rural location is extremely challenging and additional burdens could lead to staff attrition, further limiting available services. Systems and Infrastructure Our technological and operational infrastructure is limited. Transitioning to a rebate model would require costly system upgrades and process changes. With only one IT staff member, whose responsibilities are already focused on patient care priorities, such changes are not feasible. This alone could necessitate withdrawal from the 340B program. Cash Flow Impacts Unlike the upfront discount model, a rebate system would require North Shore Health to pay full price for drugs and wait for reimbursement, effectively providing interest-free loans to manufacturers. Even short delays would materially impact our already strained financial position, as evidenced by our recent operating losses. Cumulative Impact on Patient Care Taken together, these added costs and burdens would diminish our ability to use 340B savings to support patient care. The result would be reduced services and diminished access to care for our community. Alternative Approaches HRSA has acknowledged that there are alternative methods to address duplicate discounts between the 340B program and the MDPNP. We support the American Hospital Associations recommendation to adopt a neutral third-party clearinghouse as a more efficient and less burdensome solution. Conclusion For these reasons, NSH respectfully urges HRSA to abandon the proposed rebate model and instead pursue alternative approaches that preserve the effectiveness of the 340B program. We appreciate your consideration of these comments and welcome continued engagement on this important issue, which has significant implications for the patients and communities served by the 340B program. Sincerely, Kimber L. Wraalstad, FACHE CEO/Administrator North Shore Health, Grand Marais, MN North Shore HEALTH COME eGuIrry o MrNifSOTA 515 W 5TH AVE GRAND MARAIS, MN 55604-3017 (218) 387-3040 April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Cook County Hospital District d/b/a North Shore Health, Grand Marais, MN, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." In addition to other items, this RFI asks whether HRSA should implement a rebate model under the 340B program in place of the longstanding upfront discount model. Our answer is unequivocally "No". As explained below, any rebate mechanism will impose enormous costs and burdens on North Shore Health that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that we can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which North Shore Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. North Shore Health has done its best to provide detailed answers in the limited time and human resources available to us. northshorehealth.org The Honorable Thomas J. Engels April 15, 2026 Page 2 Administrative Costs Transitioning to a rebate model would require significant new administrative investments. North Shore Health current staffing, operations, and compliance systems is structured around the existing upfront discount model. A fundamental shift in the program would necessitate new processes, staffing, and infrastructure. These costs will far exceed what we anticipated when electing to participate in the 340B program. Based on the proposed rebate framework, North Shore Health would likely be forced to discontinue participation in the 340B program. We do not have the staffing capacity or infrastructure required to implement and sustain the additional administrative processes. Since joining the 340B program in 2021, our savings have been as follows: 2021 (9 months): $248,662 2022: $255,201 2023: $392,650 2024: $174,551 2025: $213,164 During this same period, our operating losses were: 2021: $(755,976) 2022: $(2,086,410) 2023: $(2,367,890) 2024: $(2,134,941) 2025: $(2,630,730) (unaudited) These figures underscore how critical 340B savings are to sustaining our operations and services. North Shore Health is a rural hospital, organized as a hospital district with taxing authority. Our organization includes a 16-bed Critical Access Hospital, a 37-bed skilled nursing facility, ambulance services, 24/7 emergency care, home health services, and a wide range of diagnostic and therapeutic services. As the only hospital in Cook County, Minnesota, we serve approximately 5,600 residents as well as a significant seasonal tourist population in a geographically large and sparsely populated region. The nearest hospital is 84 miles away, and the nearest trauma center is 110 miles away. Given these realities, maintaining access to care in our community depends heavily on programs like 340B. Staffing Impacts North Shore Health does not currently have sufficient staff to comply with a rebate- based system. Our pharmacy services are provided by two pharmacists who already operate at capacity. Even a modest increase in workload would be unsustainable. The Honorable Thomas J. Engels April 15, 2026 Page 3 Recruiting additional qualified professionals in our rural location is extremely challenging and additional burdens could lead to staff attrition, further limiting available services. Systems and Infrastructure Our technological and operational infrastructure is limited. Transitioning to a rebate model would require costly system upgrades and process changes. With only one IT staff member, whose responsibilities are already focused on patient care priorities, such changes are not feasible. This alone could necessitate withdrawal from the 340B program. Data Collection Burdens Contrary to prior assertions, a rebate model would impose new and significant data collection and reporting requirements. Existing systems, including 340B ESP, do not capture all necessary data elements for rebate processing, and compliance would require additional resources and system modifications. Cash Flow Impacts Unlike the upfront discount model, a rebate system would require North Shore Health to pay full price for drugs and wait for reimbursement, effectively providing interest-free loans to manufacturers. Even short delays would materially impact our already strained financial position, as evidenced by our recent operating losses. Cumulative Impact on Patient Care Taken together, these added costs and burdens would diminish our ability to use 340B savings to support patient care. The result would be reduced services and diminished access to care for our community. Reliance Interests North Shore Health reasonably relied on the longstanding upfront discount structure of the 340B program when making operational, staffing, and financial decisions. While the statute permits rebates, the consistent historical use of upfront discounts created legitimate expectations. Abruptly shifting to a rebate model would disrupt these reliance interests without any demonstrated need or benefit. Alternative Approaches HRSA has acknowledged that there are alternative methods to address duplicate discounts between the 340B program and the MDPNP. Given the substantial burdens associated with a rebate model, HRSA should pursue these alternatives. We support the American Hospital Association's recommendation to adopt a neutral third-party clearinghouse as a more efficient and less burdensome solution. Conclusion Sincerel The Honorable Thomas J. Engels April 15, 2026 Page 4 For these reasons, North Shore Health respectfully urges HRSA to abandon the proposed rebate model and instead pursue alternative approaches that preserve the effectiveness of the 340B program. If HRSA elects to proceed, it must provide covered entities with an additional opportunity to comment on the specific details of the program. At present, critical elements such as including drug scope, data requirements, dispute resolution processes, and rebate timelines remain undefined. Meaningful stakeholder input requires greater clarity. We appreciate your consideration of these comments and welcome continued engagement on this important issue, which has significant implications for the patients and communities served by the 340B program. er L. Wraalstad, FACHE O/Administrator North Shore Health, Grand Marais, MN
HRSA-2026-0001-1523Borinquen Health Care Center Inc.2026-04-15T04:00Z57,793 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Borinquen Health Care Center Inc. 340B ID CH040310 Entity Type HRSA - Funded Health Center State Florida In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors Walgreens and Wellpartner Contact Name Paul Velez Contact Email pvelez@borinquenhealth.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 90,000 contract pharmacy and in-house 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $3M in administrative 340B cost for contract pharmacy and in-house pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. This implimentation would absolutly crush the legislative intention of providing care to the uninsured and underinsured patients in our community though access to 340b medications by adding unneeded administrative cost which would negatively impact patient care. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 22 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 22 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 22 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 22 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 22 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 22 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 22 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 22 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 22 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 10 of 22 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. 3. Rebate Denials Process Page 11 of 22 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4. Data Collection By Covered Entities Page 12 of 22 340B Rebate Intake Form 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 13 of 22 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 14 of 22 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 15 of 22 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 16 of 22 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 17 of 22 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 18 of 22 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 19 of 22 340B Rebate Intake Form 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. Page 20 of 22 340B Rebate Intake Form 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 21 of 22 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. Page 22 of 22
HRSA-2026-0001-1524McKinney Medical Center Inc.2026-04-15T04:00Z59,020 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name McKinney Medical Center, Inc. 340B ID CH048080 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) N Contract Pharmacies (Y/N) Y List TPA Vendors RxPreferred, Walgreens, Wellpartner Contact Name Ola Smith-Carter Contact Email scarter@mckinneyhealth.com Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 2,500 contract pharmacy 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $375k in administrative 340B cost for contract pharmacy. Site Profile 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 26 340B Rebate Intake Form iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing and Labor Hours: Administrative and oversight time required to manage the 340B Program, including contract pharmacy coordination, eligibility maintenance, review of purchase and replenishment activity, claims oversight, audit preparation, and ongoing compliance monitoring. This includes involvement from finance, compliance, leadership, and operational staff. Third Party administrator Fees paid to contract pharmacies and third-party administrator. for claim processing, split billing services, program administration, auditing support, compliance consulting, and legal or technical advisory services related to the 340B Program. IT Systems and Software: Costs related to tracking 340B revenues and expenses Administrative Overhead: General administrative expenses such as program reporting, record retention, interdepartmental coordination, vendor management, and executive oversight required to maintain program integrity. Training and Education: Ongoing training and education costs to ensure staff remain current on evolving HRSA guidance, manufacturer restrictions, and best practices related to contract pharmacy operations within the 340B Program. Field Response i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Page 2 of 26 340B Rebate Intake Form ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 26 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 4 of 26 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 5 of 26 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 6 of 26 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 7 of 26 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 8 of 26 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 9 of 26 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 10 of 26 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 11 of 26 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. Page 12 of 26 340B Rebate Intake Form 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3. Rebate Denials Process Page 13 of 26 340B Rebate Intake Form 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4. Data Collection By Covered Entities Page 14 of 26 340B Rebate Intake Form 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. Page 15 of 26 340B Rebate Intake Form 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5. Duplicate Discount Prevention Page 16 of 26 340B Rebate Intake Form 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. Page 17 of 26 340B Rebate Intake Form 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 18 of 26 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 19 of 26 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. Page 20 of 26 340B Rebate Intake Form 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 21 of 26 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 22 of 26 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 23 of 26 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 24 of 26 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 25 of 26 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 26 of 26
HRSA-2026-0001-1525Anonymous Anonymous2026-04-16T04:00Z24,098 chars
See attached file(s) Our covered entity opposes the implementation of a pilot 340B rebate program. The 340B program has functioned as an upfront discount for 30+ years and there is no evidence to support the need to change even a portion of the program to a back-end rebate. Moving the 340B program to a rebate instead of the upfront discount, will require covered entities to pay the highest price possible for a medication and then navigate multiple processes to receive the rebate to get the 340B ceiling price. All these steps will reduce the time available for our 340B team to complete the tasks associated with ensuring that our program adheres to all 340B statutes. It is stated in the RFI document that in 2024 HRSA began receiving inquiries from manufacturers seeking to implement a rebate model to primarily limit the availability to MFP to 340B covered entities consistent with the nonduplication provision of the Medicare Drug Price Negotiation Program and to facilitate other aims such as the prevention of 340B Medicaid duplicate discounts and diversion. There are already established mechanisms in place to prevent diversion and Medicaid Fee For Service duplicate discounts and diversion. Compliance with these statutory requirements is enforced through HRSA audits and when appropriate, manufacturer audits of covered entities which has been an effective strategy for many years. Our covered entity is not against transparency in claims information in order to work with manufacturers in efforts to avoid paying duplicate discounts of any kind. Moving to a rebate program, however, to accomplish this claim sharing just results in harm to our CE in being able to utilize our 340B savings to stretch scarce federal resources as far as possible. There is no doubt that manufacturers also want access to this claims data to also reduce paying a duplicate discount to commercial payers. The Beacon 340B rebate site makes clear that any data submitted by CEs can be used to identify 340B claims so that manufacturers can enforce their voluntary commercial agreements with pharmacy benefit managers. These agreements entered into by the manufacturer and a PBM pays a rebate from the manufacturer to the PBM in exchange for inclusion on the PBM formulary. These agreements have been utilized for many years, and no doubt manufacturers have already factored into the financials of these agreements that without a reliable mechanism to identify 340B claims they would be paying some duplicate discounts. However, even with the duplicate discounts these agreements are financially beneficial to the manufacturers. These duplicate discounts are not part of the 340B statute and CEs should not be forced to provide this claim information in order to receive 340B pricing. Some of these savings will also be lost as expenses will increase for our CE because of the rebate program. The rebate program is biased towards meeting the interests of drug manufacturers at the expense of our CE and the patients that we serve. Implementing a rebate program, even for a subset of medications or other conditions, carries other concerns as well. It emboldens manufacturers, even those without medications in the IRA program, to implement their own policies that require CEs to submit data to receive 340B pricing. There have already been three manufacturers who have implemented these policies. During discussions with one of these manufacturers about their policy, it was stated by the manufacturer that the 340B rebate pilot program was proof that HRSA allows for their claim requirement policy because it was part of the rebate program. There are other viable, lawful and less burdensome alternatives that could achieve this claim sharing benefit allowing manufacturers to reduce duplicate discounts and not forcing CEs expenses and workload to increase through a rebate model. We urge HRSA instead to adopt a third-party neutral clearinghouse rather than a rebate mechanism. This clearinghouse could be used to support deduplication of any kind as well as program integrity. Claims sharing can be accomplished without requiring it to receive 340B pricing. This neutral clearinghouse would also remove the concern we have with the vendor, Second Sight Solutions (Beacon), that the manufacturers all chose for the initial 340B rebate pilot, the MFP effectuation process, and contract pharmacy claim submissions. A neutral clearinghouse would be a better alternative to manage these claims submissions. Given that there are potential alternatives to a 340B rebate program to address duplicate discount concerns, a significant question is why is HRSA choosing now after 30 years of upfront discounts to test a 340B rebate program? Given the potential negative impacts to hospital revenue from the pass of H.R. 1, and potential reduced reimbursement through the OPPS, the upfront savings from covered entities 340B program savings are going to be even more important to eligible hospitals. It seems counterproductive to implement a rebate program that will reduce the 340B benefit for CEs with all these other headwinds. Costs to Covered Entities As the result of the implementation of a 340B Rebate pilot for the 25 medications that are part of the 2026 and 2027 IRA, our CE expects to see at least a $3 million-dollar annual increase in costs. Obviously if the rebate program were expanded to include an additional set of medications this cost estimate would increase dramatically. a) Medication Costs a. Under a 340B rebate model we estimate that our medications costs would be increased by $2.2 million annually. In 2025, for the 25 IRA medications, that would potentially be included in a 340B Rebate Pilot, across all our service lines, our CE made a 340B purchase of one of these IRA medications 7,300 times for a total of 62,000 packages. This equates to approximately $66 million in 340B spent on these 25 medications. Under the proposed rebate model, where purchases must be made initially at WAC pricing, our CE would have to float the manufacturers $116 million in upfront dollars beyond what we would have spent for the same 25 medications at 340B pricing with the current upfront 340B discount. Receiving this $116 million back in the form of a rebate would be subject to manufacturers approval of each claim. If we assume that even just 1% of the submitted claims do not get a rebate paid, our CE would see a $1.1 million annual increase in medication costs. If 5% of submitted claims are not paid a rebate there will be a $5.8 million increase. Even if 100% of submitted claims are approved, being required to purchase these medications on our WAC accounts instead of our 340B accounts will result in increased cost due to the loss of the cost of goods discount that we receive from our wholesaler based on our contract terms. In the current upfront discount model, our CE pays the 340B ceiling price minus the cost of goods discount resulting in a final price that is less than the ceiling price. Under the rebate model, we would receive a rebate in the amount of the WAC price minus the 340B ceiling price and therefore the discount is lost. For our CE this loss of the cost of goods discount will equal an approximately $1.1 million increase in drug costs. b) Administrative Costs under a rebate model a. We utilize multiple third-party administrators (TPAs) to manage our program. Based on the planning that occurred for the initial 340B rebate pilot, each of these TPAs have different workflows and capabilities in terms of their ability to submit and track rebate claims submissions. This will result in the necessity of paying multiple TPAs for this service as well as managing multiple workflows. Additionally, we have had discussions with other software vendors that allow for the combining of data from TPAs or databases that may allow for a single rebate submission platform. The potential use of these other software vendors is advantageous for our covered entity, especially given that we have several 340B clean sites where we do not utilize a TPA. Basing the estimate of increased cost for these systems on the costs associated with the ten 2026 and fifteen 2027 IRA medications, we believe that if a rebate model were implemented for these medications, that the cost to our covered entity for these various systems could cost more than $750,000 per year. If additional medications are eventually included in this new rebate pilot proposal, these cost estimates would increase. This cost estimate would cover pulling and submitting claims, rebate tracking of submitted claims, and potential reconciliation of denied rebates. Our experience to date with manufacturers and the IRA rebate process informs us that there will need to be significant time spent validating rebate claims and following up on issues. c) Staffing Impacts a. The need for our covered entity to add additional staff to effectively manage a 340B rebate program would of course depend significantly on the scope of the rebate program that was put into place. However, it is likely that at least two additional staff member will need to be added to our team at some point. Likely after we have worked with the rebate program for a significant period and developed a better understanding of the details of how the program is working. For example, in our limited experience so far with the process manufacturers are using to deduplicate 340B and MFP rebate claims, the process that manufacturers are using is inaccurate and leading to significant work and follow-up by our team. These types of issues are also likely to be present in a rebate program and once experience is gained would likely lead to the need to add additional staff to manage the program. In addition, based on the complexity and size of our 340B program and the work already having to be completed for the MFP rebates, HRSAs original estimate of 2 hours per week for the CE to manage a rebate program is a gross underestimation. Our estimate is that just for the 25 IRA medications likely to be included in this rebate pilot, our CE would likely need at least 40-60 hours per week dedicated to this process. The additional staff would be permanent and would manage the rebate program through the entire cycle from pulling claims to ensuring that rebates were paid and following up on unpaid rebates. d) Systems and Infrastructure a. Our CE has designed and optimized our technological systems and operational infrastructure around the upfront discount model that the 340B program has operated under for 30 plus years. Any shift to a rebate mechanism will force us to incur costs to modify these systems. As discussed under the administrative cost section, in addition to the need for our TPA vendors to develop workflows within their software to support a rebate program, for our CE that uses multiple TPAs or does not use a TPA in some areas, we will likely be forced to implement another third party system to manage this process. The implementation of this additional system will likely require 80-100 hours off build time for our CEs IT team and 340B team to create the necessary data feeds and rules. Additionally, the approval of these software systems can take 3 months or more, meaning that depending on when the software is approved the time to complete the build time available before a rebate program went into effect could be short. During preparation for the initial 340B Rebate pilot, the ability to obtain the medical claims data was extremely difficult, particularly the information required for the payer information. This payer information is not data that the TPA typically ingests from our CE. In addition, since our CE has many 340B clean sites that dont use a TPA the only way to obtain this information is from our electronic medical record. While these reports were able to be created, modifying them to include additional rebate NDCs will require additional IT support and resources. Because this medical claim information must be obtained from the EMR system, it is not available until after the patient has been billed for their care. This will result in delays in getting the claims submitted within the 45-day window from the date of administration. e) Potential Impacts of these additional costs and burdens a. While no specific programs or services have been identified at this point, these increased costs associated with a 340B rebate pilot program would likely lead to reductions in programs/services that would impact our patients. We rely on the savings from the 340B program to support underperforming services and to provide medication assistance for our patients. Rebate Denials a) If a rebate model was not implemented, and instead efforts were put into developing a neutral clearinghouse where claim submission was not tied to 340B pricing in any way, then there would be no need for a rebate denial process. The drug manufacturers would have the necessary data to prevent paying a duplicate discount to the payer and CEs could continue to receive the long standing upfront discount. If a rebate model is implemented, there must be a very specific rule that defines what constitutes a complete and accepted data submission. This definition should be made by HRSA and should not be left to the manufacturer to determine in their specific policies. There should be no grey area in what complete and accepted data submission means and the same definition should apply to all manufacturers. To avoid delays in receiving the rebate and costly resources spent trying to communicate with drug manufacturers about rebate status, a rebate submission should be considered accepted if it includes all the required data elements and a discount on the same claim has not been paid to another CE. The latter would only apply to contract pharmacy claims. Covered entities should not have to submit additional data to get the claim approved. For example, for MFP rebates, manufacturers are requiring CEs to submit claim information to 340B ESP from claims prior to January 1st, 2026 in order to get the MFP rebate approved. If there is not a very specific definition there will be unnecessary delays in CEs receiving their rebate. Rebates should not be denied based upon MFP duplication as the MFG would have the data necessary to not pay the dispensing pharmacy the MFP but should pay the 340B rebate. Consideration should also be given to extending the length of time CEs have to submit claims data after the date of administration. The 45 days to submit a claim after the date of administration/dispense in the previous rebate pilot program seems to have been selected as it matches manufacturers contract pharmacy restriction policies. This 45-day timeline should be extended to 90 days. The rationale for this is to ensure that covered entities have adequate time to audit all their claims, both 340B and non-340B, to ensure that a final determination of the 340B status has been made. For our CE which utilizes multiple audit periods (weekly, monthly, and quarterly) to ensure 340B eligibility, a longer submission time would allow for all these audit steps to be completed to ensure rebate accuracy. While the initial 340B rebate pilot proposal including language regarding this, plan should ensure that covered entities are allowed to submit and report data for up to 45 calendar days from the date of dispense, with allowances for extenuating circumstances and other exceptions including when a 340B status change occurs on a claim, none of the manufacturers rebate plans included any allowances for this situation. Consideration should also be given to providing for a grace period for a predefined period of time from the start of the rebate pilot where CEs can submit their claims without having to carry out additional work to ensure that a WAC purchase was made prior to the claim submission. While CEs will no doubt work to purchase as many accumulations available before the rebate pilot would go into effect, that will not be possible for all medications, especially if all IRA medications would be included. Either through medication shortage or other manufacturer allocations, our experience is that for many medications wholesaler quantities will not allow for all accumulations to be purchased. While some of the manufacturer plans provided for some exceptions for these accumulations, the process varied from manufacturer to manufacturer and these variances added complexity to the rebate pilot. If a grace period was implemented it would allow CEs to submit these claims and receive a rebate even if they had not yet had to make a WAC purchase. For this rebate pilot, HRSA should provide direct oversight and there should be quick timelines for resolution of rebate disagreements between covered entities and manufacturers. The process for this should be specifically detailed in the proposal. The previous 340B rebate pilot language was too vague on this. The dispute resolution should not depend on the ADR process as that is an extended process that can take several months and CEs should not have to wait to receive their rebate. A Good Faith process contained within Beacon is not a sufficient process and should not be utilized for a rebate pilot. Data Collection by Covered Entities a) We utilize multiple third-party administrators to manage our program. We audit our claims data through both routine internal and external mechanisms. Currently all contract pharmacy submissions to 340B ESP occur on a weekly basis and the submissions are completed manually by our 340B team and not through any of our TPAs. Since our CE has entity-owned retail pharmacies, most of the current manufacturer contract pharmacy restriction policies do not allow our CE to designate any contract pharmacies. As a result, the volume of claims submissions is much lower than it would be for a 340B rebate pilot. The work needed to pull, organize, submit, and track these claims would be increased with a rebate model which is a reason at additional FTEs would likely be necessary if a rebate model were to be put into place. When contract pharmacy claims are submitted, we are only required to submit seven data fields. Supplying the retail pharmacy claims would require the inclusion of an additional four data fields to be submitted each time including providing payer information. This is the only data being supplied to a third party currently. The requirement to supply medical claims for facility administered medications represents entirely new work for our CE. This requires major modifications by our TPAs to attempt to ingest this information from our data. At this point we have not been 100% successful in finding a mechanism to get this information into our TPA. We also have some 340B clean sites that do not utilize a TPA and will need other mechanisms to retrieve and submit this information particularly in regard to the payer information. This payer information exists in different databases than dispensing information and creating a process to combine them into one data source requires extensive work. If a 340B rebate pilot program is implemented, providing the retail claims data is more feasible than the medical claims data as the data points from the original rebate pilot are available data points. A requirement to supply wholesaler invoice data, however, would be a challenge for our CE as the TPA we utilize for our in-house retail pharmacy does not have the capability to track which claims were allocated to a specific invoice. Given that a significant justification for implementing a 340B rebate model is to assist manufacturers in avoiding an MFP duplicate discount, and that it appears that IRA drugs would be included in a future rebate model, perhaps any implementation of a 340B rebate model could be limited in scope to retail pharmacy claims for Medicare Part D only. MFP rebates are only paid on Medicare Part D claims and those claims are only billed by retail pharmacies for prescriptions. There are already mechanisms in place to prevent Medicaid duplicate discounts for all medications, including the IRA medications, used in other areas such as the MEF and claim modifiers and there is no risk of MFP duplicate discounts in these areas. Manufacturer Efforts to Avoid Duplicate Discounts a) While our experience thus far with Beacon MFP is limited to just three months, we have already experienced that the Good Faith Inquiry process is cumbersome and requires the CE to submit additional data and to expend significant time and resources on attempting to obtain the MFP rebate. Currently it takes approximately 5 hours per week just managing the GFI process on Beacon MFP. We fully expect these issues and the time needed to be even more compounded if Beacon is used for the rebate model as well. Other general issues our CE has encountered with Beacon (340B ESP) include forcing CEs to accept their terms and conditions or not have access to submit claims and lose out of 340B benefit, and errors made by Beacon including attributing 340B purchases to the wrong pharmacies causing 340B pricing to be incorrectly removed at contract pharmacies. When our CE has found these errors and communicated them to Beacon it often requires our CE to submit data to refute the data in 340B ESP and often requires several weeks to months of back and forth to resolve the issue. In general, there is a lack of transparency with Beacon on these issues. In one example 340B ESP loaded incorrect purchase amounts for one of our contract pharmacies. After sharing purchasing data with them they admitted that there was an error in their system. While they corrected that error, they refused to share what the root cause of the error was, stating only that it was an internal error. Later we identified similar purchasing discrepancies on 340B ESP with the same contract pharmacy and submitted a ticket with them. It took 4-6 weeks of time for Beacon to resolve this issue. These examples are further reasons that a neutral claims clearinghouse that is not financed by the drug manufacturers would be a better solution than a rebate model. Given the additional work that a rebate model would create, adding more work to get outstanding issues caused by the rebate platform vendor will strain our 340B resources even further. Required Reporting a) A 340B rebate program, even in the form of a pilot, only provides benefits to manufacturers. There is no benefit and only additional burden and costs to CEs. At least quarterly, manufacturers should submit at least the following data. HRSA should make this data publicly available as well a. Number of claims submitted for the 340B Rebate pilot medications b. Number of claims approved for the 340B Rebate pilot medications c. Number of claims denied for the 340B Rebate pilot medications i. Including detailed breakdown of the denial reason d. Time required to approve each claim e. Number of claims approved after 10 calendar days f. Time from when claim was approved to when payment was made to CE g. Net revenue for each rebate medication Reliance Interests a) The 340B program has operated as an upfront discount program for 30+ years since its inception. Our CE has relied on that history when designing our internal operations, staffing, third party contractual relationships and financial planning for the use of our 340B savings. A switch from this upfront discount to a rebate model would disrupt these reliances. Given no stated valid reasons, that cannot be remedied through other mechanism, this no reason to switch to a rebate mechanism and disrupt our 340B operations.
HRSA-2026-0001-1526AAPCHO2026-04-16T04:00Z13,583 chars
The Association of Asian Pacific Community Health Organizations (AAPCHO)submits the attached comments. April 19, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engles, Thank you for the additional opportunity to provide comments on a potential 340B Rebate Model Pilot Program and the impacts on community health centers. From the Association of Asian Pacific Community Health Organizations (AAPCHOs) perspective, there are no potential benefitsand significant costs to patients and health centersof the rebate model. We advise in the strongest possible way to cease consideration of any 340B Rebate Model Pilot Program that applies to community health centers. AAPCHO is a national nonprofit association of community-based health provider organizations, primarily federally qualified health centers, dedicated to improving health access and outcomes for Asian Americans, Native Hawaiians, and Pacific Islanders in the United States and the U.S. Affiliated Pacific Islands. Our members collectively service nearly three-quarters of a million patients each year, most of whom are low-income and rely on the Health Center Program as their only feasible option for primary care and access to affordable medications. The 340B program is critical to AAPCHOs member community health centers, as well as health centers across the country, allowing them to stretch scarce resources and better serve our communities and patients, all at no cost to taxpayers. AAPCHO member health centers agree that 340B savings have allowed them to reinvest these savings to better support patient care and direct serviceas the program was originally intended. We recognize that the health care landscape has changed dramatically since its operating guidance was established in 1992. Health centers face additional demands to provide patient care, and uncertain fiscal environments and the tight margins they operate on. We strongly believe that Congress must act to modernize and clarify 340B in statuteaffirming Congressional intent and safeguarding the ability of health centers and other HRSA grantees to stretch federal resources to reach those most in need. That said, the imposition of a mandatory new delivery model is one step too far. AAPCHO and our health center members acknowledge HRSAs intent to address certain concerns with the 340B program. But a potential 340B rebate model pilot is a major deviation from how the program is currently operated and will cause significant disruption and harm to community health centers. It introduces new administrative and financial challenges on health centers that the proposal does not fully address. Unlike the current point-of-sale discount model, the proposed rebate model would require health centers to purchase drugs at higher upfront costs and wait weeks or months for reimbursement. Health centers are already operating on razor-thin margins, and this delay would jeopardize cash flow and increase administrative burden, potentially compromising the ability of health centers to serve patients. Additionally, the ten drugs included in the pilot are highly utilized by health center patients, creating significant risk that health centers will face unsustainable upfront costs. One AAPCHO member health center reports that the total number of prescriptions with a MFP drug dispensed in 2025 is 20,670. The total number of prescriptions dispensed in 2025 was 791,789; the percentage is 26.1% of MFP drugs dispensed in 2025. In other words, the reimbursement for the 10 MFP drugs is about 20% of NEMS total reimbursement, not considering the drug cost. We recommend in the strongest possible way that HRSA: Exempt federally qualified health centers from participation in the pilot. If HRSA moves forward with the pilot, community health centers and other grantees should not be required to participate. If health centers are required to participate, ensure full reimbursement of health center costs associated with complying with the rebate model, including initial and ongoing staffing, training, IT, data privacy, and cybersecurity needs. If participation in the pilot is required, manufacturers should also provide initial funding to health centers to sufficiently cover the initial shock of purchasing undiscounted drugs as they transition to the rebate model. This aligns with HRSAs previously proposed requirement that no additional administrative costs of running the rebate model shall be passed onto the covered entities. Our specific responses to the RFP follow: 1. Costs to Covered Entities Administrative Costs Under a Potential 340B Rebate Model Pilot Program The rebate model introduces new reporting and claims submission processes that will introduce new and expensive administrative burdens on health centers. Among the most expensive required investments, IT infrastructure and cybersecurity systems will need to be updated. This is a significant upfront cost for which funding or reimbursement is not available. Whats more, while the proposed pilot program requires manufacturers to cover the costs of submitting data through an IT platform and any related administrative costs, it provides little additional details to the types of administrative costs or the mechanisms by which manufacturers will not pass such costs on to covered entities. HRSA must ensure that such costs are borne by the manufacturer so that health centers are not required to divert resources away from patient care. Until funding is available to health centers for the necessary administrative and infrastructure upgrades, health centers should not be required to participate in any pilot. It is also important to balance the upfront costs that CHCs will experience. Nine of the 10 drugs included in the pilot are heavily utilized leading up to a 79% increase in upfront costs that health centers will need to pay for up frontand wait for reimbursement. Staffing Impacts The proposed rebate model will require more staff and more staff training. Health centers' existing pharmacy staff have full time jobs managing patient care and safety and efficiently operating the pharmacy. To implement the rebate model, health centers would need entirely new staff positions to figure out what changes need to take place, what implementation looks like, and to train staff. In addition, existing staff will need to learn the new platforms and how to operate the new systemstaking time away from their existing responsibilities. This adds an additional upfront staffing cost with no way to offset these outlays. For example, Waianae Coast Comprehensive Health Center, an AAPCHO member, has 3 full time 340B/Pharmacy staff members. They have done modeling and sample reports in preparation of a potential launch of the rebate pilot and estimate a huge upfront staffing investment for these three stafferson top of their existing portfolio. And the work doesnt end once the pilot startsall subsequent reports would need to be double checked for accuracy and quality. So the work is ongoing and intensive. Another health center anticipates needing 1-2 new full time employees to manage the rebate process and responding to different data requests. They cite all the different requests for data, reporting, and inquiries. In addition to the rebate model and the significant burden it will impose, individual manufacturers are also requesting more and different data. This complex set of requests is an expensive burden on health centers. System and Infrastructure for Implementation of Pilot Program The proposed pilot program would implement new data systems to submit claims data for the 10 drugs covered under the rebate model. This would effectively force health centers to simultaneously operate three different drug pricing systems: the new 340B pilot for 10 drugs; the standard 340B program; and the sliding fee scale program. This has the potential to create confusion, compliance risks, and inefficiencies. Moreover, the proposal requires new data sharing that could be used to discriminate against health centers and patients now and in the future. This will also result in additional staffing timethe complexity of multiple systems and competing workflows will increase administrative burden and require more staff hours to reconcile. Other Anticipated Impacts of a 340B Rebate Model Pilot The proposed pilot program would create uncertainty for uninsured patients and patients on the sliding fee scale where the 340B price would be unknown at the point-of sale. Under a rebate model, health centers would be unable to guarantee the discount drug price to uninsured patients or patients on the sliding fee scale (populations the Health Center Program was designed to serve), potentially putting those medications out of reach. From a patient care perspective, health center staff will also have to change their work flow with regards to figuring out what medications patients need, the impacts on ordering and supply, and how to get alternative medicines if needed. In addition to the additional administrative burden on the health center staff, this adds complexity and confusion for patients who will not understand the availabilityor lack thereofof medications and why there may be changes in what is available. The proposed pilot program does not address the interaction between the rebate model and covered entities with contract pharmacy agreements. Health centers may be forced to enter into new agreements with contract pharmacies, adding to administrative burden, or could face new liabilities or reduced access points for patients. Health centers should be held harmless for any cost adjustments and should not become liable for the contract pharmacy fees and costs. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities While the proposed pilot program requires manufacturers to approve or deny claims within 10 days of data submission, it also provides 45 days for covered entities to submit claims data. This could lead to delays of 55 days or longer before rebates are received, potentially disrupting pharmacy operations, forcing health centers to reduce staff, or limit the availability of discounted medications to uninsured patients. Moreover, fronting the costs of expensive, highly utilized drugs could force health centers to rapidly burn through reserves, take out costly lines of credit, or reduce patient services elsewhere-an outcome that is antithetical to the original intent of the 340B program. It will be important to strictly enforce manufacturer repayment timelines to avoid cash flow disruptions that could jeopardize health centers ability to procure and dispense medications. Health centers are already operating on razor-thin margins, and manufacturers must be held accountable to the 10-day repayment window to ensure no further disruptions to health center cash flow. 3. Rebate Denials Without strong and regular oversight of manufacturer behavior, including quarterly reporting of denial rates and HRSA-led audits, health centers will not be protected from improper delays or denials. It is important to establish a clear adjudication and appeals process that allows health centers to cure claims issues promptly. HRSA should require each plan submitted by manufacturers to include a strong and clearly defined appeals process and the opportunity for health centers to cure any issues with claims as quickly as possible. HRSA, not manufacturers, must have the final say in resolving denials and disputes. 4. Data Collection by Covered Entities These requirements are new for AAPCHO members. Waianae Coast Comprehensive Health Center, for example, does not currently submit any information on claims to ESP. This will be an entirely new burden that adds time and staffing burden. 5. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Health centers are using the existing 340b programs as intended and reinvesting savings stretch scarce federal resources and improve patient care consistent with the congressional intent of the program. AAPCHO appreciates HRSAs goal of addressing program integrity concerns, but we urge the agency to balance those goals with the significant constraints the rebate model will impose on health centers nationwide. If HRSA moves forward with the pilot program which again, we oppose AAPCHO recommends that HRSA preserve health centers as the medical lifeline and delay implementation in health centers for at least one year after the pilots initial implementation to provide an appropriate on-ramp for health center implementation. In conclusion, the 340B program has been essential to supporting health centers in carrying out their mission to provide care to those most in need. Given that health centers account for only a small share of total 340B purchases, we strongly urge HRSA to delay applying the rebate model pilot program to health centers until its processes, systems, and reimbursement mechanisms have been fully tested and proven stable. Sincerely, Jeffrey B. Caballero, MPH Executive Director Association of Asian Pacific Community Health Organizations
HRSA-2026-0001-1527Lowell Community Health Center2026-04-16T04:00Z45,327 chars
See attached file(s) April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Lowell Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Lowell Community Health Center, established in 1970, is the healthcare home of choice for over 38,000 individuals in Greater Lowell. Guided by The Power to Care, we provide comprehensive, high-quality services that help people stay healthy and connected to care, ensuring every patient is welcomed, understood, and supported. We help patients get the care they need, regardless of their ability to pay. If cost is a concern, we can guide patients through applying for insurance or checking if they qualify for our sliding fee scale. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Lowell Community Health Center in particular, this means it will impact: Approximately 85,000 340B transactions/ Over 38,000 patients served Current admin costs for your 340B program $3,559,478 We reinvest our 340B revenue to expand access to comprehensive, patient-centered care by supporting chronic disease management through multilingual technology and outreach, ensuring continuous engagement, coordinated specialty referrals, and access to essential equipment like Continuous Glucose Monitors. Funds also sustain clinical pharmacist services for medication management, adherence support, and prior authorizations, alongside prevention programs including nutrition, food-as-medicine, tobacco cessation, and health education. Additionally, we provide critical support for patients with behavioral health needs, including substance use disorder and mental illness, and invest in capital improvements such as new and mobile care sites and maintaining existing facilities to better serve our communities. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be 3 disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Lowell Community Health Center provided $461,904 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Staffing Impact: Lowell Community Health Center anticipates needing 2.1 additional FTEs as a result of rebate model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Lowell Community Health Center anticipates an increase of $130,000 Anticipated Additional Costs Related to Rebate Model for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Lowell Community Health Center anticipates requiring an additional 0.5 (FTE) in analytic capacity to meet the increased reporting demands associated with this program. Community Health Centers like ours serve vulnerable populations while operating on extremely tight margins, leaving little room to absorb new financial burdens. The impact of this pilot program would introduce significant added costs, including substantial upfront expenses for purchasing medications, increased labor demands to manage program requirements, ongoing inventory carrying costs, and the risk of financial losses from discounted or expired drugs that may not qualify for rebate recovery. For many CHCs, these cumulative pressures are simply unsustainable. At Lowell Community Health Center alone, we project that these factors would drive annual costs up by more than $2 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Lowell Community Health Center estimates over 10 hours each week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Lowell Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 38000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $260,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This would require us to manually add AAC price files in order to submit 340B net acquisition cost to certain Medicaid claims. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with 16 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across one in-house pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Middlesex County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.8 Clinic Administered Drugs: The Burden of New Systems Required 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, 9 Internal NACHC survey data 8 will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Lowell Community Health Center pharmacy helps make medications more affordable by combining discounted purchasing, clinical collaboration, and patient support services. Through the 340B Drug Pricing Program, Lowell Community Health Center pharmacists work closely with clinicians to optimize cost-effective therapy by selecting generics, using therapeutic alternatives, and following evidence-based formularies that prioritize high-value medications. In addition, Lowell Community Health Center Pharmacy assists patients with enrolling in insurance or medication assistance programs, help navigate prior authorizations, and offer adherence services such as medication synchronization and counseling. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations data, we estimate it would cost $909,258 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $37,962 to purchase these same drugs at the 340B ceiling price. This represents a 744181% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. In fact, the cumulative financial strain could ultimately force us to consider closing our pharmacy, which would create significant hardship for our patients who rely on us for affordable medications and care. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Lowell Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Clinical Pharmacy Program which included our medication therapy management (MTM) program for complex diabetic patients. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund our full-time Community Health Workers. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2812 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Lowell Community Health Center asserts that taking out a loan or securing an extended line of credit to fund drug procurement is not a viable option for our organization. Even if such financing were available, it would represent a high-risk strategy that places us in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient care funds toward interest payments, origination fees, and ongoing debt service. Relying on credit to float manufacturer rebates is particularly risky at a time when our other major revenue sources remain unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Lowell Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $246,346. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Lowell Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $131,195. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Lowell Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Lowell Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $136,389 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion 14 Lowell Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Lowell Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Lowell Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amy Sullivan PharmD RPh, Senior Director of Pharmacy Services at AmySu@lchealth.org. Sincerely, Susan West Levine, CEO Lowell Community Health Center
HRSA-2026-0001-1528Sarah Carter · Louisville, KY, United States2026-04-16T04:00Z1,581 chars
I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients.
HRSA-2026-0001-1529CommonSpirit2026-04-16T04:00Z5,949 chars
See attached file(s) CHI St. Alexius Health Imagine better health." Carrington Medical Center 800 North Fourth Street PO Box 461 Carrington, ND 58421-0461 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Carrington Health Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Carrington Health Center that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Carrington Health Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter most-our patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appeal-resources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Godh Hwdanes Jodi Hovdenes President, CHI Carrington Health Center CHI Carrington Health Center Carrington, ND Apr 20,2026 CommonSpirit Health HHS Docket No, HRSA-2026-03042 CommonSpirt As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1530(no commenter metadata)2026-04-16T04:00Z11,876 chars
See attached file(s) 1 April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of The Maine Hospital Association located in Augusta, Maine, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer to this question is simply no. As explained below, any rebate mechanism will impose enormous costs and burdens on our 25 member hospitals that currently participate in the 340B Discount Drug Program that far outweigh any benefits that might come from it. We believe that HRSAs calculations of costs are extraordinarily inaccurate and understated. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which our 340B member hospitals have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Maine Hospital Association has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs 2 and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that our 340B member hospitals can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Maines 340B eligible hospitals to spend significant sums on new administrative costs. When our 340B member hospitals chose to participate in the 340B program, they understood that they would incur some reasonable administrative costs. Hospitals designed hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our member hospitals that go far above and beyond what they had expected and planned for as a 340B hospitaland far above and beyond what they are experiencing now. We preliminarily estimate that Maines 25 340B eligible hospitals would incur approximately $55 million in annual incremental administrative and operational costs associated with moving to a 340B Model Rebate Pilot Program, there could also be significant one-time startup costs associated with the transition to a rebate model. We believe that these one-time costs are difficult to estimate at this time. The key cost drivers for these additional costs are increased staffing in general, diverting current staff, IT systems, third-party vendors, compliance activities, and establishing a process for challenging denials. Specific activities or functions these incremental costs would cover include claims processing, data submission, reconciliation/chasing down rebates, audit support, and challenging denials. Staffing Impacts Under a Potential 340B Rebate Program. Maines 340B eligible hospitals do not currently have the staff needed to comply with a Rebate Program. Implementation of a potential 340B Rebate Model Pilot Program would require Maines 340B hospitals to hire an estimated 35 additional full-time employees or would cause current medical provider employees to reallocate work hours from medical care to perform administrative functions There would also be significant lead time required to hire this many qualified staff, if qualified staff to fill these positions could be identified at all. HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. We believe that the actual number of hours per week would greatly exceed that estimate Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our 340B member hospitals have designed their technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force them to incur significant costs to change those systems, potentially costing millions of dollars. 3 Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Maines 340B eligible hospitals to effectively provide drug companies with interest-free loans as they await the discounts that they are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our member hospitals and the patients they serve. Requiring hospitals to wait ten 10 calendar days after submission of a complete claim would create a significant negative cash flow impact on Maines 340B hospitals, which would be extremely problematic. We also believe that it is also likely that these rebate payments would have the potential to actually be paid well beyond the 10-day period. o Our 340B member hospitals simply do not have sufficient cash on hand to withstand a rebate model the median in Maine in 2024 was 9 days. o Furthermore, there is a high likelihood that such a rebate model would put some hospitals at risk of violating their bond covenants. o Many Maine hospitals also have loans or other financial covenants that contain certain liquidity requirements that could be impacted by having to float money to the drug companies as would be required under a rebate model. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that our 340B eligible hospitals will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Some hospitals will no longer be able to subsidize physician practices, provide needed behavioral health service, provide substance use treatment services and provide labor and delivery services as a result of these additional administrative costs. Many of Maines 340B hospitals would also have to delay or cancel critical projects due to these additional administrative costs. Examples would include emergency department renovations, installation of electronic medical records and expanded emergency transportation services. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Maines 340B eligible hospitals reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. 4 A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like our members, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our 340B eligible hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, The Maine Hospital Association respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow the Maine Hospital Association and other entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, David Winslow Vice President of Financial Policy Maine Hospital Association THEMHA. ORG | (207) 622-4794 | 33 FULLER ROAD | AUGUSTA, ME 04330
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Comment Letter for Holy Cross Hospital-Salt Lake Holy Cross Hospital-Salt Lake 1050 E South Temple Street Salt Lake City, UT 84102 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Holy Cross Hospital-Salt Lake, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA). Holy Cross Hospital-Salt Lake was founded in 1875 and is currently a 158 bed hospital that provides life-saving care to the residents of Salt Lake County, Utah. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Holy Cross Hospital-Salt Lake that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 SHoly Cross Hospital-Salt Lake relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Bryan McKinley Hospital President Holy Cross Hospital-Salt Lake, Salt Lake City, Utah As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
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See attached file(s) Jamie D. Bailey, MBA, CPA, CFE Executive Vice President & Chief Financial Officer The University of Texas Medical Branch 301 University Blvd. Galveston, TX 77555 Office: (409) 266-2008 Email: jdbailey@utmb.edu April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: The University of Texas Medical Branch (UTMB) appreciates the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. Among other things, this RFI asks if HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for more than 30 years. The simple answer is no. UTMB strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B since its inception. Implementing a rebate model only increases costs and administrative burdens for the safety net providers that Congress intended to benefit from 340B. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot. UTMB BACKGROUND UTMB is part of the University of Texas System. UTMB opened in 1891 as the nations first public medical school and hospital under unified leadership. What began as one hospital and medical school building in Galveston, Texas is now a major academic health sciences center with five schools and comprehensive health system with hospitals on four campuses and an extensive network of clinics in the greater Texas Gulf Coast area. Growth in part has been driven by the influx of residents in the area and corresponding demand for health care services. Table 1: UTMB by the Numbers Key Indicator Description 14.67% Disproportionate share hospital percentage for fiscal year 2025 $95 million Uncompensated care provided for Fiscal Year 2025 $3.3 million Unreimbursed cost for Medicaid, CHIP, State, and Local Indigent Care Programs for fiscal year 2025 7.4 million Prescriptions and clinician administered 340B medications 20%1 Number of Galveston residents living in poverty 13.5%2 Number of residents living in poverty in Galveston County which is higher than the national average 1. UTMB Institute for Translational Sciences, REACH Coalition, and UTMB School of Public and Population Health. Overview: Galveston-Area Community Health Assessment December 2025 2. Evans S, Johnson D, McCormack J, et al. Galveston County Health District. Galveston County Community Health Needs Assessment. 2024. UTMB is firmly committed to maintaining the integrity of the 340B program and currently dedicates substantial administrative resources to support ongoing oversight and compliance. This includes five full-time staff solely dedicated to the administration and monitoring of the 340B program, as well as the implementation of specialized split-billing software to ensure accurate and compliant operations. A 340B Compliance Committee comprised of numerous stakeholders from across the institution is maintained. The Committees purpose is to review, address, mitigate, and resolve perceived or realized compliance issues. This includes review of ongoing routine self-audits and 340B policies and procedures. The Committee reports to the Executive Institutional Compliance Committee, which is comprised of UTMBs President and Executive Leadership. In addition, UTMB has engaged a 340B third-party administrator to support contract pharmacy activities and retains an independent external auditor to conduct annual reviews, further reinforcing program integrity and compliance. RESPONSE The 340B Drug Pricing Program is critical to UTMB Health and the patients and communities we care for. Academic medical centers (AMCs), like UTMB Health, are a vital part of the nations health care safety net, ensuring access to innovative technology, research, and health expertise for the most medically and socially complex patients. We provide highly specialized health care services that are often unavailable in other settings, including oncology services, transplant surgery, trauma care, pediatric specialty care, and treatment for rare and complex conditions. AMCs share a common mission to care for the underserved, making these life-saving services available to all patients, regardless of their ability to pay. This commitment to high-quality care, regardless of a patients source of coverage or socioeconomic status, can create significant financial challenges. The 340B program helps us to navigate these challenges, supporting our ability to maintain, improve, and expand access to care. Hospitals participate in the 340B program only if they can demonstrate that they serve a disproportionate level of low-income patients. Participation in the 340B program allows hospitals to increase and expand access to services that would otherwise be unavailable including recruitment of physicians to provide a variety of specialty services and adding new clinics. Unlike other federal programs, financial support from 340B comes directly from pharmaceutical companies, as a condition of their participation in the Medicare and Medicaid programs, and not from taxpayers. Although this is an area of criticism by drug manufacturers, a report prepared for the American Hospital Association by Healthsperien indicates that 340B discounts account for a small portion of drug manufacturer revenues (https://www.aha.org/system/files/media/file/2024/03/The-340B-Drug-Pricing-Program.pdf). In fact, manufacturers continue to report growth and revenue in the billions on their financial statements (Table 2). Table 2: Financial Reports Pharmaceutical Manufacturer Report Highlights Lilly1 Revenue worldwide increased 43% to $19.3 billion in Q4 2025 Revenue in U.S. increased 43% to $12.9 billion in Q2 2025 In Q4 2025 net income was $6.6 billion Novo Nordisk2 Sales have risen year over year since 2021 from $140.8 to 309 billion Sales increased 6.4% to $309 billion in 2025 Net profit increased 5% to $116.4 billion in 2005 Bristol Myers Squibb3 Revenue increased 17% to $48.2 billion in 2025 $14.2 billion in cash flow Amgen4 Revenue increased 10% to $36.8 billion in 2025 Fourteenth consecutive year of dividend growth. Amgen shares increased 26%, outperforming the S&P 500, which rose 16% over the same period $8.1 billion in cash flow Novartis5 Net income increased 17% to $13.9 billion in 2025 $17.6 billion in cash flow Johnson & Johnson6 Sales grew 5.3% to $94.2 billion in 2025 Net earnings $26.8 billion Nearly $20 billion in cash flow Merck7 Net sales $21.1 billion in 2025 Net Profit $2.6 billion $3.9 billion in cash flow 1. Lilly reports fourth-quarter 2025 financial results and provides 2026 guidance. https://investor.lilly.com/news-releases/news- release-details/lilly-reports-fourth-quarter-2025-financial-results-and-provides 2. Annual Report 2025. https://www.novonordisk.com/content/dam/nncorp/global/en/investors/irmaterial/annual_report/2026/novo- nordisk-annual-report-2025.pdf 3. 2025 Annual Report. https://www.bms.com/assets/bms-ar/documents/2025/2025-bms-annual-report.pdf 4. Amgen Letter to Shareholders 2025. https://investors.amgen.com/static-files/a79e4932-280d-41ee-9ca4-25b6ea49c704 5. Novartis Annual Report 2025. https://www.novartis.com/sites/novartis_com/files/novartis-annual-report-2025.pdf 6. 2025 Annual Report. https://www.jnj.com/download/johnson-johnson-2025-annual-report 7. Merk Annual Report 2025. https://reports.emdgroup.com/en/annualreport/2025/_assets/downloads/entire-emd-ar25.pdf UTMB disagrees with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities, and those audits show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in the 340B Program. In fact, manufacturers have openly stated that they want to use covered entity claims data to avoid paying commercial rebates to pharmacy benefit managers (PBMs). Agreements with PBMs are voluntary agreements that ensure manufacturers receive beneficial treatment and placement under the PBMs formulary. This purpose has nothing to do with 340B program integrity and statutory requirements to prevent duplicate discounts. Covered entities should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the burden and costs of data sharing by being required to purchase drugs at non-340B prices to assist with policing manufacturers commercial agreements. As explained below, any rebate mechanism will impose unreasonable costs and administrative burdens on UTMB that far outweigh any benefits to manufacturers that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which UTMB has relied on for years, is the best way to fulfill the purpose of the 340B program. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. UTMBs 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party administrators, and the resources we have available to support patient care, are built around upfront discounts. Moving to a rebate model would disrupt well-established processes, procedures, and safeguards grounded in decades of consistent implementation of the 340B Program through upfront discounts. The RFI poses many questions and encourages commenters to include supporting facts, research, and evidence in their responses. UTMB has done its best to provide detailed answers in the limited time allowed. For purposes of estimating costs, it was assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original pilot and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027. With the addition of the 2027 drugs, cost estimates have increased over the estimates calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that will need to be floated to drug companies while awaiting the statutory discount, likely more disputes over delays and denials, and therefore less money that UTMB has to spend on patient care and associated services. Since UTMB has always relied on upfront discounts and never accessed 340B pricing through rebates, it is also impossible to quantify the full impact and to capture all rebate-related costs. Proposed Alternative If HRSA chooses to move forward with a change to the 340B program, there are significantly less burdensome alternatives to rebates that HRSA could implement. For example, universal 340B claims modifiers could be implemented, and a singular neutral, third-party clearinghouse could be established. The Department of Health & Human Services could then require state Medicaid agencies to adopt a process like the Oregon Medicaids process of preventing Medicaid duplicate discounts. Claims could be collected from covered entities retrospectively, allowing Medicaid programs to exclude 340B claims from rebate requests. A similar process using the same clearinghouse at the federal level could be used to address MDPNP de-duplication. Claims denial should be strictly limited (e.g., duplicate claim from covered entity, missing required data) if allowed at all, visible in clearinghouse software, and manufacturers should be required to provide a detailed explanation for the denial and a mechanism to resubmit the denied claim. Covered entities should not have to supply purchasing (i.e., invoice) data. Costs Under a Potential 340B Rebate Program are Unsustainable A rebate model would impose onerous administrative requirements and costs, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. Estimated costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. Any rebate program would require UTMB to spend a significant amount on new administrative costs. When we chose to participate in the 340B program, UTMB understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a rebate mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far beyond what is currently required and will have more than just minimal impact. In preparing for the Rebate Pilot, UTMB experienced substantial increased costs to develop IT solutions to submit the required claims data. It is estimated that development costs will be nearly $600,000. If manufacturers continue to be able to demand claims data with threats of cutting off 340B pricing, define the data fields required for rebates, and use disparate claims clearinghouses, the resulting fragmented system and uncertainty will impose untenable and ongoing implementation burdens on hospitals. UTMB does not use a traditional claims billing process in all areas and for all services. Even in the areas that it does (e.g., hospital, community clinics), UTMB has expended considerable IT resources to generate the required claims files to add sufficient information to assist with denials management and claims reconciliation. In areas that use non-traditional claims billing, UTMB has been forced to postpone critical projects to its clinical information systems (CIS) and to divert all IT resources to develop and re-engineer billing processes to generate claims. These issues remain unresolved and we have invested approximately 2,400 hours of employee effort to date. UTMB anticipates that it will be required to invest in additional staff resources to maintain a rebate model. Resources at a minimum will be required in pharmacy, finance, IT, and operations and will rely on enhanced coordination between departments such as compliance, pharmacy, operations, finance, IT, 340B Team, and treasury. The estimated ongoing cost is $792,000, increasing costs and undermining our ability to stretch scarce resources. Table 3: Additional Staff Resources Role Description Pharmacy Senior Buyer (2) Manage WAC purchases, track dispensing, ensure only eligible purchases are submitted for rebates, prepare purchase-level data for rebate invoicing Financial Analyst (2) Monitor cash flow impacts, reconcile rebate payments, and maintain audit-ready records IT Software System Specialist (1) Support platform registrations, data integration, and troubleshooting 340B Program Analyst (1) Monitor claims submission, monitor pricing and process, flag anomalies, audit Pharmacy Technologist Specialist (2) Manage and dispute denials, track denial rates, monitor BCMA compliance, and review claims level data UTMB implemented a software solution to manage 340B claim submissions given the volume and complexity of claim submissions, manufacturer-specific requirements, and reconciliation efforts needed. Relying on manual or decentralized processes introduces risks, including missed submission deadlines, delayed payments, and limited visibility into claim status. The recurring estimated annual cost is approximately $169,000. In summary, the estimated initial costs are approximately $1.6 million. These expenses are expected to increase over time due to the need for additional resources, as well as ongoing costofliving adjustments and inflationary increases for existing personnel and systems. Under a 340B rebate model, these costs would be unsustainable. Gives Regulatory Power to For-profit Pharmaceutical Manufacturers Federal agencies such as HRSA have regulatory power because Congress grants them rulemaking authority and uses them as bodies to translate broad legislative mandates such as Section 340B of the Public Health Service Act into enforceable, detailed rules that protect public interests, follow the intent of the legislation, and ensure effective governance. In addition, the Administrative Procedure Act (APA) requires agencies to follow formal rulemaking processes, including public notice, comment periods, and final rule publication. This ensures transparency, accountability, and opportunities for stakeholders to influence regulations. A rebate program creates a regulatory shift in power and gives manufacturers the unilateral authority over discount delivery, eligibility, criteria for resolving claim disputes, control over patient access, etc. Although HRSA is bound by APA, manufacturers are not. Manufacturers have already demonstrated that they are not open to input and will impose ever changing and onerous standards as evidenced by current contract pharmacy restrictions and recent claim submission requirements. Empowering manufacturers allows them to extract maximum profit at the expense of safety net providers and the patients they serve. It also allows the same manufacturers to craft complex programs that are designed to discourage or limit participation by covered entities. Inadequate System to Dispute Denied Claims There are no clear and/or immediate penalties for manufacturers who withhold rebates, and there is no recourse for covered entities except ADR (administrative dispute resolution). This means covered entities could be waiting months or even years without seeing a rebate if the manufacturer withholds it. HRSAs current ADR process simply is not designed to handle the sheer volume of claims that could arise with the change to a rebate model. Costs of Floating Funding to Manufacturers As mentioned above, by fundamentally changing the nature of the 340B rebate program from a point-of-sale discount to a post-purchase reimbursement system, rebate models will require hospitals to float substantial sums of money to manufacturers, which will reduce cash on hand. This is particularly challenging for safety net organizations that rely on tight margins. Delays in rebate recovery and uncertainty about whether rebates will be issued will erode 340B savings and could prevent hospitals from being able to purchase life-saving drugs for their patients. We estimate that this policy would reduce cash on hand by $19.4 million if limited to the 10 drugs subject to Medicare Part D negotiated prices in 2026 and the additional 15 beginning in 2027. This may be grossly understated since drugs must be maintained in inventory to meet the needs of patients which could take weeks or months requiring covered entities to provide interest-free loans to manufacturers during the pre-dispense period. Requiring UTMB to float this money to for-profit pharmaceutical manufacturers increases costs, ties up critical resources that would otherwise be used to support patient care, and undermines patient access and our ability to stretch scarce resources. Although framed initially as a pilot, HRSA has indicated its willingness to use experience with a pilot to inform future decisions and it is clear that it will not be sustainable for covered entities like UTMB, if such a model is significantly expanded. As a member of the University of Texas System (UTS), UTMB must be able to demonstrate it possess the financial capacity to satisfy its direct financial obligations and UTS cash flow (i.e., minimum cash on hand) requirements by maintaining a satisfactory financial score that is based in part of its debt capacity (i.e., spendable cash and investments relative to operating expenses and debt). This is also required before receiving approval to maintain, improve, or expand capital-intensive infrastructure which puts investments that support patient care at risk for postponement. Loss or Significant Reduction of Primary Wholesaler Discount By requiring covered entities to purchase drugs at WAC instead of receiving upfront discounts, rebate models will significantly reduce the cost of goods sold (COGS) discount received from wholesalers. UTMB would lose these discounts, approximately $9 million a year, again increasing costs and undermining our ability to stretch scarce resources therefor jeopardizing patient care. UTMB currently receives prepay discounts when purchasing drugs through our primary wholesaler. Invoices must be paid weekly. It varies for other wholesalers but does not occur less frequently then bimonthly. Payment terms do not differ for 340B drugs. To maintain these discounts, even if rebates are received within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, further reducing cash flow. Alternatively, we could forgo prepayment discounts to preserve cash flow, but doing so would cost UTMB an estimated $500,000 annually. Loss of 340B Subceiling Discounts By requiring covered entities to purchase drugs at wholesale acquisition costs (WAC) instead of receiving upfront discounts, rebate models appear to eliminate the possibility for covered entities to access 340B subceiling discounts. UTMB would lose these savings, approximately $22.9 million a year, increasing costs and undermining patient access to care. Cost of Inappropriately Denied or Delayed Rebates HRSA and covered entities must assume that a percentage of claims will be inappropriately denied; fighting and resolving these denials will involve significant capital outlay and human resources. Using a conservative estimate that 10% of claims will be denied, we estimate $1.9 million in increased costs. HRSA has previously acknowledged the challenge of delayed or denied rebates but has failed to propose efficient and enforceable methods to address these issues. HRSAs previously issued FAQ indicate that, in the event of a dispute, covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue, and only once the parties have failed to find a consensus should the covered entity contact HRSA. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment. In addition, we are concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Manufacturers can opt in, but Covered Entities Cannot opt out Covered entities cannot opt out and face complex compliance obligations under this model with limited recourse. They would have no input into how the program is structured, meaning they cannot shape rules, eligibility criteria, or rebate terms. This would lead to a model that better suits manufacturers interests than providers and patients needs. Requiring covered entities to opt in while manufacturers are allowed the option of choosing to participate will shift the financial and operational burden to providers, increase compliance costs, reduce savings, and limit their ability to influence program design. These factors will undermine the programs effectiveness and equity for safety net providers. Unreasonable and Unauthorized Manufacturer Requirements and Associated Costs Based on UTMBs experience with the pre-implementation of HRSAs rebate pilot, we are concerned that manufacturers will change requirements and impose additional burdens that will add to administrative costs and compromise our ability to receive the 340B savings that the statute requires. Resources expended navigating manufacturers excessively complicated systems add further administrative burden to the 340B program to the detriment of hospitals that treat a disproportionate share of low-income patients. For example, changes to Beacon guidance during prior implementation planning materially affected our operational assumptions, raising concerns about the lack of transparent oversight. Manufacturers and the Beacon platform updated the Beacon FAQ page without any public notice. We saw the Beacon platform amend responses on its FAQ page without any notice or clarification. Reliance on an FAQ page, particularly one hosted by an interested private party rather than a federal agency, is an inappropriate and unreliable means of communicating changes to a statutorily authorized program. Making substantive changes to operational or procedural design through an FAQ process, without providing notice to providers, is unequitable and extremely concerning. Any changes to the 340B rebate pilot must be made and authorized by HRSA, not by manufacturers with a financial interest in limiting the number of 340B qualifying discounts. For all these reasons, UTMB respectfully submits that the burdens and costs of any Rebate Program will outweigh any expected benefits. If all estimated costs are combined, which are conservative estimates, of the known potential annual impact, that amount is a staggering $58.1 million. This does not include the unknown costs, and the true costs will be significantly higher, and is not sustainable. HRSA therefore should abandon the concept altogether. If, however, HRSA chooses to move forward with this effort, it must allow UTMB and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, grounds for denial of rebates, dispute resolution process, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. Again, we urge HRSA to consider the impact of rebate models on hospitals like UTMB and not move forward with a rebate model or related pilot program because these programs create significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. Weakening the 340B Program does not lower drug prices for safety net providers. It does not improve access for patients. It simply shifts financial burden onto covered entities and threatens the availability of care in the very communities that depend on it most. We appreciate your consideration of these comments and look forward to working with HRSA on this critical issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jamie D. Bailey EVP & Chief Financial Officer
HRSA-2026-0001-1533Florida Association of Community Health Centers, Inc.2026-04-16T04:00Z22,337 chars
Please review the comments in the attached PDF: FACHC Comments on 340B Rebate RFI_HRSA-2026-03042 1 April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the state of Floridas fifty-four (54) Community Health Centers (CHCs) and the 1.8 million patients they serve, the Florida Association of Community Health Centers, Inc. (FACHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, FACHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA decides to pursue a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA allows manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 2 Summary of Comments: In these comments, FACHC explains: A. The importance of 340B savings to Florida CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 1.1 million low-income (known/reported income1) and 480,700 uninsured patients2. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients affordability of medications, care plans, and health outcomes. D. Why HRSA should not impose a mandatory rebate model on CEs and why CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA applies a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the core primary care function of the nations safety net. Nationally, in 2024, they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured3. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured/underinsured patients. Consistent with federal law4 and regulation5, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Florida, CHCs routinely rely on 340B savings to support services such as behavioral health, enabling (e.g., access to healthy food, affordable housing, employment resources), and other services integral to the CHC model and whole-person care that are not otherwise paid for by other sources. 1 Note: 556,000 Florida FQHC patients in 2024 were reported as Unknown incomes 2 Note : This number is expected to have increased significantly as a share of all patients in correlation with recent Medicaid, ADAP, and Marketplace changes. 3 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 4 Section 330(e)(5)(D) of the Public Health Service Act. 5 45 Code of Federal Register 75.307 Program Income 3 As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens: In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by CHCs across Florida will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. Staffing increases for the exclusive purpose to monitor the submissions and rebates to ensure manufacturer compliance will be required to avoid lost claims or incorrect payments. It will also require careful financial management to minimize borrowing costs and wholesaler fees. FACHC has heard directly from the CHC Pharmacy Directors about the current inflation of their workload and time requirements related to the Medicare Transaction Facilitator (MTF) and would anticipate similar additional requirements for a rebate model. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years 4 proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced that they would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHC patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications, as well as preventable hospitalizations and emergency department use to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. CHCs have already faced very challenging financial hardships and decisions, including but not limited to how they are able to operate their clinical, patient assistance, and 340B programs. A rebate model has the potential to exponentially increase these difficulties. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies and the focus on respecting their patients choice of where they would like to pick up their medications. In many instances, the contract pharmacy may be the only option for patients to 5 receive their medications in a timely and convenient manner particularly so in the vast, sparsely populated rural parts of the state. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures and the increasing costs of goods and services, it is not surprising that CHCs are increasingly looking to areas to reduce costs that often fall to reduced workforce and in-house lines of service. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA must proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense across all patients (e.g., Medicare, Medicaid, uninsured, Tri-Care, others). In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs currently subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA must require CHCs be included in a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency must include CHCs, it must require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go 6 a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 7 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication6 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. 6 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 8 By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Jonathan Chapman (President & CEO, Florida Association of Community Health Centers, Inc.) at JChapman@fachc.org. Sincerely, Jonathan Chapman President & CEO Florida Association of Community Health Centers, Inc. 9 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1534Astera Health2026-04-16T04:00Z8,380 chars
See attached file(s) AsteraHealth.org " A stera Health Administrator Thomas Engels Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Astera Health Comment Letter Re: Request for Information -340B Rebate Model Pilot Program (Federal Register Doc. No. 2026-03042) Dear Administrator Engels: Astera Health appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program, published February17, 2026. As a rural independent health system serving central Minnesota, we rely heavily on the upfront 340B discounts. Astera Health's participation in the 340B drug savings program allows us the ability to stretch scarce federal resources and provide comprehensive services to all the rural residents we serve. 67.4% of Astera Health's patients are either on Medicare, Medicaid or lack health insurance. 340B allows Astera to allocate investments in vital outreach and safety net efforts such as the essential community health service examples below: CLINICS: Bertha Henning Ottertail Sebeka Verndale Wadena HOSPITAL: Wadena 24/7 Emergency Department Pool Therapy Free prenatal education (48% of OB's are MA) Rural Oncology Services Full Obstetrics including rural delivery Community Paramedic Program *Ensuring access and affordability to critically vital and essential community health services for our rural residents is crucial. Most of these services historically operate on a loss but are essential to the health and well-being of our rural residents and are fueled by Astera's 340B savings. We respectfully submit the following comments regarding the proposed implementation of a rebate-based model under the 340B Program. Operational, Administrative and Financial Concerns with a 340B Drug Rebate Model OPERATIONAL CONCERNS 340B Covered Entities (CE) have a dependence on the current 340B upfront discount system with infrastructure built over 3 decades. Page 1 of 4 A rebate model would interfere with 340B upfront discounts, which has been a core design and reliance interest for CE's. Pharma argues that the growth is out of hand especially for Contract Pharmacies, but we have seen that the Manufacturers have different Limited Distribution Networks set up for different specialty medications. In some cases, a CE must contract with multiple specialty pharmacies to purchase medications for one manufacturer. ADMINISTRATIVE CONCERNS Administrative burdens would significantly increase due to expansion into all payers, including tracking inventory, reconciling rebates, and managing outstanding receivables. We anticipate adding at minimum a 10 FTE to manage a drug rebate model with all the added complexity to an already extremely complex program, which we take pride in our 340B compliance. Unpredictable purchasing & reimbursement cycles and lack of pricing transparency FINANCIAL CONCERNS/FINANCIAL PROTECTION A 340B Drug Rebate Model would require Astera to Pay an estimated $254,379.91 in 2026 alone in increased upfront, drug acquisition costs before receiving reimbursement. o Minnesota has a MN Care Tax Rate of 1.8%. With a 340B Drug Rebate Model for IRA drugs needing a MFP rebate, we will never be reimbursed for the higher upfront cost of the tax. I The MN Care Tax would be $4,578 in 2026 alone for 10 IRA drugs in a rebate model versus $0 for a discount clearinghouse model. This financial loss compared with drug cost float would directly affect our staffing ability and cause more harm to our ability to manage the 340B program safety net. We would be faced with the real possibility of cutting service lines that our rural patients rely on, causing them to travel farther to get the care they need, or, in a lot of cases, they will go without that care. I A Rebate model would create significant cash-flow challenges in 2026 and beyond with IRA drugs increasing 8-fold from 2026 (10 drugs) to 2030 (80 drugs), ultimately resulting in Financial Instability. We anticipate increased drug float/upfront costs to be $2- 5 million range by 2030. o Protect rural and critical access hospitals from further financial disruption, which is already occurring and increasingly projected to occur due to the "perfect storm" of factors including: I HR 1/OBBBA (Medicaid and ACA cuts) $1Trillion in Federal Medicaid Cuts including $137 Billion cut to rural hospitals over 10 years. Page 2 of 4 Drug Mfg Unilateral Contract Pharmacy Restrictions Since the inception of the contract pharmacy restriction Astera's estimated loss is over $1 mHlion a year in Contract pharmacy savings. I Payor Reimbursement Gaps I Proposed 340B Rebate Pilot as previously stated - "Business Insider" Clip: Since 2005,110 of the US' rural hospitals have closed permanently, 24 of which have shut their doors in the last five years. Researchers at The University of North Carolina found that the majority of these hospitals are in especially small and isolated locations, leaving residents with few options to see a doctor for preventive or urgent care. And many of these closure locations are near one another, creating healthcare deserts. Nearly 800 more rural hospitals are currently at risk of closure due to financial distress, the Center for Healthcare Equity and Reform estimates. U of M School of Public Health research brief, July 21, 2025: The research team analyzed 54 rural hospitals that closed between 2014 and 2018. To gauge price differences in the years before and after each rural hospital closure, the researchers tracked prices at the three nearest surviving hospitals from 2012 to 2022. A study, published in Health Affairs, found: After a hospital closed, commercial prices for inpatient treatment increased by 3.6% at surviving hospitals an average of about $500 per inpatient stay. The highest price increases were concentrated among surviving hospitals with market power hospitals with system affiliations and hospitals operating in less competitive markets. Rural hospitals that eventually closed charged about 6% less than nearby hospitals, so their closure moved patients into higher-priced facilities and eliminated low- price options from the market. "When rural hospitals close, patients including those with time-sensitive health conditions have a harder time accessing care," said Caitlin Carroll, an assistant professor in the School of Public Health and lead author. "There is an additional concern that rural hospital closure can lead to higher prices and erode affordability, even for patients who didn't use the closed hospital when it was still in business." Nearly 60% of rural hospitals no longer provide labor and delivery services, with 117 hospitals eliminating these services since 2020 (drug mfg restriction imposed in 2020). Page 3 of 4 ectfully submitted, 1CC-a/In4tat,n-CEO Kim Aag CONCLUSION/RECOMMENDATIONS: Quite simply, a rebate model creates massive operational, administrative and financial burdens, and greatly expands the original scope ofthe IRA/MFP beyond Medicare into all payors (Commercial, Medicaid, and Cash Discounts) thus increasing the complexity many fold and hurts financial assistance. Maintain upfront 340B discounts for all covered entities through a Neutral, Federally Contracted Clearinghouse. A Neutral 3 rd Party Clearinghouse would minimize administrative burden and is the best solution to the current problem that exists within the IRA MFP/CMS MTF. A Clearinghouse would help address program integrity (de-duplication, etc.) without imposing any significant operational and financial burdens on covered entities. A Clearinghouse would prevent the huge drug float with upfront costs that would result in millions of dollars being floated by our rural hospital and billions of dollars being floated nationwide by grantees, health centers and hospitals. Protect rural and critical access hospitals from further financial disruption. Astera Health urges HRSA to preserve the core design of the 340B Program. A rebate model would undermine financial stability, reduce the safety-net and further diminish access to essential healthcare services for rural communities. We appreciate the opportunity to provide feedback. CFO and Interim CEO Page 4 of 4
HRSA-2026-0001-1535CommonSpirit Health2026-04-16T04:00Z6,622 chars
Comment from St. Catherine Hospital-Garden City in Garden City, KS St. Catherine Hospital-Garden City 401 E Spruce Street Garden City, KS 67846 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Catherine Hospital-Garden City, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Catherine Hospital-Garden City was founded over 85 years ago and is a regional medical center that serves not only the southwest communities of Kansas, but communities in adjacent states. St. Catherine Hospital-Garden City provides a critical access point for health care services in the region. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Catherine Hospital-Garden City that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Catherine Hospital-Garden City relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jason Justus Hospital President St. Catherine Hospital-Garden City, Garden City, KS As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1536CommonSpirit Health2026-04-16T04:00Z6,516 chars
Comment Letter from St. Catherine Hospital-Dodge City St. Catherine Hospital-Dodge City 3001 Avenue A Dodge City, KS 67801 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Catherine Hospital-Dodge City, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Catherine Hospital-Dodge City is a 99-bed hospital that serves as a regional referral center for southwest Kansas. We are committed to providing our patients with the highest quality, family-friendly care available. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Catherine Hospital-Dodge City that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Catherine Hospital-Dodge City relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jason Justus Hospital President St. Catherine Hospital-Dodge City, Dodge City, KS As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1537(no commenter metadata)2026-04-16T04:00Z22,586 chars
See attached file(s) April 16, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Johnson County Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization an estimated $45,985. Over the course of one year, we believe our hospital would be required to front to drug manufacturers approximately $539,400. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff time just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We anticipate an extreme administrative burden with the amount of work that will be required to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates. For staffing with a rebate model we anticipate at a minimum that we would have to reallocate time from our finance department, 340B department and a possible part to full-time new employee dedicated just to tracking this process. If this process proves beyond our abilities with all of these staff hours, we may have to pay an additional third-party vendor to help manage the burden. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Some of the requested information is not available at the time of dispense of the medication like claim details. These are not available until the chart is coded and the claim generated. Manufacturers want the data submitted in a certain time frame and currently, the days we are out on coding barely meets this requirement. During this time that we are unable to submit for a rebate because dont have all of the needed data, we are giving the manufacturers an interest free loan by upfronting the WAC cost of the drug. Our cash on hand is reduced and tied up because we have to pay our drug wholesalers. Some data that is requested, like claim line number, is not even logical to submit as multiple drug charges roll up into the same line and would be flagged as duplicate in the data submission platform. When we inquired with concerns about the inability or untimeliness of being able to provide certain data fields we were told by the data submission platform that as long as the alpha numeric requirements are met they will accept whatever data we submit even if it is not the actual data requested and they say we will get paid the rebate. If this is so, then why are they even asking for the data as it is obviously not necessary. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include the loss or reduction of programs such as Home Health, our ambulance transport service which services five counties, free blood pressure checks, toenail care clinics and many other community benefits we provide. It will also inhibit our ability to purchase needed equipment and expand services to provide care to our patients and our communities that are not currently available in the area. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Olivia Little 340B Director Johnson County Hospital Tecumseh, Nebraska Mary Kent CEO Johnson County Hospital Tecumseh, Nebraska April 16, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Johnson County Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization an estimated $45,985. Over the course of one year, we believe our hospital would be required to front to drug manufacturers approximately $539,400. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff time just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We anticipate an extreme administrative burden with the amount of work that will be required to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates. For staffing with a rebate model we anticipate at a minimum that we would have to reallocate time from our finance department, 340B department and a possible part to full-time new employee dedicated just to tracking this process. If this process proves beyond our abilities with all of these staff hours, we may have to pay an additional third-party vendor to help manage the burden. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Some of the requested information is not available at the time of dispense of the medication like claim details. These are not available until the chart is coded and the claim generated. Manufacturers want the data submitted in a certain time frame and currently, the days we are out on coding barely meets this requirement. During this time that we are unable to submit for a rebate because dont have all of the needed data, we are giving the manufacturers an interest free loan by upfronting the WAC cost of the drug. Our cash on hand is reduced and tied up because we have to pay our drug wholesalers. Some data that is requested, like claim line number, is not even logical to submit as multiple drug charges roll up into the same line and would be flagged as duplicate in the data submission platform. When we inquired with concerns about the inability or untimeliness of being able to provide certain data fields we were told by the data submission platform that as long as the alpha numeric requirements are met they will accept whatever data we submit even if it is not the actual data requested and they say we will get paid the rebate. If this is so, then why are they even asking for the data as it is obviously not necessary. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include the loss or reduction of programs such as Home Health, our ambulance transport service which services five counties, free blood pressure checks, toenail care clinics and many other community benefits we provide. It will also inhibit our ability to purchase needed equipment and expand services to provide care to our patients and our communities that are not currently available in the area. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Olivia Little 340B Director Johnson County Hospital Tecumseh, Nebraska Mary Kent CEO Johnson County Hospital Tecumseh, Nebraska
HRSA-2026-0001-1538American Academy of Family Physicians2026-04-16T04:00Z22,091 chars
On behalf of the American Academy of Family Physicians (AAFP), which represents more than 124,500 family physicians and medical students across the country, please see the attached comments in response to this RFI. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Submitted electronically via regulations.gov RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton, On behalf of the American Academy of Family Physicians (AAFP), which represents 124,500 family physicians and medical students across the country, we appreciate the opportunity to comment on the Request for Information from the Health Resources And Services Administration (HRSA) regarding the impact of implementing the proposed 340B Rebate Model Pilot program, published in the Federal Register on February 17, 2026. The 340B Drug Pricing Program is essential to the health care safety net, enabling covered entities, including certain disproportionate share hospitals, community health centers (CHCs), federally qualified health centers (FQHCs), and other federally funded outpatient clinics, to expand access to affordable, life-saving medications. By providing statutory discounts at the point of purchase, the program supports continuity of care for patients with chronic disease and sustains the financial viability of safety-net providers that serve high-need, low-income communities. The proposed 340B Rebate Model Pilot would replace current upfront 340B discounts with a postdispensing reimbursement, requiring covered entities to acquire selected drugs at full Wholesale Acquisition Cost (WAC) and seek rebates from manufacturers. The pilot would apply to the ten drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026, most of which are essential medications for chronic conditions routinely managed in CHCs and primary care settings. On behalf of family physicians who provide continuous, comprehensive care for patients across the lifespan and deliver much of the frontline care for the three in four Americans living with at least one chronic condition, the AAFP strongly encourages HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot program. Access to affordable medications is foundational for effective primary care. The AAFP strongly supports the availability of effective, safe and affordable medications through policies that promote competition and availability, transparency, patient-centric pricing, drug price negotiation and review. Further, the AAFP believes that formularies should be designed to reduce or eliminate out-of-pocket costs for patients with chronic conditions to improve adherence and patient outcomes. Primary care and family physicians practicing in CHCs manage a disproportionate share of the nations chronic disease burden, including diabetes, hypertension, cardiovascular disease, asthma, and serious mental illness; conditions that require uninterrupted, medication-based treatment. In 2024 alone, CHCs provided care to 3.5 million patients with diabetes and 6.2 million patients with hypertension. This care resulted in 72 percent of patients reaching control over their hemoglobin A1c levels, leading to an estimated $24 billion in health care savings, and 67 percent of patients achieving hypertension control leading to an estimated $8 billion in health care savings. Yet medication adherence rates for chronic disease therapies remain approximately 50 percent nationwide, with cost-related nonadherence already common among low income and uninsured patients. Any model that delays or disrupts access to affordable medications at the point of care risks worsening medication adherence, increasing avoidable and costly downstream hospital and emergency department utilization, and undermining patient outcomes. The risks of the rebate model are most clearly illustrated by its impact on insulin access. Insulin products such as NovoLog and Fiasp, included in the 2026 Medicare Drug Price Negotiation list, are commonly prescribed insulin therapies in primary care. Primary care physicians provide longitudinal care for the majority of the more than 38 million Americans living with diabetes, including millions who rely on CHCs., Federal requirements, including Executive Order No. 14273, Lowering Drug Prices by Once Again Putting Americans First, condition future Section 330(e) funding on CHCs providing low-income patients with access to discounted insulin at the point of care. The proposed retrospective rebate model offers no operational pathway to meet this obligation, as insulin would be dispensed at full WAC rather than the discounted 340B price. This misalignment would make insulin unaffordable at the pharmacy counter, impede compliance with federal requirements, and foreseeably lead to treatment interruptions, preventable hospitalizations, and increased morbidity and mortality among patients with insulin-dependent diabetes. The proposed rebate model also risks destabilizing CHC pharmacy operations more broadly. CHCs rely on 340B savings to maintain integrated pharmacy services that enable patients to receive medications at the point of care. Requiring upfront WAC purchases will increase inventory costs, strain cash flow, and introduce uncertainty related to rebate timing, reconciliation, and denial. Under previously proposed versions of the rebate model, manufacturers could deny rebate claims based on ambiguous grounds, such as duplicate rebate, without providing the data or documentation necessary for covered entities to understand or contest those decisions. When a rebate is denied, the CHC bears the full financial loss, having already paid WAC and dispensed the drug at a reduced price. Financial pressures from implementing the proposed 340B rebate model will force CHCs, many of which operate with limited cash reserves, to restrict formularies, reduce services, or shift patients into fragmented pharmacy settings where cost, transportation, and care discontinuity further erode patient outcomes. This financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. The rebate model also introduces substantial and costly administrative burdens. If finalized, CHCs would be required to navigate multiple manufacturer-specific rebate processes, invest in new IT infrastructure, and dedicate staff to claims submission, reconciliation, and dispute resolution; all without assurance of timely or complete reimbursement. These burdens fall most heavily on CHCs already operating on thin margins and divert scarce resources away from direct patient care. CHCs already operate under a comprehensive statutory and regulatory framework established by Section 330 of the Public Health Service Act (42 U.S. Code 254b) and the 340B statute (42 U.S.C. 256b; 42 C.F.R. Part 10). In alignment with Section 330 of the Public Health Service Act, CHCs implement sliding fee discount programs based on income and household size, ensure full discounts for patients at or below 100 percent of the federal poverty level, and maintain robust eligibility determination systems. These services are made possible in large part by 340B savings. Further, CHCs are subject to regular Operational Site Visits to verify compliance with Health Center Program requirements and adhere to strict 340B compliance protocols, including internal audits, staff training, and external oversight. They also report detailed 340B-related data annually through the Uniform Data System, including information on drug purchases, costs, revenues, and patient populations served. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate administrative and financial burdens to CHCs and the patients they serve. Unlike the proposed retrospective rebate model that shifts financial and administrative risk onto safety-net providers, the up-front 340B discount enables CHCs to meet legally mandated affordability requirements and prevent avoidable downstream costs; particularly hospitalizations and emergency department utilization that would otherwise be borne by Medicare, Medicaid, and federal grant programs. The savings generated through 340B participation at CHCs are not excess revenues but are tightly constrained by statute and reinvested in required patient services, including sliding-fee discounts, integrated pharmacy access, and chronic disease management. The proposed rebate model would not meaningfully recapture spending at CHCs but displace those savings with higher federal expenditures resulting from disrupted medication access and worsening health outcomes. Exempting CHCs therefore preserves the clinical and fiscal efficiencies the 340B program was designed to achieve, while allowing HRSA to evaluate rebate models without destabilizing core safety-net infrastructure. If HRSA proceeds with a rebate-based pricing model, we recommend HRSA to develop clear, enforceable operational guardrails for the pilot program to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, ensure timely and accurate payment, and protect covered entities from financial harm. Further, it is imperative that HRSA require manufacturers to leverage their existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. We thank you for the opportunity to provide comments on this important issue. Should you have any questions, please contact Sahana Chakravartti, Regulatory Specialist, at schakravartti@aafp.org. Sincerely, Jen Brull, MD, FAAFP American Academy of Family Physicians, Board Chair April 20, 2026 Page 1 of 4 info@aafp.org (800) 794-7481 (202) 232-9033 www.aafp.org 1133 Connecticut Ave., NW, Ste. 1100 Washington, DC 20036-1011 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Submitted electronically via regulations.gov RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton, On behalf of the American Academy of Family Physicians (AAFP), which represents 124,500 family physicians and medical students across the country, we appreciate the opportunity to comment on the Request for Information from the Health Resources And Services Administration (HRSA) regarding the impact of implementing the proposed 340B Rebate Model Pilot program, published in the Federal Register on February 17, 2026. The 340B Drug Pricing Program is essential to the health care safety net, enabling covered entities, including certain disproportionate share hospitals, community health centers (CHCs), federally qualified health centers (FQHCs), and other federally funded outpatient clinics, to expand access to affordable, life-saving medications. By providing statutory discounts at the point of purchase, the program supports continuity of care for patients with chronic disease and sustains the financial viability of safety-net providers that serve high-need, low-income communities. The proposed 340B Rebate Model Pilot would replace current upfront 340B discounts with a postdispensing reimbursement, requiring covered entities to acquire selected drugs at full Wholesale Acquisition Cost (WAC) and seek rebates from manufacturers. The pilot would apply to the ten drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026, most of which are essential medications for chronic conditions routinely managed in CHCs and primary care settings. On behalf of family physicians who provide continuous, comprehensive care for patients across the lifespan and deliver much of the frontline care for the three in four Americans living with at least one chronic condition, the AAFP strongly encourages HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot program.i Access to affordable medications is foundational for effective primary care. The AAFP strongly supports the availability of effective, safe and affordable medications through policies that promote competition and availability, transparency, patient-centric pricing, drug price April 20, 2026 Page 2 of 4 info@aafp.org (800) 794-7481 (202) 232-9033 www.aafp.org negotiation and review. Further, the AAFP believes that formularies should be designed to reduce or eliminate out-of-pocket costs for patients with chronic conditions to improve adherence and patient outcomes. Primary care and family physicians practicing in CHCs manage a disproportionate share of the nations chronic disease burden, including diabetes, hypertension, cardiovascular disease, asthma, and serious mental illness; conditions that require uninterrupted, medication-based treatment. In 2024 alone, CHCs provided care to 3.5 million patients with diabetes and 6.2 million patients with hypertension.ii This care resulted in 72 percent of patients reaching control over their hemoglobin A1c levels, leading to an estimated $24 billion in health care savings, and 67 percent of patients achieving hypertension control leading to an estimated $8 billion in health care savings.iii Yet medication adherence rates for chronic disease therapies remain approximately 50 percent nationwide, with cost-related nonadherence already common among low income and uninsured patients.iv Any model that delays or disrupts access to affordable medications at the point of care risks worsening medication adherence, increasing avoidable and costly downstream hospital and emergency department utilization, and undermining patient outcomes. The risks of the rebate model are most clearly illustrated by its impact on insulin access. Insulin products such as NovoLog and Fiasp, included in the 2026 Medicare Drug Price Negotiation list, are commonly prescribed insulin therapies in primary care. Primary care physicians provide longitudinal care for the majority of the more than 38 million Americans living with diabetes, including millions who rely on CHCs.v,vi Federal requirements, including Executive Order No. 14273, Lowering Drug Prices by Once Again Putting Americans First, condition future Section 330(e) funding on CHCs providing low-income patients with access to discounted insulin at the point of care. The proposed retrospective rebate model offers no operational pathway to meet this obligation, as insulin would be dispensed at full WAC rather than the discounted 340B price. This misalignment would make insulin unaffordable at the pharmacy counter, impede compliance with federal requirements, and foreseeably lead to treatment interruptions, preventable hospitalizations, and increased morbidity and mortality among patients with insulin- dependent diabetes. The proposed rebate model also risks destabilizing CHC pharmacy operations more broadly. CHCs rely on 340B savings to maintain integrated pharmacy services that enable patients to receive medications at the point of care. Requiring upfront WAC purchases will increase inventory costs, strain cash flow, and introduce uncertainty related to rebate timing, reconciliation, and denial. Under previously proposed versions of the rebate model, manufacturers could deny rebate claims based on ambiguous grounds, such as duplicate rebate, without providing the data or documentation necessary for covered entities to understand or contest those decisions. When a rebate is denied, the CHC bears the full financial loss, having already paid WAC and dispensed the drug at a reduced price. Financial pressures from implementing the proposed 340B rebate model will force CHCs, many of which operate with limited cash reserves, to restrict formularies, reduce services, or shift patients into fragmented pharmacy settings where cost, transportation, and care discontinuity further erode patient outcomes. This financial harm is compounded April 20, 2026 Page 3 of 4 info@aafp.org (800) 794-7481 (202) 232-9033 www.aafp.org by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. The rebate model also introduces substantial and costly administrative burdens. If finalized, CHCs would be required to navigate multiple manufacturer-specific rebate processes, invest in new IT infrastructure, and dedicate staff to claims submission, reconciliation, and dispute resolution; all without assurance of timely or complete reimbursement. These burdens fall most heavily on CHCs already operating on thin margins and divert scarce resources away from direct patient care. CHCs already operate under a comprehensive statutory and regulatory framework established by Section 330 of the Public Health Service Act (42 U.S. Code 254b) and the 340B statute (42 U.S.C. 256b; 42 C.F.R. Part 10). In alignment with Section 330 of the Public Health Service Act, CHCs implement sliding fee discount programs based on income and household size, ensure full discounts for patients at or below 100 percent of the federal poverty level, and maintain robust eligibility determination systems. These services are made possible in large part by 340B savings. Further, CHCs are subject to regular Operational Site Visits to verify compliance with Health Center Program requirements and adhere to strict 340B compliance protocols, including internal audits, staff training, and external oversight. They also report detailed 340B-related data annually through the Uniform Data System, including information on drug purchases, costs, revenues, and patient populations served. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate administrative and financial burdens to CHCs and the patients they serve. Unlike the proposed retrospective rebate model that shifts financial and administrative risk onto safety-net providers, the up-front 340B discount enables CHCs to meet legally mandated affordability requirements and prevent avoidable downstream costs; particularly hospitalizations and emergency department utilization that would otherwise be borne by Medicare, Medicaid, and federal grant programs. The savings generated through 340B participation at CHCs are not excess revenues but are tightly constrained by statute and reinvested in required patient services, including sliding-fee discounts, integrated pharmacy access, and chronic disease management. The proposed rebate model would not meaningfully recapture spending at CHCs but displace those savings with higher federal expenditures resulting from disrupted medication access and worsening health outcomes. Exempting CHCs therefore preserves the clinical and fiscal efficiencies the 340B program was designed to achieve, while allowing HRSA to evaluate rebate models without destabilizing core safety-net infrastructure. If HRSA proceeds with a rebate-based pricing model, we recommend HRSA to develop clear, enforceable operational guardrails for the pilot program to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, ensure timely and accurate payment, and protect covered entities from financial harm. Further, April 20, 2026 Page 4 of 4 info@aafp.org (800) 794-7481 (202) 232-9033 www.aafp.org it is imperative that HRSA require manufacturers to leverage their existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. We thank you for the opportunity to provide comments on this important issue. Should you have any questions, please contact Sahana Chakravartti, Regulatory Specialist, at schakravartti@aafp.org. Sincerely, Jen Brull, MD, FAAFP American Academy of Family Physicians, Board Chair i Watson KB, Wiltz JL, Nhim K, Kaufmann RB, Thomas CW, Greenlund KJ. Trends in Multiple Chronic Conditions Among US Adults, By Life Stage, Behavioral Risk Factor Surveillance System, 20132023. Prev Chronic Dis 2025;22:240539. DOI: http://dx.doi.org/10.5888/pcd22.240539 ii Parker, ED, et al., Economic Costs of Diabetes in the U.S. in 2022. Diabetes Care 2 January 2024; 47 (1): 2643 https://diabetesjournals.org/ care/article/47/1/26/153797/Economic-Costs-of-Diabetes-in-the-U- S-in-2022 iii Parker, ED, et al., Economic Costs of Diabetes in the U.S. in 2022. Diabetes Care 2 January 2024; 47 (1): 2643 https://diabetesjournals.org/ care/article/47/1/26/153797/Economic-Costs-of-Diabetes-in-the-U- S-in-2022 iv Pruitt, S.D., Khan, R., Chaiyakunapruk, N. et al. The silent epidemic of non-adherence insights from the 2024 a:care congress. BMC Proc 19 (Suppl 10), 13 (2025). https://doi.org/10.1186/s12919-025- 00326-4 v Pilla, S. J., Segal, J. B., & Maruthur, N. M. (2019). Primary Care Provides the Majority of Outpatient Care for Patients with Diabetes in the US: NAMCS 2009-2015. Journal of general internal medicine, 34(7), 10891091. https://doi.org/10.1007/s11606-019-04843-9 vi Holliday CS, Gabbay RA. Breaking Barriers: CDC and American Diabetes Association Unite to Combat Diabetes. Prev Chronic Dis 2025;22:240273. DOI: http://dx.doi.org/10.5888/pcd22.240273
HRSA-2026-0001-1539CommonSpirit Health2026-04-16T04:00Z6,443 chars
Comment letter for Penrose Hospital-Colorado Springs, CO Penrose Hospital 2222 N Nevada Ave Colorado Springs, CO 80907 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Penrose Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Penrose Hospital was founded in the late 1880s and has proudly served the residents of Colorado Springs since its inception. As a leader in high quality care, Penrose is dedicated to the community it serves. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Penrose Hospitalthat far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Penrose Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kristi Olson Hospital President Penrose Hospital, Colorado Springs, CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1540CHI Lisbon Health2026-04-16T04:00Z5,923 chars
See attached file(s) for CHI Lisbon Health. "q" CHI Lisbon Health 905 Main Street P 701.683.6400 PO Box 353 https://lisbonhospital.com/ Lisbon, ND 58054 April 16, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Lisbon Health, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Lisbon Health that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Lisbon Health relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate Apr16, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Rebecca Bleese President CHI Lisbon Health Lisbon, ND Apr16, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CommonSpirit As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1541Rosie Mendozachapa · Douglas Arizona 85607, AZ, United States2026-04-16T04:00Z32 chars
duplicate of HRSA-2026-0001-1571
HRSA-2026-0001-1542(no commenter metadata)2026-04-16T04:00Z4,561 chars
See Attached LTMC LIFE CHANGING MEDICINE March 31, 2026 SENT VIA ELECTRONIC MAIL 340hpricint; ll hrsa.uo\ Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Dept. Health 7 Human Services Parklawn Building, Rm. 13N188 Rockville, MD 20857 RE: Concerns About Submissions of Claims Data for all 340B Dispenses Dear Administrator Engels: UPMC, on behalf of its covered entity hospitals listed in the attachment hereto, is writing to inform HRSA of the significant financial pressure on our hospitals to comply with new drug manufacturer demands for claims data for all 340B dispenses, including from in-house pharmacies, both retail and mixed-use, and our serious concerns with providing the data. We have been notified by Novo Nordisk that we will no longer receive 340B pricing on Novo Nordisk drugs unless we transmit claims data for all 340B dispenses from in-house pharmacies, including both retail and mixed-use, effective April 1, 2026. Prior to this, Exelixis' announced a new policy to bar access to 340B pricing for drugs dispensed from 340B hospital-owned pharmacies unless the hospital shares claims data, effective October 1, 2025. Eli Lilly and Company ("Lilly") announced recently that we will no longer receive 340B pricing on any Lilly drugs unless we transmit claims data for all 340B dispenses including 340B drugs dispensed at in house pharmacies and medical claims, effective February I, 2026. UPMC was also recently contacted by its drug wholesaler, Cardinal Health, who advised that it was preparing to switch off UPMC's 340B accounts pursuant to Novo Nordisk's and Lilly's announcements. These manufacturers' policies conflict with the 340B statute and would impose severe administrative and financial burdens on 340B hospitals. We urge you to prevent manufacturers from illegally denying 340B pricing for drugs covered under the 340B statute and dispensed by us directly to our patients. Manufacturers are required under the 340B statute to offer covered entities covered outpatient drugs for purchase at or below the applicable ceiling price. In return, manufacturers have access to the Medicaid and Medicare Part B markets. There are no provisions in the 340B statute permitting conditions to be placed on drugs purchased by the covered entity for it to directly administer or dispense to its patients. Contrary to Novo Nordisk's and Lilly's description in their policy changes, the data that it is conditioning access to 340B pricing on is not "minimal" or "standard business information" and far exceeds data previously requested by 340B ESP. 340B hospitals have never been required to compile and submit medical claims data for any purpose and doing so would be expensive and burdensome. Diverting health care resources to administrative data collection and claims tracking will further erode our 340B savings, limiting our scarce resources intended for patient care. As noted above, Novo Nordisk is now the third drug manufacturer attempting to impose these illegal conditions, demonstrating a dangerous trend among manufacturers. Exelixis was the first to announce its intent to deny 340B pricing unless hospitals submit claims data from its pharmacies, followed shortly by Lilly. We urge HRSA to use all enforcement options provided under the 340B statute to prevent Novo Nordisk, Lilly, Exelixis and other manufacturers from attempting to implement these types of unlawful and burdensome policies. We look forward to hearing from you. Please feel free to contact me at taylorra4@upmc.edu if you have any questions. Sincerely, . 7:4 Rebecca A. Taylor UPMC Vice President, Pharmacy Service Line UPMC 340B Covered Entitles 2025 HRSA ID DSH (Disproportionate Share Hospital) UPMC Altoona DSH390073 UPMC Chautauqua DSH330239 UPMC Hamot DSH390063 UPMC Horizon DSH390178 UPMC Magee Womens Hospital DSH390114 UPMC McKeesport DSH 390002 UPMC Mercy DSH390028 UPMC Northwest DSH390091 UPMC Presbyterian Shadyside DSH390164 UPMC Somerset DSH390039 UPMC Western Maryland DSH210027 PED (Cliadren's Hospital) UPMC Children's PED393302 Ryan White Part C Grantee Pittsburgh Area Center for Treatment (PACT) HV152132 Pinnacte-REACCH Clinic HV171102 STD Clinic Pinnacle-REACCH Ctinic STD171101 CAH (Critical Access Hospital) UPMC Cole CAH391313 UPMC Kane CAH391318 UPMC Muncy Valley CAH391301 UPMC Wellsboro (sold & sail) CAH391316 RRC (Rural Referral Center) UPMC Harrisburg {Pinnacle) RRC390067 UPMC Williamsport RRC390045
HRSA-2026-0001-1543(no commenter metadata)2026-04-16T04:00Z10,282 chars
See Attached April 7, 2026 submitted to Federal eRulemaking Portal: https://www.re2ulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Vandalia Health, Inc., and its subsidiary hospitals ("Vandalia Health"), we appreciate the opportunity to comment on the Department of Health and Human Services' (HHS) Request for Information regarding the Health Resources & Services Administration (HRSA) proposed 340B Rebate Model Pilot Program. Vandalia Health, Inc. is a West Virginiabased health system serving predominantly rural and underserved communities across the state. The system is comprised of 14 hospitals, with 11 hospitals participating in the 340B Program as covered entities, including disproportionate share hospitals (DSH) and critical access hospitals (CAH). Our 340B network encompasses a broad footprint across West Virginia, including Broaddus Hospital Association, Inc., CAMC Plateau Medical Center, Inc., Webster Memorial Hospital, Inc., Preston Memorial Hospital Corporation, Stonewall Jackson Memorial Hospital Company, Charleston Area Medical Center, Inc. (CAMC), and CAMC Greenbrier Valley Medical Center, Inc. (GVMC). These facilities collectively operate numerous child sites and individual contract pharmacy locations, with CAMC managing 172 child sites and 92 contract pharmacies; Stonewall Jackson overseeing 10 child sites and 36 contract pharmacies; Davis handling 9 child sites and 47 contract pharmacies; and Broaddus, Plateau, Webster, Preston, and GVMC contributing an additional combined total of over 45 child sites and 52 contract pharmacies. This extensive network underscores Vandalia Health's vital role in ensuring healthcare access in rural and underserved communities. At the outset, we emphasize that the answer to HRSA's central questionwhether it should replace the longstanding upfront discount model with a rebate mechanism-is no. The existing upfront discount structure has enabled Vandalia Health's hospitals to stretch scarce federal resources, expand access to care, and sustain critical services in The existing upfront discount structure has enabled Vandalia Health's hospitals to stretch scarce federal resources, expand access to care, and sustain critical services in communities that would otherwise lack them. A rebate model would fundamentally undermine these objectives by introducing substantial administrative complexity, significant financial risk, and barriers to patient access. Administrative and Operational Costs A rebate model would impose extensive new administrative burdens across Vandalia Health. Our system has designed its operations, staffing, and vendor relationships around the upfront discount model. Transitioning to a rebate-based system would require substantial new investments in staffing, information technology, and compliance infrastructure. Our current 340B team consists of 3.5 pharmacist FTEs and 6 analyst FTEs. Even with this relatively lean team, we maintain robust oversight of the program. One facility is still contracted with a 340B management service, demonstrating that even modest additional administrative demands could exceed our internal capacity. To operationalize a rebate model effectively, we would require at least two additional FTEs, diverting focus from existing compliance efforts and potentially increasing short-term compliance risk. Additional burdens include: Significant staffing increases for data submission, claims tracking, reconciliation, dispute resolution, and audit support. Vendor costs, previously quoted when the initial rebate model pilot was floated, would rise by thousands of dollars annually due to the need for additional support (exact figures under non-disclosure agreements). New IT infrastructure and manual processes, as pricing updates are not currently automated across all platforms, requiring additional manual effort to maintain accurate data in EMRs and billing systems. Legal and compliance obligations, including reviewing non-negotiable manufacturer terms of use, which would expose the health system to substantial risk. Rather than enhancing program integrity, the rebate model would introduce a period of heightened compliance risk. Staffwould be forced to balance existing regulatory requirements with the demands of building and operating an entirely new system, increasing the likelihood of errors, delays, and audit vulnerabilities. Prescription Volunie and Direct Patient Benefit Across Vandalia Health's retail pharmacy network, 340B pricing directly supported at least 25,172 prescriptions during a recent reporting period (24,853 excluding one location). These prescriptions reflect instances where discounted 3408 pricing was passed directly to patients, typically with only a nominal dispensing fee. Many patients travel over 80 miles one way each quarter to access these reduced costs. These figures represent only the majority of our retail pharmacy footprint and therefore understate the full scope of program utilization. The program also supports patients who rely on life-sustaining medications through our hemophilia treatment center, oncology services, transplant programs, and HIV clinic, all located within our hospitals. In addition, 340B subsidizes operational support for West Virginia Health Right, a free and charitable clinic, by providing pharmacy, housekeeping, and other services for this vulnerable patient population. A rebate model would disrupt these access points by introducing pricing uncertainty at the point of sale, delaying therapy, and threatening patient adherence. Financial Operations, Medicaid, MDPNP, and Pharmacy Wholesalers The most significant impact of a rebate model is the shift in financial burden from manufacturers to covered entities. For the 2026/2027 IRA and Medicare Drug Price Negotiation Program (MDPNP) drugs, Vandalia Health's 11 participating 340B hospitals would face $6.61 million in exposure over a 90-day period, or $33.4 million annualized. Under a rebate model, we would pay full acquisition costs upfront while awaiting reimbursement, effectively providing interest-free financing to drug companies. West Virginia requires that Medicaid claims reflect actual acquisition costs to prevent duplicate discounts. Under a rebate model, Vandalia Health would not have actual acquisition costs at the time of billing, creating compliance risk and potential regulatory exposure. The model would also hinder our ability to maximize savings and discounts through pharmacy wholesalers. 340B pricing is currently incorporated into EMRs and hospital billing systems, enabling accurate cost-of-goods accounting and optimization of payment structures. A rebate model would require manual workarounds, additional staff effort, and introduce risk of mispricing, delayed revenue capture, and missed discounts. Any issues with MDPNP should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B. Vandalia Health is already building processes to review MDPNP delays and conduct good faith inquiries. A rebate model would require submission of rebate data for all 340B claims across all payers, vastly increasing administrative burden without improving deduplication compliance. Impact on Critical Services and Vulnerable Populations Vandalia Health's 340B hospitals support essential, high-cost service lines dependent on 340B savings. The rebate model would impair our ability to: Maintain adequate inventory of high-cost medications Offer financial assistance at the point of care Sustain service lines operating with minimal or negative margins In rural communities we serve, there are often no alternative providers for these services. Reduced access would directly impact medically complex and financially vulnerable populations. Systems and Data Infrastructure Currently, our systems are not configured to extract and standardize required medical claims data across multiple EMRs or integrate with third-party administrators for real- time rebate processing. Required data elements are often not readily accessible and require manual validation. Manufacturer-specific data expectations further complicate operational feasibility. Existing vendor systems, such as 340B ESP, already create delays and require multiple follow-ups to resolve questions. Reliance Interests and Program Integrity Since its inception, the 340B Program has operated via an upfront discount modeI. Vandalia Health has reasonably relied on this structure in designing operations, staffing, and financial strategies. The system currently maintains rigorous compliance: in 2025 alone, we conducted more than 65 scheduled internal audits and examined over 400,000 data records, while engaging in state and national advocacy. Implementing a rebate model would divert focus from these compliance efforts, requiring rework of retail pricing programs, increasing administrative risk, and potentially undermining patient access. Conclusion The data and experience above demonstrate that a rebate model is not a minor adjustment, it is a fundamental restructuring of the 340B Program. It would: Shift substantial financial burden onto covered entities Introduce significant administrative inefficiencies Increase compliance and operational risk Reduce patient access to affordable medications Undermine critical healthcare services in vulnerable communities Vandalia Health, Inc. respectfully urges HRSA to abandon the rebate model concept and pursue less burdensome alternatives to address program integrity concerns. If HRSA chooses to proceed, covered entities must have the opportunity to comment on a fully developed proposal with all operational details and safeguards. We appreciate the opportunity to provide these comments and welcome continued engagement. Sine rely, 147q. Glenn Crotty, Jr., M.D., FACP Executive Vice President Vandalia Health, Inc.
HRSA-2026-0001-1544CHI Health Plainview2026-04-16T04:00Z6,329 chars
See attached file(s) lf CHI Health Imagine better health." April 16, 2026 Plainview 704 North 3rd Street PO Box 489 Plainview, NE 68769 P 402.582.4245 F 402.582.3940 CHlhealth.com The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Health Plainview, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Health Plainview that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect prernise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Health Plainview relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Bergan Mercy Mercy Council Bluffs Missouri Valley Lasting Hope Recovery Center Creighton University Medical Center Midlands Mercy Corning Richard Young Behavioral Health Good Samaritan Nebraska Heart Plainview CHI Health Alegent Creighton Clinic Immanuel St. Elizabeth Schuyler Lakeside St. Francis St. Mary's April 16, 2026 CHI Health Plainview HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Connie Peters President, CHI Health Plainview April 16. 2026 CHI Health Plairwiew HHS Docket No. HRSA-2026-03042 CHI Health Plainview Plainview, NE 4- CommonSpint " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1545Metro Community Provider Network dba STRIDE Community Health Center2026-04-16T04:00Z13,011 chars
See attached file(s) STRIDE COMMUNITY HEALTH CENTER April 15, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information - 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of STRIDE DBA: Metro Community Provider Network, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This additional time has been essential for evaluating the extensive operational and financial impacts the proposed 340B Rebate Model Pilot would impose on Community Health Centers (CHCs). The 340B program is indispensable to CHCs' ability to deliver affordable medications and essential services to medically underserved communities. The proposed rebate modelshifting responsibility from manufacturers to safety-net providersposes severe risks to CHCs' financial stability, clinical operations, and ability to meet federal program requirements. National assessments show that CHCs would face profound consequences. Many are already reporting significant losses across entity-owned and contract pharmacy operations due to increasing administrative barriers. National data shows that a single mid-sized health center is projected to incur more than $3 million annually in new administrative, labor, and IT expenses under a rebate model. Rural CHCs, which reinvest an estimated 25% of 340B savings into rural-specific infrastructure such as mobile clinics and telehealth, would be disproportionately harmed. STRIDE Community Health Center is a Federally Qualified Health Center dedicated to delivering high-quality, whole-person integrated care to individuals and families regardless of their ability to pay. Serving diverse and often underserved communities, STRIDE provides medical, dental, behavioral health and pharmacy services with a strong focus on prevention, chronic disease management, and addressing health related STRHDE Community Health Center 7495 W 29th Ave., Wheat Ridge, CO 80033 l P: (303) 778-7433 l stridechc.org Whole Person Integrated Care Primary Care Same-Day, Convenient Care Medical Care for Seniors Lab & X-Ray Women's Health Behavioral Health Nutrition Services Infectious Disease Mobile Health School-Based Health Telehealth Pediatric Care Prenatal & Newborn Care Pharmacy Provider Residency social needs. Our patients include those who are uninsured and underinsured with appropriate 39,004 individuals lacking insurance coverage, as well as those experiencing economic instability or facing barriers to care related to language, culture or access. Rooted in community, STRIDE exists to ensure that everyone has access to comprehensive, compassionate, coordinated care that improves health outcomes and strengthens the communities we serve. I. We Strongly Urge HRSA to Exempt CHCs from the 340B Rebate Model Pilot For more than 30 years, the 340B program has enabled CHCs to "stretch scarce Federal resources" by purchasing outpatient medications at discounted prices and reinvesting savings into services for low-income patients. The rebate model undermines this longstanding structure by forcing CHCs to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for uncertain rebate payments. This redesign would destabilize cash flow, constrain access to medications, and impede CHCs' ability to serve the 52 million patients who rely on them. For STRIDE Community Health Center, the proposal directly impacts: The 176,061 annual 340B-eligible prescriptions we dispense. The $586,000 required to maintain our existing compliant 340B operation. The programs are supported by 340B reinvestment, including uninsured patient cost for medications and clinic visits, transportation for patients who have transportation issues, clinic utilities, vendors to stay compliant and salaries for those who run the 340b program. We strongly urge HRSA to exempt all CHCs from the rebate model to maintain program integrity and protect safety-net access. II. Patient Impact: Threats to Medication Access and Safety Most importantly, a 340B rebate model poses a direct and serious threat to medication access forthe vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic -conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. In addition, the increase in administrative burden and associated costs to manage a 340B rebate model when combined with reduced savings from the program will result in a compounded reduction in needed services to our patients. Fewer resources will require our CHCs to reduce patient services simply to meet the requirements of an unneeded rebate program. Ill. Administrative and Financial Burdens on CHCs The proposed rebate model would require CHCs to overhaul pharmacy systems, hire additional staff, and take on new compliance obligations across entity-owned, contract, and clinic-administered drug operations. These changes impose substantial new costs without improving program integrity. In addition, losing access to the upfront 340B price in wholesaler catalogs and pharmacy software complicates compliance with sliding fee scale health center rules, Medicaid FFS AAC billing, and the insulin/injectable epinephrine executive order. Each of these issues seem to be unintended consequences that HRSA needs to consider as a part of this decision. Workforce and IT Impacts Nationally, CHCs estimate that 47% will need 0.5-1 new FTE, 36% will need 1-2 new FTE, and 7% will need more than 2 FTEs. CHCs report staffing costs ranging from $30,000 to $200,000 annually, with some mid-sized health centers projecting more than $3 million in combined labor, carrying, and inventory costs under a rebate model. STRIDE needs 3 FTE's which would cost around $288,000, TPA cost would be around $300,000, and Vendor to handle the rebate would cost $7500 to implement and then fees would be estimated at $98,000 yearly. EHR / Pharmacy software update would cost around $25,000 plus monthly fees of $5,000. Software and Third-Party Administrator Requirements Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. CHCs would 'need to: Implement new pharmacy system interfaces through Epic/Willow that we use from UC Health, CO. Modify Electronic Health Record (EHR) and Pharmacy Management Systems (PMS) to support multiple manufacturer-specific portals $25,000. Paying new costs related to ongoing reconciliation, rebate-tracking modules, and reporting fees to TPAs would cost an estimate of $300,000. Entity-Owned and Contract Pharmacies CHCs with in-house pharmacies require new integration tools, manual reconciliation processes, and frequent data submissions. Contract pharmaciesalready strained by manufacturer restrictionsmay drop 340B participation entirely, threatening patient access in pharmacy deserts. As we have considered the impacts of this model, we have determined that our CHC would experience losses of 586% from our owned-pharmacy operations and losses of 800% for contract pharmacy arrangements due to the administrative hurdles created by the proposed model. We would need to float around $30,000,000 to be able to support this model, and we do not have that kind of cash to float as we do not have the revenue for that. Not to mention, our wholesalers only give us a $250,000 credit Limit. Clinic-Administered Drugs (CADs) Including CADs in a rebate model is unnecessary and harmful. CHCs often maintain paper-based documentation for CAD inventory and PPS-bundled services, making rebate submissions operationally infeasible. CHCs bill Medicare Part A for most CADs, minimizing duplicate discount risk. HRSA should explicitly exclude CADs from any rebate pilot. IV. Cash Flow Challenges, Wholesaler Credit Limits, and Rebate Denials Requiring CHCs to purchase drugs at WAC fundamentally alters the financial foundation of the 340B program. CHCs already operate with limited liquiditynearly half have fewer than 90 days of cash on hand. Underthe rebate model: Rebates may not be paid for 40-85 days, depending on inventory turnover and data submission schedules. Manufacturers retain broad discretion to deny rebates, leaving CHCs with unrecoverable WAC costs. Loss of prompt-pay, volume, and sub-ceiling discounts will significantly increase expenses. STRIDE's projected increase in upfront drug spend would be an estimated cost of $20 million, cashflow impact would be around $30 million, rebate- related opportunity costs would be roughly $586,000, expected denial- related losses would be roughly around $4 million, and credit-limit implications would be impossible as we currently only get $250,000 credit limit from our wholesalers. To cover WAC purchases, many CHCs would be forced to use scarce reserves or take out lines of creditdiverting funds from clinical care to interest payments and eroding the purpose of the 340B program. V.Existing CHC Compliance Systems CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute that facilitates making medications affordable for patients. CHCs have systems in place that help us achieve 340B goals, including sliding-fee scale programs for patients up to 200% FPL, regular HRSA Operational Site Visits to ensure compliance, annual 340B reporting through the Uniform Data System, and strong internal controls, audits, and external compliance oversight. CHCs are not the source of 340B misuse. Imposing a rebate model would add new burdens without improving accountability. VI. Recommendation: A National, Neutral Claims Clearinghouse (NCC) We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a small fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducingthe time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program. Protect patient access to affordable MFP drugs. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given that the required data already exists, a rebate model is an unnecessary and harmful duplication of effort. Conclusion Metro Community Provider Network (STRIDE Community Health Centers) strongly urges HRSA to exempt CHCs from the proposed 340B Rebate Model Pilot. The rebate model threatens medication access, undermines CHC financial stability, adds significant administrative burden, and contradicts congressional intent for the 340B program. It poses disproportionate harm to the underserved patients with CHCs that are federally mandated to serve. We appreciate the opportunity to provide feedback and welcome continued engagement. Please contact Santos Vera @ Santos.Vera@stridechc.org with any questions. Sincerely, Santos Vera v Pre/s''i'de CEO Metro Community Provider Network (STRIDE Community Health Centers)
HRSA-2026-0001-1546melissa Arguello Belli · Cornelius,, OR, United States2026-04-16T04:00Z1,897 chars
My name is Melissa Belli and I am a family doctor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Melissa Belli Cornelius, Oregon
HRSA-2026-0001-1547Hackensack Meridian Health2026-04-16T04:00Z12,747 chars
On behalf of Hackensack Meridian Health (HMH), we thank you for the opportunity to comment on the 340B Rebate Model Pilot Program request for information. While HMH appreciates the Health Resources and Services Administrations (HRSAs) efforts to explore standardizing rebate-based models, HMH believes that implementing such a model would be a profound misstep for the 340B Program. The current upfront discount is the most effective mechanism for delivering the Programs benefits to safety-net providers and the vulnerable patients they serve. A transition to a post-dispense rebate model would represent a fundamental and detrimental shift, introducing financial instability and administrative complexity that would undermine the core purpose of the 340B Program. However, should HRSA choose to pursue this path, HMH offers the following recommendations to mitigate the model's inherent risks to covered entities and patient care. While a more structured, agency-led framework could provide greater consistency and oversight compared to the fragmented, manufacturer-driven approaches that have emerged to date, any rebate-based approach must be carefully designed to avoid undermining the Programs core purpose of supporting access to care for vulnerable populations. Please see the attached letter for our full comments. Elwil** Hackensack Meridian Health Via Electronic Submission - http://www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 April 14, 2026 RE: HRSA-2026-03042, Request for Information: 34oB Rebate Model Pilot Program Dear Administrator Engels, 0n behalf of Hackensack Meridian Health (HMH), we thank you for the opportunity to comment on the 340B Rebate Model Pilot Program request for information.' HMH is the largest, most comprehensive, and truly integrated health care network in New Jersey, comprising a network of hospitals that includes three academic medical centers, one university teaching hospital, two children's hospitals, eight community hospitals, a behavioral health hospital, two rehabilitation hospitals and one long-term acute care hospital. Six of our i8 hospitals maintain robust academic medical programs. HMH also has more than 500 patient care locations, including ambulatory care centers, surgery centers, cancer centers, home health services, long-term care and assisted living communities, ambulance services, lifesaving air medical transportation, fitness and wellness centers, rehabilitation centers, urgent care centers, and physician practice locations. HMH has more than 40,000 team members and more than 7,000 physicians within its network and is a distinguished leader in health care philanthropy, committed to the health and well-being of the communities it serves. As a vital safety-net provider for the State of New Jersey, the 84oB Program is indispensable to HMH's mission. The savings generated through the Program are directly reinvested to stretch scarce federal resources, allowing the network to provide critical services to vulnerable patient populations. These services include offering free or low-cost medications, expanding access to specialty care, and supporting clinical services that would otherwise operate at a loss. Overview of HMH's Comments While HMH appreciates the Health Resources and Services Administration's (HRSA's) efforts to explore standardizing rebate-based models, HMH believes that implementing such a model would be a profound misstep for the 340B Program. The current upfront discount is the most effective mechanism for delivering the Program's benefits to safety-net providers and the vulnerable patients they serve. A transition to a post-dispense rebate model would represent a fundamental and detrimental shift, introducing financial instability and administrative complexity that would undermine the core purpose of the 340B Program. 191 Fed. Reg. 7287 (February 17, 2026). 343 Thornall Street l Edison, NJ 08837 I 848-888-4400 l HackensackMeridianHealth.org Letter to Administrator Engels re: HRSA-2026-03042 April 14, 2026 Page 2 However, should HRSA choose to pursue this path, HMH offers the following recommendations to mitigate the model's inherent risks to covered entities and patient care. While a more structured, agency-led framework could provide greater consistency and oversight compared to the fragmented, manufacturer-driven approaches that have emerged to date, any rebate-based approach must be carefully designed to avoid undermining the Program's core purpose of supporting access to care for vulnerable populations. A. Financial and Operational Considerations for Covered Entities A transition from upfront discounts to post-dispense rebates would represent a fundamental change in the 3408 Program's financial structure and could introduce significant and potentially destabilizing consequences for covered entities (CEs). Requiring CEs to purchase drugs at Wholesale Acquisition Cost and await rebate reimbursement would effectively shift substantial financing responsibility onto providers, creating material cash flow pressures and diverting resources away from patient care. For large, integrated systems such as HMH, this could translate into millions of dollars in working capital being redirected to support drug purchasing rather than community-based programs and clinical services. While rapid rebate turnaround is helpful in theory, in practice, delays related to claims validation, disputes, and reconciliation are likely to extend payment timelines and exacerbate financial uncertainty. While the concept of a io-day rebate payment timeline is intended to mitigate these concerns, HMH believes this assumption is not operationally realistic. In practice, rebate payment timelines are dependent on multiple steps including claims submission, validation, adjudication, and dispute resolution, which introduce inherent delays. Even under streamlined processes, variability across manufacturers and the likelihood of incomplete or disputed claims would make consistent io-day turnaround difficult to achieve. As a result, CEs would still be required to absorb meaningful and ongoing cash flow risk, particularly at scale. Rebate-based models would also introduce significant administrative complexity. CEs would need to develop new infrastructure to track, submit, and reconcile rebate claims across multiple manufacturers, each with potentially distinct requirements. Absent standardization, this could result in duplicative workflows, increased staffing needs, and the diversion of resources away from patient care delivery. Therefore, if a rebate model is pursued, HMH urges that HRSA require robust cash flow protections (such as near-real-time payment or advance funding mechanisms), establish standardized processes across manufacturers, and implement a phased and extended timeline for any rebate-based model. B. Manufacturer Flexibility and Oversight Required data submissions raise significant concerns regarding patient privacy and appropriate data use. Rebate-based models may require the transmission of detailed, patient-level claims data including prescription information, provider identifiers, and dispensing locations, across multiple manufacturer-controlled platforms. This expands the number of entities handling sensitive health Letter to Administrator Engels re: HRSA-2026-03042 April 14, 2026 Page 3 information and increases the risk of inappropriate access, secondary use, or data breaches. Absent clear federal guardrails, there is also a risk that manufacturers could use these data to monitor prescribing patterns, infer contract pharmacy relationships, or support restrictive distribution or contracting strategies. This would extend beyond the intended purpose of rebate reconciliation and could undermine both patient trust and provider operations. Given these risks, HMH believes that any rebate modeI must establish strict data minimization requirements, limit data eiements to those absolutely necessary for rebate validation, andprohibit any use of submitted data beyond rebate reconciliation, with clear enforcement mechanisms. C. Patient Access and Program Integrity The financial and operational pressures associated with a rebate-based model would have direct implications for patient care. For many CEs, including HMH, 34oB savings are reinvested into essential services such as oncology care for uninsured patients, behavioral health programs, and access points in underserved communities. Disruptions to the predictability or timing of these savings would force difficult decisions regarding service levels and program sustainability, with disproportionate impact on vulnerable populations. Maintaining the stability of the 340B Program is therefore critical to preserving access to care. HMH urges HRSA to prioritize models that preserve the predictability and stability of 34OB Program savings and explicitly evaluate patient access impacts before implementing any rebate-based approach. D. Safeguards and Protections for Covered Entities To ensure that any rebate-based model does not undermine the intent or stability of the 34OB Program, several safeguards are essential. These include a binding, expedited dispute resolution process to address denied rebate claims quickly and fairly, as well as clear data use restrictions prohibiting the use of submitted information for purposes unrelated to rebate payment. Additional protections are needed to ensure that participation in any model does not inadvertently weaken existing legal protections for CEs or their contract pharmacy arrangements. These safeguards are particularly important given the operational realities of rebate processing timelines and the sensitivity of the data required to support such models. To mitigate these consequences, cmy rebate model pursued by HRSA should establish a binding, expedited dispute resolutionprocess, require enforceable timelines for rebate payment that account for real-world operational constraints, and implement explicit data `firewalls" with strict limitations on data collection, access, and use. E. Interaction with State Law and Legal Considerations Rebate-based approaches raise important legal considerations, particularly regarding the interaction .:Sincerel Sar h Lec ner SVP, griefy ExternAffairs Letter to Administrator Engels re: HRSA-2O26-03042 April 14, 2026 Page 4 between federal program requirements and state laws governing contract pharmacy arrangements. Absent clear guidance, there is a risk that federal action could be interpreted as preempting state-level protections, creating uncertainty for CEs and their partners, and potentially disrupting patient access. HMH urges HRSA to clearly affirm that participation in any rebate-based model does notpreempt state laws protecting CEs and their contract pharmacy arrangements. F. Implementation Considerations Key implementation challenges associated with rebate-based models include financial strain, operational feasibility, and administrative complexity. Insufficient implementation timelines could limit the ability of CEs to establish the necessary infrastructure, train staff, and mitigate operational risks. Additionally, a lack of standardization across manufacturers would further increase administrative burden and complexity, particularly for large systems operating across multiple sites and service lines. Therefore, rf a rebate model is pursued, HMH urges HRSA to adopt a phased implementation approach, require standardized submission and reconciliation processes, and ensure sufficient lead time for CEs to achieve operational readiness. Conclusion While HMH appreciates HRSA's goal of bringing greater structure and oversight to the 340B Program, HMH reiterates its opposition to a rebate-based model. Such models risk introducing financial instability, administrative complexity, and unintended consequences that could ultimately undermine access to care. As HRSA considers next steps, it will be critical to ensure that any rebate-based framework preserves the Program's core purpose, minimizes burden on CEs, and includes strong safeguards to protect both providers and the patients they serve. Strengthening and enforcing the existing framework, rather than fundamentally restructuring it in ways that shift financial risk to providers, should remain a central consideration. Thank you for your consideration of these comments. If you have questions, please feel free to contact me at 2or-azo-822Q.or Sarah.Lechner@bmhn.org.
HRSA-2026-0001-1548Walgreen Co.2026-04-16T04:00Z14,497 chars
See attached file(s) Walgreen Co. 1399 New York Avenue NW, Suite 725 Washington, D.C. 20005 Walgreens.com 1 April 15, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287; HHS Docket No. HRSA-2026-03042) Submitted via: Regulations.gov Dear Mr. Engels: On behalf of Walgreens, we respectfully submit the following comments in response to the Request for Information on the potential use of rebates to effectuate the 340B ceiling price, published by the Health Resources and Services Administration (HRSA) in the Federal Register on February 17, 2026. (91 FR 7287; HHS Docket No. HRSA-2026-03042). Walgreens appreciates the opportunity to provide comment affirming the essential role of contract pharmacies in the 340B program and explaining how contract pharmacy arrangements can best operate to promote program integrity and patient access. Walgreens is a pharmacy and retail leader with a 120-year heritage of caring for communities. Our purpose is to create more joyful lives through better health. Operating nearly 9,000 retail locations across America, Puerto Rico and the U.S. Virgin Islands, Walgreens is proud to be a neighborhood health destination serving nearly 10 million customers each day. Walgreens pharmacists play a critical role in the U.S. healthcare system by providing a wide range of pharmacy and healthcare services, including those that drive equitable access to care for the nations medically underserved populations. To best meet the needs of customers and patients, Walgreens offers a true omnichannel experience, with fully integrated physical and digital platforms supported by the latest technology to deliver high-quality products and services in communities nationwide. We recognize HRSA seeks input on (1) whether to implement a 340B rebate model; (2) the standards and procedures that should govern any such model; and (3) the operational, financial, and access impacts on covered entities, manufacturers, pharmacies, and the broader supply chain. Our comments are structured to address these focal areas directly and to offer a practical, less disruptive alternative (a federal clearinghouse model) to mitigate duplicate discount concerns without undermining patient access or imposing unnecessary burden. I. Executive Summary of Walgreens Recommendations 1. Do not proceed with a blanket 340B rebate model for contract pharmacy claims. The rebate construct is a fundamental restructuring, not a minor technical change, and it conflicts with how 340B contract pharmacy arrangements currently operate. 2. If HRSA nonetheless tests rebates, it should adopt strict guardrails: uniform denial standards, 10-day payment timelines with enforceable remedies, minimal necessary data, and clear federal oversight. 3. Pursue a 340B clearinghouse (or repository) model, administered by a conflict-free federal contractor, to prevent duplicate discounts prospectively while preserving retrospective replenishment and patient assistance at the point of sale. CMS has already moved toward testing a Part D 340B 2 claims repository approach for inflation rebate exclusion, thus demonstrating feasibility and policy precedent. 4. Ensure any new framework explicitly protects contract pharmacy participation and patient access, consistent with HRSAs charge to evaluate access impacts alongside operational and financial effects. II. Why the Rebate Model is the Wrong Fit for Contract Pharmacy Operations Incompatibility with Established Workflows The rebate model fundamentally conflicts with the retrospective replenishment methodology embedded in contract pharmacy relationships. Under existing 340B operations, covered entities identify qualified prescriptions post-dispensation and subsequently procure replacement inventory at the 340B price. The rebate model, in contrast, would require pre-positioning of 340B-designated inventory at contract pharmacies prior to patient eligibility determination. This reversal disrupts established workflows, raises chain-of-custody and compliance concerns, and may contravene the core tenets of the 340B programs regulatory framework. Patient Impact: Undermining Real-Time Patient Assistance and Discount Programs Many hospitals rely on 340B-derived savings to deliver point-of-sale drug discounts and medication access programs targeting uninsured and underinsured populations. Because rebate eligibility is determined only after claim submission and adjudication, covered entities would lose the ability to offer discounts at the time of dispensing. This delay erodes the effectiveness of assistance programs and directly impairs the patient care mission of safety-net institutions. Walgreens uninsured patient program is one of the most broadly utilized by 340B covered entities today, which would likely be eliminated for prescriptions impacted by a rebate model. Good-Faith Inquiries and Bandwidth Burdens A rebate-based model would also impose significant administrative strain on covered entities by requiring them to initiate good faith inquiries each time a manufacturer or its vendor denies a rebate claim. Under such a system, covered entities would be responsible for tracking, researching, and disputing potentially large volumes of denials, many of which may stem from manufacturer or vendor-specific algorithms or opaque validation rules. This process demands substantial staff time, technical expertise, and documentation capacity, all of which divert resources away from patient care and core program functions. Without clear, uniform standards and a transparent oversight mechanism, a rebate model risks creating an unmanageable administrative burden that undermines the programs accessibility and the equitable participation of covered entities. Cash Flow Strain, Inventory Risk, and Feasibility A rebate model introduces significant inventory challenges for covered entities and contract pharmacies. Because products must be purchased at wholesale acquisition cost (WAC) upfront and rebates are issued only after claims are adjudicated, covered entities may feel pressure to buy more inventory than they need to ensure they can meet patient demand while still qualifying for rebates. This dynamic is especially problematic for products with short shelf lives, strict storage requirements, or highly variable utilization. By shifting the financial benefit to the back end of the transaction, the rebate model disrupts the longstanding point-of-sale discount structure that enables covered entities to align purchasing with real-time patient needs. The result is a system that encourages overpurchasing, increases the likelihood of expired or unused product, and ultimately undermines the programs goal of promoting efficient, responsible stewardship of resources. Implementation Timelines are Underestimated and Operationally Risky The operationalization of rebate-based reimbursement models necessitates comprehensive reconfiguration across provider, pharmacy, wholesaler, and TPA ecosystems. These transitions entail nuanced data governance, contractual amendments, and systems integration efforts that cannot be compressed into short turnaround periods. A 90-day advance notice by example is simply not feasible for deploying new 3 processes, updating technology infrastructure, or training frontline teams at scale. Premature enforcement risks supply chain fragmentation and unintended barriers to pharmaceutical access for at-risk patients. III. Why the Rebate Model Would Represent Unnecessary Regulation Transparency Justification is Superficial and Redundant Manufacturers have cited transparency as a rationale for rebate implementation. However, most covered entities already report comprehensive, patient-level dispensing data through mechanisms such as 340B ESP. Rather than enhancing visibility, the rebate model redistributes administrative burden and introduces ambiguity around pricing predictability and credit reconciliation, without delivering reciprocal insight or value to providers. Including Commercial and Uninsured Claims Does Not Align with a 340B Duplicate Claim Concern If the intent of a rebate model is to further safeguard against the risk of duplicate 340B claims on IRA applicable drugs for Medicare Part D prescriptions, then expanding the rebate model to include all claim types (including Commercial, uninsured and other non-Medicare Part D claims) is fundamentally misaligned with that rationale. More claim types mean more validation rules, more exceptions, and more manual review. The 340B program has existing state-level requirements for covered entities that desire to carve-in Medicaid FFS and/or Medicaid Managed Care prescriptions to their 340B program, some of which include the reporting of those that are determined to be 340B eligible, for this exact purpose of preventing duplicate discounts. This does not reduce duplicate claim concern; it increases the operational noise around them. Duplicate discount occurrences are statistically infrequent and are already mitigated through technological solutions employed by 340B administrators. These platforms utilize real-time eligibility monitoring and state- specific carve-in/out logic to ensure accurate claim segregation and prevent ineligible overlap. IV. How the Rebate Model is Inconsistent with Program Intent Manufacturers Usurping Governments Oversight Role At least one manufacturer said that it would apply its own definition of a 340B patient when it announced its plan to establish a rebate model. Vendors are also increasingly signaling that they may rely on proprietary algorithms and data-matching tools to determine whether a claim qualifies for rebate consideration. Such an approach could lead to patient definition standards that are at odds with the 340B statute and government guidance. It also could subject covered entities to the tremendous burden of having to operationalize and meet many different patient standards for the hundreds of manufacturers that participate in 340B. Lastly, it would usurp the government's role as the body responsible for implementing the program and ensuring stakeholder compliance. Significant Financial and Strategic Disruption to Safety-Net Providers HRSA has indicated that certain iterations of the rebate model may obviate upfront acquisition costs but would still necessitate payment at retail or WAC levels. Such pricing paradigms introduce untenable fiscal pressures on covered entities, particularly disproportionate share hospitals and rural providers. This model threatens program sustainability and may incentivize voluntary withdrawal from 340B participation, thereby undermining access to care in vulnerable communities. V. A Better Solution: A Federal 340B Clearinghouse (Repository) Model Instead of proceeding with the rebate pilot or expanding the use of 340B rebates more broadly, one option that HRSA could pursue is the development of a clearinghouse run by a federal government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent duplicate discounts. Manufacturers would only pay MFP rebates on non- 340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS has already proposed testing a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-MFP duplicate discounts and 340B-Medicad rebate duplicate discounts. 4 We believe that a clearinghouse incorporating the following elements would benefit manufacturers by preventing duplicate discounts and would provide covered entities and contract pharmacies with a process that avoids unnecessary cost or administrative burden. Key design elements Walgreens supports: Prevents duplicate discounts before they occur. Replaces disparate state rules and eliminates point-of-sale modifier workarounds by standardizing claim identification. Bars manufacturer-specific deduplication requirements and preserves HRSAs oversight authority. Requires only the minimum necessary data from covered entities with a mechanism for supplemental corrections. Limits manufacturer visibility to a 340B/non-340B indicator to preserve confidential and competitively sensitive information. Prohibits manufacturers from determining 340B eligibility for individual patients or claims. Eliminates the need to impose restrictive policies on how covered entities access discounted medications, including at contract pharmacies. Ensures neutrality by using a federal contractor with no conflicts of interest. A 340B clearinghouse model represents the most ideal solution for covered entities, contract pharmacies, manufacturers, and the government by providing an efficient, coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. VI. Conclusion Walgreens supports HRSAs goal of enhancing program integrity and preventing duplicate discounts. However, a mandatory or largescale 340B rebate model would disrupt established operations, reduce point-of-sale patient assistance, and increase administrative and cashflow burdens without delivering commensurate transparency or oversight benefits. We urge HRSA to pursue a federal 340B clearinghouse that standardizes deduplication without dismantling the upfront discount model and that ensures uniform, transparent rules under HRSAs leadership. We appreciate HRSAs consideration of these comments and welcome the opportunity to discuss operational details and implementation options that best serve patients, covered entities, manufacturers, and the federal government. Thank you in advance for your attention to the comments in this letter. If you have any questions, please feel free to call me at (224) 515-6942 or email me at ben.olson@walgreens.com. Sincerely, Ben Olson Vice President, 340B & Health Systems
HRSA-2026-0001-1549Cyntia Rodriguez Gutierrez · Forest Grove, OR, United States2026-04-16T04:00Z2,896 chars
My name is Cyntia, and I am a Quality Assurance professional at a federally qualified health center (FQHC) in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large FQHC serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. At our health center, thousands of patients rely on 340B-supported medications each year to manage chronic conditions such as diabetes, hypertension, asthma, and behavioral health needs. The current model allows us to provide these medications in a timely and affordable manner. Moving from up-front discounts to a rebate model would significantly increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and would instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. Even short delays in rebate reimbursement could disrupt medication purchasing cycles, particularly for high-cost or high-volume medications, creating real-time access issues for patients. This would directly impact our ability to provide medications in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. This impact would be especially pronounced in our rural service areas, where pharmacy access is already limited and patients often face additional transportation and cost barriers. These changes would disproportionately affect low-income patients and other underserved populations, further widening existing health disparities. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. I urge HRSA to maintain the current 340B discount structure. Preserving the stability of the 340B program is critical to ensuring continued access to affordable medications and essential services for the communities we serve. Thank you for your time and consideration. Sincerely, Cyntia R. Hillsboro, Oregon
HRSA-2026-0001-1550El Dorado Community Health Center2026-04-16T04:00Z60,945 chars
See attached file(s) April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of El Dorado County Community Health Centers, I appreciate the opportunity to submit comments to the Health Resources and Services Administration (HRSA) regarding the proposed 340B Rebate Model Pilot Program and the devastating impact it will have on our ability to serve the patients who rely on us. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, allowing them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial and administrative burden on CHCs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients, based on the impacts outlined below: I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives. 2 a. El Dorado Community Health Center (EDCHC) offers generous prescription discounts through our Sliding Fee Discount program to uninsured and underinsured patients. Prices are discounted to 340B Actual Acquisition Cost (AAC) plus a reduced dispensing fee. Our ability to do this would be severely restricted if we were required to purchase medications at full price and then wait for rebates we may never receive. Take Jardiance, an SGLT2 inhibitor that is a mainstay of primary care treatment for Type 2 Diabetes, chronic kidney disease, and heart failure. An uninsured patient currently pays just $30 for a 90-day supply under our sliding fee discount. Under the rebate model, we would have to purchase that same 90-day supply for $1,050, dispense it to the patient for $30, and only then submit a claim for a rebate. If that rebate is denied, we would be out over $1,000 on a single prescription. That is an unacceptable risk. The problem is even worse for partial dispensing. If a patient is prescribed only a small quantity out of a bottle, we can only submit a rebate claim for that small quantity. How do we provide that patients medication at our 340B acquisition cost when we have paid full retail price for the remainder of the bottle that may never be dispensed? b. Certain clinic services, such as our Mobile Medical Unit and Dental Van, which serve some of our most vulnerable patients, rely directly on funding generated by our 340B program. Again, this is how the 340B program was intended to function to stretch scarce Federal resources. The loss of revenue, increased costs, cash flow impacts as well as the administrative costs of the proposed rebate model will be detailed below, but will force us to make difficult decisions about how to allocate our limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. We should not be forced to make the difficult decision to reduce clinical staff that provide direct patient care so that we can afford the increased administrative staff that will be required to comply with the proposed rebate model this is not what the statute intended. II Financial Challenges for CHCs Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients, and this will create serious financial challenges. 3 a. Increase Upfront Annual Drug Spend Analyzing our data for the purchase of the 10 drugs on the current CMS list of MDPNP under the rebate model by calculating: WAC 340B for 2025 purchases by NDC &volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume projects the annual increase upfront drug cost to be $826,789.05 for 2026. This increase in upfront drug spend is projected to be $2,415,023.23 for the MFP drugs in 2027. This is a massive increase in drug spend. Since the entire difference must be submitted to and claimed back from manufacturers as rebates, the financial risk is clearparticularly if a portion of those claims are denied. The volume of resources and associated costs required to track the thousands of individual claims that compose these rebates is equally concerning. The increase in the Average Cost of Inventory on Hand, pending rebate payments, is calculated to be $125,000.00 for 2026, and $315,000.00 for 2027 for the MDPNP drugs. b. Wholesaler Credit Limits Purchasing drugs at full WAC will potentially lead us to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. c. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, we are unable to disclose our exact prompt-pay discount, however, EDCHC estimates its Annual Rebate Opportunity Cost to be approximately $67,220.48 for 2026 and $217,001.86 for 2027. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. d. Difficulty determining price The rebate model will also create an unpredictable process for determining discount levels and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. e. Partial package dispensing All drugs are purchased as full packages, yet prescriptions are often written for smaller quantities and not full bottles, which often leads to partial amounts left in bottles that never get sold and either expire or are wasted. For example: Direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal, and often less safe, alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant 4 increase in the risk of stroke, heart attack, and death.1Both of these drugs are included in the list of 10 MDPNP drugs for 2026. We currently sell a pack of 30 tablets (30-day supply) of Xarelto 20mg to a 340B qualifying uninsured patient for $10. However, providers may prescribe an initial dose of 15mg tablets twice a day for 21 days (i.e., 42 tablets) to initiate treatment, for which we also currently charge $10 even though it will result in 18 tablets that we will never sell. We can do this because of the low 340B price we currently pay for all Xarelto strengths. Under the proposed rebate model for the above example, our clinic would purchase a pack (30 tablets) of Xarelto 15mg for $611.82 but would not be able to claim a rebate for those 18 unused tablets, leading to a loss of $367.09 per prescription. This is not sustainable. III Administrative Costs and Complexities The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. We will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, compounding the burden of this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. a. Medi-Cal Impact California state Medicaid requires our Entity owned pharmacies that dispense 340B drugs to bill prescriptions at our Actual Acquisition Cost (AAC) plus a set dispensing fee. This AAC currently is the 340B cost price that we have paid for the drug. Under the proposed rebate model, we would purchase the drug at the full WAC price and so the AAC of the drug at the time of dispensing cannot be certain, since we cannot be certain that the manufacturer will ultimately pay a rebate that reduces the cost of the drug to the 340B price. 1 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 5 This puts our pharmacies at serious legal and contractual risk where we cannot accurately bill Medi-Cal at the time of dispensing as we cannot be sure of the AAC of the drug used. Even if we assume that we are going to get the rebate eventually and want to bill Medi-Cal at 340B AAC this will be extremely difficult/impossible for the following reasons: -the price loaded into our computers will be the price we were invoiced at the time of purchase i.e. WAC not 340B. -Even if I manually overwrite these prices on our system to reflect 340B prices, the daily Price file updates from our supplier will overwrite these back to the WAC price. -The current list of 10 drugs in the original rebate model actually becomes a list of a few hundred products if you consider all the different strengths and pack sizes for each drug, making the above manual interventions extremely impractical and time-consuming, while exposing us to severe financial and legal risk. There is no easy solution to this billing issue, and it illustrates how the rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. 6 Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. b. 340B Rebate Model Operational & Administrative Cost Calculations To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. As manufacturer restrictions have expanded to clinic-administered drugs and entity-owned pharmacies, CHCs have already absorbed steep increases in operational costs. A refund model would stretch these already-strained capabilities even further. Sliding Fee Discount: El Dorado County Community Health Center provided $289,952.00 (from 2025 UDS) through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: El Dorado County Community Health Center anticipates needing 1.50 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model at a cost of $123,000.00. External Vendor Costs: Given increased complexity, El Dorado County Community Health Center anticipates an increase of $39,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Although we have estimated an extra 10 hours per month of labor costs to report claims, significant resources will also need to be expended to accurately track and reconcile those claims. We have no way of knowing how many claims will be denied by manufacturers, but our experience with the MTF platform shows that rejections and queries are extremely time-consuming to resolve and impossible to project. To this end, we will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens.El Dorado County Community Health Center urges HRSA to require uniformity among eligible manufacturers to 7 mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $25,000.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. d. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. e. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our health center currently partners with 18 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 18 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. f. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs 8 would require new software, system integration, and staff training, with costs ranging from $20,000 to $30,000 annuallyand potentially much higher, depending on the software.2 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. g. Claim Reversals and Return to Stock Pharmacies are required to reverse claims for prescriptions that are not picked up by patients within 14 days of dispensing and return the drug to stock. Under the proposed rebate model, we will have to adopt a system where we delay the submission of a claim for a rebate until after the patient has picked up the medicine instead of at the time of dispensing, to avoid the administrative complexities of having to reverse and track rebate submissions on scripts that do not get picked up by patients. This will further increase the time between a Covered entity purchasing a drug at WAC price and receiving a rebate to reduce it to 340B price. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Our recommendations for such guardrails include: 9 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. I. Establishing a National, Neutral Claims Clearinghouse 10 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid duplicate discounts. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion El Dorado County Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. El Dorado County Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 11 El Dorado County Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this critical issue. Sincerely, Caleb Sandford Chief Executive Officer El Dorado County Community Health Center April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of El Dorado County Community Health Centers, I appreciate the opportunity to submit comments to the Health Resources and Services Administration (HRSA) regarding the proposed 340B Rebate Model Pilot Program and the devastating impact it will have on our ability to serve the patients who rely on us. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, allowing them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial and administrative burden on CHCs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients, based on the impacts outlined below: I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives. El Dorado Community Health Center (EDCHC) offers generous prescription discounts through our Sliding Fee Discount program to uninsured and underinsured patients. Prices are discounted to 340B Actual Acquisition Cost (AAC) plus a reduced dispensing fee. Our ability to do this would be severely restricted if we were required to purchase medications at full price and then wait for rebates we may never receive. Take Jardiance, an SGLT2 inhibitor that is a mainstay of primary care treatment for Type 2 Diabetes, chronic kidney disease, and heart failure. An uninsured patient currently pays just $30 for a 90-day supply under our sliding fee discount. Under the rebate model, we would have to purchase that same 90-day supply for $1,050, dispense it to the patient for $30, and only then submit a claim for a rebate. If that rebate is denied, we would be out over $1,000 on a single prescription. That is an unacceptable risk. The problem is even worse for partial dispensing. If a patient is prescribed only a small quantity out of a bottle, we can only submit a rebate claim for that small quantity. How do we provide that patients medication at our 340B acquisition cost when we have paid full retail price for the remainder of the bottle that may never be dispensed? Certain clinic services, such as our Mobile Medical Unit and Dental Van, which serve some of our most vulnerable patients, rely directly on funding generated by our 340B program. Again, this is how the 340B program was intended to function to stretch scarce Federal resources. The loss of revenue, increased costs, cash flow impacts as well as the administrative costs of the proposed rebate model will be detailed below, but will force us to make difficult decisions about how to allocate our limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. We should not be forced to make the difficult decision to reduce clinical staff that provide direct patient care so that we can afford the increased administrative staff that will be required to comply with the proposed rebate model this is not what the statute intended. II Financial Challenges for CHCs Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients, and this will create serious financial challenges. a. Increase Upfront Annual Drug Spend Analyzing our data for the purchase of the 10 drugs on the current CMS list of MDPNP under the rebate model by calculating: WAC 340B for 2025 purchases by NDC &volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume projects the annual increase upfront drug cost to be $826,789.05 for 2026. This increase in upfront drug spend is projected to be $2,415,023.23 for the MFP drugs in 2027. This is a massive increase in drug spend. Since the entire difference must be submitted to and claimed back from manufacturers as rebates, the financial risk is clearparticularly if a portion of those claims are denied. The volume of resources and associated costs required to track the thousands of individual claims that compose these rebates is equally concerning. The increase in the Average Cost of Inventory on Hand, pending rebate payments, is calculated to be $125,000.00 for 2026, and $315,000.00 for 2027 for the MDPNP drugs. b. Wholesaler Credit Limits Purchasing drugs at full WAC will potentially lead us to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. c. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, we are unable to disclose our exact prompt-pay discount, however, EDCHC estimates its Annual Rebate Opportunity Cost to be approximately $67,220.48 for 2026 and $217,001.86 for 2027. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. d. Difficulty determining price The rebate model will also create an unpredictable process for determining discount levels and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. e. Partial package dispensing All drugs are purchased as full packages, yet prescriptions are often written for smaller quantities and not full bottles, which often leads to partial amounts left in bottles that never get sold and either expire or are wasted. For example: Direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal, and often less safe, alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.Both of these drugs are included in the list of 10 MDPNP drugs for 2026. We currently sell a pack of 30 tablets (30-day supply) of Xarelto 20mg to a 340B qualifying uninsured patient for $10. However, providers may prescribe an initial dose of 15mg tablets twice a day for 21 days (i.e., 42 tablets) to initiate treatment, for which we also currently charge $10 even though it will result in 18 tablets that we will never sell. We can do this because of the low 340B price we currently pay for all Xarelto strengths. Under the proposed rebate model for the above example, our clinic would purchase a pack (30 tablets) of Xarelto 15mg for $611.82 but would not be able to claim a rebate for those 18 unused tablets, leading to a loss of $367.09 per prescription. This is not sustainable. III Administrative Costs and Complexities The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. We will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, compounding the burden of this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. a. Medi-Cal Impact California state Medicaid requires our Entity owned pharmacies that dispense 340B drugs to bill prescriptions at our Actual Acquisition Cost (AAC) plus a set dispensing fee. This AAC currently is the 340B cost price that we have paid for the drug. Under the proposed rebate model, we would purchase the drug at the full WAC price and so the AAC of the drug at the time of dispensing cannot be certain, since we cannot be certain that the manufacturer will ultimately pay a rebate that reduces the cost of the drug to the 340B price. This puts our pharmacies at serious legal and contractual risk where we cannot accurately bill Medi-Cal at the time of dispensing as we cannot be sure of the AAC of the drug used. Even if we assume that we are going to get the rebate eventually and want to bill Medi-Cal at 340B AAC this will be extremely difficult/impossible for the following reasons: -the price loaded into our computers will be the price we were invoiced at the time of purchase i.e. WAC not 340B. -Even if I manually overwrite these prices on our system to reflect 340B prices, the daily Price file updates from our supplier will overwrite these back to the WAC price. -The current list of 10 drugs in the original rebate model actually becomes a list of a few hundred products if you consider all the different strengths and pack sizes for each drug, making the above manual interventions extremely impractical and time-consuming, while exposing us to severe financial and legal risk. There is no easy solution to this billing issue, and it illustrates how the rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. b. 340B Rebate Model Operational & Administrative Cost Calculations To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. As manufacturer restrictions have expanded to clinic-administered drugs and entity-owned pharmacies, CHCs have already absorbed steep increases in operational costs. A refund model would stretch these already-strained capabilities even further. Sliding Fee Discount: El Dorado County Community Health Center provided $289,952.00 (from 2025 UDS) through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: El Dorado County Community Health Center anticipates needing 1.50 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model at a cost of $123,000.00. External Vendor Costs: Given increased complexity, El Dorado County Community Health Center anticipates an increase of $39,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Although we have estimated an extra 10 hours per month of labor costs to report claims, significant resources will also need to be expended to accurately track and reconcile those claims. We have no way of knowing how many claims will be denied by manufacturers, but our experience with the MTF platform shows that rejections and queries are extremely time-consuming to resolve and impossible to project. To this end, we will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens.El Dorado County Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $25,000.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. d. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. e. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our health center currently partners with 18 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 18 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. f. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would require new software, system integration, and staff training, with costs ranging from $20,000 to $30,000 annuallyand potentially much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. g. Claim Reversals and Return to Stock Pharmacies are required to reverse claims for prescriptions that are not picked up by patients within 14 days of dispensing and return the drug to stock. Under the proposed rebate model, we will have to adopt a system where we delay the submission of a claim for a rebate until after the patient has picked up the medicine instead of at the time of dispensing, to avoid the administrative complexities of having to reverse and track rebate submissions on scripts that do not get picked up by patients. This will further increase the time between a Covered entity purchasing a drug at WAC price and receiving a rebate to reduce it to 340B price. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Our recommendations for such guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid duplicate discounts. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion El Dorado County Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. El Dorado County Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. El Dorado County Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this critical issue. Sincerely, Caleb Sandford Chief Executive Officer El Dorado County Community Health Center
HRSA-2026-0001-1551East Alabama Medical Center2026-04-16T04:00Z12,915 chars
See attached file(s) East Alabama Heafth :11: April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.re2ulations.Rov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels: East Alabama Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs-10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for rnore than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. HRSA's consideration of a rebate model upends the upfront discount covered entities like East Alabama Medical Center rely on. The 340B program is designed to allow covered entities to stretch scarce federal resources and expand access to care, a goal that depends on the availability of immediate, upfront discounts. Our 340B programincluding our processes for managing 340B and non-340B drug inventory, the data we share with third-party vendors, and the resources we allocate to support patient care----is built around this framework. Transitioning to a rebate model would fundamentally restructure the program, increasing costs and administrative burdens for the very providers Congress intended to benefit, while also disrupting well- established reliance interests grounded in decades of consistent implementation. Accordingly, HRSA's assumption that a rebate modeleven one designed with safeguardswould have only a "minimal impact" on covered entities is incorrect. East Alabama Health 2000 Pepperell Ally Opelika, AL 36801 (334) 749-3411 East Alabama Heafth :11: A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSA 's continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSA 's withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and halm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers' beneficial treatment under the pharmacy benefit manager's (PBM's) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers' commercial agreements. At a minimum, manufacturers should not be permitted to use CEs' rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSA's new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates Fast Alabama Health 2000 Pepperell Pktty Opelika. AL 36801 (334) 749-3411 East Alabama Heatth are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340B's long history as an upfront discount program. Over the course of one year, we believe our hospital would be required to front drug manufacturers approximately $9 million dollars. The methodology used to calculate this amount is the sum of the current WAC price minus the current 340B price, multiplied by the annual units purchased in calendar year 2025. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSA's withdrawn rebate pilot. We received confusing and inconsistent information from the manufacturers' rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. The complexity of a rebate model will force East Alabama Medical Center to hire additional staff to prepare and submit claims data, reconcile rebate payments, pursue denied rebates, and file wrongfully denied rebate claims with HRSA's Administrative Dispute Resolution. Additional self-audits of the manufacturer's vendor, Beacon, to ensure that claims and rebate data is working correctly. The 340B rebate model would require covered entities to develop and maintain new system infrastructure to support end-to-end rebate management. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. HRSA's assumption that the submission of physician administered drugs being minimally impactful is incorrect. Physician administered drug claims are more complex than retail pharmacy claims. Covered entities provide relevant data elements to third-party administrators for patient eligibility to support virtual inventory and accumulation tracking for 340B drug utilization. This information is transmitted from the hospital Electronic Health Record (EHR) to East Alabama Health 2000 Pepperell Plovy Opelika, AL 36801 (334) 749-3411 East Alabama Heafth :11: the third-party administrator. In contrast, medical claims data for physician administered drugs data that covered entities may be required to submit originates from billing systems rather than the EHR. Because the claims data is not consistently captured within the EHR, it is more difficult to access and extract, creating additional administrative burden for covered entities. The medical claims data required under a rebate model that East Alabama Medical Center has not historically provided to a third-party administrator include the claim number, claim line number, HCPCS code, HCPCS code modifier, and health plan ID. These fields originate from the billing system and would be inherently challenging to extract and integrate with EHR data. Rebate costs will reduce resources our hospital currently rely on and will significantly affect patient care and uncompensated services. We currently use 340B savings to fund our Meds-to- Beds program, which ensures patients leave with needed medications. Our pharmacists work directly on inpatient floors and in the emergency department on transitions of care, sepsis initiatives, and post-discharge follow-ups. We also run a pharmacotherapy clinic for comprehensive medication reviews and compliance, and a mobile health bus serving rural communities. Losing these funds would force us to scale back these programs, reduce patient discounts, and limit uncompensated care that our most vulnerable patients rely on. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Rebate denials create financial uncertainty because hospitals rely on predictable drug savings. When rebates are denied, delayed, or disputed, that predictability disappears, introducing instability to already thin operating margins. Savings generated through the 340B program are not a surplus, they are essential to the communities they serve. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers' vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. East Alabama Health 2000 Pepperell Pkwy Opelika, AL 36801 {33-0 749-3411 Sine ely, Laura D. G President/CEO East Alabama Health Since January 1, 2026, our entity owned retail pharmacies have experienced a significant increase in Maximum Fair Price rebate denials. The process for managing these denials is highly complex and resource intensive, requiring substantial administrative effort to investigate and reconcile. The introduction of an additional rebate model would further compound inefficiencies and exacerbate existing denial challenges. Specifically, it would require covered entities to submit rebate data for all 340B claims across all payers, significantly increasing the administrative burden. This added complexity risks overwhelming current operational capacities and undermines the effectiveness and intent of the 340B program. Thank you for considering our comments. &at Alabama Health 2000 Pepperell Pkwy Opelika. AL 36801 (334)749-3411
HRSA-2026-0001-1552Susan Spalding · Plano, TX, United States2026-04-16T04:00Z1,396 chars
A 340B rebate model represents a fundamental departure from the original intent of the 340B Drug Pricing Program, which was established to help safetynet providers stretch scarce Federal resources and deliver more comprehensive care. For more than three decades, the program has allowed Community Health Centers to purchase outpatient medications at significantly reduced prices, enabling them to offer affordable medications to millions of lowincome and uninsured patients. Requiring Community Health Centers to purchase medications at full price and wait for rebates would impose severe cashflow burdens and place an immense financial strain on already resourceconstrained organizations. This shift would create new barriers for patients, particularly uninsured patients who depend on upfront 340B discounts, and would make it operationally impossible for many health centers to provide the sliding fee scale and discounted medications required by law. The proposed 340B Rebate Model Pilot Program directly threatens Community Health Centers core mission and undermines congressional intent. By destabilizing pharmacy operations and diverting limited resources away from patient care, this model would cause disproportionate harm to the patients served by Community Health Centers and other safetynet providers, jeopardizing access to medications for the 52 million patients who rely on them.
HRSA-2026-0001-1553Temple University Health System2026-04-16T04:00Z29,309 chars
Please see the attached letter dated April 16, 2026 of Temple University Health System. This letter includes corrections to previously submitted letter of April 9, 2026. Please disregard the letter of April 9, 2026 (tracking number mnr-ugan-3204). Thank you! Page 1 of 10 Abhinav Rastogi, MBA, MIS President and CEO Temple University Health System 3509 North Broad Street Philadelphia, PA 19140 April 16, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted Electronically via https://www.regulations.gov Re: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Temple University Hospital, a 340B covered entity serving a highly vulnerable population in Philadelphia, Pennsylvania, I thank you for the opportunity to comment on the above referenced notice of the Health Resources and Services Administration (HRSA). To preserve major safety-net institutions like Temple University Hospital (TUH) and the intent of the 340B program, we recommend that HRSA not implement a rebate model. The 340B Drug Pricing Program enables safety-net hospitals to purchase outpatient drugs at significant discounts from manufacturers. Its purpose is to help these facilities "stretch scarce federal resources as far as possible, reaching more patients and providing more comprehensive services." Congress designed the program as an upfront discount model, and a shift to a retrospective rebate structure represents a fundamental departure from that statutory framework. There is no cost to taxpayers since the program allows covered entities to leverage discounts from pharmaceutical companies, enabling hospitals to provide their communities with access to care that they might not otherwise receive. We estimate that the fiscal impact of the 340B rebate model pilot program will be about $5.7 million for TUH in 2026. This figure includes direct start-up costs, operational expenses, third- party processing fees, legal advice, training, and consulting expenditures, as well as the anticipated negative effect on cash flow and the expectation of manufacturer denials. If the rebate program is expanded in subsequent years to cover an additional 15 drugs each year within the drug negotiation program, projected costs would increase to about $13 million in 2027 and $20 million in 2028. Notably, these costs are not associated with improvements in patient care or program integrity, but rather with administrative restructuring required by the rebate model. Page 2 of 10 Given their high profitability, pharmaceutical manufacturers suffer no hardship selling drugs to covered entities with an upfront discount. However, the planned 340B rebate model will cause financial and administrative challenges to covered entities, especially those whose patient populations are highly dependent on government payers. Importantly, these burdens would be imposed without clear evidence that a rebate model is necessary to address duplicate discount concerns or program integrity risks. Pharmaceutical manufacturers typically have operating margins above 20%, including the manufacturers of the ten drugs in the 2026 340B rebate model. In contrast, Pennsylvania general acute care hospitals had a 2024 average operating margin of 6.8%, with 37% of hospitals reporting negative margins and another 14% of hospital with margins between 04%, according to the Pennsylvania Healthcare Cost Containment Council (PHC4). With over half of Pennsylvania hospitals with slim or negative margins, the Commonwealths safety net system is already weak. Moreover, as H.R. 1 takes effect, hospital margins will further erode. This disparity underscores that the financial risk of a rebate model would be borne disproportionately by safety-net providers rather than manufacturers. Beginning on page 4 of this letter, we provide detailed responses to the specific questions posed in HRSAs RFI. Below is a concise summary of our concerns. 1. Increase Operational Costs. We anticipate additional operational costs of $650,000 that could otherwise be invested in patient care and community health improvement. This includes start-up costs, ongoing staff costs, 3d party platform and associated costs. These represent new administrative layers that do not exist under the current model. 2. Impede Cash Flow. TUH expects a $2.3 million decrease in cash reserves in 2026 under the rebate model. Expanding the rebate model in 2027 to include 15 negotiated drugs would reduce cash reserves by $6.3 million; a further expansion in 2028 with 15 more drugs is expected to decrease cash reserves by $10.7 million. Rebates replace upfront discounts, causing delays in reimbursement that will challenge the operational budget and limit spending on routine costs and patient care. Payment delays effectively shift financing responsibility from manufacturers to safety-net providers, jeopardizing their liquidity and increasing their risk of breaking bond covenants and lowering credit ratings. 3. Incentivize Manufacturer Denials. If manufacturers deny discounts, covered entities will face negative consequences. Such denials would drive up drug expenses for TUH, limiting our capacity to offer medical care and servicesan outcome directly opposed to the intent of the 340B program. Absent clear, enforceable standards and penalties, the rebate model creates incentives for delay or denial that do not exist under the current upfront discount structure. Based on a denial rate of 18%, which corresponds to TUH's historical rate of denials from health insurers, TUHs savings from the 340B program would be negatively impacted by about $2.7 million in 2026. Although we could recover some of this on appeal, the process would nevertheless tie up significant capital as denials are adjudicated. We Page 3 of 10 would expect the cost of manufacturer denials to grow each year by about $3 million in 2027 and 2028. 4. Undermine Program Integrity. A rebate model will compromise the overall 340B program by reducing oversight and leading to practices that weaken trust, cause confusion, and reduce compliance. Fragmenting responsibility across multiple entities and platforms introduces new points of failure and increases audit complexity. 5. Reduce Care Access for All. The 340B rebate program will limit access to care for vulnerable groups, as well as patients on Medicare and those with commercial insurance. By decreasing funding for safety-net providers, the rebate model could lead to reductions in medical services, hinder investments in modern technology, facility development, and workforce initiatives, restricting care availability for everyone. While HRSA has expressed interest in exploring alternative models to address duplicate discounts and improve transparency, these objectives can be achieved through targeted, less disruptive approaches that preserve the upfront discount structure. The rebate model is not the least burdensome or most effective mechanism to achieve these goals. Background on Temple University Hospital Temple University Hospital (TUH) is an indispensable provider of health care in the largest city in America without a public hospital. As a disproportionate share hospital (DSH) and major academic medical center, TUH plays a critical role in maintaining access to care for low-income and medically complex patients. It serves the greatest volume and highest percentage of patients covered by Medicaid among Pennsylvanias full-service safety-net providers. 340B savings are not supplementary; they are foundational to TUHs ability to sustain these services and reinvest in patient care. Without the savings achieved through 340B, TUH could not invest in effective and innovative programs that meet the critical healthcare needs of our communities. TUHs Episcopal Campus and our new hospital for Women and Families both serve North Philadelphia and its surrounding Kensington neighborhood, which are widely known for their incidence of poverty; for open-air dealing of opioids tainted by fentanyl, xylazine, medetomidine and other adulterants; and for community-based and domestic violence. These overlapping public health challenges require sustained, resource-intensive clinical and social interventions that depend on stable funding streams like 340B. Over the last three years, TUH doubled the size of its Emergency Department, tripled the capacity of its Crisis Response Center, and opened a substance use disorder clinic on its Episcopal Campus. TUH also expanded its Burn Center to offer advanced wound care treatments and created an Intermediate Care Unit to support patients going through withdrawal from medetomidinea strong veterinary sedative now frequently found in Philadelphia's illicit drug supply. TUH is a critical component of Philadelphias Kensington Wellness Court, a diversionary program offering pathways to safety, treatment, and recovery as an alternative to incarceration. These investments reflect the type of community-based, cross-sector care delivery that the 340B program is intended to support. Page 4 of 10 Last year, TUH opened its hospital for Women and Families to expand access to medical and social services, aiming to lower maternal mortality in an area where many infants are born to mothers covered by Medicaid. The facility improves care for moms and babies with neonatal abstinence syndrome and integrates physical, behavioral, and substance use treatment for women. This integrated care model is particularly dependent on flexible funding streams that can support services not otherwise fully reimbursed under traditional payment systems. Hospitals in similarly challenged communities typically exit the market, close services associated with public health needs or suffer insolvency. In southeastern Pennsylvania, the recent closures of the Crozer Health System and Hahnemann Hospital, and the struggles of St. Christophers Hospital for Children serve as notable examples. TUH upholds its mission by maintaining a strong commitment to serving the community through prudent investments in public health and safety infrastructure. However, this commitment is increasingly difficult to sustain amid tightening margins and growing uncompensated care burdens. Although we acknowledge HRSA's responsibility in enforcing 340B discounts and evaluating alternative models, TUH would be substantially impacted by HRSAs proposals to shift from upfront discounts to rebates within the 340B Drug Pricing Program. Such a shift would not occur in a vacuumit would directly affect TUHs ability to maintain the programs and services described above. In response to HRSAs specific questions in its request for information, we outline below how a transition to a 340B rebate model would change how financial risk is distributed, escalate administrative workloads, influence cash flow, and further challenge the financial stability of TUH. Taken together, these impacts would have downstream consequences for patient access, service availability, and community health outcomes. Cost to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount Transactions. In FY25, our organization processed a total of 826,296 transactions under the 340B program: 487,000 mixed use 17,008 contract Rx 322,288 in-house pharmacy transactions. Current Administrative Costs. $7,371,137 total costs: $917,000 for operations and staffing $1,527,405 for third party administration $4,926,732 in pharmacy dispensing fees Key Cost Drivers. Operating under a 340B rebate model would require TUH to incur additional costs associated with operational oversight, compliance, third- party administration fees, IT infrastructure, and ongoing system expenses, as well as claims reconciliation to ensure timely and accurate realization of 340B savings. These requirements represent a shift from a point-of-sale discount model to a claims adjudication model, significantly increasing administrative intensity. Page 5 of 10 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Incremental and Operational Costs. The 2026 Maximum Fair Price (MFP) drug list covers ten drugs across over eighty-four National Drug Codes (NDC) in various pharmacy settings. Additional Administrative Costs. We estimate these to be $488,000 including first year operational and start-up costs of $101,000; ongoing expenses of $302,000; and third-party processing costs of $85,000 per year. If the rebate model expands to include more drugs and integrates with the Medicare Transaction Facilitator (MTF), part of CMS Medicare Price Negotiator Program, the amount would rise to about$553,000. These estimates assume stable system performance and do not account for costs associated with disputes, appeals, or system outages. Methodology and Assumptions. Building the necessary IT infrastructure requires updates to data fields across hospital electronic health records (EHR), retail pharmacy systems, and feeds to various contract pharmacy programs. Since drug manufacturers may use platforms beyond Beacon, multiple secure shell file transfer protocol (sFTP) feeds are needed. Updating these feeds involves revising specifications, testing, and validating data exchanges with third party administrators and pharmacy partners on several pharmacy platforms. Estimated Year 1 salary and benefits costs. We would expect to spend $101,000 in the first year, assuming salary and benefit cost at $97.50/hour, as follows: 1. A qualified 340B team, including a dedicated IT analyst, would spend 500 hours over ninety days to develop, review, test, and validate rebate model specifications at a cost of $49,000. 2. Additional salary and benefit of $52,000, assuming 16 hours per week for the remaining 38 weeks of the year. Ongoing costs. These include data extraction, ongoing claims submission across various TPA platforms, meeting deadlines like 45-day windows, rebate tracking and reconciliation, and claim audits. These tasks require two full-time professional staff, one 340B team member and one accounting/IT supportat an annual salary and benefit cost of $302,000. Third Party Processing Costs. The annual cost for a 340B rebate software system starts at $85,000, based on tracked data volume, but could increase to $150,000 per year if the rebate model expands to include more drugs and integrates with the intersections between the MTF and 340B rebate programs. The third-party platform is needed for processing claims, tracking submissions from both internal and contracted pharmacies, reconciling claim data, and overseeing denials. Current Tracking. We currently track about 700 MTF transactions each month for ten MFP drugs scheduled for 2026 (8,400 per year). This Page 6 of 10 number will increase significantly when fifteen MFP drugs are added in 2027 and 2028. Activities and functions included in incremental costs. The 340B Rebate Model Pilot Program imposes significant administrative demands, such as building IT infrastructure to facilitate data exchange between pharmacies and hospitals across various platforms. The model would require a considerable increase in daily tasks, including timely data submission, rebate tracking and reconciliation, appeals for missed rebates, and close monitoring of the process to ensure accuracy. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program Additional FTEs needed for implementation. As stated above; to implement the rebate model, 2 full-time employees (FTEs) are required: one will join the 340B team to oversee $15 million in spending on 10 MFP 2026 drugs, and another IT/accounting professional to provide ongoing support. If more drugs are added in in 2027, annual drug costs will rise by $27 million and $29 million, which will require 2 additional FTEs each year to manage at an additional $302,000 per year. Roles, Responsibilities, and Functions of Additional FTEs. As described above, one FTE will be assigned to address operational requirements related to the 340B Rebate Model. An additional FTE will focus on oversight, including financial reconciliation of claims. d. Systems Infrastructure for Implementation of a 340B Rebate Model Pilot Program Description of new IT infrastructure needed. Existing IT systems supporting the 340B program need updates to data specifications and infrastructure, including elements required for claims submission. If the rebate model becomes permanent, a dedicated IT platform will be necessary to track claims and payment reconciliations, with estimated annual costs of $150,000. Estimated costs for system development. Estimated platform and data feed build costs: $137,500 (labor); recurring labor costs: $135,000 plus benefits. Supporting a 340B rebate model for 10 drugs requires a software platform costing $85,000, with annual costs rising above $150,000 if additional drugs are added. e. Other Anticipated Costs Under a Potential 340B Rebate Model Pilot Program Additional associated costs. Legal review, training, and consulting services could exceed $100,000 in year 1. Organization specific factors: The 340B rebate model increases costs and reduces TUHs ability to serve its community. Managing the complex rebate process diverts resources from the original intent of the 340B statute, which was to help hospitals stretch federal funds and provide more comprehensive care to low-income communities. Page 7 of 10 Specific impacts on patient access to drugs. The 340B rebate program will limit access to drugs and care for vulnerable groups, as well as patients on Medicare and those with commercial insurance. By decreasing funding for safety-net providers, such a program could lead to reductions in medical services, hinder investments in modern technology, facility development, and workforce initiatives, restricting care availability for everyone. Additionally, the rebate model necessitates timely task completiontypically within 45 daysand failure to meet these requirements may compromise essential savings and patient care accessibility. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Impact of payment timing on cash flow. In 2026, the 10 drugs listed as associated with the MTF would cost our organization $38M per year if purchased at WAC prices, compared with the $23M that TUH currently pays with 340B discount. While rebates would theoretically offset this difference, TUH must commit at least 10 days' working capital during processing, causing a lasting cash reserve reduction of $411,000. If additional drugs are included in 2027, this reduction could exceed $2 million. This effectively converts the 340B program into an interest-free loan from safety-net providers to manufacturers. b. Typical payment terms under current wholesaler contracts. Wholesaler agreements and discounts are structured based on overall pharmaceutical expenditures, the proportion of 340B drug purchases, and payment terms. 340B drugs receive a greater discount than non-340B drug purchases, with each $10,000,000 reduction in 340B drug spend equating to a $100,000 decrease in cost of goods savings for safety net hospitals. Additionally, decreased 340B upfront spending may jeopardize the base cost of goods discount. This presents a significant concern if hospitals transition from an upfront drug discount model to a 340B rebate approach. c. Description of how a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. If our organization had to make substantial WAC purchases, payment timing to drug wholesalers would be significantly delayed compared to current agreements, making it harder for us to pay promptly. Extending the payment period from 15 to 30 days would add 0.75% to the total cost of goods, resulting in more than $315,000 in extra monthly fees. This estimate is based on the current average drug spend and the proportion of 340B versus non-340B spending. However, if WAC spending increased further, missing biweekly payment terms could cost us over $3,780,000 per year, since the 0.75% fee would apply to an even larger portion of WAC purchases due to fewer upfront 340B purchases. d. Description of how payment model could be structured to ensure that manufacturers adhere to a 10-day payment requirement. Manufacturers would be required to provide data verifying compliance with the 10-calendar-day payment requirement. Covered entities will have limited recourse in cases of manufacturer noncompliance unless meaningful penalties are established and strictly enforced. Such Page 8 of 10 penalties should include automatic interest accrual, civil monetary penalties, and potential exclusion from participation in the rebate model. e. Potential Structure for a 340B rebate model pilot to address cashflow. The 340B rebate model should include direct advance federal financial support to offset cash flow disruptions and extra costs. The COVID-19 safety net pool, which aided hospitals facing cash flow issues, is a useful precedent. A 340B safety net pool would address immediate liquidity needs and help hospitals maintain essential care during the pilot. Rebate Denials a. Guardrails for denials. Drug manufacturers should not be permitted to determine patient eligibility or interpret the provisions of the 340B Public Health Act. Their involvement is confined to denying claims solely in cases where payment has previously been issued to another entity or to the same entity. HRSAnot manufacturersshould retain primary interpretive authority over eligibility and compliance standards. b. Suggested standard process elements. Manufacturers should report denials, costs, and reasons associated with denials to HRSA to ensure compliance. Also, covered entities must have recourse to challenge denials in a fair and timely fashion. Data Collection by Covered Entities a. Description of TUH process for collecting, maintaining, and retaining relevant 340B data. 340B data is distributed across various platforms, including mixed-use third- party administration systems, contract pharmacy systems, claim hubs, pharmacy management systems, and hospital electronic medical record systems. Additionally, 340B purchase information is maintained within wholesaler and drug distributor systems. b. Current strategies to maintain data accuracy. TUH reviews all retail pharmacy and contract pharmacy claims produced internally to ensure compliance, accuracy, completeness, and consistency. It performs focused audits on mixed claims data. A transition to a rebate model would require segregating certain drugs and NDCs from each data source and compiling claims data for 340B Rebate Drugs from mixed use, in-house pharmacy, and contract pharmacy. The process would span several IT platforms, including electronic health records, in-house pharmacy operating systems, and numerous third-party contract pharmacy administrator systems, since the universe of 340B claims data is drawn from various sources. c. Impact of a 340B rebate model pilot on data collection. Implementing a 340B rebate model would increase ongoing data collection and claims reconciliation across retail, contract pharmacy, and mixed-use settings. Even tracking just 10 drugs could add over 8,400 annual claims, placing $15.1 million at WAC-340B cost at risk. Inadequate monitoring or reconciliation could harm our healthcare institution. d. Description of specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and Page 9 of 10 whether such data is already being furnished to existing third parties. The implementation of a 340B Rebate Model is not required, as all 340B claims can be accurately identified using a National Council for Prescription Drug Programs (NCPDP) claim submittal code or by uploading maximum fair price (MFP) claims that coincide with the 340B program. e. Recommendations for ensuring a potential 340B Rebate Model Pilot Program has appropriate guardrails to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. The 340B Rebate Model data feeds contain multiple data points that may enable manufacturers to solicit providers. Data fields should exclude protected health information, revenue figures, or any information not pertinent to the 340B drug pricing program. Program Integrity a. How a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. The 340B Rebate Model represents a major change from the original intent of the 340B drug pricing program. Manufacturer-developed rebate models create significant expense and administrative burden for safety net hospitals that will reduce access to care. b. Explanation of whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs. The 340B drug rebate model would significantly impede covered entities and do little to reduce duplicate discounts. There are more efficient methods to identify claims without withholding essential funds from safety net hospitals. ii. Reduce diversion or improper claims. The 340B drug rebate model introduces significant administrative complexities without effectively addressing diversion or improper claims, resulting in reduced access to care. iii. Increase pricing transparency for stakeholders. The 340B Rebate Model lowers transparency and reduces program savings intended for patient care. A simple claim identifier can prevent duplicate discounts, like both a 340B discount and an MFP rebate on the same prescription. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Sharing 340B claims data can be accomplished through a pharmacy switch or by submitting claims without pausing upfront discounts. Another approach is to add a claim modifier to claims that are both MFP and 340B, or to submit an MFP/340B claims via a portal, thus maintaining integrity and eliminating duplication of MFP and 340B savings. These approaches would achieve HRSAs stated goals of transparency and duplicate discount prevention without introducing the financial and operational risks associated with a rebate model. Importantly, they build on existing infrastructure rather than requiring entirely new systems. Page 10 of 10 d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. The 340B Rebate model will unnecessarily increase the complexity of the 340B drug pricing program. While it will add no meaningful value, it will severely limit hospitals ability to provide access to quality health care for the patients and communities they serve. Conclusion Any rebate model would create significant costs and burdens for Temple University Hospital, outweighing any benefits. HRSAs consideration of the rebate system is well intended but seems misguided. The proposed rebate model introduces substantial operational complexity, shifts financial risk to safety-net providers, and threatens to destabilize access to care in already fragile communitieswithout unmistakable evidence that it would meaningfully improve program integrity or reduce duplicate discounts. Importantly, HRSA has alternative policy tools availableincluding standardized claim identifiers, enhanced data sharing mechanisms, and targeted oversightthat can achieve the agencys stated goals without fundamentally altering the structure of the 340B program. To advance the sustainability of major safety-net institutions such as Temple University Hospital and uphold the objectives of the 340B program, we respectfully request that HRSA refrain from implementing a 340B Rebate Model Pilot. At a minimum, HRSA should defer implementation until more targeted and administratively feasible alternatives are fully evaluated and validated. Thank you for the opportunity to comment on this important topic. Should you have any questions or wish to discuss, please contact Katherine Levins at Katherine.Levins@tuhs.temple.edu. Sincerely, Abhinav Rastogi, MBA, MIS President & CEO Temple University Health System
HRSA-2026-0001-1554Hannibal Regional Hospital2026-04-16T04:00Z13,143 chars
See attached file(s) Hannibal Regional Healthcare System GUIDING YOU TO ETTER April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MiD 20852 Re: Request for Wormation: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Hannibal Regional Hospital in Hannibal, Missouri, we are grateful for the opportunity to comment on the Depaitment of Health and Human Services' (HHS) "Request for Infoimation: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Hannibal Regional Hospital that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Hannibal Regional Hospital relies on, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Hannibal Regional Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates 1 6500 Hospital Drive, Hannibal, MO 63401 I (573) 248-1300 I hannibalregional.org we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Hannibal Regional Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Hannibal Regional Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Hannibal Regional Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital and far above and beyond what we are experiencing now. Hannibal Regional Hospital estimates that the shift to a rebate model for up to 25 drugs would incur one-time startup costs exceeding $75,000 and ongoing annual administrative costs of approximately $120,000. Key Cost Drivers: These costs are driven by the need to upgrade our Third-Party Administrator (TPA) software to handle rebate tracking and the diversion of 1.5 FTEs (Full-Time Equivalents) from clinical support to manual data reconciliation. Specific Activities: We must now manually audit every claim against manufacturer rebate portals to ensure payment. Previously, the discount was applied at the point of sale; now, we must track "pending" funds across 25 different drug lines, each with unique manufacturer requirements. Impact on Savings: These administrative burdens will effectively reduce our 340B net benefit by an estimated 20-25% for these specific drugs, money that is currently used to subsidize our sliding-fee scale for uninsured patients in northeast Missouri. Staffing Impacts Under a Potential 340B Rebate Program. Hannibal Regional Hospital does not currently have the staff needed to comply with a Rebate Program. Additional Personnel: We anticipate needing two additional administrative specialists to manage the increased volume of data submission and dispute resolution. We would require at least six months of lead time to recruit and train these individuals in the specialized nuances of 340B compliance. Reallocation of Care: Without new hires, our current pharmacy leadershipwho currently spend 80% of their time on patient-facing clinical oversightwould be forced to spend over half their week on "chasing" rebates. 2 IIRSA Estimate Critique: HRSA's estimate of 5 hours per week is a gross underestimate for a rural system. It fails to account for the lack of automated data feeds between rural Electronic Health Records (EHRs) and the disparate manufacturer portals, which necessitates manual spreadsheet management. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Hannibal Regional Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Manual Data Bridging: Because our TPA does not have a direct data feed into our specific EHR for medical claims data, our staff must manually extract and scrub data files for submission. This increases the risk of human error and potential "denials" from manufacturers. Financial Tracking: We must implement new accounting modules to track "Accounts Receivable" for rebates, a category that did not exist under the upfront discount model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, our 340B Coordinator conducts monthly audits using Third-Party Administrator (TPA) platforms and our Electronic Medical Record to manage the activities required for participation in the 340B program. If the potential 340B Rebate Model Pilot Program were enacted, it would require us to implement the Beacon system. This would subsequently increase our coordinator's workload by requiring additional data uploads to the platform in addition to 340B ESP. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Hannibal Regional Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. For a rural hospital operating on slim margins, "floating" the cost of expensive specialty drugs is a high-risk endeavor. Cash Flow Risks: We estimate having to front several hundred thousand dollars per month in "interest-free loans" to drug manufacturers. We do not have the excess liquidity to sustain this gap. Wholesaler Misalignment: HRSA's claim that rebates are paid before wholesaler invoices are due is factually incorrect for our facility. Our wholesaler terms are typically Net 30, while disputed rebates can lag for 60-90 days. 3 10-Day Window: Even a 10-day window is too long when dealing with high-cost oncology or biological drugs where a single week's inventory can represent a significant portion of our weekly operating cash. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Hannibal Regional Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Service Reductions: We may be forced to scale back our outreach clinics and uncompensated care programs that serve low-income residents in northeast Missouri. Access to Meds: If we cannot afford to "float" the full WAC price for high-cost drugs, we may be forced to stop stocking certain specialty medications, requiring patients to travel over 100 miles to urban centers for treatment. Financial Planning: The uncertainty of this pilot has already led us to pause a planned upgrade to our rural health clinic equipment. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Hannibal Regional Hospital reasonably relied on this history when designing its internal operations, staffing, third- party contractual relationships, and financial planning for the use of 340B savings all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. 340B savings are not a "bonus"; they are baked into our annual operating budget. Our long- term capital planning and our ability to maintain a 24/7 emergency department in a rural area rely on the predictable, upfront liquidity provided by the current discount model. Switching to a rebate model mid-stream upends years of financial forecasting. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Hannibal Regional Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. 4 Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Hannibal Regional Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Hannibal Regional Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, ( C. Todd Ahrens, FACHE President and Chief Executive Officer Hannibal Regional Healthcare System 5
HRSA-2026-0001-1555Mercyhealth2026-04-16T04:00Z13,725 chars
Mercyhealth strongly opposes implementation of a 340B rebate model, as it represents a fundamental departure from the programs longstanding prospective discount structure that has enabled covered entities to expand patient access to care for nearly four decades. Transitioning to a rebate-based approacheven on a limited pilot basisintroduces significant operational complexity, financial risk, and administrative burden without clear evidence of improved program integrity. Experience with the Inflation Reduction Acts Maximum Fair Price (MFP) rebate process demonstrates the real-world challenges of rebate models, including delayed or unpaid claims, increased staffing needs, and the requirement to manage parallel reimbursement structures. Hospitals and health systems estimate that 5%20% of rebate claims may be delayed or denied, representing approximately $500,000 to $3 million annually per hospital in at-risk revenue, in addition to $150,000 to $400,000 in administrative costs required to submit, reconcile, and appeal these claims. These burdens divert critical resources away from patient care and disproportionately impact health systems already operating under financial constraints. Rather than implementing a rebate model, HRSA should prioritize alternative solutions that preserve upfront 340B discounts while addressing manufacturer concerns, such as a neutral third-party claims clearinghouse. If a rebate model is pursued despite these concerns, it must be voluntary, limited in scope, and include enforceable safeguardsparticularly ensuring that HRSA retains full administrative authority and that covered entities are fully compensated for all associated costs. Absent these protections, a rebate model risks undermining the effectiveness of the 340B program and the essential services it supports for vulnerable patient populations. April 16th , 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our pharmacists, technicians, leadership and all partners at Mercyhealth we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer- imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Projected Operational Costs for Mercyhealth: Category Estimated Range IT / systems $75K $150K Labor (net new effort) $100K $200K Finance + audit $50K $125K Training / change mgmt $10K $30K Total $235K $505K annually Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. Unpaid IRA prompt pay requirements because manufacturers are determining themselves if a claim is indeed 340B or not. Category Estimated Range Q1 of CY2026 Annual Estimated Impact Unpaid or underpaid claims as of 3.31.2026 $50K - $100K $200-400K Labor (net new effort) $37K - $100K per quarter $150-400K This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug- specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Drew Dretske, PharmD, MS Director, Ambulatory Pharmacy Services Mercyhealth Pharmacy Services ddretske@mhemail.org
HRSA-2026-0001-1556James Martin · Louisville, KY, United States2026-04-16T04:00Z1,719 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, James Martin MD Family Health Center - Portland
HRSA-2026-0001-1557MyCare Health Center2026-04-16T04:00Z4,399 chars
I strongly oppose the proposed 340B rebate model pilot and urge the agency to reconsider moving forward with this approach. As a participant in the 340B program serving vulnerable and underserved patients, I am deeply concerned that the rebate model would significantly undermine the intent, stability, and effectiveness of the 340B programparticularly for Federally Qualified Health Centers (FQHCs). The 340B program was created to allow safetynet providers to stretch limited federal resources, enabling us to provide more comprehensive services, expand access to care, and improve health outcomes for lowincome and medically underserved populations. For FQHCs, 340B savings are not supplemental or optionalthey are foundational to our ability to deliver care regardless of a patients ability to pay. The Rebate Model Creates Unsustainable Financial Risk for FQHCs Under the existing 340B model, covered entities receive upfront discounts that provide predictability and allow us to responsibly budget for medications and reinvest savings into critical patient services. The proposed rebate model would replace this structure with delayed and uncertain manufacturer reimbursements, forcing FQHCs to front the full cost of drugs with no guarantee of timely or accurate rebate payments. FQHCs do not have the cash reserves or administrative capacity to absorb this level of financial risk. Delays, disputes, or errors in rebate payments could lead to severe cashflow disruptions, threatening our ability to procure medications, pay staff, and maintain services. For many health centers, even shortterm gaps in reimbursement could have longterm consequences. Increased Administrative Burden Diverts Resources from Patient Care The rebate model would dramatically increase administrative complexity by requiring new tracking, claims reconciliation, duplicate dispute resolution processes, and compliance oversight. FQHCs already operate with lean administrative infrastructure, and diverting staff time and resources to manage rebate systems would directly pull resources away from patient care. Unlike large health systems or pharmacy benefit managers, FQHCs are not equipped to manage rebate adjudication at scale. This added burden is contrary to the purpose of the 340B program and would disproportionately harm the very providers the program is meant to support. Patient Access to Medications and Services Will Be Harmed If implemented, the rebate model risks disrupting patient access to timely medications. Health centers may be forced to limit formularies, delay dispensing, or reduce onsite pharmacy services due to cash constraints or uncertainty around reimbursement. These impacts would fall hardest on patients who already face barriers such as poverty, chronic illness, lack of transportation, and limited access to alternative providers. Additionally, reduced or unstable 340B savings would limit our ability to fund enabling services such as case management, transportation assistance, translation services, behavioral health integration, and chronic disease programsservices that are essential to improving health outcomes but are often not reimbursed adequately through other mechanisms. The Pilot Undermines Congressional Intent of the 340B Program The 340B statute was designed to provide upfront discounts so covered entities could immediately reinvest savings into patient care. Moving to a rebate-based model fundamentally alters this structure and shifts financial and operational risk away from manufacturers and onto safetynet providers. This approach contradicts the original intent of the program and places FQHCs in an untenable position. Conclusion The proposed 340B rebate model pilot would weaken the 340B program, increase administrative and financial burdens on FQHCs, and ultimately reduce access to care for vulnerable patients. Rather than experimenting with a model that jeopardizes safetynet providers, the agency should focus on policies that strengthen program integrity while preserving the upfront discount structure that allows covered entities to serve their communities effectively. I respectfully urge the agency to abandon the rebate model pilot and engage meaningfully with FQHCs and other covered entities to develop solutions that protect patients, preserve access, and uphold the intent of the 340B program. Thank you for the opportunity to comment.
HRSA-2026-0001-1558New Jersey Primary Care Association2026-04-16T04:00Z21,215 chars
Please see attached for the New Jersey Primary Care Association's comments. April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of New Jerseys 23 Community Health Centers (CHCs), one Look-Alike health center, their 130 sites, and the over 620,000 of patients they serve, the New Jersey Primary Care Association appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, the New Jersey Primary Care Association (NJPCA) strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Summary of Comments: In these comments, the NJPCA explains: A. The importance of 340B savings to New Jersey CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 620,771 patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in New Jersey, CHCs routinely rely on 340B savings to support services such as low-cost medications for uninsured and under- insured patients; clinical pharmacy services; community health worker services; case management and care coordination; nutrition services for chronic care patients, transportation services to patient appointments, etc. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by New Jerseys CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. 4 Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to those in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. 5 Given these pressures, it is not surprising that between 2025 and 2026, 5 centers in New Jersey have closed 10 service delivery sites in six counties. Centers have also reported laying off staff and reducing service lines due to these financial pressures. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. 6 This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data 7 available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs' financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nation's safety net. For further information, please contact Jules Baumann (jbaumann@nipca.org), Senior Program Coordinator, Workforce. Sincerely, Slini Hag Selina Haq, Ph.D President and CEO New Jersey Primary Care Association 8 9 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1559Morton Comprehensive Health Services, Inc2026-04-16T04:00Z5,137 chars
See attached file(s) MOP lc-ON COMPREHENSIVE HEALTH SERVICES April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (MIS-2026-03042) Dear Director Britton: On behalf of Morton Comprehensive Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for taking the time to listen to our concerns regarding the proposed rebate model. The 340B program is foundational to a Community Health Center's (CHC) ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Morton is a Federally Qualified Health Center. With a main clinic and six satellite locations, Morton is located in medically underserved areas defined by demographics. Morton offers preventive lifespan care including pre-natal and pediatric care; adult, and family primary care; oral health; optometry; x- ray/mammograms; labs; integrated behavioral health, substance abuse treatment and counseling; case management/care coordination; homeless family care; and a discounted pharmacy. Morton's transportation service offers free lift equipped rides to registered patients and a social service route to 29 community agencies. Morton is a Teaching Health Center, Joint Commission accredited, and a Primary Care Medical Home. We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As Congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. We have estimated that the loss of upfront savings will cost Morton over $250,000. That calculation is based only on the initial 10 medications subject to the maximum fair price (MFP) instituted by the Inflation Reduction Act (IRA). If more medications are added to the rebate model, our financial exposure will also increase. Additionally, the implementation of a rebate model adds a significant amount of administrative burden to our organization. Our mission is to provide high quality, affordable healthcare access and remove barriers to care. The implementation of a rebate model would place significant roadblocks for patients trying to access affordable medications, as well as divert critical financial resources we rely on to provide affordable access to care. 1334 North Lansing Avenue Tulsa, Oklahoma 74106 (918) 587-2171 Sincerely, 1 M. Susan Savage Chief Executive Officer M N COMPREHENSIVE HEALTH SERVICES Again, we strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, we utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients we serve. The administrative, fmancial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, we are national models of compliance. Cc: Michael Grunewald Director of Pharmacy 1334 North Lansing Avenue Tulsa, Oklahoma 74106 (918) 587-2171
HRSA-2026-0001-1560Indiana University Health2026-04-16T04:00Z30,167 chars
See attached file(s) April 16, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration Office of Pharmacy Affairs and 340B Program 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Drug Pricing Program Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: I. INTRODUCTION AND ORGANIZATIONAL STANDING Indiana University Health ("IU Health") respectfully submits these comments in response to the Health Resources and Services Administration's ("HRSA") February 2026 Request for Information ("RFI") regarding a proposed 340B Drug Pricing Program rebate model pilot program, Docket No. HRSA-2026-03042. These comments are submitted on behalf of IU Health by the undersigned 340B Program Director and reflect the organizations direct operational, financial, and patient-care interests as a participating covered entity under the 340B Program. IU Health is one of Indianas largest and most comprehensive health systems, including 7 covered entities and 60 contract pharmacy arrangements across the state. IU Healths 340B program serves as a critical mechanism enabling the organization to extend care to underserved and low-income patient populations throughout Indiana. IU Healths 340B program savings allow it to invest in charity care, community outreach programs, and expanded pharmacy services for uninsured and underinsured patients. The 340B Drug Pricing Program reduces IU Healths expenditures on outpatient drugs at 12 hospitals across the state of Indiana. The program lowers the costs experienced by these eligible locations, supporting IU Healths commitment to providing crucial access to care to Hoosiers. The IU Health locations that participate in the 340B program provide healthcare to patients who are covered by Medicaid or Medicare, reimbursement that fails to cover the cost of providing services. As the states largest provider of Medicaid services, the 340B Program is one of many contributing factors that supports IU Healths work in serving a Indianas Medicaid population. The 340B program also assisted IU Health in our efforts as a non-profit hospital to provide nearly $181 million in charity care, also known as financial assistance, in 2024, and in making critical medications more accessible and affordable to the patients we serve. The 340B program is one example of a program that subsidizes healthcare services that are operated at a financial loss. Those services include adult and pediatric pulmonary care, developmental pediatrics, HIV care, Riley Childrens Health Burn Program, transplant services, complex neurosurgery services, and trauma and pharmacy services. No single specific program or initiative is funded solely due to this program; rather, funds not spent on drugs are spent on a variety of programming and services that support IU Healths nonprofit mission of making Indiana one of the healthiest states in the nation. As discussed herein, IU Health respectfully urges HRSA to: (1) preserve the current upfront point-of-purchase discount model; (2) should any rebate framework proceed, HRSA should require a strictly independent administration free from manufacturer alignment; (3) correct the RFI's erroneous conflation of Maximum Fair Price ("MFP") deduplication with 340B duplicate discount prohibitions; and (4) calibrate any pilot program to avoid the administrative, financial, and patient-access harms quantified below. IU Health further submits that HRSAs statutory mandate under the 340B Program is to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384(II), at 12 (1992). Any consideration of a rebate model must give primacy to the needs of covered entities and the patients they serve, not balance those needs against the commercial interests of pharmaceutical manufacturers. The RFIs framing, which appears to weigh the interests of manufacturers and covered entities equally, rests on a flawed premise. HRSAs obligation runs to covered entities and their patients, and any program redesign must be evaluated first and foremost against that statutory purpose. IU Health notes that HRSAs current RFI contemplates a rebate model covering up to 25 drugs (10 subject to Medicare Part D negotiated prices under the Inflation Reduction Act (IRA) in 2026 and 15 additional drugs beginning in 2027). This represents a significant expansion from the 10-drug scope of HRSAs original 2025 rebate pilot. The inclusion of 15 additional drugs means more claims to submit, more rebates to track and reconcile, more working capital to float to drug companies while awaiting statutory discounts, more likely disputes over delays and denials, and therefore less financial capacity for IU Health to spend on patient care and comprehensive health services. The burden estimates throughout these comments reflect this expanded 25-drug scope. II. OPERATIONAL AND FINANCIAL BURDEN OF A REBATE MODEL A. Transition from Point-of-Purchase Discounts; Reliance Interests IU Health has invested substantial resources in building its 340B program infrastructure around the current upfront, point-of-purchase discount model. This infrastructure includes dedicated FTE pharmacy and compliance staff, proprietary systems for split-billing and eligibility management, and long-standing contractual arrangements with contract pharmacies calibrated to the upfront-discount model. Any transition to a WAC-then-rebate structure would require IU Health to fundamentally restructure these operations, at substantial cost and risk. B. Staffing and FTE Requirements A transition to a rebate model would require IU Health to hire or redeploy significant pharmacy, compliance, and revenue-cycle personnel to manage claim submission, validation tracking, rebate reconciliation, and denial appeals workflows. Based on our preliminary internal assessment, IU Health expects that a full rebate model would require significant incremental FTE dedicated to rebate administration and reconciliation, representing substantial new annual personnel costs. These costs are not offset by any efficiency gain under the proposed model; they represent a net new administrative burden imposed on IU Healths operations. IU Health specifically notes that HRSAs estimate of only five hours per week in additional administrative work to comply with a rebate program covering up to 25 drugs is a gross underestimate. For a health system of IU Healths scale (operating 12 340B hospitals, 7 covered entities, and 60 contract pharmacy arrangements), the work required to submit claims data across all payer types and all dispensing settings (including in-house pharmacies, contract pharmacies, and provider-based outpatient sites), reconcile rebate payments at the claim level, track and challenge denials, and coordinate with multiple third- party administrators and the rebate platform would far exceed five hours per week. IU Healths preliminary assessment indicates that rebate-related administrative tasks would require multiple dedicated full-time employees. HRSAs five-hour estimate appears to reflect neither the complexity of hospital billing systems nor the scope of a 25-drug rebate program that extends across all payers and all uses of the covered drugs. C. Cash Flow and Working Capital Impact Under the existing upfront discount model, IU Health realizes its 340B savings at the point of purchase, immediately reducing its drug acquisition cost. A transition to a WAC-then- rebate model would require IU Health to pay full Wholesale Acquisition Cost (WAC) at the time of purchase and then await reimbursement of the discount differential through a rebate process. For a health system of IU Healths scale, purchasing approximately $313.6 million in 340B-eligible drugs annually, this represents an estimated working capital burden of $180,942 to $542,827 at any given time, assuming average rebate payment cycles of 30 to 90 days. In addition to the working capital burden described above, a transition to a WAC-then- rebate model would jeopardize IU Healths ability to maintain prompt payment discounts from its drug wholesalers. IU Health currently receives prompt pay discounts when purchasing drugs through wholesalers. Under a rebate model, IU Health would need to pay the full WAC price before receiving rebates, reducing available cash flow and potentially forcing IU Health to forgo early payment discounts in order to preserve liquidity. The loss of these prompt pay discounts would represent a direct, quantifiable increase in IU Healths overall annual drug expenditures, a cost that is entirely attributable to the rebate model and that would not exist under the current upfront discount structure. IU Health further notes that HRSA has previously credited drug companies assertion that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This assertion does not reflect IU Healths actual purchasing and payment cycles. IU Healths wholesaler payment terms and the timing of drug dispensing do not align with a scenario in which rebates would consistently arrive before WAC invoices are due. For drugs maintained in inventory before dispensing, which may take weeks or months, IU Health would be required to pay the WAC invoice well before any rebate claim could even be submitted, let alone paid. HRSA should not rely on manufacturer representations about payment timing that do not reflect the operational realities of hospital drug procurement. D. Technology and Reporting Requirements A rebate model would require IU Health to implement or procure new technology systems capable of submitting claims data in HRSA-specified formats, tracking rebate submissions and responses, maintaining claim level audit trails for dispute resolution, and integrating with the rebate administrator's platform. IU Health anticipates significant incremental system build or vendor engagement costs for initial implementation, plus ongoing annual licensing and maintenance costs. These technology costs do not include the indirect staff time required for system implementation, staff training, and ongoing reconciliation support. IU Health is particularly concerned about the difficulty of providing medical claims data for physician-administered drugs under a rebate model. Unlike pharmacy claims, which flow through established electronic data interchange systems, medical claims for physician-administered drugs are maintained separately within IU Healths electronic health record (EHR) system. IU Healths third-party administrators do not have direct data feeds into the EHR, meaning that extracting and formatting medical claims data for rebate submission would require significant manual work, custom data interfaces, and ongoing reconciliation. Standard hospital billing operations do not allow for immediate submission of this data: medical claims for physician-administered drugs may not be available for weeks or longer after the drug is administered to a patient, due to how hospital bills are created in accordance with applicable billing rules. This inherent delay means that even a 10-day rebate payment window would not prevent significant float periods, because the clock cannot start until the claim data is prepared and submitted. HRSAs assumption that hospitals are already providing this data to third-party administrators is incorrect for medical claims, which represent a substantial portion of 340B-eligible drug utilization in hospital outpatient settings. E. Risk of Manufacturer Rebate Denials IU Health is deeply concerned that a rebate model, particularly one administered through or in reference to manufacturer-aligned platforms, creates a structural risk of arbitrary or pretextual rebate denials. Unlike the current model, where IU Health's statutory right to the ceiling price is realized at purchase, a rebate model interposes a validation and payment process during which a manufacturer (or a manufacturer-aligned administrator) may deny or delay rebate payments based on proprietary 'policies' or interpretations that are not anchored in HRSA-approved standards. IU Health strongly urges HRSA to: (a) prohibit manufacturers from having any discretion to deny rebates for otherwise eligible 340B claims based on their own unilateral policies; and (b) ensure that all disputes regarding denied or delayed rebates that result in a net price above the ceiling are routed through the statutory Administrative Dispute Resolution ("ADR") pathway under 42 C.F.R. Part 10. Moreover, IU Health urges HRSA to go further and prohibit manufacturers from denying any rebates for 340B hospitals entirely. Under a rebate model, manufacturers would receive the claims data they assert they need for program integrity purposes and would retain their existing statutory right to audit covered entities. Given these safeguards, there is no justification for permitting manufacturers to deny individual rebate claims, a process that would impose significant additional administrative burden on safety-net providers who must then dedicate resources to challenging denials and interfacing with manufacturer- aligned vendors. If HRSA nonetheless permits any denials, it must at minimum require manufacturers to provide specific, claim-level explanations sufficient for the covered entity to evaluate and contest the denial, and must ensure that all denied claims are subject to the ADR process. III. CORRECTION OF THE RFI'S ERRONEOUS MFP/DUPLICATE DISCOUNT CONFLATION IU Health calls HRSA's attention to a significant legal error in the RFI's framing. The RFI characterizes Maximum Fair Price ("MFP") deduplication issues as a 'duplicate discount' concern within the meaning of the 340B statute. This characterization is legally incorrect and, if embedded in any resulting program design, risks significant harm to covered entities. The 340B statute's duplicate discount prohibition is Medicaid-specific: it prohibits manufacturers from being required to provide both a 340B price reduction and a Medicaid Drug Rebate Program (MDRP) rebate for the same drug under 42 U.S.C. 256b. This provision is anchored to MDRP rebates and implemented through HRSA's Medicaid Exclusion File (MEF) mechanism. It does not extend to Medicare or commercial claims. MFP nonduplication, by contrast, is a wholly separate legal construct governed by 42 U.S.C. 1320f-2(d), enacted as part of the Medicare Drug Price Negotiation Program. Under that provision, a manufacturer is not required to provide both the MFP and the 340B ceiling price on the same claim when the 340B price is lower; conversely, when the MFP is lower, the manufacturer must provide the MFP at the ceiling price in a 'nonduplicated amount.' This is a distinct Medicare-negotiation rule with different triggers, different statutory authority, and different compliance mechanics than the 340B Medicaid duplicate discount prohibition. Critically, there is no 340B statutory prohibition on a covered entity receiving both a 340B discount and the MFP on the same claim. The obligation to provide the MFP runs solely to the manufacturers, not to covered entities. Any program design that treats MFP deduplication as a 340B duplicate discount issue, or that imposes additional compliance obligations on covered entities to prevent both benefits from flowing to the same claim, would be both legally unfounded and operationally harmful. IU Health respectfully urges HRSA to correct this mischaracterization in any future guidance, rulemaking, or program documentation, and to maintain a strict distinction between Medicaid-based duplicate discount compliance (via the MEF) and MFP nonduplication obligations, which run to manufacturers under a different statutory framework. IV. REQUIREMENT FOR INDEPENDENT ADMINISTRATION If HRSA proceeds with any form of rebate model, IU Health submits that independent administration (meaning administration by an entity wholly free from manufacturer alignment, financial relationships with manufacturers, and manufacturer policy obligations) is not merely preferable but legally and operationally necessary to satisfy both the statutory ceiling-price mandate and the Administrative Procedures Acts requirement of a reasoned, non-arbitrary administrative design. A. The Conflict of Interest Problem with Manufacturer-Aligned Platforms IU Health is aware that existing commercial platforms, most notably the 340B ESP platform operated by Second Sight (and its associated Beacon rebate-model product), have been positioned as potential rebate administrators. IU Health has serious legal and structural concerns about the use of any such platform in a HRSA-sanctioned rebate model. The public Terms of Use for 340B ESP expressly state that the platform enables analysis of covered entity claims data for pharmaceutical manufacturers to identify ineligible rebates and evaluate compliance with 'Participating Pharmaceutical Manufacturers' policies.' The platform is explicitly designed to serve manufacturer compliance and financial interests, not to serve as a neutral administrator of covered entities' statutory right to the ceiling price. IU Healths direct experience with submitting claims data through 340B ESP for contract pharmacy arrangements confirms these structural concerns. IU Health has encountered significant administrative burdens including: working with multiple third-party administrators to acquire and submit claims data; manual review and editing of claims to ensure eligibility; responding to inaccurate or vague error messages from 340B ESP that provide insufficient information at the pharmacy, account, or NDC level; untimely responses from 340B ESP support requiring multiple follow-up calls; continually verifying that pricing has been restored for hundreds of NDCs across multiple contract pharmacy accounts for each manufacturer; managing the 45-day lookback window for purchases and claims submission; and pricing being dropped for NDCs and contract pharmacies without explanation, requiring follow-up with TPAs, wholesalers, and 340B ESP and pursuit of refunds via the credit/rebill process. A rebate model would dramatically expand these burdens beyond contract pharmacy arrangements to include drug dispenses from in-house pharmacies and drugs administered to patients in the parent hospital and provider-based outpatient sites. Under such a model, manufacturer policies (which vary across manufacturers, may change unilaterally, and are not anchored in HRSA-approved standards) would become embedded eligibility criteria affecting whether and when IU Health receives the statutory ceiling price. This is not independent administration; it is the operationalization of manufacturer- specific constraints as gatekeeping mechanisms to statutory price relief. Such a design would create at minimum three structural conflicts of interest: A data conflict: IU Health would be required to submit detailed claims and utilization data to an administrator whose terms contemplate disclosure of that data to manufacturers and payers for purposes beyond rebate payment. A rulemaking conflict: eligibility determinations would incorporate manufacturer 'policies' external to HRSA regulations, introducing non-uniform and unpredictable rules that raise serious fairness and due-process concerns. A cash-flow conflict: under a WAC-then-rebate model, delays or denials based on manufacturer platform determinations impose immediate working-capital costs on IU Health while the organization awaits resolution which is a burden courts have already recognized as material. A-1. Operational Experience with the Beacon Platform IU Healths concerns about manufacturer-aligned platforms are not theoretical. During the brief preparation period before HRSAs original rebate pilot, IU Health encountered serious operational problems with Second Sight Solutions Beacon IT platform. These included shifting and inconsistent data submission requirements, problematic Terms and Conditions that raised significant data privacy and security concerns, and inadequate customer service when issues arose. IU Health received confusing and contradictory information from the platform vendor regarding required data fields, particularly for medical claims, and these issues remained unresolved when HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to define the data fields and operational requirements for rebate submission through platforms like Beacon, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. IU Health recommends that HRSA require any rebate program to include appropriate guardrails to mitigate privacy and security concerns related to patient information and data submission, including requirements for Business Associate Agreements and strict data use limitations in any third-party vendor agreements. B. Required Safeguards for Any Administrator IU Health respectfully submits that HRSA should, at minimum, require any rebate model administrator to satisfy the following independence and governance standards: Independence: The administrator must be structurally independent of all pharmaceutical manufacturers, with no manufacturer equity control, board control, or control rights; no manufacturer-paid fees for validation or eligibility functions; and no contractual obligation to operationalize manufacturer policies. Rule Governance: Eligibility determinations must be made solely under uniform, HRSA-approved standards, not manufacturer policies, platform logic, or unilateral manufacturer conditions. Data Use Limitation: Covered entity claims data submitted for rebate validation must be used solely for that purpose and must not be disclosed to manufacturers, payers, or other third parties except as strictly necessary to transmit a validated rebate request and receive payment. IU Health further urges HRSA to explicitly prohibit manufacturers from using covered entity claims data submitted through any rebate program for commercial purposes. IU Health is aware that pharmaceutical companies seek covered entity claims data not only for 340B program integrity purposes but also to avoid paying commercial rebates to pharmacy benefit managers (PBMs) under voluntary agreements that secure favorable formulary treatment for their products. This commercial purpose has nothing to do with 340B program integrity, and covered entities should not be forced to bear the costs of data submission and purchasing drugs at WAC prices in order to assist manufacturers in policing their own commercial agreements. At a minimum, HRSA must require that any rebate claims data submitted by covered entities may not be used by manufacturers or their vendors for any purpose other than processing and paying the rebate. Service-Level Commitments: The administrator must be subject to binding processing timelines, claim level denial explanations tied to HRSA-approved standards, and a 'deemed validation' concept under which a failure to timely respond results in automatic validation. Dispute Resolution Alignment: Any dispute concerning a denied or delayed rebate that results in a net price above the ceiling must be resolvable through the 340B ADR process under 42 C.F.R. Part 10, not through a manufacturer-controlled appeals mechanism. Auditability: The administrator must maintain tamper-evident, claim level records sufficient for HRSA audit and for IU Health to support ADR claims, and must retain such records for a minimum of six years. V. PROPOSED ALTERNATIVES AND IMPLEMENTATION CONSIDERATIONS Consistent with the APA's requirement that agencies consider reasonable alternatives when changing regulatory course, and consistent with HRSA's own request for alternative approaches in the RFI, IU Health proposes the following: A. Enhance Existing Technology-Based Data Validation A traditional rebate model is not necessary to address HRSA's stated data validation and program integrity objectives. Existing and emerging technology enabled approaches including enhanced split-billing platforms, standardized claim level data reporting, and HRSA-administered data matching could support robust compliance validation without forcing covered entities into the cash-flow, administrative, and conflict of interest risks of a WAC-then-rebate structure. IU Health urges HRSA to invest in extending and improving existing mechanisms, particularly the Medicaid Exclusion File, before redesigning the commercial 340B transaction model. In particular, IU Health urges HRSA to consider the model successfully implemented by Oregon Medicaid for preventing Medicaid duplicate discounts. Under Oregons approach, covered entities retrospectively submit limited 340B claims data to the states rebate contractor, which then excludes 340B claims from Medicaid rebate requests to manufacturers. This process achieves the deduplication objective without requiring covered entities to purchase drugs at WAC or submit comprehensive claims data through a manufacturer-controlled rebate platform. A similar retrospective data-matching process could be implemented at the federal level through CMSs Medicare Transaction Facilitator (MTF) to address nonduplication under the Inflation Reduction Act. Compared to a 340B rebate model, these alternatives would more efficiently promote integrity in 340B and consistency with the IRAs nonduplication provision, and would be far less disruptive for 340B providers. Additionally, IU Health supports the position advanced by the American Hospital Association that a neutral, third-party clearinghouse, rather than a rebate mechanism, represents a viable, lawful, and significantly less burdensome alternative to advance 340B Medicare Drug Price Negotiation Program deduplication and program integrity. Such a clearinghouse could facilitate data matching and compliance verification without imposing the cash-flow burden, administrative complexity, and manufacturer-aligned gatekeeping risks inherent in a WAC-then-rebate structure. IU Health respectfully submits that HRSA must, at minimum, provide a reasoned explanation for why a third-party clearinghouse is neither viable nor less costly than a rebate mechanism before proceeding with any rebate model. B. If a Rebate Pilot Proceeds, Limit Scope and Build In Safeguards Should HRSA determine that a limited rebate pilot is warranted, IU Health urges the agency to: (i) limit the pilot to a narrow, voluntary subset of covered entities, drug classes, and manufacturer agreements; (ii) require a neutral, HRSA-procured administrator with the independence standards described in Section IV above; (iii) establish a minimum 18-month implementation runway after final program design to allow covered entities to develop necessary systems and workflows; (iv) provide a robust evaluation period before any mandatory broader rollout; and (v) establish a clear ADR pathway for any pilot participant whose net price exceeds the ceiling during the pilot period. C. Timing IU Health notes that even an optimistic implementation timeline for a rebate model could not realistically be achieved before early 2027 and that timeline assumes rapid, well- resourced program design and implementation. Rushing implementation before an adequate administrative record is developed, before independent governance structures are established, and before covered entities have had a reasonable opportunity to build operational capacity would recapitulate the precise deficiencies that led to the injunction in AHA v. Kennedy. VI. CONCLUSION IU Health respectfully urges HRSA to carefully weigh the legal, operational, financial, and patient-access concerns documented in these comments before proceeding with any rebate model implementation. The 340B Program is a critical safety-net mechanism for IU Health's patients. The statutory ceiling-price guarantee must remain meaningful, predictable, and accessible to covered entities without the imposition of the administrative complexity, cash-flow burden, and manufacturer aligned gatekeeping that a poorly designed rebate model would create. Should HRSA nonetheless choose to move forward with developing a rebate program, IU Health submits that HRSA must provide covered entities with an additional opportunity to comment on the specific features and requirements of the final program design. The current RFI process, while appreciated, requires covered entities to estimate costs and burdens without precise knowledge of which drugs will ultimately be included, what data fields will be required, what grounds for denial will be permitted, what dispute resolution processes will be available, and numerous other critical operational details. A failure to permit additional public comment on the specific program design would constitute a failure to consider important aspects of the problem, in contravention of the APAs requirements as articulated in State Farm and as underscored by the courts ruling in AHA v. Kennedy. IU Health is committed to engaging constructively in this process and welcomes the opportunity to provide additional information or participate in any further stakeholder engagement HRSA may convene. Should HRSA have questions regarding any aspect of these comments, please contact the undersigned. Respectfully submitted, Aaron Lee, PharmD, MBA, 340B ACE 340B Pharmacy Director Indiana University Health 390 Airtech Parkway, Suite 106A Plainfield, Indiana 46168 Email: alee15@iuhealth.org
HRSA-2026-0001-1561AHS Family Health Center2026-04-16T04:00Z42,440 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Asian Human Services Family Health Center, Inc dba., AHS Family Health Center (AHSFHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of AHSFHC through its contract pharmacy arrangement projecting an annual loss of $1,129,605 in FY2026. This represents 46.5% reduction compared with FY2025 in 340B savings. for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. AHS Family Health Center (AHSFHC) is a Federally Qualified Health Center (FQHC) and 340B covered entity serving medically underserved patients in Illinois. Our 340B ID is CH051827. AHSFHC relies on the 340B program to stretch limited resources and support access to affordable medications for vulnerable patients. AHSFHC does not operate an entity-owned retail pharmacy and depends heavily on contract pharmacy arrangements with Walgreens and CVS/Well Partner. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 6301 N. Western Ave. Chicago, IL 60659 2501 W. Peterson Ave. Chicago, IL 60659 8800 N. Lockwood Ave. Skokie, IL 60077 8321 W. Golf Road. Niles, IL 60714 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For AHS Family Health Center in particular, this means it will impact: Number of 340B 18,000 Transactions/ with 16,000 patients CHC served. Current admin costs for your 340B program $958,000 Any excess 340B revenue is reinvested to reduce cost barriers, expand services, and improve care access for underserved patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: According to our HRSA 2025 UDS report, AHSFHC provided Sliding Fee Discount equivalent to $867,223 for our uninsured and underinsured patients. Our uninsured rate is 34% which is significantly higher than State and National Average in the FQHC setting. Under the rebate model our cash flow will be affected significantly and will make it difficult to serve uninsured patients that are facing hardships in our community. Staffing Impact: Additional FTEs are needed to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model AHSFHC anticipates needing an additional 2 FTE because of Rebate Model. External Vendor Costs: Given increased complexity, AHSFHC anticipates an increase of $120,000 annually to account for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, inventory management and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Additionally, 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. AHSFHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes 7 Internal NACHC assessment (99 responses). 8 Ibid. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 16,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $55,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with two corporate contract pharmacies with multiple locations as well as multiple vendors to manage our 340B contract pharmacy program, to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all entities and different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Cook County/Chicago with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. AHSFHC participates in the 340B Drug Pricing Program to make medications more affordable for our patients. We use these savings to reduce out-of-pocket costs, provide discounted or free medications to eligible patients, and support access for uninsured and underinsured individuals. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Even for our small size FQHC we estimate it would cost an extra over $100,000/monthly to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, AHSFHC anticipates needing to reduce essential services, hours, staffing and financial assistance to patients to offset 340B costs. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. AHSFHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, AHSFHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $100,000. This cost could go up as more drugs are added to 340B program. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $6,000 annual funds that are currently dedicated to our organization offering National Diabetes Prevention Program, hiring additional medical assistants, Care Coordinators' and Patient Care Assistants and other support services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on AHSFHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays AHSFHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $42,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion AHSFHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. AHS Family Health Center (AHSFHC) believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. AHSFHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at: mparacha@ahsfhc.org or call at 773-761- 0010. Sincerely, Muhammad W. Paracha M.D., MPH. Chief Executive Officer Telephone: 773.761.0300 Fax: 773.761.0009 Website: www.ahsfhc.org
HRSA-2026-0001-1562Citizens Against Government Waste2026-04-16T04:00Z6,673 chars
See attached comments. Before the Health Resources Administration Washington, D.C. In the Matter of Health Resources and Services Administration Request for Information Regarding 340B Drug Pricing Program Rebate Model Docket No. HRSA 2026 0001 0001 Comments of Thomas A. Schatz President Citizens Against Government Waste April 16, 2026 Citizens Against Government Waste (CAGW) is a private, nonprofit, nonpartisan organization dedicated to educating the American public about waste, fraud, abuse, mismanagement, and inefficiency in government. On behalf of the more than one million members and supporters of CAGW, I offer the following comments regarding the Health Resources and Services Administrations (HRSA) request for information regarding a 340B Rebate Model Pilot Program. Federal healthcare programs are often well-intentioned but end up costing more than expected and become prone to waste, fraud, abuse, and mismanagement. One of the worst examples of this scourge is the 340B Drug Discount Program, which is administered by HRSA. CAGW and its lobbying arm, the Council for Citizens Against Government Waste (CCAGW) have long been concerned about the misuse and abuse of the 340B program.1 To reform the program and restore its intended purposes, Congress should establish a clear definition of an eligible patient as an uninsured, low-income individual who does not qualify for Medicare or Medicaid; provide better verification of patient eligibility when a prescription is filled; establish a clear relationship between the patient and covered entities (CEs), verifying that services were provided within the past 12 months; eliminate duplicate 1 Council for Citizens Against Government Waste, 340B Drug Discount Program, https://www.ccagw.org/340B. discounts with improved oversight; revising reporting requirements; and increasing transparency to make it clear how hospitals are using 340B funds.2 Since its creation in 1992, the 340B program has expanded exponentially. Annual purchases went from $2.5 billion in 2005 to $81.4 billion in 2024.3 Yet there is no system in place to ensure that 340B savings are used for patient care. A September 2025 Schaefer Center at the University of Southern California report noted that because CEs do not have restrictions on how they use 340B revenue, they can use these funds on a wide range of purposes, from subsidizing uncompensated care to investing in infrastructure.4 The report also noted that due to the lack of transparency around how 340B revenues are spent, it is difficult to estimate how much of the 340B discounts are passed on to patients.5 An April 2025 Senate Health Education Labor and Pensions Committee Majority Staff report for Chairman Bill Cassidy (R-La.) provided further proof of a lack of transparency and accountability for 340B expenditures.6 A 340B Rebate Model Pilot Program would provide flexibility without burdensome oversight and give manufacturers the opportunity to select drugs on the Medicare Drug Price Negotiation list to provide post-sale rebates to 340B CEs. The discounts would be determined by reimbursing the difference between the acquisition cost and the 340B ceiling price based on claims-level data. The CEs must submit claims data within 45 days of drug dispensation, rebates must be issued within 10 days unless there is a documented reason for a denial, and disputes must follow the current HRSA process. The pilot program would also eliminate duplicate discounts by preventing manufacturers from offering Medicaid and 340B discounts on the same drug; increase the transparency of transactions and rebate timelines and provide a better audit trail through claims-based tracking. Privacy is protected through HIPAA compliance, secure transmission of information, and a prohibition against the use of personally identifying information. Patient access would be preserved, and the cost would be paid by manufacturers. If the initial test is successful, the model should be expanded to all 340B-eligible drugs, through a unified claims portal or certified and secure platforms. CEs should be required to report how 340B funds are being used and manufacturers should be required to provide timely payment of valid rebates and subject to investigation for invalid denial of payments. The Centers 2 Christina Smith and Thomas Schatz, The 340B Drug Discount Pricing Program Needs a New Prescription, Citizens Against Government Waste, March 2024, https://www.cagw.org/sites/default/files/pdf/The-340B-Drug- Pricing-Program-Needs-a-New-Prescription.pdf. 3 Health Resources and Services Administration, 2024 340B Covered Entity Purchases, https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases. 4 Ryan Long, Karen Mulligan, Melissa A. Frasco, Erin Trish, and Michael Chernew, Cui Bono? Misaligned Incentives in the 340B Program, USC Leonard D. Schaefer Institute for Public Policy & Government Service, September 2025, https://schaeffer.usc.edu/research/misaligned-incentives-340b/. 5 Ibid. 6 Senate Health, Education, Labor and Pensions Committee Majority Staff, Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program, April 2025, https://www.help.senate.gov/final-340b-majority-staff- reportpdf. for Medicare and Medicaid Services and its Office of Inspector General should work with HRSA to provide performance metrics and report on the pilot programs result prior to a notice of proposed rulemaking. Stakeholders may argue that a rebate model is burdensome or that they are using 340B funds as intended by Congress and therefore no reforms are needed. But the evidence of abuse of the program and the growth that has made it the second largest prescription drug program in the federal government belie claims that nothing needs to be done. The required data is already standardized in pharmacy billing systems; therefore, rebates would be payable within 10 days, and manufacturers, not the government, would pay for the IT systems needed for the model. A 340B Rebate Model Pilot Program would be a positive step in the effort to reform a program that is failing to provide the intended benefits and has grown out of control. The model would increase transparency, move the program closer to its statutory intent, and reduce the abuse, uncertainty, and waste currently plaguing the 340B program. CAGW supports the implementation of a pilot program. But the most effective way to reform 340B if for Congress to enact legislation.
HRSA-2026-0001-1563Chase Brexton Health Care2026-04-16T04:00Z8,925 chars
See attached file(s) Mt. Vernon Center 1111 North Charles Street Baltimore, MD 21201 410.837.2050 chasebrexton.org To provide compassionate, high-quality, and integrated health care that respects the unique needs of each patient and advances wellness in the communities we serve. Respect Compassion Patient-Focused Care Innovation April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chase Brexton Health Care, we appreciate the opportunity to provide input on the proposed 340B Rebate Model Pilot Program. The 340B program is foundational to our ability to serve vulnerable populations and sustain access to comprehensive care. For decades, it has enabled safety- net providers to stretch scarce federal resources and ensure access to life-sustaining medications for low-income, uninsured, and medically complex patients. However, the proposed shift from upfront discounts to retrospective rebates introduces significant financial, operational, and patient care risks that threaten the stability of safety-net providers. We strongly urge HRSA to exempt Community Health Centers (CHCs) from participation in the rebate model. Organizational Impact Chase Brexton Health Care processes approximately 343,994 340B transactions annually across 52,105 patients and currently incurs approximately $11.2 million in 340B administrative program costs. These savings are reinvested directly into patient care, supporting integrated adult and pediatric primary care, behavioral health and substance use, dental services, HIV and Hep C services, OB/GYN, and Mt. Vernon Center 1111 North Charles Street Baltimore, MD 21201 410.837.2050 chasebrexton.org To provide compassionate, high-quality, and integrated health care that respects the unique needs of each patient and advances wellness in the communities we serve. Respect Compassion Patient-Focused Care Innovation clinical pharmacy programs such as medication therapy management and chronic disease management. In addition, 340B resources fund essential wraparound servicesincluding social work, referral coordination, outreach, translation, telehealth, prescription delivery, and extended clinic hoursthat improve access and health outcomes. This reinvestment model is central to the CHC mission and directly links pharmacy operations to population health improvement. Through its sliding fee scale, Chase Brexton is able to provide medications at significantly reduced costor, for the most vulnerable patients, at no costat the point of sale. This real-time affordability is critical to maintaining adherence and ensuring continuity of care. Patient Impact At Chase Brexton, real-time discounted pricing is essential to maintaining adherence for patients managing chronic conditions such as HIV, diabetes, and behavioral health disorders. The rebate model eliminates upfront affordability and introduces uncertainty at the point of dispensing, potentially resulting in higher out-of-pocket costs, therapy delays, or forced therapeutic substitutions. These disruptions create measurable clinical risks, including medication nonadherence, disease progression, and avoidable hospitalizations. For example, interruptions in anticoagulant therapy significantly increase the risk of stroke and mortality, while discontinuation of SGLT2 inhibitors is associated with increased cardiovascular events and hospitalizations. In behavioral health, disruption of antipsychotic therapy can lead to relapse, crisis-level care, and significant deterioration in patient stability. Chase Brexton currently operationalizes sliding fee pricing at the point of dispensing, ensuring immediate affordability and reducing barriers to care. A rebate model removes this capability, threatening one of the most critical mechanisms for supporting adherence in vulnerable populations. Operational and Administrative Burden The rebate model introduces duplicative and complex administrative requirements layered on top of existing manufacturer restrictions and reporting obligations. CHCs will be required to manage varying Mt. Vernon Center 1111 North Charles Street Baltimore, MD 21201 410.837.2050 chasebrexton.org To provide compassionate, high-quality, and integrated health care that respects the unique needs of each patient and advances wellness in the communities we serve. Respect Compassion Patient-Focused Care Innovation manufacturer requirements, submit claim-level data, reconcile rebate payments, and resolve disputes across multiple systems with limited standardization. Chase Brexton estimates the need for 12 additional full-time equivalents across pharmacy, compliance, finance, and information technology, with an associated annual cost of approximately $150,000 to $250,000. These administrative demands divert critical clinical resources away from direct patient care. Every hour spent on rebate administration is an hour not spent on medication counseling, adherence support, and care coordination. In-House Pharmacy and IT Complexity For CHCs operating in-house pharmacies, the rebate model requires significant system redesign and integration between electronic health records, pharmacy management systems, and external rebate platforms. These changes include implementing dual pricing logic, validating eligibility at the claim level, reconciling wholesale acquisition costs with expected 340B pricing, and ensuring audit-ready documentation. Chase Brexton anticipates at least $50,000 in one-time system modification costs to support these requirements, along with ongoing maintenance and vendor-related expenses. These changes introduce increased risk of data mismatches, delayed reimbursement, and compliance exposure. Financial Risk and Cash Flow The requirement to purchase medications at Wholesale Acquisition Cost (WAC) creates significant cash flow constraints for CHCs. Under the proposed model, Chase Brexton would be required to front the full cost of medications while waiting for rebates that may be delayed, reduced, or denied. Total projected increased costsincluding labor, IT infrastructure, and carrying costsare estimated at approximately $4 million annually. This level of financial exposure is unsustainable and introduces significant volatility into operations. Such financial pressure may force difficult tradeoffs, including reducing services, limiting medication access, or scaling back programs that support vulnerable populations. Mt. Vernon Center 1111 North Charles Street Baltimore, MD 21201 410.837.2050 chasebrexton.org To provide compassionate, high-quality, and integrated health care that respects the unique needs of each patient and advances wellness in the communities we serve. Respect Compassion Patient-Focused Care Innovation Sliding Fee Scale and Compliance Risk Chase Brexton provided over $11.2 million in sliding fee discounts across medications and services, consistent with federal requirements to ensure affordability for patients at or below 200% of the federal poverty level. Current pharmacy systems rely on real-time 340B pricing to calculate patient discounts. Under a rebate model, this functionality is no longer operationally feasible, as pricing is based on WAC at the point of purchase. This creates a compliance risk and undermines the ability of CHCs to meet statutory sliding fee obligations. Conclusion The proposed 340B Rebate Model Pilot represents a fundamental shift away from the intent of the 340B program. Rather than strengthening oversight, it transfers financial risk, administrative burden, and operational complexity to the safety-net providers the program was designed to support. We respectfully urge HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program and instead pursue solutions that preserve point-of-sale affordability, minimize administrative burden, and uphold the statutory intent of the 340B programto stretch scarce resources and expand access to care for those who need it most. Thank you for your consideration of these comments. If you have any questions, I can be reached at (410) 837-2050 or via jcywinski@chasebrexton.org. Sincerely, Jeff Cywinski, Director of Pharmacy Chase Brexton Health Care Mt. Vernon Center 1111 North Charles Street Baltimore, MD 21201 410.837.2050 chasebrexton.org To provide compassionate, high-quality, and integrated health care that respects the unique needs of each patient and advances wellness in the communities we serve. Respect Compassion Patient-Focused Care Innovation
HRSA-2026-0001-1564Alison Mills · Mount Vernon, OH, United States2026-04-16T04:00Z27,221 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Knox Community Hospital, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Knox Community Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Knox Community Hospital in Mount Vernon, Ohio has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Knox Community Hospital in Mount Vernon, Ohio has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and 2 denials, and therefore less money that Knox Community Hospital in Mount Vernon, Ohio can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Knox Community Hospital in Mount Vernon, Ohio to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Knox Community Hospital in Mount Vernon, Ohio understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In order to implement a Rebate Program as outlined by HRSA, we would need to add two full-time employees (FTE) to our 340B program. That is 80 additional hours of labor a week when our facility is under a hiring freeze due to increased operational costs and lower insurance reimbursements. The additional staff would be needed to submit data and investigate and challenge denials. Our experience with the MFP Rebate Model indicates Knox Community Hospital will need to devote a great deal of time navigating erroneous denial. In addition to hiring staff for the 340B program, existing Information Systems employees would be diverted from their existing projects to ensure we can provide the extensive data required by the drug manufacturers. This puts our ability to function at a larger scale in jeopardy, as hospitals increasingly rely on technology to maintain patient safety and services. Our facility sees an average of 3 million dollars of 340B savings, most of which goes towards keeping us operational. The additional staffing would shrink that savings even further. Staffing Impacts Under a Potential 340B Rebate Program. Knox Community Hospital in Mount Vernon, Ohio does not currently have the staff needed to comply with a Rebate Program. As previously stated, Knox Community Hospital would need to hire an additional 2 full-time employees to meet the demands of a Rebate pilot Program. This is because HRSAs estimate of 5 hours per week needed to navigate said program is ludicrously low 3 for the suggested 25 total drugs. This program will require extensive monitoring which we cannot do with our current staff of one full-time 340B employee. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Knox Community Hospital, Mount Vernon, Ohio has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Knox Community Hospital does not currently have a way to gather all the claim information required by the Rebate Pilot Program in an ordered and efficient manner, particularly when it comes to medical claims. Our operating systems do not exist in such harmony, and as such, any information submitted would be the result of manually combing through each claim for payer information and claim line details. In order to create a system by which we could compile this information, our Information Services department would have to divert an employee, potentially for several months and then ongoing depending on how the program goes. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. These data requirements are much more extensive than what has been required for 340B ESP up until recently, particularly since as a Covered Entity with entity-owned pharmacies, our submission opportunities to maintain contract pharmacy pricing has been minimal. Our program currently sends data to our third party administrator (TPA), from which we run reports monthly to perform audits. We collect a random 10% of all retail and medical claims and evaluate each one for patient eligibility, payer eligibility, and provider documentation to support 340B eligibility. We go to great lengths to ensure that our system is compliant with the 340B program guidelines so that we may continue to utilize 340B saving to provide benefit to our patients. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Knox Community Hospital, Mount Vernon, Ohio to effectively provide drug companies interest-free loans as we 4 await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. In the past, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. Our wholesaler invoices must be paid every 14 days and while, technically, if the rebates were paid within the 10 days estimated by HRSA we would get paid before that deadline, this does not account for any denials and challenges. We pay around 1.5 million dollars for medications a month. Even with the current upfront 340B discounts, we struggle pay these costs in addition to the other costs of running a hospital. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Knox Community Hospital, Mount Vernon, Ohio will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. With these additional costs, our facility may have to delay or cancel capital improvements. Over the last few years, we have had to close our Allergy Clinic and Home Health Department due to cash flow and viability, and that is with 340B savings. We would not be able to offer the same amount of patient assistance as we currently do, and we would not be able to grow our patients access to affordable medications. Any patient assistance copay options funded by 340B savings we have planned are off the table, as we would be unable to offer discounts on medications for which we do not know if we will be paid. Our facility would not be able to attract and maintain specialist that benefit our rural community, meaning patients would have to travel up to an hour to find comparable services. Many of our patients struggle with transportation costs, and this would only make it harder for them to receive care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to 5 provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Knox Community Hospital, Mount Vernon, Ohio reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Knox Community has had several issues with the Beacon platform, including slow response to inquiries, issue configuring data files for upload, and conflicting information. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Knox Community Hospital, Mount Vernon, Ohio, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Knox Community Hospital, Mount Vernon, Ohio respectfully submits that the costs of any Rebate Program will outweigh any expected 6 benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Knox Community Hospital, Mount Vernon, Ohio and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alison Mills 340B Coordinator Knox Community Hospital, Mount Vernon, Ohio The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Knox Community Hospital, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Knox Community Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Knox Community Hospital in Mount Vernon, Ohio has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Knox Community Hospital in Mount Vernon, Ohio has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Knox Community Hospital in Mount Vernon, Ohio can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Knox Community Hospital in Mount Vernon, Ohio to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Knox Community Hospital in Mount Vernon, Ohio understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In order to implement a Rebate Program as outlined by HRSA, we would need to add two full-time employees (FTE) to our 340B program. That is 80 additional hours of labor a week when our facility is under a hiring freeze due to increased operational costs and lower insurance reimbursements. The additional staff would be needed to submit data and investigate and challenge denials. Our experience with the MFP Rebate Model indicates Knox Community Hospital will need to devote a great deal of time navigating erroneous denial. In addition to hiring staff for the 340B program, existing Information Systems employees would be diverted from their existing projects to ensure we can provide the extensive data required by the drug manufacturers. This puts our ability to function at a larger scale in jeopardy, as hospitals increasingly rely on technology to maintain patient safety and services. Our facility sees an average of 3 million dollars of 340B savings, most of which goes towards keeping us operational. The additional staffing would shrink that savings even further. Staffing Impacts Under a Potential 340B Rebate Program. Knox Community Hospital in Mount Vernon, Ohio does not currently have the staff needed to comply with a Rebate Program. As previously stated, Knox Community Hospital would need to hire an additional 2 full-time employees to meet the demands of a Rebate pilot Program. This is because HRSAs estimate of 5 hours per week needed to navigate said program is ludicrously low for the suggested 25 total drugs. This program will require extensive monitoring which we cannot do with our current staff of one full-time 340B employee. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Knox Community Hospital, Mount Vernon, Ohio has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Knox Community Hospital does not currently have a way to gather all the claim information required by the Rebate Pilot Program in an ordered and efficient manner, particularly when it comes to medical claims. Our operating systems do not exist in such harmony, and as such, any information submitted would be the result of manually combing through each claim for payer information and claim line details. In order to create a system by which we could compile this information, our Information Services department would have to divert an employee, potentially for several months and then ongoing depending on how the program goes. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. These data requirements are much more extensive than what has been required for 340B ESP up until recently, particularly since as a Covered Entity with entity-owned pharmacies, our submission opportunities to maintain contract pharmacy pricing has been minimal. Our program currently sends data to our third party administrator (TPA), from which we run reports monthly to perform audits. We collect a random 10% of all retail and medical claims and evaluate each one for patient eligibility, payer eligibility, and provider documentation to support 340B eligibility. We go to great lengths to ensure that our system is compliant with the 340B program guidelines so that we may continue to utilize 340B saving to provide benefit to our patients. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Knox Community Hospital, Mount Vernon, Ohio to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. In the past, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. Our wholesaler invoices must be paid every 14 days and while, technically, if the rebates were paid within the 10 days estimated by HRSA we would get paid before that deadline, this does not account for any denials and challenges. We pay around 1.5 million dollars for medications a month. Even with the current upfront 340B discounts, we struggle pay these costs in addition to the other costs of running a hospital. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Knox Community Hospital, Mount Vernon, Ohio will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. With these additional costs, our facility may have to delay or cancel capital improvements. Over the last few years, we have had to close our Allergy Clinic and Home Health Department due to cash flow and viability, and that is with 340B savings. We would not be able to offer the same amount of patient assistance as we currently do, and we would not be able to grow our patients access to affordable medications. Any patient assistance copay options funded by 340B savings we have planned are off the table, as we would be unable to offer discounts on medications for which we do not know if we will be paid. Our facility would not be able to attract and maintain specialist that benefit our rural community, meaning patients would have to travel up to an hour to find comparable services. Many of our patients struggle with transportation costs, and this would only make it harder for them to receive care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Knox Community Hospital, Mount Vernon, Ohio reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Knox Community has had several issues with the Beacon platform, including slow response to inquiries, issue configuring data files for upload, and conflicting information. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Knox Community Hospital, Mount Vernon, Ohio, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Knox Community Hospital, Mount Vernon, Ohio respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Knox Community Hospital, Mount Vernon, Ohio and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alison Mills 340B Coordinator Knox Community Hospital, Mount Vernon, Ohio
HRSA-2026-0001-1565(no commenter metadata)2026-04-16T04:00Z10,419 chars
Please find attached feedback from Hennepin County, Minnesota on the 340B Rebate Model Pilot Program. Hennepin County 300 South Sixth Street, Minneapolis, MN 55487 hennepin.us Health Line of Business Hennepin County 300 S 6th St Minneapolis, MN 55487 April 16, 2026 Submitted via: www.regulations.gov. Re: Request for Information: 340B Rebate Model Pilot Program Docket Number: HRSA-2026-03042 Health Resources and Services Administration (HRSA), Department of Health and Human Services Dear Administrator Engels, Thank you for the opportunity to provide comments in response to the Request for Information (RFI) titled 340B Rebate Model Pilot Program. Hennepin County appreciates the agencys e orts to gather public input on the proposed 340B Rebate Pilot. Hennepin County has several departments with covered entities that participate in the 340B program (Hennepin County Public Health Clinic, Health Care for the Homeless, NorthPoint Health & Wellness Center, and Hennepin Healthcare). Every Hennepin County 340B covered entity is a safety net provider, ensuring that all residents in Hennepin County have access to life-saving care. Hennepin opposes the proposed 340B Rebate Model Pilot Program due to the significant barriers to implementation and incurred administrative and operational costs, making it more di cult for our covered entities to provide necessary care to patients most in need. We encourage the agency to consider the needs of patients who experience significant barriers to care and that covered entities participating in the 340B program exist to ensure that patients with highest needs and barriers can receive equitable access to care, including access to pharmaceuticals. Hennepin County 300 South Sixth Street, Minneapolis, MN 55487 hennepin.us Below are responses to questions outlined in the RFI: 1) Costs to Covered Entities A. Current Administrative Costs Under the Upfront 340B Discount i. Hennepin County processes hundreds of thousands of 340B transactions annually. Several covered entities within Hennepin County have administrative costs due to contract pharmacies and 340B consulting fees. Various cost drivers include sta time to administer and oversee compliance related to the 340B program, costs for IT systems to manage electronic health records, and labor hours for sta directly and indirectly involved in managing the 340B program. B. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Implementing a 340B Model Rebate Pilot Program would create significant operational costs for our organization. Several covered entities within Hennepin County do not submit to the 340B Enhanced Services Platform (ESP) and implementing the required data transfers would involve additional labor hours from several departments within the county, including IT and Data Security, Hennepin County Attorneys O ce, and 340B sta . Additionally, sta from the Finance department would be needed to set up receipt of payment from manufacturers. The 340B Model Pilot Program would create a significant change to the current administration of the upfront 340B discount program, and more sta time would need to be dedicated to audit claims that are in the current upfront discount, versus claims that are in the rebate pilot program. Additionally, the rebate pilot program would create significant financial barriers for our covered entities, upwards of multimillions of dollars, as they would need to front the market rate cost of the drug until a rebate is received, which is a significant financial barrier for covered entities that are already stretching scarce federal funding dollars. This financial barrier will only enhance barriers for patients with chronic conditions who need these medications, such as patients with diabetes and hypertension. C. Sta ng Impacts Under a Potential 340B Rebate Model Pilot Program i. Sta time would be significantly impacted by a 340B Pilot Program, with sta significantly altering current work to implement a pilot. The labor hours involved would not only impact the 340B direct sta , but would also involve sta from IT, Finance, Legal, and more. Sta would be required to review every single claim in order to prevent duplicate discounts and ensure that qualifying 340B dispenses receive a rebate, which creates additional costs for covered entities as more sta would need to be hired. As more drugs are added to the pilot, this sta ng impact only grows. Hennepin County 300 South Sixth Street, Minneapolis, MN 55487 hennepin.us D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Pilot Program i. A 340B Rebate Pilot Program would require Hennepin County to make a significant investment to ensure electronic transfer of the rebate claims in a way that the federally sponsored program accepts in addition to the sta ng needs. This includes IT/Analytics e ort to stand up compliance reporting that would assist with the proper approval of each rebate claims. E. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Hennepin County would incur many additional costs to our organization associated with the implementation of a 340B Rebate Model Pilot Program. Notably, the county would require significant legal review of the system selected by HRSA for the electronic data transfer. Hennepin County would incur additional 340B consulting fees to ensure that all 340B compliance is met under the new pilot program. While the pilot program is being set up, residents may be a ected due to the increased costs of medications that are inaccessible to covered entities due to the upfront discount being removed. 2) Payment Timing and Potential Cash Flow Impacts for Covered Entities A. Payment timing within 10 calendar days of submission of a complete claim would impact cash flow as covered entities would now be required to pay market price for a 340B drug. Waiting for a rebate to be reimbursed the di erence for a 340B drug, while carrying the possibility that manufacturers could deny a rebate for a qualifying 340B drug. The 340B Pilot Rebate Program will create significant financial barriers for covered entities who are community and safety net providers. Covered entities will have to review their formulary policies to respond to the di cult cash flow situation that will be created by the pilot program, some of which may be forced to no longer provide these life-saving medications, which will ultimately hurt the patient. Covered entities within Hennepin County have various payment terms, some of which require payment within 14 days and others with longer payment terms. One wholesaler does provide incentives for paying invoices early. Hennepin County averages remit within 10 business days. Additionally, Hennepin County has concerns about manufacturers adhering to federal requirements that would require manufacturers to send a remit payment within 10 calendar days. Manufacturers can deny claims, and HRSA does not involve itself in reviewing claims that manufacturers and covered entities dispute. Hennepin County 300 South Sixth Street, Minneapolis, MN 55487 hennepin.us 3) Rebate Denials A. Hennepin County believes that more specific parameters should be built into a potential 340B Rebate Pilot Program to ensure that manufacturers pay remits to covered entities. While manufacturers are required to provide documentation for denials, there is no process for covered entities to dispute a denial with the manufacturer or HRSA. If a pilot program were to be in e ect, HRSA needs to be involved in the rebate denial process and review claims where a manufacturer and covered entity dispute 340B claim eligibility. 4) Data Collection by Covered Entities A. Hennepin County currently utilizes an electronic health record to collect and maintain 340B data. Additionally, covered entities with contract pharmacies have claim data collected at the contract pharmacy. Covered entities have documented policies and procedures in place to conduct monthly, quarterly, and yearly 340B audits that check for data accuracy, completeness, consistency, and 340B compliance. A pilot program would impact current data collection as an additional tool would be used to submit claims data and raise concerns about data security, as the pilot program would require additional claims data be sent to a 3rd party. 5) Manufacturer E orts to Avoid Duplicate Discounts A. Hennepin County covered entities have policies and procedures in place to prevent duplicate discounts and follows the Minnesota Department of Human Services requirements for billing prescriptions drugs provided to Medicaid patients. Hennepin County covered entities audit prescriptions billed to Medicaid monthly to ensure that duplicate discounts are prevented and addressed. 6) Required Reporting A. Hennepin County opposes the pilot rebate model as a whole and therefore does not have input on required reporting that would make a pilot model e ective. 7) 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A. A 340B Rebate Model Pilot Program would a ect the integrity of the 340B program by making it more di cult for covered entities to access 340B pricing and provide life-saving prescription medications to underserved populations. A 340B pilot program would significantly impact cash flow and already scarce federal resources of covered entities and would negatively impact patient care. A rebate model would not assist manufacturers in avoiding paying duplicate discounts, prevent diversion, or increase pricing transparency across stakeholders. A rebate model Hennepin County 300 South Sixth Street, Minneapolis, MN 55487 hennepin.us would do the opposite and restrict covered entities to access 340B pricing that they are guaranteed by qualifying to be a 340B covered entity. Hennepin County opposes a 340B Rebate Model Pilot Program due to the significant barriers to implementation, and restricting access to 340B pricing. The Health Resources and Services Administration could reduce administrative burden by maintaining the current model of the 340B program as an upfront discount program. Thank you for considering our feedback. Commissioner Irene Fernando Chair Hennepin County Board
HRSA-2026-0001-1566Iowa Primary Care Association2026-04-16T04:00Z23,427 chars
Attached is the Iowa Primary Care Association's response to HRSA's 340B Rebate Model Pilot Program RFI. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of the Iowa Primary Care Association (Iowa PCA), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. The Iowa PCA provides a wide range of support to Iowas fourteen CHCs. Collectively, our members provide healthcare to over 253,000 Iowans annually through over 900,000 visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are a vital part of the healthcare system, serving as a primary source of care for lowincome and other medically complex populations, providing primary and preventative health services that reduce avoidable emergency department use, hospitalizations, and overall healthcare spending while delivering outcomes comparable to, or better than, other primary care settings. Summary of Recommendations: In short, the Iowa PCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA proceeds in pursuing a rebate model, CHCs should be exempt due to their heightened vulnerability to the financial strains (AND POTENITAL HARM TO PATIENTS) it will create and the fact that CHCs are already subject to extensive federal laws, regulations, and audit requirements governing the appropriate use of 340B savings. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Additionally, if HRSA chooses to proceed with a rebate pilot program, HRSA should select a start date for the implementation of the rebate model that is no sooner than July 1st, 2027, to allow CEs sufficient time to prepare to comply with program requirements. Summary of Comments: In these comments, the Iowa PCA explains: A. The importance of 340B savings to Iowas CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their over 253,000 patients. B. The rebate model will create massive cashflow issues, administrative burden, and other costs for CHCs, imperiling their financial stability. 1 HRSA requested input on these in the first paragraph of the RFI summary. C. Costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. HRSA should never impose a mandatory rebate model on CEs and if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. There are a minimum set of protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. A neutral claims clearinghouse would achieve the same goals as a rebate model without creating harm to providers while upholding program integrity. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of Iowas primary care safety net. In 2024 they served over 253,000 patients, 90% of whom had incomes below 200% of the Federal Poverty Level (FPL), 21% of whom were uninsured, and thousands more who were underinsured2. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income, uninsured, and underinsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the limited access populations they care for. As aligned with the 340B legislation, 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, Iowas CHCs routinely rely on 340B savings to support services such as buying down costs of primary care for those unable to afford the service, reducing the overall cost of medications and using savings to maintain access to dental and maternal health services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs nationwide estimated that their upfront cost to purchase the ten 2026 pilot drugs at the Wholesale Acquisition Cost (WAC) would have been between 50 to almost 500 times more than they currently paid for those drugs. These drugs are among the most widely prescribed and clinically essential medications used by CHC patients, accounting for a significant share of overall dispensing volume. As noted in their submitted comments, many of Iowas CHCs report that their upfront cost to purchase these pilot drugs will cost millions of dollars a year. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash, and lose access to prompt pay discounts from manufactures. CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. 2 Impact Report Iowa Primary Care Association, INConcertCare and IowaHealth+ (2025) 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income Massive administrative burdens: A rebate model will require CHCs to implement information technology (IT) systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. Additionally, staff will need to be hired to administer the IT systems and submit these claims. It will also require careful financial management to minimize borrowing costs and wholesaler fees. In addition, Iowas CHCs have consistently expressed concern about the substantial oversight and ongoing monitoring required to administer a rebate model, noting that compliance would likely require hiring additional administrative staff and/or diverting existing personnel away from patientfacing and clinical support services. These added staffing and oversight demands would further increase operating costs and directly erode the 340B savings that CHCs rely on to support affordable care and critical services for their patients. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically at-risk patients. Thus, every time 340B savings are reduced which Iowas CHCs unanimously indicate would occur under a rebate model CHCs are forced to scale back vital services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve out rebate drugs from 340B starting in the new year. For CHCs, the consequences of these decisions are particularly severe because contract pharmacies are not just a convenience, but an essential mechanism for ensuring patient access to affordable medications. Not all CHCs operate in-house pharmacies and therefore rely on contract pharmacy arrangements to dispense prescribed medications to their patients. Even for CHCs with on-site pharmacies, geographic barriers, rural service areas, limited transportation options, and patient mobility challenges often make contract pharmacies the most practical and accessible point of care. Without contract pharmacies, many low-income and rural patients would have no viable option to obtain 340B-priced medications. When CHCs or their contract pharmacy partners are forced to carve out rebate drugs, patient access to affordable medications is directly compromised. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. For Iowa CHCs that continue purchasing drugs under 340B, many expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. As avoidable complications and hospitalizations rise, so does the overall cost to the healthcare system, which is borne by all patients and providers, while simultaneously worsening the health of communities. Given these pressures, it would not be surprising if Iowas CHCs were forced to reduce the number of discounts they can provide on primary care services and may have to cut back on the services they provide and lay off staff members. D. CHCs must be exempted from any rebate model due to their heightened risk of adverse outcomes to the pressures it would create. The concerns described above e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a large share of 340B purchases for CHCs: This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA proceeds with including CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments. Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers Federal Register Notice (FRN) stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved of last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a. Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and b. Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, within 30 days of costs being billed.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This would cause CHCs costs to skyrocket and effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a. Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. b. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) 7. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5 can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of Iowas CHCsand their ability to serve over 253,000 low-income and uninsured patients by providing to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives such as a neutral clearinghouse model that achieve program goals without undermining CHCs financial viability or patient access to care. If HRSA chooses to proceed with a rebate pilot program, we request that HRSA select a July 1st, 2027, start date to allow CEs time to prepare to comply with program requirements. The Iowa PCA appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Chief External Affairs Officer, Katie Owens at kowens@iowapca.org. Sincerely, Aaron Todd Chief Executive Officer Iowa Primary Care Association 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. This may also lead to higher fees from contract pharmacies. IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans from wholesaler or other creditors. Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1567Ampla Health2026-04-16T04:00Z12,322 chars
Ampla Health comment regarding HRSA-2026-03042 mpla Health are to improve your life. April 15,2026 Chantelle Britton Director, Office of PharmacyAffairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Ampla Health I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This additional time has been essential for evaluating the extensive operational and financial impacts the proposed 340B Rebate Model Pilot would impose on Community Health Centers (CHCs). The 340B program is indispensable to CHCs' ability to deliver affordable medications and essential services to medically underserved communities. The proposed rebate modelshifting responsibility from manufacturers to safety-net providersposes severe risks to CHCs' financial stability, clinical operations, and ability to meet federal program requirements. National assessments show CHCs would face profound consequences. Many are already reporting significant losses across entity-owned and contract pharmacy operations due to increasing administrative barriers. National data shows that a single mid-sized health center is projected to incur more than $3 million annually in new administrative, labor, and IT expenses under a rebate model. Rural CHCs, which reinvest an estimated 25% of 340B savings into rural-specific infrastructure such as mobile clinics and telehealth, would be disproportionately harmed. Ampla Health is a nonprofit network of community based Federally Qualified Health Centers dedicated to providing comprehensive, high-quality healthcare services across Northern California. Ampla Health currently sees 62,588 patients that are uninsured and under insured. Ampla Health was founded to serve underserved populations, including farm workers and low-income individuals, and offers integrated medical, dental, behavioral Corporate Offices: 935 Market Street Yuba City, CA 95991 T 530-674-4261 F 530-674-4269 www.amplahealth.or. health, pharmacy, and specialty services to support the whole patient. With a strong focus on accessibility and affordability, the organization accepts a wide range of insurance plans and offers sliding-fee discounts to ensure care is available to all. Through patient-centered care, prevention programs, and community outreach, Ampla Health is committed to improving health outcomes and enhancing the well-being of the communities it serves. I. We Strongly Urge HRSAto Exempt CHCs from the 340B Rebate Model Pilot For more than 30 years, the 340B program has enabled CHCs to "stretch scarce Federal resources" by purchasing outpatient medications at discounted prices and reinvesting savings into services for Low-income patients. The rebate model undermines this longstanding structure by forcing CHCs to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for uncertain rebate payments. This redesign would destabilize cash flow, constrain access to medications, and impede CHCs' ability to serve the 52 million patients who rely on them. For Ampla Health, the proposal directly impacts: The 224,000 annual 340B-eligible prescriptions we dispense. The $600,000 required to maintain our existing compliant 340B operation. The programs supported 340B reinvestment, including uninsured patient's clinic visits, medication and transportation. It also includes salaries for people who are running our 340b program, TPA vendors and Auditors, to stay compliant. We strongly urge HRSA to exempt all CHCs from the rebate model to maintain program integrity and protect safety-net access. II. Patient Impact: Threats to Medication Access and Safety Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. In addition, the increase in administrative burden and associated costs to manage a 340B rebate model when combined with reduced savings from the program, will result in a compounded reduction in services needed to our patients. Fewer resources will require our CHCs to reduce patient services simply to meet the requirements of an unneeded rebate program. Ill. Administrative and Financial Burdens on CHCs The proposed rebate model would require CHCs to overhaul pharmacy systems, hire additional staff, and take on new compliance obligations across entity-owned, contract, and clinic-administered drug operations. These changes impose substantial new costs without improving program integrity. In addition, losing access to the upfront 340B price in wholesaler catalogs and pharmacy software complicates compliance with sliding fee scale health center rules, Medicaid FFS AAC billing, and the insulin/injectable epinephrine executive order. Each of these issues seem to be unintended consequences that HRSA needs to consider as a part of this decision. Workforce and IT Impacts Nationally, CHCs estimate that 47% will need 0.5-1 new FTE, 36% will need 1-2 new FTE, and 7% will need more than 2 FTEs. CHCs report staffing costs ranging from $30,000 to $200,000 annually, with some mid-sized health centers projecting more than $3 million in combined labor, carrying, and inventory costs under a rebate model. Ampla Health would need 4 full-time FTES with an estimate cost of $500,000, also an estimated cost of $20,0000 software costs, and TPA cost of roughly $800,000 and Rebate Model vendor estimate cost of $250,000. Software and Third-Party Administrator Requirements Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. CHCs would need to: Implement new pharmacy system $15,000.00 Modify Electronic Health Record (EHR) and Pharmacy Management Systems (PMS) to support multiple manufacturer-specific portals of $75,000 Pay new costs related to ongoing reconciliation, rebate-tracking modules, and reporting fees to TPA would amount to around $250,000 Entity-Owned and Contract Pharmacies CHCs with in-house pharmacies would require new integration tools, manual reconciliation processes, and frequent data submissions. Contract pharmaciesalready strained by manufacturer restrictionsmay drop 340B participation entirely, threatening patient access in pharmacy deserts. As we have considered the impacts of this modeL we have determined that our CHC would experience losses of $15,000,000 from our owned-pharmacy operations and losses of $20 million dollars for contract pharmacy arrangements due to the administrative hurdles created by the proposed model and pharmacies blocking these drugs like they have with the MFP drugs. Clinic-Administered Drugs (CADs) Including CADs in a rebate model is unnecessary and harmful. CHCs often maintain paper-based documentation for CAD inventory and PPS-bundled services, making rebate submissions operationally infeasible. CHCs bill Medicare Part A for most CADs, minimizing duplicate discount risk. HRSA should explicitly exclude CADs from any rebate pilot. IV. Cash Flow Challenges, Wholesaler Credit Limits, and Rebate Denials Requiring CHCs to purchase drugs at WAC fundamentally alters the financial foundation of the 340B program. CHCs already operate with limited liquidity, nearly half have fewer than 90 days of cash on hand. Under the rebate model: Rebates may not be paid for 40-85 days, depending on inventory turnover and data submission schedules. Manufacturers retain broad discretion to deny rebates, leaving CHCs with unrecoverable WAC costs. Loss of prompt-pay, volume, and sub-ceiling discounts will significantly increase expenses. Ampla Health's projected increase in upfront $50 million dollars, cashflow impact would be $50 million dollars, expected denial-related losses would be roughly around $20million because contract pharmacies will block these drugs and from what we make our in house pharmacies would also be impacted roughly around $20,000 because we wouldn't have the moneyto pay upfront on the WAC cost, and credit-limit implication would be very difficult as we currently have $500,000 credit limit with ourwholesalers. To cover WAC purchases, many CHCs would be forced to use scarce reserves or take out lines of creditdiverting funds from clinical care to interest payments and erode the purpose of the 340B program. V.Existing CHC Compliance Systems CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute that facilitates making medications affordable for patients. CHCs have systems in place that help us achieve 340B goals, including sliding-fee scale programs for patients up to 200% FPL, regular HRSA Operational Site Visits to ensure compliance, annual 340B reporting through the Uniform Data System, and strong internal controls, audits, and external compliance oversight. CHCs are not the source of 340B misuse. Imposing a rebate model would add new burdens without improving accountability. VI. Recommendation: A National, Neutral Claims Clearinghouse (NCC) We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a small fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program. Protect patient access to affordable MFP drugs. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given that the required data already exists, a rebate model is an unnecessary and harmful duplication of effort. Ampla Health strongly urges HRSA to exempt CHCs from the proposed 340B Rebate Model Pilot. The rebate model threatens medication access, undermines CHC financial stability, adds significant administrative burden, and contradicts congressional intent for the 340B program. It poses disproportionate harm to the underserved patients CHCs are federally mandated to serve. We appreciate the opportunity to provide feedback and welcome continued engagement. Please contact Vivian Suarez at vsuarezPamplahealth.org with any questions. Sincerely, Benjamin Flores President & CEO
HRSA-2026-0001-1568CHI Health Mercy Corning2026-04-16T04:00Z5,959 chars
See attached file(s) ) "11- CHI Health.. CHI Health Mercy Hospital 603 Rosary Drive Corning, IA 50841 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Health Mercy Corning, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether FIRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Health Mercy Corning that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Health Mercy Corning relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2O26-O3O42 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerejy 12Liteta (22-(Gt Alicia Reed President, CHI Health Mercy Corning Apr 20,2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CHI Health Mercy Corning Corning, IA + CommonSpirit ' As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1569Primary Health Network2026-04-16T04:00Z15,042 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Primary Health Network, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct an analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. For Rural Community Health Centers these costs are even more devastating. Rural Community Health Centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Primary Health Network (PHN) is one of Pennsylvanias largest and most comprehensive community health centers. PHN is committed to delivering high-quality, patient-centered care to all individuals and families across the region. Offering a wide range of services, including primary care, behavioral health, dental, pediatrics, podiatry, chiropractic, and more, PHN is dedicated to promoting overall wellness and empowering patients to lead healthier lives. Each year, PHN serves more than 75,000 patients across 16 counties in Pennsylvania and one county in Ohio. Of these 75,000 patients, approximately 50% fall under 100% of Federal Poverty Level. With a compassionate team of providers and staff, PHN ensures care is both accessible and affordable, staying true to its mission that no one should be turned away due to their financial situation or life circumstances. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Primary Health Network in particular, this means it will impact: Over 75,000 patients that we currently serve Cause a substantial increase in administration costs for our 340B program Impact our ability to provide upfront discounts on medications to patients Increase upfront annual drug costs by approximately 9 million dollars Limit the additional services that we are currently able to provide We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in infrastructure and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Projection Sliding Fee Discount: Primary Health Network provided approximately $382,000 in sliding fee discounts. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Primary Health Network anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Primary Health Network anticipates an increase of approximately 1 million dollars to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. The Burden of Network Coordination For CHCs with contracted pharmacy services, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across numerous different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely, rather than manage the administrative headache. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with the Medicaid Drug Rebate Program or the Medicare Drug Price Negotiation Program). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Office of Pharmacy Affairs (OPA) should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC). This would provide more accurate deduplication and reduce the administrative burden of a rebate model at a fraction of the cost. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Primary Health Network strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Primary Health Network believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Primary Health Network appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact William Dragojevic at wdragojevic@primary-health.net Sincerely, George Garrow, MD CEO Primary Health Network
HRSA-2026-0001-1570Anonymous Anonymous2026-04-16T04:00Z1,845 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing this as a therapist, a social worker and an employee of Federally Qualified Health Center in Kentucky. I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, A therapist, a social worker & behavioral health provider
HRSA-2026-0001-1571Anonymous Anonymous2026-04-16T04:00Z1,324 chars
A 340B rebate model represents a fundamental departure from the original intent of the 340B Drug Pricing Program, which was established to help safetynet providers stretch scarce Federal resources and deliver more comprehensive care. For more than three decades, the program has allowed Community Health Centers to purchase outpatient medications at significantly reduced prices, enabling them to offer affordable medications to millions of lowincome and uninsured patients. Requiring CHCs to purchase medications at full price and wait for rebates would impose severe cashflow burdens and place an immense financial strain on already resourceconstrained organizations. This shift would create new barriers for patients, particularly uninsured patients who depend on upfront 340B discounts, and would make it operationally impossible for many CHCs to provide the sliding fee scale and discounted medications required by law. The proposed 340B Rebate Model Pilot Program directly threatens CHCs core mission and undermines congressional intent. By destabilizing pharmacy operations and diverting limited resources away from patient care, this model would cause disproportionate harm to the patients served by CHCs and other safetynet providers, jeopardizing access to medications for the 52 million patients who rely on us.
HRSA-2026-0001-1572Beauregard Health System (Beauregard Memorial)2026-04-16T04:00Z26,804 chars
The Honorable Thomas Engels Please see our comment to HRSA on 340b Rebate Pilot Program HHS Docket No, HRSA-2026-03042 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Beauregard Health System, DeRidder, LA we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Beauregard Health System, DeRidder, LA that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Beauregard Health System, DeRidder, LA has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Beauregard Health System, DeRidder, LA has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and 2 denials, and therefore less money that Beauregard Health System, DeRidder, LA can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Beauregard Health System, DeRidder, LA to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Beauregard Health System, DeRidder, LA understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Administrative costs will probably be absorbed and decrease the time spent on patient care. We are a small rural DSH hospital with a finite budget. We are a total of 7 personnel in the pharmacy department. The only 340b skilled folks in the hospital. Staffing Impacts Under a Potential 340B Rebate Program. Beauregard Health System, DeRidder, LA does not currently have the staff needed to comply with a Rebate Program. The rebate program would cause patient care to suffer. We will not be able to hire another person. The director of pharmacy manages the 340b drug discount program for Beauregard. Having to manage the rebates and reconcile and fight with the drug manufacturers would severely hamper our savings that we now receive from the 340b drug discount program. There will probably be times when things are left undone and we lose the discount. We do not have a person in the pharmacy whose sole job is to manage 340b. As complicated as it is, it is a collective work process for all of us in pharmacy. DeRidder is a small rural town of 10,000 people; it took us 5 months to hire a pharmacist this past winter. Finding a 340b skilled person would be almost impossible, if we were able to hire another person. The additional time expected to chase rebates, reconcile on missing rebates and having to send request over and over would probably be 20-30 hours extra per week. 3 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Beauregard Health System, DeRidder, LA has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Claim level data at present is unavailable. We are working towards claim level data being able to be exported from our IT prescription system now. Our clinical pharmacist has been working with our prescription IT system vendor for a couple of months now and that part is still nowhere ready. Instead of our clinical pharmacist working on patients antibiotic therapy, infectious disease, or some other clinical aspect of pharmacy to improve patient care they are performing IT duties. We are working now on claim level data on going to the TPA for months from our hospitals electronic health record system. That has yet to be completed. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. This 340b ESP platform is cumbersome and customer service is not very well managed. We use it as little as possible. Same thing with Beacon. We audit our 340b program monthly. Confirm documentation of the administration of the 340b purchased drug as well as making sure our process matches our policy and procedures. Close attention is paid to the TPA 340b software that assimilates all the patient drug use data that is sent. We changed TPA vendors in the past when the performance and trust was not as good as it should have been. We take 340b compliance seriously and understand the gravity if we fell out of compliance and placed our 340b program at risk. 4 Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Beauregard Health System, DeRidder, LA to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Having to wait 10 days for 25 drugs would reduce our days of cash on hand. Floating $500,000 for a small rural facility like ours is critical. Our pharmacist just informed me that we will be ordering a drug one dose that costs $11,370 on 340b. If the rebate goes forward, to a full-blown rebate of all drugs, which it is likely heading, we will pay $15,450 and have to wait and fight for the difference. This is not the intent of the 340b Drug Discount program. The intent of the drug discount program is for safety-net DSH hospitals like Beauregard to be able to stretch scarious resources not use them up trying to manage the program. If the rebates from the drug manufacturers arrive in 10 days as described, which we doubt. We would be out an appreciable amount of funds. We pay our wholesaler invoices monthly. So, for the last 10 days of the month we will be paying for high dollar WAC purchases before the rebate dollars land in our bank account. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Beauregard Health System, DeRidder, LA will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Beauregard Health System, DeRidder, LA reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on 5 an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. There has been no evidence from independent audits that there is a need for a rebate model. Drug manufactures information is not independent, non-biased. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We had to enter forms multiple times before they were accepted. They were asking for forms when our hospital first opened. We were built in the early 1950s, those forms do not exist. No one else has ever asked for those kinds of forms. Just more red tape to delay. Why would HRSA who is supposed to be neutral in the disagreement between the drug manufactures and the 340b covered entities select vendors who are pro drug manufacturers? Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Beauregard Health System, DeRidder, LA, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 6 We have been a 340b DSH hospital since 2006. We have never been notified of a duplicate discount problem by any drug manufacturer. The system that is in place now with the Medicaid exclusion file at OPAIS-HRSA and working with Louisiana State Medicaid works well. For all of these reasons, Beauregard Health System, DeRidder, LA respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Beauregard Health System, DeRidder, LA and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alex Manitzas RPh. Director of Pharmacy Beauregard Health System, DeRidder, LA The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Beauregard Health System, DeRidder, LA we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Beauregard Health System, DeRidder, LA that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Beauregard Health System, DeRidder, LA has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Beauregard Health System, DeRidder, LA has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Beauregard Health System, DeRidder, LA can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Beauregard Health System, DeRidder, LA to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Beauregard Health System, DeRidder, LA understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Administrative costs will probably be absorbed and decrease the time spent on patient care. We are a small rural DSH hospital with a finite budget. We are a total of 7 personnel in the pharmacy department. The only 340b skilled folks in the hospital. Staffing Impacts Under a Potential 340B Rebate Program. Beauregard Health System, DeRidder, LA does not currently have the staff needed to comply with a Rebate Program. The rebate program would cause patient care to suffer. We will not be able to hire another person. The director of pharmacy manages the 340b drug discount program for Beauregard. Having to manage the rebates and reconcile and fight with the drug manufacturers would severely hamper our savings that we now receive from the 340b drug discount program. There will probably be times when things are left undone and we lose the discount. We do not have a person in the pharmacy whose sole job is to manage 340b. As complicated as it is, it is a collective work process for all of us in pharmacy. DeRidder is a small rural town of 10,000 people; it took us 5 months to hire a pharmacist this past winter. Finding a 340b skilled person would be almost impossible, if we were able to hire another person. The additional time expected to chase rebates, reconcile on missing rebates and having to send request over and over would probably be 20-30 hours extra per week. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Beauregard Health System, DeRidder, LA has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Claim level data at present is unavailable. We are working towards claim level data being able to be exported from our IT prescription system now. Our clinical pharmacist has been working with our prescription IT system vendor for a couple of months now and that part is still nowhere ready. Instead of our clinical pharmacist working on patients antibiotic therapy, infectious disease, or some other clinical aspect of pharmacy to improve patient care they are performing IT duties. We are working now on claim level data on going to the TPA for months from our hospitals electronic health record system. That has yet to be completed. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. This 340b ESP platform is cumbersome and customer service is not very well managed. We use it as little as possible. Same thing with Beacon. We audit our 340b program monthly. Confirm documentation of the administration of the 340b purchased drug as well as making sure our process matches our policy and procedures. Close attention is paid to the TPA 340b software that assimilates all the patient drug use data that is sent. We changed TPA vendors in the past when the performance and trust was not as good as it should have been. We take 340b compliance seriously and understand the gravity if we fell out of compliance and placed our 340b program at risk. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Beauregard Health System, DeRidder, LA to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Having to wait 10 days for 25 drugs would reduce our days of cash on hand. Floating $500,000 for a small rural facility like ours is critical. Our pharmacist just informed me that we will be ordering a drug one dose that costs $11,370 on 340b. If the rebate goes forward, to a full-blown rebate of all drugs, which it is likely heading, we will pay $15,450 and have to wait and fight for the difference. This is not the intent of the 340b Drug Discount program. The intent of the drug discount program is for safety-net DSH hospitals like Beauregard to be able to stretch scarious resources not use them up trying to manage the program. If the rebates from the drug manufacturers arrive in 10 days as described, which we doubt. We would be out an appreciable amount of funds. We pay our wholesaler invoices monthly. So, for the last 10 days of the month we will be paying for high dollar WAC purchases before the rebate dollars land in our bank account. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Beauregard Health System, DeRidder, LA will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Beauregard Health System, DeRidder, LA reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. There has been no evidence from independent audits that there is a need for a rebate model. Drug manufactures information is not independent, non-biased. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We had to enter forms multiple times before they were accepted. They were asking for forms when our hospital first opened. We were built in the early 1950s, those forms do not exist. No one else has ever asked for those kinds of forms. Just more red tape to delay. Why would HRSA who is supposed to be neutral in the disagreement between the drug manufactures and the 340b covered entities select vendors who are pro drug manufacturers? Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Beauregard Health System, DeRidder, LA, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. We have been a 340b DSH hospital since 2006. We have never been notified of a duplicate discount problem by any drug manufacturer. The system that is in place now with the Medicaid exclusion file at OPAIS-HRSA and working with Louisiana State Medicaid works well. For all of these reasons, Beauregard Health System, DeRidder, LA respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Beauregard Health System, DeRidder, LA and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alex Manitzas RPh. Director of Pharmacy Beauregard Health System, DeRidder, LA
HRSA-2026-0001-1573Lexington Regional Health Center2026-04-16T04:00Z26,841 chars
HRSA-2026-03042 RFI Letter | Lexington Regional Health Center Lexington Regional Health CAH281361-00 1201 North Erie Street Lexington, Nebraska 68850 April 9, 2026 Health Resources and Services Administration Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Lexington Regional Health is grateful for the opportunity to respond to this Request for Information regarding a potential rebate-based model for the 340B Drug Pricing Program. As a Critical Access Hospital anchoring healthcare delivery across a large, sparsely populated region of south-central Nebraska, we depend on the certainty of point-of-sale 340B pricing to sustain services that would otherwise be financially unviable. A shift to a rebate structure would expose our institution to risks that are not theoretical. They are existential. The following comments address the specific operational, financial, and compliance challenges a rebate framework would create for Lexington Regional Health and, by extension, for the rural patients who have no viable alternative source of care. Administrative Cost Impact Lexington Regional Health currently operates with the lean administrative infrastructure characteristic of rural Critical Access Hospitals. Our pharmacy and finance teams carry responsibilities across multiple departments, and there is no reserve capacity to absorb a materially expanded workload without corresponding investment in personnel or technology. Our conservative estimate is that transitioning to a rebate model would generate at least $2,250 per month in incremental administrative expense. That figure accounts for the time required to perform transaction-level claims reconciliation, manage rebate validation workflows, respond to manufacturer disputes, coordinate with third-party administrators operating under inconsistent reporting methodologies, and produce the documentation necessary to satisfy financial audit requirements. These are not one-time transition costs. They represent a permanent addition to our cost structure. Bond Covenant Compliance and the Dangers of Floating Drug Costs Perhaps the most consequential concern we must raise is one that may not be immediately apparent to policymakers who are unfamiliar with the capital structure of rural hospitals: the relationship between a rebate-based 340B model and our existing bond covenant obligations. Lexington Regional Health carries outstanding municipal bond obligations subject to financial covenants that require us to maintain minimum debt service coverage ratios and liquidity thresholds on a continuous basis. These covenants are not flexible. Breach triggers default provisions that could accelerate repayment obligations and materially compromise our ability to operate. Under a rebate model, Lexington Regional Health would be required to purchase covered outpatient drugs at wholesale acquisition cost and then wait for manufacturer rebates to arrive weeks or months later. During that float period, our pharmacy is effectively advancing capital we do not have. Drug procurement for our patient population is not a discretionary expense that can be deferred while we await rebate settlement. We purchase medications because patients need them now. Given our current drug acquisition volumes, the outstanding float at any given time under a rebate model would likely range between $150,000 and $300,000. Carrying that obligation on our balance sheet on a revolving basis would reduce our available liquidity to a point where we risk falling below the coverage ratios specified in our bond indenture. A covenant violation of this nature would not simply create an accounting problem. It would trigger lender notifications, potentially draw scrutiny from rating agencies, and force us into a series of remediation conversations with bondholders that divert leadership attention and resources away from patient care. We want to be direct with HRSA: a rebate model does not merely inconvenience Lexington Regional Health. It places us at genuine risk of a technical default on debt instruments that were issued to finance the very infrastructure we use to serve our community. This is not a risk we can manage internally, and it is not one that should be imposed on covered entities without full recognition of its downstream consequences. Cash Flow Exposure from Rebate Payment Delays The financial margin available to Lexington Regional Health for error or disruption is narrow under the best of circumstances. Recent experience from the pharmacy sector offers a direct preview of what a rebate model looks like in practice. The Maximum Fair Pricing initiative was designed in part to integrate with rebate-based payment flows. When its rebate component was discontinued, the operational infrastructure built around it did not simply disappear. Pharmacies were left managing persistent reconciliation problems, including failures to match anonymized claims data across federal systems, prescription misclassification errors, and financial adjustments that lagged the underlying transactions by several months. Those problems did not resolve quickly, and the providers absorbing them had no meaningful recourse. For Lexington Regional Health, rebate delays of even a modest duration create a cash flow problem that compounds quickly. If manufacturers were to extend payment timelines beyond a reasonable standard, the resulting shortfall could reach between $150,000 and $300,000, a range our operating budget cannot absorb without service reductions. Financial Exposure from Missed or Reduced Rebates Even setting aside the timing issue, we are concerned about what happens when rebates are not paid in full. This is not a hypothetical risk. Discussions within the 340B community have documented instances in which providers made repeated, documented outreach attempts to manufacturers regarding rebate shortfalls and received no substantive response. When those providers escalated to federal oversight bodies, they were informed that no enforcement mechanism existed to compel timely payment. Lexington Regional Health has modeled what a partial rebate failure would mean for our organization. If manufacturers were to successfully deny or reduce rebates on as little as 5 percent of our qualifying 340B volume, the estimated annual financial impact to our institution would be approximately $200,000. That figure represents a direct reduction to the program savings that currently support services including expanded rural outreach, medication assistance for uninsured patients, and staffing for specialty clinics that operate at a loss because the community has no other access point. A $200,000 annual shortfall does not result in an accounting adjustment. It results in a programmatic decision about what we can no longer afford to offer. For a covered entity of our scale, that is not a manageable variance. It is a structural wound. Data Collection and Reporting Complexity Lexington Regional Health works with multiple third-party administrators whose reporting methodologies are not standardized. Some disclose gross acquisition cost. Others report only the net figure after rebate settlement. This inconsistency is already a source of friction in our current workflows. Under a rebate model, that inconsistency would become a material compliance risk. To accurately reconcile rebate payments at the transaction level, our finance team would need to establish parallel tracking systems capable of matching individual drug purchases to corresponding rebate receipts across multiple TPA reporting formats and manufacturer systems. Organizations that have piloted rebate platforms report that the available reporting tools were not built with covered entity accounting needs in mind. The core reports required to match deposits to bank records were either absent or insufficient, leaving finance staff to construct manual reconciliation processes that introduce both error risk and significant time burden. Without uniform, audit-ready reporting infrastructure mandated across all manufacturers and platforms, Lexington Regional Health would face substantial accounting uncertainty at every quarterly close. Manufacturer Duplicate Discount Arguments We acknowledge that manufacturers have raised concerns about duplicate discounts. However, the statutory prohibition on duplicate discounts applies narrowly to Medicaid transactions. It does not extend to Medicare or commercial insurance populations, and manufacturers have independently negotiated rebate arrangements with pharmacy benefit managers covering those same populations outside the 340B context. Covered entities already carry meaningful compliance obligations in this area, and those obligations are enforced through an existing audit framework. Manufacturers retain audit rights when reasonable grounds for suspicion of noncompliance exist. In our experience, audits are uncommon precisely because covered entities invest heavily in compliance systems to ensure that qualifying criteria are met. Using the theoretical risk of duplicate discounts as justification for shifting to a rebate model would impose systemic cost and uncertainty on compliant institutions in order to address a problem that existing mechanisms are already equipped to handle. Integrity of the 340B Program The 340B statute requires that manufacturers sell covered outpatient drugs to covered entities at or below the 340B ceiling price at the time of purchase. That language is not ambiguous. The discount is a condition of the sale, not a downstream reconciliation event. A rebate model does not implement the statute. It defers it, contingent on manufacturer cooperation and administrative follow-through that has demonstrably failed in other contexts. When a rebate is contested, delayed, or simply not paid, Lexington Regional Health has acquired medication at full wholesale acquisition cost. That outcome is not a technical deviation from congressional intent. It is a direct contradiction of it. The covered entity has fulfilled its obligations. The manufacturer has not. Yet under a rebate model, the covered entity bears the financial consequence. Community Economic Crisis and Compounding Risk Finally, we must underscore a local economic event that transforms the financial risks detailed in this letter from serious to potentially insurmountable. On November 22, 2025, Tyson Foods announced the permanent closure of its beef processing facility in Lexingtonour community's single largest employereliminating approximately 3,200 jobs, effective January 20, 2026. The University of NebraskaLincoln estimates that the closure will produce $3.283 billion in annual statewide economic losses, including both direct and multiplier effects on the Nebraska economy, with total labor income losses projected at $530.41 million per year across just over 7,000 jobs in Lexington and surrounding counties. Tyson employees alone stand to lose an estimated $241 million in annual pay and benefits. The closure will also substantially reduce public revenues, with annual state personal income tax losses estimated at $23.209 million and state sales tax revenue projected to decline by $10.16 million per year. In a community of roughly 11,000 residents, where school officials report that nearly half of students have a parent employed by Tyson, the loss of this anchor employer will drive significant out-migration potentially halving the population we serve. Fewer residents means fewer patients, fewer commercially insured lives, and a sharply increasing share of uncompensated care, all compressing the already narrow operating margin on which Lexington Regional Health depends. Each risk we have identified in this letterthe $150,000 to $300,000 cash flow float required to bridge delayed rebate payments, the bond covenant pressure, the estimated $200,000 annual impact from even a five-percent rebate shortfallbecomes materially harder to absorb in a contracting local economy. A rebate-based 340B model would require this institution to carry new, open-ended financial exposure at the worst possible time, compounding an economic disaster with a policy-imposed one and directly jeopardizing the healthcare access our remaining community members most urgently need. Conclusion Lexington Regional Health respectfully urges HRSA to preserve the point-of-sale discount structure that has allowed the 340B program to function as intended. We serve a population with limited income, limited transportation, and no alternative hospital within a reasonable driving distance. The savings generated through the 340B program support services that exist here because we have found ways to fund them, and that would be discontinued if those funding mechanisms were disrupted. A rebate model would impose administrative cost, cash flow volatility, bond covenant risk, and unenforceable financial exposure on institutions that are already operating with no margin for error. We believe those consequences are incompatible with the program's statutory purpose and the healthcare needs of the rural communities we serve. Respectfully submitted, Lexington Regional Health 340B Program Administration CAH281361-00 Lexington Regional Health CAH281361-00 1201 North Erie Street Lexington, Nebraska 68850 April 9, 2026 Health Resources and Services Administration Office of Pharmacy Affairs RE: HHS Docket No. HRSA-2026-03042 Response to Request for Information: Potential Rebate Model for the 340B Drug Pricing Program Dear HRSA Administrator and Office of Pharmacy Affairs: Lexington Regional Health is grateful for the opportunity to respond to this Request for Information regarding a potential rebate-based model for the 340B Drug Pricing Program. As a Critical Access Hospital anchoring healthcare delivery across a large, sparsely populated region of south-central Nebraska, we depend on the certainty of point-of-sale 340B pricing to sustain services that would otherwise be financially unviable. A shift to a rebate structure would expose our institution to risks that are not theoretical. They are existential. The following comments address the specific operational, financial, and compliance challenges a rebate framework would create for Lexington Regional Health and, by extension, for the rural patients who have no viable alternative source of care. Administrative Cost Impact Lexington Regional Health currently operates with the lean administrative infrastructure characteristic of rural Critical Access Hospitals. Our pharmacy and finance teams carry responsibilities across multiple departments, and there is no reserve capacity to absorb a materially expanded workload without corresponding investment in personnel or technology. Our conservative estimate is that transitioning to a rebate model would generate at least $2,250 per month in incremental administrative expense. That figure accounts for the time required to perform transaction-level claims reconciliation, manage rebate validation workflows, respond to manufacturer disputes, coordinate with third-party administrators operating under inconsistent reporting methodologies, and produce the documentation necessary to satisfy financial audit requirements. These are not one-time transition costs. They represent a permanent addition to our cost structure. Bond Covenant Compliance and the Dangers of Floating Drug Costs Perhaps the most consequential concern we must raise is one that may not be immediately apparent to policymakers who are unfamiliar with the capital structure of rural hospitals: the relationship between a rebate-based 340B model and our existing bond covenant obligations. Lexington Regional Health carries outstanding municipal bond obligations subject to financial covenants that require us to maintain minimum debt service coverage ratios and liquidity thresholds on a continuous basis. These covenants are not flexible. Breach triggers default provisions that could accelerate repayment obligations and materially compromise our ability to operate. Under a rebate model, Lexington Regional Health would be required to purchase covered outpatient drugs at wholesale acquisition cost and then wait for manufacturer rebates to arrive weeks or months later. During that float period, our pharmacy is effectively advancing capital we do not have. Drug procurement for our patient population is not a discretionary expense that can be deferred while we await rebate settlement. We purchase medications because patients need them now. Given our current drug acquisition volumes, the outstanding float at any given time under a rebate model would likely range between $150,000 and $300,000. Carrying that obligation on our balance sheet on a revolving basis would reduce our available liquidity to a point where we risk falling below the coverage ratios specified in our bond indenture. A covenant violation of this nature would not simply create an accounting problem. It would trigger lender notifications, potentially draw scrutiny from rating agencies, and force us into a series of remediation conversations with bondholders that divert leadership attention and resources away from patient care. We want to be direct with HRSA: a rebate model does not merely inconvenience Lexington Regional Health. It places us at genuine risk of a technical default on debt instruments that were issued to finance the very infrastructure we use to serve our community. This is not a risk we can manage internally, and it is not one that should be imposed on covered entities without full recognition of its downstream consequences. Cash Flow Exposure from Rebate Payment Delays The financial margin available to Lexington Regional Health for error or disruption is narrow under the best of circumstances. Recent experience from the pharmacy sector offers a direct preview of what a rebate model looks like in practice. The Maximum Fair Pricing initiative was designed in part to integrate with rebate-based payment flows. When its rebate component was discontinued, the operational infrastructure built around it did not simply disappear. Pharmacies were left managing persistent reconciliation problems, including failures to match anonymized claims data across federal systems, prescription misclassification errors, and financial adjustments that lagged the underlying transactions by several months. Those problems did not resolve quickly, and the providers absorbing them had no meaningful recourse. For Lexington Regional Health, rebate delays of even a modest duration create a cash flow problem that compounds quickly. If manufacturers were to extend payment timelines beyond a reasonable standard, the resulting shortfall could reach between $150,000 and $300,000, a range our operating budget cannot absorb without service reductions. Financial Exposure from Missed or Reduced Rebates Even setting aside the timing issue, we are concerned about what happens when rebates are not paid in full. This is not a hypothetical risk. Discussions within the 340B community have documented instances in which providers made repeated, documented outreach attempts to manufacturers regarding rebate shortfalls and received no substantive response. When those providers escalated to federal oversight bodies, they were informed that no enforcement mechanism existed to compel timely payment. Lexington Regional Health has modeled what a partial rebate failure would mean for our organization. If manufacturers were to successfully deny or reduce rebates on as little as 5 percent of our qualifying 340B volume, the estimated annual financial impact to our institution would be approximately $200,000. That figure represents a direct reduction to the program savings that currently support services including expanded rural outreach, medication assistance for uninsured patients, and staffing for specialty clinics that operate at a loss because the community has no other access point. A $200,000 annual shortfall does not result in an accounting adjustment. It results in a programmatic decision about what we can no longer afford to offer. For a covered entity of our scale, that is not a manageable variance. It is a structural wound. Data Collection and Reporting Complexity Lexington Regional Health works with multiple third-party administrators whose reporting methodologies are not standardized. Some disclose gross acquisition cost. Others report only the net figure after rebate settlement. This inconsistency is already a source of friction in our current workflows. Under a rebate model, that inconsistency would become a material compliance risk. To accurately reconcile rebate payments at the transaction level, our finance team would need to establish parallel tracking systems capable of matching individual drug purchases to corresponding rebate receipts across multiple TPA reporting formats and manufacturer systems. Organizations that have piloted rebate platforms report that the available reporting tools were not built with covered entity accounting needs in mind. The core reports required to match deposits to bank records were either absent or insufficient, leaving finance staff to construct manual reconciliation processes that introduce both error risk and significant time burden. Without uniform, audit-ready reporting infrastructure mandated across all manufacturers and platforms, Lexington Regional Health would face substantial accounting uncertainty at every quarterly close. Manufacturer Duplicate Discount Arguments We acknowledge that manufacturers have raised concerns about duplicate discounts. However, the statutory prohibition on duplicate discounts applies narrowly to Medicaid transactions. It does not extend to Medicare or commercial insurance populations, and manufacturers have independently negotiated rebate arrangements with pharmacy benefit managers covering those same populations outside the 340B context. Covered entities already carry meaningful compliance obligations in this area, and those obligations are enforced through an existing audit framework. Manufacturers retain audit rights when reasonable grounds for suspicion of noncompliance exist. In our experience, audits are uncommon precisely because covered entities invest heavily in compliance systems to ensure that qualifying criteria are met. Using the theoretical risk of duplicate discounts as justification for shifting to a rebate model would impose systemic cost and uncertainty on compliant institutions in order to address a problem that existing mechanisms are already equipped to handle. Integrity of the 340B Program The 340B statute requires that manufacturers sell covered outpatient drugs to covered entities at or below the 340B ceiling price at the time of purchase. That language is not ambiguous. The discount is a condition of the sale, not a downstream reconciliation event. A rebate model does not implement the statute. It defers it, contingent on manufacturer cooperation and administrative follow-through that has demonstrably failed in other contexts. When a rebate is contested, delayed, or simply not paid, Lexington Regional Health has acquired medication at full wholesale acquisition cost. That outcome is not a technical deviation from congressional intent. It is a direct contradiction of it. The covered entity has fulfilled its obligations. The manufacturer has not. Yet under a rebate model, the covered entity bears the financial consequence. Community Economic Crisis and Compounding Risk Finally, we must underscore a local economic event that transforms the financial risks detailed in this letter from serious to potentially insurmountable. On November 22, 2025, Tyson Foods announced the permanent closure of its beef processing facility in Lexingtonour community's single largest employereliminating approximately 3,200 jobs, effective January 20, 2026. The University of NebraskaLincoln estimates that the closure will produce $3.283 billion in annual statewide economic losses, including both direct and multiplier effects on the Nebraska economy, with total labor income losses projected at $530.41 million per year across just over 7,000 jobs in Lexington and surrounding counties. Tyson employees alone stand to lose an estimated $241 million in annual pay and benefits. The closure will also substantially reduce public revenues, with annual state personal income tax losses estimated at $23.209 million and state sales tax revenue projected to decline by $10.16 million per year. In a community of roughly 11,000 residents, where school officials report that nearly half of students have a parent employed by Tyson, the loss of this anchor employer will drive significant out-migrationpotentially halving the population we serve. Fewer residents means fewer patients, fewer commercially insured lives, and a sharply increasing share of uncompensated care, all compressing the already narrow operating margin on which Lexington Regional Health depends. Each risk we have identified in this letterthe $150,000 to $300,000 cash flow float required to bridge delayed rebate payments, the bond covenant pressure, the estimated $200,000 annual impact from even a five-percent rebate shortfallbecomes materially harder to absorb in a contracting local economy. A rebate-based 340B model would require this institution to carry new, open-ended financial exposure at the worst possible time, compounding an economic disaster with a policy-imposed one and directly jeopardizing the healthcare access our remaining community members most urgently need. Conclusion Lexington Regional Health respectfully urges HRSA to preserve the point-of-sale discount structure that has allowed the 340B program to function as intended. We serve a population with limited income, limited transportation, and no alternative hospital within a reasonable driving distance. The savings generated through the 340B program support services that exist here because we have found ways to fund them, and that would be discontinued if those funding mechanisms were disrupted. A rebate model would impose administrative cost, cash flow volatility, bond covenant risk, and unenforceable financial exposure on institutions that are already operating with no margin for error. We believe those consequences are incompatible with the program's statutory purpose and the healthcare needs of the rural communities we serve. Respectfully submitted, Lexington Regional Health 340B Program Administration CAH281361-00
HRSA-2026-0001-1574CommonSpirit2026-04-16T04:00Z5,907 chars
See attached file(s) A member of CommonSpirit April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Health Mercy Council Bluffs, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Health Mercy Council Bluffs that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Health Mercy Council Bluffs relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Nick Otool 340B Author ial, Market CFO Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Apr20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CHI Health Mercy Council Bluffs Council Bluffs, IA CommonSpirrtJr As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1575Family Health Center of Marshfield, Inc.2026-04-16T04:00Z39,165 chars
Thank you for the opportunity to share our comments. Please see attached letter. April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Center of Marshfield, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to the ability of CHCs to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Family Health Center expects to face staggering impacts on administrative costs and cash flow. Projected Cost Increases: Family Health Center anticipates a cost increase of $50,622 in entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation and managing compliance with the pilot model. This conservative estimate represents a 41% increase in administrative costs and will force Family Health Center to reallocate scarce federal resources away from patient care. Cash Flow Demands: Family Health Center calculates an additional $1,154,547.71 in upfront capital required for procurement to purchase the 10 drugs included in FY2026. In operation since 1974, Family Health Center provides care to the underserved in rural central, northern, and western Wisconsin at 17 locations, including two primary care centers, five alcohol and drug recovery centers, and ten dental centers. Family Health Center also operates a mail order 340B pharmacy and a remote dispensing site. The combination of access to federal best prices through the 340B drug pricing program and collaborations with pharmaceutical manufacturers for individual assistance on medications allows Family Health Center to efficiently deliver medications to thousands of low-income residents throughout its rural service area. Family Health Center targets all individuals living at or below 200% of the federal poverty level and/or experiencing barriers to care for any other reason. FHCs principal population subgroups include Medicaid/BadgerCare Plus members; Medicare enrollees with limited incomes; people with limited incomes and no health insurance; and those with limited incomes who are underinsured. 2 One hundred percent of the service area population resides in a federally designated medically underserved area (MUA) and/or a medical, dental, or mental health professional shortage area (HPSA). In 2025, the 389 dedicated staff (all positions) at FHC served a total of 38,422 patients resulting in 94,310 in-person clinical and 3,142 virtual visits. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Family Health Center, this will: Impact 47,586 prescriptions filled for 1,309 patients across rural central, northern, and western Wisconsin Increase the current administrative cost of $124,236 by at least 41% to manage compliance with the 340B rebate model pilot program Jeopardize savings passed directly to patients to assist with out-of-pocket costs for medications and ability to access points for services (e.g. Mercer remote dispensing) We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic 3 conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Family Health Center provided $9,149,401 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Family Health Center conservatively anticipates needing to add at least 0.38 additional FTEs to account for the increase in regulatory, operational, administrative, and 5 compliance burden created by a rebate model, resulting in a 41% increase over our current 0.95 FTE in managing 340B compliance. External Vendor Costs: Given increased complexity, Family Health Center also anticipates an increase in costs to seek external support vendors to meet pilot program requirements, including but not limited to 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Family Health Center anticipates needing an additional 0.38 FTEs at the cost of $50,622. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Thus far, Family Health Center staff have spent over 80 working hours preparing data for rebate model implementation and will be required to dedicate considerably more time to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Family Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The In-House Pharmacy: The Burden of IT and Finance Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. Ongoing Resource Diversion: Our current pharmacy software is stand-alone from our electronic health record and requires manual data extractions for all 340B reporting and compliance. Additional reporting will require staff who currently manage clinical pharmacy services and accounting services to spend at least 2 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Financial Challenges 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Family Health Center passes along 340B savings directly to patients to increase patient access to medications. Our program provides assistance for all out-of-pocket costs for 99% of patients served by the pharmacy, saving patients $610,536.13 in 2025. To bridge rural community access gaps, FHC also mails direct to patient homes, utilizing 340B savings to cover the increasing postage and mailing costs, averaging $15,000 per month. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost Family Health Center an additional $1,154,547.71 in upfront capital required for procurement to purchase these 10 drugs. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, which could include care coordination, benefit navigation, community outreach, and other enabling services. Even more dire, our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. A. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Family Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 9 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Family Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $224,733.98. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Family Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,444,052.53 in 2027 and $1,757,739.76 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves and reevaluate resources allocated to other patient care activities. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Family Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Family Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $175,371.05. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 11 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Family Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more 12 comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Family Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Family Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Xin Ruppel, Director of Pharmacy, at ruppel.xin@familyhealthcenter.org. Sincerely, Greg Nycz, CEO Amanda Spindler, CFO Xin Ruppel, Director of Pharmacy Family Health Center of Marshfield, Inc.
HRSA-2026-0001-1576Hackley Community Care Center Inc.2026-04-16T04:00Z12,514 chars
See attached file(s) Hackley Community Care Clinic 1778 Sanford Street, Muskegon, MI 49441 April 16th, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Britton: Hackley Community Care Clinic (Hackley) is a Federally Qualified Health Center (FQHC) providing integrated primary care, behavioral health, dental services, and 18 schoolbased health programs in Muskegon County, Michigan, and we operate two entityowned community pharmacies to connect clinical decisions to affordable medication access at the point of service. We appreciate HRSAs Request for Information (RFI) regarding the potential use of rebates to effectuate the 340B ceiling price and on the standards, procedures, and stakeholder impacts that would accompany any such model. We also recognize HRSAs public statement that the prior 340B Rebate Model Pilot Program application notice was vacated and remanded following litigation and that HHS is now reconsidering whether and how to implement any rebate model consistent with its statutory authority. Section 340Bs purpose is to enable safetynet providers to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. From Hackleys perspective as an FQHC, any operational changes that move away from upfront pricing must be evaluated against their impact on pointofsale affordability, slidingfee compliance, and the sustainability of safetynet pharmacy access for our patients. Executive summary Based on our daytoday experience as an FQHC with onsite pharmacies, we anticipate that a rebateonly or rebatefirst framework would materially change how and whether our patients can afford and obtain medications at the counter. Health center scale and vulnerability: In 2024, health centers served 32,387,774 patients nationallypopulations that rely on predictable, upfront affordability when filling prescriptions. Pharmacy access already under stress: Nearly 30% (29.4%) of U.S. retail pharmacies operating between 2010 and 2020 had closed by 2021, with elevated closure risk in Black and Latino neighborhoods and among independent pharmacies. FQHC pharmacies are absorbing more complex needs in this environment. MDPNP drugs are critical to primary care: The initial list of drugs selected for negotiation under the Medicare Drug Price Negotiation Program (MDPNP) for 2026 includes Eliquis (apixaban), Xarelto (rivaroxaban), Jardiance (empagliflozin), Januvia (sitagliptin), Farxiga (dapagliflozin), Entresto (sacubitril/valsartan), Enbrel (etanercept), Imbruvica (ibrutinib), Stelara (ustekinumab), and several insulin productstherapies central to primary and chronic care. Disruptions in affordability at the time of dispensing will predictably reduce initiation and adherence to these therapies. Bottom line: If HRSA moves forward with any rebate construct, we respectfully urge the agency to (1) preserve upfront discounts for FQHCs (2) build a neutral, standardized clearinghouse framework that addresses duplicatediscount concerns without shifting financing and operational risk onto safetynet providers. Patient access and slidingfee compliance FQHCs are required to maintain slidingfee discount programs that ensure no patient is denied care due to inability to pay, with discounts set based on income and family size across inscope services. In practice, this expectation assumes that 340B pricing is available at or before the point of sale so that we can calculate the correct patient charge at the counter. If 340B prices are realized only through postdispensing rebates, our pharmacies would carry higher acquisition costs on their books while still needing to apply slidingfee schedules in real time. A delayed rebate does not help a patient who cannot afford to initiate therapy today and does not provide us with a predictable basis to charge a reduced amount at fill. A rebate framework also complicates our compliance with the statutory prohibition on duplicate discounts for Medicaid and with emerging nonduplication requirements related to MDPNP. Today, many covered entities align their 340B accumulators and Medicaid billing logic to the acquisition cost and price file at the time of dispensing, moving the effective 340B price to a later rebate risks timing mismatches, claimlevel misclassification, or inconsistent identifiers across payers and manufacturers. Without a uniform, claimlevel method for designating 340B status and a neutral system to validate that status, rebatebased models could inadvertently increaserather than reduceduplicatediscount risk Clinical impact of shifting affordability from at fill to after rebate The drugs initially selected for MDPNP price negotiation for 2026 include widely used anticoagulants, SGLT2 inhibitors, heartfailure agents, insulin products, and specialty biologicstherapies central to preventing strokes, heart attacks, kidney failure, and other serious events in our patient population. Many of these therapies are highcost at list price, such that any increase in outofpocket exposure at the counter can lead to abandonment of new prescriptions or nonadherence to chronic regimens. Behavioral health needs remain elevated nationwide; recent national surveys estimate that roughly one in four adults had any mental illness in 2024, with substantial unmet need for treatment. In our integrated primary care and behavioral health model, the ability to send a patient directly from a visit to the pharmacy and ensure that psychotropic and related medications are affordable in that moment is critical for continuity of care; a rebate arriving weeks later does not change a decision to forego pickup today. Operational and financial friction that becomes patient harm As a communitybased FQHC, Hackley operates on narrow margins and relies on predictable 340B savings to support staffing, extended hours, schoolbased care, and care coordination for medically and socially complex patients. Nationally, health centers serve tens of millions of patients, the majority of whom are low income, uninsured, or publicly insured, and many centers face similar financial constraints. A rebate model would require entities like ours to finance higher acquisition prices while waiting for rebates to be calculated, validated, and paid. Tying up working capital in this way could reduce our ability to maintain adequate inventory, invest in pharmacy staff, or sustain extended hours, and any delays or denials in rebate payments would directly translate to writeoffs or cuts to patientfacing services. At the same time, the broader pharmacy landscape is contracting approximately 29.4% of U.S. retail pharmacies that operated between 2010 and 2020 had closed by 2021, with higher closure risk in predominantly Black and Latino neighborhoods and for independent pharmacies. In this environment, any additional operational and administrative burden associated with rebate modelssuch as multiple manufacturerspecific portals, nonstandard data requirements, and opaque denial rationalescould further discourage contractpharmacy participation and concentrate more responsibility for access on FQHCowned pharmacies already operating at capacity. If HRSA adopts any rebate approach: Minimum framework elements 1. Preserve upfront discounts for FQHCs Because FQHCs are statutorily required to operate slidingfee discount programs and serve highpoverty populations, maintaining access to upfront 340B pricing is essential to aligning charges with patients ability to pay at the time of service. We therefore urge HRSA to either preserve upfront discounting for FQHCs from any rebateonly pilot. 2. Neutral clearinghouse with a standardized minimum dataset To address concerns about duplicate discounts and data integritywithout shifting financial risk to safety-net providersHRSA could consider supporting a neutral, post-dispense clearinghouse that receives a standardized, claim-level minimum dataset. At a minimum, the dataset could include the covered-entity identifier, dispense or administration date, NDC or HCPCS code, quantity or units, claim identifier, and an indicator identifying Medicaid or other applicable federal payer status. A post-dispense clearinghouse model would allow for systematic de-duplication across Medicaid and the Manufacturer Discount Program in the Medicare Part D coverage gap, while preserving covered entities ability to acquire drugs up front at the 340B ceiling price or below. By operating after dispensing and reimbursement, this approach would reduce the risk of duplicate discounts without disrupting current purchasing processes or creating new cash-flow burdens for covered entities. It is important to emphasize that such a clearinghouse should be narrowly scoped to address duplicate discounts in areas where federal law explicitly provides manufacturer protections, including Medicaid and applicable Medicare inflation rebate requirements. It should not be used to prevent or restrict commercial duplicate discounts, which are not addressed or protected under federal statute. When appropriately limited in scope, a neutral clearinghouse could strengthen program integrity and transparency while respecting statutory boundaries and maintaining the financial viability of 340B covered entities. 3. Uniform denial codes, documentation, and timecertain payments If rebates are used in any context, HRSA should require nationally uniform denial codes, clear documentation of the specific data elements at issue for each denied line, and timecertain payment standards for both initial and corrected submissions. Public aggregate reporting by manufacturer of approval/denial rates, reasons for denial, and average processing times would improve transparency and allow HRSA to monitor for systemic issues. 4. Data minimization and privacy protections We encourage HRSA to limit data collection to what is necessary to prevent duplicate discounts and support compliance and to restrict broader use or disclosure of patientlevel data. Dataminimization principles are important to maintain patient trust, especially in small communities where reidentification risks may be higher. 5. Public monitoring of patient access during any pilot If a rebate pilot is implemented, HRSA should commit to publishing regular aggregate metrics on processing timelines, approval/denial rates, and other indicators, and should solicit structured feedback from covered entities on patientaccess impacts at the point of sale. Timely, transparent monitoring would enable midcourse corrections if evidence shows increased prescription abandonment, delayed therapy initiation, or other unintended consequences. Why FQHCs are uniquely vulnerable In Muskegon County, 17.1% of residents live below 100% of the Federal Poverty Guideline (FPG) and 38.6% live below 200% FPG, while the uninsured rate among residents under age 65 is 5.5%a profile in which pointofsale price strongly determines whether prescriptions are filled. The county also carries Health Professional Shortage Area (HPSA) designations (e.g., primary care and mental health; lowincome dental), with local populationtoprovider ratios around 1,233:1 per primarycare FTE, 37,618:1 per psychiatrist, and 1,923:1 per dentist, underscoring access constraints that magnify the role of the pharmacy counter for adherence. Social and clinical need indicators compound this risk: food insecurity 14.5%, eviction rate 10.1%, obesity 35.6%, and physical inactivity 23.1%conditions that heighten dependence on cardiometabolic and behavioralhealth therapies that must be affordable at fill, not weeks later via rebate. Thank you for the opportunity to comment on this important RFI. We share HRSAs commitment to maintaining the integrity of the 340B Program while ensuring that patients can access needed medications when they are prescribed. We would welcome the opportunity to participate in any technical workgroups regarding national data standards, neutral clearinghouse design, or other implementation considerations. Sincerely, Mike Weessies CEO Hackley Community Care Clinic
HRSA-2026-0001-1577Anonymous Anonymous2026-04-16T04:00Z1,631 chars
Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Jena Comstock
HRSA-2026-0001-1578Casey Whittaker · London, KY, United States2026-04-16T04:00Z548 chars
The proposed 340B rebate model is a fundamental shift that would dismantle the financial stability of FQHC's by forcing full upfront drug costs and delayed, uncertain rebates. This effectively transfers financial risk away from manufacturers and onto safety-net providers that operate on already razor-thin margins. The result would be predictable: reduced access, weakened ability to provide services, and real harm to the vulnerable patients the 340B program was created to protect. I respectfully ask that FQHC's be exempt from any rebate model.
HRSA-2026-0001-1579Health Partnership Clinic, Inc.2026-04-16T04:00Z13,927 chars
See Attached Health Partnership CLINIC April 16, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health Partnership Clinic, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This additional time has been essential for evaluating the extensive operational and financial impacts the proposed 340B Rebate Model Pilot would impose on Community Health Centers (CHCs). The 340B program is indispensable to CHCs' ability to deliver affordable medications and essential services to medically underserved communities. The proposed rebate modelshifting responsibility from manufacturers to safety-net providersposes severe risks to CHCs' financial stability, clinical operations, and ability to meet federal program requirements. National assessments show CHCs would face profound consequences. Many are already reporting significant losses across entity-owned and contract pharmacy operations due to increasing administrative barriers. National data shows that a single mid-sized health center is projected to incur more than $3 million annually in new administrative, labor, and IT expenses under a rebate model. Rural CHCs, which reinvest an estimated 25% of 340B savings into rural-specific infrastructure such as mobile clinics and telehealth, would be disproportionately harmed. Health Partnership Clinic, HPC, was +formed in 1992 through community efforts to address a need for healthcare for uninsured low-income adults. As a free clinic, care was provided by volunteers in Johnson County, Kansas. The clinic grew and expanded services and in 2012 became federally qualified health center. HPC now provides medical (including pediatrics and prenatal care), dental, mental health and substance use disorder services in three counties which are a mixture of urban and rural communities. We are also the homeless grantee for Johnson County. Last year over 25,000 visits were made to 10,880 patients. 55% of these patients are over the age of 18. Ninety percent of patients live at or below 200% of the poverty level, noting that 48% live at or below 100% of the poverty level. One of the largest struggles that our organization faces is our payer mix given Kansas is a not Medicaid expansion state. 47% of patients last year were uninsured and we are seeing that number trend upwards. This is significant as the average amongst our Kansas peers is 27% and 18% of our national peers (based on 2024 UDS measures). Given the financial and insurance status of our patients, their ability to afford medications is a struggle without the 340B program. Our adult patients often have comorbidities including asthma, diabetes, hypertension, anxiety and depression, all of which are likely to require medications. Patients often make the choice between health care including prescriptions and feeding their families or putting gas in their cars to go to work. When the patients are non-compliant with medications, it leads in the end to high costs including emergency room visits and hospitalizations. Health Partnership Clinic, inc. Page 2 of 5 I. We Strongly Urge HRSA to Exempt CHCs from the 340B Rebate Model Pilot For more than 30 years, the 340B program has enabled CHCs to "stretch scarce Federal resources" by purchasing outpatient medications at discounted prices and reinvesting savings into services for low-income patients. The rebate model undermines this longstanding structure by forcing CHCs to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for uncertain rebate payments. This redesign would destabilize cash flow, constrain access to medications, and impede CHCs' ability to serve the 52 million patients who rely on them. For Health Partnership Clinic, the proposal directly impacts: The 31,623 annual 340B-eligible prescriptions we dispense. The $350,000.00 required to maintain our existing compliant 340B operation this includes salaries, TPA fees, and consultants. The programs supported by 340B reinvestment, HPC uses the revenues to cover the gap between what a patientvisit costs and what a patient can pay. Our overall cost pervisit is $333 and the average patient payment for someone who is uninsured is $55. Because of our patient population, we don't earn as much revenue from the 340B program as others. The rebate model would be detrimentalto our ability to provide much needed care. We would incur costs of outside individuals to manage the program as we do not have the internal capacity. This would be ongoing fixed costs. Additionally, with an already slim budget, waiting for repayment from the pharmaceutical companies would almost make participation in the program prohibitive due to the upfront funds that would be needed. We strongly urge HRSA to exempt all CHCs from the rebate model to maintain program integrity and protect safety-net access. II. Patient impact: Threats to Medication Access and Safety Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. Health Partnership Clinic, Inc. Page 3 of 5 In addition, the increase in administrative burden and associated costs to manage a 340B rebate model when combined with reduced savings from the program, will result in a compounded reduction in services needed to our patients. Fewer resources will require our CHCs to reduce patient services simply to meet the requirements of an unneeded rebate program. III. Administrative and Financial Burdens on CHCs The proposed rebate model would require CHCs to overhaul pharmacy systems, hire additional staff, and take on new compliance obligations across entity-owned, contract, and clinic-administered drug operations. These changes impose substantial new costs without improving program integrity. In addition, losing access to the upfront 340B price in wholesaler catalogs and pharmacy software complicates compliance with sliding fee scale health center rules, Medicaid FFS AAC billing, and the insulin/injectable epinephrine executive order. Each of these issues seem to be unintended consequences that HRSA needs to consider as a part of this decision. Workforce and IT Impacts Nationally, CHCs estimate that 47% will need 0.5-1 new FTE, 36% will need 1-2 new FTE, and 7% will need more than 2 FTEs. CHCs report staffing costs ranging from $30,000 to $200,000 annually, with some mid-sized health centers projecting more than $3 million in combined labor, carrying, and inventory costs under a rebate model. RX Paradigm would be the company we would need to use to be able to do this $7500 for the platform fee. Then they will charge us for the rebate portion $68/,500 yearly. ECW our EMR system will be charging $5000 to create the files and $100 for a monthly file. We would need one FTE which would cost us $86,0000. Consultant, since we do not have a dedicated 340b Manager we would be paying $55,000 yearly to have them help us with all these changes. Software and Third-Party Administrator Requirements Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. CHCs would need to: Modify Electronic Health Record (EHR) and Pharmacy Management Systems (PMS) to support multiple manufacturer-specific portals ONE-TIME INTEGRATION COST, $75,000. Pay new costs related to ongoing reconciliation, rebate-tracking modules, and reporting fees to TPA which will cost roughly around $25,000 yearly Entity-Owned and Contract Pharmacies CHCs with in-house pharmacies would require new integration tools, manual reconciliation processes, and frequent data submissions. Contract pharmaciesalready strained by manufacturer restrictionsmay drop 340B participation entirely, threatening patient access in pharmacy deserts. As we have considered the impacts of this model, we have determined that our CHC would experience losses of negative $1 million dollars for contract pharmacy arrangements due to the administrative hurdles created by the proposed model. Health Partnership Clinic, Inc. Page 4 of 5 Clinic-Administered Drugs (CADs) Including CADs in a rebate model is unnecessary and harmful. CHCs often maintain paper-based documentation for CAD inventory and PPS-bundled services, making rebate submissions operationally infeasible. CHCs bill Medicare Part A for most CADs, minimizing duplicate discount risk. HRSA should explicitly exclude CADs from any rebate pilot. IV. Cash Flow Challenges, Wholesaler Credit Limits, and Rebate Denials Requiring CHCs to purchase drugs at WAC fundamentally alters the financial foundation of the 340B program. CHCs already operate with limited liquidity, nearly half have fewer than 90 days of cash on hand. Under the rebate model: Rebates may not be paid for 40-85 days, depending on inventory turnover and data submission schedules. Manufacturers retain broad discretion to deny rebates, leaving CHCs with unrecoverable WAC costs. Loss of prompt-pay, volume, and sub-ceiling discounts will significantly increase expenses. Health Partnership Clinic is projected increase in upfront drug spend in the amount of $5 million dollars, we do not have the cashflow for this so the impact would be that we would have to block these list of rebate drugs from our patients since we don't have the money to buy these drugs upfront which will cause patients to be put in the hospital and possibly lose their lives, and credit-limit implications would be huge as the wholesaler gives us a credit limit of $250k a month. To cover WAC purchases, many CHCs would be forced to use scarce reserves or take out lines of creditdiverting funds from clinical care to interest payments and eroding the purpose of the 340B program. V. Existing CHC Compliance Systems CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute that facilitates making medications affordable for patients. CHCs have systems in place that help us achieve 340B goals, including sliding-fee scale programs for patients up to 200% FPL, regular HRSA Operational Site Visits to ensure compliance, annual 340B reporting through the Uniform Data System, and strong internal controls, audits, and external compliance oversight. CHCs are not the source of 340B misuse. Imposing a rebate model would add new burdens without improving accountability. VI. Recommendation: A National, Neutral Claims Clearinghouse (NCC) We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a small fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program. Protect patient access to affordable MFP drugs. Sincer ly, Amy Chief Executive Officer Health Partnership Clinic, Inc. Health Partnership Clinic, Inc. Page 5 of 5 Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given that the required data already exists, a rebate model is an unnecessary and harmful duplication of effort. Conclusion Health Partnership Clinic strongly urges HRSA to exempt CHCs from the proposed 340B Rebate Model Pilot. The rebate model threatens medication access, undermines CHC financial stability, adds significant administrative burden, and contradicts congressional intent for the 340B program. It poses disproportionate harm to the underserved patients CHCs are federally mandated to serve. We appreciate the opportunity to provide feedback and welcome continued engagement. Please contact Amy Falk at Afalk@hpcks.org with any questions.
HRSA-2026-0001-1580League of United Latin American Citizens (LULAC)2026-04-16T04:00Z17,080 chars
See attached file(s) League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org NATIONAL PRESIDENT ROMAN PALOMARES CHIEF EXECUTIVE OFFICER JUAN PROAO NATIONAL OFFICERS Domingo Garcia Immediate Past President Maggie Rivera Treasurer Aiden Roach Youth President Ana Valenzuela VP for Elderly Lupe Torres VP for Women Anastacio Lopez VP for Youth Aric Herrera VP for Young Adults Jose Barrera VP for Far West Emma Lozano VP for Midwest Ramery De Luna VP for Northeast Mari Coregedo VP for Southeast Ray Mancera VP for Southwest Gabriel Portugal VP for Northwest STATE DIRECTORS Alma Yubeta Arizona Rey Hernandez Arkansas Jacob Sandoval California Sonny Subia Colorado Gilda Goldental-Stoecker District of Columbia Asia Clermont Florida Cecelia Garcia Illinois Edward Moreno Iowa Malu Elizondo Nevada Suechet Rodriguez New Jersey Fred Baca New Mexico Alicia Pagan Ohio Cecilia Giron-Mendoza Oregon Maridarlyn Gonzalez Pennsylvania Carlos Farjardo Puerto Rico Gabriel Rosales Texas Belia Paz Utah Andy Lara Washington Jaime Alvarado Wisconsin (Lead Reviewers: Cristian Simms, Fatoumatta Mbowe, Steven Hector Gaytan) April 16, 2026 Administrator Thomas J. Engels Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: LULAC Comments on HRSA Request for Information for 340B Rebate Model Pilot Program (91 FR 7287; February 17, 2026) Dear Administrator Engels, In response to the Health Resources and Services Administrations Request for Information on the potential use of rebates within the 340B Drug Pricing Program, the League of United Latin American Citizens (LULAC) offers the following perspective. HRSA frames this as a question of structure--whether a rebate model could be implemented and how it might be operationalized across the system. But from where we stand, the question is simpler. What happens to patients when the terms of access change. LULAC is the oldest and largest Latino civil rights organization in the United States, with more than 570,000 members and over 435 local LULAC councils across nearly 40 states and Puerto Rico. Our members are not abstract stakeholders. They are the patients who rely on safety-net clinics, the families who depend on affordable medications, and the local leaders who see, in practical terms, what happens when systems strain. What follows is not only analysis of a proposed rebate framework. It is a reflection of what we are hearing, plainly and consistently, from LULAC councils and communities across the country. We outline six concerns that speak to access, stability, and trust in the system. Concern 1: Reduced Access to Care Due to Cash-Flow Barriers The change appears technical, but its effect is plain. The discount disappears at the point of purchase. In its place, providers must pay full price and wait to be repaid. For community health centers and hospitals that serve Latino communities, this is not a small adjustment. These institutions live close to the margin. They depend on steady, predictable pricing to keep operating. They do not have the cash reserves to carry large costs for long periods. League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org A rebate model shifts that burden onto them immediately. They must absorb the full cost of medications and then wait, sometimes months, for reimbursement. In some cases, the change is stark. One provider would see its upfront drug costs climb from roughly $64,000 to more than $1.5 million in a year. We are already hearing how this will play out. A LULAC council leader working with a federally qualified health center told us the clinic would delay ordering medications because it cannot afford to carry that expense while waiting to be repaid. The consequence is not theoretical. It is a patient who arrives and finds the medication unavailable. This cuts against the design of the program itself. According to the 2022 National Association of Community Health Centers report, 340B: A Critical Program for Health Centers, 92% of health centers rely on these savings to expand access for low-income and rural patients. The outcome is not hard to foresee. Providers will purchase less. They will delay orders. They will narrow services where they must. Patients will encounter the result in quieter ways, empty shelves, fewer appointments, longer waits for care. Concern 2: Disparate Impact on Safety-Net Providers Serving Latinos The 340B program was created with a simple purpose. It allows providers to do more with less, to extend care where resources are limited. A rebate model reverses that logic. It asks the same providers to carry greater financial risk at the very moment they are least able to do so. Safety-net institutions already serve those with the fewest options, low-income patients, the uninsured, and many in immigrant communities. According to the 2022 National Association of Community Health Centers report, 340B: A Critical Program for Health Centers, most health centers rely on these savings not as a supplement, but as a condition of staying open and extending care in underserved areas. We hear this not as theory, but as experience. In South Texas, a LULAC member described a hospital weighing whether to reduce pharmacy hours as costs rise. The effect is immediate. Families who depend on those hours, many of them Spanish-speaking, find fewer opportunities to obtain the medications they need. The program, as described by the Health Resources and Services Administration, was intended to stretch scarce federal resources and reach more patients with more complete care. That intention matters. When pressure is applied to these providers, it does not fall evenly. It settles where the system is already most fragile. And it is there, in those communities, that access begins to narrow first. Concern 3: Administrative Burden Diverting Resources from Patient Care League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org The rebate model introduces more work. More claims, more documentation, more oversight. It asks providers to turn further inward, toward process, and away from care. Safety-net institutions are already strained. According to the Medicare Payment Advisory Commission, administrative expenses account for roughly 17 to 19 percent of total hospital spending. That is close to one- fifth of resources directed to paperwork, billing, and compliance rather than patient care. The 340B program, as it stands, already demands time and attention. According to the 2011 Government Accountability Office report, Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement, providers report that compliance requires significant staff time for tracking prescriptions, verifying eligibility, and preparing for audits. The strain is compounded by workforce shortages. According to the National Association of Community Health Centers, 68 percent of health centers reported losing between 5 and 25 percent of their workforce in a six-month period, and 15 percent reported losing up to half their staff. At the same time, the Commonwealth Fund reports that more than 70 percent of community health centers face shortages of primary care providers, nurses, or mental health professionals. We hear this reflected in local accounts. A LULAC council member told us that their clinic would need to hire a staff member devoted to compliance just to manage rebate submissions. That hire would not expand care. It would sustain administration. There is a quiet trade taking place. Time once given to patients is redirected to administrative tasks. In settings where staffing is already thin, that shift means fewer appointments, longer wait times, and less care delivered. Concern 4: Risk of Delayed or Denied Rebates Without Adequate Guardrails The proposal allows manufacturers to deny rebate claims, yet it offers no clear, uniform standard to guide those decisions. The authority is broad, and the boundaries are uncertain. We have seen this pattern before. According to the HHS Office of Inspector Generals reviews of the Medicaid Drug Rebate Program, states reported more than $500 million in disputed or unpaid rebates in a single year, with many disputes remaining unresolved for extended periods. The same audits note that these disputes can remain open for years, well beyond normal billing cycles. According to the Congressional Budget Office, manufacturers retain significant leverage in pricing and rebate negotiations. They set prices with limited external constraint and can dispute rebate claims with relatively little consequence, while existing oversight mechanisms are limited and slow to resolve conflicts. Providers understand what follows. We are already hearing concern that even small discrepancies could lead to denials. A claim questioned becomes a payment withheld. In that interval, clinics must carry the cost themselves. League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org For safety-net providers, there is little room to absorb that burden. Delays or denials do not remain on paper. They appear quickly as financial strain, and then as restraint, fewer services, fewer medications, and less care. Concern 5: Threats to Medication Access and Health Equity When costs move to the front, access recedes. The change is quiet, but its effect is direct. According to the 2025 Kaiser Family Foundation Health Tracking Poll, roughly 9 to 10 percent of Latino adults report not taking prescribed medications due to cost. That figure rises in communities facing broader financial strain. The decision is not abstract. It is made at the pharmacy counter, or at home, between doses. We hear this in personal terms. A LULAC member living with diabetes described rationing insulin when prices rose. When clinics cannot maintain a steady supply, that calculation returns. It becomes a question of how long a prescription can be stretched. The relationship between cost and care is well documented. According to Eaddy et al. (2012), patients facing higher cost-sharing are significantly more likely to reduce or stop medication use, with adherence dropping by measurable margins across chronic conditions. Those same patients experience higher rates of hospitalization and poorer long-term outcomes. The pattern is consistent. As cost rises, adherence falls. And when adherence falls, health declines in ways that are predictable and, too often, preventable. Concern 6: Data Privacy and Chilling Effects on Care The rebate model asks for more information, and it asks it at the level of the patient. Data must move between systems, between institutions, between people who do not know one another. We know how this is received. According to the 2021 Urban Institute report, Immigrant Families Continued Avoiding the Safety Net, about one in seven adults in immigrant families avoided public programs because of concerns about how their information might be used. The law allows for this exchange. According to 2025 guidance from the HHS Office for Civil Rights on the HIPAA Privacy Rule, patient data may be shared for payment and operational purposes without explicit consent. What is permitted, however, is not always trusted. We hear this from LULAC councils across the country. Families are already cautious. They weigh the need for care against the risk, perceived or real, of exposure. When more data is required, the hesitation deepens. And when hesitation deepens, people step back from care. Recommendations If the agency proceeds, it must do so with restraint. The system it seeks to change is already under pressure. Any reform should recognize that fact and set firm limits. League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org he option of an upfront discount should remain. Safety-net providers cannot be asked to operate solely within a rebate structure that requires them to carry costs they are not equipped to bear. Rebate payments must be timely and certain. Clear deadlines should govern payment, and delays should carry consequence, including interest. A system that asks providers to wait without assurance invites instability. The discretion given to manufacturers must be narrowed. Standards for denying claims should be clear and uniform. An appeals process should exist, and it should move quickly. Without that, the balance of power remains uneven. Administrative demands should be reduced where possible, and where they are increased, they should be matched with support. Providers already devote a significant share of their resources to compliance. They cannot take on more without losing ground in care. Continuity of care should be preserved. Patients should not experience interruptions in access to essential medications as a result of changes in payment structure. The purpose of the program is access. That purpose should remain intact. Data collection should be limited to what is necessary. Safeguards should be clear and enforced. Trust, once weakened, is not easily restored. Finally, any shift of this scale should be tested before it is imposed broadly. A phased pilot allows for observation, for correction, and for the possibility that the system, as designed, may not withstand the weight placed upon it. Final Remarks This proposal does not stand apart from the system it seeks to change. It places added financial risk, administrative weight, and uncertainty on the providers that already serve Latino communities and other underserved populations. We are hearing what this means in practice. Medication orders delayed. Pharmacy hours reduced. Staff moved away from care and toward paperwork. Patients, in turn, begin to step back from treatment. The 340B program was designed to widen access. According to the Health Resources and Services Administrations statutory intent in 1992, it exists to help providers stretch limited resources so they may serve more patients. This proposal risks narrowing that reach. LULAC urges careful reconsideration. Any reform should preserve the stability of safety-net providers and protect access to affordable medications, especially for those who rely on these systems most. League of United Latin American Citizens 1150 18th Street, NW, Suite 650 Washington, DC 20036 (202) 833-6130 FAX (202) 833-6135 www.LULAC.org LULAC is actively working with local councils, healthcare providers, and national partners to document these impacts and elevate the voices of affected communities. We are also engaging in federal advocacy to ensure that any changes to the program do not come at the expense of access to care. Should you have any questions, please feel free to contact me at (208) 965-0590 or at rserrano@lulac.org. Respectfully submitted, Roman Palomares LULAC National President and National Board Chairman Works Cited 1. Eaddy, Michael T., et al. How Patient Cost-Sharing Trends Affect Adherence and Outcomes. American Journal of Managed Care, vol. 18, no. 3, 2012, pp. 139148. 2. Health Resources and Services Administration. 340B Drug Pricing Program. U.S. Department of Health and Human Services, 1992. 3. Medicare Payment Advisory Commission. Report to the Congress: Medicare Payment Policy. MedPAC, various years. 4. National Association of Community Health Centers. 340B: A Critical Program for Health Centers. 2022. 5. Office of Inspector General. Medicaid Drug Rebate Program: Audit Reports and Findings. U.S. Department of Health and Human Services, 2023. 6. Office for Civil Rights. Summary of the HIPAA Privacy Rule. U.S. Department of Health and Human Services, 2025. 7. Urban Institute. Immigrant Families Continued Avoiding the Safety Net during the COVID-19 Crisis. 2021. 8. U.S. Congressional Budget Office. Prescription Drug Pricing and the Federal Budget. Congressional Budget Office, recent reports. 9. Kaiser Family Foundation. KFF Health Tracking Poll: Health Care Costs in the Current Moment of Economic Anxiety. 2025. 10. U.S. Government Accountability Office. Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement. 2011.
HRSA-2026-0001-1581Ohio Hospital Association2026-04-16T04:00Z12,679 chars
See attached file(s) April 16, 2026 Submitted via Regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of the Ohio Hospital Association (OHA) and our member hospitals participating in the 340B program, we thank you for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is simply, no. Ohios hospitals and health systems serve as the backbone of their communities. Every day, our members provide essential care throughout the continuum of life, from welcoming new babies to managing chronic conditions, delivering behavioral health services, supporting recovery, and providing dignified end-of-life care. These services often rely on access to life-saving and life-stabilizing medications. Since the inception of the 340B Drug Pricing Program in 1992, the upfront discount model has ensured expanded access to care for millions of Americans. The OHA has grave concerns with any type of 340B rebate model. This will cause an unnecessary seismic shift in the way the 340B program has successfully operated for over 30 years. As explained below, any rebate mechanism will impose enormous costs and burdens on a hospital that far outweighs any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which our members have relied on for decades, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. OHA has done its best to provide detailed answers in the limited time available to us. We have also encouraged our impacted members to provide detailed responses to this RFI. Administrator Engels Request for Information: 340B Rebate Model Pilot Program April 16, 2026 Page 2 For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that hospitals can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program Any Rebate Program would require a hospital to spend significant sums on new administrative costs. When our members chose to participate in the 340B program, they understood that some reasonable administrative costs would be incurred. Hospitals design their hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our member institutions that go far above and beyond what they had expected and planned for as a 340B hospitaland far above and beyond what they are experiencing now. Our 340B member hospitals already endure extensive administrative requirements imposed by health plans. The added requirements under a rebate model would further strain hospital resources and inject millions of dollars in unnecessary costs into the health care system. For 340B hospitals already operating on thin margins, the costs of compliance would be unsustainable. Staffing Impacts Under a Potential 340B Rebate Program Ohios 340B hospitals do not currently have the staff needed to comply with a Rebate Program. A rebate model would undoubtedly require additional full-time employees and cause current medical provider employees to reallocate work hours from medical care to perform administrative functions. Hiring and onboarding new employees take a considerable amount of time and resources. Based on feedback from our members, HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program Ohios 340B hospitals have designed their technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force hospitals to incur significant costs to change those systems. Implementing a potential 340B Rebate Model Pilot Program would require new or modified IT systems, software and data infrastructure. The development, procurement, maintenance and integration of these systems would be costly from both an administrative and financial perspective, requiring significant upfront investment as well as ongoing costs for monitoring and compliance. Data Collection by Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals. For example, both insisted that hospitals already provide the required information through the 340B Enhanced Security Platform, or ESP. That is incorrect. Administrator Engels Request for Information: 340B Rebate Model Pilot Program April 16, 2026 Page 3 340B covered entities already collect, maintain, validate and retain data related to program participation, including the use of third-party vendors. A potential 340B Rebate Model Pilot Program would disrupt these longstanding, well-functioning processes and require new data collection activities, potentially pulling information from multiple internal hospital systems. While larger organizations may have automated tools to support this work, smaller safety-net providers often rely on manual processes. These added requirements would create an unnecessary administrative burden on staff who are already stretched thin. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force 340B covered entities to effectively provide drug companies with interest-free loans as entities await the discounts that are owed to them under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our member institutions and the patients they serve. Adverse Impacts of These Additional Costs and Burdens All of these many different costs and burdens add up. Unfortunately, that means that Ohios 340B hospitals will no longer be able to use their 340B savings as effectively and comprehensively as they did under an upfront discount model. As a result, countless patients and the communities they serve will suffer in concrete ways. Hospitals rely on 340B savings to offset costs and sustain vital services for their patients and communities. Without these savings, services such as maternity care and behavioral health are at risk of being reduced or eliminated. This would limit access to timely, high-quality care and increase the risk of greater comorbidities and, ultimately, higher mortality. These impacts run counter to the population health improvements our members have worked hard to achieve. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Ohios 340B covered entities have reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Administrator Engels Request for Information: 340B Rebate Model Pilot Program April 16, 2026 Page 4 Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our member organizations, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third- party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, the Ohio Hospital Association respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. A 340B rebate model would disproportionately harm 340B hospitals that already operate with limited resources, including rural and safety-net providers. If HRSA is concerned about program integrity, the agency should conduct greater oversight on drug companies rather than creating a system that undermines hospital cashflow, increases administrative burden and diverts resources away from patient care. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow 340B covered entities to comment on the specifics of its new program. While we have endeavored to respond to this RFI in a manner that reflects our diverse membership, we are doing so without key details, including which drugs would be included in a Rebate Program and other critical elements such as data requirements, potential grounds for rebate denial, dispute resolution processes and other guardrails. A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, /s/ Quyen Weaver Senior Director, Health Economics & Policy Ohio Hospital Association
HRSA-2026-0001-1582Anonymous Anonymous2026-04-16T04:00Z4,949 chars
Re: Concerns Regarding the Proposed 340B Rebate Model from a Federally Qualified Community Health Center To Whom It May Concern, We respectfully submit this comment in response to the request for public input on the proposed 340B Rebate Model Program. We are a long standing community health center operating in Florida that serves a large population of medically underserved patients across three contiguous counties. Our organization has provided comprehensive safety net services for many years, including care for uninsured, underinsured, and medically vulnerable individuals who otherwise would have limited or no access to healthcare. We operate on extremely thin margins and face ongoing financial stress due to rising drug costs, workforce shortages, inflationary pressures, and insufficient reimbursement for the care we provide. The proposed 340B Rebate Model would significantly destabilize our organizations already strained cash flow and place our continued operation at serious risk. In the last year, our health center: Served over 40,000 vulnerable patients Dispensed approximately 110,000 340B Eligible Prescriptions Under the current 340B framework, point of sale discounts are critical to maintaining predictable and timely access to savings. These savings are reinvested directly into patient care, including expanding access to primary and preventive services, addressing social determinants of health, and sustaining services that operate at a loss but are essential to our communities. Transitioning to a rebate based system would delay access to these funds, introduce administrative uncertainty, and impose an immediate cost burden that we simply do not have the financial reserves to absorb. As a financially struggling health center, we do not possess the liquidity necessary to manage extended reimbursement timelines, dispute resolution delays, or variability in manufacturer rebate processing. Even short term disruptions in cash flow would force difficult decisions, including reductions in services, limitations on medication access for patients, decreased staffing, or elimination of programs specifically designed to support underserved populations. The downstream consequences of this model extend well beyond our organization. If enacted without safeguards that protect federally qualified community health centers the financial losses associated with the 340B Rebate Model would directly result in clinic closures, reduced access to affordable medications, increased emergency department utilization, and poorer health outcomes for thousands of vulnerable patients across our service area. For our organization, the financial impact of this proposal could ultimately force us to close our doors entirelyeliminating access to care for patients across three large counties who have few, if any, alternative options. We are deeply concerned that the proposed model shifts financial and operational risk away from manufacturers and onto safety net providers least able to bear it. While we support transparency and program integrity, these goals must not come at the expense of undermining the very entities the 340B program was designed to support. Any future policy changes must preserve the core purpose of the 340B statute: enabling covered entities to stretch scarce federal resources as far as possible to reach more eligible patients and provide more comprehensive services. We respectfully urge the Department to reconsider the rebate model approach or, at a minimum, exempt financially vulnerable federally qualified community health centers, and implement protections that ensure immediate access to 340B savings without interruption. Without such safeguards, the proposed model threatens not only organizational sustainability but also the health, safety, and well being of underserved communities throughout Florida and across the nation. In closing, it is imperative that there is a clear understanding that 340B savings are reinvested directly into patient care and services that support our mission. Revenue generated through the 340B program allows us to offset chronic underpayment for services provided to uninsured and underinsured patients and to sustain care that would otherwise operate at a financial loss. These resources support access to affordable medications, expand clinical services, maintain pharmacy and care team staffing, and fund programs that address social drivers of health such as transportation barriers, care coordination, and medication adherence support. The 340B program is essential to our ability to stretch limited resources, stabilize operations, and continue providing comprehensive, community based healthcare to underserved populations across our service area. Thank you for the opportunity to provide input on this critical issue and for considering the real world impact on the patients we serve. Respectfully submitted, Anonymous Community Health Center Florida
HRSA-2026-0001-1583Anonymous Anonymous2026-04-16T04:00Z3,358 chars
Dear Health Resources and Services Administration, I am writing to express strong opposition to the proposed 340B rebate model pilot program. While we recognize and appreciate HRSAs ongoing efforts to ensure accountability and sustainability within the 340B program, we are deeply concerned that this pilot introduces significant financial and operational barriers that will ultimately undermine patient care and worsen health outcomes in the communities we serve. Health centers like the one I work at operate on extremely limited and carefully managed funding streams. The current 340B model allows us to stretch scarce federal resources, enabling us to provide comprehensive services to underserved populations, including uninsured and underinsured patients. The proposed shift to a rebate-based system would disrupt this balance by requiring upfront payment for medications, followed by delayed reimbursement. This change would place a substantial financial burden on our organization as we do not have the cash reserves necessary to absorb these costs while awaiting rebates. The unpredictability and administrative complexity associated with a rebate model further exacerbate these concerns. Delays in reimbursement, potential disputes over eligibility, and increased reporting requirements would divert already limited staff time and resources away from direct patient care. Instead of focusing on improving access, care coordination, and health education, our teams would be forced to navigate a more cumbersome and uncertain financial process. Most importantly, the consequences for patient care cannot be overstated. The 340B program currently allows us to offer medications at reduced or no cost, ensuring adherence to treatment plans for chronic conditions such as diabetes, hypertension, and asthma. Under a rebate model, financial strain may force us to limit medication availability, or scale back supportive services. These changes would lead to decreased medication adherence, increased hospitalizations, and poorer overall health outcomes for our patients. Our patient population already faces significant barriers to care, including economic instability, transportation challenges, and limited access to specialty services. The proposed pilot would compound these challenges by introducing uncertainty into the very program designed to mitigate them. Any disruption to medication access disproportionately affects those who are least able to absorb additional costs. Furthermore, the administrative burden of the rebate system risks creating inequities among providers. Larger institutions with greater financial reserves may be able to adapt, while smaller health centers like ours could struggle to maintain services. This imbalance threatens the core mission of the 340B program, which is to support safety-net providers and expand access to care for vulnerable populations. In light of these concerns, we respectfully urge HRSA to reconsider the implementation of the 340B rebate model pilot program. Preserving the current structure is critical to maintaining the financial stability of health centers and ensuring continuity of care for millions of patients nationwide. Thank you for your attention to this matter and for your continued commitment to improving healthcare access and equity. Sincerely, A concerned Primary Care Doctor
HRSA-2026-0001-1584Emily Beireis · Hillsboro, OR, United States2026-04-16T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1585Jackson Hospital and Clinics2026-04-16T04:00Z10,097 chars
See attached file(s) The Honorable Thomas 3. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, IVID 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf ofJackson Hospital and Clinic we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Jackson Hospital and Clinic that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinaty. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Jackson Hospital and Clinic in Montgomery, AL has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Jackson Hospital and Clinic in Montgomery, AL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Jackson Hospital and Clinic can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Jackson Hospital and Clinic to spend significant sums on new administrative 1 costs. When we chose to participate in the 340B program, Jackson Hospital and Clinic understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We estimate that it the rebate model in its opening form would increase our administrative burden by 200K annually. These increases would only increase as the number of manfacturers and drugs in the program increase and would be largely dependent on the rate of denials we would be addressing monthly. Staffing Impacts Under a Potential 340B Rebate Program. Jackson Hospital and Clinic does not currently have the staff needed to comply with a Rebate Program. We estimate the need for an additional two FTEs to analyze submission, track rebates, refile denials and reconcile deposits. These would be required to ensure we are seeing the maximum benefit from the program. All additional resources taken away from direct patient care. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Jackson Hospital and Clinic has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We anticipate additional cost averaging 15K up front cost to establish interfaces between our medical records and the manufacturers chosen platforms. We also anticipate as additional drugs are added a 15-20K change fee for these interfaces with each additional drug and platform. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. While traditional 340B eligibility checks would remain, additional oversight would be needed to ensure the data is submitted in a correct and timely manner. Additional staff would have to reconcile the claims with the rebates, ensure deposits were made 2 completely and correctly, and chase down any denials. Also, this will likely cause an increase the the number of federal employees responsible so settling disputes for the denials. As we have seen with insurance, denials will occur. For retail scenarios this isn't a huge lift; however, this will completely rewrite the way data is gathered from medical claims. most entities gather data by dispense date or administered date based on the patient's status at that time. The transactions are sent off the next day if using a flat file, or in real time is using HL7. If waiting until the claim is billed is a requirement, then the length of stay determines when an entity can recoup their savings via rebate. This opens entities up to greater financial stress because those subject to the GPO Prohibition would also have to wait for the inpatients who have a much greater length of stay (sometimes exceeding a year) to be discharged and billed. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Jackson Hospital and Clinic to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Currently our hospital in in the process of a bankruptcy and trying desperately to emerge from and continue to provide care for our community. o At this time our cash flow is very tight and any delay in discounts or paying upfront for WAC will significantly impact on our long term viability. o Any disruption in our cash flow puts at grave risk for missing payroll as we are operating with less than 4 days cash on hand and backed by a debtor in possession loan. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Jackson Hospital and Clinic reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount 3 model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Currently the savings from 340B is crucial for our survival. Without 340B this facility will close for certain. There is NOT a financial path forward without it and any delay in discounts will be catastrophic and force a closure for sure. For all of these reasons, Jackson Hospital and Clinic respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to rnove forward with this ill-conceived effort, it must allow Jackson Hospital and Clinic and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider irnportant aspects of the problem. We appreciate your consideration of these comments and Iook forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Since ely, Thomas H. Cobb, Pharm.D., ACE AVP- Pharmacy Services/Chief Compliance Officer Jackson Hospital and Clinic, Montgoniery, AL 36106 4
HRSA-2026-0001-1586Anonymous Anonymous2026-04-16T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1587Dan A · United States2026-04-16T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1588VALLEY FAMILY HEALTH CARE2026-04-16T04:00Z43,553 chars
See attached file(s) VALLEY Farnily Health Care April 10, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Family Health Care (VFHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: VFHC anticipates a loss of $100,000 to $150,000 from entity-owned pharmacy operations and 5% reductions in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. VFHC is a federally qualified health center serving Idaho and Oregon. We serve over 24,000 patients, and in many of the communities we serve, we are the only medical clinic. Our mission is "To provide high-quality, patient-centered healthcare services to satisfy the primary care needs of our community members, and to assure access to care for all." We utilize the 340b program every day to help us achieve that mission. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For VFHC in particular, this means it will impact: Manually working through 28,000 prescriptions, with the potential to impact our over 24,000 patients. Additional need for administrative support, moving the savings from patient support to administrative tasks. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. haps:8 \\ .allajournals.om/cloi/pill/ I O. I 161 /e ireu la tionaha. l 23.065718 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. IMPS:// \ 11 11.sainlIsa.aoviclata/clata- c-collcci/risclulmmtional-sun c\ dru2.-use-ancl-health/limionar-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: VFHC provided $166,700 in medications discounts paid by VFHC; additionally, we saved our patients $3,527,000 off the retail cost in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: VFHC anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Valley Family Health Care anticipates an increase of $60,000 per year in additional fees to support the management of the rebates through external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 4 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 0ne midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate an additional employment expense of 125,000 for Valley Family Health Care. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate 10 hours of work each week to report the claims, and 40-50 hours per week auditing, tracking, and managing in house and contract pharmacy will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. VFHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that adoption of programs will cost $10,000-$15,000, simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 24,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at over $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and 7 Internal NACHC assessment (99 responses). Ibid. 5 Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our electronic system will require manual review and submission of rebates and tracking. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15-20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 68 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all the different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in rural Idaho and Oregon with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to klentilv Pharmacy Deserts .,ind Keystone Pharmacies I Pharmacy and Clinical Pharmacolm2v JAMA Network Onen I JAMA Network 1 htlos://www,healthalThirs.orv/doi/abs/10, I 377/hltholi2024.001927imminICode- hall' 11 Internal NACHC survey data 6 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient' s medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. VFHC currently discounts all of its services on a sliding fee scale, including Pharmacy, Medical, Dental, Behavioral Health, and Pharmacy services 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. htli), ://hplIc.hrsn.iii) v/conipliduccicompl inlIce- monuolichopicl.9// 1.00111Oc I (i 7 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days)." Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14111117S1/(211 I IN'Clliled I I I.00/11101.,/Vear-Cilli-illItillletiti-ileHitil-Cileek-keV-IIICIFICS-C1TIA'-Oildrillae \'-O\111er-S1111(11(1-1VVIC \ 15 hilllti://1,10111) 1 i I 8 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost an increase of $ 2,018,000 in upfront drug costs in first year to purchase these 10 drugs under the proposed rebate model. This represents a 68% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, VFHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as reducing services including care coordination, community health workers, overall scope of services and other services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund clinical staff that can improve the lives and health of our patients. Patient Financial Assistance: 0ur ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 5,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 16 11-111',1\i11111111-rdir-PriceS-tild(111C/111,/11) 9 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. VFHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, VFHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 304,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. VFHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $168,250. That number is projected to rise as our volume grows and manufacturers seek to increase that program. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to use our financial reserves, potentially putting other programs in the organization at risk. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on VFHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays VFHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously 10 proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions:17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) lillhs://www.li:dcrcilrr$dsier,12,ov/doctlincins/2025/08/01/2025- I Llo I 9/34-0h-prPrmil-nolicc-appl ic:11 ion-proccss-ror-1 lie-3401)- lol-1)1Vi.'1'11111 11 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 12 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion VFHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law VFHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. VFHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ben Murray, Chief Operating Officer, bmurray@vflic.org. Sincerely, Ken Hart VALLEY FAMILY HEALTH CARE 13
HRSA-2026-0001-1589(no commenter metadata)2026-04-16T04:00Z45,064 chars
I am writing to urge you to protect and strengthen the 340B Drug Pricing Program for community health centers. The 340B program is essential to ensuring that un- and underinsured patients can afford the medications they need. At our health center in 2025, patients paid an average of just $18.40 per prescription because of 340B. Without the program, those same prescriptions would have cost an average of $350.00. For many of our patients, this is the difference between taking their medication and going without it. The savings generated through 340B are reinvested directly back into patient care and other services that improve health outcomes. Any reductions to or restrictions on the 340B program would directly harm the patients and families who rely on community health centers for health care. I respectfully ask that you oppose efforts to weaken the 340B program and instead support policies that preserve and strengthen it. April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Noble Community Clinics, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Noble Community Clinics is a nonprofit network of Federally Qualified Health Centers formed through the recent integration of Lakeshore Community Health Care and Noble Community Clinics. The organization provides comprehensive, affordable care, including medical, dental, and behavioral health services, regardless of ability to pay, while advancing health equity and expanding access to care across east-central and central Wisconsin. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Noble Community Clinics in particular, this means it will impact: 32,655 Patients served in 2025 and 55,861 prescriptions filled Currently, admin costs for the 340B program is 500 hours The savings generated through 340B are reinvested directly into patient care. o Pharmacy operating expenses and patient care services such as vials labels, adherence packaging equipment and services, translation services, medication assistance programs, free medication delivery and mail order, free glucometers. These expenses amount to $411,000 annually. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Noble Community Clinics provided 5,209 patients (16%) sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Noble Community Clinics anticipates needing 40 staff hours/week (approx. $175,000 annually) to administer a rebate program, or one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Noble Community Clinics anticipates an increase of drug costs to explode from $5,800/month to $140,000/month, in addition to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 . Our staff have already spent 500+ hours navigating proposed manufacturer restrictions. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Noble Community Clinic projects 40 staff hours/week (approx. $175,000 annually) will be needed to administer a rebate program. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. It is anticipated 95 140 hours annually will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Noble Community Clinics urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 40,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,785,400 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that rely on Third-Party Administrators (TPAs) to aggregate claims and manage manufacturer rebate submissions, our in-house pharmacy operates on OCHIN Epic Willow and does not utilize a TPA. Willow is optimized 7 Internal NACHC assessment (99 responses). 8 Ibid. for dispensing and billing, not manufacturer rebate workflows, and currently lacks native functionality to identify rebate-eligible claims, carve out uninsured prescriptions, transmit required rebate data elements, manage reversals, or perform manufacturer-specific reconciliation. Any rebate model would therefore necessitate custom reporting logic, data extraction, manual validation, and ongoing IT build and maintenance, creating significant operational and technical complexity. This burden is compounded by the fact that approximately 16% of our pharmacy patients are uninsured, requiring precise separation of 340B, non-340B, insured, and uninsured claims to avoid diversion risk and financial loss functionality that would otherwise be handled by a TPA in a contract pharmacy model. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 1 contract pharmacy pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across four different entity-owned pharmacy locations and one contract pharmacy to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 15 counties in east-central and central Wisconsin with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 health care services, including medications, based on a patients income and family size. Noble Community Clinics includes medication costs in our sliding fee scale. In 2025, the 340B program made medications affordable for un- and underinsured patients, reducing the average prescription cost from $350 to just $18.40. This dramatic savings helps ensure patients can access and stay on the medications they need to be well. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $134,200 more per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $5,800 per month purchase these same drugs at the 340B ceiling price. This represents a 2314% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Noble Community Clinics anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as free prescription mail order, free prescription delivery, and free medication adherence packaging. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents over 5,200 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Noble Community Clinics asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Noble Community Clinics estimates its 2027 Annual Rebate Opportunity Cost to be approximately $100,000 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Noble Community Clinics estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $134,200. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to need $995,000 in additional credit with our pharmaceutical wholesaler. We simply cannot afford to pay these costs up front and will be subject to 12% interest. This is not a sustainable solution; the interest costs alone are estimated to be $119,400 annually. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Noble Community Clinics, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Noble Community Clinics urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $70,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Noble Community Clinics strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Noble Community Clinics believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Noble Community Clinics appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kristin Stearns at Kristin.Stearns@nobleclinics.org Sincerely, Kristin Stearns President Noble Community Clinics
HRSA-2026-0001-1590CommonSpirit Health2026-04-16T04:00Z6,713 chars
Comments from Longmont United Hospital, Longmont, CO Longmont United Hospital 1950 Mountain View Avenue Longmont, CO 80501 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Longmont United Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Longmont United Hospital was organized in 1955 by a group of business leaders and physicians with the express purpose of establishing a community hospital for the care and treatment of the sick. The citizens of the community raised the necessary funds to construct the hospital and it opened in 1959 with 50 beds and 19 physicians. Currently, the hospital has 186 beds and a level III, 24-hour emergency department and is proud to be part of a CommonSpirit. As a safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Longmont United that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Longmont United relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340b program is a critical lever we have given the significant number of self-pay patients our hospital serves. The 340b program helps ensure that these patients have the care they need in the community in which they reside. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Debra Mohesky MBA, MS, ACPEC, BCC, FACHE Hospital President Longmont United Hospital, Longmont CO As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1591Elaine Ealy · Louisville, KY, United States2026-04-16T04:00Z1,795 chars
See attached file(s) RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Elaine Ealy, RN Iroquois Nursing Supervisor / Family Health Centers Louisville
HRSA-2026-0001-1592Woodland Memorial Hospital2026-04-16T04:00Z5,890 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Woodland Memorial Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Woodland Memorial Hospital that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Woodland Memorial Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Gena Bravo President/CEO Woodland Memorial Hospital Woodland, CA Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1593Vanderbilt Health2026-04-16T04:00Z16,035 chars
Please see the attached public comment on behalf of Vanderbilt Health 1161 21st Ave South D3300 Medical Center North Nashville, TN 37232-2104 April 17, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Mail Stop 10W29 Rockville, MD 20857 Submitted electronically via regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Director Britton: On behalf of Vanderbilt Health, thank you for the opportunity to provide stakeholder feedback on the 340B Rebate Model Pilot Program (Rebate Model) under consideration by the Health Resources and Services Administration (HRSA). We are grateful for your careful attention to the feedback provided from impacted Covered Entities. As proposed, the Rebate Model would place substantial administrative burdens on Covered Entities and enable manufacturers to establish unilateral and unlawful policy changes to the 340B drug discount program. Our concern is real as we have already incurred significant costs and expended resources to prepare for a previous version of the Rebate Model that was originally set for a January 2026 implementation, but was ultimately abandoned. In reviewing this earlier version of the Rebate Model, the U.S. District Court of Maine agreed with this assessment. Justice Walkers order to enjoin stated that the Rebate Model would cause irreparable harm to 340B Covered Entities and failed to account for 30 years of reliance interests in the existing program structure1. Thus, if implemented, a Rebate Model would substantially divert resources that would otherwise improve access to and the quality of healthcare for patients. We believe the stated rationale for a Rebate Model, from both manufacturers and HRSA, is flawed; as described below, alternate mechanisms can ensure Covered Entities do not receive duplicate discounts on 340B-eligible medications. Our comments herein highlight reasons why HRSA should withdraw the Rebate Model, or at a minimum make substantial changes to prevent violations of the 340B statute (42 C.F.R. 10) that financially benefit manufacturers to the detriment of patients and Covered Entities. 1 American Hospital Association, et al v. Sec. Kennedy (U.S. District Court of Maine December 29, 2025), https://communication.bakerdonelson.com/28/6703/uploads/american-hospital-association-2025.12.29-order-on- motion-for-preliminary-injunction.pdf. I. Background on Vanderbilt Health Vanderbilt Health, a brand name of Vanderbilt University Medical Center, is a comprehensive research, teaching, and patient care system headquartered in Nashville, Tennessee. Vanderbilt Health operates three inpatient facilitiesVanderbilt University Hospital, the Monroe Carell Jr. Childrens Hospital at Vanderbilt, and Vanderbilt Psychiatric Hospitalas constituent parts of its flagship campus. In addition, Vanderbilt Health operates four regional hospitals, over 180 clinics throughout Tennessee and neighboring states, six surgery centers, and joint ventures that include the Vanderbilt Stallworth Rehabilitation Hospital. In the fiscal year ending June 30, 2025, Vanderbilt Healths approximately 43,000 employees provided 3.3 million clinic visits, 213,000 emergency department visits, 280,000 telehealth appointments, and treated 83,000 inpatients. Additionally, Vanderbilt Health provides over $1 billion in annual charity care and other community benefits. II. Costs to Covered Entities are significantly underestimated, including for costs already incurred by Vanderbilt Health HRSA significantly underestimates the labor and other costs needed for Covered Entities to comply with a Rebate Model. In the Information Collection Request (ICR) published on February 26, 20262, HRSA asserted that: OPA expects that data submitted by Covered Entities to manufacturers will be comparable to data already being collected and maintained by Covered Entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant. Vanderbilt Healths experience has differed significantly from these assertions. Vanderbilt Health has already incurred a start-up cost for a new vendor contract of more than $250,000 as well as over 500 staff hours to prepare for the previously announced and withdrawn Rebate Model and the Inflation Reduction Act (IRA) Medicare Transaction Facilitator (MTF). A new contract with a third-party vendor was necessary to manage reconciliation between PBM claims data, manufacturers, third-party administrators and ultimately payment to Vanderbilt Health from manufacturers. These costs would escalate if a Rebate Model were to be imposed. However, HRSA does not provide adequate details on the design of a new Rebate Model to enable us to provide accurate estimates of burdens and costs. The following estimates assume a new Rebate Model would resemble the previously proposed and abandoned model, but HRSA does not explicitly state this in the RFI. Our best projection of ongoing annual administrative costs associated with a Rebate Model, including contracted vendor expenses, would be $500,000. Anticipated 2 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906- NEW, Federal Register, February 26, 2026, https://www.federalregister.gov/documents/2026/02/26/2026- 03833/agency-information-collection-activities-proposed-collection-public-comment-request-information. ongoing costs would include hiring six (6) FTEs to track 340B rebates, appeal inappropriate manufacturer denials, and work with vendors to facilitate data submission. The February 2026 ICR estimated that Covered Entities would experience an average weekly burden of five (5) hours of staff labor to comply with the Rebate Model. Our projection of hiring six (6) new full-time employees equates to a weekly burden of 240 hours, or 48 times greater than HRSAs estimate for ongoing burdens on Covered Entities. Expanding the Rebate Model from 10 drugs to 25 would increase the above estimated costs considerably. Furthermore, the above administrative costs do not account for increased upfront cash payments Covered Entities must pay to acquire drugs, which are greater than the 340B ceiling price. This has the effect of providing interest-free loans to manufacturers and ties up critical resources that would otherwise be available under the 340B upfront discount program to support patient care. As further detailed below, we are concerned manufacturers will add additional administrative burden for Covered Entities as intentional friction, used to inappropriately delay or deny 340B discounts owed to Covered Entities. In the absence of guardrails on implementation changes unilaterally initiated by manufacturers, the true ongoing cost of complying with a Rebate Model is impossible to estimate. III. Mechanisms exist to avoid duplicate discounts between 340B and IRA Inclusion of a 340B modifier on a claim provides manufacturers information to avoid duplicate discounts. This process is widely required and accepted by state Medicaid agencies and should be sufficient to satisfy concerns about duplicate discounts. Johnson & Johnson also requested Covered Entities provide the 340B modifier on their two IRA drugs to communicate 340B status3. We urge HRSA to withdraw plans for a Rebate Model given the availability of less burdensome tools to prevent duplication of discounts. IV. Evidence of manufacturer overreach in mandated data requests The MTF system was launched to assist with rebating eligible claims for drugs with the Medicare- negotiated maximum fair price (MFP) under the IRA. Vanderbilt Healths early data from the MTF process indicates a 30% error rate from the third-party administrator matching 340B claims to potential IRA rebates, primarily overpayments requiring deduplication. These errors from the third-party administrator require Covered Entities to expend resources to login and click a 340B flag that then results in the deduplication of the discount. We do not believe it was intended that Covered Entities would use the third-party administrators platform in this fashion to inform manufacturers of duplication, especially at such a high error rate. In many cases, where Vanderbilt Health was not paid an IRA rebate it was entitled to receive, Vanderbilt Health was then directed, based on some manufacturer policies, to log into yet another third- party system to provide claim level detail for 340B eligible transactions to purportedly support manufacturer payments of non-340B, IRA-eligible rebates. 3 JJ Maximum Fair Price (MFP) Implementation Plan for IPAY 2026, accessed April 13, 2026, https://www.jnj.com/innovativemedicine/us/download/JJ%20Maximum%20Fair%20Price%20(MFP)%20Implemen tation%20Plan%20for%20IPAY%202026.pdf. Manufacturers appear to be exploiting the system described above to obtain 340B dispense data, and not to validate that an IRA rebate was owed to a provider. As of April 15, 2026, Vanderbilt Health has yet to secure rebates on disputed transactions by manufacturers due to the volume of transactions, navigating multiple third-party platforms, and additional manual work required for providing data unrelated to IRA-eligible rebates. The friction and additional administrative burdens experienced in the MTF process highlight how manufacturer-controlled third-party administrators add administrative burdens for Covered Entities and delay issuance of owed rebates. We are concerned these issues would be replicated in a Rebate Model if the third-party administrators are controlled by manufacturers. V. Manufacturer control of Rebate Model reporting systems creates conflicts of interest and would result in increased burden on Covered Entities Manufacturer-controlled third-party administrators have a financial incentive to make the process of obtaining rebates and discounts as burdensome as possible for Covered Entities. As long as manufacturers control, either by ownership or contract, the platform on which transactions process, they can unilaterally and unnecessarily create additional work and apply their own interpretations of claim eligibility for discounts and rebates, without regard to compliance with applicable statutes. As described above, manufacturers currently control the third-party platforms for IRA rebates. Manufacturers controlling third-party platforms for a 340B Rebate Model would not be sustainable, especially as manufacturers implement multiple new platforms. Essentially, we are concerned that a manufacturer-controlled Rebate Model would result in numerous different, and continually evolving, sets of rules for Covered Entities to navigate in order to obtain 340B discounts. As described above, third-party administrators for IRA-eligible rebates require Covered Entities to navigate in and out of various systems, which creates friction and prevents efficiently appealing inappropriate denials. At manufacturers request, the third-party administrator quickly created the ability to flag claims for 340B deduplication that required Covered Entities to manually check a box. However, when Covered Entities expressed concern about appealing denied IRA rebates, the third-party administrator required Covered Entities to navigate a separate third-party system to report unrelated claim information. It appears this appeal process was unilaterally developed without input from Covered Entities. These issues highlight how manufacturer-controlled third-party administrators are not independent actors and have acted in the interest of manufacturers in handling both deduplication logic and Covered Entity requests for IRA rebate appeals; both changes resulted in additional burden on Covered Entities. These examples of conflicts of interest demonstrate how manufacturer-controlled third-party administrators could place additional burdens on Covered Entities well beyond those contemplated by Congress in the 340B statute. VI. Alternatives and methods to reduce burden on Covered Entities Government-operated clearinghouse Should a Rebate Model advance and require a third-party administrator, we urge HRSA to establish a neutral, government-operated clearinghouse that appropriately weighs the effort required of both manufacturers and Covered Entities, including dispute resolution. Vanderbilt Health would welcome streamlined data submission requirements, standardization of bulk appeal processes with appropriate government oversight, and other guardrails. Appropriate Notice and Comment Opportunities If a Rebate Model advances, to prevent unilateral changes from manufacturers, all requested data submission or other administrative requirements for Covered Entities should be required to go through formal federal rulemaking notice and comment processes. Use of Claims Modifiers Another impactful guardrail would be to require manufacturers to respect the use of 340B modifiers on claims when modifiers are submitted by Covered Entities. Manufacturers should also be required to provide succinct information on why they disagree with the presence or absence of a 340B modifier on a claim-by- claim basis. Transaction Fees Additionally, we recommend HRSA obtain fees from manufacturers to be paid to Covered Entities for each transaction Covered Entities are required to submit to third-party systems. If Covered Entities are truly meant to be held harmless from a cost perspective, costs of compliance with these new manufacturer- inflicted requirements should be borne by the manufacturers. VII. Conclusion As currently proposed, the Rebate Model poses substantial financial and administrative burdens to Covered Entities. Reliance on manufacturer-controlled third-party administrators for the Rebate Model would create conflicts of interest, whereby manufacturers can unilaterally alter processes and establish new requirements to their own financial benefit at the detriment of patients and Covered Entities. Existing mechanisms can identify 340B claims and ensure deduplication of other discounts, and, thus, we believe the burdens of a Rebate Model would not provide meaningful benefits to the American people. Therefore, we urge HRSA to withdraw plans to advance a Rebate Model and instead work to ensure manufacturers accept 340B claim modifiers or alternative tools. If a Rebate Model does advance, we encourage the establishment of guardrails including: government operation of the third-party administrator, subjecting all data submission and other administrative requirements to federal notice and comment processes, and obtaining fees from manufacturers to offset costs incurred by Covered Entities to obtain all discounts and rebates obligated by statute. The 340B drug discount program provides critical support for not-for-profit safety net hospitals, which disproportionately deliver high-quality care for Medicaid and Medicare beneficiaries as well as uninsured patients. Thank you for considering the above feedback. If we can provide any additional assistance to HRSA on these matters, please contact Nicholas Warren, PhD, of the Vanderbilt Health Office of Federal Relations at nicholas.warren@vumc.org. Sincerely, Jane Freedman, MD Deputy CEO and Chief Health System Officer Vanderbilt Health
HRSA-2026-0001-1594Thrive Alabama2026-04-16T04:00Z216,688 chars
See attached file(s) April 9th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of AIDS Action Coalition of Huntsville dba Thrive Alabama I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss 3.4 Million Dollars for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Thrive Alabama in particular, this means it will impact: 10,706 transactions $3,464,414.82 in current 340B Administrative costs Premium assistance, co-pay assistance, transportation, staffing, facilities. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description 5 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Thrive Alabama provided $456,282 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Thrive Alabama anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Thrive Alabama anticipates an increase of $150,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Thrive Alabama has noted that we will need at least 1 to 2 more FTEs in order to sufficiently keep up with the 340B reporting demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Thrive Alabama, this would be approximately $150,000 to accommodate the workforce impact this would bring. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 systems to manage and report the same data, thereby increasing costs and operational burdens. Thrive Alabama urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $45,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,841 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We recently started our own entity owned pharmacy (Thrive Alabama Pharmacy) and will have work through the work flow to ensure that proper claims are being submitted for the rebate model. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools which are approximately $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 to 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 133 pharmacies to increase access to affordable medications. 7 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 133 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in North Alabama with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Currently we have patients that utilize our in house pharmacy and on the sliding fee scale able to get discounted medications. We also offer copay assistance for anyone regardless which pharmacy they use. If this rebate model comes to fruition, this will be harder to do for our patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $50,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $33,000 to purchase these same drugs at the 340B ceiling price. This represents a 151% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Thrive Alabama anticipates needing to reduce: Operating Hours: We anticipate needing to reduce our clinic hours by 5 per week, specifically impacting our diverse patient population that may not be able to visit the clinic during certain hours of the day. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Health consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 974 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Thrive Alabama asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal 11 resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to use financial reserves. This is not a sustainable solution;. In our region, where patients have no choice but to rely on Thrive Alabama, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Thrive Alabama urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 loss of $7,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the 13 statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 14 OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. 15 D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 17 objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 18 CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 19 demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 20 under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 21 entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. In the state of Alabama, all Medicaid plans are excluded from 340B program. 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 22 For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims 36 C.F.R. 447.518(a). 23 Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 24 Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 25 Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 26 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. 44 32 C.F.R. 199.21(q)(2)(iii)(E) 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 27 That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 28 statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 29 Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 30 A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. 31 o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). 32 o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Thrive Alabama strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Thrive Alabama believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Thrive Alabama appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Stephanie Harville at sharville@thrivealabama.com. Sincerely, Mary Elizabeth Marr CEO Thrive Alabama April 9th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of AIDS Action Coalition of Huntsville dba Thrive Alabama I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss 3.4 Million Dollars for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Thrive Alabama in particular, this means it will impact: 10,706 transactions $3,464,414.82 in current 340B Administrative costs Premium assistance, co-pay assistance, transportation, staffing, facilities. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Thrive Alabama provided $456,282 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Thrive Alabama anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Thrive Alabama anticipates an increase of $150,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Thrive Alabama has noted that we will need at least 1 to 2 more FTEs in order to sufficiently keep up with the 340B reporting demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Thrive Alabama, this would be approximately $150,000 to accommodate the workforce impact this would bring. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Thrive Alabama urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $45,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,841 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We recently started our own entity owned pharmacy (Thrive Alabama Pharmacy) and will have work through the work flow to ensure that proper claims are being submitted for the rebate model. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools which are approximately $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 to 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 133 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 133 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in North Alabama with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Currently we have patients that utilize our in house pharmacy and on the sliding fee scale able to get discounted medications. We also offer copay assistance for anyone regardless which pharmacy they use. If this rebate model comes to fruition, this will be harder to do for our patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $50,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $33,000 to purchase these same drugs at the 340B ceiling price. This represents a 151% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Thrive Alabama anticipates needing to reduce: Operating Hours: We anticipate needing to reduce our clinic hours by 5 per week, specifically impacting our diverse patient population that may not be able to visit the clinic during certain hours of the day. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Health consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 974 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Thrive Alabama asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to use financial reserves. This is not a sustainable solution;. In our region, where patients have no choice but to rely on Thrive Alabama, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Thrive Alabama urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $7,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. The 340B Rebate Models Incompatibility with Deduplication Efforts Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. In the state of Alabama, all Medicaid plans are excluded from 340B program. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data. This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Thrive Alabama strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Thrive Alabama believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Thrive Alabama appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Stephanie Harville at sharville@thrivealabama.com. Sincerely, Mary Elizabeth Marr CEO Thrive Alabama
HRSA-2026-0001-1595HealthSource of Ohio Inc.2026-04-16T04:00Z44,433 chars
See attached file(s) April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of HealthSource of Ohio, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: HealthSource of Ohio anticipates losses ranging from approximately $1.8 million to more than $3.0 million across entity owned pharmacy operations and contract pharmacy arrangements. This projected impact is attributable to the proposed rebate model incorporating Maximum Fair Pricing, which would materially increase upfront drug acquisition costs and introduce operational challenges, including rebate denials, added administrative burden, additional staffing requirements, and reliance on manual claims reconciliation processes. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Healthsource of Ohio (HSO) is a Federally Qualified Health Care center (FQHC) located in Cincinnati, Ohio. We operate 25 centers, have 386 full-time employees, and served approximately 60,419 patients in 2025 with 207,756 visits. HSO offers the following primary care services: Family Medicine, Pediatrics, Ob/Gyn, Optical, School Based Health, Dentistry, Behavioral Health, and Pharmacy to communities in southwest Ohio. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For HealthSource of Ohio in particular, this means it will: Impact over 21,800 patients Increase administrative costs by more than $100,000 Likely to lead to reduced service offerings. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: HealthSource of Ohio provided greater than $290,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: HealthSource of Ohio anticipates needing 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, HealthSource of Ohio anticipates an increase of approximately $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 HealthSource of Ohio estimates it will need at minimum 1 additional FTE for reporting and monitoring 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. HealthSource of Ohio estimates the additional staff will cost between $50,000 - $100,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. HealthSource of Ohio estimates that an additional 10 to 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthSource of Ohio urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 60,419 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at more than $5,500,580 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 to 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with more than one hundred pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across more than 100 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in rural southern Ohio Appalachian counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSA FAQ 8 drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $4,762,949 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $7,981 annually to purchase these same drugs at the 340B ceiling price. This represents a 59,581% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HealthSource of Ohio anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we could be forced to scale back non-revenue-generating but essential services, such as chronic care management, food insecurity, and diabetic education as well as mobile dental and vision services within our local, rural schools. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Operating Hours: We are in jeopardy of reducing clinic hours, particularly patient convenience hours (evenings and weekend which are oftentimes the only times our working class and agricultural patients can seek care without losing wages]. Workforce & Staffing: The administrative burden of this pilot could require us to divert funds away from clinical staff. For every Rebate Coordinator we could be forced to hire, we lose the ability to fund a much-needed clinical support worker. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, it could prevent us from providing the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HealthSource of Ohio asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HealthSource of Ohio estimates its 2027 Annual Rebate Opportunity Cost to be approximately $737,632. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HealthSource of Ohio estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $397,000. In 2027, with the additional 15 rebate drugs, our monthly drug spend will increase by $736,000, and in 2028 with the addition of another 15 drugs, our monthly increase in drug spend would be over $880,500. 11 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves funds that are currently dedicated to hiring new clinicians and expanding services such as school-based health and mobile dental and vision. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on HealthSource of Ohio, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays HealthSource of Ohio urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of over $700,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 13 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthSource of Ohio strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthSource of Ohio believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 HealthSource of Ohio appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Sam Rotunna, Chief Pharmacy Officer at srotunna@hsohio.org. Sincerely, Jody, Prather, MD President & CEO HealthSource of Ohio
HRSA-2026-0001-1596CHI Oakes Hospital2026-04-16T04:00Z5,959 chars
See attached file(s) '1kt all Oakes 1200 N 7th St Hospital Oakes, ND 58474-2502 imagine better health. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Oakes Community Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for deFades, unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Oakes Community Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Oakes Community Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies wili have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute, Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 3408 tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This wili be a significant cost to our heafth system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Si er ly, R becca Bleese President, CHI Oakes Community Hospital CHI Oakes Community Hospital Apr 20, 2026 CommonSpirtt Health HHS Docket No. HRSA-2026-03042 Oakes, ND CommonSpirit As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patent encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1597(no commenter metadata)2026-04-16T04:00Z1,700 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Julie Meiman, FHC Chief HR Officer
HRSA-2026-0001-1598(no commenter metadata)2026-04-16T04:00Z7,182 chars
See attached file(s) FAIHP Fresno American ndian Health Project c April 16, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via: https://www.regulations.gov RE: HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, On behalf of Fresno American Indian Health Project (FAIHP), I respectfully submit the following comments in response to the Health Resources and Services Administration's (HRSA) February 17, 2026, Federal Register notice regarding the 340B Rebate Model Pilot Program (the "Program"). Background Fresno American Indian Health Project (FAIHP) is an Indian Health Service (IHS) funded Urban Indian Organization (UIO) serving American Indian and Alaska Native individuals and families in Fresno County, California, and surrounding regions. FAIHP provides a comprehensive continuum of care, including primary care, behavioral health services, substance use treatment, traditional healing, and community- based programming rooted in culturally responsive practices. Comment FAIHP appreciates the opportunity to provide input on the proposed 340B Rebate Program and acknowledges HRSA's extension of the public comment period. While we recognize the intent to improve program integrity, we are deeply concerned that the proposed rebate model would impose significant administrative and financial burdens on Indian Health Care Providers (IHCPs), including UlOs, and would ultimately create new barriers to accessing essential medications for American Indian and Alaska Native patients. The federal government carries a trust responsibility to ensure access to health care for American Indian and Alaska Native people, regardless of geographic location, and relies on UlOs such as FAIHP to fulfill this obligation in urban settings. Any changes to the 340B Program must be carefully evaluated in light of this responsibility and the potential downstream impact on patient care. FAIHP participates in the 340B Drug Pricing Program, including through contract pharmacy arrangements that are essential to expanding access to medications for our patients. Serving a geographically dispersed population, these partnerships allow us to extend pharmacy access beyond our clinic and reduce barriers such as transportation and limited pharmacy availability. Through the 340B 1551 E. Shaw Ave. Ste. 139 Fresno, California 93710 Phone: 559.320.0490 Fax: 559.320.0494 www.faihp.org Program, FAIHP reinvests savings into critical services, including behavioral health, care coordination, traditional healing, and programs that address the social drivers of health, thereby strengthening the overall health system for the community we serve. Accordingly, we respectfully offer the following recommendations: Exempt IHCPs from HRSA's 340B Rebate Program Meaningfully engage with UlOs through formal Urban Confer or UIO listening sessions Exempt IHCPs from the 340B Rebate Program FAIHP strongly urges HRSA to exempt Indian Health Care Providers from participation in the 340B Rebate Program. This request aligns with recommendations from the HHS Secretary's Tribal Advisory Committee (STAC) and the Centers for Medicare & Medicaid Services (CMS) Tribal Technical Advisory Group. The proposed rebate model fundamentally alters the structure of the 340B Program by requiring providers to purchase medications at full cost and seek reimbursement later. For UlOs operating with limited financial reserves, this shift presents a significant and untenable burden. For FAIHP, a rebate-based model would require substantial upfront expenditures for medications, creating serious cash flow challenges and financial uncertainty. This could limit our ability to procure high-cost medications, sustain current service levels, and maintain vital contract pharmacy partnerships. Delays or inconsistencies in rebate payments would further exacerbate these challenges, placing additional strain on already limited resources. Even temporary delays in rebate payments may significantly strain operating budgets. Equally concerning is the increased administrative complexity introduced by the proposed model. Transitioning to a rebate-based system would require new billing, tracking, and reconciliation processes, increasing operational demands on our staff. For an organization like FAIHP, this would require either additional staffing or diverting existing personnel from direct patient care, both of which would negatively impact service delivery. Taken together, these financial and administrative pressures threaten the sustainability of our pharmacy operations and risk limiting access to life-saving medications for the American Indian and Alaska Native patients we serve. Even temporary disruptions in access can have serious health consequences for our community. Given the federal government's trust responsibility to ensure the highest possible health status for American Indian and Alaska Native people, it is imperative that IHCPs be explicitly exempted from the proposed rebate model. Without such an exemption, the Program would undermine the very systems designed to uphold this obligation. Meaningfully Engage with UlOs FAIHP respectfully requests that HRSA engage in meaningful consultation with Urban Indian Organizations through formal Urban Confer processes or dedicated UlO listening sessions. These engagement mechanisms are well-established and grounded in principles of trust, respect, and shared responsibility. We encourage HRSA to partner with the Indian Health Service to facilitate these discussions and ensure that the voices of UlOs are fully incorporated into policy development. Meaningful engagement will allow HRSA to better understand the operational realities and patient impacts associated with the proposed Program. We also reaffirm our strong support for Tribal sovereignty and the government-to-government relationship between Tribal Nations and the United States. Our request for engagement is intended to ensure that HRSA has the information and technical expertise necessary to make informed decisions that support, rather than hinder, care for urban American Indian and Alaska Native communities. Conclusion FAIHP appreciates the opportunity to provide these comments and strongly urges HRSA to exempt Indian Health Care Providers, including Urban Indian Organizations, from the 340B Rebate Model Pilot Program. The 340B Program is a critical lifeline that enables organizations like FAIHP to deliver comprehensive, culturally responsive care to underserved communities. Any changes that introduce financial instability or operational barriers risk undermining access to essential medications and services. We respectfully urge HRSA to protect the integrity of the 340B Program and uphold the federal trust responsibility by ensuring that IHCPs are not subject to the proposed rebate model. Sincerely, Selina De La Perla, MBA Chief Executive Officer Fresno American Indian Health Project (FAIHP)
HRSA-2026-0001-1599Mountain Community Health Partnership FQHC2026-04-16T04:00Z112,169 chars
See attached file(s) Nito AMCHP MOUNTAIN COMMUNITY HEALTH PARTNERSHIP April 20th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountain Community Health Partnership (MCHP), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For MCHP, in particular, the proposed changes will have substantial operational and financial consequences. Specifically, they will impact our 35,000 340B contract pharmacy transactions and 11,497 patients annually. At present, MCHP incurs approximately $3.9 million in annual contract pharmacy administrative costs. Under a rebate pilot model, these expenses are expected to increase markedly, placing additional strain on already limited resources. 340B program savings currently comprise approximately 40% of MCHP's annual operating budget. These funds are essential to maintaining critical services for our community, including our community health worker program, clinical pharmacy services, and other high-impact initiatives that directly support vulnerable populations. Any reduction in these savings would jeopardize the sustainability of our organization and, in turn, the health outcomes of the patients who rely on us. Compounding these challenges, the implementation of the rebate pilot coincides with the planned opening of MCHP's first entity-owned pharmacy. While this investment reflects our commitment to expanding access to care in a medically underserved area, the additional administrative and financial burden introduced by the pilot may significantly hinder our ability to achieve this goal. Rather than strengthening access, these changes risk constraining our capacity to serve those most in need. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life? Impairing access to these drugs could result in exacerbation of the mental health crisis. I Richard P. Ku L. Dor A. Tan E. Shin P. Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar:35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F. et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep:19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704: PMCID: PMC8390436. 3 Packer. M.. et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. hltps: %s.ahaioilrnals.ori! dui ndlY I 0.1161 circulationalm.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (FIFIS Publication No. PEP25-07-007, NSDUE1 Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. buns:. %% %%.salubsa.eok )data daitt-vk e-colleci osduh-nalional-sur% nai iomil-relcuses 5 Hauser RA. et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year. Open-Label Extension Study. Front Neurol. 2022 Feb 23:13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262: PMCID: PMC8906841. :3 federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only afier such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity , not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.'6 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs qfter the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program.")7And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 56 42 U.S.C. 256b(a)(5)(B) 57 Notice Regarding Section 602 athe Veterans Health Care Act of 1992 Patient and Entity Eligibility. 61 Fed. Reg. 55.156. 55.157 (Oct. 24. 1996) (emphasis added).] 58 H.R. REP. 102-384. 16 28 VIII. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: 29 Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 34013 drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. 30 D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate modeP9 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 59 hut's: betictmchttnitelmantmoulent.corn onucs restturces (Johnson & Johnson Policy Docurnents) 31 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MCHP strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MCHP believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. MCHP appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me and/or our pharmacy director Emily Owens, ernily.oN\ ens cr mchp.care. Sincerely, Tim Evans, CEO Mountain Community Health Partnership Tim.evans a mchp.care 32 The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. 42 32 C.F.R. 199.2 I (q)(2)(iii)(E) -Is Genesis Health Care. Inc. v. Becerra. No. 4:19-cv-01531-RBH. slip op. (D.S.C. Nov. 3. 2023). 25 Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such clata.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PI3Ms use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.' We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, II 1% II .1%;;Ilderos.corn (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with cornrnercial contracts 1, vi.Kalderos,corn (Oct. 2023). issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracls, vk%r. .Kalileros.eom (Oct. 2023). Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least. . . $6 billion annually" in 2022.) Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, I.kv,%%.lialcieros.com (Oct. 2023). Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). " Kalderos. Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, %%.%. .Kaltleros.com (Oct. 2023). Issue No. 3. (rebate data is worth billions). See. e.g., Genesis Health Care, lnc. v. Becerra. 701 F. Supp. 3d 312. 330 (D.S.C. 2023) (stating that - the goal of the 340B statute . .. is to make 'covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 5 340B Report, Legislative Map: Contract Pharmacy Protection Bills. https: 3-10breport.com Isla: c-map contract- pharnmo -pnnection-hill : 340B Report.Legislative Map: Laws Passed That Prohibit PBM Underpayment. 340breport..coin e-map lims-passed-that-proltibit-phin-underpm mein . 26 to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.'' The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."'2 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations onregulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."'3 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.' The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any 5 I Pharmaceutical Research & Manufacturers ofAmerica v. U.S. Department of Health & Human Services. No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9. 2014). 52 Albany Med Health System v. Health Resources & Services Administration. No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3. 2026). Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Flum. Servs.. 58 F.4th 696 (3d Cir. 2023). 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious. an abuse of discretion, or otherwise not in accordance with law"). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 27 authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). " 26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,J shall not 26 42 U.S.C. 256b(a)(I) 27 Id. 28 42 U.S.C. 256b(a)(1) 19 request payment under" the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.3 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing Indeed. the 340B statute states that the covered entity may choose "options for billing 340B drugs to Medicaid. Specifically_ it states that the FIHS may "develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. Id. i 0 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title. and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.- ) 3 I 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). 20 requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. AdditionaIly, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. 3.4 C.F.R. ti 447.518(a). 21 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits." The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."I8 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often 17 IVlanufacturer Audit Guidelines tittps: \\ \ siics it riles/hNa opa dispute-resolution-process- l2-12-96.pdf IS 340B House Report Legislative History. H.R. REP. 102-384(11). 13 delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and I Administrative Dispute Resolution Regulation. ltuo, . +tki%.govinro.uo Content pl.dt l pt.li 2024-08262.0d1 14 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it 2 Section 340B of the Public Health Service Act. Imps: k%.11r,;:.:!o\ ,ik:s default. hrsa rural-health phs-act-seetion- 340b.pd f 15 Total Cost: For our CHC, which serves 11,497 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $398,750 annually. The In-House Pharmacv: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. MCHP currently partners with 34 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 34 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Mitchell and Yancey County in rural North Carolina with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Svstems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Vull1Crdbilit\ Indy:\ Approach to ldentil\ Pharmao Deserts and Kex stone Pharmacies I l'hanic% and Clinical Pharmacoloa\ -LAMA Nch% Ms ()Pen ; New ork 10 hurls! \\.healthatrairs.orc'doi abs l D.1377 hithali.202-00l9riournak-ode=h1thalY 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. MCHP offers sliding fee discounts at four of our pharmacy locations in the community via cash card FIRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. hups: bplic.hrszi.um coinnliance'compliance- iniinual chapter9,--, Footnote 111 8 opportunities. Patients who are 200% below FPL are eligible to receive substantial discounts on their prescription medications at these locations for only a few dollars above the 340b cost. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many I 3 ilito-: col blo2- ear-end-Fitisiness-health-check-ko -inetrics-e% -nhurmuc% -o ner-sltould-rex icn 9 Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.3' Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."37 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."38 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, hut's: aet 1ileS document imp -2028-linal- emitianee.pslf. 36 42 C.F.R. 447.502 '' [141: Comment on Agency Information Collection Activities: Proposed Collection: 340B Drug Pricing Program. Docket No. HRSA-2025-0001-0095, hurts: t\ ses.tulutions.cok contment/1IRSA-2025-000 I -0095. ss Comment on Agency lnformation Collection Activities: Proposed Collection: 340B Drug Pricing Program, Docket No. H RSA-2025-0001-0980. hups: .% .rev.ukaions.em comment, I RSA-2025-000 I -0980. 27 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and ineur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 23 Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MPBID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.4 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905 (a)(I2) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. "41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts 10 42 C.F.R. 438.3(s)(7) The MCO. PIHR or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. buns: %%%.efr.Lo% ctivrent eh;ipter-1 V subchapter- nari-4.38 Nubpari-. \ secnon--138.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 24 has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes2i to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition PI 340B Claim Indicator Pricing Claim included a 340B modifier, P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 340B Pharmacy Allocation V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 21 hurls: In.supnort.bvitconchanucinianiolcmcnt.com cn articles I 3335320-k alidation-voLles-and-pricimt-coLles-i2kIssar% 16 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VI. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: 22 5 U.S.C. 500-596: Food & Drug Admin.. Least Burdensome Provisions: Concept and Principles (n.d.). \\ \\ re!.:olator, -in rormai ion Nearch-ida-Ltuidance-documents ltnist-hurdel[Noloc-pro isions-conccpt-and-priliciplc:, (last visited Mar. 13. 2026): H.R. REP. 102-384(11)). 23 Medicare and Medicaid Programs: Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49.266 (2025). 17 CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."2' The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated 24 CY 2026 PFS. Final Rule. 4L.11 14.L:crkinlo.utn_ ctultent pke FR-2025-11-05 pcif 2025-19787.pdf 25 H.R. RER 102-384( I1) 18 CLICs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost lmpact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost 51,501,796.17 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends 5225,269.34 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MCHP anticipates needing to reduce: I4 3401)pricine.lirsit.:2(i% 15 IMPS: %.4:111S.UOk ICS /11),SCIeCted-tIrtli!-I imutri-illir-prices-statutetin.zin 10 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our clinical pharmacy program and our community health worker program. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time community health worker. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 1,146 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. MCHP asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, MCHP estimates its 2027 Annual Rebate Opportunity Cost to be approximately $388,319.06. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our 11 organization would be forced to utilize limited financial reserves and look at a possible line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on MCHP, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays MCHP urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $731,285.13. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 16 Application Process for the 340B Rebate Model Pilot Program. 2025-14619 (90 FR 36163) [IHPN: x +%.leticralreuister.::O% documents 2023 08 nl 2025-1 -16 l 9 3-101)Troeram-iiiiiicc-anplic;tuon-process-li)r-thc-3-10h- rehatc-model-pilm-proffam 12 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. MCHP has already faced numerous barriers in ensuring access to life-saving medications for our most vulnerable patients, particularly as a result of increasing manufacturer restrictions. These challenges were further intensified during Hurricane Helene, when we lost access to 340B pricing for medications produced by Bristol Myers Squibb due to an inability to submit required reports within an expedited tirneframe caused by a loss of internet connectivity. Despite promptly requesting an extension under these extraordinary circumstances, we did not receive a substantive response beyond an acknowledgment that our request was "under review." As a result, patients already experiencing the impacts of a devastating natural disaster were forced to make an untenable choice: pay approximately $500 out-of-pocket for essential medications such as blood thinners or forgo treatment altogether. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. 6 2025 UDA Data. HRSA (hrsa.gov) 4 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MCHP provided $1,546,133.00 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCHP anticipates needing a minimum of 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, MCHP anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, 5 legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforcc I m nact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. MCHP estimates 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. MCHP urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $24,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 7 Internal NACI-IC assessment (99 responses). 8 Ibid. 6
HRSA-2026-0001-1600FAMILY HEALTHCARE CENTER2026-04-16T04:00Z43,496 chars
See attached file(s) FAMILY A.._4% HealthCare April 16. 2025 Chantel le Britton Director Office of Pharmacy Affairs llealth Resources and Services Administration 5600 Fishers Lane Rockville. Maryland 20857 RE: Request for Information: 34011 Rebate Modei Pilot Program (4MA-2026-03042) Dear Director Britton: On behalf ot Family HealthCare, I would likc to thank the Health Resources and Services Administration (FIRSA) fcpr extending the comment deadline to April 20, 2026. 1his cxtension has been vital in enabling our organization to conduct a deep-dive analysis of thc operational and financial risks to CHCs poscd by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, thc proposed shill of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Family HealthCare anticipates an administrative cost increase of approximately $300,000 for the administrative hurdles of manual reconciliation, in addition to another $130,000 due to inventory-related costs. Projected Cost increases: CHCs anticipate significant increases in operational costs. National data shows that Li sirigle mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. 0 Rural Health Center Breakdown: For rurul CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) ol' their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Farn i 1 y HealthCare (FHC) is a Federally Qualified Health Center serving patients across North Dakota and Minnesota, with six clinic locations spanning the Fargo-Moorhead metropolitan area, rural North Dakota, and the Minnesota border region. Our sites include two full-service clinics with on-site.pharmacies in Fargo; a rural clinic in LaMoure. North Dakota; a dental clinic in Moorhead, Minnesota; a school-based health clinic at Moorhead High School, and dedicated Homeless l-lealth Services in Fargo. We further extend our reach through telehealth services and a mobile health unit, ensuring that geography and circumstance arc never barriers to care. FFIC's roots run deep in the communities we serve. Founded in I990 under a Section A. Homeless Health Care grant, our organization was built from the ground up to reach those most often left behind by the traditional healthcare system. More than three decades later, that founding mission remains the compass for everything we do. As a testament to the growing community need for our services, FFIC now provides care to nearly 16,000 patients across more than 60,000 patient visits annually. FI-IC provides comprehensive, integrated primaty care services including Family Medicine, Dental, Optometry, Behavioral Health, Lifestyle Medicine, Homeless Health, Language Services, and Mobile Health, Our patients reflect the communities most at risk: low-income individuals and larniIies, the uninsured and underinsured, individuals experiencing homelessness, students, and patients in rural conununities with limited access to earc. As-an FQHC., FFIC is committed to serving all patients rcgardless of ability to pay, operating under a sliding lee discount schedule that ensures no one is turned away. The 3408 progrann is not a financial tool for FI-IC it is thc foundation that makes our mission operationally possible. The savings generated through 340B allow us to offer deeply discounted and zero-pay medications to our most vulnerable patients, fund services that are not reimbursable through traditional paycr models and sustain the outreach infrastructure including our mobile unit and homeless health program that reaches patients who iNould otherwise have no access to carc. Any disruption 1.0 our 340B program is a direct threat to the patients who depend on us most. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Motel Pilot Program is a direct threat to CHCs" core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades. the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and tminsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnolel undermines this hy placing an immense financial burden on Cites. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect IC/Ws' ability to serve the 52 million patients who rely on us. For Family HealthCare in particular, this means it will impact: The num her of 340B transactions at the downtown pharmacy is over 49,1100. Thc number of patients served by our health center is nearly 16,000 annually. Our 340B revenue is used to help support othcr non-supported or unreitn bursed patient medical and dental services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly. a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CI [Cs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially Out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or [ack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication 2 nomdherenee, treatment delays, and adverse outcomes. particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. At Farnily HealthCare, this is not an abstract concern, ln 2024, neatly three out of four of our patients 23,44% uninsured and 50.87% on Medicaid or CHIP have no private insurance buffer between them arid (he cost of their medications. For these patients. the upfront 34013 discount is the difference between Filling a.prescription and going without. We have significant concerns about the impact a .346B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs sclected for the MDPNP for 2026 and 2027, and included in the proposed rebate model. are used to manage chronic conditions prevalent in primary care settings, meaning CI-IC patients will be disproportionately affected. CHCs serve a patiem population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity) This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential. iife-sustaining therapies. For instance, direct oral anticoagulants (D(lACs). such as Xareltot and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism. and atrial fibrillation. For many of our patients, there are minimal - and often less safe - alternatives. This is not an optional therapy hut a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack. and death:! Similarly, the impact on patients requiring SCUT2 inhibitors. such as Varxiga* and Jardiance*, would be severe. These drugs are a nrdirustay of primary care for conditions like Type-2 Diabetes, chronic kidney disease. and hean failure, all of which are highly prevalent among our patients. Research has found that even a10-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization,' By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies Ibr managing their chronic illnesses,* leading to a predictable increase in preventable hospitalizations, The United States is iri the midst of an alarming mental health crisis. Nearly one in four (23,4%) Americans live with a mental illness.' Starting in 2027. the MDPNP will include some hehavioral health drugs. Vraylar TP is an atypical antipsychotie; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to Richard P. ICaa L. Dor A, 111.'11,1, Shin P, Rosenbaum S. Cost savings associated with the use of coinmunity heahh centeri. J Anibul Care Manage; 20'12 Jan-Mar:35( I O0-9. cbi: !OA 097/J AC,0b043e31823(127hk PMID: 2215035, 2 CODISI: et a- Risks Associated with discontinuation of oral anticoagulation in newly diagnosed patientS with atrial iibrilatinn: Rolt Rs from ale GARFIELD-AI; Registry, J -rheoinh 1 laentosi. 2021 Scp;l9(9);2322-2334. doll 10.1 I I 110.134.15. Epub 202 I :fu. 23. MAID: 3,4060704: !'AA('[7! PMC839043.6. 3 Packer, M., et a (2024). Blinded Withdrawal of Long- rem Rundomind Treatment with EmtrugliEorin or Placebo in Patients With 'NAN Failure. Circulation. ill - - I .. I I 0. l' , I...r; 'Substance Abuse and Mental l lealth Services Administration. (2025). Key substance use and mental health indicators in the United Slates: Results rlffont the 2024 N.,aional Survey on Drug Usc and I [calif'. {MIS Publication No. PEP23-07-007, NSDUII Screcs 1-1,-(}fl). Center For Behavioral Health Sratimics and Quality, Substance Abigse and Meniol T lealth Scrvccs Administration. lo Ihari- vN n 1-lic.i , t 3 provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side efiect of antipsychotics_ Studies have shown that 73% of patients treated with Austedoe achieved treatment success, resulting in improved quality of life,' Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements, With over 3 million Americans relying on CliCs for essential diabetes care,' affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file wou]d reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. imposing a rebate model on CFICs would only weaken the safety-net providers that 52 million Aniericans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federai poverty guidelines. The sarne patients who need access to discounted medical services also depend on CHcs to provide affordable medications, Without the up-front 34013 discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 111. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is riot only u fmancial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and 1T costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will ine.ur additional workforce and IT eosts to maintain compliance with multiple manufacturer rebate requirements, irtcreasing the burden associated with this rebate pilot program. Similar to naviga.ting manufacturers' existing contract pharmacy restrictions, CHCs will heed to invest in IT inrrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes fOr denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CI-1Cs wil] face an increased administrative burden in monitoring rebate claims and payments, 340B Rebate Model erational & Administrative 'ost Calculator Descra tion 5 Hauser RA, et al. lxing-.1erin Deutztiattenazine Fre4linent for lardNe Fs. Mseciatett With Sustained Renefits and Safety; A 3-Year., F.x.tenNi ni LI idy. Froill e lin)]. 2022 Fri) 23:13:773999. doi: 103389.:fronic2022.773999. 3:5280262; PMC1D: PMC890L584i1. 2025 UDA Uala. FIRSA thrsa.gov) 4 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensinglcapture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have riOW be.en extended to clinic-administered drugs and entity- owned pharmacies, A refund model will require a significant increase in already-strained operational capabilities, Sliding Fee Discount: With 95.57% of our patients living at or below 200% of the Federal Poverty Level and nearly two-thirds at or below l 00% FPL the sliding fee discount is not a supplemental benefit at Family HealthCare: it is the primary mechanism hy which our patients access medications al all. Staffing Impact: Family FlealthCare anticipates needing an additional 1.0 FTE pharmacy staff member as a Result of the Rebate Model. additional FTEs to account for the increase in regulatory, operational. administrative, and compliance burden created hy a rebate model. External Vendor Costs: Given increased cotnplexity. Family HealthCare anticipates an increase of approximately $55,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software. and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessrnent, 47% of responding CHCs estimate needing to hire 0.5 IO 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 E:TEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Farnily HealthCare anticipates needing an additional 1.0 FTE pharmacy stair member as a Result of the Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30.000 to $200,000 annually!' One midwestem CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program,. increased labor costs, canying costs, and potential losses ort discounted or expired drugs without rebate recovery. CHCs operate on razor-thin rnargins, and these additional costs are not an option for many entities. An estimated $300,000 additional cost. Depending on the volume of prescriptions a pharmacy fills for the l 0 selected drugs, CRCs will face an increased administrative hurden in terrns of monitoring rebate claims and payments, Approximately 20 hours per week or 1,040 hours annually will be required to report 340B rebate claims to a third-party platform. assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CliCs to use multiple internal systems to manage and report the same N AC1 IC as$essment (99 resporisQs), 5 data, thereby increasing costs and operational burdens. Family HealthCare urges HRSA W require uniformity among eligible manufacturers to mitigate potential adnrinistrativr and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software*.Third-farty Administratipn.clmigt$, Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider thy increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements_ Additionally, if manufacturers arc allowed to select different software platforms, as they currently do with contract pharmacy pohcies, the administrative burden on CHCs would increase sub.stantially, One-Time Implementation Costs: We anticipate high upfront costs of approximately $100,000 to adapt our pharmacy software, pay for custom dashboard modifications, and design riew internal workflows to simply reach the haseline of compliance belbre a single rebate is ever received_ Ongoing Operational Fees: Beyond implementation. our TPA and software vendors will likely charge ongoing service fees to maintain lhese complex rebate-tracking features_ These are permanent, recurring costs that diminish ottr 340B savings, Total Cost! For our CHC which serves over 15,000 patients, the total projected increase in expensesincluding labor. TI and carrying costsis estimated at $500,000 annually. Clinic Administered Drugs,: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software. system integration, an1 staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, clependirtg on the software.'' Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by Clles, Because PPS visits are paid at a flat rate, the medications adrninistered in CHCs are often not included ort claims billed to payers. Simplified Records: Because CHCs maintain limited inventories rt CADs and they are typically not separately billed on claims, it is still common for administration and inventoty logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs- maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting lbr rebate, Very few CFIC records include electronic medication administration records (eMARO, which are common in hospital electronic medical records (FIVflits). Where eMARs are available. lhey incur an additional cost and often require CHC to pay for a standalone software system, Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPN@). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then interrial N [C. survey data expand to include Medicare Part /3 claims in 202g. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts, HRSA should explicitly exclude CADs from any 340R rebate model pilot. At a minimums such drugs should remain excluded unless and uniil they ate hilled as discrete clairns by CHCs and a dernonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. lncluding CADs in a rehate pilot at this stage would impose disproportionate administrative. costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight, A. Financial Challenges Under the proposed 340R Rehate Model Pilot, CI [Cs would be required to purchase drugs at full retail price, also known as the Wholesale AcIuisitivri Cost (WAC). This departure from over 30 years of precedent would drastically diminish CRCs' ability to purchase drugs, as the uncertainty Of waiting for a manufacturer to approve a rebate would constrain cash flow. CIICs will have to wait to receive their rebate payrnent after providing rnedications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 3401i Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CRCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 3408 price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a ClIC's ability to offer sliding-fee discounts at the point of purchase, A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute arid regulation, CHCs are required to offer sliding fee discounts 'or all required and additional health services within the HRSA-approved scope of the project.' In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to mnle them more affordable for low-income individuals.' A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size, At Family Healtheare, patients ire never turned away due to an inahilily to pay, Our sliding ree discount schedule adjusts the cnst of medications and services based on household income and family size, with patients at or below l00% of the Federal Poverty Level receiving a full discount, Por pharmacy patients, this means medications are dispensed at deeply reduced or zeto-eost at the point of sale a benefit made possible entirely by the upfront 340B discount reflected in our pharmacy software at the lime Of purchase. Our two owsite pharniacies are integral to lhis model, Ilo I-IRSA FAQ I' Such dismunts are subjec( potendal legal and wriimettlal restrictions,!ii, r .ii.innAciiiirwqqoi 'Ho allowing our cape teams to close the loop between the clinical visit and medication access in a single encounter. For patients served through our m.obile unit, homeless health program, and contract pharmacy partners, this same affordability infrastructure extends into the community reaching patients who have no other option.s. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitteI. While rebates are expected to arrive within 10 days from completed data subrnissions, the previously proposed rebate pilot allowed covered entitics up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 clays. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC, Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 clays to the average 30 days for inventory to Lim CHC pharmacies with physical inventory could be waiting 7?-85 days from purchase to rebate under a 45-day lata submission cadence. Anecdotal reports from CI-1C pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data, Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-re.hate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, wilier could create financial strain on CRCs. We appreciate HRSA's requirement for a l 0-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement, Based On experience with manufacturer denials related to the current MFP to 3408 de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CI-IC can receive the rebate, manufacturers and their vendors have. failed to pay the rebate within the WI' standard of 14 days froni when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates lbr undefined and unlimited time, Complicatedly., the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate thc rebate amount and may undercharge or overcharge patients due to confusion, Furthermore, if the rebate is denied, the CHC takes a net ]oss on the transactiom We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 clays of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high lT/in'rastructure costs, will disproportionately iinpact CHCs and trickle down to patients. It is important to note that many CHCs are currently under inan'ial strain. Nearly half of CLICs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs. CHCs will incur under a 340B Rebate Model, I lit -II 8 34013 Rebate Drag Cost Ina_pact Calculator Description To support CHCs in messing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant,. FQHC 340B Compliance, to create another calculator for all CHCs, Financial data and projections are based on a 34013 Rebate Drug Cost impact Calculator, which utilizes CHC-specifie purchasing data, 340BD and WAC pricing data for the first quarter 42026 (Q1 2026). and the CMS list of MDPNP selected drugs hy N DC." For individual MDPNP Price Applicability Years, the calculator evaltates: Increase Upfront Annual Drug Spend: WAC 340B For 2025 purchases by NDC & volume. reflected in Q1 2026. WAC and 340B prices appliecl for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: Under a WAC-upfrontirebate-back model, FHC wou[d he required to purchase drugs at full WAC price and wait for manufacturer rebates to recover the difference to the 34013 ceiling price. Depending on rebate cycle length, our projected inventory carrying costs increase significantly year over yerr with the highest exposure occurring when thc gap between purchase and rebate recovery stretches to 90 days, Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volurne, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calcutated hy NDC, then aggregated at the MDPNP selected drug, manufacturer, imd MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources_ Based on our organization's dat.a, we estimate it would cost $1,837,775.00 to purchase these 10 drugs under the proposed rebate model. Currently. our organization spends $25I,544.00 to purchase these same drugs at the 34(}i ceiling price. This represents an approximate 630% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Family Healtheare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund other essential staff positions. ; IL l- I ii-; .; 9 Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised, lf the cash is not in our accounts because it is being held hy a rnanutheturer, we cannot provide the -bridge" support that pr;vents our roughly 3,475 uninsured patients from rationing their insulin or heart medication. B. Wholesaler huplicafions Another concern is that purchasing drugs at full WAC will potentially lead theorganizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Fer exarnple, sorne CF1Cs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking oul loans, thereby defealing the purpose of the 340B program. Family HealthCare asserts that taking out a loan CIT an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of"financial limbo.- This approach fundamentally defeats the purpose of the 340B programto "stretch- scarce Federal resourcesby diverting patient-care funds toward interest payments. origination tees, and debt service. Relying on credit to "float" manufacturer rebates is particuariy dangerous at a time when all other major revenue sources are unstable, Wholesaler Credit Limits: Purchasing drugs at full WAC will potential ly lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present. many CilCs are forced to pay invoices before their due dates to rernain within their credit limits. Given that CI.ICs typically operate with extremely limited iriarrcial margins, they are often perceived as having higher credit risks. making increases to credit limits difficult or impractical. Discounts: CfiCs often receive prompt pay. purchase volume. and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet lhese terms. potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their cxact prompt-pay discount. Family HealthCare estimates that purchasing the 10 selected drugs at WAC instual of 340B ceiling prices will increase our upfront monthly drug spend hy approximately $132,000 per month. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in thc manufacturer's reconciliation system. While we wait for rebates. we lose the liquidity necessary to respond to immediate public health crises or facility eme.rgencies. To navigate the rebate model, our organization could be forced to take out a line of credit or utilize limited financial reserves. This is not a. sustainable solution: the interest costs aone are estimated to he $35.O00 annually , Ihnds that are currently dedicated to non-supported or unreimbursed patient medical and dental services. Forcing CFICs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely Oil Family 1-lealthCare. the risk of our credit limit being reached or OLIT reserves being depleted is a direct threat to the cornmur6ty's safety net. If we are forced into financial limbo. t3u "trickle-down" effect is 10 immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Family HealthCare urges l lftSA to recognize that without rigorous, non-discretionary safeguards. the rebate rnoclel is not a "pricing mechanism" but a significant financial liability. The current fivniework allows manufacturers to act as the .sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposeci in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs neecl to understand or contest those decisions,b f a rebate is denied, the CHC takes a net ]oss on the transaction, having already paid the fuil WAC price. to the wholesaler and provided the drug to the patient at a steep discount, Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $75,000.00. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients. regardless of their ability to pay_ The financial halm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients, Additionally, the kick of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC, Without a staiAardized, transparent, and neutral dispute resoluti.on process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin rnargins, which depend on timely reimbursement to sustain services for medically anderserved populations. IV. Reconciliation and Rcbate Denials Operational Challenges Ifl-IRSA proeeeds with a rebate-based pricing model, the prograrn must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate tnodel operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities frotn financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates othenvise under statutorily sanctioned duplication of discount prevention (i.e 340B with MDRP MDPNP); I5 Application rmicss for 11}c 34013 Moski Ribt Program. 2025-14619 (90 FR 36163} 21.125Al.S01 2025- I n I loO itharotirdm-nolice-4g2lic oli ali- 1.1 I 11 Standardized. publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply CO hOtil fiat and corrected determinations. IflIRSA adopts a I 0-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers frorn using dispute processes as a delay mechanism, A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: URSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed, This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing,-and data components, V. Existing CHC Compliance Actions CRCs already operate under a comprehensive regulatory framework established through the Health Cenier Program and the 34013 statute to make medications affordable for patients. ln aIignrraent with Section 330 or the Public Health Service Aet, they utilize a sliding lee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay, CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below l 00% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHes participate in regular Operational Site Visits (DSVs) to verify Health Center Program compliance, and also follow strict 340B eompliance. protocols. including internal audits, training, and external oversight. CHCs participating in the 34013 program are required to report 340B-related information annually through tile Uniform Data System (UDS). This includes data on 3408-purchased drugs, associated costs nn1 revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs. implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens frorn such a model would threaten the stability of the safety-net providers lhat the 340B program was designed to support. Cl-ICs are not the source of misuse in the 3408 program: rather, they are national models of compliance, VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication al a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model. thc NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 12 t vf-; Margaret Asheim Family HealthCare https://famhealtheare.org/ 13 Substantially reduce administrative hurdcn on CEs by significantly reducing the need for them to build and maintain cornplex rebate compliance systems. and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spcnd correcting errors. Preserve the longstanding upfront discount structure that has defined the 34013 program for more than three decades and is essential to rnost CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the. resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it availablc to states. Given the majordisruption the 340B rebate program is anticipated to have on CI ICs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. lt is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthCare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of thc 340B programto. allow safety-net providers to "stretch scarce Federal resources" and providc more comprehensive care. A rcbate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, serviccs, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requireinents and track rcbates. lt would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale ancl steeply discounted medications required by law. Family I lealthCare believes that a 340l3 rebate pilot would cause disproportionate harrn to patients served by CHCs and other safety net providers. Family HealthCare appreciates the opportunity to respond to this Request for Information on the 340B R.ebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely,
HRSA-2026-0001-1601Clark Fork Valley Hospital2026-04-16T04:00Z12,012 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Clark Fork Valley Hospital, Plains, MT, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is NO. As explained below, any rebate mechanism will impose enormous costs and burdens on Clark Fork Valley Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Clark Fork Valley Hospital, Plains, MT has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. I am sorry to inform you that Clark Fork Valley Hospital, Plains, MT is a small Critical Access Hospital with extremely limited resources and we do not have the resources to perform the detailed analysis that you seek. We have participated in the 340b Program for about 8 years. It has provided great benefit to this hospital with revenues helping to offset our losses from offering various services that are needed in our community but otherwise financially unsustainable, such as long term care and hospice services. As a matter of fact, in FY2024, our 340b revenue approximated the amount of our operating income for the entire year. As the hospitals CFO, I am the primary administrator overseeing our program. We have a part-time pharmacist who is on-site for 2 a couple of hours a day. We are blessed to have a pharmacy technician who handles the day to day operations and 340b administration. During the 8 years that our hospital has participated in the 340b Program, we have seen our related revenue decline consistently due to the application of manufacturer restrictions on contract pharmacies and our pharmacies demand for larger dispensing fees. We have done our best to adapt to each new hurdle that was added to our ability to participate in the program, including reporting claims data to 340b ESP Second Sight and hiring consultants to ensure that our operations are compliant and we are prepared for an audit. Although I am unable to forecast or detail the additional costs and cash flow impact that we will incur from a 340B Rebate Program, it is all relative. Im sure our numbers are small compared to large hospitals that use the program, but by the same token we are hard pressed to add to our limited resources, while the associated revenue is equally important to maintaining essential services in a county of about 14,000 people. I will tell you that, as with every other administrative hurdle that gets passed down to us, we will do our best to comply so as to retain the revenue stream, until the cost and burden offsets the benefit, which I believe, quite honestly, is the goal of the pharmaceutical manufacturers who are promoting these burdensome requirements. In the case of 340B, it is indeed death by 1000 cuts. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Clark Fork Valley Hospital, Plains, MT, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Clark Fork Valley Hospital, Plains, MT does not currently have the staff needed to comply with a Rebate Program. We currently struggle to fill vacancies throughout our hospital, from housekeepers to cooks to nurses aides to therapists to medical professionals. We cant even employ a full-time pharmacist. 3 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Clark Fork Valley Hospital, Plains, MT has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Clark Fork Valley Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Its interesting that our pharmacy distributors already apply the most onerous payment terms on our hospital of any other vendor we deal with, at 7 days. And they will not hesitate to cut off drug shipments if they are not paid on time. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Clark Fork Valley Hospital, Plains, MT will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. As mentioned previously, the loss of this revenue could completely eliminate our operating income. This is just one more financial threat that we face as a small rural hospital given the reductions in Medicaid from the OBBB. One of the more important and visible impacts of our program is our Cash Program which allows uninsured patients to benefit from the hospitals 340B pricing and receive a significant discount when obtaining prescriptions at our contract pharmacy. If we are unable to sustain our participation in 340B, that program will go away. At the same time, the numbers of uninsured people in our county are increasing due to the increased cost of insurance on the exchange and cutbacks to Medicaid eligibility. 4 Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Clark Fork Valley Hospital, Plains, MT reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. We have experienced various problems with Beacon and 340B ESP support over the years that we have been required to submit claims data to that platform. The thought of having to depend on that platform for operations directly impacting our financial performance is extremely concerning to me. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Clark Fork Valley Hospital, indeed the entire healthcare system, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 5 During the several years that we have been required to submit claims data to 340B ESP, Clark Fork Valley Hospital has never encountered a duplicate discount issue. For all of these reasons, Clark Fork Valley Hospital, Plains, MT respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. Further, HRSA must be aware that this program will have an inordinate impact on small, rural hospitals, those who likely benefit the most, relatively speaking. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Clark Fork Valley Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide feedback, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Carla A. Neiman Chief Financial Officer Clark Fork Valley Hospital Plains, MT
HRSA-2026-0001-1602VENICE FAMILY CLINIC2026-04-16T04:00Z45,404 chars
See attached file(s) April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Venice Family Clinic, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Venice Family Clinic is a nonprofit community health center that provides comprehensive, high-quality primary health care to 45,000 people in need annually, regardless of their ability to pay or immigration status. The Clinic serves people from the Santa Monica Mountains through the South Bay in Los Angeles County. The Clinic has a network of clinic locations and Early Head Start centers located in Venice, Santa Monica, Mar Vista, Inglewood, Culver City, Redondo Beach, Carson, Gardena and Hawthorne, plus mobile clinics and multiple street medicine teams. The Clinics comprehensive care includes primary care, mental health services, dental care, street medicine for people experiencing homelessness, vision services, substance use treatment, prescription medications, domestic violence counseling, HIV services, healthy food distributions, health education, health insurance enrollment, child development services and more. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Venice Family Clinic in particular, this means it will impact: 39,701 patients that we serve Current overall costs of our 340B program is $252,632 and will increase if CHC is not exempted A reduction of 340B savings will hinder us from providing quality healthcare to underserved and low income patients in our community, especially the unhoused, patients with chronic disease, and individuals with mental health illness and HIV patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data- we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Venice Family Clinic provided $5,285,600.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Venice Family Clinic anticipates needing .5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Venice Family Clinic anticipates an increase of $41,340 to costs for external support vendors. These Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 For Venice Family Clinic we estimate needing .5 to .75 FTE, this be a form of hiring new staff or increase the work load of existing staff. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor- thin margins, and these additional costs are not an option for many entities. For Venice Family Clinic this additional FTE is estimated at $53,782. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Roughly an estimate of around 5 to 10 hours by our pharmacy, IT and finance team required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Venice Family Clinic urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Venice Family Clinic currently partners with 111 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 111 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Los Angeles County area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA- Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D approved scope of the project.12 In line with their mission, CHCs offer flat or sliding- scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner- should-review Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,384,403 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $209,259 to purchase these same drugs at the 340B ceiling price. This represents a 37,616% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices- statutezip.zip Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Venice Family Clinic asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Venice Family Clinic estimates its 2027 Annual Rebate Opportunity Cost to be approximately $555,654. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Venice Family Clinic estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $115,368 for 2026 MFP Drugs, $295,342 for 2027 MFP Drugs and $329,196 for the 2028 MFP Drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization maybe be forced to re-allocate funds from other service departments such as behavioral health, homeless programs and other services that are essential to providing quality healthcare. This is not a sustainable solution. In our region, where patients have no choice but to rely on Venice Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D Family Clinic, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Venice Family Clinic urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $91,178. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application- process-for-the-340b-rebate-model-pilot-program Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B- related information annually through the Uniform Data System (UDS). Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Venice Family Clinic strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Venice Family Clinic believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Venice Family Clinic appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Isabela Mihai (Chief Compliance Officer - IMihai@mednet.ucla.edu) and Fred Dolgin (Chief Operation Officer FDolgin@mednet.ucla.edu ). Sincerely, Mitesh Popat, MD, MPH Chief Executive Officer Venice Family Clinic Docusign Envelope ID: BC4CF4C3-0EFA-4169-83CC-5A0F7F8D708D
HRSA-2026-0001-1603The Family Health Center of Southern Oklahoma2026-04-16T04:00Z19,230 chars
The Family Health Center of Southern Oklahoma respectfully submits the attached formal response to the Request for Information regarding the 340B Rebate Model Pilot. This submission reflects significant concerns with the structure, operational feasibility, and statutory implications of the proposed model, as well as its potential to undermine the core intent of the 340B Program. We appreciate the opportunity to comment and respectfully request that these considerations be carefully evaluated as HRSA determines the next steps. 4:1! ...V I-I s FAM1LY HEALTH CENTER OF SOUTHERN OKLAHOMA Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-0111Extension. Dear Director Britton The Family Health Center of Southern Oklahoma (FHCSO) The mission of the Family Health Center of Southern Oklahoma (FHCSO) is to offer affordable, high- quality care to patients through comprehensive services. The center aims to improve the healthcare status of underprivileged communities and ensure access to essential medical care for all individuals, regardless of their ability to pay. As a Federally Qualified Health Center, the Family Health Center of Southern Oklahoma respectfully requests that Community Health Centers be exempt from the 340B pilot program. Serving a rural Oklahoma community, I have personally witnessed the meaningful difference our Community Health Center makes for the population we serve and the positive impact it has on patient health outcomes. Several years ago, I read a study noting that Community Health Centers often demonstrate stronger healthcare outcomes compared to other entities, and firsthand experience affirms this finding. The reason is clear: underinsured and uninsured patients gain access to newer medications at affordable prices. Unfortunately, health equity remains something not everyone has the privilege to experience. The Family Health Center of Southern Oklahoma (FHCSO) began serving Johnston County, Oklahoma, in 2004. Since that time, our service area has expanded to include Coal, Atoka, and Marshall counties. Our clinic patient population is composed of 34% Medicaid, 23% Medicare, 33% privately insured, and 10% uninsured patients. In contrast, our pharmacy population differs significantly, consisting of 13% Medicaid, 29% Medicare, 17% privately insured, and 40% underinsured and uninsured patients receiving services through cash claims. 1. 340B Rebate Model Drug Costs to Our Covered Entity Page l 1 610 EAST 24TH STREET TISHOMINGO, OK 73460 (580) 371-2343 FAX (580) 371-2451 a. Drug Cost Associated with a 340B Rebate Model in 2027 Opportunity Cost $673,437.56/year Increased Upfront Annual Drug Spend $4,482,520.99/year b. Current Administrative Costs Under the Upfront 340B Discount Model (Realize the current cost are much greater now than the cost before 2020. Keeping up with manufacturers obligations has made a significant impact to the cost of our operations today) i. Total 340B Transactions (Most Recent Fiscal Year) 66,485 transactions ii. Current Administrative Costs Related to 340B Operations and Compliance Third-Party Administrators (TPAs) o Macro Helix (MH): $75,000/year o Guardian Compliance Advisors (GCA): $120,000/year Staffing o Dedicated 340B-related staffing costs: $200,000/year iii. Key Drivers of Current Administrative Costs The primary cost drivers today differ significantly from those prior to 2020. Manufacturer- imposed requirements have substantially increased costs related to: Staffing IT systems Third-party vendors Compliance activities Labor hours These escalating manufacturer demands have fundamentally changed the operational burden of the 340B Program. Page I 2 c. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimated Incremental Administrative and Operational Costs Third-Party Administrators / Vendors MH: $111,000 GCA: $120,000 Rebate Model Manager (RX Paradigm) o One-time setup fee: $4,500 o Ongoing fee: Percentage-based and are unknown at this time. Staffing Estimated total staffing costs: $250,000 Manufacturer-Specific Platforms and Burdens Beacon (Manufacturer Rebate Platform) o Significant time required for onboarding, learning, tracking, and reconciliation o Complex reconciliation processesparticularly when attempting to align Beacon data with 340B Program requirements o Claims are frequently denied, often without clear justification, requiring constant invoice tracking ESP o Six months of unsuccessful onboarding attempts, ultimately required hiring an external company for enrollment and management. o Ongoing demands for learning, tracking, reconciliation, and management TruZo o Continued administrative burden related to learning, tracking, reconciliation, and management. Kalderos Uncertainty It remains unclear how many additional manufacturers will impose similar systems and requirements. Compliance and Legal Costs Legal fees already incurred for 2026: $10,000 Page l 3 ii. Methodology and Assumptions Used These estimates are based less on assumptions and more on experience. I have worked within the 340B Program for 13 years and have closely observed the significant operational changes over the past six years. The rapidly changing and inconsistent manufacturer requirements make it virtually impossible to maintain stability or predictability. These estimates are grounded in direct operational knowledge and long-term experience rather than speculation. iii. Activities Covered by Incremental Costs Incremental costs needing covered would cover, at a minimum: Claims processing q Data submission Referral validation tl Vendor management However, due to constantly changing requirements from HRSA and manufacturers, it is not currently possible to accurately estimate costs related to: Reconciliation Audit support The rebate model will undoubtedly increase administrative costs beyond the current upfront discount model, though the precise magnitude cannot be quantified at this time. iv. Offsetting Administrative Costs Government Grants? v. Impact on Current Operations Implementation of a rebate model would have serious consequences, including: Inability to pass 340B savings on to uninsured and underinsured patients, decreasing the health equity in these underserved areas and decreasing the patient health outcomes. Elimination of sliding scale discounts for patients at or below 200% of the Federal Poverty Level Reduction in services and potential contraction of service areas Page l 4 Reduction in staffing as services are scaled back d. Staffing impacts Under a Potential 340B Rebate Model Pilot Program i.Need for Additional Full-Time Employees (FTEs) Yes. One additional FTE has already been added due to the need for a TPA in our in-house pharmacies in anticipation of the rebate model. This role focuses heavily on referral validation and compliance activities. l anticipate the need for at least one additional FTE. ii. Anticipated Roles and Responsibilities Referral validation Manufacturer compliance tracking Vendor coordination Claims oversight and reconciliation These positions would be permanent, not temporary. Even with additional staff, it is uncertain whether we could keep pace with the volume and frequency of manufacturer- imposed changes. e. Systems and Infrastructure Requirements i. Required IT Systems and Integrations New pharmacy software o $10,000 setup o $2,500 per month EMRTPA interface o $10,000 setup o $2,000 per month EMRRX Paradigm interface o $10,000 setup o $2,000 per month ii. Estimated Costs Exact total costs are currently unknown due to vendor-specific requirements and ongoing changes to rebate model specifications. Page l 5 f. Additional Anticipated Costs and Impacts i. Additional Costs Legal review and compliance: $10,000 per year Training and consulting services Reduction in services Reduction in staffing ii. Organization-Specific Factors Federally Qualified Health Center (FQHC) Rural location High-needs patient demographics iii. Impacts on Patient Access to Medications Potential impacts include: Reduced ability to see patients regardless of ability to pay Loss of 340B savings passed on to uninsured and underinsured patients o lt is not possible to pass on a discount that is never received Elimination of sliding scale discounts for patients at or below 200% of the Federal Poverty Level Reduction in services, service areas, and staffing 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. impact of Payment Timing on Cash Flow Yes. Any change in payment timing under a potential 340B Rebate Model Pilot Program would materially impact our cash flow, which is already constrained. Several factors contribute to this limitation: Our wholesaler payments are due every seven (7) days, requiring consistent and predictable cash outflows. We experience financial losses on a portion of claims due to PBM reimbursement practices. Page l 6 A significant percentage of our patients qualify for discounted prescriptions through our sliding fee scale, reducing revenue. Additionally, there is already a lack of consistency in how drug manufacturers are making payments related to IRA medications, further increasing financial uncertainty. b. Current Wholesaler Payment Terms Our organization operates under Net 7 payment terms for both 340B and non-340B (retail) accounts. i. Prompt Payment Incentives or Discounts Proprietary information ii. Average Payment Timing Payments are typically remitted within 7 calendar days. c. Impact of a Rebate-Based Payment Model on Timing A rebate-based payment model would significantly alter payment timing compared to current wholesaler arrangements. Under a rebate model, we would be required to pay wholesalers upfront before receiving reimbursement from manufacturers. This creates a fundamental problem: we cannot reliably make payments for drugs when we have not yet been paid, particularly given the high dollar amounts involved and the strict payment timelines imposed by wholesalers. There are no viable alternative payment arrangements that would sufficiently mitigate this risk. Eliminating the rebate model altogether is the only practical solution to avoid severe cash flow disruption. d. Manufacturer Adherence to Required Payment Timelines The suggestion that manufacturers could consistently adhere to a 10-day payment requirement is difficult to accept based on past experience. Manufacturers have not historically demonstrated consistent compliance with payment timeliness or transparency, even under existing frameworks. Without strong enforcement mechanisms, such a requirement is unlikely to be effective. e. Alternative Structural Approaches to Address Cash Flow Impacts A change in 340B Rebate Model would not be necessary if the following were used as a guideline. Page l 7 Start with having a neutral clearinghouse that received information stating the prescription is 340B or not. If a claim is identified as 340B, a rebate is not required. In cases where multiple entities submit conflicting 340B claims for the same prescription, the claim could be temporarily rejected by the neutral clearinghouse pending verification. Covered entities would continue to purchase 340B drugs at the 340B price, eliminating the need for a rebate-based system entirely. 3. Rebate Denials a. Need for Clear Guardrails on Denials Yes, additional and more specific guardrails are necessary. Despite operating in a very rural area, we continue to experience rebate denials. These denials often lack clear or valid justification and instead result in requests for invoices or documentation that do not align with the date or scope of the inquiry. The burden of proof placed on covered entities is excessive and, in practice, often impossible to satisfy. Denials should be limited to clearly defined and objectively verifiable circumstances. b. Standard Process Requirements for Denials At a minimum, rebate denials should require: Standardized denial templates Clear explanations tied to specific regulatory criteria Defined timelines for adjudication and appeal of improper denials Without these elements, covered entities are left without meaningful recourse. 4. Data Collection by Covered Entities a. Current Data Collection Practices We use a third-party administrator (TPA) to collect and initially classify 340B claims. However, referral prescriptions must be reviewed and reclassified manually by staff. b. Data Accuracy and Validation Measures Page l 8 We employ a full-time employee who divides her time between referral management and daily audits of TPA data to ensure accuracy, completeness, and consistency. c.Impact of a Rebate Model on Data Collection A potential 340B Rebate Model Pilot Program has already changed our data collection processes, and these changes are ongoing rather than one-time. d. Recommended Data Elements for a Rebate Model The necessary data already exists if manufacturers would request them appropriately. At its core, the critical data point is simple: Is the claim 340B-eligible? There are multiple established methods to capture and communicate this information at both in-house and contract pharmacies. e.Privacy and Security Guardrails There needs to be a neutral clearinghouse 5. Required Reporting a. Manufacturer Data Required for HRSA Review To ensure compliance under a potential 340B Rebate Model Pilot Program, manufacturers should be required to submit the following data to HRSA on a regular reporting basis (e.g., weekly): Total number of rebate claims submitted Number of claims denied, categorized by reason for denial Average and maximum number of calendar days taken to approve or pay rebates Documentation standards applied for denials Such reporting is essential for HRSA to meaningfully monitor manufacturer behavior and program compliance. b. Manufacturer Data HRSA Should Share Publicly HRSA should publicly report, at minimum and on a weekly basis: Aggregate manufacturer rebate approval and denial rates Average payment timelines Common denial reasons Page 9 Trends in delayed or unpaid rebates Public transparency is critical to assess whether the pilot program is operating as intended or creating undue burdens for covered entities. That is why a neutral clearinghouse is imperative. c. Frequency and Duration of Manufacturer Reporting Manufacturer data should be submitted weekly and maintained for the full duration of the pilot program, with sufficient historical retention to allow trend analysis and retrospective review. 6. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Impact on 340B Program Integrity A rebate-based model would fundamentally undermine the integrity of the 340B Program. Specifically: It eliminates the ability of FQHCs to provide upfront medication discounts to patients who need them most. It impairs an entity's ability to recover losses from caring for uninsured and underinsured populations. 6 lt limits the financial capacity of FQHCs to expand services and service areas for vulnerable communities. A significant portion of 340B savings originates from manufacturer inflation penaltiespenalties imposed when manufacturers increase drug prices faster than the rate of inflation. These penalties cost manufacturers billions of dollars annually. Given that pharmaceutical manufacturers represent a trillion-dollar industry, it is understandable why significant resources are spent challenging the 340B Program. The 340B Program remains one of the most effective mechanisms for advancing health equity in the United States today. By enabling FQHCs to serve patients regardless of ability to pay, the program contributes to improved health outcomes, reduced mortality rates, decreased hospital utilization, and lower government healthcare spending for uninsured and underinsured populations. Page l 10 A 340B rebate pilot risks becoming the effective end of the 340B Program by dismantling the upfront discount structure that was deliberately designed to help safety-net providers offset uncompensated care. b. Whether a Rebate-Based Model Would: i.Assist manufacturers in avoiding duplicate discounts No. If duplicate discounts represented a widespread or systemic problem, such concerns would already be clearly documented and publicly addressed through HRSA. Existing mechanisms are sufficient to identify and prevent duplicate discounts without restructuring the program. ii. Reduce diversion or improper claims No. Manufacturers already have visibility into product purchasing and dispensing data. The rebate model does not address diversion and does not justify altering the longstanding upfront pricing structure. iii. Increase pricing transparency across stakeholders The rebate model does not meaningfully enhance transparency; instead, it introduces layered complexity that obscures accountability and shifts administrative burden to covered entities. How can you have transparency when the clearinghouse is owned by PHARMA? c. Recommendations to Strengthen Program integrity While Minimizing Burden Require use of one neutral, standardized platform for all stakeholders Mandate clear claim-level identification, including a simple indicator: ls this claim 340B- eligible? lf so, no rebate is due. Establish stronger safeguards to prevent pharmaceutical manufacturer influence over HRSA policy and program administration d. Other Potential Benefits of a Rebate Pilot No meaningful benefits have been identified. Any theoretical gains in transparency or audit oversight are outweighed by increased administrative burden, financial risk, delayed access to savings, and direct harm to patient care. Conclusion The Family Health Center of Southern Oklahoma strongly urges HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. This pilot, as currently proposed, represents Page l 11 a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. This model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs will need to make significant investments in IT infrastructure and staff to comply with rebate requirements, as well as track rebates. It also creates a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. We believe this pilot will cause disproportionate harm to patients served by CHCs and other safety net providers. Page i 12
HRSA-2026-0001-1604(no commenter metadata)2026-04-16T04:00Z87,207 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southern Nevada Community Health Center (SNCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million (SNCHC: $1.9 million) from entity-owned pharmacy operations and a 25% reduction in savings (SNCHC: 26%) for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Southern Nevada Community Health Center is a Federally Qualified Health Center operating under a co-applicant agreement with the Southern Nevada Health District. This health center receives HHS funding and has Federal Public Health Service (PHS) deemed status with respect to certain health, or health-related claims, including medical malpractice claims, for itself and covered individuals. Mission The mission of the Southern Nevada Community Health Center is to provide patient-centered primary health care services to the underserved community with an emphasis on integrated, high- quality, and affordable care in a culturally respectful environment. 2 Vision It is the vision of the Southern Nevada Community Health Center to reduce health disparities in the community by empowering patients to achieve their best possible health through fair access to comprehensive care. Values The values of the Southern Nevada Community Health Center are Commitment, Accountability, Respect, Excellence, and Service. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SNCHC, this means it will impact: 34,919 340B transactions/13,431 patients (CY2025) 340B Administrative costs of approximately $50,000/year Over $600,000 in laboratory test costs and $3 million in discounted/free medications provided to uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared 3 to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SNCHC provided $6.7million in 2025 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SNCHC anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, SNCHC anticipates an increase of $85,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SNCHC anticipates the need to add two FTEs across disciplines (Pharmacy, Finance and Information Technology) to support implementation of the rebate process. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SNCHC currently operates at an annual deficit that is largely mitigated by 340B savings. Additional staffing would increase this deficit. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At SNCHC. we estimate that 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. SNCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated cost of $8,000 to update software to gather, transmit, and track data/transactions/payments will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 13,431 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $60,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The pharmacy system and electronic health record (EHR) at SNCHC interface with basic demographic information. To add special handling for specific rebate drugs would require major modification to the interface, and changes to the pharmacy and EHR systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. One-time integration costs are anticipated to exceed $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. SNCHC uses an income-based sliding fee schedule to make medications affordable for the uninsured, allowing access to the latest recommended treatments (i.e., Jardiance, Farxiga, Xarelto) that would be unattainable for these patients in any other setting. 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment period of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day period for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 13 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $130,000/month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends less than $1,000/month to purchase these same drugs at the 340B ceiling price. This represents a greater than 12,900% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SNCHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our insurance eligibility and specialist referral services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Community Health Worker and a Behavioral Health provider, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our [] uninsured patients from rationing their insulin or heart medication. 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SNCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, SNCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately 2% of total purchases. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. SNCHCS DATA: SNCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $129,000 per month, and an additional $105,000 per month for 2027 MFP medications and an additional $447,000 per month for 2028 MFP medications. Conservatively, by January 2028, our health center will need an additional $681,000 per month to purchase medications assuming static WAC prices and no growth in patient volume. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; significantly reducing funds that are currently dedicated to our chronic care management program and community health workers. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SNCHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a 11 weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays SNCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $78,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, explicitly defined denial categories with claimlevel documentation. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 13 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day period. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SNCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SNCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SNCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Randy Smith, FQHC - CEO at smithra@snhd.org. Sincerely, Cassius Lockett, PhD, MS District Health Officer Southern Nevada Health District April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southern Nevada Community Health Center (SNCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million (SNCHC: $1.9 million) from entity-owned pharmacy operations and a 25% reduction in savings (SNCHC: 26%) for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Southern Nevada Community Health Center is a Federally Qualified Health Center operating under a co-applicant agreement with the Southern Nevada Health District. This health center receives HHS funding and has Federal Public Health Service (PHS) deemed status with respect to certain health, or health-related claims, including medical malpractice claims, for itself and covered individuals. Mission The mission of the Southern Nevada Community Health Center is to provide patient-centered primary health care services to the underserved community with an emphasis on integrated, high- quality, and affordable care in a culturally respectful environment. 2 Vision It is the vision of the Southern Nevada Community Health Center to reduce health disparities in the community by empowering patients to achieve their best possible health through fair access to comprehensive care. Values The values of the Southern Nevada Community Health Center are Commitment, Accountability, Respect, Excellence, and Service. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SNCHC, this means it will impact: 34,919 340B transactions/13,431 patients (CY2025) 340B Administrative costs of approximately $50,000/year Over $600,000 in laboratory test costs and $3 million in discounted/free medications provided to uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared 3 to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SNCHC provided $6.7million in 2025 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SNCHC anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, SNCHC anticipates an increase of $85,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SNCHC anticipates the need to add two FTEs across disciplines (Pharmacy, Finance and Information Technology) to support implementation of the rebate process. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SNCHC currently operates at an annual deficit that is largely mitigated by 340B savings. Additional staffing would increase this deficit. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At SNCHC. we estimate that 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. SNCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated cost of $8,000 to update software to gather, transmit, and track data/transactions/payments will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 13,431 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $60,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The pharmacy system and electronic health record (EHR) at SNCHC interface with basic demographic information. To add special handling for specific rebate drugs would require major modification to the interface, and changes to the pharmacy and EHR systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. One-time integration costs are anticipated to exceed $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. SNCHC uses an income-based sliding fee schedule to make medications affordable for the uninsured, allowing access to the latest recommended treatments (i.e., Jardiance, Farxiga, Xarelto) that would be unattainable for these patients in any other setting. 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment period of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day period for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 13 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $130,000/month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends less than $1,000/month to purchase these same drugs at the 340B ceiling price. This represents a greater than 12,900% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SNCHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our insurance eligibility and specialist referral services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Community Health Worker and a Behavioral Health provider, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our [] uninsured patients from rationing their insulin or heart medication. 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SNCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, SNCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately 2% of total purchases. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. SNCHCS DATA: SNCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $129,000 per month, and an additional $105,000 per month for 2027 MFP medications and an additional $447,000 per month for 2028 MFP medications. Conservatively, by January 2028, our health center will need an additional $681,000 per month to purchase medications assuming static WAC prices and no growth in patient volume. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; significantly reducing funds that are currently dedicated to our chronic care management program and community health workers. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SNCHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a 11 weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays SNCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $78,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, explicitly defined denial categories with claimlevel documentation. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 13 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day period. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SNCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SNCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SNCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Randy Smith, FQHC - CEO at smithra@snhd.org. Sincerely, Cassius Lockett, PhD, MS District Health Officer Southern Nevada Health District
HRSA-2026-0001-1605Providence Valdez Medical Center2026-04-16T04:00Z13,350 chars
See attached file(s) Comment on HRSA Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-001-0001 Submitted by: Providence Valdez Medical Center Valdez, Alaska Critical Access Hospital Date: April 2026 Introduction Providence Valdez Medical Center appreciates the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSA) Request for Information regarding the potential implementation of a 340B rebate model pilot program. PVMC is a Critical Access Hospital serving a geographically isolated coastal community in Valdez, Alaska, with no alternative acute care facilities available within hours of travel. As a rural safety-net provider, our hospital operates with limited staffing, narrow financial margins, and minimal tolerance for operational disruption. PVMC provides emergency, inpatient, and outpatient services, including outpatient infusion and specialty medication administration. Participation in the 340B Drug Pricing Program is a foundational component of our ability to sustain pharmacy services and ensure timely, reliable access to medications for our patients. Importance of the Current 340B Upfront Discount Model The longstanding upfront discount structure of the 340B Program provides immediate and predictable savings at the point of drug purchase. These characteristics are particularly critical for small rural hospitals that lack the economies of scale, staffing depth, and financial reserves available to larger health systems. At Providence Valdez Medical Center, participation in the 340B Program generates average savings exceeding $20,000 per month, which are reinvested directly into patient care and operational stability. These savings support: Maintenance of essential medication inventory for emergency and inpatient services Provision of outpatient therapies that would otherwise be financially unsustainable Continuity of pharmacy services in a remote, low-volume care setting The predictability and immediacy of the upfront discount model are essential to financial planning, medication procurement, and patient access in a critical access environment. Financial Impact of a Rebate-Based Model Transitioning the 340B Program from an upfront discount to a rebate-based structure would require covered entities to purchase drugs at full acquisition cost and await retrospective manufacturer reimbursement. For small rural hospitals such as PVMC, this shift would create substantial financial risk. Specific concerns include: Cash flow strain associated with delayed rebate adjudication and payment Reduced ability to procure and maintain inventory of high-cost medications Increased exposure to denied, delayed, or disputed rebates Unlike large health systems, PVMC does not maintain substantial cash reserves to buffer delayed reimbursement. Even brief or modest payment delays could materially impair our ability to maintain medication availability, particularly for high-cost outpatient, emergency, and specialty therapies. Administrative and Operational Burden A rebate-based model would introduce significant administrative and operational complexity beyond existing 340B compliance infrastructure. Based on HRSAs RFI and prior manufacturer rebate proposals, such a model would require: Transaction-level tracking of drug dispenses Submission and reconciliation of rebate claims across multiple manufacturers Ongoing claims dispute management and documentation Expanded compliance monitoring and audit preparedness PVMCs pharmacy and administrative teams are small and already operate at functional capacity. Implementation of rebate administration processes would necessitate reallocation of limited personnel away from direct patient care and essential clinical and operational duties. These burdens would scale disproportionately for rural critical access hospitals relative to large integrated health systems. Disproportionate Impact on Critical Access and Rural Hospitals While a rebate-based model may be administratively feasible for large health systems with centralized billing departments and dedicated 340B teams, it presents unique and outsized challenges for critical access hospitals. Equity considerations specific to rural providers include: Minimal staffing redundancy to absorb new compliance and reporting workloads Limited negotiating leverage with manufacturers or third-party administrators Heightened vulnerability to reimbursement delays, administrative errors, or claim denials A rebate-based approach risks unintentionally disadvantaging the safety-net providers the 340B Program was designed to support. Impact on Patient Access and Community Health Any reduction in the effectiveness or reliability of the 340B Program has direct consequences for patient access in rural Alaska. Patients served by PVMC often have no practical alternatives for obtaining care or medications if services are reduced or delayed. Potential downstream impacts include: Reduced availability of outpatient and specialty therapies Delays in initiation or continuation of treatment Increased financial strain on a hospital already operating in a high-cost, low-volume environment In remote communities such as Valdez, even small disruptions can result in meaningful gaps in care. Concerns Regarding Expansion to IRA Negotiated Drugs HRSAs indication that a rebate-based model may be expanded to include drugs subject to the Inflation Reduction Acts Medicare Drug Price Negotiation Program through 2027 further amplifies these concerns. Many of these drugs are: High cost Clinically essential for chronic disease management Commonly used in outpatient and specialty care settings Including these medications in a rebate-based framework would significantly increase both financial exposure and administrative complexity for small rural hospitals. Summary and Conclusion For Providence Valdez Medical Center and similarly situated critical access hospitals, the current 340B upfront discount model is operationally feasible, financially predictable, and essential to maintaining access to care in remote communities. A transition to a rebate-based model would introduce: Significant cash flow instability Substantial new administrative burden Disproportionate impact on rural and safety-net providers Increased risk to patient access and continuity of care PVMC respectfully urges HRSA to carefully consider the real-world operational and financial constraints faced by small rural hospitals when evaluating whether to pursue a 340B rebate model pilot program. Thank you for the opportunity to provide input on this important issue. Comment on HRSA Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-001-0001 Submitted by: Providence Valdez Medical Center Valdez, Alaska Critical Access Hospital Date: April 2026 Introduction Providence Valdez Medical Center appreciates the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSA) Request for Information regarding the potential implementation of a 340B rebate model pilot program. PVMC is a Critical Access Hospital serving a geographically isolated coastal community in Valdez, Alaska, with no alternative acute care facilities available within hours of travel. As a rural safety-net provider, our hospital operates with limited staffing, narrow financial margins, and minimal tolerance for operational disruption. PVMC provides emergency, inpatient, and outpatient services, including outpatient infusion and specialty medication administration. Participation in the 340B Drug Pricing Program is a foundational component of our ability to sustain pharmacy services and ensure timely, reliable access to medications for our patients. Importance of the Current 340B Upfront Discount Model The longstanding upfront discount structure of the 340B Program provides immediate and predictable savings at the point of drug purchase. These characteristics are particularly critical for small rural hospitals that lack the economies of scale, staffing depth, and financial reserves available to larger health systems. At Providence Valdez Medical Center, participation in the 340B Program generates average savings exceeding $20,000 per month, which are reinvested directly into patient care and operational stability. These savings support: Maintenance of essential medication inventory for emergency and inpatient services Provision of outpatient therapies that would otherwise be financially unsustainable Continuity of pharmacy services in a remote, low-volume care setting The predictability and immediacy of the upfront discount model are essential to financial planning, medication procurement, and patient access in a critical access environment. Financial Impact of a Rebate-Based Model Transitioning the 340B Program from an upfront discount to a rebate-based structure would require covered entities to purchase drugs at full acquisition cost and await retrospective manufacturer reimbursement. For small rural hospitals such as PVMC, this shift would create substantial financial risk. Specific concerns include: Cash flow strain associated with delayed rebate adjudication and payment Reduced ability to procure and maintain inventory of high-cost medications Increased exposure to denied, delayed, or disputed rebates Unlike large health systems, PVMC does not maintain substantial cash reserves to buffer delayed reimbursement. Even brief or modest payment delays could materially impair our ability to maintain medication availability, particularly for high-cost outpatient, emergency, and specialty therapies. Administrative and Operational Burden A rebate-based model would introduce significant administrative and operational complexity beyond existing 340B compliance infrastructure. Based on HRSAs RFI and prior manufacturer rebate proposals, such a model would require: Transaction-level tracking of drug dispenses Submission and reconciliation of rebate claims across multiple manufacturers Ongoing claims dispute management and documentation Expanded compliance monitoring and audit preparedness PVMCs pharmacy and administrative teams are small and already operate at functional capacity. Implementation of rebate administration processes would necessitate reallocation of limited personnel away from direct patient care and essential clinical and operational duties. These burdens would scale disproportionately for rural critical access hospitals relative to large integrated health systems. Disproportionate Impact on Critical Access and Rural Hospitals While a rebate-based model may be administratively feasible for large health systems with centralized billing departments and dedicated 340B teams, it presents unique and outsized challenges for critical access hospitals. Equity considerations specific to rural providers include: Minimal staffing redundancy to absorb new compliance and reporting workloads Limited negotiating leverage with manufacturers or third-party administrators Heightened vulnerability to reimbursement delays, administrative errors, or claim denials A rebate-based approach risks unintentionally disadvantaging the safety-net providers the 340B Program was designed to support. Impact on Patient Access and Community Health Any reduction in the effectiveness or reliability of the 340B Program has direct consequences for patient access in rural Alaska. Patients served by PVMC often have no practical alternatives for obtaining care or medications if services are reduced or delayed. Potential downstream impacts include: Reduced availability of outpatient and specialty therapies Delays in initiation or continuation of treatment Increased financial strain on a hospital already operating in a high-cost, low-volume environment In remote communities such as Valdez, even small disruptions can result in meaningful gaps in care. Concerns Regarding Expansion to IRA Negotiated Drugs HRSAs indication that a rebate-based model may be expanded to include drugs subject to the Inflation Reduction Acts Medicare Drug Price Negotiation Program through 2027 further amplifies these concerns. Many of these drugs are: High cost Clinically essential for chronic disease management Commonly used in outpatient and specialty care settings Including these medications in a rebate-based framework would significantly increase both financial exposure and administrative complexity for small rural hospitals. Summary and Conclusion For Providence Valdez Medical Center and similarly situated critical access hospitals, the current 340B upfront discount model is operationally feasible, financially predictable, and essential to maintaining access to care in remote communities. A transition to a rebate-based model would introduce: Significant cash flow instability Substantial new administrative burden Disproportionate impact on rural and safety-net providers Increased risk to patient access and continuity of care PVMC respectfully urges HRSA to carefully consider the real-world operational and financial constraints faced by small rural hospitals when evaluating whether to pursue a 340B rebate model pilot program. Thank you for the opportunity to provide input on this important issue.
HRSA-2026-0001-1606(no commenter metadata)2026-04-16T04:00Z120,631 chars
See attached file(s)On behalf of the Multnomah County Community Health Center (MCCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. (See Attached Comment Letter) April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the Multnomah County Community Health Center (MCCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: This rebate model, as currently structured, will increase CHCs financial strains to the point that their current services and for some CHCs, their existence will be placed at risk. CHCs account for only 5% of total 340B spending, so an initial pilot can certainly be tested and refined without including them. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o As the only Ryan White Clinic in Oregon, the MCCHC also expects significant cost escalations from HIV drug spending and related HIV medication management. The expected increase in cost for Biktarvy, our most commonly prescribed HIV medication, will be over $7M in 2028. Six HIV medications are represented in our top 10 drugs by cost. MCCHC relies on 340B savings to assure life-saving HIV medications remain accessible to Oregonians. Furthermore, persons living with HIV often have complex medication regimens and require additional support services such as costly adherence packaging, mail order, and HIV medication refills free of charge when not covered by insurance. Currently, 340B savings are used to support these services. I. Multnomah County Community Health Health Center strongly Urges HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program 619 NW 6th Ave. Portland, Oregon 97209 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For more than three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. For MCCHC, this is not a theoretical policy change; it would directly disrupt local patient access, pharmacy operations, and the Countys ability to provide affordable medications. By requiring CHCs to purchase medications at full price and wait for rebates, the model would create significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on them. For the MCCHC in particular, the impact would be immediate and local: 26,000 340B prescriptions each month 60,000 health center patients a year Critical pharmacy operations, clinical support teams including clinical pharmacists, case managers, and medication access for uninsured and underinsured clients We strongly urge HRSA to exempt CHCs from any rebate model. If HRSA does not do so, it should at minimum limit the models scope and adopt enforceable protections that preserve patient access, ensure timely payments, and prevent covered entities from carrying the financial risk of the program. II. Patient Impact Reduced Access to Life Saving Medications Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be 619 NW 6th Ave. Portland, Oregon 97209 disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term 1 conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. 2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access 3 to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations at a time when many CHCs are responsible for controlling total cost of care in value-based pay agreements. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an 4 atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental 5 health crisis. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 619 NW 6th Ave. Portland, Oregon 97209 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and 6 death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. The availability and affordability of insulin is of particular importance to MCCHC patients - our health center dispenses 500 insulin prescriptions each month. Our underinsured and uninsured clients may receive a 28 to 90 day supply for a fee of $10 in compliance with the Executive Order. With a Rebate Model where we purchase at WAC and seek a Rebate later, we will no longer be able to provide insulin at such a low cost which will be detrimental to the health of our insulin-dependent patients. Imposing a rebate model on CHCs would only weaken the safety-net system that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, continuing to provide the drugs included in the pilot would become financially and operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Reduced Patient Care Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on direct patient care. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, reducing access to affordable medications and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate 6 2025 UDA Data, HRSA (hrsa.gov) 619 NW 6th Ave. Portland, Oregon 97209 discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. Furthermore, the new Medicare Fair Price (MFP) reconciliation has compounded the administrative burden and compliance process for CHCs. In the first quarter of 2026, we dispensed nearly 1,500 prescriptions selected for IPAY 2026. Based on an estimate of 10-15 minutes to reconcile each prescription claim, the administrative cost for the MCCHC to reconcile MFP refunds is substantial and ranges from 83-125 hours per month. With new drugs added each subsequent year, the MFP burden alone is diverting 340B resources away from direct patient care activities. We anticipate a Rebate Model to more than double that estimate. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The MCCHC estimates it will require an at least 1.0 FTE dedicated to monitoring and reconciling both MFP and 340B Rebate claims and refunds. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. The estimates below reflect MCCHCs review of current operations, staffing, software, and pharmacy workflows and are intended to illustrate the practical burdens a rebate model would create for our health center. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 619 NW 6th Ave. Portland, Oregon 97209 Sliding Fee Discount: MCCHC provided $1,882,763 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCCHC anticipates needing a minimum of 1.0 additional full-time equivalent (FTE)s to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Third Party Administrative Costs are anticipated to increase significantly to comply with manufacturer data requests and processing. Because pricing of vendor fees may be directly related to the costs of drug, the MFP changes will not only increase the direct price of product for our CHC, but will indirectly increase the charges for compliance and data management - we estimate that annual costs will increase by over $100K due to the MFP changes and new data reports. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1.0 FTE, 36% estimate needing 1.0 to 2.0 FTEs, and 7% project needing more than 2.0 FTEs to meet the anticipated demand of reporting 340B rebate claims. 7 Our health center estimates that we will need to hire at least 1.0 FTE new staff to address the increased administrative requirements of a rebate model, which includes submitting data, addressing or appealing rebate decisions, new tracking of inventory for multi-fill units, and other associated activities. Based on the high technical processes and compliance requirements, we anticipate that this role must be filled by a pharmacy technician, a role which is already experiencing national shortages, at a cost of approximately $140,000 per year, including fringe and benefits. In addition, a Rebate Model will add additional complexities to Multnomah County government accounting practices and require additional FTE from our financial analyst to be devoted to 340B. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual 8 costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities, including our Health Center. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. With more than 500 claims per month related to those 10 drugs, the MCCHC estimates that we will require over 100 hours per month to report and reconcile 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs 8 Ibid. 7 Internal NACHC assessment (99 responses). 619 NW 6th Ave. Portland, Oregon 97209 and operational burdens. The MCCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 60,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs of at least $100,000 to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend at least 4 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 619 NW 6th Ave. Portland, Oregon 97209 Simplified Records: The use of electronic medication administration records (e-MARs) helps our health center maintain compliance with these requirements, but comes at the significant cost of over $10,000 a month in fees, not including indirect fees of clinical staff time to reconcile data and account for any variances. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. The State of Oregon uses the Medicaid Exclusion File to exclude covered entities who elect to use 340B purchased medications for Medicaid patients to exclude all claims from these covered entities from Medicaid rebate invoices. This process virtually eliminates the risk of duplicate discounts and could be a model for other states and address pharmaceutical manufacturer concerns. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services and medication access that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price at the time of dispensing. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or 9 sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC 10 can adjust the cost of health care services, including medications, based on a patients income and family size. At the Multnomah County Community Health Center, medications are available at a discount based on medication costs at the known 340B cost- if WAC costs are used, prices for patients would skyrocket while the health center is forced to absorb an upfront fee - this uncertainty not only threatens our ability to pass along the discount to clients, but raises the risk of non-compliance with statutory sliding fee discount requirements. 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 9 HRSA FAQ 619 NW 6th Ave. Portland, Oregon 97209 CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every daily wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. For example, our health center is currently able to directly offer patients a 90 day supply of insulin for $10; if we were forced to distribute insulin at the WAC, the health center would be forced to carry an upfront cost of nearly $25,000 annually for Novolog alone or charge patients the difference in price. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies 11 with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. The Multnomah County Community Health Center pharmacies cadence for data submissions would be approximately every 2-weeks to account for abandoned prescriptions that are ultimately returned to stock. Submitting data every 14 days, we would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. This is equivalent to an increased cash on hand requirement of over $676,000 for the 2026 & 2027 MDPNP medications. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 619 NW 6th Ave. Portland, Oregon 97209 CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected 12 drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: 13 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,565,000 to purchase these 10 drugs under the proposed rebate model and $5,597,856 for the 2026 & 2027 drugs combined. Currently, our organization spends $483,650 to purchase these same 10 drugs at the 340B ceiling price. This represents a 430% increase in upfront capital required for procurement. 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 https://340bpricing.hrsa.gov/ 619 NW 6th Ave. Portland, Oregon 97209 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Multnomah County Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy services, mail order and delivery services, and adherence packaging services. All of these services are currently offered under our pharmacy program and only available as part of our patient-services 340B investments. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund fewer clinical staff roles like behavioral health providers or nurses. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 3,200 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Multnomah County Community Health Center estimates its 2026 and 2027 Annual Rebate Opportunity Cost to be approximately $515,254. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 619 NW 6th Ave. Portland, Oregon 97209 Multnomah County Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $213,741.The addition of 2027 and 2028 MFP drugs will increase the monthly drug spend by $1,374,817. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves or reduce clinical services. This is not a sustainable solution; funds that are currently dedicated to primary care providers and supporting mobile health would be compromised and lead to further reductions in services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 60,000 patients in Multnomah County depend on. a. Financial Impact of Rebate Denials and Delays Multnomah Countys Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the 14 confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 2026 & 2027 MDPNP selected drugs, even a conservative 5% denial rate would result in a net annual loss of $387,808. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot-progra m 619 NW 6th Ave. Portland, Oregon 97209 submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. I. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. A rebate model undermines, not strengthens, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. 15 15 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 619 NW 6th Ave. Portland, Oregon 97209 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 16 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers and patients it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their 17 issues to be resolved; for MCCHC, this would mean waiting for up to $16.5M in drug spending costs to be reconciled and appealed. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a 17 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 16 340B House Report Legislative History. H.R. REP. 102-384(II). 619 NW 6th Ave. Portland, Oregon 97209 system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms and impose additional data requirements on covered entities, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Covered entities simply do not have the resources required to engage in lengthy disputes with manufacturers. D. Rebate Determinations Must Align with Statutory Patient Definition 619 NW 6th Ave. Portland, Oregon 97209 Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or 18 methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of 19 MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 19 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf 619 NW 6th Ave. Portland, Oregon 97209 P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. II. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, 20 retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Multnomah County Community Health Center currently uses such tracking software 21 at a cost of over $100,000 per year. This cost is solely for the technology; our health center incurs additional staff costs to perform monthly reconciliation processes. We anticipate incurring additional costs from our electronic health record vendor to develop and send CAD claims for MFP and 340B Rebate collection. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. 21 Internal NACHC survey data 20 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 619 NW 6th Ave. Portland, Oregon 97209 Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. III. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. The Multnomah County Community Health Center currently employs 3.0 FTE to perform internal audits and ensure 340B program compliance. Our health center leadership including the Chief Executive Officer, Chief Operating Office, Chief Finance Officer, and Quality and Compliance Officer participate in the oversight of our 340B program. All clinical staff receive annual training on the 340B program and the key provisions of our 340B Policies and Procedures. Furthermore, our health center utilizes a contracted vendor to conduct routine rigorous, independent audits of our 340B program. This demonstrates a proven ability and commitment to manage 340B with integrity and accountability. 619 NW 6th Ave. Portland, Oregon 97209 In addition to implementing internal best practices, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. IV. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs, in conflict with the IRA which asserts drug manufacturers are responsible for deduplication. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. 22 Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 619 NW 6th Ave. Portland, Oregon 97209 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule 23 Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. 24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative 25 intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Such inconsistencies and IRA loopholes effectively mean the 340B program will no longer be a 25 H.R. REP. 102-384(II) 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 619 NW 6th Ave. Portland, Oregon 97209 safety net program for affordable medications, but a pathway for manufacturers to manipulate pricing so that 340B ceiling prices fall below the MFP. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that 26 it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS 27 has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority 28 28 42 U.S.C. 256b(a)(1) 27 Id. 26 42 U.S.C. 256b(a)(1) 619 NW 6th Ave. Portland, Oregon 97209 over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. 29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers 30 may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. 31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. 32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is 33 33 See 42 U.S.C 256b(a)(5)(A). 32 42 U.S.C. 256b(a)(5)(C). 31 42 U.S.C. 256b(a)(5)(C). 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 619 NW 6th Ave. Portland, Oregon 97209 illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. The Oregon Health Authority has asserted that it expects covered entities to submit Medicaid FFSs claims with the 340B price. This raises the risk of Oregon covered entities, including MCCHC, being reimbursed below cost if 340B Rebates are denied. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted. This demonstrates the infeasibility of a rebate model for many CHCs in states with similar 34 Medicaid billing policies. The State of Oregon has indicated their expectation is that CHCs continue to bill the post-rebate 340B cost; however, because pharmacies will purchase the drugs at WAC, their pharmacy management software will only have the WAC purchase price available for billing. This will require a labor-intensive manual workaround that is prone to substantial human error as indicated below. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement 35 for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 35 C.F.R. 447.518(a). 34 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static-assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_P ilot_Drugs.pdf 619 NW 6th Ave. Portland, Oregon 97209 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. This would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor, particularly when a 340B Rebate may be ultimately denied. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, 619 NW 6th Ave. Portland, Oregon 97209 a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in 36 this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. 37 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program 38 continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. 39 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement 39 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 38 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 37 42 C.F.R. 447.502 36 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. 619 NW 6th Ave. Portland, Oregon 97209 under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs 40 because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MPBID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 40 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 619 NW 6th Ave. Portland, Oregon 97209 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. 41 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. 42 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure 43 nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by 44 IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 42 42 U.S.C. 256b(a)(5)(A)(emphasis added). 41 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438/subpart-A/section-438.3 619 NW 6th Ave. Portland, Oregon 97209 obtain access to such data. This regulatory action represents the first time in recorded history that the federal 45 government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with 46 market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data 47 vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have 48 been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Two healthcare 49 attorneys recently warned that PBMs are engaging in discriminatory reimbursement for claims with 340B-purchased medications. Indeed, over 30 states have passed laws to prevent this manufacturer-payer 50 gamesmanship that seeks to usurp the 340B benefit. 51 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose 51 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract-pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 50 Barbarino, Adino A.J and Bennet, Steven L. PBMs Are Targeting Alabama Hospitals with Discriminatory Networks: What 340B Covered Entities Need to Know. Frier Levitt.Com https://www.frierlevitt.com/articles/pbm-discriminatory-networks-alaba. ma-340b-hospitals/. Accessed 4/7/2026. 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 619 NW 6th Ave. Portland, Oregon 97209 not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it 52 does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve 53 as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial 54 claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to 55 enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B 56 rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. 56 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 55 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 54 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 53 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 52 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 619 NW 6th Ave. Portland, Oregon 97209 HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. V. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly 57 referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program. And the legislative history of the 340B statute supports the position that rebate 58 models, while appropriate for ADAPs, may not be appropriate for CHCs. 59 59 H.R. REP. 102-384, 16 58 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 57 42 U.S.C. 256b(a)(5)(B) 619 NW 6th Ave. Portland, Oregon 97209 VI. Establishing a National, Neutral Claims Clearinghouse We recommend the Office of Pharmacy Affairs use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: 619 NW 6th Ave. Portland, Oregon 97209 Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completed and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. 619 NW 6th Ave. Portland, Oregon 97209 D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. 60 Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. 60 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 619 NW 6th Ave. Portland, Oregon 97209 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The Multnomah County Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Multnomah County Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The Multnomah County Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Michele Koder, Pharmacy Director. Sincerely, Anirudh Padmala Interim Executive Director Multnomah County Community Health Center Ritchie Longoria, PharmD Deputy Pharmacy Director Multnomah County Community Health Center Michele Koder, PharmD Pharmacy Director Multnomah County Community Health Center Adrienne Daniels, MPH Strategy and Policy Director Multnomah County Community Health Center 619 NW 6th Ave. Portland, Oregon 97209
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Comments of the Pascua Yaqui Tribe of Arizona. PASCUA YAQUI TRIBE OFFICE OF THE CHAIRMAN April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) Dear Director Britton, The Pascua Yaqui Tribe submits these comments in response to the Health Resources and Services Administration ("HRSA") Request for Information regarding the potential implementation of a rebate-based structure under the 340B Drug Pricing Program. The Pascua Yaqui Tribe ("Tribe") is a federally recognized Indian Tribe located in southern Arizona that operates a Tribal 638 self- governance health system providing integrated clinical and pharmacy services across two primary service locations in Tucson and Guadalupe. These facilities serve a patient population drawn from approximately 21,000 enrolled Tribal members, the majority of whom are low-income and depend on the Tribal health system for high-quality, locally accessible, and culturally appropriate access to primary care, specialty care, and prescription medications. While we appreciate HRSA's commitment to program integrity, the Tribe's programalong with similarly situated Tribal 638 in-house pharmacy programsshould be exempted from any rebate- based pilot, or resulting permanent program. Tribal health programs were expressly included as core safety-net beneficiaries under the 340B statute and do not present the program-integrity concerns the pilot is intended to address. For the Pascua Yaqui Tribe's health program, a rebate- based model would impose significant operational, financial, and drug access burdens that are incompatible with the structure and mission of its health system and the safety-net role Tribal programs are intended to fulfill under the 340B program. I. Operational Impact The 340B program's current point-of-sale discount model is operationally aligned with in-house pharmacy operations. A shift to a rebate model would impose substantial new administrative demands that the Tribe's pharmacy infrastructure is not resourced to absorb: Claims Tracking and Reconciliation: A rebate model would require robust claims submission, tracking, and reconciliation infrastructure. Unlike large health systems with dedicated billing departments, the Tribe's two pharmacieslike most Tribal health programsalready operate with limited and strained staffing. Implementing a compliant rebate process would impose significant new administrative costs with no corresponding benefit to the Tribe as a covered entity and would divert scarce resources away from patient care to support rebate administration, contrary to the purpose of the 340B program. Lag in Rebate Realization: Under a rebate model, savings would only be realized after a "1 7474 S. Camino De Oeste Tucson, Arizona 85757 Phone (520) 383-501G 4 FAX (520) 883-5014 1-888-443-0044 PASCUA IfAQUI TRIBE OFFICE OF THE CHAIRMAN claims cycle. Our pharmacies operate on tight cash flow and use 340B savings in real time to fund operations. Any delay in realizing these savings would create cash flow gaps that could force us to reduce pharmacy hours, defer drug purchases, or draw from other program funds needed to support direct patient services. Loss of Upfront Patient Discounts: The Tribe's pharmacy program relies on upfront 340B pricing to keep medications affordable for patients. A rebate model would delay those savings and make it harder to provide discounted medications at the time they are dispensed. II. Financial Impact The financial viability of our in-house pharmacy model is directly tied to the immediate savings that the 340B program provides at the point of purchase. A rebate model fundamentally disrupts this structure: Upfront Drug Acquisition Costs: Our pharmacies would be required to pay full wholesale acquisition cost (WAC) or contracted prices at the time of purchase and then await rebate payments. This represents a significant capital outlay that the Tribe's health program operating within a chronically underfunded federal Indian health delivery framework and relying on limited federal and Tribal funding with minimal reservesis not positioned to sustain. Purchasing drugs at WAC while awaiting rebates also creates a risk of exceeding wholesaler credit limits, which could interrupt the Tribe's ability to maintain adequate pharmacy inventory and ensure consistent patient access to medications. Risk of Rebate Denial or Clawback: Rebate models introduce the risk of claim denials, disputed eligibility determinations, or manufacturer-initiated clawbacks. For a system of our size, even a modest denial rate could result in material financial losses. Diversion of Program Resources: Any revenue generated through 340B savings is reinvested directly into patient care. A rebate model that reduces net savings even marginally would reduce our capacity to deliver core clinical and pharmacy services. Inequitable Impact on Small and Tribal Covered Entities: Large hospital systems and contract pharmacy chains are better positioned to absorb the administrative costs of a rebate model. Tribal in-house pharmacies lack economies of scale and would bear a disproportionate compliance burden relative to any operational benefit received. III. Drug Access Impact As noted above, our patient population is not only predominantly low-income but also experiences disproportionately high rates of chronic conditions and significant health disparities, including diabetes. Reliable, affordable access to medications is therefore not a matter of convenience for our patientsit is often the difference between managing a chronic condition and experiencing a preventable health crisis. A rebate-based model poses serious risks to the Tribe's ability to maintain consistent and timely access to necessary medications. 2 7474 S. Camino De Oeste Tucson, Arizona 85757 Phone (520) 883-5010 FAX (520) 83-50E4 1-888-443-0044 PASCUA YAQUI TRIBE OFFICE OF THE CHAIRMAN Risk to Medication Access for Reservation Patients: The Tribe's pharmacies serve patients both on the reservation and within its urban enclave, including elders and individuals with limited mobility who cannot easily access alternative pharmacies. Any disruption to the Tribe's in-house medication supplywhether due to cash-flow constraints or administrative delayswould directly and materially impair patient access to necessary prescriptions. Reduced Access to Needed Medications: If upfront drug costs create financial strain, our pharmacies may be forced to narrow formularies or restrict access to high-cost specialty drugs that the Tribe's patients with chronic and complex conditions depend on, including drugs for diabetes, cardiovascular disease, and behavioral health conditions that disproportionately burden our communities. W. Recommendations We respectfully urge HRSA to exempt Tribal health programs from any 340B rebate pilot, consistent with HRSA's trust responsibility to Tribal nations and the longstanding recognition of the unique status of Tribal covered entities under federal law. In the alternative, we request that HRSA: Conduct formal Tribal consultation prior to finalizing any rebate pilot design, as required under Executive Order 13175 and HRSA's Tribal Consultation Policy; Develop a Tribal-specific carve-out or alternative compliance pathway that preserves point-of-sale discounts for Tribal in-house pharmacies; Ensure that administrative burden associated with any rebate model is commensurate with the size and capacity of the covered entity; and If a rebate model is implemented, HRSA should require standardized, prompt rebate payments within clearly defined timeframes, backed by enforceable compliance mechanisms and adequate resourcing, so that covered entities are not required to finance drug purchases for extended periods or absorb the cash-flow burdens described above. The Tribe recognizes and respects HRSA's interest in strengthening program integrity. However, Tribal health facilities that operate in-house pharmacies serve defined patient populations through locally controlled dispensing systems and were expressly included by Congress as core safety-net participants in the 340B program. These programs are not the source of the program-integrity 3 7474 S. Camino De Oeste Tucson, Arizona 85757 Phone (520) 883-5010 FAX (520) 883-5014 1-888-443-0044 PASCUA YAQUI TRIBE OFFICE OF THE CHAIRMAN concerns identified in federal oversight reports, which have primarily focused on contract pharmacy arrangements and hospital eligibility oversight.12 Reforms addressing concerns associated with certain segments of the 340B program should be carefully tailored so they do not impose disproportionate burdens on Tribal health systems and other core safety-net providers that Congress expressly included as intended beneficiaries of the program. The 340B statute was designed to enable covered entities to "stretch scarce federal resources as far as possible" to serve vulnerable patients, and Tribal facilitiesoperating within the chronically underfunded federal Indian health delivery systemare among the providers most directly aligned with that purpose. A rebate model may address certain concerns, but it would do so at the expense of the Tribal safety-net providers the program was designed to protect. A narrower approach would be equally effective without imposing those harms. The Pascua Yaqui Tribe appreciates the opportunity to provide information and comments on the proposed 340B Rebate Model Pilot Program. If you have any questions, please contact our Healthcare Compliance Director & Quality, Ashley Page, at 520-879-6171 or Ashley.Pageapascuayaqui-nsn.gov. Sincerely, Julian Hernandez Chairman Pascua Yaqui Tribe cc: Oscar Flores Jr. Attorney General Office of the Attorney General Pascua Yaqui Tribe Dr. Tara M. Chico-Jarillo Executive Director Health Services Division Pascua Yaqui Tribe ' U. S. Govemment Accountability Office, 340B Drug Discount Program: Opportunities Remain to Improve HRSA Oversight of Eligibility and Compliance, GAO-26-108'784 (testimony before the Senate Committee on Health, Education, Labor, and Pensions, 2025). GAO identified the principal oversight challenges in the 340B program as relating to contract pharmacy compliance, nongovernmental hospital eligibility, and duplicate-discount prevention. 2 U. S. Govemment Accountability Office, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480 (June 2018). GAO concluded that reliance on retail contract pharmacies complicates oversight of diversion and duplicate-discount compliance and limits HRSA's ability to ensure adherence to core 340B program requirements. 4 7474 S. Camino De Oeste Tucson, Arizona 85757 Phone (520) 883-5010 FAX (520) 883-5014 1-888-443-0044
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See attached file(s): On behalf of the Multnomah County Community Health Center (MCCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. (See Attached Comment Letter) April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the Multnomah County Community Health Center (MCCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: This rebate model, as currently structured, will increase CHCs financial strains to the point that their current services and for some CHCs, their existence will be placed at risk. CHCs account for only 5% of total 340B spending, so an initial pilot can certainly be tested and refined without including them. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o As the only Ryan White Clinic in Oregon, the MCCHC also expects significant cost escalations from HIV drug spending and related HIV medication management. The expected increase in cost for Biktarvy, our most commonly prescribed HIV medication, will be over $7M in 2028. Six HIV medications are represented in our top 10 drugs by cost. MCCHC relies on 340B savings to assure life-saving HIV medications remain accessible to Oregonians. Furthermore, persons living with HIV often have complex medication regimens and require additional support services such as costly adherence packaging, mail order, and HIV medication refills free of charge when not covered by insurance. Currently, 340B savings are used to support these services. I. Multnomah County Community Health Health Center strongly Urges HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program 619 NW 6th Ave. Portland, Oregon 97209 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For more than three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. For MCCHC, this is not a theoretical policy change; it would directly disrupt local patient access, pharmacy operations, and the Countys ability to provide affordable medications. By requiring CHCs to purchase medications at full price and wait for rebates, the model would create significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on them. For the MCCHC in particular, the impact would be immediate and local: 26,000 340B prescriptions each month 60,000 health center patients a year Critical pharmacy operations, clinical support teams including clinical pharmacists, case managers, and medication access for uninsured and underinsured clients We strongly urge HRSA to exempt CHCs from any rebate model. If HRSA does not do so, it should at minimum limit the models scope and adopt enforceable protections that preserve patient access, ensure timely payments, and prevent covered entities from carrying the financial risk of the program. II. Patient Impact Reduced Access to Life Saving Medications Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be 619 NW 6th Ave. Portland, Oregon 97209 disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term 1 conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. 2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access 3 to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations at a time when many CHCs are responsible for controlling total cost of care in value-based pay agreements. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an 4 atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental 5 health crisis. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 619 NW 6th Ave. Portland, Oregon 97209 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and 6 death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. The availability and affordability of insulin is of particular importance to MCCHC patients - our health center dispenses 500 insulin prescriptions each month. Our underinsured and uninsured clients may receive a 28 to 90 day supply for a fee of $10 in compliance with the Executive Order. With a Rebate Model where we purchase at WAC and seek a Rebate later, we will no longer be able to provide insulin at such a low cost which will be detrimental to the health of our insulin-dependent patients. Imposing a rebate model on CHCs would only weaken the safety-net system that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, continuing to provide the drugs included in the pilot would become financially and operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Reduced Patient Care Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on direct patient care. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, reducing access to affordable medications and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate 6 2025 UDA Data, HRSA (hrsa.gov) 619 NW 6th Ave. Portland, Oregon 97209 discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. Furthermore, the new Medicare Fair Price (MFP) reconciliation has compounded the administrative burden and compliance process for CHCs. In the first quarter of 2026, we dispensed nearly 1,500 prescriptions selected for IPAY 2026. Based on an estimate of 10-15 minutes to reconcile each prescription claim, the administrative cost for the MCCHC to reconcile MFP refunds is substantial and ranges from 83-125 hours per month. With new drugs added each subsequent year, the MFP burden alone is diverting 340B resources away from direct patient care activities. We anticipate a Rebate Model to more than double that estimate. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The MCCHC estimates it will require an at least 1.0 FTE dedicated to monitoring and reconciling both MFP and 340B Rebate claims and refunds. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. The estimates below reflect MCCHCs review of current operations, staffing, software, and pharmacy workflows and are intended to illustrate the practical burdens a rebate model would create for our health center. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 619 NW 6th Ave. Portland, Oregon 97209 Sliding Fee Discount: MCCHC provided $1,882,763 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCCHC anticipates needing a minimum of 1.0 additional full-time equivalent (FTE)s to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Third Party Administrative Costs are anticipated to increase significantly to comply with manufacturer data requests and processing. Because pricing of vendor fees may be directly related to the costs of drug, the MFP changes will not only increase the direct price of product for our CHC, but will indirectly increase the charges for compliance and data management - we estimate that annual costs will increase by over $100K due to the MFP changes and new data reports. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1.0 FTE, 36% estimate needing 1.0 to 2.0 FTEs, and 7% project needing more than 2.0 FTEs to meet the anticipated demand of reporting 340B rebate claims. 7 Our health center estimates that we will need to hire at least 1.0 FTE new staff to address the increased administrative requirements of a rebate model, which includes submitting data, addressing or appealing rebate decisions, new tracking of inventory for multi-fill units, and other associated activities. Based on the high technical processes and compliance requirements, we anticipate that this role must be filled by a pharmacy technician, a role which is already experiencing national shortages, at a cost of approximately $140,000 per year, including fringe and benefits. In addition, a Rebate Model will add additional complexities to Multnomah County government accounting practices and require additional FTE from our financial analyst to be devoted to 340B. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual 8 costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities, including our Health Center. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. With more than 500 claims per month related to those 10 drugs, the MCCHC estimates that we will require over 100 hours per month to report and reconcile 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs 8 Ibid. 7 Internal NACHC assessment (99 responses). 619 NW 6th Ave. Portland, Oregon 97209 and operational burdens. The MCCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 60,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs of at least $100,000 to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend at least 4 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 619 NW 6th Ave. Portland, Oregon 97209 Simplified Records: The use of electronic medication administration records (e-MARs) helps our health center maintain compliance with these requirements, but comes at the significant cost of over $10,000 a month in fees, not including indirect fees of clinical staff time to reconcile data and account for any variances. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. The State of Oregon uses the Medicaid Exclusion File to exclude covered entities who elect to use 340B purchased medications for Medicaid patients to exclude all claims from these covered entities from Medicaid rebate invoices. This process virtually eliminates the risk of duplicate discounts and could be a model for other states and address pharmaceutical manufacturer concerns. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services and medication access that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price at the time of dispensing. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or 9 sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC 10 can adjust the cost of health care services, including medications, based on a patients income and family size. At the Multnomah County Community Health Center, medications are available at a discount based on medication costs at the known 340B cost- if WAC costs are used, prices for patients would skyrocket while the health center is forced to absorb an upfront fee - this uncertainty not only threatens our ability to pass along the discount to clients, but raises the risk of non-compliance with statutory sliding fee discount requirements. 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 9 HRSA FAQ 619 NW 6th Ave. Portland, Oregon 97209 CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every daily wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. For example, our health center is currently able to directly offer patients a 90 day supply of insulin for $10; if we were forced to distribute insulin at the WAC, the health center would be forced to carry an upfront cost of nearly $25,000 annually for Novolog alone or charge patients the difference in price. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies 11 with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. The Multnomah County Community Health Center pharmacies cadence for data submissions would be approximately every 2-weeks to account for abandoned prescriptions that are ultimately returned to stock. Submitting data every 14 days, we would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. This is equivalent to an increased cash on hand requirement of over $676,000 for the 2026 & 2027 MDPNP medications. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 619 NW 6th Ave. Portland, Oregon 97209 CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected 12 drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: 13 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,565,000 to purchase these 10 drugs under the proposed rebate model and $5,597,856 for the 2026 & 2027 drugs combined. Currently, our organization spends $483,650 to purchase these same 10 drugs at the 340B ceiling price. This represents a 430% increase in upfront capital required for procurement. 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 https://340bpricing.hrsa.gov/ 619 NW 6th Ave. Portland, Oregon 97209 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Multnomah County Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy services, mail order and delivery services, and adherence packaging services. All of these services are currently offered under our pharmacy program and only available as part of our patient-services 340B investments. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund fewer clinical staff roles like behavioral health providers or nurses. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 3,200 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Multnomah County Community Health Center estimates its 2026 and 2027 Annual Rebate Opportunity Cost to be approximately $515,254. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 619 NW 6th Ave. Portland, Oregon 97209 Multnomah County Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $213,741.The addition of 2027 and 2028 MFP drugs will increase the monthly drug spend by $1,374,817. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves or reduce clinical services. This is not a sustainable solution; funds that are currently dedicated to primary care providers and supporting mobile health would be compromised and lead to further reductions in services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 60,000 patients in Multnomah County depend on. a. Financial Impact of Rebate Denials and Delays Multnomah Countys Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the 14 confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 2026 & 2027 MDPNP selected drugs, even a conservative 5% denial rate would result in a net annual loss of $387,808. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot-progra m 619 NW 6th Ave. Portland, Oregon 97209 submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. I. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. A rebate model undermines, not strengthens, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. 15 15 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 619 NW 6th Ave. Portland, Oregon 97209 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 16 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers and patients it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their 17 issues to be resolved; for MCCHC, this would mean waiting for up to $16.5M in drug spending costs to be reconciled and appealed. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a 17 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 16 340B House Report Legislative History. H.R. REP. 102-384(II). 619 NW 6th Ave. Portland, Oregon 97209 system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms and impose additional data requirements on covered entities, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Covered entities simply do not have the resources required to engage in lengthy disputes with manufacturers. D. Rebate Determinations Must Align with Statutory Patient Definition 619 NW 6th Ave. Portland, Oregon 97209 Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or 18 methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of 19 MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. 19 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf 619 NW 6th Ave. Portland, Oregon 97209 P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. II. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, 20 retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Multnomah County Community Health Center currently uses such tracking software 21 at a cost of over $100,000 per year. This cost is solely for the technology; our health center incurs additional staff costs to perform monthly reconciliation processes. We anticipate incurring additional costs from our electronic health record vendor to develop and send CAD claims for MFP and 340B Rebate collection. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. 21 Internal NACHC survey data 20 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 619 NW 6th Ave. Portland, Oregon 97209 Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. III. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. The Multnomah County Community Health Center currently employs 3.0 FTE to perform internal audits and ensure 340B program compliance. Our health center leadership including the Chief Executive Officer, Chief Operating Office, Chief Finance Officer, and Quality and Compliance Officer participate in the oversight of our 340B program. All clinical staff receive annual training on the 340B program and the key provisions of our 340B Policies and Procedures. Furthermore, our health center utilizes a contracted vendor to conduct routine rigorous, independent audits of our 340B program. This demonstrates a proven ability and commitment to manage 340B with integrity and accountability. 619 NW 6th Ave. Portland, Oregon 97209 In addition to implementing internal best practices, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. IV. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs, in conflict with the IRA which asserts drug manufacturers are responsible for deduplication. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. 22 Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 619 NW 6th Ave. Portland, Oregon 97209 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule 23 Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. 24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative 25 intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Such inconsistencies and IRA loopholes effectively mean the 340B program will no longer be a 25 H.R. REP. 102-384(II) 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 619 NW 6th Ave. Portland, Oregon 97209 safety net program for affordable medications, but a pathway for manufacturers to manipulate pricing so that 340B ceiling prices fall below the MFP. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that 26 it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS 27 has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority 28 28 42 U.S.C. 256b(a)(1) 27 Id. 26 42 U.S.C. 256b(a)(1) 619 NW 6th Ave. Portland, Oregon 97209 over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. 29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers 30 may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. 31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. 32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is 33 33 See 42 U.S.C 256b(a)(5)(A). 32 42 U.S.C. 256b(a)(5)(C). 31 42 U.S.C. 256b(a)(5)(C). 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 619 NW 6th Ave. Portland, Oregon 97209 illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. The Oregon Health Authority has asserted that it expects covered entities to submit Medicaid FFSs claims with the 340B price. This raises the risk of Oregon covered entities, including MCCHC, being reimbursed below cost if 340B Rebates are denied. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted. This demonstrates the infeasibility of a rebate model for many CHCs in states with similar 34 Medicaid billing policies. The State of Oregon has indicated their expectation is that CHCs continue to bill the post-rebate 340B cost; however, because pharmacies will purchase the drugs at WAC, their pharmacy management software will only have the WAC purchase price available for billing. This will require a labor-intensive manual workaround that is prone to substantial human error as indicated below. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement 35 for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 35 C.F.R. 447.518(a). 34 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static-assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_P ilot_Drugs.pdf 619 NW 6th Ave. Portland, Oregon 97209 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. This would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor, particularly when a 340B Rebate may be ultimately denied. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, 619 NW 6th Ave. Portland, Oregon 97209 a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in 36 this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. 37 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program 38 continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. 39 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement 39 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 38 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 37 42 C.F.R. 447.502 36 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. 619 NW 6th Ave. Portland, Oregon 97209 under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs 40 because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MPBID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 40 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 619 NW 6th Ave. Portland, Oregon 97209 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. 41 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. 42 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure 43 nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by 44 IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 42 42 U.S.C. 256b(a)(5)(A)(emphasis added). 41 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438/subpart-A/section-438.3 619 NW 6th Ave. Portland, Oregon 97209 obtain access to such data. This regulatory action represents the first time in recorded history that the federal 45 government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with 46 market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data 47 vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have 48 been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Two healthcare 49 attorneys recently warned that PBMs are engaging in discriminatory reimbursement for claims with 340B-purchased medications. Indeed, over 30 states have passed laws to prevent this manufacturer-payer 50 gamesmanship that seeks to usurp the 340B benefit. 51 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose 51 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract-pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 50 Barbarino, Adino A.J and Bennet, Steven L. PBMs Are Targeting Alabama Hospitals with Discriminatory Networks: What 340B Covered Entities Need to Know. Frier Levitt.Com https://www.frierlevitt.com/articles/pbm-discriminatory-networks-alaba. ma-340b-hospitals/. Accessed 4/7/2026. 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 619 NW 6th Ave. Portland, Oregon 97209 not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it 52 does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve 53 as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial 54 claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to 55 enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B 56 rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. 56 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 55 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 54 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 53 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 52 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 619 NW 6th Ave. Portland, Oregon 97209 HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. V. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly 57 referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program. And the legislative history of the 340B statute supports the position that rebate 58 models, while appropriate for ADAPs, may not be appropriate for CHCs. 59 59 H.R. REP. 102-384, 16 58 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 57 42 U.S.C. 256b(a)(5)(B) 619 NW 6th Ave. Portland, Oregon 97209 VI. Establishing a National, Neutral Claims Clearinghouse We recommend the Office of Pharmacy Affairs use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: 619 NW 6th Ave. Portland, Oregon 97209 Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completed and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. 619 NW 6th Ave. Portland, Oregon 97209 D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. 60 Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. 60 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 619 NW 6th Ave. Portland, Oregon 97209 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The Multnomah County Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Multnomah County Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The Multnomah County Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Michele Koder, Pharmacy Director. Sincerely, Anirudh Padmala Interim Executive Director Multnomah County Community Health Center Ritchie Longoria, PharmD Deputy Pharmacy Director Multnomah County Community Health Center Michele Koder, PharmD Pharmacy Director Multnomah County Community Health Center Adrienne Daniels, MPH Strategy and Policy Director Multnomah County Community Health Center 619 NW 6th Ave. Portland, Oregon 97209
HRSA-2026-0001-1609Keck Medicine of USC2026-04-16T04:00Z11,526 chars
See attached file(s) April 13, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Keck Medicine of the University of Southern California, comprised of Keck Hospital of USC, USC Norris Cancer Hospital, USC Arcadia Hospital, USC Verdugo Hills Hospital, and over 100 clinics, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Keck Medicine of USC that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Keck Medicine of USC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Keck Medicine of USC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Keck Medicine of USC can spend on patient care and comprehensive health care services. Administrative Costs and Sta1ing Impact Under A Potential 340B Rebate Program. Any rebate program would require Keck Medicine of USC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Keck Medicine of USC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Keck Medicine of USC does not currently have the stac needed to comply with a Rebate Program. We estimate a 20% increase on FTEs, additional IT fees, and potentially a new third-party vendor will be needed to manage and track the rebates expected. The new third-party vendor will require a percentage of the rebates received as payment. There will also be additional fees expected from legal counsel and consultants to ensure best practice workflows. Expending fees for these administrative vendor costs is counter to the intent of the 340B program. We anticipate many denials resulting in significant ecorts to receive the respective rebate. We are currently working on a good faith inquiry (GFI) for a non-340B dispensation of an MFP drug that was dispensed 1/2/2026 for which we are still owed a rebate on, foreshadowing the long and costly process likely with pharmaceutical companies under a rebate model. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Keck Medicine of USC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Keck Medicine of USC currently audits 340B data through a third-party vendor. The 340B rebate model requires reporting of data that live in many dicerent systems. These reports do not currently exist in most hospitals and would require developers to work on creating these novel reports. The burden associated with a potential 340B Rebate Model Pilot Program is concerning and significant. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Keck Medicine of USC to ecectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful adverse impact on our institution and our ability to serve patients. Our organizations payment terms are currently 7 days and an expansion to a 10-day window will create added costs to the system and reduce cash on hand. Adverse Impacts of These Additional Costs And Burdens. All of these many dicerent costs and burdens add up. Unfortunately, that means that Keck Medicine of USC will no longer be able to use our 340B savings as ecectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will sucer in concrete ways. The additional costs could hamper our ability to expand clinics into rural areas that bring high- level medical care to patients that otherwise would have to travel great distances. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Keck Medicine of USC reasonably relied on this history when designing its internal operations, stacing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. Budgeting, charitable programming, financial projections, and impact to long term planning for new services and repairs are built around the upfront discount. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, the massive costs that this disruption will impose on 340B hospitals like ours, and the reduction in available resources to care for underserved patients, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We have a GFI open for a January 2, 2026, dispensation for which we are still owed an MFP rebate for and have been redirected back and forth between Beacon and 340B ESP. In addition, the manufacturer has repeatedly requested additional data to be submitted to 340B ESP for invoicing dating back to October 2025. E1orts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Keck Medicine of USC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. During a request from manufacturers for assistance with 340B deduplication, Keck Medicine of USC has very few duplications, and for those rare few we have successfully resolved via good faith ecorts with the manufacturer. For all of these reasons, Keck Medicine of USC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived ecort, it must allow Keck Medicine of USC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in ecect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact Andranik Gelejian at andranik.gelejian@med.usc.edu if you have questions. Sincerely, Steven D. Shapiro, M.D. Rod Hanners Senior Vice President for Health A5airs Chief Executive O5icer University of Southern California Keck Medicine of USC ,
HRSA-2026-0001-1610Community Care of West Virginia2026-04-16T04:00Z13,381 chars
See attached file(s) Co munity Carc of West Virginia PO Box 217 Rock Cave, WV 26234 (304) 924-6262 www.CCWV.org April 16, 2025 Chantelle Britton Director Office of Pharrnacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Community Care of West Virginia began operations in 1979 with a single medical clinic, envisioned by a group of community leaders who recognized a critical gap in access to care in their rural Appalachian comrnunity. Through grassroots effortsincluding donated materials and volunteer laborthe cornrnunity constructed a clinic and recruited a primary care physician, establishing what becarne the "Tri-County Health Clinic." This origin is not just historyit reflects the foundation of the Community Health Center (CHC) model: communities identifying need and building sustainable solutions where traditional healthcare systems have failed to reach. Between 1993 and 2011, the organization expanded significantly, opening six primary care clinics and four school-based wellness centers across five counties: Upshur, Clay, Pocahontas, Randolph, and Harrison. In 2005, Tri-County Health Clinic was among the first health centers in West Virginia to implement an electronic health record system, demonstrating an early commitment to quality, accountability, and coordinated care. In 2010, Tri-County Health Clinic merged with Prirnary Care Services in Clay County to form Community Care of West Virginia, Inc. Today, CCWV has grown into a comprehensive, integrated healthcare system employing over 600 individuals. We operate twenty (20) health center locations, forty-eight (48) school-based wellness sites, one (1) dental clinic, ten (10) in- house 340B pharrnacies, one (1) rnobile unit, and maintain twenty-six (26) contract pharmacy partnerships. We now serve 54,584 patients (2025 UDS) across 34 West Virginia countiesmany of whom live in geographically isolated areas with limited transportation, high poverty rates, and significant barriers to rnanaging their health outcomes. Our mission rernains unchanged: to help our cornmunities live the healthiest lives possible by meeting both irnmediate and long-term healthcare needs through accessible, high-quality, and cost-effective care. The 340B Program: A Critical Lifeline, not a Supplemental Benefit The 340B Drug Pricing Program is not ancillary to our operationsit is foundational. It is the mechanisrn that allows Comrnunity Care of West Virginia, and CHCs nationwide, to extend care beyond the exam room and address the real-world barriers patients face in accessing treatment. The proposed transition frorn an upfront discount model to a retrospective rebate model represents a fundamental restructuring of this prograrn. Rather than strengthening oversight or irnproving efficiency, this shift reassigns financial risk from manufacturers to safety-net providers, placing the burden squarely on organizations that already operate with limited margins and serve the highest-need populations. This is not a theoretical concern. Based on national assessments from the National Association of Comrnunity Health Centers (NACHC), CHCs across the counny are already identifying significant operational and financial threats under a rebate model frarnework. FINANCIAL IMPACT: FROM SUSTAINABILITY TO INSTABILITY Comrnunity Care of West Virginia serves over 54,584 patients, nearly 38% of whom are uninsured or underinsured. These patients often face high deductibles, unaffordable copays, and competing financial priorities such as housing, utilities, and food. Within this population: 20,867 patients received 145,827 340B-eligible prescriptions 3,262 prescriptions were filled through contract pharmacies Providing access to these rnedications requires a coordinated infrastructure spanning in-house pharmacies, contract pharmacies, eligibility systems, and financial assistance programsat an annual administrative cost exceeding $2.9 million. However, the rnost critical function of the 340B program is not administrativeit is patient stabilization. At CCWV, when a patient experiences sudden financial hardship, we do not delay care. We allow patients to attest to need, and we immediately pass 340B savings on to them. This flexibility is what prevents treatment interruptions, hospitalizations, and long-term complications. Under a rebate model, this system collapses: Because savings are no longer realized at the point of sale, there are no funds available to bridge affordability gaps. This creates a dangerous lag between patient need and financial supportone that patients cannot afford. In 2025 alone: CCWV passed $647,000 in savings directly to patients through 29,360 at-cost prescriptions Provided $529,000 in copay assistance across more than 2,400 prescriptions These are not abstract figuresthey represent patients who were able to take their medications instead of going without. Patient Voices: The Reality Behind the Data "My Cornrnunity Care doctor put rne on a blood thinner... my copay was over $200 a month. I didn't know what to do... I am very thankful." "The program has made it so I don't have to go without the prescriptions I need." "[Copay assistance] has helped tremendously... I can pay my mortgage, utilities, and buy food. It has been a Iifesaver." These stories illustrate what policy discussions often overlook: patients are not choosing between medications and convenience; they are choosing between medications and survival. 340B Savings: Direct Investment in Community Infrastructure 340B savings are not retained, they are reinvested into essential services: In-house pharmacies (45%) ensure irnmediate access School-based health clinics (15%) bring care to children where they are Rural clinics (25%) rnaintain access in underserved areas Dental services (5%) address critical but often neglected needs Patient savings (10%) directly reduce financial burden Telehealth expands reach across geographic barriers Without these savings, these services are not reducedthey are at risk of elimination. A STRUCTURAL SHIFT WITH SYSTEMIC CONSEQUENCES The IRA-MFP rebate model reverses the defining feature of the 340B prograrn: predictable, upfront savings. Instead, CHCs must: Purchase medications at or near Wholesale Acquisition Cost (WAC) Wait for reimbursement through a complex rebate process Absorb delays, denials, and discrepancies Projected Impact Revenue losses: $1.7M (2026), $2.6M (2027) Drug acquisition costs increase from $159K to $6.1M (2026) This is not an operational adjustmentit is a fundamental financial disruption. THE REALITY OF CASH FLOW: NOT 10 DAYS-BUT 20-30 DAYS OR MORE While the proposed model suggests a 10-day rebate window, real-world pharmacy operations tell a different story: Medications must be stocked in advance (2-5 days) Prescriptions often remain in will-call for several days Unclaimed prescriptions must be reversed Claims cannot be submitted until confirmed pickup As a result, CHCs are effectively financing drug costs for 20-30 days or longer. This exposes CHCs to: Liquidity strain Increased borrowing Service disruption risk ADMINISTRATIVE COMPLEXITY: A MULTIPLIER EFFECT The rebate model introduces a layered adrninistrative burden requiring: End-to-end transaction tracking Manufacturer-specific reporting Reconciliation across multiple systems Dispute resolution for denials Disputes alone may require more time and staffing than the original claim processing. Projected additional cost: $450,000 annually PATIENT IMPACT: CLINICAL CONSEQUENCES, NOT JUST FINANCIAL The rebate model directly limits access to life-sustaining medications. Examples: Eliquis: 1 8x cost increase Jardiance: 574x increase Farxiga: 137x increase These medications: Prevent stroke and heart failure Manage chronic disease Reduce hospitalization Without access, patients face: Treatment interruption Disease progression Increased rnortality INSULIN: WHERE POLICY AND REALITY COLLIDE There is currently no operational pathway to provide discounted insulin at the point of care under a rebate model. Patients will be forced to ration insulin or forgo it entirely. For individuals with Type 1 diabetes, this is not a financial inconvenience, it is a life-threatening scenario. SYSTEM-WIDE IMPACT: WHAT WILL BE LOST CCWV anticipates: Reduced clinic hours Workforce reductions Elimination of patient assistance prograrns Scaling back of school-based services Every dollar diverted to rebate adrninistration is a dollar removed from patient care, the following illustrate the impact our school-based programs have had on long-term patient outcornes and show without this critical support, disease, and physical and mental illnesses could go undiagnosed with dire consequences. Case Example 1: A 16-year-old high school student struggled with severe anxiety and depression while also Acing transportation barriers and food insecurity-common challenges in high- poverty communities. Although her school counselor was dedicated, the volume and complexity of need made additional support essential. Through school-based mental health services, the student received therapy to build coping skills, confidence, and self-advocacy. Clinicians also helped her access a local food pantry and coordinated with the school counselor and rnedical team to address her physical health. As graduation approached, staff ensured a warm handoff to post-secondary mental health care. By addressing both mental health and social drivers of health, school-based services helped transform a student who felt overwhelmed into one who felt capable, supported, and prepared for life after high school, outcomes that directly align with educational success and workforce readiness. Case Example 2: An 11-year-old student came to her school-based health center with what initially looked like a routine respiratory illness. Because care was available at school, the provider promptly re-evaluated her when symptoms worsened. Abnorinal lung sounds and a chest mass triggered immediate imaging, which revealed a large mediastinal tumor. Within hours, the student and her inother, who is a single, working parent, were brought in, and the child was admitted to the PICU that same day. She was diagnosed with B-cell acute lymphohlastic leukemia and began lifesaving treatment immediately. Without school-based care, this diagnosis would almost certainly have been delayed due to access barriers, potentially changing the child's prognosis. Today, she is back in school and responding well to treatment. This case underscores how school-based health centers do far more than treat minor illnesses-they save lives, especially in rural comrnunities where access to care is limited. Case Example 3: After a student fell during gym class, school staff requested an evaluation at the school-based health center. The student was uninsured and had no clear pathway to specialty care. Although his pain initially seemed mild, the SBHC provider ordered imaging out of caution. The X-ray revealed an aggressive bone lesion, andfollow-up MRI confirmed a malignant tumor. What followed was a coordinated, school-centered response: school staff, clinicians, and hospital systems worked together to communicate with the family, arrange advanced imaging, and connect the student to pediatric oncology-without financial harm. Early diagnosis likely prevented amputation and significantly improved the student's outcome. This case demonstrates how school-based health centers close equity gaps by providing access to timely, high-quality care for students who would otherwise fall through the cracks. Thesc stories show that school-bascd health funding is not optional, it is essential infrastructure. It saves lives, prevents crises, supports mental health, promotes equity, and ensures students arc hcalthy enough to learn and succccd. THE POLICY FAILURE: SHIFTING RISK WITHOUT SAFEGUARDS The proposed model allows: Manufacturers to deny rebates without transparency Delayed or incomplete payments Undefined dispute tirnelines With a 38% denial rate, CCWV projects a $3.3M annual loss. This effectively turns CHCs into interest-free lenders to manufacturers. A BETTER PATH: NEUTRAL CLAIMS CLEARINGHOUSE A Neutral Claims Clearinghouse would: Preserve upfront savings Improve data accuracy Reduce administrative burden Protect patient access CONCLUSION: PROTECT THE INTENT OF 340B The 340B program was designed to allow safety-net providers to stretch scarce federal resources. The rebate rnodel does the opposite. Cornmunity Care of West Virginia strongly urges HRSA to: Exempt CHCs frorn the 340B Rebate Model Pilot Program Failure to do so will: Reduce access to care Destabilize providers Harm the most vulnerable patients Comrnunity Care of West Virginia appreciates the opportunity to respond and looks forward to continued engagement. If you have questions, please contact Patricia Collett, CEO, at trish.collett@ccwv.org. Patricia Collett, CEO Comrnunity Care of West Virginia, Inc.
HRSA-2026-0001-1611HealthNet, Inc.2026-04-17T04:00Z29,846 chars
See attached file(s) 1 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthNet, Inc. and the 55,000 of patients we serve, I appreciate the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. Summary of Recommendations: In short, HealthNet strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt Community Health Centers (CHCs) due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Summary of Comments: In these comments, HealthNet explains: A. The importance of 340B savings to our ability to provide high-quality, affordable primary care, behavioral health, dental care, specialty care and support services to the 55,000 low-income and uninsured patients we serve each year. B. How a rebate model will create massive cashflow, administrative, and other costs for HealthNet and the states CHCs, imperiling our financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that HealthNets low-income patients rely on. CHCs like HealthNet serve as the backbone of the nations safety net. Nationally, in 2024 CHCs have served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. For 58 years, HealthNet has served Indiana as a nonprofit Federally Qualified Health Center (FQHC), operating 10 sites and a mobile unit across three counties. Each year, we care for approximately 55,000 Hoosiersnearly half of whom are childrensupported by a dedicated team of 580 employees, making HealthNet a significant local employer. We provide comprehensive services including medical, dental, behavioral health, pharmacy, and social support, all designed to prevent avoidable emergency room visits and hospitalizations. HealthNet is also part of Indianas broader network of 41 CHCs, which collectively serve more than 820,000 Hoosiers, the majority of whom are low-income and about 54% of whom are covered by Medicaid. As a 340B-covered entity, HealthNet partners with a diverse network of contract pharmacies primarily across Marion and Monroe counties in Central Indiana to reach eligible patients. This program enables us to provide essential prescriptions at prices that are often far below retail cost at select contract pharmacies to eligible patients, improving adherence and health outcomes for our most vulnerable patients. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Low-cost prescription drug services are available to all HealthNet patients at our on-site pharmacy located at HealthNet Barrington Health & Dental Center. For HealthNet and other CHCs, 340B savings are essential to our financial stability, and our ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations we care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example at HealthNet, 340B savings allow us to reinvest directly into the care that keeps patients healthy and lowers overall costssupporting clinical pharmacists, care coordinators, social workers, dietitians and medical staff who help patients stay on medications, manage chronic conditions (like hypertension, diabetes, asthma and rheumatoid arthritis), and avoid complications. In other words, 340B makes it possible to deliver the kind of high-quality, preventive care that reduces emergency room visits and hospitalizations, ultimately saving Medicaid dollars. Without it, this cost-efficient model begins to break down. As explained below, the rebate model will significantly reduce the level of 340B savings that HealthNet will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for HealthNets patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that HealthNet has built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for HealthNet and other CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated nationally that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than we currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. HealthNet estimates an added burden of $75,000$150,000 in upfront monthly spending on these medications, with reimbursement timing that remains uncertain. o Also note that HealthNet and other CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. This financial strain (including the uncertainty around their Federal grant funding and our low/negative margins) are well known, so any creditor willing to lend to us will charge above-average rates, and many may seek to put liens on our buildings. 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income Commented [AG1]: Is it worth adding the specialties the AH relationship brings to HN? 4 o Exceeding wholesaler credit limits could halt medication ordering entirely, with direct and immediate consequences for patient care. o The proposed 10-day rebate payment window lacks meaningful enforcement mechanisms. Experience with the current MFP/Beacon Medicare Transaction Facilitator demonstrates that manufacturers routinely deny claims on vague or unpublished criteria and have failed to pay corrected rebates on time providing little confidence that a 340B rebate model would perform more reliably. Massive administrative burdens: A rebate model will require HealthNet and all other participating CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. At HealthNet, we anticipate needing to hire at least two additional staff to manage the added complexity of data reporting, compliance, rebate tracking, and reconciliation. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts we currently receive that lower our total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force HealthNet and other CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) These costs arrive at a moment of significant financial strain. Since 2024, HealthNet has been forced to reduce staff, eliminate programs, and consolidate services in response to Medicaid cuts. 5 HealthNets PPS (Prospective Payment System) ratea fixed Medicaid reimbursement amount intended to cover the average cost of a visitdoes not cover the full cost of care, resulting in an annual shortfall of approximately $560,000. This gap reflects a structural underpayment that is compounded by broader payer mix changes and rising uncompensated care. Historically, 340B savings have helped HealthNet offset this gap and sustain essential services for uninsured and underinsured patients. These funds are not surplus; they are foundational to maintaining access and operations. HealthNet is also experiencing significant shifts in coverage that further increase reliance on these resources. Medicaid, our largest payer, has declined from 70% of visits in January 2022 to 55.5% in January 2026. Each 1% shift in Medicaid volume represents approximately $1.9 million in revenue, for a cumulative impact of $27.5 million in lost revenue over this period. At the same time, the uninsured rate has nearly doubledfrom 9.8% to 19.1%and we now expect that 1 in 5 patients in 2026 will be uninsured. Indiana Medicaid is positioned in 2026 to further restrict all Indiana 340B covered entities access to 340B. The 340B programs upfront discount structure has been essential to maintaining financial stability. A rebate model would significantly compound these pressures. As a Federally Qualified Health Center, we provide care regardless of ability to pay. While we offer a sliding fee scale (typically $20$50 per visit), many patients are unable to contribute, resulting in approximately $8.4 million annually in uncompensated care. 340B savings are directly used to sustain this care and support critical enabling services, including care coordination, interpretation, transportation assistance, health screenings, and care management that help reduce downstream costs. The proposed Rebate Pilot would eliminate approximately $1 million annually in 340B- supported resources for HealthNetfunding that is currently essential to maintaining access and service capacity. Taken together, declining Medicaid coverage, rising uninsured rates, and the loss of 340B support under the rebate pilot create a compounding financial strain. Without these resources, HealthNet will be forced to make immediate and significant reductions in services, staffing, and potentially sites, as no alternative funding sources exist at this scale. In practical terms, these reductions would limit access to primary care, increase reliance on emergency departments, and ultimately drive higher overall Medicaid costsundermining a model that has consistently delivered cost-effective, community- based care. 6 Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for HealthNet and other CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. o As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. o HealthNet cannot accurately calculate real-time discounts when purchasing at WAC. Pharmacy software continuously overwrites manually added 340B price files, making point-of-sale discount calculation unreliable. o Stocking certain rebate-model drugs may no longer be fiscally viable, potentially requiring patients to make multiple return tripsa significant burden for low- income patients managing complex, chronic conditions and/or transportation barriers. o Patients managing diabetes, hypertension, and arthritisconditions that are prevalent in CHC populations and heavily represented in the Medicare Drug Price Negotiation Program drug listface the greatest risk of disrupted access, medication rationing, and adverse health outcomes. o In 2025, HealthNets participation in 340B enabled over 740 self-pay patients to access well over $1 million in direct to patient savings at its single pharmacy location. These same patients would face immediate and meaningful affordability barriers if up-front discounts are replaced by delayed rebates. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect 7 of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. These pressures are not theoreticalthey are already driving difficult decisions at the local level. At HealthNet, reductions in 340B savings have directly resulted in numerous service and operational cuts: o In January 2024, HealthNet reduced its workforce by 28 FTEs in response to financial losses tied to the loss of 340B savings, impacting both clinical and non- clinical functions across the organization, including Administration, Human Resources, Electronic Medical Records, Risk Management, Quality Management, Information Systems, Project Management, Revenue Cycle, Health Promotion, Privacy and the HealthNet Foundation. o In June 2024, HealthNet closed six school-based health centers due to the financial impact of contract pharmacy restrictions, reducing access for 3,667 studentsnearly 75% of whom were enrolled in the Free and Reduced Price Lunch program. o In December 2024, HealthNet ceased providing OB/GYN staffing in the Riley Hospital for Children Maternity Tower OB Emergency Department. o In January 2025, HealthNet reduced OB staffing in the Labor and Delivery Department at Riley Maternity Tower from seven to five days per week (while maintaining 24-hour coverage on those days), reduced GYN surgery time from two days to one day per week, consolidated OB/GYN services from six sites to four, and suspended ultrasound services at its health centers. o In January 2026, HealthNet implemented a hiring freeze. These examples illustrate the direct connection between reduced 340B resources and diminished access to care. A rebate model would further accelerate these trends, compounding existing challenges and forcing additional reductions in services that patients depend on. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. CHCs represent only approximately 5% of total 340B program spendingHRSA can successfully pilot an alternative deduplication approach without including this type of covered entity. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to 8 Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, we will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, HealthNet and other CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and 9 Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that HealthNet will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) 10 F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. For HealthNet, the 340B rebate model would create significant fiscal strain, directly affecting our ability to serve the 55,000 patients who rely on us each year in Central Indiana. Preserving 340B resources is essential to sustaining cost-effective, community-based care and avoiding higher downstream Medicaid and Medicare costs. CHCs consistently deliver valueimproving outcomes while reducing costs for the patients most in need. Weakening 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 11 this model is counterproductive to both fiscal sustainability and access to care. Thank you for your consideration and for your continued commitment to the nations safety net. We welcome the opportunity for further discussion or clarification. Please feel free to contact me directly at rene.kougel@indyhealthnet.org or 317-957-2045. Sincerely, Ren Kougel, MBA, BSN, RN President & CEO/Executive VP & Chief Operating Officer HealthNet, Inc. 12 Attachment Costs incurred by HealthNet and other CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1612Nationwide Children's Hospital2026-04-17T04:00Z40,625 chars
Attached are comments regarding the 340B Rebate Model Pilot Program Request for Information on behalf of Nationwide Children's Hospital (PED363305-00). AGENCY: Health Resources and Services Administration (HRSA), Department of Health and Human Services. ACTION: Notice, request for Information. SUMMARY: The Health Resources and Services Administration (HRSA) administers section 340B of the Public Health Service Act (PHS Act), referred to as the 340B Drug Pricing Program or the 340B Program. HRSA is issuing this Request for Information (RFI) to gather input from interested parties regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern the approval of manufacturer rebate plans and the impacts on all stakeholders. This RFI seeks comments on whether HRSA should implement a rebate model under the 340B Program and how best to operationalize any such rebate framework for stakeholders. The information collected through this RFI will assist HRSA in evaluating the operational, financial, and access to drugs for patients of a rebate model on covered entities, manufacturers, and other stakeholders across the drug supply chain. DATES: Comments on this notice should be received no later than March 19, 2026. ADDRESSES: Electronic comments should be submitted through the Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions on the website for submitting comments. Include the HHS Docket No. HRSA-2026-03042 in your comments. All comments received will be posted without change to: http://www.regulations.gov. Please do not include any personally identifiable or confidential business information you do not want publicly disclosed. Any proprietary information on comments will not be publicly posted. We encourage commenters to include supporting facts, research, and evidence in their comments. When doing so, commenters are encouraged to provide citations to the published materials referenced, including active hyperlinks. Likewise, commenters who reference materials which have not been published are encouraged to upload relevant data collection instruments, data sets, and detailed findings as a part of their comment. Providing such citations and documentation will assist us in analyzing the comments. FOR FURTHER INFORMATION CONTACT: Chantelle Britton, Director, Office of Pharmacy Affairs (OPA), Office of Special Health Initiatives, HRSA, 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857; email: 340Bpricing@hrsa.gov; telephone: 301-594-4353. SUPPLEMENTARY INFORMATION: I. Background Section 340B of the PHS Act entitled Limitation on Prices of Drugs Purchased by Covered Entities, was created under section 602 of Public Law 102-585, the Veterans Health Care Act of 1992, and codified at 42 U.S.C. 256b. The 340B Program is intended to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384(II), at 12 (1992). The Secretary of Health and Human Services (Secretary) has delegated the authority to administer the 340B Program to the HRSA Administrator, who in turn delegated this authority to the Office of Pharmacy Affairs, within HRSA, which oversees the 340B Program. Eligible covered entity types are defined in section 340B(a)(4) of the PHS Act, as amended. Section 340B(a)(1) of the PHS Act instructs HHS to enter into pharmaceutical pricing agreements [i] with manufacturers of covered outpatient drugs. Currently, there are approximately 14,000 covered entities participating in the Program and 800 drug manufacturers. In 2024 covered entities purchased $81.4 Billion of covered outpatient drugs under the Program. Under section 1927(a)(5)(A) of the Social Security Act, a manufacturer must enter into an agreement with the Secretary that complies with section 340B of the PHS Act [i]n order for payment to be available under section 1903(a) or under part B of title XVIII of the Social Security Act for covered outpatient drugs of a manufacturer. When a drug manufacturer signs a pharmaceutical pricing agreement, it agrees that the prices charged for covered outpatient drugs to covered entities will not exceed statutorily defined 340B ceiling prices. 340B ceiling prices are based on quarterly pricing reports that manufacturers provide to the Secretary through the Centers for Medicare & Medicaid Services (CMS) and are calculated and verified by HRSA. In 2024, HRSA began receiving inquiries directly from manufacturers seeking to unilaterally implement different proposed rebate models for the 340B Program, which manufacturers stated was, primarily to limit the availability to maximum fair price (MFP) to 340B covered entities consistent with the nonduplication provision of the Medicare Drug Price Negotiation Program [ii] (MDPNP) and to facilitate other aims such as the prevention of 340B-Medicaid duplicate discounts and diversion. While the manufacturers' different proposals varied in terms of their scope and how they would be operationalized, the proposals all required that, under a rebate model, a covered entity would order the drug at a higher price and would then receive a rebate that reflects the difference between that higher initial price and the discounted 340B price, a departure from the way that the 340B Program has traditionally operated as an up-front discount program ( i.e., a covered entity receives the discounted 340B price at the time of purchase). Section 340B(a)(1) of the PHS Act states, [t]he Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for [certain] covered outpatient drugs . . . purchased by a covered entity . . . does not exceed [designated prices]. In response to manufacturers' inquiries, HRSA made clear that implementing a rebate model proposal without prior Secretarial approval would violate section 340B(a)(1) of the PHS Act. In light of the significant feedback received both from manufacturers and covered entities, and Congressional concern regarding the shift from an upfront discount to a rebate model, HRSA became interested in testing the merits and shortcomings of a rebate model, including whether it would be beneficial to manufacturers participating in the MDPNP as well as to 340B program integrity efforts relating to the prevention of 340B Medicaid duplicate discounts and diversion. HRSA sought a balanced and measured approach to allow eligible manufacturers to implement rebate models, at the Secretary's direction and discretion, within certain parameters that would cause minimal impact on 340B covered entities. Therefore, on August 1, 2025, HRSA published a Federal Register notice titled 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, 90 FR 36,163 (August 1, 2025). Recognizing that a rebate model would shift how the 340B Program has operated for over 30 years, HRSA invited manufacturers that met specific criteria to voluntarily participate in the 340B Rebate Model Pilot Program. A technical correction extended the public comment period to September 8, 2025, 90 FR 38,165 (August 7, 2025). HRSA received 1,243 public comments from stakeholders, including covered entity and manufacturer trade organizations, individual covered entities, and pharmaceutical manufacturers. Covered entities filed suit on December 1, 2025, to enjoin implementation of the rebate pilot. In accordance with the December 29, 2025, order of the U.S. District Court for the District of Maine in American Hospital Association et al. v. Kennedy et al., No. 25-cv-600 (D. Me.), HRSA paused implementation of the 340B Rebate Model Pilot Program for all covered entities and the nine manufacturers approved to participate in the pilot. HRSA is now requesting comments from stakeholders to further evaluate the potential benefits and costs of a rebate model, among other topics. HRSA is issuing this RFI to seek comments from stakeholders across the continuum of the drug supply chain in order to gather information on how a rebate model would impact covered entities, manufacturers, wholesalers, State Medicaid Agencies, pharmacies, the Federal Government, and other stakeholder groups. By issuing this RFI, HRSA is undertaking a methodical and deliberate approach to assess whether to implement a potential 340B Rebate Model Pilot Program consistent with its statutory authority. Likewise, HRSA commits to analyzing the comments received prior to pursuing the implementation of a potential 340B Rebate Model Pilot Program. HRSA is inviting comments on a range of issues, including: administrative, operational, financial, and medication access concerns in connection with rebate models; reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via rebate or discount; potential cash-flow impacts; and proposed alternatives and scope-limiting measures to inform a rebate pilot design, including safeguards to promote the integrity of the 340B Program, and avoid duplicate discounts, as well as consistency with the MDPNP nonduplication provision. In addition, HRSA seeks input on how to: appropriately balance stakeholder concerns regarding implementation of a rebate model against the agency's goal of testing rebates in the 340B Program; gather empirical data on the effectuation of the ceiling price through use of rebates; generate data relevant to other Federal health care programs, including the MDPNP; and improve transparency and inform future policy decisions. With the information collected from this RFI, HRSA will evaluate if a potential 340B Rebate Model Pilot Program is in the public's interest and, if so, determine a viable implementation strategy, consistent with the 340B statute. II. Request for Comments The purpose of this RFI is to obtain information and public comments on the standards and procedures by which HRSA should consider implementation of a rebate model under the 340B Program. All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to view public comments. HRSA will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. HRSA continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. HRSA is seeking input to ensure that it considers all aspects of the problem and to ensure a fair and transparent comment process for all stakeholders. HRSA invites comments on all aspects of a rebate pilot program implementation under the 340B Program, but specifically seeks comments on the targeted areas below: 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. 803,609 ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. The current administrative costs associated with 340B program operations and compliance at Nationwide Childrens Hospital (NCH) are approximately $350,000 iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. A significant portion of administrative costs is attributable to personnel dedicated to 340B program oversight, including pharmacy staff, compliance professionals, finance, and legal support. Nationwide Childrens Hospital currently employes 2.2 full-time equivalent employees dedicated to 340B compliance auditing and a Director of Pharmacy Supply Chain and Finance who is responsible for 340B oversight. These FTEs are responsible for auditing our retail pharmacy prescriptions as well as mixed use transactions to ensure 340B compliance. Nationwide Childrens Hospital uses a third-party administrator to manage our accumulations for replenishment. NCH relies on specialized software and internal IT infrastructure to support 340B eligibility tracking, inventory management, split- billing, and compliance reporting. These systems require ongoing licensing fees, maintenance, upgrades, and internal IT support. To ensure HRSA audit readiness, NCH pays for an annual external audit of our entire 340B program b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. For the initial pilot program, the incremental administrative and operational cost that would be incurred is approximately $125,000. ii. Describe the methodology and assumptions used to develop these estimates. The incremental operational cost includes adding one additional full time equivalent specifically dedicated to rebate model auditing and reconciliation tasks. The above figure also includes increased third-party management fees that would increase due to the data submission requirements associated with a 340B rebate model. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The incremental costs would cover claims processing through the third-party intermediary and reconciliation of rebates, disputing any refund that was denied by the manufacturer if the claim was 340B eligible, and auditing 340B program transactions. Changing to a 340B rebate model would add administrative burden on our covered entity due to the additional requirements of submitting and reconciling data and rebates. Transitioning away from upfront 340B discounts eliminates cost of goods sold discounts that covered entities receive from wholesalers. This elimination of wholesaler discounts along with the increased administrative costs are a financial burden on hospitals. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Covered entities could submit their administrative costs to HRSA detailing specific requirements related to the 340B rebate model and then HRSA can reimburse the covered entity. v. Comment on the impact of these incremental costs under your current operations. Transitioning away from upfront 340B discounts eliminates cost of goods sold discounts that covered entities receive from wholesalers. This elimination of wholesaler discounts along with the increased administrative costs would impose a significant financial burden on our organization. Under a rebate model, the requirement to purchase drugs at wholesale acquisition cost (WAC) and remit payment to wholesalers prior to receiving and reconciling manufacturer rebates creates material cash flow challenges. The timing gap between payment and rebate receipt introduces financial risk, increases working capital requirements, and adds operational complexity related to tracking, reconciliation, and dispute resolution. Collectively, these impacts would strain existing resources and may hinder our ability to sustain necessary and needed services supported by the 340B program. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. Our covered entity would require one additional full-time equivalent employee to be added as a permanent employee. This FTE would be responsible for data submission, rebate dispute resolution, rebate reconciliation, and 340B program auditing. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. For our covered entity, we would work with our third-party administrator to modify data reports to be able to submit to the HRSA approved 340B rebate data aggregator. As a 340B rebate model expands beyond the pilot, we would need to invest in a technological solution to ensure accurate and timely rebate payments. For the initial pilot, one FTE can manage rebate reconciliation payments internally, but beyond the pilot we will need to pay for technology to assist. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. We would estimate that a technological solution for rebate reconciliation would cost $50,000 recurring annually for the size of our covered entity. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Transitioning away from upfront 340B discounts eliminates cost of goods sold discounts that covered entities receive from wholesalers. This elimination of wholesaler discounts along with the increased administrative costs is a financial burden on our covered entity. The estimated loss due to the elimination of cost of goods sold discounts would be a permanent loss not recuperated from the manufacturer 340B rebate program. Reduction in services offered would not be an immediate impact, but could result in increased write- offs or services operating at a further loss. Our legal department reviewed the Beacon platform Terms of Use, which were intended to govern manufacturer participation in the initial rebate model go-live. Following this review, our team proposed redlined revisions to address key legal, operational, and data governance concerns. However, Beacons counsel indicated that revisions from non-state covered entities would not be considered. This limitation raises significant concerns regarding data integrity, security, and accountability, as covered entities would be required to accept non-negotiable terms without the ability to address material risks. As a result, this framework does not represent an acceptable or sustainable partnership model for implementation of a 340B rebate approach. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). The area that could impact our organizations ability to participate is the terms of use related to the third party data aggregator. Data protection and integrity is of extreme importance to our covered entity, and the Beacon platform would not entertain any red-line revisions to their terms of use which were very one sided. A neutral third-party data aggregator is needed that is chosen by HRSA and not the manufacturers. This would ensure inherent bias would not be introduced into the rebate payment process or 340B eligibility denials. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Inability to access drugs for patients is not a concern unless the manufacturer does not pay the 340B rebate in a timely manner and our wholesalers would place us on credit hold. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. We currently pay our primary wholesaler based on a 7-day payment term. If manufacturers pay within 10 calendar days, that will create cash flow issues because we must pay our wholesaler before the manufacturers reimburse us the 340B discount. If there are 340B rebate disputes that must be navigated, then that would mean our covered entity is liable to pay the wholesaler and may not receive manufacturer reimbursement for an extended period. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. We currently pay our primary wholesaler based on a 7-day payment term and this is inclusive of all drugs. Secondary and tertiary wholesalers are paid on 15-day payment terms and this is inclusive of all drugs. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our covered entity receives prompt pay incentives from our primary wholesaler in the form of higher cost of goods sold discounts if we pay within 7 days of drug invoice. This cost of goods sold incentive is inclusive of all drugs procured by our covered entity. The reduction of cost of goods sold discounts to our covered entity by the 340B rebate model would negatively impact our financials. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Our most recent invoice payment turnaround evaluation with our wholesaler is 6.42 days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. The initial rebate model drugs would not likely alter our payment timing of being able to pay within 7 days. However, if the rebate model were to grow beyond the initial proposed pilot, then it could reduce our inability to pay within 7 days. If we moved to a 15-day payment term, then our cost of goods sold discount would be reduced which would carry a significant financial loss with it. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Our covered entity is not opposed to submitting data elements to maintain up front 340B discounts at time of purchase. If a rebate model exists, the rebate data aggregator needs to be a neutral party that is run or contracted by HRSA. This neutrality eliminates manufacturer bias for denying claims that are 340B eligible and keep payments timely. The previously proposed data intermediary had terms of use that were one-sided and would not entertain any revisions from our covered entities legal department. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Our covered entity is not opposed to submitting data elements to maintain up front 340B discounts at time of purchase. This transparency would meet manufacturer duplicate discount concerns and covered entity cash flow concerns. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. If a rebate model exists, the rebate data aggregator needs to be a neutral party that is run or contracted by HRSA. This neutrality eliminates manufacturer bias for denying claims that are 340B eligible and keep payments timely. Limiting claim denials to very strict reasons is important. Only being able to deny based on rebates paid to a different covered entity is appropriate with explicit documentation provided to both of the covered entities. The manufacturers cannot deny based on any other reason. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. If rebates are denied due to a previous rebate paid to a different covered entity, then detailed documentation should be provided to both covered entities. Disputes should be resolved within 5 calendar days to ensure that the rebate is paid within the 10 calendar days. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our covered entity collects, maintains, and retains data elements related to 340B program participation in our electronic medical record for patient specific elements, in our finance system for financial elements, and only send necessary data elements for 340B qualifications to a third-party split billing vendor for purchasing activities. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). We audit all of our 340B sites on a monthly basis. This includes, but is not limited to, a percentage of 340B qualified prescriptions/administrations from each site based on volume, prescriber eligilbility, Medicaid compliance, modifier compliance, purchase eligibility and site eligibility. Additionally, we conduct an annual external audit of our 340B program with a third party vendor to ensure 340B program compliance. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Data collection would change based on required data elements required by the 340B rebate model pilot. In the first iteration, there were additional data elements that we needed to include in our data feeds on an ongoing basis. For example, Health Plan ID. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. The below data elements are readily available and provided to our third-party administrator. Dispense date, date written, Rx number, fill number, NDC, description, quantity dispensed, unit of measure, NPI, patient class, location, payor, BIN, PCN, group number. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. To protect patient information and ensure the integrity of data submissions under a potential 340B rebate model, several key guardrails should be established. First, any rebate data aggregator should be a neutral third party that is operated, overseen, or directly contracted by HRSA. Establishing a neutral administrator would help eliminate potential manufacturer bias and promote trust among covered entities, particularly with respect to data handling, validation, and dispute resolution. Second, all terms governing participation in the rebate modelincluding platform terms of usemust be balanced and allow for reasonable negotiation. Covered entities should not be required to accept unilateral, non-negotiable terms that fail to adequately address legal, operational, and data governance risks. Prior experience with proposed data intermediaries has demonstrated that one-sided agreements can create significant concerns regarding data integrity, security, and accountability. Third, any third-party vendor involved in the collection, transmission, or storage of protected health information (PHI) or other sensitive data must enter into a comprehensive Business Associate Agreement (BAA) with covered entities, as required under HIPAA. These agreements should clearly define responsibilities related to data use, safeguarding, breach notification, and liability. Finally, robust data security and privacy standards should be required, including encryption, access controls, audit trails, and limitations on data use to only those purposes necessary for rebate administration. Clear governance structures and oversight mechanisms should also be implemented to ensure compliance and accountability across all participants. Together, these safeguards are critical to mitigating privacy and security risks and ensuring that any 340B rebate model operates in a manner that is transparent, equitable, and protective of patient information. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Not applicable as Nationwide Childrens Hospital is not a manufacturer. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Not applicable as Nationwide Childrens Hospital is not a manufacturer. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Not applicable as Nationwide Childrens Hospital is not a manufacturer. d. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). Not applicable as Nationwide Childrens Hospital is not a manufacturer. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Not applicable as Nationwide Childrens Hospital is not a manufacturer. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Not applicable as Nationwide Childrens Hospital is not a manufacturer. b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Not applicable as Nationwide Childrens Hospital is not a manufacturer. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Not applicable as Nationwide Childrens Hospital is not a manufacturer. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. The integrity of the 340B program could be significantly affected by the structure and oversight of a rebate-based model. Absent a neutral data aggregator that is operated, overseen, or contracted by HRSA, there is a substantial risk that the rebate model would be influenced by manufacturer interests. This could result in inconsistent or inappropriate denial of 340B-eligible claims, undermining the programs core intent. Without clear, uniform standards and strong federal oversight, manufacturers could exercise undue discretion in adjudicating rebate claims, creating barriers to accessing 340B savings. This would limit the ability of covered entities to realize the full benefit of the program and could erode trust in its administration. The 340B program is designed to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Any rebate model that introduces uncertainty, delays, or denials in accessing these savings would be contrary to that purpose. To preserve program integrity, it is essential that any pilot include a neutral administrator, transparent and standardized claims adjudication processes, and robust oversight mechanisms. Our covered entity would be willing to submit limited claims-level data, provided that such a model preserves upfront 340B discounts and aligns with the statutory intent of the program. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; A rebate model isnt the only answer to address manufacturer concerns. Our covered entity is willing to submit limited claims data in order to preserve up front 340B discounts and preserve the intent of the 340B program. ii. Reduce diversion or improper claims; and Covered entities are subject to HRSA 340B compliance audits at any time and have internal teams to ensure 340B compliance. Diversion would be found on a HRSA audit and a rebate model would not solve diversion risk or improper claims, but instead create a financial hardship on covered entities who take care of vulnerable patient populations. iii. Increase pricing transparency across stakeholders. 340B pricing is set quarterly by the manufacturers who have a signed pharmaceutical pricing agreement with HHS. Pricing transparency isnt an issue for our covered entity, but manufacturers sending price files to wholesalers in a timely manner is. Incorrect or late price files result in incorrect pricing within our wholesalers. Our covered entity often has to pay the incorrect price and then has to remediate through credit and rebills which is an administrative burden. A rebate model would not increase price transparency or solve incorrect price files being sent by manufacturers. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Our covered entity is willing to submit limited claims data in order to preserve up front 340B discounts and preserve the intent of the 340B program. In this model, the data aggregator should be a neutral vendor that is run or contracted by HRSA. This ensures proper oversight and eliminates bias. The neutral vendor would have appropriate terms and conditions to protect data and comply with covered entity requirements. Data feeds would be accepted by the covered entities existing third party administrators to minimize the administrative burden. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. At this time, we do not believe there are benefits to our covered entity with a 340B rebate model. This creates increased financial and administrative burden that our organization would have to bear. Our covered entity is willing to submit limited claims data in order to preserve up front 340B discounts and preserve the initial intent of the 340B program. III. Collection of Information Requirements Please note, this is an RFI only. In accordance with the implementing regulations of the Paperwork Reduction Act of 1995 (PRA), specifically 5 CFR 1320.3(h)(4), this general solicitation is exempt from the PRA. Facts or opinions submitted in response to general solicitations of comments from the public, published in the Federal Register or other publications, regardless of the form or format thereof, provided that no person is required to supply specific information pertaining to the commenter, other than that necessary for self-identification, as a condition of the agency's full consideration, are not generally considered information collections and therefore not subject to the PRA. The paperwork burden associated with a potential 340B Rebate Model Pilot program shall be accounted for under an information collection request submitted to OMB and approved in keeping with the PRA prior to pursuing the implementation of a potential 340B Rebate Model Pilot. This RFI is issued solely for information and planning purposes; it does not constitute a request for proposals, applications, proposal abstracts, or quotations. This RFI does not commit the U.S. Government to contract for any supplies or services or make a grant award. Further, HRSA is not seeking proposals through this RFI and will not accept unsolicited proposals. Respondents are advised that the U.S. Government will not pay for any information or administrative costs incurred in response to this RFI; all costs associated with responding to this RFI will be solely at the interested party's expense. In addition, HRSA will not respond to questions related to policy issues outside of the scope of a potential 340B Rebate Model Pilot Program raised in this RFI. HRSA will actively consider all input as we develop future policy. This RFI should not be construed as a commitment or authorization to incur cost for which reimbursement would be required or sought. All submissions become U.S. Government property and will not be returned. In addition, HRSA shall publicly post the public comments received in their entirety. Thomas J. Engels, Administrator.
HRSA-2026-0001-1613Baystate Medical Center and Baystate Franklin Medical Center2026-04-17T04:00Z14,442 chars
See attached file(s) Baystate Health April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, I-EIS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Baystate Medical Center and Baystate Franklin Medical Center in Springfield and Greenfield, Massachusetts, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HEIS) -Request for Information: 340B Rebate Model Pilot Program.- Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Baystate Medical Center and Baystate Franklin Medical Center that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model appears to be based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which our hospitals have relied on for many years, is the best way to fulfill the purpose of the 340B program. For purposes of estimating costs, we have assumed that any future Rebate Program will include up to 25 drugs, including those previously approved for HRSA's initial rebate pilot and the drugs approved under the Medicare Drug Price Negotiation Program for 2026 and 2027. The inclusion of additional drugs and manufacturers would significantly increase administrative complexity and financial exposure for our hospitals. Page 2of 8 ADMINISTRATIVE COSTS UNDER A POTENTIAL 340B REBATE PROGRAM Irnplementation of a rebate-based purchasing rnodel would require Baystate Medical Center and Baystate Franklin Medical Center to incur significant new administrative and operational costs beyond those associated with the existing upfiont discount rnodel. Estimated One-Time Startup Costs Transitioning to a rebate model would require substantial upfront investment. Estimated One- Time Startup Costs: Information technology system modifications and vendor configuration Third-party adrninistrator (TPA) implementation and data interface setup Internal workflow redesign, policy developrnent, and compliance planning Legal review and contracting related to rebate data sharing and vendor agreements Staff training and operational implementation Estimated total one-time costs: $330.000 - $530.000. Ongoing Annual Costs Ongoing operational expenses would include staff time dedicated to submitting rebate claims, monitoring submissions, reconciling payments, resolving disputes, and managing compliance obligations. Additional 340B program adrninistration staff time: approximately 0.5-1.0 FTE Claims subrnission and reconciliation workload associated with up to 25 drugs across hospital and contract pharmacy dispensing: annually increasing labor Vendor and TPA support fees for rebate ongoing data submissions to Beacon, tracking and reconciliation Additional consulting services Compliance. auditing, and dispute resolution activities Estimated ongoing annual costs: $180.000 - $340,000 These costs would support activities such as: Preparing and submitting rebate claims to multiple rnanufacturers Monitoring rebate approval or denial responses Reconciling manufacturer payments with submitted claims Identifying and disputing denied or underpaid rebates Maintaining documentation for HRSA audit purposes Page 3of 8 Monitoring potential duplicate discount issues Managing coordination between internal pharmacy, finance, and compliance departments These costs are entirely new and would not exist under the longstanding upfront discount model. STAFFING IMPACTS UNDER A POTENTIAL 340B REBATE PROGRAM Baystate Medical Center and Baystate Franklin Medical Center do not culTently rnaintain sufficient staffing resources to manage a manufacturer rebate claim system across multiple drugs and manufacturers. Implementation of a rebate model would likely require at least one additional full-time employee to support the operational requirements associated with rebate submission, reconciliation, and dispute management. This individual would be responsible for: Collecting and validating claim data for rebate submission Monitoring manufacturer responses and rebate payments Reconciling payments with submitted claims Investigating denied rebates and managing appeals Coordinating with pharmacy, finance, compliance, and external vendors Supporting internal audit preparation and HRSA compliance requirements Recruiting and onboarding a qualified employee for this role would likely require three to six months of advance planning. HRSA's estimate that covered entities would incur only five hours of additional work per week significantly understates the operational complexity associated with rebate administration. Managing submissions across up to 25 drugs. multiple dispensing locations, contract pharmacies, and potentially numerous manufacturers will require substantial ongoing staff time. The need to reconcile rebate payments, investigate discrepancies, and challenge denials will firther increase the administrative burden. Page 4of 8 SYSTEMS AND INFRASTRUCTURE Our hospitals' pharrnacy systems, electronic health record systems, and 340B compliance infrastructure were designed around the longstanding upfront discount model. Implementation of a rebate system would require significant modifications to existing IT systems and vendor integrations, including: Development of new data extraction processes for rebate submission Integration of dispensing data with rebate claim submission platforrns Additional reporting and tracking functionality to reconcile rebate payments Creation of internal reconciliation tools to track outstanding rebate claims Estimated costs for systern configuration and vendor integration are expected to be significant initially, with additional ongoing vendor maintenance and licensing costs. One of the rnost significant challenges is that the data required for rebate submissions is not centrally stored in a single system. Information related to prescribing providers, dispensing locations, payer information, and patient eligibility may reside in separate systems such as our electronic health record, pharrnacy dispensing systems, and 340B TPA platforms. In many cases, this information would need to be rnanually validated or compiled before submission to manufacturers. Because TPAs do not typically have direct access to our electronic health record systems, manual data extraction and validation would likely be required for many claims. DATA COLLECTION BY COVERED ENTITIES Baystate Medical Centei- and Baystate Franklin Medical Center currently rely on third-party vendors to support 340B compliance, including split-billing software that tracks eligible drug utilization and manages contract pharmacy replenishment processes. These vendors collect and maintain dispensing data necessary to ensure compliance with EIRSA program requirements, including diversion prevention and duplicate discount monitoring. However, the data required under a rebate model would differ significantly from the inforrnation currently exchanged between covered entities, TPAs, and manufacturers. Manufacturers may request additional claim-level information that is not cun-ently transmitted through existing systems. Page Sof 8 As a result, implementation of a rebate program would likely require our hospitals to: Extract additional data elements from internal hospital systems Validate patient and payer information Compile claim-level submissions to multiple manufacturers Maintain additional documentation supporting rebate eligibility These activities would introduce new administrative burdens and would require ongoing manual intervention. For these reasons, the assumption that the required data is already being collected and easily transferable is inaccurate. In reality, significant additional effort would be required to gather, validate, and submit the necessary information. PAYMENT TIMING AND CASH FLOW IMPACTS A rebate model would significantly alter the financial dynamics of 340B purchasing by requiring hospitals to purchase drugs at full wholesale acquisition cost (WAC) and wait for manufacturers to issue rebate payments. This would effectively require Baystate Medical Center and Baystate Franklin Medical Center to extend interest-free loans to pharmaceutical manufacturers while awaiting rebates that represent the statutoiy 340B discount. Even if rebates were issued within 10 calendar days of submission. our hospitals would still face cash flow risks due to: Delays associated with claim submission and validation Potential manufacturer denials or disputes Variability in manufacturer payment timelines In many cases, wholesaler invoices are due before rebate payments would be received. particularly when accounting for the time required to prepare and submit claims. A rebate model would therefore require our hospitals to maintain substantially higher levels of working capital to absorb these temporary costs. This model also introduces uncertainty regarding whether manufacturers will approve rebate clairns, which could further impact financial planning and liquidity management. Page 6of 8 ADVERSE IMPACTS OF ADDITIONAL COSTS The additional administrative and financial burdens imposed by a rebate model would directly reduce the resources our hospitals are able to reinvest in patient care and community health services. 340B savings currently support numerous programs that improve access to care for vulnerable populations in Western Massachusetts. Reductions in available 340B savings due to increased administrative costs and financial risk may force hospitals to reconsider investments in: Community health programs serving low-income populations Medication assistance and affordability programs Care coordination services for high-risk patients + Behavioral health services Rural access initiatives Baystate Franklin Medical Center in particular serves a rural community where access to specialty care is already limited. Reductions in available resources could disproportionately impact patients who rely on our hospitals for essential services. Uncertainty regarding the future structure of the 340B program has also complicated financial planning and long-term investment decisions related to community health initiatives. RELIANCE INTERESTS Baystate Medical Center and Baystate Franklin Medical Center have structured their pharmacy operations, compliance programs, vendor contracts, and financial planning based on the longstanding upfront discount model used throughout the history of the 340B program. Our hospitals have invested substantial resources in systems and processes designed specifically to support this model. A shift to a rebate system would require extensive operational redesign and financial restructuring. 340B savings generated through the upfront discount model are incorporated into annual budgeting processes and are used to support programs that directly benefit underserved populations. Sudden changes to the discount mechanism would disrupt these established financial planning processes and undermine the stability of programs supported by 340B savings. Page 7of 8 PROBLEMS WITH THE BEACON IT PLATFORM During the previous iteration of the rebate pilot prograrn, our hospitals began reviewing the Beacon platform operated by Second Sight Solutions. We identified several concerns related to the platform's terms and conditions, data requirements, and operational processes. These included: i Uncertainty regarding the scope of patient data required for rebate submission Lack of clarity regarding data security protections and responsibilities Frequent changes to submission requirements during irnplementation planning Limited transparency regarding how manufacturers would evaluate and approve rebate claims These concerns raised significant privacy, security, and operational questions that remain unresolved. EFFORTS TO AVOID 340B/MDPNP DUPLICATE DISCOUNTS To date, Baystate Medical Center and Baystate Franklin Medical Center have not experienced significant issues related to Medicaid duplicate discounts involving the Medicare Drug Price Negotiation Program. Our hospitals currently rely on established compliance controls and third-party systems to prevent duplicate discounts and ensure program integrity. These processes have proven effective and far less burdensome than a rebate-based purchasing model. We support the American Hospital Association's recommendation that HRSA explore the use of a neutral third-party clearinghouse to facilitate deduplication between the 340B program and the Medicare Drug Price Negotiation Program. Such an approach would address potential manufacturer concerns without imposing the substantial financial and administrative burdens associated with a rebate model. For all of these reasons, Baystate Medical Center and Baystate Franklin Medical Center respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and instead pursue less burdensome alternatives such as a third-party clearinghouse. Page 8o a If HRSA nonetheless proceeds with this proposal, it must provide covered entities with an additional opportunity to comment on the specific design of any future program. We appreciate the opportunity to subrnit these comments and look forward to working with HRSA on this important issue. Sincerely, l c; Laurie Martin Chief Financial Officer Baystate Medical Center Baystate Franklin Medical Center
HRSA-2026-0001-1614Samaritan Medical Center2026-04-17T04:00Z18,691 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Samaritan Medical Center, a 340B covered entity (CE), appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSAs) Request for Information (FRI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift from upfront discounts to a rebate-based model and urges HRSA to maintain the longstanding structure that has governed the 340B program for more than 30 years. As emphasized by 340B Health and the American Hospital Association (AHA), the statutory design of 340B is predicated on upfront price concessions not retrospective reimbursement mechanisms any departure from this structure would undermine the programs core intent. The 340B program has consistently operated through upfront discounts, and our organization has built its compliance infrastructure, purchasing practices, and patient care funding model around that framework. National stakeholders have similarly highlighted that covered entities have long relied on this structure to stretch scarce resources and maintain access to care. A transition to rebates would disrupt well-established reliance interests and impose significant financial and operational burdens on covered entities. We disagree with HRSAs assumption that such a model would have only minimal impact. Consistent with broader industry feedback, the operational, financial, and compliance implications would be significant and systemic. 340B hospitals are a vital healthcare resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers to they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Under a rebate model, our hospital would be required to purchase drugs at prices significantly higher than the 340B ceiling price, maintain inventory until dispensing, and then wait for reimbursement through a rebate process. This structure effectively requires covered entities to provide interest-free financing to manufacturers during the period between acquisition and rebate receipt an outcome that national hospital groups have identified as fundamentally inconsistent with the purpose of the 340B statute. Even with a 10-day rebate timeline following submission, delays inherent in hospital billing and claims processes would extend this period substantially. We would also face a choice between preserving cash flow or maintaining prompt pay discounts from wholesalers foregoing those discounts would cost our organization approximately over $2 million annually. On an annual basis, we estimate that our hospital would be required to front a substantial amount of capital to manufacturers, representing the difference between wholesale acquisition cost and the 340B price across applicable drugs. This represents a material shift in financial risk from manufacturers to safety-net providers and would significantly constraint resources available for patient care. A rebate model would fundamentally transform 340B from a purchasing program into a claims- based reimbursement system. This concern has been widely raised by hospital associations, which note that such a shift introduces complexity more akin to commercial rebate arrangements than a federal safety-net program. This shift would require significant new investments in IT infrastructure, data integration, and staffing. Our hospital would need to: Develop systems to capture, validate, submit detailed claim-level data Track and reconcile rebate payments across pharmacy and medical claims Manage denials, disputes, and manufacturer communications, conduct ongoing internal audits and compliance monitoring Based on our current experience with manufacturer data platforms, these processes are complex, inconsistent, and resource-intensive. We already incur approximately $24000 annually in additional vendor-related costs and have had to expand staffing to manage data submission requirements. A rebate model is not operationally aligned with standard hospital billing processes. Unlike pharmacy claims, medical claims data particularly for physician-administered drugs is not immediately available. These claims must undergo documentation, coding, review, and billing workflows, and may not be finalized for weeks or longer after administration. As a result, even under accelerated rebated timelines, our hospital would face unavoidable delays in submission and reimbursement. These structural constraints cannot be resolved through process improvements and would extend the time we must carry the full cost of high-priced drugs. Our experience with manufacturer data submission platforms, including 340BESP and the prior rebate pilot, demonstrates the challenges inherent in a rebate-based approach. We encountered inconsistent data requirements, system errors, and unclear guidance, all of which increased implementation costs and required additional staffing support. These issues remained unresolved prior to the pilot being paused. Allowing manufacturers to define data requirements for rebate eligibility would create ongoing uncertainty and operational risk for covered entities. There is no current standardization of what data can be requested. We disagree that a rebate model is necessary to improve program integrity or address duplicate discount concerns. National hospital organizations have consistently noted that existing audit data does not demonstrate widespread compliance failures that would justify such a significant structural overhaul. HRSA audits have consistently shown high compliance among covered entities, and manufacturers have not demonstrated system issues warranting such a significant structural change. We are also concerned, consistent with concerns raised by national stakeholders that manufacturers may seek to use CE claims data for commercial purposes unrelated to 340B program integrity. Covered entities should not be required to support these objectives at their own expense. The financial and operational burdens described above would directly reduce resources available for patient care, as a rural hospital and the largest healthcare provider in our region, we serve a vulnerable population, including uninsured patients and those covered by public programs. A rebate model would jeopardize our ability consistent with concerns raised by rural and safety-net hospitals nationwide to: Maintain adequate staffing levels Recruit physicians to our community Invest in critical equipment and facility improvements Provide uncompensated care Offer specialized services such as Oncology We employ nearly 2,500 individuals and support a regional population that includes a military base of approximately 20,000 service members and their families. Significant cash flow constraints could impact payroll stability and place us at risk of violating debt covenants requiring 40 days cash on hand. Failure to meet these obligations could have serious financial consequences, including risk to ongoing operations. If HRSA proceeds with a rebate model despite these concerns, it should prohibit manufacturers from denying rebate claims. At a minimum, HRSA should prohibit denials based on alleged duplicate discounts or diversion and require detailed explanations for any denial. Without such protections, covered entities would face additional administrative burden and financial uncertainty. For the reasons outlined above, we strongly urge HRSA to maintain the current upfront discount structure of the 340B program. A rebate-based model would impose significant financial risk, operational complexity, and administrative burden on our entity, ultimately undermining our programs ability to support patient care. Thank you for your consideration, Sincerely, Samaritan Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Samaritan Medical Center, a 340B covered entity (CE), appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSAs) Request for Information (FRI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift from upfront discounts to a rebate-based model and urges HRSA to maintain the longstanding structure that has governed the 340B program for more than 30 years. As emphasized by 340B Health and the American Hospital Association (AHA), the statutory design of 340B is predicated on upfront price concessions not retrospective reimbursement mechanisms any departure from this structure would undermine the programs core intent. The 340B program has consistently operated through upfront discounts, and our organization has built its compliance infrastructure, purchasing practices, and patient care funding model around that framework. National stakeholders have similarly highlighted that covered entities have long relied on this structure to stretch scarce resources and maintain access to care. A transition to rebates would disrupt well-established reliance interests and impose significant financial and operational burdens on covered entities. We disagree with HRSAs assumption that such a model would have only minimal impact. Consistent with broader industry feedback, the operational, financial, and compliance implications would be significant and systemic. 340B hospitals are a vital healthcare resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers to they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Under a rebate model, our hospital would be required to purchase drugs at prices significantly higher than the 340B ceiling price, maintain inventory until dispensing, and then wait for reimbursement through a rebate process. This structure effectively requires covered entities to provide interest-free financing to manufacturers during the period between acquisition and rebate receipt an outcome that national hospital groups have identified as fundamentally inconsistent with the purpose of the 340B statute. Even with a 10-day rebate timeline following submission, delays inherent in hospital billing and claims processes would extend this period substantially. We would also face a choice between preserving cash flow or maintaining prompt pay discounts from wholesalers foregoing those discounts would cost our organization approximately over $2 million annually. On an annual basis, we estimate that our hospital would be required to front a substantial amount of capital to manufacturers, representing the difference between wholesale acquisition cost and the 340B price across applicable drugs. This represents a material shift in financial risk from manufacturers to safety-net providers and would significantly constraint resources available for patient care. A rebate model would fundamentally transform 340B from a purchasing program into a claims-based reimbursement system. This concern has been widely raised by hospital associations, which note that such a shift introduces complexity more akin to commercial rebate arrangements than a federal safety-net program. This shift would require significant new investments in IT infrastructure, data integration, and staffing. Our hospital would need to: Develop systems to capture, validate, submit detailed claim-level data Track and reconcile rebate payments across pharmacy and medical claims Manage denials, disputes, and manufacturer communications, conduct ongoing internal audits and compliance monitoring Based on our current experience with manufacturer data platforms, these processes are complex, inconsistent, and resource-intensive. We already incur approximately $24000 annually in additional vendor-related costs and have had to expand staffing to manage data submission requirements. A rebate model is not operationally aligned with standard hospital billing processes. Unlike pharmacy claims, medical claims data particularly for physician-administered drugs is not immediately available. These claims must undergo documentation, coding, review, and billing workflows, and may not be finalized for weeks or longer after administration. As a result, even under accelerated rebated timelines, our hospital would face unavoidable delays in submission and reimbursement. These structural constraints cannot be resolved through process improvements and would extend the time we must carry the full cost of high-priced drugs. Our experience with manufacturer data submission platforms, including 340BESP and the prior rebate pilot, demonstrates the challenges inherent in a rebate-based approach. We encountered inconsistent data requirements, system errors, and unclear guidance, all of which increased implementation costs and required additional staffing support. These issues remained unresolved prior to the pilot being paused. Allowing manufacturers to define data requirements for rebate eligibility would create ongoing uncertainty and operational risk for covered entities. There is no current standardization of what data can be requested. We disagree that a rebate model is necessary to improve program integrity or address duplicate discount concerns. National hospital organizations have consistently noted that existing audit data does not demonstrate widespread compliance failures that would justify such a significant structural overhaul. HRSA audits have consistently shown high compliance among covered entities, and manufacturers have not demonstrated system issues warranting such a significant structural change. We are also concerned, consistent with concerns raised by national stakeholders that manufacturers may seek to use CE claims data for commercial purposes unrelated to 340B program integrity. Covered entities should not be required to support these objectives at their own expense. The financial and operational burdens described above would directly reduce resources available for patient care, as a rural hospital and the largest healthcare provider in our region, we serve a vulnerable population, including uninsured patients and those covered by public programs. A rebate model would jeopardize our ability consistent with concerns raised by rural and safety-net hospitals nationwide to: Maintain adequate staffing levels Recruit physicians to our community Invest in critical equipment and facility improvements Provide uncompensated care Offer specialized services such as Oncology We employ nearly 2,500 individuals and support a regional population that includes a military base of approximately 20,000 service members and their families. Significant cash flow constraints could impact payroll stability and place us at risk of violating debt covenants requiring 40 days cash on hand. Failure to meet these obligations could have serious financial consequences, including risk to ongoing operations. If HRSA proceeds with a rebate model despite these concerns, it should prohibit manufacturers from denying rebate claims. At a minimum, HRSA should prohibit denials based on alleged duplicate discounts or diversion and require detailed explanations for any denial. Without such protections, covered entities would face additional administrative burden and financial uncertainty. For the reasons outlined above, we strongly urge HRSA to maintain the current upfront discount structure of the 340B program. A rebate-based model would impose significant financial risk, operational complexity, and administrative burden on our entity, ultimately undermining our programs ability to support patient care. Thank you for your consideration, Sincerely, Samaritan Medical Center
HRSA-2026-0001-1615(no commenter metadata)2026-04-17T04:00Z11,895 chars
Please see attached comment on behalf of Conway Regional Health System, Conway, Arkansas. Thank you for your consideration. April 17, 2026 Submitted via Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Conway Regional Health System Comments on Request for Information 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Conway Regional Health System is a nonprofit, community-based hospital located in Conway, Arkansas, proudly serving as the healthcare anchor for Faulkner County and the surrounding region. Our mission is simple but profound: to improve the health and well-being of the communities we serve by delivering high-quality, compassionate, and accessible care to every patient who walks through our doors, regardless of their ability to pay. We serve a broad primary and secondary service area that includes rural communities with limited access to specialty care, a substantial Medicaid and uninsured patient population, and individuals who depend on safety-net providers like Conway Regional for healthcare services they could not otherwise afford or access. As a 340B covered entity, Conway Regional submits these comments in response to the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) regarding a potential rebate model to replace upfront 340B discounts for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. We submit these comments not as an administrative exercise, but as an urgent appeal on behalf of our patients and community, who would bear the real-world consequences of the policy change HRSA is contemplating. Conway Regional Strongly Opposes Any Transition to a 340B Rebate Model For more than three decades, the 340B program has functioned through upfront discounts, a structure that has allowed safety-net hospitals like Conway Regional to stretch limited resources, maintain essential services, and invest savings directly into patient care and community health programs. We have built our pharmacy operations, inventory management systems, third-party vendor relationships, and financial planning models around this longstanding framework. A shift to a backend rebate model would not simply change how we receive 340B savings; it would disrupt nearly every operational system we have constructed in reliance on the upfront discount structure Congress established. We are deeply troubled that HRSA is now considering a rebate model even broader in scope than the pilot program it withdrew in 2025. Expanding from 10 to 25 affected drugs only amplifies the harm this policy would cause. We urge HRSA to abandon the rebate approach entirely and preserve the integrity and effectiveness of the 340B program for the safety-net providers it was designed to support. The Rebate Model Would Impose Significant Financial Harm on Conway Regional and Our Community Conway Regional's 340B program is not a revenue center; it makes our charitable mission possible. The savings generated by upfront 340B pricing are reinvested in services our community depends on: uncompensated care for uninsured patients, expanded access to behavioral health and specialty services, community health education programs, and capital improvements that keep our facilities equipped to deliver high-quality, innovative care. A shift to a rebate model would jeopardize all of this. Based on our internal financial analysis, we estimate that in 2027 alone, the proposed rebate structure would reduce our 340B-related revenue by approximately $1.2 million. Beyond the annual revenue impact, the mechanics of a rebate model requiring us to purchase drugs at full non-340B prices and wait for reimbursement would create a significant working capital burden. We estimate that at any given time, up to $600,000 in days of cash on hand could be tied up over a rolling 30-day period, representing capital that would otherwise be available for day-to-day operations. These are not theoretical figures; they represent real money that could have funded capital improvements to our facilities, maintained staffing levels in critical service lines, or expanded programs serving our most vulnerable patients. Every dollar we spend financing manufacturer drug costs under a rebate model is a dollar our community loses. As a nonprofit, community-based hospital, Conway Regional does not have the financial cushion that larger health systems may possess. Our operating margins are narrow by design; we reinvest what we generate into community benefit, not shareholder returns. The cash flow disruption caused by a rebate model would not be an inconvenience; it would be a genuine threat to operational stability and to our ability to sustain services that our primary and secondary service areas depend upon. The Administrative Burden Would Divert Resources from Patient Care The transition from an upfront discount model to a rebate system would require Conway Regional to fundamentally redesign our pharmacy, finance, information technology, and compliance functions. Under our current model, 340B program administration is integrated into the normal workflows of our pharmacy compliance and finance teams. A rebate model would impose an entirely new operational layer, one that does not exist today and cannot be absorbed without significant additional investment. Specifically, we anticipate major costs in the following areas: Claims Data Preparation and Submission. Our existing systems are not configured to extract, format, and transmit the claim-level data that manufacturers would require under a rebate model. This would necessitate IT system modifications, new vendor contracts, staff training, and ongoing submission workflows that have no analog in our current operations. Because manufacturers have historically been permitted to define their own data field requirements, as occurred during HRSA's withdrawn rebate pilot, where we received confusing and inconsistent specifications, we anticipate significant and ongoing uncertainty that will compound implementation costs. Rebate Tracking and Financial Reconciliation. Managing a rebate receivables ledger would require dedicated staff or additional FTE allocation, new software modules, and increased complexity in our monthly and annual financial close processes. Rebate receivables must be tracked, aged, reconciled, and disclosed in our financial statementsadding audit exposure and compliance risk that simply does not exist under the current upfront discount structure. Physician-Administered Drug Claims. For drugs administered in outpatient or clinic settings, the standard hospital billing lifecycle involving charge capture, clinical documentation review, coding, compliance review, and payer editing routinely takes weeks or longer to complete. This means Conway Regional would regularly be waiting 30 to 60 days or more after the date of drug administration before being in a position to submit a rebate claim, all while having purchased the drug at the full non-340B price. Even a 10-day rebate payment window provides little relief when the clock cannot even start until our billing cycle is complete. Our hospital would effectively be providing an extended interest-free loan to pharmaceutical manufacturers, a burden Congress never intended safety-net providers to bear. Dispute Resolution and Vendor Management. Our limited experience with manufacturer data submission platforms such as 340B ESP has already demonstrated how costly and time-consuming it is to resolve errors, address inconsistencies, and navigate opaque vendor requirements. Under a full rebate model applying to 25 drugs across all hospital settings, these challenges would multiply substantially. Denied or disputed rebate claims would require legal and compliance review, potentially including formal Administrative Dispute Resolution (ADR) proceedings through HRSA, all while our capital remains tied up in unreimbursed drug purchases. The Rebate Model Is Not Necessary to Ensure Program Integrity We respectfully disagree with HRSA's position that a rebate model is necessary to address deduplication concerns under the Medicare Drug Price Negotiation Program or to improve 340B program integrity more broadly. HRSA's own routine audits of covered entities have consistently shown minimal compliance issues. Manufacturers have not demonstrated systemic integrity problems in 340B that would justify the sweeping operational disruption a rebate model would cause. Meaningful, less burdensome alternatives exist. The Department of Health & Human Services should direct state Medicaid agencies to adopt retrospective data-collection processes, similar to Oregon Medicaid's approach, that allow agencies to exclude 340B claims from rebate requests without requiring covered entities to finance and manage a wholesale rebate infrastructure. A similar federal mechanism could address MDPNP nonduplication concerns at far lower cost to safety-net providers. We are also concerned that manufacturers intend to use covered entity claims data submitted under a rebate model for commercial purposes unrelated to 340B program integrity, specifically, to avoid paying rebates to pharmacy benefit managers under voluntary formulary agreements. Conway Regional should not be required to generate and transmit sensitive claims data to serve manufacturers' commercial interests. At an absolute minimum, HRSA should prohibit manufacturers from using covered entity rebate data for any purpose other than 340B compliance verification. If HRSA Proceeds, It Should Prohibit All Rebate Denials Should HRSA move forward with a rebate model despite our opposition, we urge the agency to prohibit manufacturers from denying any rebate claims submitted by 340B hospitals. Rebate denials, particularly those based on alleged Medicaid duplicate discounts or diversion, would compound the financial and administrative harm described above, prolonging cash flow uncertainty and requiring additional legal and compliance resources. Manufacturers would retain audit rights under the 340B statute and would continue to receive claims data. Prohibiting denials would reduce the most acute source of operational risk for safety-net providers while still advancing HRSA's stated program integrity goals. If HRSA does permit denials, the agency must require manufacturers to provide clear, specific, and actionable reasons for any denial so that covered entities have a meaningful opportunity to respond and resubmit. Conclusion Conway Regional Health System is committed to our mission of providing high-quality, compassionate care to every member of our community. The 340B program has been an essential tool in fulfilling that mission, enabling us to generate savings that we reinvest directly into patient care, uncompensated services, and community health programs. A shift to a rebate model would threaten that mission, diverting critical resources to administrative costs and manufacturer financing, reducing our financial flexibility, and ultimately harming the patients and communities that 340B was created to protect. We urge HRSA to reject the rebate approach, maintain the upfront discount structure that has served the 340B program for over 30 years, and continue to trust the safety-net providers that have built their operations and their communities around it. We appreciate the opportunity to provide these comments and remain available to discuss our concerns in greater detail. Respectfully submitted, Conway Regional Health System Conway, Arkansas
HRSA-2026-0001-1616Shannon Perez · Louisville, KY, United States2026-04-17T04:00Z3,020 chars
April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Shannon Perez, IBCLC Family Health Centers, Inc.
HRSA-2026-0001-1617Virginia Society of Health-System Pharmacists2026-04-16T04:00Z11,770 chars
See attached file(s) VSHP 3015 N Shannon Lakes Dr, #303 Tallahassee, FL 32309 Ph (850) 728-4474 Fax (678) 401-0259 April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our 800+ members of pharmacists and pharmacy technicians, the Virginia Society of Health-System Pharmacists appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). In addition to the below, VSHP advocates for any and all responses submitted by Virginia health- systems. We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). VSHP 3015 N Shannon Lakes Dr, #303 Tallahassee, FL 32309 Ph (850) 728-4474 Fax (678) 401-0259 policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, VSHP 3015 N Shannon Lakes Dr, #303 Tallahassee, FL 32309 Ph (850) 728-4474 Fax (678) 401-0259 HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any VSHP 3015 N Shannon Lakes Dr, #303 Tallahassee, FL 32309 Ph (850) 728-4474 Fax (678) 401-0259 pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Virginia Society of Health-System Pharmacists
HRSA-2026-0001-1618Sherri Craig · Steubenville, OH, United States2026-04-17T04:00Z6,554 chars
See attached file(s) from Dwayne Richardson, Interim President, Trinity Health System, Steubenville, Ohio. '11- Trinity Health System. A member of CommonSpirit April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD2O852 Re: Request for Information:340B Rebate Mode/ Pilot Program (HHS Docket No. HRSA-2O26-O3O42) DearAdministrator Engels, Trinity Health System, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net health system, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Trinity Health that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20,2026 Trinity Health System HHS Docket No. HRSA-2026-03042 Trinity Health relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more moneyon the things that matter mostour patients, As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facilities. Savings from the 340B program enable us in Steubenville, Ohio to offset the costs of some inpatient and outpatient behavioral health services, support the outpatient infusion center, and support a clinical pharmacist providing care in patient care areas to improve medication outcomes. Savings from the program enable us in Dennison, Ohio to teach healthy life choices through our Fit for Life Program, support a diabetes wellness program, and keep the doors open while also providing benefits to our community through programs and financial assistance. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities, While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers, Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve, Higher Costs, No Benefit 0ur 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanismwould not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information --/- CommonSpIrlt " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Togetherwith our patients, physicians, partners, and communities, we are creating a morejust, equitable, and innovative healthcare delivery system. Learn more at commonspirit.orq. Sincerely, Q ___ wayne Richardson Interim Market President Apr 20,2026 Trinity Health System HHS Docket No. HRSA-2026-03042 through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions at Dwayne.Richardson@commonspirit.org..
HRSA-2026-0001-1619CommUnityCare Health Centers2026-04-17T04:00Z18,082 chars
See Attached File COMMUNITYCARE u p HEALTH CENTERS 2115 Kramer Lane, Suite #100 Austin, Texas 78758 512.978.9000 www.communitycaretx.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: Thank you for the opportunity to provide comments on the proposed 340B Rebate Model Pilot Program and its potential impacts on CommUnityCare Health Centers and the patients we serve. CommUnityCare is one of the largest networks of community health centers in the country, with more than 30 clinic locations in and around Austin, Texas. The federal 340B program is foundational to our ability to provide primary care and preventive health services to patients who would not otherwise have access to care. We continue to have significant concerns that the proposed rebate pilot shifts risk from for-profit drug manufacturers to non-profit safety-net providers, jeopardizing patient access to care. Under the proposed pilot, CommUnityCare anticipates financial losses of more than $3.4 million in the first year, increasing to approximately $3.85 million in 2028, with additional costs in future years related to carrying costs, new administrative expenses, and lost rebates. Lower-income, uninsured, and under- insured patients will ultimately bear these costs through reduced access to affordable medications and reduced access to other services including transportation assistance, community health worker programs, and other supportive services that facilitate access to care. CommUnityCare provided written comments in response to federal requests for information regarding proposed 340B rebate pilots in August 2025 and November 2025. We appreciate this additional opportunity to reiterate our concerns, which remain significant, and to provide further detail regarding the operational and financial risks the proposed 340B Rebate Model Pilot Program would pose to CommUnityCare and other community health centers across the country. We strongly urge HRSA to exempt community health centers from this proposed 340B Rebate Model Pilot Program to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. This letter summarizes our concerns, outlines the operational and financial risks posed by a rebate model, and highlights the downstream impact of those risks on our patients and community. About CommUnityCare CommUnityCare is a critical part of our community's safety-net healthcare system, providing access to care for lower-income, uninsured, and under-insured patients. As a Federally Qualified Health Center, CommUnityCare Health Centers operates more than 30 clinical sites in Travis County and surrounding counties, offering a full range of services, including primary care, specialty care, dental care, and behavioral healthcare. We have four in-house pharmacies, and we partner with nearly 150 contract pharmacies to provide patients with access to affordable medications through the 340B program. In 2025, CommUnityCare served more than 148,000 unique patients. More than two- thirds of our patients reported incomes at or below 100% of the federal poverty level (FPL), which is approximately $33,000 for a family of four. Of those who reported incomes, 98% reported incomes at or below 200% FPL. More than half of our patients were uninsured, over one-third were children, and more than 5,200 patients we served were experiencing homelessness at the time of care. We serve as our community's healthcare safety net. About our 340B Program The federal 340B program, in its current form, is foundational to the ability of community health centers such as CommUnityCare to provide comprehensive, high- Page 2 quality healthcare services in an increasingly challenging financial environment. The program enables us to offer patients access to medications they can afford while also supporting broader investments in care delivery. Through roughly 260,000 claims last year, CommUnityCare realized approximately $34 million in 340B savings, all of which were reinvested into our community. In addition to providing low-cost medications, these savings supported home delivery of medications for housebound patients, patient transportation assistance, vaccination pop-up clinics, and community health worker and pharmacy programs - services that would not have been financially viable without 340B. Today, under mounting financial pressures, 340B savings are more essential to community health centers than ever. In 2024, CommUnityCare delivered $20 million in uncompensated care to uninsured patients, and inflation continues to escalate the cost of care. Rising pharmacy supply costs alone resulted in a $2.5 million loss in 2024 and a $4 million loss in 2025. Access to upfront 340B discounts has been critical to the financial viability of community health centers. We respectfully request that HRSA exempt community health centers from the proposed 340B Rebate Model Pilot Program. Financial Losses CommUnityCare anticipates a combined loss of $7,300,000 in years 2027 and 2028 due to upfront carrying costs, lost rebates, and additional administrative costs. This includes approximately $5 million in unrecovered upfront carrying costs by 2028, driven by the requirement to purchase MFP drugs introduced in years 2026, 2027, and 2028 at WAC. These costs reflect a permanent working capital obligation while awaiting manufacturer rebates. The rebate model would also create approximately $350,000 annually in new administrative costs, driven by additional staffing, compliance activities, and third-party software support not required under the current upfront discount model. CommUnityCare estimates an additional $1 million annual loss attributed to denied rebate claims, by 2028. Many of these losses are structural to the design of the rebate model and are outside the operational control of covered entities. Page 3 Carrying Costs due to Increased Upfront Drug Spend: Based on CommUnityCare's annual drug spend data, we estimate that it would cost $2,535,574 to purchase 90 days of drugs in the proposed rebate pilot at the WAC price in 2027, compared to the $285,402 we would spend to purchase those drugs at the 340B ceiling price without a pilot. This is an expense that we would need to carry indefinitely, tying up capital that would otherwise be used to fund services for patients in need. We project that the carrying costs will grow another $2.5 million in 2028, for a total of $5 million in carrying costs for the rebate model drugs, as we continue to serve more patients, and as more medications are added to the rebate pilot program. Annual Staffing Impact: CommUnityCare anticipates the need for two additional full-time equivalent (FTE) positions to manage the increased regulatory, operational, administrative, and compliance burdens associated with a rebate model. We estimate the annual cost of these positions at approximately $100,000 per FTE, including fringe benefits, for a total additional annual staffing cost of $200,000. Other Annual Operational Expenses: Due to increased operational complexity, CommUnityCare expects approximately $150,000 per year in additional vendor expenses. This expense covers a new module with one of our existing vendors that will help automate the process for monitoring rebate payments. Lost Rebates Due to Administrative Infeasibility: CommUnityCare projects approximately $500,000 in annual drug costs under the proposed 340B Rebate Model Pilot Program due to 340B-eligible claims that will never be qualified on the back end for administrative reasons. This represents 5% of the $10 million in WAC purchases CommUnityCare will spend on rebate model drugs annually by 2027. A $1,000,000 loss in 2028 is estimated at 5% of the $20 million in WAC purchases CommUnityCare will spend on rebate model drugs in 2028. One-Time Implementation Expenses: The annual costs outlined above do not include one-time implementation costs. CommUnityCare anticipates at least $100,000 in upfront costs to modify pharmacy software, develop custom dashboards, and design new internal workflows necessary to achieve baseline compliance before any rebates are received. Total Financial Losses: The total financial losses that CommUnityCare will incur under the proposed 340B Model Pilot Program include one-time implementation Page 4 expenses of $100,000, more than $2,500,000 in annual carrying costs by 2027, an additional $2,500,000 in annual carrying costs in 2028, $500,000 in lost rebates in 2027, $1,000,000 in lost rebates in 2028, and an estimated $350,000 per year in additional staffing and other operating expenses, for a total of $3,450,000 in 2027 and $3,850,000 in 2028. The total anticipated financial losses for CommUnityCare in years 2027 and 2028 are $7,300,000. Other Operational and Financial Risks A 340B rebate model inherently shifts risk from for-profit drug manufacturers to non- profit safety-net providers, threatening financial sustainability and patient access to care. Capital Tie-Up due to Carrying Costs: There are risks associated with the significant carrying costs required under a 340B rebate model, including capital tie-up and related working capital gaps. These risks have the potential to limit health center expansion at a time when Americans are losing access to health coverage and threaten the financial sustainability of community health centers. Cash Flow Challenges due to Disputes and other Rebate Delays: While we appreciate HRSA's proactive effort to mitigate concerns about cash flow by requiring drug manufacturers to issue rebates within ten days, there are still opportunities outside of the ten-day window for rebates to be delayed. For example, disputes between covered entities and drug manufacturers may lead to rebate delays. Missed Rebates due to Challenges with Claims Submission: A restricted window to submit rebate claims puts major risk on covered entities that may not be ready to submit claims within that window. CommUnityCare has found that our in-house pharmacies often need more than 45 days to dispense an entire package of a drug, and a 45-day window for 340B drug claim submission is often too short of a timeframe, in our experience with contract pharmacy partners' replenishment timelines. Under a rebate model with a restricted window for submitting claims, there is a structural barrier that will prevent us from receiving rebates we are legally owed. Losses due to Misaligned Discounts and Rebates: Under a 340B rebate model, covered entities do not receive discounts on drugs until after they have charged the patient. This means rebate amounts may not match patient sliding Page 5 fee discounts or reimbursement amounts. Community health centers will essentially have to make guesses about rebate amounts ahead of time, to determine what to charge their patients for drugs, opening the door for unpredictable losses if discounts and rebate amounts do not ultimately align. Missed Rebates for Drugs Dispensed by Contract Pharmacies: The proposed 340B Rebate Model Pilot Program does not fully account for the operational realities of contract pharmacy arrangements and may result in missed rebates for community health centers that rely on contract pharmacies to administer sliding fee programs. Because patient discounts are applied at the point of dispensingbefore replenishment occurs-sliding fee discounts may be applied to WAC-purchased drugs that never subsequently qualify for 340B pricing. Contract pharmacies control purchasing processes, package size requirements, and the timing of replenishment, leaving community health centers unable to ensure that 340B-eligible claims are replenished within the 45-day timeframe required under the rebate pilot. When replenishment does not occur within that window, rebates are permanently forfeited, undermining the financial integrity of sliding fee programs. This concern is particularly acute for CommUnityCare due to our nearly150 contract pharmacy partners and our extensive use of sliding fee programs to support patient access. Absent any adjustments to the replenishment or rebate timing requirements for contract pharmacy arrangements, the pilot risks unintentionally disadvantaging health centers that rely on these models to serve lower-income patients. Clinic Administered Drugs (CADs): The proposed 340B Rebate Model Pilot Program poses a risk of additional unpredictable financial losses, including unanticipated one-time and ongoing operational expenses. For example, if the rebate model applies to clinic-administered drugs (CADs)which frequently include high-cost injectable therapiescovered entities may incur new implementation costs related to software, system integration, workflow redesign, and staff training to support rebate eligibility, tracking, and reconciliation. In addition, the requirement to purchase these drugs at WAC and seek post-administration rebates introduces heightened cash flow exposure due to the high acquisition costs associated with CADs. Other Unpredictable Financial Losses: The rebate model also creates heightened risk of unpredictable financial losses for community health centers, such as CommUnityCare, that rely on contract pharmacies. Navigating Page 6 manufacturers' varying rebate and data requirements across multiple contract pharmacy arrangements requires significant third-party administrator (TPA) intervention, and TPAs may pass through the costs of developing and maintaining rebate-tracking modules through increased per-claim or administrative fees. These costs are difficult to predict or control and may further erode the financial resources available to support patient care. Patient Irnpact Lower-income, uninsured, and under-insured patients will ultimately face the consequences of the proposed 340B Rebate Model Pilot Program through reduced access to affordable medications, as well as through reduced access to other services that have traditionally been supported by 340B cost savings. Reduced Access to Contract Pharmacies: CommUnityCare utilizes nearly150 contract pharmacies to expand access to pharmacy services for our patients, including for patients who lack consistent access to transportation. Contract pharmacies may be hesitant to participate in a rebate model given the uncertainty around rebates and the operationalization of replenishment inventory accounting systems. We have already received communications from some of our contract pharmacy partners that they will not be ready to participate in the proposed 340B Rebate Model Pilot Program. If these contract pharmacies leave our network, our patients may need to travel further to access critical and Iife-saving medication. Drug Shortages or Delays: Under a rebate model, covered entities must purchase drugs at the full WAC price, which is substantially higher than the 340B ceiling price. CommUnityCare operates a large 340B program - with roughly 260,000 claims last year - requiring it to purchase a large supply of drugs at one time. Given the quantity of drugs that CommUnityCare must stock, there is risk that higher WAC prices will cause us to reach or exceed our wholesaler credit limits, halting our ability to order critical medications until payments are submitted to the wholesaler. This could prevent patients from accessing critical and life-saving medications in a timely fashion. Fewer Sliding Fee Discounts: In 2025 CommUnityCare provided $74 million in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will Page 7 Sincere decrease significantly under a rebate model, given the costs and risks outlined above. This is problematic given that the vast majority of our patients are lower- income, and more than half of our patients are uninsured. Reduced Access to Care: Community health centers reinvest 340B savings into patient-focused programs that expand access to care beyond core grant- funded services. Last year, through approximately 260,000 340B-eligible claims, CommUnityCare generated roughly $34 million in savings. After providing deeply discounted medications to patients in need, these savings were used to fund services such as home delivery of medications for housebound patients, patient transportation assistance, vaccination pop-up clinics, and community health worker and pharmacy programs. These programs are directly supported by 340B savings and would not otherwise be financially sustainable. Financial losses and increased uncertainty associated with the proposed 340B Rebate Model Pilot Program would require CommUnityCare to scale back or eliminate these services, directly reducing patient access to care. ln closing, CommUnityCare respectfully urges HRSA to reconsider the proposed 340B Model Pilot Program and to exempt community health centers from participation. The current 340B program enables safety-net providers to stretch scarce federal resources, stabilize operations, and reinvest savings directly into patient care, consistent with congressional intent. A rebate-based model would undermine these outcomes by shifting significant financial and operational risks onto community health centers and, ultimately, the vulnerable patients they serve. We appreciate the opportunity to provide these comments and welcome continued dialogue with HRSA to ensure that any program changes preserve access to care for patients most in need. Nicho as Yagoda, MD Cristie Pellegrini, BSPharm, MHA Chief Executive Officer Chief Pharmacy Officer Page 8
HRSA-2026-0001-1620Blessing Health System2026-04-17T04:00Z19,119 chars
Attached is a PDF copy of Blessing Health System's response to the Request for Information on the 340B Rebate Model Pilot Program. As stated in the response, it is representative of the opinions of two Covered Entities, Blessing Hospital and Illini Community Hospital, both of which are owned under the umbrella: Blessing Health System. B BLESSING Health System PO Box 7005 • Quincy, IL 62305 • 217.223.8400 blessinghealth.org April 15, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA−2026-03042) Dear Administrator Engels: Blessing Health System, which consists of two hospitals (Blessing Hospital and Illini Community Hospital) that participate in 340B as a covered entities (CEs), provides these comments on the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs—10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our health system strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our health system has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis—not post-sale rebates—and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program—including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care— is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSA's assumption that a rebate model—even one designed with safeguards—could cause only a "minimal impact" on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care—outcomes that conflict with the program's statutory intent. HRSA's continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSA 's withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers' beneficial treatment under the pharmacy benefit manager's (PBM's) formulary. An example of this already happening is the medication Amjevita when manufactured by Optum Specialty Distribution Holdings, LLC. This product, when sold by the original manufacturer, Amgen, has a 340B discount with calculated ceiling price of about $165 and an average WAC price of about $1385. However, the Optum PBM requires the use of their own formulation which offers no 340B savings due to not being enrolled in the Medicaid Drug Rebate Program." This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers' commercial agreements. At a minimum, manufacturers should not be permitted to use CEs' rebate claims data for commercial purposes. Pe 1D: D0CF1608-0766-4209-BF48-197B0DBDC8E9 A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSA's new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340B's long history as an upfront discount program. The impacts of this would include, but are not limited to, a monumental decrease in the overall charity care our health system provides to our community, an inability to be able to afford the finances and resources to bring in varying specialty providers to our community, the potential need to close a charity "clean-site" meds-to-beds pharmacy at our Critical Access Hospital, and an inability to retain current specialty providers (This would result in patients likely needing to travel 2 hours at a minimum to reach these specialty providers.) We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers' high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our health system an additional estimated $55,000. Over the course of one year, we believe our health system would be required to front to drug manufacturers approximately $11 million. This is comprised of approximately $10.8 million at Blessing Hospital and $0.2 million at Illini Community Hospital. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care It is the stance of our health system that these changes will prove to be a much larger burden then it seems to be believed. We wholly disagree with the statement that these new data requirements and delays in savings will have minimal effects on the care we can provide our patients as a community of safety-net hospitals. Our health system has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSA's withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers' rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. This would likely include, but is not limited to, the costs of hiring additional employees to attempt to audit and manage a rebate pilot fully and the need to pay and contract with additional vendors or third-party administrators to manage this proposed program effectively. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers' policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settings—not just contract pharmacy—the administrative burden and financial risk would increase greatly. • This would likely result in the need to contract with other third-party administrators or various vendors to achieve a system that our health system can utilize to manage these rebates effectively, as our health system would now be accountable for more aspects of managing this program. This means that, in addition to the following responsibilities: ensuring the claim is eligible, the medications are purchased, stored, and handled appropriately in regards to the 340B program, and that all data is flowing correctly and securely to the appropriate vendors and third party administrators; our health system would also be responsible for the following new responsibilities, and possibly more that is yet to be understood: validating rebate status to ensure timely and appropriate payments, validating claim status to ensure claims are correctly identified as 340B eligible or not, communicating with HRSA, third party administrators/vendors, and manufacturers any time there is a discrepancy, and managing the data flow to additional third parties (indicating a new and potential risk for data leakage and misuse). As of now, Blessing Health System is discussing internally the need for more employees and resources to manage the IRA/MFP requirements. It is expected that the burden of a rebate model that applies to all payors that would qualify for 340B, not just Medicare Part D, would result in the following estimated costs: At least 2 additional Full-Time Employees: Total Estimate is $18,000 initially as well as $217,000 annually costs to the health system. $18,000 for employee onboarding $155,000 annually for salary alone $62,000 annually for benefits Additional third-party vendor to assist in managing the rebate program: estimated to be at least $80,000 annually. • We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Standard data timelines for our health system result in, at minimum, a seven-day delay between prescription being written/administered, data being sent to third party administrator, and data being checked for validity by 340B staff. Furthermore, there are many claims that take much longer due to a variety of factors including: data/technology issues, pharmacy claim issues, patients not filling prescriptions immediately, insurance issues, and many more. It would be most accurate to expect an average delay of up to 30 days with many claims reaching more than 90 days due to various system issues needing to be worked around and various delays throughout the entire process. This is all assuming that there are NO issues with submitting data to the manufacturers. O This means most claims will be purchased at the increased price and the health system won't receive rebate to accommodate the 340B discount for up to 40-100 days on average. The mandate to submit data to manufacturers would add, yet another, entity in which we are sending claims level data just to have access to pricing that is, by statute, already intended to be available. As mentioned above, this data submission process is tenuous and error-prone. The rebate model would also add a new element of submitting claims data to manufacturers and third party administrators/vendors for medical claims (including, but not limited to, Hospital and Office administrations) which is something that our health system is not currently doing, nor are we set up with our various vendors to be able to do at this time. There would also be various additional data fields that would need to be sent: HCPCS Code, HCPCS Modifier, Unit of measure. On top of this, the following data fields would have to be modified for medical claims data: Rx Number ! Claim Number and Claim Line Number and Bin PCN and Group number Health Plan Name and Health Plan ID. Rebate costs will reduce resources available for patient care. Shown on the following two pages are impact statements we produce internally to advocate for some of the variety of ways the health system gives back to the community by using the savings we receive by being part of the 340B program. Nearly all of these impacts would be drastically reduced or destroyed completely by the burdens and costs of the proposed rebate program. 340B IN ACTION Blessing Hospital Quincy, Illinois The 34oB prescription drug program is a vital lifeline for safety-net providers, supporting crltical health services in our communities. The program is narrowly tailored to reach only haspitals that provide a high level of services to low- Income Individuals or that serve isolated rural communities. Savings from the 34oB program help hospitals meet the healthcare needs of underserved patlents across the country. Congress should preserve and protect the 340B program as an essential part of the safety-net that does not rely on taxpayer dollars. The 340B Impact in Our Community: 340B by the Numbers: Blessing Hospital is the largest health care provider in the tri-state area, Without Blessing Hospital, our $39,433,023 100 patients would have to drive more than an hour to Our approximate Miles away from the next closest institution to receive similar care. annual 3408 benefit the next closest Blessing Hospital provides services to outlying rural institution that $30,026,805 communities at a loss to ensure care to underserved provides trauma populations. Uncompensated care provided in Fiscal services or BH subsidizes dental services to the health Year 2025 mental health department for at-risk patients. services Provide reduced or no cost medications to our unt- or underinsured patients. Support the local free clinic, absorbing the cost of providers, diagnostic testing and medications. B BLESSING wet Systern 340B IN ACTION 3335418138 IlliniCommunity Hospital Pittsfield, Illinols The 34oB prescription dirug program is a vital lifeline for safety-net providers, supporting crltical health services in our cammunlties. The program is narrowly tailored to reach only hospitals that provide a high level of services to low- Income Individuals or that serve isolated rural communities. Savings from the 340B program help hospitals meet the healthcare needs of underserved petients across the country. Congress should preserve and pratect the 3408 program as an essential part of the safety-net that does not rely on taxpayer dollars. The 340B Impact in Our Community: 340B by the Numbers: Illini provides services to outlying rural communities at a loss to ensure care to underserved populations. $4,674,005 $2,155,619 •Provide reduced or no cost medications ta our un-or Our approximate Uncompensated care provided in Fiscal underinsured patients. annual 340B benefit Year 2025 L As a small Critical Access Hospital, patient volumes do not support certain services. Because of our 340B savings, services such as cardiology, pulmonology, urology, abstetrics, podiatry, nephrology and gastroenterology are available to this rural community. Provide health and wellness services to the communities we serve. BLESSING Hee Syston HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers' vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. The existing MDPNP process is functioning well overall. The percentage of claims with errors is small compared to our total MDPNP claims. We are addressing any issues with the manufacturers or complaining directly to CMS. Thank you for considering our comments. Sincerely, fam Tte Tim Tranor, EVP/Chief Operating Officer Emp w Patrick M. Gerveler, EVP/Chief Financial Officer DocuSigned by: HOULY JONES Holly Jones, VP/Administrator Illini Community Hospital & Denman Services, Inc. Britni Skirvin, Administrative Director Ancillary Services & Pharmacy Signed by: Eric Martin Eric Martin, Director Clinical & Outpatient Pharmacy
HRSA-2026-0001-1621Escambia Community Clinics Inc. D/B/A Community Health Northwest Florida2026-04-17T04:00Z115,941 chars
Escambia Community Clinics Inc. D/B/A Community Health Northwest Florida (CHNWF) #40B rebate model comments. POC Walter Arrington, MSW, Director of Grants & Development community health northwest fiorido HealthcoreWithirtReach.erg April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Escambia Community Clinics Inc. D/B/A Community Health Northwest Florida (CHNWF), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharrnacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering ixnpacts: Financial. Losses: Nationwide, CHCs report an average loss of approximately $285,000 to $3,500,000 from entity-owned pharmacy operations and 18% reduction in savings for contract pharmacy arrangements due to the admithstrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For CHNWF in particular, this means it will affect: Number of 340B transactions affecting our more than 49,000 patients. Current admin costs for your 340B program are minimal and the prQposed rebate model represents a significant increase in administrative costs that a health center our size cannot sustain. Currently all of our 340B rebates are directed back into patient care supporting services that the community relies that operate at a net loss including, women's health, behavioral health, optometry, lab services, radiology, unhoused healthcare, mammography, gerontology, Substance use disorder care, and wellness services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non adherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharrnacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of coinmunity health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 such as Xarelto* and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 Iist includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMBD: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://wwwahajournals.org/doi/odf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.v,ov/data/data-we-collecensduh-n ati onal-surveydrug-use-and-health/national-rel eases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a phannacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 4 A. Detailed AdministrativeOperaticmal Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CHNWF provided 47,130 visits to patients who utilized sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CHNWF anticipates needing two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CHNWF anticipates an inerease of 8300,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of irnplementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' CHNWF estimates we will need to hire two additional FTEs Additionally, several CHCs estimate the cost to hire additional staffto be between $30,000 to $200,000 annually.8 CHNWF, serving approximately 49,000 unique patients last year, anticipates annual costs exceeding $3.5 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. CIINWF estimates that it will require an additional 40 hours of work weekly to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 manufacturers will force CHCs to use multiple internal systems to manage and report the sarne data, thereby increasing costs and operational burdens. CIENWF urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Adininistration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. CHNWF estimates $250,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 49,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costs is estimated at $3,500,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. CHNWF will be required to take on the costs associated with ensuring that all systems are fully integrated One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. CHNWF ESTIMATED ONE-TIME INTEGRATION COST of $300,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently collaborates with three pharmacies to increase access to affordable medications. 6 TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across four different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Northwest Florida, and lower Alabama with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Kevstone Pharmacies I Pharmacy and Clinical Pharmacolou 1 JAMA Network Open J JAMA Network 10 https://www.healthaffairs.oreidoi/abs/10.1377/hlthaff.2024.0019rjournalCode=h1thaff 7 including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHNWF provides medications to our patients on a sliding fee scale with the introduction of this model that progam is at risk for our patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a HR.SA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliancelcompliance- manuaUchauter9#footnotel0 13httos://enlivenhealth.co/bloe/vear-end-business-heaith-check-kev-metrics-everv-gharmacv-owner-should-review 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and triclde down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 14 httos://34Obtricing.hrsa..gov/ 15 https://www.cms.gov/files/zip/selected-drua-list-neizotiated-prices-also-known-maximum-fair-Drices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 3 40B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $1.3 million dollars to purchase these 10 drugs under the proposed rebate model. Curently, our organization spends $23,779 to purchase these same drugs at the 340B ceiling price. This represents a 5466% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 34013 Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHNWF anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Women's Health, Laboratory Services, Radiology, Social Services/ Case Management, and disband our whoie Behavioral Health Department Operating Hours: We anticipate needing to reduce our clinic hours across all 17 sites totaling 170 per week; specifically affecting all service sites especially our walk-in and weekend services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund two social workers that manage and support care for our most vulnerable community members. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 16,000 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. 10 CHNWF asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources-- by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other rnajor revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit linnts, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. O Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terrns, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CHNWF estimates its 2027 Annual Rebate Opportunity Cost to be approximately $506,542. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. CHNWF estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $175,000. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to close down significant service lines. If CHNWF did not shut down services, we would be forced into debt to maintain our drug supply. This creates an environment ofclinical instability. In our region, where patients have no choice but to rely on CHNWF, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays CHNWF urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate rnodel is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data 11 or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $525,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition, cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) hap s://www. federalregi sten gov/docum en ts/2025/08/01/2025-14619/34 Ob-pro gram-n otice-appli cad on-proces s-for-th e-34 Ob- rebate-model-nilot-program 12 covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits." The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B progam's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/filesitirsa/ooaldispute-resolution-orocess-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 13 review panel assignment. Given the time to complete the review and up to 180 days to return a detennination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharrnacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA' s statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payrnent timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventorr.es operate on eligible 340B dispensations that must reach full 19 Administrative Dispute Resolution Regulation, https://www.govinfo.govicontentivka/FR-2024-04-19/udf/2024-08262.pdf 14 package size before purchases are rnade. Because the logic used by manufacturers and covered entities differs, they can rnisalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Defmition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.2 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPI\TP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP cletermination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. 2 Section 340B of the Public Health Service Act, https://www.hrsa.govisites/default/files/hrsairural-health/ohs-act-section- 340b.pdf 21 httos://rnfp.supoort.beaconchannelrnanagement. com/en/arti cl es/13335320-validation-codes-and-pri cin a-codes-zlossary 15 Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence ofrecent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA IVIER Reprice Pricing Value other than WAC used to determine IVIFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If IIRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existMg systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and stafftraining. NACHC estimates these costs would range from $30,000 to $50,000 annually and 22 hap s://publi c-inspection. federalregister. gov/2025- I 4619.p df?1753965918 15 could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicue Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-teim applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concems within the 340B Prograrn. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data 23 Internal NACHC survey data 17 on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to deterrnine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (IVER) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the govermnent's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CIVIS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility ofmandatory reporting of data elements to the 34013 repository by covered entities in future rulemaking. CMS noted that many covered 24 5 U.S.C. 500-596; Food & DrugAdmin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.aovirezilatory-information/search-fda-Ruidance-documents/least-burdensorne-orovisions-concept-and-orincioles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 18 entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near fitture and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ulfimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary ofHHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfiffly submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall 26 CY 2026 PFS, Final Rule, https://vvww.aovinfo.gov/contentioka/FR-2025-11-05/ndf/2025-19787.pdf 27 H.R. REP. 102-384(11) 19 enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugnakers to charge prices above the 340B statutory ceiling price. That statute merely states that a druDnaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."3 That clause cannot be read in a vacuum. HRSA' s authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,1 shall not 29 42 U.S.C. 256b(a)(1) 29 Id. 3 42 U.S.C. 256b(a)(1) 20 request payment under" the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 liRSA and dmgmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute gants neither MIS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B clairns data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugnakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition, And a cursory mention of the term "rebate" in a parenthetical ofthe statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugrnakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CEICs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will inipose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B 31 Indeed, the 340B statute states that the covered entity may choose "opt-ions" for billing 340B drugs to Medicaid. Specifically, it states that the FIRS may "develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 21 drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies Where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate Methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have iMplemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugrnakers by authorizing them to determine when a. rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's fu.ture discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional eosts are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states Provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and Confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a C.F.R. 447.518(a). 22 rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when subrnitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Pro gams. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possibk prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "{i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."39 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, httns://www.cms.gov/files/docurnent/av-2028-fmal- guidance.odf 33 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, httos://www.regulations.gov/comment/HRSA-2025-0001-0095. 23 and will contribute to cash flow problems and financial instability for the impacted safety net providers.s4o Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugrnakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugrnakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even ifCHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a clairn as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medieaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this 48 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-09SO, https://www.regulations. gov/commen t/HRSA-2025 -0001-0980. 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 24 raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: covered entity shall not request payment under title XLY of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for alI Medicaid managed care enrollee identification cards for pharmacy benefits. httos://www.ecfrgov/current/titie-42/chapter-IV/subchanter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 25 C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Prog-am in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutorybasis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE' s retail network pricing and TRICARE's manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would leam of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but 1RICARE also does not get the benefit of a TRICARE rebate because a manufacturer rej ects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statute's design reflects Conwess's intent to ensure non-discriminatory access to 44 32 C.F.R. 199.21(q)(2)(iii)(E) 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 26 discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug altematives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.S0 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.' Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 3408 Drug Pricing Program meaning a total ofroughly $6 billion annually.") " Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, wwwKalderos.com (Oct. 2023), lssue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least .. $6 billion annually" in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). 5 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts. www.Kalderos.com (Oct. 2023), lssue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . .. is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 52 340B Report, Legislative Map: Contract Pharmacy Protectian Bills, httos://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/lezislative-mapilaws-passed-that-prohibit-pbm-underpayment/. 27 We believe that Congress clid not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that H_RSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutoxily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affumative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. hi addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA carmot $' Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). s4 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). $5 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 57 42 U.S.C. I320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 28 lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized progam. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 34011-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient ofthe CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugnakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so $8' 42 U.S.C. 25610)(5)(B) 29 registered as eligible by the State program."59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. a9 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 6 H.R. REP. 102-384, 16 30 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. O Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims 31 information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventhig duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who /nay access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagiosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model6' published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to conunercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received sighficant bipartisan support in Congress. Examples include: 61 httos://beaconchanneimanagement.com/pages/resources (Johnson & Johnson Policy Documents) 32 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Ivledicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CHNWF strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 3408 programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHNWF believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CHNWF appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Walter Arrington, MSW, Director of Grants & Development warrington(&,chnwf. org Cell 850 428-8933 Sincerel C ndra Smiley, S CEO Escambia Community Clinics Inc. D/B/A Community Health Northwest Florida (CHNWF) 33
HRSA-2026-0001-1622Advantage Care Health Center2026-04-17T04:00Z14,971 chars
See attached file(s) for my comment regarding the 340B Rebate Model Pilot Program and its effect on our health center. 1 4/15/26 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Advantage Care Health Centers and the 2,472 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The mission of Advantage Care Health Center is to provide coordinated, patient-centered healthcare with a commitment to those who are underserved. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate an estimated annual loss of $12,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Advantage Care Health Center strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. 2 By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Advantage Care Health Center, a 340B Rebate Model Pilot Program will impact: 2,020 patients with intellectually and developmental disabilities served Our ability to provide medical, dental, and mental/behavioral health services to children and adults Care coordination Our ability to cover losses for patients that utilize sliding-fee services We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: We expect that our current staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Additionally, there will be significant increases in costs required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Advantage Care Health Center helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as: Offering care coordination to all our patients who will benefit; particularly those who are chronically ill avoiding unnecessary ER visits and/or hospitalizations Supporting coordination of access to social determinants of health through partnerships with community-based providers Offsetting the losses associated with offering a sliding scale fee to under/uninsured patients Supporting patient education to medically complex patients Funding translation services for limited English proficiency patients Funding training for employees to sustain and develop clinical skills The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop 4 purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. 5 F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Advantage Care Health Center strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Janet Abisror at jabisror@advantagecaredtc.org. Sincerely, Janet Abisror
HRSA-2026-0001-1623Nathan Littauer Hospital2026-04-17T04:00Z14,538 chars
See attached file(s) April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Nathan Littauer Hospital, located in Gloversville, New York, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Nathan Littauer Hospital that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanisrn. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Nathan Littauer Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Nathan Littauer Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more 1 rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Nathan Littauer Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Nathan Littauer Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Nathan Littauer Hospital understood that we would incur sorne reasonable administrative costs. We designed our hiring, operations, and program adrninistration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Nathan Littauer Hospital cannot provide exact figures for the increased costs of managing a partial or full rebate model. However, we can anticipate, based on prelirninary discussions with our third party administrator and third party cornpliance vendors, that there will be significant start-up and rnaintenance charges for any rebate model. For example, this cost to our third party administrator and for our third party compliance vendor we would estirnate an additional $45,000 in additional costs annually. Unilateral changes by rnanufacturers to the 340B prograrn have already significantly reduced Nathan Littauer Hospital's program benefits, while at the same time markedly increasing administrative costs. In the five year period 2019-2023, Nathan Littauer Hospital has experienced an approximately 80% decrease in 340B program savings while at the same time necessitating far greater amounts of labor to realize the remaining benefit. We also anticipate significant increases in labor to manage this type of model far in excess of HRSA's five hour per week estimate. In addition to burdens to existing staff, we believe we will need to add, at a minimum, one additional FTE to cover internal compliance, data submission, reconciliation, audit support, and where applicable, challenges to denials. Further, it is unlikely that our third party administrator would be able to extract the required rnedical claims data from our electronic health record, thereby necessitating an entirely new manual process to be designed and implemented. Staffing Impacts Under a Potential 340B Rebate Program. Nathan Littauer Hospital does not currently have the staff needed to comply with a Rebate Prograrn. 2 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Nathan Littauer Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Nathan Littauer Hospital engages the services of a third party compliance vendor to assist in data: collection, submission, retention, validation, and maintenance of our manufacturer restriction compliance activities. The process requires this vendor to access each third party administrators' system to download, validate, and submit the data. To provide the additional data required by the rebate model, collaboration between our third party administrator, third party compliance vendor, and Nathan Littauer Hospital personnel will be required to ensure accurate submissions. These changes to support data integrity will impose a burden far in excess of what HRSA has estimated. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount rnechanisrn, any rebate mechanism will force Nathan Littauer Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have rneaningful impact on our institution and the patients we serve. Though the anticipated payment period is noted by rnanufacturers to be ten days, we believe that our experience with the current payment process for Medicare Transaction Facilitator claims payment provides a meaningful benchrnark for a true potential payment period. It has been our experience that claims are paid in approximately 30-90 days depending on the manufacturer and the drug. This payment delay has already proven burdensome to our organization. Nathan Littauer Hospital projects that a change to a rebate model will have significant cash flow impacts that will result in its inability to meet financial obligations in many areas of its operations. This additional burden could result in putting at risk the organization's ability to continue its operations without significant cuts to services and its ability to serve the community. Nathan Littauer Hospital has sustained several years of negative operating results post Covid which has resulted in a significant decrease in its available cash resources. 3 Nathan Littauer has incurred double digit negative margins for more than five years, resulting in a decrease of 58% to its days cash on hand. This decrease in cash resources has resulted in challenges in its ability to meet primary operating costs and make timely payments to necessary vendors. The decrease in cash resources has resulted in a significant increase in Accounts Payable, which has grown by approximately 90%. Delayed payments have in some cases increased costs for interest and forgone discounts compounding our financial challenges. Transitioning to a rebate model that moves current upfront cost savings to a delayed model will only add additional financial challenges to Nathan Littauer Hospital and its ability to meet its obligations and continue services. Investments in necessary medical equipment will be negatively impacted and critical services to the community may be forgone. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that rneans that Nathan Littauer Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will or reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Nathan Littauer Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. 4 Nathan Littauer Hospital has expended significant resources to evaluate the proposed obligations imposed on us through the Terms of Use ("Terms") established by Second Sight Solutions. The claims data consist of health information that is legally protected under federal and state laws, so errors or negligence on their part could expose us to significant liability. The Terms include having to indemnify Second Sight frorn liability should an unauthorized disclosure occur. Further, changes may be made to the Terms at any time and are legally binding on Nathan Littauer Hospital, even if we have not been notified of changes in advance. This imposes another obligation on Nathan Littauer Hospital to continually check for updates to the Terms and exposes us to additional legal risk. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Nathan Littauer Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date, Nathan Littauer Hospital has not been approached by any manufacturer regarding a 340B/MDPNP deduplication issue. Manufacturer-initiated audits of 340B covered entities are extremely rare due to the requirement for prior approval frorn HRSA. The most recent data available indicates that HRSA has only received two final audit reports from manufacturers between November 2022 and September 2024. This is likely the result of the implementation of the Alternate Dispute Resolution process. Nathan Littauer Hospital feels the Alternate Dispute Resolution process would address manufacturer concerns regarding any potential duplicate discount concern while not necessitating the irnplernentation a ruinous rebate model. For all of these reasons, Nathan Littauer Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. 5 If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Nathan Littauer Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Prograin and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the prograin will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Sean Fadale President and CEO Nathan Littauer Hospital, Gloversville, New York 6
HRSA-2026-0001-1624Kent County Memorial Hospital2026-04-17T04:00Z14,490 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Kent County Memorial Hospital (Kent Hospital), located at 455 Toll Gate Rd. Warwick, RI 02886, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Kent Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Kent Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Kent Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. 2 After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Kent Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Kent Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Kent Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Implementation of a 340B rebate model would result in significant incremental and administrative costs. One-time costs would be incurred during the startup phase and ongoing costs would be incurred after implementation to maintain the program. Kent Hospital is estimating that it will incur startup costs of $25,595 and annual costs of $112,950 to hire a new employee to support the 340B rebate model plus annual costs of $45,500 to maintain operational integrity. Key program cost drivers include, but are not limited to, increased staffing to support a 340B rebate model, increased use of IT resources to help with implementation (contracted out), fees from Third Party Administrators (TPA) to set up data feeds (we have been quoted at $1,000/month from one TPA) and consulting fees to help set up and implement the program. Staffing Impacts Under a Potential 340B Rebate Program. Kent Hospital does not currently have the staff needed to comply with a rebate program. Kent Hospital will need to hire and train an additional staff member in order to implement and maintain the 340B rebate model. It would take a minimum of 4-6 weeks to train a new employee to be proficient in the 340B rebate model and it would take 2-3 months to post a position, interview candidates, and onboard the employee. Kent Hospital expects it to take 3-4 months from the time the rebate model is announced to hire, onboard and train a new employee. Furthermore, additional new staff may be needed to be hired and trained, to 3 comply with an entirely new, and more burdensome, model of reimbursement-so these estimates are conservative. HRSAs current estimate of only 5 hours per week in additional work is a gross underestimate. Kent Hospital administered and dispensed over 10,000 claims of proposed rebate model drugs to 340B patients. This would result in nearly 1,000 claims needing to be reported to Beacon monthly. This will require significant time to properly report all the claims, especially the medical claims, which require additional data elements. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Kent Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Scarce IT resources will need to be dedicated to supporting data procurement and new reports will need to be created to properly collect the data requested for a 340B rebate model. IT resources will also need to collaborate with Third Party Administrators to implement a reporting structure for medical claims. This involves numerous hospital departments including revenue cycle, patient financial services, pharmacy, and IT. For example, the data that Beacon is requesting for medical claims is not data that is typically supported by Third Party Administrators and additional expense will be incurred to properly set this up. Beacon is requesting data for medical claims reporting that is difficult to obtain, which includes Claim Number, Claim Line Number, Health Plan Name, and Health Plan ID. This data lives outside of pharmacy systems and will require extensive programming and report writing to properly obtain the requested data. Kent hospital is estimating that it will incur $12,000 of additional startup costs related to properly setting up IT infrastructure to report claims for the 340B rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Kent Hospital currently collects data for the 340B program from the hospitals electronic health record, specifically in the pharmacy systems. In order to comply with the 4 340B rebate model, Kent Hospital will need to start collecting data from the revenue cycle and patient financial services databases to satisfy the medical claims data requests (claim number, claim line, health plan name and health plan ID). This will place a significant burden on staff that are dedicated to support the 340B rebate model. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Kent Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The implementation of a 340B rebate model would add significant financial pressures to Kent Hospital and could negatively impact its operations. Kent Hospital is a 359-bed acute care hospital. It ranks as Rhode Islands second-largest hospital, serving around 300,000 residents in central Rhode Island, and is recognized as providing essential services in its community. Kent Hospital provides care programs in emergency medicine, family medicine, internal medicine, podiatry, diabetology, and gastroenterology. Its Emergency Department (ED), classified as a high-volume ED by CMS, handles roughly 55,000 patients annually and is one of four hospitals in Rhode Island offering emergency angioplasty for heart attacks. Additionally, it has been recognized as a verified geriatric surgery facility by the American College of Surgeons Geriatric Surgery Verification (GSV) programthe first hospital in New England and the 25th nationwide to earn this distinction. Kent Hospital also provides local care for conditions like cardiology, pulmonary issues, thoracic surgery, colorectal surgery, and other specialties. Kent Hospital serves a large volume of publicly insured and underinsured Rhode Island residents, for whom the reinvestment of savings from the 340 B program into these critical services are especially beneficial. The financial impact of a rebate model would be high, right from the start. If the first 25 drugs of the IRA MFP are approved to the 340B rebate model, Kent Hospital would need to pay approximately $25,713,556.49 in additional upfront costs to purchase the drugs at the wholesale acquisition cost (WAC) price. HRSA has suggested that covered entities will receive the 340B rebate before the WAC invoice is due to be paid, but that is not accurate for Kent Hospital. Due to its volume of purchases, Kent Hospital is contracted with its primary wholesaler to pay invoices on a weekly basis, therefore, the 5 WAC invoice will be paid at full price prior to the 340B rebate being issued, which will create the addressed cash flow concerns. The 340B rebate will be processed within 10 days of the claims being reported to Beacon and other drug companies, but Kent Hospital will likely not be able to report claims on a daily basis. Weekly reporting is more realistic, and this means that rebates could be withheld for up to 17 days depending on the timing of claims reporting. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Kent Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will likely suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Kent Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Kent Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. 6 Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Kent Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Kent Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kent Hospital 455 Toll Gate Rd. Warwick RI, 02886
HRSA-2026-0001-1625Women & Infants Hospital of RI2026-04-17T04:00Z14,641 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Women & Infants Hospital of Rhode Island (W&I), located at 101 Dudley St, Providence, RI, 02905, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on W & I Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which W & I Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. W & I Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that W & I Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require W & I Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, W & I Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Implementation of a 340B rebate model would result in significant incremental and administrative costs. One-time costs would be incurred during the startup phase and ongoing costs would be incurred after implementation to maintain the program. W & I Hospital is estimating that it will incur startup costs of $25,595 and annual costs of $112,950 to hire a new employee to support the 340B rebate model plus annual costs of $45,500 to maintain operational integrity. Key program cost drivers include, but are not limited to, increased staffing to support a 340B rebate model, increased use of IT resources to help with implementation (contracted out), fees from Third Party Administrators (TPA) to set up data feeds (we have been quoted at $1,000/month from one TPA) and consulting fees to help set up and implement the program. Staffing Impacts Under a Potential 340B Rebate Program. W & I Hospital does not currently have the staff needed to comply with a rebate program. W & I Hospital will need to hire and train an additional staff member in order to implement and maintain the 340B rebate model. It would take a minimum of 4-6 weeks to train a new employee to be proficient in the 340B rebate model and it would take 2-3 months to post a position, interview candidates, and onboard the employee. W & I Hospital expects it to take 3-4 months from the time the rebate model is announced to hire, onboard and train a new employee. Furthermore, additional new staff may be needed to be hired and trained, to comply with an entirely new, and more burdensome, model of reimbursement-so these estimates are conservative. HRSAs current estimate of only 5 hours per week in additional work is a gross underestimate. W & I Hospital administered and dispensed over 2,000 claims of proposed rebate model drugs to 340B patients. This would result in nearly 200 claims needing to be reported to Beacon monthly. This will require significant time to properly report all the claims, especially the medical claims, which require additional data elements. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. W & I Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Scarce IT resources will need to be dedicated to supporting data procurement and new reports will need to be created to properly collect the data requested for a 340B rebate model. IT resources will also need to collaborate with Third Party Administrators to implement a reporting structure for medical claims. This involves numerous hospital departments including revenue cycle, patient financial services, pharmacy, and IT. For example, the data that Beacon, the third-party clearinghouse selected by HRSA to manage data submission and the rebate process, is requesting for medical claims is not data that is typically supported by Third Party Administrators and additional expense will be incurred to properly set this up. Beacon is requesting data for medical claims reporting that is difficult to obtain, which includes Claim Number, Claim Line Number, Health Plan Name, and Health Plan ID. This data lives outside of pharmacy systems and will require extensive programming and report writing to properly obtain the requested data. W & I hospital is estimating that it will incur $12,000 of additional startup costs related to properly setting up IT infrastructure to report claims for the 340B rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. W & I Hospital currently collects data for the 340B program from the hospitals electronic health record, specifically in the pharmacy systems. In order to comply with the 340B rebate model, W & I Hospital will need to start collecting data from the revenue cycle and patient financial services databases to satisfy the medical claims data requests (claim number, claim line, health plan name and health plan ID). This will place a significant burden on staff that are dedicated to support the 340B rebate model. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force W & I Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The implementation of a 340B rebate model would add significant financial pressures to W & I Hospital and could negatively impact its operations. Women & Infants Hospital of Rhode Island, a Care New England hospital, is one of the nations leading specialty hospitals for women and newborns and is recognized as providing essential services in its community. A major teaching affiliate of The Warren Alpert Medical School of Brown University for obstetrics, gynecology, and newborn pediatrics, as well as a number of specialized programs in womens medicine, Women & Infants is the ninth largest stand- alone obstetrical service in the country and the largest in New England. Women & Infants cares for approximately 8,700 deliveries per year and cares for 1,200 newborns per year in our Special Care Nursery the only NICU in the region. Women & Infants also provides specialty care such as gynecologic oncology, maternal-fetal medicine, urogynecology, reconstructive pelvic surgery, women's mental health, neonatal-perinatal medicine, pediatric and perinatal pathology, gynecologic pathology and cytopathology, breast disease, obstetric medicine, and reproductive endocrinology and infertility. W & I Hospital serves a large volume of publicly insured and underinsured Rhode Island residents, for whom the reinvestment of savings from the 340B program are especially beneficial The financial impact of a rebate model would be high, right from the start. If the first 25 drugs of the IRA MFP are approved to the 340B rebate model, W & I Hospital would need to pay approximately $3,443,452.69 in additional upfront costs to purchase the drugs at the wholesale acquisition cost (WAC) price. HRSA has suggested that covered entities will receive the 340B rebate before the WAC invoice is due to be paid, but that is not accurate for W & I Hospital. Due to its volume of purchases, W & I Hospital is contracted with its primary wholesaler to pay invoices on a weekly basis, therefore, the WAC invoice will be paid at full price prior to the 340B rebate being issued, which will create the addressed cash flow concerns. The 340B rebate will be processed within 10 days of the claims being reported to Beacon and other drug companies, but W & I Hospital will likely not be able to report claims on a daily basis. Weekly reporting is more realistic, and this means that rebates could be withheld for up to 17 days depending on the timing of claims reporting. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that W & I Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will likely suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. W & I Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on W & I Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, W & I Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow W & I Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Women & Infants Hospital of Rhode Island 101 Dudley St, Providence, RI 02905
HRSA-2026-0001-1626CommonSpirit2026-04-17T04:00Z5,863 chars
See attached file(s) CHI St. Alexius 900 East Broadway P 701.530.7000 Health PO Box 5510 CHIStAlexiusHealth.org Bismarck, ND 58506-5510 Imagine better health.'" April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Alexius Garrison, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St. Alexius Garrison that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Alexius Garrison relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers Si cerel , .,__._,_e Stephanie Kaul 340B Authorizing Official, Market CFO We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. CHI St. Alexius Garrison Garrison, ND As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonsoirit.org.
HRSA-2026-0001-1627Trinity Health2026-04-17T04:00Z19,979 chars
Please see attached response. Sponsored by Catholic Health Ministries | 20555 Victor Parkway Livonia, MI 48152 734-343-1000 trinity-health.org April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: HRSA-2026-0001-0001; Request for Information: 340B Rebate Model Pilot Program Submitted electronically via http://www.regulations.gov Dear Administrator Engels: Trinity Health appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The 340B Program is a vital lifeline for our 340B Covered Entities (CEs), just like it is for CEs around the country that serve rural and low-income communities. Trinity Health has serious concerns with the adoption of a wasteful rebate model, including through a potential pilot program. Any rebate mechanism will impose enormous costs and burdens on Trinity Healths 39 340B programs operating across 16 states and far outweigh any benefits that might come from it. By HRSAs own calculations, the cost of a rebate model is extraordinary for 340B CEs. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B CEs and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of CEs so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Trinity Health has relied on for years, is the best way to fulfill that purpose of the 340B program without unduly burdening the CEs it was designed to help. Trinity Health has done its best to provide detailed answers to the RFI in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, increased disputes over delays and denials, and decreased efficiency, leading to less money that Trinity Health can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require Trinity Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Trinity Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands added resources, imposing considerable additional Sponsored by Catholic Health Ministries | 20555 Victor Parkway Livonia, MI 48152 734-343-1000 trinity-health.org costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B CEand far above and beyond what we are experiencing now. For the 2026 proposed rebate model, Trinity Health planned for two additional full-time FTEs to support data submission and tracking centrally for the health system, in addition to needing at least one hour per week of additional time from each of our 39 programs to coordinate with our central team on questions and clarifications about rejected rebates. If the rebate model were expanded to include 25 drugs, Trinity Health would anticipate the need for at least four full-time FTEs to support that work. We expect these four FTEs to pull data from our three 340B software vendors and compile the data for submission. Because Trinity Health is not completely uniform in the setups across the health system, some of our CEs will need to manually augment the data to fill in gaps in data collection to meet the rebate model requirements. The new FTEs will submit the data, track the approval/rejection of the data, and coordinate with our CEs to gather and provide any additional data that may be required to support a rebate request. They would also coordinate with our 340B vendors on the software setups to support this work, as well as our internal IT team to ensure our ongoing ability to provide the required data. Finally, they would ensure payment of rebates, as well as follow up on denials until efforts are exhausted. This would need to be done for well over 1 million 340B rebate claims annually. HRSA has estimated 5 hours per week per CE, however our experience with the Inflation Reduction Act (IRA) deduplication, which is a vastly smaller volume of claims, indicates that is a gross underestimate. Working across multiple systems to prepare, submit, analyze, correct, and appeal determinations is extremely time- consuming work. The fact that there will be an estimated $645M at stake, resulting from purchasing IRA drugs at a higher cost, makes the work mission critical. Currently we pay Trinity Healths 340B software vendors to manage our 340B eligibility data and can extract data to support a rebate model. Services to track data submission and follow up on claim rejection are add-on services that are either not available from current vendors or are available at an additional cost. Trinity Health does not currently have any external software to support rebate claim tracking and are using internal systems and internally built automated processes to support IRA rebate deduplication for our wholly owned retail pharmacies. It is anticipated that we can use similar processes for the management of rebate claim tracking, however the volume of claims under a 2026 and 2027 MDPNP rebate model is about a million claims larger than our current experience with our owned retail pharmacy claim deduplication. This will likely require an external software system to manage these claims, or ample time to design and build an internal mechanism to track. We do not know what data elements will be made available to us to track the status of rebate claims; therefore, it is impossible for us or an external vendor to begin advanced planning for how we are going to track these million- plus claims. Once the pilot begins, the number of claims will grow daily, requiring us to invest in significant planning ahead of the model. If Trinity Health determines we do not have the internal capabilities to manage this work and must contract with a vendor to manage claims tracking, we will need time to put a contract in place. All of this increases the lead time to plan for a successful rebate model that will not adversely impact our CEs financially. Additionally, the need to either build an internal software capability or contract with an external vendor will increase the cost burden on our 340B programs, diverting 340B savings from the stated purpose of benefiting patients to instead the burdensome administration of the program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B CEs like ours. For example, both insisted that CEs already provide the required information through 340B ESP. That is incorrect. Trinity Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Trinity Health has already Commented [MR1]: Where does this figure come from? What does it mean? Sponsored by Catholic Health Ministries | 20555 Victor Parkway Livonia, MI 48152 734-343-1000 trinity-health.org invested 200+ hours in updating our electronic health record (EHR) to support the pilot rebate model, after over 20 hours of meetings with our IT and 340B Software Vendors to plan and understand the requirements. The additional build to our EHR was done solely to support the anticipated rebate model requirements and would not otherwise been performed, let alone prioritized. In preparation for the initial rebate model, CEs were not provided with clear data specifications. Complicating this, the requirements continued to be clarified and refined until the pilot was suspended. If another pilot were proposed, Trinity Health would need to make additional updates in our EHR to meet any changes in data requirements and would need adequate time to understand the data requirements, communicate with our vendors on how they will be able to receive the data from us, and then build the changes into our system. This work, required solely due to manufacturer requirements and not to enhance patient care, would need to be fit in around other enhancements and changes to our EHR that support patient safety, care improvement, and clinical excellence. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Trinity Health to effectively provide drug companies with interest-free loans as we await the discounts that are owed under the 340B statute. Even if drug companies diligently paid within a 10-day period as required under the prior iteration of the Rebate Program, the delayed discount will have a meaningful impact on Trinity Health and the patients we serve. Currently, Trinity Health spends approximately $26M annually on the CY 26 and CY 27 MDPNP drugs at the upfront 340B cost. Under a rebate model, purchasing these same drugs in the current quantities at the much higher Wholesale Acquisition Cost (WAC) would increase the purchase price to $671M annually. Trinity Health would bear an additional spend of $645M annually, if all the data submission goes smoothly and we are paid efficiently to redeem the outlay of cash in full. This figure exceeds the entirety of the savings of Trinity Healths 340B program annually. CEs would effectively be providing a loan to drug manufacturers, interest free, until they unilaterally determine we are eligible to receive the rebate. As a large health care organization, Trinity Health is keenly aware that many CEs within the safety net cannot increase their upfront expenses so drastically. Anything that threatens the safety net impacts all of us, because if CEs are forced to scale back or close services, the patients they serve must forego, delay, or find care elsewhere and that stretches the safety net even thinner. Adverse Impacts of These Additional Costs and Burdens All these many different costs and burdens add up. Unfortunately, that means that Trinity Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and communities will suffer in concrete ways. If forced to incur the upfront cost of drugs, rejected rebates, and the administrative expenses of managing a rebate model, Trinity Health will necessarily have to divert limited resources away from patient care. This runs directly counter to the purpose of the 340B Program, which is to allow CEs to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. At Trinity Health, 75% of the patients we care for in our CEs are covered by Medicare or Medicaid and another 2% are uninsured. Savings from the 340B program help Trinity Health live our mission to improve the health of our communities. Without these savings, our CEs would likely have to scale back or eliminate many services, forcing patients to travel further to get the care they need or forgo treatment altogether. 340B savings support programs across Trinity Health including prescription assistance programs, safety net health centers, and chemotherapy and other infusion services - that would be at risk if rebate models are implemented. Put simply, there is no sensible reason for HHS to allow the consequences to occur. These costs to actual care far outweigh any purported program integrity benefits. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express Sponsored by Catholic Health Ministries | 20555 Victor Parkway Livonia, MI 48152 734-343-1000 trinity-health.org statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Trinity Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B CEs like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. Trinity Health encountered serious problems with Beacon in preparation for implementation of the pilot. Responses through their customer support were slow and required multiple follow-up messages for the issue to be addressed. The build was continuously changing and was a work in progress even as the pilot was about to begin. If a rebate model pilot is to go into effect, CEs need a single system that is reliable and stable, so that we are not continuously told there is more to come! on a specific topic, but that the system has answers about how it will function so we can then make decisions and plan. With so many scarce health care dollars at stake under a rebate model, it is imperative that the system is clear in how it operates. Additionally, HRSA must designate a single vendor to work with, as allowing manufacturers to select their own vendor of choice with whom CEs are required to work significantly increases the complexity and expense of the model, and that expense effectively raises the 340B ceiling price. 340B CEs are entitled to pay no more than the 340B ceiling price for a 340B-purchased covered outpatient drug. When conditions are put in place that require a CE to work across multiple IT platforms, gather disparate data sets to meet data requirements, and use multiple processes to upload and track data, that effectively raises the cost of purchasing those drugs. Additional resources must be in place to support a rebate model, so the CE is able to obtain a 340B price. Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Trinity Health, HRSA should insist on reliance on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of CEs, their patients, and the communities they serve. Likewise, Trinity Health supports the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. Trinity Health urges HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication and program integrity. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Trinity Health has experienced the deduplication of 340B pricing and MFP rebates for MDPNP drugs since January 1st. The experience has been challenging and has required additional staffing to support the administrative complexities of reviewing claims in the Medicare Transaction Facilitator for accuracy of claim payment and denial. This indicates that a rebate model would be significantly more difficult and detrimental to our CEs, as the volume of claims requiring attention would be vastly larger. Currently, Trinity Health can purchase drugs at a 340B price when appropriate. After the fact, we can file Good Faith Inquiries for incorrectly denied rebates and can notify the manufacturer when paid rebates to which we were not entitled. The errors have gone in both directions, but we are able to maintain our 340B purchasing and resolve errors relatively quickly. Under a rebate model, Trinity Health anticipates an exponential increase in the amount of effort in reviewing data because a rebate model would include both retail and medical claims, and it would increase our drug spend by $645M annually. It would require us to urgently dispute any errors and submit additional data to be paid rebates to Sponsored by Catholic Health Ministries | 20555 Victor Parkway Livonia, MI 48152 734-343-1000 trinity-health.org which we are already entitled. Use of a neutral third-party clearinghouse while retaining the up-front 340B discount is the least harmful solution for CEs. To require CEs to bear both the cost of purchasing 340B drugs at WAC, while also bearing the significant operational expense of managing claims data extraction and formatting, submission, tracking, and reconciliation will significantly impair CEs ability to use all 340B savings to stretch scarce federal resources further, reach more eligible patients, and provide more comprehensive services. The savings would instead need to be used to support the upfront outlay of cash for WAC drugs, additional staffing, or supporting systems to manage the burdensome data tracking. Safety Net CEs, many which are small and rural CEs who have less sophisticated systems and small staffs among which this new work can be absorbed, will struggle under the administrative burden of a rebate model. Trinity Health believes HRSA should not move forward with the rebate model pilot program. It is a solution in search of a problem. Not only is this contrary to 340Bs intent, but HRSA has not provided a policy rationale explaining its decision to change decades of requiring 340B to operate as an upfront price discount. More accurately, it is a solution that will create a host of problems for those who provide care for rural and other underserved Americans. Thank you for your consideration of these comments and we look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please feel free to contact Jennifer Nading, Director of Policy and Regulatory Affairs, at jennifer.nading@trinity-health.org with any questions. Sincerely, Damon Redding Vice President & Chief Pharmacy Officer Trinity Health
HRSA-2026-0001-1628Sun River Health2026-04-17T04:00Z44,404 chars
Please see attached PDF. Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MS 20857 Submitted electronically through federalregister.gov/ RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) On behalf of Sun River Health, the largest Federally Qualified Health Center (FQHC) in New York State, I respectfully submit the following comments in response to HRSAs Request for Information on the 340B Rebate Model Pilot Program, published in the Federal Register on February 17, 2026. Sun River Health serves more than 250,000 predominantly low-income patients across over 50 communities in a 16-county region encompassing New Yorks Hudson Valley, New York City, and Long Island. For nearly 50 years, we have provided comprehensive primary, preventive, behavioral, and oral health care to medically underserved populations, and the 340B Drug Pricing Program has been foundational to that mission. Sun River Health has engaged deeply and continuously on this issue. We submitted detailed comments to HRSAs prior 340B Rebate Model Pilot Program Notice in 2025 (Docket No. HRSA-2025-14619), and our organization was one of only two FQHCs subjected to in-depth review in the U.S. Senate HELP Committees 2025 Majority Staff Report on the 340B Program. That review validated Sun Rivers stewardship, finding that our organization leverages 340B savings to provide significant discounts on 340B drugs and uses those resources as intended: to expand care and lower costs for patients. We write now with the benefit of that experience, the guidance of the National Association of Community Health Centers (NACHC) and Advocates for Community Health (ACH), and our own direct operational knowledge of the challenges a rebate model would impose. We also draw upon our organizations firsthand experience with the Inflation Reduction Act (IRA) Maximum Fair Price (MFP) deduplication process, which has proven operationally deficient and has exposed critical weaknesses in manufacturer-controlled rebate platforms. I. Primary Request: Exempt Community Health Centers from the 340B Rebate Model Pilot Sun River Healths primary position, consistent with those of NACHC and ACH, is that community health centers should be fully exempt from any 340B Rebate Model Pilot Program. The 340B statutes own legislative history expressly contemplated that different covered entity types may require different pricing mechanisms. The House Report accompanying the original legislation stated: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. H.R. Rep. No. 102-384(II), at 12 (1992). Congress recognized, at the very inception of the 340B program, that one pricing mechanism would not fit all covered entity types. The statutes authors directed the Secretary to select the approach that is most effective and most efficient for each type of entity. CHCs are direct providers of care operating on narrow margins with complex pharmacy operations and sliding fee obligations. A rebate model that may be manageable for other covered entities with different operational structures imposes fundamentally different burdens on CHCs, and the legislative history makes clear that the Secretary is expected to account for those differences. This position is further supported by active bipartisan legislation in Congress. The Community Health Center Drug Pricing Protection Act (H.R. 7391), introduced on February 5, 2026, by Representatives Jack Bergman (R-MI) and Jake Auchincloss (D-MA), would prohibit manufacturers from charging FQHCs and CHCs more than the 340B ceiling price at the time of purchase, directly exempting health centers from any rebate-based pricing model. CHC purchases under the 340B program represent just 5.8 percent of overall covered entity purchases. HRSAs own audit data consistently demonstrates that FQHCs are among the lowest-risk participants for diversion or fund misuse. Sun River Health reinvests every dollar of 340B savings into its HRSA-approved scope of project, as required by Section 330(e)(5)(D) of the Public Health Service Act and 45 CFR 75.307. In 2017, years prior to the original inquiry by the Senate HELP Committee, Sun River Healths Board of Directors adopted a formal resolution directing that all 340B savings be utilized to expand services for underserved populations. We undergo annual external audits with SpendMed using HRSA audit standards, participate in Operational Site Visits, and report comprehensively through the Uniform Data System. II. If No Exemption: Replace the Rebate Model with a Neutral Claims Clearinghouse Should HRSA decline to exempt CHCs, we strongly urge the agency to abandon the rebate model entirely in favor of a federally operated or federally contracted Neutral Claims Clearinghouse (NCC). We fully agree with NACHCs analysis that a clearinghouse would provide a stronger regulatory framework for ensuring that scarce federal dollars reach the patients they are intended to serve, while still accomplishing the deduplication goals HRSA has identified. Under an NCC, covered entities would submit standardized claims data to a secure federal platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D beneficiary. The platform would transmit deduplication data to the Medicare Transaction Facilitator. This approach accomplishes the same deduplication objective as the rebate model at a fraction of the cost and administrative burden, while preserving the upfront 340B discount that has defined the program for over 30 years. Sun River Healths Direct Experience Demonstrates the Need for Neutral Infrastructure. Our organization has direct operational experience with the IRAs MFP deduplication process for the first ten negotiated drugs, and that experience has been deeply concerning. The rebate process flowing through the Beacon platform, the same vendor designated for the proposed 340B rebate model, has been cumbersome and unreliable. The portal has struggled to process claim volume. Manufacturers have used the platform to exert disproportionate leverage; for example, requiring in-house pharmacies to obtain rebates through 340B as opposed to permitting them to carve in through the retail IRA process. Rebate determinations rely on unpublished manufacturer algorithms, including vague recent 340B purchase and aggregate purchase history criteria that manufacturers have refused to define, leaving covered entities unable to validate or contest determinations. If the existing MFP deduplication process cannot function reliably for ten drugs, there is no credible basis for extending a manufacturer-controlled rebate platform to the broader 340B program. A neutral, federally governed clearinghouse would eliminate the inherent conflicts of interest, standardize data submission, and provide all stakeholders, including manufacturers, with trusted, accurate deduplication data within the same 45-day timeframe. The NCC Enjoys Broad Bipartisan Congressional Support. The clearinghouse concept has been endorsed in multiple congressional proposals, including the 340B PROTECT Act (which received over 100 bipartisan House cosponsors in the 117th Congress), the bipartisan SUSTAIN 340B Act released by the Senates Group of Six working group in early 2024, and the 340B ACCESS Act. NACHC has articulated a detailed NCC framework that Sun River Health fully endorses, including provisions for data minimization, strict confidentiality, prohibition of commercial claims data requirements, and purpose limitations that prevent NCC data from being used for utilization management, network restrictions, or other purposes beyond statutory deduplication. III. Essential Guardrails if HRSA Proceeds with Any Rebate-Based Model If, notwithstanding the above, HRSA elects to test a rebate-based approach, Sun River Health urges preventative measures to ensure that patients do not lose access to these life-saving drugs and community health centers as a whole can continue to utilize the program as Congress intended. We present these in order of operational priority. A. Enforceable Payment Timelines with Real Consequences Manufacturers must be required to pay rebates within 10 calendar days of both initial and corrected or contested determinations. Our experience with MFP deduplication demonstrates that manufacturers and their vendors routinely fail to meet even the existing 14-day standard for corrected claims. Without binding enforcement mechanisms, including financial penalties, public reporting of payment timeliness by manufacturer, and HRSA corrective action authority, a 10-day requirement will be aspirational rather than operational. Sun River Health operates with narrow margins and cash flows tightly calibrated to sustain payroll, pharmacy operations, and patient services across more than 50 sites. Every day of delayed rebate payment represents a direct threat to our ability to serve patients. B. Expedited, Independent Dispute Resolution The existing Administrative Dispute Resolution (ADR) process cannot serve as the mechanism for routine rebate disputes. Current ADR timelines can extend to two years from initial panel assignment through final determination. Given the volume of prescriptions that would flow through a rebate program, this process is wholly inadequate. HRSA must establish a separate, expedited dispute pathway with defined timelines, escalation protocols, and direct agency oversight. We further recommend that HRSA establish a stakeholder advisory panel with pharmacists who possess the subject-matter expertise to understand the complexities of pharmacy software, billing systems, accumulation logic, and data reconciliation. Without such expertise at the decision-making level, dispute resolution will be dominated by the party with superior information: invariably, the manufacturer. C. Presumption of Rebate Claim Validity Rebate claims should be presumed valid unless the manufacturer can demonstrate a specific statutory basis for denial with claim-level documentation. The prior proposed rebate framework allowed manufacturers to deny claims based on vague or ambiguous categories such as duplicate rebate or a catch-all other category, without providing the data or documentation necessary for a covered entity to understand or contest the denial. This construct incentivizes denials by imposing the burden of chasing every questioned rebate onto CHCs, organizations that lack the personnel and resources to litigate against multi-billion-dollar manufacturers on a claim-by-claim basis. The burden of proof must rest with the manufacturer, and denials must align with the statutory framework for preventing duplication of 340B discounts under the Medicaid Drug Rebate Program or MDPNP. D. Prohibition on Commercial Claims Data Requirements Sun River Health strongly opposes any requirement that CHCs submit commercial claims data to manufacturers as a condition of 340B pricing. There is no statutory basis for this requirement, and it serves no legitimate duplicate discount prevention purpose. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly declined to create one. Commercial claims data is extraordinarily valuable proprietary information. Requiring its transfer to manufacturers raises serious concerns under the federal Anti-Kickback Statute, as it effectively conditions discounted drug pricing on the provision of valuable data that manufacturers use to dispute commercial PBM rebate obligations. Those PBMs, in turn, discriminate against 340B claims and 340B providers to recoup lost revenue. Over 30 states have enacted legislation to prevent precisely this kind of manufacturer-payer gamesmanship. HRSA should not authorize through subregulatory guidance what Congress has declined to mandate and what states are actively working to prohibit. E. Scope Limitation: Retail Pharmacy Claims Only If HRSA proceeds with a rebate model, the pilot must be limited to retail pharmacy claims only. Clinic-administered drugs (CADs) should be explicitly excluded. CHCs bill CADs under the prospective payment system (PPS), where medication costs are bundled into encounter-based reimbursement rather than billed as discrete drug claims. Extending a rebate model to CADs would require entirely new data capture, reporting, and reconciliation workflows at estimated costs of $30,000 to $50,000 or more annually per CHC, without advancing any deduplication goal. Medicare Maximum Fair Prices do not apply to Part B drugs until 2028, and CHCs primarily bill under Medicare Part A. There is simply no near-term Medicare duplicate discount risk for CADs that would justify this burden. F. Full Manufacturer Transparency All manufacturer determination processes, eligibility calculations, accumulation logic, and denial criteria must be published in full detail for all covered entities. Under the current MFP deduplication framework, manufacturers, through their vendor Second Sight Solutions, employ pricing codes and validation methodologies that remain opaque to CHCs. For example, the P3 and P9 pricing codes reference recent 340B purchase and aggregate 340B purchase history respectively, but neither manufacturers nor Beacon has disclosed how these thresholds are defined or calculated. A system that conditions a covered entitys statutory discount on compliance with unpublished manufacturer standards is fundamentally incompatible with due process and program integrity. If we are successful in establishing a neutral claims clearinghouse as described above, full transparency would be a built-in feature of that infrastructure. G. Standardized National Platform If a rebate model proceeds, HRSA must require a single, standardized national platform with uniform data submission formats, timelines, denial categories, and reconciliation processes across all participating manufacturers. Under current manufacturer contract pharmacy restrictions, CHCs already navigate multiple proprietary platforms with varying requirements. Layering additional manufacturer-specific rebate systems on top of existing burdens would be operationally untenable. A neutral, standardized platform, ideally the NCC framework described above, would reduce this complexity while also eliminating the need for separate standardization mandates. IV. Financial and Operational Impact on Sun River Health Sun River Health is well positioned to articulate the concrete impact of a rebate model on FQHC operations. From 2019 through 2022, our organization generated $37.4 million in net 340B savings, driven primarily by HIV/AIDS therapies (54 percent), non-insulin hypoglycemic agents for Type 2 diabetes (13 percent), antivirals including hepatitis C drugs (10 percent), and antipsychotic medications (9 percent). These are precisely the therapeutic classes, chronic disease management drugs for vulnerable populations, that a rebate model would most severely disrupt. Cash Flow. Under a rebate model, Sun River would be required to purchase these drugs at full Wholesale Acquisition Cost (WAC) and await retrospective rebate payments. Even under the most optimistic assumptions, biweekly data submissions and 10-day manufacturer payment, the purchase-to-rebate cycle could extend 40 to 55 days for entity-owned pharmacies with physical inventory. For an organization that operates on narrow margins across more than 50 service sites, this represents a fundamental restructuring of our financial operations. Nearly half of CHCs nationally operate with fewer than 90 days of cash on hand, and one in four reports negative operating margins. Sliding Fee Scale and Uninsured Access. Sun River Health maintains a robust uninsured prescription program through Walgreens, where uninsured patients access medications at the 340B acquisition cost plus a nominal dispensing fee, with the patient always paying the lowest possible price. We also operate a sliding fee discount card program through ProAct for patients at participating contract pharmacies. In 2022, Sun River provided 116,259 visits to uninsured patients, nearly 18 percent of all visits. Under a rebate model, the wholesaler price file would reflect WAC rather than the 340B price, eliminating our ability to calculate and offer accurate patient discounts at the point of care. If we estimate a discount based on an expected rebate that is subsequently denied, we absorb the loss. If we charge the WAC-based price, our patients, many of whom manage chronic conditions like diabetes, HIV, and serious mental illness, lose access to affordable medications. This is not a theoretical concern; it is a direct operational impossibility under the rebate construct. V. The Rebate Model Threatens Patient Access to Life-Sustaining Therapies The drugs selected for the Medicare Drug Price Negotiation Program, and therefore included in the proposed rebate pilot, are used to manage chronic conditions that are disproportionately prevalent among CHC patient populations. Direct oral anticoagulants such as Xarelto and Eliquis are critical for patients with atrial fibrillation, deep vein thrombosis, and pulmonary embolism; discontinuation of these therapies is associated with statistically significant increases in the risk of stroke, heart attack, and death. SGLT2 inhibitors like Farxiga and Jardiance are frontline treatments for Type 2 diabetes, chronic kidney disease, and heart failure, conditions highly prevalent among Sun Rivers patient population. Research demonstrates that even a 30-day withdrawal of these medications increases annualized cardiovascular mortality risk. Beginning in 2027, the MDPNP will include behavioral health medications, including Vraylar (an atypical antipsychotic that is the mainstay of schizophrenia treatment) and Austedo (used for tardive dyskinesia). Antipsychotic medications account for nine percent of Sun Rivers 340B savings, a reflection of the serious mental health needs within our communities. Any disruption to access to these medications would exacerbate an already alarming national mental health crisis. Furthermore, insulin access is implicated by Executive Order 14273, which conditions future Section 330(e) funding on CHCs providing low-income patients with access to discounted insulin. There is currently no operational mechanism to provide these discounts under a retrospective rebate model. VI. Legislative and Statutory Considerations Sun River Health concurs with the statutory analysis presented by NACHC regarding the legal limitations of the proposed rebate model. We note in particular that the 340B statute assigns the obligation to prevent Medicaid duplicate discounts to covered entities, not to manufacturers or HRSA. The IRA requires manufacturers to provide the lower of MFP or the 340B ceiling price, yet a rebate model permits manufacturers to deny 340B rebates whenever MFP applies, even when the 340B ceiling price is lower. HRSAs alleged rebate authority under 42 U.S.C. 256b(a)(1) cannot be extended to MFP deduplication, which falls outside the bounds of the 340B statutes Medicaid-specific duplicate discount provisions. In addition to H.R. 7391 referenced above, we note broad congressional interest in protecting covered entities through legislation including the 340B PROTECT Act, the SUSTAIN 340B Act, and the 340B ACCESS Act. Each of these proposals reflects a recognition that duplicate discount concerns should be addressed through proper legislative channels, with operational frameworks designed for the realities of safety-net providers, rather than through subregulatory administrative action that shifts financial risk onto the organizations least able to absorb it. VII. Conclusion Sun River Health appreciates HRSAs commitment to a methodical and deliberate approach in evaluating this pilot. We urge the agency to adopt the following course of action: 1. Exempt FQHCs from the 340B Rebate Model Pilot Program. CHCs exemplify the original intent of the 340B program, represent a negligible share of program purchases, and would bear disproportionate harm under a rebate model. 2. If exemption is not granted, replace the rebate model with a Neutral Claims Clearinghouse that preserves the upfront 340B discount while accomplishing the same deduplication objectives at a fraction of the cost and administrative burden. 3. If any rebate-based model proceeds, implement the enforceable guardrails described herein: binding payment timelines with real penalties, expedited independent dispute resolution, presumption of claim validity, prohibition on commercial data requirements, retail-only scope, full manufacturer transparency, and a standardized national platform. The 340B program was created to help safety-net providers stretch scarce federal resources as far as possible. For Sun River Health, that mandate translates into 250,000 patients receiving comprehensive care, 116,000 annual visits for uninsured individuals, and community-based programs spanning medical, dental, behavioral health, and enabling services across southeastern New York. A rebate model that forces us to finance manufacturer rebate obligations with patient-care dollars does not advance program integrity. It undermines the very mission the program was designed to serve. Ernest S. Klepeis Chief of Government Affairs and Advocacy Sun River Health Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MS 20857 Submitted electronically through federalregister.gov/ RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) On behalf of Sun River Health, the largest Federally Qualified Health Center (FQHC) in New York State, I respectfully submit the following comments in response to HRSAs Request for Information on the 340B Rebate Model Pilot Program, published in the Federal Register on February 17, 2026. Sun River Health serves more than 250,000 predominantly low-income patients across over 50 communities in a 16-county region encompassing New Yorks Hudson Valley, New York City, and Long Island. For nearly 50 years, we have provided comprehensive primary, preventive, behavioral, and oral health care to medically underserved populations, and the 340B Drug Pricing Program has been foundational to that mission. Sun River Health has engaged deeply and continuously on this issue. We submitted detailed comments to HRSAs prior 340B Rebate Model Pilot Program Notice in 2025 (Docket No. HRSA-2025-14619), and our organization was one of only two FQHCs subjected to in-depth review in the U.S. Senate HELP Committees 2025 Majority Staff Report on the 340B Program. That review validated Sun Rivers stewardship, finding that our organization leverages 340B savings to provide significant discounts on 340B drugs and uses those resources as intended: to expand care and lower costs for patients. We write now with the benefit of that experience, the guidance of the National Association of Community Health Centers (NACHC) and Advocates for Community Health (ACH), and our own direct operational knowledge of the challenges a rebate model would impose. We also draw upon our organizations firsthand experience with the Inflation Reduction Act (IRA) Maximum Fair Price (MFP) deduplication process, which has proven operationally deficient and has exposed critical weaknesses in manufacturer-controlled rebate platforms. I. Primary Request: Exempt Community Health Centers from the 340B Rebate Model Pilot Sun River Healths primary position, consistent with those of NACHC and ACH, is that community health centers should be fully exempt from any 340B Rebate Model Pilot Program. The 340B statutes own legislative history expressly contemplated that different covered entity types may require different pricing mechanisms. The House Report accompanying the original legislation stated: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. H.R. Rep. No. 102-384(II), at 12 (1992). Congress recognized, at the very inception of the 340B program, that one pricing mechanism would not fit all covered entity types. The statutes authors directed the Secretary to select the approach that is most effective and most efficient for each type of entity. CHCs are direct providers of care operating on narrow margins with complex pharmacy operations and sliding fee obligations. A rebate model that may be manageable for other covered entities with different operational structures imposes fundamentally different burdens on CHCs, and the legislative history makes clear that the Secretary is expected to account for those differences. This position is further supported by active bipartisan legislation in Congress. The Community Health Center Drug Pricing Protection Act (H.R. 7391), introduced on February 5, 2026, by Representatives Jack Bergman (R-MI) and Jake Auchincloss (D-MA), would prohibit manufacturers from charging FQHCs and CHCs more than the 340B ceiling price at the time of purchase, directly exempting health centers from any rebate-based pricing model. CHC purchases under the 340B program represent just 5.8 percent of overall covered entity purchases. HRSAs own audit data consistently demonstrates that FQHCs are among the lowest-risk participants for diversion or fund misuse. Sun River Health reinvests every dollar of 340B savings into its HRSA-approved scope of project, as required by Section 330(e)(5)(D) of the Public Health Service Act and 45 CFR 75.307. In 2017, years prior to the original inquiry by the Senate HELP Committee, Sun River Healths Board of Directors adopted a formal resolution directing that all 340B savings be utilized to expand services for underserved populations. We undergo annual external audits with SpendMed using HRSA audit standards, participate in Operational Site Visits, and report comprehensively through the Uniform Data System. II. If No Exemption: Replace the Rebate Model with a Neutral Claims Clearinghouse Should HRSA decline to exempt CHCs, we strongly urge the agency to abandon the rebate model entirely in favor of a federally operated or federally contracted Neutral Claims Clearinghouse (NCC). We fully agree with NACHCs analysis that a clearinghouse would provide a stronger regulatory framework for ensuring that scarce federal dollars reach the patients they are intended to serve, while still accomplishing the deduplication goals HRSA has identified. Under an NCC, covered entities would submit standardized claims data to a secure federal platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D beneficiary. The platform would transmit deduplication data to the Medicare Transaction Facilitator. This approach accomplishes the same deduplication objective as the rebate model at a fraction of the cost and administrative burden, while preserving the upfront 340B discount that has defined the program for over 30 years. Sun River Healths Direct Experience Demonstrates the Need for Neutral Infrastructure. Our organization has direct operational experience with the IRAs MFP deduplication process for the first ten negotiated drugs, and that experience has been deeply concerning. The rebate process flowing through the Beacon platform, the same vendor designated for the proposed 340B rebate model, has been cumbersome and unreliable. The portal has struggled to process claim volume. Manufacturers have used the platform to exert disproportionate leverage; for example, requiring in-house pharmacies to obtain rebates through 340B as opposed to permitting them to carve in through the retail IRA process. Rebate determinations rely on unpublished manufacturer algorithms, including vague recent 340B purchase and aggregate purchase history criteria that manufacturers have refused to define, leaving covered entities unable to validate or contest determinations. If the existing MFP deduplication process cannot function reliably for ten drugs, there is no credible basis for extending a manufacturer-controlled rebate platform to the broader 340B program. A neutral, federally governed clearinghouse would eliminate the inherent conflicts of interest, standardize data submission, and provide all stakeholders, including manufacturers, with trusted, accurate deduplication data within the same 45-day timeframe. The NCC Enjoys Broad Bipartisan Congressional Support. The clearinghouse concept has been endorsed in multiple congressional proposals, including the 340B PROTECT Act (which received over 100 bipartisan House cosponsors in the 117th Congress), the bipartisan SUSTAIN 340B Act released by the Senates Group of Six working group in early 2024, and the 340B ACCESS Act. NACHC has articulated a detailed NCC framework that Sun River Health fully endorses, including provisions for data minimization, strict confidentiality, prohibition of commercial claims data requirements, and purpose limitations that prevent NCC data from being used for utilization management, network restrictions, or other purposes beyond statutory deduplication. III. Essential Guardrails if HRSA Proceeds with Any Rebate-Based Model If, notwithstanding the above, HRSA elects to test a rebate-based approach, Sun River Health urges preventative measures to ensure that patients do not lose access to these life-saving drugs and community health centers as a whole can continue to utilize the program as Congress intended. We present these in order of operational priority. A. Enforceable Payment Timelines with Real Consequences Manufacturers must be required to pay rebates within 10 calendar days of both initial and corrected or contested determinations. Our experience with MFP deduplication demonstrates that manufacturers and their vendors routinely fail to meet even the existing 14-day standard for corrected claims. Without binding enforcement mechanisms, including financial penalties, public reporting of payment timeliness by manufacturer, and HRSA corrective action authority, a 10-day requirement will be aspirational rather than operational. Sun River Health operates with narrow margins and cash flows tightly calibrated to sustain payroll, pharmacy operations, and patient services across more than 50 sites. Every day of delayed rebate payment represents a direct threat to our ability to serve patients. B. Expedited, Independent Dispute Resolution The existing Administrative Dispute Resolution (ADR) process cannot serve as the mechanism for routine rebate disputes. Current ADR timelines can extend to two years from initial panel assignment through final determination. Given the volume of prescriptions that would flow through a rebate program, this process is wholly inadequate. HRSA must establish a separate, expedited dispute pathway with defined timelines, escalation protocols, and direct agency oversight. We further recommend that HRSA establish a stakeholder advisory panel with pharmacists who possess the subject-matter expertise to understand the complexities of pharmacy software, billing systems, accumulation logic, and data reconciliation. Without such expertise at the decision-making level, dispute resolution will be dominated by the party with superior information: invariably, the manufacturer. C. Presumption of Rebate Claim Validity Rebate claims should be presumed valid unless the manufacturer can demonstrate a specific statutory basis for denial with claim-level documentation. The prior proposed rebate framework allowed manufacturers to deny claims based on vague or ambiguous categories such as duplicate rebate or a catch-all other category, without providing the data or documentation necessary for a covered entity to understand or contest the denial. This construct incentivizes denials by imposing the burden of chasing every questioned rebate onto CHCs, organizations that lack the personnel and resources to litigate against multi-billion-dollar manufacturers on a claim-by-claim basis. The burden of proof must rest with the manufacturer, and denials must align with the statutory framework for preventing duplication of 340B discounts under the Medicaid Drug Rebate Program or MDPNP. D. Prohibition on Commercial Claims Data Requirements Sun River Health strongly opposes any requirement that CHCs submit commercial claims data to manufacturers as a condition of 340B pricing. There is no statutory basis for this requirement, and it serves no legitimate duplicate discount prevention purpose. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly declined to create one. Commercial claims data is extraordinarily valuable proprietary information. Requiring its transfer to manufacturers raises serious concerns under the federal Anti-Kickback Statute, as it effectively conditions discounted drug pricing on the provision of valuable data that manufacturers use to dispute commercial PBM rebate obligations. Those PBMs, in turn, discriminate against 340B claims and 340B providers to recoup lost revenue. Over 30 states have enacted legislation to prevent precisely this kind of manufacturer-payer gamesmanship. HRSA should not authorize through subregulatory guidance what Congress has declined to mandate and what states are actively working to prohibit. E. Scope Limitation: Retail Pharmacy Claims Only If HRSA proceeds with a rebate model, the pilot must be limited to retail pharmacy claims only. Clinic-administered drugs (CADs) should be explicitly excluded. CHCs bill CADs under the prospective payment system (PPS), where medication costs are bundled into encounter-based reimbursement rather than billed as discrete drug claims. Extending a rebate model to CADs would require entirely new data capture, reporting, and reconciliation workflows at estimated costs of $30,000 to $50,000 or more annually per CHC, without advancing any deduplication goal. Medicare Maximum Fair Prices do not apply to Part B drugs until 2028, and CHCs primarily bill under Medicare Part A. There is simply no near-term Medicare duplicate discount risk for CADs that would justify this burden. F. Full Manufacturer Transparency All manufacturer determination processes, eligibility calculations, accumulation logic, and denial criteria must be published in full detail for all covered entities. Under the current MFP deduplication framework, manufacturers, through their vendor Second Sight Solutions, employ pricing codes and validation methodologies that remain opaque to CHCs. For example, the P3 and P9 pricing codes reference recent 340B purchase and aggregate 340B purchase history respectively, but neither manufacturers nor Beacon has disclosed how these thresholds are defined or calculated. A system that conditions a covered entitys statutory discount on compliance with unpublished manufacturer standards is fundamentally incompatible with due process and program integrity. If we are successful in establishing a neutral claims clearinghouse as described above, full transparency would be a built-in feature of that infrastructure. G. Standardized National Platform If a rebate model proceeds, HRSA must require a single, standardized national platform with uniform data submission formats, timelines, denial categories, and reconciliation processes across all participating manufacturers. Under current manufacturer contract pharmacy restrictions, CHCs already navigate multiple proprietary platforms with varying requirements. Layering additional manufacturer-specific rebate systems on top of existing burdens would be operationally untenable. A neutral, standardized platform, ideally the NCC framework described above, would reduce this complexity while also eliminating the need for separate standardization mandates. IV. Financial and Operational Impact on Sun River Health Sun River Health is well positioned to articulate the concrete impact of a rebate model on FQHC operations. From 2019 through 2022, our organization generated $37.4 million in net 340B savings, driven primarily by HIV/AIDS therapies (54 percent), non-insulin hypoglycemic agents for Type 2 diabetes (13 percent), antivirals including hepatitis C drugs (10 percent), and antipsychotic medications (9 percent). These are precisely the therapeutic classes, chronic disease management drugs for vulnerable populations, that a rebate model would most severely disrupt. Cash Flow. Under a rebate model, Sun River would be required to purchase these drugs at full Wholesale Acquisition Cost (WAC) and await retrospective rebate payments. Even under the most optimistic assumptions, biweekly data submissions and 10-day manufacturer payment, the purchase-to-rebate cycle could extend 40 to 55 days for entity-owned pharmacies with physical inventory. For an organization that operates on narrow margins across more than 50 service sites, this represents a fundamental restructuring of our financial operations. Nearly half of CHCs nationally operate with fewer than 90 days of cash on hand, and one in four reports negative operating margins. Sliding Fee Scale and Uninsured Access. Sun River Health maintains a robust uninsured prescription program through Walgreens, where uninsured patients access medications at the 340B acquisition cost plus a nominal dispensing fee, with the patient always paying the lowest possible price. We also operate a sliding fee discount card program through ProAct for patients at participating contract pharmacies. In 2022, Sun River provided 116,259 visits to uninsured patients, nearly 18 percent of all visits. Under a rebate model, the wholesaler price file would reflect WAC rather than the 340B price, eliminating our ability to calculate and offer accurate patient discounts at the point of care. If we estimate a discount based on an expected rebate that is subsequently denied, we absorb the loss. If we charge the WAC-based price, our patients, many of whom manage chronic conditions like diabetes, HIV, and serious mental illness, lose access to affordable medications. This is not a theoretical concern; it is a direct operational impossibility under the rebate construct. V. The Rebate Model Threatens Patient Access to Life-Sustaining Therapies The drugs selected for the Medicare Drug Price Negotiation Program, and therefore included in the proposed rebate pilot, are used to manage chronic conditions that are disproportionately prevalent among CHC patient populations. Direct oral anticoagulants such as Xarelto and Eliquis are critical for patients with atrial fibrillation, deep vein thrombosis, and pulmonary embolism; discontinuation of these therapies is associated with statistically significant increases in the risk of stroke, heart attack, and death. SGLT2 inhibitors like Farxiga and Jardiance are frontline treatments for Type 2 diabetes, chronic kidney disease, and heart failure, conditions highly prevalent among Sun Rivers patient population. Research demonstrates that even a 30-day withdrawal of these medications increases annualized cardiovascular mortality risk. Beginning in 2027, the MDPNP will include behavioral health medications, including Vraylar (an atypical antipsychotic that is the mainstay of schizophrenia treatment) and Austedo (used for tardive dyskinesia). Antipsychotic medications account for nine percent of Sun Rivers 340B savings, a reflection of the serious mental health needs within our communities. Any disruption to access to these medications would exacerbate an already alarming national mental health crisis. Furthermore, insulin access is implicated by Executive Order 14273, which conditions future Section 330(e) funding on CHCs providing low-income patients with access to discounted insulin. There is currently no operational mechanism to provide these discounts under a retrospective rebate model. VI. Legislative and Statutory Considerations Sun River Health concurs with the statutory analysis presented by NACHC regarding the legal limitations of the proposed rebate model. We note in particular that the 340B statute assigns the obligation to prevent Medicaid duplicate discounts to covered entities, not to manufacturers or HRSA. The IRA requires manufacturers to provide the lower of MFP or the 340B ceiling price, yet a rebate model permits manufacturers to deny 340B rebates whenever MFP applies, even when the 340B ceiling price is lower. HRSAs alleged rebate authority under 42 U.S.C. 256b(a)(1) cannot be extended to MFP deduplication, which falls outside the bounds of the 340B statutes Medicaid-specific duplicate discount provisions. In addition to H.R. 7391 referenced above, we note broad congressional interest in protecting covered entities through legislation including the 340B PROTECT Act, the SUSTAIN 340B Act, and the 340B ACCESS Act. Each of these proposals reflects a recognition that duplicate discount concerns should be addressed through proper legislative channels, with operational frameworks designed for the realities of safety-net providers, rather than through subregulatory administrative action that shifts financial risk onto the organizations least able to absorb it. VII. Conclusion Sun River Health appreciates HRSAs commitment to a methodical and deliberate approach in evaluating this pilot. We urge the agency to adopt the following course of action: 1. Exempt FQHCs from the 340B Rebate Model Pilot Program. CHCs exemplify the original intent of the 340B program, represent a negligible share of program purchases, and would bear disproportionate harm under a rebate model. 2. If exemption is not granted, replace the rebate model with a Neutral Claims Clearinghouse that preserves the upfront 340B discount while accomplishing the same deduplication objectives at a fraction of the cost and administrative burden. 3. If any rebate-based model proceeds, implement the enforceable guardrails described herein: binding payment timelines with real penalties, expedited independent dispute resolution, presumption of claim validity, prohibition on commercial data requirements, retail-only scope, full manufacturer transparency, and a standardized national platform. The 340B program was created to help safety-net providers stretch scarce federal resources as far as possible. For Sun River Health, that mandate translates into 250,000 patients receiving comprehensive care, 116,000 annual visits for uninsured individuals, and community-based programs spanning medical, dental, behavioral health, and enabling services across southeastern New York. A rebate model that forces us to finance manufacturer rebate obligations with patient-care dollars does not advance program integrity. It undermines the very mission the program was designed to serve. Ernest S. Klepeis Chief of Government Affairs and Advocacy Sun River Health
HRSA-2026-0001-1629Community Care Cooperative2026-04-17T04:00Z102,700 chars
See attached file(s) SEVENTY FIVE FEDERAL STREET, 7th FLOOR | BOSTON, MA 02110 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 April 17, 2025 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Community Care Cooperative (C3) is a non-profit company that is founded, owned, and operated by Federally Qualified Health Centers (FQHCs or Community Health Centers). We are an Accountable Care Organization (ACO) that participates in Medicare, Medicaid, and Commercial value-based payment contracts with 40+ FQHCs serving more than 230,000 lives. Our mission is to leverage the collective strengths of FQHCs to improve the health and wellness of the people we serve. Our subsidiary organization, Community Pharmacy Cooperative (CPC), operates on-site pharmacies, provides 340B revenue and compliance support, and provides clinical services to support Community Health Centers. We appreciate the opportunity to collaborate on the proposed 340B Rebate Model Program, as it has the potential to fundamentally shift a program with a 30-year track record of providing much- needed financial support to FQHCs. The savings generated from the 340B program funds the continuation of low-revenue but high-value preventive health services which help lower costs associated with preventable downstream utilization. Community Health Centers operate on tight margins with limited room for delays in revenue. Our comments are in the spirit of ensuring the pilot program does not cause unintended consequences for health centers regarding three core areas: 1) detrimental financial impact 2) reporting requirements and data sharing and 3) rebate delivery and denials. Financial Losses: The pharmacies we support anticipate an average loss of $80,000 from entity-owned pharmacy operations and 20% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: C3 anticipates significant increases in operational costs. CHC pharmacies will incur $30,000 to $60,000 in additional costs annually to manage the pilot. Cash flow impacts: Our pharmacies will experience disruptions in cash flow related to the rebate model carry a meaningful financial burden to the pharmacies and the FQHCs they serve. 2 Pharmacies would be required to pay 25-65x the cost of 340B while they wait for the equivalent in rebates an average of $4M/yr. Several of our CHCs have as little as 2 weeks cash-on-hand would need to take out a line of credit to meet their stocking needs. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 230,000 patients who rely on C3s pharmacies. Current administration costs are already high for the 340B program, a rebate model would require more resources that CHCs do not have. An average CHCs payer mix is over 50% Medicaid. 340B revenue supports patient care for these patients and expands services such as mobile clinics, behavioral health, and provides access to otherwise healthcare deserts. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing 3 the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated average of $50,000 would be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC Pharmacies, which serve more than 200,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1.1M annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 4 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Reporting will need to be developed potentially pausing other projects that focus on patient care. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Each CHC will pay an estimated $10,000 one-time fee for their software to develop the reporting. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be required to spend 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. CHC partners with CVS, Walgreens, Accredo, Walmart, independents and other pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We are aware that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In the areas we serve rural areas in Washington, Northern California, Massachusetts, and Oklahoma, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,1 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.2 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. This would potentially include programs that reduce the costs of drugs for patients at the point of sale. 1 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 2 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 5 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.3 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.4 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. The CHCs we support offer sliding scale discounts for low-income patients at their pharmacies and many of their contract pharmacies. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).5 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. C3 pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 3 HRSA FAQ 4 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 5https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 6 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Specifically, some of the CHCs supported by C3 operate with less than 11 days of cash on hand. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price,C3 worked with 16 CHCs they support to calculate the impact of rebates for the MFP drug lists for 2026 and 2027. This data analysis was conducted utilizing 2025 volume and 2026 Q1 340B and WAC pricing. This evaluation for the 16 CHCs 340B programs evaluates: : Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the Medicare Drug Negotiation Program (MDPNP) selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 7 Based on our 16 CHCs 340B program data, we estimate it would cost an additional $49M/yr to purchase these 22 drugs under the proposed rebate model. Currently, our organization spends $21M/yr to purchase these same drugs at the 340B ceiling price. This represents a 235% in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The CHCs we partner with anticipate needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Operating Hours: In some examples CHCs anticipate needing to reduce clinic hours by 8 hours per week, specifically impacting care provided on Saturdays, the only time working- class patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator CHCs are forced to hire, they lose the ability to fund other services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have shared that paying for medications upfront at WAC prices will require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. C3 asserts that taking out a loan or an extended line of credit to fund drug procurement is a high- risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 8 submitted. At present, many CHCs must pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Of the 16 CHC 340B programs we analyzed, we estimated its 2027 Annual Rebate Opportunity Cost to be approximately $975K. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. C3 estimates that purchasing the 22 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by 4.1M. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, the CHCs we support would be required to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $3.9M annually funds that are currently dedicated to patient care. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In regions where patients have no choice but to rely on CHCs, the risk of credit limits being reached or reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our patients across the country depend on. a. Financial Impact of Rebate Denials and Delays C3 urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to function as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.6 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 22 selected drugs, even a conservative 3% denial rate would result in a net annual loss of $1.5M for the 16 CHCs in our analysis. This is a sum CHCs cannot absorb, as it represents 6 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Commented [SW1]: This is in the weeds but the MFP drugs have little to know sub-ceiling pricing and these are voluntary from the manufacturers. So they can do sub ceiling pricing in rebates but they dont today and dont expect them to in the future. Commented [SW2]: Assuming 8% on the 49M in the rebate program 9 a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the 10 statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.7 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and lead many covered entities forgoing the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.8 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protection, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,9 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that 7 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 8 340B House Report Legislative History. H.R. REP. 102-384(II). 9 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 11 OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. 12 D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.10 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes11 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. 10 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 11 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 13 P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. IV. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.12 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. V. Consider extending the timeline for claim submissions from 45 days to 90 days CHCs have worked for years to comply with the 45-day claims submission window put in place with 340B ESP requirements, but the complexity of the 340B program often makes this timeframe too restrictive. As a result, CHCs frequently lose access to 340B pricing at contract pharmacies simply because they cannot submit all claims in time. Similar limitations for a rebate model would result in lost rebates. CHCs and their Third-Party Administrators (TPAs) need sufficient time to ensure that claims meet all requirements to be eligible for 340B. While many aspects of 340B operations are automated, key steps still require manual interventionsuch as managing provider turnover, updating payer crosswalks, and conducting pricing reviewsall of which can delay submission. Operational disruptions are also unavoidable. Events such as new EHR implementations, wholesaler interruptions, and data integrity issues can interrupt workflows and require additional time to resolve. The 45-day requirement is also inconsistent with broader industry standards. Payer billing timelines typically range from 90 days to one year, and validating 340B eligibility often requires more time similar to standard billing processes. In addition, the current deadline creates operational constraints. It effectively discourages CHCs from switching TPAseven when performance is lackingbecause system implementations and transitions frequently exceed 45 days, leading to missed claim volume. Certain claims, such 12 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 14 as referrals or those with mismatched or incomplete data, also take longer to qualify, further complicating compliance within the existing window. C3 and the CHCs they support expect identical limitations for a rebate model that would result in lost rebates. Something CHCs simply cannot afford. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 200% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing the best internal practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts 15 A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,13 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.14 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.15 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish substantially identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.16 The negative implications of a 340B rebate model 13 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 14 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 15 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 16 H.R. REP. 102-384(II) 16 are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra- statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).17 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.18 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain 17 42 U.S.C. 256b(a)(1) 18 Id. 17 to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).19 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.20 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.21 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.22 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.23 However, the 340B statute 19 42 U.S.C. 256b(a)(1) 20 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 21 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 22 42 U.S.C. 256b(a)(5)(C). 23 42 U.S.C. 256b(a)(5)(C). 18 grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.24 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, for our CHCs in California, Oklahoma, and Washington aCHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.25 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.26 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid 24 See 42 U.S.C 256b(a)(5)(A). 25 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 26 C.F.R. 447.518(a). 19 MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 20 A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.27 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.28 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.29 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.30 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts 27 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 28 42 C.F.R. 447.502 29 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 30 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 21 under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.31 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under 31 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 22 the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.32 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.33 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.34 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory 32 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 33 42 U.S.C. 256b(a)(5)(A)(emphasis added). 34 32 C.F.R. 199.21(q)(2)(iii)(E) 23 structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.35 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.36 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.37 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug 35 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 36 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 37 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 24 alternatives.38 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.39 Drug industry data vendors have reported that such data is highly valuable to manufacturers.40 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.41 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.42 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.43 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general 38 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 39 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 40 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 41 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 42 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 43 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 25 rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.44 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.45 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.46 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.47 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. 44 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 45 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 46 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 47 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 26 Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.48 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.49And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.50 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC 48 42 U.S.C. 256b(a)(5)(B) 49 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 50 H.R. REP. 102-384, 16 27 Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. 28 o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, 29 as originally proposed by Johnson & Johnson in its initial rebate model51 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion C3 strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with 51 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 30 rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. We believe that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. We appreciate the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Shawn Wood Director of 340B Programs and Services at swood@c3cpc.org Sincerely, Christina Severin President & CEO, Community Care Cooperative
HRSA-2026-0001-1630Anonymous Anonymous2026-04-17T04:00Z830 chars
I am not in favor of the rebate model. The rebate program is obviously dumb. It contributes to pharmaceutical purchasing complexity. This pharmaceutical manufacturer's dream comes at the expense of not-for-profit entities who are actively taking care of patients. This is taking time away from caregivers providing care, administrators improving facilities, and increasing costs to 340B organizations. This increased cost must then be passed along to consumers. De-duplication of rebates can occur via other mechanisms that do not put 340B entities in a constant state of audit via manufacturers with no timely recourse when rebates are denied. If 340B reform is desired, it should occur via legislation, not this non-sensical program. Any open-minded individual can see this program is ridiculous. An Anonymous Pharmacy Leader
HRSA-2026-0001-1631Avera Health2026-04-17T04:00Z51,087 chars
Avera Health Comments on 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042 April 17, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels and Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. Avera McKennan (DSH430016), Avera Merrill Pioneer Hospital (CAH161321), Freeman Regional Health Services (CAH431313), Sioux Center Health (CAH161346), Avera Holy Family Health (CAH161351), Avera Granite Falls (CAH241343), Avera Tyler (CAH241348), Avera Marshall Regional Medical Center (CAH241359), Pipestone County Medical Center (CAH241374), Avera St. Anthonys Hospital (CAH281329), Sacred Heart Health Services dba Avera Creighton Hospital (CAH281331), Avera Gettysburg dba Avera Missouri River Health Center (CAH431302), Platte Community Memorial Hospital, Inc. (CAH431306), Avera McKennan dba Avera Flandreau Hospital (CAH431310), Wagner Community Memorial Hospital (CAH431315), Floyd Valley Hospital (CAH161368), Hegg Memorial Hospital, Inc. (CAH161336), Milbank Area Hospital Avera (CAH431326), Avera St. Benedict Health Center (CAH431330), Avera McKennan dba Avera Dells Area Hospital (CAH431331), Avera Hand County Memorial Hospital (CAH431337), Avera Gregory Healthcare Center (CAH431338), Avera St. Marys (DSH430015), Marshall County Memorial Hospital (CAH431312), De Smet Memorial Hospital (CAH431332), Avera Queen of Peace (CAH431340), St. Michaels Hospital (CAH431327), Hendricks Community Hospital Association and Retirement Home (CAH241339), Eureka Community Health Services (CAH431308) and Osceola Community Hospital (CAH161345), Redfield Community Memorial Page 2 Hospital (CAH431316), Weskota Memorial Hospital (CAH431324) (Avera Health) respectfully submits these comments. Avera Health facilities, located in the upper Midwest, are primarily rural and made up of nonprofit, community and academic facilities located in South Dakota, Minnesota, Iowa and Nebraska. We participate in the 340B program as Critical Access and Disproportionate Share Hospitals. We serve a population of 1 million spread over 72,000 square miles and 86 counties where our 1,200 employed providers offer 21 medical specialties in more than 100 communities. When the Benedictine and Presentation Sisters came to Dakota Territory, they were asked to start rural hospitals to support diphtheria and influenza epidemics of that time. Rural health has always been part of the Avera mission and ministry. The population of our service area has 13.8 people living within each square mile and we want our patients to experience quality care close to home. As a health care ministry, Avera provides care to all who come to us, regardless of their ability to pay, through our charity care and financial assistance programs. At a high level, Avera Healths 340B Program participation enables our 32 hospitals to commit $168.3 million dollars per year to the community safety net populations we serve through; assistance with patient medication costs, rural clinics in 21 communities in our service area, rural outreach in 21 specialties including oncology, OB, urology, nephrology and surgery in 65 clinics, rural care support through telehealth services, free clinic services in Sioux Falls with more than 6000 annual clinic visits, emergency air transportation across our footprint, emergency medical services training, mobile mammogram clinics, transportation to appointments, translation services, suicide prevention services, the Farm and Rural stress Hotline, the Link, a behavioral health community triage center and multiple other services that meet unmet health care needs in the communities we serve. Avera facilities operate in-house integrated Home Infusion, Long-Term Care and Specialty pharmacy programs that support patients receiving high-cost, clinically complex therapies, and we coordinate closely with prescribers, infusion services, and care teams to help patients start therapy on time and stay adherent. Made up of several 340B-participating hospitals, Avera Health is a core component of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. By increasing costs and facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, we wish to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. Page 3 Our Bottom Line HRSA should not replace point-of-sale access to 340B pricing with a post-purchase rebate model. For decades, 340B has functioned through upfront pricing at or below the ceiling price at the time of purchase. A shift to a rebate model would change when and how the ceiling price is realized and would introduce predictable friction into medication access by making the 340B price contingent on post-dispense claims submission, manufacturer processing, and the possibility of denials and disputes. Even if rebates are ultimately paid, a rebate structure shifts operational and financial risk onto covered entities. For organizations like ours that support vulnerable patients and deliver time- sensitive therapies, that risk shows up as avoidable uncertainty now when clinicians and patients need predictability. An update to the 340B program that would positively impact the life of our rural patients would be to allow Rural Referral Centers (RRCs), Sole Community Hospitals (SCHs), Critical Access Hospitals (CAHs), and Federally Qualified Health Centers (FQHCs), freestanding cancer hospitals, and childrens hospitals to purchase orphan drugs at the 340B price, aligning all entities under a simpler, more uniform framework and allowing those facilities to get the benefit of 340B pricing on drugs with orphan designation. Additionally, CMS should reevaluate the Orphan Drug Act (1983). The Act predates the 340B Program by 11 years and has expanded far beyond its original purpose of supporting development for low-prevalence conditions. Research shows that 20% of orphan-designated drugs subsequently receive common-disease indications, often becoming top-selling global blockbusters (known as partial-orphan drugs). [flcube.com] Examples such as Keytruda, which generated ~$15B in H1 2025 and is now the worlds top-selling drug, demonstrate that many orphan therapies are heavily used in mainstream conditions like NSCLCnot rare diseases. [accessdata.fda.gov] What drives this lack of transparency is the commercial incentive structure that includes; orphan exclusivity (7 years), waived FDA fees, tax credits, and indication-specific designation. Manufacturers frequently launch in small rare-disease oncology slices but rapidly expand into high-prevalence chronic diseases (NSCLC, RA, IBD), where long-term treatment durations and premium pricing generate substantial profitwell beyond what orphan incentives were intended to support. This letter proceeds in two parts. First, we ask several questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. While we recognize that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to review our letterand each submissionin its entirety. These comments are specific to Averas position, and while they may be similar to those submitted by other entities, such similarities reflect the broad consensus among stakeholders regarding the questions and concerns raised by the model. Page 4 FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Avera Health facilities submit the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH AVERA HEALTH FACILITYS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Avera Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval,5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). Page 5 elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Avera Health facilities when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR AVERA HEALTH FACILITIES TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Avera Health facilities by greatly limiting our ability to serve patients through our contract pharmacies, seriously undermining an important source of dollars that supports our nonprofit mission. In Iowa, where the state has no contract pharmacy protection laws, our contract-pharmacy-related savings have decreased by 15%, directly limiting the extent to which we can support our communities. Even in states that do have contract pharmacy protection laws (Minnesota, Nebraska and South Dakota) 16 to 27 of the 40 manufacturers with restrictions have not completely removed their restrictions, or data requirements. They are violating our state laws and yet somehow, their restrictions arent yet enough for the manufacturers. Regarding good-faith inquiries: contractors such as Kalderos and IQVIA have sent us claims asking if these were duplicate discounts. At times the claims provided to us have been for other unrelated facilities. How do we trust their data validation methods when they cannot be trusted to send our facilities their own data? Current experience with manufacturer-controlled data platforms strongly suggests that shifting to a rebate structure would decrease transparency and further consolidate control in the hands of manufacturers. The first year of the MDPNP has shown that manufacturers simply cannot be trusted to adjudicate rebate requests. Existing examplesincluding 340B ESP and the Beacon MFP platformclearly demonstrate that manufacturers have shown little genuine interest in transparency or good-faith collaboration. In both systems, manufacturers have imposed their own rules, requirements, and data expectations with no reciprocal visibility into how they use the data, how determinations are made, or how provider-submitted information affects pricing decisions. The transparency flows in only one direction, and covered entities receive minimal information in return for substantial reporting burdens. Currently the manufacturer-created solutions such as Beacon reveals claim identification error rates as high as 40%, an unacceptable level of inaccuracy for a compliance-driven program. For drugs dispensed through our owned pharmacies, manufacturers AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Immunex Corporation, Janssen, Merck and Novo Nordisk have denied several MDPNP refund requests because they assert without clear evidence the drug 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). Page 6 was replenished with 340B inventory. This means we have paid the WAC price for a drug and got neither the MDPNP refund nor the 340B price for the dispensing, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, requires that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. Despite repeated attempts to engage constructively, the response from platform operatorsmost commonly BRGhas been that they are merely enforcing the rules dictated by manufacturers. This dynamic underscores that the true point of control rests with manufacturers, and that current systems offer no mechanism for balanced oversight or shared accountability. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When manufacturers mistakenly pay an MDPNP refund for a 340B eligible drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Given this history, a rebate modelwhich would require even more data submission to manufacturer- controlled processeswould likely exacerbate existing transparency problems rather than resolve them. It would expand manufacturers authority to dictate the terms of participation, control data flows, and adjudicate disputes, while giving covered entities little insight and even less recourse. In this context, a rebate model cannot reasonably be expected to increase transparency across stakeholders. Instead, it would reinforce the current imbalance, reduce visibility for covered entities, and enable manufacturers to further shape program operation without the level of oversight or accountability that is fundamental to the integrity of the 340B program. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Avera Health facilities trust them to give up money they are not entitled to? 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). Page 7 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO AVERA HEALTH FACILITIES TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. Manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisions from Covered Entities to manufacturers. Avera Health would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide []9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable if a manufacturer could benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Avera Health facilities have seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 9 42 U.S.C. 256b(a)(1). Page 8 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR process, which has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they guarantee serious and publicly documented consideration. 6. WHAT STATUTE OR REGULATION PERMITS AVERA HEALTH FACILITIES TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? A rebate model could be viewed to involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we will also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE AVERA HEALTH FACILITYS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF AVERA HEALTH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE AVERA HEALTH FOR THE VALUE OF ITS DATA? One of Avera Health Facilitys principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7- point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate- Investment-Activity_2024.pdf. Page 9 commercial PBM rebates, making it obvious that manufacturers are not only concerned about Medicaid duplicate discounts and want to use covered entity claims data to avoid paying commercial rebates to pharmacy benefit managers (PBMs) under their VOLUNTARY agreements. This is not a Covered Entity integrity problem, and hospitals should not have to finance this goal. Manufacturers use PBM rebates to gain beneficial treatment under the PBMs formulary. A rebate model is not necessary to prevent duplicate discounts, and in many respects, it would introduce additional burdens without improving program integrity. De-duplication of the Medicare MFP and 340B discounts can be fully achieved without implementing a rebate structure. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Avera Health for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Avera Health facilities believe it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Avera Health facilities urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. Page 10 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Avera Health Facilitys perspectives, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Avera Healths patient population, we serve many other patients, including patients with no coverage at all. Requiring Avera Health to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO AVERA HEALTH FACILITIES? IF NOT, WHY NOT? As noted above, Avera Health facilities firmly believe that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Avera Health facilities urge HRSA to prioritize Page 11 openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON AVERA HEALTH FACILITIES? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Avera Health facilitiesto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. On a recent call with Beacon personnel, they stated that Beacon expects 10-12% of the MDPNP claims to be 340B eligible. However, at Avera Health facility owned pharmacies, Beacon is identifying over 30% of our MDPNP claims as 340B eligible. Daily our facilities manage disputes with Beacon that are knowingly incorrect. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of 12 See 45 C.F.R. 164.501. Page 12 audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Avera Health facilities are deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Avera Health facilities hope that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. This, already in practice model, prevents Medicaid duplicate discounts by collecting covered entity data retrospectively, allowing the Medicaid agency to exclude 340B claims from rebate requests. This retrospective data submission could also be used to address any duplication concerns voiced by manufacturers. These models allow for standardized data submissions such as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. An independent clearinghouse would also reduce operational strain on covered entities (CEs) by requiring far less reporting. At the same time, it removes the reconciliation, tracking, and dispute obligations that rebate models place on providers. Under a clearinghouse system, responsibility appropriately remains with manufacturerswho are already statutorily obligatedto prevent and remedy duplicate discounts. Where duplication occurs, manufacturers would continue to address it through existing channels such as the Administrative Dispute Resolution (ADR) process, good-faith corrective actions, or other mechanisms. In this context, a rebate model would not offer a superior solution. Instead, it risks adding unnecessary complexity, shifting administrative responsibilities onto covered entities, and disrupting the longstanding structure of the 340B programall while a less burdensome, more targeted alternative is fully capable of addressing manufacturers concerns 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). Page 13 If HRSA were to acquiesce to manufacturers concerns as justification for a rebate pilot, at a minimum, manufacturers should be required to demonstrate that their claims of non-compliance are valid rather than relying on broad, unsubstantiated assertions. HRSA already audits covered entities and is well aware of both CE non-compliance rates and manufacturer non-compliance ratesa fact that is often overlooked in public discourse. Manufacturers have frequently pointed to program growth as evidence that compliance concerns must exist, yet this argument ignores the underlying market dynamics driving much of that growth. Increases in 340B volume are closely tied to manufacturers own pricing strategies, increasingly restrictive distribution networks, and accelerating vertical integration, none of which are reflective of CE behavior or misuse of the program. Avera Health facilities encourage improvements to existing data exchange processes and support solutions that strengthen transparency and efficiency for all stakeholders. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Avera Health facilities maintain auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Fifteen Avera Health Facilities have been audited by HRSA with no, or minor database findings. We dedicate substantial staff time to operating a complaint 340B program. Avera Health facilities routinely spend 10% of their 340B program benefit on compliance activities to include program management software, external auditing companies, companies to manage DSCSA and inventory and employment of program management teams. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, likely new software and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Page 14 Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Requiring Rural Referral Centers (RRCs), Sole Community Hospitals (SCHs), Critical Access Hospitals (CAHs), and Federally Qualified Health Centers (FQHCs) to purchase drugs at Wholesale Acquisition Cost (WAC) is financially punitive and inconsistent with how these facilities procure medications. These organizations do not purchase at WAC under normal market conditions; instead, they rely on Group Purchasing Organizations (GPOs) to access competitive pricing. GPOs aggregate the purchasing volume of multiple hospitalsparticularly essential for small rural facilities with limited buying powerallowing them to secure pricing discounts that individual hospitals could never achieve independently. Industry benchmarks show that GPOs typically generate 1018% cost savings across supply categories due to negotiated volume-based contracts. Participation in GPOs also reduces administrative burden, enabling hospital staff to focus on patient care rather than procurement operations. [targetedonc.com] If a rebate model is implemented, RRCs, SCHs, CAHs, and FQHCs must retain the ability to purchase ineligible units at their negotiated GPO price, not at WAC. Anything else would create an avoidable and unsustainable cost shift onto already under-reimbursed rural and safety-net providers. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Avera Health facilities to expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. The rebate model departs from the statutory purpose of the 340B Program by layering additional administrative requirements onto covered entities without meaningful benefit to patients or program oversight. These requirements divert scarce resources away from direct patient care and toward managing complexity, while incentivizing the emergence of niche businesses whose primary function is navigating the models administrative burden rather than supporting patient access or affordability. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, covered entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third- party vendors. These processes would also involve manual reviews to monitor and respond to Page 15 inaccurate or vague error messages from the manufacturer selected rebate processor. Because we do not always get a timely response from 340B ESP when we have issues or questions, we are required to make multiple calls which keeps employees from other compliance practices. Another new behavior would be continually verifying that rebates have been granted for 100s of NDCs across multiple accounts for each manufacturer. With the existing ESP process team members must manage the 45-day lookback window for purchases and claims submission. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. If a rebate model is rolled out and they develop additional tracking, our third-party software vendor has already informed Avera Health facilities that our program management contract will increase by at least 10%. Those are dollars that will be directly diverted from patient care. e. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Avera Health facilities purchase drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Because we manage our 340B program as a virtual inventory, all 340B purchases are replenishing a known 340B eligible patients dose. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Hospitals could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. A rebate model, on only the first 10 MFP drugs released under the IRA would increase Avera Health facilitys annual drug spend by $60 million. If the entire 340B program changed to a rebate, Avera Health facilities would essentially loan manufacturers hundreds of millions of dollars a year while hoping for a back-end rebate. We also receive prompt-pay discounts through wholesalers, and a rebate model could force changes in payment timing that increase our overall drug expense or require changes in our purchasing practices. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, safety net providers will Page 16 face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that covered entities must collect and submit. Instead of maintaining internal compliance records, Avera Health facilities would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. Combined, Avera Health facilities have over 2,000,000 transactions related to 340B processing. A rebate model would double that to 4,000,000 as we would have to review each transaction once for eligibility and then once again to determine if we appropriately received a rebate. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in 340B operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, covered entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Avera Health facilities and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take into account the information provided by other stakeholders, and consider the impact on vulnerable patients, reject the rebate model approach. Our rural healthcare safety netand the lives who rely on itare at risk with the implementation of this fundamental change to the 340B program. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Melissa Goff Vice-President of Outpatient Pharmacy Page 17 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS (Summarized from https://www.hrsa.gov/opa/program-integrity) 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price Page 18 (Summarized from https://www.hrsa.gov/opa/program-integrity) 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data
HRSA-2026-0001-1632Lincoln Community Health Center2026-04-17T04:00Z9,021 chars
See attached file ,f[[ncoln LINCOLN coMMUNITy HEALTH CENTER, INC. t|[.*.f*' "g',r#:ili[iH:il"'#?;:iliy Comment on 3408 Program Notice Application Process for the 3408 Rebate Model Pilot Program (HHS-2026-03042) Aprilt7,2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Dear Director Britton: On behalf of Lincoln Community Health Center (LCHC), thank you for extending the comment deadline to April 20,2026. This extension allowed Lincoln Community Health Center the time necessary to evaluate the operational, financial, legal, and patient-care implications of the proposed 3408 Rebate Model Pilot Program. After careful review, LCHC strongly urges HRSA to exempt all Community Health Centers from participation in any 3408 rebate model. For more than three decades, the 3408 Drug Pricing Program has enabled Community Health Centers (CHCs) to stretch scarce federal resources, as Congress intended, to provide affordable medications and comprehensive care to medically underserved populations. The proposed rebate model represents a fundamental departure from this structure and would shift financial and administrative risk from manufacturers to safety-net providers-placing patient access and organizational stability at serious risk. Executive Summary . The 3408 rebate model replaces upfront statutory discounts with retrospective reimbursement, creating severe cash-flow, compliance, and operational risks for CHCs. o LCHC would face SZ.g-S8.7 million in additional annual upfront drug costs, threatening sliding fee discounts, staffing, and essential services. o Patients with chronic conditions including those requiring insulin, anticoagulants, and SGLT2 inhibitors, wou ld face I ife-th reate ning access d isru ptions. The Joint Commission Accredited & Primory Core Medical Home Certified LINCOLN COMMUNITY HEALTH CENTER, INC. l30l Fayetteville Street o P.O. Box 521l9 Durham, North Carolina27717 -2119 o The rebate model conflicts with Section 330 requirements, Executive Order #t4273 on insulin access, and existing Medicaid and IRA statutory frameworks. The Role of 3408 in Community Health Centers Under Section 3408 of the Public Health Service Act, CHCs may purchase outpatient drugs at statutory ceiling prices. These upfront discounts allow CHCs to: o Provide affordable low-cost medications to uninsured and underinsured patients o Meet Section 330 sliding fee discount requirements o Reinvest savings into primary care, behavioral health, pharmacy, and support services . Serve populations with significantly higher rates of chronic illness Replacing upfront pricing with a rebate-dependent model directly undermines this structure and introduces financial hardship incompatible with CHC operations. Organizational lmpact: Lincoln Community Health Center o Patients served: 35,190 o Uninsured patientsz !7,678 . Annual sliding fee discounts: S16,018,239 Under the proposed rebate model, LCHC anticipates: . $Z.g-S4.7 million in increased upfront annual drug spend . Loss of liquidity while waiting 40+ days for rebates . Exposure to rebate denials and delayed payments r lncreased legal, compliance, and staffing costs (> 1 additional FTE) Lincoln Community Health Center only serves 340B-eligible patients, and our current dispensing and billing structures already ensure full compliance with statutory eligibility requirements. As such, the rebate pilot program is duplicative of existing safeguards and introduces unnecessary financial risk. Even a conservative5% rebate denial rate would result in 54L6,O67 annually in unrecoverable losses for our organization. The Joint Commission Accredited & Primory Care Medicol Home Certified LINCOLN COMMUNITY HEALTH CENTER, INC. l30l Fayetteville Street o P.O. Box 521l9 Durham, North Carolina27717 -2119 Nearly half of Community Health Centers nationwide operate with fewer than 90 days of cash on hand, making exposure to delayed or denied rebate payments financially untenable. These losses would directly undermine program stability and restrict our ability to maintain access to care for vulnerable patients, contrary to the core intent of the 3408 statute. Patient Impact and Clinical Risk Chronic Disease Management CHCs serve patients with disproportionately high rates of diabetes, cardiovascular disease, hypertension, obesity, and behavioral health conditions. Disruptions to medication access would have immediate clinical consequences: o Direct oral anticoagulants (Eliquis@, Xarelto@): interruption significantly increases stroke, myocardial infarction, and mortality risk. . SGLT2 inhibitors (Jardiance@): withdrawal increases cardiovascular death and hospitalization risk- even with short gaps. . lnsulin: affordability is a matter of life and death for nearly 1,,200 patients at Lincoln Community Health Center. Conflict with Federal lnsulin Access Requirements Executive Order #t4273 conditions future Section 330 funding on point-of-care access to discounted insulin. A rebate model where wholesaler files reflect full WAC pricing makes compliance operationally impossible, as CHCs cannot offer the federally required discount at the time of dispensing. Administrative and Operational Burden HRSA has long emphasized that the 3408 Program is intended to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services, while maintaining program integrity. Community Health Centers already operate under extensive HRSA oversight, including audits, Uniform Data System reporting, and Operational Site Visits. The Joint Commission Accredited & Primory Core Medical Home Certified LINCOLN COMMUNITY HEALTH CENTER, INC. 1301 Fayetteville Street o P.O. Box 521l9 Durham, North Carolina27717 -2119 The proposed rebate model; however, would introduce duplicative and administratively intensive processes that do not meaningfully advance program integrity and instead risk undermining access to care. These burdens include: . Manual rebate reconciliation across multiple manufacturers . Non-uniform denial standards administered through the 340B ESP . Additional lT integration requirements for in-house pharmacies and clinic-administered drugs o lncreased compliance, legal, and third-party vendor costs At present, our organization devotes 4.46 FTEs to 3408 administration and compliance at an annual cost of 5475,684, reflecting our existing commitment to compliance and oversight. Participation in the Rebate Pilot Program would require at least one additional dedicated FTE, at an estimated annual cost of 582,309.75, solely to manage rebate tracking, reconciliation, dispute resolution, and reporting requirements. These additional staffing and infrastructure demands divert finite safety-net resources away from direct patient care. Rather than strengthening program integrity, the increased administrative burden risks reducing the very savings the 340B statute is designed to generate thereby limiting Lincoln Community Health Center's ability to expand services, maintain access, and address unmet patient needs. Legal and Structural Concerns Medicare IRA (MFP) Deduplication The lnflation Reduction Act requires manufacturers to provide the lower of the 3408 ceiling price or the Maximum Fair Price. lt does not authorize charging above the 3408 ceiling price. CMS has adopted Medicare-specific reporting approaches that preserve upfront 340B pricing making a rebate model unnecessary and overly burdensome for CHCs. Medicaid Duplicate Discounts The 340B statute assigns responsibility for preventing Medicaid duplicate discounts to covered entities, not manufacturers. A rebate model improperly transfers this authority, creates billing impossibilities, and exposes CHCs to False Claims Act liability. The Joint Commission Accredited & Primory Care Medical Home Certified The Joint Commission Accredited & Primary Core Medicol Home Certified LINCOLN COMMUNITY HEALTH CENTER, INC. l30l Fayetteville Street o P.O. Box 52119 Durham, North Carolina27717 -2119 Conclusion Lincoln Community Health Center respectfully urges HRSA to: Exempt all Community Health Centers from any 3408 Rebate Model Pilot Program, and pursue alternative solutions that protect patient access, uphold program integrity, ensure statutory compliance, and avoid increased administrative burdens. A rebate model would destabilize the safety net, restrict access to essential medications, and undermine the very purpose of the 3408 program. CHCs are not the source of misuse in 3408; they are among its most accountable and effective stewards. Thank you for the opportunity to comment. We welcome continued engagement in solutions that strengthen rather than weaken the nation's primary care safety net. Sincerely, tlooffi-J4<- Claretta Foye Chief Executive Officer Lincoln Community Health Center The Joint Commission Accredited & Primory Core Medical Home Certified
HRSA-2026-0001-1633Augusta Health2026-04-17T04:00Z18,863 chars
See attached file AUgH:It? Care that makes a lifetime. April 16, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Augusta Health, I am grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) Request for Information: regarding manufacturer rebate models under the 340B Drug Pricing Program. Among other things, this RFI asks ''whether Health Resources and Services Administration (HRS A) should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. Augusta Health is an independent, nonprofit community health system serving the residents ofFishersville, Virginia, and the surrounding Shenandoah Valley. As a 255-bed sole community hospital, it plays a vital role in ensuring access to high-quality care for a largely rural population. Augusta Health provides a broad range of inpatient, outpatient, and community-based services, all designed to meet the diverse needs of the region it serves. Augusta Health has long relied on the stability and predictability of the 340B Drug Pricing Program to support essential patient care initiatives and community health programs. Its commitment to delivering comprehensive, compassionate care underscores the importance of preserving the 340B program in its current state.. .that of an upfront discount. As explained below, any rebate mechanism will impose enormous costs and burdens on Augusta Health and these burdens far outweigh any benefits that might come from it. HRS As own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of 340B covered entities so that they can ''stretch scarce federal resources as far as 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4ooo augustahealth.com possible. reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Augusta Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses thirty questions and encourages commenters to include supporting facts, research, and evidence in their responses. Augusta Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the ten drugs that HRS A previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRS As February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Augusta Health can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Augusta Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Augusta Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. August Health processes approximately 121,027 340B-eligible transactions during the most recent fiscal year. As a rural Sole Community Hospital, we rely heavily on Sentry, a third-party software and service vendor, for split-billing, data aggregation, and compliance support. Current administrative costs for the upfront 340B discount include: Sentry vendor fees: $100, 000 per year Cost of Goods (Contract Pharmacy fees): $140,000 per year 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4000 augustahealth.com Auditing Services: $20,000 per year Internal pharmacy and finance staff time Internal and external audit activities: 2.5 FTE IT support for interfaces: 0.5 FTE A total of approximately : $500,000.00 per year These costs have remained stable under the longstanding upfront 340B model because the program is mature and well established. In contrast, implementing a new rebate framework would require substantial new resources, the development of new workflows, and ongoing operational refinement. Several key factors would drive administrative costs under a rebate-based 340B model, including additional staff within several departments, including pharmacy, finance, and compliance, expanded IT systems, subscriptions and service fees, audit preparation and documentation requirements and increase contract pharmacy fees. These elements would expand the operational complexity of the program and require new investment in personnel, technology, compliance infrastructure, and third-party support. As a result, they would materially increase both the baseline administrative costs of managing the program and the incremental expenses associated with implementing and maintaining the new rebate framework. Implementation of the proposed rebate program would result in increased administrative costs, including both one-time implementation expenses and ongoing operational costs. The expected increased administrative costs for Augusta Health are detailed below: One-time costs: (Hours) System reconfiguration with Sentry/Beacon: 120 hours Workflow redesign: 80 hours Staff training for compliance and auditing: 40 hours Legal review of rebate agreements: 40 hours initially Ongoing costs: (Hours) Claim-level rebate submissions: 8 hours/week 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4ooo august ahealth.com Reconciliation of payments: 80 hours/week Denial management: 80 hours/week Increased audit documentation: 40 hours/week Additional Sentry fees: 20% of each rebate Based on the current estimates, and a reasonable hourly rate of $35.00 with a 23% allocation for benefits, the annual costs will easily add an additional $500,000.00 per year, doubling our current administrative costs. These estimates are based on methodology and assumptions informed by experience with other rebate programs and account for the added complexity of manual reconciliation, expanded audit and documentation demands, additional staff training, and limited staffing flexibility. Additionally, during this pilot period, Augusta Health would be required to maintain both the existing upfront discount workflows and the new rebate workflows simultaneously . Augusta Health would attempt to mitigate these additional costs and related operational burdens by seeking minimal administrative fees from processing entities, larger rebate amounts, guaranteed rebates without denials, and standardized processing though a single portal applicable across manufacturers. Nevertheless, as an independent, non-profit community health system, the operational impact would remain substantial. In a resource-constrained setting, increased administration burden directly reduces capacity for patient care and community programs. Staffing is often limited, and additional administrative tasks frequently shift time and attention away from core clinical and operational functions, thereby placing added strain on existing workflows and on the providers and staff responsible for delivering care. Staffing Impacts Under a Potential 340B Rebate Program. Augusta Health does not currently have the staff needed to comply with a Rebate Program. Implementation of the proposed 340B rebate model would materially increase staffing demands. Augusta Health estimates that it would need approximately one to two additional permanent full-time employees to administer the program effectively. Even beyond those additional positions, the model would require substantial reallocation of existing staff time 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 540-332-4ooo augustahealth.com because it introduces multiple new administrative steps not present under the current system. Those tasks included submitting and tracking rebate claims, reconciling payments, management denials, coordinating with Sentry, and supporting audits and related compliance obligations. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Augusta Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Implementation of a potential 340B rebate program would require additional systems and infrastructure and would materially increase Augusta Healths annual program costs. The proposed model would necessitate new interfaces among the electronic health records, pharmacy system, and Sentry/Beacon systems, estimate at approximately 80 hours of work. This program would also require the creation of additional data fields and reporting capabilities, estimated at 60 hours, as well as tools to track rebate status, denials and payments, estimated at 40 hours. If manufacturers do not use a standardized system, Augusta Health may also need to build integrations with multiple manufacturer portals, adding an estimated 40 hours. In total, one-time IT implementation costs are estimated at 220 hours at $35 per hour, or approximately $7,700. Recurring IT and vendor support costs are estimated at 80 hours annually at $35 per hour, or approximately $2,800, in addition to annual vendor fees estimated to range from $10,000 to $25,000. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRS A and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Augusta Health currently uses Sentry to collect, maintain and retain 340B data. The Augusta Health pharmacy and finance teams then validate the data and conduct routine reconciliations to ensure its accuracy and completeness. The reliability of the data and the effectiveness of the collection process are further supported by multiple internal controls, 78 Medical Center DrIve 8oo-932-0262 Fishersville, VA 22939 54o-332-4ooo augustahealth.com including automated validation check, monthly internal audits, and contract pharmacy reconciliation. In addition, annual audits are performed by a third-party contractor. The software supporting these processes includes location mapping, provider mapping, National Drug Code mapping and payer mapping, which serves as key data integrity and system validation controls to ensure that 340B data is accurately captured, assigned, and maintained for compliance and operational purposes. The rebate model would significantly expand Augusta Healths current data collection and validation obligations by requiring additional claim-level data, more frequent reconciliation, and broader documentation retention, each of which would impose ongoing administrative burdens. The additional data elements that would need to be captured, maintained, and validated include the 340B ID, date of prescription, date of service, prescription number, fill number, National Drug Code, quantity dispensing, service provider identification, Prescription Bank Identification Number, and Prescription Processor Control Number. The ongoing collection, review, and reconciliation of these data points would increase operational complexity and require continuous oversight to support rebate claim submission, payment tracking, denial management, compliance, and audit preparedness. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Augusta Health to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, which delayed discount will have meaningful impact on our institution and the patients we serve. The proposed rebate model would require Augusta Health to pay the full acquisition costs of 340B drugs upfront and then await reimbursement through subsequent rebate payment, creating significant cash flow pressures. Rural health systems typically lack the financial resources needed to carry substantial drug expenditures during the period between purchase and rebate receipt. These pressures are compounded by the rapidly rising cost and utilization of specialty medications, both of which are expected to continue increasing in the years ahead. The 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4000 augustahealth.com severity of this issue is driven by the mismatch in payment timing: Augusta Health typically pays the wholesaler within approximately four days, but rebate payments will not be received until later, after submission and processing. That gap would force Augusta Health to finance the full upfront costs of the drug, creating significant cash flow pressures. The proposed rebate model would materially disrupt current payment cycles and could deprive covered entities of prompt-pay discounts that are critical to managing already constrained cash flow. To safeguard covered entities and ensure that rebate payments are made in a timely and predictable manner, HRSA would need to mandate payment within 10 days, impose penalties for late payments, require transparent reporting on denials and payment activity, and implement a standardized dispute resolution framework. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Augusta Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The additional costs associated with the proposed 340B rebate model would adversely affect both hospital operations and patient care. In a rural hospital setting, where financial and staffing resources are already limited, these added expenses would necessarily divert funds away from direct patient services, pharmacy operations, low-margin clinics, and community health programs. Augusta Health would also be required to shift staff time away from existing responsibilities to support rebate administration, reducing capacity in other operational areas and placing further pressure on already stretched personnel. As a result, the model could lead to reduced service availability, constraints on patient support programs, delayed operational investment, and diminished flexibility to respond to patient and community needs. The proposed rebate model further creates serious concerns by reducing transparency, increasing the likelihood of denials, and delaying the realization of savings that covered entities rely on to support patient care. Because savings would no longer be realized upfront, Augusta Health would face uncertainty regarding the timing, amount, and reliability of rebate payments. 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4ooo augustahealth.com Opaque processing requirements, inconsistent denial information, and delayed dispute resolution would only deepen that uncertainty. For rural and other resource-restrained hospital systems, these disruptions could reduce access to medications, including costly specialty and biologic therapies, limit the scope of pharmacy services, restrict patient assistance programs, and ultimately jeopardize the sustainability of low-margin clinics that are essential to community access. These new burdens outlined above if a rebate model was implemented would layer on top of the Medicaid reimbursement cuts and payment changes included in HR- 1, creating simultaneous upward pressure on expenses and downward pressure on revenue. Together, these federal policy shifts would significantly erode Augusta Healths already narrow operating margin and further jeopardize its ability to achieve the 1 %-2% margin target outlined in its Long Range Financial Forecast. For a sole community, resource-constrained health system, the cumulative effect of these policies would not only strain day-to-day operations but also limit the organization-s capacity to invest in patient care, community programs, and the strategic initiatives necessary to remain financially viable. For all of these reasons, Augusta Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. If, however, HRS A chooses to move forward with this ill-conceived effort, it must allow Augusta Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes. other guardrails). A failure to permit additional comments on the specific features of the program will be. in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. 78 Medical Center Drive 8oo-932-0262 Fishersvtlle, VA 22939 54o-332-4ooo augustahealth.com Sincerely, Mary N. Mannix, FACHE President & CEO Augusta Health 78 Medical Center Drive 8oo-932-0262 Fishersville, VA 22939 54o-332-4000 augustahealth.com
HRSA-2026-0001-1634United Neighborhood Health Services, Inc. (dba Neighborhood Health)2026-04-17T04:00Z22,946 chars
Please see attached letter. Neighborhood Health Business Office l 2711 Foster Ave l Nashville, TN 37210 Call us at (615) 227-3000 to schedule an appointment. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Submitted electronically via www.regulations.gov Dear Director Britton: RE: HHS Docket No. HRSA202603042: Neighborhood Health Comments in Response to Request for Information: 340B Rebate Model Pilot Program United Neighborhood Health Services, Inc. (dba Neighborhood Health) appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. The proposed 340B rebate model introduces significant financial, operational, and patient access risks that are not resolved by prompt pay assurances. Requiring covered entities to purchase drugs at full cost and await rebates shifts working capital burden to safety-net providers, creating ongoing cash flow exposure and financial volatility. The model also imposes substantial new administrative requirements, including claim-level tracking, reconciliation across manufacturers, denial management, and new IT infrastructure, all of which divert limited resources away from patient care. For Ryan White and HIV providers, these changes threaten the stability of programs that rely on 340B savings to fund comprehensive, integrated care. Disruptions to contract pharmacy arrangements and increased operational complexity risk limiting medication access, delaying treatment, and undermining adherence and viral suppression outcomes. Additionally, the rebate model does not address root causes of program integrity concerns, such as payer-side data limitations, and instead adds duplicative reporting burdens to entities that are already among the most highly regulated in healthcare. Critically, weakening the current 340B structure will not eliminate program value but will redirect it away from mission-driven providers to intermediaries, including pharmacy benefit managers, that have no statutory obligation to serve vulnerable populations. The cumulative effect is reduced access, increased administrative cost, and misalignment with the programs intent. 2 Neighborhood Health is a federally qualified health center and Ryan Whitefunded provider delivering comprehensive, integrated care to medically underserved populations, including individuals living with HIV. As a 340B covered entity, Neighborhood Health operates under extensive federal oversight, including HRSA program requirements tied to its Scope of Project, Uniform Data System reporting, and independent financial audits under Uniform Guidance (45 CFR Part 75). The organization maintains strict compliance with all 340B requirements, including prevention of diversion and duplicate discounts. 340B savings are essential to Neighborhood Healths care model and are reinvested directly into patient services. These funds support access to affordable medications, same-day treatment initiation, integrated behavioral health, case management, transportation assistance, and other wraparound services that improve health outcomes and reduce barriers to care. Neighborhood Health serves a high- need patient population, many of whom rely on these services as their primary access point to care. The organizations use of 340B resources is tightly aligned with its mission to expand access, improve outcomes, and sustain comprehensive care for vulnerable communities. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the 3 HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. 340B savings are integral to sustaining the comprehensive HIV care model, including: * Rapid linkage to care and same-day treatment starts * Integrated behavioral health and case management * Medication adherence programs and wraparound services Under a rebate model, reduced predictability and increased administrative costs will force difficult tradeoffs. Resources currently funding these services would be partially redirected to finance inventory and manage rebate administration. The net effect is fewer services for a medically vulnerable population with complex needs. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. Under the current 340B upfront discount model, our organization purchases drugs at reduced cost, allowing alignment between acquisition cost and reimbursement timing. A rebate model would require purchasing at full WAC and waiting for post-dispense rebate reconciliation. Even with prompt pay, this creates a material cash flow gap requiring us to front significantly higher monthly drug spend. The cumulative exposure across high- cost medications, particularly in HIV care, would require increased working capital and/or lines of credit, introducing financing costs and liquidity risk. Any delays, disputes, or denials in rebate processing would further extend this exposure and create volatility in cash flow that does not exist today. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed Our current wholesaler agreements typically operate on net terms (generally in the range of 1530 days), with consistent and 4 for payment, and whether those payment terms differ for non-340B drugs. predictable invoicing cycles. These terms allow for alignment with payer reimbursement timing and 340B purchasing, enabling stable cash management. Payment expectations are clear, and the financial obligation reflects already-discounted 340B pricing. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We currently have access to prompt pay discounts through wholesalers, typically tied to accelerated payment (e.g., early payment within a defined window). These incentives reduce overall acquisition cost and are factored into our purchasing strategy. Participation in these programs requires reliable and predictable cash flow, which would be disrupted under a rebate model that increases upfront cost and delays recovery of funds. State the average number of calendar days within which your organization typically remits payment under these contracts. We currently have access to prompt pay discounts through wholesalers, typically tied to accelerated payment (e.g., early payment within a defined window). These incentives reduce overall acquisition cost and are factored into our purchasing strategy. Participation in these programs requires reliable and predictable cash flow, which would be disrupted under a rebate model that increases upfront cost and delays recovery of funds. Describe with specificity whether a rebate- based payment model would alter payment timing compared to current drug wholesaler arrangements. A rebate-based model would fundamentally misalign payment timing. We would be required to pay wholesalers at full WAC within standard terms (1530 days), while rebate recovery would occur later and be contingent on claim submission, validation, and manufacturer processing. Even under an expedited timeline, this introduces a lag between cash outflow and reimbursement, with variability tied to administrative processing, data discrepancies, and dispute resolution. The result is a persistent and potentially growing cash flow gap, increased administrative burden to track and reconcile payments, and heightened financial risk compared to the current model. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. 5 These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and managements costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. Implementation of a rebate model would introduce both significant one-time and ongoing costs. One-time costs include IT system upgrades or new platform acquisition to enable claim-level tracking, rebate submission, and reconciliation; integration with wholesalers, TPAs, and manufacturer systems; and staff training. These costs are expected to be substantial given the need for real-time or near-real-time data capture and audit readiness. Ongoing costs include additional staffing, third-party administrator fees, expanded audit and compliance functions, legal and consulting support, and increased finance and pharmacy operational workload. There will also be indirect costs associated with managing cash flow (e.g., interest expense or opportunity cost of capital). These represent a permanent increase in administrative overhead that does not exist under the current model. Describe the methodology and assumptions used for the estimates in the preceding question. Estimates are based on current pharmacy program size, prescription volume, number of contract pharmacy arrangements, and existing administrative staffing levels. Assumptions include the need for claim-level adjudication across multiple manufacturers, increased reconciliation cycles, and higher denial/dispute rates requiring manual intervention. Cost projections reflect both internal resource requirements and anticipated reliance on external vendors (e.g., TPAs, IT platforms). Estimates also assume no simplification in data exchange standards and continued variability across manufacturer requirements. Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. Costs reflect the need to support: * Claim- level data capture, validation, and submission for rebates * Reconciliation of rebates against dispensed claims and wholesaler invoices * Denial management, appeals, and dispute 6 resolution * Ongoing compliance monitoring and audit preparation * Contract pharmacy coordination and oversight under increased complexity * Financial tracking of rebate receivables and cash exposure * IT system implementation, maintenance, and integration These activities represent a significant expansion beyond current administrative functions Comment on the impact of these incremental costs under your current operations. The incremental administrative burden would materially disrupt current operations. Existing pharmacy, finance, and compliance teams would be required to shift focus from patient- centered activities to administrative processing. Workflow complexity would increase across all pharmacy channels, particularly contract pharmacy arrangements. The added burden would reduce operational efficiency, slow decision-making, and increase the risk of errors or compliance issues. Over time, these pressures would force tradeoffs between administrative compliance and patient service delivery. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. Implementation would require both additional FTEs and reallocation of existing staff. Current staff do not have excess capacity to absorb the increased workload associated with rebate tracking, reconciliation, and dispute management. Without additional resources, there would be a direct negative impact on patient-facing services and program oversight. If yes to the above, identify the anticipated number of additional FTEs. We estimate a need for approximately 35 additional FTEs depending on final model complexity and claim volume. This includes roles in pharmacy operations, finance/revenue cycle, and compliance. Additional temporary or consulting support may also be required during initial implementation. Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. New and expanded roles would include: * Pharmacy program staff dedicated to rebate submission, tracking, and contract pharmacy coordination * Finance/revenue cycle personnel responsible for reconciliation of rebates, cash flow tracking, and variance analysis * Compliance and audit staff focused on monitoring adherence, preparing for 7 audits, and managing documentation * IT/data support to maintain system integrations and ensure data accuracy These roles would be permanent given the ongoing nature of rebate administration and would represent a structural increase in non-clinical staffing requirements. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential Rebate Model Pilot. Provide estimated costs for system development, procurement, maintenance, or integration, and specify whether any such costs would be one-time or recurring. Discretely identify any additional costs not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered) and specify whether these costs are one-time or recurring. Administrative Burden for Covered Entities with Subgrantees Some RWCs are also federally qualified health centers (FQHCs) and participate in 340B as FQHCs. The administrative burden of a Rebate Model Pilot would be even worse for RWCs that are enrolled in 340B as FQHCs and have subgrantees. HRSA currently assigns an FQHC and its subgrantees the same 340B ID, forcing the FQHC and its subgrantees to act as one entity when uploading data to manufacturer platforms. If HRSA advanced its Rebate Model Pilot, FQHCs and their subgrantees would face an onerous process to discern which purchases, dispenses, and rebate payments belong to which 340B ID holder. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B- Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. 8 In our experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems and challenges, which is why we need a neutral clearinghouse run by the federal government or a contractor. Our organization has encountered significant challenges with submitting 340B claims data under current manufacturer-driven deduplication processes. First, submission requirements are fragmented and inconsistent across manufacturers. Each manufacturer requires different data elements, file formats, submission portals, and timelines. This lack of standardization forces us to maintain multiple parallel workflows, increasing administrative burden, risk of error, and operational inefficiency. Second, we often do not have complete or timely access to all required claims-level data, particularly where PBMs and contract pharmacies are involved. This creates gaps between what manufacturers require and what covered entities can reliably validate. As a result, submissions may be delayed, disputed, or rejected based on data outside of our control. Third, there is limited transparency in how manufacturers validate submissions and determine eligibility. Denials and discrepancies are common, but there is no uniform or predictable process for reconciliation or appeal. This introduces financial uncertainty and requires significant staff time to manage ongoing disputes. Fourth, contract pharmacy restrictions further complicate data submission by fragmenting dispensing channels and limiting access to complete transaction data. This increases the likelihood of mismatches and incomplete submissions, while also reducing patient access points. A neutral clearinghouse would significantly improve this process by establishing a single, standardized framework for data submission, validation, and adjudication across all manufacturers. It would reduce duplicative administrative burden, improve data consistency, and create a transparent and uniform reconciliation process. Importantly, a centralized clearinghouse would also provide the federal government with consistent, comprehensive data across the program, strengthening oversight and accountability without placing disproportionate burden on covered entities. We appreciate HRSAs consideration of our comments. For further information, please contact me at 615-227-3000. Sincerely, Brian Haile, JD, MPP, MA Patient & Chief Executive Officer
HRSA-2026-0001-1635Sanford Health2026-04-17T04:00Z20,369 chars
See attached file(s) as a response to the 340B Rebate Model Pilot Program RFI from Sanford Health. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted via https://www.regulations.gov/ HHS Docket No. HRSA-2026-03042 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels, I am writing on behalf of Sanford Health to respond to the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. We respectfully urge HRSA to completely abandon the rebate model, as it is counter to the original intent of the program and presents serious risks to the programs sustainability. We urge you to instead focus on maintaining the upfront discount model that has worked successfully for decades, ensuring continued access to high-quality health care for all Americans. Sanford Health is the largest rural health system in the United States, serving communities across some of the most geographically expansive and sparsely populated regions in the country. Headquartered in Sioux Falls, South Dakota, Sanford Health is a nonprofit, integrated health system with 55,000 employees caring for more than 2 million patients and nearly 415,000 health plan members across South Dakota, North Dakota, Minnesota, Wyoming, Iowa, Wisconsin, and Michigans Upper Peninsula. Our care delivery footprint includes 58 hospitals, 289 clinic locations, 145 senior care communities, and a physician and advanced practice workforce of more than 4,500 clinicians. The 340B program is a critical resource that enables safety net providers like Sanford Health to maintain and expand health care infrastructure in rural areas. We are committed to finding solutions to ensure the long-term sustainability of the program, but the rebate model under consideration does not achieve this goal. Instead, it would undermine the core tenets of the program and threaten access to high-quality health care for millions of Americans. It represents an existential threat to the 340B programs ability to function properly and meet its mission. A Rebate Model Runs Counter to the Intent of the Statute and Creates an Irreconcilable Power Imbalance The concept of a rebate model, either in some limited or broad application, grants drug manufacturers sweeping and disproportionate control over the 340B program. A rebate model would place nearly all operational and discretionary authority in the hands of pharmaceutical manufacturers. It strips away essential protections for covered entities, including hospitals and community health centers and exposes both patients, and the care networks they depend on, to serious existential threats. The potential implementation of a rebate model is in our opinion unworkable and counter to the intent that the program was envisioned by Congress and has been administered by the Health Resources and Services Administration (HRSA) over the last 30+ years. As HRSA itself has acknowledged, such a model would fundamentally shift how the 340B program has operated for over 30 years. The 340B program was intentionally implemented to provide upfront discounts on covered outpatient drugs to safety-net providers, enabling them to stretch scarce resources and maintain access to care for vulnerable populations. A change to a rebate model would undermine the mission of the program by shifting financial, operational, and compliance burdens from manufacturers onto covered entities, particularly those least able to absorb them. At a fundamental level, HRSA has not provided a clear rationale for why a rebate model is necessary. Drug manufacturers argue that rebate models help prevent statutory violations such as diversion and duplicate discounts. In practice, however, the proposed model allows manufacturers to deny rebates based solely on their own allegations of non-compliance, bypassing the audit and dispute resolution mechanisms already established in statute. The appropriate mechanism to address concerns about diversion and duplicate discounts is through audits and administrative dispute resolution, as outlined in the 340B statute. This contradiction between the stated goals of the rebate model and its actual provisions undermines the legitimacy of the proposal and raises serious questions about its intent and effectiveness. The proposals we have seen to date lack clarity and create more uncertainty in this vital program. The proposals outline only the most basic requirements for what covered entities must submit to manufacturers, while offering vague and insufficient guidance on how manufacturers should process those claims. There is no substantive appeals process for denied claims, leaving covered entities vulnerable and without recourse. A rebate model could create an imbalance where manufacturers are not held accountable. Without clear expectations and enforcement mechanisms from HRSA or HHS, manufacturers could exploit the lack of oversight to their advantage. The previous pilot programs language suggests that manufacturers should act in good faith and that non-compliance could result in removal from the program, but it fails to define what constitutes good faith or what specific actions would warrant removal. Non-existent compliance expectations for drug manufacturers are an obvious detriment to covered entities. Why should covered entities be expected to trust a process that has historically been weighted against them? Based on the challenges we have already experienced with the MFP rebate model, we have serious concerns about the adoption of a 340B rebate model. We correctly identify all 340B status on MFP-eligible claims using the 20 modifiers in the NCPDP 420-dk field, however, several manufacturers continue to deny us MFP rebates on claims that were not 340B qualified claims. Disputing these incorrect denials has been time consuming and largely unsuccessful. In the three months since MFP rebates were implemented, we have experienced hundreds of incorrectly denied rebates with no path for recoupment. It is not a baseless concern to assume that a shift to a 340B rebate model will result in covered entities paying full WAC price upfront, only to face denied rebates on valid 340B claims. Manufacturers already receive all the information necessary to accurately pay MFP rebates, yet they are not doing so. We firmly believe that a 340B rebate model would enable manufacturers to further restrict covered entities access to ceiling pricing, with no effective mechanism for resolving disputes. The current dispute process for denied MFP rebates is extremely labor-intensive and requires claim-level appealseach claim must be disputed individually, and in recent 340B rebate models, there was no clear mechanism for resolving 340B rebate disputes between manufacturers and covered entities. We believe that an effective and durable solution is the establishment of a government- sanctioned, independent, national 340B claims clearinghouse, overseen by HRSA and developed with input from all relevant stakeholders. Such a clearinghouse could securely receive standardized, de-identified electronic claims data, provide state Medicaid programs with the minimum necessary information to prevent duplicate discounts, and eliminate the need for retrospective rebate arrangements, payer specific reporting requirements, and Medicaid modifiers. Creating a government sanctioned national clearinghouse would provide necessary protection while establishing a simplified, payer-specific, automated process for covered entities to submit de-identified claims data from both public and private payers. This approach would increase transparency and ensure that all data submissions comply with HRSA requirements rather than manufacturer-imposed standards. Payment Timing and Cash Flow Disruptions Will Harm Covered Entities In the current structure, Sanford Health purchases medications at the 340B price, receiving an upfront discount that helps maintain financial stability and ensures continued access to care. The proposed rebate model would require covered entities to purchase drugs at the wholesale acquisition cost, which is the highest price manufacturers offer, and then wait for a rebate to be issued. This shift presents significant financial challenges. Pharmacies must maintain adequate inventory to meet patient needs, and paying the full wholesale price upfront would dramatically increase inventory costs. This would reduce the financial reserves available to covered entities and strain their ability to operate effectively. Concerns about cash flow have already been raised in connection with Medicaid Drug Rebate Program rebates, and layering 340B rebates on top of that would only worsen the situation. Should a rebate model move forward, it is critical to clarify the meaning of prompt-payment as it is being applied to a potential 340B rebate model. Proponents often point to the ten-day period between the submission of a rebate request and payment outlined in the model. However, this framing ignores the period that matters most to covered entities: the time between the initial purchase of a drug at full price and receipt of the rebate. Covered entities are obligated to pay wholesalers within a contracted timeframe, and any time spent waiting for a rebate would minimize financial resources available to remit payment to their debtors. Manufacturers should not be permitted to create an interest free cash reserve at the expense of covered entities. Additionally, medications are not always dispensed immediately after purchase. For drugs that are used infrequently, several months may pass between the time of purchase and the time of dispensing. Under a rebate model, a rebate cannot be requested until an entire bulk package of a drug has been fully dispensed. During this time, providers must carry the full financial burden of the purchase, often without adequate reserves to do so. As a result, any purported promptness after a rebate is requested is largely irrelevant to the financial reality facing covered entities. Full dispensation of a package may not occur within the 45-day time constraints established by manufacturers resulting in lost opportunity for rebates due to non-conforming claims that manufacturers are allowed to deny. As currently proposed, a rebate model will be effectively owned, operated and controlled by the drug manufacturers, leaving covered entities at the mercy of unilateral policies imposed by these companies. Even though the previous rebate model states that manufacturers cannot deny rebates based on their own policy restrictions, we know that manufacturers have a history of unilaterally imposing requirements under the guise of program integrity. With manufacturers holding full control over the rebate review and issuance process, there is no guarantee that rebates will be issued fairly or consistently. Without reliable and clear requirements for denials, manufacturers hold the subjective power to develop creative ways to deny payment to covered entities. A rebate model would allow manufacturers to weaponize the alternative dispute resolution process by leveraging it to further delay rebates and/or discourage covered entities from pursuing the accrued rebates due to the complexities and burden associated with pursuing such a claim. The dispute process is purposely complicated and burdensome and holds potential to ruin covered entities with legal fees, lengthy holding patterns and withholding financial discrepancies. Under a rebate-based model, covered entities would be required to pay the full acquisition cost of drugs upfront and then wait for reimbursement only after the entire supply purchased is dispensed, rather than on a per-prescription basis. This structure creates significant cash-flow gaps, particularly for providers with lower patient volumes or inconsistent demand for high-cost medications, where slower drug turnover extends the time to receive the rebates. These challenges would place added financial strain on all covered entities and would be especially burdensome for disproportionate share hospitals (DSH), rural hospitals, and critical access hospitals, and smaller providers operating on thin margins and relying on 340B savings to sustain services for underserved communities. As a result, a rebate structure would disproportionately harm the very providers and patients the 340B program is intended to support, exacerbating inequities and undermining its role as a critical safety-net resource. This financial burden is unsustainable for many 340B providers, especially those already facing economic instability. Though the notice requires manufacturers to assure that no costs for data submission or additional administrative costs are passed to covered entities, there is no definition as to what administrative costs are included or how a covered entity may receive reimbursement for such costs. A rebate model introduces uncertainty and risk into a program that is meant to support the financial viability of safety net providers and the communities they serve. Additional Administrative Burdens and Data Collection Expectations Will Overwhelm Covered Entities The administrative demands of the proposed pilot are especially burdensome for small, rural hospitals and providers. The proposed framework allows each drug manufacturer to establish its own process to make the 340B price available. A rebate model would necessitate the development of new IT systems, data tracking, claim reconciliation, and staff training requirements, all with no clear requirements for standardization for covered entities. Despite some general guidelines, manufacturers are permitted to use their own IT platforms and may require different sets of data for rebate submission. This fragmented approach means hospitals would have to navigate multiple systems and processes, significantly increasing complexity and workload. On top of the complexity associated with the rebate model, covered entities will be expected to maintain their current 340B program requirements, effectively requiring covered entities to manage two separate workflows to capture 340B savings. These administrative burdens will certainly divert resources from patient care. Hospitals would be required to submit data to platforms owned or operated by drug companies or their affiliates, agents or vendors. These platforms are not neutral, and there is a real risk of conflicts of interest or misuse of sensitive data. Furthermore, the rebate model is silent on what the data protections should look like for participants in this program. Potential data security and privacy risks are troubling and must be addressed before any rebate is put into effect. Manufacturers are not HIPAA-covered entities, and its unclear whether covered entities can lawfully provide the data demanded. To put it another way, covered entities are 100 percent accountable to HIPAA, while pharmaceutical manufacturers and their intermediaries are 0 percent subject to the law. Additionally, the platforms that covered entities have so far been asked to submit data to do not have reasonable terms established through an arms-length transaction. Instead, they are dictated by the platform who will inherently favor their clients (manufacturers) interests. Private health information deserves the strongest levels of protection possible. Silence in the notice on how data protections will be incorporated into the overall structure of the program is a serious gap that cannot be left unaddressed. Standards should not be forced on covered entities while manufacturers avoid accountability and liability. Covered entities of all sizes are committed to responsible data management and risk mitigation. The lack of clear lines of responsibility for data security, including financial components, and responses to potential breaches must be addressed. Further, any rebate model would require significant changes to covered entities pharmacy operations, necessitating a significant investment of time and resources that would be diverted from patient care and basic day-to-day operations. At present, with the significant gaps in the framework of what a potential rebate model could look like, it is difficult to estimate the amount of investment that would be necessary to enact and comply with a rebate model. However, what is certain is that it would not be insignificant and require a diversion of efforts away from current operations. This is especially true for rural covered entities. Rural providers especially often lack the staff and resources to manage these administrative requirements. They may be forced to hire additional personnel or divert existing staff from patient care to manage the demands of multiple rebate systems. This shift would strain already limited resources and compromise the quality of care. Conclusion In closing, a possible rebate model would likely contain deep and systemic flaws that undermine the intent of the 340B Program, fundamentally shift the program away from its original purpose and expose covered entities and their patients to serious, lasting consequences. The scope and complexity of the possible changes, combined with the lack of clarity, oversight and infrastructure, presents an unmanageable burden for covered entities, especially rural providers already operating under financial strain. For these reasons, we strongly urge HRSA to abandon pursuing a 340B Rebate Model Program in its entirety. If HRSA chooses to proceed with this ill-advised initiative, it is imperative that drug manufacturers be held to the same standards and expectations as covered entities. The current proposal gives manufacturers disproportionate control without corresponding accountability. We call for immediate and substantial revisions to the rebate models framework, including clear definitions of manufacturers responsibilities, robust oversight mechanisms, enforceable dispute- resolution processes, and regular auditing to ensure compliance. Covered entities must also be protected from the significant financial, operational and administrative burdens this pilot would impose. As the proposal stands now, covered entities will bear the burden of additional operating costs, hiring costs, increased IT costs, increased inventory purchasing costs, the cost of reimbursement delays and more. This undefined list of additional costs will ultimately destroy rural providers and leave patients abandoned. A full accounting of these costs is essential, along with a mechanism to ensure fair and adequate reimbursement for the investments required to comply. Without these safeguards, the rebate model risks destabilizing the very providers the 340B program was designed to support, ultimately threatening patient access to care in vulnerable communities. The rebate model as currently proposed has no positive impact on covered entities or patients. As the agency itself has noted, the proposed pilot is a result of manufacturers seeking alternative mechanisms to manage the 340B program. It is clear, based on manufacturer behavior over the last several years, that they are not interested in improving the 340B Program or merely preventing duplicate discounts. Rather, they are seeking mechanisms to thwart efforts of covered entities to stretch scarce resources to reach more patients and provide comprehensive services. We appreciate the opportunity to share our perspective on this important issue. Should you have questions or wish to discuss these concerns further, please feel free to contact Jesse Breidenbach, Vice President of Pharmacy (jesse.breidenbach@sanfordhealth.org), or Corey Brown, Senior Vice President of Government Affairs (corey.brown@sanfordhealth.org). Sincerely, Jesse Breidenbach Vice President, Pharmacy Sanford Health Jesse.Breidenbach@sanfordhealth.org
HRSA-2026-0001-1636Commonspirit Health2026-04-17T04:00Z5,802 chars
See attached file(s) CHI Health. St. Elizabeth 555 South 70th Street Lincoln, NE 68510 P 402.219.8000 F 402.219.8973 CHIhealthstelizabeth.com April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Health St. Elizabeth, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Health St. Elizabeth that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Health St. Elizabeth relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter most-our patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr20,2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Hlu Sg Sincerely, Tyler Dejong President, CHI Health St. Elizabeth Lincoln NE As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1637UC Health2026-04-17T04:00Z12,551 chars
On behalf of UC Health, we appreciate the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. Please see attached file. April 17th, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of UC Health, we appreciate the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. As the regions only adult academic health system, we not only operate the safety net and essential hospital for Greater Cincinnatiwe are also the regions medical training ground and research engine. The flagship hospital for UC Health, University of Cincinnati Medical Center (UCMC), operates with a unique and challenging dual mission. As a Disproportionate Share Hospital (DSH), UCMCs patients are among the most economically vulnerable in the nation, with nearly 70% on Medicaid, Medicare, or no insurance, and who face barriers to care that go far beyond income such as housing insecurity, food scarcity, chronic illness, and limited access to preventive services. We are an essential hospital that depends on 340B savings to advance the programs statutory goals of expanding access to comprehensive services to our community.[1] We urge HRSA to consider the cost of rebate models on essential hospitals like ours and not move forward with a rebate model or related pilot program because they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. The 340B program is essential to our ability to maintain access to critical medications and sustain services for vulnerable patients across our region. Through 340B savings, we are able to support high-need service lines such as Behavioral Health, Maternal Health, and the regions only verified burn center, among others. In 2024, we provided more than $278 million in community benefit, including over $175 million in charity care and subsidized health services. Importantly, 340B savings enables our health system to maintain financial stability while also carrying out our mission by, for example, extending charity care eligibility up to 400% of the federal poverty levelensuring that more patients can access needed care and medications regardless of their ability to pay. Any changes to the 340B program that reduce its effectivenesssuch as shifting to a rebate model that delays or diminishes savingswould have a disproportionate impact on the vulnerable populations we serve and could directly threaten the sustainability of these essential programs and services. We appreciate the opportunity to share specific details on how rebate models would affect our ability to serve patients, based on our experience with the 340B rebate pilot program that was stopped by federal courts. We continue to question the legality of allowing rebate models that undermine HRSAs authority and upend 30 years of established precedent for delivering benefits to patients and the health systems that serve them. The Financial and Operational Costs of Rebate Models Are Unsustainable UC Health operates on thin financial margins and cannot afford the massive disruptions to our finances that a 340B rebate model would impose. Essential hospitals provide a disproportionate share of uncompensated and under-reimbursed care, and this commitment to underserved communities brings unique financial challenges. In 2023, members of Americas Essential Hospitals had an aggregate operating margin of -7.1%, which was far worse than the aggregate operating margins for all other hospitals (-2.3%).[2] Even if rebate models work as intended, they would disrupt our finances by substantially increasing in our administrative costs, limiting our hospitals access to 340B subprime discounts, and requiring our hospital to float substantial sums of money to boost pharmaceutical companies profits. If pharmaceutical companies deny rebates for our 340B-eligible patients, we will incur substantial additional costs. Overall, we estimate that the implementation of a rebate model will cost our health system at least $32.7 million. ADMINISTRATIVE BURDEN FROM REBATE MODEL IMPLEMENTATION New 340B requirements from manufacturers add substantial administrative costs to the program that diverts funding from patient care. Our hospital currently employs eight full-time employees (FTEs) to manage 340B compliance. We anticipate that a limited rebate pilot, including just the products selected for the Medicare Drug Price Negotiation Selected Drug list, and claims fields included in the initial pilot will necessitate at least two additional FTEs to manage claims level tracking and submission as well as reconciliation and dispute management. Managing different manufacturer requirements will create significant operational complexity beyond the current 340B system. Additionally, the 340B Rebate Model introduces significant compliance risk for covered entities in regard to Medicaid regulatory alignment. Most states require the inclusion of the submission clarification code (SCC) with the value of 20 to designate retail claims as 340B eligible at the point of sale. In a Medicaid rebate model, covered entities will be required either to: Determine the 340B eligibility and submit the SCC 20 code as 340B eligible but not know for certain if the claims medication purchase will qualify as 340B eligible through the rebate model process, or Submit the claim without the SCC 20 code and be required to re-adjudicate the prescription later if the claim is determined to be 340B eligible through the rebate model process. Regardless, the 340B Rebate Model introduces significant variation in how covered entities will report 340B eligible Medicaid claims to their states which could result in lower rebates to states and/or significant increase in compliance risk to covered entities. Preparing to implement the previously proposed rebate program involved staff coordination across myriad departments, including the 340B Team, Compliance, Pharmacy Administration and Operations, Finance, Accounting, Treasury, and Legal. This complex coordination necessitated meaningful staff engagement, which we estimate occupied 5,000 hours of staff time, and new associated salary and benefits expenses. COSTS OF FLOATING FUNDING TO PHARMACEUTICAL COMPANIES By fundamentally changing the nature of the 340B rebate program from a point-of-sale discount to a post- purchase reimbursement system, rebate models would require hospitals to float substantial sums of money to manufacturers, which would reduce our working capital. This policy allows manufacturers to generate interest from money owed to safety net providers, rather than allowing those monies to be used by our health system for patient services. In our hospital system, we estimate the policy would tie up approximately $2.5 million in working capital at any given time, equivalent to 25 patient care positions. This ongoing restriction represents approximately 4% of our annual capital budget, directly constraining our ability to invest in strategic priorities, including expanding access to care for our patients. POTENTIAL COSTS OF INAPPROPRIATELY DENIED OR SIGNIFICANTLY DELAYED REBATES We must also assume that some percentage of claims will be inappropriately denied; fighting and resolving these denials will involve significant capital outlay. Using a conservative estimate that 10% of claims will be denied, we estimate $30 million in increased costs for our system. HRSA has previously acknowledged the likely challenge of delayed or denied rebates but has failed to propose efficient and enforceable methods to address these issues. HRSAs previously issued FAQ indicate that, in the event of a dispute, covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue, and only once the parties have failed to find a consensus should the covered entity contact a generic HRSA email. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment when manufacturers are responsible for failures. POTENTIAL COSTS OF UNAUTHORIZED MANUFACTURER REQUIREMENTS Based on our experience with the pre-implementation of HRSAs rebate pilot, we are concerned that manufacturers will change requirements and impose additional burdens that will add to our administrative costs and compromise our ability to receive the 340B savings that the statute requires. Resources expended navigating manufacturers byzantine systems add further administrative burden to the 340B programto the detriment of hospitals that treat a disproportionate share of low-income patients or operate in rural areas. For example, changes to Beacon guidance during prior implementation planning materially affected our operational assumptions, raising concerns about the lack of transparent oversight. Manufacturers and the Beacon platform updated the Beacon FAQ page without any public notice. We saw the Beacon platform amend responses on its FAQ page without any notice or clarification. Reliance on an FAQ pageparticularly one hosted by an interested private party rather than a federal agencyis an inappropriate and unreliable means of communicating changes to a statutorily authorized program. Any changes to the 340B rebate pilot must be made and authorized by HRSA, not by manufacturers with a pecuniary interest in limiting the number of 340B discounts. We are particularly concerned by the double standards the Beacon platform offers regarding information technology security. Covered entities are expected to agree to Beacons data requirements; however, Beacon refused to complete a simple security questionnaire to ensure compliance with onboarded data. Covered entities were notified that, The Beacon team is currently not completing security questionnaires. I can direct you to our security support page for the available details, with a link to Beacons public page on protocols.[3] The 340B Rebate Model and Beacon 340B platform introduces significant operational complexity by shifting the model from upfront discounts to a claim-level, post-adjudication rebate process, requiring health systems to submit, track, and reconcile every eligible transaction across multiple disconnected systems (EHR, split-billing, and revenue cycle). This creates substantial compliance challenges and administrative burden, including data integration challenges, high reconciliation workload, and the need for new denial management and appeal processes, all while operating under strict timing requirements that increase the risk of missed claims and savings opportunities. Additionally, the model disrupts traditional inventory and purchasing alignment, introduces contract pharmacy eligibility friction, and demands new and highly specialized staffing capabilities that blend pharmacy, finance, and analytics expertise. Combined with payment uncertainty, audit exposure, and dependence on an evolving third-party platform, Beacon effectively transforms 340B into a resource-intensive, revenue cyclelike operation with material financial and compliance risk if not tightly managed. The 340B program allows hospitals like the University of Cincinnati Medical Center to sustain essential services and expand access to care. Policies that delay or reduce access to 340B savings will directly affect patient care in our community. We deeply appreciate the opportunity to comment on this RFI and encourage HRSA to weigh the tremendous negative impact to the program and wholly reject the concept of a rebate model for the 340B Drug Pricing Program. Sincerely, Dr. Jeffrey Akers Vice President of Pharmacy UC Health 3200 Burnet Ave Cincinnati, OH 45229 [1] H.R. REP. 102-384(II), p. 12. [2] Miu R, Kelly K, Nelb R. Essential Data 2025: Our Hospitals, Our PatientsResults of Americas Essential Hospitals 2023 Annual Member Characteristics Survey. Americas Essential Hospitals. December 2025. essentialdata.info. Accessed Feb. 23, 2026. [3] Beacon. Trust Center. https://cm.beaconchannelmanagement.com/pages/trust-center. Accessed Feb. 23, 2026.
HRSA-2026-0001-1638Freeman-Oak Hill Health System, d/b/a Freeman Health System2026-04-17T04:00Z14,804 chars
Proposed 340B Rebate Model Pilot Program would not support increasing access to quality patient care. FREEMAN F Health System 1102 West 32nd Street | Joplin, MO 648o4 | 417.347.111 freemanhealth.com April 16, 2026 Via Electronic Submission The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: For the past one hundred (100) years, Freeman-Oak Hill Health System, d/b/a Freeman Health System (hereafter "Freeman") has been serving patients in Southwest Missouri, Southeast Kansas, and Northeast Oklahoma, with future services to be provided in Northwest Arkansas. As a long-storied, trusted community supporter and on behalf of our patients, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. In the interest of increasing access to quality health care for our patients who largely reside in rural settings and whose budgets can hardly tolerate the expected increase in healthcare's overall cost as a result of such a transition to a rebate model, the answer is a resounding "no." As explained below, any rebate mechanism will impose unanticipated, enormous costs and administrative burdens on Freeman that far outweigh any benefit that might come from it, with the potential to distract from and contract our mission to care for our patients. As discussed below, Freeman's ability to provide costly medical specialties to our communities is largely made possible with 340B savings and deserves preservation within the context of ever-increasing healthcare costs that continue to present problematic decisions for Freeman as well as for our patients. Freeman Health System is a not-or-profit organization with a mission to mprove the health of the communities it serves through contemporary, innovative, quality healthcare solutions. Freeman offers financial assistance to those who qualify HRSA's own calculations of the costs of a rebate model are extraordinary. More fundamentally, HRSA's desire to evaluate a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and pharmaceutical companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services" as Congress originally intended with the 340B program. Preserving the upfront discount mechanism, which Freeman has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses questions and encourages commenters to include supporting facts, research, and evidence in their responses. Freeman has done its best to provide detailed answers in the limited time available to us. In order to reduce the administrative burden associated with this response, for purposes of estimating the cost of a rebate model, we have assumed that any future Rebate Program will only include the 10 drugs that HRSA previously approved for its original Program.t However, we would point out that if the rebate model was extended to include all 340B drugs, this would mean additional pharmaceuticals and more drug companies resulting in more claims to submit, more rebates to track and reconcile, more money that Freeman will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Freeman can spend on patient care and comprehensive, quality health care services. Administrative Costs and Increased Staffing Required Under a Potential 340B Rebate Program. Any rebate program would require Freeman to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Joplin, Missouri's Freeman understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model to ensure compliance with the program for the benefit of our patient communities. A shift to a new kind of discount mechanism demands added resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Freeman is cognizant of its responsibility to maintain compliance with all government programs and is keenly aware of the costs associated with complex rubrics, especially those that change and grow ever more complex. Our current compliance effort to sustain our stellar adherence to 340B regulations includes a cross-functional leadership team including legal and compliance team members who review reports, processes, and internal audits with our pharmacological professionals to assure that the 340B program is error-free and working as intended for the benefit of our patient communities. Introducing a new paradigm for the 340B drug program will require those costs associated with re-training Freeman's team, estimated to be approximately $2500 per person plus travel costs, all of which would more effectively be devoted to improving access to quality health care. 2 While the American Hospital Association ("AMA") estimated that the rebate model program would increase operational l costs from $150,000 to over $500,000 per hospital (https://www.aha.org/news/headline/2025-09-30-aha-says-hrsa-vastly-underestimates-costs- 340b-rebate-pilot-program-will-inflict-hospitals-urges), this did not include the cashflow impact to a hospital's operation in the midst of a reduction in government spending on health care and a hospital's continuing duty to care for the most vulnerable without regard for a patient's ability to pay. Freeman estimates that necessary IT systems, third-party administrator costs, and additional full-time employees to operationalize the 340B Drug Rebate Model as proposed will require an initial, unanticipated investment of Five Hundred Thousand Dollars ($500,000.00) with an additional annual burden of approximately Two Hundred Fifty Thousand Dollars ($250,000.00). Further, the impact of Freeman's annualized upfront cost of funding the purchases of 340B pharmaceuticals is profound. At present, Freeman estimates that the annualized, upfront costs of just the ten (10) drugs named in the pilot program would be Twelve Million Two Hundred Thirty- Nine Thousand and Sixty-Nine Dollars ($12,239,069.00). As a non-profit 340B hospital, such upfront costs would not be absorbed without dramatic, negative impact to community benefits and patient care. As a trusted caretaker of the communities Freeman serves, we are pleased to report the following results: FY2025 Savings: $29,845,356 o FY2025 Community Benefits: $9,953,878 FY2025 Financial Assistance/Unreimbursed Care/Prescriptions at No-Cost: $28,504,620 FY2025 Community Building Activities: $1,007,630 Freeman serves high Medicare/Medicaid populations, some in rural areas, where transportation to healthcare is challenging. To address these challenges, Freeman is funding transportation to treatment centers and brings in specialty health care providers for patient treatment closer to home. Our 340B participation helps us provide services and access to services in our region that may not otherwise be available and may require travel such as: ~Expanded EMS Service~ ~Robotic Surgeries~ ~Oncology Treatment~ ~Neurology ~ ~Dermatology~ Such costly specialties would not be able to be offered without 340B Drug Program savings that support them. Should the program be changed to a rebate model, the savings will be reverted to zero ($0) and difficult, challenging decisions impacting patient care will have to be taken. 3 Staffing Impacts Under a Potential 340B Rebate Program. As mentioned above, Freeman does not currently have the staff needed to comply with a Rebate Program. Implementation of the potential 340B Rebate Model Pilot Program would cause current medical providers to perform complex administrative functions required for claims assertion and processing, challenging and overturning rebate denials, and further compliance activities, including reporting. All such activities will require such medical providers to pivot away from patient care or cause Freeman to increase its administrative cost by hiring additional employees. Despite HRSA's estimate of only five (5) hours per week in additional work for a covered entity's participation in such a rebate model, this is a gross underestimate considering the necessity to maintain compliance within a new, more complex program. Freeman's current estimate of additional weekly administrative hours to participate successfully in the proposed 340B Rebate Model is not five (5), but rather eighty (80), as reported after analysis by the AHA. (See https://www.fiercehealthcare.com/providers/hospitals-administrative-burden-under-340b-pilot- far-outstrips-govs-estimates-aha-says:~:text=A%20table%20 in%20that%20request,comply%20with%20the%20rebate%20model). Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Freeman to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our health system and the patients we serve because the distributions network will not be forced to extend payment terms beyond the 10-day period or beyond the date we receive the rebate. Being forced in the position of banker to the pharmaceutical supply/distribution chain distracts from our core mission: patient care. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretary's express statutory authority to provide for discounts via 'rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will--or reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Freeman reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, community support, strategic plans, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. 4 Problems With the Beacon IT Platform. Under HRSA's original Rebate Pilot Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. At present, we use a Second Sight Solutions platform (ESP) required by manufacturers requiring claims-level detail of our dispensations/administrations and believe our experience is illustrative of the difficulties expected should HRSA again adopt the Beacon IT platform for implementation of a new 340B Drug Rebate program. Often being "timed out" of the platform while in the process of submissions, it seems the platform is not capable of handling the volume of work. Further, the hold time for "chat help" has often exceed thirty (30) minutes. These delays and inefficiencies are costly for the healthcare system as a whole. Perhaps even more concerning is Freeman's experience with the platform's mistakes with Freeman's accounts such as when it combined mixed-use purchases with total purchases, yielding an improper and what would have been a non-compliant claim that Freeman never entered. Although this was ultimately resolved, had that error occurred within a rebate context, our rebate would have been denied and delayed, costing many valuable patient-care dollars. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Freeman, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Freeman Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it is urged to permit Freeman and other covered entities to comment on each of the specifics of its new program and adopt each change with effective dates far beyond a conservative, financially-challenged non- profit care provider's planning horizon. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments 5 Freeman-Oak Hill Health System Matthew Fry President & Chief Executive Officer April 17, 2026 9:52 ET IP: 174.196.60.184
HRSA-2026-0001-1639CommonSpirit Health2026-04-17T04:00Z11,968 chars
See attached letters regarding 340B Rebate Model Pilot Program A member of CommonSpirit April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St Joseph Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St Joseph Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St Joseph Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, )31 ,/, gadi,- Joseph Ruark 340B Authorizing Official, VP Operational Finance CHI St Joseph Hospital Dickinson, ND Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CommonSpirit+ As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org. Ni CHI St.Alexius Williston Medical Center P 701.774.7400 Health 1301 15th Avenue West allStAlexiusHealth.org Williston, ND 58801 lmagine better health: April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Mercy Medical Center a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Mercy Medical Center that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Mercy Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, ea4A--4---- Joseph Ruark 340B Authorizing Official, VP Operational Finance CHI Mercy Medical Center Williston, ND Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CommonSpirit " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1640Bertie County Rural Health Association2026-04-17T04:00Z88,840 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Bertie County Rural Health Association, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Bertie County Rural Health Association anticipates a loss of $300,000- $500,000 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Bertie County Rural Health Association's mission is to provide quality, assessable, and affordable primary and preventive care services in an inclusive manner to the Bertie County region. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Bertie County Rural Health Association in particular, this means it will impact: 11,600 340B transactions/ 2,558 patients served Current ad min costs for our 340B program of $328,171 Medication assistance, contract staff, software program/maintenance, license/fees, occasional bridge for our patient transportation program We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 3408 rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. 1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, DorA, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: I 0.1 097/JAC.Ob013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal- and often less safe -alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep; l9(9):2322-2334. doi: IO. llll /jth.l5415. Epub 2021 Jut 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://v.ww.aha journals.org/doi / pdt/1 0.1161 /circulationaha.l23.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-survevdrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: I 0.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Bertie County Rural Health Association provided $36,353 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Bertie County Rural Health Association anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Bertie County Rural Health Association anticipates an increase of $22,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Bertie County Rural Health Association anticipates needing an additional!to 1.25 FTEs to accommodate the Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Bertie County Rural Health Association estimates the cost to hire additional staff to be between $30,000 to $70,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Bertie County Rural Health Association estimates 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Bertie County Rural Health Association urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Bertie County Rural Health Association's estimated one-time cost of $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 2,558 patients, the total projected increase m expenses-including labor, IT, and carrying costs-is estimated at $126,649 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Bertie County Rural Health Association's estimated one-time integration cost is around $20,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20-25 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Bertie County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what 9 Vulnerabilitv Index Approach to IdentifY Pharmacy Deserts and Kevstone Pharmacies I Pharmacy and Clinical Pharmacologv I JAMA Network Open I .lAMA Network 1 0 https://'ww.healthatlairs.org/doi/abs/1 0.1377/ hlthatr2024.00192'?journa1Code= hlthall' 11 Internal NACHC survey data 7 was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. 12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSAFAQ 8 drugs to make them more affordable for low-income individuals. 13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Bertie County Rural Health Association currently offers a sliding fee scale of acquisition cost x 2 plus $8, $10, or $12 depending on which percentile the patient income falls under. Also, with current 340b savings our pharmacy occasionally helps an uninsured patient with drug costs by covering the cost/copay so that the patient can get their medication. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https:/!bphc.hrsa.go v/compliance/compliance man u al/ch apter9# tootnote I 0 14https://en livenhea lth.co/ blog/year-e nd-business-health-check-kev-metrics-every-phann acy -o\\ner-should-revie\V 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 15 and WAC pricing data for the first quarter of2026 (Ql 2026), and the CMS list ofMDPNP selected drugs by NDC. 16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC-340B for2025 purchases byNDC & volume, reflected in Q I 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC- 340B for 2025 purchases by NDC & volume, reflected in Ql 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC-340B for 2025 purchases by NDC & volume, reflected in Ql 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $368,261 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $52,264 annually to purchase these same drugs at the 340B ceiling price. This represents a 28518% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Bertie County Rural Health Association anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our LCSW that provides Behavioral Health services to our much-needed community population. 15 https://340bpric i ng.h rsa.gov/ 16 h t t ps://www.c 111s.govIti lcs/z i p/seI ected-dru g-Ii st-negotiated-prices-a lso-known-m a:-. i mum- fair-prices-statutez i p.zi p 10 Operating Hours: We anticipate needing to reduce our clinic hours by 3-5 hours per week, specifically impacting our evening hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 164 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Bertie County Rural Health Association asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 3408 program-to "stretch" scarce federal resources-by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Bertie County Rural Health Association estimates its 2027 Annual Rebate Opportunity Cost to be approximately $48,773. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Bertie County Rural Health Association estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $26,333. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our 11 organization would be forced to take out a line of credit I utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $36,000 (9% on $400,000) annually-funds that are currently dedicated to medication assistance, contract staff, hiring additional providers/staff, and occasional bridge for the transportation program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Bertie County Rural Health Association, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Bertie County Rural Health Association urges HRSA to recognize that without rigorous, non discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. 17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $38,759. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.tedera I register.govIdocuments/2025/08/0 I /2025-14619/340h-program-notice-appl ica t ion-proccss- for-the-340h rebate-model-pilot-program 12 lfHRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. lfHRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed ; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 13 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges forCEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Bertie County Rural Health Association strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program-to allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Bertie County Rural Health Association believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 Bertie County Rural Health Association appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Johnny Sessoms, Pharmacy Manager at jsessoms@bcrha. org or Shavonda Pugh, CEO at spugh@bcrha.org. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Bertie County Rural Health Association, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Bertie County Rural Health Association anticipates a loss of $300,000- $500,000 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Bertie County Rural Health Association's mission is to provide quality, assessable, and affordable primary and preventive care services in an inclusive manner to the Bertie County region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Bertie County Rural Health Association in particular, this means it will impact: 11,600 340B transactions/ 2,558 patients served Current ad min costs for our 340B program of $328,171 Medication assistance, contract staff, software program/maintenance, license/fees, occasional bridge for our patient transportation program We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 3408 rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. 1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, DorA, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: I 0.1 097/JAC.Ob013e31823d27b6. PMID: 22156955. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal- and often less safe -alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep; l9(9):2322-2334. doi: IO. llll /jth.l5415. Epub 2021 Jut 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://v.ww.aha journals.org/doi / pdt/1 0.1161 /circulationaha.l23.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-survevdrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: I 0.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Bertie County Rural Health Association provided $36,353 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Bertie County Rural Health Association anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Bertie County Rural Health Association anticipates an increase of $22,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Bertie County Rural Health Association anticipates needing an additional!to 1.25 FTEs to accommodate the Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Bertie County Rural Health Association estimates the cost to hire additional staff to be between $30,000 to $70,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Bertie County Rural Health Association estimates 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Bertie County Rural Health Association urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Bertie County Rural Health Association's estimated one-time cost of $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 2,558 patients, the total projected increase m expenses-including labor, IT, and carrying costs-is estimated at $126,649 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Bertie County Rural Health Association's estimated one-time integration cost is around $20,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20-25 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Bertie County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what 9 Vulnerabilitv Index Approach to IdentifY Pharmacy Deserts and Kevstone Pharmacies I Pharmacy and Clinical Pharmacologv I JAMA Network Open I .lAMA Network 1 0 https://'ww.healthatlairs.org/doi/abs/1 0.1377/ hlthatr2024.00192'?journa1Code= hlthall' 11 Internal NACHC survey data records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. 12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSAFAQ health care services, including medications, based on a patient's income and family size. Bertie County Rural Health Association currently offers a sliding fee scale of acquisition cost x 2 plus $8, $10, or $12 depending on which percentile the patient income falls under. Also, with current 340b savings our pharmacy occasionally helps an uninsured patient with drug costs by covering the cost/copay so that the patient can get their medication. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https:/!bphc.hrsa.go v/compliance/compliance man u al/ch apter9# tootnote I 0 14https://en livenhea lth.co/ blog/year-e nd-business-health-check-kev-metrics-every-phann acy -o\\ner-should-revie\V 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 15 and WAC pricing data for the first quarter of2026 (Ql 2026), and the CMS list ofMDPNP selected drugs by NDC. 16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC-340B for2025 purchases byNDC & volume, reflected in Q I 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC- 340B for 2025 purchases by NDC & volume, reflected in Ql 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC-340B for 2025 purchases by NDC & volume, reflected in Ql 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $368,261 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $52,264 annually to purchase these same drugs at the 340B ceiling price. This represents a 28518% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Bertie County Rural Health Association anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our LCSW that provides Behavioral Health services to our much-needed community population. 15 https://340bpric i ng.h rsa.gov/ 16 h t t ps://www.c 111s.govIti lcs/z i p/seI ected-dru g-Ii st-negotiated-prices-a lso-known-m a:-. i mum- fair-prices-statutez i p.zi p Operating Hours: We anticipate needing to reduce our clinic hours by 3-5 hours per week, specifically impacting our evening hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 164 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Bertie County Rural Health Association asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 3408 program-to "stretch" scarce federal resources-by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Bertie County Rural Health Association estimates its 2027 Annual Rebate Opportunity Cost to be approximately $48,773. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Bertie County Rural Health Association estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $26,333. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit I utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $36,000 (9% on $400,000) annually-funds that are currently dedicated to medication assistance, contract staff, hiring additional providers/staff, and occasional bridge for the transportation program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Bertie County Rural Health Association, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Bertie County Rural Health Association urges HRSA to recognize that without rigorous, non discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. 17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $38,759. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.tedera I register.govIdocuments/2025/08/0 I /2025-14619/340h-program-notice-appl ica t ion-proccss- for-the-340h rebate-model-pilot-program lfHRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. lfHRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed ; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges forCEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Bertie County Rural Health Association strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program-to allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Bertie County Rural Health Association believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Bertie County Rural Health Association appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Johnny Sessoms, Pharmacy Manager at jsessoms@bcrha. org or Shavonda Pugh, CEO at spugh@bcrha.org.
HRSA-2026-0001-1641Marshall Health Network, Inc.2026-04-17T04:00Z8,855 chars
See attached file(s) Health NETWORK The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Marshall Health Network, Inc. ("MHN"), a health system representing three 340B programs (Cabell Huntington Hospital, Inc. ("CHHI") and St. Mary's Medical Center, Inc. ("SMMC") in Huntington, WV, and Pleasant Valley Hospital, Inc. dba Rivers Health ("PVH") in Point Pleasant, WV, is grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Any rebate model will impose enormous costs and burdens on our programs that far outweigh any possible benefits. HRSA's own calculations of costs are extraordinary. Further, HRSA's desire to test a rebate model is based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. To the contrary, in order to effect the purpose of the 340B program, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which our programs have relied on for years, is the most effective way to fulfill the fundamental purpose the 340B program. For purposes of estimating the effect a rebate model would have on our programs, WIN has assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, cost estimates have increased compared to the estimates we had calculated for the 2026 drugs alone. More drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money needed to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that our programs can spend on patient care and comprehensive health care services. 5183 US Rt 60 E., Huntington, WV 25705 I 304.526.2000 l marshallhealthnetwork.org Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require our programs to incur significant administrative costs.. MHN estimates that the proposed rebate system will result in a net impact of several millions of dollars the first two years alone. As a part of that impact, our hospitals would need to dedicate significant resources, including personnel, to managing participation in the rebate model or, alternatively, incur additional costs to contract for third party services. Staffing Impacts Under a Potential 340B Rebate Program. Our programs do not currently have the staff needed to comply with a rebate program. Each of our three programs anticipate that compliance with the rebate program would require well in excess of the five hours per week estimated by HRSA and that participation would necessitate hiring additional full-time staff to bear the expected administrative burden. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our programs have designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force our three programs to incur significant costs to change those systems. Our existing technology systems are not currently configured to accommodate what would be required in the proposed rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals such as CHHI, SMMC, and PVH. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that our programs will no longer be able to use its 340B savings as effectively and comprehensively as under an upfront discount model. As a result, our hospitals, their patients, and their communities will suffer in demonstrable ways. A rebate model, as compared to an upfront discount model, requires CHHI, SMMC, PVH, and other 340B hospitals to carry an unnecessary administrative burden for the benefit of manufacturers. Because our programs have developed its 340B program based on upfront discounts, a change to a rebate model will directly affect cashflow. Moreover, considering the anticipated administrative costs, expenses paid to third parties, and potential delays in receiving rebates, shifting to a rebate model will have a direct impact on our ability to provide necessary community healthcare services that are revenue negative or revenue neutral. Because CHHI, SMMC, and PVH all serve a disproportionately high Medicare and Medicaid population, the effects of a rebate model will be amplified as compared to covered entities that do not serve disproportionate Medicare and Medicaid populations. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Our programs reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and finanCial planning for the use of 340B savingsall based on an upfront-discount model. Absent any identified problems with the upfront discount model, and given the significant costs that this disruption will impose on our 340B hospitals, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Similarly, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse model is neither viable nor less costly than a rebate mechanism. Our experience with the existing 340B program has been largely positive, productive, and, perhaps most importantly, practical. Our programs are accustomed to working in good faith with drug manufacturers that make inquiries regarding potential duplicate discounts. MHN does not believe that the proposed rebate model would be as cost effective or efficient as the existing 340B program. To the contrary, all indications are that the proposed rebate program would be more expensive and less efficient that the existing program. For all of these reasons, we respectfully submit that the costs and burdens of any Rebate Program will outweigh any possible benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse model. Very truly yours, 'Arty Dial. MD Chief Physician Executive Marshall Health Network
HRSA-2026-0001-1642Access Community Health Centers, Inc.2026-04-17T04:00Z4,155 chars
See attached file(s) April 17, 2026 Dear Health Resources and Services Administrations (HRSA), RE: Call to Action - Protecting the 340B Drug Pricing Program for Community Health Centers Access Community Health Centers (ACHC) urges Congress to exempt Community Health Centers (CHCs) from the proposed 340B Rebate Model and to protect the 340B Drug Pricing Program from manufacturer-imposed barriers that undermine patient access to affordable medications and essential health care services. How Access Community Health Centers Reinvests 340B Resources to Serve Patients In 2025, Access CHC served 37,345 patients, of whom 31,742 were at or below 200% of the Federal Poverty Level (FPL) and 7,119 were uninsured. Approximately one-third of all patients served carry a chronic disease diagnosis. Access contracts with pharmacies at three locations within our medical clinic, two of which operate as remote dispensaries, ensuring convenient and affordable medication delivery options for our most vulnerable patients. The impact of the 340B Program on our uninsured and underinsured patients is significant. In 2025, the average cost of a 30-day supply of insulin for an uninsured patient at or below 200% FPL was just $18. In total, Access provided 7,889 prescriptions to 2,687 un/underinsured patients at a cost of approximately $130,000, medications that would otherwise have totaled $3,364,401. Without our sliding-scale discount program, the average prescription cost for an uninsured patient would have been approximately $425 per script. Patient Quotes I appreciate the Access clinic and pharmacy so much. I lost insurance last year and was so concerned about how Id afford anything. The services Ive received have been so helpful and compassionate. My medications are for high blood pressure and diabetes. Thanks so much. I lost my Medicaid and would not be able to afford my mental health medications without Access. The sliding scale discount helped me to be able to keep taking my needed medications. Thank goodness for Access. I would not be able to afford my blood pressure meds without them! Since taking my medications more consistently I have fewer headaches and can play more with my grandchildren. Impact on Patients and Access Community Health Centers The proposed Rebate Model and continuing drug manufacturer restrictions are creating significant operational and financial burdens for ACHC and threatening patient access to essential medications. The following impacts were documented in 2025: 520 staff hours spent navigating manufacturer restrictions in 2025. 20 hours per week (approximately 0.5 FTE) dedicated solely to ongoing administration of the rebate program. Approximately $50,000 in annual legal expenses incurred to navigate the rebate model. The rebate models requirement for up-front purchases disrupts cash flow, reduces savings, and escalates administrative costs. 2,687 uninsured and underinsured patients are at risk of losing access to discounted medications a number that will increase as changes to Medicaid result in further coverage losses. 33 contract pharmacy access points are threatened, forcing patients to travel greater distances to obtain medications or to forgo treatment entirely. Staff resources are being diverted away from direct patient care. Reduced 340B savings limit the organizations ability to reinvest in essential local health services. The 340B Program helps Community Health Centers to reinvest in patient care and expand access to affordable medications, all without cost to taxpayers. While drug manufacturers, Pharmacy Benefit Managers, and other stakeholders continue to threaten the programs viability, it is local patients who bear the consequences. We are requesting the opportunity to discuss the 340B Program, its value to your constituents, and how Access Community Health Centers serves as a fiscally responsible program steward. Respectfully submitted, Joanne Holland Chief Business Development Officer Access Community Health Centers Phone: 608.443.5518 Email: Joanne.Holland@accesshealthwi.org
HRSA-2026-0001-1643CaroMont Health2026-04-17T04:00Z27,481 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of CaroMont Regional Medical Center, Gastonia NC, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on CaroMont Regional Medical Center, Gastonia NC, that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which CaroMont Regional Medical Center, Gastonia NC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. CaroMont Regional Medical Center, Gastonia NC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and 2 denials, and therefore less money that CaroMont Regional Medical Center, Gastonia NC can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require CaroMont Regional Medical Center, Gastonia NC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, CaroMont Regional Medical Center, Gastonia NC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Scope and assumptions: Estimates assume up to 25 drugs shifting to rebate workflow with an integrated covered entity using existing 340B software and split-billing models; costs scale with claim volume, dispensing sites, and manufacturer count. Labor rates of $65$90/hour are used for cost estimates. Incremental cost estimates: One-time startup costs range from 840 to 1,790 hours ($55k$270k), and ongoing annual costs range from 790 to 2,160 hours ($65k$336k), covering governance, IT integration, claim submission, reconciliation, disputes, compliance, and legal functions. Key cost drivers: Factors include number of drugs, manufacturers, claim volume, exception rates, contract pharmacy network size, payer variation, IT complexity, submission cadence, TPA fees, dispute requirements, audit readiness, cash management, and organizational capacity. Each driver affects labor and operational complexity differently. Covered activities: Costs cover program setup, eligibility logic, data submission, reconciliation, exception management, dispute handling, compliance monitoring, and vendor management. Impact on current costs: The rebate model adds new work such as claim-level submissions, tracking, cash application, and disputes, while only partially reducing replenishment tasks; mixed models increase complexity and operational risk. Contract pharmacy oversight becomes more demanding. Additional costs not included: Legal/regulatory monitoring, contract amendments, privacy/security assessments, internal controls updates, finance- related administration, and go-live stabilization support may add one-time and recurring expenses. Comprehensive burden inventory: Legal review, training, consulting, vendor onboarding, privacy risk management, data quality remediation, dispute 3 escalation, audit response, finance operations, staff diversion, service throughput impacts, and system maintenance contribute to high rebate administration costs. Comparison to 340B savings: Incremental rebate administrative costs can significantly erode marginal 340B savings from the up-to-25 drugs due to recurring admin expenses, delayed collections, collectability risk, and mixed workflow complexity. Organizations should assess cost versus benefit carefully. Staffing Impacts Under a Potential 340B Rebate Program. CaroMont Regional Medical Center, Gastonia NC does not currently have the staff needed to comply with a Rebate Program. Implementing the 340B Rebate Model Pilot Program will likely require a substantial increase in administrative workload. The program involves tracking rebate- eligible drugs, compliance documentation, reporting requirements, and coordination with manufacturers and federal agencies. Based on typical administrative demands observed it is estimated that the program will require, at minimum, one additional full-time employee (FTE) for every 25 drugs managed. This FTE would primarily handle data entry, compliance checks, and submission of rebate claims. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. CaroMont Regional Medical Center, Gastonia NC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, we manually audit 30 eligible 340B claims per month for both inpatient and outpatient cases. Soon, we'll adopt a technology-driven approach to audit 100% of inpatient 340B claims and all contract pharmacy claims with our new retail pharmacy. We'll use 340 ESP to report claims to manufacturers. The new 340B rebate model will require increased daily monitoring and manual processes to ensure proper submission and compliance, even though manufacturer guidelines and regulations have yet to be finalized. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force CaroMont Regional Medical 4 Center, Gastonia NC to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that CaroMont Regional Medical Center, Gastonia NC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. CaroMont Regional Medical Center operates the only two acute care hospitals in Gaston County. Without the upfront, reliable savings from the 340b drug program, the hospital might have to close two of its most unprofitable services Labor and Delivery and Inpatient Behavioral Health. This would mean that patients would have to travel outside their home county to deliver their babies, putting themselves and their unborn child at higher risk. There currently is a shortage of behavioral health inpatient beds in North Carolina so closing our 63 licensed beds would cause further challenges for these patients to obtain the care they need when they are the most vulnerable and potentially a danger to themselves and those around them. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. CaroMont Regional Medical Center, Gastonia NC reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. 5 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on CaroMont Regional Medical Center, Gastonia NC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date there have been no documented duplicate discounts for CaroMont Regional Medica Center. Our Pharmacy IT analyst team monitors the modifiers on pharmacy claims to ensure the correct modifiers are being added appropriately. We have been contacted by external companies to review specific claims along with general drug claims and have not found any claims that were incorrectly billed. The proposed process would significantly increase the covered entitys workload. In addition to continuing current activitiesadding modifiers and auditing claims under a system that is functioning properlywe would need to build and operate an entirely separate workflow to ensure the new process is implemented correctly, remains accurate over time, and complies with evolving requirements. For all of these reasons, CaroMont Regional Medical Center, Gastonia NC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow CaroMont Regional Medical Center, Gastonia NC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. 6 We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me at the email address below if you have questions. Sincerely, David OConnor Chief Financial Officer CaroMont Regional Medical Center, Gastonia NC David.Oconnor@caromonthealth.org The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of CaroMont Regional Medical Center, Gastonia NC, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on CaroMont Regional Medical Center, Gastonia NC, that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which CaroMont Regional Medical Center, Gastonia NC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. CaroMont Regional Medical Center, Gastonia NC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that CaroMont Regional Medical Center, Gastonia NC can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require CaroMont Regional Medical Center, Gastonia NC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, CaroMont Regional Medical Center, Gastonia NC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Scope and assumptions: Estimates assume up to 25 drugs shifting to rebate workflow with an integrated covered entity using existing 340B software and split-billing models; costs scale with claim volume, dispensing sites, and manufacturer count. Labor rates of $65$90/hour are used for cost estimates. Incremental cost estimates: One-time startup costs range from 840 to 1,790 hours ($55k$270k), and ongoing annual costs range from 790 to 2,160 hours ($65k$336k), covering governance, IT integration, claim submission, reconciliation, disputes, compliance, and legal functions. Key cost drivers: Factors include number of drugs, manufacturers, claim volume, exception rates, contract pharmacy network size, payer variation, IT complexity, submission cadence, TPA fees, dispute requirements, audit readiness, cash management, and organizational capacity. Each driver affects labor and operational complexity differently. Covered activities: Costs cover program setup, eligibility logic, data submission, reconciliation, exception management, dispute handling, compliance monitoring, and vendor management. Impact on current costs: The rebate model adds new work such as claim-level submissions, tracking, cash application, and disputes, while only partially reducing replenishment tasks; mixed models increase complexity and operational risk. Contract pharmacy oversight becomes more demanding. Additional costs not included: Legal/regulatory monitoring, contract amendments, privacy/security assessments, internal controls updates, finance-related administration, and go-live stabilization support may add one-time and recurring expenses. Comprehensive burden inventory: Legal review, training, consulting, vendor onboarding, privacy risk management, data quality remediation, dispute escalation, audit response, finance operations, staff diversion, service throughput impacts, and system maintenance contribute to high rebate administration costs. Comparison to 340B savings: Incremental rebate administrative costs can significantly erode marginal 340B savings from the up-to-25 drugs due to recurring admin expenses, delayed collections, collectability risk, and mixed workflow complexity. Organizations should assess cost versus benefit carefully. Staffing Impacts Under a Potential 340B Rebate Program. CaroMont Regional Medical Center, Gastonia NC does not currently have the staff needed to comply with a Rebate Program. Implementing the 340B Rebate Model Pilot Program will likely require a substantial increase in administrative workload. The program involves tracking rebate-eligible drugs, compliance documentation, reporting requirements, and coordination with manufacturers and federal agencies. Based on typical administrative demands observed it is estimated that the program will require, at minimum, one additional full-time employee (FTE) for every 25 drugs managed. This FTE would primarily handle data entry, compliance checks, and submission of rebate claims. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. CaroMont Regional Medical Center, Gastonia NC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, we manually audit 30 eligible 340B claims per month for both inpatient and outpatient cases. Soon, we'll adopt a technology-driven approach to audit 100% of inpatient 340B claims and all contract pharmacy claims with our new retail pharmacy. We'll use 340 ESP to report claims to manufacturers. The new 340B rebate model will require increased daily monitoring and manual processes to ensure proper submission and compliance, even though manufacturer guidelines and regulations have yet to be finalized. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force CaroMont Regional Medical Center, Gastonia NC to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that CaroMont Regional Medical Center, Gastonia NC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. CaroMont Regional Medical Center operates the only two acute care hospitals in Gaston County. Without the upfront, reliable savings from the 340b drug program, the hospital might have to close two of its most unprofitable services Labor and Delivery and Inpatient Behavioral Health. This would mean that patients would have to travel outside their home county to deliver their babies, putting themselves and their unborn child at higher risk. There currently is a shortage of behavioral health inpatient beds in North Carolina so closing our 63 licensed beds would cause further challenges for these patients to obtain the care they need when they are the most vulnerable and potentially a danger to themselves and those around them. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. CaroMont Regional Medical Center, Gastonia NC reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on CaroMont Regional Medical Center, Gastonia NC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date there have been no documented duplicate discounts for CaroMont Regional Medica Center. Our Pharmacy IT analyst team monitors the modifiers on pharmacy claims to ensure the correct modifiers are being added appropriately. We have been contacted by external companies to review specific claims along with general drug claims and have not found any claims that were incorrectly billed. The proposed process would significantly increase the covered entitys workload. In addition to continuing current activitiesadding modifiers and auditing claims under a system that is functioning properlywe would need to build and operate an entirely separate workflow to ensure the new process is implemented correctly, remains accurate over time, and complies with evolving requirements. For all of these reasons, CaroMont Regional Medical Center, Gastonia NC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow CaroMont Regional Medical Center, Gastonia NC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me at the email address below if you have questions. Sincerely, David OConnor Chief Financial Officer CaroMont Regional Medical Center, Gastonia NC David.Oconnor@caromonthealth.org
HRSA-2026-0001-1644Johns Hopkins Health System2026-04-17T04:00Z26,501 chars
Please find Johns Hopkins Health System's comment attached. 1 BY ELECTRONIC SUBMISSION VIA Federal eRulemaking Portal April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042. Dear Director Britton: The Johns Hopkins Health System (JHHS) appreciates the opportunity to comment on The U.S. Department of Health and Human Services (HHS) Request for Information on the 340B Rebate Model Pilot Program. JHHS is a not-for-profit academic medical center dedicated to providing the highest quality patient health care in the treatment and prevention of human illness. JHHS includes the following hospitals that participate in the 340B Drug Pricing Program (340B Program), and care for a disproportionate share of low-income, uninsured, and Medicare/Medicaid beneficiaries: The Johns Hopkins Hospital (a 1,215-bed hospital located in the heart of Baltimore, Maryland), Johns Hopkins Bayview Medical Center (a 474-bed hospital in East Baltimore, Maryland), and The Johns Hopkins All Childrens Hospital (a 259-bed acute care childrens hospital in St. Petersburg, Florida). We appreciate the Health Resources and Services Administrations (HRSA) interest in hearing from stakeholders about whether HRSA should implement a 340B rebate model, and if so, how best to operationalize it. As JHHS has previously noted to HRSA in its September 5, 2025, comment on the 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, we respectfully request that HRSA abandon its pursuit of a 340B rebate model due to several unintended consequences negatively impacting safety-net providers and the vulnerable communities we serve. Since the inception of the 340B Drug Pricing Program, HRSA has recognized covered entities need to minimize upfront purchasing costs. HRSA reinforced this point in its September 2 2024 warning letter to Johnson & Johnson regarding its plans to implement a rebate model, where the agency stated that forcing covered entities to pay commercial prices, such as wholesale acquisition cost, for outpatient drugs from manufacturers violates the 340B statute. We recommend reaffirming this position and ensuring accessible pricing for covered entities. Any approach that increases initial drug acquisition costs would negatively impact the ability to provide comprehensive services due to the substantial operational and financial burdens rebate models would impose on participating hospitals. I. A Rebate Model Unnecessarily Risks Harming Covered Entities and Patient Support Programs. One significant concern with a 340B rebate model is that it conditions covered entities access to the 340B discount on a process controlled by manufacturers that have a direct financial interest in restricting discounts and operate without mission-driven commitments and community benefit obligations. While we strongly maintain that HRSA should abandon any plan for a rebate model, if HRSA chooses to pilot a rebate model, it is essential that HRSA reduce excessive administrative burdens on covered entities as they will need to spend considerable resources to obtain the statutory discounts they are entitled to under the 340B Program. If forced to incur these costs, covered entities will have to divert limited resources away from support programs to implement each individual manufacturers rebate model. This runs directly counter to the purpose of the 340B Program, which is to allow hospitals to stretch scarce federal resources as far as possible to reach more eligible patients and provide the comprehensive care and wrap around services necessary to achieve full health. We offer the following responses to the RFI and comments on the administrative burdens and potential consequences of implementing a rebate model and propose alternative mechanisms to mitigate these consequences. 1. Administrative Costs to Covered Entities Under a Potential 340B Rebate Model Pilot Program. A 340B rebate model would impose substantial new administrative costs to JHHS, which designed its hiring, operations, and program administration around an upfront discount model. For up to 25 drugs (the 10 drugs selected for Maximum Fair Price (MFP) applicability in 2026 and the 15 drugs selected for MFP applicability in 2027) under a 340B Rebate Model Pilot Program, JHHS estimates it would incur both one-time startup costs and ongoing annual costs due to several key cost drivers. A. Staffing Impacts 3 We expect that a rebate model will likely require JHHS to divert current staff to perform claims processing, data collection/submission, data reconciliation, rebate tracking, audit support, and denial challenges. Based on our conservative assessment, this will add on average eight (8) additional hours per week per affected staff member, with higher intensity during reconciliation, audit, and denial challenge periods. We expect to engage third parties to perform legal, and IT integration services due to the complexity and novelty of new, varying, manufacturer-specific, data-dependent, rebate-based workflows at an unavoidably costly rate. Over time, as the number of 340B rebate-eligible drugs grows, we estimate to incur salary and benefit costs for at least two new full-time employee (FTE) roles for pharmacy revenue cycle management (retail and mixed- use) across the procurement, compliance, and financial analysis departments of our participating 340B hospitals, to handle the persistent reporting and tracking demands. These estimates would change significantly if manufacturers were permitted to select from various IT platforms. Managing different IT platforms would likely force additional manual review and crosswalks, multiple submission workflows, and/or expanded requirements from third-party administrators (TPAs) currently utilized by covered entities, thereby increasing administrative burden and operational costs. B. Data Collection With respect to data collection by covered entities, HRSA previously stated that a rebate mechanism would not impose new data-related burdens on covered entities as 340B hospitals already provide the required information through 340B ESP. Unfortunately, that does not reflect how current operational processes work and significantly understates the administrative costs associated with data collection and submission under a rebate model for several reasons. First, 340B ESP is primarily used in connection with contract pharmacies; it is not a universal, claims submission system for in-house pharmacy claims (e.g., claims tied to hospital outpatient departments, health system-owned retail pharmacies, infusion centers, and provider- administered settings). 340B ESP does not routinely capture claims and encounter data for many in-house pharmacy and provider-administered settings that would be relevant to a rebate model. Where automated feeds do not exist, staff must perform time-intensive manual data entry, reviews, and crosswalks. Second, 340B ESP only applies to pharmacy claims, whereas a manufacturers rebate model would also apply to medical claims. Pulling medical claims data requires access to completely different data systems and would be much more burdensome to gather. Third, a rebate model would significantly add to our administrative costs and burden because of the need to submit data as quickly as possible to receive the rebate. This is different from our existing inventory replenishment processes, where we generally review claims approximately 14 days after they were dispensed for 340B eligibility. As a result, data collection and reporting under a rebate model would not simply repurpose an existing process; it would require us to entirely restructure our workflow. 4 We reiterate our request that HRSA not proceed with implementation of a rebate model. However, should HRSA choose to do so despite the financial costs to covered entities, we urge HRSA to limit the scope of data necessary under a potential future rebate model. As mentioned in our previous comment, we strongly believe that this is an area where HRSA can align with the Administration's commitment to eliminate unnecessary administrative burdens for all stakeholders. Covered entities should not be required to submit any claim-level data under a rebate model other than the minimum data elements necessary for manufacturers to match a 340B rebate request to an MFP-eligible Part D claim (i.e., 340B ID and prescription number). Requests for data beyond what is operationally required introduce privacy risks and would require significant safeguards against prescriber profiling, and consequently, would be more administratively and financially burdensome to implement. 2. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will effectively force JHHS to provide drug companies with interest-free loans as we await the discounts that we are owed under the federal 340B statute. This creates a gap between when the drug is purchased and when the discount is received, which could inflict pressure on cash flowespecially when high-cost specialty medications are included. If there are delays (for example, 3090 days or more), covered entities would need to carry significantly higher costs for longer periods of time. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Pilot Program, the delay will have a negative impact on our institution and the patients we serve. Contrary to manufacturer claims that a payment deadline of 10 days would mitigate cash flow concerns, this does not offer any reprieve for high-cost drugs that might sit on shelves for weeks after purchase and before administration. Simply put, covered entities will have paid the expensive Wholesale Acquisition Cost (WAC) upfront and must absorb the financial burden of the drugs. In some cases, it could take weeks until the drug has been billed, before the 10-day rebate process can even begin. Therefore, the total lag time from drug acquisition to payment of the rebate must be considered, not just the time from rebate payment to invoice date, as manufacturers have suggested. Further, in our experience under the MFP rebate program, reliance on manufacturer- driven rebate processes has led to inconsistent MFP payment timing with documented cash flow impacts. These problems are primarily due to manufacturer-controlled rebate processes and a lack of transparency. Although the manufacturers are subject to a 14-day prompt MFP payment window requirement, many of our MFP rebate payments have been delayed well beyond that window, and these delays have materially affected our cash flow. This is not an isolated occurrence. Through mid-March 2026, we identified at least 100 claims that were inaccurately categorized by the Beacon platform and therefore required Good Faith Inquiries (GFIs), resulting in approximately $178,000 in erroneously denied MFP rebates in just the first couple 5 months of the MFP program, not including additional claims that appear to have been underpaid by the manufacturer. The current dispute process, as further explained below, is also highly resource-intensive, requiring significant time and manual interventions for each prescription. HRSAs original Rebate Pilot Program was to be implemented using the Beacon IT platform. Given our current experience using Beacon for the MFP rebate program, we are concerned that the same issues will arise under a 340B Rebate Model Pilot Program and further exacerbate existing data submission and financial burdens. Per HRSAs February 25, 2026, Information Collection Request, we assume that a future Rebate Program could include the 10 drugs previously approved under the Pilot Program, as well as those drugs that have been approved under the Medicare Drug Price Negotiation Program for 2027. Johns Hopkins 340B Hospitals conservatively estimates that each month, the Hospitals will need to cover additional drug costs of more than $1.3 million for drug purchases under the initial 10-drug Pilot Program as we await unguaranteed rebate payments. Further, Johns Hopkins 340B Hospitals could potentially forgo more than $15 million in 340B savings annually attributed solely to the 10 drugs, should the rebate model be used to deny statutorily required 340B savings. However, our conservative estimates have increased with the inclusion of the additional drugs. For the 25 drugs included under the Medicare Drug Price Negotiation Program for CY26 and CY27, we conservatively estimate that our hospitals would need to cover the cost of $2.6 million over a 15-30-day lag period as we await rebate payments. Ultimately, the rebate program will impact the communities served by participating hospitals. Again, considering the significant financial and cash-flow impacts inherent in any rebate model, JHHS respectfully requests that HRSA not proceed with a rebate model, regardless of the scope. However, should HRSA nevertheless decide to move forward with implementation of a rebate model, to ensure manufacturers adhere to a requirement that rebates be paid (or formally denied with supporting documentation) within 10 calendar days of data submission, a potential 340B Rebate Model Pilot Program should incorporate the following structural elements: a) Deemed Approval Provision: Establish a deemed approved mechanism whereby, if a manufacturer does not issue payment or provide a documented denial within 10 calendar days, the rebate is automatically approved and payable. In other words, manufacturers waive the right to deny a rebate if they do not identify a permitted reason for a denial within 10 calendar days. b) Mandatory Denial Documentation Standards: Require manufacturers to provide standardized, claim-level denial template that includes claim-level identifiers, defined denial codes according to a defined and limited list of permissible reasons for denial, clearly written rationale with supporting documentation to allow for independent 6 verification by the covered entity. Denials that do not meet predefined criteria would be considered incomplete and not compliant with the timeline requirement. c) Financial Penalties or Interest Provision: Include financial consequences for noncompliance, such as interest accrual on late payments or administrative penalties for repeated failure to meet the 10-day requirement. d) Dispute Resolution Timeline Controls: Clearly define escalation and appeal timelines to prevent delays through extended back-and-forth communication. Dispute processes should not pause the 10-day clock unless formally initiated under defined criteria. e) Standardized Submission Platform and Timestamping: Utilize a centralized, standardized platform that records submission timestamps, confirmation receipts, and decision dates. Automated tracking would provide transparency and enforce measurable turnaround times. f) Performance Reporting and Transparency: Implement publicly reportable performance metrics, including average turnaround time, approval rates, and denial rates by manufacturer. Transparency would incentivize timely compliance. g) Grounds for Removal from the Pilot: If a manufacturer fails to meet the 10-day calendar requirement within a given month, exhibits a pattern of nonresponsive communication to covered entities regarding their inquiries, or demonstrates evidence of inappropriate or excessive denials on valid rebate requests they would be swiftly removed from the pilot. 3. Rebate Denials. We reiterate our request that HRSA abandon any implementation of a rebate model; however, should HRSA move forward with a rebate model, JHHS urges HRSA to implement strict limitations on rebate denials and streamlined, expedient administrative appeals processes for the adjudication of objections to rebate denials. These fundamentals are necessary to safeguard the 340B program and to ensure HRSA maintains its congressionally mandated oversight role. As mentioned above, our experience under the MFP rebate program shows that denials can effectively serve as a loophole for manufacturers to delay or withhold payment, sometimes for up to three months. HRSA must clearly and strictly define the narrow set of cases in which a substantive (as opposed to procedural) denial could be appropriate. HRSA should make clear to manufacturers that they may only deny a covered entitys 340B rebate request when the manufacturer has already correctly applied the MFP rebate, which should be infrequent, given that the MFP is rarely lower than the 340B price. Manufacturers must not be permitted to deny claims based on concerns about 340B program eligibility or diversion or based on generalized or pattern-based 7 assumptions, unsupported concerns, or suspicion. Issues about eligibility and diversion are already governed by the 340B statute. A rebate model should not become a vehicle for manufacturers to self-help. Under the MFP rebate program, compounding the cash flow impacts described above, there is a lack of transparency in manufacturers methodologies for determining 340B status. The resulting GFI process is often lengthy and confusing because the manufacturer demands 340B claim-level data that cannot be produced under our neutral inventory model. The drugs for the claims in dispute were purchased at WAC, and no 340B claims data exists for the transaction. Despite our explanations that such data are not available, we have received standardized or generic responses from the manufacturer, who has continued to request 340B claims data tied to a particular invoice number in their purchase history. To obtain the MFP rebate in those cases, we have had to infer the data requested under the manufacturer-provided invoice number and submit proxy information. This ongoing request from the manufacturer underscores the misalignment between the manufacturers expectations and how claims are identified and tracked under a neutral inventory model. Without such protections, the 340B Rebate Pilot Program risks reproducing the same rebate denial harms we have already experienced under the MFP rebate program. Procedurally, manufacturers should not be allowed to deny a covered entitys 340B rebate request just because the data submission or request contained a minor formatting issue. If a submission or request fails to meet specified technical requirements, the manufacturer should notify the covered entity of the issue upon discovery and allow a time-limited opportunity to correct and promptly resubmit the request instead of immediately denying the rebate request. HRSA should also establish a clear, formal pathway that allows covered entities to challenge rebate delays or denials without having to file an administrative dispute resolution petition, which can take months or years to resolve. Covered entities need a swift, simple, straightforward, agency-governed process to contest manufacturer denials and receive an agency determination within defined timeframes. As explained above, our experience under the MFP rebate program shows that, in the absence of agency-established safeguards, manufacturers can create barriers that make receiving the rebate onerous, confusing, and inefficient. 4. Adverse Impacts of These Additional Costs and Burdens. Cumulative administrative costs and burdens will reduce JHHS capability of utilizing 340B savings as effectively and comprehensively as we have under an upfront discount model. As a result, our patients and community will suffer in meaningful ways. The Johns Hopkins Hospital System partners with community members to identify the most important health needs in the community. For many years, 340B savings have contributed to addressing those and many other needs through innovative programs such as our Community 8 Health Needs Assessment Small Grants program, supportive housing for drug treatment, wraparound social services for unhoused individuals through Marylands Assistance in Community Integration Services, and Break the Cycle Hospital Violence Intervention Program. For example, JHHs total Community Benefit activity in FY25 was $412 million, which is substantially more than JHHs estimated 340B savings of $285.7 million that same year. Additive costs and burdens to the 340B program could force Johns Hopkins to offer fewer comprehensive services, pause or terminate innovative programming, and reduce community support efforts. II. A Rebate Model is Not Needed for Maximum Fair Price (MFP)/340B Nonduplication or to Address 340B Program Integrity Concerns Manufacturers propose rebate models as a supposed mechanism for ensuring program integrity and to fulfil their compliance obligations under the Inflation Reduction Act (IRA). A rebate model is unnecessary for both of those endeavors. 1. Manufacturer Efforts. The manufacturers participating in the Medicare Drug Price Negotiation Program have already developed MFP/340B nonduplication mechanisms for MFP applicability year 2026 through which they can obtain the information they say they need without changing thirty years of precedent. Through Beacon MFP, all IRA drug manufacturers permit covered entities to self- identify or attest to the 340B status of a claim in which the manufacturer had mistakenly deemed as MFP through easy, user-friendly functionality in the Beacon MFP interface (a click of a button), which undermines any position that a rebate model is needed to access claims data to keep statutory violations from recurring. Once a covered entity performs internal verification of 340B eligibility for the claim at issue and self-identifies the 340B status of the claim in Beacon MFP, the action is accepted and treated as final by the manufacturers. This solution makes sense, works efficiently, and provides transparent notice to the manufacturers when a claim relates to a 340B drug. This solution is also consistent with Congresss design for the 340B statute manufacturers must provide statutorily required 340B drug discounts and may only utilize existing statutory mechanisms to address compliance concerns through HRSA. 2. 340B Program Integrity. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure MFP/340B nonduplication. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Johns Hopkins covered entities already utilize vigorous internal processes to ensure strict compliance with 340B program requirements. Introducing a separate rebate mechanism would require new administrative systems, additional staff time, and 9 ongoing reconciliation efforts for manufacturers, payers, and providers. Those administrative costs and operational complexities would far exceed any incremental programmatic benefit, given the existing audit protections that already prevent duplicate discounts. 3. Neutral Third-Party Clearinghouse. If HRSA continues to be concerned about establishing a 340B/MFP nonduplication process, this would be better addressed through a neutral third-party clearinghouse rather than a manufacturer-controlled rebate process. Based on our experience with manufacturers 340B/MFP nonduplication efforts to date through the MFP rebate/Beacon MFP process, we agree with the American Hospital Association (AHA) that viable, lawful, and less burdensome alternatives to a rebate model exist and could achieve the same potential benefits without the undue harms of a rebate model. A neutral clearinghouse could receive the limited data necessary to validate a claims 340B status (e.g., 340B ID and Rx number), apply standardized rules, and communicate a determination without giving manufacturers unilateral authority to withhold rebates or second-guess covered entity compliance processes or determinations. A neutral clearinghouse would also promote greater consistency and efficiency across the 340B program. Instead of each manufacturer establishing its own submission format, validation criteria, and response timelines, covered entities could rely on a single process, minimizing operational costs due to variability and inconsistencies. Most importantly, a neutral clearinghouse would preserve the upfront 340B discount model approved by Congress. Before proposing or piloting a rebate model, HRSA should provide a reasoned explanation for why a third-party clearinghouse is not viable or more costly than a rebate mechanism. For all the reasons noted above, JHHS respectfully recommends that HRSA abandon any attempt to implement a Rebate Program, as such models would place substantial operational and financial burdens on covered entities like JHHS and undoubtedly impede our ability to provide comprehensive services. The costs of any rebate model are sure to vastly outweigh the benefits. Instead, we recommend that HRSA collaborate with impacted stakeholders, including covered entities, to pursue a neutral, third-party clearinghouse to address any program integrity and nonduplication concerns. If, despite these concerns, HRSA continues to advance a Rebate Pilot Program, we hope to have the opportunity to comment on the specifics of the new proposed program. We have attempted to provide as much helpful information as possible in this response to the RFI; however, without precise information about which drugs will be included and many other critical details of a Rebate Program, we are unable to offer a complete accounting of the potential impacts of a future Rebate Program. 10 Thank you for considering our feedback, and we look forward to engaging in a constructive dialogue with you on this important issue. Sincerely, Kevin Sowers, M.S.N., R.N., F.A.A.N. President, Johns Hopkins Health System Executive Vice President, Johns Hopkins Medicine
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See attached file(s) TOIYABE INDIAN HEALTH PROJECT, INC. 250 SEE VEE LANE BISHOP, CALIFORNIA 93514 April 16, 2026 Thomas J. Engels Chantelle Britton Adrninistrator Director, Office of Pharmacy Affairs Health Resources and Services Administration Health Resources and Services Administration 5600 Fishers Lane 5600 Fishers Lane Rockville, MD 20857 Rockville, MD 2085 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) ADMINISTRATION (760) 873-8464 (7601 873-3935 FAX FISCAL 17601 673-6111 (7601 872-8152 FAX CONTRACT CARE (760) 873-6111 (7601 873-7601 FAX OPTICAL 17601 873-6111 BIS1 KIP MEDICAL CLINIC (7601 873-8461 Dear Administrator Engels and Director Britton: (7601 873-3908 FAX PIIARMACY 1760) 873-4721 (7601 873-6127 FAX DENTAL 17601 873-3443 1760) 873-3889 FAX COMMUNITY I lEALTI I NUTRITION/ELDERS 17601 872-2622 1760) 873-6362 FAX On behalf of Toiyabe Indian Health Project, I write in response to I-iRSA's Request for Information regarding a potential 340B rebate model. Our prograrn serves 7 Federally recognized Tribes throughout the Owens Valley located on the Eastern Side of the Sierra Mountains serving Inyo and Mono counties, and is considered extremely rural frontier which relies on the 340B Prograrn to provide access to rnedications and essential health services. PREVENTIVE MEDICINE 17601 873-8851 17601 873-4922 FAX We are concerned that a rebate model would create serious financial challenges for our program. Under this model, we would be required to pay full price for medications FAMILY SERVICES DEPARTMERtfront and wait for reimbursement. Our program does not have the financial reserves to absorb these costs. Any delay in rebate payments would rnake it difficult for us to continue purchasing medications consistently. Under a rebate rnodel, we anticipate increased administrative costs and staff time associated with clairns tracking, rebate submission, and compliance activities. Any delays or denials in rebate payments would create financial uncertainty and could result LONE PINE COMMUNITY CLIthti unrecoverable costs for our program. A rebate model would also increase administrative burden. It would require new work, including tracking claims, submitting rebate requests, managing denials, and handling 73 CAMP ANTELOPE RD. COLEVILLE, CA 96107 need to add staff and shift staff time away from patient care to rnanage these tasks. COLEVILLE CLINIC additional reporting. Our staff and systems are not set up for this, and we would likely 15301 495-2100 (5301 493-2122 FAX These challenges would directly affect our patients. If we cannot afford to purchase medications upfront or experience delays in reimbursement, it could lead to reduced access to medications or delays in care. This would have a serious impact on the patients we serve. FT. INDEPENDENCE INDIAN RESERVATION 810 PINE PAIUTE TRIBE OF LONE PINE ANTELOPE VALLEI' INDIAN COMMUNITY INDEPENDENCE CA THE OWENS VALLEY PAIUTE-SHOSHONE RESERVATION COLEVILLE PAIUTE TRIBE BIG PINE, CA LONE PINE CA COLEVILLE CA BISHOP PAILITE RESERVATION KLITZAD KA^ PAIUTE TRIBE TIMBISHA SHOSHONE TRIBE LITU UTU GWAITLI PAIUTE TRIBE BRIDGEPORT INDIAN RESERVATION BISHOP. CA LEE VINING, C,\ DEATH VALLEY, CA BENTON, CA BRIDGEPORT, CA r7b01 873-6394 760I 873-3254 FAX DIALYSIS CENTER (7601 873-7611 17601 873-3361 FAX w IC PROGRAM 17601 872-3707 17601 873-6362 FAX 1150 S. GOODWIN Lr\NE P. O. BOX 186 LONE PINE. CA 93545 (7601 876-4795 [7601 876-5624 FAX We also do not believe a rebate model would improve program integrity more than the current system. Instead, it would add a burden to providers without a clear benefit. As a Tribal Health Program, we operate under the federal trust responsibility and serve communities that already face barriers to care. If HRSA moves forward with a rebate model, Tribal Health Programs should be fully exempt. For these reasons, Toiyabe Indian Health Project opposes the implementation of a 340B rebate model and urges I-IRSA to maintain the current upfront discount structure. Our concerns are consistent with those raised by bipartisan Members of Congress who have also expressed concern that a rebate model would harm safety-net providers and patients. Thank you for the opportunity to provide comments. Sincerely, Earl W. Lent III CEO Toiyabe Indian Health Project
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Mountain Laurel Medical Center (MLMC) appreciates the opportunity to comment on the proposed 340B Rebate Model Pilot Program. MLMC is a rural Federally Qualified Health Center serving approximately 12,000 patients annually and processing over 125,000 prescriptions, with more than 90% tied to the 340B program. The program is foundational to our ability to provide affordable medications and support over $3 million annually in charity care and patient services. Based on our internal analysis using the NACHC 340B Rebate Drug Cost Impact Calculator, the proposed rebate model would result in a significant increase in upfront drug purchasing costs, with a projected 200% increase for select high-utilization drugs. This would require MLMC to purchase medications at full WAC and wait for reimbursement, creating material cash flow constraints. These changes would directly impact our ability to maintain essential services, including care coordination, Community Health Worker support, behavioral health services, and transportation assistance, which are critical for patient access in our rural service area. The model would also introduce a substantial administrative burden, requiring additional staffing, system upgrades, and ongoing reconciliation efforts. Additionally, delays, denials, and loss of purchasing discounts are expected to result in significant financial losses that cannot be absorbed within our current operating structure. These combined impacts would limit our ability to provide discounted medications at the point of care and maintain access for uninsured and underinsured patients. For these reasons, MLMC strongly urges HRSA to exempt Community Health Centers from participation in any 340B rebate model pilot. ph: 301.533.3300 fax: 833.448.0361 1027 Memorial Drive Oakland, MD 21550 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Western Maryland Health Care Corporation, doing business as Mountain Laurel Medical Center (MLMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has allowed our organization to conduct a focused review of the operational and financial implications of the proposed 340B Rebate Model Pilot Program. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: MLMC anticipates a loss of more than $1 million from entity-owned pharmacy operations and an approximately 25% reduction in savings from contract pharmacy arrangements due to the administrative burden of manual reconciliation and reimbursement delays. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. MLMC is a rural Federally Qualified Health Center serving approximately 12,000 patients annually across Western Maryland and adjacent West Virginia counties. We provide integrated primary care, behavioral health, and pharmacy services in communities where access to care remains limited. MLMC processes approximately 125,000 annual prescriptions, with over 90% attributable to the 340B program across both in-house and contract pharmacy arrangements. The program is foundational to our ability to sustain access to care. 2 Approximately 510% of our patient population is uninsured, with a significantly larger portion classified as underinsured and reliant on subsidized care. MLMC provides over $3 million in charity care annually, reflecting the ongoing financial barriers patients face in our service area. 340B program savings are reinvested directly into patient care and access, including: Sliding fee discounts for medications and services, ensuring affordability at the point of care. Expansion of behavioral health services and care coordination to address gaps in access and continuity of care. Support for pharmacy operations in rural communities where local access to medications is limited. School-based and community-based health programs that bring care closer to where patients live and learn. Enabling services such as transportation support, care navigation, and outreach efforts that help patients overcome barriers to accessing care. These services are critical to overcoming the geographic, financial, and logistical barriers common in rural communities. Despite these reinvestments, the proposed rebate model introduces material financial risk. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MLMC, this change directly impacts: Over 12,000 patients served annually, including a high proportion of underinsured individuals Approximately 125,000 annual prescriptions, with more than 90% tied to the 340B program A program that supports over $3 million annually in charity care, behavioral health services, and medication access for financially vulnerable patients This model introduces a fundamental change in cash flow dynamics that is not aligned with the financial structure of rural FQHCs. Unlike large health systems, MLMC operates with limited liquidity and relies on the predictability of upfront 340B pricing to sustain operations. 3 Requiring upfront WAC purchasing effectively shifts financing responsibility from manufacturers to safety-net providers. This creates immediate working capital pressure and introduces risk that directly affects patient access. For these reasons, MLMC strongly urges HRSA to exempt community health centers from participation in any 340B rebate model pilot. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MLMC provides over $3 million in charity care, including sliding-fee discounts on medications and medical services. These resources are directly reinvested to support patient access. Under a rebate model, cash flow constraints and reimbursement delays would significantly limit our ability to sustain this level of financial assistance. Staffing Impact: MLMC anticipates needing at least 2 additional FTEs to support operational, regulatory, and compliance requirements for rebate tracking, reconciliation, and reporting. This increase in administrative staffing represents a direct increase in overhead expenses, requiring the reallocation of resources that would otherwise support clinical services and patient care. External Vendor Costs: Given increased complexity, MLMC anticipates an increase of approximately $50,000$150,000 annually in costs for external support vendors. These include third-party administrators, pharmacy and EMR system enhancements, and compliance support required to manage manufacturer-specific rebate processes. These additional costs further compound financial pressure and reduce available resources for patient-facing services. 6 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 For MLMC, given our current prescription volume of approximately 125,000 annually, we anticipate the need for at least 2 additional FTEs to support rebate tracking, reporting, reconciliation, and dispute resolution. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Based on current market conditions, MLMC estimates the cost to support these additional roles to exceed $150,000 annually, inclusive of salary and benefits. These additional staffing requirements represent a direct increase in administrative overhead and require reallocating financial resources that would otherwise support patient-facing services. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs nationwide will face an increased administrative burden in monitoring rebate claims and payments. Given MLMCs prescription volume and the complexity of manufacturer-specific requirements, we estimate that approximately 1015 hours per week will be required to report and reconcile rebate claims. The lack of standardization across manufacturers will require the use of multiple internal systems and workflows to manage similar data, significantly increasing administrative burden, inefficiency, and cost. MLMC urges HRSA to require uniformity among eligible manufacturers to mitigate unnecessary administrative complexity and ensure timely, accurate rebate processing. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: MLMC anticipates significant upfront costs to adapt pharmacy systems, implement custom reporting capabilities, and redesign internal workflows 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 to meet rebate tracking requirements. We estimate these one-time costs to be approximately $50,000$100,000, representing the baseline investment required before any rebate is realized. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For MLMC, which serves approximately 12,000 patients annually, the projected increase in expensesincluding labor, IT infrastructure, and carrying costsis estimated to exceed $500,000. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This includes aligning real-time dispensing data with wholesaler purchasing records and manufacturer rebate requirements. Given our current environment, where pharmacy purchasing, 340B replenishment, and inventory tracking already require daily monitoring and reconciliation, this introduces an additional layer of system dependency and complexity. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Based on current estimates, these one- time costs are expected to exceed $75,000, with no guarantee of full system interoperability across all required platforms. Ongoing Resource Diversion: Beyond initial build costs, the rebate model introduces a continuous administrative burden. Staff who currently support clinical pharmacy operations and inventory management will be required to dedicate an estimated 1015 hours per week to manually reconciling Purchase Files and Price Files, ensuring rebate accuracy and compliance. This represents a shift away from patient-centered services toward administrative oversight, with no corresponding increase in patient care capacity. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with over 100 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 11 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in our tri-county area of Garrett, Allegany, and Preston counties in Maryland and West Virginia with no affordable 8 medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed cost- effectively to reflect the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At MLMC, we apply multiple approaches to ensure patients can access the medications and services they need, including sliding fee discounts, co-sliding adjustments, pharmacy-specific sliding fee discount programs, and fee waivers when necessary and requested. These are applied in real time based on each patients financial circumstances. MLMC is committed to serving patients regardless of their ability to pay. In practice, this means routinely providing discounted or no-cost medications for both uninsured and underinsured patients who would otherwise face barriers to access due to cost. The ability to provide these discounts depends on predictable, upfront 340B pricing. A rebate- based model introduces uncertainty in both timing and reimbursement, making it operationally difficult to determine appropriate patient pricing at the point of sale. As a result, MLMCs ability to consistently apply its sliding-fee and pharmacy-discount programs would be significantly constrained. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost approximately $375,000 to purchase these 10 high-utilization drugs under the proposed rebate model. Currently, our organization spends approximately $125,000 to purchase these same drugs at the 340B ceiling price. This represents a 200% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MLMC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, MLMC would be forced to scale back non-revenue-generating but essential services, including care coordination, Community Health Worker (CHW) support, and transportation assistance. Transportation, in particular, is a critical component of access in our service area, where many patients rely on MLMC-supported transportation to attend appointments and obtain medications. These services are essential to helping patients navigate care, manage chronic conditions, and maintain continuity of treatment in a rural setting. Operating Hours: We anticipate needing to reduce clinic availability by approximately 48 hours per week, primarily affecting extended hours such as evenings and limited weekend access. These hours are often the only times patients can seek care without missing work or losing income. Workforce & Staffing: The administrative burden of this pilot requires a shift in resources away from clinical staffing. For every additional administrative role required to manage rebate tracking and compliance, MLMC reduces its ability to support patient-facing roles such as Community Health Workers, care coordination staff, behavioral health providers, and transportation support services, resulting in longer wait times and reduced access to care. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our approximately 10% uninsured patients from rationing their insulin or heart medication. 12 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. MLMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, MLMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $200,000$400,000, inclusive of potential rebate denials and the loss of purchase-based discounts. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Based on current utilization of the selected drugs, MLMC estimates that purchasing these medications at WAC rather than 340B ceiling prices would increase our upfront monthly drug spend by approximately $150,000$250,000, depending on the drug mix and the timing of purchases. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To operate under a rebate model, MLMC would need to rely on a line of credit or draw down limited reserves to maintain drug inventory. This is not sustainable. The associated interest expense is estimated at approximately $25,000 $75,000 annually, reducing funds currently used to support sliding fee discounts, pharmacy access, behavioral health services, care coordination, and enabling services such as transportation and patient navigation. This approach shifts financing responsibility from manufacturers to safety-net providers. For MLMC, which serves as a primary access point for care in a rural region, any liquidity constraint directly limits our ability to address financial, geographic, and access barriers faced by our patients. 13 Reduced liquidity results in longer wait times, reduced service availability, and a diminished ability to provide discounted medications and services at the point of care. In our region, where patients have no choice but to rely on MLMC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays MLMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $150,000-$200,000 in annual unrecoverable costs. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 15 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MLMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MLMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 16 MLMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot and looks forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact James Mou, Chief Financial Officer, jwmou@mtnlaurel.org. Sincerely, Michelle Dixon, CEO Mountain Laurel Medical Center mdixon@mtnlaurel.org 4/17/2026
HRSA-2026-0001-1647Center for Family and Child Enrichment2026-04-17T04:00Z4,217 chars
See attached file(s) Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of the Center for Family and Child Enrichment (CFCE), I appreciate the opportunity to provide comments regarding HRSAs Request for Information on the proposed 340B rebate model pilot program. CFCE is a federally qualified health centeraffiliated organization serving more than 5,000 children and families annually throughout Miami-Dade County through integrated primary care, pediatrics, womens health, behavioral health, nutrition, and supportive family services. Our newly launched physician-led in-house medication dispensing program was established to improve medication access, reduce treatment delays, and ensure affordable same-day access for underserved patients. As a newly operational dispensing site, we do not yet have sufficient historical financial data, dispensing trends, or claims volume metrics to provide quantitative analysis. However, even at this early stage, we can clearly identify several significant concerns the proposed rebate-based model may create for organizations like ours. 1. Cash Flow and Medication Access Concerns The current 340B model allows covered entities to realize savings at the point of purchase, which is especially critical for startup and emerging dispensing programs. Requiring upfront full-cost acquisition with delayed manufacturer rebates would create immediate cash-flow strain. For a newly launched site like CFCE, this could: slow formulary expansion limit our ability to stock higher-cost chronic disease medications reduce flexibility in maintaining adequate on-site inventory delay expansion into additional service lines jeopardize same-day dispensing for patients who rely on immediate access These challenges could directly undermine the purpose of our in-house dispensing model, which is to remove barriers to care. 2. Administrative and Operational Burden A rebate-based model would also introduce significant administrative complexity for small and emerging safety-net programs. This includes the need for: enhanced claim-level tracking and reporting duplicate discount prevention workflows manufacturer rebate reconciliation dispute resolution processes expanded audit documentation IT system modifications and staff training For organizations in the early stages of implementation, these additional workflows may divert limited staff resources away from direct patient care and operational growth. 3. Impact on Vulnerable Patient Populations CFCEs patients often face barriers related to transportation, affordability, childcare responsibilities, and inconsistent access to healthcare resources. Our in-house dispensing model was intentionally designed to allow patients to leave their visit with medications in hand. Any model that delays savings realization, complicates replenishment, or limits medication availability may reduce our ability to provide this seamless access, ultimately placing vulnerable families at greater risk for treatment interruption and poor outcomes. 4. Consideration for Newly Launched Covered Entity Programs HRSA should carefully consider the disproportionate impact this proposed model may have on newly launched physician-led FQHC dispensing programs, which are still building inventory, operational infrastructure, and sustainable workflows. Preserving upfront 340B savings at the point of purchase remains essential to supporting the long-term success of emerging safety-net dispensing sites and ensuring continued patient access. Thank you for the opportunity to provide input on this important issue. CFCE strongly encourages HRSA to consider the operational realities of startup and newly launched covered entities before implementing any rebate-based pilot that may unintentionally reduce medication access for underserved communities. Sincerely, Tomara Mays Chief Executive Officer Center for Family and Child Enrichment
HRSA-2026-0001-1648Indiana Hospital Association2026-04-17T04:00Z7,262 chars
Please see the Indiana Hospital Association's comments attached re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042. 500 North Meridian St. Suite 250 Indianapolis, IN 46204 Advocating for Hospitals Since 1921 317-633-4870 IHAconnect.org The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Indiana Hospital Association (IHA) and our more than 160 hospital members across Indiana, we are grateful for the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information (RFI): 340B Rebate Model Pilot Program. Among other things, the RFI asks whether HRSA should implement a rebate model under the 340B Program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Indianas 340B hospitals that far outweigh any benefits that might come from it. HRSAs own calculations of the costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug manufacturers when choosing a discount mechanism. In reality, HRSA must give primacy to the congressional intent of the 340B Program and the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Indianas 340B hospitals have relied on for years, is the best way to fulfill the purpose of the 340B Program which Indiana 340B hospitals use to provide comprehensive health care services for vulnerable patients, even when government reimbursement does not cover the cost of care. First and foremost, for Indianas 340B hospitals, a rebate model means more claims to submit, more rebates to track and reconcile, more money that they will need to float to drug manufacturers while they await their statutory discount, more likely disputes over delays and denials, and therefore less money that Indianas 340B hospitals can spend on patient care. 500 North Meridian St. Suite 250 Indianapolis, IN 46204 Advocating for Hospitals Since 1921 317-633-4870 IHAconnect.org Any rebate program would require Indianas 340B hospitals to spend significant sums on new administrative costs as well. When Indianas 340B hospitals chose to participate in the 340B Program, they understood that they would incur some reasonable administrative costs. They designed hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our 340B members that go far beyond what they had expected and planned for as a 340B hospital. Further, Indianas 340B hospitals have designed their technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force them to incur significant costs to change those systems. Most importantly, though, unlike the existing upfront discount mechanism, any rebate mechanism will force Indianas 340B hospitals to effectively provide drug manufacturers with interest-free loans as those hospitals await the discounts that they are owed under the 340B statute. Even if drug manufacturers paid within the 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on Indianas 340B hospitals and the patients they serve and the rebate mechanism will inevitably lead to withheld payments and disputes. Notably, a recent report analyzing data from 70 Indiana hospitals shows hospitals delivered more than $717 million in care in 2025 that went unpaid as insurers delayed or denied paymentswhile continuing to raise premiums and out-of-pocket costs for Hoosiers. IHA estimates that if all Indiana hospitals were included in the dataset, total unpaid care would exceed $1.6 billion statewide for one year alone. The findings reveal a widening gap between what insurers collect from patients and employers, and what hospitals are ultimately paid for care delivered. IHA expects similar trends would occur in any rebate model that does not require upfront discounts. In Indiana, 340B hospitals use the upfront 340B discounts to provide no- or low-cost access to prescriptions for uninsured and under-insured patients; support key service lines, such as behavioral health services, oncology care, and obstetrics, which meet high community needs but require large financial commitments; offer care-transition education programs to help prevent hospital readmissions and medication-related issues; support essential transportation services to remove barriers to access; and more. Even with the current 340B discounts, though, 16 obstetrics units have closed across Indiana since 2020, the highest rate in the nation, due to low government reimbursement and ongoing insurer delay and denial tactics that make operating obstetrics units unsustainable. IHA is deeply concerned that any rebate mechanism will delay 340B savings further and exacerbate these trends. 500 North Meridian St. Suite 250 Indianapolis, IN 46204 Advocating for Hospitals Since 1921 317-633-4870 IHAconnect.org Finally, regarding duplicate discounts, HRSA has already made clear that drug manufacturers have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Indianas 340B hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug manufacturers over those of covered entities, their patients, and the communities they serve. Likewise, IHA supports the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, HRSA could adopt a third- party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, IHA respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. Thank you for your consideration, and IHA looks forward to working with HRSA on this important issue, which has profound implications for Indianas 340B hospitals, and most importantly, the patients they serve. Please do not hesitate to contact me if you have any questions. Sincerely, Laura Brown Deputy General Counsel Indiana Hospital Association
HRSA-2026-0001-1649Oak Orchard Community Health Center2026-04-17T04:00Z31,855 chars
See attached file(s) 04/13/2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Oak Orchard Community Health Center, Inc. (OOH)and the 35,930 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Oak Orchard Community Health Center is a Federally Qualified Health Center (FQHC) and Patient Centered Medical Home (PCMH) across Genesee, Orleans, Monroe, Wyoming, and Steuben counties, present across ten sites, a mobile medical unit and a mobile dental unit. At OOH it is our mission to cultivate patient-centered wellness leveraging preventative care tactics by taking a whole-person approach. Currently, OOH offers Primary Care, Behavioral Health, Dental and Optical services in Monroe County at our Brockport location as well as Medical, Behavioral Health and Dental services at our Albion, Hornell and Warsaw locations, all our sites offer Primary Care and Behavioral Health services. We are committed to serving our communities regardless of age, race, gender-identity, sexual-orientation and socio-economic status. The OOH service area covers rural and underserved communities with many of our patients being low-income and facing barriers to care. We strive to meet the needs of our communities through various programs, such as our Sliding Fee Discount Program for those facing financial barriers, transportation services to our care sites, acceptance of Medicaid, and the use of mobile units to ensure access to care. At Oak Orchard Health, it is our mission to cultivate patient-centered health and wellness by providing engaged and innovative health care for our community. We believe that all areas of care are just as important as one another, we strive to curate an innovative community-focused network that delivers holistic, inclusive and culturally competent care for all. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of $800,000 to $2 million from a 25% reduction in savings] for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Oak Orchard Community Health Center strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For OOH, a 340B Rebate Model Pilot Program will impact: 3,000 to 5,0000 low-income and uninsured patients served Our ability to provide dental care, SUD treatment, mental health services, school-based health programs, care coordination, case management, direct patient care, strengthening the workforce, expanding services, covers losses for patients who utilize sliding-fee services, provide supports such as housing, transportation, food assistance, other enabling services not traditionally reimbursable. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire 2-3 additional staff (costing about $100,000-$125,0000) to manage the process. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We anticipate an increase in costs for external support vendors, including 340B consultants, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Oak Orchard Community Health Center helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as implementing all services lines at all locations, as well as decrease funding for patient supportive services such as care coordination and transportation assistance. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Oak Orchard Community Health Center strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Chetna Chandrakala cchandrakala@oochc.org. Sincerely, Chetna Chandrakala Chief Financial Officer Oak Orchard Community Health Center cchandrakala@oochc.org 04/13/2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Oak Orchard Community Health Center, Inc. (OOH)and the 35,930 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Oak Orchard Community Health Center is a Federally Qualified Health Center (FQHC) and Patient Centered Medical Home (PCMH) across Genesee, Orleans, Monroe, Wyoming, and Steuben counties, present across ten sites, a mobile medical unit and a mobile dental unit. At OOH it is our mission to cultivate patient-centered wellness leveraging preventative care tactics by taking a whole-person approach. Currently, OOH offers Primary Care, Behavioral Health, Dental and Optical services in Monroe County at our Brockport location as well as Medical, Behavioral Health and Dental services at our Albion, Hornell and Warsaw locations, all our sites offer Primary Care and Behavioral Health services. We are committed to serving our communities regardless of age, race, gender-identity, sexual-orientation and socio-economic status. The OOH service area covers rural and underserved communities with many of our patients being low-income and facing barriers to care. We strive to meet the needs of our communities through various programs, such as our Sliding Fee Discount Program for those facing financial barriers, transportation services to our care sites, acceptance of Medicaid, and the use of mobile units to ensure access to care. At Oak Orchard Health, it is our mission to cultivate patient-centered health and wellness by providing engaged and innovative health care for our community. We believe that all areas of care are just as important as one another, we strive to curate an innovative community-focused network that delivers holistic, inclusive and culturally competent care for all. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of $800,000 to $2 million from a 25% reduction in savings] for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Oak Orchard Community Health Center strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For OOH, a 340B Rebate Model Pilot Program will impact: 3,000 to 5,0000 low-income and uninsured patients served Our ability to provide dental care, SUD treatment, mental health services, school-based health programs, care coordination, case management, direct patient care, strengthening the workforce, expanding services, covers losses for patients who utilize sliding-fee services, provide supports such as housing, transportation, food assistance, other enabling services not traditionally reimbursable. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices. This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire 2-3 additional staff (costing about $100,000-$125,0000) to manage the process. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Oak Orchard Community Health Center helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as implementing all services lines at all locations, as well as decrease funding for patient supportive services such as care coordination and transportation assistance. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Oak Orchard Community Health Center strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Chetna Chandrakala cchandrakala@oochc.org. Sincerely, Chetna Chandrakala Chief Financial Officer Oak Orchard Community Health Center cchandrakala@oochc.org
HRSA-2026-0001-1650Battenkill Valley Health Center, Inc.2026-04-17T04:00Z1,542 chars
Dear Director Britton: The 340B program is foundational to Community Health Centers (CHC) ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to safety-net providers, like ours, threatens CHCs in many ways: Cash Flow Strain: This model requires upfront purchases at full cost (WAC) with delayed rebates. This reduces immediate access to 340B savings that fund operations and safety net services to vulnerable populations. Without this cashflow, services are at risk. Revenue Uncertainty: This model creates unpredictability in 340B income and budgeting as rebates are not guaranteed while adding complex claim-level tracking, submission, and reconciliation processes, which small CHCs like BVHC cannot support without hiring additional staffing. This poses a financial hardship given our thin margins. Operational & IT Complexity: This model will require enhanced data integration across EMR, pharmacy, and TPA systems. This is another financial hit to an already thin margin. We hope that you can understand how this change will have a disproportionate impact on small health centers like BVHC. With limited resources, will need to absorb delayed rebates and added costs. We fear that implementation of this model will have a large impact on the way community health centers can serve vulnerable populations. We respectfully request that you consider exempting CHCs from this model. With respect, Kayla Davis, MSW, CEO Battenkill Valley Health Center Arlington, VT
HRSA-2026-0001-1651University Hospitals of Cleveland2026-04-17T04:00Z16,051 chars
University Hospitals of Cleveland RFI submission regarding 340B Rebate Model April 17th, 2026 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives Health Resources and Services Administration (HRSA) 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Our organization, which operates several 340B covered entities, appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding the potential implementation of a 340B rebate model. We strongly urge HRSA to abandon the pursuit of a rebate-based framework and instead maintain the traditional up-front discount model that has successfully operated for over 30 years. As an entity committed to stretching scarce Federal resources as far as possible to reach eligible patients, we believe the proposed shift to a rebate model would fundamentally undermine the 340B Programs statutory intent. Our opposition is based on the significant administrative burdens, financial risks, and potential for reduced patient access described below. I. Prohibitive Administrative and Operational Burdens The transition from an up-front discount to a rebate model would impose substantial incremental costs on covered entities. Staffing and Labor Reallocation: Implementing a rebate system would require several additional full- time employees (FTEs) to manage the complex tasks of claims processing, data submission, and rebate reconciliation. We are deeply concerned that this would force us to reallocate current medical provider work hours from direct patient care to performing administrative functions. Requiring safety net hospitals to incur these additional expenses simply to arrive at the same discounted pricing they receive today is both counterintuitive and inefficient. These added layers of cost and complexity will divert critical resources away from patient care, ultimately undermining the programs intent to support serving the most vulnerable populations. Infrastructure and IT Costs: We would be required to procure or develop new IT systems and software capable of tracking 340B transactions in a "buy-high, rebate-later" environment. These estimated costs for system development and recurring maintenance represent significant financial waste that drives up the cost of healthcare in the United States. Kevin Cunningham RPh Vice President, Pharmacy Services University Hospitals of Cleveland 4510 Richmond Road Warrensville Hts., OH 44128 Ancillary Costs: Beyond staffing and IT, we anticipate a rise in secondary expenses, including specialized legal reviews, training for pharmacy staff, and third-party consulting services to ensure compliance with manufacturer-specific rebate plans. Hospitals in the United States spend a significant amount of money to combat denials from Managed Care Payors. To be sure, we are seeing initial claim denial rates between 16 and 20 percent, whilst our final denial rate is less than 1%. Therefore, in this space we spend a lot of money overcoming frivolous denials of claims and hence this is a waste to the Healthcare System at large. We anticipate very similar behavior on the part of Pharmaceutical companies in an effort to improve their earnings and stock price. We cannot afford the staff and technology that is required to overcome a high level of initial denials and therefore the rebate program would add more waste to the System. UH Projected Labor/IT Costs To Effectively Manage Claim Specific 340B Rebate Model We anticipate that the majority of 340B rebate claims could be managed through automated processes. However, a varying percentage of claims will require manual review and follow-up (exceptions). The table below represents University Hospitals projected staffing cost dependent on the number of exception claims. Min Mid Max Staffing Cost Increase $5,017,732 $8,479,588 $18,865,158 Additional IT applications and implementation expense: $300,000 - $500,000 (annual) II. Severe Cash Flow Disruptions and Financial Risk The traditional 340B model provides an immediate discount at the time of purchase. Replacing this with a rebate model would create a dangerous "float" that threatens our financial stability. Delayed Access to Savings: Under a rebate model, covered entities must purchase drugs at a higher initial price and then wait for a rebate to reflect the 340B ceiling price. Even if HRSA mandates a 10- calendar-day payment window, this delay still forces covered entities to front the capital, creating significant cash-flow pressure. Alteration of Wholesaler Terms: Our current drug wholesaler contracts are built around up-front discounts. A shift to rebates would alter these payment timings and could result in the loss of prompt- payment incentives currently offered by wholesalers. III. Risks Associated with Rebate Denials A rebate model introduces a new point of failure in the 340B Program: the manufacturers ability to deny rebate requests. Arbitrary Guardrails: We are concerned that manufacturers may implement overly restrictive "guardrails" or documentation requirements that serve as barriers to receiving the statutory ceiling price. Resource-Intensive Adjudication: Improper denials would necessitate a complex and time- consuming adjudication process. The administrative burden of auditing manufacturer denials and providing rationale for claims would fall disproportionately on covered entities. UH Projected Total Annual System Loss The table below includes the increased labor expense, IT expense, 340B denial expense increase, decreased interest income and increased borrowing interest expense. Min Mid Max Total System Loss $(50,119,462) $(53,996,741) $(65,628,579) IV. Negative Impact on Patient Access and Program Integrity The ultimate cost of a rebate model is borne by the patients we serve. Employees will also feel the impact. To offset the significant added expense, employers will need to implement reductions in workforce Reduction in Services and loss of jobs: The combination of increased administrative costs and decreased cash flow will likely lead to reductions in workforce and in the comprehensive services we currently offer to our community. Patient Access Challenges: We anticipate specific negative impacts on patient access to drugs if the financial strain of fronting high drug costs forces us to limit the formulary or reduce the number of contract pharmacy locations. Data Privacy Concerns: A rebate model would require the submission of detailed pharmacy and medical claims data to third-party manufacturers or vendors. This raises significant privacy and security concerns regarding sensitive patient information. UH Projected Program Reduction/Elimination The majority of outpatient pharmacy services, including clinical and financial support programs were funded mainly by 340B savings. The programs listed below would be significantly reduced or eliminated if a 340B rebate model is implemented: Financial assistance for patients unable to afford medication Medication access team- navigate insurance requirements/remove financial barriers Patient engagement team- outreach to manage refills and drive adherence to therapy Clinical services- pharmacists in providers offices, ongoing care management While HRSA suggests a rebate model might assist in preventing duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP), we believe these goals can be achieved through existing program integrity efforts without dismantling the discount structure. The potential benefits of a rebate pilotsuch as increased transparencyare vastly outweighed by the certain operational and financial costs to participants. We urge HRSA to honor its commitment to "minimal impact on 340B covered entities" and decline to pursue a 340B Rebate Model Pilot Program. Sincerely, University Hospitals Health System, Inc. Kevin Cunningham RPh/VP Pharmacy Services April 17th, 2026 Kevin Cunningham RPh Vice President, Pharmacy Services University Hospitals of Cleveland 4510 Richmond Road Warrensville Hts., OH 44128 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives Health Resources and Services Administration (HRSA) 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Our organization, which operates several 340B covered entities, appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding the potential implementation of a 340B rebate model. We strongly urge HRSA to abandon the pursuit of a rebate-based framework and instead maintain the traditional up-front discount model that has successfully operated for over 30 years. As an entity committed to stretching scarce Federal resources as far as possible to reach eligible patients, we believe the proposed shift to a rebate model would fundamentally undermine the 340B Programs statutory intent. Our opposition is based on the significant administrative burdens, financial risks, and potential for reduced patient access described below. Prohibitive Administrative and Operational Burdens The transition from an up-front discount to a rebate model would impose substantial incremental costs on covered entities. Staffing and Labor Reallocation: Implementing a rebate system would require several additional full-time employees (FTEs) to manage the complex tasks of claims processing, data submission, and rebate reconciliation. We are deeply concerned that this would force us to reallocate current medical provider work hours from direct patient care to performing administrative functions. Requiring safety net hospitals to incur these additional expenses simply to arrive at the same discounted pricing they receive today is both counterintuitive and inefficient. These added layers of cost and complexity will divert critical resources away from patient care, ultimately undermining the programs intent to support serving the most vulnerable populations. Infrastructure and IT Costs: We would be required to procure or develop new IT systems and software capable of tracking 340B transactions in a "buy-high, rebate-later" environment. These estimated costs for system development and recurring maintenance represent significant financial waste that drives up the cost of healthcare in the United States. Ancillary Costs: Beyond staffing and IT, we anticipate a rise in secondary expenses, including specialized legal reviews, training for pharmacy staff, and third-party consulting services to ensure compliance with manufacturer-specific rebate plans. Hospitals in the United States spend a significant amount of money to combat denials from Managed Care Payors. To be sure, we are seeing initial claim denial rates between 16 and 20 percent, whilst our final denial rate is less than 1%. Therefore, in this space we spend a lot of money overcoming frivolous denials of claims and hence this is a waste to the Healthcare System at large. We anticipate very similar behavior on the part of Pharmaceutical companies in an effort to improve their earnings and stock price. We cannot afford the staff and technology that is required to overcome a high level of initial denials and therefore the rebate program would add more waste to the System. UH Projected Labor/IT Costs To Effectively Manage Claim Specific 340B Rebate Model We anticipate that the majority of 340B rebate claims could be managed through automated processes. However, a varying percentage of claims will require manual review and follow-up (exceptions). The table below represents University Hospitals projected staffing cost dependent on the number of exception claims. Additional IT applications and implementation expense: $300,000 - $500,000 (annual) Severe Cash Flow Disruptions and Financial Risk The traditional 340B model provides an immediate discount at the time of purchase. Replacing this with a rebate model would create a dangerous "float" that threatens our financial stability. Delayed Access to Savings: Under a rebate model, covered entities must purchase drugs at a higher initial price and then wait for a rebate to reflect the 340B ceiling price. Even if HRSA mandates a 10-calendar-day payment window, this delay still forces covered entities to front the capital, creating significant cash-flow pressure. Alteration of Wholesaler Terms: Our current drug wholesaler contracts are built around up-front discounts. A shift to rebates would alter these payment timings and could result in the loss of prompt-payment incentives currently offered by wholesalers. Risks Associated with Rebate Denials A rebate model introduces a new point of failure in the 340B Program: the manufacturers ability to deny rebate requests. Arbitrary Guardrails: We are concerned that manufacturers may implement overly restrictive "guardrails" or documentation requirements that serve as barriers to receiving the statutory ceiling price. Resource-Intensive Adjudication: Improper denials would necessitate a complex and time-consuming adjudication process. The administrative burden of auditing manufacturer denials and providing rationale for claims would fall disproportionately on covered entities. UH Projected Total Annual System Loss The table below includes the increased labor expense, IT expense, 340B denial expense increase, decreased interest income and increased borrowing interest expense. Negative Impact on Patient Access and Program Integrity The ultimate cost of a rebate model is borne by the patients we serve. Employees will also feel the impact. To offset the significant added expense, employers will need to implement reductions in workforce Reduction in Services and loss of jobs: The combination of increased administrative costs and decreased cash flow will likely lead to reductions in workforce and in the comprehensive services we currently offer to our community. Patient Access Challenges: We anticipate specific negative impacts on patient access to drugs if the financial strain of fronting high drug costs forces us to limit the formulary or reduce the number of contract pharmacy locations. Data Privacy Concerns: A rebate model would require the submission of detailed pharmacy and medical claims data to third-party manufacturers or vendors. This raises significant privacy and security concerns regarding sensitive patient information. UH Projected Program Reduction/Elimination The majority of outpatient pharmacy services, including clinical and financial support programs were funded mainly by 340B savings. The programs listed below would be significantly reduced or eliminated if a 340B rebate model is implemented: Financial assistance for patients unable to afford medication Medication access team- navigate insurance requirements/remove financial barriers Patient engagement team- outreach to manage refills and drive adherence to therapy Clinical services- pharmacists in providers offices, ongoing care management While HRSA suggests a rebate model might assist in preventing duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP), we believe these goals can be achieved through existing program integrity efforts without dismantling the discount structure. The potential benefits of a rebate pilotsuch as increased transparencyare vastly outweighed by the certain operational and financial costs to participants. We urge HRSA to honor its commitment to "minimal impact on 340B covered entities" and decline to pursue a 340B Rebate Model Pilot Program. Sincerely, University Hospitals Health System, Inc. Kevin Cunningham RPh/VP Pharmacy Services
HRSA-2026-0001-1652Abbeville Area Medical Center2026-04-17T04:00Z21,859 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Abbeville Area Medical Center in Abbeville, SC we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Abbeville Area Medical Center in Abbeville, SC that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Abbeville Area Medical Center in Abbeville, SC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Abbeville Area Medical Center in Abbeville, SC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that 2 Abbeville Area Medical Center in Abbeville, SC can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Abbeville Area Medical Center in Abbeville, SC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Abbeville Area Medical Center in Abbeville, SC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The organization at a minimum would have to hire 2 full-time employees to accurately track and submit rebate requests. If full-time employees were not hired, then a third-party administrator would need to be contracted to track rebates but a person at the organization would need to take 20 hours per week making sure that we are receiving the rebates and everything is correct with the third-party administrator. Total increase in administrative costs with either option would be at a minimum of $200,000 per year. The $200,000 minimum increase is based on the acquisition of 2 FTEs that would include salary and benefits. As an organization we have already looked at a third- party administrator that could help with rebate identification and their services were $125,000 for a year. Additional costs would be time for an employee to verify rebates identified by the third-party administrator. The key cost drivers would be increased staffing, diverting current staff, IT systems, third-party vendors, compliance monitoring, labor hours, and the process for challenging denials. Although the current TPAs the organization uses will not institute a charge for the rebate model, it does take labor hours to gather the information needed from the TPAs to submit the required details for the rebate model. As stated previously, the organization explored a service that could help monitor rebates, but the initial cost would be $125,000 along with a monthly fee. The biggest function of these incremental costs would cover reconciliation, claims processing, data submission, challenging denials, and audit support. Reconciliation 3 is the biggest concern with the increased administration cost. There are thousands of prescriptions that are run daily and a person or TPA would need to verify the rebate had been performed. The organization has already had to confer with the legal team to review the terms and conditions associated with a platform like Beacon which takes away from time they could be performing other tasks. The new 2 FTEs mentioned previously would need to be trained in 340B and the rebate model. The associated increase in costs will likely hurt medication access for patients in the community since the increase in costs will come from the 340B budget that is used to offset patients copays. These costs will cause a recurring issue with providing the best patient care and cause an increase in readmissions. These increased administrative costs would take approximately 10% of the organizations current marginal savings on the 10 IRA medications subject to the rebate model. The approximation does not consider the decreased reimbursements the organization is already seeing for the 10 IRA medications. Further administration costs will likely affect patient care as the organization will not be able to take the financial burden to offset patients medication costs. Staffing Impacts Under a Potential 340B Rebate Program. Abbeville Area Medical Center in Abbeville, SC does not currently have the staff needed to comply with a Rebate Program. The rebate model would require 2 FTEs to perform administrative functions. This would cost a minimum of $200,000 for salary and benefits. This would also take hours away from current staff to perform tasks. Staff that are currently in clinical roles but have 340B experience will need to reallocate work hours associated with their clinical work to work related to the 340B rebate program. The FTEs responsibilities would be to identify 340B prescription eligibility, submit rebate requests, reconcile rebate requests, investigate short-paid or denied rebates, and track outstanding receivables. This is not a batch task that can be done in one sitting. These are processes that need to be monitored continuously. It takes our organization approximately 60 days from onboarding to being able to work independently. 4 The estimate of 2 hours per week in additional work is a gross underestimate of what will need to be implemented to perform the requirements needed of the rebate program. For an example, if a pharmacy fills 2,000 prescriptions per day, and 1% is denied, it is safe to assume a minimum of 5 minutes of time to reconcile the prescription will be needed, not including submitting information for a rebate denial. This is already 2 hours a day not 2 hours a week. Furthermore, this is just an example for a denial, it does not consider time needed to track rebate reconciliation. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Abbeville Area Medical Center in Abbeville, SC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Unlike contract pharmacies that use TPAs, in house pharmacies must directly integrate our EHR and pharmacy management system (PMS) with a complex new rebate infrastructure. The entity would have to integrate rebate data into our PMS to accurately determine our financial reports for our in-house pharmacy. We anticipate an estimated $125,000 one-time integration cost to pay a software vendor for custom API builds and price file reconciliation tools. The entitys IT department is having to create files to send to our TPA so that we can give the required data for medical claims. Furthermore, the data that the EHR is submitting to the TPA is not compatible with what ESP wants and likely what Beacon will accept. This will require staff to manually fix the data to have it accepted into the clearinghouse. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our entity currently utilizes our TPAs reporting functions to collect data needed for audits. We retain this information in a network folder that can be viewed by people on the team. Validation of the audits occur monthly and requires the 5 sample provided by the TPA and manual validation of the dispense by the entitys EHR. Current data collection activities would change due to the requirements of the medical dispenses needed. This would be an ongoing activity. As mentioned previously, a representative from the entity would have to manually adjust data pulled from the TPA to have the clearinghouse accept it. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Abbeville Area Medical Center in Abbeville, SC to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on the entity. Abbeville Area Medical Center appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the entity can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. Abbeville Area Medical Center is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. The entity must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the entity takes a net loss on the transaction. Abbeville Area Medical Center respectfully requests that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 6 Abbeville Area Medical Centers upfront annual drug spend would increase dramatically by approximately $160,000 per month. This would be an 80x increase in upfront capital required for procurement. There could also be compounding cash flow issues if there are denials as mentioned above. Ten days is not a short enough time frame to resolve these possible cash flow issues. Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. For example, having Abbeville Area Medical Center pay for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Abbeville Area Medical Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Drug companies state that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This is not true, especially in the case of a denial which requires no time frame for the manufacturer to pay the rebate. Also, Abbeville Area Medical Center would need to pay the wholesaler more often as to not exceed the credit limit with the wholesaler, putting us at great financial risk as we are not guaranteed the rebate due to it being at the discretion of the manufacturer. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Abbeville Area Medical Center in Abbeville, SC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. 7 To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as our medication management clinic that helps patients manage complex disease states such as diabetes and heart failure. Abbeville Area Medical Center in Abbeville, SC anticipates reducing clinic and pharmacy hours specifically impacting the working class. The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund appropriate clinic and pharmacy staff directly increasing wait times for patients and prescriptions. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured or underinsured patients from rationing their diabetic or heart medications such as insulin. This could cause needless admissions to the hospital that could cost government-sponsored Medicare plans more money in the long run. Abbeville Area Medical Center would possibly not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price. A rebate model would directly impact patient care in our rural community by delaying and destabilizing the funding that Abbeville Area Medical Center relies on to support medication access and clinical services. For patients, this could result in delays in starting therapy, fewer resources to help navigate insurance and affordability barriers, and increased out-of-pocket costs. Additionally, if hospitals like ours are forced to reduce services or potentially close due to the financial burden, the impact on our community would be devastating. This would further widen existing gaps in care, where patients already face limited healthcare resources and significant barriers to timely, affordable treatment. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. 8 Abbeville Area Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. The terms and conditions allow second sight solution and therefore manufacturers to use submitted claims data for purposes beyond just identifying duplicate discounts, creating potential, long-term exposure of sensitive patient and financial data. Beacons terms permit updates to the terms of use without requiring prior notification to covered entities and it constitutes automatic acceptance of these new terms. Covered entities are forced to accept the terms to access 340B pricing to which they are entitled, creating an unfair balance of power. Risk and liability are shifted to the covered entity rather than Beacon or the manufacturers in the terms and conditions. No compensation for missed revenue and minimal liability for direct damages if there is a Beacon system failure or data security issue. Beacon can also shift data requirements at any time which could cause an issue for the entity to get rebates if they ask for a new data requirement that is not easily attainable. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Abbeville Area Medical Center in Abbeville, SC, HRSA should rely on those other options. Any 9 other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP de-duplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Abbeville Area Medical Center in Abbeville, SC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Abbeville Area Medical Center in Abbeville, SC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Will Gordon Vice President and Chief Administrative Officer Abbeville Area Medical Center in Abbeville, SC
HRSA-2026-0001-1653Chota Community Health Services2026-04-17T04:00Z111,660 chars
See attached file(s) Chota. Community Health Services April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Chota Community Health Services, I would like to thank the HeaIth Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our cornrnunity. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments frorn NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 rnillion in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savinizs in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Prograrn is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricin2 Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers -stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. P.O. Box 278, 4798 New Highway 68. Madisonville, TN 37354 412 Hunt Street Tellico Plains, TN 37385 1206 Highway 411 Vonore, TN 37885 Phone: (423) 442-2622 Phone: (423) 253-6545 Phone: (423) 884-7271 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Chota Community Health Services in particular, this means it will impact: 11,151 340B transactions 12,538 patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited altematives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and siQnificant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primaly care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to Iose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minirnal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed Richard P. Ku L. Dor A. Tan E. Shin P. Rosenbaum S. Cost savinas associated with the use of cornmunity health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. that discontinuing these drugs leads to a statistically significant increase in the risk ofstroke. heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mentaI health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life? Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.111I/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with EmpaQliflozin or Placebo in Patients ith I leart Failure. Circulation. https://www.ahajournals.orz doi/pdf 10.1161/circulationaha.123.065748 Substance Abuse and Mental I lealth Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series 14-60). Center for I3ehavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. httns://www.samhsagovidata/data-we-collectinsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMII): 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 impossible. This modeI would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that rnakes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectntm of care that make a meaningful difference in patients' lives. This diversion of tirne and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model wiIl force CHCs to make impossible choices: cutting programs, limitina operating hours, and fundamentally compromising the mission ofa program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Prograrn would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high adrninistrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additionaI workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description 4 To support CHCs in assessina the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Chota Community Health Services provided $980,395 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Chota Community Health Services anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Chota Community Health Services anticipates an increase of $26,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One rnidwestern CHC, serving approximately 12,000 unique patients Iast year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payrnents. 10 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across rnanufacturers will force CHCs to use multiple internal systems to rnanage and report the same data, thereby increasing costs and operational burdens. Chota Community Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 7 Internal NACI-IC assessment (99 responses). 8 Ibid. 5 Pharmacv Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Adrninistrator (TPA) workflows. We encourage HRSA to consider the increased cornpliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond irnplementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that dirninish our 340B savings. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 47 pharrnacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirernents across rnultiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-clairn fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 47 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharrnacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Monroe county, Tennessee with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open frorn 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Svstems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The rnajority of clinic-adrninistered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs rnaintain lirnited inventories of CADs and they are typically not separately billed on claims, it is still cornmon for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and cornplete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before subrnitting for rebate. Very few CHC records include electronic 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology [ JAMA Network Open I JAMA Network 10 https://www.healthaffairs.org/doi/abs/l0.1377/hlthaff. 2024.00192?iournalCode=hlthaff 6 medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximurn Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Clzallenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharrnacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, elirninating the " F1RSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. httos://bphc.hrsa.gov/compliance/compliance- man ual/chapter9ffootnote 10 7 operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time frorn dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharrnacies typically turn their inventory 10-12 times a year (roughly every 30 days).'3 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharrnacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frarne of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estirnate the rebate arnount and may undercharge or overcharge patients due to confusion. Furtherrnore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative tive percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drug,s at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for 13https://enlivenhealth.coiblog/year-end-business-health-check-kev-metrics-every-pharmacy-owner-should-review 8 all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volurne, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost 51,520,199 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends S231,763 to purchase these same drugs at the 340B ceiling price. This represents a significant increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Chota Community Health Services anticipates needing to reduce. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into lirnited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-druz-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Chota Community Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto -stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial marains, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Chota Community Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Chota Community Health Services urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate rnodel is not a -pricing rnechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other- category for denial reasons only added to the 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01 /2025-14619:340b-oro.gram -noti ce-appli cati on-process-for-the-34 Ob- rebate-model-pilot-program 10 confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or autornated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is cornpounded by the fact that the 34013 price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the Iack of real-time 340B pricing presents challen2es for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. INT. ReconciIiation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the adrninistrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable rnanufacturer accountability, a rebate model would underrnine, not strengthen, the integrity of the 340B Program and threaten patient access to essential rnedications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. 11 We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by rnanufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the rnanufacturer of their vendor cannot dernonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits:7 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perforrn the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."' 8 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payrnent requirement, that requirement must run from both the initial determination and any subsequent corrected deterrnination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becorning a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payrnents has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to cornplete the review and up to 180 days to return a detennination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/defaultiftles/hrsa1opa/dispute-resolution-process-12-12-96.odf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation. https://www.govinfo.gov/content pke/FR-2024-04-19 pdf2024-08262.pdf 12 program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure rnanufacturer cornpliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-rnatter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcernent, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to adrninister and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit rnanufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate clairns are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-Ievel documentation; Firm payrnent timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payrnent timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use- timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirernents. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. 13 C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existirm statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an irnbalance not sanctioned by the 340B or IRA statutes and ultirnately underrnines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.2 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on rnanufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparencv Measures Ftdly Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures- as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very lirnited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination rnethodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition PI 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. 20 Section 340B of the Public Health Service Act. https://www.hrsa.gov/sites/defaultifiles/hrsatrural-healthlphs-act-section- 340b.pdf 21 https:.' mfp.support.beaconchannelmanagement.com eniartieles/13335320-validation-codes-and-pricing-codes-glossary 14 P3 340B Pharmacy Pricing Claim frorn a pharmacy W ith evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written bv a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MHZ Reprice Pricing Value other than WAC used to determine MEP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacv Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a rnatter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-itern drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel docurnentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range frorn $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even 22 https://public-inspection.federalregister.gov/2025-146 9.pdf71753965918 23 Internal NACIIC survey data 15 though CADs are not currently billed to Medicare Parts B or D. Furtherrnore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Proaram. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate adrninistrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer fulI discounts to individuals at or below 100% of the FederaI Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride thernselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting, requirernents provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. 16 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harrn to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B prograrn was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Dedaplication While we understand that manufacturers' investrnent in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant adrninistrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any chanae in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative irnpact on stakeholders,24 and a 340B rebate rnodel is not that. Several less burdensome alternatives are available for HHS' consideration. As fiirther discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial clairns data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.2) This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 24 5 U.S.C. 500-596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.goviregulatorv-informationSearch-fda-guidance-documents/least-burdensome-orovisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(1f)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.govicontent/pkg/FR-2025-11-05, pd2025-19787.pdf 17 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: -The Comrnittee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient frorn the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute. Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to rnake the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."' That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined zi H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(I) 18 by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds ofHRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from char2ing above the 340B ceiling price "the maximum price that covered entities may perrnissibly be required to pay for the drug."29 The only rebate rnechanisrn HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the terrn "rebate- in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretctry)."3 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers frorn Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drua.31 Accordingly, only the covered entity may elect whether to bill a 3408 drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B 29 Id 3 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity rnay choose "options" for billin2 340B drugs to Medicaid. Specifically, it states that the HHS may "develop[][more detailed euidance describing methodoloeies and options available to covered entitics for billing covered outpatient drugs to Statc Medicaid a2cncies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And thc Secretary of HHS may institute a system to ensure that the covered entity does what thc statutc says it's obli2ated to do prevent duplicate discounts. Id. 19 statute. The state Medicaid agency rnay set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the rnanufacturer . . . to audit . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug clann to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require siuniticantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.3) Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bilI 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant Iegal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirernents. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State aaency shall provide a means by which a covered entity shall indicatc on any drua reimbursement claims forrn (or format, where electronic claims management is used) that a unit of the drug that is thc subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drua.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 20 (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medicaI benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 AdditionalIy, states have implernented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. SpecificaIly, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 3408 rebate model illegally transfers that discretion to drugrnakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate rnodel pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model clairn submission policies. Some states provided guidance on how they expected covered entities to bill, but not aIl did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and leg,a1 impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. In a 340B rebate modeI, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B 36 C.F.R. 447.518(a). 21 AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a governrnent-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Hurnan Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."39 The Oregon Health Authority commented, "tif Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.-4 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid rnanaged care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.odf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.rmlations.eov!comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 34013 Dra2 Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.reeulations.gov/comment/HRSA-2025-0001-0980. 22 drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugrnakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid rnanaged care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugrnakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid manaed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious irnpediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.'" It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. 4i See, e.g., 31 U.S.C. 3729 (making it illetzal to overcharge a federal erantee). 23 i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Nurnber (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a rnanufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN nurnbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. " 43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' cornpliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Inforrnation Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payrnent. The Medicaid Plan Billing Inforrnation Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a rnanner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharrnacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination. and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfreovIcurrentlitle-42/chaoter-IV/subchapter- C/part-438/suboart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 24 applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retaiI network pricing and TRICARE's manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharrnacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirernents can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniforrned service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.4) The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from cornmercial pricing dynamics. AlIowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharrnaceuticaI manufacturers and PBMs 44 32 C.F.R. 199.21(q)(2)(iii)(E) 4' Genesis Health Care, Inc. v. Becerra, No. 41:19-cv-01531-RBH, slip op. (DSC. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Doubk, double. toil and trouble with commercial contracts www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 25 routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.' Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.)1 Indeed. over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually") 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and troub!e with commercial contracts www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least .. $6 billion annually" in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricine Program meaning a total of roughly $6 billion annually."). 50 Kalderos, Sightlines Issue No. 3, Double, doub!e, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 E Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute ... is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, httns://340breport.comilegislative-mapicontract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/leeislative-man/laws-passed-that-prohibit-pbm-underpaymentl. ?6 We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."'4 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, -obligations cannot spring from silence."5' By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirernent wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.'6 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws?7 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Clairns Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide cornmercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized prograrn. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & l Inman Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (I).I).C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dcp't of Health & Flum. Scrvs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 57 42 U.S.C. 1320a-7b (making it illeeal to pay remuneration in exchansze for items or services billable to federal health care programs.) 27 We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payrnents from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the rnanufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a deterrnination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.'8 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drumakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs afier the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program.~79And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.6 IX. Establishing a National, Neutral Claims Clearinghouse 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Reaardin2 Section 602 of the Veterans I ieaIth Care Act of 1992 Patient and Entity Eliaibili 6 I Fed. Rei?.. 55,156, 55,157 (CM. 24, 1996) (emphasis added).1 60 H.R. REP. 102-384, 16 8 We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate rnodel, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force rnany CHCs to sflop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implernenting a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on 29 those claims. These approaches include claim rnodifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by alI stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data 30 Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable dala elenients should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate modelb1 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to deterrnine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization rnanaement, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously rnentioned, rnanufacturers can use claims data to dispute rebate obligations to comrnercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all clairns, including those from commercial sources. Given the rnajor disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 61 https://beaconchannelmanaQement.com/pages;'resources (Johnson & Johnson Policy Documents) 31 Sinc ely, aur Harris Chot. Community Health Services imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Chota Community Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Chota Cornmunity Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Chota Community Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with FIRSA on this prominent issue. If you have any questions, please contact Melissa Gray at 423- 442-7268. 32
HRSA-2026-0001-1654Victor Fournier · Foxborough, MA, United States2026-04-17T04:00Z1,250 chars
I would like to thank HRSA for taking the time to review these comments on the proposed 340B rebate model. We currently operate 4 in-house pharmacies in 4 FQHC's. These clinics and pharmacies service a large indigent care population. Implementing a rebate model would significantly affect our operations in many ways; not just financially. We are still struggling, 4 months later, with the implementation of Medicare's Maximum Fair Price and that involves only 10 medications. I cannot imagine the financial impact as well as the staffing pressures that a rebate model would add to our organization. We consistently struggle with hiring staff as an FQHC especially in our pharmacy department. The idea of delaying the 340B rebate by 45-60 days would result in a significant burden on the organization. I feel like the 340B program has lost its way after 30+ years where we have been able to care for our patients. The drug manufacturers have slowly been dictating policy and making it more difficult to perform our daily routines. Trying to keep on top of all the changes to the program has become a full-time job. There should be one set of rules that we all should follow instead of drug manufacturers implementing their own set of rules.
HRSA-2026-0001-1655Edgefield County Healthcare2026-04-17T04:00Z20,965 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Edgefield County Healthcare in Edgefield, SC we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Edgefield County Healthcare in Edgefield, SC that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Edgefield County Healthcare in Edgefield, SC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Edgefield County Healthcare in Edgefield, SC has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that 2 Edgefield County Healthcare in Edgefield, SC can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Edgefield County Healthcare in Edgefield, SC to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Edgefield County Healthcare in Edgefield, SC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The organization at a minimum would have to hire 2 full-time employees to accurately track and submit rebate requests. If full-time employees were not hired, then a third-party administrator would need to be contracted to track rebates but a person at the organization would need to take 20 hours per week making sure that we are receiving the rebates and everything is correct with the third-party administrator. Total increase in administrative costs with either option would be at a minimum of $200,000 per year. The $200,000 minimum increase is based on the acquisition of 2 FTEs that would include salary and benefits. As an organization we have already looked at a third- party administrator that could help with rebate identification and their services were $125,000 for a year. Additional costs would be time for an employee to verify rebates identified by the third-party administrator. The key cost drivers would be increased staffing, diverting current staff, IT systems, third-party vendors, compliance monitoring, labor hours, and the process for challenging denials. Although the current TPAs the organization uses will not institute a charge for the rebate model, it does take labor hours to gather the information needed from the TPAs to submit the required details for the rebate model. As stated previously, the organization explored a service that could help monitor rebates, but the initial cost would be $125,000 along with a monthly fee. The biggest function of these incremental costs would cover reconciliation, claims processing, data submission, challenging denials, and audit support. Reconciliation 3 is the biggest concern with the increased administration cost. There are thousands of prescriptions that are run daily and a person or TPA would need to verify the rebate had been performed. The organization has already had to confer with the legal team to review the terms and conditions associated with a platform like Beacon which takes away from time they could be performing other tasks. The new 2 FTEs mentioned previously would need to be trained in 340B and the rebate model. The associated increase in costs will likely hurt medication access for patients in the community since the increase in costs will come from the 340B budget that is used to offset patients copays. These costs will cause a recurring issue with providing the best patient care and cause an increase in readmissions. Staffing Impacts Under a Potential 340B Rebate Program. Edgefield County Healthcare in Edgefield, SC does not currently have the staff needed to comply with a Rebate Program. The rebate model would require 2 FTEs to perform administrative functions. This would cost a minimum of $200,000 for salary and benefits. This would also take hours away from current staff to perform tasks. Staff that are currently in clinical roles but have 340B experience will need to reallocate work hours associated with their clinical work to work related to the 340B rebate program. The FTEs responsibilities would be to identify 340B prescription eligibility, submit rebate requests, reconcile rebate requests, investigate short-paid or denied rebates, and track outstanding receivables. This is not a batch task that can be done in one sitting. These are processes that need to be monitored continuously. It takes our organization approximately 60 days from onboarding to being able to work independently. The estimate of 2 hours per week in additional work is a gross underestimate of what will need to be implemented to perform the requirements needed of the rebate program. For an example, if a pharmacy fills 2,000 prescriptions per day, and 1% is denied, it is safe to assume a minimum of 5 minutes of time to reconcile the prescription will be needed, not including submitting information for a rebate denial. 4 This is already 2 hours a day not 2 hours a week. Furthermore, this is just an example for a denial, it does not consider time needed to track rebate reconciliation. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Edgefield County Healthcare in Edgefield, SC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Unlike contract pharmacies that use TPAs, in house pharmacies must directly integrate our EHR and pharmacy management system (PMS) with a complex new rebate infrastructure. The entity would have to integrate rebate data into our PMS to accurately determine our financial reports for our in-house pharmacy. We anticipate an estimated $125,000 one-time integration cost to pay a software vendor for custom API builds and price file reconciliation tools. The entitys IT department is having to create files to send to our TPA so that we can give the required data for medical claims. Furthermore, the data that the EHR is submitting to the TPA is not compatible with what ESP wants and likely what Beacon will accept. This will require staff to manually fix the data to have it accepted into the clearinghouse. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our entity currently utilizes our TPAs reporting functions to collect data needed for audits. We retain this information in a network folder that can be viewed by people on the team. Validation of the audits occur monthly and requires the sample provided by the TPA and manual validation of the dispense by the entitys EHR. Current data collection activities would change due to the requirements of the medical dispenses needed. This would be an ongoing activity. As mentioned previously, a representative from the entity would have to manually adjust data pulled from the TPA to have the clearinghouse accept it. 5 Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Edgefield County Healthcare in Edgefield, SC to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on the entity. Edgefield County Healthcare appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the entity can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. Edgefield County Healthcare is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. The entity must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the entity takes a net loss on the transaction. Edgefield County Healthcare respectfully requests that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. For example, having Edgefield County Healthcare pay for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Edgefield County Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization 6 in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Drug companies state that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This is not true, especially in the case of a denial which requires no time frame for the manufacturer to pay the rebate. Also, Edgefield County Healthcare would need to pay the wholesaler more often as to not exceed the credit limit with the wholesaler, putting us at great financial risk as we are not guaranteed the rebate due to it being at the discretion of the manufacturer. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Edgefield County Healthcare in Edgefield, SC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as our medication management clinic that helps patients manage complex disease states such as diabetes and heart failure. Edgefield County Healthcare in Edgefield, SC anticipates reducing clinic and pharmacy hours specifically impacting the working class. The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund appropriate clinic and pharmacy staff directly increasing wait times for patients and prescriptions. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured or underinsured patients from rationing their diabetic or heart medications such as insulin. This could cause needless admissions to the 7 hospital that could cost government-sponsored Medicare plans more money in the long run. Edgefield County Healthcare would possibly not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price. A rebate model would directly impact patient care in our rural community by delaying and destabilizing the funding that Edgefield County Healthcare relies on to support medication access and clinical services. For patients, this could result in delays in starting therapy, fewer resources to help navigate insurance and affordability barriers, and increased out-of-pocket costs. Additionally, if hospitals like ours are forced to reduce services or potentially close due to the financial burden, the impact on our community would be devastating. This would further widen existing gaps in care, where patients already face limited healthcare resources and significant barriers to timely, affordable treatment. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Edgefield County Healthcare reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 8 The terms and conditions allow second sight solution and therefore manufacturers to use submitted claims data for purposes beyond just identifying duplicate discounts, creating potential, long-term exposure of sensitive patient and financial data. Beacons terms permit updates to the terms of use without requiring prior notification to covered entities and it constitutes automatic acceptance of these new terms. Covered entities are forced to accept the terms to access 340B pricing to which they are entitled, creating an unfair balance of power. Risk and liability are shifted to the covered entity rather than Beacon or the manufacturers in the terms and conditions. No compensation for missed revenue and minimal liability for direct damages if there is a Beacon system failure or data security issue. Beacon can also shift data requirements at any time which could cause an issue for the entity to get rebates if they ask for a new data requirement that is not easily attainable. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Edgefield County Healthcare in Edgefield, SC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP de-duplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Edgefield County Healthcare in Edgefield, SC respectfully submits that the costs of any Rebate Program will outweigh any expected 9 benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Edgefield County Healthcare in Edgefield, SC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Will Gordon Vice President and Chief Administration Officer Edgefield County Healthcare in Edgefield, SC
HRSA-2026-0001-1656Centracare Health2026-04-17T04:00Z29,319 chars
See attached file(s) CentraCare Health April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: CentraCare Health, a health system with covered entities (CE) that participate in the 340B program, provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our health system strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our health system has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our health system and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers, to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospitals expected would be available for that purpose due to 340Bs long history as an upfront discount program. Our organization and the community we serve benefit significantly from our participation in the 340B program. We provide a range of services to our community that span the entire continuum of care. With the implementation of the 340B rebate model, these services would be negatively impacted or eliminated. We use our 340B savings to offer many benefits to our community, including uncompensated care and charity care, free health screenings and basic care for all the communities our organization serves, free clinics assisting patients who require language interpretation services in communities we serve, coordinated care services and outreach RNs to provide care to the homeless, community health improvement team and community health nurses, and community paramedics who follow up with care in home and in the community. Without the resources provided by the 340B Program, many of these services and other services would be drastically reduced or eliminated due to up-front increase in WAC costs and delayed 340B rebates. Over the course of one year, we believe our hospitals would be required to front drug manufacturers approximately $21.4 million by having to purchase these medications on WAC instead of getting the up-front 340B discount. This figure is based on our 2025 purchases of IPAY 2026 and IPAY 2027 NDCs, which are the medications that we understand may be part of the proposed rebate program. This estimate will change dependent on the drugs chosen for the rebate program and if/how it will expand over time. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our health system has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. The required claims data must be aggregated from multiple source systems, each requiring varying degrees of manual effort to format and align with required data specifications. Each third party administrator has different data specifications. This requires us to adjust each report into the required data specifications that manufacturers require before data submission can occur. In 340B ESP, manufacturers requirements vary, which leads to increased complexity. To exacerbate these issues, the requirements continually change over time, requiring constant monitoring of policies and making proper adjustments to our processes to ensure we are meeting these new requirements. Even with our best efforts to meet these requirements, we still encounter instances of manufacturers not accepting the claims data, resulting in them removing access to 340B pricing. Medical claims, in particular, present significant challenges, as medication quantities and units of measure vary depending on the site of care and how the drug was administered. Under the current rebate pilot requirements, these quantities must be converted into a single, standardized unit of measure. In practice, this conversion cannot be reliably automated and would require substantial manual review and intervention. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Implementing a rebate model would require no fewer than three additional fulltime employees to operate effectively. Before these full-time employees can begin their tasks, at least 6 months of training is required to educate the new staff on the 340B program and the 340B rebate model requirements. At best, one employee could support presubmission activities such as data extraction, validation, formatting, and transmission. However, the operational burden does not end with claim submission. Substantial, ongoing effort is required to track rebate payments from multiple manufacturers, accurately match those payments to submitted claims, and complete detailed reconciliation. We estimate that two of the three fulltime employees would need to be dedicated to rebate monitoring and reconciliation. These laborintensive activities are unavoidable and continuous, not episodic. They are also additive to existing operational requirements, including ongoing claim submissions through platforms such as 340B ESP. Under a rebate model, these workflows become meaningfully more complex, as staff must simultaneously manage medications subject to 340B price restoration and those requiring rebate submission, often under different rules and timelines. Rather than simplifying or modernizing 340B operations, a rebate model would materially increase process complexity, staffing demands, and administrative risk. Health systems would be forced to layer new, resourceintensive workflows on top of already established processes. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different billing requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. To minimize the negative financial impact of a rebate model, our health system would need to submit claims data on a daily basis to obtain 340B rebates as quickly as possible, rather than following the bi-weekly submission cadence used by platforms such as 340B ESP. This shift would significantly increase the operational effort required to manage the rebate process. The assumption that this work can be completed in only five hours is inaccurate, as it fails to account for the complexity of health system data environments. Claims data must be aggregated from numerous internal sources, many of which do not have automated processes for routine data extraction. In addition, substantial time would be required to monitor rebate activity and complete reconciliation after claims are submitted. Further operational challenges arise when transforming submitted claims data into manufacturer-required formats, particularly when medication quantities are reported using inconsistent units of measure across systems. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. A 340B rebate model would be significantly more burdensome and would exacerbate the issues we are experiencing, as we would be required to submit rebate data for all of our 340B claims across all payers and uses of the rebate drugs, whereas we are not submitting claims data under the MDPNP process unless we are doing so under a good faith inquiry to challenge an improper Medicare refund denial by the manufacturer, which requires submission to multiple portals, such as Beacon, 340B ESP, and potentially CMS if a good faith inquiry is not resolved. Thank you for considering our comments. Sincerely, CentraCare Health April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: CentraCare Health, a health system with covered entities (CE) that participate in the 340B program, provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our health system strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our health system has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our health system and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers, to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospitals expected would be available for that purpose due to 340Bs long history as an upfront discount program. Our organization and the community we serve benefit significantly from our participation in the 340B program. We provide a range of services to our community that span the entire continuum of care. With the implementation of the 340B rebate model, these services would be negatively impacted or eliminated. We use our 340B savings to offer many benefits to our community, including uncompensated care and charity care, free health screenings and basic care for all the communities our organization serves, free clinics assisting patients who require language interpretation services in communities we serve, coordinated care services and outreach RNs to provide care to the homeless, community health improvement team and community health nurses, and community paramedics who follow up with care in home and in the community. Without the resources provided by the 340B Program, many of these services and other services would be drastically reduced or eliminated due to up-front increase in WAC costs and delayed 340B rebates. Over the course of one year, we believe our hospitals would be required to front drug manufacturers approximately $21.4 million by having to purchase these medications on WAC instead of getting the up-front 340B discount. This figure is based on our 2025 purchases of IPAY 2026 and IPAY 2027 NDCs, which are the medications that we understand may be part of the proposed rebate program. This estimate will change dependent on the drugs chosen for the rebate program and if/how it will expand over time. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our health system has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. The required claims data must be aggregated from multiple source systems, each requiring varying degrees of manual effort to format and align with required data specifications. Each third party administrator has different data specifications. This requires us to adjust each report into the required data specifications that manufacturers require before data submission can occur. In 340B ESP, manufacturers requirements vary, which leads to increased complexity. To exacerbate these issues, the requirements continually change over time, requiring constant monitoring of policies and making proper adjustments to our processes to ensure we are meeting these new requirements. Even with our best efforts to meet these requirements, we still encounter instances of manufacturers not accepting the claims data, resulting in them removing access to 340B pricing. Medical claims, in particular, present significant challenges, as medication quantities and units of measure vary depending on the site of care and how the drug was administered. Under the current rebate pilot requirements, these quantities must be converted into a single, standardized unit of measure. In practice, this conversion cannot be reliably automated and would require substantial manual review and intervention. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Implementing a rebate model would require no fewer than three additional fulltime employees to operate effectively. Before these full-time employees can begin their tasks, at least 6 months of training is required to educate the new staff on the 340B program and the 340B rebate model requirements. At best, one employee could support presubmission activities such as data extraction, validation, formatting, and transmission. However, the operational burden does not end with claim submission. Substantial, ongoing effort is required to track rebate payments from multiple manufacturers, accurately match those payments to submitted claims, and complete detailed reconciliation. We estimate that two of the three fulltime employees would need to be dedicated to rebate monitoring and reconciliation. These laborintensive activities are unavoidable and continuous, not episodic. They are also additive to existing operational requirements, including ongoing claim submissions through platforms such as 340B ESP. Under a rebate model, these workflows become meaningfully more complex, as staff must simultaneously manage medications subject to 340B price restoration and those requiring rebate submission, often under different rules and timelines. Rather than simplifying or modernizing 340B operations, a rebate model would materially increase process complexity, staffing demands, and administrative risk. Health systems would be forced to layer new, resourceintensive workflows on top of already established processes. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different billing requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. To minimize the negative financial impact of a rebate model, our health system would need to submit claims data on a daily basis to obtain 340B rebates as quickly as possible, rather than following the bi-weekly submission cadence used by platforms such as 340B ESP. This shift would significantly increase the operational effort required to manage the rebate process. The assumption that this work can be completed in only five hours is inaccurate, as it fails to account for the complexity of health system data environments. Claims data must be aggregated from numerous internal sources, many of which do not have automated processes for routine data extraction. In addition, substantial time would be required to monitor rebate activity and complete reconciliation after claims are submitted. Further operational challenges arise when transforming submitted claims data into manufacturer-required formats, particularly when medication quantities are reported using inconsistent units of measure across systems. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. A 340B rebate model would be significantly more burdensome and would exacerbate the issues we are experiencing, as we would be required to submit rebate data for all of our 340B claims across all payers and uses of the rebate drugs, whereas we are not submitting claims data under the MDPNP process unless we are doing so under a good faith inquiry to challenge an improper Medicare refund denial by the manufacturer, which requires submission to multiple portals, such as Beacon, 340B ESP, and potentially CMS if a good faith inquiry is not resolved. Thank you for considering our comments. Sincerely, CentraCare Health
HRSA-2026-0001-1657Knoxville Hospital & Clinics2026-04-17T04:00Z942 chars
Cash Flow and Financial Risks: Covered entities must pay full prices upfront, creating significant financial strain for safety-net providers that may not have the liquidity to "float" these costs while waiting for reimbursements that carry uncertainty for the timeline of reimbursement. Operational Burden: Hospitals are required to submit extensive, detailed claims-level data to manufacturers, increasing administrative costs and operational complexity. Rebate Denials and Discretion: Manufacturers could unilaterally determine 340B eligibility, potentially denying rebates for claims they deem ineligible, such as those processed through certain contract pharmacies. Legal and Statutory Violations: The American Hospital Association (AHA) and other stakeholders argue that the shift from upfront discounts to a rebate model violates the original 340B statute, leading to legal action and a preliminary injunction against the pilot program.
HRSA-2026-0001-1658LGBT Life Center2026-04-17T04:00Z7,967 chars
The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels, I am writing to you with a strong sense of urgency and confidence on behalf of our Covered Entity, addressing the HRSA's request for information regarding the 340B Rebate Model Pilot Program, as per HHS Docket No. HRSA-2026-03042. As a dedicated 47-year-old professional with extensive experience as a 340B Program Administrator, I am compelled to express profound concerns over the potentially crippling financial impact this proposal may have on organizations like ours. As a Ryan White/STD Grantee, our organization is already functioning at maximum capacity with constrained resources. The prospect of implementing a new 340B Rebate Model poses an existential threat by introducing cash flow challenges that could destabilize our operations. The proposition to pay Wholesale Acquisition Cost (WAC) upfront and seek reimbursement after the fact is not merely a financial inconvenience; it fundamentally compromises our ability to procure medications critical to our mission. Our patient demographic predominantly involves individuals living with HIV and those affected by sexually transmitted diseases. Our programs also extend vital prevention services. The savings procured through the 340B program are not a luxury but an absolute necessity for maintaining these life-saving services. The loss of these savings equates to a direct threat to the health and well-being of an already vulnerable community. By imposing this rebate program, we will be compelled to make immediate and difficult decisions that could drastically reduce or entirely eliminate crucial programs such as Copay Assistance, Food Pantry and Transportation initiatives, and potentially even certain medical services. These programs are not merely ancillary; they are lifelines for many patients who rely on us for affordable access to essential medications and support. The Copay Assistance program, for example, significantly alleviates the financial burden for patients struggling to afford their prescriptions. Likewise, our Food Pantry and Transportation programs play indispensable roles in ensuring patients can maintain both nutritional needs and the ability to attend necessary medical appointments. The cessation of these services would have serious repercussions, potentially increasing the risk of medication non-adherence, worsening health outcomes, and amplifying healthcare disparities within our community. Moreover, the ripple effects would strain local healthcare systems further and undermine the progress we have achieved in patient care. It imperils consistent access to medications, thereby endangering lives. Despite concerted efforts nationwide, halting the HIV epidemic remains an elusive goal. Interruptions in access to affordable medications risk worsening public health outcomes and increasing disease transmission. This is not a theoretical concern; it is the stark reality depicted by the AIDSVu interactive map, which highlights the ongoing battle faced in communities across the nation. While we acknowledge the program's intention to enhance services for uninsured populations, it's imperative to align this goal with the operational realities of safety-net providers. Uninterrupted medication access is the linchpin in our ability to serve effectively, and any policy that jeopardizes this balance will invariably impact on the very populations the program seeks to support. I appreciate your time and urge you to consider these insights and the significant ramifications of the proposed changes. We remain committed to partnering with HRSA to work towards an equitable solution that safeguards the healthcare needs of our community. Respectfully, Julia Garcia, ACE Expert 340B Program Administrator LGBT Life Center Friday, April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels, I am writing to you with a strong sense of urgency and confidence on behalf of our Covered Entity, addressing the HRSA's request for information regarding the 340B Rebate Model Pilot Program, as per HHS Docket No. HRSA-2026-03042. As a dedicated 47-year-old professional with extensive experience as a 340B Program Administrator, I am compelled to express profound concerns over the potentially crippling financial impact this proposal may have on organizations like ours. As a Ryan White/STD Grantee, our organization is already functioning at maximum capacity with constrained resources. The prospect of implementing a new 340B Rebate Model poses an existential threat by introducing cash flow challenges that could destabilize our operations. The proposition to pay Wholesale Acquisition Cost (WAC) upfront and seek reimbursement after the fact is not merely a financial inconvenience; it fundamentally compromises our ability to procure medications critical to our mission. Our patient demographic predominantly involves individuals living with HIV and those affected by sexually transmitted diseases. Our programs also extend vital prevention services. The savings procured through the 340B program are not a luxury but an absolute necessity for maintaining these life-saving services. The loss of these savings equates to a direct threat to the health and well-being of an already vulnerable community. By imposing this rebate program, we will be compelled to make immediate and difficult decisions that could drastically reduce or eliminate crucial programs such as Copay Assistance, Food Pantry and Transportation initiatives, and potentially even certain medical services. These programs are not merely ancillary; they are lifelines for many patients who rely on us for affordable access to essential medications and support. The Copay Assistance program, for example, significantly alleviates the financial burden for patients struggling to afford their prescriptions. Likewise, our Food Pantry and Transportation programs play indispensable roles in ensuring patients can maintain both nutritional needs and the ability to attend necessary medical appointments. The cessation of these services would have serious repercussions, potentially increasing the risk of medication non-adherence, worsening health outcomes, and amplifying healthcare disparities within our community. Moreover, the ripple effects would strain local healthcare systems further and undermine the progress we have achieved in patient care. It imperils consistent access to medications, thereby endangering lives. Despite concerted efforts nationwide, halting the HIV epidemic remains an elusive goal. Interruptions in access to affordable medications risk worsening public health outcomes and increasing disease transmission. This is not a theoretical concern; it is the stark reality depicted by the AIDSVu interactive map, which highlights the ongoing battle faced in communities across the nation. While we acknowledge the program's intention to enhance services for uninsured populations, it's imperative to align this goal with the operational realities of safety-net providers. Uninterrupted medication access is the linchpin in our ability to serve effectively, and any policy that jeopardizes this balance will invariably impact on the very populations the program seeks to support. I appreciate your time and urge you to consider these insights and the significant ramifications of the proposed changes. We remain committed to partnering with HRSA to work towards an equitable solution that safeguards the healthcare needs of our community. Respectfully, Julia Garcia, ACE Expert 340B Program Administrator LGBT Life Center
HRSA-2026-0001-1659Seward Community Health Center2026-04-17T04:00Z3,412 chars
On behalf of Seward Community Health Center, a Federally Qualified Health Center serving a rural population, I strongly urge the Health Resources and Services Administration (HRSA) not to implement a 340B rebate model pilot program. 1. The rebate model fundamentally undermines the statutory purpose of the 340B program. The 340B program was established to allow safety-net providers to stretch scarce federal resources to serve more patients and expand services. Requiring covered entities to pay full price upfront and receive rebates later inverts this structure and erodes the programs core intent. 2. The cash flow burden is untenable for community health centers. Under a rebate model, covered entities must purchase drugs at wholesale acquisition cost and wait for reimbursement. HRSA itself acknowledges the need for stakeholder input on whether this would create financial risks and disrupt cash flow. For community health centers particularly rural, small, and frontier providers this is not a theoretical concern: --We operate on thin margins with limited working capital --We do not have access to large lines of credit --We rely on immediate 340B savings to fund clinical services Even short delays in rebate payments would create material financial strain. A shift to rebate-based reimbursement would force many health centers to: --Reduce pharmacy participation --Limit access to essential medications --Cut clinical services subsidized by 340B savings Ultimately, many CHCs would be unable to participate in the program at all. 3. The model introduces significant administrative burden without commensurate benefit. The RFI anticipates new requirements for: --Data reporting and claims reconciliation --IT system upgrades and integration costs --Additional staffing and administrative overhead These requirements divert scarce resources away from patient care contrary to the mission of safety-net providers. 4. The rebate model primarily benefits manufacturers not patients or providers. The proposed structure shifts financial risk from manufacturers to covered entities: --Manufacturers retain upfront revenue --Covered entities assume financing and administrative burden --Rebate denials and delays introduce additional uncertainty While proponents cite transparency and duplicate discount prevention, these goals can be achieved through targeted policy and data solutions without dismantling the upfront discount model. 5. The model will reduce access to care in rural and underserved communities. HRSA specifically asks stakeholders to evaluate impacts on patient access. For organizations like ours, the outcome is clear: --Reduced medication access --Increased uncompensated care burden --Widening disparities in rural and frontier communities This runs directly counter to federal health equity goals.The proposed rebate model represents a fundamental shift away from the statutory design and proven effectiveness of the 340B program. It imposes significant financial and operational burdens on safety-net providers while offering limited, if any, benefit to patients. We respectfully urge HRSA and HHS to: --Abandon the rebate model pilot program, and --Focus instead on strengthening program integrity without undermining its core structure Maintaining upfront discounts is essential to preserving access to care for the vulnerable populations we serve.
HRSA-2026-0001-1660Portland Community Health Center2026-04-17T04:00Z25,175 chars
RFI 340B Rebate Model Pilot Program April 17, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Portland Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Portland Community Health Centers mission is to provide high quality patient-centered healthcare that is accessible, affordable, and contributes to a healthier community. We cared for over 13,400 patients in 2025. Our services include medical, mental health, oral health, substance use treatment, and vision services. We have 17 locations across Portland, South Portland and Westbrook and provide oral hygiene services in over 40 schools. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Portland Community Health Center in particular, this means it will impact: 2,142 340B transactions / 13,427 patients in 2025 The revenue from 340B supports providing services: medical, behavioral and mental health, oral health and optometry Increase administrative expenses to manage the rebate model We ask that HRSA exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We are concerned about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Portland Community Health Center provided over $1,000,000 in sliding fee discounts. We anticipate that our ability to offer sliding fee discounts may decrease significantly under a rebate model. Staffing Impact: Portland Community Health Center anticipates needing to add an .80 FTE to account for the increase in regulatory, operational, administrative, and compliance work created by a rebate model. External Vendor Costs: Given increased complexity, Portland Community Health Center estimates an increase of $24,000 to $30,000 annually to cover costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.2 We anticipate needing to hire an additional .80 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.3 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We anticipate the additional costs for labor costs and overhead will be approximately $90,000. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.4 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 2 Internal NACHC assessment (99 responses). 4 Internal NACHC survey data 4 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).5 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity 5https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 5 has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B6 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.7 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Financial Impact of Rebate Denials and Delays Portland Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that 6 https://340bpricing.hrsa.gov/ 7 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 6 results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.8 Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, having clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject- matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 8 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot- program 7 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse OPA using a Neutral Claims Clearinghouse, may produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Portland Community Health Center asks that HRSA exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. Portland Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot. Sincerely, Ann Tucker, Portland Community Health Center
HRSA-2026-0001-1661Novartis Services, Inc.2026-04-17T04:00Z28,707 chars
Please find attached Novartis's comments on this Request for Information. US Public Affairs Market Square - West Tower 801 Pennsylvania Ave NW Washington, DC 20004 April 20, 2026 Mr. Thomas J. Engels Administrator Health Resources & Services Administration U.S. Department of Health and Human Services Attention: Docket No. HRSA-2026-03042 5600 Fishers Lane Rockville, MD 20857 BY ELECTRONIC DELIVERY to http://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program [Docket No. HRSA-2026-03042] Dear Administrator Engels: Novartis Services, Inc. submits this letter on behalf of Novartis Pharmaceuticals Corporation and its affiliates, referred to collectively herein as Novartis. We appreciate the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program issued by the Health Resources & Services Administration (HRSA) on February 17, 2026.1 In addition, Novartis is a member of the Pharmaceutical Research & Manufacturers of America (PhRMA) the Biotechnology Innovation Organization (BIO), and the National Pharmaceutical Council (NPC) and endorses their comments on this RFI. Novartis discovers and develops innovative medicines that address the evolving needs of patients and societies worldwide with a focus on the core therapeutic areas of cardiology, immunology, neurology, and oncology. Through innovative science and technology, we address some of societys most challenging health care issues. We work to discover and develop breakthrough treatments and find new ways to deliver them to as many people who would benefit from them as possible. At Novartis, we are united by a single purpose: to reimagine medicine to improve and extend peoples lives. We support policy solutions that improve patient access to medicines, including policies that support the heath care safety net. As a longstanding participant in the 340B program, we believe that the program can play a role in expanding health care access and affordability, particularly for low-income and underinsured or uninsured patients. Over the years, however, the 340B program has grown so large that the enforcement tools available to stakeholders have become inefficient and ineffective. Compliance in a program as large as 340B should occur primarily through automated processes that rely on shared access to necessary data. However, data access in the 340B program today is asymmetric, leaving manufacturers (and HRSA) without regular access to information to identify duplicate discounts and relying almost solely on cumbersome, retrospective audits. This means that current approaches to identifying and preventing duplicate discounts and diversion are inaccurate and spawn significant, avoidable administrative burden. 1 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 This administrative burden is likely to grow rapidly for all parties including HRSA, covered entities (CEs), state Medicaid programs, and manufacturers as the 340B program expands and grows more complex and as the number of drugs subject to maximum fair prices (MFPs) under the Inflation Reduction Act (IRA) grows. Therefore, Novartis continues to believe that the most effective and efficient way to introduce more transparency to the program, reduce administrative burden, and to identify duplicate discounts and diversion is to allow manufacturers to provide 340B pricing via retrospective cash-rebates to 340B covered entities. Widely used in other federal programs and for commercial payers, this approach provides manufacturers with the opportunity to access detailed claims data before a discount is paid, alleviating current challenges with collecting the necessary data to ensure compliance with statutory requirements under both the Public Health Service Act and the IRA. We applaud HRSA for continuing to pursue a 340B Rebate Model Pilot Program (Pilot) as it would represent a positive initial step toward implementing pragmatic reforms that strengthen the 340B program and improve how the program operates. Nonetheless, we strongly urge the agency to quickly expand participation in the Pilot to include all 340B drugs, not just those subject to MFP discounts. An expansion to all drugs would similarly aid in the identification of 340B units for their removal from Part D inflation rebates not to mention addressing longstanding challenges within the program, including Medicaid duplicate discounts and diversion. We look forward to working with HRSA on the Pilots implementation and offer additional information about the need for the Pilot and recommendations on critical Pilot design elements below. Manufacturers currently lack access to essential data needed to identify duplicate discounts and diversion in the 340B program. Several aspects of the replenishment model, currently the most prevalent approach used to access 340B pricing, greatly limit the data available to manufacturers. Data made available to manufacturers through the replenishment model includes only information about the purchase itself (e.g., product information, limited purchaser details, the shipping location, and pricing). In general, manufacturers do not receive any underlying pharmacy claims data, which identifies the dispense date and payer for the generating prescriptions, for any individual replenishment order. Because 340B replenishment orders reflect units dispensed to many individuals, it is impossible for manufacturers to identify which units in the replenishment were dispensed to patients enrolled in specific forms of health coverage (i.e., Medicaid and Medicare). In other words, the purchase data manufacturers receive with a 340B replenishment order includes no information that can be used to identify the payer(s) for the previous prescriptions that generated the replenishment order. Conversely, claims data identifies the payer, but rarely includes information about the 340B status of a prescription. While 340B modifiers can identify the 340B status of a claim, these are rarely used, particularly for drugs dispensed by pharmacies. This means that only the CE knows the 340B status of any particular prescription with certainty. Further complicating data flows, replenishment orders can occur at any point after units are dispensed to 340B patients and sometimes occur months, if not years, post-dispense. In addition, 340B units are increasingly dispensed 3 not just at 340B covered entity pharmacies but also through large networks of contract pharmacies other than those authorized by the manufacturers lawful contract pharmacy policy. The rise of these unlawful alternative distribution models (ADMs) means that units sold to a covered entity at the 340B price are not necessarily dispensed by the entity itself or its authorized contract pharmacies. Under ADMs, the CE purchases the unit of a drug and physically redistributes the unit to offsite pharmacies where it is then dispensed. This behind-the-scenes transfer from the entity purchasing the drug to the pharmacy dispensing the drug is impossible for any outside entity, including manufacturers, to trace and creates even higher risk of both duplicate discounts and diversion. Similarly, another practice used by some entities for pharmacy claims is a credit-based replenishment model which does not involve the physical replenishment of 340B products but instead uses a financial adjustment to convert a non-340B purchase into a 340B purchase. These transactions are not transparent to either the manufacturer or to HRSA, violate HRSAs own contract pharmacy policy, and in the case of ADMs, violates the federal Food, Drug and Cosmetic Act as well. The rebate model will supply the claims data needed to track and eliminate these highly problematic practices. In some cases, manufacturers do receive pharmacy claims data from CEs as a condition of purchase for 340B units, most often specific to units dispensed at contract pharmacies (CPs). For instance, Novartis requires hospital covered entities to submit the following pharmacy claims data fields to be eligible to have 340B units shipped to a designated contract pharmacy: CE ID, date of service, date prescribed, National Drug Code (NDC), quantity, Rx number, service provider ID, payer bank identification number (BIN), and payer processor control number (PCN). Even receipt of this limited data from CEs leaves significant gaps in transparency that could enable duplicate discounts and diversion. For instance, Novartis does not currently require claims data from any grantee covered entity, from hospital in-house pharmacies, or from any hospital contract pharmacies in a number of states due to limitations under state laws. Furthermore, the pharmacy claims data received is often unreliable. For example, Novartis requires hospital covered entities to submit claims data only for 340B prescriptions dispensed through designated contract pharmacies, yet many covered entities report claim volumes that exceed their 340B purchases, sometimes by a substantial margin. In one instance, an entity submitted claims for units equal to 29 times the number of 340B units shipped to its designated contract pharmacy. Among the hospital covered entities that have submitted data to Novartis, 71% reported claims exceeding their 340B purchases. Therefore, in Novartiss experience, even claims data submitted directly by covered entities does not reliably identify 340B units, as those submissions frequently do not align with actual purchases. Lack of data parity leaves manufacturers with inadequate approaches to identifying duplicate discounts, adding considerable administrative burden Short of receiving accurate claims data directly from covered entities, as would occur in a rebate model, manufacturers have no access to data that reliably connects the 340B status of a prescription to the payer information needed to identify and prevent duplicate discounts, important protections guaranteed by law as to the Medicaid and Medicare programs. Instead, manufacturers have no choice but to piece together as best as possible data available from other sources (for instance, from Medicaid agencies, through the Medicare Transaction Facilitator 4 (MTF), or under a contractual agreement with a payer or its intermediaries), all of which rarely contain complete information about claims 340B status. Therefore, manufacturer efforts to identify duplicate discounts are hampered by reliance on non-comprehensive data sets that lack sufficient information to precisely pinpoint the 340B status of any particular claim. This imprecision not only enables innumerable duplicate discounts to occur due to under-identification of 340B claims but also spawns enormous administrative burden on all stakeholders. When manufacturers do identify likely duplicate discounts, the primary recourse is to initiate a good faith inquiry (GFI) to the CE. Frequently, manufacturer good faith inquiries are met with resistance or non-response by the CE or require several months of correspondence between the manufacturer and the CE. In the event that the GFI is not resolved satisfactorily, the recourse is to attempt a manufacturer audit of the CE, which requires an audit plan to be developed and approved by HRSA followed by weeks of intensive review of the CEs data and policies and procedures. In all of these instances, the automated provision of basic claims data to manufacturers would reduce much of this administrative burden by focusing GFIs and audits on those claims where concrete data already points to a duplicate discount. As the program continues to grow rapidly, it has become too large to be adequately managed through these existing processes and would be substantially streamlined through the implementation of a transparent rebate model, a standard business practice that is widely used in the commercial market and other government programs. De-duplicating 340B and MFP discounts (Question 5) In the absence of a rebate model, Novartis has no choice but to attempt to identify and prevent MFP-340B duplicate discounts using the limited data available to manufacturers. Dispensing pharmacies always have the option to self-identify 340B claims directly, either through submission of a clarification code or in the Beacon MFP rebate platform; however, pharmacies rarely use this option to self-identify 340B claims. The Berkeley Research Group, an affiliate of the Beacon platform, has noted that less than 0.5% of MFP claims or about 5% of estimated 340B claims have been self-identified as 340B.2 If not identified proactively as 340B by the dispenser, Novartis identifies duplicates based on direct matches of MFP claims in the 340B claims data submitted by CEs (based on matching prescription numbers, dispensing pharmacies, dates of service and NDCs), though this claims data is from a small share of potential 340B dispensers and may not be submitted accurately. To identify the remaining 340B prescriptions, Novartis has no other recourse but to identify 340B prescriptions indirectly based on either the dispensing pharmacy or prescriber (or a combination of both). Under this approach, prescriptions dispensed by pharmacies that are either a CEs in-house or contract pharmacy and that primarily purchase a product through their 340B account are identified as 340B. Similarly, prescriptions written by providers that primarily practice at a CE and are filled at the CEs in-house or contract pharmacies are identified as 340B. 2 Eleanor Blalock, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, Berkeley Research Group (Apr. 2026), available at: Effectuation-of-the-Maximum-Fair-Price-in-2026-and-Outlook-to-2027.pdf. 5 This indirect approach is necessarily less precise than the direct match pathway, missing many 340B claims while also potentially identifying non-340B claims as likely to be 340B. This approach has significant limitations, almost certainly fails to identify all potential duplicates, and generates unnecessary burden for both manufacturers and CEs. Unfortunately, there is no other potential approach for MFP-340B de-duplication available to manufacturers due to the fundamental lack of data parity in the 340B program. CEs always have the opportunity to dispute MFP discount denials that they believe were rendered based on incorrectly identified 340B status. In these instances, the CE must provide the relevant claims data to verify the correct 340B status of the prescription and Novartis promptly reviews this data and adjusts payment amounts accordingly in accordance with CMS standards and under threat of significant Civil Monetary Penalties. Ultimately, the only way to ensure both the accurate and timely identification of 340B prescriptions is through up-front claims data submission by the CE to the manufacturer. Today, the necessary use of indirect methods by manufacturers to identify the 340B status of claims results in CEs needing to submit this claims data anyway, except retrospectively in burdensome, individualized disputes. In contrast, the 340B rebate model would provide transparency and accuracy in these deduplication efforts, while reducing administrative burden on covered entities in cases where probabilistic methods are inaccurate. De-duplication of Medicaid and 340B (Question 5) Novartiss current duplicate discount procedures for Medicaid rely heavily on Medicaid Exclusion File (MEF) and claim-level data provided by states. For Medicaid fee-for-service (FFS), Novartis regularly reviews this claims data and disputes claims where the pharmacy or providers National Provider Identifier (NPI) is listed in the MEF for the relevant quarter. For Medicaid managed care, Novartis also uses the NPIs on the MEF to identify duplicate claims and works with states and 3rd parties to align on the status of each claim. In addition, Novartis leverages claim modifiers to identify or verify the 340B status of a claim, when available. In Novartiss experience, there are numerous challenges in deduplicating Medicaid and 340B discounts. States are not always strong partners in preventing these duplicates, sometimes failing to respond to inquiries about potential duplicates or limiting manufacturer access to claim-level data. In addition, states sometimes push back on attempts to identify duplicates in Medicaid managed care given the absence of guidance from HRSA in this area. In some instances, when potential duplicates are identified in managed care programs, states do not act on these duplicates and instead direct manufacturers to engage CEs (who are themselves routinely unwilling to coordinate with manufacturers). Lastly, the claims data made available to manufacturers is often incomplete, with essential claim modifiers or submission clarification codes not used or missing. The 340B rebate model would work to streamline and reduce administrative burdens associated with these disputes as well, benefiting not just the manufacturer but state Medicaid programs as well. 6 A rebate model would restore program integrity and prevent duplicate discounts by establishing necessary data parity for manufacturers (Question 7) A welldesigned 340B Rebate Model Pilot Program would strengthen program integrity by improving transparency, reducing the risk of duplicate discounts and diversion, and restoring data parity between manufacturers and covered entities. Under the current replenishment model, manufacturers generally lack timely, claimlevel data needed to verify 340B eligibility and payer status. This limitation significantly constrains their ability to prevent duplicate discounts across Medicaid, Medicare Part D inflation rebates, and the Maximum Fair Price programchallenges that will be exacerbated by implementation of the Inflation Reduction Act. A rebatebased model would allow manufacturers to review detailed claims data before a discount is paid, enabling more accurate verification of eligibility and compliance and avoiding unnecessary disputes and administrative burden. By aligning discount payment with verified utilization and leveraging data systems already maintained by covered entities and their vendors, the rebate model would enhance accountability, support more effective oversight, and reinforce public confidence that the 340B program is operating as Congress intended. Implementing a 340B rebatebased model would significantly improve manufacturers ability to prevent duplicate discounts by enabling prospective review of detailed, claimlevel dataincluding payer informationbefore a discount is issued, rather than retrospectively under the current model. This approach allows manufacturers to confirm 340B eligibility and the applicability of Medicaid, Medicare Part D inflation rebates, and Maximum Fair Price requirements, thereby reducing the risk of overlapping discounts, as required by statute. Tying payment to verified utilization would also reduce diversion and improper claims by discouraging retroactive reclassification and limiting rebates to eligible dispenses. In addition, the rebate model would increase pricing transparency by aligning discounts with documented claims data and creating a clearer audit trail for manufacturers, covered entities, state Medicaid programs, CMS, and HRSA, strengthening oversight with limited additional administrative burden. Administrative burden of a rebate model (Question 1) Novartis believes that a rebate model could actually reduce, rather than increase, the administrative burden in the 340B program. For instance, a rebate model, if applied to all drugs, would limit the need for manufacturers to request or require the submission of claims data by CEs, meaning that the rebate model could replace existing data transmission rather than add to it. Furthermore, CEs and their third-party administrators (TPAs) have already begun to automate claims data submissions to manufacturers and we expect that rebate request submissions will also be heavily automated once the model is operational. In addition, aligning discounts with verified claims data would limit burden associated with GFIs and audits for all stakeholders, including CEs, manufacturers, and HRSA. Prospective data access would reduce reliance on posthoc audits, disputes, and goodfaith inquiries driven by incomplete information. As mentioned above, the rebate model would instead focus these compliance activities on those instances where there is strong, data-driven evidence of a violation of the statute. 7 Currently software systems are now available to manage the administration of the rebate model for CEs and manufacturers, reducing the barrier to entry and administrative burden for a rebate model. For the rebate model Pilot that was scheduled to take effect on January 1, 2026, Novartis planned to provide the necessary software at no cost to the CEs, along with support and education from the software provider. In addition, multiple TPAs had publicly indicated their ability to help automate the claim submission for covered entities. This demonstrates that a rebate model could be easily implemented and automated with limited administrative burden. Lastly, we do not believe that data collection associated with rebate model requests will constitute an added burden on CEs. These data, discussed below, must already be collected to verify 340B eligibility under the existing replenishment model and maintained for future compliance and audit purposes, resulting in any incremental costs associated with the rebate model to be limited and easily outweighed by the benefits of improved accuracy, accountability, and confidence in the programs integrity. CE cashflow under a rebate model (Question 2) As mentioned above, covered entities today primarily access 340B pricing through replenishment, in which the CE (or their contract pharmacy) purchases the drug first at the non-340B price and then seeks 340B pricing on a replenishment order when a 340B-eligible unit is dispensed. Therefore, many 340B units today are initially purchased at non-340B prices and many units that are purchased at 340B prices actually reflect discounts generated by earlier units. For this reason, 340B discounts today are not typically provided upfront in the first place, so transitioning to a rebate model would not have a significant, negative impact on CE cashflow, assuming a 10-day payment window for manufacturers. In fact, pharmaceutical supply chain experts at IQVIA have concluded that CE cashflow under a rebate model is comparable to, if not more advantageous than, the existing inventory models that CEs use to access 340B prices. If CEs needed to receive financing to manage the float created by the delay between a drugs acquisition and its purchase, IQVIA estimates that a rebate model would generate interest costs of 0.19% of the drugs price for CE- owned pharmacies.3 This is identical to the interest costs associated with the physical inventory, physical replenishment, and presumptive credit models, and lower than the credit-based replenishment model. For CP-owned pharmacies, IQVIA estimates that the rebate model is more favorable than other approaches currently in use. Minimally necessary data elements for a successful rebate model (Question 5) As we have previously noted, the minimum data necessary for an effective rebate model must include all of the data needed to prevent duplicate discounts. This includes data linking the 340B status of the drug with the payer who ultimately covered the drug when dispensed to the patient. To enhance program integrity while minimizing burden, HRSA should require a standardized set of minimally necessary pharmacyand, where applicable, medicalclaims 3 Chuan Sun, Shanyue Zeng, William Sarraille, & Rory Martin, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program, IQVIA (Dec. 5, 2025), available at: https://www.iqvia.com/locations/united-states/library/fact-sheets/how-will-a-rebate-model-impact-cash-flow-in- the-340b-drug-pricing-program. 8 data sufficient to verify eligibility, payer status, and evidence of purchase for which the 340B rebate is being requested for prior to rebate payment. These data elements currently overlap and are tied to data required from CEs in a HRSA audit. In addition to the pharmacy claim fields listed in the August 2025 Program Notice,4 Novartis requests that HRSA include the following core purchase data elements to ensure that manufacturers have the appropriate WAC data needed to make accurate transparent rebate payments: a. Wholesaler name b. Account number c. WAC Invoice date d. WAC Invoice number e. Ship-to pharmacy NPI f. Purchase NDC/quantity Without this information, manufacturers may not be able to validate the type of purchase and price of the specific units dispensed, which is necessary to calculate the amount of the rebate. The absence of identifiable purchase data from the CE creates continued opacity and can lead to payment of 340B rebates on the wrong purchase. Wholesalers do not currently provide the level of transparent purchase information to manufacturers to adequately identify what unit the CEs might request a rebate on. Overall, CEs have added complexity in their wholesaler arrangements that are not transparent to the manufacturers. We would also like to clarify that the pharmacy claim field, Service Provider ID, proposed in the August 2025 Program Notice refers specifically to the dispensing pharmacys National Provider Identifier (NPI). Additionally, we recommend that HRSA include appropriate medical claim data for provider-administered drugs, including: a. Drug billing identifier (NDC/quantity/unit of measure) and payment code/HCPCS code b. Claim and line number c. Rendering Service/Billing Provider ID d. Rendering Provider NPI e. Date of Service f. Payer Name and ID Rejections of rebate requests (Question 3) There are limited instances in which manufacturers should be permitted to deny a rebate request. This includes claims data submissions that are incomplete (e.g., key fields missing), clearly erroneous (e.g., aberrant quantities), or clearly duplicative, since these submissions do not constitute bona fide rebate requests. In addition, the manufacturer should be permitted to deny the rebate requests in clear instances of illegal activity or amend rebate amounts, where necessary, pending normal processes to resolve issues in the program. 4 90 Fed. Reg. 36,163 (Aug. 1, 2025) (corrected 90 Fed. Reg. 38,165 (Aug. 7, 2025)). 9 The manufacturer should provide the reason for the denial and contact information for the CE to initiate a good faith inquiry if the CE believes the reason for the denial is incorrect. We encourage HRSA to work with stakeholders to develop standardized processes and timelines in this area to streamline the resolution of disputes. Recommended manufacturer reporting to HRSA (Question 6) Given the lack of transparency that currently exists in the 340B program, Novartis believes it is essential for HRSA, other government agencies, and the public to have additional information about all aspects of program. In particular, it is essential for HRSA to receive and publish data aggregated across manufacturers on key metrics related to the operation of the Pilot to ensure broad public understanding of its impact. Manufacturer reporting to HRSA under the Pilot should be designed to support this broader transparency. We believe manufacturer reporting should occur on a quarterly basis to align with changes to the 340B ceiling price and streamlined such that it can be automated to the extent possible. Most importantly, we believe the data manufacturers report to HRSA should support the Pilots evaluation, including data to permit analysis of the number and how quickly rebates are paid, the number of rebate requests that are rejected (and why), and the number of duplicate discounts identified. * * * * * Novartis appreciates the opportunity to comment on HRSAs Request for Information for the 340B Rebate Model Pilot Program. We welcome the opportunity to answer any questions you may have about the information provided above. Please contact me at lisa-2.nelson@novartis.com. Sincerely, Lisa Nelson Vice President & Head US Public Policy
HRSA-2026-0001-1662Orlando Health2026-04-17T04:00Z11,035 chars
See attached file(s) ORLANDO HEALTH' OrlandoHealth.com ADMINISTRATION 1414 Kuhl Ave., MP 56 l Orlando, FL 32806 April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Orlando Health appreciates the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. We are a healthcare system and depend on 340B savings to advance the program's statutory goals of expanding access to comprehensive services to our community. We urge HRSA to consider the cost of rebate models on essential hospitals like ours and not move forward with a rebate model or related pilot program because they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. Orlando Health is a non-profit healthcare system located in Florida, but also serving Alabama and Puerto Rico, that serves millions of patients each year. The 340B program enables our health system to maintain access to essential medications and sustain services for vulnerable patients across our service area. Utilizing 340B savings, we can support vital programs, such as prescription assistance and patient coordinator services that ensure timely access to oncology and other lifesaving therapies. Without these programs, many patients in our communities would be forced to delay or forgo treatment due to an inability to afford necessary medications. Changes to the 340B program that reduce program benefits and cut 340B savings-as a rebate model wouldwill disproportionately affect patients with the greatest financial and healthcare needs. We appreciate the opportunity to share specific details on how rebate models would affect our ability to serve patients. We continue to question the legality of allowing rebate models that undermine HRSA's authority and upend 30 years of established precedent for delivering benefits to patients and the health systems that serve them. For additional comments on our legal ORLANDO HEALTH' OrlandoHealth.com ADMINISTRATION 1414 Kuhl Ave., MP 56 l Orlando, FL 32806 concerns with rebate models, please refer to comments also submitted by America's Essential Hospitals. The Financial and Operational Costs of Rebate Models Are Unsustainable Essential hospitals provide a disproportionate share of uncompensated and under-reimbursed care, and this commitment to underserved communities brings unique financial challenges. In 2023, members of America's Essential Hospitals had an aggregate operating margin of -7.1%, which was far worse than the aggregate operating margins for all other hospitals (-2.3%).2 Even if rebate models work as intended, they would disrupt our finances by substantially increasing our administrative costs, limiting our hospital's access to 340B subprime discounts, and requiring our hospital to float substantial sums of money to boost pharmaceutical companies' profits. If pharmaceutical companies deny rebates for our 340B-eligible patients, we will incur substantial additional costs. Overall, we estimate that the implementation of a rebate model will cost our health system at least $4.8M in the first year. Administrative Burden from Rebate Model Implementation New 340B requirements from manufacturers add substantial administrative costs to the program that diverts funding from patient care. Our healthcare system currently employs six full-time employees (FTEs) to manage 340B compliance. We anticipate that a limited rebate pilot, including just the products selected for the Medicare Drug Price Negotiation Selected Drug list, and claims fields included in the initial pilot will necessitate two additional FTEs to manage claims level tracking and submission as well as reconciliation and dispute management. Managing different manufacturer requirements will create significant operational complexity beyond the current 340B system. Preparing to implement the previously proposed rebate program involved staff coordination across a myriad departments, including compliance, pharmacy, operations and supply chain, accounting, treasury, and legal. This complex coordination demands significant staff engagement to validate systems, processes, and setups that are ultimately managed and controlled by pharmaceutical manufacturers. Loss of subceiling discounts By requiring covered entities to purchase drugs at wholesale acquisition costs instead of receiving up-front discounts, rebate models appear to eliminate the possibility for covered entities to access 340B subceiling discounts. Our system would lose these savings, increasing hospital costs and undermining patient access to care. ORLANDO HEALTH' OrlandoHealth.com ADMINISTRATION 1414 Kuhl Ave., MP 56 l Orlando, FL 32806 Costs of floating funding to pharmaceutical companies By fundamentally changing the nature of the 340B rebate program from a point-of-sale discount to a post-purchase reimbursement system, rebate models would require hospitals to float substantial sums of money to manufacturers, which would reduce our cash on hand and the interest that it could have generated. This policy allows manufacturers to generate interest from money owed to safety net providers, rather than allowing those monies to be held by our health system. Our bond covenants necessitate a minimum amount of cash-on-hand. Requiring our facility to float this money to for-profit pharmaceutical manufacturers harms our bond rating and our ability to acquire future capital. Financial uncertainty could delay planned investments in patient care. Added Costs For Maintaining an Adequate Supply of Patient Drugs The 340B program is currently designed to provide up-front discounts, which help hospitals ensure an adequate supply of drugs to meet their patients' needshowever rare those needs may be. Ensuring an adequate supply of drugs is important for responding to emergencies and meeting the needs of patients with complex care needs. However, under a rebate model, hospitals would lose access to 340B pricing for stockpiled drugs that are not able to be used because of the everyday realities of patient care. The costs of this policy will fall on patients with rare diseases and complex care needs who already have challenges accessing the care they need. Potential Costs of Inappropriately Denied or Significantly Delayed Rebates We must also assume that some percentage of claims will be inappropriately denied; fighting and resolvingthese denials will involve significant capital outlay. Given the known issues with Beacon's faulty processes, we estimate a denial rate of approximately 20%, resulting in an increased annual impact of $1.5M in denied claims. HRSA has previously acknowledged the likely challenge of delayed or denied rebates but has failed to propose efficient and enforceable methods to address these issues. HRSA's previously issued FAQ indicate that, in the event of a dispute, "covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue," and only once the parties have failed to find a consensus should the covered entity contact a generic HRSA email. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment when manufacturers are responsible for the failures. Potential Costs of Unauthorized Manufacturer Requirements Based on our experience with the pre-implementation of HRSA's rebate pilot, we are concerned that manufacturers will change requirements and impose additional burdens that will add to our ORLANDO HEALTH' OrlandoHealth.com ADMINISTRATION 1414 Kuhl Ave., MP 56 l Orlando, FL 32806 administrative costs compromise our ability to receive the 340B savings that the statute requires. Resources expended navigating manufacturers' byzantine systems add further administrative burden to the 340B programto the detriment of hospitals that treat a disproportionate share of low-income patients or operate in rural areas. For example, changes to Beacon guidance during prior implementation planning materially affected our operational assumptions, raising concerns about the lack of transparent oversight. Manufacturers and the Beacon platform updated the Beacon FAQ page without any public notice. We saw the Beacon platform amend responses on its FAQ page without any notice or clarification. Reliance on an FAQ page, particularly one hosted by an interested private party rather than a federal agency, is an inappropriate and unreliable means of communicating changes to a statutorily authorized program. Any changes to the 340B rebate pilot must be made and authorized by HRSA, not by manufacturers with a pecuniary interest in limiting the number of 340B discounts. We are particularly concerned by the double standards the Beacon platform proposes with regard to information technology security. Covered entities are expected to agree to Beacon's data requirements; however, Beacon refused to complete a simple security questionnaire to ensure compliance with onboarded data. Covered entities were notified that, "The Beacon team is currently not completing security questionnaires. l can direct you to our security support page for the available details," with a link to Beacon's public page on protocols.3 The current Beacon platform functionality for Maximum Fair Price refunds presents several challenges. Notably, there is a critical gap in the platform's ability to cross-reference data with the Medicare Transaction Facilitator (MTF) portal, making it difficult to validate claims that should generate rebates for our system. These limitations result in claims adjudication issues and reduced confidence in rebate eligibility. ln addition, the Beacon platform lacks payment-level summaries and robust reconciliation capabilities for claims denied rebate, further compounding the financial impact of the upfront cost of medications under the current state. *** The 340B program allows hospitals like Orlando Health Orlando Regional Medical Center, Orlando Health Bayfront Hospital, and Orlando Health Health Central Hospitalto sustain essential services and expand access to care. Policies that delay or reduce access to 340B savings will directly affect patient care in our community. We deeply appreciate the opportunity ORLANDO HEALTI3" OrlandoHealth.com ADMINISTRATION 1414 Kuhl Ave., MP 56 l Orlando, FL 32806 to comment on this RFI and encourage HRSA to weigh the tremendous negative impact to the program and wholly reject the concept of a rebate model for the 340B Drug Pricing Program. Sincerely, effrey Oliver Chief Pharmacy Officer Orlando Health ,34 1- I y M ' AIM < II ' I - ti ES 14- /, u I
HRSA-2026-0001-1663Mercy Health System, St. Louis MO.2026-04-17T04:00Z69,182 chars
See attached letter. April 16 , 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Mercy Health System, representing 31 340B covered entities spanning Missouri, Oklahoma, Kansas and Arkansas, responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Mercy and other Covered Entities. As 340B-participating hospitals, Mercy is a core component of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Mercy Health System participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Mercys 340B Program participation enables us to commit tens of millions of dollars per year to the communities and safety net populations we serve. Each year, Mercy provides nearly a half of billion dollars in free and uncompensated care in the communities we serve. There are many initiatives across our covered entity landscape that will be jeopardized with changes to how the benefit is realized. Some of our guaranteed savings continue to be used to support initiatives with behavioral health needs, substance use recovery initiatives, support staff for oncology patients, pre-natal and post-natal care, direct patient assistance with cost of Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 2 medications, outreach services like mobile mammography and other areas outlined in community health needs assessments. Mercy also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Mercy wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Mercy submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Mercy believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance must be grounded in substantial changes to law, policy, or public health priorities. Mercy urges HRSA to identify and communicate the factors that might 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 3 warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 2. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH MERCYS INTEREST IN CARING FOR PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would drastically shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Mercy and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 4 Mercy when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 3. HOW COULD HRSA OR MERCY TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Mercy. For example, our analysis shows 44 distinct pharmaceutical manufacturers have imposed one or more 340B contract-pharmacy restrictions since 2020. Collectively, those manufacturers have issued well over 250 individual policy changes including amendments, expansions, state carve-outs, product additions, enforcement updates, etc. Their policy activity accelerated sharply in 2022-2025 with many manufacturers revising policies multiple times per year. To name a few of the manufacturers with listed policy changes of some sort we offer the following: Manufacturer # of Policy Revisions AbbVie 13 Alkermes 10 Amgen 11 Astra Zeneca 7 Bayer 6 Biogen 11 Boehringer Ingelheim 8 Bristol Myers Squibb 14 Eli Lilly 8 Glaxo SmithKline 14 The disruption this is causing continues to divert staff in reviewing, monitoring and reacting to various policy implications. Some of the manufacturers require data submission through a PHRMA owned database, 340BESP. This platform is designed to match claims that the manufacturer(s) use to determine if they will consider them conforming claims. Manufacturers have designed their own qualification measures within the Beacon ESP platform that is often times incorrect. If non-conforming claims reach a level that the manufacturers feel points to non- compliance, they threaten to remove our pricing. The data they request to clear up their incorrect setups is time consuming and, in some cases, completely inaccurate. We have been asked to prove Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 5 that we did not purchase certain drugs from invoices that are not ours. Our drug wholesalers DEA number was tied to one of our pharmacies in ESP so purchase data from our wholesaler distribution center was linked to purchases for that pharmacy. Mercys ambulatory pharmacy network is designed to foster convenience for our patients, however some of the manufacturer policies limit access to 340B to a designated pharmacy. In this environment a patients prescription may qualify for 340B at one location, but not another of our Mercy pharmacies even though we have contract pharmacy arrangements designated for both locations. Many states have come to the aid of our 340B covered entities to try to stop these practices and protect our contract pharmacy arrangements. Despite our protections at the state level, some manufacturers choose to ignore the state laws or agree to offer pricing through other limitations of access. This requires constant monitoring by our covered entities and follow-up between our wholesaler, the 340B ESP platform sponsors and the manufacturer to resolve issues. Pricing may drop for an unknow reason that eventually is restored but the disruption and need to assess and ask for credit-rebills is a true administrative burden. Regarding contract pharmacies generally: ... manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings is not guaranteed and could directly limit the extent to which we can support our communities. Yet, somehow, this isnt enough for the manufacturers or, apparently, HHS and HRSA OPA. Some of our Critical Access Hospitals rely heavily on contract pharmacies to keep their doors open. Our finance leaders have the difficult task of trying to predict if this benefit will continue or if different decisions need to be made on supporting some of our rural communities which could result in closure. Regarding data disclosures: ... manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Regarding good-faith inquiries: ...manufacturers employees and contractors such as Kalderos have sent us overreaching demands. When our operations change (e.g., if we hire a new physician or open a new on-site clinic), we forego 340B purchases to avoid a so-called unusual change in purchases. A rebate model would only further exacerbate these issues. Our drug procurement team and pharmacy leadership have routine calls with our wholesaler so they can try to defend any channel shifts in procurement from manufacturer scrutiny. Manufacturers have shifted some drugs to limited distribution channels, so even though our contracted and wholly owned pharmacy is able to obtain the drug, they will not offer it through our contracted pharmacy arrangement at a 340B price unless we contract differently and utilize one of their limited distribution partners for procurement. Regarding litigation/subpoenas: manufacturers challenging our states contract pharmacy law have issued subpoenas, demanding access to Mercys policies, contracts, and financial records. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 6 These engagements require us to expend scarce human and financial resources on oversight staff, outside legal counsel and more for an unclear benefit. Manufacturer resources can and would be better spent on meeting their own MFP-related obligations instead of compelling our participation in court proceedings. To date, we have been able to quash Astra Zenecas requests through their litigation with AstraZeneca v. Bailey, No. 2:24-cv-04143 and subpoena to Mercy Health. This is not without much involvement by legal and external counsel fees. Regarding anticipated rebate denials: We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. Manufacturers have made it easy to mark a drug that has been given an MFP rebate as 340B eligible through the Beacon MFP portal. In our efforts to help the manufacturer deduplicate claims they have paid MFP and we considered 340B eligible, we can click a button to identify it as 340B. Those are accepted and processed to de-duplicate the claim with no questions asked. For claims denied MFP because the manufacturer has identified it as 340B eligible and we dispute their finding, we must submit a good faith inquiry (GFI) through their resolution center or an involved process directly to CMS for each claim. These GFIs are met with requests to submit claims data for wholesaler invoices to support differences in what we are reporting to what the manufacturers data is showing in the Beacon MFP portal comparing MTF data to data submission elements through 340B ESP. In some cases, the invoices requested are not our invoice. For drugs dispensed through our wholly owned pharmacy, manufacturers such as Johnson & Johnson, Bristol Myers Squibb, and Astra Zeneca have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. After our review of eligible 340B claims data through our third-party administrator software and confirmation that the prescription did not meet 340B eligibility criteria, they have still denied our request for the MFP rebate to be paid. This means we have neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. In a scenario of 340B rebate model, we will be paying a WAC price for these initial drugs with obvious denials to MFP rebates when we are not able to consider a prescription eligible for 340B through statutory requirements. Regarding entity-owned pharmacy float : Finally, a float will occur at the dispensing pharmacy level under the MDPNP and 340B rebate pilot scenario where our pharmacy buys the 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 7 manufacturers drug at the WAC price and waits for an MDPNP refund or a 340B refund. A 340B rebate model will dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Mercys purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Mercy trust them to give up money they are not entitled to? In the event credits are applied, this increases finance accounting complexity when we are trying to match expected rebates per claim and that association will not always provide an accurate picture in this scenario. 4. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO MERCY TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Mercy would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA must develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments and make manufacturers fiscally responsible in a reasonable timeframe for inaccuracies and lack of follow through on rebate claims (probably needs better wording, but see what you think). 5. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. Based on currently available remediation, Mercy in no way thinks that a conversion to a rebate model puts the public interest ahead of private manufacturers. 9 42 U.S.C. 256b(a)(1). Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 8 For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 6. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Mercy has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments, which makes us skeptical that such actions would be undertaken if a rebate model were found to be legal.. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR process, which has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Mercy entered an ADR petition (231120-20) on April 18th, 2024, attempting to stop early contract pharmacy restrictions imposed by Teva. It was not until April 14th, 2026 that HRSA updated the petition stating that HRSAs contract pharmacy policy remains a topic of legal dispute, which is a situation beyond the control of the 340B ADR Panel and creates additional complexities that warrant additional time to review the claims. How effective and timely reviewed will ADR petitions be in a dispute over 340B rebate denials knowing they could/most likely would follow the same poor experience? In the contract pharmacy debate it is truly loss of 340B benefit that we face, but our increased risk with costs under a rebate model is an entirely different and risk-based concern that puts our program (all 340B programs) in jeopardy. This is contrary to the intent of the program. Will the ADR panels be equipped to timely and effectively handle the volume of disputes we would expect based on manufacturer actions in other areas of the program? History does not alleviate this concern. Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant serious and publicly documented consideration. 7. WHAT STATUTE OR REGULATION PERMITS MERCY TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 9 under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 8. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE MERCYS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF MERCY? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE MERCY FOR THE VALUE OF ITS DATA? One of Mercys principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Mercy for that value? Isnt this the exact harm the Takings Clause prohibits? 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Mercys perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Mercys patient population, we serve many other patients, including patients with no coverage at all. Requiring Mercy to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 10 expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. It is important to note that these upfront costs in many cases are higher acquisition costs we will be paying than if we were not in the 340B program. Rural Referral Centers, Critical Access Hospitals and Sole Community Hospitals that do not have a GPO prohibition requirement, will be paying much higher prices to attain these drugs at a wholesale acquisition cost than they have ever had to do while being a part of the 340B program. This seems counterintuitive to the mission and reason 340B was established as a benefit to stretch scarce federal resources and expand care for our patients in direct assistance and expansion of services. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO MERCY? IF NOT, WHY NOT? As noted above, Mercy firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Mercy has reached out in good faith to some of the manufacturer policies that fail to get a response. When Amgen updated their policy in February of 2024, they require designation of 1 contract pharmacy to a covered entity and require data submission through the 340B ESP platform. That pharmacy designation must be within 40 miles of the covered entity. Mercy requested exceptions based on our centralization of some pharmacy services that exceed the 40-mile radius as well as communities where we have multiple wholly owned pharmacies to service our patients needs. It is never our intent to take away patient choice of where their prescriptions are filled, so this is a reasonable ask to extend their limitations beyond one contract pharmacy arrangement. In addition, once you designate a pharmacy, that designation is locked in for 1 year. Although manufacturers are allowed to modify their policy multiple times within a year if they desire, they are less than flexible on a potential change in patient volumes that may benefit us within their restrictive policy. There has been no flexibility to date to consider things outside of these restrictive policies that do not make Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 11 sense for hospitals taking care of patients. Some manufacturers have allowed exceptions based on state contract pharmacy protections to their overall policy restrictions and in a system like ours, that means we have very different setups with manufacturers if they are contract arrangements in Oklahoma and Kansas versus contracts in Missouri and Arkansas. When a health system is trying to contain costs and provide centralized services for our patients with complex pharmacy needs like specialty pharmacy, these policies are designed to disrupt that continuity for our patients and our 340B program. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Mercy urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON MERCY? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Mercy to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Mercy has attempted to negotiate reasonable terms and conditions with Second Sight, but those overtures were rejected in their entirety without justification. Mercy sent a detailed notice to Second Site with legal reviewed redlines asking to address some of our most important concerns with their terms. This letter was sent from Mercys Executive Vice President and Chief Operating Officer. In just over an hour of sending that request a notice was sent back from Beacon Channel Management that they do not accept redlines to their Terms of Use outside of revisions required by state law for state owned entities. 12 See 45 C.F.R. 164.501. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 12 If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Mercy is deeply concerned that a rebate model would empower manufacturers to further abuse the program. They already clearly have a history of doing it. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? Regardless of your decision, manufacturers need much more oversight. 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Mercy hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submission such as 340B modifiers and other claim details without shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 13 transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Mercy encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experience including use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Mercy maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Our health system currently manages 340B Program operations through centralized governance, standardized policies, and shared service models, allowing us to control administrative costs while maintaining high compliance standards. Total annual 340B transactions (systemwide): 211,000 purchasing transactions occurred at a 340B price through our wholesaler, which represents many more individual patient transactions accumulating up to a level of purchase. Annual systemwide administrative costs: $3.1M These costs are stable, predictable, and scalable under the existing upfront discount model because pricing certainty occurs at the point of purchase. Key 340B cost drivers are already substantial and include: Compliance staffing and oversight - $1.45M Split-billing software and contract pharmacy administration - $1.5M Audit readiness and data validation - $113,000 Despite these costs, the upfront model allows our system to realize 340B savings in real time, which is essential to funding real-time patient care. A rebate-based model would materially and permanently increase administrative costs across our health system. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 14 Incremental costs would include both one-time startup and ongoing recurring expenses: One-time costs we must consider: o Redesign of pharmacy, billing, and finance workflows o IT system development and integration o Staff training across multiple hospitals Estimated Costs: Unknown but when multiple platforms will be considered and manufacturers having brevity to change policies, this will be a one-time cost until it is not. Ongoing costs: o Claim-level rebate identification and submission o Continuous reconciliation and payment tracking o Denial review, appeals, and documentation o Continuous updates to system and monitoring of the flow of data Estimated impact: Initially will require 3 FTEs based on complexity and number of drugs to track throughout the system. Depending on how many denials or manufacturer barriers are introduced, we expect this to be high administrative burden requiring constant reassessment to ensure we have enough FTEs to respond to the disruption created by a rebate model. There are downstream effects to other departments working on denials (legal, pharmacy, finance), billing (Hospital and Professional billing), local work queue management to rework billing modifiers due to patient payor changes, accounts payable to align rebate payments to proper accounting units (finance) and overall expected to realized rebate analysis for financial viability . Due to the complexity and potential for error with differing manufacturer policies, once we understand that risk it is likely we will need additional external reviews to validate our processes that are not contemplated at this time. These costs would exist in addition to, not in place of, existing 340B compliance costs. Estimates are based on: Experience administering Medicaid and commercial rebate-like programs Transaction volume across multiple hospitals and pharmacies Known denial and appeal rates in rebate environments Labor requirements for manual exception handling Current processes in dealing with manufacturers to effectuate Maximum Fair Price (MFP) rebates and 340B denials through the Medicare Transaction Facilitator and the Beacon MFP Portals. This is not sustainable and will only get worse with additional drugs/manufacturers added each year. Incremental costs would cover: Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 15 Rebate claim generation and submission data requirements that differ in the contract pharmacy setting compared to the mixed-use hospital claim data. Data requirements proposed on the hospital claims data will be administratively burdensome based on having to submit a health plan ID. This health plan ID is not posted and extracted from hospital billing until 3 days post close of a patient claim. Timing of this close and data extraction based on set parameters will introduce data elements that are not populated and subsequently require re-submission from a non-automated route. Manufacturer payment monitoring will be an increased administrative burden. Drug costs are an expense tracked very closely for health systems. Rebates that are incrementally being paid to offset drug costs yet batched for claims ready to be paid by manufacturers through varying policies will be very difficult to match up in our financials and identify anomalies. Getting those payments identified in the correct accounts payable buckets will be an increased administrative burden that we do not deal with today. Applied credits for future rebate expectations will fragment the claim to rebate analysis when manufacturers are correcting over rebated or under rebated claims. Any claims tied up in a good faith inquiry or resolution process will require us to float that higher WAC cost even longer. Monitoring and responding to the manufacturer-imposed data to correct good faith inquiries has already proven to be an administrative burden. Dispute resolutions and appeals are very concerning regarding the volumes of claims and different policies by manufacturers. With various platforms being created, manufacturer policies, their control of all the data and rebate by the manufacturer, the dispute resolution process will be heavily controlled by the manufacturer. Any system developed outside of the manufacturer to resolve good faith inquiries or disputes will not be able to handle the volume of disputes further disrupting effectuation of rebates and the benefit that 340B is intended to provide to our mission. Documentation retention for audits will be challenging. Billing modifiers for Medicare and Medicaid claims is already a burdensome area for managing 340B claims. Billing modifiers are required to alert both Medicare and Medicaid with 340B transactions based on elements of our HRSA/OPAIS registration for each covered entity. Each state Medicaid agency can have different policies based on which modifiers they require and, in some cases, require modifiers to acknowledge 340B was not used. Overapplying modifiers on claims as 340B eligible could deprive the state Medicaid agency of maximizing their rebates. Underapplying modifiers risk a duplicate discount to the manufacturer, and it is a compliance concern that covered entities can be audited against. In a rebate model, applying this billing modifier to a claim that we determine is eligible for 340B pricing, yet we may not receive a rebate on, is concerning and a very real possibility. This scenario will be difficult to defend and trace back to billing submission compared to rebate realization. Some of the billing requirements for 340B eligible claims are required to be billed at actual acquisition cost. If our upfront purchase is at a wholesale acquisition cost yet we are considering 340B eligible, an override of that claims level submission will have to occur, so we bill Medicaid appropriately, yet we are at the discretion of the manufacturer in honoring that claim as 340B eligible. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 16 Importantly, conversion of some drugs to a rebate model would not eliminate the need to operate the upfront 340B infrastructure for non-rebate drugs, resulting in dual parallel administrative systems. Converting all drugs to a rebate model would be the end of the 340B programs guaranteed drug cost benefits to serve our most vulnerable patient populations. Even if HRSA attempted to offset administrative costs, accurately quantifying such offsets would be highly complex, administratively burdensome, and unlikely to fully compensate for systemwide impactsparticularly for large multi-entity systems. These incremental burdens would reduce net 340B benefit and divert resources away from patient-facing services. The risk of guaranteed savings and cash flow implications of the higher initial price will strain earmarked dollars that are funding certain initiatives within our system to meet direct patient benefit or community health needs. The higher upfront costs are at a price point that most of our hospitals would not be paying if we were not in the 340B program. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. A rebate model would require additional staffing to address the increase in administrative burden and risk to our health system. This is counterproductive to the needs in health care today. Staffing is a major stressor for health care and the most impactful area to increase staffing is in our clinical areas to support the growing needs of our patients complex medical conditions. A program that is intended to stretch scarce federal resources and allow us to expand services and provide more comprehensive care to our patients should really scrutinize increased administrative burden that is taking resources from clinical care to administer new requirements in a program that has been in existence for 30 years. The program is working as intended but the manufacturers are successfully introducing disruption and scrutiny based on a program they do not like and would like to see marginalized. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 17 compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Mercy to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Estimated systemwide staffing impact is difficult to predict. Based on the volumes of claims and current estimates Mercy would need at least 3 FTEs to oversee a rebate pilot in the initial stages. This would require incremental additions based on volumes but could be much higher based on how the manufacturers respond to policy variance, data platforms, data requests, ability to resolve disputes and overall rebate pilot success. Current experience with manufacturers and resolving de-duplication or MFP rebates is resulting in a highly complex data model requiring much oversight to work with manufacturers in good faith inquiries. Their control of these data elements are producing an environment rich in errors and high administrative burden to file good faith inquiries. Delaying this in a rebate model where we have cash flow implications at risk will be a compounded risk that we will have not have choice but to assign FTEs trying to mitigate and retain our benefit. Roles could include rebate analysts, finance reconciliation staff, IT support, and compliance specialists. These positions would likely be permanent, given the ongoing nature of rebate administration. This represents a structural shift in workforce focus away from care delivery and toward administrative processing. c. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Purchasing drugs at a volume of purchase quantity through a wholesaler and then being incrementally rebated to that purchase will require software to track that purchase and the incremental rebate amounts associated to that purchase. These incremental rebates will also be batched at a covered entity level through our accounts processing department Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 18 requiring them to apply that rebate payment across multiple accounting units to offset the initial drug cost to the correct accounting unit. Mercy would expect software development fees or third- party software needs to operationalize the complexity with this rebate model. These incremental rebates will require us to float significant cash outlay to the manufacturer until utilization is all complete. There is natural waste due to product integrity, sterility concerns and normal business waste that will never have utilization to support the request for the incremental rebate. That loss of product will increase overall costs without ever retaining the rebate. In current state, that waste results in lack of accumulation to support future purchases but may not require WAC purchasing. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. Claim level detail from requirements on the hospital mixed use side will be complicated. Rebate claim generation and submission data requirements that differ in the contract pharmacy setting compared to the mixed-use hospital claim data. Data requirements proposed on the hospital claims data will be administratively burdensome based on having to submit a health plan ID. This health plan ID is not posted and extracted from hospital billing until 3 days post close of a patient claim. Timing of this close and data extraction based on set parameters will introduce data elements that are not populated and subsequently require re-submission from a non- automated route or risk rebate denial based on data elements not being available. Monitoring all the data submissions and responding to issues from any non-conforming data elements will be necessary and administratively burdensome. Manufacturers changing data element requirements or different vendors that the manufacturers are allowed to use in a rebate scenario will increase the complexity and burden. The impact of this is incomprehensible to determine how much increased cost we could incur. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Mercy purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Comparing wholesaler drug purchases for the MFP drugs and associating a WAC cost to those purchase volumes, Mercy would incur significant upfront WAC cost risk until rebates are effectuated. In addition, we estimate a significant loss from an annual rebate opportunity cost which includes loss of cost minus and rebate denials. Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 19 Our analysis takes historical purchase data from our 340B drug spend and applies the difference in cost to procure that same volume of drug over the course of the year. $9.3M represents an annual cost increase for the first group of drugs in the 2026 MFP. Including 2026 and 2027 MFP drugs increases that upfront WAC spend to $22.6M and by 2028 we are spending $59.3M more on drugs initially and that is the risk we will have to mitigate through effectuation of rebates. Mercy also anticipates loss of certain annual rebates based on cost minus discounts from our wholesaler and rebate denials that reach over $10M in 2028. Mercys average days Cash on Hand is budgeted at 10 days. Based on our experiences with rebates through the Medicare Drug Negotiated Program, our receipt of rebates will affect that budgetary target and be a constant factor we need to assess based on outstanding rebates we are expecting back. Denials, good faith inquiries, litigation, and administrative dispute resolution procedures could all delay substantial rebate effectuation meaning our financial operations could operate below targets. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Mercy could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. High-cost specialty medications require hospitals to manage these medications needs for our patients in a just in time inventory model already. This sounds conducive to a rebate model; however, these are also some of our sickest and most unstable patients. Despite efforts to meet patient need, often times patients scheduled treatments or appointments are delayed and require us to hold on to purchased drug awaiting their ability to receive treatment. In some cases, treatment could be changed to another drug after that purchase and before the patient has received the medication. Hospitals Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 20 will be forced to wait until another patient happens to need that medication or decide to return the medication to the wholesaler for credit. Returning high dollar specialty medications after purchase require substantial restocking fees that are normally not conducive to any sort of routine practice. These scenarios will require us to carry that upfront WAC cost in our financials until we are able to use the medication. For some medications used in the mixed-use setting, there will be a portion of that medication purchased used on inpatients not eligible for 340B pricing and some used on 340B eligible patients. This extended delay for 340B eligible return of a rebate could be substantial and hard to predict. In our current environment, we do not purchase at 340B until we have enough qualified utilization to support that purchase at 340B from a retrospective procurement standpoint. Future state, we will have to buy that medication at WAC and then submit utilization to support each incremental rebate after that purchase. In smaller hospitals we could be floating WAC from a purchase with incremental rebates for months. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Mercy will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. Manufacturers may be told that they are not allowed to deny rebates under their suspicion of diversion or duplicate discounts, however that does not fully comprehend all the elements that can be put in place to deny rebates for other reasons. As witnessed through the MFP process, the manufacturers are asking for a lot of detail to try to get MFP rebates when we attempt through GFIs to tell them they were not 340B eligible claims. Why would we expect to see any different behavior with a rebate model and the stakes will be much higher for covered entities from a financial perspective. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Mercy would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Mercys operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 21 determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Mercy and the communities we serve, as well as all the 340B entities across the country caring for patients each day. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We also question both the legality and timing of such a change based on HRSA clear feedback from just a few short years ago. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety net and the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, John M. Mohart, MD, FACC EVP and Chief Operating Officer Mercy Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 22 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 23 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf April 13, 2026 Page 24 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs Transaction ID: CBJCHBCAABAAMVOs-4ZsogmnSQlG1aLhkRbjfD1654Q9 Document Name: MERCY Health System_ OPA Rebate Pilot RFI Response_April2026.pdf
HRSA-2026-0001-1664Saint Catherine Hospital2026-04-17T04:00Z21,531 chars
See attached file(s) April 17, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Saint Catherine Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization a significant amount of money. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We anticipate our organization would incur additional costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Conducting regular self-audits of clean site locations, as well as fees related to submitting data to third party vendors from these locations add even more cost. Implementation of a rebate model would require, at minimum, two additional full-time employees, force our hospital to reallocate staff hours to work on rebates, and retain additional third-party vendors. Saint Catherine hospital has already added resources to comply with IRA/MFP requirements. A rebate model would require even more staff resources. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Preparing and submitting claims data, for physician-administered drug claims, require extra time. This puts our hospital at risk for untimely submission. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which will cause delays even if manufacturers are required to pay rebates within 10 days. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include patient discounts, negative impacts to patient care, uncompensated care, unreimbursed care, capital improvements, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Saint Catherine Hospital St. Catherine Hospital April 17, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Saint Catherine Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization a significant amount of money. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We anticipate our organization would incur additional costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Conducting regular self- audits of clean site locations, as well as fees related to submitting data to third party vendors from these locations add even more cost. Implementation of a rebate model would require, at minimum, two additional full-time employees, force our hospital to reallocate staff hours to work on rebates, and retain additional third-party vendors. Saint Catherine hospital has already added resources to comply with IRA/MFP requirements. A rebate model would require even more staff resources. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Preparing and submitting claims data, for physician-administered drug claims, require extra time. This puts our hospital at risk for untimely submission. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which will cause delays even if manufacturers are required to pay rebates within 10 days. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include patient discounts, negative impacts to patient care, uncompensated care, unreimbursed care, capital improvements, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Saint Catherine Hospital
HRSA-2026-0001-1665Van Buren County Hospital2026-04-17T04:00Z9,993 chars
See attached file(s) Van Buren County Hospital 304 Franklin Street Keosauqua, IA 52565 April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Van Buren County Hospital, located in Keosauqua, IA we appreciate the opportunity to respond to the Department of Health and Human Services Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congresss directive that covered entities be able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. 3192933171 www.vbch.org 304 Franklin Street Keosauqua, IA 52565 A rebate mechanism would require Van Buren County Hospital to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. Van Buren County Hospital does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSAs estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. 3192933171 www.vbch.org 304 Franklin Street Keosauqua, IA 52565 Systems, IT, and Infrastructure Requirements HRSA asks about the systems and infrastructure changes that would be required to implement a rebate model. Van Buren County Hospitals current IT systems, including pharmacy platforms, EHRs, and billing systems, are designed to support purchase time discounts, not post-purchase rebates. A rebate model would require: New data integration tools or manual extraction processes; Modifications to financial controls and accounting workflows; Ongoing system maintenance to address data mismatches and evolving requirements. Many third-party administrators do not maintain direct EHR data feeds for rebate-specific elements, meaning manual intervention would be unavoidable. This increases administrative burden, cost, and the risk of errors and compliance issues. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, Van Buren County Hospital would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. 3192933171 www.vbch.org 304 Franklin Street Keosauqua, IA 52565 Impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Reliance Interests HRSA requests comment on covered entities reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. Van Buren County Hospital relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third-party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the Iowa Hospital Associations and the American Hospital Associations recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. For all the reasons outlined above, Van Buren County Hospital respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should 3192933171 www.vbch.org 304 Franklin Street Keosauqua, IA 52565 preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Sincerely, Garen Carpenter CEO, Van Buren County Hospital Email: garen.carpenter@vbch.org Phone: (319) 293-8725
HRSA-2026-0001-1666Advocate Health2026-04-17T04:00Z12,855 chars
see attached April 15, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Delivered Electronically RE: Request for Public Comment Application Process for the 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Dear Director Britton: On behalf of Advocate Health, we appreciate the opportunity to comment on the 340B Rebate Model Pilot Program announced by the Health Resources and Services Administration (HRSA). We strongly oppose the creation of this mandatory model, as it could cause significant risks to safety-net hospitals and the vulnerable populations we serve. ABOUT ADVOCATE HEALTH Advocate Health is a leading nonprofit integrated health system in the United States providing care under the names Advocate Health Care in Illinois; Atrium Health in the Carolinas, Georgia, and Alabama; and Aurora Health Care in Wisconsin. Advocate Health is a national leader in clinical innovation, health outcomes, consumer experience, and value-based care, with Wake Forest University School of Medicine serving as the academic core of the enterprise. Headquartered in Charlotte, North Carolina, Advocate Health serves approximately six million patients and is engaged in hundreds of clinical trials and research studies. Advocate Health is nationally recognized for its expertise in cardiology, neuroscience, oncology, pediatrics, and rehabilitation, as well as organ transplants, burn treatments, and specialized musculoskeletal programs. Advocate Health employs an estimated 167,000 team members across 69 hospitals and more than 1,100 care locations and offers one of the nations largest graduate medical education programs with more than 2,000 residents and fellows across more than 200 programs. Additionally, Advocate has five skilled nursing facilities with 572 licensed beds. Committed to ensuring access to care for all, Advocate Health provides more than $6 billion in annual community benefits. We contribute to the health and well-being of the communities we serve in many ways, including through the direct provision of charity care, free clinics and services, community-based programs at no or low cost, and financial and in-kind donations to community nonprofits serving individuals and families in need. In addition, our expansive retail pharmacy network enhances medication access and adherence across the regions we serve, operating as a key touchpoint for both preventive and ongoing care. This network is sustained in part through critical support from the 340B Drug Pricing Program, allowing us to reinvest savings directly into our communities. These funds enable us to lower out-of-pocket costs for patients, expand pharmacy access in medically underserved areas, and provide comprehensive medication management programs tailored to those most in need. CONCERNS WITH THE REBATE MODEL PILOT PROGRAM The 340B Program provides essential financial support for safety-net hospitals and for providers delivering care to low-income and uninsured patients. The savings generated by the 340B Program allow additional investment into care for the individuals, families, and communities we serve, allowing us to stretch limited resources further. Advocate has reinvested 340B Program savings into a Medication Assistance Program, for example, and a targeted, intensive social work case coordination program in Milwaukee, WI, to reduce unnecessary emergency care. A shift to a rebate model, as opposed to the current discount model, would undercut our ability to continue this level of care. It fundamentally changes the nature of the program to disadvantage safety-net hospitals and providers regardless of any safeguards or requirements put upon manufacturers. Advocate's four main concerns are that a rebate model: 1. Exacerbates Financial Strain on Providers. Requiring up-front, full-price drug purchases with delayed rebates imposes severe cash flow burdens on safety-net providers-many of which operate on razor-thin margins. Unlike the existing upfront discount mechanism, any rebate mechanism will force Advocate Health to effectively provide drug companies with interest-free loans while awaiting the discounts owed under the 340B statute. Notably, any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, Advocate Healths cost estimates have increased over the estimates calculated for the 2026 drugs alone. A rebate-based payment model would additionally alter payment timing compared to current drug wholesaler arrangements, even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program. The additional drugs in scope and the delayed discount will have meaningful impact on our institution and the patients we serve. Further, under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. Covered Entities were required to accept without modification Beacons objectionable Terms and Conditions which include perpetual transfer of data rights of Covered Entity data and permit secondary uses unrelated to rebate payment. Current efforts to avoid 340B/MDPNP Duplicate Discounts via the Beacon IT platform suggest that Beacons proposed credit process for reversals will ensure inconsistent payments and the inability to accurately track all medication claims for a specific product. A change to a rebate model would not solve the existing issues with the deduplication process and/or would only make those issues worse. 2. Undermines the Intent of the 340B Program. The 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Providers across the country reasonably relied on this history when designing internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. The rebate model circumvents this structure and may incentivize manufacturer non-compliance. Manufacturers will potentially have an abusable level of control over the program as they will be able to delay and deny rebates. There is a lack of recourse for Covered Entities in the event of manufacturer abuse of a rebate model. Covered Entities already encounter such problems as manufacturers limiting, restricting, and reducing covered entities access to eligible savings. A fundamental switch now would disrupt the settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Preserving the upfront discount mechanism is the best way to fulfill the purpose of the 340B program. 3. Increases Administrative Burdens. The rebate process requires more complex tracking and payment reconciliation processes, causing delays that threaten operational efficiency and service continuity. Any rebate program would require Advocate Health to spend significant sums on new administrative costs. When Advocate Health chose to participate in the 340B program, it was understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a hospital system and far above and beyond what we are experiencing now. Examples include: Key Cost Drivers: Supporting a rebate model will require additional full-time employees, reallocation of work hours of current staff to perform administrative functions, third- party vendor engagement, an increase of compliance activities and development of processes for challenging denials. HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Advocate Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change or modify IT systems, software, and data infrastructure as the pilot program expands. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. The assertion that the data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained through existing third-party vendor relationships is incorrect. Specifically, hospital claims data collection and validation would require manual processes from disparate systems to meet the potential requirements. Additionally, individual manufacturers may require different data field requirements, which introduces an additional level of complexity. The burden associated with data requests for a potential 340B Rebate Model Pilot Program will be significant. 4. Reduces Health Access and Worsens Outcomes. Reduced 340B Program savings will directly limit our ability to fund pharmacy and other clinical access programs, expand clinical services, and support underserved populations. Rural and critical access hospitals rely on 340B as an important lifeline to stay open and provide care to their communities. A rebate model that could be used to drastically reduce savings or delay/withhold it could result in operational challenges and potential closings. Additionally, integrated health systems with rural and critical access hospitals who rely on 340B as a lifeline to keep those hospitals open will be forced to either subsidize those hospitals or close/reduce services. Moreover, a rebate-based approach does not provide any direct patient benefit beyond what is already available under an up-front pricing model. The financial and administrative consequences of shifting to a rebate model far outweigh any benefits such a model may have for addressing 340B and Maximum Fair Price (MFP) deduplication or prevention of 340B Medicaid duplicate discounts and diversion. Drug companies have viable, lawful, and less burdensome alternatives to address the deduplication. HRSA should ensure these options have the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Advocate Health urges HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. If, however, HRSA chooses to move forward with this effort, it must allow Advocate Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide information, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a failure to consider important aspects of the problem. CONCLUSION Advocate Health strongly encourages HRSA to withdraw the 340B Rebate Model Pilot Program proposal and maintain up-front discounts in the 340B Program. If you have any questions about our comments or need any additional information, please do not hesitate to contact Sabra Rosener, VP, Federal Affairs and Government Policy (Sabra.Rosener@aah.org). We hope to work with HRSA going forward on improving the 340B Program. Sincerely, Meghan C. Woltman SVP, Chief Government Affairs Officer
HRSA-2026-0001-1667GSK2026-04-17T04:00Z25,967 chars
GSK respectfully submits the attached comments for your consideration. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 1 April 17, 2026 VIA ELECTRONIC SUBMISSION https://www.regulations.gov/document/HRSA-2026-0001-0001 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: GSK welcomes the opportunity to respond to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the potential use of rebates in the 340B program, including in a Rebate Model Pilot Program (hereinafter, Rebate Pilot). We remain a committed partner in strengthening the integrity and transparency of the 340B program and support improvements, including the use of rebates, that will preserve 340Bs safety-net purpose while reducing statutorily prohibited harms such as duplicate discounts and diversion. GSK is a global biopharma leader with a purpose to unite science, technology, and talent to get ahead of disease together. With a clear and defined focus on leading the way in disease prevention, GSK focuses on the science of the immune system and advanced technologies, investing in our core therapeutic areas - respiratory, immunology and inflammation; oncology; HIV and infectious diseases to impact health at scale. Our strategy means intervening early to prevent and change the course of disease, helping to protect people and support healthcare systems with the aim of positively impacting the health of more than 2.5 billion people by the end of the decade. GSK supports policy solutions that transform our healthcare system to one that rewards innovation, prevents the onset and progression of disease, improves patient outcomes, and achieves higher-value care. We value HRSA's methodical approach demonstrated in this RFI, and we fully recognize HRSA's primary responsibility for the administration of the 340B program, including its oversight of rebates. While we anticipate some initial stakeholder resistance to the transition to rebates in the 340B program, we believe rebates will deliver significant and necessary improvements. These include enhanced program integrity and statutory compliance areas that are well-documented challenges within the current program. A well-implemented rebate approach will not negatively impact patient access to drugs; rather, by safeguarding program integrity, it will help ensure the long-term sustainability and effectiveness of the 340B program. GSK is a member of and endorses the comments of the Pharmaceutical Research & Manufacturers of America (PhRMA) on this RFI. Our separate feedback prioritizes issues of paramount interest to GSK and the patients we serve. Below we provide a summary of our recommendations and more detailed information to elaborate further on our views. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 2 Summary of Recommendations: We recommend HRSA promptly implement a program that allows for the use of rebates for all products immediately, rather than limiting it to a pilot. The 340B statute clearly authorizes HRSA to implement a rebate approach.1 The escalating size, unchecked growth, and increasing complexity of the 340B program, alongside persistent findings from government watchdogs detailing insufficient mechanisms to prevent unauthorized duplicate discounts and other violations, necessitates the urgent implementation of rebates across the program.2 Nonduplication provisions apply beyond the drugs selected for Maximum Fair Price Negotiations (MFP) under the Inflation Reduction Act (IRA).3 Duplication and diversion risks continue to grow, particularly given the widespread and growing use of contract pharmacies.4 If HRSA limits the Rebate Pilot, it should, at a minimum, include all products currently selected or designated in the future for MFP negotiations under the IRA. This currently includes products subject to Initial Price Year applicability (IPAY) in 2026, 2027, and 2028. The IRA added a new set of 340B duplicate discount risks, and CMS has stated they are not taking responsibility for deduplication.5,6 These statutory deduplication requirements will continue to apply into the future for all IPAY drugs. A rebate approach is the most reliable way to alleviate manufacturers risk of paying unauthorized MFP/340B duplicate discounts, which one study estimates at over $5 billion in 2027 alone.7 HRSA should not be deterred in establishing the Rebate Pilot. The dramatic growth of the 340B program, extensive use of rebates to effectuate discounts in other federal health care programs, and the need for statutory compliance are amongst several strong justifications for the broad use of rebates in the 340B program. The disruption to covered entities in using a Rebate Pilot will be minimal. If a new rebate approach includes a 10-calendar-day deadline for the manufacturer to pay the rebate on eligible claims, evidence shows that using rebates should be no more costly or 1 42 U.S.C. 256b(a)(1). 2 Government Accountability Office (GAO). (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212, at 27, 43, 45. Available at: https://www.gao.gov/assets/gao-20-212.pdf; see also OIG. (June 2016). State Efforts to Exclude 340B Drugs from Managed Care Rebates, at 16. https://oig.hhs.gov/oei/reports/oei-05-14- 00430.pdf. 3 42 U.S.C. 256b(a)(5)(A)(i), and 42 U.S.C. (a)(5)(B). 4 GAO. (June 2018). Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO 18- 480. Available at: https://www.gao.gov/products/gao-18-480. 5 Social Security Act (SSA) 1193(d), 1847A(i)(3)(B)(ii)(I), 1860D-14B(b)(1)(B). 6 CMS. (September 2025). Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028. Page 255. Available at: https://edit.cms.gov/files/document/ipay-2028-final-guidance.pdf. 7 Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and-Outlook- to-2027.pdf. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 3 burdensome to covered entities than the replenishment models they typically use today.8 Entities may also be able to obtain 340B pricing more quickly in a Rebate Pilot than under the replenishment model since the payment could occur on a unit-by-unit basis rather than requiring the covered entity to wait until it has dispensed an entire package of medicines before replenishing a 340B discounted order. HRSA should clarify that manufacturers may validate information prior to processing a 340B rebate to identify data quality issues. As an example, a manufacturer should not be required to fulfil a rebate claim if the submitted National Drug Code (NDC) falls outside the scope of the Rebate Pilot. Detailed Responses: HRSA should include all named MFP products in the next iteration of the Rebate Pilot. Establishing a new Rebate Pilot is the only way to fully ensure IRA statutory compliance, especially given CMSs current position is to take no responsibility for deduplication.9 This issue is substantial, with one study estimating manufacturers with Initial Price Year Applicability (IPAY) 2026 drugs will collectively pay over $5 billion in 340B/MFP duplicate discounts in 2027 alone, absent a reliable deduplication mechanism.10 We appreciate that HRSAs recent Information Collection Request (ICR) signals that any future pilot will include both 2026 and 2027 MFP products.11 GSK has products subject to MFP in 2027 and 2028 and expects additional products to be selected in future years. We will need access to a Rebate Pilot on or before January 1, 2027, and beyond, to ensure statutorily and contractually required deduplication,and we encourage HRSA to quickly take all necessary steps to expedite the effectuation of a new Rebate Pilot. If all products are not included immediately, HRSA should develop plans now for quickly expanding the use of rebates in the 340B program to all products to improve program integrity and operational efficiencies. Program growth and other statutory requirements beyond MFP deduplication necessitate the broad use of rebates: In addition to MFP deduplication, the statute prohibits duplicate 340B discounts for Medicaid claims and bars the diversion of drugs to individuals who are not defined as patients of the covered entity.12 Meeting these requirements has become increasingly difficult given the exponential growth of the 340B program and varying methods used to provide discounts in government programs. In 2019, 8 Sun C, et al. (December 2025). How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, QVIA. Available at: https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper-2025.pdf. 9 CMS. (October 2, 2024). Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027. Page 231. Available at: https://www.cms.gov/files/document/medicare-drug-price-negotiation-final-guidance-ipay-2027-and-manufacturer-effectuation- mfp-2026-2027.pdf. 10 Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and-Outlook- to-2027.pdf. 11 Available at: https://www.federalregister.gov/documents/2026/02/26/2026-03833/agency-information-collection-activities-proposed- collection-public-comment-request-information 12 42 U.S.C. 256b(a)(5)(A)(i) and 42 U.S.C. 256b(a)(5)(B). GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 4 when the program was less than half its current size, it was estimated that as much as $1.5 billion in duplicate discounts were claimed by covered entities.13 Since then, the program has more than doubled in size with 27,138 covered entities, 36,340 child sites, and over $81 billion in purchases at discounted 340B pricing in 2024.14 A rebate approach would also enable manufacturers to work with CMS to more accurately exclude 340B units from the calculations of manufacturers Medicare Part B and Part D inflation rebate obligations as required in the IRA.15,16 CMS is currently using a claims-based methodology for removing Part D units and plans to establish a voluntary claims clearinghouse for testing this fall.17,18 These voluntary approaches do not provide the same level of validation as the rebate approach and are more administratively burdensome. Incorporating 340B rebate data into the inflation rebate calculations would be the most accurate and efficient way to identify Part D 340B units. Including all Part D drugs in the Rebate Pilot, would provide a reliable method to accurately excluding 340B units from the Part D inflation rebate. CMS could then utilize claims-level data reported by covered entities to manufacturer rebate platforms to populate a repository, instead of relying on voluntary submissions from covered entities. The current pay and chase model has created an opaque system where basic claims data are not available to ensure statutory requirements are met. In a Rebate Pilot, covered entities will have a strong incentive to ensure manufacturers receive the data needed for appropriate rebate processing because this will lead to the timely receipt of funds and efficient program operations. Given that most claims data needed for rebate processing is already maintained and collected by covered entities, providing it should pose limited burden. By using rebates for all products purchased through the 340B program, not solely MFP products, HRSA can significantly improve program integrity and operational efficiency by requiring consistent processing across all 340B transactions. GSK undertakes significant efforts to avoid paying duplicate discounts: We and other manufacturers employ various methods, including using data analysis and contractual agreements, to avoid paying duplicate discounts. However, we face significant challenges in these efforts because we lack full access to claims level data. The lack of a centralized, real-time mechanism to verify 340B eligibility creates significant operational hurdles and increases the risk of non-compliance. In 2025 alone, through our efforts, we identified over $100 million in duplicate discounts; however, we are confident that this does not represent the full spectrum of duplication given the data issues described. 13 Kalderos. (2021). Making health policy work for patients. Available at: https://f.hubspotusercontent40.net/hubfs/7227094/2021%20Annual%20Report/Annual_report_2021.pdf. 14 Health Resources and Services Administration Office of Pharmacy Affairs Information System (OPAIS) (2025). 340B covered entity database. Available at: https://340bopais.hrsa.gov/; HRSA. (December 2025). 2024 340B Covered Entity Purchases. Available at: https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases. 15 Id. 1395w-3a(i)(3)(B)(ii)(I), 1395w-114b(b)(1)(B). 16 42 U.S.C. 1320f-2(d). 17 To exclude 340B units, CMS is relying on covered entities to use a claims modifier, but there is no clear mechanism to enforce that requirement, and manufacturers are limited in their ability to police this type of non-compliance. 18 CMS has not yet implemented an accurate method to identify and exclude 340B units from Part D inflation rebate calculations. Instead, in the 2026 Medicare Physician Fee Schedule it finalized relying on a claims-based estimation approach, which CMS itself acknowledges is inexact. A 340B rebate would provide a precise way for CMS to exclude these units and obviate the need to rely on an imprecise estimation approach. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 5 Using a rebate approach in the 340B program will standardize operations across federal programs: Requiring the use of rebates for all products will align the 340B program with how other federal drug pricing programs operate resulting in improved transparency and accuracy. Rebates are a well- established mechanism for ensuring access within government programs such as Medicaid, TRICARE retail, and Medicare Part D. The 340B program, as currently operated, is an outlier and should be administered using a rebate approach like other government drug programs. Given that pharmacies and providers serve diverse patient populations with varying insurance and program eligibilities, the final applicable drug price is often unknown at the point of dispensation or administration. Rebates effectively address this issue by allowing price concessions to be applied retrospectively, once a patient's insurance and program status are confirmed. Moreover, implementing rebates in the 340B program would significantly enhance efficiency. It would eliminate the need for distinct data requirements across programs, simplifying data collection and compliance across the board. Such streamlined information flow amongst federal programs could eventually lead to more unified guidance. A Rebate Pilot is the crucial first step towards that efficient convergence. The objective, delivering rebates, is consistent across programs, and therefore the process should be as well. The Rebate Pilot will not create significant costs or administrative burdens: With a 10-day turnaround, as contemplated in the RFI, the interest costs of floating inventory are very modest relative to the value of 340B savings. In fact, a recent study found that interest costs associated with HRSAs original Rebate Model Pilot Program were estimated at less than one-fifth of one percent of a drugs list price.19 Under the current replenishment model, the initial inventory of 340B medicines is typically purchased at list price and replenished at the 340B price only after the entire package has been dispensed or administered. In contrast, a Rebate Pilot with a 10-day payment window would generally facilitate more rapid payment, as rebate reimbursement would not be contingent on the full depletion of medicine units within a package. Given this dynamic, it is difficult to understand why some covered entities do not support the rebate approach, as it generally offers the potential for more timely reimbursement. Much of the data needed for a Rebate Pilot is already collected, maintained, and provided to third parties by covered entities for purposes of obtaining reimbursement from other federal programs and commercial payers. 20,21,22,23,24 Specifically, most of these data elements are captured in electronic health records, must be maintained to comply with 340B audit requirements or submitted in connection 19 IQVIA. How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? (December 2025) Available at: https://www.iqvia.com/locations/united-states/library/fact-sheets/how-will-a-rebate-model-impact-cash-flow-in-the-340b-drug-pricing-program. 20 The data elements we propose here are the same elements that HRSA included in the Rebate Pilot, plus a limited number of data elements to verify that the covered entity actually purchased the drug and the price at which it made the purchase. 21 See for example the United States Core Data for Interoperability (USCDI) data elements maintained by the Office of the National Coordinator for Health Information Technology (available at: https://isp.healthit.gov/united-states-core-data-interoperability-uscdi#uscdi-v6). The USCDI defines the standardized classes and individual data elements that certified EHR systems must be able to capture and exchange. 22 See for example Section 3(C), Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities. Available at: https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered-entities.pdf 23 See 340B ESP, Data Submissions FAQ 9. Available at: https://help.340besp.com/en/articles/8808065-frequently-asked-questions- faqs#h_a1adc6cecc. 24 For example, covered entities are required to provide many of the data fields HRSA contemplated in the 2025 Rebate Pilot as part of the 837P form required for providers to bill Medicare for separately payable drugs covered under Part B and as part of the D.0 electronic telecommunication standard utilized for pharmacy billing. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 6 with contract pharmacy policies or are necessary to meet other billing and inventory management requirements. Thus, transmitting data for a Rebate Pilot should not substantially increase burden on covered entities. To ensure a smooth transition, GSK is committed to ensuring our vendor-partners offer extensive training and support to help covered entities and their vendors/partners prepare for the launch of the Rebate Pilot. As part of implementation, HRSA should also clarify that manufacturers are not responsible for other administrative costs of covered entities associated with rebate processing, including costs paid to Third Party Administrators (TPAs) to prepare and submit data. These are activities that covered entities should already be undertaking for compliance and auditing purposes. The use of rebates may reduce disputes: We anticipate that shifting to a clear and structured rebate approach, by providing basic claims data and allowing manufacturers to confirm 340B eligibility prior to providing rebates, could reduce the need for costly and time-intensive audits and administrative dispute resolution (ADR) processes for all stakeholders. The increased transparency from a retrospective rebate structure would make it easier for HRSA and independent auditors to monitor compliance and to address the duplicate discounts and diversion that currently plague the program. This proactive approach will safeguard the program's resources for eligible patients and prevent abuse. HRSA should ensure that the appropriate rebate amounts are defined, and all physician administered products are captured in the Rebate Pilot. For the Rebate Pilot, HRSA should clarify manufacturer's rebate liability in scenarios where products were obtained through a replenishment model and when MFP refunds have already been paid. In addition, to calculate refunds on replenished products correctly, HRSA should add wholesaler purchasing information to the list of data elements collected for each claim. HRSA should also provide clear instructions in any Rebate Pilot that clarify the technical data elements needed for physician-administered medicines. Program integrity issues are growing and provide evidence of the need for the Rebate Pilot Today, HRSA oversees the program through its own 340B audits, which is inadequate for a program as large and complex as 340B. HRSA's own audits indicate a high rate of adverse findings, yet enforcement is often insufficient, placing a disproportionate burden on manufacturers to identify and address non-compliance. HRSA audits less than one percent of covered entities, and roughly 70 percent of those HRSA audits return adverse findings.25 These audits are only retrospective and are not an effective way to prevent future violations. Between 2015 and 2024 HRSA only re-audited 68 covered entities due to previous adverse findings and nearly 70 percent continued to be non-compliant with program requirements. The most common sanction imposed was repayment to manufacturers for discounts they should not have 25 ADVI. (March 2025). Analysis of HRSA 340B Covered Entity Audits. Available at: https://advi.com/insight/advi-analysis-hrsa-340b-covered- entity-audits/. GSK Comment Letter Response to Request for Information: 340B Rebate Model Pilot Program 7 received. HRSA did not require payment of penalties or interest payments, nor did HRSA terminate any covered entities from the program for noncompliance identified through these audits. Independent government watchdogs continue to find inadequate current safeguards in the 340B program to prevent duplicate Medicaid and 340B discounts and diversion of 340B drugs to parties that are not patients of a covered entity.26,27,28 The Government Accountability Office (GAO) and the Office of the Inspector General (OIG) have urged action to prevent duplicate discounts in Medicaid managed care.29 While manufacturer audits of covered entities could be another tool to address 340B violations, HRSAs 1996 manufacturer audit guidelines are outdated and impose onerous and unnecessary barriers that are not authorized by the statute.30 This guidance, combined with covered entities determination to challenge and delay audits, has made the audit process largely unworkable for manufacturers and resulted in few audits actually being completed. When manufacturers pursue audits and uncover statutory violations, GAO and OIG have raised concerns that HRSA often does not require repayment of price concessions that covered entities should never have received, even when there is no dispute that the repayment is owed. HRSA should clarify that manufacturers may request information prior to processing a 340B rebate if there are self-evident errors. In limited cases, manufacturers may need to request clarifying information from covered entities prior to processing a rebate, such as for missing or invalid data (e.g., ineligible NDC duplicative submissions). GSK is aligned to HRSAs original Rebate Pilot guidance requirement to provide justification and specific documentation for any claim that is denied. GSK appreciates the opportunity to comment on this Request for Information. Please contact me at Molly.M.Burich@gsk.com if you have any questions or if GSK can provide any further information. Sincerely, Molly Burich Head of Public Policy US Government Affairs, Public Policy and Patient Advocacy 26 42 U.S.C. 256b(a)(5)(A)(i). 27 42 U.S.C. 256b(a)(5)(B). 28 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212, at 27, 43, 45. Available at: https://www.gao.gov/assets/gao-20-212.pdf; see also OIG. (June 2016). State Efforts to Exclude 340B Drugs from Managed Care Rebates, at 16. https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. 29 OIG. (June 2016). State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates. Available at: https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/ ; Government Accountability Office, 340B Drug Discount Program Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, Jan. 2020. 30 Federal Register / Vol. 61, No. 240 at 65407.
HRSA-2026-0001-1668Pam Ratcliffe · Louisville, KY, United States2026-04-17T04:00Z1,781 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Pam Ratcliffe Licensed Behavioral Health Professional Family Health Centers Americana, Survivors of Torture Services
HRSA-2026-0001-1669Elica Health Centers2026-04-17T04:00Z11,980 chars
Dear Director Britton: Elica Health Centers, a Federally Qualified Health Center (FQHC) in Northern California serving over 66,800 patients in the Greater Sacramento Metropolitan Area, would like to thank the Health Resources and Services Administration (HRSA) for allowing our health center to comment on the proposed rebate model, and for extending the comment deadline to April 20, 2026. The 340B program is an important safety net resource that helps our health center serve the most vulnerable members of our community. The introduction of a rebate model program will create significant operational, financial, compliance, and administrative burdens for our health center. Our health center strongly urges HRSA to preserve the current upfront discount model and exempt community health centers from this rebate model, which threatens our ability to stretch our scarce federal resources as far as possible. (Please see the attached letter for full comments.) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Elica Health Centers, a Federally Qualified Health Center (FQHC) in Northern California serving over 66,800 patients in the Greater Sacramento Metropolitan Area, would like to thank the Health Resources and Services Administration (HRSA) for allowing our health center to comment on the proposed rebate model, and for extending the comment deadline to April 20, 2026. The 340B program is an important safety net resource that helps our health center serve the most vulnerable members of our community. The introduction of a rebate model program will create significant operational, financial, compliance, and administrative burdens for our health center. Our health center strongly urges HRSA to preserve the current upfront discount model and exempt community health centers from this rebate model, which threatens our ability to stretch our scarce federal resources as far as possible. I. 340B Program Burdens We Are Currently Facing Beginning in 2020, manufacturers began siphoning 340B savings away from health centers around the country (our health center is currently affected by 25 of these restrictions), and in 2022, the State of California transitioned all Medi-Cal Rx revenue to fee-for-service. By consequence, over the past 6 years, our health center has lost millions of dollars in savings. To maintain pricing, we have been submitting claims data to the 340B ESP platform since it was implemented in 2020. We have been doing so with the feeling that we have no other option. It is a challenge to keep pricing on even when claims are submitted in the narrow window the manufacturers require; we are continuously at risk of losing pricing, and have to keep a close eye on 340B ESP, our wholesalers, and our third party administrators. Third party administrators are currently not working with Truzo, which several manufacturers have switched to recently, which adds an additional platform to which to submit claims data. As of today, 5 manufacturers are now requiring in-house claims submissions, which are not currently being automatically submitted by third party administrators. This adds yet another claims submission burden, and many more hours of administrative tasks that our health center will struggle to meet without hiring additional support staff. II. Operational Risks, Financial Burdens, and Looming Threats Our Health Center Faces Unlike large hospital systems, community health centers often operate on thin margins. Forcing us to pay wholesale acquisition cost (WAC) upfront and wait for rebates will disrupt our cash flow, resulting in tighter budgets for staffing, delayed procurement of supplies and equipment, or having to choose to buy less expensive (but not necessarily better or of highest need) inventory until enough cash becomes available to conduct acquisitions that require more cash upfront. The individuals who will be hurt the most by this disruption in cash flow will be our patients, as it will mean less critical access dollars available for patient care. Our health center is paid through a PPS (prospective payment system) rate, which is fixed. The only way to increase PPS is to apply for PPS rate reevaluation, which can take several years to complete, assuming it is approved by the State of California. What this means is our health center receives the same rate per encounter for many years, despite the cost of staffing, operations, procurement, and other required expenses increasing every year. Having to wait to be paid a rebate will further stress our cash flow. There is a looming threat of a ballot measure that could be added to the November 2026 statewide ballot in California, which would require that we spend 90% of patient revenue directly on patient care, leaving 10% for everything else. If this ballot measure is passed, we will have to immediately cut staffing in departments such as mobile services, street medicine, school-based services, care coordination, revenue cycle (billing and coding), credentialing, patient call center, enhanced care management, compliance, procurement, finance, facilities, information technology, health information technology, business intelligence, workforce development, quality assurance, community development, patient eligibility, practice transformation, and more. We may also have to delay replacing aging equipment and facilities, shut down our immigrant resource center (including its donation center, community closet, and food pantry), and end community outreach services, such as our weekly radio show that educates community members about the importance of living a healthy life. A rebate model could also potentially jeopardize the continued operation of these departments and services. With limited cash, our health center will be pushed to reduce staffing (especially in important support departments), cut clinical and enabling services, and limit the availability of high-cost specialty drugs for our most vulnerable patients. With decreased staffing, operations will become harder to maintain, and compliance challenges will arise. In addition to these cash risks, a rebate model would complicate tracking and reconciling of individual claims, creating a complex administrative loop that our current electronic health record (EHR) system, third party administrator services, and pharmacy management systems are not designed or ready to handle. Additionally, the mismatch in timing between dispensing and rebate processing may increase the risk of inadvertent clerical errors, potentially leading to program compliance challenges that do not currently exist. III. Proposed Rebate Model Will Result in Increased Administrative Burdens We will need to hire additional 340B department staff to handle the increased workload created by the introduction of a rebate model. We estimate that at least 2 additional full time staff will need to be hired to ensure that claims data is submitted within the anticipated tight time windows, to extract/clean/prepare the data requested, and to ensure that claims are properly paid and reconciled. In California, due to changes that were introduced with the passage of SB 525, the minimum wage for healthcare workers will increase to $25 per hour on June 1, 2026, so our health center would have to compensate these 2 additional 340B program experienced staff at a competitive rate of $30 to $35 per hour, resulting in an immediate increase of $124,800 to $145,600 annually, plus competitive employee benefits. Additional costs could arise from increased staff training, compliance consulting and audit fees, and the possible acquisition of new software platforms to support data analysis and compliance complexities. IV. State Medicaid Implementation Will Compound the Harms of the Rebate Model In California, our health centers operate within a unique and often strained regulatory environment. The proposed rebate model interacts poorly with state-specific factors. The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on community health centers far beyond what the rebate model pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a community health center dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for community health centers: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces community health centers to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, community health centers would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. Community health centers already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. Community health centers must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For community health centers without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, community health centers in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. V. Conclusion We request that HRSA maintain the integrity of the 340B program by preserving the upfront discount model for community health centers. If a pilot must proceed, we respectfully request a full exemption for community health centers to ensure that the safety net we provide remains intact. Respectfully Submitted, Tatyana Bak, CEO Elica Health Centers (916) 454-2345 communications@elicahealth.org www.elicahealth.org 1860 Howe Ave, Ste 440 Sacramento, CA 95825
HRSA-2026-0001-1670Ann & Robert H Lurie Children's Hospital of Chicago2026-04-17T04:00Z9,526 chars
See attached file(s) April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels, Ann & Robert H. Lurie Childrens Hospital of Chicago appreciates the opportunity to comment on the Request for Information: 340B Rebate Model Pilot Program. We respectfully express our strong opposition to the implementation of a 340B rebate model. We recognize HRSAs effort to gather stakeholder feedback on establishing a transparent framework to evaluate the feasibility of a rebate-based mechanism, but feel this model imposes significant administrative costs on safety net providers, limits our ability to serve the needs of our patients and community, and creates data privacy and collection issues. As a regional specialty hospital, Lurie Childrens has the privilege of caring for critically ill and injured children who come to us from every corner of Illinois, 44 other states and 47 countries. Nearly 60 percent of our patients are insured by Medicaid and the Childrens Health Insurance Program, and over 60 percent of our beds are licensed as critical care. Exclusively focused on kids, all our resources, including 340B savings, are devoted to serving both their personal as well as their community needs. The 340B Drug Pricing Program supports safety net providers, including Lurie Childrens, in their mission to serve low-income and under-insured patients. It is an essential financial support that allows us to provide access to highly specialized, resource-intensive care to children across Illinois. Our ability to provide access to highly specialized care is strengthened by the 340B program because it helps offset low Medicaid reimbursement rates and allows us to stretch resources to maintain critical services and community-based programs. 340B pricing enables Lurie Childrens to provide lifechanging therapies and medications for vulnerable populations to treat numerous pediatric medical conditions. As an example, 340B allows Lurie Childrens to provide access to high-cost treatments for patients with Spinal Muscular Atrophy (SMA), one of the most common genetic conditions affecting children. These treatments have led to life-changing outcomes. However, the cost of these gene therapy treatments can exceed $1 million. By participating in the 340B program, Lurie Childrens can purchase these medications at upfront significant discounts, helping ensure the financial stability needed to provide children with access to novel therapies. Furthermore, the savings Lurie Childrens generates through the 340B program directly support programs that lower the costs of medicines for patients facing financial barriers. Lurie Childrens treats all children regardless of their families ability to pay. As a destination for children who need transplant care, having performed more than 1,700 solid organ transplants, we also treat the most complex cases. 340B savings support our programs to cover the cost of medicines for patients with pending Medicaid approvals or with pending prior authorization requests, ensuring that financial barriers do not delay patient care. Given our central role in caring for children in the state of Illinois and the region, we have significant concerns this rebate model would weaken our ability to provide pediatric care and undermine childrens long-term health and well-being. Should HRSA consider expanding this framework beyond the initial Medicare Drug Price Negotiation Program (MDPNP)-selected products, we urge the agency to explicitly exclude covered entities that qualify for the 340B Program under non-DSH pathways enumerated in section 340B(a)(4) of the Public Health Service Act. This includes freestanding childrens hospitals, freestanding cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals. We have compiled some key points below to help emphasize why this model should not be implemented: I. Significant and Unavoidable Cost Burden Associated with the 340B Rebate Program Any rebate program will significantly increase administrative costs to Lurie Childrens. These costs would go far above and beyond what we had budgeted and planned for as a pediatric health system, and would require hiring additional FTEs, including 340B analysts and legal support, to track compliance with a dual claims system, and a substantial investment in new IT systems and reporting infrastructure. A rebate mechanism will also force covered entities to purchase medications at the full list price, placing a substantial financial strain on childrens hospitals that must advance significant funds with the expectation of future rebate reimbursement. Requiring childrens hospitals to pay full price for 340B drugs, including high-cost therapies, will interrupt our ability to purchase and stock medicines to treat all of our patients and will delay reimbursement for services that are already paid under cost. Delaying these funds disrupts our operating cash flow and threatens our ability to support under-reimbursed care. A rebate model would also impose added cash flow complexity for childrens hospitals, many of whom, like Lurie Childrens, serve patients on Medicaid coming from multiple states. Each state Medicaid program has different billing practices and timelines. Many childrens hospitals would face added uncertainty when purchasing drugs at wholesale prices, without predictable insights on when they would receive Medicaid reimbursement and a manufacturer 340B rebate. II. Potential Reductions in Community Health Programs Resources generated through 340B savings are routinely reinvested in essential services that address unmet community needsservices that would be difficult or impossible to maintain if those resources were reduced or eliminated. Lurie Childrens ensures 340B savings support creating stronger systems that shape child health far beyond the hospital, including workforce development, hospital-based violence interventions, mobile health programs, nutrition assistance, mental and behavioral health, and much more. Since FY21, Lurie Childrens has provided over $1.25 billion in unreimbursed charity care and community benefits programs. These investments demonstrate how 340B currently supports both patient care and long-term system stability. III. Systems to Prevent Duplicate Discounts Are Already In Place Lurie Childrens is committed to enhanced 340B program integrity and has adapted our 340B programs to prevent duplicate discounts by appending a modifier to Illinois Medicaid claims for 340B-purchased drugs. This modifier signals Medicaid not to seek manufacturer rebates on those claims, thereby preventing duplicate discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on childrens hospitals, HRSA should rely on those other options. At this time, there is no clear operational pathway for compliant Medicaid billing under a rebate model. Likewise, we support the AHA position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. IV. Data Privacy and Collection Concerns As a pediatric safety net hospital, Lurie Childrens is deeply concerned that the data elements required by manufacturers to validate rebates could compromise patient confidentiality. Manufacturers often request granular data that, when applied to rare pediatric conditions, bypasses HIPAA de-identification safeguards. This raises concerns about data privacy, regulatory compliance, and operational feasibility of participating hospitals. Furthermore, in a rebate model the expected timeline for hospitals to submit rebate-related data does not reflect operational realities. In practice, timing of data submission is dependent on the full-claims lifecycle, including billing, reconciliation, and resolution of potential payer disputes, all of which can delay the availability of finalized and accurate data. Hospitals would be required to conduct frequent data validation, reconciliation, and auditing activities to stay in compliance with a rebate model. These expanded reporting and audit obligations would represent a significant administrative burden, requiring additional staffing and resources. Conclusion We appreciate the opportunity to provide comments on the 340B rebate model RFI, which we strongly oppose. If implemented, this approach risks jeopardizing the health of children and the institutions that serve them. As HRSA evaluates the responses to this RFI and considers whether and how to implement this model, we respectfully request that the agency center its decisions on preserving access to safety net institutions and childrens hospitals. If HRSA chooses to move forward with this effort, we request that it allows covered entities to shape the implementation of its new program. Thank you for your attention to this matter and for your stewardship of the 340B Program. Sincerely, Jenny Elhadary, PharmD Vice President, Clinical Services Senior Director, Pharmacy Services
HRSA-2026-0001-1671(no commenter metadata)2026-04-17T04:00Z22,686 chars
Comments (attached) submitted on behalf of the Michigan Primary Care Association. April 17, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Michigans 42 Community Health Centers (CHCs) and the patients they serve, the Michigan Primary Care Association (MPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, the Michigan Primary Care Association strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Summary of Comments: In these comments, the Michigan Primary Care Association explains: A. The importance of 340B savings to Michigans CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 693,000 low- income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low- income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Michigan, CHCs routinely rely on 340B savings to support services such as: expansion of primary care services, support enabling services, uncompensated care including sliding fee and uninsured patients, medication affordability and pharmacy services, support uncompensated dental care, maternal care services, substance use services, school-based services, vision, mental health, capital investments, lab/radiology services, workforce programs, nutrition/food programs, and mobile or portable care. (The 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 table below reflects the critical patient services and supports Michigan health centers are using 340B savings to support.) As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi- step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Michigans CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty 4 around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically- underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE 5 types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high- cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. At this time, Michigan CHCs have not yet had to implement widespread reductions in staffing or services directly attributable to lower 340B savings. However, CHCs are already operating under increasing financial strain due to changes in Medicaid requirements, anticipated shifts in patient coverage and utilization, and declining enrollment and retention in the Fee-for-Service Marketplace. Layering a 340B rebate model on top of these pressures would result in delayed or reduced access to 340B savings and significantly exacerbate these challenges. Given these dynamics, CHCs anticipate that implementation of a rebate model would necessitate difficult operational decisions, including hiring freezes or delayed recruitment for clinical and pharmacy staff, scaling back pharmacy operations or service lines, reducing enabling services such as transportation and care coordination, and postponing or cancelling planned expansions. Health centers may also be forced to rely on lines of credit to manage cash flow gaps and make challenging decisions 6 regarding access to high-cost medications. Consistent with the experience outlined throughout these comments, reductions in 340B savings directly translate into reduced access to care and services for the medically underserved populations CHCs serve. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: 7 Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: 8 Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 9 Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Frank Waters, Senior Director of Government Affairs at fwaters@mpca.net. Sincerely, Phillip Bergquist Chief Executive Officer Michigan Primary Care Association 10 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1672Neighborhood Healthcare2026-04-17T04:00Z50,283 chars
See attached file(s) Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Healthcare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Neighborhood Healthcare anticipates a loss of 37% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Neighborhood Healthcare has been providing health care services in San Diego County since 1969 and in Riverside County since 1996. Today, we operate 34 health centers among three geographic areas: Southwest Riverside County, North Inland (San Diego County), and East County (San Diego County). The organization provides comprehensive care to all its patients, including medical, dental, prenatal, mental health, podiatry, chiropractic, and acupuncture services. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Neighborhood Healthcare in particular, this means it will impact: 103,659 patients served annually $6,441,193 in administrative costs associated with operating and maintaining our 340B Program. At Neighborhood Healthcare, 340B savings are used to help offset operating expenses that allow us to provide comprehensive, highquality care to our 103,659 patients, many of whom face significant financial and social barriers to accessing healthcare. One critical initiative supported by 340B savings is the expansion of our pharmacy refill program, which is designed to improve medication access and adherence. Through this program, Neighborhood Healthcare is able to provide more effective medication reconciliation and refill management. This investment has substantially reduced the administrative burden on our registered nurses, allowing them to focus more time on direct patient care. As a result, the 340B Program has directly contributed to improved care quality, enhanced patient safety, and better health outcomes across our patient population. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Neighborhood Healthcare provided $6,848,892 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Neighborhood Healthcare anticipates needing 0.60 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Neighborhood Healthcare anticipates an increase of $24,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and projects 7% needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Based on detailed internal analysis and planning, Neighborhood Healthcare anticipates the need to add 0.60 FTE staff to manage the increased regulatory, operational, administrative, and compliance burden created by the 340B rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 Neighborhood Healthcare anticipates $2.3M in upfront drug acquisition costs and $42,475 7 Internal NACHC assessment (99 responses). 8 Ibid. Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org for additional staff in the first year. Carrying these costs poses significant financial risk, particularly in the event of delayed, denied, or disputed rebate payments. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 24 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Neighborhood Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $16,990 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 103,659 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $11,400 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 16 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 179 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 179 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in San Diego and Riverside Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Neighborhood Healthcare provides our low-income patients with access to affordable medications that would have otherwise been extremely expensive at retail cost. Insulins normally costing $200 - $1,000 retail would only cost uninsured patients $50-$100 under 340B. Through our partnerships with contract pharmacies, Neighborhood Healthcare has been able to expand access of affordable medications to our patients. Patients can conveniently get their prescriptions at discounted pricing at locations close to their homes. Increased access of locations using contract pharmacies resulted in increased 340B savings to the health center as well. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org Based on our organizations data, we estimate it would cost $2,533,681 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $245,948 to purchase these same drugs at the 340B ceiling price. This represents a 930% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Neighborhood Healthcare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as our pharmacy refill program would need to be reduced, and medication reconciliation and refill management may need to shift back to RNs. This would significantly reduce the time RNs have available for direct patient care and chronic disease management. Operating Hours: We anticipate needing to reduce our clinic hours by 16 hours per week, specifically impacting our evening and weekend availability. These are the only times many of our working- class and agricultural patients can seek care without losing wages. Reducing these hours would directly limit access for the very populations the 340B program is intended to support. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full- time Clinical Pharmacist. This trade-off diminishes our capacity to provide medication therapy management, chronic disease support, and safe prescribing oversight. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 10,089 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Neighborhood Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Neighborhood Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1.23M. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Neighborhood Healthcares Data: Neighborhood Healthcare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $187,000 in 2026, rising to $627,000 in 2027, and further increasing to $682,000 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Neighborhood Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Neighborhood Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $350,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Neighborhood Healthcare Administration 215 S Hickory St, Escondido, CA 92025 | D: (833) 867-4642 | nhcare.org Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Neighborhood Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Neighborhood Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Neighborhood Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Julie Nguyen, Senior Director of Financial Analytics & 340B at Julie.Nguyen@nhcare,org. Sincerely, Rakesh Patel, MD, MBA, FACHE Chief Executive Officer Neighborhood Healthcare
HRSA-2026-0001-1673CHI St. Gabriel's Hospital2026-04-17T04:00Z6,157 chars
See attached file(s) CHI St. Gabriels Hospital, a member of CommonSpirit Health 815 2nd St SE, Little Falls, MN 56345 Phone: (320) 632-5441 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Gabriels Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St. Gabriels Hospital that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Gabriels Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the Apr 20, 2026 CHI St. Gabriels Hospital, a member of CommonSpirit Health HHS Docket No. HRSA-2026-03042 proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, David J. Jones 340b Authorizing Official, Market President-CAH CHI St. Gabriels Hospital Little Falls, MN As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers Apr 20, 2026 CHI St. Gabriels Hospital, a member of CommonSpirit Health HHS Docket No. HRSA-2026-03042 across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1674Northeast Valley Health Corporation2026-04-17T04:00Z48,229 chars
See attached file(s) SAN FERNANDO VALLEY HEALTH CENTERS Canoga Park (818) 340-3570 Pacoima (818) 896-0531 Pacoima Womens (818) 485-8250 San Fernando (818) 365-8086 Sun Valley (818) 432-4400 Transitions to Wellness North Hollywood & Homeless Mobile Unit (818) 826-5555 Transitions to Wellness Van Nuys & Homeless Mobile Unit (818) 765-8656 Van Nuys Adult (818) 988-6335 Van Nuys Pediatric Health & WIC Center (818) 778-6240 SANTA CLARITA VALLEY HEALTH CENTERS Newhall (661) 593-7500 Santa Clarita (661) 673-8800 Valencia (661) 287-1551 SCHOOL-BASED HEALTH CENTERS L.A. Mission College (Student Health Center) (818) 362-6182 Maclay Wellness Center (818) 897-2193 (Charles Maclay Middle School) Teen Health Center (San Fernando High School) (818) 365-7517 DENTAL CENTERS (818) 270-9555 Maclay Wellness Center (Charles Maclay Middle School) San Fernando Sun Valley Teen Health Center (San Fernando High School) Transitions to Wellness (North Hollywood) Transitions to Wellness (Van Nuys) BEHAVIORAL HEALTH (818) 270-9740 DUI PROGRAM (818) 365-2571 WIC PROGRAM (800) 313-4942 1172 N. Maclay Avenue San Fernando, CA 91340 o: (818) 898-1388 nevhc.org f: (818) 365-4031 April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Northeast Valley Health Corporation (NEVHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: NEVHC anticipates a loss of $100,000 to $200,000 for hiring additional staff to process rebates from entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. NEVHC is a nonprofit community health center that provides comprehensive primary, dental, and behavioral healthcare services to underserved communities in the San Fernando and Santa Clarita Valleys. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For NEVHC in particular, this means it will impact: 102,312 340B transactions for over 83,000 patients. $150,000 in current administrative costs for our 340B program. The patient care includes purchasing private vaccines, care coordination, and in-house medication administration. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: NEVHC anticipates that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: NEVHC anticipates needing 1 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, NEVHC anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 NEVHC anticipates hiring 1 additional FTE. 7 Internal NACHC assessment (99 responses). Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. NEVHC estimates that an additional FTE would cost the organization $60,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 8 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NEVHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 83,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $250,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. 8 Ibid. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend several hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. CHCs staff must monitor claims across several different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Los Angeles County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At NEHVC, we offer sliding fee discounts, patient assistance programs, and copay assistance programs to help with affordability. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $13,327,961 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $4,123,099 to purchase these same drugs at the 340B ceiling price. This represents a 323% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, NEVHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. For example, we provide Comprehensive Medication Management services, without any reimbursement, to our most complex patients with Diabetes, Hyperlipidemia, and Hypertension. With the rebate program, we will not be able to provide these services. 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Operating Hours: We anticipate needing to reduce our clinic hours, specifically impacting our evening and working hours, which are the only times our working-class patients can seek care without losing their wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund key clinical and non-clinical staff that contribute to patients overall healthcare. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,494 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NEVHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt- pay discount. However, NEVHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $9,204,862. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. NEVHCs DATA: NEVHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $228,731 in 2026. Additionally, upfront costs would increase to $619,605 in 2027 and $750,067 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $553,000 at an estimated 6% borrowing rate annuallyfunds that are currently dedicated to our prenatal program, care coordination, private vaccine purchases, and clinical pharmacy programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on NEVHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays NEVHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $650,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B- purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion NEVHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NEVHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NEVHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact julieleyba@nevhc.org Sincerely, Christopher Reed Chief Executive Officer Northeast Valley Health Corporation
HRSA-2026-0001-1675Community Action For Responsible Hospitals2026-04-17T04:00Z8,592 chars
Please see the attached comments from organizations representing the interests of workers, faith leaders, healthcare providers, and patient advocates in response to HRSA's consideration of a rebate model under the 340B program. BETTERHOSPITALSNOW.ORG 1 April 17, 2026 Health Resources and Services Administration Rebate Model in the 340B Program HHS Docket No. HRSA-2026-03042 We, the undersigned organizations, representing the interests of workers, faith leaders, healthcare providers, and patient advocates, offer these comments in response to Health Resources and Service Administrations (HRSA) consideration of a rebate model under the 340B program, consistent with our mission to restore patient-centered care. Evaluating a rebate model approach has the potential to establish long overdue accountability mechanisms that ensure 340B serves patients and community health rather than hospital profit. The rapid expansion of the 340B program underscores the urgency of reform. In 2024, covered entities spent $81 billion to purchase discounted drugs through the program, an increase of $12.6 billion from 2023, according to HRSAs analysis. Hospitals accounted for 87 percent of all 340B purchases, underscoring their dominant role in the program. Notably, total 340B drug purchases are now approximately 40 percent larger than those made through Medicaid, highlighting the programs rapidly expanding scale and financial impact. Despite this expansion, there is little evidence that increased participation has translated into meaningful improvements in access or affordability for low-income patients. Research by Magnolia Market Access shows just how far the 340B program has veered off track. The number of Disproportionate Share Hospitals (DSHs) in 340B has surged more than sixfold up 565 percent from 2004 to 2023. Meanwhile, after joining 340B, many hospitals boosted their financial portfolios in stocks and bonds while cutting back on free and discounted care. Staffing levels remained flat. In short, hospitals improved their bottom lines while families, workers, and communities were left behind. Hospital abuse of 340B is not an isolated issue its a clear symptom of a broader trend: the corporatization of our healthcare system, where profit comes before patients. According to a Congressional Budget Office report, the 340B program increasingly functions as a hospital financial strategy rather than a patient assistance initiative, with costs shifting across the healthcare system. These impacts are felt by patients through higher out-of-pocket pharmacy expenses, by employers and payers through increased insurance premiums, and by taxpayers through greater Medicaid and other public program spending. BETTERHOSPITALSNOW.ORG 2 At the same time, safety-net clinics despite serving the most vulnerable populations generate the least revenue under the program, further highlighting disparities in how its benefits are distributed. These dynamics are intensified by hospital consolidation and private equity ownership. As private equity firms buy more hospitals and executive pay soars, families are burdened with rising medical debt and a declining quality of care. Today, more than 60 percent of all household debt in America comes from medical bills. The consequences are devastating: one study found that after private equity took over hospitals, surgical infections doubled, with complications rising 25 percent. Against this backdrop, HRSAs consideration of a rebate model represents an important test of whether the program can be reoriented toward transparency, integrity, and patient benefit. We respectfully submit the following comments to recommend how HRSA can operationalize these principles through the reporting and integrity provisions outlined in Sections 6 and 7 of its Request for Information (RFI). Section 6: Required Reporting Section 6 requests comment on what specific data manufacturers should be required to support. We support data reporting from both manufacturers and covered entities. We also recognize that there may be a need for data submission at two different times: 1) submission at initial request, when covered entities purchase a drug at full price 2) submission when the rebate is requested. We support full submission of all recommended data elements at both the initial purchase and when the rebate is requested. Specifically, we support reporting of the pharmacy claim fields referenced in the initial RFI (90 FRN 36165), including: date of service, date prescribed, RX number, Fill Number, 11 Digit National Drug Code (NDC), Quantity Dispensed, Prescriber ID, Service Provider ID, 340B ID, Rx Bank Identification Number (BIN), Rx Processor Control Number (PCN). In addition, we support adding additional data elements, including type of health insurance the patient has, the paid and allowed amounts of the drug (by insurer, if it applies), the dosage of the drug, and the rebate amount. We recognize that these additional data elements may not be known upon initial request, but they are likely known when a rebate is requested. To capture these additional data elements, HRSA may consider industry standards, such as primary payer as it is captured on the hospital UB-04 (CMS-1450) claim form. The RFI also asks what specific data should be shared publicly. We support public disclosure of all data elements listed above. Finally, section 6 asks about the frequency and duration of data release. We support the release of a publicly available file (i.e. Comma-Separated Value) posted on the HRSA website, every 30 days, for the duration of the pilot. BETTERHOSPITALSNOW.ORG 3 Section 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Section 7bii asks about whether a rebate-based model could address the program's integrity concern of diversion within the 340B program. Diversion is defined as the sale of a 340B drug to someone who is not a patient of a covered entity. Estimates indicate as much as 25 percent of sales of 340B-eligible Medicare Part D drugs could be subject to diversion. Requiring a rebate may have an impact on the volume of requested 340B drugs, as providing additional upfront capital for purchase may limit the ability for some covered entities to maintain historic volume standards. Further, requiring a covered entity to submit the additional data elements we listed above, would add certainty that the covered entity is requesting a 340B drug on behalf of someone who is truly is one of their patients, thus mitigating concerns regarding diversion. Lastly, we also believe the rebate model must include all current participants to generate an accurate, comprehensive assessment to ensure future decisions are based on a complete understanding of the programs impact. Legislative efforts to exempt certain groups through targeted carve-outs would undermine transparency, open the door to further misuse, and risk compromising the integrity and effectiveness of the rebate pilot. Piloting a rebate model in the 340B program is a critical step toward fixing a system that has drifted far from its original purpose. Without guardrails, 340B is yet another tool for large health systems and their business partners, like PBMs and chain pharmacies, to increase profits. While hospital corporatization may be good for business, it comes at the expense of Americans health and affordability. Requiring hospitals to demonstrate compliance before receiving a discount could help curb excessive markups, prevent duplicate discounts, and ensure that 340B savings are tied directly to patient and community benefit. In that context, we urge HRSA and policymakers to adopt broader, meaningful reforms to ensure 340B works for patients in need instead of large hospital systems, and their corporate partners. representing the interests of workers, faith leaders, healthcare providers, and patient advocates offer these comments in response to Health Resources and Service Administration's (HRSA) consideration of a rebate model under the 340B program, consistent with our mission to restore patient-centered care. representing the interests of workers, faith teaders, healthcare providers, and patient advocates, offer these comments in response to Health Resources and - Service Administration's (HRSA) consideration of a rebate model under 1 the 340B program, consistent with our mission to restore patient-centered care.
HRSA-2026-0001-1676Esperanza Health Centers2026-04-17T04:00Z38,930 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Esperanza Health Centers, I am writing to provide an analysis of how the proposed 340B rebate model could impact our community health center and the patients that we serve. Esperanza Health Centers is a Federally Qualified Health Center that was founded in 2004 to provide a wide range of affordable, high-quality primary care services to residents of Chicagos southwest side. Today, thanks in no small part to the 340B program, we have grown to operate seven clinical sites, a dedicated behavioral health center, two community resource centers, and a Program of All-Inclusive Care for the Elderly, which launched in 2024. Last year we delivered care to more than 57,200 unique patients and were again recognized by HRSA for the quality of our care. In every respect, Esperanza can be seen as a success in community health. That narrative, however, is in jeopardy today as HRSA considers fundamental changes to the 340B program that would require entities like Esperanza to seek rebates instead of being able to purchase 340B drugs at a discount, as has been the practice. Mandating that health centers pay full, upfront costs for 340B drugs under the proposed pilot would not only impact patients directly, but also force Esperanza to assume considerable costs that it could not afford. Based on our estimates, Esperanza Health Centers anticipates an average loss of $480,000 per year due to the administrative hurdles of manual reconciliation. This is the most conservative estimate for us, predicated on a 5% denial rate and the need to hire an additional FTE to handle rebate claim submissions. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed pilot is not only a direct threat to our core mission but a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices so we could provide affordable medications to our uninsured and underinsured patients. It has also enabled our sector to stretch scarce Federal resources as far as possible, as Congress intended. Esperanza currently handles 126,121 340B transactions annually and spends $2,182,729 in administrative costs, including dispensing fees, third-party administrator costs, and staffing. The program 2 supports some of our most impactful services, including behavioral health, adult medicine, and a wide range of community engagement programs, among others . Without 340B, these service lines would face an uncertain future. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients we serve, jeopardizing their treatment adherence and health outcomes. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 (and more than 7,200 Esperanza patients living with diabetes) affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 3 Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on, and it will force us to cut programs, limit operating hours, and fundamentally compromise the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Esperanza Health Centers provided $7.7M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Esperanza also anticipates needing to hire a dedicated 340B analyst to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. That person would need to be trained and equipped, which we estimate will add $20,000 in start-up costs. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 4 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.5 As noted above, Esperanza anticipates having to hire 1 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.6 CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Esperanza, the hiring of an FTE to serve as a 340B analyst would represent approximately $95,500 in additional staffing costs Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, Esperanza estimates needing 4 hours of administrative time weekly to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Again, Esperanza strongly urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Esperanza Health Centers anticipates that $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 5 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 140 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Southwest area of 5 Internal NACHC assessment (99 responses). 6 Ibid. 5 Chicago and Cook County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,7 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.8 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to 7 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9 Internal NACHC survey data 6 wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Esperanza, we have always passed along the full discount of our 340B medications to our uninsured and underinsured patients, thus making their treatment accessible. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC and its consultant, FQHC 340B Compliance created another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Based on our organizations data, we estimate it would cost Esperanza $7.7M to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $140,000 to purchase these same drugs at the 340B ceiling price. This represents a 5,400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Esperanza Health Centers anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our behavioral health offerings, our adult medicine services, and much of our community programming, including the food distribution initiative that we host for eight months of the year. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical and administrative staff. Weve calculated that Esperanza would likely have to eliminate 8 or 9 staff roles which could come from a variety of areas, including our behavioral health team, our community engagement department, and frontline staff members such as patient service representatives and care coordinators. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 11,199 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Esperanza Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 9 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Esperanza Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by roughly $630,000 per month. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to dip into our line of credit to the tune of $570,000 and utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be about $16,000 annuallyfunds that could be much more impactful for our organization and patients if they were invested in direct care to persons in need. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on a small handful of primary care clinics like Esperanza Health Centers, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Esperanza Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $480,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 11 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion 12 Esperanza Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Esperanza believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Esperanza Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ricardo Cifuentes, VP of External Affairs at rcifuentes@esperanzachicago.org Sincerely, Ryan Gadia Interim Chief Executive Officer Esperanza Health Centers
HRSA-2026-0001-1677North Central Texas Community Health Care Center2026-04-17T04:00Z6,114 chars
See attached file. North Central Texas Community Health Care Center, Inc 940-766-6306 200 Martin Luther King, Jr. Blvd., Wichita Falls, TX 76301 www.chcwf.com April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of North Central Texas Community HealthCare Center, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. I. Utilization of 340B Savings North Central Texas Community HealthCare Center utilizes 340B savings in the following ways: - In-scope activities and services, including but not limited to: o Sliding Fee Scale o Non-reimbursable services: (e.g., transportation, case management, and eligibility assistance) o Outreach and Enrollment o Dental services o Lab/X-ray services o Behavioral Health o Other charitable programs and services II. Estimated Financial Impact of Rebate Model - Given the ongoing financial hardship from the continued manufacturer restrictions, this projects financial impact would place even greater strain on our already limited resources. - Staffing Impact: North Central Texas Community HealthCare Center anticipates needing an additional 2-3 FTEs, costing our organization an estimated $200,000 per year in additional costs. North Central Texas Community Health Care Center, Inc 940-766-6306 200 Martin Luther King, Jr. Blvd., Wichita Falls, TX 76301 www.chcwf.com III. Health Center Impacts Every day, we care for patients who are already making difficult choices just to get by. The 340B program allows us to remove at least one of those burdens the cost of their medications. The proposed rebate model would put that burden back, immediately and significantly. One of our patients a middle-aged individual managing diabetes, hypertension, and high cholesterol relies on our pharmacy to stay stable. Today, they are able to pick up all of their medications for approximately $50. Under a rebate model, that same set of medications could cost over $300 upfront. For this patient, that is not a temporary inconvenience it is a barrier that stops access altogether. Faced with that reality, they would likely delay picking up medications, skip doses to make them last longer, or go without entirely. We know what happens next. Blood sugars rise. Blood pressure goes uncontrolled. A preventable emergency becomes inevitable. What could have been managed with affordable medications turns into an emergency room visit or hospitalization. The cost to the healthcare system increases, but more importantly, the patient experiences avoidable harm. This story is not unique it reflects the reality for many of the patients we serve. The rebate model would force individuals to choose between medications and basic needs like food, housing, and utilities. It moves us backward; undermining progress made in value-based care and efforts to address social determinants of health. Behind the scenes, the impact is just as profound. Our providers and nurses will spend more time trying to piece together affordable alternatives instead of focusing on what is clinically best. Our staff will take on the added burden of navigating rebate tracking, compliance, and reimbursement uncertainty in an already complex 340B environment. What is now a streamlined process will become fragmented, slower, and more prone to error. Financially, the shift to a rebate model introduces instability we cannot absorb without consequence. We would be required to front the full cost of medications while waiting without guarantee for rebates to be paid. Any delay or denial directly affects our ability to operate. These are not abstract risks; they translate into real decisions about staffing, services, and patient access. Ultimately, we may be forced to make choices we have worked hard to avoid reducing services, limiting hours, or increasing medication prices. Each of these decisions creates another barrier for the patients who are already navigating more than most. The 340B program was designed to help safety-net providers stretch scarce resources to meet growing needs. A rebate model does the opposite. It shifts risk onto health centers and cost onto patients, weakening the very system intended to support them. North Central Texas Community Health Care Center, Inc 940-766-6306 200 Martin Luther King, Jr. Blvd., Wichita Falls, TX 76301 www.chcwf.com Conclusion North Central Texas Community HealthCare Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the upfront 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. North Central Texas Community HealthCare Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety-net providers. North Central Texas Community HealthCare Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this important issue. If you have any questions, please contact Shelby Anderson, PharmD, at sanderson@chcwf.com. Sincerely, Mike Dotson, CEO
HRSA-2026-0001-1678(no commenter metadata)2026-04-17T04:00Z87,044 chars
See attached file(s) SIU School of Medicine Federally Qualified Health Centers Integrating Medical, Behavioral and Dental Health Health Center Locations Springfield Quincy Decatur Carbondale Jacksonville Lincoln Taylorville Pittsfield Administrative Offices Center for Family Medicine 520 N. 4th Street, Springfield, IL 62702-5238 Phone: 217.545.8000 Fax: 217.545.5806 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: The SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, has estimated an anticipated loss of $1,500,000 initially, or more, in 340B savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs due to additional overhead burden. National data shows that a single mid-sized CHC expects to incur over $3,000,000 in additional costs annually to manage the pilot. Our CHC in Illinois is considered mid-large sized, with over 500 employees, 130 providers, who deliver services to over 50,000 patients in 10 different rural areas, 4 urban areas, and 2 mobile clinics. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University has participated in the 340B Drug Pricing Program since 2012, and heavily relies on the program's up-front discount structure to maintain operational stability. The current point-of-sale discount model allows our health center to immediately reinvest savings into patient care services a financial cycle that a rebate-based model would fundamentally disrupt. Under a rebate model, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University would be required to purchase drugs at full wholesale acquisition cost (WAC) and await reimbursement after the fact, which could mean as many as 20+ business days. As a Federally Qualified Health Center serving a predominantly low-income, uninsured, and underinsured patient population, we do not carry the cash reserves or access to capital necessary to front these costs for weeks or months at a time. This operational burden would be disproportionately borne by safety-net providers like FQHCs, who operate on razor-thin margins and lack the financial cushion available to larger health systems. Additionally, the administrative complexity of a rebate model including claim submission, reconciliation, dispute resolution, and rebate tracking across multiple manufacturers and drug categories would require significant new staffing and infrastructure investments. These are resources our health center does not currently have and cannot easily absorb without redirecting funding away from direct patient care. I.We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SIU Center for Family Medicine, Board of Trustees of Southern Illinois University in particular, this means it will impact: 66,203 Unique Patients SIU Center for Family Medicine, Board of Trustees of Southern Illinois University uses savings provided by 340B to allow patients with no insurance to utilize a 340B cash discount program, to help patients enroll in health insurance for free, to connect them with resources based on social determinates of health (SDOH), to offer Opioid Programs/Medication Assisted Therapy (MAT), to offer Behavioral Health services and Tele Psych services, OB/Womens Health, and to support free Diabetic Education as well as many other local services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II.Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III.Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs, but also a duplicative and highly unnecessary administrative burden that threatens other critical health support services. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: SIU Center for Family Medicine, Board of Trustees of Southern Illinois University provided $1,119,590 in sliding fee discounts during CY 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates needing 1.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given the increased regulatory, monitoring, and follow-up complexity, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates an increase of $250,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates an increase of 1.75 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University operates in a government environment, being part of both the State of Illinois and the University System. This environment creates high hiring costs, and steep learning curves. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 50,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,500,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 130 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 130 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central and Southern Illinois with no affordable medication options. Over 17% of the U.S. population lives in a pharmacy desert already,9 ...... and the additional closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,000,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $275,000 to purchase these same drugs at the 340B ceiling price. This represents a 300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations to rural school districts, our medication therapy management (MTM) program for complex diabetic patients, and our dietetic counselors who provide classes and group sessions. Operating Hours: We anticipate needing to reduce operating clinic hours, specialty clinics, or ultimately closing clinics that are not able to stay fiscally operational. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund full-time Community Health Workers and a Behavioral Health Consultants, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 5,000 uninsured or underinsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,000,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Center for Family Medicine, Board of Trustees of Southern Illinois University estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by around $85,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves, or go into deficit spending. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays SIU Center for Family Medicine, Board of Trustees of Southern Illinois University urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $75,000-$100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV.Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V.Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI.Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SIU Center for Family Medicine, Board of Trustees of Southern Illinois University strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Michael Black, CFO, Director of Finance and 340B Program, mblack@siumed.edu Sincerely, Iris E. Wesley Chief Executive Officer SIU Community Health Center Programs Administrative Offices SIU Center for Family Medicine 520 N 4th Street, Springfield IL 62702-5238 Phone: 217-757-8137 | Fax: 217-545-5806 iwesley@siumed.edu she/her April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: The SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, has estimated an anticipated loss of $1,500,000 initially, or more, in 340B savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs due to additional overhead burden. National data shows that a single mid-sized CHC expects to incur over $3,000,000 in additional costs annually to manage the pilot. Our CHC in Illinois is considered mid-large sized, with over 500 employees, 130 providers, who deliver services to over 50,000 patients in 10 different rural areas, 4 urban areas, and 2 mobile clinics. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University has participated in the 340B Drug Pricing Program since 2012, and heavily relies on the program's up-front discount structure to maintain operational stability. The current point-of-sale discount model allows our health center to immediately reinvest savings into patient care services a financial cycle that a rebate-based model would fundamentally disrupt. Under a rebate model, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University would be required to purchase drugs at full wholesale acquisition cost (WAC) and await reimbursement after the fact, which could mean as many as 20+ business days. As a Federally Qualified Health Center serving a predominantly low-income, uninsured, and underinsured patient population, we do not carry the cash reserves or access to capital necessary to front these costs for weeks or months at a time. This operational burden would be disproportionately borne by safety-net providers like FQHCs, who operate on razor-thin margins and lack the financial cushion available to larger health systems. Additionally, the administrative complexity of a rebate model including claim submission, reconciliation, dispute resolution, and rebate tracking across multiple manufacturers and drug categories would require significant new staffing and infrastructure investments. These are resources our health center does not currently have and cannot easily absorb without redirecting funding away from direct patient care. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SIU Center for Family Medicine, Board of Trustees of Southern Illinois University in particular, this means it will impact: 66,203 Unique Patients SIU Center for Family Medicine, Board of Trustees of Southern Illinois University uses savings provided by 340B to allow patients with no insurance to utilize a 340B cash discount program, to help patients enroll in health insurance for free, to connect them with resources based on social determinates of health (SDOH), to offer Opioid Programs/Medication Assisted Therapy (MAT), to offer Behavioral Health services and Tele Psych services, OB/Womens Health, and to support free Diabetic Education as well as many other local services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs, but also a duplicative and highly unnecessary administrative burden that threatens other critical health support services. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SIU Center for Family Medicine, Board of Trustees of Southern Illinois University provided $1,119,590 in sliding fee discounts during CY 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates needing 1.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given the increased regulatory, monitoring, and follow-up complexity, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates an increase of $250,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates an increase of 1.75 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University operates in a government environment, being part of both the State of Illinois and the University System. This environment creates high hiring costs, and steep learning curves. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 50,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,500,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 130 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 130 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central and Southern Illinois with no affordable medication options. Over 17% of the U.S. population lives in a pharmacy desert already,9 ...... and the additional closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,000,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $275,000 to purchase these same drugs at the 340B ceiling price. This represents a 300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations to rural school districts, our medication therapy management (MTM) program for complex diabetic patients, and our dietetic counselors who provide classes and group sessions. Operating Hours: We anticipate needing to reduce operating clinic hours, specialty clinics, or ultimately closing clinics that are not able to stay fiscally operational. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund full-time Community Health Workers and a Behavioral Health Consultants, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 5,000 uninsured or underinsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, SIU Center for Family Medicine, Board of Trustees of Southern Illinois University estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,000,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Center for Family Medicine, Board of Trustees of Southern Illinois University estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by around $85,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves, or go into deficit spending. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SIU Center for Family Medicine, Board of Trustees of Southern Illinois University, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays SIU Center for Family Medicine, Board of Trustees of Southern Illinois University urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $75,000-$100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SIU Center for Family Medicine, Board of Trustees of Southern Illinois University strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SIU Center for Family Medicine, Board of Trustees of Southern Illinois University appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Michael Black, CFO, Director of Finance and 340B Program, mblack@siumed.edu Sincerely, Iris E. Wesley Chief Executive Officer SIU Community Health Center Programs Administrative Offices SIU Center for Family Medicine 520 N 4th Street, Springfield IL 62702-5238 Phone: 217-757-8137 | Fax: 217-545-5806 iwesley@siumed.edu she/her
HRSA-2026-0001-1679Massachusetts League of Community Health Centers2026-04-17T04:00Z41,641 chars
See attached file(s) 1 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the 37 Massachusetts federally qualified community health centers (CHCs) and the 818,875 patients they serve, the Massachusetts League of Community Health Centers (MLCHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, MLCHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, the MLCHC explains: 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 A. The importance of 340B savings to Massachusetts CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 818,875 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Massachusetts CHCs routinely rely on 340B savings to support services such as: dental care, medication delivery programs, clinical pharmacy programs, medication adherence programs, as well as care coordination and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Massachusetts CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A). Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate 4 model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve- outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to, in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs in Massachusetts have already taken significant, and difficult, steps in response to lower 340B savings e.g., laying off staff, scaling back on services, limiting the purchase and/or acquisition of high-cost medications to control cash flow risk, reducing current inventory, and delayed or canceled much need technology and/or clinical pharmacy investments. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently 5 dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 6 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 7 of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Tom Statuto Senior Vice President of Government Affairs and Public Policy at MLCHC (tstatuto@massleague.org). Sincerely, Thomas Statuto Senior Vice President of Government Affairs and Public Policy Massachusetts League of Community Health Centers 40 Court Street, 10th Floor Boston, MA 02108 8 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the 37 Massachusetts federally qualified community health centers (CHCs) and the 818,875 patients they serve, the Massachusetts League of Community Health Centers (MLCHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, MLCHC strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, the MLCHC explains: The importance of 340B savings to Massachusetts CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 818,875 low-income and uninsured patients. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law and regulation, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Massachusetts CHCs routinely rely on 340B savings to support services such as: dental care, medication delivery programs, clinical pharmacy programs, medication adherence programs, as well as care coordination and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Massachusetts CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A). Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to, in their 340B programs. For example: Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs in Massachusetts have already taken significant, and difficult, steps in response to lower 340B savings e.g., laying off staff, scaling back on services, limiting the purchase and/or acquisition of high-cost medications to control cash flow risk, reducing current inventory, and delayed or canceled much need technology and/or clinical pharmacy investments. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Tom Statuto Senior Vice President of Government Affairs and Public Policy at MLCHC (tstatuto@massleague.org). Sincerely, Thomas Statuto Senior Vice President of Government Affairs and Public Policy Massachusetts League of Community Health Centers 40 Court Street, 10th Floor Boston, MA 02108 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1680Independent Pharmacy Cooperative2026-04-17T04:00Z4,610 chars
See attached file(s) To: Health Resources and Services Administration (HRSA) Re: HHS Docket No. HRSA-2026-03042 Date: April 15th, 2026 Thank you for the opportunity to comment on the proposed 340B Rebate Model Pilot Program. The Independent Pharmacy Cooperative (IPC) represents the interests of pharmacist owners, managers, and employees of more than 2100 independent community pharmacies located in all 50 States. Our members are community based, small business owners who are among Americas most accessible health care providers, often serving as the only pharmacy or health professional in many rural and urban medically underserved areas. The 340B Drug Pricing Program is established under 42 U.S.C. 256b, which requires manufacturers participating in Medicaid to offer each covered entity covered outpatient drugs at or below the applicable ceiling price. Currently the ceiling price is an upfront discount, not a retrospective rebate. HRSAs RFI contemplates a rebate-based alternative mechanism for certain drugs, particularly where manufacturers assert risk of duplicate discounts under 42 U.S.C. 1396r-8(a)(5)(A). A rebate model reverses the statutory sequence by requiring covered entities to purchase at WAC and seek reimbursement later. HRSA has articulated two primary goals for the model. The first is to give manufacturers a clearer mechanism for identifying which claims are 340B-eligible. The second is to prevent duplicate discounts where the same drug transaction could trigger both a 340B discount and a rebate under the IRA's Maximum Fair Price program. The most immediate concern for covered entities and contract pharmacies under the proposed rebate model is financial. Because covered entities must purchase drugs at Wholesale Acquisition Cost (WAC) upfront and wait for reimbursement, they face significant working capital and cash flow challenges. Although the model was designed with a 10-day rebate turnaround in mind, early experience with IRA Maximum Fair Price rebates suggests payments can take 28 days or moreand longer still when claims are disputed. For rural clinics and contract pharmacies, floating those costs may simply not be feasible. In addition, the administrative burden is equally significant. Covered entities and contract pharmacies would be required to submit detailed claim-level data across multiple platforms each with their own file formats, submission rules, and reconciliation processes. Operational Impact on Covered Entities and Contract Pharmacies A. Cash Flow Exposure Under a rebate model covered entities must purchase at WAC, not the 340B ceiling price. Contract pharmacies dispense at the point of sale but do not receive rebates. Pharmacies face inventory carrying costs that can exceed reimbursement, especially for high-cost specialty drugs. This creates a structural risk of negative margin on 340B prescriptions until rebates are paid. B. Reconciliation and Data Burden A rebate model requires claim-level data submission, manufacturer-specific portals, TPA reconciliation and audit ready documentation for each dispensed unit. This is materially more complex than the current model. C. Rural Access Implications Rural communities rely heavily on contract pharmacies because covered entities often lack in-house pharmacies and patients depend on local dispensing points and rural pharmacies already face closure risk. A rebate model increases that risk by raising inventory costs, increasing reconciliation burden and reducing net revenue from 340B prescriptions. If HRSA Implements a Rebate Model, It Must Include: 1. Mandated 10-day rebate payment deadline o Consistent with timely-payment principles in federal contracting. 2. Standardized national data requirements o Prevent manufacturer-specific barriers inconsistent with 256b(d)(1)(B)(vi). 3. Pharmacy reimbursement floors o Prevent negative margins on high-cost drugs. 4. Transparent dispute-resolution timelines o Align with HRSAs existing ADR authority under 256b(d)(3). Conclusion Independent Pharmacy Cooperative appreciates the opportunity to comment on this important HRSA 340B Rebate Model-Request for Information. IPC believes that the proposed rebate rule would introduce unnecessary complexities to the current 340B program. Upfront discounts remain the most transparent and administratively efficient mechanism for managing the program. Respectfully submitted, Mark Kinney Mark Kinney, R.Ph. Executive Vice President of Government Relations Independent Pharmacy Cooperative
HRSA-2026-0001-1681Bakersfield Memorial Hospital2026-04-17T04:00Z5,050 chars
Please see the attached letter regarding the Pilot Program. Thank you for your review. Dignity Health. A member of CommonSpirit April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Bakersfield Memorial Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Bakersfield Memorial Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Bakersfield Memorial Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter most-our patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appeal-resources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Ken Keller President & CEO Bakersfield Memorial Hospital 661-541-0007 ken.keller@commonspirit.org
HRSA-2026-0001-1682Delaware Valley Community Health2026-04-17T04:00Z119,561 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Delaware Valley Community Health (DVCH), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: DVCH anticipates an average loss of $350,000 to $750,000 from pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For DVCH in particular, this means it will impact: 2 92,342 340B transactions and 54,000 patients $120,000 in current 340B program administration costs. How savings are reinvested directly into patient care and access We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: DVCH provides $11,376,830 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: DVCH anticipates needing two additional FTEs at a total salary cost of $190,00 to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, DVCH anticipates an increase of $25,000 a year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additional staffing would be required in both the compliance and finance departments as to not over burden the pharmacy staff who need to focus primarily on the distribution of medication to the patient pollution. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 Hours a Month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. DVCH urges HRSA to require uniformity among eligible manufacturers to mitigate 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $85,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 54,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at [$ AMOUNT] annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Within DVCH, this presents a structural and financial challenge given our alignment with Epic as the enterprise EHR platform. Epic maintains a tightly controlled ecosystem and strongly discourages custom development outside of its supported frameworks. Any customization required to support rebate tracking, claims level data exchange, or pharmacy specific workflows would need to be built and fully maintained by DVCH. This creates a misalignment between operational need and vendor structure, as ongoing maintenance, testing, and revalidation would be required with every Epic system upgrade. As a result, DVCH would assume sustained responsibility for technical staffing, interface management, and system integrity, increasing both cost and operational complexity while introducing risk to long term interoperability stability. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend five hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination 7 For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 19 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 19different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Philadelphia, Montgomery, and Delaware counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At DVCH, patients are screened for eligibility using household income and family size relative to the Federal Poverty Level. Once determined eligible, patients are assigned to a discount tier that establishes a predictable, reduced out of pocket cost for services, including prescription medications. For pharmacy services, this allows medications to be dispensed at the point of sale at a set, affordable price that reflects both 340B savings and the patients assigned discount level. Patients are informed of costs in advance, and care teams work collaboratively to select clinically appropriate and cost conscious therapies. This ensures that medications remain accessible, affordable, and integrated into the patients overall plan of care without delay or financial uncertainty. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 10 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,169,901 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $ 72,520.78 to purchase these same drugs at the 340B ceiling price. This represents a 39% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, DVCH anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as care coordination services, triage nursing capacity, and uncompensated clinical pharmacy management, as well as scaling back critical programs such as Hepatitis C treatment and Medication Assisted Treatment programs. Service line reductions would also likely extend to podiatry and dental services, which are essential to comprehensive care but operate on limited margins. Operating Hours: We anticipate needing to reduce our clinic hours by 8 hours per week, specifically impacting our evening hours, which are critical access points for working class patients who cannot seek care without losing wages. Changes in the 340B model have already led to operational adjustments within our satellite locations and have directly impacted the delivery of dental services at our Norristown site, which serves a disproportionately high rate 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 of uninsured patients and relies on 340B savings to offset limited collections. As a result, we anticipate reductions in satellite office hours further limiting access to essential oral health services for this vulnerable population. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Care Coordinator or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 16,500 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. DVCH asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, DVCH estimates its 2027 Annual Rebate Opportunity Cost to be approximately $586,169.57. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 12 DVCH estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,114,439 with $2,862,974 in 2027 and $3,197,193 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either utilize already constrained financial reserves or access a line of credit. DVCH is currently operating at approximately 30 days cash on hand, which represents the minimum threshold required by our lenders. Any further reduction in liquidity risks non compliance with lender covenants. To maintain this threshold, we would likely need to draw on a line of credit at an estimated cost of approximately 8 percent interest, introducing additional financial burden and diverting resources away from patient care. This is not a sustainable solution; funds that are currently dedicated to our prenatal care program and hiring additional nurse practitioners. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on DVCH , the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays DVCH urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $316,507. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 14 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to 16 covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 17 V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 18 Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. 19 In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 20 CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 21 Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 22 entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 23 instance, in Pennsylvania, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. At DVCH, we are required to bill Medicaid at actual acquisition cost. Under a rebate model, this cost cannot be accurately determined at the time of dispensing, as all drugs are initially purchased at WAC and any rebate is realized only after the claim is submitted and processed. This creates a structural misalignment with Pennsylvania Medicaid billing requirements, as claims would either be submitted at an inflated cost or delayed pending rebate reconciliation. Both scenarios introduce compliance risk, increase administrative burden through claim reversals and resubmissions, and disrupt timely reimbursement, ultimately resulting in potential non compliance with state Medicaid requirements For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 24 would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 25 and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 26 raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 27 Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch 45 32 C.F.R. 199.21(q)(2)(iii)(E) 28 scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 29 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 30 AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 59 42 U.S.C. 256b(a)(5)(B) 31 providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 32 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 33 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 34 Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion DVCH strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. DVCH believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. DVCH appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Chief Pharmacy Officer Megan Nakhla, PharmD or Chief Administrative Officer Mark Stewart MSPH at nakhlam@dvch.org and stewartm@dvch.org . Sincerely, Brenda Robles-Cooke, MBA President & CEO Delaware Valley Community Health, Inc
HRSA-2026-0001-1683Delia Edwards · Louisville, KY, United States2026-04-17T04:00Z1,659 chars
RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients.
HRSA-2026-0001-1684Montana Primary Care Association2026-04-17T04:00Z22,814 chars
The Montana Primary Care Association (MPCA) submits the attached formal comment letter in response to HRSA's Request for Information on the proposed 340B Rebate Model Pilot Program (HRSA-2026-03042). MPCA appreciates HRSA's commitment to a transparent process on this consequential issue. The 340B program is the financial foundation of community health centers' (CHCs) ability to serve low-income, uninsured, and underinsured patients and the agency's decisions here will have direct and lasting consequences for the safety-net providers and patients who depend on it most. As detailed in the attached comments, a mandatory rebate model would impose unsustainable cashflow burdens, significant new administrative costs, and serious operational disruptions on CHCs that already operate on razor-thin margins. These harms are not theoretical Montana's CHCs have conducted rigorous analyses demonstrating the specific financial damage this model would cause to their organizations and the patients they serve. The impacts would fall hardest on rural and frontier communities, where CHCs are often the only source of primary, behavioral health, dental, and pharmacy services within hundreds of miles, and where there is no alternative safety net to absorb the loss. MPCA strongly urges HRSA not to implement a mandatory rebate model for any 340B covered entity, and to instead pursue a neutral claims clearinghouse an approach that would achieve the agency's deduplication goals at a fraction of the cost and administrative burden, without dismantling the upfront discount structure that CHCs and their patients depend on. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Montanas 13 Community Health Centers (CHCs) and the 124,344 patients they serve, the Montana Primary Care Association (MPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, MPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, MPCA explains: A. The importance of 340B savings to Montana CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 53,409 low-income and uninsured patients. 2 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 2025 AZARA DRVS data for Montana CHC patients 200% FPL and below. Commented [CM1]: This is a live link that will take you to the site to submit the comments -- https://www.regulations.gov/commenton/HRSA-2026-0001-0001 B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low- income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured3. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law4 and regulation5, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Montana, CHCs routinely rely on 340B savings to support services such as: telehealth services to frontier communities; mobile dental services; school-based health centers; pharmacy delivery services to housebound patients; and access to all primary care services in the rural and frontier areas of Montana. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. 3 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 4 Section 330(e)(5)(D) of the Public Health Service Act. 5 45 Code of Federal Register 75.307 Program Income B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Montanas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing that they would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs in Montana are considering curtailing pharmacy hours, staffing, and other services which reduces access for patients with critical needs. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of the rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication6 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability to provide 32 million low-income and uninsured patients with affordable primary care, 6 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Cindy Stergar at cstergar@mtpca.org. Sincerely, Cindy Stergar CEO Montana Primary Care Association cstergar@mtpca.org Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1685CommonSpirit- St Luke's Health Memorial Livingston2026-04-17T04:00Z7,299 chars
Please see attached letter wIm CommonSpirit - April 20, 2026 The Honorable Thornas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Luke's Health Memorial Medical Center Livingston (MMCL), a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. MMCL is a 66 bed hospital located in East Texas and primarily serves Polk and San Jacinto Counties. Of the 243 counties ranked by The County Health Rankings, Polk and San Jacinto Counties rank 220 and 205 respectively putting them in bottom quartile in the State of Texas. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanisrn will irnpose enormous costs and burdens on CHI St. Luke's Health Memorial Medical Center Livingston, that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Luke's Health Memorial Medical Center Livingston, relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under- insured patients in our facility. CHI St. Luke's Health Memorial Medical Center Livingston operates with a negative margin. Despite these challenging financial circumstances, this facility provides important Apr 20, 2028 ComrnonSpirit Health NHS Docket No, HRSA-2026-03042 community benefit programming, which is supported in part by costs avoided through the 340B program. Memorial Medical Center Livingston provides necessary Level IV Trauma Services to the East Texas community at our emergency room. The emergency room is also a designated area by the State of Texas for disaster response and decontamination. Savings from the 340B program help fund the emergency room. Our savings also help us provide care to people regardless of their ability to pay. 3408 savings also help support infusion services in our community. If MMCL were unable to provide these services locally, patients would have to travel over 45 miles to receive treatment. Many of these patients are unable to pay for infusion services and these expenses are partially offset by the 340B program. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs,No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-frant discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our heaith system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kristina Froese VP of Operations Memorial Medical Center Livingston St. Luke's Health Memorial Medical Center Livingston Livingston, TX wl CommonSpinte As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1686PrimeCare Community Health, Inc.2026-04-17T04:00Z206,835 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of PrimeCare Community Health, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PrimeCare Community Health, Inc. anticipates an average loss of 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PrimeCare Community Health, Inc. in particular, this means it will impact: Our 31,859 unique patients who depend on PrimeCare for comprehensive primary care, behavioral health, and dental services. Approximately 7,740 annual 340B contract pharmacy transactions, which have already been significantly reduced due to ongoing manufacturer restrictions. An increase to our current $2 million in administrative costs required to operate and maintain our 340B program. Our ability to reinvest 340B savings into critical patient services, including medication affordability programs, pharmacy services, sliding fee discounts, care for uninsured populations, and essential enabling services such as Access and Enrollment, Case Management, Early Childhood Development, and HIV patient navigation. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 5 A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PrimeCare Community Health, Inc. provided $1,674,279 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PrimeCare Community Health, Inc. anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PrimeCare Community Health, Inc. anticipates an increase of about $25,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, and third-party administrators. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 At PrimeCare Community Health, Inc., we anticipate the need for an additional 2.0 FTEs to manage the administrative and operational burden associated with a rebate model. Currently, only 1.0 FTE is dedicated to 340B program oversight. Given the highly specialized nature of 340B expertise and the limited availability of qualified subject matter experts, this presents a significant concern for our health centers capacity to implement and sustain such a model effectively. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 these additional costs are not an option for many entities. At PrimeCare Community Health, Inc. we estimate annual costs exceeding $876,793, including our upfront costs for purchasing pilot drugs, an additional 2.0 FTE in staff, external support vendors, and potential losses on rebate denials. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. More than 12 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PrimeCare Community Health, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 83 pharmacy locations to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations and chains to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners (i.e., Walgreens) will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Chicagoland with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. PrimeCare Community Health, Inc. is committed to ensuring medications remain affordable and accessible for all patients. We extend 340B pricing to all eligible health center patients, regardless of insurance status, and actively promote this benefit to individuals who are uninsured, underinsured, or experiencing financial barriers to accessing their prescriptions. We do not restrict access to 340B pricing based on payer type or other criteria beyond patient eligibility, as our goal is to remove cost as a barrier to care. As PrimeCare Community Health, Inc. does not operate an entity-owned pharmacy, we rely on our contract pharmacy partners to dispense medications at 340B prices with no markup. However, manufacturer imposed contract pharmacy restrictions beginning in July 2020 have made it increasingly challenging to consistently provide these discounts. Despite these limitations, our clinical and care teams remain deeply committed to working with patients to secure medications at the lowest possible cost, often at the 340B price, while also prioritizing convenience and access at pharmacy locations that best meet patients needs. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $611,224 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $71,730 to purchase these same drugs at the 340B ceiling price. This represents a 752% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PrimeCare Community Health, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as access and enrollment staff, case managers, referral coordinators, early childhood development staff, HIV patient navigators, and more. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 ability to fund Behavioral Health Consultants, directly increasing wait times for mental health appointments. We will also be forced to eliminate critical roles that benefit our health center patients. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,095 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PrimeCare Community Health, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PrimeCare Community Health, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $93,283.42. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PrimeCare Community Health, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $50,935. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to 11 immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients rely on PrimeCare Community Health, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PrimeCare Community Health, Inc. urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $91,684. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog. This forces CHCs and pharmacies to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion- dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 13 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 14 Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 15 We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VI. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 17 claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 25 H.R. REP. 102-384(II) 18 included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. 26 42 U.S.C. 256b(a)(1) 27 Id. 28 42 U.S.C. 256b(a)(1) 19 The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). 20 entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact 34 C.F.R. 447.518(a). 21 individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 22 longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 23 harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 24 manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts 42 32 C.F.R. 199.21(q)(2)(iii)(E) 25 The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 26 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 27 AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 56 42 U.S.C. 256b(a)(5)(B) 28 providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 VIII. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 29 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 30 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 31 Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PrimeCare Community Health, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PrimeCare Community Health, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PrimeCare Community Health, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kenzie Keisler, 340B Administrator, at Kenzie.Keisler@primecarechi.org. Sincerely, Lynn Hopkins PrimeCare Community Health, Inc. April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of PrimeCare Community Health, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PrimeCare Community Health, Inc. anticipates an average loss of 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PrimeCare Community Health, Inc. in particular, this means it will impact: Our 31,859 unique patients who depend on PrimeCare for comprehensive primary care, behavioral health, and dental services. Approximately 7,740 annual 340B contract pharmacy transactions, which have already been significantly reduced due to ongoing manufacturer restrictions. An increase to our current $2 million in administrative costs required to operate and maintain our 340B program. Our ability to reinvest 340B savings into critical patient services, including medication affordability programs, pharmacy services, sliding fee discounts, care for uninsured populations, and essential enabling services such as Access and Enrollment, Case Management, Early Childhood Development, and HIV patient navigation. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PrimeCare Community Health, Inc. provided $1,674,279 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PrimeCare Community Health, Inc. anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PrimeCare Community Health, Inc. anticipates an increase of about $25,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, and third-party administrators. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. At PrimeCare Community Health, Inc., we anticipate the need for an additional 2.0 FTEs to manage the administrative and operational burden associated with a rebate model. Currently, only 1.0 FTE is dedicated to 340B program oversight. Given the highly specialized nature of 340B expertise and the limited availability of qualified subject matter experts, this presents a significant concern for our health centers capacity to implement and sustain such a model effectively. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At PrimeCare Community Health, Inc. we estimate annual costs exceeding $876,793, including our upfront costs for purchasing pilot drugs, an additional 2.0 FTE in staff, external support vendors, and potential losses on rebate denials. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. More than 12 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PrimeCare Community Health, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 83 pharmacy locations to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations and chains to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners (i.e., Walgreens) will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Chicagoland with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. PrimeCare Community Health, Inc. is committed to ensuring medications remain affordable and accessible for all patients. We extend 340B pricing to all eligible health center patients, regardless of insurance status, and actively promote this benefit to individuals who are uninsured, underinsured, or experiencing financial barriers to accessing their prescriptions. We do not restrict access to 340B pricing based on payer type or other criteria beyond patient eligibility, as our goal is to remove cost as a barrier to care. As PrimeCare Community Health, Inc. does not operate an entity-owned pharmacy, we rely on our contract pharmacy partners to dispense medications at 340B prices with no markup. However, manufacturer imposed contract pharmacy restrictions beginning in July 2020 have made it increasingly challenging to consistently provide these discounts. Despite these limitations, our clinical and care teams remain deeply committed to working with patients to secure medications at the lowest possible cost, often at the 340B price, while also prioritizing convenience and access at pharmacy locations that best meet patients needs. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $611,224 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $71,730 to purchase these same drugs at the 340B ceiling price. This represents a 752% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PrimeCare Community Health, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as access and enrollment staff, case managers, referral coordinators, early childhood development staff, HIV patient navigators, and more. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Health Consultants, directly increasing wait times for mental health appointments. We will also be forced to eliminate critical roles that benefit our health center patients. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,095 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PrimeCare Community Health, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PrimeCare Community Health, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $93,283.42. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PrimeCare Community Health, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $50,935. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients rely on PrimeCare Community Health, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. Financial Impact of Rebate Denials and Delays PrimeCare Community Health, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $91,684. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog. This forces CHCs and pharmacies to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. The 340B Rebate Models Incompatibility with Deduplication Efforts Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data. This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PrimeCare Community Health, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PrimeCare Community Health, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PrimeCare Community Health, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kenzie Keisler, 340B Administrator, at Kenzie.Keisler@primecarechi.org. Sincerely, Lynn Hopkins PrimeCare Community Health, Inc.
HRSA-2026-0001-1687Partnership for Innovation and Empowerment (PIE)2026-04-17T04:00Z3,916 chars
See attached file(s) Submitted by: Brady J. Buckner, President Partnership for Innovation and Empowerment April 14, 2026 TO: Health Resources and Services Administration (HRSA) RE: Request for Information: 340B Program Rebate Model The Partnership for Innovation and Empowerment supports the 340B Rebate Model Pilot. We see it as a necessary first step to reform a program that's been hijacked, one that's supposed to serve vulnerable communities but instead has become a profit machine for big hospitals in wealthy neighborhoods. The 340B Program Has Become Divorced from Its Intended Mission Created in 1992, the 340B program was supposed to help hospitals and clinics serving poor and underserved patients buy medicines at a lower cost. Instead, large hospital systems have exploited the program. They use 340B discounts to boost profits, not patient care, and they've consistently expanded into wealthier neighborhoods while defunding services to communities that actually need them. (source) Why a Rebate Model Actually Works The current system, where hospitals get 340B discounts up front and then can do whatever they want with them, has created a black box. No one can see the money flowing through. This has contributed to the explosive growth in the program. Specifically, both Medicaid and 340B are paying for the same drugs, and there's no way to catch it. In 2019, hospitals claimed an estimated $1.5 billion in duplicate 340B/Medicaid discounts. (source) Now we're adding the Inflation Reduction Act on top of that, creating another $4 billion risk of double-dipping that Congress explicitly made illegal. A rebate model fixes this. It creates a paper trail. Real-time transparency. Hospitals provide the data to show whether they served a patient as part of the 340B program. That's the core issue: the program needs more transparency and accountability. One Critical Requirement: Direct Reporting to Federal Regulators We support the rebate model with no special treatment or carve-outs for certain providers. Direct federal reporting ensures: Real-time identification of duplicate discounts in 340B Better visibility into whether 340B medicine was prescribed to the intended hospital or clinic patient. Improve ways to ensure hospitals and providers provide the claims data that are needed to prevent MFP/340B double dipping Why This Matters for Communities That Are Already Struggling This isn't abstract policy. The 340B program directly shapes which communities get healthcare investment and which ones get abandoned. Right now, 340B expansion has favored wealthy neighborhoods. Meanwhile, hospitals that serve majority-Black and Latino communities, majority- low-income areas, places like Richmond Community Hospital in Richmond, Virginia (source), have had their services reduced as corporate parents divert 340B profits elsewhere. A transparent, regulated rebate model won't fix everything wrong with healthcare inequity. But it's a necessary step. It removes the profit incentive to abandon poor communities. It creates accountability. And it starts to align the 340B program with its original purpose: serving people who actually need help. Bottom Line The Partnership for Innovation and Empowerment supports the 340B Rebate Model Pilot Program, with one non-negotiable requirement: no carveouts of the program. This reform won't solve every problem with 340B. The program needs deeper change. But a transparent rebate model with direct federal oversight is the essential first step. It's how we start taking this program back from the hospitals that are gaming it and put it back to work for the people it was supposed to serve. We welcome the opportunity to provide additional testimony as HRSA moves forward. Respectfully submitted, Brady J. Buckner President Partnership for Innovation and Empowerment bbuckner@pieus.org
HRSA-2026-0001-1688IQVIA, Inc.2026-04-17T04:00Z13,702 chars
See attached file. 25 Thomson Place Boston MA 02210 iqvia.com April 17, 2026 Mr. Thomas J. Engels Administrator, Health Resources and Services Administration (HRSA) Admiral Krista M. Pedley Director, Office of Special Health Initiatives, HRSA Chantell Britton Director, Office of Pharmacy Affairs (OPA), Office of Special Health Initiatives, HRSA Department of Health and Human Services 5600 Fishers Lane, Mail Stop 08W05A Rockville, MD 20857 Submitted electronically via https://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program, HRSA-2026-03042 Dear Administrator Engels, Admiral Pedley, and Ms. Britton: IQVIA appreciates the opportunity to comment on the Request for Information (RFI) for the 340B Rebate Model Pilot Program. IQVIA is a global provider of advanced analytics, technology solutions, and clinical research services for the life sciences industry, and supports stakeholders across the drug supply chain including patients, providers, pharmacies, wholesalers, manufacturers, and state and federal agencies. Over the last five years, IQVIA has published more than 20 data-driven studies of the 340B program, spanning topics such as 340B growth drivers,1 whether 340B discounts are shared with patients at contract pharmacies,2 the role of contract pharmacies regarding patient access,3 the cost of the 340B 1 Zeng S, Sarraille W, and Martin R. What is Driving 340B Growth: Utilization or Price? Health Affairs Scholar. 2025. https://doi.org/10.1093/haschl/qxaf104 2 IQVIA. Do patients receive 340B drug discounts at the contract pharmacy counter? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/do-patients-receive-340b-drug-discounts-at-the- contract-pharmacy-counter 3 IQVIA. Do 340B contract pharmacies really "increase access" for 340B patients? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/do-340b-contract-pharmacies-really-increase- access-for-340b-patients program to employers4 and states,5 the predicted impact of 340B eligibility expansion on the size of the program,6 and estimates of 340B middlemen fees.7 Most recently, IQVIA published three data-driven studies investigating the use of rebate models in the 340B program and for effectuation of Maximum Fair Price (MFP), and their impact on cash flow.8910 To our knowledge, these are the only such studies that have been published. Our findings are responsive to HRSA's questions regarding payment timing, cash-flow impact, patient access and affordability, and the conditions under which a rebate model could be operationalized with minimal burden to covered entities. We hope they will inform policy decision-making and the effectuation of 340B discounts using rebates. A Common Misunderstanding about 340B Rebates Multiple parties have asserted that under a 340B rebate model, the provider orders drug inventory, pays for it, and at some later time a rebate is received, generating negative cash flow and, therefore, interest costs. This depiction is inaccurate because it assumes that the inventory order and the payment to the wholesaler are essentially concurrent. In practice, wholesaler payment terms, not the order date, determine cash flow. Depending on these terms, receipt of the rebate may precede, coincide with, or lag behind payment for the drug. For example, under a 30-day pay, a rebate paid by the manufacturer within 10 days would be received before the covered entity remits payment for the drug. Impact of a Rebate Model on 340B Cash Flow Opposing narratives have arisen about the impact of 340B rebates. Some stakeholders assert rebates will be a significant financial burden for 340B providers because they will require hospitals to float large sums to drug companies,1112 while others contend they will not represent a significant cost. The aim of our studies was to quantify the financing (interest) costs to hospitals and federal grantees of 340B rebates versus existing 340B drug inventory and replenishment models. We used a combination of public documents, IQVIA data, and interviews with 340B stakeholders to derive assumptions for our cash flow models. We studied seven drug inventory and rebate models at entity-owned pharmacies and 4 IQVIA. The cost of the 340B program part 1: self-insured employers. 2024. https://www.iqvia.com/locations/united-states/library/white-papers/the-cost-of-the-340b-program-part-1-self- insured-employers 5 IQVIA. The cost of the 340B program to states. 2025. https://www.iqvia.com/locations/united-states/library/white-papers/the-cost-of-the-340b-program-to-states 6 IQVIA. Double trouble: how expanding eligibility could double the size of the 340B program. 2023. https://www.iqvia.com/locations/united-states/library/white-papers/double-trouble-how-expanding-eligibility-could- double-the-size-of-the-340b-program 7 Sarraille W, Zeng S, and Martin R. A look at middlemen fees in the 340B Drug Discount Program. Law360. 2025. https://www.law360.com/articles/2416033/a-look-at-middlemen-fees-in-340b-drug-discount-program 8 IQVIA. How will a rebate model impact cash flow in the 340B Drug Pricing Program? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/how-will-a-rebate-model-impact-cash-flow-in- the-340b-drug-pricing-program 9 IQVIA. How will a rebate model impact cash flow for price negotiated drugs in Medicare Part D? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/how-will-a-rebate-model-impact-cash-flow 10 IQVIA. Do 340B rebates create a significant financial burden for 340B providers? 2026 11 American Hospital Association et al. Amicus brief, Novartis v. Kennedy, D. C. Cir. August 5, 2025. https://www.aamc.org/media/85386/download 12 340B Health. Manufacturer 340B rebate models threaten safety-net and rural hospitals and would harm patients. 2025. https://www.340bhealth.org/files/340B_Health_MANUFACTURER_340B_REBATE_MODELS_Report.pdf contract pharmacies, including physical inventory, physical (virtual) replenishment, credit-based replenishment, and the 340B rebate model and its presumptive credit variant. Financing costs were summarized as a percentage of the Wholesale Acquisition Cost (WAC) of the drug. We also estimated interest costs using the 10 drugs selected for Part D price negotiation in 2026, which were the basis for the 340B rebate pilot announced in 2025. Findings were tested using sensitivity analyses for interest rates, 340B discounts, WAC, and rebate payment timelines. To support these studies, IQVIA used multiple proprietary data assets including (1) its DDD subnational sales database, which is a national sample of wholesaler sell-in to retail and mail pharmacies, hospitals, and clinics, (2) its Longitudinal Access and Adjudication Dataset (LAAD) which is a national all-payer sample of pharmacy and medical claims, and (3) its 340B eligibility scores, which are a claims-level interpretation of the 340B patient definition based on LAAD claims. We applied representative values for model parameters such as payment terms, payer reimbursement timing, and inventory turnover. Because payment terms by which hospitals and clinics agree to purchase drugs from wholesalers are not publicly available, we collected data using stakeholder interviews and a small number of published reports. We applied a 30-day pay in our initial study,13 which we shortened to 10.5 days in a follow-up study,14 supplemented with sensitivity analyses to explore terms as short as a 0- day pay. The results were directionally the same. Findings and Conclusions Financing costs for all 340B drug inventory and rebate models are relatively smallless than one percent of WAC. At both entity-owned pharmacies and contract pharmacies, interest costs for 340B rebates are similar to those of existing drug inventory models. Our findings show that, from a cash-flow perspective, a rebate model is consistent with HRSA's objective of minimizing financial disruption to covered entities, and that 340B rebate models involve little to no additional cost than existing drug inventory models. After the court's decision to enjoin the 340B rebate model pilot, at least 5 of the 10 drugs subject to MFP in 2026 reduced their list prices. Because the 340B rebate amount is proportional to the gap between the list price and the 340B ceiling price, lower list prices shrink the 340B rebate, reducing the magnitude of cash flow and associated interest costs. The third of our cash flow studies15 modeled these price decreases and enhanced our cash flow models by breaking out 340B providers into three groupsDSH hospitals, non-DSH hospitals, and federal granteesbased on differences in short-term borrowing rates. Estimated per-entity interest costs ranged from $590 for federal grantees to $23,649 for DSH hospitals, and are less than 1% of estimated combined purchases for these drugs at list prices. Our study does not evaluate the potential operational costs, if any, associated with implementing the 340B rebate model, such as hiring new FTEs or investing in new technologies. However, hospitals and clinics participating in the 340B program must maintain access to patient eligibility data to comply with the 340B patient definition. Thus, these costs exist, to a substantial degree, regardless of whether a rebate model is used or not. 13 IQVIA. How will a rebate model impact cash flow in the 340B Drug Pricing Program? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/how-will-a-rebate-model-impact-cash-flow-in- the-340b-drug-pricing-program 14 IQVIA. Do 340B rebates create a significant financial burden for 340B providers? 2026 15 Ibid. The Impact of a Rebate Model on Cash Flow for Medicare Part D To establish a baseline for the financial impact of rebates on pharmacy cash flow, we published a separate study to quantify interest costs for the MFP refund model.16 We found that interest costs for the 340B rebate model are less than half those of the MFP refund model, which is mainly due to fewer process steps and the shorter timelines mandated by HRSA for 340B rebate payments. In light of this finding, the different treatment of these two rebate-based approaches raises questions about the criteria being applied across programs. Patient Discount Sharing in the 340B Program The question of whether patients of 340B hospitals and clinics receive financial assistance when filling prescriptions is central to 340B policy debates and litigation. Using a national sample of pharmacy claims, drugs, and patients, we examined 340B patient discount sharing at contract pharmacies.17 We found that 340B discount cardsthe dominant mechanism used to share 340B discounts with patientswere used on less than 5% of branded 340B prescriptions filled at contract pharmacies in the period Q3, 2020 through Q2, 2024. This rate of patient discount sharing compares unfavorably to the reported combined rate of the uninsured and underinsured in the United States, which is around 32%. The Role of Contract Pharmacies Regarding Patient Access Some stakeholders in the 340B program assert that contract pharmacies increase patient access to medications. Using a national sample of drug sales data, we studied the role of contract pharmacies in drug availability.18 We found that less than 1% of contract pharmacies are "closed", meaning they serve only 340B patients. That is, for the vast majority of cases, drug availability at contract pharmacies does not depend on patient 340B eligibility. In summary, we could find no evidence in our study that 340B contract pharmacies increase drug availability in a meaningful way. Miscellaneous Comments In its recent RFI, HRSA has invited covered entities to estimate additional costs associated with the use of a 340B rebate model. However, the RFI does not specify whether covered entities are expected to certify their responses, rely on General Ledger data, or to otherwise apply methodological guardrails that could help ensure the resulting information can be interpreted in a consistent and reliable manner. The RFI also solicits covered entities for data on payment terms and discounts, if any, that are offered by drug wholesalers for early payment. As we noted above, such information about payment terms is not publicly available, and we believe it is very important in order to evaluate whether or not stated concerns about 340B rebates being a severe financial burden are valid. We thank you for the opportunity to share with you findings of our studies that quantify the potential impact of a 340B rebate model on cash flow for 340B hospitals and clinics, and on patient access and 16 IQVIA. How will a rebate model impact cash flow for price negotiated drugs in Medicare Part D? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/how-will-a-rebate-model-impact-cash-flow 17 IQVIA. Do patients receive 340B drug discounts at the contract pharmacy counter? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/do-patients-receive-340b-drug-discounts-at-the- contract-pharmacy-counter 18 IQVIA. Do 340B contract pharmacies really "increase access" for 340B patients? 2025. https://www.iqvia.com/locations/united-states/library/white-papers/do-340b-contract-pharmacies-really-increase- access-for-340b-patients affordability. IQVIA would be pleased to provide additional technical details about our assumptions or models should that be helpful to HRSA's evaluation. Sincerely, Rory Martin, PhD Senior Principal IQVIA, Inc.
HRSA-2026-0001-1689Clinicas De Salud Del Pueblo, Inc.2026-04-17T04:00Z54,833 chars
On behalf of Clinicas De Salud Del Pueblo, Inc., a Federally Qualified Health Center (FQHC), we strongly oppose the proposed 340B Rebate Model Pilot Program. As outlined in our attached comments, the model would create significant financial and administrative burdens, disrupt patient access to essential medications, and undermine the stability of safety-net providers. We respectfully urge HRSA to exempt FQHCs from this model. innercare Making life healthy from the inside out April 16, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rehate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Clinicas De Salud Del Pueblo, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Clinicas De Salud Del Pueblo, Inc. anticipates a loss of $625,000 from entity-owned pharmacy operations and $1,600,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Clinicas De Salud Del Pueblo, Inc. is a Federally Qualified Health Center (FQHC) serving over 62,000 patients annually across 14 clinic sites in California. We provide services to some of the most medically underserved communities in CA based in the Imperial Valley and Riverside County. Our patients are predominantly uninsured, underinsured, and low-income with significant barriers to accessing affordable medications and consistent care. In many of these communities, limited pharmacy access and high rates of chronic disease make the availability of low-cost medications essential. The 340B program is not simply a pharmacy benefitit is a critical funding mechanism that sustains our broader care delivery model. The savings it generates support not only affordable medications, but also essential medical and dental services that would otherwise be unsustainable. In this way, 340B is a cornerstone of our operations and our ability to provide comprehensive care to the patients we serve. To meet this need, we operate a comprehensive 340B program that includes five entity-owned pharmacies and a contract pharmacy network managed through three TPAs, extending access to medications across geographically dispersed and resource-limited areas. innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (70) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out The 340B program is a critical component of our care model, allowing us to provide medications at reduced or no cost and reinvest savings into services that directly address heatth disparities. Any disruption to this program would have immediate and disproportionate consequences for the patients and communities we serve, many of whom rely on us as their primary source of care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to miilions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Ciinicas De Salud Del Pueblo, Inc. in particular, this means it will impact: Across our five entity-owned pharmacies (including 2 that just opened) alone, we process approximately i 66,000 340B-eligible prescriptions annually, representing a substantial portion of medication access for the patients we serve. When combined with our contract pharmacy network, this volume increases significantly, supporting medication access for over 62,000 patients annually. Any disruption to this model will directly reduce our ability to provide essential care. Our 340B program already requires significant administrative oversight, including compliance monitoring, contract pharmacy reconciliation, and coordination across three separate TPAs. Under a rebate model, these responsibilities would expand substantially, requiring additional staffing, increased time spent on claim validation and dispute resolution, and the use of multiple vendor platforms with differing requirements. This would result in a meaningful increase in administrative burden and cost, diverting resources away from patient care. The savings generated through our 340B program are reinvested directly into patient care and access services. These funds support our ability to offer medications on a sliding fee scale, ensuring affordability for low-income patients, while also sustaining essential services such as behavioral health programs and care coordination for patients with complex medical needs. In addition, 340B resources help fund core medical and dental services that would otherwise be financially unsustainable. Any reduction in these resources would force difficult decisions regarding service availability, staffing, and patient support programs, ultimately limiting access to care for the communities we serve. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stabilit:s, of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone 1760) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxigao and Jardiance8, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictahle increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDFNP will include some behavioral health drugs. Vraylar 8 is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo8, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedoo achieved treatment success, resulting in improved quality of life.' Impairing access to these drugs could result in exacerbation of the mental health crisis. Richard P, Ku L, Dor A. Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar:35(l):50-9. doi: 10.1097/3AC.0b013e31823d27b6. PMID: 22156955. Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.l54 l5. Epub 2021 Jul 23. PM1D: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. haps:" \\ \ ahajournais.orvdoi pLIC I 0.1161/e irculationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-O7-O07, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality. Substance Abuse and Mental Health Services Administration. httos:// wsamhsa. go% Idataidata- e-col lect, nsduh-national-surke% drug-use-and-health nut 'mai-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC89O6841. innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (MO) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,' affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medicaI services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current inanufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensinglcapture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Clinicas De Salud Del Pueblo, Inc. provided $525,946 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 6 2025 UDA Data, HRSA (hrsa.gov) innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (70) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out Staffing Impact: Clinicas De Salud Del Pueblo, Inc. anticipates needing approximately 1.5 to 2.5 additional full-time equivalents (FTEs) to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Clinicas De Salud Del Pueblo, Inc. anticipates an increase of $150,000 - $400,000 annually in additional vendor costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to I full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Based on our organizational structure and operational complexity, Clinicas De Salud Del Pueblo, Inc. anticipates needing approximately 1.5 to 2.5 full-time equivalents (FTEs) to support the administrative demands of a 340B rebate model, including claim submission, reconciliation, dispute resolution, and compliance oversight across multiple systems and vendors. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Clinicas De Salud Del Pueblo, Inc., which serves over 62,000 patients annually, anticipates annual administrative and operational costs exceeding $1.5 million, including increased labor costs, IT infrastructure investments, canying costs associated with purchasing drugs at WAC, and potential Iosses due to delayed or denied rebates. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 15 to 25 hours per week per pharmacy location will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Clinicas De Salud Del Pueblo, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Partv Administration Chanaes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Internal NACHC assessment (99 responses). Ibid. innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (MO) 344-9951 Fax (760) 344-5840 www.innereare.org innercare Making life healthy from the inside out Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 62,000 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $1.8 million to $2.3 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our in-house pharmacy operations rely on an integrated Pharmacy Management System (PMS) and Electronic Health Record (EHR) to support 340B eligibility determination, dispensing workflows, and compliance monitoring. Under a rebate model, these systems would require significant reconfiguration to support new data extraction, rebate tracking, and reconciliation processes. Unlike current workflows, which rely on upfront 340B pricing, the rebate model would require retrospective validation of pricing and eligibility, increasing reliance on manual intervention and system workarounds. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Approximately $100,000 will be required. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 to 20 hours a week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 47 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 47 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than rnanage the administrative headache. In our region, this would leave patients in Imperial Valley and Coachella Valley with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (70) 344-9951 Fax (70) 344-5840 www.innercare.org innercare Making life healthy from the inside out already,' and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2i121.10 Clinic Administered Drugs: The Burden ofNew Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.' Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies Pharmac. and Clinical Pharmacology JAMA Net\ ork Open l JAMA Network httn!;:. 11. h ca h a liai rs mg/do i/abs/10.1377/11 lthaff.2024.00192?journalCode=hlthaff " Internal NACHC survey data innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.' 2 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuais.33 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Clinicas De Salud Del Pueblo, Inc. uses 340B savings to provide medications at reduced cost through a sliding fee scale, with many patients paying little to nothing at the point of sale. These savings also support care coordination and behavioral health services that are critical to managing chronic conditions. Without upfront 340B pricing, this model is not sustainable and will create immediate barriers to care. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 3{l days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physicaI inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a IO-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bohc.hrsa.gov/complianceieompliance- manual/chapter94 footnote 0 14https://enlivenhealth.coiblogivear-end-business-health-check-ke metrics-everv-pharmacv-ov.ner-should-review innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www. n nerca re. o rg innercare Making life healthy from the inside out We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high 1T/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CFICs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Dru2 Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACFIC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 34+@B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $12 million to $15 million annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $3.5 million to $4 million annually to purchase these same drugs at the 340B ceiling price. This represents a 250% to 300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the I 5 https:;340bpricing.hrsa.gov/ 16 https:.UuWW.crosgov/lileslzivrselccted-dru st-nrtotiatecj-rzriczs-aiso-kn n-makirstum-fair-priceG-statutezip.zap innerca re 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innercare.org innercare Making life healthy from the inside out upfront cost of purchasing drugs and operationalizing the rebate, Clinicas De Salud Del Pueb!o, lnc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as remote clinic sites where we are the only provider, behavioral health services, care coordination that supports patients with chronic conditions such as diabetes, hypertension, and mental health disorders. Operating Hours: We anticipate needing to reduce our clinic hours 15 to 20 hours per week, specifically impacting our evening and limited weekend hours, which are critical for working-class and agricultural patients who cannot access care during standard business hours. In addition for our most rural sites where we are the only provider we may need to limit days we are open or close the site entirely. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full- time care coordinator or behavioral health provider, directly increasing wait times for mental health appointments. And if we have to close our remote clinics or limit days, we will lose staff where they are needed most. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee sca!e will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 8,261 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for rnedications upfront at WAC prices would require dipping into !imited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Clinicas De Salud De! Pueblo, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Clinicas De Salud De1 Pueblo, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $400,000 to $700,000 innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innerca re .o rg innercare Making life healthy from the inside out annually. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Clinicas De Salud Del Pueblo, Inc. estimates that purchasing the 10 seiected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $700,000 to $900,000 per month. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $150,000 to $250,000 annuallyfunds that are currently dedicated to servicing remote sites with no other providers, behavioral health services, care coordination programs, medical and dental services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Clinicas De Salud Del Pueblo, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Clinicas De Salud Del Pueblo, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $600,000 to $900,000 annually. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable "Application Process for the 3408 Rebate Model Pilot Progrant 2025-14619 (90 FR 36163) https:i/wc% federairegister.govidocuments, 2025/08,0 I /2025- I 4619,344-program-not ice-annl ication-process-for-the-340b- rebate-model-pi lot-program innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innerca re .o rg innercare Making life healthy from the inside out denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges lf HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. lf HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated Iate payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innerca re.org innercare Making life healthy from the inside out administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models ofcompliance. vI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the stafftime needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day tim efra me. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, California's Department of Health Care Services (DHCS) issued guidance for California's Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 34-4-9951 Fax (760) 344-5840 www.innerca re .org innercare Making life healthy from the inside out Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut California's multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationail within DHCS's six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like California's will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Clinicas De Salud Del Pueblo, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Clinicas De Salud Del Pueblo, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net prov id ers. Clinicas De Salud Del Pueblo, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dan Kang at Dank@innercare.org. Sincerely, vonne Bell, President/CEO innercare 852 East Danenberg Drive, El Centro, CA 92243 Phone (760) 344-9951 Fax (760) 344-5840 www.innercare.org
HRSA-2026-0001-1690(no commenter metadata)2026-04-17T04:00Z33,214 chars
See attached file(s) A RESPONSE TO: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 4/17/26 On behalf of Unity Medical Center of Grafton, North Dakota, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The RFI poses 30 questions, to which there remains a great deal of mystery and unanswered details. Unity Medical Center has done its best to provide accurate answers with the limited time and information available. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is a clear and resounding no. Introduction & Organizational Impact Unity Medical Center is a 14-bed Critical Access Hospital (CAH) serving as the primary safety-net provider for Walsh Countys 10,000 residents. Our 340B program currently yields nearly $1.5 million in annual net savings, which directly subsidizes our rural health clinics and essential emergency services. Any rebate mechanism will impose enormous costs and burdens on Unity Medical Center that far outweigh any benefits. Though HRSAs own calculations of costs are substantial, our own experience and estimations place the true cost much, much higher. The proposed 340B Rebate Model represents a Financial Inversion of the programs statutory intent. For Unity Medical Center, this model does not "operationalize" 340B; it effectively terminates it by imposing administrative costs that exceed the programs total value. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing an operational model. This is simply not true. In reality, HRSA must honor the intent of the original bill, which is to address the needs of covered entities to best allow them to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Unity has relied on for years, is the best way to fulfill the purpose of the 340B program. One matter that should be clarified: stating that a trial might include 25 drugs is not an honest representation of the magnitude of the work involved in such an undertaking. A quick survey of available drug products shows that 25 drugs across different manufacturers, dosage strengths, package size, and dosage form in actuality can encompass hundreds of NDCs. As we all know, 340B program compliance is directly tied to the specific product NDC, NOT the drug name. This exponential increase in drugs and drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Unity can spend on patient care and comprehensive health care services. Staffing Concerns Any rebate program would require Unity to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We simply do not have the staff needed to comply with a Rebate Program. At small locations such as ours, each staff member necessarily wears multiple hatsvery few roles are dedicated to simply managing one job as larger organizations may. We cannot afford to maintain ever-increasing specialized staff and services to manage a program whose entire purpose is to help us maintain and expand for the good of the patient. With ongoing attacks from heightened regulations and manufacturer push backs, a highly trained role will be necessary to effectively manage the intricacies of the suggested program. Unity estimates a requirement of 1.0 to 2.0 specialized FTEs to manage daily data scrubbing, reconciliation, and the 10-day dispute window, not to mention the already rigorous standards required to maintain program compliance. Rural Salary and Recruitment Premium: 340B-trained professionals command total compensation packages of $160,000 to $250,000. For Unity, this single expense constitutes nearly 15% of the program's benefit. Keep in mind, also, that these people are not in great supply, especially in rural regions such as ours. Recruiting experienced talent for this position would be difficult to find and difficult to maintain, and the search is likely to exceed 1 years time. Systems and Infrastructure Unity Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Managing a rebate-driven model requires an unprecedented level of data integrity. Monitoring the 34 distinct data elements required per dispense is not a "2-hour per week" task, even including the use of paid third-party administrators that specialize in 340B program management. The current Administrative Dispute Resolution (ADR) process, while theoretically available for all overcharge claims, is functionally inaccessible for a facility of Unity Medical Centers size due to the following barriers: Prohibitive Preparation Costs: Filing a "complete" claim requires a forensic level of data reconciliation. For each disputed NDC, Unity must provide evidence of the 340B ceiling price, the actual price paid (WAC), and patient eligibility proof. Preparing a single ADR petition is estimated to require 4060 hours of expert staff time. At our internal labor rates, the cost to prepare a claim often exceeds the value of the rebate itself. The "Good Faith" Prerequisite: HRSA mandates a documented "Good Faith Effort" to resolve the issue directly with the manufacturer before filing. Manufacturers have used this phase to cycle through multiple 10-day "Request for Information" windows, further exhausting CAH administrative resources before the ADR even begins. Indefinite Recovery Timelines: While the 2024 Rule sets a one-year target for decisions, it allows for extensions for "circumstances outside of the panel's control." For Unity, waiting 1824 months to recover a rebate while already floating $2.5 million in capital is not a viable financial strategyit is a liquidity crisis. The Inequity of Scale: Manufacturers possess dedicated legal and data teams to defend ADR claims across thousands of hospitals. Unity Medical Center must hire specialized consultants or divert clinical leadership to manage a single claim. This disparity allows manufacturers to utilize "Technical Denials" as a successful attrition strategy, knowing that a CAH cannot afford the time and expertise required to successfully use the ADR process. During the prior iteration of the Rebate Program Pilot, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply incorrect. With last years deadline looming, we spent months working with our electronic health record, IT provider, and our 340B solutions provider to access the additional information requested. Even now, our IT is struggling to find a workaround for one single data field. Unfortunately, when it comes to claim approval and denial, 95% of required information doesnt cut it. While most of the information is already being provided, the additional fields have cost hours of work time, and is still not operational, even though we use the most common, most widely praised EHR system on the market. Documentation of Regulatory Fatigue & Attrition Unity Medical Center serves as a primary example of how unilateral manufacturer rulemaking causes irreparable financial harm to Critical Access Hospitals, as it has already spent significant capital over the last five years to adapt to manufacturer-imposed changes. 2020-2022: Implementing data feeds for the 340B ESP portal to maintain contract pharmacy access. The Artificial Restriction: In calendar year 2022, manufacturers began implementing restrictive policies allowing only one contract pharmacy per entity for facilities without an in-house pharmacy. o Forced Operational Shutdown: At the time, Unity utilized the only two pharmacies in Grafton to ensure patient access. Due to the manufacturer restriction, Unity was forced to terminate one of these established agreements because manufacturers refused to honor 340B ceiling prices at the second location. o Quantifiable Revenue Loss: This arbitrary restriction resulted in a $500,000 annual loss in net 340B savings for Unity Medical Center. This persisted for three years (Sept 2022 Sept 2025), totaling $1.5 million in lost safety-net fundingcapital that was effectively "clawed back" by manufacturers despite the hospitals statutory eligibility. o State-Level Correction (North Dakota HB 1473): This discriminatory practice only ceased upon the enactment of North Dakota HB 1473 (effective August 1, 2025), which correctly identified these manufacturer restrictions as a violation of state law. 2024: Restructuring policies to meet the Final ADR Rule "Good Faith Effort" requirements. 2025-2026: Navigating state-level litigation (e.g., North Dakota SB 2140) as manufacturers attempt to circumvent state protections. The In-House Expansion: On February 1, 2026, Eli Lilly and Novo Nordisk (effective April 1) expanded their data demands to include all in-house pharmacy dispenses and physician-administered (medical) claims. o The "Compliance or Cancellation" Ultimatum: These manufacturers have explicitly stated that failure to submit this voluminous claims-level data will result in the total loss of 340B pricing. This transforms a statutory right into a "conditional reward" controlled by the manufacturer's IT preferences. o The HRSA Silence: Despite urgent pleas from the American Hospital Association (AHA) in early 2026 for enforcement action and civil monetary penalties, HRSA has remained silent. o The North Dakota Exception: While Unity Medical Center is currently "exempted" from these specific mandates due to North Dakota's strong state-level protections (ND HB 1473), we view this as a temporary reprieve. Without federal intervention, the "Regulatory Fatigue" caused by these shifting demands will eventually overwhelm even the most protected CAH. The one contract pharmacy era proves that manufacturers will use any available mechanismwhether a distribution condition or a rebate modelto restrict access and retain discounts. If a simple one-pharmacy rule cost Unity $1.5 million, the proposed rebate model (with its $2.5 million float and high attrition rate) will result in a total program collapse. These constant shifts are a clear Attrition Strategy designed to exhaust the resources of rural providers. Each "possible" change requires hundreds of hours in consulting and IT reconfiguration, creating a "Ready State Tax" that smaller hospitals cannot long afford. Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Unity to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies are able to adjudicate and pay within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. HRSA has previously underestimated the impact of "floating" drug costs. A transition to WAC-based purchasing requires Unity to front of $2.5 million annually in drug acquisition costs. A CAH with restricted liquidity and treasury depth simply is unable to provide interest-free financing to multi-billion-dollar manufacturers while awaiting rebate reconciliation. This $2.5M represents capital diverted away from frontline rural patient care. All these different costs and burdens add up. Considering the $2.5M float, the $250k labor cost, and the $125k in projected technical denials, the 340B program moves from a $1.5M benefit to a $1.3M annual liability. Unfortunately, that means that Unity Medical Center will no longer be able to effectively use and distribute our 340B savings and services as we have been. In fact, it is highly likely that we will be forced to withdraw from the 340B program entirely. As a result, our patients and community will suffer. Duplicate Discounts Drug companies already have options available to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Unity, HRSA should continue to rely on those other options. Any other decision would place the interests of drug companies over those of covered entities, their patients, and the communities they serve, a clear perversion of the Programs intent. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Unity Medical Center reasonably relied on this history when designing its internal operations, staffing, contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In Conclusion For all of these reasons, Unity Medical Center of Grafton, North Dakota strongly, and respectfully, submits that the costs of any Rebate Program will outweigh any expected benefits. It serves only to transform a vital safety-net program into a profit-retention tool for manufacturers. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to abandon the rebate concept altogether and to adopt a third- party clearinghouse to advance deduplication, program integrity, and any other potential benefits. At a minimum, it's prudent to provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Unity and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem, and surely lead to further delays and expenses for all involved. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Jaime Osmanski, PharmD, BCPS Director of Pharmacy Unity Medical Center, Grafton, ND 701-379-3191 A RESPONSE TO: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 4/17/26 On behalf of Unity Medical Center of Grafton, North Dakota, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. The RFI poses 30 questions, to which there remains a great deal of mystery and unanswered details. Unity Medical Center has done its best to provide accurate answers with the limited time and information available. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is a clear and resounding no. Introduction & Organizational Impact Unity Medical Center is a 14-bed Critical Access Hospital (CAH) serving as the primary safety-net provider for Walsh Countys 10,000 residents. Our 340B program currently yields nearly $1.5 million in annual net savings, which directly subsidizes our rural health clinics and essential emergency services. Any rebate mechanism will impose enormous costs and burdens on Unity Medical Center that far outweigh any benefits. Though HRSAs own calculations of costs are substantial, our own experience and estimations place the true cost much, much higher. The proposed 340B Rebate Model represents a Financial Inversion of the programs statutory intent. For Unity Medical Center, this model does not "operationalize" 340B; it effectively terminates it by imposing administrative costs that exceed the programs total value. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing an operational model. This is simply not true. In reality, HRSA must honor the intent of the original bill, which is to address the needs of covered entities to best allow them to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Unity has relied on for years, is the best way to fulfill the purpose of the 340B program. One matter that should be clarified: stating that a trial might include 25 drugs is not an honest representation of the magnitude of the work involved in such an undertaking. A quick survey of available drug products shows that 25 drugs across different manufacturers, dosage strengths, package size, and dosage form in actuality can encompass hundreds of NDCs. As we all know, 340B program compliance is directly tied to the specific product NDC, NOT the drug name. This exponential increase in drugs and drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Unity can spend on patient care and comprehensive health care services. Staffing Concerns Any rebate program would require Unity to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We simply do not have the staff needed to comply with a Rebate Program. At small locations such as ours, each staff member necessarily wears multiple hatsvery few roles are dedicated to simply managing one job as larger organizations may. We cannot afford to maintain ever-increasing specialized staff and services to manage a program whose entire purpose is to help us maintain and expand for the good of the patient. With ongoing attacks from heightened regulations and manufacturer push backs, a highly trained role will be necessary to effectively manage the intricacies of the suggested program. Unity estimates a requirement of 1.0 to 2.0 specialized FTEs to manage daily data scrubbing, reconciliation, and the 10-day dispute window, not to mention the already rigorous standards required to maintain program compliance. Rural Salary and Recruitment Premium: 340B-trained professionals command total compensation packages of $160,000 to $250,000. For Unity, this single expense constitutes nearly 15% of the program's benefit. Keep in mind, also, that these people are not in great supply, especially in rural regions such as ours. Recruiting experienced talent for this position would be difficult to find and difficult to maintain, and the search is likely to exceed 1 years time. Systems and Infrastructure Unity Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Managing a rebate-driven model requires an unprecedented level of data integrity. Monitoring the 34 distinct data elements required per dispense is not a "2-hour per week" task, even including the use of paid third-party administrators that specialize in 340B program management. The current Administrative Dispute Resolution (ADR) process, while theoretically available for all overcharge claims, is functionally inaccessible for a facility of Unity Medical Centers size due to the following barriers: Prohibitive Preparation Costs: Filing a "complete" claim requires a forensic level of data reconciliation. For each disputed NDC, Unity must provide evidence of the 340B ceiling price, the actual price paid (WAC), and patient eligibility proof. Preparing a single ADR petition is estimated to require 4060 hours of expert staff time. At our internal labor rates, the cost to prepare a claim often exceeds the value of the rebate itself. The "Good Faith" Prerequisite: HRSA mandates a documented "Good Faith Effort" to resolve the issue directly with the manufacturer before filing. Manufacturers have used this phase to cycle through multiple 10-day "Request for Information" windows, further exhausting CAH administrative resources before the ADR even begins. Indefinite Recovery Timelines: While the 2024 Rule sets a one-year target for decisions, it allows for extensions for "circumstances outside of the panel's control." For Unity, waiting 1824 months to recover a rebate while already floating $2.5 million in capital is not a viable financial strategyit is a liquidity crisis. The Inequity of Scale: Manufacturers possess dedicated legal and data teams to defend ADR claims across thousands of hospitals. Unity Medical Center must hire specialized consultants or divert clinical leadership to manage a single claim. This disparity allows manufacturers to utilize "Technical Denials" as a successful attrition strategy, knowing that a CAH cannot afford the time and expertise required to successfully use the ADR process. During the prior iteration of the Rebate Program Pilot, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply incorrect. With last years deadline looming, we spent months working with our electronic health record, IT provider, and our 340B solutions provider to access the additional information requested. Even now, our IT is struggling to find a workaround for one single data field. Unfortunately, when it comes to claim approval and denial, 95% of required information doesnt cut it. While most of the information is already being provided, the additional fields have cost hours of work time, and is still not operational, even though we use the most common, most widely praised EHR system on the market. Documentation of Regulatory Fatigue & Attrition Unity Medical Center serves as a primary example of how unilateral manufacturer rulemaking causes irreparable financial harm to Critical Access Hospitals, as it has already spent significant capital over the last five years to adapt to manufacturer-imposed changes. 2020-2022: Implementing data feeds for the 340B ESP portal to maintain contract pharmacy access. The Artificial Restriction: In calendar year 2022, manufacturers began implementing restrictive policies allowing only one contract pharmacy per entity for facilities without an in-house pharmacy. Forced Operational Shutdown: At the time, Unity utilized the only two pharmacies in Grafton to ensure patient access. Due to the manufacturer restriction, Unity was forced to terminate one of these established agreements because manufacturers refused to honor 340B ceiling prices at the second location. Quantifiable Revenue Loss: This arbitrary restriction resulted in a $500,000 annual loss in net 340B savings for Unity Medical Center. This persisted for three years (Sept 2022 Sept 2025), totaling $1.5 million in lost safety-net fundingcapital that was effectively "clawed back" by manufacturers despite the hospitals statutory eligibility. State-Level Correction (North Dakota HB 1473): This discriminatory practice only ceased upon the enactment of North Dakota HB 1473 (effective August 1, 2025), which correctly identified these manufacturer restrictions as a violation of state law. 2024: Restructuring policies to meet the Final ADR Rule "Good Faith Effort" requirements. 2025-2026: Navigating state-level litigation (e.g., North Dakota SB 2140) as manufacturers attempt to circumvent state protections. The In-House Expansion: On February 1, 2026, Eli Lilly and Novo Nordisk (effective April 1) expanded their data demands to include all in-house pharmacy dispenses and physician-administered (medical) claims. The "Compliance or Cancellation" Ultimatum: These manufacturers have explicitly stated that failure to submit this voluminous claims-level data will result in the total loss of 340B pricing. This transforms a statutory right into a "conditional reward" controlled by the manufacturer's IT preferences. The HRSA Silence: Despite urgent pleas from the American Hospital Association (AHA) in early 2026 for enforcement action and civil monetary penalties, HRSA has remained silent. The North Dakota Exception: While Unity Medical Center is currently "exempted" from these specific mandates due to North Dakota's strong state-level protections (ND HB 1473), we view this as a temporary reprieve. Without federal intervention, the "Regulatory Fatigue" caused by these shifting demands will eventually overwhelm even the most protected CAH. The one contract pharmacy era proves that manufacturers will use any available mechanismwhether a distribution condition or a rebate modelto restrict access and retain discounts. If a simple one-pharmacy rule cost Unity $1.5 million, the proposed rebate model (with its $2.5 million float and high attrition rate) will result in a total program collapse. These constant shifts are a clear Attrition Strategy designed to exhaust the resources of rural providers. Each "possible" change requires hundreds of hours in consulting and IT reconfiguration, creating a "Ready State Tax" that smaller hospitals cannot long afford. Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Unity to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies are able to adjudicate and pay within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. HRSA has previously underestimated the impact of "floating" drug costs. A transition to WAC-based purchasing requires Unity to front of $2.5 million annually in drug acquisition costs. A CAH with restricted liquidity and treasury depth simply is unable to provide interest-free financing to multi-billion-dollar manufacturers while awaiting rebate reconciliation. This $2.5M represents capital diverted away from frontline rural patient care. All these different costs and burdens add up. Considering the $2.5M float, the $250k labor cost, and the $125k in projected technical denials, the 340B program moves from a $1.5M benefit to a $1.3M annual liability. Unfortunately, that means that Unity Medical Center will no longer be able to effectively use and distribute our 340B savings and services as we have been. In fact, it is highly likely that we will be forced to withdraw from the 340B program entirely. As a result, our patients and community will suffer. Duplicate Discounts Drug companies already have options available to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Unity, HRSA should continue to rely on those other options. Any other decision would place the interests of drug companies over those of covered entities, their patients, and the communities they serve, a clear perversion of the Programs intent. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Unity Medical Center reasonably relied on this history when designing its internal operations, staffing, contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In Conclusion For all of these reasons, Unity Medical Center of Grafton, North Dakota strongly, and respectfully, submits that the costs of any Rebate Program will outweigh any expected benefits. It serves only to transform a vital safety-net program into a profit-retention tool for manufacturers. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to abandon the rebate concept altogether and to adopt a third-party clearinghouse to advance deduplication, program integrity, and any other potential benefits. At a minimum, it's prudent to provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Unity and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem, and surely lead to further delays and expenses for all involved. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Jaime Osmanski, PharmD, BCPS Director of Pharmacy Unity Medical Center, Grafton, ND 701-379-3191
HRSA-2026-0001-1691United Community Health Center, Maria Auxiliadora2026-04-17T04:00Z113,688 chars
Please find attached United Community Health Centers response to HRSAs Request for Information (HRSA-2026-03042) regarding the 340B Rebate Model Program. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Additional costs will be required to simply reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 26,000 patients, there will be an increase in expenses, including labor, IT, and other related costs. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 65 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 65 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Santa Cruz County and Pima County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology ! JAMA Network Open I JAMA Network https://www.healthaffairs.org/doi/abs/ l 0.1377/h Ithaff 2024.00 92?journalCode=hlthaff 6 logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment afier providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHCs participate in programs like 340B that let them purchase medications at lower costs. These savings help clinics reduce what patients pay for prescriptions, offer additional health services and care for patients who may not have insurance or have limited income. " HRSA FAQ 12 Such discounts are subject to potcntial legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- tnanual/ehapter9lifootnote l 0 7 CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating 13 https://enliv en health. co/blog/year-end-business-health-chec k-key-metrics-everv-pharm acy-owner-should-rev iew 8 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, United Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Operating Hours: We anticipate needing to reduce clinic hours to offset the costs associated with the rebate program, which may result in decreased access to care for our patients, many of whom are in rural areas. " https://340bpricing.hrsa.gov/ IS https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zin 9 Workforce & Staffing: The administrative burden of this pilot requires us to divert resources away from clinical staff. Each additional "Rebate Coordinator" role we must support reduces our ability to fund positions dedicated to direct patient care. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. United Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. United Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will significantly increase our upfront monthly drug spend. Every dollar we pay upfront at WAC remains effectively "frozen" in the manufacturer's reconciliation system. While awaiting rebates, we lose the liquidity needed to respond to immediate public health needs or facility emergencies. To manage the rebate model, our organization would likely need to secure a line of credit and draw on limited financial reserves. 10 "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes arnong manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model6i published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 61 https://beaconchannelmanagemenicominageskcsources (Johnson & Johnson Policy Documents) 31 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion United Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. United Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 32 United Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Liberty Bruss at Ibruss@uchcaz.org. Sincerely, on Reardon, CEO United Community Health Center 33 manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBII, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), lssue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), lssue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least ... $6 billion annually" in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that - 5% of commercial rebates paid by manufacturers are likcly duplicates with the 340B Drug Pricing Prograrn meaning a total of roughly $6 billion annually."). 26 is highly valuable to manufacturers.5 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.5i Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."S4 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."55 By conditioning access 5 Kalderos, Sightlines Issue No. 3, Double. double, toil and trouble with commercial contracts. www.Kalderos.com (Oct. 2023), issue No. 3. (rebate data is worth billions). 51 See, e.g.. Genesis Health Care. Inc. v. Becerra, 701 F. Supp. 3d 312. 330 (D.S.C. 2023) (stating that -the goal of the 340B statute ... is to make 'covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continuc to this day."). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-obm-underpayment/. 53 Pharmaceutical Rcscarch & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Hcalth Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanoti Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 27 to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to manufacturers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and manufacturers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with Iaw"). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuncration in exchange for items or services billable to federal health care programs.) 58 42 U.S.C. 256b(a)(5)(B) 28 which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Manufacturers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to manufacturers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program."59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.6 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 6 H.R. REP. 102-384, 16 29 This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a 30 there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through https://publ ic-inspectionlederalregistergov/2025-14619.pd 1'71753965918 23 lnternal NACHC survey data 16 existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing the best internal practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the medications included at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication 17 While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. 5 U.S.C. 500-596: Food & Drug Admin.. Least Burdensome Provisions: Concept and Principles (n.d.). https://www.fda.goviregulatog-information/search-fda-guidance-documents/least-burdensome-provisions-conceot-and-principles (last visited Mar. 13, 2026): H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Undcr the Physician Fee Schedule, 90 Fcd. Reg. 49,266 (2025). CY 2026 PFS, Final Rule. https://www.govinfo.gov/contentlpkg/FR-2025-11-05/pdf72025-19787.pdf 27 H.R. REP. 102-384(11) 18 A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize manufacturers to charge prices above the 340B statutory ceiling price. That statute merely states that a manufacturer must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and manufacturers are not permitted under the IRA or 340B 28 42 U.S.C. 256b(a)(1) 29 Id. 19 statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."3 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects manufacturers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity [, not HHS or a manufacturer,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.3 I Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and manufacturers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor manufacturers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Mcdicaid. Specifically, it states that the HHS may "develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. /d. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 20 entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to manufacturers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to manufacturers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives manufacturers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. 35 See 42 U.S.C 256b(a)(5)(A). 36 C.F.R. 447.518(a). 21 A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to manufacturers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the manufacturer's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the manufacturer's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped CHC's authority to prevent duplicate discounts, but it also confers on manufacturers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize manufacturers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. 37 Ctrs. for Medicare & Medicaid Servs., /PA Y 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 22 Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."39 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."49 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a manufacturer, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing manufacturers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to manufacturers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not manufacturers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to manufacturers. This is not only an irresponsible policy; it is also 38 42 C.F.R. 447.502 " [141: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. I IRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-000I -0095. 4 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. I IRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 23 quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party manufacturer's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential Fa1se Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by manufacturers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). MPBID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 'I See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 42 42 C.F.R. 438.3(s)(7) The MCO, Pll IR or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subehapter- C/part-438/suboart-Alsection-438.3 24 While we appreciate the suggestion that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section i f the drug is subject to the payment of a rebate to the State under section 1927 of such Act. " 43 After more than 33 years, Community Health Centers ask HRSA to implement systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a 43 42 U.S.C. 256b(a)(5)(A)(emphasis addcd). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 25 This approach is not sustainable. Even the associated interest costs would divert funds away from essential services currently supporting key health programs. Requiring community health centers to take on debt to maintain access to medications introduces financial strain and operational instability. In our region, where patients rely heavily on United Community Health Center as a primary safety net provider, the risk of exhausting credit capacity or depleting reserves poses a direct threat to continuity of care. If we are placed in a prolonged period of financial uncertainty, the downstream impact would be immediate: longer wait times, reduced service availability, and diminished capacity to provide the deeply discounted medications that millions of patients depend on. a. Financial Impact of Rebate Denials and Delays United Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC absorbs the full loss on the transaction, having already purchased the drug at WAC and dispensed it to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a modest denial rate would result in a significant annual financial loss. This is not a cost our organization can absorb, as it represents a direct reduction in resources from our safety net budget. Any loss of funding would have a direct impact on our ability to carry out our mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www. federal register.go v/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340h- rebate-model-oi lot-program 11 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits." The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. A11 this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."18 " Manufacturer Audit Guidelines https://www.hrsa.govlsites/default/files/hrsalopa/dispute-resolution-process- I 2-12-96.pdf IS 340B House Report Legislative I listory. H.R. REP. 102-384(11). 12 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protection, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: '9 Administrative Dispute Resolution Regulation, imps://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf72024-08262.pdf 13 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claim-level documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures " Section 340B of the Public Health Service Act, https://www.hrskaov/sites/defaulthiles/hrsairural-health/phs-act-section- 340b.pdf 14 Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P I 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract l'rice Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund arnount. P8 Entit. Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 340B Pharmacy Allocation V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, 21 hups://mfp.support.beaconchannelmanagement.com/en/articlesil 3335320-validation-codes-and-pricing-codes-glossary 15 UNITED COMMUNITY "P\ HEALTH CENTER serving Southern Arizona Since 1983 April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of United Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(l):50-9. doi: 10.1097/JAC.0013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blindcd Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/l0.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental hcalth indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral I lealth Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.govidata/data-we-collectinsduh-national-survevdrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, I IRSA (hrsa.gov) 3 Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 4 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: United Community Health Center provides sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: United Community Health Center anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, United Community Health Center anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Additional hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. United Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Party Administration Changes 7 Intcmal NACHC assessment (99 responses). 8 Ibid. 5
HRSA-2026-0001-1692Dignity Health - Mercy Medical Center2026-04-17T04:00Z6,036 chars
Submission on behalf of Mercy Medical Center in Merced, California. cx, Dignity Health. A member of CommonSpirit Mercy Medical Center Administration 333 MercyAvenue Merced, CA 95340 Direct (209) 564-5000 Fax (209)564-5096 https://www.dignityhealth.org/central-california/locations/mercymedical-merced The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Service 5600 Fishers Lane Rockville, MD 20852 April 20, 2026 Subject: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2O26-O3O42) DearAdministrator Engels, Mercy Medical Center Merced, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Medical Center Merced that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Medical Center Merced relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in ourfacility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue powerto drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources thatwould be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a10-day period as required underthe prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-trackthe drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Scott Banks Chief Financial Officer Mercy Medical Center, Merced, CA Scott.banks@commonspirit.org CommonSpint As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1693Southern Christian Leadership Global Policy Initiative2026-04-17T04:00Z4,220 chars
See attached file(s) Kevin B. Kimble, Esq. Executive Director, Southern Christian Leadership Conference - Global Policy Initiative (SCL-GPI) Founder & CEO, Financial Services Innovation Coalition (FSIC) April 14, 2026 TO: Health Resources and Services Administration (HRSA) RE: Request for Information: 340B Program Rebate Model The SCL-GPI and FSIC support the 340B Rebate Model Pilot. We've been in communities for decades, watching programs meant to help poor people get twisted into machines that make hospital executives richer. We see it with our own eyes: hospitals pulling out of neighborhoods where Black and Latino families live, moving their services to suburbs where people have money. The 340B program, supposed to help safety-net providers access lower-cost medicines for the neediest patients, has become the opposite of that. What's Happening on the Ground In 1992, Congress created 340B to help hospitals and clinics serving low-income patients buy prescription drugs at steep discounts. Good idea. The problem: there's no rule saying hospitals have to actually help the patients. No rule saying the discount has to go to anyone specific. Hospitals can mark up 340B medicines 10 times what they paid for them. And they do. The poorest hospitals, the ones in Black and brown neighborhoods, get squeezed out as corporate hospital chains use 340B profits to expand into wealthy, white areas. This is by design, not accident. Hospitals track every prescription, sometimes years after a patient visited, to claim 340B discounts. They spend money to maximize the spread between what they buy and what they bill. It's profitable. But it's not what Congress intended. The Money is Being Stolen The lack of transparency has opened the door to massive fraud. Hospitals and providers are supposed to get either a Medicaid rebate or a 340B price, not both. But with no tracking system, hospitals claim both. In 2019, when the program was much smaller than it is today, that double- dipping added up to $1.5 billion. (source) Now it's worse. Then Congress passed the Inflation Reduction Act. Now there are THREE programs potentially paying for the same drug. And without real-time visibility, hospitals can end up claiming all three. That's another $4 billion getting stolen from taxpayers. The Rebate Model Is the Fix A rebate model creates greater accountability and stronger guardrails within the program. You can see which drugs are eligible for the appropriate rebate. You can prevent the same medicine from receiving duplicate discounts. Transparency is what kills the scheme. Direct Reporting is Non-Negotiable This limited pilot program should move forward and not include carveouts for any hospitals, clinics, or other providers. This ensures: Immediate identification of duplicate 340B/Medicaid/IPAY discounts Real-time enforcement Protection of federal dollars that belong to taxpayers This Isn't Just Policy, It's About People We work in communities that have been abandoned by healthcare. Richmond Community Hospital had its services cut back significantly. (source) These are hospitals that say they serve poor communities, but really, they're looking for the exit. The 340B program feeds that. It rewards hospitals for abandoning poor neighborhoods. A transparent, regulated rebate model won't fix everything. It starts to align the program back to what Congress intended. And it adds more accountability to the program. The Bottom Line We support the 340B Rebate Model Pilot Program, with one requirement that cannot be compromised: no carve-outs for hospitals or other actors in the program. This is the first necessary step to take back a program that's been hijacked. It won't be the last, the 340B program needs deeper reform to serve the people it was supposed to serve truly. But transparency and enforcement have to come first. We stand ready to work with HRSA to make this right. Respectfully submitted, Kevin B. Kimble, Esq. Executive Director, Southern Christian Leadership Conference - Global Policy Initiative (SCL- GPI) Founder & CEO, Financial Services Innovation Coalition (FSIC) 202-696-0138 kkimble@fsicoalition.org
HRSA-2026-0001-1694Arkansas Hospital Association2026-04-17T04:00Z13,083 chars
The attached comment letter is on behalf of the Arkansas Hospital Association. 1 419 Natural Resources Drive | Little Rock, AR 72205 | (501) 224-7878 | Fax (501) 224-0519 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: The Arkansas Hospital Association (AHA) is a membership organization that proudly represents more than one hundred healthcare facilities and their more than 45,000 employees as they strive to care for all Arkansans who seek care. The Association works to support, safeguard, and assist our members in providing safe, high quality, patient- centered care in a rapidly evolving and highly regulated healthcare environment. Our association represents every 340B eligible hospital in Arkansas. The AHA appreciates the opportunity to respond to the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. As an association that is not, itself, a covered entity, we leave detailing answers to the 30 questions to our members. The short answer to whether AHA believes that the Health Resources and Services Administration (HRSA) should implement a rebate model under the 340B program instead of the successful upfront discount model is no. Arkansas hospitals serve almost 19,000 patients each day. Many of those patients require lifesaving prescription drugs and comprehensive healthcare services but cannot aord them. The 340B program has not only allowed Arkansas hospitals to provide access to otherwise costly, unattainable drugs for patients without utilizing federal, state, or local taxpayer dollars, it has also fulfilled its exact intent to allow hospitals to stretch scarce federal resources as far as possible to meet the needs of patients in our communities. 2 419 Natural Resources Drive | Little Rock, AR 72205 | (501) 224-7878 | Fax (501) 224-0519 Eorts to scale back the program will have devastating consequences for the patients and communities served by 340B hospitals, will divert revenues from hospitals to drug manufacturers, and will not save any taxpayer dollars. Programs like 340B save patient lives and improve families and communities and should be expanded rather than subjected to constant attack. It is disheartening that HRSA is even entertaining a pilot for a rebate model that favors drug manufacturers over hospitals who serve our most vulnerable Arkansans. As you are well aware, Congress created the 340B Drug Pricing Program in 1992. Pharmaceutical manufacturers agreed to sell their drugs to certain not-for-profit and governmental hospitals (and other defined covered entities, like federally qualified health centers) at reduced prices in exchange for their ability to sell their drugs to the government through Medicare and Medicaid. While many 340B participating hospitals in Arkansas are struggling to make payroll, pharmaceutical manufacturers even back in 20201 - were posting record profits. STATE LEGISLATIVE RESPONSE TO PHARMACEUTICAL MANUFACTURER DISCRIMINATION In the summer of 2020, pharmaceutical manufacturers began imposing 340B discount restrictions on covered entities that enter into contracts with local pharmacies that assist with patient access to their 340B prescriptions. For Arkansas 340B eligible hospitals who were banned by state law from operating their own retail pharmacies, that blow was not only financially devastating from a cash flow perspective, it also greatly diminished patient access to medications. With well-informed and impassioned members of the Arkansas Legislature taking the lead, Arkansas Act 1103 of 2021 was passed to prohibit drug companies from restricting covered entities use of contract pharmacies. The Act is the first of its kind in the nation. Arkansass Act gives enforcement authority to the Arkansas Insurance Department. Unsurprisingly, the Pharmaceutical Research and Manufacturers of America (PhRMA), representing many biopharmaceutical research companies and drug companies, sued the Insurance Commissioner in federal court, asserting that the state is preempted from enforcement. Both the United States District Court of the Eastern District of Arkansas and the United States Eighth Circuit Court of Appeals ruled against PhRMA. When PhRMA asked for a writ of certiorari, the United States Supreme Court denied its request. 1 Ledley FD, McCoy SS, Vaughan G, Cleary EG. Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies. JAMA. 2020 Mar 3;323(9):834-843. doi: 10.1001/jama.2020.0442. PMID: 32125401; PMCID: PMC7054843.https://pmc.ncbi.nlm.nih.gov/articles/PMC7054843/ 3 419 Natural Resources Drive | Little Rock, AR 72205 | (501) 224-7878 | Fax (501) 224-0519 Most manufacturers lifted their restrictions after the Supreme Courts denial. During the time period when the restrictions were in place, real financial damage occurred. Facilities with suicient financial reserves were generally able to maintain service levels, while more financially vulnerable hospitals were forced to scale back services to remain operational. Unfortunately, the loss of 340B-generated savings during this period constrained hospitals ability to sustain essential service lines that routinely operate at a financial loss but are maintained to meet community needs. In many rural settings, 340B resources are used to support services such as behavioral health, oncology, maternal health, and high- cost, low-margin care. When those resources were disrupted, hospitals were forced to reassess the viability of these services, leading in some cases to reductions or closures. These dynamics are reflected in the current landscape, where only 25 of Arkansass 75 counties have hospitals oering labor and delivery services. This trend stresses the instability of the states maternal health infrastructure and highlights the risk that further disruption such as that posed by a rebate model could accelerate the loss of critical services that are already at risk. CASH FLOW AND ADMINISTRATIVE COST CONCERNS WITH THE REBATE MODEL A rebate model imposes similar cash flow issues that ensued with the manufacturer restrictions and even adds unwarranted administrative obstacles and costs. The proposed rebate model requires 340B eligible hospitals to redesign internal operations, staing, third-party contractual relationships, and financial planning to accommodate pharmaceutical manufacturers unwillingness to continue to provide upfront discounted pricing. Most of Arkansass hospitals eligible to serve as covered entities for the 340B program are the most financially strained. Requiring those hospitals to incur the massive administrative costs of changing entire financial systems is diicult enough. Requiring those same hospitals to use their limited dollars or even to beg their local banking institutions for extended credit because the dollars are not available to prepurchase drugs at substantially higher prices to wait for a pharmaceutical manufacturer to pay back a portion of the purchase price is especially daunting. Pharmaceutical manufacturers have reserves from past profits. These hospitals do not. Many Arkansas hospitals are already suering with decisions of which bill to pay and when. Hospitals and the patients they serve do not have the luxury of time. Hospitals are not in a position of having enough cash to pay higher upfront prices and wait even only ten days at the mercy of the pharmaceutical manufacturers to rebate those dollars that are critical to the hospitals ability to provide care. 4 419 Natural Resources Drive | Little Rock, AR 72205 | (501) 224-7878 | Fax (501) 224-0519 DATA COLLECTION AND AVOIDING DUPLICATE DISCOUNTS Both HRSA and pharmaceutical manufacturers have stated that a rebate model would not impose new data requirements on covered entities and refers to data entry already collected through 340BESP. As Arkansass 340B eligible hospitals have endured various pharmaceutical manufacturer data entry requirements through 340BESP, it is apparent that there are, in fact, a multitude of data fields added and added inconsistently across manufacturers that are required prior to a manufacturer allowing a covered entity to receive 340B pricing for its 340B orders. For example, covered entities would be required to submit data elements such as prescription identifiers, prescriber and provider identifiers, health plan information, claim numbers, quantities dispensed or administered, and service-level billing details in order to receive rebate payments. In contrast to the more limited and de-identified data history associated with 340B ESP, this model introduces a more complex, fully auditable claims submission process tied directly to payment, increasing both compliance risk and administrative burden. While program integrity is paramount, there is a real financial cost to covered entities for data collection, maintenance, validation, and audits. Many functions require expensive third-party vendors or consultants for compliance. Adding more or continuing to allow individual manufacturers to impose their own requirements adds expense with no proportional value. These costs are not oset by any demonstrated improvement in program integrity relative to existing mechanisms. Importantly, there are viable, lawful, and less burdensome alternatives that can achieve the stated goals of preventing duplicate discounts and improving program integrity. The current 340B ESP framework already demonstrates that centralized data exchange can support deduplication eorts without altering the fundamental structure of the program. In alignment with the American Hospital Association, we believe a neutral, third-party clearinghouse could standardize data submission requirements across manufacturers, reduce duplicative reporting, and provide a single point of validation for claims eligibility. Unlike a rebate model, a clearinghouse approach would preserve the upfront discount structure, avoid disruption to hospital cash flow, and minimize the need for extensive operational restructuring. A clearinghouse model would also promote consistency and transparency by establishing uniform data standards, reducing manufacturer-specific variation, and limiting the proliferation of proprietary platforms and requirements. This approach aligns more directly with HRSAs program integrity objectives while minimizing administrative burden on covered entities. At a minimum, HRSA should provide a clear and evidence-based rationale for why a rebate mechanism is preferable to a centralized clearinghouse 5 419 Natural Resources Drive | Little Rock, AR 72205 | (501) 224-7878 | Fax (501) 224-0519 approach, particularly given the latters ability to achieve similar objectives with significantly lower operational and financial impact on hospitals. REJECT THE REBATE MODEL The AHA again appreciates the opportunity to comment on this important issue. We reiterate that the costs and operational risks associated with a rebate-based model would outweigh any potential or theoretical benefits. The 340B program was designed to support providers serving vulnerable populations, and there is no demonstrated need to fundamentally alter a model that is functioning as intended and does not require additional federal spending to achieve its goals. Transitioning to a rebate model would introduce unnecessary administrative burden, delay access to critical resources, and shift financial and operational risk onto hospitals that are already operating under significant constraints. In contrast, pharmaceutical manufacturers continue to benefit from their participation in the 340B program through access to Medicare and Medicaid markets, consistent with the original statutory framework. Altering this balance in a way that further advantages manufacturers without clear evidence of program deficiencies would undermine the intent of the program and the providers it was designed to support. For these reasons, AHA strongly urges HRSA to reject the rebate model and preserve the current upfront discount structure. If additional program integrity measures are deemed necessary, HRSA should pursue solutions that strengthen oversight without disrupting care delivery, such as a neutral, third-party clearinghouse. Maintaining the existing model is essential to protecting patient access, supporting hospital operations, and ensuring that limited healthcare resources remain directed toward patient care rather than administrative complexity. Sincerely, Bo Ryall President & CEO Arkansas Hospital Association boryall@arkhospitals.org
HRSA-2026-0001-1695(no commenter metadata)2026-04-17T04:00Z6,310 chars
Michigan AIDS Drug Assistance Program (ADAP) contributes to a comprehensive system of high-quality care and treatment for people with HIV (PWH) and participates in the 340B Drug Pricing Program through the exclusive use rebates to capture the statutory 340B discount. While Michigan ADAP is 100% rebates, several subrecipients of the Ryan White HIV/AIDS (RWHAP) operate 340B programs and generate program income. Current Michigan ADAP Rebate Process: Claim level reporting is used to submit claims to pharmaceutical manufacturers for 340B rebates. As part of Michigan ADAP quality assurance, claims are reviewed for Medicaid eligible claims and appropriate processing of coordination of benefits. Any eligible claims are identified and communicated to the Michigan ADAP pharmacy network for claim reversal and rebilling to the appropriate payer source. Once the screening of claims is complete by the pharmacy benefits manager (PBM), a drug utilization report is issued to Michigan ADAP every quarter, and this information serves as the basis for submitting rebate claims to manufacturers. While every attempt is made to complete these recoupment activities within 45 days of the quarter end, rebates may be submitted up to twelve months after the close of the quarter. A delay in processing helps Michigan ADAP achieve the maximum amount of program savings through recoupment efforts. In some circumstances, a Michigan ADAP client may have applied for Medicaid, but it takes several months before the approval process is complete. Medicaid insurance is often backdated to the application date, and sometimes even before the application date. It is important for Michigan ADAP to allow adequate processing time for the PBM to complete the recoupment process and limit the number of missed opportunities for recoupment. Challenges: The following are challenges facing Michigan ADAP due to the proposed rule stemming from the 340B Rebate pilot: ADAPs do not have Provider Medicare Provider Number (MPN), and other data elements (e.g., Fill No.). As a 100% rebate state, Michigan ADAP does not use 340B contract pharmacies for dispenses to Medicare beneficiaries. Unfunded administrative updates and increased administrative burden on Michigan ADAP requiring new, greater staff time and resources, state procurement/contract negotiations to execute new drug purchasing and data sharing terms. Risks of manufacturer-controlled platforms. Lack of centralized, neutral third-party data submission pathway and adjudication process will create complexity and administrative burden. Overreach in data collection Concern that the rebate model will be expanded to include drugs beyond those included in Medicare Drug Price Negotiation Program Agreements, especially high-cost drugs for communicable diseases. Requests: Exempt ADAPs that currently already utilize a rebate model from the new rule. Provide technical assistance to ADAPs where required. Provide the maximum time for ADAPs to submit quarterly claims data for manual reconciliation with manufacturer data during restatement/True-Up process. Comments on 340B Rebate Model Pilot Program Michigan AIDS Drug Assistance Program (ADAP) contributes to a comprehensive system of high- quality care and treatment for people with HIV (PWH) and participates in the 340B Drug Pricing Program through the exclusive use rebates to capture the statutory 340B discount. While Michigan ADAP is 100% rebates, several subrecipients of the Ryan White HIV/AIDS (RWHAP) operate 340B programs and generate program income. Current Michigan ADAP Rebate Process: Claim level reporting is used to submit claims to pharmaceutical manufacturers for 340B rebates. As part of Michigan ADAP quality assurance, claims are reviewed for Medicaid eligible claims and appropriate processing of coordination of benefits. Any eligible claims are identified and communicated to the Michigan ADAP pharmacy network for claim reversal and rebilling to the appropriate payer source. Once the screening of claims is complete by the pharmacy benefits manager (PBM), a drug utilization report is issued to Michigan ADAP every quarter, and this information serves as the basis for submitting rebate claims to manufacturers. While every attempt is made to complete these recoupment activities within 45 days of the quarter end, rebates may be submitted up to twelve months after the close of the quarter. A delay in processing helps Michigan ADAP achieve the maximum amount of program savings through recoupment efforts. In some circumstances, a Michigan ADAP client may have applied for Medicaid, but it takes several months before the approval process is complete. Medicaid insurance is often backdated to the application date, and sometimes even before the application date. It is important for Michigan ADAP to allow adequate processing time for the PBM to complete the recoupment process and limit the number of missed opportunities for recoupment. Challenges: The following are challenges facing Michigan ADAP due to the proposed rule stemming from the 340B Rebate pilot: ADAPs do not have Provider Medicare Provider Number (MPN), and other data elements (e.g., Fill No.). As a 100% rebate state, Michigan ADAP does not use 340B contract pharmacies for dispenses to Medicare beneficiaries. Unfunded administrative updates and increased administrative burden on Michigan ADAP requiring new, greater staff time and resources, state procurement/contract negotiations to execute new drug purchasing and data sharing terms. Risks of manufacturer-controlled platforms. Lack of centralized, neutral third-party data submission pathway and adjudication process will create complexity and administrative burden. Overreach in data collection Concern that the rebate model will be expanded to include drugs beyond those included in Medicare Drug Price Negotiation Program Agreements, especially high-cost drugs for communicable diseases. Requests: Exempt ADAPs that currently already utilize a rebate model from the new rule. Provide technical assistance to ADAPs where required. Provide the maximum time for ADAPs to submit quarterly claims data for manual reconciliation with manufacturer data during restatement/True-Up process.
HRSA-2026-0001-1696Health Center Partners2026-04-17T04:00Z12,531 chars
See attached file(s) Health Center Partners 3710 Ruffin Rd, San Diego, CA 92123 | Phone: (619) 542-4300 | | hcpsocal.org 1 April 17, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Health Center Partners of Southern California (HCP) I write today on 340B Rebate Model Pilot Program (HRSA-2026-03042). For Community Health Centers (CHCs), the 340B program is fundamental to advancing the CHC mission to serve the most vulnerable patients. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. HRSA must EXEMPT CHCs from any rebate model to protect the financial stability of safety- net providers and ensure continued access to care for the most vulnerable patients. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model will cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on them. Health Center Partners of Southern California a regional primary care association established in 1977, represents 17 health center organizations serving more than 763,000 patients annually through 3.2 million visits at 210 practice sites across San Diego, Riverside, and Imperial counties. Members include Federally Qualified Health Centers (FQHCs), Indian Health Services organizations, and other safety-net providers employing nearly 10,000 individuals. Together, we work to ensure access to high-quality, affordable care for the most vulnerable populations in our region. HCP is part of a family of companies which includes Integrated Health Partners (IHP), a clinically integrated network; My Choice Quality Care Network, a CMMI FLEX model ACO; Health Health Center Partners 3710 Ruffin Rd, San Diego, CA 92123 | Phone: (619) 542-4300 | | hcpsocal.org 2 Quality Partners (HQP), a population health and wellness collaborative supporting research and implementation; and CNECT, a nationwide group purchasing and supply chain organization. Together, the HCP family of companies works collaboratively to serve as the nexus for its members and partners to transform primary care through the power of innovation and collaboration. California Specific: Implementation Will Compound the Harms of the Rebate Model When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. So, a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. Health Center Partners 3710 Ruffin Rd, San Diego, CA 92123 | Phone: (619) 542-4300 | | hcpsocal.org 3 Patient Impact For uninsured and underinsured patients who rely on the affordability of the 340B program, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. Therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings - CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications (via the 340B program) to manage long-term medical conditions. Administrative Complexities and Financial Challenges The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. CHCs will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Many CHCs are currently under real financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. A rebate model creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.2 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.3 According to an internal NACHC assessment, 47% of 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 HRSA FAQ 3 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Health Center Partners 3710 Ruffin Rd, San Diego, CA 92123 | Phone: (619) 542-4300 | | hcpsocal.org 4 responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.4 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.5 CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. HRSAs requirement for a 10-day timeframe for rebate payments is good in theory - however, there are real concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. CHCs are concerned in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services supporting patients. Existing CHC Compliance Actions Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 4 Internal NACHC assessment (99 responses). 5 Ibid. Health Center Partners 3710 Ruffin Rd, San Diego, CA 92123 | Phone: (619) 542-4300 | | hcpsocal.org 5 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. In conclusion, HRSA must exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. Thank you for your time on this important issue. Sincerely, Sparkle Barnes President and CEO cc HCP Board of Directors
HRSA-2026-0001-1697(no commenter metadata)2026-04-17T04:00Z24,300 chars
See attached file(s) Audubon County Memorial Hospital and Clinics 515 Pacific Avenue Audubon, IA 50025 4/17/2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Audubon County Memorial Hospital and Clinics, located in Audubon, IA, we appreciate the opportunity to respond to the Department of Health and Human Services Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congresss directive that covered entities be able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. A rebate mechanism would require Audubon County Memorial Hospital and Clinics to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. MFP has cut the amount of dollars our hospital receives from our contract pharmacy set up in half in 2026. Further reductions in dollars will negatively impact this hospital's ability to provide care in a community that does not have full time specialty care. We will likely be unable to retain full time surgeon coverage as well as telehealth services for other specialties. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. Audubon County Memorial Hospital and Clinics does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSAs estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. I am a one-person pharmacy department and time spent manually gathering and formatting data is time that is not spent taking care of the patients of this hospital. Many of us run with a bare minimum staffing that would directly be affected by this increased workload Systems, IT, and Infrastructure Requirements HRSA asks about the systems and infrastructure changes that would be required to implement a rebate model. Audubon County Memorial Hospital and Clinics current IT systems, including pharmacy platforms, EHRs, and billing systems, are designed to support purchase time discounts, not post-purchase rebates. A rebate model would require: New data integration tools or manual extraction processes; Modifications to financial controls and accounting workflows; Ongoing system maintenance to address data mismatches and evolving requirements. Many third-party administrators do not maintain direct EHR data feeds for rebate- specific elements, meaning manual intervention would be unavoidable. This increases administrative burden, cost, and the risk of errors and compliance issues. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. Data that is required to be submitted is cumbersome to acquire and may expose the PHI of our patients in unintended ways. Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, Audubon County Memorial Hospital and Clinics would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. While we currently have sufficient cash on hand, a delay in payments may affect our ability to budget new items. With that delay we may not be able to move forward with projects that increase the access to care for patients in our rural areas. Impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Reliance Interests HRSA requests comment on covered entities reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. Audubon County Memorial Hospital and Clinics relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. 340B savings are utilized to purchase supplies that are allow our patients to receive care close to home that they would otherwise have to travel for. We use those savings to purchase surgical supplies, bring in specialty providers, purchase emergency medical supplies, and more. Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third- party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the Iowa Hospital Associations and the American Hospital Associations recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. IF APPLICABLEALTERNATIVE #1: If no drug company has raised a 340B/MDPNP de-duplication issue with you to date, state that explicitly. Or if there was a de-duplication issue that was raised and addressed promptly, describe that as well. THE AIM HERE WOULD BE TO SHOW THAT A REBATE MODEL IS NOT NEEDED TO ADDRESS DE-DUPLICATION ISSUES. o Describe how de-duplication has been managed to date and explain how there have been no issues. o Explain how your current 340B/MDPNP de-duplication approach has been less burdensome than HRSAs previously proposed rebate program. [IF APPLICABLEALTERNATIVE #2: if youve had issues with 340B/MDPNP de-duplication since January 1, 2026, describe your experience and explain why a change to a rebate model is still unnecessary and would not solve the existing issues with the de-duplication process and/or would only make those issues worse.] IF YOU DO NOT HAVE SUFFICIENT HELPFUL INFORMATION FOR THIS SUBSECTION, YOU DO NOT HAVE TO ANSWER THESE QUESTIONS AND ONLY INCLUDE THE INTRODUCTORY PARAGRAPHS. For all the reasons outlined above, Audubon County Memorial Hospital and Clinics respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Sincerely, Brett Pietig Director of Pharmacy Audubon County Memorial Hospital and Clinics 515 Pacific Avenue Audubon, IA 50025 4/17/2026 Audubon County Memorial Hospital and Clinics 515 Pacific Avenue Audubon, IA 50025 4/17/2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Audubon County Memorial Hospital and Clinics, located in Audubon, IA, we appreciate the opportunity to respond to the Department of Health and Human Services Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congresss directive that covered entities be able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. A rebate mechanism would require Audubon County Memorial Hospital and Clinics to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. MFP has cut the amount of dollars our hospital receives from our contract pharmacy set up in half in 2026. Further reductions in dollars will negatively impact this hospital's ability to provide care in a community that does not have full time specialty care. We will likely be unable to retain full time surgeon coverage as well as telehealth services for other specialties. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. Audubon County Memorial Hospital and Clinics does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSAs estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. I am a one-person pharmacy department and time spent manually gathering and formatting data is time that is not spent taking care of the patients of this hospital. Many of us run with a bare minimum staffing that would directly be affected by this increased workload Systems, IT, and Infrastructure Requirements HRSA asks about the systems and infrastructure changes that would be required to implement a rebate model. Audubon County Memorial Hospital and Clinics current IT systems, including pharmacy platforms, EHRs, and billing systems, are designed to support purchase time discounts, not post-purchase rebates. A rebate model would require: New data integration tools or manual extraction processes; Modifications to financial controls and accounting workflows; Ongoing system maintenance to address data mismatches and evolving requirements. Many third-party administrators do not maintain direct EHR data feeds for rebate-specific elements, meaning manual intervention would be unavoidable. This increases administrative burden, cost, and the risk of errors and compliance issues. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. Data that is required to be submitted is cumbersome to acquire and may expose the PHI of our patients in unintended ways. Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, Audubon County Memorial Hospital and Clinics would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. While we currently have sufficient cash on hand, a delay in payments may affect our ability to budget new items. With that delay we may not be able to move forward with projects that increase the access to care for patients in our rural areas. Impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Reliance Interests HRSA requests comment on covered entities reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. Audubon County Memorial Hospital and Clinics relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. 340B savings are utilized to purchase supplies that are allow our patients to receive care close to home that they would otherwise have to travel for. We use those savings to purchase surgical supplies, bring in specialty providers, purchase emergency medical supplies, and more. Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third-party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the Iowa Hospital Associations and the American Hospital Associations recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. IF APPLICABLEALTERNATIVE #1: If no drug company has raised a 340B/MDPNP de-duplication issue with you to date, state that explicitly. Or if there was a de-duplication issue that was raised and addressed promptly, describe that as well. THE AIM HERE WOULD BE TO SHOW THAT A REBATE MODEL IS NOT NEEDED TO ADDRESS DE-DUPLICATION ISSUES. Describe how de-duplication has been managed to date and explain how there have been no issues. Explain how your current 340B/MDPNP de-duplication approach has been less burdensome than HRSAs previously proposed rebate program. [IF APPLICABLEALTERNATIVE #2: if youve had issues with 340B/MDPNP de-duplication since January 1, 2026, describe your experience and explain why a change to a rebate model is still unnecessary and would not solve the existing issues with the de-duplication process and/or would only make those issues worse.] IF YOU DO NOT HAVE SUFFICIENT HELPFUL INFORMATION FOR THIS SUBSECTION, YOU DO NOT HAVE TO ANSWER THESE QUESTIONS AND ONLY INCLUDE THE INTRODUCTORY PARAGRAPHS. For all the reasons outlined above, Audubon County Memorial Hospital and Clinics respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Sincerely, Brett Pietig Director of Pharmacy Audubon County Memorial Hospital and Clinics 515 Pacific Avenue Audubon, IA 50025 4/17/2026
HRSA-2026-0001-1698(no commenter metadata)2026-04-17T04:00Z4,795 chars
Submitted on behalf of the Oneida Nation. April 17, 2026 Submitted electronically via regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) Dear Mr. Engels, On behalf of Oneida Nation (the Nation), I am writing to provide written comments in response to HRSAs Request for Information regarding the 340B Rebate Model Pilot Program (91 FR 7287). Oneida Nation Background: The Nation is a Title V Self-Governance Tribe with over 17,000 citizens. Our reservation was established in 1838 and covers 65,400 acres located within the boundaries of Brown and Outagamie Counties in Northeast Wisconsin. Over 7,700 enrolled Oneidas live on or near the Oneida Reservation within the two counties. The purpose of our inherent right to self-governance is to protect the health, safety, and welfare of our members while protecting our culture, revitalizing our language, and restoring the environment to improve the quality of life for the community. We are committed to maintaining our rich traditions, culture, and language. The Nation is located within the IHS Bemidji Area, and we have had a Compact and Funding Agreement with the US Department of Health and Human Services (HHS) since 1997. The Nations Comprehensive Health Division serves over 12,500 patients and provides a multitude of programs and services, including an ambulatory health clinic, a skilled-nursing facility, behavioral health services, and pharmacy. The health of our people is of highest priority to the Nation. We have created a health system that promotes tsi?niyukwalihot^ (Our Ways), and our mission is to provide the highest quality, holistic healthcare to ensure the wellness of our Oneida community. Upholding Trust and Treaty Obligations: The United States has a unique legal and political relationship with Tribal governments, established through and confirmed by the Constitution, federal laws, supreme court case law, and presidential orders. Born out of this relationship is the federal governments trust responsibility to protect the interests of Tribes and communities, which includes the provision of healthcare to American Indians and Alaska Natives. Page 2 of 2 While IHS is the principal health care provider for American Indians and Alaska Natives, the federal trust and treaty responsibility extends to all of HHS operating divisions, including HRSA. As federally recognized tribes, we have a unique government-to-government relationship with the federal government and HRSA. Oneida Nation Feedback re: 340B Model Pilot Program The Nation joins other Tribal Nations, Tribal Organizations, and the CMS Tribal Technical Advisory Group (TTAG) in sharing our concerns regarding the 340B Model Pilot Program and its impact on Tribal healthcare providers and 340B participants. Under this Pilot Program, Tribal Health Centers, like those operated by the Nations Comprehensive Health Division, would be required to purchase drugs upfront at full retail price. This departure from over 30 years of precedent would drastically impact our ability to purchase drugs for our patients due to the uncertainty of waiting for a manufacturer to approve a rebate. Rebate models are incompatible with the Indian Health System. Tribal healthcare providers like Oneida Comprehensive Health Division operate within a chronically underfunded IHS system, and we rely upon third-party revenue to operate our programs. Tribal healthcare facilities rely on the immediacy of 340B savings to support pharmacy operations, maintain cash flow stability, and sustain access to essential and high-cost medications for patients. We are also concerned about the oversight of manufacturers issuing drug rebates and the Tribal facilities' ability to go through a timely appeals or adjudication process upon request when issues arise. Covered entities are forced to use multiple platforms to secure reimbursement for drug costs, creating delays that prevent health centers from recovering their losses. REQUEST: We urge HRSA to exempt Indian Health Service, Tribal, and Urban Indian Organization providers from any rebate-based 340B pilot model. REQUEST: We urge HRSA to conduct formal Tribal consultation before further consideration or implementation of a rebate model in place of providing existing 340B discounts. We appreciate the opportunity to provide our input and recommendations regarding this program. With a Good Mind, a Good Heart, and Strong Fire, Tehassi tasi Hill, Chairman Oneida Nation
HRSA-2026-0001-1699Ridgecrest Regional Hospital2026-04-17T04:00Z2,329 chars
See attached file(s) Sincerely, es Suver O/President idgecrest Regional Hospital 1081 N. China Lake Blvd. Ridgecrest, CA 93555 760-499-3900 Ridg e(re5 t R EGIONAL H OSPITAL April 16, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: I am writing on behalf of Ridgecrest Regional Hospital, a Critical Access Hospital located 93 miles from the nearest alternative healthcare services. We serve 30,000 local residents, and 6,500 workers at Naval Air Weapons Station China Lake, America's largest military base by area. Our nearest VA medical facility is 192 miles distant. This RFI asks "whether HRSA should implement a rebate model under the 340B program" in place of the upfront discount model that has worked successfully for decades. For Critical Access Hospitals, the answer is "no." Rural hospitals like ours lack the financial flexibility and staffing to manage a complex rebate system. The added burden of new IT platforms, data submission, tracking, reconciliation and appeals would impose enormous administrative strain on already limited staff, and ultimately divert resources from patient care. Floating WAC drug costs while awaiting 340B rebates would needlessly tie up working capital, threatening patient access and the viability of safety-net care, as evidenced by: 2.11% 2025 operating margin 30.81% 2025 Medi-Cal patient load $61,670,481 2025 Medi-Cal/VA unreimbursed costs $9,537,377 2025 Uncompensated Care Costs (charity, bad debt, excluding Medicare) Ridgecrest Regional Hospital maintains consistent, strong safeguards to prevent duplicate discounts. We employ dedicated staff to conduct internal audits, and contract with specialized third party admini- strators to verify claim eligibility and conduct onsite audits. Imposing a rebate model adds complexity and costs, without improving program integrity. We respectfully ask HRSA to protect the integrity of the 340B Program, by rejecting the roposed Rebate Pilot Program, and upholding the point-of-sale discounts that have supported ety-net providers for decades.
HRSA-2026-0001-1700Choose Healthy Life2026-04-17T04:00Z4,497 chars
See attached file(s) April 17, 2026 Chantelle Britton, Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives (HRSA) 5600 Fishers Lane Rockville, MD 20857 Re: 340B Rebate Model Pilot Program, Docket No. HRSA-2026-03042 Dear Director Britton, My name is Reverend Kimberly L. Williams, and I am the president and CEO of Choose Healthy Life (CHL), a national, faith-based public health organization working in partnership with Black churches to deliver health services in communities with the greatest need. CHL is deeply committed to improving access to healthcare for underserved populations. Through our partnerships with Black churches, CHL works directly in communities that have historically faced systemic barriers to health care. I appreciate the opportunity to provide comments on behalf of CHL for HRSA's Request for Information regarding the proposed 340B Rebate Model Pilot Program. Congress established the 340B program with a clear and important purpose: to help safety-net providers stretch scarce resources and better serve low-income and uninsured patients. However, from our vantage point working in Black communities across the country, it is increasingly clear that the program is not consistently delivering on that promise. Patients in the communities we serve continue to face significant barriers to accessing affordable medications, even as the program has grown from fewer than 100 participating hospitals to more than 2,600 today. Black Americans have disproportionately high rates of chronic conditions such as diabetes, hypertension, and kidney disease, conditions that require consistent access to prescription medications. Yet too often, the people CHL serves must delay or forgo treatment due to cost concerns and other challenges they encounter when navigating the healthcare system. At a minimum, the 340B program hasn't solved these problems. And there's plenty of reason to suspect that it is actually exacerbating them. That's why CHL strongly supports HRSA's efforts to explore how a rebate- based payment model could fix 340B. Transitioning from an upfront discount structure to a claims-based rebate model is an important step toward improving transparency, strengthening oversight, and ensuring that hospitals use 340B benefits to expand patient care. We commend HRSA for considering whether to include both I-Pay 2026 and I-Pay 2027 drugs, rather than just the I-PAY 2026 drugs that would have been included in last year's proposed pilot program. Including a broader set of therapies -- particularly those used to treat chronic conditions that disproportionately affect Black communities -- will allow HRSA to generate more representative data and better evaluate whether the rebate model improves access and outcomes for underserved patients. We strongly urge HRSA to apply the rebate model consistently across all participating covered entities, without carve-outs or exemptions. Allowing certain entities to opt out would limit HRSA's ability to assess the effectiveness of rebates and could obscure whether outcomes are attributable to the rebate structure itself or to participation differences. At the same time, HRSA should consider providing targeted technical assistance and administrative support to smaller covered entities to ensure successful participation in the pilot. In addition, we encourage HRSA to establish clear evaluation criteria and reporting requirements from the outset. To fully understand the impact of the rebate model, data collection should include patient-level and community-level indicators such as insurance status, site of care, and geographic information. This data will be essential to determining whether savings generated through the program are improving access to medications and health services in under- resourced communities, including the Black communities CHL serves. By improving transparency and increasing accountability, this pilot has the potential to help 340B hospitals more effectively serve the communities Congress intended them to serve. Choose Healthy Life stands ready to support HRSA in this effort and to share insights from our work in communities across the country. We appreciate your leadership and your commitment to advancing policies that promote equitable access to care. Respectfully, Rev. Kimberly L. Williams President and CEO Choose Healthy Life
HRSA-2026-0001-1701Community Health Care, Inc.2026-04-17T04:00Z84,660 chars
See attached [INSERT ORG LOGO] April , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Community Health Care Inc. (CHC Inc.), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the rebate model. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. Community Health Care, Inc. strives to provide the communities we serve with excellence in patient-centered medical, dental, and behavioral health care that is compassionate, affordable and accessible. In 2025 we served 50,236 patients with more than 160,000 clinical visits. CHC Inc. is a vital part of the high-quality healthcare access in rural and urban portions of Eastern Iowa and Western Illinois, where healthcare can be difficult to access. The 340B program is foundational to CHC Inc.s ability to serve the members of our community with limited access to healthcare. The proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to add significant administrative burden and cost to our pharmacy operations while not expanding access to discounted medications or other health services as envisioned by the program. Who will this change benefit? Our contention is that the benefit will not be to patients or to healthcare providers, but only to Pharmaceutical manufacturers who will use the rebate program to delay payment and introduce new barriers for covered entities. Based on our estimates we anticipate two major impacts to our health center: Cash Flow: In the rebate model, covered entities like ours will have to front the costs of inventory for our pharmacies. Most health centers will not have the significant cash on hand to be able to purchase the inventory and wait for the rebate. This also puts a strain on our balance sheet and make use less attractive for other financing opportunities and reduces reserve cash needed to hedge against shifting dynamics in healthcare reimbursement and emergencies. Direct Cost Increases: We anticipate the need for at least 1 FTE to manage the reporting and reconciliation of the rebate pilot. This would be at least $62,500 per year in additional administrative costs. That doesnt take into account any lost revenue from unpaid or delayed rebates. 2 We also anticipate the need to purchase new software to track and verify prescription eligibility and proper rebate payment. Initial estimates are more than $60,000/year in additional costs. None of these additional costs represent a value add for patients or for our health center and simply increase costs and reduce sustainability. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHC Inc.s core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHC Inc. to purchase outpatient medications at reduced prices, enabling us to provide affordable and sometimes free medications to thousands of low- income and uninsured patients. As congressional intent made clear, the program was created to help covered entities stretch scarce State/Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHC Inc. By requiring covered entities to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 50,000+ patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of covered entities and ensure continued access to care for the most at-risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to transition to other medications due to cost or lack of availability as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed, that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care.6 Affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot could become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A rebate model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CHC Inc. provided more than $8 million in sliding fee discounts, to 5,895 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CHC Inc. anticipates needing to hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CHC Inc. anticipates an increase of $180,000 over three years to costs for external support vendors. Our projections show that each year compliance and additional administrative overhead will increase. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. As noted above we expect to hire at least one additional FTE and anticipate that it will cost $62,500 annually. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 Including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery we anticipate that our annual costs will exceed $13 million a year. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that 80 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CHC Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $12,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 50,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at above $13,000,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. CHC estimates the set up costs to be over $12,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend more hours manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. It is unknown how much time will be required, but could be significant if rebates are delayed or unpaid. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with more than forty pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across more than forty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our four-county service area with little or no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert,9 and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory 9 Cencora, Insight into U.S. pharmacy deserts (2024) 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSA FAQ 8 drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At CHC Inc. we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. Other service areas that rely on subsidization using 340B savings include adult dental care, OBYGN/Maternal health services, laboratory services, care coordination and community health workers. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,708,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $657,000 to purchase the same drugs at the 340B ceiling price. This represents a $1,051,000 increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHC Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as adult dental care, laboratory, OBGYN/Maternal health, school based care, community health workers, etc. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CHC Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CHC Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $349,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: CHC Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,052,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves until exhausted and delay or cancel capital intensive projects or purchases. This is not a sustainable solution. Redirecting capital to maintain the drug supply creates an environment of clinical instability. In our region, where patients rely on CHC Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays CHC Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework 11 allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual loss of $967,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 13 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CHC Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHC Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CHC Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tom Bowman, CEO at 500 West River Drive, Davenport, IA 52801. Sincerely, Tom Bowman Community Health Care, Inc. April , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Community Health Care Inc. (CHC Inc.), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the rebate model. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. Community Health Care, Inc. strives to provide the communities we serve with excellence in patient-centered medical, dental, and behavioral health care that is compassionate, affordable and accessible. In 2025 we served 50,236 patients with more than 160,000 clinical visits. CHC Inc. is a vital part of the high-quality healthcare access in rural and urban portions of Eastern Iowa and Western Illinois, where healthcare can be difficult to access. The 340B program is foundational to CHC Inc.s ability to serve the members of our community with limited access to healthcare. The proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to add significant administrative burden and cost to our pharmacy operations while not expanding access to discounted medications or other health services as envisioned by the program. Who will this change benefit? Our contention is that the benefit will not be to patients or to healthcare providers, but only to Pharmaceutical manufacturers who will use the rebate program to delay payment and introduce new barriers for covered entities. Based on our estimates we anticipate two major impacts to our health center: Cash Flow: In the rebate model, covered entities like ours will have to front the costs of inventory for our pharmacies. Most health centers will not have the significant cash on hand to be able to purchase the inventory and wait for the rebate. This also puts a strain on our balance sheet and make use less attractive for other financing opportunities and reduces reserve cash needed to hedge against shifting dynamics in healthcare reimbursement and emergencies. Direct Cost Increases: We anticipate the need for at least 1 FTE to manage the reporting and reconciliation of the rebate pilot. This would be at least $62,500 per year in additional administrative costs. That doesnt take into account any lost revenue from unpaid or delayed rebates. We also anticipate the need to purchase new software to track and verify prescription eligibility and proper rebate payment. Initial estimates are more than $60,000/year in additional costs. None of these additional costs represent a value add for patients or for our health center and simply increase costs and reduce sustainability. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHC Inc.s core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHC Inc. to purchase outpatient medications at reduced prices, enabling us to provide affordable and sometimes free medications to thousands of low-income and uninsured patients. As congressional intent made clear, the program was created to help covered entities stretch scarce State/Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHC Inc. By requiring covered entities to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 50,000+ patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of covered entities and ensure continued access to care for the most at-risk patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to transition to other medications due to cost or lack of availability as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed, that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care. Affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot could become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A rebate model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CHC Inc. provided more than $8 million in sliding fee discounts, to 5,895 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CHC Inc. anticipates needing to hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CHC Inc. anticipates an increase of $180,000 over three years to costs for external support vendors. Our projections show that each year compliance and additional administrative overhead will increase. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. As noted above we expect to hire at least one additional FTE and anticipate that it will cost $62,500 annually. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. Including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery we anticipate that our annual costs will exceed $13 million a year. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that 80 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CHC Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $12,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 50,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at above $13,000,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. CHC estimates the set up costs to be over $12,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend more hours manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. It is unknown how much time will be required, but could be significant if rebates are delayed or unpaid. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with more than forty pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across more than forty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our four-county service area with little or no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert, and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At CHC Inc. we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. Other service areas that rely on subsidization using 340B savings include adult dental care, OBYGN/Maternal health services, laboratory services, care coordination and community health workers. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,708,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $657,000 to purchase the same drugs at the 340B ceiling price. This represents a $1,051,000 increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHC Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as adult dental care, laboratory, OBGYN/Maternal health, school based care, community health workers, etc. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CHC Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CHC Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $349,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: CHC Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,052,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves until exhausted and delay or cancel capital intensive projects or purchases. This is not a sustainable solution. Redirecting capital to maintain the drug supply creates an environment of clinical instability. In our region, where patients rely on CHC Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays CHC Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual loss of $967,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CHC Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHC Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CHC Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tom Bowman, CEO at 500 West River Drive, Davenport, IA 52801. Sincerely, Tom Bowman Community Health Care, Inc.
HRSA-2026-0001-1702Maine Primary Care Association2026-04-17T04:00Z21,234 chars
See attached file(s) mepca.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Maines Community Health Centers (CHCs) and the over 200,000 patients they serve, Maine Primary Care Association (MPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, all of which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, MPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, MPCA explains: A. The importance of 340B savings to Maine CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to the more than 104,842 low-income and 18,385 uninsured patients for whom data is available. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. 1 HRSA requested input on these in the first paragraph of the RFI summary. mepca.org C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Maine, CHCs routinely rely on 340B savings to increase access to care, expanding clinical services, reduce medication costs, and enhance care coordination. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. In other words, the 340B rebate model is an existential threat to the CHC mission. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income mepca.org steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Maines CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, CHCs rely mepca.org most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that Maines CHCs have had to cut services, pause hiring, and reduce wrap around supports, such as transportation, food closets, and other vital resources. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: mepca.org Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is especially true of Maines CHCs, who serve a higher than average number of Medicare beneficiaries in their clinics. All the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: o Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. o For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two- month period. This two-package or two-month standard should mitigate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. mepca.org Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: o Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just picking a few, and o Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment (at the end of this document) lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: o Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. o Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) mepca.org F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives such as a neutral clearinghouse model that achieve program goals without undermining CHCs financial viability or patient access to care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 mepca.org Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Darcy Shargo, Chief Executive Officer, at dshargo@mepca.org. Sincerely, Darcy Shargo, MFA Chief Executive Officer Maine Primary Care Association mepca.org Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1703First Choice Health Centers Inc2026-04-17T04:00Z45,338 chars
See attached file(s) April 14, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of First Choice Health Centers Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: First Choice anticipates losing approximately $300,000-$450,000 from entity-owned pharmacy operations and 25%-35% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. First Choice Health Centers, Inc. is a federally qualified community health center (FQHC) based in East Hartford, Connecticut with additional offices in Manchester and Vernon providing integrated care regardless of our patients ability to pay. Since 1996, First Choices patient population has grown from under 3,000 to more than 18,000 as we have added additional services and locations. We now have eleven service locations including two mobile health units to provide everything from dental services at schools in the area to podiatry services for low- income senior centers to pop up community vaccination clinics across the region. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For First Choice in particular, this means it will impact: First Choice serves 18,800 annually. First Choices current admin costs for your pharmacy program are approximately $565,000 It is expected that admin costs will increase by $178,000-$200,000 in order to manage the 340B rebate model, this is approximately a 35% increase in pharmacy cost. First Choice uses 340B funds to expand pharmacy access, provide dental services, prenatal services, and other needed health care services. The reduction in 340B funds or reduced profit margins could significantly impact patient services provided. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: First Choice Health Centers Inc provided $2,453,725 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: First Choice Health Centers Inc anticipates needing 1.5-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, First Choice anticipates an increase of $159,000-$200,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 First Choice anticipates with the in-house pharmacy and 340B contracts, we will need to hire 1.5 FTEs to manage the new 340B rebate model. With health centers margins already thin, this would be devastating to the Center and the patients it serves. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. First Choice anticipates it will cost the Center approximately $200,000 for the additional staffing related to the rebate model. This will impact patient care as already margins will be thinner and services to patients could be impacted. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Based on First Choices initial experience with the Medicare MFP program, it is expected that minimally a full-time equivalent and a half will be required to administrate the rebate model. Our current experience with the MFP program has been that rebates and appeal process is very time-consuming and requires significant monitoring. The Center will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. First Choice Health Centers Inc urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. First Choice expects upfront costs will range between $100,000-$225,000 to meet the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 18,800 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $55 000- annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure Based on our initial experience with the Medicare MFP program, pharmacy labor costs will increase significantly (adding 1.5 FTEs) which will further negatively impact tight margins. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. First Choice believes the initial upfront software costs could cost $50,000-$100,000 and include ongoing costs as well. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 25-40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 35 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 35 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Hartford and Tolland county with no affordable medication options. Over 17 percent of the U.S. population lives in 7 a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size First Choices in-house pharmacy utilizes the sliding fee program for patients prescription who qualify. This will most likely change with the implementation of the 340B rebate model. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations estimates, the initial upfront cost will be minimally $125,000 to purchase these 10 drugs under the proposed rebate model. Ongoing, our organization will see spending increases of up to 400% due to buying at wholesale price versus the 340B ceiling price. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, First Choice Health Center Inc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations and specialty services. Our dental program which relies on 340B to allow for expanded patient access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund 2-Behavioral Health Consultants, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,882 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. First Choice asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, 11 potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. First Choice Health Centers Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by up to 400%. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or deplete very limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $50,000- $100,000 annuallyfunds that are currently dedicated to expanded pharmacy access, dental services, prenatal care program, and hiring additional medical mid-level providers. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on First Choice, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays First Choice Health Centers Inc urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in significant annual losses. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 13 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion First Choice Health Centers Inc strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B 14 discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. First Choice believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. First Choice Health Centers Inc appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jeffrey Steele at jsteele@firstchc.org. Sincerely, Jeffrey Steele, President/CEO First Choice Health Centers Inc.
HRSA-2026-0001-1704(no commenter metadata)2026-04-17T04:00Z11,710 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Neshoba County General Hospital (NCGH), a community based Critical Access Hospital in Philadelphia, MS, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on NCGH that far outweighs any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which NCGH has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. NCGH has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, 2 more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that NCGH can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require NCGH to spend significant sums on new administrative costs. When we chose to participate in the 340B program, NCGH understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The new administrative costs that would be incurred are unknown, but any increase would be detrimental. NCGH operates on very thin margins, often at an operating loss. It is anticipated that we would require engaging additional consulting services to assist with the administrative burden along with hiring an additional full-time staff member to help manage the program. We would also incur new legal expenses as well. An estimated cost would likely exceed $250,000 annually. In fiscal year 2025, NCGH saved approximately $211,234.77 for the 8 drugs included. The expected new costs of the potential savings for the 340B program would place an additional loss on the operation. Staffing Impacts Under a Potential 340B Rebate Program. NCGH does not currently have the staff needed to comply with a Rebate Program. As mentioned above, NCGH would require hiring an additional staff member to efficiently comply with and monitor rebates in the proposed program. Additional training and software would be needed to manage the program. Multiple platforms would still require utilization and lead to duplicate data submissions and workflows. This would decrease efficiency and increase our operational complexity. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. NCGH has designed its technological systems and operational infrastructure in 3 reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our hospital operates multiple systems (EHR, outpatient dispensing, split billing, and TPA) that would require complex interfaces or multiple Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Provide estimated costs for system development, procurement, maintenance, or multiple manual data submissions. All of these lead to additional time and oversight to ensure compliance to the program. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our facility currently contracts with a 340B software solutions vendor to provide 340b operations along with a TPA for contract pharmacies. These companies will require additional claims-level data to be generated and reported to them based on the new rebate model data requirements. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force NCGH to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, which delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that NCGH will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The inconsistent rebate processing and risk of reduced manufacturer participation will cause decreased access to medications that our patient population relies on. 4 NCGHs 340B program is committed to serving our vulnerable population needs that provide access to life saving medications. We have experienced the closure of several independent pharmacies through the years limiting our patients access. We do have contract pharmacy partners that help our patients access medications at discounted rates. However, transportation issues exist for our patients to access those pharmacies, and we are evaluating ways to operate a community-based pharmacy on our campus to assist our vulnerable population with access to life saving medications. The rebate program jeopardizes our likelihood of proceeding with a pharmacy due to the administrative burdens and cash flow challenges it creates. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. NCGH reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon is not fully integrated with the Maximum Fair Price, requiring separate registrations and logins. This leads to additional training requirements and administrative burden. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 5 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on NCGH, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, NCGH respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow NCGH and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lee McCall CEO Neshoba County General Hospital, Philadelphia, MS
HRSA-2026-0001-1705Tennessee Primary Care Association2026-04-17T04:00Z20,793 chars
See attached file(s) 1 April 17, 2026 Chantelle Briton, Director Office of Pharmacy Affairs Health Resources and Services Administraon 5600 Fishers Lane Rockville, MD 20857 RE: Request for Informaon: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Briton: On behalf of the Tennessee Primary Care Associaons 30 Community Health Centers (CHCs) and the roughly 438,000 paents we serve, the TPCA appreciates the opportunity to comment on HRSAs Request for Informaon (RFI) regarding a potenal 340B rebate pilot. This leter supplements those submited by our states CHCs, which provide CHC-specific data in response to quesons raised in the RFI. Summary of Recommendaons: In short, TPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered enes (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negave financial impacts on CHCs and their paents. Summary of Comments: In these comments, TPCA explains: 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 A. The importance of 340B savings to Tennessee CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 298,000 low-income and 143,000 uninsured paents. B. How a rebate model will create massive cashflow, administrave, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potenally stop providing rebate drugs enrely resulng in avoidable harm to paents health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protecons that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creang harm? A. 340B savings underwrite a wide range of services that CHCs low-income paents rely on. CHCs serve as the backbone of the naons safety net. Naonally, in 2024 they served over 32 million paents, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these paents with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceucals regardless of their ability to pay. 340B savings are essenal to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured paents. Consistent with federal law3 and regulaon4, CHCs invest every penny of 340B savings into acvies that expand access to care for the underserved populaons they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Tennessee, CHCs rounely rely on 340B savings to support services such as transportaon and housing supports, same-day STD tesng, mobile clinics, school-based clinics, general denstry, optometry, medicaon-assisted treatment, intensive outpaent programming, and more. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reducons in savings will lead directly to reducons in care for CHC paents. As a result, the rebate model will undermine not only paent access to affordable medicaons, but also the broader system of care that CHCs have built to meet their paents needs. 2 Source: htps://data.hrsa.gov/topics/healthcenters/uds/overview/naonal 3 Secon 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 B. A rebate model will create massive cash flow, administrave, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs esmated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 mes more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a mul-step financing process; other steps (e.g., waing for drugs to be dispensed, meeng wholesaler payment deadlines) will sll force CHCs to borrow substanal amounts of cash. Comments submited by Tennessees CHCs will provide details on these financing needs. Also note that CHCs face substanal difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negave margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across mulple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negoated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incenvized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a paent because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulng from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potenally stop providing rebate drugs enrely resulng in avoidable harm to paents health. Reduction in services: As required by law and regulaon, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved 4 paents. Thus, every me 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their paents currently depend. The impacts will extend far beyond affordable pricing on medicaons, to all types of services underwriten by 340B savings (as described in Secon A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starng in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income paents. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that connue purchasing them under 340B expect to be forced to offer smaller discounts to their paents, for the same reasons. As a result, CHCs paents will face higher out-of-pocket costs, parcularly for high-cost therapies. This will oen lead to delays in starng or connuing treatment, and increased non-adherence, causing rates of avoidable complicaons and hospitalizaons to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerang how a rebate model will impact their operaons and paent access. These claims ignore the financial realies that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restricons have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., liing the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflaon-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that Tennessee health centers have cut back on mental health counseling, limited hours for outreach and community tesng, and deferred upgrades to clinical equipment. 5 D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrave burdens, reducons in services, harm to paents - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered enes. However, if HRSA insists on proceeding with a rebate model, it is crical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negoaon are commonly prescribed Part D medicaons, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negoaon. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protecons in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protecons into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to migate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough me to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no 6 addional administrave costs of running the rebate model shall be passed onto the covered enes. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently (we recommend that costs be billed and reimbursement is provided monthly). To assist HRSA in establishing this system, the Atachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a paent because they are expired, damaged, etc. Since the creaon of the 340B program, CHCs have been able to atribute certain undispensed drugs to 340B (with proper documentaon), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effecvely transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essenal to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in mul-unit packages. 5. Prohibion on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to idenfy drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflaon Rebate Program. Not always available to the covered enty. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered enes. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effecvely eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrave rules. There are mulple administrave decisions involved in establishing and operang a rebate model. HRSA should 7 establish a standardized set of procedures and meframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and melines for the same issue. (For example, in December 2025, each manufacturers established different rules and melines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplicaon at a ny fracon of the cost and administrave burden of a rebate model. As described above, a 340B rebate pilot would impose massive cash flow demands and administrave burdens on covered enes (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplicaon5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fracon of the cost and administrave burden as the rebate model, through the creaon of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash flow and borrowing challenges for CEs. Substanally reduce administrave burden on CEs. By reducing costs on CE, avoid the service reducons that would result from a rebate model. Provide manufacturers with the necessary deduplicaon data within the same 45-day meframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our naons primary care safety netand the ability of their 32 million low-income and uninsured paents to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reducons in the essenal services these paents rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, parcularly the financial effects a rebate model will have on CHCs, and how this will impact paents who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternaves -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or paent access to care. 5 Health Resources and Services Administraon 340B Program Noce: Applicaon Process for the 340B Rebate Model Pilot Program, August 1, 2025. htps://federalregister.gov/d/2025-14619 8 Thank you for your consideraon and for your connued commitment to the naons safety net. For further informaon, please contact CEO Angel Moore at angel.moore@tpca.org or Alisa LaPolt, Director of Health Policy, at alisa.lapolt@tnpca.org. Sincerely, Angel Moore, CEO Alisa LaPolt, Director of Health Policy Tennessee Primary Care Associaon 717 Spence Lane Nashville, TN 37217 9 Atachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and subming rebate requests. Monitoring which requests were paid. Dispung denials. Explaining to paents why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquision Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automacally entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporng requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (esmated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors). Time and effort from CHCs financial staff, including for: Evaluang cash flow needs and seeking credit opons. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenng the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1706Primary Care Development Corporation2026-04-17T04:00Z29,974 chars
See attached file(s) 39 Broadway, 31st Floor | New York, NY 10006 T: 212 437 3900 | F: 212 693 1860 | E: communications@pcdc.org | W: www.pcdc.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Application Process for the 340B Rebate Model Pilot Program Dear Director Britton, The Primary Care Development Corporation (PCDC) appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) request for information (RFI) on its potential rebate model under the 340B Drug Pricing Program. While the 340B Program needs to be improved to avoid waste and ensure that funds are utilized by the appropriate providers, PCDC wants to ensure that HRSA is taking into consideration the effect these changes would have on Federally Qualified Health Centers (FQHCs) or Community Health Centers (CHCs) and their ability to provide vital primary care services. As background, PCDC is a national non-profit organization and a US Treasury certified Community Development Financial Institution (CDFI). Our mission is to strengthen and build healthier communities through strategic primary care investment, expertise, and advocacy. For over three decades, PCDC has leveraged more than $1.6 billion and partnered with over 1,000 organizations, reaching more than 5,400 health care practice sites. Across the country, these strategic community investments have built the capacity to provide 5.6 million primary care visits annually, created or preserved nearly 20,000 jobs in low-income communities, and transformed around 3.2 million square feet of space into fully functioning primary care and integrated behavioral health practices. Our staff have also trained and coached thousands of health workers to deliver superior patient-centered care. PCDCs work has impacted more than 62 million primary care patients across 46 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, and American Samoa. Because PCDC finances CHC facilities and operations, we routinely evaluate provider financial revenue stability and risk. As a result, PCDC has a unique perspective on how policy changes, such as the proposed rebate model, affect the financial viability of safety-net providers and their ability to access capital for facility improvements, expansions, and modernization projects. The proposed rebate model introduces significant liquidity, operational, and administrative risks that could destabilize CHCs and reduce access to care for the patients that the program is intended to serve. The 340B Program and Primary Care High-quality, integrated, patient-centered primary care saves lives, and leads to better individual and community health. Primary care is the foundation of our health care system and is key to prevention, early detection, and treatment of diseases like diabetes, hypertension, and depression. Not only does affordable primary care reduce long-term health care costs, but it also keeps families healthy, keeps children ready to learn, and enables adults to work and pursue education. Despite these benefits, 2 primary care continues to be undervalued and underinvested, with only 5% to 7% of health care expenditures dedicated to primary care, accounting for approximately 35% of health care visits.i CHCs served nearly 34 million patients in 2024,ii while more recent data suggests that they serve 52 million patients, which is every one in seven Americans.iii This includes every one in five Americans living in a rural area, 90% of those considered to be low income, and 18% of those who are uninsured.iv As a result, CHCs are a major source of primary care and in some communities the only source of primary care, especially in areas designated as medically underserved by HRSA.v In addition to primary care and other medical services, CHCs provide integrated dental, behavioral health, pharmacy, vision, and other health services to Americas most vulnerable, medically underserved rural, urban, suburban, frontier, mountain, and island communities. Today, the health center workforce of 326,000 provides services at over 17,000 locations, ensuring patients receive the care they need and pay what they can based on a sliding fee scale.vi Despite serving large populations with limited resources, CHCs have demonstrated strong performance on national benchmarks for clinical quality while generating measurable savings for the broader health system.vii The 340B Program helps support CHCs ability to achieve such high standards for their patients by ensuring they can afford the prescription drugs they need to remain healthy. This program also helps CHCs provide vital primary care services because when patients cannot access their prescriptions, conditions like diabetes, hypertension, asthma, and depression go unmanaged and become more severe.viii PCDC is concerned about the impact the 340B Rebate Model Pilot Program will have on CHCs ability to receive the funds they need through the 340B Program without major changes or cuts to patient services because these health centers anticipate significant increases in operational costs from HRSAs proposal. National data has shown that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. For rural CHCs, these costs are even more devastating. Rural centers invest nearly 25% of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. For these reasons, PCDC believes that CHCs should be exempt from this pilot program. CHCs account for roughly 5% of the total 340B spending.ix Therefore, a pilot program can be tested and refined without including this small portion of the overall 340B Program. The Importance of the 340B Program to CHC Services The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. As small community-based organizations who lack the market power to negotiate discounts off the sticker price of all drugs, CHCs are a significant user of 340B drug discounts.x The 340B Program enables CHCs to serve the population the 340B Program was designed to help by making prescription drugs, including high-cost common yet lifesaving drugs like insulin, affordable or free for those who otherwise would not be able to afford them. Without discounted or free medications, a substantial portion of CHC patients up to 3 million or more would lose access to essential treatments.xi For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially 3 out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B Rebate Pilot Program. HRSAs 340B Pilot Programs Direct Effect on Primary Care Primary care not only reduces overall health care costs but is the only part of the health system that has been proven to lengthen lives and reduce population level health disparities. In conjunction, a higher number of primary care providers (PCPs) in a given region is consistently associated with significant gains in life expectancy.xii Every ten additional PCPs per 100,000 population is associated with a 51.5 day increase in life expectancy.xiii Further, an increase of just one PCP per 10,000 people can generate 5.5% fewer hospital visits, 11% fewer emergency department visits, and 7% fewer surgeries.xiv Increased access to primary care is specifically associated with significant reductions in mortality in some of the most common chronic diseases, including cancer, respiratory conditions, and cardiovascular disease.xv The 340B Program allows CHCs to reinvest savings to expand access to services that otherwise have no funding stream. This includes essential primary care services like behavioral health, substance abuse disorder (SUD) treatment, and dental care. xviii xvi With the number of uninsured expected to increase due to changes to federal investment in the Medicaid program, uncompensated care costs for CHCs are expected to increase by $7 billion annually,xvii underscoring the importance of the stability of the 340B Program. These changes could cause at least 34,000 CHC jobs to be lost and 1,800 health centers to close. Payment Timing and Potential Cash Flow Impacts for Covered Entities Under HRSAs 340B pilot program, drug manufacturers will be allowed to require safety-net providers like CHCs to purchase select 340B drugs at full price and then submit claims data to receive manufacturer rebates after dispensation.xix This could create significant liquidity and cash flow challenges for providers already operating on thin margins, resulting in vital primary care services potentially being delayed or made unavailable to millions of patients who rely on CHCs for their care. CHCs currently receive upfront discounts when purchasing covered outpatient drugs through the 340B Program. The payment structure that currently exists ensures that providers receive discounted prices and a consistent funding stream for the various 340B supported programs. Despite this, many providers operate on thin or negative margins, resulting in significant financial and administrative challenges. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative 5% in operating margins. This undermines their ability to meet essential obligations such as payroll and other operating expenses.xx From PCDCs direct experience providing business operations technical assistance to CHCs, we know health centers face a variety of cash flow issues to support their operations, primarily related to securing their full federally mandated Prospective Payment System (PPS) rate for covered services on a timely basis. Any further cuts to the timeliness and consistency of cash flow will further strain health centers capacity to maintain current service levels. The 340B Programs Financial Impact on CHCs As a lender that has worked with hundreds of CHCs, PCDC is intimately aware of the importance of the 340B Program to these providers and their financial stability. Safety net providers like CHCs cannot 4 finance expansion, renovation, or remediation of facilities from their revenue, reserves, or fundraising alone and must seek out loans and other sources of capital funding to do so. Commercial lenders are often wary of lending to safety net providers because the very nature of these providers mission is to provide care to all regardless of ability to pay, which can cause instability in their financial outlook. Even some CDFIs have been reluctant to finance safety net provider facilities. For lenders and other stakeholders, the savings that safety net providers secure through the 340B Program are seen as a stable component of their comprehensive revenues, demonstrating their financial sustainability. Health centers that borrow from PCDC to expand or improve their facilities and are enrolled in the 340B Program derive an average of 11% of their revenue from 340B, and for some it is as much as 40%.xxi The financial sustainability afforded by the 340B Program enables community lenders like CDFIs to offer more affordable interest rates and terms, often attracting additional private investment from traditional financing institutions. This ultimately reduces costs for the provider and opens financing avenues for future expansions and improvements. It also keeps safety net facilities open for their patients and communities, thereby reducing the total cost of care. The changes made under the proposed pilot program would effectively shift working capital requirements from manufacturers to safety-net providers by converting an upfront discount into a delayed reimbursement. For health centers operating on thin margins, the need to finance higher upfront drug costs could introduce liquidity challenges and increase financial risk. This can affect the risk calculation made by lenders and ultimately limit a health centers ability to access necessary capital.xxii It is not unprecedented for lenders to take notice when there are changes to the 340B payment structure. For example, when New York State proposed changes to the 340B Program in 2021, PCDC and others who lend to CHCs expressed concern about how these changes would affect the financial stability of 340B providers in the state. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. HRSA should evaluate how delayed reimbursements may affect provider liquidity and financial stability, particularly for smaller safety-net providers. Administrative Costs Under a Potential 340B Rebate Model Program Implementing the changes under this 340B Pilot Program would also add a significant administrative burden to CHCs or FQHCs. Health centers anticipate additional costs from increased staff time, especially from time that would otherwise be spent seeing patients that are instead spent on compliance with the Pilot Program. This will only add further operational and administrative burdens that will diminish the quality of patient care and exacerbate provider burnout and turnover. PCPs already face heavier administrative workloads than most other specialties.xxiii This is a contributing factor as to why many medical students are choosing not to enter primary care,xxiv worsening the workforce shortage among PCPs. This was highlighted during a 2024 hearing held by the US Senate Committee on the Budget on How Primary Care Improves Health Care Efficiency. One of the expert witnesses, Dr. Christina Taylor, Chief Medical Officer of Clover Health and the then President of the Iowa Medical Society, testified that there has been an unreasonable increase in federal administrative requirements and called for decreasing reporting and other administrative burdens that do not directly impact care.xxv 5 Under HRSAs pilot program, covered entities would be required to turn over a tremendous amount of sensitive data to vendors, including multiple data elements for each 340B drug claim.xxvi In an attempt to address manufacturers concerns about duplicate discounts, the pilot program would force health centers to divert even more scarce resources that could otherwise be spent on patient care or supporting a better patient experience on staff time that would be needed to navigate a complex 340B reimbursement system as laid out in this RFI. The costs associated with changes in how staff time is spent does not include how much it could cost for some CHCs to upgrade their technology to meet the new demands outlined in the pilot program. Many CHCs who operate on thin margins are unable to afford these costly upgrades. PCDC is intimately aware of these costs and has supported various health centers in financing upgrades to their technology to support both patients and providers. This includes a $1 million loan for the Connecticut based Community Health and Wellness Center (CHWC) of Greater Torrington, who used these funds in part for IT upgrades.xxvii There are also no accountability measures or clear penalties for manufacturers who withhold rebates. As a result, covered entities could be waiting months to years without seeing the rebate if manufacturers choose to withhold it, which could entail additional work just to attempt to receive the 340B discounts that they should otherwise be entitled to. In addition, each of the 10 drug manufacturers can submit their own reimbursement plan to HRSA. This means that 340B beneficiaries will have to navigate ten different reimbursement plans for each drug under this pilot program, placing a massive burden on health centers that already have limited staffing. PCDC urges HRSA to reconsider this policy and require manufacturers to comply with a uniform reimbursement plan. The lack of standardization and varying requirements from each manufacturer will likely force health centers to use multiple systems to manage and report the same data, thereby increasing both costs and operational burdens. The rebate program will also force covered entities to rework their policies and procedures, update documentation to receive the 340B rebates, and prepare for any potential audits. If HRSA were to establish uniform reporting standards and a standardized rebate process across participating manufacturers to reduce administrative complexity, it would make compliance a lot more manageable for CHCs and other small PCPs. Staffing Impacts Under a Potential 340B Rebate Model Program The workforce crisis has already affected every corner of the health care sector, with shortages in primary care being notably worse. By 2034, the national primary care physician supply is projected to fall short of demand by as much as 40,400 providers.xxviii Fewer medical graduates choose primary care than other specialties, partly because of disparate anticipated income levels.xxix The lack of sufficient funding for primary care impacts patients and providers, leading to inadequate access, low- quality care, and worse outcomes. It also leads to an overburdened and burnt-out workforce that loses experienced professionals and has trouble attracting new ones.xxx Given the current workforce shortage, CHCs and FQHCs often have trouble meeting increasing labor costs which jeopardizes their ability to recruit and retain staff. Nationally, the median CHC has an operating margin of 3.5%. As a result, the pilot program could have a serious impact on a health centers ability to operate by affecting just the 10 drugs under the proposed pilot program. Several CHCs estimate the cost of hiring additional staff to meet the demands of the pilot program could be between $30,000 to $200,000 annually. One Midwestern CHC, serving approximately 12,000 6 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. As a result, if the payment structure outlined in the pilot program were to become ubiquitous amongst the 340B Program and all covered prescription drugs, it could force many health centers to close. This would further exacerbate an already dire primary care crisis, result in fewer providers for patients and fewer potential jobs for medical students seeking to focus on primary care, and harm an already insufficient workforce pipeline for primary care. CHCs are required to provide patients who are under 200% of the federal poverty guideline sliding fee discounts for visits. CHCs also provide drug discounts to uninsured and underinsured patients thanks to the 340B Program. A rebate model would make this operationally impossible because CHCs rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the drugs will be listed at a Wholesale Acquisition Cost (WAC), making the price unattainable for the patient, the discount price unknown, and difficult to offer the included medications at a discount. Rebate Denials Given the additional administrative burden that a rebate pilot program would create for small PCPs, especially CHCs and FQHCs, a denial under the proposed rebate program should be handled in a swift manner. If a provider were denied 340B funds through the pilot program, it would cause additional administrative and budget burdens that such smaller providers would not have previously had to contend with. Being denied 340B funds could cause CHCs to lay off staff, downsize treatment availability, or cease operations altogether. For this reason, if HRSA decides to continue with an overhaul of the 340B system as laid out in the proposed pilot program, we urge them to include an exemption for PCPs like CHCs. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.xxxi Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to provide services in medically underserved communities. Conclusion PCDC thanks HRSA for the opportunity to respond to their RFI on their proposed 340B Rebate Model Pilot Program. PCDC supports all efforts to improve the 340B Program and ensure its integrity. However, this proposal creates compliance challenges that many providers would face. The financial 7 burden placed on CHCs would negatively impact the only source of primary care for millions of Americans. PCDC urges HRSA to: Exempt Community Health Centers and FQHCs from the rebate model pilot program, Establish uniform reporting requirements across manufacturers, Increase accountability by guaranteeing timely rebate payments and enforcing penalties for delays, and Evaluate the potential impact of rebate delays on provider liquidity and access to capital. We would be happy to follow up on any of these points if more information is useful. Please feel free to reach out to Aamir Mansoor, Director of Policy, at amansoor@pcdc.org, or Joe Telano, Assistant Director of Policy, at jtelano@pcdc.org for any further information. Sincerely, Aparna Mekala Chief Executive Officer Primary Care Development Corporation i National Academy of Science, Engineering and Medicine, Implementing High-Quality Primary Care Rebuilding the Foundation of Health Care, Chapter 3 (2021), available at https://www.nap.edu/read/25983/chapter/3; Patient Centered Primary Care Collaborative, Investing in Primary Care: A State Level Analysis, July 2019, available at https://www.pcpcc.org/sites/default/files/resources/pcmh_evidence_report_2019_0.pdf. ii National Association of Community Health Centers, Community Health Centers Provide Primary Care to Nearly 34 Million Patients, 2025, available at: https://www.nachc.org/community-health-centers-provide-primary-care-to-nearly-34-million- patients/ iii National Association of Community Health Centers, 52 million or 1 in 7 People Connected to Community Health Centers, found at: https://www.nachc.org/52-million-or-1-in-7-people-connected-to-community-health-centers/ iv Id v National Association of Community Health Centers, Investing in the Quality Clinical Care Community Health Centers Deliver, 2025, available at: https://www.nachc.org/investing-in-the-quality-clinical-care-community-health-centers-deliver/ vi Health Resources and Services Administration, 2025 Uniform Data System (UDS) Data, 2025, available at: https://hrsa.gov vii National Association of Community Health Centers, Investing in the Quality Clinical Care Community Health Centers Deliver, 2025, https://www.nachc.org/investing-in-the-quality-clinical-care-community-health-centers-deliver/ viii National Association of Community Health Centers, Policy Papers: 340B, January 2025, available at https://www.nachc.org/wp-content/uploads/2025/01/PolicyPapers_340B_FINAL_Jan2025.pdf ix 340B ASAP Coalition, Record 340B Program Growth Sharpens Calls for Reform, 2025, available at: https://www.asap340b.org/post/record-340b-program-growth-sharpens-calls-for-reform xi National Association of Community Health Centers, 340B Report Summary, 2022, available at: https://www.hcadvocacy.org/wp-content/uploads/2023/02/NACHC-340B-Report-Summary-June-2022.pdf xii Sanjay Basu, et al., Association of Primary Care Physician Supply With Population Mortality in the United States, 2005-2015, 179 JAMA Intern. Med. 506 (2019), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6450307/; Barbara Starfield, Leiyu Shi, & James Macinko, Contribution of Primary Care to Health Systems and Health, 83 Milbank Q. 457 (2005), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2690145/; Barbara Starfield, Primary care: an increasingly important contributor to effectiveness, equity, and efficiency of health services. SESPAS report 2012, 26 INFORME SESPAS 20 (2012), available at https://www.gacetasanitaria.org/en-primary-care-an-increasingly-important- articulo-S0213911111003876; Dartmouth Atlas Project, The Care of Patients With Severe Chronic Disease: An Online Report on the Medicare Program, 2006, available at https://data.dartmouthatlas.org/downloads/atlases/2006_Chronic_Care_Atlas.pdf; Robert M. Politzer, Jean Yoon, 8 Leiyu Shi, et al., Inequality in America: The Contribution of Health Centers in Reducing and Eliminating Disparities in Access to Care, 58 Med. Care & Research Rev. 234 (2001). xiii Sanjay Basu et al., Estimated Effect on Life Expectancy of Alleviating Primary Care Shortages in the United States, Annals of Internal Medicine July 2021, available at https://www.acpjournals.org/doi/10.7326/M20-7381. xiv Id xv Steven J. Kravet et al., Health Care Utilization and the Proportion of Primary Care Physicians, 121 Am. J. Med. 142 (2007), abstract available at https://www.amjmed.com/article/S0002-9343(07)01088-1/fulltext. xvi See note ix xvii National Association of Community Health Centers, NACHC Statement on House Passage of the One Big Beautiful Bill, 2025), https://www.nachc.org/nachc-statement-on-house-passage-of-the-one-big-beautiful-bill xviii Id xix Renne Zerbonia, Robert Hess, & Kristina Abdalla, HHS Unveils 340B Drug Rebate Pilot Program, Husch Blackwell, August 2025, https://www.huschblackwell.com/newsandinsights/hhs-unveils-340b-drug-rebate-pilot-program xx 340B Health, Manufacturer 340B Rebate Models Report, 2023, available at: https://www.340bhealth.org/files/340B_Health_MANUFACTURER_340B_REBATE_MODELS_Report.pdf xxi Primary Care Development Corporation, 340B and Health Center Financing Fact Sheet, 2023, available at: https://www.pcdc.org/wp-content/uploads/PCDC-340B-and-Health-Center-Financing-Fact-Sheet_Final.pdf xxii Id xxiii U.S. National Library of Medicine, PubMed Reference ID 28121687, https://pubmed.ncbi.nlm.nih.gov/28121687/ xxiv Celli Hortsman, Poor Prognosis: More Than One-Third of Burned-Out U.S. Primary Care Physicians Plan to Stop Seeing Patients, Commonwealth Fund, December 2024, available at: https://www.commonwealthfund.org/blog/2024/poor-prognosis- more-one-third-burned-out-us-primary-care-physicians-plan-stop-seeing xxv Christina Taylor. How Primary Care Improves Health Care Efficiency. US Senate Committee on the Budget. found at: https://www.budget.senate.gov/imo/media/doc/drchristinataylortestimonysenatebudgetcommittee.pdf xxvi See note xxx xxvii PCDC, PCDC Completes Financing for CT Health Center at Frontline of Opioid Crisis, October 2022, available at: https://www.pcdc.org/press-release/pcdc-completes-financing-ct-health-center-frontline-opioid-crisis/ xxviii AAMC, Physician Workforce Projections: The Complexities of Physician Supply and Demand, March 2024, available at https://www.aamc.org/data-reports/workforce/report/physician-workforce-projections xxix Press Release, Thousands Of Medical Students And Graduates Celebrate NRMP Match Results, The Match, March 20, 2020, available at https://www.nrmp.org/2020-press-release-thousands-resident-physician-applicants- celebrate-nrmp-match-results/; Martha S Grayson, Dale A Newton & Lori F Thompson, Payback time: the associations of debt and income with medical student career choice, 46 Med. Ed. 983 (2012), abstract available at https://onlinelibrary.wiley.com/doi/epdf/10.1111/j.1365- 2923.2012.04340.x. xxx Kriti Prasad et al., Prevalence and correlates of stress and burnout among U.S. healthcare workers during the COVID-19 pandemic: A national cross-sectional survey study, 35 E. Clinical Med. 100879 (2021), available at https://www.thelancet.com/journals/eclinm/article/PIIS2589-5370(21)00159-0/fulltext. Across New York State, primary care provider availability varies greatly, from 21 PCPs per 10,000 people to fewer than 10 PCPs for an entire county. County Health Rankings and Roadmap, New York State Health Factors, Primary Care Physicians, https://www.countyhealthrankings.org/app/new-york/2021/measure/factors/4/data (last visited December 7, 2021); Primary Care Development Corporation, New York State Primary Care Profile, June 2018, available for download https://www.pcdc.org/resources/new-york-state-primary-care-profile/. xxxi Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program
HRSA-2026-0001-1707Matthew Metsker · Lakewood, WA, United States2026-04-17T04:00Z7,469 chars
See attached file(s) CommonSpirit St Clare Hospital Lakewood, WA April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St Clare Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Clare Hospital is a 106-bed community hospital located in Lakewood, Washington. It is a full-service hospital providing 24/7 emergency services, heart and vascular care, orthopedic care, sleep medicine, and chronic pain management. The 340B Drug Pricing Program helps expand access to care and stretch scarce health care dollars to deliver high-quality care to vulnerable patient populations, including low income, uninsured, underinsured, and homeless patients, as well as those living in rural communities. In addition, the 340B Program allows hospitals to offset uncompensated care and provide expensive medications free of cost, while focusing on safe, cost-effective care that results in improved patient outcomes. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St Clare Hospital far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 . St Clare Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under- insured patients in our facility. St. Clare's outpatient infusion center provides comprehensive cancer care, chemotherapy, non-oncology infusion services, and support groups close to home. . Through Project Access, the Premium Assistance program helps cover premiums for insured individuals who cannot afford premiums, keeping them from becoming uninsured. . Copay assistance is provided for patients who meet the criteria and cannot afford complete copays . The Diabetes Assistance Program provides underinsured patients with insulin, monitoring equipment and supplies at no cost. . St. Clare obtains low-cost or free prescriptions for patients who have no insurance. . Programs address opioid addiction, including provision of free naloxone to patients and families that address local needs. . Financial support for patients who cannot afford transportation, DME, housing, and caregiver costs. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Matthew Metsker President St Clare Hospital St Clare Hospital Lakewood, WA CommonSpirit As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1708CENTRAL FLORIDA HEALTH CARE, INC.2026-04-17T04:00Z27,561 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Central Florida Health Care, Inc., I would like to express our appreciation to the Health Resources and Services Administration (HRSA) for extending the public comment deadline to April 20, 2026. This extension has been instrumental in allowing our organization to conduct a thorough analysis of the operational and financial risks that the proposed rebate model poses to Community Health Centers (CHCs). The 340B program is essential to Central Florida Health Care, Inc.s ability to provide care to the most vulnerable members of our community. The proposed shift in financial responsibility from manufacturers to the safety-net providers directly serving patients through a rebate-based model raises serious concerns about the potential destabilization of CHC pharmacy operations nationwide. National assessments from NACHC indicate CHCs will face significant and far- reaching impacts, including: I. Financial Impact (Based on 2026 and 2027 MFP drugs) Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog since initial purchase prices will be at WAC. The rebate creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model introduces significant uncertainty regarding the ability of CHCs to apply sliding-fee discounts at the point of sale. Under federal requirements, CHCs must provide sliding-fee discounts for all services within their approved scope of care. Consistent with this mission, CHCs offer reduced pricing on prescription medications to improve affordability for low-income patients. They are able to adjust the cost of care, including medications, based on factors such as a patients income and family size. CHCs are concerned that purchasing medications at full wholesale acquisition cost (WAC) will create significant cash flow challenges and potentially cause them to exceed credit limits with wholesalers, which could interrupt their ability to order medications. Although rebates are expected to be issued within about 10 days after data submission, the allowable timeframe for submitting that data could extend the total period between dispensing a medication and receiving the rebate. These financial pressures are further intensified for CHCs, such as Central Florida Health Care, Inc., which operate their own pharmacies and must maintain physical inventory purchased at WAC. Pharmacies typically turn over inventory multiple times per year, often around every 30 days. Depending on how quickly inventory moves and how frequently data is submitted, the time between purchasing medications and receiving corresponding rebates could stretch to several weeks or longer. Even with more frequent data submissions, CHC pharmacies may still experience a substantial delay between upfront purchase costs and reimbursement, placing additional strain on their financial operations. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. Although HRSA has indicated a 10-day timeframe for rebate payments, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers, and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers, and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. Lack of access to upfront 340B discounts, along with additional staffing needs and high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs Central Florida Health Care, Inc. will incur under a 340B Rebate Model I. Financial Impact (analysis conducted using 2026 and 2027 MFP drugs) A. WAC Exposure Current annual 340B acquisition cost is $3,437,292.60. Under the rebate model, projected WAC acquisition cost increases to $20,816,987.48, a seventeen-fold increase in required upfront capital. This level of capital outlay is incompatible with FQHC operating reserves and cash-flow capacity. B. Cash-Flow Exposure Assuming a 24-day rebate lag: Monthly WAC spend: $1,734,748.90 Monthly 340B-equivalent spend: $286,441.05 Monthly cash-flow deficit: approximately $1,448,307.90 This recurring deficit exceeds available reserves and jeopardizes the health centers ability to maintain operations. C. Sensitivity Analysis: Impact of Longer Rebate Lags To reflect real-world rebate delays, we modeled 30-, 45-, and 60-day lag scenarios using NACHCs standard factors: 24-day lag: $1,158,646.30 30-day lag: $1,448,307.90 45-day lag: $2,172,461.80 60-day lag: $2,896,615.80 Even under the best scenario, the health center must advance approximately $1,448,307.90 every month. A realistic 45-day lag pushes the deficit above $2,896,615.80 per month, far beyond the liquidity capacity of an FQHC. Any rebate denial converts WAC exposure into a permanent loss. D. Cash-Pay Exposure Total annual claims are approximately 26,576 of which 9,300 are cash-pay. Thirty-five percent of claims generate no reimbursement. For these patients, WAC cost is fully unreimbursed unless a rebate is successfully processed. Any delay, denial, or data mismatch results in permanent WAC liability. E. Opportunity Cost Lost PVP and prompt-pay savings total $1,717,401.30 annually. Capital carrying costs adds $3,122,547.90 annually. Total annual opportunity cost is approximately $4,839,949.20. This loss compounds financial strain created by WAC purchasing and rebate lag. II. Operational and Compliance Burdens The rebate model would require health centers to purchase all IRA affected drugs at full WAC, with 340B eligibility determined only after the medication has been dispensed. This fundamentally shifts both financial risk and administrative burden onto providers. To comply, CHCs would need to implement dual inventory systems, strengthen internal controls, maintain additional permanent audit trails, validate non-duplication through MDPNP processes, and absorb a significantly increased reconciliation workload. Even with these safeguards, the likelihood of rebate denials due to data discrepancies remains high and when denials occur, the health center will be left fully and permanently responsible for the entire WAC cost. III. Administrative and IT Requirements Compliance with the rebate model would demand substantial new infrastructure and ongoing operational support, including MDPNP aligned data exchange, Beacon platform integration, rebate submission workflows, error resolution processes, and continuous reconciliation and audit readiness. For Central Florida Health Care, Inc., this translates into a significant financial burden requiring at least three additional full-time employees (approximately $175,000 annually) and an estimated $150,000 to $200,000 in IT system upgrades for implementation and $100,000 annual maintenance are not marginal expenses; they represent a direct diversion of limited resources away from patient care and essential clinical services, ultimately weakening the health centers ability to serve those who need it most. IV. Impact on Patient Access At its core, a 340B rebate model puts medication access for the vulnerable patients served by CHCs at immediate and significant risk. For uninsured and underinsured individuals who depend on the affordability the 340B program provides, this approach could place essential, life-sustaining medications out of reach. Patients may be pushed into difficult and unnecessary choices such as switching treatments not because it is clinically appropriate, but because cost or availability leaves them no alternative. These forced therapeutic substitutions are not benign. They carry real clinical consequences, including medication nonadherence, delays in treatment, and worsening health outcomes. The risks are especially acute for patients managing multiple chronic conditions, who often have limited options and no convenient access to alternative pharmacies. When this rebate model was previously introduced, CHCs were already bracing for disruption, educating patients through in-pharmacy materials and prescription bag inserts. That level of preparation underscores just how immediate and far-reaching the impact would be, both operationally and personally. For patients who have worked for years to achieve stability on their current therapies, this is more than an inconvenience, it is a direct threat to their health, their safety, and their trust in the health care system. V. Recommendation Given the combined impact of: $1,7,34,748.90 million in required upfront purchasing 9,300 annual cash pay claims $1,158,646.30 to $2,896,615.80 monthly cash-flow exposure depending on rebate lag $1,717,401.30 annual or $143,116.77 monthly Loss of PVP and prompt-pay savings $3,122,547.90 annual or $260,212.32 monthly opportunity cost $175,000 New staffing annually $175,000 implementation costs and $100,000 annual maintenance for IT systems High risk of rebate denials Central Florida Health Care, Inc. strongly urges HRSA to protect FQHCs from the harmful consequences of a rebate-based program. A 340B rebate program represents a departure from the original intent of the 340B program which is to allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Central Florida Health Care, Inc. believes a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Central Florida Health Care, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mick Pickos, Chief of Pharmacy, mpickos@cfhconline.org. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Central Florida Health Care, Inc., I would like to express our appreciation to the Health Resources and Services Administration (HRSA) for extending the public comment deadline to April 20, 2026. This extension has been instrumental in allowing our organization to conduct a thorough analysis of the operational and financial risks that the proposed rebate model poses to Community Health Centers (CHCs). The 340B program is essential to Central Florida Health Care, Inc.s ability to provide care to the most vulnerable members of our community. The proposed shift in financial responsibility from manufacturers to the safety-net providers directly serving patients through a rebate-based model raises serious concerns about the potential destabilization of CHC pharmacy operations nationwide. National assessments from NACHC indicate CHCs will face significant and far-reaching impacts, including: I. Financial Impact (Based on 2026 and 2027 MFP drugs) Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog since initial purchase prices will be at WAC. The rebate creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model introduces significant uncertainty regarding the ability of CHCs to apply sliding-fee discounts at the point of sale. Under federal requirements, CHCs must provide sliding-fee discounts for all services within their approved scope of care. Consistent with this mission, CHCs offer reduced pricing on prescription medications to improve affordability for low-income patients. They are able to adjust the cost of care, including medications, based on factors such as a patients income and family size. CHCs are concerned that purchasing medications at full wholesale acquisition cost (WAC) will create significant cash flow challenges and potentially cause them to exceed credit limits with wholesalers, which could interrupt their ability to order medications. Although rebates are expected to be issued within about 10 days after data submission, the allowable timeframe for submitting that data could extend the total period between dispensing a medication and receiving the rebate. These financial pressures are further intensified for CHCs, such as Central Florida Health Care, Inc., which operate their own pharmacies and must maintain physical inventory purchased at WAC. Pharmacies typically turn over inventory multiple times per year, often around every 30 days. Depending on how quickly inventory moves and how frequently data is submitted, the time between purchasing medications and receiving corresponding rebates could stretch to several weeks or longer. Even with more frequent data submissions, CHC pharmacies may still experience a substantial delay between upfront purchase costs and reimbursement, placing additional strain on their financial operations. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. Although HRSA has indicated a 10-day timeframe for rebate payments, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers, and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers, and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. Lack of access to upfront 340B discounts, along with additional staffing needs and high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs Central Florida Health Care, Inc. will incur under a 340B Rebate Model I. Financial Impact (analysis conducted using 2026 and 2027 MFP drugs) A. WAC Exposure Current annual 340B acquisition cost is $3,437,292.60. Under the rebate model, projected WAC acquisition cost increases to $20,816,987.48, a seventeen-fold increase in required upfront capital. This level of capital outlay is incompatible with FQHC operating reserves and cash-flow capacity. B. Cash-Flow Exposure Assuming a 24-day rebate lag: Monthly WAC spend: $1,734,748.90 Monthly 340B-equivalent spend: $286,441.05 Monthly cash-flow deficit: approximately $1,448,307.90 This recurring deficit exceeds available reserves and jeopardizes the health centers ability to maintain operations. C. Sensitivity Analysis: Impact of Longer Rebate Lags To reflect real-world rebate delays, we modeled 30-, 45-, and 60-day lag scenarios using NACHCs standard factors: 24-day lag: $1,158,646.30 30-day lag: $1,448,307.90 45-day lag: $2,172,461.80 60-day lag: $2,896,615.80 Even under the best scenario, the health center must advance approximately $1,448,307.90 every month. A realistic 45-day lag pushes the deficit above $2,896,615.80 per month, far beyond the liquidity capacity of an FQHC. Any rebate denial converts WAC exposure into a permanent loss. D. Cash-Pay Exposure Total annual claims are approximately 26,576 of which 9,300 are cash-pay. Thirty-five percent of claims generate no reimbursement. For these patients, WAC cost is fully unreimbursed unless a rebate is successfully processed. Any delay, denial, or data mismatch results in permanent WAC liability. E. Opportunity Cost Lost PVP and prompt-pay savings total $1,717,401.30 annually. Capital carrying costs adds $3,122,547.90 annually. Total annual opportunity cost is approximately $4,839,949.20. This loss compounds financial strain created by WAC purchasing and rebate lag. II. Operational and Compliance Burdens The rebate model would require health centers to purchase all IRA affected drugs at full WAC, with 340B eligibility determined only after the medication has been dispensed. This fundamentally shifts both financial risk and administrative burden onto providers. To comply, CHCs would need to implement dual inventory systems, strengthen internal controls, maintain additional permanent audit trails, validate non-duplication through MDPNP processes, and absorb a significantly increased reconciliation workload. Even with these safeguards, the likelihood of rebate denials due to data discrepancies remains high and when denials occur, the health center will be left fully and permanently responsible for the entire WAC cost. III. Administrative and IT Requirements Compliance with the rebate model would demand substantial new infrastructure and ongoing operational support, including MDPNP aligned data exchange, Beacon platform integration, rebate submission workflows, error resolution processes, and continuous reconciliation and audit readiness. For Central Florida Health Care, Inc., this translates into a significant financial burden requiring at least three additional full-time employees (approximately $175,000 annually) and an estimated $150,000 to $200,000 in IT system upgrades for implementation and $100,000 annual maintenance are not marginal expenses; they represent a direct diversion of limited resources away from patient care and essential clinical services, ultimately weakening the health centers ability to serve those who need it most. IV. Impact on Patient Access At its core, a 340B rebate model puts medication access for the vulnerable patients served by CHCs at immediate and significant risk. For uninsured and underinsured individuals who depend on the affordability the 340B program provides, this approach could place essential, life-sustaining medications out of reach. Patients may be pushed into difficult and unnecessary choices such as switching treatments not because it is clinically appropriate, but because cost or availability leaves them no alternative. These forced therapeutic substitutions are not benign. They carry real clinical consequences, including medication nonadherence, delays in treatment, and worsening health outcomes. The risks are especially acute for patients managing multiple chronic conditions, who often have limited options and no convenient access to alternative pharmacies. When this rebate model was previously introduced, CHCs were already bracing for disruption, educating patients through in-pharmacy materials and prescription bag inserts. That level of preparation underscores just how immediate and far-reaching the impact would be, both operationally and personally. For patients who have worked for years to achieve stability on their current therapies, this is more than an inconvenience, it is a direct threat to their health, their safety, and their trust in the health care system. V. Recommendation Given the combined impact of: $1,7,34,748.90 million in required upfront purchasing 9,300 annual cash pay claims $1,158,646.30 to $2,896,615.80 monthly cash-flow exposure depending on rebate lag $1,717,401.30 annual or $143,116.77 monthly Loss of PVP and prompt-pay savings $3,122,547.90 annual or $260,212.32 monthly opportunity cost $175,000 New staffing annually $175,000 implementation costs and $100,000 annual maintenance for IT systems High risk of rebate denials Central Florida Health Care, Inc. strongly urges HRSA to protect FQHCs from the harmful consequences of a rebate-based program. A 340B rebate program represents a departure from the original intent of the 340B program which is to allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Central Florida Health Care, Inc. believes a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Central Florida Health Care, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mick Pickos, Chief of Pharmacy, mpickos@cfhconline.org.
HRSA-2026-0001-1709Boston Health Care for The Homeless Program2026-04-17T04:00Z5,603 chars
See attached file(s) BOSTON HEALTH CARE for the HOMELESS PROGRAM Date: April 17, 2026 RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, On behalf of Boston Health Care for the Homeless Program (BHCHP), we appreciate the opportunity to provide comments on the proposed 340B Rebate Model Pilot. BHCHP strongly urges HRSA to exempt Community Health Centers from participation in the 340B Rebate Model Pilot Program. The 340B program is essential to Community Health Centers (CHCs) and the patients we serve. For decades, it has enabled safety-net providers to stretch scarce resources and deliver comprehensive care to medically underserved populations. The proposed rebate model represents a significant departure frorn this structure, shifting financial and operational burden onto providers and introducing substantial risk to patient access, organizational stability, and program integrity. Boston Health Care for the Homeless Program's (BHCHP's) mission is to assure access to the highest quality health care for all individuals and families experiencing homelessness in our community. BHCHP is a 330(h)-funded community health center providing primary medical care, behavioral health and substance use disorder treatment, and wraparound services. BHCHP sees over 10,000 individuals experiencing homelessness annually. The revenue generated from the 340B program is directly reinvested back into our organization to subsidized uncompensated care and funds vital enabling services, which would not be possible without this program. Because of this program, BHCHP is able to provide specialized life-saving services to our patient population that would otherwise not be reimbursed through health insurance. The 340B Program allows BHCHP to optimize our resources to offer compressive care our patients deserve. Executive Summary of Impact BHCHP dispenses approximately 150,000 prescriptions annually to over 10,000 unique patients, including 70,000 prescriptions filled with 340B-purchased medications. If required to purchase medications at full retail cost under a rebate model, BHCHP estimates: Projected Cost lncreases: $7.2 million increase in annual drug inventory costs $1 million increase tied to 2026 MFP drugs $2 million increase tied to 2027 MFP drugs Financial Losses: BHCHP projects a potential annual loss of approximately $615,000 if the entire 340b program transitions to a rebate-based model. This estimate is based on approximately 42,000 claims with an observed denial rate of around 20%, consistent with claims processed through the MTF and comparable community health centers in the region. We also anticipate at least a $40,000 annual loss associated with sliding fee prescriptions, assuming a 20% rebate denial rate. An increase of up to four additional full-time equivalents (FTEs) may be necessary to support compliance, legal, auditing, and pharmacy functions. Specifically, the pharmacy department will require one FTE pharmacy technician and 0.5 FTE pharmacist to manage the ongoing regulatory changes and process adjustments. The finance department will need to add one FTE as well as one FTE in compliance and auditing roles. These additional FTEs will cost the program in excess of $360,000. The total projected financial loss could easily reach $1,000,000. Patient Access Impact The rebate model removes upfront 340B pricing, making it operationally difficult to provide medications at reduced cost at the point of care. BHCHP serves a highly vulnerable population, and affordability and access are often the deciding factors in whether a patient initiates or continues therapy. We dispense 150,000 prescriptions annually, and disruptions to pricing could directly affect adherence, chronic disease management, and health outcomes for the over 10,000 patients we serve. Sliding Fee Impact BHCHP provided approximately 4,000 prescriptions to uninsured patients through its sliding fee program. Under a rebate model, we would be required to front over $200,000 in additional costs annually for these prescriptions while waiting for rebate reconciliation. If even 20% of rebates are denied, BHCHP anticipates at least $40,000 in unrecoverable losses annually, directly impacting our ability to sustain this program. Cash Flow and Financial Impact Requiring upfront WAC purchasing would increase BHCHP's annual drug up-front spend by approximately $7.2 million. This level of financial exposure is not sustainable and would require reallocation of funds from critical services. Additionally, the lag between purchase and rebate payment creates prolonged cash flow strain, forcing CHCs to operate with significantly increased working capital requirements. Administrative Burden BHCHP estimates needing up to 4 additional full-time employees to manage the operational complexity of a rebate model, including compliance monitoring, legal oversight, auditing, and pharmacy operations. These represent permanent increases in overhead that divert resources away from patient care and clinical services. Conclusion The proposed rebate model introduces significant financial risk, administrative burden, and barriers to patient access. For BHCHP, the model would undermine our ability to provide affordable medications and sustain essential services. We respectfully urge HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Sincerely, De se Nueces, M.D., MPH Interim Chief Medical Officer Boston e. th Care for the Homeless Program (BHCHP)
HRSA-2026-0001-1710Legacy Health2026-04-17T04:00Z23,995 chars
See attached file(s) Legacy Health 1919 N.W. Lovejoy St. Portland, OR 97209 503.415.5600 phone 503.415.5777 fax April 17, 2026 Administrator Thomas J. Engels Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Legacy Health is a nonprofit health care provider serving Oregon and Southwest Washington through an integrated network of care providers in over 80 primary care, urgent care, and specialty care clinics, as well as six community-based, nationally recognized hospitals. Five of our hospitals participate in the 340B Drug Pricing Program as covered entities. We appreciate the opportunity to submit comments in response to the Department of Health and Human Services (HHS) Request for Information (RFI): 340B Rebate Model Pilot Program. This RFI asks whether the Health Resources and Services Administration (HRSA) should replace the long-standing upfront discount model under the 340B program with a rebate model. As explained below, Legacy strongly believes that any rebate model would create significant cost and administrative burdens for covered entities that would far outweigh any potential benefits. We urge HRSA to preserve the upfront discount mechanism, which has worked successfully for decades and which hospitals like ours have relied on to fulfill the purpose of the 340B program. The RFI encourages commenters to provide supporting facts, research, and evidence in their responses to the questions posed. Despite limited information about how the rebate model will be implemented, we have made every effort to provide thoughtful, detailed responses based on our experiences and our understanding of how the prior proposed rebate model would have functioned. 2 Administrative Costs and Staffing Impacts Under a Potential 340B Rebate Program. Any rebate program would impose significant administrative requirements and costs on covered entities, diverting critical resources and undermining the programs statutory intent. When Legacy chose to participate in the 340B program, we anticipated reasonable administrative costs and structured our staffing, operations, and program administration around an upfront discount model. Shifting to a fundamentally different discount mechanism would require new resources, imposing unanticipated additional costs and administrative burdens on our hospitals. Under a 340B Model Rebate Pilot Program, Legacy would incur both one-time startup costs and ongoing operational expenses. Startup activities for preparing to submit and monitor retail prescription data would require approximately 80 staff hours to develop new tools, reports, and carveouts, with an additional estimated 10 hours annually to update and maintain those tools and reports. Another 80 hours at least would be required when Part B claims are included in the program. On an ongoing basis, the rebate model would require roughly 10 to 20 additional staff hours per week hours increasing as drugs are added each year to monitor, analyze, and reconcile rebate data using available reports from the Medicare Transaction Facilitator, the 340B third-party administrators, the 340B rebate model platform(s), and internal banking information for electronic funds transfers. Reconciliation would require accessing and downloading reports from the multiple separate platforms housing the specific data elements needed to perform reconciliation. If manufacturers can choose their own rebate model data platforms and specific data submission policies, the process will become infinitely more onerous and resource intensive. Experience with the Beacon MFP portal already demonstrates the struggle of reconciling rebates to payment. Since the Beacon MFP platform reports do not include prescription or provider NPI numbers, it is extremely difficult to link the referenced Beacon claim identifier to a specific prescription to verify the rebate amount. Rebates are also generated per National Drug Code (NDC), but at high-volume pharmacies, the NDC may be dispensed multiple times in one day, making it harder to reconcile the payment amounts. Regarding data submission, Legacy would work with its 340B third-party administrators to automate data submission where possible, but at this time it is unknown what the additional costs for that work and service would be. Without strict governance over data submission standards, covered entities and their 340B administrators may need to develop multiple extracts to meet disparate manufacturer claims specifications. As more manufacturers are added to the program, complexity would increase, increasing administrative costs. In truth, the increase in administrative burden for our covered entities would be driven by the need to implement rebate reconciliation workflows and not 3 primarily in the data submissions themselves. Rebate reconciliation is labor-intensive work that requires resources. Rebate dispute resolution is another resource-intensive task. Based on experience with the Beacon MFP and 340B ESP platforms, claim dispute submissions can take 30-60 minutes each to complete. Manufacturers often ask for images of the relevant invoices. Any purchases for other NDCs included on those invoices must be redacted before the invoice can be uploaded. Some manufacturers also ask for additional claim level detail, which takes additional time to find, as well as to review and redact Protected Health Information (PHI) where necessary to comply with the Health Insurance Portability and Accountability Act (HIPAA). The non-standardized dispute process, the additional documentation that must be submitted, and the regular monitoring for communication back from the manufacturer all add to the administrative burden. Therefore, the biggest cost driver for managing a rebate model would derive from the need to hire additional staff to manage new rebate reconciliation-related tasks. Legacy currently lacks the staff needed to successfully manage a rebate program and would face additional operational costs as a result. Legacy would require the addition of at least two new full- time employees a dedicated 340B analyst and a business analyst to avoid diverting existing staff from their current duties focused on program compliance and performance. HRSAs estimate that a rebate model would require only five additional hours of staff time per week significantly underestimates the real-world effort required. In practice, reconciling data across multiple platforms, coordinating with third-party administrators and manufacturers, and resolving delayed or denied rebates would require significantly more time and specialized expertise. The new FTEs needed to support a rebate model would be responsible for a wide range of new or expanded activities for both the 340B and Medicare Drug Price Negotiation (MDPN) programs, including rebate reconciliation, internal and external reporting, audit support, manual data submission where automation is not possible, and rebate denial management. Unlike the long-standing upfront discount model, a rebate model would require additional program monitoring points to ensure that data submissions and rebate management are processed as expected. For example, monitoring would include checking that claims are submitted and accepted within the manufacturer-required submission timeline to avoid denials. Further, it would be imperative to track time from purchase to rebate payment as a measure of cash flow impact. Any delays or substantial reductions in expected rebate payments that create significant accounting variances would have to be explained to our finance department as budget impacts, which adds yet more stress on the workflow. Additionally, it would be imperative to monitor the percentage of rebates denied 4 to understand true Wholesale Acquisition Cost (WAC) exposure and overall budget impact. Finally, changes in manufacturer policies would have to be monitored to ensure that internal processes keep up with changing requirements. Using the last six years of contract pharmacy restrictions as an example, without strict HRSA-mandated standards, we would expect manufacturers to develop different policies and require use of different platforms for managing the rebate process, thereby creating additional burden on our already limited resources. In all, the expense to benefit ratio does not pencil out for a rebate model. The cost of the two FTEs needed to support rebate reconciliation paired with the financial impact of the Inflation Reduction Act (IRA) Maximum Fair Price (MFP) implementation will negate the 340B savings achieved for the 25 drugs included in the model pilot. In summary, if the intent of this pilot is to serve as a testing ground for making the rebate model the new future standard for all drug purchasing through the 340B program, then it is already clear that the administrative burdens on covered entities would be unmanageable. Such a future state would adversely impact the financial viability of our hospitals and the patients who depend on us for their health. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Legacy has designed our technological systems and operational infrastructure in reliance on an upfront discount model. As stated, any shift to a rebate mechanism will force us to incur significant labor costs to change those systems. As explained above, complying with the data demands of a rebate model would require Legacy to draw on multiple internal systems and would involve significant manual work. Legacy operates a single EMR and a single retail pharmacy platform but manages multiple 340B third-party platforms. While Legacy maintains data extracts that could potentially be used for rebate model data submissions, those extracts would need to be updated to comply with rebate model data specifications. Any changes to data extracts require the involvement of our Data Governance team and multiple rounds of testing with the vendor. Additionally, a rebate program would require new reconciliation tools, including a tool to track claims, rebate status, remittances, and payments as well as updates to existing audit tools and workflows. Furthermore, providing medical claims data under a rebate program would be particularly challenging for Legacy. Drugs in our billing system do not always appear on specific claim lines, and billing varies based on encounter type and charge rules, providing inconsistent data points to pull from. As a result, complying with rebate data requests for facility- administered medications would require significant manual intervention, validation, and ongoing testing of data feeds and claims submissions. It is difficult to estimate how many labor hours it would take to build the tools and make the potential billing and other system 5 changes needed to support efficient data submission and reconciliation efforts. Labor hours also depend on how many different manufacturer platforms would be in play. Data Collection by Covered Entities. Under the previous rebate model, both HRSA and drug manufacturers stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals, insisting that hospitals already provide the required information through 340B ESP. That assertion is inaccurate. Data submission burden can be minimized if 340B third-party administrators and the manufacturer claims platform(s) can support automated data submission and intake, respectively, or if the administrators create canned reports that can easily be uploaded to the manufacturer-specified portal(s). We must remember, however, that not every administrator has the necessary capability and that the covered entity is still responsible for manually pulling and submitting data in cases where there are issues with the reports or the data feed. Also, experience has shown us that data validation is still necessary for automated data submission. For Legacy, two of three third-party administrators support automated data feeds to 340B ESP, but one, a contract pharmacy platform, does not. It is common for covered entities to have to utilize multiple 340B platforms to manage their programs. Certain contract pharmacy arrangements require use of a specified third-party vendor not of the covered entitys choice. This requires staff to be skilled at navigating multiple systems. The burden of data submission will also depend on how many different manufacturer platforms and variations in policies will be allowed under the rebate pilot model. Managing program elements across multiple disparate systems and policies increases administrative burden significantly. Further, to be clear, though the labor hours spent on data submission may not be too burdensome, the new labor hours required to audit claims submissions to ensure they were accepted, to investigate why claims were rejected, and to submit claim denial disputes would be extremely burdensome as demonstrated through our work with 340B ESP and Beacon MFP. We expect that the 340B rebate model platform(s) would be as or more labor-intensive to work with and require the same focus on claims status monitoring and claims denial management. This work effort would be ongoing and increase over time as more drugs are added to the model. Finally, in its Information Collection Request, HRSA states that the data required under a potential 340B rebate model would be comparable to data that covered entities already collect and maintain through existing third-party vendor relationships, as well as data currently provided to manufacturers for certain contract pharmacy policies, in-house pharmacy claims requests, and claims for drugs dispensed under the Medicare Drug Price Negotiation Program. HRSA therefore asserts that the associated burden would not be 6 significant. Legacy respectfully disagrees. Complying with a rebate model would not only extend our existing data collection activities but also fundamentally expand the scope of work required. In addition to the already demanding requirements of maintaining 340B program compliance, a rebate model would require covered entities to assume new responsibilities related to tracking, validating, and reconciling manufacturer rebates, along with significant investment in staff training and expertise to navigate multiple platforms. Overall, these requirements would create a significant ongoing operational burden that is not reflected in HRSAs assessment. We cannot overemphasize that without clear standardization and appropriate enforcement, covered entities may be required to operate across multiple manufacturer-specific platforms and policies without the opportunity to influence system design despite bearing the operational burden. The proposed rebate model also presents serious data security and patient privacy concerns. Requiring covered entities to transmit sensitive patient data to third-party vendors that may not be subject to the confidentiality and privacy requirements of HIPAA creates serious compliance and liability risks. Covered entities are fully accountable under HIPAA, while manufacturers and their intermediaries are not held to the same standards. For example, under current HIPAA rules, if a manufacturer were to wrongfully disclose PHI submitted through a rebate model, the covered entities would have to bear the burden of notifying patients. Addressing this imbalance requires shared responsibility for safeguarding patient information, including enforceable requirements that manufacturers and their agents indemnify and hold covered entities harmless in the event of a privacy or security breach attributable to their actions or systems. HRSA should, at a minimum, require strong cybersecurity standards, hold manufacturers accountable for data breaches, and require meaningful protections and accountability across all third-party platforms involved in rebate processing. Payment Timing and Potential Cash Flow Impacts. We understand that HRSAs proposed rebate policy would apply to 25 drugs, 15 more than the version announced in 2025. As a result, covered entities would be required to purchase a greater number of drugs at prices that are significantly higher than the 340B price in most cases; hold those drugs in inventory until they are dispensed, which may take weeks or months; submit required claims data; and then wait to receive a rebate reflecting the difference between the higher price and the 340B price. Even if rebate payments are made within a 10-day period, hospitals would still be forced to extend interest-free loans to manufacturers during the dispensing period and until rebates are received well after dispensing. This delay would tie up critical financial resources that would otherwise be available to support patient care. 7 Previously, HRSA has credited drug manufacturers claims that they would, in most instances, pay rebates before wholesaler invoices for the WAC amount are due; however, this assumption does not reflect operational realities. Legacy pays wholesalers on a fixed schedule, and rebate payments may not align with our current obligations, especially if payments are delayed, disputed, or reduced. There is also no guarantee that rebates would consistently be paid within 10 days. Even if a 10-day payment requirement were imposed, purchase-to-dispense lag times, Electronic Fund Transfer processing delays, reconciliation challenges, and the risk of disputed or incorrect rebate amounts could result in shortfalls, leaving hospitals responsible for full payment without timely reimbursement. Adverse Impacts of Additional Costs and Burdens. As stated previously, the additional costs and administrative burdens associated with a rebate model would negate the savings achieved for the 25 drugs to be included in the pilot. Our payor mix is >65% Medicare and Medicaid. The IRA MFP implementation has already significantly impacted 340B savings for these drugs. Implementing a rebate model that requires hospitals to hire additional staff or divert existing resources to maximize rebate recovery efforts would further erode those savings. As a health care provider committed to serving our community, we support access to care for all patients. In 2025 alone, Legacy provided over $700 million in community benefit, which included over $660 million in unreimbursed care for those covered by Medicare and Medicaid, as well as underinsured and uninsured patients. At the same time, rising labor and supply costs, stagnant reimbursement rates, and broader uncertainties in healthcare have required Legacy to make difficult decisions to maintain sustainability and continue delivering high-quality care to our patients. Despite ongoing operational improvements and more than 200 position reductions, including loss of two 340B auditors, over the past three years, Legacy has been forced to close or scale back services due to financial constraints. These service closures and changes impacted five Legacy clinical services, including vison care, pain management, and outpatient cardiac and pulmonary rehabilitation and physical therapy services, as well as the closure of six urgent care locations. Reliance Interests. Legacy has relied on HRSAs longstanding use of upfront discounts when designing our operations, staffing, third-party contracts, and financial planning. 340B savings are built directly into our drug budget and overall operating assumptions and play a significant role in cash-on-hand projections, annual savings expectations, and long-term planning for patient services and infrastructure needs. A shift to a rebate model would disrupt these settled reliance interests created by the previous policy and significantly 8 increase operating costs. The lack of assurance that rebates would be paid fully and on time would further reduce financial predictability. Given the significant and unnecessary costs such a change would impose on 340B hospitals like ours, there is no justification for transitioning to a rebate model, even in pilot form. Efforts to Avoid 340B/MDPNP Duplicate Discounts. HRSA has already acknowledged that drug manufacturers have other options available to address concerns related to de- duplication between the 340B and MDPN programs. Given the significant costs that a rebate model will impose on our hospitals, Legacy urges HRSA to pursue other options. Any other decision would inappropriately prioritize the interests of drug manufacturers over those of covered entities, the patients we serve, and communities that depend on hospitals to provide essential care. We support the American Hospital Associations position that viable, lawful, and less burdensome alternatives exist to achieve the same goals a rebate model is intended to address. Specifically, we urge HRSA to adopt a government-sanctioned, independent national 340B claims clearinghouse, overseen by HRSA and developed with input from relevant stakeholders, to support 340B/MDPNP de-duplication, program integrity, and related goals, rather than implementing a rebate model. A national clearinghouse would provide necessary protection and establish a simplified, automated process for covered entities to submit de-identified claims data from public and private payers. This would also increase transparency and ensure all data submissions comply with HRSA requirements rather than manufacturer-imposed standards. At a minimum, we ask that HRSA provide a meaningful explanation as to why a third-party clearinghouse would not be feasible or would impose greater costs than a rebate model. Of note, our 340B program team is reconciling and de-duplicating 340B/MDPN discounts as new regular work. No drug company has raised de-duplication issues with us to date. We reconcile claims data downloaded from the Medicare Transaction Facilitator against data on 340B eligible claims from our third-party administrators. We identify which claims qualified as both 340B and MFP and then log into the Beacon MFP portal to de-duplicate the claims. We have already incurred new administrative burdens by reconciling MFP rebates. As stated before, rebate reconciliation across multiple platforms is difficult and labor-intensive. Adding another rebate program for our already overburdened 340B program team to manage is unsustainable. In conclusion, Legacy would like to reiterate that the costs associated with any rebate program would far outweigh any expected benefits. We urge HRSA to reconsider this approach and instead adopt a neutral, third-party clearinghouse. 9 If HRSA decides to move forward, covered entities must be given the opportunity to comment on the specific design and details of any proposed program. While we have tried to provide as much detailed input as possible, we have done so without exact knowledge of the drugs that will be included in a rebate program and other key details, including data required, possible grounds for denial of rebates, dispute resolution processes, and other guardrails. Failing to allow additional comments on the specific features of the program would effectively ignore important considerations and create new complexities moving forward. We appreciate your consideration of these comments and look forward to working with HRSA on this important program, which has serious implications for the millions of patients across the country who rely on the 340B Program. Sincerely, Kecia M. Kelly, DNP, RN Senior Vice President, Chief Nurse and Philanthropy Officer Legacy Health Kecia M Kelly
HRSA-2026-0001-1711Monument Health2026-04-17T04:00Z35,479 chars
See attached letter. MONUMENT HEALTH Rapid City, Custer, Sturgis, and Lead-Deadwood Hospitals l 605-755-1000 l www.monument.health April 15, 2026 Via Online 5ubmission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for Information ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by Monument Health, responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Monument Health and other Covered Entities. With 4 hospitals participating in the 340B program, Monument Health is a core component of the health care safety net in western South Dakota. We provide community-based health care in more than 20 communities, covering an area over 400 square miles. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Monument Health participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Monument Health's 340B Program participation enables us to commit an additional $105 million dollars per year to the community safety net population we serve. Monument Health also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Monument Health wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. Fundamental Questions Presented by Any 340B Rebate Model In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of "consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,"1 Monument Health submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. Why Does a Manufacturer's Interest in Deduplication Outweigh MONUMENT HEALTH'S Interest in Caring for lts Patients? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Monument Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval,5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Monument Health when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? How Could HRSA or Monument Health Trust Manufacturers to Faithfully Adjudicate Covered Entities' Rebate Requests? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Monument Health. We have seen our contract pharmacy savings adversely affected, which seriously undermines an important source of revenue that supports our nonprofit, community-based mission. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Monument Health pharmacy, manufacturers have denied ALL our MDPNP refund requests because they assert without clear evidence that the drug was replenished with 340B inventory. This means we have paid a higher price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers' agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of 191 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 1d. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (2001). these concerns,' we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process they've developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an "Identify as 340B" button within Second Sight's Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. There is no such button for covered entities to click "Not 340B." HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Monument Health trust them to give up money they are not entitled to? What Tools Would HRSA Make Available to Monument Health to Monitor Manufacturer Compliance? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of Monument Health's eligible patient policy; clearly, they believe it is important to know what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational functioneligibility decisionsfrom Covered Entities to manufacturers. Monument Health would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. What Commitments Does HRSA Expect Manufacturers to Make in Exchange for the Privilege of Rebate Model Approval? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of Monument Health's contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. What Steps is HHS Willing to Take to Ensure Manufacturers Meet their 340B Program Obligations? Monument Health has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self- help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Monument Health's interest in 8 Letter from J. DeCubellis President & CEO of America's Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter-to- CMS.pdf) (last accessed Apr. 9, 2026). 9 42 U.S.C. 256b(a)(1). knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. What Statute or Regulation Permits Monument Health to Disclose Patients' Protected Health Information to Drug Manufacturers Operating Rebate Models? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? Would Drug Manufacturers Be Permitted to Use Monument Health's Data for Anything Other than MFP Deduplication? If So, What Statute Authorizes HRSA to Require This of Monument Health? If So, Will Manufacturers Be Expected to Reduce the Price on Our 340B Accounts Below the Ceiling Price to Compensate Monument Health for the Value of Its Data? One of Monument Health's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA- funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Monument Health for that value? Isn't this the exact harm the Takings Clause prohibits? What Changed Between 2024 and 2026 That WOULD JUSTIFY HRSA's Change in Position? Monument Health believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Monument Health urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRG's use of this so-called disclosure, see the last page of this document: HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. What Law or Policy Would Justify Extending a Rebate Model to All Payers Instead of Limiting it to Medicare Part D? From Monument Health's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Monument Health's patient population, we serve many other patients, including patients with no coverage at all. Requiring Monument Health to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. What Law or Policy Would Justify Extending a Rebate Model to Physician-Administered Drugs? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician- administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. Would Drug Manufacturers' Rebate Model Proposals and Any Commitments to HRSA Be Available to Monument Health? If Not, Why Not? As noted above, Monument Health firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. lf these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Monument Health urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. If a Rebate Model Relies on a Manufacturer-Selected Intermediary, What Terms May the Intermediary Impose on Monument Health? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Monument Healthto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates.1z Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe 12 See 45 C.F.R. 164.501. scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. Will HRSA Increase the Number of Manufacturer Audits It Performs Each Year to Include All Manufacturers Operating a Rebate Model AND THEIR COMPLIANCE WITH SUCH MODELS? If Not, Why Not? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers' noncompliance rate so high, Monument Health is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? Why Is a Rebate Model Preferrable to a Government-Backed Clearinghouse or Other Neutral Adjudicator? Monument Health hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Monument Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experience and contribute to the development of government-backed systems that advance legitimate program goals. Responses to HRSA's Request for Information 1. Costs to covered entities a. Current Administrative Costs Under the Upfront 3408 Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Monument Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). b. Administrative Costs Under a Potential 3408 Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing impacts under a Potential 3408 Rebate Model Pilot Program Implementation of a rebate-based model would require Monument Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. d. Systems and Infrastructure for Implementation of a Potential 3408 Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. We estimate that additional full-time staff and new software would cost an additional +$200k yearly. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Monument Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Monument Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 1. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Monument Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 2. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Monument Health would be required to generate new claims- level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Monument Health's operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. Conclusion Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Monument Health and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on itare at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Paulette Davidson President & CEO, Monument Health 2018 2019 2020 2021 2022 2023 2024 2025 2026 E: Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price 5 5 5 2018 2019 2020 2021 2022 2023 2024 2025 2026 Appendix: Summary of HRSA's Audits of Drug Manufacturers HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 O Clean Audits Audits with Findings FINDING: FAILED TO OFFER 340B PRICE l Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 5 3 2 2 4 2 3 2 3 1 4 4 1 2 2018 2019 2020 2021 2022 2023 2024 2025 2026 Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data 5 3 4 1 4 1 4 1 2 3 4 1 5 2018 2019 2020 2021 2022 2023 2024 2025 2026 FINDING: OVERCHARGED COVERED ENTITIES FINDING: FAILED TO SUBMIT PRICING DATA FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 5 2020 5 2021 I Manufacturer Determined Ceiling Price for New Drugs 2022 s Manufacturer Failed to Determine 2023 4 340B Ceiling Price for New Drugs 2024 2025 INI=IMINIEM 2026
HRSA-2026-0001-1712Riggs Community Health Center2026-04-17T04:00Z34,556 chars
On behalf of Riggs Community Health Center (Riggs), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. An attached letter is provided with details of our request to exempt Community Health Clinics (CHCs) from the Rebate Model Pilot due to the significant one-time and ongoing costs. community heaitTi center Ins pioveig Health. Improving Lives. April 14, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Riggs Community Health Center (Riggs), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Riggs anticipates an annual loss of $30,000 to $90,000 from entity-owned and contract pharmacy operations and a 10-20% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. Our estimates indicate a $150,000 increase annually to manage this pilot with an additional $75,000 capital outlay to pay for upfront full-priced medications. Riggs Community Health Center serves over 20,000 patients across a 10-county northwest central Indiana region, including Lafayette, Lebanon, and Frankfort and their surrounding communities. In 2024, the center completed over 70,000 patient visits across its locations. Riggs offers a range of services, including primary care for adults and children, prenatal and specialty women's health, laboratory services, integrated behavioral health, chiropractic, dental care, and retail pharmacy services. We accept Medicaid, Medicare, and most forms of commercial insurance, and provide an income based sliding fee for underinsured and self-pay patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. CONYIVailv .110I C.I. FOHC Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com RATIEN1CEN1ERED MEDICAL HOME r community rrTi! rge!:,, The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Riggs in particular, this means it will impact by: Eliminating 500 charity care (reduced cost for uninsured patients) scripts for these medications for the 2026 medication list alone and growing substantially as 2027 and 2028 lists are added. Causing poorer clinical outcomes for uninsured patients due to their inability to purchase these medications at steep discounts, particularly Eliquis, Farxiga, Januvia, and Jardiance. Increasing $150,000 of annual recurring costs to manage the program. Requiring an outlay of $75,000 of full-priced medication inventory. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients rnanaging multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence C4.1.0.1 FOHC.. Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENT.CENTERED MEDICAL HOME communi!zrovu lt,ii, lcn,e pp oo,t ne g,r ,ver of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) <01.141).1V AWN COOTO FQHC_. Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PAT1ENTCENTERED MEDICAL HOME community health center affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirernents and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Riggs provided $833,621 in medical/dental sliding fee discounts and $788,970 in uninsured patient prescription discounts in 2025. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Workforce Impact 041....tlelif CI1011. FoHic Riggs Community Health Center 1716 HartfOrd St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.corn PATIENT.CENTERED MEDICAL HOME community healtTi center Improving Health IrnproLinyIives Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Riggs anticipates needing 0.6 additional FTE and increasing 0.45 FTE workload to Pharmacy/Finance/1T team members to account for all of these additional burdens with this rebate model. Riggs urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 unique 340B TPAs and 31 retail pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 31 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 7 Internal NACHC assessment (99 responses). 04600,014IIIF .1NT/. FOHC Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax. 765-742-2700 www.riggshealth.com PATIENT-CENTERED MEDICAL HOME community healt center including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at W AC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.8 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Riggs provides medication discounts to all uninsured patients based on a small increase of the medication cost plus a minimal processing fee. Given this, the system cost issues (rebates after initial WAC cost payment) causes Pharmacy IT system issues which may be so extensive as to preclude offering these discounts on the Rebate model medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).10 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frarne of 40 to 55 days. 8 HRSA FAQ 9 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnotel0 10https://enlivenhealth.co/blogivear-end-business-health-check-key-metrics-everv-pharmacy-owner-should-review C0.1.111.TV1116111.... FOHC Riggs Community Health Center 1716 HartfOrd St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENT.CENTERED MEDICAL HOME community health center There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concems about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. Based on our organization's data, we estimate it would cost $72,313 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,853 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Riggs anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as eliminating medication delivery, decreasing or eliminating other non-reimbursable care management activities, and decreasing support staff already overburdened such as front office services and call center. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 3,000 uninsured patients using our medication discounts from rationing their insulin or heart medication. C113..111111 FQHC.. Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENT.CENTERED MEDICAL KOME community healtTi center hrprovIng Health. froprovIng Lives. Financial Impact of Rebate Denials and Delays Riggs urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.11 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $21,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This rnay lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; 11 Appl ication Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federal register. gov/d ocurnents/2025/08/01/2025-14619/340b-progra m-notice-appli cat ion-process-for-the-340b- rebate-model-pilot-program 00.1.1.olv .6Ow Gfm/I FC)FIC Riggs Community Health Center 1716 Hartford St Lajayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENTCENTERED MEDICAL HOME communirt /hel uving 4 .lt center Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse .141. FOHC Riggs Community Health Center 1716 Harord St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIEN1.CENTERED MEDICAL HOME community healt center We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the tirne and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Riggs strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Riggs believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Riggs appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Randy Hountz, COO, at rhountz@riggshealth.com. $ Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENT, C EN IIRED MEDICAL HOME community health center Improving H.NAM. Improving L,ps. Sincerely, ,-, Dr. April Fife DNP, FNP-C President and CEO Riggs Community Health Center Riggs Community Health Center 1716 Hartford St Lafayette, Indiana 47904 Phone: 765-742-1567 Administration Fax: 765-742-2700 www.riggshealth.com PATIENT-CENTERED MEDICAL HOME
HRSA-2026-0001-1713Bath County Community Hospital2026-04-17T04:00Z2,981 chars
See attached file(s) 106 Park Drive | Drawer Z | Hot Springs Virginia 24445 | (540) 839-7197 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Director Britton, As a director of pharmacy for a Critical Access Hospital (CAH) in Virginia, I see first-hand the impact the 340B program has on healthcare delivery in this area. Without the 340B program, our facility would not exist. This is not hyperbole but rather the reality of modern- day rural healthcare. With the assistance of the 340B program, we have been able to partner with patients in this and surrounding areas to elevate healthcare. Without the care provided locally by our team, many healthcare needs would go unmet while others would be met but at an increased burden to patients. Utilizing 340B resources comes at a great expense. For us, this is divided between our onsite staff and an external 340B management company that we partner with. This approach is utilized in order to ensure the highest level of compliance with all aspects of the program. These investments, in their current state, are necessary to ensure the integrity and ultimate goals of the 340B system are met. We believe these costs are worthwhile because ultimately, they open the door to expanding quality care to our patients. Changing from a discounted purchase price model to a rebate model will greatly increase these costs, decrease cash flow, and ultimately have a devastating impact on our ability to meet the healthcare needs of underserved populations in our area. I believe this impact will be felt by covered entities and the patients they serve all across the United States. Requiring covered entities to purchase medications at full price and wait for rebates would cause not only financial turmoil for covered entities but, more to the point, have a negative impact on the healthcare services and medication access for patients served. Those 106 Park Drive | Drawer Z | Hot Springs Virginia 24445 | (540) 839-7197 impacted the most will be vulnerable individuals that the 340B program is intended to benefit. Based on the following: The goal of the 340B program: to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services; The greatly increased cost to be incurred by covered entities; The efficacy of current measures to ensure the exclusion of duplicate discounts; It can only be recommended to continue the current discounted purchase price model for the 340B program. To transition to the proposed rebate model in its current planned iteration, or any variance thereof, undermines the very purpose for which the 340B program was created. Timothy Berry, Pharm D Director of Pharmacy
HRSA-2026-0001-1714Capstone Health2026-04-17T04:00Z128,157 chars
See attached file(s) April 10, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Capstone Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Capstone Health anticipates significant financial losses under a rebate- based model. Based on internal analysis of CY2024 dispensing data, we estimate approximately $2.7 million in upfront capital exposure for drugs that would fall under the rebate model, compared to our current annual 340B drug spend of $185,535. This represents a dramatic increase in required working capital and a fundamental shift in financial risk from manufacturers to the covered entity. While Capstone Health operates exclusively in-house pharmacies and does not utilize contract pharmacy arrangements, the rebate model would still result in a substantial reduction in 340B savings due to increased administrative burden, delayed reimbursement, and risk of rebate denials. Even a conservative 5% denial rate would result in annual losses exceeding $105,000, further eroding already limited margins. Additionally, the need to purchase drugs at full acquisition cost and await reimbursement introduces liquidity constraints that may force reductions in inventory levels, delay patient access to medications, and reduce the amount of program income available to reinvest in critical services such as primary care, behavioral health, and support for non-funded clinics. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. 2 o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Capstone Health in particular, this means it will impact: Number of 340B Transactions / Patients Served: In CY2025, Capstone Health processed 77,114 340B-eligible prescriptions and served 18,828 patients across our service area. Our patient population includes a high proportion of uninsured and underinsured individuals, with approximately 65% of pharmacy patients uninsured and reliant on sliding fee discounts to access necessary medications. Current Administrative Costs for the 340B Program: Under the current upfront discount model, administrative costs are primarily associated with internal staff time dedicated to eligibility verification, inventory management, purchasing compliance, routine reconciliation, reporting, and audit preparation. These functions are supported through existing pharmacy and finance personnel, pharmacy management systems, and compliance infrastructure. Because Capstone Health operates exclusively in-house pharmacies and does not utilize contract pharmacy arrangements, we do not incur third-party administrative or contract pharmacy fees. Importantly, the current model does not require rebate submission tracking, accounts receivable management, or denial resolution processes, which helps maintain administrative efficiency and cost predictability. Use of 340B Revenue: Capstone Health reinvests 340B program savings directly into patient care and operational sustainability. Specifically, 340B revenue is used to: o Supporting primary care and behavioral health services o Sustain school-based health programs serving vulnerable student populations o Maintain and upgrade pharmacy technology and infrastructure o Enhance patient safety initiatives o Provide discounted medications through our sliding fee program, particularly for uninsured patients 3 This reinvestment model is essential to maintaining access to comprehensive care for medically underserved populations and allows Capstone Health to extend services beyond what traditional reimbursement structures would support. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 6 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Capstone Health provided 41,919 prescriptions under the sliding fee discount program in CY2025, delivering essential discounted medications and services to our patient population. Of our pharmacy patients, approximately 65% (about 2,900 individuals) are uninsured and rely heavily on these discounts to access care. Under a rebate model, our ability to offer sliding fee discounts will decrease significantly. The requirement to purchase medications at full acquisition cost upfront, combined with delays in rebate reimbursement and risk of denials, will reduce available 340B savings. As a result, Capstone Health may be forced to adjust discount levels, increase dispensing fees, or limit access to certain medications, directly impacting affordability for our most vulnerable patients. Staffing Impact: Capstone Health anticipates needing at least 1 additional full-time equivalent (FTE) initially to manage the increased regulatory, operational, administrative, and compliance burden created by a rebate model. This role would be responsible for rebate claim submission, reconciliation, accounts receivable tracking, denial management, manufacturer communication, and audit documentation. As the rebate drug list expands annually, we project that staffing needs will increase accordingly, with the potential requirement of one full-time rebate coordinator per pharmacy location by the end of 2027. Without additional staffing, existing pharmacy and finance personnel would be required to divert time away from patient-facing and clinical support functions to manage rebate-related administrative tasks. These added staffing costs will reduce available 340B savings and limit our ability to reinvest in patient care services, particularly for uninsured and medically underserved populations. External Vendor Costs: Given the increased complexity of a rebate-based model, Capstone Health anticipates a significant increase in external vendor costs, particularly related to pharmacy software enhancements, IT system modifications, and compliance support services. While we currently operate an in-house pharmacy model without reliance on contract pharmacies or third-party administrators, implementation of a rebate system would likely require vendor-supported upgrades to pharmacy management systems, financial systems, and data reporting infrastructure. Additional external costs may include legal counsel for contract and compliance review, 340B consulting services, and technical support for developing and maintaining rebate tracking, data submission, and reconciliation processes. These costs represent new, 7 ongoing financial obligations that do not exist under the current upfront discount model and would further erode 340B savings available for reinvestment in patient care. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Capstone Healths projections align with the upper range of these estimates, as we anticipate needing at least 1 full-time equivalent (FTE) initially, with staffing needs increasing over time as additional drugs are added to the rebate program. Based on projected growth in rebate-eligible medications and associated administrative complexity, Capstone Health expects that staffing demands will scale to one full-time rebate coordinator per pharmacy location by the end of 2027. This places our organization within the higher-impact cohort of CHCs that will experience sustained and expanding workforce requirements under a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Capstone Health, we anticipate staffing costs consistent with these ranges between $30,000 and $200,000 annually for each additional full-time rebate coordinator, depending on role and experience level (pharmacy technician or administrative specialist). When combined with projected $2.7 million in upfront drug acquisition costs, increased labor expenses, and potential financial losses associated with rebate denials or delays, the total annual financial impact is substantial. For context, Capstone Health served 18,828 patients and processed 77,114 prescriptions in CY2025 and operates on limited margins typical of rural Federally Qualified Health Centers. Like many CHCs, Capstone Health does not have the financial flexibility to absorb these additional costs without impacting operations. Increased staffing, combined with carrying costs associated with delayed reimbursement and risk of unrecovered rebates, would directly reduce resources available for patient care and threaten the sustainability of key services supported by 340B program savings. 7 Ibid. 8 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Capstone Health estimates that approximately 810 hours per week will be required to report and manage 340B rebate claims to a third-party platform, assuming alignment with manufacturer requirements. The lack of standardization and the likelihood of varying data submission requirements across manufacturers will force Capstone Health to rely on multiple internal systems to track, validate, and report the same data elements. This fragmentation will increase administrative complexity, staff workload, and the risk of reporting errors or delayed submissions, ultimately increasing operational costs. Capstone Health urges HRSA to require uniform reporting standards, centralized submission processes, and consistent adjudication timelines across all participating manufacturers to mitigate the significant administrative and financial burdens associated with receiving timely and accurate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $75,000$125,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 18,828 patients, the total projected increase in expensesincluding labor, IT infrastructure, administrative burden, and carrying costs associated with delayed reimbursementis estimated to exceed $2.7 million annually. This estimate reflects the significant upfront drug acquisition costs alone and does not fully capture additional downstream impacts such as rebate denials, lost discounts, increased staffing needs, and system implementation expenses, all of which would further increase total financial exposure under a rebate model. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 9 System Interoperability: Unlike contract pharmacies that rely on Third-Party Administrators (TPAs), Capstone Health operates exclusively in-house pharmacy services, requiring direct integration between our Electronic Health Record (EHR), Pharmacy Management System (PMS), and financial systems to support a rebate-based model. Our current systems are designed for upfront 340B discount compliance, including eligibility verification, inventory tracking, and purchasing controls, but are not configured to support claim-level rebate identification, submission, accounts receivable tracking, or reconciliation workflows. Implementation of a rebate model would require significant system modifications to: o Identify and flag rebate-eligible prescriptions at the point of dispensing o Capture and transmit claim-level data to multiple manufacturers o Integrate pharmacy and financial systems for real-time accounts receivable tracking o Support reconciliation between wholesaler price files, purchase records, and manufacturer rebate payments These requirements introduce substantial complexity and would necessitate vendor-supported customization across multiple platforms. One-Time Integration Costs: Capstone Health anticipates significant one-time integration costs, estimated between $75,000 and $125,000, to support required system modifications. These costs would include vendor fees for custom API development, system configuration, data mapping, and implementation of price file reconciliation tools necessary to align wholesale acquisition costs with expected 340B rebate values. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy and compliance functions will be required to spend approximately 810 hours per week manually pulling and reconciling Purchase Files and Price Files to verify that rebate payments align with statutory 340B pricing. This ongoing administrative burden diverts critical staff time away from patient care activities, medication counseling, and clinical support services, further straining limited workforce resources. The Contract Pharmacy: The Burden of Network Coordination For CHCs that rely on contract pharmacy partners, the rebate model introduces significant complexity that threatens the sustainability of these arrangements. However, Capstone Health does not utilize contract pharmacies and operates exclusively through in-house pharmacy services. While we do not currently face the coordination challenges associated with contract pharmacy networks, this distinction underscores an important concern: even CHCs with simplified, fully in- house models face substantial administrative and financial burden under a rebate system. For organizations that do rely on contract pharmacies, these burdens would be significantly amplified. TPA Reliance and Fees: Although Capstone Health does not currently utilize Third-Party Administrators (TPAs), a rebate model may effectively force reliance on external vendors to 10 manage claim submission, tracking, and reconciliation across multiple manufacturers. This would introduce new per-claim or service-based fees that do not exist under our current model. Verification Latency: The rebate model inherently creates a reconciliation gap between dispensing and reimbursement. Even within a single in-house pharmacy model, staff must monitor claims and verify rebate payments across multiple manufacturers and submission systems, increasing administrative workload and risk of delayed or inaccurate payments. Risk of Pharmacy Access Reduction: While Capstone Health does not have contract pharmacy partners at risk of exiting the program, we are deeply concerned that pharmacies in our broader region may opt out of 340B participation due to the increased financial and administrative burden. In rural areas, where pharmacy access is already limited, this could further exacerbate pharmacy deserts and reduce access to affordable medications for vulnerable populations. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 11 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with this requirement, Capstone Health provides discounted prescription medications through a structured sliding fee program, which adjusts patient costs based on income and family size. In CY2025, Capstone Health dispensed 41,919 prescriptions under our sliding fee discount program, with approximately 65% of our pharmacy patients uninsured (about 2,900 individuals). These patients rely on predictable, reduced pricing at the point of sale to access essential medications, particularly for chronic conditions such as diabetes, hypertension, and cardiovascular disease. Under the current upfront 340B model, Capstone Health is able to offer these discounts with confidence because acquisition costs are known and stable at the time of dispensing. However, under a rebate model, we would be required to purchase medications at full acquisition cost without certainty regarding the timing or approval of rebate payments. This uncertainty would make it operationally and financially challenging to determine appropriate patient pricing at the point of sale. As a result, Capstone Health may be forced to reduce the depth of discounts, increase dispensing fees, or limit access to certain high-cost medications. This would directly impact affordability for our most vulnerable patients and undermine our ability to meet federal requirements for providing accessible, income-based care. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate 12 will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).8 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 8https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 13 which utilizes CHC-specific purchasing data, 340B9 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.10 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,700,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $185,535 to purchase these same drugs at the 340B ceiling price. This represents an approximate 1,355% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at Wholesale Acquisition Cost (WAC). To cover the upfront cost of purchasing drugs and operationalizing the rebate, Capstone Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, including support for non-funded clinics, as well as elements of our primary care and behavioral health programs that rely on 340B program income. Operating Hours: We anticipate needing to reduce our clinic hours by several hours per week, particularly impacting evening and extended access hours, which are critical for working patients who cannot seek care during standard business hours without losing income. 9 https://340bpricing.hrsa.gov/ 10 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 14 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund positions such as community health workers or behavioral health support staff, directly increasing wait times and reducing access to care. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our approximately 2,900 uninsured patients from rationing essential medications such as insulin or cardiovascular therapies. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Capstone Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Capstone Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $150,000, which includes the combined impact of potential rebate denials 15 (estimated at over $105,000 annually at a 5% denial rate) and the loss of purchasing-related discounts. Capstone Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $225,000 (based on an annualized increase of approximately $2.7 million). As additional drugs are incorporated into the Medicare Drug Price Negotiation Program (MDPNP) in 2027 and beyond, this monthly financial exposure will continue to grow, further compounding cash flow constraints and financial risk. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, Capstone Health would be forced to utilize limited financial reserves and potentially take on a line of credit to sustain drug procurement. This is not a sustainable solution; the interest costs alone are estimated to be tens of thousands of dollars annuallyfunds that are currently dedicated to supporting primary care, behavioral health services, school-based health programs, and non-funded clinics. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Capstone Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Capstone Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.11 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 11 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 16 volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $105,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay, and will limit our capacity to provide discounted medications and sustain essential clinical services for our most vulnerable populations. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied 17 directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.12 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.13 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,14 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. 12 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 13 340B House Report Legislative History. H.R. REP. 102-384(II). 14 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 18 HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers 19 Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.15 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes16 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. 15 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 16 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 20 P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.17 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for clinic-administered drugs (CADs) would also require new software, system integration, and staff training. While NACHC estimates these costs would range from $30,000 to $50,000 annually, Capstone Health anticipates that total costs could be at or above this range, depending on the level of system customization required and vendor support needed to operationalize rebate tracking within our existing infrastructure. As a rural FQHC operating primarily with systems designed for upfront 340B compliance, Capstone Health would need to deploy new tracking functionality within our electronic health record system or adopt standalone software solutions to capture, store, and transmit CAD-related data for rebate purposes. This would require ongoing licensing fees, system maintenance, IT 17 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 21 support, and continuous staff training, in addition to redesigning both clinical and administrative workflows. These costs would be additive and recurring, not one-time investments, and would be incurred despite the fact that CADs are not currently billed to Medicare Parts B or D within our operational model. Furthermore, Medicare Part B negotiated pricing provisions for applicable drugs do not take effect until 2028, highlighting a misalignment between the proposed rebate requirements and current billing and operational realities for CHCs like Capstone Health. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data 22 on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,18 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.19 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered 18 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 19 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 23 entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.20 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.21 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall 20 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 21 H.R. REP. 102-384(II) 24 enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).22 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.23 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).24 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not 22 42 U.S.C. 256b(a)(1) 23 Id. 24 42 U.S.C. 256b(a)(1) 25 request payment under the Medicaid FFS program for a 340B-priced drug.25 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.26 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.27 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.28 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.29 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B 25 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 26 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 27 42 U.S.C. 256b(a)(5)(C). 28 42 U.S.C. 256b(a)(5)(C). 29 See 42 U.S.C 256b(a)(5)(A). 26 drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. In Alabama, detailed operational guidance for how a 340B rebate model would be implemented within Medicaid billing has not yet been clearly defined. However, based on existing billing requirements and examples from other states, Capstone Health anticipates similar administrative challenges. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.30 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. Alternatively, if CHCs are required to continue billing at 340B pricing while assuming the risk of rebate denial, this would expose Capstone Health to direct financial losses on Medicaid claims when rebates are not approved. Both scenarios introduce significant administrative burdens, increase the likelihood of billing errors, and create uncertainty in reimbursement. These challenges demonstrate the operational infeasibility of a rebate model for CHCs in states like Alabama, where Medicaid billing requirements are complex and not designed to accommodate retrospective rebate reconciliation. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.31 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. 30 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 31 C.F.R. 447.518(a). 27 Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.32 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, 32 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 28 thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.33 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.34 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.35 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. 33 42 C.F.R. 447.502 34 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 35 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 29 Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.36 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.37 36 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 37 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 30 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.38 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.39 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the 38 42 U.S.C. 256b(a)(5)(A)(emphasis added). 39 32 C.F.R. 199.21(q)(2)(iii)(E) 31 pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.40 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.41 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.42 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.43 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.44 Drug industry data vendors have reported that such data is highly valuable to manufacturers.45 Further, manufacturers or PBMs have been and would 40 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 41 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 42 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 43 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 32 continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.46 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.47 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.48 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.49 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.50 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. 46 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 47 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 48 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 49 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 50 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 33 In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.51 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.52 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.53 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health 51 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 52 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 53 42 U.S.C. 256b(a)(5)(B) 34 care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.54And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.55 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate 54 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 55 H.R. REP. 102-384, 16 35 covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would 36 likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model56 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. 56 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 37 Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Capstone Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Capstone Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Capstone Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact F. David Jones, DNP, CRNP at fdjones@capstoneclinic.org. Sincerely, F. David Jones, DNP, CRNP Capstone Health 38
HRSA-2026-0001-1715Primary Health Care2026-04-17T04:00Z84,853 chars
See attached file(s) PRIMARY HEALTH CARE April 10, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Primary Health Care, Inc. (PHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 1981, PHC has sought to bring together a team of caring professionals to provide health care and supportive services to all people to improve their quality of life. Last year we had the privilege of serving 40,335 patients in a total of 139,613 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an integral part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: We anticipate a 25% reduction in savings from contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PHC in particular, this means it will impact: The 91,527 340B transactions we process annually, which bolster the services we provide for our 40,335 patients. In order to purchase medications under a rebate model we would likely need to take out a line of credit. For our in-house pharmacy alone we would need to borrow at least $115M annually. We currently have a $54M annual operating budget and just over 50 days of cash on hand Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished or eliminated. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PHC provided $11,639,585 in sliding fee discounts, to 14,899 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Staffing Impact: PHC anticipates needing to hire an additional 1.0 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PHC anticipates an increase of $10,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As noted above, we anticipate needing to hire at least one 0.2 FTE at $18,000 to manage reporting of 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We anticipate that 20 hours will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be ongoing fees-which are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure.Our current software vendor does not currently have the ability to generate the required information in a report, resulting in hours of time and labor spent putting the data together in an uploadable form. Creating the required reports would be an add on feature, and require an additional fee to our health center to be generated. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Upgrades to our PDX software range from hundreds to thousands of dollars. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend around 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with four pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across forty-two different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert,9 and the closing of pharmacies nationwide have 9 Cencora, Insight into U.S. pharmacy deserts (2024) 7 only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At PHC we use our 340B savings in a variety of ways including offering sliding fee discounts on service, bolster our mental health services, and reducing the overall cost of medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $166,193 to purchase our current inventory levels of these 10 drugs under the proposed rebate model. Currently, our organization spends $2088 to purchase these same drugs at the 340B ceiling price. This represents a 7000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as maternal health and behavior health programs Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund behavioral health consultants directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 124,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high- risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: PHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $150,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $1M annuallyfunds that are currently dedicated to maternal and behavioral health. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 13 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 14 Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Stephanie Balow, CAO at sbalow@phcinc.net. Sincerely, Nathan Simpson Nathan Simpson CEO Primary Health Care April 10, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Primary Health Care, Inc. (PHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 1981, PHC has sought to bring together a team of caring professionals to provide health care and supportive services to all people to improve their quality of life. Last year we had the privilege of serving 40,335 patients in a total of 139,613 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an integral part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: We anticipate a 25% reduction in savings from contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PHC in particular, this means it will impact: The 91,527 340B transactions we process annually, which bolster the services we provide for our 40,335 patients. In order to purchase medications under a rebate model we would likely need to take out a line of credit. For our in-house pharmacy alone we would need to borrow at least $115M annually. We currently have a $54M annual operating budget and just over 50 days of cash on hand Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished or eliminated. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PHC provided $11,639,585 in sliding fee discounts, to 14,899 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PHC anticipates needing to hire an additional 1.0 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PHC anticipates an increase of $10,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. As noted above, we anticipate needing to hire at least one 0.2 FTE at $18,000 to manage reporting of 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We anticipate that 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be ongoing fees-which are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure.Our current software vendor does not currently have the ability to generate the required information in a report, resulting in hours of time and labor spent putting the data together in an uploadable form. Creating the required reports would be an add on feature, and require an additional fee to our health center to be generated. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Upgrades to our PDX software range from hundreds to thousands of dollars. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend around 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with four pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across forty-two different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert, and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At PHC we use our 340B savings in a variety of ways including offering sliding fee discounts on service, bolster our mental health services, and reducing the overall cost of medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $166,193 to purchase our current inventory levels of these 10 drugs under the proposed rebate model. Currently, our organization spends $2088 to purchase these same drugs at the 340B ceiling price. This represents a 7000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as maternal health and behavior health programs Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund behavioral health consultants directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 124,000 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: PHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $150,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $1M annuallyfunds that are currently dedicated to maternal and behavioral health. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays PHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Stephanie Balow, CAO at sbalow@phcinc.net. Sincerely, Nathan Simpson Nathan Simpson CEO Primary Health Care
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See attached file(s) Sioux Valley Memorial Hospital Association D/B/A Cherokee Regional Medical Center 300 Sioux Valley Drive Cherokee, IA 51012 4/15/26 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Cherokee Regional Medical Center (CRMC), located in Cherokee, Iowa, we appreciate the opportunity to respond to the Department of Health and Human Services Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congresss directive that covered entities be able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. A rebate mechanism would require CRMC to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. This rebate model will increase our staffing needs up to one full time analyst to cover claims processing, data submission, and reconciliation of rebates, audit support, and challenging denials. We will potentially incur costs for training, consulting services, and reduction in services offered. These costs would recur due to complexity of the rebate model. There could be possible charges from our third party administrator to send these claims to the platforms required. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. CRMC does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSAs estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. Our covered entity has six medical clinics, as well as multiple provider clinics, an infusion center, along with two contract pharmacies and two in-house retail pharmacies. This creates hours of auditing, being sure that either the 340B rebate is paid, or the Manufacturer Fair Price rebate is obtained. This is why we would need a full-time employee to help with the added workload. Our health system is in a rural area, and it is difficult to find adequate staffing, and could take us 6 months or more to fill a position such as this. HRSAs current estimate of 5 hours per week grossly underestimates the time it takes for these functions to be performed. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. CRMC currently collects data from contract pharmacies, in-house pharmacies, surgery department, rural health clinics, provider based clinics and mixed-use in the hospital. The third-party administrator helps collects this data and based off of our qualifiers, determines if a claim is 340B eligible or not. Our analyst then performs internal audits on all of these areas monthly. This decreases the chance of having duplicate claims, diversion, invalid or incorrect eligibility. All this would have increased data collection needs to monitor rebates received or outstanding, rejected claims and resubmission of claims. Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, CRMC would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. HRSA is proposing payment within 10 calendar days of submission of a complete claim. Even if the claim process goes smoothly, it could cause us hardship with our cash flow. Our wholesalers are paid every two weeks, and it could require us to pay the wholesaler prior to receiving the rebate. Should the claim have any complications, or be rejected, that timeframe is extended, and definitely affects our cash flow, even if in the long run it is paid. Our small hospital does not have the cash flow to be able to withstand waiting a 10-day period for our payment. Impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Our Prescription Assistance Program for low-income individuals could possibly be affected by the rebate program, therefore limiting their access to high-cost medications. We provide EMS kits to the ambulance services within our county. This also may be unavailable if cash flow becomes a problem. Colonoscopy prep kits are supplied for patients scheduled for a colonoscopy. This too might be a program that has to be discontinued. Reliance Interests HRSA requests comment on covered entities reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. CRMC relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third-party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the Iowa Hospital Associations and the American Hospital Associations recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. For all the reasons outlined above, CRMC respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Sincerely, Gary Jordan CEO Sioux Valley Memorial Hospital Association D/B/A Cherokee Regional Medical Center Cherokee, Iowa Sioux Valley Memorial Hospital Association D/B/A Cherokee Regional Medical Center 300 Sioux Valley Drive Cherokee, IA 51012 4/15/26 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Cherokee Regional Medical Center (CRMC), located in Cherokee, Iowa, we appreciate the opportunity to respond to the Department of Health and Human Services Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congresss directive that covered entities be able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. A rebate mechanism would require CRMC to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. This rebate model will increase our staffing needs up to one full time analyst to cover claims processing, data submission, and reconciliation of rebates, audit support, and challenging denials. We will potentially incur costs for training, consulting services, and reduction in services offered. These costs would recur due to complexity of the rebate model. There could be possible charges from our third party administrator to send these claims to the platforms required. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. CRMC does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSAs estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. Our covered entity has six medical clinics, as well as multiple provider clinics, an infusion center, along with two contract pharmacies and two in-house retail pharmacies. This creates hours of auditing, being sure that either the 340B rebate is paid, or the Manufacturer Fair Price rebate is obtained. This is why we would need a full-time employee to help with the added workload. Our health system is in a rural area, and it is difficult to find adequate staffing, and could take us 6 months or more to fill a position such as this. HRSAs current estimate of 5 hours per week grossly underestimates the time it takes for these functions to be performed. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. CRMC currently collects data from contract pharmacies, in-house pharmacies, surgery department, rural health clinics, provider based clinics and mixed-use in the hospital. The third-party administrator helps collects this data and based off of our qualifiers, determines if a claim is 340B eligible or not. Our analyst then performs internal audits on all of these areas monthly. This decreases the chance of having duplicate claims, diversion, invalid or incorrect eligibility. All this would have increased data collection needs to monitor rebates received or outstanding, rejected claims and resubmission of claims. Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, CRMC would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. HRSA is proposing payment within 10 calendar days of submission of a complete claim. Even if the claim process goes smoothly, it could cause us hardship with our cash flow. Our wholesalers are paid every two weeks, and it could require us to pay the wholesaler prior to receiving the rebate. Should the claim have any complications, or be rejected, that timeframe is extended, and definitely affects our cash flow, even if in the long run it is paid. Our small hospital does not have the cash flow to be able to withstand waiting a 10-day period for our payment. Impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Our Prescription Assistance Program for low-income individuals could possibly be affected by the rebate program, therefore limiting their access to high-cost medications. We provide EMS kits to the ambulance services within our county. This also may be unavailable if cash flow becomes a problem. Colonoscopy prep kits are supplied for patients scheduled for a colonoscopy. This too might be a program that has to be discontinued. Reliance Interests HRSA requests comment on covered entities reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. CRMC relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third-party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the Iowa Hospital Associations and the American Hospital Associations recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. For all the reasons outlined above, CRMC respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Sincerely, Gary Jordan CEO Sioux Valley Memorial Hospital Association D/B/A Cherokee Regional Medical Center Cherokee, Iowa
HRSA-2026-0001-1717South Central Missouri Community Health Center (Dba Four Rivers CHC)2026-04-17T04:00Z9,470 chars
See attached file(s) Four Rivers Community Health Center Comments on HRSA RFI: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Submitted via Regulations.gov April 17, 2026 I. Executive Summary South Central Missouri Community Health Center dba Four Rivers is a Federally Qualified Health Center (FQHC) that delivers comprehensive primary care, behavioral health, dental, and enabling services to medically underserved populations across 8 rural counties in South Central Missouri (Phelps, Maries, Crawford, Dent, Pulaski, Texas, Osage, and Franklin) For all of the reasons below, Four Rivers respectfully requests that Federally Qualified Health Centers be exempted from this rulemaking. In 2025, Four Rivers: Served 22,646 unique patients Provided 75,339 total visits Employed approximately 200 individuals Four Rivers serves patients across South Central Missouri with clinic locations in Missouris 3rd, 8th and 4th Congressional District(s). Patients routinely travel from surrounding counties and neighboring congressional districts to access care at our facilities. The 340B Program is an essential component of our financial model, allowing us to stretch scarce federal resources to maintain access to medications and clinical services for patients regardless of ability to pay. We appreciate HRSAs deliberate approach in issuing this RFI. However, from the perspective of a community health centernot merely a pharmacy, the shift from an upfront discount to a rebate-based model introduces material financial, operational, staffing, and patient-access risks that fundamentally threaten our ability to fulfill our statutory mission. Any 340B rebate model must be voluntary, narrowly scoped, manufacturer-funded, and demonstrably cash-neutral in real time for covered entities. Absent these protections, a rebate model would undermine patient access and the purpose of the 340B statute. II. Costs to Covered Entities 1.a. Current Administrative Costs Under the Upfront 340B Discount Four Rivers currently manages 340B participation through a combination of internal staff and third-party vendors. Administrative costs include: Program oversight and compliance Contract pharmacy administration Eligibility tracking and audits IT systems and reconciliation Legal and policy review These activities are already tightly staffed and funded through operating margins supported, in part, by upfront 340B savings. Key cost drivers today include: Pharmacy and compliance staff labor Contract pharmacy administration fees 340B split billing and audit software External audit and legal support Importantly, the current upfront discount model does not require claim-level rebate submission, manufacturer adjudication processes, or accounts receivable management tied to realization of the ceiling price. 1.b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate model would introduce entirely new workflows not currently required under the upfront discount structure, including: Claim-level rebate submission and tracking Manufacturer-specific reconciliation processes Denial management and appeals Documentation retention and audit defense Expanded data reporting obligations Accounts receivable management associated with delayed rebate realization Estimated Incremental Cost Scenario (Annualized) Members should adjust these ranges to reflect their scale. Cost Category Estimated Incremental Cost Additional 340B/vendor platform fees $37,500 $62,500 Internal labor (pharmacy, finance, compliance) $75,000-$120,000 Legal, policy, and audit support $15,000 $30,000 IT integration and data management $50,000-$100,000 Total Estimated Incremental Cost $177,500 $312,500 annually These costs would be recurring and unfunded. For a health center serving approximately 23,000 patients annually, these funds would otherwise support direct patient services. 1.c. Staffing Impacts Implementation of a rebate model would require either: Hiring additional administrative FTEs, or Reallocating existing clinical and operational staff away from patient care Estimated staffing impact: Approximately 1.5 additional FTEs across pharmacy, finance, and compliance Permanent (not temporary), as rebate administration would be ongoing For community health centers already facing workforce shortages, this is not sustainable. 1.d. Systems and Infrastructure A rebate model would require: New or modified claims and data submission platforms Secure data exchanges with manufacturers Expanded audit and reporting capabilities Rebate tracking and receivable management systems These systems would require significant upfront investment and recurring maintenance costs, none of which improve clinical outcomes. 1.e. Other Anticipated Impacts A rebate model would also introduce: Increased legal and compliance risk Training costs across pharmacy, finance, and leadership Reduced ability to invest in enabling services (transportation, case management) Disproportionate harm to rural and resource-constrained health centers Any instability or delay in 340B savings would directly affect medication affordability programs, behavioral health expansion, dental services, and other critical patient supports. This increase in financial and administrative burden to our health center will directly impact services we provide to patients assisting them with the barriers to healthcare, such as transportation to appointments, medication cost assistance, community health workers who work with patients on all Social Determinants of Health (SDOH). Less access in our community to this type of care will increase total healthcare dollars spent overall. III. Payment Timing and Cash Flow Impacts Cash flow risk represents the single greatest threat posed by a rebate-based model. Sample Cash Flow Scenario Current Model (Upfront Discount): Drug acquisition cost (340B): $60 Wholesaler payment due: Net 17.5 days Predictable and budgeted expenses Rebate Model: Drug acquisition cost (non-340B): $100 Rebate expected: $40 Timing uncertainty: 10+ days (or longer if denied or delayed) Impact: $40 per prescription tied up in receivables At scale: At approximately > 5,000 prescriptions/month: $200,000 in monthly cash exposure Approximately $2 million in annual working capital at risk For community health centers operating on thin margins, this level of liquidity risk is unacceptable. Even a nominal 10-day payment requirement does not eliminate denial risk, submission disputes, processing lag, or manufacturer variability. A rebate model effectively shifts short-term financing obligations onto covered entities. Recommendations If HRSA proceeds: Rebates must be pre-funded or escrowed Payments must be automatic, not contingent Interest penalties must apply for late payments Covered entities must not bear denial risk upfront IV. Rebate Denials Rebate denials must be rare, standardized, and transparent. We strongly recommend: Limiting denial reasons to documented duplicate discounts or diversion Mandatory standardized denial templates Defined appeal timelines HRSA oversight of unresolved disputes Manufacturers should not be permitted to use denials as a utilization or cost-containment mechanism. V. Data Collection and Privacy Community health centers already maintain robust data systems for 340B compliance. A rebate model would require expanded claims-level reporting and increased transmission of data to manufacturers, raising additional administrative burden and patient privacy concerns. HRSA should: Define a minimum required dataset Prohibit manufacturer-specific or proprietary data demands Require HIPAA-aligned safeguards and appropriate agreements Standardize reporting formats VI. Manufacturer Efforts to Avoid Duplicate Discounts Community health centers already comply with Medicaid exclusion files and applicable modifiers. Challenges related to the Medicare Drug Price Negotiation Program are manufacturer-specific and should not be resolved by shifting operational burden to safety- net providers. Program integrity improvements must not compromise access to care. A rebate model does not meaningfully improve duplicate discount prevention relative to existing safeguards. VII. Program Integrity and Net Assessment While we support program integrity and transparency, a rebate-based model: Increases administrative cost Introduces cash flow instability Diverts resources from patient care Provides no corresponding clinical benefit For a health center serving approximately 22,646 patients annually, the costs materially outweigh any theoretical benefits. VIII. Conclusion We urge HRSA to proceed with extreme caution. Any 340B rebate model must be: Voluntary for covered entities Narrowly scoped and time-limited Fully funded by manufacturers Cash-neutral in real time Designed to protect patient access above all else Absent these safeguards, a rebate-based approach risks undermining the statutory purpose of the 340B Program and weakening the nations health care safety net. For all of the reasons above, Four Rivers respectfully requests that Federally Qualified Health Centers be exempted from this rulemaking.
HRSA-2026-0001-1718Dignity Health Dominican Hospital Santa Cruz2026-04-17T04:00Z6,537 chars
Please find the attached letter of comment regarding the 340B Rebate Model - Letter to HRSA t, Dignity Health Dorninican Hospital April 17, 2026 1555 Soquel Drive Santa Cruz, CA 95065 dircct 831.462.7700 dorninicanhospital.org The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Dignity Health Dominican Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Dominican Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Dominican Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The current discount program model allows that hospital to invest in free or very low cost community resource services like our Mobile Wellness Clinic, Katz Cancer Resource Center, and the Dignity Health Wellness Center, serving thousands of residents each year. These programs could be in jeopardy of closing if we are required to shift resources from community investment to operational expenses with the hope of getting reimbursed in a timely manner. Si erely, "IT Christine McSweeney Hospital President & CEO Dignity Health, Dominican Hospital Santa Cruz Apr17, 2026 Dignity Health Dominican Hospital HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs. No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESR That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Apr17, 2026 Dignity Health Dominican Hospital HHS Docket No. HRSA-2O26-O3O42 CommonSpint As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1719Circle Health Services (dba "The Centers")2026-04-17T04:00Z43,123 chars
See attached file(s) HEADQUARTERS Nancy Lyon Porter Building 4500 Euclid Avenue | Cleveland, Ohio 44103 216.432.7200 | thecentersohio.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Circle Health Services (dba The Centers), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Without 340B Savings, The Centers would experience a loss of ~$4.2 million dollars from our entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Across The Centers five Federally Qualified Health Center sites, we serve more than 13,000 patients per year and fill prescriptions for more than 2,100 unique patients every month at our own on-site pharmacies. The Centers provides high-quality healthcare to everyone who walks through our doors, regardless of their ability to pay. Our Health & Wellness Centers respond to an individuals whole health by integrating behavioral health, primary care, dental, infectious disease care, and overdose prevention. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to The Centers mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For The Centers in particular, this means it will impact: Over 142,000 340B transactions for approximately 5,700 unique patients An estimated $250,000 per year in current admin costs for The Centers 340B program Service lines that would not be operationally viable without 340B savings. The Centers uses our 340B savings to subsidize programs that operate at a loss such as Psychiatry, Dental, and Case Management, as well as providing transportation for our clients to their appointments and pharmacies. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: The Centers provided $2.3 million in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: The Centers anticipates needing an additional 1.0 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, The Centers anticipates an increase of approximately $50,000 to $75,000 per year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 The Centers estimates that we will need to hire an additional 1 FTE to maintain operations with the rebate program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. The Centers estimates the additional cost to exceed $150,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The Centers estimates an additional 20 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. The Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For The Centers, which serves more than 13,000 patients each year, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually, which will increase as more drugs are added to the rebate program. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Our in-house pharmacy uses a Third-Party Administrator (TPA), which will require a new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The Centers estimates this will cost approximately $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend approximately 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently does not partner with contract pharmacies to increase access to affordable medications. This is directly due to the manufacturer restrictions, which do not allow us to utilize contract pharmacies in addition to our in-house pharmacies for the drugs our healthcare providers most commonly prescribe. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Internal NACHC survey data The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs like The Centers are required to offer sliding fee discounts for all required and additional health services within the HRSA- approved scope of the project.10 In line with our mission, The Centers offers sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $920,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $240,000 to purchase these same drugs at the 340B ceiling price. This represents more than a 380% increase in upfront capital required for procurement. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The Centers anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as client transportation costs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other support personnel, such as case managers. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our more than 2500 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. The Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, The Centers estimates its 2027 Annual Rebate Opportunity Cost to be approximately $100,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. The Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $60,000/month. In 2027, this will increase to $91,000/month and in 2028 will increase to $180,000/month in additional up front drug spend. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. It would be challenging to navigate the rebate model without utilizing limited financial reserves or taking out a line of credit. This is not a sustainable solution and would pose a risk to funds that are currently dedicated to psychiatry, dental, and case management services as well as client transportation. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on organizations like The Centers the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays The Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $45,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Adam White, Director of Government Affairs: adam.white@thecentersohio.org. Sincerely, Eric L. Morse, MSSA President & CEO The Centers
HRSA-2026-0001-1720The University of Vermont Health Network2026-04-17T04:00Z23,070 chars
See attached file(s) 1 April 17, 2026 Chantelle V. Britton, MPA, MS Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 Sent via submission to online portal www.FederalRegister.gov RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter is respectfully submitted by The University of Vermont Health Network Inc., dba University of Vermont Health (UVM Health) and addresses many of the questions presented in the RFI, while also raising additional considerations we believe are important for HRSA to evaluate moving forward. In some instances, the RFI requests confidential or sensitive information and for those questions, we have provided responses to the Hall Render Pharmacy & 340B Collaborative, with the understanding that it will aggregate and anonymize submissions from UVM Health and other Covered Entities. UVM Health is a rural academic health system serving more than one million people living in rural communities across Vermont and northern New York. Our nonprofit health system employs 15,000 people in our region and is comprised of six partner hospitals, a childrens hospital, a home health and hospice agency, 154 outpatient care sites, three skilled nursing facilities, a multispecialty medical group with over 1,000 employed physicians, approximately 500 advanced practice providers and a population health services organization. Our six partner hospitals include University of Vermont Medical Center, Central Vermont Medical Center, Porter Medical Center, Champlain Valley Physicians Hospital, Elizabethtown Community Hospital, and Alice Hyde Medical Center. As 340B-participating hospitals serving rural areas of Vermont and northern New York, UVM Health is the core supporter of the health care safety net in these communities. As such, we are uniquely positioned both to experience the potential harms of this proposal and to help the Administration understand its likely ramifications, including the approaches we believe drug manufacturers may take if HRSA adopts a rebate model. We believe it is critical for HHS and HRSA OPA to fully appreciate the substantial risks a 340B rebate model could pose to the nations safety net. Accordingly, we provide our perspective, along with comments and recommendations in response to the RFI. 2 UVM Healths 340B Program participation enables us to commit $432,900,000 per year to the Vermont and northern New York communities safety net population we serve. By increasing costs and creating opportunities for manufacturers to adopt policies that may limit access to 340B pricing, a rebate model would place a significant portion of safety net support funds at risk. UVM Health supports data transparency strategies designed to address legitimate goals related to 340B duplicate discounts or Maximum Fair Price (MFP), however, we believe a 340B rebate model is not needed to achieve those goals. This letter is organized into two parts. First, we offer responses to many of the questions HRSA included in the RFI. Second, we pose several questions regarding a potential rebate model. RESPONSES TO HRSAS REQUEST FOR INFORMATION COSTS TO COVERED ENTITIES Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. UVM Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. UVM Health estimates an upfront cost between $3,000,000 to $4,000,000 in third party administration and expenses to operate a rebate model. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. UVM Health estimates that ongoing expenses could cost up to $1,000,000 annually to continue to operate a rebate model. 3 Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require UVM Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claim-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. UVM Health estimates it will need 2-3 additional full-time employees at estimated expense of $300,000 to continue to operate a rebate model. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would fundamentally change the 340B Programs financial structure by replacing upfront discounts with delayed reimbursements. Currently, UVM Health buys drugs at the 340B ceiling price, enabling predictable costs and cash flow. Under a rebate system, we would have to purchase at WAC and wait for rebates, creating significant cash flow challenges. Under the previous 340B Rebate Pilot, if implemented as proposed, the estimated cost increase would be $5,500,000 per month. With current seven-day payment terms to wholesalers and rebate periods expected at around ten days or more, UVM Health would need to float these costs. While this float already exists at the pharmacy level under Medicare Drug Price Negotiation Program (MDPNP) a rebate model that expanded the scope, extending to all purchases, would substantially increase financial strain that would result in the loss of support that UVM Health will be able to provide. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent mechanism for fairly resolving disputes. Without these safeguards, UVM Health 4 will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, UVM Health would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in UVM Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. MANUFACTURERS ADJUDICATING COVERED ENTITIES REBATE REQUESTS Since 2020, drug manufacturers have undertaken sustained efforts that, in our view, have had the effect of narrowing the scope of the 340B Program and increasing their influence over its operation relative to HHS and HRSA OPA. These efforts have directly affected UVM Health. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by 17% in the past 6 years, directly limiting the extent to which we can support our community. We have also faced good-faith inquiries from manufacturers, information requests and document demands, sometimes accompanied by indications they may seek HRSA OPA audit approval if their requests are not addressed. For example, Merck questioned our purchasing patterns for a specific drug, claiming most purchases were at 340B pricing with little to none at WAC. Our review did not support this, and despite repeated requests, Merck refused to share its underlying data. This back-and-forth lasted nearly a year, with ongoing demands but no transparency. While we ultimately provided enough information to resolve the inquiry, these efforts have strained our already limited resources. A rebate model would only exacerbate this burden. From our UVM Health pharmacies experience of the first year of the MDPNP, companies like Amgen, Boehringer Ingelheim, and Johnson & Johnson have denied refund claims, asserting, without evidence, that drugs were dispensed from 340B inventory. In just two months, this has left over $400,000 in unpaid refunds for UVM Medical Center alone. As a result, we paid WAC without receiving either the MDPNP refund or 340B pricing, contrary to legal requirements. To contest denials, manufacturers agent, Second Sight Solutions, requires uploads to its 340B ESP platform for unrelated purchases, a burdensome process that has yielded no meaningful 5 resolution. Although HRSA OPA and CMS are aware,1 we are not aware that any action has been taken. Notably, this process contrasts sharply with their own streamlined process for manufacturer overpayments. HRSA OPA must address these risks and clarify how it will monitor and enforce compliance under any 340B rebate model. In a rebate-based framework, where manufacturers would initially retain payment, this raises questions about how HRSA and Covered Entities can be assured that any amounts owed will be returned in a timely and consistent manner. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,2 UVM Health submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant consideration before adopting a rebate model. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH UVM HEALTHS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and MDPNP dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress said that the agreement between HHS and a manufacturer must require the manufacturer to honor the lesser of the 340B price or the MFP, not both.3 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,4 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.5 A rebate model would transfer the compliance responsibility, and the costs that accompany it, from manufacturers (where Congress originally assigned it), to UVM Health and other Covered Entities. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO UVM HEALTH TO MONITOR MANUFACTURER COMPLIANCE? Since 2020, manufacturers have argued they are harmed because they do not have line-of- sight into Covered Entities eligible patient determinations and Medicaid billing practices. One 1 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue- Letter-to-CMS.pdf) (last accessed Apr. 9, 2026). 2 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 3 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 4 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 5 42 U.S.C. 256b(d)(1)(B)(vi). 6 of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; they believe it is important to know what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisions from Covered Entities to manufacturers. UVM Health would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers currently use to manage MDPNP disputes, Beacon, appears to have limitations, and it is administered by an organization that may present inherent conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. WHAT LAW OR POLICY SUPPORTS EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From UVM Healths perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of UVM Healths patient population, we serve many other patients, including patients with no coverage at all. Requiring UVM Health to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy basis for such a broad expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. WHAT LAW OR POLICY SUPPORTS EXTENDING A REBATE MODEL TO PHYSICIAN- ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that supports extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings raises critical questions regarding program alignment and administrative feasibility and the legal rationale to support. Before any such model is considered, HRSA should articulate the applicable law and policy rationale so stakeholders can understand the basis for the change and assess its implications for patient care and program integrity. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON UVM HEALTH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entities, including UVM Health to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. The Terms and Conditions grant Second Sight a universal and perpetual license 7 to all data submitted by Covered Entities. This raises significant concerns about data privacy and control. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.6 Because a 340B rebate is a retrospective pricing adjustment and not payment for patient care, the scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. UVM Health has sought to negotiate reasonable terms and conditions with Second Sight, but changes to make the terms more equitable and aligned with applicable law, such as privacy protections, were not accepted. If HRSA moves forward with a rebate model, it should carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model like that used in 2025 would empower the vendor to impose take- it-or-leave-it terms unless HRSA intervenes to ensure fairness. We ask that HRSA explain the policy rationale and legal basis for any decision to further facilitate the monetization of data and the transfer of related rights to a private, for-profit entity, if permitted without adequate protections. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? UVM Health hopes that, as it considers this proposal, HRSA will also consider whether a rebate model is necessary for deduplicating MFP payments and 340B pricing or if reasonable alternatives exist. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissions (such as 340B modifiers and other claim details) without shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,7 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns that will otherwise be borne by the Covered Entity. UVM Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experience, including use of batch flat-file submissions, 6 See 45 C.F.R. 164.501. 7 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). 8 and contribute to the development of government-backed systems that advance legitimate program goals. CONCLUSION Introducing rebates into the broader 340B Program would represent a significant change with important implications for UVM Health and the communities we serve. A rebate model is not necessary to achieve MDPNP or Medicaid deduplication and therefore warrants careful consideration considering the concerns noted above. We hope HRSA will consider and address the questions raised in this letter, evaluate information provided by other stakeholders, and work toward a solution that protects vulnerable patients. With appropriate care and attention, the integrity of the health care safety net, and the patients who rely on it, can be preserved. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Wesley D. McMillian, Pharm.D., MS, BCPS, FCCM System Vice President and Chief Pharmacy Officer University of Vermont Health
HRSA-2026-0001-1721Signature Health2026-04-17T04:00Z47,170 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Signature Health, I would like to thank the Health Resources and Services Administration (HRSA) for providing the opportunity to comment on the proposed 340B Rebate Model Pilot program as well as extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. Signature Health is a Federally Qualified Health Center (FQHC) located in Northeast Ohio. We serve over 35,000 patients annually at 6 outpatient locations and 4 residential treatment facilities. We primarily serve Medicaid and Medicare patients. Additionally, we have a sliding fee scale available to eligible uninsured and underinsured individuals, so that they may receive services and medications at discounted rates. Signature Health began over 30 years ago as a community-focused behavioral health organization. With a foundation deeply rooted in the treatment of behavioral health conditions, Signature Health provides care to some of the most complex patients in our community. These patients receive services at Signature Health that they would likely struggle to access elsewhere- ranging from counseling and psychiatry, to dental, primary care, and infectious disease treatments. The 340B program plays a vital role in supporting all levels of our operations. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts, both in terms of financial losses and projected cost increases. CHCs typically operate on a margin of 1-3% - many CHCs do not have the resources to sustain the increased financial burden of a 340B rebate model. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Signature Health in particular, this means it will impact: The 374,990 340B prescriptions filled and 35,412 patients served annually Our 340B administration costs, which currently equate to $270,000 annually. Most significantly, the areas we use our 340B revenue will be dramatically impacted. These include our previously mentioned sliding fee scale discounts for uninsured patients, mental health services, psychiatric nursing, and EHR fees. With more of our funds tied up in medication purchases due to higher up-front costs, our ability to provide these services, which have been funded with our 340B revenues, will be reduced. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. CHCs unable to afford the up-front costs and/or risk delayed or denied rebates may be forced to choose to no longer purchase these medications, which means patients will not have the access to the preferred, prescribed therapies. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. With our foundation in behavioral health services, Signature Health sees a particularly high number of patients with mental health diagnoses. In 2025, 82% of our patients received mental health services. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.4 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,5 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. This order states health centers (establish) practices to make insulin and injectable epinephrine available at or below the discounted price paid by the health center grantee or sub-grantee under the 340B Prescription Drug Program. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 5 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. At Signature Health, we use our actual 340B acquisition cost as the basis of pricing for our sliding scale. This means we pass our 340B savings directly back to eligible patients, reducing the cost of their prescription medications and ensuring they have access to the treatments they need. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Signature Health provided $6,449,044 in sliding fee discounts, issued through discounted medications and medical services. 340B is essential to our ability to do this, as we pass our 340B savings back to patients for discounted medications and use other pharmacy 340B revenue to fund the medical services discounts. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Staffing Impact: Signature Health anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Signature Health anticipates an increase of at least $26,000 in costs for external support vendors to manage the 340B rebate model. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.6 Signature Health anticipates needing to add 1.5 additional FTEs to meet the demand of reporting and monitoring associated with 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Signature Health estimates the annual cost increases associated with the 340B rebate program, including both staff and upfront medication purchase costs, to be approximately $2 million for our CHC. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Signature Health estimates that 416 hours annually will be required to report and monitor 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. We currently are using 4-5 hours per week of administrative overhead time to monitor the Manufacture Fair Price (MFP) program alone the time requirement would increase even further with a 340B rebate model. Signature Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. In addition to our 8 in house pharmacies, our CHC currently partners with 93 contract pharmacies to increase access to affordable medications for our patients across our service area. 6 Internal NACHC assessment (99 responses). 7 Ibid. 6 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 101 different pharmacy locations (internal and contract) to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in northeast Ohio, particularly rural Ashtabula County, with very limited options to access affordable medications. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 In Ohio, 81 pharmacies closed in 2025 after 215 pharmacies closed in 2024. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 Internal NACHC survey data 7 statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Studies have estimated that approximately 50% of patients do not take their medications as prescribed. Noncompliance can lead to worsened disease progression, increased hospitalization rates, higher healthcare costs, and increased mortality. High out of pocket costs, confusion about complex medication regimens, and logistical challenges remain leading factors of patient noncompliance. Signature Health aims to reduce these barriers by using 340B revenue to offer support and solutions for our patients. Signature Health offers sliding scale discount on prescription medications, directly passing our 340B savings back to qualified patients by using our actual 340B acquisition cost in the calculation of the patients cost. We are able to offer medications at the lower costs for patients because we 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 are able to purchase at the reduced 340B cost. A 340B rebate model directly jeopardizes this, as we would no longer have access to upfront reduced medication prices. To further assist with medication adherence, we offer free compliance packaging, which organizes patients medications in daily blisters, similar to a pill box. These packages are completed by pharmacy staff members allow and patients to ensure that they are taking all of their medications at the appropriate times. Many of our patients are on 10 or more medications daily and rely on this packaging to remain compliant and on track with their prescriptions. Additionally, Signature Health offers free home delivery of medications to our patients. Many patients struggle with reliable transportation, and public transportation is not always readily available, particularly in the rural areas we serve. We offer free same day or next day delivery of prescription medications to patients so that they may receive their medications without having to worry about how they will be able to get to the pharmacy. We use 340B revenue to fund this service, as we do not charge any fees to our patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. With the implementation of the Inflation Reduction Act and Maximum Fair Price rebates, Signature Health is already seeing the impact of delayed rebates. As one example, a medication, Xarelto, was ordered in on March 10, 2026 to fill a prescription on March 11. Our payment for that medication purchase was due to our wholesaler, AmerisourceBergen, on March 25. Through the MFP process, the rebate was not approved by the manufacturer until March 31, which was 20 days after the prescription was filled. Furthermore, the rebate was not actually deposited into our 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 account until April 7,, 2026, a full 27 days after the prescription was filled and 13 days after our payment was due to our wholesaler. CHCs are essentially providing interest free loans to manufacturers as we wait for rebates to process and deposit, placing the financial burden of these models on the safety net providers with already thin margins. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 10 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost Signature Health $1,636,953 to purchase these 10 drugs under the proposed rebate model., In 2025, our organization spent $51,364 to purchase these same drugs at the 340B ceiling price. This represents an over 3000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Signature Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides health screenings in rural areas, as well as our home delivery of medications. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a community health worker or a behavioral health consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,426 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Signature Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Signature Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $461,363. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Signature Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $136,413. This number could exceed $700,000 monthly by 2028 with the inclusion of the next 2 cycles of MFP drugs Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution, and jeopardizes the care of thousands of patients, as our organization will either need to reduce 12 service offerings or risk financial stability. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Signature Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Signature Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $81,848. Concerningly, we are seeing a rebate denial/misidentification of claims rate of 28% with the current Inflation Reduction Act/Manufacturer Fair Price model. A 28% denial rate for a 340B rebate model would equate to over $450,000 in losses for the first 10 drugs alone. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. 14 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Conclusion Signature Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally 15 impossible to provide the sliding fee scale and steeply discounted medications required by law. Signature Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Signature Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Kelley Sullivan Dragar, PharmD Chief Pharmacy Officer Signature Health SIGN
HRSA-2026-0001-1722Valley Wide Health Systems2026-04-17T04:00Z3,251 chars
See attached file(s) TO: Mr. Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton, Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Linda DeHerrera, patient board member of Valley-Wide DATE: Apr. 17, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 My name is Linda DeHerrera, and I am a patient board member of Valley-Wide Health Systems. I have served in this capacity for seven years. Valley-Wide is a Federally Qualified Health Center providing primary and preventive care at 34 service sites located throughout 14 rural counties in Southern Colorado covering over 31,000 square land miles. Valley-Wide provides medical, dental, behavior health, pharmacy, physical therapy, and crisis services to 35,907 patients. The potential 340B Rebate Model Pilot Program, as proposed by the Health Resources and Services Administration (HRSA), would be detrimental to Valley-Wides financial operating margins and it would directly and negatively impact me, as a patient. I am a resident of rural America, living where many individuals work diligently each day to meet basic needs. I am deeply appreciative of the critical services provided by Valley-Wide Health Systems to both myself and members of my community. In addition to being a patient, I serve as a Board Member because I strongly support the mission of Community Health Centers and the comprehensive care they deliver, including medical, dental, and behavioral health services. These services are made possible in part through 340B program savings, which play a vital role in maintaining access to affordable care in rural communities. My role on the Board is to represent and advocate for individuals in our community, particularly those who are underserved and face ongoing economic challenges. The services provided by Valley-Wide Health Systems are essential to the health and well-being of our population. Requiring patients to travel outside of our region for care would impose significant financial and logistical burdens. Without access to these local services, many individuals would be forced to forgo necessary medical care and affordable medications, resulting in serious consequences for both individual and community health. I urge you to reconsider a 340B rebate model and, at the very least, exempt CHCs from any proposed or pilot rebate model for the 340B program. The ultimate goal of the program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and provide discounted medications to patients upfront. CHCs are already statutorily required to pass the discounted price onto the patient ensuring that we, the patients, see the full, intended benefit of the program. Personally, the 340B program allows me to stay healthy, manage my health, and afford the medications that I, and my community members need. Respectfully, Linda L. DeHerrera
HRSA-2026-0001-1723Marci J. · United States2026-04-17T04:00Z1,858 chars
My name is Marci, and I am a Public Health leader at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications and on the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing program-related uncertainty. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs, including clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can cause real harm to vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Sincerely, Marci Hillsboro, OR
HRSA-2026-0001-1724Waimanalo Health Center2026-04-17T04:00Z42,865 chars
See attached file(s) 41-1347 Kalaniana`ole Hwy Waimnalo, HI 96795 (808) 259-7948 www.waimanalohealth.org April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Waimanalo Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Waimanalo Health Center has been able to cover operational losses with our 340B savings. We have one in-house pharmacy, we do not have contract pharmacies. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Waimanalo Health Center (WHC) is a community-based non-profit 501(c)3 corporation incorporated in 1989 and located in Waimanalo on the windward side of the island of O`ahu. As its mission states, Waimanalo Health Center is rooted in Native Hawaiian values and devoted to improving the health and wellness of all people, regardless of ability to pay, by providing comprehensive primary and preventive health care services of the highest quality. WHC became a Federally Qualified Health Center (FQHC) in 1994. In 2025, WHC served 6,451 patients through 32,469 visits, 8% are uninsured, 54% are Medicaid, 26% are private insurance, and 12% are Medicare. The majority of patients, 51.54% are at 100% and below the federal poverty level, 46% are Native Hawaiian. Aside from our in-house pharmacy services, WHC provides comprehensive primary care, behavioral health, vision, dental, cultural health, health promotion disease prevention, transportation, eligibility assistance, mobile medicine, and school based health services across 5 sites. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Waimanalo Health Center in particular, this means it will impact: 22,409 340B scripts. In CY 2025, WHC served 6,451 patients. 10% of our 340B savings used to cover administrative costs. 340B revenue/savings used to cover pharmacy operations, medical personnel, and software/hardware needed for operations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Waimanalo Health Center provided $438,007 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Waimanalo Health Center anticipates needing an additional 1.0 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Waimanalo Health Center anticipates increased costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 WHC will need to hire 1.0 FTE to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 12 hours/week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Waimanalo Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. WHC estimates that $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6,451 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $65,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. 7 Internal NACHC assessment (99 responses). 8 Ibid. One-Time Integration Costs: We anticipate high upfront costs of about $10,000 to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 12hrs/wk hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Internal NACHC survey data including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $771,972 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $15,156 to purchase these same drugs at the 340B ceiling price. This represents a 5,000% increase in upfront capital required for procurement. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Waimanalo Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back lower or non-revenue-generating but essential services, requested by the community, such as school health services or mobile medicine to serve those who are homeless even as we prepare for cuts to Medicaid. Operating Hours: We anticipate needing to reduce our clinic hours by 8 hours per week, specifically impacting those who work during the day and can only come to evening hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund staff for much needed supportive and outreach services to engage patients in primary care, the first step to improving their health status. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 250 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Waimanalo Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Waimanalo Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $771,972. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Waimanalo Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $64,331. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Waimanalo Health Center, the risk of our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Waimanalo Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 25% denial rate would result in a net annual loss of $192,993. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Waimanalo Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Waimanalo Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Waimanalo Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Joseph Adriano (jaadriano@waimanalohealth.org), CFO, or Kevin Lei (kevlei@waimanalohealth.org), Director of Pharmacy. Sincerely, Mary Frances Oneha, APRN, PhD, FAAN CEO, Waimanalo Health Center
HRSA-2026-0001-1725Amite County Medical Services, Inc.2026-04-17T04:00Z20,877 chars
See attached file(s) Amite County Medical Services, Inc. (ACMS) is a Federally Qualified Health Center (FQHC) serving rural, medically underserved populations in Southwest Mississippi. ACMS provides comprehensive primary care, dental, behavioral health, and enabling services to a predominantly low-income patient population, including uninsured and underinsured individuals. This response addresses the potential operational, financial, and patient care impacts of implementing a 340B Rebate Model Pilot Program. 1. Current Use of the 340B Program ACMS utilizes the 340B Drug Pricing Program to ensure access to affordable prescription medications for our patients. The program allows ACMS to purchase medications at reduced cost and pass those savings directly to patients through discounted prescriptions. In addition, ACMS reinvests 340B savings to expand access to critical healthcare services that are otherwise not financially sustainable in a rural setting. Specifically, 340B savings support: No-cost mental health counseling services, which address significant behavioral health needs in a region with limited provider availability No-cost nutrition counseling services provided by a registered dietitian, supporting chronic disease management, including diabetes, hypertension, and obesity These services are integrated into our care delivery model and are essential to improving patient outcomes and reducing overall healthcare costs. 2. Operational Impact of a Rebate Model Transitioning from an upfront discount model to a rebate-based system would significantly impact ACMS operations. Under the current model, ACMS receives immediate cost savings at the point of purchase, allowing for predictable cash flow and timely reinvestment into patient care services. A rebate model would require ACMS to pay full price for medications upfront and wait for reimbursement, creating: Cash flow challenges, particularly for a rural health center operating on narrow margins Delays in accessing funds, limiting the ability to maintain current levels of service Increased financial risk, particularly if rebates are delayed, disputed, or denied For ACMS, even short-term delays in rebate payments could directly impact our ability to sustain discounted pharmacy services and reinvestment activities. 3. Administrative and Infrastructure Burden Implementation of a rebate model would introduce substantial administrative complexity. ACMS would need to develop or expand infrastructure to: Track eligible 340B claims at a detailed level Submit rebate requests and reconcile payments Manage denials, discrepancies, and appeals Ensure ongoing compliance with program requirements These activities would require additional staffing, training, and potentially new information technology systems. For small and rural providers, these added administrative demands could divert limited resources away from patient care. 4. Impact on Patient Access and Services The 340B program is foundational to ACMSs ability to provide affordable medications and comprehensive services. A rebate model could negatively affect patient access in several ways: Reduced availability of discounted prescriptions at the point of care, if financial constraints limit medication purchasing Potential scaling back of services funded through 340B savings, including mental health counseling and nutrition services Increased barriers to care for vulnerable populations, particularly uninsured and low-income patients Any disruption to the current model would disproportionately affect rural communities with already limited healthcare access. 5. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 6. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 7. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Amite County Medical Services, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Amite County Medical Services, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Amite County Medical Services, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Sally Toler, Executive Director at stoler@acmsinc.org. Amite County Medical Services, Inc. (ACMS) is a Federally Qualified Health Center (FQHC) serving rural, medically underserved populations in Southwest Mississippi. ACMS provides comprehensive primary care, dental, behavioral health, and enabling services to a predominantly low-income patient population, including uninsured and underinsured individuals. This response addresses the potential operational, financial, and patient care impacts of implementing a 340B Rebate Model Pilot Program. 1. Current Use of the 340B Program ACMS utilizes the 340B Drug Pricing Program to ensure access to affordable prescription medications for our patients. The program allows ACMS to purchase medications at reduced cost and pass those savings directly to patients through discounted prescriptions. In addition, ACMS reinvests 340B savings to expand access to critical healthcare services that are otherwise not financially sustainable in a rural setting. Specifically, 340B savings support: No-cost mental health counseling services, which address significant behavioral health needs in a region with limited provider availability No-cost nutrition counseling services provided by a registered dietitian, supporting chronic disease management, including diabetes, hypertension, and obesity These services are integrated into our care delivery model and are essential to improving patient outcomes and reducing overall healthcare costs. 2. Operational Impact of a Rebate Model Transitioning from an upfront discount model to a rebate-based system would significantly impact ACMS operations. Under the current model, ACMS receives immediate cost savings at the point of purchase, allowing for predictable cash flow and timely reinvestment into patient care services. A rebate model would require ACMS to pay full price for medications upfront and wait for reimbursement, creating: Cash flow challenges, particularly for a rural health center operating on narrow margins Delays in accessing funds, limiting the ability to maintain current levels of service Increased financial risk, particularly if rebates are delayed, disputed, or denied For ACMS, even short-term delays in rebate payments could directly impact our ability to sustain discounted pharmacy services and reinvestment activities. 3. Administrative and Infrastructure Burden Implementation of a rebate model would introduce substantial administrative complexity. ACMS would need to develop or expand infrastructure to: Track eligible 340B claims at a detailed level Submit rebate requests and reconcile payments Manage denials, discrepancies, and appeals Ensure ongoing compliance with program requirements These activities would require additional staffing, training, and potentially new information technology systems. For small and rural providers, these added administrative demands could divert limited resources away from patient care. 4. Impact on Patient Access and Services The 340B program is foundational to ACMSs ability to provide affordable medications and comprehensive services. A rebate model could negatively affect patient access in several ways: Reduced availability of discounted prescriptions at the point of care, if financial constraints limit medication purchasing Potential scaling back of services funded through 340B savings, including mental health counseling and nutrition services Increased barriers to care for vulnerable populations, particularly uninsured and low-income patients Any disruption to the current model would disproportionately affect rural communities with already limited healthcare access. 5. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 6. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 7. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Amite County Medical Services, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Amite County Medical Services, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Amite County Medical Services, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Sally Toler, Executive Director at stoler@acmsinc.org.
HRSA-2026-0001-1726PureView Health Center2026-04-17T04:00Z44,114 chars
See Attached Letter April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of PureView I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PureView anticipates a loss of $637,000 to $2.6 million from entity-owned pharmacy operations and 40% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. At PureView Health Center, we're more than just a healthcare provider; we're your partner in wellness, dedicated to offering comprehensive, patient-centered care that truly makes a difference. Located in the heart of our community, our mission is to ensure every individual has access to high-quality healthcare, regardless of their circumstances. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was 2 created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PureView Health Center in particular, this means it will impact: 9700 Patients Admin costs $180,000 Inability to use these savings for Wrap Around Services such as case management, food packs, medication management services, and access to other community resources We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PureView Health Center provides sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PureView Health Center anticipates needing 3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PureView Health Center anticipates an increase of $60,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 PureView Health Center anticipates needing 3 additional FTEs due to the administrative and financial burden, in addition to pharmacy staff to manage inventory appropriately. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We anticipate having to face up-front funds of anywhere between $600,000 to $2.6 million dollars. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Pureview Health Center estimates that 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PureView Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We predict that $60,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 9700 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2.3 million annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We will be forced to add on additional IT aspects to our software system, PioneerRx, in order to create the needed reporting requirements and submit to different platforms. This increases our cost and adds administrative time. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The necessary implementation is estimated around $80,000 in order to set up the needed automation to submit reports, in addition to staffing and training. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Lewis and Clark county, Montana, with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee 8 discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. PureView Health Center provides discounted medications for patients on a slide. They are then able to afford to stay compliant with their treatments and avoid future emergency care, in addition to preventing chronic issues. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2.25 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $575k to purchase these same drugs at the 340B ceiling price. This represents a 391% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PureView Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile unit, case management 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 services and clinical pharmacy services for patients with chronic diseases that are in high need of medication management. Operating Hours: We anticipate needing to reduce our clinic hours 6 hours per week, specifically impacting weekend hours and walk in appointments, which are vital to those patients who are unable to miss work during the week to receive care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Peer Support worker, Community Health Worker and Care Managers, which directly increases wait times for patients in crisis. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1300 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PureView Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PureView Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $549k. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PureView Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by 390% in 2026, 654% in 2027 and 914% in 2028. 11 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit & utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $300k annually funds that are currently dedicated to assist patients who are underinsured or uninsured. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PureView Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PureView Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 13 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PureView Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PureView Health Center believes that a 340B rebatepilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 PureView Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Erin Guzynski, Pharmacy Director, at erin.guzynski@pureviewhealthcenter.org Sincerely, Michelle Marten PureView Health Center Michelle.marten@pureviewhealthcenter.org
HRSA-2026-0001-1727Colquitt Regional Health System2026-04-17T04:00Z8,885 chars
Colquitt Regional Health System response to RFI HHS Docket No. HRSA-2026-03042. All comments are contained within the attached document for your review. 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Administrator Engels: Colquitt Regional Health System and the Hospital Authority of Colquitt County appreciate the opportunity to provide context and information related to the potential 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) and its impact on our operations. Over the last 20 years of participation, we have followed guidance updates, rules interpretations, and potential legislation to craft and continually conceptualize a version for our 340B program that is fully compliant with the statute and seeks to fulfill the intent to stretch scare federal resources and increase access to medications and healthcare services to patients in need. We have directly applied savings to growing local cancer and dialysis services, increased the regional availability of Hospice care, and expanded our retail pharmacy to allow patients of the health system to directly purchase their medications at 340B costs without the risks of adding numerous contract pharmacy arrangements. We are a 155-bed, independent, rural teaching hospital and health system serving a 7-county primary market and approximately 225,000 patients in Southwest Georgia. Our largest services include obstetrics, oncology, radiation oncology, orthopedics, general surgery/plastics, urology/urogynecology, cardiology, and primary and family care. Over 70% of our revenue is now produced through outpatient services, and the growth of outpatient infusions/injections and the impact of specialty pharmacy has caused our drug spend to swell to almost $19 million in FY25, a 100% increase in just 5 years. The 340B program has been very helpful to control that spending increase, and our savings have grown 50% over the same period while keeping costs in line with Medicare and Medicaid reimbursement, which makes up 70% of our payor mix. I want to summarize some impact briefs through a bulleted format in hopes that it best summarizes our thoughts on what potential policy shift to a rebate model means to an organization of our size, and overall general concerns about the precedent this action sets as well as potential future implications. Specific Concerns: - There has been insufficient testing of the Beacon platform, as well as demonstration of how the manufacturers will use the claims data to determine eligibility 2 o The Medicare Maximum Fair Price (MFP) program uses a similar system/setup to the proposal for the rebate pilot program. For the 10 drugs included in the request for MFP, Colquitt Regional had 42 qualifying dispensations in February of this year based on the requirements. Out of the 42, nineteen (45%) processed correctly. Twenty-three (23) processed incorrectly. After reconciliation, we were able to show that 22 of those 23 were in fact 340B drugs and requested they be reversed in the Beacon system. We expect similar results under a rebate model, but with exponentially more qualifying transactions which will affect our cash flow. - In consideration of the above, volume makes this problem even worse. Reminder that we are an independent rural healthcare system with only 155 inpatient beds. Our annual volume of 340B eligible dispensations include: o Hospital claims 1,197,000 transactions o Retail claims 48,525 transactions o For the 10-drug subset defined for the potential pilot program: Hospital 2028 transactions Retail 2210 transactions - To purchase these 10 proposed medications off WAC prices then wait for 340B rebate would require us to float the following additional amounts as an expense until the rebate is received. Estimates are based on a 3-month purchase and rebate window: o Hospital $3,600 o Retail - $296,000 This increase will be passed on directly to the patient. Currently, our charge formula uses 340B cost + dispensing fee for eligible patients. - Annual costs to manage our 340B program include: o Third party split billing software - $70,000 o Independent auditor and management consultant- $45,000 o 340B Compliance Manager - $90,000 - Sentry DS, our current TPA, has already quoted us an additional cost of $45,000 to add functionality that helps to automate the Beacon process, plus an ongoing annual fee of $25,000 for support/service. - Additional personnel costs will also be incurred for reconciliation of claims and rebates. The initial estimation is 40 hours per month ($1500/month) that will be scaled as the potential program grows, 12 of which would be dedicated to submission and the other 12 to reconciliation. Administrative oversight will also increase that number by 20%. - Our wholesaler agreements are setup under a cost-minus structure and 30-day payment terms. The amount of the cost minus is directly affected by how many days we are willing to prepay into a wholesaler held account and determined by a retrospective review of purchase history, i.e. the more we spend quarter to quarter, the more we are expected to deposit. Requiring us to pay higher prices will likewise require a higher deposit amount to the tune of ~$1.2 million additional dollars. 3 - Drug manufacturers will be receiving incomplete transaction data per current specs in order to effectively determine eligible claims. The financial constructs of an organization are complex and widely varying but ultimately determine patient relationship with a health system. The data elements requested in the claims data do not paint that full picture yet ultimately could be used to refute a rebate being paid. - In addition, manufacturers continue to be allowed to make individual requests for claims level data (CLD) outside the purview of HRSA and creating an additional, huge administrative burden. In March and April 2026, 5 vendors have now served notice that they will require CLD as early as May 1st. While we still do not understand fully the possible recourse of such actions and how they might use the data to request, it is clear manufacturers will at least review and aggregate the data in order to formulate a new angle to attack the credibility of the covered entities and the entire 340B program, while likewise providing them with incomplete information that could lead to erroneous audits in the future. To the comments specifically sought by your office, Mr. Engels: - While we are completely against the rebate model, we would respectfully request that HRSA commit to: o Monitoring the rebate denials by manufacturer, both as a % of total and relative to their peers o Average turnaround time by manufacturer for review and issuance of rebates. - Further, it is our position that HRSA should add language to this provision that addresses penalties to manufacturers for overt disregards to precedence, guidance, and all other previous forms of quality assurance. - Likewise, we believe that for at least the first 12 months, manufacturers should not be allowed the use of any form of automation or artificial intelligence in reviewing claims submissions until such time those programs can be vetted and approved by the Administrator or his delegate. - Finally, we believe that manufacturers should be required to submit procedures to each covered entity on how to escalate denials with their company, when necessary. 4 In short, a rebate program will greatly increase regulatory burdens and administrative costs that ultimately decrease savings, while continuing to increase the stress and friction between manufacturers and providers. Even more convicting is that the concept of a rebate program does not actually fix the program or provide what it needs the most: bipartisan legislation that clarifies the patient definition, clearly defines regulatory requirements, and seeks to enhance the integrity and codify the future of the 340B program. I cannot overstate the importance of this program and the impact of the savings on our health system, and we are willing to do anything needed to work with our area legislators and federal agency partners to secure its future in rural areas. Thank you again for the opportunity to collaborate and issue remarks, and please let us know if we can clarify or add any necessary information. Regards, Matthew Clifton Authorizing Official, Vice President Ancillary Services Colquitt Regional Health System DSH110105 Moultrie, GA 31776
HRSA-2026-0001-1728(no commenter metadata)2026-04-17T04:00Z6,343 chars
See attached file(s) SingingRiverHealthSystem.com Improving Health. Saving Lives. Gulfport 15200 Community Rd. Gulfport, MS 39503 (228) 575-7000 Ocean Springs 3109 Bienville Blvd. Ocean Springs, MS 39564 (228) 818-1111 Pascagoula 2809 Denny Ave. Pascagoula, MS 39581 (228) 809-5000 Dear Health Resources Services Administration (HRSA) Re: 340B Rebate Model Pricing Program I am submitting these comments in my role as the Primary Contact for the 340B Drug Pricing Program for a county-owned, not-for-profit health system in Mississippi. As a professional who has worked in the 340B program for more than twenty years, it is with heartfelt passion as a servant leader in our community that I share the importance of keeping intact the upfront discount model that we rely on to provide care for our patients. I appreciate the opportunity to provide input regarding the proposed Manufacturer Rebate Model that would catastrophically and fundamentally alter, not only the intent of the 340B program, but our ability as a Safety Net provider to serve our patients. Statutory Intent of the 340B Program Section 340B of the Public Health Service Act was enacted with clear statutory intent: to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Congress designed the program to strengthen the healthcare safety net by ensuring that resources remain with providers serving the nations most vulnerable populations. The upfront discount at the point of purchase is not incidental to this intention, it is the mechanism by which it is achieved. Predictable, immediate savings enable covered entities to reinvest those resources directly into patient care, community services, and access initiatives that would otherwise be financially unsustainable. Importance of the Program to Our Community Our health system serves a predominantly rural and medically underserved region in Mississippi, a state with some of the highest rates of chronic disease, poverty, and uninsured individuals in the country. As a county-owned health system, we exist to provide care regardless of a patients ability to pay. Mississippi has not expanded Medicaid, further increasing the number of individuals who rely on our facilities as their only access to care. Each year, the uncompensated and undercompensated care we provide to our community far exceeds the total value of the discounts realized through the 340B program. The program does not generate excess revenue for our organization; instead, it partially offsets the extraordinary financial burden of serving uninsured and underinsured patients. Without 340B savings, our ability to absorb that uncompensated care obligation would be severely compromised. Risks of a Rebate-Based Model Proposals to replace the existing upfront discount model with a rebate-based framework would shift material financial and operational risk from manufacturers to covered entitiesdirectly contradicting the programs statutory purpose. A rebate-based approach would require safety-net providers to purchase medications at full or near-full price and wait for reimbursement, introducing cash-flow uncertainty and administrative complexity that many public and rural hospitals are not equipped to manage. For county-owned systems operating on narrow margins and subject to bond covenant requirements, delayed or disputed rebates could threaten financial stability and compliance with fiscal obligations. SingingRiverHealthSystem.com Improving Health. Saving Lives. Gulfport 15200 Community Rd. Gulfport, MS 39503 (228) 575-7000 Ocean Springs 3109 Bienville Blvd. Ocean Springs, MS 39564 (228) 818-1111 Pascagoula 2809 Denny Ave. Pascagoula, MS 39581 (228) 809-5000 Such instability would inevitably lead to reductions in services, including: Charity care and medication assistance programs Access to high-cost or specialty medications Transportation and outreach services for rural patients Preventive and chronic disease management programs These outcomes would undermine the statutory goal of expanding access to care for eligible patients and would disproportionately harm communities that already face significant healthcare disparities. Program Integrity and Compliance We strongly support program integrity, transparency, and compliance with all 340B requirements. Our health system has invested substantial resources in internal controls, auditing, and oversight to ensure strict compliance with statutory and regulatory obligations. However, program integrity can be enhanced without dismantling the core structure Congress established. Upfront discounts are not a loophole or defect in the program. They are essential to its effectiveness and central to its statutory design. Shifting to a rebate-based model would not enhance compliance; rather, it would introduce fragmentation, inconsistent processes, and increased administrative risk for covered entities. Conclusion and Recommendations For more than two decades, I have witnessed 340B operate as Congress intendedstrengthening the safety net, preserving access to care, and allowing covered entities to responsibly steward limited resources on behalf of their communities. I respectfully urge HRSA to: 1. Preserve the upfront discount model as the foundation of the 340B program. 2. Avoid implementation of a mandatory manufacturer rebate framework that shifts financial risk to covered entities. 3. Ensure that any program integrity initiatives align with the statutory intent of supporting safety-net providers. 4. Consider the disproportionate impact structural changes would have on county-owned, rural, and safety-net health systems. For our health system and the underserved population of our patients, continuation of the 340B program as originally designed is not a matter of preferenceit is essential to maintaining access to care and fulfilling Congresss intent. Thank you for the opportunity to submit these comments and for your consideration. Respectfully submitted, Lisa Fratesi, FACHE, MHA, RPh Executive Director of Pharmacy Singing River Health System Phone:228-818-2109 Email: lisa.fratesi@mysrhs.com
HRSA-2026-0001-1729Philadelphia FIGHT2026-04-17T04:00Z83,043 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Philadelphia FIGHT, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct an in-depth analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Philadelphia FIGHT anticipates a loss of up to $2 million annually for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and lost discounts. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Our own costs are expected to increase by approximately. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Philadelphia FIGHT, this means it will impact: Some 80,000 annual 340B prescriptions filled for our nearly 8,000 patients served annually. Add to the roughly $8 million in annual costs to our 340B program that we already experience. Erode available funding for uncompensated care, free and discounted patient medications and expanded CHC services like Podiatry, Dermatology, case management, health education, peer navigation, transportation, among many other benefits to our patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Philadelphia FIGHT provided $2,623,098 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Philadelphia FIGHT anticipates needing .75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Philadelphia FIGHT anticipates an increase of $570,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Philadelphia FIGHT anticipates the need to add an additional .75 FTE to address these demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Our own CHC anticipates the additional staff to cost approximately $60,000 annually, while vendor fees and other costs will be on the order of $570,000 annually and lost discounts and denied rebate claims will cost nearly $2 million annually as the rebate program expands. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Some 30 person hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Philadelphia FIGHT urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $12,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 8,000 patients, the total projected increase in expenses, including labor, IT, and carrying costs is estimated at $95,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 146 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 146 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Philadelphia and surrounding counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Philadelphia FIGHT currently offers sliding fee discounts that range from $0-$25 based on a patients ability to pay, as well as providing 340B drugs at cost and in many cases waiving this cost based on need. We also leverage the 340B discounts to provide additional specialty and supportive services that would otherwise be unavailable to our patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $431,341 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $39,230 annually to purchase these same drugs at the 340B ceiling price. This represents a 999.5% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Philadelphia FIGHT anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as educational services provided to over 2,500 HIV patients. These critical services which offer additional health information and guidance on treatment would be lost. Operating Hours: We anticipate needing to reduce our clinic hours by 4 hours per week, specifically impacting our pediatric clinic, which currently provides monthly Saturday clinic sessions, so that parents with jobs can have the flexibility to bring their children in for care on the weekends. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund social services staff and community health workers which assist patients in access insurances and support with their medical treatment and behavioral health needs. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,760 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Philadelphia FIGHT asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Philadelphia FIGHT estimates its 2027 Annual Rebate Opportunity Cost to be approximately $63,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Philadelphia FIGHT estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $33,000. In future years as the rebate program grows that amount will increase to $735,000 monthly. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $968,000 annuallyfunds that are currently dedicated to education services, dental services and other wrap around care for our patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Philadelphia FIGHT, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Philadelphia FIGHT urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $64,701. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Philadelphia FIGHT strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Philadelphia FIGHT believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Philadelphia FIGHT appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Greg Landistratis at glandistratis@fight.org Respectfully, Jose A. Benitez Jose A Benitez, MSW, FCPP Chief Executive Officer April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Philadelphia FIGHT, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct an in-depth analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Philadelphia FIGHT anticipates a loss of up to $2 million annually for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and lost discounts. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Our own costs are expected to increase by approximately. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Philadelphia FIGHT, this means it will impact: 2 Some 80,000 annual 340B prescriptions filled for our nearly 8,000 patients served annually. Add to the roughly $8 million in annual costs to our 340B program that we already experience. Erode available funding for uncompensated care, free and discounted patient medications and expanded CHC services like Podiatry, Dermatology, case management, health education, peer navigation, transportation, among many other benefits to our patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance uses and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Philadelphia FIGHT provided $2,623,098 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Philadelphia FIGHT anticipates needing .75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Philadelphia FIGHT anticipates an increase of $570,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 7 Internal NACHC assessment (99 responses). 5 Philadelphia FIGHT anticipates the need to add an additional .75 FTE to address these demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Our own CHC anticipates the additional staff to cost approximately $60,000 annually, while vendor fees and other costs will be on the order of $570,000 annually and lost discounts and denied rebate claims will cost nearly $2 million annually as the rebate program expands. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Some 30 person hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Philadelphia FIGHT urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $12,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves nearly 8,000 patients, the total projected increase in expenses, including labor, IT, and carrying costs is estimated at $95,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 146 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. 8 Ibid. 6 Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 146 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Philadelphia and surrounding counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Philadelphia FIGHT currently offers sliding fee discounts that range from $0-$25 based on a patients ability to pay, as well as providing 340B drugs at cost and in many cases waiving this cost based on need. We also leverage the 340B discounts to provide additional specialty and supportive services that would otherwise be unavailable to our patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $431,341 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $39,230 annually to purchase these same drugs at the 340B ceiling price. This represents a 999.5% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Philadelphia FIGHT anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as educational services provided to over 2,500 HIV patients. These critical services which offer additional health information and guidance on treatment would be lost. Operating Hours: We anticipate needing to reduce our clinic hours by 4 hours per week, specifically impacting our pediatric clinic, which currently provides monthly Saturday clinic sessions, so that parents with jobs can have the flexibility to bring their children in for care on the weekends. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund social services staff and community health workers which assist patients in access insurances and support with their medical treatment and behavioral health needs. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,760 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. 10 Philadelphia FIGHT asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Philadelphia FIGHT estimates its 2027 Annual Rebate Opportunity Cost to be approximately $63,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Philadelphia FIGHT estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $33,000. In future years as the rebate program grows that amount will increase to $735,000 monthly. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $968,000 annually funds that are currently dedicated to education services, dental services and other wrap around care for our patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Philadelphia FIGHT, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Philadelphia FIGHT urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based 11 on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $64,701. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. 13 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Philadelphia FIGHT strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Philadelphia FIGHT believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Philadelphia FIGHT appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Greg Landistratis at glandistratis@fight.org Respectfully, Jose A. Benitez Jose A Benitez, MSW, FCPP Chief Executive Officer
HRSA-2026-0001-1730PureView Health Center2026-04-17T04:00Z44,114 chars
See Attached Letter April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of PureView I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PureView anticipates a loss of $637,000 to $2.6 million from entity-owned pharmacy operations and 40% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. At PureView Health Center, we're more than just a healthcare provider; we're your partner in wellness, dedicated to offering comprehensive, patient-centered care that truly makes a difference. Located in the heart of our community, our mission is to ensure every individual has access to high-quality healthcare, regardless of their circumstances. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was 2 created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PureView Health Center in particular, this means it will impact: 9700 Patients Admin costs $180,000 Inability to use these savings for Wrap Around Services such as case management, food packs, medication management services, and access to other community resources We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PureView Health Center provides sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PureView Health Center anticipates needing 3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PureView Health Center anticipates an increase of $60,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 PureView Health Center anticipates needing 3 additional FTEs due to the administrative and financial burden, in addition to pharmacy staff to manage inventory appropriately. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We anticipate having to face up-front funds of anywhere between $600,000 to $2.6 million dollars. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Pureview Health Center estimates that 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PureView Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We predict that $60,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 9700 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2.3 million annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We will be forced to add on additional IT aspects to our software system, PioneerRx, in order to create the needed reporting requirements and submit to different platforms. This increases our cost and adds administrative time. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The necessary implementation is estimated around $80,000 in order to set up the needed automation to submit reports, in addition to staffing and training. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Lewis and Clark county, Montana, with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee 8 discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. PureView Health Center provides discounted medications for patients on a slide. They are then able to afford to stay compliant with their treatments and avoid future emergency care, in addition to preventing chronic issues. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2.25 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $575k to purchase these same drugs at the 340B ceiling price. This represents a 391% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PureView Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile unit, case management 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 services and clinical pharmacy services for patients with chronic diseases that are in high need of medication management. Operating Hours: We anticipate needing to reduce our clinic hours 6 hours per week, specifically impacting weekend hours and walk in appointments, which are vital to those patients who are unable to miss work during the week to receive care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Peer Support worker, Community Health Worker and Care Managers, which directly increases wait times for patients in crisis. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1300 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PureView Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PureView Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $549k. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PureView Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by 390% in 2026, 654% in 2027 and 914% in 2028. 11 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit & utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $300k annually funds that are currently dedicated to assist patients who are underinsured or uninsured. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PureView Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PureView Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 13 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PureView Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PureView Health Center believes that a 340B rebatepilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 PureView Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Erin Guzynski, Pharmacy Director, at erin.guzynski@pureviewhealthcenter.org Sincerely, Michelle Marten PureView Health Center Michelle.marten@pureviewhealthcenter.org
HRSA-2026-0001-1731Community Healthcare Network, Inc.2026-04-17T04:00Z27,240 chars
See attached file(s) ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Community Healthcare Network, Inc. and the 38,635 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Community Healthcare Network is comprised of 14 healthcare sites in medically underserved areas across Brooklyn, the Bronx, Manhattan, and Queens, along with a fleet of medical mobile vans. The organization provides primary and behavioral health care, dental, nutrition, and needed support services for patients of all ages, regardless of their ability to pay. No one is turned away. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of $130,000 to $630,000 from entity-owned pharmacy operations and for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Community Healthcare Network, Inc. strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Community Healthcare Network, Inc., a 340B Rebate Model Pilot Program will impact: x Approximately 4,700 340B-Qualified prescriptions & administrations x Approximately 60% of low-income and uninsured patients served x Our ability to provide dental care, SUD treatment, mental health services, school- based health programs, care coordination, case management, direct patient care, strengthening the workforce, expanding services, covers losses for patients who utilize sliding-fee services, provide supports such as housing, transportation, food assistance, other enabling services not traditionally reimbursable. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. expand services and provide ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire one to three FTEs per internal estimates. We estimate the cost to hire additional staff to be approximately $300,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate $385,000 - $935,000 worth of upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. External Vendor Costs will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Community Healthcare Network, Inc. helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: x Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination; behavioral health services; dental services; mobile health programs, school-based health, enabling services like transportation or food assistance; our medication therapy management program for complex diabetic patients, etc. x The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. x Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: x A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. x A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. x A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. x A requirement to provide 340B rebates on a reasonable number of undispensed units. x A requirement to provide rebates at the unit level. x A prohibition on requiring BINs or PCNs on rebate claims. x A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: x Avoid cash-flow and borrowing challenges for covered entities. x Substantially reduce administrative burden on covered entities. x By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. x Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. x Improve rebate accuracy x And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. ADMINISTRATIVE OFFICE 44 W28th Street, 5th floor New York, NY 10001 Tel (212) 545-2400 Fax (212) 463-8411 www.chnnyc.org Elizabeth Krob Kellner Chair Robert Hayes President/CEO BRONX South Bronx 1002 Westchester Ave., Bronx, NY 10459 Tel (718) 320-4466 Fax (718) 991-3829 Tremont 1880 Bathgate Ave., Bronx, NY 10457 Tel (718) 294-5891 Fax (718) 294-2468 BROOKLYN Williamsburg 94-98 Manhattan Ave., Brooklyn, NY 11206 Tel (718) 388-0390 Fax (718) 486-5741 Crown Heights 1167 Nostrand Ave., Brooklyn, NY 11225 Tel (718) 778-0198 Fax (718) 221-8169 East New York 999 Blake Ave., Brooklyn, NY 11208 Tel (718) 277-8303 Fax (718) 277-4795 East New York Community Health Hub 2581 Atlantic Ave., Brooklyn, NY 11207 Tel (718) 495-6700 MANHATTAN Harlem 81 W. 115th St., New York, NY 10026 Tel (212) 426-0088 Fax (212) 426-8367 Washington Heights 511 W. 157th St., New York, NY 10032 Tel (212) 781-7979 Fax (212) 781-7963 Lower East Side 255 East Houston St., New York, NY 10002 Tel (212) 477-1120 Fax (212) 477-8957 Seward Park Campus School-Based Health Center 350 Grand St., Rm. 240, New York, NY 10002 Tel (212) 432-8490 Phoenix School-Based Health Center 504 W158th St. 5th FL, New York, NY 10032 Tel (917) 342-6600 QUEENS Long Island City 36-11 21st St., Long Island City, NY 11106 Tel (718) 482-7772 Fax (718) 482-9648 Sutphin Boulevard 97-04 Sutphin Blvd., Jamaica, NY 11435 *Site is currently under construction Tel (718) 657-7088 Fax (718) 657-7092 Jamaica 89-44 164th St., Jamaica, NY 11432 Tel (718) 523-2123 Fax (718) 523-5833 Medical Mobile Vans Tel (212) 545-2495 Satellite Office Locations: 345 E. 102nd St., 4th Fl., New York, NY 10029 Tel (212) 360-8080 Fax (212) 828-2325 117 Boreum Street, Brooklyn NY 11206 investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Alan Wengrofsky; awengrofsky@chnnyc.org. Sincerely, CFO and EVP
HRSA-2026-0001-1732Daniel DeFreece · Nebraska City, NE, United States2026-04-17T04:00Z5,917 chars
Thank you for your time and attention. 'If CHI Health. St. Mary's 1301 Grundman Blvd Nebraska City, NE 68410 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Health St. Mary's, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Health St. Mary's that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Health St. Mary's relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate S. r Apr 20,2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Daniel Defat e, MD President CHI Health St. Mary's Nebraska City, NE Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 + CommonSpint ' As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1733Nevada Health Centers2026-04-17T04:00Z44,396 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Nevada Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nevada Health Centers anticipates a loss of greater than $850,000 from entity-owned pharmacy operations and around 50% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Established in 1977, Nevada Health Centers (NVHC) is a non-profit Federally Qualified Health Center program dedicated to providing access to quality healthcare throughout Nevada. NVHC operates 20 health centers; five mobile programs, including the Ronald McDonald Care Mobile, Mammovan, Nevada Childrens Health Project, Mobile Medical Services, and Mobile Dental Services; and seven Women, Infants, and Children offices in southern Nevada. Our core services include family medicine, dentistry, behavioral health, and pharmacy, and we accept Medicaid, Medicare, Nevada Check Up, and most private insurances. We also offer a sliding-fee discount program based on family size and income. For more information, visit www.nvhealthcenters.org. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Nevada Health Centers in particular, this means it will impact: Over 91,000 340B prescriptions per year Current 340B savings are used to support patient access throughout our organization, including pharmacy services, our rural health medical clinics, and ancillary programs, such as dental, behavioral health, and mobile services (medical, dental, and mammography). A reduction in these savings would affect current operating hours, the number of locations we operate, and the frequency of the services we offer. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Nevada Health Centers provide over $15,000,000 in sliding fee discounts in 2025, through discounted medication, medical and dental services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Nevada Health Centers anticipates needing four additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. These FTEs would include two informatics pharmacists, a senior accountant, and a 340B compliance specialist. External Vendor Costs: Given increased complexity, Nevada Health Centers anticipates an increase of $6,000 external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, Nevada Health Centers estimates the additional salary costs to be as much as $400,000 annually. Nevada Health Centers provides healthcare services to more than 50,000 Nevadans in urban, rural, and frontier communities throughout Nevada each year. Nevada Health Centers anticipates annual costs exceeding $4 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 20 hours per week will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Nevada Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $20,000 will be required simply to reach the baseline level of compliance before a single rebate is received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 50,000 unique patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at over $20,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend 5 hours per manager per day manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 63 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 63 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients across the state of Nevada with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 Internal NACHC survey data 7 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Nevada Health Centers, efforts are made to ensure prescription access and affordability for all patients, regardless of insurance status or ability to pay. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost over $4,000,000 to purchase only these 10 drugs under the proposed rebate model. Currently, our organization spends close to $3,000,000 to purchase all 340B medications used at our pharmacies. This represents an increase of over 8,000% in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Nevada Health Centers anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-net--revenue-generating but essential services, such as mobile health units, rural health clinics. Operating Hours: We anticipate needing to reduce our clinic hours per week, specifically impacting rural health and mobile services Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other clinical and support staff members. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 that prevents our over 11,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Nevada Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Nevada Health Centers estimates its 2027 Annual Rebate Opportunity Cost to be approximately over $1,000,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Nevada Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $500,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a $1.5 million line of credit, which would cost $100,000 annually in interest expenses. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Nevada Health Centers, the risk of our credit limit being reached or our services being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle down effect is immediate. Longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays Nevada Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of over $1,000,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Nevada Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Nevada Health Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Nevada Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact: Jeani Smith, PharmD, MBA, Chief Pharmacy Officer - jsmith@nvhealthcenters.org Sincerely, Walter B. Davis, CEO Nevada Health Centers
HRSA-2026-0001-1734(no commenter metadata)2026-04-17T04:00Z22,562 chars
See attached file(s) April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: I am the President for the Kansas Council of Health-System Pharmacy (KCHP), and on behalf of our pharmacy professional members across the state, KCHP appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). KCHP opposes the imposition of any rebate model in the 340B Drug Pricing Program. Discounts received under the 340B program have always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to 340B entities in Kansas, the vast majority of which are Critical Access Hospitals2, and all provide critical services to individuals across the state3. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacturer abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). 2 HRSA OPA. 340B Office of Pharmacy Affairs Information System, accessed April 17, 2026. https://340bopais.hrsa.gov/ 3 Kansas 340B. Kansas Hospital Association, accessed April 17, 2026. https://www.kha- net.org/CriticalIssues/AccessToCare/340BKansas/ have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one atChange Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Daniel Pons, PharmD, BCIDP KCHP President April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: I am the President for the Kansas Council of Health-System Pharmacy (KCHP), and on behalf of our pharmacy professional members across the state, KCHP appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). KCHP opposes the imposition of any rebate model in the 340B Drug Pricing Program. Discounts received under the 340B program have always been prospective. Shifting to a rebate model, even for a small number of drugs, creates serious risks to 340B entities in Kansas, the vast majority of which are Critical Access Hospitals2, and all provide critical services to individuals across the state3. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacturer abuse. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one atChange Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Daniel Pons, PharmD, BCIDP KCHP President
HRSA-2026-0001-1735MOUNTAINLANDS COMMUNITY HEALTH CENTER2026-04-17T04:00Z118,615 chars
FR Doc# 2026-03042 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountainlands Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. The scale and sustainability of nearly all programs offered by Mountainlands including sliding fee discounts on medical and dental visits and prescription and OTC medications, health education, outreach and enrollment, SUD treatment, pharmacy services, and mental health programs. 340B revenue is used to support staffing, rent, supplies and equipment wholly or in part for each of these programs. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Mountainlands Community Health Center provided over $52,000,000 in sliding fee discounts provided through discounted medications and medical services in 2025. Our pharmacy had more than 100,000 340B transactions in 2025 serving more than 20,000 patients, 51% of which are uninsured. ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Direct Administrative Costs: Approximately $224,000 attributed to the following annually: Independent 340B Audit Annual external audit Pharmacy Management & Inventory Systems (Partial Allocation) o Liberty pharmacy management system o FlexScan inventory management system 340B Program Personnel Dedicated Coordinator o Salary and benefits for 340B coordinator Pharmacy Leadership Time (Partial Allocation) o Oversight, compliance review, program management Pharmacist and Technician Time (Partial Allocation) o Internal audits o Cycle counts o Weekly eligibility reviews o Ongoing compliance monitoring Education and Training Costs o NACHC office hours participation o 340B University attendance o Conferences o Certification maintenance (e.g., ACE) Indirect Administrative Costs: Approximately $6,000 attributed to the following annually: OPAIS Maintenance and Recordkeeping Time spent maintaining accurate program records 340B Committee Activities Preparation and participation in quarterly meetings IT Support and Data Management System functionality support Data reconciliation iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for our organizations 340B Program administrative expenses are primarily related to staffing, information technology systems, compliance activities, and external support services. The most significant driver is personnel cost, including a dedicated 340B Specialist allocated approximately 30 hours per week, as well as additional time contributed by pharmacy leadership, technicians, and administrative staff to support audit activities, compliance monitoring, and program oversight. Information technology and software systems also represent a major cost driver, including the use and maintenance of split-billing and inventory management platforms such as Liberty, along with internal IT support required for system integration, data validation, and troubleshooting. Training and education are ongoing expenses, including participation in 340B-related conferences, certification programs, and compliance-focused learning opportunities necessary to maintain staff competency and ensure adherence to evolving program requirements. Additionally, external legal and compliance support, including consultation with legal counsel, contributes to administrative costs by supporting policy development, regulatory interpretation, and audit preparedness. Collectively, these cost drivers reflect the significant resources required to maintain compliance, ensure program integrity, and effectively manage 340B Program operations. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. Estimated increase in cost on 2026 IRA Medications Approximate New Annual Cost: $7,258,943.51 Current Annual Cost: $111,107.75 This represents 6533% increase in upfront capital required for procurement Estimated Increase in cost on 2027 IRA Medications Approximate New Annual Cost: $9,027,514.56 Current Annual Cost: $546,322.85 This represents 1652% increase in upfront inventory spend Estimated Increase in cost on 2028 IRA Medications Approximate New Annual Cost: $9,337,761.77 Current Annual Cost: $226,556.84 This represents 4121% increase in upfront inventory spend Estimates Annual 2026 Rebate Opportunity Cost and Loss of Cost Minus Pricing $730,060.89 (assuming a 10% denial rate on rebates) Estimates Annual 2027 Rebate Opportunity Cost and Loss of Cost Minus Pricing $926,857.73 (assuming a 10% denial rate on rebates) Estimates Annual 2028 Rebate Opportunity Cost and Loss of Cost Minus Pricing $966,378.33 (assuming a 10% denial rate on rebates) ii. Describe the methodology and assumptions used to develop these estimates. To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data accessed through the Apexus PVP Historical Purchase Report for 2025, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentage loss of prompt pay discount, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions regarding which drugs to keep in stock as well as inventory levels of rebate drugs. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The incremental administrative costs associated with a potential rebate model would primarily support expanded data management, claims processing, reconciliation, and audit functions. Specifically, these activities would include collecting and validating prescription-level data across pharmacy locations, preparing and submitting required data files to manufacturers or program administrators, and performing ongoing reconciliation to ensure that submitted claims align with dispensing records and eligibility requirements. Additional effort would also be required to track rebate payments, investigate discrepancies, and maintain documentation to support internal and external audit activity. Our current experience with MTF and Beacon for the IRA rebates take our Director of Pharmacy about 8 hours a week to track back which claims are 340B, which are retail, which ones were identified incorrectly and to go through good faith inquiries. This is a small percentage of our claims. We therefore know that it will take significantly more than 8 hours a week for a technician, pharmacist, or support staff to reconcile these rebate plans in a pilot program. To support these expanded responsibilities, our organization would likely need to hire an additional pharmacy technician dedicated to data collection, submission, and financial tracking activities. This role would be essential to ensure timely and accurate data reporting, as well as to follow the funds from submission through receipt, ensuring accountability and audit readiness. The transition of certain drugs from an upfront 340B discount model to a rebate-based model would significantly increase administrative burden and associated costs. Under the current upfront discount structure, savings are realized at the point of purchase, minimizing the need for ongoing financial tracking. In contrast, a rebate model introduces delays in realizing savings and requires substantial additional labor for claims submission, reconciliation, and payment tracking. It also increases complexity in audit preparedness, as organizations must maintain detailed documentation linking each dispensed claim to rebate eligibility and payment. As a result, the shift to a rebate model would not only increase staffing needs but also expand compliance risk and administrative overhead compared to the current model. Contesting any rebate denials would significantly increase administrative time (to gather and submit required supporting documentation and monitor ongoing claim status) and further impact cash flow while waiting for denials to be evaluated; even if a denial is reversed, this will result in a significant delay in rebate payments. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? These costs could be offset through a per-claim administrative add-on, a percentage-based administrative allowance, or a recurring annual or quarterly fee tied to verified claim volume. For manufacturers, this could be structured as the WAC minus the 340B ceiling price rebate plus a clearly identified administrative allowance. Any such allowance should be distinctly labeled to differentiate rebate amounts from administrative compensation. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). To support these expanded responsibilities, our organization would likely need to hire or allocate an additional FTE pharmacy technician dedicated to data collection, submission, and financial tracking activities. This role would be essential to ensure timely and accurate data reporting, as well as to follow the funds from submission through receipt, ensuring accountability and audit readiness. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We would need to hire or reallocate an FTE technician (40 hours per week) for the first 3 months at a minimum to develop, execute and oversee a data reporting process as well as a rebate- tracking process. Depending on the time required for ongoing execution and oversight of these processes, this could turn into a permanent PT or even FTE position if there are a lot of denials or problems tracking the rebates. The approximate salary and benefit cost of a dedicated PT FT position would be $35,000 - $70,000 annually. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementation of a potential 340B Rebate Model Pilot Program would require significant modifications to existing IT systems, software platforms, and financial data infrastructure. Our current pharmacy systems are designed to support the upfront 340B discount model, not a retrospective rebate process. As such, they lack the capability to systematically track rebates at the claim level, link rebate payments back to specific prescriptions, and distinguish rebate revenue from operational income within financial reporting systems. To operationalize a rebate model, new or enhanced system functionality would be required to capture and store detailed claim-level data, support secure data submission to manufacturers or third-party administrators, and perform ongoing reconciliation between dispensed claims and received rebate payments. Additionally, financial systems would need to be modified to appropriately account for rebates as program-specific funds rather than profit, ensuring accurate tracking and compliance with federal grant requirements, including those associated with Section 330 funding. This would likely require development of separate accounting workflows or ledgers to segregate rebate funds from general operating revenue. Given these limitations, our organization would need to engage external IT vendors or consultants to design, build, or adapt systems capable of handling these requirements. This would include both pharmacy system enhancements and backend financial system reconfiguration. Without these changes, the administrative burden of manually tracking rebates and reconciling payments would be substantial and prone to error. Furthermore, under a rebate model, the organization would be required to purchase medications at wholesale acquisition cost and rely on delayed rebate payments to realize 340B savings. This introduces financial risk, as any failure in rebate processing, denial, or delay could result in unrecovered costs. For Medicaid and cash-pay populations in particular, billing at or near 340B ceiling prices without guaranteed rebate recovery could create significant cash flow challenges. For organizations operating on narrow margins, including Federally Qualified Health Centers, this shift could threaten financial stability. Overall, substantial IT investment and system redesign would be necessary to implement a rebate model in a compliant, accurate, and financially sustainable manner. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. The estimated costs to implement a potential 340B Rebate Model Pilot Program would likely be recurring rather than one-time, driven largely by the need to engage a third-party administrator (TPA) or hire (an) additional FTE(s) to manage rebate processing, data submission, and reconciliation. TPA fees typically range from 820% of the reimbursed drug amount or a flat fee of $45 per prescription; an experienced pharmacy technician FTE would cost approximately $70,000 per year (salary + benefits). These costs would represent a significant reduction in net savings currently realized under the upfront 340B discount model. Additional costs would include ongoing system maintenance, software integration, and any IT support required to ensure secure and accurate tracking of claims and rebates. Modifications to financial reporting systems to segregate rebate funds from profit would also incur recurring costs, whether through internal staffing or external consultant support. One-time costs for system setup or configuration may be modest relative to the recurring TPA/FTE and IT support fees, but these would still be required to establish claim-level tracking, reconciliation, and reporting processes. Importantly, the shift to a rebate model introduces financial risk for the organization. Because rebates are received after dispensing, delayed or denied payments could directly impact cash flow. To maintain compliance while serving our patient population, the organization would either need manufacturers to cover TPA/FTE or software costs upfront or risk increasing prices to patientsparticularly those who are uninsured or low-incomecontradicting our mission to provide affordable access to care. Consequently, these recurring administrative costs under a rebate model would likely be higher than current costs under the upfront discount structure and would reduce the net benefit of the 340B Program unless additional support is provided. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Our organizations ability to participate in a potential 340B Rebate Model Pilot Program would be significantly influenced by several organization-specific factors. As a community health center serving a largely vulnerable population, we operate on narrow margins, which limits our capacity to absorb additional financial or administrative risk. Under a rebate model, we would likely need to establish a new insurance identifier or payer setup for each patient receiving rebate-eligible medications. This requirement would create substantial operational complexity, as staff would need to be trained to bill specific medications to these duplicate insurance accounts and to correctly manage these transactions within our existing pharmacy software. The added administrative burden of training, ongoing monitoring, and auditing these transactions could be considerable, as any billing errors could result in lost rebates or financial/regulatory liability, posing a material risk to our organization. Additionally, our current software and split- billing infrastructure are designed for upfront discounts, not retrospective rebate tracking, further complicating accurate claim management. The combination of a small, resource-limited workforce, the complexity of billing modifications, and the high financial risk associated with potential errors represents a significant organizational challenge in implementing a 340B rebate model while maintaining program integrity and affordable access for our patients. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). As a community health center, Mountainlands Community Health Center, serves a medically underserved and financially vulnerable patient population while operating with a limited financial margin. Any 340B Rebate Model Pilot Program that delays access to 340B savings by shifting discounts to a retrospective rebate process would create significant cash flow challenges and increase financial risk for our organization. Unlike larger health systems with greater financial reserves, community health centers often lack the resources to absorb delayed reimbursement, administrative burden, and uncertainty around rebate timing or payment disputes. These pressures could directly affect our ability to maintain affordable access to medications, sustain pharmacy services, and invest in essential patient care programs. At a minimum, participation in such a model would force difficult decisions regarding resource allocation and could limit the treatments and services available to our patients. For safety-net providers like Mountainlands, preserving timely access to 340B savings is critical to maintaining both organizational stability and patient access to care. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could have several direct impacts on patient access to medications. Under a rebate model, our organization would face increased financial and operational risk, which could limit our ability to maintain adequate on-hand inventory. As a result, we may not be able to keep as many medication bottles in stock, leading to situations where patients are required to return at a later date to receive their prescriptions. For patients who travel long distances to reach our clinicmany of whom rely on consistent access to medications for chronic conditionsthis delay could negatively impact adherence, disease management, and overall health outcomes. Reduced stock availability could also force difficult decisions regarding which medications are prioritized, potentially affecting continuity of care for our most vulnerable populations. Overall, transitioning to a rebate model could unintentionally introduce barriers to timely medication access, particularly for patients with limited transportation or financial resources. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Cash flow impact: A rebate-based payment model would create a substantial increase in upfront costs across all pharmacy and clinic locations, which would materially limit our organizations ability to stock and dispense medications eligible for 340B rebates. As a result, medications would likely need to be ordered on a just-in-time basis as prescriptions are received. This would introduce delays of approximately 13 days (longer over weekends) before patients receive their medications and would require additional trips to the pharmacy. This poses a meaningful burden for many of our patients, particularly those with limited transportation or who must travel long distances to access care. The rebate turnaround time (up to 10 days) would further constrain our ability to replenish inventory during that period. Experience with the MDPNP (MFP) indicates that manufacturers often utilize most or all of the allowed repayment window, even when claims are ultimately approved. In cases where claims are disputed, payment timelines can become indefinite and require additional administrative effort to compile and submit supporting documentation. Even when a rebate is ultimately issued, the timeline frequently extends well beyond 10 days, further exacerbating cash flow constraints. In addition, a rebate-based model would likely affect wholesaler purchasing arrangements. Increased upfront purchasing costs would necessitate higher credit limits, elevating financial risk for wholesalers and potentially resulting in less favorable terms. The loss of upfront discounts would also impair our ability to take advantage of prompt-pay incentives tied to frequent invoice payments. For example, discounts associated with weekly payment schedules may no longer be feasible due to the increased invoice amounts resulting from the elimination of upfront pricing concessions. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs are structured based on the invoice date. Invoices dated from the 1st through the 15th of the month are payable by the 25th of the same month, while invoices dated from the 16th through the end of the month are due by the 10th of the following month. These terms are generally consistent for both 340B and non- 340B drugs. In addition, Mountainlands currently receives an additional cost-of-goods discount by participating in weekly automatic withdrawal payments with our wholesaler. This arrangement helps reduce acquisition costs and supports the financial sustainability of our pharmacy operations. Under a 340B rebate model, we would likely be unable to maintain this payment structure because of the significantly higher upfront drug purchase costs and the delay in receiving rebate payments. As a result, Mountainlands would almost certainly forfeit this discount, further increasing medication costs and compounding the financial strain created by delayed rebate reimbursement. For a community health center operating with limited financial reserves, the loss of these existing purchasing efficiencies would further jeopardize our ability to sustain pharmacy services and maintain affordable access to medications for our patients. However, under a potential rebate model, these payment terms would create significant cash flow challenges. If rebates are not received until 10 days after data submission, we could be required to pay the wholesaler before the rebate is credited to our account, potentially resulting in a temporary shortfall. Timing is further complicated by weekends, holidays, and the variability when medications are dispensed. Medications may remain on the shelf for one or two days before patients pick them up, meaning that the effective time between purchase and receipt of a rebate could extend to 20 days or more. This lag could strain our operating budget and increase financial risk, particularly for high-cost or high-volume medications. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our organization receives a discount on COGS for paying weekly rather than the standard semi- monthly payment term. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Invoices are paid through automatic withdrawal/payment every 7 calendar days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebate-based model would absolutely alter our ability to make prompt payments. We turn around payments in less than 7 calendar days. This already presents potential cash-flow issues when insurances take longer than 7 days to remit payment to us. Higher up-front purchasing costs would mean any delay in receiving rebate payment would make our ability to receive the prompt pay discount very difficult. Even if a rebate model works well, the additional cash required to purchase drugs up front puts us in a financial bind. If there is any lag with the manufacturer, additional information required to qualify for a rebate, or a dispute about a rebate, we will not only have to wait for that rebate to purchase new more expensive stock, we will also have to invest more man-hours into researching/troubleshooting rebates and reconciling whats been received and what hasnt. Having just renewed our largest wholesaler contract, we have reason to believe we have the best payment arrangement available to us from the wholesaler. Unless wholesalers are required to alter payment terms, its unrealistic to believe small pharmacies will have leverage to negotiate better terms because of a rebate model. Longer payment terms cant mitigate against the increased time, processes, and upfront costs of a rebate model. A rebate model will invariably shift administrative burden and cost to FQHCs above and beyond the already stringent requirements we adhere to. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. A potential 340B Rebate Model Pilot Program could incorporate several structural safeguards to ensure manufacturers adhere to a 10-calendar-day payment requirement. First, the program could require pre-validation checks on submitted data, automatically rejecting incomplete or invalid submissions immediately to prevent manipulation of the payment timeline. The program would need a clearly defined Day 1 for the 10-day windowideally the date of valid submissionto eliminate ambiguity around Day 0 versus Day 1 interpretations. To promote transparency and accountability, HRSA could be granted real-time access to the submission and payment database to monitor compliance with the 10-day window. The program could also implement an automatic payment mechanism: if a manufacturer does not issue either a payment or a documented denial within 10 days, the rebate would be automatically released to the covered entity or assess a 5% (of the rebate) per day penalty for manufacturers that do not issue payment within 10 days. Routine violation of the 10-day payment requirement would result in the resumption of an upfront discount for all of that manufacturer's products. All denials would require detailed justification and supporting data, preventing vague or delayed denial tactics, and ensuring manufacturers provide objective reasoning. Finally, the program could track manufacturer-level performance metrics, including percentage of rebates paid within 10 days, denial rates, and average turnaround times. These metrics could be publicly available to regulators and covered entities, enabling oversight and enforcement. Manufacturers falling below established thresholds could be subject to penalties or other corrective actions, providing a strong incentive to comply with timely rebate payments and ensuring the program functions predictably and equitably for all covered entities. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cash-flow impacts for covered entities. Manufacturers should be required to provide accelerated payment options for high-cost drugs or for covered entities that meet defined financial vulnerability criteria. For example, claims for high-cost specialty medications or medications critical to continuity of care could be subject to expedited rebate processing within 25 days rather than a standard 10-day timeframe. The program could establish a manufacturer-funded reserve or escrow mechanism to ensure rebate funds are available immediately upon approval of a claim. This would reduce the risk of delayed payments, disputes, or manufacturer cash management practices affecting covered entity access to funds. The program should allow covered entities to batch claims and receive scheduled interim payments (e.g., weekly) rather than requiring reimbursement only after individual claim adjudication. Predictable, recurring payment cycles would improve cash flow planning and reduce operational burden. A rebate program should include protections against downstream financial harm caused by rebate delays. For example, covered entities should not lose access to existing wholesaler prompt-pay discounts, early payment discounts, or favorable purchasing terms because of delayed manufacturer rebates. The pilot could include supplemental payments or adjustment mechanisms to offset these lost savings. Finally, the program should include a hardship exemption or alternative pathway for covered entities that can demonstrate that participation would create financial instability, threaten patient access, or impair pharmacy operations. Safety-net providers should not be forced into a payment model that undermines their ability to serve vulnerable populations. These protections would help ensure that a rebate model does not unintentionally shift financial risk from manufacturers to covered entities and would better preserve access to affordable medications for the patients who rely on the 340B program. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Our organization believes that clear and enforceable guardrails are essential to ensure that rebate denials are limited to appropriate and well-supported circumstances. At a minimum, the program should establish a closed and standardized list of permissible denial reasons (e.g duplicate payment on the same claim but not denial based on manufacturer determination of duplicate discount related to Medicaid rebates), with all other denial rationales considered invalid. The burden of proof should rest with the manufacturer to demonstrate that a denial meets one of these defined criteria, supported by claim-specific, auditable documentation. To prevent inappropriate delays in payment related to denials, the program should also require timely payment/resolution of claims, with any failure to respond within the required timeframe resulting in automatic approval of the rebate. In addition, denials should be subject to independent review or arbitration to ensure that manufacturers are not able to delay or avoid payment through unsupported or inconsistent determinations. Meaningful financial penalties should be applied in cases where denials are found to be inappropriate, to deter misuse of the denial process as a mechanism to delay payment or shift administrative burden to covered entities. We believe that a potential 340B Rebate Model Pilot Program must include very specific guardrails regarding the circumstances under which a manufacturer can deny a rebate request. Denials should be strictly limited to clearly defined situations, such as instances where a 340B rebate was already applied to another covered entity on the same claim, and all other denials should be prohibited. Covered entities must have a formal, transparent process to challenge denials, including access to all supporting documentation and rationale provided by the manufacturer. The program should require manufacturers to respond to challenges within a defined timeframe to prevent delays that could negatively impact cash flow and program operations. Additionally, the burden of proof for covered entities should be explicitly defined, so that organizations clearly understand what evidence or documentation is necessary to dispute a denial successfully. Clear rules and timelines would ensure that covered entities can verify the legitimacy of any denial and protect themselves against arbitrary or unsupported claims. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. 1. Manufacturers should be limited to a preapproved set of denial categories (e.g duplicate claim/rebate, ineligible entity, insufficient data) and must select one of the standardized denial categories to proceed with the denial process. 2. Denials should adhere to a standardized format that includes the following data elements: 3. Claim identifiers (NDC, prescription number, fill number, date of service, etc) 4. Denial reason (from preapproved set of denial categories) 5. Detailed explanation for denial referencing relevant claim data 6. Any supporting evidence needed and independent review/validation. 7. Clearly defined timelines for initial adjudication. 8. There should be a predetermined timeline (e.g 10 calendar days) for manufacturers to either adjudicate or deny a claim. Any claims not adjudicated or denied in this time frame should default to a payment approved status and start incurring late payment penalties. 9. Covered Entities should have access to a formal appeal process with defined timelines. 10. Additionally, a mechanism for escalationsuch as review by HRSA or a neutral third- party adjudicatorshould be available if disputes cannot be resolved directly 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains data related to 340B Program participation through multiple integrated systems, including pharmacy dispensing software, clinic inventory management software, and the electronic health record (EHR). These systems capture relevant dispensing, inventory, and patient encounter data necessary for 340B compliance. A designated 340B Compliance Specialist is responsible for routinely collecting and analyzing this data to support ongoing auditing and compliance efforts. Reviews are conducted on a monthly basis to ensure program integrity and adherence to regulatory requirements. All audit documentation and supporting data are securely maintained in a centralized SharePoint repository, which is accessible to members of the 340B Committee for oversight and review. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). Our organization employs multiple measures to ensure data accuracy, completeness, and consistency in support of 340B Program compliance. A 340B Compliance Specialist conducts routine, in-depth audits to validate data integrity, identify discrepancies, and ensure adherence to program requirements. In addition, onsite pharmacy personnel perform daily to weekly reviews of dispensing and inventory data. These reviews are designed to proactively identify and address potential compliance risks or data inconsistencies. Assigned pharmacy staff at each location perform routine inventory reconciliation to ensure that 340B purchases, dispensing, and current inventory on hand are accurate. Any identified issues are promptly reported and investigated to ensure timely resolution and ongoing program integrity. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Our current data collection would certainly need to change to accommodate the specific information requested by each manufacturer and formatting required by the data platform(s). d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. For pharmacy claims we could see a minimum data consisting of: DOS, RX number, Pharmacy NPI, 340B ID number, Drug NDC, Quantity For clinic claims we could see a minimum data consisting of: DOS, MRN, organization NPI, 340B ID number, Drug NDC, Quantity Many of these data elements are currently available within our existing systems, including pharmacy dispensing software, electronic health records (EHR), and inventory or split-billing platforms. Additionally, a subset of this information is already being furnished to third-party administrators and manufacturers, as data submission is increasingly required to maintain access to 340B pricing. However, these data elements are not consolidated within a single system, requiring manual aggregation and formatting. This process often involves intervention by the 340B Compliance Specialist to align data fields and ensure completeness. As a result, there is an increased administrative burden and a heightened risk of human error, which could impact data accuracy and consistency in a rebate model framework. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A primary concern is the handling and transmission of protected health information (PHI), as rebate models may require sharing patient-level data with manufacturers or third parties. This introduces potential Health Insurance Portability and Accountability Act (HIPAA) risks, including unauthorized disclosure or use beyond the minimum necessary standard. Additionally, reliance on patient identifiers increases the risk of data mismatches or inaccuracies (e.g., variations in name, date of birth, or medical record numbers), which could result in inappropriate rebate denials or duplicate discount concerns. Ensuring consistent and accurate patient matching across systems (EHR, pharmacy systems, and Beacon 340B) becomes more complex and resource-intensive. There are also concerns regarding data security and governance, particularly when data is transmitted outside the covered entity. Expanded data sharing increases vulnerability to breaches and may require enhanced safeguards, business associate agreements, and audit oversight. Operationally, the requirement to submit detailed patient-level data could create administrative burden, delay rebate processing, and shift the burden of proof to the covered entity in the event of disputes or denials. This is especially concerning if manufacturers use patient-level discrepancies as a basis for rejecting valid 340B claims. Finally, there is a broader program integrity concern: increased use of patient identifiers in rebate models may conflict with the intent of the 340B Program by introducing barriers to access, reducing transparency in adjudication, and creating opportunities for inconsistent manufacturer practices. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization maintained comprehensive practices and procedures to prevent duplicate discounts, ensuring that 340B pricing and Medicaid rebates were not applied to the same drug dispense. We adhered strictly to state Medicaid billing requirements, including the appropriate use of submission clarification codes and basis of cost determination codes to accurately identify 340B claims. Our pharmacy dispensing system includes a restriction management function that prevents claims from being processed in a manner that would result in both a 340B discount and a Medicaid rebate. Additionally, our organization maintains open communication with state Medicaid representatives to verify claim status and ensure there is no overlap in reimbursement between the covered entity and Medicaid. To support ongoing compliance, the 340B Compliance Specialist and pharmacy staff conduct routine audits and monitoring activities. These reviews validate claim accuracy, confirm appropriate billing practices, and ensure continued adherence to 340B program requirements and duplicate discount prevention standards. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Each of our pharmacies has instituted a detailed process to identify and monitor each of the NDCs subject to the MFP and ensure that each NDC purchased under the 340B discount is identified before claim submission with the submission clarification code identifying it as a 340B claim. All claims are also routinely monitored in the CMS MTF and Beacon MTF platforms to ensure that no MTF rebates have been paid on claims filled with a 340B-purchased medication. Any claims with an inappropriate MTF discount paid are identified in the Beacon MTF platform as 340B allowing manufacturers to withhold the amount on future payments. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Our organization is generally able to identify when a claim has been recognized by the manufacturer as 340B. Additionally, the process for identifying claims that were not recognized as 340B by the manufacturerbut should have beenis relatively straightforward within the Beacon MTF platform and can be resolved with minimal administrative burden. However, we have experienced considerable challenges in situations where manufacturers incorrectly identify a claim as 340B when it is not. In these cases, access to the MFP is withheld, and the burden shifts to the covered entity to demonstrate that the claim was not 340B eligible. This requires submission of a Good Faith Inquiry (GFI) through the Beacon MTF platform, followed by requests for additional supporting documentation, including invoice data and submission of related 340B claims through the 340B ESP platform. The resolution of these cases is dependent on manufacturer review and discretion, and timelines for issuing the MFP discount can extend up to three weeks. This process introduces delays in reimbursement and requires substantial administrative effort to track claims, gather and submit documentation, monitor manufacturer responses, and verify payment once issued. Based on this experience, our organization is concerned that a similar process could emerge under a potential 340B Rebate Model Pilot Program. Specifically, we anticipate that incorrect claim classifications or disputes could result in delayed payments, increased administrative burden, and a reliance on manufacturer-driven review processes that lack standardized timelines and accountability. Without clearly defined guardrails, there is a risk that covered entities would face comparable challenges, including prolonged payment timelines and increased resource demands to resolve discrepancies. Overall, while identification of correctly designated 340B claims is manageable, the process for addressing incorrectly classified claims is resource-intensive, time-consuming, and creates operational inefficiencies for covered entities. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Date of service, Prescription number, Pharmacy NPI, 340B ID number, Drug NDC If the purpose of this Pilot Program is to identify potential duplicate discounts under CMS programs then only Medicare and Medicaid claims should be asked for, not all 340b claims data. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? To ensure effective oversight and compliance within a potential 340B Rebate Model Pilot Program, manufacturers should be required to submit standardized, auditable data that enables HRSA to monitor rebate payment accuracy, timeliness, and the appropriateness of denials. At a minimum, manufacturers should submit claim-level data for all rebate-eligible transactions, including: National Drug Code (NDC) Date of dispense and date of rebate submission Date of rebate payment or denial Rebate amount requested and amount paid Quantity dispensed Covered entity identifier (NPI) Manufacturers should also be required to report detailed denial data, including: Standardized denial reason selected from a predefined and limited set of allowable categories Claim-specific explanation and supporting documentation Status and outcome of any appeal or dispute process To ensure accountability for payment timelines, manufacturers should report timeliness metrics, including: Time from submission to payment Time from submission to denial Time required to resolve disputed or appealed claims In addition to claim-level data, manufacturers should submit aggregate performance metrics, including: Approval and denial rates Frequency of disputes and appeals Average and median payment timelines Percentage of payments made within required timeframes All data should be submitted in a standardized format to ensure consistency across manufacturers and enable effective analysis by HRSA. Monthly reporting of claim-level and denial data is recommended to allow for timely monitoring and identification of compliance issues. In addition, quarterly summary reporting should be required to assess broader trends and manufacturer performance over time. These data elements should provide HRSA with sufficient visibility to ensure program integrity, identify patterns of delayed payment or inappropriate denials, and take corrective action where necessary, while maintaining a reasonable reporting burden for manufacturers. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Weekly, or up to 10 days, frequency with an ongoing duration of the pilot program so HRSA can identify any manufacturers compliance with the integrity of the program for its duration. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Question: Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program could significantly impact the integrity of the 340B Program by shifting key oversight functions from regulators to manufacturers. Under such a model, manufacturers may assume a greater role in determining 340B claim eligibility and rebate payments, which introduces a potential conflict of interest given their financial stake in limiting rebate approvals. The model may also increase administrative complexity for covered entities, as it would likely require additional data submission, tracking, and reconciliation processesmany of which may be manual. This expanded operational burden increases the risk of errors and inconsistencies in claim reporting and rebate processing. Furthermore, variability in manufacturer requirements and interpretationsparticularly around definitions such as eligible patientcould lead to inconsistent adjudication standards across the program. This lack of standardization may create confusion for covered entities and complicate compliance efforts. Frequent or unclear rebate denials could also result in prolonged disputes, delaying resolution and reducing transparency around compliance expectations. Over time, these challenges may undermine confidence in the program, create barriers to accessing 340B savings, and ultimately weaken the programs intended purpose of supporting covered entities in serving vulnerable patient populations. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Any data collection and reporting requirements should prioritize standardization, consistency, transparency, and automation. Any additional administrative burden directly affects patient care and access to medications. First, HRSA should establish a uniform national reporting framework with standardized definitions, submission timelines, and required data elements. A single, centralized reporting platform should be mandated for all participating manufacturers and covered entities. This would eliminate the current inefficiencies and confusion caused by varying manufacturer-specific platforms, formatting requirements, and interpretations of program rules. Standardization would reduce administrative burden, improve efficiency, and create more consistent program oversight. Second, data collection should rely as much as possible on existing systems and data sources, including pharmacy management systems, wholesaler purchasing data, and existing 340B administration platforms. Covered entities should not be required to manually create custom reports, spreadsheets, or duplicate submissions when the relevant data already exists within current operational workflows. Leveraging existing data sources would improve integrity while minimizing disruption to patient care operations. Third, to promote consistency and fairness in claim review and denials, HRSA should consider requiring an independent third-party administrator to review claims, apply standardized patient and claim eligibility definitions, and issue denials when appropriate. Covered entities should not face a system in which one manufacturer approves a claim while another denies a substantially similar claim based on differing internal policy interpretations or standards. A centralized and unbiased review process would improve consistency, reduce disputes, and strengthen trust in the program. Fourth, manufacturers should be required to meet clear, timely reporting requirements for claim approval, payment, or denial. All claim decisions should be posted on the centralized reporting platform within defined timeframes and include clear, claim-specific denial reasons and supporting rationale as well as defined timeframes for addressing denial appeals and corrections. Transparent status tracking and timely notifications would allow covered entities to identify issues quickly, correct errors efficiently, and avoid prolonged delays in payment or access. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A potential 340B Rebate Model Pilot Program could provide some benefits, including improved transparency, standardized reporting, and clearer audit trails. However, these benefits do not outweigh the significant financial and cash flow risks a rebate model could create for safety-net providers. Importantly, many of these same transparency and oversight benefits could be achieved through mandated standardized data reporting and clearer eligibility guidance within the existing upfront discount structure. This approach would strengthen program integrity and accountability without shifting financial risk to covered entities or threatening patient access to medications. Conclusion Mountainlands Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mountainlands Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mountainlands Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact: Mike Worman PharmD, MPH Pharmacy Director Mountainlands Community Health Center mike.worman@m-chc.org. Alisha Shelton PharmD Assistant Pharmacy Director Mountainlands Community Health Center ashelton28@m-chc.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountainlands Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. The scale and sustainability of nearly all programs offered by Mountainlands including sliding fee discounts on medical and dental visits and prescription and OTC medications, health education, outreach and enrollment, SUD treatment, pharmacy services, and mental health programs. 340B revenue is used to support staffing, rent, supplies and equipment wholly or in part for each of these programs. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Mountainlands Community Health Center provided over $52,000,000 in sliding fee discounts provided through discounted medications and medical services in 2025. Our pharmacy had more than 100,000 340B transactions in 2025 serving more than 20,000 patients, 51% of which are uninsured. ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Direct Administrative Costs: Approximately $224,000 attributed to the following annually: Independent 340B Audit Annual external audit Pharmacy Management & Inventory Systems (Partial Allocation) Liberty pharmacy management system FlexScan inventory management system 340B Program Personnel Dedicated Coordinator Salary and benefits for 340B coordinator Pharmacy Leadership Time (Partial Allocation) Oversight, compliance review, program management Pharmacist and Technician Time (Partial Allocation) Internal audits Cycle counts Weekly eligibility reviews Ongoing compliance monitoring Education and Training Costs NACHC office hours participation 340B University attendance Conferences Certification maintenance (e.g., ACE) Indirect Administrative Costs: Approximately $6,000 attributed to the following annually: OPAIS Maintenance and Recordkeeping Time spent maintaining accurate program records 340B Committee Activities Preparation and participation in quarterly meetings IT Support and Data Management System functionality support Data reconciliation iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for our organizations 340B Program administrative expenses are primarily related to staffing, information technology systems, compliance activities, and external support services. The most significant driver is personnel cost, including a dedicated 340B Specialist allocated approximately 30 hours per week, as well as additional time contributed by pharmacy leadership, technicians, and administrative staff to support audit activities, compliance monitoring, and program oversight. Information technology and software systems also represent a major cost driver, including the use and maintenance of split-billing and inventory management platforms such as Liberty, along with internal IT support required for system integration, data validation, and troubleshooting. Training and education are ongoing expenses, including participation in 340B-related conferences, certification programs, and compliance-focused learning opportunities necessary to maintain staff competency and ensure adherence to evolving program requirements. Additionally, external legal and compliance support, including consultation with legal counsel, contributes to administrative costs by supporting policy development, regulatory interpretation, and audit preparedness. Collectively, these cost drivers reflect the significant resources required to maintain compliance, ensure program integrity, and effectively manage 340B Program operations. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. Estimated increase in cost on 2026 IRA Medications Approximate New Annual Cost: $7,258,943.51 Current Annual Cost: $111,107.75 This represents 6533% increase in upfront capital required for procurement Estimated Increase in cost on 2027 IRA Medications Approximate New Annual Cost: $9,027,514.56 Current Annual Cost: $546,322.85 This represents 1652% increase in upfront inventory spend Estimated Increase in cost on 2028 IRA Medications Approximate New Annual Cost: $9,337,761.77 Current Annual Cost: $226,556.84 This represents 4121% increase in upfront inventory spend Estimates Annual 2026 Rebate Opportunity Cost and Loss of Cost Minus Pricing $730,060.89 (assuming a 10% denial rate on rebates) Estimates Annual 2027 Rebate Opportunity Cost and Loss of Cost Minus Pricing $926,857.73 (assuming a 10% denial rate on rebates) Estimates Annual 2028 Rebate Opportunity Cost and Loss of Cost Minus Pricing $966,378.33 (assuming a 10% denial rate on rebates) ii. Describe the methodology and assumptions used to develop these estimates. To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data accessed through the Apexus PVP Historical Purchase Report for 2025, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentage loss of prompt pay discount, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions regarding which drugs to keep in stock as well as inventory levels of rebate drugs. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The incremental administrative costs associated with a potential rebate model would primarily support expanded data management, claims processing, reconciliation, and audit functions. Specifically, these activities would include collecting and validating prescription-level data across pharmacy locations, preparing and submitting required data files to manufacturers or program administrators, and performing ongoing reconciliation to ensure that submitted claims align with dispensing records and eligibility requirements. Additional effort would also be required to track rebate payments, investigate discrepancies, and maintain documentation to support internal and external audit activity. Our current experience with MTF and Beacon for the IRA rebates take our Director of Pharmacy about 8 hours a week to track back which claims are 340B, which are retail, which ones were identified incorrectly and to go through good faith inquiries. This is a small percentage of our claims. We therefore know that it will take significantly more than 8 hours a week for a technician, pharmacist, or support staff to reconcile these rebate plans in a pilot program. To support these expanded responsibilities, our organization would likely need to hire an additional pharmacy technician dedicated to data collection, submission, and financial tracking activities. This role would be essential to ensure timely and accurate data reporting, as well as to follow the funds from submission through receipt, ensuring accountability and audit readiness. The transition of certain drugs from an upfront 340B discount model to a rebate-based model would significantly increase administrative burden and associated costs. Under the current upfront discount structure, savings are realized at the point of purchase, minimizing the need for ongoing financial tracking. In contrast, a rebate model introduces delays in realizing savings and requires substantial additional labor for claims submission, reconciliation, and payment tracking. It also increases complexity in audit preparedness, as organizations must maintain detailed documentation linking each dispensed claim to rebate eligibility and payment. As a result, the shift to a rebate model would not only increase staffing needs but also expand compliance risk and administrative overhead compared to the current model. Contesting any rebate denials would significantly increase administrative time (to gather and submit required supporting documentation and monitor ongoing claim status) and further impact cash flow while waiting for denials to be evaluated; even if a denial is reversed, this will result in a significant delay in rebate payments. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? These costs could be offset through a per-claim administrative add-on, a percentage-based administrative allowance, or a recurring annual or quarterly fee tied to verified claim volume. For manufacturers, this could be structured as the WAC minus the 340B ceiling price rebate plus a clearly identified administrative allowance. Any such allowance should be distinctly labeled to differentiate rebate amounts from administrative compensation. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). To support these expanded responsibilities, our organization would likely need to hire or allocate an additional FTE pharmacy technician dedicated to data collection, submission, and financial tracking activities. This role would be essential to ensure timely and accurate data reporting, as well as to follow the funds from submission through receipt, ensuring accountability and audit readiness. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We would need to hire or reallocate an FTE technician (40 hours per week) for the first 3 months at a minimum to develop, execute and oversee a data reporting process as well as a rebate-tracking process. Depending on the time required for ongoing execution and oversight of these processes, this could turn into a permanent PT or even FTE position if there are a lot of denials or problems tracking the rebates. The approximate salary and benefit cost of a dedicated PT FT position would be $35,000 - $70,000 annually. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementation of a potential 340B Rebate Model Pilot Program would require significant modifications to existing IT systems, software platforms, and financial data infrastructure. Our current pharmacy systems are designed to support the upfront 340B discount model, not a retrospective rebate process. As such, they lack the capability to systematically track rebates at the claim level, link rebate payments back to specific prescriptions, and distinguish rebate revenue from operational income within financial reporting systems. To operationalize a rebate model, new or enhanced system functionality would be required to capture and store detailed claim-level data, support secure data submission to manufacturers or third-party administrators, and perform ongoing reconciliation between dispensed claims and received rebate payments. Additionally, financial systems would need to be modified to appropriately account for rebates as program-specific funds rather than profit, ensuring accurate tracking and compliance with federal grant requirements, including those associated with Section 330 funding. This would likely require development of separate accounting workflows or ledgers to segregate rebate funds from general operating revenue. Given these limitations, our organization would need to engage external IT vendors or consultants to design, build, or adapt systems capable of handling these requirements. This would include both pharmacy system enhancements and backend financial system reconfiguration. Without these changes, the administrative burden of manually tracking rebates and reconciling payments would be substantial and prone to error. Furthermore, under a rebate model, the organization would be required to purchase medications at wholesale acquisition cost and rely on delayed rebate payments to realize 340B savings. This introduces financial risk, as any failure in rebate processing, denial, or delay could result in unrecovered costs. For Medicaid and cash-pay populations in particular, billing at or near 340B ceiling prices without guaranteed rebate recovery could create significant cash flow challenges. For organizations operating on narrow margins, including Federally Qualified Health Centers, this shift could threaten financial stability. Overall, substantial IT investment and system redesign would be necessary to implement a rebate model in a compliant, accurate, and financially sustainable manner. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. The estimated costs to implement a potential 340B Rebate Model Pilot Program would likely be recurring rather than one-time, driven largely by the need to engage a third-party administrator (TPA) or hire (an) additional FTE(s) to manage rebate processing, data submission, and reconciliation. TPA fees typically range from 820% of the reimbursed drug amount or a flat fee of $45 per prescription; an experienced pharmacy technician FTE would cost approximately $70,000 per year (salary + benefits). These costs would represent a significant reduction in net savings currently realized under the upfront 340B discount model. Additional costs would include ongoing system maintenance, software integration, and any IT support required to ensure secure and accurate tracking of claims and rebates. Modifications to financial reporting systems to segregate rebate funds from profit would also incur recurring costs, whether through internal staffing or external consultant support. One-time costs for system setup or configuration may be modest relative to the recurring TPA/FTE and IT support fees, but these would still be required to establish claim-level tracking, reconciliation, and reporting processes. Importantly, the shift to a rebate model introduces financial risk for the organization. Because rebates are received after dispensing, delayed or denied payments could directly impact cash flow. To maintain compliance while serving our patient population, the organization would either need manufacturers to cover TPA/FTE or software costs upfront or risk increasing prices to patientsparticularly those who are uninsured or low-incomecontradicting our mission to provide affordable access to care. Consequently, these recurring administrative costs under a rebate model would likely be higher than current costs under the upfront discount structure and would reduce the net benefit of the 340B Program unless additional support is provided. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Our organizations ability to participate in a potential 340B Rebate Model Pilot Program would be significantly influenced by several organization-specific factors. As a community health center serving a largely vulnerable population, we operate on narrow margins, which limits our capacity to absorb additional financial or administrative risk. Under a rebate model, we would likely need to establish a new insurance identifier or payer setup for each patient receiving rebate-eligible medications. This requirement would create substantial operational complexity, as staff would need to be trained to bill specific medications to these duplicate insurance accounts and to correctly manage these transactions within our existing pharmacy software. The added administrative burden of training, ongoing monitoring, and auditing these transactions could be considerable, as any billing errors could result in lost rebates or financial/regulatory liability, posing a material risk to our organization. Additionally, our current software and split-billing infrastructure are designed for upfront discounts, not retrospective rebate tracking, further complicating accurate claim management. The combination of a small, resource-limited workforce, the complexity of billing modifications, and the high financial risk associated with potential errors represents a significant organizational challenge in implementing a 340B rebate model while maintaining program integrity and affordable access for our patients. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). As a community health center, Mountainlands Community Health Center, serves a medically underserved and financially vulnerable patient population while operating with a limited financial margin. Any 340B Rebate Model Pilot Program that delays access to 340B savings by shifting discounts to a retrospective rebate process would create significant cash flow challenges and increase financial risk for our organization. Unlike larger health systems with greater financial reserves, community health centers often lack the resources to absorb delayed reimbursement, administrative burden, and uncertainty around rebate timing or payment disputes. These pressures could directly affect our ability to maintain affordable access to medications, sustain pharmacy services, and invest in essential patient care programs. At a minimum, participation in such a model would force difficult decisions regarding resource allocation and could limit the treatments and services available to our patients. For safety-net providers like Mountainlands, preserving timely access to 340B savings is critical to maintaining both organizational stability and patient access to care. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could have several direct impacts on patient access to medications. Under a rebate model, our organization would face increased financial and operational risk, which could limit our ability to maintain adequate on-hand inventory. As a result, we may not be able to keep as many medication bottles in stock, leading to situations where patients are required to return at a later date to receive their prescriptions. For patients who travel long distances to reach our clinicmany of whom rely on consistent access to medications for chronic conditionsthis delay could negatively impact adherence, disease management, and overall health outcomes. Reduced stock availability could also force difficult decisions regarding which medications are prioritized, potentially affecting continuity of care for our most vulnerable populations. Overall, transitioning to a rebate model could unintentionally introduce barriers to timely medication access, particularly for patients with limited transportation or financial resources. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Cash flow impact: A rebate-based payment model would create a substantial increase in upfront costs across all pharmacy and clinic locations, which would materially limit our organizations ability to stock and dispense medications eligible for 340B rebates. As a result, medications would likely need to be ordered on a just-in-time basis as prescriptions are received. This would introduce delays of approximately 13 days (longer over weekends) before patients receive their medications and would require additional trips to the pharmacy. This poses a meaningful burden for many of our patients, particularly those with limited transportation or who must travel long distances to access care. The rebate turnaround time (up to 10 days) would further constrain our ability to replenish inventory during that period. Experience with the MDPNP (MFP) indicates that manufacturers often utilize most or all of the allowed repayment window, even when claims are ultimately approved. In cases where claims are disputed, payment timelines can become indefinite and require additional administrative effort to compile and submit supporting documentation. Even when a rebate is ultimately issued, the timeline frequently extends well beyond 10 days, further exacerbating cash flow constraints. In addition, a rebate-based model would likely affect wholesaler purchasing arrangements. Increased upfront purchasing costs would necessitate higher credit limits, elevating financial risk for wholesalers and potentially resulting in less favorable terms. The loss of upfront discounts would also impair our ability to take advantage of prompt-pay incentives tied to frequent invoice payments. For example, discounts associated with weekly payment schedules may no longer be feasible due to the increased invoice amounts resulting from the elimination of upfront pricing concessions. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs are structured based on the invoice date. Invoices dated from the 1st through the 15th of the month are payable by the 25th of the same month, while invoices dated from the 16th through the end of the month are due by the 10th of the following month. These terms are generally consistent for both 340B and non-340B drugs. In addition, Mountainlands currently receives an additional cost-of-goods discount by participating in weekly automatic withdrawal payments with our wholesaler. This arrangement helps reduce acquisition costs and supports the financial sustainability of our pharmacy operations. Under a 340B rebate model, we would likely be unable to maintain this payment structure because of the significantly higher upfront drug purchase costs and the delay in receiving rebate payments. As a result, Mountainlands would almost certainly forfeit this discount, further increasing medication costs and compounding the financial strain created by delayed rebate reimbursement. For a community health center operating with limited financial reserves, the loss of these existing purchasing efficiencies would further jeopardize our ability to sustain pharmacy services and maintain affordable access to medications for our patients. However, under a potential rebate model, these payment terms would create significant cash flow challenges. If rebates are not received until 10 days after data submission, we could be required to pay the wholesaler before the rebate is credited to our account, potentially resulting in a temporary shortfall. Timing is further complicated by weekends, holidays, and the variability when medications are dispensed. Medications may remain on the shelf for one or two days before patients pick them up, meaning that the effective time between purchase and receipt of a rebate could extend to 20 days or more. This lag could strain our operating budget and increase financial risk, particularly for high-cost or high-volume medications. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our organization receives a discount on COGS for paying weekly rather than the standard semi-monthly payment term. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Invoices are paid through automatic withdrawal/payment every 7 calendar days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. A rebate-based model would absolutely alter our ability to make prompt payments. We turn around payments in less than 7 calendar days. This already presents potential cash-flow issues when insurances take longer than 7 days to remit payment to us. Higher up-front purchasing costs would mean any delay in receiving rebate payment would make our ability to receive the prompt pay discount very difficult. Even if a rebate model works well, the additional cash required to purchase drugs up front puts us in a financial bind. If there is any lag with the manufacturer, additional information required to qualify for a rebate, or a dispute about a rebate, we will not only have to wait for that rebate to purchase new more expensive stock, we will also have to invest more man-hours into researching/troubleshooting rebates and reconciling whats been received and what hasnt. Having just renewed our largest wholesaler contract, we have reason to believe we have the best payment arrangement available to us from the wholesaler. Unless wholesalers are required to alter payment terms, its unrealistic to believe small pharmacies will have leverage to negotiate better terms because of a rebate model. Longer payment terms cant mitigate against the increased time, processes, and upfront costs of a rebate model. A rebate model will invariably shift administrative burden and cost to FQHCs above and beyond the already stringent requirements we adhere to. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. A potential 340B Rebate Model Pilot Program could incorporate several structural safeguards to ensure manufacturers adhere to a 10-calendar-day payment requirement. First, the program could require pre-validation checks on submitted data, automatically rejecting incomplete or invalid submissions immediately to prevent manipulation of the payment timeline. The program would need a clearly defined Day 1 for the 10-day windowideally the date of valid submissionto eliminate ambiguity around Day 0 versus Day 1 interpretations. To promote transparency and accountability, HRSA could be granted real-time access to the submission and payment database to monitor compliance with the 10-day window. The program could also implement an automatic payment mechanism: if a manufacturer does not issue either a payment or a documented denial within 10 days, the rebate would be automatically released to the covered entity or assess a 5% (of the rebate) per day penalty for manufacturers that do not issue payment within 10 days. Routine violation of the 10-day payment requirement would result in the resumption of an upfront discount for all of that manufacturer's products. All denials would require detailed justification and supporting data, preventing vague or delayed denial tactics, and ensuring manufacturers provide objective reasoning. Finally, the program could track manufacturer-level performance metrics, including percentage of rebates paid within 10 days, denial rates, and average turnaround times. These metrics could be publicly available to regulators and covered entities, enabling oversight and enforcement. Manufacturers falling below established thresholds could be subject to penalties or other corrective actions, providing a strong incentive to comply with timely rebate payments and ensuring the program functions predictably and equitably for all covered entities. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cash-flow impacts for covered entities. Manufacturers should be required to provide accelerated payment options for high-cost drugs or for covered entities that meet defined financial vulnerability criteria. For example, claims for high-cost specialty medications or medications critical to continuity of care could be subject to expedited rebate processing within 25 days rather than a standard 10-day timeframe. The program could establish a manufacturer-funded reserve or escrow mechanism to ensure rebate funds are available immediately upon approval of a claim. This would reduce the risk of delayed payments, disputes, or manufacturer cash management practices affecting covered entity access to funds. The program should allow covered entities to batch claims and receive scheduled interim payments (e.g., weekly) rather than requiring reimbursement only after individual claim adjudication. Predictable, recurring payment cycles would improve cash flow planning and reduce operational burden. A rebate program should include protections against downstream financial harm caused by rebate delays. For example, covered entities should not lose access to existing wholesaler prompt-pay discounts, early payment discounts, or favorable purchasing terms because of delayed manufacturer rebates. The pilot could include supplemental payments or adjustment mechanisms to offset these lost savings. Finally, the program should include a hardship exemption or alternative pathway for covered entities that can demonstrate that participation would create financial instability, threaten patient access, or impair pharmacy operations. Safety-net providers should not be forced into a payment model that undermines their ability to serve vulnerable populations. These protections would help ensure that a rebate model does not unintentionally shift financial risk from manufacturers to covered entities and would better preserve access to affordable medications for the patients who rely on the 340B program. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Our organization believes that clear and enforceable guardrails are essential to ensure that rebate denials are limited to appropriate and well-supported circumstances. At a minimum, the program should establish a closed and standardized list of permissible denial reasons (e.g duplicate payment on the same claim but not denial based on manufacturer determination of duplicate discount related to Medicaid rebates), with all other denial rationales considered invalid. The burden of proof should rest with the manufacturer to demonstrate that a denial meets one of these defined criteria, supported by claim-specific, auditable documentation. To prevent inappropriate delays in payment related to denials, the program should also require timely payment/resolution of claims, with any failure to respond within the required timeframe resulting in automatic approval of the rebate. In addition, denials should be subject to independent review or arbitration to ensure that manufacturers are not able to delay or avoid payment through unsupported or inconsistent determinations. Meaningful financial penalties should be applied in cases where denials are found to be inappropriate, to deter misuse of the denial process as a mechanism to delay payment or shift administrative burden to covered entities. We believe that a potential 340B Rebate Model Pilot Program must include very specific guardrails regarding the circumstances under which a manufacturer can deny a rebate request. Denials should be strictly limited to clearly defined situations, such as instances where a 340B rebate was already applied to another covered entity on the same claim, and all other denials should be prohibited. Covered entities must have a formal, transparent process to challenge denials, including access to all supporting documentation and rationale provided by the manufacturer. The program should require manufacturers to respond to challenges within a defined timeframe to prevent delays that could negatively impact cash flow and program operations. Additionally, the burden of proof for covered entities should be explicitly defined, so that organizations clearly understand what evidence or documentation is necessary to dispute a denial successfully. Clear rules and timelines would ensure that covered entities can verify the legitimacy of any denial and protect themselves against arbitrary or unsupported claims. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Manufacturers should be limited to a preapproved set of denial categories (e.g duplicate claim/rebate, ineligible entity, insufficient data) and must select one of the standardized denial categories to proceed with the denial process. Denials should adhere to a standardized format that includes the following data elements: 3. Claim identifiers (NDC, prescription number, fill number, date of service, etc) 4. Denial reason (from preapproved set of denial categories) 5. Detailed explanation for denial referencing relevant claim data 6. Any supporting evidence needed and independent review/validation. 7. Clearly defined timelines for initial adjudication. 8. There should be a predetermined timeline (e.g 10 calendar days) for manufacturers to either adjudicate or deny a claim. Any claims not adjudicated or denied in this time frame should default to a payment approved status and start incurring late payment penalties. 9. Covered Entities should have access to a formal appeal process with defined timelines. 10. Additionally, a mechanism for escalationsuch as review by HRSA or a neutral third- party adjudicatorshould be available if disputes cannot be resolved directly 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains data related to 340B Program participation through multiple integrated systems, including pharmacy dispensing software, clinic inventory management software, and the electronic health record (EHR). These systems capture relevant dispensing, inventory, and patient encounter data necessary for 340B compliance. A designated 340B Compliance Specialist is responsible for routinely collecting and analyzing this data to support ongoing auditing and compliance efforts. Reviews are conducted on a monthly basis to ensure program integrity and adherence to regulatory requirements. All audit documentation and supporting data are securely maintained in a centralized SharePoint repository, which is accessible to members of the 340B Committee for oversight and review. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). Our organization employs multiple measures to ensure data accuracy, completeness, and consistency in support of 340B Program compliance. A 340B Compliance Specialist conducts routine, in-depth audits to validate data integrity, identify discrepancies, and ensure adherence to program requirements. In addition, onsite pharmacy personnel perform daily to weekly reviews of dispensing and inventory data. These reviews are designed to proactively identify and address potential compliance risks or data inconsistencies. Assigned pharmacy staff at each location perform routine inventory reconciliation to ensure that 340B purchases, dispensing, and current inventory on hand are accurate. Any identified issues are promptly reported and investigated to ensure timely resolution and ongoing program integrity. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Our current data collection would certainly need to change to accommodate the specific information requested by each manufacturer and formatting required by the data platform(s). d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. For pharmacy claims we could see a minimum data consisting of: DOS, RX number, Pharmacy NPI, 340B ID number, Drug NDC, Quantity For clinic claims we could see a minimum data consisting of: DOS, MRN, organization NPI, 340B ID number, Drug NDC, Quantity Many of these data elements are currently available within our existing systems, including pharmacy dispensing software, electronic health records (EHR), and inventory or split-billing platforms. Additionally, a subset of this information is already being furnished to third-party administrators and manufacturers, as data submission is increasingly required to maintain access to 340B pricing. However, these data elements are not consolidated within a single system, requiring manual aggregation and formatting. This process often involves intervention by the 340B Compliance Specialist to align data fields and ensure completeness. As a result, there is an increased administrative burden and a heightened risk of human error, which could impact data accuracy and consistency in a rebate model framework. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A primary concern is the handling and transmission of protected health information (PHI), as rebate models may require sharing patient-level data with manufacturers or third parties. This introduces potential Health Insurance Portability and Accountability Act (HIPAA) risks, including unauthorized disclosure or use beyond the minimum necessary standard. Additionally, reliance on patient identifiers increases the risk of data mismatches or inaccuracies (e.g., variations in name, date of birth, or medical record numbers), which could result in inappropriate rebate denials or duplicate discount concerns. Ensuring consistent and accurate patient matching across systems (EHR, pharmacy systems, and Beacon 340B) becomes more complex and resource-intensive. There are also concerns regarding data security and governance, particularly when data is transmitted outside the covered entity. Expanded data sharing increases vulnerability to breaches and may require enhanced safeguards, business associate agreements, and audit oversight. Operationally, the requirement to submit detailed patient-level data could create administrative burden, delay rebate processing, and shift the burden of proof to the covered entity in the event of disputes or denials. This is especially concerning if manufacturers use patient-level discrepancies as a basis for rejecting valid 340B claims. Finally, there is a broader program integrity concern: increased use of patient identifiers in rebate models may conflict with the intent of the 340B Program by introducing barriers to access, reducing transparency in adjudication, and creating opportunities for inconsistent manufacturer practices. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization maintained comprehensive practices and procedures to prevent duplicate discounts, ensuring that 340B pricing and Medicaid rebates were not applied to the same drug dispense. We adhered strictly to state Medicaid billing requirements, including the appropriate use of submission clarification codes and basis of cost determination codes to accurately identify 340B claims. Our pharmacy dispensing system includes a restriction management function that prevents claims from being processed in a manner that would result in both a 340B discount and a Medicaid rebate. Additionally, our organization maintains open communication with state Medicaid representatives to verify claim status and ensure there is no overlap in reimbursement between the covered entity and Medicaid. To support ongoing compliance, the 340B Compliance Specialist and pharmacy staff conduct routine audits and monitoring activities. These reviews validate claim accuracy, confirm appropriate billing practices, and ensure continued adherence to 340B program requirements and duplicate discount prevention standards. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Each of our pharmacies has instituted a detailed process to identify and monitor each of the NDCs subject to the MFP and ensure that each NDC purchased under the 340B discount is identified before claim submission with the submission clarification code identifying it as a 340B claim. All claims are also routinely monitored in the CMS MTF and Beacon MTF platforms to ensure that no MTF rebates have been paid on claims filled with a 340B-purchased medication. Any claims with an inappropriate MTF discount paid are identified in the Beacon MTF platform as 340B allowing manufacturers to withhold the amount on future payments. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Our organization is generally able to identify when a claim has been recognized by the manufacturer as 340B. Additionally, the process for identifying claims that were not recognized as 340B by the manufacturerbut should have beenis relatively straightforward within the Beacon MTF platform and can be resolved with minimal administrative burden. However, we have experienced considerable challenges in situations where manufacturers incorrectly identify a claim as 340B when it is not. In these cases, access to the MFP is withheld, and the burden shifts to the covered entity to demonstrate that the claim was not 340B eligible. This requires submission of a Good Faith Inquiry (GFI) through the Beacon MTF platform, followed by requests for additional supporting documentation, including invoice data and submission of related 340B claims through the 340B ESP platform. The resolution of these cases is dependent on manufacturer review and discretion, and timelines for issuing the MFP discount can extend up to three weeks. This process introduces delays in reimbursement and requires substantial administrative effort to track claims, gather and submit documentation, monitor manufacturer responses, and verify payment once issued. Based on this experience, our organization is concerned that a similar process could emerge under a potential 340B Rebate Model Pilot Program. Specifically, we anticipate that incorrect claim classifications or disputes could result in delayed payments, increased administrative burden, and a reliance on manufacturer-driven review processes that lack standardized timelines and accountability. Without clearly defined guardrails, there is a risk that covered entities would face comparable challenges, including prolonged payment timelines and increased resource demands to resolve discrepancies. Overall, while identification of correctly designated 340B claims is manageable, the process for addressing incorrectly classified claims is resource-intensive, time-consuming, and creates operational inefficiencies for covered entities. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Date of service, Prescription number, Pharmacy NPI, 340B ID number, Drug NDC If the purpose of this Pilot Program is to identify potential duplicate discounts under CMS programs then only Medicare and Medicaid claims should be asked for, not all 340b claims data. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? To ensure effective oversight and compliance within a potential 340B Rebate Model Pilot Program, manufacturers should be required to submit standardized, auditable data that enables HRSA to monitor rebate payment accuracy, timeliness, and the appropriateness of denials. At a minimum, manufacturers should submit claim-level data for all rebate-eligible transactions, including: National Drug Code (NDC) Date of dispense and date of rebate submission Date of rebate payment or denial Rebate amount requested and amount paid Quantity dispensed Covered entity identifier (NPI) Manufacturers should also be required to report detailed denial data, including: Standardized denial reason selected from a predefined and limited set of allowable categories Claim-specific explanation and supporting documentation Status and outcome of any appeal or dispute process To ensure accountability for payment timelines, manufacturers should report timeliness metrics, including: Time from submission to payment Time from submission to denial Time required to resolve disputed or appealed claims In addition to claim-level data, manufacturers should submit aggregate performance metrics, including: Approval and denial rates Frequency of disputes and appeals Average and median payment timelines Percentage of payments made within required timeframes All data should be submitted in a standardized format to ensure consistency across manufacturers and enable effective analysis by HRSA. Monthly reporting of claim-level and denial data is recommended to allow for timely monitoring and identification of compliance issues. In addition, quarterly summary reporting should be required to assess broader trends and manufacturer performance over time. These data elements should provide HRSA with sufficient visibility to ensure program integrity, identify patterns of delayed payment or inappropriate denials, and take corrective action where necessary, while maintaining a reasonable reporting burden for manufacturers. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Weekly, or up to 10 days, frequency with an ongoing duration of the pilot program so HRSA can identify any manufacturers compliance with the integrity of the program for its duration. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Question: Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program could significantly impact the integrity of the 340B Program by shifting key oversight functions from regulators to manufacturers. Under such a model, manufacturers may assume a greater role in determining 340B claim eligibility and rebate payments, which introduces a potential conflict of interest given their financial stake in limiting rebate approvals. The model may also increase administrative complexity for covered entities, as it would likely require additional data submission, tracking, and reconciliation processesmany of which may be manual. This expanded operational burden increases the risk of errors and inconsistencies in claim reporting and rebate processing. Furthermore, variability in manufacturer requirements and interpretationsparticularly around definitions such as eligible patientcould lead to inconsistent adjudication standards across the program. This lack of standardization may create confusion for covered entities and complicate compliance efforts. Frequent or unclear rebate denials could also result in prolonged disputes, delaying resolution and reducing transparency around compliance expectations. Over time, these challenges may undermine confidence in the program, create barriers to accessing 340B savings, and ultimately weaken the programs intended purpose of supporting covered entities in serving vulnerable patient populations. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Any data collection and reporting requirements should prioritize standardization, consistency, transparency, and automation. Any additional administrative burden directly affects patient care and access to medications. First, HRSA should establish a uniform national reporting framework with standardized definitions, submission timelines, and required data elements. A single, centralized reporting platform should be mandated for all participating manufacturers and covered entities. This would eliminate the current inefficiencies and confusion caused by varying manufacturer-specific platforms, formatting requirements, and interpretations of program rules. Standardization would reduce administrative burden, improve efficiency, and create more consistent program oversight. Second, data collection should rely as much as possible on existing systems and data sources, including pharmacy management systems, wholesaler purchasing data, and existing 340B administration platforms. Covered entities should not be required to manually create custom reports, spreadsheets, or duplicate submissions when the relevant data already exists within current operational workflows. Leveraging existing data sources would improve integrity while minimizing disruption to patient care operations. Third, to promote consistency and fairness in claim review and denials, HRSA should consider requiring an independent third-party administrator to review claims, apply standardized patient and claim eligibility definitions, and issue denials when appropriate. Covered entities should not face a system in which one manufacturer approves a claim while another denies a substantially similar claim based on differing internal policy interpretations or standards. A centralized and unbiased review process would improve consistency, reduce disputes, and strengthen trust in the program. Fourth, manufacturers should be required to meet clear, timely reporting requirements for claim approval, payment, or denial. All claim decisions should be posted on the centralized reporting platform within defined timeframes and include clear, claim-specific denial reasons and supporting rationale as well as defined timeframes for addressing denial appeals and corrections. Transparent status tracking and timely notifications would allow covered entities to identify issues quickly, correct errors efficiently, and avoid prolonged delays in payment or access. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A potential 340B Rebate Model Pilot Program could provide some benefits, including improved transparency, standardized reporting, and clearer audit trails. However, these benefits do not outweigh the significant financial and cash flow risks a rebate model could create for safety-net providers. Importantly, many of these same transparency and oversight benefits could be achieved through mandated standardized data reporting and clearer eligibility guidance within the existing upfront discount structure. This approach would strengthen program integrity and accountability without shifting financial risk to covered entities or threatening patient access to medications. Conclusion Mountainlands Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mountainlands Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mountainlands Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact: Mike Worman PharmD, MPH Pharmacy Director Mountainlands Community Health Center mike.worman@m-chc.org. Alisha Shelton PharmD Assistant Pharmacy Director Mountainlands Community Health Center ashelton28@m-chc.org
HRSA-2026-0001-1736(no commenter metadata)2026-04-17T04:00Z51,058 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Coastal Health & Wellness, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Coastal Health & Wellness is a Federally Qualified Community Health Center serving Galveston County, providing comprehensive primary care, pediatric services, dental care, womens health, behavioral health, chiropractic care, substance use disorder treatment, and on-site lab and X-ray services. In 2025, we cared for more than 10,000 patients over 35,000 qualifying visits. Texas has some of the most restrictive Medicaid eligibility requirements in the U.S., leaving large numbers of low-income adults without coverage. As a result, more than 71% of our patients are uninsured and rely on us as their primary source of affordable medical care, medications, and preventive services. Last year alone, we provided over $2.5 million in sliding-fee medication discounts to ensure patients could access the treatments they need. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Our CHC currently has approximately 200 patients prescribed Xarelto or Eliquis. Of these 46% are uninsured, and we provide their medications at a deeply discounted sliding-fee discount ($20 or less). Without access to upfront 340B pricing, we would be forced to dispense these medications without knowing whether we will ultimately receive the 340B rebate. For a CHC operating on extremely thin margins, this creates an unsustainable financial risk. Even a modest rate of rebate denials would have a significant impact. For example, if just 10% of rebates were denied on these two drugs, our organization would lose over $20,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Losses of this magnitude would quickly jeopardize our ability to continue providing these medications under our current model. If we are unable to absorb this financial risk, we will be forced to stop ordering these medications altogether. In that scenario, our uninsured patients would most likely have to transition to warfarin, a medication that is 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. clinically less than ideal for many patients and significantly more resource-intensive to manage. Warfarin therapy requires frequent clinic visits and INR lab monitoring and carries a higher risk of adverse events. This shift would create a substantial operational burden. To safely manage the increased monitoring requirements, we would need additional part-time clinical staff a cost that would be nearly impossible to absorb if our 340B savings from insured patients are simultaneously reduced or eliminated. The combined effect would compromise our ability to provide the safest, most effective therapy for our patients. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. Our CHC has almost 1,900 patients diagnosed with Type 2 Diabetes and 39% of these patients are currently taking Farxiga or Jardiance. In 2025, our CHC provided over 400 uninsured patients access to Farxiga or Jardiance through our sliding scale discounts. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. We have approximately 90 uninsured patients who received Novolog in 2025 under a sliding scale discount. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affecting our ability to serve the patients who rely on us. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 2025 UDA Data, HRSA (hrsa.gov) According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.5 With the growing manufacturer restrictions and endless hours that will need to be dedicated to claims submission for rebates, reconciliations, and disputes, our CHC will need an additional FTE dedicated to our 340B/pharmacy department. Several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.6 Ensuring 340B compliance extends beyond the pharmacy department. While the addition of a dedicated FTE is necessary, it will not be sufficient on its own. The programs operational and audit requirements will require consistent involvement from multiple departmentsincluding medical providers, nursing, IT, accounting, and the executive team. Our analysis shows that the cumulative time needed from these teams represents roughly $90,000 in salary allocation toward 340B related responsibilities. This reflects the true organizational cost of maintaining compliance and ensures we are adequately resourced to meet compliance requirements. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Contract Pharmacy Impact For CHC contract pharmacy partners, the rebate model introduces a level of complexity that threatens the long-term viability of these arrangements. Our CHC currently partners with 11 pharmacies, including 2 chain and 1 independent pharmacy, to increase access to affordable medications. The chain pharmacies have already excluded the medications that are included for IPAY 2026 with Medicare payers, and we have every reason to believe they will extend this to all payers under a rebate program. This pattern demonstrates that large chains are unwilling to assume the financial and administrative risk associated with front-loaded drug costs and delayed rebate payments. The contract pharmacy where our uninsured patients are able to receive medications at the sliding scale discount is a local, independent pharmacy. They work very closely with our organization and offer lower dispense fees than chain pharmacies, which allows us to offer our patients prescriptions at a deeply discounted rate. Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. This is particularly 5 Internal NACHC assessment (99 responses). 6 Ibid. worrisome with our independent contract pharmacy. If the MFP process coupled with the rebate model becomes too burdensome or causes a financial loss to the pharmacy, we could lose our partnership with them. This would cause our uninsured patients to no longer have access to discounted medications at the very least until arrangements with a new contract pharmacy could be made, which can easily take 6 months to a year. Cinic Administered Drugs Impact Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Impact Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. The proposed model creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required 7 Internal NACHC survey data and additional health services within the HRSA-approved scope of the project.8 In line with their mission, we offer sliding-scale discounts to patients who are at or below the 200% Federal Poverty Level on most prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order any medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. If we submit claims daily, as we most likely would, there will be a high volume of claims reversed after 714 days when prescriptions are not picked up by patients. This will require significant additional reconciliation time but would allow us to receive rebates within the 10-day window, assuming no denials. Although this option improves cash flow and helps ensure we can meet our payment terms with our wholesaler, it would still require us to request higher credit limits. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 8 HRSA FAQ 9 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Coastal Health & Wellness estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $20,000. Currently, our organization spends approximately $500 a month to purchase these same drugs at the 340B ceiling price. This represents a 4,110% increase in upfront capital required for procurement. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that over 10,000 of our patients rely on. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs for 2026, even a conservative 5% denial rate would result in a net annual loss of over $75,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Coastal Health & Wellness strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Coastal Health & Wellness believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Coastal Health & Wellness appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lane Baker at lbaker@gchd.org. Sincerely, Lane Baker, MHA, COO Coastal Health & Wellness April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Coastal Health & Wellness, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Coastal Health & Wellness is a Federally Qualified Community Health Center serving Galveston County, providing comprehensive primary care, pediatric services, dental care, womens health, behavioral health, chiropractic care, substance use disorder treatment, and on-site lab and X-ray services. In 2025, we cared for more than 10,000 patients over 35,000 qualifying visits. Texas has some of the most restrictive Medicaid eligibility requirements in the U.S., leaving large numbers of low-income adults without coverage. As a result, more than 71% of our patients are uninsured and rely on us as their primary source of affordable medical care, medications, and preventive services. Last year alone, we provided over $2.5 million in sliding-fee medication discounts to ensure patients could access the treatments they need. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Our CHC currently has approximately 200 patients prescribed Xarelto or Eliquis. Of these 46% are uninsured, and we provide their medications at a deeply discounted sliding-fee discount ($20 or less). Without access to upfront 340B pricing, we would be forced to dispense these medications without knowing whether we will ultimately receive the 340B rebate. For a CHC operating on extremely thin margins, this creates an unsustainable financial risk. Even a modest rate of rebate denials would have a significant impact. For example, if just 10% of rebates were denied on these two drugs, our organization would lose over $20,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Losses of this magnitude would quickly jeopardize our ability to continue providing these medications under our current model. If we are unable to absorb this financial risk, we will be forced to stop ordering these medications altogether. In that scenario, our uninsured patients would most likely have to transition to warfarin, a medication that is clinically less than ideal for many patients and significantly more resource-intensive to manage. Warfarin therapy requires frequent clinic visits and INR lab monitoring and carries a higher risk of adverse events. This shift would create a substantial operational burden. To safely manage the increased monitoring requirements, we would need additional part-time clinical staff a cost that would be nearly impossible to absorb if our 340B savings from insured patients are simultaneously reduced or eliminated. The combined effect would compromise our ability to provide the safest, most effective therapy for our patients. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. Our CHC has almost 1,900 patients diagnosed with Type 2 Diabetes and 39% of these patients are currently taking Farxiga or Jardiance. In 2025, our CHC provided over 400 uninsured patients access to Farxiga or Jardiance through our sliding scale discounts. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. We have approximately 90 uninsured patients who received Novolog in 2025 under a sliding scale discount. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affecting our ability to serve the patients who rely on us. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. With the growing manufacturer restrictions and endless hours that will need to be dedicated to claims submission for rebates, reconciliations, and disputes, our CHC will need an additional FTE dedicated to our 340B/pharmacy department. Several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. Ensuring 340B compliance extends beyond the pharmacy department. While the addition of a dedicated FTE is necessary, it will not be sufficient on its own. The programs operational and audit requirements will require consistent involvement from multiple departmentsincluding medical providers, nursing, IT, accounting, and the executive team. Our analysis shows that the cumulative time needed from these teams represents roughly $90,000 in salary allocation toward 340B related responsibilities. This reflects the true organizational cost of maintaining compliance and ensures we are adequately resourced to meet compliance requirements. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Contract Pharmacy Impact For CHC contract pharmacy partners, the rebate model introduces a level of complexity that threatens the long-term viability of these arrangements. Our CHC currently partners with 11 pharmacies, including 2 chain and 1 independent pharmacy, to increase access to affordable medications. The chain pharmacies have already excluded the medications that are included for IPAY 2026 with Medicare payers, and we have every reason to believe they will extend this to all payers under a rebate program. This pattern demonstrates that large chains are unwilling to assume the financial and administrative risk associated with front-loaded drug costs and delayed rebate payments. The contract pharmacy where our uninsured patients are able to receive medications at the sliding scale discount is a local, independent pharmacy. They work very closely with our organization and offer lower dispense fees than chain pharmacies, which allows us to offer our patients prescriptions at a deeply discounted rate. Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. This is particularly worrisome with our independent contract pharmacy. If the MFP process coupled with the rebate model becomes too burdensome or causes a financial loss to the pharmacy, we could lose our partnership with them. This would cause our uninsured patients to no longer have access to discounted medications at the very least until arrangements with a new contract pharmacy could be made, which can easily take 6 months to a year. Cinic Administered Drugs Impact Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Impact Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. The proposed model creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, we offer sliding-scale discounts to patients who are at or below the 200% Federal Poverty Level on most prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order any medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. If we submit claims daily, as we most likely would, there will be a high volume of claims reversed after 714 days when prescriptions are not picked up by patients. This will require significant additional reconciliation time but would allow us to receive rebates within the 10-day window, assuming no denials. Although this option improves cash flow and helps ensure we can meet our payment terms with our wholesaler, it would still require us to request higher credit limits. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. Coastal Health & Wellness estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $20,000. Currently, our organization spends approximately $500 a month to purchase these same drugs at the 340B ceiling price. This represents a 4,110% increase in upfront capital required for procurement. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that over 10,000 of our patients rely on. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs for 2026, even a conservative 5% denial rate would result in a net annual loss of over $75,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Coastal Health & Wellness strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Coastal Health & Wellness believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Coastal Health & Wellness appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lane Baker at lbaker@gchd.org. Sincerely, Lane Baker, MHA, COO Coastal Health & Wellness
HRSA-2026-0001-1737Nathan Vincent · Smiths Grove, KY, United States2026-04-17T04:00Z219,688 chars
See attached file(s) April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of A Plus Family HealthCare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: A Plus Family HealthCare anticipates an average loss of 20 to 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For A Plus Family HealthCare in particular, this means it will impact: 2 Over 10,000 340B-Qualified claims for over 5,600 patients. An increase in administration costs due to additional FTEs needed. Hampered or Inability to effectuate our sliding fee discounts for medications making it hard for our patients to afford life sustaining medications. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: A Plus Family HealthCare provided over $60,000 in sliding fee discounts for medications alone, not including discounts we provided for services within our own clinic. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: A Plus Family HealthCare anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, A Plus Family HealthCare anticipates an increase of $5000 to costs for external support vendors. This does not include legal fees needed to vet added vendors and program compliance. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 While it is hard to predict the exact load A Plus Family HealthCare will undertake for this program, we can easily estimate adding on 0.5 FTE to accommodate the process of submission and tracking for the rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We can easily estimate that this would cost an extra $25,000 to $30,000 just to monitor this program. This does not include the extra up-front costs of ordering the medications at WAC or the interest that would go into flowing the expense of the higher cost of goods. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. A Plus Family HealthCare anticipates an extra 10 to 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. A Plus Family HealthCare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An additional $5000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves Over 5600 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at over $5,000 annually for simply baseline requirements. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 62 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 62 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in South Central Kentucky with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 8 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. In addition, we have helped our community by providing over $60,000 in sliding fee discounts on medications for eligible patients. Our clinic is in one of the most rural areas of Kentucky, and part of our mission is to ensure affordable healthcare. A 340B rebate model would infringe on our ability to effectuate our sliding fee discounts for services as well as medications. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations data, we estimate it would cost $1,673,971.06 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $621,527.82 to purchase these same drugs at the 340B ceiling price. This represents a 169% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, A Plus Family HealthCare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our KidCare Program which places nurses in our local schools at no cost to the school system. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund new Community Health Workers, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our approximately 200 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. A Plus Family HealthCare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 11 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, A Plus Family HealthCare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $240,515.15 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. A Plus Family HealthCare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $88,174,80 in 2026. This will balloon to an increase Monthly Drug Spend of $217,357.17 by 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution as these funds are currently dedicated to KidCare and Behavioral Health Services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on A Plus Family HealthCare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays A Plus Family HealthCare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $110,981.22. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by 13 manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 14 sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. 15 D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 17 a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 18 CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 19 demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 20 under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 21 entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 22 submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. In our state of Kentucky, we are required to report claims billed to MCO plans on a quarterly basis. Implementing a rebate model could interfere with the timely delivery of those claims reports and could even lead to misrepresentation if a rebate is denied, or if a denial is challenged and the medication is carved into the 340B program. Kentucky has strict guidelines on timing for those reports and any delay could be detrimental to our ability to carve in those MCO claims moving forward. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 23 Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 24 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 25 Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 26 The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. 45 32 C.F.R. 199.21(q)(2)(iii)(E) 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 27 Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 28 to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 29 federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 59 42 U.S.C. 256b(a)(5)(B) 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 30 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: 31 Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. 32 D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion A Plus Family HealthCare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. A Plus Family HealthCare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. A Plus Family HealthCare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nathan Vincent at nathan.vincent@aplushealth.org Sincerely, Your NAME A Plus Family HealthCare April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of A Plus Family HealthCare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: A Plus Family HealthCare anticipates an average loss of 20 to 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For A Plus Family HealthCare in particular, this means it will impact: Over 10,000 340B-Qualified claims for over 5,600 patients. An increase in administration costs due to additional FTEs needed. Hampered or Inability to effectuate our sliding fee discounts for medications making it hard for our patients to afford life sustaining medications. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: A Plus Family HealthCare provided over $60,000 in sliding fee discounts for medications alone, not including discounts we provided for services within our own clinic. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: A Plus Family HealthCare anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, A Plus Family HealthCare anticipates an increase of $5000 to costs for external support vendors. This does not include legal fees needed to vet added vendors and program compliance. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. While it is hard to predict the exact load A Plus Family HealthCare will undertake for this program, we can easily estimate adding on 0.5 FTE to accommodate the process of submission and tracking for the rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We can easily estimate that this would cost an extra $25,000 to $30,000 just to monitor this program. This does not include the extra up-front costs of ordering the medications at WAC or the interest that would go into flowing the expense of the higher cost of goods. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. A Plus Family HealthCare anticipates an extra 10 to 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. A Plus Family HealthCare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An additional $5000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves Over 5600 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at over $5,000 annually for simply baseline requirements. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 62 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 62 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in South Central Kentucky with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. In addition, we have helped our community by providing over $60,000 in sliding fee discounts on medications for eligible patients. Our clinic is in one of the most rural areas of Kentucky, and part of our mission is to ensure affordable healthcare. A 340B rebate model would infringe on our ability to effectuate our sliding fee discounts for services as well as medications. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,673,971.06 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $621,527.82 to purchase these same drugs at the 340B ceiling price. This represents a 169% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, A Plus Family HealthCare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our KidCare Program which places nurses in our local schools at no cost to the school system. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund new Community Health Workers, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our approximately 200 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. A Plus Family HealthCare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, A Plus Family HealthCare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $240,515.15 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. A Plus Family HealthCare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $88,174,80 in 2026. This will balloon to an increase Monthly Drug Spend of $217,357.17 by 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution as these funds are currently dedicated to KidCare and Behavioral Health Services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on A Plus Family HealthCare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. Financial Impact of Rebate Denials and Delays A Plus Family HealthCare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $110,981.22. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. The 340B Rebate Models Incompatibility with Deduplication Efforts Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted. This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. In our state of Kentucky, we are required to report claims billed to MCO plans on a quarterly basis. Implementing a rebate model could interfere with the timely delivery of those claims reports and could even lead to misrepresentation if a rebate is denied, or if a denial is challenged and the medication is carved into the 340B program. Kentucky has strict guidelines on timing for those reports and any delay could be detrimental to our ability to carve in those MCO claims moving forward. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data. This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion A Plus Family HealthCare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. A Plus Family HealthCare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. A Plus Family HealthCare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nathan Vincent at nathan.vincent@aplushealth.org Sincerely, Your NAME A Plus Family HealthCare
HRSA-2026-0001-1738(no commenter metadata)2026-04-17T04:00Z6,145 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: 340B Rebate Model Pilot Program Request for Information Docket No. HRSA-2026- 03042 Dear Director Britton: The Washington State Department of Health (DOH) appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) Request for Information regarding the proposed 340B Rebate Model Pilot Program. DOH administers multiple governmental public health programs that rely on the 340B Drug Pricing Program to ensure access to lifesaving medications for uninsured and underinsured populations across Washington state. These programs include the Washington AIDS Drug Assistance Program (WA ADAP), Sexually Transmitted Infection (STI) prevention and treatment programs, and the Tuberculosis (TB) program. Based on the information currently available, DOH has significant concerns regarding the operational, fiscal, legal, and public health impacts of transitioning governmental public health covered entities to a rebate-based model, outlined below. DOH respectfully urges HRSA to exempt governmental public health covered entities from the 340B Rebate Model Pilot Program. I. Exemption for Governmental Public Health Covered Entities Governmental public health programs rely on the upfront 340B discount to maintain adequate medication inventory, ensure rapid treatment initiation for communicable diseases, prevent disease transmission, and avoid financial barriers to care for uninsured and underinsured individuals. STATE OF WASHINGTON DEPARTMENT OF HEALTH PO Box 47890 Olympia, Washington 98504-7890 Tel: 360-236-4030 TTY Relay: 800-833-6384 2 HRSA April 20, 2026 The proposed rebate model would require full-cost purchasing of medications upfront, submission of patient-level data, and new administrative reconciliation processes. There is no clear demonstrated benefit for governmental public health programs under the proposed model, and the model shifts financial risk and administrative burden to state and local public health entities. II. Costs to Covered Entities The STI and TB programs rely heavily on upfront 340B discounts to purchase high-cost medications. For example, Bicillin L-A for syphilis treatment costs $0.19 under 340B pricing compared to approximately $3,750 outside of 340B. Over two years, purchasing this medication at non-340B pricing would have cost approximately $1.68 millionnearly 47% of Washingtons annual federal STI grant. For the TB program, a comparison of 30 pills of standard drug-susceptible TB medications demonstrates a 340B cost of $115.20 compared to $270.60 at retail pricing. Because TB treatment requires at least six months of therapy, upfront retail pricing would significantly increase program costs while awaiting rebate reimbursement. Transitioning to a rebate model would require additional staffing for claims submission, tracking, reconciliation, and denial management. Hiring additional staff is not feasible under current funding levels, and existing staff would be redirected from core public health work. III. Cash Flow and Payment Timing Impacts The rebate model introduces significant cash flow instability. WA ADAP would be required to modify existing contracts with its pharmacy benefits manager and cannot provide bank account information directly to a private vendor. Uncertainty regarding rebate timelines would impair the Departments ability to forecast available funding. For the TB program, even short payment delays would negatively impact cash flow and limit the ability to maintain medication caches. Accounting complications may also arise when rebate funds cross state fiscal years. IV. Rebate Denials and Appeals There is no clarity regarding standardization of manufacturer denial processes or appeals procedures. Programs do not currently have staffing or infrastructure to manage denial disputes. Loss or delay of rebates would directly impact medication purchasing and could interrupt patient treatment. V. Data Collection and State Law Constraints 3 HRSA April 20, 2026 Washington State enacted SB 5981 (2026), which prohibits drug manufacturers from requiring patient-level data as a condition of 340B eligibility. The proposed rebate models data-sharing requirements may conflict with state law and could preclude participation. Additionally, existing STI and TB data systems would require significant modification to meet proposed reporting requirements, requiring additional IT resources that are not currently available. VI. Patient Access and Public Health Impact Higher upfront medication costs would likely result in reduced access, delays in treatment, increased disease transmission, and worsening health outcomes, including increased congenital syphilis, infertility, and preventable TB-related morbidity and mortality. Programs primarily serve low-income, uninsured, and high-risk populations. Any reduction in service capacity would disproportionately impact vulnerable communities. DOH respectfully requests that HRSA exempt governmental public health covered entities from participation in the 340B Rebate Model Pilot Program and ensure that any future reforms do not undermine access to lifesaving medications for vulnerable populations. Thank you for the opportunity to provide these comments. DOH looks forward to continued engagement with HRSA to ensure that the 340B program supports its core mission of expanding access to care for those most in need. If you have any questions, please contact Mike Ellsworth at Michael.Ellsworth@doh.wa.gov or the Director, Federal and Inter-State Affairs for Governor Fergusons Washington, D.C. office Rose Minor at Rose.Minor@gov.wa.gov Sincerely, Elizabeth Crutsinger-Perry Assistant Secretary Division of Disease Control and Health Statistics Washington State Department of Health
HRSA-2026-0001-1739Family Health Network of Central New York, Inc.2026-04-17T04:00Z16,585 chars
Please see attached document. FAMILY HEALTH NETWORK of Central New York, Inc. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Family Health Network of Central New York, Inc. and the 15,310 patients we serve annually, thank you for the opportunity to comment on HRSA's Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Family Health Network of Central New York, Inc. (FHN) is a licensed Article 28 Diagnostic and Treatment Center, and a Federally Qualified Health Center (FQHC) that has been providing primary healthcare to the residents of Central New York since 1972, with a special focus on services to the vulnerable uninsured and underinsured individuals in our community. Organizationally, FHN has (5) freestanding medical centers, one (1) of which includes dental services, a mobile medical unit, plus an additional four (4) school-based health centers in Cortland, Cayuga, and Madison counties; that also serve residents of the contiguous counties of Tompkins, Chenango, Broome and Tioga. Of the over 15,000 patients served annually, approximately 3% are self-pay or uninsured, 56% have either Medicare or Medicaid, and 41% have other third party payers. For FHN specifically, 340B savings allows our organization to provide mobile medical services to a unhoused population, as well as, operate a dental and school based health program that without 340B savings, would not be sustainable. In addition, 340B savings allows FHN to offer salaries for physicians and support staff that are comparable to hospital systems that we are forced to compete with. For FHN, every dollar earned is redirected directly into patient care. Although FHN serves the uninsured and the underinsured, we are the largest primary care provider in the rural communities we serve, serving 1 out of every 2 individuals from every socioeconomic background. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges, in addition to the significant impacts we are already experiencing due to manufacturer blocks and data submission requirements. Based on the reality of the significant challenges and resource allocations we have already had to make since the manufacturer blocks and data submission requirements to 340B ESP, we are planning to have to dedicate additional full time positions to a rebate model due to the administrative hurdles or manual reconciliations that would be required to make certain we are getting all rebate revenue. More money allocated to the expense of running the 340B program means less money for important services that keep our patients out of more expensive emergency rooms and hospitals. Summary of Recommendations: In short, Family Health Network strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSA's and manufacturers' stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that govern the approval of manufacturers' rebate plans" must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers "stretch scarce Federal resources as far as possible." A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs, already operating on razor thin margins to keep doors open. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Family Health Network (FHN), a 340B Rebate Model Pilot Program will impact: 6,676 low-income and uninsured patients served Our ability to provide dental care, SUD treatment, mental health services, school-based health programs, care coordination, and Mobile Unite services that are typically supported by 340B revenue Based on 2025 financial data, FHN will have to pay $2M up front to purchase the rebate drugs, and hope that a rebate will be approved by the manufacturers in a timely manner to maintain fiscal and operational obligations. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients' access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates both financial barriers that limit our ability to meet other financial obligations in a timely manner, and also potentially limit the ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow issues: In Iate 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate model's complicated requirements, we anticipate needing to hire one additional FTE. We estimate the cost to hire additional staff to be $57,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. Please note this full time position due to a rebate model is in addition to an increase in staff that was needed due to manufacturer blocks and data submission requirements, and constantly having to address issues with 340B ESP data submissions. External Vendors and IT Infrastructure Costs: We anticipate high upfront costs to pay for custom dashboard modifications, and to design new internal workflows. We also anticipate an increase in costs Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. Family Health Network helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination; behavioral health services; dental services; mobile medical services, and school-based health. The dispensing of rebate drugs: Many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit the ability to generate 340B revenue to support vital health care services. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to "advance" CHCs enough rebates to cover the greater of two full package sizes or two months' worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSA's goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Family Health Network of Central New York, Inc. strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New York's primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSA's decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, amid an already fragile safety net crisis, forcing us to make difficult decisions about staffing and services. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nation's safety net. If you have any questions, please contact Kim Osborne at kosborne@familyhealthnetworlcorg Sincerely, Kim Osborne, BSN, MBA President/CEO Family Health Network of Central New York, Inc.
HRSA-2026-0001-1740Eastern Iowa Health Center2026-04-17T04:00Z43,045 chars
Attached is Eastern Iowa Health Center's response to HRSA's 340B RFI. April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Eastern Iowa Health Center (EIHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. At EIHC, our mission is to provide exceptional healthcare for all, and last year we had the honor of serving 19,005 patients in a total of 67,436 visits. CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: EIHC anticipates a loss of over $140,000 from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Page | 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For EIHC in particular, this means it will impact: The 4,767 340B transactions we use to serve our 19,005 patients Drive up our current administration cost for managing and complying with 340B requirements by tens of thousands of dollars annually. Reduce the 340B savings that we use to directly lower patient costs for services and medications. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at- risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden Page | 3 of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. Page | 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external 6 2025 UDA Data, HRSA (hrsa.gov) Page | 5 consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: EIHC provided $2,343,880 in sliding fee discounts to 3,172 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: EIHC anticipates needing to hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, EIHC anticipates an increase of anywhere from $30,000-$50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As noted above we expect to hire at least one additional FTE and anticipate that it will cost over $80,000 annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which serves approximately 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At EIHC we estimate that it will take at least 20 hours monthly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying 7 Internal NACHC assessment (99 responses). 8 Ibid. Page | 6 requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. EIHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing feeswhich are permanent, recurring costs that diminish our 340B savingswill cost $36,000. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with two large pharmacy chains to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per- claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across fifty-four different pharmacy locations to ensure rebates are paid correctly. Page | 7 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, this risks leaving patients in our five-county region with little or no affordable medication options. Over 19 percent of the Iowa population live in a pharmacy desert,9 and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Cencora, Insight into U.S. pharmacy deserts (2024) 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data Page | 8 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At EIHC we use the majority of our 340B savings (50%) to directly lower the cost of health services and medications. The remainder of our 340B savings is utilized to provide translation and transportation services for our patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Page | 9 turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Page | 10 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $165,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $75,000 to purchase these same drugs at the 340B ceiling price. This represents a 220% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, EIHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our VeggieRX partnership, care management, and community outreach and education events. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund care managers or social workers, directly impacting access to community services needed by our patients. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents uninsured patients from rationing their insulin or heart medication. Page | 11 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. EIHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt- pay discount. However, EIHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $25,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: EIHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $13,750 ($165,000 annually). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize cash reserves that are already anticipated to be needed to supplement operations upon the implementation of the One Big Beautiful Bill. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on EIHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer Page | 12 wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays EIHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw- backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Page | 13 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Page | 14 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion EIHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply Page | 15 discounted medications required by law. EIHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Eastern Iowa Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Erin Raftery, Director of Quality and Risk Management at eraftery@eihc.co. Sincerely, Joe Lock President & CEO Eastern Iowa Health Center
HRSA-2026-0001-1741Dignity Health St. Joseph's Medical Center2026-04-17T04:00Z6,099 chars
See attached file(s) sent on behalf of Dignity Health St. Joseph's Medical Center, Stockton, California. w . Dignity Health A member of CommonSpirit Administration 1800 North California Street Stockton, CA 95204 direct 209.467.6315 fax 209.461.3299 dignityheath.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph's Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph's Medical Center that far outweighs any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Joseph's Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Sincer,ely, \ / Apr20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESR That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. David Ziolkowski President & CEO St. Joseph's Medical Center Apr2O, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CommonSpirri- As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and cornmunities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1742Brandon Holt · Burien, WA, United States2026-04-17T04:00Z7,553 chars
See attached file(s) CommonSpint St Anne Hospital Burien, WA April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St Anne Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Anne Hospital (formerly Highline Medical Center) is a 159-bed community hospital located in Burien, Washington. St. Anne offers a full range of medical and clinical services, including a birth center, oncology and orthopedic care, and a specialty stroke care unit. The 340B Drug Pricing Program helps expand access to care and stretch scarce health care dollars to deliver high-quality care to vulnerable patient populations, including low income, uninsured, underinsured, and homeless patients, as well as those living in rural communities. In addition, the 340B Program allows hospitals to offset uncompensated care and provide expensive medications free of cost, while focusing on safe, cost-effective care that results in improved patient outcomes. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St Anne Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St Anne Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour Apr 20, 2026 CommonSprit Health HHS Docket No. HRSA-2026-03042 patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under- insured patients in our facility. St. Anne's Cancer Center provides comprehensive cancer care, chemotherapy, non-oncology infusion services, and support groups close to home. Through Project Access, the Premium Assistance prograrn helps cover premiums for insured individuals who cannot afford premiums, keeping them from becoming uninsured. We provide Copay assistance for patients who meet the criteria and cannot afford complete copays. The Diabetes Assistance Program provides underinsured patients with insulin, monitoring equipment and supplies at no cost. Free medications are obtained for patients who have no insurance The Emergency Department provides direct patient care in an ambulatory clinic to improve medication outcomes. Financial support for patients who cannot afford transportation, DME, housing, and caregiver costs. Programs address opioid addiction, including provision of free naloxone to patients and families. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are Iikely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free Ioans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brandon Holt Interim President St. Anne Hospital St. Anne Hospital Burien, WA Jr CommonSpint " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1743CommonSpirit Oregon dba St. Anthony Hospital2026-04-17T04:00Z6,983 chars
Per the attachment below, we oppose implementation of a rebate model under the 340B program. We support the upfront discount model that has worked successfully for decades. CommonSpint CHI St. Anthony Hospital Pendleton, Oregon April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Anthony Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. CHI St. Anthony Hospital is a 25-bed critical access hospital located in eastern Oregon. The next closest hospital is rnore than 50 miles away and the closest tertiary hospital is more than 200 miles away. St. Anthony Hospital provides a wide range of health services locally including surgical services and emergency, critical, and cancer care. In addition, the hospital supports a family birth center and family This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St Anthony Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Anthony Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. St. Anthony Hospital Cancer Clinic, which provides comprehensive cancer care and non-oncology infusion services in a rural setting. Apr 20, 2026 Corernonspirit Health HHS Docket No. HRSA-2026-03042 Outpatient medical services, such as emergency care and outpatient surgical services. Uncompensated care provided to improve the health of our community. Donated over $100,000 to over 100 community events, organizations, and schools. Provides support for the Pioneer Relief Nursery, which has programs and education for low- incorne parents that have chalfenges with childcare. Contributes support to the Pendleton school district's Children's Needs fund providing clothing, alarm clocks, power bill and rental assistance, medications and medical expenses. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are Iikely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit 0ur 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both I nsisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Sincerely, Harold Geller President St. Anthony Hospital St. Anthony Hospital Pendleton, OR CommonSpirit As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1744Cleveland Clinic2026-04-17T04:00Z15,311 chars
Please see the attached letter. Page 1 of 5 Melissa Myers, JD, MPA Vice President, Government Relations April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042) Submitted electronically via: Regulations.gov Dear Administrator Engels: Cleveland Clinic appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information regarding the 340B Rebate Model Pilot Program. Cleveland Clinic is a not-for-profit, integrated healthcare system dedicated to patient-centered care, teaching, and research. With a footprint in Northeast Ohio, Florida, and Nevada, Cleveland Clinic Health System operates 23 hospitals, including a main campus near downtown Cleveland, with 6,700 beds and 300 outpatient locations. Cleveland Clinic employs over 6,600 physicians and researchers, 17,600 nurses, and 4,300 advanced practice providers. Last year, our system had 15.9 million patient encounters, including 14.4 million outpatient visits and 343,000 hospital admissions and observations. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. We have grave reservations about implementation of such a model. As explained below, any rebate mechanism will impose enormous costs and burdens on covered entities that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. Preserving the upfront discount mechanism, which hospitals have relied on for years, is the best way to fulfill the purpose of the 340B program to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 1. Costs to Covered Entities Cleveland Clinic processed more than 5.4 million 340B transactions in the previous fiscal year. When we entered the 340B program, we anticipated that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected Page 2 of 5 and planned for as a 340B participantand far above and beyond what we have experienced to date. Implementing a 340B rebate model introduces a range of operational steps that werent previously required, contributing to considerable administrative and financial strain on covered entities. Our technological systems and operational infrastructure are designed in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to enhance IT systems and expand data and analytics capabilities to build new reports, track claims at a granular level, generate rebate submission files, and produce exception tracking dashboards. Vendor costs would be incurred from engaging a third-party administrator to extract the necessary data that ensures correct reporting. Legal and compliance consultation would be essential for contract reviews, standard operating policy development, and mitigation against a variety of risks, such as manufacturer audits. Furthermore, higher inventory carrying expenses and the risk of delayed or denied rebate payments create implications for cash flow and working capital costs. Additional labor resources would be critical to effectively manage the increased administrative workload to operationalize a 340B rebate model. At a minimum, one additional full-time employee (FTE) would be required to oversee critical functions of the program. This permanent FTE would be responsible for several tasks including claim-level identification of eligible 340B prescriptions, managing accumulator reconciliations, validating rebate eligibility prior to submission, resolving claim disputes and denials with manufacturers, reviewing for duplicate discount prevention particularly regarding Medicaid and Inflation Reduction Act overlaptracking rebates, monitoring cash flow related to potential increases in wholesale acquisition cost (WAC) purchases, and allocating rebate funds to the appropriate cost centers. Additional duties may be assigned as necessary to ensure the programs success. Other staffing resources include developer time needed to ensure the accuracy of data submission and operationalize a repayment reconciliation process as well as analyst and pharmacist time in the claim and rebate reconciliation process. Emerging issues may necessitate time in discussions with manufacturers. Overall, Cleveland Clinic anticipates an estimated annual cost of $444,080 and more than 5,800 hours annually to manage a rebate program in its first year covering ten initial drugs. As the program evolves and expands to cover additional drugs, further resources, including additional staff, may be needed to accommodate growing responsibilities. Without dedicated support, existing staff otherwise may be compelled to divert time from their current duties to handle the administrative tasks of operationalizing a rebate program. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities Unlike the 340B Programs existing upfront discount system, a potential rebate model shifts the timing of when savings are realized. In a rebate model, the organization would be required to pay the full acquisition cost initially and wait for reimbursement through a rebate process, creating a delay in receiving 340B savings. Even if drug companies reimbursed covered entities within a 10-day period, as required under the prior iteration of the rebate program, the delayed discount will have meaningful impact on our organization and the patients we serve. This delay could result in increased working capital requirements and place strain on cash flow, particularly for high-cost drugs or high-volume programs. Additionally, there is financial risk associated with potential delays, denials, or discrepancies in rebate payments, which could further Page 3 of 5 impact liquidity and require additional administrative resources to manage and reconcile. Overall, the rebate model introduces uncertainty in both the timing and reliability of 340B-related savings. Our current wholesaler contracts set Net 7 payment terms that require payment due within seven days of the invoice date. These terms are consistent and do not differ between 340B and non-340B drugs. For multi-hospital systems, additional effort is required to ensure rebates are appropriately allocated to the correct cost center. 3. Rebate Denials Should HRSA proceed with a 340B Rebate Model Pilot Program, a standardized process for rebate denials should be clearly defined to ensure transparency, consistency, and timely resolution. At a minimum, the process should include: Timely Determinations: Initial rebate determinations should be completed within a specified timeframe, such as within 30 days of submission. Standardized Denial Codes and Explanations: Manufacturers should be required to use uniform denial reason codes with clear, detailed explanations to reduce uncertainty and streamline follow-up actions. Clear Appeal and Escalation Process: Covered entities should have the ability to appeal denied rebates through a structured, multi-level process, including escalation pathways if disputes are not resolved at the initial level o Denial appeals should be reviewed and resolved within a defined period, such as 30 or 60 days. Tracking and Reporting Mechanisms: A centralized system or portal should be utilized to track submission status, denials, appeals, and resolutions in real time. 4. Data Collection by Covered Entities A potential 340B Rebate Model Pilot Program would significantly change current data collection activities and would require ongoing efforts rather than a one-time adjustment. Covered entities would need to implement processes to capture, validate, and submit detailed claims-level data on a continuous basis to support rebate eligibility. Additionally, it would likely be necessary to engage a third-party administrator to manage data aggregation, validation, and submission to ensure accuracy and timeliness. These activities would represent a sustained operational requirement, increasing administrative complexity and resource needs over time. 5. Manufacturer Efforts to Avoid Duplicate Discounts Identifying potential duplicate discounts under 340B and CMS payment programs presents several operational and data-related challenges: Data Availability and Access: Necessary data elements (e.g., payer type, claim status, and rebate indicators) are often housed across multiple systems or external partners, making it difficult to obtain a complete and timely dataset. Page 4 of 5 Claim Identification Complexity: Accurately identifying 340B-eligible claims versus non- 340B claims can be challenging, particularly for mixed-use settings, contract pharmacies, and scenarios involving multiple payers. Timing Mismatches: Differences in timing between drug dispensing, claim adjudication, and manufacturer rebate processing can create misalignment, increasing the risk of either missing or incorrectly flagging duplicate discounts. Lack of Standardization: Variability in data formats, identifiers, and reporting requirements across manufacturers, payers, and state Medicaid programs complicates consistent identification and reconciliation efforts. Medicaid Managed Care Complexity: Identifying duplicate discounts within Medicaid Managed Care is particularly difficult due to limited visibility into state and managed care organization rebate invoicing processes HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and Medicare Drug Price Negotiation Program (MDPNP) pricing. Given the tremendous costs that a rebate mechanism will impose on hospitals, HRSA should rely on those other options. Any other decision would privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Additionally, we support the American Hospital Associations (AHA) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, we urge HRSA to provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 6. Required Reporting To ensure compliance under a potential rebate model pilot, manufacturers should be prepared to submit comprehensive and periodic data covering sales, rebates, claim processing outcomes, and operational practices related to rebate administration and duplicate discount avoidance along with detailed claims-level data received from covered entities. Listed below are some of the requirements that should be in place: Data on rebates provided through the pilot program Information on claim delays and denials Monthly data submissions by manufacturers to support ongoing evaluation of the pilots integrity and to shorten the lag time in reviewing program performance 7. 340B Program Integrity A 340B rebate model would involve transmission of sensitive data between various participants. Data elements in prescription and medical claims include various identifiers that comprise protected health information (PHI). Implementation of a 340B rebate model requiring such data elements must require patients to approve the use of their personal data. It places these patients at risk of having their personal and medical information exposed to data breaches. Drug manufacturers are not health systems and may not have adequate security requirements to protect patient data from data breaches. Page 5 of 5 In addition, technology vendors used for the operations of a 340B rebate model must have adequate security mechanisms to prevent the exposure of PHI. Covered entities encountered serious problems with respect to Second Sight Solutions, the vendor selected by the drug manufacturers to manage HRSAs initial 340B rebate program. Covered entities were required to accept Second Sight Solutions liability terms in order to use the companys Beacon IT platform for rebate program operations. A covered entity could not participate if the terms were not accepted and would have to forgo access to 340B pricing in the rebate model. The terms required covered entities to agree that Second Sight Solutions would not be held liable for any damages, including incidental damage caused by the company. The terms also stated Second Sight Solutions liability would not exceed $1,000 for any gross negligence or misconduct related damages. Given the approximately 5.5 million transactions that a covered entity may need to submit, $1,000 is not a sufficient amount for the covered entity to manage damages incurred from using the Beacon IT platform. The terms in the data license that Second Sight Solutions required covered entities to agree to were not terms that businesses under normal practices would enter into. Covered entities would have been forced to perpetually provide an irrevocable license to the data to participate in the rebate model. For all of these reasons, Cleveland Clinic respectfully submits that the costs of any rebate program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and instead adopt a neutral, third-party clearinghouse as described above. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a rebate program and many other critical details (such as required data, possible grounds for the denial of rebates, dispute resolution processes, and other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. Thank you for considering Cleveland Clinics feedback, We look forward to working with HRSA on this important issue, which has profound implications for the millions of patients whose hospitals are supported by the 340B Program. Should you need any further information, please contact me at myersm21@ccf.org. Sincerely, Melissa Myers, JD, MPA Vice President, Government Relations
HRSA-2026-0001-1745Danna Shaner · Enumclaw, WA, United States2026-04-17T04:00Z4,242 chars
See attached file(s) Comr-non..3pirrt- St. Elizabeth Hospital Enumclaw, WA April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2025-03042) Dear Administrator Engels, St. Elizabeth Hospital, a member of CommonSpirit Health, appreciates the opportunityto provide comments to the Health Resources and Services Administration (HRSA) on the Request for lnformation (RFI) related to a 340B Rebate Model Pilot Program. St. Elizabeth Hospital is a 25-bed critical access hospital located in Enumclaw, Washington. The hospital offers a full range of services including 24/7 emergency services, surgical services, walk-in laboratory services, and a family birth center. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St Elizabeth Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacyto the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Elizabeth Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter rnostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Our outpatient infusion center provides life saving infusion services for a wide range of patient needs Apr 20,2026 CommonSpidt Health HHS Doccet No. HRSA-2026-03042 creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound impIications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Danna Shaner President St. Elizabeth Hospital St. Elizabeth Hospital Enumclaw, WA en, As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1746Aaron Clark · Central Islip, NY, United States2026-04-17T04:00Z14,671 chars
Please see attached letter. long Island Select Healthcare ( .,r,ni: fur ( >ur ( unum111lt1 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane P.ockville, Maryland 20857 RE: Request for Information: 340B Rebate M odel Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: April 16, 2026 On behalf of Long Island Select Healthcare and the over 8,500 patients we serve annually, thank you for the opportunity to comment on HRSA's Request for Information on a potential 340B rebate pilot . The 340B program is foundational to our ability to serve the most vulnerable members of our community. Long Island Select Healthcare is a Federally Qualified Health Center providing comprehensive, accessible healthcare services to residents of Suffolk County, New York. With a strong focus on serving individuals with intellectual and developmental disabilities, Long Island Select Healthcare delivers integrated, patient- centered care designed to meet the needs of diverse populations while ensuring dignity, access, and quality for all. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. Summary of Recommendations: In short, Long Island Select Healthcare strongly urges HRSA to take the following steps: l. HRSA should not implement a mandatory rebate model for any 3408 covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSA's and manufacturers' stated goals for the rebate model without imposing t he harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to t he financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that [ ... ] govern the approval of manufacturers' rebate plans" must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 3408 program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers 1 l ong Island Select Healthcare ( .,rmi: f,,, t >ur ( ummunih "stretch scarce Federal resources as far as possible." A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for reba!es, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 3408 discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. We also have significant concerns about the impact a 3408 Rebate Model Pilot Program will have on our patients' access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our abilitv to consistently provide these medications to patients, which could disrupt access to medications t hat patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions - including diabetes, hypertension, and obesity - compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and t hose needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 3408 Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible 1 Richard P, Ku L_. Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Amb.il Care Manage. 2012 Jan-Mar;35(1):S0-9. doi: 10.1097/ JAC.0b013e31823d27b6. PMID: 22156955. 2 Long lslanrl Select Healthcare ( ,,rim~ /or Our ( un1muni1, manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate model's complicated requirements, we anticipate needing to hire 2 additional FTEs. We estima:e the cost to hire additional staff to be $140,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Pan:y Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 3408 Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely- resulting in avoidable harm to patients' health. Long Island Select Healthcare helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as dental services, patient navigation and optometry services. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. 3 Long Island Select Healthcare C ,trt/J~ i ur ( )ur ( o mmu,1#f\ Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 3408 rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 3408 covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, healt h centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our pat ients cannot afford to lose access to the care we are able to provide thanks to 3408. E. If HRSA in~ists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent t he systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A re12uirement to "advance" CHCs enough rebates to cover the greater of two full package sizes or two months' worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of c. rebate model. 4 long Island Select Healthcare ( ,irmi: /or ( )ur ( ,11nn111111h HRSA's goal of the rebate pilot to address 3408 and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 3408 Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substanti2lly reduce administ rative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers wii:h the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve t he longstanding upfront discount structure that has defined the 3408 program for more than three decades. Conclusion Long Island Select Healthcare strongly urges HRSA not to implement a 3408 rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New York's primary care safety net and the ability of our low-income and uninsured patients to access affordable primarv care, behavioral health care, and dental care depend on HRSA's decisions to pursue a 3408 rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model and we are deeply worried about our patients who depend on the upfront 3408 discount. Thank you for your consideration and for your continued commitment to the nation's safety net. If you have any quest ions, please contact me at aaron.clark@lishcare.org Sincerely, I 1---;c_ ~,k, PhacmD, AAHIVE, 3408 ACE Chief Executive Officer Long Island Select Healthcare, Inc. 159 Carleton Avenue Central Islip, NY 11722 Ph. 631-650-2085 aa ron .clark@lishca re .org 5
HRSA-2026-0001-1747Licking Memorial Health Systems2026-04-17T04:00Z14,474 chars
See attached file(s) April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Licking Memorial Hospital, located in Newark, Ohio, we thank you for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." Ohio's hospitals and health systems serve as the backbone of their communities. Every day we provide essential care throughout the continuum of life, from welcoming new babies to managing chronic conditions, delivering behavioral health services, supporting recovery, and providing dignified end-of-life care. These services often rely on access to life-saving and life-stabilizing medications. Since the inception of the 340B Drug Pricing Program in 1992, the upfront discount model has ensured expanded access to care for millions of Americans. Our organization has grave concerns with any type of 340B rebate model. This will cause an unnecessary seismic shift in the way the 340B program has successfully operated for over 30 years. As explained below, any rebate mechanism will impose enormous costs and burdens on Licking Memorial Hospital that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Licking Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Licking Memorial Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Licking Memorial Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program Any rebate program would require Licking Memorial Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Licking Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go above and beyond what we had expected and planned for as a 340B hospital, and above and beyond what we are experiencing now. Licking Memorial Hospital estimates that it will cost an additional $10,000 in start-up costs to secure the necessary software program needed to implement this program. In addition, Licking Memorial Hospital is estimating an annual subscription cost of at least $30,000. There will also be an added cost of additional support personnel to manage the 340B Rebate Program, with current estimates of an additional one half of a Full Time Equivalent at an estimated cost of $60,000 to include salary and benefits. This is an estimated $90,000 to $100,000 in annual added expense. Furthermore, anticipated delays in rebate payments may cause potential cash flow costs and concerns. Our organization already endures extensive administrative requirements imposed by health plans. The added requirements under a rebate model would further strain hospital resources and inject millions of dollars in unnecessary costs into the health care system. For 340B hospitals already operating on thin margins, the costs of compliance would be unsustainable and will divert hospital resources from patient care. Staffing Impacts Under a Potential 340B Rebate Program Licking Memorial Hospital does not currently have the staff needed to comply with a Rebate Program. It is estimated that an additional one half of a Full Time Equivalent will be needed to oversee this rebate program. Given our experience with vendors and rebate models, Licking Memorial Hospital feels the current estimate of five hours per week in additional work is significantly underestimated. There will be significant time spent on the reconciliation process and on tracking and monitoring payments, in addition to appealing any denied rebates. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Licking Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur costs to change those systems. Data Collection By Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Licking Memorial Hospital currently collects and validates data through the Sentry platform. Audits are performed monthly by generating reports from Sentry and cross- checking the dispensations allocated to 340B with account information in our electronic health record, Epic, to ensure the dispensations are appropriately applied to 340B. A potential rebate model would add additional layers to the audit process as it would require that dispensations would need to be verified through the Beacon platform to ensure that what was deemed as an eligible dispensation in Sentry and Epic was also allocated correctly through the Beacon system. Furthermore, there would be additional tracking and auditing to ensure rebates were processed and received timely for dispensations through a reconciliation process, along with tracking any denied rebates and appealing with the supplier. HRSA states the burden associated with the rebate model program would not be significant as the data being requested through Beacon is already being supplied to Sentry. While the data that would be sent to Beacon is data we are already providing to Sentry, the cost associated with the additional service Sentry would provide in sending that data to Beacon on our behalf is definitely an undue financial burden. Additionally, Licking Memorial Hospital would be burdened with ensuring that the data being sent is done so timely, as well as auditing to be sure the rebates are being paid, as expected. This would require additional staff time to log in to Beacon to review the database for any denials on rebates and to investigate and appeal those denials. Payment Timing And Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Licking Memorial Hospital to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Furthermore, it will require additional resources to manage the rebate model program, as Licking Memorial Hospital will be forced to reconcile rebates received with eligible drug dispensations, which will undoubtedly include countless hours spent on the phone attempting to secure payment information and manage delays and unjust denials from the drug companies. Adverse Impacts of These Additional Costs And Burdens All of these many different costs and burdens add up. Unfortunately, that means that Licking Memorial Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community may suffer in concrete ways. Due to the significant amount of cost that Licking Memorial Hospital will be required to pay up front (an estimated quarter million dollars annually), we may find it challenging to maintain appropriate stock. To note, many of the drugs on the pilot list do not have a therapeutically equivalent alternative. This means that a loss of, or delay in, access to these drugs would have immediate and dire clinical consequences. Examples of this hypothetical are sobering. Farxiga (dapagliflozin) and Jardiance (empagliflozin) go beyond their diabetes indication and convey profound benefit in heart failure and chronic kidney disease. Eliquis (apixaban) and Xarelto (rivaroxaban) provide significantly better clinical anticoagulation outcomes with less required laboratory and logistical burden than their older alternative. Heart failure patients without access to Entresto (sacubitril/valsartan) may experience up to 20% more mortality or hospitalization compared to patients receiving alternative therapies. Consequences will be even more catastrophic if the rebate model goes forward and the list of included drugs grows. Reliance Interests The RFI expressly invites comments on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via 'rebate or discount."' Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Licking Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings-all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Licking Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Licking Memorial Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. A 340B rebate model would disproportionately harm 340B hospitals that already operate with limited resources, including rural and safety-net providers. If HRSA is concerned about program integrity, the agency should conduct greater oversight on drug companies rather than creating a system that undermines hospital cashflow, increases administrative burden and diverts resources away from patient care. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Licking Memorial Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Cynthia Webster Vice President, Financial Services
HRSA-2026-0001-1748Ruth Kane · St. Albans, VT, United States2026-04-17T04:00Z2,137 chars
I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a small rural sole community hospital serving patients in northwestern Vermont. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on our community, patients, and the vital services our hospital provides to the community. I disagree that rebates would improve 340B program integrity. HRSA already conducts routine audits of covered entities that show minimal compliance issues and manufacturers have not demonstrated systemic integrity issues in 340B. In October of 2024, the organization I work for underwent a HRSA audit which resulted in no findings and I can attest to our dedication to program compliance. The full scope of rebate-related costs is impossible to quantify. However, we do know that all data submissions would require manual chart reviews to produce because multiple mandatory data elements (Claim Number, Claim Line Number, and Health Plan ID) are only available outside of our TPA system and must be accessed by opening each individual encounter within two separate EMR modules. Our hospital has a single dedicated 340B employee resource. Manually preparing files, submitting claims, tracking rebate data, validating and auditing receipt of rebates, interfacing with the manufacturers vendors to address errors, pursuing payment for denied rebates, and filing wrongfully denied rebate claims with HRSA would create an untenable administrative burden. A rebate model that requires hospitals to hire additional staff to manage, entirely defeats the purpose of the program. The organization I work for uses 340B revenue and savings to subsidize the high costs of vital but unprofitable service lines, including our Maternal/Fetal medicine program. Access to local care is critical to ensuring the health of our patients and 340B savings and revenue help to keep this service line affordable and available to women in our community. Ultimately, the costs and administrative burden of any rebate model will significantly reduce resources available for patient care.
HRSA-2026-0001-1749(no commenter metadata)2026-04-17T04:00Z22,330 chars
See attached file(s) (4, Singing River Subject: Comments on Proposed Manufacturer Rebate Model for the 340B Drug Pricing Program To Whom It May Concern: My name is Heath Thompson. I am the Authorizing Officer for 340B Entity 250040 and 250123. On behalf of our covered entities, we appreciate the opportunity to provide comments regarding the proposed manufacturer rebate model within the 340B Drug Pricing Program. Singing River Health System has participated in the 340B program for over 20 years and we serve a population of around 400,000 residents, many of which are low income and underserved. Our service area also includes many rural communities. We utilize an independent third-party company to periodically conduct our Community Health Needs Assessment (CHNA). Below are Key Findings transcribed verbatim from the most recent 176 page report: Key Findings 1. Health Needs: The assessment highlights critical areas of concern, including rising rates of chronic diseases (heart disease, diabetes), mental health and substance abuse challenges, and disparities in maternal and child health outcomes. 2. Access to Care: Significant barriers exist in accessing primary and specialty care, particularly in rural areas. Economic instability, geographic isolation, and gaps in insurance coverage exacerbate these challenges. 3. Social Determinants of Health: Economic disparities, education attainment gaps, and food insecurity significantly impact health outcomes. Rural areas face pronounced challenges due to limited access to resources and services. 4. Health Equity: Vulnerable populations, including racial and ethnic minorities, low-income residents, and rural communities, experience heightened health disparities. Tailored interventions are needed to bridge these gaps. Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthSystem.com Sin irt River Further important information listed verbatim from the CHNA report: "Singing River Health System (hereafter SRHS) is a major healthcare provider based on the Mississippi Gulf Coast. It directly serves the residents of Jackson County and Harrison County in Mississippi and also the surrounding areas, including George County. Established in 1931, it operates several facilities, including three main hospitals: Singing River Pascagoula, Singing River Ocean Springs, and Singing River Gulfport. These hospitals offer a range of services such as emergency care, surgical services, cancer treatment, cardiology, neurology, and women's health." "SRHS's commitment to delivering high-quality, accessible healthcare is central to its mission. With multiple hospitals, clinics, and specialized services, SRHS plays a pivotal role in the health and well-being of over 400,000 residents across the Mississippi Gulf Coast. Like many areas of the country, the region presents unique healthcare challenges, shaped by factors such as an aging population, rising chronic disease rates, disparities in access to care, and the enduring impact of natural disasters, most notably Hurricane Katrina in 2005." "As a public, not-for-profit system, SRHS has a long-standing commitment to and record of giving back to the community. Its goal is to ensure access to quality care for everyone, regardless of their ability to pay. This community-first approach is reflected in initiatives such as charity care for low-income patients, free health screenings, educational workshops, and partnerships with local organizations aimed at improving health outcomes." "SRHS serves a large segment of the population that may be classified as medically underserved, especially in the more rural parts of Jackson County and neighboring areas. SRHS has committed to making healthcare accessible to all, providing charity care, sliding scale payment options, and Medicaid/Medicare-focused programs to ensure that low-income and uninsured individuals can still receive quality healthcare services." "Moss Point: As a smaller, working-class community in Jackson County, Moss Point is also within SRHS's market. The healthcare needs of this population typically include primary care, emergency services, and family medicine, as well as treatment for chronic conditions such as diabetes and hypertension, which are prevalent in this area." Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean 5prings, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthsystem.com er:4 Singing River "SRHS also serves residents of smaller, more rural counties like George County, Greene County, and Stone County, which border Jackson County. These areas have limited access to specialized medical services, so many patients travel to Singing River's facilities for advanced treatments, surgical procedures, and emergency care." "Healthcare equity disparities in Jackson, Harrison, and George counties in Mississippi reflect broader statewide trends, with certain demographic groups experiencing significant challenges in accessing quality healthcare. Racial and Ethnic Disparities Infant Mortality: Mississippi has the highest infant mortality rate in the United States, with black infants experiencing nearly double the mortality rate compared to white infants. Chronic Diseases: Black adults in Mississippi are more likely to report higher rates of obesity and related chronic conditions compared to white adults." "In the SRHS service area, significant portions of the population face financial hardships that limit their ability to afford medical care, healthy food, and other essentials for a healthy life." "Poverty Rates: The poverty rate across Jackson, Harrison, and George Counties exceeds the national average, particularly in rural areas like George County, where economic opportunities are limited. In Jackson County, the poverty rate remains high despite the presence of large employers, such as the shipbuilding industry in Pascagoula, due to disparate economic growth." "Income Inequality: There is notable income inequality across the region, with rural and minority populations being disproportionately affected. Harrison County, as the most urbanized of the three, has higher income levels, particularly in tourist and service industry sectors, but also displays high levels of income disparity, particularly among African American and Hispanic residents." "Impact on Healthcare Access: Individuals and families living below the poverty line struggle to afford healthcare services, especially preventive care. Many rely on Medicaid or are uninsured, which limits access to regular health screenings, medications, and treatment for chronic conditions." "Unemployment Rates: Unemployment rates, while declining in recent years, remain higher than the national average, particularly in George County, where fewer industries are available. Employment insecurity contributes to the inability to afford healthcare and other basic needs, leading to poorer health outcomes over time." Singing River Gulfport Ocean 5prings Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 singingRiverHealthsystem.com Singing River "Food Deserts: Several parts of the SRHS community, especially rural regions of George County and parts of Jackson County, are classified as food deserts, where access to healthy and affordable food is limited. This contributes to higher rates of obesity, diabetes, and cardiovascular disease, as residents often rely on fast food or processed foods." "Access to Care: Approximately 51% of counties in Mississippi are considered maternity care deserts, lacking adequate maternal health services." "Housing Conditions: Substandard housing is a major issue, particularly in low-income neighborhoods across the entire SRHS community. Many of these residents live in homes that are older and in disrepair, leading to issues such as mold, lead exposure, and poor insulation, which can contribute to respiratory diseases and other health problems." "Transportation Barriers: The lack of public transportation in rural areas such as George County severely limits access to healthcare services. Many residents rely on private vehicles, and those without transportation face significant challenges accessing medical appointments, pharmacies, and preventive services." "Lower-income populations still struggle to access reliable, affordable transportation, contributing to missed healthcare appointments and delayed treatments" Note from Heath: SRHS financially subsidizes it's own Patient Transportation Program at a significant annual cost. This is a vital service to the many low-income residents we serve in our communities. "Uninsured Rate: The uninsured rate in the SRHS community remains higher than the national average.." "Medicaid Expansion: Mississippi has not adopted Medicaid expansion, leaving a significant gap in coverage for many low-income adults. The lack of Medicaid expansion disproportionately affects the working poor, particularly in rural counties like George and Jackson, where employment options are limited and employer-sponsored insurance is less prevalent." Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthsystem.com ra Singing River "Medicaid and Medicare Coverage: Medicaid is a crucial source of insurance for low-income families, children, and pregnant women in the SRHS community. However, many residents who fall slightly above the income threshold for Medicaid remain uninsured, highlighting the need for expanded eligibility or other affordable insurance options. Medicare serves a significant portion of the elderly population, but gaps in coverage for services like dental, vision, and hearing care remain a challenge for seniors." "Prescription drug costs represent a significant financial burden for many individuals, particularly those managing chronic conditions like diabetes, hypertension, and asthma. Although some assistance programs are available, many residentsespecially seniors on fixed incomesare forced to choose between purchasing medications and meeting other essential needs like housing and food." "As noted previously, dental, vision, and hearing care are often not covered under standard health insurance plans, including Medicare, leaving many residents without access to these critical services. These services are often overlooked in healthcare affordability assessments, but they have a significant impact on overall health. Poor oral health, for example, is linked to higher rates of cardiovascular disease and diabetes, and untreated vision and hearing issues can significantly reduce quality of life, especially for seniors." "Underutilization of Preventive Services: Preventive services, such as mammograms, colorectal screenings, and blood pressure checks, are often underutilized due to cost barriers. This is especially true in rural areas like George County, where residents may also face additional challenges, such as long travel distances to reach healthcare providers. The result is delayed diagnosis of chronic conditions and higher rates of complications that could have been prevented." "Low-Income Families: For low-income families, even small copayments and prescription costs can become insurmountable barriers. Rural residents in all three counties that define the SRHS community are more likely to face financial barriers due to the scarcity of local healthcare providers and fewer opportunities for employer-sponsored insurance." "SRHS Charity Care Program: SRHS offers a charity care program to assist low-income, uninsured, and underinsured patients in accessing care. However, many residents are either unaware of these programs or face difficulties in navigating the application process." Note from Heath: SRHS does provide a significant amount of financial assistance to our community. Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthsystem.com Singing River "Heart Disease According to recent data, heart disease remains the leading cause of death in Mississippi. Mississippi is one of the top 10 states with the highest heart disease death rates per 100,000 residents, at 255.2. However, disparities persist, with non-Hispanic and black adults experiencing higher CVD mortality rates than their non-Hispanic white counterparts. Diabetes Approximately 14.8% of Mississippi adults have been diagnosed with diabetes, a rate significantly higher than the national average. This prevalence underscores the need for targeted interventions to manage and prevent diabetes within the state. Hypertension Hypertension affects 43.9% of adults in Mississippi, contributing to increased risks of heart disease and stroke. Effective management and prevention strategies are essential to address this widespread condition. The hypertension prevalence in Mississippi (i.e., 43.9%) is 36.3% higher than the national average of 32.2%." "Respiratory Diseases Chronic respiratory disease, including chronic obstructive pulmonary disease (COPD) and asthma, are prevalent in Mississippi. The state's high rates of smoking and environmental factors contribute to these conditions, necessitating comprehensive public health initiatives to reduce their impact. Obesity Obesity is a significant concern in Mississippi, with approximately 40% of its adult residents classified as obese. Regarding the SRHS community, the obesity rate is (a) 35.4% in Jackson County, (b) 36.3% in Harrison County, and (c) 38.2% in George County. This condition is a major risk factor for various chronic diseases, including heart disease, diabetes, and certain cancers." "Emergency Department (ED) Utilization 1. ED Visit Rate: According to recent reports, the broader SRHS community reported approximately 500 ED visits per 1,000 residents, higher than the national average of 430 per 1,000. 2. Non-Emergent Visits: A significant portion of ED visits in the community were for non-emergent conditions, indicating potential gaps in primary care access." "Transportation was identified as a critical barrier, particularly for residents in rural areas of the SRHS service region. Participants shared personal stories of missing medical appointments due to a lack of reliable transportation options, compounded by long distances to healthcare facilities." Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHeolthSystem.com ra Singing River "Disproportionate Health Challenges Community discussions consistently highlighted the higher prevalence of chronic conditions such as diabetes, hypertension, and heart disease among minority and low-income populations. Participants also pointed out the compounded impact of these conditions when coupled with barriers like limited access to preventative care, inadequate transportation, and financial insecurity. Stakeholders noted that social determinants of healthincluding housing instability, food insecurity, and lack of educational opportunitiesplay a significant role in perpetuating these disparities." "Economic Stability Economic challenges were identified as a major barrier to achieving and maintaining good health. Community members shared stories of how low wages, unemployment, and job insecurity contribute to financial stress and limit access to healthcare services." "Jackson and Harrison County residents are significantly affected by substance abuse and addiction, as evidenced by high overdose death rates. The escalating opioid crisis, particularly involving synthetic opioids like fentanyl, exacerbates these challenges. Addressing this issue requires comprehensive public health strategies, including prevention, treatment, and support services, to mitigate the impact of substance use disorders in these communities." The above excerpts from the Community Health Needs Assessment Report underscore the absolute need for SRHS to serve as a Safety Net for the communities we serve. The low income and underserved gravely depend on their local safety net provider in order to survive. We certainly understand manufacturer concerns related to program oversight and duplicate discounts, and we agree program compliance is paramount. We are proud of our rigorous internal auditing practices and our active 340B Oversight Committee. We are not against strategies designed to ensure compliance is maintained, However- we have significant concerns that implementation of a rebate-based model being mandated as a way to ensure compliance. A Rebate Model would fundamentally alter the structure of the program and create significant operational and financial burdens that take away from the focused daily work on taking care of the vulnerable patients in our communities we serve. Operational Concerns Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthsystem.com Singing River A rebate model would introduce substantial administrative complexity for covered entities. Unlike the current upfront discount model, rebates would require: Extensive tracking and reconciliation of claims at the National Drug Code (NDC) level New system capabilities and interfaces across multiple third-party administrators, pharmacies, and wholesalers Increased staffing and audit resources to manage rebate submission, validation, and dispute resolution Many covered entities, particularly rural and safety-net providers, do not have the infrastructure or financial margin to support these additional burdens. Cash Flow and Financial Stability The current 340B structure allows covered entities to realize savings at the point of purchase, enabling predictable budgeting and reinvestment into patient care. A rebate model would shift financial risk to covered entities by requiring them to purchase drugs at full or near-full price and wait for reimbursement. This cash strain would negatively impact our Days Cash on Hand. We are required to keep a minimum number of days as part of our Bond Covenants. The Rebate model jeopardizes our ability to remain in compliance with these Bond Covenants. Delayed or denied rebates could significantly disrupt cash flow, particularly for high-cost specialty medications. This would create uncertainty in program savings and may force covered entities to reduce services, limit patient assistance programs, or reconsider participation in contract pharmacy networks. Patient Access Implications Any model that delays realization of 340B savings ultimately affects patient access. Covered entities use program savings to support medication affordability initiatives, chronic disease management programs, behavioral health services, and care coordination. If rebate payments are delayed, inconsistent, or administratively difficult to obtain, covered entities may be forced to: Reduce support for low-income patients Limit availability of certain high-cost medications Scale back outreach or clinical programs funded through 340B savings Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 SingingRiverHealthSystem.com This outcome would be inconsistent with the statutory intent of the program. Program Integrity Considerations Covered entities support reasonable measures to ensure program compliance and transparency. However, these objectives can be achieved through standardized data reporting frameworks, improved guidance on duplicate discount prevention, and collaborative solutions that preserve the upfront discount structure. A manufacturer-driven rebate model risks creating fragmented requirements across manufacturers, leading to inconsistent program administration and increased compliance risk. Recommendations We respectfully urge HRSA to: 1. Preserve the upfront discount structure as the foundation of the 340B program. 2. Avoid implementing a mandatory rebate model that shifts financial and operational risk to covered entities. 3. Engage covered entities in development of any future program integrity solutions. 4. Promote standardized, centralized processes rather than manufacturer-specific rebate requirements. 5. Conduct formal impact assessments on rural hospitals, safety-net systems, and contract pharmacy arrangements before adopting structural changes. The 340B program remains a critical lifeline for the patients we serve. Any changes should strengthen not destabilize the program's ability to support access to care. We appreciate HRSA's consideration of these comments and welcome continued dialogue. Sincerely, /4e-g--/A'"-\ Heath Thompson, RN MBA Administrator, Authorizing Officer, Singing River Health System Singing River Gulfport Ocean Springs Hospital Pascagoula Hospital 15200 Community Rd. 3109 Bienville Blvd. 2809 Denny Ave. Gulfport, MS 39503 Ocean Springs, MS 39564 Pascagoula, MS 39581 228-575-7000 228-818-1111 228-809-5000 5ingingRiverHealthSystem.com
HRSA-2026-0001-1750CommonSpirit Health2026-04-17T04:00Z7,385 chars
Kindly see the attached response to RFI as it relates to 340B Pilot. 1. Comr-not St Joseph Medical Center Tacoma, WA April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Reques for Information: 340B Rebate Model Pi!ot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide cornments to the Health Resources and Services Administration (HRSA) on the Request for Information (RH) related to a 340B Rebate Model Pilot Program. St, Joseph Medical Center is a tertiary Level II Trauma medical center with a family birth center, a Level III NICU, and a new midwifery center, as well as 24/7 emergency services and numerous specialty services like stroke and neurology care, cancer care, heart and vascular care, a Hospice program and Hospice House, neurosciences services, and Gamma Knife radiosurgery. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Medical Center that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Joseph Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Our outpatient infusion center provides comprehensive cancer care, chemotherapy, and non- oncology infusion services. Through Project Access, the Premium Assistance program helps cover premiums for insured individuals who cannot afford them, keeping them from becoming uninsured. Copay assistance is provided for patients who meet the criteria and cannot afford complete copays The Diabetes Assistance Program provides underinsured patients with insulin, monitoring equipment and supplies at no cost. St. Joseph obtains free medications for patients who have no insurance. Franciscan Hospice House cares for about 800 patients and performs individual comprehensive clinical medication reviews. We provide immunizations at shelters, food banks, and senior centers. Programs address opioid addiction with free naloxone to patients and families. Free medications, lab work, and diagnostic imaging to Neighborhood Clinic patients. Financial support for patients who cannot afford transportation, DME, housing, and caregiver costs. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 3408 statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful irnpact on our institution and the patients we serve. Higher Costs, No Benefit Our 34013 tracking and aud'ting systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both Apr 20, 2026 Commonspirit Health HHS Docket No. HRSA-2026-03042 insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Deepak Devasthali President St. Joseph Medical Center St. Joseph Medical Center Tacoma, WA +a Coffin-ionSpIrrV. As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1751Alaska Primary Care Association2026-04-17T04:00Z21,345 chars
Please see the attached comments from The Alaska Primary Care Association. 1 April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Alaskas 29 Community Health Centers (CHCs) and the 115,173 patients they serve, the Alaska Primary Care Association (APCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, APCA respectfully requests HRSA to take the following steps: 1. HRSA should not move forward with a mandatory rebate model for 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should consider creating a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA decides to pursue a rebate model, it should consider categorically exempting CHCs due to the heightened vulnerability to the financial strains it will create. 4. If HRSA decides to allow manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate 2 plans1 should include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, APCA explains: The importance of 340B savings to Alaska, which allows providers to deliver high-quality, affordable primary care, behavioral health, and dental care to their 93,290 low-income and 18,427 uninsured patients. A. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, straining their financial stability. B. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. C. Why HRSA should consider not imposing a mandatory rebate model on CEs and why, if the agency decides to do so, CHCs should be exempted due to their heightened vulnerability. D. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. E. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Alaska, CHCs routinely rely on 340B savings to support services such as: behavioral health, nutrition and laboratory services, primary and chronic care management, and community outreach. One Alaska CHC noted how they use their 340B savings to provide prescriptions for uninsured 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Source: h=ps://data.hrsa.gov/topics/healthcenters/uds/overview/naBonal 3 SecBon 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 or underinsured from $7 to $15. Under the rebate model, these same medications would cost over $200. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create cashflow, administrative, and other barriers for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does not protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. One CHC in Alaska estimates needing $3.35 million in upfront cash to maintain access 340B drugs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Multiple Alaska CHCs project hiring at least one FTE to manage administration, troubleshooting, and appeals management as well as additional IT burden for implementation and support. Some cost estimates are over $45,000 in startup costs and over $4,000 in ongoing monthly labor costs to support the program. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. 4 Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would likely occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. CHCs in Alaska also expressed concerns about needing to switch patients to cheaper, non 340B, drugs which require frequent laboratory monitoring and ongoing dose adjustments, thereby increasing clinical risk and healthcare utilization. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. 5 As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will o"en lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. The financial reality is clear - CHCs have faced concerning reductions, including but not limited to, in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., li"ing the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. D. CHCs should be considered for exemption from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we respectfully request HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA proceeds with a rebate model, APCA requests that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA includes CHCs in a rebate model, manufacturers should be required to incorporate at least six CHC protections in their plans. 6 In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we request HRSA to exempt CHCs from any rebate model, if the agency proceeds, APCA requests manufacturers incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will have to absorb the 7 full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan should contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should consider establishing a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. 5 Health Resources and Services AdministraBon 340B Program NoBce: ApplicaBon Process for the 340B Rebate Model Pilot Program, August 1, 2025. h=ps://federalregister.gov/d/2025-14619 8 Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing barriers for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would strain CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Nancy Merriman, CEO - Alaska Primary Care Association, at Nancy@alaskapca.org. Sincerely, Nancy Merriman, CEO APCA SIGN 9 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1752Neighborhood Improvement Project, Inc.2026-04-17T04:00Z58,320 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Neighborhood Improvement Project, Inc. 340B ID CH0438590 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors Nuvem, RxPreferred, Verity, Walgreens, Wellpartner Contact Name Wesley Wood Contact Email wesley.wood@mapbt.com Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 27,000 contract pharmacy 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $2.3M in administrative 340B cost for contract pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. The primary administrative cost drivers for operating the 340B rebate model include IT infrastructure and staffing. In an inhouse model, IT systems and software represent the largest expense at approximately $100,000 annually. Staffing and labor needs contribute an additional $50,000 per year, reflecting the personnel time required for claims processing, reconciliation, reporting, and compliance oversight. Additional costs may arise from internal audit activities and any supplemental thirdparty vendor support needed for data validation or specialized functions. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 23 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 23 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 23 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 23 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 23 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 23 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 23 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 23 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 23 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 10 of 23 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Page 11 of 23 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4. Data Collection By Covered Entities 3. Rebate Denials Process Page 12 of 23 340B Rebate Intake Form 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 13 of 23 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 14 of 23 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 15 of 23 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 16 of 23 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 17 of 23 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 18 of 23 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 19 of 23 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 20 of 23 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 21 of 23 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 22 of 23 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 23 of 23
HRSA-2026-0001-1753Community Health Partnership2026-04-17T04:00Z3,835 chars
See attached file(s) 408 N. Capitol Ave. San Jose, CA, 95133 408.556.6605 AACI Gardner Health Services Indian Health Center of Santa Clara Valley North East Medical Services Peninsula Healthcare Connection Planned Parenthood Mar Monte Ravenswood Family Health Center RotaCare Bay Area School Health Clinics of Santa Clara County COMMUNITY HEALTH PARTNERSHIP, INC., a consortium of community health centers April 16, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Community Health Partnership, a consortium of California-based federally qualified community centers and community clinics, we strongly urge HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B-covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 1. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers' rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. A summary of the comments that were previously submitted by the National Association of Community Health Centers and the California Primary Care Association is provided below: A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: o Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. o Evaluate less burdensome alternatives -- such as a neutral clearinghouse model that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, Policy Director, Cathryn Hyde at cathryn@chpscc.org. Sincerely, Dolores Alvarado, MPH, MSW Chief Executive Officer Community Health Partnership
HRSA-2026-0001-1754(no commenter metadata)2026-04-17T04:00Z35,624 chars
See attached file(s) Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: The Washington Association for Community Health (Association) appreciates the opportunity to comment on HRSA-2026-03042. The Association represents Washington states network of 28 Federally Qualified Health Center (FQHC) sites, which provide comprehensive primary, behavioral, dental, and pharmacy services to nearly 1.3 million patients annually in Washington, regardless of income or ability to pay. CHCs serve as the backbone of the health care safety net, in Washington state and across the nation. In 2024, CHCs across the country served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured.1 The 340B program is foundational to CHCs financial stability and their ability to serve the most vulnerable members of our community. Consistent with federal law2 and regulation3, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, CHCs in Washington routinely rely on 340B savings to provide services such as: Low-cost medications, Medication management and counseling, Chronic disease management, HIV & Hep C care, Dental care, Behavioral health care, Mobile clinics, Case management and patient outreach, and Workforce training and development. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources 1 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 2 Section 330(e)(5)(D) of the Public Health Service Act. 3 45 Code of Federal Register 75.307 Program Income Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org as far as possible. The proposed shift to a rebate model threatens to destabilize CHC pharmacy operations nationwide, significantly reduce 340B savings, and ultimately undermine patient access to care. Therefore, we strongly urge HRSA to not implement a mandatory rebate model for CHCs and any other 340B covered entity in order to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impacts and Potential Harms We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.4 This patient population relies on affordable medications to manage these long-term conditions. Due to cost or lack of availability, patients may be forced to make tough decisions and transition to other alternatives. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.5 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.6 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. Starting in 2027, the MDPNP will include some behavioral health drugs, expanding the risk to 4 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 5 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 6 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org CHC patients who rely on certain medications to manage their mental health conditions. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.7 Impairing access to these drugs could result in exacerbation of the mental health crisis. These are tangible examples of how the rebate model creates a significant affordability challenge for patients, many of whom already struggle with affordability of health care. II. Severe Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. At least five health centers in Washington state estimated that the cost to purchase the 10 MFP drugs under the proposed rebate model would be an increase of over $5,000,000 annually. Several others estimated cost increases of $750,000 - $3,000,000. This increase in costs will have a devastating impact on the ability of CHCs to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. This is just one example of what all CHCs in Washington will experience. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHCs anticipate being forced to reduce essential clinical services, staffing, and patient financial assistance. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans, and 1.3 Washingtonians, rely on for health care. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. A. Impact on Sliding Fee Discounts The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, including entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion that will impact a CHCs ability to offer sliding-fee discounts at the point of purchase. 7 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines for all required and additional health services within the HRSA-approved scope of the project.8 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. B. Unsustainable Impact on Cash Flow CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).10 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. C. Risk of Rebate Denials and Related Delays Financial challenges are further worsened due to risk of rebate denials and related delays. While CHCs appreciate HRSAs requirement for a 10-day timeframe for rebate payments, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. 8 HRSA FAQ 9 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 10https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Without more enforcement details and the already complex need for reconciliation, any denials or delays leading to a reduction in financial resources will directly affect CHCs abilities to fulfill their mission of serving all patients, regardless of ability to pay. The Association respectfully requests that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. III. Administrative Complexities The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments, in addition to existing compliance needs due to manufacturer restrictions and other policies. CHCs will have to dedicate significant resources towards navigating this pilot. Depending on whether CHCs operate in-house pharmacies, contract with external pharmacies, or both, CHCs will need to make significant changes to remain compliant. We encourage HRSA to consider the following increases in costs associated with increased administrative and operational burdens as a result of the rebate model: Pharmacy software costs: Both upfront costs and ongoing maintenance fees for software upgrades to integrate custom software to track rebate reconciliation and compliance Third-party administration costs: particularly for CHCs with contract pharmacies, the rebate model will require increased reliance on TPAs to track and reconcile claims and ensure rebates are paid correctly for medications dispensed at contract pharmacies. Other IT integration costs: For CHCs that operate their own pharmacies, in-house pharmacy systems will require costly customization to integrate their Electronic Health Record and Pharmacy Management System to provide real-time, accurate information at the pharmacy counter. Burdens associated with clinic-administered drugs: The majority of clinic- administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org available, they incur an additional cost and often require CHC to pay for a standalone software system. CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. This includes Operational Site Visits; existing 340B compliance protocols that involves internal audits, training, and external oversight; and annual reporting of 340B-related information through the Uniform Data System (UDS). Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. IV. CHCs Have Heightened Vulnerabilities The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirelyresulting in avoidable harm to patients. A. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) B. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. C. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. D. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Ultimately, if HRSA proceeds with a rebate model, CHCs must be exempted due to the disproportionate negative impact and heightened threat to their financial stability. Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will also be most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B. As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. V. Proposed Rebate Model Lacks Protections for Covered Entities The Association is deeply concerned that the pilot program fails to provide protections for CHCs and other covered entities. While we strongly encourage HRSA to not implement a rebate model, if HRSA implements this model and imposes this model on all covered entities, HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. A set of national, standardized administrative rules are needed to reduce unnecessary confusion and burden for CEs. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026. These standardized rules should include: Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; A clear and separate dispute resolution process to provide a formal procedure for when a CHCs to dispute rebate denials. The Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes because current ADR timelines are too slow; and A requirement for manufacturers to reimburse CHCs for all costs incurred due to the rebate pilot, and reimbursement must be provided promptly and transparently; and A requirement for manufacturers to publish all determination processes, eligibility calculations, and any other items involved in the determination process. Furthermore, we recommend incorporating protections into rebate model plans to mitigate the financial risk and administrative burden for covered entities: For each rebate drug, manufacturers should advance CHCs enough rebates to cover either two full package sizes or two months worth of dispense, whichever is greater. This policy would go a long way to mitigating the ongoing cashflow issues discussed above. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: o Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. o For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. 340B rebates should be provided on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. Rebates should provided at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. BINs and PCNs should not be required on rebate claims. These two data elements are both: Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org o Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. o Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. VI. Alternative Approach to Allow Upfront 340B-Priced Payments to CHCs As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. By reducing costs on CEs, this alternative would avoid the service reductions that would result from a rebate model. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA require manufacturers to leverage existing resources Our Mission: To strengthen and advocate for Washingtons Community Health Centers as they build healthcare access, innovation and value. 101 Capitol Way N Suite 200 Olympia, WA 98501 Phone (360) 786-9722 www.wacommunityhealth.org to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A 340B rebate model represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care The proposed model directly threatens CHCs financial stability and will force reductions in the essential services these patients rely on. CHCs will be forced to bear additional costs to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Washington Association for Community Health urges HRSA to not implement a mandatory rebate model for any 340B covered entities. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals without imposing the harms of a rebate model as described in our comments. If HRSA insists on pursing a rebate model, it should exempt CHCs due to their heightened vulnerability to the financial strains it will create and the disproportionate harm to patients served by CHCs and other safety net providers. Lastly, if HRSA insists on allowing manufacturers to impose a rebate model on CHCs, HRSA should include additional guardrails and protections to reduce the negative financial impacts on CHCs and their patients. The Washington Association for Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot. We trust the agency will carefully consider all stakeholder input and evaluate less harmful alternatives. Thank you for your consideration and for your continued commitment to the nations safety net. We look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Alyssa Patrick at APatrick@wacommunityhealth.org or Dave Pearson at DPearson@wacommunityhealth.org. Sincerely, Dave Pearson Chief Executive Officer Washington Association for Community Health
HRSA-2026-0001-1755Sharp HealthCare2026-04-17T04:00Z27,763 chars
See attached file(s) 1 April 17, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Sharp HealthCare in San Diego, California, we appreciate the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). This RFI asks, among other things, whether HRSA should replace the 340B Programs longstanding upfront discount mechanism with a post-purchase rebate model. The answer is no. As the American Hospital Association (AHA) and other hospital groups have emphasized, a rebate mechanism would upend more than three decades of practice under which covered entities receive 340B pricing through an upfront discount at the time of purchase. Sharp HealthCare has built its staffing, systems, compliance workflows, and financial planning around that established model. Moving to rebates would impose substantial new administrative burdens, introduce payment uncertainty and disputes, and shift financing risk to safety-net providersdiverting resources away from patient care and the 340B statutory purpose of enabling covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The RFI poses 30 detailed questions and encourages commenters to include supporting facts, research, and evidence. The timeline for responding to these 30 questions makes it difficult for hospitals to comprehensively gather and present the information HRSA seeksparticularly where covered entities must estimate one-time implementation costs and ongoing operational burdens across multiple departments and vendors. Sharp HealthCare has done its best to provide detailed, good-faith preliminary estimates based on the information currently available as we work to submit comments by April 20, 2026. However, if HRSA continues to consider any rebate framework, it should provide a further opportunity for stakeholders to comment on specific program design features (e.g., drugs and manufacturers included, required data elements, standardized formats, permissible grounds for denial, timelines for payment, dispute resolution, audit and enforcement, and privacy and security safeguards). 2 Administrative Costs Under a Potential 340B Rebate Program: Any rebate program would require Sharp HealthCare to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Sharp HealthCare understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Sharp HealthCare anticipates that the proposed 340B rebate pilot would require a substantial investment of additional administrative and operational hours. A rebate model introduces added complexity around claim tracking and validation, as well as: Reconciliation processes Dispute management Increased labor costs and risk of unrecovered savings Unlike upfront discounts, rebates are not guaranteed at the point of purchase, creating risk in relation to: Incomplete or rejected claims Eligibility disputes Manufacturer non-payment or delays Staffing Impacts Under a Potential 340B Rebate Program: Sharp HealthCare does not currently have the staff needed to comply with a rebate program and would need to recruit additional 340B personnel to oversee claim submission, reconciliation, and dispute resolution. These responsibilities are anticipated to require more than 40 hours per week far exceeding HRSAs projection of five hours per week. The requisite support for these activities involves several critical areas outlined below. Data Extraction: Due to limitations in the 340B rebate pilot vendor software workflows, standard medical/pharmacy claim workflows, and third-party administrator restrictions, Sharp HealthCare is unable to automate the data extraction process. As a result, 340B staff must manually pull and merge data to meet required specifications. These activities include: o Extracting pharmacy claims from 340B software o Retrieving medical claims from the IT platform o Integrating and formatting data in separate software to comply with manufacturer software vendor requirements Data Validation: Staff will upload data to the manufacturer software vendor portal and address any non- conforming claims before final submission. This step ensures that all claims meet the necessary standards for processing. 3 Claim Validation: The team will review, troubleshoot, and resolve any claims rejected by the manufacturer software vendor portal. This process includes extracting new data, validating it, and re- uploading the corrected claims for further review. Reconcile 340B Rebates: Staff must validate that rebate payments are received and match those listed in the rebate portal. Since each claim often includes pharmaceuticals from multiple manufacturers, multiple rebates may be included in a single payment. This requires extensive review and collaboration with the accounting team to ensure receipt of all eligible payments. Reconcile Accounts Receivable: In addition to confirming receipt of manufacturer payments, staff must establish and reconcile rebate-related accounts receivable by manufacturer and time period, post receipts to the general ledger, research underpayments or missing remittances, and track outstanding balances through resolution. Because a single submission may span multiple manufacturers and may be paid via consolidated remittance files, this work requires detailed payment matching, variance analysis, and ongoing coordination with accounting to ensure amounts are recorded accurately and collected timely. Financial Reporting: The 340B team will be responsible for creating monthly, quarterly, and annual reports for financial tracking and reporting purposes, ensuring transparency and accuracy in rebate management. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: Sharp HealthCare has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We project that more than 200 hours will be required to establish new data requirements, enhance existing software, adapt operational workflows, and update data provisions with third-party administrators. This initiative will involve coordinated efforts and support from multiple departments, which may temporarily shift focus from other priorities, including patient care, quality and safety. The tasks include, but are not limited to, the following: IT Support: The implementation of the proposed 340B rebate pilot will require substantial IT support. This effort will be comprehensive, beginning with the setup of new systems required for the pilot to function effectively. IT teams will be responsible for developing and thoroughly testing new data interfaces that enable seamless communication and data exchange between internal operations and external manufacturers. An important aspect of this process involves ensuring that all new data required by manufacturers is accurately captured and integrated into existing workflows. In addition, 4 the IT team must also account for redundant data already available in current feeds, making certain that it is properly incorporated and does not cause inconsistencies or duplications. These IT initiatives are essential to fulfill data requests from manufacturers and to maintain uninterrupted and efficient data operations throughout the duration of the 340B rebate pilot. Third-Party Vendor: Establish data connections, validate data accuracy, ensure all required data fields are captured, and confirm all affected claims are included. Legal Review: Carefully examine the manufacturer's vendor terms and conditions to confirm patient privacy is protected and that they comply with applicable legal standards. Policy and Procedure Development: Update internal policies and workflows to meet the pilot requirements and maintain 340B compliance. Compliance Review: Assess manufacturer vendor specifications and operational processes to guarantee comprehensive compliance with government and regulatory standards. 340B Committee Review: Thoroughly examine policies and procedures to ensure that every stage of the workflow aligns with the criteria established for the 340B rebate pilot. Cross-reference documentation, verify compliance with all relevant guidelines, and identify any gaps or areas for improvement. Staff Training: Develop training materials and conduct sessions with administrative, pharmacy, and finance staff. 340B Personnel Recruitment: Advertise openings, recruit candidates, conduct interviews, and facilitate onboarding for new 340B personnel to support the implementation of the 340B rebate pilot program. We estimate the timeline from recruitment initiation to onboarding completion to be approximately 180 days. Data Collection by Covered Entities: During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Sharp HealthCare currently collects and maintains 340B Program participation data through a combination of internal pharmacy and billing systems and a third-party 340B administration (split-billing) solution used for in-house dispensing. Because we have terminated all contract pharmacies, our 340B data processes are limited to in-house outpatient pharmacy activity and applicable hospital-administered drugs. Our 340B team uses the 340B administration software to 5 identify eligible transactions, apply configured business rules, maintain auditable accumulation records, and produce standard compliance outputs. We retain supporting documentation (e.g., claim extracts, eligibility logic, audit trails, and policy/procedure documentation) consistent with applicable record-retention requirements and internal compliance practices. Data is validated through ongoing exception reporting, periodic reconciliations between source systems and the 340B platform, and routine internal audits focused on patient eligibility, drug eligibility, and prevention of diversion and duplicate discounts. A 340B Rebate Model Pilot Program would materially change these current activities. Under the upfront discount model, data collection primarily supports correct 340B accumulation and compliance. A rebate model would add a new purposemanufacturer-facing rebate substantiationwhich would require additional data elements, new formatting/standardization requirements, new submission workflows, and a new cycle of post-submission reconciliation and dispute management. Some work would be one-time (e.g., building data mapping, developing new extracts/interfaces, updating policies and procedures, and training staff), but much of the work would be ongoing and recurring (e.g., recurring claim-level submissions by manufacturer, continuous monitoring of rejections/edits, resubmissions, reconciliation of remittances, accounting for reversals/adjustments, and maintaining documentation to support potential manufacturer or HRSA reviews). To comply with rebate-model data demands, we would need to pull and reconcile information from multiple internal systems that are not designed to function as a single, claim-level rebate eligibility record. At a minimum, this would require coordinated extracts and crosswalks across (1) pharmacy dispensing/claims systems, (2) the electronic health record/charge capture for hospital-administered drugs, (3) patient registration and eligibility/coverage data, and (4) accounts receivable and general ledger systems to validate and post rebate receipts. These cross-system pulls would require ongoing IT support and significant manual effort by 340B staff to merge files, normalize data fields, address missing or conflicting identifiers, and respond to manufacturer portal edits and claim rejections. Manual work would also be required to manage claim reversals and adjustments (e.g., returned-to-stock prescriptions, secondary billing changes, or corrected claims), which can occur after initial adjudication and would require continuous reconciliation so that prior submissions are corrected and over/under-payments are resolved. HRSAs assumption that the burden may not be significant because covered entities already collect comparable data is not accurate for Sharp HealthCare and similarly situated covered entities. While we do collect data necessary to operate and audit 340B under an upfront discount model, that is not the same as producing manufacturer-ready rebate submissions that must meet evolving, manufacturer-specific technical specifications, validation rules, timing requirements, and dispute processes. In practice, a rebate model would be burdensome because it would require: (1) new claim-level data elements and standardized formatting beyond what is routinely needed for 340B accumulations; (2) recurring submissions to multiple manufacturers (and potentially multiple vendor portals), each with different rules and error-resolution processes; (3) extensive reconciliation across multiple data sources (EHR, pharmacy systems, payer adjudication, and 6 finance) to substantiate eligibility and payment; (4) ongoing manual intervention to correct rejected claims, manage reversals and adjustments, and respond to disputes; and (5) increased privacy and security review, since claim-level submissions increase the amount and sensitivity of data exchanged externally. Moreover, we have already experienced that existing third-party vendor relationships do not eliminate burden340B administration tools are designed around purchase/accumulation workflows, not post-dispense, manufacturer-facing rebate adjudication. Shifting to a rebate model therefore creates a new, ongoing operational function, increasing staffing needs, IT build and maintenance, and financial risk due to delayed, partial, or disputed rebate payments. Payment Timing and Potential Cash Flow Impacts: Unlike the existing upfront discount mechanism, any rebate mechanism will force Sharp HealthCare to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Payment timing under a 340B rebate modeleven with a stated target such as payment within ten calendar days of submission of a complete claimwould materially and negatively affect our organizations cash flow. Under a rebate structure, the covered entity must first acquire drugs at non-340B (WAC) prices and wait for post-dispense reimbursement, shifting the financial burden and working capital requirements from manufacturers to safety-net providers. This model introduces several financial risks. 1. Creates a cash flow gap between drug acquisition and rebate receipt, requiring the organization to use unrestricted cash. 2. Payment timelines are inherently dependent on claim validation, dispute resolution, and administrative processing across multiple entities, creating uncertainty around whether payments would consistently meet stated timelines. Even short delays or partial denials would compound financial exposure given the volume and cost of 340B eligible medications. For organizations operating with limited margins like Sharp HealthCare this uncertainty represents a meaningful financial risk. Delayed or disputed rebates could reduce cash on hand, constrain liquidity ratios, and impair the organizations ability to meet short-term obligations. Unlike the current upfront discount model, which provides predictable and immediate savings, a rebate model shifts risk to the covered entity without a corresponding ability to control the timing, accuracy, or completeness of reimbursement. Instead of purchasing drugs at a reduced 340B price, Sharp HealthCare would be required to purchase at wholesale acquisition cost (WAC) or higher, creating a significant upfront cash outlay. Even a 10-day delay introduces a structural lag between expense recognition and savings realization. The assumption of within 10 days depends on: Clean claim submission 7 Manufacturer processing timelines Dispute resolution processes Any delays, denials, or administrative errors could extend payment cycles, creating cash flow volatility and forecasting challenges Given the scale of pharmaceutical spend across inpatient and outpatient settings, this timing shift could require millions in additional short-term liquidity to cover the gap between purchase and rebate receipt. Adverse Impacts of These Additional Costs and Burdens: All these costs and burdens add up. Unfortunately, that means that Sharp HealthCare will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Savings generated through upfront 340B discounts are directly and intentionally incorporated into our financial planning and budgeting processes. These savings are reflected in cash on hand projections, annual operating budgets, and multiyear financial forecasts, providing predictable support for core operations and patient-focused services. On an annual basis, anticipated 340B savings are budgeted as a recurring funding source that helps offset uncompensated care, pharmacy program costs, and other mission-critical expenses. Because the savings are realized at the point of purchase, they offer financial predictability that allows leadership to plan with confidence and maintain adequate liquidity without relying on external financing. Additionally, upfront 340B savings support long-term planning and capital decisions, including investments in new or expanded services, facility repairs, technology upgrades, and programmatic initiatives that improve access to care. The reliability of upfront discounts enables Sharp HealthCare to commit to these projects without assuming repayment risk or exposure to delayed reimbursement. A transition to a rebate-based model would undermine this predictability by converting immediate, budgeted savings into a contingent receivable. This shift would complicate financial forecasting, reduce confidence in long-term planning, and potentially require the organization to scale back or defer investments currently supported by stable 340B savings. Reliance Interests: The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Sharp HealthCare reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based 8 on an upfront discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. At Sharp HealthCare, 340B savings generated through upfront discounts are a core component of our financial planning and patient care investment strategy. These savings are incorporated into our budgeting and long-term planning in the following ways: Operating Budget Support: Annual 340B savings are built directly into departmental and system-level budgets, helping to offset: Rising pharmaceutical costs Unreimbursed or under-reimbursed care (e.g., Medi-Cal, uninsured populations) Other mission-critical pharmacy and clinical program expenses Cash-on-Hand and Financial Projections: Because savings are realized upfront, they contribute immediately to: Days cash on hand (DCOH) Short-term liquidity forecasting Reduced reliance on external financing A rebate model would weaken this position by delaying cash inflows and increasing variability. Funding for Patient Care Programs: 340B savings support critical services, including: Medication assistance programs Expanded outpatient pharmacy services Care coordination for high-risk populations Investment in Strategic Initiatives: Savings are reinvested into long-term priorities such as: Expansion of service lines (e.g., ambulatory and specialty care access) Technology investments (e.g., Epic optimization, pharmacy analytics tools) Workforce stabilization and clinical staffing support Capital and Infrastructure Support: 340B savings help fund: Facility upgrades and repairs Equipment replacement Program development aligned with community needs Efforts To Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Sharp HealthCare, HRSA should rely on those other options. Any other 9 decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Sharp HealthCare is required by state regulations and certain government programs to self-identify 340B claims using claim modifiers, ensuring the prevention of duplicate 340B discounts and manufacturer rebates. Our electronic records system is configured to identify eligible claims and automatically apply the necessary modifiers prior to claim submission. Additionally, we conduct comprehensive audits to verify that claims are submitted with the appropriate modifiers as required. Any potential claims missing modifiers are promptly addressed through established processes. Manufacturers periodically inquire about claims that they identify as potentially 340B eligible, requesting multi-year reviews for potential duplicate discounts. To date, all such inquiries have confirmed no duplicate discounts, as the reviewed claims did not qualify as 340B eligible. Our automated process for self-identification and modifier application is efficient and requires minimal resources for ongoing audit and validation to ensure consistency with our software. The recently implemented MFP rebate process by manufacturers, intended to prevent duplicate discounts, has introduced significant redundancy and increased the risk of both duplicate discounts and inaccurate identification of 340B-eligible claims. Pharmacy claims are captured in the claim portal at adjudication, but some claims are later reversed if medications are not picked up by patients, sometimes after 340B rebates have already been issued. This necessitates additional manual reconciliation to correct and align future records. Furthermore, while rebates have been paid on claims identified as 340B by Sharp HealthCare, manufacturer portals often lack the capability to accurately recognize 340B eligibility. This results in extra time and resources required to recoup rebates and reconcile these amounts with future orders. Introducing an additional 340B rebate portal, as previously proposed by manufacturers, would further compound these issues due to discrepancies in timing and data sources. Our current deduplication processes effectively identify 340B-eligible claims, minimize redundant efforts, and prevent duplicate discountschallenges that current manufacturer rebate programs are not equipped to address. Finally, if HRSA nevertheless proceeds with any rebate-based approach, the agency must establish clear, uniform guardrailspaired with meaningful oversight and enforcementto prevent delays, denials, shifting requirements, and inconsistent manufacturer practices from eroding statutory 340B savings. At a minimum, covered entities should not be required to comply with manufacturer-specific portals, bespoke data standards, or unilateral terms and conditions as a precondition to receiving the 340B ceiling price. 10 For these reasons, Sharp HealthCare respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. We respectfully urge HRSA to abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this effort, it must allow covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, /s/ Elly Maienschein Vice President, Government Relations Sharp HealthCare Sharp Memorial Hospital, San Diego, CA Sharp Chula Vista Medical Center, Chula Vista, CA Sharp Coronado Hospital, Coronado, CA Grossmont Hospital, La Mesa, CA
HRSA-2026-0001-1756(no commenter metadata)2026-04-17T04:00Z4,827 chars
See attached file(s). CALIFORNIA RURAL INDIAN HEALTH BOARD, INC. ___________________________________________ 1020 Sundown Way, Roseville, CA 95661 Phone: 916-929-9761 Fax: 916-771-9470 www.crihb.org April 17, 2026 Thomas J. Engels Chantelle Britton Administrator Director, Office of Pharmacy Affairs Health Resources and Services Administration Health Resources and Services Administration 5600 Fishers Lane 5600 Fishers Lane Rockville, MD 20857 Rockville, MD 2085 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels and Director Britton: On behalf of the California Rural Indian Health Board (CRIHB), representing 70 federally recognized Tribes and 20 Tribal Health Programs (THPs), I write in response to the Health Resources and Services Administrations Request for Information regarding a potential 340B Rebate Model Pilot Program (HRSA-2026-03042). CRIHB strongly opposes any transition from the current upfront discount structure to a rebate- based model under the 340B Program. Tribal Health Programs rely on the 340B Program to stretch scarce federal resources and maintain access to essential medications and services for American Indian and Alaska Native patients in rural and medically underserved communities. A rebate model would fundamentally undermine this purpose by requiring providers to absorb significant upfront drug costs and navigate delayed reimbursement, creating serious financial and operational challenges. For Tribal Health Programs, which operate on limited margins and without significant capital reserves, a rebate model would introduce substantial cash flow risk. In addition, it would impose new administrative burdens for claims tracking, rebate submissions, denials, reconciliation, and compliance requirements, diverting limited resources from patient care. These concerns are consistent with those raised by bipartisan Members of Congress, including Representatives Matsui, Johnson, Dingell, and Mann, who recently led a letter to appropriators urging inclusion of language to block implementation of a 340B rebate model.1 1 Letter from Reps. Doris Matsui, Dusty Johnson, Debbie Dingell, and Tracey Mann, et al., to Chair Robert Aderholt and Ranking Member Rosa DeLauro, House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, urging inclusion of FY 2027 appropriations language prohibiting implementation of a 340B rebate model, Mar. 27, 2026 (signed by 94 Members of Congress). CALIFORNIA RURAL INDIAN HEALTH BOARD, INC. ___________________________________________ 1020 Sundown Way, Roseville, CA 95661 Phone: 916-929-9761 Fax: 916-771-9470 www.crihb.org Most importantly, a rebate model would threaten patient access. Tribal Health Programs serve some of the most underserved populations in the country, and any disruption in drug affordability or reimbursement would have immediate consequences for care delivery in these communities. CRIHB does not believe a rebate model would meaningfully improve program integrity, reduce diversion, or address duplicate discount concerns beyond existing oversight mechanisms. Instead, HRSA should focus on strengthening current program integrity tools while preserving the upfront discount structure that covered entities have relied upon for decades. If HRSA moves forward with a rebate model pilot or broader implementation, CRIHB strongly urges that Tribal Health Programs be fully exempt. This exemption is necessary not only to prevent administrative burden, but to avoid further exacerbating longstanding federal funding inequities and to uphold the federal trust responsibility to Tribal Nations, as reflected in federal law. Congress has declared that it is the policy of this Nation, in fulfillment of its special trust responsibilities and legal obligations to Indians... to ensure the highest possible health status for Indians and urban Indians and to provide all resources necessary to effect that policy.2 Thank you for your consideration of these comments. We welcome continued engagement on this issue. If you have any questions or would like additional information, please contact Cesar Gonzalez-Garcia, Health Policy Analyst at the California Rural Indian Health Board, at (916) 953-3573 or cgonzalez-garcia@crihb.org. Sincerely, Virginia Q Hedrick, MPH (Yurok/Karuk) Chief Executive Officer California Rural Indian Health Board, Inc. 2 Indian Health Care Improvement Act, 25 U.S.C. 1602(1), 25 USC 1602: Declaration of national Indian health policy; see also Snyder Act, 25 U.S.C. 13, 25 USC 13: Expenditure of appropriations by Bureau
HRSA-2026-0001-1757Anchorage Neighborhood Health Center2026-04-17T04:00Z8,505 chars
See attached file(s) Our Mission: To be a trust partner in every persons wellness by providing integrated, compassionate, and high-quality health care, regardless of ability to pay. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Anchorage Neighborhood Health Center (ANHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. ANHC is a Federally Qualified Health Center (FQHC) that has provided integrated medical, dental, behavioral health, and pharmacy services to Alaskans for more than 50 years. Our 340B pharmacy program is a cornerstone of this missionhelping patients access affordable medications, manage chronic conditions, and avoid costly emergency room visits. In 2025 alone, ANHC served 15,039 unique patients across 47,783 visits, offering care in 56 languages and providing $7.1 million in uncompensated care regardless of patients ability to pay. Operational and Administrative Impact Based on internal claims data, our in-house pharmacy processes an average of 250 claims per month that would require review under this model. Each claim currently requires approximately 15 minutes of staff time for auditing and troubleshooting within the Beacon portal. This equates to 62.5 staff hours per month dedicated solely to claim processing, at an average fully loaded FTE rate of $62.04 per hour, totaling $4,063.75 per month in labor costs. Additionally, we pay $3,000 per month in Proximity software cost to develop a feed from our in-house pharmacy. There are also significant personnel resource implications. Leading up to the initial proposed rebate launch, approximately 0.25 FTE ($22,770) of the pharmacy directors time for 6 months was required as Our Mission: To be a trust partner in every persons wellness by providing integrated, compassionate, and high-quality health care, regardless of ability to pay. a one-time investment to establish workflows and gain proficiency with the Beacon platform and MTF processes. Ongoing, we anticipate at least 0.1 FTE yearly ($18,216) will be required to manage rebate follow-up activities. The 340B program compliance manager has similarly required approximately 0.5 FTE ($20,085) over six months as a one-time investment to prepare for the proposed rebate model, with a projected ongoing need of 0.25 FTE ($20,085) to support compliance, data submission, and audit response. Looking ahead, we anticipate the need for an additional 1.0 FTE ($80,652) dedicated to claims troubleshooting, reconciliation, and appeals management. We also expect partial FTE impacts for finance, as well as additional burden on our IT team to support system integration and data management needs. Furthermore, initial setup of the Pioneer feed required a one-time investment of approximately 0.25 FTE from both the 340B Program Compliance Manager ($1,673) and the pharmacy director ($3,795) over a one-month period. Billing and Compliance Implications From a dispensing perspective, February 2026 data show 254 prescriptions (approximately 5% of total dispensed volume) would fall under the rebate model. Of these, 106 prescriptions are billed to Medicaid. Under the proposed structure, these prescriptions would require acquisition at Wholesale Acquisition Cost (WAC), while billing Medicaid at the 340B acquisition cost prior to rebate reconciliation. As required under Section 1927(a)(5)(B) of the Social Security Act, covered entities must bill no more than their actual acquisition cost plus a professional dispensing fee. Additionally, drugs under the 340B Rebate Pilot Program must be billed at the 340B ceiling price rather than the pre-rebate purchase price. This creates a significant operational burden related to pricing accuracy and monitoring. Currently, pricing is automatically updated through our wholesaler interface on a daily basis. Under the rebate model, staff would need to manually verify HRSA-approved 340B ceiling prices daily for each applicable NDC (currently 81 included in the pilot), introducing both inefficiency and increased risk of billing errors. Patient Impact and Access to Care The financial implications for patients are also substantial. Our current sliding fee scale supports patients at or below 200% of the Federal Poverty Level, many of whom are uninsured or underinsured. These patients currently pay our acquisition cost plus a nominal fee, typically ranging from $7 to $15 for a 30- day supply. Under the rebate model, these same medications could cost between $204 and $212 per month. Our Mission: To be a trust partner in every persons wellness by providing integrated, compassionate, and high-quality health care, regardless of ability to pay. This is particularly concerning for our patients on critical therapies such as anticoagulants, including Eliquis and Xarelto. These newer, safer medications may become unaffordable, forcing patients to transition to older alternatives like Warfarin, which require frequent laboratory monitoring and ongoing dose adjustments, thereby increasing clinical risk and healthcare utilization. Impact on Safety-Net Services While the current pilot is limited in scope, it has the potential to inform broader changes to the 340B program and Medicaid reimbursement structures. The downstream impact on ANHC could include reductions in sliding fee discounts and cuts to essential services for vulnerable populations. Our 340B savings currently support clinical pharmacy programs (including diabetes, hypertension, nutrition, and anticoagulation management), as well as laboratory and dental services for uninsured and underinsured patients. Financial and Cash Flow Implications Finally, the rebate model introduces cash flow challenges. Purchasing medications at WAC requires significantly higher upfront capital, which we estimate based on last year's purchases to be an increase of at least $3.3 million. We may not have sufficient liquidity to consistently cover these costs within standard wholesaler payment timelines, which could disrupt medication access and supply continuity. Conclusion ANHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges and administrative burden, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. ANHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ANHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Director of Communications, Ahliil Saitanan, at asaitanan@anhc.org. Our Mission: To be a trust partner in every persons wellness by providing integrated, compassionate, and high-quality health care, regardless of ability to pay. With gratitude, Lisa D.H. Aquino Chief Executive Officer Anchorage Neighborhood Health Center
HRSA-2026-0001-1758NNI2026-04-17T04:00Z73,386 chars
See attached file(s) April 17, 2026 Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Mail Stop 08W05A Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: Novo Nordisk Inc. (NNI) appreciates the opportunity to provide the following comments on the Health Resources and Services Administrations (HRSA) February 17, 2026, Request for Information: 340B Rebate Model Pilot Program. NNI is a member of the Pharmaceutical Research and Manufacturers of America (PhRMA); unless otherwise noted, our comments incorporate by reference the comments submitted by PhRMA on this matter. NNI urges HRSA to move forward to expeditiously implement a 340B Program rebate model which is expressly authorized by the plain text of the 340B statute, essential to prevent duplicate discounts and diversion, and necessary to provide the claims-level transparency that will realign the 340B Program with its intended mission of serving indigent patients. NNI is a global health care company committed to improving the lives of those living with serious chronic conditions, including diabetes, rare bleeding disorders, growth disorders, and obesity. The Novo Nordisk Foundation, our majority stakeholder, is among the top five largest charitable foundations in the world. Our companys mission and actions reflect the Foundations vision to contribute significantly to research and development that improves the lives of people and the sustainability of society. NNI has long supported the federal 340B Drug Pricing Program (340B program) as a critical part of the nations efforts to help indigent and vulnerable patients access discounted medications. Manufacturers (like NNI) are the exclusive source of funding for the 340B Program, amounting to tens of billions of dollars per year in manufacturer-provided subsidies. The growth of the program over the past fifteen years paired with lax oversight and enforcement, however, has resulted in a proliferation of abuses, with for-profit actors exploiting the program for their own financial gain and at the expense of uninsured and indigent patients. In an increasingly complex health care landscape, which has evolved significantly in the thirty years since Congress created the 340B program, there is a critical need to address abuses and to realign the 340B program with its patient-focused mission. NNI includes in the enclosed appendix additional explanation and detail in response to specific questions raised by HRSA in the February 17 Federal Register Notice. NNI Supports the 340B Programs Mission, but Current Implementation Undermines the Integrity Protections Congress Required Before Congress enacted section 340B of the Public Health Service Act, drug manufacturers voluntarily provided their drugs at reduced prices to providers that served poor and uninsured patients. In 1992, Page 2 of 20 Congress turned those charitable commitments into a legal mandate, creating the 340B Program, which requires that any manufacturer participating in the Medicaid Drug Rebate Program must offer outpatient drugs to covered entities at deeply discounted prices.1 The statute is designed to protect the federal programs integrity and avoids violating constitutional constraints by limiting when manufacturers can be forced to transfer their products to other parties at below- market prices (often as low as a penny a pill). The statute limits who can participate in the program, defining covered entities to include only fifteen categories of clinics, non-profit hospitals, and other providers that provide medical services to predominantly low-income and uninsured patients.2 The statute prohibits the sale or transfer of drugs at the federally discounted price to anyone who is not a patient of the covered entity.3 It prohibits duplicate discounts.4 And it imposes affirmative obligations on HRSA to implement improvements to ensure compliance by covered entities and to protect the programs integrity.5 It also imposes an affirmative obligation on covered entities to maintain auditable records to demonstrate they are complying with the statute and not abusing the 340B program.6 Importantly, under the 340B statute, manufacturers and covered entities are not similarly situated. Because the drugs belong to manufacturers, they retain their rights to control their own property except as those private rights are limited by the statutes express terms.7 It is therefore significant that the statute does not restrict manufacturers from providing 340B discounts through a rebate mechanism or imposing reasonable conditions on their offers. Nothing in the statute directs manufacturers to deliver drugs at discounted prices to all locations that covered entities may demand;8 nor are manufacturers required to provide drugs to covered entities when there is a high likelihood that extra-statutory discounting is occurring. Moreover, because manufacturers statutory obligation to offer their drugs at deeply discounted prices is a condition of participation in Medicaid, it must be proportional to the benefit manufacturers receive by making their drugs available to Medicaid beneficiaries. There also must be a nexus between the obligation imposed and a valid government purposehere, ensuring that indigent and uninsured patients have access to the medications they need.9 In contrast to manufacturers, covered entities are only incidental beneficiaries of a government program that is designed to assist patients. Covered entities have no private or common law right to access medications at the discounted 340B prices, and certainly no right to contract with other parties to profit from the sale of manufacturers discounted drugs. Their only rights are the limited public rights expressly granted by statute, subject to complying with the statutes requirements and the prohibitions against 1 42 U.S.C. 256b(a)(1). 2 Id. 256b(a)(1), (a)(4)(A)(O). 3 Id. 256b(a)(5)(B) (With respect to any covered outpatient drug that is subject to an agreement under this subsection, a covered entity shall not resell or otherwise transfer the drug to a person who is not a patient of the entity.). 4 Id. 256b(a)(5)(A)(i). 5 Id. 256b(d)(1)(2). 6 Id. 256b(a)(5)(C) (requiring covered entities to permit the Secretary and the manufacturer of a covered outpatient drug ... to audit ... the records of the entity that directly pertain to the entitys compliance with the requirements described in subparagraphs (A) or (B) with respect to drugs of the manufacturer.). 7 Sanofi Aventis U.S. LLC v. United States Dept of Health & Hum. Servs., 58 F.4th 696, 707 (3d Cir. 2023) (Legal duties do not spring from silence.); Novartis Pharms. Corp. v. Johnson, 102 F.4th 452, 460 (D.C. Cir. 2024) ([T]his silence preservesrather than abrogatesthe ability of sellers to impose at least some delivery conditions.). 8 Sanofi, 58 F.4th at 704. 9 See Cedar Point Nursery v. Hassid, 141 S. Ct. 2063, 2079 (2021) (explaining that the government may require property owners to cede a right of access as a condition of receiving certain benefits only if the condition bears an essential nexus and rough proportionality to a legitimate government interest (quoting Dolan v. City of Tigard, 512 U.S. 374, 386, 391 (1994))); see also Nollan v. Cal. Coastal Commn, 483 U.S. 825 (1987). Page 3 of 20 diversion and duplicate discounting.10 For covered entities, participating in the 340B program is a privilege that they receive only because they are intermediaries who are supposed to be in a position to use manufacturers discounted drugs to benefit patients. For over thirty years, NNI has participated in the 340B program, helping vulnerable patients access discounted medications. Such discounts were intended to respond to legal changes in 1992 that would otherwise have prevented manufacturers from continuing charitable programs under which they made drugs available at discounted prices to healthcare providers who provide high levels of uncompensated care to uninsured or low-income patients who visited their facilities. The program has since metastasized far beyond its founding and only legitimate purpose. Through the proliferation of spread pricing, which allows 340B entities to generate substantial profits by purchasing drugs at the 340B price and then billing patients and insurers at higher rates, 340B hospitals and other entities have distorted the original intent of the program into a revenue-generating arbitrage scheme at the expense of the very patients the program was designed to benefit. When it launched, the program encompassed around 90 hospitals.11 Now, the 340B program has morphed into the countrys second largest prescription drug program, larger than even the Medicaid Drug Rebate Program from which it was created.12 In 2024, the program accounted for $81.4 billion in discounted total sales, up nearly 23% from the prior year.13 A program that has grown and mutated this dramaticallyeven as the patient populations it was designed to benefit have shrunk14requires modernized safeguards and reforms to match. The 340B Programs Growth Has Benefited Intermediaries, Not the Vulnerable Patients It Was Designed to Serve The 340B programs explosive growth has not been caused by an increase in the number of indigent patients. Instead, the growth has been primarily attributable to the fact that, with the aid of consultants, the program has expanded to allow covered entities to transfer drugs to for-profit entities that are profiting from the sale of manufacturers drugs. When Congress created the program, it was with the expectation that covered entities would purchase manufacturers drugs and dispense them to patients through their own in- house pharmacies. In 1996, the Department of Health and Human Services (HHS) issued new guidelines indicating that a covered entity could use a single point for pharmacy services: either an in-house pharmacy or a single contract pharmacy. Then, in 2010, HHS issued new non-binding guidance stating that for the first time it would allow covered entities to contract with an unlimited number of contract pharmacies, arrange for the transfer of manufacturers drugs to those pharmacies, and then permit the pharmacies to 10 See Astra USA, Inc. v. Santa Clara Cnty., Cal., 563 U.S. 110, 11319 (2011) (holding that covered entities have no right of action under 340B itself, that Congress vested authority to oversee compliance with the 340B Program in HHS and assigned no auxiliary enforcement role to covered entities, and that covered entities could not circumvent these limitations by suing as third-party beneficiaries of the Pharmaceutical Pricing Agreements because [t]he statutory and contractual obligations, in short, are one and the same). 11 House Committee on Energy and Commerce Report, H.R. Rep. No. 102384(II), at 13 (1992). 12 See Ellie Blalock et al., The Pharmaceutical Supply Chain, 20132023 4 (Jan. 2025), https://media.thinkbrg.com/wp-content/uploads/2025/01/06161850/PhRMA_Supply-Chain-2013-2023_White- Paper.pdf. 13 HRSA, 2024 340B Covered Entity Purchases, https://www.hrsa.gov/opa/updates/2024-340b-covered-entity- purchases. 14 See Karyn Schwartz, 340B Paradox: As the Uninsured Rate Drops, 340B Program Continues to Grow, PhRMA (Apr. 2, 2015), https://phrma.org/blog/340b-paradox-as-the-uninsured-rate-drops-340b-program-continues-to-grow (According to a January [2015] analysis by Gallup, the uninsured rate has dropped by 4.2 percentage points since the ACA went into effect in January 2014. Not surprisingly, this has resulted in hospitals seeing more insured patients with access to affordable medicines, yet under the ACAs Medicaid expansion, if a hospital has many patients transitioning from being uninsured to having Medicaid, that hospital would become more likely to qualify for 340B just as its burden of caring for the uninsured was declining.). Page 4 of 20 dispense manufacturers drugs to patients.15 This drastic change made via non-binding guidance resulted in an unprecedented increase in program growth, expense, and abuse. One study reported an increase of 4,228% in the number of contract pharmacies between 2010 and 2020.16 With this massive expansion, there are increasing concerns that pharmacies are supplying 340B purchased drugs obtained at discounted prices to customers who are not patients of the covered entity and that manufacturers are being forced to pay duplicate discounts on such utilization. The ability to identify these statutory violations has been complicated by the widespread use of what is known as the replenishment model.17 Instead of purchasing drugs directly from manufacturers (or their wholesalers) and using the drugs to provide services and care to the patients who receive healthcare services at the hospitals themselves, hospital covered entities commonly contract with large, for-profit commercial pharmacies that are often located far away from the covered entitys facilities and the indigent and uninsured patients they serve. The pharmacy dispenses drugs to the pharmacys customers at the regular price. The pharmacy and the covered entity then later determine whether, in their self-serving view, the customer qualifies as a patient of the covered entity. If the customer meets certain undisclosed criteria known only to the covered entity, the covered entity then seeks to replenish the unit of the drug originally sold to the pharmacy customer at the regular price by purchasing a new unit of the drug at the discounted 340B price. The covered entity and the pharmacy pocket the difference, and neither the patient nor the patients insurance company sees any part of the manufacturers large 340B discount. To say it plainly: the covered entity industry has partnered with the commercial pharmacy industry to exploit and extract revenue from the pharmaceutical industry, relying on opacity and confusion to manipulate an outdated statutory scheme and an increasingly complex drug delivery environment to their extraordinary benefit. A measure of balance in this program is long overdue. The amount of money involved is staggering. A 2026 report by the Minnesota Department of Health, for instance, indicated that Minnesota hospitals and clinics participating in the 340B Program reaped at least $1.34 billion in 340B revenue in 2024, and the largest institutions were the biggest beneficiaries.18 Pharmaceutical manufacturers fund the entirety of this transfer. Specifically, Minnesota hospitals and clinics received $3.04 billion in discounted medicines under the 340B program, and paid only $1.53 billion plus another $165 million to various vendors and other third parties in administration fees. Meanwhile, the largest hospitals received more than $1 billion in net 340B revenue, representing over 80% of the total statewide net 340B revenue collected.19 In North Carolina, 340B hospitals levied an average price markup of 5.4 times their discounted acquisition costs.20 Egregiously, individual entities collected as much as $6,026 in average profits per claim by charging up to 12.7 times their 340B acquisition costs for oncology drugs.21 These practices caused North Carolina 340B hospitals to record higher net profit margins, on average, than non-340B hospitals from 2013 to 2021.22 In addition, the North Carolina Report found that 340B hospitals numbered among those that reported the lowest investments in charity care from 2011 to 15 75 Fed. Reg. 10272, 10276 (Mar. 5, 2010). 16 Aaron Vandervelde et al., For-Profit Pharmacy Participation in the 340B Program at 4 (Oct. 2020), https://media.thinkbrg.com/wp-content/uploads/2020/10/06150726/BRG- ForProfitPharmacyParticipation340B_2020.pdf. 17 See Novartis, 102 F.4th at 457. 18 Minnesota Department of Health, 340B Covered Entity Report: Report to the Legislature (Feb. 27, 2026), https://www.health.state.mn.us/data/340b/docs/2025report.pdf. 19 Id. 20 North Carolina State Health Plan, Overcharged: State Employees, Cancer Drugs, and the 340B Drug Pricing Program, https://www.shpnc.gov/documents/overcharged-state-employees-cancer-drugs-and-340b-drug-price- program/download?attachment (last visited March 18, 2026). 21 Id. 22 Id. Page 5 of 20 2021.23 Commercial pharmacies (including the largest chain-store pharmacies in the country) have pocketed billions (on top of the profits received by hospital covered entities).24 Because covered entities rarely pass on discounts to patients at the point of sale, the 340B program has become a mechanism for covered entities and their for-profit intermediaries contract pharmacies and third-party administrators to engage in arbitrage for their own financial benefit at the expense of patients.25 Expansion of hospital-owned child sites off-campus outpatient facilities has further exacerbated program abuse at the expense of patients. As reported by the GAO and in front-page articles in both the New York Times and Wall Street Journal, there has been a recent trend of hospitals acquiring community- based physician practices, often in wealthier and distant locations, and converting them to off-campus outpatient facilities (called child sites) so that they can participate in the 340B program. These child sites generate lucrative revenue for the hospital, which is funneled to the wealthier neighborhoods at the expense of health care centers serving low-income individuals.26 Not only is the program being abused; there is very little transparency. Even though covered entities have a statutory obligation to maintain auditable records, and even though the statute prohibits diversion and duplicate discounting, manufacturers have been systematically denied the information needed to protect against abuses. Covered entities point to the administrative costs, while ignoring the windfall in benefits they receive. They have come to rely on receiving massive subsidies from drugmakers like NNI, claiming that any attempt to address abuses or enforce compliance with the statute is too complicated to administer and threatens their existence and drug access. At the same time, the program no longer serves its patient- focused goals. Instead of ensuring that indigent and uninsured patients have access to discounted medications, the program has become a money-making scheme for covered entities and their large commercial, for-profit contracting partners. Persistent Compliance Failures Demand Structural Reform Beyond enriching entities Congress never intended to benefit, the programs unchecked growth has rendered its compliance safeguards wholly inadequate. As noted above, it is often the case that a covered entity will claim that a pharmacy customer is a patient of the covered entity even when the prescription is not written in connection with a service provided by the covered entity itself, or when the pharmacy customer has only an attenuated relationship with the covered entity. This practice is known as diversion. 23 Id. 24 See Adam J. Fein, Drug Channels News Roundup, December 2020: 340B Pharmacy Profits, Pre-Amazon PillPack, Physicians vs. Accumulators, Maines Importation Fail, and Vaccine Humor, Drug Channels (Dec. 10, 2020), https://www.drugchannels.net/2020/12/drug-channels-news-roundup-december.html (referencing Eric Percher et al., Nephron Research LLC, The 340B Program Reaches a Tipping Point: Sizing Profit Flows and Potential Disruption (2020) (concluding that $3.348 billion in 340B discounts were retained as profit by contract pharmacies in 2020 alone)). 25 See Press Release, PhRMA, New Analysis Shows Contract Pharmacies Financially Gain From 340B Program with No Clear Benefit to Patients (Oct. 8, 2020); Adam J. Fein, The Federal Program That Keeps Insulin Prices High, Wall St. J. (Sept. 10, 2020) (explaining that almost half the U.S. pharmacy industry now profits from the 340B program, while patients dont benefit). 26 See Katie Thomas & Jessica Silver-Greenberg, Profits Over Patients: How a Hospital Chain Used a Poor Neighborhood to Turn Huge Profits, NY Times (Sept. 24, 2022); Anne Wilde Mathews et al., Many Hospitals Get Big Drug Discounts. That Doesnt Mean Markdowns for Patients, Wall Street Journal (Dec. 22, 2022); See also, A Government Accountability Office investigation has shown that the program has faced enormous program integrity challenges without sufficient oversight to stem abuses by covered entities. See GAO 20-108, Increased Oversight Needed to Ensure Nongovernmental Hospitals Meet Eligibility Requirements (2019) (finding that covered entities that fail to meet the statutory requirements for program eligibility are nevertheless being allowed to participate in the 340B program due to weaknesses in HRSAs oversight). Page 6 of 20 There is also a significant risk of duplicate discounts, meaning that manufacturers provide a discount at the 340B price for a medication that is also subjected to a rebate or another discount. The 340B statute prohibits Medicaid duplicate discounts, and the Inflation Reduction Act (IRA) prohibits maximum fair price (MFP) duplicate discounts. For example, manufacturers are required to provide the MFP discount in the form of reimbursement after the manufacturer receives notice that a patient is eligible. Thus, if a covered entity purchases a product at the 340B price, and the product is later dispensed to an IRA-eligible patient, a duplicate discount may occur because the covered entity would have purchased the drug at the 340B price and then subsequently received an MFP refund from the manufacturer on that same dispensed drug. These problems are difficult to detect. One reason is because covered entities do not transfer drugs purchased at discounted prices to contract pharmacies and patients at the point of sale. Instead, they regularly demand access to the discounted 340B price long after the pharmacy has dispensed a drug to its pharmacy customer at the full price. Across Medicaid, Medicare, and commercial channels, the scope of this problem is significant: IQVIA estimates that duplicate discounts accounted for one-quarter of total 340B drugs sales in 2021, representing approximately $20-25 billion in total.27 The replenishment model may not have been designed to obscure duplicate discounting, but it is performing that function on a daily basis. Instances of these program abuses are well-known to HRSA. Since the Government Accountability Office (GAO) first reviewed the 340B Program in 2011, it has identified numerous weaknesses in HRSAs oversight and made twenty recommendations for HRSA to address them, including the following representative excerpts from the GAOs reports28: HRSA reported that the agency issued a total of 1,536 findings to address covered entity noncompliance found in the 1,242 finalized audits conducted from fiscal years 2012 through 2019 as of September 2020. These findings, which address violations of statutory requirements and a failure to follow guidance that HRSA developed to clarify these requirements, were in the areas of eligibility (561), diversion (546), and duplicate discounts (429)....29 HRSA officials also said that there were instances among fiscal year 2019 audits in which the agency also did not issue duplicate discount findings for a failure to follow a states Medicaid requirements, including billing the state Medicaid office for a 340B drug without using a claim identifier to indicate a drug purchased at the 340B discounted price. HRSA officials said that these findings were not issued because the agency does not have statutory authority to enforce state Medicaid requirements.30 [HHSs Centers for Medicare & Medicaid Services (CMS), which administers the Medicare and Medicaid Programs] does not have the information needed to effectively ensure that states exclude 340B drugs from Medicaid rebate requests. CMS also does not have a reasonable assurance that states are seeking rebates for all eligible drugs, potentially increasing costs to state and federal governments due to forgone rebates.31 GAO found weaknesses in HRSAs oversight that impede its ability to ensure compliance with 340B Program requirements at contract pharmacies, such as: HRSA audits do not fully assess 27 IQVIA, Uncover the Invisible Impacts of 340B Discounts (Dec. 20, 2021), https://www.iqvia.com/locations/united-states/blogs/2021/12/uncover-the-invisible-impacts-of-340b-discounts 28 GAO, GAO-26-108784, 340B Drug Discount Program: Agency Oversight Has Improved, but Actions Needed to Address Weaknesses (2025). 29 GAO, GAO-21-107, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements (2020). 30 Id. 31 GAO, GAO-20-212, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement (2020). Page 7 of 20 compliance with the 340B Program prohibition on duplicate discounts for drugs prescribed to Medicaid beneficiaries.32 HRSAs process for closing audits does not ensure covered entities have fully addressed any noncompliance identified.33 Of GAOs twenty recommendations, HRSA has attempted to implement just five, leaving persistent weaknesses in known problem areas such as the agencys audit process, contract pharmacy oversight, and duplicate discount prevention unaddressed.34 The current upfront purchase and replenishment model has proven unworkable: third parties profit, compliance failures persist, manufacturers are damaged, and meaningful reform is long overdue. Without the necessary claims-level transparency that a rebate model can supply, manufacturers can access only incomplete data, limited to what covered entities submit in connection with manufacturers 340B integrity policies. The need for reform has only intensified as the health care system has grown increasingly complex and as the 340B Program now intersects with multiple other federal programs. Congress recognized this intersection when it enacted the IRA, which expressly prohibits MFP duplicate discounts: manufacturers may not be forced to provide both the MFP refund under the Medicare Drug Price Negotiation Program and the 340B discount on the same claim. Yet under the current model, there is no existing mechanism to readily identify and prevent duplicate discounts. A rebate model for the 340B Program is therefore the logical and necessary solution to ensure program integrity. Congress Explicitly Contemplated Administration of the 340B Program Through a Rebate Model The plain text of the 340B statute explicitly contemplates rebates as a mechanism for manufacturers to offer their drugs for sale at the 340B price. The 340B statute expressly directs that the discount rate provided by manufacturers to covered entities known as the ceiling price may be effectuated by either a front-end discount or back-end rebate.35 Congress therefore permitted both discounts and rebates as appropriate mechanisms for manufacturers to provide their drugs at 340B prices.36 Rebates are a commonly used mechanism for manufacturers to provide discounts and other price concessions in Medicaid, Medicare Part B, Medicare Part D, the Medicare Price Negotiation Program, and TRICARE. Rebates are also contemplated for the three new CMMI model demonstrations: GENEROUS, GLOBE, and GUARD. Implementing a rebate model in the 340B Program would align it with other federal programs. Rebates are particularly appropriate in the 340B context because (1) the characteristic of the pharmacy customer is highly relevant, as 340B covered entities may only transfer and dispense drugs subject to the 340B price to their patients as defined by law; and (2) the replenishment model has severed the connection between the purchase of a drug and its dispensing to a pharmacy customer, depriving manufacturers and the government of the data necessary to detect and prevent program abuses, and creating a transparency gap that a rebate model could close. Providing 340B discounts at the point of purchase, without the necessary information about eligibility- defining dispenses, is an invitation to abuse (that some covered entities have exploited for decades). That 32 GAO, GAO-18-480, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement (2018). 33 GAO, GAO-26-108784, supra. 34 Id. 35 42 U.S.C. 256b(a)(1). 36 See House Committee on Energy and Commerce Report, H.R. Rep. No. 102-384(II), at 8, 12, 16. Page 8 of 20 point-of-purchase discounts have ceased to be an appropriate means of effectuating the 340B program is a product of the methods adopted by the covered entities and their commercial partners: drug manufacturers did not bring the program to this point. A rebate mechanism is an important step toward re-establishing fundamental program integrity. When HRSA published the rebate model pilot program notice on August 1, 2025, the agency took an important (albeit modest) first step in developing an appropriate rebate mechanism for the 340B program. The rebate model not only provides a means by which to address unlawful MFP duplication and multiple other discounts on the same claim, it also sends a clear message that the 340B program must operate fairly for all stakeholders. HRSA must move expeditiously to implement a rebate model for the 340B program. This action is squarely within the agencys statutory authority and essential to ensuring program accountability, transparency, and integrity, particularly in preventing duplicate discounts and diversion. More Than Three Decades of Growth and Complexity Have Made 340B Claims-Level Transparency Essential to Federal Programs Integrity The need for claims-level transparency has never been more urgent. Notwithstanding their statutory obligations to maintain adequate and auditable records, some covered entities have refused to provide basic 340B claims data to the government or manufacturers, and some states actively obstruct such transparency, seeking to change the requirements of federal law. This fragmented approach exposes manufacturers to significant duplicate discount risk, and when multiple discounts apply to the same drug unit, manufacturers are often forced to sell certain products at a loss. Duplicate discounts could thus undermine innovation, discourage research and development, and ultimately deprive patients of life-saving medications. Without claims-level data transparency, these abuses continue unchecked, harming the integrity of not only the 340B program but also other federal programs. Requiring covered entities to provide access to claims-level data would significantly strengthen the Medicaid program. Federal law prohibits covered entities from claiming both a 340B discount and a Medicaid rebate on the same drug.37 To prevent these duplicate discounts, states must identify 340B drugs dispensed to Medicaid beneficiaries and exclude them from rebate requests.38 But CMS gives states discretion in how to do so, and the results are inconsistent. Some states rely on HRSAs Medicaid Exclusion File (MEF), but the MEF simply identifies which covered entities use 340B drugs for Medicaid fee-for- service patients: a provider-level determination, not a claim-level one. Further, because the MEF covers only fee-for-service, HRSA warns against using it for managed care.39 With the majority of Medicaid enrollees, prescriptions, and spending for drugs now in managed care,40 there is no reliable mechanism to prevent duplicate discounts in the largest segment of the program. The implementation of the IRA also underscores the need for claims-level 340B program data. Section 1193(d) of the Social Security Act pertaining to the Medicare Drug Price Negotiation Program prohibits duplicate MFP and 340B discounts on the same claim. Instead of enforcing this requirement itself, HHS has taken the position that it is the Primary Manufacturers responsibility to effectuate nonduplication of 340B and MFP discounts.41 HHS has made clear that manufacturers must work with others in the pharmaceutical supply chain to facilitate access to the lower of the MFP and the 340B ceiling price, 37 42 U.S.C. 256b(a)(5)(A)(i). 38 GAO, GAO-24-106784, supra. 39 Id. 40 Id. 41 CMS, Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028 (September 30, 2025) (IPAY 2028 Final Guidance) 40.4.5. Page 9 of 20 wherever applicable.42 The most reliable way for a manufacturer to meet this obligation is through obtaining access to claims-level 340B data, which a rebate model is uniquely suited to provide. CMS has also failed to develop an accurate method to exclude 340B units from the IRAs Medicare Part D inflation rebate calculations. Instead, CMS relies on a Prescriber-Pharmacy Methodology, which the agency concedes is imprecise.43 Claims-level transparency would replace this uncertain estimation with actual data. Because of how the 340B program operates, there is no ready or plausible way to identify duplicate discounts at the point of sale. Precisely because of the widespread use of replenishment practices, and because covered entities are incentivized to obfuscate claims, it is virtually impossible for manufacturers to know when a product that is subject to MFP might later be identified by a covered entity as eligible for replenishment at the 340B discounted price. Intentional opacity is not a compliant strategyit is camouflage for lawbreaking. The Berkeley Research Group estimates that manufacturers stand to lose $4 billion in duplicate 340B and MFP discounts in 2026 alone absent the rebate model.44 The only practical way to avoid duplicate discounts is a retrospective rebate, similar to how MFP refunds are processed under the IRA. To reinforce this point, when HRSA announced the rebate model pilot program in the Federal Register on August 1, 2025, it observed that manufacturers previously proposed rebate models primarily to address 340B and Maximum Fair Price (MFP) deduplication, but also to facilitate other aims such as the prevention of 340B Medicaid duplicate discounts and diversion.45 Implementation of a rebate model is an initial step toward addressing illegal and improper duplicate discounting and diversion. The basic claims data collected through the rebate model would also materially strengthen the audit process. By generating basic claims-level data necessary to identify and substantiate instances of covered entity noncompliance, HRSA would be better positioned to identify those covered entities that may be violating the law. Under the 340B statute, manufacturers cannot initiate an administrative dispute resolution (ADR) claim against a covered entity without first auditing a covered entity. Access to claims level data would enable manufacturers to more effectively conduct audits of covered entities and to advance resolution of ADR claims with covered entities. A rebate model would deliver the transparency these programs demand and should be an option for all drugs immediately without implementation of a pilot program. If HRSA nonetheless decides to first pursue a pilot program, that pilot program should, at a minimum, be applicable to all selected drugs under the IRA, with continued expansion as new drugs are selected each year. A Rebate Model Can Provide Benefits to Other Stakeholders, Including Patients, Health Plans, and Covered Entities Given the lack of oversight and guardrails for how profits from the 340B program are used, patients (and their health plans) see little to no direct benefit from these discounts afforded to hospitals. Studies show that while the use of contract pharmacies has grown exponentially, the overall level of charitable care provided by hospital covered entities has not.46 In fact, a 2023 report found that 69% of 340B 42 Id. 43 See 90 Fed. Reg. 49266, 49745 (Nov. 5, 2025). 44 BRG, Implications for Duplication with the 340B Channel (Oct. 2024), https://www.thinkbrg.com/insights/publications/implications-for-duplication-with-the-340b-channel. 45 90 Fed. Reg. 36163, 36163 (Aug. 1, 2025). 46 See Wayne Winegarden, PRI Ctr. for Med. Econ. & Innovation, Profiting From 340B: A Review of Charity Care and Financial Performance at 340B Hospitals, at 7 (2021), https://medecon.org/wp-content/uploads/2021/11/340B- Page 10 of 20 disproportionate share hospitals provide charity care at rates lower than the national average.47 A North Carolina report explained that 340B hospitals numbered among those that reported the lowest investments in charity care from 2011 to 2021, and one covered entity reported $50.6 million more in 340B profits than the systems total charity care spending in 2018.48 A 2026 analysis from IQVIA found that [s]tate employee health plans across 46 states collectively incurred an estimated $1.0 billion in excess costs due to 340B revenue generation, with individual states such as New York facing annual overcharges as high as $88.8 million. These costs translate into higher premiums for public employees, increased taxpayer costs, and growing pressure on the sustainability of state-sponsored health benefits.49 Also, it has been reported that hospitals participating in the 340B program, constituting up to 87% of 340B sales, sometimes charge patients and insurers several times the discounted acquisition cost for specialty drugs, with markups as high as 25 times the average sales price, but there is no transparency to know what portion, if any, of these profits are passed on to patients or used to support vulnerable populations.50 Implementation of a rebate model would introduce transparency measures, helping to take a modest step in preventing fraud and duplicate discounts. Covered entities would also stand to benefit under a rebate model. Rather than accumulating claims to place a replenishment order, covered entities would purchase the drug at the wholesale acquisition cost or list price and then submit a rebate claim to the manufacturer. Utilization of a 340B rebate model would address accumulation issues for covered entities by shifting from a virtual, package-level replenishment model to a claim-by-claim reimbursement system which would eliminate the need to wait for sufficient quantity to accumulate a full package size before triggering a purchase. There is no waiting while a medicine sits on the shelf because a rebate claim may be made at the time of purchase. This enables a hospital to seek reimbursement at the time of purchase and eliminates delays in seeking refunds while also reducing waste due to product expiration issues. Such a model would also standardize the timeframe and process for how payments are handled, and simplify 340B and MFP deduplication for all program participants. A rebate model would not be disruptive to a covered entitys existing operations. As most of these entities already use a replenishment model -- where the initial purchase is at the list price and they receive a discount post-dispensing (and only after there are sufficient purchases to replenish at the 340B price) -- a rebate model would not materially change the economics of how covered entities already operate. It is also unlikely, despite unsubstantiated claims to the contrary, that effectuation of a rebate model and the associated data collection requirements would significantly increase program costs for covered entities. In a recent study from the Minnesota Department of Health, the state determined that hospitals and clinics paid a reported $1.53 billion in acquisition costs plus another $165 million to various parties for administration fees. Covered entities have therefore already invested in systems and infrastructure to track, Study_FinalWeb.pdf; Adam J. Fein, Exclusive: 340B Program Purchases Reach $24.3 Billion7%+ of the Pharma MarketAs Hospitals Charity Care Flatlines, Drug Channels (May 14, 2019), https://www.drugchannels.net/2019/05/exclusive-340b-program-purchases-reach.html. 47 Alliance for Integrity & Reform, Charity Care at 340B Hospitals is on a Downward Trend (2023), https://340breform.org/wp-content/uploads/2024/03/2023-Charity-Care-Report-Final- 1.pdf. 48 North Carolina State Health Plan, Overcharged: State Employees, Cancer Drugs, and the 340B Drug Pricing Program, supra. 49 Chuan Sun et al., The Cost of 340B to State Employee Health Plans (2026), https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2026/the-cost-of-340b-to-state-employee-health-plans.pdf. 50 Adam J. Fein, 340B Hit $81 Billion in 2024 (+23%): Why CMS and the IRA Are Poised to Cool the Programs Runaway Growth, Drug Channels (Dec. 15, 2025), https://www.drugchannels.net/2025/12/340b-hit-81-billion-in- 2024-23-why-cms.html; Anna Wilde Mathews et al., Many Hospitals Get Big Drug Discounts. That Doesnt Mean Markdowns for Patients. Wall St. J. (Dec. 20, 2022), https://www.wsj.com/articles/340b-drug-discounts-hospitals- low-income-federal-program-11671553899. Page 11 of 20 administer, and manage 340B transactions. A rebate model would leverage these existing capabilities, not require them to be built from scratch. Further, a covered entitys operational costs pale in comparison to the revenues generated from manufacturer discounts. It strains credulity to argue that a rebate model will cause covered entities to face crushing costs and consequences or put them at existential risk.51 Surely spending a fraction of what covered entities earned from manufacturers on program integrity and compliance is a small price to pay for the benefits of 340B participation. Covered entities also routinely collect the necessary data that manufacturers would require to effectuate refunds on 340B purchases and submit data to third-party administrators. Similar data is also routinely used by covered entities to seek commercial and public reimbursement on behalf of patients. Many also submit data pursuant to manufacturer policies. In addition to all that, as noted above, covered entities are statutorily required to maintain auditable records to demonstrate compliance with program requirements. Accordingly, the information that is needed to ensure that the rebate model is a success is information that covered entities are already required to collect and maintain as part of the privilege of being able to access manufacturers drugs at deeply discounted prices. Given the existing costs and data collection obligations under the current system, a shift to a rebate model would not materially impact program participant costs. Moreover, any limited increase in costs that may occur is justified by the need to avoid statutory violations and to bring accountability to the program.52 HRSA must therefore act without delay to implement a rebate model. Covered Entities Cashflow Concerns Are Overstated Covered entities contend that a rebate model will harm their cashflow because of the lag time between purchasing a product and receiving a rebate. These concerns are overstated. Under the current replenishment model, covered entities already float their initial purchase and wait for a full package to be depleted before seeking a replacement at the 340B price. Under a rebate model, covered entities could access 340B pricing more quickly on a per-unit basis. Moreover, a rebate model with a 10-calendar-day rebate deadline as contemplated by HRSAs initial 2025 rebate pilot approvals would in most cases deliver 340B rebates before wholesaler invoices become due. IQVIA recently confirmed this conclusion, finding that although wholesalers [p]ayment terms vary from pre-pay to 45 days or more, multiple respondents indicated that the standard is 30 days unless the provider agrees to a shorter period in exchange for more favorable terms.53 Using these standard parameters, IQVIA concluded that the rebate model performs as well as physical inventory and physical replenishment, and better than credit-based replenishment.54 In the limited cases where a covered entity pays its wholesaler before receiving a 340B rebate, any float will be temporary at the initiation of a rebate model and alleviated once rebate payments are flowing on a continuous basis effectively operating in the same manner that the existing replenishment model operates, but with necessary transparency. 51 See Compl. at 5, 13 Am. Hosp. Assn v. Kennedy, No. 2:25-cv-00600 (D. Me. Dec. 1, 2025). 52 Cf. HHS, Trump Administration Prioritizes Affordability by Announcing Major Crackdown on Health Care Fraud (Feb. 25, 2026), at https://www.hhs.gov/press-room/trump-administration-prioritizes-affordability-announcing- major-crackdown-health-care-fraud.html (We are replacing the old pay and chase model with a real-time detect and deploy strategy, using advanced AI tools to identify fraud instantly and stop improper payments before they go out the door.) 53 Chuan Sun et al., How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, IQVIA 8 (Dec. 2, 2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b- white-paper-2025.pdf. 54 Id. at 18. Page 12 of 20 More fundamentally, there is no reason to believe that covered entities are unable to adjust their operations to address any cashflow concerns. Any costs associated with program compliance are a very small fraction of the enormous financial windfall that covered entities receive from choosing to participate in the 340B program and, as a result, being able to purchase manufacturers drugs at discounted prices, sell them at regular prices, and pocket the difference. Requiring covered entities to shoulder modest costs to avoid duplicate discounting and other program abuse is not an unreasonable burden. Alternatives or Limitations to a Rebate Model Should Not Be Pursued Manufacturers have demonstrated that rebate models can be operationalized. HRSA should promptly move to reinstate the rebate model and provide the readily available explanation why the rebate model is appropriate and consistent with statutory requirements. In response to HRSAs August 1, 2025 rebate model pilot program and before the courts intervened, eligible manufacturers incurred substantial costs to develop and stand up a system to receive data from covered entities and pay refunds on eligible 340B claims. Any other proposals to implement alternate systems, such a clearinghouse, would only serve to undercut the significant time and cost invested in implementation of a rebate model. Further, a clearinghouse model, which relies on a retrospective data collection model, would occur after covered entities receive the benefit of discounted prices. The program would still operate under a pay and chase model where covered entities would continue to receive upfront discounts and any data collection or analysis would occur well after the covered entity received the discount. Absent material changes to mandate participation and address the challenges with retrospective data collection, this type of clearinghouse model would not on its own address the lack of transparency and accountability in the system. Similarly, any attempts to exclude certain entities from a rebate model would only limit the ability of HRSA to assess how well a rebate model can work and exacerbate the existing, widespread abuses of the 340B program. Prior attempts to exclude entities have proven to exacerbate program integrity issues as covered entities exploit carveouts to the detriment of manufacturers. It is critical that HRSA move forward promptly to effectuate a rebate model that enables manufacturers to work with covered entities to effectuate 340B refunds on all eligible claims. * * * NNI supports a rebate model for the 340B Program, and the direction toward transparency, compliance, and integrity to which it points. We are committed to the successful launch and administration of such a model, and appreciate HRSAs efforts to advance it. Sincerely, Chris Pernie, Director, Government Affairs Novo Nordisk Inc. Enclosure: NNI Detailed Responses to HRSA Requests for Information Page 13 of 20 APPENDIX Detailed NNI Responses to HRSA Requests for Information 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. NNI is committed to timely payment of 340B rebates under a potential 340B Rebate Model Pilot Program (Pilot Program). To accurately validate whether a request is eligible for a 340B rebate, it is necessary that the covered entity submit sufficient claims level data to permit NNI to determine whether the request satisfies applicable threshold requirements. For the Pilot Program to serve its dual purpose of facilitating MFP / 340B deduplication and generating meaningful evidence for evaluating the merits of a 340B rebate model, it is critical that manufacturers be permitted to deny requests where claims level data submitted by a covered entity are deficient or demonstrate that the request does not meet the applicable threshold requirements for purchasing at the 340B price. Section 1193(d) of the Social Security Act indisputably prevents duplicate MFP and 340B discounts on the same claim. Manufacturers also have no legal obligation under the 340B drug pricing program to make the 340B price available more than once on a single unit of product. Given these considerations, NNI should be permitted to reasonably deny requests to prevent MFP / 340B duplicates and to avoid paying duplicative discounts on the same unit. At a minimum, the following categories of improper requests also should be subject to denial by NNI: Claims for units that are ineligible under the Pilot Program, such as products not included in the Pilot Program, products with a date of dispense occurring prior to commencement of the Pilot Program (with the exception of a limited number of unreplenished 340B claims dispensed prior to commencement), and products that are submitted following any claims submission deadline that may be imposed by HRSA under the Pilot Program. Claims for products for which the covered entity is not entitled to 340B pricing, including claims for designated orphan drugs subject to the orphan drug exclusion to which NNI does not voluntarily offer 340B pricing. Claims for dispenses or administrations by an entity or location not registered with HRSA or ineligible under NNIs 340B distribution and integrity policy. Claims for which the payer is Medicaid, and the states policy dictates that a 340B drug may not be dispensed through a particular pharmacy type. Claims with dispensed or administered units that exceed a certain threshold for reasonable volume. Manufacturers should be permitted to apply an aberrant quantity validation threshold to deny claims in instances that a user inadvertently keys in an incorrect unit value or uses an incorrect unit conversion rate. If not denied, these instances could result in an excessive rebate payment incongruent to the volume of drug actually dispensed or administered. Page 14 of 20 Claims for which the product NDC was discontinued more than a year prior to the date of dispense or administration. As noted above, without appropriate claims level data NNI is not able to determine whether a request falls within an ineligible claim category. Accordingly, failure of a covered entity to submit complete, valid, and consistent claims level data in support of a request should be considered an acceptable ground for denial. Specifically, a request to purchase at 340B pricing should be subject to denial when the associated claims level data exhibits any one of the following types of deficiencies: Invalid data: The data submitted for a given field do not match the data format expected for that field (e.g., an NDC is present within a date field). Invalid data values: The prescriber or pharmacy NPI does not align with the accepted structure for an NPI; the prescriber NPI is not an active, individual healthcare provider; or the pharmacy NPI is not an active, organizational healthcare provider. Missing data: One or more data fields required by HRSA under the Pilot Program is not populated. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. NNI recognizes that the process for verifying eligibility for 340B pricing must be fully transparent, empowering covered entities to validate their own claims before submission, thereby minimizing the need for denials. A Pilot Program rebate processing platform should enable covered entities to resubmit to address deficient claims level data, allaying the risk that valid rebate claims may be unnecessarily denied or delayed. An eligibility verification process should incorporate the following features: When a denial occurs, the rebate processing platform should communicate to the user the specific reason for the denial. Validations should be performed in an automated fashion, and covered entities should be notified expeditiously of denials. Covered entities should be able to correct any incomplete or inaccurate claims level data and resubmit the request. The resubmission of the request will not be rejected as a duplicate submission. HRSA should consider a reasonable timeframe for a claims resolution process, acknowledging that the status of a claim should not be left open indefinitely. The rebate processing platform should offer robust support services to help covered entity users understand denial codes and resubmit as needed. A manufacturers rebate eligibility verification process should be structured to conform with any design specifications that HRSA may impose under the Pilot Program, which should minimize the need for HRSA intervention regarding denied claims. The availability of claims level data under the contemplated Pilot Program would enable manufacturers to accurately validate claims level data with automated precision. The protections coupled with the objective, binary nature of eligibility criteria, would minimize the likelihood of unnecessary denials. However, in the interest of facilitating timely resolution of any infrequent disputes that may arise, manufacturers rebate processing platforms should include functionalities that permit covered entities to submit inquiries and disputes. Page 15 of 20 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Claims level data collected for 340B purchases under NNIs 340B distribution and integrity policy are used to identify and, where possible, to either dispute payment of Medicaid rebates on units purchased at the 340B price or recover 340B discounts extended to covered entities on units for which a Medicaid rebate was subsequently paid. This process for reconciling 340B and Medicaid duplicates is inconsistent between states, resource intensive for NNI, and does not always result in the definitive resolution of duplicate discounts. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. NNI has not made any changes since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to an MFP. In the absence of an operational rebate model, however, NNI has taken reasonable steps to identify MFP refund claims for drugs that, based on the limited data currently available, appear to have been dispensed to 340B eligible patients. Absent a rebate model, NNI is not aware of any existing alternative mechanism that would allow it to readily identify and deduplicate units of product subject to both a 340B discount and MFP refund. Dispensing entities that disagree with NNIs assessment of the 340B status of an MFP refund claim may initiate a good faith inquiry through the Beacon platform. Claims that are properly certified by a covered entity as non-340B are issued an MFP refund. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. The process used by NNI since January 1, 2026, to identify and deduplicate units of product subject to both a 340B discount and MFP refund is less effective, slower, and involves more steps for all stakeholders than a rebate model requiring submission of claims level data for 340B-eligible drug dispenses / administrations. Implementation of the Pilot Program will streamline the MFP deduplication process and reduce the administrative burden on manufacturers, pharmacies, covered entities, and CMS. Given that NNI lacks comprehensive claims level data for drugs purchased at the 340B price, it is unable to identify a significant proportion of 340B and MFP duplicates. Due to this under-identification of duplicates, it is highly likely that since January 1, 2026, NNI has paid a substantial volume of duplicative MFP refund claims that were improperly assessed in contravention of Section 1193(d) of the Social Security Act. Consequently, dispensing entities have received a substantial windfall from statutorily-prohibited duplicative MFP refunds that they had no right to collect from NNI. As noted in this comment letter, CMS declined to assume responsibility under the MDPNP for nonduplication between the 340B price and the MFP but provided a pathway for pharmacies to voluntarily and proactively indicate on a submitted claim that the drug was purchased at the 340B price. 55 The Beacon 55 IPAY 2028 Final Guidance 40.4.5. Page 16 of 20 platform also offers a supplemental process through which pharmacies can self-identify 340B claims. An April 2026 analysis by Berkeley Research Group found that pharmacies have eschewed self- identification56 for all but a nominal percentage of 340B claims, casting serious doubt on the efficacy of voluntary self-identification as a deduplication mechanism going forward. Specifically, from January 1, 2026, through March 15, 2026, fewer than 0.5 percent of MFP claims have been self-identified as 340B by the pharmacy through either of the foregoing pathways.57 By contrast, evaluation of Medicare Part D Prescription Drug Event data suggests that between 10 and 12 percent of claims for 2026 selected drugs are subject to 340B pricing.58 Based on these data points, fewer than 5 percent of 340B claims for selected drugs are self-identified as such by pharmacies.59 d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). The most significant obstacle to identifying potential duplicates under the 340B Program and CMS payment programs is the lack of a universal authoritative source for verifying the 340B status of a claim. Manufacturers generally do not receive claims level data as part of the 340B purchase process. When this data is provided by covered entities, for instance, in conformance with the data submission requirements of NNIs 340B distribution and integrity policy, it may be incomplete, inaccurate, or outdated. Notably, data elements may be altered as the data are processed by different entities in the supply chain. For example, a 340B claim reported by a covered entity may list a date of service that is 1-3 days prior to the date of service in the claim level data provided by the payer. These data inconsistency issues complicate efforts by NNI to link purchase data for a 340B-priced unit with subsequently generated dispensing or rebate data for that same unit. NNIs efforts to deduplicate discounts under 340B and CMS payment programs are also undermined by the periodic alteration of 340B claims status by covered entities, which can change the status of an existing claim from non-340B to 340B, or vice versa, at any time following the date of dispense. Even when a 340B duplicate can be definitively identified, it is often burdensome for NNI to coordinate with states or payers to withhold or claw back ineligible rebates. Within Medicaid, for example, states often refer NNI to the covered entity to arrange for repayment of 340B discounts previously extended to the covered entity, rather than refunding duplicative Medicaid rebates to NNI. This process for reconciling 340B and Medicaid duplicates is inconsistent between states, resource intensive for NNI, and does not always result in the definitive resolution of duplicate discounts e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Based on its assessment of claims level data collected from CEs under its 340B distribution and integrity policy since January 1, 2023, NNI has determined that the data elements incorporated into the HRSA 340B rebate model pilot program that was paused prior to January 1, 2026, represent the minimum data elements 56 See BRG, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027 (Apr. 2026) at 2, https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in- 2026-and-Outlook-to-2027.pdf. 57 Id. 58 Id. 59 Id. Page 17 of 20 necessary to identify potential duplicates. These data elements include: The following claim level data elements for pharmacy claim submissions: a. Date of Service b. Date Prescribed c. Rx number (original/unencrypted/native/unmodified) d. Fill Number e. 11 Digit National Drug Code (NDC-11) f. Quantity Dispensed g. Prescriber ID h. Service Provider ID i. 340B ID j. Rx Bank Identification Number (Rx BIN) k. Rx Processor Control Number (Rx PCN) l. Group Number ID (optional) The following claim level data elements for medical claim submissions: a. Date of Service b. Claim Line Number c. Claim Number d. Unit of Measure e. NDC-11 f. Quantity g. Rendering Physician ID h. Service Provider ID i. 340B ID j. Health Plan Name k. Health Plan ID l. HCPCS Code (optional) m. HCPCS Modifiers (Up to 4) (optional) For the reasons discussed above in NNIs response to Section 5.d. of HRSAs RFI, the availability of covered entity purchase data is also critical for linking a 340B-priced unit with subsequently generated rebate and payer data for that same unit in order to accurately identify a duplicate discount. Respective to the Pilot Program, the purchase price and the date of purchase inform the basis price from which to calculate an accurate 340B rebate amount. Appropriate claims level purchase data documenting such price should therefore be submitted by covered entities to NNI to ensure it meets its obligation to offer the 340B price. Absent such purchase data, NNI cannot definitively confirm that a unit for which a 340B rebate is requested was purchased at WAC, and could therefore unintentionally extend a rebate that exceeds the statutorily required amount (for example, if the covered entity purchased the drug at a price below WAC, e.g., a GPO price, and submitted a 340B request). To permit NNI to validate that units for which rebates are requested under the Pilot Program were purchased at WAC and to enable NNI to accurately identify duplicate discounts under the 340B Program and CMS payment programs, covered entities should be required to submit the following purchase data, in addition Page 18 of 20 to the pharmacy and medical claim data elements set forth above: a. Wholesaler Name b. Wholesaler Account Number c. NDC-11 d. Invoice Date e. Quantity f. Invoice Number g. Ship-To Pharmacy (NPI) h. 340B ID Though MFP only applies to pharmacy claims in 2026 and 2027, it is vital that covered entities be required under the Pilot Program to submit claims level data for pharmacy and medical claims, regardless of payer. If the Pilot Program does not encompass medical claims or is limited to select payer utilization (e.g., only Medicare claims), covered entities would have contemporaneous access to 340B pricing through upfront discounts and through retrospective rebates via the Pilot Program. This dual 340B procurement process would enable covered entities to purchase a product upfront at the 340B price and then dispense that same unit to patients that fall within the scope of the Pilot Program. This, in turn, would expose the 340B Program and the MDPNP to the following egregious program integrity threats: (1) a covered entity that already received 340B pricing on a unit through an upfront discount could opt not to submit a rebate request under the Pilot Program, thereby depriving the manufacturer of the claims level data to deduplicate MFP refunds, or (2) the covered entity could submit a duplicative rebate request under the Pilot Program for a unit already purchased at the 340B price through an upfront discount, leaving the manufacturer with no mechanism to readily identify or deny the duplicate 340B rebate. Establishing a dual 340B data procurement process would defeat the Pilot Programs contemplated purpose of facilitating the accurate, comprehensive deduplication of units subject to MFP and a 340B discount and would introduce significant new integrity threats to the 340B Program. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? HRSA states in its Proposed Information Collection Request (ICR) issued on February 26, 2026, that, in a potential Pilot Program: manufacturers will be required to submit data to the 340B Prime Vendor monthly to evaluate program integrity and to provide greater transparency in the 340B Program. Monthly data submissions will enhance 340B Program compliance monitoring and reduce lag time in assessing 340B Program metrics. The monthly data will also support the ongoing assessment of any 340B Rebate.60 NNI agrees that monthly submission of an extract of processed rebates and a set of data aggregations consistent with the scope contemplated under HRSAs 340B rebate model pilot program paused prior to 60 HRSA, Proposed Information Collection Request, 340B Rebate Mode Pilot Program, 91 Fed. Reg. 9632, 9632-33 (Feb. 26, 2026). Page 19 of 20 January 1, 2026, will ensure transparency, reduce lag time in assessing 340B Program metrics, and provide HRSA with the necessary data to evaluate 340B Program integrity. The data extract should include the following fields: Claim Submission Date 340B ID NDC-11 Purchased Quantity Unit WAC Price Unit 340B Ceiling Price Unit MFP Price Rebate Amount Rebate Date Paid Rejection Reason (if applicable) The data aggregations should include the following: Aggregated sales by covered entity type as defined in Section 340B(a)(4) of the Public Health Service Act Average days from claim submission to rebate payment for all rebates paid Number of rebates paid within the Pilot Program rebate payment deadline (out of the total rebate claims, so that an average can be calculated) Number of rebates denied with denial reasons (out of the total number of rebates denied, so an average can be calculated) Number of selected drug claims determined to be eligible for MFP instead of 340B price due to Pilot Program implementation It should be noted that the 340B Prime Vendor, Apexus, is currently the subject of a congressional investigation into its business practices related to the 340B Program and potentially misaligned incentives.61 In general, and particularly while this investigation is ongoing, Apexus should not be responsible for the collection and evaluation of sensitive data related to the Pilot Program. b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should consider publicly disclosing information contained in the monthly data aggregations reported by manufacturers in the interest of transparency and to apprise the public and 340B Program stakeholders of the advantages associated with a rebate model. However, any manufacturer data that is disclosed publicly should be aggregated and anonymized across manufacturers to prevent the inadvertent reporting of sensitive sales data relating to individual manufacturers. HRSA should maintain as confidential any commercial or financial information provided by manufacturers that is confidential or proprietary information, including but not limited to confidential pricing information or data that could be used to calculate confidential prices. Such information is exempt from disclosure pursuant to the Freedom of Information Act, Exemption 4, which protects trade secrets and commercial or 61 HELP Committee, Chair Cassidy Continues Investigation into 340B Drug Program, Seeks Information from 340B Prime Vendor (Feb. 2, 2026), available at: https://www.help.senate.gov/rep/newsroom/press/chair-cassidy-continues- investigation-into-340b-drug-program-seeks-information-from-340b-prime-vendor-1. Page 20 of 20 financial information obtained from a person that is privileged or confidential.62 If HRSA opts to publicly disclose data, it should refrain from releasing data collected during the first quarter following the implementation date of the Pilot Program. Such initial quarter data is likely to include outliers and anomalies arising from stakeholders unfamiliarity with the new reporting regime, which could skew the data and result in misleading interpretations. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Monthly reporting of the manufacturer data described above in NNIs response to Section 6.a. of HRSAs RFI for the duration of the Pilot Program will support the assessment of the Pilot Program. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot NNI refers HRSA to its comment letter for detailed discussion of this matter. 62 5 U.S.C. 552(b)(4)). Certain 340B pricing information and data that could be used to calculate such prices is protected from disclosure pursuant to the PPA, which states that [i]nformation disclosed by the Manufacturer in connection with the [PPA], except as otherwise required by law, will not be disclosed by the Secretary or his designee in a form which reveals the Manufacturer, except as necessary to carry out section 340B or permit review by the Comptroller General. See Pharmaceutical Pricing Agreement, available at https://www.hrsa.gov/sites/default/files/hrsa/opa/manufacturer-ppa.pdf.
HRSA-2026-0001-1759California Children's Hospital Association2026-04-17T04:00Z11,427 chars
See attached file(s) 1215 K STREET, SUITE 2005 SACRAMENTO, CA 95814 916.552.7111 www.ccha.org April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 SUBJECT: REQUEST FOR INFORMATION: 340B REBATE MODEL PILOT PROGRAM, HHS DOCKET NO. HRSA-2026-03042 Dear Administrator Engels: On behalf of the California Childrens Hospital Association (CCHA), representing Californias eight not-for-profit, freestanding childrens hospitals, we appreciate the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B rebate model pilot program. CCHA strongly opposes the adoption of a rebate model under the 340B Drug Pricing Program. For more than three decades, the program has enabled Californias childrens hospitals to stretch scarce resources, sustain access to specialized services, and provide lifesaving care to medically complex and low-income pediatric patients. A shift from upfront discounts to a rebate-based model would fundamentally alter how covered entities access and rely on these critical savings, introducing new financial and operational risks that threaten the programs ability to fulfill its statutory purpose. While we share the broader concerns raised by hospitals and health systems nationwide regarding administrative complexity and financial strain, Californias childrens hospitals face unique and heightened risks under a rebate model. Our members serve disproportionately high shares of Medicaid patients and are often the only providers in the state equipped to deliver the most complex pediatric therapies. As a result, policies that delay or destabilize access to 340B savings do not simply create administrative challengesthey directly constrain the capacity of these hospitals to deliver timely, lifesaving care. Importantly, a rebate model would not reduce federal or state spending, improve patient affordability, or expand access to care. Instead, it would shift costs and administrative complexity onto safety-net providers that rely on 340B savings to sustain services, without producing corresponding benefits for patients or public programs. We are concerned that this approach would weaken, rather than strengthen, the programs ability to support vulnerable populations. For these reasons, CCHA urges HRSA not to proceed with the implementation of a 340B rebate model. Childrens Hospitals Serve as the Backbone of Pediatric Specialty Care for Californias Most Vulnerable Patients. CCHA Comments 340B Rebate Model RFI Page 2 CCHAs member hospitals serve as the backbone of Californias pediatric specialty care system, providing highly specialized services for children with the most complex and life-threatening conditions. These hospitals are often the only providers in the state equipped to deliver advanced therapies and manage rare pediatric diseases, including cancer, genetic disorders, and other conditions requiring intensive, multidisciplinary care. Our members also care for a disproportionately high share of Medicaid patients, with an average of approximately 65 percent of patients covered by Medi-Cal and some hospitals approaching 75 percent. This payer mix reflects the essential role Californias childrens hospitals play in serving low-income and medically vulnerable populations, many of whom qualify for Medicaid due to disability or the intensity of their medical needs. In many cases, these conditions require a parent or caregiver to reduce or leave employment to provide necessary care, lowering the familys income. At the same time, it creates significant and persistent financial challenges due to chronic underpayment in Medicaid. The 340B program plays a critical role in helping these hospitals offset structural funding gaps. Savings generated through the program are reinvested directly into patient care, supporting access to specialty services, expanding care capacity, and ensuring that hospitals can continue to serve as regional referral centers for the most complex pediatric cases. Importantly, the financial risk associated with high-cost pediatric care is often concentrated among a small number of childrens hospitals. For many of the most advanced therapies particularly gene and cell therapiesonly a limited number of hospitals are authorized and equipped to administer treatment. As a result, policies that increase financial uncertainty or delay access to 340B savings do not distribute risk broadly across the health care system. Instead, they place a disproportionate burden on a small number of safety-net providers that are essential to maintaining access to care for children with the most serious medical needs. A Rebate Model Would Disrupt Access to 340B Savings and Introduce Significant Financial and Operational Risk. A rebate-based approach would fundamentally change how covered entities access 340B savings by requiring hospitals to purchase drugs at higher upfront prices and wait for retrospective reimbursement. For Californias childrens hospitals, which already operate under significant financial constraints, this shift would disrupt cash flow and require them to carry substantial costs for extended periods while awaiting savings to which they are statutorily entitled. At the same time, a rebate model would introduce new administrative complexity by requiring hospitals to track, submit, and reconcile claims across multiple manufacturers and systems. While the precise operational details may vary, the overall effect is clear: hospitals would be required to invest additional resources to manage a more complicated and less predictable process for realizing 340B savings. These changes do not improve the functioning of the 340B program. Instead, they shift costs and administrative complexity onto safety-net providers that rely on 340B savings to sustain care, without producing corresponding benefits for patients or public programs. As a result, a rebate model would weaken the programs effectiveness while increasing the financial and operational strain on the providers it is intended to support. CCHA Comments 340B Rebate Model RFI Page 3 These challenges are further compounded for Californias childrens hospitals, which serve a high volume of Medicaid patients and already face significant financial strain due to low reimbursement levels and delayed payment timelines. A Rebate Model Would Constrain Access to High-Cost, Lifesaving Pediatric Therapies. Childrens hospitals play a uniquely critical role in delivering advanced therapies for rare and life- threatening pediatric conditions, including gene and cell therapies that are often curative or life- extending. These treatments are among the most complex and resource-intensive in medicine, and only a limited number of hospitals are authorized and equipped to provide them. Because of their high cost and clinical complexity, access to gene and cell therapies is already constrained by the financial and operational capacity of the hospitals that administer them. Californias childrens hospitals must often absorb significant upfront costs and navigate reimbursement uncertainty in order to make these treatments available to patients. As a result, the ability to deliver care is closely tied to a hospitals capacity to manage financial risk. A rebate model would exacerbate these challenges by requiring hospitals to carry even greater upfront costs for extended periods of time while awaiting reimbursement. For therapies with exceptionally high acquisition costs, this added financial exposure would further limit the number of patients a hospital can treat at any given time and reduce overall system capacity to deliver care (for example, curative gene therapies for conditions such as spinal muscular atrophy or sickle cell disease can cost more than $23 million per treatment). Importantly, because these therapies are concentrated among a small number of specialized providers, the impact of a rebate model would not be broadly distributed across the health care system. Instead, it would fall disproportionately on the few childrens hospitals in the state that serve as the primary access points for these treatments, increasing financial risk and constraining access for patients who depend on timely care. A Rebate Model Is Not Necessary to Promote Program Integrity and Would Introduce New Risks Without Clear Benefit We recognize that HRSA and drug manufacturers have raised concerns related to program integrity, including the need to prevent duplicate discounts and ensure appropriate use of the 340B program. These are important objectives, and Californias childrens hospitals are committed to maintaining full compliance with program requirements. However, existing safeguards already address these concerns. Covered entities operate within a well-established framework of compliance obligations, oversight, and coordination with payers to prevent duplicate discounts and ensure program integrity. Introducing a rebate model would not meaningfully strengthen these protections. Instead, it would layer additional complexity onto a system that is already subject to extensive compliance and oversight requirements. Moreover, a rebate-based approach is not required to achieve HRSAs stated goals. To the extent additional tools or refinements are needed to support program integrity or align with other federal CCHA Comments 340B Rebate Model RFI Page 4 initiatives, there are more targeted and less disruptive approaches availablemany of which are already in use todaythat would not impose unnecessary financial risk. At a time when policymakers are focused on improving affordability and access to care, it is difficult to justify a policy change that would make it more difficult for covered entities to access the discounts they are entitled to under the 340B statute. A rebate model would shift resources away from safety-net providers without producing corresponding benefits for patients or public programs. Conclusion For the reasons outlined above, CCHA urges HRSA not to proceed with the implementation of a 340B rebate model. Such a shift would introduce significant financial and operational risk for Californias childrens hospitals, constrain access to lifesaving therapies, and weaken the programs ability to support the patients and communities it is intended to serve. At a time when policymakers are focused on improving affordability and access to care, a rebate model would move in the opposite directionshifting resources away from safety-net providers without producing corresponding benefits for patients or public programs. We appreciate HRSAs consideration of stakeholder input and encourage the agency to pursue more targeted approaches that preserve the effectiveness of the 340B program while protecting access to care for children with the most serious medical conditions. If you have any questions or would like additional information, please contact me at (916) 203- 0488 or mmorton@ccha.org. Sincerely, Mira Morton Vice President of Government Affairs mmorton@ccha.org
HRSA-2026-0001-1760Lupus Foundation of America2026-04-18T04:00Z5,617 chars
See attached file(s) VIA ELECTRONIC DELIVERY April 19, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Subject: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton, On behalf of the Lupus Foundation of America, thank you for the opportunity to comment on HRSA's Request for Information for its potential 340B Rebate Model Pilot Program. As an organization working to improve the lives of those living with lupus, we support efforts to improve affordability and ensure people with lupus have equitable access to health care. Thus, we strongly support efforts to renew a rebate-based pilot program and bring transparency to the 340B drug discount program. ABOUT LFA AND LUPUS The LFA is the largest publicly supported lupus organization devoted to solving the mystery of lupus while giving caring support to those who live with this unpredictable and devastating disease. Through a comprehensive program of research, education, and advocacy, we lead the fight to improve the quality of life for all people affected by lupus. LFA has a strong commitment to advancing lupus research for both adult and pediatric populations and does this through a variety of methods, including funding research, building collaborative research partnerships, and advocating for increased federal research funding. Lupus is a chronic autoimmune disease that can impact many parts of the body including organs, joints, and skin. Symptoms are heterogeneous both across the overall population with the disease and across individual patients lifetimes. Common symptoms include extreme fatigue, joint and muscle pain, rashes, photosensitivity, organ inflammation, and, in many advanced stages of the disease, kidney damage or failure. At least 1.5 million Americans have lupus. The majority of people diagnosed with lupus are women with 80% of new diagnoses made during childbearing years,i although the disease also impacts men and children. Of particular note, lupus disproportionately impacts women of color, who are twice as likely to develop the disease as Caucasian women. COMMENTS While Congress created the 340B program to increase and improve care for vulnerable patients at safety-net hospitals, the program's current lack of transparency makes it difficult to determine whether it is truly fulfilling this purpose. The little data we do have, however, suggests that the program has strayed from Congress's original intentions. Research from our organization has found that some 340B hospitals receive more in 340B dollars from just two therapeutic areas -- lupus and rheumatoid arthritis-- than they spend on charity care. The same analysis reveals that patient cost-sharing exceeds the 340B price of an arthritis or lupus drug approximately 16% of the time in Medicare Part B and 6% of the time in Medicare Part D, raising the concern that entities are failing to pass 340B savings along to patients. And the average annual cost per patient for arthritis or lupus treatments at 340B hospitals is higher than the cost at non-340B hospitals for Medicare Part D beneficiaries. It is imperative that people with lupus, who often face high health costs due to medications, must benefit from the 340B program. Research shows that people with lupus can spend well over $8,000 on medications alone in just the first year after diagnosis and that amount is likely to increase as additional effective therapies become available. Sometimes, costs can be prohibitively high for patients. In fact, 22% of lupus patients do not take their medication as prescribed because of the cost -- a higher rate than the general population. People living with lupus need these medications to remain healthy -- pausing or skipping treatment can lead to increased flares, worse disease, and more hospitalizations. That's why it's so important that eligible patients have access to discounted medicines under 340B. We support any 340B reform effort that increases transparency, reduces patients' out-of- pocket costs, creates medical debt protections, and ensures that 340B-covered entities prioritize charity care programs. To that end, we support the HRSA's revised rebate pilot program -- and have suggestions for its design. First, we ask HRSA not to create any carveouts or exemptions for certain covered entities from the pilot. In order to generate meaningful results, it is critical that the pilot reflect the effects of a rebate model on the full range of 340B-covered entities. While HRSA should certainly provide support as needed to these covered entities, they should be included in the pilot program. We also recommend that HRSA create clear criteria and guidelines for the pilot program and regularly report results to the public. Data collection should aim to evaluate exactly how the 340B program impacts underserved and vulnerable patients -- across different geographic areas, coverage status, and sites of care. Finally, if the pilot proves successful, we urge HRSA to expand the rebate program to include all 340B-eligible drugs to ensure that the program benefits all patients. The Lupus Foundation of America applauds HRSA's effort to bring transparency to the 340B program and ensure that it is truly serving vulnerable populations -- including people living with lupus. Sincerely, Patrick Wildman Senior Vice President, Advocacy & Government Relations
HRSA-2026-0001-1761William Jones · Little Rock, AR, United States2026-04-18T04:00Z13,014 chars
Please see attached April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Vincent Infirmary, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Established in 1888, Saint Vincent Infirmary is part of CHI Saint Vincent. CHI St. Vincent Infirmary is a faith-based, not-for- profit organization with over 600 licensed beds serving the health care needs of Arkansans, including patients from all 75 counties. Saint Vincent Infirmary Services include Level 2 Trauma Center, Certified Stroke Center, Ambulatory Infusion Center, and Advanced Care Specialties in Orthopedics, Cardiovascular Care & Neurosciences, and Facility- Based Clinics offering Internal Medicine, Diabetes, Endocrinology, Wound Care and Cardiovascular Care Services. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Vincent Infirmary that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Saint Vincent Infirmary relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 The 340B program is crucial to the health of our community. Despite St. Vincent Infirmary's significant operating losses, it provides important programming in its community, including Medicaid enrollment assistance, a low- and moderate-income medical and dental clinic, vaccination clinics, and rehab student education. In addition to these services, the savings from the program help support an Outpatient Infusion Center, which provides comprehensive cancer care, chemotherapy and non-oncology infusion services. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, William G. Jones, M.D. President St Vincent Infirmary Interim Market President, Saint Vincent Health System Little Rock, AR As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Vincent Infirmary, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Established in 1888, Saint Vincent Infirmary is part of CHI Saint Vincent. CHI St. Vincent Infirmary is a faith-based, not-for- profit organization with over 600 licensed beds serving the health care needs of Arkansans, including patients from all 75 counties. Saint Vincent Infirmary Services include Level 2 Trauma Center, Certified Stroke Center, Ambulatory Infusion Center, and Advanced Care Specialties in Orthopedics, Cardiovascular Care & Neurosciences, and Facility-Based Clinics offering Internal Medicine, Diabetes, Endocrinology, Wound Care and Cardiovascular Care Services. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Vincent Infirmary that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Saint Vincent Infirmary relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340B program is crucial to the health of our community. Despite St. Vincent Infirmary's significant operating losses, it provides important programming in its community, including Medicaid enrollment assistance, a low- and moderate-income medical and dental clinic, vaccination clinics, and rehab student education. In addition to these services, the savings from the program help support an Outpatient Infusion Center, which provides comprehensive cancer care, chemotherapy and non-oncology infusion services. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, William G. Jones, M.D. President St Vincent Infirmary Interim Market President, Saint Vincent Health System Little Rock, AR
HRSA-2026-0001-1762Singing River Health System2026-04-18T04:00Z7,246 chars
See attached file(s) Singing River Health System Comments on Proposed 340B Rebate Model Health Resources and Services Administration (HRSA) Dear HRSA, I am submitting these comments in my role as the 340B Compliance Manager for Singing River Health System. With over 40 years of experience in pharmacy and more than half of that time dedicated to the 340B program, I oversee complex contract pharmacy operations, compliance auditing, and program integrity. In my role, I oversee a large, multi-faceted 340B program that includes contract pharmacy relationships and multiple third-party administrators (TPAs). My responsibilities include daily oversight of claim qualification, audit readiness, manufacturer compliance issues, and financial reconciliation across complex data environments. Transitioning the 340B program from an upfront discount model to a rebate-based model is not a minor operational adjustmentit would fundamentally disrupt the programs ability to function and directly harm the patients we serve. Operational Reality The 340B program depends on immediate, predictable savings at the point of purchase. These savings allow us to maintain pharmacy operations, fund patient assistance programs, support specialty therapies, and sustain compliance infrastructure. A rebate model replaces predictability with delay, uncertainty, and financial exposure. Cash Flow Impact A rebate model would require us to purchase medications at full price, front millions in drug costs, and wait for reimbursement that may be delayed or disputed. We are already managing real-world challenges related to manufacturer-specific limitations, data submissions, and limitations that directly impact our ability to effectively operate within the 340B program. A rebate model would amplify these issues by tying reimbursement to processes that are inherently variable and outside of the covered entitys control. For a county-owned safety-net system, this is not sustainable. When cash flow tightens, patient services are reducedthere is no alternative. Patient Impact We would be forced to reduce or eliminate: - Medication assistance programs - Chronic disease management services - Specialty drug access - Rural outreach programs These are core services, not optional programs. Administrative Burden From an operational standpoint, our current environment already requires continuous management of eligibility determinations, duplicate discount prevention, and reconciliation across multiple TPAs and contract pharmacies. Introducing a rebate model would require an entirely new layer of tracking at the claim level, including rebate eligibility validation, payment monitoring, and dispute resolution with manufacturers. Based on current experience with data discrepancies and manufacturer restrictions, it is reasonable to expect delays, inconsistencies, and denials in rebate payments. This would create ongoing financial uncertainty and significantly increase compliance risk, rather than reduce it. Conclusion A rebate model will reduce patient access, strain safety-net providers, and force cuts to critical services. From a compliance and operational perspective, this model introduces risk at every stepfinancial, administrative, and regulatory. It places safety-net providers in a position where they must absorb uncertainty while still being held to strict compliance standards. That is not a sustainable or equitable framework. I strongly urge HRSA to preserve the upfront discount model and reject a rebate-based framework. Respectfully, Caryle Peterson 340B Compliance Manager Singing River Health System Singing River Health System Comments on Proposed 340B Rebate Model Health Resources and Services Administration (HRSA) Dear HRSA, I am submitting these comments in my role as the 340B Compliance Manager for Singing River Health System. With over 40 years of experience in pharmacy and more than half of that time dedicated to the 340B program, I oversee complex contract pharmacy operations, compliance auditing, and program integrity. In my role, I oversee a large, multi-faceted 340B program that includes contract pharmacy relationships and multiple third-party administrators (TPAs). My responsibilities include daily oversight of claim qualification, audit readiness, manufacturer compliance issues, and financial reconciliation across complex data environments. Transitioning the 340B program from an upfront discount model to a rebate-based model is not a minor operational adjustmentit would fundamentally disrupt the programs ability to function and directly harm the patients we serve. Operational Reality The 340B program depends on immediate, predictable savings at the point of purchase. These savings allow us to maintain pharmacy operations, fund patient assistance programs, support specialty therapies, and sustain compliance infrastructure. A rebate model replaces predictability with delay, uncertainty, and financial exposure. Cash Flow Impact A rebate model would require us to purchase medications at full price, front millions in drug costs, and wait for reimbursement that may be delayed or disputed. We are already managing real-world challenges related to manufacturer-specific limitations, data submissions, and limitations that directly impact our ability to effectively operate within the 340B program. A rebate model would amplify these issues by tying reimbursement to processes that are inherently variable and outside of the covered entitys control. For a county-owned safety-net system, this is not sustainable. When cash flow tightens, patient services are reducedthere is no alternative. Patient Impact We would be forced to reduce or eliminate: - Medication assistance programs - Chronic disease management services - Specialty drug access - Rural outreach programs These are core services, not optional programs. Administrative Burden From an operational standpoint, our current environment already requires continuous management of eligibility determinations, duplicate discount prevention, and reconciliation across multiple TPAs and contract pharmacies. Introducing a rebate model would require an entirely new layer of tracking at the claim level, including rebate eligibility validation, payment monitoring, and dispute resolution with manufacturers. Based on current experience with data discrepancies and manufacturer restrictions, it is reasonable to expect delays, inconsistencies, and denials in rebate payments. This would create ongoing financial uncertainty and significantly increase compliance risk, rather than reduce it. Conclusion A rebate model will reduce patient access, strain safety-net providers, and force cuts to critical services. From a compliance and operational perspective, this model introduces risk at every stepfinancial, administrative, and regulatory. It places safety-net providers in a position where they must absorb uncertainty while still being held to strict compliance standards. That is not a sustainable or equitable framework. I strongly urge HRSA to preserve the upfront discount model and reject a rebate-based framework. Respectfully, Caryle Peterson 340B Compliance Manager Singing River Health System
HRSA-2026-0001-1763Katie Winters · Portland, OR, United States2026-04-18T04:00Z767 chars
I am writing to oppose moving forward with the proposed 340B Rebate Model Pilot Program, which would require health centers to pay full price for certain medications and receive discounts later as rebates. This change will: Increase upfront medication costs Disrupt access to medications for vulnerable patients Negatively impact care for patients with chronic conditions Our country's healthcare, food access, housing, transportation and parks and recreation systems, among others, all already disadvantage low income communities, putting them at higher risk of developing chronic conditions. Please do not advance this proposed 340B Rebate Model program, which would be a step-backward instead of forward for our communities and patients. Thank you.
HRSA-2026-0001-1764Hurtt Family Clinic2026-04-18T04:00Z5,518 chars
See attached file(s)on my comment on the Pilot Rebate 340B Model. We are a community health care center (CHC) in Orange County CA that help the underserved in our county. This proposed pilot program would be a detriment to our vulnerable population. We are urging you : Exclude CHCs from this rebate model. Thank you for allowing us more time for our comments April 18, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: We are a Federally Qualified Healthcare Center (FQHC) with 4 clinics. We use the 340B medications for our 9% uninsured patients in Orange County, CA. Our sister company is the Orange County Rescue Mission (OCRM) which provides housing to 262 homeless men, women and children. One of our clinics Village of Hope sits on same property as OCRM and provides care to the residents who were once homeless. We serve 8351 patients. I am the Primary Contact pharmacist (0.5 FTE) that provides pharmaceutical care to our 4 (four) clinics. I have a (0.8 FTE) LVN that assist with the 340B Program. We do not have a pharmacy. We have a permit from the CA State Board of Pharmacy so 340B medications can be dispensed out of the clinic to our 9% uninsured patients. For 2025, our Sliding Fee Discounts provided to our population were approximately $560,000. Dispensing medication from the clinic is very helpful and convenient since most of the uninsured have transportation issues. Being able to hand medications to our patients at their appointment is good for compliance. The proposed rebate model would be detrimental to our organization mainly due to financial reasons. We would have to purchase the drug at full price. For example, we dispense FarxigaTM to our uninsured diabetic patients. It would cost us for 1 (one) person $2682 for a 3-month supply vs. $0.96. Our inventory cost would increase astronomically. We would not be able to store inventory that we keep now due to cost. We would have to order drug more frequently, spend more time with submission of claims and tracking to get money back. It is not guaranteed we will be reimbursed. This proposed rebate model will hurt us financially due to increase administrative time and drug costs. Our uninsured patients will suffer. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Respectfully, Mercedes F. Wagner, PharmD, APh Pharmacist O:(714) 247-0300 EXT 1093 D:(657) 224-1093 E:mercedes.wagner@hurttclinic.org Village of Hope Clinic | 1 Hope Drive, Tustin, CA 92782 Santa Ana Clinic | 1100-B N. Tustin Ave, Suite A, Santa Ana, CA 92705 Anaheim Clinic | 947 S. Anaheim Blvd., Suite 260, Anaheim, CA 92805 Tustin 2 Clinic |14642 Newport Ave., Suite 200, Tustin, CA 92780 April 18, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: We are a Federally Qualified Healthcare Center (FQHC) with 4 clinics. We use the 340B medications for our 9% uninsured patients in Orange County, CA. Our sister company is the Orange County Rescue Mission (OCRM) which provides housing to 262 homeless men, women and children. One of our clinics Village of Hope sits on same property as OCRM and provides care to the residents who were once homeless. We serve 8351 patients. I am the Primary Contact pharmacist (0.5 FTE) that provides pharmaceutical care to our 4 (four) clinics. I have a (0.8 FTE) LVN that assist with the 340B Program. We do not have a pharmacy. We have a permit from the CA State Board of Pharmacy so 340B medications can be dispensed out of the clinic to our 9% uninsured patients. For 2025, our Sliding Fee Discounts provided to our population were approximately $560,000. Dispensing medication from the clinic is very helpful and convenient since most of the uninsured have transportation issues. Being able to hand medications to our patients at their appointment is good for compliance. The proposed rebate model would be detrimental to our organization mainly due to financial reasons. We would have to purchase the drug at full price. For example, we dispense FarxigaTM to our uninsured diabetic patients. It would cost us for 1 (one) person $2682 for a 3-month supply vs. $0.96. Our inventory cost would increase astronomically. We would not be able to store inventory that we keep now due to cost. We would have to order drug more frequently, spend more time with submission of claims and tracking to get money back. It is not guaranteed we will be reimbursed. This proposed rebate model will hurt us financially due to increase administrative time and drug costs. Our uninsured patients will suffer. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Respectfully, Village of Hope Clinic | 1 Hope Drive, Tustin, CA 92782 Santa Ana Clinic | 1100-B N. Tustin Ave, Suite A, Santa Ana, CA 92705 Anaheim Clinic | 947 S. Anaheim Blvd., Suite 260, Anaheim, CA 92805 Tustin 2 Clinic |14642 Newport Ave., Suite 200, Tustin, CA 92780
HRSA-2026-0001-1765Fenway Health2026-04-18T04:00Z48,057 chars
Please see Fenway Health's comment attached. Thank you. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Fenway Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Fenway Health anticipates an increase of $12.2m annually in increased drug costs if forced to pay the wholesale acquisition cost instead of the 340B discount rate. We also anticipate a loss of $610,000 due to rejected rebate claims. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Fenway Health is a Federally Qualified Health Center (FQHC) located in Boston, Massachusetts, providing comprehensive primary care, behavioral health, HIV/AIDS services, and specialty care to 33,000 patients. Our patient population includes people living with HIV (PLWH), low-income and uninsured or underinsured individuals, and patients of color who face compounding social determinants of health. A significant portion of our patients are served through the Ryan White HIV/AIDS Program, which underscores both the clinical complexity and financial vulnerability of this population. Many patients present with multiple chronic conditions requiring sustained, complex pharmacotherapy including antiretroviral therapy, medications for mental health conditions, and regimens for co- occurring conditions such as hepatitis C, substance use disorder, and diabetes. Financially, a substantial proportion of our patients are at or below 200% of the federal poverty level and rely on our sliding fee scale. Uninsured and Medicaid-enrolled patients represent a disproportionate share of our patient panel. Many patients also face intersecting social barriers unstable housing, food insecurity, unemployment, immigration status concerns, and prior trauma within healthcare systems that increase the risk of medication non-adherence and treatment discontinuation when any friction is introduced into the access pathway. Fenway Health often functions as a sole trusted provider for many. Discontinuity of care including disruption to medication access carries outsized clinical and psychological risk for this population. Any model that undermines the financial structure supporting that care continuity directly threatens health outcomes for one of the most marginalized patient groups in the country. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Fenway Health in particular, this means it will impact: The 33,000 patients we serve. The $7.8 million we pay annually to administer our 340B program. Seven percent of Fenway Healths patients are uninsured altogether, and 36% are at or below 200% of the federal poverty level (FPL), which makes them eligible for our sliding fee discount program. Care for these approximately 11,000 patients is made possible by 340B generated revenues. Patient services currently funded in whole or in part through 340B net savings at Fenway Health include: 1. HIV case management services beyond Ryan White Program funding caps, including case managers who coordinate medical, behavioral, and social care for PLWH. 2. Medication adherence counseling, including pharmacist and pharmacy technician time dedicated to adherence support for ARV regimens and other complex pharmacotherapy. 3. Patient navigation for patients, including assistance with insurance coverage, prior authorizations, and referral coordination. 4. Sliding fee scale subsidies enabling uninsured and underinsured patients to access medications at reduced or no cost. 5. Behavioral health integration services, including co-located mental health support for patients managing chronic illness or navigating identity-related stressors. 6. Transportation assistance for patients who require support accessing in-person appointments or picking up medications. 7. Housing stability referrals and social services coordination embedded within clinical care teams. 8. Community health worker positions that provide culturally competent outreach and care coordination for patients, PLWH, and patients with limited English proficiency. 9. Patient financial assistance programming, including coordination with pharmaceutical manufacturer PAP programs and navigating co-pay support for patients on high-cost specialty medications. 10. Clinical pharmacy capacity supporting specialty medication management. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Seven percent of Fenway Healths patients are uninsured altogether, and 36% are at or below 200% of the federal poverty level (FPL), which makes them eligible for our sliding fee discount program. Care for these 11,000 patients is made possible by 340B generated revenues. in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Fenway Health anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Fenway Health anticipates an increase of $225,000 to costs for external support vendors in the first year, and then $165,000 in additional costs in subsequent years. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate we will have to hire 1.5 FTE to meet this demand. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate this will cost $150,000 additional per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Many additional hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Fenway Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For Fenway Health, which serves 33,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend many additional hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Fenway Health currently partners with more than 100 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across more than 100 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Fenway neighborhood of Boston and surrounding communities with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $12.2 million to purchase these 10 drugs under the proposed rebate model. This would represent a monthly cash exposure of $1 million for our organization. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Fenway Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. The introduction of a rebate model would disrupt the timing and predictability of 340B savings, which Fenway Health relies on to sustain operations that are not fully covered by Medicaid reimbursement, grants, or other revenue streams. Under a rebate structure, we would face extended periods of cash outflow before receiving rebate recovery, creating acute liquidity pressure that would require difficult programmatic trade-offs. The services most immediately at risk would be those that are grant- dependent or operationally discretionary from a payer standpoint but clinically essential. It is likely that the first to be reduced or eliminated would be sliding fee scale subsidies for uninsured patients, medication adherence and patient navigation services, HIV case management positions funded outside of Ryan White caps, support services including navigation and care coordination, and wraparound services such as housing assistance referrals 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip . and transportation support. At secondary risk of discontinuation would be behavioral health integration capacity (particularly for patients who present at the intersection of HIV, gender dysphoria, and serious mental illness), patient financial assistance programming, and community health worker positions embedded in clinical teams. These reductions would not simply create inconvenience they would rupture care continuity for patients with no alternative access points. For a patient on antiretroviral therapy who also relies on Fenway for housing navigation and mental health support, losing any one of those services increases the probability of viral rebound, hospitalization, and downstream system cost that far exceeds whatever administrative efficiency the rebate model is designed to generate. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our roughly 2,100 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Fenway Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Fenway Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $12.2 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Fenway Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1 million. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to borrow money at interest. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Fenway Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that 34 million health center patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Fenway Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $610,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Fenway Health strongly urges HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Fenway Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Fenway Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dallas Ducar at dducar@fenwayhealth.org. Sincerely, Jordina Shanks CEO Fenway Health
HRSA-2026-0001-1766North Jersey Community Research Initiative (NJCRI)2026-04-18T04:00Z23,168 chars
North Jersey Community Research Initiative (NJCRI) RFI Submission HRSA-2026-03042 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org April 18, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Director Britton: North Jersey Community Research Initiative (NJCRI) respectfully requests that the Health Resources and Services Administration (HRSA) reconsider the proposal to transition the 340B program to a rebate model. The potential impacts could be detrimental, and the Newark, New Jersey community, as well as the entire state, would be negatively affected by this change. NJCRI was founded in 1988, and it is one of New Jerseys longest-standing community-based health organizations. Each year, NJCRI provides confidential primary care, behavioral health support, chronic illness education, and community services to more than 20,000 individuals residing in urban and rural areas throughout New Jersey. Through its vital and unique 340B program, the organization has numerous programs designed to promote equitable access to healthcare, reduce health disparities, and strengthen the overall community wellbeing. REAL IMPACT: WHY THIS MATTERS If the 340B program is transitioned to a rebate model, NJCRI will take on a significant administrative burden while simultaneously dealing with an increase in labor and operational costs. Centralizing, submitting, tracking, and monitoring data to secure rebates on a timely basis will undoubtedly take time and resources away from patient care. According to table 1 below, a 340B rebate model could increase NJCRIs administrative burden by 72 to 106 weekly hours. A 340B rebate model allows manufacturers to use access to Covered Entities (CEs) claims data to deny 340B discounts and further delay the savings owed to the organization. This model puts future rebates at risk, and NJCRI, much like most other non- profit organizations, does not have the cash flow to take risks with monthly expenditures. Drug manufacturers have not released safeguards to protect patient data, and that creates serious concerns that this model could be inappropriately expanded or that Covered Entities data will be used for improper 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org purposes. The integrity of NJCRIs 340B program is taken very seriously, and a potential 340B rebate model directly goes against the integrity of the program. NJCRI serves the Newark, New Jersey community, the broader northern New Jersey region, and the entire state using multiple mobile units. NJCRIs mobile services include the Hepatitis C Elimination Program, which operates across all 21 counties with the goal of eliminating Hepatitis C in New Jersey. The mobile unit increases patient access to care by expanding access to services for residents throughout New Jersey. These mobile initiatives, along with enhanced client services, comprehensive support, and out-of-pocket healthcare cost assistance, are made possible through savings generated by the 340B program. The rebate model will reduce NJCRIs 340B savings and, therefore, will reduce the services that we, alongside other similar clinics, will be able to offer, such as primary care, case management, behavioral health, and other support services for the community. NJCRI works closely with community pharmacies that are knowledgeable, trained, and passionate about serving our mutual 340B patients. NJCRI has full data and financial transparency with every 340B contract pharmacy, and 100% of all qualified claims are audited by NJCRIs 340B program manager on a weekly basis. If claims are found to be non-compliant, they are corrected at the pharmacy level within one week of processing the claim. In addition to full transparency, our contract pharmacies understand that their impact is important for our organization to continue to build patient trust within their circle of healthcare providers. Community Pride Pharmacy is located on the first floor of NJCRIs organization, and it serves not only our patients but also patients from across the state and surrounding areas. It is a very important aspect of our successful 340B program, and it makes a significant impact on our patients and our organization. The impact of a 340B rebate model will cause fees to increase and access to patient medication to decrease. As it currently stands, the state Medicaid reimbursement rate is lower than the cost of Hepatitis C treatment, and therefore, without a qualified 340B claim, a pharmacy will lose hundreds of dollars per claim. Our contract pharmacies will be unable to risk claims being denied rebates at a later date, which increases the risk of contract pharmacy withdrawal. A higher number of contract pharmacies withdrawing from participation in the 340B program will significantly reduce access to medications for individuals seeking care. NJCRI uses 340B savings to provide patients with financial assistance at the point of pharmacy dispensing, but this will be difficult if the 340B discount is denied outright or provided much later than when the patient has received their medications. If the administrative and financial burden is significant enough for NJCRI and our contract pharmacies, the costs of the rebate model could force the organization to close its doors, and we will no longer be able to maintain our community presence. NJCRIs vision and mission align with this administrations plan to End the HIV Epidemic. If NJCRI is forced to reduce services or end operations completely, this will result in a reduced ability to provide the HIV testing, linkage to care, treatment, and case management necessary to 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org combat the HIV and AIDS epidemic, and it will place a significantly higher burden on state, taxpayer- funded Medicaid programs to provide these services to the residents of New Jersey. NJCRIS POTENTIAL ADMINISTRATIVE BURDEN: Table 1: NJCRIs Potential Administrative Burden Process for Compliance Key Internal Roles External Partners Weekly Effort (per role) Total Weekly Hrs 340B Data Extraction 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 12 hrs 48 hrs 340B Data Validation 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 34 hrs 1216 hrs 340B Data Formatting 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 12 hrs 48 hrs 340B Data Transmission 340B Program Manager, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 45 hrs 810 hrs Internal Sign-Off 340B Program Manager, CFO, Finance, Admin 12 hrs 48 hrs Rebate Payment Tracking (by Manufacturer) 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 34 hrs 1216 hrs Payment-to-Claim Matching 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 34 hrs 1216 hrs Invoice Reconciliation 340B Program Manager, Finance Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 34 hrs 68 hrs Exception Resolution (Unreturned Refunds) 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 12 hrs 48 hrs Audit Trail Maintenance 340B Program Manager, CFO, Finance, Administration Contract Pharmacies, TPAs, Wholesalers, Consultants/Auditors 34 hrs 1216 hrs 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org NJCRIS PATIENTS & PROGRAMS 340B CURRENT PATIENT IMPACT: During the 2024-2025 fiscal year, NJCRIs 340B program had an average of 18 outpatient medical claims that qualified each month. An average of 8.71% of medical claims were still pending payment 45+ days after dispensing, meaning they will fall outside of the proposed manufacturers decision-making window. As the medical advances for HIV treatment and prevention continue to lean towards injectable medications, NJCRI will continue to have an increase in the number of patients with outpatient medical claims and therefore will have an increase in the number of delayed claims validations and rebates. All NJCRIs 340B patients give consent to participate in the program and utilize the contract pharmacies for their medications. NJCRI believes it is imperative for patients to be informed about and take pride in their own healthcare journeys and decisions. A patient recently reached out after completing Hepatitis C treatment to personally thank the team for helping him navigate the journey of curing his Hep C. Unbeknownst to him, he had been living with Hepatitis C for 30+ years, even though he thought he had cured it in the 90s. After he found out it had returned, he had a difficult time with finding a provider and the funds to help with the high medication copay costs. Because of NJCRIs 340B program, he was cured and hes back to enjoying retirement with his grandbabies. - NJCRI Employee A client recently returned to care after nearly a year. She had lost her husband, battled alcoholism, and was ready to heal. I was able to build trust, help her re-engage with her provider, coordinate her hospital discharge, and connect her with mental health and AA support. She now tells me I am her ray of sunshine. This is what the 340B program supportsthe people behind the numbers. - NJCRI Medical Case Manager These are two of thousands of lives transformed through wraparound care made possible by 340B funding. NJCRIs 340B program is not just providing medication... we are building trust, dignity, and a pathway to health. NJCRIS SERVICES: BY THE NUMBERS In 20242025, NJCRI Provided: 841 New Patients for Primary Medical Care 4,302 clients with Medical Case Management 6,913 Sexually Transmitted Infections (STI) screenings and 5,381 HIV tests 3,459 HIV Prevention (PrEP) referrals 1146 Rapid Hep C tests and 702 full lab workups for Hep C treatment 1272 Received Hepatitis C Treatment 5,943 COVID vaccines; 2,802 Mpox vaccines; 180 RSV vaccines 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org Most of the services listed above are provided to all clients, even though many of them do not generate revenue for the organization. This means it often costs more to deliver these services than the organization can recover from them. Thanks to 340B, NJCRI can provide holistic medical care, including general PCP services, access to specialists, dentistry, behavioral health and more to New Jerseyans in urban and rural areas across the entire state. UNIQUE STATEWIDE MOBILE HEPATITIS C ELIMINATION PROGRAM FUNDED BY 340B: Thanks to the support of 340B, NJCRI has treated over 2,000 patients for Hepatitis C and cured over 1,880, achieving a 90-92% adherence rate, which is far above national averages. Our approach, developed in partnership with the New Jersey Department of Health and aligned with the WHOs 2030 elimination goals, includes: Mobile Hepatitis C Clinics: NJCRIs 7 mobile units deliver care directly to patients in all 21 counties of New Jersey on a regular basis. No patient is turned away, regardless of insurance or income. Bringing Testing & Treatment to Rural Populations: NJCRIs mobile units visit 5 counties each month where more than 80% of the areas are rural Rapid, community-based access to infectious disease specialists and essential diagnostics, like on-site FibroScan and Point-of-Care (POC) RNA testing. Wraparound services funded by 340B: transportation, lab work, medication copays, and clinical follow-up. A growing network of 75+ mobile treatment sites across 53 cities and 5 rural counties in NJ This statewide treatment model does not rely on state or federal funding for operations. It is built on the backbone of 340B savings, not taxpayer dollars, and it is fully transparent, audited, and accountable. NJCRIs model proves that Hepatitis C can be eliminated affordably, equitably, and sustainably without federal funding and with minimal state funding, using a community-driven and innovative approach. The 340B program is not just a part of that model; it is its foundation. ANTICIPATED PATIENT AND SERVICES IMPACT FROM REBATE MODEL: NJCRI anticipates that its services and programs would begin to experience significant impacts within two weeks to one month after the implementation of a 340B rebate model. In the event that 340B savings were delayed for a period of 60 to 90 days, some patients could be forced to go without essential treatment for the same duration. This situation would likely require reductions in salaries and personnel, as well as a careful reevaluation of budgets across the organization. In additional any rebates that are potentially denied or delayed could create further financial strain, placing additional pressure on NJCRIs ability to maintain its full range of services and support for the community it serves. 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org Direct Patient Service Reductions: 340B savings are vital for NJCRI to assist patients with reducing their out-of-pocket healthcare costs while managing other challenging life situations. If 340B savings are delayed, reduced, or threatened due to a rebate model, the following patient services at NJCRI would be at the highest risk of reduction: Statewide (Urban & Rural) Mobile Hep C Clinic Statewide (Urban & Rural) HIV Testing Patient Diagnostic and Chronic Illness Lab Fees Health Screenings FibroScan & other Medical Equipment Street Medicine (Especially for uninsured patients with unstable living situations) Patient Insurance Premium Assistance Patient Medication Copay Assistance Patient Medical Transportation Costs Behavioral Health Services Outside Auditing & Ongoing Quality Assurance Services POTENTIAL CASHFLOW IMPACT FOR GROWING NUMBER OF CLIENTS SERVED: During the 2024-2025 fiscal year, NJCRIs 340B program served an average of 341 patients per month who were living with HIV, Hepatitis C, and/or were receiving HIV prevention services and $147,454.54 in savings resulting from 4043 qualified 340B claims were passed directly to patients. If the 340B program were transitioned to a Rebate Model, NJCRI, a non-profit organization, would be required to pay Wholesale Acquisition Cost (WAC) pricing for all medications associated with potentially eligible 340B claims, and then await reimbursement from the manufacturer ~45 days later to make up the difference between the 340B price and the WAC price. NJCRIs 340B program has experienced consistent and significant growth each year since 2020 (see table 2), and this upward trend continues. However, if the 340B program is transitioned into a Rebate Model, the organization will be forced to reduce both the scope of its services and the number of clients served, due to the loss of critical 340B savings that currently enable the effective extension of limited federal and state resources. Under a 340B Rebate Model, NJCRIs average monthly cost of medications, calculated at the extended WAC price, would be $1,964,192.99. The estimated potential cash flow impact of this model is projected to be between $3,000,000 and $4,000,000 on average during a 60 to 90-day waiting period. Table 2: Patients Served Six-Year Continuous Growth Year Living with HIV (Claims, Avg/mo) HIV Prevention (Claims, Avg/mo) Treating Hepatitis C (Claims, Avg/mo) Total Avg Monthly 340B Pts 2020 900 (75) 413 (34) 169 (14) 123 2021 942 (79) 581 (48) 240 (20) 147 2022 937 (78) 584 (49) 1028 (63) 190 2023 1249 (104) 826 (69) 1343 (112) 285 2024 1235 (109) 1218 (105) 1281 (106) 320 2025 1490 (124) 1344 (112) 1209 (100) 336 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org NJCRIs other funding sources are primarily grants, many of which have delayed payments, creating ongoing cash flow challenges for the overall budget. As a result, there is little to no cash available to cover the projected costs under a 340B Rebate Model, which could impact $3-4 million during the anticipated 6090- day period. Delays in payouts from local government-funded grants have already strained cash flow, meaning the organizations emergency savings would likely need to cover upfront medication costs at WAC pricing. Over the past 25 years, increases in Ryan White grants have been minimal and 340B has been critical in filling gaps for essential services such as medical supplies, transportation, and bringing tailored clinics to provide specialized care. This potential change could significantly limit the organizations ability to continue addressing these gaps and meeting patient needs. Table 3: Expenses At-Risk with 340B Rebate Model Cost Category Estimated Annual Cost Funded by 340B Savings 340B Patient Medications $13,641,000 340B Program Fees (Pharmacy Dispense Fees & TPA Fees) $1,551,000 340B Program Staff Salaries & Fringe Benefits $787,000 340B Savings Passed Directly to Patients $150,000 340B Patient Copays $51,000 340B Consultant Fees $21,000 340B Medical Supplies $20,000 340B Program Expenses $15,960 Total at Risk $16,236,960 NJCRIS CURRENT TRANSPARENCY AND AUDITING PRACTICES: As is, NJCRI audits 100% of qualified claims on a weekly basis, to ensure full transparency and preparedness for any HRSA or insurance audits. All discrepancies are reported to the pharmacies on a weekly basis, and they are fixed at the pharmacy level within 1 week of discovering the discrepancy. This tight auditing process reduces the risk of duplicate discounts and/or other errors affecting qualifications and 340B inventory management. NJCRI is contracted with a TPA (PDMI) to handle all switch data from participating pharmacies, which is then run through filters, eliminating the risk of a duplicate discount occurring at the processing level. All Medicaid Fee-For-Service claims are carved out, and duplicate discounts are impossible through use of PDMI. All outpatient medical claims data is received within 45 days of the end of the month and due to the request of the 340B Consultant, all pharmacy processing data is also included on the medical claims data in order to identify secondary claims processed through state programs. This additional step 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org of needing processing information has eliminated the risk of duplicate discounts occurring for claims being processed through the 340B patients medical insurance. In addition to the weekly auditing for pharmacy claims and monthly auditing for medical claims, NJCRI performs annual external audits for all contract pharmacies with qualified claims during the previous year. NJCRI works with the contract pharmacies to collect requested prescription information including vendor receipts, claims data, and a full review of the contract between the Covered Entity and the Contract Pharmacy. As another measure of transparency, NJCRI goes through annual external audits for finances, which includes all 340B finances as well as non-340B finances. PAST EXPERIENCES WITH DRUG MANUFACTURER POLICIES AND PROGRAMS: Past experience with drug manufacturer administered programs, including Patient Assistance Programs (PAPs) and Copay Assistance Programs, demonstrates that these systems are fundamentally inefficient, excessively burdensome, and frequently ineffective. Although manufacturers position PAPs as a safety net for uninsured and underinsured patients, particularly those lacking coverage for Hepatitis C, HIV treatment, or HIV prevention services, the reality is that these programs routinely fail to provide timely access to critical care. The process, from application submission through approval and coordination with dispensing pharmacies, is marked by significant and unacceptable delays. Patients served by NJCRI wait, on average, more than 90 days to receive life sustaining medications through these programs. During this time, medical case management staff at NJCRI are required to spend between three and five hours per patient navigating administrative barriers, diverting valuable resources away from direct patient care. This is not a sustainable or patient centered model. If a 340B Rebate Model is implemented in a manner that mirrors these existing manufacturer run programs, it will predictably replicate these failures. The result will be increased administrative burden, prolonged delays in treatment, and a direct threat to patient health outcomes. Such an approach would represent a significant step backward for patient access and would undermine the effectiveness of healthcare delivery systems that rely on timely medication access. CONCLUSION: DO NOT PROCEED WITH 340B REBATE MODEL HRSAs proposed transition to a rebate model would fundamentally undermine the intent and effectiveness of the 340B program. For organizations like NJCRI, the model introduces untenable financial risk, significant administrative burden, and dangerous delays in care, shifting focus away from patients and toward bureaucracy. The real-world consequences are clear: reduced access to medications, diminished essential services, strained community partnerships, and ultimately, harm to the very populations the program was designed to protect. NJCRIs proven, transparent, and accountable use of 340B savings demonstrates that the current model is working by expanding access, improving 393 Central Ave, Newark, N.J., 07103-2842 T: (973) 483-3444 F: (973) 648-0312 E-mail: njcri@njcri.org Website: www.njcri.org outcomes, and doing so without reliance on additional taxpayer funding. Moving to a rebate model would not strengthen this system; it would destabilize it. We strongly urge HRSA to reject this proposal and preserve the integrity of the 340B program so that organizations like ours can continue delivering lifesaving, community-based care to those who need it most. Sincerely, Brian McGovern, CEO North Jersey Community Research Initiative (NJCRI)
HRSA-2026-0001-1767Illinois Health and Hospital Association2026-04-18T04:00Z15,574 chars
See attached file(s) T R U S T E E S & O F F I C E R S Chair Damond W. Boatwright Hospital Sisters Health System Chair-Elect Dia Nichols Advocate Health Care Immediate Past Chair Shawn P. Vincent Trinity Health Illinois/Loyola Medicine Treasurer Kim Uphoff Sarah Bush Lincoln Health System Secretary Thomas McAfee Northwestern Memorial Hospital President A.J. Wilhelmi Illinois Health and Hospital Association Travis Andersen UW Health Northern Illinois John Antes Southern Illinois Healthcare Tracy Bauer Midwest Medical Center Kavitha Bhatia, MD Prime Healthcare Foundation and Prime Healthcare Ned Budd Thorek Memorial Hospital Trina Casner Pana Community Hospital Mike Cruz, MD OSF HealthCare Polly Davenport, RN Ascension Illinois William Davis Deaconess Illinois Thomas J. Dohm Morris Hospital and Health Centers William Dorsey, MD Jackson Park Hospital and Medical Center Mandy Eaton, PhD Memorial Health Raymond Grady Franciscan Health Olympia Fields Deborah Graves, RN BJC Memorial Hospitals Belleville and Shiloh Damon Harbison SSM Health St. Marys Hospital - Centralia and Good Samaritan Hospital Mount Vernon Thomas Jackiewicz University of Chicago Health System Phillip Kambic Riverside Healthcare Matthew Kolb Carle Health Omar B. Lateef, DO RUSH and Rush University Medical Center Erik Mikaitis, MD Cook County Health Michael Mutterer, RN Silver Cross Hospital Sean OGrady Endeavor Health Leslie M. Rogers South Shore Hospital Rob Schmitt Gibson Area Hospital and Health Services Tom Shanley, MD Ann & Robert H. Lurie Childrens Hospital of Chicago Karissa Turner Wabash General Hospital 1120 East Diehl Rd. 700 South 2nd St. 499 South Capitol St. S.W. 833 West Jackson Blvd. P.O. Box 3015 Springfield, IL 62704 Suite 410 Suite 610 Naperville, IL 60566-7015 217.541.1150 Washington, DC 20003 Chicago, IL 60607 630.276.5400 630.276.5645 312.906.6150 www.team-iha.org April 18, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of our more than 200 hospitals and nearly 40 health systems, the Illinois Health and Hospital Association (IHA) appreciates the opportunity to provide comments on the U.S. Dept. of Health and Human Services (HHS) Health Resources and Services Administrations (HRSA) 340B Rebate Model Pilot Program. More than half of Illinois hospitals participate in the 340B program (Illinois 340B hospitals) and recognize the importance of this longstanding federal program to the financial sustainability of our healthcare system. 340B was designed to financially support providers that serve a disproportionate number of uninsured, low-income, or government-insured patients and allow them to stretch scarce federal resources to offer more services and free or discounted medications, all without using taxpayer funds. Congress intentionally expanded the program under the Affordable Care Act, allowing additional types of hospitals to participate and impact even more Americans. However, the 340B program is under attack by the pharmaceutical industry. Under a thin guise of compliance concerns, rebate models have been promoted by pharmaceutical companies to reduce or eliminate the upfront discounts they are required to offer and, until recently, have offered for over 30 years. 340B providers have depended on these upfront cost savings, supported by meticulous record keeping, to fulfil the intent of the programimplementing and sustaining the services and programs their communities need to live healthy, fulfilling lives. HRSAs 340B Rebate Model Pilot Program casts a long, ominous shadow as it portends the possibility of expansion to other drugs and undercutting those providers it was designed to help. Permitting rebate programs, including HRSAs 340B Rebate Model Pilot Program, will upend the financial stability of Illinois 340B hospitals. Rebate programs are administratively burdensome, create cashflow problems that jeopardize hospital resources, give pharmaceutical companies outsized control over April 18, 2026 Page 2 the entire program, and endanger service lines and programs dependent upon the longstanding operation of upfront discounts. Given that hospitals are essentially required to participate in this rebate program, IHA is very concerned that the pilot was conceived without input from hospitals and offers the following comments. Administrative Burden Any rebate model will create substantial administrative burden for Illinois 340B hospitals. While the administration has indicated it believes hospital compliance with a rebate model will take four hours of staff time per week, many Illinois 340B hospitals have said they will need to hire an entire full-time staff member to execute the rebate model. Administrative costs include the start-up costs of transitioning to a rebate system, including creating and implementing new workflows, in addition to the expected ongoing claim submission work, data tracking, reconciliation activities, dispute resolution mechanisms, and additional vendor support. These administrative costs will be exacerbated if pharmaceutical companies implement disparate, varying rebate processes (e.g., various IT platforms and data submission processes), requiring Illinois 340B hospitals to further invest resources into chasing the discount to which they are entitled. Taken together, the ongoing costs of implementing and complying with a rebate program will substantially cut into the benefits Illinois 340B hospitals receive and their ability to offer more services and free and discounted medications, flying in the face of Congress intent in designing this program. Cash Flow In addition to administrative costs, any rebate program requires Illinois 340B hospitals to purchase medications at a much higher cost rather than providing upfront savings. This has consequences. Under a rebate program, an Illinois 340B hospital is forced to purchase 340B drugs with no guarantee that they will receive the differential between the wholesale acquisition cost and the 340B ceiling price as defined in section 340B(a)(1) of the Public Health Service Act (PHSA). While HRSA may assume rebates will come to providers before money has to go out the door, wholesale distributors generally ask for payment within weeks. The timeline does not work, and Illinois 340B hospitals, that are already operating on thin to negative margins, are unlikely to have the cash they need to make payments in time. In fact, many Illinois 340B hospitals are consistently operating with about 30 days cash on hand. A rebate model also incentivizes pharmaceutical companies to delay reimbursements, as they are effectively receiving interest- free loans, further placing stress on Illinois 340B hospitals cash flow. April 18, 2026 Page 3 Participating in this rebate model costs more than the upfront price of the drug. Coupled with the costs of creating, implementing, and maintaining the rebate program, the lack of upfront discounts may be more costly than what our hospitals are willing to risk, resulting in service closures or worse, hospital closures. Outsized Pharmaceutical Manufacturer Power While HRSA stipulates that a pharmaceutical companys rebate model application will be revoked if they are non-compliant with its 340B Rebate Model Pilot Program requirements, this language does not go far enough, particularly considering the critical financial implications this rebate model has for Illinois 340B hospitals. The damage will already be done. Given the administrative and financial ramifications of this rebate program, HRSA must ensure drug companies participate in good faith by establishing strict enforcement guidelines. We urge HRSA to exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties against pharmaceutical companies for each instance of non-compliance including improper rebate denial, delayed rebate payment, and failure to pay for hospital costs and administrative burdens associated with chasing the discount they are entitled to. Regarding the rebate payments, we encourage HRSA to implement a rigorous enforcement mechanism to ensure rebates are paid to 340B providers in a tightly prescribed timeframe. Additionally, the agency should require drug companies to pay interest should they fail to provide rebates within the timeframe, as allowed under 42 U.S.C. 256(d)(1)(B)(ii)(II). Even with a 10-day rebate requirement in place, countless 340B provider types, including some 340B hospitals, will experience the cash flow concerns mentioned above and have to make hard decisions about staffing and service lines. Drugs are ordered months before they are dispensed, meaning the 340B provider will be financially liable for the wholesale acquisition cost of the drug from the time the purchase is made until ten days after the drug is dispensed. Requiring manufacturers to pay interest when they violate these terms is one small step toward balancing the financial stakes. HRSA should also develop and implement a rigorous oversight mechanism to ensure inappropriate rebate denials do not occur. While we have seen past guidance on allowed and non-allowed rebate denials, it does not provide information on how HRSA will oversee this process. We are particularly interested in how HRSA will oversee allowed rebate denials in situations where the manufacturer believes two covered entities are requesting the same rebate for the same claim. Thus far, HRSA is silent on how it will determine whether this did in fact occur, and we are unaware of evidence that supports claims from pharmaceutical companies that duplicate discounts (or in this case, rebates) are occurring. Additionally, we ask HRSA to develop oversight for disallowed rebate denials to ensure pharmaceutical companies are complying with these rules. There is no incentive on the part of April 18, 2026 Page 4 pharmaceutical companies to work in good faith to resolve disputes with Illinois 340B hospitals over the timeliness of rebate payments considering pharmaceutical companies profits will improve when rebates are delayed or denied. HRSA has not yet issued specific guidance on what it will look for when assessing trends toward failing to pay or when there is enough evidence to revoke a pharmaceutical companys rebate model approval. Even if such denials are eventually overturned, any unnecessary paperwork or delay in rebates will create further administrative burden and financial strain on Illinois 340B hospitals who, again, do not have a choice in terms of participation if it involves the included drugs of a pharmaceutical company. IHA strongly recommends that HRSA create a separate dispute process for the rebate pilot program and produce specific rebate-dispute guidance that includes timelines and specific points-of-contact to receive and follow-up on complaints. While HRSA has indicated that 340B hospitals can raise concerns around rebate delays and denials with the Office of Pharmacy Affairs, to our knowledge there is only a general email for providers to use when submitting a complaint. It may be that HRSA intends to use the current Administrative Dispute Resolution (ADR) process; unfortunately, in many cases it may be inappropriate for 340B providers to use the ADR process under the 340B Rebate Model Pilot Program. While denied rebates are in fact overcharges, statutory limits could preclude ADR review of any issues related to administrative or logistical issues with the rebate model. Additionally, the ADR process can take up to one year to issue a decision, leaving Illinois 340B hospitals on the hook for large sums of money that they may not have the financial health to float for an extended period. Damage to Patients Illinois 340B hospitals use 340B savings to support a variety of service lines and programs, all of which are at risk if this rebate program is implemented, or worse, expanded. Specifically, Illinois 340B hospitals utilize savings to operate retail, specialty, and mail-order pharmacy services in south Chicagoland and rural communities. Others use the savings to fund medication assistance programs that have reduced hospital readmission rates among vulnerable patients and send patients home with their medications to increase adherence. These are in addition to utilizing their 340B savings for infusion therapy clinics, mobile dental clinics, outpatient centers in underserved communities, trauma and violence recovery programs, cancer care access, and charity care and uncompensated services provided to patients each year. Clearly, the current program allows 340B hospitals to stretch federal resources, investing them in the services and programs their patients need. When the rebate program cuts into 340B savings, these are the services and programs that will be cut. Any rebate program will decrease access to healthcare and social services, resulting in higher overall healthcare system costs. Program Assessment April 18, 2026 Page 5 Finally, IHA believes HRSA should not only complete an assessment of the 340B Rebate Model Pilot Program but also, in full transparency, provide that assessment to Congress. This is especially crucial before considering any decision to continue or expand the 340B Rebate Model Pilot Program. Congress created the 340B program, and any fundamental change, such as a rebate program, should be considered not only by lawmakers but also be presented to the public through Notice and Comment rulemaking. HRSA has not established clear metrics on what determines success under the 340B Rebate Model Pilot Program. We ask HRSA to do so, and to consider assessing it for programmatic efficiency and effectiveness, including whether the change to the payment process impacts providers and their ability to purchase medications under the program, maintain service lines, continue investing in the health and wellbeing of their patients, and maintain their position as economic anchors for the communities they serve. In conclusion, we ask HRSA to ensure it has rigorous oversight of the 340B Rebate Model Pilot Program, and the parties participating in it (both manufacturers and 340B providers) to ensure 340B rebates do not result in unanticipated consequences, including restricting the fundamental purpose of the 340B program. HRSA should ensure that current 340B providers are not forced to exit the program due to cash flow issues, especially in states like Illinois where 340B participation is required if the hospital is eligible. It is imperative that Illinois 340B hospitals, serving as anchors of communities and backbones of the healthcare safety net, are not forced into a situation that results in service lines being cut, or worse, hospital closures. Administrator Engels, thank you again for the opportunity to provide comments on this pilot program. Please send questions or comments to Cassie Yarbrough, Assistant Vice President of Health Policy and Finance, at cyarbrough@team-iha.org. Sincerely, A.J. Wilhelmi President & CEO Illinois Health and Hospital Association
HRSA-2026-0001-1768Wayne Community Health Center's Inc.2026-04-19T04:00Z255,853 chars
See attached file(s) April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wayne Community Health Centers Inc., I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a comprehensive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Impact Statement If implemented, the proposed 340B Rebate Model Pilot would require Wayne Community Health Centers, Inc. to increase its upfront drug purchasing capital by more than 74-foldfrom $10,994 to $837,172 annuallywhile adding over $1 million in total costs and reducing our ability to provide affordable medications to 4,539 rural patients we serve, including 621 uninsured individuals. Executive Summary Operational and Patient Access Implications of the Proposed 340B Rebate Model Pilot Program Wayne Community Health Centers, Inc. submits this comment to highlight the significant operational, financial, and patient care risks associated with the proposed 340B Rebate Model Pilot Program. As a frontier rural Community Health Center serving medically underserved populations, our organization relies heavily on the 340B Drug Pricing Program to maintain medication affordability and sustain essential healthcare services. The proposed rebate model represents a fundamental shift from the longstanding structure of the 340B program. Instead of purchasing medications at the statutory 340B ceiling price, covered entities would be required to purchase medications at Wholesale Acquisition Cost (WAC) and wait for manufacturers to issue a rebate after the medication has been dispensed. For rural Community Health Centers operating on limited financial reserves, this model creates significant financial exposure and introduces operational risks that could directly affect patient access to care. Key Findings 1. The rebate model would create a dramatic increase in required drug purchasing capital. Wayne Community Health Centers, Inc. estimates that purchasing the drugs included in the proposed pilot at WAC pricing would increase our upfront drug purchasing costs from $10,994 to $837,172 annually, representing a 74-fold increase in required capital to maintain medication inventory. For a rural Community Health Center operating with limited cash reserves, absorbing this level of upfront financial exposure is not operationally feasible. 2. The rebate model would create over $1 million in additional operational costs. Our analysis projects that implementing the rebate model would increase our operational costs by approximately $1,054,290 annually, driven by: Additional staffing required to manage rebate submissions and reconciliation. New IT infrastructure and software integrations Third-party vendor and administrative compliance costs Ongoing manual monitoring and dispute resolution processes These are administrative expenses that provide no direct patient care benefit but would be required solely to comply with the operational structure of the rebate model. 3. Patient access to medications would be directly impacted. Wayne Community Health Centers, Inc. currently serves 4,539 patients, including 621 uninsured individuals who rely heavily on the affordability created through the 340B program. Our organization conducts approximately 28,469 annual 340B transactions, enabling patients to obtain essential medications for chronic conditions such as: Diabetes Cardiovascular disease Chronic kidney disease Behavioral health conditions The rebate model removes the upfront 340B savings that currently allow Community Health Centers to provide immediate medication discounts at the point of sale. Without those savings available at the time of dispensing, patients may face increased medication costs, delays in treatment, or loss of access to essential therapies. 4. The rebate model would reduce healthcare workforce capacity in rural communities. The financial pressures associated with the rebate model would force Wayne Community Health Centers, Inc. to delay or eliminate hiring for several essential clinical positions, including: 1 full-time dentist 2 pharmacy technicians Potentially 1 pharmacist 2 medical providers 1 social worker In rural healthcare settings where provider shortages are already severe, these workforce reductions would significantly reduce access to primary care, dental services, pharmacy support, and behavioral health services. 5. Existing federal rebate systems already demonstrate operational failure risks. Wayne Community Health Centers, Inc. has already experienced operational challenges related to rebate reconciliation under the Medicare Maximum Fair Price (MFP) program, including: Incorrect classification of non-340B claims as 340B claims. Manufacturer denial of rebates despite the absence of 340B identifiers Requests for additional data submissions not required by statute. Delays in resolving rebate disputes through manufacturer-controlled reconciliation systems. These experiences demonstrate that rebate systems can introduce significant administrative complexity, inaccurate claim determinations, and delayed payments, all of which create financial instability for safety-net providers. Expanding this model to the broader 340B program would significantly magnify these risks. Policy Recommendation Given the financial, operational, and patient care risks described in this submission, Wayne Community Health Centers, Inc. strongly urges HRSA to exempt Community Health Centers from participation in the 340B Rebate Model Pilot Program. If HRSA proceeds with a rebate-based model, the agency should implement strong safeguards, including: Uniform national rebate submission standards Transparent claim validation criteria Enforceable timelines for manufacturer rebate payments Independent oversight of rebate determinations A neutral national clearinghouse to prevent duplicate discounts without shifting financial risk to covered entities. Without these protections, the proposed rebate model risks undermining the core purpose of the 340B program: to allow safety-net providers to stretch scarce federal resources and expand access to care for medically underserved populations. Detailed Comments and Analysis of the Proposed 340B Rebate Model Pilot Program The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Wayne Community Health Centers Inc. anticipates an annual loss of $92,652 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Wayne Community Health Centers Inc. expects that our operational costs will increase $1,054,290 annually just to manage the pilot. This results in a 74-fold increase in upfront inventory spending from the $10,994 we currently spend, decimating our cash on hand. This amount reflects 42% of our grant funding. Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to maintain our basic services. These savings are passed directly onto our sliding scale patients which receive millions of dollars of medications per year at our cost. The rebate pilot will directly affect these patients. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Wayne Community Health Center in particular, this would have direct operational consequences for the patients and communities we serve as shown: Patient Population and 340B Utilization Wayne Community Health Centers, Inc. conducts 28,469 340B transactions annually in support of patient care and medication access. Our organization currently serves 4,539 patients across our frontier rural service area. Of these patients, 621 individuals are uninsured, representing approximately 13.7% of our total patient population. These uninsured patients rely heavily on the affordability made possible by the 340B program to access essential medications. In addition to directly supporting uninsured patients, the financial stability created through the 340B program allows our organization to operate an outreach and enrollment program that assists patients in obtaining health insurance coverage. Through these efforts, an estimated 21% of our patient population has been successfully enrolled in insurance coverage who otherwise would have remained uninsured. This demonstrates that the 340B program not only provides direct medication affordability but also strengthens broader healthcare access by supporting enrollment initiatives that connect patients to long-term coverage. Current Administrative Costs of 340B Compliance Wayne Community Health Centers, Inc. already dedicates significant resources to maintaining compliance with the 340B program. Our current administrative costs for the program total approximately $2,720 per week, which reflects the work of one full-time equivalent (FTE) staff member working 40 hours per week to manage and maintain program operations. On an annual basis, this represents approximately $141,440 in administrative costs dedicated solely to 340B program oversight. These resources are necessary to ensure proper compliance with federal program requirements, maintain accurate purchasing and dispensing records, and conduct ongoing internal monitoring and reconciliation activities. The proposed rebate model would dramatically increase these administrative requirements. Instead of operating within a single standardized purchasing framework, our organization would need to implement complex rebate submission, reconciliation, and dispute processes across multiple manufacturer platforms. This would require additional staffing, new IT infrastructure, and significantly expanded administrative oversight. Use of 340B Savings to Support Patient Care Revenue generated through the 340B program is reinvested directly into our Community Health Center to enhance patient care and expand access to essential services. Specifically, 340B savings support: Medication affordability programs, allowing us to provide reduced-cost or non-cost prescriptions to eligible patients Access to medications for uninsured patients who would otherwise be unable to afford treatment Clinical services for underserved populations, including patients with chronic diseases such as diabetes, cardiovascular disease, and behavioral health conditions Care coordination and patient assistance programs that help patients navigate complex treatment regimens and medication access challenges Operational support for services that are not fully reimbursed by payers, allowing us to maintain essential healthcare services in a frontier rural environment These reinvestments ensure that Wayne Community Health Centers, Inc. can continue to deliver comprehensive, high-quality care to vulnerable populations within our community. If the rebate model disrupts the financial stability of the 340B program, the resources currently used to support these services would be significantly reduced. This would directly affect our ability to maintain medication affordability programs, sustain outreach and enrollment services, and continue providing comprehensive care to underserved patients across our rural service area. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Wayne Community Health Center will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already-strained operational capabilities. Sliding Fee Discount: Wayne Community Health Center provided $1,304,428 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wayne Community Health Center anticipates needing 0.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wayne Community Health Center anticipates an increase of $47,541 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Based on our current 340B program volume and administrative structure, Wayne Community Health Centers, Inc. estimates that implementation of a rebate-based pilot model would require additional staffing resources to ensure accurate claim processing, regulatory compliance, and financial oversight. At present, our 340B program is supported by approximately 0.751.0 full-time equivalent (FTE) dedicated to program administration. These responsibilities include inventory oversight, purchasing compliance, internal auditing, and coordination with pharmacy and billing systems. Under a rebate-based model, we anticipate the need for an additional 0.751.0 FTE to manage the expanded operational complexity associated with rebate submission and reconciliation processes. These additional responsibilities would include: Claim-level tracking of eligible prescriptions. Submission of rebate requests across manufacturer platforms Reconciliation of manufacturer rebate payments Monitoring and resolution of denied or delayed rebate claim Expanded compliance documentation and audit preparation. Coordination between pharmacy, billing, and financial systems to validate rebate eligibility. This additional staffing would support both administrative and pharmacy-related functions, including prescription validation, data management, billing coordination, and resolution of claim discrepancies. Based on current staffing costs, the additional personnel required to administer a rebate-based system would increase administrative expenses by approximately $106,080 to $141,440 annually. These additional costs represent new administrative expenses that provide no direct patient care benefit but would be required solely to manage the operational complexities created by the proposed rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Wayne Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $21,152 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 4,539 patients, the total projected increase in expenses-including labor, IT, and carrying costsis estimated at $1,054,290 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Implementation of a rebate-based 340B pilot model will require direct and sustained integration between our Electronic Health Record (EHR), eClinicalWorks, and our pharmacy management system, PioneerRx, with a new and complex rebate processing infrastructure. Unlike the current front-end discount model, a rebate system depends on accurate, real-time data exchange across multiple platforms to validate eligible prescriptions, capture dispensing data, and support timely rebate submissions. This will necessitate building and maintaining interfaces that can securely transmit detailed patient, encounter, and prescription-level data between eClinicalWorks and PioneerRx, and subsequently to the rebate administrator or manufacturer platforms. In addition, both systems will need to support enhanced data mapping, claim-level tracking, and reconciliation processes to ensure that all eligible transactions are identified and submitted correctly. This includes aligning clinical encounter data from eClinicalWorks with dispensing and billing data in PioneerRx, as well as implementing workflows to flag discrepancies, managing denials, and supporting audit readiness. The complexity of this integration will require ongoing oversight, system configuration, and coordination between clinical, pharmacy, and administrative teams. Ensuring interoperability, data accuracy, and compliance across these platforms is critical to successfully operationalizing the rebate model while minimizing financial risk and maintaining continuity of patient care. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. An estimated additional $23,756 will need to be spent. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate-based model also introduces significant uncertainty regarding our ability to consistently apply sliding-fee discounts at the point of sale. As a Community Health Center, Wayne Community Health Centers, Inc. is required to provide discounts for all in-scope services in accordance with HRSA regulations, and prescription medications are a critical component of that commitment. Wayne Community Health Centers, Inc. utilizes the savings generated through the 340B program to ensure prescription medications remain affordable and accessible for our patients, particularly those who are uninsured or underinsured. Consistent with federal Health Center Program requirements, our organization operates a sliding fee discount program that reduces the cost of medications based on each patients income and household size. Under this program, eligible patients receive reduced-cost prescriptions, with the lowest-income patients paying only a nominal fee and, in some cases, receiving medications at no cost. For uninsured patients, we further reduce financial barriers by offering deeply discounted pricing on essential medications and by leveraging manufacturer patient assistance programs when available. These programs are essential to ensuring that patients in our rural service area can obtain the medications necessary to manage chronic conditions and maintain their health. This approach allows our pharmacies to provide immediate, predictable pricing at the point of sale, ensuring that patients can access needed medications without delay. However, under a rebate-based modelwhere savings are realized only after the medication has been dispensedwe would face significant challenges in maintaining this upfront discount structure. Because the rebate model requires covered entities to purchase medications at Wholesale Acquisition Cost (WAC) and wait for reimbursement, the real-time financial savings that currently support our sliding fee discount program would no longer be available at the point of purchase. The absence of these upfront savings would create operational and financial uncertainty when determining the appropriate discount to apply for patients at the pharmacy counter. As a result, the rebate model could limit our ability to provide the same level of reduced pricing that patients currently rely on. For many of the vulnerable patients we serveparticularly those who are uninsured or living at or below the federal poverty levelthis change could create significant barriers to medication access. Reduced affordability may lead to medication nonadherence, delays in treatment, and ultimately poorer health outcomes for the rural and underserved populations our health center is designed to serve. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $837,172 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $10,994 to purchase these same drugs at the 340B ceiling price. This represents a 74-fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wayne Community Health Centers Inc. anticipates needing to reduce: Operational Impacts on Services, Staffing, and Patient Access To offset the significant upfront cost increases associated with purchasing medications at Wholesale Acquisition Cost (WAC) under a rebate-based model, Wayne Community Health Centers, Inc. would be forced to make difficult operational decisions that directly affect patient access to care. Essential Clinical Services The financial pressures created by the rebate model would require our organization to reduce or delay investment in essential clinical services that support our rural patient population. Specifically, the increased cost of medication purchasing and rebate administration would force us to divert limited financial resources away from direct patient care services. As a result, programs that are essential to managing chronic disease and improving medication adherencesuch as medication therapy management services, care coordination activities, and outreach initiatives that help patients navigate treatment and access medicationswould be at risk of reduction or elimination. These services are particularly important in rural communities where access to healthcare providers and specialty care is already limited. Operating Hours In order to manage the financial strain created by increased drug acquisition costs and administrative burdens, Wayne Community Health Centers, Inc. may also be forced to reduce clinic operating hours. Reduced operating hours would most likely affect extended or flexible clinic times that many of our patients depend on. In our rural community, many patients work in agriculture, construction, and other labor-intensive industries where taking time off during traditional business hours can result in lost wages. Reductions in clinic availability would therefore create additional barriers for patients seeking timely care. Workforce and Staffing The administrative complexity introduced by a rebate-based model would require significant diversion of financial resources away from clinical staff and toward administrative compliance activities. Based on current projections, Wayne Community Health Centers, Inc. anticipates that the financial pressures created by the rebate model would prevent the organization from rehiring or filling several key clinical positions. These positions are critical to maintaining access to care in our community and include: 1 FTE Dentist 2 FTE Pharmacy Technicians Potentially 1 FTE Pharmacist 2 FTE Medical Providers 1 FTE Social Worker These positions represent essential components of our care delivery system. Failure to maintain these roles would directly reduce patient access to dental care, pharmacy services, primary care appointments, medication management support, and behavioral health services. Additionally, the need to allocate staffing resources toward rebate administration means that for every rebate coordinator or administrative role required to manage this pilot, our organization loses the ability to fund clinical staff who provide direct patient care. This shift in staffing priorities would ultimately increase patient wait times, reduce appointment availability, and limit access to critical health services. Patient Financial Assistance The rebate model also threatens our ability to provide medications at zero-pay or deeply discounted rates through our sliding fee discount program. Currently, 340B savings allows our organization to offer medications at reduced cost to eligible patients at the time of dispensing. However, under a rebate model, the financial savings associated with 340B pricing would not be realized until after the medication has already been dispensed and the rebate has been processed. If those funds are temporarily held by manufacturers during the rebate reconciliation process, our organization would lose the ability to provide the upfront financial support that many patients depend on. Wayne Community Health Centers, Inc. serves 4,539 patients, including 621 uninsured individuals, many of whom rely on discounted medication access to manage chronic conditions such as diabetes, cardiovascular disease, and respiratory illness. Without the ability to apply immediate discounts at the pharmacy counter, patients may be forced to delay filling prescriptions or ration medications, which increases the risk of preventable complications and hospitalizations. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wayne Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Wayne Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $95,996. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wayne Community Health Centers Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $69,764. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to rely on a combination of limited financial reserves and external financing to maintain medication inventory. Based on current purchasing projections, Wayne Community Health Centers, Inc. would be able to self-finance approximately one month of drug expenditure, estimated at $69,764. However, the remaining two months of medication purchasesapproximately $139,528would need to be financed through a line of credit until rebate payments are received. Assuming an interest rate of 8% and a repayment cycle occurring every fourth month, the interest costs associated with financing these drug purchases are estimated to total approximately $8,372 annually. While this amount may appear modest in isolation, these funds represent resources that are currently dedicated to patient care programs within our health center, including medication affordability initiatives, care coordination services, and outreach programs designed to support vulnerable populations in our rural service area. Requiring safety-net providers to incur additional financing costs simply to access statutory 340B pricing undermines the fundamental purpose of the programto stretch scarce federal resources and expand access to care for medically underserved communities. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Wayne Community Health Centers Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Wayne Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $41,859. A more realistic figure based on our current denial rate with the MFP rebates is 42%, this would equate to a loss of $351,612 per year. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Evidence of Existing Rebate System Failures Wayne Community Health Centers, Inc. has already experienced operational failures related to the reconciliation of rebates under the Medicare Maximum Fair Price (MFP) program, which illustrates the risks inherent in implementing a rebate-based pricing structure for the 340B program. Our experience demonstrates that rebate reconciliation systems can produce incorrect claim determinations, delayed payments, and significant administrative burdens, all of which create financial uncertainty for safety-net providers operating on narrow margins. Examples of issues our organization has encountered include: Non-340B claims purchased at Wholesale Acquisition Cost (WAC) being incorrectly identified by manufacturers as 340B claims during the reconciliation process. Manufacturer denial of rebate payments based on incorrect classification of claims despite the absence of any 340B identifiers or submission of 340B-related billing codes. Requests from manufacturers to submit additional 340B transaction data through third-party platforms, even though no statutory or regulatory requirement exists for covered entities to provide such information. Delays in resolving rebate disputes, due in part to reliance on reconciliation systems operated by manufacturers or their vendors rather than neutral entities. These real-world operational challenges demonstrate that rebate reconciliation systems are already producing inaccurate determinations and payment delays in existing federal pricing programs. Expanding this model to the broader 340B purchasing framework would significantly increase financial risk for covered entities. For rural Community Health Centers such as Wayne Community Health Centers, Inc., even small delays or inaccuracies in rebate payments can have meaningful consequences for cash flow, medication purchasing decisions, and patient access to essential therapies. A rebate model effectively shifts the financial risk of manufacturer pricing compliance onto safety-net providers that lack the capital reserves to absorb these disruptions. Our experience with current rebate reconciliation processes illustrates that the administrative and financial risks associated with a rebate-based system are not theoreticalthey are already occurring in practice. Expanding this model to the entire 340B program would magnify these risks and further destabilize providers serving medically underserved communities. Program Integrity Risks Created by Manufacturer-Controlled Rebate Systems A fundamental concern with the proposed rebate-based pricing model is that it places the authority to determine whether a covered entity receives its statutory 340B savings directly in the hands of drug manufacturers. Under a rebate structure, manufacturers effectively become the sole arbiters of rebate eligibility, claim validation, and payment approval. This creates a system in which the entity responsible for paying the rebate is also responsible for determining whether the rebate should be paid. This structure introduces an inherent conflict of interest. Covered entities would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and then rely on manufacturers to later determine whether the entity is eligible to receive the rebate necessary to reach the statutory 340B ceiling price. In practice, this creates a situation where manufacturers function as the validator, adjudicator, and payer of rebate claims, without an independent oversight or clearing mechanism to ensure consistent and transparent determinations. Our experience with the Medicare Maximum Fair Price (MFP) reconciliation process demonstrates the operational risks associated with this model. In multiple instances, manufacturers or their vendor platforms have incorrectly classified claims, denied rebates without sufficient documentation, or required additional data submissions that are not supported by statutory requirements. These situations have created delays and uncertainty in receiving funds that safety-net providers rely upon to maintain medication affordability programs. When these determinations occur within a system controlled by manufacturers, covered entities are left with limited visibility into the decision-making process and few clear avenues for timely dispute resolution. For organizations operating with limited financial reserves, delays or incorrect determinations can result in significant cash flow disruptions. The proposed rebate model therefore creates a structural program integrity risk, as it shifts financial risk and operational burden to covered entities while allowing manufacturers broad discretion over the release of funds that represent statutory pricing protections. For rural Community Health Centers such as Wayne Community Health Centers, Inc., this type of financial uncertainty threatens the stability of the safety-net infrastructure that the 340B program was designed to support. Any rebate-based model must include strong safeguards, including standardized validation criteria, transparent claim documentation requirements, independent oversight mechanisms, and enforceable timelines for payment. Without these protections, the rebate model risks undermining the fundamental purpose of the 340B programto ensure that safety-net providers can stretch scarce federal resources and expand access to care for medically underserved populations. Conclusion Wayne Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wayne Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Wayne Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact us. Sincerely, Donavan Smith, RPH Chief Executive Officer Zackery Taylor, PharmD/MBA Chief Pharmacy Officer April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wayne Community Health Centers Inc., I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a comprehensive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Impact Statement If implemented, the proposed 340B Rebate Model Pilot would require Wayne Community Health Centers, Inc. to increase its upfront drug purchasing capital by more than 74-fold from $10,994 to $837,172 annuallywhile adding over $1 million in total costs and reducing our ability to provide affordable medications to 4,539 rural patients we serve, including 621 uninsured individuals. Executive Summary Operational and Patient Access Implications of the Proposed 340B Rebate Model Pilot Program Wayne Community Health Centers, Inc. submits this comment to highlight the significant operational, financial, and patient care risks associated with the proposed 340B Rebate Model Pilot Program. As a frontier rural Community Health Center serving medically underserved populations, our organization relies heavily on the 340B Drug Pricing Program to maintain medication affordability and sustain essential healthcare services. The proposed rebate model represents a fundamental shift from the longstanding structure of the 340B program. Instead of purchasing medications at the statutory 340B ceiling price, covered entities would be required to purchase medications at Wholesale Acquisition Cost (WAC) and wait for manufacturers to issue a rebate after the medication has been dispensed. For rural Community Health Centers operating on limited financial reserves, this model creates significant financial exposure and introduces operational risks that could directly affect patient access to care. 2 Key Findings 1. The rebate model would create a dramatic increase in required drug purchasing capital. Wayne Community Health Centers, Inc. estimates that purchasing the drugs included in the proposed pilot at WAC pricing would increase our upfront drug purchasing costs from $10,994 to $837,172 annually, representing a 74-fold increase in required capital to maintain medication inventory. For a rural Community Health Center operating with limited cash reserves, absorbing this level of upfront financial exposure is not operationally feasible. 2. The rebate model would create over $1 million in additional operational costs. Our analysis projects that implementing the rebate model would increase our operational costs by approximately $1,054,290 annually, driven by: Additional staffing required to manage rebate submissions and reconciliation. New IT infrastructure and software integrations Third-party vendor and administrative compliance costs Ongoing manual monitoring and dispute resolution processes These are administrative expenses that provide no direct patient care benefit but would be required solely to comply with the operational structure of the rebate model. 3. Patient access to medications would be directly impacted. Wayne Community Health Centers, Inc. currently serves 4,539 patients, including 621 uninsured individuals who rely heavily on the affordability created through the 340B program. Our organization conducts approximately 28,469 annual 340B transactions, enabling patients to obtain essential medications for chronic conditions such as: Diabetes Cardiovascular disease Chronic kidney disease Behavioral health conditions The rebate model removes the upfront 340B savings that currently allow Community Health Centers to provide immediate medication discounts at the point of sale. Without those savings available at the time of dispensing, patients may face increased medication costs, delays in treatment, or loss of access to essential therapies. 3 4. The rebate model would reduce healthcare workforce capacity in rural communities. The financial pressures associated with the rebate model would force Wayne Community Health Centers, Inc. to delay or eliminate hiring for several essential clinical positions, including: 1 full-time dentist 2 pharmacy technicians Potentially 1 pharmacist 2 medical providers 1 social worker In rural healthcare settings where provider shortages are already severe, these workforce reductions would significantly reduce access to primary care, dental services, pharmacy support, and behavioral health services. 5. Existing federal rebate systems already demonstrate operational failure risks. Wayne Community Health Centers, Inc. has already experienced operational challenges related to rebate reconciliation under the Medicare Maximum Fair Price (MFP) program, including: Incorrect classification of non-340B claims as 340B claims. Manufacturer denial of rebates despite the absence of 340B identifiers Requests for additional data submissions not required by statute. Delays in resolving rebate disputes through manufacturer-controlled reconciliation systems. These experiences demonstrate that rebate systems can introduce significant administrative complexity, inaccurate claim determinations, and delayed payments, all of which create financial instability for safety-net providers. Expanding this model to the broader 340B program would significantly magnify these risks. Policy Recommendation Given the financial, operational, and patient care risks described in this submission, Wayne Community Health Centers, Inc. strongly urges HRSA to exempt Community Health Centers from participation in the 340B Rebate Model Pilot Program. If HRSA proceeds with a rebate-based model, the agency should implement strong safeguards, including: Uniform national rebate submission standards Transparent claim validation criteria Enforceable timelines for manufacturer rebate payments Independent oversight of rebate determinations A neutral national clearinghouse to prevent duplicate discounts without shifting financial risk to covered entities. 4 Without these protections, the proposed rebate model risks undermining the core purpose of the 340B program: to allow safety-net providers to stretch scarce federal resources and expand access to care for medically underserved populations. Detailed Comments and Analysis of the Proposed 340B Rebate Model Pilot Program The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Wayne Community Health Centers Inc. anticipates an annual loss of $92,652 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Wayne Community Health Centers Inc. expects that our operational costs will increase $1,054,290 annually just to manage the pilot. o This results in a 74-fold increase in upfront inventory spending from the $10,994 we currently spend, decimating our cash on hand. o This amount reflects 42% of our grant funding. o Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to maintain our basic services. i. These savings are passed directly onto our sliding scale patients which receive millions of dollars of medications per year at our cost. The rebate pilot will directly affect these patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Wayne Community Health Center in particular, this would have direct operational consequences for the patients and communities we serve as shown: 5 Patient Population and 340B Utilization Wayne Community Health Centers, Inc. conducts 28,469 340B transactions annually in support of patient care and medication access. Our organization currently serves 4,539 patients across our frontier rural service area. Of these patients, 621 individuals are uninsured, representing approximately 13.7% of our total patient population. These uninsured patients rely heavily on the affordability made possible by the 340B program to access essential medications. In addition to directly supporting uninsured patients, the financial stability created through the 340B program allows our organization to operate an outreach and enrollment program that assists patients in obtaining health insurance coverage. Through these efforts, an estimated 21% of our patient population has been successfully enrolled in insurance coverage who otherwise would have remained uninsured. This demonstrates that the 340B program not only provides direct medication affordability but also strengthens broader healthcare access by supporting enrollment initiatives that connect patients to long-term coverage. Current Administrative Costs of 340B Compliance Wayne Community Health Centers, Inc. already dedicates significant resources to maintaining compliance with the 340B program. Our current administrative costs for the program total approximately $2,720 per week, which reflects the work of one full-time equivalent (FTE) staff member working 40 hours per week to manage and maintain program operations. On an annual basis, this represents approximately $141,440 in administrative costs dedicated solely to 340B program oversight. These resources are necessary to ensure proper compliance with federal program requirements, maintain accurate purchasing and dispensing records, and conduct ongoing internal monitoring and reconciliation activities. The proposed rebate model would dramatically increase these administrative requirements. Instead of operating within a single standardized purchasing framework, our organization would need to implement complex rebate submission, reconciliation, and dispute processes across multiple manufacturer platforms. This would require additional staffing, new IT infrastructure, and significantly expanded administrative oversight. Use of 340B Savings to Support Patient Care Revenue generated through the 340B program is reinvested directly into our Community Health Center to enhance patient care and expand access to essential services. Specifically, 340B savings support: Medication affordability programs, allowing us to provide reduced-cost or non-cost prescriptions to eligible patients 6 Access to medications for uninsured patients who would otherwise be unable to afford treatment Clinical services for underserved populations, including patients with chronic diseases such as diabetes, cardiovascular disease, and behavioral health conditions Care coordination and patient assistance programs that help patients navigate complex treatment regimens and medication access challenges Operational support for services that are not fully reimbursed by payers, allowing us to maintain essential healthcare services in a frontier rural environment These reinvestments ensure that Wayne Community Health Centers, Inc. can continue to deliver comprehensive, high-quality care to vulnerable populations within our community. If the rebate model disrupts the financial stability of the 340B program, the resources currently used to support these services would be significantly reduced. This would directly affect our ability to maintain medication affordability programs, sustain outreach and enrollment services, and continue providing comprehensive care to underserved patients across our rural service area. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured1. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.2 This patient population relies on affordable medications to manage these long-term conditions. 1 https://data.hrsa.gov/topics/healthcenters/uds/overview/state/UT/table?tableName=9D 2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 7 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.4 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.5 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.6 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,7 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 3 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 6 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated with Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 7 2025 UDA Data, HRSA (hrsa.gov) 8 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Wayne Community Health Center will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already- strained operational capabilities. Sliding Fee Discount: Wayne Community Health Center provided $1,304,428 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wayne Community Health Center anticipates needing 0.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wayne Community Health Center anticipates an increase of $47,541 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 9 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Based on our current 340B program volume and administrative structure, Wayne Community Health Centers, Inc. estimates that implementation of a rebate-based pilot model would require additional staffing resources to ensure accurate claim processing, regulatory compliance, and financial oversight. At present, our 340B program is supported by approximately 0.751.0 full-time equivalent (FTE) dedicated to program administration. These responsibilities include inventory oversight, purchasing compliance, internal auditing, and coordination with pharmacy and billing systems. Under a rebate-based model, we anticipate the need for an additional 0.751.0 FTE to manage the expanded operational complexity associated with rebate submission and reconciliation processes. These additional responsibilities would include: Claim-level tracking of eligible prescriptions. Submission of rebate requests across manufacturer platforms Reconciliation of manufacturer rebate payments Monitoring and resolution of denied or delayed rebate claim Expanded compliance documentation and audit preparation. Coordination between pharmacy, billing, and financial systems to validate rebate eligibility. This additional staffing would support both administrative and pharmacy-related functions, including prescription validation, data management, billing coordination, and resolution of claim discrepancies. Based on current staffing costs, the additional personnel required to administer a rebate-based system would increase administrative expenses by approximately $106,080 to $141,440 annually. These additional costs represent new administrative expenses that provide no direct patient care benefit but would be required solely to manage the operational complexities created by the proposed rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and 10 operational burdens. If the rebate model is adopted, Wayne Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $21,152 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 4,539 patients, the total projected increase in expenses- including labor, IT, and carrying costsis estimated at $1,054,290 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Implementation of a rebate-based 340B pilot model will require direct and sustained integration between our Electronic Health Record (EHR), eClinicalWorks, and our pharmacy management system, PioneerRx, with a new and complex rebate processing infrastructure. Unlike the current front-end discount model, a rebate system depends on accurate, real-time data exchange across multiple platforms to validate eligible prescriptions, capture dispensing data, and support timely rebate submissions. This will necessitate building and maintaining interfaces that can securely transmit detailed patient, encounter, and prescription-level data between eClinicalWorks and PioneerRx, and subsequently to the rebate administrator or manufacturer platforms. In addition, both systems will need to support enhanced data mapping, claim-level tracking, and reconciliation processes to ensure that all eligible transactions are identified and submitted correctly. This includes aligning clinical encounter data from eClinicalWorks with dispensing and billing data in PioneerRx, as well as implementing workflows to flag discrepancies, managing denials, and supporting audit readiness. The complexity of this integration will require ongoing oversight, system configuration, and coordination between clinical, pharmacy, and administrative teams. Ensuring interoperability, data accuracy, and compliance across these platforms is critical to successfully operationalizing the rebate model while minimizing financial risk and maintaining continuity of patient care. 11 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. o An estimated additional $23,756 will need to be spent. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 8 Internal NACHC survey data 12 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate-based model also introduces significant uncertainty regarding our ability to consistently apply sliding-fee discounts at the point of sale. As a Community Health Center, Wayne Community Health Centers, Inc. is required to provide discounts for all in-scope services in accordance with HRSA regulations, and prescription medications are a critical component of that commitment. Wayne Community Health Centers, Inc. utilizes the savings generated through the 340B program to ensure prescription medications remain affordable and accessible for our patients, particularly those who are uninsured or underinsured. Consistent with federal Health Center Program requirements, our organization operates a sliding fee discount program that reduces the cost of medications based on each patients income and household size. Under this program, eligible patients receive reduced-cost prescriptions, with the lowest-income patients paying only a nominal fee and, in some cases, receiving medications at no cost. For uninsured patients, we further reduce financial barriers by offering deeply discounted pricing on essential medications and by leveraging manufacturer patient assistance programs when available. These programs are essential to ensuring that patients in our rural service area can obtain the medications necessary to manage chronic conditions and maintain their health. This approach allows our pharmacies to provide immediate, predictable pricing at the point of sale, ensuring that patients can access needed medications without delay. However, under a rebate- based modelwhere savings are realized only after the medication has been dispensedwe would face significant challenges in maintaining this upfront discount structure. 13 Because the rebate model requires covered entities to purchase medications at Wholesale Acquisition Cost (WAC) and wait for reimbursement, the real-time financial savings that currently support our sliding fee discount program would no longer be available at the point of purchase. The absence of these upfront savings would create operational and financial uncertainty when determining the appropriate discount to apply for patients at the pharmacy counter. As a result, the rebate model could limit our ability to provide the same level of reduced pricing that patients currently rely on. For many of the vulnerable patients we serveparticularly those who are uninsured or living at or below the federal poverty levelthis change could create significant barriers to medication access. Reduced affordability may lead to medication nonadherence, delays in treatment, and ultimately poorer health outcomes for the rural and underserved populations our health center is designed to serve. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).9 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. 9https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B10 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.11 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $837,172 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $10,994 to purchase these same drugs at the 340B ceiling price. This represents a 74-fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wayne Community Health Centers Inc. anticipates needing to reduce: 10 https://340bpricing.hrsa.gov/ 11 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 15 Operational Impacts on Services, Staffing, and Patient Access To offset the significant upfront cost increases associated with purchasing medications at Wholesale Acquisition Cost (WAC) under a rebate-based model, Wayne Community Health Centers, Inc. would be forced to make difficult operational decisions that directly affect patient access to care. Essential Clinical Services The financial pressures created by the rebate model would require our organization to reduce or delay investment in essential clinical services that support our rural patient population. Specifically, the increased cost of medication purchasing and rebate administration would force us to divert limited financial resources away from direct patient care services. As a result, programs that are essential to managing chronic disease and improving medication adherencesuch as medication therapy management services, care coordination activities, and outreach initiatives that help patients navigate treatment and access medicationswould be at risk of reduction or elimination. These services are particularly important in rural communities where access to healthcare providers and specialty care is already limited. Operating Hours In order to manage the financial strain created by increased drug acquisition costs and administrative burdens, Wayne Community Health Centers, Inc. may also be forced to reduce clinic operating hours. Reduced operating hours would most likely affect extended or flexible clinic times that many of our patients depend on. In our rural community, many patients work in agriculture, construction, and other labor- intensive industries where taking time off during traditional business hours can result in lost wages. Reductions in clinic availability would therefore create additional barriers for patients seeking timely care. Workforce and Staffing The administrative complexity introduced by a rebate-based model would require significant diversion of financial resources away from clinical staff and toward administrative compliance activities. Based on current projections, Wayne Community Health Centers, Inc. anticipates that the financial pressures created by the rebate model would prevent the organization from rehiring or filling several key clinical positions. These positions are critical to maintaining access to care in our community and include: 16 o 1 FTE Dentist o 2 FTE Pharmacy Technicians o Potentially 1 FTE Pharmacist o 2 FTE Medical Providers o 1 FTE Social Worker These positions represent essential components of our care delivery system. Failure to maintain these roles would directly reduce patient access to dental care, pharmacy services, primary care appointments, medication management support, and behavioral health services. Additionally, the need to allocate staffing resources toward rebate administration means that for every rebate coordinator or administrative role required to manage this pilot, our organization loses the ability to fund clinical staff who provide direct patient care. This shift in staffing priorities would ultimately increase patient wait times, reduce appointment availability, and limit access to critical health services. Patient Financial Assistance The rebate model also threatens our ability to provide medications at zero-pay or deeply discounted rates through our sliding fee discount program. Currently, 340B savings allows our organization to offer medications at reduced cost to eligible patients at the time of dispensing. However, under a rebate model, the financial savings associated with 340B pricing would not be realized until after the medication has already been dispensed and the rebate has been processed. If those funds are temporarily held by manufacturers during the rebate reconciliation process, our organization would lose the ability to provide the upfront financial support that many patients depend on. Wayne Community Health Centers, Inc. serves 4,539 patients, including 621 uninsured individuals, many of whom rely on discounted medication access to manage chronic conditions such as diabetes, cardiovascular disease, and respiratory illness. Without the ability to apply immediate discounts at the pharmacy counter, patients may be forced to delay filling prescriptions or ration medications, which increases the risk of preventable complications and hospitalizations. 17 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wayne Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Wayne Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $95,996. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wayne Community Health Centers Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $69,764. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to rely on a combination of limited financial reserves and external financing to maintain medication inventory. Based on current purchasing projections, Wayne Community Health Centers, Inc. would be able to self-finance approximately one month of drug expenditure, estimated at $69,764. However, the remaining two months of medication purchases approximately $139,528would need to be financed through a line of credit until rebate payments are received. 18 Assuming an interest rate of 8% and a repayment cycle occurring every fourth month, the interest costs associated with financing these drug purchases are estimated to total approximately $8,372 annually. While this amount may appear modest in isolation, these funds represent resources that are currently dedicated to patient care programs within our health center, including medication affordability initiatives, care coordination services, and outreach programs designed to support vulnerable populations in our rural service area. Requiring safety-net providers to incur additional financing costs simply to access statutory 340B pricing undermines the fundamental purpose of the programto stretch scarce federal resources and expand access to care for medically underserved communities. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Wayne Community Health Centers Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. C. Financial Impact of Rebate Denials and Delays Wayne Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.12 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $41,859. A more realistic figure based on our current denial rate with the MFP rebates is 42%, this would equate to a loss of $351,612 per year. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge 12 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 19 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 20 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety- net providers that the 340B program was designed to support. 21 VII. Evidence of Existing Rebate System Failures Wayne Community Health Centers, Inc. has already experienced operational failures related to the reconciliation of rebates under the Medicare Maximum Fair Price (MFP) program, which illustrates the risks inherent in implementing a rebate-based pricing structure for the 340B program. Our experience demonstrates that rebate reconciliation systems can produce incorrect claim determinations, delayed payments, and significant administrative burdens, all of which create financial uncertainty for safety-net providers operating on narrow margins. Examples of issues our organization has encountered include: Non-340B claims purchased at Wholesale Acquisition Cost (WAC) being incorrectly identified by manufacturers as 340B claims during the reconciliation process. Manufacturer denial of rebate payments based on incorrect classification of claims despite the absence of any 340B identifiers or submission of 340B-related billing codes. Requests from manufacturers to submit additional 340B transaction data through third- party platforms, even though no statutory or regulatory requirement exists for covered entities to provide such information. Delays in resolving rebate disputes, due in part to reliance on reconciliation systems operated by manufacturers or their vendors rather than neutral entities. These real-world operational challenges demonstrate that rebate reconciliation systems are already producing inaccurate determinations and payment delays in existing federal pricing programs. Expanding this model to the broader 340B purchasing framework would significantly increase financial risk for covered entities. For rural Community Health Centers such as Wayne Community Health Centers, Inc., even small delays or inaccuracies in rebate payments can have meaningful consequences for cash flow, medication purchasing decisions, and patient access to essential therapies. A rebate model effectively shifts the financial risk of manufacturer pricing compliance onto safety-net providers that lack the capital reserves to absorb these disruptions. Our experience with current rebate reconciliation processes illustrates that the administrative and financial risks associated with a rebate-based system are not theoreticalthey are already occurring in practice. Expanding this model to the entire 340B program would magnify these risks and further destabilize providers serving medically underserved communities. 22 VIII. Program Integrity Risks Created by Manufacturer-Controlled Rebate Systems A fundamental concern with the proposed rebate-based pricing model is that it places the authority to determine whether a covered entity receives its statutory 340B savings directly in the hands of drug manufacturers. Under a rebate structure, manufacturers effectively become the sole arbiters of rebate eligibility, claim validation, and payment approval. This creates a system in which the entity responsible for paying the rebate is also responsible for determining whether the rebate should be paid. This structure introduces an inherent conflict of interest. Covered entities would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and then rely on manufacturers to later determine whether the entity is eligible to receive the rebate necessary to reach the statutory 340B ceiling price. In practice, this creates a situation where manufacturers function as the validator, adjudicator, and payer of rebate claims, without an independent oversight or clearing mechanism to ensure consistent and transparent determinations. Our experience with the Medicare Maximum Fair Price (MFP) reconciliation process demonstrates the operational risks associated with this model. In multiple instances, manufacturers or their vendor platforms have incorrectly classified claims, denied rebates without sufficient documentation, or required additional data submissions that are not supported by statutory requirements. These situations have created delays and uncertainty in receiving funds that safety- net providers rely upon to maintain medication affordability programs. When these determinations occur within a system controlled by manufacturers, covered entities are left with limited visibility into the decision-making process and few clear avenues for timely dispute resolution. For organizations operating with limited financial reserves, delays or incorrect determinations can result in significant cash flow disruptions. The proposed rebate model therefore creates a structural program integrity risk, as it shifts financial risk and operational burden to covered entities while allowing manufacturers broad discretion over the release of funds that represent statutory pricing protections. For rural Community Health Centers such as Wayne Community Health Centers, Inc., this type of financial uncertainty threatens the stability of the safety-net infrastructure that the 340B program was designed to support. Any rebate-based model must include strong safeguards, including standardized validation criteria, transparent claim documentation requirements, independent oversight mechanisms, and enforceable timelines for payment. Without these protections, the rebate model risks undermining the fundamental purpose of the 340B programto ensure that safety-net providers can stretch scarce federal resources and expand access to care for medically underserved populations. 23 Conclusion Wayne Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wayne Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Wayne Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact us. Sincerely, Donavan Smith, RPH Chief Executive Officer Zackery Taylor, PharmD/MBA Chief Pharmacy Officer April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wayne Community Health Centers Inc., I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a comprehensive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Impact Statement If implemented, the proposed 340B Rebate Model Pilot would require Wayne Community Health Centers, Inc. to increase its upfront drug purchasing capital by more than 74-foldfrom $10,994 to $837,172 annuallywhile adding over $1 million in total costs and reducing our ability to provide affordable medications to 4,539 rural patients we serve, including 621 uninsured individuals. Executive Summary Operational and Patient Access Implications of the Proposed 340B Rebate Model Pilot Program Wayne Community Health Centers, Inc. submits this comment to highlight the significant operational, financial, and patient care risks associated with the proposed 340B Rebate Model Pilot Program. As a frontier rural Community Health Center serving medically underserved populations, our organization relies heavily on the 340B Drug Pricing Program to maintain medication affordability and sustain essential healthcare services. The proposed rebate model represents a fundamental shift from the longstanding structure of the 340B program. Instead of purchasing medications at the statutory 340B ceiling price, covered entities would be required to purchase medications at Wholesale Acquisition Cost (WAC) and wait for manufacturers to issue a rebate after the medication has been dispensed. For rural Community Health Centers operating on limited financial reserves, this model creates significant financial exposure and introduces operational risks that could directly affect patient access to care. Key Findings 1. The rebate model would create a dramatic increase in required drug purchasing capital. Wayne Community Health Centers, Inc. estimates that purchasing the drugs included in the proposed pilot at WAC pricing would increase our upfront drug purchasing costs from $10,994 to $837,172 annually, representing a 74-fold increase in required capital to maintain medication inventory. For a rural Community Health Center operating with limited cash reserves, absorbing this level of upfront financial exposure is not operationally feasible. 2. The rebate model would create over $1 million in additional operational costs. Our analysis projects that implementing the rebate model would increase our operational costs by approximately $1,054,290 annually, driven by: Additional staffing required to manage rebate submissions and reconciliation. New IT infrastructure and software integrations Third-party vendor and administrative compliance costs Ongoing manual monitoring and dispute resolution processes These are administrative expenses that provide no direct patient care benefit but would be required solely to comply with the operational structure of the rebate model. 3. Patient access to medications would be directly impacted. Wayne Community Health Centers, Inc. currently serves 4,539 patients, including 621 uninsured individuals who rely heavily on the affordability created through the 340B program. Our organization conducts approximately 28,469 annual 340B transactions, enabling patients to obtain essential medications for chronic conditions such as: Diabetes Cardiovascular disease Chronic kidney disease Behavioral health conditions The rebate model removes the upfront 340B savings that currently allow Community Health Centers to provide immediate medication discounts at the point of sale. Without those savings available at the time of dispensing, patients may face increased medication costs, delays in treatment, or loss of access to essential therapies. 4. The rebate model would reduce healthcare workforce capacity in rural communities. The financial pressures associated with the rebate model would force Wayne Community Health Centers, Inc. to delay or eliminate hiring for several essential clinical positions, including: 1 full-time dentist 2 pharmacy technicians Potentially 1 pharmacist 2 medical providers 1 social worker In rural healthcare settings where provider shortages are already severe, these workforce reductions would significantly reduce access to primary care, dental services, pharmacy support, and behavioral health services. 5. Existing federal rebate systems already demonstrate operational failure risks. Wayne Community Health Centers, Inc. has already experienced operational challenges related to rebate reconciliation under the Medicare Maximum Fair Price (MFP) program, including: Incorrect classification of non-340B claims as 340B claims. Manufacturer denial of rebates despite the absence of 340B identifiers Requests for additional data submissions not required by statute. Delays in resolving rebate disputes through manufacturer-controlled reconciliation systems. These experiences demonstrate that rebate systems can introduce significant administrative complexity, inaccurate claim determinations, and delayed payments, all of which create financial instability for safety-net providers. Expanding this model to the broader 340B program would significantly magnify these risks. Policy Recommendation Given the financial, operational, and patient care risks described in this submission, Wayne Community Health Centers, Inc. strongly urges HRSA to exempt Community Health Centers from participation in the 340B Rebate Model Pilot Program. If HRSA proceeds with a rebate-based model, the agency should implement strong safeguards, including: Uniform national rebate submission standards Transparent claim validation criteria Enforceable timelines for manufacturer rebate payments Independent oversight of rebate determinations A neutral national clearinghouse to prevent duplicate discounts without shifting financial risk to covered entities. Without these protections, the proposed rebate model risks undermining the core purpose of the 340B program: to allow safety-net providers to stretch scarce federal resources and expand access to care for medically underserved populations. Detailed Comments and Analysis of the Proposed 340B Rebate Model Pilot Program The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Wayne Community Health Centers Inc. anticipates an annual loss of $92,652 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Wayne Community Health Centers Inc. expects that our operational costs will increase $1,054,290 annually just to manage the pilot. This results in a 74-fold increase in upfront inventory spending from the $10,994 we currently spend, decimating our cash on hand. This amount reflects 42% of our grant funding. Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to maintain our basic services. These savings are passed directly onto our sliding scale patients which receive millions of dollars of medications per year at our cost. The rebate pilot will directly affect these patients. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Wayne Community Health Center in particular, this would have direct operational consequences for the patients and communities we serve as shown: Patient Population and 340B Utilization Wayne Community Health Centers, Inc. conducts 28,469 340B transactions annually in support of patient care and medication access. Our organization currently serves 4,539 patients across our frontier rural service area. Of these patients, 621 individuals are uninsured, representing approximately 13.7% of our total patient population. These uninsured patients rely heavily on the affordability made possible by the 340B program to access essential medications. In addition to directly supporting uninsured patients, the financial stability created through the 340B program allows our organization to operate an outreach and enrollment program that assists patients in obtaining health insurance coverage. Through these efforts, an estimated 21% of our patient population has been successfully enrolled in insurance coverage who otherwise would have remained uninsured. This demonstrates that the 340B program not only provides direct medication affordability but also strengthens broader healthcare access by supporting enrollment initiatives that connect patients to long-term coverage. Current Administrative Costs of 340B Compliance Wayne Community Health Centers, Inc. already dedicates significant resources to maintaining compliance with the 340B program. Our current administrative costs for the program total approximately $2,720 per week, which reflects the work of one full-time equivalent (FTE) staff member working 40 hours per week to manage and maintain program operations. On an annual basis, this represents approximately $141,440 in administrative costs dedicated solely to 340B program oversight. These resources are necessary to ensure proper compliance with federal program requirements, maintain accurate purchasing and dispensing records, and conduct ongoing internal monitoring and reconciliation activities. The proposed rebate model would dramatically increase these administrative requirements. Instead of operating within a single standardized purchasing framework, our organization would need to implement complex rebate submission, reconciliation, and dispute processes across multiple manufacturer platforms. This would require additional staffing, new IT infrastructure, and significantly expanded administrative oversight. Use of 340B Savings to Support Patient Care Revenue generated through the 340B program is reinvested directly into our Community Health Center to enhance patient care and expand access to essential services. Specifically, 340B savings support: Medication affordability programs, allowing us to provide reduced-cost or non-cost prescriptions to eligible patients Access to medications for uninsured patients who would otherwise be unable to afford treatment Clinical services for underserved populations, including patients with chronic diseases such as diabetes, cardiovascular disease, and behavioral health conditions Care coordination and patient assistance programs that help patients navigate complex treatment regimens and medication access challenges Operational support for services that are not fully reimbursed by payers, allowing us to maintain essential healthcare services in a frontier rural environment These reinvestments ensure that Wayne Community Health Centers, Inc. can continue to deliver comprehensive, high-quality care to vulnerable populations within our community. If the rebate model disrupts the financial stability of the 340B program, the resources currently used to support these services would be significantly reduced. This would directly affect our ability to maintain medication affordability programs, sustain outreach and enrollment services, and continue providing comprehensive care to underserved patients across our rural service area. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Wayne Community Health Center will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already-strained operational capabilities. Sliding Fee Discount: Wayne Community Health Center provided $1,304,428 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wayne Community Health Center anticipates needing 0.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wayne Community Health Center anticipates an increase of $47,541 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Based on our current 340B program volume and administrative structure, Wayne Community Health Centers, Inc. estimates that implementation of a rebate-based pilot model would require additional staffing resources to ensure accurate claim processing, regulatory compliance, and financial oversight. At present, our 340B program is supported by approximately 0.751.0 full-time equivalent (FTE) dedicated to program administration. These responsibilities include inventory oversight, purchasing compliance, internal auditing, and coordination with pharmacy and billing systems. Under a rebate-based model, we anticipate the need for an additional 0.751.0 FTE to manage the expanded operational complexity associated with rebate submission and reconciliation processes. These additional responsibilities would include: Claim-level tracking of eligible prescriptions. Submission of rebate requests across manufacturer platforms Reconciliation of manufacturer rebate payments Monitoring and resolution of denied or delayed rebate claim Expanded compliance documentation and audit preparation. Coordination between pharmacy, billing, and financial systems to validate rebate eligibility. This additional staffing would support both administrative and pharmacy-related functions, including prescription validation, data management, billing coordination, and resolution of claim discrepancies. Based on current staffing costs, the additional personnel required to administer a rebate-based system would increase administrative expenses by approximately $106,080 to $141,440 annually. These additional costs represent new administrative expenses that provide no direct patient care benefit but would be required solely to manage the operational complexities created by the proposed rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Wayne Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $21,152 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 4,539 patients, the total projected increase in expenses-including labor, IT, and carrying costsis estimated at $1,054,290 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Implementation of a rebate-based 340B pilot model will require direct and sustained integration between our Electronic Health Record (EHR), eClinicalWorks, and our pharmacy management system, PioneerRx, with a new and complex rebate processing infrastructure. Unlike the current front-end discount model, a rebate system depends on accurate, real-time data exchange across multiple platforms to validate eligible prescriptions, capture dispensing data, and support timely rebate submissions. This will necessitate building and maintaining interfaces that can securely transmit detailed patient, encounter, and prescription-level data between eClinicalWorks and PioneerRx, and subsequently to the rebate administrator or manufacturer platforms. In addition, both systems will need to support enhanced data mapping, claim-level tracking, and reconciliation processes to ensure that all eligible transactions are identified and submitted correctly. This includes aligning clinical encounter data from eClinicalWorks with dispensing and billing data in PioneerRx, as well as implementing workflows to flag discrepancies, managing denials, and supporting audit readiness. The complexity of this integration will require ongoing oversight, system configuration, and coordination between clinical, pharmacy, and administrative teams. Ensuring interoperability, data accuracy, and compliance across these platforms is critical to successfully operationalizing the rebate model while minimizing financial risk and maintaining continuity of patient care. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. An estimated additional $23,756 will need to be spent. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate-based model also introduces significant uncertainty regarding our ability to consistently apply sliding-fee discounts at the point of sale. As a Community Health Center, Wayne Community Health Centers, Inc. is required to provide discounts for all in-scope services in accordance with HRSA regulations, and prescription medications are a critical component of that commitment. Wayne Community Health Centers, Inc. utilizes the savings generated through the 340B program to ensure prescription medications remain affordable and accessible for our patients, particularly those who are uninsured or underinsured. Consistent with federal Health Center Program requirements, our organization operates a sliding fee discount program that reduces the cost of medications based on each patients income and household size. Under this program, eligible patients receive reduced-cost prescriptions, with the lowest-income patients paying only a nominal fee and, in some cases, receiving medications at no cost. For uninsured patients, we further reduce financial barriers by offering deeply discounted pricing on essential medications and by leveraging manufacturer patient assistance programs when available. These programs are essential to ensuring that patients in our rural service area can obtain the medications necessary to manage chronic conditions and maintain their health. This approach allows our pharmacies to provide immediate, predictable pricing at the point of sale, ensuring that patients can access needed medications without delay. However, under a rebate-based modelwhere savings are realized only after the medication has been dispensedwe would face significant challenges in maintaining this upfront discount structure. Because the rebate model requires covered entities to purchase medications at Wholesale Acquisition Cost (WAC) and wait for reimbursement, the real-time financial savings that currently support our sliding fee discount program would no longer be available at the point of purchase. The absence of these upfront savings would create operational and financial uncertainty when determining the appropriate discount to apply for patients at the pharmacy counter. As a result, the rebate model could limit our ability to provide the same level of reduced pricing that patients currently rely on. For many of the vulnerable patients we serveparticularly those who are uninsured or living at or below the federal poverty levelthis change could create significant barriers to medication access. Reduced affordability may lead to medication nonadherence, delays in treatment, and ultimately poorer health outcomes for the rural and underserved populations our health center is designed to serve. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $837,172 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $10,994 to purchase these same drugs at the 340B ceiling price. This represents a 74-fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wayne Community Health Centers Inc. anticipates needing to reduce: Operational Impacts on Services, Staffing, and Patient Access To offset the significant upfront cost increases associated with purchasing medications at Wholesale Acquisition Cost (WAC) under a rebate-based model, Wayne Community Health Centers, Inc. would be forced to make difficult operational decisions that directly affect patient access to care. Essential Clinical Services The financial pressures created by the rebate model would require our organization to reduce or delay investment in essential clinical services that support our rural patient population. Specifically, the increased cost of medication purchasing and rebate administration would force us to divert limited financial resources away from direct patient care services. As a result, programs that are essential to managing chronic disease and improving medication adherencesuch as medication therapy management services, care coordination activities, and outreach initiatives that help patients navigate treatment and access medicationswould be at risk of reduction or elimination. These services are particularly important in rural communities where access to healthcare providers and specialty care is already limited. Operating Hours In order to manage the financial strain created by increased drug acquisition costs and administrative burdens, Wayne Community Health Centers, Inc. may also be forced to reduce clinic operating hours. Reduced operating hours would most likely affect extended or flexible clinic times that many of our patients depend on. In our rural community, many patients work in agriculture, construction, and other labor-intensive industries where taking time off during traditional business hours can result in lost wages. Reductions in clinic availability would therefore create additional barriers for patients seeking timely care. Workforce and Staffing The administrative complexity introduced by a rebate-based model would require significant diversion of financial resources away from clinical staff and toward administrative compliance activities. Based on current projections, Wayne Community Health Centers, Inc. anticipates that the financial pressures created by the rebate model would prevent the organization from rehiring or filling several key clinical positions. These positions are critical to maintaining access to care in our community and include: 1 FTE Dentist 2 FTE Pharmacy Technicians Potentially 1 FTE Pharmacist 2 FTE Medical Providers 1 FTE Social Worker These positions represent essential components of our care delivery system. Failure to maintain these roles would directly reduce patient access to dental care, pharmacy services, primary care appointments, medication management support, and behavioral health services. Additionally, the need to allocate staffing resources toward rebate administration means that for every rebate coordinator or administrative role required to manage this pilot, our organization loses the ability to fund clinical staff who provide direct patient care. This shift in staffing priorities would ultimately increase patient wait times, reduce appointment availability, and limit access to critical health services. Patient Financial Assistance The rebate model also threatens our ability to provide medications at zero-pay or deeply discounted rates through our sliding fee discount program. Currently, 340B savings allows our organization to offer medications at reduced cost to eligible patients at the time of dispensing. However, under a rebate model, the financial savings associated with 340B pricing would not be realized until after the medication has already been dispensed and the rebate has been processed. If those funds are temporarily held by manufacturers during the rebate reconciliation process, our organization would lose the ability to provide the upfront financial support that many patients depend on. Wayne Community Health Centers, Inc. serves 4,539 patients, including 621 uninsured individuals, many of whom rely on discounted medication access to manage chronic conditions such as diabetes, cardiovascular disease, and respiratory illness. Without the ability to apply immediate discounts at the pharmacy counter, patients may be forced to delay filling prescriptions or ration medications, which increases the risk of preventable complications and hospitalizations. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wayne Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Wayne Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $95,996. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wayne Community Health Centers Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $69,764. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to rely on a combination of limited financial reserves and external financing to maintain medication inventory. Based on current purchasing projections, Wayne Community Health Centers, Inc. would be able to self-finance approximately one month of drug expenditure, estimated at $69,764. However, the remaining two months of medication purchasesapproximately $139,528would need to be financed through a line of credit until rebate payments are received. Assuming an interest rate of 8% and a repayment cycle occurring every fourth month, the interest costs associated with financing these drug purchases are estimated to total approximately $8,372 annually. While this amount may appear modest in isolation, these funds represent resources that are currently dedicated to patient care programs within our health center, including medication affordability initiatives, care coordination services, and outreach programs designed to support vulnerable populations in our rural service area. Requiring safety-net providers to incur additional financing costs simply to access statutory 340B pricing undermines the fundamental purpose of the programto stretch scarce federal resources and expand access to care for medically underserved communities. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Wayne Community Health Centers Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Wayne Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $41,859. A more realistic figure based on our current denial rate with the MFP rebates is 42%, this would equate to a loss of $351,612 per year. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Evidence of Existing Rebate System Failures Wayne Community Health Centers, Inc. has already experienced operational failures related to the reconciliation of rebates under the Medicare Maximum Fair Price (MFP) program, which illustrates the risks inherent in implementing a rebate-based pricing structure for the 340B program. Our experience demonstrates that rebate reconciliation systems can produce incorrect claim determinations, delayed payments, and significant administrative burdens, all of which create financial uncertainty for safety-net providers operating on narrow margins. Examples of issues our organization has encountered include: Non-340B claims purchased at Wholesale Acquisition Cost (WAC) being incorrectly identified by manufacturers as 340B claims during the reconciliation process. Manufacturer denial of rebate payments based on incorrect classification of claims despite the absence of any 340B identifiers or submission of 340B-related billing codes. Requests from manufacturers to submit additional 340B transaction data through third-party platforms, even though no statutory or regulatory requirement exists for covered entities to provide such information. Delays in resolving rebate disputes, due in part to reliance on reconciliation systems operated by manufacturers or their vendors rather than neutral entities. These real-world operational challenges demonstrate that rebate reconciliation systems are already producing inaccurate determinations and payment delays in existing federal pricing programs. Expanding this model to the broader 340B purchasing framework would significantly increase financial risk for covered entities. For rural Community Health Centers such as Wayne Community Health Centers, Inc., even small delays or inaccuracies in rebate payments can have meaningful consequences for cash flow, medication purchasing decisions, and patient access to essential therapies. A rebate model effectively shifts the financial risk of manufacturer pricing compliance onto safety-net providers that lack the capital reserves to absorb these disruptions. Our experience with current rebate reconciliation processes illustrates that the administrative and financial risks associated with a rebate-based system are not theoreticalthey are already occurring in practice. Expanding this model to the entire 340B program would magnify these risks and further destabilize providers serving medically underserved communities. Program Integrity Risks Created by Manufacturer-Controlled Rebate Systems A fundamental concern with the proposed rebate-based pricing model is that it places the authority to determine whether a covered entity receives its statutory 340B savings directly in the hands of drug manufacturers. Under a rebate structure, manufacturers effectively become the sole arbiters of rebate eligibility, claim validation, and payment approval. This creates a system in which the entity responsible for paying the rebate is also responsible for determining whether the rebate should be paid. This structure introduces an inherent conflict of interest. Covered entities would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and then rely on manufacturers to later determine whether the entity is eligible to receive the rebate necessary to reach the statutory 340B ceiling price. In practice, this creates a situation where manufacturers function as the validator, adjudicator, and payer of rebate claims, without an independent oversight or clearing mechanism to ensure consistent and transparent determinations. Our experience with the Medicare Maximum Fair Price (MFP) reconciliation process demonstrates the operational risks associated with this model. In multiple instances, manufacturers or their vendor platforms have incorrectly classified claims, denied rebates without sufficient documentation, or required additional data submissions that are not supported by statutory requirements. These situations have created delays and uncertainty in receiving funds that safety-net providers rely upon to maintain medication affordability programs. When these determinations occur within a system controlled by manufacturers, covered entities are left with limited visibility into the decision-making process and few clear avenues for timely dispute resolution. For organizations operating with limited financial reserves, delays or incorrect determinations can result in significant cash flow disruptions. The proposed rebate model therefore creates a structural program integrity risk, as it shifts financial risk and operational burden to covered entities while allowing manufacturers broad discretion over the release of funds that represent statutory pricing protections. For rural Community Health Centers such as Wayne Community Health Centers, Inc., this type of financial uncertainty threatens the stability of the safety-net infrastructure that the 340B program was designed to support. Any rebate-based model must include strong safeguards, including standardized validation criteria, transparent claim documentation requirements, independent oversight mechanisms, and enforceable timelines for payment. Without these protections, the rebate model risks undermining the fundamental purpose of the 340B programto ensure that safety-net providers can stretch scarce federal resources and expand access to care for medically underserved populations. Conclusion Wayne Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wayne Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Wayne Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Donavan Smith at dsmith@waynechc.org or Zack Taylor at ztaylor@waynechc.org. Sincerely, Donavan Smith, RPH Chief Executive Officer Zackery Taylor, PharmD/MBA Chief Pharmacy Officer April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wayne Community Health Centers Inc., I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a comprehensive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Impact Statement If implemented, the proposed 340B Rebate Model Pilot would require Wayne Community Health Centers, Inc. to increase its upfront drug purchasing capital by more than 74-fold from $10,994 to $837,172 annuallywhile adding over $1 million in total costs and reducing our ability to provide affordable medications to 4,539 rural patients we serve, including 621 uninsured individuals. Executive Summary Operational and Patient Access Implications of the Proposed 340B Rebate Model Pilot Program Wayne Community Health Centers, Inc. submits this comment to highlight the significant operational, financial, and patient care risks associated with the proposed 340B Rebate Model Pilot Program. As a frontier rural Community Health Center serving medically underserved populations, our organization relies heavily on the 340B Drug Pricing Program to maintain medication affordability and sustain essential healthcare services. The proposed rebate model represents a fundamental shift from the longstanding structure of the 340B program. Instead of purchasing medications at the statutory 340B ceiling price, covered entities would be required to purchase medications at Wholesale Acquisition Cost (WAC) and wait for manufacturers to issue a rebate after the medication has been dispensed. For rural Community Health Centers operating on limited financial reserves, this model creates significant financial exposure and introduces operational risks that could directly affect patient access to care. 2 Key Findings 1. The rebate model would create a dramatic increase in required drug purchasing capital. Wayne Community Health Centers, Inc. estimates that purchasing the drugs included in the proposed pilot at WAC pricing would increase our upfront drug purchasing costs from $10,994 to $837,172 annually, representing a 74-fold increase in required capital to maintain medication inventory. For a rural Community Health Center operating with limited cash reserves, absorbing this level of upfront financial exposure is not operationally feasible. 2. The rebate model would create over $1 million in additional operational costs. Our analysis projects that implementing the rebate model would increase our operational costs by approximately $1,054,290 annually, driven by: Additional staffing required to manage rebate submissions and reconciliation. New IT infrastructure and software integrations Third-party vendor and administrative compliance costs Ongoing manual monitoring and dispute resolution processes These are administrative expenses that provide no direct patient care benefit but would be required solely to comply with the operational structure of the rebate model. 3. Patient access to medications would be directly impacted. Wayne Community Health Centers, Inc. currently serves 4,539 patients, including 621 uninsured individuals who rely heavily on the affordability created through the 340B program. Our organization conducts approximately 28,469 annual 340B transactions, enabling patients to obtain essential medications for chronic conditions such as: Diabetes Cardiovascular disease Chronic kidney disease Behavioral health conditions The rebate model removes the upfront 340B savings that currently allow Community Health Centers to provide immediate medication discounts at the point of sale. Without those savings available at the time of dispensing, patients may face increased medication costs, delays in treatment, or loss of access to essential therapies. 3 4. The rebate model would reduce healthcare workforce capacity in rural communities. The financial pressures associated with the rebate model would force Wayne Community Health Centers, Inc. to delay or eliminate hiring for several essential clinical positions, including: 1 full-time dentist 2 pharmacy technicians Potentially 1 pharmacist 2 medical providers 1 social worker In rural healthcare settings where provider shortages are already severe, these workforce reductions would significantly reduce access to primary care, dental services, pharmacy support, and behavioral health services. 5. Existing federal rebate systems already demonstrate operational failure risks. Wayne Community Health Centers, Inc. has already experienced operational challenges related to rebate reconciliation under the Medicare Maximum Fair Price (MFP) program, including: Incorrect classification of non-340B claims as 340B claims. Manufacturer denial of rebates despite the absence of 340B identifiers Requests for additional data submissions not required by statute. Delays in resolving rebate disputes through manufacturer-controlled reconciliation systems. These experiences demonstrate that rebate systems can introduce significant administrative complexity, inaccurate claim determinations, and delayed payments, all of which create financial instability for safety-net providers. Expanding this model to the broader 340B program would significantly magnify these risks. Policy Recommendation Given the financial, operational, and patient care risks described in this submission, Wayne Community Health Centers, Inc. strongly urges HRSA to exempt Community Health Centers from participation in the 340B Rebate Model Pilot Program. If HRSA proceeds with a rebate-based model, the agency should implement strong safeguards, including: Uniform national rebate submission standards Transparent claim validation criteria Enforceable timelines for manufacturer rebate payments Independent oversight of rebate determinations A neutral national clearinghouse to prevent duplicate discounts without shifting financial risk to covered entities. 4 Without these protections, the proposed rebate model risks undermining the core purpose of the 340B program: to allow safety-net providers to stretch scarce federal resources and expand access to care for medically underserved populations. Detailed Comments and Analysis of the Proposed 340B Rebate Model Pilot Program The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Wayne Community Health Centers Inc. anticipates an annual loss of $92,652 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: Wayne Community Health Centers Inc. expects that our operational costs will increase $1,054,290 annually just to manage the pilot. o This results in a 74-fold increase in upfront inventory spending from the $10,994 we currently spend, decimating our cash on hand. o This amount reflects 42% of our grant funding. o Rural Health Center: Our rural CHC is heavily dependent on 340B savings and uses these to maintain our basic services. i. These savings are passed directly onto our sliding scale patients which receive millions of dollars of medications per year at our cost. The rebate pilot will directly affect these patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Wayne Community Health Center in particular, this would have direct operational consequences for the patients and communities we serve as shown: 5 Patient Population and 340B Utilization Wayne Community Health Centers, Inc. conducts 28,469 340B transactions annually in support of patient care and medication access. Our organization currently serves 4,539 patients across our frontier rural service area. Of these patients, 621 individuals are uninsured, representing approximately 13.7% of our total patient population. These uninsured patients rely heavily on the affordability made possible by the 340B program to access essential medications. In addition to directly supporting uninsured patients, the financial stability created through the 340B program allows our organization to operate an outreach and enrollment program that assists patients in obtaining health insurance coverage. Through these efforts, an estimated 21% of our patient population has been successfully enrolled in insurance coverage who otherwise would have remained uninsured. This demonstrates that the 340B program not only provides direct medication affordability but also strengthens broader healthcare access by supporting enrollment initiatives that connect patients to long-term coverage. Current Administrative Costs of 340B Compliance Wayne Community Health Centers, Inc. already dedicates significant resources to maintaining compliance with the 340B program. Our current administrative costs for the program total approximately $2,720 per week, which reflects the work of one full-time equivalent (FTE) staff member working 40 hours per week to manage and maintain program operations. On an annual basis, this represents approximately $141,440 in administrative costs dedicated solely to 340B program oversight. These resources are necessary to ensure proper compliance with federal program requirements, maintain accurate purchasing and dispensing records, and conduct ongoing internal monitoring and reconciliation activities. The proposed rebate model would dramatically increase these administrative requirements. Instead of operating within a single standardized purchasing framework, our organization would need to implement complex rebate submission, reconciliation, and dispute processes across multiple manufacturer platforms. This would require additional staffing, new IT infrastructure, and significantly expanded administrative oversight. Use of 340B Savings to Support Patient Care Revenue generated through the 340B program is reinvested directly into our Community Health Center to enhance patient care and expand access to essential services. Specifically, 340B savings support: Medication affordability programs, allowing us to provide reduced-cost or non-cost prescriptions to eligible patients 6 Access to medications for uninsured patients who would otherwise be unable to afford treatment Clinical services for underserved populations, including patients with chronic diseases such as diabetes, cardiovascular disease, and behavioral health conditions Care coordination and patient assistance programs that help patients navigate complex treatment regimens and medication access challenges Operational support for services that are not fully reimbursed by payers, allowing us to maintain essential healthcare services in a frontier rural environment These reinvestments ensure that Wayne Community Health Centers, Inc. can continue to deliver comprehensive, high-quality care to vulnerable populations within our community. If the rebate model disrupts the financial stability of the 340B program, the resources currently used to support these services would be significantly reduced. This would directly affect our ability to maintain medication affordability programs, sustain outreach and enrollment services, and continue providing comprehensive care to underserved patients across our rural service area. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured1. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.2 This patient population relies on affordable medications to manage these long-term conditions. 1 https://data.hrsa.gov/topics/healthcenters/uds/overview/state/UT/table?tableName=9D 2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 7 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.4 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.5 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.6 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,7 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 3 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 6 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated with Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 7 2025 UDA Data, HRSA (hrsa.gov) 8 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Wayne Community Health Center will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already- strained operational capabilities. Sliding Fee Discount: Wayne Community Health Center provided $1,304,428 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wayne Community Health Center anticipates needing 0.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wayne Community Health Center anticipates an increase of $47,541 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 9 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Based on our current 340B program volume and administrative structure, Wayne Community Health Centers, Inc. estimates that implementation of a rebate-based pilot model would require additional staffing resources to ensure accurate claim processing, regulatory compliance, and financial oversight. At present, our 340B program is supported by approximately 0.751.0 full-time equivalent (FTE) dedicated to program administration. These responsibilities include inventory oversight, purchasing compliance, internal auditing, and coordination with pharmacy and billing systems. Under a rebate-based model, we anticipate the need for an additional 0.751.0 FTE to manage the expanded operational complexity associated with rebate submission and reconciliation processes. These additional responsibilities would include: Claim-level tracking of eligible prescriptions. Submission of rebate requests across manufacturer platforms Reconciliation of manufacturer rebate payments Monitoring and resolution of denied or delayed rebate claim Expanded compliance documentation and audit preparation. Coordination between pharmacy, billing, and financial systems to validate rebate eligibility. This additional staffing would support both administrative and pharmacy-related functions, including prescription validation, data management, billing coordination, and resolution of claim discrepancies. Based on current staffing costs, the additional personnel required to administer a rebate-based system would increase administrative expenses by approximately $106,080 to $141,440 annually. These additional costs represent new administrative expenses that provide no direct patient care benefit but would be required solely to manage the operational complexities created by the proposed rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and 10 operational burdens. If the rebate model is adopted, Wayne Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $21,152 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 4,539 patients, the total projected increase in expenses- including labor, IT, and carrying costsis estimated at $1,054,290 annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: We will need to directly integrate our Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Implementation of a rebate-based 340B pilot model will require direct and sustained integration between our Electronic Health Record (EHR), eClinicalWorks, and our pharmacy management system, PioneerRx, with a new and complex rebate processing infrastructure. Unlike the current front-end discount model, a rebate system depends on accurate, real-time data exchange across multiple platforms to validate eligible prescriptions, capture dispensing data, and support timely rebate submissions. This will necessitate building and maintaining interfaces that can securely transmit detailed patient, encounter, and prescription-level data between eClinicalWorks and PioneerRx, and subsequently to the rebate administrator or manufacturer platforms. In addition, both systems will need to support enhanced data mapping, claim-level tracking, and reconciliation processes to ensure that all eligible transactions are identified and submitted correctly. This includes aligning clinical encounter data from eClinicalWorks with dispensing and billing data in PioneerRx, as well as implementing workflows to flag discrepancies, managing denials, and supporting audit readiness. The complexity of this integration will require ongoing oversight, system configuration, and coordination between clinical, pharmacy, and administrative teams. Ensuring interoperability, data accuracy, and compliance across these platforms is critical to successfully operationalizing the rebate model while minimizing financial risk and maintaining continuity of patient care. 11 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. o An estimated additional $23,756 will need to be spent. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 8 Internal NACHC survey data 12 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate-based model also introduces significant uncertainty regarding our ability to consistently apply sliding-fee discounts at the point of sale. As a Community Health Center, Wayne Community Health Centers, Inc. is required to provide discounts for all in-scope services in accordance with HRSA regulations, and prescription medications are a critical component of that commitment. Wayne Community Health Centers, Inc. utilizes the savings generated through the 340B program to ensure prescription medications remain affordable and accessible for our patients, particularly those who are uninsured or underinsured. Consistent with federal Health Center Program requirements, our organization operates a sliding fee discount program that reduces the cost of medications based on each patients income and household size. Under this program, eligible patients receive reduced-cost prescriptions, with the lowest-income patients paying only a nominal fee and, in some cases, receiving medications at no cost. For uninsured patients, we further reduce financial barriers by offering deeply discounted pricing on essential medications and by leveraging manufacturer patient assistance programs when available. These programs are essential to ensuring that patients in our rural service area can obtain the medications necessary to manage chronic conditions and maintain their health. This approach allows our pharmacies to provide immediate, predictable pricing at the point of sale, ensuring that patients can access needed medications without delay. However, under a rebate- based modelwhere savings are realized only after the medication has been dispensedwe would face significant challenges in maintaining this upfront discount structure. Because the rebate model requires covered entities to purchase medications at Wholesale Acquisition Cost (WAC) and wait for reimbursement, the real-time financial savings that currently support our sliding fee discount program would no longer be available at the point of purchase. 13 The absence of these upfront savings would create operational and financial uncertainty when determining the appropriate discount to apply for patients at the pharmacy counter. As a result, the rebate model could limit our ability to provide the same level of reduced pricing that patients currently rely on. For many of the vulnerable patients we serveparticularly those who are uninsured or living at or below the federal poverty levelthis change could create significant barriers to medication access. Reduced affordability may lead to medication nonadherence, delays in treatment, and ultimately poorer health outcomes for the rural and underserved populations our health center is designed to serve. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).9 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 9https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B10 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.11 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $837,172 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $10,994 to purchase these same drugs at the 340B ceiling price. This represents a 74-fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wayne Community Health Centers Inc. anticipates needing to reduce: 10 https://340bpricing.hrsa.gov/ 11 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 15 Operational Impacts on Services, Staffing, and Patient Access To offset the significant upfront cost increases associated with purchasing medications at Wholesale Acquisition Cost (WAC) under a rebate-based model, Wayne Community Health Centers, Inc. would be forced to make difficult operational decisions that directly affect patient access to care. Essential Clinical Services The financial pressures created by the rebate model would require our organization to reduce or delay investment in essential clinical services that support our rural patient population. Specifically, the increased cost of medication purchasing and rebate administration would force us to divert limited financial resources away from direct patient care services. As a result, programs that are essential to managing chronic disease and improving medication adherencesuch as medication therapy management services, care coordination activities, and outreach initiatives that help patients navigate treatment and access medicationswould be at risk of reduction or elimination. These services are particularly important in rural communities where access to healthcare providers and specialty care is already limited. Operating Hours In order to manage the financial strain created by increased drug acquisition costs and administrative burdens, Wayne Community Health Centers, Inc. may also be forced to reduce clinic operating hours. Reduced operating hours would most likely affect extended or flexible clinic times that many of our patients depend on. In our rural community, many patients work in agriculture, construction, and other labor- intensive industries where taking time off during traditional business hours can result in lost wages. Reductions in clinic availability would therefore create additional barriers for patients seeking timely care. Workforce and Staffing The administrative complexity introduced by a rebate-based model would require significant diversion of financial resources away from clinical staff and toward administrative compliance activities. Based on current projections, Wayne Community Health Centers, Inc. anticipates that the financial pressures created by the rebate model would prevent the organization from rehiring or filling several key clinical positions. These positions are critical to maintaining access to care in our community and include: 16 o 1 FTE Dentist o 2 FTE Pharmacy Technicians o Potentially 1 FTE Pharmacist o 2 FTE Medical Providers o 1 FTE Social Worker These positions represent essential components of our care delivery system. Failure to maintain these roles would directly reduce patient access to dental care, pharmacy services, primary care appointments, medication management support, and behavioral health services. Additionally, the need to allocate staffing resources toward rebate administration means that for every rebate coordinator or administrative role required to manage this pilot, our organization loses the ability to fund clinical staff who provide direct patient care. This shift in staffing priorities would ultimately increase patient wait times, reduce appointment availability, and limit access to critical health services. Patient Financial Assistance The rebate model also threatens our ability to provide medications at zero-pay or deeply discounted rates through our sliding fee discount program. Currently, 340B savings allows our organization to offer medications at reduced cost to eligible patients at the time of dispensing. However, under a rebate model, the financial savings associated with 340B pricing would not be realized until after the medication has already been dispensed and the rebate has been processed. If those funds are temporarily held by manufacturers during the rebate reconciliation process, our organization would lose the ability to provide the upfront financial support that many patients depend on. Wayne Community Health Centers, Inc. serves 4,539 patients, including 621 uninsured individuals, many of whom rely on discounted medication access to manage chronic conditions such as diabetes, cardiovascular disease, and respiratory illness. Without the ability to apply immediate discounts at the pharmacy counter, patients may be forced to delay filling prescriptions or ration medications, which increases the risk of preventable complications and hospitalizations. 17 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wayne Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Wayne Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $95,996. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wayne Community Health Centers Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $69,764. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to rely on a combination of limited financial reserves and external financing to maintain medication inventory. Based on current purchasing projections, Wayne Community Health Centers, Inc. would be able to self-finance approximately one month of drug expenditure, estimated at $69,764. However, the remaining two months of medication purchases approximately $139,528would need to be financed through a line of credit until rebate payments are received. 18 Assuming an interest rate of 8% and a repayment cycle occurring every fourth month, the interest costs associated with financing these drug purchases are estimated to total approximately $8,372 annually. While this amount may appear modest in isolation, these funds represent resources that are currently dedicated to patient care programs within our health center, including medication affordability initiatives, care coordination services, and outreach programs designed to support vulnerable populations in our rural service area. Requiring safety-net providers to incur additional financing costs simply to access statutory 340B pricing undermines the fundamental purpose of the programto stretch scarce federal resources and expand access to care for medically underserved communities. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Wayne Community Health Centers Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. C. Financial Impact of Rebate Denials and Delays Wayne Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.12 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $41,859. A more realistic figure based on our current denial rate with the MFP rebates is 42%, this would equate to a loss of $351,612 per year. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge 12 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 19 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 20 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety- net providers that the 340B program was designed to support. 21 VII. Evidence of Existing Rebate System Failures Wayne Community Health Centers, Inc. has already experienced operational failures related to the reconciliation of rebates under the Medicare Maximum Fair Price (MFP) program, which illustrates the risks inherent in implementing a rebate-based pricing structure for the 340B program. Our experience demonstrates that rebate reconciliation systems can produce incorrect claim determinations, delayed payments, and significant administrative burdens, all of which create financial uncertainty for safety-net providers operating on narrow margins. Examples of issues our organization has encountered include: Non-340B claims purchased at Wholesale Acquisition Cost (WAC) being incorrectly identified by manufacturers as 340B claims during the reconciliation process. Manufacturer denial of rebate payments based on incorrect classification of claims despite the absence of any 340B identifiers or submission of 340B-related billing codes. Requests from manufacturers to submit additional 340B transaction data through third- party platforms, even though no statutory or regulatory requirement exists for covered entities to provide such information. Delays in resolving rebate disputes, due in part to reliance on reconciliation systems operated by manufacturers or their vendors rather than neutral entities. These real-world operational challenges demonstrate that rebate reconciliation systems are already producing inaccurate determinations and payment delays in existing federal pricing programs. Expanding this model to the broader 340B purchasing framework would significantly increase financial risk for covered entities. For rural Community Health Centers such as Wayne Community Health Centers, Inc., even small delays or inaccuracies in rebate payments can have meaningful consequences for cash flow, medication purchasing decisions, and patient access to essential therapies. A rebate model effectively shifts the financial risk of manufacturer pricing compliance onto safety-net providers that lack the capital reserves to absorb these disruptions. Our experience with current rebate reconciliation processes illustrates that the administrative and financial risks associated with a rebate-based system are not theoreticalthey are already occurring in practice. Expanding this model to the entire 340B program would magnify these risks and further destabilize providers serving medically underserved communities. 22 VIII. Program Integrity Risks Created by Manufacturer-Controlled Rebate Systems A fundamental concern with the proposed rebate-based pricing model is that it places the authority to determine whether a covered entity receives its statutory 340B savings directly in the hands of drug manufacturers. Under a rebate structure, manufacturers effectively become the sole arbiters of rebate eligibility, claim validation, and payment approval. This creates a system in which the entity responsible for paying the rebate is also responsible for determining whether the rebate should be paid. This structure introduces an inherent conflict of interest. Covered entities would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and then rely on manufacturers to later determine whether the entity is eligible to receive the rebate necessary to reach the statutory 340B ceiling price. In practice, this creates a situation where manufacturers function as the validator, adjudicator, and payer of rebate claims, without an independent oversight or clearing mechanism to ensure consistent and transparent determinations. Our experience with the Medicare Maximum Fair Price (MFP) reconciliation process demonstrates the operational risks associated with this model. In multiple instances, manufacturers or their vendor platforms have incorrectly classified claims, denied rebates without sufficient documentation, or required additional data submissions that are not supported by statutory requirements. These situations have created delays and uncertainty in receiving funds that safety- net providers rely upon to maintain medication affordability programs. When these determinations occur within a system controlled by manufacturers, covered entities are left with limited visibility into the decision-making process and few clear avenues for timely dispute resolution. For organizations operating with limited financial reserves, delays or incorrect determinations can result in significant cash flow disruptions. The proposed rebate model therefore creates a structural program integrity risk, as it shifts financial risk and operational burden to covered entities while allowing manufacturers broad discretion over the release of funds that represent statutory pricing protections. For rural Community Health Centers such as Wayne Community Health Centers, Inc., this type of financial uncertainty threatens the stability of the safety-net infrastructure that the 340B program was designed to support. Any rebate-based model must include strong safeguards, including standardized validation criteria, transparent claim documentation requirements, independent oversight mechanisms, and enforceable timelines for payment. Without these protections, the rebate model risks undermining the fundamental purpose of the 340B programto ensure that safety-net providers can stretch scarce federal resources and expand access to care for medically underserved populations. 23 Conclusion Wayne Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wayne Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Wayne Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Donavan Smith at dsmith@waynechc.org or Zack Taylor at ztaylor@waynechc.org. Sincerely, Donavan Smith, RPH Chief Executive Officer Zackery Taylor, PharmD/MBA Chief Pharmacy Officer
HRSA-2026-0001-1769Whole Family Health Center2026-04-19T04:00Z20,135 chars
See attached file(s) April 08, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) On behalf of Whole Family Health Center (WFHC), I would like to thank HRSA for the opportunity to submit comments and for granting an extension to complete this RFI. The 340B program is foundational to community health centers ability to serve the most vulnerable members of our communities. However, the proposed shift of responsibility from manufacturers to safety-net providers through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Since 2020, health centers have faced increasing challenges that undermine the original intent of the 340B program, to stretch scarce federal resources to serve vulnerable patients. Ongoing pressures, including manufacturer restrictions, ESP reporting requirements, the Inflation Reduction Act, and growing compliance and oversight demands, have already created significant administrative burden and financial strain. The proposed rebate model would further exacerbate these challenges. The 340B statute is clear in its intent: to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The emphasis on scarce resources reflects the narrow operating margins under which health centers function. Continued reductions in these resources directly limit our ability to expand access and enhance services. If these constraints persist or worsen, patients who rely on health centers may face reduced access to care, raising the critical question of where they will seek care instead. A 2024 Congressional Budget Office report found that community health centers generate substantial savings by reducing long-term Medicare and Medicaid spending, resulting in a net federal savings of $3.4 billion1. Access to primary and preventive care at health centers reduces reliance on higher-cost services such as emergency department visits, hospitalizations, and specialty care. Additionally, a recent study found that pediatric patients receiving care at health centers had 20% more primary care visits and 17% fewer hospitalizations compared to those receiving care elsewhere2. Limiting access to 340B resources shifts patients to more expensive care settings or leads to delayed care, both of which increase overall system costs. These concerns are particularly significant for Federally Qualified Health Center Look-Alikes (FQHC-LAs) like WFHC. While we serve similarly vulnerable populations, we do so without Section 330 grant funding and therefore rely heavily on alternative funding sources, particularly the 340B program. For WFHC, 340B savings are critical to sustaining operations, expanding access, and providing comprehensive services. Any reduction in these resources would have a direct and immediate impact on our ability to care for our patients. WFHC is an FQHC-LA that provides comprehensive services including adult and pediatric primary care, behavioral health, gynecology, infectious disease, pharmacy, social services, and transportation. We serve approximately 20,000 unique patients annually, with 80% of patients with known income at or below 200% of the Federal Poverty Level. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Imposing a rebate model on community health centers (CHCs) would weaken the very safety- net providers that more than 52 million Americans rely on for care. CHCs are required to offer sliding fee discounts to patients with incomes at or below 200% of the Federal Poverty Level (FPL). These same patients depend on CHCs not only for affordable medical services, but also for access to affordable medications. Without the upfront 340B discount, providing many of the drugs included in the proposed pilot would become operationally unfeasible. Rather than offering a solution, this model would introduce a significant new barrier for our most vulnerable patients (particularly those who are uninsured and have limited access to affordable care). Patients below 100% of the FPL are required to pay only a nominal fee for services, including prescriptions, at our health center. If the proposed rebate model removes the upfront discount, it would be financially unsustainable to continue charging nominal fees while absorbing, in some cases, costs exceeding a 35,900% markup, especially given the inevitability of denied or delayed rebate claims. As a result, the 340B rebate model poses a direct and serious threat to medication access for the vulnerable populations CHCs serve. For uninsured and underinsured patients who rely on the affordability enabled by the 340B program, this model could place essential medications entirely out of reach. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions commonly treated in primary care. These medications are widely utilized because they represent the standard of care based on clinical guidelines and evidence-based literature. While alternatives may exist in some cases, they are often clinically inferior, not first-line therapies, or associated with greater risks. For example, direct oral anticoagulants (DOACs), such as Xarelto and Eliquis, are essential for treating conditions including deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many patients, alternatives are limited and often less safe. These therapies are not optional; they are lifesaving. Evidence shows that discontinuation of anticoagulation therapy is associated with a statistically significant increase in the risk of stroke, myocardial infarction, and death3. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be substantial. These medications are a cornerstone of treatment for Type 2 diabetes, chronic kidney disease, and heart failure (conditions that are highly prevalent in our patient population). While lower-cost alternatives such as sulfonylureas exist, they lack the cardiovascular and renal benefits of SGLT2 inhibitors and are associated with increased risks, including weight gain and hypoglycemia. One study found that patients treated with sulfonylureas were more than four times as likely to require emergency department or hospital care for hypoglycemia compared to those treated with GLP-1 receptor agonists or SGLT2 inhibitors, with risk up to ten times higher in certain analyses4. Reduced access to these widely used, evidence-based therapies will not only diminish patients quality of life but will also drive higher overall healthcare costs due to preventable complications and increased hospitalizations. Finally, reductions in 340B savings impact more than medication access; they directly affect the scope of services CHCs can provide. According to 2024 UDS data, WFHCs total cost per patient is $2,363.41. The financial impact outlined above would significantly limit our ability to provide charity care and sustain essential services for our community. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: WFHC provided $1,041,422 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: WFHC anticipates the need for approximately one mid-level full-time employee (FTE) to manage the increased regulatory, operational, administrative, and compliance burden associated with a rebate model. The estimated annual cost for this position is approximately $150,000. Additionally, we estimate that at least 20 hours per week will be required to submit 340B rebate claims to third-party platforms, assuming alignment across the nine participating manufacturers. However, the lack of standardization and the likelihood of varying manufacturer requirements will require CHCs to utilize multiple internal systems to manage and report duplicative data, further increasing costs and administrative burden. External Vendor Costs: Given increased complexity, WFHC anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Pharmacy Software and Third-Party Administration Changes: Navigating this pilot will require more than additional staffing; it will necessitate significant modifications to pharmacy software and TPA workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: WFHC anticipates significant upfront costs related to modifying pharmacy systems, developing custom dashboards, and redesigning internal workflows. These efforts will also require substantial personnel time, including involvement from senior leadership, to establish processes and conduct staff training. We estimate that full implementation and stabilization of a rebate model would take a minimum of two quarters. The Burden of Deep IT Integration: WFHC anticipates the need for complex technological integrations across in-house pharmacies, clinic-administered medications, and contract pharmacies. Contract pharmacies are likely to pass on these additional costs to covered entities through increased fees or by restricting the capture of certain medications. These changes would further limit our ability to leverage 340B savings to expand access to care. WFHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Financial Challenges: Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors The lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. Based on WFHCs internal analysis, the financial impact is substantial. We estimate that purchasing the ten drugs included in the proposed model would cost approximately $2.5 million at WAC, compared to approximately $200,000 at the current 340B ceiling price. This represents a 1,150% increase in upfront capital required for procurement. This burden would grow further as additional drugs are incorporated under future Inflation Reduction Act (IRA) implementations. Such increases would severely limit our ability to maintain adequate inventory and ensure consistent access to essential medications. Some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. WFHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Conclusion Whole Family Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up- front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. WFHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. WFHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Edline Victor, PharmD at evictor@wfhcfl.org. Sincerely, Marie Andress Chief Executive Officer Edline Victor Director of Pharmacy Whole Family Health Center, Inc. References: 1. Congressional Budget Office. Cost Estimate: Bipartisan Primary Care and Health Workforce Act. Available at: https://www.cbo.gov/system/files/2024-02/s2840.pdf 2. Volerman A, et al. Utilization, quality, and spending for pediatric Medicaid enrollees with primary care in health centers vs. non-health centers. BMC Pediatrics. 2024;24(1):100. 3. Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. Journal of Thrombosis and Haemostasis. 2021;19(9):23222334. doi:10.1111/jth.15415 4. Risk of Severe Hypoglycemia After Initiation of Noninsulin Glucose-Lowering Agents. Available at: https://pmc.ncbi.nlm.nih.gov/articles/PMC11739335/
HRSA-2026-0001-1770ADAP Advocacy Association2026-04-19T04:00Z63,185 chars
On behalf of the ADAP Advocacy Association, thank you for the opportunity to submit comments regarding this critically important Request for Information on the proposed rebate model under the 340B Drug Pricing Program. A 340B rebate model is desperately needed, will restore an important measure of integrity to a program that has lost its way, and holds the promise of allowing patients, who generate $80 billion in profits for covered entities, to share meaningfully in the 340B price. We strongly support the rebate model and ask the Health Resources and Services Administration (HRSA) to broaden the transparency mechanisms inherent in the proposal to more fully encompass patients, the states, researchers, and others. Although we see some commentators offer speculation about the purported costs associated with a rebate model in terms of the carrying cost of a product purchased initially at a commercial price and the supposed administrative costs of collecting and submitting data as part of a rebate model, we urge HRSA to reject that speculation. We are pleased to submit our full comments. Mailing Address: ADAP Advocacy PO Box 846 Nags Head, NC 27959 Office Address: 1630 Connecticut Ave, NW Suite 500 Washington, DC 20009 CEO: Brandon M. Macsata Washington, D.C. Board of Directors: Co-Chair Guy Anthony Brooklyn, NY Co-Chair Wanda Brendle, Moss, R.N. Winston-Salem, NC Secretary Lisa Johnson-Lett Birmingham, AL Treasurer Robert Bobby L. Dorsey, Esq. La Plata, MD Erin Darling, Esq. Washington, DC Lyne Fortin, B.Pharm, MBA Montreal, Canada Maria Mejia Tamarac, FL Shabbir Imber Safdar San Francisco, CA Jennifer Vaughan Watsonville, CA Marcus A. Wilson Orlando, FL Directors Emeritus: Michelle Anderson William Arnold in memoriam John D. Kemp, Esq. Gary Rose in memoriam Joyce Turner Keller Rani Whitfield, M.D. adapadvocacy.org April 19, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Chantelle Britton Director, Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane Mail Stop 10W29 Rockville, MD 20857 Delivered via electronic mail RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042) Dear Administrator Engels and Director Britton: Thank you for the opportunity to submit comments regarding this critically important Request for Information on the proposed rebate model under the 340B Drug Pricing Program. A 340B rebate model is desperately needed, will restore an important measure of integrity to a program that has lost its way, and holds the promise of allowing patients, who generate $80 billion in profits for covered entities, to share meaningfully in the 340B price. We strongly support the rebate model and ask the Health Resources and Services Administration (HRSA) to broaden the transparency mechanisms inherent in the proposal to more fully encompass patients, the states, researchers, and others. Although we see some commentators offer speculation about the purported costs associated with a rebate model in terms of the carrying cost of a product purchased initially at a commercial price and the supposed administrative costs of collecting and submitting data as part of a rebate model, we urge HRSA to reject that speculation. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 2 2 Lacking any data basis, that speculation is contrary to the hard evidence established by the long and successful history of the State AIDS Drug Assistance Programs (ADAP) operating under the Ryan White HIV/AIDS Program, which have served as 340B Program-covered entities since the law was passed in 1992. The ADAP experience is also consistent with what has occurred under manufacturer-contract pharmacy policies and with any careful analysis of the known facts, data, and evidence.1 A. About ADAP Advocacy The ADAP Advocacy mission is to promote and enhance the AIDS Drug Assistance Programs (ADAPs) and improve access to care for persons living with HIV/AIDS. ADAP Advocacy works with advocates, community members, health care providers, government officials, patients, pharmaceutical companies, and other stakeholders to raise awareness, offer patient education programs, and foster greater community collaboration. ADAP Advocacy is the only national grassroots organization focused exclusively on ADAP and on ensuring adequate resources nationwide to eliminate or prevent waiting lists for services. Our purpose is to better engage people living with HIV/AIDS by providing a platform whereby they can offer their personal experiences, challenges, knowledge, insight, and solutions to solving this perpetual problem. ADAP Advocacy has worked tirelessly to ensure that PLWHA in the U.S. can access the medications they need to achieve and sustain viral suppression, and to advance the undetectable equals untransmittable (more commonly known as U equals U) principle. We are strong supporters of the 340B Program, a significant source of funding to ADAPs. ADAPs participate in the 340B Program through a claims-based rebate mechanism that provides the systems, data, and structure necessary to ensure the 340B Programs prohibitions on diversion and duplicate discounts are respected. The retrospective mechanism used by ADAPs is the gold standard, and our experience with that system informs our comments here. B. A Program that Has Lost Its Way Before discussing the rebate model, we'll share our perspective on why it is needed. Under the program as it currently exists, a relatively small number of 340B covered entitiesmainly 340B hospitalsreceive billions in subsidies that should, in turn, enable them to provide a reasonable level of charity care to the uninsured and underinsured, including at the pharmacy counter. Unfortunately, despite the explosive growth of the 340B Program, which now generates more than $80 billion in profits to covered entities annually, many 340B covered entities, particularly 340B hospitals, provide an abysmally low level of charity care, including to patients in need at the pharmacy counter. Too many covered entities have abused the 340B Program by maximizing their profits while reducing their charity care ratios. 1 We note that the HRSA and the Department of Justice have recently changed their position to oppose contract pharmacy state legislation. We very much support that change in position. We urge the government to contemplate a similar evolution in its position broadly with respect to rebates. For the reasons set out in our amicus brief in the 340B rebate litigation, we believe that the plain language of the 340B statute permits manufacturers to use rebate without the approval of HRSA. The government should endorse the ability of manufacturers to apply a rebate model broadly, without limiting that action to either a pre-approval or to a pilot. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 3 3 ADAP Advocacy is committed to ensuring that patients living with chronic health conditions and rare diseases in need, including PLWHA, receive direct benefit2s from the program's massive subsidies, as intended by Congress. Despite the billions made available to 340B-covered entities, there is disappointingly little evidence that those billions actually benefit patients by providing charity care, including assistance at the pharmacy counter. Indeed, there is hard evidence that billions in subsidies are diverted to third parties, like large, for-profit retail pharmacy chains and administrators, many of whom are affiliated with the pharmacy benefit managers that control much of health care.3 C. The Origins of the Program Some covered entities resist the notion that there should be a rebate model in general, or one that is patient-centric in particular, based on how they (mis)characterize the program's origins. Designed to help the uninsured and the underinsured by focusing on providers devoted to their direct care,4 the 340B Program has always been about the patient. The contention that the development of the 340B Program was only about the covered entities and not about the prices vulnerable patients were required to pay out of pocket is manifestly wrongand a perversion of the program and its origins. When Congress enacted the 340B Program, it referenced federally-funded clinics and public hospitals precisely because they serve large numbers of low-income and uninsured patients.5 Similarly, Congress spoke explicitly to the fact that, in permitting covered entities to access discounts, it was motivated to do so because those entities provide direct clinical care to large numbers of uninsured Americans.6 Indeed, the single line from the legislative history that 340B advocates cite as reflecting Congresss original intent says the same thing, when fully quoted. Though Congress referenced stretching ... resources, it did so specifically in a context that stressed the underlying purpose of better serv[ing] underinsured and underinsured patients.7 Those vulnerable patients are most directly impacted at the pharmacy counter, and that specific context was most affected by the Medicaid rebate programs unintended effect of lowering the cost of pharmaceuticals they use. In other words, Congress did not see a distinction between the covered entities and the needy patients they were expected to serve; one (the entities) was referred to because the needs of the other (the patient) were embedded in the first; they were viewed as two sides of the same coin. 2 See Nicole Longo, 340B Program Remains Second Largest Federal Drug Program, Yet Little Solid Evidence of Benefits to Patients, PhRMA (June 30, 2022), https://phrma.org/Blog/340b-program-remains-second-largest-federal-drug-program-yet-little-solid-evidence-of-benefits-to-patient. 3 Adam Fein, EXCLUSIVE: For 2023, Five For-Profit Retailers and Dominate an Evolving 340B Contract Pharmacy Market, Drug Channels (July 11, 2023), https://bit.ly/3ZH23yG (discussing the dominate[] positions of such sprawling for-profit pharmacy chains and PBMs, as CVS Health, Walgreens, Cigna, Express Scripts, UnitedHealth Group, OptumRx, and Walmart); W. Sarraille, A Look at Middleman Fees in the 340B Drug Discount Program, Law360 (Oct. 23, 2025) (quantifying third party middleman fees in excess of $10 billion a year), https://www.law360.com/articles/2416033/a-look-at-middlemen-fees-in-340b-drug-discount-program 4 See House Report 102-384, Pt. 2, at 10-12 (1983); see also 106 Stat. at 4962 (codified at 42 U.S.C. 1396r-8(c)(1)(C)). 5 House Report, at 1012 (1992) (emphasis added). 6 See House Report at 12 (emphasis added). 7 See Hearing Before the Subcommittee on Oversight and Investigations, Examining How Covered Entities Utilize the 340B Drug Pricing Program (Oct. 11, 2017) (emphasis added). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 4 4 But as the original intent has been twisted, some 340B special-interest trade associations claim that 340B-covered entities have no obligation under this statute to ever assist vulnerable patients at the pharmacy counter. Bizarrely, they say that Congress, in creating a drug discount program explicitly tied to the service of the underinsured and the uninsured, never intended that 340B covered entities should be expected to use some of the profits they generate on those needy drug patients. Though Congress certainly intended that covered entities would use 340B profits, as well, for other purposes that would benefit the uninsured and underinsured, the notion that a 340B covered entity could, consistent with the Congressional intent, never help needy drug patients with their medications is as ludicrous as it sounds. Sadly, HRSA has enabled that bizarre take on the statute. Consistent with HRSAs recent change in position on state contract pharmacy laws, the agency should review its position here as well. D. Facts and Figures Though covered-entity trade associations argue that a rebate model alters what they contend is the broad and expansive program of patient assistance they currently provide, that contention is belied by any review of the evidence. In 2010, when the Affordable Care Act8 (the ACA) was enacted, Congress also expanded the 340B Program. Those two steps were meant to work hand in glove to bring affordable health care to patients in need,9 including patients dependent on drug therapies who need assistance at the pharmacy counter.10 At that time, 340B covered entities made less than $6 billion in purchases under the program.11 Then, as now, a small fraction of the covered entities, 340B disproportionate hospitals (DSH), were the recipients of almost 80% of the subsidies generated by the program.12 Despite their often massive size, resources, and 340B subsidies, most DSH hospitals had charity care rates that failed to even meet the national average.13 The picture was no better for all 340B hospital types, whose charity care ratios were disappointingly low at 2.60%.14 For those who advocated for the ACA, including patient advocates like ADAP Advocacy, the expectation was that, with the program's expansion, covered entities, particularly 340B hospitals, would significantly increase their commitment to patients in need, including those at the pharmacy counter. That was a central part of Congresss plan to bring more affordable health care to the uninsured and the underinsured. 8 Public Law 111-148 (2010). 9 U.S. Department of Health and Human Services, About the Affordable Care Act, https://www.hhs.gov/healthcare/about-the-aca/index.html (ACA designed to [m]ake affordable health insurance available to more people). 10 Samuel Thomas, et al., The Unintended Consequences of the 340B Safety Net Drug Discount Program, Health Services Research, 2020 Mar. 1;55(2):153-156, https://pmc.ncbi.nlm.nih.gov/articles/PMC7080379/ (the 340B Drug Pricing Program was created, among other purposes, to increase access to outpatient medications for lowincome and uninsured patients). 11 Stuart Wright, Memorandum Report: Contract Pharmacy Arrangements in the 340B Program, OEI-05-13-00431, U.S. Department of Health and Human Services, Office of the Inspector General (Feb. 4, 2014) (finding a bit more than $7 billion in 340B sales in 2013, after the program had begun to expand following the passage of the ACA). 12 See Adam J. Fein, The 340B Program Climbed to $44 Billion in 2021With Hospitals Grabbing Most of the Money, Drug Channels (Aug. 15, 2022), https://www.drugchannels.net/2022/08/the-340b-program-climbed-to-44-billion.html. 13 AIR340B, Charity Care at 340B Hospitals is on a Downward Trend 2, 6 (Oct. 2023), https://bit.ly/4eicWep. 14 Pioneer Institute, Hospital Charity Care, available at https://pioneerinstitute.org/340babuse/hospital-charity-care/ (last visited Feb. 7, 2025) (2011 figures). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 5 5 But as 340B profits burgeoned after the ACA was implemented, the exact opposite happenedcharity care rates, already abysmally low, fell precipitously. Fifteen years after the ACA was enacted, the intervening years revealed a very sad tale of a program that exploded without any demonstration of a corresponding increase in the level of charity care received by the uninsured and underinsured patients There can be no legitimate dispute that the 340B Programs growth has been dramatic. By HRSAs own calculation, the program now involves $81 billion in heavily discounted purchases annually.15 That is at least 12.5 times the estimated program size in 2010. Those heavily discounted drugs now have a list price value of more than $157 billion, 16 a figure that likely understates, quite significantly, the true reimbursement value of the drugs.17 In other words, the 340B Program now generates on the order of $76 billion18 (or more) in annual profits above the acquisition price. Cruelly, even as vulnerable patients need for drug therapies enabled covered entities to increase their 340B profits by billions and billions of dollars, 340B hospitals not only failed to increase their percentage commitments to charity care but also dramatically decreased their charity care ratios. Even as the 340B Program expanded and expanded and expanded, providing billions more in subsidies, 340B hospitals charity care ratios plummeted. By 2022, the last year for which those charity care data are consistently available in aggregate, 340B hospital charity care had fallen to 2.15% from 2.60% in 2011. Though both percentages are shockingly low, the drop was a 20% reduction, even as 340B Program purchases increased by more than 1,000%.19 Those increased purchases created significant new opportunities to profit from the spread between the low acquisition prices and the reimbursement value of those drugs, but with no corresponding increase in charity care, including at the pharmacy counter. ADAP Advocacy has produced a 340B Map that delves into this disturbing problem.20 The map shows, for a wide cross-section of covered entities, including a number of 340B hospitals, growth in 340B revenues and, in many cases, a simultaneous fall in charity care ratios. Johns Hopkins University Hospital, for example, has seen a 329% increase in its 340B revenues, taking its total revenues over a billion dollars, while its charity care ratio has fallen by 21% in the same period. Sutter Valley Hospitals, one of the largest hospital systems in the country, has seen a 259% increase in 340B revenues, part of its total revenues that now exceed $16 billion annually, while its charity care ratio has fallen by 72%. Sutters chief executive officers compensation has increased 1,133%. 15 Adam Fein, The 340B Program Reached $66 Billion in 2023Up 23% vs. 2022: Analyzing the Numbers and HRSAs Curious Actions, Drug Channels (Oct. 22, 2024), https://bit.ly/4fhCnwP. 16 Rory Martin, et al., The 340B Drug Discount Program Grew to $124B in 2023. IQVIA (May 10, 2024), available at https://www.iqvia.com/locations/united- states/library/white-papers/the-340b-drug-discount-program-grew-to-$124b-in-2023 (last visited Feb. 7, 2025). 17 That is the case, in no small measure, because 340B hospitals mark up their drugs enormously in selling to commercial, employer, and Medicare payors. See Aimed Alliance, Study Finds 340B Hospitals Significantly Markup Infusion Drugs, available at https://aimedalliance.org/study-finds-340b-hospitals-significantly-markup- infusion-drugs/ (last visited Feb. 7, 2025) (Specifically, markups for some commonly administered infusion drugs were 6.59 higher at 340B hospitals than at independent doctor practices, and 4.34 times higher than at non-340B hospitals.); see also J. Robinson, et al., Hospital Prices for Physician-Administered Drugs for Patients with Private Insurance, N Engl J Med 2024;390:338-345, DOI: 10.1056/NEJMsa2306609 (January 24, 2024) (cited in the Aimed Alliance article). 18 Compare id. (list value of 340B purchases equaling $124 billion), with HRSA, 2023 340B Covered Entity Purchases ($66 billion in acquisition costs in 2023, creating a spread estimate of $58 billion), available at https://www.hrsa.gov/opa/updates/2023-340b-covered-entity-purchases (last visited Feb. 7, 2025); see also Eleanor Blalock, Measuring the Relative Size of the 340B Program; 2020 Update, BRG, at 7 (June 2022), https://media.thinkbrg.com/wp- content/uploads/2022/06/30124832/BRG-340B-Measuring-Relative-Size-2022.pdf. (analyzing the delta in list to acquisition price for 2020). 19 Many hospitals have charity care ratios way below even these low averages, however. UMass Medical Center, for instance, according to Pioneer Institute, had a charity care ratio of just 0.95% in 2022. See Pioneer Institute, Hospital Charity Care, Massachusetts (2022), available at https://pioneerinstitute.org/340babuse/hospital-charity-care/ (last visited Feb. 7, 2025). 20 ADAP Advocacy, 340B Map, available at https://340bmap.org/mapster-wp-map/340b-map/ (last visited Feb. 7, 2025). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 6 6 Worse yet, 340B contract pharmacy arrangements do a particularly poor job of providing needy patients with meaningful access to affordable drugs, underscoring why ADAP Advocacy is so concerned that patients are not adequately sharing in the dramatically reduced prices at which covered entities can purchase drugs under the program.21 Despite the massive growth in the 340B Program, only 1.4% of branded prescription contract pharmacy patients can be shown to have received any assistance at the contract pharmacy counter.22 That is even below the abysmally low 340B hospital charity care rate of 2.15% in 2022.23 But to put this rate of assistance into even greater relief, more than 40% of the U.S. population is uninsured, underinsured, or experiences a coverage gap each year.24 A 1.4% level of assistance at the pharmacy counter is indefensible in light of the billions and billions generated by the 340B Program and this level of need. A second, follow-up study subsequently reviewed assistance at the 340B contract pharmacy counter and showed only marginally different results.25 That study, which examined data over multiple years, showed that 340B contract pharmacies dispensing branded prescriptions provided patient assistance at the pharmacy counter in as few as 3.0% of all prescriptions and no more than 4.7% in any year studied. Again, comparing that level of assistance to the 40% of the U.S. population who are uninsured, underinsured, or experience a coverage gap each year underscores how meager the assistance is. Sadly, the inescapable conclusion is that, despite the affordable medications being provided by some 340B covered entities, like ADAPs, the program as a whole is largely and systematically failing to assist needy patients with their medications. E. Transparency that Is Inclusive of the Patient We support the rebate model because we believe it is the only way to fix the fundamental transparency problem eating away at the program and public confidence in it. We urge HRSA, as it embraces the model, to incorporate a patient-centered approach like that Bristol Myers Squibb, Inc. brought to its proposed program, which we were deeply disappointed to see HRSA fail to support. BMS promised to provide its rebate payments even faster than HRSAs mandated 10-day payment window, which is faster than the current 30-day payment system for most ADAPs, if the covered entity committed to sharing the 340B price with patients. The rebate modeland only the rebate modelcan provide the platforms and the data to understand, clearly and without obfuscation or manipulation, what the connection is (or isnt) between a 340B covered entity and the person that receives the drug26 and whether bona fide 340B patients in need receive assistance at the pharmacy counter. 21 Rory Martin et al., Unintended Consequences: How the Affordable Care Act Helped Grow the 340B Program, IQVIA (Aug. 30, 2024), available at https://bit.ly/3XFDWh8. 22 Rory Martin, et al., Are Discounts in the 340B Drug Discount Program Being Shared with Patients at Contract Pharmacies?, IQVIA, available at https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/are-discounts-in-the-340b-drug-discount-program-being-shared-with-patients-at-contract-pharmacies.pdf (last visited Feb. 7, 2025). 23 Pioneer Institute, Hospital Charity Care, available at https://pioneerinstitute.org/340babuse/hospital-charity-care/ (last visited Feb. 7, 2025). 24 Commonwealth Fund, The State of Health Insurance Coverage in the U.S. (2024) (9 percent of adults were uninsured, 12 percent had a gap in coverage over the past year, and 23 percent were underinsured, meaning they had coverage for a full year that didnt provide them with affordable access to health care), available at .https://www.commonwealthfund.org/publications/surveys/2024/nov/state-health-insurance-coverage-us-2024-biennial-survey# (last visited Feb. 7, 2025). 25 William A. Sarraille, et al., Do 340B Contract Pharmacies Really Increase Access for 340B Patients?, IQVIA (2025), available at https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2025/iqvia-340b-contract-pharmacies-white-paper-2025.pdf (last visited Apr. 15, 2026). 26 Even some 340B advocates acknowledge excesses in the manner that some covered entities claim a patient for purposes of 340B purchasesand the profits that can be generated by doing so. See 340B Insider, Cloudmed, Legal Considerations and Compliance for 340B Program Optimization, https://www.cloudmed.com/resource/340b-insider-december-2022/ (various covered entities take the extreme position that everybody we have ever treated at any point is our patient) (last visited Feb. 7, 2025). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 7 7 To justify the billions in subsidies generated by the drug therapies of 340B patients, many of whom pay substantial sums out of their own pockets to help fund those massive subsidies, 340B must operate to enable patients in need to secure the benefit of drug discounts at the pharmacy counter. As a patient advocacy organization, ADAP Advocacy believes that BMSs plan to employ a patient- centric manner should inform HRSAs development of a rebate model. Clearly, there needs to be a functional means to ensure that IRA/340B duplicate discounts do not complicate an already disturbing level of duplicates and defeat IRA implementation, and the rebate model is that means. But BMS went further and suggested that it would do better than even HRSAs short 10-day payment deadline, if covered entities simply agreed to share the 340B price with their patients. This important design feature would make the rebate model an engine to make drug therapy more affordable for needy patientsexactly what the program was intended to do. Patients would be able to determine whether their provider had made that commitment by looking at the public list of covered entities that had done so. Although we support HRSAs call for manufacturer rebate models to include platforms that are transparent to covered entities and to HRSA itself, it is unthinkable that that transparency would not also be required to extend to the patients who generate billions in profits to 340B covered entities. Patients must be permitted access to rebate platforms to determine whether they are being provided access to 340B pricing. Patients should be able to ask if the price that they were charged at the counter reflected the 340B price. In addition, state Medicaid agencies should be granted access to the platforms so they can better administer the Medicaid program, including by more effectively identifying duplicate Medicaid rebates and guarding against improper Medicaid payments, thereby conserving badly needed Medicaid resources meant to provide medical care to the indigent and disabled. Finally, the Centers for Medicare and Medicaid Services (CMS) should also have access to the data to augment their duplicate discount removal efforts. In other words, any rebate model should provide everyonepatients, covered entities, manufacturers, HRSA, CMS, and state Medicaid agencieswith transparency into how the program is operating and its implications. We want to emphasize that transparency should be bidirectional vis--vis covered entities and manufacturers. On the one hand, it should benefit covered entities. When covered entities doubt that manufacturers accurately calculate 340B prices, the rebate model can and should provide them with transparency into those prices, ensuring they are, in fact, receiving the price they should. It should, on the other hand, give manufacturers confidence that, when they make the 340B price available, they are not paying duplicate discounts or being targeted by diversion schemes. F. The Speculative, Data-Challenged Objections to the Rebate Should Be Rejected. Those 340B covered entities that oppose the rebate model do so asserting that the rebate model, as applied to even the first 10 Medicare Fair Price drugs, will (1) cost covered entities hundreds of millions of dollars by forcing them to acquire product at non-340B prices and wait (all of) 10 days for payment, and (2) create additional administrative costs in collecting and submitting data. These arguments are baseless, as shown by the hard evidence of how ADAPs have successfully operated for years, the concrete example of what actually occurred under manufacturer contract pharmacy polices, where covered entity trade associations offered the same the world will end predictions, and by any thoughtful analysis of how inventory costs work. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 8 8 1. The Objections to the Rebate Model Have Already Been Disproven by Years of ADAP Experience. For 27 years, ADAPs have operated as a rebate mechanism, providing a gold standard for wider implementation of that well-established system and utterly disproving the objections made by those who oppose the rebate model. The long and successful history of State Drug Assistance Programs demonstrates that rebates operate in the best interests of all 340B stakeholders. That history also belies the rebate naysayers who, without any data to support it, contend that a rebate model would impose devastating and overwhelming costs on covered entities. The ADAP model involves the same costs that opponents of the HRSA model say would lead to disaster. The ADAP rebate model, for instance, requires pharmacies to acquire products at non-340B prices. Indeed, under that model, ADAP rebates are payable 30 days after submission of a rebate requestthree times the period HRSA has set for rebate payments in the rebate model. The ADAP model also requires pharmacies to collect drug data and submit it to ADAPs to secure payment, incurring the same kind of administrative costs that 340B special interest trade associations contend will prove disastrous under a 340B rebate. But, despite non-340B acquisition prices and data collection and submission mandates, the ADAP model has performed extremely well, leading to sustained growth for participating pharmacies, the ADAPs themselves, and the patients who depend on them for their care. Using a rebate model, ADAPs have been able to dramatically grow their drug and non-drug services for HIV/AIDS patients, while providing financial assistance to patients and funding for non-drug HIV/AIDS programs. None of that would have been possible if the costs of a rebate model were untenableor anything close to that. The evidence is clear. When the ADAP model was first implemented in 1997, 340B ADAP drug rebates provided just 5% of ADAP funding for PLWHA. By 2022, however, those rebates successfully and efficiently funded 47% of all HIV/AIDS programs, an increase of more than 800%, including direct financial assistance to drug patients in need.27 By 2024, 340B rebates funded a full 55% of these programs.28 Where much larger, better-resourced 340B hospitals (and even clinics) are in an even better position to operate effectively under a rebate model than the often quite small pharmacies that participate in ADAPs, acquisition costs and administrative expectations have in no way prevented the program from thriving and expanding. While critics of rebates contend they would destroy the program, these speculative contentions, unsupported by any evidence, have already been disproved by almost three decades of ADAP experience. That is true even though the ADAP mechanism has deployed a payment standard that is 20 days longer than the one that HRSA has mandated for its rebate model. 2. The Rebate Model Criticisms of Administrative Costs Have Been Disproven by the Experience with Contract Pharmacy Policies. 27 Marcus J. Hopkins, NASTAD Releases 2024 Monitoring Project Annual Report, The ADAP Blog (May 2024), available at https://adapadvocacyassociation.blogspot.com/2024/05/nastad-releases-2024-monitoring-project.html. 28 Brandon Macsata, Is the 340B Drug Rebate Program the Next Too Big to Fail?, ADAP Advocacy (Feb. 2025), available at https://www.adapadvocacy.org/pdf- docs/2025_ADAP_Project_RW_340B_Asset_16_Too_Big_To_Fail_03-07-25.pdf. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 9 9 Similarly, the contention that the administrative costs associated with data collection and submission will spell disaster for covered entities has already been disproven by the experience under the contract pharmacy policies. There, too, as here, 340B special interest trade associations speculated, without citing any evidence, that those data and submission requirements would bring the 340B Program to its knees. The exact opposite happened.29 Contract pharmacies were not destroyed; they, in fact, grew at a double-digit pace, even as the number of all other pharmacies fell. IQVIA studied the number of 340B contract pharmacies, both before and after manufacturers implemented their contract pharmacy policies. Following the implementation of those policies, contrary to predictions by 340B special-interest trade associations, the number of 340B contract pharmacies increased by more than 6,000. The growth in 340B contract pharmacies was 24%, even as the number of non-340B pharmacies fell during the same period. Data collection and submission did not in any way prevent an increase in 340B contract pharmaciesnotwithstanding the fact that non-340B pharmacies were being eliminated at the same time. 3. ADAP Advocacys Data-Driven Model Shows that a Rebate Model Would Not Burden 340B Covered Entities. In light of rebate critics predictions of disaster, ADAP Advocacy undertook its own data-driven analysis of a rebate model. Our model shows that the critics speculative objections are baseless. Prior research discussed above establishes that the reimbursement value of the 340B Program to covered entities is $157 billion, using wholesale acquisition cost as an estimate of that value. The actual acquisition cost for 340B drugs in the corresponding year, as reported by HRSA, was $81 billion. The delta between those two numbers is $76 billion.30 We adjusted these figures to reflect that 340B hospitals are responsible for 80% of 340B purchases ($61 billion) and reimbursement value ($125.6 billion). We conducted interviews with multiple pharmacists practicing at 340B hospitals and industry experts (including 340B consultants serving those clients) and determined that 340B hospitals turn their inventories between 12 and 15 times each year. We applied a factor of 13.5 to reflect the midpoint in that range. Although the turn rate reported to us was faster for the 10 high-use Medicare Fair Price drugs, we used the turn rate reported to us for all drugs. That rate of turns means the product is held, on average, only 24 to 30 days. After speaking with these same sources and experts and reviewing published sources on hospital borrowing rates, we determined that the standard cost of funds for 340B hospitals is 7% per annum. Based on these inputs, the cost of a rebate model, even when applied across all 340B drugs, is no more than 0.32% of the value of the 340B Program ($61 billion x 0.07/13.5). This is an exceptionally low inventory cost rate, while health care industry benchmarks are typically in the 2.0% range. 29 William A. Sarraille, et al., Do 340B Contract Pharmacies Really Increase Access for 340B Patients?, IQVIA (2025), available at https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2025/iqvia-340b-contract-pharmacies-white-paper-2025.pdf (last visited Apr. 15, 2026). 30 Rory Martin, et al., The Size and Growth of the 340B Program in 2024, IQVIA (2025), available at https://www.iqvia.com/locations/united-states/library/white- papers/the-size-and-growth-of-the-340b-program-in-2024 (last visited Apr. 15, 2026). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 10 10 Further, this conclusion (0.32%) is likely a substantial overestimate of the actual cost. It does not consider the positive impact of rebate payments made before covered entities pay for their medications,31 the value of payment terms extended by wholesalers, or the value of the payments that those wholesalers make to covered entities for agreeing to earlier payment terms. Even without considering any of those and other factors, the cost of a rebate program is quite nominal. 4. Another Analysis Shows an Equally Marginal Cost to a Rebate Model. IQVIA conducted its own analysis of the interest costs associated with a rebate model.32 That model, like ADAP Advocacys, showed a merely marginal cost associated with rebates. To estimate the interest cost of 340B rebates, IQVIA created a data-driven cash flow model based on a set of stakeholder-tested parameters that included the drug's wholesale acquisition cost (list price), its 340B discount price, wholesaler payment terms, short-term borrowing rates, and the timing of the 340B rebate payment. Contrary to the assertions made in the district court litigation, IQVIA found that interest costs were quite small, typically less than 1% of the drug's list price. Importantly, IQVIA found that the interest costs of a 340B rebate model were the same as or less than those of all pre-existing drug inventory models that use upfront discounts to effectuate the 340B discount. In this study, IQVIA used a parameter for wholesaler payment terms based on stakeholder interviews, supplemented by several published reports, including a public contract involving one of the Big 3 wholesalers (which explicitly listed a 30-day payment period after receipt of a drug). Consistent with that information, IQVIA applied a 30-day pay base parameter but, in keeping with the conservative approach it took in this study, supplemented it with a sensitivity analysis to account for shorter payment terms. Indeed, its sensitivity analysis included a payment term of just zero days, an incredibly conservative predicate for analysis that is demonstrably inconsistent with the fundamentally longer payment terms the vast majority of purchasers are known to receive. Critically, IQVIAs results, even at zero days, demonstrated that 340B rebate interest costs were small. 5. A Follow-Up Analysis Also Demonstrated Low Interest Costs, Even Using More Conservative Parameters. In its litigation with HRSA, the American Hospital Association asserted, without data, that a rebate model would inflict hundreds of millions of dollars of crushing, enormous, and calamitous costs on hospitals and other 340B providers. In light of these assertions, IQVIA then performed an additional study, deploying updated list prices for the 10 Medicare Fair Price drugs and even more conservative assumptions about the payment terms that covered entities have with their wholesalers.33 31 The multiple 340B hospital pharmacists and consultants with whom we spoke stated that we should apply a wholesaler payment term time period of, on average, 20 days. With a hospital turn of between 24 and 30 days, on average, that means that the clear majority of all drugs are dispensed and billed before the hospital even makes payment to the wholesaler. With a HRSA mandated 10-day payment period, the average drug product would be dispensed on day 27, having only been paid for 7 days earlier, with a 340B payment on day 37. For a drug product with an initial price $100 above the final rebated price, that translates to an interest cost of just $0.32 ($100 x 7% per annum / 17/365 days). 32 Chuan Sun, et al., How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? IQVIA (Dec. 2, 2025), available at https://www.iqvia.com/locations/united-states/library/fact-sheets/how-will-a-rebate-model-impact-cash-flow-in-the-340b-drug-pricing-program (last visited Apr. 15, 2026) 33 Rory Martin, PHD, et al., Do 340B Rebates Create a Significant Financial Burden for 340B Providers?, IQVIA (2026), available at https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2026/do-340b-rebates-create-a-significant-financial-burden-for-340b-providers.pdf (last visited Apr. 17, 2026). RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 11 11 Because 340B special-interest trade associations claimed that a wholesaler had asserted that its wholesaler payment terms for all 340B providers generally fell into a 7-to-14-day range, IQVIAs follow-up study used a base parameter at the midpoint of that range, an average of 10.5 days. Applying January 2026 list prices for the 10 MFP drugs and these 340B special interest trade association-endorsed payment terms, IQVIA determined that the annual interest costs per covered entity ranged from just $590 for federal grantees to just $23,649 for disproportionate share (DSH) hospitals. These are truly trivial sums, with these interest costs representing only 0.40% of the 340B drug reimbursement value for all covered entities, conservatively calculated based on their list prices. Consistent with, and extending, its earlier study, IQVIA showed that interest costs under a 340B rebate model are marginal and inconsistent with claims that a rebate model would impose a significant financial burden on 340B providers. The study authors further broke out their findings by 340B entity types. It found that 340B disproportionate hospitals interest costs would be just 0.34%,34 that non-DSH hospital costs would be 0.51%, and clinic/grantee costs would be just 0.68%, all well below 1%. This follow-up study highlighted that, even as early as January 2026, list prices were dramatically reduced for half of the drugs subject to MFP in 2026: Eliquis, Fiasp, Farxiga, Imbruvica, and Jardiance. This fairly systematic reduction in list prices, based on the introduction of Medicare Fair Prices, shows that the 340B special-interest trade associations heated speculation about the impact of a rebate model was built on systematically incorrect assumptions about the list prices that would apply to initial acquisition. With the reduction in list prices continuing at an impressive pace, this underlying pricing and industry reality further underscores the truly marginal nature of interest costs under the 340B rebate model. The study authors emphasized the conservative nature of their study design. For example, although payment terms of less than 30 days often lead the wholesaler to offer an offsetting incentive (such as a further price discount), the model used here did not attempt to incorporate such positive sums. In addition, the authors ignored interest income from positive cash balances that arise when 340B rebate payments are received before payment must be made to the wholesaler. 6. The 340B Assertions about Administrative Costs Are Built on an Entirely False Premise. HRSAs notice seems to adopt some rebate critics argument that the normal costs of providing data should be characterized as administrative costs and attributed to a rebate model in analyzing that model. That is fundamentally incorrect as both a practical and a legal matter. At a practical level, it is uncontested that covered entities and their third-party administrators regularly collect and house the very claims data needed for a rebate model. That data is needed, entirely separate from any rebate model, in order to secure third-party insurer payment for the drugs and to meet HRSAs existing obligations that covered entities establish that the drugs for which they claim 340B pricing are appropriate for that pricing. A 340B patient cannot be determined eligible for 340B pricing without collecting and reviewing claims data that establishes 340B eligibility. 34 That figure is almost identical to the 0.32% ADAP Advocacy found in its study. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 12 12 Thus, the notion of administrative burden here is entirely without foundation. Rebate models only ask covered entities to collect the data they already collect. ADAPs and their partners have, for years, operated a rebate model that depends on the collection and review of claims data, and the gold standard shows that these arguments against a rebate model are baseless. The burden argument is also legally flawed. The Third Circuit and the D.C. Circuit decisions, binding on HRSA, establish without question that manufacturers may collect claims data independently of any rebate model. To attribute a claims data condition on sale to the rebate model is flatly inconsistent with manufacturers court-recognized right to independently collect that data and require its submission. Thousands of contract pharmacies and their covered entities are already collecting and submitting data to manufacturers, independent of any rebate model, as a result of contract pharmacy policies. Multiple manufacturers, also quite independently of any rebate model and entirely lawfully, are now requiring data collection and submission for all 340B transactions. The rest of the manufacturing community is following suit, regardless of whether a rebate model is implemented. Indeed, CMS has already mandated broad collection and submission of data in connection with the Medicare Fair Price Transaction Facilitator, separate and apart from any 340B rebate model. Data collection and submission infrastructure and costs are already embedded in the pre-340B rebate ecosystem. IQVIA makes the same points this way: We do not attempt to measure operational costs or system integration costs, which were other arguments that the litigants made in opposing the 340B rebate model. We did not examine these asserted costs because we do not believe it is correct to view them as costs attributable solely, or even substantially, to the 340B rebate model. HRSA has long required covered entities to collect and maintain the data that would be required under a 340B rebate. Two federal courts of appeals have permitted manufacturers to impose data submission requirements in connection with contract pharmacy transactions, without any connection to a 340B rebate model, and thousands of pharmacies have already developed systems and undertaken submissions under those policies. Furthermore, manufacturers have now instituted data-submission requirements for all 340B drug transactions again, without any connection to a 340B rebate model.35 35 Rory Martin, PHD, et al., Do 340B Rebates Create a Significant Financial Burden for 340B Providers?, IQVIA (2026), at 9, available at https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2026/do-340b-rebates-create-a-significant-financial-burden-for-340b-providers.pdf (last visited Apr. 17, 2026). 340B special-interest trade associations also work from a different false premise when they say that the shift from a discount to a rebate model will introduce acquisition prices at non-340B prices for the first time into the program, at least beyond the initial stocking a 340B covered entity may perform when it first enters the program. In framing their view of the rebate model, 340B special-interest trade associations make the assertion, again without offering any data, that the 340B Program has traditionally operated as an upfront discount program. That entirely unqualified statement is factually incorrect. Many covered entities already purchaseoftenat non-340B prices. First, because the program has grown by more than 1,000% since 2010, covered entities have routinely had to support that incredible rate of growth by purchasing product at commercial prices. Growth like that simply cannot be achieved through replenishment. It requires the regular purchase of massive number of units beyond the prior rate of utilization. All of those commercial purchases have in no way impeded the programs explosive growth. But the assertion that non-340B price purchases are not a regular part of the program, even now, is also false because it ignores that a hefty percentage of the program as a whole operates through contract pharmacies, where the dispensed product is typically purchased at commercial prices. Indeed, that is 20% of the program right there. It also ignores that, under the replenishment model, the need to accumulate full units necessarily means that, in the interim, covered entities must purchase product at commercial prices. This is a regular and substantial part of the 340B Program on an on-going basis. Finally, it also fails to acknowledge that, since it is frequently unclear whether a particular patient will or will not be 340B eligible, covered entities must regularly purchase units at commercial prices for those dispenses they make to persons that are not 340B eligible. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 13 13 And again, if there is any doubt about the correctness of this analysiswhich there should not be HRSA should revisit only the contract pharmacy analysis above. After manufacturers introduced data collection and submission requirements in their 340B contract pharmacy policies, 340B contract pharmacy growth leaped higher at a double-digit rate, even as all other pharmacies were contracting. Data collection and submission are in no way burdensome and have never impeded the programs explosive growth. 7. The Only Evidence to the Contrary Is Deeply Flawed and, Essentially, Useless. The only analysis that purports to offer a differing picture of the carrying costs under a 340B rebate model is a 340B Health survey. It is so fundamentally flawed that it is wholly unreliable. The survey, based on untested responses from a small, non-randomized group representing approximately 1% of all covered entities, asserted that the average float cost to a 340B hospital would be $8.6 million per year. Even more incredibly, the survey found that the average annual float cost for an individual DSH hospital would be $72.2 million.36 The use of a non-randomized survey document is, of course, highly problematic. It invites significant bias, particularly when a self-interested trade association sponsors the survey and only a small fraction of the covered-entity universe responds. The aforementioned survey offers little to no value in this policy debate due to the skewed nature of its so-called findings. The concerns here are heightened because the survey instrument itself has never been publicly disclosed, preventing any analyst from assessing the additional bias it may introduce and the wording used. This failure to disclose the survey instrument is inconsistent with the most basic data practices expected in conducting or reporting on a survey. Even without disclosure of the survey instrument, it is clear that the survey was based on parameters that are inconsistent with the program HRSA has designed. For instance, respondents assumed that it would take up to 30 days for a rebate payment to be made, 3x the period mandated by HRSA as the maximum permissible time period. The survey, thus, addresses a program that neither manufacturers nor HRSA have proposed rendering it both irrelevant and useless. But the problems with the survey hardly end there. The survey takes the position that when inventory is ordered and when payment to the wholesaler is due are concurrent. That wholly ignores the impact of wholesaler payment terms, which create an almost invariable lag between when drugs are received and when the customer pays the wholesaler. Even more fundamentally, the 340B Health survey treats the entire difference between an initial acquisition price and the final rebated 340B price as the cost that a covered entity incurs under the rebate model. In other words, it treats a $100 difference between the initial acquisition cost and the 340B final rebated cost as a loss to the covered entity. The idea that the existing program operates nearly exclusively on an upfront discount basis is wildly inaccurate. Importantly, none of those billions in purchases at commercial prices have prevented the 340B Program from rocketing forward at a growth rate of more than 1,000%. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 14 14 But that is fundamentally wrong. The covered entity will not lose that $100. It will just finance that amount at the interest rate available to it, and it will be paid back (and more). Indeed, it will only have to ever finance that amount if the drug must be paid to the wholesaler before it is subject to the expedited 340B rebate payment, which, in many cases, will not be the case. Even when financing is available, the cost is not high. Using IQVIAs parameters, even in its very conservative follow-up study, that $100 differential is paid, on average, only at day 10.5. Assuming the product is dispensed on day 15 (IQVIAs turn average for these drugs) and a rebate is paid 10 days thereafter, as mandated by HRSA, thats less than 15 days of interest cost at an interest rate, even for small clinics and grantees, of not more than 12%. Where the survey assumes $100 in cost, the actual cost, even applying this interest rate, which far exceeds the rate under which the vast majority of 340B products will be financed, is just $0.49. Thats right. Its less than two quarters. The survey, which would assert a $100 loss here, overstates the inventory costs by a factor of more than 200 times.36 340B Healths survey results are not just grossly overstated; they are laughably bad. G. The Scale of the Duplicate-Pricing Problem Is Massive and More than Establishes the Need for the Rebate Model. As low as the costs properly attributable to the rebate model are, another relevant issue is the potential size of duplicate discounts. The Centers for Medicare & Medicaid Services (CMS) has addressed this issue directly. It states, quite significantly, that 340B duplicates are expected to be between 1035% of all Medicare Part D units subject to inflation rebates. That is an alarming estimate that underscores the need for HRSA to act as soon as possible to implement a rebate model, particularly in light of the program's explosive growth and the broad consensus regarding the duplicate-discount and diversion issues it has created. By all accounts and all estimates, the 340B Program is enormous and growing rapidly. The wholesale acquisition cost value of 340B purchases in 2024, an estimated reimbursement value, was $148 billion.37 The program grew an astonishing 1,000% from 2010 to 2023.38 Multiple government reports have demonstrated that non-ADAP 340B Program claims are riddled with duplicate discounts, diversion, and other vulnerabilities. See, e.g., GAO-20-212: 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement (Jan. 2020); GAO-18-480: Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement (June 2016); Office of Inspector General (OIG) Report: State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (Dec. 2016); OIG Report: Contract Pharmacy Arrangements in the 340B Program (July 2014). 36 When IQVIA performed this exercise, using interest rates for all three buckets of 340B providers it created and applying, on a weighted basis, the interest rate most appropriate for each typenot defaulting as we do to the highest interest rate and applying it to all typesit came to the conclusion that 340B Healths estimate of drug acquisition costs was overstated by more than 360 times. 37 Rory Martin, et al., IQVIA 340B Dynamics Dashboard (2025) 38 Id. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 15 15 Against this backdrop, CMSs estimate of the prevalence of 340B Part D duplicates is quite disturbing. CMSs estimate (10-35%) is likely to exceedindeed, very substantially exceed- all current estimates of the share of the 340B Program as a percentage of the U.S. drug market. The current estimates are 13.5% to 15.45%, as shown in Table 1 below. Table 1: Even the midpoint of CMSs estimated range (22.5%) is substantially more than prior estimates. At the high end of CMSs estimated range, 35%, that figure is more than double all other prior estimates. Whether CMSs estimates are correct or not, the size of those estimates, the massive difference between their upper and lower ends, and the substantial delta between CMSs estimated range and prior estimates all underscore the need for HRSA to bring much greater transparency to 340B utilization. Importantly, the 340B Programs many ills, discussed above, can only be addressed by dramatically improved transparency, such as the broad, thoroughly transparent rebate model we call for here. The public should know how the billions in 340B profits that flow to 340B hospitals are being used and whether program protections against duplicate discounts and diversion are being honored. Patients in need, the very people that the 340B Program was designed to help, should understand when large hospitals profiting from the program are sharing 340B pricing with themand when 340B hospitals refuse to share that pricing. H. It Would Be Arbitrary and Capricious NOT to Move Forward with the 340B Rebate Model. Given how broadly the Department of Health and Human Services has already adopted rebatesin multiple contextswe think it would be arbitrary and capricious for HRSA not to adopt a 340B rebate mechanism. To illustrate this point, we think it is helpful to put the 340B rebate model into context: In the context of Part D, the Department, through CMS, has now finalized and implemented a claims-based retrospective system to identify Part D 340B duplicates. The Department, through CMS, has authorized manufacturers to use a retrospective claims-based system to pay rebates on Medicare Fair Price (MFP) drugs. Under Part B, the Department has, through CMS, already mandated a retrospective claims-based system to identify Part B 340B duplicates. The Department, acting through CMS, permits state Medicaid agencies to identify 340B duplicates through a retrospective claims-based system. RE: Proposed 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) April 19, 2026 ADAP Advocacy Association www.adapadvocacy.org Page 16 16 The Department, acting through HRSA, has authorized ADAPs, as we have discussed above, are permitted to operate on a retrospective claim basis. The Department, through HRSA, has permitted 340B covered entities to operate on a retrospective basis under the replenishment model. Simultaneously, however, the Department, through HRSA, has generally refused to allow manufacturers to use a claims-based retrospective rebate system to identify 340B duplicates and diversion. Although the Secretary, through HRSA, has indicated the possibility of permitting a retrospective rebate system for the 10 MFP drugs, it does not appear committed to more broadly permitting 340B rebates. The Departments failure to align its position on manufacturers use of retrospective systems with its position on the same question virtually everywhere else is, we believe, arbitrary and capricious. The Department should immediately permit manufacturers--as it permits CMS, covered entities, state agencies, and ADAPs--to employ retrospective claims-based systems. Manufacturers should not be barred from implementing such a system on a broad scale. In this regard, IQVIA undertook yet another analysis of the interest costs associated with the Medicare Fair Price rebate mechanism, using the governments contracted facilitator, as compared to a manufacturer 340B rebate mechanism.39 That study found that the manufacturer rebate model resulted in lower costs for covered entities than the CMS model. That result is hardly surprising, as the manufacturer model requires faster payment of rebates than the CMS model. It makes no sense for CMS to permit a model that is less efficient than the manufacturers model. What is good for the CMS goose must also be good for the manufacturer gander, because improved claims data is for the betterment of the patient community. Unless HRSA permits manufacturers to do what CMS and others do, it is walking into an arbitrary and capricious legal challenge. *** Manufacturer rebate systems applied broadly would provide desperately needed transparency to all stakeholders patients, the federal government, state agencies, covered entities, and manufacturers. This is the only means to fix a 340B Program that has been mired in opacity for decades. Thank you for taking the time to consider our request. For additional information, please do not hesitate to contact me by email at brandon@macsata.org or phone at (305) 519-4256. Thank you. Sincerely, Brandon M. Macsata CEO cc: Marcus J. Hopkins, Health Policy Lead Consultant 39 Zeng S, Sun C, Sarraille W, and Martin R. How will a rebate model impact cash flow for price negotiated drugs in Medicare Part D? IQVIA. 2025.
HRSA-2026-0001-1771Hudson Headwaters Health Network2026-04-19T04:00Z20,748 chars
Hudson Headwaters appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program, please see attached. Submitted electronically via Federal Rulemaking Portal eRulemaking Portal: https:// www.regulations.gov. April 17, 2026 Ms. Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Hudson Headwaters appreciates the opportunity to provide comments on the Request for Information: 340B Rebate Model Pilot Program. Hudson Headwaters is a mission-driven organization and the sole primary care provider for most of its 7,900-square-mile service region in rural Upstate New York. The Network cares for patients at 26 health centers and more than 90 total locations, including hospitals, nursing homes, workplaces, schools, and patient homes, across seven counties in the North Country, Adirondack Park, and Glens Falls areas. The Networks1,000+ employees, including 220 physicians and advanced practice clinicians, provide care for more than 160,000 patients. As a Federally Qualified Health Center (FQHC), the Network is an eligible covered entity for participation in the 340B Drug Pricing Program. Like many non-profit, safety-net providers, Hudson Headwaters relies on the 340B Program to offset the costs of providing high-quality health care to everyone who needs it, while ensuring financial sustainability, reinvestment in the community, and expansion of essential services and care. The 340B Program was created by the federal government, with widespread bipartisan support, to require drug manufacturers to contribute to the cost of providing health care. Each year, Hudson Headwaters uses approximately $20 million in 340B savings to sustain operations and offset chronic under-reimbursement from government payers of core services including preventive health care, dental, pediatrics, obstetrics & gynecology, care management, behavioral health and much more. 340B savings also makes it possible to offer medication discounts and financial assistance programs for eligible patients. Since 2018, its estimated that Hudson Headwaters has invested $68 million from 340B savings in capital investments into the communities we serve, in addition to offsetting operational losses. The 340B program has also enabled the Network to respond quickly and nimbly to community needs and crises. Recent examples include: When a private OB/GYN office closed, Hudson Headwaters became the sole provider of OB/GYN services at Glens Falls Hospital, keeping nearly 900 births in the region, despite a $2.4 million annual operating deficit. When a private pediatric office closed in Plattsburgh, the Network expanded services, quickly opening a new center to absorb approximately 6,000 children. (Cost: $4.24 million) The Network opened Salem Family Health in 2025, a new 14,000+ square foot primary care health center in Washington County, with on-site lab services operated by Glens Falls Hospital. (Cost: $11.46 million) Malone Family Health opened in March 2026, located on the Alice Hyde Medical Center campus of UVM Health. (Cost: $12 million) Lastly, Hudson Headwaters previously operated a third part administrator (TPA), Hudson Headwaters 340B, that the Network sold in 2024. As both a covered entity and former TPA owner, Hudson Headwaters has unique insight into the administrative and operational impact of the proposed rebate model. Executive Summary of Position Hudson Headwaters opposes a rebate model as it does not align with the original intent of the program and would increase administrative burden, financial risk and operational fragility without advancing statutory objectives. The administrative and financial impact will be paralyzing to both small and large covered entities. Adverse impacts include dramatically increasing drug expenditures, reducing cash on hand and disrupting cash flow predictability, creating significant barriers for covered entities that rely on the 340B Program to meet regional health care needs. Ultimately, a rebate model will harm the very people the 340B Drug Pricing Program is intended to help: the vulnerable communities and patients that depend upon covered entities like Hudson Headwaters for essential health care services. If a rebate model is implemented, Hudson Headwaters urges HRSA to carefully consider the unique operational and financial realities and challenges of community health centers. Pending legislation (e.g., the Community Health Center Drug Pricing Protection Act proposed by Reps. Bergman and Auchincloss) would exempt FQHCs from any 340B rebate framework and highlights bipartisan support for this approach. Additionally, HRSA should consider a neutral clearinghouse to support program integrity (e.g., duplicate discount prevention and patient definition compliance) without allowing manufacturers to redefine 340B requirements through unilateral criteria or processes. Current Upfront 340B Discount Model In the past year, Hudson Headwaters captured 84,139 eligible dispenses into our 340B program. Hudson Headwaters ensures that the maximum 340B savings are reinvested for the benefit of our patients and communitiesnot intermediaries. For our gross 340B savings, 13% was allocated to contracted pharmacies, 38% to drug costs, and 5% to TPA services, with the remaining 44% retained by the Network to support patient care and access. The Network carefully negotiates all contracts, executing agreements with terms that reflect fair market value for dispensing and administrative fees. In addition to the costs noted above, the increasing number of manufacturer restrictions and the resulting administrative burden have created significant financial implications for the Network. Since 2020, when pharmaceutical companies began denying or limiting access to 340B contract pharmacy savings, Hudson Headwaters 340B savings have steadily declined, resulting in $13.7 million lost in 2024 and $15 million in projected losses for 2025. A recent analysis of claims excluded by our contracted pharmacies due to manufacturer policy restrictions from April 2022 to March 2025, shows that Hudson Headwaters did not capture an estimated $39.5M in 340B savings. This figure of lost savings continues to grow as more restrictions have been added. For example, in February 2026 the Network received a letter from Pfizer announcing that its restrictions now apply to FQHCs, which will have an additional $760K financial impact to the Network. Pfizer and many other pharmaceutical companies routinely issue similar letters on their own accord and without warning. These companies have also not decreased the price of drugs thereby retaining 340B funds for their record-setting profitability. Current contract pharmacy restrictions have also severely curtailed the Networks abilities to fully leverage the 340B program as intended and meet our regions growing demand for high-quality health care close to home. The intent of the program to expand access is undermined when identifying only one pharmacy per health center site or for the entire Network, as Hudson Headwaters 7,900+ square mile service region is too large to support a single site designation. Allowing only one designated pharmacy across the entire Network does not reflect the realities of rural care delivery or support timely, local access to medications. The Network has responded to these impacts by devoting significant time and resources to navigate these restrictions. The Network has actively set up committees and taskforces to expand operational efficiencies, as well as significantly slowing or pausing growth and provider recruitment strategies, in response to the financial challenges due to decreased 340B savings. In most cases, we have consolidated and not backfilled leadership positions to better assure long-term organizational sustainability. Additional changes in staffing may be required due to frequent, additional or unexpected manufacturer policy changes. A rebate model is anticipated to exasperate these manufacturer restriction challenges and further limit the Networks ability to respond to urgent community needs. Overall, the changes would result in the Network using time, energy and resources to address the many obstacles inherent in a rebate model. These are resources better spent on providing care for the thousands of patients who depend upon us and reinvesting dollars into operational and capital needs. Adverse Impacts Under a Potential 340B Rebate Model A rebate model would significantly harm the Network, and ultimately patients, by dramatically increasing drug expenditures, reducing cash on hand, and disrupting cash-flow predictability. As a direct result, Hudson Headwaters would experience significant and ongoing cost increases. The tables below estimate the rebate models financial impact on the Network using the NACHC/FQHC Compliance Tool1. The estimates focus on MFP drugs because they would be the first to be subject to the proposed rebate model framework. If a rebate model implemented and expanded beyond MFP drugs, these already significant estimates would be astronomically more. The estimates in the Table 1 also assume a 20% rebate denial rate based on Hudson Headwaters current experience with incorrect manufacturer denials (a rebate model is anticipated to increase this problem and contribute to additional costs). 1 The costs were calculated using the NACHC/FQHC Compliance Tool which uses 2025 purchase data and Q1 pricing data to estimate the effect on maximum fair price (MFP) drugs if transitioned to a rebate model: https://www.nachc.org/policy-advocacy/policy-priorities/340b-drug-pricing-program/340b-rebate-model- pilot-program/ Table 1 The first column of Table 1 depicts the loss of cost savings due to the fact that a rebate model would break our distributor agreements, reduce our discount across the board (as it is currently based on purchase volume), and eliminate the discount cost for purchases at Wholesaler Acquisition Cost (WAC). In 2026, the Network estimates this loss at $2.1 million; by 2028, a total $13.8 million loss (the sum of the first column in Table 1) is anticipated as more MFP drugs become subject to the rebate model. A rebate model would also require initial purchase at WAC pricing which would create a financial hurdle that will reduce patient access by straining our distributors' lines of credit, ultimately reducing patient inventory. The second and third columns of Table 1 reflect the immense increase in upfront inventory spend that would be required due to WAC pricing. Additionally, because the Network currently pays its distributor based on 15-day terms, a rebate model would increase our need for additional cash on hand. Based on the Networks 2025 purchase data and the growing number of impacted MFP drugs each year, the potential annual increased costs will be: Table 2 For example, in 2026, the Network would need to keep an additional $1.2 million in cash on hand in order to cover the rebate models upfront inventory purchase requirement. By 2028, the Network would need an additional $3.7 million in cash on hand. As a consequence, the Networks financial resources would need to be shifted to accommodate the increased inventory cost of a rebate model. This would negatively impact the Networks ability to nimbly respond to our patient and communities growing needs. As just one example, these are resources that currently allow the Network to step in when crucial health care services would have otherwise been lost, such as operating the sole OBGYN practice with delivering privileges at Glens Falls Hospital, a service that currently operates at a $2.6 million loss. In order to manage the additional administrative and operational tasks required of a rebate model, the Network anticipates at least one additional staff member will be required to help with: Submitting new data submission requirements. Managing dual accumulation systems. Monitoring manufacturer-specific requirements. Managing denials and dispute processes. Managing and reconciling rebates across 100+ contract pharmacies. Completing increased compliance and reporting activities. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims This would cost Hudson Headwaters an additional $80,000 to $100,000 a year per FTE. If a rebate model is implemented, these additional costs and financial implications will make it increasingly difficult to support underfunded programs, such as OB/GYN and behavioral health, make much-needed capital investments or address critical community needs and priorities such as the recruitment and retention of rural health care providers. Preventing Adverse Impacts of a Potential Rebate Model The Network opposes the transition away from the current upfront discount model. However, if a rebate model is implemented, and whether community health centers are ultimately exempt or not, we provide the following recommendations based on our experience as both a covered entity and former TPA owner. To ensure the integrity of 340B, prevent increased costs and reduce administrative burden under a rebate model framework, we encourage HRSA to: Utilize a neutral clearinghouse IT platform or authority: The current framework allows manufacturers to act as the sole arbiter, creating an uncertain environment that results in direct financial harm. As part of any rebate model, Hudson Headwaters recommends ensuring that the company overseeing the rebate model is assured as a neutral authority to help prevent individual manufacturers from requiring varying processes, platforms and/or systems and, as a result, prevent additional costs for covered entities. The framework proposed in the previously proposed 340B Rebate Pilot allows manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. HRSA should require that any rebate model operates under uniform national standards that limit manufacturer discretion and costly delays, hold manufacturers accountable, and protect covered entities from financial harm. Require unlimited contract pharmacy use: The Network suggests HRSA add language to the 340B rebate pilot stating that restrictions or designations on the number of contracted pharmacies are not allowed, ensuring a covered entity, as registered on OPAIS, can use any contracted pharmacy. This is an especially important protection for rural communities and covered entities responsible for large geographies. Provide additional details and assurances on the transition plan for accumulations: Based on the Networks experience with pharmaceutical manufacturers' contracted pharmacy restrictions, there is concern about the pace of the significant changes and limited insight into the steps required to ensure a seamless transition. The Network operates 340B replenishment models across all our contract pharmacies, clinically administered drugs, and our entity-owned pharmacy. It is unclear in rebate model plans how covered entities will transmit appropriate data from new to old accumulations. Dispenses in old accumulations may be outside of the 45-day requirement and remain unreplenished. The Network recommends that HRSA outline assurances in a transition plan for accumulation models to ensure a seamless transition without disruptions for patients or missed savings for covered entities. Increase timeframe for claim submission and uniformity: The Network suggests expanding the 45-day window to 90 or 180 days. Along with a clear, uniform process, this expanded timeframe will help ensure rebates are not denied due to issues with timely claim submission, patient definition, or other technical concerns. HRSA should accept rebate claims as valid unless the manufacturer demonstrates otherwise under statutorily defined duplication of discount prevention terms (i.e., 340B with Medicaid Drug Rebate Program or Medicare Drug Price Negotiation Program); HRSA should require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. A lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Require rebates based on units, including wasted units: Base rebates on dispensed/administered units rather than package size, and include wasted units where partial packages cannot be fully used by eligible patientsthis is critical given high upfront costs under WAC purchasing. Example: Package size = 100 tablets; three 30day (30tablet) prescriptions dispensed; remaining 10 tablets cannot be matched to eligible patients. Absent a unitlevel rebate, covered entities cannot be made whole and must absorb these costs, often for increasingly expensive medications. Pilot with a limited, incremental, or voluntary source of covered entities: Begin with a small volunteer cohort of covered entities to identify and remediate operational issues before broader rollout. Also note pending legislation (e.g., the Community Health Center Drug Pricing Protection Act proposed by Reps. Bergman and Auchincloss) that would exempt FQHCs from any 340B rebate framework. Promote Negotiation of Terms and Conditions and BAAs: Require pilot vendors to hold harmless covered entities, restrict data use to MFP and duplicate discount prevention, and execute covered entities Business Associate Agreements (BAAs). HRSA should clearly state the companys terms and conditions and outline requirements consistent with the Health Insurance Portability and Accountability Act of 1996. Finality of Payment and Manufacturer Appeals: Once a rebate is paid, treat it as final unless a covered entity reverses it. If a manufacturer disputes payment, establish a clear, timebound appeal process, modeled on the Medicaid rebate programnot unilateral claw backs. It should be clarified that a manufacturer must bear the burden of establishing that no rebate is owed rather than the covered entity establishing that it is due. Create a refund dispute or appeal process: The current Administrative Dispute Resolution (ADR) process has not been an effective way to resolve issues or concerns and often involves lengthy timelines. For example, the Network has submitted three ADR cases in July 2024 (Sanofi), September 2024 (Lilly), and May 2025 (Biogen) and all are still awaiting resolution. Given the substantial financial resources required to participate in the proposed rebate model, the Network recommends a resolution process with clearly defined and enforced timelines to address disputes promptly. Remove Payer BIN/PCN from Required Data: BIN/PCN data is not universally available to covered entities (particularly for clinically administered drugs outside NCPDP formats) and is not necessary to validate MFP duplication or covered entity inclusion. Conclusion: 340B Program Integrity It is written in the Federal Register that the intent of the 340B Drug Pricing Program is to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102- 384(II), at 12 (1992). A rebate model compromises the program's intent by crippling providers both administratively and financially, creating limited access through adverse impacts to the covered entity. Ultimately, this model threatens the Networks ability to continue providing a comprehensive array of services, while also limiting its capacity to adequately or rapidly respond to emerging needs and changes in the health care landscape. We appreciate this opportunity to provide comments. Please do not hesitate to contact us with any additional follow-up questions. Respectfully, Tucker Slingerland, M.D. CEO Hudson Headwaters Health Network
HRSA-2026-0001-1772University Health System, Inc. (d/b/a University of Tennessee Medical Center)2026-04-19T04:00Z11,506 chars
Please see attached a letter from the University of Tennessee Medical Center outlining our opposition to the proposed 340B Rebate Model Pilot Program. April 19, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Mr. Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA 202603042) Dear Administrator Engels: The University of Tennessee Medical Center (UT Medical), which participates in 340B as a Disproportionate Share Hospital (DSH) covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. UT Medical strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has relied on 340B pricing through upfront discounts to stretch scarce federal resources and provide more comprehensive services, trying to reach patients where they are. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We have serious concerns regarding this abrupt proposal to replace a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to consider first. One alternative to possibly consider is requiring state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a possible rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. With a rebate model and increasing numbers of drugs included, we could struggle to extend 340B pricing at the pharmacy dispensing counter, greatly impacting patient medication access. That impact would negatively impact transition of care from hospital to home, limiting hospital-bed availability by potential increased length of stay and readmission to the hospital. We currently receive prompt pay discounts when purchasing drugs through some of our wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization even more money. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care UT Medical has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. Although we had experience with the 340B ESP platform for required manufacturer 340B claims data submission that once yielded intermittent success in maintaining 340B pricing and now, almost none, we had to work diligently with our Third-Party Administrator to try and prepare for our ability to submit the new required data fields under HRSAs 2025 Rebate Pilot. The manufacturers rebate pilot vendor continued to develop and change their information and platform for claims data submission. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals, especially if manufacturers are allowed to use many different vendors and data mapping requirements are changed even subtly without notifying the CE. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has prevalent challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Our 340B staff have doubled in number in the last 3 years to meet the ever-growing manufacturer requirements, despite our decreasing contract pharmacy relationships, and other program changes. We continue to struggle with meaningful clarity from Beacons MFP platform. Implementation of a rebate model could require additional full-time employees, costing an estimated additional $75,000/yr per employee for salary and benefits. Additionally, third party expenses are expected to increase as more data requirements are imposed. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the adverse consequences we foresee include negative impact on patient care, medication access resources such as patient discounts, uncompensated care, unreimbursed care, capital improvements, ability to maintain current or grow new services both on campus and at off-campus HOPDs, and overall hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Brandi Lowell Senior Vice President and Chief Government Relations and Grants Officer The University of Tennessee Medical Center
HRSA-2026-0001-1773Family Health Services of Darke County, Inc.2026-04-19T04:00Z26,955 chars
See attached file(s) April 19, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Services of Darke County, Inc. (Family Health), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep- dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to the ability of CHCs to serve the most vulnerable members of our community. However, shifting financial responsibility from manufacturers to safety-net providers via a rebate model threatens to destabilize pharmacy operations nationwide. Based on national assessments from NACHC and our internal analysis, Family Health anticipates the following staggering impacts: Financial Losses: Family Health anticipates a 2026 loss of $330,000 in increased costs for entity-owned and contract pharmacy operations due to manual reconciliation hurdles. These losses are estimated to grow to $370,000 in 2027 and $440,000 in 2028. Cash Flow Disruption: We estimate a cash flow disruption of $1,000,000 in 2026, $1,300,000 in 2027, and $2,000,000 in 2028. Sliding Fee Disruption: CHCs calculate sliding-fee discounts based on the 340B drug cost plus a small dispensing fee. Because a rebate system forces the pharmacy system to reflect the full wholesale price at the point of sale, it becomes impossible to pass along the 340B discount to the patient at the time of dispense. Rural Health Center Impact: In rural communities where transportation is a major barrier, Family Health provides the convenience of multiple services in one location. While we plan to expand psychiatric care, school-based services, and onsite OB services, reduced cash flow would force us to scale back. Current services at risk include Dietitian, Dental, Vision, Psychiatry, Community Health Worker, Clinical Pharmacy, Retail Pharmacy, School-Based Health Care, and Patient Assistance services. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed pilot is a direct threat to the core mission of CHCs and departs from the original purpose of the 340B program. For over three decades, 340B has enabled CHCs to purchase medications at significantly reduced prices to provide affordable care to millions. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Requiring CHCs to purchase medications at full price and wait for rebates will cause financial turmoil, affecting our ability to serve the 52 million patients who rely on the national CHC network. Family Health should be exempt based on the following operational realities: Operational Volume: Family Healths 27,963 community health patients generated approximately 122,000 340B transactions in 2025. Compliance Costs: Our current administrative costs to oversee the 340B program total $545,000 annually (inclusive of staff salaries, benefits, and compliance vendors), plus an additional $7.2M for third-party administrative costs. Rigorous Audit Processes: Family Health utilizes two external vendors and in-house staff to ensure compliance with HRSA standards. This includes monthly claim audits for duplicate discount prevention, patient eligibility, and inventory tracking. Furthermore, we undergo annual independent mock audits and remain subject to HRSA audits. Our June 2023 HRSA audit resulted in zero findings, demonstrating that current oversight is effective. Efficient Oversight in Ohio: In our state, we are already required to include a modifier on claims to prevent duplicate discounts. This direct approach is far more efficient than a convoluted and costly rebate system that allows manufacturers to retain funds longer. Reinvestment of 340B Savings: Family Health invests 100% of our 340B savings back into the community. Our 2026 analysis confirms these funds cover: o Treating uninsured/underinsured, Medicaid, and Medicare populations. o Bad debt and substance abuse treatment. o Psychiatry, Dental, and Clinical Pharmacy services. o Free medication delivery and Patient Assistance programs. o Case management and community health presentations. Nationally, CHCs serve 1 in 10 Americans while accounting for just 1% of total national healthcare spending, generating billions in savings by reducing ER visits and hospitalizations. Locally, Family Health has served our farming community for over 50 years. We provide care to 27,486 patients (including 1,297 veterans) through 115,126 annual visits, reaching 65 ZIP codes across 11 counties. Our missionto provide quality, cost-effective healthcare and promote wellnessdepends on the continued strength of the 340B Program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers. 3 II. Patient Impact The 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients CHCs serve. For the uninsured and underinsured patients who rely on 340B affordability, this model renders critical medications financially unattainable. Forced therapeutic interchangesoften required when primary medications become too expensive introduce significant clinical risks, including medication nonadherence, treatment delays, and adverse health outcomes, particularly for patients managing multiple chronic conditions who have few alternatives. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 manage chronic conditions prevalent in primary care settings. CHC patients, who studies show have a significantly higher prevalence of diabetes, hypertension, and obesity compared to the general population1, will be disproportionately affected by these changes. Clinical Risks of Access Barriers Anticoagulants: Direct oral anticoagulants (DOACs) like Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. Recent changes in the qualification criteria for Inflation Reduction Act (IRA) drugs have reduced the number of patients who qualify for direct manufacturer patient assistance, making 340B pricing the essential safety net. Discontinuing these drugs is linked to a statistically significant increase in the risk of stroke, heart attack, and death2. SGLT2 Inhibitors: Medications such as Farxiga and Jardiance are mainstays for Type 2 Diabetes, chronic kidney disease, and heart failure. These are our preferred treatments. Research indicates that even a 30-day withdrawal increases the annualized risk of cardiovascular death or heart failure hospitalization3. Under a rebate model, because we cannot confirm if or when a rebate will be honored, we may be unable to offer these medications on a sliding fee scale at the time of dispense. Mental Health: With 23.4% of Americans living with a mental illness4, the inclusion of behavioral health drugs in 2027 is alarming. Atypical antipsychotics like Vraylar are the mainstay for treating Schizophrenia, and Austedo is critical for treating Tardive Dyskinesiaa condition where studies show 73% of treated patients achieve significant 1Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 improvement5. A rebate model creates regulatory barriers that could exacerbate the ongoing national mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. Over 3 million Americans rely on CHCs for essential diabetes care6, and for these individuals, insulin affordability is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounts in a retrospective rebate model. Because the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the 340B price, the medication becomes unattainable for the patient at the point of care. This precludes CHCs from fulfilling their legal obligation to offer the required discount, while simultaneously violating the state Medicaid fee-for-service (FFS) "cost plus dispensing fee" compliance requirements. Imposing this model on CHCs weakens the safety-net providers that 52 million Americans rely on. CHCs are required to provide sliding-fee discounts to patients at or below 200% of the federal poverty guidelines. Without the up-front 340B discount, providing these drugs becomes operationally impossible. This model creates a significant barrier for our most vulnerable, uninsured patients who have no other options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A. 340B Rebate Model Operational & Administrative Cost Calculator To evaluate the financial and operational impact of manufacturer restrictions and the proposed rebate model, Family Health utilized the Operational & Administrative Cost Calculator developed by NACHC and FQHC 340B Compliance. This tool incorporates program savings, UDS financial data, staffing needs, and external consulting expenses to forecast total operational strain. CHCs have already experienced substantial increases in operational expenses due to the growing number of manufacturer restrictions, which now extend to clinic-administered drugs and entity-owned pharmacies. A rebate model would place even greater strain on these limited resources: Sliding Fee and Hardship Discount Impact: Family Health Services of Darke County, Inc. provided $840,000 in sliding-fee and hardship discounts in 2025 across all healthcare 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 services ($740,000 sliding; $100,000 hardship). This includes $300,000 specifically for discounted medications. Under a rebate model, our ability to continue offering these discounts would decline significantly. Because wholesale acquisition cost (WAC), rather than discounted 340B pricing, would be used to calculate chargesand because our current software vendor displays only WAC as the cost basiskeeping prescriptions affordable for sliding-fee patients would become operationally impossible. Staffing Impact: Family Health anticipates the immediate need for one additional full- time equivalent (FTE) employee at an estimated annual cost of $80,000. This role is necessary to manage the increased regulatory, operational, and compliance burdens, specifically to reconcile all rebates received against original claims and ensure all eligible rebate funds are recovered. External Vendor Costs: Due to the complexity of extracting data, preparing reports, and verifying payments, Family Health expects external support costs to increase by approximately $100,000 annually. This includes $60,000 for 1.5 contracted FTEs and $6,000 for quarterly pharmacy software price file uploads. These specialized functions (legal counsel, TPA coordination, and reconciliation) are too complex to manage internally without additional expert support. B. Comprehensive Workforce Impact Based on careful planning and review of current business practices, the administrative burden of reporting 340B rebate claims is unsustainable. National Alignment: Our projections align with internal NACHC assessments, where 47% of CHCs project needing up to 1 new FTE and 36% project needing up to 2 FTEs. Family Health expects the need for 1 internal FTE and 1.5 outsourced FTEs just to submit claims and appeal denials. Transaction Volume: In 2025, Family Health and its TPAs sold 7,751 packages of the 10 selected drugs. Managing the rebates for this volume across nine different drug companies with non-standardized requirements will force our staff to use multiple internal systems for the same data, increasing both cost and operational strain. Midwestern Comparative Data: Another Midwestern CHC serving 12,000 patients anticipates annual costs exceeding $3 million under this pilot. Family Health projects its own future staffing and contracting costs to be at least $180,000 annually. C. Pharmacy Software & Third-Party Administration (TPA) Changes Navigating this pilot requires more than staffingit demands significant upgrades to IT workflows. Implementation Costs: Family Health anticipates approximately $17,000 in one-time costs just to achieve baseline compliance. This includes $1,000 for IMS report development, $250 for PioneerRx reporting, and $16,020 ($1,335/month x 12) for essential eCW interface modifications. 6 Ongoing IT Costs: Ongoing TPA and software service fees to maintain tracking and reconciliation are estimated at $12,000 annually. For Family Health, the combined increase in labor, IT, and carrying costs is projected to total at least $29,000 annually beyond standard operations. D. The In-House Pharmacy: The Burden of Deep IT Integration As an operator of our own pharmacies, the rebate model is a major technological burden. System Interoperability: Family Health Pharmacy uses PioneerRx. We are already encountering a significant operational gap as policy requirements move faster than vendor software capabilities. Wholesale Acquisition Cost (WAC) does not reflect true acquisition cost once rebates are considered. Without systems that can reconcile these layers in real-time, any requirement to charge "actual cost plus a dispensing fee" becomes impossible to document for compliance. API Development: We anticipate one-time expenses of $30,000 for custom API development and pricing file integrations. Ongoing Resource Strain: Staff who currently fill more than 100,000 prescriptions annually would be diverted to manual administrative work. We estimate 40 or more staff hours each week would be needed to pull purchase files and verify claim-by-claim that rebate payments match required 340B pricing. E. The Contract Pharmacy: The Burden of Network Coordination Family Health partners with 90 pharmacies to increase access. The rebate model introduces risks that could dismantle this network: Verification Latency: Our staff must monitor claims across three in-house locations and 90 external locations. Existing rebate systems, such as the MFP system managed by Beacon, are currently inaccurateapplying rebates to drugs that shouldn't receive them while failing to rebate those that should. Risk of Pharmacy Exodus: Because this model shifts financial risk to the pharmacy, we fear partners like Walgreens will opt out entirely. Darke County is already part of the 17% of the U.S. population living in a pharmacy desert7. Nearly 30% of pharmacies closed between 2010 and 20218. Recently, a small independent chain near Darke County closed all five locations after 108 years of business; this pilot would further accelerate this decline. F. Clinic-Administered Drugs (CADs): The Burden of New Systems 7 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Implementing a rebate model for CADs would require new software and training, costing between $30,000 and $50,000 annually9. Bundled Payments: Most CADs are bundled into the Prospective Payment System (PPS) flat rate and are not included as discrete claims billed to payers. Inventory Realities: We use the Cardinal IMS system (costing $2,000/month) to track 340B compliance for CADs. However, this system is not programmed to provide the data fields required for reporting under the Rebate Model. Low Risk: In Ohio, modifiers are already used to prevent duplicate discounts in Medicaid. Including CADs in a rebate pilot would impose massive administrative costs without any proven benefit to program integrity. G. Financial Challenges: The Cash Flow Crisis Under the rebate model, Family Health must purchase medications at full WAC and wait for rebates. Liquidity Trap: This shift would force us to maintain approximately $1,000,000 in cash reserves just to cover drug invoices. Rebate Opportunity Cost: We estimate our 2027 Annual Rebate Opportunity Cost to be $90,000, representing the aggregation of anticipated rebate denials and the loss of prompt-pay and purchase-volume discounts. Comparison of Upfront Spend: Based on our purchasing data, it would cost $4,548,000 to purchase the 10 selected drugs at WAC. Currently, we spend $600,736 at 340B ceiling price. This is a 757% increase in upfront capital.10 11 H. Direct Impact on Essential Services To cover these upfront costs, Family Health would be forced to scale back: Clinical Pharmacy: Our program manages chronic conditions (hypertension, diabetes, COPD) and completed 386 appointments in March 2026 alone. We offer unique services like spirometry and Diabetes Self-Management Education (DSMES) which reduced average patient A1c from 7.86% to 6.76%. These programs are funded by 340B and would be jeopardized. Workforce: For every "Rebate Coordinator" we must hire, we lose the ability to fund a Clinical Pharmacist, Community Health Worker, or Pediatric Dentist, directly increasing wait times for all patients. Patient Financial Assistance: Our pharmacy technician helps 222 patients per year navigate manufacturer assistance for drugs like Eliquis and Jardiance. If 340B funding is 9 Internal NACHC survey data 10 https://340bpricing.hrsa.gov/ 11 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 diverted to "float" WAC costs, we may lose this position, forcing patients to ration or discontinue life-saving medications. I. Wholesaler and Credit Implications Credit Limits: Purchasing at WAC will likely cause us to exceed wholesaler credit limits, halting our ability to order medication. CHCs operate on thin margins and are seen as "high credit risks," making limit increases difficult. Tied-Up Cash: Family Health estimates that at 90-day intervals, the amount of cash "frozen" in the manufacturers system will be $1,000,000 in 2026, $1,300,000 in 2027, and $2,000,000 in 2028. Net Losses: A conservative 15% denial rate for rebates would result in a net annual loss of $90,000 in 2026, $130,000 in 2027, and $200,000 in 2028. This financial limbo is not sustainable. Every dollar "frozen" in a manufacturer's system is a dollar taken away from psychiatry, dental, and substance abuse treatment. IV. Reconciliation and Rebate Denials: Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm.12 Family Health recommends the following guardrails: Presumption of Validity: Rebate claims must be presumed valid unless a manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (e.g., 340B with MDRP or MDPNP). Standardized Denials: Manufacturers must provide standardized, publicly defined denial categories accompanied by claim-level documentation. Payment Timing: Requirements for rebate payment timing (e.g., a 10-day standard) must apply to both initial and corrected determinations to prevent manufacturers from using dispute processes as a delay mechanism. Enforcement Framework: HRSA should establish clear consequences for repeated late payments or improper denials by manufacturers. Burden of Proof: Manufacturers must bear the burden of establishing that a rebate is not owed, rather than requiring CHCs to prove eligibility for every transaction. 12 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 9 Statutory Patient Definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Stakeholder Advisory Panel: OPA should establish a panel to ensure the concerns of covered entities are formally addressed. This panel should include clinical pharmacists with subject-matter expertise in pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute. Our existing infrastructure ensures medications remain affordable while maintaining program integrity: Section 330 Alignment: In accordance with the Public Health Service Act, CHCs utilize sliding fee discounts based on income and household size, ensuring no patient is denied services due to an inability to pay. Eligibility Systems: CHCs maintain rigorous systems for eligibility determination, offering full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). Operational Oversight: We participate in regular HRSA Operational Site Visits (OSVs) and follow strict 340B compliance protocols, including internal audits, training, and external oversight. UDS Reporting: CHCs report 340B-related data annually through the Uniform Data System (UDS), including drug costs, revenues, and detailed patient demographics. Implementing a rebate model on top of this existing infrastructure is redundant and would cause disproportionate harm to the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse; we are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse (NCC) We recommend OPA utilize a Neutral Claims Clearinghouse (NCC). This approach produces more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to the proposed rebate model, an NCC would: Preserve Liquidity: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Reduce Burden: Substantially lower administrative costs by eliminating the need for CEs to build complex rebate compliance systems and hire dedicated reconciliation staff. Ensure Accuracy: Provide manufacturers with necessary deduplication data within the 45-day timeframe while reducing the time spent correcting manufacturer errors. Maintain Access: Protect patient access to affordable drugs by ensuring CHCs do not have to stop dispensing negotiated medications due to upfront capital requirements. 10 Medicaid Integration: Provide a standardized national approach to preventing duplicate Medicaid discounts by collecting and making 340B claims data available to states. Conclusion Family Health Services of Darke County, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A rebate model represents a fundamental departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide comprehensive care. This model would create significant cash flow challenges, forcing CHCs to make impossible decisions regarding staffing, services, and the range of medications they can afford to stock. It creates new, insurmountable barriers for our patientsespecially the uninsuredmaking it operationally impossible to provide the sliding fee scales required by law. We believe a 340B rebate pilot would cause disproportionate harm to our patients and the stability of the rural safety net. Family Health Services of Darke County, Inc. appreciates the opportunity to respond to this Request for Information. We look forward to continuing our engagement with HRSA on this critical issue. If you have any questions, please contact me or Kalie Riffle at kriffle@familyhealthservices.org. Sincerely, Jared Pollick Executive Director, Family Health Services of Darke County, Inc. jpollick@familyhealthservices.org
HRSA-2026-0001-1774Ryan Knox · United States2026-04-19T04:00Z19,327 chars
Please see attached. 1 April 19, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 340Bpricing@hrsa.gov RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, We are responding to the Request for Information, dated February 19, 2026, seeking comments on whether the Health Resources and Services Administration (HRSA) should implement a pilot program using a rebate model in the 340B Drug Pricing Program (340B Program).1 Our research has explored the intent, administration, oversight, and impact of the 340B Program, with a focus on understanding the regulatory landscape and safeguarding patients access to medicines in the healthcare safety net.2 Below, we provide recommendations on supporting the congressional intent and operational integrity of the 340B Program and highlighting the potential risks of implementing a rebate model in achieving these aims. (1) Drawbacks of the Rebate Pilot Program We are skeptical that a rebate model for the 340B Program would be beneficial or in support of congressional intent. Instead, we believe that a rebate model would harm the populations the 340B Program was created to protect. The 340B Program was created as a response to unintended consequences of the Medicaid Drug Rebate Program.3 Historically, pharmaceutical manufacturers had given substantial discounts (as high as 80%) to safety net hospitals, veterans hospitals, and federally funded clinics on their drug purchases.4 However, after the Medicaid Drug Rebate Program was enacted in 1990, 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287-7291 (Feb. 19, 2026); Request for Information: 340B Rebate Model Pilot Program Extension, 91 Fed. Reg. 9632 (Feb. 26, 2026). 2 See Ryan P. Knox & Ameet Sarpatwari, The 340B Drug Pricing Program: Administration, Litigation, and Reform, 77(2) OKLAHOMA LAW REVIEW 229 (2025) [hereinafter Knox & Sarpatwari, 340B Administration]; Ryan P. Knox & Ameet Sarpatwari, Legal Challenges to the 340B Drug Pricing Program: Administration, Regulation, and Reform, 3(8) HEALTH AFFAIRS SCHOLAR qxaf125 (2025) [hereinafter Knox & Sarpatwari, Legal Challenges]; Benjamin Y. Liu, Massimiliano Russo, Aaron S. Kesselheim, Ryan Knox, Ameet Sarpatwari, & William B. Feldman, Expansion of 340B Disproportionate Share Hospitals in the United States from 2010 to 2022, 60(4) HEALTH SERVICES RESEARCH e14446 (2025); Ryan P. Knox, Junyi Wang, William B. Feldman, Aaron S. Kesselheim, & Ameet Sarpatwari, Outcomes of the 340B Drug Pricing Program: A Scoping Review, 4(11) JAMA HEALTH FORUM e233716 (2023); Ryan P. Knox, Aaron S. Kesselheim, & Ameet Sarpatwari, Risks to the 340B Drug Pricing Program Related to Manufacturer Restrictions on Drug Availability, 327(17) JAMA 1647 (2022). 3 Knox & Sarpatwari, 340B Administration, supra note 2, at 235-36; Knox & Sarpatwari, Legal Challenges, supra note 2. 4 Knox & Sarpatwari, 340B Administration, supra note 2, at 235. 2 requiring that manufacturers give Medicaid their best price, pharmaceutical manufacturers ceased giving voluntary discounts on drug purchases to these providers. Safety net hospitals, veterans hospitals, and federally funded clinics reported significant price increases, ranging on average from 21% to 32%.5 A Texas health system reported the price of one common product (glyburide) almost doubling,6 and the VA found 12 drugs experienced price increases of over 300%.7 These price increases translated into tens of millions of more in annual prescription drug spending.8 On the whole, higher drug prices strained safety net providers thin budgets, forcing reductions in services and patient care.9 Some institutions, including VA hospitals, were at risk of downsizing or closure following these price increases.10 To combat these financial struggles, give providers needed relief, and allow covered entities to stretch scarce federal resources as far as possible, Congress enacted the Veterans Health Care Act of 1992, which gave statutory discounts to the VA and the Department of Defense and created the 340B Program.11 HRSA was required to calculate ceiling prices (or maximum prices for covered entities), and while the statute allowed these to be administered as a rebate or discount,12 the 340B Program has operated almost exclusively through a discount model since its inception.13 Covered entities have been able to continue, and in many cases expand, patient care and services, using revenue from the sale of 340B discounted drugs.14 A rebate pilot program, similar to the one proposed in 2025, would require covered entities to pay higher, wholesale prices on their drug purchases and submit claims in order to receive 5 Knox & Sarpatwari, 340B Administration, supra note 2, at 236 (citing H.R. Rep. No. 102-384, pt. 2, at 10-11 (1992)). 6 H.R. Rep. No. 102-384, pt. 2, at 10 (1992). 7 GOVT ACCOUNTABILITY OFFICE, MEDICAID: CHANGES IN DRUG PRICES PAID BY VA AND DOD SINCE ENACTMENT OF REBATE PROVISIONS 2, 12-13 (Sept. 1991), https://www.gao.gov/assets/hrd-91-139.pdf. 8 H.R. Rep. No. 102-384, pt. 2, at 10-11 (1992). 9 Knox & Sarpatwari, 340B Administration, supra note 2, at 235-36; Knox & Sarpatwari, Legal Challenges, supra note 2. 10 H.R. Rep. No. 102-384, pt.1, at 6-7 (1991). 11 Knox & Sarpatwari, 340B Administration, supra note 2, at 236 (quoting H.R. Rep. No. 102-384, pt. 2, at 12 (1992)); Knox & Sarpatwari, Legal Challenges, supra note 2; Knox et al., supra note 2. 12 42 U.S.C. 256b(a)(1). 13 The exception is state AIDS Drug Assistance Programs, one category of covered entity, which use a rebate model. U.S. Dept of Health & Human Servs., Health Resources & Servs. Admin., Notice Regarding Section 602 of the Veterans Health Care Act of 1992--Rebate Option, 63 Fed. Reg. 35239 (June 19, 1998); GOVT ACCOUNTABILITY OFFICE, PRESCRIPTION DRUGS: OVERSIGHT OF DRUG PRICING IN FEDERAL PROGRAMS 5 (Feb. 2007), https://www.gao.gov/assets/gao-07-481t.pdf. State AIDS Drug Assistance Programs are different from most covered entities in that they function as payers-of-last-resort programs and operate more like payers than most covered entities, which are generally healthcare providers delivering clinical services. See AIDS Drug Assistance Programs (ADAPs), KFF (2017), https://files.kff.org/attachment/Fact-Sheet-AIDS-Drug-Assistance-Programs; GOVT ACCOUNTABILITY OFFICE, RYAN WHITE CARE ACT: IMPROVED OVERSIGHT NEEDED TO ENSURE AIDS DRUG ASSISTANCE PROGRAMS OBTAIN BEST PRICES FOR DRUGS 2, 7 (Apr. 2006), https://www.gao.gov/assets/gao- 06-646.pdf. These differences, in turn, result in different financial considerations for state AIDS Drug Assistance Programs than other categories of covered entities, including with regard to both cash flow and compliance. 14 Knox et al., supra note 2. 3 rebates on these drugs.15 Consider, for example, a hypothetical drug with a list price of $1,000, a wholesale acquisition cost of $850, and a 340B discounted price of $550.16 Currently, covered entities purchase the drug for $550; under a rebate model, they would purchase that same drug for $850 and then receive a $300 rebate after the drug has been dispensed and a claim has been submitted to and approved by the drugs manufacturer. As seen here, rebate models result in higher initial expenditures on prescription drugs for covered entities. Further, the risk of improper inclusion or exclusion for discounts shifts in a rebate model from manufacturers to covered entities. Whether this shift would create a financial burden for covered entities has been disputed by stakeholders. HRSA estimated that data collection and compliance with the rebate model would cost covered entities $200 million annually.17 The American Hospital Association, in turn, estimated $400 million annually in administrative costs for compliance and described millions of dollars in costs associated with full-price upfront payments.18 By contrast, a study by IQVIA, focusing only on costs associated with the shift from upfront to rebate discounts as opposed to administrative costs, found that the estimated cash-flow costs of a rebate model would be small and likely not more than associated with current pharmaceutical acquisition models.19 Neither estimate fully captures the variations in the financial burden across providers, particularly for federally qualified health centers and other smaller or resource-constrained entities that may face liquidity challenges in the face of their already tight budgets.20 Any financial burden would also be exacerbated by delays in reimbursement, which must be taken into account in these evaluations. The proposed rebate model would undermine the intent of the 340B Program. By increasing upfront costs for covered entities, a rebate model re-creates the financial problem that the 340B Program was initially created to resolve: assisting covered entities in the face of high prescription drug prices.21 HRSA has previously and repeatedly expressed the opinion that the 15 U.S. Dept of Health & Human Servs., Heath Resources & Servs. Admin., 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, 90 Fed. Reg. 36163-36165 (Aug. 1, 2025); U.S. Dept of Health & Human Servs., Heath Resources & Servs. Admin., 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction, 90 Fed. Reg. 38165-38167 (Aug 7, 2025). 16 See Anthony M. DiGiorgio, Parisa Jahangirizadeh, & Deborah Williams, Mapping 340B Funds Flow Through Contract Pharmacies, 62 INQUIRY 469580251404363 (2025). 17 Complaint, Am. Hosp. Assn v. Kennedy, No. 2:25-CV-00600-LEW, at 26-27 (D. Me. Dec. 1, 2025), 18 Am. Hosp. Assn v. Kennedy, 164 F.4th 28, 32 (1st Cir. 2026); Am. Hosp. Assn v. Kennedy, No. 2:25- CV-00600-LEW, 2025 WL 3754193, at *8 (D. Me. Dec. 29, 2025); Complaint, Am. Hosp. Assn v. Kennedy, No. 2:25-CV-00600-LEW, at 30 (D. Me. Dec. 1, 2025). 19 Chuan Sun et al., How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, IQVIA (Dec. 2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in- 340b-white-paper-2025.pdf. 20 See also Am. Hosp. Assn v. Kennedy, 164 F.4th 28, 32-33 (1st Cir. 2026) (In support, the district court pointed to unrebutted evidence submitted by the hospitals that many of them operate with less than eleven days worth of cash on hand and that the Rebate Program would cause them to lose hundreds of millions of dollars per year that they could not recoup, thus threatening to close several hospitals.). 21 Knox & Sarpatwari, 340B Administration, supra note 2, at 235-36; Knox & Sarpatwari, Legal Challenges, supra note 2. 4 340B Program should be administered as a discount, not as a rebate.22 The courts have recognized HRSAs historical position and reiterated our concerns about the potential effect of a rebate model on the ability of covered entities to continue providing safety net healthcare.23 Notwithstanding the statutory language, covered entities reliance interests in the 340B Program continuing to be a discount program are reasonable and have become foundational to both the programs administration and the healthcare systems design. (2) Expanded Authority and New Transparency and Data-Reporting Requirements Other reforms should be pursued instead to improve accountability and oversight in the 340B Program without threatening its ability to continue to support the healthcare safety net. Currently, HRSA is largely limited in its ability to impose new program requirements for the 340B Program.24 Specifically, HRSA lacks broad power to implement binding rules clarifying or creating 340B Program policies, with an influential opinion from the D.C. federal district court articulating HRSAs rulemaking authority as limited to (1) the establishment of an administrative dispute resolution process, (2) the regulatory issuance of precisely defined standards of methodology for calculation of ceiling prices, and (3) the imposition of monetary civil sanctions.25 To change this, we recommend that Congress delegate greater rulemaking authority to HRSA so that it may administer and reform the 340B Program. Greater rulemaking authority should allow HRSA to address specific concerns in the 340B Program that it has been unable to in the past, including the role of contract pharmacies and the definition of a patient.26 In expanding HRSAs rulemaking authority, Congress should also direct HRSA to implement additional transparency and data reporting requirements to improve program integrity and oversight. Much criticism of the 340B Program comes from the fact that the 340B Program has grown dramatically in recent years, in ways that may be inconsistent with the 22 U.S. Dept of Health & Human Servs., Heath Resources & Servs. Admin., Limitation on Prices of Drugs Purchased By Covered Entities, 58 Fed. Reg. 27289, 27291 (May 7, 1993); U.S. Dept of Health & Human Servs., Heath Resources & Servs. Admin., Final Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Entity Guidelines, 59 Fed. Reg. 25110, 25113 (May 13, 1994); Complaint, Am. Hosp. Assn v. Kennedy, No. 2:25- CV-00600-LEW, at 14-19 (D. Me. Dec. 1, 2025). Note also that HRSA made clear in a 1998 Final Rule that it believed rebate models should be limited to state AIDS Drug Assistance Programs and not used by other categories of covered entities. U.S. Dept of Health & Human Servs., Health Resources & Servs. Admin., Notice Regarding Section 602 of the Veterans Health Care Act of 1992--Rebate Option, 63 Fed. Reg. 35239, 35241-42 (June 19, 1998). In that notice, HRSA agreed with a commentor saying state AIDS Drug Assistance Programs are different from other covered entities, more like State-run pharmaceutical benefit programs, and that the rebate model should only be allowed for their unique needs. Id. 23 Am. Hosp. Assn v. Kennedy, 164 F.4th 28, 32-33 (1st Cir. 2026); Am. Hosp. Assn v. Kennedy, No. 2:25-CV-00600-LEW, 2025 WL 3754193, at *5-*8 (D. Me. Dec. 29, 2025). 24 See generally Knox & Sarpatwari, 340B Administration, supra note 2; Knox & Sarpatwari, Legal Challenges, supra note 2. 25 Pharm. Rsch. & Mfrs. of Am. v. U.S. Dept of Health & Hum. Servs., 43 F.Supp.3d 28, 41 (D.D.C. 2014). See also 42 U.S.C. 256b(d)(1)(A)-(B), (d)(1)(B), (d)(3) (statutory provisions providing HRSAs specific rulemaking authorities); Knox & Sarpatwari, 340B Administration, supra note 2, at 247-50. 26 See Knox & Sarpatwari, 340B Administration, supra note 2, at 277-81. 5 programs original purpose.27 However, there is currently a lack of transparency in how 340B revenue is used by covered entities as most are not required to report this information.28 Federal grantee clinics currently have some reporting requirements, including how they have spent grant funds and data on the clients serviced and services provided,29 but this data is generally not publicly available.30 Other categories of 340B covered entities have no such reporting requirements. As a result, published studies on the 340B program are limited by the lack of transparency in how covered entities spend 340B revenue. These studies have reached mixed results, some finding benefits to patients and low-income communities and others finding growth associated with higher-income communities.31 Additional transparency and data reporting requirements reporting would provide valuable insight into whether the 340B program is operating consistently with its intended purposes. Some states have already implemented some of these requirements successfully and produced important findings. For example, a 2024 report from the Minnesota Department of Health estimated that $16 of every $100 in 340B revenue goes to contract pharmacies and third-party administrators, rather than covered entities or to subsidize patient care, which has garnered significant criticism.32 Bills have also been proposed in Congress that contained transparency requirements, including the 340B ACCESS Act of 2025 and the 340B Transparency Act of 2023.33 We believe these are important efforts in the right direction. As such, we recommend that all covered entities should be required to report to HRSA data on their use of 340B revenue. In particular, covered entities should report their spending on subsidizing uncompensated care, expanding health services, and providing free- or low-cost medication and care. Such transparency and data reporting requirements would help address current limitations in oversight and evaluation of the 340B Program and support future research and policy development. * * * 27 See Knox & Sarpatwari, 340B Administration, supra note 2, at 235-36; Knox & Sarpatwari, Legal Challenges, supra note 2; Knox et al., supra note 2. 28 KAREN MULLIGAN, THE 340B DRUG PRICING PROGRAM: BACKGROUND, ONGOING CHALLENGES AND RECENT DEVELOPMENTS 6-9 (University of Southern California Leonard D. Schaeffer Center for Health Policy & Economics Oct. 2021), https://healthpolicy.usc.edu/wp- content/uploads/2022/07/USC_Schaeffer_340BDrugPricingProgram_WhitePaper.pdf. 29 See, e.g., Report Data and Receive Technical Assistance | Ryan White HIV/AIDS Program, U.S. HEALTH RES. & SERVS. ADMIN., https://ryanwhite.hrsa.gov/grants/manage/reporting-requirements (last updated Feb. 2022). 30 ELEANOR BLALOCK, FEDERAL GRANTEE CLINICS AND THE 340B DRUG DISCOUNT PROGRAM 8 (BRG May 2023), https://www.powerslaw.com/wp-content/uploads/2023/05/BRG-Gilead-Study-May-2023- D1060624.pdf. 31 Knox et al., supra note 2; Samuel Thomas & Kevin Schulman, The Unintended Consequences Of The 340B Safety-Net Drug Discount Program, 55(2) HEALTH SERVS. RSCH. 153, 153-56 (2020) (discussing literature on the impact of the 340B program). 32 340B COVERED ENTITY REPORT: REPORT TO THE LEGISLATURE, MINNESOTA DEPARTMENT OF HEALTH (November 22, 2024), https://www.health.state.mn.us/data/340b/docs/2024report.pdf. 33 H.R. 5256, 119th Cong. (introduced Sept. 10, 2025) (340B ACCESS Act); H.R. 3290, 118th Cong. (introduced May 15, 2023) (340B Transparency Act). 6 Since 1992, the 340B Drug Pricing Program has provided valuable discounts on drugs to hospitals and clinics serving underserved populations. Still, there are limitations in the program necessitating reform. As HRSA works to reform the 340B Program, efforts must be consistent with Congresss original purposes in creating the program and not exacerbate current challenges in affordability, administrability, and oversight. We believe these recommendations would support HRSAs efforts to strengthen and sustain the 340B Program. We thank HRSA for the opportunity to comment on this Request for Information and provide feedback on the risks of a rebate model in the 340B Program. Sincerely, Ryan P. Knox, J.D. Ameet Sarpatwari, Ph.D., J.D. Jaharis Faculty Fellow Assistant Professor of Population Medicine DePaul University College of Law Harvard Pilgrim Health Care Institute and Harvard Medical School
HRSA-2026-0001-1775Coalition Against Socialized Medicine2026-04-19T04:00Z5,083 chars
Attached are comments from the Coalition Against Socialized Medicine. 1 To: Hon. Thomas J. Engels, Health Resources & Services Administration From: Andrew Langer, Executive Director, Coalition Against Socialized Medicine Date: April 20, 2026 Re: Comments on HRSAs Notice of the 340B Rebate Model Pilot Program Request for Information, Docket #HRSA-2026-03042, Published April 20, 2026 Introduction The Coalition Against Socialized Medicine (hereafter CASM) respectfully submits the following comments to the to the Health Resources & Services Administration (HRSA) of the Department of Health and Human Services (HHS) in response to the 340B Rebate Model Pilot Program Request for Information, Docket #HRSA-2026-03042, published in the Federal Register on February 17, 2026. CASM is a coalition of allied free-market, limited-government policy research, education, and advocacy organizations, and is led by the Conservative Political Action Coalition (CPAC), a non-profit, non-partisan 501(c)(4) research, education, and advocacy organization based in Alexandria, Virginia. Our coalition is dedicated to defending the free-market principles that uphold Americas healthcare system. CASM supports reforms that strengthen transparency and oversight, expand access to care, and help ensure that healthcare programs operate in a manner that truly benefits the vulnerable populations they are intended to serve. 340B Has Strayed from Its Original Purpose The 340B program was established in 1992 as part of the Veterans Health Care Act to provide affordable prescription drug prices to lower-income patients and vulnerable demographics. However, over time, the program has expanded significantly while oversight and transparency have not kept pace. As a result, there is growing concern that the current structure does not consistently ensure that 340B savings are being used to reduce costs for the vulnerable patients the program was designed to help. Rather than passing along discounts to patientsas the program originally 2 intendedmany covered entities retain those discounts and generate substantial profits. As a result, 340Bs drug sales continue to grow more than 20% annually, and healthcare costs remain high. The current program structure leaves it vulnerable to exploitation. Under the proposed Rebate Model Pilot Program, enhanced transparency and reporting requirements would help ensure that drug discounts are directed to the patients who need them the most and that participating hospitals deliver meaningful cost savings. This reform represents a critical step toward verifying that eligible patients receive the lower-cost medications the program was designed to provide. Illegal Duplicative Discounts are Slipping Through the Cracks As the program has expanded, oversight has lagged behind. This has enabled covered entities and providers to authorize illegal, duplicative discounts that further drive up healthcare costs. Under federal law, manufacturers must either provide the 340B discounted price or offer a Medicaid rebate for a drugnever both. Yet because the program lacks adequate safeguards, there are no reliable reporting requirements in place to identify when a drug has already been purchased at the 340B price. This gap enables double-dipping, in which participating hospitals receive the 340B discount while manufacturers simultaneously pay Medicaid rebates on the same medicines. In 2019 alone, participating hospitals were estimated to have claimed as much as $1.5 billion in 340B discounts on drugs for which manufacturers also paid Medicaid rebates. The lack of integrity throughout the program keeps healthcare costs high and adds unnecessary expenses to the system. Conclusion A properly implemented 340B Rebate Model Pilot Program would help curb waste, fraud, and abuse while strengthening the integrity of the 340B program. By ensuring discounts are used as intended and introducing long-overdue transparency measures, a rebate model would increase accountability within the system. CASM is encouraged to see HRSA taking steps to improve the program and solicit public feedback. The agency should continue to pursue reforms that restore integrity not only to 340B, but to Americas healthcare system as a whole, to prevent further abuse and help patients access affordable care. The rebate model places a strong emphasis on transparency and the need for genuine cost savings on prescription drugs, helping realign the program with its original purpose of delivering lower-cost care to patients. Strengthened data collection would provide clearer insight into how discounts are used and equip participating hospitals to better serve patients. 3 If the rebate model proves more effective than the current discount model, the Department of Health and Human Services should take steps to make the model permanent. Thank you for considering this matter. Sincerely, Andrew M. Langer Executive Director Coalition Against Socialized Medicine
HRSA-2026-0001-1776St Joseph Health2026-04-17T04:00Z13,185 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Joseph East, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Saint Joseph East Hospital is a not-for-profit, faith-based, 217-bed facility serving the residents of Lexington and surrounding communities. Saint Joseph East is home to our nationally recognized Women's Hospital and 16-bed Level III neonatal intensive care unit. We also offer a wide array of services to our patients including 24/7 Emergency, Neurology, Ear, Nose and Throat, Orthopedic Surgery, Heart & Vascular, Diabetes and Cancer Care. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Joseph East that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Saint Joseph East relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340B program is crucial to the health of our community. We use our 340B savings to provide ongoing Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 support services including social workers and support groups for our Cancer Survivors and their lives beyond cancer. We provide Diabetes and Nutrition education sessions to equip individuals who have diabetes with the knowledge and skills required to manage the disease and to reduce acute and chronic complications that may occur. Through our savings, we have employed multiple oncology pharmacists dedicated to our oncology infusion clinics to improve patient outcomes and keep a high standard of patient care. Without 340B savings, the hospital would be operating at a significant deficit, which could have an impact on the services we provide or the assistance we are able to give to the communities we serve. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jarrett Millsaps, FACHE President Saint Joseph East Lexington, KY As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Joseph East, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Saint Joseph East Hospital is a not-for-profit, faith-based, 217-bed facility serving the residents of Lexington and surrounding communities. Saint Joseph East is home to our nationally recognized Women's Hospital and 16-bed Level III neonatal intensive care unit. We also offer a wide array of services to our patients including 24/7 Emergency, Neurology, Ear, Nose and Throat, Orthopedic Surgery, Heart & Vascular, Diabetes and Cancer Care. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Joseph East that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Saint Joseph East relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340B program is crucial to the health of our community. We use our 340B savings to provide ongoing support services including social workers and support groups for our Cancer Survivors and their lives beyond cancer. We provide Diabetes and Nutrition education sessions to equip individuals who have diabetes with the knowledge and skills required to manage the disease and to reduce acute and chronic complications that may occur. Through our savings, we have employed multiple oncology pharmacists dedicated to our oncology infusion clinics to improve patient outcomes and keep a high standard of patient care. Without 340B savings, the hospital would be operating at a significant deficit, which could have an impact on the services we provide or the assistance we are able to give to the communities we serve. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jarrett Millsaps, FACHE President Saint Joseph East Lexington, KY
HRSA-2026-0001-1777PA Association of Community Health Centers2026-04-19T04:00Z19,329 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Pennsylvanias 54 Community Health Centers (CHCs) and the more than 1 million patients they serve, the Pennsylvania Association of Community Health Centers (PACHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, PACHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that should govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, PACHC explains: A. The importance of 340B savings to Pennsylvania CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their more than 850,000 low-income and uninsured patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protection that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harm. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served more than 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Pennsylvania 46% of 340B savings are allocated to uncompensated care. The remaining savings are used to fund free or discounted medication programs, allocated to direct patients care; new service lines based on community needs such as mobile units or nutrition services; or expanding dental services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Pennsylvania CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, monthly.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. PACHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Eric Kiehl, PACHC Director of Policy and Partnership at eric@pachc.org or 717-761-6443, ext. 206. Sincerely, Shelley Riser President and CEO Pennsylvania Association of Community Health Centers
HRSA-2026-0001-1778Broad Top Area Medical Center Inc.2026-04-19T04:00Z88,624 chars
See attached file(s) April 19 , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Broad Top Area Medical Center, Inc. (BTAMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: BTAMC anticipates a loss of more than $1,006,712 / e.g., a 17.75% reduction in savings for our contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. A. Introduction an overview of BTAMC and our patient population Broad Top Area Medical Center, Inc. (BTAMC) is a Federally Qualified Health Center (FQHC) located in Huntingdon County. BTAMC has 12 office locations, serving communities throughout the heart of Pennsylvania. A few of our clinic sites are in very rural areas where theres minimal or no public transportation. Several of our practices are within walking distance of schools and public housing. BTAMC has family practices and a dental office to care for pediatric, adult, and geriatric patients. We have a Walk-in Clinic with extended hours for acute care. Well serve minority, specialized, and transient populations without discrimination. In 2025, just over 19% percent of our unduplicated patients were at or below 200% of the Federal Poverty Level (FPL) and could qualify for Sliding Fee Scale Discounts (SFSDP). Just over 6% of our unduplicated patients were uninsured at their visit. 2 B. By law and by mission, BTAMC uses all savings resulting from participation in the 340B Federal Drug Discount Program to expand our patients access to affordable medication and other essential primary health services The intent and purpose of the Program is to allow covered entities to stretch scarce federal resources as far as possible and provide more comprehensive services. To reach up to 22,000 unique patients annually, the 340B Federal Drug Discount Program allows BTAMC to serve the community and meet our mission, vision, and values every day! BTAMC does not own an in- house pharmacy and does not dispense 340B Clinic Administered medication. We contract with a network of local 340B pharmacies five independent drug stores, two national chain stores, two regional grocery stores. Our contracted pharmacies can provide specialized packaging, drive-thru or delivery services, immunizations, telehealth counseling services, durable medical equipment, or diabetic footwear conveniently, during extended hours. BTAMC providers regularly collaborate with pharmacists to support our chronic disease management and transitional care programs. For best adherence and compliance, there is heightened focus on patient-centered/whole-person care. C. BTAMC makes prescription medication affordable and convenient for our patients Patients always have the freedom of choice to select a pharmacy that is most convenient for them. The 340B Program ensures that medications are affordable for all BTAMC patients, especially our most vulnerable. We offer aid to our patients who cannot afford prescription drugs. We can help our eligible patients reduce their out-of-pocket drug costs. BTAMCs self-pay patients, or those patients who have been qualified for our Sliding Fee Discount Program, who then also have proven barrier to affordable medications may qualify for BTAMC Prescription Assistance Program This benefit is only offered to our patients at our 340B contracted pharmacies. Well purchase and replenish 340B inventory for each contract pharmacy at discounted prices. The savings generated from 340B discounts is filtered right back into other BTAMC programs and services. D. 340B Savings is used to bolster essential primary care at every BTAMC practice location With recent shifts in the Program, our patient health outcomes could be at risk. Our quality assurance and improvement projects could suffer greatly. By reducing how we access 340B Drugs, vital savings that supports BTAMCs patient services like chronic care management or preventive and wellness initiatives, integrated behavioral/mental health, dental care, in-reach and outreach activities, Navigator-assisted insurance enrollment, provider recruitment, or I.T. infrastructure and security are all, threatened to be lost or discontinued without 340B! I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 3 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For BTAMC in particular, this means: A direct impact to our 22,000 eligible patients Decrease current annual 340B eligible prescription transactions from 10,975 Increased to current 340B administrative costs at $1,347,800 Reduce or eliminate pharmaceuticals and inventory management, primary medical, dental and integrated behavioral care services, coordinated and enabling services, patient access and assistance programs, clinical and administrative workforce, I.T. infrastructure and healthcare related business expenses. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. BTAMC significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. BTAMC is deeply concerned that implementing a rebate model would cause our CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis that are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: BTAMC provided $29,700 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: BTAMC anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, BTAMC does anticipate an increase to costs for external support vendors. These vendors may include our current 340B consultants, legal counsel, program coordinators and analysts, third-party administrators, electronic medical records platform providers, pharmacy software systems and gateways, or any reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 BTAMC estimates the need for at least one additional FTE in order maintain compliant oversite of Rebate Model activity. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At BTAMC, we specifically would need an additional $50,000 to $75,000 for salary and benefits. We currently do not have the manpower in order to maintain compliant oversite of Rebate Model activity. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. No less than 15 or 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers proposed plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Should a rebate model launch, BTAMC would respectfully urge HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to pay for custom dashboard modifications and design new internal workflows. BTAMC estimates that we might incur a one-time cost of $35,000 to $40,000 to implement new systems and processes that would be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 22,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 39,600 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with nine pharmacies to increase access to affordable medications, As the BTAMC service points grow and if we expands our dental services, in the near future we hope to open more clinic sites but in communities without a current contract pharmacy. Opportunities for new partnerships are on the horizon to maintain access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across nine different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts some financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Huntingdon and Mifflin Counties without affordable medication options. Because BTAMC has no in-house pharmacy operations, losing a 340B contract pharmacy partner could literally destroy our CHC. Weve experienced this in the recent past. It was difficult for patient and significantly reduced our 340B savings revenue when six local drug stores closed the doors. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. BTAMCs contract pharmacies cannot slide their dispense fees. However, our eligible patient prescription assistance program (EPPAP) enables our pharmacy partners to recognize our approved sliding fee scale patient and assists with determining a reduced, upfront cost for a covered outpatient drugs. The out-of-pocket charge for our patients prescription is simply the pharmacys dispense fee, our Cash Card fee, and the 340B cost of the drug. In turn, allowing our patients to get their life-saving medications at a price they can afford; meanwhile passing the full savings on to our patients. Drugs costs at WAC pricing would never be affordable for our sliding fee scale nor our uninsured patients. CHCs are particularly worried that the need to purchase drugs at full WAC pricing will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,192,625 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $180,992 to purchase these same drugs at the 340B ceiling price. This represents a 60175% increase in upfront capital required for procurement. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing under the rebate model, BTAMC can foresee needing to reduce and terminate certain supportive services or even reducing our hired staff and closing a practice site: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as in-reach and outreach education programs, Navigator assisted enrollment services, or immunization clinics for the children in our Amish community Operating Hours: We anticipate needing to reduce our clinic hours by 83 per week, specifically impacting our evening weekend and Walk-In Clinic hours, which are the only times our working-class and pediatric patients can seek care without losing wages, missing work or school. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, Dental Assistant or Dental Hygienist or substitute Radiology or Laboratory Technician. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,318 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. BTAMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling markdown on their drug purchases. Forcing a WAC-upfront model threatens a CHCs ability to meet their wholesalers terms and conditions. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, BTAMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $373,151. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. BTAMC estimates that purchasing the next 15 MFP drugs for 2027 at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend to $195,862. Thats an annualized increase by 28420% upfront cost of goods (COG) just to meet wholesaler payment terms. That would surely require $191,4145 necessary cash-on-hand every 30- days to pay for inventory costs; all the while waiting on pending or disputed rebates. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. The risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect on our community will be immediate. a. Financial Impact of Rebate Denials and Delays BTAMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of over $120,484 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays will create serious cash flow issues for CHCs operating on thin margins, which would depend on timely and accurate rebate payments to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with The Medicaid Drug Rebate Program (MDRP) or 340B with the Medicare Drug Price Negotiation Program (MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 14 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. Conclusion BTAMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. BTAMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The ripple-effect caused by the proposed Rebate Model Program will have impact on the health outcomes and pharmacy access in the community. BTAMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Patient Access Programs Director Rita Hollibaugh (rhollibaugh@broadtopmedical.com) OR our 340B Specialist Shamus Walker (swalker@broadtopareamedical.com). Respectfully, John Roth, M.D. Chief Executive Officer Broad Top Area Medical Center, Inc. JR/rah/sw CC: BTAMC Board of Directors, BTAMC Administrative Staff April 19 , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Broad Top Area Medical Center, Inc. (BTAMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: BTAMC anticipates a loss of more than $1,006,712 / e.g., a 17.75% reduction in savings for our contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. A. Introduction an overview of BTAMC and our patient population Broad Top Area Medical Center, Inc. (BTAMC) is a Federally Qualified Health Center (FQHC) located in Huntingdon County. BTAMC has 12 office locations, serving communities throughout the heart of Pennsylvania. A few of our clinic sites are in very rural areas where theres minimal or no public transportation. Several of our practices are within walking distance of schools and public housing. BTAMC has family practices and a dental office to care for pediatric, adult, and geriatric patients. We have a Walk-in Clinic with extended hours for acute care. Well serve minority, specialized, and transient populations without discrimination. In 2025, just over 19% percent of our unduplicated patients were at or below 200% of the Federal Poverty Level (FPL) and could qualify for Sliding Fee Scale Discounts (SFSDP). Just over 6% of our unduplicated patients were uninsured at their visit. B. By law and by mission, BTAMC uses all savings resulting from participation in the 340B Federal Drug Discount Program to expand our patients access to affordable medication and other essential primary health services The intent and purpose of the Program is to allow covered entities to stretch scarce federal resources as far as possible and provide more comprehensive services. To reach up to 22,000 unique patients annually, the 340B Federal Drug Discount Program allows BTAMC to serve the community and meet our mission, vision, and values every day! BTAMC does not own an in-house pharmacy and does not dispense 340B Clinic Administered medication. We contract with a network of local 340B pharmacies five independent drug stores, two national chain stores, two regional grocery stores. Our contracted pharmacies can provide specialized packaging, drive-thru or delivery services, immunizations, telehealth counseling services, durable medical equipment, or diabetic footwear conveniently, during extended hours. BTAMC providers regularly collaborate with pharmacists to support our chronic disease management and transitional care programs. For best adherence and compliance, there is heightened focus on patient-centered/whole-person care. C. BTAMC makes prescription medication affordable and convenient for our patients Patients always have the freedom of choice to select a pharmacy that is most convenient for them. The 340B Program ensures that medications are affordable for all BTAMC patients, especially our most vulnerable. We offer aid to our patients who cannot afford prescription drugs. We can help our eligible patients reduce their out-of-pocket drug costs. BTAMCs self-pay patients, or those patients who have been qualified for our Sliding Fee Discount Program, who then also have proven barrier to affordable medications may qualify for BTAMC Prescription Assistance Program This benefit is only offered to our patients at our 340B contracted pharmacies. Well purchase and replenish 340B inventory for each contract pharmacy at discounted prices. The savings generated from 340B discounts is filtered right back into other BTAMC programs and services. D. 340B Savings is used to bolster essential primary care at every BTAMC practice location With recent shifts in the Program, our patient health outcomes could be at risk. Our quality assurance and improvement projects could suffer greatly. By reducing how we access 340B Drugs, vital savings that supports BTAMCs patient services like chronic care management or preventive and wellness initiatives, integrated behavioral/mental health, dental care, in-reach and outreach activities, Navigator-assisted insurance enrollment, provider recruitment, or I.T. infrastructure and security are all, threatened to be lost or discontinued without 340B! We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For BTAMC in particular, this means: A direct impact to our 22,000 eligible patients Decrease current annual 340B eligible prescription transactions from 10,975 Increased to current 340B administrative costs at $1,347,800 Reduce or eliminate pharmaceuticals and inventory management, primary medical, dental and integrated behavioral care services, coordinated and enabling services, patient access and assistance programs, clinical and administrative workforce, I.T. infrastructure and healthcare related business expenses. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. BTAMC significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. BTAMC is deeply concerned that implementing a rebate model would cause our CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis that are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: BTAMC provided $29,700 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: BTAMC anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, BTAMC does anticipate an increase to costs for external support vendors. These vendors may include our current 340B consultants, legal counsel, program coordinators and analysts, third-party administrators, electronic medical records platform providers, pharmacy software systems and gateways, or any reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. BTAMC estimates the need for at least one additional FTE in order maintain compliant oversite of Rebate Model activity. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At BTAMC, we specifically would need an additional $50,000 to $75,000 for salary and benefits. We currently do not have the manpower in order to maintain compliant oversite of Rebate Model activity. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. No less than 15 or 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers proposed plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Should a rebate model launch, BTAMC would respectfully urge HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to pay for custom dashboard modifications and design new internal workflows. BTAMC estimates that we might incur a one-time cost of $35,000 to $40,000 to implement new systems and processes that would be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 22,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 39,600 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with nine pharmacies to increase access to affordable medications, As the BTAMC service points grow and if we expands our dental services, in the near future we hope to open more clinic sites but in communities without a current contract pharmacy. Opportunities for new partnerships are on the horizon to maintain access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across nine different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts some financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Huntingdon and Mifflin Counties without affordable medication options. Because BTAMC has no in-house pharmacy operations, losing a 340B contract pharmacy partner could literally destroy our CHC. Weve experienced this in the recent past. It was difficult for patient and significantly reduced our 340B savings revenue when six local drug stores closed the doors. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. BTAMCs contract pharmacies cannot slide their dispense fees. However, our eligible patient prescription assistance program (EPPAP) enables our pharmacy partners to recognize our approved sliding fee scale patient and assists with determining a reduced, upfront cost for a covered outpatient drugs. The out-of-pocket charge for our patients prescription is simply the pharmacys dispense fee, our Cash Card fee, and the 340B cost of the drug. In turn, allowing our patients to get their life-saving medications at a price they can afford; meanwhile passing the full savings on to our patients. Drugs costs at WAC pricing would never be affordable for our sliding fee scale nor our uninsured patients. CHCs are particularly worried that the need to purchase drugs at full WAC pricing will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,192,625 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $180,992 to purchase these same drugs at the 340B ceiling price. This represents a 60175% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing under the rebate model, BTAMC can foresee needing to reduce and terminate certain supportive services or even reducing our hired staff and closing a practice site: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as in-reach and outreach education programs, Navigator assisted enrollment services, or immunization clinics for the children in our Amish community Operating Hours: We anticipate needing to reduce our clinic hours by 83 per week, specifically impacting our evening weekend and Walk-In Clinic hours, which are the only times our working-class and pediatric patients can seek care without losing wages, missing work or school. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, Dental Assistant or Dental Hygienist or substitute Radiology or Laboratory Technician. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,318 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. BTAMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling markdown on their drug purchases. Forcing a WAC-upfront model threatens a CHCs ability to meet their wholesalers terms and conditions. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, BTAMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $373,151. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. BTAMC estimates that purchasing the next 15 MFP drugs for 2027 at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend to $195,862. Thats an annualized increase by 28420% upfront cost of goods (COG) just to meet wholesaler payment terms. That would surely require $191,4145 necessary cash-on-hand every 30-days to pay for inventory costs; all the while waiting on pending or disputed rebates. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. The risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect on our community will be immediate. Financial Impact of Rebate Denials and Delays BTAMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of over $120,484 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays will create serious cash flow issues for CHCs operating on thin margins, which would depend on timely and accurate rebate payments to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with The Medicaid Drug Rebate Program (MDRP) or 340B with the Medicare Drug Price Negotiation Program (MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion BTAMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. BTAMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The ripple-effect caused by the proposed Rebate Model Program will have impact on the health outcomes and pharmacy access in the community. BTAMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Patient Access Programs Director Rita Hollibaugh (rhollibaugh@broadtopmedical.com) OR our 340B Specialist Shamus Walker (swalker@broadtopareamedical.com). Respectfully, John Roth, M.D. Chief Executive Officer Broad Top Area Medical Center, Inc. JR/rah/sw CC: BTAMC Board of Directors, BTAMC Administrative Staff
HRSA-2026-0001-1779Texas Association of Community Health Centers2026-04-19T04:00Z7,977 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: The Texas Association of Community Health Centers (TACHC) would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to community health centers (CHC) ability to serve the most vulnerable members of our community. However, the proposed financial and operational burden imposed on safety-net providers through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Texas health centers utilize the 340B program to better serve almost 2 million Texans annually across the state. The 79 health centers in Texas operate over 700 clinic sites across 131 counties, providing medical, dental, behavioral health, pharmacy, vision, and other health services to Texas most hard-to-reach, medically underserved communities. In Texas, about 34% of health center patients are uninsured and 92% live below 200% of the poverty level, making 340B a critical lifeline to ensure health centers can offer low-cost drugs and services to their patients. Financial Instability and Cash Flow Risk The most immediate and severe consequence of a rebate model is the requirement that covered entities purchase medications at full wholesale acquisition cost and wait for reimbursement from manufacturers. CHCs operate on extremely thin margins and limited cash reserves. Many maintain fewer than ninety days of cash on hand and rely on predictable, upfront 340B pricing to maintain medication inventories and manage operating expenses. In 2024, Texas CHCs had an average operating margin of -2%, with two-thirds having a negative margin and one-third having 30 days or less of cash on hand. This has led to the closing of over 20 clinics, cutting of services, as well as freezing of hiring and wage increases. Health centers dont have the resources to pay substantially higher drug pricing under a rebate model and will be forced to reduce or eliminate some services as a result. Requiring payment at wholesale acquisition cost would dramatically increase upfront spending and place health centers at risk of exceeding wholesaler credit limits. Any interruption in credit availability could delay or halt medication purchasing entirely, directly affecting patient care. Even when rebates are ultimately paid, the lag between purchase, dispense, data submission, and manufacturer payment creates sustained cash flow exposure. If a rebate is delayed or denied, the health center bears the full financial loss after already dispensing medication to the patient at a discounted price. Under this model, health centers would be required to float significant capital for weeks or longer, diverting scarce resources away from staffing, clinical services, and patient support programs. Over time, this financial pressure would force difficult decisions such as reducing service hours, limiting the number of medications offered, or eliminating non-revenue generating services that are essential to patient outcomes. We are also very concerned about the possibility of expanding the rebate model to more drugs than have previously been proposed. Expanding the rebate model to additional Medicare negotiated drugs or converting the entire 340B program to a rebate structure, would significantly amplify the financial harm to community health centers. Each added drug would increase the amount of capital health centers must advance upfront, particularly as higher cost chronic and specialty medications are included. This expansion would deepen cash flow strain, increase the risk of exceeding wholesaler credit limits, and force reliance on borrowing to sustain routine pharmacy operations. A program wide shift to rebates would eliminate predictable drug pricing altogether, replacing it with ongoing financial uncertainty and delayed reimbursement. Over time, this instability would be unsustainable, forcing health centers to limit formularies, reduce pharmacy services, or discontinue access to certain therapies, directly compromising patient care and the safety-net mission of the 340B program. Operational and Administrative Burden A rebate model would also impose substantial new operational and administrative requirements on health centers. Covered entities would be responsible submitting and tracking detailed claims data, managing multiple manufacturer platforms, reconciling payments, and disputing denials. These functions would require additional staffing, training, information technology infrastructure, and contracted vendor support. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. As of this date, five) manufacturers now have announced requirements for claims data submissions for both contract and in-house pharmacies to be submitted to ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the ability of health centers to provide life saving medical care to Texans. Impact on Patient Access and Affordability Most importantly, a rebate model would jeopardize patient access to affordable medications. Community health center patients are disproportionately low income (92% are below 200% FPL in Texas), uninsured (34% in Texas), or underinsured, and many manage multiple chronic conditions. These patients depend on the ability of health centers to offer medications at reduced cost at the point of care through the upfront 340B discount. Without real time access to 340B pricing, patients could be exposed to prices, even discounted ones, based on wholesale acquisition cost. These new prices may be financially unattainable many Texas health center patients. As a result, patients may delay treatment, ration medications, or be forced to switch therapies for non-clinical reasons. This places health centers in an untenable position of choosing between financial viability, compliance with patient access obligations, and patient health. Conclusion TACHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates, taking federal 330 grant dollars out of patient care. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. TACHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. TACHC also encourages you to review the comments made by the National Association of Community Health Centers (NACHC) for analysis on further harms made by a rebate model and other considerations. TACHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Preston Poole at ppoole@tachc.org.
HRSA-2026-0001-1780(no commenter metadata)2026-04-19T04:00Z18,928 chars
Please see attached comment from the Alabama Department of Public Health. STATE HEALTH OFFICER April 16, 2026 Mr. Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Mr. Engels: Re: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287; February 17, 2026) The Alabama Department of Public Health (ADPH) appreciates the chance to provide comments on the proposed 340B Rebate Model Pilot Program. ADPH urges the Health Resources and Services Administration (HRSA) not to adopt a rebate-based framework for the 340B Program. The reasons for that are the detrimental effect such a program would have on ADPH's ability to care for patients, with the correspondingly larger impact on the public health of Alabama generally; the lack of available discretionary or gap funding to cover the initial upfront costs of the full-price drugs before rebates are received; the increased administrative costs resulting from the implementation of the program, both in terms of personnel, infrastructure, and re-training; and the difficulties in monitoring the status of rebates from the drug manufacturers. ADPH generally serves Alabama's citizens through the state's 70 county health departments. These clinics provide health services to the local populace. The areas covered by these clinics, and supported by ADPH's Central Office in Montgomery, that would most be affected by a 340B Rebate Program are family planning (FP), sexually transmitted diseases (STD), and tuberculosis (TB). While the Rebate Pilot Program does not include drugs specifically targeted for these areas, it is ADPH's duty to inform HRSA of the negative impact a rebate model would have if the rebate program were ever extended to all 340B medications. To understand that impact, it is first necessary for a brief description of what each of the above areas does for Alabama's citizenry. According to the latest figures, Alabama has one of the highest poverty rates in the nation, with 15.2 to 16 percent of the population subsisting below the poverty line in 2024-2025. While the health clinics' services are not means-tested, the clinics often are the sole source of care available to vulnerable groups such as the uninsured, the underinsured, low-income families and children, pregnant women and new mothers, older adults, and those living in rural areas with limited access to health care. The STD Division works to stop the further outbreak of STDs through its work with individual patients through the clinics__ MAILING ADDRESS Post Office Box 303017 I Montgomery, AL 36130-3017 PHYSICAL ADDRESS The RSA Tower I 201 Monroe Street I Montgomery, AL 36104 P'H AB alabarnapublichealth.gov Advancing public health performance Accredited Health Deparlrnent Mr. Thomas J. Engels April 16, 2026 Page 2 often treating both the patient with the disease and their sexual partner to prevent the spread of such diseases. In addition, should a baby be born with syphilis, the STD Division works to treat the infant as soon as possible to avoid as many damaging side effects from the disease as possible. The TB Division also works with individual patients; when a patient is prescribed medication for active or latent TB, the TB field workers ensure each dose is administered properly through individual verification. Sadly, the rates of both STD and TB are growing both nationally and in Alabama, making the health care services performed by ADPH even more critical. FP, on the other hand, works with contraceptives as well as education to help prevent unplanned pregnancies. The contraceptives used are available to the clinics through the current 340B Program. The following table, provided by data analysis of ADPH's electronic health record inventory system, shows the total number of 340B medications dispensed by each 340B Program in each county health department in Fiscal Year (FY) 2025, excluding Jefferson and Mobile counties. Jefferson and Mobile operate as independent county health departments and are not part of ADPH. ADPH Health 340B Programs Total Number of 340B Dis ensed Total Number of Patients Receiving Meds in FY 2025 340B Medications in FY 2025 (Deduplicated) Sexually Transmitted Diseases 41,788 22,675 Tuberculosis 6,513 534 Family Planning 68,018 34,935 Total for FY 2025 116,319 58,144 To summarize, from October 1, 2024, through September 30, 2025, there were 116,319 purchases of 340B medications at the current discounted rate, which helped 58,144 patients. It is worth noting that a particular medication may need to be administered to a patient more than once to ensure complete treatment. I. A REBATE PROGRAM WOULD HAVE AN EXCESSIVELY DETRIMENTAL EFFECT ON THE ABILITY OF ADPH TO CONTINUE CARING FOR PATIENTS AT THE CURRENT LEVEL, WITH A CORRESPONDINGLY GREAT IMPACT ON COMMUNITY HEALTH In its request for comments, HRSA overlooked a critical factor that should be considered in connection with any change to the 340B Program: the quality and amount of care that the local county health departments, along with ADPH, can provide currently versus the diminished amount of care that the same entities could provide under a rebate program. Cost considerations are important, but the detrimental impact on Alabama's citizens from a rebate program should also be weighed. ADPH's budget is set annually through the legislature. While ADPH is grateful for all funding that it receives, the fact remains that Alabama public health Mr. Thomas J. Engels April 16, 2026 Page 3 needs already outstrip the funding available, and certainly no funding exists for a "rainy day" or "discretionary" fund that could cover any gap between medications currently purchased at 340B discount prices and medications purchased at full price with the expectation of a later rebate. The gap between the two pricing models is considerable. For example, the current 340B cost for Nexplanon, a contraceptive implant in the arm effective for 5 years, is $559.29, while the full market cost is $1275.36. So, ADPH can budget, plan for, and purchase the contraceptive at that amount for the clinics at a predictable rate. However, under a rebate program, ADPH has no "rainy day" fund from which ADPH can draw to make up the difference until the rebate is received, nor is ADPH allowed to purchase items in arrears. Stated otherwise, the rebate program would create an immediate, unsustainable cash flow deficit for ADPH. Some people would have to be turned away and told to return later. Even if they return, which is not a given, the interval between the request and administration could lead to increased unintended pregnancies, which increases the burden on the child welfare system, as well as increasing the possibility that the children born from unintended pregnancies are exposed to adverse childhood experiences, with disrupted stability, safety, and support systems. As discussed later, the financial tracking and administrative side of a rebate program would also be difficult. The STD Division of ADPH has encountered a situation with Bicillin that gives a window into the type of care impact a rebate program could have. Bicillin is a drug that treats syphilis. Due to a recall by the manufacturer earlier, there is a shortage of Bicillin, which is the drug of choice to treat syphilis, infections of which are increasing. Because of the shortage, ADPH has restricted the administration of Bicillin to pregnant patients and infants born with the disease, with narrow exceptions that must be proven on a case-by-case basis to ADPH's medical officers. ADPH cannot provide the treatment to the partners of pregnant patients, who have also been exposed to, or are infected with, syphilis. Because the shortage is a relatively new phenomenon, ADPH does not know the exact rate at which syphilis infections have increased due to the lack of treatment, but it does know that there is an increase. The alternative treatment, a 14- or 28-day twice-a-day regimen of 100 mg of doxycycline, is one that fewer patients will complete due to non-compliance stemming from the complexity and length of the treatment regimen. The focus here is on the delay in the ability to receive the medication. A similar delay would ensue upon the establishment of a rebate program ADPH would not have the means to keep the correct amount of Bicillin available to treat patients immediately, leading to a delay in treatment and a corresponding increase in syphilis rates, particularly among the most vulnerable populations while treating congenital syphilis. One person infected with syphilis can infect every other person with whom he or she has sexual intercourse. A delay between diagnosis and treatment, caused by the need to purchase new medication only after ADPH receives the rebate, increases the likelihood that the infection will spread. As another example, to assess the potential financial impact, ADPH pulled historical purchase report data from the beginning of FY 2026 to date via Cencora, the 340B prime vendor wholesaler, for its STD, FP, and TB clinics. Using these files, ADPH compared 340B prices to wholesale acquisition costs (WAC) to determine the up-front costs of purchasing 340B rebate drugs. For purposes of providing cost estimates, ADPH has calculated the FY 2026-to-date costs for FP, STD, and TB drugs alone. Mr. Thomas J. Engels April 16, 2026 Page 4 STD between October 1, 2025, and February 26, 2026 (4 months): Transactions for all STD medications were 2,265; 340B invoice pricing $45,840.06; WAC $400,251.26 a savings of $354,411.20. It is important to note the syphilis treatment (Bicillin) upfront cost impact on ADPH's clinics. Currently WAC for Bicillin is $4,428.40 per box of 10; 340B pricing is $0.19. ADPH purchases approximately 310 boxes per year, which would equate to a WAC of $1,372,804, resulting in savings of $1,372,745.10. The proposed rebate model would cause an increase of greater than 1,000 percent yearly for Bicillin alone. In FY 2025, FP spent approximately $1,873,620.73 on purchasing contraceptives for its FP operations. FP offers contraceptives, including oral, injectable, implants, intrauterine devices (IUD), patches, and rings. Without the current 340B Program, ADPH would be unable to provide these FP services. Below is a breakdown of some contraceptives, comparing WAC and current 340B pricing, showing the difference that would need to be met if the 340B structure changed. 'Product Name Market Cost 340B Cost Difference Nexplanon $ 1,275.36 $ 559.28 $ 716.08 Li letta $ 1,000.00 $ 125.00 $ 875.00 Pa raga rd $ 1,320.00 $ 300.99 $ 1,019.01 Mirena $ 1,156.79 $ 269.40 $ 887.39 Kyleena $ 1,272.44 $ 298.00 $ 974.66 Totals $ 6,024.59 $ 1,552.67 $ 4,472.14 This total reflects the scale and complexity of ADPH clinic operations, including: High-volume FP, STD, and TB medication dispensing. Clinic-administered FP, STD, and TB drugs. Both dispensed and administered are captured in the electronic health record but are non-billable. ADPH will have to float the higher upfront costs, and accounting systems will need enhanced tracking to manage temporary drug spend increases of 500 percent to 5,000 percent until rebates are received. II. A 340B REBATE PROGRAM WOULD CREATE INCREASED ADMINISTRATIVE COSTS FOR ADPH FOR PERSONNEL, INFRASTRUCTURE, AND RE-TRAINING ADPH is aware that a major concern for drug manufacturers currently participating in the 340B Program is that the program is being misused through entities "double-dipping" - receiving the discount while also receiving reimbursement from other health insurance plans. In Alabama, ADPH has taken strenuous steps to ensure the integrity of the current 340B Program. First, ADPH provides its 340B medications to patients at no cost. Neither the patient, health insurance, Medicaid, nor Medicare are billed for medications. This policy is in place to prevent "double-dipping" situations. In addition, ADPH randomly audits each local health clinic on a rotating schedule to ensure compliance and accuracy with the 340B guidelines. Third, every member of ADPH or the local county health clinics involved in ordering, distributing, or Mr. Thomas J. Engels April 16, 2026 Page 5 administering 340B medications is required to complete APEXUS's 340B University every 5 years and an ADPH refresher course annually, so that each staff member is aware of the program's benefits and the important responsibilities for maintaining its integrity. ADPH already uses integrated systems and vendor support to monitor 340B compliance, including electronic health records, pharmacy dispensing systems, wholesale purchasing files, and document retention systems. ADPH retains the data as needed to meet all required compliance and external audit-readiness requirements. Specific mechanisms that ADPH employs include automatic validation checks, such as looking for missing fields, national drug code mapping, and eligibility flags; routine reconciliation of each order, by making sure that each drug that is dispensed is dispensed for an eligible reason and patient and is purchased and documented as required by the 340B Program; and periodic vendor controls testing and exception reporting. The current 340B Program has been in place for decades. Technology today, including inventory and accounting programs, is far more advanced than the technology that existed at the inception of the current 340B Program. The technology used by the various departments at ADPH to order, audit, track, and report on 340B has grown organically alongside the departments, meaning the up-front cost to acquire the necessary technology has been spread out over decades. During this period, ADPH has developed methods and programs to order, audit, evaluate inventory levels, track, and report on 340B drugs, as well as to integrate the 340B system into the Electronic Health Records (EHR). All those systems would need to be modified for a rebate program, and additional components would need to be added to track rebate requests and receive rebates. Additional personnel would be required, or personnel would have to be diverted from existing essential tasks to install, manage, and use those systems. For example, current internal administrative costs include program oversight and guidance; eligibility policies and protocols supporting compliance in the administration of medication; diversion prevention policies and ongoing monitoring of the same, including documentation, duplicate discount prevention, audit-readiness factors, and coordination of finance cycles with revenue cycles. The current third-party software costs are tied to EHR management. To implement a 340B Rebate Program, ADPH staff from Pharmacy, Finance, Administration, Information Technology (IT), Operations, Program Integrity and Compliance, the programs themselves, and Legal would need to work together in addition to their already assigned duties. ADPH would also need to hire additional full-time employees solely to handle rebate submissions, reconciliation, and dispute management on an ongoing basis. ADPH would also need to coordinate with its wholesaler. Costs that would increase under a 340B Rebate Program include additional man-hours, upgrading and implementing new IT systems and interfaces to support a rebate structure, third-party vendor costs, and compliance activities. Simply put, the administrative burden of managing a rebate claim system, including staff time required to track, verify, and dispute denied rebates, would divert funding away from patient services. A "compromise" in which only certain drugs in the 340B Program are subject to rebates would be the worst of both worlds: ADPH would have to retain the current structure for the discounted drugs while implementing the new rebate structure for drugs subject to rebates. Mr. Thomas J. Engels April 16, 2026 Page 6 III. DIFFICULTIES IN MONITORING REBATE REQUESTS AND REBATE FULFILLMENT In a "pure" rebate model, making the highly doubtful assumption that ADPH could maintain the same level of services, processing rebate claims and monitoring their receipt alone would be unmanageable. As noted above, the total number of dispensed 340B drugs in Alabama for FY 2025 was 116,319. Under the current program, 116,319 medications were purchased and administered once it was determined that the relevant administration protocols were met. Under a rebate program, 116,319 medications would need to be purchased, then administered once it was determined that the relevant protocols for administration were met, then 116,319 rebate requests would need to be filed with the relevant manufacturer accompanied by whatever proof of purchase and administration the manufacturer decides to require, any "kicked-back" requests would need to be altered for current formatting, 116,319 rebate payments would need to be received, and 116,319 rebate payments would need to be properly accounted for, at least tripling the amount of administrative work required to keep up with the program. Similarly, the FP Program spent approximately $1,873,620.73 on purchasing contraceptives to provide a full menu of contraceptives for Alabama citizens, including oral, injectable, implants, IUD, patches, and rings. Making the overly low assumption that the wholesale price of the contraceptives is only double that of the discounted price, to maintain the same level of services it currently provides, the FP Program would be required to pay up-front the sum of $ 3,747,241.46, and monitor each dose to ensure that it received the appropriate rebate, a massive drain on an already thinly stretched program. The difference between the discounted price of the contraceptives and the wholesale market cost is much higher, as shown in the chart on page 4. IV. CONCLUSION ADPH respectfully requests that HRSA decline to implement a 340B Rebate Model Pilot Program. Such a program, once extended to the types of drugs used by ADPH's programs and county health departments, would eviscerate ADPH's ability to meet the public health needs of Alabama citizens, with a correspondingly disproportionate negative impact on the disadvantaged, the elderly, and people in rural communities or other areas with restricted access to health care. Especially in light of ADPH's commitment to maintaining the integrity of the current 340B Program, such a result cannot be what HRSA intends. Thank you again for the opportunity to submit comments, and we appreciate your consideration. Sincerely, Scott Harris, M.D., M.P.H. State Health Officer SH/JD/RK
HRSA-2026-0001-1781Valley Health Systems, Inc2026-04-19T04:00Z61,164 chars
Please see attached file. Thank you, Ashley Houvouras April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Health Systems, Inc, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program as well as extending the comment deadline to April 20, 2026. Valley Health Systems is a Federally Qualified Health Center (FQHC) serving rural communities across southern West Virginia, southeastern Ohio, and eastern Kentucky. We operate a network of more than 60 locations, providing comprehensive primary and specialty careincluding pediatrics, OB/GYN, ENT, sports medicine, gerontology, and optometryto approximately 125,000 patients annually. As a safety-net provider in the Appalachian region, we serve communities facing persistent barriers to care, including geographic isolation, provider shortages, transportation challenges, and high rates of chronic disease. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring our health center to purchase medications at full price and wait for rebates, this model would cause significant financial hardship and directly affect our ability to serve our patients. Our 340B dollars are used for: Pharmacy services that provide affordable medications to patients. School based health programs that offer essential behavioral health support to students. Non-revenue-generating roles such as patient advocates, care managers, community health workers, and clinical pharmacistskey staff who help patients navigate complex care needs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Valley Healths patient population and payer mix seen through our 2025 UDS data demonstrates the high level of vulnerability among the patients we serve: 15,845 uninsured patients 42,533 Medicaid patients 10,022 Medicare patients 118,806 total patients reflected in UDS reporting This payer mix underscores our role as a safety-net provider and highlights the critical importance of maintaining affordable access to medications and services. In addition, Valley Health Systems provided over $1.5 million in sliding fee discounts, directly reducing financial barriers to care for low-income patients. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. For our sliding fee discounts, our pharmacy software calculates pricing based on the cost of each medication. This pricing file is provided by our wholesaler. If we are required to pay WAC pricing for a medication, our sliding fee discounts would not apply to any medications that receive a rebate. While it may be possible to manually override this process, doing so on a per-claim basis would be highly time-consuming and would require additional manpower. It would also increase the risk of errors. As a result, some patients may miss out on the full 340B discount if pricing discrepancies are not identified and corrected. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Staffing Impact: Valley Health anticipates needing an additional 2 FTEs or about $100,000 to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Valley Health anticipates an increase of $30,000 annually in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Valley Health estimates the need for about 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Valley Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Valley Healths seven in-house pharmacy locations operate using a physical inventory. Calculating the increased cost just to stock the necessary inventory will cost an additional 2.6 million dollars. Combining additional staff, a third party interface to help automate submissions, increased inventory cost at our in-house pharmacies, and the increased cost to pay up front WAC at contract pharmacies, we estimate an increase in total costs exceeding $4 million annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with sixty pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across sixty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in several WV counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $2.6 million to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Valley Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential positions, such as patient advocates, care managers, community health workers, and clinical pharmacists. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Valley Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Financial Impact of Rebate Denials and Delays Valley Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Valley Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Valley Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Valley Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mathew Weimer, CEO, at mbweimer@valleyhealth.org. Sincerely, Ashley Houvouras, PharmD Chief Pharmacy Officer Valley Health Systems, Inc 4290 US Route 60 Huntington, WV 25705 ahouvouras@valleyhealth.org April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Health Systems, Inc, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program as well as extending the comment deadline to April 20, 2026. Valley Health Systems is a Federally Qualified Health Center (FQHC) serving rural communities across southern West Virginia, southeastern Ohio, and eastern Kentucky. We operate a network of more than 60 locations, providing comprehensive primary and specialty careincluding pediatrics, OB/GYN, ENT, sports medicine, gerontology, and optometryto approximately 125,000 patients annually. As a safety-net provider in the Appalachian region, we serve communities facing persistent barriers to care, including geographic isolation, provider shortages, transportation challenges, and high rates of chronic disease. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring our health center to purchase medications at full price and wait for rebates, this model would cause significant financial hardship and directly affect our ability to serve our patients. Our 340B dollars are used for: o Pharmacy services that provide affordable medications to patients. o School based health programs that offer essential behavioral health support to students. 2 o Non-revenue-generating roles such as patient advocates, care managers, community health workers, and clinical pharmacistskey staff who help patients navigate complex care needs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Valley Healths patient population and payer mix seen through our 2025 UDS data demonstrates the high level of vulnerability among the patients we serve: 15,845 uninsured patients 42,533 Medicaid patients 10,022 Medicare patients 118,806 total patients reflected in UDS reporting This payer mix underscores our role as a safety-net provider and highlights the critical importance of maintaining affordable access to medications and services. In addition, Valley Health Systems provided over $1.5 million in sliding fee discounts, directly reducing financial barriers to care for low-income patients. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. For our sliding fee discounts, our pharmacy software calculates pricing based on the cost of each medication. This pricing file is provided by our wholesaler. If we are required to pay WAC pricing for a medication, our sliding fee discounts would not apply to any medications that receive a rebate. While it may be possible to manually override this process, doing so on a per-claim basis would be highly time-consuming and would require additional manpower. It would also increase the risk of errors. As a result, some patients may miss out on the full 340B discount if pricing discrepancies are not identified and corrected. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. 3 Staffing Impact: Valley Health anticipates needing an additional 2 FTEs or about $100,000 to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Valley Health anticipates an increase of $30,000 annually in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Valley Health estimates the need for about 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Valley Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Valley Healths seven in-house pharmacy locations operate using a physical inventory. Calculating the increased cost just to stock the necessary inventory will cost an additional 2.6 million dollars. Combining additional staff, a third party interface to help automate submissions, increased inventory cost at our in-house pharmacies, and the increased cost to pay up front WAC at contract pharmacies, we estimate an increase in total costs exceeding $4 million annually. 4 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with sixty pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across sixty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in several WV counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,1 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.2 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.3 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. 1 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 2 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 3 Internal NACHC survey data 5 HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.4 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.5 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. 4 HRSA FAQ 5 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 6 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).6 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B7 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.8 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 6https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 https://340bpricing.hrsa.gov/ 8 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 7 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $2.6 million to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Valley Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential positions, such as patient advocates, care managers, community health workers, and clinical pharmacists. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Valley Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 8 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. a. Financial Impact of Rebate Denials and Delays Valley Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.9 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. I. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 9 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 9 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. II. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. III. Establishing a National, Neutral Claims Clearinghouse 10 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Valley Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Valley Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Valley Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mathew Weimer, CEO, at mbweimer@valleyhealth.org. 11 Sincerely, Ashley Houvouras, PharmD Chief Pharmacy Officer Valley Health Systems, Inc 4290 US Route 60 Huntington, WV 25705 ahouvouras@valleyhealth.org
HRSA-2026-0001-1782Mariposa Community Health Center2026-04-19T04:00Z3,438 chars
HRSAs proposed 340B rebate model poses serious risks to the financial stability and operational viability of community health centers and Disproportionate Share Hospitals (DSH)providers that already operate on exceptionally thin margins while caring for the nations most vulnerable patients. While the model is framed as a mechanism to improve transparency and reduce federal spending, its design would unintentionally destabilize safetynet providers that depend on the 340B program to sustain access to care in underserved communities. For health centers, the rebate model directly threatens the resources that support essential enabling services such as care coordination, transportation assistance, behavioral health integration, and slidingfee discounts. These services are largely unreimbursed but are foundational to the mission of federally supported health centers serving patients facing economic, geographic, and social barriers to care. By moving the 340B benefit away from the point of sale and delaying or redirecting savings through a rebate mechanism, the model would undermine health centers ability to reliably fund these services. As a result, many health centers could be forced to reduce outreach, limit staffing, or restrict access to highcost medications critical to managing chronic and complex conditions. DSH hospitals would face similarly profound consequences. These institutions provide a disproportionate share of care to uninsured and underinsured patients and rely on 340B savings to offset substantial uncompensated care costs. The proposed rebate model would erode this support, weakening hospitals ability to sustain highacuity services such as trauma care, neonatal intensive care, and emergency services that are financially untenable without supplemental funding. In rural and lowincome urban areaswhere DSH hospitals often serve as the sole source of comprehensive inpatient and emergency carethe loss of 340B resources could accelerate service reductions or increase the risk of hospital closures. Beyond the financial harm, the rebate model introduces significant administrative and operational complexity that disproportionately burdens safetynet providers. Implementing a rebatebased system would require new processes for tracking, reconciling, auditing, and complying with manufacturer rebatesnecessitating additional staffing, IT infrastructure, and compliance oversight. While large, wellcapitalized health systems may absorb these burdens, health centers and DSH hospitals lack the financial flexibility to do so. The result would be a diversion of scarce resources away from direct patient care and further operational instability at a time when safetynet providers are still recovering from workforce shortages, inflationary pressures, and the lasting effects of the COVID19 pandemic. Ultimately, the proposed HRSA 340B rebate model risks weakeningnot strengtheningthe healthcare safety net relied upon by millions of lowincome, uninsured, and medically complex patients. Any reform to the 340B program should preserve the programs core purpose: enabling safetynet providers to stretch limited resources and expand access to care. Without significant reconsideration, the rebate model threatens to undermine that purpose and exacerbate health inequities in the communities least able to absorb additional disruption. Michael Castillo Chief Pharmacy Officer Mariposa Community Health Center
HRSA-2026-0001-1783UCHealth2026-04-19T04:00Z35,091 chars
Thank you for the opportunity to provide public comment. Please see attached comments from UCHealth. Respectfully, Majid Majid Tanas, PharmD, MHA, MS, FACHE, FASHP System Vice-President of Pharmacy Services UCHealth Leprino Building Department of Pharmacy Services 12401 E. 17th Ave. Aurora, CO 80045 Mail Stop: A027 O 720.848.7378 majid.tanas@uchealth.org uchealth.org April 19, 2026 VIA ELECTRONIC FILING - http://www.regulations.gov Mr. Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services Docket No. HRSA-2026-03042 5600 Fishers Lane, Mail Stop 08W05A Rockville, MD 20857 Re: 340B Rebate Model Pilot Program, Request for Information Dear Administrator Engels, On behalf of University of Colorado Health (UCHealth) and its affiliated covered entities, I would like to thank the Health Resources and Services Administration for allowing an extended comment period. We have completed a review of the proposed impact of the changes to this program, and this time has been helpful to provide input into the suggested changes. UCHealth, an independent, nonprofit health system located in the State of Colorado, respectfully submits feedback on the proposed 340B Rebate Model as requested by the Health Resources and Services Administrations (HRSAs) Notice 2026-03042. We appreciate the opportunity to provide information and feedback to HRSA as it considers a monumental policy shift which will disrupt the processes and platforms that have safeguarded and guided the operations of 340B programs over many decades. The 340B Drug Pricing Program (340B Program) was implemented by Congress to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services1 and is only available to entities who serve and care for the nations most vulnerable populations. The 340B Program is a fundamental pillar of the nations safety-net healthcare system and a key tool for maintaining patient access to essential services. We strongly urge HRSA to maintain the 340B Program as an upfront discount medication program and not fundamentally transform the 340B Program into a rebate model, as proposed by pharmaceutical manufacturers. As further described below, such a change would drastically impact the availability of services and the quality of overall patient health in Colorado and across the nation. HRSA should instead consider other options to address manufacturers concerns related to duplicate discounts which would 1 340B Health. 340B Drug Pricing Program Overview of the 340B drug pricing program. Accessed March 21, 2026. htps://www.340bhealth.org/members/340b-program/overview preserve the integrity and spirit of the 340B Program, such as a third-party clearinghouse that blinds covered entity and patient data from manufacturers. About UCHealth UCHealth is a $9 billion organization with more than 37,000 employees operating a large, integrated network of hospitals, clinics, and practices that supports our patients and local communities throughout Colorado, and parts of Wyoming, Utah, Montana, and New Mexico. UCHealth operates the only academic medical center in the State of Colorado and invests in the health of the populations it serves through the provision of uncompensated care, research, education and many other community benefits. Each year, UCHealth cares for more than 196,000 hospital patients, delivers over 18,000 babies, handles upwards of 760,000 emergency department visits, carries out more than 120,000 surgeries, and manages over 9.4 million outpatient appointments throughout its network of hospitals, free-standing emergency departments, urgent care centers, and ambulatory clinics. UCHealth provided more than one million Medicaid patient visits and admissions in 2025 and is Colorados largest provider of Medicaid services. In total, UCHealth provided $762 million in uncompensated or undercompensated care that is subsidized by savings generated through its participation in the 340B Program. Despite the size, scale and breadth of its services, UCHealth is not immune to the impact of policies which serve only to add administrative burden and cost to the provision of healthcare. The Healthcare Landscape The latest Hospital Flash Report from the firm Kaufman Hall, which samples 1,300 hospitals of various sizes and geographies, reports a year-to-date median operating margin of 2.1%.2 In general, hospitals should maintain an operating margin of at least 3% when targeting financial sustainability.3 Rating agencies are aligned in their views that the non-profit hospital sector is moderating, but even high performers trail pre-pandemic performance.4 Hospitals have turned to their balance sheets when possible, eroding days cash on hand, in order to absorb the financial shocks driven by an aging population, greater utilization aligned to the prevalence of chronic disease in the population, greater labor costs tied to workforce shortages, and surging drug, device and supply costs.5 Drug costs, which have increased more than twice the rate of inflation,6 are a significant factor pressuring hospital financials, and such impacts are not offset by the benefits offered through the 340B Program. 2 Kaufman Hall. Naonal Hospital Flash Report: January 2026 Data. Accessed March 21, 2026. htps://www.kaufmanhall.com/insights/research-report/naonal-hospital-flsash-report-january-2026-data 3 Fitch Rangs. Non-rang Acon Commentary: January 4, 2026. Accessed March 21, 2026. htps://www.fitchrangs.com/research/us-public-finance/early-median-signs-show-signs-of-life-amid-stress-for-us- nfp-hospitals-04-01-2024 4 HFMA. Healthcare Finance and Business Strategy News: December 12, 2024. Accessed March 21, 2026. htps://www.hfma.org/finance-and-business-strategy/hospital-financial-and-revenue-cycle-benchmarks-paint-a- complicated-picture-heading-into-the-new-year/ 5 Kaufman Hall. New Margin Math: January 22, 2026. Accessed March 21, 2026. htps://www.viziennc.com/insights/reports/annual-trends-and-forecasng-reports/2026-trends-report 6 AHA. 2024 Costs of Caring: May 2024. Accessed March 21, 2026. htps://www.aha.org/guidesreports/2025-04- 28-2024-costs-caring 3 The healthcare provisions contained within the One Big Beautiful Bill Act (H.R.1) will further reshape how clinical services for the most vulnerable patients are financed. H.R.1 will reduce Medicaid spending by approximately $911 billion over a 10-year period, driven by significant changes to eligibility requirements and limiting the amount of Federal funding that state Medicaid programs can access to finance care.7 These funding reductions will lead to growth in uninsured rates, charity care, and bad debt. The Advisory Board estimates that operating margins could decrease between 8 and 14 points for median systems with net operating revenues greater than $2 billion by calendar year 2028.8 Poor health outcomes will likely increase as some patients will elect not to receive care due to additional cost burdens. 340B Program covered entities (CEs) and the vulnerable populations served by those CEs are caught in the crossfire of misaligned and disruptive healthcare policy impacts. The 340B Program is a pillar of the safety-net system and it, like other foundational pillars, is under attack by pharmaceutical manufacturers who enjoy average annual margins of 23.2%.9 In total, manufacturers have undergone significant growth globally, with revenues totaling upwards of $1.7 trillion US dollars.10 In contrast, the amount of 340B medications purchased in 2024 was $81.4 billion, equaling less than five percent of total manufacturer revenues.11 The 340B Program is only available to entities who serve and care for the nations most vulnerable populations, in part as an attempt to compensate for the provision of uncompensated care and underpayment by Medicaid and Medicare for care provided. In fiscal year 2025, UCHealth and its affiliated CEs provided $762M in such uncompensated care, which dwarfs the savings UCHealth received through the 340B Program. Manufacturers have complained of wide-spread 340B Program noncompliance with the programs conditions of participation, primarily the supposed prevalence of duplicate discounts on the same prescription for a given patient and the diversion of prescriptions purchased at 340B pricing to persons who are not eligible patients. UCHealth strongly contends that other mechanisms exist to address these concerns without changing the fundamental upfront discount model that is core to the successful and cost-effective operation of the 340B Program. The impact of this change UCHealth strongly believes converting the 340B Program from an upfront discount model to a retrospective rebate structure would result in immediate and harmful consequences for patient access to care. 7 Kaiser Family Foundaon. Policy Research: July 23, 2025. Accessed March 21, 2026. htps://www.kff.org/medicaid/allocang-cbos-esmates-of-federal-medicaid-spending-reducons-across-the- states-enacted-reconciliaon-package/ 8 The Advisory Board. One Big Beauful Bill Act: Understanding the healthcare impacts. Accessed March 22, 2026. htps://www.advisory.com/content/dam/advisory/en/public/content-resources/2025/obbba- impacts.pdf.coredownload.pdf 9 The Campaign for Sustainable Rx Pricing. Report: January 13, 2026. Accessed March 21, 2026. htps://www.csrxp.org/csrxp-analysis-pharmaceucal-industrys-profit-margins-sll-10-mes-greater-than-other- sectors-of-drug-supply-chain/ 10 Global Pharmaceucal Industry Stascs and Facts. Published December 18th, 2025. Accessed March 26, 2026. htps://www.stasta.com/topics/1764/global-pharmaceucal-industry/#topicOverview 11 2024 340B Covered Enty Purchases. December 2025. Accessed March 26, 2026. htps://www.hrsa.gov/opa/updates/2024-340b-covered-enty-purchases 4 UCHealth patients often face significant barriers to care, including transportation challenges, housing instability, language barriers, and limited access to pharmacies. Consistent with UCHealths mission to improve lives through healing, discovery, and innovation, the 340B Program enables timely access to essential medications and allows reinvestment of savings into community-based services that directly support patient health. The 340B Programs current discount model is critical because it allows medications to be dispensed when they are prescribed, without delay. A rebate model would reverse this structure by requiring covered entities to purchase medications at full wholesale acquisition cost and await manufacturer determination of rebate eligibility. This shift transfers financial risk away from manufacturers and onto safety-net providers and the patients they serve. In practice, hospitals and clinics would be required to advance capital for high-cost medications while awaiting reimbursement, even as patients require immediate treatment. Some valid rebate requests will inevitably be denied, leaving such organizations to manage additional expenses related to appealing the denials, or foregoing such revenue and further eroding operating margins. Safety net providers operate on thin margins, and increased acquisition costs will directly limit the ability to stock medications. Reduced inventory may result in delayed therapy initiation or loss of access altogether. These impacts would be felt most acutely by patients who rely on safety net systems for time- sensitive, life-sustaining therapies, including outpatient cancer treatments, transplant immunosuppressants, insulin, anticoagulants, and medications used to treat serious mental health conditions. For many of these patients, treatment cannot safely wait for retrospective financial reconciliation. When medications are not available at the time they are prescribed, patients may leave without therapy, delay care, or disengage from treatment entirely. The downstream consequences are predictable. Delays in oncology treatment can compromise outcomes. Interruptions in transplant medications increase the risk of graft rejection and hospitalization. Lack of timely insulin access can result in emergency department visits and preventable complications. Gaps in anticoagulation therapy increase the risk of stroke and death. In behavioral health, medication disruptions can destabilize patients and worsen an already critical mental health crisis. Beyond direct medication access, the proposed rebate model would weaken the broader safety-net infrastructure that supports patient care. UCHealth uses 340B Program savings to fund programs that address social determinants of health, including transportation assistance, language access services, care coordination, and outreach in underserved communities. Diverting resources to finance drug purchases while awaiting rebates would reduce the ability to sustain these programs. The proposed rebate model would further strain safety-net providers through materially increased administrative burden. A rebate model would require new systems, retraining staff, educating patients and providers, and reconciling rebate claims, all of which would divert time and resources away from direct patient care without providing any corresponding benefit to patients. The 340B Program was designed to expand access to care. A rebate model would instead condition treatment on retrospective manufacturer approval, delaying access to essential medications, weakening the safety-net system, and undermining the care available to vulnerable patients. Preserving the upfront discount model is essential to ensure that patients receive timely, life-sustaining care and that safety-net providers can continue to fulfill their mission. 5 HRSA has requested feedback across several domains as follows. Section One: Cost to Covered Entities Current Administrative Costs UCHealth serves more than 2.9 million unique patients per year and processes between 6,600 and 7,000 340B qualified outpatient prescriptions on average per calendar day through its retail pharmacy locations, both wholly-owned and contracted. The savings UCHealth has generated through the 340B Program are filling the reimbursement gaps from federal and state insurers, which allows UCHealth to remain the largest provider of Medicaid services in Colorado and to continue investing in vulnerable communities across the state, including Colorados rural mountain communities who live in healthcare service deserts. UCHealth has leveraged the 340B Program to expand its investments in critical services which are not self- sustaining, such as mental health services, and has continued to offer access to labor and delivery services even when other area providers have ceased offering these services.12 UCHealth operates the 340B Program compliantly and cost-effectively, leveraging a combination of centralized business process design, technology, and subject matter expertise, at a total cost of approximately $15 million to $20 million annually. The 340B Program is anchored and rooted in pharmacy procurement processes that is, 340B qualified prescriptions are directly purchased at the appropriate 340B price and validated using a Third-Party Administrator (TPA) to review the qualification for each order and subsequent procurement. UCHealth personnel monitor drug purchasing and fulfillment processes on a daily basis. Auditors are employed to oversee and review 340B procurement transactions across the pharmacy enterprise to ensure compliance with 340B Program requirements. In addition to internal, continuous monitoring, UCHealth also engages specialized third parties to perform annual independent audits of each CEs compliance program and procedures, and stewards the 340B Program through internal oversight systems to further ensure compliance. Finally, UCHealth engages specialized 340B legal counsel to offer guidance and support for the intricate aspects of the 340B Program. Estimated Incremental Administrative and Operational Costs Under a Rebate Model The proposed rebate model flips the operating model of the current 340B Program on its head, moving it from a procurement-centered model, as outlined in the legislation and as operated for several decades, to a clinical utilization model. Drug procurement processes must continue to ensure the replenishment of drug inventories; however, under the proposed rebate model, CEs will also be required to establish yet another new administrative process a revenue cycle function for 340B-qualified encounters while manufacturers will reap the reward. 12 Health Policy Today. Paent Access Report. December 5, 2024. Accessed March 22, 2026. htps://healthpolicytoday.org/2024/12/05/opons-for-obstetric-care-are-closing-naonwide/ 6 Under the proposed rebate model, CEs will be required to procure prescriptions using the standard wholesaler price (referred to as the Wholesale Acquisition Cost or WAC) and apply to obtain the appropriate rebate for each 340B qualified encounter. Managing the procedures required for applying and subsequently monitoring to ensure anticipated rebates are obtained closely parallels payer reimbursement protocols for medical services provided. Healthcare providers are required to design processes that align to each payers policies and rules or face the risk of a full or partial payment denial. Optum Healthcare estimated the national denial rate averaged 12% in 2023, up from 9% in 2016.13 Each one of these denials must be appealed, tracked, and worked, with a final denial rate ranging between 2.0% and 2.5%14, which means clinical services were provided with no reimbursement. It is entirely reasonable to expect similar denial rates under the proposed rebate model. The recently-implemented Maximum Fair Price (MFP) model provides evidence of the increased administrative burdens we would anticipate under the proposed rebate model. Under the MFP model, Medicare Part D claims are submitted to manufacturers for reimbursement at prices negotiated by Medicare. The MFP model currently only includes nine drugs. Of the claims submitted under the MFP model through the end of March 2026, only 38% of prescriptions were reimbursed correctly. The remaining 62% required manual intervention, with each claim taking up to six days to resolve. In addition, payment resolution routinely exceeds the required 10-day timeframe, often taking 15 or more days per interaction. The results of correlating the MFP program to the proposed 340B rebate process would be crippling. UCHealth has experienced delayed reimbursement for the current nine medications mandated in the MFP. The MFP program has necessitated new workflows and work queues introducing additional waste into the U.S. healthcare system as the program expands. Over the next two years, as additional medications are added, the administrative burden will increase significantly, requiring the hiring of additional staff to ensure appropriate reimbursement. Assuming this effort is correlative to the proposed 340B rebate program, approximately 62% of 340B reimbursement claims would require manual auditing. The proposed 340B rebate program provides no tangible value to health care providers and is another attempt by manufacturers to maximize their profits while collecting patient level data, subsidized by CEs, resulting in further straining the US health care system. Under the proposed rebate model, pharmaceutical manufacturers are analogous to commercial payors. Each manufacturer will desire to impose its unique rules and restrictions on what may or may not qualify for 340B pricing, as well as requirements imposed on CEs to prove that each 340B encounter meets those requirements. Additional costs will be required to establish and manage a revenue cycle function dedicated to 340B-eligible encounters which will be comparable to the function associated with obtaining reimbursement for health care services. Weve estimated the associated costs using proposals from third parties who have developed revenue cycle technologies to support these proposed new rebate processes with fees denominated as a percentage of rebate collections. In addition, weve considered our recent experience disputing denied rebates under the existing MFP program each disputed encounter takes 45 minutes on average to address in accordance with each manufacturers uniquely stated requirements. The activities performed 13 The Optum 2024 Revenue Cycle Denials Index. Accessed March 22, 2026. htps://marketplace.optum.com/content/dam/change-healthcare/marketplace-assets/outcomes-and- insights/2024-denials-index.pdf 14 Ibid. 7 by this new revenue cycle function will necessarily include data submission to each manufacturers preferred vendor, financial claim reconciliation, financial reporting at the claim level, management of claim status, rebate payment application, and dispute resolution. This program will essentially create a data stream for manufacturers that is currently firewalled unless required by an audit. In order to manage this programmatic change, UCHealth expects annual costs to increase by $25 million to $30 million, in addition to start-up costs of approximately $1 million. These costs will be additive to the procurement and compliance costs already burdening the 340B Program. Lastly, we anticipate manufacturer denials of legitimate claims ranging between 2.0% and 3.0% of existing 340B drug savings, which will reduce the financial benefit from this Program to UCHealth by another $8M to $12M annually. We estimate adding 18 to 20 full-time employees simply to manage dispute resolution processes based on our current experiences with the dispute resolution under the MFP. Section Two: Payment Timing and Potential Cash Flow Impacts to Covered Entities HRSA indicates that it expects manufacturers to remit rebate payments within ten calendar days of a complete claim submission. UCHealth spends approximately $1.6 million dollars per day on 340B eligible drugs. Under the proposed rebate model, this cash outlay would increase on average by 40% to 60%. Manufacturers have each defined specific parameters for what constitutes a complete claim under the proposed rebate model, meaning the ten-calendar day clock doesnt begin on the day the CE is required to procure the drug at WAC. The average time span between procurement and rebate receipt could easily span 30 to 60 days, increasing the need for working capital and reducing available liquidity as vendor payments are typically processed within 25 business days. Prompt payment discounts are available to UCHealth; however, these discounts may be forfeited if adequate liquidity is not maintained to cover the interval between payment and rebate receipt. Any rebate program, no matter how designed, will inherently pressure cash flow, increase operational complexity and costs. These facts are indisputable as discussed previously. However, if the risk that HRSA and the pharmaceutical manufacturers desire to mitigate is attached to Medicaid Duplicate Discounts and diversion, the likely best solution is to introduce a neutral clearinghouse, which is described below in more detail. Section Three: Rebate Denials UCHealth strongly believes that if a rebate model were to be implemented, HRSA should define specific denial criteria and manufacturers should not be in control of the denial process or have visibility to that Protected Health Information (PHI) data. Currently, each manufacturer is empowered to create and impose 340B eligibility criteria that varies and may not align to the legislative requirements imposed by HRSA on CEs. If manufacturers are allowed to dictate what constitutes an eligible claim, CEs are rightfully concerned that manufacturers will begin denying claims for inappropriate and illegal reasons, effectively placing the CE in the position of guilty until proven innocent through a protracted and costly dispute resolution process. 8 Section Four: Data Collected by Covered Entities Current Data Collection Processes Supporting Program Participation UCHealth collects various data to support compliance with 340B Program requirements across its various care sites, utilizing the services afforded by its TPA to assist in maintaining virtual inventories by National Drug Code (NDC). For outpatient encounters filled in one of our mixed-use or retail pharmacies, UCHealth extracts ADT files, dispense files, drug utilization files, patient encounter files, and E-prescribe files from our electronic health record (EHR) and transmits these data to our TPA. Purchasing data is transmitted to our TPA directly by our wholesaler, while any direct drug purchases bypassing our wholesaler are manually uploaded to the TPA platform. The TPA maintains a rule set that matches purchases and eligible encounters, and tracks accumulations on each NDC to inform replenishment at the appropriate price (i.e., 340B or WAC) when a full package size is reached. This program is audited at regular intervals to ensure the integrity of the process. Current Data Validation Processes Supporting Program Participation UCHealth relies on people, process and technology to validate data supporting the integrity of its participation in the 340B Program. Our controls are designed with redundancy to mitigate the risk of non- compliance. Our TPA's systems verify patient, location, and provider eligibility for each encounter in accordance with 340B Program rules. UCHealth specialists monitor daily EHR-to-TPA data transfers for completeness and accuracy. UCHealth performs reconciliation processes to ensure the accuracy of drug inventories at the NDC level. Such processes are designed to comply with current statute and prevent diversion and duplicate discounts. UCHealth 340B specialists maintain NDC-to-chargemaster crosswalks to ensure accuracy in claims data submissions. These teams also reconcile dispensing, purchasing, and billing records to ensure each 340B claim is supported by a valid outpatient encounter. Billing teams monitor claims for Medicaid eligibility changes, which are managed through timely reversal and re-adjudication processes. Lastly, UCHealth verifies that its NPI and Medicaid numbers are updated and match our OPAIS registrations. UCHealth performs self-audits of mixed-use areas, child sites, free-standing EDs, and contract pharmacies to verify all 340B claims meet eligibility requirements. The results of these audits are disclosed in quarterly governance meetings comprised of personnel from finance, reimbursement, compliance, and legal counsel. Lastly, annual independent external audits are also conducted at each CE to provide third-party validation of the integrity of the 340B Program in operation. Data Elements Required to Support a Potential Rebate Model HRSA should identify the data elements that support validation of the key elements contained within the definition of an eligible patient15, which largely mirror existing retail and contract pharmacy data elements 15 HRSA defines paent for the purpose of the 340B Program. Specifically for disproporonate share CEs, an individual is a paent only if (1) the covered enty has established a relaonship with the individual, such that the covered enty maintains records of the individuals health care; and (2) the individual receives health care services from a health care professional who is either employed by the CE or provides health care under 9 already supplied by many CEs participating in the 340B Program through these channels. However, simply expanding these elements to the administered medication channel will not be seamless, as not all elements are included in existing procurement and fulfillment processes. CEs should not be asked to supply extraneous data that is not directly relevant to qualifying the patient encounter as 304B eligible and may cross into PHI. Access to data by manufacturers should be limited to de-identified data obtained through a neutral third-party data broker. The data must not permit identification of the specific site, health system, or geographic region of a patient encounter or prescription fill, including indirect identification through site or region level attributes in compliance with existing laws surrounding PHI. There should also be a plan to revisit this program at one (1), three (3), and five (5) years to evaluate impact and determine if there has been any material harm to entities within the 340B Program. Privacy Concerns UCHealth is committed to securing the privacy of medical information belonging to the patients it serves. Transmitting medical data to third parties poses risks that must be managed. Any aggregator of these data will be at heightened risk for cyberattacks. Of note, the Berkeley Research Group, the parent company of Second Sight Solutions, operator of both the ESP and Beacon platforms used to support the existing MFP program, was targeted in a cyberattack in March 2025,16 highlighting this potential vulnerability. Deidentification should be performed as soon as it enters any data feed so that it may not be attributed to any single entity or patient level encounter. Manufacturers should be required to fund this third-party adjudicator as a part of the 340B Program but should have no access to any PHI data. Required Reporting by Manufacturers: The proposed rebate model, if implemented, should require full public reporting on all denials, identifying each manufacturer and medication, including the reason with substantiation by region. CEs should have access to summarized data for reconciliation. Tables should be published monthly that report denials organized by denial reason, including denial rates and amounts as compared to rebates provided. Manufacturers should also be required to report on the average time between claim submission and ultimate reimbursement, including their margins as a percentage of impact to the 340B program. Manufacturers should also be required to provide Pharmacy Benefit Manager (PBM) and wholesaler rebate level data for full public transparency of funds flow of this critical program. All reporting should be designed to support the transparent operation of the proposed model in accordance with regulatory requirements and should be monthly and ongoing throughout the period that a rebate program is in place. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot: UCHealth contends that a rebate model will introduce complexity and significant additional costs that will undermine the 340B Program and erode the benefits intended by Congress on which providers have relied for forty years. Only the manufacturers benefit from a rebate model as covered entities are required to contractual or other arrangements (e.g., referral for consultaon) such that the responsibility for the care provided remains with the CE. See Federal Register; Vol. 61, No. 207. Page 55157. Thursday, October 24, 1996. Accessed March 22, 2026. htps://www.hrsa.gov/sites/default/files/hrsa/opa/paent-enty-eligibility-10-24-96.pdf 16 BRG. Noce of Data Incident. March 2025. Accessed March 22, 2026. htps://www.thinkbrg.com/noce-of- data-incident/ 10 expend additional costs to procure additional software and personnel. Ultimately, the proposed rebate model only benefits the manufacturers, who can increase their margins via denials, and puts an already struggling American healthcare system at even further risk. If, despite the increased costs and risks discussed above, HRSA still determines the best path forward is a rebate program, UCHealth recommends that HRSA operate (or cause to be operated on behalf of the agency) a neutral and independent clearinghouse and firewall manufacturers from receiving any identifiable PHI data. All manufacturers and CEs participating in the 340B Program should be required to use this clearinghouse. Only those data elements required to support the validity of the encounter and eligibility of the patient should be submitted, and sensitive patient identifiable information should be redacted or replaced with unique identifiers to enable claim reconciliation while mitigating the risk of privacy concerns. A public report, including full funds flow to PBMs and wholesalers, should be provided for evaluation of the tool after six months, one (1), three (3), and five (5) years to help to ensure public transparency and measure the overall impact to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The role of the clearinghouse would be to reconcile and validate claims, informing CEs and manufacturers of the outcome. If a claim is submitted as a 340B encounter that is invalidated by the clearinghouse, the CE would be required to refund the ineligible 340B discount to the impacted manufacturer within 10 days of receiving the notice. There would also need to be penalties for poor performance in the 340B Program levied against manufacturers who do not comply with reimbursement processes in an adequate, objective timeframe defined by HRSA. The cost of the clearinghouse would be borne by the manufacturer in alignment with the previously issued Rebate Notice provided by HRSA. UCHealth appreciates the opportunity to provide feedback and perspective on this important issue and looks forward to continued dialogue with HRSA. The 340B Program is pivotal to the continued provision of healthcare services to vulnerable patient populations. In the face of unprecedented healthcare policy changes and in a post-pandemic era that is returning margins that are unsustainable for many healthcare providers, we urge HRSA not to add further complexity, significantly higher compliance costs, and additional revenue risks to an already over-burdened system. UCHealth is confident that the risks of diversion and Medicaid duplicate discounts can be managed without changing the 340B Program from its current upfront discount model. The complexity of the 340B program is woven into the fabric of the U.S. health care system. It is not a simple financial transaction as manufacturers would make it seem. This decision will have far reaching implications in the care 340B entities provide to their patients, their communities, and the health of Americans across the healthcare continuum. Respectfully submitted, /s/ Majid Tanas Majid Tanas, PharmD, MHA, MS, FACHE, FASHP System Vice-President of Pharmacy Service UCHealth
HRSA-2026-0001-1784(no commenter metadata)2026-04-19T04:00Z115,937 chars
On behalf of St. George Medical Clinic, Inc., I am happy to submit a public comment letter expressing the negative impacts onfinancial, administrative, and overall interruptions to patient care the 340b rebate model will cause our organization (staff and patients). St. George MEDICAL LLINIC April 7, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of St. George Medical Clinic, Inc. (SGMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharrnacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Our CHC reports an average loss of $3,328,928 for our entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even rnore devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as rnobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Ivtodel Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 8591 Hoily Meadows Road, Parsons, West VIrginia 26287, Phone 04-478-3339, Fax: 304-478-3311 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase rnedications at full price and wait for rebates, this model would cause significant financial turrnoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For St. George Clinic Pharmacies, in particular, this means it will impact: 70,172 340b transactions serving over 6,000 patients Current admin costs for our 340b program: $256,000 annually How do you use your 340B revenue specifically? SGMC uses 340b revenue in several areas: 1) Patient Assistance Programs subsidizing the cost of medications for low-income patients, 2) sustainability of operations: revenue supports the overall operating budget and supplements revenue services such as Physical Therapy, Optometry, and Dentistry, 3) Increase staff and services to access care by hiring of pharmacists, physicians, behavioral health providers, etc., 4) provide assistance to local non-profits who share the mission of SGMC (Family Resources Center, Womens Aid in Crisis, Community Action Programs, etc. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcornes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disniptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burdcn of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 2 of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation, For many of our patients, there are minimal - and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance IT4 would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedoo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted Richard P, Ku L, Dor A, 'Ian E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers, J Ambul Care Manage. 2012 Jan-Mar:35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6, PMII): 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/A.15415. Epub 2021 Jul 23. PM1D: 34060704; PMC1D: PMC8390436. Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doilpdf/10.116 I /circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.govidataidata-we-collectinsduh-national-surveydrug-use-and-healthinational-releases Hauser RA, et al. Long-Term Deutetrabenazine "I rcatment for Tardive Dyskinesia ls Associated With Sustained Henefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC89O6841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away frm direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningfiil safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Prograrn is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a halfyears to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further lirniting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or 4 reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, extemal consulting costs, dispensing/capture activity, and c!inic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: St. George Medical Clinic provided $350454 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: St. George Medical Clinic anticipates needing an additional 2.0 FTE's as a result of the Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, St. George Medical Clinic anticipates an increase of approximately $400,000 attributed to Rebate Model to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of irnplementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estirnate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 SGMC estimates an additional 2.0 FTE's will be required. Additionally, several CHCs estimate the cost to hire additional staffto be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing Internal NACHC assessment (99 responses). g Ibid. 5 drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SGMC estimates the additional cost for staff, fringe benefits, purchase of drugs, carrying costs, etc., to be between $80,000 - $120,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. SGMC estimates an additional 20-40 hours per week per FTE will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. St. George Medical Clinicl urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. SGMC estimates ONE-TIME COST totaling $75,000 - $100,000 vvill be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6,300 patients (36,000 visits) annually, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $12,000 - $20,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate inforrnation at the pharmacy counter. System lnteroperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. SGMC's system will provide detailed dispensing reports per manufacturer, schedule the reports, and manually upload data to each manufacturing site. 6 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. SGMC estimates $48,000 - $60,000 one-time integration cost. Ongoing Resource Diversion: Staffwho currently manage clinical pharmacy services will be forced to spend 30-40 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 3408 price. Clinic Administered Druo: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CLIC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CFIC to pay for a standalone software system. Minirnai Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. 7 The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.1 A CHC can adjust the cost of health care services, including rnedications, based on a patient's income and family size. SGMC offers a sliding fee discount at all clinic locations, including the pharmacy, that provides the patient with an avenue to obtain affordable medical/pharmaceutical services at a discounted rate based on income. If the costs for medications increase as planned, patients will not be able to afford their medication(s). CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 34013 prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically tum their inventory 10-12 times a year (roughly every. 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical HRSA FAQ 1 Such discounts are subject to potential legal and contractual restrictions. 8 inventory subrnitting data every 14 days would anticipate a purchase-to-rebate payrnent time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate FIRSA's requirement for a 10-day timefrarne for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MIT standard of 14 days from when the status is, corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and rnay undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CI-IC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Druz Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B" and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.12 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q 1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 11 htips://340bpricing hrsagov/ 12 h tip s. //www. cm s.go icsizi pi sc lected-dru g-1 i st-n ego U uteri -pi ces-al so-kno w n -m ax imu m -fai r- pri ces- statute zip. z i p 9 Rebate-Related Opportimity Costs: Based on percentages of loss of prornpt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost S3,376,086.93 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends 547,156.69 to purchase these same drugs at the 340B ceiling price. This represents a 7,059% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, St. George Medical Clinic anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Physical Therapy, Behavioral Health, and Dental. Operating Hours: We anticipate needing to reduce our clinic hours by ten (10) per week, specifically impacting on our evening and weekend hours, which are the only times our working-class, mining, forestry, and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time 1.0 FTE certified pharmacy technician, at least one 1.0 FTE case manager causing a direct increase in wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 576 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. St. George Medical Clinic asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This 10 approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, St. George Medical Clinic estimates its 2027 Annual Rebate Opportunity Cost to be approximately 5% to 12.5%. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. St. George Medical Clinic estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $3,376,086.93. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to irnmediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a commercial line of credit. This is not a sustainable solution; the interest costs alone are estimated to be approximately $300,000 ($6 Million at 5% interest) annuallyfunds that are currently dedicated to cover the cost of physical therapists and dentist, which are vital services to our health center operations. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on St. George Medical Clinic the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays St. George Medical Clinic urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environrnent that results in direct financial harm. The frarnework proposed 11 in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assurnptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $200,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 3408 price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. 11 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36463) https.//www. federalreg ister.ao v /docum en tsJ2025/08/01/2025 -14619/340b-zrogram-noti ce-anol i cation-process-fo r-the-340b- rebate-model-pilot-pow= 12 If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level docurnentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very iimited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the rnanufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (M13RP) or MDPNP, rebates must be paid, and the rnanufacturers must revert to the processes described in HRSA 19% Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.34 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B prograrn's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."15 Rebate payment timing requirements must apply to both initial and corrected determ i nations. Experience with existing manufacturer-run MFP de-duplication processes demonstrates that, even when a covered entity successfully contests a denial, payrnent is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial deterrnination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails ta provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. m Manufacturer Audit Guidelines https://www.hrsa.gov/sites/defaultifilesihrsa/opaidispute-resolution-orocess- l 2- l 2-96.pdf }5 3408 House Report Legislative History. H.R. REP. 102-384(11). 13 Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to retum a deterrnination,16 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-adrninistered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becorning a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late paymen s or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the intemal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the adrninistrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the 16 Administrative Dispute Resolution Regulation, https://ww govinfo.gov/contentipkgaR-2024-04-19/pdf/2024-08261pclf 14 manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignrnent occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities." Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 3408 Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 3408 claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the deterrnination process shared with CHCs. One exarnple is within MFP effectuation; the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codest8 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 3408 purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a 17 Section 340B ofthe Public lkalth Service Act, https:Pwww.hrsa.govirsitesidefault/filesffirsairural-healthiphs-act-section- 340b.pdf 18 btips://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validalion-codes-and-pricing-codes-glossary 15 mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Defmition PI 34413 Claim indicator Pricing Claim included a 340B modifier, P2 340B Claim Pricing Claim suhmitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 34013 purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract l'rice Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA Mf.R Reprice Pricing Value other than WAC used to deterrnine MFP refund amount. P8 Entity ldentified 34013 Pricing Claim manually identified as 34013 in Beacon by Dispensing Entity. P9 l"ricing Claim identified as 340B according to the aggregate 340B purchase history ofthe Dispensing Entity. 340B Pharmacy Allocation V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals ofthe pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.19 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CliCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. lnstead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation, Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support intemal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systerns solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. 19 https://public-inspectionfederalregister.gov/2025-14619.pdf?1753965918 16 Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.20 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary, For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including intemal audits, training, and external oversight. This demonstrates a proven ability to manage internal NACHC survey data 17 3408 with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 3408 program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price tiles to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. WI. The 3408 Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare [RA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 3408 rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,21 and a 3408 rebate model is not that. Several less burdensome alternatives are available for EMS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a govemment vendor or neutral clearinghouse without also requiring an upfront purchase of 3408-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee 5 U.S.C. 506-596, Food & Drug Admin.. I. ast Burdensome Provisions. Concept and Principles (n.d.), https://www.fda. viregulatorv-informationisearch-fda-guidanee-documentsfleast-burdensome-provisions-concept-and-principles (last visited Mar. 13, 241261; H.R. REP. 102-384(II)). 18 Schedule.22 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.23 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B clairns for purposes of the IRA. Many alternative options exist for deduplicating 3408 and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable cornmon practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."24 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 3408 rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer rnust provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. 22 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025), 23 CY 2026 PFS, Final Rule, htipsi/www.govinfo.gov/contentipkg/FR-2025-11-05/pdf/2025-19787.pdf 24 I-1,R. REP. 102-384(11) 19 Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute - not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."25 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."26 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."27 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. 2' 42 U.S.C. 256b(a)(1) 26 id. ' 7 42 U.S.C. 256b(a)(1) 20 The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,j shall not request payment under" the Medicaid FFS program for a 340B-priced drug.28 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.29 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.3 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . to audit . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug clairn to a state Medicaid FFS plan.3 I However, the 34013 statute grants neither El HS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. lt would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention ofthe term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.32 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. 2s Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the H.FIS may "cleveloplilmore detailed guidance describing methodologies and optwns available to covered entities for billing covered outpatient dnigs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's ohligated to do prevent duplicate discaunts. Id. 29 42 U.S.C. I396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims forrn (or format. where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 42 U.S.C. 256b(a)(5)(C). 31 42 U.S.C. 256b(a)(5)(C). 32 See 42 I.J.S.C 256b(a)(5)(A). 21 The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concemed that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340H drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, CHC's in West Virginia will pay the full wholesale acquisition cost (WAC) for drugs upfront. The CHC's will then submit claims to Medicaid to receive a post-dispense rebate, which requires precise tracking to avoid duplicate discounts and navigate the new cash flow. This requires significant upfront capital. This will require a "carve-in" designation, which SGMC currently does. SGMC will be burdened with software updates that track 340b-eligible clairns, and manage the administrative costslburden of waiting on rebates from manufacturing source. For Medicaid FFS retail pharrnacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.33 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340H-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid pla.n. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or rnay not be subject to a 340B rebate at the drugmaker's future discretion. C.F.R. 447.518(a). 22 Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Ofthe states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. in a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and crirninal liability under the False Claims Act. Accordingly, HIAS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possibk prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.34 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination ofthe pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers.-35 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. Ctrs. for Medicare & Medicaid Servs., IPA Y 2028 Final Guidance, https://www,cms.gov/files/documentlipay-2028-final- guidance.pdf 35 42 C.F.R. 447.502 23 In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."36 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."' Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-80)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid rnanaged care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B ' 6 [141: Cornment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No, HRSA-2025-0001-0095, https ://www,regu lat i ons. go v /co mment/IIR SA-2025-000 l -0095. 37 Comment on Agency lnformation Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/cornment/ERSA-2025-0001-0980 24 because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.38 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CI-IC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing lnformation Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 3408 OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.39 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 19050)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. "40 38 See, e.g , 31 U S C 3729 (making it ilfegal to overcharge a federal grantee). 39 42 C.F.R. 438.3(s)(7) Pie MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific 13ank Identification Number (BIN) arid Processor Control Number (PCN) combination, and group number idcntifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ectrgov/current/title-42,1chapter-lV/subchapter- Cfpan-438/subpart-Alsection-438.3 4 42 U.S.C. 256b(a)(5)(A)(ernphasis added). 25 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing lnformation Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TR1CARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federai discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. TRICARE reguiation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.'" The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a rnanufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. 4' 32 19921(q)(2)(iii)(E) 26 D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. the purpose of the 3408 Program is to enable covered entities to stretch scarce federal resources in order to offset the costs ofproviding care to uninsured and underinsured patients.42 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.43 Studies conducted by IQVIA and others demonstrate that pharrnaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.44 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.45 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.46 Drug industry data vendors have reported that such data is highly valuable to manufacturers.47 Further, rnanufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. '1 his is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CliCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 34(1B Program, which is to permit safety-net providers to generate savings on commercial 3408 claims to offset the vast uncompensated and ' Genesis Health Care, Inc. v. Beccrra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 43 Kalderos, Sightlines lssue No. 3, Double, double, foil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). " Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kaldcros.com (('1ct. 2023), lssue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program rneaning a total of roughly $6 billion annually.") 45 Kaldetos, Sighflines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least . $6 billion annually" in 2022.) Kalderos, Sightlines lssue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue Nn. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). " Kalderos, Sightlines Issue No. 3, Double, double, fail and trouble with commercial contracts, www.Kalderos.corn (Oct. 2023), Issue No. 3. (rebate data is worth billions). 27 undercompensated services they furnish to our country's most vulnerable patient populations." lndeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit." We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.5 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, -Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."51 Even ifthe statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring frorn silence."52 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.53 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 3408 statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises aa See, e.g., Genesis Heahh (Pre, inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . . is to make 'covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 4' 340B Report, Legislative Map: Contract Pharmacy Protection Bills, httris://340breport.com/legislative-mapicontract- pharmacv-protection-bill/ 340B Report,Legislative Map: Laws Passed That Prohibit P8M Underpayment, https 1/340breport. corn/I egi s lati v e-m an/ I aw s-passed-th at-p roh i bit-pbm-underpaymenti. Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. l:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). " Albany Med Health System v. Health Resources & Services Administration, No. 23-ev-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 52 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Bum. Servs., 58 F.4th 696 (3d Cir. 2023). 53 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 28 the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.54 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care prograrns such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a prograrn that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 34013 statute. NMI. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot prograrn must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. ImportantIy, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.55 This is comrnonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 34013 drugs and requires the covered entity to furnish 34013 drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are " 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 55 42 256b(a)(5)(B) 29 statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual [s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program."56And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.57 Ix. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identifled 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part 1) inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to rnanage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. 56 Notice Regarding Sectim 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added)] "H.R REP. 102-384, 16 30 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 34013 program for more than three decades and is essential to most CHCs1 participation in the prograrn. Protect patient access to affordable MFP drugs. lf a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. 'Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts "lhis letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork ofapproaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. lnstead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance ofNeutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. lf the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 31 The experience with the 340B ESP platform illustrates this concern. ESP wa.s developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral systern and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate mode158 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. 9 Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 51 htms://beaconchannelmanagement.com/paesiresources (Johnson & Jnhnson Policy Documents) 32 Sinc Paul H. Wamsley, Jr., C Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require rnanufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion St. George Medical Clinic strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staffto comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. St. George Medical Clinic believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. St. George Medical Clinic appreciates the opportunity to respond to this Request for lnformation on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amanda Smith, pharmacy director for SGMC pharmacies at (304) 478-3355, or Paul Wamsley, CEO at (304) 478-3339. St. George Medical Clinic, Inc. 33
HRSA-2026-0001-1785Anonymous Anonymous2026-04-19T04:00Z54,252 chars
Public Comment for HHS Docket No. HRSA-2026-03042 HHS Docket No. HRSA-2026-03042 1. Costs to Covered Entities a. Current administrative costs under the upfront 340B discount i. Provide the total number of 340B transactions processed by your organization during the most recent FY ii. Describe your current administrative costs, including costs to third parties (e.g. contract pharmacies) related to 340B Program operations and compliance iii. Identify any keys cost drivers (e.g. staffing, IT systems, third party vendors, compliance activities, labor hours) for current administrative costs Our organization had approximately 3,359,396 340B transactions in the most recent FY. Routine administrative needs for the program include the TPA platform, 340B organizational memberships, external auditing and consulting services, labor, and program leadership. These basic administrative costs are approximately $1.3 million. Labor and TPA software are the largest contributors to the cost. In a rebate model, additional labor hours would be required but would not be offset by any additional 340B savings. b. Administrative costs under a potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one- time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests under the drugs selected for MFP under MDPNP ii. Describe the methodology and assumptions used to develop these estimates iii. Specify the activities or functions these incremental costs would cover (e.g. claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative costs, how could that be achieved and how could such an offset be accurately quantified v. Comment on the impact of these incremental costs under your current operations Covered entities would face incremental administrative and operational costs. In the previous version of the rebate model, over 100 hours were spent on initial setup. This included self-educating and educating internal stakeholders and operators within the organization, registering for the platform, establishing files/data/data feeds, and creating standard procedures, as well planning and strategizing on implementation for application to the organizations practices. Ongoing costs will include labor to support data collection and submissions, review and reconciliation of rebates, managing denials and communicating with manufacturers, and reconciling accounting to ensure that rebates are routed to the correct locations/cost centers. There would also need to be consideration for adding software/database tools to support in the management and reconciliation. For covered entities that utilize a TPA, there is likely to be a cost associated with the TPA submitting data on the covered entitys behalf (if the TPA offers this service). A rebate model will have significant operational impacts. Hiring resources can be a lengthy process, and without proper notification and time to rebate model implementation, resources would have to be reallocated internally to support the setup and maintenance. c. Staffing impacts under a potential 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 i. Indicate whether implementation of require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible) ii. If yes, identify the anticipated number of additional full-time employees, describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent With this being a brand new model, it is challenging to accurately calculate the staffing impact. It is known that with the implementation of 340B ESP for contract pharmacy data submission and the previous version of the rebate model, these programs cannot be completed without additional support. It is anticipated that additional resources will be needed for both set up and ongoing management. The terms of the rebate model heavily impact the amount of additional support that is needed. Depending on the size and complexity of the covered entitys 340B program and the terms of the rebate model, there is an estimated need of 0.25-1 FTE per hospital covered entity to support the additional workload. Initial setup involves registering for the data submission platform for each covered entity. This includes reviewing and negotiating on terms and conditions, setting up and verifying ACH data, and mapping data files. The data files will need to be created to match the required data elements. The covered entity will need to learn how to navigate the data submission platform. Once established, the data will need to be uploaded to the platform and there will need to be ongoing monitoring and reconciliation of rebates. Denials will need to be managed, if manufacturers are permitted to issue denials. Denials will create investigational work, additional communication to manufacturers, and a likely need to provide additional supporting data. Additionally, as part of the reconciliation process and rebate payment, there will need to be resources to properly allocate the funds to the correct cost centers. Many hospital organizations use a single corporate account for finances. While the Beacon setup allowed for identification of the covered entity name in the ACH transaction, this is not specific enough for routing the funds to the correct cost centers. There can be multiple cost centers receiving refunds under the same hospital. Its important for this to be allocated to the correct cost centers to close the loop on reconciliation. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring Covered entities may need to consider the implementation of TPAs or other reporting development mechanisms. Depending on the approach and organization, costs can vary. It requires IT resources to modify any data reporting within the organization. Vetting new vendors and platforms is a thorough process, especially where sensitive data involved. Needs will vary depending on the terms and requirements of the rebate model. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise HHS Docket No. HRSA-2026-03042 captured above (e.g. legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring) ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g. rural, small business, community health center). iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program With a new program of this magnitude, a great deal of time will need to be spent analyzing the requirements and determining how those apply to the covered entity. Hospital operations can be complex. Terms of a rebate model will need to be reviewed and understood by multiple key stakeholders at the covered entity. Increased complexity results in increased need for auditing (internal and external), as well as increased needs for consulting services with vendors and legal counsel. With a cash flow impact of this proportion, the ultimate issue on access to drugs is whether or not covered entities would be able to proceed with offering certain services and care for patients, or if certain services and programs would need to cease as a result. Hospitals cannot maintain the same level of patient care and services while floating cash of these volumes and absorbing the costs of additional resource needs. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g. within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization A rebate program would force covered entities to float cash to manufacturers. The initial rebate program that was proposed would have created an increased spend of $1.2 million/year for our organization. If our entire formulary went to a rebate model, the impact would be $106 million/year in increased upfront drug spend. Additionally, there would have been another $1.8 million impact related cost of goods changes and contract utilization that would not have been recouped in the rebates. Medications are generally ordered prior to patient need. This means that they are sitting on the shelf for varying amounts of time before a dispense or administration occurs. Our wholesaler invoices upon shipment and our payment to the wholesaler must occur within 7 days of being invoiced. A rebate payment would not occur timely enough to prevent a negative impact to cash flow for our organization. Denials and delays of rebate would create additional negative impacts. HRSA should also consider that billing for physician administered drugs is more complex and does not allow for immediate submission of the claim for the rebate model. The cash flow impact is significant, which would alter the ability to continue all services and care for patients. The same number of services for patients could not occur in the rebate model, which could negatively impact patient care and experience. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives HHS Docket No. HRSA-2026-03042 ii. State the average number of calendar days within which your organization typically remits payment under these contracts The terms apply to both 340B and non-340B drugs. There are incentives for prompt and early payment via cost of goods discounts. We are invoiced upon shipment and payment is remitted within 7 days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate based payment Rebate models will negatively impact covered entities pertaining to wholesaler arrangements. Covered entities would be paying for drugs prior to receiving the rebate for them. If payment remittance was delayed to more closely align with receipt of a rebate, there would be a negative impact on timely/early payment incentives. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Manufacturers should not be permitted to deny rebates. Good faith inquiry processes should continue, which can then go through the Administrative Dispute Process if necessary. Minimizing the data elements for review would limit the scope of review and allow for more timely review. Additionally, requiring the manufacturers to submit reports that are accessible to covered entities would allow for transparency. There should be penalties incurred if approvals are delayed or if denials occur outside the scope of the approved program. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cash flow impacts for covered entities. Because drugs are purchased prior to a dispense or administration occurring, it would be very unlikely that cash flow impacts can be avoided in rebate model. Billing for physician administered drugs is more complex and delayed, which will delay the data submissions in a rebate model. If the rebate model were to proceed, a 7-day window for rebate approvals should be considered to minimize the impact to covered entities. It should be noted that any rebate model will have a monetary impact on covered entities. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Manufacturers should not be permitted to deny rebates. By prohibiting denials, it will help to limit a portion of the burden of a rebate model. Managing denials is another complex and time-consuming activity for a covered entity. It would be an administrative burden on the covered entity HHS Docket No. HRSA-2026-03042 to provide resources needed to challenge denials. Resources would be needed to review, investigate, communicate with manufacturers, and likely submit additional data to support validation of the 340B claim. b. Describe what (if any) standard process elements should be required for rebate denial under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Manufacturers should not be permitted to deny rebates, but if given that authority, the scope of this authority should be limited and clearly defined. Specific details should be provided to the covered entity to allow for sufficient information to address the denial. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B program participation, including whether third-party vendors are used to carry out some or all of these activities While we predominantly use a TPA vendor to compile 340B data, there are some areas that do not require the use of a TPA, such as locations where we operate clean programs (i.e. clean sites). Data can also come from wholesalers, switch providers and electronic health records (EHRs). Despite that data is housed in the TPA, it originates from multiple locations and requires complex extracts from databases and EHRs. IT resources are required to set up and manage the logic of the extracted files that pull from various sources. Electronic Data Interchange (EDI) needs to be established and maintained to allow for data to flow properly. b. Identify current measures to ensure data accuracy, completeness, and consistency (e.g. validation checks, reconciliation, audits) Our organization has a robust auditing program, which includes routine self-auditing, TPA led audit check-ups, and annual external contracted audits. Additionally, there is routine IT, as well as 340B team oversight that ensures that data is being extracted and sent appropriately to the TPA. EDI feeds are established for purchasing data and switch provider data to send to the TPA. The TPA alerts for variances in the data file size as flag for further investigation. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing Covered entities are not required to use TPAs. It cannot be assumed that the requested data for rebate models is already being submitted to TPAs. In some cases, there are not TPAs established and it would be necessary to create new reports. There needs to be clearly defined fields that are reportable. Those required field should be the minimum necessary and there should also be consideration for the fact that claims are sometimes rebilled. They are not duplicate submissions and there should be a process where this workflow is recognized. Hospital billing complexities should also be taken into consideration as standard operations do not allow for immediate submission of claims. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (both at contract pharmacies and in- house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties HHS Docket No. HRSA-2026-03042 Data elements requested should be the minimum amount necessary and there should be careful consideration on how to manage rebills so that they do not appear to be duplicate transactions. This is sensitive data and data submission should be limited to the minimum amount necessary. This would narrow the scope of review by the manufacturers to maintain the intent of the rebate model and not allow manufacturers access to all claims data unnecessarily. It should be considered that not all covered entities currently furnish some data elements to TPAs. While a covered entity may generally use a TPA, it may have locations which do not necessitate the use of a TPA to manage the inventory and data. Ideally, in-house pharmacy data would only contain elements that are already contained in the data from the switch provider, and even then, should be the minimum elements necessary. Data elements should also be clearly defined so that covered entities can appropriately map files to required fields. HRSA should also be aware that any changes to data fields for TPAs, files, extracts, databases, etc. require sufficient notice of time for the covered entity to implement changes. It requires resources and support to complete updates. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties Covered entities should be entitled to provide input related to the terms of agreement as it pertains to data submission platforms. Terms of agreement should not be blanket agreements that all are required to sign in order to participate. Covered entities should be entitled to protect themselves through this process and not be forced into signing an agreement without the ability for conversations, collaboration, and adjustments as necessary as it relates to the terms and conditions. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organizations practices and procedures prior to January 1, 2026 to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices N/A not a manufacturer b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record- maintenance practices N/A not a manufacturer c. Describe your organizations experience since January 1, 2026 , with identifying drug dispenses to a covered entity for which your organization did not provide access to MFP under the non-duplication provisions of the MDPNP. N/A not a manufacturer d. Identify any challenges encountered (e.g. data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g. Medicare and Medicaid) N/A not a manufacturer e. Identify the minimum data necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B HHS Docket No. HRSA-2026-03042 Rebate Model Pilot Program to be an additional or alternative source for those data elements. N/A not a manufacturer 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with potential 340B Rebate Model Pilot Program? Manufacturer transparency and data collection is equally important to uphold integrity of any form of a rebate model. Manufacturers should be required to report delays and denials it pertains to rebate issuances. This data should be reported monthly and intervention should be considered for not complying with program expectations. Additional, rationale for denials and delays should also be contained in the data. Timely approvals and denials are of high concern to covered entities and their cash flow, which ultimately impacts the ability to continue to provide services and care to patients. b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Data provided by manufacturers should be made public, or at a minimum, accessible to covered entities. If covered entities are providing sensitive data to manufacturers, it is reasonable to expect covered entities to have access to data that shows manufacturer compliance with the parameters of the rebate model. Monthly to quarterly updates would be the most desirable. This allows covered entities to assess program performance. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program. There should be long-term reciprocal transparency from manufacturers on their overall adherence in the rebate model process. For as long as covered entities are required to submit claims data, manufacturers should be required to provide transparency data to covered entities. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program A 340B Rebate Model pilot program should be designed with feedback from covered entities. Since its inception, the 340B program provided upfront discounts to covered entities, which covered entities rely upon. The shift to a rebate model will interrupt cash flow and create additional costs to the covered entity. The intent of 340B is to extend care and services for patients and communities, but proposed rebate models will negatively impact the ability of covered entities to do that as 340B savings decline and administrative costs increase. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B program and CMS payment programs; ii. Reduce diversion or improper claims iii. Increasing pricing transparency across stakeholders Deduplication of discounts is important to the integrity of the program but should occur in a manner that is not burdensome to the covered entity. The mechanism to do this does not have to be through a rebate model. If HHS Docket No. HRSA-2026-03042 a rebate model is chosen, it should be for a very select and intentional set of claims. A 340B Rebate Model Pilot should be exactly the definition of pilot, which is a small-scale, preliminary version of a project, process, or product designed to test feasibility and derisk full-scale implementation. As diversion lives outside of the concern for deduplication, that should be left for HRSA oversight. Publicly shared HRSA audit results are not indicative of significant compliance issues related to diversion and duplicate discounts. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden Any additional data submission will create an administrative burden. The agency should consider utilizing a repository data system or using the CMS data that already exists as it pertains to deduplication of MFP claims. Another way to minimize the administrative burden is to limit the required submission to only that which is necessary. Covered entities should have input on the terms of agreement as it pertains to platforms in which we are required to submit sensitive data. This is sensitive information, and as such, a covered entity should be able to influence the terms of an agreement. It cannot be assumed that the requested data elements already exists. Additionally, it should be noted that not all covered entities, and not all locations within a covered entity, utilize TPA platforms for 340B data and program management. As such, this further creates administrative burden to develop tools for extracting data and creating reports that contain all necessary elements. Even for those with a TPA, there is a burden to reformat 340B data extract files with required elements. These elements should be the minimum necessary to meet the needs of a rebate model and should be clearly defined. d. Describe any other potential benefits (e.g. transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent those benefits outweigh any potential costs From the perspective of the covered entity, a rebate model creates more risk and burden with very minimal benefit. There will be administrative burdens both in the setup of such a model, as well as ongoing work associated with support, reconciliation, and long-term management. Working through manufacturer denials would add to the costs. In one example for our organization, we spent more than 12 months trying to obtain owed refunds for 3 covered entities from a single manufacturer. Despite completing the necessary paperwork and contacting the manufacturer, only 2 refunds were issued. Furthermore, there are already challenges in working with manufacturers to resolve denials for the MFP process. Costs to Covered Entities Current administrative costs under the upfront 340B discount Provide the total number of 340B transactions processed by your organization during the most recent FY Describe your current administrative costs, including costs to third parties (e.g. contract pharmacies) related to 340B Program operations and compliance Identify any keys cost drivers (e.g. staffing, IT systems, third party vendors, compliance activities, labor hours) for current administrative costs Our organization had approximately 3,359,396 340B transactions in the most recent FY. Routine administrative needs for the program include the TPA platform, 340B organizational memberships, external auditing and consulting services, labor, and program leadership. These basic administrative costs are approximately $1.3 million. Labor and TPA software are the largest contributors to the cost. In a rebate model, additional labor hours would be required but would not be offset by any additional 340B savings. Administrative costs under a potential 340B Rebate Model Pilot Program Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests under the drugs selected for MFP under MDPNP Describe the methodology and assumptions used to develop these estimates Specify the activities or functions these incremental costs would cover (e.g. claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative costs, how could that be achieved and how could such an offset be accurately quantified Comment on the impact of these incremental costs under your current operations Covered entities would face incremental administrative and operational costs. In the previous version of the rebate model, over 100 hours were spent on initial setup. This included self-educating and educating internal stakeholders and operators within the organization, registering for the platform, establishing files/data/data feeds, and creating standard procedures, as well planning and strategizing on implementation for application to the organizations practices. Ongoing costs will include labor to support data collection and submissions, review and reconciliation of rebates, managing denials and communicating with manufacturers, and reconciling accounting to ensure that rebates are routed to the correct locations/cost centers. There would also need to be consideration for adding software/database tools to support in the management and reconciliation. For covered entities that utilize a TPA, there is likely to be a cost associated with the TPA submitting data on the covered entitys behalf (if the TPA offers this service). A rebate model will have significant operational impacts. Hiring resources can be a lengthy process, and without proper notification and time to rebate model implementation, resources would have to be reallocated internally to support the setup and maintenance. Staffing impacts under a potential 340B Rebate Model Pilot Program Indicate whether implementation of require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible) If yes, identify the anticipated number of additional full-time employees, describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent With this being a brand new model, it is challenging to accurately calculate the staffing impact. It is known that with the implementation of 340B ESP for contract pharmacy data submission and the previous version of the rebate model, these programs cannot be completed without additional support. It is anticipated that additional resources will be needed for both set up and ongoing management. The terms of the rebate model heavily impact the amount of additional support that is needed. Depending on the size and complexity of the covered entitys 340B program and the terms of the rebate model, there is an estimated need of 0.25-1 FTE per hospital covered entity to support the additional workload. Initial setup involves registering for the data submission platform for each covered entity. This includes reviewing and negotiating on terms and conditions, setting up and verifying ACH data, and mapping data files. The data files will need to be created to match the required data elements. The covered entity will need to learn how to navigate the data submission platform. Once established, the data will need to be uploaded to the platform and there will need to be ongoing monitoring and reconciliation of rebates. Denials will need to be managed, if manufacturers are permitted to issue denials. Denials will create investigational work, additional communication to manufacturers, and a likely need to provide additional supporting data. Additionally, as part of the reconciliation process and rebate payment, there will need to be resources to properly allocate the funds to the correct cost centers. Many hospital organizations use a single corporate account for finances. While the Beacon setup allowed for identification of the covered entity name in the ACH transaction, this is not specific enough for routing the funds to the correct cost centers. There can be multiple cost centers receiving refunds under the same hospital. Its important for this to be allocated to the correct cost centers to close the loop on reconciliation. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring Covered entities may need to consider the implementation of TPAs or other reporting development mechanisms. Depending on the approach and organization, costs can vary. It requires IT resources to modify any data reporting within the organization. Vetting new vendors and platforms is a thorough process, especially where sensitive data involved. Needs will vary depending on the terms and requirements of the rebate model. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g. legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring) Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g. rural, small business, community health center). Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program With a new program of this magnitude, a great deal of time will need to be spent analyzing the requirements and determining how those apply to the covered entity. Hospital operations can be complex. Terms of a rebate model will need to be reviewed and understood by multiple key stakeholders at the covered entity. Increased complexity results in increased need for auditing (internal and external), as well as increased needs for consulting services with vendors and legal counsel. With a cash flow impact of this proportion, the ultimate issue on access to drugs is whether or not covered entities would be able to proceed with offering certain services and care for patients, or if certain services and programs would need to cease as a result. Hospitals cannot maintain the same level of patient care and services while floating cash of these volumes and absorbing the costs of additional resource needs. Payment Timing and Potential Cash Flow Impacts for Covered Entities Describe with specificity whether payment timing (e.g. within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization A rebate program would force covered entities to float cash to manufacturers. The initial rebate program that was proposed would have created an increased spend of $1.2 million/year for our organization. If our entire formulary went to a rebate model, the impact would be $106 million/year in increased upfront drug spend. Additionally, there would have been another $1.8 million impact related cost of goods changes and contract utilization that would not have been recouped in the rebates. Medications are generally ordered prior to patient need. This means that they are sitting on the shelf for varying amounts of time before a dispense or administration occurs. Our wholesaler invoices upon shipment and our payment to the wholesaler must occur within 7 days of being invoiced. A rebate payment would not occur timely enough to prevent a negative impact to cash flow for our organization. Denials and delays of rebate would create additional negative impacts. HRSA should also consider that billing for physician administered drugs is more complex and does not allow for immediate submission of the claim for the rebate model. The cash flow impact is significant, which would alter the ability to continue all services and care for patients. The same number of services for patients could not occur in the rebate model, which could negatively impact patient care and experience. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives State the average number of calendar days within which your organization typically remits payment under these contracts The terms apply to both 340B and non-340B drugs. There are incentives for prompt and early payment via cost of goods discounts. We are invoiced upon shipment and payment is remitted within 7 days. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate based payment Rebate models will negatively impact covered entities pertaining to wholesaler arrangements. Covered entities would be paying for drugs prior to receiving the rebate for them. If payment remittance was delayed to more closely align with receipt of a rebate, there would be a negative impact on timely/early payment incentives. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Manufacturers should not be permitted to deny rebates. Good faith inquiry processes should continue, which can then go through the Administrative Dispute Process if necessary. Minimizing the data elements for review would limit the scope of review and allow for more timely review. Additionally, requiring the manufacturers to submit reports that are accessible to covered entities would allow for transparency. There should be penalties incurred if approvals are delayed or if denials occur outside the scope of the approved program. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cash flow impacts for covered entities. Because drugs are purchased prior to a dispense or administration occurring, it would be very unlikely that cash flow impacts can be avoided in rebate model. Billing for physician administered drugs is more complex and delayed, which will delay the data submissions in a rebate model. If the rebate model were to proceed, a 7-day window for rebate approvals should be considered to minimize the impact to covered entities. It should be noted that any rebate model will have a monetary impact on covered entities. Rebate Denials Under a potential 340B Rebate Model Pilot Program the acceptable grounds for manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Manufacturers should not be permitted to deny rebates. By prohibiting denials, it will help to limit a portion of the burden of a rebate model. Managing denials is another complex and time-consuming activity for a covered entity. It would be an administrative burden on the covered entity to provide resources needed to challenge denials. Resources would be needed to review, investigate, communicate with manufacturers, and likely submit additional data to support validation of the 340B claim. Describe what (if any) standard process elements should be required for rebate denial under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Manufacturers should not be permitted to deny rebates, but if given that authority, the scope of this authority should be limited and clearly defined. Specific details should be provided to the covered entity to allow for sufficient information to address the denial. Data Collection by Covered Entities Describe how your organization currently collects, maintains, and retains data related to 340B program participation, including whether third-party vendors are used to carry out some or all of these activities While we predominantly use a TPA vendor to compile 340B data, there are some areas that do not require the use of a TPA, such as locations where we operate clean programs (i.e. clean sites). Data can also come from wholesalers, switch providers and electronic health records (EHRs). Despite that data is housed in the TPA, it originates from multiple locations and requires complex extracts from databases and EHRs. IT resources are required to set up and manage the logic of the extracted files that pull from various sources. Electronic Data Interchange (EDI) needs to be established and maintained to allow for data to flow properly. Identify current measures to ensure data accuracy, completeness, and consistency (e.g. validation checks, reconciliation, audits) Our organization has a robust auditing program, which includes routine self-auditing, TPA led audit check-ups, and annual external contracted audits. Additionally, there is routine IT, as well as 340B team oversight that ensures that data is being extracted and sent appropriately to the TPA. EDI feeds are established for purchasing data and switch provider data to send to the TPA. The TPA alerts for variances in the data file size as flag for further investigation. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing Covered entities are not required to use TPAs. It cannot be assumed that the requested data for rebate models is already being submitted to TPAs. In some cases, there are not TPAs established and it would be necessary to create new reports. There needs to be clearly defined fields that are reportable. Those required field should be the minimum necessary and there should also be consideration for the fact that claims are sometimes rebilled. They are not duplicate submissions and there should be a process where this workflow is recognized. Hospital billing complexities should also be taken into consideration as standard operations do not allow for immediate submission of claims. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (both at contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties Data elements requested should be the minimum amount necessary and there should be careful consideration on how to manage rebills so that they do not appear to be duplicate transactions. This is sensitive data and data submission should be limited to the minimum amount necessary. This would narrow the scope of review by the manufacturers to maintain the intent of the rebate model and not allow manufacturers access to all claims data unnecessarily. It should be considered that not all covered entities currently furnish some data elements to TPAs. While a covered entity may generally use a TPA, it may have locations which do not necessitate the use of a TPA to manage the inventory and data. Ideally, in-house pharmacy data would only contain elements that are already contained in the data from the switch provider, and even then, should be the minimum elements necessary. Data elements should also be clearly defined so that covered entities can appropriately map files to required fields. HRSA should also be aware that any changes to data fields for TPAs, files, extracts, databases, etc. require sufficient notice of time for the covered entity to implement changes. It requires resources and support to complete updates. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties Covered entities should be entitled to provide input related to the terms of agreement as it pertains to data submission platforms. Terms of agreement should not be blanket agreements that all are required to sign in order to participate. Covered entities should be entitled to protect themselves through this process and not be forced into signing an agreement without the ability for conversations, collaboration, and adjustments as necessary as it relates to the terms and conditions. Manufacturer Efforts to Avoid Duplicate Discounts Describe your organizations practices and procedures prior to January 1, 2026 to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices N/A not a manufacturer Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices N/A not a manufacturer Describe your organizations experience since January 1, 2026 , with identifying drug dispenses to a covered entity for which your organization did not provide access to MFP under the non-duplication provisions of the MDPNP. N/A not a manufacturer Identify any challenges encountered (e.g. data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g. Medicare and Medicaid) N/A not a manufacturer Identify the minimum data necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. N/A not a manufacturer Required Reporting What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with potential 340B Rebate Model Pilot Program? Manufacturer transparency and data collection is equally important to uphold integrity of any form of a rebate model. Manufacturers should be required to report delays and denials it pertains to rebate issuances. This data should be reported monthly and intervention should be considered for not complying with program expectations. Additional, rationale for denials and delays should also be contained in the data. Timely approvals and denials are of high concern to covered entities and their cash flow, which ultimately impacts the ability to continue to provide services and care to patients. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Data provided by manufacturers should be made public, or at a minimum, accessible to covered entities. If covered entities are providing sensitive data to manufacturers, it is reasonable to expect covered entities to have access to data that shows manufacturer compliance with the parameters of the rebate model. Monthly to quarterly updates would be the most desirable. This allows covered entities to assess program performance. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program. There should be long-term reciprocal transparency from manufacturers on their overall adherence in the rebate model process. For as long as covered entities are required to submit claims data, manufacturers should be required to provide transparency data to covered entities. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program A 340B Rebate Model pilot program should be designed with feedback from covered entities. Since its inception, the 340B program provided upfront discounts to covered entities, which covered entities rely upon. The shift to a rebate model will interrupt cash flow and create additional costs to the covered entity. The intent of 340B is to extend care and services for patients and communities, but proposed rebate models will negatively impact the ability of covered entities to do that as 340B savings decline and administrative costs increase. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B program and CMS payment programs; Reduce diversion or improper claims Increasing pricing transparency across stakeholders Deduplication of discounts is important to the integrity of the program but should occur in a manner that is not burdensome to the covered entity. The mechanism to do this does not have to be through a rebate model. If a rebate model is chosen, it should be for a very select and intentional set of claims. A 340B Rebate Model Pilot should be exactly the definition of pilot, which is a small-scale, preliminary version of a project, process, or product designed to test feasibility and derisk full-scale implementation. As diversion lives outside of the concern for deduplication, that should be left for HRSA oversight. Publicly shared HRSA audit results are not indicative of significant compliance issues related to diversion and duplicate discounts. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden Any additional data submission will create an administrative burden. The agency should consider utilizing a repository data system or using the CMS data that already exists as it pertains to deduplication of MFP claims. Another way to minimize the administrative burden is to limit the required submission to only that which is necessary. Covered entities should have input on the terms of agreement as it pertains to platforms in which we are required to submit sensitive data. This is sensitive information, and as such, a covered entity should be able to influence the terms of an agreement. It cannot be assumed that the requested data elements already exists. Additionally, it should be noted that not all covered entities, and not all locations within a covered entity, utilize TPA platforms for 340B data and program management. As such, this further creates administrative burden to develop tools for extracting data and creating reports that contain all necessary elements. Even for those with a TPA, there is a burden to reformat 340B data extract files with required elements. These elements should be the minimum necessary to meet the needs of a rebate model and should be clearly defined. Describe any other potential benefits (e.g. transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent those benefits outweigh any potential costs From the perspective of the covered entity, a rebate model creates more risk and burden with very minimal benefit. There will be administrative burdens both in the setup of such a model, as well as ongoing work associated with support, reconciliation, and long-term management. Working through manufacturer denials would add to the costs. In one example for our organization, we spent more than 12 months trying to obtain owed refunds for 3 covered entities from a single manufacturer. Despite completing the necessary paperwork and contacting the manufacturer, only 2 refunds were issued. Furthermore, there are already challenges in working with manufacturers to resolve denials for the MFP process.
HRSA-2026-0001-1786Tri-Area Community Health2026-04-19T04:00Z107,160 chars
See attached file(s) April 19, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Tri-Area Community Health (TACH), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC and our own review, we know that CHCs are facing staggering impacts: Projected Cost Increases: Tri-Area Community Health anticipates significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As Congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. 2 We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors (e.g., Farxiga), would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because CHCs will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 5 Sliding Fee Discount: TACH provided over $318,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: TACH anticipates needing 1 additional FTE as a Result of the Rebate Model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Significant time will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. TACH urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that at least $30,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs like TACH that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: We estimate that staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 81 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across three different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our 2,500 square mile service area, this would leave patients in Carroll County, Floyd County, Franklin County, Grayson County, Patrick County, and Galax City with few affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the WAC. This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. To add to the complications, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, Tri-Area Community Health takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs, including TACH, operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase in Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase in Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Based on our organizations data, we estimate it would cost $2,185,698.33 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $146,822.42 to purchase these same drugs at the 340B ceiling price. This represents a 1388.7% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TACH anticipates needing to reduce: Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as transportation and food access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a case manager or, perhaps a Clinical Pharmacist. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5,000+ patients who are under 200% of the Federal Poverty Level from possible rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. TACH asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. As we mentioned above, another complication is that the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead CHCs to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited 10 financial margins, CHCs are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, TACH estimates its 2027 Annual Rebate Opportunity Cost to be approximately $886,413.48. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. TACH estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $167,205.62. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate pharmacy, clinical, or staff needs, or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves or perhaps apply for a line of credit. Interest rates are currently at around 8.5% for a line of credit. If we spend an average of approximately $500,000 per month on medications, and rebates take three months to come back to us, we need a $1.5 million line of credit. At an 8% interest rate, that would calculate to about $120,00 in interest per year. This is not a sustainable solution; these are funds that are currently dedicated to transportation, food, case management, and Clinical Pharmacist services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on TACH, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. D. Financial Impact of Rebate Denials and Delays TACH urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only adds to the confusion, leaving CHCs guessing about compliance requirements that CHCs are never clearly told exist. These unpredictable denials may rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $309,691.15. Our CHC cannot absorb this loss, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause CHCs to exceed credit limits with wholesalers, halting the CHCs ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. Unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can 12 demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 13 rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. 14 C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. The manufacturers, with their billions of dollars in revenue, are the ones who want this, so the burden should be on them. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 15 Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, CHCs utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and CHCs adhere to rigorous oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but CHCs also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients CHCs serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, CHCs are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because CHCs rely on 16 wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VI. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication Although we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but is also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 17 example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.25 The negative implications of a 340B rebate model are well-documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would directly contradict Congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra- statutory. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an inappropriate extension of HRSAs alleged rebate authority. 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) 18 Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity shall not request payment under the Medicaid FFS program for a 340B-priced drug.28 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.29 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.30 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.31 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first 27 Id. 28 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 29 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 30 42 U.S.C. 256b(a)(5)(C). 31 42 U.S.C. 256b(a)(5)(C). 19 instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.32 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non- 340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.33 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid 32 See 42 U.S.C 256b(a)(5)(A). 33 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 34 C.F.R. 447.518(a). 20 MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. 21 A 340B rebate model is unduly burdensome. HHSs rebate model design does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) says that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 22 discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over- identify claims as 340B because, though a CHC may accurately identify a claim as 340B- eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. 1. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 23 pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the possibility that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) 24 structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data may be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 25 drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs may use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers may use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs may then, in turn, rule against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These practices fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 26 create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 27 Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 VIII. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). 56 42 U.S.C. 256b(a)(5)(B) 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 28 A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. As will be explained below, compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: 29 o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be more complete and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. 30 o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. No manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs may rule against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aimed to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 31 Conclusion Tri-Area Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs CHCs can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. TACH believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Tri-Area Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me. Sincerely, James Werth, Jr. James Werth, Jr., PhD, ABPP Chief Executive Officer Tri-Area Community Health 276-398-2292 jwerth@triarea.org
HRSA-2026-0001-1787National Alliance for Hispanic Health2026-04-19T04:00Z8,101 chars
The National Alliance for Hispanic Health (the Alliance), representing community-based organizations and providers serving 15 million persons each year, strongly urges the FDA not to adopt the rebate pilot under the 340B Drug Pricing Program. For more than three decades, the 340B program has been one of the nations most effective mechanisms for supporting access to care in communities across the United States. By allowing eligible entities to purchase outpatient medications at discounted prices, the program enables providers to stretch limited resources and reinvest savings into services that benefit patients and communities. Importantly, the 340B program accomplishes this without requiring direct federal spending. It represents a rare example of a policy that strengthens healthcare, expands access, and supports community health while operating at no cost to the federal government. A shift to a rebate-based system raises significant concerns. The proposed rebate model would impose substantial financial strain on community providers. Community and rural hospitals, community health centers, and other providers that rely on the 340B program operate on thin margins while serving patients with complex medical and social needs. Requiring these providers to purchase medications at full price and then seek reimbursement through rebates shifts financial risk and liquidity burdens onto institutions that are least able to absorb them. A program intended to strengthen access should not require community providers to finance the pharmaceutical supply chain while awaiting rebates. The proposed pilot would introduce additional administrative complexity and uncertainty at a time that the Administration is seeking to reduce health costs by reducing administrative burdens. Under the rebate pilot, providers would be required to navigate new claims tracking, reporting, reconciliation, and compliance requirements to obtain rebates. Increased administrative burden will divert limited resources away from patient care and toward program administration. The proposed model will destabilize and reduce access to critical disease prevention and management programs. For more than thirty years, hospitals and clinics serving underserved populations, including rural communities, have structured care around the programs upfront discount framework. Many community programs that support medication access and chronic disease management are made possible because providers can reliably reinvest 340B savings into patient services. Significant changes to the structure of the program would destabilize these efforts and reduce the ability of providers to sustain prevention and disease management programs that benefit working families, rural communities, and individuals who lack reliable access to healthcare. Across the country, providers use 340B savings to expand services that benefit the people who depend most on community-based care: modest- and low-wage workers, rural residents, individuals living with chronic disease, and Americans who lack adequate insurance coverage. These savings help support services such as medication assistance, chronic disease management, preventive screenings, transportation services, and expanded clinical care in communities that would otherwise struggle to sustain these programs. The 340B program has long represented a pragmatic and effective approach to strengthening community health. I urge you in the strongest possible terms to retain the current structure of the 340B Drug Pricing Program and not implement the proposed rebate model pilot program. The Alliance has valued its long-standing partnership with HRSA and stands ready to support HRSA in meeting its vision of healthy communities, healthy people. Note: Please see attached letter for full comment. April 19, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Sent electronically and submitted on https://www.regulations.gov Docket ID: HRSA-2026-03042 Response to Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: The National Alliance for Hispanic Health (the Alliance), representing community-based organizations and providers serving 15 million persons each year, strongly urges the FDA not to adopt the rebate pilot under the 340B Drug Pricing Program. For more than three decades, the 340B program has been one of the nations most effective mechanisms for supporting access to care in communities across the United States. By allowing eligible entities to purchase outpatient medications at discounted prices, the program enables providers to stretch limited resources and reinvest savings into services that benefit patients and communities. Importantly, the 340B program accomplishes this without requiring direct federal spending. It represents a rare example of a policy that strengthens healthcare, expands access, and supports community health while operating at no cost to the federal government. A shift to a rebate-based system raises significant concerns. The proposed rebate model would impose substantial financial strain on community providers. Community and rural hospitals, community health centers, and other providers that rely on the 340B program operate on thin margins while serving patients with complex medical and social needs. Requiring these providers to purchase medications at full price and then seek reimbursement through rebates shifts financial risk and liquidity burdens onto institutions that are least able to absorb them. A program intended to strengthen access should not require community providers to finance the pharmaceutical supply chain while awaiting rebates. The proposed pilot would introduce additional administrative complexity and uncertainty at a time that the Administration is seeking to reduce health costs by reducing administrative burdens. Under the rebate pilot, providers would be required to navigate new claims tracking, reporting, reconciliation, and compliance requirements to obtain rebates. Increased administrative burden will divert limited resources away from patient care and toward program administration. The proposed model will destabilize and reduce access to critical disease prevention and management programs. For more than thirty years, hospitals and clinics serving underserved populations, including rural communities, have structured care around the programs upfront discount framework. Many community programs that support medication access and chronic disease management are made possible because providers can reliably reinvest 340B savings into patient services. Significant changes to the structure of the program would destabilize these efforts and reduce the ability of providers to sustain prevention and disease management programs that benefit working families, rural communities, and individuals who lack reliable access to healthcare. Across the country, providers use 340B savings to expand services that benefit the people who depend most on community-based care: modest- and low-wage workers, rural residents, individuals living with chronic disease, and Americans who lack adequate insurance coverage. These savings help support services such as medication assistance, chronic disease management, preventive screenings, transportation services, and expanded clinical care in communities that would otherwise struggle to sustain these programs. The 340B program has long represented a pragmatic and effective approach to strengthening community health. I urge you in the strongest possible terms to retain the current structure of the 340B Drug Pricing Program and not implement the proposed rebate model pilot program. The Alliance has valued its long-standing partnership with HRSA and stands ready to support HRSA in meeting its vision of healthy communities, healthy people. Sincerely, Jane L. Delgado, Ph.D., M.S. President and CEO National Alliance for Hispanic Health
HRSA-2026-0001-1788Community Clinic2026-04-19T04:00Z16,826 chars
See attached file(s) %' D Community Clinic April 17, 2026 Chantelle Britton Director, Office of PharmacyAffairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA - 2026-03042 Dear Director Britton: Statement of Position Community Clinic opposes the implementation of the 340B Rebate Model Pilot Program and requests that HRSAdecline to proceed with the proposal as currentlyconstituted. 0ur opposition rests upon quantitative financial modeling, operational experience accrued across twenty-one years of continuous participation in the 340B Drug Pricing Program, and a set of compliance concerns that the rebate mechanisrn, on the record before the agency, has not adequately resolved. The remainder of this letter sets out the factual basis for that position, enumerates our specific concerns with the proposed model, identifies two alternative mechanisms bywhich the deduplication objective underlying the rebate proposal may be accomplished with materially lower administrative and financial consequences, and concludes with a requested action. Factual Basis Community Clinic is a federally qualified health center headquartered in Springdale, Arkansas, serving 70,221 patients annually. Ninety-one percent of those patients reside at communityclinic.net l 855-438-2280 or below 200% of the federal poverty threshold, and more than half reside at or below 100%. Twenty-eight percent are uninsured. Forty percent are best served in a language other than English; sixty-one percent belong to racial orethnic minority groups. More than a third are children. Among our adult patient population, 28.4% carry a diagnosis of hypertension and 17.4% carrya diagnosis of diabeteschronic conditions for which the Medicare Drug Price Negotiation Program's selected drug list is directly indicated. For a population of this composition, the price a patient encounters at the pharmacy counter determines whether a prescription is filled, whether a refill is collected, and, in the aggregate, whetherthe chronic conditions for which those medications are prescribed remain underclinical control. Quantitative modeling of the rebate mechanism against our 2025 claims experience, with the selected drugs added to the MFP list in 2026 understood to remain in effect alongside those added in 2027, produces the following figures for calendar year 2027. Total claims on the selected drug list: 24,099. Current 340B acquisition cost on those drugs: $3,306,000. Estimated upfront cost under the rebate model, computed at Wholesale Acquisition Cost: $20,979,000. The selected drugs represent 46.9% of ourtotal 340B program in 2027nearly one of every two 340B dollars would fall within the rebate mechanism's scope. The differential between current 340B acquisition cost and the rebate-model upfront cost, which Community Clinic would be obligated to carry as working capital pending manufacturer rebate, amounts to approximately $17.7 million each year the mechanism remains in force. Should HRSA elect to extend the rebate mechanism beyond the pilot to the entirety of the 340B programa possibility the agency has publicly contemplatedthe whole-program annual upfront capital requirement rises to approximately $27.2 million. The working capital required to sustain participation in a rebate-based 340B program at this magnitude is not obtainable from existing reserves and would require either external borrowing, with attendant interest expense extracted from patient care, or material reductions in clinical services, staffing complement, or site footprint. Compounding the exposure, the Maximum Fair Price has already eliminated 9.0% of ourwould-be 340B savings on the selected drugs during the first quarter of 2026 alone, in advance of any rebate mechanism being implemented. A rebate model overlaid upon that ongoing compression asks Community Clinic to absorb two separate losses upon the same drugs: savings the MFP program has already withdrawn, and the capital float, denial exposure, and administrative cost that the rebate mechanism would introduce in addition. Specific Concerns with the Proposed Model The first of our concerns is structural. The rebate mechanism transfers the risk of denial from the drug rnanufacturer, which under the current upfront model has no occasion to deny anything, to the covered entity, which underthe rebate mechanism bears every rebate denial as a direct financial loss on the dispense alreadyfurnished. Manufacturers, meanwhile, acquire unilateral authority to determine whethera given rebate claim qualifies for paymentan authority they have demonstrated considerable inclination to exercise restrictively over the preceding five years through policies limiting 340B access at contract pharmacies, policies that remain the subject of active state and federal litigation. The rebate model thus places the adjudication of rebate claims on contract pharmacy dispenses in the hands of the parties who have been seeking to exclude those dispenses from 340B by other means. As a scale illustration offered for purposes of perspective and not as a projection of our actual experience, a hypothetical 5% denial rate against Community Clinic's MFP drug exposure would produce an annual loss of approximately $1,049,000 on the pilot drugs alone. The ten-day manufacturer payment window referenced in prior pilot iterations does not mitigate this exposure; it delimits only the interval during which the covered entity carries the capital before a determination is reached, and offers no remedy whatever for claims denied outright. A second concern operates further upstream in the supply chain, at the wholesaler relationship through which our contract pharmacy partners receive distribution of Community Clinic's 340B drug inventory. Our wholesalerarrangements, like those of the covered entity sector generally, were calibrated against 340B acquisition pricing; the monthly invoice exposures and credit limits embedded in those arrangements are not scaled to absorb a WAC-based invoice profile on the selected drugs. ln advance of the originally planned 2026 pilot, wholesalers serving the sector proved neither prepared nor uniformly willing to extend the credit limits required to operationalize even the partial pilot. The consequence is not hypothetical: when wholesaler credit is exceeded, drug orders are held orrefused, replenishment stops, and the 340B program ceases to function forthe affected products until credit is restored. A rebate mechanism that materially inflates monthly invoice exposure against unchanged credit limits places the entirety of our contract pharmacy dispensing operation at risk of a wholesaler-side interruption that has nothing to do with our own financial solvency. A third concern pertains to the contract pharmacy architecture through which Community Clinic dispenses 340B medications exclusively. That architecture depends, at a mechanical level, upon the 340B price being reflected at the point of purchase, from which the reimbursement flow between our third-party administrator and our contract pharmacy partners is calibrated. Transposed to a rebate framework, the point-of- purchase price is Wholesale Acquisition Cost; the 340B price becomes a deferred and contingent event; and the reimbursement arrangement is required to absorb variance it was not architected to tolerate. HRSA addressed this concern in part by having participating manufacturers commit to supplying 340B ceiling price files to ourTPAs, an effort the agency deserves credit for having undertaken. In the event, however, those files were made available only a fewworking days in advance of the originally scheduled 2026 pilot startan interval that did not permit our 340B TPAs to ingest the files, build reconciliation functionality around them, or deploy the resulting infrastructure in time. The operational remedy, though conceived in good faith, did not land in usable form before the pilot was to begin. A fourth concern relates to the reconciliation infrastructure on the manufacturer side of the transaction. The third-party vendor interface designated by manufacturers forthe originally planned 2026 rebate pilot produced data and reporting functionalitythat was demonstrably insufficient to support a reliable reconciliation process at the claim-level specificity that a rebate mechanism requires. The vendor's invocation of HIPAA compliance asjustification for omitting prescription numbers from retained claim records did not withstand scrutiny: any entity entrusted with processing 340B rebate claims at national scale must meet the security standards necessaryto retain and report prescription identifiers to the covered entities filing the claims, as those identifiers are the mechanism bywhich a covered entitytraces a dispense through its own TPA systems and responds coherently to denial rationales. A reconciliation platform that cannot retain the identifier required for reconciliation is not, in a functional sense, a reconciliation platform at all. A fifth concern addresses operational burden. HRSA's Information Collection Request estimates an additional five hours perweek of administrative effort underthe rebate mechanism. Our internal modeling, based upon projected claim volumes for the 25 pilot drugs, indicates a required commitment of approximately1.75 additional full-time equivalents to manage reconciliation, denial tracking, data submission, and dispute workflowsa workload approaching 70 hours per week, an order of magnitude above the HRSA estimate. Anyextension of the rebate mechanism beyond the pilot's current scope would scale the staffing requirement in proportion. The ICR estimate, respectfully, does not reflect the operational reality of sustaining rebate reconciliation and denial management against the claim volumes an organization of our size generates. A sixth concern, acute and immediate, is patient accessa concern that applies with particular force to the twenty-eight percent of Community Clinic's patients who are uninsured and to the substantial share of ouradult patient panel managing hypertension or diabetes. The MFP drug list includes Jardiance, Farxiga, and insulinsmedications directly indicated forthe chronic-condition population described in our Factual Basis above along with additional agents indicated for cardiovascular and metabolic conditions prevalent within the same population. The pharmacy counter, under a rebate mechanism absent functional ceiling price file infrastructure, displays Wholesale Acquisition Cost at the moment of dispense. From that point, three operational outcomes are available, each of which is inconsistent with the mission the 3408 program was enacted to advance. First, the patient is presented with a WAC price and declines the prescription. Second, the patient pays the WAC price on a single occasion and fails to return for subsequent refills, at which point chronic-condition management collapses. Third, Community Clinic subsidizes the statutory 340B discount out of operating funds, dispensing at an affordable price while absorbing the full denial risk of every rebate claim subsequently filed. Each path either interrupts patient care or imposes upon Community Clinic the cost of a discount that HRSAwas entrusted with administering. A seventh concern is a direct compliance problem. Executive Order14273 conditions future Section 330(e) funding upon FQHCs providing low-income patients with access to discounted insulin at the point of sale. The rebate mechanism, in its definitional architecture, withholds the 340B price from the point of sale and pays it later as a manufacturer rebate. Those two policies cannot be simultaneously observed. HRSA has issued no guidance on how a covered entity in Community Clinic's position is expected to reconcile them, and on the record available, we do not see an operational mechanism by which the reconciliation is possible. An eighth concern, and one that warrants particularweight given Community Clinic's twenty-one-year tenure in the program, addresses reliance. Over two decades of participation, our pharmacy program, wholesaler arrangements, contract pharmacy agreements, clinical staffing model, and long-range financial planning have been calibrated to the upfront discount mechanism as it has operated throughout that period. The savings structure was predictable; we allocated clinical and administrative resources accordingly; we made decisions about services, sites, and workforce in reliance on the 340B savings stream arriving at acquisition. That reliance is not a preference we happen to hold; it is the operational substrate on which Community Clinic's institutional capacity has been constructed. A shift to a rebate mechanisrn would disrupt settled reliance interests that the rebate pilot, as currently proposed, has made no accommodation to preserve. The statutory authority HRSA possesses to implement a rebate approach does not, on its own, establish that the exercise of that authority is prudent, particularly in the absence of any identified deficiency in the upfront discount model the rebate is meant to replace. Proposed Alternatives The policy objective the rebate model is designed to addressprevention of duplicative payment by manufacturers of both the 340B discount and the MFP rebate upon the same unit of drugis legitimate and must be accomplished through some mechanism. The question is not whether a deduplication function is necessary, which it is, but whetherthe rebate model is the least burdensome means by which to accomplish it. On the record before HRSA, it is not. The sections below describe two distinct mechanisms, either of which would satisfy the deduplication objective with materially lower consequences for covered entity operations than the rebate model would impose. One mechanism is a HRSA-designated or federally administered 340B claims clearinghouse. Covered entities would route their 340B claims through the clearinghouse, which would serve as the single authoritative locus fordeduplication determinations. Under such an arrangement, drug manufacturers are removed from the adjudicator role, covered entities are not required to carrythe capital float a rebate model would impose, and the point-of-sale pricing conflict with Executive Order 14273 is avoided by preservation of the upfront discount structure. The foundational work for the clearinghouse approach has been substantially underway for some time: CMS finalized a 340B claims repository in the CY 2026 Physician Fee Schedule, and bipartisan proposals in Congress, including the PROTECT 340B Act and the SUSTAIN 340B Act, advance variations upon the same architecture. The mechanism does not require invention; it requires selection. A distinct mechanism, and one that does not presuppose any new infrastructure on the agency's part, leverages claims data manufacturers already receive. Drug manufacturers already receive, as a condition of 340B participation at contract pharmacies, extensive claims data uploaded by covered entities. That data could be repurposed for MFP/340B deduplication directly, substituting demonstrably reliable covered-entity-sourced claims identification for the third-party vendor algorithms that have proven unreliable in practice. One procedural refinement would materially improve this approach: HRSA should permit covered entities to attest to compliance with claims data upload requirements for new pharmacy accounts or for accounts without utilization at the time the claims data requirement is instituted. That accommodation addresses a recurring friction point in the existing data upload framework without compromising the deduplication utility of the data. Requested Action Community Clinic respectfully requests that HRSA decline to proceed with the 340B Rebate Model Pilot Program as currently constituted; exempt federally qualified health centers from any rebate mechanism that may succeed the current proposal; and pursue the deduplication objective through a neutral claims clearinghouse, through direct use of manufacturer-held claims data with the attestation accommodation described above, or through a combination of the two. I thank you for your consideration of these comments and remain available to provide such additional data, operational detail, or clarification as HRSA may find useful in its further deliberations. Sincerely, James Semingson Chief Executive Officer Community Clinic Springdale, Arkansas 340B ID: CH0619500
HRSA-2026-0001-1789Paul Knecht · BATON ROUGE, LA, United States2026-04-19T04:00Z43,826 chars
See attached file regarding the proposed HRSA Rebate model 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Open Health Care Clinic anticipates a loss of $120,000 annually from entity-owned pharmacy operations and a $50,000 loss for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG For Open Health Care Clinic in particular, this means it will impact: In CY 2025, our Pharmacy filled a total of 67,000 prescriptions for clinic patients The current administrative costs for the Pharmacy are $1,400,000 per year The 340B revenue is utilized to expand services to our patients, increase facilities available for patient access and increase the number of providers for our patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. At this time, one of the current rebate medications actual acquisition exceeds the Executive Order limits. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), provided sliding fee discounts to 10,800 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), anticipates needing at least 1 additional FTE at an annual salary of $70,000 to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG External Vendor Costs: Given increased complexity, HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), anticipates an increase of $60,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We anticipate that our organization will need a minimum of 1 FTE to manage this program Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Our estimate is approximately $70,000 annually Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 10 hours will be needed to submit claims as well as an additional 30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We anticipate $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 16,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at annually The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 contact pharmacy organizations totaling 17 non-duplicated locations to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 17 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely or reduce the number of medications covered rather than manage the administrative headache. In our region, this would leave patients in 8 parishes with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 11 Internal NACHC survey data 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. We currently make medications available to our patients at Actual Acquisition cost with a dispensing according to the sliding fee scale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $35,000 per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2,000 per monthto purchase these same drugs at the 340B ceiling price. This represents a 175% increase in upfront capital required for procurement. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG (OHCC), estimates its 2027 Annual Rebate Opportunity Cost to be approximately $396,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $35,000]. Based on the drugs selected for 2027, we anticipate this will be an additional $58,000 per month in purchase cost. Wholesaler Payment Terms: Our wholesaler requires semi-monthly payments for drugs purchased. Even though we adjudicate claims on a daily basis, there is no defined payment date from our PBMs. We will be dispensing medications and having to purchase replacement medication before we receive primary payment from the PBM. This further exacerbates the cash flow for the organization. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. a. Financial Impact of Rebate Denials and Delays HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC), urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% would result in a net annual loss of $21,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 9516 Airline Hwy. | BATON ROUGE, LA 70815 | P (225) 655-OHCC (6422) | OHCC.ORG imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC) strongly urges HRSA to exempt CHCs from any 340B Rebate Mdel Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC) believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. [HIV/AIDS Alliance for Region Two (HAART), Inc. dba Open Health Care Clinic (OHCC) appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me for clarification Sincerely, Paul S Knecht, M.S., Pharm. D. Senior Vice-President/Chief Pharmacy Officer
HRSA-2026-0001-1790Anonymous Anonymous2026-04-19T04:00Z901 chars
Thank you for the opportunity to provide comments. HRSA has proposed a new 340B rebate model that could change how we fund care for our patients. This is a direct threat to our ability to provide quality healthcare services to our community. The model replaces immediate discounts with a delayed rebate system. This creates three critical problems for us, as a Federally Qualified Healthcare Center: 1. Cash Flow: We lose the immediate funds used to support behavioral health services and pharmacy discounts for patients who otherwise cannot afford their life-saving medications. 2. Increased Costs: We will need new IT and administrative staff just to track and chase these rebates from manufacturers. 3. Patient Impact: If our funding is delayed or reduced, we may be forced to cut back on healthcare services and restrict access to high-cost medications. Thank you for your review of our concerns.
HRSA-2026-0001-1791Tigerlily Foundation2026-04-20T04:00Z9,968 chars
See attached file(s) To the Health Resources and Services Administration: Tigerlily Foundation dedicated to educating, advocating for, and supporting young women before, during and after cancer respectfully submits these comments in response to HRSAs consideration of a rebate model under the 340B program. Our mission is to ensure that every patient, especially the most vulnerable, receives compassionate, equitable, and affordable care. Too often, we hear from young women, marginalized communities, and those in rural communities that the cost of life-saving medications remains out of reach even though hospitals are receiving deep discounts through the 340B program meant to help exactly these patients. We believe that a rebate model is a necessary and long-overdue step toward transparency, integrity, and patient-first care. When the 340B program was created, it had a simple, important intent: help safety-net hospitals afford drugs so they could pass those savings directly to patients in need. But today, that intent is being bent and misused. Hospitals have grown richer, while patients grow sicker and deeper in debt. Research shows that after joining 340B, many hospitals cut back on free and discounted care, increased their stock and bond holdings, and left staffing levels unchanged. Meanwhile, families are drowning in medical bills more than 60% of all household debt in America is now from medical care. Further research from the National Consumers League shows that among those with medical debt, 54% skipped needed follow-up care and 51% depleted most or all of their savings. For cancer patients, the situation is even worse nearly half of patients with cancer and cancer survivors incur medical debt, and those with debt are three times more likely to fall behind on recommended screenings. We see the harm firsthand. As Garrina Ross, metastatic breast cancer thriver and Tigerlily ANGEL Advocate, shared: After cancer treatment, I drained savings, used work bonuses, launched a GoFundMe, and withdrew from my 401(k). Bills went to collections, damaged my credit, and made it difficult to secure housing. Patients should not face financial devastation while hospitals benefit from federal drug discounts tied to their care. Garrinas story is not an exception. It is a pattern one that is especially cruel given that oncology treatments account for 41% of all 340B drug purchases, nearly three times higher than any other therapeutic class. Hospitals receiving these discounts are supposed to use the savings to help vulnerable patients. Instead, many are using aggressive debt collection practices and falling below the national average for charity care. We support HRSAs consideration of a rebate model because it would require hospitals to prove before they receive a discount that the drug is going to a patient who truly relies on the safety net. To us, this is simple common sense. If a hospital wants a 340B discount, they should be able to show: That the patient is low-income, underinsured or uninsured. That the savings are actually being used to lower costs for that patient. That the hospital is not double-dipping or selling the same drug at full price to a private insurer. We are not experts in every data field. But we know that transparency saves lives. HRSA should require clear, basic information on every 340B drug transaction what drug, for whom, at what cost, and with what benefit to the patient. And that information should be made public, regularly and without delay, so that patients and advocates can see where the money is going. We are deeply concerned that large hospital systems, pharmacy chains, and pharmacy benefit managers (PBMs) have turned 340B into a profit center. That is a betrayal of the patients this program was designed to serve. We therefore urge HRSA to: 1. Apply the rebate model to all current 340B participants no exceptions, no carve-outs for politically powerful groups. Any exemption will create a loophole for abuse. 2. Require basic patient and transaction data before the rebate is paid, including the amount the patient paid out-of-pocket. 3. Release public, easy-to-understand reports regularly so that patients, advocates, and honest providers can see whether 340B is working as intended. 4. Ensure that safety-net clinics the true front lines of care are not left behind. Currently, they receive the least revenue from 340B while serving the most vulnerable patients. That must change. Tigerlily Foundation did not become a voice for young women facing cancer by staying silent when systems fail patients. We speak up because silence costs lives. We urge HRSA to move forward boldly, without delay, and without weakening the rebate model to please powerful hospital systems and their corporate partners. The patients we serve cannot wait. April 20, 2026 Health Resources and Services Administration Rebate Model in the 340B Program HHS Docket No. HRSA-2026-03042 To the Health Resources and Services Administration: Tigerlily Foundation dedicated to educating, advocating for, and supporting young women before, during and after cancer respectfully submits these comments in response to HRSAs consideration of a rebate model under the 340B program. Our mission is to ensure that every patient, especially the most vulnerable, receives compassionate, equitable, and affordable care. Too often, we hear from young women, marginalized communities, and those in rural communities that the cost of life-saving medications remains out of reach even though hospitals are receiving deep discounts through the 340B program meant to help exactly these patients. We believe that a rebate model is a necessary and long-overdue step toward transparency, integrity, and patient-first care. When the 340B program was created, it had a simple, important intent: help safety-net hospitals afford drugs so they could pass those savings directly to patients in need. But today, that intent is being bent and misused. Hospitals have grown richer, while patients grow sicker and deeper in debt. Research shows that after joining 340B, many hospitals cut back on free and discounted care, increased their stock and bond holdings, and left staffing levels unchanged. Meanwhile, families are drowning in medical bills more than 60% of all household debt in America is now from medical care. Further research from the National Consumers League shows that among those with medical debt, 54% skipped needed follow-up care and 51% depleted most or all of their savings. For cancer patients, the situation is even worse nearly half of patients with cancer and cancer survivors incur medical debt, and those with debt are three times more likely to fall behind on recommended screenings. We see the harm firsthand. As Garrina Ross, metastatic breast cancer thriver and Tigerlily ANGEL Advocate, shared: After cancer treatment, I drained savings, used work bonuses, launched a GoFundMe, and withdrew from my 401(k). Bills went to collections, damaged my credit, and made it difficult to secure housing. Patients should not face financial devastation while hospitals benefit from federal drug discounts tied to their care. Garrinas story is not an exception. It is a pattern one that is especially cruel given that oncology treatments account for 41% of all 340B drug purchases, nearly three times higher than any other therapeutic class. Hospitals receiving these discounts are supposed to use the savings to help vulnerable patients. Instead, many are using aggressive debt collection practices and falling below the national average for charity care. We support HRSAs consideration of a rebate model because it would require hospitals to prove before they receive a discount that the drug is going to a patient who truly relies on the safety net. To us, this is simple common sense. If a hospital wants a 340B discount, they should be able to show: That the patient is low-income, underinsured or uninsured. That the savings are actually being used to lower costs for that patient. That the hospital is not double-dipping or selling the same drug at full price to a private insurer. We are not experts in every data field. But we know that transparency saves lives. HRSA should require clear, basic information on every 340B drug transaction what drug, for whom, at what cost, and with what benefit to the patient. And that information should be made public, regularly and without delay, so that patients and advocates can see where the money is going. We are deeply concerned that large hospital systems, pharmacy chains, and pharmacy benefit managers (PBMs) have turned 340B into a profit center. That is a betrayal of the patients this program was designed to serve. We therefore urge HRSA to: 1. Apply the rebate model to all current 340B participants no exceptions, no carve-outs for politically powerful groups. Any exemption will create a loophole for abuse. 2. Require basic patient and transaction data before the rebate is paid, including the amount the patient paid out-of-pocket. 3. Release public, easy-to-understand reports regularly so that patients, advocates, and honest providers can see whether 340B is working as intended. 4. Ensure that safety-net clinics the true front lines of care are not left behind. Currently, they receive the least revenue from 340B while serving the most vulnerable patients. That must change. Tigerlily Foundation did not become a voice for young women facing cancer by staying silent when systems fail patients. We speak up because silence costs lives. We urge HRSA to move forward boldly, without delay, and without weakening the rebate model to please powerful hospital systems and their corporate partners. The patients we serve cannot wait. Respectfully submitted, Lizzie Wittig Vice President, HEAL Policy Center of Excellence Tigerlily Foundation
HRSA-2026-0001-1792David Davis · Baton Rouge, LA, United States2026-04-20T04:00Z3,857 chars
To: Health Resources and Services Administration (HRSA) Re: RFI: 340B Rebate Model Pilot Program (Docket No. HRSA-2026-03042) Date: April 20, 2026 I. Introduction: The Perspective of a Process-Oriented Stakeholder I am submitting this comment as a retired engineer and small business owner with a career background in precision technical exploration and as a current Medicare Advantage beneficiary. My recent research into the operational differences between for-profit and non-profit hospital systems led me to investigate the complexities of the 340B program. This perspective is rooted in a professional commitment to process integrity and a skepticism of systems that prioritize administrative revenue over clinical efficiency. I am writing to express my support for the 340B Rebate Model Pilot Program. II. The "Mixed-Use" Ambiguity and Patient Status The RFI seeks input on the "operational impacts" of a rebate model. In October 2025, I went to an Emergency Room in Baton Rouge, LA, for an acute gallbladder issue. While I was technically "admitted," the subsequent handling of my stay suggested a lack of distinction between Inpatient and Observation status. According to HRSAs guidelines, hospitals must safeguard against the use of 340B-priced drugs for inpatients. However, in "mixed-use" settings like a surgical department, these lines are notoriously blurred. I am concerned that the current "Upfront Discount" model incentivizes hospitals to keep patients in a state of administrative limbo to maintain 340B eligibility for the drugs they administer, essentially using the "daylight" between regulatory definitions to maximize the pharmacy "spread." III. Case Study: The Disconnection of Clinical Data from Pharmacy Protocol During an extended stay awaiting surgery, I was maintained on a continuous IV antibiotic drip despite consistent blood work showing no signs of infection and no other clinical indicators of illness. When I challenged the necessity of this treatment, citing the risks of antibiotic resistance, the medical staff initially insisted on continuing "standard protocol." As a former business owner, I recognize a volume-driven incentive when I see one. If a hospital acquires a drug at a 50% discount but is reimbursed at a full retail rate by my Medicare Advantage plan, the drug becomes a profit engine. The Rebate Model would address this by requiring the hospital to prove my outpatient eligibility before receiving the discount, which would refocus hospital culture on clinical stewardship rather than the financial "spread." IV. The "Captive Audience" Barrier to Economic Efficiency Finally, I would like to address "Patient Access." When my surgery was delayed over a weekend, I offered to leave the hospital to save my $95 per day copay, as well as the substantial costs to my insurance companyand by extension, the American taxpayer. The hospital refused, using administrative leveragethe potential loss of my surgical "time slot"to force a 60-hour stay that was medically unnecessary. To be clear, I could have left anyway but did not want to risk a surgical delay of unknown duration perhaps extending more than a week. This "warehousing" of stable patients ensures the hospital can continue a high-volume billing cycle, including the use of 340B-eligible drugs. A Rebate Model would provide a much-needed guardrail, ensuring that these federal discounts are traceable and verifiable, rather than serving as an invisible subsidy for inefficient inpatient management. V. Conclusion The integrity of the 340B program depends on transparency. I urge HRSA to move forward with the Rebate Model Pilot Program to ensure that medical necessity, not the complexity of pharmacy "mixed-use" tracking, remains the primary driver of patient care at the bedside. Respectfully, David H. Davis Baton Rouge, LA
HRSA-2026-0001-1793Rhode Island Health Center Association2026-04-20T04:00Z17,624 chars
See attached file(s) 235 Promenade Street, Suite 455 Providence, RI 02908 401.274.1771 info@rihca.org www.rihca.org April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted via regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Rhode Islands eight Community Health Centers (CHCs) and the more than 220,000 patients they serve, the Rhode Island Health Center Association (RIHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. RIHCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve the stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include safeguards to reduce the negative financial impacts on CHCs and their patients. 340B savings underwrite a wide range of services on which CHCs low-income patients rely. 340B savings are essential to CHCs financial stability, and their ability to provide services at affordable rates to their low-income and uninsured patients. Consistent with federal law2 and 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Section 330(e)(5)(D) of the Public Health Service Act. regulation3, CHCs invest every penny of 340B savings into activities that expand access to care for the communities they serve. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services on which CHC patients rely. For example, in Rhode Island, CHCs routinely rely on 340B savings to support services such as patient support, dental care and behavioral health services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. A rebate model will create massive cash flow and administrative challenges for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than the cost at the time. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive. These discounts lower total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or 3 45 Code of Federal Register 75.307 Program Income administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impact will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. Some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs have had to reduce employee benefits, implement lay-offs, and reduce hours or services. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted. Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B. Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing a rebate model on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before they need to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided monthly.) To assist HRSA in establishing this system, Attachment A lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) A neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication4 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. The sustainability of Rhode Islands primary care safety netand the ability of more than 220,000 people to access affordable primary care, behavioral health care, and dental care depends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. Thank you for your consideration. For further information, please contact me at Enicolella@rihca.org. Sincerely, Elena Nicolella President and CEO 4 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Attachment A Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1794TMC Health2026-04-20T04:00Z13,216 chars
See attached file(s) Tucson Medical Center appreciates the opportunity to submit comments in response to HRSAs Request for Information regarding the proposed rebate model. As a 340B covered entity, we are deeply concerned that the implementation of a rebate-based framework would impose significant and undue operational and financial burdens. While we recognize HRSAs intent to promote program integrity and transparency, the proposed model would fundamentally shift complex administrative responsibilities onto covered entities in a manner that is neither efficient nor sustainable. First, the rebate model would introduce a substantial increase in administrative burden. Under the current structure, Tucson Medical Center is able to manage 340B compliance through established processes and systems. However, a rebate model would require the tracking, submission, reconciliation, and dispute resolution of rebate claims across numerous manufacturers, each potentially maintaining unique submission requirements, timelines, and documentation standards. The lack of consistency in required data elements across manufacturers would create a fragmented and highly manual process, increasing the risk of errors, delays, and compliance challenges. This complexity would necessitate significant investments in new systems and workflows that are not currently required under the current program. Tucson Medical Center would need to hire dedicated staff to manage data submission and claim reconciliation with SentryDS, our third-party administrator (TPA); and as more manufacturers drugs join the rebate model, the burden would only grow. Even an initial personnel cost of $75,000 per year could balloon rapidly, depending on how quickly the proposed model gains popularity with manufacturers. In addition to internal administrative strain, Tucson Medical Center would face increased external costs as the need to navigate varying manufacturer requirements and ensure compliance with evolving rebate processes would likely require expanded reliance on SentryDS, specialized consultants, and external legal counsel. Some of these services, such as external legal counsel, come at a considerable cost, while additional costs tied to our automated TPA services are hard to estimate as they are not yet established by the vendor. This further erodes the financial benefits that the 340B program is intended to provide. Moreover, in addition to the dedicated staff mentioned above that would be dedicated to data submission and claim reconciliation, Tucson Medical Center may be forced to hire or consult with external experts in data analytics, compliance, and contract management until such talent is developed in-house that has the bandwidth to work on drug rebates. These staffing increases, external consultant, and legal counsel needs would represent a long-term financial obligation that is not aligned with the programs intent to support safety-net providers. The cumulative effect of these burdens would force Tucson Medical Center to divert limited resources away from its core mission of serving its community. The 340B program was established to enable covered entities to stretch resources, allowing them to expand access to care and improve health outcomes for vulnerable populations. By introducing a rebate model that requires significant administrative overhead and financial investment, the proposed approach risks undermining this foundational purpose. Resources that would otherwise be directed toward patient care, community health initiatives, and essential services would instead be allocated to managing rebate compliance. In addition to cost outlay for additional staff and external resource needs, the proposed rebate model would, in practical effect, require Tucson Medical Center to finance manufacturers obligations under the 340B program by paying full price for drugs upfront and waiting for reimbursement at a later date. During this interval, manufacturers retain the benefit of those funds without any obligation to compensate covered entities for the time value of money. As a result, the model effectively creates an interest-free loan from covered entities to manufacturers. This shift is not merely a technical change in payment structureit represents a material transfer of financial burden that could otherwise be used to support patient care, expand services, and address community health needs. Assuming a 60-day timeframe looking at purchase of the drug, dispensing of the drug and its immediate submission to the platform stipulated by the manufacturer, and rebate issuance within 10 days of submission for just the ten (10) drugs listed in the original rebate model proposal, Tucson Medical Center could see an approximate $400,000 in additional expense in a rolling 60-day period. While this figure is a projection of funds that would be unavailable to the covered entity to provide care until payment, it is assuming that Tucson Medical Center will not see rejections from the manufacturer of valid claims, which would result in increased delays of payment or outright loss of valid 340B savings. Furthermore, Tucson Medical Center is concerned about the broader implications of the rebate model in light of ongoing legal developments, including the recent AbbVie v. HRSA litigation. In that case, AbbVie challenges HRSAs patient definition as overly broad. The proposed rebate model, in practice, could allow manufacturers to operationalize their own interpretations of patient eligibility at the front end of the transaction by determining which claims are eligible for rebate. This effectively shifts interpretive authority to manufacturers, at least initially, and places covered entities in the position of having to contest denials after the fact. Such a dynamic creates uncertainty and inconsistency, and it risks imposing manufacturer-driven definitions that may not align with HRSAs established guidance. This not only complicates compliance but also introduces additional administrative disputes that further strain covered entity resources. Tucson Medical Center respectfully submits that the proposed rebate model would impose significant administrative, financial, and operational burdens that are inconsistent with the intent and purpose of the 340B program. We urge HRSA to carefully consider the practical implications of this model on covered entities and the communities they serve. Thank you for the opportunity to provide input and for your continued commitment to ensuring the integrity and effectiveness of the 340B program. Tucson Medical Center appreciates the opportunity to submit comments in response to HRSAs Request for Information regarding the proposed rebate model. As a 340B covered entity, we are deeply concerned that the implementation of a rebate-based framework would impose significant and undue operational and financial burdens. While we recognize HRSAs intent to promote program integrity and transparency, the proposed model would fundamentally shift complex administrative responsibilities onto covered entities in a manner that is neither efficient nor sustainable. First, the rebate model would introduce a substantial increase in administrative burden. Under the current structure, Tucson Medical Center is able to manage 340B compliance through established processes and systems. However, a rebate model would require the tracking, submission, reconciliation, and dispute resolution of rebate claims across numerous manufacturers, each potentially maintaining unique submission requirements, timelines, and documentation standards. The lack of consistency in required data elements across manufacturers would create a fragmented and highly manual process, increasing the risk of errors, delays, and compliance challenges. This complexity would necessitate significant investments in new systems and workflows that are not currently required under the current program. Tucson Medical Center would need to hire dedicated staff to manage data submission and claim reconciliation with SentryDS, our third-party administrator (TPA); and as more manufacturers drugs join the rebate model, the burden would only grow. Even an initial personnel cost of $75,000 per year could balloon rapidly, depending on how quickly the proposed model gains popularity with manufacturers. In addition to internal administrative strain, Tucson Medical Center would face increased external costs as the need to navigate varying manufacturer requirements and ensure compliance with evolving rebate processes would likely require expanded reliance on SentryDS, specialized consultants, and external legal counsel. Some of these services, such as external legal counsel, come at a considerable cost, while additional costs tied to our automated TPA services are hard to estimate as they are not yet established by the vendor. This further erodes the financial benefits that the 340B program is intended to provide. Moreover, in addition to the dedicated staff mentioned above that would be dedicated to data submission and claim reconciliation, Tucson Medical Center may be forced to hire or consult with external experts in data analytics, compliance, and contract management until such talent is developed in-house that has the bandwidth to work on drug rebates. These staffing increases, external consultant, and legal counsel needs would represent a long-term financial obligation that is not aligned with the programs intent to support safety-net providers. The cumulative effect of these burdens would force Tucson Medical Center to divert limited resources away from its core mission of serving its community. The 340B program was established to enable covered entities to stretch resources, allowing them to expand access to care and improve health outcomes for vulnerable populations. By introducing a rebate model that requires significant administrative overhead and financial investment, the proposed approach risks undermining this foundational purpose. Resources that would otherwise be directed toward patient care, community health initiatives, and essential services would instead be allocated to managing rebate compliance. In addition to cost outlay for additional staff and external resource needs, the proposed rebate model would, in practical effect, require Tucson Medical Center to finance manufacturers obligations under the 340B program by paying full price for drugs upfront and waiting for reimbursement at a later date. During this interval, manufacturers retain the benefit of those funds without any obligation to compensate covered entities for the time value of money. As a result, the model effectively creates an interest-free loan from covered entities to manufacturers. This shift is not merely a technical change in payment structureit represents a material transfer of financial burden that could otherwise be used to support patient care, expand services, and address community health needs. Assuming a 60-day timeframe looking at purchase of the drug, dispensing of the drug and its immediate submission to the platform stipulated by the manufacturer, and rebate issuance within 10 days of submission for just the ten (10) drugs listed in the original rebate model proposal, Tucson Medical Center could see an approximate $400,000 in additional expense in a rolling 60-day period. While this figure is a projection of funds that would be unavailable to the covered entity to provide care until payment, it is assuming that Tucson Medical Center will not see rejections from the manufacturer of valid claims, which would result in increased delays of payment or outright loss of valid 340B savings. Furthermore, Tucson Medical Center is concerned about the broader implications of the rebate model in light of ongoing legal developments, including the recent AbbVie v. HRSA litigation. In that case, AbbVie challenges HRSAs patient definition as overly broad. The proposed rebate model, in practice, could allow manufacturers to operationalize their own interpretations of patient eligibility at the front end of the transaction by determining which claims are eligible for rebate. This effectively shifts interpretive authority to manufacturers, at least initially, and places covered entities in the position of having to contest denials after the fact. Such a dynamic creates uncertainty and inconsistency, and it risks imposing manufacturer-driven definitions that may not align with HRSAs established guidance. This not only complicates compliance but also introduces additional administrative disputes that further strain covered entity resources. Tucson Medical Center respectfully submits that the proposed rebate model would impose significant administrative, financial, and operational burdens that are inconsistent with the intent and purpose of the 340B program. We urge HRSA to carefully consider the practical implications of this model on covered entities and the communities they serve. Thank you for the opportunity to provide input and for your continued commitment to ensuring the integrity and effectiveness of the 340B program.
HRSA-2026-0001-1795The Craneware Group2026-04-20T04:00Z31,473 chars
The Craneware Group appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. The Craneware Group provides financial, compliance, and operational infrastructure solutions to hospitals and health systems nationwide. Our systems support covered entities participating in the 340B Drug Pricing Program through eligibility determination, transaction-level reconciliation, audit readiness, contract pharmacy oversight, duplicate discount prevention, and cross-program reporting. To assess the real-world operational and financial implications of the proposed rebate model, The Craneware Group analyzed 2025 activity across a representative subset of customers using our solutions. Within this subset, approximately 169 covered entities processed roughly 17 million 340B-related prescription and medical transactions associated with IPAY 2026 and 2027-designated drugs that would be directly impacted by a rebate-based model. Within this subset alone, the modeled financial exposure associated with a shift to wholesale acquisition cost (WAC) purchasing and rebate recovery exceeds $700 million annually. Based on this level of operational visibility, we view the proposed rebate model as a structural shift in program design rather than a procedural refinement. Transitioning from an upfront statutory discount model to a post-adjudication rebate model would materially alter working capital dynamics, compliance workflows, data exchange requirements, and dispute resolution processes across covered entities. Hospitals collectively provide more than $40 billion annually in uncompensated care based on American Hospital Association survey data. At the same time, many hospitals particularly rural and safety-net providers operate at or near breakeven margins, reflecting sustained financial pressure across the field. In this environment, the 340B Program serves as a critical financial stabilizer supporting patient access in vulnerable communities. Policy changes that introduce payment timing uncertainty or expand administrative complexity should be evaluated in the context of these existing constraints. A rebate-based model does not simply adjust reimbursement mechanics; it reallocates financial and operational timing responsibilities in ways that carry measurable implications for program scalability, predictability, and sustainability. Taken together, these considerations reflect a consistent pattern: the proposed rebate model introduces new financial exposure, expands administrative complexity, and relies on data infrastructure that remains fragmented and difficult to standardize in practice. These dynamics compound rather than operate independently, creating system-level risk across covered entities. With consideration for the operational, financial, and structural considerations outlined below, we have significant concerns that a rebate-based model may introduce risks that would be difficult to reverse once implemented at scale. These risks include disruption to hospital cash flow, increased administrative fragmentation, and potential erosion of the programs ability to support patient access. Accordingly, we believe a rebate-based model represents a fundamental departure from the longstanding design of the 340B Program and should not be advanced absent clear evidence that it can be implemented without destabilizing covered entities. If HRSA elects to proceed with a pilot despite these concerns, it should be implemented in a limited, controlled environment with transparent administration across a defined subset of covered entities. This approach is necessary to enable rigorous evaluation of operational, financial, and compliance impacts before any broader implementation is considered. Our full comments in the attached file are offered to support that evaluation and to help ensure that operational sustainability, financial stability, and patient access remain central to any proposed modernization consistent with the intent of the 340B statute. The considerations outlined in this response are not theoretical they reflect current operating conditions across covered entities and observed performance of similar rebate-based frameworks in practice. The Craneware Group remains committed to supporting customers through evolving regulatory environments and appreciates HRSAs deliberate and data-driven approach. Respectfully submitted, Lidia A. Rodriguez-Hupp Chief Customer Officer The Craneware Group 1 Submitted VIA Regulations.gov April 20, 2026 Re: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program I. Introduction The Craneware Group appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. The Craneware Group provides financial, compliance, and operational infrastructure solutions to hospitals and health systems nationwide. Our systems support covered entities participating in the 340B Drug Pricing Program through eligibility determination, transaction-level reconciliation, audit readiness, contract pharmacy oversight, duplicate discount prevention, and cross-program reporting. To assess the real-world operational and financial implications of the proposed rebate model, The Craneware Group analyzed 2025 activity across a representative subset of customers using our solutions. Within this subset, approximately 169 covered entities processed roughly 17 million 340B-related prescription and medical transactions associated with IPAY 2026 and 2027- designated drugs that would be directly impacted by a rebate-based model. Within this subset alone, the modeled financial exposure associated with a shift to wholesale acquisition cost (WAC) purchasing and rebate recovery exceeds $700 million annually. Based on this level of operational visibility, we view the proposed rebate model as a structural shift in program design rather than a procedural refinement. Transitioning from an upfront statutory discount model to a post-adjudication rebate model would materially alter working capital dynamics, compliance workflows, data exchange requirements, and dispute resolution processes across covered entities. Hospitals collectively provide more than $40 billion annually in uncompensated care based on American Hospital Association survey data. At the same time, many hospitals particularly rural and safety-net providers operate at or near breakeven margins, reflecting sustained 2 financial pressure across the field.1 In this environment, the 340B Program serves as a critical financial stabilizer supporting patient access in vulnerable communities. Policy changes that introduce payment timing uncertainty or expand administrative complexity should be evaluated in the context of these existing constraints. A rebate-based model does not simply adjust reimbursement mechanics; it reallocates financial and operational timing responsibilities in ways that carry measurable implications for program scalability, predictability, and sustainability. Taken together, these considerations reflect a consistent pattern: the proposed rebate model introduces new financial exposure, expands administrative complexity, and relies on data infrastructure that remains fragmented and difficult to standardize in practice. These dynamics compound rather than operate independently, creating system-level risk across covered entities. With consideration for the operational, financial, and structural considerations outlined below, we have significant concerns that a rebate-based model may introduce risks that would be difficult to reverse once implemented at scale. These risks include disruption to hospital cash flow, increased administrative fragmentation, and potential erosion of the programs ability to support patient access. Accordingly, we believe a rebate-based model represents a fundamental departure from the longstanding design of the 340B Program and should not be advanced absent clear evidence that it can be implemented without destabilizing covered entities. If HRSA elects to proceed with a pilot despite these concerns, it should be implemented in a limited, controlled environment with transparent administration across a defined subset of covered entities. This approach is necessary to enable rigorous evaluation of operational, financial, and compliance impacts before any broader implementation is considered. Our comments are offered to support that evaluation and to help ensure that operational sustainability, financial stability, and patient access remain central to any proposed modernization consistent with the intent of the 340B statute. 1 American Hospital Association reporting indicates hospitals provided approximately $41.4 billion in uncompensated care in 2023 and that many rural hospitals continue to face significant operating margin pressure. 3 II. Structural Distinction Between Upfront Discounts and Rebates For more than three decades, the 340B Program has operated as an upfront discount model. Under this structure: Statutory ceiling prices are applied at the time of purchase Covered entities realize discounted pricing at the point of acquisition Administrative activities focus on eligibility verification, diversion prevention, and statutory duplicate discount safeguardsnot claims-based reimbursement recovery or post-transaction reconciliation A rebate-based model is not a procedural refinement; it is an architectural shift. Under a rebate model: Covered entities would purchase drugs at a higher initial price, such as wholesale acquisition cost (WAC) Claims-level data would be compiled and submitted to manufacturers for validation Manufacturers would adjudicate rebate eligibility Payment timing, denial protocols, and reconciliation processes would expand materially This approach converts the program from a price-at-purchase structure into a post-adjudication claims model, fundamentally altering how value is realized within the program. HRSAs evaluation should account for the systemic implications of this transformation, including changes in payment timing, reliance on manufacturer adjudication, and the introduction of new administrative processes that increase operational burden and create variability in financial outcomes. These changes introduce delayed revenue realization, expanded dispute cycles, and increased administrative complexityeach of which carries implications for the financial stability and operational predictability of covered entities. III. Current Administrative Infrastructure The Craneware Groups experience across supported 340B organizations reflects a highly complex and increasingly fragmented administrative environment. Covered entities operate across diverse care settings, payer structures, and, in many cases, multiple state regulatory models, each with distinct Medicaid policies, billing requirements, and reporting expectations. 4 Under the current upfront discount model, administrative operations extend well beyond basic program participation and include: Eligibility validation across multiple care locations and provider types Accumulator management across in-house and contract pharmacy dispensing Contract pharmacy reconciliation across geographically distributed networks Audit documentation and compliance readiness across federal and manufacturer requirements Medicaid carve-in and carve-out coordination, often varying by state and payer type For multi-state health systems, these processes must be executed across non-uniform Medicaid policies, differing managed care structures, and state-specific reporting requirements, requiring significant system configuration, operational oversight, and continuous monitoring. Administrative requirements associated with 340B participation have expanded materially in recent years due to manufacturer-imposed reporting conditions, platform-specific submission mandates, and increased audit scrutiny. These requirements are not standardized and frequently vary by manufacturer, resulting in parallel processes across multiple third-party platforms and submission systems. A. System-Level Administrative Saturation The current 340B administrative environment no longer functions as a single-program workflow. It operates as a multi-system, multi-party coordination model requiring alignment across: Covered entities Contract pharmacies Wholesalers Manufacturers State Medicaid agencies Managed care organizations Third-party reporting platforms (e.g., ESP, Beacon, Kalderos) 5 These systems operate with non-uniform data standards, varying submission timelines, and differing adjudication expectations. As a result, covered entities must maintain parallel processes to meet compliance obligations across multiple, unaligned models. Administrative capacity is therefore constrained not by participation volume alone, but by the cumulative complexity of overlapping, non-standardized, and frequently evolving requirements. B. Implications for Rebate Model Evaluation Any evaluation of a rebate-based model must account for this existing system-level saturation. A rebate model would not be introduced into a neutral administrative environment; it would be layered onto an already fragmented and capacity-constrained system. Absent meaningful standardization and reduction of existing administrative burden, a rebate model would compound fragmentation, increase operational strain, and introduce additional points of failure across already complex, multi-state healthcare delivery systems. IV. Contract Pharmacy Restrictions and Program Balance In addition to administrative complexity, existing distribution constraints further shape how 340B operations function in practice. In recent years, manufacturer-imposed contract pharmacy distribution conditions and expanded data reporting requirements have materially reshaped 340B operations for covered entities. These actions have introduced significant administrative complexity and have been associated with measurable financial impacts, as covered entities experience reduced access to 340B pricing in contract pharmacy arrangements while continuing to serve eligible patient populations. Based on observed utilization patterns across a representative sample of covered entities, certain high-impact drug categories alone represented more than $700 million in 340B program value in 2025. This underscores the scale of financial exposure that would become subject to rebate timing variability under a post-adjudication model. 6 If a 340B Rebate Model Pilot Program is structured to provide manufacturers with standardized, claims-level transparency sufficient to address duplicate discount concerns, the operational basis for maintaining certain contract pharmacy restrictions is materially weakened. A rebate-based model designed to enhance transactional transparency would alter the conditions under which current distribution limitations have been justified. Maintaining both expanded rebate infrastructure and restrictive contract pharmacy limitations would compound administrative burden while perpetuating financial asymmetry between manufacturers and covered entities, without corresponding gains in program integrity. Contract pharmacies often extend dispensing access in rural and underserved communities. These arrangements are particularly important where pharmacy access is otherwise limited and where 340B savings help sustain essential services. To preserve program balance and patient access, HRSA should consider whether participation in a rebate pilot should require reassessment of manufacturer-imposed limitations premised on duplicate discount concerns. While HRSA has previously noted limitations in its authority over contract pharmacy arrangements, the design and implementation of a rebate pilot program falls squarely within HRSAs authority. Accordingly, the interaction between rebate mechanisms and existing distribution limitations should be addressed as a defined condition of the pilots rules of engagement. Evaluating rebate implementation and contract pharmacy restrictions in isolation risks perpetuating asymmetric administrative and financial burden across covered entities. If enhanced data transparency meaningfully addresses manufacturer visibility concerns, alignment between pricing mechanics and distribution practices should be incorporated into a comprehensive and balanced pilot design. V. Systems and Data Infrastructure Requirements Beyond program structure, the feasibility of a rebate model depends on the underlying data and systems infrastructure required to support it. A rebate-based model would require the development or modification of significant data and systems infrastructure, including: Timely claims-level data transmission capability Standardized manufacturer submission formats 7 Secure patient-level data transmission protocols Cross-system reconciliation among: o Wholesalers o Contract pharmacies o Medicaid systems o Medicare Maximum Fair Price (MFP) program data o Manufacturer rebate adjudication systems These requirements necessitate coordinated data exchange across multiple stakeholders operating on non-uniform systems, with varying data standards, submission timelines, and reconciliation processes. Across the covered entities supported by our systems, customers report extensive operational effort and resource allocation to comply with existing manufacturer-imposed rebate and reporting models, including those associated with the Medicare Drug Price Negotiation Program (MFP). Despite these investments, organizations continue to experience persistent challenges achieving accurate and consistent reconciliation. These challenges are driven by non- standardized data requirements, evolving submission expectations, and fragmented system interactions across stakeholders. This experience demonstrates that even with significant investment and focused operational effort, rebate-based data exchange and reconciliation processes remain difficult to standardize and execute reliably in practice. Introducing a 340B rebate model would extend these same structural challenges across a broader set of transactions and participants, increasing the risk of data inconsistency, reconciliation delays, and administrative burden across already complex, multi-system environments. VI. Cash Flow and Payment Timing Considerations These operational and data dependencies translate directly into financial implications for covered entities and are consistent across both aggregate system-level analysis and individual provider-level modeling. Under the current upfront discount model, covered entities realize the statutory ceiling price at the time of purchase. With recent national reporting showing median hospital operating margins 8 generally in the 1% to 3% range, many providers remain financially constrained, particularly rural and safety-net hospitals.2 By contrast, manufacturers in the pharmaceutical sector operate with significantly higher margins, and changes that delay or alter the realization of 340B pricing shift additional financial and timing advantages toward manufacturers. A rebate model introduces receivable exposure and adjudication variability. Even if rebate payments are required within ten (10) calendar days: Payment lag alters working capital dynamics Denial and dispute cycles introduce revenue uncertainty Revenue timing becomes dependent on manufacturer adjudication processes Contract pharmacy arrangements further complicate revenue allocation For margin-constrained, rural, and safety-net providers, variability in receivable realization has disproportionate operational consequences. Administrative expansion that diverts resources toward rebate adjudication rather than pharmacy or clinical operations indirectly affects patient access to medications. If HRSA pursues a rebate pilot, binding payment timelines, enforceable compliance standards, standardized denial protocols, and appropriate remediation mechanisms will be essential to mitigate destabilization risk. A. Case Study: Financial Impact of a Rebate Model on a High-Performing Community Hospital A high-performing, independent community hospital with an investment-grade credit profile and strong liquidity metrics was evaluated to assess the potential impact of a 340B rebate-based reimbursement model. The organization operates with approximately $310 million in annual operating expenses and maintains financial stability despite ongoing sector-wide margin pressures typical across not-for-profit hospitals. Under a modeled scenario, limited to IPAY 2026 and 2027 drugs, the hospital would experience: $11.0 million in incremental drug acquisition cost 2 Kaufman Hall, National Hospital Flash Report (2025). National median hospital operating margins reported at 1.7% year-to-dat2e through July 2025 and 2.9% year-to-date through September 2025. 9 A 3.55% increase in total operating expenses Hospital operating expenses represent the ongoing cost of providing patient care and maintaining operations, including salaries and benefits, medications, supplies, information systems, utilities, and facility support. As a result, increases in operating expense can directly constrain resources available for care delivery and community access. While a 3.55% increase may appear modest in isolation, this level of cost growth is material in the context of hospital operating margins, which often range between 13% for similar organizations. In this scenario, the modeled increase would fully erode operating margin and result in negative financial performance. Importantly, this analysis reflects a limited subset of drugs, not full program exposure. Expansion of a rebate-based model across additional drug categories would proportionally increase financial impact. In addition to margin compression, the rebate model introduces: Working capital strain due to higher upfront acquisition costs at wholesale acquisition cost (WAC) Dependence on manufacturer adjudication for revenue realization Expanded administrative requirements for claims submission, tracking, and dispute resolution These factors collectively represent a structural shift in financial risk from manufacturers to providers. Notably, this modeled impact applies to an organization with strong financial fundamentals and credit stability. For smaller, rural, or margin-constrained providers, similar reimbursement shifts have disproportionate and potentially destabilizing effects on operations and patient access. This analysis demonstrates that even limited implementation of a rebate-based model introduces financial and operational risks that extend beyond administrative complexity and into core organizational sustainability. 10 VII. Rebate Denials and Dispute Resolution To prevent rebate adjudication from becoming inconsistent or discretionary, a pilot model should establish clear, enforceable standards governing denial practices. At a minimum, the model should require: Explicitly limited and defined grounds for denial Mandatory written rationale with supporting documentation for each denial Standardized denial codes applied consistently across manufacturers Defined appeal processes with clear timelines for review and resolution Escalation pathways subject to HRSA oversight Absent these guardrails, denial variability would introduce significant administrative burden, increase dispute volume, and create financial unpredictability for covered entities. VIII. Duplicate Discounts and MDPNP Coordination We recognize the statutory nonduplication provisions associated with the Medicare Drug Price Negotiation Program (MDPNP) and the coordination complexity faced by manufacturers. However, based on operational experience, a rebate-based structure does not inherently resolve cross-program data coordination challenges. Accurate duplicate discount prevention requires timely, complete, and interoperable data across multiple stakeholders, including covered entities, state Medicaid programs, managed care organizations, and manufacturers. A rebate model, operating retrospectively, continues to rely on post-transaction data matching and reconciliation processes that remain subject to data latency, inconsistency, and variation in data standards across programs. As a result, a rebate model shifts the timing of reconciliation but does not eliminate the underlying data fragmentation that drives duplicate discount risk. Rather than layering a rebate-based model onto existing systems, HRSA should evaluate standardized data harmonization mechanisms designed to address nonduplication objectives without expanding administrative burden. One such approach would be the use of an independent, neutral clearinghouse model to facilitate secure, standardized claims-level validation across stakeholders. A clearinghouse-based approach would support real-time or near-real-time validation, improve data consistency, and reduce reliance on retrospective reconciliation, while preserving the statutory upfront discount structure. 11 IX. Conditions Necessary for a Viable Pilot If HRSA elects to pursue a 340B Rebate Model Pilot Program, the following elements are necessary to support operational feasibility, minimize unintended consequences, and enable meaningful evaluation. A. Governance and Scope Clear articulation of statutory authority, scope, and limitations of the pilot program Voluntary participation for both covered entities and manufacturers Limitation of the pilot to a defined subset of drugs, covered entities, and/or claim types to enable controlled evaluation Defined duration with formal evaluation checkpoints prior to any expansion B. Manufacturer Participation and Accountability Defined and consistent manufacturer participation standards Binding rebate payment timelines with enforceable penalties for noncompliance Standardized denial codes and adjudication criteria applied uniformly across manufacturers Requirement for detailed, claim-level denial rationale to support provider reconciliation and appeal C. Data Standards and Interoperability Uniform national data submission templates and formatting standards Alignment of data definitions across manufacturers, HRSA, and state Medicaid programs Elimination of duplicative or misaligned data submission timing requirements that do not reflect provider workflows Flexibility for covered entities to utilize existing systems and select their own technology or vendor partners, without mandated platforms D. Duplicate Discount and Medicaid Coordination Formal coordination model with state Medicaid agencies to ensure alignment on 340B eligibility reporting and rebate processing Defined process to revisit and reconcile manufacturer rebate denials for claims in which covered entities have reported 340B eligibility to the state Standardized approaches for managing distinctions between Managed Medicaid and Fee-for-Service programs E. Financial Protections and Cash Flow Stability Cash-flow mitigation safeguards to address delays inherent in rebate-based reimbursement 12 Interim payment mechanisms or advance credit structures, where appropriate Clear timelines for dispute resolution and financial reconciliation F. Contract Pharmacy and Distribution Alignment Evaluation of the interaction between rebate implementation and existing contract pharmacy restrictions Requirement that participation in the pilot include reassessment of distribution limitations tied to duplicate discount concerns G. Patient Definition and Compliance Standards Recognition that patient eligibility determinations are governed by covered entity policies and procedures, consistent with statutory guidance Explicit limitations on denial practices that reinterpret or override covered entity patient definitions Clear compliance standards applied consistently across manufacturers and programs H. Administrative Burden and Operational Feasibility Assessment and minimization of incremental administrative burden introduced by rebate processes Avoidance of duplicative reporting requirements across multiple platforms or entities Alignment with existing provider workflows, billing systems, and revenue cycle operations I. Transparency and Evaluation Predefined, transparent evaluation metrics established prior to pilot initiation Measurement of: o Administrative burden o Financial impact on covered entities o Impact on patient access o Accuracy and effectiveness of duplicate discount prevention Public reporting of pilot outcomes to inform future policy decisions Even when limited in scope, however, a rebate pilot would operate within shared infrastructure and workflows, meaning that operational complexity and financial exposure are not confined to the pilot population alone, as shared infrastructure and workflows extend operational and financial effects beyond the defined pilot scope. 13 X. Conclusion The question presented in this RFI is not whether a rebate model is statutorily permissible, but whether it is operationally sustainable across thousands of covered entities operating under diverse financial and administrative constraints. A rebate-based model converts the 340B Program from a price-at-purchase structure into a claims-adjudication model. This transformation carries measurable implications for staffing, systems, cash flow, and dispute resolution. Absent clearly defined guardrails and mitigation mechanisms, it introduces the risk of operational destabilization that reduces financial predictability and, in turn, affects patient access, particularly among rural and safety-net providers operating under thin margins. We recognize HRSAs interest in gathering empirical data and evaluating potential program integrity enhancements. Should HRSA pursue a pilot, careful scope limitation, enforceable payment standards, standardized data protocols, and transparent evaluation metrics will be essential to ensure that the programs core purpose enabling covered entities to stretch scarce federal resources remains intact. However, once implemented, a rebate-based model may be operationally difficult to unwind, even if unintended consequences emerge. For this reason, any pilot must be approached with clear structural safeguards, defined boundaries, and a rigorous evaluation model prior to any broader adoption. The considerations outlined in this response are not theoretical they reflect current operating conditions across covered entities and observed performance of similar rebate-based frameworks in practice. The Craneware Group remains committed to supporting customers through evolving regulatory environments and appreciates HRSAs deliberate and data-driven approach. If HRSA would find it helpful, The Craneware Group would welcome the opportunity to discuss these comments further and provide additional operational or data-informed perspective. Respectfully submitted, Lidia A. Rodriguez-Hupp Chief Customer Officer The Craneware Group lhupp@craneware.com
HRSA-2026-0001-1796Heather McGinn · Roanoke, VA, United States2026-04-20T04:00Z5,535 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of New Horizons Healthcare Pharmacy, an in-house 340B pharmacy and Federally Qualified Health Center (FQHC) serving the Roanoke City/Roanoke County/Craig County/Botetourt County/Alleghany County and surrounding community, I am submitting this comment to express our profound operational and clinical concerns regarding the transition of the 340B Drug Pricing Program toward a rebate model. Coupled with impending Maximum Fair Price (MFP) pricing reductions and the removal of penny pricing, these manufacturer-driven changes are stripping away the essential resources our safety- net facility depends on to survive. I. Our Mission and The Lifeline of 340B New Horizons Healthcare serves as the primary healthcare home for 9800 patients annually. Of those we serve, 46% are uninsured or underinsured, and nearly 60% live below the federal poverty level. Our mission is to provide accessible, comprehensive healthcare to all, particularly those with the greatest financial need that would otherwise go without any care at all. The 340B program is the financial engine that makes this mission a reality. Last year, our 340B savings allowed us to reinvest thousands of dollars directly back into community care. We did not merely absorb these funds; we quantified their impact by expanding our medical, behavioral health, substance use disorder treatment, and dental programs, which provided critical care to more than 5,800 vulnerable patients who otherwise would have gone without. When we discuss 340B savings, we are not just talking about data points on a spreadsheet. We are talking about real liveslike the majority of our patients, who are living with chronic conditions, such as diabetes, hypertension, asthma and heart disease, who rely on our in-house pharmacy to afford their life-saving medications and avoid costly emergency room visits. II. The Catastrophic Impact of Rebate Models on Cash Flow The shift from an upfront discount model to a retroactive rebate model fundamentally threatens our operational viability. As an FQHC, we operate on incredibly thin margins to stretch every federal dollar. Currently, our days cash on hand stands at roughly 29 days. Having to float an increase of medication cost for the 30-90 days a rebate cycle could take, would sink the organization in the first month. III. Manufacturer Transparency and Accountability in Denials Compounding this severe cash flow crisis is the administrative burden and financial risk associated with rebate denials and the extra administrative tasks of following through to make sure rebates are received. Currently, when rebates are denied, the explanations provided by manufacturers are often opaque, generic, and delayed. This leaves our limited in-house pharmacy staff to shoulder the immense administrative burden of investigating, auditing, and appealing claims. Unclear denials without a mandated timeframe for resolution create an unacceptable financial risk for FQHCs. IV. Actionable Solutions: A Neutral Clearinghouse Model We strongly oppose unilateral manufacturer rebate models that leave the extra work and financial liability entirely on covered entities. Instead, we call on HRSA to mandate and back a neutral clearinghouse model. A centralized, third-party clearinghouse is the most effective system to prevent duplicate discounts and ensure program integrity without crippling safety-net providers. A neutral system would streamline the verification process upfront, verify claims efficiently, and entirely eliminate the need for a convoluted, retroactive rebate system that jeopardizes FQHC operations. Conclusion The compounding pressures of rebate models, MFP reductions, and the loss of penny pricing are actively dismantling the safety net our community relies upon. We urge you to protect the 340B program's statutory intent: to stretch scarce federal resources as far as possible to reach more eligible patients. Even gathering data and taking time to write this response is a taxing burden on our small FQHC. We do not have a team dedicated to 340B and administrative tasks. We have the pharmacy, which has a Chief Pharmacy officer who is also a staff pharmacist and the 340B program administrator and auditor. We are doing our due to diligence to be good stewards of the funds we get from this program by not having excessive staff or other costs that do not support our patient care directly. With margins shrinking and the administrative burden growing, we are left with no choice but to either remove critical people from doing the actual work that cares for our community, or hire administrative roles instead of patient care roles, or shut the doors all together. We respectfully request that you halt the imposition of manufacturer-driven rebate models, enforce strict transparency requirements for manufacturers, and champion a neutral clearinghouse solution. Thank you for your time and for your commitment to protecting patient access to care in our most vulnerable communities. Sincerely, Dr. Heather Malone McGinn, PharmD Chief Pharmacy Officer New Horizons Healthcare malone.mcginn@newhorizonshealthcare.org 540-861-1277
HRSA-2026-0001-1797American Pharmacists Association2026-04-20T04:00Z12,925 chars
Dear Administrator Engels, The American Pharmacists Association (APhA) is pleased to respond to HRSAs announcement of the Request for Information: 340B Rebate Model Pilot Program Extension. APhA is the only organization advancing the entire pharmacy profession. It represents pharmacists, student pharmacists, and pharmacy technicians in all practice settings, including but not limited tocommunity pharmacies, hospitals, long-term care facilities, specialty pharmacies, community health centers, physician offices, ambulatory clinics, managed care organizations, hospice settings, and government facilities. Our members strive to improve medication use, advance patient care, and enhance public health. Full comments are attached. April 20, 2026 [Submitted electronically to www.regulations.gov] Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services (HHS) 5600 Fishers Lane Mail Stop 10W29 Rockville, MD 20852 RE: [FR Doc. 2026-03838] Request for Information: 340B Rebate Model Pilot Program Extension Dear Administrator Engels, The American Pharmacists Association (APhA) is pleased to respond to HRSAs announcement of the Request for Information: 340B Rebate Model Pilot Program Extension. APhA is the only organization advancing the entire pharmacy profession. It represents pharmacists, student pharmacists, and pharmacy technicians in all practice settings, including but not limited tocommunity pharmacies, hospitals, long-term care facilities, specialty pharmacies, community health centers, physician offices, ambulatory clinics, managed care organizations, hospice settings, and government facilities. Our members strive to improve medication use, advance patient care, and enhance public health. The request for information (RFI) states that HRSA is gather[ing] input from interested parties regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern the approval of manufacturer rebate plans and the impacts on all stakeholders.1 More specifically, HRSA is inviting comments on a range of issues, including: administrative, operational, financial, and medication access concerns in connection with rebate models; 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287, 7287 (Feb. 17, 2026). Available at: https://www.federalregister.gov/d/2026-03042/p-3. 2 reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount; potential cash-flow impacts; and proposed alternatives and scope-limiting measures to inform a rebate pilot design, including safeguards to promote the integrity of the 340B Program, and avoid duplicate discounts, as well as consistency with the MDPNP nonduplication provision.2 APhA appreciates HRSAs continued effort to gather input before proceeding with any rebate model framework. As noted in APhAs prior comments, pharmacists across practice settings have raised significant questions about how a potential rebate model would affect their day-to- day operations, their patients, and the financial sustainability of services provided through the 340B Program. APhA solicited pharmacist member feedback and offers the following general concerns regarding the four areas identified by HRSA in the RFI. Regarding administrative and operational burdens, members expressed significant uncertainty about the infrastructure needed to submit, track, and reconcile rebate claims under any pilot program. Many covered entity pharmacies, particularly those in safety-net settings, currently lack the billing systems and administrative capacity to manage a claims-based rebate process. The prospect of new data-submission requirements, denial tracking, and appeals processes raises concerns about whether adequate resources will be available and whether all covered entities can update their current systems before implementation. Accordingly, APhA encourages HRSA to ensure that any pilot program includes meaningful financial and technical assistance to hospital and health system pharmacies, standardized submission formats, and clear timelines to minimize administrative burden and disruptions in patient care. With respect to reliance interests, the 340B Program has functioned as an upfront discount model for over 30 years, and our members noted that pharmacists and covered entities have organized their purchasing, contracting, and service delivery around the expectation of receiving 340B prices at the point of sale. As such, APhA asks HRSA to carefully consider how a transition to a rebate model would affect covered entities that have made long-term operational and financial commitments based on this existing structure. As APhA stressed in our previous comments, a top concern for our members is the financial strain the upfront costs of this transition would place on many covered entities. Members working with specialty and infusion medications, which often involve dispensing high-cost drugs, have raised concerns about the financial impact of purchasing drugs at full acquisition 2 Id. at 7289. Available at: https://www.federalregister.gov/d/2026-03042/p-18. 3 cost and then having to wait for rebate reimbursement. Accordingly, APhA encourages HRSA to assess the real-world financial implications for covered entities that may not have the means to bridge that gap. Regarding potential alternatives and safeguards, APhA encourages HRSA to consider whether narrowly scoped alternatives that do not impose the same financial, administrative, and technological burdens on covered entities would be sufficient to enable them to meet their goals. HRSA also requests more information on targeted areas; APhA provides additional comments from our members on those areas below. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program (FR 7289) i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring). APhA members identified several categories of additional costs that a potential rebate model would impose, as listed below. Legal review costs (review of both initial rebate program terms and subsequent plan terms) Staff training on new claims submission workflows, denial management, and reconciliation processes (retraining of current staff and training of each new team member) System and software upgrades or replacements to support a rebate-based claims model (one-time costs of upgrades and recurring costs associated with ongoing maintenance and updates) Consulting and compliance costs related to eligibility determinations, data integrity obligations, and audits (initial and recurring costs) Opportunity costs of providing other services, programs, or initiatives, given that liquid assets are tied up in fronting the costs of the medications (initial and recurring costs) ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). APhA members noted that covered entities in rural areas and those affiliated with Federally Qualified Health Centers (FQHCs), Ryan White clinics, and other safety-net 4 providers will have the greatest difficulty participating in a potential 340B Rebate Model Pilot Program. This concern stems from a lack of financial resources to cover the full cost of the drugs while waiting for rebate reimbursement, and from the need for compliance and billing teams to manage the new requirements. These particular entities often serve disproportionally high shares of low-income, uninsured, and chronically ill patients, causing them to depend heavily on the 340B savings to cover costs of the services they provide. As such, APhA encourages HRSA to consider these settings in designing any potential pilot program. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. APhA members expressed significant concerns about the potential impact of a rebate model on patient access to medications. Members noted that the 340B Program allows their organization to subsidize clinical pharmacy services, medication adherence programs, and care coordination, which could be discontinued or interrupted following the switch to a rebate model. Additionally, some members working with high-cost specialty medications expressed concern that their organizations may reduce their specialty drug formularies or discontinue stocking certain high-cost 340B-eligible drugs due to the high carrying costs, thereby decreasing patient access to these medications. APhA recommends that HRSA assess patient access impacts as a primary metric in evaluating any potential pilot program. Payment Timing and Potential Cash Flow Impacts for Covered Entities (FR 7289) a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. As mentioned above, the timing of payments under a potential rebate model would pose significant cash-flow challenges for many covered entities, even with a 10-calendar-day reimbursement window. By requiring payment at the time of purchase rather than using an upfront discount model, covered entities will need to draw on significant working capital to fund orders and keep products on shelves to meet patient demand. This diversion of funds will cause covered entities to reconsider how they stock certain high- cost medications and how they will fund certain services now that this cash is tied up in inventory. Members have shared that this change could affect patient access to medications and lead to the elimination of services or positions within their health systems. Similarly, CMS, as part of the Medicare Drug Price Negotiation Program, required manufacturers to pay refunds to pharmacies within 14 days of receiving the associated data from the Medicare Transaction Facilitator, which, operationally, takes 22 5 days on average for pharmacies to receive reimbursements.3 As such, APhA raises this concern with HRSA, noting that even mandating a 10-business-day payment can still result in covered entities waiting more than two weeks for payment. Rebate Denials (FR 7290) a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. As noted above, pharmacist members are worried about the administrative and operational burdens associated with the potential 340B Rebate Model Pilot Program. One of the burdens consistently mentioned by pharmacist members was reconciling rebate denials, along with the costs and staff time associated with the appeals process that follows. Accordingly, more specific guardrails could be built into the pilot program to ensure that any denials are appropriate, and covered entities are not expending resources, including the time of pharmacists and pharmacy technicians, disputing claims. APhA appreciates the opportunity to relay pharmacists concerns from across the nation to HRSA. If you have any questions or would like to meet with APhA and our pharmacist members to discuss the concerns raised in this letter, please contact Corey Whetzel, APhAs Senior Manager, Regulatory Affairs, at cwhetzel@aphanet.org. Sincerely, Michael Baxter Vice President, Government Affairs 3 NCPA Shares Survey Results with CMS Showing MFP Refund Delays, NCPA (Feb. 27, 2026). Available at: https://ncpa.org/newsroom/qam/2026/02/27/ncpa-shares-survey-results-cms-showing-mfp-refund- delays.
HRSA-2026-0001-1798Thundermist Health Center (FQHC)2026-04-20T04:00Z89,119 chars
To Whom It May Concern, Thundermist appreciates HRSAs commitment to improving the 340B Program and addressing longstanding challenges related to duplicate discounts. However, it is critical that any rebate-based approach does not erode the programs effectiveness or impose unsustainable burdens on covered entities. I urge HRSA to carefully consider operational realities and patient impact as it evaluates the Rebate Pilot Program Model. Thank you for the opportunity to provide comments and for your continued stewardship of the 340B Drug Pricing Program. Please see attached Thundermist Health Center Comments. Thank you, Thundermist Health Center April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Thundermist Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Thundermist Health Center anticipates an estimated 10% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and potential rebate denials. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Thundermist Health Center is a federally qualified community health center based in Rhode Island that provides full-service primary care, as well as dental and behavioral health services. Founded in 1969, today Thundermist serves 1 in 17 Rhode Islanders, more than 65,600 unique individuals in 2025 in three communities across the state. Thundermists mission is to improve the health of patients and communities by delivering exceptional healthcare, removing barriers to that care, and advancing healthy lifestyles. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Thundermist in particular, this means it will impact: In calendar year (CY) 2025, our contract pharmacy network processed 224,540 340B eligible prescription claims for more than 34,000 unique patients, representing over 50% of the unique patients served statewide by our health center. Contract pharmacies are therefore a critical component of medication access for a substantial portion of our patient population. In CY 2025, total 340B program administrative costs, including thirdparty administrator (TPA) services, referral management, compliance oversight, and consulting support totaled $2,991,805. Given the size and complexity of our contract pharmacy operations, a shift from upfront 340B discounts to a rebate-based model would significantly increase administrative expenses, workload and manual reconciliation demands, placing additional strain on staffing and financial resources. Thundermist utilizes 340B program savings to support and sustain patient care operations. Specifically, 340B revenue is used to subsidize operational losses resulting from underpayments on medical claims across commercial, Medicaid, and Medicare programs. These underpayments would otherwise negatively impact Thundermists ability to provide comprehensive services to our patient population. In addition, 340B revenue is reinvested into critical infrastructure needs, including facility improvements and health information technology upgrades that enhance care delivery, efficiency, and compliance. The program also supports workforce development initiatives, including funding for our Family Nurse Practitioner (FNP) Fellowship Program, which helps recruit, train, and retain qualified providers committed to serving underserved communities. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other 3 medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 The addition of a rebate model would further compound existing manufacturer restrictions, particularly those imposed by Bristol Myers Squibb on Eliquis, creating additional barriers to access. In practice, these cumulative restrictions have left Xarelto as the only consistent 340B price affordable option for many of our patients. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full wholesale acquisition cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Thundermist provides $3,364,338 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Thundermist anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Thundermist anticipates an estimated increase of $50,000 to costs for external support vendors, which can increase as the rebate model goes into effect and learn more about our needs. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, and reconciliation services. Workforce Impact Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Thundermist will need 1 additional FTE to oversee submission of claims to the Beacon platform, track rebate payments, and manage financial reconciliation with our TPA vendors. This role would also be responsible for addressing claim denials, which may take an unknown amount of time to resolve, while our health center assumes financial risk by fronting the wholesale acquisition cost (WAC) of the drug during the denial appeal period. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Our approximate annual upfront drug spend is $2.1 million and could exceed this amount annually depending on utilization, rebate timing, and claim resolution. This estimate does not include the cost of an additional FTE, which is projected to be $80,000 to $100,000 annually. These figures 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 also do not account for denial rates and associated delays, which could further increase financial exposure and strain already limited margins. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Thundermist anticipates approximately 5,000 annual claims, which is expected to increase as we continue to serve new members of our community each year. On a monthly basis, we would submit more than 400 claims, requiring over 100 hours of staff time to manage. Even with TPA automation options, Thundermist must ensure daily accuracy of data feeds, in addition to tracking rebates, denials, and reconciliations. We will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Thundermist urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Thundermist currently partners with 110 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 81 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in our Woonsocket, West Warwick, and South County communities with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, 11 Internal NACHC survey data 8 will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Thundermist provides drug discounts through contract pharmacy arrangements for patients who are underinsured or uninsured. We have the ability to pass the 340B price directly to our patients, including offering medications at zero cost to those who would otherwise be unable to afford these essential treatments. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,325,300 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $267,221 to purchase these same drugs at the 340B ceiling price. This represents a 770% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, Thundermist is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Thundermist anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Shower to Empower, which provides critical hygiene and support services to our Woonsocket patients in partnership with a community organization. We would also face reductions to our Mobile Medical Unit, which serves all three of our communities. This unit allows individuals to simply walk onboard and gain immediate access to our care teams and a wide range of services, including basic medical checkups and health screenings, behavioral health services, assistance with insurance enrollment, referrals to specialty and community resources, and more. Operating Hours: We may be required to reduce weekend clinic hours for our convenient care services, which provide access to treatment for colds, allergies, sinus infections, and other minor conditions. These services are available to the broader community, and patients do not need to be Thundermist patients to receive care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we could lose the ability to fund a community health worker or social services case manager, directly affecting our patients ability to access critical services such as insurance enrollment, care coordination, and connections to community-based resources. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 8,246 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Thundermist asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 11 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Thundermist estimates its 2026 Annual Rebate Opportunity Cost to be approximately $209,471. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Thundermist estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,058,088, with projected increases to $8,876,598 in 2027 and $10,692,319 in 2028 as additional MFP drugs are introduced. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where many patients have no choice but to rely on Thundermist Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Thundermist urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $209,471. This is a sum Thundermist cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operates under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion 14 Thundermist Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Thundermist believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Thundermist appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have questions, please contact Elaine Warburg at ElaineW@thundermisthealth.org. Sincerely, Chuck Jones President and CEO Thundermist Health Center April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Thundermist Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Thundermist Health Center anticipates an estimated 10% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and potential rebate denials. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Thundermist Health Center is a federally qualified community health center based in Rhode Island that provides full-service primary care, as well as dental and behavioral health services. Founded in 1969, today Thundermist serves 1 in 17 Rhode Islanders, more than 65,600 unique individuals in 2025 in three communities across the state. Thundermists mission is to improve the health of patients and communities by delivering exceptional healthcare, removing barriers to that care, and advancing healthy lifestyles. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Thundermist in particular, this means it will impact: In calendar year (CY) 2025, our contract pharmacy network processed 224,540 340B eligible prescription claims for more than 34,000 unique patients, representing over 50% of the unique patients served statewide by our health center. Contract pharmacies are therefore a critical component of medication access for a substantial portion of our patient population. In CY 2025, total 340B program administrative costs, including thirdparty administrator (TPA) services, referral management, compliance oversight, and consulting support totaled $2,991,805. Given the size and complexity of our contract pharmacy operations, a shift from upfront 340B discounts to a rebate-based model would significantly increase administrative expenses, workload and manual reconciliation demands, placing additional strain on staffing and financial resources. Thundermist utilizes 340B program savings to support and sustain patient care operations. Specifically, 340B revenue is used to subsidize operational losses resulting from underpayments on medical claims across commercial, Medicaid, and Medicare programs. These underpayments would otherwise negatively impact Thundermists ability to provide comprehensive services to our patient population. In addition, 340B revenue is reinvested into critical infrastructure needs, including facility improvements and health information technology upgrades that enhance care delivery, efficiency, and compliance. The program also supports workforce development initiatives, including funding for our Family Nurse Practitioner (FNP) Fellowship Program, which helps recruit, train, and retain qualified providers committed to serving underserved communities. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. The addition of a rebate model would further compound existing manufacturer restrictions, particularly those imposed by Bristol Myers Squibb on Eliquis, creating additional barriers to access. In practice, these cumulative restrictions have left Xarelto as the only consistent 340B price affordable option for many of our patients. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full wholesale acquisition cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Thundermist provides $3,364,338 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Thundermist anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Thundermist anticipates an estimated increase of $50,000 to costs for external support vendors, which can increase as the rebate model goes into effect and learn more about our needs. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, and reconciliation services. Workforce Impact Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Thundermist will need 1 additional FTE to oversee submission of claims to the Beacon platform, track rebate payments, and manage financial reconciliation with our TPA vendors. This role would also be responsible for addressing claim denials, which may take an unknown amount of time to resolve, while our health center assumes financial risk by fronting the wholesale acquisition cost (WAC) of the drug during the denial appeal period. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Our approximate annual upfront drug spend is $2.1 million and could exceed this amount annually depending on utilization, rebate timing, and claim resolution. This estimate does not include the cost of an additional FTE, which is projected to be $80,000 to $100,000 annually. These figures also do not account for denial rates and associated delays, which could further increase financial exposure and strain already limited margins. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Thundermist anticipates approximately 5,000 annual claims, which is expected to increase as we continue to serve new members of our community each year. On a monthly basis, we would submit more than 400 claims, requiring over 100 hours of staff time to manage. Even with TPA automation options, Thundermist must ensure daily accuracy of data feeds, in addition to tracking rebates, denials, and reconciliations. We will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Thundermist urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Thundermist currently partners with 110 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 81 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in our Woonsocket, West Warwick, and South County communities with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Thundermist provides drug discounts through contract pharmacy arrangements for patients who are underinsured or uninsured. We have the ability to pass the 340B price directly to our patients, including offering medications at zero cost to those who would otherwise be unable to afford these essential treatments. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,325,300 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $267,221 to purchase these same drugs at the 340B ceiling price. This represents a 770% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, Thundermist is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Thundermist anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Shower to Empower, which provides critical hygiene and support services to our Woonsocket patients in partnership with a community organization. We would also face reductions to our Mobile Medical Unit, which serves all three of our communities. This unit allows individuals to simply walk onboard and gain immediate access to our care teams and a wide range of services, including basic medical checkups and health screenings, behavioral health services, assistance with insurance enrollment, referrals to specialty and community resources, and more. Operating Hours: We may be required to reduce weekend clinic hours for our convenient care services, which provide access to treatment for colds, allergies, sinus infections, and other minor conditions. These services are available to the broader community, and patients do not need to be Thundermist patients to receive care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we could lose the ability to fund a community health worker or social services case manager, directly affecting our patients ability to access critical services such as insurance enrollment, care coordination, and connections to community-based resources. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 8,246 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Thundermist asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Thundermist estimates its 2026 Annual Rebate Opportunity Cost to be approximately $209,471. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Thundermist estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,058,088, with projected increases to $8,876,598 in 2027 and $10,692,319 in 2028 as additional MFP drugs are introduced. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where many patients have no choice but to rely on Thundermist Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Thundermist urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $209,471. This is a sum Thundermist cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operates under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Thundermist Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Thundermist believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Thundermist appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have questions, please contact Elaine Warburg at ElaineW@thundermisthealth.org. Sincerely, Chuck Jones President and CEO Thundermist Health Center
HRSA-2026-0001-1799Oaklawn Hospital2026-04-20T04:00Z38,174 chars
See attached file(s) 200 North Madison Marshall, MI 49068 (269) 781-4271 oaklawnhospital.org Real People. Real Care. April 17, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for lnformation ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by Oaklawn Hospital ("Oaklawn Hospital"), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are irnportant for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Oaklawn Hospital and other Covered Entities. As a 340B-participating DSH hospital, Oaklawn Hospital is a core component of the healthcare safety net in the Marshall and surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Oaklawn Hospital participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Oaklawn Hospital's 340B Program participation enables us to commit an additional $3.4 million dollars per year to the safety net population we serve based on fiscal year 2026. Ultimately, by increasing costs and likely facilitating manufacturer application of self- serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Oaklawn Hospital wishes to make clear that we support data transparency \\!..INVG11 April 17, 2026 Page 2 strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of "consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,"1 Oaklawn Hospital submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH OAKLAWN HOSPITAL'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.' More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) ifthey fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Oaklawn Hospital and other Covered Entities. I 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). lnflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id at 136 Stat. 1850 (codified at 42 U.S C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(8)(vi). April 17, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval,5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,' it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Oaklawn Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR OAKLAWN HOSPITAL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Oaklawn Hospital. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by 47% in the past 4 fiscal years, directly limiting the extent to which we can support our community. Yet, somehow, this isn't enough for the manufacturers or, apparently, HI-IS and HRSA OPA. Oaklawn Hospital has concerns of a H1PAA violation where each unauthorized or noncompliant transmission of patient data may be treated as a separate violation. Oaklawn Hospital may face risks including De-identification misrepresentation, unfavorable Terms of Use, and inadequate Business Associate Agreement (BAA) to name a few. Additional regulatory exposure may arise under federal and state privacy laws governing sensitive information, such as behavioral health or substance abuse disorder, which require explicit patient consent. Cybersecurity coverage is also a concern that could jeopardize insurance coverage if a breach occurs. As a result of manufacturers demanding that we disclose patients' protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs, we no longer have access to the 340B ceiling price at the contract pharmacy level as Oaklawn Hospital refuses to take the risks of submitting data. Due to this loss, this has led to the closure of several service lines in the past three years. $ 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet. Aledicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability }ear 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for lnitial Price Applicability )ear 2021). Whitman v. Am. Trucking Ass 'ns, 531 U.S. 457 (2001). April 17, 2026 Page 4 Finally, a "float" often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturer's drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the "float," requiring it not just for Part D beneficiaries, but all of Oaklawn Hospital's purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Oaklawn Hospital trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO OAKLAWN HOSPITAL TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. in particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Oaklawn Hospital would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of Oaklawn Hospital's contract pharmacy locations, it should be required to ship its products to all ofthose contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 8 42 U.S.C. 256b(a)( I). April 17, 2026 Page 5 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Oaklawn Hospital has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Oaklawn Hospital's interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS OAKLAWN HOSPITAL TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Oaklawn Hospital," but this activity may bring them under the definition of a "health plan" under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. ln addition, if manufacturers continue to evade the "HIPAA Oaklawn Hospital" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE OAKLAWN HOSPITAL'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF OAKLAWN HOSPITAL? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE See 45 C.F.R. 160.103. April 17, 2026 Page 6 PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE OAKLAWN HOSPITAL FOR THE VALUE OF ITS DATA? One of Oaklawn Hospital's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual Iicense allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.1D Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers frorn demanding data, the statute also does not require HRSA to support these efforts. I f a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Oaklawn Hospital for that value? Isn't this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? Oaklawn Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Oaklawn Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's April 17, 2026 Page 7 administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Oaklawn Hospital's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Oaklawn Hospital's patient population, we serve many other patients, including patients with no coverage at all. Requiring Oaklawn Hospital to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10.WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11.WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO OAKLAWN HOSPITAL? IF NOT, WHY NOT? As noted above, Oaklawn Hospital firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. April 17, 2026 Page 8 Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Oaklawn Hospital urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON OAKLAWN HOSPITAL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Oaklawn Hospital to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates." Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Oaklawn Hospital has not engaged in efforts to negotiate reasonable terms and conditions with Second Sight as submitting data imposes risk considerations. Oaklawn Hospital has taken the position that data will not be submitted in light of these risks. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terrns unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. See 45 C.F.R. 164.501. April 17, 2026 Page 9 13.WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% ofaudits done in 2023.12 With manufacturers' noncompliance rate so high, Oaklawn Hospital is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14.WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Oaklawn Hospital hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,:3 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Oaklawn Hospital encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https:;,www.hrsa.goviopalprogram-integrity. 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 17, 2026 Page 10 RESPONSES TO HRSA' s REQUEST FOR INFORMATION I. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and comptiance workflows. Oaklawn Hospital maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Oaklawn Hospital would have additional costs to use the TPA's newly developed platform to manage the operations of a rebate model if we were to submit data. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Oaklawn Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. This would result in increased costs associated with the additional software system, as well as the need for at least one additional FTE to manage the rebate-based model. April 17, 2026 Page 11 d Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. The implementation of changes required to accommodate the rebate model would impose a significant financial burden. Specifically, it would increase our annual costs with the addition of at least one FTE, expanded software capabilities, and other associated implementation expenses for which no budgeted funds are currently available. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Oaklawn Hospital purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Under a rebate model, Oaklawn Hospital would have to pay the full, higher drug price upfront at the time of purchase and then wait weeks or even months to get reimbursed through a rebate. This creates several real financial problems: Losing Prompt Pay Discounts: Right now, Oaklawn gets a small discount from drug suppliers for paying bills on time. Because we are already paying a lower 340B price, those discounts make sense for both sides. Under a rebate model, we would be paying the full high price upfront, which changes that relationship and could mean losing those discounts altogether. Paying More While We Wait: When we pay full price at purchase but don't get our rebate back for 30, 60, or 90 days, that money is essentially tied up and unavailable to us. In today's environment, that has a real cost money sitting idle waiting for a rebate check cannot be used to pay staff, care for patients, or cover everyday hospital expenses. For a busy hospital, that gap could add up to hundreds of thousands of dollars a year. Other Concerns: Tracking and managing rebates also takes significant stafftime and resources. There are no guarantee rebates will be paid on time or in full, which makes budgeting harder and less predictable. Hospitals with tighter budgets would feel this strain the most. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Oaklawn Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. Oaklawn Hospital is in April 17, 2026 Page 12 a rural setting, so the overall number of scripts is less than that of covered entities Iocated in an urban setting. There are several factors that could play a key role in medications decrease of use after purchase. The provider could change the medication due to ineffectiveness before the next fill. The patient could develop an allergic reaction and would no longer be taking the medication. The patient may have received a three-month supply, and the provider changed the medication before the next fill, or the patient deceased. The purchased medication may not get used again for some time depending on the number of patients on that medication. Thus, having medications on the shelves for long periods oftime before realizing the 340B rebate. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Oaklawn Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Oaklawn Hospital would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Oaklawn Hospital's operational systems. For exarnple, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Oaklawn Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, April 17, 2026 Page 13 take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care. our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Andrew J. Poole III Chief Financial Officer April 17, 2026 Page 14 APPENDIX: SUMMARY OF HRSA's AUDITS OF DRUG MANUFACTURERS HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 4 2020 2021 4 le Clean Audits 2022 Audits with Findings 2023 2024 2025 4 2026 FINDING: FAILED TO OFFER 340B PRICE 2018 2019 2020 2021 Manufacturer Did Not Fail to Offer 340B Price 2022 Manufacturer Failed to Offer 340B 2023 I Price 2024 2025 2026 =MEM April 17, 2026 Page 15 FINDING: OVERCHARGED COVERED ENTITIES 2018 2019 2020 2021 2022 2023 2024 2025 2026 Manufacturer Did Not Overcharge Covered Entities e Manufacturer Overcharged Covered Entities L 2 FINDING: FAILED TO SUBMIT PRICING DATA 2018 2019 2020 2021 2022 2023 2024 2025 2026 3 Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data 1 April 17, 2026 Page 16 FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 R Manufacturer Determined Ceiling Price for New Drugs 2022 1 Manufacturer Failed to Determine 2023 340B Uiling Pri,.L. for New Drugs 2024 2 2025 2026 2
HRSA-2026-0001-1800Community Health Center Association of CT (CHC/ACT)2026-04-20T04:00Z20,628 chars
See attached file(s) April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the seventeen Community Health Centers (CHCs) and the 452,000 patients served, the Community Health Center Association of Connecticut (CHC/ACT) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC- specific data in response to questions raised in the RFI. Summary of Recommendations In short, CHC/ACT strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments In these comments, CHC/ACT explains: A. The importance of 340B savings to Connecticut CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 67,800 uninsured patients and 312,000 patients living below the poverty line. 1484 Highland Avenue / Suite 2 Cheshire, Connecticut / 06410 www.chcact.org B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on covered entities and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level (FPL), 18% of whom were uninsured, and millions more who were underinsured. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. In Connecticut, in 2024, they served 452,000 patients, 91.6% of whom had incomes below 200% of FPL, 15% of whom were uninsured, and thousands more underinsured. 340B savings are essential to CHCs financial stability and to their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law and regulation, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Connecticut, CHCs routinely rely on 340B savings to support services such as transportation, language access, care coordination, and school-based health programs. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Connecticut CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial strategies to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Connecticut has not implemented a law protecting CHCs from pharmaceutical company restrictions on the use of contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation-adjustment to their base grants in over a decade. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B covered entities, and therefore we strongly urge HRSA not to impose a mandatory rebate model at all. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B. All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience. As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1) For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: a) Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. b) For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2) Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a) Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and b) Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3) Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4) Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5) Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a) Unnecessary to implement the pilot: Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. b) Not always available to the covered entity: For example, Walgreens a major contact pharmacy for CHCs in Connecticut does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6) Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at sfrick@chcact.org. Sincerely, Shawn K. Frick Chief Executive Officer Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer: 1) Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) 2) IT upgrades needed to comply with the new reporting requirements. 3) Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. 4) Interest paid on loans (from wholesaler or other creditors.) 5) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1801Lamoille Health Partners2026-04-20T04:00Z64,403 chars
See attached file March 31, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Lamoille Health Partners, Inc. (LHP), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to LHPs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers, like ours, directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We respectfully request that HRSA except health centers from the proposed rebate model. Alternatively, HRSA could require a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a fraction of the cost and administrative burden of a rebate model. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity- owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 Executive Summary: We strongly urge HRSA to exempt CHCs, like ours, from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients for the following reasons: This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. The proposed 340B Rebate Model Pilot Program is not only a financial threat to us, but also a duplicative and unnecessary administrative burden. CHCs, like ours, will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. The proposed 340B Rebate Model Pilot would directly impact our ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Our pharmacies, entity-owned and contract, will not have access to the 340B price when the patient needs medication. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. We respectfully request that if a rebate pilot is implemented: Manufacturers should be required to pay rebates within 10 days of both initial and corrected determinations. HRSA should explicitly exclude Clinic-administered drugs from any 340B rebate model pilot. HRSA should require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled organizations like ours to purchase outpatient medications at significantly reduced prices, enabling us to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs, like ours. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Lamoille Health Partners, Inc. in particular, this means it will impact: 4,771 Transactions/ 3,500 Patients. Current Overhead cost is 1,200,000. 3 We currently use our 340B program to give our patients access to more affordable pricing for their prescriptions as well as helping the organization provide additional services for the patients and community we serve. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that LHP serves. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning LHP patients will be disproportionately affected. CHCs, like ours, serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause LHP patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs, like ours, seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs, like ours, from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to LHP, but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Workforce Impact Below is specific data on the administrative costs that LHP anticipates, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Around 30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Lamoille Health Partners, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 3,500 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $600,000 annually. The In-House Pharmacy: The Burden of IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 10 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 10 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative challenges. In our region, this would leave patients in Lamoille County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. LHP will have to wait to receive their rebate payment after providing medications to their patients. This change will force LHP to make difficult decisions about how to allocate our limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact LHPs ability to offer patients steeply discounted medications at the point of sale by requiring us to purchase at full WAC pricing upfront. LHPs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on LHPs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about LHPs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with our mission to deliver premier, whole-person health care to our communities, LHP offers flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. LHP is particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 9 V. Existing CHC Compliance Actions CHCs, like ours, already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, we utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. LHP also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. LHP participates in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to LHP and the patients we serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse Instead of a rebate program, we recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that 10 HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Lamoille Health Partners, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program to allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Lamoille Health Partners, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Lamoille Health Partners, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lance Broy, MD/CEO at lbroy@lamoillehealthpartners.org. Sincerely, Lance Broy, MD/CEO Lamoille Health Partners, Inc. March 31, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Lamoille Health Partners, Inc. (LHP), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to LHPs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers, like ours, directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We respectfully request that HRSA except health centers from the proposed rebate model. Alternatively, HRSA could require a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a fraction of the cost and administrative burden of a rebate model. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Executive Summary: We strongly urge HRSA to exempt CHCs, like ours, from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients for the following reasons: This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. The proposed 340B Rebate Model Pilot Program is not only a financial threat to us, but also a duplicative and unnecessary administrative burden. CHCs, like ours, will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. The proposed 340B Rebate Model Pilot would directly impact our ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Our pharmacies, entity-owned and contract, will not have access to the 340B price when the patient needs medication. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. We respectfully request that if a rebate pilot is implemented: Manufacturers should be required to pay rebates within 10 days of both initial and corrected determinations. HRSA should explicitly exclude Clinic-administered drugs from any 340B rebate model pilot. HRSA should require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled organizations like ours to purchase outpatient medications at significantly reduced prices, enabling us to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs, like ours. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Lamoille Health Partners, Inc. in particular, this means it will impact: 4,771 Transactions/ 3,500 Patients. Current Overhead cost is 1,200,000. We currently use our 340B program to give our patients access to more affordable pricing for their prescriptions as well as helping the organization provide additional services for the patients and community we serve. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that LHP serves. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning LHP patients will be disproportionately affected. CHCs, like ours, serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause LHP patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs, like ours, seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs, like ours, from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to LHP, but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Workforce Impact Below is specific data on the administrative costs that LHP anticipates, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Around 30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Lamoille Health Partners, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 3,500 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $600,000 annually. The In-House Pharmacy: The Burden of IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 10 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 10 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative challenges. In our region, this would leave patients in Lamoille County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. LHP will have to wait to receive their rebate payment after providing medications to their patients. This change will force LHP to make difficult decisions about how to allocate our limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact LHPs ability to offer patients steeply discounted medications at the point of sale by requiring us to purchase at full WAC pricing upfront. LHPs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on LHPs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about LHPs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with our mission to deliver premier, whole-person health care to our communities, LHP offers flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. LHP is particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs, like ours, already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, we utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. LHP also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. LHP participates in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to LHP and the patients we serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse Instead of a rebate program, we recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Lamoille Health Partners, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Lamoille Health Partners, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Lamoille Health Partners, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lance Broy, MD/CEO at lbroy@lamoillehealthpartners.org. Sincerely, Lance Broy, MD/CEO Lamoille Health Partners, Inc.
HRSA-2026-0001-1802CHI St. Joseph's Health2026-04-20T04:00Z5,977 chars
See attached file(s) 11 11 CHI St. Joseph's 600 Pleasant Avenue South P 218,732.3311 Health Park Rapids, MN 56470 F 218.732.1368 www.chisjh.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Joseph's Health, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St. Joseph's Health that far outweighs any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Joseph's Health relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Apr 20, 2026 ComrnonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, c -iatspci Ben Koppelman President CHI St. Joseph's Health Park Rapids, MN Apr 20,2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 + CommonSpirit ' As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1803Siouxland Community Health Center2026-04-20T04:00Z90,051 chars
See attached file(s) April 19, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Siouxland Community Health Center (SCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 1992, it has been SCHCs mission to improve the health of the communities we serve by providing access to high-quality health and wellness services. Last year we had the honor of serving 34,745 patients across a total of 126,491 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an integral part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs across the nation are facing staggering challenges: Financial Losses: Nationwide, CHCs report an average loss of $10,800.00 from entity-owned pharmacy operations and a 21% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SCHC in particular, this means it will: Impact the 227,964 340B transactions we process annually, which bolster the services we provide for our 34,745 patients. Raise our current 340B administrative compliance costs from $477,655 to $612,155 for the first year of compliancean increase of $134,500 at a time when we are facing increasing financial pressure to maintain operational viability. Increase our annual labor, operational fees, IT costs, and other carrying costs by an estimated at $330,146 by 2028. Reduce the 340B savings we use to lower the cost of medications and other healthcare services to low-income patients. Currently, this bridge support prevents our 6,254 uninsured patients from rationing their insulin or heart medication.. o 45% of the net revenue generated from our 340B pharmacy goes to lower drug costs for these at-risk patients. o The remainder supports essential programs that are not otherwise funded by the healthcare financial system but reduce the total cost of care to CMS and improve quality (e.g., behavioral health case managers, interpreters, quality improvement specialists, patient transportation, patient education, and other critical infrastructure). For these reasons, SCHC strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at- risk patients. II. Patient Impact We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. It poses a direct and serious threat to medication access for these patients that CHCs serve. For uninsured and underinsured patients 3 who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are key to managing chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. At SCHC, 45% of the net revenue generated from our 340B pharmacy goes to lower drug costs for these at-risk patients. The rest goes to services that support the underserved population that are not otherwise funded through the current healthcare financial system. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations and, ultimately, higher cost of care for CMS. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Example: "Janelle," an uninsured patient with chronic disease, relies on SCHCs 340B program to receive her essential medications for under $30 a month. Without this, the cost would be hundreds of dollars, forcing her to choose between medication, a place to live, and food. If the rebate model causes the health center to lose the funding that supports her $30 medication, Janelle: could face high, unmanageable costs, leading to medication non- adherence and hospitalizationcosting much more in the long run with ER visits and even hospitalization. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SCHC provided $6,087,481 in sliding fee discounts, to 7,285 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SCHC anticipates needing to hire two additional staff to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given the increased complexity, SCHC anticipates an increase of $125,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As noted above, SCHC anticipates needing to hire two part time staff at a total $60,000 a year to assist in rebate claims and auditing our program. 7 Internal NACHC assessment (99 responses). 6 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At SCHC we estimate the need to hire additional pharmacy and accounting staff at an annual cost of $60,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. At SCHC we estimate that 10 to 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. SCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: At SCHC, we anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $39,500 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $70,000 in 2026 and could increase to $223,451 by 2028. Total Cost: For SCHC, which serves 34,745 patients, the total projected increase in expensesincluding labor, Operational Fees, IT, and carrying costsis estimated at $330,146 annually by 2028. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 8 Ibid. 7 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. At SCHC, initial inquiries to our software vendor for automated data transfer to support the rebate model were denied, leaving us with manual submission by pharmacy staff. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. SCHC estimates upfront cost for integration would exceed $25,000. Ongoing Resource Diversion: SCHC staff who currently manage clinical pharmacy services will be forced to spend 2-5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. SCHC currently partners with 27 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per- claim fees. Verification Latency: The rebate model creates a reconciliation gap. SCHC staff must monitor claims across 29 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, SCHC fears its contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In SCHCs service area, this risks leaving patients in our three-county region with little or no affordable medication options. Over 19 percent of the Iowa population lives in a pharmacy desert,9and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because 9 Cencora, Insight into U.S. pharmacy deserts (2024) 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the 9 project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At SCHC we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. In 2025, 45% of 340B savings went back to the patient in the form of discounts on their prescription medications. 16% helped fund behavioral health services and 13% funded our interpreters. The remaining savings funded case managers, quality improvement, patient transportation, patient education and infrastructure. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicating this, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on SCHCs data, we estimate it would cost $3,493,901 to purchase the 10 drugs piloted under the proposed rebate model. Currently, our organization spends $111,102 to purchase these same drugs at the 340B ceiling price. This represents a 3,044% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, SCHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SCHC anticipates needing to reduce: 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Essential Clinical Services: To offset the upfront cost of drugs, SCHC would be forced to scale back non-revenue-generating but essential services, including interpreters and diabetic educators. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For example, for every Rebate Coordinator we are forced to hire, we lose the ability to fund a HIV case manager that provides essential services and helps ensure that patients receive vital medications that suppress viral load and decrease the chances of transmitting a life changing disease in the community. Patient Financial Assistance: SCHCs ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,254 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. SCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $222,964. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: SCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $281,899. 12 Every dollar SCHC pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, SCHC lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves to fund the upfront cost of prescription medications, funds that are currently dedicated to employing clinical pharmacists, diabetes education and behavioral health. Forcing SCHC into this position to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SCHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications upon which our patients depend. Financial Impact of Rebate Denials and Delays SCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given SCHCs current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $169,139 This is a sum SCHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect SCHCs ability to fulfill its mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 14 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. An Alternative Solution: A National and Neutral Claims Clearinghouse In place of the rebate model, we recommend OPA use a neutral claims clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. Conclusion SCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that a neutral claims clearinghouse be put in place in lieu of the rebate model. If neither of those are acceptable, we then request that 15 HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would be required to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Chris Keller at ckeller@slandchc.com. Sincerely, Mark Donaldson Chris Keller CEO Chief Pharmacy Officer Siouxland Community Health Center Siouxland Community Health Center April 19, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Siouxland Community Health Center (SCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 1992, it has been SCHCs mission to improve the health of the communities we serve by providing access to high-quality health and wellness services. Last year we had the honor of serving 34,745 patients across a total of 126,491 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an integral part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs across the nation are facing staggering challenges: Financial Losses: Nationwide, CHCs report an average loss of $10,800.00 from entity-owned pharmacy operations and a 21% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For SCHC in particular, this means it will: Impact the 227,964 340B transactions we process annually, which bolster the services we provide for our 34,745 patients. Raise our current 340B administrative compliance costs from $477,655 to $612,155 for the first year of compliancean increase of $134,500 at a time when we are facing increasing financial pressure to maintain operational viability. Increase our annual labor, operational fees, IT costs, and other carrying costs by an estimated at $330,146 by 2028. Reduce the 340B savings we use to lower the cost of medications and other healthcare services to low-income patients. Currently, this bridge support prevents our 6,254 uninsured patients from rationing their insulin or heart medication.. 45% of the net revenue generated from our 340B pharmacy goes to lower drug costs for these at-risk patients. The remainder supports essential programs that are not otherwise funded by the healthcare financial system but reduce the total cost of care to CMS and improve quality (e.g., behavioral health case managers, interpreters, quality improvement specialists, patient transportation, patient education, and other critical infrastructure). For these reasons, SCHC strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. Patient Impact We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. It poses a direct and serious threat to medication access for these patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are key to managing chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. At SCHC, 45% of the net revenue generated from our 340B pharmacy goes to lower drug costs for these at-risk patients. The rest goes to services that support the underserved population that are not otherwise funded through the current healthcare financial system. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations and, ultimately, higher cost of care for CMS. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Example: "Janelle," an uninsured patient with chronic disease, relies on SCHCs 340B program to receive her essential medications for under $30 a month. Without this, the cost would be hundreds of dollars, forcing her to choose between medication, a place to live, and food. If the rebate model causes the health center to lose the funding that supports her $30 medication, Janelle: could face high, unmanageable costs, leading to medication non-adherence and hospitalizationcosting much more in the long run with ER visits and even hospitalization. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: SCHC provided $6,087,481 in sliding fee discounts, to 7,285 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: SCHC anticipates needing to hire two additional staff to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given the increased complexity, SCHC anticipates an increase of $125,500 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. As noted above, SCHC anticipates needing to hire two part time staff at a total $60,000 a year to assist in rebate claims and auditing our program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At SCHC we estimate the need to hire additional pharmacy and accounting staff at an annual cost of $60,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. At SCHC we estimate that 10 to 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. SCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: At SCHC, we anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $39,500 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $70,000 in 2026 and could increase to $223,451 by 2028. Total Cost: For SCHC, which serves 34,745 patients, the total projected increase in expensesincluding labor, Operational Fees, IT, and carrying costsis estimated at $330,146 annually by 2028. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. At SCHC, initial inquiries to our software vendor for automated data transfer to support the rebate model were denied, leaving us with manual submission by pharmacy staff. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. SCHC estimates upfront cost for integration would exceed $25,000. Ongoing Resource Diversion: SCHC staff who currently manage clinical pharmacy services will be forced to spend 2-5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. SCHC currently partners with 27 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. SCHC staff must monitor claims across 29 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, SCHC fears its contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In SCHCs service area, this risks leaving patients in our three-county region with little or no affordable medication options. Over 19 percent of the Iowa population lives in a pharmacy desert,and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At SCHC we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. In 2025, 45% of 340B savings went back to the patient in the form of discounts on their prescription medications. 16% helped fund behavioral health services and 13% funded our interpreters. The remaining savings funded case managers, quality improvement, patient transportation, patient education and infrastructure. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicating this, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on SCHCs data, we estimate it would cost $3,493,901 to purchase the 10 drugs piloted under the proposed rebate model. Currently, our organization spends $111,102 to purchase these same drugs at the 340B ceiling price. This represents a 3,044% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, SCHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, SCHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, SCHC would be forced to scale back non-revenue-generating but essential services, including interpreters and diabetic educators. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For example, for every Rebate Coordinator we are forced to hire, we lose the ability to fund a HIV case manager that provides essential services and helps ensure that patients receive vital medications that suppress viral load and decrease the chances of transmitting a life changing disease in the community. Patient Financial Assistance: SCHCs ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,254 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. SCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. SCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $222,964. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: SCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $281,899. Every dollar SCHC pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, SCHC lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves to fund the upfront cost of prescription medications, funds that are currently dedicated to employing clinical pharmacists, diabetes education and behavioral health. Forcing SCHC into this position to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on SCHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications upon which our patients depend. Financial Impact of Rebate Denials and Delays SCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given SCHCs current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $169,139 This is a sum SCHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect SCHCs ability to fulfill its mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. An Alternative Solution: A National and Neutral Claims Clearinghouse In place of the rebate model, we recommend OPA use a neutral claims clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion SCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that a neutral claims clearinghouse be put in place in lieu of the rebate model. If neither of those are acceptable, we then request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would be required to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Chris Keller at ckeller@slandchc.com. Sincerely, Mark Donaldson Chris Keller CEO Chief Pharmacy Officer Siouxland Community Health Center Siouxland Community Health Center
HRSA-2026-0001-1804Black, Gifted & Whole Inc.2026-04-20T04:00Z1,594 chars
Black, Gifted & Whole supports HRSAs exploration of a 340B rebate model as a tool to strengthen program integrity, transparency, and patient-centered accountability. A well-designed rebate framework has the potential to modernize the program by creating clearer data pathways that demonstrate whether 340B savings are truly reaching patients, particularly those from historically underserved communities disproportionately impacted by HIV and other chronic conditions. By shifting from upfront discounts to a rebate structure, HRSA can improve oversight and reduce opportunities for program misuse while preserving the core intent of 340B: allowing hospitals and clinics to buy low-cost medicines and, in turn, to improve care for low-income and vulnerable patients. We ask HRSA not to create carve-outs or exemptions from the pilot to achieve more meaningful results. Increased transparency within a rebate model can also help policymakers, providers, and advocates better ensure that the program benefits all patients. For communities like those BGW serves, greater accountability is not just a policy goal; it is a matter of health equity. If implemented thoughtfully, with safeguards to ensure provider participation and timely reimbursement, the rebate model could reinforce trust in the program and ensure that its benefits are more directly and demonstrably felt by patients. BGW encourages HRSA to continue engaging patient-centered organizations in the design and evaluation of this model to ensure it advances equity, access, and the long-term sustainability of the 340B program.
HRSA-2026-0001-1805Prism Health North Texas2026-04-20T04:00Z42,044 chars
See attached file(s) Administration Office | 3900 Junius St, Ste 300, Dallas, TX 75246 | 214.521.5191 | phntx.org April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Thank you for the opportunity to provide comments on behalf of Prism Health North Texas, a Federally Qualified Healthcare Center-Look-Alike in Texas, regarding HRSAs proposal for a 340B Rebate Model Pilot Program. The 340B program is critical to our organization and to 1,400 other health centers across the country in providing low-cost drugs to our patients and stretching our resources to serve our communities better. Since 1986, Prism Health North Texas (PHNTX) has been committed to providing high-quality, compassionate care in Dallas. Originally founded as an HIV treatment and prevention clinic, PHNTX has grown in response to community needsexpanding services to include full primary care, pediatrics, and womens health. Prism Health North Texas appreciates the opportunity to share our estimated burden with HRSA on compliance with the 340B rebate model pilot program. Given the severe administrative, financial, and operational burden a rebate model would place on CHCs, Prism Health North Texas again requests that CHCs be exempted from the pilot program. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PHNTX, this means it will impact: Over 13,871 patients Primary care for low-income and uninsured patients Lab tests Behavioral health Transportation, nutrition assistance, and emergency housing Extensive dental care, such as fillings or caps We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 the affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment shows that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden of this rebate pilot program. Like navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PHNTX provided $2,618,909 in sliding fee discounts, provided through discounted medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PHNTX anticipates needing .25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Currently, our external vendor costs are approximately $24,000/month. Given increased complexity, PHNTX anticipates an increase to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As stated above, PHNTX currently estimates an additional .25 FTE, but the need for more staff would grow as the rebate model expands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At this time, we estimate an additional 10 hours/month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. For example, when Biktarvy is added to the formulary in 2028, we estimate an additional 7,000 claims for this medication alone. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PHNTX urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Given the uncertainty and impulsiveness of this rollout, software systems such as PioneerRx have 7 Internal NACHC assessment (99 responses). 8 Ibid. not invested the time or resources to functionally allow us to track and report this significant change. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with approximately 180 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 180 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the greater Dallas/Fort Worth region with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software catalog of wholesaler prices, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At PHNTX, 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 our pharmacy sliding fee scale, supported by the 340B program, allows our patients greater access to more expensive medications, particularly for patients with immunological disorders or infectious diseases like Hepatitis C and HIV. We believe that everyone deserves access to medications that will have the most effective impact on their individual health. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $300,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $45,000 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PHNTX anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as behavioral health in a primary care setting. Integrating behavioral health services is important for overcoming common stigma around mental illness treatment. Treatments currently include mental health 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip assessments, substance use and recovery support, counseling services, and psychiatric care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund the specialized clinical practitioners that are crucial in serving our historically marginalized and underserved communities. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,900 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PHNTX asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PHNTX estimates its 2027 Annual Rebate Opportunity Cost to be approximately $45,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PHNTX estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $300,000 in 2026, $2million in 2027, and $15 million in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PHNTX, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PHNTX urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with the statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. HRSA must require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PHNTX strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PHNTX believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Prism Health North Texas appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Januari Fox, Director of Policy and Advocacy, at Januari.fox@prismntx.org. Sincerely, John T. Carlo Chief Executive Officer Prism Health North Texas
HRSA-2026-0001-1806Anonymous Anonymous2026-04-20T04:00Z4,548 chars
I strongly oppose implementation of any 340B rebate model for Federally Qualified Health Centers (FQHCs) and Look-a-likes. For health centers, a rebate model is not a minor administrative change. It would shift 340B from an upfront statutory discount to a post-purchase reimbursement process that forces safety net providers to finance drug costs up front, absorb claim adjudication risk, and wait for repayment. That approach is inconsistent with the purpose of 340B, which is to help covered entities stretch scarce federal resources to serve more patients and provide more comprehensive services. FQHCs operate with limited liquidity and often very thin, if not negative, operating margins. They are not structured to carry large increases in working capital tied to pharmacy purchasing. Under the rebate approach previously proposed, covered entities would have to pay full wholesale cost first, then submit documentation that the drug was dispensed to an eligible 340B patient, then wait for manufacturer review, approval, and rebate payment. Under a rebate model, FQHCs would be required to purchase medications at wholesale acquisition cost and wait for manufacturer rebates after dispensing and claims adjudication. For our organization, this would require: Carrying substantial upfront medication costs. Potentially securing a line of credit or loan to finance drug inventory. Absorbing interest expenses while awaiting rebate reconciliation. Managing cash flow uncertainty tied to rebate timing and accuracy. A rebate model would also create substantial new administrative burden. It would require new workflows for claim submission, data validation, reconciliation, denial management, audit support, staff training, vendor coordination, and legal oversight. It would likely require additional IT capabilities and increased sharing of claim-level data, creating added privacy and security risks. These costs would be ongoing and would fall especially hard on small, rural, and underserved health centers with limited administrative infrastructure. A rebate framework would require new infrastructure for tracking, reconciliation, dispute resolution, and compliance. FQHCs would likely need to: Hire dedicated staff to manage rebate submissions and oversight; or Contract with third-party administrators who charge fees. Either option diverts limited 340B savings away from patient services. Patient access risks are significant. Even if HRSA attempted to impose guardrails on rebate denials, denial risk itself is a major problem. Every delayed, disputed, or denied rebate means the health center may not receive the benefit Congress intended under 340B. That uncertainty would pressure FQHCs to limit access to high-cost drugs, reduce pharmacy support, or divert funds from other essential services. Rural and medically underserved communities would be harmed first and most. If HRSA seeks to improve program integrity, reduce duplicate discounts, or address data issues tied to other federal payment programs, it should do so through targeted oversight, standardized data approaches, and direct compliance mechanisms. It should not do so by forcing FQHCs to front full drug costs and function as lenders to manufacturers. The 340B Program was designed to strengthen the healthcare safety net, not shift financial and administrative risk onto it. For FQHCs, a rebate model would: Increase financial exposure Add administrative burden Reduce net savings available for patient care Weaken, rather than strengthen, the safety net HRSA should not implement a 340B rebate model for FQHCs, whether through a pilot or broader program change. The traditional upfront discount is what makes 340B workable for the health center safety net. Replacing it with a rebate model would predictably weaken cash flow, increase administrative cost, heighten financial risk, and reduce patient access to needed medications and services. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs health centers can afford to stock, directly contradicting the programs goal of increasing access to affordable medications. Since 90% of health center patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center. We strongly urge HRSA to exempt FQHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients.
HRSA-2026-0001-1807North Carolina Healthcare Association2026-04-20T04:00Z17,920 chars
North Carolina Healthcare Association Comment Letter April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: On behalf of the North Carolina Healthcare Association (NCHA), representing more than 130 hospitals and health systems across North Carolinaincluding 65 hospitals that participate in the 340B Drug Pricing Programwe appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. The RFI asks whether HRSA should implement a rebate-based model under the 340B program rather than the longstanding upfront discount model. From the perspective of North Carolina hospitals and the patients they serve, we do not evaluate HRSAs second attempt to design and implement a prospective rebate program to be any different in principle than the initial program attempt that was blocked by federal courts. Further, we maintain that HRSA lacks the statutory authority to implement a rebate structure for the 340B program and should abandon this new attempt to implement a rebate pilot model. For more than three decades, the 340B program has enabled safety-net hospitals to stretch scarce federal resources and reinvest savings into patient care for vulnerable communities. The upfront discount structure has been central to the programs success by providing predictable access to reduced drug prices and allowing hospitals to reinvest those savings into services that improve access to care. Transitioning the program to a rebate-based structureeven as part of a pilotwould undermine this model by imposing substantial financial, administrative, and operational burdens on hospitals without providing corresponding benefits to patients or the health care system. Administrative Burdens and Operational Complexity A rebate model would require hospitals to track individual drug claims, submit rebate requests to manufacturers, reconcile payments, and resolve disputes over denied or delayed rebates. Hospitals would also need to manage new reporting obligations and compliance processes associated with these transactions. Many hospitals have built their operational systems, staffing models, and vendor relationships around the existing upfront discount structure. Implementing a rebate model would therefore require significant changes to hospital workflows, contracts with third-party administrators, and internal compliance processes. Hospitals across North Carolina have expressed concern that these new administrative requirements would require additional staffing and investment in new information technology systems. These additional operational costs would divert resources away from patient carethe very outcome the 340B program was designed to prevent. Cash Flow Risks and Financial Stability Unlike the current upfront discount model, a rebate structure would require hospitals to pay the full price of drugs at the time of purchase and wait for reimbursement from manufacturers. For hospitals operating on thin marginsincluding many rural hospitals in North Carolinathis change could create significant cash flow challenges. Hospitals would effectively be required to front large sums of money while waiting for rebates owed under the statute. In some cases, this delay in receiving 340B savings could affect hospitals liquidity and potentially create complications related to financial covenants tied to days cash on hand. These financial pressures could ultimately affect hospitals ability to maintain services that patients depend on. We do not believe that by HRSA is appropriately accounting for these risks and potential financial instability for hospitals participating the 340B program, which was among the bases for courts preventing the initial attempt at the rebate pilot from moving forward. Sufficient guardrails, short of halting any plans to implement a pilot program have not been identified. Data Reporting and System Requirements HRSA has indicated that the data required for a rebate model may largely mirror information already maintained by hospitals or their third-party vendors. However, hospitals have emphasized that their systems were designed to function under an upfront discount model. Implementing a rebate system would likely require significant changes to hospital data systems and vendor contracts. Hospitals may also need to collect and reconcile data from multiple internal systems to generate the information required for rebate submissions. Without a centralized and standardized process, hospitals could face varying data submission requirements across manufacturers. These inconsistencies would increase administrative burden and compliance risk. Impact on Patients and Communities Hospitals rely on 340B savings to support services that directly benefit patients and communities. These services include charity care programs, medication assistance initiatives, rural health services, behavioral health programs, and other community-focused efforts. In North Carolina alone, hospitals provide billions of dollars annually in community benefits, including uncompensated and charity care. Policies that reduce the effectiveness or predictability of the 340B program risk limiting hospitals ability to sustain these programs. By increasing administrative costs and financial uncertainty, a rebate model would ultimately reduce the resources hospitals can invest in patient carecontrary to the statutory purpose of the 340B program. Reliance on the Upfront Discount Model Since the creation of the 340B program, hospitals have relied on the availability of upfront discounts to design their financial planning, operational systems, and compliance infrastructure. Over time, hospitals have built staffing structures, vendor relationships, and long-term service investments around this model. A shift to a rebate-based structure would disrupt these reliance interests and impose substantial transition costs on hospitals that have operated in good faith under the longstanding program structure. Absent compelling evidence that the existing discount model is failing, disrupting these reliance interests would impose significant costs without clear benefits. Direct Patient Discounts Denied for Uninsured and Underinsured At patient discharge, hospitals routinely dispense newly prescribed medications to ensure continuity of care and to prevent readmissions. During this care transition, affordability concerns are frequently uncovered that preclude safe discharge without intervention, usually providing 340B drugs either at cost or free. A rebate program makes safe care transitions impossible by raising the price of those medications at the counter to full list (WAC) price. Hospitals, especially rural facilities, can neither absorb these upfront expenses to dispense for free or nor pass through what they believe will be the 340B price post-rebate settlement to the patient. Alternative Approaches If HRSA believes additional mechanisms are needed to address concerns related to duplicate discounts or program integrity, there are less burdensome alternatives to a rebate model. For example, stakeholders have proposed the use of a neutral third-party clearinghouse to facilitate data sharing and deduplication. Such an approach could address operational concerns while preserving the upfront discount structure that hospitals rely upon. At a minimum, HRSA should carefully evaluate whether these alternative solutions could achieve the agencys objectives without imposing the significant financial and administrative burdens associated with a rebate system. Conclusion North Carolina hospitals rely on the 340B program to sustain essential services, expand access to care, and support vulnerable communities across the state. The programs longstanding upfront discount structure has allowed hospitals to stretch scarce federal resources and reinvest savings into patient care. For the reasons described above, NCHA urges HRSA to preserve the current upfront discount model and refrain from implementing a rebate-based structure for the 340B program. If HRSA nevertheless chooses to move forward with a pilot program, the agency should ensure that it is limited in scope, implemented with clear guardrails, and evaluated transparently with meaningful stakeholder input. We appreciate the opportunity to provide comments on this important issue and look forward to continued engagement with HRSA. Please contact Josh Dobson at jdobson@ncha.org or Makeda Harris at mharris@ncha.org if you have questions. Sincerely, Josh Dobson President and CEO North Carolina Healthcare Association 421 Fayetteville St., Suite 203, Raleigh, NC 27601 | 919.677.2400 | ncha.org 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: On behalf of the North Carolina Healthcare Association (NCHA), representing more than 130 hospitals and health systems across North Carolinaincluding 65 hospitals that participate in the 340B Drug Pricing Programwe appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. The RFI asks whether HRSA should implement a rebate-based model under the 340B program rather than the longstanding upfront discount model. From the perspective of North Carolina hospitals and the patients they serve, we do not evaluate HRSAs second attempt to design and implement a prospective rebate program to be any different in principle than the initial program attempt that was blocked by federal courts. Further, we maintain that HRSA lacks the statutory authority to implement a rebate structure for the 340B program and should abandon this new attempt to implement a rebate pilot model. For more than three decades, the 340B program has enabled safety-net hospitals to stretch scarce federal resources and reinvest savings into patient care for vulnerable communities. The upfront discount structure has been central to the programs success by providing predictable access to reduced drug prices and allowing hospitals to reinvest those savings into services that improve access to care. Transitioning the program to a rebate-based structureeven as part of a pilotwould undermine this model by imposing substantial financial, administrative, and operational burdens on hospitals without providing corresponding benefits to patients or the health care system. Administrative Burdens and Operational Complexity A rebate model would require hospitals to track individual drug claims, submit rebate requests to manufacturers, reconcile payments, and resolve disputes over denied or delayed rebates. Hospitals would also need to manage new reporting obligations and compliance processes associated with these transactions. 2 Many hospitals have built their operational systems, staffing models, and vendor relationships around the existing upfront discount structure. Implementing a rebate model would therefore require significant changes to hospital workflows, contracts with third-party administrators, and internal compliance processes. Hospitals across North Carolina have expressed concern that these new administrative requirements would require additional staffing and investment in new information technology systems. These additional operational costs would divert resources away from patient care the very outcome the 340B program was designed to prevent. Cash Flow Risks and Financial Stability Unlike the current upfront discount model, a rebate structure would require hospitals to pay the full price of drugs at the time of purchase and wait for reimbursement from manufacturers. For hospitals operating on thin marginsincluding many rural hospitals in North Carolinathis change could create significant cash flow challenges. Hospitals would effectively be required to front large sums of money while waiting for rebates owed under the statute. In some cases, this delay in receiving 340B savings could affect hospitals liquidity and potentially create complications related to financial covenants tied to days cash on hand. These financial pressures could ultimately affect hospitals ability to maintain services that patients depend on. We do not believe that by HRSA is appropriately accounting for these risks and potential financial instability for hospitals participating the 340B program, which was among the bases for courts preventing the initial attempt at the rebate pilot from moving forward. Sufficient guardrails, short of halting any plans to implement a pilot program have not been identified. Data Reporting and System Requirements HRSA has indicated that the data required for a rebate model may largely mirror information already maintained by hospitals or their third-party vendors. However, hospitals have emphasized that their systems were designed to function under an upfront discount model. Implementing a rebate system would likely require significant changes to hospital data systems and vendor contracts. Hospitals may also need to collect and reconcile data from multiple internal systems to generate the information required for rebate submissions. Without a centralized and standardized process, hospitals could face varying data submission requirements across manufacturers. These inconsistencies would increase administrative burden and compliance risk. Impact on Patients and Communities Hospitals rely on 340B savings to support services that directly benefit patients and communities. These services include charity care programs, medication assistance initiatives, rural health services, behavioral health programs, and other community-focused efforts. 3 In North Carolina alone, hospitals provide billions of dollars annually in community benefits, including uncompensated and charity care. Policies that reduce the effectiveness or predictability of the 340B program risk limiting hospitals ability to sustain these programs. By increasing administrative costs and financial uncertainty, a rebate model would ultimately reduce the resources hospitals can invest in patient carecontrary to the statutory purpose of the 340B program. Reliance on the Upfront Discount Model Since the creation of the 340B program, hospitals have relied on the availability of upfront discounts to design their financial planning, operational systems, and compliance infrastructure. Over time, hospitals have built staffing structures, vendor relationships, and long-term service investments around this model. A shift to a rebate-based structure would disrupt these reliance interests and impose substantial transition costs on hospitals that have operated in good faith under the longstanding program structure. Absent compelling evidence that the existing discount model is failing, disrupting these reliance interests would impose significant costs without clear benefits. Direct Patient Discounts Denied for Uninsured and Underinsured At patient discharge, hospitals routinely dispense newly prescribed medications to ensure continuity of care and to prevent readmissions. During this care transition, affordability concerns are frequently uncovered that preclude safe discharge without intervention, usually providing 340B drugs either at cost or free. A rebate program makes safe care transitions impossible by raising the price of those medications at the counter to full list (WAC) price. Hospitals, especially rural facilities, can neither absorb these upfront expenses to dispense for free or nor pass through what they believe will be the 340B price post-rebate settlement to the patient. Alternative Approaches If HRSA believes additional mechanisms are needed to address concerns related to duplicate discounts or program integrity, there are less burdensome alternatives to a rebate model. For example, stakeholders have proposed the use of a neutral third-party clearinghouse to facilitate data sharing and deduplication. Such an approach could address operational concerns while preserving the upfront discount structure that hospitals rely upon. At a minimum, HRSA should carefully evaluate whether these alternative solutions could achieve the agencys objectives without imposing the significant financial and administrative burdens associated with a rebate system. Conclusion 4 North Carolina hospitals rely on the 340B program to sustain essential services, expand access to care, and support vulnerable communities across the state. The programs longstanding upfront discount structure has allowed hospitals to stretch scarce federal resources and reinvest savings into patient care. For the reasons described above, NCHA urges HRSA to preserve the current upfront discount model and refrain from implementing a rebate-based structure for the 340B program. If HRSA nevertheless chooses to move forward with a pilot program, the agency should ensure that it is limited in scope, implemented with clear guardrails, and evaluated transparently with meaningful stakeholder input. We appreciate the opportunity to provide comments on this important issue and look forward to continued engagement with HRSA. Please contact Josh Dobson at jdobson@ncha.org or Makeda Harris at mharris@ncha.org if you have questions. Sincerely, Josh Dobson President and CEO North Carolina Healthcare Association
HRSA-2026-0001-1808Loma Linda University Health2026-04-20T04:00Z10,630 chars
See attached file April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Loma Linda University Health Hospitals, we appreciate the opportunity to submit comments on the Department of Health and Human Services Request for Information regarding a potential 340B Rebate Model Pilot Program. Loma Linda University Health is a leading academic health sciences institution serving the 4.2 million residents of the Inland Empire. We value HRSAs ongoing engagement with covered entities and its commitment to program integrity, accountability, and patient access to care. Loma Linda University Health Hospitals operates as a safetynet health system and includes the only childrens hospital in our region. Approximately 76 percent of the patients we serve rely on MediCal or Medicare for their health coverage, meaning that our operations, access to medications, and ability to sustain services are closely tied to the stability and design of public coverage programs. After careful review, Loma Linda University Health Hospitals strongly opposes implementation of a rebatebased model under the 340B Program instead of maintaining the upfront discount program that is critical to lifesaving drugs for vulnerable populations. The existing upfront discount mechanism has functioned effectively for decades, enabling covered entities to stretch scarce federal resources and reinvest savings into patient care and essential community services. As discussed below, we are deeply concerned that even a limited rebate pilot would impose substantial administrative, financial, and operational burdens that would significantly outweigh any anticipated benefits. More fundamentally, we are concerned that consideration of a rebate model appears to rest on a premise that HRSA must balance the interests of covered entities and manufacturers when selecting a discount mechanism. The 340B statute is clear that the programs purpose is to support covered entities in caring for vulnerable populations by allowing them to stretch limited resources as far as possible. Preserving an upfront discount model, on which Loma Linda University Health P a g e | 2 A Seventh-day Adventist Organization LOMA LINDA UNIVERSITY HEALTH 11234 Anderson Street, Loma Linda, California 92354 Hospitals has long relied, is the most effective and stable means of advancing that statutory purpose. As the number of drugs subject to a rebate model grows, so too do the associated burdens, more claims to submit, more rebates to reconcile, greater cashflow exposure, and an increased likelihood of delays and disputes. Each of these outcomes reduces the resources available for direct patient care. Administrative Costs Under a Potential 340B Rebate Program Participation in the 340B Program already requires careful compliance oversight, and Loma Linda University Health Hospitals has invested in staff, systems, and workflows designed around an upfront discount model. A shift to a rebate mechanism would necessitate substantial new administrative investments far beyond those originally contemplated when we enrolled in the program. A rebate system would require new or expanded functions related to claims validation, rebate submission, reconciliation, dispute resolution, audit support, and manufacturer communications. These activities would generate both onetime startup costs and ongoing operational expenses, particularly if up to 25 drugs are included, as HRSA has now indicated. Staffing Impacts Loma Linda University Health Hospitals does not currently have sufficient dedicated staffing to administer a rebatebased 340B program. Implementation would likely require additional fulltime personnel with specialized expertise in pharmacy operations, reimbursement, data analytics, and compliance, or would force clinically focused staff to divert time away from patient care responsibilities. Based on our experience, HRSAs estimate that only five additional hours per week would be required significantly understates the scope and complexity of the work involved, particularly when multiplied across multiple drugs, manufacturers, and claims cycles. Systems and Infrastructure Our existing pharmacy and billing systems were designed to operate within an upfront discount framework. A rebate model would require significant modifications to IT infrastructure, including new data interfaces, manual data extraction processes, and increased reliance on thirdparty vendors who do not have direct access to our electronic health record system. Developing, integrating, and maintaining these systems would involve material costs, many of them recurring, and would introduce new operational risks, including data integrity and security challenges. Data Collection and Reporting Burdens During prior discussions of a rebate model, HRSA and manufacturers suggested that covered entities already collect the data that would be required for rebate processing. That has not been our experience. Much of the information needed would have to be pulled from multiple internal systems, validated manually, and repackaged to meet manufacturerspecific requirements. P a g e | 3 A Seventh-day Adventist Organization LOMA LINDA UNIVERSITY HEALTH 11234 Anderson Street, Loma Linda, California 92354 While HRSA has suggested that these burdens would not be significant, we believe that assumption underestimates the complexity and resource intensity of assembling accurate, timely data at scale, particularly for hospitals like ours with extensive service lines and payer mixes. Payment Timing and CashFlow Impacts Unlike upfront discounts, a rebate model would require Loma Linda University Health Hospitals to pay full acquisition costs upfront while awaiting reimbursement from manufacturers. Even relatively short delays would effectively force covered entities to extend interestfree loans to manufacturers, creating real cashflow pressures. These payment timing issues could have downstream implications for liquidity, financial covenants, and capital planning. For safety-net hospitals operating on thin margins, even modest disruptions can affect the ability to sustain services or invest in community health initiatives. Adverse Impacts on Patient Care and Community Services Taken together, increased administrative costs, staffing needs, IT investments, and cashflow risks would inevitably erode the value of the 340B Program for Loma Linda University Health Hospitals. Over time, this would reduce our ability to reinvest savings into patient care, particularly for Medicaid and Medicare populations. Reliance Interests The RFI invites comment on covered entities reliance interests in upfront discounts. Loma Linda University Health Hospitals has reasonably relied on HRSAs longstanding use of upfront pricing when designing internal operations, entering into vendor contracts, hiring staff, and budgeting 340B savings for patient care initiatives. The existence of statutory authority to allow rebates does not negate decades of consistent administrative practice. Absent evidence that the upfront discount model is failing, a fundamental shift to a rebate mechanism would disrupt settled expectations and impose costs that covered entities cannot easily absorb. Problems with the Beacon IT Platform During HRSAs prior rebate initiative, Loma Linda University Health Hospitals experienced significant uncertainty related to the Beacon IT platform, including evolving data requirements, contractual concerns, and limited support. Any future program would need clear guardrails, standardized requirements, and robust privacy protections before hospitals could reasonably participate. Alternatives to a Rebate Model HRSA has acknowledged that manufacturers have alternative tools available to address concerns about duplicate discounts, including 340B/MDPNP coordination. We support the American Hospital Associations recommendation that HRSA pursue a neutral thirdparty clearinghouse to address deduplication and data consistency in a far less burdensome manner. Where deduplication questions have arisen, they have generally been resolved without systemic disruption, underscoring that a rebate model is not necessary to achieve program integrity goals. Conclusion For the reasons outlined above, Loma Linda University Health Hospitals respectfully urges HRSA not to proceed with a 340B Rebate Model Pilot Program. The costs, complexity, and risks P a g e | 4 A Seventh-day Adventist Organization LOMA LINDA UNIVERSITY HEALTH 11234 Anderson Street, Loma Linda, California 92354 associated with a rebate framework would significantly undermine the programs ability to serve vulnerable patients and communities. If HRSA nonetheless chooses to move forward, it is essential that covered entities be afforded the opportunity to comment on the specific design features of any proposed program. Without clear information regarding drug selection, data requirements, timelines, and dispute resolution processes, meaningful input is not possible. We appreciate your consideration of these comments and welcome continued dialogue on ways to strengthen the 340B Program while preserving its core mission. Please feel free to contact me at ssecor@llu.edu or 909-558-5371 with any questions. Sincerely, Shandra Secor Vice President, Government Relations Loma Linda University Health Loma Linda University Health includes Loma Linda University's eight professional schools, Loma Linda University Medical Center's six hospitals including The Dennis and Carol Troesh Medical Campus, which opened in August 2021, housing the new adult hospital and Childrens Hospital expansion and more than 1,100 faculty physicians located in the Inland Empire of Southern California. Established in 1905, Loma Linda University Health is a global leader in education, research and clinical care. It offers over 100 academic programs and provides quality health care to over 40,000 inpatients and 1.5 million outpatients each year. A Seventh-day Adventist organization, Loma Linda University Health is a faith-based health system with a mission "to continue the teaching and healing ministry of Jesus Christ."
HRSA-2026-0001-1809(no commenter metadata)2026-04-20T04:00Z5,263 chars
See attached file(s) Lawrence County Hospital Southwest Heattn P. O. Box 788 ' 1065 East Broad Street ' Monticello, MS 39654 Phone (601) 587-4051 ' Fax (601) 587-0306 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Lawrence County Hospital (LCH), l appreciate the opportunity to provide comments regarding the proposed 340B Rebate Model Pilot Program. LCH is a Critical Access Hospital located in Monticello, Mississippi, serving a rural community with limited access to healthcare resources. Our facility includes an emergency department, outpatient infusion services, and primary care clinics, and we rely on visiting specialists from larger regional partners to provide additional care. As a small, community-based hospital, we play a vital role in ensuring access to essential services for our patients. We write today to express our strong opposition to the implementation of a rebate model under the 340B program. The current 340B structure, which provides upfront discounts at the point of purchase, is foundational to our ability to operate. The statute governing the program requires manufacturers to offer covered outpatient drugs at or below a defined ceiling price, and it does not contemplate a retrospective rebate system. More importantly, the program was designed to allow hospitals like ours to stretch limited resources in order to care for vulnerable populations. A rebate model would fundamentally undermine that purpose. From an operational standpoint, the proposed model is not feasible for a facility of our size. Lawrence County Hospital has a pharmacy staff consisting of a single pharmacist who is responsible for all pharmacy operations across the hospital. There are no additional pharmacists, analysts, or administrative personnel available to manage complex reporting, claims reconciliation, or appeals processes. While we receive support from a partner hospital in McComb, we remain a separate covered entity under the 340B program and are responsible for our own compliance and reporting requirements. Even under current conditions, managing program requirements is a challenge. A rebate model would introduce an entirely new layer of administrative responsibility that we simply do not have the capacity to absorb. The expectation that these activities could be managed with minimal time or effort does not reflect the reality for small rural hospitals. Our colleagues at our partner facility have been actively working since January to resolve claim denials through existing rebate-related infrastructure, dedicating significant time and resources without success. Their experience highlights the complexity and instability of the current systems, including issues with data submission, claim validation, and lack of transparency in denial processes. If a larger facility with dedicated staff and external support cannot reliably navigate these processes, it is not reasonable to expect a single-pharmacist operation to do so. The financial implications are equally concerning. A rebate model would require us to purchase medications at higher upfront costs and wait for reimbursement. For a Critical Access Hospital operating on narrow margins, this shift in cash flow is not sustainable. Any delay in paymentor denial of claimswould directly impact our ability to maintain services, including access to medications for our patients. Beyond operational and financial concerns, the proposed model raises serious questions about its impact on patient care. The 340B program enables us to provide services that would otherwise not be financially viable in a rural setting. Introducing additional administrative burden and financial risk will inevitably divert resources away from patient care and threaten the stability of the services we provide. We also have concerns regarding the readiness of the systems that would support a rebate model. Based on current experience, these platforms lack the transparency, consistency, and reliability necessary to support accurate and timely reimbursement. Expanding their use without significant improvement would place undue risk on small providers like LCH. While we support efforts to ensure program integrity, a rebate model is not the appropriate solution. Any changes to the 340B program should preserve the core structure of upfront discounts and recognize the operational realities of rural and critical access hospitals. In closing, the proposed rebate model would impose administrative requirements and financial risks that are not manageable for a facility of our size. It would undermine the purpose of the 340B program and threaten access to care for the community we serve. For these reasons, we respectfully urge HRSA to abandon the rebate model and maintain the current structure of the 340B program. Thank you for the opportunity to provide comment. Sincerely, le/ Philli . Langston Chief Executive Officer Lawrence County Hospital
HRSA-2026-0001-1810Finger Lakes Community Health2026-04-20T04:00Z119,315 chars
See attached file(s) April 17 , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Finger Lakes Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Finger Lakes Community Health anticipates an average loss of $187,292, a 19% reduction in overall program savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Finger Lakes Community Health in particular, this means it will impact: 27,885 patients in rural New York State who rely on Finger Lakes Community Health to continue providing affordable, high quality care Increase our annual 340B Program internal management costs by 41% to $230,000 Our ability to continue providing robust enabling services such as personalized transportation, in house interpretation services, insurance enrollment assistance, and hardship waivers of charges We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Finger Lakes Community Health provided $530,593 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Finger Lakes Community Health anticipates needing .5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Finger Lakes Community Health anticipates an increase of $65,872 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Finger Lakes Community Health anticipates adding .5 additional FTE in addition to the .3 FTE of work that will be absorbed internally. This will additional challenges to an organization that operates in an area with a shortage of qualified workforce. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Finger Lakes Community Health spends an average of $35,000 per employee to recruit, screen, onboard, and train administrative staff. This expense will be incurred on top of the $122,500 of annual internal staffing costs and external vendor costs incurred to fulfill the requirements of a rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 payments. Finger Lakes Community Health anticipates 8 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Finger Lakes Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 27,885 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to exceed $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: There will be high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend many hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Finger Lakes Community Health currently partners with 7 pharmacies to increase access to affordable medications in rural New York State. 7 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 43 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 5 counties of rural New York State with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Finger Lakes Community Health rolls the cost of any clinic administered drugs into the nominal daily charge for patients who are sliding fee eligible. This means that patients at or below 200% of the Federal Poverty Limit receive clinic administered drugs at no extra cost to the patient. Because these patients are primarily uninsured the costs of these drugs is not billed to insurance and is instead written off to the Sliding Fee Discount Program. For drugs distributed through a pharmacy Finger Lakes Community Health operates a Sliding Fee Discount Program through Walgreens and their wide network of retail pharmacies. This ensures the broadest pharmacy access to the greatest number of our geographically distributed patients. The Walgreens program provides medications to confirmed Finger Lakes Community Health confirmed sliding fee eligible patients at a pre-determined percentage of the 340B drug price based on family size and income. A small filling fee of $1.50 per prescription is added. Neither Walgreens or the CHC receive a retail markup on these sales. Additionally, Finger Lakes Community Health covers the remaining cost of the 340B drug price after any sliding fee discount is provided. Walgreens has already excluded and drugs named in the Medicare Fair Price program from its 340B program, denying critical access to medications for hundreds of sliding fee eligible Medicare patients. It is unclear how a 340B rebate model will impact the Walgreens sliding fee program as a whole. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $199,530 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $43,850 to purchase these same drugs at the 340B ceiling price. This represents a 355% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Finger Lakes Community Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as in-house interpretation which provides our non-English speaking patients with the best possible chance of an appropriately translated interaction for optimal patient care, in-house door to door transportation forcing patients to rely on unreliable Medicaid transportation services or expensive ride sharing, insurance enrollment services will have to be rationed to those patients in highest need rather than offer these services to all patients. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Enabling staff. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12,087 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Finger Lakes Community Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Finger Lakes Community Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $76,971. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Finger Lakes Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $16,288. As more drugs are added to the MFP list, this upfront monthly spend increases to $38,969 in 2027 and $43,452 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our 12 organization would be forced to utilize our line of credit or delay payments to other vendors, potentially impacting other areas of our clinic operations. This is not a sustainable solution; the interest costs would inhibit our ability to continue providing robust enabling services to our 27,885 patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Finger Lakes Community Health for their ongoing health maintenance needs, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Finger Lakes Community Health urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $30,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 14 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 16 Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 17 there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 18 existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication 19 While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 20 A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B 28 42 U.S.C. 256b(a)(1) 29 Id. 21 statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 22 to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in New York State, there are many administrative hurdles to utilizing 340B drugs with Medicaid payment. For this reason, Finger Lakes Community Health has chosen to carve out Medicaid from our 340B program completely. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost 35 See 42 U.S.C 256b(a)(5)(A). 36 C.F.R. 447.518(a). 23 determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led 24 clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 26 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 27 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 28 factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 29 Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 30 transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 31 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. 32 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Finger Lakes Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Finger Lakes Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 34 Finger Lakes Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lawreen Duel, lawreend@flchealth.org. Sincerely, Jamie Wetherell, CPA Chief Financial Officer Finger Lakes Community Health
HRSA-2026-0001-1811Academy of Managed Care Pharmacy (AMCP)2026-04-20T04:00Z9,040 chars
The Academy of Managed Care Pharmacy (AMCP) thanks the Health Resources and Services Administration (HRSA) for the opportunity to comment on the Request for Information (RFI) for the 340B Rebate Model Pilot Program. Please see attached for AMCP's full comments. March 19, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via regulations.gov Re: 340B Rebate Model Pilot Program [HRSA-2026-03042] Dear Administrator Engels: The Academy of Managed Care Pharmacy (AMCP) thanks the Health Resources and Services Administration (HRSA) for the opportunity to comment on the Request for Information (RFI) for the 340B Rebate Model Pilot Program (HRSA-2026-03042), issued on February 17, 2026. AMCP is the nations leading professional association dedicated to increasing patient access to affordable medicines, improving health outcomes, and ensuring the wise use of healthcare dollars. Through evidence and value-based strategies and practices, AMCPs nearly 8,000 pharmacists, physicians, nurses, and other practitioners manage medication therapies for the 270 million Americans served by health plans, pharmacy benefit management firms, emerging care models, and government health programs. AMCP appreciates HRSAs interest in exploring alternative approaches to administering the 340B program, including the potential use of a rebate-based model. AMCP generally supports 340B reform to prevent duplicate discounts, improve transparency and oversight, and maintain access to providers,1 but urges HRSA to consider potential unintended consequences and guardrails to protect patient access to medications under a rebate model. Additionally, AMCP urges the agency to explore additional reforms to the 340B program, such as mandatory 340B claims identifiers, patient cost reductions, the creation of a patient definition for determining 340B eligibility, and stronger oversight of contract pharmacies. Rebate Model and Access AMCP urges HRSA to consider mitigating the impact of shifting higher upfront costs to covered entities because of the potential impact on medication access. Under a rebate model, covered entities would be required to pay the full acquisition price upfront prior to receiving the 340B rebate. Although data from the IQVIA Institute indicates that the financing costs of a rebate scheme are similar to or lower than the costs from existing methods, such as physical or credit- 1 AMCP. Legislative and Regulatory Position Statement: 340B Drug Pricing Program. (2026). Available at https://www.amcp.org/legislative-regulatory-position/340b-drug-pricing-program based replenishment,2 the possible reduction in wholesale acquisition cost (WAC) by pharmaceutical manufacturers for drugs subject to maximum fair prices (MFPs) under the Medicare Drug Price Negotiation Program (MDPNP) may lead to overall lower revenue for covered entities under the 340B program.3 Coupled with ongoing implementation of the MDPNP, rebate financing may create cash flow pressures for providers, particularly smaller safety-net hospitals or contract pharmacies operating on thin margins. Smaller covered entities are reliant on the 340B program due to extremely tight budgets and the 340B program is often the lifeline needed to keep them afloat. Delays in rebate payments or administrative reconciliation challenges could exacerbate financial strain, potentially limiting the ability of these pharmacies to maintain adequate inventory. These disruptions could translate into reduced patient access to essential medications, undermining the programs goals of supporting vulnerable populations and ensuring continuity of care. For this reason, AMCP urges HRSA to consider implementing guardrails for the timing of rebates and penalties for delays. Duplicate Discounts Despite the statutory prohibition on duplicate discounts,4 duplicate discounts are an ongoing problem for the program. A duplicate discount occurs when a manufacturer provides a 340B price reduction and then also pays a Medicaid rebate for the same drug claim.5 Duplicate discounts are frequently caused by gaps in data sharing between covered entities, pharmacies, state Medicaid agencies, and drug manufacturers which create opportunities for claims to be misclassified. AMCP believes that mandatory claim-level identifiers and real-time reporting would help to prevent duplicate discounts. Although the proposed 340B rebate model could create an auditable framework to strengthen oversight, simplify reconciliation, and reduce the compliance challenges posed by current 340BMedicaid interactions, this approach may add unforeseen administrative and financial burdens. Covered entities are not currently set up to submit claims and process post-dispense rebates. HRSA should consider how the cost of developing the necessary systems and technology may disproportionately impact smaller covered entities. These burdens may inadvertently lead to reduced competition, market consolidation, and fewer choices for patients. Transparency and Oversight The proposed 340B rebate model may enhance transparency and oversight by providing an auditable separation between drug acquisition costs and the 340B benefit. The IQVIA Institute 2 Sun, C., et al. (2025). How will a rebate model impact cash flow in the 340B drug pricing program? IQVIA Institute. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper- 2025.pdf 3 Id. 4 42 USC 256b(a)(5)(A)(i). 5 Hardaway J. 340B Program Puts Manufacturers at Risk of Duplicate Drug Discounts. P & T (2016). Available at: https://pmc.ncbi.nlm.nih.gov/articles/PMC4699484/ estimates that hospital revenues associated with the 340B program reached $147.8 billion in 2024.6 IQVIA further estimates that state employee health plans paid an average of $139 per member per year in excess costs due to 340B discounts.7 There is a strong need for robust oversight given the size and substantial growth of this program as well as the potential for inappropriate diversion of 340B drugs under current guidance regarding contract pharmacies. Under a rebate approach, covered entities would purchase medications at standard prices and receive the 340B discount through post-sale rebates, creating a documented trail of transactions that can be monitored and verified by HRSA and other stakeholders. This structure enables more accurate reporting, facilitates regulatory compliance, and allows for improved tracking of program utilization. Such transparency supports better alignment of reimbursement, reduces ambiguity in contract pharmacy arrangements, and strengthens confidence that 340B savings are appropriately applied to patient care and program integrity objectives. AMCP urges that, during a 340B rebate pilot, HRSA conduct regular compliance audits to validate that rebates accurately reflect 340B patient eligibility. Additional Reforms AMCP urges HRSA to consider additional reforms to this program to better support the programs goals while reducing the potential for fraud, waste, and abuse. HRSA should consider additional reporting requirements, mandatory 340B claims identifiers, patient cost reductions, the creation of a patient definition for determining 340B eligibility, and stronger oversight of contract pharmacies. Covered entities should be required to publish aggregate 340B utilization data and show how savings benefit eligible patients and communities. Covered entities face no requirements regarding how they can use 340B savings and have no obligation to report this information, leaving questions about whether funds support activities consistent with program goals or whether the current system may inadvertently encourage fraud, waste, and abuse. Standardized reporting would strengthen program accountability without revealing competitively sensitive information. Conclusion AMCP appreciates HRSAs deliberate, consultative approach to considering potential changes to the 340B program. We look forward to continued engagement and stand ready to provide further input as HRSA evaluates these important policy considerations. If you have any 6 Martin, R & Karne, H. The Size and Growth of the 340B Program in 2024 (2025). IQVIA Institute. Available at https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-update-on-340b-growth-in-2024-white- paper-2025.pdf 7 Sun, C., Karne, H., Martin, R. (2025). The cost of 340B to state employee health plans. IQVIA Institute. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2026/the-cost-of-340b-to-state-employee-health- plans.pdf questions regarding these comments or would like to discuss them further, please contact Vicky Jucelin, Manager of Regulatory Affairs, at vjucelin@amcp.org or (571) 858-5320. Sincerely, Geni Tunstall, JD Associate Vice President, Regulatory Affairs
HRSA-2026-0001-1812Vecino Health Centers2026-04-20T04:00Z41,301 chars
See attached file(s) VECINO IMAILT it eel k April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Houston Community Health Centers, Inc, dba Vecino Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate rnodel. The 340B program is foundational to CHC's ability to serve the most vulnerable mernbers of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Vecino Health Centers anticipates a significant loss from entity-owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Vecino was founded in 1999 and a year later started providing medical services at a temporary church location until a dilapidated tavern was converted into our first community clinic in Denver Harbor, a low-income neighborhood in the northeast of Houston/Harris County. In 2007, Vecino became a Federally Qualified Health Center (FQHC), and two years later opened its second site located on Airline Dr.. Currently, we have two full-service sites; the Denver Harbor Family Health Center, the Airline Children and Women's Health Center, and six school-based mental health sites across the northeast of Houston. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Prograrn is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades. the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel undermines this by placing an imrnense financial burden on CHCs. By requiring CHCs to purchase rnedications at full price and wait for rebates, this model would cause significant financial turrnoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Vecino Health Centers in particular, this means it will impact: 12,133 340B transactions / 12,104 patients served a year Current operating costs for our 340B program are $625,348 a year All 340B revenue is used to cover losses associated with providing care to uninsured patients We strongly urge URSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions cornpared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity) This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed Richard P, Ku L. Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar.35(1):50-9. doi: 10.1097/JAC.0b0 l3e31823d27b6. PM1D: 22156955. 2 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatrnent for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CRCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CliCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate rnodel on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the OARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randornized Treatment with Ernpagliflozin or Placebo in Patients with Heart Failure. Circulation. imps:. 'Itiw Wahaj o urnals.o rg/doi ipd 0.116lieireulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substancc use and mental health indicators in the United States: Results frorn the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https: /1..km.vs..samhsa.:1()N dataidata-ew-coliect/nsduh-national-surveydrip2-use-and-health'national-relcases 5 I fauser RA, et al. Long-Term Dcutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benelits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 2025 UDA Data, HRSA (hrsa.gov) 3 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirernents and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Vecino Health Centers provided sliding fee discounts to 3,313 patients in 2025. provided through discounted medications and rnedieal services. We anticipate that our ability to offer sliding fee discounts wilI decrease significantly under a rebate model. Staffing Impact: Vecino Health Centers anticipates needing additional .05 FTE as a Result of Rebate Model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Vecino Health Centers anticipates an increase in additional costs related to rebate model for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 4 According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. In 2025 Vecino Health Centers incurred losses of ($702,645). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Vecino Health Centers urges IIRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff it requires significant changes to pharrnacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate additional upfront costs to adapt our pharmacy software, pay for custorn dashboard modifications, and design new internal workflows. Implernentation costs will only exacerbate losses already being incurred and will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,104 patients a year, any increase in expenses including labor, IT, and carrying costsonly deteriorates are already precarious financial postion. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that own their pharmacies and utilize a vendor to operate, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in- house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessrnent (99 responses). ibid. 5 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with four pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. 0ur staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Harris County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Irnplementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the rnedications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still cornmon for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs Vulnerahilit% Ink% \ppi, ,,ich iu lilcutil\ )escrls and KeNslone Pharmacic,Lj Pharrnao and Clinical Pharmacolon JAM. \ Nemork Opcn JA l Netw,mk 10 https://NN,w,v,.hcaltliaffairs.orgrdoilabsil 0.1377/h Ithaff.2(124.00 92?journalt I 1 Internal NACHC survey data 6 and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would irnpose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their inission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Vecino Health Centers charges all uninsured patients below 200% FPL 340B cost of drug plus $5 adrninistration fee. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial irnpact is further compounded when CHCs have entity- owned pharrnacies with physical inventories and must stock their shelves with purchases at WAC. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. hltps://bohe.hrsa.gokiconial ianeeleornpl lance- manual chuter9P footnote I 0 7 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcernent if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and rnay undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volurne, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 14https: cnhcalth.co blog/N, ear-end-husiness-licalth-check-ko -metrics-ccn -pharmao -O\k ner-should-revio\ s https: '3.4Ohnrioirtg.hrsazov https:,.'s wans.gov 'filesiiipisclected-druu-list-negotiated-prices-also-knossn-maximoin-fair-prices-statutuip./ip 8 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volurne, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs roust wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Additional administrative costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Vecino Health Centers anticipates that our already precarious financial position will deteriorate further requiring reduction in workforce and services provided. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 34011 program. Vecino Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely lirnited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or irnpractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terrns, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. 9 Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization could be forced to take out a line of credit / utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Vecino Health Centers, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is imrnediate: longer wait tirnes, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Lnpact of Rebate Denials and Delays Vecino Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanisrn- but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The frarnework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.' If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual losses. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is cornpounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharrnacy software at the thne of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally. the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of fmancial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 17 Application Process forthe 3408 Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https:. 'N ... federal register.gm documents/2025/08/0 I /2025- I 4619/340h-program-notice-app I ion I I ; I( 0,- rebate-model-pi lot-program 10 If HRSA proceeds with a rebate-based pricing model, the program rnust include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the rnanufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory paneI to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CIICs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related inforrnation annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 11 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of cornpliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Cornpared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate cornpliance systems, and the staff tirne needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate rnodel were implemented, the resulting cash-flow pressures could force rnany CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Vecino Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Vecino Health Centers believes that a 340B rebate pilot would cause disproportionate harrn to patients served by CHCs and other safety net providers. 12 Vecino Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions please contact me directly at 713-343-5450. Daniel Montez, CEO Vecino Health Centers 13
HRSA-2026-0001-1813Alabama Primary Health Care Association2026-04-20T04:00Z21,068 chars
On behalf of Alabamas 19 Community Health Centers (CHCs) and the 344,2023 of patients they serve, the Alabama Primary Health Care Association (APHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Alabamas 19 Community Health Centers (CHCs) and the 344,2023 of patients they serve, the Alabama Primary Health Care Association (APHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, APHCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers' rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, APHCA explains: A. The importance of 340B savings to Alabama CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 344,203 low-income and uninsured patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. B. How a rebate model will create massive cash flow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely, resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why, if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024, they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they serve. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Alabama, CHCs routinely rely on 340B savings to support services such as dental care, behavioral health, nutrition, care coordination, and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 and almost 500 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10- day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Alabamas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve- outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHC's patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers' rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly, and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot is to address 340B and Maximum Fair Price (MFP)deduplication.5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Mary Finch at mfinch@alphca.com. Sincerely, Mary Hayes Finch, President and CEO Alabama Primary Health Care Association 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1814Onvida Health Yuma Medical Center2026-04-20T04:00Z20,253 chars
On behalf of Onvida Health Yuma Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services Request for Information on a 340B Rebate Model Pilot Program. The attached letter contains information requested. In summary, we believe that HRSA should not implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Placing additional upfront financial burdens on covered entities who serve critical health care needs will benefit no one, except the drug manufacturers, who are claiming there are issues with the 340B program that in reality do not exist. Yuma Regional Medical Center dba Onvida Health Yuma Medical Center 2400 South Avenue A Yuma, Arizona 85364 (928) 344-2000 April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA 2026-03042 Dear Administrator Engels: On behalf of Onvida Health Yuma Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The simple answer is no. Onvida Health Yuma Medical Center (Onvida Health) is located in Yuma, Arizona. We provide the only full service acute care hospital between San Diego and Phoenix. We are designated as a sole community hospital and a rural referral center by the Centers for Medicare and Medicaid Services. We serve a vital role in the communities we serve, so maintaining financial viability is of utmost importance. The 340B program is a critical part of that viability since the payor source for 75% of our patients is either Medicare or Medicaid, which reimbursement does not cover the direct cost of care. As explained below, any rebate mechanism will impose enormous costs and burdens on Onvida Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Onvida Health has relied on for years, is the best way to fulfill that purpose of the 340B program. Onvida Health has done its best to provide detailed answers in the limited time available to us in response to the RFI. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. The Honorable Thomas J. Engels Onvida Health Comments Regarding Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Page 2 With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. More drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Onvida Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Onvida Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Onvida Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The administrative burden of a rebate model is significant, estimated to be a minimum of $742,400 annually ($500,000 in additional software/TPA expenses, plus $242,400 in internal labor costs, both detailed below). Onvida has already incurred one-time costs of $50,000 related to 340B Rebate model readiness including Beacon user agreement review, Beacon registration, research, training, data file development, and testing. Another $50,000 in additional one time data related expenses is anticipated. The 340B Rebate Model will require additional staff, rebate coordinator(s), for numerous tasks including but not limited to daily and/or periodic claim submissions, claim/rebate reconciliations, and follow-up related to missing rebate payments. Staffing Impacts Under a Potential 340B Rebate Program. Onvida Health does not currently have the staff needed to comply with a Rebate Program. We believe HRSAs current estimate of only 5 hours per week in additional work for this program grossly underestimates the administrative work that will be needed. For reference, Onvida Healths first medical claim submission on the 340B ESP platform was completed in 40 hours. Note that medical claims submissions require complex queries against large data sets to identify administrations of interest for each manufacturer for a certain period of time. Upon submitting claims data and receiving an error message regarding non-conforming claims, Onvida Health learned that a manufacturer can specify HCPCS coding requirements that do not align with hospital billing practices. The manufacturer requirements would likely cause clinical misalignment within covered entities billing platforms, which could be impermissible due to potential False Claims Act considerations. This would require covered entities to potentially forgo a proper 340B rebate. Additionally, data had to be reviewed and revised to address records that were rejected due to null values or special characters in the Payer field like - or &. These characters are used within the normal course of all other business functions. As a result, it would require ongoing oversight and manual correction only within the Beacon data submission process. This type of The Honorable Thomas J. Engels Onvida Health Comments Regarding Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Page 3 manual manipulation needed to meet the manufacturer's requirements for access to the 340B price would be so onerous as to effectively frustrate the statutory right to the discount. We believe that one additional full time equivalent (FTE) employee, a rebate coordinator position, would be required to meet the demands of the rebate program, just for the current 25 drugs under consideration. This role will have to prepare/submit claims, reconcile payments, analyze and remedy denials. If the number of impacted drugs were to increase, more FTEs would be needed. Additionally, we believe the rebate coordinator will need to regularly engage with existing pharmacy resources (clinical, purchasing, billing) to address reporting and denial issues, taking up a portion of those resources time that would otherwise be spent on regular operations (currently estimated at 10%). We estimate the annual salary of a rebate coordinator to be $93,000 plus benefits of 20% for a total cost of $111,600. We also estimate the annual salary value of the time taken from other pharmacy resources to address the rebate program to be $107,000. There will be additional internal information technology resources needed on an ongoing basis that we estimate the annual salary value to be $23,800. Finally, 340B requires the development of specialized knowledge and expertise that does not readily exist in the market place. Hiring for the rebate coordinator position will be difficult (particularly as many other covered entities will be taking the same approach) and will take time to train once hired. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Onvida Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. In order to provide the claims data required under the rebate model, Onvida Health will need to develop new queries, reports, and databases which will involve significant internal information technology build and maintenance. One time cost to develop these functional tools is estimated at $50,000, but there will be additional recurring costs as staff will need to devote time to reviewing and submitting the data prepared. Third party administrators (TPAs) offer tools to remove some of this burden from covered entities. However, the TPA solutions, which are still under development, have been quoted at a cost of up to $500,000 annually, depending on the needs and benefits offered (i.e. direct claim submission versus data organization; medical claims and contract pharmacy claims or just one claim type). Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Rebate specification files include fields that are not part of current 340B reporting or program monitoring. Specifically, rebate required fields like HCPCS codes, NCPDP billing units, and Claim line number are not part of existing 340B reports. Covered entities will have to develop new reports based on cross walking multiple internal software systems to accommodate rebate requirements. The data requested would require the covered entity to present the combined information typically found in the EMR, the claims processing software, the wholesaler portal, and 340B TPA in an aggregate. The Honorable Thomas J. Engels Onvida Health Comments Regarding Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Page 4 The general information presented to our 340B TPA does not include the HCPCS, which is unnecessary for determining the 340B eligibility. For example, there may be instances in which a drug administration is not billed under a specific HCPCS code but grouped under a DRG due to the 72-hour payment rule. Therefore, it is not a field that would be relied upon in the normal course of 340B operations. The NCPDP billing units is also not the quantity required to submit a claim under CMS own billing guidelines, and therefore is also not a field that would reasonably be used when cross- referenced claims information. Therefore, a different data repository would need to be cross- referenced to provide the applicable quantity information. Further, the claim line number is a field only found within a filed and submitted claim under medical billing procedures. In many cases medical claims are submitted several weeks after the patient has been discharged or otherwise received his or her care. Requiring this field would serve require the TPA to review the claims processing data in its entirety, which would be present in yet another data repository. Ultimately, this field would only delay the ability of the hospital to receive a rebate. Onvida Health maintains records of 340B related transactions in a readily retrievable and auditable format for a period of 3 years located within our TPA software and/or our own drives. In terms of Onvia Healths data, all data files undergo multiple rounds of accuracy testing upon creation and prior to production. Monthly audits occur to validate accuracy and integrity of records qualified as 340B eligible. Yearly recertification audits occur as well as periodic third-party HRSA like audits. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Onvida Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Onvida Health estimates an annual increase in upfront costs of $6,000,000 related to purchasing the 2026 and 2027 IRA drugs at WAC prices. With the manufacturers ongoing opposition to the entire 340B program, there is no reason to believe that rebates will be routinely paid in 10 days. Moreover, most facilities will not be able to submit claims daily due to limited staff, resources and the manner in which operations function. Onvida Health is currently only able to submit medical claims to ESP every 30 to 45 days, which would impose up to a two-month lag on price adjustments given the same submission frequency on the Beacon/Rebate platform. This will not just be a 10 day float for the drug manufactures, it will result is significant upfront cost increases and cash flow challenges for covered entities. The Honorable Thomas J. Engels Onvida Health Comments Regarding Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Page 5 Additionally, manufacturers do not understand, or refuse to understand, that covered entities are required to carry inventory in excess of product dispensed to actually provide patient care. ESP currently turns off 340B pricing if/when purchases exceed dispensation records and it takes months for pricing to be restored. Covered Entities will have to carry inventory costs at WAC pricing until dispensation records allow for incremental rebates to be paid out. 340B Program Integrity. From the covered entity perspective, the rebate model will decrease pricing transparency because of the unknown final price a covered entity will pay for an item. Will the manufacturers approve the claim and issue a rebate? Will the manufacturer deny the claim leaving the covered entity with the WAC price? In short, manufacturers will benefit from denials, and covered entities expect denial rates to be high based on our past experiences with ESP claim submissions To facilitate some transparency under a rebate program, manufacturers should be required to submit data monthly in at least two categories - new claims and previously denied claims. For new claims, information should include total count of new claims submitted by covered entities, the percent approved and the percent denied. For previously denied claims, information should include the total count of previously denied claims resubmitted by covered entities, the percent approved and the precent denied. The reason for a denial has to be specific. For example, manufacturers may understate the number of claims denied by labeling records as "non- conforming" preventing the "non-conforming" claim from being included in the denials. Covered entities could also report the same information to HRSA on a monthly basis to flag manufacturers with high denial rates. HRSA should publish manufacturer denial rates (as reported by the manufacturer versus as reported by covered entities. Without a truly independent third party managing the 340B claim submission and approval process, the rebate model gives control of the 340B program to drug manufacturers. Past experiences with ESP have shown that the manufacturers make their own rules and ESP enforces the manufacturers rules. The Beacon platform will operate the same as ESP, and will take direction directly from manufacturers, unless something is done. Creation of an independent third party will be necessary to prevent manufacturers from denying claims at will. Without that, manufactures can deny claims for any number of invalid reasons, for example claiming special character's in the health plan field or claim that a dispensation record is a duplicate. Efforts To Avoid 340B/MDPNP Duplicate Discounts. Manufacturers have claimed high diversion and improper claims, but the HRSA audits completed in the past do not support these claims. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Onvida Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, The Honorable Thomas J. Engels Onvida Health Comments Regarding Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Page 6 we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, Onvida Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. The rebate model will inevitably reduce the 340B benefit leading to less resources to provide necessary services and less ability to absorb the uncompensated care provided to patients in the community. For uncompensated care in particular, any reduction in cost savings from the 340B program will greatly impact our ability to absorb this important and meaningful expense. Patients in our community will suffer in concrete ways from a rebate program. For all of these reasons, Onvida Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Onvida Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, JC Lovelace Vice President, Chief Pharmacy Officer Onvida Health Yuma Medical Center
HRSA-2026-0001-1815Miami Beach Community Health Center, INC2026-04-20T04:00Z44,909 chars
See attached file(s) 11645 Biscayne Boulevard, Suite 207 Miami, FL 33181 305.538.8835 305.892.6625 Fax www.mbchc.org BOARD OFFICERS Mitchell Rubinson, Chair Therese Gibb, Vice Chair Beverly J. Penzell, Secretary Barbara Lambert, EA, Treasurer BOARD OF DIRECTORS Guadalupe Castillo David Chamberlain, CLU, ChFC Luis Fernandez David M. Gersten, Esq. Pete A. Gutierrez, MD, MMS, PA-C David Massey, Esq. Jose David Suarez, MD ADVISORY COMMITTEE Melvin Deutsch, DC Jane Dee Gross Mona Green Saul Gross, Esq. Kaisa Levine Jeffrey Mandell EXECUTIVE STAFF Mark L. Rabinowitz, MD, FACOG Chief Executive Officer Chief Medical Officer Sorangely Menjivar, RN, MSN Chief Operating Officer Chief of Patient Services Johann Torres, MD Chief Medical Information Officer Alan P. Layng Chief Financial Officer Dennis Cadiz Chief Information Officer Interim Compliance Officer LOCATIONS Stanley C. Myers Health Center 710 Alton Road Miami Beach, FL 33139 Beverly Press Health Center 1221 71stStreet Miami Beach, FL 33141 Miami Beach Community Health Center North 11645 Biscayne Boulevard Miami, FL 33181 April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Miami Beach Community Health Center, Inc. (MBCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: MBCHC projects an estimated loss of revenue of $2.5M from its pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. MBCHC is a fully integrated ambulatory care medical facility which has been providing primary health care in Miami-Dade County since 1977. MBCHC is Joint Commission accredited for ambulatory care and laboratory services and certified as a Primary Care Medical Home. The National Committee for Quality Assurance (NCQA) has certified MBCHC at the highest level as a Patient-Centered Medical Home. MBCHC is URAC accredited for specialty pharmacy. In 2025 the Health Resources and Services Administration (HRSA) awarded MBCHC National Quality Leader for Heart Health, Cancer Screening, and Behavioral Health for making notable achievements in clinical quality, access, health outcomes, and health information technology. MBCHC provided services to 47,516 unduplicated patients in 2025, 20.4% of whom were covered by Medicaid, 30.1% were uninsured, and 95.4% had incomes 200% or less of the Federal Poverty Level. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MBCHC in particular, this means it will impact: 149,815 340B transactions / 47,516 unduplicated patients The centers ability to operate. In 2025, MBCHC had a net income of $1.65M. Pharmacy revenue, including 340B savings is used to fund patient care that annually operates at a loss. Without the $12.9M in net income from pharmacy operations, MBCHC would incur an operating loss of approximately $11.25M. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with 2 studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MBCHC provided $13.87M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MBCHC anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 4 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 MBCHC estimates needing an additional 0.5 FTE to report 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. MBCHC estimates the increased upfront annual drug spending due to the 340B rebate model will be $8.2M (year 1), $9.3M (year 2), and $12.7 (year 3). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. MBCHC estimates 20 hours per week will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Miami Beach Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. MBCHC estimates approximately $35,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 16 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with five pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 53 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in south Florida (Miami-Dade and Broward counties) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 6 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. MBCHC purchases medications at the 340B price and dispenses them to patients at a discount based on their sliding fee scale classification, thereby making the drugs more affordable. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 7 order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ 8,204,151 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $ 19,969 to purchase these same drugs at the 340B ceiling price. This represents a 41,084% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Miami Beach Community Health Center may need to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we may be forced to scale back non-revenue-generating but essential services. Operating Hours: We may need to reduce our clinic hours. Workforce & Staffing: The administrative burden of this pilot may require us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other staff. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 14,309 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 9 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Miami Beach Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Miami Beach Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 1,248,594 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Miami Beach Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 683,679. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves and request a huge credit line increase. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Miami Beach Community Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Miami Beach Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous 10 reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $ 1,248,594 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 12 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Miami Beach Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Miami Beach Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Miami Beach Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mr. Ray Sawaged, Vice President, Pharmacy Services at rays@mbchc.com. Sincerely, Mark L. Rabinowitz, MD, FACOG Chief Executive Officer and Chief Medical Officer 13
HRSA-2026-0001-1816Heartland Community Health Center2026-04-20T04:00Z124,594 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Heartland Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Heartland Community Health Center anticipates an average loss of $801,378,22 from entity-owned pharmacy operations and 4% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Heartland Community Health Center in particular, this could lead to: Decreased ability to continue to provide over 20,000 prescriptions at a 340B sliding fee scale discount saving patients over $6.7 million. Require an estimated increase in annual costs of over $1.8 million and the addition of at least 2 FTE to manage the increased complexity and significant administrative burden of a 340B rebate model. Decrease our ability to provide robust wrap around services to our patients that connect them to life saving resources or increase needed behavioral health services through expansion of providers and dedicated space to provide those services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance uses and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Heartland Community Health Center provided $10,586,801 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Heartland Community Health Center anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Heartland Community Health Center anticipates an increase of $4000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Heartland Community Health Center estimates needing to add 2 FTE to meet the increased workload demands associated with 340B rebate claims resulting in an estimated cost increase of $126,885.20. We have already had to increase our workforce by 1 FTE just to support the Maximum Fair Price (MFP) rebate program due to the complexity of the system. These are some of the administrative burdens that have been added just from the current MFP rebate program: o In order to determine the status of a claim and whether the MFP rebate was effectuated correctly we need to access four different data management systems. All four systems have different data and there is considerable lag time for claim status updates between systems. When a good faith inquiry (GFI) is needed to dispute a lack of rebate payment a fifth system is required unilaterally by the manufacturer. As part of the GFI the manufacturer requires claims data not 7 Internal NACHC assessment (99 responses). 6 related to MFP or Medicare claims to be submitted in order for a rebate to be processed even though they have access to our purchasing data and can see that WAC purchases have been made for the drug that is part of the GFI. If a 340B rebate model was allowed to be implemented, based on previous manufacturer plans, we would likely need to incorporate a sixth system into an already arduous, time consuming, and complex process. o Claims tracking due to rebate denials and inaccuracy in manufacturer effectuation of the MFP rebate can be a lengthy process. We have claims we have not received the required rebate from January 2026 due to the drawn out GFI process and lag time as the claims move back and forth from the Medicare Transaction Facilitator (MTF) and the manufacturers preferred rebate vendor, Beacon. o When support is needed to facilitate GFIs and claims evaluation, Beacon, the manufacturers chosen vendor is often not able to provide support in a timely manner or has the capability to assist with claim errors occurring in the Beacon platform. This requires additional staff time to continually follow-up with Beacon support staff when identified issues are not resolved in a timely manner and there is a lack of communication on next steps or updates received from Beacon. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. If all MFP drugs in 2026 and 2027 were part of a 340B rebate model pilot program Heartland Community Health Center anticipates an increase in annual costs of over $1.8 million. This anticipated cost increase is due to the following: o Increase in the upfront cost of purchasing and keeping these 340B rebate drugs in stock. This increase in overall acquisition cost will decrease the amount of inventory the health center is able to keep on hand which could disrupt timely access for patients to these life-saving medications. o Increased carrying costs associated with purchasing these 340B rebate drugs at WAC and being reimbursed at a lower rate (i.e., MFP price or a self-pay sliding fee discount price). In order for the health center to continue to provide these medications to patients with a 340B sliding fee scale discount to ensure affordability the health center must carry the WAC cost of the drug until a rebate is received from the manufacturer. On average it has taken 19 days for the health center to receive MFP rebates that did not require a GFI and an average of 60 days when a GFI was required. If HRSA allows a 340B rebate program to be implemented our health center may no longer be capable of affording the financial burden of these carrying costs. o Increased labor costs in our pharmacy due to the increased complexity of the 340B program. Our current pharmacy management software would require several specialized workflows to facilitate implementing a 340B rebate model while still maintaining compliance with Medicaid fee for service billing and providing a 8 Ibid. 7 sliding fee scale discount to our patients. Many of these workflows would require our pharmacy management software vendor to spend time and financial resources on 340B rebate model integrations, which is a process we do not have any control over as a covered entity. Regardless of the updates provided by the software vendor, this added level of complexity will require at least 1 additional FTE to assist front line pharmacy staff with new manual processes required along with integrations to facilitate this 340B rebate pilot. o Financial losses resulting from the health center not receiving a 340B rebate on a drug purchased at WAC. This could occur for drugs purchased that end up expiring prior to being dispensed or due to manufacturer denied rebates. Manufacturers are currently only effectuating the MFP price correctly on 25% of our health centers claims and require you to navigate numerous procedural requirements to dispute a lack of rebate with no required timetable from CMS to complete a GFI process. A 340B rebate model would also deny the health center the wholesaler discounts available to us in our contracts further driving up the acquisition cost of 340B rebate drugs. Depending on the volume of prescriptions a pharmacy fills for the MFP 2026 and 2027 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Heartland Community Health Center anticipates at least 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Heartland Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 8 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. o In order to stay compliant with Kansas Medicaid Fee-For-Service 340B billing requirements we need our pharmacy management software vendor to implement an integration that would allow for the 340B price to be accessible for billing. This is currently an integration that is not operational and it is unknown if or when it would be available to us. Without this integration an arduous and time consuming manual process would need to be developed to ensure that 340B pricing is updated quarterly and compliance is maintained. If the 340B rebate pilot was expanded to all drugs, which could be over 20,000 unique entries, a manual process for price updates would be unmanageable and impossible to maintain. o Our pharmacy would be required to operate a complex inventory management process to assist in handling inventory purchased prior to the rebate model with an up-front 340B discount. o Kansas pharmacies are required by law to provide comprehensive pharmacy services, and maintaining an appropriate on hand inventory ensures compliance with that regulation. As a result, pharmacies typically purchase inventory in advance of a prescription to ensure patients have timely access to their medications. This creates challenges with managing a rebate model because each invoiced drug does not align 1:1 with an exact prescription. Rebate models do not align with real time pharmacy services or direct patient care as they are not able to adapt to the immediate needs of the patient causing the pharmacy to shoulder increased administrative burden and financial loss to continue to provide high quality patient care. The 340B program needs to remain an up-front discount and a neutral clearinghouse model should be used to prevent duplicate discounts on the back end. o Due to the uncertainty of rebate effectuation potential rebate payments are not able to be accounted for in our pharmacy management softwares financial reporting. This will require our finance department to create and maintain additional 340B rebate financial reporting again, adding unnecessary administrative burden. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage pharmacy billing and pharmacy operations will be forced to spend at least 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 15 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. 9 Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 15 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. In 2025 Heartland Community Health Center had 1690 patients that relied on up front 340B sliding fee scale discounts to afford their prescriptions. Our pharmacy filled 20,079 prescriptions using the 340B sliding fee scale discount resulting in over $6.7 million in savings for our patients. The 340B rebate model threatens our ability to provide these upfront 340B sliding fee scale discounts if we are unable to maintain the increased financial burdens of purchasing these medications at WAC and waiting to receive a rebate. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,591,167.02 to purchase these MFP 2026 and 2027 drugs under the proposed rebate model. Currently, our organization spends $217,954,43 to purchase these same drugs at the 340B ceiling price. This represents a 630% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Heartland Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back low-revenue-generating but essential services, such as increasing community access to behavioral health providers. Many of our patients are currently accessing therapy services for only $10 utilizing our sliding fee scale discount. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker directly increasing wait times for linking patients with necessary resources. Some of the resources are community health workers currently assist patients with are: o Access to food. o Transportation to health care appointments. o Navigating insurance eligibility, grant funding, and local funding sources to assist patients in affording healthcare costs associated with acute and chronic health conditions. o Connecting underserved patients in our community to needed dental, primary care, and behavioral health services at our health center through outreach. o Assisting families access needed early childhood development resources. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5537 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications 13 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Heartland Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Heartland Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $737,935.62. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Heartland Community Health Center estimates that purchasing the MFP 2026 and 2027 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $114,434.38. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; If our financial reserves are tied up with the carrying costs of the 340B rebate program we are unable to adapt to the needs of our community. A 2026 needs assessment conducted in our community indicated an aging population without access to specialized care and enhanced services delivered by internal medicine providers. To address those gaps in available healthcare we need the financial resources to fund the workforce and infrastructure to expand our services to include internal medicine. Forcing CHCs into debt to 14 maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Heartland Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Heartland Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the MFP 2026 and 2027 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $ 205,981.89. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 15 financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 16 demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 17 Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 18 conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 19 CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 23 Internal NACHC survey data 20 VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but 21 also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 22 and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts 28 42 U.S.C. 256b(a)(1) 29 Id. 23 The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 24 would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. 35 See 42 U.S.C 256b(a)(5)(A). 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 25 A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 26 Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 27 dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 28 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 45 32 C.F.R. 199.21(q)(2)(iii)(E) 29 manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 30 is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 31 to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 59 42 U.S.C. 256b(a)(5)(B) 32 which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 33 This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a 34 voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 35 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Heartland Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Heartland Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 36 Heartland Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brittany Wessels at bwessels@heartlandhealth.org] Sincerely, Julie Branstrom Heartland Community Health Center
HRSA-2026-0001-1817Jane Pauley Community Health Center2026-04-20T04:00Z19,860 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Jane Pauley Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Financial Losses: JPCHC anticipates a loss of roughly $730,000 in 2027 alone due to loss of drug costs and rebate denials. This number is projected to double in 2028. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For JPCHC, this means it will impact: Over 58,000 unique patients a year A significant increase in admin costs due to hiring of more staff to manage the program Change in free delivery services, food pantries, specialty medication programs, entire service lines, clinic locations in less-densely populated areas, etc. JPCHC commitment to absorb all fees for prescriptions filled for uninsured patients making vital drugs unaffordable for the most vulnerable. 2 We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. JPCHC estimates the cost of administering the Rebate Model will add 40-50% new staff/contract costs to the 340B Program, solely to monitor and follow up. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients 3 medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.1 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.2 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At JPCHC we do not charge any administrative fees to our uninsured patients that receive the 340B pricing. They are getting the medications at cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).3 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully 1 HRSA FAQ 2 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 3https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 4 request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Based on our organizations data, we estimate an increased upfront annual drug spend over 2.3 million to purchase these 10 drugs under the proposed rebate model for 2026 and an estimated 5.2 million increased upfront in 2027. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, JPCHC anticipates needing to reevaluate and/or reduce: Free medication delivery services Clinic absorbing all administrative fees on the uninsured 340B prescriptions Decrease in non-profitable service lines Possible site closures/consolidations Adjustments to our Specialty medication program a. Financial Impact of Rebate Denials and Delays JPCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.4 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of over 350K in 2026 alone. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 4 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 5 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. 6 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion JPCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult 7 decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. JPCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. JPCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Christy Davis (cdavis@janepauleychc.org). Sincerely, Marc Hackett, CEO Jane Pauley Community Health Center
HRSA-2026-0001-1818Mid-Atlantic Association of Community Health Centers2026-04-20T04:00Z20,571 chars
See attached file(s) 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Submitted via regulations.gov Dear Director Britton: On behalf of the nineteen Community Health Centers (CHCs) in Maryland and Delaware, and the more than 415,000 patients they serve, the Mid-Atlantic Association of Community Health Centers (MACHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, MACHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, MACHC explains: A. The importance of 340B savings to Maryland and Delaware health centers ability to provide high-quality, affordable primary care, behavioral health, and dental care to low-income and uninsured patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 B. How a rebate model will create massive cash flow, administrative, and other costs for CHCs, imperiling financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely, resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why, if the agency insists on doing so, CHCs must be exempted due to heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024, health centers served over 32 million patients, 90% of whom had incomes at or below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. Savings from the 340B Program are essential to CHCs financial stability and ability to provide services at affordable rates to low-income and uninsured patients. Consistent with federal law3 and regulation4 CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they serve. 340B savings not only reduce the cost of medication for many patients but also serve as a critical funding source that underwrites many of the services CHC patients rely on. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes toward expanding access, these reductions in savings will directly lead to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications but also the broader system of care that CHCs have built to meet patients needs. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that the upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 and 500 times the current cost. Simply requiring manufacturers to pay rebate claims within 10 days does NOT protect CHCs from these cash flow strains. This 10-day turnaround addresses only one step in a multi-step financing process. Other steps, like waiting for drugs to be dispensed and meeting wholesaler payment deadlines, will still force CHCs to borrow substantial amounts of cash. Comments submitted by Maryland and Delaware CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. The financial strains that health centers experience, including uncertainty around federal grant funding and low or negative margins, are well known. As a result, any creditor willing to lend will charge above-average rates, and many may seek to place liens on owned buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose current non-340B discounts, which lower total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (since CHCs will be incentivized to minimize inventory to reduce cash flow strains), and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug thatduring the normal and appropriate course of businessare not dispensed or administered to a patient due to being expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price for undispensed units, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely, resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for medically underserved patients. Thus, every time 340B savings are reducedwhich would 4 clearly occur under a rebate modelCHCs are forced to scale back services on which patients depend. The impacts will extend far beyond affordable medication pricing to all the types of services underwritten by 340B savings, as described in Section A. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall, many CHCs reluctantly decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmaciesincluding both Walgreens and Walmartannounced publicly that they would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies and are therefore the most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to be affordable for low-income patients. As discussed above, some CHCs and/or contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing drugs under 340B expect to be forced to offer smaller discounts to patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions in 340B savings in recent years, leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating the impact a rebate model will have on operations and patient access. These claims ignore the financial realities CHCs have faced, including, but not limited to, managing 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, due to CHCs being the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices, like lifting the AMP cap on Medicaid rebates, have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to base grants in over a decade. Given these pressures, it is not surprising that health centers are in dire financial straits. D. CHCs must be exempted from any rebate model due to heightened vulnerability to the pressures it would create. 5 The concerns described aboveavoidable cash flow demands, administrative burdens, reductions in services, harm to patientsapply to a degree to all 340B CEs, and therefore the association strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize a majority of 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all the categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, health centers will be most impacted when pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers' rebate plans. While the association strongly encourages HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way toward mitigating the ongoing cash flow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cash flow issues by giving CHCs enough time to receive all rebates for the first package/month before needing to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. The association appreciated that last summers 6 FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, failing to account for most of the rebate-related costs that CHCs will face. Thus, MACHC urges HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. The association recommends that costs be billed and reimbursement provided on a monthly basis. To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug thatduring the normal and appropriate course of businessare not dispensed to a patient due to being expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B with proper documentation, but the proposed January 2026 pilot contained no mechanism for health centers to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units, causing CHCs costs to skyrocket and effectively transfer 340B savings back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cash flow demands and interest costs for CHCs, as it will significantly accelerate the receipt of rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that BIN/PCN data is not needed to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreensa major contact pharmacy for CHCs in many parts of the countrydoes not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate 7 model. HRSA should establish standardized procedures and timeframes for these issues and require manufacturers to comply. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose extreme cash flow demands and administrative burdens on CEs. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of the nations primary care safety netand the ability of its 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. MACHC appreciates HRSAs commitment to a transparent process and trusts the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 8 Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Delaney McGonegal at dmcgonegal@machc.com. Sincerely, Delaney McGonegal Director, Health Policy & Analytics Mid-Atlantic Association of Community Health Centers 9 Attachment Costs incurred by CHCs as a direct result of the rebate pilot, which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. This may also lead to higher fees from contract pharmacies. IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of the 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesalers or other creditors) Time and effort from CHCs financial staff, including: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1819CHI St. Luke's Health Memorial Medical Center of East Texas2026-04-20T04:00Z6,615 chars
See attached file(s) CommonSpint April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Luke's Health Memorial Medical Center of East Texas, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. CHI St. Luke's Health Memorial Medical Center of East Texas is a 271 bed hospital located in East Texas and primarily serves Polk and Angelina Counties. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St. Luke's Health Memorial Medical Center of East Texas that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Luke's Health Memorial Medical Center of East Texas relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under- Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 insured patients in our facility. The 340B prescription drug program is a vital lifeline for safety-net providers, supporting critical health services in our Communities. The program is narrowly tailored to reach only hospitals that provide a high level of services to low-income individuals or that serve isolated rural communities. Savings from the 340B program help hospitals meet the healthcare needs of underserved patients across the country. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Eric Robinson President Memorial Medical Center Lufkin Market VP of Operations CHI St. Luke's Health Memorial Medical Center of East Texas Lufkin, TX + CommonSpInt ' As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1820Tampa General Hospital - Tampa, FL2026-04-20T04:00Z9,830 chars
See attached file(s) - Tampa General Hospital - HRSA-2026-03042 Tampa General Hospitat, Comment Letter - 340B Rebate Model Pilot Program The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information - 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, On behalf of Tampa General Hospital in Tampa, Florida, we appreciate the opportunity to provide comments regarding the Department of Health and Human Services' Request for Information concerning a potential 340B Rebate Model Pilot Program. Tampa General Hospital (TGH) strongly urges HRSA not to implement a rebate-based model within the 340B Program. The existing upfront discount structure has enabled covered entities to stretch scarce federal resources and expand access to care for vulnerable populations for more than three decades. Transitioning to a rebate-based system would impose substantial financial burdens, operational complexity, and compliance risks on covered entities while providing no meaningful benefit to patients or program integrity. Tampa General Hospital, with nearly 1,000 licensed beds, is one of the most comprehensive medical facilities in Florida, serving more than a dozen counties and a population exceeding 4 million people. TGH is the area's only Levell trauma center, the largest area safety-net hospital, a major transplant center, and the primary academic teaching hospital for the USF Health Morsani College of Medicine. TGH also provided more than $289 million in community benefit during the last federal reporting period, underscoring the extent to which 340B savings support our programs and services focused on vulnerable patients across our region. The proposed rebate model would fundamentally alter the operational structure of the 340B program and undermine its statutory purpose. Administrative and Operational Burden & Adverse Impact to Healthcare Affordability The rebate model would impose significant administrative and operational burdens on covered entities such as Tampa General Hospital. Hospitals participating in the 340B program have built their operational infrastructure around the existing point-of-sale discount model. A rebate-based structure would require hospitals to establish entirely new processes to identify rebate-eligible claims, submit rebate requests to manufacturers, reconcile rebate payments, investigate and dispute denied rebate claims, maintain expanded data submission processes, and support additional audit and compliance activities. These new processes would require additional personnel, expanded technology infrastructure, new vendor relationships, staff training, legal review, and recurring compliance oversight. HRSA's estimate that covered entities would incur only minimal additional administrative burden significantly understates the operational realities associated with rebate-based reimbursement models, particularly for large academic health systems operating multiple pharmacies and mixed-use settings. TGH's annual administrative costs would increase by at least $250,000. IT implementation costs could reach $300,000, and ongoing systems cost would be more significant. 1 Significant Cash Flow Impact A rebate model would impose substantial financial strain on covered entities by requiring hospitals to purchase drugs at Wholesale Acquisition Cost (WAC) and then wait for reimbursement ofthe statutory 340B discount. For large health systems such as Tampa General Hospital, the capital required to temporarily finance these purchases would be significant. Based on expected utilization of drugs likely to be included in the pilot program, the required cash outlay to purchase these medications at WAC while awaiting rebate payments would exceed seven figures annually. This effectively forces covered not-for-profit entities, such as TGH, to provide interest-free financing to for- profit pharmaceutical manufacturers while waiting for discounts already guaranteed under federal statute. Data, Systems, and Platform Concerns The rebate model would require covered entities to provide substantially more detailed claims and utilization data to pharmaceutical manufacturers than is currently required under the 340B program. That means new interfaces, new files, new validation steps, and ongoing reconciliation work across multiple internal and external systems. Under a multi-manufacturer model, covered entities may be forced to work across different vendor portals, file formats, and terms and conditions. In the prior iteration ofthe rebate program, Beacon and related platform requirements created operational uncertainty, shifting data demands, and implementation concerns. For a health system like TGH, collecting complete data across in-house pharmacies, mixed-use settings, and medical claims workflows is not a simple extension of current operations and would require substantial manual work, IT support, and ongoing monitoring. Increased Risk of Rebate Denials and Disputes Under a rebate-based model, eligibility determinations for rebates would occur after the fact and be controlled by pharmaceutical manufacturers. This creates substantial risk that rebate claims may be delayed, denied, or disputed based on ongoing, and increasingly aggressive, manufacturer interpretation of eligibility criteria. Hospitals could face prolonged disputes while significant amounts of cash remain tied up in rebate claims with no clear, standardized, and timely dispute resolution process. Any model that makes covered entities wait for a statutory discount, and then defend eligibility after the fact, injects uncertainty directly into hospital operations and budgeting. Legal Authority and Program Design Concerns Expanded claims-level reporting requirements raise concerns regarding increased compliance complexity, operational cost, privacy and data security risk, and whether HRSA has statutory authority under 42 U.S.c. 256b to require covered entities to submit detailed claims data to manufacturers as a condition of receiving the statutory 340B discount. More fundamentally, HRSA should not treat this as a balancing exercise between covered entities and manufacturers. The purpose of the 340B program is to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism best serves that purpose. Existing Mechanisms Already Address Duplicate Discount Concerns Concerns raised by manufacturers regarding duplicate discounts can already be addressed through existing mechanisms. Covered entities currently rely on tools such as the Medicaid Exclusion File (MEF), claims processing controls, and Submission Clarification Codes (SCC codes) in pharmacy claims environments. These mechanisms are widely used and effective in preventing duplicate discounts within Medicaid and other payer environments. Implementing a rebate model when existing safeguards and less burdensome alternatives are available is unnecessary and would introduce avoidable administrative complexity. Impact on Patient Care and Community Services Tampa General Hospital relies on 340B savings to support critical programs and services for vulnerable patients and the surrounding community. These savings help fund care for uninsured and underinsured patients, medication access programs, specialty pharmacy services, trauma care, transplant services, pediatric specialty care, and other expanded 2 clinical services for underserved populations. Any reduction in the effectiveness of the 340B program would directly affect TGH's ability to sustain these services. That impact is especially significant given that TGH provides more than $289 million in community benefit and serves as a regional safety-net and academic referral center. Dollars consumed by avoidable rebate administration, denied claims, and delayed reimbursement are dollars that cannot be used to support patient care and community programs. Broader Policy Concerns and Reliance Interests Transitioning the 340B program from an upfront discount model to a rebate-based system represents a fundamental policy shift. Covered entities have reasonably designed their staffing, contracts, workflows, technology infrastructure, and financial planning around the program's long-standing upfront discount structure. Once the program moves away from point-of-sale discounts, it becomes easier to expand rebate requirements in the future, potentially altering the structure of the program itself. Many covered entities are concerned that such a transition could represent the first step toward fundamentally restructuring or weakening the 340B program. Conclusion For all of these reasons, Tampa General Hospital strongly opposes implementation of a 340B rebate model. The existing upfront discount mechanism has supported hospitals and vulnerable patients for decades and continues to function effectively. Instead, HRSA should preserve the current program structure and continue utilizing existing safeguards such as the Medicaid Exclusion File, claims processing controls, and other less burdensome alternatives to address any duplicate discount concerns. A rebate-based structure would introduce financial risk, administrative burden, and operational :~31;:OVid; ~:(~rients, providers, or program integrity. Steve Hand Vice President Reimbursement Tampa General Hospital P.O. Box 1289 Tampa, Florida 33601-1289 (813) 844-7000 www.tgh.org Primary teaching hospital for the USF Health Morsani College of Medicine 3
HRSA-2026-0001-1821Rush Memorial Hospital2026-04-20T04:00Z24,968 chars
See attached file(s) April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Rush Memorial Hospital, Rushville, Indiana, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Rush Memorial Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Rush Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Rush Memorial Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Rush Memorial Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Rush Memorial Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Rush Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In trying to anticipate the impact of the proposed rebate model, the financial impact is considerable. On the current 2026 10 drug proposal Rush Memorial would have to spend an additional $771,315 yearly at our current usage. We are always looking to increase access, so we anticipate that figure to grow. The rebates coming in a timely manner leaves an uneasiness in paying the wholesaler. Rush Memorial will have to divert extra staffing to audit the extra reconciliation for this model pilot. This could add an additional $40,000 to our staffing expense. Our IS infrastructure will have to be reconfigured to meet the new requirements for the model pilot. This reconfiguration could cost up to $10,000 as a one-time startup cost. In 2025, we have spent $156,850 in legal and compliance activities trying to prepare for what could happen in 2026. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Rush Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We are a Critical Access Hospital. Our IS Department will have to integrate with Beacon to start using the rebate model. This is not easy or cheap to do. The development could take our employees 20 hours in work and we have been quoted from $1,200 to $10,000 from our EHR to create the reports needed for submission. Waiting on the reports to come back from the EHR could take 60 to 90 days. Simplicity is needed for all CEs to do their best at preventing errors to the 340B program. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We currently have a pharmacist that audits internally and we have an external audit performed annually. We submit data to340B ESP. As stated above the changes needed to do the rebate model will not be easy, quick or cheap. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Rush Memorial Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We pay on the 1st and 15th of the month. There will be timing issues that will mean we will have to pay out more money and wait on the rebate. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Rush Memorial Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The savings from the 340B program have allowed Rush Memorial Hospital to continue to provide exceptional access to healthcare for all community members of Rush County and surrounding counties. Because we are a small rural Hospital, these are important to the community. We have been able to give charity care to qualifying patients of our hospital. We have decreased the cost of prescriptions to all patients from our hospital owned physician practices. These drugs are on our heart and diabetes listing. Through our retail pharmacy, we offer free delivery and reduced pricing on compliance packaging. The savings have also allowed us to continue to provide Behavioral and Mental Health services. The savings has allowed continuation of our Pediatrics office. The Hospital was also able to be a major supporter of the Community Center. This allows us to play an important part in educational opportunities at the Community Center. You can see how important this program is to Rush Memorial Hospital. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Rush Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In 2025, the hospital passed along the upfront savings to our patients. This program helped 349 patients save over $829,000 dollars, because we were able to have upfront 340B pricing. If we have to follow a rebate model, this program could be in jeopardy. The Hospital would have to float that money and hope the rebates come in a timely manner. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We are currently not completely enrolled with Beacon. Our legal counsel has determined that the language was not appropriate for a county owned hospital. This has lead to problems with the Terms and Conditions. This has also put a financial burden on the Hospital, as we now have more costs from obtaining legal advice. The more data and steps to submit that are implemented, the more opportunities it creates for errors to happen. A simplistic process for data submission and purchasing at 340B price, would be beneficial to all CEs. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Rush Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. We have not had any issues to date, with 340B/MDPNP deduplication. The Transaction Facilitator has been working and is part of our reconciliation process. We always use a conservative and simplistic approach to manage our processes. For all of these reasons, Rush Memorial Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Rush Memorial Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Gregory Pratt, R.Ph. Director of Pharmacy Rush Memorial Hospital 1300 N. Main Street Rushville, IN 46173 April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Rush Memorial Hospital, Rushville, Indiana, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Rush Memorial Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Rush Memorial Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Rush Memorial Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Rush Memorial Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Rush Memorial Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Rush Memorial Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In trying to anticipate the impact of the proposed rebate model, the financial impact is considerable. On the current 2026 10 drug proposal Rush Memorial would have to spend an additional $771,315 yearly at our current usage. We are always looking to increase access, so we anticipate that figure to grow. The rebates coming in a timely manner leaves an uneasiness in paying the wholesaler. Rush Memorial will have to divert extra staffing to audit the extra reconciliation for this model pilot. This could add an additional $40,000 to our staffing expense. Our IS infrastructure will have to be reconfigured to meet the new requirements for the model pilot. This reconfiguration could cost up to $10,000 as a one-time startup cost. In 2025, we have spent $156,850 in legal and compliance activities trying to prepare for what could happen in 2026. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Rush Memorial Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We are a Critical Access Hospital. Our IS Department will have to integrate with Beacon to start using the rebate model. This is not easy or cheap to do. The development could take our employees 20 hours in work and we have been quoted from $1,200 to $10,000 from our EHR to create the reports needed for submission. Waiting on the reports to come back from the EHR could take 60 to 90 days. Simplicity is needed for all CEs to do their best at preventing errors to the 340B program. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We currently have a pharmacist that audits internally and we have an external audit performed annually. We submit data to340B ESP. As stated above the changes needed to do the rebate model will not be easy, quick or cheap. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Rush Memorial Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We pay on the 1st and 15th of the month. There will be timing issues that will mean we will have to pay out more money and wait on the rebate. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Rush Memorial Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The savings from the 340B program have allowed Rush Memorial Hospital to continue to provide exceptional access to healthcare for all community members of Rush County and surrounding counties. Because we are a small rural Hospital, these are important to the community. We have been able to give charity care to qualifying patients of our hospital. We have decreased the cost of prescriptions to all patients from our hospital owned physician practices. These drugs are on our heart and diabetes listing. Through our retail pharmacy, we offer free delivery and reduced pricing on compliance packaging. The savings have also allowed us to continue to provide Behavioral and Mental Health services. The savings has allowed continuation of our Pediatrics office. The Hospital was also able to be a major supporter of the Community Center. This allows us to play an important part in educational opportunities at the Community Center. You can see how important this program is to Rush Memorial Hospital. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Rush Memorial Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In 2025, the hospital passed along the upfront savings to our patients. This program helped 349 patients save over $829,000 dollars, because we were able to have upfront 340B pricing. If we have to follow a rebate model, this program could be in jeopardy. The Hospital would have to float that money and hope the rebates come in a timely manner. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. We are currently not completely enrolled with Beacon. Our legal counsel has determined that the language was not appropriate for a county owned hospital. This has lead to problems with the Terms and Conditions. This has also put a financial burden on the Hospital, as we now have more costs from obtaining legal advice. The more data and steps to submit that are implemented, the more opportunities it creates for errors to happen. A simplistic process for data submission and purchasing at 340B price, would be beneficial to all CEs. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Rush Memorial Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. We have not had any issues to date, with 340B/MDPNP deduplication. The Transaction Facilitator has been working and is part of our reconciliation process. We always use a conservative and simplistic approach to manage our processes. For all of these reasons, Rush Memorial Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Rush Memorial Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Gregory Pratt, R.Ph. Director of Pharmacy Rush Memorial Hospital 1300 N. Main Street Rushville, IN 46173
HRSA-2026-0001-1822Open Door Community Health Centers2026-04-20T04:00Z11,332 chars
As a community health center serving a diverse and often medically underserved population, we appreciate the opportunity to provide comments on HHS Docket No. HRSA-2026-03042. Our organization strongly supports policies that expand access to affordable, comprehensive primary care and strengthen the capacity of safety-net providers. Community health centers play a critical role in delivering preventive services, chronic disease management, behavioral health care, and enabling services such as translation and transportation. Any regulatory or funding changes should recognize both the scope and complexity of this work. We encourage HRSA to prioritize the following: Sustainable and Predictable Funding Long-term, stable funding is essential for health centers to recruit and retain qualified staff, invest in infrastructure, and maintain continuity of care. Short-term or uncertain funding cycles create operational challenges that ultimately affect patient access. Workforce Support Workforce shortages; particularly in primary care, behavioral health, and dental services continue to impact our ability to meet community needs. Integrated Care Models Patients benefit most when physical health, behavioral health, and social services are coordinated. Policies should continue to support integrated, team-based care and reduce administrative barriers that limit care coordination. Health Equity and Social Determinants of Health Our patients face significant barriers related to housing, food security, transportation, and language access. We urge HRSA to continue advancing policies that allow health centers to address social determinants of health as part of comprehensive care delivery. Administrative Simplification Reducing reporting burden and streamlining compliance requirements would allow health centers to focus more resources on patient care rather than administrative tasks. Technology and Infrastructure Investment Continued support for health IT, telehealth, and data systems is essential to improving care quality, expanding access, and responding to public health needs. In addition, we are submitting an attached impact letter that outlines the specific effects this proposal would have on our health center, including operational, financial, and patient care implications. Based on our analysis, we respectfully request that Community Health Centers (CHCs) be excluded from the proposed rebate model. Applying a rebate structure to CHCs would introduce significant financial uncertainty and administrative burden, potentially reducing our ability to provide affordable medications and reinvest resources into patient care. Such impacts would be particularly harmful to the vulnerable populations we serve. We appreciate HRSAs ongoing commitment to community health centers and the patients we serve. Thoughtful implementation of this rule will help ensure that health centers can continue to deliver high-quality, equitable care to those who need it most. Thank you for your consideration. With much appreciation, Open Door Community Health Centers Arcata, California open door Community Health Centers ^<1 Administration, Finance, & Human Resources 1275 8'^ Street Areata, CA 95521 707-826-8633 April 15, 2025 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Areata Community Health Center 11 SO Foster Avenue Areata, CA 95521 707-826-8610 Burre Dental Center | Mobile Dental Services 959 Myrtle Avenue Eureka. CA 95501 707-442-7078 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Del Norte Community Health Center 550 East Washington Blvd., Ste.100 Crescent City. CA 95531 Medical 707-465-6925 Dental 707-465-4636 Dear Director Britton: On behalf of Open Door Community Health Centers, thank you for extending the comment deadline to April 20, 2026. This additional time has allowed our organization to more fully assess the operational and financial risks posed by the proposed 340B Rebate Model Pilot Program to Community Health Centers (CHCs). Eureka Community Health Center 2200 Tv/dd Street Eureka. CA 95501 707-441-1624 Pediatrics 707-269-7051 Q Ferndale Community Health Center 638 Main Street P.O. Box 1157 Ferndale. CA 95536 707-786-4028 The 340B program is foundational to CHCs' ability to serve low income, uninsured, and medically underserved patients. Shifting responsibility for 340B pricing from manufacturers to safety-net providers through a rebate model -represents- a fundamental change to a program that has functioned effectively for more than 30 years. Based on national assessments from NACHC, CHCs are already experiencing significant impacts from manufacturer restrictions, which the proposed pilot would compound: Fortuna Community Health Center 3304 Renner Drive Fortuna. CA 95540 707-725-4477 McKinleyville Community Health Center 1644 Central Avenue McKinleyville, CA 95519 707-839-3068 Financial Losses: CHCs are projected to incur average annual losses of at least $500,000, with potential losses reaching up to $1.6 million in entity- owned- pharmacy operations and $400,000-$1.5 million in contract pharmacy savings due to manual reconciliation requirements. Projected Cost Increases: A single mid-sized CHC is projected to incur more than $3 million in annual operating costs under a rebate model, o Rural Impact: Rural Health Centers invest approximately 25% of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth, making the rebate model particularly harmful to rural communities. Mobile Health Services | Telehealth & Visiting Specialists Center 2426 Buhne Street Eureka. CA 95501 707-443-4666 Plaza Community Health Center 770 10'*' Street Areata. CA 95521 707-630-5177 Redwood Community Health Center 2350 Buhne Street, Suite A Eureka, CA 95521 707-443-4593 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot is a direct threat to CHCs' mission and a significant departure from the original intent of the 340B Drug Pricing Program. Congress designed Willow Creek Community Health Center 38883 Highway 299 P.O. Box 726 Willow Creek, CA 95573 Medical 530-629-3111 Patients relying on: Direct oral anticoagulants (DOACs) (e.g., Xarelto and EUquis), SGLT2 inhibitors (e.g., Farxiga and Jardiance), Behavioral health medications included in the 2027 MDPNP list, and Insulin, required by federal mandate to be available at discounted rates, would face significant access barriers under a rebate model. In the case of insulin, the rebate structure directly conflicts with Executive Order #14273, as there is no operational method to provide discounted insulin at the point of care when drugs are purchased at WAG. Without upfront 340B pricing, CHCs cannot reliably offer sliding fee discounts as required by law. This model would create new barriers for uninsured patients and weaken the safety-net- that millions depend on for affordable medications. III. Administrative Complexities and Financial Challenges for CHCs The proposed pilot would impose significant new administrative and IT burdens on CHCs, duplicating existing compliance systems without corresponding benefits. CHCs would need to manage: Multiple manufacturer data submission standards, Non-standardized- timelines for rebate reconciliation, Dispute resolution processes for denied rebates, and Increased staffing and vendor support to maintain compliance. Operational & Administrative Cost Impacts Open Door Community Health Centers estimates: $177,000 in sliding fee discounts provided in 2025 may be reduced in 2026 Two additional FTEs required, increasing costs by $264,000 annually $25,000 annually in additional vendor costs 92 hours per month required solely for rebate reporting activities These costs divert resources away from patient care and strain already limited operational capacity. A. Financial Challenges Purchasing drugs at full WAC fundamentally disrupts CHC cash flow and creates extended reimbursement delaysoften 40-85 days from purchase to rebate receipt. During this period, CHCs must carry the full cost of inventory, risking credit limit exhaustion and loss of supplier access. For Open Door Community Health Centers, this would mean: Drug purchases forthe selected MDPNP drugs would increase from 340B Pricing of $50,000 to WAC pricing of $5.7 million in 2026 with an annual interest rate fee of $362,000 The proposed drug list for 2027 will increase upfront WAC costs to $11.6 million The proposed drug list for 2028 will increase upfront WAC costs to $14.3 million These costs are unsustainable and would necessitate reductions in clinical services, clinic hours, clinical staffing, and patient financial assistance programs. As one of the largest employers and health care providers in our community, any reduction in workforce or services would be highly detrimental to patient access to care and the stability of our local rural economy. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based- model, strict safeguards are essential. These must include: Uniform national standards, Transparent and limited denial criteria, Enforceable payment timelines for both initial and corrected rebates, Manufacturer accountability, and A neutral dispute resolution framework. Without these protections, the rebate model effectively becomes an interest free loan from safety-net- providers to manufacturers. V. Existing CHC Compliance Actions CHCs are already highly regulated and subject to extensive oversight, including: Section 330 sliding fee- requirements, 340B eligibility and audit standards, Operational Site Visits, and Annual UDS reporting. CHCs are not the source of misuse in the 340B program. They are established models of compliance, and a rebate model would impose disproportionate harm on providers that already meet rigorous regulatory requirements. VI. Establishing a National, Neutral Claims Clearinghouse We strongly recommend HRSA pursue a Neutral Claims Clearinghouse (NCC) as a more effective alternative. An NCC would; Preserve upfront 340B discounts, Reduce administrative burden, Improve rebate accuracy, Prevent duplicate discounts, and Protect patient access to care. Conclusion Open Door Community Health Centers strongly urges HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot Program. A rebate-based approach reverses the intent of the 340B statute, destabilizes safety-net providers, and creates significant barriers to medication access for vulnerable patients. For Open Door alone, the pilot would result in a minimum loss of $7.2 million in annual 340B savings, resources that are essential to sustaining patient services and affordability. We respectfully request that HRSA reconsider this approach and adopt solutions that preserve the integrity, intent, and effectiveness of the 340B program. Thankyou forthe opportunity to submit comments. Forquestions, don't hesitate to get in touch with me at tstarr@opendoorhealth.com or Adriana Campbell, 340B Program Manager at adcampbell@opendoorhealth.com Sincerely, ToryStarr, MSN, PHN, RN President & Executive Officer Open Door Community Health Centers
HRSA-2026-0001-1823Sun Life Health2026-04-20T04:00Z44,813 chars
Thank you for allowing us to submit comments as a part of this RFI. We greatly appreciate the opportunity to give feedback. P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 04/20/2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Sun Life Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Since 2022, Sun Life Health has lost over $3 million in net revenue due to contract pharmacy losses. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. In 1976, Sun Life Health started with one small office in Pinal County, staffed with one full-time and one part-time physician providing 12,000 patient visits per year. Today, as a non-profit Federally-Qualified Community Health Center, Sun Life Health serves over 50,000 patients, 30 percent of whom are children. Sun Life Health focuses on preventative health care services providing Primary Care, Ob/Gyn, Pediatrics, Pharmacy, General and Pediatric Dentistry, Orthodontics and Integrated Behavioral health care to Casa Grande, Chandler, Coolidge, Eloy, Florence, Maricopa, Mesa, and Oracle. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Sun Life Health in particular, this means it will impact: Greater than 50,000 patients annually P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 Place additional strain on our already taxed pharmacy compliance staff Threaten patient-centered programs that 340B savings are attributed to We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life- sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. 4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national- surveydrug-use-and-health/national-releases P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Sun Life Health provided eligible patients with sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Sun Life Health anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Sun Life Health anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Sun Life Health anticipates needing an extra 1-2 FTE to manage the pharmacy compliance side of the model as well as the financial accounting and reconciliation side of the model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Sun Life Health anticipate over $400,000 in costs needed to successfully carry out the rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Sun Life Health will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Sun Life Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. A minimum of $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 50,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at over $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We run off of eClinicalWorks and Liberty Pharmacy Management System. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Each instance of a custom integration can cost the organization over $10,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. 7 Internal NACHC assessment (99 responses). 8 Ibid. P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Pinal County, Arizona with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Sun Life Health utilizes a sliding fee formula based on the actual acquisition cost of drugs in order to ensure that patients can afford their healthcare. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost over $250,000 to purchase these 10 drugs under the proposed rebate model. The up front cost to carry this rebate pilot is much higher than the actual cost to purchase the drugs at the 340B price. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Sun Life Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as pharmacy services at more rural locations, and ancillary services that our patients utilize that do not get reimbursed at the same rate as other FQHC services. Operating Hours: We anticipate needing to reduce our clinic hours by 10 hours per week, possibly reducing weekend hours in our most rural locations. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund our patient health educators or other clinical staff. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Sun Life Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Sun Life Heatlh estimates its 2027 Annual Rebate Opportunity Cost to be approximately $100,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Sun Life Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $250,000. The situation becomes even more dire as we add the 2027 and 2028 list of drugs in a time where our narrow margins are already tight. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to further deplete cash reserves, which will have a major impact to our organization. Another possibility would be opening lines of credit in order to cover the burden of purchasing drugs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Sun Life Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Sun Life Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $200,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot- program P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. P.O. Box 10097 Casa Grande, AZ 85130 Phone: 520-836-3446 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Sun Life Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Sun Life Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Sun Life Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Matthew Bertsch at matthew.bertsch@slfhc.org. Sincerely, Matthew Bertsch, PharmD, MHA Director of Pharmacy/Education Sun Life Health
HRSA-2026-0001-1824(no commenter metadata)2026-04-20T04:00Z5,454 chars
See attached file(s) Board of Directors NoerniGalvn Eling, Esq., Chair Heriberto (Berto) Guerra, Jr., 1st Vice Chair Rudy Per1a, Treasurer Elsa Martinez, Secretary Lorraine Alaniz April 20, 2026 Luz Cano Juan A. Chavira, PhD, JD Elsa Gamboa Norma L. Green Gutierrez, MBA Melinda Perez Richard Perez, MPA Nicolas Rangel, CPA Diana M. Torres Arlene Williams-Brown Centro Med Chantelle Britton Director Office of PharmacyAffairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Ernesto G6mez, PhD President& CEO CentroMed Sites Berto Guerra Jr. Clinic Elder Care Center Family First Clinic Family Medicine La Paloma Clinic Lifetime Recovery Clinic Maria Castro Flores Clinic NoemiGalvan Eling Clinic Palo Alto Clinic SA Pediatrics Cibolo SA Pediatrics County Line SA Pediatrics M&S Tower SA Pediatrics Medical Center SA Pediatrics Santa Rosa SA Pediatrics Sorrento Plaza SA Pediatrics Southeast SA Pediatrics Southwest SA Pediatrics Stone Oak SA Pediatrics Tri-County/Schertz Santa Rosa Pavilion Clinic Sarah E. Davidson Clinic South Park Dental South Park Medical South Park Pharmacy Southside Medical WIC on SW Military WIC on Walzem Centro Fitness Sites Health & Wellness Center John L. Santikos Wellness Center RE: Request for Information: 340B Rebate Model Pilot Program (H RSA-2026-03042) Dear Director Britton, On behalf of El Centro del Barrio dba CentroMed, thank you for the opportunity to comment on HRSA's proposed 340B Rebate Model Pilot. The 340B program is essential to CentroMed's ability to serve low-income and medically vulnerable patients in South Texas. CentroMed has served our community for more than 50 years and currently operates 24 clinical sites across Bexar, Comal, and Guadalupe Counties. We provide comprehensive medical, dental, behavioral health, pharmacy, WIC, and eligibility services, including dedicated care for individuals experiencing homelessness and patients living with HIV/AIDS as a Ryan White grantee. In 2025, CentroMed served 110,790 unduplicated patients across 364,760 visits. Our patients are predominantly low-income and medically complex: 92.7% had incomes at or below 200% of the Federal Poverty Level 21.6% were uninsured Nearly half relied on Medicaid or CHIP High prevalence of chronic conditions, including obesity, hypertension, and diabetes Com, .;* 3750 Commercial Ave. I San Antonio, TX 78221 I 210-334-3700 I Fax 210-922-0162 CentroMedSA.com importance of 340B to CentroMed 340B program savings are a critical source of support for CentroMed's operations and patient services. These savings allow us to: Provide more than $10.8 million in sliding-fee discounts for medications and medical services. Operational and Financial impact of the Rebate Model The proposed rebate model would significantly increase administrative complexity and create serious financial risk for CentroMed. In 2025, CentroMed processed more than 90,700 340B transactions, supported by: 11 pharmacy FTEs and 1 accounting FTE Annual labor costs of $958,777 Third-party administrator and contract pharmacy fees totaling $2,033,024 Consulting expenses of $27,750 Under the rebate model, CentroMed anticipates needing at least one additional FTE to manage rebate auditing and reporting, at an estimated annual cost of $70,000. More critically, the rebate model would require CentroMed to purchase drugs at wholesale acquisition cost (WAC) and wait for manufacturer reimbursement. For just 10 selected drugs, this would increase upfront purchasing costs from $261,872 at 340B prices to $2,980,703 at WACa 1,038% increase in upfront capital requirements. Even with a conservative10% rebate denial rate, CentroMed estimates an annual net loss of $300,000. In addition, purchasing at WAC would risk exceeding wholesaler credit limits, potentially disrupting medication access altogether. Financing drug purchases through loans or credit lines would divert scarce patient-care dollars toward interest and fees, undermining the intent of the 340B program. Patient and Workforce impact The drugs included in the proposed model primarily treat chronic conditions common in community health center populations. Delays or disruptions in access to these medications would disproportionately harm low-income patients who rely on affordable, timely treatment. The administrative burden of a rebate model would also shift limited staff resources away from patient care and toward complex compliance and reconciliation activities. Conclusion CentroMed strongly urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. A rebate model represents a significant departure from Congress's intent for 340B to allow covered entities to "stretch scarce federal resources." Rather than improving accountability, this approach would create cash-flow instability, increase administrative burden, and threaten patient access to essential medications. CentroMed appreciates the opportunity to provide input on this RFI and welcomes continued engagement with HRSA on policies that protect the 340B program and the patients it serves. If you have questions, please contact Margarita Seaman, MHA, Vice President and Chief Strategy Officer, at HI , ,% (1`, k I: Sincerely, Ernesto Gomez, PhD President and CEO El Centro del Barrio dba CentroMed
HRSA-2026-0001-1825Ochsner Health2026-04-20T04:00Z13,541 chars
Please see the attached public comment on behalf of Ochsner Health YOchsner Health Via electronic submission (www.reguIations.201) April 20, 2026 The Honorable Thornas J. Engels Administrator Health Resources and Services Administration U.S. Departrnent of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042) Dear Adrninistrator Engels: Ochsner Health (Ochsner) appreciates the opportunity to comment on the "Request for Information: 340B Rebate Model Pilot Program," issued by the Department of Health and Hurnan Services (HHS). ABOUT OCHSNER HEALTH Ochsner, headquartered in New Orleans, is one of the nation's leading clinically integrated health systems, which includes 47 owned, managed and affiliated hospitals addressing the needs of patients, including indigent patients, throughout Louisiana, Mississippi, and Alabama. Ochsner's rural footprint includes eight critical access hospitals, four Medicare low-volume hospitals, two rural referral centers, and a broad network of rural health clinics across the Gulf South. Together, these sites help ensure patients in rural communities can access essential services close to horne while supporting the long-term sustainability of local care delivery. Ochsner is also a rnajor referral center serving patients throughout the Gulf Coast and across the country, treating some of the most challenging and complex rnedical conditions that include oncology; neurosciences; cardiovascular care; high risk obstetrics; neonatal and pediatric specialty care; organ transplantation; additional surgical and medical services; and innovative digital medicine and remote monitoring programs focused on managing hypertension, diabetes, and other chronic diseases. In addition, Ochsner is engaged in vital public-private partnerships, managing important safety-net hospitals and physician services in underserved urban and rural communities along with the largest cornbined group of graduate medical education prograrns in Louisiana. GENERAL COMMENTS REGARDING THE 340B REBATE MODEL PILOT PROGRAM While we certainly recognize HRSA's support and efforts regarding enforcement actions against drug manufacturers that have been proposed to implement rebate models without Agency approval or oversight, we remain concerned about the establishment of a rebate model within the 340B Drug Pricing Program. The 340B Rebate Model Pilot Program will have a significant financial impact on our ability to provide critically important clinical services and programs of patient care and community support; creates substantial risk associated with vague enforcement criteria that does not ensure drug manufacturer compliance with crucial rebate guidelines; and imposes substantial administrative complexity, burden and cost on 340B hospitals. For these and other reasons, we do not support the implementation of the proposed 340B Rebate Model Pilot Program, which HRSA acknowledges could "fundamentally shift how the 340B program has operated for 30 yeats" by requiring hospitals to submit claims for 340B drugs and receive the 340B price or discount as a retrospective rebate instead of an upfront discount. We believe the Agency should halt the initiative but also understand it appears committed to the pilot prograrn. In response, we offer our perspectives and recommendations regarding how the rebate rnodel program can be improved with an emphasis on protecting the intent and purpose of the 340B Prograrn and the patients and 340B hospitals that rely on its support. 340B REBATE MODEL IMPACT ON PATIENT CARE SERVICES AND SUPPORT 0chsner provides services, staff, and support for a patient population with extensive health and financial challenges. The population of Louisiana and the Gulf Coast has a significantly larger percentage of patients with chronic disease, complications, and advanced or acute medical conditions coupled with low incomes when compared to the rest of the country. The purpose of the 340B Program is to provide an important measure of support for hospitals that serve these types of patients, which help 0chsner to offer critically important clinical services; patient assistance and nominal drug pricing programs with free and discounted drugs for low income patients; financial assistance for patients and individuals that require high-cost specialty medications; specialized pharmacy services for patients with complex medical conditions and multiple chronic diseases; and a substantial array of community benefit prograrns that provide important social and other services for underserved patients in rural and urban cornmunities. Unfortunately, the 340B Rebate Model Pilot Program will have a rnajor and imrnediate financial impact on 0chsner. We understand that HRSA's new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This rneans there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. The YOchsner Health 1514 Jefferson Highway New Orleans, LA 70121 phone (504) 842-3000 ochsner.org Page 12 irnpact from the wait will be rnore pronounced for the critical access hospitals that provide access to healthcare services to patients in rural communities. The diversion and depletion of these funds will constrain and underrnine our ability to offer the wide array of vital clinical services and support for our patients, including many individuals that are exceedingly fragile and vulnerable. 340B REBATE MODEL WOULD INCREASE ADMINISTRATIVE AND OPERATIONAL COSTS ON 340B HOSPITALS The 340B Rebate Model Pilot Program will increase administrative complexity and divert resources from patient care. The rebate rnodel introduces new IT systems, data tracking, claim reconciliation, and staff training requirements. With the lack of standardization requirements, we are concerned that covered entities will be required to utilize multiple manufacturer-specific platforms leading to administrative waste on stretched resources. Our comments are informed by experiences with HRSA's withdrawn rebate pilot and manufacturer data submission platforms. 340B Rebate Model Pilot Program will introduce additional administrative burden where 340B hospital staff would have to submit 340B claims data across all payois, reconcile 340B/MFP rebates to expected payments, and pursue good-faith inquiry for each incidence of rebate denial by the manufacturers. To reconcile 340B and MFP rebates to expected payments, 340B hospital staff would have to spend additional hours pulling reports from multiple platforms such as the Medicare Transaction Facilitator, rnanufacturer data submission platforms, pharmacy dispensing software and 340B third party adrninistrator. Once the 340B hospital identifies rebate denial by the manufacturer, it would have to either submit a good-faith inquiry for each incidence through the manufacturer data submission platforrn or pursue the Administrative Dispute Resolution process. Our experience with manufacturer data subrnission platforms has been rife with challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the rnanufacturers' policies. With rebates applying across all hospital settingsnot just contract pharmacy - the administrative burden and financial risk would increase greatly. MANAGE 340B CLAIMS DATA SUBMISSION THROUGH A NEUTRAL THIRD PARTY The 340B Rebate Model Pilot Prograrn allows each participating drug manufacturer to develop its own process and IT platform for providing the 340B price and subsequent rebate. As a result, 340B hospitals will be forced to use multiple rnodels and IT platforms that create an administrative complexity and burden. \'Ochsner Health 1514 Jefferson Highway New Orleans, LA 70121 phone (504) 842-3000 ochsner.org Page 13 The potential requirement to use multiple, mandated IT platform(s) raises many concerns, observations, and questions including, without lirnitation: (a) a covered entity cannot independently investigate whether it would want to do business with the third-party IT platform entities, including whether the third-party entity has in place and maintains adequate data security protections to secure a covered entity's Protected Health Information (PHI), as such, the HRSA guidance should include, or require the contract between the drug manufacturer and the third-party IT platform entities to include, a requirement that the third-party entity maintain robust data security standards; (b) the third-party IT platform entities should be required to undergo periodic data security audits by an independent, third party, the reports from which are shared with the HRSA; (c) it should be made clear that a covered entity will not suffer liabilities related to any unauthorized use, access, or disclosure of PHI or Personal Identifiable Information (PII) held by the third-party IT platform entities; (d) the third-party IT platform entities should be required to maintain robust and sufficient insurance, including but not lirnited to privacy and security liability insurance (or its equivalent sometimes referred to as "Cyber/Data Network Security" insurance) covering liabilities resulting frorn or arising from acts, errors, or omissions in connection with the services provided under the rebate model program, which are associated with any breach or loss of any PHI or personally identifiable information; (e) if there is a security incident of the third party IT platform resulting in a breach of PHI, who would represent the interests of the covered entities and patients?; (f) if the third-party IT platform entity is breached, then what obligations would covered entities have to their patients?; (g) who is the responsible party for ongoing auditing and rnonitoring of the third party IT platform(s)?; (h) the third-party IT platform entities should only use data they receive from various sources for the purposes described in the Rebate Notice and rebate rnodel prograrn, and the scope of duties should be clarified. HRSA should thoughtfully consider outlining the permitted and prohibited uses of lirnited data sets or de-identified data held by the third-party IT platform entities. The third-party IT platform entities should be prohibited frorn redisclosing or selling data in any form, including identifiable and de-identified data sets. HRSA should also consider the need for a provision that indemnifies 340B hospitals in the event of a security incident and/or any other breach of applicable law where 340B hospitals have no ability to negotiate the terms of risk related to the IT platforrn that we are required to use. Further, rnost of the likely IT platforms, including Beacon, Second Sight Solutions and Kaldeios have strong business ties and relationships with the pharmaceutical industry where conflicts of interest make them a flawed choice to administer this important part of the program in a rnanner that is fair to 340B hospitals. For the purposes of avoiding 340B/MDPNP duplicate discounts, we recommend that HRSA establish single and neutral third-party, entity to provide an objective data submission and claims processing function, ensure compliance and data protection concerns are addressed, and reduce and streamline the enormous administrative complexity and burden created by separate drug manufacturer sponsored rebate models and IT platforms. HRSA should A:ochsner Health 1514 Jefferson Highway New Orleans, LA 70121 phone (504) 842-3000 ochsner.org Page 14 prohibit manufacturers from using 340B claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers' beneficial treatment under the pharmacy benefit manager's formulary. HRSA should clarify that drug manufacturers understand that they are responsible for all costs associated with the implementation of the rebate model program, including additional staff members that wiH be required to administer the rebate model program and that drug manufacturers will be responsible for implementing and maintaining the necessary compliance measures, including a robust IT and data protection governance program that aligns with HIPAA and ensures the protection of the data and cyber risks that this rebate model program could impose upon 340B hospitals. CONCLUSION Once again, please accept my thanks for your thoughtful consideration of our comments and recommendations. In the event the Agency may choose to implement the 340B Rebate Model Pilot Program, the leaders of Ochsner stand ready to serve as a resource for you and your staff in considering important changes to the design of the program that better reflect the intent of the 340B Drug Pricing Program and protect 340B hospitals and the patients and communities they serve. Sincerely, V a/W 41.a/1-7 Deborah Simonson, Pharm.D. System Vice President Chief Pharmacy Officer YOchsner Health 1514 Jefferson Highway New Orleans, LA 70121 phone (504) 342-3000 ochsner.org Page 15
HRSA-2026-0001-1826Massachusetts Society of Health System Pharmacists2026-04-20T04:00Z8,781 chars
On behalf of the Massachusetts Society of Health-System Pharmacists (MSHP) I'd like to submit our 340b Comments. Office of Special Health Initiatives HRSA Chantelle Britton, Director, Office of Pharmacy Affairs (OPA) 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 April 20, 2026 The Massachusetts Society of Health-System Pharmacists appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a 340B rebate model pilot program. This is not simply a technical policy question for hospital pharmacies. It is a structural question about how the 340B program functions in practice, and whether its core purpose can be sustained under a fundamentally different financial and operational model. For decades, the 340B program has operated as an upfront discount system. That structure is not incidental. It is what allows hospitals and health systems to maintain access, manage cost, and deliver care in environments where margins are already under pressure. The rebate model reverses that structure entirely and replaces predictability with delay, and certainty with administrative dependency. From the perspective of health-system pharmacists, the most immediate impact is cash flow. Under a rebate model, hospitals would be required to purchase drugs at full price and wait for reimbursement. That shift may appear manageable on paper, but in practice it introduces real financial strain. Many 340B-covered entities operate with limited liquidity, particularly safety-net providers. Carrying the upfront cost of high-priced therapies especially specialty drugs creates exposure that does not exist under the current system. The operational implications are equally significant. Hospital pharmacy systems are not designed around retrospective rebate validation. They are built around real-time acquisition, dispensing, and compliance. A rebate model introduces a new layer of infrastructure requirements, including tracking, reconciliation, dispute resolution, and audit preparation. Each of these functions requires staffing, technology investment, and ongoing oversight. The RFI appropriately asks stakeholders to quantify these burdens. That is important. The administrative complexity here is not theoretical. It is measurable and immediate. It affects how pharmacies allocate resources, how health systems manage inventory, and how compliance programs are structured. These are not marginal adjustments. They represent a redesign of the operational model. There is also a broader concern that goes beyond administration. The rebate model introduces timing risk into a program that has historically provided stability. Delays in rebate payments, disputes over eligibility, or inconsistencies in manufacturer participation could disrupt access to medications. For hospital pharmacists, that risk translates directly into patient care decisions. The 340B program was designed to allow covered entities to stretch scarce resources and expand access. Any policy shift should be evaluated against that purpose. A rebate model may change how discounts are delivered, but it also changes who bears the risk in the system. Under the current proposal, that risk shifts toward hospitals and providers. That shift has consequences. It affects how institutions plan, how they invest, and how they deliver care. It also raises a fundamental question about whether the program continues to function as Congress intended when the financial burden is moved upstream. From the perspective of MSHP, the central issue is not whether a rebate model can be designed. It is whether it can be implemented without undermining the operational stability and access goals that define the 340B program. At this stage, the record should reflect clearly a rebate model that introduces material cash flow pressure, significant administrative burden, and operational uncertainty for covered entities. These thoughts are central to whether this model is viable. We appreciate HRSAs effort to engage stakeholders in this process and encourage the agency to weigh these operational realities carefully before advancing any pilot program. Sincerely, Alexander Wilkocki PharmD MBA BCPS Massachusetts Society of Health-System Pharmacists (MSHP) President 85 Swanson Road, Suite 135, Boxborough, MA 01719 | Tel: 978-364-5060 | Email: admin@mashp.org | www.mashp.org Office of Special Health Initiatives HRSA Chantelle Britton, Director, Office of Pharmacy Affairs (OPA) 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 April 20, 2026 The Massachusetts Society of Health-System Pharmacists appreciates the opportunity to respond to the Request for Information regarding the potential implementation of a 340B rebate model pilot program. This is not simply a technical policy question for hospital pharmacies. It is a structural question about how the 340B program functions in practice, and whether its core purpose can be sustained under a fundamentally different financial and operational model. For decades, the 340B program has operated as an upfront discount system. That structure is not incidental. It is what allows hospitals and health systems to maintain access, manage costs, and deliver care in environments where margins are already under pressure. The rebate model reverses that structure entirely and replaces predictability with delay, and certainty with administrative dependency. From the perspective of health-system pharmacists, the most immediate impact is cash flow. Under a rebate model, hospitals would be required to purchase drugs at full price and wait for reimbursement. That shift may appear manageable on paper, but in practice it introduces real financial strain. Many 340B-covered entities operate with limited liquidity, particularly safety-net providers. Carrying the upfront cost of high-priced therapies, especially specialty drugs, creates exposure that does not exist under the current system. The operational implications are equally significant. Hospital pharmacy systems are not designed around retrospective rebate validation. They are built around real-time acquisition, dispensing, and compliance. A rebate model introduces a new layer of infrastructure requirements, including tracking, reconciliation, dispute resolution, and audit preparation. Each of these functions requires additional staffing, technology investment, and ongoing oversight. The RFI appropriately asks stakeholders to quantify these burdens. That is important. The administrative complexity here is not theoretical. It is measurable and immediate. It affects how pharmacies allocate resources, how health systems manage inventory, and how compliance 85 Swanson Road, Suite 135, Boxborough, MA 01719 | Tel: 978-364-5060 | Email: admin@mashp.org | www.mashp.org programs are structured. These are not marginal adjustments. They represent a redesign of the operational model. There is also a broader concern that goes beyond administration. The rebate model introduces timing risk into a program that has historically provided stability. Delays in rebate payments, disputes over eligibility, or inconsistencies in manufacturer participation could disrupt access to medications. For hospital pharmacists, that risk translates directly into patient care decisions. The 340B program was designed to allow covered entities to stretch scarce resources and expand access. Any policy shift should be evaluated against that purpose. A rebate model may change how discounts are delivered, but it also changes who bears the risk in the system. Under the current proposal, that risk shifts toward hospitals and providers. That shift has consequences. It affects how institutions plan, how they invest, and how they deliver care. It also raises a fundamental question about whether the program continues to function as Congress intended when the financial burden is moved upstream. From the perspective of MSHP, the central issue is not whether a rebate model can be designed. It is whether it can be implemented without undermining the operational stability and access goals that define the 340B program. At this stage, the record should reflect clearly a rebate model that introduces material cash flow pressure, significant administrative burden, and operational uncertainty for covered entities. These thoughts are central to whether this model is viable. We appreciate HRSAs effort to engage stakeholders in this process and encourage the agency to weigh these operational realities carefully before advancing any pilot program. Sincerely, Alexander Wilkocki PharmD MBA BCPS Massachusetts Society of Health-System Pharmacists (MSHP) President
HRSA-2026-0001-1827(no commenter metadata)2026-04-20T04:00Z34,153 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Tarrant County Hospital District d/b/a JPS Health Network, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, rebate mechanism will impose enormous costs and burdens on Tarrant County Hospital District that outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. HRSAs desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Tarrant County Hospital District has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Tarrant County Hospital District has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. More drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount. This situation more likely creates disputes over delays and denials, and therefore less money that Tarrant County Hospital District can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program are exponential. Any rebate program would require Tarrant County Hospital District to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Tarrant County Hospital District understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B DSH hospital. This is also far and beyond what we are experiencing now. One Time: $385,000 - $935,000 IT Build & System Configuration: split-billing system redesign, rebate tracking logic, claim flagging for 25 drugs. Estimated hours: 800-1,200 Costs: $150,000-$300,000 TPA Implementation Fees: New data feeds, rebate-specific configurations, contract pharmacy alignment. Costs: $75,000-$200,000 EHR/Pharmacy System Modifications: Charge capture, NDC-level tracking, accumulator adjustments Estimated hours: 200-400 Costs: $50,000-$120,000 Policy & SOP Development: Rebate workflows, compliance protocols, denial management Estimated hours: 100-200 Costs: $15,000-$40,000 Legal & Compliance Review: Contracting, regulatory interpretation, audit preparation Estimated hours: 150-300 Costs: $20,000-$50,000 Staff Training: Pharmacy, finance, compliance, IT Estimated hours: 150-300 Costs: $20,000-$50,000 External Consulting: Advisory support for implementation strategies Costs: $50,000-$150,000 Ongoing (annual): $480,000-$1,210,000 Rebate Processing & Reconciliation: Tracking claims, invoicing manufacturers, matching payments Estimated FTE: 1.5-3.0 Costs: $120,000-$300,000 Denials Management: Investigating and appealing rebate denials Estimated FTE: 1.0-2.0 Costs: $80,000-$200,000 TPA Ongoing Fees: Incremental per-claim or per-drug fees for rebate tracking Costs: $100,000-$250,000 IT Maintenance & Enhancements: Ongoing system updates, error correction Estimated Hours: 200-400 Costs: $40,000-$120,000 Compliance & Audit Support: Internal audit prep and HRSA audit readiness Estimated FTE: 0.5-1 Costs: $50,000-$120,000 Contract Pharmacy Administration: Increased complexity managing rebate vs discount claims Estimated FTE: 0.5-1.5FTE Costs: $50,000-$120,000 Finance & Revenue Cycle Impact: Cash flow tracking and delayed revenue reconciliation Estimated FTE: 0.5-1.0 Costs: $50,000-$120,000 Key Cost Drivers: Increased Staffing Burden manual reconciliation workload along with denial and appeals infrastructure. Estimated 3.5-6 FTE across pharmacy, finance, and compliance TPA Costs data feed development, per-claim rebate tracking, and custom reporting modules. Estimated $50,000-$150,000 IT system adjustments to move away from upfront discounts to rebates. Created high risk of data mismatches, payment delays, and revenue leakage. Denials & Dispute Resolution unlike upfront discounts, rebate will introduce disputes with manufacturers at an estimated 5-15%. The appeals process is labor intensive and slow, requiring FTEs to be directed away from supporting patient care. Cash Flow Impacts shifts from immediate savings to delayed reimbursement (60+). This requires significant working capital and increased financial tracking. Staffing Impacts Under a Potential 340B Rebate Program. Tarrant County Hospital District does not currently have the staff needed to comply with a Rebate Program. Additional time to complete required activities would total 140-240 hours per week, equivalent to 3.5 to 6 FTE. These would be net new full-time employees as well as relocation of existing staff time including diverting clinical resources away from patient care. Because existing pharmacy staff and revenue cycle teams are already operating at capacity, pharmacists would need to spend time reviewing rebate eligibility and documentation as well as assist with denial resolution and audits. Revenue cycle and finance staff would shift focus from core billing and reimbursement functions to tracking rebates and reconciliation. Pharmacy Buyers/Inventory Control (1-2 FTE): Identify and track eligible claims across 25 drugs Submit rebate invoices to manufacturers Monitor payment status and reconcile discrepancies Investigate rejected or unpaid rebates Compile documentation for appeals Interface with manufacturers and TPAs 340B Program Manager (1 FTE): Maintain audits and Ensure compliance with HRSA Oversee policy adherence and reporting IT Data Analyst (1-2 FTE): Maintain data feeds between EHR, split-billing software, and TPA Troubleshoot claim mismatches and system errors Build reporting tools for rebate tracking Contracting (0.5-1 FTE) Coordinate rebate eligibility Manage operational complexity of mixed rebate/discount models Ensure alignment with TPAs HRSAs estimate of 5 hours per week underrepresents true impacts. Combined volume of claims for these 25 drugs at Tarrant County Hospital District reaches over 100,000 with each claim requiring eligibility validation, data capture, and rebate tracking. Even at a conservative estimate of 3 minutes per claim x 100,000 claims/year = 5,000 hours/year (96 hours/week) for tracking alone. This does not consider any denials and appeals, contract complexity, or compliance and auditing. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Tarrant County Hospital District has designed its technological systems and operational infrastructure in relation to an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Current split-billing platforms are designed to determine 340B eligibility at the point of dispense and accumulate utilization for replenishment. New capabilities will include claim-level rebate eligibility tracking, flagging claims subject to Medicare negotiated pricing, tracking the lifecycle of the claim, and integrating with manufacturer rebate submission portals or intermediaries. These new capabilities would require a new module or outside solution that would help to track and reconcile payments, manage denials and appeals, and generate rebate invoices. This is on top of the EHR and Pharmacy System modifications that would include updates to HL7 interface development, batch file creation and validation, and exception handling. Lastly, to support the reporting requirements there needs to be enhanced infrastructure for data warehouses as well as compliance and auditing teams. On the Medical claims side, there are also significant barriers to aligning with a potential 340B Rebate Program. This includes a lack of direct data feed from TPA to real-time medical claims data within the EHR, accurate linkage between required data elements, manual data extraction, data lag and timing issues, and significant quality and reconciliation challenges. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. A 340B Rebate Program would fundamentally change data requirements, requiring both one-time system redesign and ongoing operational changes. One-time changes would include the redesign of data architecture, development of new interfaces between EHR and TPAs, and new data validation rules. Ongoing changes would include the continuous extraction and submission of the claims-level data as well as reconciliation. Due to the lack of direct integration, data must be extracted, matched using non-standard identifiers, transformed into submission-ready formats, reviewed for completeness and accuracy, and reconciled post-submission. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Tarrant County Hospital District to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. This estimated cash flow impact by our institution utilizing a time value of money at 4% and a 30 day turnaround time (sitting, data processing, rebate waiting) came to an estimated $240,000 before accounting for any potential denied claims. When considering claims denied at a modest 5%, we estimate the true cost to fall between $7,000,000 and $10,000,000 for the institution. This is true lost savings that cannot be allocated to support direct patient services. While the above is significant on its own, this also does not include the substantial impact of cash flow. Fronting all claims at WAC will drastically decrease available working capital which creates liquidity strain and increased exposure to revenue cycle variability and manufacturer payment delays. Most health systems are not structured to absorb this level of cash flow disruption without impact when we are running on operating margins often between 1-3%. Redirecting this liquidity to float drug manufacturers puts payroll, capital projects, and debt service obligation at risk. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Tarrant County Hospital District will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The incremental administrative, IT, and staffing costs associated with a 340B Rebate Model, combined with cash flow disruption and revenue uncertainty, would materially reduce the financial benefit of the 340B Program and directly impact our ability to provide care. This diverts resources from patients to administrative and financing costs. Tarrant County Hospital District serves a predominantly underserved population where we address health disparities, provide services to vulnerable populations, and improve health outcomes. We provide these services regardless of the patients ability to pay. For many of these patients, we are one of the few or only providers who can provide specialized services and any reduction in services would create access gaps, increased travel burden, and potentially delayed or forgone care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. The 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Tarrant County Hospital District reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. This included the system not allowing dashes, changing uninsured patients to CASH, aligning unit of measures with ambulatory dispensing, shifting data requirements, and constant changes to the Welcome Packet which was undergoing significant changes even less than 30 days before the intended January 1st go-live. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Tarrant County Hospital District, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. We support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. For all of these reasons, Tarrant County Hospital District respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If HRSA chooses to move forward with this effort, it must allow Tarrant County Hospital District and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). Additional comments on the specific features of the program will be important aspects to consider. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Steven Schultz Vice President of Pharmacy Tarrant County Hospital District, Fort Worth TX 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Tarrant County Hospital District d/b/a JPS Health Network, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, rebate mechanism will impose enormous costs and burdens on Tarrant County Hospital District that outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. HRSAs desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Tarrant County Hospital District has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Tarrant County Hospital District has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. More drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies 2 while we await our statutory discount. This situation more likely creates disputes over delays and denials, and therefore less money that Tarrant County Hospital District can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program are exponential. Any rebate program would require Tarrant County Hospital District to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Tarrant County Hospital District understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B DSH hospital. This is also far and beyond what we are experiencing now. One Time: $385,000 - $935,000 IT Build & System Configuration: split-billing system redesign, rebate tracking logic, claim flagging for 25 drugs. o Estimated hours: 800-1,200 o Costs: $150,000-$300,000 TPA Implementation Fees: New data feeds, rebate-specific configurations, contract pharmacy alignment. o Costs: $75,000-$200,000 EHR/Pharmacy System Modifications: Charge capture, NDC-level tracking, accumulator adjustments o Estimated hours: 200-400 o Costs: $50,000-$120,000 Policy & SOP Development: Rebate workflows, compliance protocols, denial management o Estimated hours: 100-200 o Costs: $15,000-$40,000 Legal & Compliance Review: Contracting, regulatory interpretation, audit preparation o Estimated hours: 150-300 o Costs: $20,000-$50,000 Staff Training: Pharmacy, finance, compliance, IT o Estimated hours: 150-300 o Costs: $20,000-$50,000 3 External Consulting: Advisory support for implementation strategies o Costs: $50,000-$150,000 Ongoing (annual): $480,000-$1,210,000 Rebate Processing & Reconciliation: Tracking claims, invoicing manufacturers, matching payments o Estimated FTE: 1.5-3.0 o Costs: $120,000-$300,000 Denials Management: Investigating and appealing rebate denials o Estimated FTE: 1.0-2.0 o Costs: $80,000-$200,000 TPA Ongoing Fees: Incremental per-claim or per-drug fees for rebate tracking o Costs: $100,000-$250,000 IT Maintenance & Enhancements: Ongoing system updates, error correction o Estimated Hours: 200-400 o Costs: $40,000-$120,000 Compliance & Audit Support: Internal audit prep and HRSA audit readiness o Estimated FTE: 0.5-1 o Costs: $50,000-$120,000 Contract Pharmacy Administration: Increased complexity managing rebate vs discount claims o Estimated FTE: 0.5-1.5FTE o Costs: $50,000-$120,000 Finance & Revenue Cycle Impact: Cash flow tracking and delayed revenue reconciliation o Estimated FTE: 0.5-1.0 o Costs: $50,000-$120,000 Key Cost Drivers: Increased Staffing Burden manual reconciliation workload along with denial and appeals infrastructure. Estimated 3.5-6 FTE across pharmacy, finance, and compliance TPA Costs data feed development, per-claim rebate tracking, and custom reporting modules. Estimated $50,000-$150,000 IT system adjustments to move away from upfront discounts to rebates. Created high risk of data mismatches, payment delays, and revenue leakage. 4 Denials & Dispute Resolution unlike upfront discounts, rebate will introduce disputes with manufacturers at an estimated 5-15%. The appeals process is labor intensive and slow, requiring FTEs to be directed away from supporting patient care. Cash Flow Impacts shifts from immediate savings to delayed reimbursement (60+). This requires significant working capital and increased financial tracking. Staffing Impacts Under a Potential 340B Rebate Program. Tarrant County Hospital District does not currently have the staff needed to comply with a Rebate Program. Additional time to complete required activities would total 140-240 hours per week, equivalent to 3.5 to 6 FTE. These would be net new full-time employees as well as relocation of existing staff time including diverting clinical resources away from patient care. Because existing pharmacy staff and revenue cycle teams are already operating at capacity, pharmacists would need to spend time reviewing rebate eligibility and documentation as well as assist with denial resolution and audits. Revenue cycle and finance staff would shift focus from core billing and reimbursement functions to tracking rebates and reconciliation. Pharmacy Buyers/Inventory Control (1-2 FTE): o Identify and track eligible claims across 25 drugs o Submit rebate invoices to manufacturers o Monitor payment status and reconcile discrepancies o Investigate rejected or unpaid rebates o Compile documentation for appeals o Interface with manufacturers and TPAs 340B Program Manager (1 FTE): o Maintain audits and Ensure compliance with HRSA o Oversee policy adherence and reporting IT Data Analyst (1-2 FTE): o Maintain data feeds between EHR, split-billing software, and TPA o Troubleshoot claim mismatches and system errors o Build reporting tools for rebate tracking Contracting (0.5-1 FTE) o Coordinate rebate eligibility o Manage operational complexity of mixed rebate/discount models o Ensure alignment with TPAs 5 HRSAs estimate of 5 hours per week underrepresents true impacts. Combined volume of claims for these 25 drugs at Tarrant County Hospital District reaches over 100,000 with each claim requiring eligibility validation, data capture, and rebate tracking. Even at a conservative estimate of 3 minutes per claim x 100,000 claims/year = 5,000 hours/year (96 hours/week) for tracking alone. This does not consider any denials and appeals, contract complexity, or compliance and auditing. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Tarrant County Hospital District has designed its technological systems and operational infrastructure in relation to an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Current split- billing platforms are designed to determine 340B eligibility at the point of dispense and accumulate utilization for replenishment. New capabilities will include claim-level rebate eligibility tracking, flagging claims subject to Medicare negotiated pricing, tracking the lifecycle of the claim, and integrating with manufacturer rebate submission portals or intermediaries. These new capabilities would require a new module or outside solution that would help to track and reconcile payments, manage denials and appeals, and generate rebate invoices. This is on top of the EHR and Pharmacy System modifications that would include updates to HL7 interface development, batch file creation and validation, and exception handling. Lastly, to support the reporting requirements there needs to be enhanced infrastructure for data warehouses as well as compliance and auditing teams. On the Medical claims side, there are also significant barriers to aligning with a potential 340B Rebate Program. This includes a lack of direct data feed from TPA to real-time medical claims data within the EHR, accurate linkage between required data elements, manual data extraction, data lag and timing issues, and significant quality and reconciliation challenges. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. A 340B Rebate Program would fundamentally change data requirements, requiring both one-time system redesign and ongoing operational changes. One-time changes would include the redesign of data architecture, development of new interfaces between EHR and TPAs, and new data validation rules. Ongoing changes would include the continuous extraction and submission of the claims-level data as well as reconciliation. Due to the lack of direct integration, data must be extracted, matched using non-standard 6 identifiers, transformed into submission-ready formats, reviewed for completeness and accuracy, and reconciled post-submission. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Tarrant County Hospital District to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. This estimated cash flow impact by our institution utilizing a time value of money at 4% and a 30 day turnaround time (sitting, data processing, rebate waiting) came to an estimated $240,000 before accounting for any potential denied claims. When considering claims denied at a modest 5%, we estimate the true cost to fall between $7,000,000 and $10,000,000 for the institution. This is true lost savings that cannot be allocated to support direct patient services. While the above is significant on its own, this also does not include the substantial impact of cash flow. Fronting all claims at WAC will drastically decrease available working capital which creates liquidity strain and increased exposure to revenue cycle variability and manufacturer payment delays. Most health systems are not structured to absorb this level of cash flow disruption without impact when we are running on operating margins often between 1-3%. Redirecting this liquidity to float drug manufacturers puts payroll, capital projects, and debt service obligation at risk. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Tarrant County Hospital District will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The incremental administrative, IT, and staffing costs associated with a 340B Rebate Model, combined with cash flow disruption and revenue uncertainty, would materially reduce the financial benefit of the 340B Program and directly impact our ability to provide care. This diverts resources from patients to administrative and financing costs. Tarrant County Hospital District serves a predominantly underserved population where we address health disparities, provide services to vulnerable populations, and improve health outcomes. We provide these services regardless of the patients ability to pay. For many of these patients, we are one of the few or only providers who can provide specialized services 7 and any reduction in services would create access gaps, increased travel burden, and potentially delayed or forgone care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. The 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Tarrant County Hospital District reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. This included the system not allowing dashes, changing uninsured patients to CASH, aligning unit of measures with ambulatory dispensing, shifting data requirements, and constant changes to the Welcome Packet which was undergoing significant changes even less than 30 days before the intended January 1st go-live. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Tarrant County Hospital District, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. We support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. For all of these reasons, Tarrant County Hospital District respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA 8 therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If HRSA chooses to move forward with this effort, it must allow Tarrant County Hospital District and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). Additional comments on the specific features of the program will be important aspects to consider. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Steven Schultz Vice President of Pharmacy Tarrant County Hospital District, Fort Worth TX
HRSA-2026-0001-1828Northeast Pharmacy Service Corporation2026-04-20T04:00Z11,161 chars
On behalf of ortheast Pharmacy Service Corporation (NPSC) we are submitting our 340B comments. Office of Special Health Initiatives HRSA Chantelle Britton, Director, Office of Pharmacy Affairs (OPA) 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 April 20, 2026 The Northeast Pharmacy Service Corporation appreciates the opportunity to respond to HRSAs Request for Information regarding a potential 340B Rebate Model Pilot Program. NPSC represents independent community pharmacies across the Northeast that operate on thin margins while serving as frontline access points for patients. From that perspective, the rebate model is not simply an administrative adjustment to the 340B program. It is a structural shift that introduces financial risk into a part of the healthcare system that has the least capacity to absorb it. The 340B program has functioned for decades as an upfront discount model. That structure is what allows pharmacies and covered entities to operate with predictability. The proposed rebate model reverses that system entirely. It requires providers and pharmacies to purchase drugs at full price and wait for reimbursement. For independent pharmacies, that is not a neutral change. It is a direct cash flow problem. Unlike large health systems or vertically integrated entities, independent pharmacies do not have access to significant working capital. Many operate on narrow reimbursement spreads that are already under pressure from payer and PBM practices. Requiring pharmacies or their covered entity partners to carry the full acquisition cost of high-priced medications, even temporarily, creates exposure that cannot be managed through operational efficiency alone. This is where the policy discussion needs to be grounded in reality. The rebate model assumes that participants can float the cost of inventory and rely on timely reimbursement. In practice, reimbursement timing is rarely predictable across the healthcare system. Delays, disputes, and reconciliation issues are common. Introducing those same dynamics into the 340B structure shifts financial risk downstream to entities that were not designed to carry it. The RFI appropriately asks stakeholders to quantify operational and administrative burdens. From the perspective of independent pharmacy networks, those burdens are substantial. A rebate model requires new claims tracking infrastructure, reconciliation across multiple entities, dispute resolution tied to manufacturer validation, and increased audit exposure. These are not incremental adjustments. They represent a new compliance system layered on top of an already complex reimbursement environment, and they raise a practical question about who bears the cost of building and maintaining that system. There is also a broader structural concern that should be part of the record. The rebate model effectively transfers control over the timing and validation of 340B discounts from the point of sale to a manufacturer-driven rebate process. That shift changes the balance of the program. It introduces uncertainty into whether and when discounts are realized, and it places pharmacies and covered entities in a position of dependency on processes they do not control. The 340B statute was designed to allow covered entities to stretch scarce resources and expand patient access. That purpose is achieved through certainty at the point of purchase. A rebate model introduces uncertainty into that equation. For independent pharmacies, that uncertainty does not stay theoretical. It shows up in day to day operational decisions about what can be carried, how dispensing relationships are structured, and how far a pharmacy can extend itself to serve higher risk or lower margin patient populations. Over time, those decisions compound. What begins as a financial timing issue becomes a constraint on access. This is not theoretical. The 340B program exists within a broader reimbursement environment where independent pharmacies are already under sustained financial pressure. Adding a rebate structure on top of that environment risks accelerating contraction in the very segment of the market that provides local, community-based access to care. At this stage, HRSA is building the administrative record to determine whether a rebate model is viable. That record should reflect clearly that a rebate model introduces material cash flow risk, significant administrative burden, and structural uncertainty for independent pharmacies and the covered entities they support. Those impacts are not evenly distributed across the system. They fall most heavily on smaller providers and pharmacy networks that lack the capital reserves and infrastructure of larger institutions. From the perspective of NPSC, the central question is not whether a rebate model can be implemented in theory. It is whether it can be implemented in a way that preserves access and does not destabilize the existing pharmacy network that patients rely on. Based on the realities outlined above, that threshold has not been met. We appreciate the opportunity to submit our comments. Best Regards, Thank you. Sincerely, Patricia Monaco, MBA Edward Schreiner, RPh President, CEO Vice President Network Development Ron Lanton III, Esq. Legislative Policy Advisor Northeast Pharmacy Service Corporation 1661 Worcester Road Suite 405 Framingham, MA 01701-5401 800/532.3742 508/875.1866 F: 508/875.6108 www.northeastpharmacy.com Office of Special Health Initiatives HRSA Chantelle Britton, Director, Office of Pharmacy Affairs (OPA) 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 April 20, 2026 The Northeast Pharmacy Service Corporation appreciates the opportunity to respond to HRSAs Request for Information regarding a potential 340B Rebate Model Pilot Program. NPSC represents independent community pharmacies across the Northeast that operate on thin margins while serving as frontline access points for patients. From that perspective, the rebate model is not simply an administrative adjustment to the 340B program. It is a structural shift that introduces financial risk into a part of the healthcare system that has the least capacity to absorb it. The 340B program has functioned for decades as an upfront discount model. That structure is what allows pharmacies and covered entities to operate with predictability. The proposed rebate model reverses that system entirely. It requires providers and pharmacies to purchase drugs at full price and wait for reimbursement. For independent pharmacies, that is not a neutral change. It is a direct cash flow problem. Unlike large health systems or vertically integrated entities, independent pharmacies do not have access to significant working capital. Many operate on narrow reimbursement spreads that are already under pressure from payer and PBM practices. Requiring pharmacies or their covered entity partners to carry the full acquisition cost of high-priced medications, even temporarily, creates exposure that cannot be managed through operational efficiency alone. This is where the policy discussion needs to be grounded in reality. The rebate model assumes that participants can float the cost of inventory and rely on timely reimbursement. In practice, reimbursement timing is rarely predictable across the healthcare system. Delays, disputes, and reconciliation issues are common. Introducing those same dynamics into the 340B structure shifts financial risk downstream to entities that were not designed to carry it. The RFI appropriately asks stakeholders to quantify operational and administrative burdens. From the perspective of independent pharmacy networks, those burdens are substantial. Northeast Pharmacy Service Corporation 1661 Worcester Road Suite 405 Framingham, MA 01701-5401 800/532.3742 508/875.1866 F: 508/875.6108 www.northeastpharmacy.com A rebate model requires new claims tracking infrastructure, reconciliation across multiple entities, dispute resolution tied to manufacturer validation, and increased audit exposure. These are not incremental adjustments. They represent a new compliance system layered on top of an already complex reimbursement environment, and they raise a practical question about who bears the cost of building and maintaining that system. There is also a broader structural concern that should be part of the record. The rebate model effectively transfers control over the timing and validation of 340B discounts from the point of sale to a manufacturer-driven rebate process. That shift changes the balance of the program. It introduces uncertainty into whether and when discounts are realized, and it places pharmacies and covered entities in a position of dependency on processes they do not control. The 340B statute was designed to allow covered entities to stretch scarce resources and expand patient access. That purpose is achieved through certainty at the point of purchase. A rebate model introduces uncertainty into that equation. For independent pharmacies, that uncertainty does not stay theoretical. It shows up in day to day operational decisions about what can be carried, how dispensing relationships are structured, and how far a pharmacy can extend itself to serve higher risk or lower margin patient populations. Over time, those decisions compound. What begins as a financial timing issue becomes a constraint on access. This is not theoretical. The 340B program exists within a broader reimbursement environment where independent pharmacies are already under sustained financial pressure. Adding a rebate structure on top of that environment risks accelerating contraction in the very segment of the market that provides local, community-based access to care. At this stage, HRSA is building the administrative record to determine whether a rebate model is viable. That record should reflect clearly that a rebate model introduces material cash flow risk, significant administrative burden, and structural uncertainty for independent pharmacies and the covered entities they support. Those impacts are not evenly distributed across the system. They fall most heavily on smaller providers and pharmacy networks that lack the capital reserves and infrastructure of larger institutions. Northeast Pharmacy Service Corporation 1661 Worcester Road Suite 405 Framingham, MA 01701-5401 800/532.3742 508/875.1866 F: 508/875.6108 www.northeastpharmacy.com From the perspective of NPSC, the central question is not whether a rebate model can be implemented in theory. It is whether it can be implemented in a way that preserves access and does not destabilize the existing pharmacy network that patients rely on. Based on the realities outlined above, that threshold has not been met. We appreciate the opportunity to submit our comments. Best Regards, Thank you. Sincerely, Patricia Monaco, MBA Edward Schreiner, RPh President, CEO Vice President Network Development Ron Lanton III, Esq. Legislative Policy Advisor
HRSA-2026-0001-1829Adventist Health White Memorial2026-04-20T04:00Z11,071 chars
Adventist Health White Memorial 340B Pilot Comments es Adventist Health\ Adventist Health White Memorial 1720 E Cesar E Chavez Ave Los Angeles, CA 90033 AcIventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) DearAdministrator Engels, Adventist Health White Memorial, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSA's interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health White Memorial has strived to provide HRSA with detailed responses to the RFI's 30 questions. For cost-estimating purposes, we assume any future rebate program [ADVENTISTHEALTH:INTERNAL] Co Adventist Health\ would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSA's February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health White Memorial is a 353-bed acute care hospital and inner-city safety net medical center serving communities in and near downtown Los Angeles. The hospital is located in an urban area characterized by underserved populations, high poverty rates, and significant immigrant and non-English speaking communities. As a teaching hospital, Adventist Health White Memorial provides specialized maternity and neonatal services, as well as comprehensive behavioral health programs, addressing the diverse needs of the local population. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health White Memorial would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health White Memorial to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. For example, a 73-year-old patient was discharged with 18 medications. The pharmacist collaborated with physicians to optimize the discharge drug regimen and conducted bedside delivery and education of all medications. The patient was discharged with a complete understanding of the medication regiment and was grateful for the seamless access to all medications and affordable copayments. Without 340B funding, Adventist Health White Memorial would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health White Memorial to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 34OB Rebate Program [ADVENTISTHEALTH:INTERNAL] M* Adventist Health\ A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per. year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health White Memorial has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost ofthe Plenful program forAdventist Health White Memorial would be $384,769.36 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health White Memorial does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health White Memorial is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) undervoluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, [ADVENTISTHEALTH:INTERNAL] De Adventist Health\ manufacturers should be prohibited from using covered entities' rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health White Memorial to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $12,597,241.69 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health White Memorial. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $1,259,724.17 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health White Memorial, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. [ADVENTISTHEALTH:INTERNAL] Adventist Health\ Conclusion For these reasons, Adventist Health White Memorial respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Taryn Stanley, Finance Officer at stanletr@ah.org if you have any questions or would like additional information. Sincerely, ) Taryn Stanley Finance Officer, Adventist Health White Memorial [ADVENTISTHEALTH:INTERNAL]
HRSA-2026-0001-1830(no commenter metadata)2026-04-20T04:00Z10,361 chars
See attached file(s) Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Response to Request for Information: 340B Rebate Model Pilot Program (HRSA 2026 03042) Introduction and Organizational Background UMC Health System (UMC) is the super safety net county hospital system for Lubbock County, Texas serving more than 265,000 square miles across West Texas, Eastern New Mexico, Southern Colorado and the Oklahoma Panhandle. More than 60 percent of our patients are covered by government sponsored insurance, primarily Medicare and Medicaid, or are uninsured. UMCs mission is to care for anyone and everyone, regardless of ability to pay, while reducing barriers to care and improving community health outcomes. The 340B Drug Pricing Program is essential to UMCs financial stability and our ability to deliver charity care, access to medications, and comprehensive safety net services. Because of our payer mix and role as a super safety net provider, UMC is uniquely exposed to financial, operational, and patient access harms associated with a rebate-based model. RFI Question 1: Whether HRSA Should Implement a 340B Rebate Model UMC does not support implementation of a rebate based model under the 340B Program. A rebate model would fundamentally restructure how 340B pricing is delivered by replacing statutory upfront discounts with retrospective manufacturer reimbursements. This approach shifts financial, operational, and compliance risk from manufacturers to covered entities, contrary to the statutory intent of the 340B Program. For safety net hospitals like UMC, whose ability to serve vulnerable populations depends on predictable 340B savings, a rebate model would destabilize operations, strain liquidity, and reduce patient access to medications and other essential services. RFI Question 2: Operational Standards, Payment Timing, and Reconciliation Under the current 340B upfront discount model, UMC purchases drugs at Wholesale Acquisition Cost (WAC), validates 340B eligibility at the point of dispensing or administration, and replenishes inventory at the 340B ceiling price for eligible uses. Savings are realized promptly and consistently, allowing those resources to be reinvested into patient care, charity care, and medication access programs. Under a rebate-based model, UMC would be required to: Purchase drugs at WAC; Dispense medications to 340B-eligible patients; Replenish inventory again at WAC; and Wait for manufacturers to retroactively determine eligibility and issue rebates. This structure requires repeated upfront exposure to full WAC costs while delaying access to 340B savings that are critical to ongoing patient care and operational sustainability. Impact on Uninsured Patients For uninsured patients, UMC continues to offer affordable cash pricing regardless of whether a prescription ultimately qualifies for 340B pricing. Because manufacturer determinations may occur after dispensing, there is inherent financial risk, and in some cases pricing may be based on WAC rather than confirmed 340B savings. Despite this uncertainty, UMC assumes this risk today in order to avoid increasing barriers to medication access for uninsured patients. A rebate-based model would significantly expand this exposure and limit UMCs ability to sustain these practices. RFI Question 3: Cash Flow, Liquidity, and Financial Risk A rebate model introduces a significant timing mismatch between drug payment obligations and rebate recovery. Average Daily Outpatient WAC Exposure UMCs average daily outpatient drug spend at WAC is: Hospital outpatient services: $76,783 per day This level of daily exposure represents substantial ongoing liquidity risk when 340B savings are delayed or disputed. Rebate Timing Constraints UMC currently operates under net nine and one-half (9.5) day payment terms with its wholesale drug supplier. Any rebate model requiring reimbursement beyond this timeframeincluding common rebate delays of 30 or 60 dayswould create immediate financial strain. Such delays would force UMC to: Draw down limited operating reserves, Access external credit, or Delay or restrict inventory purchases. Given the volume and acuity of medications required to serve our patient population, extended rebate float is not operationally sustainable. Drug Categories with Greatest Exposure Oncology medications pose the greatest cash-flow and operational risk under a rebate-based model due to their high acquisition costs and the narrow window between purchase and administration. These therapies cannot be safely delayed without direct harm to patients, yet repeated WAC exposure severely limits flexibility in inventory and purchasing decisions. RFI Question 4: Patient Access and Operational Impact A rebate-based model would directly and measurably reduce patient access to medications. If required to repeatedly cover WAC costs while awaiting rebates, UMC would be forced to: More tightly control drug inventory, reducing days-on-hand; Require additional internal approvals prior to purchasing high-cost therapies; Limit stocking of certain medications to single locations; Increase courier use and staff management costs; and Delay treatment while pre-authorizations, purchasing, and logistics are completed. These changes would result in delayed therapy initiation, increased patient travel burdens, narrower formularies, and higher rates of rescheduling or canceled treatmentsparticularly in oncology and specialty care. UMC is already experiencing access pressures due to drug cost volatility, including restricting certain expensive medications to centralized locations. A rebate-based model would significantly exacerbate these conditions. RFI Question 5: Administrative Burden and Institutional Cost Implementing a rebate-based model would impose substantial and permanent administrative costs on UMC. In addition to significant staffing and IT expenses, reconciliation of rebate requests would be an ongoing, time-consuming, and burdensome activity required simply to ensure that UMC receives savings to which it is statutorily entitled. Under the Medicare Maximum Fair Price (MFP) Rebate Program, manufacturers routinely require submission of extensive historical claims data to support or contest rebate determinations. Often, this includes requests to produce claims data from prior years in order to retroactively demonstrate that dispensing events from recent months were not 340B eligible. These reconciliation demands are operationally unreasonable and disconnected from how hospital pharmacy and inventory systems function. They consume significant staff time without meaningfully improving program integrity and result in covered entities expending administrative resources merely to receive rebates that other entities receive automatically at the point of sale. As a super safety net provider, UMCs staff is already stretched thin. Under a rebate-based 340B model, we would face an untenable choice: either forgo rebates entirely because reconciliation is too burdensome to complete, or hire additional staff simply to access the sameor potentially lesscost savings that UMC has relied upon since joining the 340B Program. UMC estimates that a rebate-based model would require at least two (2) additional full-time analysts, and extensive realignment of current staff, resulting in at least $310,000 per year in new, and repurposed, ongoing administrative costs, diverting limited resources away from direct patient care. This is a rough estimate that will be refined as experience reveals. We fully expect the impact to increase as more nuance and complexity unfold. RFI Question 6: IT, Data Governance, and Security Risk Manufacturer-required rebate platforms demand submission of detailed utilization data that may be recombined with PBM data and re-identified. These platforms often operate under non- negotiable terms of use that do not meet UMCs data privacy, security, and governance standards. UMC would not accept such terms in any other operational or clinical context, particularly where protected health information or sensitive utilization patterns are involved. RFI Question 7: Duplicate Discount Prevention and Superior Alternatives UMC already prevents Medicaid duplicate discounts through multiple robust mechanisms, including: Registration in HRSAs Medicaid Exclusion File; Use of claim-level modifiers where applicable; and Internal and independent external audits. A rebate-based model is not necessary to prevent duplicate discounts. UMC strongly supports development of a neutral, HRSA-administered 340B data clearinghouse as a superior alternative. A centralized clearinghouse would: Preserve statutory upfront 340B pricing; Prevent duplicate discounts using standardized, authoritative data; Maintain HRSA oversight and enforcement authority; Reduce administrative burden and data fragmentation; and Protect covered entities from discriminatory PBM reimbursement practices. Unlike manufacturer-controlled rebate platforms, a clearinghouse maintains shared responsibility for program integrity without shifting 100 percent of financial and operational risk to safety net providers. Conclusion UMC urges HRSA not to implement a rebate-based model under the 340B Program. A rebate model would shift risk to covered entities, impose unsustainable financial and administrative burdens, and undermine access to care for vulnerable patients. If HRSA determines that additional data exchange is necessary to prevent duplicate discounts, a centrally administered clearinghouse is the appropriate path forward. UMC appreciates the opportunity to provide these comments and stands ready to assist HRSA in further evaluation. Sincerely, Electronically signed by: Jeffrey J. Hill Senior Vice President, Support Services and Government Relations Date: 04/20/2026 Location: Alto, NM
HRSA-2026-0001-1831University of Alabama at Birmingham Health System2026-04-20T04:00Z17,919 chars
Please see attached The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of University of Alabama Hospital (DSH010033) (collectively, UAB), we are grateful for this opportunity to comment on the above-referenced HHS Request for Information (RFI). UAB Background University of Alabama Hospital (UAB Hospital), a 1,400-bed facility, is the flagship of the University of Alabama at Birmingham Health System and is the primary teaching hospital for its School of Medicine. It is one of the largest hospitals in the United States and consistently ranks among the best hospitals in the nation. Its facilities consist of the UAB Women and Infants Center, the Hazelrig-Salter Radiation Oncology Center, the North Pavilion Diagnostic and Treatment Center, the Spain Rehabilitation Center, the Center for Psychiatric Medicine, Callahan Eye and UAB Highlands. UAB Hospital is the primary safety net hospital for the state of Alabama and provides comprehensive quaternary services, many of which are uniquely provided by UAB for the citizens of Alabama. These services include the only American College of Surgeons- accredited Level I trauma center in the State of Alabama, one the largest comprehensive transplantation programs in the Southeastern United States, Alabamas only burn center, a state-of- the-art heart and vascular center, one of the largest level IV regional neonatal intensive care units in the country, the only NCI-designated comprehensive cancer center in the Alabama, the largest comprehensive stroke program in Alabama, a 108-bed inpatient psychiatry hospital, and critical care transport services. UAB Hospital has participated in the 340B Program as a Disproportionate Share Hospital (DSH) for over 30 years. With access to 340B savings, UAB Hospital provides tens of millions in uncompensated care to the people of Alabama each year. 340B savings enable UAB Hospital to invest in unreimbursed, comprehensive care services such as counseling, social work, care navigation, and clinical trials support that is otherwise not available to its complex patient population. In FY25, UAB Hospital funded several million dollars in direct monetary assistance to the uninsured and underinsured through its High-Risk fund that enables patients no longer needing inpatient care to access necessary post-discharge resources such as medications, skilled nursing support, and transportation to follow-up appointments. UAB Hospital funds community-based programs such as the Heart Failure Transitional Care Services for Adults (HRTSA) Clinic and the Providing Access to Healthcare (PATH) Clinic for underserved and uninsured heart failure and diabetes patients. These clinics serve as medical homes for some of UABs most vulnerable patients and prevent utilization of high-cost healthcare resources, such as emergency department visits and inpatient admissions. UAB response to RFI Overview. Among other things, the RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Our answer is an unqualified no. The 340B Program allows UAB to care for Alabama patients with very complex medical needs, and we have long been fully committed to compliance with the requirements for Program participation. Any rebate mechanism will impose enormous costs and burdens on UAB that will far outweigh any benefits that might come from it. HRSAs own calculations of the cost of this proposed programmatic shift are extraordinary; our own cost calculations only further emphasize the material adverse impact to UABs ability to serve our patients and communities here in Alabama. Equally concerning is that HRSAs proposed rebate model test is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that, per Congress clear legislative directive, covered entities can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which UAB and many others have relied on for years to reach and care for our communities and patients, is the best way to fulfill this singular, exclusive purpose of the 340B Program. For purposes of estimating costs, we have assumed that any future Rebate Program will include at least the 10 drugs that HRSA previously approved for its original Program and potentially also up to 25 others that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027 (per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that UAB can spend as Congress clearly intended: on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. When we chose to participate in the 340B program, UAB understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as covered entitiesand far above and beyond what we are experiencing now, and is in stark contrast to the federal governments stated aim to reduce regulatory inefficiencies and waste. Staffing Impacts Under a Potential 340B Rebate Program. UAB does not currently have the staff needed to comply with a Rebate Program. Not only would current employees be required to reallocate work hours from medical care to perform administrative functions relating to the program, we also estimate that additional full-time employees will be needed. Based on our early estimations, HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs) is simply a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. UAB has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to modify or replace those systems. Data Collection by Covered Entities and Use of Information. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply incorrect. It also bears noting that pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to PBMs under voluntary agreements that ensure the manufacturers beneficial treatment under the PBMs formulary. This purpose has nothing to do with 340B program integrity and CEs (and our patients) should not be forced to provide claims data to enable, much less finance, this goal. We urge HRSA not to authorize a 340B rebate program that forces safety net providers (and their patients) to bear the costs of data sharing and purchasing drugs at non-340B prices to assist with policing of manufacturers commercial agreements. At a minimum, manufacturers should be prohibited from using any CE claims data for these or other inappropriate, non-programmatic commercial purposes. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will improperly force UAB to pre-pay for critical medications at WAC prices, effectively providing interest-free loans to drug companies in the amount of withheld discounts that we are in fact owed under the 340B statute. Even if drug companies paid within a 10- day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Additionally, we currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers higher price before receiving rebates, reducing our cash flow. Finally, along with the heavy financial burden, the lack of clarity in the Pilot Program regarding how rebate plans would provide rebates to covered entities is extremely concerning (e.g., credits to purchasing accounts or actual dollar payments made to bank accounts of covered entities). Anything other than cash payments is unacceptable as allowing other options will only further increase the administrative and financial burden to UAB in managing the various rebate plans. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that UAB will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Hospital margins are razor thin across the United States and Alabama experiences the lowest reimbursement rates in the nation. Among its national academic medicine peers, UAB Hospital continually ranks among the hospitals with the highest acuity in the country. UAB Hospital not only provides comprehensive, complex services, but also to the sickest patients in the nation who present with multiple co-morbid conditions and social determinants of health. UAB Hospital competes nationally for top healthcare talent and while its reimbursement rates are lower than national rates, its expense base for its physicians and healthcare professionals, technology, and high-complexity supplies to support complex surgeries and procedures are not adjusted to the reimbursement realities it faces. Access to 340B savings and streamlined administration of the program enable UAB Hospital to provide unique, life-saving services to all citizens of Alabama. Increasing the burden and costs of administering the 340B program and restricting upfront discounts will restrict UAB Hospitals ability to provide key services that enable patients to receive timely access to care in lower cost settings. To offset these costs, programs such as the HRTSA Heart Failure Clinic and PATH Diabetes clinic, the high-risk fund, and navigation services for cancer patients may be at risk. Such a path will reduce access to care, increase utilization of high-cost emergency department and inpatient resources, and negatively impact care outcomes for the people of Alabama. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. UAB reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered numerous problems with the various systems, including Beacon, interfacing with each other. Efforts To Avoid 340B/MDPNP Duplicate Discounts. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated any systemic integrity issues in the Program. HRSA has also made clear that drug companies themselves have other available lawful options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on UAB, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. To the extent HRSA determines that further measures are needed, we would note various viable, lawful, and significantly less burdensome alternatives to rebates. For example, HHS could require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level could be used to address MDPNP nonduplication. Likewise, we would support the AHAs proposal to adopt a neutral third-party clearinghouse to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a data-driven, reasoned explanation for why these alternatives are neither viable nor less costly than a dubious rebate mechanism. Other General Concerns with Any Manufacturer-Directed Program. Finally, we would be remiss not to express our deep concerns that manufacturers and their contractors will inappropriately delay or deny, with no or inadequate explanation, otherwise legitimate rebate claims. As UAB and our patients will already bear the substantially increased program costs, including the cost of dealing with denials (and delays), it is crucial that any rebate program require manufacturers to provide helpful, specific detail for any delay or denial, so we can appropriately and quickly respond in kind. Moreover, it is crucial that the proposed pilot program (and any current or future manufacturer-directed program) provide that civil monetary penalties and other appropriate sanctions be imposed for any inappropriate rebate delays or denials, as well as for any underlying acts, omissions, or other failures of manufacturers or their contractors resulting in such delays or denials. For all of these reasons, UAB respectfully submits that the costs and other potential consequences of any Rebate Program will far outweigh any expected benefits. HRSA therefore should abandon the concept altogether and consider one or more of the alternative approaches noted above. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow UAB and other covered entities ample notice and opportunity to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, program sanctions, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We therefore reserve the right to so provide further comment (as well as any other rights and remedies that may be available to us should HRSA proceed with these or other adverse Program changes). In addition, such fundamental changes to a longstanding program in the middle of our fiscal year are highly disruptive to our organization and totally unreasonable. At a minimum, the lead time fairly required to operationalize such changes adequately, including budget planning and cash flow projections, would be not less than 18 months. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients in Alabama and across our Nation who rely on and benefit from the current 340B Program. Please contact me if you have questions. Sincerely, Dawn Bulgarella, CEO UAB Health System Office of the Chief Executive Officer ALGEN Suite 800 | 701 19th Street South Mailing Address: ALGEN 800 | 500 22nd Street South | Birmingham, AL 35233 205.934.2152 | uabmedicine.org
HRSA-2026-0001-1832Predicate RX2026-04-20T04:00Z44,031 chars
Predicate RX LLC submits that the 340B Rebate Model Pilot is the wrong solution to a real problem. The two integrity failures manufacturers cite patient eligibility verification and duplicate discount prevention do not require claims-level data disclosure from covered entities, and do not require dismantling the 34-year upfront discount structure. They can be solved, today, with zero-knowledge cryptographic proofs running on pharmaceutical infrastructure already in production since 2019. This comment describes that alternative, its technical architecture, and why the administrative record the D.D.C. required in Am. Hosp. Ass'n v. Kennedy cannot be complete without it. P R E D I C A T E R X TM 1 PREDICATE RX LLC Zero-Knowledge Compliance Infrastructure for the 340B Drug Pricing Program Contact: Stephen Elms, Chief Executive Officer Jackson, Wyoming | steve@predicateRX.com April 20, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Submitted via: 340BPricing@hrsa.gov Submitted via regulations.gov: HHS Docket No. HRSA-2026-03042 Executive Summary Predicate RX LLC respectfully submits these comments in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program (90 Fed. Reg. 7287, Feb. 17, 2026), as extended to April 20, 2026. We write as a technology company that has developed zero-knowledge cryptographic proof infrastructure specifically designed to resolve the programme integrity problems that motivated manufacturers' interest in the rebate model and to do so without the cash flow disruption, administrative burden, and legal risk that a rebate structure imposes on covered entities. Our comment advances a single overarching argument: the information problem that the rebate model was designed to solve has a technically superior solution that does not require the upfront discount structure to change. Manufacturers have articulated two core integrity needs per-transaction patient eligibility verification and duplicate discount prevention neither of which requires claims-level data disclosure from covered entities, and neither of which is best addressed by converting the programme's 34-year upfront discount structure to a post-purchase rebate workflow. Both can be addressed through zero-knowledge proof circuits that generate mathematical compliance certificates at the moment of every transaction, using data that never leaves the systems that hold it. The prior pilot and what HRSA's record must now address. In Am. Hosp. Ass'n v. Kennedy, No. 2:25-cv-00600-LEW (D. Me.), the U.S. District Court for the District of Maine vacated the 340B Rebate Model Pilot Program on February 10, 2026. The court's analysis identified two specific gaps in the administrative record: inadequate consideration of the operational and financial impacts of a rebate model on covered entities who have relied on upfront discounts for 34 years, and insufficient engagement with available alternatives that could achieve the same programme integrity goals without displacing that structure. The court was explicit that a rebate model is not categorically impermissible under the statute but that any future rebate P R E D I C A T E R X TM 2 programme must address these gaps directly. This comment provides the technical alternative that belongs in that record. We urge HRSA to: Consider ZK proof infrastructure as a primary alternative before implementing a rebate model, given that the core programme integrity goals motivating the rebate model duplicate discount prevention and patient eligibility verification can be achieved technically without structural changes to the upfront discount mechanism that covered entities have relied on for 34 years. Initiate a ZK Proof Infrastructure Pilot in parallel with this RFI process, authorising voluntary deployment of zero-knowledge ceiling price commitment proofs on the MediLedger pharmaceutical traceability network for IRA-negotiated drugs, with HRSA monitoring and reporting on pilot results. Incorporate ZK proof reference architecture into any future programme guidance addressing duplicate discount prevention, patient eligibility verification, and the 340B/MFP intersection as a primary compliance mechanism rather than an administrative alternative. I. Background and Commenter Identity Predicate RX LLC is a technology company based in Jackson, Wyoming that has developed zero- knowledge proof circuits specifically designed to address the programme integrity compliance problems of the 340B Drug Pricing Program. Our platform operates under a patent portfolio covering zero- knowledge separation proof architecture (LITHOSENSE-007, provisional filed April 2026; LITHOSENSE- 008, covering six pharmaceutical compliance circuits ZK-1 through ZK-6, non-provisional filed concurrent with this comment). We are submitting these comments as a technology stakeholder, not as a covered entity or manufacturer participant. Our interest is in ensuring that HRSA's administrative record for any future programme design includes a technically grounded analysis of the zero-knowledge proof alternative an alternative that was not production-ready when the first rebate model was proposed, but that now operates on existing pharmaceutical supply chain infrastructure. Zero-knowledge proofs are a mature cryptographic technology. The mathematical foundations were established by Goldwasser, Micali, and Rackoff in 1985 (ACM STOC). The specific proof protocol we deploy Groth16 on the BN254 elliptic curve has been in production use since 2018 (Zcash Sapling upgrade). MediLedger (operated by Chronicled Inc.) has deployed zero-knowledge proof infrastructure for pharmaceutical chargeback verification and DSCSA track-and-trace since 2019. Our platform extends that existing production infrastructure to the 340B programme compliance domain. II. The Information Problem Why the Rebate Model Does Not Solve It A. The Two Compliance Problems Manufacturers Identified Manufacturers have articulated their interest in the rebate model in terms of two distinct compliance problems, both acknowledged in the RFI: Problem 1 IRA Maximum Fair Price intersection. Under the Inflation Reduction Act, manufacturers must charge covered entities the lower of the 340B ceiling price or the MFP for drugs subject to Medicare price negotiation. The IRA non-duplication provision at 42 U.S.C. 1320f-2(d) P R E D I C A T E R X TM 3 prohibits manufacturers from paying both a 340B discount and an MFP price on the same claim. Manufacturers argued that without claims-level data, they cannot verify whether a 340B purchase is by a patient entitled to the MFP price. Problem 2 Duplicate discount prevention. 42 U.S.C. 256b(a)(5)(A)(i) prohibits manufacturers from providing both a 340B discount and a Medicaid Drug Rebate on the same drug unit. Manufacturers argued that without per-dispense eligibility data from covered entities, they cannot verify that a drug sold at 340B price will not also be claimed for a Medicaid rebate. These are real problems. We do not dispute the validity of either compliance concern. What we dispute is the diagnosis that claims-level data disclosure from covered entities is the only mechanism capable of resolving them. B. The Rebate Model Is an Administrative Solution to an Information Architecture Problem The rebate model resolves these problems by converting the discount from upfront to post-purchase, creating a workflow in which covered entities must submit claims data to obtain a rebate. The claims data submission requirement is the mechanism the rebate structure is the delivery method. This is an administrative solution to what is fundamentally an information architecture problem. The rebate model's reliance on claims data submission as its verification mechanism creates cash flow and administrative burdens that are unnecessary if the verification can be achieved technically which, as this comment demonstrates, it can. What the prior litigation requires of any successor programme. In Am. Hosp. Ass'n v. Kennedy, No. 2:25-cv-00600-LEW (D. Me., vacated Feb. 10, 2026), the court identified two specific deficiencies in the administrative record: (1) the record did not adequately address the operational and financial impacts on covered entities that have built programmes around upfront discounts over 34 years; and (2) the record did not sufficiently engage with whether alternative approaches could achieve the same programme integrity goals with less disruption. The court ruling was not a categorical prohibition on rebate models it was a direction to do the analysis properly. Any successor programme administrative record must directly address both deficiencies. This comment addresses deficiency (2) the alternatives analysis in full. The court did not hold that a rebate model is categorically impermissible under the statute. It held that the administrative record must directly confront the 34-year reliance interest and the alternatives including technical alternatives that would address manufacturers' stated needs without displacing the upfront discount structure. This comment provides the basis for that record. III. The Zero-Knowledge Proof Alternative: Technical Architecture A. Overview A zero-knowledge proof is a cryptographic protocol that allows one party (the prover) to convince another party (the verifier) that a specific statement is true, without disclosing any information beyond the truth of that statement. The proof output is 256 bytes three elliptic curve elements on the BN254 curve verifiable by any party in approximately 3 milliseconds. It is computationally infeasible to forge: the security margin is equivalent to 2128 to 1, the standard for 128-bit cryptographic security. P R E D I C A T E R X TM 4 The Predicate RX platform operating under LITHOSENSE-008 consists of six proof circuits, each addressing a distinct 340B compliance verification requirement: Circuit Rule proved What it proves What is NOT disclosed ZK-1 transaction_price AMP URA Ceiling price compliance Manufacturer AMP, URA, or net price ZK-2 SGTIN Medicaid rebate accumulator No duplicate discount on this drug unit Medicaid claims data or SGTIN set contents ZK-3 P1 AND P2 AND P3 = TRUE (all binary) Patient satisfies all three eligibility predicates Patient identity, PHI, diagnosis, encounter date ZK-4 plan_charge = pharmacy_pay + disclosed_fee No PBM spread on this settlement Plan payment or pharmacy reimbursement rate ZK-5 patient_savings 340B_ceiling_discount Patient received the 340B discount Patient cost-sharing data or pharmacy contract terms ZK-6 Reserved for additional MFP intersection circuits IRA/MFP nonduplication Reserved A2. Performance Specifications Production Benchmarks The following performance benchmarks reflect production hardware (16-core AMD EPYC CPU, 128GB RAM, 2TB NVMe) using gnark (Go) or Circom circuit frameworks with Groth16 proving on BN254: Application Constraint count Proving time Daily capacity (1 server) Verification time Prior Authorisation (ZK-3, GBT model) 7,291 15ms 2.8M decisions 3ms 340B Compliance (ZK-1/ZK-2, Logistic) 184 0.4ms 200M transactions 3ms Financial Lending (ZK, Deep FFN) 11,123 22ms 3.9M applications 3ms Key efficiency insight: PredicateZK proves input independence rather than the entire model computation. Traditional zero-knowledge ML approaches require proving the full AI computation approximately 4.5 billion constraints for a ResNet-50 model. PredicateZK proves only that the input partition was maintained (that prohibited data did not contaminate the permitted computation) approximately 7,000 constraints for a gradient boosted tree model. This is 2-5 orders of magnitude more efficient than published ZKML approaches, and the efficiency is depth-agnostic: a 50-layer neural P R E D I C A T E R X TM 5 network requires approximately the same constraint count as a 3-layer network because transitivity allows proving only the Layer 1 input separation. Per-proof cost economics: Compute cost approximately $0.0001 per proof on commodity hardware; 256 bytes storage per certificate; standard HTTPS API network cost. Total steady-state cost: $0.01$0.10 per compliance proof. B. ZK-3: Patient Eligibility Without Claims-Level Data Disclosure The ZK-3 circuit is the most directly relevant to manufacturers' programme integrity concerns and to the AbbVie D.D.C. litigation. On April 8, 2026, AbbVie filed Case 1:26-cv-01190 (D.D.C.) against HRSA seeking declaratory and injunctive relief, explicitly arguing that the 1996 HRSA patient definition cannot be enforced at the transaction level without claims-level data and that HRSA's rejection of AbbVie's audit workplans left the company with no mechanism to verify per-prescription eligibility. AbbVie's proposed four-part patient test (Case 1:26-cv-01190, D.D.C., April 8, 2026): (1) The prescription is connected to care at the covered entity not from a different doctor or for an unrelated reason. (2) The clinical encounter involved actual diagnosis or treatment not a cursory or administrative contact. (3) There is ongoing active care management of the patient by the covered entity provider. (4) The patient was seen within the past 12 months. AbbVie's complaint identified specific purchasing pattern anomalies at covered entities that it argues are inconsistent with genuine patient relationships under any reasonable reading of the statute including prescribing volumes inconsistent with patient panels, and claims from multiple affiliated entities for the same patient on the same date. HRSA rejected AbbVie's proposed audit workplans because they applied a patient definition stricter than the 1996 guidance supports. ZK-3 resolves this dispute by providing transaction-level verification under any operative definition, without PHI disclosure. ZK-3 directly addresses this: it evaluates three binary predicates at the moment of prescribing, using the patient's EHR record as a private witness. All three predicates must be TRUE. One FALSE = no valid certificate generated. The predicates are: Predicate 1 (P1) Care relationship: Patient has at least one qualifying encounter at this covered entity within the 24-month lookback window (encounter_date prescription_date lookback AND encounter_provider_NPI OPAIS_roster[covered_entity_id]). Predicate 2 (P2) Provider registration: Prescribing provider NPI is currently listed in the OPAIS roster for this specific covered entity at the date of prescribing. Predicate 3 (P3) Prescription connection: Drug therapeutic class matches an active diagnosis associated with encounters at this covered entity. Prescription is not for an unrelated condition. Critical architectural point: the circuit is definition-agnostic. It encodes whichever patient definition is operative at the time the proof is generated. AbbVie's proposed four-part test, if adopted by the D.D.C. court, becomes a new circuit version (ZK-3-v2.0) issued immediately. The current 1996 three-part definition remains ZK-3-v1.3. Historical certificates remain valid under their operative version. New certificates immediately reflect any new standard. The circuit version identifier is permanently P R E D I C A T E R X TM 6 embedded in every certificate the methodology is self-documenting across any regulatory change, court order, or Congressional action. ZK-3 and the AbbVie D.D.C. litigation. ZK-3 provides the per-prescription eligibility verification mechanism that AbbVie's complaint states currently does not exist. It makes transaction-level enforcement of a clear patient definition possible under any definition the court, Congress, or HRSA adopts without PHI disclosure to the manufacturer. If HRSA references ZK-3 in its programme guidance, it provides a technically grounded resolution to the data disclosure dispute underlying both the rebate model controversy and Case 1:26-cv-01190. The litigation seeks transaction-level enforcement. ZK-3 delivers it. C. ZK-2: Duplicate Discount Prevention Structural, Not Administrative The ZK-2 circuit addresses duplicate discount prevention at the structural level. It uses the DSCSA serialisation infrastructure already deployed under the Drug Supply Chain Security Act: every drug unit carries a Serialised Global Trade Item Number (SGTIN) scanned at every custody transfer under DSCSA. Full DSCSA serialisation compliance reached across the entire US pharmaceutical supply chain in November 2023. At the moment of 340B dispense, the pharmacy commits the drug unit's SGTIN to a cryptographic accumulator on the MediLedger network the same network used for DSCSA pharmaceutical traceability. The ZK-2 circuit proves that this SGTIN is absent from the set of SGTINs for which a Medicaid Drug Rebate has previously been claimed. This is a non-membership proof: mathematically, the circuit proves absence without revealing the Medicaid claims data or the SGTIN set contents to any party. The result is structural rather than administrative. A drug unit that has generated a valid ZK-2 proof at 340B dispense cannot subsequently generate a valid Medicaid rebate claim for the same unit without producing a proof that contradicts the first. The duplicate discount does not become harder to commit it becomes mathematically impossible to process undetected. The transition is from "prohibited but undetectable" to "structurally impossible." D. ZK-1: IRA Maximum Fair Price Intersection ZK-1 resolves the IRA/MFP intersection problem identified in the RFI. Under 42 U.S.C. 1320f-2(d), manufacturers that agree to a maximum fair price are not required to provide a covered entity access to both the MFP and the 340B discount simultaneously the non-duplication provision prohibits paying the effective equivalent of both. ZK-1 operates as follows: the manufacturer commits its quarterly ceiling price and, for IRA-selected drugs, the MFP as a cryptographic commitment on MediLedger at the start of each quarter, concurrent with the existing OPAIS quarterly pricing submission. This is one additional API call. The commitment reveals nothing about the actual price. It creates a verifiable public record that the manufacturer committed to a specific ceiling for a specific quarter. Any 340B purchase in that quarter can be verified against the commitment confirming that the price charged was the lower of the 340B ceiling and the MFP without either party disclosing the actual price. E. Why This Was Not Available Until Now The Three Enabling Conditions P R E D I C A T E R X TM 7 It is accurate that ZK proofs have existed since 1985 and that the 340B programme has existed since 1992. The question of why this solution was not available earlier is important to HRSA's consideration of its administrative alternatives. Three specific conditions that did not previously coexist became simultaneously true only in late 2023: Condition 1 Mature ZK proof systems (reached production: 2016-2018). Groth16 (2016) reduced proof generation to seconds and proof size to 256 bytes. Before Groth16, proof sizes were measured in megabytes and generation times in hours incompatible with per-transaction pharmaceutical compliance at volume. MediLedger confirmed pharmaceutical production readiness in 2019. Condition 2 Complete pharmaceutical serialisation (DSCSA, November 2023). ZK-2's non- membership proof requires a unique identifier for every drug unit. DSCSA full serialisation compliance reached the entire US pharmaceutical supply chain in November 2023. ZK-2 became technically possible that month. Condition 3 Trusted pharmaceutical network (MediLedger, live since 2019). Even with mature ZK proofs, deployment requires trusted network infrastructure that manufacturers, distributors, and pharmacies already connect to. MediLedger has operated ZK-based pharmaceutical chargeback verification since 2019 and DSCSA traceability since 2023. AbbVie, AmerisourceBergen, McKesson, major pharmacies and PBMs already connect. The separation predicate architecture the specific innovation developed by Predicate RX is the fourth element: a formal method for decomposing a multi-party compliance obligation (where each party holds data the others cannot legally see) into independent proof streams that link into a single verified chain without private data ever crossing an organisational boundary. This architecture did not previously exist in codified form for the 340B compliance domain. Patent pending: LITHOSENSE-007. IV. Response to Specific RFI Question Categories A. Costs to Covered Entities Under the status quo: covered entities bear costs for 340B split-billing software and third-party administrators (TPAs). Industry estimates place per-covered-entity annual TPA fees at $15,000$45,000 depending on programme volume. Under the rebate model: covered entities would bear: (a) capital costs for systems to submit claims- level data in manufacturer-specified formats; (b) staff costs for managing rebate submission workflows and denial tracking; and (c) cash flow costs from purchasing drugs at WAC and awaiting rebate payment. The AHA estimated these costs at hundreds of millions of dollars annually for large health systems. The irreparable harm finding in Am. Hosp. Ass'n v. Kennedy (Doc. 90, p. 19) specifically cited "$400 million in compliance costs" for AHA members alone. Under the ZK proof alternative: the upfront discount structure is preserved entirely. The incremental operational burden on a covered entity is integration work within the existing EHR system to enable the ZK-3 eligibility proof module, which runs automatically at prescribing. The dispensing-side ZK-2 proof requires one additional API call at SGTIN scanning infrastructure that already exists under DSCSA. We estimate the incremental cost at less than one FTE per year in ongoing monitoring, and first-deployment cost at $150,000$220,000 for a single IRA-selected drug on MediLedger. B. Programme Integrity and Potential Benefits P R E D I C A T E R X TM 8 (i) Duplicate discounts The rebate model addresses duplicate discounts through claims data submission an administrative mechanism subject to data quality failures, state Medicaid agency coordination failures, and manufacturer screening accuracy. Historical experience with the Medicaid Exclusion File demonstrates these limitations: HRSA's own audit data shows a material rate of duplicate discount errors under the current regime, and the GAO has flagged that many prior oversight recommendations remain unimplemented. ZK-2 eliminates duplicate discounts structurally. A drug unit that has generated a valid ZK-2 non- membership proof at 340B dispense cannot generate a valid Medicaid rebate claim for the same unit. The mathematical property holds regardless of claims data quality, state Medicaid agency cooperation, or manufacturer screening accuracy. A ZK-2 deployment on MediLedger would be the first mechanism in programme history to resolve duplicate discounting at the transaction level rather than through retrospective audit. (ii) Diversion Diversion is addressed by ZK-3. A drug sold to a patient who does not satisfy all three binary eligibility predicates cannot generate a valid ZK-3 certificate. The absence of a valid certificate does not prevent the prescription from being filled access is never gated on proof status but it creates a contemporaneous compliance record that is mathematically superior to any attestation-based system as evidentiary support in an HRSA ADR proceeding or manufacturer audit. (iii) Pricing transparency ZK-1 provides pricing transparency without disclosing competitive pricing information. The cryptographic commitment to the ceiling price creates a verifiable public record that the manufacturer committed to a specific price and that the price charged was at or below that commitment without revealing the actual price. This is transparency without disclosure: the compliance fact is proved, the commercial data is protected. C. What Any Successor Programme Must Address HRSA's RFI asks how a rebate model should be designed. We submit that before design choices are made, two structural questions deserve resolution in the administrative record. First: scope. A rebate model as currently conceived would address only MFP deduplication on IRA- selected drugs. The broader programme integrity questions patient eligibility verification, ceiling price compliance, and duplicate discount prevention on all 340B drugs across 12,700+ covered entities would remain unaddressed by the rebate structure. Any programme design should be explicit about which integrity problems it solves and which it does not. Second: alternatives. The prior litigation established that the administrative record for any rebate model must engage directly with whether alternative approaches exist that achieve the same programme integrity goals with less disruption to covered entities' operations. The ZK proof alternative described in this comment is that approach for the duplicate discount and patient eligibility problems specifically. We are not suggesting that a rebate model and ZK proof infrastructure are mutually exclusive both could potentially operate in parallel but the record should reflect that the core information problems motivating the rebate model can be resolved technically without a structural change to the discount mechanism. D. Manufacturer Efforts to Avoid Duplicate Discounts P R E D I C A T E R X TM 9 Current manufacturer duplicate discount avoidance relies on: (a) the Medicaid Exclusion File, updated quarterly; (b) TPA-administered 340B claims reconciliation services; and (c) retrospective audit under the HRSA ADR process. The GAO has documented that MEF-based prevention is not fully effective. The ZK-2 non-membership proof replaces this entire compliance stack with a per-transaction mathematical certificate generated at the moment of dispense. No quarterly update cycle. No TPA reconciliation. No retrospective audit. For IRA-selected drugs under the MDPNP non-duplication provision, ZK-1 and ZK-2 together provide: (a) per-quarter proof that the manufacturer's ceiling price commitment satisfies the lower-of-340B-ceiling-or-MFP requirement; and (b) per-dispense proof that no Medicaid rebate has been claimed for the same drug unit. This is precisely the verification package that manufacturers cited when requesting the rebate model delivered without cash flow disruption to covered entities. E. Data Collection We note that this question reflects a fundamental architectural assumption of the rebate model: that programme integrity requires data flow from covered entities to manufacturers. We submit that this assumption should be examined before the question of what data should flow is addressed. The relevant question is not what data should covered entities transmit but rather what compliance facts need to be verified, and what is the minimum information required to verify them. Under a ZK proof architecture, the answer is: zero additional data needs to flow from covered entities to manufacturers to verify patient eligibility or duplicate discount status. The only new data element is a proof reference identifier a short cryptographic hash linking the claim to the relevant proof record on MediLedger which fits within the existing TB modifier claim field. No PHI, no claims data, no patient identifiers, and no commercially sensitive information moves anywhere it does not currently move. Recommendation: HRSA should frame data collection requirements around minimum necessary data disclosure. The zero-knowledge proof standard "prove the compliance fact without revealing the underlying data" should be the design benchmark against which any data collection requirement is measured. F. Cash Flow and Timing The cash flow harm of the rebate model is not merely an implementation challenge; it is a consequence of the model's fundamental structure. Under any rebate model, covered entities must purchase drugs at WAC and wait for rebate payment. For IRA-negotiated drugs with a 340B discount approaching 50% of WAC, the aggregate working capital requirement across 14,000 covered entities represents a multi-billion-dollar cash flow burden imposed on safety-net providers specifically the burden that the Am. Hosp. Ass'n v. Kennedy court found constituted irreparable harm (Doc. 90, p. 19: "$400 million in compliance costs" for AHA members alone). The ZK proof alternative imposes zero cash flow cost on covered entities. The upfront discount structure is preserved entirely. The only new operational requirement is proof generation, which occurs in the background of existing workflows at zero marginal cost per transaction. Particular benefit to safety-net providers. Rural hospitals, critical access hospitals, FQHCs, and Ryan White clinics typically operate with limited working capital reserves. These are precisely the institutions the 340B programme was designed to serve, and precisely the institutions least able to absorb the cash flow disruption of purchasing drugs at WAC while awaiting rebate reimbursement. The ZK proof architecture reaches these institutions's compliance problems the inability to verify patient eligibility or prevent duplicate discounts without any of the financial disruption. A covered entity operating a P R E D I C A T E R X TM 10 340B programme at a rural critical access hospital benefits identically to a major urban health system under the ZK architecture, at equivalent per-transaction cost. The programme's benefit is protected for the institutions that need it most. G. Alternatives and Scope-Limiting Measures HRSA specifically invited comments on proposed alternatives. This section addresses that invitation directly. Primary Recommendation: ZK Proof Infrastructure Pilot Programme ZK-1 Ceiling Price Pilot. One or more manufacturers voluntarily deploy ZK-1 ceiling price commitment proofs on MediLedger for IRA-selected drugs during the next quarterly OPAIS filing cycle. HRSA monitors and publishes proof generation and verification statistics. Programme: 22 weeks from deployment to first quarterly production data. Cost: approximately $150,000$220,000 total for the first manufacturer deployment, borne jointly by the manufacturer and Predicate RX LLC. ZK-2 Duplicate Discount Pilot. HRSA authorises a concurrent pilot in which ZK-2 non-membership proofs are generated at 340B dispense for IRA-selected drugs, using the DSCSA SGTIN serialisation infrastructure on MediLedger. Pilot metrics: proof generation rate, non-membership proof validity rate, and comparison of duplicate discount findings under the existing MEF system versus the ZK-2 system. ZK-3 Patient Eligibility Pilot. HRSA coordinates with one or more EHR vendors Epic Systems is the appropriate first partner, given its existing 340B attestation module infrastructure to develop a ZK-3 patient eligibility proof module. Pilot timeline: 69 months for module development; production deployment Q1 2027. HRSA should include ZK-3 pilot design specifications in any future programme guidance as the patient eligibility verification standard consistent with any operationalised patient definition, including AbbVie's proposed four-part test in Case 1:26-cv-01190. Secondary Recommendation: Programme Guidance Reference Architecture We recommend that HRSA include in any future programme guidance a reference to ZK proof architecture as an approved technical mechanism for: (a) manufacturer ceiling price compliance verification (ZK-1) as an alternative to manufacturer self-certification; (b) patient eligibility verification at prescribing (ZK-3) as an alternative to covered entity attestation, under any operative patient definition; and (c) duplicate discount prevention at dispense (ZK-2) as an alternative to or supplement to MEF- based procedures. Tertiary Recommendation: CMS TB-Modifier Proof Reference Field We recommend HRSA coordinate with CMS to evaluate a ZK proof_ID reference field in the TB-modifier 340B pharmaceutical claim structure. The proof_ID would reference the relevant ZK proof in the MediLedger registry not a data disclosure requirement but a compliance certification reference. CMS used subregulatory guidance under existing IRA Section 1847A authority to mandate the TB modifier in December 2022; the same authority supports a voluntary proof_ID field addition with a pathway to mandatory status as proof generation reaches scale. V. Statutory Authority and Legal Framework Section 340B of the Public Health Service Act, 42 U.S.C. 256b, requires manufacturers to sell covered outpatient drugs to covered entities at or below ceiling prices. The statute does not specify the P R E D I C A T E R X TM 11 mechanism by which compliance is verified. The Secretary has broad administrative authority to establish programme integrity mechanisms under the general authority granted by the statute. The APA analysis applicable to the rebate model does not apply to the ZK proof alternative. A ZK proof pilot programme operated as a voluntary enhancement to existing MediLedger infrastructure does not alter the existing upfront discount requirement and therefore does not implicate the reliance interests that led Judge Walker to vacate the rebate pilot in Am. Hosp. Ass'n v. Kennedy. HRSA can authorise a ZK proof pilot at any time, without the formal notice-and-comment requirements that constrained the rebate model's procedural path and produced the inadequate administrative record the court identified. This distinction is material. The first rebate pilot was vacated because it imposed substantial new obligations purchasing drugs at WAC, submitting claims data, adapting to new systems on a five- month timeline on entities with a 34-year reliance on upfront discounts. The ZK proof pilot imposes none of these obligations. It is purely additive. Covered entities that do not participate are not disadvantaged. Manufacturers that do not participate continue under the existing discount structure. HRSA's authorisation of the pilot is an administrative approval of a voluntary technical enhancement, not a reversal of programme structure. VI. Conclusion The manufacturers who sought the rebate model had legitimate programme integrity concerns. They could not verify, at the transaction level, whether patients receiving 340B drugs were genuinely eligible patients of the covered entity, and whether those drug units might also be claimed for Medicaid rebates. The rebate model addressed those concerns by creating a claims data submission workflow an administrative mechanism that resolved the information problem at the cost of disrupting the programme's 34-year upfront discount structure and imposing substantial cash flow and administrative burdens on covered entities. Zero-knowledge proof infrastructure resolves the same information problems through mathematics rather than administration. It gives manufacturers per-transaction evidence of patient eligibility and duplicate discount clearance without requiring any data to leave the covered entity's network. It preserves the upfront discount structure entirely. It operates on existing pharmaceutical supply chain infrastructure that has been in production use since 2019. The court that vacated the rebate pilot required HRSA to confront two specific failures: inadequate consideration of a 34-year reliance interest, and failure to consider available alternatives. This comment directly addresses both. The ZK proof alternative: (a) fully preserves the reliance interest the court identified; and (b) achieves manufacturers' stated programme integrity goals through a mechanism the court's holding does not reach. These are not equivalent options that HRSA may choose between without explanation. Under the APA, when a technically superior alternative exists that achieves the same regulatory goals with less disruption to reliance interests, the administrative record must engage with it directly. We ask HRSA to: Authorise a 22-week ZK-1 ceiling price commitment proof pilot on MediLedger for one or more IRA- selected drugs, beginning no later than Q3 2026, with HRSA monitoring and public reporting on results; P R E D I C A T E R X TM 12 Include ZK proof architecture (specifically ZK-2 for duplicate discount prevention and ZK-3 for patient eligibility verification under any operative patient definition) as a referenced alternative mechanism in any future programme guidance addressing programme integrity; and Coordinate with CMS to evaluate a voluntary proof_ID reference field in the TB-modifier 340B claim structure, with a publicly announced pathway to mandatory status contingent on pilot production results. We are available to brief HRSA's Office of Pharmacy Affairs on the technical architecture described in this comment at any time. We would welcome the opportunity to demonstrate the proof generation and verification workflow on the MediLedger infrastructure in a live demonstration at HRSA's offices in Rockville. Respectfully submitted, Stephen Elms Chief Executive Officer Predicate RX LLC Jackson, Wyoming steve@predicateRX.com April 20, 2026 P R E D I C A T E R X TM 13 Appendix A: Technical Reference Zero-Knowledge Proof System Parameters Cryptographic protocol Groth16 on the BN254 (alt-bn128) elliptic curve Security level 128-bit (2128 to 1 probability of forging a valid proof) Proof size 256 bytes uncompressed (two G1 elements at 64 bytes each, one G2 element at 128 bytes); 128 bytes with point compression Verification time Approximately 3 milliseconds (three elliptic curve pairing computations) Proving time 215 seconds per proof depending on circuit complexity (ZK-3 is the most complex) Prior art Groth16 protocol: Jens Groth, "On the Size of Pairing-based Non-interactive Arguments," EUROCRYPT 2016. Production deployment at scale: Zcash Sapling upgrade, October 2018 Existing production infrastructure MediLedger (Chronicled Inc.) has operated Groth16-based ZK proof infrastructure for pharmaceutical chargeback verification and DSCSA pharmaceutical traceability since 2019, with participants including Amgen, Pfizer, AmerisourceBergen, McKesson, Walgreens, and Walmart MediLedger relationship MediLedger provides the network infrastructure (permissioned blockchain, ZK proof anchoring, SGTIN accumulator). Predicate RX provides the compliance circuit layer (ZK-1 through ZK-6). These are complementary and non-competing: MediLedger verifies commercial supply chain transactions; Predicate RX verifies regulatory compliance obligations. Neither system replaces the other Trusted setup Groth16 requires a one-time trusted setup ceremony per circuit. The trusted setup for the Predicate RX circuits will be conducted with HRSA invited as an independent participant to ensure programme integrity Open source components The snarkjs library (Protocol Labs / Iden3) provides the open-source Groth16 prover and verifier. Circuit definition language: Circom 2.0. Both are publicly available and auditable Appendix B: Glossary of Technical Terms Zero-knowledge proof A cryptographic protocol allowing one party to prove a statement is true without revealing any information beyond the statement's truth. Separation predicate The architectural primitive invented by Predicate RX: a formal method for decomposing a multi-party compliance obligation where each party holds data the others cannot legally see into independent proof streams that link into a single verified chain without private data crossing an organisational boundary. Patent pending: LITHOSENSE-007. Groth16 A specific zero-knowledge proof protocol (2016) producing 256-byte proofs verifiable in approximately 3 milliseconds. Used in Zcash, MediLedger, and Ethereum scaling solutions. P R E D I C A T E R X TM 14 BN254 / alt- bn128 An elliptic curve providing 128-bit cryptographic security, used in Ethereum and the Predicate RX circuits. Circuit A mathematical description of the compliance statement to be proved. The ZK-3 circuit encodes the 340B patient eligibility test as three binary predicates. A circuit is a compliance rule expressed in mathematics. Binary predicate A logical statement that evaluates to TRUE or FALSE only. ZK-3 uses three binary predicates no scores, no thresholds, no partial compliance. One FALSE predicate means no valid certificate is generated. Private witness Data used as input to a circuit computation that does not appear in the proof output. Patient PHI is a private witness in ZK-3. AbbVie's pricing formula (AMP, URA) is a private witness in ZK-1. Cryptographic accumulator A data structure supporting zero-knowledge non-membership proofs. Used in ZK-2 to prove a drug unit SGTIN is absent from the Medicaid rebate claims set without revealing the set contents. SGTIN Serialised Global Trade Item Number. The unique identifier assigned to each drug unit under the DSCSA pharmaceutical serialisation framework. Full compliance reached November 2023. MediLedger A permissioned blockchain network operated by Chronicled Inc. for pharmaceutical supply chain verification. In production since 2019. Connects AbbVie, AmerisourceBergen, McKesson, major pharmacies and PBMs. Circuit version hash A cryptographic hash of the regulatory text encoding the eligibility standard in a specific ZK- 3 circuit version. Allows historical proofs to remain valid when the patient definition changes. Each certificate permanently records which version governed the transaction. Verification key The cryptographic key used to verify proofs. Published openly at predicatezk.com/verify/zk- rx/v1 any party verifies any certificate in 3ms for free without Predicate RX involvement. Appendix C: Natural Language Rule Encoding Developer Interface The Predicate RX platform accepts compliance rules expressed in natural language and automatically generates the corresponding ZK circuit. This eliminates the need for compliance teams to understand the underlying cryptographic implementation. Natural language rule Automatic ZK circuit output "Patient must have an encounter at this covered entity within 24 months of prescribing" Binary predicate: encounter_date prescription_date 24 months AND encounter_provider_NPI OPAIS_roster. Automatic R1CS generation. Production-ready ZK circuit. P R E D I C A T E R X TM 15 "This drug unit has not been claimed for a Medicaid rebate" Non-membership proof: SGTIN Medicaid_rebate_accumulator. Cryptographic accumulator commitment. Structural impossibility of double-claiming. "Transaction price does not exceed AMP minus URA" Inequality proof: transaction_price AMP URA. Private witnesses: AMP and URA. Public output: binary VALID/INVALID. No pricing data disclosed. Rule chain composition supports regulatory complexity: approximately 50500 binary rules per regulatory domain in practice, with compositional dependencies (later rules may reference earlier outputs). The platform adds 15 constraints per rule dependency, keeping total constraint counts well within the performance envelope shown in Appendix A2. Predicate RX LLC HHS Docket No. HRSA-2026-03042 April 20, 2026
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See attached file(s) from Harris Health, Houston, Texas in reference to the HRSA RFI. Thank you for allowing us to share our thoughts and ideas. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 1 Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Harris Health of Houston, we appreciate the opportunity to comment on the Health Resources and Services Administration (HRSA) and Department of Health and Human Services (HHS) Request for Information (RFI): 340B Rebate Model Pilot Program. Harris Health is a fully integrated healthcare system providing care to all residents of Harris County, Texas regardless of their ability to pay. Harris Health was the first accredited healthcare institution in Harris County designated as a Medical Home and today is still one of the largest in the country with this designation. Harris Health includes 18 community health centers, eight homeless shelter clinics, five same-day clinics, three multi-specialty clinic locations, a dental center, a dialysis center, mobile health units and two full-service hospitals Ben Taub Hospital and Lyndon B. Johnson Hospital. In Fiscal 2025, Harris Health provided $805M in uncompensated care costs. The 340B Program supported us by providing upfront discounts for pharmaceuticals valued at approximately $275M, and we filled 1.95M outpatient prescriptions through our inhouse outpatient pharmacies. These numbers illustrate the outsized role that Harris Health has in our Houston community, and how important the 340B Program is in allowing us to fill that role. The 340B Program is essential to Harris Healths financial stability and our ability to deliver charity care, affordable drug access and comprehensive safety-net services. Because of our payer mix and role as a super safety-net provider, Harris Health is uniquely exposed to financial, operational, and patient-access harms associated with a rebate-based model. As explained below, any rebate mechanism will impose enormous costs and burdens on Harris Health that far outweigh any benefits that might come from it, thus, we continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. In our opinion, HRSAs objective to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In fact, HRSA must give primacy to the needs of Covered Entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Harris Health has relied on since the inception of the 340B Program, is the best way to fulfill that purpose. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking a rebate model in the 340B Program. Structuring both the 340B Program and the IRA negotiated pricing programs as upfront discounts would make them more efficient, more consistent with congressional intent and most certainly less prone to manufacturers abuse. The RFI poses numerous questions and encourages commenters to include supporting facts, research and evidence in their responses. Harris Health has done its best to provide detailed answers. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original proposed pilot and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, (per HRSAs February 25, 2026 Information Collection Request). As expected, with the addition of the 2027 drugs, our impact estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies will mean more claims to submit, more 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 2 rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Harris Health can spend on patient care and comprehensive health care services. We are certain that our current estimated cost impacts from a Rebate Program will need to be continuously reevaluated as more experience and nuance are uncovered. Importantly, in the proposed Rebate Pilot model, Harris Health would be required to front the drug manufacturers approximately $119.5M annually, essentially doubling our upfront costs, and meanwhile we wait in hopes that the rebates are processed timely and in accordance with HRSA requirements; this is an extreme risk in our view. Our monthly cash flow impact is $7.2M; which is not an insignificant amount. These impacts disrupt decades of business practices built around the 340B Program upfront discounts, and most certainly advantage the manufacturers, who now have the ability to abuse the program, and hold our significant funds hostage. Unfortunately, given our long experience with insurance companies, we are not confident that the manufacturers will abide by the well-intentioned guardrails HRSA has designed, and they will take every opportunity to take advantage of the considerable upfront monies they will now have access to. In addition, our recent experience with individual manufacturer data platforms (e.g. ESP) has been rife with costly and time consuming challenges, such as addressing errors with no ability to download a list of claims considered to be non-conforming, inconsistencies and vague or unclear error messages, and insufficient information at the claim level for denials, all of which adds a great deal of manual back tracking to find the claims in question. Access to 340B pricing is at risk, without a clear explanation of when and how this might occur, and what might the path be to rectify the situation, if this were to occur. We must dedicate staff to address these issues and respond to each non-conforming claim, or risk the loss of the 340B discount. This means our already tight resources are being realigned to deal with all of these new requirements. In our opinion, the manufacturers are being allowed to run their own version of the Rebate Pilot Program, though there is no rebate involved, only the possibility of losing access to the 340B upfront discount. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B Program has operated using an upfront discount approach. Covered Entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the Rebate Pilot model was not premised on addressing duplicate discounts, this is a chief manufacturer complaint and almost certainly underpins the manufacturer push for a rebate model. However, Covered Entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including OPAIS option to opt in for Medicaid, billing modifiers, HRSA and manufacturer audits, including the good faith effort work being done today through cooperation with both manufacturers and Covered Entities. We encourage HRSA to consider reforming the 340B Program, instead of instituting a Rebate Pilot Program. Some suggested reforms are: 1. A National Clearinghouse, 2. a complete redesign of the Child Site requirements using the CMS 855 records, 3. an improved, clearer patient definition, 4. and transparent annual reporting by both Covered Entities and manufacturers. We believe with these and possibly other robust reforms, the 340B Program would be more transparent and both Covered Entities and manufacturers would be assured of accurate discounts being provided, with even more protections in place to eliminate the possibility duplicate discounts. The National Clearinghouse option would also remove the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly, Novo Nordisk and AstraZeneca policies that attempt to unilaterally impose extra- statutory program requirements). As you may be aware, the Front Line Hospital Alliance (of which we are a member), has proposed a super safety net designation, and this could help protect hospitals like ours from the devastating impacts discussed in this letter. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 3 Administrative Costs under a Potential 340B Rebate Program. Any rebate program would require Harris Health to spend significant sums on new administrative costs. When we chose to participate in the 340B Program, Harris Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In effect, adding a Rebate model pilot basically adds a completely new set of work that must now be done, at the same time as maintaining the current workload required to manage the existing 340B Program. This is not an insignificant addition of work to an already overly taxed staff, especially given the fact that the additional work will not result in any tangible improvement to the Program as a whole. Staffing Impacts Under a Potential 340B Rebate Program. Harris Health does not currently have the staff needed to comply with a Rebate Program. We estimate a need to hire at minimum, two additional staff in order to manage the submission of claims data, reconciliations of denials and rebates, and working through the individual denials to determine what is necessary to turn the denied claim into an allowed claim. Our current staff would also be required to reallocate some of their work hours to assist in the rebate pilot work. This estimate is based upon the 25 drugs chosen for the Rebate Pilot Program, but due to the manual nature of reviewing denials and gathering the necessary information to submit and hopefully overturn said denials, and all of the manual reconciliations that will need to occur to ensure we are submitting 100% of the claims data and receiving 100% of the expected rebate monies, we fully expect that number to increase, and for current staff, continued and further realignment of their job duties will occur. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Harris Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We have already been spending significant IT and other resources in an effort to write reports and work flows to comply with not only the Rebate Pilot requirements, but also the individual manufacturer newly required claims data submissions, in order to maintain access to the 340B discounts (Elli Lilly, Novo Nordisk, Exelixis, AstraZeneca). At this time, we continue to analyze whether we should bring in an outside firm to assist with the new requirements. It may be necessary at some point, if we determine the burden to be too much to manage with internal resources, and we worry about the high costs associated with bringing in consultants to help. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect for those Covered Entities who only use inhouse pharmacies, such as Harris Health. o Currently, Harris Health collects, maintains, retains, and validates/audits data related to 340B Program participation. This continuous and ongoing work is done internally, is periodically reviewed by our Compliance team, and includes a robust cross- functional Governance Team for oversight. Prior to the notice of a Rebate Model Pilot in late 2025, Harris Health was not running claims reports in the Rebate Pilot format, nor were we submitting all of this data to our wholesaler and all that that entails. It is only recently that Harris Health began submitting claims data in the Rebate Pilot format to ESP for both Eli Lilly and Novo Nordisk, and most recently, AstraZeneca has been added to the list. Prior to February 1, 2026, the individual manufacturer claims filing requirements were for those Covered Entities that were using Contract Pharmacies. Again, Harris Health does not use Contract Pharmacies. o A potential 340B Rebate Model Pilot Program would absolutely change current data collection activities, adding a whole new subset of work required to accomplish the pilot claims data filing requirements, including ongoing reconciliations and manual review of individual denials. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 4 o HRSA has said in its Information Collection Request: OPA expects that data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in- house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant. Unfortunately, this is not accurate, and our preliminary estimates of additional time and money are significant. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Harris Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Harris Health is a public hospital funded in part by the County with ad valorem taxes. The taxes are remitted to our bank account at the beginning of the calendar year, and we use those funds throughout the year to pay our bills. As the year goes on, there is no replenishment of these ad valorem monies, and so there could be instances where our cash flow is impacted in such a way as to put us at risk of lower liquidity and possible violation of our bond covenants. In the past, HRSA has noted the position of drug companies is that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This may or may not be true, and assumes no delay due to denial of claims, which is a highly unlikely scenario. Harris Health currently operates under net fifteen (15) day payment terms with its wholesale drug supplier. This is longer than the HRSA 10-day requirement, however we fully expect rebate delays of at minimum 30 to 60 daysand this would create immediate financial strain. Such delays could force Harris Health to: Draw down limited operating reserves, Access external credit, or Delay or restrict inventory purchases. Given the volume and acuity of medications required to serve our patient population, extended rebate float is not operationally sustainable. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the Covered Entity immediately upon submission of claims. That is the only way to avoid allowing the manufacturers free use of our upfront paid monies. Adverse Impacts of these Additional Costs and Burdens. All of these many different costs and burdens add up to significant dollars. Unfortunately, this means that Harris Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. This uncertainty will impact our budget and planning processes, and could result in a direct impact to our patients if we had to delay or stop providing certain services. Currently, Harris Health provides low or no cost pharmaceuticals to our Financial Assistance qualified uninsured patients based upon our cost using 340B discounted prices; and this might need to be re-evaluated if the Rebate Pilot results in significant denials or slow paying of rebates. This would be monumentally harmful to our patient population, which is more than 43% uninsured. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 5 Below is a summary of our estimated monetary impacts: Projected annual permanent monetary loss to Harris Health is $15.8M, inclusive of additional staffing, technological support, consulting and legal fees and related costs. The annual amount under risk is $119.5M. In other words, we have the potential to lose $119.5M in rebates on monies already spent. Estimated Impact Rebate Pilot Harris Health Notes Total Float: Annual budgeted expenses will increase by this amount (Difference between 340B price & WAC price) $119,542,766 This is the annual impact of not receiving 340B discounts for the Pilot NDCs. This is the annual amount under risk of not receiving a rebate. Cash Flow Impact: Additional cash needed to carry the increased costs until rebates are paid. This is additional upfront cash needed for rebate exposure $7,205,317 This is the monthly cash flow impact of not receiving the 340B discounts upfront. Costs of Cash: 4% interest loss on the float for the timeframe between purchase & rebate $288,213 This is the value of interest lost due to not receiving the 340B discounts upfront. (Time value of money) Loss of 340B Subprime Discounts (Due to loss of 340B discount pricing) $569,705 Additional wholesaler discounts that could be lost Additional Administrative Costs (estimated minimums) $621,188 Estimate of costs to prepare for the Rebate Pilot, including new hires, consulting and legal, etc. Permanent Loss of Funds & Additional Costs $1,479,105 Additional Costs: Rebate Denials % 10% Estimate Only Wastage Loss % 2% Estimate Only Rebate Denials and Wastage Loss $14,276,767 Annual Rebate Pilot estimate of denials and wastage loss Total Annual Estimated Permanent Loss including Additional Costs to Manage the Program $15,755,873 *These estimates include the 25 Medicare Part D drugs under the Inflation Reduction Act in 2026 and 2027. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 6 Below is a table of summary level comparisons of the multitude of impacted areas: Comparative Table: Current State vs. Proposed Rebate Pilot Model (including 2026 & 2027 IRA Drugs) Aspect Current Upfront Discount Model HRSA Proposed Rebate Pilot Model Operational Efficiency Immediate savings applied at purchase Streamlined inventory and reconciliation Minimal administrative steps Complex, multi-step rebate process Requires new workflows, data extraction, validation, submission, tracking, and appeals Staffing Requirements Existing teams manage discounts with current resources Less labor-intensive Significant increase in administrative workload Permanent need for additional staff (data validation, rebate management, audit response) Impact on Smaller/ Safety-Net Hospitals Accessible for providers with limited resources Supports vulnerable populations Disproportionate burden on smaller/rural/safety-net hospitals lacking specialized personnel Clinical Outcomes Enables consistent medication access Maintains inventory of high-cost drugs Supports continuity of care Delayed savings may restrict medication purchases Risk of supply interruptions and reduced patient access Pharmacist Availability Focus on direct patient care, stewardship, counseling, and care coordination Administrative burden may divert pharmacists from clinical duties, impacting quality of care Financial Stability Immediate reinvestment of savings into essential programs Predictable cash flow Delayed reimbursement creates cash- flow gaps Jeopardizes funding for critical services and programs Budgeting and Planning Predictable financial planning Stable support for patient-centered initiatives Unpredictable rebate timing and amounts May delay or reduce investments in care and infrastructure Technology and Compliance Costs Minimal need for new systems Requires substantial investment in software, data integration, and compliance tools, recurring operational costs Risk of Disputes Low risk Straightforward discount eligibility High risk of disputes, rejected claims, and protracted appeals due to manufacturer-controlled processes 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 7 Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the Agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Harris Health reasonably relied on this long history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the Agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in pilot form. As an example, when preparing our annual budget, we estimate pharmaceutical costs using our historical expense based upon 340B priced pharmaceuticals. In addition, budgeted cash flow considers the outflow of monies for pharmaceutical costs based upon 340B pricing. A rebate model injects more uncertainty, and impacts our ability to accurately complete long-term planning and projects for new services, repairs, etc. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program Pilot, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. The enrollment process was tedious and it was evident that Beacon was populating our organizational record with incorrect information regarding our locations. It is important that Business Associate Agreements be an automatic part of signing up for these kinds of portals, in order to mitigate any privacy and security concerns related to patient information and data submission. There is no opportunity to question or ask for revision of Beacons Terms and Conditions. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Harris Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of Covered Entities, their patients and the communities they serve. Likewise, we support the position that there are viable, lawful and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity and many other potential benefits. In addition, there are billing modifiers that can be extremely useful and cause minimal disruption to current processes. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Manufacturers should not use Covered Entity Claims Data for Commercial Purposes. Pharmaceutical companies want to use Covered Entity claims data to avoid paying commercial rebates to pharmacy benefit managers (PBM) under voluntary agreements that ensure the manufacturers beneficial treatment under the PBMs formulary. This purpose has nothing to do with 340B Program integrity and Covered Entities should not be required to finance this goal. We urge HRSA not to authorize another 340B Rebate Pilot Program that forces super safety net providers like Harris Health to bear the cost of data sharing and purchasing drugs at non-340B pricing in order to assist with policing of manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use Covered Entity claims data for commercial purposes. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 8 For all of these above stated reasons, Harris Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse, and other suggested reforms. If, however, HRSA chooses to move forward with the Rebate Pilot model, it must allow Harris Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. In addition, if HRSA moves ahead with a rebate model over Covered Entities objections and in spite of evidence that a rebate model will not improve, but rather will undermine program efficacy, any model must be piloted on a very small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include real safeguards for Covered Entities and the 340B Program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to Covered Entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over 340B Program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B Program highlight the need to close any potential loopholes that could be used to damage the Program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B Program changes, and potential Legal, Compliance and other consulting fees to address denials or claims disputes. Operating what amounts to a secondary 340B Program for drugs subject to the Rebate Model will create significant financial strain at a time when many Covered Entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA is a current illustration of the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs increase across all non-340B drugs as well, because they must account for two separate reimbursement and workflow processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which Covered Entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: HRSA could require immediate payment of rebates upon claims data submission, which would alleviate the cash flow impact and risk to Covered Entities. To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful and clearly delineated. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials), with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non- compliance, with interest accruing on rebates not paid within the prompt payment window. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 9 HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into the 340B Program, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront or immediate payment requirements. Allowing manufacturers any flexibility in a pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B Administrative Dispute Resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the ADR process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow Covered Entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating customized programs to implement their own version of a rebate pilot. Such a permissive structure exposes Covered Entities to multiple data platforms and processes for claims submission, including variation in required data fields. This is particularly problematic because some Covered Entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create customized systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer or drug-specific systems on Covered Entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches similar to the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party clearinghouse platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B Program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging Covered Entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B Program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to Covered Entities and measure the negative consequences for patients. At minimum, the standards by which the Program is evaluated should be publicly available and subject to notice and comment. 4800 Fournace Place, Suite 600E, Bellaire, Texas 77401-2324 10 We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. In addition, we are in full support of the comments submitted by the Front Line Hospital Alliance (of which we are a member), including their proposal for a super safety net designation, which could help protect hospitals like ours from the devastating impacts discussed above. We are particularly interested in being a reliable partner in the Reform of the 340B Program, helping to make it stronger and effective for many years to come. Please contact me if you have questions. Sincerely, Esmaeil Porsa, M.D. President and C.E.O. Harris Health, Houston, Texas
HRSA-2026-0001-1834Primary Care Medical Services of Poinciana, Inc.2026-04-20T04:00Z19,346 chars
See attached file(s) Comment on FR Doc # 2026-03042 www.cpsceoiahealthcare.orgi Administration Building 1503 Bill Beck Blvd Kissimmee, FL 34744 407-943-8000 Osceola Community Health Services BUILDING A HEALTHIER FUTURE. ONE PATIENT AT A TIME. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: It was a typical moming at our in-house pharmacy processing prescriptions, completing daily tasks, and assisting patients picking up their medications. Then the phone rang. At the other end of the call, there was an upset, frantic, distraught patient crying patient who spoke with desperation in her voice. She explained that she was a patient of our clinic with multiple chronic conditions. Since she was uninsured, she uses the sliding fee program. She had just seen her primary care provider who sent her prescriptions to a retail pharmacy close to her home. Due to the cost ofthe medications at the retail pharmacy, she was unable to afford the medications. She knew without treatment, her conditions would progress, if not end her life. I informed her that our clinic had a pharmacy program to assist patients uninsured and underinsured to remove financial barriers and provide access to medications that are not affordable without insurance. I reassured her that I would get the prescriptions sent over to our clinic pharmacy and ensure that she received her medications. This is just one of the many stories that proves the impact of the 340B program and how it helps our patients live healthier lives. On behalf of Primary Care Medical Services of Poinciana, Inc. dba Osceola Community Health Services (OCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. OCHS is committed to building a healthier future one patient at a time by providing access to health care services for our communities with emphasis on the uninsured and underinsured to improve health and the well-bring of the community. 1lPage I. Overview We StrongIy Urge IIRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring us to purchase medications at full price and wait for rebates, this model woul.d cause significant financial turmoil and directly affect our ability to serve the patients who rely on us. For OCHS in particular, this means it will impact the: 17,208 patients that we serve; 11,440 prescriptions filled using 340B purchased medications; $485,007.00 to operate 340B program; and The savings generated from 340B program are used throughout the organization to help offset the uninsured patients. H. Patient Impact We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications fmancially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. The majority of drngs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 2025 UDA Data, HRSA (hrsa.gov) 2 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for OCHS The proposed 340B Rebate Model Pilot Program is not only a financial threat to OCHS but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Sliding Fee Discount: OCHS provided 1,903 patients with sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: OCHS anticipates needing 4.5 additional full-time equivalent to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We estimate the cost of additional staff to be between $379,000 to $381,000, annually. Contract Pharmacy and External Vendor Costs: OCHS currently partners with 16 pharmacies to increase access to affordable medications. Complying with manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. We anticipate an increase in costs of $8,000.00 for upfront cost + monthly fees for external support vendors. Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Florida with no affordable medication options. IV. Financial Challenges The proposed 340B Rebate Model Pilot requiring us to purchase drugs at full retail price, known as WholesaIe Acquisition Cost (WAC), and then receive a rebate payment after dispensing the medication to our patients. This would drastically diminish our ability to 3 purchase drugs and directly impact our ability to offer patients steeply discounted medications at the point of sale. Our pharmacies, both entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This wi1I create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharrnacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on our ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about our ability to apply sliding fee discounts at the point of sale. By statute and regulation, we are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.3 In line with our mission, we offer a sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.4 Patients who meet the eligibility criteria can qualify for our sliding fee discount which can adjust the cost of health care services, including medications, based on a patient's income and family size. The sliding fee discounts helps to remove financial barriers due to the cost of healthcare and provide access to medications that patients would otherwise not have without OCHS. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. Cash Flow Impact Scenarios: 1.Data submission when prescription is filled before being sold. If the medication is returned to stock and rebate payment is received; then administrative burden is increased due to having to submit rebate reversal claim. Sunday Monday Tuesciay Wednesday Thursday Friday Saturday Invoice invoice invoice invoice ;,,, i Invoice Rx Fitted Rebate Submitted Payment Due Rx Returned to Stock Rebate Payment Received 2.Data submission when prescription is sold decreases administrative burden of submitting rebate reversal claim for prescription returned to stock but impacts cash flow and reserved funds due to waiting period of prescription being sold to submit rebate claim. From the example below, it 3 HRSA FAQ 4 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manualichapter9#footnotel0 4 would take 23 days from date or purchase to receive rebate. Sunday Monday Tuesday Wedneaday Thursday Friday Saturday 7-i 1i; '-:,,,ftw,,, Rx Fitted -ment Rx Picked Up Rebate Submitted Rebate Payment Receved 3. Damaged or expired medication does not allow provide us with the opportunity to submit a rebate since the medication was never sold to a patient. These medications would still be purchased at WAC cost despite not selling the entire bottle. Rebate received would only be partial based on the amount of medication dispensed and sold to a patient. Under 340B Rebate Modet Pilot Program, there is no opportunity to submit rebate for damaged or expired Inventory. Currentty in the 3408 inventory modet, medication that is damaged or expired is purchased upfront at 340B price. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concems about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. A. 340B Rebate DruE Cost Impact Based on our organization's data, we estimate it would cost $209,359.83 to purchase these 5 10 drugs under the proposed rebate model. This number will drastically increase again in 2027 to $418.177.94 and $444,313.17 for 2028. Currently, our organization spends $5,326.07 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, Osceola Community Health Services is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, OCHS anticipates needing to reduce services to the community (including reduced operating hours and/or clinical services at satellite locations). B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially Iead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "fmancial limbo" and fundamentally defeats the purpose of the 340B progamto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Purchasing drugs at fall WAC will potentially lead us to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. In order to remain within our credit limits, we must pay our invoices before their due dates. We receive prompt pay, purchase volume and sub-ceiling discounts our drug purchases. By forcing a WAC- upfront rebate model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. We estimate the 2027 Annual Rebate Opportunity Cost to be approximately $27,525.01. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. a. Financial Impact of Rebate Denials and Delays The current framework allows manufacturers to act as the sole arbiter our statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation we need to understand or contest those decisions.5 5 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister goy/documents/2025/08/01/2025-14619/340b-program-notiee-application-process-for-the-340b- rebate-model-pilot-program 6 Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $10,447.95. This is a sum we cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill our mission of serving all patients, regardless of their ability to pay. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for us. V. Conclusion Osceola Community Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, we would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. OCHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. OCHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dr. Tiffany Jordan, Director of Pharmacy, at Tiffany.Jordan@osceolahealthcare.org. Sin er y, r. Belin ohnson-Cornett, MS, RN-BC, MBA President and CEO Osceola Community Health Services cc: Dr. Tiffany Jordan, Director of Pharmacy, OCHS 7
HRSA-2026-0001-1835Michael Rose · Hallandale Beach, FL, United States2026-04-20T04:00Z361 chars
The 340B Rebate Model Pilot is a blatant attempt by Pharma to manipulate the 340B program and reduce benefits to our uninsured and underinsured population. As usual, the government did not think this irrational oversight over as this would create serious hardships for our vital community FQHC. Don't believe me simply look at all the pharma BOT's commenting.
HRSA-2026-0001-1836Highland Health Providers2026-04-20T04:00Z46,791 chars
We appreciate the opportunity to submit comments in response to the Request for Information: 340B Rebate Model Pilot Program. The 340B Drug Pricing Program plays a critical role in supporting covered entities ability to provide care to vulnerable and underserved populations. As stakeholders with experience in the administration and impact of the 340B program, we welcome the chance to share perspectives and considerations that may help inform the development and evaluation of the proposed rebate model pilot. Our comments are offered with the goal of supporting program integrity, administrative feasibility, and the continued ability of covered entities to fulfill the programs statutory intent. 1 Highland Health Providers April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Highland Health Providers Corporation, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Highland Health Providers is a rural Federally Qualified Health Center (FQHC) formed in 2015 to serve medically underserved individuals in Highland County and surrounding communities in southern Ohio. Serving approximately 12,000 patients annually through seven locations in Highland County. Highland Health Providers delivers comprehensive care including child and adult primary care, adult behavioral health services, gynecology, and pharmacy services, regardless of a patient's ability to pay. Participation in the 340B Drug Pricing Program is essential to our mission, enabling us to stretch scarce federal resources by providing affordable medications and reinvesting savings into critical patient services such as sliding fee discounts, free prescription delivery, care coordination, and nutrition counseling for patients with chronic conditions. As a rural safety-net provider serving a population with limited health care access and high chronic disease burden, the loss of the 340B program would significantly impair our ability to maintain pharmacy services, support medication adherence, and ensure continued access to affordable, comprehensive care for our community. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Highland Health Providers Corporation in particular, this means it will impact: 11,742 patients $200,000 for your 340B program oversite The ability to increase sliding fee adjustments to ensure patients can access medically necessary prescriptions, offer free dietician and diabetes education services, care coordinators and referral specialists to improve outcomes, and support our Epic EHR system to enhance continuity of care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, 2 hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PM1D: 34060704; PMC1D: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randoniized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajourna Is. org/do i/pdf/10.1 I 61/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Adrninistration. https://www.sainhsa.govidata/data-we-colleetinsduh-national-surveydrug-use-and-healthinational-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Highland Health Providers Corporation provided $1,702,123 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 4 Staffing Impact: Highland Health Providers Corporation anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Highland Health Providers Corporation anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Highland Health Providers Corporation urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $30,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 11,742 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $50,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. At minimum, this could cost our organization nearly $15,000 additionally. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 45 different pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 46 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Highland County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacolggy JAMA Network Open I JAMA Network 1 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCocle=hlthaff " Internal NACHC survey data 6 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. 7 A rebate model also cteates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Highland Health Providers' entity-owned pharmacy, Highland Health Rx, lowers medication costs primarily through the 340B Drug Pricing Program, which allows it to purchase drugs at reduced prices and pass those savings on to patients through our supplemental discounts. It also offers financial assistance, sliding scale pricing, and copay support to further reduce out-of-pocket expenses. Because the pharmacy is integrated with Highland Health Providers, providers and pharmacists coordinate care to choose cost-effective treatments and avoid unnecessary prescriptions. Additional services like medication synchronization and adherence packaging help prevent missed doses and reduce long-term healthcare costs. Convenience services that eliminate indirect costs such as free home or clinic delivery, automatic refills and reminders, and same-day pickup after appointments help patients save money on transpiration, time off work, and missed refills. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The fmancial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically tum their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable fmancial losses. CHCs must 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://hphc.hrsa.gov/compliance/compliance- man ual/chanter9# footnote 10 14https://enlivenhealth. co/b I ogiyear-end-business-hea I th-check-kev-metrics-every-pharmacy-owner-sho uld-review 8 estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $2,313,141.35 to purchase these 10 drugs under the proposed rebate model. Currently, our organi7ation spends $174,140.68 to t5 https://340bpricing.hrsa.gov/ 16 https://www.cms.govifileship/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezin.zip 9 purchase these same drugs at the 340B ceiling price. This represents a 1,228% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Highland Health Providers Corporation anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of purchasing medications without 340B pricing, we would be forced to scale back non-revenue-generating but essential patient support services. These include free prescription delivery, nutrition counseling with our Diabetic Educator, services provided by our Care Coordinator, and sliding fee discounts that make medications affordable for low-income patients. Operating Hours: We anticipate needing to reduce our clinic hours by 10 per week, specifically impacting our evening and weekend hours, which are the only times our working- class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund our prescription delivery services, Care Coordinator and Diabetic Educator. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,148 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Highland Healtb Providers Corporation asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial 10 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Highland Health Providers Corporation estimates its 2027 Annual Rebate Opportunity Cost to be approximately $503,474. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Highland Health Providers Corporation estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $2,139,000. When we further estimate increases in annual drug spend to include the 2027 and 2028 MFP drugs, our spendings increase to $3,192,742 and 3,449,991 respectively. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited fmancial reserves. This is not a sustainable solution; funds that are currently dedicated to prescription delivery, nutrition counseling with our Diabetic Educator, services provided by our Care Coordinator, and sliding fee discounts that make medications affordable for low-income patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Highland Health Providers Corporation, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Highland Health Providers Corporation urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct fmancial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $325,428.03, which can be catastrophic in these uncertain times in healthcare. This is 77 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www. federal regi sten gov/docu ments/2025/08/01/2025- 4619/340b-program-notice-appl i cal ion-process-fo r-the-34013- rebate-model-pi lot-program 11 a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of fmancial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If BRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of fmancial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. 0PA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 12 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 13 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Highland Health Providers Corporation strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Highland Health Providers Corporation believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Highland Health Providers appreciate the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amanda Warix, Executive Director, mwarix@hhproviders.org or Lauren Coor, PharmD, Pharmacy Director,lcoor@hhproviders.org. Sin ely, 6/4 6hA.4 ) nda Warix Executive Director Highland Health Providers Corporation 14
HRSA-2026-0001-1837Anthony Brown · Louisville, KY, United States2026-04-20T04:00Z2,908 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Anthony Brown, PharmD PIC, FHC Phoenix Pharmacy Family Health Centers, Inc.
HRSA-2026-0001-1838Anonymous Anonymous2026-04-20T04:00Z2,904 chars
Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerly ] Leslie Perry [Title / Board Member / Staff] Family Health Centers, Inc.
HRSA-2026-0001-1839Bayhealth Medical Center2026-04-20T04:00Z26,233 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Bayhealth Medical Center, Dover DE, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Bayhealth Medical Center, Dover DE, that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bayhealth Medical Center, Dover DE has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Bayhealth Medical Center, Dover DE has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bayhealth Medical Center, Dover DE can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Bayhealth Medical Center, Dover, DE to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Bayhealth Medical Center, in Dover DE, understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The annual total overpayment just for the 10 drugs implemented in 2026 estimated to be $1,355,900. We currently receive prompt pay discounts when purchasing drugs through wholesalers. Even if we receive rebates within 10 days of data submission, the rebate model requires our hospital to pay the manufacturers high price (WAC price) upfront reducing our cash flow. The rebate model impact on cash flow will force our hospital to delay payments to the wholesaler until rebate fund is collected. Delaying the payment will forfeit our prompt payment refunds and add to our annual drug expenses by $1,264,000 based on FY25 drug expenditure. Staffing Impacts Under a Potential 340B Rebate Program. Bayhealth Medical Center, Dover DE does not currently have the staff needed to comply with a Rebate Program. The implementation of a rebate model would require additional three full-time employees with annual cost of $294,348, to work to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bayhealth Medical Center, Dover DE has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to reprogram our HER to meet every manufacturer data requirement and incur significant costs to change those systems. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our Covered entity experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We will require dedicated staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bayhealth Medical Center, Dover, DE to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Even though Manufacturers are required to pay rebates within 10 days of claim data submission, for hospital administered drugs the claim data will not be available for weeks from day of service delaying the rebate by several weeks with significant impact on cash flow. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bayhealth Medical Center, Dover DE will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. This makes it financially difficult to keep the same operational hours for our community pharmacy - the only 24-hour pharmacy in central and southern Delaware as the rebate model requires us to shift resources to operationalize the rebate model. The rebate model also negatively impacts our free discharge medication for these uninsured or underinsured patients with high copays. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bayhealth Medical Center, Dover, DE reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bayhealth Medical Center, Dover DE HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, Bayhealth Medical Center, Dover DE respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bayhealth Medical Center, Dover DE and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Michael J Tretina, CPA, MBA, FHFMA, FACHE Senior Vice President and CFO Bayhealth Medical Center 640 S. State Street Dover DE 19904 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Bayhealth Medical Center, Dover DE, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Bayhealth Medical Center, Dover DE, that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bayhealth Medical Center, Dover DE has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Bayhealth Medical Center, Dover DE has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bayhealth Medical Center, Dover DE can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Bayhealth Medical Center, Dover, DE to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Bayhealth Medical Center, in Dover DE, understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The annual total overpayment just for the 10 drugs implemented in 2026 estimated to be $1,355,900. We currently receive prompt pay discounts when purchasing drugs through wholesalers. Even if we receive rebates within 10 days of data submission, the rebate model requires our hospital to pay the manufacturers high price (WAC price) upfront reducing our cash flow. The rebate model impact on cash flow will force our hospital to delay payments to the wholesaler until rebate fund is collected. Delaying the payment will forfeit our prompt payment refunds and add to our annual drug expenses by $1,264,000 based on FY25 drug expenditure. Staffing Impacts Under a Potential 340B Rebate Program. Bayhealth Medical Center, Dover DE does not currently have the staff needed to comply with a Rebate Program. The implementation of a rebate model would require additional three full-time employees with annual cost of $294,348, to work to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bayhealth Medical Center, Dover DE has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to reprogram our HER to meet every manufacturer data requirement and incur significant costs to change those systems. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our Covered entity experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We will require dedicated staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bayhealth Medical Center, Dover, DE to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Even though Manufacturers are required to pay rebates within 10 days of claim data submission, for hospital administered drugs the claim data will not be available for weeks from day of service delaying the rebate by several weeks with significant impact on cash flow. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bayhealth Medical Center, Dover DE will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. This makes it financially difficult to keep the same operational hours for our community pharmacy - the only 24-hour pharmacy in central and southern Delaware as the rebate model requires us to shift resources to operationalize the rebate model. The rebate model also negatively impacts our free discharge medication for these uninsured or underinsured patients with high copays. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bayhealth Medical Center, Dover, DE reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bayhealth Medical Center, Dover DE HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, Bayhealth Medical Center, Dover DE respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bayhealth Medical Center, Dover DE and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Michael J Tretina, CPA, MBA, FHFMA, FACHE Senior Vice President and CFO Bayhealth Medical Center 640 S. State Street Dover DE 19904
HRSA-2026-0001-1840National Council of Urban Indian Health2026-04-20T04:00Z9,861 chars
Please see the attached document for the National Council of Urban Indian Health's (NCUIH) written comments and recommendations in response to the Health Resources and Services Administrations (HRSA) February 17, 2026, Federal Register notice on HRSAs 340B Rebate Model Pilot Program. 1 April 20, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via: https://www.regulations.gov RE: HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, On behalf of the National Council of Urban Indian Health (NCUIH) and the 41 Urban Indian Organizations (UIOs) for which we serve,1 we hereby submit our written comments and recommendations in response to the Health Resources and Services Administrations (HRSA) February 17, 2026, Federal Register notice on HRSAs 340B Rebate Model Pilot Program (hereinafter 340B Rebate Program or the Program). 2 Background Founded in 1998, NCUIH was created to support the development of quality, accessible, and culturally sensitive health care programs for American Indian and Alaska Native people living in urban communities. NCUIH serves the 41 UIOs receiving grants under the Indian Health Care Improvement Act (IHCIA). Pursuant to IHCIA, UIOs are American Indian and Alaska Native controlled organizations that deliver health care and referral services for American Indian and Alaska Native people residing in the urban centers in which the UIO is located. UIOs provide critically needed primary care, behavioral health services, social and community services, and Traditional Healing and Medicine to American Indian and Alaska Native people living in urban areas. Comment NCUIH appreciates the opportunity to comment on HRSAs 340B Rebate Program and thanks HRSA for providing respondents more time to submit written comments by extending the written comment deadline.3 1 NCUIH advocates for the 41 Urban Indian Organizations receiving grants from the Indian Health Service pursuant to the Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.). 2 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026), https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate-model-pilot-program. 3 Request for Information: 340B Rebate Model Pilot Program Extension, 91 Fed. Reg. 9632 (Feb. 26, 2026), https://www.federalregister.gov/documents/2026/02/26/2026-03838/request-for-information-340b-rebate-model-pilot-program- extension. 2 As a general matter, NCUIH is concerned that the Program will cause significant administrative and financial burdens for Indian Health Care Providers (IHCPs)- which includes UIOs- and barriers to access to vital medications for American Indian and Alaska Native patients. The United States has a trust obligation to provide health services to maintain and improve the health of American Indian and Alaska Native people.4 The United States owes this trust obligation to American Indian and Alaska Native people no matter where they live5 and contracts with UIOs to fulfill this trust responsibility in urban areas.6 Indian Health Service (IHS) funded UIOs are an essential component of the Indian health system, which is comprised of IHS, Tribal health facilities, and UIOs (collectively the I/T/U system). The 41 IHS funded UIOs operate over 80 facilities in 38 urban areas across 11 of the 12 IHS regions. As Native-led organizations, IHS funded UIOs serve patients from over 500 federally recognized Tribes,7 providing critical services such as primary care, behavioral health, Traditional Medicine, and social and community programs to American Indian and Alaska Native people living in urban areas. In fact, 11 IHS funded UIOs also operate with the HRSA 330 grant as Community Health Centers. There are currently 25 UIOs that participate in the 340B program and changes to the operation of the program could have significant impacts on their ability to serve their communities. Accordingly, NCUIH makes the following comments and requests in response to the February 17, 2026, Federal Register notice on the 340B Rebate Program. Exempt IHCPs from HRSAs 340B Rebate Program Meaningfully engage with UIOs through formal Urban Confer or UIO listening session Exempt IHCPs from the 340B Rebate Program NCUIH requests an exemption for Indian Health Care Providers from HRSAs 340B Rebate Program. This is also a Tribal request that has been made by both the Department of Health and Human Services (HHS) Secretarys Tribal Advisory Committee (STAC) and the Centers for Medicaid and Medicare Services (CMS) Tribal Technical Advisory Group. We strongly support this request. Under the 340B Rebate Program, participating UIOs would be required to purchase drugs at full retail price and receive a rebate later. This departure from over 30 years of precedent would drastically impact their ability to purchase drugs due to the uncertainty of waiting for a manufacturer to approve a rebate. UIO leaders have been unanimous in highlighting both the administrative and financial burden that would result by the rebate program if the 4 25 U.S.C. 1601(1). 5 S. Rep. No. 100-508, at 25 (1988) (stating that The responsibility for the provision of health care . . . does not end at the borders of an Indian reservation. Rather, government relocation policies which designated certain urban areas as relocation centers for Indians, have in many instances forced Indian people who did not which to leave their reservations to relocate in urban areas, and the responsibility for the provision of health care services follows them there.). 6 See 25 U.S.C. 1652. 7 INDIAN HEALTH SERV., IHS NATIONAL BUDGET FORMULATION DATA REPORTS FOR URBAN INDIAN ORGANIZATIONS CALENDAR YEAR 2021 (2023), https://www.ihs.gov/sites/urban/themes/responsive2017/display_objects/documents/IHS_National_Budget_Formulation_Repo rts_Calendar_Year_2021.pdf. 3 Program were implemented. UIOs are already operating on tight budgets and often do not have the capital to pay full retail price, which can be 100 times the current 340B price, and absorb the cash flow delay inherent in a rebate model. Requiring this financial expense while waiting for manufacturer rebates will severely compromise their ability to purchase necessary medications and sustain their current level of care. Preliminary UIO feedback indicates that upfront drug purchasing costs range from $340,000 to $2.4 million annually for some UIOs that participate in the 340B Program. Even temporary delays in rebate payments may significantly strain UIO operating budgets. Please see our one pager on this issue. Additionally, the 340B Rebate Program increases the administrative burden by changing the reimbursement and claims process, and complicates the accounting procedures for UIOs, which disrupts staff capacity and the organizations mission. The 340B Rebate Programs requirements for rebate claim submission, tracking, and reporting may require additional staffing, IT system capacity, and administrative resources. Increased financial and operational pressures may affect the sustainability of UIO pharmacy operations and limit the ability to stock or dispense high-cost medications, jeopardizing access to medications for American Indian and Alaska Native patients. The federal government owes a trust obligation to ensure the highest possible health status for Indians and urban Indians and to provide all resources necessary to effect that policy.8 In light of this unique federal trust obligation, it is imperative that IHCPs be explicitly exempted from the proposed 340B Rebate Program. Without an exemption, the administrative and financial burden will impede providers ability to deliver on the trust obligation. Meaningfully Engage with UIOs NCUIH requests HRSA engage meaningfully with UIOs on the Program through formal Urban Confer or UIO listening session. The best practice for engagement with UIOs and UIO leaders is through hosting Urban Confer sessions or UIO listening sessions. An Urban Confer is an open and free exchange of information and opinions that leads to mutual understanding and comprehension; and emphasizes trust, respect, and shared responsibility.9 The IHS currently has a robust policy10 and we encourage HRSA to work with its colleagues at IHS to organize and facilitate a meeting with UIOs. By conferring with UIOs, HRSA will be able to more fully understand the impacts of the Program on UIOs and the urban American Indian and Alaska Native patients they serve. NCUIH reiterates our strong support of Tribal sovereignty and the government-to-government relationship between Tribal Nations and the United States. We wish to make clear that we request further engagement with UIOs only to provide HRSA with the information and technical expertise HRSA needs to better serve 8 25 U.S.C. 1602(1). 9 25 U.S.C. 1660d. 10 INDIAN HEALTH SERV., Conferring with Urban Indian Organizations, in INDIAN HEALTH MANUAL (2023), https://www.ihs.gov/ihm/pc/part-5/p5c26/. 4 urban American Indian and Alaska Native communities, and that development of any programming impacting Indian Country can only take place in accordance with the wishes of Tribes. Conclusion NCUIH again appreciates the opportunity to comment on HRSAs 340B Rebate Program. We reiterate the importance of exempting IHCPs- which includes UIOs- from the 340B Rebate Program. Please contact our Senior Vice President of Policy and Communications, Meredith Raimondi, at mraimondi@ncuih.org with any questions. Sincerely, Francys Crevier, J.D. Chief Executive Officer
HRSA-2026-0001-1841LCH Health and Community Services2026-04-20T04:00Z116,974 chars
Please see attached. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of LCH Health and Community Services (LCH), a federally qualified health center (FQHC) in Kennett Square, Pennsylvania, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the extensive operational additions and material financial risks to Community Health Centers (CHCs) posed by the proposed pharmaceutical rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving vulnerable patients through a rebate model threatens to destabilize CHC pharmacy operations and cripple CHC finances nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: LCH anticipates an average loss of $310,000 from entity-owned pharmacy operations in the first year alone. We cannot afford such a loss and continue to serve our patients. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Where will that money come from? o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For LCH specifically, the rebate model will impact: 36,369 340B transactions across 8,700 LCH patients Upfront drug cost by an increase of 63,985% requiring LCH to find/utilize a line of credit to purchase drugs if it can be obtained and pay the interest on that note. LCHs capacity to stretch scarce federal resources with less 340B savings to support critical health center services such as behavioral health, substance use disorder and MAT, womens health, prenatal care, and prescription assistance. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Many of the quality outcomes gained as a result of access to the 340B program (for example significant increases in diabetes control etc.) will be negated when we are no longer able to provide our patients with critical medications due to the staggering effect on cash flow that this proposed model will impose on LCH. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Even more of a concern for LCH is the severe impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. 6 2025 UDA Data, HRSA (hrsa.gov) 5 HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: LCH provided $2,235,265 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: LCH anticipates needing 2.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, LCH anticipates an increase of $50,000 to $100,000 for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Due to the vagaries and lack of transparency of the Beacon algorithm for rejecting claims, and the potential back and forth related to the dispute resolution process, legal fees alone could comprise the bulk of these costs. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 6 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 LCH anticipates an increase of to 2.5 FTEs dedicated to the 340B program due to the increased clinical, financial, operational, and regulatory burden of the rebate model. In addition to added financial and compliance oversight, we anticipate needing a clinical pharmacist to help providers navigate the complexities of the rebate model and decrease in clinical quality outcomes due to a lack of access to life saving medications for our most vulnerable population, the uninsured and underinsured. Additionally, several CHCs estimate the cost to hire additional staff to be up to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities including LCH. LCH expects an increase of up to $300,000 for additional staffing costs to accommodate a rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. More than 40 hours per week will be required to report 340B rebate claims to a third-party platform, reconcile rebate payments, and address discrepancies through the dispute resolution process. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. LCH urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 8,700 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at 10% annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Walgreens and Walmart pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Chester County, PA with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow and would cripple already depleted cash reserves. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For the 45% of LCHs patients who are uninsured and rely on the sliding fee discount program to afford healthcare, LCH uses savings from the 340B program to provide outstanding medical care at a discounted, affordable cost. LCH also provides a discount program at our entity owned pharmacy. Eligible patients can obtain their prescriptions at the discounted price of the 340B acquisition cost plus a small administrative fee, meaning most prescriptions are as low as $7. Since opening our entity owned pharmacy in December 2024, we have seen an improvement in clinical quality measures such as patients with poorly controlled diabetes. The rebate model will challenge the existence of the prescription discount program if we cannot purchase drugs upfront at 340B pricing. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,080,435 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,688 to purchase these same drugs at the 340B ceiling price. This represents a 63985% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, LCH anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to drastically scale back non-revenue-generating but essential services, such as eliminating outreach programs in the community, eliminating mobile health clinics to local farms, and reducing our enabling services by 66%. In addition, we would need to scale back our revenue producing services such as behavioral health by 50% and our pediatrics and womens health clinicians by 50%, and to reduce our dental services by terminating our dentist and relying on our public health dental hygienist to cover appropriate services, Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly affecting LCHs ability to schedule patients and increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,914 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments 11 are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. LCH asserts that taking out a loan or an extended line of credit to fund drug procurement is a high- risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, LCH estimates its 2027 Annual Rebate Opportunity Cost to be approximately $223,919. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Upfront Annual Drug Spend: LCH estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,080,435. We also project that adding the additional drugs to the rebate model in 2027 and 2028 will increase upfront annual drug spend by $1,461,061 and $1,511,700 respectively. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $90,000 annuallyfunds that are currently dedicated to hiring additional clinical staff such as a substance use disorder psychiatrist, nurse and SUD coordinator. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on LCH, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. 12 a. Financial Impact of Rebate Denials and Delays LCH urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings with a significant incentive for them to create additional barriers to the program in the form of multiple new requirements that will further de-rail the program creating an uncertain environment that results in direct financial harm. The framework proposed in the previously paused 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $163,195. However, since the Beacon platform algorithm is not transparent, it amplifies the volatility and therefore must be built into the assumption. Consolidation further magnifies the problem: dominant pharmaceutical companies can demand additional requirements which makes this opaque system very risky to FQHCs like LCH and therefore the 15% denial rate could realistically double to 30% to a net annual loss of greater than $320,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net CHCs to 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 14 requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 16 has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 17 CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 Our estimates are much higher ranging in the $50,000 to $100,000 range. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions 18 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy 19 should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 20 nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that purchased the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts 28 42 U.S.C. 256b(a)(1) 29 Id. 21 The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity, not HHS or a drugmaker, shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 22 high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how 35 See 42 U.S.C 256b(a)(5)(A). 36 C.F.R. 447.518(a). 23 to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 24 departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 26 is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 27 entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 28 CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 29 We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 58 42 U.S.C. 256b(a)(5)(B) 30 term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 31 track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If 32 the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion LCH strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant, even unsustainable cash flow challenges, forcing CHCs to make difficult decisions about reducing staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. LCH believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. LCH appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this existential issue. If you have any questions, please contact me directly at rgannon@lchservices.org. Sincerely, Ronan W. Gannon CEO LCH Health and Community Services
HRSA-2026-0001-1842CoxHealth2026-04-20T04:00Z4,947 chars
see attached letter from CoxHealth in Springfield, MO "4' 1;1 LOXHEALTH Submitted to Federal eRulentaking Portal: https://www.regulations.kor April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026--03042) Dear Administrator Engels: CoxHealth, a participating 340B covered entity, appreciates the opportunity to provide comments on the Health Resources and Services Administration's (HRSA's) Request for Information regarding the potential use of backend rebates in place of long-standing upfront 340B discounts for a limited set of drugs. We recognize HRSA's interest in exploring program integrity and deduplication considerations, particularly in light of the Medicare Drug Price Negotiation Program (MDPNP). However, we have significant concerns about the operational, financial, and patient-care implications of a rebate-based model. For more than 30 years, the 340B program has functioned through upfront discounts, and hospitals like ours have structured operations, compliance processes, and patient-care investments around that model. A shift to rebates would represent a meaningful departure from this framework and would introduce uncertainty, new administrative complexity, and cash-flow challenges for safety-net providers. Based on our preliminary assessment, a rebate approach could result in an estimated annual financial impact of $1.5$2 million for our organization due to additional administrative effort, delayed reimbursement, and reduced contract pharmacy revenue. A rebate model would require covered entities to purchase certain drugs at higher, non- 340B prices, hold inventory for extended periods, submit detailed claims data, and wait for reimbursement after dispensing. Even with prompt rebate timelines, this structure would temporarily divert resources that would otherwise support patient care. Hospitals would, in effect, carry the financial burden during the interim periodan outcome that runs counter HULSTON CANCER CENTER BUILDING 3850 South National Avenue Springfield. Missouri 65807 coxhealth.com An Equal-Opportunity Employer. Services provided on a nondiscriminatory basis. Patient admissions, room assignments and patient services are provided without regard to race, color, national origin, disability or age. to the program's purpose of helping providers stretch limited resources for underserved populations. We are also concerned about the expanded administrative requirements associated with rebates. Our experience with manufacturer-operated data platforms and prior rebate pilot preparation revealed challenges related to unclear data standards, frequent errors, and delayed access to pricing despite compliance. These issues required additional staffing and systems support and would be magnified if rebates applied across all hospital outpatient settings, including physician-administered drugs where claims data are not immediately available. Delays or denials under such a model could further increase risk and cost. While HRSA has suggested that rebates could support program integrity and avoid duplicate discounts under MDPNP, we believe existing mechanisms already address these concerns effectively. HRSA audits have shown high levels of compliance, and targeted, less disruptive solutions are available. For example, retrospective claims review approaches such as those used by Oregon Medicaidcould be adapted at the federal level to address non-duplication without requiring a fundamental restructuring of 340B purchasing. We are particularly concerned that rebate data could be used for purposes unrelated to 340B oversight, such as facilitating manufacturers' commercial rebate arrangements. Safety-net providers should not be required to absorb additional cost or data-sharing burdens for objectives outside the core intent of the 340B program. At a minimum, safeguards should be in place to ensure covered entity data is not used for commercial purposes. If HRSA elects to move forward with a rebate model despite these concerns, we strongly encourage the agency to prohibit rebate denials that would further increase administrative burden and financial uncertainty. Clear standards, transparency, and limits on denial authority would be essential to mitigating harm to providers and patients. In closing, CoxHealth respectfully urges HRSA to preserve the upfront discount structure that has enabled the 340B program to function effectively for decades. Any MDPNP- related challenges can be addressed through targeted CMS improvements rather than through a broad shift to a rebate-based system. We appreciate HRSA's willingness to seek stakeholder input and thank you for considering these comments. Sincerely, Chief of Staff, VP Gov Relations CoxHealth
HRSA-2026-0001-1843West Virginia United Hospital Systems (WVUHS)2026-04-20T04:00Z22,512 chars
Please find attached the 340B Rebate Model RFI for West Virginia United Hospital Systems (WVUHS) on behalf of the 19 - 340B covered entities in our system. This document is signed by Albert Wright, Present and Chief Executive Officer of WVUHS. Please reach out to me directly for questions and issues. Karen Famoso karen.famoso@wvumedicine.org WVUMedicine WVUMedicine.org Monday, April 20, 2026 West Virginia University Health System PO Box 8059 1085 Van Voorhis Road, Suite 500 Morgantown, WV 26505 Phone / 304-598-4200 Fax / 304-598-4124 Submitted to Federal eRulemaking Portal: https://www.regulations.gov The Honorable Thornas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 34013 Rebate Model Pilot Program, (HIIS Docket No. HRSA- 2026-03042) Dear Administrator Engles: Thank you for the opportunity to provide comments on Health Resources and Services Adininistration's (HRSA's) Rcquest for Information (RFI) regarding a 340B Rebate Model Pilot Program that replaces the upfront discount with a back-end rebate. West Virginia United Health System, Inc. d/b/a West Virginia University Health System ("WVUHS") is an academic hospital system primarily located in the underserved state of West Virginia that consists of 8 Disproportionate Share Hospitals, 9 Critical Access Hospitals, 1 Rural Referral Center and 1 Sole Community Hospital, each of which participates in the 340B Prograin. We are submitting comments on behalf of the 340B hospitals identified in the attached table. The 340B Program plays a vital role in enabling safety-net providers like WVUHS to stretch scarce federal resources and expand services for vulnerable patients that we serve. West Virginia is one of the most economically disadvantaged states in the country with a poverty rate of 16.7% in 2024. This statistic ranks West -Virginia the 4th highest poverty rate in the nation'. As a direct result, WVUHS provides vital care to a large population of rural, low-income patients. Compounding the poverty issue, the population WVUHS serves is one of the unhealthiest populations in the country and ranks highest in the nation in several health indicators such as diabetes, drug addiction, obesity, and cancer. Without the savings achieved from 340B, some of the WVUHS hospitals could be forced to reduce services, creating logistical challenges for some of the most impoverished citizens of West Virginia and the surrounding states WVUHS serves. WVUHS adamantly opposes any transition to a rebate-based model and strongly urges HRSA to preserve the upfront discount structure tliat has defined the 340B Prograin for over 30 years. WVUHS has relied oii receiving 340B pricing through point-of-sale discounts, and a change will increase costs and place extreme financial and administrative burdens on our hospitals that already operate on thin margins. Safety-net hospitals are under strain. The 340B Program provides a stabilizing mechanism for providing services to communities. 1wv povertv percentage 2024 - Census Bureau Search 1 For decades, the 34013 Prograni has functioned effectively as Congress had intended with an upfront discount rather than post-purchase rebate model. HRSA's continued consideration of a rebate-based approach for 340B is deeply concerning, particularly given indications that the agency may pursue a model even broader than the one outlined in its previously withdrawn rebate pilot. Therefore, on behalf of its 19 hospitals participating in the 340B Program, WVUHS urges HRSA to abandon the Rebate Pilot Program for the following reasons: Program Integrity Concerns We disagree with HRSA's assertion that a rebate model would enhance 340B Prograin integrity or is necessary to ensure de-duplication under the Medicare Drug Price Negotiation Program ("MDPNP").2 Any issues with the MDPNP process can and should be addressed by CMS through targeted iniprovements rather than a disruptive overhaul of 340B by implementing a rebate model. HRSA's existing audit process already denionstrates a high level of compliance among covered entities, and manufacturers have not provided evidence of widespread integrity concerns within the Program. Moreover, there are far less burdensorne alternatives that HRSA should pursue. For example, the Department of Health & Human Services (HHS) could require state Medicaid agencies to follow Oregon Medicaid's approach to preventing duplicate discounts by collecting covered entity data retrospectively and excluding 340B claims from rebate requests. A comparable process at the federal level could effectively address MDPNP non- duplication without introducing unnecessary complexity. Additionally, pharmaceutical manufacturers are seeking access to covered entity claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary formulary agreements. This objective is unrelated to 340B Program integrity, and covered entities should not be expected to support or subsidize it. We strongly urge HRSA not to implement a rebate model that shifts the burden of data sharing and higher drug acquisition costs onto safety-net providers in service of manufacturers' commercial interests. At a minimum, manufacturers should be prohibited from using covered entity rebate claims data for commercial purposes. Financial Concerns a. Cash Flow Concerns Under the HRSA's new Rebate Pilot Program policy, covered entities would purchase 25 medications at significantly higher Wholesale Acquisition Cost ("WAC") upfront rather than the ten medications in the 2025 version. This will create a more significant financial impact than was estimated in 2025. Covered entities would be forced to wait an unknown period to receive the post-purchase rebate calculated by the difference between the WAC price and the 340B price. The proposed timeline of ten days to receive a rebate is not practical and will be much longer. Even if a rebate were paid, a rebate stnicture unfairly shills operational and financial risk to the 2 covered entity. In the meantime, a rebate model will float revenue in the form of interest-free loans to manufacturers while tying up critical resources that could otherwise be used by covered entities to suppolt patient care. Over the course of a year, we estimate the total annual additional cost ofpurchasing the 25 Rebate Drugs at WAC for WVUHS covered entities would be approximately $62 million dollars. This atnounts to a pre-rebate float to the manufacturers and away from the covered entities, creating inevitable cash flow concerns. We appreciate that HRSA indicated that manufacturers will be required to pay rebates within ten calendar days of a rebate submission. However, we are concerned that hospitals will need to float WAC purchases for much longer periods due to typical inventory processes. Hospitals will first need to purchase drugs at WAC prices and maintain them in inventory until there is a patient need and a dispense. That inventory may sit on a shelf for weeks or months before being dispensed to a patient. If that patient is determined to be 340B-eligible, then a hospital must gather post-dispense data, validate, format, and submit a rebate request which will take additional time. It is not until after that submission that the manufacturer has ten days to process the claim with the possibility of denials and disputes. We anticipate that our hospitals may not receive rebates until 45 or more days after the initial WAC purchase. WVUHS is very concerned that prompt pay discounts from manufacturers will be eroded. Manufacturers are stating that hospitals have 30 days to pay wholesaler invoices, in fact WVUHS pays invoices twice monthly. 0ur hospitals receive a prompt pay discount from wholesalers based on the payment schedule. Even if we receive a rebate within ten days of submission to manufacturers, we would not be able to maintain the prompt pay discounts due to the rebate model, thereby even further reducing our cash flow. Over the course of one year, we estimate our hospital will be forced to forgo annual pre-pay discounts of $3.2 dollars. b. Additional Expense We anticipate that the Rebate Pilot Program will result in added annual costs to our organization of $3 million dollars, including $2,312,000 for costs of complying with the model and $600,000 for dispute resolution processes. These additional costs at'e ongoing and substantial. WVUHS hiring, operations and program administration was designed with the current process of an upfront discount. A shift to a rebate model will require additional staff to operate complexities of the Rebate Pilot Program. We estimate that the salary expense needed to successfully manage the program will surpass $1,360,000. This will create additional loss to the scarce funds covered entities could use to provide services and patient care. Due to the current inanufacturer limitations of the 340B prices and requirement of 340B data submission as a condition of receiving 340B prices, WVUHS has been forced to add a team consisting of one 340B Manager and four full time pharmacy analysts to compile data, submit data, make designations, validate pricing, TPA review and engage with ESP, manufacturers and wholesalers when pricing is erroneously taken away. The current team has added annual salary expense of over $740,546, 3 I With implementation of the rebate model, another team of six full time pharmacy analysts will be required for the full process of needed data extraction, validation, formatting, transmission, and internal sign-off. This team will also be tasked with the back-end work that follows data submission. Tracking rebate payments by manufacturers, matching payments back to submitted claims, reconciling, resolving good faith inquiries, reconciliation of payments, and maintaining the audit trail can easily exceed the subinission work itself. Hospital 340B programs have never been required to complete such tasks. This will add an approximate additional salary expense of $621,549. Expenses for professional consultants and legal fees required to support review and navigation of rebate platforms and their terms of use as well as challenges with rebate denials will significantly increase. We estimate that professional consultant fees will increase by 100% and attorney fees will increase by 50%. Traditional TPA's were not built to support rebate models. Additional new expenditure on technology platforms and vendors will be necessary to support operations, A fully operational platform to assist with the current MTF process is still being developed. Current vendors in the field are estimating costs of $300,000 per year. Ill. Data Submission Concerns Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been marked by significant and costly challenges, including frequent errors, data inconsistencies, and unclear requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers' policies. We must dedicate staffjust to address these issues. Expanding a rebate model across all hospital settings, not just contract pharmacies, will substantially increase both adrninistrative and financial risk. 340B ESP's platform has been live for over six years and there are still regular issues. Removing upfront discounts and adding additional data requirements to an already flawed system is problematic. The same issues are anticipated with the Beacon platform or any other platform used to submit claims. To submit claims to 340B ESP, collaboration between Third-Party Administrators (TPAs), auditors, and pharmacy analysts to ensure accuracy, cotnpliance, and completeness of 340B program data submissions. This collaboration also includes ongoing updates related to manufacturer-specific limitations, enabling accurate extraction of data tailored to each manufacturer, covercd entity (CE), and pharmacy. In total, an estimated 220 hours per month are dedicated to supporting the accuracy, compliance, reconciliation, and submission of ESP data. This comprehensive effort is critical to maintaining program integrity and ensuring that all eligible 340B claims are properly captured and reported. A Rebate Program would require weekly submissions and could easily stnpass 440 hours; double the 220 hours currently required. 4 WVUHS's experience with 340B ESP shows that even when data is correct, manufacturer platforms can delay access. In a rebate model, these same delays would translate directly into uncertainty around reimbursement timing and amount, increasing financial exposure and administrative friction. IV. Iinuact on Patient Care We anticipate that financial losses by implementation of a Rebate Pilot Program will negatively impact the progranis and services provided to the low-income, rural, and underserved patients. WVUHS will no longer be able to leverage the 340B savings as effectively or as comprehensively as we do under the upfront discount model. As a result, our patients and the broader community wilt experience tangible negative impacts on patient care and health outcomes. Scrvices may need to be eliminated, creating health care deserts and forcing patients to travel long distances for care. Services at risk at WVUHS inclucle: A wide range of clinics, specialty services, and infusion services in markets that could not otherwise be funded without 340B savings because of negative reimbursement levels from government payors. Poorly reirnbursed but crucial service lines such as OB/GYN, behavioral health and addiction treatment, inctuding Neonatal Abstinence Units.- . Mobile, patient-centered projects like LUCAS-Mobile Lung Cancer Unit and Bonnie's Bus-Woman's Health Services. These projects serve patients close to their homes, regardless of insurance. They break down distance and travel barriers that otherwise prevent patients from receiving these important diagnostic services. Extensive capital investments in equipment, infrastructure and increased physical spaces, which enable the WVUHS hospitals to provide sophisticated health care services to the most rural parts of the states we serve. V. Administrative Burden and Claims Data Submission Concerns The Rebate Pilot Program will require submission of claims detaiI to manufacturers including both retail-dispensed drugs and physician-administered drugs used in the hospital and outpatient clinic settings. HRSA's assertion that data submission will require minimal effort because we are already providing data to third party administrators ("TPAs") and will require only five hours per week of additional work is incorrect and grossly tmderstates the new burdens. We anticipate the following challenges related to the submission process: Covered entities have never been required to submit data fields for physician- administered drugs as a condition of receiving 340B pricing. To gather the data, it would require access to niultiple pharmacy and billing systems and information not available in the TPAs. For example, for medical claim submissions tnanufacturers will have the option to require Plan ID, HCPCS Code and HCPCS modifiers and submitted at the unit level, information not available in the TPAs. If WVUHS is not prepared to submit rebate 5 requests for physician-adininistered medications all drugs inchided in the Rebate Pilot Program would be purchased at WAC. The cost of buying these medications at WAC would amount to an additimud annual expense of $5.6 million deal% Submission of administration and clahns detail could occur via multiple platforms as the manufacturers are each able to choose a method of data gathering. This will increase and complicate the operational burden of submissions as formatting and requirements may differ. Also, multiple platforms will create operational inefficiencies for the covered entities to comply with the already burdensome process, Data submission will require additional employees and resources to complete new data validation workflows, data submission operations, exception management, rebate payment tracking, reconciliation, rebate payment tracking and denial management. The unvetted Rebate Pilot Program introduces unnecessary complexity that will inevitably result in administrative errors, shifting financial burdens to safety-net hospitals. Some vendors and TPAs are not currently collecting the data required nor are they equipped to support covered entities with reporting. Covered entities are not equipped with the staff ng or ability to meet the requirements. This will unfairly subject the covered entities to rebate losses with the short 45-day claims subrnission requirement. The additional staffing that will be required to gather data, submit data, rebate receipt monitoring, aild claim denial efforts will take away the efforts of the teams in current 340B operations. Additionally, the length of time to acquire additional staffing may far exceed the program's inunediate needs and put our covered entities at risk of losing rebates. The l 1 claims data elements listed in HRSA's Notice issued in August 2025 did not include wholesaler hwoice information. However, the manufacturers' proposed rebate models would require submission of wholesaler invoice information, and FAQs HRSA previously issued related to the first iteration of the Rebate Pilot Program last year indicated that manufacturers may require submission of additional claims data elements beyond the 11 listed in the Notice.1THRSA proceeds with implementation of the Rebate Pilot Program, HRSA should not permit manufacturers to require the submission of wholesaler invoice information. If in the future a purchase invoice is required, the crosswalk of the invoice to the claim would be difficult. Currently, manufactures in the IRA/MFP process submit an invoice for the Good Faith Inquiry process ("GFI"). There are ilo mechanisms in place to determine what patient the purchase ties back to. Providing such data would require retrieval and review of large, complex reports from multiple wholesaler portals containing data extraneous to the Rebate Pilot Program just to isolate the required information. With potentially hundreds of thousands of transactions across wholesaler and contract pharmacy relationships, this time-consuming process may need to be repeated daily, increasing the risk of errors and denials. Redirecting staff to manage this task woukl divert critical resources from patient cat'e. Moreover, this requirement is redundant, as hospitals would be purchasing the drugs subject to rebates through their 6 34013-designated wholesaler accounts and so would have auditable information to confirm the WAC purchase if there were questions or audits by manufacturers. VI. Rebate Denial Concerns If HRSA proceeds with implementation of the Rebate Pilot Program, we urge HRSA to prohibit manufacturers from denying any rebates. Under the first iteration of the Rebate Pilot Program last year, it was helpful that HRSA explicitly banned manufacturers from issuing denials pertaining to alleged Medicaid duplicate discounts and diversion, but we remain concerned that manufacturers could deny claims for a host of reasons and will provide unintelligible or overly narrow reason codes, making it nearly impossible to challenge without taking the claim through the Administrative Dispute Resolution process. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers' vendor that would administer approved rebate models. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. The 340B Program is a lifeline for the patients and communities we serve. The Rebate Pilot Program structure risks shifting financial and operational burdens onto covered entities, threatening our ability to provide affordable medications and essential services. We therefore urge HRSA to abandon the Rebate Pilot Program. Should HRSA move forward with itnplementation of the R.ebate Pilot Program, the following safeguards must be in place to protect the covered entities. 1.Protect covered entities from cash flow disruptions and increased expenses 2.Address data submissions and rebate payment delays 3.Minimize administrative burden We appreciate HRSA's commitment to stakeholder engagement and respectffilly request that these comments be taken into consideration. Sincerely, Albert L. Wright, Jr. President and Chief Executive Officer West Virginia United Health System, Inc. 7 WVUHS Coverecl Entities WVUHS Covered Entity Covered Entity Type 340B ID City Hospital, Inc. clba Berkeley Medical Center Disproportionate Share DSH510008 Camden-Clark Memorial Hospital dba Camden Clark Medical Center Disproportionate Share DSH510058 Princeton Community Hospital Disproportionate Share DSH5 10046 Reynolds Memorial Hospital Disproportionate Share DSH510013 Thomas Memorial Hospital Disploportionate Share DSH510029 Uniontown Hospital Disnportionate Share D511390041 United Hospital Center Disopportionate Share DisEoportionate Share DSH510006 _. West Virginia University Hospitals DSH510001 Wheeling Hospital Rural Referral Center RRC5 10050 Barnesville Hospital Critical Access Hospital CAH361321 Braxton County Memorial Hospital Critical Access Hospital CATI5 11308 Community Health Associates dba Jackson General Hospital Critical Access Hospital CAH5I1320 Grant Metnorial Hospital Critical Access Hospital CAH511316 Harrison Conununity Hospital Critical Access Hospital CAH361311 Jefferson Medical Center Critical Access Hospital CAH511319 Potomac Valley Hospital Critical Access Hospital CAH511315 St, Joseph's Hospital Critical Access Hospital CAH511321 West Virginia Health Care Cooperative, Inc. dba Summersville Re ional Medical Center Critical Access Hospital CAH511322 GRMC, hie. dba Garrett Regional Medical Center Sole Community Hospital SCH210017 49930238.1 8
HRSA-2026-0001-1844Cornerstone Care2026-04-20T04:00Z45,328 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Mobile clinics supported by 340B savings serve remote patients who otherwise receive no care. Financial instability from a rebate model threatens the sustainability of these outreach services Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-1845Star Community Health, Inc.2026-04-20T04:00Z62,383 chars
Hello, Please review our attached RFI urging HRSA to NOT proceed with the 340B rebate pilot. Respectfully, Quynh Hicks, Executive Director Star Community Health April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Star Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Star Community Health is a Federally Qualified Health Center Look Alike (FQHC-LA also referred to as a Community Health Center or CHC) serving approximately 52,300 patients annually across 15 clinic sites in multiple counties within Pennsylvania and New Jersey. Our patient population includes a high proportion of uninsured, medically underserved, and economically vulnerable individuals, as well as Medicaid beneficiaries. Star Community Health operates 5 contract pharmacies. 3,125 total 340B eligible prescriptions Generating ~$478,000 in net 340B savings after program administration costs Recent participation with the 340B ESP portal to un-restrict select manufacturer pricing, Star Community Health has the potential to generate approximately $1.3M in net 340B Savings annually. These savings are directly reinvested into patient care services, including: Sliding fee scale discounts for uninsured and low-income patients Behavioral health integration Chronic disease management programs Care coordination and care gap closure services Financial Losses: Star Community Health anticipates a loss of $ 300,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Not Implement a 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Star Community Health provided $5,911,987 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Star Community Health anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Star Community Health anticipates an increase of $200,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Star Community Health would require 2 FTEs Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Star Community Health estimates the cost to hire 2 FTEs, $180,000 and the upfront costs to exceed $280,000 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Around 20 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Star Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 52,300 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $470,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all seven pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Star Community Health may need to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we may be forced to scale back non-revenue-generating but essential services. Operating Hours: We may need to reduce our clinic hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund additional staff and services. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places organizations in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Star Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $300,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Star Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Star Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Conclusion Star Community Health has been a transparent and accountable steward of the existing 340B program and strongly urges HRSA to NOT implement a 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Star Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Star Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Quynh Hicks Executive Director Star Community Health April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Star Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Star Community Health is a Federally Qualified Health Center Look Alike (FQHC-LA also referred to as a Community Health Center or CHC) serving approximately 52,300 patients annually across 15 clinic sites in multiple counties within Pennsylvania and New Jersey. Our patient population includes a high proportion of uninsured, medically underserved, and economically vulnerable individuals, as well as Medicaid beneficiaries. Star Community Health operates 5 contract pharmacies. o 3,125 total 340B eligible prescriptions o Generating ~$478,000 in net 340B savings after program administration costs o Recent participation with the 340B ESP portal to un-restrict select manufacturer pricing, Star Community Health has the potential to generate approximately $1.3M in net 340B Savings annually. o These savings are directly reinvested into patient care services, including: Sliding fee scale discounts for uninsured and low-income patients Behavioral health integration Chronic disease management programs Care coordination and care gap closure services Financial Losses: Star Community Health anticipates a loss of $ 300,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Executive Administration 520 E. Broad Street Suite 108 Bethlehem, PA 18018 I. We Strongly Urge HRSA To Not Implement a 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic- administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Star Community Health provided $5,911,987 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Star Community Health anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Star Community Health anticipates an increase of $200,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.2 o Star Community Health would require 2 FTEs Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.3 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. o Star Community Health estimates the cost to hire 2 FTEs, $180,000 and the upfront costs to exceed $280,000 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Around 20 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. o Star Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 2 Internal NACHC assessment (99 responses). 3 Ibid. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 52,300 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $470,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all seven pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,4 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.5 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.6 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address. 4 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 5 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 6 Internal NACHC survey data A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).7 Assuming a best- case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity- owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B8 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.9 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 7https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 https://340bpricing.hrsa.gov/ 9 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Star Community Health may need to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we may be forced to scale back non- revenue-generating but essential services. Operating Hours: We may need to reduce our clinic hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund additional staff and services. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places organizations in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Star Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $300,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Star Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Star Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.10 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 10 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Conclusion Star Community Health has been a transparent and accountable steward of the existing 340B program and strongly urges HRSA to NOT implement a 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Star Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Star Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Quynh Hicks Executive Director Star Community Health
HRSA-2026-0001-1846American Hospital Association2026-04-20T04:00Z244,075 chars
Attached are comments from the American Hospital Association. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA2026 03042) Dear Administrator Engels: On behalf of our more than 2,000 member hospitals and health systems that participate in the 340B Drug Pricing Program, the American Hospital Association (AHA) appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. This RFI asks, among other things, whether HRSA should implement a rebate model under the 340B program. Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7,287 (Feb. 17, 2026) (hereinafter RFI). As time has gone on, and as HRSA has said more about the rebate mechanism during litigation and in the RFI and its related Information Collection Request (ICR), it has become clear that the only possible answer is no. Because a rebate mechanism of any kind is flawed in both conception and design, the AHA urges HRSA to abandon the idea altogether.1 1 To avoid repetition, the AHA incorporates all of its previous comment letters addressing HRSAs 340B Rebate Model Pilot Program. See American Hospital Association, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Aug. 27, 2025), https://www.aha.org/system/files/media/file/2025/08/aha-comments-to-hrsa-on-proposed-340b-rebate- model-pilot-program-letter-8-27-2025.pdf; American Hospital Association, Comment Letter on 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-0111 - Extension (Sep. 30, 2025), https://www.aha.org/lettercomment/2025-09-30-aha-letter-hrsa-re-340b- rebate-model-pilot-program. The AHA also incorporates all of its legal filings in the United States District The Honorable Thomas J. Engels April 20, 2026 Page 2 of 53 Since the 340B program first became law, HHS has recognized a single mechanism to make the 340B price available to participating hospitalsupfront discounts. As the United States Court of Appeals for the First Circuit recently observed, an upfront discount mechanism fulfills Congress purpose in creating the 340B Program: Since Section 340Bs enactment, the pricing agreements have required manufacturers to provide discounts to safety-net hospitals at the time of sale in order to stretch scarce federal resources as far as possible. Am. Hosp. Assn v. Kennedy, 164 F.4th 28, 31 (1st Cir. 2026).2 The First Circuit also recognized that HHS historically determined a rebate mechanism is both inferior to Section 340Bs current upfront-discount model and disruptive to safety-net hospitals. Id. at 32; see also Compl. 43, 45, 48, 50, Am. Hospital Assn v. Kennedy, 2:25-cv-600 (D. Me. Dec. 1, 2025). Yet in this RFI, HRSA has announced that it is still considering whether to move forward with a new version of the 340B Rebate Program. In fact, HRSA has stated that it might expand the Rebate Program to include as many as 15 more drugs. See Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, 91 Fed. Reg. 9,632 (Feb. 26, 2026) (hereinafter 2026 ICR). Put another way, HRSA is persisting with a flawed concept that deviates from the purpose of the 340B Program. In so doing, it will inflict more than a billion dollars in costs annually on the hospitals that Congress designed the 340B Program to benefit. It will jeopardize access to care for millions of Americans. It will force 340B hospitals to divert their scarce resources away from providing comprehensive services to patients and toward compliance with a new discount mechanism that benefits only drug companies and their third-party vendor, Second Sight Solutions. And it will do so in a way that has inherent and insurmountable design flaws. HRSA has said it is considering a rebate mechanism because it believes that it must balance the interests of two industries at loggerheads. Reply in Supp. of Mot. For Stay Pending Appeal at 1, Am. Hospital Assn v. Kennedy, No. 25-2236 (1st Cir. Dec. 31, 2025) (Stay Reply Br.); see RFI, 90 Fed. Reg. 7,288 (HRSA sought a balanced and measured approach to allow eligible manufacturers to implement rebate models, at the Secretarys direction and discretion, within certain parameters that would cause minimal impact on 340B covered entities.); Declaration of Chantelle Britton 4, Am. Hospital Assn v. Kennedy, 1:25-cv-600 (D. Me. Dec. 15, 2025) (Britton Decl.). That belief is mistaken. First, HRSAs statement draws a false equivalence between some of the Courts for the District of Columbia and Maine, and the United States Courts of Appeals for the District of Columbia and First Circuit. 2 The current RFI recognizes that the purpose of the 340B program is to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. RFI, 91 Fed. Reg. at 7288 (quoting H.R. Rep. No. 102384(II), at 12 (1992)). The Honorable Thomas J. Engels April 20, 2026 Page 3 of 53 worlds most profitable publicly traded companies, and American safety-net providers that rely on razor-thin margins to care for rural and other underserved communities. Second, this is the wrong lens through which to view this question. Even if HRSA believes itself to be positioned between two regulated industries, Stay Reply Br. at 4, it must give primacy to covered entities on this issue, see H.R. Rep. 102-384, pt. 2, at 16 (1992). HRSA appears to have done exactly the opposite. See RFI, 90 Fed. Reg. 7,288 (HRSA became interested in testing the merits and shortcomings of a rebate model, including whether it would be beneficial to manufacturers participating in the MDPNP as well as to 340B program integrity efforts relating to the prevention of 340B Medicaid duplicate discounts and diversion. (emphasis added)). HRSAs stated goal of thoroughly balancing competing interests (and its concomitant failure to privilege covered entities) fails from the start. Relatedly, no reasonable cost-benefit analysis could justify the astronomical economic and non-economic burdens a Rebate Program will impose. HRSA estimated that its original Program, which included only 10 drugs, would have imposed $200 million in annual administrative costs on 340B hospitals and other covered entities. This prediction was based on HRSAs estimate that a rebate mechanism would require only 2 hours of additional work per week for covered entities. The AHA previously explained that these 2 hour and $200 million numberswhile unjustifiablevastly underestimated the true administrative costs associated with a 10-drug Rebate Program. HRSAs recent pronouncements reveal that it has doubled down on its flawed methodology and ensuing underestimations. It now states that the scope of the potential 340B Rebate Model Pilot Program will be limited to manufacturers with Medicare Drug Price Negotiation Program Agreements with the Centers for Medicare & Medicaid Services for the initial price applicability years 2026 and 2027. 2026 ICR, 91 Fed. Reg. 9632. While couched as a limitation, that is actually an expansion. Per the ICR, the new Rebate Program could include up to 25 drugs from 13 drug companies. Consistent with this expanded scope, HRSA has increased its preliminary estimate of data collection burden hours from two per covered entity per week to five per covered entity per week. Id. at 9633. Using HRSAs original assumption that each extra burden hour will cost a covered entity $132 (based on a pharmacists 2024 hourly wage and overhead costs), HRSA would now appear to admit that its contemplated Rebate Program will cost covered entities more than $500 million each year in labor costs (3,796,000 hours x $132 = $501,072,000). See id. The proposed Rebate Program therefore would divert at least half a billion dollars away from providing more comprehensive services and care for more eligible patients. H.R. Rep. No. 102-384, pt. 2, at 12 (1992). The previous $200 million labor cost could not justify HRSAs original Rebate Program; a $500 million one certainly cannot either. To make matters worse, HRSAs estimates drastically understate the Rebate Programs administrative costs. Hospitals have made clear that they will need to devote far more than 2 to 5 hours per week to comply with a rebate mechanism. Our most conservative The Honorable Thomas J. Engels April 20, 2026 Page 4 of 53 estimates are that a Rebate Program will require 340B hospitals, on average, to hire at least one new FTE. Using HRSAs own methodology, that estimate translates into a $750 million price tagjust for 340B hospitals, just for one FTE, just for labor costs. An estimate of only one new FTE is almost certainly low, but even at that conservative $750 million number, the decision to move forward with a Rebate Program would be irrational. But that is not all. When the most conservative estimates of the Rebate Programs other operational costs (e.g., third-party vendors and TPAs, auditors, IT specialists, etc.) are added to that already-conservative labor cost estimate, the total administrative costs to 340B hospitals alone will exceed $1 billion. [T]hats billion with a b. White Stallion Energy Cir., LLC v. EPA, 748 F.3d 1222, 1259 (D.C. Cir. 2014) (Kavanaugh, J., concurring in part and dissenting in part), revd sub nom. Michigan v. EPA, 576 U.S. 743 (2015). And this figure does not even include other sizable financial expenses like float costs and loss of cost-of-goods-sold (COGS) discounts. Nor does it include the many downstream, non-economic costs that a rebate mechanism will inflict on patients and communities. These harms are real and inevitable. See Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600, 2025 WL 3754193, at *8 (D. Me. Dec. 29, 2026) (observing that the downstream effect of the Rebate Program will cause hospitals to cut back services and suspend partnerships with drug distributors, and holding that [t]hese claims are not unsubstantiated fears of what the future might hold.). Patients will lose access to discounted or free drugs, vital health care services, and much moreall because hospitals will need to divert resources toward complying with an unnecessary rebate mechanism. See Michigan, 576 U.S. at 752 ([C]ost includes more than the expense of complying with regulations; any disadvantage could be termed a cost...including, for instance, harms that regulation might do to human health.). So after this RFI/ICR comment period, when HRSA has a full tally of all relevant costs, it will have no choice but to conclude that a Rebate Program cannot justify a multi-billion-dollar-imposition on 340B hospitals and other covered entities. Id. at 75253 (2015) (Consideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions. (emphasis in original)). Ultimately, any switch to a rebate mechanism will suffer from the same fundamental defect that the AHA explained when HRSA issued its first Notice: a rebate mechanism is a solution in search of a problem.3 There is nothing wrong with the upfront discount mechanism. HRSA has not identified a single problem with it, and nothing in the past 3 American Hospital Association, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) 2 (Aug. 27, 2025), https://www.aha.org/system/files/media/file/2025/08/aha-comments-to-hrsa-on-proposed-340b-rebate- model-pilot-program-letter-8-27-2025.pdf. The Honorable Thomas J. Engels April 20, 2026 Page 5 of 53 several months has changed that reality. Given covered entities 30-year reliance on that upfront discount mechanism, the AHA respectfully submits that the ancient legal principle[,] if it aint broke, dont fix it, must govern here.4 HRSA cannot avoid this fact by claiming that the Rebate Program is a test. Not only has HRSA never explained what it is actually testing for, see infra at 39-40 n.5, but it is a test (or pilot) in name only. Based on information in the ICR, all covered entities will be required to participate in the Rebate Program. This kind of mandatory participation in a government program does not even meet the Pharmaceutical Research and Manufacturers of Americas (PhRMA) definition of a test. See Pharmaceutical Research and Manufacturers of America, Comment Letter on Global Benchmark for Efficient Drug Pricing (GLOBE) Proposed Rule (HRSA-2025- 14998) 2 (Feb. 23, 2026), https://cdn.aglty.io/phrma/policy-issues/innovative- medicines/Final%20PhRMA%20Comments%20on%20GLOBE%20NPRM.pdf (GLOBE is a mandatory funding mechanism, not a test.); see also id. (GLOBE does not fall within this definition. It is not an experiment. Instead, it will generatewith certainty billions of dollars in forced, punishing rebates from manufacturers.); id. (Imposing price controls in a nationwide manner, however, and charging manufacturers 25 percent rebates based on such price controls, is hardly a mere test.). Because there is no sound or lawful reason to abandon the upfront discount model, and because the costs of any switch will massively outweigh any expected benefits, HRSA should not proceed with any rebate mechanism. Any other decision would do serious, irreparable harm to 340B hospitals and the patients they serve. I. A Rebate Program Will Impose Far More Costs On 340B Hospitals Than HRSA Estimates The AHA appreciates HRSAs attempt, through this RFI, to identify the full range of costs that a rebate mechanism will inflict on 340B hospitals, their patients, and the communities they serve. To list these costs is to admit how quickly they will add up and thereby divert vital resources away from reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384, pt. 2, at 12 (1992). For example, the RFI correctly identifies broad categories of costs, including administrative costs, staffing impacts, data infrastructure costs, payment-timing costs (or what the AHA calls float costs), and more. It also correctly identifies many of the key cost drivers: new full-time employees, additional labor hours, IT systems, third-party vendors, compliance requirements, claims processing, data submission, reconciliation/tracking down rebates owed, audit support, legal review, consulting services, and more. And it rightly recognizes that these new added costs will result in 4 Tr. of Oral Arg. at 33, In re: Grand Jury, No. 21-1397 (Jan. 9, 2023). The Honorable Thomas J. Engels April 20, 2026 Page 6 of 53 reduction in services offered to patients and medication access concerns. RFI, 90 Fed. Reg. 7,289. To date, HRSAs calculations of these costs have missed the mark by a wide margin. During the original administrative process, HRSA dramatically undercounted administrative costs and improperly dismissed float and other non-economic costs. Now that HRSA expects to include the 2027 Inflation Reduction Act (IRA) drugs, those already-tremendous costs will skyrocket. In fact, many hospitals explain that the financial costs of the Rebate Program are so significant that they will substantially eat away at the benefits that Congress intended for them to receive from the 340B Program.5 Therefore, as HRSA reviews the AHAs comments, as well as those submitted by its members and other covered entities, it will become unmistakably clear that the costs of any Rebate Programeven a so-called pilotare unjustifiable. Administrative Costs. The AHA and other stakeholders have explained why HRSA previously underestimated the administrative costs and burdens that the Rebate Program will inflict on 340B covered entities. Given the significance of this issue and the continued severity of HRSAs miscalculations in the ICR, we will explain again. It is important to acknowledge at the start that even the administrative costs that HRSA has recognized$200 million for the 2026 IRA drugs and $500 million for the 2027 onesare enormous. Although we agree with HRSA that participation in the 340B Program ... has always entailed certain compliance, operational, and other costs, Britton Decl. 34, there is no reason to impose new costs if they are unnecessary, are not outweighed by any expected benefits, and are inconsistent with the purpose of the 5 See, e.g., Rooks County Health Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 5, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-0046 (These costs would consume an estimated 2030% of RCHCs 340B margin for the drugs included in the pilot, substantially eroding the programs benefit.); ONeill Decl. 18, Am. Hospital Assn v. Kennedy, 2:25-cv-600 (D. Me. Dec. 1, 2025) (This administrative cost for a so-called pilot program is 20% of our entire discount from the 340B Program.); Wheeler Health,, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 3, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0305 (Wheeler Health reports an average loss of $500,000 to $3 million from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation.); Wabash General Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1438 (Overall, the rebate overhead would consume approximately 30% of our savings for the 10 pilot drugs.); Beth Harwood, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 1, 2026), (The numbers at [Ammonoosuc Community Health Services] tell the story clearly: ... Adding the administrative costs required by a rebate model would erode ACHS savings by 95% effectively ending the program's benefit for our patients.... This is not about fraud prevention. Robust oversight mechanisms already exist. This is about making the program so burdensome that safety-net providers cannot sustain participation.). The Honorable Thomas J. Engels April 20, 2026 Page 7 of 53 340B program. HRSAs baseline estimates of $200 to $500 million in costs fail each of these yardsticks. Just because the 340B Program requires some administrative spending does not mean that HRSA should impose more administrative spending. As the AHA has previously observed, moreover, HRSAs estimates illustrate the lopsided burden imposed on covered entities as compared to drug companies. HRSA predicts only a few hundred hours of annualized burden on drug companies, while estimating over 5,000 to 12,000 times the amount of annualized burden hours on 340B covered entities (depending on the number of drugs in the Rebate Program). See 2026 ICR, 91 Fed. Reg. 9,632. It is hard to understand why HRSA would want to distribute burdens so unevenly. The AHA can only assume that it is just another indication that HRSA is viewing this issue from the wrong balance-the-interests-of-two-industries lens, see supra at 2-3, even though these burdens are anything but balanced. Where HRSA should be privileging covered entities on this question, see id., these disproportionate burdens confirm that it is favoring drug companies. It would be bad enough if HRSA was poised to impose only $200 or $500 million in new, unjustified administrative costs. But that estimate is dramatically low. As AHA has explained, HRSAs earlier $200 million-estimate incorrectly assumed that each covered entity will have to make 52 responses to the third-party platform and that each response will impose only two hours of burden. Put another way, HRSA assumed that hospitals would submit data only once a week and that each hospital would have to spend only two hours per week to comply with a rebate mechanism. HRSAs updated estimate follows the same flawed methodology, although it increases the number of hours per week to five (to ostensibly reflect that HRSA is contemplating including 2.5 times the number of drugs in its new Rebate Program). See 2026 ICR, 91 Fed. Reg. 9,633. HRSAs methodology is unexplained and unsupported, and it results in a massive understatement in labor hours. Our members have informed the AHA that, on average, any Rebate Program will require them to hire new full-time employees. Full-time means full time40 hours per week. Using HRSAs own methodology ($132 hourly wage rate X 40 hours per week X 52 weeks X number of 340B hospitals, this chart illustrates just how widely HRSAs labor and cost calculations miss the mark.6 6 Although the AHA is relying on HRSAs methodology to illustrate the costs of the Rebate Program, even the assumptions built into HRSAs calculations underestimate the real-world costs. For example, HRSAs estimate for pharmacist wages are based on May 2024 Bureau of Labor Statistics data. See Health Resources & Services Administration, 340B rebate Model Pilot Program Application, Implementation, and Evaluation Supporting Statement, at 6 n.4. That stale data does not reflect wage inflation over the past several years. Even a 3-5% increase in pharmacist wages would cause a significant increase in anticipated administrative costs. Likewise, the AHAs chart only reflects additional pharmacist hours. Our members inform us that a rebate mechanism will require additional weekly work for IT and cybersecurity specialists, lawyers, accounting/revenue cycle employees, and others in their institutions. Because the costs of the Rebate Program are so high when one only counts pharmacist hours, we need not to The Honorable Thomas J. Engels April 20, 2026 Page 8 of 53 Hourly Wage Rate Hours/ Week Weeks 340B Hospitals Annual Burden Hours Annual Cost Pharmacist (1 FTE) $132 40 52 2,728 5,674,24 0 $748,999,680 Pharmacist (2 FTE) $132 80 52 2,728 11,348,4 80 $1,497,999,360 Pharmacist (3 FTE) $132 120 52 2,728 17,022,7 20 $2,246,999,040 Information from the AHAs member hospitals supports these calculations. When told that HRSA was predicting only five hours per week for a revised Rebate Model, their reactions alternated between laughter to outrage. Hospitals consistently informed us that even HRSAs $500 million prediction was wrong by an order of magnitudeand this chart reflects that fact. In addition, 340B hospitals disputed HRSAs assumption that the number of hours for the 2027 IRA drugs would increase linearly (i.e., 2.5 times its previous estimates for only 10 IRA drugs). HRSAs back-of-the-envelope math does not reflect the fact that, in reality, many of the 2027 drugs are more frequently prescribed at certain hospitals, and so there are more claims to submit and more rebates to reconcile on the back end by including the 2027 IRA drugs. At any rate, the AHA has chosen to provide a range of potential labor costs here because even at a conservative estimate of only 40 hours per week, the price of the Rebate Program is outrageous. HRSA cannot justify a minimum of $750 million in labor costs alone. Also consider what this exceedingly conservative $750 million figure omits. It does not include the administrative costs for the remaining estimated 11,900 covered entities that are not hospitals; they, too, have reported the need for new FTEs.7 It does not account for the fact that, as one hospital commented, individuals that have the knowledge of the 340B program and the skills required to hold this position are rare. Securing a qualified include hours estimates for these additional employees to demonstrate that the Rebate Program is unjustifiable. To the extent that HRSA disagrees, however, it must account for hours for these other types of employees as well. 7 See, e.g., Advocates For Community Health, Comment Letter on 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-0111 - Extension (Nov. 12, 2025),. The Honorable Thomas J. Engels April 20, 2026 Page 9 of 53 candidate and training them properly would take at least one year.8 Put differently, this sudden demand for a limited supply of 340B talent will not only raise the cost of labor (likely making the $132/hour figure low), but there will be additional training costs for those unfamiliar with 340B. See, e.g., Beauregard Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1572 (DeRidder is a small rural town of 10,000 people; it took us 5 months to hire a pharmacist this past winter. Finding a 340b skilled person would be almost impossible, if we were able to hire another person.). And perhaps more important, if hospitals cannot hire employees needed to run a rebate mechanism for up to one year, it raises the serious question of how they will be able to comply with a purported one-year pilot. The conservative $750 million estimate also does not include the many other kinds of administrative costs of a rebate mechanism (e.g., vendor and third-party administrator fees, IT support, financial auditing costs, etc.), which we are told will range from $150,000 to over $750,000 per hospital, with costs increasing further if there are significant delays and denials with the rebate payments.9 Taking an extremely 8 E.g., MyMichigan Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 0044 see Samaritan, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0304 (It will take 6 to 12 months to advertise and find a qualified employee to hire.); Monadnock Community Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1415 (Advance notice of at least 612 months would be needed to recruit, hire, train, and embed those staff into existing revenue cycle and compliance processes.); Madison Community Hospital d/b/a Madison Regional Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1447 (Due to additional administrative burden related to rebates we would have to add FTEs in both our Pharmacy and Finance departments.... Advance notice to hiring any additional staff for this program would be a minimum of 6 months. Due to the rural nature of our community, finding the staff with experience in the 340b program is almost impossible, therefore adding to the delay of having to educate/train a new staff member delaying this at an estimate of another 12 months.). 9 E.g., St. Tammany Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 9, 2026), https://www.regulations.gov/comment/HRSA-2026- 0001-0080 (Our preliminary analysis indicates that ongoing annual incremental administrative and operational expenses are estimated to be between $340,000 and $950,000, which covers staffing, financial tracking, IT maintenance, reporting updates, vendor fees, and audit or consulting services.); St. Peters University Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0111 (The cost of the rebate billing and tracking software, although difficult to estimate, could reasonably be approximated $500,000 per year.); Elliot Hospital,, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026- 0001-0317 (Any rebate program would place significant burden on the covered entity and the administrative burden would be overwhelming for Elliot Hospital. Initial administrative impact is estimated The Honorable Thomas J. Engels April 20, 2026 Page 10 of 53 at $1.5 million annually for Elliot Hospital. This upfront increased cost burden will eat into the benefits of the 340B Program and reduce our available savings by more than 10%. This does not account for the countless hours of labor required to prepare and handle the change.); Bitterroot Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0058 ([W]e estimate a one-time startup investment (interfaces, policy updates, training, accumulator updates) of approximately $95,000 $185,000. Ongoing annual administrative and IT costs for the initial 10-drug scope are estimated at $80,000$140,000 per year. As the pilot expands to 25 drugs and beyond, ongoing annual administrative costs are expected to escalate toward approximately $120,000$185,000+ per year at 25 drugs.); Jordan Valley Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0085 (estimating an additional $155,000-$285,000 in annual non-labor costs); Memorial Community Hospital and Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0105 (A rebate-based model would significantly increase administrative and compliance costs, require additional staffing that rural hospitals like ours do not have, and force costly changes to IT systems built around an upfront discount framework. Based on national estimates and internal modeling, MCH's annual administrative costs would increase by $75,000 to $250,000, IT implementation costs could reach $300,000, and ongoing system costs would be substantial.); Vermont Health Network Inc., dba University of Vermont Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17), https://www.regulations.gov/comment/HRSA-2026-0001-1720 (UVM Health estimates an upfront cost between $3,000,000 to $4,000,000 in third party administration and expenses to operate a rebate model.... UVM Health estimates that ongoing expenses could cost up to $1,000,000 annually to continue to operate a rebate model.); Columbus Regional Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1422 (We estimate it could cost us an additional $500,000 in new full-time hires and subscriptions to vendors to manage the new work streams created by a rebate program. These are conservative estimates based on current data available.); Wabash General Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1438 (Under the rebate program, we estimate the incremental administrative and operation startup costs to be $122,000 to $178,000, including information technology redesign, TPA interface setup and staff training. Ongoing annual costs are estimated at $160,000 to $230,000 including staffing, compliance monitoring, dispute management, and manual reconciliation. These amounts are based on increased staffing for manual claims-level submissions, reconciliation and denials and disputes, TPA charges, IT labor hours for redevelopment, monitoring and audit preparation. In addition, legal review, cybersecurity, and consulting support would range from $27,000 to $41,500 as well as reduced service capacity.); Temple University Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1396 (We anticipate additional operational costs of $650,000 that could otherwise be invested in patient care and community health improvement. This includes start-up costs, ongoing staff costs, 3d party platform and associated costs. These represent new administrative layers that do not exist under the current model.); Coffee Regional Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1369 (Coffee Regional Medical Center estimates that implementation of a 340B rebate model would result in approximately $530,234 in incremental annual administrative and operational costs, effectively doubling our current 340B administrative spend of $265,117. These costs include both one-time startup expenses (IT system redesign, vendor onboarding, staff training, and legal review) and ongoing recurring costs (claims submission, rebate tracking, reconciliation, dispute management, audit preparation, and The Honorable Thomas J. Engels April 20, 2026 Page 11 of 53 conservative estimate of $150,000 a year for each of the 2,728 340B hospitals, these additional operational costs would add more than $400,000,000 to the overall tab. And when that conservative figure is added to the already-conservative one FTE (40 hours/week) of new labor costs, the total administrative costs of a rebate mechanism exceeds $1 billion for 340B hospitals alone. Expanded to include all covered entities, the AHA can conservatively estimate that this so-called pilot program will cost covered entities several billions of dollars in administrative costs annually. HRSA nonetheless took the position during litigation that the AHA and the other plaintiffs had not substantiated their assertion that the rebate mechanism would require the use of new full-time employees. Reply in Supp. of Mot. For Stay Pending Appeal at 5. We disagree but will take this opportunity to substantiate our calculation again. The past and present administrative and judicial records are replete with stakeholders directly telling HRSA that they would need to hire new full-time employees to comply with a Rebate Program. Last fall, the AHA and other hospital associations submitted comments explaining that their member-340B hospitals would need to hire new full-time staff to comply with a 10-drug program.10 Individual 340B hospitals also submitted comments explaining that they would need to hire full-time employees to comply.11 Plaintiff hospitals submitted declarations in the litigation explaining that they would need to hire full-time employees to comply.12 Other types of covered entities submitted letters compliance oversight)); University of California Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026) (Vendor support costs are estimated at $100,000$350,000 per campus annually costs that are entirely new and incremental to our existing administrative baseline.). 10 See, e.g., American Hospital Association, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) 13-14 (Aug. 27, 2025),; 340B Health, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) 6-7 (Sep. 8, 2025). 11 E.g., United Health Services Hospitals, Inc., Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Sep. 8, 2025); Speare Memorial Hospital, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Sept. 8, 2025); J. Wallgren on behalf of a KS critical access hospital, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Sept. 4, 2025). 12 See Fadele Decl. 22 (Our pharmacy staff does not have capacity to administer Defendants planned rebate program. NLH will be hiring a new full-time employee to handle this new administrative burden.); Mantz Decl. 18 (We also do not have the staff to track and chase rebates and monitor the impact on our operational budget. DCMC administers the current 340B Program with a single internal employee. But we estimate that Defendants rebate program will require thirty to sixty hours of staff time each week. Therefore, we will have to hire two additional full-time employees, one in the pharmacy department and another in accounting.); Brown Decl. 21 (St. Marys is a leanly staffed health system, and we do not currently have staff capacity to comply with Defendants rebate program to track the status of the refunds St. Marys is owed from the drug companies. This process will take our health system significantly more The Honorable Thomas J. Engels April 20, 2026 Page 12 of 53 explaining that they would need to hire full-time employees to comply with that original Rebate Program.13 And now, the fraction of 340B hospital comments submitted during this RFI period (posted on regulations.gov before April 18, 2026) conclusively prove that 340B hospitals will need to hire one or more FTEs to comply with a Rebate Program.14 Clearly, then, the Rebate Program will require the use of new full-time employees. Reply in Supp. of Mot. For Stay Pending Appeal at 5. That was true for a Rebate Program that involved 10 drugs, and even more so for a so-called pilot that includes the 2027 IRA drugs. Those who actually work in 340B hospitals (and will be tasked with complying with any Rebate Program) have consistently told HRSA that they will need to hire new employees because their current staffing structures rely on the 30-year old upfront discount model. These people know best the operational side of the 340B Program, the capacity of their current staffing, and the gaps that will need to be filled to comply with the Rebate Program. It is unclear why HRSA disregarded this abundant and consistent record evidence. It is even less clear why it continues to disregard this evidence in the 2026 ICR by estimating only 5 hours per week of additional labor to comply with an expanded Rebate Program. In fact, at this point, even the position that further substantiation is needed runs counter to the evidence before the agency. State Farm, 463 U.S. at 43. Put simply, the need for new full-time employees has been substantiated: the Rebate Programs workload will require far more labor costs than HRSA estimates. Although the AHA and others have explained it before, perhaps HRSA seeks further substantiation of what these new full-time employees will be doing to comply with a Rebate Program. Our members have informed us that submitting data and tracking rebates is not as easy as HRSA may believe, or as the drug companies and Second Sight Solutions are telling the agency. The AHA would welcome the opportunity to meet in person to address any specific questions in detail. For now, we summarize several practical complexities inherent in a rebate mechanism that will require additional resource commitments. First, significant staff hours would be required each week to upload the claims data and verify data integrity across systems with differing package sizes and National Drug than two hours per week; I expect that St. Marys will have to hire a new staff person if the rebate program is implemented.). 13 E.g., Advocates For Community Health, Comment Letter on 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-0111 - Extension (Nov. 12, 2025), (According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.). 14 See Appendix A (listing selected comments regarding the staffing impacts of a Rebate Program). The Honorable Thomas J. Engels April 20, 2026 Page 13 of 53 Code (NDC) configurations. In part, this is because the data is often housed in different systems throughout a hospital, requiring employees to pull data from many places so that they can build and verify separate reports to comply with the required data fields.15 Likewise, the requirements imposed under the previous Rebate Program are different from anything 340B hospitals have ever had to submit in the past (even under 340B ESP), creating a greater workload simply to submit claims.16 15 See, e.g., MyMichigan Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 0044 ([W]e will have to manually retrieve and report [the information needed]. This would require us to access multiple systems as insurers reimburse claims differently for hospital versus pharmacy.); Maricopa County Special Health Care District DBA Valleywise Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1399 (The data collection needed to participate fully in a Rebate Model Pilot would require access and meticulous data management of various reporting elements within the organization. Valleywise Health does not currently have the necessary technology or reporting capabilities needed to ensure that all data requirements are met from a singular source. Any reporting would need to be compiled from information over various platforms (wholesaler, EMR systems, and other database records) and maneuvered to fit the Beacon or other application requirements. This process would be labor intensive, requiring many systems, manhours, and various tools with the knowledge that any missed opportunities would result in a manufacturer denial of claim and at a monetary loss to the organization. This loss of savings would have impact to our programs utilized to support those most vulnerable patients of Valleywise Health.); Graham County Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 5, 2026), https://www.regulations.gov/comment/HRSA-2025-0001-0012 (Our hospital currently collects and maintains 340B data through our EHR, pharmacy dispensing system, wholesaler platform, and TPA (PDMI). We use third-party support for program oversight and conduct routine internal reviews along with annual mock audits. 340B ESP is used only for limited manufacturer-required contract pharmacy verification it is not a rebate invoicing platform.... The data we provide today through 340B ESP and payers for billing purposes does not include the detailed financial reconciliation and rebate tracking elements required under a manufacturer rebate framework. Implementing such a model would create ongoing administrative burden and additional costs for our hospital, which operates on narrow margins as a rural safety net provider.). 16 It is no answer that Eli Lilly, Novo Nordisk, AstraZeneca, Bristol Myers Squibb have recently unilaterally imposed onerous data requirements on 340B hospitals for them to receive their 340B discounts. At a minimum, those policies do not require back-end reconciliationthe most costly and burdensome part of the process. More fundamentally, Lillys, Novos, AstraZenecas, and Bristol Myers Squibbs policies are unlawful, as AHA has explained to HRSA. See Letter from Chad Golder, General Counsel, American Hospital Association to The Hon. Thomas J. Engels, Administrator, HRSA (Jan. 26, 2026), https://www.aha.org/2026-01-26-aha-urges-hrsa-stop-eli-lillys-new-policy-340b-hospitals-going-effect. In fact, the comments submitted in response to this RFI demonstrate the illegality of these policies; the costs associated with complying with either a rebate mechanism or these policies unlawfully raise the effective ceiling price in violation of the 340B statute. Thus, if HRSA relies on those policies to justify its Rebate Program in any way, it must explain why Lillys and Novos unilateral actions do not violate the 340B statute. If HRSA fails to do so, it will be ignoring an important aspect of the problem. In addition, to the extent either the drug companies or HRSA itself relies on covered entity compliance with Lillys, Novos, AstraZenecas, and Bristol Myers Squibbs illegal policies, it must understand that covered entities are complying under duress. Faced with the prospect of losing The Honorable Thomas J. Engels April 20, 2026 Page 14 of 53 Whats more, many small and rural hospitals do not have the specialists on staff to deal with the complexity of the Rebate Program submissions. In reliance on 30 years of an upfront discount system, they did not need to expend resources on specialized pharmacy, financial, and data analytics expertise that will be needed for a rebate mechanism. These 340B hospitals informed the AHA that their current staff does not have the capacity or training to absorb this new work.17 Second, even more hours will be required to reconcile outbound claims with inbound rebate status (separate from the actual payment reconciliation).18 This is an entirely new category of labor-intensive work that never had to be done under an upfront discount mechanism. Hospitals will have to track claims on the backend, confirm receipt of payment for a claim, match it to internal reports for outgoing claims requests, allocate the payments to different internal cost centers, and conduct audits to ensure compliance. And denials or delays will introduce their own extra reconciliation substantial 340B discounts, and faced with the fact that HHS has not stepped in to address Lillys, Novos, AstraZenecas, and Bristol Myers Squibbs unlawful actions, 340B hospitals are incurring administrative costs to comply with these policies. But make no mistake: those covered entities that are complying are not doing so because it is easy, cheap, or lawful; they are doing so because, as a practical matter, they have no other choice. 17 While they may seem minor, the following two scenarios illustrate just some of the workload challenges associated with the new data requirements. First, our members have informed us that certain data field requirements (e.g., health payer ID, BIN/PCN) create unique challenges for the uninsured. Because covered entities need to keep those fields blank, they need to do certain manual checks, which takes time. FQHCs have identified the same problem. See MCR Health, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Sep. 8, 2025) (BIN/PCN are limited to retail prescription claims with insurance coverage. They are frequently unavailable for prescriptions filled for uninsured individuals who pay with cash or use a health centers sliding fee scale program. Requiring this data would effectively exclude a core portion of the patient population that health centers serve, creating an operational barrier for a model intended to be transparent and comprehensive.). Second, members have informed us that they must manually validate and update the units of measurement to comply with the Rebate Programs data requirements. This creates additional human work. One member explained: For example, injectables are dispensed in 2 different ways: eaches or in mLs. Enbrel, one of the rebate drugs, comes in a pack of 4 syringes, which are 0.5 mLs each. If you dispense the whole package, then you can dispense it as 4 syringes or 2 mLs. Beacon requires unit of measure to be in eaches, so we need to manually override a mL entry to be in eaches. The time spent to meet these requirements adds up. Only a hospitals on-the-ground perspective demonstrates how difficult this shift from upfront discounts to a rebate mechanism will be in the real world. 18 It is unclear how the drug companies intend to provide rebates. It is the AHAs understanding that some companies will make lump-sum payments covering a swath of claims, rather than claim-by-claim distributions. That will require additional work so that a hospital can make sure they were fully reimbursed for all claims and then appropriately allocate the rebate to the correct units and departments within their system. The Honorable Thomas J. Engels April 20, 2026 Page 15 of 53 challenges. Many 340B hospitals inform us that this likely will be both the most time- consuming and labor-intensive part of the process.19 Third, even before the new claims and reconciliation process begins, many hundreds of staff hours must be spent across the entire hospital organization to prepare for a new discount mechanism. This includes considerable preparatory work across many hospital departments, in all of the cost-driving areas that the RFI lists. It will include work by pharmacy, IT, security risk, government reimbursement, revenue cycle, patient financial services, accounts receivable, legal, and compliance teams. Even these one-time costs are significant. If HRSA is really serious that this is a limited pilot, one must ask whether these one-time sunk costs are worth imposing at all if HRSAs purported test will ultimately fail? Just think about how much better these one-time outlays could be spent on patient care and comprehensive health care services if 340B hospitals didnt have to pay these sunk costs for a destined-to-fail rebate pilot See infra at 34-35 & n. 35. Yet despite all of this record evidence, HRSA has said in the past that its workload estimates were so low because it assumed that covered entities are already submitting the same type of information to Second Sight Solutions similar IT platform, 340B ESP, which is only used for contract pharmacy claims. See Britton Decl. 36; Reply in Supp. of Mot. For Stay Pending Appeal at 5; see also 91 Fed. Reg. 9632. HRSA believed that the Rebate Program process will be easier because, since 2021, in connection with manufacturer contract pharmacy policies, many covered entities have been submitting claims data to 340B ESP, an IT platform owned by Second Sight Solutions. See Britton Decl. 36 . Let us be clear: that assumption is wrong. HRSA cannot rely on the incorrect premise that a 340B hospitals cost, workload, labor hours, or any other driver should be lowered because hospitals are already submitting information to 340B ESP. HRSAs assumption was mistaken for several reasons: Far fewer covered entities rely on 340B ESP than HRSA assumes. HRSAs assumptions about the prevalence of 340B ESP claim submissions are incorrect. Not as many 340B hospitals use it as HRSA may have been told.20 19 As explained below (at 24,52), moreover, additional staff or services would be needed to address disputes between drug companies and covered entities, including if HRSA intends to: 1) allow drug companies broad authority to deny rebates, see RFI, 90 Fed. Reg. 7,290, and 2) rely on the ADR process alone for dispute resolution. 20 For instance, one AHA member told us that it submitted data to 340B ESP for approximately one year before discontinuing due to inability of 340B ESP to comply with requests from [its] cyber security team. This member also explained that it had monthly standing meetings with representatives from 340B ESP The Honorable Thomas J. Engels April 20, 2026 Page 16 of 53 And while information about 340Bs exact market penetration is difficult to come by, we believe they process a miniscule amount of claims. Some estimates indicate that they process less than 4% annually; others suggest less than 1% annually. Therefore, the notion that most covered entities provide the type of claims data they will need to provide (Britton Decl. 36) under the Rebate Program because of 340B ESP is incorrect. If HRSA is going to rely on that assumption in any respectwhich it should notit will need to make public more accurate and detailed data from drug companies and Second Sight about 340B ESP usage, as well as a thorough explanation for why any existing use of 340B ESP actually will lead to reduced costs for a Rebate Program. The Beacon IT platform would have imposed more restrictive data qualification criteria than 340B ESP. On December 10, 2025, Second Sight Solutions sent covered entities a document called Beacon Rebate Model: Data Validation Criteria. According to our members, these requirements imposed far more restrictive qualification criteria than 340B ESP imposes (e.g., active NPPES, NDC expiration requirements), and it will take far more time for hospital teams to research, validate, and submit claims. In addition, as compared to 340B ESP, there is enhanced documentation and audit risk involved in the Rebate Program. 340B ESP does not require post-submission reconciliation. Validating and reconciling the receipt of rebates likely will be the most time-intensive and costly component of the Rebate Program. 340B ESP for contract pharmacies does not require any of that work. Thus, while data submission under the Rebate Program itself is still more time intensive than under 340B ESP for the reasons explained above, a Rebate Program also imposes a greater burden through back-end operational and financial reconciliation requirements. 340B ESP is, itself, a burdensome and flawed system. HRSA believes that workloads will decrease simply because some number of hospitals already submit data to 340B ESP. But that assumes that 340B ESP itself does not create workload or staffing challenges in its own right. That assumption is wrong. and were unable to resolve issues around 340B ESP's determination of [managed care plan] claims as eligible or not. After these difficulties, the member simply gave up trying. Comment letters submitted in response to this RFI reinforce the reality that fewer hospitals use 340B ESP than HRSA may have been told. See, e.g., Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 19, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-0100 (We do not currently provide any Data to ESP except for claims at one Contract Pharmacy that accounts for less than 20 prescriptions per month. New restrictions being applied will eliminate this pharmacy at the end of the month.); Beauregard Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1572 (This 340b ESP platform is cumbersome and customer service is not very well managed. We use it as little as possible.). The Honorable Thomas J. Engels April 20, 2026 Page 17 of 53 According to our members, 340B ESP routinely produces a large number of false denials that require extensive staff review. Critically, hospitals often find that the issue originated on the 340B ESP side, creating a large and ongoing operational burden. These problems will be exacerbated if Beacon takes on more responsibility as the drug companies chosen platform for a Rebate Program. If a rebate mechanism is implemented, Beacon will have to manage millions more claims than it already does under 340B ESP for contract pharmacies. Second Sight Solutions cannot handle the work it already has, so we can easily expect more bugs, delays, and incorrect denials in the future.21 21 See, e.g, Pella Regional Health Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 3, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-0296 (Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly.); Blessing Health System (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1620 (same); Miami Valley Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1405 (same); Vanderbilt Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1593 (Vanderbilt Healths early data from the MTF process indicates a 30% error rate from the third-party administrator matching 340B claims to potential IRA rebates, primarily overpayments requiring deduplication.); cf. Premier, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 6, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0662 (CMS rebate reconciliation process and validation for initial Inflation Reduction Act (IRA) drugs have presented challenges related to efficiency and accuracy. The platform often misclassifies non-340B eligible claims as 340B eligible, and vice versa, resulting in confusion and delays. Additionally, the appeals process to resolve these issues is complex and time intensive. In response, several hospitals have been forced to redirect existing staff or hire new FTEs to manage errors and appeals.); Kootenai Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1509 (Our recent experience with the IRA Maximum Fair Price (MFP) rebate program reinforces concerns about the administrative burden these changes would create. Contesting missing MFP rebates in the Beacon platform is an unintuitive, multi- step process that requires substantial time and effort for each incorrectly processed claim. Inquiries must be submitted through one platform, with supporting data uploaded to a separate system for each claim. From identifying errors, submitting a good-faith inquiry, uploading supporting claims data, and validating the response, each claim can take up to 30 minutes to resolve. To date, we have identified hundreds of claims each month requiring this level of manual intervention. While we recognize that this may not be a direct reflection of how the 340B rebate program will ultimately operate, it represents our main experience with the vendor previously selected to operationalize the program. Based on this we believe our concerns are reasonable and warrant consideration.); Johns Hopkins Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1644 (Although the manufacturers are subject to a 14-day prompt MFP payment window requirement, many of our MFP rebate payments have been delayed well beyond that window, and these delays have materially affected our cash flow. This is not an The Honorable Thomas J. Engels April 20, 2026 Page 18 of 53 All in all, the record evidence proves that HRSAs prior administrative cost calculations dramatically underestimate what 340B hospitals will actually experience under the Rebate Program. The fact that some hospitals may use the 340B ESP platform does not erase that reality. And it is no answer that HRSA rejected even more costly and onerous demands by the drug companies. See Britton Decl. 37-39. The billions of dollars in costs that HRSA actually will impose are colossal in their own right. HRSA must weigh these far-larger-than-previously-estimated administrative costs against any benefits it perceives in imposing an unprecedented rebate mechanism on 340B hospitals. Float Costs. The First Circuit correctly recognized that the Rebate Program would force safety-net hospitals to pay to the drug manufacturers upfront prices far exceeding the amounts that they actually oweessentially functioning as an interest-free loan from the hospitals to the manufacturersand then wait for a rebate. Am. Hosp. Assn, 164 F.4th at 32. It is beyond dispute that 340B hospitals will have to float gargantuan amounts to drug companies. As a matter of basic arithmetic, the difference between WAC price and the 340B price is considerable; having to pay drug companies the difference, even for a short period of time, leads to eye-popping float amounts. Floating these sums imposes significant costs and burdens on 340B hospitals. HRSA previously minimized them, but on the basis of several faulty premises. isolated occurrence. Through mid-March 2026, we identified at least 100 claims that were inaccurately categorized by the Beacon platform and therefore required Good Faith Inquiries (GFIs), resulting in approximately $178,000 in erroneously denied MFP rebates in just the first couple months of the MFP program, not including additional claims that appear to have been underpaid by the manufacturer.); Advocate Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1666 (Current efforts to avoid 340B/MDPNP Duplicate Discounts via the Beacon IT platform suggest that Beacons proposed credit process for reversals will ensure inconsistent payments and the inability to accurately track all medication claims for a specific product. A change to a rebate model would not solve the existing issues with the deduplication process and/or would only make those issues worse.); Colquitt Regional Health System and the Hospital Authority of Colquitt County, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA- 2026-0001-1727 (The Medicare Maximum Fair Price (MFP) program uses a similar system/setup to the proposal for the rebate pilot program. For the 10 drugs included in the request for MFP, Colquitt Regional had 42 qualifying dispensations in February of this year based on the requirements. Out of the 42, nineteen (45%) processed correctly. Twenty-three (23) processed incorrectly. After reconciliation, we were able to show that 22 of those 23 were in fact 340B drugs and requested they be reversed in the Beacon system. We expect similar results under a rebate model, but with exponentially more qualifying transactions which will affect our cash flow.). The Honorable Thomas J. Engels April 20, 2026 Page 19 of 53 First, HRSA apparently credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC [wholesale acquisition cost] amount is due. Britton Decl. 30. Unfortunately, HRSA relied on incorrect information about when hospitals must pay their wholesalers. For starters, had the original Rebate Program gone into effect, some wholesalers would have required covered entities to deposit large sums of money into their prepay account, solely in response to the increase in WAC invoice amounts. Essentially, this prepay requirement functions like an escrow or retainer that will be drawn down as drugs inventory is replenished. It therefore does not matter how quickly 340B hospitals will be rebated by drug companies; they will have to float large sums as a prepay regardless of the repayment timeline. In addition, our members consistently inform us that it is wrong to assume that covered entities will be rebated before wholesaler payment at the WAC price is due. Comment letters submitted prior to this letter confirm this. Hospitals and health systems anticipate a multi-day gap between payment and rebate given invoicing schedules. As one member told us: Health systems have varying payment schedules with the wholesalerssome as often as weekly. The turnaround time on the rebate model would never be received by the time we would need to pay our wholesaler. Disputes, denials, [and] appeals would add additional time to payment. Much like this member, many other members inform us that their wholesaler payments are due in 5 or 7 days, which is obviously less than a 10-day rebate period.22 Indeed, 340B hospitals of all sizes, large and small, told us that there undoubtedly will be some delta between payment at full price and rebate from the drug companies, and that this gap will be, as one major hospital system called it, a serious pain point. In particular, that mismatch between WAC payment and rebate timing will create dire cash flow 22 See, e.g., Kent County Memorial Hospital (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1624 (The financial impact of a rebate model would be high, right from the start. If the first 25 drugs of the IRA MFP are approved to the 340B rebate model, Kent Hospital would need to pay approximately $25,713,556.49 in additional upfront costs to purchase the drugs at the wholesale acquisition cost (WAC) price. HRSA has suggested that covered entities will receive the 340B rebate before the WAC invoice is due to be paid, but that is not accurate for Kent Hospital. Due to its volume of purchases, Kent Hospital is contracted with its primary wholesaler to pay invoices on a weekly basis, therefore, the WAC invoice will be paid at full price prior to the 340B rebate being issued, which will create the addressed cash flow concerns. The 340B rebate will be processed within 10 days of the claims being reported to Beacon and other drug companies, but Kent Hospital will likely not be able to report claims on a daily basis. Weekly reporting is more realistic, and this means that rebates could be withheld for up to 17 days depending on the timing of claims reporting. (emphasis added)). The Honorable Thomas J. Engels April 20, 2026 Page 20 of 53 problems, at least some loss of interest on deferred payments23, late fees,24 the need for high-interest lines of credit25, additional state taxes26, and additional administrative 23 See. e.g., AAMC, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (The delayed savings will also result in the loss of interest on deferred savings, which one academic health system estimated at a 4 percent loss on their affected 340B drugs.... One AAMC member institution estimates that these confounding factorsloss of interest, loss of subceiling discounts, rebate denials, and wastage losswould amount to over $6 million in annual permanent losses, not including any administrative implementation costs.); Americas Essential Hospitals, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (For hospitals with adequate cash on hand, we estimate the costs of floating funds to pharmaceutical manufacturers would be equal to average interest rates on funds, which the IQVIA study estimates to be 4-5%. In our optimistic scenario, we assumed a 4% interest rate, which would still result in $54.2 million in costs for hospitals for a 340B drug pilot. These costs would grow proportionally if the rebate were extended to all drugs, likely exceeding $155 million a year.). 24 340B hospitals inform us that late fees can be steep. If WAC invoices are due before rebates are received and a covered entity does not have enough cash on hand to cover the invoice, hospitals would typically owe simple interest at 15-20% per annum, calculated per each day late, as a late payment penalty. HRSA must account for the likelihood of these extra penalty costs, particularly for small and rural hospitals that lack sufficient cash on hand, in its cost calculations. 25 See, e.g., Citrus Health Network, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 31, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 0123 (Under the proposed 340B Rebate Model Pilot, health centers would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHN's ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow.... This number does not include interest on a line of credit that would be needed to cover this cash flow challenge, which could average about 7% which we would not get back. CHN does not have these cash reserves on hand and line of credits are challenging to obtain and can have high interests.); Americas Essential Hospitals, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Unfortunately many essential hospitals cannot afford the added costs of fronting funds to drug manufacturers and may need to take out loans to cover the costs of these payments. Using estimates for the cost of these loans from the IQVIA study, we estimate that the interest rate on these loans could be 12%.); Self Regional Healthcare, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1495 (Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. For example, having Self Regional Healthcare pay for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Self Regional Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable.). The Honorable Thomas J. Engels April 20, 2026 Page 21 of 53 burdens for hospitalsparticularly for smaller and rural hospitals that have limited cash on hand to absorb the needed float costs. HRSA therefore cannot rely on the drug companies false narrative about payment timing when evaluating float costs. Second, even if a Rebate Program requires a 10-day rebate period, our members inform us (and HRSA) that this is unrealistic. For example, Electra Memorial Hospitals comment letter states: With the lessons learned over the first two months of the Medicare rebate program it is obvious that there is no way the drug companies could provide reimbursement within 10 days. Often times it takes between 30 and 45 days for any payment to be received. Certainly, they could not provide the rebate in time for us to pay our wholesaler. Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0100. If this is any indication of how quickly 340B hospitals will be rebated in a Rebate Program, it will not only extend the float costs, but it will increase the number of costly disputes for delays and denials. Third, HRSA previously disputed the notion that the original 10 Rebate Program drugs may sit on the shelf for a long time before being dispensed. Again, this position ignores on-the-ground realities. In fact, even HRSAs prior statements on this topic contained conspicuous qualifiers. At one point, HRSA stated that most or the majority of drugs included in the Rebate Program would not sit on the shelves for a period of time. Britton Decl. 28. By using that language, HRSA necessarily admits that some drugs could sit on the shelves for longer periods of time, but HRSA still has never calculated how much that wait time for those drugs will impact 340B hospitals. Our members tell us that floating the full cost while drugs sit on the shelf will have a meaningful adverse impact on their cash flow. Fourth, HRSAs position relied on the assumption that many of the 10 drugs (which could actually now be up to 25 drugs) are dispensed as a full package size. But as our members explained to us, drugs are often ordered in advance based on anticipated need and variable patient volumes, which can result in inventory sitting on the shelf before use. This is especially true for rural hospitals where utilization can be low and variable. In addition, not all use aligns with full-package dispensingeven more so for the 2027 IRA drugsso HRSAs reliance on full-package sale is not an answer. As one representative member explained: [W]e fundamentally disagree with the governments . 26 Lakewood Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1382 (Minnesota has a MN Care Tax Rate of 1.8%. With a 340B Drug Rebate Model for IRA drugs needing a MFP rebate, we will never be reimbursed for the higher upfront cost of the tax.). The Honorable Thomas J. Engels April 20, 2026 Page 22 of 53 assumption that drugs in the rebate pilot are dispensed as full packages with high velocity....[T]he requirement to maintain clinical safety stock for emergent cases necessitates that certain medications remain on our shelves longer than the pilot suggests. Ultimately, HRSA (again) should rely on the real-world experience of those who work in hospitals and are actually prescribing, purchasing and dispensing the drugs that may be included in the Rebate Program. Through this letter and others, 340B hospitals are conveying that HRSAs full-package assumption is wrong. There will be variable dispensing periods, requiring some drugs to wait on the shelves longer than HRSA has assumed. As a result, there will be significant, harmful float costs as 340B hospitals await a rebate they otherwise would have received immediately under an upfront discount mechanism. Fifth, HRSA previously asserted that it provided a number of guardrails to mitigate the risk of improperly delayed or denied rebates. Britton Decl. 31. Those prior guardrails were insufficient, and so 340B hospitals still expect costly delays and denials that increase float costs for several reasons: As explained in greater detail below, the absence of a meaningful dispute resolution guardrail not only raises the likelihood of delays and denials (leading to longer or full floats), but carries its own set of additional administrative costs. It is meaningless to require that drug companies have processes in place for the good faith resolution of disputes, Britton Decl. 31, if those processes do not yield actual resultsi.e., fewer or no disputes. Each dispute means 340B hospitals will not be given a 340B discount they are owed by statute. Each dispute will require additional labor hours, and therefore impose additional costs, to resolve. HRSA cannot simply rely on the good faith of drug companiesor the existence of a mere drug company processto ensure that discounts are provided and Congress intent for the 340B Program is fulfilled.27 27 E.g., Keck Medicine of the University of Southern California (HRSA-2026-03042) (Apr. 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1609 (We are currently working on a good faith inquiry (GFI) for a non-340B dispensation of an MFP drug that was dispensed 1/2/2026 for which we are still owed a rebate on, foreshadowing the long and costly process likely with pharmaceutical companies under a rebate model.); Kootenai Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-1509 ([O]ur prior experience with a similar program, the MFP rebate program, shows that we are typically required to advance payment for approximately two to three months before realizing any rebate recovery. This represents an upfront cash outlay of roughly $5.2 million. Even then, due to ongoing administrative issues, we have only been able to successfully collect rebates on approximately 25% of eligible drugs to date. (emphasis added)); Vermont Health Network Inc., dba University of Vermont Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- The Honorable Thomas J. Engels April 20, 2026 Page 23 of 53 Even if 340B hospitals could rely on the good faith of the drug companies, as many as 13 drug companies will take part in the Rebate Program. This means that there are as many as 13 different good faith processes for 340B hospitals to follow. Each one may involve its own unique features and negotiators. That fragmentation itself imposes additional process costs on covered entities. HRSA previously did not provide any real means of enforcing the 10-day rebate deadline other than potentially removing drug companies from the Program. Even then, HRSAs FAQs said it would only pursue this option if HRSA observes trends toward a manufacturer not paying rebates within 10 days of data submissions or the drug company is consistently unable to timely resolve rebate reimbursement issues. These undefined terms (trends toward, consistently) and unrealistic nuclear penalties (will HRSA really kick a drug company out of the rebate program?) leave far too much opportunity for inappropriate and expensive delays and denials.28 HRSA previously insisted that it severely limit[ed] the bases for the denial of claims under the prior Program. Britton Decl. 31. But that is not supported by the record. As the screenshot below illustrates, in a brief webinar held for 2026-03042) (Apr. 17), https://www.regulations.gov/comment/HRSA-2026-0001-1720 (From our UVM Health pharmacies experience of the first year of the MDPNP, companies like Amgen, Boehringer Ingelheim, and Johnson & Johnson have denied refund claims, asserting, without evidence, that drugs were dispensed from 340B inventory. In just two months, this has left over $400,000 in unpaid refunds for UVM Medical Center alone. As a result, we paid WAC without receiving either the MDPNP refund or 340B pricing, contrary to legal requirements. To contest denials, manufacturers agent, Second Sight Solutions, requires uploads to its 340B ESP platform for unrelated purchases, a burdensome process that has yielded no meaningful resolution. Although HRSA OPA and CMS are aware,1 we are not aware that any action has been taken.). 28 See generally Franklin Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 27, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-0025 ([W]e need to be honest about enforcement here. Drug manufacturers have been violating the letter and spirit of the 340B program for years now with absolutely zero consequences outside of a few strongly-worded letters. Rural hospitals have no confidence whatsoever in the fortitude of the federal government to compel Big Pharma to pay the rebates in an accurate and timely manner. The ultimate outcome of a rebate model is going to be rural hospitals begging for their money and drug companies not paying it because they know they can get away with it.); Sanford Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1635 (In the three months since MFP rebates were implemented, we have experienced hundreds of incorrectly denied rebates with no path for recoupment. It is not a baseless concern to assume that a shift to a 340B rebate model will result in covered entities paying full WAC price upfront, only to face denied rebates on valid 340B claims. Manufacturers already receive all the information necessary to accurately pay MFP rebates, yet they are not doing so.). The Honorable Thomas J. Engels April 20, 2026 Page 24 of 53 covered entities on December 4, 2025, HRSA admitted that drug companies could deny rebate claims for some undefined category of other reasons. Troublingly, HRSA did not define what constitutes other grounds for denial, creating opportunities for drug company abuseor, at the very least, more disputes over whether claims were appropriately denied for these other reasons. Though HRSAs presentation indicated that drug companies are to provide documented explanation for such other denials, HRSA did not specify what information or detail this explanation must contain, let alone what 340B hospitals can do to appeal to HRSA when they dispute a denial (for any reason, including other). The current RFI magnifies this concern. It expressly seeks comments about Rebate Denials. 90 Fed. Reg. 7,290. In particular, it asks what the acceptable grounds should be for a manufacturer denial of a covered entity rebate request, and it raises the possibility of denials where a 340B rebate was provided to another covered entity on the same claim. Id. Needless to say, the more grounds that HRSA accepts as acceptable for denials, the greater the likelihood of delays and disputes and increased float costs. And to the extent HRSA is suggesting that a drug company can deny a rebate based on its subjective program integrity concerns, that would invite the possibility of more and more erroneousdelays and denials. It also would be unlawful. See infra at Section IV. Congress vested authority to oversee compliance with the 340B The Honorable Thomas J. Engels April 20, 2026 Page 25 of 53 Program in HHS and assigned no auxiliary enforcement role to program participants. Astra USA, Inc. v. Santa Clara Cty., 563 U.S. 110, 117 (2011). Delays and denials may not only come from drug companies. As explained above, our members inform us that Second Sights 340B ESP platform often experiences problems, including false denials and delays. Even if the drug companies had the best of intentions, their chosen IT vendor may cause 340B hospitals to receive their discounts after 10 days. Finally, closely related to the float, hospitals expect to lose the cost-of-goods-sold (COGS) discounts that they negotiate with wholesalers by having to purchase drugs through their WAC accounts instead of their 340B account due to the Rebate Program. These discounts typically vary by product but generally range between 3-10% of the cost of the drug.29 That translates into millions of dollars of added costs of a rebate mechanismall borne by the covered entities that the 340B program is intended to benefit. HRSAs costs estimates never accounted for the loss of these COGS discounts. Importantly, these discounts often are baked into a hospitals current and future pharmacy budgets. Therefore, losing the COGS discounts will only further disrupt their operations and make it harder for hospitals to afford to acquire these drugs for their patients. HRSA must account for these COGS losses in its cost-benefit analysis as well. Ultimately, HRSA was incorrect regarding its prior assumptions about float costs. It cannot deny that some hospitals will be rebated after their payment is due to wholesalers; some number of drugs will sit on hospital shelves longer than HRSA has accounted for; some number of improper delays and denials will occur; some COGS discounts will be lost, and therefore there will be some meaningful amount of float 29 See, e.g, Fresno Community Hospital and Medical Center dba Community Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1479 (In addition to siphoning resources from patient care to administrative overhead, a rebate program would subject CHS to additional financial pressures by.... eliminating the cost-of-goods discount CHS currently receives from its drug wholesaler when purchasing drugs on its 340B account, which would increase our acquisition costs for drugs included in the rebate pilot by 9.5%.); University of Texas Medical Branch (UTMB), Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1532 (By requiring covered entities to purchase drugs at WAC instead of receiving upfront discounts, rebate models will significantly reduce the cost of goods sold (COGS) discount received from wholesalers. UTMB would lose these discounts, approximately $9 million a year, again increasing costs and undermining our ability to stretch scarce resources therefore jeopardizing patient care.); Nationwide Childrens Hospital (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1612 (Transitioning away from upfront 340B discounts eliminates cost of goods sold discounts that covered entities receive from wholesalers. This elimination of wholesaler discounts along with the increased administrative costs is a financial burden on our covered entity. The estimated loss due to the elimination of cost of goods sold discounts would be a permanent loss not recuperated from the manufacturer 340B rebate program.). . The Honorable Thomas J. Engels April 20, 2026 Page 26 of 53 costs. Astonishingly, the ICR does not address these float costs at all; it limits its analysis to the incorrect 5 hours of weekly labor costs. Having made no serious effort to study the real costs associated with the interest-free float, HRSA continues to ignore this important part of the problem. But when it finally accounts for the float costs, HRSA will be unable to deny that they will harm hospitals. 340B hospitalsespecially those in rural areashave limited cash on hand. Consider the following comment from one such hospital, which encapsulates this problem well: Perhaps the most consequential concern we must raise is one that may not be immediately apparent to policymakers who are unfamiliar with the capital structure of rural hospitals: the relationship between a rebate- based 340B model and our existing bond covenant obligations. Lexington Regional Health carries outstanding municipal bond obligations subject to financial covenants that require us to maintain minimum debt service coverage ratios and liquidity thresholds on a continuous basis. These covenants are not flexible. Breach triggers default provisions that could accelerate repayment obligations and materially compromise our ability to operate. Under a rebate model, Lexington Regional Health would be required to purchase covered outpatient drugs at wholesale acquisition cost and then wait for manufacturer rebates to arrive weeks or months later. During that float period, our pharmacy is effectively advancing capital we do not have. .... Given our current drug acquisition volumes, the outstanding float at any given time under a rebate model would likely range between $150,000 and $300,000. Carrying that obligation on our balance sheet on a revolving basis would reduce our available liquidity to a point where we risk falling below the coverage ratios specified in our bond indenture. A covenant violation of this nature would not simply create an accounting problem. It would trigger lender notifications, potentially draw scrutiny from rating agencies, and force us into a series of remediation conversations with bondholders that divert leadership attention and resources away from patient care. We want to be direct with HRSA: a rebate model does not merely inconvenience Lexington Regional Health. It places us at genuine risk of a technical default on debt instruments that were issued to finance the very infrastructure we use to serve our community. This is not a risk we can manage internally, and it is not one that should be imposed on covered entities without full recognition of its downstream consequences. Lexington Regional Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), The Honorable Thomas J. Engels April 20, 2026 Page 27 of 53 https://www.regulations.gov/comment/HRSA-2026-0001-1573. Or consider this comment: Any disruption in our cash flow puts at grave risk for missing payroll as we are operating with less than 4 days cash on hand and backed by a debtor in possession loan. Jackson Hospital and Clinic, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1585. Or consider the key fact that emerged in the litigation: the median number of days of cash on hand for Maines hospitals was less than 10.6. Austin Dec. 9.30 30 See also Morris County Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1435 explaining that the cash flow problems associated with a rebate model could put us in violation of one of our bond covenants, which requires 1.25 and that [t]his cash flow squeeze would also greatly diminish our ability to pay for untimely repairs and replacement of needed capital or minor equipment); Mitchell County Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (April 3, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0301 (Mitchell County Hospital District operates with less than 30 days cash on hand. 340B savings represent 6.5 days of cash and support nearly 10% of charity care. Delayed reimbursement creates immediate liquidity risk.); North Oaks Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 1384 (Our hospital relies on bond financing to raise money for new projects that enhance patient care. Our bonds include covenants requiring us to maintain a certain amount of cash-on-hand. The rebate models would cause cash-on-hand to drop low enough to risk violating our bond covenants. We also have a prompt pay discount with our primary wholesaler of net 7 days. If we are unable to meet this due to an increased payment amount, then we will not have the advantage of the discount. We will also incur fees if outside of that window and this may be cost prohibitive.); UC Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1637 (In our hospital system, we estimate the policy would tie up approximately $2.5 million in working capital at any given time, equivalent to 25 patient care positions. This ongoing restriction represents approximately 4% of our annual capital budget, directly constraining our ability to invest in strategic priorities, including expanding access to care for our patients.); Memorial Hospital of Sweetwater County, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1477 (By requiring us to pay full price for drugs, under the rebate model, and to float large sums of cash while awaiting a rebate, we may cut into our days of cash on hand. These are funds we have reserved for bond covenants, emergencies, and other patient care needs that will instead need to be diverted to manage this unnecessary rebate model.); El Paso County Hospital District d/b/a University Medical Center of El Paso, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1514 (UMC El Paso estimates that this policy would reduce our cash on hand by $4 million per month. The proposed rule would result in an estimated reduction of approximately 2 days cash on hand. This deterioration in liquidity and operating revenue would meaningfully constrain our systems ability to fund planned capital infrastructure investments and maintain operational flexibility. A reduction of this magnitude introduces financial uncertainty that could delay medical equipment procurement and workforce investments necessary to sustain patient care delivery.); Hannibal Regional Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026- 0001-1554 (We estimate having to front several hundred thousand dollars per month in interest-free loans to drug manufacturers. We do not have the excess liquidity to sustain this gap.); Labette County The Honorable Thomas J. Engels April 20, 2026 Page 28 of 53 Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0066 (Cash flow stability is critically important for rural hospitals. Under the current model, we pay our drug wholesaler within approximately 15 days. A rebate model would require our hospital to float approximately $205,000 in drug purchasing costs every 10 days while waiting for rebate payments from manufacturers. This delay would place significant strain on our financial resources and could disrupt our ability to maintain consistent drug purchasing schedules.); Windrose Health Network, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0083 (explaining that requiring health centers to purchase medications at full price and wait for a rebate would represent an astronomical cost increase to WHN that would disrupt our cashflows to the point where we may have to consider dropping out of the 340B Program); Los Angeles County Department of Public Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1504 (A rebate model would require the county to pay full price for medications and wait for reimbursement, creating significant cash-flow strain, and reducing the ability to respond to communicable disease outbreaks.); Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0100 (We currently operate with only 40 days cash on hand. Paying full price for drugs and waiting for the rebate would lower that to only 20 days, risking our ability to make payroll and meet other obligatory timelines. HUD loan covenants require us to maintain financial liquidity ratios that would be impossible to maintain with lower cash on hand and higher receivables.); Glacial Ridge Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1503 (The most significant concern is the shift in cash flow responsibility.... For a rural Critical Access Hospital, this is not manageable.... Glacial Ridge does not have the financial flexibility to front these costs without impact.); U of L Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (April 1, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0124 (We operate with approximately 35 days cash on hand, insufficient to absorb the float required for high-cost therapies. Many of the services supported by 340Boncology, transplant, specialty pharmacyrequire significant upfront drug acquisition costs.... Even short-term disruptions in cash flow would force difficult tradeoffs-reducing services, delaying expansion, or limiting access for vulnerable populations.); Columbia Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) (Apr. 8, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1413 (While CMH maintains strong financial stewardship, as a Critical Access Hospital, we do not maintain excess cash reserves to absorb sustained delays in reimbursement without impact. The cumulative effect of carrying these costs, particularly across multiple high-cost drugs, could strain liquidity and, depending on scale and duration, may impact compliance with financial covenants or other internal liquidity targets.); Edwards County Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 1417 (We do not have cash on hand to fund the rebate model. We barely have cash on hand to pay our bills!); Columbus Regional Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1422 (Using our utilization projections and differences between the undiscounted (WAC) prices and the 340B prices, the hospital would have approximately $23,000,000 in funds held by manufacturers in 2026 under the rebate model. That is an insurmountable impact to cashflow. County hospitals operate on thin margins and do not have the reserves to carry this financial burden waiting for manufacturers to pay rebates (which they would control the ability to deny).); Wabash General Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), The Honorable Thomas J. Engels April 20, 2026 Page 29 of 53 Hospitals with such limited reserves cannot afford to front the full WAC price of 340B drugs. Nor can they plan for future projects or services: without some assurance those funds will be available when obligations come due, they cannot afford to earmark that scarce cash today. Simply put, HRSAs cost-benefit analysis must account for the financial and non-economic impacts that will result from forcing 340B hospitals to float zero-interest loans to drug companies. Non-economic Costs. HRSA previously dismissed concerns about the non-economic costs of its Rebate Program, stating: OPA does not believe that the rebate model will have a significantly negative impact on patient care as the rebate model is designed only to change the form of the 340B discount, not restrict the savings received by 340B covered entities for the drugs included in the Pilot. OPA does not think a ten-day lag in receiving a rebate payment will harm patients or communities that indirectly benefit from the 340B Program. Britton Decl. 41. HRSA must rethink this position. The agency has acknowledged that a Rebate Program will impose some costs, including at least $200 or $500 million in annual administrative costs, according to the agencys own (under-) estimate. Even if every rebate is paid on time and in full, that is, at a minimum, $200 or $500 million each year that cannot be spent on patient care. As a matter of basic logic, HRSA has to understand that these new administrative and related costs will have non-economic impacts by diverting resources away from caring for more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384, pt. 2, at 12 (1992). But if that commonsense conclusion were not enough, there is ample record evidence showing the deleterious impact on patients and communities. Many commenters have https://www.regulations.gov/comment/HRSA-2026-0001-1438 (We estimate that with the 10 pilot drugs there would be a monthly exposure of $8,400- $15,000 while floating cost purchases. This would severely impact our days-cash-on-hand and could put us at risk with loan covenants.); University of California Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) (Apr. 20, 2026) (Beyond the administrative and operational costs previously outlined, the most significant additional cost UC Health would incur under a rebate model is the increased drug acquisition cost resulting from drugs purchased at Wholesale Acquisition Cost (WAC) rather than the upfront 340B discounted price. Under a rebate model equivalent to the 2025 pilot program, we would be required to purchase these drugs at WAC and subsequently seek reimbursement of the discount through a manufacturer rebate process. Across all our campuses, we estimate this would result in approximately $120 million in additional annual drug acquisition costs for 2025 pilot drugs alone, approximately $10 million per month. This represents a substantial and recurring financial burden that would directly strain our organization's operating capital and budget, diverting resources that currently fund critical care programs and services for our vulnerable patient populations.). The Honorable Thomas J. Engels April 20, 2026 Page 30 of 53 responded to this RFI explaining those harms.31 Or just take a look at the declarations and other evidence submitted during the litigation. Having reviewed those, the district court identified the non-economic impact of the prior Rebate Program. E.g., Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600, 2025 WL 3754193, at *8 (D. Me. Dec. 29, 2026) (observing that the downstream effect of the Rebate Program will cause hospitals to cut back services and suspend partnerships with drug distributors). Again, however, the ICR says nothing about these non-economic costs. See Council of Parent Attys & Advocs., Inc. v. DeVos, 365 F. Supp. 3d 28, 5354 (D.D.C. 2019) (The Delay Regulation is also arbitrary and capricious because the government failed to consider all the relevant factors when considering the cost of the regulation. . . . Here, the government failed to adequately account for two relevant factorsthe States reliance cost and the cost of delay on children, parents, and society.). HRSAs continued failure to acknowledge and account for these downstream non-economic costs to patients runs counter to the evidence before the agency and is otherwise unlawful. State Farm, 463 U.S. at 43. The Rebate Program also will directly undermine access to care for patients particularly patients of smaller or mid-size 340B hospitals. These hospitals generally lack sufficient cash-on-hand or borrowing power to pay list price to acquire the 10-25 IRA drugs that may be included in a Rebate Program, some of which cost thousands of dollars. As a result, those hospitals will be forced to either forgo keeping on hand any inventory of these drugs or keep only minimal inventory sufficient to furnish these drugs to select patients in dire need. Several small and mid-size safety net hospitals have confirmed to the AHA that they may be forced to transfer or turn away patients that require one or more of the Rebate Program drugs for their care. Comment letters support that as well.32 The inability to stock vital medications will harm patient health 31 See Appendix B (listing selected comments referencing real-world harms to patients and communities). 32 E.g., Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 0100 (A 340B Rebate Program will force us to remove high cost drugs from our stock because we cannot afford to float the difference between the full price and the 340B price. This will cause our patients to have even greater difficulty accessing the medication they need, and likely result in hospitalizations.); Firelands Regional Medical Center and The Bellevue Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1480 (This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Firelands Regional Medical Center and The Bellevue Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients.); Self Regional Healthcare, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1495 (Self Regional Healthcare would possibly The Honorable Thomas J. Engels April 20, 2026 Page 31 of 53 and well-being. Thankfully, HRSA implicitly acknowledged this by asking questions in the RFI about patient access to medicine. See RFI, 90 Fed. Reg. 7287, 7289. Our answer is straightforward: there will, in fact, be a direct adverse impact to patient access to care because some hospitals cannot stock certain drugs if forced to pay the full WAC price. not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price.); North Oaks Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 1384 ([N]orth Oaks may be unable to keep certain high-priced oncology, immunology, or specialty drugs in inventory, limiting patient access to life-sustaining therapies and creating longer wait times or care delays.); Abbeville Area Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-1652 (Abbeville Area Medical Center would possibly not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price.); University of California Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026) (Additionally, the increased cost of purchasing drugs at list price would necessitate reductions in on-hand drug inventory across our campuses, which could result in dispensing delays and directly impact the continuity and initiation of therapy for patients managing serious or chronic conditions. For example, Stelara (ustekinumab) 90mg prefilled syringe is used to treat serious chronic conditions such as Crohn's disease, ulcerative colitis, and psoriasis. This medication carries a WAC price of over $28,000 per package (over 5 times more than the 340B cost). Under a rebate model, UC Health would be required to purchase this drug at WAC rather than at the 340B discounted price, which would make it financially untenable to maintain adequate inventory levels. Stelara is just one example among the pilot drugs where the financial burden of WAC purchasing would directly translate into reduced inventory and potential delays in patient access to critical therapies.); El Paso County Hospital District d/b/a University Medical Center of El Paso, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1514 (Ensuring an adequate supply of drugs is important for responding to emergencies and meeting the needs of patients with complex care needs. However, under a rebate model, hospitals would lose access to 340B pricing for stockpiled drugs that are not able to be used because of the everyday realities of patient care. Assuming a 2% rate of purchased drugs that cannot be used, we estimate added costs of $400,000 for our system. The costs of this policy will fall on patients with rare diseases and complex care needs who already have challenges accessing the care they need. High-cost drugs for specialty services like rheumatology, infectious disease, dermatology, and neurology could be negatively impacted. Oncology medications purchased at 340B pricing, affords us the ability to stretch our budget without raising out-of-pocket costs to qualified patients- therefore enabling us to treat more patients. Loss of 340B savings limits the number of patients to be treated and will increase medication costs, putting some treatment options out of reach for many patients.); University of Texas Medical Branch (UTMB), Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1532 (As a member of the University of Texas System (UTS), UTMB must be able to demonstrate it possess the financial capacity to satisfy its direct financial obligations and UTS cash flow (i.e., minimum cash on hand) requirements by maintaining a satisfactory financial score that is based in part of its debt capacity (i.e., spendable cash and investments relative to operating expenses and debt). This is also required before receiving approval to maintain, improve, or expand capital-intensive infrastructure which puts investments that support patient care at risk for postponement....); The Honorable Thomas J. Engels April 20, 2026 Page 32 of 53 Patient access to drugs will be harmed in a second important way. In November and December 2025, several national pharmacy chains announced that they would not provide 340B pricing for the 10 IRA drugs included in the original Rebate Program.33 The AHA has reason to believe that these and other pharmacies (including independent, mom-and-pop pharmacies, as well as other large chains) will again deny 340B pricing if a new Rebate Program is implemented. But as HRSA has repeatedly recognized, contract pharmacy relationships enhance patient access to vital medications and promote the continuum of care to ensure that patients receive their prescribed medication. If pharmacies like Walmart, Walgreens, CVS, and others are not processing 340B claims for IRA drugs, patients may be forced to travel long distances to obtain their medications at in-house pharmacies or elsewhere. This is particularly problematic in rural areas where patients may live far from their hospitals and depend on contract pharmacy relationships for easier access to their medications. In sum, a Rebate Program will harm patients in multiple, concrete ways. It will jeopardize essential service linesincluding oncology, labor and delivery, behavioral health, opioid treatment, and more. It will undermine patient assistance programs that subsidize 340B drugs for vulnerable patients. And in some cases, it will directly restrict access to needed medications. These are not speculative or peripheral effects; they are predictable consequences of a rebate mechanism that bears directly on patient health. As HRSA evaluates the many different cost streams associated with any future Rebate Program, it must account for these non-economic impacts on patients as part of its overall cost-benefit analysis. For all of these reasons, the AHA respectfully submits that the total costs of the Rebate Program are far greater than what HRSA has previously accounted for. Once it appropriately accounts for them, it will be indisputable that those billions of dollars in administrative, float, and non-economic costs far outweigh the benefits of moving forward with any new Rebate Program, even in so-called pilot form. 33 See, e.g., William Newton, Walgreens to Carve Out 340B Rebate Pilot, IRA Drugs from Contract Pharmacies, 340B Report (Nov. 21, 2025), https://340breport.com/walgreens-to-carve-out-340b-rebate- pilot-ira-drugs-from-contract-pharmacies/; Declaration of Chad Golder 4, Am. Hospital Assn v. Kennedy, 1:25-cv-600 (D. Me. Dec. 18, 2025) (Walmart provided that it will block all MFP drugs dispensed to patients under Medicare Part D from inclusion under covered entities 340B Pharmacy Services Agreement with Walmart, effective January 1, 2026. Walmart identified the new reimbursement mechanism and operational constraints as motivating its exclusion and did not indicate that its exclusion was temporary.). The Honorable Thomas J. Engels April 20, 2026 Page 33 of 53 II. HRSA Has Not Calculated, Quantified, Articulated, Or Accounted For Any Perceived Benefits of The Rebate Program To date, HRSAs analysis of any purported benefits of its Rebate Program has been riddled with errors. For the most part, these have been errors of omission. HRSA has never identified any actual or expected benefits of switching from an upfront discount mechanism to a rebate mechanism. Or as one hospital commenter rightly put it: At a fundamental level, HRSA has not provided a clear rationale for why a rebate model is necessary. Sanford Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1635. At best, HRSA has said it wants to test a rebate mechanism. But HRSA must identify some benefit in testing the rebate model beyond simply conducting a test. Otherwise, agencies could justify every new policy program by saying they wish to learn more about its merits and shortcomings. It is first important to address an argument that HRSA made during the litigation that HHS is not required to quantify ... benefits to conclude that they outweigh the compliance burdens. Stay Reply Br. at 8. Neither law nor logic supports that position. When considering a new policy like the Rebate Program, an agency must compare costs and benefits. See Michigan, 576 U.S. at 75253. The purpose of a cost-benefit analysis is to guide the agencys exercise of authority and discretion. If an agency does not calculate the benefits in roughly the same way it compares costs, the exercise is largely meaningless. Without even trying to quantify costs and benefits, the agencys analysis will be little more than a pretense, permitting HRSA to justify any outcome by overstating some abstract benefits. (In fact, HRSA may try to do that here by saying there is some abstract, hypothetical benefit in conducting a test, when in fact the costs of any rebate program make such an expensive, burdensome test unjustifiable.) Thus, as HRSA considers whether to move forward with a new, expanded Rebate Program, it must attempt to quantify the benefits of the Program and clearly explain those benefits to stakeholders and the public.34 A key reason why HRSA failed to calculate the benefits of the Rebate Program is that it has never been clear about what it believes those benefits will be. It previously stated that testing the rebate methodology to effectuate the 340B ceiling price was OPAs 34 See Jeffrey B. Clark, Acting Admr, Off. of Info. & Regul. Affs., Interim Guidance Implementing Section 3 of Executive Order 14215, Ensuring Accountability for All Agencies (Apr. 17, 2025), https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-24-Interim-Guidance-Implementing- Section-3-of-Executive-Order-14215-Titled-Ensuring-Accountability-for-All-Agencies.pdf (In deciding whether and how to regulate, to the extent permitted by law and where applicable, agencies should assess both the costs and benefits of an intended regulatory action, as well as available regulatory alternatives, including the alternative of not regulating.... Further agencies analysis submitted to OIRA should include both quantifiable measures and qualitative measures of costs and benefits that are difficult to measure. (citing Michigan v. EPA, 576 U.S. 743 (2015))). The Honorable Thomas J. Engels April 20, 2026 Page 34 of 53 chief aim in implementing the Rebate Program. Britton Decl. 21; see id. 4 (OPA recently became interested in testing the merits and shortcomings of a rebate model.). But this kind of statement does not answer an important question: what is HRSA testing for? Without that answer, it is impossible to know whether its test will be beneficial. The current RFI perpetuates this problem. At most, the RFI explains the purpose and expected benefits of a rebate model with a handful of vague, conclusory statements: HRSA is now requesting comments from stakeholders to further evaluate the potential benefits and costs of a rebate model, among other topics. ... appropriately balance stakeholder concerns regarding implementation of a rebate model against the agencys goal of testing rebates in the 340B Program; With the information collected from this RFI, HRSA will evaluate if a potential 340B Rebate Model Pilot Program is in the publics interest. These statements, like HRSAs earlier ones, are no different from saying that HRSA wants to test a rebate model so that it can test a rebate model. Such circular reasoning makes it impossible to answer critical questions like: (1) would alternative test designs provide better information about whatever it is that HRSA is testing for; (2) are there cheaper or less burdensome ways to perform this test or gather the information it is looking for from the test; (3) what would convince HRSA that the merits outweigh the shortcomings (of whatever it is testing for); and (4) will the best case scenario for whatever HRSA is testing for ever justify the astronomical costs that are being imposed by this test, and what is the likelihood that this best case scenario will come to pass?35 These questions persist, moreover, because HRSA has never explained what is wrong with the upfront-discount mechanism (other than the drug industrys self-interested desire to impose a rebate mechanism) that might require a change of 30 years of precedent. 35 For instance, if covered entities are facing billions of dollars in cost for the 2026 and 2027 IRA drugs, the agency should consider what the cost might be if the rebate mechanism would be expanded following the test. E.g., Temple University Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-1553 (We estimate that the fiscal impact of the 340B rebate model pilot program will be about $5.7 million for TUH in 2026. This figure includes direct start-up costs, operational expenses, thirdparty processing fees, legal advice, training, and consulting expenditures, as well as the anticipated negative effect on cash flow and the expectation of manufacturer denials. If the rebate program is expanded in subsequent years to cover an additional 15 drugs each year within the drug negotiation program, projected costs would increase to about $13 million in 2027 and $20 million in 2028. Notably, these costs are not associated with improvements in patient care or program integrity, but rather with administrative restructuring required by the rebate model.). If we already know that the best-case scenario of whatever HRSA is looking for would impose many more billions of dollars in costs, is it really worth conducting the test in the first place? Put another way, if it would be irrational to adopt a rebate mechanism after conducting a test, why conduct that test at all? The Honorable Thomas J. Engels April 20, 2026 Page 35 of 53 HRSA must justify its performance of a test, just like it must justify any other agency action. A desire to test for testings sake is not sufficient. Without explaining why HRSA is conducting such a test beyond using the nebulous language above (e.g., evaluate the potential benefits and costs of a rebate model, publics interest) there is no way to balance the potential benefits of conducting a test against the manifest costs and burdens that conducting this test will impose on covered entities and their patients.36 Thus, before initiating a new Rebate Program, HRSA must offer a reasoned explanation for why it is conducting this test. We are confident that once HRSAs goals or anticipated benefits are clearly articulated, it will be clear that the Rebate Program involves too much guaranteed wasteful expenditure for too little potential gain. Finally, as HRSA weighs the costs of the Rebate Program against any benefits, it also must consider the question of timing. This, too, is an important aspect of the problem. If HRSA wants to test a rebate mechanism, it must evaluate and address whether now is the time to conduct such a test? It is not. If HRSA moves forward with a new Rebate Program, it will be doing so at a perilous moment for safety-net hospitals. 2026 has not gotten off to a strong start. According to Stratas Monthly Healthcare Industry Financial Benchmarks report, [p]atient demand and revenue growth slowed while expenses intensified, leading to an operating margins dip. Laura Dydra, Hospital margins take a dive, Beckers Hospital Review (Mar. 12, 2026), https://www.beckershospitalreview.com/finance/hospital- margins-take-a-dive. In particular, [t]otal expenses increased 5.4% year over year in January while gross operating revenue rose 3.9%, leaving a significant gap for many organizations. Id. Non-labor expenses drove expense growth, at 6.4%, with drug expenses up 6.8%. Id. As a result, [h]ospitals with less than 100 beds reported a 3.9 percentage point margin drop while hospitals with 500-plus beds reported a 2.5 percentage point decrease. Id. A second recent study corroborates these figures. According to Kaufman Hall, between January 2025 and January 2026, total expenses rose 5 percent, driven by increases in labor and supply costs, with drug expenses growing by 7 percent. See Kaufman Hall, National Hospital Flash Report: January 2026, https://www.kaufmanhall.com/sites/default/files/2026-03/KH-NHFR-Report_January- 2026-Metrics.pdf. The study also found that bad debt and charity care increased by 8% from January 2025 to January 2026, continuing trends that were present throughout 2025. Summarizing this analysis and looking ahead to the remainder of 2026, a Kaufman Hall representative explained: Increased expenses, especially in labor, and 36 HRSAs failure to identify a real purpose or benefit of the rebate mechanism makes it difficult to answer RFI questions about what data drug companies should submit to the agency. Unless we know what HRSA is trying to accomplish, we do not know what data it needs. At the very least, drug companies should regularly make public: 1) delay or denial rates; and 2) information about their financial relationships with any third-party vendors like Second Sight Solutions. The Honorable Thomas J. Engels April 20, 2026 Page 36 of 53 the persistent increase in bad debt and charity care are not likely to ease this year. Overall structural costs are poised to go up. Hospitals will need to be strategic about where to allocate resources and how to manage spending in what could be a challenging economic environment. Kaufman Hall, Hospitals begin 2026 challenged by expenses and bad debt (Mar. 19, 2026), https://www.kaufmanhall.com/news/hospitals- begin-2026-challenged-expenses-and-bad-debt. These early 2026 figures mirror the longer-term trends for hospitals. Labor, drug, and supply costs continue to increase.37 Hospitals face continuing cybersecurity threats and associated expenditures to prevent them.38 An aging population and the increasing prevalence of chronic disease continue to raise the level of complexity and intensity of hospital care.39 And inpatient volumes continue to increase, meaning hospitals must take care of sicker patients, while still maintaining a fully staffed, 24/7 care environment that remains ready for anything, including disasters and large-scale emergencies.40 The policy environment isnt any better. Hospitals will suffer new cuts under the 2026 OPPS final rule, which will pay for drug administration services furnished in grandfathered off-campus hospital outpatient departments at the site-neutral rate of 40% of the full OPPS rate. If past is prologue, moreover, 340B hospitals face potential cuts to their reimbursement rates in the 2027 OPPS rule following HHS recently concluded OPPS Outpatient Drug Acquisition Cost Survey. Changes in a variety of other federal policiesfrom tariffs to the expiration of the enhanced premium tax 37 See American Hospital Association, Costs of Caring Challenges Facing Americas Hospitals as They Care for Patients in 2026 (Mar. 11, 2026), (2026 Cost of Caring Report); see also Laura Dydra, Hospital labor expenses escalate as C-suites rethink long-term strategy, Beckers Hospital Review (Nov. 26, 2025), (Hospital labor costs may not be spiking the way they did during the height of the staffing crisis, but recent data shows the pressure isnt letting up.... [W]orkforce inflation has become a defining feature of the operating environment. The challenge for the C-suite isnt reacting to sudden shocks but leading through a prolonged period of steady, structural cost escalation.); Kaufman Hall, 2025 Health System Performance Outlook:Redefining performance in an era of financial pressure (Dec. 2025), https://www.kaufmanhall.com/sites/default/files/2025-12/KH-Report_2025%20Health-System- Performance-Outlook.pdf ([N]on-labor expenses (8%), supply expense (8%), drugs expense (11%) and purchased services expense (9%) per calendar day increased in 2025 through September compared to the same time frame in 2024. This data aligns with what survey respondents reportednearly 60% of whom reported non-labor cost increases of 6% to 10% over the past year.). 38 See 2026 Cost of Caring Report (For example, hospitals spent roughly $30 billion in 2025 on the technology and services needed to protect their systems, data, and operations from cyber threats. That infrastructure is essential to keeping doors open in the community, but it adds real ongoing cost.). 39 Id. 40 Id. The Honorable Thomas J. Engels April 20, 2026 Page 37 of 53 creditswill reduce hospital margins.41 And most important, a new Rebate Program would launch just as hospitals are beginning to feel the impact of the One Big Beautiful Bill Act (OBBBA) (Public Law 119-21). Although individual hospitals across the country are still assessing exactly how the OBBBA will affect their finances, [a]ll providers will be affected, and [f]or some, the magnitude of change could threaten their ability to sustainably serve their local population.42 According to one recent study by an independent firm, Premier, the law will trigger a $68 billion adverse revenue impact for hospitals in 2026 and 202743 exactly when HRSAs test will be conducted and the new costs of any Rebate Program will be imposed on hospitals. Likewise, McKinsey & Company recently reported: After recovering in 202425, EBITDA is expected to decline by about 2 percent in 2027 compared with 2025. This drop will largely reflect the impact of ACA and Medicaid disenrollment. The disenrollment is expected to increase the uninsured population and lead to higher levels of uncompensated care along with a potential reduction in Medicaid reimbursement due to provider tax changes (not yet reflected in current estimates).44 41 Neha Patel and Shubham Singhal, McKinsey: What to expect in US healthcare in 2026 and beyond (Jan. 12, 2026), https://www.mckinsey.com/industries/healthcare/our-insights/what-to-expect-in-us- healthcare (Between 2025 and 2027, hospitals will face headwinds from the impact of tariffs, subsidy expirations, and changes in federal policy, all of which are expected to reduce EBITDA margins by 40 to 100 basis points.). 42 Kaufman Hall, The more things change: Navigating the next healthcare crisis under the One Big Beautiful Bill (July 17, 2025), https://www.kaufmanhall.com/insights/article/more-things-changenavigating- next-healthcare-crisis-under-one-big-beautiful-bill; PWC, The One Big Beautiful Bill Act (OBBBA): A trillion-dollar turn in US health policy (July 10, 2025), https://www.pwc.com/us/en/industries/health- industries/library/impact-of-obbba-on-ushealth-system.html (Hospitals, especially rural providers, will face growing financial pressure. With more uninsured patients and fewer Medicaid dollars, providers may see increases in uncompensated care, with rural hospitals being particularly vulnerable despite a $50 billion funding provision.); id. (Healthcare providers, especially hospitals and health systems, may experience significant pressures as federal Medicaid funding shrinks, and the number of uninsured patients grows.). 43 Premier, Premier Data Shows OBBBA Will Trigger a $68 Billion Hospital Revenue Impact (Dec. 15, 2025), https://premierinc.com/newsroom/blog/premier-data-shows-obbba-will-trigger-a-68-billion-hospital- revenue-impact. 44 Neha Patel and Shubham Singhal, What to expect in US healthcare in 2026 and beyond (Jan. 12, 2026), https://www.mckinsey.com/industries/healthcare/our-insights/what-to-expect-in-us-healthcare. The Honorable Thomas J. Engels April 20, 2026 Page 38 of 53 Critically, the costs of the OBBBA and other recent policy changes will hit many of Americas 340B hospitals the hardest because they treat large Medicaid populations while operating operate on the thinnest of margins. Thus, as HRSA evaluates the financial impact of its program, it must do so in the context of the overall financial picture facing hospitals at this time. HRSA must provide a reasoned explanation for imposing the costs of the Rebate Program on top of the costs of the OBBBA and other developments. Even if HRSA anticipates some benefits from conducting a test at some point, now is not that time given the squeeze that 340B hospitals will face in 2026, 2027, and beyond. HRSA cannot ignore the important timing aspect of the problem. III. The RFI Incorrectly Frames 340B Hospitals Reliance Interests The RFI invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. 90 Fed. Reg. 7,289. Respectfully, that framing rests on a flawed premise and would not fulfill HRSAs obligations under the law to properly account for reliance interests. E.g., DHS v. Regents of the Univ. of Cal., 591 U.S. 1, 33 (2020); Perez v. Mortg. Bankers Assn, 575 U.S. 92, 106 (2015). The AHA does not dispute that, in general, HRSA has the statutory authority to authorize a rebate mechanism in an appropriate situation. But the mere existence of statutory authority does not imply that the agency will exercise it in a particular way or that a hospital must continually assume that an agency will change how it previously exercised authority. Nor does statutory authority alone render irrelevant 30 years of consistent agency practice and repeated agency statements favoring an upfront discount model. HRSA has authorized an upfront discount model for 340B hospitals from the beginning of the 340B Program. It has departed from that practice only once, authorizing a rebate mechanism for a single category of covered entitiesAIDS Drug Assistance Programsand only for reasons unique to that category. In fact, even when HRSA approved rebates as a permissible mechanism for ADAPs, it declined to authorize rebates for all other covered entities. HRSA specifically found that the [upfront] discount system is functioning successfully for most covered entities[.] 62 Fed. Reg. 45,824 (emphasis added). More recently, as drug companies began their relentless, coordinated effort to press HRSA to adopt a rebate mechanism, HRSA continued to publicly favor an upfront discount model. For example, in its March 17, 2025, motion for summary judgment in Eli Lilly & Co., et al. v. Becerra, No. 24-cv-3220 (D.D.C. Nov. 14, 2024), HRSA explained that widespread adoption of rebate models would cause unprecedented disruption to the program. Dkt. 35-1 at 20. Likewise, in HRSAs April 2, 2025 motion for summary judgment in J&J Health Care Sys. Inc. v. Kennedy, No. 24-cv-3188 (D.D.C. Nov. 12, 2024), it noted that HRSA has long envisioned upfront discounts as the preferred price The Honorable Thomas J. Engels April 20, 2026 Page 39 of 53 reduction mechanism, explaining that [c]overed entities generally preferred a discount system, because they could negotiate lower prices and needed less initial outlay of drug purchasing money. Dkt. 41-1 at 18. And in an August 1, 2025, brief filed with the D.C. Circuit, HRSA further defended the upfront discounts and flagged concerns with rebates in the 340B Program: Unlike discounts, rebates require covered entities to spend more money upfront and put greater financial pressure on those safety-net programs. Doc. 2128443 at 2, Novartis Pharms. Corp. v. Kennedy, No. 25-5177. 340B hospitals reasonably relied on this three-decade consistency and these agency representations when designing their internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. A switch to a rebate mechanism, even in so-called pilot form for 10 to 25 drugs, would disrupt the settled reliance interests engendered by the agencys prior policy. Comment letters submitted in response to this RFI explain how covered entities have relied on this consistent practice to design their internal operations and just how problematic this forced transformation would be. Meanwhile, HRSA has never explained why the purported benefits of a rebate mechanism justify the unprecedented disruption. Dkt. 35-1 at 20, Eli Lilly & Co., et al. v. Becerra, No. 24-cv-3220; see also Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600, 2025 WL 3754193, at *6 (D. Me. Dec. 29, 2025) (faulting HRSA for not weigh[ing] any reliance interest against the competing de-duplication policy concern or the proposed de-duplication approach favored by the participating manufacturers.). Thus, absent any problems with the upfront discount mechanism, and given the massive costs and burdens that a shift from that mechanism will impose on covered entities, there is no reason to upset settled reliance interests by pursuing this Rebate Program, even in so- called pilot form.45 IV. A Rebate Model Is Not Necessary For 340B/IRA Deduplication HRSA previously suggested that one goal of its original Rebate Program was to facilitate deduplication between 340B discounts and maximum fair price discounts under the IRA. The RFI is not as clear about whether that remains a goal of any future Rebate Program, but it does 1) briefly note that 340B/IRA deduplication was an earlier goal and 2) ask a few questions about the issue. See RFI, 91 Fed. Reg. 7,288, 7,290. 45 The AHA has explained why the proposed Rebate Program is not a pilot in any traditional sense of the word. See Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600, 2025 WL 3754193, at *6 n.4 (D. Me. Dec. 29, 2025) (Plaintiffs dispute Defendants characterization of the Rebate Program as limited or a pilot.). Ordinarily, pilot programs are limited in scope, whereas the anticipated Rebate Program is not. Every indication is that HRSA will (again) require all 340B hospitals to operate under a rebate mechanism for the 2026 or 2027 IRA drugs. See 2026 ICR, 91 Fed. Reg. at 9,633 (listing 14,000 covered entities). Mandatory participation for all, even for a limited time frame, does not make something a pilot. See supra 5 (citing Pharmaceutical Research and Manufacturers of America, Comment Letter on Global Benchmark for Efficient Drug Pricing (GLOBE) Proposed Rule (HRSA-2025- 14998) 2 (Feb. 23, 2026)). HRSA cannot hide behind such labeling when imposing onerous requirements on the hospitals that serve Americas most vulnerable populations, especially when more limited, pilot-like alternatives are available. The Honorable Thomas J. Engels April 20, 2026 Page 40 of 53 In addition, the fact that the ICR assumes that the program will include the 2026 and 2027 IRA drugs further suggests that deduplication remains a goal. Regardless, there is no dispute that drug companies have other ways to ensure such deduplication. In repeated court filings, HRSA made clear that a rebate mechanism is not the only way to promote 340B/IRA deduplication. (Interestingly, HRSA has never stated that a rebate model is the best method for deduplication.) For example, on February 10, 2026, HRSA submitted a letter to the D.C. Circuit stating: while the government seeks to enable manufacturers to avoid paying 340B discounts on drug dispenses subject to the Maximum Fair Price under the Negotiation Program through rebates, plaintiffs [drug companies] in this litigation have other options available to them. Previously, on December 31, 2025, the government told the D.C. Circuit: While the government seeks to enable manufacturers to deduplicate 340B and Negotiation [Program] discounts through rebates, plaintiffs have other deduplication options available to them. And it told the First Circuit on December 30, 2025 that [m]anufacturers have alternate means to deduplicate discounts. Given these other options for 340B/IRA deduplication, HRSA should not pursue a rebate mechanism, particularly since it is almost certainly costlier and more burdensome for 340B hospitals. In fact, even if there is a legitimate reason to believe that the rebate model is the most effective at ensuring 340B/IRA deduplication (again, something HRSA has never said), that does not mean that it is the best mechanism, all things considered, for providing 340B discounts. HRSA must account for other policy goals, including those of the 340B Program, and consider whether any isolated 340B/IRA deduplication benefits outweigh the massive costs that a rebate model imposes on 340B hospitals, their patients, and the communities they serve. In short, HRSA cannot let this one possible deduplication benefit overshadow other benefits of an upfront discount model, especially when there are other ways to achieve that deduplication goal. HRSA has never made clear whether these other deduplication alternatives will impose $200 million, $500 million, $750 million, or billions in costs on covered entities. It must do so. At a minimum, HRSA must 1) explain to the public what these other deduplication options are; 2) conduct a cost analysis for those options, especially the costs they impose on covered entities; 3) compare those deduplication options against each other; and 4) provide a reasoned explanation for why the rebate mechanism is the best approach considering all relevant policy aims, including Congress intent to help covered entities stretch scarce federal resources to provide more comprehensive care to patients. See H.R. Rep. No. 102-384, pt. 2, at 12 (1992). In so doing, HRSA should be highly skeptical of any cost figures that drug companies provide because those estimates have proven to be wildly overstated. For example, during the litigation over the original Rebate Program, certain drug companies and their trade association PhRMA told the First Circuit that they would face $4 billion in financial losses in 2026 alone if they could not use a rebate model for deduplication. Mot. to Intervene on Appeal at 1, Am. Hospital Assn v. Kennedy, No. 25-2236; see id. at 22 The Honorable Thomas J. Engels April 20, 2026 Page 41 of 53 (Absent a stay, the manufacturer-movants and several PhRMA members will be subject to conflicting statutory obligations and will incur drastic financial losses beginning on January 1, when the drugs approved for the Pilot Program will be subject to competing 340B and MFP discounts. Those losses will total $4 billion in 2026 aloneabsent the Pilot Program.). They also insisted that it would plunge a novel federal drug-pricing program into chaos on January 1, 2026, the first day of its operation. But contrary to these assertions, there has not been chaos over the past three-plus months. And as time has gone on, drug companies have been forced to acknowledge in litigation that their first estimates of cost were too high by orders of magnitude, explaining most recently to the D.C. Circuit that [n]ow [] the Drug Price Negotiation Program is in full forcesubjecting manufactures to potentially millions in unchecked unlawful rebates and civil monetary penalties if they incorrectly deem rebates duplicative. Letter from Catherine Stetson, Counsel for Appellants, to Clifton Cislak, Clerk of Court at 2, Novartis Pharmaceuticals Corporation v. Kennedy, No. 25-5177 (Feb. 12, 2026) (emphasis added). As billions have become millions, and as certainty has become potentially, one thing remains clear: manufacturers habitually overestimate the financial benefits (to them, of course) of a rebate mechanism for purposes of deduplication. HRSA should not make the same mistake. Given the inaccuracy of prior numbers offered by the drug companies, the only rational response is for HRSA to discount any future estimates of financial impact that they offer. At a minimum, HRSA must demand an explanation of the methodology behind any drug company estimates, and a full explanation of why numbers they submitted during litigation were so faulty, why their revisions are a tenth of what they previously offered, and why their confidence in those numbers has fallen now to potentially. If it turns out that a rebate mechanism will impose billions of dollars of costs on covered entities while potentially saving far less for drug companies, there is no way a Rebate Program can survive scrutiny. More fundamentally, as long as other options remain for 340B/IRA deduplication, HRSA cannot allow the narrow interests of drug companies in avoiding potentially millions of dollars in costs outweigh the hundreds of millions of dollars that a rebate mechanism will inflict on 340B hospitals and other covered entities. That, again, will be privileging drug companies at the expense of covered entitiesexactly the opposite of how Congress intended for this issue to be evaluated. See supra at 2-3.46 IV. HRSA May Not Use A Rebate Model As A Program Integrity Measure 46 E.g., Firelands Regional Medical Center and The Bellevue Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1480 (WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH FIRELANDS REGIONAL MEDICAL CENTER AND THE BELLEUVE HOSPITALS INTEREST IN CARING FOR ITS PATIENTS?). The Honorable Thomas J. Engels April 20, 2026 Page 42 of 53 Although HRSA has not clearly explained why it wishes to test a rebate model (other than for testings sake or, perhaps, for IRA/340B deduplication purposes), at times the RFI suggests that it views the rebate mechanism as a generalized program integrity measure. For example, the RFI invites comments on how to design a rebate model with safeguards to promote the integrity of the 340B Program, and avoid duplicate discounts, and it includes a series of questions on 340B Program Integrity and Other Potential Benefits of A Rebate Pilot. RFI, 91 Fed. Reg. at 7289, 7290. Likewise, the drug industry has (wrongly) argued that a rebate mechanism can be used to demonstrate program compliance prior to manufacturers providing rebates on medicines. PhRMA, Rebate Model: Addressing Long-term Fraud and Abuse in the 340B Program (Mar. 19, 2026), https://phrma.org/resources/rebate-model-addressing- long-term-fraud-and-abuse-in-the-340b-program. If the purpose of the Rebate Program is to enforce general program compliance, HRSA must provide a reasoned explanation for why it has the legal authority to use a rebate mechanism to achieve those ends.47 The AHA has previously explained why the agency lacks the legal authority to approve a rebate mechanism as a generalized program integrity measure. See, e.g., Br. of the American Hospital Association, et al., Novartis Pharmaceuticals Corporation, et al., v. Kennedy, Nos. 25-5177, 25-5179, 25-5220, 25-5221, 255236 (D.C. Cir. Aug. 5, 2025), https://www.aha.org/amicus-brief/2025-08-05-aha-others-defend-hhsdecision-reject- 340b-rebate-models-drug-companies; American Hospital Association, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) (Aug. 27, 2025) 9-10, https://www.aha.org/system/files/media/file/2025/08/aha- comments-to-hrsa-on-proposed-340b-rebate-model-pilot-program-letter-8-27-2025.pdf. 47 The AHA has previously explained why the drug companies assertions about the amount of diversion and duplicate discounts are overstated. See American Hospital Association, Comment Letter on Application Process for the 340B Rebate Model Pilot Program (HRSA-2025-14998) 8-12 (Aug. 27, 2025), https://www.aha.org/system/files/media/file/2025/08/aha-comments-to-hrsa-on-proposed-340b-rebate- model-pilot-program-letter-8-27-2025.pdf; see also Columbia Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 8, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1413 (Over the past 15 years, we have built a highly compliant program with robust internal and external auditing processes. In the past 6 years, we have undergone a HRSA audit, two external audits, and annual full-program audits with no findings, demonstrating our strong commitment to program integrity. Based on this experience, we believe that broad allegations of duplicate discounts and program abuse do not accurately reflect how compliant hospitals manage the 340B Program.); Providence, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA- 2026-0001-1496 (In the RFI, HRSA describes its concern that the current 340B payment process may be permitting entities to collect duplicate discounts on their 340B covered drugs from the drug manufacturer and their state Medicaid program. HRSA believes a rebate model would help prevent that duplication, but Providence urges HRSA to investigate further the true magnitude of the suspected duplicate discounts. The publicly reported 340B covered entity audit results include findings of inaccurate or incomplete information in the HRSA Medicaid Exclusion File (MEF) that could lead to duplicate discounts, but crucially, the appearance of this finding does not mean that a second discount was actually obtained.). The Honorable Thomas J. Engels April 20, 2026 Page 43 of 53 HRSA has never addressed this legal analysis. The AHA need not repeat all of the reasons it has offered for why a rebate model cannot be lawfully used as a program integrity measure. We instead incorporate these documents by reference and offer a brief summary below. The text, structure, history and purpose of the 340B statute reveal a carefully calibrated regime in which Congress vested authority to oversee compliance with the 340B Program in HHS and assigned no auxiliary enforcement role to program participants. Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110, 117 (2011). The statute contains several provisions addressing audits, compliance and dispute resolution that are incompatible with a rebate mechanism that is designed to address diversion and duplicate discountseven in a so-called pilot form. Consider the following provisions: 42 U.S.C. 256b(a)(5)(C) provides for audits to enforce the statutes prohibitions on diversion and duplicate discounts. 42 U.S.C. 256b(a)(5)(D) relatedly provides for [a]dditional sanction for noncompliance with the diversion and duplicate discount provisions, but only after an audit is completed and only after the covered entity is given an opportunity for notice and hearing. Id. 42 U.S.C. 256b(d)(3) formalizes a statutory ADR process, whereby an authorized audit is a prerequisite to initiating administrative dispute resolution proceedings against a covered entity. These structural features make clear that Congress did not authorize drug companies to engage in self-enforcement, which is exactly what a rebate mechanism will encourage. The Supreme Court has recognized this statutory design. As the Court held in Astra, Congress centralized 340B enforcement in the government, creating a unitary administrative and enforcement scheme. 563 U.S. at 119-120 (quotation marks and citations omitted); see also Am. Hosp. Assn v. HHS, No. 4:20-cv-08806, 2021 WL 616323, at *6 (N.D. Cal. Feb. 17, 2021) (Congress made explicit that alleged 340B Program violations are to be first adjudicated by HHS through an established ADR process.). The drug industry knows this. Several of the worlds largest drug companies submitted a brief arguing that Astra forbids[ ] the private enforcement of 340B program requirements in all forms. Pls. Joint Oppn to Mot. to Intervene (Dkt. 22) at 10, Novartis Pharm. Corp. v. Becerra, No. 25-cv-117 (D.D.C. filed Jan. 15, 2025) (second emphasis added and quotation marks omitted); see id. at 910 (quoting Astra twice more for same proposition). Relatedly, the 340B statute does not contemplate audits or other enforcement before payment at discounted 340B pricing. The 340B statute contemplates: 1) some awareness of a past violation, which then kicks off; 2) a review of completed transaction records, followed by; 3) a determination and remedy by HHS, either under the ADR process, see 42 U.S.C. 256b(d)(3)(B)(i), or through agency-imposed sanctions and The Honorable Thomas J. Engels April 20, 2026 Page 44 of 53 civil monetary penalties, see id. 256b(a)(5)(D), 256b(d)(2)(B)(v). See Am. Hosp. Assn v. HHS, No. 20-cv-8806, 2021 WL 616323, at *6 (N.D. Cal. Feb. 17, 2021) (Congress made explicit that alleged 340B Program violations are to be first adjudicated by HHS through an established ADR process.). Neither the audit nor the ADR process contemplates a regime where drug companies can conduct their own free-wheeling self-enforcement before providing 340B discounts, with the authority to refuse such pricing based on a drug companys unilateral belief that violations of the statute are occurring. [C]onsidered and consistent HRSA practice buttresses this interpretation of the statute. Kennedy v. Braidwood Mgmt., Inc., 606 U.S. 748, 783 (2025). For example, in 1993, HRSA sought public comment to inform its superintendence of the 340B Program, particularly with regard to the statutory bars on diversion and duplicate discounts. See Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Entity Guidelines, 58 Fed. Reg. 68,922 (Dec. 29, 1993). Five months later, the agency issued a Final Notice stating: A manufacturer may not condition the offer of statutory discounts upon an entitys assurance of compliance with section 340B provisions. Final Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Entity Guidelines, 59 Fed. Reg. 25,110, 25,113 (May 13, 1994). In 1996, moreover, the Secretary promulgated a final notice entitled Manufacturer Audit Guidelines and Dispute Resolution Process after notice and comment. 61 Fed. Reg. 65,406 (Dec. 12, 1996). Among other things, the Guidelines require government approval for drug companies to initiate audits. It states: If the matter is not resolved and the manufacturer desires to perform an audit, the manufacturer must file an audit work plan and sufficient facts and evidence in support of the belief with HRSA. Id. at 65410. HRSA requires this approval ensure that the audits are performed where there are valid business concerns ... with the least possible disruption to the covered entity. Id. at 65406 (emphasis added). The 1996 Guidelines also addressed public comments insisting that [m]anufacturers should not be required to continue to sell to a covered entity at the mandated price once an audit has been initiated, particularly since reasonable cause has already been demonstrated. Manufacturer Audit Guidelines and Dispute Resolution Processes, 61 Fed. Reg. 65,406, 65,408 (Dec. 12, 1996). HHS rejected that proposal: Manufacturers must continue to sell at the statutory price during the audit process. Once the audit has been completed and the manufacturer believes that there is sufficient evidence to indicate prohibited entity activity, then the manufacturer may bring the claim to the Department through the informal dispute process. Not until the entity is found guilty of prohibited activity and a decision is made to remove the entity from the covered entity list, will the manufacturers no longer be required to extend the discount. The Honorable Thomas J. Engels April 20, 2026 Page 45 of 53 Id.; see also Or. Health & Sci. Univ. v. Engels, No. 24-cv-2184, 2025 WL 1707630, at *3 (D.D.C. June 17, 2025). Taken together, the statutory and regulatory history is clear: 1) the law sets forth specific program integrity measures that preclude unilateral drug company denials; 2) covered entities must be provided their statutory discounts even while investigations of program integrity violations are ongoing; and 3) those investigations must cause as little disruption as possible to covered entities. By contrast, using a rebate mechanism to police suspected program integrity violations will cause massive disruption to 340B hospitals, delay discounts for a meaningful period of time, and operate outside the HRSA-led processes that Congress created. Thus, if promoting generalized program integrity remains one of HRSAs goals in adopting a rebate model, HRSA must explain why it is permitted to authorize this extra-statutory regime. It is no answer that drug companies seek to gather information from covered entities via a rebate mechanism to support their potential audit requests. As the AHA has explained, HRSAs Audit Guidance and historical practice confirm that the threshold that a drug company must meet before auditing a 340B entity is modest and does not require a rebate mechanism. In fact, HRSA itself has stated that the standards for initiating an audit are not overly burdensome and do not present any barriers to a manufacturers ability to perform an audit of a covered entity. ADR Rule, 89 Fed. Reg. 28,646 (emphasis added). As evidence, HRSA has noted that [i]n the last 5 years, it has not denied a request for a manufacturer audit of a covered entity. Id. Nor is it an answer that some isolated covered entities have challenged certain audit requests; that is rare, not representative of the full hospital field, and the courts have already addressed that issue. E.g., Or. Health & Sci. Univ. v. Engels, No. 24-cv-2184, 2025 WL 1707630, at *3 (D.D.C. June 17, 2025). The standard itself, reasonable cause, is defined broadly to mean that a reasonable person could believe that a covered entity may have violated [certain provisions of the 340B statute]. HRSA, Manufacturer Audit Guidelines and Dispute Resolution Process, 61 Fed. Reg. 65,406, 65,409 (Dec. 12, 1996). Drug companies can meet this standard in various ways that do not require a rebate mechanism. For example, drug companies can point to [s]ignificant changes in quantities of specific drugs ordered by a covered entity, or by cite complaints from patients/other manufacturers about activities of a covered entity[.] Id. at 65 ,406. In fact, the standard is so modest that there are apparently no cases where a manufacturer requested but was denied an audit due to a lack of relevant claims data. PhRMA v. Frey, 1:25-cv-00469-JCN, 2026 WL 184504, at *14 (D. Me. Jan. 23, 2026).48 48 Likewise, as HRSA itself has recognized, drug companies seldom ask to conduct audits, and even when they do, manufacturers frequently fail to follow through with them. See Decl. of Chantelle Britton at 15, Or. Health & Sci. Univ. v. Engels, Case No. 1:24-cv-2998-RC (D.D.C.) (noting that, over the past decade-plus, HRSA approved 37 manufacturer audit requests, but only 18 audits were conducted). The Honorable Thomas J. Engels April 20, 2026 Page 46 of 53 Given these statutory and regulatory realities, drug companies cannot unilaterally deny 340B discounts based on their own subjective assessment of whether a covered entity complied with the law. HRSAs original Rebate Program acknowledged this when it provided that 340B rebates could not be denied based on compliance concerns with diversion or Medicaid duplicate discounts. 90 Fed. Reg. 38,165, 38,166 (Aug. 7, 2025). Thus, if drug companies must provide 340B discounts regardless of suspected program integrity concerns, it is unclear how a rebate model can advance any purported program integrity goals. Likewise, if drug companies view a rebate mechanism as a way to aid the existing, statutory audit and ADR processes, then the modest standard discussed above shows that it is not needed. Drug companies already have access to those statutory processes under an upfront discount mechanism, but they simply choose not to use them. Any incremental benefits a rebate mechanism might offer for the audit process cannot outweigh the billions of dollars in costs to covered entities. Finally, it is no answer that a rebate mechanism will increase transparency into the 340B Program. The only entities that will see covered entity data are drug companies, their third-party IT platform, and whoever that third-party chooses to sell data to (if that is permitted, see infra at 51). That is not real transparency. By contrast, there are many ways to gather relevant data that will allow for effective program transparency. As we explain below, a neutral third-party clearinghouse will enhance HHS own visibility into the 340B program and thus its ability to strengthen program integrityexactly what Congress intended. Astra USA, Inc., 563 U.S. 117 (Congress vested authority to oversee compliance with the 340B Program in HHS....). Most important, a neutral third- party clearinghouse is a cheaper, less burdensome way to do so, and it is fairer to all stakeholders. See infra at 47-49. A rebate model, by contrast, is more expensive and wrongly privileges the pecuniary interests of drug companies over 340B hospitals, their patients, and the communities they serve. For all of these reasons, HRSA cannot rely on program integrity as a valid reason for (or expected benefit of) pursuing a rebate mechanism. Put another way, HRSA cannot include program integrity in its required cost-benefit analysis. V. HRSA Should Adopt A Less Burdensome Alternative To be clear: HRSA should abandon its misguided pursuit of a rebate mechanism because there is no sensible reason to impose billions of dollars of administrative, float, and non-economic costs on 340B hospitals and the vulnerable patients they serve. If, however, HRSA is committed to going down this problematic path, there are significant, viable and less burdensome alternatives it should adopt instead. The proposed alternatives can be divided into two categories: (1) less burdensome so- called pilot programs; and (2) less burdensome alternatives to a rebate mechanism that would help facilitate 340B/Inflation Reduction Act deduplication or program integrity goals. The Honorable Thomas J. Engels April 20, 2026 Page 47 of 53 To the extent that HRSA now claims that evaluat[ing] the potential benefits and costs of a rebate model is the goal of any future Rebate Program, it can design a much less burdensome version. First, HRSA could create a volunteer-only program that would allow covered entities to opt-in. This is consistent with typical pilot programs and would limit the costs and burdens to only those covered entities that are prepared to bear them. HRSA has said that it rejected this concept because it wanted to collect information on the experience of a wide variety of covered entity types with a rebate model. Britton Decl. 24. But HRSA took no steps to determine whether a wide variety of covered entity types would volunteer. It canand shouldput out a request for volunteers before it dismisses this concept. And it canand shouldincentivize participation in the Rebate Program by requiring drug companies to cover all costs for those volunteers. If the drug companies believe that a rebate mechanism will pass HRSAs test, then they should be eager to put their money where their mouths are and fund covered entity participation. Only if HRSA does not receive enough volunteers (after this incentivization) should it consider other options. Second, HRSA should consider alternative ways of achieving whatever goals it believes could be accomplished by a rebate mechanism. One example that would obviate the need for a rebate mechanism would be to have drug companies prospectively publish both the 340B price of drugs and the MFP price. Covered entities could then have two accounts with their wholesaler, one loaded with 340B pricing and another loaded with MFP pricing. As prescriptions are filled, the covered entities, in coordination with their third-party administrators, could track those purchases, and when it is time to reorder the drug, the covered entity would simply replenish the drug at the lower of the two prices for that drug. The claims data could be submitted to a neutral third-party clearinghouse that could verify that the covered entity purchased the drug at the correct price. In the event that the incorrect price was used, the clearinghouse could help facilitate payment reconciliation between the covered entity and the manufacturer to ensure the drug is purchased at the lower of the MFP and 340B price. Relatedly, the AHA also suggestedand HHS rejectedthat HRSA administer its own clearinghouse. Others have suggested a HRSA clearinghouse, too.49 It is therefore 49 E.g., National Association of Chain Drug Stores, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0042 (NACDS implores HRSA to consider alternative methodologies for achieving the stated manufacturer goals of avoiding duplicate discounts. The agencies should consider the development of a centralized clearinghouse run by a conflict-free vendor that would use 340B claims data retrospectively submitted by covered entities to remove those claims from the claims on which manufacturers must pay MFP refunds. In fact, CMS has already stated it plans to develop and test such a model to prevent duplicate discounts for 340B and Medicare Part D inflation rebates.); Walgreens, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- The Honorable Thomas J. Engels April 20, 2026 Page 48 of 53 important to address HRSAs prior explanation for why it rejected this option, even though HHS adopted a similar framework for a clearinghouse in connection with Medicare Part D drugs. HRSA has asserted that there is no clear legal authority in the 340B statute for OPA to create that type of clearinghouse. Id. 21. HHS has not, however, publicly presented its legal reasoning, and there is serious reason to question it. After all, if HHS can create a clearinghouse in the Part D context to deduplicate 340B drugs, why is it legally forbidden from doing so elsewhere? Put differently, if 340B/IRA deduplication remains a goal of a Rebate Program, and if HHS relied on the IRAs statutory authority for the Part D clearinghouse, then there is no reason why the same authority couldnt be relied upon here. At the very least, HRSA must subject its legal analysis to public scrutiny. HRSAs failure to adopt a less costly, equally (or more) effective, fairer-to-all-stakeholders alternative because of a perceived (but dubious) legal impediment is surely an important aspect of the problem that the agency must consider (and present to the public for further comment). This is especially important because drug companies have not questioned the lawfulness or effectiveness of a clearinghouse for IRA/340B deduplication. In their briefing before the district court in Maine and First Circuit, their only objection to a clearinghouse was timing. The companies insisted that such a clearinghouse could not be created and implemented before the MFP goes into effect on January 1[, 2026] and that the earliest any such clearinghouse allegedly could be available (on a voluntary basis and for testing only) is the fall of 2026. Proposed Intervenors Br. in Oppn to Pls. Mot. for TRO 13, Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600 (D. Me. Dec. 1, 2025); see id. (Because the clearinghouse will not be operational before January 1, it is not a viable alternative that HRSA needed to consider.). But with the withdrawal of that original Rebate Program, those timing concerns are moot. If HRSA can get a clearinghouse up and running by the fall of 2026, then the only possible reason not to use such a clearinghouse is the legal argument HRSA has alluded to with its conclusory statement in a litigation filing. And if that legal argument does not hold water because HHS has legal authority under the IRA, this neutral 1548 (Instead of proceeding with the rebate pilot or expanding the use of 340B rebates more broadly, one option that HRSA could pursue is the development of a clearinghouse run by a federal government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent duplicate discounts. Manufacturers would only pay MFP rebates on non340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS has already proposed testing a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-MFP duplicate discounts and 340B-Medicad rebate duplicate discounts.). The Honorable Thomas J. Engels April 20, 2026 Page 49 of 53 clearinghouse alternative is viable, less burdensome, and fairer to covered entities (whose interests must be, as noted, paramount here). It should be adopted instead. VI. HRSA Must Exercise Greater Authority Over The Chosen IT Platform The AHA and others have identified a host of problems with the Beacon IT platform that the drug companies selected for the original Rebate Program. For example, we have explained that HRSA should have insisted on a neutral IT platform providernot Second Sight Solutions, which is a wholly owned subsidiary of a consulting firm with a long history of working for drug companies and their trade association, PhRMA. Our concerns about the excessive entanglements between the drug industry and Second Sight Solutions have only grown, as Second Sight Solutions submitted a misleading, error-laden declaration supporting the drug companies in the litigation. We do not know if HRSA will still bless the use of that platform following this RFI. It should not. But if it does, it must address these many problems with Beacon and Second Sight Solutions. Beacons Terms and Conditions both illustrate this bias-problem and are highly problematic in their own right. Just as numerous commenters previously warned HRSA during the 2025 comment period, Beacon would have required covered entities to sign a one-sided, nonnegotiable contract that covered entities would not have otherwise signed if their hands werent tied. This contract included several intolerable provisions, including those that (a) limited Beacons liability for direct damages under the Rebate Program to $1,000, including for cybersecurity and data breach incidents; (b) allowed Beacon to sell covered-entity data to any purchaser (including drug companies themselves); and (c) permitted Beacon to unilaterally change contract terms at any point in time or cancel the contract for any reason. Beacons contract also did not align with the scope of the original Rebate Program. For instance, the Preamble to the contract stated: The Rebate Platform further enables analysis of this claims data for Manufacturers in order to identify Medicaid, Medicare, TriCare, commercial payer, or other discounts that are ineligible for reimbursement by Manufacturers. Similarly, Section 3(d), (e) (Data License) allowed Second Sight to verify compliance with 340B program requirements. This is inconsistent with how HRSA itself viewed the Rebate Program. As HRSA previously articulated it, the Rebate Program was not intended to verify program integritya function the drug companies strongly favoredyet that is exactly how Beacon viewed its remit. In addition, numerous AHA members reported that in the run-up to the previous January 1 deadline, Beacon refused to provide basic customer service to help 340B hospitals work through technical problems. See, e.g., Columbia Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) (Apr. 8, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1413 (Customer support and communication were limited and insufficient given the complexity of the program.). Beacon would not provide a contact person to discuss problems, and it refused to answer questions from hospital IT teams on data security. To The Honorable Thomas J. Engels April 20, 2026 Page 50 of 53 take one example among many, multiple AHA members reported that Beacon refused to complete data security questionnaires or allow standard vendor assessments related to the security of the data that hospitals were required to submit under the Rebate Program. As you know, hospitals complete these security assessments to comply with the HIPAA Security Rule (45 C.F.R. 164.308). Because Beacon refused to provide this data security information to the AHAs 340B members, it was essentially forcing covered entities to either forfeit access to 340B discounts for the drugs in the Rebate Program or risk violating HIPAA and other data privacy laws. Likewise, Beacon was constantly adding new technical requirements to use its platform. Hospitals reported to the AHA that they felt like these new requirements were coming on a daily basis. This made it impossible for 340B hospitals to prepare to use the platform, adding even more costs and burdens to the Rebate Program. Faced with all of these troubling developments, HRSA stated that Beacon is a private company that is an ancillary stakeholder in the 340B space, but OPA has no legal authority over Beacon. Britton Decl. 44; see id. (OPA cannot compel Beacon to act in a certain manner.); id. 45 (OPA is not involved in negotiating, setting, or even reviewing beforehand the terms and conditions of these private agreements and would only become involved to the extent there is activity that conflicts with a covered entitys (or a manufacturers) 340B obligations.). This is a troubling abdication of responsibility over its own Rebate Program, and one HRSA cannot repeat if it decides to move forward with another version of its misguided Rebate Program. However, HRSA did, in fact, impose conditions on manufacturers choice of IT platform. E.g., id. 43(5) (noting that manufacturers were required to ensure that the IT platform will have the capacity to receive data that will filter and use only the data required to effectuate the rebate). Regardless of its legal authority over the IT platform, HRSA has authority over its own Rebate Program. And there is no reason why, as a condition of participation in that Rebate Program, HRSA could not similarly require drug companies to choose: a neutral IT platform of HRSAs selection, i.e., not Second Sight Solutions or Beacon; an IT platform that would not include objectionable, unfair, one-sided contract provisions, including those discussed above; an IT platform that provided necessary support and customer service to covered entities, including specified representatives to resolve problems with the rebate mechanism; an IT platform that would complete data security questionnaires to comply with HIPAA; and an IT platform that would not add new data or other requirements after a certain date so covered entities could adequately prepare for implementation. The Honorable Thomas J. Engels April 20, 2026 Page 51 of 53 HRSA also could have insisted on the ability to test the functionality and operation of the IT platform before implementationsomething HRSA shockingly did not do last December. The AHA urges HRSA to take these steps before moving forward with any new Rebate Program. It must not outsource all management and oversight of the IT platform to the participating drug companies or their biased third-party business partners. VII. HRSA Must Create A Dedicated Process To Resolve Disputes Between Drug Companies and Covered Entities HRSA also abdicated its responsibility to resolve disputes between drug companies and covered entities over delays and denials, as well as other potential operational issues. Before it was taken down, HRSAs FAQ webpage stated: Covered entities who are not receiving rebates within the 10-day timeframe after submitting complete and accurate data, should first contact the manufacturer and IT platform vendor to report concerns. If after attempting to work with the manufacturer a covered entity cannot resolve the issue with the manufacturer, the covered entity should email with the details of its concern. A manufacturer that is consistently unable to timely resolve rebate reimbursement issues may have its participation in the pilot program revoked. This is insufficient. If HRSA itself does not play an active role in resolving disputes apart from merely receiving complaints at a general email inboxthen there is little hope that disputes will actually get resolved (and in a timely manner). That, in turn, will only incentivize drug company misbehavior and leave hospitals with no viable path to effectively challenge rebate delays or denials. All of this raises the risk that drug companies can delay or deny rebates without recourse, and that hospitals will have to spend even more time and money chasing down the discounts they are owed by statute. HRSA also stated in the litigation that covered entities will be able to raise these types of issues through the 340B Administrative Dispute Resolution process. Britton Decl. 32. By this, we assume HRSA will not specifically resolve disputes over the Rebate Program and will force 340B hospitals to bring their complaints about delay and denial through the ADR process. This is a different form of abdication, but one that is highly problematic as well. Under the regulations, the ADR process can take up to one year before a decision is rendered. But in reality, the ADR process is severely backlogged, with decisions The Honorable Thomas J. Engels April 20, 2026 Page 52 of 53 pending far longer than a year.50 Either way, a resort to the ADR process would mean that hospitals would have to forgo a rebate and float large sums of cash for an extended periodhundreds of days more than the 10 days allowed under the original Rebate Program. Plus, resolution through the ADR process can be expensive for 340B hospitals, adding further administrative costs that HRSA has not accounted for in any of its cost estimates. (HRSA did not even raise the prospect of ADR until the litigation and does not discuss it in the new RFI or ICR).51 And it is not clear that the existing ADR system can handle the avalanche of disputes that may arise over rebate delays and denials, especially if drug companies realize that they can hold on to discount dollars longer by forcing hospitals to go through that backlogged process to resolve claims. Finally, it is not clear that all problems that may arise under the Rebate Program (e.g., administrative or logistical issues) can be resolved through the ADR process since some may not qualify as overcharges. For all of these reasons, HRSA must create a dedicated dispute resolution process for any Rebate Program. This separate process should allow for expedited review and timely decisions of any rebate-related disputes. Most important, the agency should provide (1) a designated human point-of-contact to receive complaints (and follow-ups on those complaints); (2) a clear, specified process by which disputes will be addressed; and (3) a specific timeline (no longer than 30 days) for when those complaints will be resolved.52 HRSA should provide the public with the cost of creating such a process, and it should ask itself whether the need to stand up a fair dispute resolution process just for a rebate mechanism is a responsible use of taxpayer resources. That said, the failure to create such a process unfairly shifts the costs of policing rebate delays and denials to Americas safety-net hospitalsyet again, an example of HRSA impermissibly privileging drug companies over covered entities on this issue under the 50 Thus, if HRSA is serious about this being a one-year pilot, it is almost certain that the ADR disputes would outlast the Program itself. 51 Even if HRSA believes that drug companies will largely comply with the Rebate Programs rulesa questionable propositionit has to realistically account for some legitimate disputes. It therefore must build into its estimates the costs that covered entities will incur for hiring attorneys to pursue the ADR process and the delays in receiving discounts. 52 To aid this process and to minimize disputes between drug companies and covered entities, HRSA should require drug companies to document the reasons for any denial. Documentation must include: 1) a narrative description of why a rebate claim is being denied, and not just a conclusory statement (e.g., deduplication for MFP or 340B provided to another covered entity on the same claim); 2) supporting primary source materials justifying such a denial (e.g., claims information, indication of which other covered entity received a rebate); and 3) a signature or attestation by a drug company employee, along with their telephone number or email address, so that covered entities can reach them to address any incorrect denials. In fact, HRSA also should consider creating a standard denial form to streamline the administrative process and provide covered entities with sufficient information to understand (and potentially challenge) a denial. The Honorable Thomas J. Engels April 20, 2026 Page 53 of 53 mistaken mission of achieving balance. See supra at 2-3. If HRSA decides to reject these commonsense suggestions, it cannot offer conclusory statements like OPA determined that the dispute process was sufficient and that the suggestions from commenters to address alleged unaccounted-for costs caused by perceived gaps in the dispute resolution system were unnecessary. Britton Decl. 32. It must instead provide a thorough explanation for why the suggestions were unnecessary and why the agency was willing to impose on hospitals the added costs associated with a toothless or inefficient dispute resolution process. VIII. If HRSA Proceeds With A New Rebate Program, It Must Provide Additional Opportunity For Comments The current RFI does not address many important details of a Rebate Programexactly which drugs will be included, what kinds of data the drug companies will be permitted to require from covered entities, what guardrails will be in place, which third-party vendors it has approved, which design features HRSA has accepted and rejected, and so on. Therefore, if HRSA chooses to move forward with a new Rebate Program, it should allow stakeholders to comment on any specifics of its new program before any drug company applications are submitted or approved.53 Only then will HRSA be able to fully evaluate the true costs and benefits of its new program. Put another way, a failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider potentially important aspects of the problem. We therefore look forward to the opportunity to comment again, if necessary. * * * * We appreciate your careful consideration of these issues. The AHA is eager to meet with you at your earliest convenience to discuss our members concerns and to provide you with accurate information about the real-world, on-the-ground impacts of a Rebate Program. Please contact me if you have any questions. Sincerely, /s/ Chad Golder General Counsel & Secretary 53 In fact, it also should make public those applications and allow public comment on those applications. The prior administrative record (including documents that the drug companies tried to introduce during the litigation) revealed that drug companies were in frequent contact with HRSA, negotiating by the exact terms of their participation in the Rebate Program, while certain covered entities were left out entirely. We hope that this does not happen again. Appendix A Selected Comments Referencing Staffing Impacts St. Tammany Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0080 (STHS currently lacks adequate staffing to support a rebate-based program. To effectively administer the rebate processincluding submission management, reconciliations, and handling any delays or denialsan additional 2.0 FTEs would be required. Furthermore, significant lead time would be necessary for recruiting and training these employees, especially given ongoing challenges in pharmacy hiring; several positions have remained unfilled for months due to a shortage of qualified candidates.). St. Peters University Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0111 (At least two full-time employees will be needed initially). MyMichigan Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0044 (MyMichigan Health does not currently have the staff needed to comply with a Rebate Program. Rural safety net hospitals operate on limited budgets and the intent of the 340B program was to stretch scarce federal resources.... HRSA has grossly underestimated the labor burden of implementing a rebate model. This model would require a completely different workflow and as it would be implemented gradually, and covered entities would essentially be operating under multiple models and workflows. This would require an additional 1-2 full time employees initially, and more as the program expanded.). Graham County Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 5, 2026), https://www.regulations.gov/comment/HRSA-2025-0001-0012 (As indicated before, a rebate model pilot program would require additional full-time employees and has the potential to cause current medical providers to reallocate work hours away from direct patient care to perform administrative functions. A minimum of 1.5 additional FTEs would be required as noted before to track, reconcile, work to ensure IT network administration, and legal framework for difficult to obtain rebates. HRSAs prior estimate of 2 additional work hours per week is a gross underestimation of the time it takes to file, reconcile, administer from an IT standpoint, and legal pressure for rebates we are duly owed.). Mccurtain Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 12, 2026), https://www.regulations.gov/comment/HRSA-2025-0001-0817 (We anticipate needing at least one additional full-time employee, and this role would likely be permanent, not temporary, because the work would be ongoing.). Equitas Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar.ch12, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0073 (Under the proposed 340B rebate model [for only 10 drugs], we estimate an exponential rise in the administrative costs related to this program, and specifically, we would need to expand our auditing team by an additional 2 to 3 FTEs and 2 more FTEs for our front-line focused work. Further, the system changes would require dedicated personnel from our finance team, which would require an additional 2 FTEs in that unit. In short, we would need to expand from our current staffing of 9 FTEs to 15 to 16 FTEs, which means our staffing costs alone would rise by an estimated 40%.). Labette County Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0066 (Implementation of a rebate model would require doubling our current staffing dedicated to 340B program administration. These additional personnel would be responsible for rebate submission, reconciliation, dispute resolution, and expanded compliance reporting. These positions would be permanent roles due to the ongoing administrative demands of the program.). West Calcasieu Cameron Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 5, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0026 (Hospitals would need additional personnel and infrastructure to manage claim-level tracking, reconciliation, dispute resolution, and audit preparation. These expanded responsibilities would involve coordination across pharmacy, finance, IT, compliance, and revenue cycle departments, resulting in structural cost increases, particularly for rural and community DSH hospitals.). Heart of America Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 5, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0037 (explaining that for only 10 medications: Heart of America Medical Center in Rugby, North Dakota does not currently have the staff needed to comply with a Rebate Program. To maintain this rebate program, Heart of America Medical Center would have to reallocate 30 hours per month from important medical care to administrative functions. This would also divert our already minimal current pharmacy staff from tending to the needs of our patients in the retail and hospital settings.). Iroquois Healthcare Alliance, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0018 (Across our membership, hospitals have identified potential cost increases including: new or upgraded IT systems and data infrastructure, additional staffing or reallocation of existing clinical and administrative staff to compliance functions, new contracts with third-party administrators or vendors, legal and consulting costs associated with program implementation, and ongoing reconciliation and dispute resolution functions that do not exist under the current model. For smaller rural hospitals with lean administrative teams, even modest increases in compliance workload can have outsized impacts. HRSA's prior estimate of two additional hours per week bears no relationship to what our members have experienced or anticipate. If the pilot program were to expand beyond the original 10 drugs, these costs would multiply accordingly.); id. (IHA member hospitals, particularly those in rural areas, consistently face workforce shortages. Most do not have excess administrative capacity to absorb new compliance obligations without either hiring additional staff or diverting existing employees from clinical and operational functions. A rebate model would require both. Hospitals have indicated they would need dedicated staff to manage claims submission, data validation, rebate tracking, and dispute resolution under a rebate model. In some cases, this would require diverting pharmacy staff or billing personnel who are currently focused on patient care activities. In rural communities where hiring qualified staff is already difficult and expensive, those transitions take time and come at a real cost. HRSA should not underestimate how disruptive that reallocation would be for hospitals that are already stretched thin.). Jefferson Community Health & Life, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0075 (These processes would require additional staff time and potentially additional personnel.... Jefferson Community Health & Life does not currently employ staff dedicated solely to managing manufacturer rebates. Implementing such a system would require staff to divert time from patient-centered responsibilities to perform administrative functions related to claims submission, reconciliation, and manufacturer communications. HRSAs estimate that these processes would require only minimal additional hours significantly underestimates the complexity of implementing and maintaining a rebate-based program, particularly if as many as 25 drugs are included in the pilot.). Jordan Valley Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0085 (estimating an additional 1-2 FTEs in pharmacy, finance, and compliance). Massac Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0087 (We would need an additional FTE in addition to current staff additional training and education. This hiring process is concerning because we already live in a rural community where Information Analyst positions are proving difficult to fill.). Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0100 (Additional staff of 1 administration and 1.5 operational staff will be needed to complete additional duties.). The Richland Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 19, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0093 (We would estimate the incremental administrative and operational costs our organization would incur under a 340B Model Rebate Pilot Program: ... ongoing costs of at least 40 hours and thousands of dollars per month. Key cost drivers would include increased staffing requirements, diverting current staff. We currently contract out for 340b management services, despite this, we would expect contract expenses to increase under a rebate model and reallocation of pharmacist work hours from medical care to perform administrative functions. (approximately 20-40 hours per month.). Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (March 19, 2026), https://www.regulations.gov/comment/HRSA-2026- 0001-0096 (Our organization, located in New York State, is comprised of a DSH, a CAH, and a SCH registration on the Office of Pharmacy Affairs 340B OPAIS.... Additional staff required to manage the rebate programs for the network would exceed $500,000 in upfront costs.). Randolph Hospital District dba Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0110 (The proposed models impact on our mixed-use and retail operations creates a need for an additional full-time 340B Account Manager at an annual salary of $95,000. Due to our rural location in Southern Illinois, we anticipate a one-time cost of $20,000 for specialized recruitment and training.). Bothwell Regional Health Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (April 2, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0156 (I believe each rebate claim would require approximately 30 minutes of additional attention. With an estimate of 4,000 affected claims, there is no way we could absorb this into our current workload. An additional full time employee is required to ensure we receive full compensation from our WAC purchases. This burden placed on hospitals operating on a shoestring budget is unacceptable. Our hospital was just forced to do a reduction in force and expenses, with another round expected by summer. The rebate model would require us to create and fill additional 340B role(s).). Mitchell County Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (April 3, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0301 (The rebate model would require approximately 1.0 FTE to manage claims submission, reconciliation, and appeals.). Citrus Health Network, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 31, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0123 (The administrative costs alone in this 340B model are projected to be at least $300,000 a year because at least 3FTEs would be needed to administer the tracking of data, billing, rebates, compliance and appeals.). AAMC, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Based on feedback provided by AAMC member hospitals, depending on the institution-specific circumstances and their current staffing levels, a hospital would need to hire from one to more than six FTEs spanning not just the pharmacy department but including legal, compliance, revenue cycle, and finance roles as well.... Many hospitals also reported that they would have to realign existing staff time to prioritize rebate model compliance, with one hospital citing approximately 12,240 hours of redistributed staff time annually across pharmacy, finance, revenue cycle, and compliance teams.); see id. (Staff time related to submitting and reconciling claims and managing disputes and discrepancies is estimated to require 25 to 40 hours per week.). Americas Essential Hospitals, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (According to our members experience preparing for the implementation of the rebate pilot, hospitals noted that they would need to hire at least one FTE employee to work on this model full time (40 hours a week). Many of our largest members have indicated that they would need to hire at least three FTE employees to manage the new process. These staff would be needed to conduct ongoing monitoring of claim determinations, investigate of denials, and initiate formal appeals processes to ensure access to their statutorily required discounts. Based on these data, we estimate that the rebate pilot would impose $1.2 billion in total direct staffing costs on all hospitals, including $135.9 million in costs on essential hospitals.). Elliot Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001- 0317 (Elliot Hospital does not currently have the staff needed to comply with a Rebate Program. We estimate it would require the following adjustments to our team: Additional 2 full time employees would be required to handle data processing, rebate tracking and validation, and manufacturer communication. Hiring would require 3-6 months to find qualified individuals with necessary niche skill set.). Ammonoosuc Community Health Services, Inc., Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Mar. 30, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0304 (ACHS anticipates adding 1-2 FTE that alone would put the program out of existence for all intents and purposes where the cost of administration will exceed the cost of any savings.). Samaritan, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001- 0653 (It will either require us to hire an additional FTE or contract with a company to provide those support hours. It would require 1 FT employee to reconcile payments against cost, upload data to Beacon and work denials, etc. It will take 6 to 12 months to advertise and find a qualified employee to hire.). Sierra View Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA- 2026-0001-1389 (Sierra View Medical Center does not currently have the staff needed to comply with a Rebate Program. This new rebate pilot would cause us to incur hiring another full-time employee to just handle the claims data submissions, on top of our already newly created 340B Program Coordinator position. This additional 40 hour per week FTE would be responsible for data claim submissions, IT data feeds, TPA interfacing, reconciliation of rebates and denials, and auditing of these new data claims. HRSAs current estimate of only 5 hours per week to manage the details of this rebate program are very underestimated. This new position would cost us up to 30% of our current 340B contract pharmacy savings.). Columbia Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 8, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1413 (We estimate the need for at least on additional FTE (340B coordinator) to manage data submission, rebate tracking and reconciliation, and the investigation and appeal of denied rebates. This would be in addition to recent increases in staffing required to track claims associated with the MFP program.... Given the specialized nature of 340B program administration, we would require approximately 3-6 months of advance notice to recruit, hire, and train appropriate staff.). Rady Childrens Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 14, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1444 (A new rebate model will require new and additional resources and processes, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a pediatric health system, including adding at least one full-time equivalent employee to track compliance to a dual claims system, and at least $100,000 annual investment in a custom design platform identify, submit and track claims.). Mount St. Marys Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1430 (We anticipate needing to hire at least one full-time employee at an estimated annual cost of $80,000, in addition to engaging an external vendor at approximately $60,000 per year. Existing staff would also need to be reallocated from compliance and auditing functions, weakeningrather than strengtheningprogram integrity.). Liberty Dayton Regional Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1400 ([A] 1.0 FTE is totally required to run the program.). Womans Hospital Foundation, dba Womans Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1408 (Implementation of a rebate model would result in incremental and ongoing costs, including: A minimum of 1.5 additional FTEs.). Monadnock Community Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1415 (Depending on the final program rules, MCH would likely need at least 12 additional fulltime equivalents to manage the workflow, with more support possibly required during implementation and audit periods. Advance notice of at least 612 months would be needed to recruit, hire, train, and embed those staff into existing revenue cycle and compliance processes.). Edwards County Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1417 (An estimated 20 additional hours a week will be needed to administer this new program model. Though this may be insignificant to some organizations, it is a substantial amount of additional time for my staff, which already has multiple tasks beyond 340B administrative functions. This will require more dollars to be spent on staff and administrative work, thus cutting into the benefits we are supposed to fund with these dollars. The reality is Edwards County Medical Center could close its doors if 340B dollars cannot continue to help us on our bottom line.). Sisters of Charity Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1429 (We anticipate needing to hire at least one full-time employee.... Existing staff would also need to be reallocated from compliance and auditing functions, weakening rather than strengtheningprogram integrity.). Wabash General Hospital District, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1438 (In our estimate, we would need to shift current responsibilities and hire the following staff members to ensure program success: 1.0 FTE - 340B Program Analyst; 0.5 FTE - Pharmacy Technician; 0.25 FTE - Finance Specialist; 0.1-0.2 FTE - Compliance Office.). Madison Community Hospital d/b/a Madison Regional Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1447 (Due to additional administrative burden related to rebates we would have to add FTEs in both our Pharmacy and Finance departments.... Advance notice to hiring any additional staff for this program would be a minimum of 6 months. Due to the rural nature of our community, finding the staff with experience in the 340b program is almost impossible, therefore adding to the delay of having to educate/train a new staff member delaying this at an estimate of another 12 months.). Maricopa County Special Health Care District DBA Valleywise Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1399 (Valleywise Health estimates that, at a minimum, the addition of three Fulltime Employees will be needed to monitor, reconcile, and gather information for disputed claims. These employees would be required to be well versed in purchasing, 340B regulatory processes, and have a working familiarity with the Beacon platform and any other associated applications utilized by any manufacturer.). Temple University Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1396 ([T]o implement the rebate model, 2 full-time employees (FTEs) are required: one will join the 340B team to oversee $15 million in spending on 10 MFP 2026 drugs, and another IT/accounting professional to provide ongoing support. If more drugs are added in in 2027, annual drug costs will rise by $27 million and $29 million, which will require 2 additional FTEs each year to manage at an additional $302,000 per year.). North Oaks Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1384 ([W]e anticipate an addition 1.0 FTE will be needed to facilitate the additional requirements of the rebate program.). Lakewood Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1382 (We anticipate adding at minimum a 1.0 FTE to manage a drug rebate model with all the added complexity to an already extremely complex program, which we take pride in our 340B compliance.). Coffee Regional Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1369 (Currently, Coffee Regional Medical Center operates its 340B program with one full-time equivalent employee. A rebate model would require at least one to two additional full-time employees, including a dedicated rebate analyst and compliance specialist. Additionally, clinical and pharmacy staff would be required to divert time away from patient care to support administrative functions.). University of California Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026) (On an ongoing basis, we estimate an increase of 34 hours per day per campus, plus approximately one additional FTE per campus to manage rebate-related functions. Even with a third- party vendor, internal staff will still be required to oversee and validate that work.). Baylor Scott & White Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1485 (HRSA estimates that implementation of a rebate model would require approximately five additional hours per week of program compliance and operations burden. Based on BSWHs direct operational experience with existing claims-based compliance platforms, this estimate is not accurate. A rebate model would require the creation of entirely new workflows, including claims extraction, validation, submission, tracking, reconciliation, dispute resolution, and audit support. These activities are labor-intensive, highly manual, and ultimately require BSWH to hire seven to eight FTEs and spend hundreds of hours a month on program compliance and operations.). Fresno Community Hospital and Medical Center dba Community Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001- 1479 (Should HRSA go forward with the proposed rebate pilot, CHS anticipates needing to hire multiple additional Full-Time Equivalents (FTE) to prepare data submissions to manufacturers, submit and track rebate submissions, adjudicate rebate payments, challenge denials, and resubmit rebates when manufacturers deny them, which could occur for any number of reasons having nothing to do with program integrity or preventing duplicate discounts.). Self Regional Healthcare, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1495 (The organization at a minimum would have to hire 5 full-time employees to accurately track and submit rebate requests.... The new 5 FTEs mentioned previously would need to be trained in 340B and the rebate model.). Firelands Regional Medical Center and The Bellevue Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1480 (Implementation of a rebate-based model would require Firelands Regional Medical Center and The Bellevue Hospital to significantly expand staffing devoted to 340B program administration. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution.). Yale New Haven Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 14, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1473 (Based on preliminary, scenario-dependent estimates, a rebate model could require up to approximately 120 additional staff hours per week across multiple functions.... YNHH does not currently maintain excess staffing capacity for rebate-based claims processing. Under a potential rebate model, YNHHS may need to hire additional full-time employees and/or reallocate existing staff from other operational or compliance activities. Early estimates contemplate the possible addition of approximately three full-time employees, though actual staffing needs would depend on final program details and manufacturer implementation practices.). Providence, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1496 ([A] rebate model will cost entities well above the estimated 5 hours per week that HRSA estimates for a 25- drug model. We expect an annual cost of over $3 million to appropriately staff our program for rebate processing. These administrative changes will not be linear, especially as the program expands from 10 to 25 drugs or beyond.). Memorial Hospital of Sweetwater County, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1477 (As we set up our 340B program operations, we initially planned to allocate 1 FTE to manage it. However, under a rebate model, we anticipate needing additional FTEs or contract management assistance to manage the 340B program. These are additional costs we did not plan for and are difficult to incur, given our financial situation as a rural CAH.). Marion General Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1497 (Implementation of a rebate-based model would require Marion General Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Marion General Hospital's current staffing model includes one full-time 340B Specialist and a Pharmacy Systems Manager who devotes approximately 40% of their time to 340B monitoring and compliance. If the Rebate Model Pilot Program is implemented and subsequently expanded, we anticipate the need to add an additional full-time 340B Specialist and increase the oversight time required from our Pharmacy Systems Manager. This added staffing and oversight burden would ultimately erode 340B savings, as Marion General Hospital would incur increased operational costs to manage and sustain a rebate-based model.). Rutland Regional Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1502 (HRSAs estimate of only 5 hours per week in additional work is a gross underestimate of the staff time we would need to dedicate to a rebate program.... If HRSA implements a rebate program, we anticipate a need to hire an additional 2 FTEs.). Kootenai Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1509 (Additional FTE responsibilities would include data submission, rebate tracking, auditing and validation of received rebates, and ongoing coordination with manufacturers vendors to resolve missing or delayed payments. We anticipate requiring between 1-2 additional FTE to manage these tasks.). Cook County Hospital District d/b/a North Shore Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1522 (NSH does not currently have sufficient staff to comply with a rebate-based system. Our pharmacy services are provided by two pharmacists who already operate at capacity. Even a modest increase in workload would be unsustainable. Recruiting additional qualified professionals in our rural location is extremely challenging and additional burdens could lead to staff attrition, further limiting available services.). University of Texas Medical Branch (UTMB), Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1532 Vandalia Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 7, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1543 (To operationalize a rebate model effectively, we would require at least two additional FTEs, diverting focus from existing compliance efforts and potentially increasing short-term compliance risk.). Hannibal Regional Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1554 (We anticipate needing two additional administrative specialists to manage the increased volume of data submission and dispute resolution. We would require at least six months of lead time to recruit and train these individuals in the specialized nuances of 340B compliance.). Indiana University Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 16, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1560 (Based on our preliminary internal assessment, IU Health expects that a full rebate model would require significant incremental FTE dedicated to rebate administration and reconciliation, representing substantial new annual personnel costs. These costs are not offset by any efficiency gain under the proposed model; they represent a net new administrative burden imposed on IU Healths operations.). Knox Community Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1564 (As previously stated, Knox Community Hospital would need to hire an additional 2 full-time employees to meet the demands of a Rebate pilot Program. This is because HRSAs estimate of 5 hours per week needed to navigate said program is ludicrously low for the suggested 25 total drugs. This program will require extensive monitoring which we cannot do with our current staff of one full-time 340B employee.). Jackson Hospital and Clinic, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1585 (We estimate the need for an additional two FTEs to analyze submission, track rebates, refile denials and reconcile deposits.). Vanderbilt Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1593 (The February 2026 ICR estimated that Covered Entities would experience an average weekly burden of five (5) hours of staff labor to comply with the Rebate Model. Our projection of hiring six (6) new full-time employees equates to a weekly burden of 240 hours, or 48 times greater than HRSAs estimate for ongoing burdens on Covered Entities. Expanding the Rebate Model from 10 drugs to 25 would increase the above estimated costs considerably.). Clark Fork Valley Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1601 (Clark Fork Valley Hospital, Plains, MT does not currently have the staff needed to comply with a Rebate Program. We currently struggle to fill vacancies throughout our hospital, from housekeepers to cooks to nurses aides to therapists to medical professionals. We cant even employ a full-time pharmacist.). Keck Medicine of the University of Southern California, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (HRSA-2026- 03042) (Apr. 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1609 (Keck Medicine of USC does not currently have the stac needed to comply with a Rebate Program. We estimate a 20% increase on FTEs, additional IT fees, and potentially a new third-party vendor will be needed to manage and track the rebates expected.). Nationwide Childrens Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1612 (Our covered entity would require one additional full-time equivalent employee to be added as a permanent employee. This FTE would be responsible for data submission, rebate dispute resolution, rebate reconciliation, and 340B program auditing.). Blessing Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1620 (At least 2 additional Full-Time Employees.). Kent County Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1624 (Kent Hospital does not currently have the staff needed to comply with a rebate program. Kent Hospital will need to hire and train an additional staff member in order to implement and maintain the 340B rebate model. It would take a minimum of 4-6 weeks to train a new employee to be proficient in the 340B rebate model and it would take 2-3 months to post a position, interview candidates, and onboard the employee. Kent Hospital expects it to take 3-4 months from the time the rebate model is announced to hire, onboard and train a new employee. Furthermore, additional new staff may be needed to be hired and trained, to comply with an entirely new, and more burdensome, model of reimbursement-so these estimates are conservative.) University Hospitals of Cleveland, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1651 (The organization at a minimum would have to hire 2 full-time employees to accurately track and submit rebate requests. If full-time employees were not hired, then a third-party administrator would need to be contracted to track rebates but a person at the organization would need to take 20 hours per week making sure that we are receiving the rebates and everything is correct with the third-party administrator. Total increase in administrative costs with either option would be at a minimum of $200,000 per year.). Abbeville Area Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1652 (The organization at a minimum would have to hire 2 full-time employees to accurately track and submit rebate requests. If full-time employees were not hired, then a third-party administrator would need to be contracted to track rebates but a person at the organization would need to take 20 hours per week making sure that we are receiving the rebates and everything is correct with the third-party administrator. Total increase in administrative costs with either option would be at a minimum of $200,000 per year.). Edgefield County Healthcare, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1655 (Abbeville Area Medical Center would possibly not be able to stock the necessary quantity of medications due to cash flow constraints caused by the entity not being able to afford to float the difference between the WAC and the upfront 340B price.). Freeman-Oak Hill Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 16, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1638 (Freeman's current estimate additional weekly administrative hours to participate successfully in the proposed 340B Rebate Model is not five (5), but rather eighty (80).). Unity Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1690 (We simply do not have the staff needed to comply with a Rebate Program. At small locations such as ours, each staff member necessarily wears multiple hatsvery few roles are dedicated to simply managing one job as larger organizations may. We cannot afford to maintain ever-increasing specialized staff and services to manage a program whose entire purpose is to help us maintain and expand for the good of the patient. With ongoing attacks from heightened regulations and manufacturer push backs, a highly trained role will be necessary to effectively manage the intricacies of the suggested program. Unity estimates a requirement of 1.0 to 2.0 specialized FTEs to manage daily data scrubbing, reconciliation, and the 10-day dispute window, not to mention the already rigorous standards required to maintain program compliance.). Neshoba County General Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1704 (As mentioned above, NCGH would require hiring an additional staff member to efficiently comply with and monitor rebates in the proposed program. Additional training and software would be needed to manage the program.). Appendix B Selected Comments Referencing Impact On Services, Patients, and Communities Graham County Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 5, 2026), https://www.regulations.gov/comment/HRSA-2025-0001-0012 (We will likely shut down our patient assistance program. This program allows us to directly pass 340B savings to patients.). Bitterroot Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0058 (A particularly serious concern for Bitterroot Health Daly Hospital is the impact of the rebate model on our SunRx cash-card program. Our SunRx cash-card program provides medications to patients at the 340B acquisition cost plus a small dispensing fee and generates no revenue for the hospital; it exists solely to improve medication affordability for patients who might otherwise forgo needed treatment.... This means the rebate model converts a zero-margin, patient-benefit program into a high-risk financial loss center for our rural hospital and directly threatens our ability to continue offering this critical access program.); id. (The 340B program enables Bitterroot Health Daly Hospital to sustain services that would otherwise be financially unsustainable in a rural market, including oncology infusion services; outpatient specialty clinics such as cardiology, orthopedics, urology, and behavioral health; medication access and assistance programs; chronic disease management and care coordination; and emergency and urgent care medication availability. The combination of new structural costs (startup and ongoing), large WAC exposure in our SunRx cash-card program, potential permanent rebate losses, and significant cashflow delays directly threatens the viability of these service lines.). Heart of America Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 5, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0037 (explaining that for only 10 medications: Heart of America Medical Center in Rugby, North Dakota uses our 340b funds to help support programs, such as cardiac rehab program and diabetes education. If 340b funds are reduced due to the Rebate Program, these patients may have to travel at least 60 miles to access programs such as these.). Iroquois Healthcare Alliance, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0018 (The cumulative effect of increased administrative costs, staffing burdens, and cash flow risk is straightforward: IHA member hospitals would have less money available for patient care. For hospitals that are already making difficult decisions about which services they can sustain, that reduction is not abstract. It translates directly into program cuts, service line reductions, and in some cases potential facility closures. Several IHA member hospitals use 340B savings to cross-subsidize services that are financially unsustainable on their own, including labor and delivery units, behavioral health programs, and outpatient clinics serving uninsured patients. These are services that exist because 340B savings make them possible. A rebate model that erodes those savings puts those services in jeopardy. In communities where IHA members are the only hospital within a reasonable distance, the consequences of service reductions are severe.). MyMichigan Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Feb. 25, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0044 (Our charity care program to support underinsured and uninsured patients will be severely impacted. The money spent on implementing and maintaining this rebate model will directly impact our ability to serve our most vulnerable community members.). Jefferson Community Health & Life, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0075 (listing numerous programs supported by 340B discounts at risk if a rebate mechanism is imposed, including a home health agency [that] allows patients to receive skilled care in their homes rather than traveling long distances for treatment, a long-term care facility [that] provides a home for up to 40 individuals who require skilled or long-term care, charity care, bad debt write-offs, reduced cost health screenings and community health education programs, hosting students for rural clinical health rotations, and supporting scholarships for students pursuing careers in health care.). Electra Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 19, 2026), at https://www.regulations.gov/comment/HRSA-2026-0001-0100 (The impact of these incremental costs will be devastating to our facility.... Clinical staff will have to be cut to increase the number of administrative staff required to track and recover rebates. Replacement of radios and purchase of a ventilator for our EMS service along with purchase of new monitors for the emergency room and inpatient services have all been paused in anticipation of this drain on cash flow.). Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) (March 19, 2026), https://www.regulations.gov/comment/HRSA-2026- 0001-0096 (Our organization, located in New York State, is comprised of a DSH, a CAH, and a SCH registration on the Office of Pharmacy Affairs 340B OPAIS.... Community give back programs, medication assistance programs and free or discounted medications would be in jeopardy of dissolution. 340B savings fund Oncology services, Behavioral Health, Mental Health and Harm Reduction services, Womens and Childrens programs and Heart Health clinics. When cash flow becomes unpredictable, the organization will need to assess the high overhead services: specifically Oncology and Specialty Pharmaceutical care.). Memorial Community Hospital and Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (March 9, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0105 (These added burdens would directly reduce the resources available for patient care in the Blair community. MCHs 340B savings are not excess revenue-they are essential to sustaining services that would otherwise be unavailable in a rural setting. Over the past several years, those savings have enabled us to expand oncology, infusion, and specialty services so patients can receive care close to home. Diverting those dollars to administrative overhead, IT systems, and cash-flow management would threaten the continued availability of these services and negatively affect patient access and outcomes.). Randolph Hospital District dba Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-0110 (In our most recent fiscal year, Memorial Hospital of Chester, IL, saved retail pharmacy customers $106,000 through loyalty pricing and pharmacy financial assistance programs. The complexities and pricing uncertainties of the proposed rebate model threaten to diminish these savings, potentially leading to non-compliance for patients who rely on this assistance to afford life-saving medications.). Wheeler Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 3, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-0305 (To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as mobile medical services and community events promoting blood pressure monitoring and other risk factors.... Our ability to provide medications at zero- pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,100 uninsured patients from rationing their insulin or heart medication.). Sierra View Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1389 (We also have been currently using our 340B savings to support our new OB Clinic at Sierra View. Without our 340B savings, our charity care, OB Clinic beginnings, and future rural health initiatives would be thwarted. Our community and the people we serve would be negatively affected by the rebate program.). Columbia Memorial Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 8, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1413 (Funds to support this additional FTE will come directly from the 340B resources that the hospital currently receives as a result of the savings. Funds that are currently used to support programs like the only inpatient maternity department in Clatsop County.). Knox Community Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042), https://www.regulations.gov/comment/HRSA-2026-0001-1564 (With these additional costs, our facility may have to delay or cancel capital improvements. Over the last few years, we have had to close our Allergy Clinic and Home Health Department due to cash flow and viability, and that is with 340B savings. We would not be able to offer the same amount of patient assistance as we currently do, and we would not be able to grow our patients access to affordable medications. Any patient assistance copay options funded by 340B savings we have planned are off the table, as we would be unable to offer discounts on medications for which we do not know if we will be paid. Our facility would not be able to attract and maintain specialist that benefit our rural community, meaning patients would have to travel up to an hour to find comparable services. Many of our patients struggle with transportation costs, and this would only make it harder for them to receive care.). Womans Hospital Foundation, dba Womans Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 10, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1408 (The 340B Program enables Womans Hospital to sustain essential services, including mobile mammography, perinatal mental health services, bedside prescription delivery, specialty gene therapy, HIV post-exposure prophylaxis, and care for low-income patients through Louisiana State University affiliated clinics. Policies that delay or reduce access to 340B savings will directly affect patient care in the communities we serve.). Baylor Scott & White Health, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1485 (The cumulative effect of the proposed rebate model requirements is a meaningful diversion of resources away from patient care. 340B program savings that currently support patient assistance programs, clinical operations, and pharmacy services would be reassigned to administrative compliance functions. Financial resources would be redirected toward staffing, consultants, and IT systems rather than community benefit programs and expanded access to care.). Adams County Memorial Hospital and Adams Community Pharmacy, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr, 13, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1508 (Adams Community Pharmacy serves patients who often struggle to afford medications, and we provide assistance that is not otherwise readily available in our community. If covered entities must absorb higher upfront drug costs and devote more resources to administrative rebate functions, fewer resources will remain available for medication assistance, care coordination, and other community benefit activities supported by 340B savings. The result could be reduced access to medications, delayed therapy, greater financial hardship for patients, and worsening health outcomes. Those harms would fall most heavily on rural, low income, elderly, and uninsured populations.). Hannibal Regional Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 15, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1554 (These administrative burdens will effectively reduce our 340B net benefit by an estimated 20-25% for these specific drugs, money that is currently used to subsidize our sliding-fee scale for uninsured patients in northeast Missouri.... The uncertainty of this pilot has already led us to pause a planned upgrade to our rural health clinic equipment.). Clark Fork Valley Hospital, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1601 (One of the more important and visible impacts of our program is our Cash Program which allows uninsured patients to benefit from the hospitals 340B pricing and receive a significant discount when obtaining prescriptions at our contract pharmacy. If we are unable to sustain our participation in 340B, that program will go away. At the same time, the numbers of uninsured people in our county are increasing due to the increased cost of insurance on the exchange and cutbacks to Medicaid eligibility.). CaroMont Regional Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 16, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1643 (CaroMont Regional Medical Center operates the only two acute care hospitals in Gaston County. Without the upfront, reliable savings from the 340b drug program, the hospital might have to close two of its most unprofitable services Labor and Delivery and Inpatient Behavioral Health. This would mean that patients would have to travel outside their home county to deliver their babies, putting themselves and their unborn child at higher risk. There currently is a shortage of behavioral health inpatient beds in North Carolina so closing our 63 licensed beds would cause further challenges for these patients to obtain the care they need when they are the most vulnerable and potentially a danger to themselves and those around them.). Johns Hopkins Health System, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 20, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1644 (The Johns Hopkins Hospital System partners with community members to identify the most important health needs in the community. For many years, 340B savings have contributed to addressing those and many other needs through innovative programs such as our Community Health Needs Assessment Small Grants program, supportive housing for drug treatment, wraparound social services for unhoused individuals through Marylands Assistance in Community Integration Services, and Break the Cycle Hospital Violence Intervention Program. For example, JHHs total Community Benefit activity in FY25 was $412 million, which is substantially more than JHHs estimated 340B savings of $285.7 million that same year. Additive costs and burdens to the 340B program could force Johns Hopkins to offer fewer comprehensive services, pause or terminate innovative programming, and reduce community support efforts.). University Hospitals of Cleveland, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1651 (The majority of outpatient pharmacy services, including clinical and financial support programs were funded mainly by 340B savings. The programs listed below would be significantly reduced or eliminated if a 340B rebate model is implemented: Financial assistance for patients unable to afford medication Medication access team- navigate insurance requirements/remove financial barriers Patient engagement team- outreach to manage refills and drive adherence to therapy Clinical services- pharmacists in providers offices, ongoing care management.); id. (The combination of increased administrative costs and decreased cash flow will likely lead to reductions in workforce and in the comprehensive services we currently offer to our community.). Abbeville Area Medical Center, Comment Letter on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) (Apr. 17, 2026), https://www.regulations.gov/comment/HRSA-2026-0001-1652 (To offset the upfront cost of drugs, we would be forced to scale back non-revenuegenerating but essential services, such as our medication management clinic that helps patients manage complex disease states such as diabetes and heart failure. Abbeville Area Medical Center in Abbeville, SC anticipates reducing clinic and pharmacy hours specifically impacting the working class. The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund appropriate clinic and pharmacy staff directly increasing wait times for patients and prescriptions. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured or underinsured patients from rationing their diabetic or heart medications such as insulin. This could cause needless admissions to the hospital that could cost government-sponsored Medicare plans more money in the long run.).
HRSA-2026-0001-1847Cornerstone Care2026-04-20T04:00Z45,328 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Mobile clinics supported by 340B savings serve remote patients who otherwise receive no care. Financial instability from a rebate model threatens the sustainability of these outreach services Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-1848Valley-Wide Health Systems2026-04-20T04:00Z50,493 chars
See attached file(s) 1 TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Valley-Wide Health Systems, Inc. DATE: Apr. 07, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Valley-Wide Health Systems, Inc. (Valley-Wide) provides primary and preventive care at 34 Sites located throughout 14 rural counties in Southern Colorado covering over 31,000 square land miles. Valley-Wides services include medical, dental, behavior health, pharmacy, physical therapy, and crisis services for 35,907 patients and a combined total of 142,872 visits yearly. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our one onsite and fourteen contract pharmacies. The 340B program is foundational to our organizations ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in our community and nationwide. Our community health center, and others across the country, would face staggering, detrimental impacts if the rebate model were to go into effect: We expect our upfront pharmacy costs to increase by 381% due to a rebate model, pulling dollars away from direct patient services, including behavioral health, oral healthcare, primary care, and clinical pharmacy services. We further expect the administrative costs to apply for and track the rebates to cost our organization 1 FTE and approximately $80,000 per year which will further strain our ability to serve our patients. For Valley-Wide, this financial turmoil and undermining of Congressional intent of the program to stretch scarce Federal resources as far as possible1 means directly and negatively: 1 18 340B House Report Legislative History. H.R. REP. 102-384(II). 2 Impacting the 29,000 patients who accessed affordable or free medications through our participation in the 340B program, Increasing the administrative costs by $80,000 for our 340B program, and Impeding our organizations ability to provide medical, dental, behavioral health and clinical pharmacy services to our 35,907 patients. Valley-Wide Health Systems requests the Health Resources and Services Administration (HRSA) exempt all CHCs, from any proposed 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026-03042). We oppose any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or burdens to the 340B program. Valley-Wide already had effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the programs intent and the fundamental responsibility of HRSA and HHS to administer this program in the interest of eligible Americans, and the nonprofit, local, trusted community providers who serve them. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is infeasible for our organization, and likely many others, to respond individually to each question. Therefore, we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. RFI Target Area 1: Costs to Covered Entities Financial impacts It is difficult to understate the cost to Valley-Wide if we are forced to administer our 340B program through a rebate model due to the lack of detail on exactly which drugs would be included. As a proxy, in 2025, if Valley-Wide had purchased the same volume of the ten drugs currently part of the Medicare Fair Price (MFP) drugs without the 340B discount, purchasing at the Wholesale Acquisition Cost (WAC) would have increased upfront costs by 6468%. Given that HRSA has not determined or announced the drugs in this potential 340B rebate model pilot program, the expected dollar increase in upfront cost that our CHC will have to account for may rise substantially, if and as more drugs are added to a 340B rebate model. To cover the upfront cost of purchasing drugs and operationalizing the rebate model, Valley-Wide anticipates needing to consider: Scaling back our non-revenue-generating, but essential, clinical services, like clinical pharmacy, enabling services, transportation, physical therapy, and mobile health unit. Reducing our clinic hours weekly, which impacts access to care for our patients who juggle long work hours and may only be able to come in for care during extended hours or weekends, 3 Diverting support staff and funds away from our clinical staff to manage the rebate model, and/or Reducing the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities. It is incomprehensible to impose a rebate model on local, nonprofit CHCs when two-thirds of CHCs in Colorado had negative or breakeven financial operating margins in 2024 and 2025 and it is anticipated a similar number of CHCs will face this financial challenge in 2026. As CHCs, we currently rely on our statutorily allowed savings from the 340B program to fill this gap and make us closer to whole; the burden of a rebate model will exacerbate these financial difficulties and, ultimately, will be insurmountable for our organization, and likely others across Colorado. Pricing impacts By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within our HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact Valley-Wides ability to offer patients steeply discounted medications at the point-of-sale by requiring us to purchase medications at the WAC pricing. We currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate the drugs price for the patient. The rebate model generates uncertainty about its impact on our CHCs ability to offer sliding fee discounts at the point of sale and forces us to estimate discounts without knowing whether or when a rebate will be paid. This exposes us to financial loss if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced, Colorados Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCs must then manually override to include the 340B price and, therefore, ensure proper billing. 2 42 U.S. Code 254b(k)(3)(G)(i) 4 Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi- billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions our organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs, like Valley-Wide, have on it by solely asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to our organization and patients, while we had 63,607 340B transactions in 2025, Valley-Wide was able to provide 1,564 uninsured or underinsured patients with 11,945 prescriptions at $102,198. Through the 340B program those patients were able to access over $287,176 in savings; for many of our patients, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. For example, we recently had a 56-year-old male who has an allergy to bee stings and needed an epinephrine auto-injector. He had not refilled his medication in over 3 years due to the cost even though his medication was expired. If he needed this potentially lifesaving medication, his expired pen might not have worked. His doctor called down and said he was quoted over $400 at another local pharmacy for this medication- is there anything we could do for him. At our pharmacy due to our 340B pricing, we were able offer the medication to this patient for only $25. He was extremely grateful for our services. Most of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be disproportionately affected. CHC patients rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, our patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. If a rebate model goes into effect, our pharmacy will need to evaluate the possibility of evolving our drug purchasing practices. With the expected upfront cost equating to the drugs WAC, it will not make fiscal sense to maintain a stock of certain medications. Valley-Wide has considered removing these medications from formulary, and switching patients to older less effective generics or shifting to purchase drugs only after the prescription has been made by the patients provider, requiring that patient to return to the clinic or their local pharmacy to pick it up. This fundamentally shifts CHCs away from the same day model of care we currently operate under, and which serves 5 patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model would require that would force our patients to return to the clinic or local pharmacy multiple times a week to pick up their prescription(s) is simply an unconscionable barrier and burden. Our pharmacy serves a large rural area in southern Colorado and many patients must travel over 90 miles round trip to pick up medications. This is just not feasible for our patients. Imposing a rebate model on CHCs would only serve to weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care each year. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, particularly those who are low-income and have insurance with high co-pays or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be harmful and burdensome. Valley-Wide currently employs the equivalent of 12 FTE of pharmacy, financial, IT, and other roles to manage our 340B program currently, at a cost of $6,657,608 per year. To sufficiently and appropriately track the submission of the data and the receipt of rebates across our in-house and contract pharmacies would require the hiring of at least 0.5 - 1 of FTE, further compiling onto our anticipated annual increase in costs. For every FTE we must hire to balance the program, we will no longer be able to fund patient support roles, like community health workers, clinical pharmacists, and other roles. Valley-Wide, like most community health centers, operates at break even or net negative margin and will not be able to sustain a substantial impact on the 340B program without making significant staffing and service adjustments. Across Colorado, CHCs have the shared concern that a rebate model would require more staff time and administrative cost than current 340B program management; CHCs estimated that managing a rebate model would require the hiring of additional staff to adequately manage, though many of these CHCs also are struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every hour that one of our pharmacists spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care our patients depend on. This diversion 6 of time and resources is not a minor inconvenience for Valley-Wide to navigate; it is a structural undermining of the care model that we depend on to serve our community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE toward managing a rebate model. Valley-Wide will also need to invest in technology infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already-strained operational capabilities. Managing the rebate model would require significant changes to our CHCs pharmacy software and third-party administrator workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard notifications, and design new, internal workflows; at least a $25,000 investment will be required to simply reach the baseline of compliance before a single rebate is ever received. Additionally, beyond implementation, third-party administrators and software vendors will likely charge ongoing service fees to maintain these complex rebate- tracking features. These would be permanent, recurring costs that further diminish our 340B savings. For CHCs, like Valley-Wide, that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide real-time, accurate information at the pharmacy counter, including updating our electronic health record and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring our organization to account for high upfront cost increases to pay software vendors for custom application programing interface builds and price file reconciliation tools. Additionally, for CHCs like Valley-Wide, that contract with pharmacy partners, the rebate model threatens the very existence and possibility of these contract arrangements. We currently contract with fourteen contract pharmacies, and it is likely that our third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to us, the covered entity, through increased per-claim fees. This number of contract pharmacies we partner with further compiles the number of rebate pathways our pharmacy staff need to track to ensure rebates are paid correctly and timely. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility our contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patient options of accessible, affordable locations to access their medications, 7 particularly in rural communities. This would further harm our patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. Valley-Wide can estimate that the total projected increase in expenses, solely to manage a rebate model, including labor, IT, and carrying costs, is estimated at $100,000 annually. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities Valley-Wide is very concerned by potential cash flow issues of the proposed rebate model. This is linked to the model requiring upfront purchase of the drugs, how quickly a rebated could be requested, and possible denials. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that Valley-Wide must forgo discounts or face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should we negotiate with wholesalers or banks to increase our borrowing limit. Valley-Wide relies on these discounts and terms outlined in contracts with our wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and exorbitant interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the need upfront will be crippling and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $656,000 to our expected $5,469,539 increase in upfront cost. Pharmaceutical wholesalers typically have a standard policy of 18% annual interest rate on all balances that have not been paid off by the 15th of the month following the purchase. Of course, this cost is only for the ten MFP drugs proposed in the first 340B rebate model pilot program; the cost will further increase if and as more drugs are added to a 340B rebate model. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers are actively advising CHCs to seek loans. We are also concerned that the rebate model will cause Valley-Wide to lose non-340B discounts we currently receive, which lower our drug spending significantly, including: 8 Loss of sub-ceiling discounts, which reduced the net cost of the ten pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate sub-ceiling discounts on 340B drugs on behalf of covered entities, like CHCs. By allowing a rebate model, HRSA thus eliminates the possibility for Apexus to negotiate discounts on the ten drugs that would likely be included in the pilot program, effectively transferring this discount from CHCs and their patients to the pharmaceutical manufacturer. Loss of prompt payment discounts, which lowers CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a prompt payment discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced Cost of Goods Sold discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. RFI Target Area 3: Rebate Denials Every dollar our organization pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. It is a dollar that our organization cannot rely on to provide health care services to our patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain our drug supply is not just unethical; it creates an environment of clinical instability with direct patient impacts. In our community, where the patients we serve rely on us to access care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to our communitys safety net and our patients health. If we are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. Valley-Wide urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. 9 If a rebate is denied, our CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative of 5% denial rate would result in a net annual loss of $273,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We respectfully request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. Any delay beyond the 10-day window creates an immediate cash flow crisis. We are particularly worried that the need to purchase drugs at full WAC will cause us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. 10 In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. We have concerns about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within ten days of both initial and corrected determinations. Beacon Channel Managements Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, we are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacons technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. We conduct monthly self-audits and conduct a yearly external audit. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model 11 would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts, and the Medicaid rebate routes to the state, as required by state statute. CHCs, like Valley-Wide, maintain up-to-date profiles in the Office of Pharmacy Affairs Information System (OPAIS), so our number of in-house and contract pharmacies are accurate. Additionally, we submit a modifier on each Medicaid claim, so the rebate is appropriate and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in our agreements with our third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. For Medicare, CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries about how to address the findings. As a result, Valley-Wides contract pharmacies have elected to block the MFP drugs from our contract pharmacy arrangements for all Medicare claims which has resulted in a significant loss in savings. Since Jan. 1, 2026, while we understand that manufacturers investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, Congress...constrained the [Health and Human Services] Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B 12 participation.3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored in their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. The 340B statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSAs statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 13 The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: we are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot 5 https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how-it-works-and-why-its- controversial 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxp.org/wp-content/uploads/2026/01/CSRxP-Margin-Analysis-Chart.pdf 14 shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.8 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. 8 H.R. REP. 102-384(II) 15 When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety net backbone, paying upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Acts statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot to address 340B and MFP deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more 16 than three decades and is essential to CHCs participation in the program and, most importantly, protect patient access to affordable medications. We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for Valley-Wide as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions or would like to know more about how Valley-Wide uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to Justin Hanel at hanelj@valley-widehealth.org. Justin Hanel, Pharm.D., 340B ACE Director of Pharmacy Valley Wide Pharmacy- 1710 1st Street, Alamosa, CO 81101 719-589-3633 Valley-WideHealth.org
HRSA-2026-0001-1849Mosaic Health System2026-04-20T04:00Z42,794 chars
See attached file(s) for Mosaic Health System (Heartland Regional Medical Center). We stand against the rebate program and have provided substantial reasoning and material financial impacts resulting from this rebate program consideration. 110543281.2 April 16, 2026 VIA Federal eRulemaking Portal: https://www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Heartland Regional Medical Center Dear Administrator Engels: Heartland Regional Medical Center (Heartland) appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program. The main question of the RFI is whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has supported the program and covered entities have relied on for decades. Heartland strongly opposes replacing the upfront discount model with a rebate-based approach. This comment provides operational and financial considerations demonstrating that a rebate model would impose significant costs and burdens on covered entities and reduce resources available to patient care. If HRSA pursues the rebate model further, it must adhere to the Administrative Procedures Act and provide a meaningful opportunity to covered entities to review and comment on a more fulsome proposal, as well as opportunity to review and comment on any manufacturer rebate model proposal. Likewise, must consider those comments and substantively respond prior to implementing a rebate model. 1. COSTS TO COVERED ENTITIES A. Current Administrative Costs Under the Upfront 340B Discount Heartlands 340B program processed approximately 310,000 contract pharmacy claims this past year and approximately 250,000 drugs units purchased in its mixed-used and child sites. To operate a compliant 340B program, Heartland invests in a significant number of resources, including staffing, IT systems, third party vendors, compliance activities, and labor hours. In addition to administrative costs, there are also administrative hours to consider with its current 340B program, including the current management of submission of data to 340B ESP. Heartland currently dedicates a significant amount of time to pull data from the various data sources and aggregate the data to meet the file requirements for 340B ESP. Manufacturer data submission requirements, including submissions via 340B ESP, will still be required in addition to the rebate submission. These submissions present an unlawful and unnecessary burden on covered entities that are entitled to the 340B ceiling price discount under the statute. Mosaic Health System 5325 Faraon Street St. Joseph, MO 64506 110543281.2 B. Administrative Costs Under a Potential 340B Rebate Program That Has Yet to be Defined. Any form of rebate program would require Heartland to shift significant resources and incur significant new administrative costs to access the 340B program. A shift to a rebate mechanism demands significant added resources, imposing considerable additional costs and burdens on our institutionand far above and beyond what we are experiencing now. Heartland has relied on HRSAs administration of the 340B program as an upfront discount program for decades. Forcing covered entities to incur additional costs, such as those below, to change the longstanding discount program to a rebate program simply because its in the interest of drug manufacturers is inconsistent with the 340B statute. Additional staffing needed to file, submit, audit, and reconcile rebate requests (excluding disputes of rebate denials): o Willow analyst - $118,500 o Data analyst - $145,580 o Contracts analyst - $87,825 o Accounting analyst - $110,810 o Compliance analyst - $87,825 o 340B Inventory analyst - $67,500 Additional wholesaler-related costs including dollars floated to manufacturers o Reduction in cost of goods sold (COGS) discount o Significant inventory carrying costs / loss of prompt pay discounts as Heartland will receive rebates after wholesale invoices are due and paid. For the 25 IRA drugs through 2027, an additional ~$42M cash on hand will be needed annually to purchase these drugs at wholesale acquisition cost with no clear path towards recovering those funds via rebates. Keep in mind the ~$42M increase in cost only pertains to 25 drugs. The number will grow exponentially if a potential rebate model includes additional products. Per the 340B statute, Congress never intended to have safety-net hospitals like Heartland incur an upfront expense of tens of millions of dollars just to access 340B. The 340B statute clearly indicates that manufacturers may not charge covered entities more than the 340B ceiling price. See 42 U.S.C. 256b(a)(1). o Rebates would increase covered entities financial burden and would be detrimental to patient care as monetary resources would be diverted to float money interest free to manufacturers for an unknown period. Decreased availability of funds could result in closure of behavioral health services, cancer care services, recently expanded womens health services within our Critical Access Hospital systems in a current womens health desert, patient access to high-cost drugs in CAH markets, reduce or eliminate patient assistance programs designated to the uninsured and under insured patient populations, reduce or eliminate discounts to cash paying patients. o Initially the number of drugs would be limited to these 25 drugs, however the potential for the number of drugs included could be exponential. Heartlands cost estimates provided herein will increase significantly if the number of drugs increases. Third-party administration/software provider (TPA) rebate module implementation cost for services/software needed to gather rebate data - $82,500 one-time implementation and $50,000 annual subscription Additional compliance and auditing expenses - $20,000 implementation and $82,000 ongoing plus additional reconciliation team Significant additional costs to audit and dispute rebate denials At least one dedicated FTE to audit, track, and research denials through the cumbersome dispute resolution process through 110543281.2 Beacon, which is not well outlined or transparent through Beacon. Further, Beacon and other manufacturer data collection systems clearly attempt to disclaim and limit liability Burden of medical claims submission o Additional time and resources to gather, prepare, aggregate, submit, track and audit medical claims-related rebate submissions. Including medical claims in a rebate model would significantly impact the resources involved as medical claims are often submitted days after the underlying drugs are administered and payors often impact how patients are classified (e.g., inpatient versus outpatient) and apply retrospective claim adjustments that impact whether the patient can be considered 340B-eligible. This complexity would require covered entities to backfill data to submit for 340B rebates as 340B status may not be known/assumed at the time of dispense o Additional reporting implementation to ensure pulling all data needed o Additional FTE to manage claims submission, auditing, and rebate reconciliation Overall, these incremental costs will impact more than just immediate cashflow. A rebate program would increase the need for cash on hand, thus impacting bond ratings, which would have a cascading effect on patient care. These costs would have long-term impacts on already financially strapped healthcare systems at a time when CEs are facing potential CMS reduced reimbursement to Medicare Part B payments, cuts to Medicaid programs, and continued rate pressure by pharmacy benefit managers and other payors. This data clearly demonstrates that HRSA should not require covered entities to participate in a rebate program that shifts tremendous cost and burden to non-profit hospitals for the benefit of for-profit drug manufacturers. C. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program As described above, a rebate program would require significant additional staffing. However, hiring for these positions is a challenge because it is a highly technical area, so if these positions are unable to be filled, current medical caregivers could be pulled from patient care duties to perform these burdensome administrative functions associated with a rebate program. This would include pharmacy technicians compounding lifesaving chemotherapies, pharmacy medication reconciliation technicians ensuring patients receive the right drug and the right time, finance analysts who would otherwise help patients with billing resolutions, and/or care managers who help with patient assistance programs. These positions would need to be permanent and would need additional FTEs if and or when more than the initial 25 drugs are moved into a rebate model. D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program A rebate program would require covered entities to either implement new or modified IT systems, software, or data infrastructure. This includes: Updated / new TPA rebate module New reporting and data pulls from our EMR Reconciliation tools to track rebate receipt/denials Compliance to ensure protection of PHI as Beacon and other manufacturer data systems require detailed, patient identifiable information to reconcile for rebate payment. Additionally, financial documentation is needed for account set up for Beacon. Dispute resolution workflow 110543281.2 Below are estimates of costs for these systems that would be required to implement a rebate model. TPA module cost - $82,500 implementation cost with $50,000 annual, recurring costs Drug procurement costs of an additional ~$42M annually with uncertainties of rebate, rebate timeliness, rebate denial Staffing model increase of FTEs outlined above would be recurring costs AI software running in tandem with current software to assist in audits $84,000 annual recurring costs E. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program As of right now, Heartland anticipates the following additional costs if a rebate model is implemented: Legal and compliance review Training Consulting services Reduction in patient care services offered These costs are significant for a covered entity like Heartland because we primarily serve rural communities, which results in providing a tremendous amount of financial assistance to patients. Heartland relies on the upfront 340B pricing to be able to provide this care to patients and keep its doors open to patients and continue expanding care to patients. HRSA must consider that rural providers may not be able to afford the resources needed to participate in a 340B rebate model. When Congress created the 340B statute, there was no indication that Congress intended to create a safety-net drug discount program that would be so unaffordable that it would not be feasible for hospitals to participate. Additionally, some larger, corporate contract pharmacy vendors had expressed the possibility of not participating in the 340B Program for the drugs that are part of the rebate program. This is significant concern for patients as they potentially could not have access to the necessary medications for their care and would result in an unlawful narrowing of the statutory 340B program. Lastly, an issue that has not been discussed in detail related to a rebate program is how this will impact Medicaid billing and reimbursement. Medicaid agencies are not equipped to handle changes from non- 340B to 340B drugs to handle the rebates and as a result, we anticipate and have seen at least one state Medicaid agency (California),1 require covered entities to hold claims back until a rebate is received, which adds an additional layer of cashflow disruption. Additionally, if rebates are denied and resolution of those denials take time, that could cause covered entities to face timely billing issues with Medicaid regulations. On the other hand, if covered entities submit these drugs to Medicaid agencies as 340B drugs and therefore the state agency does not get a rebate, but then the manufacturer denies the rebate, then neither the party receives the benefit intended by the Medicare Drug Rebate Program and the 340B Program, and the manufacturer receives a windfall. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES 1 CA DHCS, Claim Submission Requirements for HRSA 340B Rebate Model Pilot Drugs, https://mcweb.apps.prd.cammis.medi-cal.ca.gov/news/33779 (published Dec. 11, 2025). 110543281.2 Implementation of a rebate program would wildly disrupt the operations of the 340B Program as it has existed for the past 30 years and prevent covered entities from accomplishing the intent of the program. The current proposed 10 day from rebate submission window would greatly hinder cash flow. Heartland would be required to purchase all drugs at Wholesale Acquisition Cost (WAC), which is significantly more expensive than 340B pricing, and more than non-340B hospitals pay for drugs. It can be a difference of tens of millions of dollars per year. In addition to purchasing drugs at WAC pricing, Heartland would forego discount opportunities or face issues with payment terms related to vendors such as contract pharmacies and wholesalers. Without disclosing confidential information, below are examples of payment terms that would be impacted by a rebate program. Wholesalers with 10-day payment terms, some of which apply a discount if paid prior to 10th & 25th of each month. Wholesalers also apply late fees if not paid timeline based on their own formulas Wholesalers may also charge a percentage of total due as a late charge. 3. REBATE DENIALS Heartland urges HRSA to prohibit manufacturers from denying rebates if a rebate program is implemented. HRSA has the authority and has exercised that authority to develop an administrative dispute resolution process, so manufacturers should not be permitted to skirt that process and shift the responsibility/burden on covered entities, many of whom do not have the resources to commit to file ongoing ADR claims for rebates that are denied. If a manufacturer believes it has a basis to deny a rebate, then they should following existing good faith inquiry and ADR processes, but the rebate should be paid in advance. Again, we simply do not think there is a rational basis for upending the statutory 340B discount program that covered entities have relied on for decades to convert it to a backend rebate program that will shift tremendous burden and cost to covered entities. If HRSA implements a rebate program that permits manufacturers to deny rebates, then there should be clear timelines and requirements on how to handle denials and appeals. Specifically, as it stands right now with manufacturers rebate plans publicly posted during HRSAs prior rebate program attempt, covered entities cannot submit claims outside of a 45-day window to get rebate dollars, however manufacturers are not restricted to a time limit to claw back rebates. A denial should be able to be fixed and reprocessed with updated information and not deemed duplicate. However, original rebate information relayed from Beacon indicated these could not be resubmitted and this process had to go through dispute resolution with the manufacturer which is not a timely process, further extending the period between drug acquisition and rebate. If HRSA continues to believe that ADR is the path forward, then there should be an expedited process so that covered entities do not continue to face the financial burden of manufacturers manipulation of the 340B Program. 4. DATA COLLECTION BY COVERED ENTITIES Heartlands current 340B program management and data collection is already complex given the number of software systems involved. Layering on yet another, more complex data-driven rebate model would only increase the administrative burden and require Heartland to reallocate resources from patients to maintain its 340B Program. This is because the requirements for a rebate program (based on Beacon) data submission are more extensive than current manufacturer vendor data requirements (such as 340B ESPs process). These efforts and changes to data collection would increase administrative burden. 110543281.2 340B ESP and Kalderos data are focused on pharmacy claims to verify contract pharmacy designations for pricing. The errors that currently plague 340B ESP reporting and inability to correct data to restore pricing is overly burdensome now and the data requirements for the rebate model are even more granular. Currently no medical claims data is required so the addition of these claims will require a different data pull to include physician ID, claim line numbers and unique line identifiers, health plan names and ID, HCPCS codes and modifiers, unit of measure. In addition, BIN, PCN and service provider ID information is needed for pharmacy dispenses submitted in Beacon. Additionally, Beacon requires banking information and business documentation not required by 340B ESP or Kalderos. Both differing data sets will still be required to be submitted to each 340B ESP/Kalderos and Beacon because they are different barriers for covered entities to access its statutorily entitled 340B pricing (one for contract pharmacy designations and one to receive rebates). Lastly, HRSA must acknowledge and address that the 340B data collection and rebate systems used by manufacturers have draconian terms and conditions that are unreasonably harmful to covered entities for the benefit of the vendors and their manufacturer clients. HRSA should be invested and involved in the software used to collect data because the software systems are creating terms and conditions that are conflicting with the 340B statute and HRSAs guidance, thus dismissing HRSAs authority to oversee the 340B Program. 5. MANUFACTURER EFFORTS TO AVOID DUPLICATE DISCOUNTS If a rebate program is implemented, responsibility for preventing duplicate discounts must shift from covered entities to manufacturers. Auditing covered entities for diversion and duplicate discounts would be inappropriate since manufacturers will have full control of defining a patient and determining if a rebate should be paid. As such, HRSA should increase the number of audits conducted on manufacturers to ensure compliance with the 340B Program. Moreover, manufacturers shall not be permitted to audit covered entities under the guise that they believe duplicate discounts occur because manufacturers will have full control of preventing a duplicate discount if a rebate program is implemented. At the very least, auditing standards and practices must be changed because it will no longer be possible for covered entities to prevent duplicate discounts. 6. REQUIRED REPORTING Heartland is vehemently opposed to HRSA implementing a rebate program. However, if a rebate model is permitted, manufacturers must be required to report to HRSA or face consequences such as civil monetary penalties, exclusion from the rebate program, and termination of the manufacturers PPA (including termination from participation in Medicare and Medicaid). HRSA has clear authority to terminate the PPA. The agency needs to exercise that option to prevent further manufacturer actions that are inconsistent with the 340B statute. Failure to pay rebates (i.e., failure to provide the 340B ceiling price) should result in an immediate termination. It is also critical that manufacturers are held to enhanced transparency measures. Covered entities continue to face unwarranted scrutiny. If a rebate program is permitted, we urge HRSA to shift that scrutiny by implementing monthly reporting of denied rebates, including amount denied, for HRSA to review. Manufacturers should be required to specifically report why they determined the patient is not a patient of the covered entity instead of using a blanket denial reason that the patient is not 340B-eligible patient. Additionally, to increase transparency for the public, manufacturers should be required to report the number of rebates submitted, number of rebates denied, and dollar amount of rebates denied as a minimum that is 110543281.2 published by HRSA. Manufacturers should also be required to report the 340B dollars provided to covered entities prior to the implementation and after implementation of a rebate model. It is important that covered entities, patients, Congress and the general public see how manufacturers are manipulating the 340B Program via a rebate program for their own financial gain. 7. THE COSTS OF A REBATE MODEL FAR OUTWEIGH ANY SPECULATIVE BENEFITS It is Heartlands perspective that a rebate model offers no material benefit, and the costs of implementing such a program far outweighs any speculative benefit. Instead, a rebate model shifts oversight from HRSA to manufacturers while directly harming covered entities and patients. We respectfully request that HRSA abandon its effort to convert the 340B program from an upfront discount program to a costly backend rebate program. Respectfully submitted, Robert M Ritchey, RPh, MBA President / Chief Pharmacy Officer 816.271.8842 O / 816.271.8812 F 5325 Faraon Street, St. Joseph, MO 64506 Robert.Ritchey@mymlc.com April 16, 2026 VIA Federal eRulemaking Portal: https://www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: Heartland Regional Medical Center (Heartland) appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program. The main question of the RFI is whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has supported the program and covered entities have relied on for decades. Heartland strongly opposes replacing the upfront discount model with a rebate-based approach. This comment provides operational and financial considerations demonstrating that a rebate model would impose significant costs and burdens on covered entities and reduce resources available to patient care. If HRSA pursues the rebate model further, it must adhere to the Administrative Procedures Act and provide a meaningful opportunity to covered entities to review and comment on a more fulsome proposal, as well as opportunity to review and comment on any manufacturer rebate model proposal. Likewise, must consider those comments and substantively respond prior to implementing a rebate model. COSTS TO COVERED ENTITIES Current Administrative Costs Under the Upfront 340B Discount Heartlands 340B program processed approximately 310,000 contract pharmacy claims this past year and approximately 250,000 drugs units purchased in its mixed-used and child sites. To operate a compliant 340B program, Heartland invests in a significant number of resources, including staffing, IT systems, third party vendors, compliance activities, and labor hours. In addition to administrative costs, there are also administrative hours to consider with its current 340B program, including the current management of submission of data to 340B ESP. Heartland currently dedicates a significant amount of time to pull data from the various data sources and aggregate the data to meet the file requirements for 340B ESP. Manufacturer data submission requirements, including submissions via 340B ESP, will still be required in addition to the rebate submission. These submissions present an unlawful and unnecessary burden on covered entities that are entitled to the 340B ceiling price discount under the statute. Administrative Costs Under a Potential 340B Rebate Program That Has Yet to be Defined. Any form of rebate program would require Heartland to shift significant resources and incur significant new administrative costs to access the 340B program. A shift to a rebate mechanism demands significant added resources, imposing considerable additional costs and burdens on our institutionand far above and beyond what we are experiencing now. Heartland has relied on HRSAs administration of the 340B program as an upfront discount program for decades. Forcing covered entities to incur additional costs, such as those below, to change the longstanding discount program to a rebate program simply because its in the interest of drug manufacturers is inconsistent with the 340B statute. Additional staffing needed to file, submit, audit, and reconcile rebate requests (excluding disputes of rebate denials): Willow analyst - $118,500 Data analyst - $145,580 Contracts analyst - $87,825 Accounting analyst - $110,810 Compliance analyst - $87,825 340B Inventory analyst - $67,500 Additional wholesaler-related costs including dollars floated to manufacturers Reduction in cost of goods sold (COGS) discount Significant inventory carrying costs / loss of prompt pay discounts as Heartland will receive rebates after wholesale invoices are due and paid. For the 25 IRA drugs through 2027, an additional ~$42M cash on hand will be needed annually to purchase these drugs at wholesale acquisition cost with no clear path towards recovering those funds via rebates. Keep in mind the ~$42M increase in cost only pertains to 25 drugs. The number will grow exponentially if a potential rebate model includes additional products. Per the 340B statute, Congress never intended to have safety-net hospitals like Heartland incur an upfront expense of tens of millions of dollars just to access 340B. The 340B statute clearly indicates that manufacturers may not charge covered entities more than the 340B ceiling price. See 42 U.S.C. 256b(a)(1). Rebates would increase covered entities financial burden and would be detrimental to patient care as monetary resources would be diverted to float money interest free to manufacturers for an unknown period. Decreased availability of funds could result in closure of behavioral health services, cancer care services, recently expanded womens health services within our Critical Access Hospital systems in a current womens health desert, patient access to high-cost drugs in CAH markets, reduce or eliminate patient assistance programs designated to the uninsured and under insured patient populations, reduce or eliminate discounts to cash paying patients. Initially the number of drugs would be limited to these 25 drugs, however the potential for the number of drugs included could be exponential. Heartlands cost estimates provided herein will increase significantly if the number of drugs increases. Third-party administration/software provider (TPA) rebate module implementation cost for services/software needed to gather rebate data - $82,500 one-time implementation and $50,000 annual subscription Additional compliance and auditing expenses - $20,000 implementation and $82,000 ongoing plus additional reconciliation team Significant additional costs to audit and dispute rebate denials At least one dedicated FTE to audit, track, and research denials through the cumbersome dispute resolution process through Beacon, which is not well outlined or transparent through Beacon. Further, Beacon and other manufacturer data collection systems clearly attempt to disclaim and limit liability Burden of medical claims submission Additional time and resources to gather, prepare, aggregate, submit, track and audit medical claims-related rebate submissions. Including medical claims in a rebate model would significantly impact the resources involved as medical claims are often submitted days after the underlying drugs are administered and payors often impact how patients are classified (e.g., inpatient versus outpatient) and apply retrospective claim adjustments that impact whether the patient can be considered 340B-eligible. This complexity would require covered entities to backfill data to submit for 340B rebates as 340B status may not be known/assumed at the time of dispense Additional reporting implementation to ensure pulling all data needed Additional FTE to manage claims submission, auditing, and rebate reconciliation Overall, these incremental costs will impact more than just immediate cashflow. A rebate program would increase the need for cash on hand, thus impacting bond ratings, which would have a cascading effect on patient care. These costs would have long-term impacts on already financially strapped healthcare systems at a time when CEs are facing potential CMS reduced reimbursement to Medicare Part B payments, cuts to Medicaid programs, and continued rate pressure by pharmacy benefit managers and other payors. This data clearly demonstrates that HRSA should not require covered entities to participate in a rebate program that shifts tremendous cost and burden to non-profit hospitals for the benefit of for-profit drug manufacturers. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program As described above, a rebate program would require significant additional staffing. However, hiring for these positions is a challenge because it is a highly technical area, so if these positions are unable to be filled, current medical caregivers could be pulled from patient care duties to perform these burdensome administrative functions associated with a rebate program. This would include pharmacy technicians compounding lifesaving chemotherapies, pharmacy medication reconciliation technicians ensuring patients receive the right drug and the right time, finance analysts who would otherwise help patients with billing resolutions, and/or care managers who help with patient assistance programs. These positions would need to be permanent and would need additional FTEs if and or when more than the initial 25 drugs are moved into a rebate model. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program A rebate program would require covered entities to either implement new or modified IT systems, software, or data infrastructure. This includes: Updated / new TPA rebate module New reporting and data pulls from our EMR Reconciliation tools to track rebate receipt/denials Compliance to ensure protection of PHI as Beacon and other manufacturer data systems require detailed, patient identifiable information to reconcile for rebate payment. Additionally, financial documentation is needed for account set up for Beacon. Dispute resolution workflow Below are estimates of costs for these systems that would be required to implement a rebate model. TPA module cost - $82,500 implementation cost with $50,000 annual, recurring costs Drug procurement costs of an additional ~$42M annually with uncertainties of rebate, rebate timeliness, rebate denial Staffing model increase of FTEs outlined above would be recurring costs AI software running in tandem with current software to assist in audits $84,000 annual recurring costs Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program As of right now, Heartland anticipates the following additional costs if a rebate model is implemented: Legal and compliance review Training Consulting services Reduction in patient care services offered These costs are significant for a covered entity like Heartland because we primarily serve rural communities, which results in providing a tremendous amount of financial assistance to patients. Heartland relies on the upfront 340B pricing to be able to provide this care to patients and keep its doors open to patients and continue expanding care to patients. HRSA must consider that rural providers may not be able to afford the resources needed to participate in a 340B rebate model. When Congress created the 340B statute, there was no indication that Congress intended to create a safety-net drug discount program that would be so unaffordable that it would not be feasible for hospitals to participate. Additionally, some larger, corporate contract pharmacy vendors had expressed the possibility of not participating in the 340B Program for the drugs that are part of the rebate program. This is significant concern for patients as they potentially could not have access to the necessary medications for their care and would result in an unlawful narrowing of the statutory 340B program. Lastly, an issue that has not been discussed in detail related to a rebate program is how this will impact Medicaid billing and reimbursement. Medicaid agencies are not equipped to handle changes from non-340B to 340B drugs to handle the rebates and as a result, we anticipate and have seen at least one state Medicaid agency (California), require covered entities to hold claims back until a rebate is received, which adds an additional layer of cashflow disruption. Additionally, if rebates are denied and resolution of those denials take time, that could cause covered entities to face timely billing issues with Medicaid regulations. On the other hand, if covered entities submit these drugs to Medicaid agencies as 340B drugs and therefore the state agency does not get a rebate, but then the manufacturer denies the rebate, then neither the party receives the benefit intended by the Medicare Drug Rebate Program and the 340B Program, and the manufacturer receives a windfall. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES Implementation of a rebate program would wildly disrupt the operations of the 340B Program as it has existed for the past 30 years and prevent covered entities from accomplishing the intent of the program. The current proposed 10 day from rebate submission window would greatly hinder cash flow. Heartland would be required to purchase all drugs at Wholesale Acquisition Cost (WAC), which is significantly more expensive than 340B pricing, and more than non-340B hospitals pay for drugs. It can be a difference of tens of millions of dollars per year. In addition to purchasing drugs at WAC pricing, Heartland would forego discount opportunities or face issues with payment terms related to vendors such as contract pharmacies and wholesalers. Without disclosing confidential information, below are examples of payment terms that would be impacted by a rebate program. Wholesalers with 10-day payment terms, some of which apply a discount if paid prior to 10th & 25th of each month. Wholesalers also apply late fees if not paid timeline based on their own formulas Wholesalers may also charge a percentage of total due as a late charge. REBATE DENIALS Heartland urges HRSA to prohibit manufacturers from denying rebates if a rebate program is implemented. HRSA has the authority and has exercised that authority to develop an administrative dispute resolution process, so manufacturers should not be permitted to skirt that process and shift the responsibility/burden on covered entities, many of whom do not have the resources to commit to file ongoing ADR claims for rebates that are denied. If a manufacturer believes it has a basis to deny a rebate, then they should following existing good faith inquiry and ADR processes, but the rebate should be paid in advance. Again, we simply do not think there is a rational basis for upending the statutory 340B discount program that covered entities have relied on for decades to convert it to a backend rebate program that will shift tremendous burden and cost to covered entities. If HRSA implements a rebate program that permits manufacturers to deny rebates, then there should be clear timelines and requirements on how to handle denials and appeals. Specifically, as it stands right now with manufacturers rebate plans publicly posted during HRSAs prior rebate program attempt, covered entities cannot submit claims outside of a 45-day window to get rebate dollars, however manufacturers are not restricted to a time limit to claw back rebates. A denial should be able to be fixed and reprocessed with updated information and not deemed duplicate. However, original rebate information relayed from Beacon indicated these could not be resubmitted and this process had to go through dispute resolution with the manufacturer which is not a timely process, further extending the period between drug acquisition and rebate. If HRSA continues to believe that ADR is the path forward, then there should be an expedited process so that covered entities do not continue to face the financial burden of manufacturers manipulation of the 340B Program. DATA COLLECTION BY COVERED ENTITIES Heartlands current 340B program management and data collection is already complex given the number of software systems involved. Layering on yet another, more complex data-driven rebate model would only increase the administrative burden and require Heartland to reallocate resources from patients to maintain its 340B Program. This is because the requirements for a rebate program (based on Beacon) data submission are more extensive than current manufacturer vendor data requirements (such as 340B ESPs process). These efforts and changes to data collection would increase administrative burden. 340B ESP and Kalderos data are focused on pharmacy claims to verify contract pharmacy designations for pricing. The errors that currently plague 340B ESP reporting and inability to correct data to restore pricing is overly burdensome now and the data requirements for the rebate model are even more granular. Currently no medical claims data is required so the addition of these claims will require a different data pull to include physician ID, claim line numbers and unique line identifiers, health plan names and ID, HCPCS codes and modifiers, unit of measure. In addition, BIN, PCN and service provider ID information is needed for pharmacy dispenses submitted in Beacon. Additionally, Beacon requires banking information and business documentation not required by 340B ESP or Kalderos. Both differing data sets will still be required to be submitted to each 340B ESP/Kalderos and Beacon because they are different barriers for covered entities to access its statutorily entitled 340B pricing (one for contract pharmacy designations and one to receive rebates). Lastly, HRSA must acknowledge and address that the 340B data collection and rebate systems used by manufacturers have draconian terms and conditions that are unreasonably harmful to covered entities for the benefit of the vendors and their manufacturer clients. HRSA should be invested and involved in the software used to collect data because the software systems are creating terms and conditions that are conflicting with the 340B statute and HRSAs guidance, thus dismissing HRSAs authority to oversee the 340B Program. MANUFACTURER EFFORTS TO AVOID DUPLICATE DISCOUNTS If a rebate program is implemented, responsibility for preventing duplicate discounts must shift from covered entities to manufacturers. Auditing covered entities for diversion and duplicate discounts would be inappropriate since manufacturers will have full control of defining a patient and determining if a rebate should be paid. As such, HRSA should increase the number of audits conducted on manufacturers to ensure compliance with the 340B Program. Moreover, manufacturers shall not be permitted to audit covered entities under the guise that they believe duplicate discounts occur because manufacturers will have full control of preventing a duplicate discount if a rebate program is implemented. At the very least, auditing standards and practices must be changed because it will no longer be possible for covered entities to prevent duplicate discounts. REQUIRED REPORTING Heartland is vehemently opposed to HRSA implementing a rebate program. However, if a rebate model is permitted, manufacturers must be required to report to HRSA or face consequences such as civil monetary penalties, exclusion from the rebate program, and termination of the manufacturers PPA (including termination from participation in Medicare and Medicaid). HRSA has clear authority to terminate the PPA. The agency needs to exercise that option to prevent further manufacturer actions that are inconsistent with the 340B statute. Failure to pay rebates (i.e., failure to provide the 340B ceiling price) should result in an immediate termination. It is also critical that manufacturers are held to enhanced transparency measures. Covered entities continue to face unwarranted scrutiny. If a rebate program is permitted, we urge HRSA to shift that scrutiny by implementing monthly reporting of denied rebates, including amount denied, for HRSA to review. Manufacturers should be required to specifically report why they determined the patient is not a patient of the covered entity instead of using a blanket denial reason that the patient is not 340B-eligible patient. Additionally, to increase transparency for the public, manufacturers should be required to report the number of rebates submitted, number of rebates denied, and dollar amount of rebates denied as a minimum that is published by HRSA. Manufacturers should also be required to report the 340B dollars provided to covered entities prior to the implementation and after implementation of a rebate model. It is important that covered entities, patients, Congress and the general public see how manufacturers are manipulating the 340B Program via a rebate program for their own financial gain. THE COSTS OF A REBATE MODEL FAR OUTWEIGH ANY SPECULATIVE BENEFITS It is Heartlands perspective that a rebate model offers no material benefit, and the costs of implementing such a program far outweighs any speculative benefit. Instead, a rebate model shifts oversight from HRSA to manufacturers while directly harming covered entities and patients. We respectfully request that HRSA abandon its effort to convert the 340B program from an upfront discount program to a costly backend rebate program. Respectfully submitted, Robert M Ritchey, RPh, MBA President / Chief Pharmacy Officer 816.271.8842 O / 816.271.8812 F 5325 Faraon Street, St. Joseph, MO 64506 Robert.Ritchey@mymlc.com
HRSA-2026-0001-1850Multi-Cultural Health Evaluation Delivery System2026-04-20T04:00Z4,273 chars
Multi-Cultural Health Evaluation Delivery System, Inc. (MHEDS) Erie, Pennsylvania Re: 340B Rebate Model Pilot Program Concerns from a Community Health Provider in Northwest Pennsylvania On behalf of Multi-Cultural Health Evaluation Delivery System, Inc. (MHEDS), I write to share serious concerns regarding proposals to move the 340B Program toward a rebate-based payment model. MHEDS is a community-based health provider serving Erie and the surrounding region. We care for working families, seniors, children, Medicaid beneficiaries, uninsured residents, and patients who face transportation, financial, and provider access barriers. We also support patients from rural and underserved communities across Northwest Pennsylvania who often have limited healthcare options close to home. The 340B Program has long helped providers like ours stretch limited resources, improve access, and deliver more care without asking taxpayers for new spending. A rebate model would undermine that mission. 1. A Rebate Model Would Hurt Cash Flow for Frontline Providers Under the current model, eligible providers can access discounted drug pricing upfront. That allows scarce dollars to go directly into patient care. Under a rebate model, providers would first pay full price and wait to be reimbursed later. For large hospital systems, this may be manageable. For community-based providers and independent safety-net organizations, it creates real financial pressure. Delayed payments can mean: * Less flexibility to serve patients * Slower expansion of needed services * Greater reliance on lines of credit * Increased financial uncertainty * Fewer dollars available for care today Healthcare providers should be focused on treating patientsnot financing delayed reimbursements. 2. It Creates More Bureaucracy, Not Better Care A rebate system would require additional claims processing, payment reconciliation, dispute resolution, reporting, software changes, and administrative oversight. That means more time spent on paperwork and less time spent on patients. At a time when healthcare organizations already face staffing shortages, inflationary pressure, and rising demand, adding new administrative layers is the wrong direction. 3. Rural and Underserved Communities Could Feel the Impact Most Many communities in Northwest Pennsylvania already struggle with: * Limited provider availability * Transportation barriers * Long wait times * Difficulty accessing specialty care * Fewer local healthcare options When providers lose flexibility or face delayed funding, smaller communities often feel it first. Programs that work in large metro systems do not always translate well to rural regions or smaller community providers. 4. 340B Helps Deliver Real Value Without Expanding Government Spending For organizations like MHEDS, 340B savings help support services such as: * Affordable medications * Preventive care * Care coordination * Chronic disease management * Behavioral health integration * Transportation support * Expanded clinic access * Outreach to patients who delay care due to cost These are practical, community-level solutions that reduce downstream costs and improve health outcomes. 5. If Changes Are Considered, Community Providers Must Be Protected Any future reforms should prioritize: * Simple administration * Prompt payment requirements * Protection for small and mid-sized providers * Rural access considerations * Optional participation * Clear appeals rights * Transparency and accountability Providers should not bear new financial risk for the sake of a more complicated payment model. Conclusion The 340B Program works because it helps local providers stretch resources and serve more patients efficiently. A rebate model risks replacing a practical solution with delays, bureaucracy, and added financial strain. We respectfully ask you to support policies that strengthen community healthcare providers, preserve access in rural and underserved areas, and ensure resources are used where they belong: in patient care. Thank you for your consideration and for your service to Pennsylvania. Sincerely, Alivia Haibach Chief Executive Officer Multi-Cultural Health Evaluation Delivery System, Inc. Erie, Pennsylvania
HRSA-2026-0001-1851Cornerstone Care, Inc.2026-04-20T04:00Z51,139 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing in my role as 340B Pharmacy Program Administrator for Cornerstone Care, a nonprofit community health center serving more than 23,000 patients annually across Greene, Washington, Fayette, and southern Allegheny Counties. Based on a detailed operational and financial analysis of our pharmacy program, I am deeply concerned that the proposed 340B Rebate Model Pilot would impose administrative and financial burdens that Cornerstone Care cannot reasonably absorb without reducing services for the patients who rely on us. Administrative Impact on Cornerstone Care Cornerstone Care already operates a highly regulated and rigorously compliant 340B program, including eligibility verification, internal audits, HRSA Operational Site Visits, contract pharmacy oversight, and annual UDS reporting. The proposed rebate model would layer entirely new and duplicative administrative requirements onto an already resource-constrained program. To comply with manufacturer-driven rebate requirements, Cornerstone Care would be required to: Hire approximately 2.7 additional full-time equivalent staff, resulting in an estimated $351,192.82 in new annual personnel costs dedicated solely to rebate reporting, reconciliation, denial management, and dispute resolution; Invest in new or upgraded pharmacy software, data-capture systems, and third-party administrator workflows, along with increased reliance on external consultants, legal support, and reconciliation vendors; Manage multiple, non-standardized manufacturer submission requirements, timelines, and validation rules without access to real-time 340B pricing data. These changes would significantly increase administrative workload while diverting staff time and financial resources away from patient services. 2 Financial and Cash-Flow Consequences Equally critical is the financial risk posed by requiring Cornerstone Care to purchase medications upfront at full Wholesale Acquisition Cost (WAC) and wait for retrospective rebate payments. Based on our purchasing data, Cornerstone Care estimates that we would need to spend approximately $2.42 million annually upfront to purchase drugs included in the pilot compared to $633,544.83 under current 340B pricing, a 281.64% increase in required upfront capital. This shift would: Tie up limited operating cash for 4085 days between purchase and rebate receipt, depending on inventory turnover and data-submission cadence; Increase the risk of exceeding wholesaler credit limits, potentially delaying or halting our ability to procure medications; Result in the loss of prompt-pay and volume discounts, with an estimated $249,258.88 annually in opportunity costs related to rebate denials, delays, and lost discounts; Expose Cornerstone Care to direct losses when rebates are denied or paid inconsistently losses we cannot offset without reducing services. Even conservative denial estimates translate into six-figure annual losses. Impact on Medication Sliding Fee Discounts The proposed rebate model would severely disrupt entity-owned and in-house pharmacies, which depend on the up-front 340B acquisition cost to operate effectively and to meet sliding fee discount requirements. By forcing pharmacies to dispense medications at full Wholesale Acquisition Cost without up-front 340B discounts, the model eliminates the ability to apply accurate discounts at the point of sale, increasing the risk of compliance errors and patient mispricing. Because Cornerstone Care is legally required to provide discounted or zero-pay medications to low-income patients, the loss of our up-front 340B discount would either force us to absorb unsustainable losses or remove high-cost medications from our in-house pharmacy, directly reducing access to affordable care for uninsured and underinsured patients. Neutral Claims-Clearinghouse Model Recommendation For Cornerstone Care, the proposed 340B Rebate Model is not a theoretical policy changeit is a direct operational and financial threat. The model would function as an interest-free loan from our health center to manufacturers, while forcing us to absorb new staffing costs, IT investments, cash-flow instability, and unrecoverable losses. These pressures would inevitably require reductions in pharmacy services, sliding-fee medication assistance, and other essential, non-revenue-generating programs supported by 340B savings. Cornerstone Care is currently piloting a neutral claims-clearinghouse model, and we urge HRSA to consider this model as an alternative to a rebate. 3 For these reasons, I strongly urge HRSA to exempt Cornerstone Care and other community health centers from the 340B Rebate Model Pilot and to preserve the upfront discount structure that allows safety-net providers to maintain access to affordable medications for underserved patients. Thank you for the opportunity to share Cornerstone Cares perspective on this critical issue. Sincerely, Nicole Coneybeer, CPhT Pharmacy Program Administrator 4 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 5 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 6 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 7 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 8 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 9 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 10 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 12 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 13 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 14 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 15 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 16 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 17 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 04.20.2026_340B NICOLE Rebate Model Ltr Final Audit Report 2026-04-20 Created: 2026-04-20 By: Katie Sill (ksill@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAAFYctEMhzOWFRjpVp83nOxFrXIbkL4hup "04.20.2026_340B NICOLE Rebate Model Ltr" History Document created by Katie Sill (ksill@cornerstonecare.com) 2026-04-20 - 1:43:46 PM GMT Document emailed to Nicole Coneybeer (nconeybeer@cornerstonecare.com) for signature 2026-04-20 - 1:43:51 PM GMT Email viewed by Nicole Coneybeer (nconeybeer@cornerstonecare.com) 2026-04-20 - 2:02:02 PM GMT Document e-signed by Nicole Coneybeer (nconeybeer@cornerstonecare.com) Signature Date: 2026-04-20 - 2:02:37 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 2:02:37 PM GMT
HRSA-2026-0001-1852Monticello Drugs, Inc2026-04-20T04:00Z32,468 chars
See attached file(s) Page 1 of 7 Your Hometown Pharmacy To: Thomas J Engles Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 From: J. Ross Hays, BSHA, CPhT-Adv. Director of Pharmacy Contract Services Monticello Drugs, Inc 679 W. Washington Street Monticello, GA 31064 Subject: HHS Docket No. HRSA-2026-03042 Introduction: I am writing to you on behalf of Monticello Drugs, Inc., and the economically disadvantaged population that we serve as a 340B contract pharmacy. Monticello Drugs is an independently owned and operated community pharmacy located in Monticello, Georgia. In November of 2024, Monticello Drugs entered into an agreement with our local health system to provide 340B-covered drugs to our community. I have a bachelor's degree in healthcare administration from Western Governors University and am currently pursuing a Master of Business Administration in Healthcare. I have over 16 years of service as a pharmacy technician, extensive training in pharmacy operation, pharmacy billing and reimbursement models, and in-depth knowledge of federal regulatory requirements. As such, I believe that I am a credible source of knowledge and opinion regarding the 340B program and the current proposed rulemaking under HHS Docket No. HRSA-2026-03042 Page 2 of 7 Background: The overarching goal of the 340B program is to provide savings to the health system, enabling it to maximize the impact of the opportunity by reinvesting those savings into the healthcare provided to the community. Without the ability to realize these savings opportunities and utilize these funds, it would be impossible for our local health system to expand services to our community, including cardiology, nephrology, psychiatry, and other necessary services. To discuss this issue holistically, this writer would like to examine the ethical, legal, regulatory, and practical-economic concerns of the proposed 340B program rebate model as well as the potential impacts upon healthy systems, contract pharmacies, and communities served by the 340B Program. Analysis: Ethical Concerns Related to the Proposed Rebate Model: It is my assessment, based upon my extensive education, training and experience, that, ethically speaking, it would not be correct to force health systems to suddenly shift their program models from the current model to a rebate-based model due to the potential negative impact that the lag in savings could have on community health initiatives that are already or will soon be established in these communities because covered entities often lack the funds to float the full cost of 340B drugs while waiting on retroactive rebates. These programs cover a vast population of individuals who are negatively impacted by their economic conditions, mental and physical health, or a combination of any of these factors. Should our communities suddenly lose access to vital care provided through HIV clinics, mental health practices, vaccine clinics, medication therapy management services, diabetes wellness programs, and other community health programs, which are funded at little to no cost to patients by utilizing 340B savings, we would likely see a swift negative impact on those populations who are most at risk financially, physically, and mentally. This writer would think the most ethical action would be to continue providing these services to our communities without interruption due to a sudden shift in the program that funds them. Legal Concerns Related to the Proposed Rebate Model: It is further my opinion that, legally speaking, the 340B Program is not, and was never intended to be, a rebate based program. As you are aware, section 340B(a)(1) of the Public Health Service Act, IN GENERAL.The Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs (other than drugs described in paragraph (3)) purchased by a covered entity on or after the first day of the first month that begins after the date of the enactment of this section, does not exceed an amount equal to the average manufacturer price Page 3 of 7 for the drug under title XIX of the Social Security Act in the preceding calendar quarter, reduced by the rebate percentage described in paragraph... (Emphasis mine). While the concept of a rebate model may be predicated on the first parenthetical section of this statement, it does not mean that a manufacturer can unilaterally determine that a rebate model can be included as an alternative to the negotiated 340B rate. Specifically supporting this assertion would be that section 340B(a)(1) specifically states, the amount required to be paid... to the manufacturer for covered outpatient drugs... purchased by a covered entity... does not exceed the amount equal to the average manufacturer price... This explicitly states that the 340B covered drugs cannot be charged the market price of the drug because that market price would exceed the average manufacturer's price. According to the September 17, 2024, letter from former HRSA Administrator Carole Johnson1 In correspondence with HRSA, J&J asserts that their proposed rebate model is similar to replenishment processes and that this authorizes J&J to unilaterally impose its proposed rebate model without violating the 340B statute. This is incorrect. There are fundamental differences between J&Js proposal and some covered entities voluntarily using inventory replenishment processes to manage their 340B inventory. First, under a typical replenishment structure, a covered entity generally makes an initial purchase at a higher price, then subsequent, ongoing drug purchases are at the 340B price. By contrast, under the J&J proposal, covered entities would be forced to pay a higher price point up front for every purchase. This would create significantly higher up-front costs for covered entities. Second, the 340B statute explicitly limits rebate models to those that have been approved by the Secretary. Third, covered entities voluntarily choose to use replenishment processes; J&Js proposal is not voluntary for covered entities. While it is, admittedly, within the Secretary's authority to implement this rebate model, this writer is reminded of one of his favorite quotes: Just because you can doesnt mean you should. Regulatory Compliance Concerns Related to the Proposed Rebate Model: When one considers the regulatory claims that manufacturers make regarding diversion, or inappropriate use of 340B covered drugs, by covered entities, it is unlikely that this shift in payment models would have a real impact on how 340B compliance is effectuated. While it is true that the 340B program has grown since its inception, it still represents a very minor fraction of manufacturers overall revenues in the global economy. However, the growth in a programs use does not necessarily lead to increased improper use of program resources. Covered entities, their pharmacies, and any contract pharmacies they may utilize are required to comply with a multitude of policies and procedures to help ensure program integrity. These include records-keeping requirements for inventory intake and dispensation, as well as participation in audits performed by HRSA and manufacturers. From a regulatory standpoint, it would be fair to say that the 340B savings program is at least as well-regulated as Medicare Part Page 4 of 7 D. This writer believes the current regulations governing the 340B program far exceed the minimum standards for program integrity under Federal law and regulations. Additionally, the proposed rebate model pilot program would require that health systems begin submitting purchase invoices, claims data, and patient data from medical records to manufacturers. These requirements impose what this writer would think would be a potentially problematic relationship where manufacturers receive information from providers relating to their prescribing patterns, where specific patients are concerned, which would, to my mind, be a potential HIPAA violation. Even if it were determined that this is not a violation of the law, it would certainly be a violation of patient trust if it were not explicitly disclosed to each affected patient. Practical-Economic Concerns Related to the Proposed Rebate Model: Finally, from a practical view, the idea that a shift in Federal policy, which would coincidentally be an acquiescence to manufacturers attempt at dictating how the program will be implemented by the Administration, would do anything other than continue to increase the manufacturers bottom line is, at best, fallacious. It would appear to me that giving in to the demands of a juggernaut of the healthcare industry to protect their interests while placing communities at further risk of losing access to critical resources used to meet their daily healthcare needs. Would it be practical to shift this burden from the manufacturers, five of which averaged $66.229 billion in global revenues in 2025, representing a significant increase in global revenue year over year2,3,4,5,6, to community healthcare systems, which saw Medicare net payments increase by approximately 5.1% against a general inflationary rate of 14.1% (a 9% variance). In a world where healthcare costs are increasing at rates that significantly exceed the standard inflation rate, it would be most impractical to transfer the burden of the 340B program from multibillion-dollar corporations to community hospitals, which, according to Bobek (2025), saw average revenues of $242.5 million in FY 2023.7,8 According to a survey conducted by 340bhealth: 77% of hospitals indicated that the full range of costs associated with rebate models by all manufacturers, including the administrative burden and the risk of rebate denials for legitimate claims would jeopardize their ability to keep their doors open,9 In other words, they expect that 77% of hospitals may shutter their doors if the 340B program were to shift to a rebate model. Assuming that this and future administrations all recognize the profound negative impact this loss would have on our communities, and according to the U. S. Naval Institute (see Marghella, 2023 ), National Security, the money to fund these hospitals would have to come from another source in order to keep the doors open. The only potential source of revenue this writer can think of is using tax revenues to subsidize these hospitals and services9. Page 5 of 7 340bhealth continues: 85% of hospitals reported that without the up-front 340B discount, combined with the risk of delayed or improperly denied rebates after purchasing drugs at full price, they may no longer be able to offer discounted and/or free medications at their pharmacies, which could lead to decreased medication adherence and worsened health outcomes for patients.10 Likewise, the U.S. District Court for the District of Maine issued a preliminary injunction regarding the prior version of this proposed rule in American Hospital Association v. Kennedy. In that ruling, the Court stated that covered entities incur an estimated $400 million per year in additional compliance costs, not to mention the compliance costs currently in place11. An additional cost that this writer would contend serves no purpose other than to minimize the impact of the 340B program on the big pharmaceutical manufacturers, and thus on communities that are currently helped by the 340B savings program, by simply adding more layers to the already complex compliance system required of covered entities and contract pharmacies. If we consider these revenues proportionally to each other, the average health systems revenues are 0.366% of the average manufacturers annual revenues, while expecting these health systems to continue to provide subsidized care to indigent or at-need communities. The addition of this rule to the 340B program formatting will only add an additional layer of compliance onto the already extremely complicated 340B program, which will only add additional costs to participating health systems. To this writer, that would be the antithesis of stretching scarce federal funds as defined in the CFR. Recommendation: This writer recommends that CMS not implement this rule, even as a pilot program. However, this writer would further recommend that CMS research alternative methods to ensure that hospitals participating in the 340B program do so appropriately. Conclusion: Pharmaceutical manufacturers would like to see this regulation pass so that they can shift the admittedly substantial burden from themselves onto much smaller, fiscally speaking, covered entities within the 340B program. It is the opinion of this writer that larger health systems do game the 340B program, whether intentionally or not. However, this rule would shift the program's financial burden not just to the larger health systems, which may be gaming the system, but also to small and medium-sized hospitals and clinics that are using these funds simply to survive. Page 6 of 7 While the original covered manufacturers would account for a relatively small portion of the overall 340B program, it would open the floodgates for manufacturers to dictate the terms of contracts to CMS & HRSA. This could potentially impact not only the 340B program but, in the future, also spread to price concessions in the Medicare and Medicaid Programs. By adding this rule, CMS and HRSA would only be adding another layer of complexity to an already overly complex program. In conclusion, due to these potential ethical, legal, regulatory, and practical concerns, this writer asks that HRSA not implement the 340B Rebate Model Pilot Program under consideration as HHS Docket No. HRSA-2026-03042. Thank you for your time and your consideration of these vital concerns. Sincerely, J. Ross Hays, BSHA, CPhT-Adv. Director of Pharmacy Contract Services Page 7 of 7 References: 1. Health Resources and Services Administration. (2024, September 17). HRSA letter to Johnson & Johnson [Letter]. https://www.hrsa.gov/sites/default/files/hrsa/opa/sept-17- 2024-hrsa-letter-johnson-johnson.pdf 2. Pfizer. (2025). Pfizer 2024 annual review. https://annualreview.pfizer.com 3. Bristol Myers Squibb. (2026, February 5). Bristol Myers Squibb reports fourth quarter and full-year financial results for 2025 [Press release]. https://www.bms.com/assets/bms/us/en-us/pdf/investor- info/doc_financials/quarterly_reports/2025/BMY-Q4-2025-Earnings-Press-Release.pdf 4. Johnson & Johnson. (2026, January 21). Johnson & Johnson reports Q4 and full-year 2025 results [Press release]. https://www.investor.jnj.com/investor-news/news- details/2026/Johnson--Johnson-reports-Q4-and-Full-Year-2025-results/default.aspx 5. MSD. (2026, February 3). Our Q4 and full-year 2025 financial results. https://www.msd.com/stories/our-q4-and-full-year-2025-financial-results/ 6. AbbVie. (2026, February 4). AbbVie reports full-year and fourth-quarter 2025 financial results [Press release]. https://news.abbvie.com/2026-02-04-AbbVie-Reports-Full-Year- and-Fourth-Quarter-2025-Financial-Results 7. American Hospital Association. (2026, March 9). 2025 the cost of caring report. https://www.aha.org/guides-and-reports/2026-03-09-2025-cost-caring-report 8. Definitive Healthcare. (2025, July 16). Hospital revenue and expense trends in U.S. https://www.definitivehc.com/blog/revenue-trends-at-u.s.-hospitals 9. Marghella, P. D. (2023, August). Public health is a national security issue. Proceedings, 149(8). https://www.usni.org/magazines/proceedings/2023/august/public-health-national- security-issue 10. 340B Health. (2025, July). Manufacturer 340B rebate models threaten safety-net and rural hospitals and would harm patients. https://www.340bhealth.org/files/340B_Health_MANUFACTURER_340B_REBATE_MOD ELS_Report.pdf 11. American Hospital Association v. Kennedy, 725 F. Supp. 3d 104 (D.D.C. 2024). https://www.courtlistener.com/docket/71979116/90/american-hospital-association-v- kennedy/ Your Hometown Pharmacy To: Thomas J Engles Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 From: J. Ross Hays, BSHA, CPhT-Adv. Director of Pharmacy Contract Services Monticello Drugs, Inc 679 W. Washington Street Monticello, GA 31064 Subject: HHS Docket No. HRSA-2026-03042 Introduction: I am writing to you on behalf of Monticello Drugs, Inc., and the economically disadvantaged population that we serve as a 340B contract pharmacy. Monticello Drugs is an independently owned and operated community pharmacy located in Monticello, Georgia. In November of 2024, Monticello Drugs entered into an agreement with our local health system to provide 340B-covered drugs to our community. I have a bachelor's degree in healthcare administration from Western Governors University and am currently pursuing a Master of Business Administration in Healthcare. I have over 16 years of service as a pharmacy technician, extensive training in pharmacy operation, pharmacy billing and reimbursement models, and in-depth knowledge of federal regulatory requirements. As such, I believe that I am a credible source of knowledge and opinion regarding the 340B program and the current proposed rulemaking under HHS Docket No. HRSA-2026-03042 Background: The overarching goal of the 340B program is to provide savings to the health system, enabling it to maximize the impact of the opportunity by reinvesting those savings into the healthcare provided to the community. Without the ability to realize these savings opportunities and utilize these funds, it would be impossible for our local health system to expand services to our community, including cardiology, nephrology, psychiatry, and other necessary services. To discuss this issue holistically, this writer would like to examine the ethical, legal, regulatory, and practical-economic concerns of the proposed 340B program rebate model as well as the potential impacts upon healthy systems, contract pharmacies, and communities served by the 340B Program. Analysis: Ethical Concerns Related to the Proposed Rebate Model: It is my assessment, based upon my extensive education, training and experience, that, ethically speaking, it would not be correct to force health systems to suddenly shift their program models from the current model to a rebate-based model due to the potential negative impact that the lag in savings could have on community health initiatives that are already or will soon be established in these communities because covered entities often lack the funds to float the full cost of 340B drugs while waiting on retroactive rebates. These programs cover a vast population of individuals who are negatively impacted by their economic conditions, mental and physical health, or a combination of any of these factors. Should our communities suddenly lose access to vital care provided through HIV clinics, mental health practices, vaccine clinics, medication therapy management services, diabetes wellness programs, and other community health programs, which are funded at little to no cost to patients by utilizing 340B savings, we would likely see a swift negative impact on those populations who are most at risk financially, physically, and mentally. This writer would think the most ethical action would be to continue providing these services to our communities without interruption due to a sudden shift in the program that funds them. Legal Concerns Related to the Proposed Rebate Model: It is further my opinion that, legally speaking, the 340B Program is not, and was never intended to be, a rebate based program. As you are aware, section 340B(a)(1) of the Public Health Service Act, IN GENERAL.The Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs (other than drugs described in paragraph (3)) purchased by a covered entity on or after the first day of the first month that begins after the date of the enactment of this section, does not exceed an amount equal to the average manufacturer price for the drug under title XIX of the Social Security Act in the preceding calendar quarter, reduced by the rebate percentage described in paragraph... (Emphasis mine). While the concept of a rebate model may be predicated on the first parenthetical section of this statement, it does not mean that a manufacturer can unilaterally determine that a rebate model can be included as an alternative to the negotiated 340B rate. Specifically supporting this assertion would be that section 340B(a)(1) specifically states, the amount required to be paid... to the manufacturer for covered outpatient drugs... purchased by a covered entity... does not exceed the amount equal to the average manufacturer price... This explicitly states that the 340B covered drugs cannot be charged the market price of the drug because that market price would exceed the average manufacturer's price. According to the September 17, 2024, letter from former HRSA Administrator Carole Johnson1 In correspondence with HRSA, J&J asserts that their proposed rebate model is similar to replenishment processes and that this authorizes J&J to unilaterally impose its proposed rebate model without violating the 340B statute. This is incorrect. There are fundamental differences between J&Js proposal and some covered entities voluntarily using inventory replenishment processes to manage their 340B inventory. First, under a typical replenishment structure, a covered entity generally makes an initial purchase at a higher price, then subsequent, ongoing drug purchases are at the 340B price. By contrast, under the J&J proposal, covered entities would be forced to pay a higher price point up front for every purchase. This would create significantly higher up-front costs for covered entities. Second, the 340B statute explicitly limits rebate models to those that have been approved by the Secretary. Third, covered entities voluntarily choose to use replenishment processes; J&Js proposal is not voluntary for covered entities. While it is, admittedly, within the Secretary's authority to implement this rebate model, this writer is reminded of one of his favorite quotes: Just because you can doesnt mean you should. Regulatory Compliance Concerns Related to the Proposed Rebate Model: When one considers the regulatory claims that manufacturers make regarding diversion, or inappropriate use of 340B covered drugs, by covered entities, it is unlikely that this shift in payment models would have a real impact on how 340B compliance is effectuated. While it is true that the 340B program has grown since its inception, it still represents a very minor fraction of manufacturers overall revenues in the global economy. However, the growth in a programs use does not necessarily lead to increased improper use of program resources. Covered entities, their pharmacies, and any contract pharmacies they may utilize are required to comply with a multitude of policies and procedures to help ensure program integrity. These include records-keeping requirements for inventory intake and dispensation, as well as participation in audits performed by HRSA and manufacturers. From a regulatory standpoint, it would be fair to say that the 340B savings program is at least as well-regulated as Medicare Part D. This writer believes the current regulations governing the 340B program far exceed the minimum standards for program integrity under Federal law and regulations. Additionally, the proposed rebate model pilot program would require that health systems begin submitting purchase invoices, claims data, and patient data from medical records to manufacturers. These requirements impose what this writer would think would be a potentially problematic relationship where manufacturers receive information from providers relating to their prescribing patterns, where specific patients are concerned, which would, to my mind, be a potential HIPAA violation. Even if it were determined that this is not a violation of the law, it would certainly be a violation of patient trust if it were not explicitly disclosed to each affected patient. Practical-Economic Concerns Related to the Proposed Rebate Model: Finally, from a practical view, the idea that a shift in Federal policy, which would coincidentally be an acquiescence to manufacturers attempt at dictating how the program will be implemented by the Administration, would do anything other than continue to increase the manufacturers bottom line is, at best, fallacious. It would appear to me that giving in to the demands of a juggernaut of the healthcare industry to protect their interests while placing communities at further risk of losing access to critical resources used to meet their daily healthcare needs. Would it be practical to shift this burden from the manufacturers, five of which averaged $66.229 billion in global revenues in 2025, representing a significant increase in global revenue year over year2,3,4,5,6, to community healthcare systems, which saw Medicare net payments increase by approximately 5.1% against a general inflationary rate of 14.1% (a 9% variance). In a world where healthcare costs are increasing at rates that significantly exceed the standard inflation rate, it would be most impractical to transfer the burden of the 340B program from multibillion-dollar corporations to community hospitals, which, according to Bobek (2025), saw average revenues of $242.5 million in FY 2023.7,8 According to a survey conducted by 340bhealth: 77% of hospitals indicated that the full range of costs associated with rebate models by all manufacturers, including the administrative burden and the risk of rebate denials for legitimate claims would jeopardize their ability to keep their doors open,9 In other words, they expect that 77% of hospitals may shutter their doors if the 340B program were to shift to a rebate model. Assuming that this and future administrations all recognize the profound negative impact this loss would have on our communities, and according to the U. S. Naval Institute (see Marghella, 2023 ), National Security, the money to fund these hospitals would have to come from another source in order to keep the doors open. The only potential source of revenue this writer can think of is using tax revenues to subsidize these hospitals and services9. 340bhealth continues: 85% of hospitals reported that without the up-front 340B discount, combined with the risk of delayed or improperly denied rebates after purchasing drugs at full price, they may no longer be able to offer discounted and/or free medications at their pharmacies, which could lead to decreased medication adherence and worsened health outcomes for patients.10 Likewise, the U.S. District Court for the District of Maine issued a preliminary injunction regarding the prior version of this proposed rule in American Hospital Association v. Kennedy. In that ruling, the Court stated that covered entities incur an estimated $400 million per year in additional compliance costs, not to mention the compliance costs currently in place11. An additional cost that this writer would contend serves no purpose other than to minimize the impact of the 340B program on the big pharmaceutical manufacturers, and thus on communities that are currently helped by the 340B savings program, by simply adding more layers to the already complex compliance system required of covered entities and contract pharmacies. If we consider these revenues proportionally to each other, the average health systems revenues are 0.366% of the average manufacturers annual revenues, while expecting these health systems to continue to provide subsidized care to indigent or at-need communities. The addition of this rule to the 340B program formatting will only add an additional layer of compliance onto the already extremely complicated 340B program, which will only add additional costs to participating health systems. To this writer, that would be the antithesis of stretching scarce federal funds as defined in the CFR. Recommendation: This writer recommends that CMS not implement this rule, even as a pilot program. However, this writer would further recommend that CMS research alternative methods to ensure that hospitals participating in the 340B program do so appropriately. Conclusion: Pharmaceutical manufacturers would like to see this regulation pass so that they can shift the admittedly substantial burden from themselves onto much smaller, fiscally speaking, covered entities within the 340B program. It is the opinion of this writer that larger health systems do game the 340B program, whether intentionally or not. However, this rule would shift the program's financial burden not just to the larger health systems, which may be gaming the system, but also to small and medium-sized hospitals and clinics that are using these funds simply to survive. While the original covered manufacturers would account for a relatively small portion of the overall 340B program, it would open the floodgates for manufacturers to dictate the terms of contracts to CMS & HRSA. This could potentially impact not only the 340B program but, in the future, also spread to price concessions in the Medicare and Medicaid Programs. By adding this rule, CMS and HRSA would only be adding another layer of complexity to an already overly complex program. In conclusion, due to these potential ethical, legal, regulatory, and practical concerns, this writer asks that HRSA not implement the 340B Rebate Model Pilot Program under consideration as HHS Docket No. HRSA-2026-03042. Thank you for your time and your consideration of these vital concerns. Sincerely, J. Ross Hays, BSHA, CPhT-Adv. Director of Pharmacy Contract Services References: Health Resources and Services Administration. (2024, September 17). HRSA letter to Johnson & Johnson [Letter]. https://www.hrsa.gov/sites/default/files/hrsa/opa/sept-17-2024-hrsa-letter-johnson-johnson.pdf Pfizer. (2025). Pfizer 2024 annual review. https://annualreview.pfizer.com Bristol Myers Squibb. (2026, February 5). Bristol Myers Squibb reports fourth quarter and full-year financial results for 2025 [Press release]. https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/doc_financials/quarterly_reports/2025/BMY-Q4-2025-Earnings-Press-Release.pdf Johnson & Johnson. (2026, January 21). Johnson & Johnson reports Q4 and full-year 2025 results [Press release]. https://www.investor.jnj.com/investor-news/news-details/2026/Johnson--Johnson-reports-Q4-and-Full-Year-2025-results/default.aspx MSD. (2026, February 3). Our Q4 and full-year 2025 financial results. https://www.msd.com/stories/our-q4-and-full-year-2025-financial-results/ AbbVie. (2026, February 4). AbbVie reports full-year and fourth-quarter 2025 financial results [Press release]. https://news.abbvie.com/2026-02-04-AbbVie-Reports-Full-Year-and-Fourth-Quarter-2025-Financial-Results American Hospital Association. (2026, March 9). 2025 the cost of caring report. https://www.aha.org/guides-and-reports/2026-03-09-2025-cost-caring-report Definitive Healthcare. (2025, July 16). Hospital revenue and expense trends in U.S. https://www.definitivehc.com/blog/revenue-trends-at-u.s.-hospitals Marghella, P. D. (2023, August). Public health is a national security issue. Proceedings, 149(8). https://www.usni.org/magazines/proceedings/2023/august/public-health-national-security-issue 340B Health. (2025, July). Manufacturer 340B rebate models threaten safety-net and rural hospitals and would harm patients. https://www.340bhealth.org/files/340B_Health_MANUFACTURER_340B_REBATE_MODELS_Report.pdf American Hospital Association v. Kennedy, 725 F. Supp. 3d 104 (D.D.C. 2024). https://www.courtlistener.com/docket/71979116/90/american-hospital-association-v-kennedy/
HRSA-2026-0001-1853Anonymous Anonymous2026-04-20T04:00Z16,239 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulattions.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administer Engels: Reedsburg Area Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well- established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include a decrease or elimination of our Medication Assistance Program and diabetes and chronic care management programs, as well as a significant impact on future capital improvements and the addition of specialty programs. Our Medication Assistance Program serves 100-150 patients at any given time and offers nearly 100 different medications, including insulin, inhalers, and anticoagulants, at no cost to patients. The estimated savings to the patients is over $180,000. We have expanded the program to include individuals who are discharging from the hospital in receiving a two-week supply of program-approved medications. Implementation of a rebate program would have a substantial negative impact on programs such as the Medication Assistance Program. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Reedsburg Area Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulattions.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administer Engels: Reedsburg Area Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include a decrease or elimination of our Medication Assistance Program and diabetes and chronic care management programs, as well as a significant impact on future capital improvements and the addition of specialty programs. Our Medication Assistance Program serves 100-150 patients at any given time and offers nearly 100 different medications, including insulin, inhalers, and anticoagulants, at no cost to patients. The estimated savings to the patients is over $180,000. We have expanded the program to include individuals who are discharging from the hospital in receiving a two-week supply of program-approved medications. Implementation of a rebate program would have a substantial negative impact on programs such as the Medication Assistance Program. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Reedsburg Area Medical Center
HRSA-2026-0001-1854Winn Community Health Center2026-04-20T04:00Z38,700 chars
See attached file(s) 4 TRINITY fryl COMMUNITY ." HEALTH CENTERS 6 OF IOVIBIAP64 April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Trinity Community Health Centers of Louisiana, I would like to thank the Health Resources and Serviccs Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility frorn manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs" core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs.' ability to serve the 52 million patients who rely on us. For Trinit-y Community Health Centers of Louisiana in particular, this means it will impact: 40,036 unduplicated patients served resulting in over 119,000 prescriptions in our 5 in-house pharmacies alone (2025 figures) 340B administrative cost will increase. In 2025, through a combination of in-house staff, consultants, and third-party administrator fees, Trinity Community Health Centers' 340B administrative costs exceeded $295,000 Our patients would suffer a reduction in services. Our health center reinvests 340B savings to sustain essential scrvices that are not fully reimbursed but are critical to patient access and outcomes. These funds support care coordinators, patient transportation, and discounted pharmacy access for uninsured and underinsured patients. Savings also help to expand dental services, maintain enabling services, and offset unreimbursed clinical and operational costs. Additionally, 340B resources strengthen chronic disease management, support schoolbased health services, and ensure patients receive comprehensive care regardless of their ability to pay. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. H. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot prograrn. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproponionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xareltoe and Eliquise are vitat for patients with deep vein thrombosis, pulmonary ' Richard P, Ku L, Dor A. Tan E, Shin P, Rosenbaum S. Cosi savings associated with the use of conununity health centers, Arnbul Care Manage, 2012 Jan-Mar:35(1):50-9. doi: 10.1097/JAC.0h013e31823d27b6. PMID: 22156955. 2 embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which arc highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.' By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.' Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.' Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed rnodel, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CEICs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients Cools F, et al. Risks associated with discontinuation of oral anticoagtdation in newly diagnosed paticnts with atrial fibrillation: Results from the GARFIELD-AF Registry. I Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. ' Packer, M., et al. (2024). Blinded Withdrawal of Long-Tcrm Randomizcd Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation_ htips.i,www ahroulnals org.'doi NI'. 10 Ilbl circuthltonahri 121 (x574g ' Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No, PEP25-07-007, NSDUH Serics H-60). Center for Behavioral Hcalth Statistics and Quality, Substance Abuse and Mental Health Services Administration. sambsa gm-dam data-we-collectinviuh-natioul-survoaltug-tise-anti-licalthinational-rcl,:ases ' I lauser RA, et al. Long-Term Deutetrabenazine Trentment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study, Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PM1D: 35280262; PMCID: PMC89O6841. ' 2025 UDA Data, HRSA (hrsa.gov) 3 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compiiance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, extemal consulting costs, dispensing/capture activity, and clinic administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Trinity Community Health Centers provided 5926,448 (CY 2025 UDS) in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts win decrease significantly under a rebate model. Staffing Impact: Trinity Community Health Centers anticipates needing 1 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Trinity Community Health Centers anticipates an increase yet unknown for costs for external support vendors. These vendors may include 3408 consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 4 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing I to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Trinity Community Heahh Centers anticipates that 10 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would incrcase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain comptiant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Such an integration is not currently available with Trinity Community Health Centers' phannacy software vendor. One-Time Integration Costs: Wc anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. IMernal NACFIC assessment (99 responses). 5 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 third-party administrators and has 34 contract pharrnacy arrangements. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract phannacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than rnanage the administrative headache. Clinic Administered Drugs: The Burden of New Systems Requlred Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.' Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment systern (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part. B Claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. A. Financial chalknges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty lucerne) NACHC survcy data 6 of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including tutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of salc. 13y statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project' In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including mcdications, based on a patient's income and family size. Trinity Community Health Centers currently offer discounted slide fees on medication for individuals living at or below 200% of the Federal Poverty Level. CHCs are particularly worried that the need to purchase drugs at fuH WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days)." Assuming a best-case scenario of 15 days to the average 30 days for inventoty to turn, CFIC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a I0-day timeframe for rebate HRSA FAQ " Such discounts arc subject lo potential legal and contractual restrictions. htim.i.bphc.lubli.got cunlPltanlc cimpliance- rnanu.ilch:tptrrg*fixotnate f ia enlivenhcalllrenblop. year-end-buminess-health-elsock-kuy-metries-es.'ery-phannticrnvencr-should..reviet4 7 payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days frorn when thc status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. Lack of access to upfront 340B discounts, along with the high 1T/infrastructure costs, wilI disproportionately impact CHCs and trickle down to patients. lt is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate DruE Cost Impact Calculator D escription To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B" and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected dnigs by NDC." For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in cil 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Based on our organization's data for only 1 of 5 in-house pharmacies, Winn Community Health Center Pharmacy, we project an increased annual drug spend of $456,498.59 for the 10 drugs under the proposed rebate model. By 2028, increased annual drug spend on MFP drugs is projected to total S1,562,446.46. Extrapolating this data to our other 4 in-house pharmacies, we realize this increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 3408 Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Trinity Community Health Centers anticipates needing to reduce: hnp..'340boricinglirsa.gov/ " htipr :-www ov;fite nees-Ntatwri 8 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as care coordinators and patient transportation. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time patient-services oriented CHC worker Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 3440 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Thnity Community Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within thcir credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the rnanufaeturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Financial impact of Rebate Denials and Delays Trinity Community Health Cetners urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to 9 deny rebate claims based on vague or ambiguous rcasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a significant net annual loss. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless oftheir ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 3408 pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, thc 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate clairns are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10 day payment requirement, that requirement rnust run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforccment framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; " Application Process for the 340B Rebate Model Pilot Program, 2025-146 l 9 (90 FR 36163) hrins .'www frdcrairepiiter jeov idoc um nr ci 202 5 1W:01.702 5 - I -I I 340h-program-rintice-application-procels-for-the-140b- rch:it -rn klel-ps Int-program 10 Rebate determinations must ahgn with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer defined patient eligibility standards or undisclosed validation criteria. 0PA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility deterrnination and offer full discounts to individuals at or below 100% of the Federal Povcrty Level (FPL). These services would not be possible withctut the savings generated from the 340B program, CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data Systern (UDS). This includes data on 340B- purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate rnodel would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Ciaims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSNs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 11 Provide rnanufacturers with the necessary deduplication clata within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the Iongstanding upfront discount structure that has defined the 340B program for more than three dccades attd is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogethcr. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 3408 rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Trinity Community Health Centers of Louisiana strongty urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, arid the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Trinity Community Health Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Trinity Community Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Deano Thornton, dthomton@winnchc.org. Sincerely, - Deano Thornton, CEO Trinity Community Health Centers of Louisiana 12
HRSA-2026-0001-1855Organon2026-04-20T04:00Z12,405 chars
See attached file(s) 30 Hudson St Jersey City, NJ 07302 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources & Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via http://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, Organon is pleased to submit the following comments in response to the Health Resources & Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program, as published in the Federal Register at 91 FR 7287 (the RFI). Organon is a global healthcare company with a foundation and primary focus on improving womens health. Our diverse portfolio across women's health, biosimilars, and established brands includes therapies and products for a wide variety of conditions and diseases and encompasses more than sixty medicines across a range of therapeutic areas including cardiovascular disease, reproductive health, neurology, immunology, oncology, and respiratory conditions. We bring these important therapies to more than 150 markets around the world. Organon supports the 340B Drug Pricing Program (the 340B program) and its intended mission of supporting safety net providers in providing patients in need with access to medical care and medications. We offer the following comments in response to HRSAs solicitation of feedback regarding the potential use of rebates to effectuate the ceiling price under the 340B Program. Growth of the 340B Drug Pricing Program The 340B program requires drug manufacturers participating in the Medicaid Drug Rebate Program to offer discounted drugs to qualifying safety-net providers known as covered entities. Covered entities include providers such as Federally Qualified Health Centers (FQHCs), Tribal and Urban Indian Organizations, acute care hospitals with a disproportionate share of under- or uninsured patients, children's hospitals, and other provider types. The statutory intent of the 340B program was to enable covered entities to stretch scarce federal resources as far as possible, enabling them to provide healthcare services to more eligible patients and to enable covered entities to provide more comprehensive services to their patients. 30 Hudson St Jersey City, NJ 07302 The 340B program has expanded exponentially since its enactment in 1992. While a number of factors have contributed to the programs growth, the Affordable Care Acts expansion of eligible covered entity types as well as 2010 HRSA guidance which enabled covered entities to utilize multiple contract pharmacies to dispense 340B drugs, have helped drive the programs rapid growth. In 2009, covered entities purchased approximately $4 billion in 340B drugs.1 In 2023, covered entities purchased $66.3 billion worth of drugs, and the 340B program is currently the second-largest drug purchasing program in the United States.2 Along with the growth of the program, so have concerns over program integrity and transparency. Covered entities are statutorily prohibited from dispensing or selling covered drugs to non-340B patients. Covered entities are also prohibited from receiving duplicate discounts on 340B drugs from Medicaid rebates. Despite these prohibitions, there is evidence that certain covered entities are receiving duplicate discounts at significant levels which negatively impacts medication pricing in the U.S. healthcare system. Due to a lack of 340B program transparency, it is difficult to specifically quantify the scope of duplicate discounts taking place, however, one 2019 report estimated that 3-5 percent of 340B discounts and Medicaid rebates are duplicates.3 Given the current size of the 340B program, this translates into potentially billions of dollars of duplicate discounts a year. While covered entities are subject to federal audits, the number of annual audits undertaken by HRSA are inadequate given the current size of the program and its continued growth. A 2025 Government Accountability Office (GAO) report found that HRSA conducts approximately 200 audits of covered entities per year.4 As of 2023, there were more than 55,000 340B covered entity sites in the U.S.5 Given the ongoing problem of 340B/Medicaid duplicate discounts and drug diversion, it is necessary to implement changes that will increase transparency and ensure that program resources are being directed to eligible patients who require care the most. 340B Claims Database Model With the release of this RFI, and the previous release of the 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, HRSA has indicated that it is considering implementing a 340B rebate model under which pharmaceutical manufacturers (manufacturers) would be permitted to use rebates to effectuate the ceiling price under the 340B model for a subset of eligible drugs. Organon commends HRSA for taking necessary action to improve efficiency and the functionality of the 340B program. As HRSA considers whether to advance a 340B rebate model, we also recommend that HRSA establish a 340B all-claims database model. Under this proposed model, HRSA would develop and manage a 1 2025-09-Misaligned-Incentives-340B-web.pdf 2 Id. 3 Kalderos-Annual-Report-2021.pdf 4 GAO-26-108784, 340B DRUG DISCOUNT PROGRAM: Agency Oversight Has Improved, but Actions Needed to Address Weaknesses 5 Id. 30 Hudson St Jersey City, NJ 07302 centralized 340B claims database. Covered entities would be required to submit specific pharmacy and medical claims data to the database within 45 days after dispensing a 340B drug. Manufacturers would then utilize the database to verify that no duplicate Medicaid discounts have been processed. While claims data would be available to applicable manufacturers for compliance purposes, claims information would not be available to the general public, and all protected health information (PHI) would be de-identified and encrypted before being transmitted to manufacturers. The purpose of a rebate model, inherently, is to provision collection of 340B claims for manufacturers to gain clarity of pricing. The intent is not to restrict access to 340B covered entities, but instead to provide transparency and accurate pricing throughout the medication supply chain and patient experience. Beyond Medicaid duplicate discounts, claims data clearly identifies a prescription or medication administration event and can be tied to insurance coverage payments, TRICARE utilization, Medicare Part B and Part D inflation rates, or Most Favored Nations pricing. Each of these situations may result in duplication of discounts that are unintended or statutorily prohibited. Without claims data, manufacturers are limited to using algorithmic extrapolation and imperfectly aligning 340B dispenses with other duplicative discounting programs resulting in unintended impact to net sales pricing. Organon has developed strong working relationships with our 340B covered entity clients. While we expect that covered entities maintain compliance with the statutory requirements of the 340B program, it is not our intent to place unreasonable restriction on covered entities that would limit access to 340B drugs or the revenue that covered entities recognize through the lawful sale of 340B drugs. Covered entities have consistently opposed the implementation of a 340B rebate model because it would restrict cash flow and require covered entities to assume additional financial risk during the time period 340B rebates are being processed. Under a claims database model, covered entities would continue to receive a prospective upfront discount with no interruption to covered entity revenue, so long as required claims data are submitted within the permissible time frame and the participating manufacturer chooses not to implement a rebate model. Requiring the submission of certain claims data to HRSA will not place additional administrative burden on covered entities. Most government and commercial payers already require covered entities to collect and submit claims data as a requirement for reimbursement, and many covered entities, or their third-party administrators (TPAs) have the capability to transmit this information electronically. Many manufacturers, including Organon, have also implemented various 340B claims submission requirements as a condition of sale. Having HRSA establish a 340B claims database will have the benefit of standardizing required claims data elements and claims data submission procedures for all covered entities. A claims database will also increase the feasibility of use for duplicate discount protection without impacting the purchase price at the covered entity, standardize the patchwork of claims data requirements among manufacturers, and help reduce the need for state level 340B legislation. The U.S. Department of Health and Human Services (HHS) has already initiated the process of establishing a 340B claims database for certain 340B drugs in the Medicare program. In the CY 2026 Physician Fee Schedule 30 Hudson St Jersey City, NJ 07302 Final Rule, the Centers for Medicare & Medicaid Services (CMS) finalized a proposal to establish a voluntary federal Medicare Part D 340B claims data repository.6 The purpose of this claims repository is to enable CMS to better identify and exclude 340B units from Medicare inflation rebates, as is statutorily required under the Inflation Reduction Act (IRA). Covered entities who voluntarily participate in the claims repository are required to submit five data elements from all Part D 340B claims for all covered Part D drugs billed to Medicare Part D. These data elements are: (1) Date of Service; (2) Prescription or Service Reference Number; (3) Fill Number; (4) Dispensing Pharmacy NPI; and (5) NDC-11. The information in the CMS repository is not publicly available to manufacturers or other non- governmental entities, meaning that manufacturers will not be able to utilize the repository for 340B compliance purposes. While the Part D repository is currently voluntary, CMS has indicated that it may require covered entities to submit data to the database in future years. HRSA should use the framework established under the voluntary Medicare Part D claims repository to build a more comprehensive 340B all-claims database that can be utilized by manufacturers to verify 340B eligibility and prevent duplicate discounts. In addition to the required claims data elements under the Medicare Part D voluntary repository, we recommend that HRSA collect all standard data elements included in the 340B ESP Pharmacy and Medical Claims Data Tables.7, 8 These data elements represent standardized information that covered entities already generally collect for 340B compliance purposes and which will assist manufacturers in preventing duplicate discounts and improper drug diversion. As HRSA evaluates further action to increase transparency and program integrity within the 340B program, we urge HRSA to implement a mandatory 340B all-claims database model that can be utilized by manufacturers to prevent the improper distribution of 340B drugs to ineligible patients, prevent duplicate Medicaid and other discounts, and which minimizes disruption and preserves timely access to 340B pricing for covered entities. We again thank HRSA for offering stakeholders the opportunity to offer feedback in response to the request for information on a potential 340B Rebate Model Pilot Program. Please contact Kyle Levin at Kyle.levin@organon.com if you have any questions or need further information about the enclosed comment letter. Sincerely Kyle Levin Kyle Levin, JD 6 Federal Register: Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program 7 Pharmacy Claims Data Table | 340B ESP Help Center 8 Medical Claims Data Table | 340B ESP Help Center 30 Hudson St Jersey City, NJ 07302 Director, US Public Policy Organon
HRSA-2026-0001-1856Boston Mountain Rural Health Center, Inc.2026-04-20T04:00Z10,164 chars
See attached file(s) 2265 Highway 65 North Marshall, AR 72650 870-448-5733 j k RURAL HEALTH CENTER, INC. BOSTON MOUNTAIN April 17, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 3408 Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: I am the Chief Executive Officer of Boston Mountain Rural Health Center, a federally qualified health center headquartered in Marshall, Arkansas. I write on behalf of Boston Mountain to respond to HRSA's Request for Information on the 340B Rebate Model Pilot Program. Boston Mountain has participated in the 340B program since April 2006. The purpose of this letter is to quantify the consequences of delivering the 340B discount through a retrospective rebate adjudicated by manufacturers and explain why a rebate model is the wrong answer to the question HRSA is trying to solve. The national associations will submit comment letters that speak comprehensively to the legal and policy questions raised in the RFI. I do not intend to restate their arguments here. I intend to give HRSA specific numbers from a specific organization, along with the specific mechanical problems that would follow from a rebate model in our operating environment. 1. The Financial Exposure, By the Numbers Drugs on the combined 2026 and 2027 MFP lists account for approximately $2.5 million of Boston Mountain's annual 340B acquisition cost. The corresponding WAC for that same drug volume is $12.75 million. A rebate model therefore creates approximately $10.3 million in incremental working capital demand each year, every year, for as long as the mechanism is in place. That figure is not a one-time implementation cost. It is a recurring cash requirement, financed by an organization that does not have a line item for it. The 2026 and 2027 MFP drug lists represent a substantial portion of our program. Those drugs are 45% of our total 340B volume. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary and there is no principled basis on which to assume it will not be the annual working capital requirement grows to approximately $17.6 million. Put differently: HRSA is being asked to authorize a cash management problem of $17.6 million per year against an organization whose operating margin cannot absorb a fraction of it. Independently, the Medicare Drug Price Negotiation Program has already reduced our net 340B savings on affected products by 17% in the first quarter of 2026. That reduction is already embedded in our 2026 projections. The rebate model cash demand would land on top of an already-compressed savings stream. 2. Wholesaler Credit Capacity Our wholesaler credit limits were set based on 340B acquisition pricing, which is what every wholesaler contract in rural Arkansas is calibrated against. In preparation for the planned 2026 pilot, our wholesaler representatives were direct with us: they were neither prepared nor in some cases willing to extend credit limits on our 340B accounts to support ordering at WAC for the pilot drugs. When credit limits are exceeded, orders are held. When orders are held, 340B replenishment to our contract pharmacy network stops. When replenishment stops, the 340B program ceases to function. A rebate model does not reduce cash demand. It moves the cash demand forward and then requires someone either the wholesaler, the covered entity, or the contract pharmacy to underwrite it. None of those parties, in our operating environment, has the balance sheet to do so. 3. Why the Rebate Mechanics Do Not Work for a Contract Pharmacy Network Boston Mountain dispenses exclusively through a contract pharmacy network. The ceiling price is effectuated today because we acquired the drug at 340B pricing at the time of purchase. Under a rebate model, the safety-net provider acquires at WAC and the 340B benefit is reconciled after the fact. Our most vulnerable patients depend on access to 340B drugs at the pharmacy counter to manage their diseases, without the upfront discount, we fear this access will be removed. HRSA has proposed to mitigate this with an ad hoc ceiling price file for rebate-covered drugs, and we appreciate the intent, but our third-party administrators were not positioned to operationalize that file in the working days available before the planned 2026 start. The engineering and QA work required to consume a new price file, reconcile it against manufacturer rebate submissions, and apply it at adjudication is not trivial. Without the 340B drugs adjudicating with 340B prices at the pharmacy counter, patients will be harmed. They will most likely Ieave the pharmacy without the medications they require, resulting in unnecessary hospitalizations and even deaths. Even if TPAs can accommodate HRSA's plan for an ad hoc price file for the rebate drugs, this program asks Boston Mountain to float the WAC price on these claims, with no avenue for reconciliation if manufacturers were to deny the rebate retrospectively. Recall, these are the same manufacturers that have spent the last five years attacking our access to 340B drugs at our contract pharmacies, and even now, they are attacking our access at our own sites. Additionally, Executive Order 14273 instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it. A rebate model, by its architecture, cannot deliver the 340B price at the point of sale. A policy cannot comply with the executive order and implement the rebate pilot in its current form at the same time. 4. Reconciliation Infrastructure In our preparations for the 2026 pilot, we reviewed the third-party vendor interface manufacturers selected for rebate adjudication. The available data and reporting did not support a reliable or practical reconciliation. The vendor's position was that HIPAA compliance prevented it from retaining prescription numbers on claims. Any vendor entrusted with this function should be meeting the security requirements necessary to retain and report Rx numbers to its system users. Without claim-level detail, we cannot match a denial to a dispense, we cannot re-submit against a corrected reason code, and we cannot close the cash loop on the transaction. On our combined current MFP volume, a five percent denial rate would put approximately $640,000 at risk each year the mechanism remained in place. That is the rough order of magnitude. If manufacturers set denial rates higher, as they have done in other contexts, the exposure scales accordingly. 5.Operational Cost and Workforce Impact HRSA's Information Collection Request estimates the administrative burden of the rebate model at roughly five hours per week per covered entity. That figure is not consistent with what we observed in our own preparation. Based on the claims volume across the combined 2026-2027 MFP list, I estimate approximately 1.0 additional FTE a dedicated staff resource for rebate submission, denial tracking, reconciliation, and cash forecasting. That is a cost that does not exist in our operating budget today, and it comes out of the same pool of dollars we use to fund clinical staff. 6. The Patient Consequence Boston Mountain served 31,140 patients last year. Seventy-seven percent live at or below 200% of the federal poverty level. Fifty percent are at or below 100%. Our patient mix skews toward rural families in north Arkansas whose access to pharmacies is already constrained by distance and whose access to medications depends on our ability to deliver those medications at a price they can pay. The prevalence rates in our clinical data are meaningful: one in three of our adult patients has hypertension, one in seven has diabetes, and smaller shares live with asthma, HIV, and other chronic conditions managed with medications on or adjacent to the MFP list. A disruption in the 340B price at the point of sale is not abstract for these patients. It is whether the prescription is filled this month or skipped. 7.A Less Costly Path to Deduplication The legitimate objective of preventing duplicate discounting between MFP and 340B can be achieved without a rebate model. Two alternatives have been advanced that preserve the upfront discount and avoid the operational failures described above. A neutral 340B claims clearinghouse, administered by or designated by HRSA, would provide a single source of truth for deduplication. Covered entities would report 340B claims to the clearinghouse. Manufacturers and CMS would reference it. The adjudication function is taken out of the hands of a party with an interest in the outcome, and the financial risk of a rebate mechanism is not created. Separately, manufacturers already require 340B claims data from covered entities as a condition of 340B access. That data is sufficient to support MFP/340B deduplication without a parallel rebate adjudication infrastructure. One operational adjustment is warranted: for new pharmacy accounts or accounts without claims history at the time a data requirement is imposed, manufacturers should accept an attestation of compliance rather than withholding 340B access pending data that does not yet exist. 8.Request Boston Mountain respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program in its current form. In the alternative, we ask that FQHCs be exempted from the pilot. And we ask that HRSA pursue the deduplication objective through the clearinghouse or through improved use of the manufacturer claims data mechanism already in place. The rebate model, whatever its intent, imposes costs on covered entities that are neither necessary nor proportionate to the problem it is meant to solve. I would urge HRSA to make another choice. Thank you for the opportunity to comment. I am available for further comment if necessary. Sincerely, Debbie Ackerson Chief Executive Officer Boston Mountain Rural Health Center Marshall, Arkansas 340B ID: CH063730
HRSA-2026-0001-1857Henderson County Rural Health Center DBA Eagle View Community Health System2026-04-20T04:00Z6,301 chars
HRSA-2026-03042 340B rebate model comment Oquawka Clinic PO Box 198 Oquawka, IL 61469 P: (309) 924-2414 F: (309) 717-0258 Stronghurst Clinic 101 S Division St. Stronghurst, IL 61480 P: (309) 924-2414 F: (309) 717-0247 Monmouth Clinic 230 S. Main St. Monmouth, IL 61462 P: (309) 924-2414 F: (309) 717-0260 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, On behalf of Henderson County Rural Health Center, Inc., doing business as Eagle View Community Health System (EVCHS), we appreciate the opportunity to provide comments on the proposed 340B Rebate Model Pilot Program. As a Federally Qualified Health Center serving rural communities in west-central Illinois and southeast Iowa, we rely heavily on the 340B program to ensure access to affordable medications and sustain essential healthcare services for our patients. The proposed shift from an upfront discount model to a retrospective rebate structure presents significant operational, financial, and patient care concerns. As a rural FQHC, EVCHS operates on narrow margins and serves a high proportion of uninsured, underinsured, and Medicaid patients. We do not have the financial reserves necessary to purchase medications at wholesale acquisition cost (WAC) and wait for reimbursement. This model would create immediate cash flow challenges and threaten our ability to maintain consistent medication access for our patients. I. Request for Exemption of Community Health Centers We strongly urge HRSA to exempt Community Health Centers from participation in any 340B rebate model pilot. The 340B program was designed to allow safety-net providers to stretch scarce federal resources, and the current upfront discount model is essential to fulfilling that mission. A rebate-based system shifts financial risk from manufacturers to providers, undermining the stability of organizations like ours. At EVCHS, 340B savings are directly reinvested into patient care, including: Mobile medical and dental services in rural communities Behavioral health and substance use treatment services Transportation assistance for patients Sliding fee discounts for uninsured individuals Chronic disease management and diabetic education Disrupting this funding stream would have immediate and measurable consequences for our patients and community. II. Patient Impact Our patient population faces significant barriers to care, including transportation limitations, pharmacy access challenges, and high rates of chronic disease. The rebate model would directly impact access to medications used to treat conditions such as diabetes, cardiovascular disease, and mental health disorders. For many of our patients, there are no alternative pharmacies within a reasonable distance. If EVCHS is unable to provide medications at reduced cost at the point of care, patients will face delays, nonadherence, or complete discontinuation of therapy. This will inevitably lead to increased emergency room visits, hospitalizations, and worsening health outcomes. Additionally, the rebate model creates uncertainty in pricing, making it difficult to provide sliding fee discounts as required under the Health Center Program. Without knowing the final cost of medications, we cannot reliably offer patients the affordability they depend on. III. Financial and Operational Impact The proposed model introduces significant administrative and financial burdens that are not sustainable for a rural health center. Key concerns include: Upfront Drug Costs: Purchasing medications at WAC would significantly increase our immediate expenditures and strain limited operating capital. Cash Flow Delays: Waiting weeks for rebate payments creates financial instability and limits our ability to reinvest in patient care. Administrative Burden: The need to track, submit, and reconcile rebate claims across multiple manufacturers would require additional staffing and system upgrades. Technology Costs: Implementation of new software systems and integration between pharmacy and clinical platforms would create significant one-time and ongoing expenses. As an organization currently developing and implementing an in-house pharmacy model, these additional requirements would create substantial barriers and may delay or limit our ability to expand pharmacy services in our community. IV. Risk to Rural Access Rural health centers like EVCHS rely on 340B savings to support innovative care delivery models, including mobile clinics and integrated services. A rebate model threatens the viability of these programs. In our service area, patients already face limited healthcare infrastructure. Any disruption to medication access or reduction in services will disproportionately impact rural populations, widening existing health disparities. V. Recommendations If HRSA proceeds with any rebate model, we strongly recommend the following safeguards: Exempt Community Health Centers from participation Maintain the upfront discount model for safety-net providers Require standardized processes across manufacturers Ensure timely and enforceable rebate payments Exclude clinic-administered drugs from the rebate model Explore alternative solutions, such as a national, neutral claims clearinghouse Conclusion Henderson County Rural Health Center strongly urges HRSA to reconsider the implementation of a rebate model for Community Health Centers. This proposal represents a fundamental shift away from the intent of the 340B program and places an unsustainable burden on safety-net providers. For EVCHS, the impact would be immediatereduced access to medications, increased financial strain, and diminished ability to serve our most vulnerable patients. The patients we serve depend on the stability and affordability that the current 340B model provides. We appreciate the opportunity to submit comments and welcome continued dialogue on this critical issue. Sincerely, Shannon Courson Chief Executive Officer Henderson County Rural Health Center, Inc. d/b/a Eagle View Community Health System
HRSA-2026-0001-1858Health Ministries Clinic2026-04-20T04:00Z21,809 chars
See attached file(s) HMC Halstead 126 Main St. Halstead, KS 67056 Tel: (316) 835-3700 Fax: (316) 283-1333 HMC Dental 805 Medical Center Dr. Newton, KS 67114 Tel: (316) 804-7785 Fax: (316) 283-0453 Health Ministries Clinic COMMUNITY HEALTH CENTER 720 Medical Center Drive Newton, KS Tel: (316) 283-6103 l Fax: 316-283-1333 I I April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Health Ministries Clinic, a Community Health Center in Kansas, I appreciate the opportunity to comment on HRSA's Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program. Health Ministries Clinic is supported in its mission by our state Primary Care Association, the Community Care Network of Kansas (CCNK). We submit these comments because the proposed shift from the longstanding upfront 340B discount to a rebate- based construct would impose severe and unnecessary financial and administrative burdens on safety-net providers and would ultimately reduce access to care and affordable medications for the medically underserved. Summary of Recommendations: In short, Health Ministries Clinic urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSA's and manufacturers' stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that... govern the approval of manufacturers rebate plans" must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, Health Ministries Clinic will seek to explain: A. The importance of 340B savings to Kansas CHCs' ability to provide high-quality, affordable primary care, behavioral health, and dental care to low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirelyresulting in avoidable harm to patients' health. D. Why HRSA should never impose a mandatory rebate model on covered entitiesand why, if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs' low-income patients rely on. CHCs serve as the backbone of the nation's safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsuredl. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs' financial stability and their ability to provide these services at affordable rates to low-income and uninsured patients. Consistent with federal law121 and regulationL4-I, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they serve. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites services patients rely on. In Kansaswhere many communities are rural and medically underservedhealth centers routinely use 340B savings to help sustain services such as integrated behavioral health, substance use disorder treatment and recovery supports, care coordination and case management, chronic disease management, preventive care outreach, enabling services (e.g., translation and transportation support), and sliding-fee pharmacy assistance programs. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients' needs. B.A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will 1 Source: https://data.hrsa.gov/topics/healthcenters/udsloverview/national still force CHCs to borrow substantial amounts of cash. Comments submitted by Kansas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs' buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last year's proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve- outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to, in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that many health centersincluding those serving rural and frontier communitieshave already been forced to make difficult tradeoffs in response to reduced pharmacy-related revenue and rising operating costs, such as delaying hiring, leaving vacancies unfilled, reducing enabling services, limiting outreach and care management capacity, scaling back hours at certain sites, or postponing investments in behavioral health integration and dental expansion. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the "standards and procedures that should govern the approval of manufacturers rebate plans." While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to "advance" CHCs enough rebates for cover the greater of two full package sizes or two months' worth of dispense. This policy would go a long way to rnitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHC's average number of dispenses for that drug over a typical two-month period. This "two-package or two-month" standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summer's FRN stated that "no additional administrative costs of running the rebate model shall be passed onto the covered entities." However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of "undispensed" units. "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs' costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturer's rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BINIPCN data to implement the lRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs' contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturer's unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were nnreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, I-IRSA's primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP)deduplication"2 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion 2 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Sincerely, atthew 'dt, LSCSW Chief ecutive Officer Health Ministries Clinic Newton, Kansas In closing, the sustainability of our nation's primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSA's decisions in this area. A rebate model would directly threaten CHCs' financial stability and force reductions in the essential services these patients rely on. We appreciate HRSA's commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs' financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nation's safety net. For further infoimation, please contact Matthew Schmidt, CEO, Health Ministries Clinic, 316- 281 -7314, mschmidt @hmcks.org Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should "be borne by the manufacturer." Time and effort from CHCs' pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drug's discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs' financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs' costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1859Tri County Community Health Council, Inc d/b/a CommWell Health2026-04-20T04:00Z44,319 chars
See attached file dzAcc-- CommWell Health April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Tri-County Community Health Council, Inc. d/b/a CommWell Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate rnodel. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: CommWell Health anticipates a loss of $250,000 from entity-owned pharmacy operations due to the administrative hurdles of rnanual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. CommWell Health is a CHC headquartered in southeastern North Carolina, providing accessible, affordable, and high-quality outpatient care to low-income, uninsured, and medically underserved residents across five counties. Founded in 1976 and celebrating 50 years of service in 2026, CommWell Health operates 13 campuses and two mobile units across Sampson, Johnston, Pender, Bladen, and Brunswick counties, and will open a new cornprehensive medical, dental, and behavioral health site in Coats, Harnett County later this year. CornmWell Health serves nearly 27,000 patients annually, offering a broad range of services including primary medical, dental, behavioral health, pediatrics, OB/GYN, HIV/AIDS care, Medication for Opioid Use Disorder (MOUD) treatment, mobile mammography, and in-house and mail-order pharrnacy services. Supporting these clinical services, CommWell Health provides enabling and wraparound services including WIC, nutrition counseling, care coordination, transportation assistance, centralized scheduling, specialist referrals, and financial counseling ensuring patients receive holistic, connected care tailored to their needs. CornmWell Health is accredited by the Joint Commission in Ambulatory and Behavioral Health Services and holds Patient-Centered Medical Home recognition. ComrnWell Health's operations are sustained through a mix of Section 330 federal grant funds, state and local grants, and third-party revenue including Medicaid, Medicare, and private insurance a funding structure that, while diversified, remains subject to Congressional direction and legislative change at every level, underscoring the critical importance of programs like 340B in sustaining the organization's ability to serve its most vulnerable patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B prograrn has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent rnade clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For CommWell Health in particular, this means it will irnpact: About 27,000 patients served each year Over 51,000 340B drugs dispensed from our in-house pharmacy each year 340B revenue supports medical, dental, and behavioral health patient care services as our community benefit and charity care costs exceed $11.3 million per year We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The rnajority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 2 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. tt:is: w. ajou m a I s.oreidoi/pclf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUFI Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. 1ps:/iwww.samhsa.uovidala,data-we-co11ectinsduh-national-surveydrue-use-and-health/natiunal-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23:13:773999. doi: 10.3389/theur.2022.773999. PMID: 35280262; PMC1D: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally irnpossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have Ihnited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessrnent illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates prograrn savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: ComrnWell Health provided $7,088,921 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 4 Staffing Impact: CommWell Health anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and cornpliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CommWell Health anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' CommWell Health estimates needing 1 additional FTE to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. CommWell Health estimates the cost to hire 1 additional FTE to be between $225,000 and $250,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of rnonitoring rebate claims and payments. The lack of standardization and likely varying requirements across rnanufacturers will force CHCs to use rnultiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CommWell Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. PharmacN Software & Third-Partv Administration Changes Navigating this pilot requires rnore than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharrnacy software, pay for custom dashboard modifications, and design new internal workflows before a single rebate is ever received. 7 Internal NACHC assessrnent (99 responses). 8 Ibid. 5 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Costs: For our CHC, which serves about 27,000 patients, we anticipate an increase in expenses - including labor, IT, and carrying costs funds that will be diverted away from patient care. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. CommWell Health would need to integrate our Epic EHR and Pioneer Rx pharmacy system with complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend several hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. Clinic Administered Druo: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are cornmon in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs prirnarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D clahns in 2026 & 2027 and then 9 Intemal NACHC survey data 6 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their inission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CommWell Health makes medications affordable for our patients by offering drugs on a sliding- scale discount with minimal dispensing fees. Through the Express Discount Meds mail order service, prescription medications are sent directly to patients' homes with shipping covered entirely by the ComrnWell Health Eagle Foundation, which is funded by donations frorn CommWell Health staff and from the broader community. Since beginning free home delivery in 2022, we have seen the percentage of patients with poorly controlled diabetes decrease from 33% to 26% in 2025, and the percentage of patients with controlled hypertension increase from 59% to 11 Such discounts are subject to potential legal and contractual restrictions. Imps: libphc.hrsa.Elovicomnliance/com iance- manual 'cha rter9#footnotc I 0 7 75% in 2025. Programs like Express Discount Meds depend on an operational environment where resources flow toward patients rather than toward adrninistrative overhead and manufacturer reconciliation cycles. The rebate model puts that environment at risk. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assurning a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payrnent time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirernent for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Dru2. Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all 121ittls::/enlivenhealth.coiblw2Jvcar-end-business-health-check-kcv-mctries-everv-oharnlacv-owner-should-review 8 CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to detennine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual prograrn increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prornpt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $5.6 million per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $104,000 per year to purchase these sarne drugs at the 340B ceiling price. This represents a 5,300% increase in upfront capital required for procurement. The rebate model forces a false choice on organizations built to serve this mission. ComrnWell Health operates a financially disciplined, high-performing health center - precisely the kind of safety-net provider the 340B program was designed to sustain. Yet under this model, we would be compelled to make defensive resource decisions not because our operations are failing, but because pharmaceutical manufacturers (with multi-billion-dollar margins) would be holding cash that belongs in our patients' care. That is the fundamental problem. The uncertainty of rebate timing - and the near-certainty, based on manufacturer behavior to date, that payments will be delayed or contested - does not just create cash flow risk. It forces health centers to treat their own program savings as contingent revenue. When savings become contingent, what patients receive depends on when manufacturers pay. We evaluate which services to keep based on whether we can afford to wait for a rebate. Staffing decisions get made around administrative compliance rather than clinical need. Hours get evaluated against financial exposure rather than community demand. 13 httos://340boricinv.hrsa.gov/ 14 illtDS://WWW.CITIS.L'OV/fileti!7.10/Seleeted-drut-list-newliated:prices-also-known-Maximum-t'air- )1-ices-statute-Li 1.zip 9 These decisions should not exist. The 340B program was built so they would not have to. A rebate model does not just shift financial risk to covered entities - it transfers decision-rnaking authority over patient care to manufacturers who bear no accountability for the communities we serve. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CornmWell Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to rernain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, ComrnWell Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $750,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. CommWell Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront drug spend by $13.5 million over the next 3 years. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize litnited financial reserves or take out a line of credit. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on CommWell Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 10 a. Financial Impact of Rebate Denials and Delays CommWell Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed rnanufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $560,000. This is a surn our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This rnay lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin rnargins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systernatic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements rnust apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.fcdcralreeisteE2ovidocuments/2025 /01/2025-14o I 9,13401)- wouram-notice-a >>lication- :ifocess-for-the-340b- rebate-model-pilot- wouram 11 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcernent framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data cornponents. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignrnent with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed inforrnation about the patients served by the program. Given the compliance infrastructure and strict statutory requirernents already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to rnanage cashflow issues. 12 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to rnanufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CommWell Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B prograrnto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CommWell Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CommWell Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Christopher Vann, Sr. Director of Development and Government Affairs at CVann(&,commwellhealth.org. Sincerely, (AAAA_cc,kcu Tamara Dunn, CEO Tri-County Community Health Council, Inc. d/b/a CommWell Health 13
HRSA-2026-0001-1860UW Medicine2026-04-20T04:00Z20,363 chars
See attached file(s) 110593391.1 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: RFI: 340B Rebate Model Pilot Program (HHS Docket No. HRSA2026 03042) Dear Administrator Engels: UW Medicine appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding the potential use of backend rebates in place of upfront 340B discounts. We understand HRSA is considering a rebate-based model to implement 340B ceiling prices for 25 drugs: 10 drugs subject to Medicare Part D negotiated prices in 2026 and an additional 15 beginning in 2027. UW Medicine operates Harborview Medical Center and UW Medical Center, two public hospitals that are critical to delivering high quality care to safety-net populations and training the next generation of physicians. UW Medicine is the leading safety-net provider of healthcare to under and uninsured across our state and region, providing over $502 million in uncompensated care including over $69 million in charitable care in FY 2025. UW Medicine employs over 35,000 staff providing approximately 1.8 million outpatient visits and nearly 60,000 inpatient admissions annually. Our system welcomes 280 incoming medical students each year across the WWAMI region (Washington, Wyoming, Alaska, Montana, and Idaho) training 68% of medical residents in Washington. UW Medicine is also Washington States largest provider of behavioral health services and operates numerous community-based clinics, including programs serving people experiencing homelessness. UW Medicine hospitals, University of Washington Medical Center and Harborview Medical Center, are covered entities under Section 340B of the Public Health Service Act, 42 U.S.C. 256b (340B Statute). UW Medicine strongly opposes any shift to a backend rebate-based model and urges HRSA to preserve the upfront discount structure that has governed the 340B program for more than 30 years. As Washington States largest safety-net health system, our 340B program is built on decades of reliance on upfront discounts, including how we manage inventory, structure compliance processes, partner with vendors, and deploy resources to support and expand patient care. Transitioning to a rebate model would disrupt these well-established reliance interests and fundamentally alter our ability to deliver care to underserved and medically complex populations. The 340B drug discounts that UW Medicine receives go to support our clinical care in our homeless health services including street level clinics that provide direct access. The discounts allow us to give discounted drug prescriptions to our under and uninsured patients who otherwise could not afford their treatment. Moving to a rebate model will delay and in some cases deny this care, defeating the intent of purpose of the 340B program as passed by Congress. Respectfully, HRSAs Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1 110593391.1 assertion that such a model would have minimal impact on covered entities does not reflect the operational realities of a large, integrated health system like UW Medicine or the operational realities of how the 340B Program has functioned for decades. A rebate model would also impose significant administrative complexity and cost, diverting critical resources away from patient care in a manner that conflicts with the statutory purpose of the 340B program, which is to stretch limited resources and expand access for vulnerable populations. UW Medicine does not agree that a backend rebate system is necessary to improve program integrity or to address nonduplication under the Medicare Drug Price Negotiation Program. HRSA already conducts routine audits demonstrating strong compliance among covered entities, and manufacturers have not established systemic integrity concerns within the program. We are also concerned that manufacturers interest in claim level data extends beyond program integrity and into commercial rebate arrangements that are unrelated to the intent of the 340B Statute. Covered entities should not be required to finance or operate these objectives. For these reasons, UW Medicine strongly urges HRSA not to implement a rebate model that would shift financial and administrative burden onto safety-net providers and undermine access to care for the patients we serve. We request that HRSA issue a proposed rule and seek and consider stakeholder comments prior to changing the 340B upfront discount structure to any alternative structure. Likewise, we request that HRSA permit stakeholders to review and comment on any manufacturer rebate plan submissions prior to approving the same. HRSA and manufactures must be transparent when attempting to change a program relied upon by safety-net hospitals for decades. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Significantly Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers UW Medicine understands that HRSAs proposed rebate model would apply to at least 25 drugs, significantly expanding the scope beyond earlier proposals. For a health system of our size and complexity, this would require us to purchase these drugs at substantially higher, non-340B prices, maintain inventory across our hospitals and clinics until dispensed, which may take weeks or months, and then submit claims data and wait for rebate reconciliation and disputes to resolve. This represents a fundamental shift from the longstanding 340B model of upfront discounts and introduces significant operational and financial disruption. Even if rebates are issued within 10 days of submission (likely longer because manufacturers will pay the rebate 10 days from when they deem data submission is complete) and validation of the data (note validation was not a factor in HRSAs original pilot program, but is implemented by manufacturers here to further delay paying out rebates), UW Medicine would still be required to carry the cost of these higher priced drugs prior to receiving a rebate or needing to dispute a denied rebate. This would tie up millions of dollars in resources that are currently used to support patient care, expand access to medications, and fund critical services for underserved and medically complex populations, resources that our system has long relied upon under the established structure of the 340B program. Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1 110593391.1 Requiring us to purchase the initial 25 IRA selected drugs at higher, non-340B prices and wait for rebates, even within 10 days, would result in approximately $22M in additional upfront drug spend over an annual period. Again, this number only pertains to the initial 25 drugs. This increase in cost would limit our ability to provide immediate financial assistance and increase the risk of cost-related barriers to care. Over time, this shift would erode the effectiveness of the 340B program at UW Medicine, reducing our ability to sustain programs that expand access to medications and support underserved and complex patients across our system. Congress never intended for safety-net hospitals to float such large numbers to for-profit drug companies which is precisely why the 340B program has functioned as an upfront discount program for several decades. UW Medicine will need to continue paying wholesaler invoices on a weekly basis to preserve critical prompt pay discounts that help offset overall drug costs. However, under a rebate model, we would be required to purchase drugs at higher wholesale acquisition cost (WAC) prices upfront, rather than 340B pricing, while awaiting delayed manufacturer rebates. This creates a significant cash flow burden, as we are effectively financing the cost differential during the rebate period. Even with a 10-day repayment window, the requirement to consistently carry higher upfront drug costs, while maintaining our prompt pay obligations, introduces substantial and ongoing financial strain on our system. Again, we cannot imagine Congress intended to have safety-net hospitals finance a rebate program that only benefits for- profit drug companies. A Rebate Model Will Significantly Increase Administrative Costs Thus Negating the Intent of the 340B Program and Prevent UW Medicine from Providing Increased Patient Care Opportunities to Instead Pay for the Management of the Rebate Program UW Medicine has always relied on upfront 340B discounts and an upfront discount regulatory structure, and has not operated under a rebate-based model, making the full scope of rebate related costs difficult to quantify. However, based on our attempted preparation for HRSAs withdrawn rebate pilot, as well as our ongoing experience submitting claims data through 340B ESP for contract pharmacy arrangements, we have identified significant operational barriers that would result under a rebate model. These challenges are particularly acute for medical claims, where data are inherently inconsistent and delayed. Claims are often not submitted to payors until several days after a drug is administered, and subsequent changes in patient insurance, claim adjustments, and reversals introduce additional complexity. There is also limited clarity on how reversed or corrected claims would be treated, leading to discrepancies and uncertainty in what constitutes a complete and accurate submission. And under the withdrawn rebate pilot, HRSA would largely rely on drug companies to adjudicate such issues contrary to Congresss intent to have HRSA administer the program. These barriers, identified during pilot preparation and through real world data submission processes, would result in frequent data mismatches, notifications of incomplete submissions, and a substantial need for manual reconciliation. In our experience, manufacturers defined data requirements, such as those implemented through 340B ESP, have been inconsistent and difficult to operationalize, requiring significant IT build and staff resources. Under a rebate model, these challenges would directly translate into delays in rebate payments for a significant amount of claims, increased administrative burden, and a higher risk of Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1 110593391.1 disputes, all of which would divert critical resources away from patient care and create ongoing financial uncertainty for UW Medicine. Implementation of a 340B rebate model also would require significant new staffing and infrastructure at UW Medicine, resulting in substantial and ongoing administrative costs layered on top of an already complex program. UW Medicine currently invests approximately $30 million annually to operate and maintain its 340B program, inclusive of third-party administrative fees, legal support, external auditing, split-billing software, and internal FTEs dedicated to compliance and operations. Based on our current experience supporting IRA Maximum Fair Price (MFP) processes, we estimate that the proposed rebate model targeting MFP eligible medications (CY26 and CY27) are associated with over 38,000 annual transactions requiring submission, validation, and tracking. Critically, this model would require 100% claim-level review to ensure accuracy and compliance prior to submission. Assuming each claim requires approximately 20 minutes to review, UW Medicine estimates an incremental increase of approximately $0.97 million annually in salary and benefits for 100% compliance review. As additional drugs are added each year, this cost would scale with the number of transactions. To operationalize this process, UW Medicine anticipates the need for seven additional FTEs in the initial year of the pilot, with an additional seven FTEs required annually as more drugs are incorporated into the 340B rebate model. These resources would support data submission, rebate tracking, payment validation, dispute management, and escalation through HRSAs Administrative Dispute Resolution (ADR) process. Notably, these estimates do not include the additional time and resources required from data analysts, IT teams, and accounting staff who would be continuously engaged in supporting data extraction, reconciliation, financial tracking, and reporting associated with this process. These estimates also don not reflect the time and expense of internal and external resources needed to dispute rebate denials related to the 38,000 transactions. UW Medicines claims data reside across six separate systems, each with distinct data structures and extraction processes, with no automated mechanism to aggregate and submit data in the format required by manufacturer designated platforms such as 340B ESP. This requires significant manual effort and IT resources to extract, normalize, and validate claims on an ongoing basis. We estimate that approximately 3,200 claims per month would need to be submitted for the 25 drugs, each requiring careful validation to ensure compliance. Compounding this burden, rebate payments are typically made on a lump sum basis and are not tied to individual claims, making it exceptionally difficult for UW Medicine to reconcile payments, confirm accuracy, and ensure full reimbursement. This lack of transparency necessitates additional manual tracking and auditing processes to identify underpayments or missing rebates. Dispute resolution would further increase the administrative burden and cost because the systems available for a rebate program (e.g., Beacon and Truzo) absolve themselves of any liability for any issues with the rebate program, leaving ADR as the only available avenue for covered entities to try to obtain wrongfully denied rebates. HRSAs ADR process was not designed to handle the magnitude of ongoing ADR claims that will be submitted. Moreover, for a covered entity to be successful in its claim that a rebate was wrongfully denied, patient data will be required to be submitted to prove the patient was an eligible 340B patient, thus requiring another data process submission to occur. This entire process will further Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1 110593391.1 exacerbate the increased costs to covered entities and divert resources from patients. While imprecise because HRSA has not released a rebate model for public review and comment, we estimate disputes alone will cost our organization several millions of dollars per year. UW Medicine has already experienced significant variability in manufacturer processes under the IRA/MFP framework, with differing submission portals, data requirements, and timelines. Some manufacturers have taken months to respond to disputes, and in certain cases, resolved claims have been re-opened by the manufacturer, requiring repeated review and resubmission on a claim-by-claim basis. Under a 340B rebate model, these challenges would be magnified by UW Medicine given the broader scope and volume of claims, resulting in sustained operational strain, delayed payments, and diversion of critical resources away from patient care. The 340B program can and should be a simple program. Covered entities qualify for 340B via the statute at 42 U.S.C. 256b. They should continue to be afforded time-of-purchase ceiling price discounts and should not be expected to shoulder the burden of a complex drug pricing structure that they did not create (e.g., varying price points, commercial rebates, etc.). HRSA Should Prohibit All Rebate Denials If HRSA elects to proceed with development of a 340B rebate model despite the significant concerns outlined above, UW Medicine strongly urges HRSA to establish clear and enforceable guardrails to prevent additional administrative burden and financial harm to covered entities. At a minimum, HRSA should prohibit manufacturers from denying rebates to 340B hospitals, including explicitly precluding denials based on alleged Medicaid duplicate discounts or diversion. These determinations are often complex, rely on incomplete or external data sources, and are not fully within the control of covered entities operating within payer and pharmacy network constraints. Allowing such denials would introduce substantial operational risk, cash flow disruption, and uncertainty for safety-net providers like UW Medicine, undermining the stability of the 340B program. Permitting manufacturers to deny rebate claims would also create a significant new administrative burden, requiring covered entities to engage in disputes with manufacturer designated vendors while managing delays in reimbursement. Manufacturers would continue to receive claims level data and retain their statutory audit rights, which are sufficient to address program integrity concerns without granting unilateral denial authority. A Rebate Model Is Not Necessary for the Medicare Drug Price Negotiation Program (MDPNP) Deduplication Any issues with the MDPNP process can be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. UW Medicine respectfully submits that a 340B rebate approach is not operationally feasible for covered entities and would introduce significant financial, administrative, and compliance burdens that are inconsistent with the statutory structure and intent of the 340B program. Requiring covered entities to purchase drugs at non-340B prices (at a price point higher than what non-340B hospitals pay) and subsequently seek rebates would create material cash flow strain, increase administrative complexity, and heighten the risk of delayed or disputed repayments, ultimately undermining the ability of safety-net providers to deliver timely and affordable care. Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1 110593391.1 There are, however, established and effective alternatives that achieve the Inflation Reduction Acts (IRA) nonduplication requirements without fundamentally altering the 340B purchasing framework. Oregon Medicaids approach demonstrates a practical and administratively efficient model, under which covered entities submit limited, retrospective 340B claims data to the states rebate contractor to enable exclusion of 340B claims from rebate invoicing. This process prevents duplicate discounts while preserving upfront 340B pricing, minimizing operational disruption and avoiding unnecessary financial risk to providers. A similar approach could be operationalized within Medicare through CMSs existing infrastructure, including the Medicare Transaction Facilitator (MTF), which already leverages targeted claims level data to support administration of Maximum Fair Price (MFP) requirements. For these reasons, UW Medicine strongly urges HRSA and HHS to reject a rebate-based model and instead pursue prospective or limited retrospective claims identification approaches, modeled on Oregons Medicaid framework and aligned with CMS systems, to ensure compliance with the IRAs nonduplication provisions. These alternatives would more effectively promote program integrity, reduce administrative burden, and preserve access to care for the patients and communities the 340B program is intended to serve. We appreciate HRSAs leadership in administering and safeguarding the integrity of the 340B program and value the opportunity to provide input through this Request for Information. UW Medicine respectfully submits these comments to share our operational experience and concerns regarding a potential rebate model and its impact on safety-net providers and the patients we serve. We hope HRSA carefully considers these perspectives as it evaluates next steps and potential policy direction. Please do not hesitate to contact us if additional information would be helpful. Sincerely, Timothy H. Dellit, M.D. CEO, UW Medicine Executive Vice President for Medical Affairs Paul G. Ramsey Endowed Dean of the School of Medicine University of Washington Docusign Envelope ID: 73C1174F-E0AE-49A4-B55A-49401DA5F8B1
HRSA-2026-0001-1861Valley Health Partners Community Health Center2026-04-20T04:00Z48,830 chars
April 15, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Application Process for the 340B Rebate Model Pilot Program (HHS 2026 03042) Dear Director Britton, On behalf of Valley Health Partners Community Health Center (VHPCHC), thank you for the opportunity to submit comments in response to the Application Process for the 340B Rebate Model Pilot Program. We also appreciate HRSAs decision to extend the public comment deadline, which allowed community health centers the time necessary to carefully evaluate the operational, financial, and patient care implications of the proposed rebate model. Valley Health Partners is a Federally Qualified Health Center Look Alike and a 501(c)(3) nonprofit organization dedicated to providing comprehensive, affordable care to medically underserved populations across the Lehigh Valley and surrounding regions. The 340B Drug Pricing Program is foundational to our ability to fulfill this mission. 340B savings are not ancillary revenue; they directly support medication affordability, sliding fee discounts, enabling services, workforce expansion, and outreach programs that reach patients who would otherwise go without care. The enclosed document outlines our significant concerns with the proposed rebate model, including its impact on patient access to essential medications, the financial instability created by requiring upfront purchases at wholesale acquisition cost, and the substantial administrative and IT burdens placed on community health centers. As detailed in our submission, the rebate model represents a fundamental shift of financial risk from manufacturers to safety net providers and introduces uncertainty that threatens both patient care and organizational sustainability. Based on our analysis, Valley Health Partners strongly urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. If implemented without such an exemption, the rebate model would undermine the statutory purpose of the 340B program, disrupt long standing pharmacy operations, and create new barriers for uninsured and underinsured patients who rely on upfront discounts at the point of care. We appreciate HRSAs ongoing engagement with covered entities and welcome continued dialogue on policies that preserve the integrity of the 340B program while protecting access to affordable medications for our most vulnerable patients. Please do not hesitate to contact us if additional information would be helpful. Sincerely, Veronica Gonzalez Chief Executive Officer Valley Health Partners Community Health Center Valley Health Partners Community Health Center 400 North 17th St, Suite 310 Allentown, PA 18104 April 15, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Valley Health Partners Community Health Center (VHPCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: VHPCHC expects a loss in savings from contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: VHPCHC anticipates significant increases in operational costs. We expect increases in costs due to increased staffing and IT infrastructure needs for our entity-owned pharmacy, contract pharmacy, and clinic-administered drug dispensing programs. Who We Are: Valley Health Partners Community Health Center (VHPCHC) is a Federally Qualified Health Center Look-Alike (FQHC-LA) and designated as a 501(c)(3) non-profit dedicated to providing accessible and high-quality health care to all, regardless of ability to pay. Founded in 2020, VHPCHC offers primary care, pediatrics, mental health, womens health, dental services, vision care, chiropractic medicine, pharmacy services, and specialized programs such as Street Medicine and Veteran Health. VHPCHCs mission is to partner with the people of our community to achieve health and wellness through the delivery of extraordinary care that is compassionate, accessible, and affordable in a family-centered and welcoming environment. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For VHPCHC in particular, this means it will impact: More than 55,000 patients Current administration costs for our 340B program will increase to over $3 million Wrap-around support programs currently provided to VHP patients at no cost. Valley Health Partners exists to serve patients who would otherwise go without. The 340B Drug Pricing Program is not an abstract financial mechanism for our organization; it is the engine that makes whole-person, community-rooted care possible across the Lehigh Valley. The savings generated through 340B directly fund enabling services that reach patients in shelters, on street corners, and in community centers, connecting them to preventive care, chronic disease management, and health screenings. They sustain our Street Medicine program, which delivers direct medical care to individuals experiencing homelessness who are least likely to walk through any clinic door. They support veterans' health services, subsidize office visits for uninsured patients, and help us maintain behavioral health services, including care for elderly patients on fixed incomes, who cannot pay market rates. Across our sites in Allentown, Easton, and the Poconos, 340B savings allow us to offer deeply discounted drug prices to patients who would otherwise skip or ration their medications. A patient managing diabetes or hypertension who cannot afford their prescriptions is not truly being treated. 340B closes that gap. A shift to a rebate model would disrupt this entire ecosystem. Rebates reconciled after the fact by pharmacy benefit managers offer no guarantee that savings flow back to health centers and the patients who need them most. For a Federally Qualified Health Center Look-Alike operating on thin margins in one of Pennsylvania's most medically underserved communities, that is not a policy adjustment; it is a direct threat to the programs our most vulnerable neighbors depend on. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program would impose a significant and largely unquantifiable administrative burden on Valley Health Partners at a time when our resources are already stretched thin. Unlike larger health systems with dedicated pharmacy infrastructure, we do not have the staffing or IT capacity to absorb the compliance demands this model would require, and we cannot predict what that burden will ultimately look like in practice. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 2025 UDA Data, HRSA (hrsa.gov) What we do know is this: the potential benefit of any savings returned through a rebate model must be weighed honestly against the cost of administering it. Managing multiple manufacturer rebate requirements would demand new workforce investments, including pharmacy expertise we do not currently have on staff, as well as IT infrastructure upgrades to handle data submissions, payment reconciliations, and dispute processes for denied rebates. Those are real costs we would incur with no assurance of getting savings back. That uncertainty is itself the problem. Under the current 340B model, savings are realized at the point of dispensing and can be directed immediately toward patient care and program support. A rebate structure introduces delay, complexity, and risk into that equation. For a health center operating without a financial cushion, the prospect of investing administrative resources upfront, while waiting on reimbursements that may be disputed, delayed, or denied, represents a level of financial exposure we are not positioned to absorb. The shift does not simply change how savings are received; it fundamentally increases the risk that they never fully materialize for the patients who need them most. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: VHPCHC provided almost $7 million in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: VHPCHC anticipates needing at least 2-3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, VHPCHC anticipates additional costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.5 VHPCHC expects to hire 2-3 additional FTEs to handle the administrative process related to the 340B rebate program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.6 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, 5 Internal NACHC assessment (99 responses). 6 Ibid. increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. In the Lehigh Valley job market, VHPCHC expects this cost to be approximately $105,000 per additional employee including salary and benefits or $210,000-$315,000 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We expect 50-60 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. VHPCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our internal workflows (changes in pharmacy software, dashboard modifications, data analytics) which will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. VHPCHCs entity-owned pharmacies expect additional needs to be able to manage prescription drug pricing from our pharmacy management system. For our Medication Benefit Program that provides 340B pricing to our eligible patients, we will need to be able to determine pricing on a product that will now be coded with wholesale acquisition cost instead of the 340B pricing. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 59 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across over 60 different pharmacy locations (contract and entity-owned) to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Lehigh, Northampton, and Monroe county areas with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,7 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.8 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 7 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9 Internal NACHC survey data The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Through VHPCHCs Medication Benefit Program, we offer eligible patients medications at prices determined by a sliding fee scale. In many pricing tiers, the patient cost is based on the cost of goods soldspecifically, the 340B price of the medication. If the cost of goods cannot be determined at the time the medication is dispensed, we are unable to accurately calculate the patients price. Charging the patient the full retail price and later issuing a rebate if or when reimbursement is received is not an appropriate or acceptable approach. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2- week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,300,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $450,000 to purchase these same drugs at the 340B ceiling price. This represents a 700% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, VHPCHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as our care management nursing staff that help patient 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip coordinate their care, social workers who help coordinate services for our patients in need of extra help, and vision and dental clinics in our schools for children unable to access care elsewhere. Workforce & Staffing: As a growing Federally Qualified Health Center Look-Alike, Valley Health Partners is actively expanding enabling services, including care coordination, community health worker support, and patient navigation, to our newer practice sites across the Lehigh Valley and Pocono regions. These services are foundational to our mission and essential for patients who face barriers to care well beyond the exam room. The 340B program makes this expansion possible by providing the financial flexibility to invest in staffing, training, and infrastructure at sites that are still building the capacity to serve their communities fully. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our almost 6000 uninsured patients from rationing their insulin or heart medication. A rebate model would fundamentally disrupt that trajectory. The administrative burden alone, tracking, reconciling, and reporting rebate transactions across a growing network of sites, would require us to redirect limited personnel away from direct patient support and toward compliance and program administration. For an organization in an active growth phase, this is not a marginal concern. It would force us to choose between standing up enabling services at new locations and ensuring we can manage the administrative demands of a restructured 340B program. Our patients, many of whom are uninsured or underinsured and rely on those wraparound services to stay connected to care, would bear the consequences of that impossible tradeoff. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. VHPCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, VHPCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $509,090.72. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. VHPCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $282,828.18 in 2027 and $318,256.07 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution as funds are currently dedicated to supporting our clinics and patient care. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on VHPCHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays VHPCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $500,000 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state- level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot- program A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion VHPCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. VHPCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Valley Health Partners Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nathan Boateng, Chief Community Impact Officer (nathan.boateng@valleyhealthpartners.org). Sincerely, Veronica Gonzalez, CEO Valley Health Partners Community Health Center
HRSA-2026-0001-1862Children's Hospital of The King's Daughters2026-04-20T04:00Z5,503 chars
Please see attached file for comment. Children's Hospital ofThe King's Daughters Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information Manufacturer Rebate Models under the 340B Drug Pricing Program - HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, On behalf of Children's Hospital of The King's Daughters, Inc. (CHKD), we appreciate the opportunity to provide comments on Health Resources and Services Administration's (HRSA) Request for Information: 340B Rebate Model Pilot Program. CHKD's 266 licensed bed facility is Virginia's only freestanding children's hospital and serves as the pediatric referral center for all of southeastern Virginia, Virginia's Eastern Shore, and northeastern North Carolina with comprehensive medical, surgical and psychiatric services dedicated exclusively to children and adolescents. CHKD is the sole provider of countless essential pediatric services for tens of thousands of children across our service region. CHKD's reach also goes far beyond our region, with children from throughout Virginia as well as many from across the U.S. and internationally benefitting from CHKD's unique services. CHKD participates in the 340B Program as a PEDS-covered entity in Norfolk, Virginia. CHKD has a DSH percentage of 55%, far surpassing the minimum DSH requirement of 11.75%. According to 340B Health, "340B hospitals provide 67% of all uncompensated and unreimbursed care in the United States," and the average disproportionate share (DSH) hospital would advance $72.2 million to manufacturers annually. With CHKD's $53 million Medicaid shortfall, per our FY24 340B Impact Profile data, any financial impacts from a rebate model program have the potential to negatively impact pediatric care in Virginia and beyond. In response to the proposed 340B Rebate Model Pilot Program, CHKD opposes the pilot based on the significant financial impact and administrative burden it would impose on covered entities. This pilot would set a concerning precedent that threatens the financial stability of our health system, which serves tens of thousands of pediatric patients each year. The below estimates CHKD's known financial risk, but CHKD also anticipates significant additional fees, service costs, etc. that are not yet known. CHKD would advance $80,000 to $100,000 annually in wholesale acquisition cost (WAC) carrying costs for the initial 10 MFP drugs. CHKD anticipates an estimated $50,000 loss due to change in wholesaler prompt-pay discount terms. If the pilot program continues to expand or the 340B program transitioned to a complete rebate model, the below details potential financial risk to CHKD: o CHKD considers its full 340B savings at risk due to the significant administrative burden imposed and added WAC carrying costs. In FY25, our 340B savings were - $17.2 million. o The administrative burden imposed on CHKD directly would require an additional 1 to 2 full-time 340B analysts at a cost of $100,000 - 200,000 for salary and benefits. Oversight of the 340B Drug Pricing Program already requires rigorous processes for purchasing and auditing. The Rebate Pilot Program would further disrupt normal wholesaler ordering practices by requiring MFP drugs to be placed on separate invoices for internal audits and external submissions to manufacturers. Wholesalers and 340B third-party administrators (TPAs) are not yet equipped to manage these requirements and would need to rapidly redesign their systems to comply. We are concerned that the implementation timeline is too short, leaving hospitals, wholesalers, and TPAs unable to meet the program's requirements. This would create additional financial risk, as failure to meet submission deadlines could result in the loss of critical 340B savings. Children's Hospital ofThe King's Daughters l 601 Children's Lane, Norfolk, VA 23507 Finally, unanswered questions remain regarding package size, particularly in cases where unit-level packages partially expire. Even with a limited list of MFP drugs, the additional work required across purchasing, invoicing, and auditing functions would be substantial. Other examples of unanswered questions are: Mixed-use claims include a UD modifier indicating a 340B purchase. Will the UD modifier be required on MFP drugs? Will hospital claims need to be held pending the rebate decision by the manufacturer? Holding claims further delays reimbursement and creates additional financial strain. I What are the metrics for determining the effectiveness of the pilot program? lf the rebate program is expanded to other drugs after the pilot assessment, it is possible that some covered entities may opt out of the 340B program due to the financial and oversight burden. Shrinkage of the 340B Federal Drug Pricing Program is a goal of the pharmaceutical industry. We recommend that the pilot program be cancelled so that covered entities can continue with the intent of the 340B Program that has been in place with the upfront 340B cost for 30 years: "To permit covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Sincerely, Christopher Foley, MD, FAAP Senior Vice President Chief Clinical Operations Officer Chief Medical Officer 340B Program Authorizing Official
HRSA-2026-0001-1863Justin Fiske · Shepherdsville, KY, United States2026-04-20T04:00Z1,631 chars
Dear Director Britton: I am writing to express strong opposition to the proposed 340B rebate model and its impact on patients served by Family Health Centers, Inc. in Louisville. FHC serves more than 39,000 patients annually, many living in poverty, uninsured, or facing significant barriers to care. The 340B program is essential to this work. FHC reinvests 100% of 340B savings into patient services, including affordable medications, behavioral health, care coordination, and chronic disease management. Over the past five years, these savings supported over $31 million in care. The proposed rebate model would require health centers to purchase medications at full price and wait for reimbursement. For FHC, this would increase costs for certain drugs from $126,000 to $5.6 million annually, an unsustainable burden. At the same time, the administrative complexity of tracking and reconciling rebates would divert limited resources away from patient care. These changes will directly harm patients. Health centers may be forced to scale back services or stop offering certain medications altogether. Patients will face higher out-of-pocket costs, delays in treatment, and increased risk of complications and hospitalization. There are more effective, less burdensome ways to address duplicate discounts, such as a neutral claims clearinghouse, without destabilizing the health care safety net. I respectfully urge the Health Resources and Services Administration to not implement a rebate model and instead pursue solutions that protect access to care for our nations most vulnerable patients. Sincerely, Justin Fiske PharmD.
HRSA-2026-0001-1864AstraZeneca2026-04-20T04:00Z25,013 chars
Please find attached AstraZeneca's comments to the RFI. April 20, 2026 Submitted electronically to Regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: AstraZeneca is a global, science-led biopharmaceutical company that focuses on the discovery, development and commercialization of prescription medicines, primarily for the treatment of diseases in three therapy areasOncology, Cardiovascular, Renal & Metabolism (CVRM) and Respiratory & Immunology. AstraZeneca operates in over 100 countries, and its innovative medicines are used by millions of patients worldwide. The United States is AstraZenecas largest market and home to 19 research & development, manufacturing and commercial sites. We employ more than 18,000 people and support 92,000 jobs overall across the United States. AstraZeneca appreciates the opportunity to submit comments in response to the Health Resources and Services Administrations (HRSAs) request for information (RFI) regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern implementation of such a rebate model. AstraZeneca commends HRSA for taking a deliberate and pragmatic approach to evaluating whether and how a rebate-based framework could be implemented under the 340B Program. As HRSA recognizes, the 340B Program has evolved significantly in size, scope, and operational complexity since its inception. These developments have introduced structural challenges that the status quo is not well-positioned to address, particularly with respect to transparency, oversight, and the prevention of duplicate discounts and diversion. Thomas J. Engels Page 2 April 20, 2026 While the 340B Program was created to improve access to outpatient drugs for underserved patient populations, the lack of transparency of covered entity purchase of 340B priced drugs has made it increasingly difficult for stakeholders to ensure that the program is operating in a manner consistent with its statutory purpose and requirements. In particular, because the current upfront discount model lacks reliable, standardized mechanisms to verify that 340B discounts are applied only to eligible patients and claims, manufacturers are subject to impermissible duplicate discounts across federal programs. These deficiencies have been amplified by the growth of complex dispensing and distribution arrangements, including contract pharmacy networks, which further limit transparency into how 340B drugs are ultimately used. Against this backdrop, AstraZeneca believes that HRSAs consideration of a rebate model represents a necessary and appropriate policy response. A well-structured rebate framework would introduce a claims- level validation process that is largely absent today, enabling more precise identification of eligible 340B transactions and significantly reducing the risk of duplicate discounts and diversion, both of which are prohibited by the 340B statute. By aligning price concessions with verified utilization data, a rebate model would enhance accountability across stakeholders while preserving the statutory ceiling price protections afforded to covered entities. Importantly, a 340B Rebate Model Pilot Program offers a critical opportunity to test whether these benefits can be realized in a manner that is operationally feasible and administratively workable for both manufacturers and covered entities. If designed with appropriate safeguards, the pilot could demonstrate that a rebate-based approach not only strengthens program integrity, but also provides a more modern and sustainable framework for administering the 340B Program in coordination with other federal drug pricing programs, including the Medicare Drug Price Negotiation Program (MDPNP). AstraZeneca therefore strongly supports HRSAs efforts to evaluate a rebate-based approach and offers the following responses to relevant questions outlined in the RFI to inform the development of a pilot framework that promotes program integrity, enhances transparency, and ensures that the benefits of the 340B Program are appropriately targeted and sustained. I. Section 3: Rebate DenialsAppropriate Guardrails and Standardized Adjudication Processes. AstraZeneca supports the inclusion of clearly defined, transparent, and enforceable guardrails governing rebate denials under a potential 340B Rebate Model Pilot Program. Establishing such guardrails will be critical to ensuring that denials are limited to appropriate and objectively verifiable circumstances, while also promoting consistency, predictability, and administrative efficiency across stakeholders. Thomas J. Engels Page 3 April 20, 2026 Appropriate Grounds for Rebate Denials. At a minimum, the pilot should expressly permit manufacturers to deny rebate claims in circumstances where the claim does not meet threshold eligibility, data integrity, or program compliance requirements. These grounds should include, but not be limited to, the following: Product Eligibility: The National Drug Code (NDC) reflected on the claim is not included among those designated for participation in the pilot program. Temporal Eligibility: The date of dispense or administration falls outside the defined pilot period. Covered Entity Eligibility: The dispensing pharmacy or site of administration is not registered with HRSA as an eligible 340B covered entity location (including appropriately registered child sites or contract pharmacies, as applicable). Inventory Integrity: The Covered Entity has no evidence of a WAC purchase. Covered Entities should only request 340B rebates for packages that they purchased at the WAC price. Duplicate Claims: The same claim has already been submitted by another covered entity, raising potential concerns regarding duplicate discounts or improper claim attribution. Transactional and Data Validation Errors: The claim is deficient due to late submission, aberrant or implausible quantity values, missing or incomplete required data fields, or other indicia of data integrity issues. These categories reflect objective, administrable criteria that can be operationalized through standardized validation rules, thereby reducing subjectivity in the denial process and aligning with HRSAs broader goal of strengthening program integrity. Standardized Processes and Transparency in Denial Adjudication. In addition to clearly defined grounds for denial, AstraZeneca strongly recommends that the pilot incorporate standardized process elements to ensure that rebate denials are communicated, adjudicated, and, where appropriate, corrected in a transparent and efficient manner: First, manufacturer validation guidelines should be fully transparent and prospectively available to covered entities. Providing clear, detailed validation rules will enable covered entities (and their third-party administrators) to pre-validate claims prior to submission, thereby minimizing avoidable denials and reducing administrative burden on all parties. Second, when a denial occurs, the rebate processing platform should provide a specific, standardized denial reason code, accompanied by sufficient detail to allow the covered entity to understand the basis for the denial. This should include identification of the relevant validation failure (e.g., ineligible NDC, missing data element, duplicate claim flag). Third, the rebate processing platform should include robust user support functionality, to help covered entities interpret denial codes and navigate the resubmission process. This will be Thomas J. Engels Page 4 April 20, 2026 particularly important during the early stages of the pilot, as stakeholders adapt to new operational requirements. Finally, where manufacturer validation rules are consistent with HRSA-established design specifications and are implemented in a transparent and standardized manner, AstraZeneca anticipates that the need for direct HRSA intervention in individual denial disputes should be limited. Instead, HRSA oversight can appropriately focus on ensuring compliance with program requirements and monitoring systemic issues, rather than adjudicating routine transactional disputes. Taken together, clearly defined denial criteria, transparent validation rules, and standardized adjudication processes will be essential to the success of a rebate-based model. These elements will help ensure that rebate denials are limited to appropriate circumstances, reduce administrative friction, and promote confidence among stakeholders that the pilot is being implemented in a fair, consistent, and predictable manner. II. Section 5 Manufacturer Efforts to Prevent Duplicate Discounts and the Role of a Rebate Model. AstraZeneca appreciates the opportunity to provide detailed input on manufacturer efforts to prevent duplicate discounts under the 340B Program and related federal payment programs, including Medicaid and the MDPNP. As reflected in HRSAs RFI, the prevention of duplicate discounts remains a central program integrity objective, yet one that is increasingly difficult to achieve under the current framework given limitations in data availability, timing, and claims-level visibility. Practices to Prevent Medicaid/340B Duplicate Discounts. AstraZeneca has implemented a multi-step, data-driven process to identify and dispute potential duplicate discounts between 340B and Medicaid rebates. Specifically, AstraZeneca obtains National Council for Prescription Drug Programs (NCPDP) data through a third-party vendor and integrates that data with the Medicaid Exclusion File (MEF). These datasets are then uploaded into a scrubbing tool designed to flag potential 340B claims. Once Claims Level Detail (CLD) data is received from state Medicaid agencies, that data is similarly uploaded into the scrubbing tool and reconciled against the NCPDP/MEF dataset to identify overlapping claims. AstraZeneca then initiates dispute processes for identified claims, submitting findings to the relevant state along with a reconciliation of the state invoice. All results and supporting documentation are stored within the scrubbing tool and remain accessible for audit and compliance purposes. Importantly, this methodology has its inherent limitations. Determinations of 340B status rely on inference rather than definitive markers, which can lead to uncertainty and a higher volume of open disputes (over scrubbing) and duplicate discounts (under scrubbing). This core process has remained unchanged following implementation of the MDPNP. Thomas J. Engels Page 5 April 20, 2026 2026 Operational Adjustments for MFP/340B Deduplication. Absent the Rebate Model Pilot, AstraZeneca has implemented additional processes, consistent with its Maximum Fair Price (MFP) effectuation plan submitted to CMS, to deduplicate 340B/MFP. With less than 0.5 percent of MFP rebate claims currently including a 340B modifier, there is significant pressure on these processes to identify and exclude 340B purchased units from MFP eligibility. Where possible, AstraZeneca attempts to directly match claims from the Medicare Transaction Facilitator Data Module (MTF DM) dataset with claims data provided by covered entities. In the absence of direct matches, AstraZeneca must rely on proxy methodologies, including analysis of a dispensing pharmacys historical 340B utilization patterns and prescriber affiliation with covered entities, to infer whether a given claim is likely associated with a 340B-eligible patient. To address disputes, dispensing entities that disagree with AstraZenecas determinations are directed to submit a good faith inquiry (GFI) through the Beacon MFP system, which initiates a secondary review process. Experience and Observed Limitations in Identifying Duplicate Discounts. AstraZenecas experience to date highlights significant structural limitations in achieving accurate and complete deduplication in the absence of a Rebate Model. Because most 340B transactions cannot be directly matched to MTF DM claims data, reliance on proxy methodologies is both necessary and inherently imprecise. Based on year-to-date analysis of MTF data, AstraZenecas preliminary findings indicate that 340B/MFP duplication continues to occur. This gap reflects systemic data limitations and misalignment between how 340B eligibility is determined and how MFP pricing must be effectuated. These findings strongly reinforce that the current upfront discount modelwhen layered with MFP requirementsdoes not provide a reliable mechanism for ensuring accurate, real-time deduplication. Key Challenges in Preventing Duplicate Discounts. AstraZeneca has identified several persistent challenges that materially impede effective duplicate discount prevention: Medicare (MFP Context): The absence of real-time, claim-level indicators of 340B status presents a fundamental barrier. Covered entities typically determine 340B eligibility retrospectively, whereas manufacturers must effectuate MFP pricing within compressed timeframes (e.g., 14 days). As a result, manufacturers are frequently required to provide both the MFP price and the 340B discount through separate channels, creating a significant risk of duplicate discounts. Medicaid (Including Managed Care): Identifying and resolving duplicate discounts in Medicaid particularly within managed care arrangementsrequires extensive data reconciliation and coordination with states. This process is resource-intensive, often requiring significant full-time employee (FTE) support and extended timelines. Thomas J. Engels Page 6 April 20, 2026 These challenges are not merely operational inefficiencies; they are structural issues that limit the effectiveness of existing safeguards. Minimum Data Elements Necessary for Effective Deduplication. To meaningfully identify and prevent duplicate discounts, manufacturers require access to standardized, claim-level and purchase-level data. At a minimum, pharmacy claims data should include: 340B identifier Date of service Date prescribed Fill number 11-digit National Drug Code (NDC) Prescriber identifier Quantity dispensed Prescription (Rx) number Service provider identifier Bank Identification Number (BIN) Processor Control Number (PCN) In addition, access to purchase data would materially improve validation speed and accuracy, and allow the manufacturer to verify the unit was purchased at WAC, including: Wholesaler name Wholesaler account number NDC-11 Invoice date Quantity purchased Wholesaler invoice number (to confirm WAC purchase) Ship-to pharmacy (NPI) 340B identifier The absence of these integrated data elements under the current upfront discount model necessitates reliance on indirect estimation methodologies, which are inherently less reliable. Role of a Rebate Model Pilot Program in Addressing Duplicate Discount Challenges. AstraZeneca believes that a rebate-based framework offers the most effective and sustainable solution to the challenges described above. By requiring claims-level submission and validation prior to rebate payment, a rebate model would: Thomas J. Engels Page 7 April 20, 2026 Enable direct identification of 340B-eligible transactions at the claim level; Align pricing concessions with verified utilization data; and Substantially reduce reliance on retrospective reconciliation and estimation methodologies. In doing so, a rebate model would provide a unified mechanism for preventing duplicate discounts across both the Medicare and Medicaid programs, while also improving transparency and auditability. Importantly, it would allow manufacturers to apply consistent validation rules across programs, rather than navigating fragmented and incomplete data streams. III. Section 6 Required Manufacturer Reporting: Data Elements, Frequency, and Public Transparency. AstraZeneca supports the establishment of clear, standardized, and appropriately scoped reporting requirements as a core component of any 340B Rebate Model Pilot Program. Robust reporting will be essential to enable HRSA to evaluate program integrity, monitor operational performance, and generate the empirical data necessary to assess the feasibility of a permanent rebate-based framework. At the same time, reporting requirements should be designed to leverage existing data flows and minimize unnecessary administrative burden. Manufacturer Reporting Requirements and Frequency. A quarterly reporting cadence strikes an appropriate balance between timeliness and administrative feasibility, allowing HRSA to identify trends, monitor compliance, and address emerging issues in near real time. As for the specific data elements, we believe the following strike the appropriate balance between data robustness and administrative burden: Claim-Level Data o Claim submission date o 340B covered entity identifier o National Drug Code (11-digit NDC) and quantity Pricing and Payment Data o Unit WAC, 340B ceiling price, and MFP, as applicable o Rebate amount paid and date of payment Denial and Adjudication Data o Denial status and standardized denial reasons Operational and Performance Metrics o Aggregate sales, stratified by covered entity type o Average number of days from claim submission to rebate payment o Number of clean claims paid within required timelines Thomas J. Engels Page 8 April 20, 2026 o Number of rebate claims denied, categorized by reason o Number of claims determined to be eligible for MFP rather than 340B pricing These data elements are directly aligned with HRSAs stated objectives of improving transparency, strengthening program integrity, and enabling meaningful evaluation of the rebate model. Public Reporting and Transparency. AstraZeneca supports transparency as a key objective of the pilot program but emphasizes that manufacturer-specific data should be treated as confidential and protected from public disclosure. Public release of company-level data could raise significant competitive and commercial concerns and may discourage full participation in the pilot. Instead, AstraZeneca recommends that HRSA publish aggregated, de-identified data across all participating manufacturers on a quarterly basis for the duration of the pilot. Such aggregate reporting could include high-level metrics such as total rebates paid, average payment timelines, denial rates, and trends in duplicate discount identification, without revealing proprietary or commercially sensitive information. This approach would provide stakeholders, including policymakers and the public, with meaningful insight into the performance and impact of the pilot program, while preserving appropriate confidentiality protections. Duration and Frequency of Reporting. AstraZeneca recommends that the reporting cadence described above be maintained throughout the full duration of the pilot program. Consistent, longitudinal data collection will be critical to evaluating both the short-term operational impacts and longer-term program integrity benefits of a rebate-based approach. Maintaining a uniform reporting framework over time will also facilitate trend analysis, support evidence- based policymaking, and ensure that HRSA can assess whether the rebate model achieves its intended objectives relative to the current upfront discount system. IV. Section 7 340B Program Integrity and the Benefits of a Rebate-Based Framework. AstraZeneca believes that a thoughtfully designed 340B Rebate Model Pilot Program would materially strengthen the integrity of the 340B Program and address longstanding structural limitations associated with the current upfront discount model. As HRSA recognizes, the effectiveness of the 340B Program depends on the ability of stakeholders to ensure that discounts are appropriately applied to eligible patients and claims, and that duplicate discounts and diversion are avoided. However, under the current framework, insufficient and inconsistent data elements significantly constrain the ability of manufacturers and other stakeholders to meet these objectives. Benefits of a Rebate Model Across Key Integrity Domains. A rebate-based approach would provide several interrelated benefits that directly support program integrity: Thomas J. Engels Page 9 April 20, 2026 Prevention of Duplicate Discounts. By requiring submission and validation of claims data prior to rebate payment, a rebate model would enable manufacturers to more effectively identify and prevent duplicate discounts across the 340B, Medicaid, and Medicare programs. This approach, in the long run, could replace retrospective estimation and dispute processes with prospective, data-driven validation. Reduction in Diversion and Improper Claims. Enhanced visibility into dispensing and utilization data would allow stakeholders to identify patterns indicative of diversion or improper claims, including dispensing through ineligible entities or multiple Covered Entities requesting discounts to the same unit of drug. This would reduce improper utilization of 340B pricing and strengthen compliance with statutory requirements. Increased Pricing Transparency. A rebate model provides a clear and consistent pricing framework in which, for example, all transactions originate at WAC, with 340B pricing applied only after eligibility is verified. This structure creates a transparent and auditable distinction between WAC, 340B, Medicaid rebate, and MFP transactions. Importantly, this level of transparency benefits all stakeholders by: o Providing a single, consistent reference point for pricing; o Eliminating ambiguity regarding which pricing mechanism applies to a given claim; and o Enabling faster, more accurate rebate payments with fewer errors and disputes. Recommendations to Improve Data Collection While Minimizing Administrative Burden. To fully realize the integrity benefits of a rebate model while minimizing operational complexity, AstraZeneca recommends broad adoption of a rebate-based framework across all covered outpatient drugs, which would eliminate the need for covered entities to operate parallel systems (i.e., upfront discount and rebate models) and reduce administrative burden. This would also avoid partial or fragmented implementation, as applying the rebate model to only a subset of products could create market distortions and perpetuate risks of duplication and diversion for products that remain under the legacy model. A uniform approach would streamline operations, improve data consistency, and maximize the effectiveness of validation and oversight mechanisms. Additional Benefits: Transparency, Auditability, and Dispute Reduction. Beyond its direct impact on duplicate discount prevention and diversion, a rebate model offers several additional benefits that further strengthen the program: Enhanced Auditability and Compliance. Claims-level data submission enables manufacturers to exercise audit rights more effectively and ensures that rebates are paid only on verified, eligible transactions. Reduction in Disputes and Administrative Burden. One of the most significant advantages of a rebate model is the substantial reduction in disputes between manufacturers, covered entities, and Thomas J. Engels Page 10 April 20, 2026 states. Under a transparent, claims-based framework, transactions can be matched using objective data elements, making determinations more straightforward and less subject to interpretation. This black-and-white validation environment reduces the need for post hoc reconciliation, minimizes inquiries and disputes, and lowers administrative costs across stakeholders. Improved Alignment Across Stakeholders. By providing a shared data foundation and consistent validation rules, a rebate model promotes alignment among manufacturers, covered entities, and government programs, reducing friction and improving overall program administration. * * * * * AstraZeneca is grateful for the opportunity to submit comments in response to HRSAs RFI regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, and looks forward to continuing to engage with HRSA as it considers implementation of a rebate model moving forward. Please contact me at sarah.arbes@astrazeneca.com, or Steven Chen, Director of Access Policy, at steven.chen5@astrazeneca.com, if you have any additional questions. Sincerely, Sarah C. Arbes Head of US Federal Affairs and Policy
HRSA-2026-0001-1865Wisconsin Primary Health Care Association2026-04-20T04:00Z23,279 chars
See attached file(s) 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Wisconsins 18 Community Health Centers (CHCs) and the nearly 300,000 patients they serve, the Wisconsin Primary Health Care Association (WPHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, WPHCA strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, WPHCA explains: The importance of 340B savings to Wisconsins CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their low-income, under- insured, and uninsured patients. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. In Wisconsin, in 2024 they served 298,192 patients, of which 92% earn at or below 200% of the Federal Poverty Level. 58% are Medicaid-enrolled and 17% are uninsured and many more are under-insured. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law2 and regulation3, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. In Wisconsin, most Community Health Centers use savings generated through the 340B program to offset the price of their sliding fee scale for uninsured and underinsured patients to make medications more affordable. 340B savings are also used to reduce the cost of medical, dental, and behavioral health services to un- and under-insured patients. Community Health Centers report that 340B is a considerable funder for pharmacy department staffing, supporting positions such as Pharmacists, Technicians, care coordinators, and others who help patients manage medications, identify affordable therapeutic options, and improve access to care. Several Wisconsin Community Health Centers indicated that the majority of their pharmacy staff are supported through 340B program savings. Other activities funded through 340B program savings include: Staff dedicated to insurance enrollments and sliding fee calculations Interpreters Staff assisting patients with financial need applications who received prescription medication Prescription delivery services (for example, one Community Health Center covers all postage for prescription package, totaling over $163,000 in postage costs in a single 2 Secon 330(e)(5)(D) of the Public Health Service Act. 3 45 Code of Federal Register 75.307 Program Income 3 year. Another clinic noted that more than 1,700 patients were served through medication delivery last year, which is especially important in rural areas of Wisconsin) Diabetic testing supplies and diabetes education Clinic expansions and new services such as specialized care for pregnant women, Substance Use Disorder treatment, and capital projects such as new dental sites The Family Health Center of Marshfield Inc. operates an in-house pharmacy that served approximately 2,200 patients across 15 counties in northern Wisconsin in 2021 and filled over 60,000 prescriptions. We utilize a mail order model to help bridge transportation and access barriers for patients living in rural Wisconsin, particularly to communities where there are no physical pharmacies. Due to the 340B Program, patients have ZERO out of pocket costs, such as copayment or mailing cost. Additionally, savings generated from the 340B Program enable us to provide care coordination and telephonic comprehensive medication management for many of our patients. The savings from the 340B Program are essential in maintaining our 17- member pharmacy staff, helping patients increase adherence to medication therapies, and manage chronic conditions. We feel strongly that the continued erosion of 340B program by manufacturers and PBMs jeopardizes access to medications and care for vulnerable patients and communities, shared Xin Ruppel, Pharmacy Manager, Family Health Center of Marshfield, Inc. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. A rebate model will create massive cashflow, administrative, and other costs for CHCs including contributing to: Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Wisconsins CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. 4 Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. 1. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) 2. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. 3. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or 5 continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. 4. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example, contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation- adjustment to their base grants in over a decade. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. 6 This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: a. Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. b. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: a. Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and b. Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 7 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: a. Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. b. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication4 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. 4 Health Resources and Services Administraon 340B Program Noce: Applicaon Process for the 340B Rebate Model Pilot Program, August 1, 2025. htps://federalregister.gov/d/2025-14619 8 Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Richelle Andrae at randrae@wphca.org. Sincerely, Richelle Andrae Associate Director of Government Relations Wisconsin Primary Health Care Association E: randrae@wphca.org P: 608-571-6168 www.wphca.org 9 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-1866Elle Schultz · Portland, OR, United States2026-04-20T04:00Z3,480 chars
I am submitting this comment in strong opposition to the proposed use of a rebate model under the 340B Drug Pricing Program. The community health center I work for relies heavily on the 340B program to sustain access to care for our patients. We had 60,000 UDS eligible visits in 2025, and approximately one-third of our total revenue is derived from pharmacy services tied to 340B. This revenue is not excessit is essential. It supports clinical services, staffing, and programs for underserved patients who would otherwise face significant barriers to care. The proposed shift from an upfront discount model to a rebate model introduces serious operational and financial risks. Under the current structure, we are able to purchase medications at the discounted 340B price at the time of acquisition, which allows for predictable cash flow and straightforward accounting. A rebate model would require us to pay higher upfront costs and then wait for possible reimbursement, creating uncertainty, potential delays in recouping funds, and the possibility of NOT recouping funds. For safety-net providers operating on thin margins, this change could create immediate cash flow strain. Even short delays in rebate payments could disrupt operations, limit our ability to purchase medications, and ultimately reduce patient access to needed therapies. The Request for Information does not provide sufficient assurance that rebates would be paid in a timely, reliable, and transparent manner. Without enforceable guarantees, this model shifts financial risk from manufacturers to covered entities. In addition, the administrative burden associated with a rebate system would be substantial. Tracking claims, submitting rebate requests, reconciling payments, and managing denials would require significant new staffing, training, and IT infrastructure. These are not minor adjustmentsthey represent a fundamental increase in complexity. For many organizations, including ours, this would divert resources away from patient care and into administrative overhead, the very kind of waste this administration seeks to reduce. The lack of clarity around denial criteria, dispute resolution, and oversight mechanisms is also deeply concerning. Without clear guardrails, there is a high risk of inappropriate rebate denials or delays, further compounding financial uncertainty. The potential for inconsistent implementation across manufacturers only increases this risk. Most importantly, this proposal threatens patient access. The 340B program was designed to allow covered entities to stretch limited resources and serve more patients. Increasing administrative burden and financial instability undermines that goal. Any policy change that risks reducing access to medications or clinical services for vulnerable populations should be approached with extreme caution. Given these concerns, I strongly urge HRSA not to implement a rebate model under the 340B program. At a minimum, any consideration of such a model would require robust protections, including guaranteed and rapid payment timelines, standardized processes, and clear accountability measures for manufacturers. However, even with these safeguards, the fundamental shift in financial risk and administrative burden makes this approach ill-advised. The current upfront discount structure is effective, predictable, and aligned with the programs intent. It should be preserved. Thank you for the opportunity to comment.
HRSA-2026-0001-1867Baptist Health2026-04-20T04:00Z3,629 chars
See attached file(s) r BAPTIST HEALTH Matthew A. Zuino, MSIS, FACHE President & CE0 841 Prudential Drive Jacksonville, Florida 32207 904.202.2000 BaptistJax.com The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Baptist Health and Wolfson Children's Hospital in Jacksonville, Florida, thank you for the opportunity to comment on HHS's Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly oppose replacing the longstanding upfront discount model with a rebate mechanism. A rebate model would impose significant administrative, operational, staffmg, IT, compliance, and cash-flow burdens on our hospital, with no corresponding patient benefit. We built our 340B program around the upfront discount structure that has worked for decades. Shifting to rebates would require new systems, new personnel, new vendor arrangements, more manual claims and data work, more reconciliation and denial disputes, and potentially substantial legal, consulting, and training costs. These costs would only grow if as many as 25 drugs are included. The fmancial impact would be equally concerning. Unlike the current model, a rebate approach would require hospitals to front the full acquisition cost of drugs and wait for repayment, effectively providing interest free loans to manufacturers. That delay would strain cash flow, weaken liquidity, and reduce our ability to deploy 340B savings to support patient care, access, and community services. We estimate that roughly 15 percent of our 340B savings for the affected drugs would be consumed by this new bureaucratic requirement alone, diverting resources away from patient care and undermining the very purpose of the 340B program. HRSA's suggestion that the data burden would be minimal does not reflect operational reality. Hospitals do not currently maintain all required information in a single seamless format, and third-party administrators often do not have direct EHR access. Compliance would require pulling information from multiple systems, creating new data feeds, and performing manual work that does not exist today. These added costs and requirements would directly reduce the value of 340B savings and undermine our ability to stretch scarce resources to serve more patients and provide more comprehensive services. That is contrary to the purpose of the 340B program. Our hospital reasonably relied on the longstanding upfront discount model in structuring operations, staffmg, vendor contracts, and fmancial planning. A major shift now would disrupt those settled reliance interests without justification. We also do not believe a rebate model is necessary to address 340B/Medicare Drug Price Negotiation Program duplicate discount concerns. HRSA has acknowledged that other options exist, and we support the use of a neutral third-party clearinghouse as a more workable and less burdensome altemative. For these reasons, Baptist Health respectfully urges HRSA to abandon the rebate concept and preserve the upfront discount model. If HRSA nevertheless proceeds, covered entities must be given a full opportunity to comment on the specific design, operational requirements, denial standards, and dispute processes before implementation. Thank you for your consideration. Sincerely, Ma e A. Zuino, MSIS, FACHE Pr and CEO, Baptist Health
HRSA-2026-0001-1868T.J. Samson Community Hospital2026-04-20T04:00Z11,298 chars
Thank you for the opportunity to share feedback on the 340B Rebate Model Pilot Program. Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: T.J. Samson Community Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. While HRSA purports that rebates would improve 340B program integrity and ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP), we fully support the current auditing system. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP non-duplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drug makers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The financial implications of a 340B rebate model would be severe, including significant cash flow strain from fronting full drug acquisition costs, risk of delayed or denied rebates, and increased borrowing costs or need for lines of credit. For rural hospitals, where operating margins may be 12% or negative, even temporary delays in rebate payments could jeopardize service lines such as oncology, infusion therapy, and outpatient pharmacy programs. The current upfront discount model provides predictability. A rebate model introduces volatility. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our hospital would need to spend at a minimum, an amount of $120,000 annually to ensure the appropriate resources were secured for proper rebate model utilization. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Our covered entity would realize substantial administrative and operational costs, not only from the contracting cost of onboarding a third party vendor to manage the day to day of data sharing, but also from reallocating staff hours and hiring a new full time employee to assist in software implementation, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Our covered entities experience does not support HRSA's assertion that required claims data will be minimally impactful because of HRSAs logic that we are already providing that to third-party administrators (TPAs) to qualify 340B claims or to manufacturers to access 340B pricing, as medical claims data fields are not routinely provided to manufacturers or TPAs. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include reduced access to medications, longer travel distances for care, or elimination of local services. In rural communities, there are no alternative providers waiting to fill those gaps. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. The existing MDPNP process is functioning well overall. The percentage of claims with errors is small compared to our total MDPNP claims. We are addressing any issues with the manufacturers or complaining directly to CMS. A 340B rebate model is not necessary for the success of MDPNP, and the burden associated with a rebate model would exacerbate any issues we have experienced. Thank you for considering our comments. Sincerely, T.J. Samson Community Hospital
HRSA-2026-0001-1869Great Lakes Bay Health Center2026-04-20T04:00Z84,869 chars
See attached file(s) April 17 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Great Lakes Bay Health Centers (GLBHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: GLBHC anticipates a loss of approximately $1 million from entity-owned pharmacy operations and at least a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The mission of Great Lakes Bay Health Centers is to provide excellent health care to individuals and communities, especially those who are underserved, uninsured, or underinsured. The services provided are sensitive to the needs of the community, are not based on the ability to pay and are offered without discrimination. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Great Lakes Bay Health Centers in particular, this means it will impact our ability to provide excellent health care to our 62,000 unique patients by limiting our ability to stretch scare federal resources. Specifically, it will limit or eliminate our ability to provide: o discounted drugs to low-income patients who may not otherwise be able to afford their medications (GLBHC provided over $5 million in sliding fee discounts directly to patients in 2025) o free medication delivery services (GLBHC delivered approximately 8000 prescriptions free in 2025) o free transportation services (GLBHC provided nearly 20,000 rides in 2025) o supplemental healthcare services that are often unpaid or underpaid by patient insurance plans o other enabling services to our patients via community health workers and care management services o offset the losses of services we provide to patients that may not otherwise be able to be offered without 340B savings to pay for it Increased administrative costs to run the 340B program (additional personnel and/or software to monitor/manage/reconcile the rebate process effectively) will take additional benefit away from the purpose of the program and further reduce the positive impact GLBHC can make on our patients and programs with 340B savings We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 3 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: GLBHC provided $5,097,865 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 5 Staffing Impact: GLBHC anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, GLBHC anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 GLBHC estimations fall in line with these estimations. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. GLBHC estimates that approximately 3-4 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Great Lakes Bay Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated $10,000-$20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Total Cost: For our CHC, which serves 62,588 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to be at least $60,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 77 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 77 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in central Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At the GLBHC in-house pharmacies, we have a sliding fee scale program where we base the amount the patient pays at the pharmacy counter upon the cost of the drug and the patients income level. If the patient falls within the accepted low income range, they get the drug sold to them at or near the cost of the drug. With the rebate model, this presents a great challenge because we have to decide if we will then charge the patient the 340B cost, even though we purchased it at WAC, cover the losses in the interim and hope that we get the rebate... or do 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 away with sliding fee discounts on these drugs completely, which would be detrimental to some of our patients who rely on those lower prices. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $5.5 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $323,000 to purchase these same drugs at the 340B ceiling price. This represents a 1600% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Great Lakes Bay Health Centers anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as medication therapy management programs, dietary/nutrition services, care management programs, etc. Operating Hours: We anticipate potentially needing to reduce our clinic hours at certain locations, which could specifically impact evening and weekend hours, which are often the only times that working class and agricultural patient can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time community health worker, behavioral health counselor, or even a transportation driver. This may negatively impact our patients by increasing wait times for mental health appointments, limiting our ability to assist with navigating social determinants of health, or preventing the patient from being able to get to their appointment. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12500 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Great Lakes Bay Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Great Lakes Bay Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by at least $400,000 just at our in-house pharmacies. This does not include any increased spend for any of our contract pharmacies that may continue to participate in the program if the proposed rebate model becomes reality, as we are anticipating many of them will bow out due to administrative burden or difficulties in the reconciliation process. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization could be forced to take out a line of credit or use our limited financial reserves to cover drug costs while we wait an undetermined amount of time for rebate payments. This is not a sustainable solution; and limits or takes away from funds that are currently dedicated to ensuring patients have access to timely and high quality prenatal care, behavioral health and substance use disorder treatment, mobile dental services that meet the patient where they are at, and so much more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on GLBHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect 11 is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Great Lakes Bay Health Centers urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5-10% denial rate would result in a net annual loss of $250,000-$500,000 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 13 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Great Lakes Bay Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. GLBHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. GLBHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jeff Larsen, Chief Growth and Development Officer Jlarsen@glbhealth.org Sincerely, Kelli Pardee, MBA, CPhT Pharmacy Business Director Great Lakes Bay Health Centers April 17 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Great Lakes Bay Health Centers (GLBHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: GLBHC anticipates a loss of approximately $1 million from entity-owned pharmacy operations and at least a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The mission of Great Lakes Bay Health Centers is to provide excellent health care to individuals and communities, especially those who are underserved, uninsured, or underinsured. The services provided are sensitive to the needs of the community, are not based on the ability to pay and are offered without discrimination. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Great Lakes Bay Health Centers in particular, this means it will impact our ability to provide excellent health care to our 62,000 unique patients by limiting our ability to stretch scare federal resources. Specifically, it will limit or eliminate our ability to provide: discounted drugs to low-income patients who may not otherwise be able to afford their medications (GLBHC provided over $5 million in sliding fee discounts directly to patients in 2025) free medication delivery services (GLBHC delivered approximately 8000 prescriptions free in 2025) free transportation services (GLBHC provided nearly 20,000 rides in 2025) supplemental healthcare services that are often unpaid or underpaid by patient insurance plans other enabling services to our patients via community health workers and care management services offset the losses of services we provide to patients that may not otherwise be able to be offered without 340B savings to pay for it Increased administrative costs to run the 340B program (additional personnel and/or software to monitor/manage/reconcile the rebate process effectively) will take additional benefit away from the purpose of the program and further reduce the positive impact GLBHC can make on our patients and programs with 340B savings We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: GLBHC provided $5,097,865 in sliding fee discounts in 2025, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: GLBHC anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, GLBHC anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. GLBHC estimations fall in line with these estimations. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. GLBHC estimates that approximately 3-4 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Great Lakes Bay Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated $10,000-$20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 62,588 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to be at least $60,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 77 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 77 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in central Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At the GLBHC in-house pharmacies, we have a sliding fee scale program where we base the amount the patient pays at the pharmacy counter upon the cost of the drug and the patients income level. If the patient falls within the accepted low income range, they get the drug sold to them at or near the cost of the drug. With the rebate model, this presents a great challenge because we have to decide if we will then charge the patient the 340B cost, even though we purchased it at WAC, cover the losses in the interim and hope that we get the rebate... or do away with sliding fee discounts on these drugs completely, which would be detrimental to some of our patients who rely on those lower prices. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $5.5 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $323,000 to purchase these same drugs at the 340B ceiling price. This represents a 1600% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Great Lakes Bay Health Centers anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as medication therapy management programs, dietary/nutrition services, care management programs, etc. Operating Hours: We anticipate potentially needing to reduce our clinic hours at certain locations, which could specifically impact evening and weekend hours, which are often the only times that working class and agricultural patient can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time community health worker, behavioral health counselor, or even a transportation driver. This may negatively impact our patients by increasing wait times for mental health appointments, limiting our ability to assist with navigating social determinants of health, or preventing the patient from being able to get to their appointment. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12500 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Great Lakes Bay Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Great Lakes Bay Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by at least $400,000 just at our in-house pharmacies. This does not include any increased spend for any of our contract pharmacies that may continue to participate in the program if the proposed rebate model becomes reality, as we are anticipating many of them will bow out due to administrative burden or difficulties in the reconciliation process. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization could be forced to take out a line of credit or use our limited financial reserves to cover drug costs while we wait an undetermined amount of time for rebate payments. This is not a sustainable solution; and limits or takes away from funds that are currently dedicated to ensuring patients have access to timely and high quality prenatal care, behavioral health and substance use disorder treatment, mobile dental services that meet the patient where they are at, and so much more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on GLBHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Great Lakes Bay Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5-10% denial rate would result in a net annual loss of $250,000-$500,000 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Great Lakes Bay Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. GLBHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. GLBHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jeff Larsen, Chief Growth and Development Officer Jlarsen@glbhealth.org Sincerely, Kelli Pardee, MBA, CPhT Pharmacy Business Director Great Lakes Bay Health Centers
HRSA-2026-0001-1870T.J. Health Columbia2026-04-20T04:00Z11,272 chars
Thank you for the opportunity to comment on the 340B Rebate Model Pilot Program. Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: T.J. Health Columbia, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. While HRSA purports that rebates would improve 340B program integrity and ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP), we fully support the current auditing system. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP non-duplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drug makers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The financial implications of a 340B rebate model would be severe, including significant cash flow strain from fronting full drug acquisition costs, risk of delayed or denied rebates, and increased borrowing costs or need for lines of credit. For rural hospitals, where operating margins may be 12% or negative, even temporary delays in rebate payments could jeopardize service lines such as oncology, infusion therapy, and outpatient pharmacy programs. The current upfront discount model provides predictability. A rebate model introduces volatility. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our hospital would need to spend at a minimum, an amount of $120,000 annually to ensure the appropriate resources were secured for proper rebate model utilization. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Our covered entity would realize substantial administrative and operational costs, not only from the contracting cost of onboarding a third party vendor to manage the day to day of data sharing, but also from reallocating staff hours and hiring a new full time employee to assist in software implementation, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Our covered entities experience does not support HRSA's assertion that required claims data will be minimally impactful because of HRSAs logic that we are already providing that to third-party administrators (TPAs) to qualify 340B claims or to manufacturers to access 340B pricing, as medical claims data fields are not routinely provided to manufacturers or TPAs. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include reduced access to medications, longer travel distances for care, or elimination of local services. In rural communities, there are no alternative providers waiting to fill those gaps. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. The existing MDPNP process is functioning well overall. The percentage of claims with errors is small compared to our total MDPNP claims. We are addressing any issues with the manufacturers or complaining directly to CMS. A 340B rebate model is not necessary for the success of MDPNP, and the burden associated with a rebate model would exacerbate any issues we have experienced. Thank you for considering our comments. Sincerely, T.J. Health Columbia
HRSA-2026-0001-1871Anonymous Anonymous2026-04-20T04:00Z294 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Our billing and inventory processes are already complex. Managing multiple manufacturer rebate timelines and disputes would significantly increase administrative errors and compliance risk.
HRSA-2026-0001-1872Bobbi Henry · Mount Morris, PA, United States2026-04-20T04:00Z45,366 chars
PHARMACY 14. Point of Sale Harm to Low Income Patients Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. The rebate model eliminates the ability to provide 340B discounts at the point of sale, making life saving medications unaffordable for uninsured and underinsured patients. Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-1873Grady Health System2026-04-20T04:00Z25,563 chars
Please see attached on behalf of Grady Health System. cOm Grady April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Hurnan Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Moclel Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Grady Health System ("Grady"), Georgia's largest safety-net health systern headquartered in Atlanta, we are grateful for the opportunity to cornment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Arnong other things, this RFI asks "whether HRSA should implement a rebate model under the 340B prograrn" instead of the upfront discount rnodel that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will irnpose enormous costs and burdens on Grady Health System that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Grady has relied on for over three decades, is the best way to fulfill that purpose of the 340B program. Grady Health Systern is the fifth-largest public hospital in the United States and serves as the prirnary safety-net provider for the Atlanta metropolitan area, including Fulton and DeKalb Counties. Grady operates a Level I Trauma Center, a comprehensive stroke center, a regional perinatal center, a sickle cell center, Georgia's only burn center, and one of the largest infectious disease prograrns in the Southeast. Grady serves a patient population that is overwhelmingly low-income, uninsured, or publicly insuredapproximately 18% of Grady's patients are covered by Medicaid, and an additional 16% are uninsured. The 340B program is essential to Grady's ability to provide these critical services to a vulnerable population that would otherwise have nowhere else to turn. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Grady has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org i=0=i Grady Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, rnore drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutoiy discount, more likely disputes over delays and denials, and therefore less money that Grady can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program Any rebate program would require Grady Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B prograrn, Grady understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism dernands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. During our most recent fiscal year, Grady processed approximately 2.03 million 340B transactions, including mixed-use and retail. Our cunent annual administrative costs related to 340B Prograrn operations and complianceincluding third-party adrninistrator (TPA) fees, contract pharmacy management, compliance staffing, and IT systemstotal approximately $1.3 million. Key cost drivers include staffing for our in-house pharmacy operations, fees paid to our TPAs, compliance and audit preparation activities, and IT system maintenance. Incremental costs under a Rebate Program. We estimate that a Rebate Program would impose the following incremental costs on Grady: One-time startup costs: Approximately $50,000 for legal review, IT integration, pharmacy workflow modifications, and third-party software procurement. Ongoing annual costs: Approximately $2.8 million, including $229,000 in direct administrative expenses and an estimated $2.6 million in rebate leakage. Rebate leakage, estimated at 5% of total rebates ($52 million), represents eligible claims that are not successfully captured for rebates due to factors such as claim denials, processing delays, and data discrepancies. These estimates are based on costs projected for the previous rebate program, accounting for a modest increase in administrative costs due to the inclusion of an additional 15 drugs under IPAY 2027. The methodology incorporates staff salary projections, quotes from third-party software vendors, and extrapolation of time spent on the current MFP rebate process. These incremental costs would cover claims processing and data submission to manufacturers, reconciliation of rebates received against claims submitted, tracking and disputing rebate denials, additional audit preparation and support, and legal review of new contractual arrangements with Beacon or other third-party platforms. It is anticipated that this program would reduce our 340B Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org cOm Grady savings by approxirnately $2.8 million annuallyresources that would otherwise be directed to patient care and comprehensive health care services for our community. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, HRSA could require manufacturers to reimburse covered entities for docurnented incremental costs, or HRSA could reduce the administrative burden by limiting required data elements to those already captured in existing 340B systems. However, no offset structure can fully compensate for the operational disruption and diversion of staff resources from patient care to administrative ftinctions. Staffing Impacts Under a Potential 340B Rebate Program Grady Health Systern does not currently have the staff needed to comply with a Rebate Program. Implementation of a Rebate Program would require Grady to hire at least 1.5 additional full-time ernployees dedicated to the rebate program to ensure all upfront spend is fully recouped. These positions would include pharmacy technicians dedicated to rebate claim processing and reconciliation, and cornpliance analysts to monitor rebate payments and dispute denials. We do not anticipate that current clinical or pharmacy staff would need to be forrnally reallocated from patient care duties. However, delays in receiving and reconciling rebates may significantly impact patient care and cash flow. If suppliers are not paid according to agreed terrns, they may place Grady on credit hold, potentially affecting our ability to procure medications and, in turn, impacting patient care. HRSA's prior estimate that the Rebate Program would require only 2 additional hours of work per week per covered entity is a gross underestimate for a system of Grady's size and complexity. Grady operates 15 in-house pharrnacies and utilizes 67 contract pharmacy arrangements. The volume of 340B transactions across these sites, combined with the need to process rebate claims, reconcile payments, track denials, and respond to manufacturer inquiries, would demand far more than 2 hours per week. A more realistic estimate is 20 to 30 additional hours per week. Notably, Grady's 340B team already spends several hours each week reconciling payments for some of the 10 IRA drugs for which we are currently receiving MFP refunds from MTF. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program Grady Health System has designed its technological systerns and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. A Rebate Program would require Grady to modify or procure new IT systems to generate and transmit rebate claims, receive and reconcile rebate payments, and interface with manufacturer platforms such as Beacon. This mirrors the process we followed for the prior rebate program, which required significant IT coordination even in the brief preparation period before the program was enjoined. Grady Health Systen- 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org c2=1 Grady Of particular concern is the difficulty of providing medical claims data under a rebate model. Grady's TPA does not have a direct data feed into our electronic health record (EHR) systern. Providing the rnedical claims data required under the prior iteration of the Rebate Program would likely require significant manual work by Grady staff to extract, format, and transmit this informationa process that is both labor-intensive and prone to error. This is fiindamentally different from, and far more burdensome than, the pharrnacy claims data that Grady currently provides for 340B cornpliance purposes. Additionally, there are significant deficiencies in claims reconciliation under a rebate model. Claims processed through the Beacon platform and deposited into Grady's bank account do not include sufficient identifying information at the prescription level and do not include pharmacy identifiers such as NCPDP numbers. As a result, Grady is unable to determine which pharmacy location or cost center a given rebate payment should be attributed to. Because Grady consolidates all deposits into a single large account before posting to individual cost centers, rather than rnaintaining sepatate accounts for each pharmacy, the reconciliation process is extremely difficult and labor-intensive. This lack of transparency in payment data creates an unsustainable administrative burden. Data Collection By Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not irnpose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Grady currently collects and maintains 340B program data through multiple third-party administrators and internal systems. Macro Helix manages our rnixed-use and contract pharrnacy data, while Wellpartner handles select contract pharrnacy arrangements. WAM oversees retail data. The 340B tearn performs daily claim audits, monthly reviews of provider and Medicaid exclusion files, and monitors other cornpliance rnetrics. The team also holds weekly ineetings with internal and external stakeholders to review regulatoiy updates, program financials, and related items. Grady is currently in the process of onboarding a vendor to fully automate auditing, and the program undergoes regular, rigorous assessments to maintain compliance and accuracy. A Rebate Program would significantly change our data collection activities on an ongoing basis. During preparation for the prior rebate program, adding extra data fields that were not already in the TPA data extract proved to be extremely time-consuming. Our team had to meet with IT multiple times to review the data requirements, and sorne fields were difficult to pull from existing systetns. As a result, a significant amount of tirne was spent identifying and gathering the data needed for submission. These challenges would recur and compound under any future rebate program, particularly as the number of drugs subject to rebate increases. Moreover, providing this data would require Grady to pull information from multiple internal hospital systemsincluding our EHR, pharmacy managernent systern, and billing systemand Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org Grady reconcile it for subrnission. Much of this work would need to be perforrned rnanually, at least initially, because our existing systems were not designed to generate rebate claims. Payment Thning And Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate rnechanism will force Grady Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Under Grady's current wholesaler contracts for 340B drugs, our typical payment terms are 45 days, and we typically process invoices within 30 to 45 calendar days. Under a rebate model, Grady would be required to pay the full wholesale acquisition cost (WAC) at the tirne of purchase and then submit claims and wait for rebates. Even with a 10-day rebate payment window, the practical reality is that Grady would be floating the difference between WAC and the 340B ceiling price for a period of time that could extend well beyond 10 days when accounting for clairn submission processing time, manufacturer review, and potential denials. For the 10 drugs included in the prior Rebate Program, it was determined that Grady would have needed approximately $35 million in upfront funds per year to purchase those drugs at WAC. With the addition of 15 more drugs under IPAY 2027, the upfront burden has increased further to approximately $52 million per year. Administrative costs are estimated at 0.5% to 1% of total rebates, excluding the upfront capital that would need to be allocated. HRSA previously credited the position of drug companies that "the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due." This is not a reliable assumption for Grady. We are concerned that rebates may not be received or reconciled in time to meet wholesaler payment terms. Once claims are submitted, payments can take 10 to 14 days to arrive, assuming there are no denials. If the Beacon process is similar to MTF's, we anticipate a challenging reconciliation process, which could negatively impact our ability to make timely payments to the wholesaler. 0ur experience reconciling MFP refimds from MTF for the 10 IRA drugs has been particularly difficult, as MTF does not provide sufficient information in their deposits, making the process veiy time-consuming. At the pharrnacy level, claim reconciliation is extremely difficult because Grady consolidates all deposits into a single large account and then posts to each cost center, rather than maintaining a separate account for each pharmacy. This makes it veiy challenging to match payments to specific claims. A 10-day payment window, while preferable to a longer window, is insufficient to prevent cash flow harm. The 10-day clock does not begin until a "complete claim" is submitted, and manufacturers retain discretion to determine what constitutes a complete claim. This creates an incentive for manufacturers to find technical deficiencies in claims submissions, effectively extending the rebate timeline indefinitely. Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org cOm Grady Adverse Impacts of These Additional Costs And Burdens A11 of these many different costs and burdens add up. Unfortunately, that means that Grady will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Grady Health System serves as the healthcare provider of last resort for hundreds of thousands of residents in the Atlanta metropolitan area. Grady serves a significant number of uninsured patients through our retail pharmacies who lack the financial means to pay for their medications. Upfront 340B discounts are essential, as they enable us to provide these medications at little to no cost and ensure access to care for low-income and vulnerable populations in our community. A rebate model that diverts resources frorn patient care to administrative compliance will directly harrn these programs. We are deeply concerned that transitioning to a rebate-based model would fundamentally disrupt this structure. Without upfront savings, Grady would be required to absorb the full acquisition cost of medications, creating substantial financial and operational strain. This shift would directly threaten our ability to sustain current levels of support and could reduce access to medications for the veiy patients the 340B program is intended to serve. Any changes that undermine the availability of upfront discounts risk compromising patient care and access, particularly for uninsured and underserved populations who rely on us as a critical safety net. These impacts are especially concerning given Grady's role in the community. Grady is the only Level I Trauma Center in the region, operates Georgia's only burn center, and provides a disproportionate share of care to Medicaid and uninsured patients. There is no comparable alternative for the patients we serve. If Grady is forced to reduce services due to the financial burden of a Rebate Program, patients in our community will have to travel significant distances or go without care entirely. With respect to drug access specifically, a rebate model could force Grady to reconsider stocking certain high-cost specialty medications. The canying cost for rnany of these drugs is already substantial. With reimbursement pressures already impacting us, particularly for the initial IRA- designated drugs, Grady has already had to significantly reduce on-hand inventoiy to manage overhead and maintain financial stability. A transition to a rebate-based model would further limit our ability to procure medications in line with historical dispensing patterns. Without the benefit of upfront discounts, we would be forced to take an even more conservative approach to inventoiy management, limiting our ability to stock adequate supply. As a result, we anticipate an increased risk of delays in patients receiving their medications due to reduced inventoiy levels, creating additional barriers to timely access to therapy for the vulnerable populations who depend on us for consistent and immediate access to care. Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org cEn Grady Reliance Interests The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that frarning rests on a flawed prernise. The rnere existence of statutoiy authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Grady Health System reasonably relied on this histoiy when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption wiIl impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, Grady encountered serious problems with Beacon. Grady signed a Business Associate Agreement (BAA) and registered with Beacon at the end of last year. Our legal team raised concerns about sharing data with ESP, but due to the financial implications of non-participation, we had to proceed with the agreement. Moreover, the vendor did not allow Grady to redline the agreernent during legal review, forcing us to accept their terms as presented. This take-it-or-leave-it approach to contractual terrns is unacceptable for a platform that will handle sensitive patient and financial data, and it underscores the imbalance of bargaining power between covered entities and the manufacturer-selected technology platforms. Regardless of Grady's specific experience, any future Rebate Program must include robust guardrails to protect patient information and ensure data security. At a minimum, HRSA should require that any third-party platform used to administer a rebate model be subject to independent security audits, comply with HIPAA and all applicable federal and state privacy laws, limit data collection to the minimum necessaiy for rebate administration, prohibit the use of covered entity data for any purpose other than rebate processing, and provide covered entities with meaningful input into the platform's terms and conditions. Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Grady Health System, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org Sincer EP? Grady Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA rnust provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanisrn. Grady currently maintains an internal reconciliation process to verify that refunds are applied to the correct claims. The process is labor-intensive and requires considerable manual effort. Claims are not provided at the prescription level and do not include pharmacy identifiers such as NCPDP nurnbers, making it extremely difficult to deterrnine which account payments should post to. A rebate model would only compound these difficulties, not resolve them. The existing deduplication challenges that Grady faces under the current MFP refund process with MTF demonstrate that a rebate mechanism is not a solution to program integrity concernsit is an additional burden layered on top of an already strained process. For all of these reasons, Grady Health Systern respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Grady and other covered entities to cornment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to pemit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Anthony S ul President and Chief Operating Officer Grady Health System Grady Health System 80 Jesse Hill Jr. Drive, SE Atlanta, GA 30303 (404) 616-1000 www.gradyhealth.org
HRSA-2026-0001-1874Scott Neeley, M.D. · Grass Valley, CA, United States2026-04-20T04:00Z8,995 chars
Please see attached letter for important details. Dear Administrator Engels, Sierra Nevada Memorial Hospital (SNMH), a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. SNMH, a 104-bed facility in Grass Valley, CA, has proudly served Western Nevada County since 1958. Renowned for its award-winning, high-quality care, SNMH is deeply embedded in a vibrant rural community characterized by outdoor recreation, strong community ties, and scenic Sierra Nevada access. From 24-hour emergency care and comprehensive cardiovascular services to a welcoming Family Birth Center and advanced imaging, SNMH ensures essential, compassionate care for all. As a faith-based, safety-net hospital, we are especially dedicated to extending this high-quality care to the most vulnerable and underserved members of our community, recognizing and addressing their unique health needs with unwavering commitment. This Request for Information (RFI) asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. Sincerely, Scott Neeley, MD President and CEO Dignity Health Sierra Nevada Memorial Hospital A member of CommonSpirit April 16, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Sierra Nevada Memorial Hospital (SNMH), a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. SNMH, a 104-bed facility in Grass Valley, CA, has proudly served Western Nevada County since 1958. Renowned for its award-winning, high-quality care, SNMH is deeply embedded in a vibrant rural community characterized by outdoor recreation, strong community ties, and scenic Sierra Nevada access. From 24-hour emergency care and comprehensive cardiovascular services to a welcoming Family Birth Center and advanced imaging, SNMH ensures essential, compassionate care for all. As a faith-based, safety-net hospital, we are especially dedicated to extending this high-quality care to the most vulnerable and underserved members of our community, recognizing and addressing their unique health needs with unwavering commitment. This Request for Information (RFI) asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on SNMH that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. SNMH relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. We see a large number of low-income, uninsured, and under-insured patients in our facility. At SNMH, the 340B Drug Pricing Program is a cornerstone of our commitment to our community. This federal program allows us, as a safety-net hospital, to purchase eligible outpatient medications at a reduced cost. These savings aren't just financial; they are vital resources re-invested directly into our community's health needs. By reducing pharmaceutical spending through the 340B program, we can significantly enhance patient services where they are most needed. This includes expanding critical behavioral health programs, ensuring that more individuals and families in our rural area have access to vital mental health support. Additionally, it allows us to bolster preventative care and chronic disease management initiatives, offering essential community education, nutrition counseling, and outreach to help our neighbors proactively manage their health. Our partnership with Nevada County and the HealthSpan Initiative demonstrates this impact: by fostering collective action, HealthSpan improves health outcomes, reduces chronic diseases, and scales effective strategies through shared infrastructure and coordinated efforts. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Scott Neeley, MD President and CEO Dignity Health Sierra Nevada Memorial Hospital A member of CommonSpirit Executive Assistant: Carrie Clayton Carrie.Clayton@commonspirit.org Direct: (530) 274-6227 Email: carrie.clayton@commonspirit.org As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1875Sandy Ramirez · Hillsboro, OR, United States2026-04-20T04:00Z1,894 chars
My name is Sandy and I am a Health and Safety PM at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Sandy Ramirez Hillsboro, Oregon
HRSA-2026-0001-1876Catherine's Health Center2026-04-20T04:00Z44,248 chars
See attached file(s) www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Catherines Health Center (Catherines), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Catherines Health Center anticipates a loss of at least a 50% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Catherines became a Federally Qualified Health Center (FQHC) in 2020 and currently manages only contract pharmacy arrangements. We plan to open an in-house pharmacy by January 2027. Although we operated without 340B arrangements until 2023, we have since witnessed the significant impact the program has in expanding access to essential medications for patients who might otherwise go without them. As a small FQHC, Catherines is not certain that we can continue to administer a 340B program through a 340B rebate pilot. Catherines does not maintain 340B specific employees and would be challenged to continue the contracted pharmacy arrangements www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 that improve access to patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Catherines in particular, this means it will impact: Catherines is a new and relatively small health center; Catherines served close to 7,000 unique patients in 2025. There were 1,921 340B claims in 2025. Catherines budgeted close to $992,069 in 340B expenses. However, Catherines flexes existing operational and finance staff to manage the 340B program. Due to resources and capacity, Catherines does not employ distinct 340B staff, so all the expenses connected to the 340B program are TPA administrative costs, drug costs, and pharmacy dispensing fees. Catherines budgeted a small deficit in 2026, and we budgeted $277,471 in 340B savings. 340B savings are essential in supporting our programs that are not sustained through service income and grant revenue. Services like adult dental and healthcare for the homeless services often operate at a deficit. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Catherines provided over 1,000 prescriptions for sliding fee discount- eligible patients. 340B allows Catherines patients to access discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Catherines anticipates needing a .5 FTE as a Result of Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model on our contractual pharmacy arrangements. www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 External Vendor Costs: Given increased complexity, Catherines anticipates an increase of $90,000 a year for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Specifically, Catherines engaged a managed pharmacy vendor to operationalize the new in-house pharmacy in 2027. Due to rapidly changing 340B landscape and 340B rebate model, Catherines does not believe that we can properly manage a 340B in-house program. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Catherines would require an additional .5 FTE staff. Catherines employs 75 FTEs and manages a $10 million budget. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Catherines would need to spend $45,000 for salary and benefits for additional staff. In addition, Catherines has contracted with a managed pharmacy vendor at $90,000 a year to operationalize an in-house pharmacy in early 2027. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Catherines Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. 7 Internal NACHC assessment (99 responses). 8 Ibid. www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 $30,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 7,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at least $150,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 11 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Kent County, Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. To make drugs affordable for our patients, Catherines partners with Walgreens to ensure all sliding scale patients may access medications at deeply discounted cost or zero-pay. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Catherines anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as restorative care for adult dental services and some street medicine hours. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 300 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Catherines asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to consider eliminating the 340B contractual program, as expenses may exceed revenue, or we would consider eliminating other non-340B staff to account for additional staff and contractual labor to ensure the 340B access. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Catherines the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Catherines urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual loss of $ 50,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Catherines strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive www.catherineshc.org 1211 Lafayette Ave NE, Grand Rapids, MI 49505 | (616) 336-8800 care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Catherines believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Catherines appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Megan Erskine, CEO at merskine@catherineshc.org. Sincerely, Megan Erskine, MPH CEO, Catherines Health Center merskine@catherineshc.org
HRSA-2026-0001-1877National Rural Health Association2026-04-20T04:00Z11,026 chars
See attached file for the National Rural Health Association's comment. 1 April 20, 2026 Tom Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: HRSA-2026-03042; Request for Information 340B Rebate Model Pilot Program Submitted electronically via regulations.gov. Dear Administrator Engels, The National Rural Health Association (NRHA) is pleased to respond to the Health Resources and Services Administrations (HRSA) request for information (RFI) on a 340B Rebate Model Pilot Program. We appreciate HRSAs continued commitment to the needs of the more than 60 million Americans that reside in rural areas, and we look forward to our continued collaboration to improve health care access throughout rural America. NRHA is a non-profit membership organization with more than 21,000 members nationwide that provides leadership on rural health issues. Our membership includes nearly every component of rural Americas health care, including rural community hospitals, critical access hospitals, long-term care providers, doctors, nurses, and patients. We work to improve rural Americas health needs through government advocacy, communications, education, and research. A rebate model represents a significant departure from how the 340B program has functioned since its inception. Upfront discounts have allowed rural covered entities to effectuate the programs purpose of stretching scarce federal resources and expanding access to care. NRHA does not support the implementation of a rebate model pilot program. Insofar as HRSA must pursue rebate models for the 340B program, NRHA provides the following comments on HRSAs criteria and offer recommendations on opportunities to protect rural safety net providers within the current proposal. NRHA urges HRSA to consider an exemption for critical access hospitals, sole community hospitals, federally qualified health centers, and other covered entities located in rural areas. We urge HRSA to use the Federal Office of Rural Health Policy definition of rural to define rural areas. This would include nonmetropolitan counties, outlying metropolitan counties with no population from an urban area of 50,000 or more people, Census tracts with RUCA codes 4-10 in metropolitan counties, and other sparsely populated areas located in metropolitan counties. NRHA is extremely concerned that rebate models push the financial risk onto covered entities that operate with thin margins, add further administrative burden, and ultimately disincentivize rural covered entities from staying in the program. NRHA contends that rebate models are misaligned with the reality of operating a covered entity in a rural area and the purpose of 340B. 2 Cost to Covered Entities The rebate model has the potential to add multiple layers of complexity and significant costs for rural covered entities. Generally, rural covered entities expect to experience increased costs in order to comply with rebate models. Prior to HRSAs rescission of its original rebate model announced in 2025, rural hospitals reported investing tens of thousands of dollars in preparation during the pre- implementation period. This included hiring third parties to upgrade or align IT systems and otherwise ensuring rural covered entities were ready to comply. To streamline some administrative burden and costs, NRHA asks HRSA to establish a centralized repository for processing rebate model claims. Depending on the number of drugs and manufacturers eligible for a rebate model, rural covered entities could be required to register for and use several different IT platforms, which will be a significant challenge given their limited staff and resources. Increasing complexity in the 340B program has eroded rural covered entities savings and increased administrative burden that takes away from patient care. Manufacturers must not be allowed to compound these difficulties by passing along costs of data submission and associated platforms to covered entities. If HRSA must move forward with allowing manufacturers to use their own unique IT platforms, NRHA urges HRSA to ensure that covered entities data submission to manufacturers will not impose additional costs on covered entities. We supported the past proposal in HRSAs August 2025 notice of its now rescinded rebate model that manufacturers must take responsibility for any costs of data submission, and that no additional administrative costs may be passed onto covered entities.1 Last, NRHA does not support expanding a rebate model to all drugs under the 340B program. While NRHA previously supported HRSAs proposal to limit its rebate model to MDPNP selected drugs, we urged the agency to limit the program to the court mandated set of drugs given the expected costs associated. Limiting the scope of 340B drugs subject to rebate models will make the process less administratively difficult for rural covered entities as they often lack the staff or infrastructure to manage any additional administrative workload. Payment Timing and Potential Cash Flow Impacts for Covered Entities In its August 2025 notice, HRSA planned to require manufacturers to pay rebates within 10 calendar days.2 NRHA supports retaining this timeline in any future rebate model. As mentioned above, rural covered entities are not in a financial position to absorb upfront costs and wait for rebates. Rural covered entities rely upon 340B program savings to help stretch scarce federal resources and provide critical services to their patients, as is the intent of the program. Small rural providers who operate on razor-thin margins with limited reserves may experience delayed access to savings which compromises payroll, medication access, and operational continuity. Manufacturers must provide timely rebates to covered entities and avoid creating any cashflow issues for rural covered entities. Rebate Denials As part of a future rebate model, HRSA must explore its statutory authority to implement an appropriate channel for resolving disputes regarding improperly denied claims. NRHA is 1 90 Fed. Reg. 36163, 36164 (Aug. 1, 2025). 2 90 Fed. Reg. 36165. 3 concerned that covered entities will not have an efficient and timely process for seeking relief for improperly denied rebates or other issues that may arise out of participating in a rebate model. The 340B Administrative Dispute Resolution (ADR) process is currently the only avenue available for covered entities to seek relief for any issues in the 340B program, but we do not believe it is the appropriate mechanism for rebate model disputes. We are aware of covered entities that have had ADR claims pending for multiple years and therefore are extremely concerned that ADR is not efficient enough for covered entities to obtain relief for improperly denied rebates. This will particularly be an issue for rural covered entities that cannot afford to wait months or years for rebates given that they generally have less cash available and operate with thin margins. Further, we ask HRSA to pursue all enforcement actions allowed under the 340B statute to rectify improperly denied rebates or other manufacturer abuses of the rebate model. Rebate disputes that may result in unrecovered savings means real financial consequences for rural covered entities that have historically relied upon 340B savings to keep services and medications available to patients. NRHA urges HRSA to monitor closely any issues with denied rebates. HRSA should utilize its authority to impose civil monetary penalties on manufacturers and exercise authority to terminate manufacturers rebate model agreements under appropriate circumstances. When manufacturers deny rebates, NRHA requests strict guidelines for documentation. Manufacturers should provide documentation in support of a denial and such documentation must provide clear, timely information. Documentation must provide a specific reason for the denial along with a narrative justification, including an explanation of how covered entities can rectify the denial and, if possible, resubmit data to receive a rebate. HRSAs prior rebate model explicitly stated that rebate claims cannot be denied due to duplicate discount or diversion concerns. This should be built into a future rebate model and further, HRSA must make clear that manufacturers cannot deny rebates for contract pharmacy claims that do not comply with manufacturer restrictions. Manufacturer restrictions on contract pharmacy arrangements have eroded the benefit of the program for rural covered entities and added significant administrative complexity. A future rebate model is not the appropriate avenue to resolve contract pharmacy disputes and withhold savings from covered entities. We are concerned that if this is a legitimate basis for denying rebate claims, it will be misused by manufacturers. Data Collection by Covered Entities In general, NRHA encourages limited program reporting and supports data collection only insofar as it is data that covered entities are already reporting in another federal program. Rural covered entities do not have the administrative capacity to comply with additional unfunded mandates for reporting. To the extent that covered entities must report data in order to receive rebates, HRSA must outline clear and specific data elements to be reported. Additionally, manufacturers must not be able to choose their own data elements or add data elements to any HRSA- defined list. This would insert more complexity and uncertainty, especially considering that covered entities may have to submit claims to several different manufacturers. A limited, uniform set of data elements will help moderate the burden of submitting claims on small, rural covered entities. Rural covered entities need adequate time to submit and report the required data. Many rural providers participating in 340B have one or two-person pharmacy or billing teams who already juggle compliance with Medicaid carve-outs, payer rules, and manufacturer restrictions. As such, rural covered entities need a reasonable timeline for reporting. NRHA suggests allowing at least 45 4 days for covered entities to submit data, as outlined in HRSAs prior rebate model. Additionally, NRHA requests detailed guidelines around when covered entities may receive an exception or extension for data submission. Manufacturers must have clear guidance from HRSA that delineates this process in order to avoid arbitrary decision making. Thank you for the chance to offer comments on a potential pilot program and for your consideration of our feedback. If you would like additional information, please contact NRHAs Government Affairs and Policy Director Alexa McKinley Abel at amckinley@ruralhealth.us. Sincerely, Alan Morgan Chief Executive Officer National Rural Health Association
HRSA-2026-0001-1878Lee Lasich · Clairton, PA, United States2026-04-20T04:00Z352 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. 340B savings support nonrevenuegenerating services such as mobile units, care coordination, behavioral health, and workforce programs. Redirecting these savings to cover rebate financing costs would force reductions in critical community services.
HRSA-2026-0001-1879Deborah Williams · Greer, SC, United States2026-04-20T04:00Z7,592 chars
See attached file(s) HRSA Office of Pharmacy Affairs HHS Docket No. HRSA-2026-003042 TO: Office of Pharmacy Affairs The following material focuses on two questions in the notice in regards to duplicate discounts in Medicare with 340B and the requirements needed for the Medicaid and Medicare programs under the law. On the following questions from the notice: 1) To identify potential duplicate discounts under 340B and CMS payment programs. A 340B identifier is a necessity in FFS and MA to meet the required operations of the CMS payment programs under the law to accurately operationalize the MFP. In addition it is required to comply with the law on the inflation rebates. The government has already lost -based on its own reporting on FFS data- likely over $120 million in 2023 and 2024 alone for the failure to be able to implement in MA. An identifier will facilitate other future policy development for example, regarding potential trends in prescribing less expensive biosimilars and generics versus brand or on how to accurately measure Most Favored Nation net rates for the U.S.. CMS was hesitant in past regulatory discussions on MFP to require an ID, but this is already required for Medicaid contract and CE pharmacy and FFS outpatient hospital administered drugs. The rebate model is an appropriate test of the success and accuracy of the HRSA and CMS policies, if the data is provided to the agencies and analyzed and any report on it is transparent. The GAO would be an excellent partner in this respect. To reduce duplicate discounts in MFP in regards to the HRSA referral q and a posted by APEXUS, two of the necessary linking variables are RXDX and the beneficiary ID. While concerns may be raised about the beneficiary ID with manufacturers or their contractor, the program has ample authority to require the data not be used for marketing purposes or shared with other parts of the organization. Entities may benefit because the other choice for an algorithm is to exclude all contracting pharmacy claims. 2) To identify potential discounts under 340B and Medicaid: CMS made changes to identify Medicaid drug payments made by managed care plans1 for pharmacy claims. Certainly this should include physician administered 1 Therefore, under the authority of section 1902(a)(4) of the Act, to ensure effective implementation of and compliance with sections 1927(a)(5)(C) and 1927(j)(1) of the Act, we proposed to amend 438.3(s) to require States to require (via standard contract requirements) MCOs, PIHPs, and PAHPs that provide coverage of CODs to assign and exclusively use unique Medicaid BIN, PCN, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. Based on comments received, we are changing the requirement to be a unique BIN/PCN combination with a group number claims as well. For both groups, clarity on billing rebates increases Medicaid rebates; again requiring a 340B identifier for physician administered and pharmacy claims to meet the prohibition on duplication already required in the law. The Supreme Court said several years ago that an agency cannot avoid its statutory duty through claiming uncertainty, nor is it supportable for an agency claim that there is no realistic probability that its inactions to date have not harmed manufacturers, taxpayers and others.2 The OIG has pointed out CMS (and HRSA implicitly) is remiss in clarifying the requirements for physician administered drugs: 1. HRSA and CMS should reclarify to the states per the OIG that the Act 1927(j)(2) directs State Medicaid plans to exempt certain hospitals (including non-critical access hospitals, among others) from rebate requirements as long as the hospitals bill Medicaid for covered outpatient drugs at no more than the hospitals purchasing costs of covered outpatient drugs (as determined under the State plan). This requires again a 340B identifier and clarity from the government to the states that the plain English definition requires purchasing cost net of the 340B discount; this has heightened importance in a rebate model for both physician administered and pharmacy claims. Medicaid funds are too precious to waste and risks shorting our most vulnerable citizens of needed resources. In 2028, the MFP will extend to physician administered drugs which unlike Part D program, encompass a Medicaid rebate for drugs used by dual beneficiaries.3 The identifier and reporting should potentially include physician offices and others who may be retrospectively part of any referral as defined by the entity unless there is clear and comprehensive information that the TPA algorithms only affect contract pharmacy. Overall In general, HRSA should examine each of their q and as and map to the data fields that are required. The government cannot examine requirements for systems that it cannot fully envision, and I commend HRSA for the information collection as the right step in that effort. CMS and HRSA should communicate to the principles needed for mutual assent to this process. In this case, the entities and the manufacturers and not their contractors are the obligated parties with the government. When all three of these parties cannot understand the systems, others fill the vacuum potentially breeding suspicion and a break in trust. identifier, as well as the effective date. https://www.federalregister.gov/documents/2024/09/26/2024-21254/medicaid- program-misclassification-of-drugs-program-administration-and-program-integrity-updates 2 https://supreme.justia.com/cases/federal/us/549/497/ 3 Only on the coinsurance but it is the full value of rebate due to a drafting error according to at least one Congressional leader. HRSA and CMS should require the contractors for both of those groups to share their working code and/or algorithms, and the government should have the IT capacity to review it. Manufacturers have asked for these data in the past and it is reasonable for both parties. AI run by experienced coders that are part of DOGE or are internal to CMS Medicare may be helpful to this effort with information provided by HRSA and CMS Medicaid policy experts for both pharmacy and physician administered drugs. Code sets for all parties that are protected as proprietary information are key deliverables, not check the box reports. In the short run, the rebate model data and findings will inform the agencies and the OIG of deficiencies in the policy, controls or invoices that strip resources out of Medicaid and Medicare. In the long run, it will improve the relationships between the parties where there exists today a trust deficit through a mismatch of expectations. If HHS agencies can balance the views of both parties- those who fund the program and those who receive it, it can be a key convenor of those parties and amend the trust deficit and for all parties assured that their legal and fiduciary duties are met. Trust but bring data to verify. Otherwise the continuing cycle of policy decided by the courts will continue with justice slowed but delayed (and sometimes in error). I was a government project officer at HCFA, a Medicare policy expert at Congressional agencies, s Medicare expert at Ways and Means Committee, and worked at manufacturers for over a decade on drug reimbursement by public programs. I have no current conflicts of interest. Sincerely Yours, Deborah Williams Health Policy Insight D_williams115@icloud.com
HRSA-2026-0001-1880Sameen Abidi2026-04-20T04:00Z1,021 chars
I am writing in response to the 340B Rebate Model Pilot Program. As someone who has worked in a Federally Qualified Health Center (FQHC), I strongly urge HRSA to exempt FQHCs from participation in this pilot. The proposed rebate model would introduce significant administrative and operational challenges, including increased complexity in billing, inventory tracking, and reimbursement processes. FQHCs already operate with limited resources while serving vulnerable and underserved populations. Adding a rebate structure would create delays in accessing 340B savings, increase compliance risks, and divert critical staff time away from patient care. These changes could ultimately reduce patients timely access to affordable medications, undermining the intent of the 340B program. Maintaining the current upfront discount model is essential for FQHCs to continue delivering high-quality, cost-effective care. For these reasons, I respectfully request that HRSA exempt FQHCs from the 340B Rebate Model Pilot Program.
HRSA-2026-0001-1881Iowa Hospital Association2026-04-20T04:00Z8,653 chars
See attached file(s) 100 EAST GRAND, SUITE 100, DES MOINES, IA 50309-1835 | P 515.288.1955 | WWW.IHAONLINE.ORG April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of the 99 Iowa hospitals participating in the 340B Drug Pricing Program, including critical access hospitals, disproportionate share hospitals (DSHs), and sole community hospitals, the Iowa Hospital Association (IHA) respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program. IHA strongly opposes implementation of a rebate-based model and urges HRSA to abandon the rebate model. As a matter of both health care policy and federal administrative law, a rebate model applied to the Program represents a fundamental inconsistency with Section 340B, lacks evidentiary support, disregards covered entities substantial reliance interests, and would impose significant financial and operational harms on 340B providers. Iowa Hospitals Financial Realities Heighten Policy and Legal Risks Iowas 340B hospitals operate in an exceptionally constrained financial environment, making reliance on the upfront 340B discount model unreasonable. State-specific data demonstrates that even modest disruptions to cash flow and increases in administrative costs would impose disproportionate harm on Iowa providers and their patients. Between 2023 and 2025, Iowa hospital drug costs increased by approximately 42 percent, substantially outpacing general inflation. Outpatient pharmaceuticals, particularly oncology, infusion, and specialty drugs, are among the most volatile and highest cost inputs in hospital operations. Immediate 340B price reductions allow hospitals to secure these therapies without advancing capital or assuming repayment risk. A rebate model requiring 340B hospitals to purchase drugs at full wholesale acquisition cost (WAC) and await reimbursement would materially shift financial risk to covered entities and introduce uncertainty into clinical and operational decision-making. Liquidity considerations further amplify these concerns. While composite financial metrics may suggest adequacy at a system level, such averages obscure wide variation among individual hospitals, particularly rural facilities. In Iowa, where Medicare and Medicaid together account for nearly 60 percent of hospital payer mix, predictable 340B savings function as a critical offset to historically low Medicare and Medicaid reimbursement rates. From a legal perspective, 340B hospitals longstanding dependence on this predictable framework is not incidental; it is a reliance interest that HRSA must consider and weigh before pursuing any materially disruptive policy change. The Upfront Discount Model Is Grounded in the Statutory Scheme As a condition of participating in Medicaid and Medicare Part B, Section 340B requires manufacturers to offer covered outpatient drugs to eligible covered entities at or below a defined ceiling price. HRSA has implemented this requirement for more than three decades through upfront discounts at the point of sale. This approach reflects more than HRSAs preference or historical inertia. It is consistent with Congresss intent to enable 340B hospitals to stretch scarce federal resources and directly supports immediate patient access to high cost outpatient medications. Importantly, HRSA has not identified a statutory ambiguity or systemic failure that would necessitate discarding this framework. Absent such findings, a structural redesign of how statutory discounts are delivered raises fundamental questions of statutory interpretation and exceeds the bounds of reasoned policy adjustment. A Rebate Model Raises Clear Statutory Authority Concerns Nothing in 42 U.S.C. 256b authorizes HRSA to require 340B hospitals to finance manufacturer discounts or to substitute post-purchase rebates for the statutorily contemplated ceiling-price mechanism. A rebate model would materially alter the allocation of obligations by shifting timing, liquidity, and repayment risk from manufacturers to hospitals. Agencies may not reorganize statutory schemes simply because an alternative approach is administratively appealing or responsive to stakeholder pressure. Courts have repeatedly held that agencies may not rewrite statutes based on policy judgment alone. By requiring hospitals to advance funds and pursue reimbursement, a rebate model would invert Section 340Bs statutory structure and create obligations for covered entities that the statute does not impose. The Administrative Procedure Act (APA) Requires a Reasoned Explanation and Consideration of Reliance Interests Under the APA, HRSAs action may not be arbitrary or capricious. That means when HRSA proposes to depart from a longstanding implementation frameworkas hereit must do more than assert potential benefits; it must confront the factual record supporting the existing approach, explain why that approach is now inadequate, and meaningfully address the reliance interests it has created. 340B hospitals have structured pharmacy operations, compliance systems, contractual relationships, and patient service models around HRSAs consistent application of upfront discounts. These reliance interests are significant, well-documented, and legally cognizable. A policy change that imposes materially greater financial and administrative burdens, without evidence of systemic Program failure, would be difficult to reconcile with the APAs requirement that agencies account for reliance and explain why disruption is justified. Administrative Burden and Program Integrity Considerations A rebate model would impose new and ongoing administrative requirements, including claim-level rebate submission, reconciliation, dispute resolution, and expanded compliance oversight across multiple manufacturers with varying standards. These burdens would divert limited hospital resources away from patient care and toward administrative activity. Critically, HRSA has not demonstrated that the Programs integrity tools are insufficient. Current mechanisms, including audits, the 340B ESP, Medicaid exclusion files, and manufacturer chargeback systems, already address diversion and duplicate discount concerns. The APA requires agencies to consider reasonable alternatives before adopting more burdensome regulatory approaches. Failure to do so would further undermine the legal defensibility of a rebate model. Patient Access and Downstream Impacts Must Be Considered The predictable policy consequences of a rebate modelliquidity strain, increased administrative cost, staffing diversion, and delayed reimbursementwould directly affect hospitals ability to deliver charity care, maintain patient support programs, and invest in oncology, behavioral health, outpatient, and rural services. These downstream effects on statutory beneficiaries are a legally relevant aspect of the policy decision before HRSA. Agency action is arbitrary when it fails to consider important aspects of the problem, including foreseeable impacts on access to care for vulnerable populations. Any evaluation of a rebate approach must therefore fully account for these patient level consequences. For these reasons, IHA and Iowas 340B hospitals strongly urge HRSA to end efforts around any 340B Rebate Model Pilot Program and to preserve the upfront discount framework Congress established, and that has effectively supported patient care for decades. Should HRSA continue to explore a rebate-based approach, HRSA must clearly identify the statutory authority supporting such a model and proceed only through the APAs notice-and-comment procedure. Any rebate model should require manufacturers to bear all associated administrative and operational costs, establish enforceable reimbursement timelines and binding dispute-resolution mechanisms, and fully account for 340B hospitals longstanding reliance interests and patient care impacts. Thank you for your time and consideration. We look forward to continued engagement with HRSA to ensure the 340B Program remains lawful, stable, and effective in supporting care for Iowas most vulnerable communities. Sincerely, Chris Mitchell President/CEO Iowa Hospital Association
HRSA-2026-0001-1882Cornerstone Care2026-04-20T04:00Z50,112 chars
As Chief Quality Officer of Cornerstone Care, Inc., I am deeply concerned about the impact the proposed 340B Rebate Model Pilot Program would have on patient care, medication adherence, and the affordability of essential therapies for medically underserved populations. The 340B program is a cornerstone of high-quality, evidence-based care within community health centers, allowing patients to access life-sustaining medications at the point of care while supporting population health initiatives that reduce preventable implications and hospitalizations. April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: As Chief Quality Officer of Cornerstone Care, Inc., I am deeply concerned about the impact the proposed 340B Rebate Model Pilot Program would have on patient care, medication adherence, and the affordability of essential therapies for medically underserved populations. The 340B program is a cornerstone of high-quality, evidence-based care within community health centers, allowing patients to access life-sustaining medications at the point of care while supporting population health initiatives that reduce preventable complications and hospitalizations. Shifting from an upfront discount model to a retrospective rebate system introduces significant clinical risk. Requiring safety-net providers to purchase medications at full wholesale prices and await uncertain rebates would destabilize pharmacy operations, disrupt continuity of treatment, and erect new barriers for the very patients the program was designed to protect. From a quality and patient-safety standpoint, the consequences are clear and concerning. Key Patient Care and Quality Impacts Reduced Access to Essential Medications o Upfront full-price purchasing would make many critical medications unaffordable for uninsured and underinsured patients, effectively limiting access at the point of care. o Loss of predictable 340B pricing undermines the ability to apply sliding-fee discounts required under Section 330. Increased Risk of Medication Nonadherence o Cost-driven therapy interruptions, forced medication switches, or delayed treatment increase the risk of nonadherenceparticularly for patients with diabetes, cardiovascular disease, chronic kidney disease, and mental health conditions. o Even short disruptions in therapies such as anticoagulants, SGLT2 inhibitors, insulin, or antipsychotics are associated with significantly worse clinical outcomes. 2 Threats to Continuity and Quality of Care o Administrative delays, rebate denials, and cash-flow constraints would limit formularies and reduce clinicians ability to prescribe the most clinically appropriate therapy. o Patients in rural and pharmacy-scarce regions face heightened risk if contract pharmacies withdraw due to administrative burden or financial exposure. Negative Downstream Health Outcomes o Reduced medication access is likely to result in increased emergency department visits, avoidable hospitalizations, disease progression, and higher total cost of careall contrary to quality improvement and value-based care goals. Operational Burden That Diverts Resources from Care o The rebate model requires substantial new IT systems, workforce expansion, and reconciliation processes that divert limited resources away from direct patient care and quality initiatives. From a patient safety and quality perspective, the proposed 340B Rebate Model Pilot Program introduces preventable clinical risk while undermining medication adherence and affordability for high-need populations. The loss of upfront 340B pricing would destabilize care delivery, weaken continuity of treatment, and jeopardize the outcomes of patients who rely on community health centers for consistent, affordable access to essential medications. I strongly urge HRSA to exempt Community Health Centers from this pilot and preserve the existing 340B structure, which remains essential to safe, equitable, and high-quality patient care. Sincerely, Stacey Dunbar Chief Quality Officer Stacey Dunbar (Apr 20, 2026 10:38:57 EDT) 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 04.20.2026_340B CQO Rebate Model LTR Final Audit Report 2026-04-20 Created: 2026-04-20 By: Katie Sill (ksill@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAAU4UeEOrv5ICKlUCs-OSJWq6DAqCdq0c6 "04.20.2026_340B CQO Rebate Model LTR" History Document created by Katie Sill (ksill@cornerstonecare.com) 2026-04-20 - 2:06:48 PM GMT Document emailed to Stacey Dunbar (sdunbar@cornerstonecare.com) for signature 2026-04-20 - 2:06:53 PM GMT Email viewed by Stacey Dunbar (sdunbar@cornerstonecare.com) 2026-04-20 - 2:38:21 PM GMT Document e-signed by Stacey Dunbar (sdunbar@cornerstonecare.com) Signature Date: 2026-04-20 - 2:38:57 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 2:38:57 PM GMT
HRSA-2026-0001-1883Third Street Family Health Services2026-04-20T04:00Z91,123 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Third Street Family Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Third Street Family Health Services anticipates a loss of $1,084,078 to $2,102,747 from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Third Street Family Health Services is a Federally Qualified Health Center (FQHC) serving north-central Ohio. The organization operates multiple clinic locations across Richland, Ashland, Crawford, and Marion counties and provides comprehensive primary care, behavioral health, dental, and pharmacy services to medically underserved populations. As a safety-net provider, Third Street Family Health Services serves a high proportion of Medicaid, uninsured, and low-income patients. The organization participates in the federal 340B Drug Pricing Program, which allows the health center to stretch limited federal resources to expand 2 access to medications, care coordination, and preventive services for vulnerable populations. This includes patients experiencing housing, transportation, food insecurity and recently incarcerated. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Third Street Family Health Services in particular, this means it will impact: Over 58,000 340B prescriptions for 21,172 patients in 2025 Current admin costs $1 million for 340B program Directly funds non-revenue generated positions such as community health workers, care navigators for high cost disease states (Hepatitis C and HIV), higher ratio of pharmacy technicians to prescription volume to prevent patients from being forced onto automated voicemails, long wait lines and delayed care. Full service dental treatment Directly funds our Eligible Patient Prescription Assistance Program, which is a 340B discount program for uninsured patients making less than 200% FPL. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Sliding Fee Discount: Third Street Family Health Services provided $5,207,431 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Third Street Family Health Services anticipates needing 2.5 additional FTEs ($148,000 annually), on additional staff to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, $93,000 to costs for external support vendors. These vendors include 340B consultants, legal counsel, program coordination, third- party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Third Street Family Health Services estimates needing 2 FTEs to manage the reporting of these 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Third Street estimates spending more than $148,000 annually on additional staff to manage this rebate program. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Third Street estimate that at least 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Third Street Family Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Third Street Family Health Services estimates we will need $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 21,172 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $248,720 annually. This will force Third Street to operate at a deficit with current revenue. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. With our current EHR and PMS vendors, we are unable to integrate these technologies. This will lead to more costly, inefficient and manual remedies that will drive up FTE spend and organization costs. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 80 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Third Street currently partners with 84 pharmacies to increase access to affordable medications for our very rural population. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 84 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Ashland, Crawford, Marion and Richland counties in Ohio with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 11 Internal NACHC survey data 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Third Street Family Health Services operates Third Street Pharmacy to stretch federal resources through our experienced pharmacy team and access to significant 340B discounts. The 340B Drug Pricing Program allows us to pass along the 340B price (plus a small supply fee) to uninsured patients at or below 200% FPL. This program is essential to ensure that patients with the fewest resources can still access life-saving medications prescribed by our providers. Under this assistance program for uninsured patients, the average yearly out-of-pocket cost for patients on the drugs included in the 2026 Medicare Fair Price (MFP) Programs is approximately $500. If the previously proposed Rebate Model would have commenced on January 1st 2026, their out of pocket costs would have skyrocketed to $6,000 because we would have not been able to float the WAC cost to the patient, while waiting for a rebate. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $339,352 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $26,376 to purchase these same drugs at the 340B ceiling price. This represents a 1,186% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Third Street Family Health Services anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as free pharmacy delivery, our community health workers working with new mothers and school students facing housing challenges. This removes access points of care for our patients and employees to connect and improve outcomes. We would not be able to fund clinical staff to research, improve and correct high emergency room usage or hospitalizations with our patient population. Dental Treatment: We are the only full-service dental department spanning three campuses that serve Medicaid and uninsured patients in our region. We provide extractions and dental cleanings for both pediatric and adult patients, as well as denture services for the elderly and veterans. Without adequate financial support, these services would be reduced, including clinic locations and operating hours. Such reductions would place additional strain on local community hospitals, including those in rural areas. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Womens Health Nurse Practitioners who are seeing pregnant mothers who are too far away from the hospital to receive care. This will lead to more unmonitored pregnancies, worsening complications during delivery and higher costs for the remaining OB delivery locations. We lose the ability to care for children in schools with our School- based Health Center locations or expanding this care model to every school district within our footprint. Sicker kids mean worsening school performance, decreasing attendance rates and knowledge gaps that cant be restored later. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 120 uninsured patients from rationing their insulin or heart medication. 11 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Third Street Family Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Third Street Family Health Services estimates that our patients will be on waiting lists for their drugs, since our health center wont be able to absorb the cash flow, credit limit or borrowing, which is antithetical to health care in America. We do not penalize patients or turn them away for their inability to pay. These pharmacy lines will destroy our emergency rooms and neighboring hospitals as the costs of care multiply because of the lack of treatment. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Third Street Family Health Services estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,355. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request additional lines of credit, costly longer DSO payment terms, including interest payments on drug purchases, and even selling our clinic locations to private equity and lease back the space for cash flow protection. In our region, where patients have no choice but to rely on Third Street Family Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 12 a. Financial Impact of Rebate Denials and Delays Third Street Family Health Services urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $79,176. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 14 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Third Street Family Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Third Street Family Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 15 Third Street Family Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jason Bilyj, Director of Pharmacy at bilyjj@thirdstreetfamily.org Sincerely, Peggy Anderson CEO & President Third Street Family Health Services April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Third Street Family Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Third Street Family Health Services anticipates a loss of $1,084,078 to $2,102,747 from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Third Street Family Health Services is a Federally Qualified Health Center (FQHC) serving north-central Ohio. The organization operates multiple clinic locations across Richland, Ashland, Crawford, and Marion counties and provides comprehensive primary care, behavioral health, dental, and pharmacy services to medically underserved populations. As a safety-net provider, Third Street Family Health Services serves a high proportion of Medicaid, uninsured, and low-income patients. The organization participates in the federal 340B Drug Pricing Program, which allows the health center to stretch limited federal resources to expand access to medications, care coordination, and preventive services for vulnerable populations. This includes patients experiencing housing, transportation, food insecurity and recently incarcerated. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Third Street Family Health Services in particular, this means it will impact: Over 58,000 340B prescriptions for 21,172 patients in 2025 Current admin costs $1 million for 340B program Directly funds non-revenue generated positions such as community health workers, care navigators for high cost disease states (Hepatitis C and HIV), higher ratio of pharmacy technicians to prescription volume to prevent patients from being forced onto automated voicemails, long wait lines and delayed care. Full service dental treatment Directly funds our Eligible Patient Prescription Assistance Program, which is a 340B discount program for uninsured patients making less than 200% FPL. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Third Street Family Health Services provided $5,207,431 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Third Street Family Health Services anticipates needing 2.5 additional FTEs ($148,000 annually), on additional staff to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, $93,000 to costs for external support vendors. These vendors include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Third Street Family Health Services estimates needing 2 FTEs to manage the reporting of these 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Third Street estimates spending more than $148,000 annually on additional staff to manage this rebate program. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Third Street estimate that at least 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Third Street Family Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Third Street Family Health Services estimates we will need $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 21,172 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $248,720 annually. This will force Third Street to operate at a deficit with current revenue. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. With our current EHR and PMS vendors, we are unable to integrate these technologies. This will lead to more costly, inefficient and manual remedies that will drive up FTE spend and organization costs. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 80 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Third Street currently partners with 84 pharmacies to increase access to affordable medications for our very rural population. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 84 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Ashland, Crawford, Marion and Richland counties in Ohio with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Third Street Family Health Services operates Third Street Pharmacy to stretch federal resources through our experienced pharmacy team and access to significant 340B discounts. The 340B Drug Pricing Program allows us to pass along the 340B price (plus a small supply fee) to uninsured patients at or below 200% FPL. This program is essential to ensure that patients with the fewest resources can still access life-saving medications prescribed by our providers. Under this assistance program for uninsured patients, the average yearly out-of-pocket cost for patients on the drugs included in the 2026 Medicare Fair Price (MFP) Programs is approximately $500. If the previously proposed Rebate Model would have commenced on January 1st 2026, their out of pocket costs would have skyrocketed to $6,000 because we would have not been able to float the WAC cost to the patient, while waiting for a rebate. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $339,352 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $26,376 to purchase these same drugs at the 340B ceiling price. This represents a 1,186% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Third Street Family Health Services anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as free pharmacy delivery, our community health workers working with new mothers and school students facing housing challenges. This removes access points of care for our patients and employees to connect and improve outcomes. We would not be able to fund clinical staff to research, improve and correct high emergency room usage or hospitalizations with our patient population. Dental Treatment: We are the only full-service dental department spanning three campuses that serve Medicaid and uninsured patients in our region. We provide extractions and dental cleanings for both pediatric and adult patients, as well as denture services for the elderly and veterans. Without adequate financial support, these services would be reduced, including clinic locations and operating hours. Such reductions would place additional strain on local community hospitals, including those in rural areas. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Womens Health Nurse Practitioners who are seeing pregnant mothers who are too far away from the hospital to receive care. This will lead to more unmonitored pregnancies, worsening complications during delivery and higher costs for the remaining OB delivery locations. We lose the ability to care for children in schools with our School-based Health Center locations or expanding this care model to every school district within our footprint. Sicker kids mean worsening school performance, decreasing attendance rates and knowledge gaps that cant be restored later. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 120 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Third Street Family Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Third Street Family Health Services estimates that our patients will be on waiting lists for their drugs, since our health center wont be able to absorb the cash flow, credit limit or borrowing, which is antithetical to health care in America. We do not penalize patients or turn them away for their inability to pay. These pharmacy lines will destroy our emergency rooms and neighboring hospitals as the costs of care multiply because of the lack of treatment. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Third Street Family Health Services estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,355. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request additional lines of credit, costly longer DSO payment terms, including interest payments on drug purchases, and even selling our clinic locations to private equity and lease back the space for cash flow protection. In our region, where patients have no choice but to rely on Third Street Family Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Third Street Family Health Services urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $79,176. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Third Street Family Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Third Street Family Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Third Street Family Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jason Bilyj, Director of Pharmacy at bilyjj@thirdstreetfamily.org Sincerely, Peggy Anderson CEO & President Third Street Family Health Services
HRSA-2026-0001-1884Jason Wallace · Brownsville, TX, United States2026-04-20T04:00Z87,761 chars
Please reference the attached letter from New Horizon Health Center detailing the negative impact the 340B Rebate Pilot would have on our organization. We appreciate your time. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of NEW HORIZON HEALTH CENTER, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: NEW HORIZON HEALTH CENTER anticipates a loss of between $600,000 to $3 million per year from entity-owned pharmacy operations and approximately a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. NEW HORIZON HEALTH CENTER is a nonprofit, federally qualified health center (FQHC) based in Brownsville, Texas, serving medically underserved populations throughout the Rio Grande Valley for over 40 years. As a HRSA-funded health center and 340B covered entity, the center provides comprehensive healthcare services, including primary and preventive care, pediatrics, womens health, behavioral health, dental, vision, and pharmacy services. The organization delivers care regardless of patients ability to pay and utilizes a sliding fee discount program in accordance with federal requirements. Through its participation in the 340B Drug Pricing Program, New Horizon Health Center supports access to affordable medications and reinvests program savings to expand services, enhance care delivery, and improve health outcomes for vulnerable populations. 2 I. We Strongly Urge HRSA to Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For NEW HORIZON HEALTH CENTER in particular, this means it will impact: The number of patients we currently serve {15,615} Administrative costs of our 340B program {$1,043,094} The ability to offer the following services: o Behavioral Health o Dental Health o Family Planning o Health Education o OB/GYN o Pediatrics o Pharmacy o Radiology We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non- adherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 3 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, NEW HORIZON HEALTH CENTER provided $9,397,915 in sliding fee discounts, provided through discounted medications and medical services. We 5 anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: NEW HORIZON HEALTH CENTER anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, NEW HORIZON HEALTH CENTER anticipates an increase of approximately $35,000 per year in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 NEW HORIZON HEALTH CENTER estimates needing 2.0 FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One mid-western CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. NEW HORIZON HEALTH CENTER estimates the cost to hire additional staff to be $129,792 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Approximately 10 hours will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NEW HORIZON HEALTH CENTER urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 15,615 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at $42,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Furthermore, we would have to re-program our PMS to reflect the current wholesale acquisition cost (WAC) catalog pricing for the selected MFP drugs when processing prescriptions for our uninsured patients AND simultaneously reflect our actual acquisition cost (AAC) catalog pricing for billing third-party insurance plans and Texas Medicaid Fee-For-Service (FFS). One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The one-time integration cost is likely to be around $30,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend about 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. NEW HORIZON HEALTH CENTER currently partners with 83 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 83 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Brownsville, TX and surrounding areas in Cameron County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 7 pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. NEW HORIZON HEALTH CENTER currently makes medications affordable by offering a flat discount on all 340B covered outpatient drugs to our eligible patients. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations data, we estimate it would cost $6,130,185 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $420,000 per year to purchase these same drugs at the 340B ceiling price. This represents a 1,459.6% increase in upfront capital required for procurement (or 14.6 times the original cost). This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, NEW HORIZON HEALTH CENTER anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our diabetes & nutrition education classes, family planning programs, disease management programs, and clinical pharmacy services, such as our medication therapy management (MTM) program for complex diabetic patients. Operating Hours: We anticipate needing to reduce our clinics hours by 4 hours per week, specifically impacting weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,905 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NEW HORIZON HEALTH CENTER asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain 11 within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, NEW HORIZON HEALTH CENTER estimates its 2027 Annual Rebate Opportunity Cost to be approximately $919,555. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. NEW HORIZON HEALTH CENTER estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $510,849 for 2027 MFP DRUGS, and $531,000 for 2028 MFP DRUGS. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a $20,000,000 line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $1,000,000 annually (at 5%)funds that are currently dedicated to our community health workers, behavioral health services, nurse practitioners, sonographers, clinical pharmacists, dieticians, psychiatrists, dentists, and optometrists. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on NEW HORIZON HEALTH CENTER, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays NEW HORIZON HEALTH CENTER urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a very conservative 15% denial rate would result in a net 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 annual loss of $919,555. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 13 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 14 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion NEW HORIZON HEALTH CENTER strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NEW HORIZON HEALTH CENTER believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NEW HORIZON HEALTH CENTER appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at jwallace@newhorizonhc.org. Sincerely, Jason K. Wallace Jason K. Wallace, CEO New Horizon Health Center April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of NEW HORIZON HEALTH CENTER, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: NEW HORIZON HEALTH CENTER anticipates a loss of between $600,000 to $3 million per year from entity-owned pharmacy operations and approximately a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. NEW HORIZON HEALTH CENTER is a nonprofit, federally qualified health center (FQHC) based in Brownsville, Texas, serving medically underserved populations throughout the Rio Grande Valley for over 40 years. As a HRSA-funded health center and 340B covered entity, the center provides comprehensive healthcare services, including primary and preventive care, pediatrics, womens health, behavioral health, dental, vision, and pharmacy services. The organization delivers care regardless of patients ability to pay and utilizes a sliding fee discount program in accordance with federal requirements. Through its participation in the 340B Drug Pricing Program, New Horizon Health Center supports access to affordable medications and reinvests program savings to expand services, enhance care delivery, and improve health outcomes for vulnerable populations. We Strongly Urge HRSA to Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For NEW HORIZON HEALTH CENTER in particular, this means it will impact: The number of patients we currently serve {15,615} Administrative costs of our 340B program {$1,043,094} The ability to offer the following services: Behavioral Health Dental Health Family Planning Health Education OB/GYN Pediatrics Pharmacy Radiology We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non-adherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, NEW HORIZON HEALTH CENTER provided $9,397,915 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: NEW HORIZON HEALTH CENTER anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, NEW HORIZON HEALTH CENTER anticipates an increase of approximately $35,000 per year in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. NEW HORIZON HEALTH CENTER estimates needing 2.0 FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One mid-western CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. NEW HORIZON HEALTH CENTER estimates the cost to hire additional staff to be $129,792 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Approximately 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NEW HORIZON HEALTH CENTER urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 15,615 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at $42,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Furthermore, we would have to re-program our PMS to reflect the current wholesale acquisition cost (WAC) catalog pricing for the selected MFP drugs when processing prescriptions for our uninsured patients AND simultaneously reflect our actual acquisition cost (AAC) catalog pricing for billing third-party insurance plans and Texas Medicaid Fee-For-Service (FFS). One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The one-time integration cost is likely to be around $30,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend about 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. NEW HORIZON HEALTH CENTER currently partners with 83 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 83 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Brownsville, TX and surrounding areas in Cameron County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. NEW HORIZON HEALTH CENTER currently makes medications affordable by offering a flat discount on all 340B covered outpatient drugs to our eligible patients. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $6,130,185 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $420,000 per year to purchase these same drugs at the 340B ceiling price. This represents a 1,459.6% increase in upfront capital required for procurement (or 14.6 times the original cost). This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, NEW HORIZON HEALTH CENTER anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our diabetes & nutrition education classes, family planning programs, disease management programs, and clinical pharmacy services, such as our medication therapy management (MTM) program for complex diabetic patients. Operating Hours: We anticipate needing to reduce our clinics hours by 4 hours per week, specifically impacting weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,905 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NEW HORIZON HEALTH CENTER asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, NEW HORIZON HEALTH CENTER estimates its 2027 Annual Rebate Opportunity Cost to be approximately $919,555. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. NEW HORIZON HEALTH CENTER estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $510,849 for 2027 MFP DRUGS, and $531,000 for 2028 MFP DRUGS. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a $20,000,000 line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $1,000,000 annually (at 5%)funds that are currently dedicated to our community health workers, behavioral health services, nurse practitioners, sonographers, clinical pharmacists, dieticians, psychiatrists, dentists, and optometrists. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on NEW HORIZON HEALTH CENTER, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays NEW HORIZON HEALTH CENTER urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a very conservative 15% denial rate would result in a net annual loss of $919,555. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion NEW HORIZON HEALTH CENTER strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NEW HORIZON HEALTH CENTER believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NEW HORIZON HEALTH CENTER appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at jwallace@newhorizonhc.org. Sincerely, Jason K. Wallace Jason K. Wallace, CEO New Horizon Health Center
HRSA-2026-0001-1885Grace Health2026-04-20T04:00Z114,019 chars
Attached is a letter from Grace Health, 181 West Emmett Street, Battle Creek, MI 49037 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Cr rf L71feje ti -FIEATT-71 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Grace Health, I would like to thank the Health Resources and Services Administration (I-IRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: . Financial Losses: Grace Health anticipates an average annual loss of $135,000 from entity- owned pharmacy operations and $97,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Grace Health in particular, this means it will impact: 29,718 patients constituting 205, 466 340B-qualified prescriptions annually. $3,794,000 Current admin costs for your 340B program. Services directly supported by our 340B revenue, which include prescription home delivery, custom medication packaging, free/reduced-cost medications, OB/GYN services, optical services, specialty services, satellite locations, and AI technologies. We strongly urge HRSA to exempt CHCs from any rebate model to protect the fmancial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantiy, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate modei would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionaily, the 2027 list inciudes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi:10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. httINs://www.ahaiourna1s.oridoi/pdf/10.1161/cireulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. huils://www.samhsa.uov/data/data-we-co11ecthisduh-nationa1-surveN druu-use-and-health/nationa1-re1eases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, iimiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a fmancial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 4 A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Grace Health provided $870,850 in sliding fee discounts in 2025, provided through discounted medications and medicai services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Grace Health anticipates needing 1.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Grace Health anticipates an increase of $55,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Grace Health is estimating we will need 1.75 FTEs of additional support, due to additional 340b compliance support, finance support, and inventory management. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Grace Health anticipates the additional staff to cost $150,000-$200,000 per year PLUS an additional $2.4 million in upfront drug costs in 2026, increasing to $5 million in 2028 as the number of MFP drugs expand. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 20 hours weekly will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Grace Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different soflware platforms, as they currently do with contract pharmacy poiicies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An initial cost of $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these cornplex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 29,718 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $40,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 6 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor clairns across 6 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Calhoun County, Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a 6 pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.m Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the 9 Vulnerabilit Index Approach to Identify Phannacv Deserts and Keystone Pharmacies Pharrnao and Clinical Pharmacolocy [ JAMA Network Open JAMA Network 10 htips://www.healthaffairs.onVdoi/abs/10.1377/hlthat12024.00192?[ounlalCode=h1thaff 7 wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. When a Grace Health patient qualifies based on financial need, the patient automatically qualifies for reduced copay cost, which is directly based on what Grace Health purchases the medication for. Grace Health patients with sliding-fee discounts do not pay any additional dispensing fees for their medications to ensure all financial barriers for the patient are removed. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assurning a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bpbc.hrsa.eov/eornRliance/comoliance- rnanual/ch apterWootnotel 0 13https://enlivenhealth.co/blod\ ear-en d-busin ess-h eahh-ch eck-ke \ -rnetrics-evely-nbarmacy-owner-should-review 8 however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 14 https://340broricing.hrsa.gov/ 15 https://www.cms.tlov/files/zip/selected-drutt-list-necotiated-orices-also-known-maximum-fair-prices-statutezip.zip 9 WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $2.5 million in 2026 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $137,000 in 2026 to purchase these same drugs at the 340B ceiling price. This represents a 1,725% increase in upfront capital required for procurement. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Grace Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Grace Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $500,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Grace Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $203,000 in 2026, $354,000 in 2027, and then $415,000 in 2028 as additional MFP drugs are added. 10 Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients depend on Grace Health, the risk of our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 29,718 patients depend on. a. Financial Impact of Rebate Denials and Delays Grace Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financiai harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current voiume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $370,000 in 2026, growing to $793,000 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) 1n)s://www.federalretz i sten liov/documents/2025/08/01/2025-14619/340b-pro ram-notice-vp1ication-process-for-the-340b- rebate-rn od e1-611ot-prog ram 11 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-ievel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits!' The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."18 17 Manufacturer Audit Guidelines https://www.hrsa.uov/sites/defauit/ti1esihrsa/opa/dispute-resolution-process-12-12-96.0df 18 340B House Report Legislative History. H.R. REP. 102-384(I1). 12 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute expiicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: 19 Administrative Dispute Resolution Regulation, httrs://www...2ovinfo.L-_ovicontentirkJFR-2024-04-19/pdf/2024-08262.pdf 13 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient defmition and eligibility determinations to covered entities." Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/defaultifiles/hrsafrural-health/phs-act-section- 340b.pdf 14 Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If IIRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative 21 hups://infp.su beaconchan nel m anaaem ent.com/en/arti cl es/13335320-val dati on-codes-and-pri ci u-codes-elossan 15 burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support intemal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete 22 htslls://public-inspection.federalregister,gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 16 claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. NI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B prograrn are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication 17 While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedulc.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. 24 5 U.S.C. 500-596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), httos:!,Avv-N.fda. _cv/rc.: ulatc , , u dun ce-d o c urn litslicast-bui-dc:risoik:,,-1)tovisioilS-CO11Cei)i-and-ivitICinICS (last visited Mar. 13, 2026); H.R. REP. 102-384(I1)). 25 Medicare and Medicaid Programs; Calendar Y ear 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, httns://www.eovinfo.gov/content/pk2/FR-2025-11-05/pdf/2025-I9787.ndf 27 H.R. REP. 102-384(II) 18 A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."2 8 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B 28 42 U.S.C. 256b(a)(1) 29 Id. 19 statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."3 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute oniy protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects 3 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the HHS may "develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 20 to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. In Michigan, 340B statue and state policy require claims billed to Medicaid FFS to be submitted at actual acquisition cost. If a rebate model were implemented, the actual acquisition cost is unknown on the date of service. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for 3$ See 42 U.S.C 256b(a)(5)(A). 36 https://medi-calrx.dhcs.ca.ov/cms/medicalrx/static- assets/clocurnentstprovider/2025/12 A Claim Submission Requirements 340B Rebate Model Pilot Drus.pdf 37 C.F.R. 447.518(a). 21 drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possible prices to acquire 22 a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, lijf the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."4 The Oregon Health Authority commented, "[ilf Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, Imps://www.cms.2ov/files/document/ipm -2028-final- guidance pdf. 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, huj ,s://www.re.lu lati on s. .:ov/coniment/H RS A-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.re2 ulati on s.uov/comment/HRSA-2025-0001-0980. 23 organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 24 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. " 44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payrnent. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfncov/currenUtitle-42/chapter-IVisubchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 45 32 C.F.R. 199.21(q)(2)(iii)(E) 25 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs ofproviding care to uninsured and underinsured patients.46 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already 46 Genesis Health Care, [nc. v. Becerra, No. 4:19-cv-01531-RBH, shp op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with ccrnmercial contracts, www.Kaideros.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), lssue No. 3. (widely used drug industry data vendor and analytics services provider, Kalcleros, identifying that commercial 340B claims data is worth "at least . . . $6 billion annually" in 2022.) 26 factored into their high drug list prices.5 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit." We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.S4 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the $ Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Ka;dcros.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . . . is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, hti ps://340breport.com/le_islative-ma:Vcontraet- phannac -protection-bill/: 340B Report,Legislative Map: Laws Passed That ProhibitPBM Underpayment, https://340breport.com/leeistative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers ofAmerica v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 27 Third Circuit has made clear, "obligations cannot spring from silence."56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or 56 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). " 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 28 transferring 340B drugs to nonpatients.59 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by aliowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program."6And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.6i IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 59 42 U.S.C. 256b(a)(5)(B) 6 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 29 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. 30 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itsel As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate mode162 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 62 htto://beaconchannehnana2ementcom/Taees/resources (Johnson & Johnson Policy Documents) 31 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the rnajor disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Grace Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Grace Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 32 Grace Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Carrie Nelson, PharmD, Grace Health Director of Pharmacy, e-mail: carrie.nelson@gracehealthmi.org. Sincerely, Peter Chang, MD, President/CEO Grace Health 181 West Emmett Street Battle Creek, MI 49037 PE, FAAFP 33
HRSA-2026-0001-1886(no commenter metadata)2026-04-20T04:00Z42,201 chars
See attached file(s) Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) University of Iowa Health Care respectfully submits comments regarding the Health Resources and Services Administrations (HRSA) request for information regarding the 340B Rebate Model Pilot Program. While we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. Covered entities have relied on an upfront discount program design and created operational procedures and care models to maintain and expand patient access to care services. Manufacturers are suggesting that a rebate model would address duplicate discounts. The current 340B program structure includes measures to prevent duplicate discount such as manufacturer and HRSA audits to support program integrity. In lieu of a rebate model to address duplicate discount concerns, we would support a claims clearinghouse managed by an independent third party. An independent claims clearinghouse would allow covered entities to continue to receive the 340B price at point of sale. This would eliminate the need for rebate reconciliation or manufacturer-imposed claims data submissions and would ensure that covered entities do not bear the cost of delayed discount. If a 340B rebate is implemented despite objections, HRSA should implement the program as a pilot, preferably with volunteers and not nationwide for all covered entities. It is imperative that HRSA manages the program and that no aspect of program administration is granted to manufacturers. Thank you for the opportunity to contribute to the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully assess the potential damage to covered entities and their patients from such a major policy shift. We look forward to working with HRSA to create policy solutions that strengthen the 340B program and continue to support our patients. Please consider comments from University of Iowa Health Care on all aspects of a rebate pilot program implementation under the 340B Program. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Greater than 75% of all transactions at University of Iowa Health Care are 340B eligible. This total reflects the scale and complexity of University of Iowa Health Care operations as Iowas only academic medical center and statewide specialty referral hub. Transactions include outpatient prescription dispensing, specialty pharmacy prescriptions, infusion, and clinic-administered outpatient drugs captured through split- billing systems, and contract pharmacy dispenses serving patients across Central and rural Iowa. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. University of Iowa Health Care currently incurs administrative costs to operate 340B under the upfront discount model, including both internal costs and third-party/vendor costs. These include: Internal administrative costs: - 340B program oversight and governance (policy maintenance, compliance leadership oversight) - pharmacy operations and split billing monitoring - eligibility workflows supporting patient definition compliance (linkage to outpatient status and covered entity responsibility for care) - diversion prevention controls, documentation, and ongoing monitoring - duplicate discount prevention (including Medicaid workflows, modifier management, and coordination with state/managed care processes where applicable) - audit readiness, document retention, internal sampling, and corrective action processes - third-party administrator (TPA) services oversight - finance and revenue cycle coordination Third-party costs - split-billing software licensing, maintenance, and support - contract pharmacy administration and reconciliation services and TPA fees - interface fees for EHR/pharmacy/billing data integration - external audit support used to validate program controls or prepare for HRSA audits University of Iowa Health Care also incurs administrative cost from cross-departmental effort (pharmacy, revenue cycle, compliance, legal, IT, and finance), particularly for contract pharmacy oversight and reconciliation. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for University of Iowa Health Care include: - Staffing / labor hours: Dedicated 340B operations, contract pharmacy oversight staff, analysts performing eligibility review and reconciliation, documentation, and corrective actions. - IT systems and interfaces: Split-billing and replenishment systems; interfaces between EHR, pharmacy dispensing platforms, wholesaler purchasing files, claims adjudication files, and contract pharmacy data feeds. - Third-party vendor/TPA costs: Contract pharmacy administration and data matching; claims feeds; reporting and audit modules; ongoing vendor support for data issues. - Compliance activities: Routine reconciliations; eligibility and accumulator logic testing; audit response capacity; policy updates in response to manufacturer actions and evolving program interpretation. - Complexity multipliers: Specialty drug growth, increasing claim complexity, contract pharmacy network scale, and multi-site outpatient clinics. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. A rebate model would materially increase administrative and operational costs for University of Iowa Health Care because it converts 340B from a prospective purchasing discount into a claims-based receivables and dispute management system. One-time startup costs (implementation) 640 hours - build/configure rebate submission workflows (new SOPs, internal controls, segregation of duties) - IT build-out: mapping claims data elements; establishing secure transmission; integrating with clearinghouse and selected manufacturer portals - accounting/finance redesign: receivables recognition, cash application, reconciliation procedures, audit trail standards - staff training and role redesign (pharmacy, finance, compliance) - legal/compliance review of new data sharing terms and privacy protections - contract amendments with TPAs, contract pharmacies, wholesalers (as applicable) Ongoing costs (steady-state operations) 40 hours per week minimum - daily/weekly rebate claim creation and submission for eligible dispenses/administered drugs - monitoring payment timeliness against 7-day requirement; tracking outstanding receivables - denial intake, documentation review, and appeals/dispute resolution - reconciliation across: claims eligibility purchase files rebate remittances - expanded audit support (internal and external) due to new failure points (missing fields, past due payments, denials) - additional patient access management activities if inventory or dispensing workflows are impacted - additional work for MDPNP/MFP-related rebate submissions (if applicable) and interactions with Medicare drug pricing program non-duplication logic University of Iowa Health Care notes that even a limited drug set pilot creates full-system costs because workflows must accommodate mixed models (upfront 340B for some drugs, rebate model for others). ii. Describe the methodology and assumptions used to develop these estimates. University of Iowa Health Care would estimate costs by: - process mapping current-state vs. future-state workflows (pharmacy purchasing, dispensing/administering, claim adjudication, split-billing, compliance monitoring, audit response) - assigning staff time to new functions (rebate claim submission, tracking, dispute resolution, reconciliation) - using vendor quotes for required interfaces/modules and ongoing transaction fees - modeling expected volume for pilot drugs (including specialty/high-cost therapies that carry disproportionate reconciliation effort) - assuming non-zero denial rates and dispute volume (because disputes are a predictable outcome of any new claims validation system) Assumptions include: - multiple manufacturers with differing technical requirements unless HRSA standardizes formats - initial period of elevated errors and resubmissions - need for auditable documentation for each claim paid/denied and each dispute resolution outcome iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. Incremental costs would cover: - Claims processing / identification: isolating eligible dispenses, confirming outpatient status, associating covered entity identifiers, identifying contract pharmacy dispenses, and ensuring payer classification. - Data submission: generating standardized files (or portal submissions), transmission security, completeness verification, resubmission management. - Reconciliation: matching each rebate to a claim; matching claim to purchasing record; matching to financial ledger; ensuring no double-counting; variance analysis. - Denial management: triage, evidence collection, appeals, tracking resolution timelines. - Audit support: maintaining new documentation layers; responding to HRSA/manufacturer/clearinghouse audits; testing controls. - Financial operations: receivables aging, cash posting, forecasting, and internal reporting. Effect on current administrative costs: - University of Iowa Health Care would not eliminate existing upfront 340B administrative costs because split-billing, eligibility verification, contract pharmacy oversight, diversion prevention, and audit readiness would still be required. - The rebate model adds a second operating system. Current controls would remain plus new systems to manage rebate claims, receivables, and dispute submission and tracking. iv. If a potential 340B Rebate Model Pilot Program were structured to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Offsets could be achieved by: - Per-claim administrative payments paid automatically through the clearinghouse (e.g., fixed fee per accepted submission). - Federal clearinghouse funding so covered entities are not charged submission/transaction fees. - Manufacturer-funded administrative support through standardized program fees (not negotiated bilaterally). - Automation requirements that reduce manual labor (standard file formats, standardized denial reason codes, standardized adjudication timelines). Quantification approach: - HRSA could establish a standardized cost-to-comply methodology that incorporates activity-based fees, validated through sampled entities of varied sizes (academic medical centers, rural hospitals, FQHCs). - University of Iowa Health Care recommends HRSA set an offset formula tied to transaction volume. v. Comment on the impact of these incremental costs under your current operations. For University of Iowa Health Care, incremental costs would: - require additional staffing and/or vendor capacity, - increase audit exposure and compliance risk due to new failure points (missing fields, late payments, denials), - divert resources from patient-facing services funded by 340B savings - reduce ability to pursue expansion of clinical service or capital projects supporting those services secondary to floating drug expense pending 340B rebates c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Yes. University of Iowa Health Care anticipates both: - additional FTEs dedicated to rebate submission, reconciliation, and dispute management; and - reallocation of existing time from pharmacy operations, clinic support, revenue cycle, and compliance teams toward rebate administration. Quantification: - additional monthly hours for reconciliation/denials are expected to scale with pilot volume and denial rate. - Minimum of one FTE salary and fringe benefits ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. Minimum of one FTE salary and fringe benefits Roles Include: - Create/submit rebate files, manage completeness checks, resubmissions. - Match rebates to claims/purchases; manage receivables aging; variance analysis. - Manage denial documentation, appeals, tracking timelines. - Maintain interfaces, data mapping, error resolution. - Monitor controls, prepare audit documentation, conduct periodic testing. - These roles would be permanent if the rebate model is ongoing because core functions repeat each cycle (submission payment reconciliation audit). d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. University of Iowa Health Care would require: - modifications to split-billing systems to support a rebate-eligible claim extract workflow - integration between EHR/pharmacy systems, claims adjudication feeds, and rebate submission platform - secure transmission tools (encrypted file transfer; access controls; audit logs) - reconciliation and reporting tools capable of claim-level tracking and denial analytics - financial systems configuration for receivables, cash application, and audit trails - standardized identifiers (e.g., OPA ID mapping to claim submissions) and contract pharmacy linkages Without a centralized HRSA clearinghouse, University of Iowa Health Care would also need to support multiple manufacturer portals and file formats, materially increasing complexity and error rates. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Estimated costs (placeholders): -Commercially available platforms start at $75,000 and expense increases as transactions increase. University of Iowa Health Care notes that recurring costs may scale with transaction volume if priced per submission or per claim. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Additional costs include: - Legal review / contracting: data use agreements, vendor amendments, manufacturer terms (one-time + recurring as terms evolve) - Training: pharmacy, clinic, finance, and IT training (one-time at go-live; recurring for turnover) - Consulting support: implementation assistance, compliance redesign, internal control testing (often one-time + periodic) - Change management: operational testing, dual processing during transition (one- time but substantial) - Potential service impacts: if liquidity/administrative burden grows, there may be downstream pressure to reduce program-supported services (risk-dependent; could become recurring) ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). University of Iowa Health Care-specific factors include: - Statewide referral hub role: Disruptions at University of Iowa Health Care ripple across rural referring facilities and specialty access statewide. - High Medicaid and uninsured volume: increases sensitivity to cash flow disruptions and administrative costs. - Specialty drug intensity: Oncology, transplant, and biologics amplify working- capital exposure because unit costs are high. - Academic mission: Clinical programs support training and workforce development. Instability can impact broader state health capacity. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Potential access impacts include: - Reduced inventory of high-cost specialty drugs if upfront acquisition costs rise and rebates lag or are disputed. - Delays initiating therapy (oncology infusions, biologics) if procurement becomes more conservative. - Contraction of contract pharmacy access if reconciliation complexity and financial risk increase. - Reduced capacity for medication assistance/adherence programs funded by predictable 340B savings. - Operational delays at point of service if additional validation steps slow dispensing. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Yes. A 10-day payment requirement reduces but does not eliminate cash flow risk because: - University of Iowa Health Care would still purchase drugs at higher upfront prices (e.g., WAC or non-340B pricing) and carry the differential as receivables until rebate payment. - Wholesaler payment terms are net 7 days requiring payment prior to receiving a 340B rebate. - Any delay caused by incomplete claim determinations, transmission errors, denials, or disputes extends the float period and increases financing exposure. Financial risks include: - Liquidity risk: interim financing needs rise, especially for specialty drugs with very high acquisition cost. - Timing volatility: inconsistent manufacturer processing creates unpredictability in cash receipts. - Credit/borrowing risk: increased reliance on credit lines or internal reserves. - Denial/dispute risk: delayed or denied rebates become financial leakage or extend receivables Even small percentage delays applied to large specialty spend can produce a material cash burden for a statewide AMC like University of Iowa Health Care. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Terms are net 7 days and are similar for 340B and non-340B purchases because wholesaler payment terms are tied to contractual purchasing arrangements, not the covered entitys subsequent reimbursement model. In the current model, the key benefit is that University of Iowa Health Care pays the reduced 340B price within standard terms rather than financing a higher price pending rebates. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. University of Iowa Health Care does not have prompt pay incentives ii. State the average number of calendar days within which your organization typically remits payment under these contracts. University of Iowa Health Care typically remits payment within seven calendar days under current wholesaler terms, depending on payment cycle, invoice reconciliation, and purchasing volume. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Yes. The current model delivers 340B benefit at purchase, aligned with wholesaler invoicing. A rebate model moves the benefit after dispensing, meaning University of Iowa Health Care must pay wholesaler invoices on normal terms at higher prices, and wait for rebates (or denials/disputes) later. Alternative arrangements that could mitigate impacts: - Hybrid model: wholesalers invoice at an estimated 340B price; manufacturers reconcile differences via periodic true-up (reduces float). - Extended wholesaler terms specifically for pilot drugs: aligns invoice due dates with rebate receipts (requires negotiation and may not be uniformly available). - Central clearinghouse: clearinghouse offsets payables/receivables to reduce cash movement and timing mismatch. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. To ensure adherence, the pilot must be structured with objective triggers and enforceable consequences: 1) Uniform definition of complete claim - HRSA should publish the authoritative claim data elements. - Manufacturers should be prohibited from adding custom data requirements. 2) Centralized submission and timestamping - Claims submitted through a HRSA/CMS-designated clearinghouse with automated completeness validation. - The 10-day clock starts at clearinghouse acceptance. 3) Deemed approval - If manufacturer neither pays nor issues a compliant denial within 10 days, the claim is deemed approved and payment is automatically initiated. 4) Interest/penalties - Automatic interest accrual beginning day 11; escalating penalties for repeated noncompliance. 5) Standard denial reason codes and documentation rules - Denials must include specific codes, supporting documentation, and a correction path. - Unsupported denials cannot stop the clock. 6) Public performance reporting - HRSA publishes manufacturer timeliness and denial metrics creating accountability. 7) Financial assurance - Require prefunding, escrow, or other guarantee mechanisms to ensure manufacturers can meet accelerated payment timelines. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Additional structural tools: - Clearinghouse pay-first, dispute-later approach: Pay rebates within 10 days, then reconcile disputes through independent adjudication without delaying cash. - Short-cycle remittances: Require daily/weekly EFT batches rather than monthly payments. - Caps on denial rates pending audit: Manufacturers exceeding thresholds must undergo review and corrective action. - Standardized dispute resolution timelines: Implement fixed deadlines for appeals to prevent indefinite receivables aging. - Prohibition on retroactive recoupment after defined window: enhances financial predictability for safety-net providers. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Yes. Guardrails are essential because denials can easily become a mechanism for delaying payment. University of Iowa Health Care recommends denials be limited to a narrow set of objective circumstances, such as: - verified duplicate rebate already paid on the same claim/identifier; - covered entity not eligible or not registered at time of dispense with HRSA confirmation; - data integrity failure that cannot be corrected through resubmission with specified documentation. Denials should not be allowed for broad or subjective reasons (e.g., manufacturer-specific eligibility theories, demands for non-standard data, or disputes about patient definition beyond HRSA standards). Guardrails should prevent manufacturers from shifting compliance burden onto covered entities through denial practices. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Standard process elements should include: - Uniform denial template (HRSA-issued): claim ID, denial code, specific rationale, required documentation, correction path. - Standard denial code set (limited, enumerated). - Strict timelines: denial within 10 days; covered entity appeal window; manufacturer response deadline; final adjudication deadline. - Independent dispute resolution: HRSA or third-party arbitration with binding outcomes. - Payment protections: dispute does not halt payment if deemed approval applies (or escrow is used). 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. University of Iowa Health Care uses integrated systems and vendor support to manage 340B compliance, including: - EHR (patient encounter, outpatient status, service location, and clinical linkage), - pharmacy dispensing systems (NDC, quantity, days supply, prescriber, written location), - split-billing software (eligibility logic, purchasing documentation, audit notes, reports), - wholesaler purchasing files (invoice and purchase data), - TPAs for contract pharmacy administration (claim feeds, accumulators, reports, purchasing documentation), - document retention systems for audit support and policy documentation. Data is retained according to compliance and audit readiness needs, including HRSA audit support and internal monitoring. b. Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). University of Iowa Health Care employs: - automated validation checks (missing fields, NDC mapping, eligibility flags), - over 1300 routine audits per year to validate eligibility, prevent duplicate discount, prevent diversion, reconcile purchases - contract pharmacy claim validation and audit sampling - internal compliance audits and corrective action tracking - periodic vendor controls testing and exception reporting - HRSA audit readiness procedures such as simulated HRSA audits, independent audits, policy and procedure review, document retention, OPAIS database audits, and audit sampling protocols c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Yes. A rebate model would require ongoing (not one-time) additional data collection and processing because payment depends on claim-level submission, tracking, and dispute management. Changes include: - creation of rebate submission-ready claim files, - routine submission of claim files - tracking submission acceptance timestamps, - maintaining payment, denial, dispute status per claim, - expanded financial reporting and receivables tracking, - expanded retention of submission and response artifacts to defend audits and disputes. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. University of Iowa Health Care recommends the pilot require only minimum necessary elements sufficient for eligibility confirmation and duplicate discount prevention: Pharmacy claims (contract + in-house) - NDC (11-digit) - quantity dispensed - date of service - covered entity identifier (340B ID) - contract pharmacy identifier (NPI/NCPDP) where applicable - payer type (Medicaid FFS / Medicaid MCO / Medicare / commercial) - prescription number - 340B indicator (pilot flag) and submission timestamp Medical benefit/administered drugs - NDC (11-digit) - quantity dispensed or wasted - date of service - covered entity identifier (340B ID) - NPI - payer type (Medicaid FFS / Medicaid MCO / Medicare / commercial) - 340B indicator (pilot flag) and submission timestamp Availability and sources: - Most elements already exist in claims and EHR/pharmacy systems. - Contract pharmacy elements are already transmitted to TPAs and claims processors in standard feeds. - The gap is standardization and authoritative payer and duplicate discount flags which could be best solved through clearinghouse for data and CMS integration rather than covered-entity reporting. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Recommendations: - enforce minimum necessary data standards - prohibit patient-level clinical detail unless strictly required. - Centralized, neutral secure portal or clearinghouse with encryption, role-based access, and audit logs. - standardized data use agreements (DUAs) and business associate agreements (BAAs) where needed. - prohibition on manufacturers requesting additional covered entity data beyond pilot schema. - strong breach notification and data retention limits - independent security certification for any clearinghouse handling PHI/PII. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. University of Iowa Health Care historically prevented duplicate discounts by: - maintaining a list of state-required claim indicators and modifiers for bills sent to Medicaid payers for all states - routine verification of Medicaid BIN/PCN and adding them to all TPA testing for claim eligibility - quarterly updates of the OPAIS Medicaid Exclusion File - applying state-required claim indicators and modifiers for bills sent to Medicaid payers - routine audit of out of state Medicaid payers to verify compliant billing - maintaining auditable records of 340B eligibility determinations and purchases - using split-billing systems that track Medicaid-related carve-in/carve-out logic as configured - auditing 100% of retail claims to assure that correct modifiers were applied to Medicaid adjudications - auditing 100% of contract pharmacy claims to exclude any claim for a patient that has Medicaid as a primary or secondary payer, even if it is not certain that Medicaid was billed - conducting routine reconciliations and internal audits - retaining contract pharmacy and in-house dispense records sufficient for HRSA audit support and state Medicaid coordination b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to an MFP under the MDPNP, including any changes to data collection and record-maintenance practices. Since January 1, 2026, University of Iowa Health Care has enhanced monitoring to address new non-duplication dynamics associated with MFP implementation by: - strengthening payer classification validation for affected drugs - expanding tracking of claims that may be subject to MFP pathways - reinforcing audit trails for outpatient eligibility and dispensing records - collating data from the Medicare Transaction Facilitator, Beacon MFP, and TPA to identify claim status by ICN - updating 340B status for all 340B claims in Beacon MFP c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. University of Iowa Health Care experience reflects common system limitations: - payer data and encounter records can be delayed or incomplete - claim identifiers are not uniform across systems - the distinction between program payment pathways is often not visible to covered entities at the time of dispense Where MFP access is not provided due to non-duplication provisions, identification is operationally challenging without standardized flags and consistent payer and system reporting. d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Challenges include: - data availability gaps: limited access to authoritative Medicaid rebate invoicing decisions - claim identification: no universal claim ID across PBMs, EHR, Medicaid rebate systems, and manufacturer reconciliation platform - Beacon MFP does not incorporate claim 340B status data from the covered entity and requires manual data analysis and status update submission - Rebate denial inquiry requires a separate data submission in a third platform. Data collection time consuming. - timing mismatches: Dispensing occurs daily, however, Medicaid rebate invoicing is quarterly. Disputes occur months later. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Minimum necessary elements: - prescription number - NDC (11-digit) - quantity dispensed - date of service - covered entity identifier (340B ID) - claim 340B status from TPA - contract pharmacy identifier (NPI/NCPDP) where applicable - payer type (Medicaid FFS / Medicaid MCO / Medicare / commercial) - 340B indicator (pilot flag) and submission timestamp - authoritative Medicaid rebate exclusion flag (best provided by state/CMS, not inferred) - 340B rebate request indicator + submission timestamp University of Iowa Health Care highly recommends ONLY a non-biased, third-party platform be allowed to serve as a data hub for 340B claims. Also, the third-party platform should focus on data collection and strategic program improvements, without any financial implications (rebates) being included in the process. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? University of Iowa Health Care recommends monthly submission to HRSA of: - rebate payment timeliness (median/mean; % paid within 10 days) - total rebates requested, paid, denied, pending - denial reasons by standardized code and denial documentation completeness - dispute rates, resolution times, outcomes - aging of outstanding receivables - system outage or processing failure incidents affecting timeliness - any unilateral manufacturer completeness criteria applied (should be prohibited) b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should publish quarterly aggregated manufacturer performance: - % paid within 10 days - denial rate and top denial reason codes - average time to dispute resolution - volume of claims processed - outstanding unpaid amounts (aggregated) - compliance actions taken (high-level, non-confidential) Public reporting creates accountability and allows stakeholders to detect systemic problems early. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Frequency: - Monthly to HRSA for oversight; quarterly public reporting. Duration: - at least 35 years to assess the following stages o implementation stabilization (year 1) o operational maturity (years 23) o longitudinal effects on access and participation (years 45) 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A rebate pilot could improve integrity by: - enabling post-dispense validation against standardized criteria - creating clearer audit trails and standardized submission records - reducing ambiguity in duplicate discount prevention However, integrity gains are contingent on: - standardized national claim formats - strict limits on manufacturer data demands - fast and enforceable payment timelines - safeguards preventing denials from becoming payment delay tools If the pilot increases burden or financial risk, it may reduce participation and unintentionally harm program integrity by destabilizing safety-net operations. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Yes, if the pilot includes authoritative payer classification and a standardized Medicaid rebate exclusion flag. Without authoritative flags, manufacturers will still rely on inference, resulting in disputes and data demands that do not reliably prevent duplicate discounts. ii. Reduce diversion or improper claims; and It is unlikely that rebate models will reduce diversion. The rebate model would rely on subjective manufacturer interpretations. Diversion prevention requires covered entity controls to monitor multiple elements, as well as HRSA oversight. iii. Increase pricing transparency across stakeholders. The rebate model is unlikely to improve transparency. The upfront discount process only allows 340B purchases to replace drug used for 340B dispenses. The rebate model is not improving the quality of eligibility review to prevent discounts. Patient-level data and covered entity-specific sensitive operational details are necessary to audit duplicate discount. Transparency must not become a pathway to require additional covered entity data beyond what is necessary. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Recommendations: - national standardized data elements - standardized claim identifier - standardized denial reason code sets - centralized neutral clearinghouse submission with automated completeness validation - strict minimum necessary data - prohibit customized manufacturer data requests - automate reporting and provide template formats to reduce manual work - claim level financial reporting - require HRSA to publish aggregate performance metrics and compliance actions d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. Potential benefits: - standardized documentation may improve audit defensibility - consistent denial codes and metrics can identify systemic issues - improved duplicate discount certainty could reduce disputes, good faith inquiries, and manufacturer restrictions Whether benefits outweigh costs depends on: - administrative burden - payment reliability - denial and dispute process - whether cash flow risks are mitigated through enforceable rules For a statewide safety-net AMC like University of Iowa Health Care, benefits are unlikely to outweigh costs unless payment is reliably timely, denials are tightly constrained, and the system is highly automated with administrative offsets.
HRSA-2026-0001-1887Eric Lawlor · Bridgeville, PA, United States2026-04-20T04:00Z50,458 chars
See attached file(s) April 15, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: As Chief Financial Officer of Cornerstone Care, Inc., I appreciate the opportunity to submit this response regarding the proposed 340B Rebate Model Pilot Program. I am writing from a financial stewardship perspective to clearly outline the significant risks this proposal poses to the long-term financial sustainability of community health centers (CHCs) and to the stability of the safety-net infrastructure on which millions of patients rely. The 340B Drug Pricing Program is a cornerstone of Cornerstone Cares financial model. It enables us to stretch scarce federal resources to support essential but often non-revenue- generating services, including mobile health units, enabling services, pharmacy access, and deeply discounted medications for low-income and uninsured patients. Shifting from an up-front discount model to a retrospective rebate structure materially alters the programs risk profile by transferring cash-flow, credit, and collection risk from manufacturers to safety-net providers that operate on extremely thin margins. From a financial management standpoint, the proposed rebate model introduces several interrelated and material financial risks: Unsustainable up-front capital requirements: Requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) would increase Cornerstone Cares annual up-front drug spend from approximately $633,545 under 340B pricing to more than $2.4 million, a 281% increase in required working capital for the same medications. This level of capital exposure is incompatible with prudent fiscal management for organizations operating on thin margins. Cash-flow volatility and liquidity risk: The time between drug purchase, dispensing, data submission, manufacturer review, and rebate payment could range from 40 to 85 days, and potentially longer if rebates are denied or delayed. During this period, funds essential to daily operations remain inaccessible, constraining our ability to meet payroll, manage emergencies, or respond to public health needsparticularly concerning for CHCs with fewer than 90 days of cash on hand. 2 Wholesaler credit and borrowing risk: Purchasing drugs at full WAC significantly increases the likelihood of exceeding wholesaler credit limits, which could disrupt medication procurement. To avoid interruptions, CHCs may be forced to rely on lines of credit or external financing, diverting scarce resources toward interest expense and debt service. This effectively converts the 340B program into an interest-free loan to manufacturers, contrary to its statutory intent. Unfunded administrative and compliance costs: In addition to drug acquisition costs, Cornerstone Care anticipates more than $350,000 annually in new staffing costs, increased reliance on external vendors, and substantial investments in pharmacy software and compliance infrastructure. These incremental, unfunded expenses further erode operating margins that are already under pressure across the CHC sector and undermine long-term financial sustainability. Taken together, these factors create a cumulative financial risk that threatens Cornerstone Cares ability to maintain service levels, preserve access to affordable medications, and continue reinvesting in community-based care. Over time, the rebate model would force difficult trade- offs, including scaling back pharmacy services, reducing sliding fee discounts, and curtailing programs that rely on 340B savings to remain viable. From a fiduciary standpoint, these outcomes are inconsistent with responsible financial governance and with the mission Congress intended the 340B program to support. For these reasons, I strongly urge HRSA to exempt community health centers from the 340B Rebate Model Pilot Program and consider an alternative model such as a national, neutral claimsclearinghouse approach. Preserving the long-standing up-front discount structure is essential to protecting the financial stability of safety-net providers and ensuring continued access to care for the most vulnerable populations. Thank you for the opportunity to provide this perspective. I welcome continued dialogue on policies that promote program integrity while safeguarding the financial viability of community health centers. Sincerely, Eric Lawlor Chief Financial Officer Eric Lawlor (Apr 20, 2026 10:32:15 EDT) Eric Lawlor 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 04.20.2026_340B CFO Rebate Model Ltr Final Audit Report 2026-04-20 Created: 2026-04-20 By: Katie Sill (ksill@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAAdb14NivOLFms2oSBnNumhT0k4kkuLdzs "04.20.2026_340B CFO Rebate Model Ltr" History Document created by Katie Sill (ksill@cornerstonecare.com) 2026-04-20 - 2:02:43 PM GMT Document emailed to Eric Lawlor (elawlor@cornerstonecare.com) for signature 2026-04-20 - 2:02:49 PM GMT Email viewed by Eric Lawlor (elawlor@cornerstonecare.com) 2026-04-20 - 2:31:57 PM GMT Document e-signed by Eric Lawlor (elawlor@cornerstonecare.com) Signature Date: 2026-04-20 - 2:32:15 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 2:32:15 PM GMT
HRSA-2026-0001-1888(no commenter metadata)2026-04-20T04:00Z8,356 chars
See attached file(s) CHIEF EXECUTIVE OFFICER MICHELE MEYER BOARD OF TIWSTEES MELVIN WARDEN - CHAIRMAN 1'AUL VILLMER, DDS - VICE CHAIRMAN JAMES POLITTE - TREASURER SARAH GIBSON - SECRETARY LISA KING - MEMBER WASHINGTON COUNTY MEMORIAL HOSPITAL Managed by Mercy April 17, 2026 The Honorable Thomas J. Engels Adrnirtistrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: I. Introduction On behalf of Washington County Memorial Hospital, we appreciate the opportunity to respond to the Health Resources and Services Administration's (HRSA) Request for Information (RFI) regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Prograrn. Washington County Memorial Hospital is a Critical Access Hospital located in Potosi, Missouri that has participated in the 340B progranl since April 2012. In line with the congressional intent of Section 340B of the Public Health Service Act, the savings our institution realizes through the 340B program are pivotal in allowing us to continue serving the most vulnerable nlembers of our community. The current mechanismin which covered entities receive an upfront discounted acquisition cost for 340B-eligible drugsis foundational to the prograrn's effectiveness for safety-net providers. 300 Health Way Potosi, MO 63664 Phone: 573-438-5451 CHIEF EXECUTIVE OFFICER MICHELE MEYER BOARD OF TRITh1BES MELVIN WARDEN - CHAIRMAN PAUL VILLMER, DDS - VICE CHAIRMAN JAMES POLTITE - TREASURER SARAH GIBSON - SECRETARY LISA KING - MEMBER WASHINGTON COUNTY MEMORIAL HOSPITAL fanaged by Mercy II. Background: Impact on Our 340B Program To illustrate the concrete impact of the proposed rebate model on our operations, we provide the following data frorn our most recent 12-month reporting period: Total claims for products on the 2026 and 2027 MFP drug list: 2,840 Current 340B acquisition cost for those drugs: $641,000 Estimated upfront cost under the proposed rebate model (at WAC): $2,543,000 These products as a share of our total 340B program: 32% Projected annual increase in upfront costs if the model were extended to all 340B products: $5.97 million Projected annual reduction in 340B savings due to the Medicare Drug Price Negotiation Program in 2027: 40% These figures demonstrate that a shift from upfront discounts to prospective rebates, especially in the face of reduced 340B revenue due to the MDPNP, would impose a substantial and imrnediate financial burden on our entityone that may threaten our ability to sustain current levels of patient care. III. Analysis: Concerns with the Proposed Rebate Model Based on our direct operational experience with the rebate pilot initially planned for January 1, 2026, we have identified the following concerns with the proposed model: Inequitable transfer of financial risk. Under the proposed rebate rnodel, the safety-net provider would be forced to carry the financial risk of a claim being denied the 340B rebate, while manufacturers and their third-party vendors are granted the authority to deny access to the 340B discount. These are the same manufacturers that have spent the last five years attacking and restricting our hospital's access to 340B drugs at our contract pharmacies. This fundarnentally inverts the program's design, which was intended to benefit covered entities, not to position rnanufacturers as arbiters of 340B eligibility. 300 Health Way Potosi, MO 63664 Phone: 573-438-5451 CHIEF EXECUTIVE OFFICER MICHELE MEYER BOARD OF TRUSTEES MEININ WARDEN - CHAIRMAN PAUL VILLMER, DDS - VICE CHAIRMAN JAMES POW I E - TREASURER SARAH GIBSON - SECRETARY LISA KING - MEMBER WASHINGTON COUNTY MEMORIAL HOSPITAL Managed by Mercy Wholesaler credit capacity. Our wholesalers were neither prepared nor, in some cases, willing to extend the credit limits needed on our 340B accounts to operationalize even the partial 2026 rebate pilot. Once credit limits are exceeded, wholesalers stop fulfilling drug orders, effectively halting the 340B prograrn. If pharmacies cannot receive 340B replenishment orders and consequently cannot pay 340B invoices, the entire program breaks down. Inadequate reconciliation infrastructure. Based on our experience with the third-party vendor interface selected by manufacturers for the 2026 rebate pilot, available data and reporting were insufficient to support a reliable and practical reconciliation process. Notably, the vendor cited HIPAA compliance as justification for not retaining prescription numbers on claimsbut any vendor entrusted with this function should rneet the security requirements necessary to rnaintain and report Rx numbers to system users. Increased operational and administrative burden. Beyond the increased acquisition costs, the added complexity of a rebate rnodel will require additional resources from our operations and finance teanls to continue participating in the 340B program. For the proposed pilot alone, we estirnate we will need approximately 0.25 additional FTE. IV. Recommendations: Alternative Approaches to MFP/340B Deduplication We recognize that the Medicare Drug Price Negotiation Program creates a legitimate need for a process to prevent duplication between MFP and 340B discounts. However, the algorithms manufacturers have deployed to identify 340B claims are clearly flawed. Our 340B third-party administrators require multiple data feeds to appropriately identify 340B-eligible clainls; there is no algorithm that rnanufacturers can replicate to match those processes. We respectfully urge HRSA to consider the following alternative approaches, which would achieve the dedtiplication objective with significantly less risk to covered entities: Establish a neutral 340B clainls clearinghouse. Covered entities would be required to report 340B claims to a neutral, HRSA-adininistered or HRSA-designated clearinghouse. This would remove rnanufacturers from the undue position of serving as arbiters of 340B eligibility and eliminate the financial risk the proposed rebate model places on covered entities. 300 Health Way Potosi, MO 63664 Phone: 573-438-5451 CHIEF EXECUTIVE OFFICER MICHELE MEYER BOARD OF TRUSTEES MELVIN WARDEN - CHAIRMAN PAUL VILLMER, DDS - VICE CHAIRMAN JAMES POLIITE - TREASURER SARAH GIBSON - SECRETARY LISA KING - MEMBER WASHINGTON COUNTY MEMORIAL HOSPITAL Nfanaged by Mercy Leverage existing manufacturer claims data for deduplication. Manufacturers are already permitted to require 340B claims data from covered entities as a condition of 340B access. This data could be used directly for MFP/340B deduplication rather than deploying unreliable third- party vendor algorithms. One improvement to this process would be for all rnanufacturers requiring claims data uploads to permit covered entities to attest to compliance with data upload requirements for new pharmacy accounts or accounts without usage at the time the clairns data requirement is instituted. V. Conclusion Washington County Memorial Hospital strongly urges HRSA to abandon the 340B Rebate Model Pilot Program and pursue alternative solutions to the MFP/340B deduplication requirement. As described above, the proposed rebate model would: (1) shift significant financial and operational burdens to the covered entities the 340B program was designed to benefit; and (2) grant manufacturers undue authority over 340B eligibility determinations. We urge HRSA to instead pursue a neutral claims clearinghouse or improved use of existing claims data rnechanismsapproaches that would achieve the deduplication objective without undermining the 340B program's core mission of expanding access to care for vulnerable cornmunities. Thank you for considering our perspective. We welcome further engagement on this critical issue and are available to provide additional data or clarification as needed. Sincerely, "' cottAILL,CATuDjus, Michele Meyer Chief Executive Officer Washington County Memorial Hospital Potosi, Missouri 340B ID: CAI-1261308-00 300 Health Way Potosi, MO 63664 Phone: 573-438-5451
HRSA-2026-0001-1889Judy Gashie · GREENSBORO, PA, United States2026-04-20T04:00Z397 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Requiring health centers to purchase medications at full WAC pricing and wait weeks for manufacturer rebates creates unacceptable cash flow risk. Community Health Centers operate on thin margins, and delays or denials in rebates would directly divert limited resources away from patient care.
HRSA-2026-0001-1890Beth Israel Lahey Health2026-04-20T04:00Z39,201 chars
See attached letter April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Beth Israel Deaconess Medical Center DSH220086 (BIDMC) and Northeast Hospital Corp. DSH220033 (NHC), both members of the Beth Israel Lahey Health system (BILH), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from BIDMC, NHC and other Covered Entities. As 340B-participating hospitals we are core components of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. BIDMC and NHC participate in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, BIDMC and NHCs 340B Program participation enables us to commit additional funding and services to the community safety net population we serve. BIDMC and NHC also use 340B Program savings to support critical, largely under-reimbursed healthcare services such as primary care, behavioral health. At a time when so many patients are facing affordability challenges this proposed manufacturer rebate program will make healthcare less affordable, while April 20, 2026 Page 2 enriching multinational pharmaceutical companies. This rebate model will also add unnecessary complexity and administrivia to healthcare without commensurate value or return to patients, providers or government. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, BIDMC and NHC wish to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 BIDMC and NHC submit the questions below for HRSAs consideration. We believe these questions raise fundamental issues that warrant serious consideration before adopting a rebate model. 1. HOW WILL HRSA ENSURE THE INTENT OF CONGRESS IS CARRIED OUT AND THAT COMPLIANCE BURDEN REMAINS WITH THE MANUFACTURERS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). April 20, 2026 Page 3 the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto BIDMC, NHC and other Covered Entities. 2. ALTHOUGH THE 340B STATUTE CLEARLY PROHIBITS ANY MANUFACTURER FROM IMPOSING A REBATE MODEL WITHOUT HRSAS APPROVAL,5 HRSAS RELIANCE ON THIS LONG-IGNORED PARENTHETICAL LANGUAGE TO FUNDAMENTALLY RESHAPE THE 340B PROGRAM IS SUSPECT. WITH A REBATE MODEL POISED TO AFFECT 25 OF THE MOST EXPENSIVE DRUGS IN THE MEDICARE PROGRAM,6 IT IS IMPORTANT TO REMEMBER THE MAJOR QUESTIONS DOCTRINE, I.E., WHEN IT COMES TO GRANTS OF REGULATORY AUTHORITY, CONGRESS DOES NOT HIDE ELEPHANTS IN MOUSEHOLES.7 REVIEW OF THE CONSTRUCT OF THE PILOT MODEL IS WARRANTED TO ENSURE THE CLEAR INTENT OF CONGRESS IS UPHELD, ENSURING THE BURDEN OF PROOF, ADMINISTRATION AND FINANCIAL RISK IS BORNE BY THE MANUFACTURERS THOSE WITH AMPLE RESOURCES TO DO SO. HOW COULD HRSA OR BILH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? As HRSA is well aware, any shift to a rebate model would happen in a much broader context of manufacturer actions seeking to increase their revenues. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected BIDMC and NHC. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports unreimbursed services and staff critical to ensuring patient care, such as social workers and nutritionists. Additionally, our contract- pharmacy-related pharmacies, which are not our single designated on ESP, are seeing a savings decrease around 60% in the past 6 years. This is directly limiting the extent to which we can support our community. 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 As with government agencies, healthcare providers take many precautions and bear the responsibility of protected patient data very seriously. When it comes to data disclosures, manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor, without appropriate protections or accountability should they encounter a data breach. Manufacturers demand they have the right to monetize that data in order to maintain access to their drugs. We know this data has monetary value to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so the manufacturer may be overcharging us for these drugs every single day. Good-faith inquiries for certain manufacturers have overreaching demands. Manufacturers such as AbbVie and Boehringer Ingelheim have reached out with lists of questions like interrogatories and document demands, inappropriately threatening to seek HRSA OPA approval for a manufacturer audit unless their demands are met. Manufacturers are not providing enough information on their side to complete any duplicate discount reviews, and there are no patient identifiers to be able to pull up the medications that the manufacturers ask questions about. A rebate model would only further exacerbate these issues. Regarding anticipated rebate denials: Manufacturer actions demonstrate they will delay payment and create significant administrative burden before paying out rebates. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our BIDMC and NHC pharmacies, manufacturers such as Johnson & Johnson have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO COVERED ENTITIES TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer fallback since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how and what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. BIDMC and NHC would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. Beacon (the system manufacturers use to handle MDPNP disputes) is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful and independent tools for Covered Entities to monitor and audit manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why should HRSA pursue a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. A critical question remains as it relates to the proposed rebate model: What steps will HRSA take to monitor and enforce actions against manufacturers? Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in April 20, 2026 Page 6 2024. Establishing clear criteria HRSA will apply when determining whether to take enforcement action against a manufacturer under a rebate model is To appropriate accountability in the rebate model, 340B covered entities will need effective, fair and transparent enforcement mechanisms beyond the existing ADR process. As the governing agency it will be incumbent upon HRSA to establish the levels at which non-compliance from a manufacturer are impermissible and therefore, punishable. 6. IS HRSA SANCTIONING DISCLOSURE OF PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE A COVERED ENTITY'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF A COVERED ENTITY? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE COVERED ENTITIES FOR THE VALUE OF ITS DATA? One of our principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.10 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers 9 See 45 C.F.R. 160.103. 10 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate covered entities for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? BIDMC and NHC believe it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. BIDMC and NHC urge HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From BIDMCs and NHCs perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of BIDMCs and NHCs patient population, we serve many other patients, including patients with no coverage at all. Requiring BILH to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 20, 2026 Page 8 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO COVERED ENTITIES? IF NOT, WHY NOT? As noted above, BIDMC and NHC firmly believe that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. BIDMC and NHC have experienced manufacturer refusals to provide information regarding contract pharmacy pricing removal when BIDMC and NHC have selected that pharmacy as the single designee on ESP and also uploads all claim data. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. BIDMC and NHC urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON COVERED ENTITIES? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding BIDMC and NHC to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns April 20, 2026 Page 9 about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. BIDMC and NHC have attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers noncompliance rate so high, BIDMC and NHC are deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these 11 See 45 C.F.R. 164.501. 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 10 manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? BIDMC and NHC hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives and publicize the reasoning in favor or against the utilization of a trusted government backed clearing-house or neutral adjudicator HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. BIDMC and NHC encourage improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. BIDMC and NHC maintain auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require BIDMC and NHC to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Additional financial resources would be needed to track, manage, and dispute rebate processing and to true up open account receivables against received rebates. Data analytics resources would be required to support regular data submissions. Additional 340B staff resources would also be needed to manage growing program complexities and attempt to both report out to leadership, and attempt to limit and/or reduce, when possible, interruption to hospital savings and operations. The additional personnel, operational framework, and overall work associated with this manufacturer rebate model will not support or enhance patient care. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. April 20, 2026 Page 12 In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. BIDMC and NHC will need to modify internal data systems and infrastructure to be able to support the requested data for submissions. BIDMC and NHC will also likely need to pay for a third-party servicer for the reconciliation of rebates and support of dispute tracking/lost account receivables. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, BIDMC and NHC purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. If BIDMC and NHC need to buy drugs up front at WAC (with no guarantee of compensation to make us whole), the upfront higher cash flow demand associated with stocking goods will cause budgeting uncertainty, since there is no guarantee that BIDMC and NHC will get the 340B rebate on the back end. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. BIDMC and NHC could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on slim margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, BIDMC and NHC will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, BIDMC and NHC would be required to generate new claims-level datasets for submission to manufacturers or April 20, 2026 Page 13 third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Beth Israel Lahey Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on BIDMC and NHC and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the patients who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Jennifer J Rossi 340B Director of Compliance and Advocacy April 20, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-1891University Health2026-04-20T04:00Z27,176 chars
See attached file(s) 2301 Holmes Street Kansas City, MO 64108 816-404-1000 universityhealthkc.org Primary Teaching Hospital for the University of Missouri-Kansas City School of Medicine April 20, 2026 Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Ref: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction Dear Administrator Engels: Thank you for the opportunity to comment on the above-captioned proposed rule. University Health (UH) is an academic health center whose mission is simple: To serve as a) Western Missouri's essential safety net for the uninsured and underinsured, especially in Greater Kansas City, and b) an Academic Medical Center, teaching and training those who will care for patients in Missouri and the nation now and into the future. UH is essential to Western Missouri's healthcare system with its two acute hospitals, comprehensive community mental health services, and the region's only hospital-based, long-term care facility. UH operates a number of primary and specialty care clinics and community/school-based outreach services, as well as the Jackson County Health Department. UH serves as Western Missouri's trauma and health care hub in case of a natural disaster, terrorist incident, or other community/region-wide catastrophe. UH is a rural referral center and one of only two designated safety-net hospitals in the state of Missouri. More than half of UHs 110,000 patients are Medicaid enrollees or uninsured. Last fiscal year, UH provided over $94 million in uncompensated care, at cost. Medicaid comprises half of UHs net revenue. There are more than 450,000 outpatient clinic visits at UHs over seventy (70) primary and specialty clinic locations in Jackson County, Missouri. UH also cares for more than 21,000 inpatients annually at University Health - Truman Medical Centers (UH-TMC) and University Health Lakewood (UH-LW). Importantly, UH delivers almost half of the babies born in Kansas City, Missouri. Administrator Engels April 20, 2026 Page 2 For Missourians with behavioral health needs, UH operates sixty-six (66) inpatient mental health beds, receiving admissions from throughout Western Missouri and providing behavioral health care services to more than 11,000 patients annually. UH Behavioral Health is Western Missouris largest provider of clinical and community-based psychiatry to vulnerable populations, specializing in severe and persistent mental illness as well as substance use/opioid disorders, operating the only standalone substance-use disorder and maternal substance-use disorder clinics in this portion of the state. In sum, UH is the principal care provider for Medicaid patients and the uninsured in the Kansas City region the vast majority of whom experience enhanced medical needs. It is vital that the implementation of this proposed rule enhances, not hinders, access to greatly needed medications and crucial health care services for UH patients. We appreciate HRSAs efforts to strengthen the 340B Drug Pricing Program, a key component of the patchwork federal support essential hospitals like UH rely on to meet their safety-net mission. But for our 340B savings, UH is able to provide to services and programs that meet our communitys unique challenges at nearly no cost to the taxpayers. Protecting the integrity and intent of the program is a top priority of UH. We urge HRSA to consider our comments below on the 340B Rebate Model Pilot Program, which will significantly impact our ability to stretch resources and continue to provide additional benefits and services to our underserved population. We acknowledge that most comments in the RFI process will be polarized. We want to take a different approach, which proposes an alternative solution instead of simply stating why the proposed 340B Rebate Model will not be viable. As a result of our approach, we started with the question below to state our proposed alternative methodology. 1. What are broader program integrity considerations and claimed benefits of a rebate approach? The spirit of the Maximum Fair Pricing and Inflation Reduction Act is to lower drug costs to CMS and to equalize and correct inflated drug purchasing costs in the United States. The most direct mechanism to achieve such goals is not the proposed rebate model, but rather requiring manufacturers to align acquisition cost for drugs in all US markets with the acquisition cost offered to similarly developed countries. That said, if direct purchase price reduction cannot be accomplished, and a rebate mechanism is preferred, the next most direct approach is a Manufacturer to Pay Plan rebate methodology. Simply stated, this approach allows appropriate rebate transactions to happen between the involved parties (manufacturers and pay plans) while removing 340B covered entities from rebate operations. In the current circumstances, CMS desires to pay a lower price for medications. Manufacturers are agreeable to lower acquisition cost but not in the form of an up-front discount mechanism. Inserting healthcare providers into the financial operations of a rebate model adds unnecessary complexity and barriers to effective patient care. Deployment of Manufacturer to Pay Plan rebate models to reduce medication acquisition costs is prevalent and standard within the commercial insurance, and is also currently utilized within large government healthcare programs. For example, the Medicaid Rebate Program is an established, successful Manufacturer to Pay-Plan rebate model. Examples of Manufacturer to Pay Plan rebate models include the proposed GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) program, the Global Benchmark for Efficient Drug Pricing Administrator Engels April 20, 2026 Page 3 (GLOBE) program, and the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) program. Fortunately, the established mechanisms for rebate request and payment transactions occurring to facilitate operations in these programs could be used to facilitate rebate operations for this purpose as well. While manufacturers have a legitimate interest in preventing duplicate discounts, a 340Bcovered entity-focused rebate model is not necessary for that goal. Specifically, transparency of 340B purchases can be easily facilitated without a 340B-covered entity focused rebate model by instead requiring two operational steps in the drug claim submission process: (a) submission of 340B claims modifiers on all drug 340B claims submitted to Medicare and Medicaid plans, and (b) submission of 340B claims to a neutral, centralized platform. These operational steps would achieve the transparency necessary for manufacturers to detect duplication, without the significant downsides to covered entities and their patients of a 340Bcovered entity-focused rebate model. The burden on covered entities and manufacturers requiring 340B modifiers on drug claims submitted to Medicare and Medicaid plans is relatively low. The overwhelming majority of state Medicaid programs already require claims modifiers during claims submission. In the case of state Medicaid, payment to the 340B entity is then adjusted to facilitate discount savings that flow from the entity to the state Medicaid. In addition, from 2018 to 2022, Medicare required all 340B facilities to include modifiers on submitted claims where a 340B purchase occurred. Medicare then adjusted the payment to the covered 340B entity to allow a percentage of the 340B discount to flow to Medicare. Under a Manufacturer to Pay Plan rebate methodology, coupled with claims submission and modifiers, manufacturers have transparency of discounts or rebates provided. Manufacturers can then adjust rebate payments appropriately to Medicare and Medicaid. Medicare and Medicaid pay 340B covered entities at a negotiated rate. 340B covered entities are allowed to keep their up-front discounts. Moreover, manufacturers currently receive submissions of Medicare and Medicaid 340B drug claims from a centralized platform. Covered Entities already utilize platforms such as 340B ESP, Beacon, and Truzo as a repository for submitted drug claims where 340B purchase occurred. In the event of a Manufacturer to Pay rebate methodology, HRSA/CMS could facilitate the process by establishing a single centralized platform with standardized data submission that all manufacturers and all 340B covered entities utilize. In the described Manufacturer to Pay Plan rebate model, all parties benefit. 340B covered entities are permitted to purchase at discounted 340B pricing to allow lower medication carrying costs and will also continue to realize a percentage of 340B savings margin within Medicare transactions that are crucial to effectively serving its most vulnerable patient population. 340B covered entities will be removed from rebate processes, preventing additional complexity and administrative burden. Medicare plans will realize reduced payment expense on 340B claims similar to those in MFP pricing standard. Manufacturers will gain 340B discount transparency and the ability to adjust rebate payments to government programs based on modifier-facilitated visibility to 340B program discounts already received by Medicare and Medicaid. Our organization is willing to pilot this rebate mechanism, including stated transparency operational steps regarding claims transmission. In responding to the HRSA-issued RFI, University Health also provides the following comments, organized by its most pressing, main concerns in the categories of: Financial Operational, Compliance, IT and Patient Access Administrator Engels April 20, 2026 Page 4 Financial As the Rebate Pilot Program expands in scope, 340B covered entities will incur significantly increasing inventory carrying costs. Calculated estimates indicate a 1.5 to 2 times increase in purchasing costs for medications within the Rebate Pilot Program. Safety-Net providers that are most dependent on 340B savings discounts, such as University Health, will not have the cash on hand to float loans waiting on manufacturer rebates that are not mandated by statute. The lack of upfront discounts will exacerbate cash flow issues associated with aged medication billing, typical in hospital billing, where payment from pay plans and patients is typically 3 to 6 months from service. If a Rebate Model moves forward, we strongly urge HRSA to confine the Rebate Model to community/retail pharmacy claims and exempt hospital outpatient medication claims from the model. Hospital medication claims are clearly tied to service areas within the 340B covered entity, registered to the HRSA database as eligible, and routinely audited by the HRSA Office of Pharmacy Affairs. Most 340B hospital pharmacies have multi-year agreements with pharmacy wholesale distributors. These agreements contain performance incentives, including financial incentives for purchasing products at 340B vs WAC. For University Health, the loss of wholesaler discounts due to the HRSA rebate model mandated WAC purchasing creates penalties estimated at $500,000-$1,000,000 annually through the remaining term of our agreement. Operational, IT, and Compliance Management The Rebate Model Pilot Program Criteria outlined that the manufacturers rebate [p]lan should include assurances that all costs for data submission through an Information Technology (IT) platform be borne by the manufacturer and no additional administrative costs of running the rebate model shall be passed onto the covered entities. This statement appears to have two mandates. Manufacturers will cover the cost of data submission to the IT platform, and covered entities should not have to incur additional administrative costs of running the rebate model. However, manufacturers have not developed an operational IT solution for the administrative burden associated with tracking payment of manufacturer rebates to 340B entities. While the administrative burden of manually tracking a small number of drugs is possible, as the rebate model scales, 340B covered entities will incur a significant and expensive tracking burden. For example, a 340B third-party administrator (TPA) has recently quoted University Health a significant fee to facilitate rebate submission and reconciliation, despite the Rebate Model Pilot Program Criterias requirement that manufacturers, not covered entities, should incur those costs. In addition, contract pharmacy operational workflows necessitate 340B pricing access up front at the time of purchase. Price files determine the out-of-pocket costs a cash-paying patient pays for a prescription. Price files are also used for protection against unfavorable reimbursement. Without this price file, a covered entity will take a loss on a claim. A public 340B price file was created in anticipation of the January 2026 start. TPAs use wholesaler price files at this moment, which are a direct feed updated daily. TPAs are struggling to utilize an outside file within current technology, as it would be a manual change, overriding controls that we already have in place to avoid other compliance issues, creating further potential for inaccuracies. The manual price file challenges would not exist within a Manufacturer to Pay Plan Rebate Model. In addition, and most notably in the contract pharmacy space, manufacturers currently enforce requirements and burdensome restrictions that do not align with covered entities operational policies and are not consistent with Administrator Engels April 20, 2026 Page 5 HRSA policy. Unfortunately, based on this behavior and general willingness to operate outside the bounds of stated HRSA 340B Program rules, it is not clear that manufacturers will follow rebate mandates within the Rebate Model Pilot program either. Patient access The majority of University Health' patients obtain prescriptions from 340B contract pharmacy locations. The third- party administrators for our 340B contract pharmacy sites are unable to provide technological support for implementing our cash plan for drugs included in the rebate program. The majority are carving MFP/IRA drugs out of 340B program transactions. This directly and negatively impacts our ability to pass 340B savings on to patients. Many UH patients fall into the category of vulnerable and underserved populations that are highly impacted by social determinants of health and have no other affordable healthcare access. They are often uninsured or underinsured. Patient healthcare on health outcomes will be negatively impacted as our most vulnerable patients lose access to medications, transitioning into a HRSA-mandated rebate process. If a Manufacturer to Pay Plan rebate model is not considered, our additional concerns posted from the previous RFI dated September 2025 remain. Our previous RFI from September 2025 is attached here as Exhibit A for your reference and consideration. In summary, we have provided an alternative Manufacturer to Pay Plan rebate methodology, which creates transparency, preserves up-front discounts, and provides government savings. We have also discussed our financial, operational, and access challenges with the Rebate Model as currently proposed. We also included our previous Rebate Model RFI submission. Finally, we also wish to reiterate that maintaining the up-front 340B discount is a lifeline for our Safety-Net entities, allowing us to stretch resources and continue to provide additional benefits and services to our underserved population. Thank you for the opportunity to comment on this proposed rule and share the unintended impacts and logistical and administrative burdens of the 340B Rebate Model Pilot Program. If you have any questions, please contact our Chief Health Policy and Government Relations Officer, Kamera Meaney, at kamera.meaney@uhkc.org. Sincerely, Charlie Shields President & Chief Executive Officer References: 1. https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf 2. https://www.hrsa.gov/opa/program-requirements/medicaid-exclusion 3. https://www.gao.gov/products/gao-25-106996 4. https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription- drug-pricing-to-american-patients/ Administrator Engels April 20, 2026 Page 6 EXHIBIT A University Healths September 2025 RFI Response Ref: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction Dear Administrator Engels: Thank you for the opportunity to comment on the above-captioned proposed rule. University Health (UH) is an academic health center whose mission is simple: To serve as a) Western Missouri's Essential safety net for the uninsured and underinsured, especially in Greater Kansas City, and b) an Academic Medical Center, teaching and training those who will care for patients in Missouri and the nation now and into the future. UH is essential to Western Missouri's healthcare system with its two acute hospitals, comprehensive community mental health services, and the region's only hospital-based, long-term care facility. UH operates a number of primary and specialty care clinics and community/school-based outreach services, as well as the Jackson County Health Department. UH serves as Western Missouri's trauma and health care hub in case of a natural disaster, terrorist incident, or other community/region-wide catastrophe. UH is a rural referral center and one of only two designated safety-net hospitals in the state of Missouri. More than half of UHs 110,000 patients are Medicaid enrollees or uninsured. Last fiscal year UH provided over $70 million in uncompensated care, at cost. Medicaid comprises half of UHs net revenue. There are more than 450,000 outpatient clinic visits at UHs over seventy (70) primary and specialty clinic locations in Jackson County, Missouri. UH also cares for more than 21,000 inpatients annually at University Health - Truman Medical Centers (UH-TMC) and University Health Lakewood (UH-LW). Importantly, UH delivers almost half of the babies born in Kansas City, Missouri. For Missourians with behavioral health needs, UH operates sixty-six (66) inpatient mental health beds, receiving admissions from throughout Western Missouri and providing behavioral health care services to more than 11,000 patients annually. UH Behavioral Health is Western Missouris largest provider of clinical and community-based psychiatry to vulnerable populations, specializing in severe and persistent mental illness as well as substance use/opioid disorders operating the only standalone substance-use disorder and maternal substance-use disorder clinics in this portion of the state In sum, UH is the principal care provider for Medicaid patients and the uninsured in the Kansas City region the vast majority of whom experience enhanced medical needs. It is vital that implementation of this proposed rule enhances, not hinders, access to greatly needed medication for UH patients. We appreciate HRSAs efforts to strengthen the 340B Drug Pricing Program, a key component of the patchwork federal support essential hospitals like University Health relies on to meet their safety-net mission. With our 340B savings, UH target resources to services and programs that meet our communitys unique challenges at nearly no cost to the taxpayers. Protecting the integrity and intent of the program is a top priority of UH. Administrator Engels April 20, 2026 Page 7 We urge HRSA to consider our comments below on the 340B Rebate Model Pilot Program, which will significantly impact our ability to stretch resources and continue to provide additional benefits and services to our underserved population. 1. Are there any additional safeguards to mitigate adverse, unintended impacts for covered entities that should be considered in the pilot design? UH believes it is important to understand the entitlement of the 340B rebate/discount when considering any rebate pilot model. By statute, covered entities are prioritized as recipients of 340B discounts.1 Medicaid is prioritized next, with covered entities required to have measures in place to prevent duplicate discounts.2 Insurance plans were never intended to receive rebates/discounts within the 340B statute and, therefore, should be considered last when manufacturers prioritize payment of rebates in any 340B rebate model. We strongly encourage HRSA to ensure that the 340B rebate model concept does not create a way for 340B savings to unintentionally flow to insurance plans instead of the covered entities. UH has a strong concern that HRSA has not accounted for insurance pay plan actions within the 340B rebate model concept. Insurance pay plans are already inserting language into payment guidelines that state: When there is an identifiable manufacturer's rebate available to the provider and not available to us, we will not pay for the portion of services that the rebate covers. We will pay the allowable fee of the covered service minus the rebate. The provider is responsible for obtaining the rebate reimbursement from the manufacturer when entitled to a rebate. Lesser of claim payment applies. Although operational guidelines may be intended to address IRA/ Maximum Fair Price (MFP) drug rebates, it will also be applied to 340B program rebate models. This payment guideline will functionally divert all the 340B savings intended for the entity to the pay plan. UH is unaware of any mechanism available to HRSA that will prevent insurance plan pay practices that divert 340B savings to covered entities. Manufacturers are unable to prevent this from occurring within rebate payment programs. Logistically, patients will be unable to receive a discount at the point of sale if a covered entity cannot load the 340B price for our contracted pharmacies, where we pass through savings to our patients, as the cash price is based on the 340B price file. We encourage HRSA to exclude dispenses where patients pay a cash price from the rebate model because there is zero risk of MFP duplication or Medicaid duplicate discount. Also, for insured patients, if there is a Wholesale Acquisition Cost (WAC) price in the 340B price file, the claim might not be captured, and the entity receives zero savings for the eligible dispense. The 340B prices need to be loaded to the wholesaler accounts for claims to be captured. Commented [KM1]: Spell out Administrator Engels April 20, 2026 Page 8 Since HRSA has permitted the one-year 340B rebate pilot to include only those IRA/MFA medications that are covered in Medicare Part D, the rebate pilot should be limited to settings where operations are specific to Medicare Part D billing. This would include entity-owned community retail pharmacy and 340B contract pharmacy arrangements. The rebate pilot should exclude settings where medications are billed under Part B that are not addressed in the IRA/MFP until 2028. Medication billed to Medicare Part B cannot meet the stated required data elements of Rx Bank Identification Number (BIN) and Rx Processor Control Number (PCN), as they are not operationally part of the Medicare Part B billing process. Our covered entities operate a medication assistance pharmacy that provides medications at no cost to patients. There is no BIN/PCN data for these claims; thus, we would be unable to provide the information outlined in the pilot that is required to process a rebate. We encourage HRSA to exclude dispenses where patients pay a cash price from the rebate model because there is zero risk of MFP duplication or Medicaid duplicate discount. The pilot does not consider scale to all medications when entities attempt to provide direct 340B-driven prescription discounts to patients. Covered entities are dependent on price files from wholesalers to accurately determine point-of-sale pricing for patients. While it is difficult to manually calculate pricing for ten (10) medications without accurate 340B pricing available in wholesaler accounts, administratively, it will be impossible when/if a 340B rebate model is scaled to all 340B medications. Entities will need to rely on additional technologies and staff to manage, diverting savings from patient resources to vendors. Using multiple vendors for rebate submission and tracking is administratively burdensome, especially on top of the current 340B ESP data submission process. HRSA should consider a single, unbiased platform such as one administered by Apexus to ease administrative burden. Additional comments: The proposed voluntary pilot 340 rebate model is limited to IRA/MFP medications billed to Medicare Part D plans. The government's intent in addressing IRA/MFP medications is to achieve a payment liability that is standard with other counties where medications are sold, utilized, and billed to pay plans. The logical outcome of the government payment reduction is that the manufacturer's purchase price must be reduced in parallel. The use of a 340B rebate model to keep purchase prices artificially inflated by requiring covered entities to pay a higher wholesale acquisition cost and request a standard rebate creates additional administrative burden and carrying cost for covered entities. Purchasing costs at 340B covered entities are currently fully transparent to manufacturers. The most direct method for purchase price transparency is for manufacturers to simply lower their price to the standard rate and make the standard lower price available in their wholesaler price file process. The manufacturer rebate model with PBMs is currently not transparent and results in artificially inflated pricing for manufacturer products. If all manufacturer-PBM rebate models were eliminated, then there would be no duplication of rebates and no need for an additional 340B rebate model for rebate transparency. Covered entities are already transparent through claims submission to 340B ESP. Adding another rebate model only increases complexity and administrative burden. Administrator Engels April 20, 2026 Page 9 Thank you for the opportunity to comment on this proposed rule and share the unintended impacts and logistical and administrative burdens of the 340B Rebate Model Pilot Program. If you have any questions, please contact Chief Health Policy and Government Relations Officer, Kamera Meaney at kamera.meaney@uhkc.org. Sincerely, Charlie Shields President & Chief Executive Officer References: 1. https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf 2. https://www.hrsa.gov/opa/program-requirements/medicaid-exclusion
HRSA-2026-0001-1892Central Peninsula Hospital2026-04-20T04:00Z17,302 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Central Peninsula Hospital (CPH), a sixty-three bed Sole Community Hospital located in Soldotna, Alaska, we respectfully submit the following comments in response to HHSs Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of a rebate mechanism to replace the upfront discount model that has supported our participation in the 340B Drug Pricing Program for over a decade. CPH serves a largely rural, geographically isolated population on the central Kenai Peninsula. Our patients face significant barriers to care limited transportation, long distances to alternative providers, and disproportionately high rates of Medicaid and Medicare enrollment. The 340B program is not an administrative convenience for CPH; it is a financial lifeline that directly funds services, staffing, and access to medications that our community would otherwise lack. Any policy change that erodes the practical value of the 340B program will have immediate, tangible, and harmful consequences for the patients we serve. I. The Rebate Model Will Impose Significant Administrative and Financial Burdens on CPH CPH does not currently have the staff, systems, or financial infrastructure to comply with a rebate-based model. While we are not in a position at this time to provide precise cost estimates for every category of impact the RFIs compressed timeline and the absence of a finalized program design make such precision impossible we can state with confidence that the burdens would be substantial across every operational dimension. Administrative and Staffing Costs Transitioning to a rebate model would require CPH to create and sustain new administrative functions that simply do not exist today. These would include submitting claims to multiple drug manufacturers, tracking and reconciling rebate payments, resolving disputes over denials or delays, and maintaining audit documentation across an expanded data universe. We anticipate this would require dedicating existing staff time time currently spent on patient care, billing, and pharmacy operations to rebate administration and may necessitate hiring additional personnel with specialized expertise that is difficult to recruit and retain in a rural Alaska market. HRSAs estimate of five additional hours per week is, in our assessment, a significant underestimate, even for a pilot program covering a limited number of drugs. Technology and Systems Requirements A rebate mechanism would require modifications or additions to our existing infrastructure to support data submission, claims tracking, and reconciliation of workflows. Providing the medical claims data required under a rebate model would require significant manual intervention a recurring burden, not a one-time startup cost. We have not yet obtained formal vendor quotes because no final program specifications exist, but we expect both one-time implementation costs and ongoing maintenance costs to be material. Data Collection and Submission HRSA has suggested that data already submitted through 340B ESP or other existing mechanisms would satisfy rebate program requirements. That is not accurate for CPH. Our current data workflows were structured for the upfront discount model, and the data fields, formats, and timing requirements of a rebate submission would require us to pull from disparate internal systems and manually compile information not currently maintained in submission-ready form. This would not be a minor operational adjustment. II. Cash Flow and Financial Risk Unlike the upfront discount model, a rebate mechanism would require CPH to pay full wholesale acquisition cost (WAC) at the time of drug purchase and await reimbursement. For a small rural hospital operating on thin margins with limited working capital, this effectively represents an interest-free loan to drug manufacturers. Even a 10-calendar-day rebate window creates a timing mismatch between drug purchase invoices and rebate receipt that will negatively affect our cash position. CPH has outstanding debt obligations with associated financial covenants, including liquidity and coverage ratio requirements. We cannot state with certainty at this time whether the cash flow impact of floating WAC-priced purchases pending rebate recovery would create covenant compliance risk, but it is a genuine concern that would require legal and financial review before any program implementation. The cost of that review itself is an additional burden the rebate model would impose. HRSAs prior assertion that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due is not a reliable assumption for CPHs purchasing and payment cycle. III. Impact on Patients and Community Services CPHs 340B savings are not retained as margin they are reinvested directly into patient services. These savings support our charity care program, fund medications for low-income and uninsured patients, subsidize behavioral health and primary care services, and help offset losses on essential but underfunded service lines. Any increase in administrative cost or reduction in the net value of the 340B discount translates directly into reduced capacity to provide these services. CPH is the only hospital serving a large geographic area of the Kenai Peninsula. There is no proximate alternative for inpatient care, emergency services, or specialty care for the communities we serve. If 340B-funded services are reduced, patients will face longer travel times, delayed care, or foregone treatment. For a rural, frontier population that already faces elevated health disparities, these are not theoretical risks they are predictable outcomes. Additionally, under a rebate model, CPH may be unable to maintain stock of high-cost drugs for which we must pay full WAC price upfront and then await reimbursement. For a small hospital with limited formulary budget flexibility, this could result in reduced access to certain medications for our patients. IV. Reliance Interests and the Absence of Justification for Change CPH has structured its pharmacy operations, vendor contracts, staffing, and financial planning around the upfront discount model since our enrollment in the 340B program. The existence of statutory authority to implement a rebate mechanism does not create an obligation or even a presumption that HRSA should exercise it. The 340B program has operated through upfront discounts since its inception, and covered entities relied on that continuity when designing their operations. HRSA has not identified a systemic failure in the upfront discount model that would justify imposing these costs on covered entities. The deduplication concern raised in connection with the Medicare Drug Price Negotiation Program (MDPNP) does not require a rebate mechanism to resolve. Viable, less burdensome alternatives exist, including a neutral third-party clearinghouse, as supported by the American Hospital Association. HRSA has not provided a reasonable explanation for why a clearinghouse approach is infeasible or inferior. That omission alone is grounds for rejecting the rebate model. V. Conclusion For all the foregoing reasons, Central Peninsula Hospital respectfully urges HRSA to reject the rebate model and instead adopt a neutral third-party clearinghouse approach to address any duplication concerns. A rebate mechanism will impose costs and operational disruptions on CPH that are wholly disproportionate to any benefit identified and will ultimately harm the rural Alaskan patients who depend on our 340B-funded services. If HRSA nonetheless proceeds with a rebate pilot, we strongly urge the agency to publish complete program specifications and allow covered entities a meaningful opportunity to comment before any implementation. Finalizing a rebate program without that additional comment period would constitute a failure to consider critical operational realities facing rural and small hospitals. We appreciate HRSAs consideration of these comments and remain available to provide additional information. Please contact us with any questions. Sincerely, Amy Kauffman, PharmD, BCPS Director of Pharmacy Central Peninsula Hospital 250 Hospital Place Soldotna, Alaska 99669 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Central Peninsula Hospital (CPH), a sixty-three bed Sole Community Hospital located in Soldotna, Alaska, we respectfully submit the following comments in response to HHSs Request for Information: 340B Rebate Model Pilot Program. We strongly oppose implementation of a rebate mechanism to replace the upfront discount model that has supported our participation in the 340B Drug Pricing Program for over a decade. CPH serves a largely rural, geographically isolated population on the central Kenai Peninsula. Our patients face significant barriers to care limited transportation, long distances to alternative providers, and disproportionately high rates of Medicaid and Medicare enrollment. The 340B program is not an administrative convenience for CPH; it is a financial lifeline that directly funds services, staffing, and access to medications that our community would otherwise lack. Any policy change that erodes the practical value of the 340B program will have immediate, tangible, and harmful consequences for the patients we serve. I. The Rebate Model Will Impose Significant Administrative and Financial Burdens on CPH CPH does not currently have the staff, systems, or financial infrastructure to comply with a rebate-based model. While we are not in a position at this time to provide precise cost estimates for every category of impact the RFIs compressed timeline and the absence of a finalized program design make such precision impossible we can state with confidence that the burdens would be substantial across every operational dimension. Administrative and Staffing Costs Transitioning to a rebate model would require CPH to create and sustain new administrative functions that simply do not exist today. These would include submitting claims to multiple drug manufacturers, tracking and reconciling rebate payments, resolving disputes over denials or delays, and maintaining audit documentation across an expanded data universe. We anticipate this would require dedicating existing staff time time currently spent on patient care, billing, and pharmacy operations to rebate administration and may necessitate hiring additional personnel with specialized expertise that is difficult to recruit and retain in a rural Alaska market. HRSAs estimate of five additional hours per week is, in our assessment, a significant underestimate, even for a pilot program covering a limited number of drugs. Technology and Systems Requirements A rebate mechanism would require modifications or additions to our existing infrastructure to support data submission, claims tracking, and reconciliation of workflows. Providing the medical claims data required under a rebate model would require significant manual intervention a recurring burden, not a one-time startup cost. We have not yet obtained formal vendor quotes because no final program specifications exist, but we expect both one-time implementation costs and ongoing maintenance costs to be material. Data Collection and Submission HRSA has suggested that data already submitted through 340B ESP or other existing mechanisms would satisfy rebate program requirements. That is not accurate for CPH. Our current data workflows were structured for the upfront discount model, and the data fields, formats, and timing requirements of a rebate submission would require us to pull from disparate internal systems and manually compile information not currently maintained in submission-ready form. This would not be a minor operational adjustment. II. Cash Flow and Financial Risk Unlike the upfront discount model, a rebate mechanism would require CPH to pay full wholesale acquisition cost (WAC) at the time of drug purchase and await reimbursement. For a small rural hospital operating on thin margins with limited working capital, this effectively represents an interest-free loan to drug manufacturers. Even a 10-calendar-day rebate window creates a timing mismatch between drug purchase invoices and rebate receipt that will negatively affect our cash position. CPH has outstanding debt obligations with associated financial covenants, including liquidity and coverage ratio requirements. We cannot state with certainty at this time whether the cash flow impact of floating WAC-priced purchases pending rebate recovery would create covenant compliance risk, but it is a genuine concern that would require legal and financial review before any program implementation. The cost of that review itself is an additional burden the rebate model would impose. HRSAs prior assertion that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due is not a reliable assumption for CPHs purchasing and payment cycle. III. Impact on Patients and Community Services CPHs 340B savings are not retained as margin they are reinvested directly into patient services. These savings support our charity care program, fund medications for low-income and uninsured patients, subsidize behavioral health and primary care services, and help offset losses on essential but underfunded service lines. Any increase in administrative cost or reduction in the net value of the 340B discount translates directly into reduced capacity to provide these services. CPH is the only hospital serving a large geographic area of the Kenai Peninsula. There is no proximate alternative for inpatient care, emergency services, or specialty care for the communities we serve. If 340B-funded services are reduced, patients will face longer travel times, delayed care, or foregone treatment. For a rural, frontier population that already faces elevated health disparities, these are not theoretical risks they are predictable outcomes. Additionally, under a rebate model, CPH may be unable to maintain stock of high-cost drugs for which we must pay full WAC price upfront and then await reimbursement. For a small hospital with limited formulary budget flexibility, this could result in reduced access to certain medications for our patients. IV. Reliance Interests and the Absence of Justification for Change CPH has structured its pharmacy operations, vendor contracts, staffing, and financial planning around the upfront discount model since our enrollment in the 340B program. The existence of statutory authority to implement a rebate mechanism does not create an obligation or even a presumption that HRSA should exercise it. The 340B program has operated through upfront discounts since its inception, and covered entities relied on that continuity when designing their operations. HRSA has not identified a systemic failure in the upfront discount model that would justify imposing these costs on covered entities. The deduplication concern raised in connection with the Medicare Drug Price Negotiation Program (MDPNP) does not require a rebate mechanism to resolve. Viable, less burdensome alternatives exist, including a neutral third-party clearinghouse, as supported by the American Hospital Association. HRSA has not provided a reasonable explanation for why a clearinghouse approach is infeasible or inferior. That omission alone is grounds for rejecting the rebate model. V. Conclusion For all the foregoing reasons, Central Peninsula Hospital respectfully urges HRSA to reject the rebate model and instead adopt a neutral third-party clearinghouse approach to address any duplication concerns. A rebate mechanism will impose costs and operational disruptions on CPH that are wholly disproportionate to any benefit identified and will ultimately harm the rural Alaskan patients who depend on our 340B-funded services. If HRSA nonetheless proceeds with a rebate pilot, we strongly urge the agency to publish complete program specifications and allow covered entities a meaningful opportunity to comment before any implementation. Finalizing a rebate program without that additional comment period would constitute a failure to consider critical operational realities facing rural and small hospitals. We appreciate HRSAs consideration of these comments and remain available to provide additional information. Please contact us with any questions. Sincerely, Amy Kauffman, PharmD, BCPS Director of Pharmacy Central Peninsula Hospital 250 Hospital Place Soldotna, Alaska 99669
HRSA-2026-0001-1893Health Services of North Texas, Inc.2026-04-20T04:00Z23,676 chars
See attached file(s) HSNT Headquarters | 4401 N I-35, Suite 312 | Denton, TX 76207 | 940-381-1501 | healthservicesntx.org April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Thank you and the Health Resources and Services Administration for the opportunity to comment on the proposed rebate model. The 340B program is vital to Community Health Centers ability to serve the most vulnerable members of our community. Therefore, Health Services of North Texas, Inc. (HSNT) strongly urges HRSA to exempt Community Health Centers from the proposed 340B Rebate Model Pilot Program to avoid financial and healthcare crises for both patients and health centers. Organizational Background As the medical home to nearly 20,000 patients, HSNT is a nonprofit Community Health Center (CHC) with nearly 40 years of experience serving our community. As a CHC, HSNT participates in the 340B Drug Pricing Program as a registered covered entity under Section 340B of the Public Health Services Act. The chief purpose of HSNTs participation in the 340B program is to provide uninsured and underinsured patients with the lowest cost prescription medications. The savings generated through this program allow HSNT to purchase essential medications at significantly reduced prices, and we pass our savings on the purchase of these medications onto our patients. We reinvest any revenue into programs and services to benefit our patients and community. The proposed rebate model threatens the core mission of CHCs and undermines the original intent of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The collective mission and mandate of HSNT and the 1,512 CHCs nationwide are to close the primary care gap and provide high-quality, cost-effective primary and preventive medical care to communities across this country. The proposed rebate model undermines this by placing an immense financial burden on health centers. ` 2 HSNT uses 340B savings to provide essential medical and support services to low-income and uninsured patients. In 2025, we provided $19,091,595 in sliding fee discounts for primary medical and behavioral healthcare services, and our ability to offer sliding fee discounts will decrease significantly under a rebate model. 340B savings supports other non-revenue-generating but essential services, such as psychiatric medication management, case management, enrolling patients in benefits, community outreach, and quality improvement initiatives to close gaps in clinical outcomes. HSNT completed 26,823 340B transactions in calendar year 2025. We operate a 340B program both as a Community Health Center and through Ryan White, which increases our administrative costs and time spent because we must operate these two 340B programs separately. In 2025, HSNTs operational expenses for the 340B program totaled approximately $4,970,409.33 in acquisition costs, including $30,000 to our contracted pharmacy to manage our non-revenue-generating Ryan White 340B program, as well as a $10 dispensing fee for prescriptions provided to Community Health Center patients. This cost does not include the salary expenses required to operate the program. Estimated employee time spent managing the 340B program is as follows: 0.3 FTE Accounting Specialist, 0.2FTE Accounting Manager, 0.2 FTE Senior Practice Administrator, 0.1 Risk and Compliance Officer, and 0.1 FTE Chief Financial Officer. Community Health Centers must be exempted from the 340B Rebate Model Pilot Program to prevent detrimental impacts, including: 1. Financial Instability for Americas Healthcare Safety Net Requiring health centers to purchase medications at full price and wait for a rebate would cause significant financial turmoil and directly impact CHCs ability to serve the 34 million patients who rely on us. Our operating margin is highly sensitive to cashflow timing related to pharmacy purchasing and reimbursement. The proposed 340B Rebate Pilot Model introduces material cashflow risk due to the shift from upfront 340B pricing to retrospective manufacturer rebates. Historically, our first quarter of each year is the most challenging. Therefore, HSNT currently has 68 days in cash on hand, and we are operating at a -9% margin, as of March 2026. This leaves little room for error in the face of unexpected costs, funding delays, and providing care to an increasing number of uninsured patients. Such a narrow margin signals that nearly all revenue is being consumed by operating expenses, leaving minimal surplus for strategic investments, innovation, or even basic reinforcements to infrastructure. HSNT is concerned that the need to purchase drugs at full Wholesale Acquisition Cost (WAC) will cause cash flow issues and lead us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. At least 25% of annual prescription drug spending will remain tied up in the rebate process. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to use our limited financial reserves and still not have enough to sustain the 340B program. Therefore, we would be forced to consider opening a line of credit to support the program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients rely on HSNT, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. ` 3 Based on our organizations data, we estimate it would cost $2,480,934.83 annually to purchase the 10 drugs under the proposed rebate model. Currently, our organization spends $881,654.06 to purchase these same drugs at the 340B ceiling price. This represents a 181% increase in upfront capital required for medication procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HSNT will need to consider reducing non-revenue-generating but essential services, such as primary healthcare to new patients using our sliding-fee scale, behavioral healthcare, psychiatric medication management, case management, and outreach and enrollment. Effectively, this rebate model would force HSNT to realign patient care resources for administrative support. Without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. For example, given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $124,046.74. This is a sum HSNT cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 2. Costly Administrative Burden and Complexity The 340B Rebate Model Pilot Program introduces significant administrative challenges, including complex rebate tracking, compliance with varying manufacturer requirements, and increased IT and workforce costs. Requiring CHCs to purchase drugs at full retail price would drastically impact their ability to purchase drugs due to the uncertainty of waiting for a manufacturer to approve a rebate, thereby constraining a health centers cash flow. Health centers will have to wait to receive their rebate payment after providing medications to their patients. While rebates are expected to arrive within 10 days, there may be delays in receiving the full rebate, such as denials, which could create financial strain on health centers. HSNT appreciates HRSAs requirement for a 10-day timeframe for rebate payments, but we are concerned about the lack of details regarding enforcement if manufacturers fail to meet this requirement. If the rebate is denied, the health center takes a net loss on the transaction. The lack of enforcement mechanisms for timely rebate payments and dispute resolution leaves CHCs vulnerable to financial losses. Although covered entities are told we will be made whole, HSNT must still pay biweekly invoices while rebates are delayed. Therefore, we will never truly be made whole if we are continuously required to front the wholesale cost of medications for the pharmaceutical companies. Claims mismatches, audits, and reconciliation timing create real financial and operational risk. It has been reported that current MFP rebates are taking 30 to 90 days, rather than the 10 days proposed. Even 10-day rebate reimbursement is not in line with wholesaler payment terms. Additionally, there will be no opportunity for rebate when inventory is damaged or expires, creating an additional financial burden and risk ` 4 for Community Health Centers. Because CHCs operate with slim margins and limited cash reserves, delays or denials in rebate payments could force reductions in services, operating hours, or staff. The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. Adding additional requirements under the proposed pilot would fundamentally weaken the ability of health centers to provide affordable medications. Health centers must manage multiple systems and reconcile payments, diverting resources from direct patient care. Not all purchased inventory aligns with claim units, meaning not all drugs will generate rebateeligible claims. HSNT already manages negative balances requiring manual intervention and expects this activity to increase under the rebate model. RenueRx, HSNTs partner pharmacy, has reported significant time spent unwinding Medicare Part D from MFP deduplication, and this workload would expand substantially under the rebate program. 3. Significant Additional Expenses Required A rebate model will require a significant increase in already-strained operational capabilities. Additional finance and compliance staff would be needed to manage rebate reconciliations, regulatory changes, and claims-level data submissions. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HSNT expects to need at least 1 additional FTE to manage the increased compliance systems required for the proposed rebate model. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Multiple CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. Additional costs will include both one-time implementation costs to adapt pharmacy software, pay for custom dashboard modifications, and design internal workflows in addition to ongoing operational fees from our TPA and software vendors to maintain complex rebate-tracking features. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. HSNT urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Given increased complexity, HSNT anticipates an increase of at least $1,619,013.40 in costs for external support vendors due to WAC pricing, as well as approximately $67,650 in personnel costs for a new administrative position that will be needed to manage the rebate reconciliation process. The full additional cost for external support vendors is unknown because so much of the rebate model is still being determined. However, these additional costs may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, and pharmacy software. HSNT currently partners with two contracted pharmacies with multiple locations to increase access to affordable medications. Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our ` 5 Third Party Administrators (TPA) will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. In fact, because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. For HSNT, which serves nearly 20,000 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $2,480,934.83 for calendar year 2026 for only our primary pharmacy partner. These additional costs will effectively negate savings from the 340B program, which we currently use to provide essential healthcare services to low-income and uninsured populations. We estimate that these costs will be $3,252,061.73 for calendar year 2027 and $3,260,493.93 for calendar year 2028. 4. Disproportionate Harm to Vulnerable Populations The rebate model makes it operationally impossible to provide uninsured and underinsured patients with discounts at the point of sale, as pharmacies will not have access to 340B prices upfront. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) price instead of the discounted 340B price. This makes the price unattainable for the patient and precludes health centers from fulfilling their legal obligation to offer the required discount at the point of care. This unpredictability in drug pricing could result in patients being overcharged or unable to afford necessary medications. By statute and regulation, CHCs are required to offer sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines, ensuring that no one is denied services due to an inability to pay. The same patients who need access to discounted medical services are also the ones who depend on health centers to provide access to affordable medications. Without upfront discounts, millions of low-income and uninsured patients risk losing access to essential medications. Since 90% of CHC patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local health center. The drugs included in the proposed rebate model are primarily used to manage chronic conditions prevalent in primary care settings. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of chronic conditions like HIV/AIDS, diabetes, heart disease, and behavioral health needs. These patients depend on the essential drugs included in the rebate pilot more than patients with any other conditions. HSNT has operated a comprehensive infectious disease program since 1997, providing essential medical care to patients living with HIV/AIDS, and 90% of our patients with HIV/AIDS have achieved viral load suppression, meaning that their viral load is undetectable and therefore, untransmittable. The accessible medications our patients receive through the 340B program play an integral role in this tremendous achievement, and the proposed rebate model would negatively impact patients access to these life-saving medications. Some of the medications most commonly dispensed to HSNT patients through the 340B program include Jardiance for diabetes and other chronic conditions, Biktarvy for HIV/AIDS, Gabapentin for seizures, Atorvastatin Calcium for high cholesterol, and Farxiga for kidney disease. Both Jardiance and Farxiga are on the list of medications to be included in the proposed rebate model pilot program. 5. Concerns with Pilot Design and Scope HSNT requests additional guidance from HRSA and CMS on the intersection of the Inflation Reduction Act (IRA) and 340B Rebate Model Pilot Program. The pilots guidance on ` 6 Medicare duplicate discounts is ambiguous, risks improper denial of rebates, and appears to contradict the clear statutory language of Section 1193(d) of the IRA. New reporting requirements under the IRA compound administrative strain. While HSNT acknowledges the pilots intent to establish a fair and transparent process, we are deeply concerned that its proposed approach for addressing IRA requirements will create significant administrative, financial, and operational burdens for health centers. The IRA is a statutory requirement, and its provisions are not suggestions. HRSA must provide clear guidance on how its pilot will work with these existing mandates. HSNT urges limiting the pilot to retail pharmacy claims only and removing unnecessary data requirements (e.g., BIN/PCN). BIN/PCN are limited to retail prescription claims with insurance coverage. They are frequently unavailable for prescriptions filled for uninsured individuals who pay with cash or use a health centers sliding fee scale program. Requiring this data would effectively exclude a core portion of the patient population that health centers serve, creating an operational barrier for a model intended to be transparent and comprehensive. Executive Order #14273 conditions future Section 330(e) funds on health centers providing access to discounted insulin to low-income patients, but there is currently no operational method to provide these discounted medications in a retrospective rebate model. The pilot design does not currently include clearly outlined criteria for rebate denials or strict requirements for the timeliness of rebates, and this lack of structure will cause significant financial turmoil for CHCs. Requiring CHCs to pay outrageous WAC prices will severely impact our financial health. HSNT understands the need to prove that discounts are not being duplicated, but there are more efficient and cost-effective methods of proving this. Such methods include sharing our internal audit information or paying a contracted discount price for prescriptions upfront, instead of paying excessive WAC prices. Conclusion CHCs already operate under robust compliance frameworks, including monthly internal audits and strict reporting requirements. Health centers pride ourselves on maintaining compliance with both the Health Center Program requirements and the 340B program, adhering to rigorous oversight and compliance processes. Not only do we participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and the use of external oversight. In our monthly audit, we validate patient eligibility and confirm that discounts are not duplicated. HSNT has demonstrated exemplary stewardship of 340B funds, reinvesting savings into patient care and community health. In addition to implementing internal best practices, such as regular audits and staff training, health centers participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, as well as detailed information about the patients served by the program. Therefore, HSNT strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. A 340B rebate program represents a departure from the original intent of the 340B program to allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of prescription medications they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to ` 7 comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HSNT believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Thank you for this opportunity to respond to the Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me directly at funding@healthntx.org. Sincerely, Doreen Rue, Chief Executive Officer Health Services of North Texas, Inc.
HRSA-2026-0001-1894Georgia Hospital Association2026-04-20T04:00Z10,044 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels: On behalf of the Georgia Hospital Association (GHA) and more than 150 hospitals and health systems across our state, we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program. The RFI asks whether HRSA should implement a rebate model under the 340B program in place of the longstanding upfront discount model. Based on extensive feedback from our member hospitals, the answer is unequivocally no. As detailed below, we strongly urge HRSA to abandon the rebate model. A rebate mechanism would impose substantial financial, operational, and administrative burdens on hospitals that far outweigh any potential benefits. More fundamentally, the proposal risks undermining the purpose of the 340B programto stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.1 On the contrary, we believe a rebate model will retract resources from safety net providers, add significant administrative burden, and jeopardize cash flow for hospitals caring for our states most vulnerable and underserved populations. In preparing these comments, GHA conducted a survey of member hospitals and health systems to inform our analysis and recommendations. Due to the critical importance of this issue to our members, we received a strong survey response but acknowledge that the complexity of the questions in the RFI, and abbreviated response deadline, leave additional concerns among our members that may not be fully reflected herein. We have encouraged members to supplement our response with comments on behalf of their own organizations. Estimates we provide are based only upon survey responses, and respondents generally represented small, rural hospitals. For larger organizations, impacts may be exponentially greater. 1 H.R. Rep. No. 102-384(II) at 12 (1992) Georgia Hospital Association Page 2 Payment Timing and Cash Flow Impacts The most significant concern raised by hospitals is the impact of a rebate model on cash flow. Under the current model, hospitals receive upfront discounts. Under a rebate model, hospitals would be required to pay full price for drugs and wait for reimbursement, effectively financing manufacturers obligations. According to GHA survey responses: Georgia hospitals estimate financial exposure ranging from $6.6 million to as much as $20 million annually. Most hospitals, particularly rural providers, report limited ability to absorb delayed payments. A 10-day rebate payment window would not sufficiently mitigate risk due to the likelihood of claims delays, disputes, and denials. Hospitals raised concerns about impacts on liquidity, financial covenants, and overall financial stability if a rebate model is implemented. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require hospitals to build entirely new administrative infrastructure to track, submit, reconcile, and appeal rebates across multiple manufacturers and drugs. GHA Members responded that the following administrative burdens would result from a rebate model: Incremental administrative costs ranging from $100,000 to more than $530,000 annually. One to 1.5 additional Full Time Equivalent (FTE) administrative positions required to administer a rebate program within each organization (this number may be considerably higher for larger organizations.) The need to contract with third-party vendors or expand existing vendor agreements to manage rebate tracking and adjudication. These burdens include one-time costs, such as system implementation, integration, training, as well as ongoing costs, such as staffing, vendor fees, and compliance activities. Importantly, these costs would directly erode the value of 340B savings that hospitals currently use to support patient care while adding significant administrative and financial strain at a time when the Department of Health and Human Services has been otherwise focused on decreasing administrative burdens on patients and providers. Staffing Impacts Under a Potential 340B Rebate Program Hospitals consistently reported that they do not currently have the staff necessary to operationalize a rebate model. In addition to the one to 1.5 additional FTE noted above, GHA members identified the negative impact a rebate model would have on clinical and pharmacy staff. Pharmacy Directors and other clinical staff involved in patient care are typically also responsible for management and operation of their 340B programs. Increased administrative requirements on these critical staff would divert more of their time away from patient care. Combined with the additional FTE needs, this burden would result in an impact on staffing needs much greater than the five hours per week estimated by HRSA. Systems and Infrastructure Requirements Hospitals have designed their IT systems and workflows around the longstanding upfront discount model. Transitioning to a rebate mechanism would require significant system redesign and integration. Based upon our member survey: Hospitals would need to modify or replace pharmacy, billing, and data reporting systems. Most anticipate reliance on manual processes and data pulls across multiple internal systems, increasing the risk of error and administrative complexity. Georgia Hospital Association Page 3 These changes would involve both significant upfront capital investment and ongoing maintenance costs, including continued system updates to conform with federal policy changes. Data Collection and Reporting Burden Based upon our survey, hospitals do not currently maintain all data required for a rebate model in a format that is readily transferable to manufacturers. Our members reported that data needed for rebate submission would often require manual extraction and reconciliation across multiple systems. Existing third-party administrators do not have direct access to all necessary claims-level data, and new reporting requirements would impose ongoing operational burden, not a one-time adjustment. Accordingly, the assertion that existing data systems would be sufficient significantly understates the burden on covered entities. Adverse Impacts on Patients and Communities The cumulative impact of these financial and administrative burdens would directly affect patient care. While this is concerning for all hospitals, Georgias rural hospitals and safety-net providers would be even more affected, as they rely heavily on 340B savings to sustain essential services. All survey respondents noted that administrative costs, delays, cash flow impacts, and other factors could jeopardize services that are essential, such as oncology, interventional cardiology, maternal health, and behavioral health services. Efforts to Avoid 340B/MDPNP Duplicate Discounts We recognize, appreciate, and support HRSAs efforts to prevent duplicate discounts between the 340B program and the Medicare Drug Price Negotiation Program (MDPNP). While the MDPNP is relatively new, the 340B programs prohibition on duplicate discounts has been law since the programs creation in 1992. HRSA has already acknowledged that drug manufacturers have options to address duplication other than a wholesale shift to a rebate model. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to: Adopt a third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP deduplication, program integrity, and other functions that the agency is seeking through a rebate model. At a minimum, provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Reliance Interests Hospitals have structured their operations, staffing, vendor relationships, and financial planning around the 340B programs longstanding upfront discount model. This reliance is reasonable and justified: The program has consistently operated using upfront discounts since its inception over thirty years ago. Hospitals have integrated 340B savings into budgeting, capital planning, and service line support. A sudden shift to a rebate model would disrupt these longstanding and legitimate reliance interests. There is no justification for such a fundamental change when concerns about the program can be addressed through less disruptive means. Georgia Hospital Association Page 4 Conclusion For all these reasons, GHA respectfully submits that the costs, risks, and burdens associated with a rebate model would far outweigh any potential benefits. We strongly urge HRSA to abandon the rebate model concept. However, should the Administration choose to move forward with this effort, we believe it is imperative that our members have the opportunity to comment on specific program design components. GHA has sought to provide the most detailed, accurate information as possible, but due to limitations described above, we acknowledge that additional concerns and potentially greater impacts are possible. If you have questions or would like additional information, please do not hesitate to contact me at bfulenwider@gha.org or (770) 249-4536. Thank you for your consideration of our concerns and thank you for your commitment to public service. Respectfully, Blake Fulenwider, SVP, Health Policy and Payer Relations
HRSA-2026-0001-1895PhRMA2026-04-20T04:00Z101,569 chars
Please see attached for PhRMA's comments. 670 Maine Avenue, SW Suite 1000, Washington, DC 20024 PHRMA.ORG April 20, 2026 VIA ELECTRONIC FILING http://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: The Pharmaceutical Research and Manufacturers of America (PhRMA) is writing in response to the Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI).1 PhRMA represents the countrys leading innovative biopharmaceutical research companies, which are focused on developing innovative medicines that transform lives and create a healthier world. PhRMA member companies have invested more than $850 billion in the search for new treatments and cures over the last decade, supporting nearly five million jobs in the United States. PhRMA supports reforms to the 340B program that would conform the program to the purpose of the 340B law: to help low-income and uninsured patients afford their medications.2 PhRMAs members have long sought, and urgently need, a rebate model in the 340B program to ensure that key program stakeholderstaxpayers, employers, federal health care programs, and innovative pharmaceutical manufacturersare no longer obligated to shoulder the ever increasing costs of rampant 340B program violations. As the 340B program has become the second largest federal prescription medicine program, surpassing Medicare Part B and Medicaid drug benefits,3 and is becoming increasingly interconnected with other health care programs, reforms are desperately needed to modernize the 340B program and place the program on a sustainable path.4 Today, the financial benefits of the 340B program flow to the bottom 1 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 See H.R. Rep. 102-384(II), at 12 (1992) (noting that the 340B program is meant to provide[] protection from drug price increases to specified Federally-funded clinics and public hospitals that provide direct clinical care to large numbers of uninsured Americans); see also H.R. Rep. 102-384(II)at 10 (stating that a hospital officials testimony describe[d] the adverse impact of drug price increases on public hospitals which serve large numbers of low-income and uninsured patients). 3 Blalock E. (May 2025). Measuring the Relative Size of the 340B Program: 2022 Update. Berkeley Research Group. Available at: https://www.thinkbrg.com/insights/publications/measuring-relative-size-of-340b-program-2022-update/. 4 In 2023, the most recent year data is available, covered entities and their for-profit partners collected nearly $65 billion in 340B profit. Blalock E., Ferritto M., Taylor, J. (January 2025). The Pharmaceutical Supply Chain, 20132023. Berkeley Research April 20, 2026 2 of 30 lines of participating hospitals,5 clinics, and for-profit companies, rather than to the patients Congress sought to help.6 The large profits that covered entities and their partners obtain from 340B drugs create a strong financial incentive for them to go beyond what the statute permits. Despite longstanding statutory prohibitions on duplicate Medicaid and 340B discounts7 and on diversion of 340B drugs to persons who are not patients of a covered entity,8 independent government watchdogs continue to find current safeguards highly inadequate.9 Covered entities are able to take advantage of lax oversight to collect discounts on prescriptions for which they may not be eligible. The Inflation Reduction Act (IRA) has introduced the risk of a new set of 340B duplicate discounts10 that adds further complexity and increases the urgency for solutions to prevent program integrity violations. After years without any mechanisms within the program to reliably avoid impermissible claims, manufacturers identified a rebate model that would serve as a rapid verification of 340B claims and would be a commonsense solution to inject transparency and accountability into the program. For several years, manufacturers have advocated for the use of a rebate model in the 340B program. Following the IRAs passage, with the impending risk of paying unauthorized dual Maximum Fair Price (MFP) and 340B discounts, manufacturers interest in a rebate model grew more pressing. PhRMA was accordingly supportive of HRSAs 2025 plan to launch the Rebate Pilot11 starting January 1, 2026and consequently alarmed and disappointed that the Pilot could not launch following last-minute litigation brought by hospitals adverse to transparency.12 The termination of the 2025 Rebate Pilot left manufacturers of IRA- selected drugs with no reliable wayusing the very limited and flawed data available to themto consistently deduplicate 340B and MFP discounts in accordance with the statute. PhRMA strongly supports HRSAs RFI as a positive step toward developing and carrying out an urgently needed 340B rebate model. The 340B statute clearly authorizes a rebate model,13 which can introduce Group. Available at: https://cdn.aglty.io/phrma/global/blog/import/pdfs/PhRMA_Supply-Chain-2013-2023_White- Paper_V484.pdf. 5 Magnolia Market Access. (2025). The 340B Prescription Drug Coverage Program: How Covered Entities Are Failing to Reinvest in Patient Care. Magnolia Market Access Insight. Available at: https://www.magnoliamarketaccess.com/insight/the- 340b-prescription-drug-coverage-program-how-covered-entities-are-failing-to-reinvest-in-patient-care/. 6 See GAO. (June 2018). Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480. Available at: https://www.gao.gov/assets/gao-18-480.pdf (Thirty of the 55 covered entities GAO reviewed reported providing low-income, uninsured patients discounts on 340B drugs at some or all of their contract pharmacies. Of the 30 covered entities that provided discounts, 23 indicated that they pass on the full 340B discount to patients, resulting in patients paying the 340B price or less for drugs. Additionally, 14 of the 30 covered entities said they determined patients eligibility for discounts based on whether their income was below a specified level, 11 reported providing discounts to all patients, and 5 determined eligibility for discounts on a case-by-case basis.); see also HELP Committee. (April 2025). Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program. Available at: https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf1.pdf (finding that Bon Secours Mercy Health and Cleveland Clinic do not directly pass 340B discounts to patients). 7 42 U.S.C. 256b(a)(5)(A)(i). 8 42 U.S.C. 256b(a)(5)(B). 9 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212. Available at: https://www.gao.gov/assets/gao-20-212.pdf; OIG. (June 2016). State Efforts to Exclude 340B Drugs from Managed Care Rebates. Available at: https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. 10 Social Security Act (SSA) 1193(d), 1847A(i)(3)(B)(ii)(I), 1860D-14B(b)(1)(B). 11 90 Fed. Reg. 36163 (Aug. 1, 2025) (corrected 90 Fed. Reg. 38165 (Aug. 7, 2025)). 12 Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600 (D. Me. Feb. 10, 2026) (Order Granting Motion to Vacate and Remand). Hospitals frequently fight efforts at transparency, see for example, American Hospital Association v. Azar, 967 F.3d 818 (D.C. Cir. 2020). 13 As stated in prior correspondence with the agency, PhRMA maintains that as a matter of law, HRSA preapproval of manufacturers 340B rebate models is not required. 42 U.S.C. 256b(a)(1) (The Secretary shall enter into an agreement with April 20, 2026 3 of 30 safeguards that prevent certain violations of the 340B law. To that end, PhRMA urges HRSA to act promptly in order for a rebate model to begin as soon as possible, and by no later than January 1, 2027, when the next set of manufacturers also must begin to deduplicate 340B and MFP discounts. Given the strong promise of a 340B rebate model, which could rapidly verify 340B claims eligibility, to address some of the current program integrity challenges, a rebate model should be an option for all 340B drug purchases immediately, without first limiting implementation to a pilot. However, if HRSA elects to begin with a pilot, it should, at minimum, include all units of all selected drugs under the IRA. Once launched, we would also urge HRSA to begin to review data from the pilot and draw conclusions regarding the pilots efficacy at the earliest possible juncture, and to consider a prompt expansion of the rebate model. Looking ahead, HRSA should work toward a broader rebate model that goes beyond IRA- selected drugs, as operational and program integrity benefits of such a rebate approach apply broadly across the 340B program. We also emphasize thatdespite unfounded comments from covered entitiesthere is no reason to expect the rebate model will affect patients in any way. The steep 340B discounts covered entities receive generally are not passed on to patients. As the U.S. Court of Appeals for the Fourth Circuit recently noted, covered entities need not pass these savings on to patients or their insurers. As a result, covered entities can pocket significant sums when they buy drugs at the discounted 340B price but get paid by patients or insurers at much higher prices.14 The industry strongly supports any efforts to require covered entities to pass through discounts on 340B medicines to uninsured and low-income patients, along with other patient-centered program reforms. A rebate model could directly benefit patients by encouraging 340B patient identification at the pharmacy or point of administration, which is necessary to operationalize passing through discounts to eligible patients. Below, we detail the basis for our strong endorsement of a rebate model as a promising commonsense approach to addressing certain program integrity challenges in the 340B program and respond to relevant questions set forth in HRSAs RFI. each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs . . .) (emphasis added). 14 Pharm. & Res. Mfrs. of Am. v. McCuskey, No. 25-1054, 2026 U.S. App. LEXIS 9272, at *29-31 (4th Cir. Mar. 31, 2026). April 20, 2026 4 of 30 Executive Summary A rebate model is a commonsense, workable solution to longstanding program integrity failures that have worsened as the 340B program has grown and become increasingly interconnected with other health care programs, including, most recently, the Inflation Reduction Act (IRA). Flaws with Current System: The 340B program has evolved into an opaque system that lacks basic safeguards to ensure statutory compliance. Federal watchdogs have repeatedly documented violations of the prohibitions on duplicate discounts and diversion, while also concluding that existing oversight mechanisms are inadequate. The IRA has introduced new and significant risks of unauthorized duplicate discounts, increasing the urgency for reform. Rebate Model Benefits: A rebate model could address core structural weaknesses in the program by serving as a rapid verification system to confirm eligibility using claims-level data. In addition to facilitating the deduplication of MFP/340B discounts, a rebate model could help address other program integrity issues, including facilitating the exclusion of 340B units from Medicare inflation rebates, providing a reliable way to deduplicate 340B and Medicaid claims, preventing multiple covered entities from requesting 340B pricing on the same unit, and providing HRSA with information to reform audits and administrative dispute resolution (ADR). Inadequate Alternatives: A rebate model is a more effective and efficient solution than proposed alternatives such as audits, claims modifiers, or clearinghouses. Those approaches are inherently retrospective and depend on compliance by covered entities that have repeatedly resisted transparency. Ensuring their compliance would increase government enforcement burdens. By contrast, a well-designed rebate model creates incentives for compliance as a prerequisite to receiving the 340B discount. No Cash Flow Impact: A rebate model with similar requirements as the 2025 Rebate Pilot would not create new cash flow challenges for covered entities. They would typically receive rebates well before wholesaler invoices are due. Independent analyses show that a rebate model performs as well as, or better than, existing inventory models with respect to cash flow, and could even improve it for some covered entities. Applicability and Data Requirements: For a rebate model to achieve its intended benefits, it must apply broadly across all covered entities and payers and utilize a targeted, standardized set of data elements that covered entities already collect and maintain. Narrow carveouts or incomplete data would undermine the models effectiveness and perpetuate current integrity risks. If HRSA elects to begin with a pilot, it should, at minimum, include all units of all IRA-selected drugs and be evaluated in a timely manner to allow for prompt expansion. PhRMA appreciates HRSAs quick efforts to implement a rebate model and stands ready to work collaboratively with the agency and other stakeholders to support timely implementation. A rebate model is a necessary and overdue step to modernize the 340B program, protect taxpayers and federal health care programs, and ensure that the programs benefits are more closely aligned with the patients Congress intended to help. April 20, 2026 5 of 30 I. A Rebate Model Would Use a Common Mechanism for Providing Price Concessions to Improve Transparency and Program Integrity while Minimizing Burden Manufacturers in many markets, including the pharmaceutical product market, routinely use rebates to provide discounts and other price concessions. Extending their use in the 340B program would be a commonsense way to bring transparency to the program, promote compliance with the 340B law and align the 340B program with many other health care programs, without imposing undue burden or costs on covered entities. Pharmacies and providers typically serve a mix of patients with different insurance coverage and varying eligibility for certain discount programs. Thus, when a hospital, clinic or pharmacy acquires a drug, it is unknown which specific patient will receive it and what the applicable drug price will be. Rebates allow for the applicable price concession to be provided after the patients insurance coverage and discount eligibility are known. By applying price concessions only after patient-specific information is provided, rebate-based programs avoid a pay-and-chase dynamic that can occur when discounts are provided before eligibility and coverage are confirmed and subsequently need to be clawed back if determined to be paid incorrectly. Rebates are already used to provide access to discounted pricing in Medicaid, the TRICARE retail pharmacy program, Medicare Part D, the IRAs Drug Price Negotiation Program, and the commercial insurance market. Rebates have also been used in the 340B program for decades: AIDS Drug Assistance Programs (ADAPs) currently employ a rebate model to purchase 340B drugs. Otherwise, the 340B program is an outlier in this regard, as the use of a replenishment model allows covered entities to receive price concessions without verification of eligibility. Under the replenishment model, after an initial purchase of a medicine at the list price, all subsequent purchases of the medicine are made with an upfront discount at the 340B price. In this way, covered entities receive 340B pricing on the replacement inventory after a full packages worth of product has been dispensed or administered to patients the covered entity deems eligible for 340B. The use of the replenishment model has contributed to an opaque system in which manufacturers have little to no visibility into dispensing, patient eligibility or whether statutory requirements for the 340B discount have been met. A rebate model is a much-needed step to align 340B with the way the rest of the health care reimbursement system functions and to help ensure claims for 340B pricing are legally authorized. The U.S. District Court for the District of Maine recently confirmed that the 340B price can be implemented through a rebate model.15 A rebate model, together with the related claims data requirements to establish qualification for rebates, will strengthen the 340B program and help prevent statutorily unauthorized duplicate discounts with other programs. II. Current Oversight is Inadequate, Based on Ineffective Guidance, and Hampered by Covered Entity Resistance (Question 7) Given the size and complexity of the 340B program, current oversight tools and efforts have proven insufficient to prevent unauthorized duplicate discounts, diversion and other violations of program 15 Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600 (D. Me. Dec. 29, 2025) (Order on Motion for Preliminary Injunction), at 21. April 20, 2026 6 of 30 requirements, leaving a landscape that invites aggressive efforts to maximize use of 340B pricing in ways that often exceed the bounds of federal law. For example, in 2019, when the 340B program was less than half its current size, it was estimated that Medicaid/340B duplicate discounts amounted to as much as $1.5 billion annually.16 The Government Accountability Office (GAO) and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) have long urged action to prevent duplicate discounts,17 recommendations that remain largely unaddressed. This evidence points to a serious, longstanding program integrity problem. The 340B program currently includes 27,138 covered entities and 36,340 child sites and reached $81.4 billion in purchases at discounted 340B pricing in 2024.18 The opportunity to collect enormous profits has supercharged covered entities interest in the program. Between 2010 and 2021, purchases in the 340B program grew by an average of 19 percent per year, according to the Congressional Budget Office (CBO), much faster than the prescription medicine market overall.19 Currently, 340B pricing is available up-front without verification of eligibility, and manufacturers have faced challenges obtaining the data on 340B claims necessary to confirm compliance.20 Manufacturers lack of access to data makes detection of violations challenging and, in many cases, impossible. When manufacturers do have the information needed to suspect or detect violations of the 340B statute, resolution can be sought only after the fact through audit and dispute resolution processes. To date, these processes have proved to be extraordinarily resource intensive and ineffective in reaching appropriate resolution and implementation of corrective actions to prevent future violations. This pay-and-chase model is wholly ineffective at preventing program violations, avoiding and correcting unauthorized duplicate discounts and reversing other 340B discounts that should not have been provided in the first place, such as multiple covered entities claiming a 340B discount on the same unit of a medicine. HRSAs 1996 manufacturer audit guidelines are outdated and impose onerous and unnecessary barriers to manufacturer audits. These barriers, which are not authorized by statute, combined with covered entities determination to challenge and delay audits at every turn, has made the audit process largely unworkable for manufacturers and resulted in the completion of few manufacturer audits.21 Today, manufacturers must audit in accordance with HRSAs 1996 audit guidelines, which include prohibiting manufacturers from using their own audit staff and requiring that manufacturers have reasonable cause for audits and obtain 16 Kalderos. (2021). Making health policy work for patients. Available at: https://f.hubspotusercontent40.net/hubfs/7227094/2021%20Annual%20Report/Annual_report_2021.pdf. 17 OIG. (June 2016). State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates. Available at: https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/; GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement. Available at: https://www.gao.gov/products/gao-20-212. 18 HRSA Office of Pharmacy Affairs Information System (OPAIS). (2025). 340B covered entity database. Available at: https://340bopais.hrsa.gov; HRSA. (December 2025). 2024 340B Covered Entity Purchases. Available at: https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases. 19 CBO. (September 2025). Growth in the 340B Drug Pricing Program. Available at: https://www.cbo.gov/system/files/2025- 09/60661-340B-program.pdf. 20 A number of states have enacted laws designed to hinder manufacturers access to claims data or prevent the use of rebates in the 340B program. See, e.g., W. Va. Code 60A-8-6a; Vt. Stat. tit. 18, 4682; N.D. Cent. Code. 43-15.3-08; 5 R.I. Gen. Laws 5-19-3.3. As the United States recently explained, laws of this type interfere[] with and obstruct[] the federal governments strong interest in the proper functioning of the [340B] program. Br. of United States, AbbVie v. Murrill, No. 24-30645 (5th Cir. Apr. 1, 2026); see also, e.g., Br. of United States, Pharm. Res. & Mfrs. of Am. v. Neronha, No. 26-1039 at 1 (1st Cir. Feb. 25, 2026); Br. of United States, AstraZeneca Pharms. v. Drummond, No. 25-6183 at 1 (10th Cir. Mar. 30, 2026); accord Pharm. & Res. Mfrs. of Am. v. McCuskey, No. 25-1054, 2026 U.S. App. LEXIS 9272, at *29-31 (4th Cir. Mar. 31, 2026). 21 61 Fed. Reg. 65407 (Dec. 12, 1996). April 20, 2026 7 of 30 HRSAs approval before they begin auditing. Additionally, only one manufacturer is permitted to audit a covered entity at a time. This leaves all other manufacturers vulnerable to the conduct of bad actors during that period without recourse, while each must wait their turn to attempt the costly and burdensome audit process to recoup discounts that were illegally collected. HRSA oversees the program through its own audits of 340B covered entities as well, yet it audits fewer than one percent of covered entities annually. Roughly 70 percent of HRSA covered entity audits return adverse findings.22 That figure, though troubling on its own terms, almost certainly underrepresents the true magnitude of statutory violations within the 340B program. In addition to only auditing a small share of covered entities each year, in 2019, HRSA stopped issuing audit findings based solely on noncompliance with guidance. This effectively means that most noncompliance is no longer identified, since 340B policies are largely implemented through guidance.23 GAO reported that during fiscal year 2019, this change in HRSAs methodology for reporting adverse audit findings resulted in a 16 percent reduction in adverse findings being reported.24 The 340B program has grown substantially since 2019, and covered entities have no doubt become more aware of this decreased enforcement of HRSA guidance. It is very likely that compliance rates have fallen even further as a result, while HRSA oversight has failed to keep pace. As discussed in more detail below, HRSA audits are inadequate and, as a fundamentally retrospective exercise, not an effective way to prevent future violations. Covered entity recalcitrance in the face of manufacturer proposed audits imposes additional burdens on both manufacturers and HRSA. Our members report that it has become increasingly common for covered entities to try to thwart a manufacturers audit by refusing to cooperate altogether, for example, by blocking access to necessary data HRSA has explicitly informed covered entities they need to provide, refusing to respond to good faith inquiries and claiming policies related to their engagement in the 340B program are proprietary. In some cases, covered entities have even sued HRSA over its authorization of a manufacturer audit.25 III. A Rebate Model is an Efficient and Effective Way to Address Numerous Program Integrity Issues and Promote Compliance (Question 7) A rebate model is a commonsense means to detect and prevent violations and promote compliance with many legal requirements pertaining to the 340B program. Only covered entities and their 340B program administrators have complete insight into which drug dispenses or administrations are 340B-eligible. Today, manufacturers receive little, if any, claims-level data to understand which claims a covered entity has determined are eligible for 340B. A rebate model would address current program oversight shortcomings while offering an effective and efficient way to provide 340B covered entities with the 340B price on eligible patient prescriptions in a timely manner. 22 ADVI. (March 2025). Analysis of HRSA 340B Covered Entity Audits. Available at: https://advi.com/insight/advi-analysis- hrsa-340b-covered-entity-audits/. 23 GAO. (December 2020) Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements. Available at: https://www.gao.gov/assets/gao-21-107.pdf. 24 Ibid. 25 See MaineGeneral Med. Ctr. v. Engels, No. 25-5297, 2025 WL 2982893 (D.C. Cir. Oct. 21, 2025). April 20, 2026 8 of 30 a. A Rebate Model Would Allow for More Efficient and Accurate 340B/MFP Deduplication The IRA changed the contours of the already complex 340B program by including new 340B non- duplication provisions related to MFPs.26 A rebate model is the best and most efficient way to ensure manufacturers receive the data they need to prevent unauthorized 340B/MFP duplicate discounts. Thus far, the Centers for Medicare & Medicaid Services (CMS) has repeatedly stated it will not take responsibility for deduplication.27 Without a reliable way to identify whether both MFP and 340B pricing are requested for the same unit of a drug, which the 2025 Rebate Pilot would have facilitated, manufacturers of IPAY 2026 and 2027 selected drugs collectively face a risk of paying $5.23 billion in duplicate discounts in 2027 alone.28 The IPAY 2026 and 2027 selected drugs are among the most highly utilized in Medicare Part D. In 2024, the most recent full year of data publicly available, there were nearly 87 million total claims for these selected drugs, and a weighted average of over 25,500 claims per day.29 The lack of transparency into the 340B status of a claim leaves manufacturers exposed to a high volume of potential duplicate 340B/MFP discounts. As discussed in more detail below, when the 2025 Rebate Pilot was halted, manufacturers were forced to quickly adapt in an effort to try to avoid unauthorized duplicate MFP/340B price concessions. These alternative processes are slower and involve more administrative steps for everyone involved, including covered entities and pharmacies, and are highly unlikely to identify all potential duplicate discounts. b. A Rebate Model Could Be Used to Facilitate Exclusion of 340B Units from Medicare Inflation Rebates A rebate model could also play a similarly important role in assisting CMS in carrying out the IRAs requirement to exclude 340B units from the calculation of manufacturers Medicare Part B and Part D inflation rebate obligations.30 Using data from a 340B rebate model, especially a model that includes all covered outpatient drugs, could be a simpler method than the current approaches utilized by CMS. Part B Inflation Rebate: To exclude 340B units from manufacturers inflation rebate obligations, CMS is relying on covered entities to use a claims modifier to identify prescriptions purchased at the 340B price. However, there does not appear to be a penalty for covered entities that fail to comply with the existing required modifier, and manufacturers are limited in their ability to verify whether modifiers are applied accurately or consistently. A 2023 report by IQVIA found that for Part B separately payable drugs, only 61 percent of treatments originating at rural referral centers 26 SSA 1193(d). 27 CMS. (September 2025). Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028. Page 255. Available at: https://edit.cms.gov/files/document/ipay-2028-final-guidance.pdf. 28 Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair- Price-in-2026-and-Outlook-to-2027.pdf 29 PhRMA analysis of the CMS Medicare Quarterly Part D Spending by Drug files. Data accessed on March 5, 2026. File available at: https://data.cms.gov/summary-statistics-on-use-and-payments/medicare-medicaid-spending-by-drug/medicare- quarterly-part-d-spending-by-drug 30 SSA 1847A(i)(3)(B)(ii)(I), 1860D-14B(b)(1)(B). April 20, 2026 9 of 30 (RRCs) or sole community hospitals (SCHs) used a relevant 340B modifier.31 While there are situations where covered entities are not eligible for 340B pricing for certain drugs,32 this finding seems outside the lower bound of expected utilization. Only the 340B covered entity and its third- party administrator know the 340B status of every claim. As such, it is impossible for other stakeholders to fully assess whether there is underutilization of the 340B claims modifier in Part B. A 340B rebate model could allow manufacturers and CMS to identify 340B units based on affirmative, unitlevel data, reducing reliance on potentially incomplete modifier reporting and improving the accuracy of inflation rebate calculations. Part D Inflation Rebate: CMS has not yet developed an accurate method to identify and exclude 340B units from Part D inflation rebate calculations. Instead, in the 2026 Medicare Physician Fee Schedule final rule, CMS adopted a claims-based estimation approach,33 which CMS itself acknowledges is inexact.34 CMS also committed to establishing a 340B data repository (akin to a claims clearinghouse), however the Agency declined to mandate covered entity reporting at this time or include any enforcement mechanism.35 In the absence of mandated reporting and enforcement, the 340B data repository will be of very limited use, because as the current experience with voluntary 340B claims modifiers shows, participation is likely to be minimal. By contrast, a 340B rebate model could provide a precise way for CMS to exclude these units, obviating the need to rely on an imprecise estimation approach as well as eliminating a need for CMS to develop and maintain a separate 340B data repository and enforce complete data submission of required data. c. A Rebate Model Could Provide a Reliable Method for Deduplicating 340B and Medicaid Claims, including in Medicaid Managed Care A rebate model that would serve as a rapid verification of 340B claims could enable manufacturers to more effectively tackle 340B/Medicaid deduplication.36 Currently, manufacturers often lack the necessary information to ascertain and correct these violations, which as previously mentioned, totaled an estimated $1.5 billion in 2019, when the program was half of its current size.37 A rebate model could equip manufacturers with the relevant information to identify these duplicate discounts in an efficient and targeted manner and resolve them consistent with applicable law. The use of a rebate model could be particularly important in addressing 340B/Medicaid managed care (MCO) duplicate discounts. HRSA and CMS have not developed a mechanism for preventing these discounts despite the 2010 change in statute requiring manufacturers to pay Medicaid rebates on drugs used by MCO beneficiaries. In fact, rather than providing manufacturers with a means for deduplication, 31 Martin R, Harish K, Duffy J. (February 2023). Can 340B Modifiers Avoid Duplicate Discounts in the IRA? IQVIA. Available at: https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2023/can-340b-modifiers-avoid-duplicate-discounts-in-the-ira.pdf. 32 For example, RRCs and SCHs (and certain other hospital covered entities) are subject to the orphan drug exclusion and in some cases the state is claiming a Medicaid rebate on the drug; therefore, in some cases the covered entity would not claim the 340B discount and accordingly would not utilize the relevant modifier on the Part B claim. 33 90 Fed. Reg. 49266, 49741-48 (Nov. 5, 2025). 34 90 Fed. Reg. at 49746 (stating that the Agency acknowledged in the CY 2026 PFS Proposed Rule that the proposed Prescriber-Pharmacy Methodology is likely to overestimate the number of 340B-eligible claims). 35 90 Fed. Reg. at 4974950. 36 42 U.S.C. 256b(a)(5)(A)(i),(a)(5)(B), 1386r-8(j)(1), 1396b(m)(2)(A)(xiii)(III). 37 Kalderos. (2021). Making health policy work for patients. Available at: https://f.hubspotusercontent40.net/hubfs/7227094/2021%20Annual%20Report/Annual_report_2021.pdf. April 20, 2026 10 of 30 HRSA issued guidance stating that the mechanism used to prevent 340B/Medicaid Fee For Service duplicate discounts (the Medicaid Exclusion File) does not apply to MCOs.38 A rebate model also could buttress other efforts to prevent 340B/Medicaid duplicate discounts. In the 2024 MDRP final rule, CMS finalized a requirement for Medicaid managed care plans to use unique Medicaid-specific BIN/PCN and group number combinations on enrollee ID cards for pharmacy benefits. Although CMS stated this may help States and their managed care plans avoid invoicing for rebates on 340B drugs by identifying which plans are covered under Medicaid, the Agency acknowledged that it was not a complete solution.39 For many years, the GAO has sounded the alarm on the lack of any mechanism to prevent or detect illegal 340B/MCO duplicate discounts. GAO noted in 2020 that this deficiency is particularly problematic as the majority of Medicaid enrollees, prescriptions and spending for drugs are in managed care.40 In the same 2020 report, GAO also stated that: HRSAs audits are not assessing compliance with the prohibition against duplicate discounts in managed care because the agency has yet to put forth guidance on this issue. . . . In the meantime, however, HRSA still must ensure that covered entities are complying with 340B Program requirements, including the prohibition on duplicate discounts in managed care. Failure to do so not only puts drug manufacturers at risk of providing duplicate discounts, but also compromises the integrity of the 340B Program.41 Last year, GAO noted that this recommendation remains unaddressed and urged further action to address 340B program integrity weaknesses.42 Additionally, GAO has raised concerns that HRSA often does not require repayment of 340B/Medicaid managed care duplicate discounts that covered entities should not have received, even when there is no dispute that repayment is owed.43 Similarly, the HHS OIG also found that methods to identify and prevent duplicate discounts are inadequate, creating a risk of duplicate discounts and forgone rebates.44 A rebate model that applies in Medicaid could improve compliance with some states Medicaid carveout rules, potentially increasing rebates to states, while also reducing administrative burden to Medicaid programs by providing greater transparency and minimizing the iterative, manual reconciliation currently required between states and manufacturers. 38 HRSA. (December 2024). Clarification on Use of the Medicaid Exclusion File. Available at: https://www.hrsa.gov/sites/default/files/hrsa/opa/clarification-medicaid-exclusion.pdf. 39 89 Fed. Reg. 79020, 79024 (Sep. 26, 2024). 40 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement. Available at: https://www.gao.gov/products/gao-20-212. 41 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement. Available at: https://www.gao.gov/assets/gao-20-212.pdf. 42 GAO. (October 2025). Agency Oversight Has Improved, but Actions Needed to Address Weaknesses. Available at: https://www.gao.gov/assets/gao-26-108784.pdf. 43 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement. Available at: https://www.gao.gov/products/gao-20-212. 44 OIG. (June 2016). State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates. Available at: https://oig.hhs.gov/documents/evaluation/2918/OEI-05-14-00430-Complete%20Report.pdf. April 20, 2026 11 of 30 d. A Rebate Model Could Prevent Diversion, including when Multiple Covered Entities Request 340B Pricing on the Same Unit A rebate model could prevent diversion, which is when a covered entity resells or otherwise transfers a drug purchased at the 340B discounted price to an individual or entity that is not the covered entitys own patient, as defined by the 340B statute and HRSA guidance.45 While diversion is expressly prohibited by statute, lax oversight, vague guidance and a lack of transparency combine to increase the risk and likelihood of these violations.46 For example, as the 340B program and the associated opportunity for profit grow, hospitals, clinics and their for-profit partners have powerful incentives to track individuals prescription activity long after a single covered entity visit or a visit at an unaffiliated provider. While 340B pricing is supposed to be available only for drugs provided to a covered entitys patients, some hospitals and clinics have taken creative approaches to exploit this rule by claiming 340B pricing on any medicines prescribed to an individual who received any type of care from the entity at any point in time, regardless of who wrote the prescription, and even years after the individual actually visited the covered entity for care. Covered entities and Apexus have presented on methods to maximize 340B volume, such as a practice called reverse referrals where a patient who already has a relationship with a specialist who prescribed them a drug(s) is referred to a CHC/RWC.47 Without a meaningful patient definition, these practices will continue to grow, contributing to growing oversight challenges for HRSA. These practices also risk increasing the share of prescriptions that could be claimed by more than one covered entity, which has been described as a form of diversion,48 and which HRSA has stated is not permitted.49 To date, however, HRSA has not developed a method to prevent this practice from occurring, an issue the 340B Prime Vendor has also warned against.50 Researchers estimate as much as 22 percent of 340B prescriptions could be claimed by more than one covered entity.51 A rebate model would not only provide manufacturers with the transparency needed to identify these double discount scenarios, but could also provide the tools needed to prevent them from occurring in the first place. 45 42 U.S.C. 256b(a)(5)(B). 46 GAO. (September 2011). Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement. Available at: https://www.gao.gov/products/gao-11-836.; Bliss E. (July 2017). Examining HRSAs Oversight of the 340B Drug Pricing Program. Testimony Before the United States House of Representatives Committee on Energy and Commerce: Subcommittee on Oversight and Investigations. Available at: https://oig.hhs.gov/documents/testimony/50/20170718_-_Bliss_Testimony.pdf 47 Pihl D, Smith D, Marr M, Fox M, Veer S, Meiman C. (2022). Compliant Strategies to Maximize Your 340B Program. 340B Grantees Conference. Available at: https://rwc340b.org/wp-content/uploads/2022/10/WP1-Strategies-to-Maximize-340B- Value.pdf 48 340B Prime Vendor Program. (September 2020). FAQ ID: 1599. 340B Patient Definition. Available at: https://www.340bpvp.com/search#tab=faq&cf-p_faq_category_hierarchy=Policy/Implementation,Patient%20Definition. 49 See 90 Fed. Reg. at 38166. 50 340B Prime Vendor Program. (November 2014). FAQ ID: 1249. 340B Purchasing/Inventory/Reimbursement. Available at: https://www.340bpvp.com/search#tab=faq&cf-p_faq_category_hierarchy=Policy/Implementation,Patient%20Definition. 51 Blalock E. (April 2026). 340B Patient Definition and Implications for Duplicate Replenishment. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for- Duplicate-Replenishment.pdf April 20, 2026 12 of 30 e. A Rebate Model Could Provide HRSA with Information to Inform Changes to Improve Audit and Administrative Dispute Resolution (ADR) Processes Appropriate audits of covered entities could help detect violations of 340Bs diversion and duplicate discount prohibitions. However, only a small share of covered entities is audited each year. A rebate model could ensure that covered entities provide basic claims data, which could be used to help HRSA more accurately identify covered entities most likely engaging in statutory violations and provide HRSA with clearer evidence of the need for an audit. This will better target audits toward covered entities most likely to be violating the statute while simultaneously reducing the audit risk for compliant covered entities. The increased transparency afforded by the rebate model could improve HRSAs oversight efficiency, reducing agency burden while more effectively identifying and rooting out fraud, waste and abuse in the program. And, because a manufacturer must audit a covered entity before it can bring a claim to ADR, improvements to the audit process arising from a rebate model could facilitate more efficient audits and resolution of ADR claims of covered entity noncompliance. IV. Absent a Rebate Model, Manufacturers are Left with Inefficient and Unreliable Options to Avoid Duplicate Discounts (Question 5) Covered entities and their 340B administrators are the only parties with full visibility into which drug claims are designated as 340Beligible. All other stakeholders, including manufacturers, the government, and payers, generally lack access to timely, claimslevel information that would allow them to independently verify how individual claims are classified. As discussed above, this information asymmetry has created persistent challenges in the Medicaid program with respect to preventing duplicate discountsand those same challenges have become even more pronounced under the IRA, where accurate, claimlevel identification is essential to administering MFP refunds and avoiding overlapping price concessions. For IRA selected drugs eligible for 340B pricing, manufacturers are not required to provide access to the MFP if the 340B price is lower than the MFP.52 If a pharmacy or dispensing entity believes the MFP refund was due, CMS guidance allows the dispenser to file a complaint or dispute.53 After the 2025 Rebate Pilot was blocked by litigation in late December, manufacturers were forced to quickly adapt in an effort to try to avoid unauthorized duplicate MFP/340B price concessions. Under existing CMS guidance, manufacturers of selected drugs may develop an approach to identifying which MFP refund claims the manufacturer reasonably believes involve a 340B drug.54 With limited options, manufacturers were, and still are, left to piece together incomplete and flawed information from a variety of sources.55 These imperfect alternatives can result in inefficiencies in covered entity receipt of MFP refund payments on claims for IRA selected drugs when a manufacturers reasonable belief of 340B eligibility is at odds with the covered entitys determination. Overall, these alternative approaches are less accurate, less efficient and involve more steps for everyone involvedincluding covered entities and 52 SSA 1193(d). 53 CMS. (September 2025). Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028. Available at: https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. 54 Ibid. 55 Such as Part D claims data received from the Medicare Transaction Facilitator Data Module and wholesaler purchase and chargeback data for 340B drugs purchased by the covered entity. April 20, 2026 13 of 30 pharmaciesand will likely lead to more disputes that ultimately require additional CMS oversight and resources. These alternative approaches are also unlikely to identify all potential duplicate discounts, leaving manufacturers at risk of paying the vast majority of the $5.23 billion in potential unauthorized MFP/340B duplicate discounts in 2027.56 If the covered entity instead confirmed 340B eligibility for each unit at the time a claim is submitted for payer reimbursement, as would be expected to occur under a 340B rebate model, the covered entity would receive MFP refund payments more quickly on non-340B claims while still receiving access to the lesser of the 340B price or MFP on 340B claims as required by law. That improved efficiency would result because manufacturers would receive timely and accurate data they need to avoid unauthorized duplicate discounts. V. A Rebate Model Would Offer a More Efficient and Effective Solution to Program Integrity Challenges Compared to Proposed Alternatives We are aware that some stakeholders have contended that existing or alternative mechanisms could obviate the need for a rebate model, including a clearinghouse, claims modifiers, or audits. This is not correct. While PhRMA would support improvements in these areas to provide additional transparency and oversight, none of these alternatives would be as efficient or effective as a rebate model in addressing program integrity challenges. As previously discussed, existing mechanisms for oversight are insufficient. HRSA and manufacturer audits inadequately ensure compliance in the 340B program due to structural flaws, overly burdensome requirements, lax oversight of many types of violations (including MCO/340B duplicate discounts) and covered entity recalcitrance. Additionally, retrospective audits cannot effectively prevent future violations of 340B program requirements. In fact, between 2015 and 2024, just 68 covered entities (0.1 percent) were reaudited by HRSA due to previous adverse findings. Of these reaudits, over two-thirds returned continued or additional evidence of noncompliance.57 Further eroding the incentives for covered entities to prospectively comply with program rules, covered entities rarely face meaningful repercussions when audits identify adverse findings. A covered entity under the 340B statute is defined as an entity within a category listed in section 340B(a)(4) that meets certain requirements under section 340B(a)(5) (i.e., abiding by the prohibitions against duplicate discounts and diversion, as well permitting audits by manufacturers and HRSA).58 Thus, under the statute, an entity that engages in these unlawful behaviors does not qualify as a covered entity at all.59 Yet, program terminations or suspensions are rare, even after adverse findings of diversion or duplicate discounts. Most commonly, covered entities have been required only to repay manufacturers for discounts 56 Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair- Price-in-2026-and-Outlook-to-2027.pdf. 57 ADVI. (March 2025). Analysis of HRSA 340B Covered Entity Audits. Available at: https://advi.com/insight/advi-analysis- hrsa-340b-covered-entity-audits/. 58 42 U.S.C. 256b(a)(4). 59 Ibid. April 20, 2026 14 of 30 they should not have received in the first place.60 HRSA has not required covered entities to pay any additional penalties or interest payments as a result of noncompliance identified through these audits. A clearinghouse model similarly relies on retrospective identification of violations after covered entities receive discounted prices, which significantly undercuts incentives for compliance with data reporting requirements. Any form of a clearinghouse would need to be accompanied by aggressive enforcement and robust data submission standards. Additionally, a clearinghouse would require complex data verification methods. For example, a clearinghouse would need to be able to compare the volume of 340B purchases to the volume of claims data provided to the clearinghouse: a complex and time-consuming process that requires matching data from multiple sources, some of which may not be directly accessible to the clearinghouse. Unlike a clearinghouse, a rebate model, by its very nature, incentivizes covered entity compliance as a precursor to receiving the 340B discount. Alternative oversight mechanisms similarly rely on data collection that occurs after covered entities have received the discounted 340B prices and would therefore require aggressive oversight and enforcement to ensure compliance from covered entities. Covered entities have consistently demonstrated that they will not voluntarily take steps to increase transparency in the 340B program. For example, 0.5 and 0.4 percent of 2026 and 2027 MFP selected drug claims, respectively, were identified as 340B by the dispensing entity.61 Given that 10 to 12 percent of Part D claims are eligible for 340B pricing, this suggests fewer than 5 percent of 340B claims are being voluntarily identified.62 Even strong enforcement and penalties have failed to ensure hospital compliance. Covered entities routinely evade federal requirements through noncompliance, obfuscation, or procedural and legal barriers. Evidence suggests some hospitals prefer paying fines over complying with price transparency laws. In 2024, HHS OIG found that 37 percent of a sample of 100 hospitals failed to meet all federal price transparency requirements.63 Compliance with publishing machine-readable pricing data reached 88 percent only after penalties were increased based on hospital size, indicating that large hospitals often opted to pay penalties rather than disclose prices.64 And, even when hospitals technically comply, transparency remains limited: a recent analysis found that only 62 percent of hospital pricing files contained usable pricing for the most commonly used inpatient drugs.65 More recently, the American Hospital Association (AHA) has stated it does not believe hospitals need to comply with the Administrations Outpatient Prospective Payment System (OPPS) Drug Acquisition Cost 60 See, e.g., HRSA. (January 2026). Program Integrity: FY25 Audit Results. Available at: https://www.hrsa.gov/opa/program- integrity/fy-25-audit-results. 61 ADVI. (April 2026). Analysis of 340B modifier usage in Medicare Part D claims for IPAY 2026 and IPAY 2027 selected drugs. Available at: https://www.advi.com/wp-content/uploads/2026/04/ADVI-White-Paper-340B-Modifier-Usage-in-Medicare- Claims_Final_2026.04.14.pdf. 62 Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair- Price-in-2026-and-Outlook-to-2027.pdf. 63 HHS OIG. (November 2024). Not All Selected Hospitals Complied With the Hospital Price Transparency Rule. Available at: https://oig.hhs.gov/documents/audit/10042/A-07-22-06108.pdf. 64 Kong E, Ji Y. (2023). Provision of Hospital Price Information After Increases in Financial Penalties for Failure to Comply With a US Federal Hospital Price Transparency Rule. JAMA Network Open. 6(6):e2320694. Available at: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2806485. 65 3 AXIS Advisors. (March 2026). Analysis of Prescription Drug Prices in Hospitals. Available at: https://www.3axisadvisors.com/projects/2026/3/5/analysis-of-prescription-drug-prices-in-hospitals. April 20, 2026 15 of 30 Survey (ODACS).66 Opposition to this survey comes after the AHA sued the Trump Administration to oppose Part B payment cuts for 340B hospitals, arguing the cuts were illegal because CMS failed to complete an acquisition cost survey. The AHA took this case to the Supreme Court, which agreed that the payment cuts were not authorized absent a survey of hospitals acquisition costs, which a number of hospital trade associations then stated they did not need to participate in.67 Based on previous behavior by covered entities, it is reasonable to assume that even with strict enforcement mechanisms, compliance and participation would remain low for any efforts to increase 340B transparency. In contrast, a well-designed rebate model inherently incentivizes transparency as a precursor for receiving the 340B discount, significantly reducing system complexity, violations, and federal burden. a. For a Rebate Model to Be Effective, it Must Apply to All Covered Entities and All Payers The success of a rebate pilot that would serve as a rapid verification of 340B claims is highly dependent on manufacturers access to comprehensive and complete claims level data on every 340B prescription for a specific medicine. Consistent with the 2025 Rebate Pilot, any future rebate model must include claims data for 340B prescriptions dispensed or administered to patients across all payers and covered entity types. This scope is critical to ensure all potential MFP/340B duplicate discounts are accounted for, address situations where multiple covered entities claim a 340B rebate on the same unit of a drug, and prevent unintended consequences. Any carveouts would require the cumbersome and complex alternatives to deduplicate MFP/340B to stay in place, producing higher costs and burden for covered entities, and undermining the purpose of the pilot. For example, limiting the pilot to only Medicare claims would greatly increase the complexity of a pilot while also limiting its effectiveness. Without a complete view of all claims, manufacturers will have no way to know if they have captured all Medicare claims accurately for MFP/340B deduplication. Additionally, utilizing a mix of approaches to providing access to 340B pricing (as would be the result from receiving rebate claims for a subset of a specific medicines utilization while the remainder continued receiving an upfront discount) would necessarily result in additional complications, delays, diversion, and continued duplicate discounts. Without a complete picture of 340B claims from all covered entity types, manufacturers will not have the information they need to prevent multiple covered entities from collecting rebates on the same unit of a medicine. Carve-outs of specific covered entity types would significantly undermine the benefits of a rebate model because, with the vague patient definition in the 340B program, one analysis shows 340B hospitals could be claiming up to 36 percent of prescriptions prescribed by Community Health Centers (CHCs).68 Moreover, program violations are not concentrated exclusively among large hospitals, but in fact commonly occur among smaller covered entities as well. According to an analysis of HRSA audit 66 AHA, et al. Letter to Katie Wilder. Available at: https://www.aha.org/lettercomment/2026-01-12-aha-other-groups-its-wrong- tell-hospitals-they-are-complete-drug-acquisition-cost-survey. 67 Am. Hosp. Assn v. Becerra, 596 U.S. 724, 738 (2022). 68 Blalock E. (April 2026). 340B Patient Definition and Implications for Duplicate Replenishment. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for- Duplicate-Replenishment.pdf. April 20, 2026 16 of 30 findings, grantees were nearly twice as likely as hospitals to have duplicate discount findings between 2020 and 2024.69 Exempting a subset of covered entities, like grantees, would create a loophole that would prevent the system from realizing the full benefit of a rebate model. Additionally, such a carve-out would be challenging to implement because there is no clear line between grantees and hospitals: In 2022, approximately 21 percent of 340B hospitals had at least one grantee clinic registration, and 7 percent of grantees were located within a 340B hospital.70 Exempting grantees could even have the unintended effect of driving more consolidation in the health care system if hospitals look to acquire or affiliate with grantees in an effort to take advantage of a carve-out to avoid the transparency afforded by the rebate model. b. A Targeted, Standardized Set of Data Elements will Further Simplify the Rebate Pilot Similarly important to the scope of claims collected is the list of data elements reported by the covered entities. PhRMA has included a proposed list of data elements supported by our membership in Appendix A, which we believe are the minimum elements necessary to enable manufacturers to accurately determine a claims 340B rebate eligibility. As discussed below, covered entities already maintain most of these data elements in a readily shareable format. The data elements suggested in Appendix A are comprised of (1) pharmacy claims data elements and (2) medical (physician-administered) claims data elements, both of which align with the list included by HRSA in the 2025 Rebate Pilot, as well as (3) covered entity purchase data. While the purchase data were not listed by HRSA in the 2025 Rebate Pilot, we strongly believe these data are critical to help a rebate model run efficiently and effectively, ultimately benefiting both manufacturers and other stakeholders. These data will allow manufacturers to verify that the covered entity seeking the rebate actually purchased the supply of the drug dispensed or administeredthe most basic statutory requirement for a covered entity to obtain 340B pricing. Requiring covered entities to report purchase data is no different from the common practice of requiring consumers to show proof of purchase, such as a receipt, to earn cash back. Purchase data is also needed to validate the covered entitys purchase price.71 If HRSA does not allow for collection of that data in connection with the Rebate Pilot, we ask that HRSA clearly state that covered entities subject to a rebate model are required to make all purchases of selected drugs dispensed, administered, or furnished (or to be dispensed, administered, or furnished) to patients under the 340B program through their wholesaler 340B account that manufacturers participating in the pilot load with WAC pricing. Covered entities should be required to certify to HRSA that they are complying with this requirement. Without this express requirement, manufacturers will not be able to adequately monitor and validate, using the limited data they receive from their wholesalers, that purchases are being made on the appropriate wholesaler account. PhRMA supports consistency in data collection across all 340B claims under a rebate model, which would streamline data collection processes for covered entities. If HRSA requires covered entities to 69 HRSA. (January 2026). Program Integrity. Available at: https://www.hrsa.gov/opa/program-integrity. 70 Blalock E. (May 2023). Federal Grantee Clinics and the 340B Drug Discount Program. Berkeley Research Group. Available at: https://www.thinkbrg.com/insights/publications/federal-grantee-clinics-340b-drug-discount-program/. 71 In some cases, covered entities purchase at a manufacturer-offered price other than WAC, and even if the covered entity purchases at the then-current WAC, WAC changes periodically. April 20, 2026 17 of 30 submit the data elements suggested in Appendix A, it would not be necessary, for purposes of a rebate pilot, for HRSA to allow manufacturers to require covered entities to submit any additional data elements. VI. An Efficiently Structured Rebate Model Can Achieve Program Integrity Benefits Without Imposing Undue Burden or Costs on Covered Entities (Question 1) HRSA requests information about covered entities current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B program operations and compliance. We urge HRSA to scrutinize the reported figures carefully, only to consider costs that are actually related to 340B Program operations and compliance, and to disregard costs that covered entities elect to incur to maximize the discounts they receive under the 340B program or for other purposes. For example, according to the Minnesota Health Departments 340B Transparency Report, the majority of covered entities costs related to 340B derive from fees paid to for-profit contract pharmacies, which expand the locations from which 340B prescriptions can be dispensed, and third-party administrators (TPAs), who often mine data to maximize the number of scripts on which covered entities can claim 340B pricing.72 Neither of these activities is required to participate in the 340B program, however, covered entities engage in these activities because it is in their best interest, financially, to do so. To the extent that some of these administrative costs relate to ensuring compliance with program requirements and maintaining auditable records, such costs are entirely appropriate given that covered entity participation in the 340B program is optional and covered entities and their for-profit partners earn nearly $65 billion in profit from the program.73 Indeed, all payers implement requirements that create compliance costs for providers. For example, hospitals costs to participate in Medicaid and Medicare likely dwarf what they spend on 340B compliance.74 More importantly, HRSA also requests information about incremental administrative and operational costs to covered entities under a potential rebate model. These costs, if reliably established, are the costs that the Agency should assess when considering a potential rebate model. Further the Agency must balance such costs against the program integrity benefits that, as discussed below, would flow from an efficiently structured rebate model (such as that HRSA planned for the 2025 Rebate Pilot), without imposing undue burden or costs on covered entities. In comments on the 2025 Rebate Pilot and the 2025 Rebate Pilot Information Collection Request (ICR), various covered entities and organizations representing them claimed that a rebate model would have imposed substantial costs and administrative burden on covered entities for two reasons: (1) because obtaining and submitting the claims data required under the 2025 Rebate Pilot would be a burdensome new task, and (2) because the 2025 Rebate Pilot would uniquely impose costs of floating drug purchases on covered entities. For the reasons explained below, both of these claims are incorrect and 72 Minnesota Department of Health (2025). 340B Covered Entity Report: Report to the Minnesota Legislature, 2025. Available at: https://www.health.state.mn.us/data/340b/docs/2025report.pdf. 73 Blalock E., Ferritto M., Taylor, J. (January 2025). The Pharmaceutical Supply Chain, 20132023. Berkeley Research Group. Available at: https://cdn.aglty.io/phrma/global/blog/import/pdfs/PhRMA_Supply-Chain-2013-2023_White-Paper_V484.pdf. 74AHA. (September 2024). Skyrocketing Hospital Administrative Costs, Burdensome Commercial Insurer Policies are Impacting Patient Care. Available at: https://www.aha.org/guidesreports/2024-09-10-skyrocketing-hospital-administrative-costs- burdensome-commercial-insurer-policies-are-impacting?utm. April 20, 2026 18 of 30 unsupported by reliable evidence; such evidence shows instead that a 340B rebate model should be no more costly or burdensome to covered entities than the replenishment models they typically use today. A rebate model would not increase recurring 340B administrative costs. Rather, as detailed below and as HRSA should take into account, a rebate model would readily leverage existing data collection and retention requirements, which would minimize incremental costs and burdens associated with covered entity participation in the pilot. We therefore urge HRSA to look with skepticism on unsupported or conclusory claims by covered entities that the requirements of a rebate model would cause them to incur substantial new costs or burdens. For example, in its comments on the 2025 Rebate Pilot ICR, the AHA argued without reliable justification that hospitals would require up to two full-time equivalents to manage the entire rebate model process, resulting in approximately 4,160 hours per hospital annually, or 11.2 million burden hours across all 340B hospitals.75 This assertion disregards several important and relevant facts. First and most importantly, the data elements and reporting requirements included in the 2025 Rebate Pilot align with information already captured and retained by covered entities for 340B compliance and other purposes, and therefore would not lead to significantly new administrative burdens. Specifically, most of these data elements76 are (1) already captured in electronic health records,77 (2) necessary to comply with 340B audit requirements,78 (3) submitted to manufacturers in connection with certain contract pharmacy policies,79 or (4) necessary for billing both private and government insurance payers80 and inventory management. As HRSA recognizes in the recent rebate model ICR, the burden associated with a rebate model may not be significant if covered entities are required to submit data that is comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program.81 We support this approach of minimizing burden on covered entities by relying largely on data elements they already collect and maintain, and as noted above, we believe the data elements we recommend in Appendix A to this letter are consistent with this approach and objective. Given that covered entities already routinely compile and transmit claims data to third parties that is similar to what we propose HRSA adopt for a future rebate model, transmitting the data to a 340B rebate 75 Golder C. (September 2025). AHA Comments to HRSA Re: The 340B Rebate Model Pilot Program. AHA. Available at: https://www.aha.org/system/files/media/file/2025/09/aha-letter-to-hrsa-on-the-340b-rebate-model-pilot-program-9-30-2025.pdf. 76 The data elements we propose here are the same elements that HRSA included in the Rebate Pilot, plus a limited number of data elements to verify that the covered entity actually purchased the drug and the price at which it made the purchase. 77 See e.g., the United States Core Data for Interoperability (USCDI) data elements maintained by the Office of the National Coordinator for Health Information Technology (available here). The USCDI defines the standardized classes and individual data elements that certified EHR systems must be able to capture and exchange. 78 See for example Section 3(C), Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities. Available at: https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered-entities.pdf 79 See 340B ESP, Data Submissions FAQ 9. Available at: https://help.340besp.com/en/articles/8808065-frequently-asked- questions-faqs#h_a1adc6cecc. 80 For example, covered entities are required to provide many of the data fields HRSA contemplated in the 2025 Rebate Pilot as part of the 837P form required for providers to bill Medicare for separately payable drugs covered under Part B and as part of the D.0 electronic telecommunication standard utilized for pharmacy billing. 81 91 Fed. Reg. at 9633. April 20, 2026 19 of 30 vendor should not require significant additional labor. In the lead up to the 2025 Rebate Pilot, some TPAs confirmed they were able to provide the support necessary to implement the rebate model without changes to covered entity software.82 In light of the existing data submission and transmission requirements that already apply to covered entities, which presumably are performed by current covered entity employees, it is extraordinarily unlikely that each covered entity will need two additional full-time employees working year-round to compile and submit fundamentally the same data. A rebate model would not be a novel data collection burden for covered entities already in compliance with applicable requirements. Given the crowded field of for-profit companies offering services in the 340B space,83 we are confident that market competition will drive down additional TPA costs associated with the Rebate Model. In the recent rebate model ICR, HRSA estimated that each covered entity would prepare and submit 52 annual responses (weekly submissions) at an average of 5 hours per response.84 This estimate also is inflated. An assumption that five hours of labor per weekly submission is needed even after initial setup and testing has been completed ignores that: Data elements likely to be necessary and appropriate are elements that covered entities already collect and maintain for other purposes; Modern pharmacy systems can automate data extraction and formatting; Electronic submissions to standardized platforms require minimal manual intervention once initially configured; Batch processing capabilities allow submission of multiple claims simultaneously; and Most submission time consists of automated system-to-system data transfer. Accordingly, HRSA should update, correct, and significantly reduce its burden estimate for covered entities. In doing so, HRSA should evaluate the actual burden for recurring weekly submissionsafter initial system configuration. Its assessment should be that these recurring submissions will require just minutes, not hours, of human labor per week. Even 2 hours per weekHRSAs estimate in the 2025 Rebate Pilot ICRis unrealistic under the circumstances proposed. While 2 hours per week may be a reasonable estimate for initial setup and testing, it is not a credible estimate for routine ongoing submissions. 82 See, e.g., The Craneware Group press release, 95% of 340B processes remain unchanged...TCG confirmed that its customers can participate in the 340B Rebate Pilot without procuring additional software or new vendor contracts. The rebate workflow is demo-ready today. The Craneware Group. (October 2025). The Craneware Group Hosts 340B Rebate Forum, Confirms No New Vendor Needed for Pilot. Available at: https://www.kxan.com/business/press-releases/cision/20251031FL12663/the-craneware- group-hosts-340b-rebate-forum-confirms-no-new-vendor-needed-for-pilot/. 83 Nikpay S, Halvorson L. (2023). Growing administrative complexity in the 340B program and the rise of third-party administrators. Health affairs scholar, 1(5), qxad052. Available at: https://doi.org/10.1093/haschl/qxad052. 84 91 Fed. Reg. at 9633. April 20, 2026 20 of 30 a. A Rebate Model Would Not Introduce New Cash Flow Challenges for Covered Entities (Question 2) We anticipate that HRSA will receive numerous responses to this RFI from covered entities containing exaggerated claims that the float associated with a rebate model (meaning, the time lag between the purchase of a medicine and the receipt of the rebate) will have devastating financial consequences. We urge the agency to weigh these assertions in light of the demonstrable facts: 1) covered entities already routinely carry a float for their initial purchase under the replenishment model and must wait until a full package of medicines is used before replenishing at the discounted price; 2) under a rebate model similar to the 2025 Rebate Pilot, the vast majority of covered entities would receive rebate payments before invoices are due to their wholesaler, eliminating any cash flow concerns; and 3) the float under a rebate model, to the extent there is one, would likely be of the covered entitys own creation and temporary in nature. Under the 2025 Rebate Pilot, manufacturers would have been required to pay the rebate within 10 calendar days of the covered entity submitting an eligible rebate claim. If a new rebate model has a 10- calendar-day deadline for the manufacturer to pay the rebate on eligible claims, covered entities would likely be able to obtain 340B pricing more quickly than under the current replenishment model they claim to favor, since the rebate payment could occur on a unit-by-unit basis rather than requiring the covered entity to wait until it has dispensed an entire package before replenishing the package with a 340B discounted order.85 In this regard, a rebate model could smooth or otherwise improve cash flow for smaller covered entities or for less commonly dispensed drugs. For those less commonly used drugs, the receipt of 340B pricing is often delayed under the replenishment model because it can take weeks or months before a full package is dispensed and thus for a 340B discounted package to be ordered. In other words, a rebate model could provide a 340B covered entity with the 340B price faster than the current replenishment model. In terms of any perceived float due to wholesalers invoicing at WAC rather than the 340B discounted price, a recent IQVIA report found that in most cases, covered entities would receive the rebate well before they would be required to pay their wholesaler invoice, eliminating any potential cash flow issues.86 IQVIA modeled covered entities cash flow for eight different 340B payment models, including a rebate model paid within 10 days (in line with the 2025 Rebate Pilot). Assuming a wholesaler credit term for hospitals and clinics of 30 daysthe standard payment term found in its interviewsIQVIA found that with respect to cash flow, the rebate model performed better than or equal to other common inventory models used today.87 Therefore, a 10-calendar-day rebate payment deadline would be sufficient to ensure 85 HRSA. 340B Rebate Model Pilot Program. Available at: http://web.archive.org/web/20260102161509/https://www.hrsa.gov/opa/340b-model-pilot-program (noting that All approved manufacturer plans will issue rebates based at the unit level). 86 Sun C, et al. (December 2025). How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, IQVIA. Available at: https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper- 2025.pdf. 87 Ibid. April 20, 2026 21 of 30 that covered entities do not face negative cash flow issues under a rebate model and could potentially even improve cash flow for covered entities compared to several of the 340B payment models used today. The IQVIA study assumed a hypothetical covered entity that would purchase all inventory at WAC on day one of the pilot and face wholesaler invoices on day 30, and still found little to no effect on covered entities cash flow. Notably, this is the most dramatic version of how a covered entity would experience a rebate model. In reality, covered entities already have inventory in stock that would be dispensed after a rebate model has taken effect. Existing inventory would be replaced over time with new inventory purchased at WAC as drugs are dispensed and rebates are paid shortly thereafterresulting in a gradual transition to WAC purchasing, not the abrupt shock at the outset of the rebate model that covered entities claim. This gradual replacement of existing inventory further reduces any cash flow concerns. Even in the hypothetical case where a covered entity would need to pay wholesalers prior to the receipt of 340B rebates, any cashflow issues that may result would be temporary. CMS has noted that pharmacy cashflow concerns created by retrospective MFP refund payments under the IRA, which involve a somewhat longer timeframe for manufacturer payment, is likely most acute at the start of each initial price applicability year.88 CMS did not anticipate cashflow challenges persisting once MFP refund payments were routinely flowing,89 and since MFPs have gone into effect, there has not been evidence of meaningful disruptions. While pharmacy cashflow concerns over MFP refund payments are in some ways different from covered entity concerns over timing of 340B rebates, the principle remains the sameonce rebate payments are continually flowing, any cashflow concerns would resolve. Finally, we note that the increasingly common credit-based replenishment includes delays in obtaining the 340B price and in that sense is like a rebate model. However, unlike the 2025 Rebate Pilot, these credit-based replenishment models do not necessarily have a 10-day requirement for payment. Additionally, these models rely on a complex set of opaque financial transactions that are independent of the shipment of 340B units.90 The growing popularity of these credit-based models in the face of this payment delay illustrates the willingness of covered entities to agree to changes to obtaining the 340B price when those changes serve the interests of covered entities and their contract pharmacies, and result in decreased program transparency. Accordingly, HRSA should look skeptically upon assertions that any delay in the realization of the 340B price due to a rebate model is inherently problematic from a cash-flow perspective or otherwise. b. The Covered Entity Survey Stating Harm from the Rebate Model is Flawed and Should be Disregarded A survey by 340B Health claiming covered entities would be unable to operate under a rebate model is methodologically flawed, systematically biased, and based on an outdated and exaggerated set of assumptions. For these reasons, the findings of the survey should be viewed with skepticism and 88 CMS. (October 2024). Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027. Available at: https://www.cms.gov/files/document/medicare-drug-price-negotiation-final-guidance-ipay-2027- and-manufacturer-effectuation-mfp-2026-2027.pdf. 89 Ibid. 90 AmeriSourceBergen, Inventory Synchronization Program Guide. Available at: https://web.archive.org/web/20240426164057/https://www.amerisourcebergen.com/-/media/assets/amerisourcebergen/pdf/hgs- 230633-isp-guide-12dec23-v2.pdf. April 20, 2026 22 of 30 ultimately dismissed given empirical evidence elsewhere that a rebate model would not create cash flow concerns for covered entities. 340B Health surveyed a self-selected set of just 347 respondentsa small fraction of the 50,000 covered entities in the United Statesa non-random sample carrying a meaningful risk of response bias. Additionally, the survey questions on the financial impact were based on the incorrect assumption that a rebate model would require covered entities to wait 30 days or more to receive rebates. By contrast, pharmaceutical companies committed to paying rebates within 10 days under the 2025 Rebate Pilot. The survey also fails to account for payment terms to wholesalers, which would further insulate covered entities from experiencing any cash flow impact. In most cases, covered entities will receive 340B rebates before they are required to pay wholesalers for the medicines. Finally, the calculations on estimated float included in the survey report rely on meaningless assumptions based on overall annual 340B purchases and not an actual rebate model where covered entities would receive the rebate within 10 days, often well before their wholesaler invoice is due. VII. Rebate Denials (Question 3) HRSA should evaluate rebate denials as part of any rebate model it implements and, based on its evaluation, should consider whether a standardized template for adjudications of improper denials is needed in the future. We also urge HRSA to commit to working collaboratively with key stakeholders to develop standard processes and timelines, if needed. We note also that existing 340B processes may be used to address disputed denials of rebates. VIII. Required Reporting (Question 6) We recommend that HRSA require manufacturers to report the data elements listed in Appendix B, which largely align with the elements HRSA listed in the 2025 Rebate Pilot ICR. These data elements would provide HRSA with empirical information on the use of rebates to effectuate the 340B ceiling price, which the agency could use both to assess manufacturer and covered entity compliance with a rebate model and to evaluate its effectiveness. We recommend that manufacturers report these elements to HRSA on a monthly basis to allow for rapid assessment of the pilot. HRSA should publicly share the following data in aggregate form across all drugs (or as an average, as indicated below for certain of the data elements): 1) total purchases by covered entity type (in dollars at the 340B ceiling price and at WAC); 2) average days from clean claim submission to rebate payment; 3) number of rebates paid within 10 days of clean claims submission (out of specified number of total rebate claims, so that an average can be calculated); 4) number of rebates denied, with reasons (out of specified number of total rebate claims, so that an average can be calculated); and 5) number of claims where an MFP refund was denied due to a 340B rebate being paid. We believe that transparency of non-proprietary data will assist all 340B stakeholders in understanding how well a rebate model is performing and help in identifying ways to improve and expand the model over time. Publicly reported data could also be useful to policymakers, taxpayers, employers and other stakeholders to make informed decisions about program-related activities. April 20, 2026 23 of 30 340B ceiling prices and data that could be used to calculate the 340B ceiling price are confidential and proprietary and therefore should not be publicly released.91 We recommend that HRSA confirm that not only will this information be secure, but that it will also be kept confidential, by HRSA as well as any agency or entity working with HRSA or on its behalf. Furthermore, only HRSA and other government partners should evaluate the model. We urge HRSA to work with the HHS OIG and with groups across CMS to establish transparent and measurable criteria that will be used when evaluating a rebate model and in considering any potential changes to such a model. OIG will provide valuable insight based on their past recommendations for program improvements.92 Within CMS, the Center for Program Integrity should be involved in any assessment of a rebate model given their expertise in preventing and reducing waste, fraud, and abuse. CMS Medicare Drug Rebate and Negotiations Group and the Center for Medicaid and CHIP Services should also be part of any evaluation to determine how well a rebate model helped ensure compliance with the IRA and Medicaid nonduplication requirements, respectively. To the extent that HRSA uses contractors for non-evaluative functions related to the rebate pilot, HRSA should be careful to select contractors without actual or perceived conflicts of interest. Under the 2025 Rebate Pilot, HRSA would have required manufacturers to submit data to the 340B Prime Vendor, Apexus. This was problematic given this organizations well-known conflicts of interest. As highlighted in a New York Times investigation published in early 2025, the current Prime Vendor compensation model creates an incentive for Apexus to supercharge the 340B program.93 Apexus also is currently the subject of an investigation by the Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee scrutinizing (among other things) how Apexus has expanded its business beyond its core role as the 340B prime vendor... to increase its profits.94 In addition, we are concerned that Apexus ownership is another source of potential conflicts because Apexus is a subsidiary of Vizient, a private company owned by hospitals.95 For these reasons, we have serious concerns that the Prime Vendor cannot commit to impartial involvement in a rebate model pilot and, therefore, should not play any role in evaluating a rebate model nor should it have access to any confidential or sensitive data related to the pilot. *** 91 This information may be protected from disclosure under Exemption 4 of the Freedom of Information Act (FOIA) and, the Trade Secrets Act (18 U.S.C. 1905), and the PPA (which states that [i]nformation disclosed by the Manufacturer in connection with the [PPA], except as otherwise required by law, will not be disclosed by the Secretary or his designee in a form which reveals the Manufacturer, except as necessary to carry out section 340B or permit review by the Comptroller General). Pharmaceutical Pricing Agreement. Available at https://www.hrsa.gov/sites/default/files/hrsa/opa/manufacturer-ppa.pdf. 92 OIG. (June 2016). State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates. Available at: https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/. 93 Gabler E. (January 2025). How a Company Makes Millions Off a Hospital Program Meant to Help the Poor. NY Times. Available at: https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. 94 HELP Committee. (February 2026). Chair Cassidy Continues Investigation into 340B Drug Program, Seeks Information from 340B Prime Vendor. Available at: https://www.help.senate.gov/rep/newsroom/press/chair-cassidy-continues-investigation-into- 340b-drug-program-seeks-information-from-340b-prime-vendor-1. See also Gabler E. (February 2025). Senate Questions Health Care Firm for Profiting Off Program Meant for Poor. NY Times. Available at: https://www.nytimes.com/2026/02/12/us/health- care-apexus-340b.html. 95 Gabler E. (January 2025). How a Company Makes Millions Off a Hospital Program Meant to Help the Poor. NY Times. Available at: https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. April 20, 2026 24 of 30 PhRMA appreciates the opportunity to comment on this important initiative and looks forward to continued dialogue with the Agency to ensure the prompt launch, success, and then expeditious expansion of a rebate model. As HRSA evaluates next steps following what we anticipate will be a successful pilot, it should work toward a broader rebate model that goes beyond IRA selected drugs as operational and program integrity benefits of such a rebate approach apply broadly across the 340B Program. Please do not hesitate to reach out to Sylvia Yu (syu@phrma.org) and Karyn Schwartz (kschwartz@phrma.org) with any additional questions. /s/ /s/ _______________________ ______________________ Elizabeth Carpenter James C. Stansel Executive Vice President, Policy & Research Executive Vice President and General Counsel cc: Chantelle Britton, Director, HRSA Office of Pharmacy Affairs April 20, 2026 25 of 30 Appendix A: Data elements needed to accurately implement a rebate model Pharmacy Claims Data Medical Claims Data Date of service Date prescribed Rx number Fill number 11 digit National Drug Code (NDC) Quantity Dispensed Prescriber ID Service provider ID 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) 11 digit NDC Quantity Date of service 340B ID Service provider ID Claim number (analogous to Rx number) Health plan ID & health plan name (analogous to Rx BIN & Rx PCN) Rendering physician ID (analogous to Prescriber ID) Claim line number Unit of measure Purchase data elements (for pharmacy and medical claims) Wholesaler Name Wholesaler Account Number Invoice Date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID April 20, 2026 26 of 30 Appendix B: HRSA should require manufacturers to report the following data elements Claim submission date 340B ID NDC-11 and quantity purchased Unit WAC, 340B Ceiling, and MFP Rebate amount and date paid Rejection reason (if applicable) Aggregated sales by covered entity type Average days from claim submission to rebate payment Number of rebates paid within 10 days of clean claims submission Number of rebates denied, with reasons Number of claims where an MFP refund was denied due to a 340B discount being paid April 20, 2026 27 of 30 Appendix C: Selected Government Reports Addressing the 340B Program CBO, Growth in the 340B Drug Pricing Program, CBO-60661, (September 2025), http://www.cbo.gov/publication/60661. o Because 340B facilities generate net revenue when they dispense drugs purchased through the program, those facilities have an incentive to prescribe more drugs and to shift prescriptions to drugs for which the difference between the insurance rate and the 340B discounted price is large. Increasing prescription volume results in higher spending on drugs by federal insurers and in larger federal subsidies for insurance premiums. GAO, 340B Drug Discount Program: Information about Hospitals that Received an Eligibility Exception as a Result of COVID-19, GAO-23-106095 (May 11, 2023), https://www.gao.gov/products/gao-23-106095. o According to HRSA, as of July 2022, the agency had audited 25 of the 53 excepted hospitals. Our review of HRSA documentation found that the agency issued a total of 19 findings related to noncompliance for 14 of these hospitals as a result of these audits. Five of the hospitals had more than one finding of noncompliance. The most common finding among the excepted hospitals that were audited related to the potential for duplicate discounts.... GAO, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, GAO-21-107 (Dec. 14, 2020), https://www.gao.gov/products/gao-21- 107. o HRSA reported that the agency issued a total of 1,536 findings to address covered entity noncompliance found in the 1,242 finalized audits conducted from fiscal years 2012 through 2019 as of September 2020. These findings, which address violations of statutory requirements and a failure to follow guidance that HRSA developed to clarify these requirements, were in the areas of eligibility (561), diversion (546), and duplicate discounts (429).... o HRSA officials also said that there were instances among fiscal year 2019 audits in which the agency also did not issue duplicate discount findings for a failure to follow a states Medicaid requirements, including billing the state Medicaid office for a 340B drug without using a claim identifier to indicate a drug purchased at the 340B discounted price. GAO, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212 (Jan. 21, 2020), https://www.gao.gov/products/gao-20-212. o GAO found that limitations in the Department of Health and Human Services[] (HHS) oversight of the 340B and Medicaid Drug Rebate Programs may increase the risk that duplicate discounts occur. o HHSs Centers for Medicare & Medicaid Services (CMS) conducts limited oversight of state Medicaid programs efforts to prevent duplicate discounts. CMS does not track or review states policies or procedures for preventing duplicate discounts, and GAO found that the procedures April 20, 2026 28 of 30 states used to exclude 340B drugs are not always documented or effective at identifying these drugs. As a result, CMS does not have the information needed to effectively ensure that states exclude 340B drugs from Medicaid rebate requests. CMS also does not have a reasonable assurance that states are seeking rebates for all eligible drugs, potentially increasing costs to state and federal governments due to forgone rebates. o HHSs Health Resources and Services Administrations (HRSA) audits of covered entities do not include reviews of states policies and procedures for the use and identification of 340B drugs. As a result, the audits are unable to determine whether covered entities are following state requirements, and taking the necessary steps to comply with the prohibition on subjecting manufacturers to duplicate discounts. o GAO reported in 2018 that HRSA had not issued guidance on, and did not audit for, duplicate discounts in Medicaid managed care and recommended the agency do so as the majority of Medicaid enrollees, prescriptions, and spending for drugs are in managed care.... In this report, GAO found that, unlike Medicaid fee-for-service, when duplicate discounts in Medicaid managed care claims are identified, HRSA does not require covered entities to address them or work with manufacturers to repay them. As a result, manufacturers may be subject to duplicate discounts for drugs provided under managed care. o Given these limitations in federal oversight, HHS does not have reasonable assurance that states and covered entities are complying with the prohibition on duplicate discounts. GAO, 340B Drug Discount Program: Increased Oversight Needed to Ensure Nongovernmental Hospitals Meet Eligibility Requirements, GAO-20-108 (Dec. 11, 2019), https://www.gao.gov/products/gao-20-108. o After analyzing contract documentation for more than 250 private, nonprofit hospitals participating in the 340B program, GAO concluded that [g]iven the weaknesses in HRSAs oversight, some hospitals that do not appear to meet the statutory requirements for program eligibility are participating in the 340B Program and receiving discounted prices for drugs for which they may not be eligible. For example, GAO observed that 13 of the hospitals reviewed that currently participate in the 340B program had contracts with no requirement to provide care to low-income, vulnerable patients. o HRSAs current processes and procedures do not provide reasonable assurance that nongovernmental hospitals seeking to participate and benefit from the 340B Program meet the programs eligibility requirements...continued growth in the number of participating hospitals and 340B purchased drugs highlights the need for HRSA to improve its oversight processes. This is critical to safeguarding the integrity of the 340B Program. GAO, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480 (Jun. 21, 2018), https://www.gao.gov/products/gao-18-480. o GAO found weaknesses in HRSAs oversight that impede its ability to ensure compliance with 340B Program requirements at contract pharmacies, such as: HRSA audits do not fully assess April 20, 2026 29 of 30 compliance with the 340B Program prohibition on duplicate discounts for drugs prescribed to Medicaid beneficiaries. Specifically, manufacturers cannot be required to provide both the 340B discount and a rebate through the Medicaid Drug Rebate Program. However, HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care. As a result, it cannot ensure compliance with this requirement for the majority of Medicaid prescriptions, which occur under managed care. OIG, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OEI-05-14- 00430 (Jun. 6, 2016), https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from- medicaid-managed-care-rebates/. o We found that, to identify 340B drug claims and correctly collect rebates for MCO drugs, most States use methods that identify providers using 340B purchased drugs. However, we found that these provider-level methods may not accurately identify all individual 340B drug claims, creating a risk of duplicate discounts and forgone rebates. By contrast, we found that methods that operate at the claim level can improve accuracy in identifying 340B drug claims, and thereby, help States correctly collect rebates. o We recommend that the Centers for Medicare & Medicaid Services (CMS) require States to use claim level method to identify 340B claims. CMS did not concur with our recommendation, noting that while it agrees with the importance of claim level methods, the statute does not contemplate such a requirement for States. We continue to recommend that CMS require the use of claim level methods to improve accuracy in identifying 340B claims and thereby reduce the risk of duplicate discounts and forgone rebates. o We also recommend that the Health Resources and Services Administration (HRSA) clarify its guidance on preventing duplicate discounts for MCO drugs to align with this new requirement. HRSA concurred with our recommendation. OIG, Contract Pharmacy Arrangements in the 340B Program, OEI-05-13-00431 (Feb. 4, 2014), https://oig.hhs.gov/reports/all/2014/contract-pharmacy-arrangements-in-the-340b-program/. o We found that contract pharmacy arrangements create complications in preventing diversion, and that covered entities are addressing these complications in different ways. The covered entities that we reviewed in our study reported different methods of identifying 340B eligible prescriptions to prevent diversion in their contract pharmacy arrangements. In some cases, these different methods lead to differing determinations of 340B eligibility from one covered entity to another for similar types of prescriptions. As a result, there is inconsistency within the 340B Program as to which prescriptions filled at contract pharmacies are treated as 340B eligible. o We also found that contract pharmacy arrangements create complications in preventing duplicate discounts. Most covered entities in our study prevent duplicate discounts by not dispensing 340B purchased drugs to Medicaid beneficiaries through their contract pharmacies. However, some covered entities that do dispense 340B purchased drugs to Medicaid beneficiaries through their contract pharmacies did not report a method to avoid duplicate discounts. April 20, 2026 30 of 30 o Additionally, we found that some covered entities in our study do not offer the discounted 340B price to uninsured patients in their contract pharmacy arrangements. o Finally, we found that most covered entities in our study do not conduct all of the oversight activities recommended by HRSA. Although almost all covered entities reported monitoring their contract pharmacy arrangements, the extent of such monitoring varies. Few covered entities reported retaining independent auditors for their contract pharmacy arrangements as recommended in HRSA guidance. GAO, Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement, GAO-11-836 (Sept. 23, 2011), https://www.gao.gov/products/gao- 11-836. o Increased use of the 340B program by contract pharmacies and hospitals may result in a greater risk of drug diversion, further heightening concerns about HRSAs reliance on participants self- policing to oversee the program. Operating the 340B program in contract pharmacies creates more opportunities for drug diversion compared to in-house pharmacies. o We found that HRSA has not always provided covered entities and drug manufacturers with guidance that includes the necessary specificity on how to comply with program requirements. There also is evidence to suggest that participants may be interpreting guidance in ways that are inconsistent with the agencys intent. Finally, participants have little incentive to comply with program requirements, because few have faced sanctions for non-compliance.
HRSA-2026-0001-1896Fordland Clinic2026-04-20T04:00Z9,995 chars
See attached file(s) Fordland Clinic I a COMMUNITY HEALTH CENTER April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Fordland Clinic urges HRSA to abandon the 340B Rebate Model Pilot Program. The rest of this letter explains why. Fordland Clinic is a federally qualified health center in Fordland, Missouri, and has participated in the 340B program since April 2016. Our patient population is smaller than those of many of the organizations submitting comments on this RFI, and the operational margin we have to work with is narrow. Both of those facts make the rebate model more damaging in our setting than it would be in a larger one, not less, and I want to be direct about that from the start. The Numbers Our 340B acquisition cost for drugs on the 2026 and 2027 MFP lists is approximately $450,000 per year. At WAC, the same drug volume requires approximately $1.8 million. The difference about $1.35 million per year in working capital is money Fordland Clinic would need to float to manufacturers every year the mechanism remained in place. For an organization of our size, those numbers do not sit comfortably against our operating margin. The MFP drug list is 33% of our total 340B prograrn a share that grows quickly as more drugs are added. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary, the annual working capital requirement rises to approximately $2.3 million. With the reserve levels we maintain, that is an amount that would, on its own, destabilize our operations. No rural bank in Webster County will extend a line of credit at that scale against the promise of manufacturer reimbursement on disputed rebate claims. Separately, Fordland Clinic has already experienced a reduction in the value of our 340B program due to the Medicare Drug Price Negotiation Program. In the first quarter of 2026, our 340B net savings declined by more than 10% because of this program. That compression is already built into our 2026 operating projections. A rebate-model cash demand would land on top of an already- reduced savings stream. Wholesaler Credit and Reconciliation Are Not Ready Two upstream problems made the planned 2026 pilot impracticable for us, and neither has been resolved. 1059 Barton Drive .Fordland, MO 65652.417-767-2273 . Fax 417-767-4054 11863 State Highway 13 .Kimberling City, MO 65686 .417-739-1995 . Fax 417-739-1893 1300 E. Bradford Parkway .5pringfield, MO 65804 . 417-767-2273 . Fax 417-767-4054 Fordland Clinic COMMUNITY HEALTH CENTER The first is wholesaler credit capacity. Our wholesaler credit limits were set against 340B acquisition pricing. In the weeks before the planned pilot start, our wholesalers were clear that they were not positioned to extend the credit required to operate our 340B accounts at WAC. When credit is exceeded, orders are held. When orders are held, replenishment stops, and the 340B program stops with it. The second is reconciliation infrastructure. My team reviewed the third-party vendor interface manufacturers chose for rebate adjudication. The data and reporting available through that interface were not adequate to support a reliable reconciliation. The vendor cited HIPAA compliance as the reason for not retaining prescription numbers on claims but a vendor entrusted with this function should meet the security requirements necessary to retain and report Rx numbers to its system users. Without claim-level detail, a denial cannot be matched to a specific dispense. On our 2026-2027 MFP volume, a 5% denial rate which we consider a reasonable planning assumption would put approximately $90,000 of revenue at risk each year the mechanism remained in place. For an organization our size, that is not a rounding error. What Goes Wrong Through a Contract Pharmacy Network Fordland Clinic dispenses exclusively through a contract pharmacy network. The 340B price reaches our patients today because we acquire the drug at 340B pricing at the time of purchase. Under a rebate model, the entity acquires at WAC and the 340B benefit is reconciled afterward. In the current set up, our acquisition cost is extended to our patients at the pharmacy point of sale, when that acquisition cost shifts to WAC, that means our patients are exposed to the WAC price at the pharmacy counter. HRSA's proposed ad hoc ceiling price file was an attempt to address that problem, and I appreciate the effort, but our third-party administrators were not in a position to operationalize the file in the working days available before the planned 2026 start. The engineering and QA work required to consume a new price file, reconcile it against rebate submissions, and apply it accurately at adjudication is not a minor project. When our patients are exposed to WAC pricing at the pharmacy counter, they are more than likely not going to pay the price. They are going to leave the pharmacy empty-handed and unequipped to manage the disease(s) they came to us for help with in the first place. When this happens, these people will experience complications, hospitalizations, and early deaths that were avoidable. This is what HRSA is being asked to consider. This same problem conflicts with Executive Order 14273, which instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it. A rebate model, by its design, cannot deliver the 3408 price at the point of sale. A single policy cannot satisfy the Executive Order and the rebate model as currently proposed at the same time. What This Means for Our Patients Fordland Clinic served 8,321 patients in the most recent reporting period. Seventy-three percent live at or below 200% of the federal poverty level. Forty-two percent are at or below 100%. Eighteen percent are uninsured. Thirty-six percent are enrolled in Medicaid. Eighteen percent are enrolled in Medicare. A third of our adult patients are managing hypertension and about 14% are managing diabetes. These patients fill prescriptions on the MFP list every week at our contract pharmacy partners insulins, SGLT2 inhibitors, and the other chronic-disease medications that make primary care in a rural setting function. When the discount does not reach them at the counter, it does not matter that the rebate will eventually make the entity whole. The prescription is either picked up the day of their visit, or it is not. The Staffing Burden Is Not Trivial Even at Our Scale 1059 Barton Drive . Fordland, MO 65652.417-767-2273 . Fax 417-767-4054 11863 State Highway 13 .Kimberling City, MO 65686 .417-739-1995. Fax 417-739-1893 1300 E. Bradford Parkway .Springfield, MO 65804 . 417-767-2273.Fax 417-767-4054 Fordland Clinic 1111 COMMUNITY HEALTH CENTER HRSA's Information Collection Request estimates the administrative burden of the rebate model at roughly five hours per week per covered entity. That is not what our preparation work indicated. Based on our combined 2026-2027 MFP claims volume, we estirnate approximately 0.25 additional FTE a quarter-time position dedicated to rebate submission, denial management, reconciliation, and cash forecasting. For a larger organization, a quarter of a position might be absorbed across existing functions. For an organization our size, it is a line item we would have to carve out of the same pool of dollars that funds clinical care. A Better Alternative Is Available HRSA is working through a real problem. The Medicare Drug Price Negotiation Program requires a mechanism to prevent duplication between MFP and 340B discounts, and I do not dispute that the problem needs an answer. The question is whether the rebate model is the least burdensome way to achieve that deduplication, and I respectfully submit that it is not. A neutral, federally administered claims clearinghouse would accomplish the same objective without placing manufacturers in the role of determining 340B eligibility, without requiring covered entities to float substantial working capital, and without introducing the patient access and compliance problems described above. CMS is already building the framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. A second alternative is already in front of HRSA. Manufacturers currently require 340B claims data from covered entities as a condition of 340B access. That data can support MFP/340B deduplication without standing up a parallel rebate adjudication infrastructure. One operational adjustment is warranted: for new pharmacy accounts or accounts without claims history at the time a data requirernent is imposed, manufacturers should accept an attestation of compliance rather than withholding 340B access pending data that does not yet exist. This solution still places too much power in the hands of manufacturers, but it could be utilized as a stopgap while a federally administered claims clearinghouse is built. Request Fordland Clinic respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program, to exempt federally qualified health centers from any rebate mechanism that may follow, and to direct the deduplication question to the neutral clearinghouse framework already under development at CMS or to the existing manufacturer claims data mechanism with the attestation accommodation described above. We appreciate HRSA's consideration. Sincerely, David Steinmann Chief Executive Officer Fordland Clinic Fordland, Missouri 340B ID: CHC28965-00 1059 Barton Drive . Fordland, MO 65652.417-767-2273 . Fax 417-767-4054 11863 State Highway 13 . Kimberling City, MO 65686 .417-739-1995 . Fax 417-739-1893 1300 E. Bradford Parkway .Springfield, MO 65804 . 417-767-2273 . Fax 417-767-4054
HRSA-2026-0001-1897Theresa Murrell · United States2026-04-20T04:00Z313 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Rebate delays may force sudden medication substitutions or coverage gaps. Patients managing chronic illness rely on medication stability; disruptions undermine trust and clinical outcomes. Practice Manager
HRSA-2026-0001-1898Seattle Indian Health Board2026-04-20T04:00Z18,958 chars
See attached file for comment from the Seattle Indian Health Board. Seattle Indian Health Board For the Love of Native People 611 12th Ave S Seattle, WA 98144 206-324-9360 sihb.org April 20th, 2026 Thomas J. Engels Health Resources and Services Administration US Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: HRSA Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Thank you for the opportunity to provide a comment on the proposed 340B Rebate Model Pilot Program. The Seattle Indian Health Board opposes the implementation of the proposed 340B Rebate Model Pilot Program for Federally Qualified Health Centers (FQHCs) and the Indian health care system because the program undermines the Congressional intent of the 340B program to stretch scarce federal resources as far as possible and support underserved patient populations. The Indian health care system will be negatively impacted by changes to the 340B program. The Indian Health Service is chronically underfunded, and upfront discounts are essential to our ability to maximize limited federal appropriations into our care system. Protecting these resources is a matter of the federal governments trust and treaty responsibility to provide quality health care to American Indian and Alaska Native people. A 340B Rebate Model that delays access to resources and increases financial risk is fundamentally at odds with that responsibility. The 340B Rebate Model Pilot Program will harm pharmacies and patients by: (1) imposing a significant financial and administrative burden on pharmacies, (2) directly reducing access to drugs for the underserved patient populations we serve, (3) impeding the reinvestment of 340B savings into additional comprehensive culturally attuned and community-based services for patients. Additionally, the Rebate Model will fail to efficiently address HRSAs stated concerns about duplication, diversion, and compliance. Data requested in HRSAs 45 RFI questions are integrated throughout this letter. BACKGROUND: THE SEATTLE INDIAN HEALTH BOARD AND THE INDIAN HEALTH CARE SYSTEM The Seattle Indian Health Board (SIHB) is an Urban Indian Organization and a Federally Qualified Health Center (FQHC) participating in the 340B program. During the most recent fiscal year, SIHB processed a total of 57,335 scripts through our 340B program. Seattle Indian Health Board sihb.org Page 2 of 7 SIHB is part of the Indian health care system, known as the I/T/U system of care. This system includes the Indian Health Service direct, Tribal 638 Programs, and the Urban Indian Organizations (UIOs), and it derives its authority from the Indian Health Care Improvement Act (1976). Within the I/T/U system, SIHB is one of 41 UIOs, which provide services to the increasing number of American Indian and Alaska Native patients residing in urban areas. Today, over 71% of AI/AN people nationwide live in urban areas.1 We are committed to delivering comprehensive, culturally attuned health care services and programs to those we serve, who we call our relatives. The negative impacts of the Rebate Model will be disastrous not only for our organization, but for many others within the I/T/U system. SIHB is one of 45 Urban Indian Organizations that operate 340B pharmacies. Additionally, there are 211 tribal 340B pharmacies operated by tribes and tribal organizations across the country. I. FINANCIAL AND ADMINISTRATIVE BURDENS OF THE REBATE MODEL The proposed Rebate Model Pilot Program directly contradicts 340Bs intent to stretch federal resources, instead imposing a significant financial strain and administrative burden on 340B pharmacies. These negative impacts will be particularly impactful for smaller covered entities like SIHB, which lack substantial cash reserves and administrative resources of large systems. We calculate that the Rebate Model will increase SIHB's costs by upwards of $200,000, with the potential for further increases as additional drugs become subject to new rates. Delayed Reimbursement Diminishes Cash Reserves However, the most significant financial burdens of the Rebate Model result from the impact of eliminating upfront discounts. This delay and the uncertainty around rebate approval will substantially diminish the health care systems cash reserves. At SIHB, under the fully implemented Rebate Model, we would need to keep $6 million of cash on hand for the purpose of purchasing drugs. Six million is three times our current pharmacy budget of $2 million, representing an untenable increase, especially as we are already facing shortfalls due to federal funding changes over the past year. Under the currently withdrawn version of the Rebate Pilot Program, manufacturers would not reimburse covered entities until the drug is dispensed, rather than at the time of purchase. This results in larger impacts on cash flow than the 10-day reimbursement period implies. 1 U.S. Census Bureau. Census 2010 American Indian and Alaska Native Summary File; Table: PCT2; Urban and rural; Universe: Total Population; Population group name: American Indian and Alaska Native alone or in combination with one or more races. 2010 Census American Indian and Alaska Native Summary File. 2010. Seattle Indian Health Board sihb.org Page 3 of 7 Currently, we are charged a 2% service fee on invoices not paid within a 10-day period. SIHB currently meets this 10-day payment requirement under our contracts with drug wholesalers. Under a Rebate Model, we would be challenged to meet the 10-day period to avoid the service fee, and any future fees would be much higher, because invoices would be based on full wholesale acquisition cost, rather than 340B discounted price. This increases our overall costs. New Reporting Imposes Administrative Burdens These financial burdens would be compounded by additional, costly administrative burdens imposed by the Rebate Model. Currently, our pharmacy management system maintains our data, and we do not rely on external vendors. Administrative burdens imposed by the Rebate Model would be entirely new as we currently do not have a need for these processes. To create and implement a new system requires the following startup tasks: Hiring additional staff (pharmacists, pharmacy staff, or billing and finance staff); typically, this is $75/hour for pharmacist time Building out workflows for reporting, validating, and tracking savings Additionally, it would require the following additional, ongoing tasks: Monitoring the new system Running, validating, and submitting manual data reports Maintaining purchase price, submission date Processing claims and verifying reimbursement/rebate data Supporting audits Communicating with manufacturers to resolve discrepancies The burden of these tasks is significant. In its Information Collection Request [2026-03833 (91 FR 9632)], HRSA calculates that the additional burden of submitting claims to manufacturers will be just 5 additional hours per week. Our calculations show the absolute minimum additional burden of the Rebate Model would be 8 hours per week, based on our knowledge of our pharmacy operations and current systems. Potential Reconciliation Issues Further Increase Burden Both HRSAs estimate and our own likely underestimate the burden, as they do not account for potentially drawn-out reconciliation processes, if manufacturers do not comply. If a manufacturer denies or partially reimburses a rebate claim, the process becomes significantly more resource-intensive. It would require follow-up with manufacturers to determine the basis for denial, especially if the denial is vague or ambiguous. We must then gather and submit additional documentation, address the cited issues all while having to navigate multiple rounds of back-and-forth communication. Staff will need to repeat this with multiple manufacturers, further increasing the burden. Seattle Indian Health Board sihb.org Page 4 of 7 Furthermore, manufacturers are already showing hostility toward 340B entities and resentment toward the 340B program. The 340B community has already experienced third party billing administrators who have actively targeted 340B savings, and the proposed system under this pilot does little to prevent manufacturers from implementing strategies that delay or deny issuing the rebates due under statute. As 1% of claims represent millions of dollars, there would be ample motivation for drug manufacturers and their paid vendors to continue to engage in such predatory practices. II. DIRECT IMPACTS ON PATIENTS: REDUCED PHARMACY SERVICES Collectively, these financial and administrative burdens will have severe, negative impacts on covered entities' ability to meet our relatives needs for medications and pharmacy services. Reduced Drug Availability and Access The delays in payment resulting from the Rebate Model will result in a higher cost of maintaining inventory, which will likely force pharmacies like ours to reduce inventory. In turn, this will reduce the volume and quality of care that we can provide to our relatives. The Rebate Model will inevitably lead to some relatives losing access to medication or experiencing harmful delays. If the medication is not in stock, the relative may not be able to return for days or weeks, going without needed therapy during that time. Additionally, the 340B Rebate Model would significantly limit our ability to provide sliding- fee discounts to low-income and uninsured relatives at the point of sale. These discounts are crucial given that 65% of the relatives we serve live at or below the Federal Poverty Line. Statute and regulation require FQHCs to offer income-based discounts for all services within our HRSA-approved scope.2 However, medications at wholesale acquisition cost would prevent us from accurately calculating discounts in real time. We would be forced to estimate prices while taking on financial risk if rebates are delayed or denied. This exposes both our clinic and our patients to a financial loss and undermines our ability to meet our statutory obligations. In turn, this could result in additional costs for the health system overall. Patients who cannot access important medications are more likely to utilize costly emergency services or find themselves in a revolving door of care. Reduced Time for Patient Services Direct patient care will also be diminished by the administrative burdens described above. These tasks divert crucial hours of staff time that could otherwise be spent on direct patient care. Even according to HRSAs underestimated burden calculation, the Rebate Model would impose 3.79 million additional annualized burden hours across covered 2 Section 330(k)(3)(G) of the Public Health Service (PHS) Act. https://bphc.hrsa.gov/compliance/site-visits/site-visit-protocol/sliding- fee-discount-program# Seattle Indian Health Board sihb.org Page 5 of 7 entities. Each hour of that time could otherwise be spent directly servicing patients, including providing medication counseling or other wrap-around services. III. INDIRECT IMPACT ON PATIENTS: REDUCED COMMUNITY REINVESTMENT The burdens of the Rebate Model would hamper our ability to fund and deliver innovative, community-based programs by creating uncertainty and limiting cash reserves. Ultimately, this would undermine the intent of both the 340B program and FQHCs themselves. Under the current 340B Cost Savings program, Federal Statue already requires Community Health Centers like SIHB to reinvest any savings incurred through 340B into community services (29 CFR 1470.25). In other words, the resources we gain from savings help us to meet the 340B programs intent to provide more comprehensive services to our relatives. Such services ultimately align with the principles of the Make America Healthy Again agenda, as they focus on integrative medicine and healthy lifestyle choices. For example, we reinvest our 340B savings into several important and uncompensated programs that serve our relatives. These provide culturally-attuned services to AI/AN communities, including: Traditional Indian Medicine (TIM): Traditional health services lie at the center of all of our services. TIM services offer personalized and culturally attuned healthcare support to optimize holistic wellness for individuals. Access to such services within primary and preventative care can support and improve health outcomes for patients,3,4 in turn producing cost savings to the health care system. Workforce Development for the Indian health care system SIHBs workforce development programs seek to address a priority we share with HRSA regarding the systemic provider shortages in our healthcare system. The Indian health care system is especially hard hit,5,6 and we train providers to appropriately serve our communities. Our 32 workforce development programs span the full continuum of health care career pathways, from shadowing experiences for high school students, to social work practica, to a fully- accredited medical residency program in family medicine. Elders and Youth Programming: The Elders Program is a drop-in center for our American Indian/Alaska Native Elders (55+) designed for building community in a safe and welcoming space. Our youth 3 Nortje G, Oladeji B, Gureje O, Seedat S. Effectiveness of traditional healers in treating mental disorders: a systematic review. Lancet Psychiatry. 2016 Feb;3(2):154-70. doi: 10.1016/S2215-0366(15)00515-5. PMID: 26851329. 4 Bailowitz, M., Holland, N., ORear, I., Payan, A., & Zeymo, A. (2023). Thematic Analysis of Traditional Healing Programs at Urban Indian Organizations and MetaAnalysis of Health Outcomes (Recent Trends in Third-Party Billing at Urban Indian Organizations). National Council of Urban Indian Health. https://ncuih.org/research/third-party-billing/#tab-id-11 5 Indian Health Service. Indian Health Service Launches Largest Hiring Effort in Agency History. Press release, January 29, 2026. 6 U.S. Government Accountability Office. Indian Health Service: Agency Faces Ongoing Challenges Filling Provider Vacancies. GAO-18-580, 2018. Seattle Indian Health Board sihb.org Page 6 of 7 services provide many opportunities to get involved with the urban native community, through our youth engagement initiatives and internship pathways. Unpredictability in cash flow resulting from the Rebate Model would be a major obstacle in sustaining these programs and services. FAILURE TO ADDRESS DUPLICATION, DIVERSION, AND COMPLIANCE The negative impacts described above far outweigh any potential benefits of the Rebate Model. Two of the primary concerns that HRSA intends to address with the implementation of the Rebate Model include duplicate rebates and diversion of medications in the 340B program. We argue that the Rebate Model would not efficiently address these issues. Duplication While we support addressing duplication, the burden to do so should not fall to CHCs and the Indian health care system, as the Rebate Model would cause. Instead, the responsibility of preventing duplicate payments should lie with state Medicaid programs and manufacturers who have the resources to support the administrative tasks in the most efficient manner. State Medicaid programs can implement requirements for third-party claims submission to easily and accurately assess which medications were billed under 340B. For example, Washington State requires 340B pharmacies to identify prescriptions filled with 340B drugs, and we comply with these requirements by identifying prescriptions billed to Medicaid FFS and MCO plans. Instead, the Rebate Model would actually disrupt CHCs ability to comply with Medicaid billing requirements, and introduces significant legal and operational risks. Under current law, CHCs must determine whether a drug qualifies as 340B at the point of billing. However, the Rebate Model delays that determination until after a manufacturer elects to pay a rebate, creating a compliance struggle. This shift not only transfers statutory authority from CHCs to drug manufacturers but also exposes providers to potential civil and criminal action.7 Diversion Regarding diversion, HRSA's annual audit summaries show that most diversion occurs in contract pharmacies.8 Of that diversion, most appear to be due to administrative errors in registration vs. true diversion (being filled for non-eligible patients). Therefore, the costs of the Rebate Model on CHCs and the Indian health care system far outweigh its potential to solve the issue of diversion. 7 National Association of Community Health Centers, Comment Letter on 340B Rebate Model Pilot Program (publicly circulated template pg 20-24), available at https://www.nachc.org/policy-advocacy/policy-priorities/340b-drug-pricing-program/340b-rebate- model-pilot-program/ 8 Health Resources and Services Administration, Program Integrity: FY25 Audit Results, https://www.hrsa.gov/opa/program- integrity/fy-25-audit-results Seattle Indian Health Board sihb.org Page 7 of 7 CONCLUSION AND RECOMMENDATIONS In conclusion, the proposed 340B Rebate Model Pilot Program focuses on a narrow issue with a proposal that would remove clinics access to funds for reinvestment. The Rebate Model would severely undermine the ability of the 340B program to deliver on the intent set by Congress. Furthermore, this stress on the program is compounded by the Medicare price negotiations and state-level efforts to capture 340B savings, 9,10 threatening our clinics ability to provide the highest level of care to our relatives. In order to protect the relatives we serve, and all underserved communities utilizing the Indian health care system and FQHCs, We oppose implementation of the 340B Rebate Model Pilot Program. We request that all FQHCs and I/T/U systems of care be exempted from this and future 340B rebate programs, to prevent unsustainable financial and administrative burdens that would force service reductions and divert resources from patient care and programs. At minimum, we request that the I/T/U system be exempted, to uphold the federal governments trust and treaty responsibility. Sincerely, Esther Lucero (Din), MPP President & CEO P. 206-900-6272 E. EstherL@sihb.org 9 National Association of Community Health Centers, Estimating the Impact of Maximum Fair Prices on 340B Savings (Bethesda, MD: NACHC, 2025), https://www.nachc.org/wp-content/uploads/2025/10/Tool-Estimating-the-Impact-of-Maximum-Fair-Prices- MFP.pdf 10 Washington State Hospital Association, Fiscal Watch, March 13, 2025, https://staging.wsha.org/weekly-newsletter/fiscal-watch- march-13-2025/
HRSA-2026-0001-1899(no commenter metadata)2026-04-20T04:00Z22,484 chars
See attached file(s) April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our pharmacists and pharmacy technicians, Nevada Regional Medical Center appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. 6The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. Our current estimate reduction in paid claims for the year 2026 will exceed two million dollars. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one atChange Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Holly Bush RN, BSN Chief Operating Officer Nevada Regional Medical Center 800 S Ash St Nevada MO 64772 417-448-3692 Office 417-3212890 Mobile hbush@nrmchealth.com www.nrmchealth.com April 15, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our pharmacists and pharmacy technicians, Nevada Regional Medical Center appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective. Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. 6The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. Our current estimate reduction in paid claims for the year 2026 will exceed two million dollars. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one atChange Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Holly Bush RN, BSN Chief Operating Officer Nevada Regional Medical Center 800 S Ash St Nevada MO 64772 417-448-3692 Office 417-3212890 Mobile hbush@nrmchealth.com www.nrmchealth.com
HRSA-2026-0001-1900James Stark · Fayette City, PA, United States2026-04-20T04:00Z1,326 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. CHCs are legally required to offer sliding fee discounts, yet the rebate model makes it impossible to reliably determine medication pricing at the time of dispensing, placing health centers at risk of noncompliance through no fault of their own. Additionally, CHCs are legally required to offer sliding fee discounts, yet the rebate model makes it impossible to reliably determine medication pricing at the time of dispensing, placing health centers at risk of noncompliance through no fault of their own. Cornerstone Care urges HRSA to exempt Community Health Centers s from the 340B Rebate Model Pilot F Program. CHCs s are legally required d to offer sliding fee discounts, yet t the rebate mode makes iti impossible to reliably determine medication pricing at the time of dispensing, placing health centers at risk of noncompliance through no fault of their own. Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. CHCs are legally required to offer sliding fee discounts, yet the rebate model makes it impossible to reliably determine medication pricing at the time of dispensing. placing health centers at risk of noncompliance through no fault of their own.
HRSA-2026-0001-1901Mountain Valleys Health Centers2026-04-20T04:00Z43,290 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountain Valleys Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a thorough analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. This advance review opportunity is particularly important to Mountain Valleys Health Centers (MVHC). We are a Federally Qualified Health Center providing safety-net primary health, behavioral health, and dental services to the residents of remote rural areas of northeastern California. Our service area covers portions of Lassen, Modoc, Shasta, and Siskiyou Counties. With eight clinical sites we are the sole provider of primary care in most of the individual communities and patients have limited access to ancillary or specialty care. MVHC serves 12,306 patients with 8% uninsured, 33% with Medicaid, 31% Medicare, and 28% with Commercial Insurance. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations. We face staggering impacts from the proposed change: Financial Losses: Mountain Valleys Health Centers anticipates a loss of 50% of reduction in 340B savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. 2 Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to our core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MVHC specifically, this will impact: Our Patients, we serve 12,306 patients and 7,072 of our 340B transactions will suffer an adverse impact due to the rebate model. Our Current administration cost which is estimated to be $144,320. We rely on the 340B drug Pricing Program to help offset the cost of uncompensated care and fund enabling services for underserved populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 . Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. Xarelto and Eliquis are vital in our 340B program they make up 45% of the MDPNP 2026 and 2027 for Mountain Valleys Health Centers. Xarelto alone will cause a huge financial burden for us by having to upfront the cost of $15,000-$20,000 a month Farxiga is another drug that will impact our FQHC. On average we spend $5.27 monthly on Farxiga. If the rebate model goes in effect, we will increase to $10,000 a month. As our current Cash on Hand is only 35 days, we will not be able to sustain buying these drugs upfront. Although we are expected to receive the rebate within 10 days from completed data submissions, that still places stress on our cash position while waiting for that rebate. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 2025 UDA Data, HRSA (hrsa.gov) 4 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B purchase discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment by NAHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 5 Sliding Fee Discount: MVHC provides $278,952 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MVHC anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, MVHC anticipates an increase of $12,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on detailed planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.5 For Mountain Valleys Health Centers to manage the proposed 340B Rebate Model we will have to hire an additional 1.5 FTE. The estimated cost will be $141,960 annually in addition to the current annual expense for our 340B coordinator, which is estimated $61,516, plus $67,600 for our Compliance/Executive member. In total, our administrative costs will increase by 45%. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. MVHC estimates that 10-12 hours a week will be required to report 340B rebate claims to a third-party platform, assuming adherence to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. MVHC strongly urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 5 Internal NACHC assessment (99 responses). 6 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For MVHC, which serves 12,306 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $ 300,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with four pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across four different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Lassen, Shasta, and Siskiyou Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,6 and the closings of pharmacies have only exacerbated this, with 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.7 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make complex decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the 6 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 7 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.8 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. MVHC passes along the 340B pricing benefit directly to our patients with only the additional modest administration cost. Mountain Valleys Health Centers offer our patients a Pharmacy Savings Card where patients who are uninsured can purchase drugs at 340B price plus a dispensing fee. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).10 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. 8 HRSA FAQ 9 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. To complicate matters, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. MVHC is subject to Californias healthcare minimum wage requirements under SB 525, which will increase the wage floor for all healthcare employees from $22/ hour in 2026 and to $25/hour by 2027. These mandated increases represent a significant and ongoing rise in operating costs. We rely on the 340B drug Pricing Program to offset uncompensated care and fund enabling services for underserved populations. Under a rebate-based 340B model, covered entities are required to purchase drugs at WAC and wait for a reimbursement, creating delays in program savings. This shift would create a structural misalignment between rising real-time operating costs and delayed 340B Savings. This dynamic threatens cash flow stability and may reduce the resources available to support critical services for underserved populations. Looming even further over CHCs in California is the possibility that a petition initiative will reach the November ballot initiative, aka the Clinic Funding Accountability and Transparency Act. If this initiative is successful, it would impose the requirement that at least 90% of CHC revenue be used for delivery of direct patient care and mission-related services. By including a broad spectrum of positions that are considered non-direct patient care, it will be impossible for CHCs to meet the target percentage. The consequence of not meeting the 90% target is a substantial fine. MVHC estimates that its fine could as much as $5 million per year, obviously an existential threat alongside the impact of the rebate-based 340B. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the fiscal impact of purchasing drugs at the full WAC price, NACHC collaborated with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B11 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.12 For individual MDPNP Price Applicability Years, the calculator evaluates: 11 https://340bpricing.hrsa.gov/ 12 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces problematic decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $847,472 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $36,098 to purchase these same drugs at the 340B ceiling price. This represents a 2348% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MVHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our several hundred uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 10 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mountain Valley Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to seek a line of credit and consume limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on MVHC for access to healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our thirty-four million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Mountain Valley Health Centers urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to function as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP 11 deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.13 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative 15% denial rate would result in a net annual loss of $128,160. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, explicitly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. 13 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 13 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolation: it will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive 14 Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion MVHC urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make complex decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MVHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mountain Valleys Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tyleen Vestal, Email: Tvestal@mountainvalleys.org Sincerely, Shannon Gerig Mountain Valleys Health Centers
HRSA-2026-0001-1902(no commenter metadata)2026-04-20T04:00Z1,884 chars
My name is Becky and I am a Mentor at an FQHC in Oregon. I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Becky Campbell Hillsboro, Oregon
HRSA-2026-0001-1903Albany Area Primary Health Care, Inc.2026-04-20T04:00Z44,986 chars
See attached file(s) 1 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Albany Area Primary Health Care, Inc (AAPHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. AAPHC has provided affordable quality primary and preventive care for the past 47 years as a CHC in Southwest Georgia. As a result of our savings generated by the 340B program since 2007 (initially through contract pharmacies then adding entity owned pharmacies in 2018 and 2023), we have expanded our comprehensive service offerings to include dental, behavioral health, pharmacy, podiatry, vision and womens health also including mobile units and school-based health center programs. We serve 53,000 patients with 81% of those patients at or below the federal poverty guidelines. During 2025, we processed ~117k 340B transactions. AAPHC collects, maintains, and retains 340B program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and readiness for HRSA and manufacturer audits. AAPHC ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. 2 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 We use a comprehensive set of practices to prevent duplicate discounts, including accurate Medicaid Exclusion File maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains compliant with HRSA and state Medicaid requirements. Additionally, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the contract pharmacy program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this intention by placing an immense financial burden on CHCs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately 3 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC collaborated with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: AAPHC provided $2.9MIL in sliding fee discounts through discounted services during calendar year 2025. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: To account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model, AAPHC anticipates needing 1.5 additional FTEs at an ongoing annual cost of $95k. External Vendor Costs: Given increased complexity, AAPHC anticipates additional costs for external support vendors. These vendors include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, audit services, and reconciliation services. One-time startup costs are estimated at $125k and include: IT build/interface, internal project management, policy updates, staff training, legal and compliance review, and consulting support for implementation. Ongoing annual costs are estimated at $100k. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. AAPHC will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. AAPHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. AAPHC will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend time each week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. 7 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. AAPHC currently partners with 72 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 72 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our Georgia region, this would leave patients in Dougherty and Lee counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this situation, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs 12 HRSA FAQ 9 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For AAPHCs uninsured patients filling prescriptions at an entity owned pharmacy, we charge patients the 340B cost of the drug and offer sliding scale discounts on pharmacy services through a dispense fee tied to the patients income level. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC collaborated with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our historical purchases, we estimate it would cost $2.3MIL to purchase the 10 drugs under the proposed rebate model. AAPHC currently spends $315k to purchase these same drugs at the 340B ceiling price. This variance represents a 622% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 Cost increases will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, AAPHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations to rural school districts, coordination of care services and direct pharmaceutical delivery services. Additionally, while not essential services themselves, the provision of crucial specialty services (OB/Gyn, Behavioral Health, Dental, etc.) for patients can have a significant effect on overall health and wellness. These such services are at risk of being compromised due to the need for more focused efforts and financial support to maintain essential clinical services. Operating Hours: We anticipate needing to reevaluate our clinic hours each week, specifically impacting weekend hours and/or non-traditional work day hours (early AM or evening), which are often the only times our working-class patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund support services to help educate and assist in navigation for patients which is particularly crucial for impoverished communities serviced by our organization. This creates barriers to care, lags in care access, and more frequent utilization of urgent care facilities driving up health service costs and disrupting the continuum of care within the health center. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12.6k uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. AAPHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach 12 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and utilize limited financial reserves. This solution is not sustainable. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. The risk of our credit limit being reached or our reserves being depleted is a direct threat to our communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that CHCs 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays AAPHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to function as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance. They also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 14 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 15 Albany Area Primary Health Care, Inc. 2408 Westgate Drive, Albany, GA 31707-2277 Phone (229) 888-6559, Fax (229) 436-4107 Conclusion AAPHC strongly urges HRSA to exempt CHCs from any 340B Rebate Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety- net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. AAPHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. AAPHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact AAPHCs Chief Operating Officer, Clifton Bush: (clifton.bush@aaphc.org). Sincerely, Shelley Spires, Chief Executive Officer Albany Area Primary Health Care, Inc.
HRSA-2026-0001-1904Virginia Garcia Memorial Health Center2026-04-20T04:00Z137 chars
Please do not get rid of the 340 B program. this program benefits a lot of patients in the clinic to be able to afford their medications.
HRSA-2026-0001-1905Virginia Hospital & Healthcare Association2026-04-20T04:00Z7,726 chars
See attached file(s) VIRGINIA HOSPITAL & HEALTHCARE ASSOCIATION 4200 INNSLAKE DR., SUITE 203, GLEN ALLEN, VA 23060 P.O. BOX 31394, RICHMOND, VA 23294 804-965-1227 FAX: 804-965-0475 www.vhha.com CELEBRATING 100 YEARS TOGETHER: 1926-2026 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information Manufacturer Rebate Models under the 340B Drug Pricing Program - HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, On behalf of the Virginia Hospital & Healthcare Association (VHHA), we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding manufacturer rebate models under the 340B Drug Pricing Program. Virginias hospitals, particularly those in rural and medically underserved communities, rely on the 340B Program to sustain essential health services. In many parts of the Commonwealth, hospitals are not only the primary source of care but also among the largest employers and economic anchors in their regions. Virginias Rural Hospital Financial Context The financial condition of rural hospitals in Virginia underscores the importance of maintaining the statutory structure of the 340B Program. Nearly half of Virginias rural hospitals have operated at negative total margins in recent years. The median operating margin for rural hospitals in the Commonwealth has hovered around or below zero, with several facilities experiencing sustained multi-year losses. Rural hospitals in Virginia serve communities with higher proportions of Medicaid beneficiaries, Medicare patients, and uninsured individuals compared to suburban and urban regions. Medicaid reimbursement remains below the cost of care, and Medicare payments often fail to cover rising labor, pharmaceutical, and supply expenses. In this environment, 340B savings are not ancillary, they are foundational to sustaining essential services that safety net hospitals would otherwise not be able to provide including but not limited to oncology services, behavioral health programs, obstetric care, outpatient infusion centers, and medication access programs in rural communities. Preserving the Statutory Point-of-Sale Framework April 20, 2026 HHS Docket No. HRSA-2026-03042 Page 2 of 3 Congress structured the 340B Program to provide covered entities access to drugs at or below a statutory ceiling price at the point of sale. Manufacturer rebate models would fundamentally alter that structure by requiring hospitals to purchase drugs at higher upfront prices and later seek a rebate on the back end. For hospitals operating on thin or negative margins, particularly in rural Virginia, the cash flow implications of such a shift are significant. The predictability of point-of-sale pricing assures that hospital cash flows remain consistent over time. A retrospective rebate system introduces financial volatility with regard to the timing of the reimbursement and whether and when manufacturers will actually honor the arrangement and rebate the funds. Many facilities are not positioned to absorb this volatility. Operational and Compliance Concerns A rebate-based model would fundamentally alter the operational structure of the 340B program and introduce several significant risks and burdens for hospitals and the broader drug supply chain, including: Substantial administrative complexity. Hospitals would be required to establish new systems to track eligible prescriptions, submit rebate claims, reconcile payments, respond to manufacturer disputes, and manage audits and appeals. This would layer an entirely new administrative infrastructure on top of existing purchasing, billing, and compliance processes, requiring additional staffing, technology investments, and oversight. This cost is anticipated to be significant. Heightened compliance risk related to Medicaid duplicate discounts. Hospitals already operate under strict requirements to prevent duplicate discounts between 340B pricing and Medicaid drug rebates. A rebate-based structure would significantly complicate these safeguards, increasing the risk of inadvertent reporting errors, disputes with manufacturers, and potential enforcement actions. Significant cash flow disruption for hospitals. Under a rebate model, hospitals would be required to purchase drugs at full acquisition cost and then wait weeks or months for manufacturers to issue the 340B rebate. For example, a mid-sized rural hospital purchasing $X million annually in 340B-eligible drugs could be forced to carry several weeks or months of drug acquisition costs, creating $Z million in additional working capital requirements. Given the already thin operating margins and rising costs facing many hospitals, this shift would transfer substantial financial risk to providers and could undermine their ability to maintain critical services and access to care in their communities. Operational confusion across the pharmaceutical supply chain. Introducing rebates into a system that currently relies on upfront chargeback discounts would create overlapping and potentially conflicting processes involving wholesalers, manufacturers, pharmacies, and providers. Layering rebate arrangements onto existing chargeback systems and Medicaid reporting requirements risks creating operational fragmentation and uncertainty across the supply chain. Potential new leverage for manufacturers to restrict contract pharmacy arrangements. Manufacturers could condition or delay rebate payments based on April 20, 2026 HHS Docket No. HRSA-2026-03042 Page 3 of 3 additional data submission requirements or contractual terms, effectively creating new mechanisms to limit the use of contract pharmacies, an essential tool that many hospitals rely on to serve patients in rural and underserved communities. Together, these challenges demonstrate that a rebate-based model would not simply be a technical change to payment mechanics, but a fundamental restructuring of the 340B program that could introduce significant financial, operational, and compliance risks for hospitals and the patients they serve. Impact on Patient Access in Virginia 340B savings support critical programs throughout the Commonwealth, including: Oncology infusion services in rural regions where independent specialty providers are limited; Behavioral health integration in community hospitals; Maternal health and obstetric services in communities facing workforce shortages; Medication assistance programs for low-income and uninsured patients. Virginias rural communities already face provider shortages, transportation barriers, and economic instability. Any policy change that reduces certainty in 340B savings could directly affect patient access to these essential services. Conclusion The 340B Program remains a vital tool that enables Virginia hospitals, particularly rural facilities operating on razor-thin or negative margins, to maintain access to care for vulnerable populations. The certainty of upfront statutory pricing is central to the programs effectiveness. VHHA respectfully urges HRSA to preserve the integrity of the point-of-sale discount framework and ensure that any consideration of rebate models does not undermine hospital stability, patient access, or congressional intent. We appreciate the opportunity to provide input and welcome continued engagement with HRSA. Sincerely, Sean T. Connaughton President & CEO Virginia Hospital & Healthcare Association
HRSA-2026-0001-1906Cory White · Forest Grove, OR, United States2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1907Bronson Healthcare Group2026-04-20T04:00Z23,389 chars
See attached file(s) Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com April 14, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Bronson Healthcare Group, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Bronson Healthcare Group that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to evaluate a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bronson Healthcare Group has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses thirty questions and encourages commenters to include supporting facts, research, and evidence in their responses. Bronson Healthcare Group has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the ten drugs that HRSA previously approved for its original Program and those that have been approved under the Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimate has increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bronson Healthcare Group can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Bronson Healthcare Group to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Bronson Healthcare Group understood that we would incur reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands added resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A shift to a 340B rebate model would create substantial new administrative burdens that do not exist under the current upfront discount system. Our organization would face both one-time start-up costs and recurring operational costs associated with building new workflows, hiring or reallocating staff, reconfiguring IT systems, and managing significantly more complex claims and rebate tracking processes. Key cost drivers would likely include: Additional staffing or reassignment of existing staff Increased reliance on third-party administrators (TPAs) New IT infrastructure, software modification, and data feed development Manual labor to gather and submit medical claims data Reconciliation of rebate payments and follow-up on delays or denials Expanded auditing, compliance, and documentation requirements Legal and consulting costs related to implementation and dispute resolution Because the current 340B savings are based on immediate, point-of-sale discounts, transitioning even a small subset of drugs to a rebate model would materially increase our administrative cost structure. These new expenses could significantly erode the value of the 340B Program for our organization. Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Bronson Healthcare Group would face material new administrative costs to stand up and run a rebate model alongside the current point-of-sale discount structure. One-time startup items include workflow re-engineering, EHR billing TPA interface builds, file-format mapping, legal privacy reviews, SOPs, and staff training. Recurring costs include claim compilation and submission, reconciliation, and dispute management, expanded internal audits, and higher TPA vendor fees for rebate handling and analytics. These activities would erode net 340B value compared to the status quo. TPA vendor fees: $85,000 $180,000 per year for rebate file development maintenance, claim validation queues, dashboards, and denial management add-ons. Internal labor (incremental hours across teams): $120,000 $260,000 per year to prepare submit claims, reconcile payments, and support audits. One-time IT build / legal: $140,000 $300,000 for interfaces, data mapping, testing, security reviews, and contract terms data-use analysis. Staffing Impacts Under a Potential 340B Rebate Program. Bronson Healthcare Group does not currently have the staff needed to comply with a Rebate Program. Implementation of a rebate model would require notable staffing changes. The rebate process introduces new administrative functions that our current workforce is not structured to absorb. We anticipate the need to hire additional full-time employeesor alternatively divert existing clinical or administrative staff away from patient-centered responsibilitiesto manage the expanded workload associated with claims submission, rebate monitoring, reconciliation, and dispute resolution. HRSAs estimate of two hours per week substantially understates the time required to perform these functions. A rebate program would involve routine claim-level validation, manual data compilation, continuous communication with TPAs, and proactive follow-up when rebates are delayed or denied. These responsibilities cannot be fulfilled with minimal incremental effort. Rebate processing requires claim-level workstreams data pulls, validation, submissions, monitoring, denials appeal, and audit trails that cannot be absorbed within the current POS-optimized team. At steady state, Bronson would need dedicated capacity across functions. Pharmacy 340B program operations :30 55 hours week (eligibility cross- checks, NDC claim alignment, exception handling). Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Revenue Cycle HIM data operations :35 65 hours week (ICD DRG pulls, payer fields, service dates, claim matching, resubmissions). IT Analytics: 25 45 hours week (ETL pipelines, report refresh, error logs, interface support, change control for manufacturer template updates). Compliance Internal audit: 10 20 hours week (monitoring, sample reviews, documentation retention, audit responses). Likely FTE adds after stabilization: 2.0 3.5 FTE across the above teams; recruitment and training lead time: 3 5 months. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bronson Healthcare Group has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our technological systems were designed around the longstanding upfront discount mechanism and are not equipped for a rebate model. Implementing a rebate program would require substantial changes to IT infrastructure, including new interfaces, upgraded software, and customized reporting tools. A significant challenge is the extraction of medical claims data. In many cases, TPAs do not have direct access to our electronic health record (EHR) systems; therefore, data gathering would require manual processes, custom queries, or new data feeds. These changes would generate both one-time development costs and ongoing expenses for maintenance, updates, and troubleshooting. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our current 340B data collection processes are tailored to the upfront discount model and rely on a combination of internal systems and external TPAs. A rebate program would require gathering additional claim-level information that we do not currently compile for 340B purposes. This often includes fields that differ from what is submitted to insurers for billing purposes, requiring new workflows and manual interventions. Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Contrary to statements made during prior program discussions, hospitals do not already submit all the data required for a rebate model through existing platforms. Collecting, validating, and transmitting these new data elements would result in additional administrative costs and burdens beyond our current operations. Current 340B processes focus on NDC-level dispensing data ,encounter eligibility ,and internal audit documentation .A rebate model introduces claim- level medical data ( ICD-10 ,prescriber NPI ,payer details ,service dates ) and documentation not required for 340B ESP or payer billing as currently configured .Pulling these elements from multiple internal systems increases manual touchpoints and compliance audit risk ( lineage ,completeness ,and accuracy controls ) .Operationally ,expect 2 4 incremental handoffs per claim ( EHR billing TPA manufacturer ) ,each a potential source of denials or delays . Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bronson Healthcare Group to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, which delayed discount will have meaningful impact on our institution and the patients we serve. A rebate-based payment model fundamentally alters the financial dynamics of 340B participation. Under the upfront discount system, hospitals pay the reduced 340B price at the time of purchase. A rebate model, however, requires hospitals to pay full wholesale acquisition cost (WAC) up front and then await reimbursement. Even a 10-day payment window introduces substantial cash- flow strain, especially when applied across multiple high-cost outpatient drugs. Hospitals would effectively serve as short-term lenders to pharmaceutical manufacturerswithout interestand face financial risk if payments are delayed, denied, or disputed. This shift could potentially worsen liquidity, jeopardize compliance with financial covenants, and increase vulnerability to market volatility. HRSAs prior statement that rebates would occur before wholesale invoices are due does not reflect the realities of invoice timing or hospital payment cycles. Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Adverse Impacts of These Additional Costs and Burdens. All these different costs and burdens add up. Unfortunately, that means that Bronson Healthcare Group will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The cumulative effect of these new administrative, staffing, technology, and cash-flow burdens would significantly reduce our ability to use 340B savings to support patient care. Increased expenses would divert resources currently used to provide critical community benefits such as: Financial assistance programs for patients (including employees and at- risk/low-income populations) o Bronson Healthcare Group also operates a high volume Neonatal Intensive Care Unit and operates the only Level 1 Trauma Center in Southwest Michigan. The savings generated by the 340B program are integral to the sustainability of these programs and allows patients and families to access this care in their local community. Specialty clinics or outreach services Medication access programs Behavioral health support Chronic disease management Investments in safety net infrastructure Depending on magnitude, these additional costs may force postponement or cancellation of important initiatives. Continued uncertainty surrounding potential program redesigns also complicates long-term financial planning. In short, the rebate model threatens to undermine the very purpose of the 340B Program: enabling hospitals to stretch scarce federal resources to serve more patients. The combined administrative, staffing, IT, data, and cash-flow burdens would reduce Bronsons capacity to fund charity care, medication assistance, behavioral health, rural access services, and capital. Depending on volume and lag, the net 340B capture could decline by 8% 18% after new costs and financing friction. This decline equates to as much as $15-20 million worth of 340B Program Value for Bronson Healthcare Group. New ongoing admin IT compliance costs: $250,000 $335,000 per year. Interest-equivalent financing impact (opportunity cost of float credit): likely several million dollars per year. Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bronson Healthcare Group relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. For over three decades, Bronson has structured their operations, budgeting, and strategic planning around the upfront discount model. These reliance interests extend to staffing levels, TPA contracts, billing processes, drug procurement workflows, and the use of 340B savings within annual operating budgets. A sudden departure from the status quo would disrupt well- established systems and impose significant unplanned costs. Nothing in the statute requires HRSA to change to a rebate model, and absent compelling evidence of deficiencies in the current system, abandoning the upfront discount structure would be incompatible with longstanding reliance interests. Bronsons workforce plans, TPA contracts, procurement workflows, charity care commitments, and capital planning assume point-of-sale discounts. A rebating paradigm introduces transition costs and planning volatility without evidence that the POS model is failing, diluting the program s ability to stretch scarce resources for vulnerable patients. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com During the earlier rebate program rollout, significant issues arose with the Beacon platform proposed by participating manufacturers. Problems included: Unclear or evolving data submission requirements Complex or burdensome terms and conditions Lack of transparency about data use, storage, and security Insufficient technical support and delayed responses Unpredictable changes in required file formats and reporting templates Any future program must include robust safeguards to protect patient privacy and ensure clear, consistent expectations regarding data transmission. Without such guardrails, a rebate program poses unacceptable operational and compliance risks. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bronson Healthcare Group, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Drug manufacturers already have access to multiple pathways to prevent duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP). Existing data-sharing processes and clearinghouse-style models demonstrate that alternatives to a rebate system are feasible, less burdensome, and more consistent with the intent of the 340B Program. We agree with the American Hospital Association that a neutral third-party clearinghouse is a more appropriate, efficient, and cost-effective solution than a rebate mechanism. There is no evidence that a rebate model is necessary to address deduplication challenges and implementing one would impose far greater burdens on covered entities without meaningful benefit. Bronson has not experienced substantive 340B MDPNP duplicate-discount issues; existing Bronson Healthcare Group 2825 Airview Blvd. Kalamazoo, MI 49002 bronsonhealth.com TPA processes and internal validations have sufficed, and issues are typically resolved within current workflows. A neutral third-party clearinghouse would more efficiently deliver real-time flags with far less operational disruption and without shifting financing risk to hospitals. For all these reasons, Bronson Healthcare Group respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bronson Healthcare Group and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this critical issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Troy Shirley, PharmD, MBA Vice President, Pharmacy Services Bronson Healthcare Group Kalamazoo, Michigan
HRSA-2026-0001-1908Bergen New Bridge Medical Center2026-04-20T04:00Z19,437 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Bergen New Bridge Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Bergen New Bridge Medical Center that far outweighs any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Bergen New Bridge Medical Center in Paramus, New Jersey, has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Bergen New Bridge Medical Center in New Jersey has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and 2 denials, and therefore less money that Bergen New Bridge Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Bergen New Bridge Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Bergen New Bridge understood we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. This program requires the development of customized specification reports for submission to the designated third-party portal. This will require significant time from hospital staff and will certainly require payment to software vendors for resources to develop both the reports and the in-house procedures we will have to establish. Several of the elements in the initial reporting dataset, including the claim line for each medical claim submitted, are impossible for our current software to include in a report. In our owned-retail pharmacy, 7,500 prescriptions of 12,500 filled on average in a month are for patients without insurance, and no compensation was paid by patients for these prescriptions. Asking our organization to pay for these medications up front at high cost could jeopardize our ability to continue to serve this volume of patients with this business model. The pricing established by the 340B program is what makes it possible to serve this population in the current payer mix. The Medical Center having to pay a six-figure sum up front to drug manufacturers does not and will not improve patient outcomes. Our organization may have no choice but to evaluate scaling back service offerings given this challenge, which is directly contrary to the expressed goal of the 340B statute. The more expensive medications would likely stop being provided which include HIV treatment, rheumatology, and dermatology drugs. The key cost drivers of this program for Bergen New Bridge Medical Center would include increased staffing, the diversion of current staff, upgrades to IT systems, increased expenses with third-party vendors, increased compliance requirements, labor hours, and the process involved for challenging all denials. 3 The incremental costs would have to cover claims processing, required data submission, the reconciliation and chasing down of rebates, audit support from our finance team, and the coordinated effort of challenging denials. The reality is the Medical Center would have $150,000 in upfront additional costs, with a significant risk for rebate delays or denials which would add to the monthly expenses. The cost for the two full-time employees that will be required to perform data reconciliation on over 3,000 claim submissions monthly will significantly increase administrative costs, which will require scaling back safety net services. With the discounts from the 340B program, the Medical Center estimates it reinvests more than $12 million of these funds annually to both maintain and expand services to all who need them. As a facility with a one percent margin, this funding is essential to the Medical Centers operation. Staffing Impacts Under a Potential 340B Rebate Program. Bergen New Bridge Medical Center does not currently have the staff needed to comply with a Rebate Program. Just for the reconciliation alone, the Medical Center would need to hire and train two full time employees. Bergen New Bridge would also have to reallocate work hours from current employees in several departments to perform administrative functions for the rebate program. This would include pharmacy staff, clinical professionals, finance team members, and more. The cost just for the two new FTE who would perform reconciliation would be a minimum of $120,000 annually. The time estimated by HRSA for this program which projects only five hours per week is a gross underestimate. We average 3,000 claims monthly that would need to be tracked and reconciled and that could not possibly, under any circumstances, be completed accurately in 20 hours a month. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bergen New Bridge Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We would need to upgrade our IT systems to be able to compile and process the data required for the rebate program. We would need to purchase additional software licenses and purchase hardware to be installed in numerous work areas for both new employees reconciling claims and existing staff being reallocated to this program. It would 4 require the expenditure of at least $150,000 or more. We are currently upgrading to a new EHR, and the current one is limited in its ability to generate and analyze data so our team would have to do a great deal of work on paper. Even when the new EHR goes live in late February 2027, there will be a significant learning curve, and work will still have to be done on paper to be compliant until training and upgrades are complete. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. This rebate program would turn our data collection and analysis on its head. The changes required by this proposed program would be an ongoing process, placing a significant burden on our pharmacy, clinical, and finance teams. We would need to pull data from a variety of internal systems at the Medical Center to comply with the data demands. There will be an element of manual paperwork required as the current EHR is limited. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bergen New Bridge to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. To be frank, we do not have the cash on hand to withstand a rebate model. If implemented, our organization would have to stop providing the most expensive medications to our Charity Care patients as we could not float their cost waiting for rebate payments. These are life-saving medications that could put their health in significant jeopardy, resulting in elevated use of our Emergency Department, increased use of inpatient acute health services, and most upsetting the potential for loss of life. Ten days is too long of a time for our facility it would have a devasting impact on our quality of care and our ability to care for our patients. 5 Adverse Impacts of These Additional Costs And Burdens. All these many different costs and burdens add up. Unfortunately, that means that Bergen New Bridge Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The estimated $12 million dollars annually the Medical Center gets from this program helps keep our doors open. It helps us defray the cost of expensive specialty services, expand access to multiple service lines, and develop programs and services that improve health and wellness outcomes that reduce ED visits and inpatient readmissions. The Medical Center serves a disproportionate number of those on Medicaid, Medicare, and those who require Charity Care. The current 340B program is a lifeline both to our organization and those we serve who are the most vulnerable among us. We are the only safety net hospital in New Jerseys most populous county and see patients, particularly for our behavioral health and substance use disorder services, from all 21 counties in the state. With the costs associated with this rebate program, care for the most vulnerable across New Jersey will be jeopardized. We will not be able to provide high-cost drugs under this rebate model as we cannot front the exorbitant amount of money required while waiting for the rebate. This means lifesaving HIV medications, rheumatology medications that allow patients functionality, and dermatology medications that treat psoriatic arthritis, skin cancer, and rare skin diseases wont be dispensed to those who need them most. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bergen New Bridge Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance 6 interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. The savings of 340B are already factored into our cash on hand financial projections for this budget year. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. In the Beacon Rebate Model Learning Series: Data Validation there were instructions for uninsured patients. This includes reporting a PCN of CASH for these claims. Bergen New Bridge services customers eligible for retail pharmacy medications through a state aid funded program. The pharmacy claims are processed as offline insurance and transmitted separately to the state aid reporting structure in non-NCPDP format. In our pharmacys EMR we use a BIN 000000 (which we can begin reporting as 999999) and no PCN (which we can begin reporting as CASH) to capture these claims for 340B rebate date reporting. When questioned, Beacons response was this: You are correct that our guidance for uninsured/cash patients is to use the following data elements in your pharmacy claim submissions: BIN: 999999 and PCN: CASH. Our reply: I will interpret your response as approval of submission of state aid offline insurance claims and other like instances of offline payers/payment processes using the BIN:999999 and PCN:CASH. If that is incorrect, please provide the alternative submission procedures beacon has created for these case types. Id just like to validate this is in line with program expectations. The use of CASH is not intended to convey cash payment by these customers, as their prescriptions are paid through state aid. The same goes for other smaller niche patient groupings such as grant funded drug provisions and administrative write-offs. Beacons reply: 7 Our response shouldnt be seen as approval but instead our suggested approach for what information to input into the data fields required under HRSA's approved rebate model pilot. Our Director of Pharmacys feedback after the exchange: The model works great for real pharmacy claims. But for charity or other funded prescriptions, we need guidance on how to submit. Two different emails to their support center and Im getting double talk and FAQ answers written back. Not actually addressing the substance of my question or providing a real answer. Beyond inadequate customer service on the most basic of issues, we have serious concerns about data security and cyber security. The 340B rebate platform provided by Beacon requires organizations to sign an agreement to upload data directly to them. This means organizations cannot sign in and upload an Excel file daily. But when questioned by Bergen New Bridge Medical Centers IT professionals, Beacon said they are not conducting any security questionnaires to validate the protection of data. While Beacon does not have access to PHI, the data provided is still valuable. They are also not culpable, under the current proposed rebate model, if their platform is hacked and data is compromised. The healthcare industry learned valuable lessons after the Change Healthcare cyberattack and accountability must be taken for securing platforms and data by all parties including Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bergen New Bridge Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. 8 MDPNP duplicate discounts are already being managed by Beacon MDPNP program for manufacturers manufacturers are flagging claims as 340B, and CEs have an opportunity to engage with manufacturers through the portal to ensure non-duplication of rebates. Beacons training materials include detailed analysis and explanation of how MDPNP rebates will be screened and managed for 340B duplicate discounts. None of these existing procedures necessitate a shift in 340B pricing logic to a rebate model to achieve the goal of non-duplication of discounts. For all these reasons, Bergen New Bridge Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bergen New Bridge Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Tracy Schoenberg AVP, External Affairs & Government Relations Bergen New Bridge Medical Center 230 E. Ridgewood Avenue, Paramus, NJ 07652 tschoenberg@newbridgehealth.org 201-572-0638
HRSA-2026-0001-1909CommonSpirit Health dba Mercy Medical Center2026-04-20T04:00Z6,874 chars
See attached file(s) ComrnonSpin CHI Mercy Health Roseburg, Oregon April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI Mercy Health, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. CHI Mercy Health is a 152-bed community hospital and Rural Referral Center located in Roseburg, Oregon. The hospital is located in Douglas County, a federally designated medically underserved area, making this CHI site critical to this region. Over 428,000 outpatient visits and 5,000 surgeries were performed by Mercy providers and staff last year. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI Mercy Health that far outweigh any benefits that might come from it. Indeed, HRSA's own caiculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount rnechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI Mercy Health relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The CHI Mercy Health Ambulatory Therapy Clinic, which provides comprehensive cancer care and non-oncology infusion services, allows patients to seek quality care and receive treatment near their families and in their home community. Outpatient medical services, such as Emergency Care and Outpatient Surgical Apr 20, 2026 CommonSpirit Health HHS Docket No. H RSA-2026- 03042 Providing better physician support, better patient education and additional support in discharge planning of medications. Provides a tele-psychiatry program to provide 24/7 access to patients admitted to the hospital with issues related to mental health needs. Provides training and treatment for smoking cessation and substance abuse for residents who live in isolated communities. Provides preventable dental health care to approximately 10,000 youth annually in grades K-12 in 38 Douglas County schools. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments CommonSpint " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org. Russell J. Woolley President CHI Mercy Health (Mercy Medical Center) CHI Mercy Health Roseburg, OR Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions.
HRSA-2026-0001-1910(no commenter metadata)2026-04-20T04:00Z43,935 chars
See Attached April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Thunder Bay Community Health Service, Inc. (IBCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: TBCHS anticipates a loss of $37,856.00 from entity-owned phaimacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undeimines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For TBCHS in particular, this means it will impact: 117,755 340B prescriptions/ 19,718 patients in 2025 $159,329.14, current administrative costs for 340B program TBCHS reinvests all revenue generated through the 340B program into patient care across all service lines within the CHC. These funds specifically support services that do not fully self-support, including Care Management, expanded Dental services beyond b asic care, Optical services, and Behavioral Health. We strongly urge IIRSA to exempt CHCs from any rebate model to protect the financial stability of safety- net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital forpatients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. 'Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thrornb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.111 I/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Tenn Randomized Treatrnent with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. httns ://w w w. ahaj ournals . ore/do i/ndf/10.1 I 61/circulation aha.123 .065748 2 The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthemiore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low- income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 111. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated withthis rebate pilot program. Similar tonavigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying datasubmission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrafive Cost Calculator Description 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Adminishation. https://www.samhsa.eov/dataldata-we-collect/nsduh-national- survevdrug-use-and-healtb/national-releases 5 Hauser RA, et al. Long-Terrn Deutetmbenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. FrontNeurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee D is cou nt: TBCHS provided $1,087,124.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: TBCHS anticipates needing 0.50 additional F ths to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, TBCHS anticipates an increase of $2,900.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full- time equivalent (F FE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 TBCHS anticipates the need to hire an additional part-time (0.50 FTE) employee to meet the reporting requirements as they stand today. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, cariying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. TBCHS anticipates this to be an additional $37,856.00 in salary expenses. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. TBCHS estimates a minimum of 10 hours per week, will be required to report 340B rebate claims to a third-party platfoim, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely vaiying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. TBCHS urges IIRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third- Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if 7 Internal NACHC assessment (99 responses). 8 Ibid. 4 manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $3,000.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 19,718 patients, the total projected increase in expensesincluding labor, IT, and carrying costs-is estimated at $40,756.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. To operationalize a rebate model, TBCHS pharmacy system will require significant customization, including the development of real-time alerts to flag claims that result in a financial loss under MTF/MFP pricing. These alerts will increase patient wait times at the pharmacy counter and disrupt efficient dispensing workflows, as staff must manually intervene to assess pricing, eligibility, and financial exposure before dispensing medication. In addition, TBCHS will be required to build and maintain advanced reports customized to each participating manufacturer's specific data elements, submission formats, timelines, and evolving drug lists. This includes the creation of specialized financial reports focused exclusively on tracking MTF/MFP rebate claims, reconciling expected versus received rebate amounts, and identifying denied or partially paid claims. Our pharmacy software will also need to support frequent updates to sliding fee discount and formulary lists to reflect drugs subject to rebate pricing, further increasing the risk of pricing inconsistencies and patient confusion at the point of sale. These system modifications require ongoing IT support, vendor involvement, validation testing, and staff training, diverting limited resources away from direct patient care. Unlike TPAs, which centralize and standardize these processes, TBCHS must absorb the full cost and operational risk of integrating disparate manufacturer requirements into our in-house systems. This fragmented and labor-intensive approach significantly increases administrative burden, introduces delays in patient access to medications, and undermines the efficiency and financial sustainability of CHC in-house pharmacy operations. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. TBCHS currently anticipates this cost to be $500 each file requested. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling "Purchase Files" and "Price Files" to verify that eveiy rebate check matches the statutory 340B price. 5 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CAD s would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MEP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corTesponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing inedications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. 9 Internal NACHC survey data 6 A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. I In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals." A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. TBCHS is committed to ensuring patients have access to affordable medications. We leverage multiple strategies to reduce prescription drug costs, including participation in the federal 340B Drug Pricing Program, use of cost-effective generic alternatives when clinically appropriate, access to manufacturer patient assistance programs, and coordination with preferred pharmacy partners. Our care teams work closely with patients to identify the lowest-cost therapeutic options and connect them with financial assistance resources to minimize out-of-pocket expenses. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventoiy to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirernent. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 1 HASA FAQ II Such discounts are subject to potential legal and contractual restrictions. httns://bnhc.hrsa.gov/comuliance/cornnliance- rnanuallchapter9#footnote l 0 121nt-ps ://enlivenh ealth. co/blo a/v ear-end-b us iness-hea eck-kev- metr ics-everv-ph armac_y-owner-should-review 7 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment afterpurchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $5,657,629.00 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,372,420.00 to purchase these same drugs at the 340B ceiling price. This represents a 25% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TBCHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services. Operating Hours: We anticipate needing to reduce our clinic hours by 40 hours per week, 3 F1E's, specifically Optometry Services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For eveiy "Rebate Coordinator" we are forced to hire, we lose the ability to fund additional services such as dental chair side assistants, that support access to services beyond core required services (e.g. Restorative services). Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by 13 https://340bpricirahrsa.gov/ 14 https://www.cms.Rov/files/zip/selected-dma-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 a manufacturer, we cannot provide the "bridge" support that prevents our 2,031 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. TBCHS asserts thattaking out a loan or an extended line ofcredit to fund drugprocurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, TBCHS estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,407,149.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. TBCHS estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $329,660.83. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate inodel, our organization has been forced to increase our wholesaler lines of credit and utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on TBCHS, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safetynet. Ifwe are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the countiy depend on. a. Financial Impact of Rebate Denials and Delays TBCHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutoiy savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny 9 rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our culTent volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $332,459.00. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and conected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject- matter expertise to understand the complexities of pharmacy software, billing, and data components. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalreaistecgov/documents/2025/08 /01/2025-14619/340b-program-notice- appli cat ion-process-for-the-340b-reb ate- mo el-n ilot- proaram 10 V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offerfull discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B -purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutoiy requirements ah-eady in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B prograln; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend conecting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash- flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers 11 to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Thunder Bay Community Health Service, Inc. strongly urges IIRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsmed patients, who depend on the up-fiont 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Thunder Bay Community Health Service, Inc. believes that a 340B rebate pilot would cause disproportionate haim to patients served by CHCs and other safety net providers. Thunder Bay Community Health Service, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lori Wineman, Pharm D, CPO, lwineman@tbchs.org Sincerely, Richard Bates, CEO Thunder Bay Community Health Service, Inc. 12
HRSA-2026-0001-1911Thunder Bay Community Health Service, Inc2026-04-20T04:00Z30,164 chars
See attached file(s) BAY E - NIT HE April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Thunder Bay Community Health Service, Inc. (TBCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy impacts: Financial Losses: TBCHS anticipates a loss of $37,856.00 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural O centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. I. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For TBCHS in particular, this means it will impact: 117,755 340B prescriptions/ 19,718 patients in 2025 $159,329.14, current administrative costs for 340B program TBCHS reinvests all revenue generated through the 340B program into patient care across all service lines within the CHC. These funds specifically support services that do not fully self-support, including Care Management, expanded Dental services beyond basic care, Optical services, and Behavioral Health. net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto® and Eliquis® are vital forpatients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal — and often less safe — alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga® and Jardiance®, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 2 The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar ® is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo®, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo® achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low- income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national- surveydrug-use-and-health/national-releases Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID : PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: TBCHS provided $1,087,124.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: TBCHS anticipates needing 0.50 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, TBCHS anticipates an increase of $2,900.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full- time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 TBCHS anticipates the need to hire an additional part-time (0.50 FTE) employee to meet the reporting requirements as they stand today. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. TBCHS anticipates this to be an additional $37,856.00 in salary expenses. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. TBCHS estimates a minimum of 10 hours per week, will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. TBCHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff;it requires significant changes to pharmacy software and Third- Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if 7 Internal NACHC assessment (99 responses) 8 Ibid. 4 manufacturers are allowed to select different software platforms, as they curently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $3,000.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge that diminish our 340B savings. Total Cost: For our CHC, which serves 19,718 patients, the total projected increase in expenses—including labor, IT, and carrying costs—is estimated at $40,756.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. To operationalize a rebate model, TBCHS pharmacy system will require significant customization, including the development of real-time alerts to flag claims that result in a financial loss under MTF/MFP pricing. These alerts will increase patient wait times at the pharmacy counter and disrupt efficient dispensing workflows, as staff must manually intervene to assess pricing, eligibility, and financial exposure before dispensing medication. In addition, TBCHS will be required to build and maintain advanced reports customized to each participating manufacturer's specific data elements, submission formats, timelines, and evolving drug lists. This includes the creation of specialized financial reports focused exclusively on tracking MTF/MFP rebate claims, reconciling expected versus received rebate amounts, and identifying denied or partially paid claims. Our pharmacy software will also need to support frequent updates to sliding fee discount and formulary lists to reflect drugs subject to rebate pricing, further increasing the risk of pricing inconsistencies and patient confusion at the point of sale. These system modifications require ongoing IT support, vendor involvement, validation testing, and staff training, diverting limited resources away from direct patient care. Unlike TPAs, which centralize and standardize these processes, TBCHS must absorb the full cost and operational risk of integrating disparate manufacturer requirements into our in-house systems. This fragmented and labor-intensive approach significantly increases administrative burden, introduces delays in patient access to medications, and undermines the efficiency and financial sustainability of CHC in-house pharmacy operations. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. TBCHS currently anticipates this cost to be $500 each file requested. Ongoing Resource Diversion: Staffwho currently manage clinical pharmacy services willbe forced to spend 5 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. 5 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model forCADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typicaly not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. 9Internal NACHC survey data 6 A rebate model also creates substantial uncertainty about CHCs'ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. TBCHS is committed to ensuring patients have access to affordable medications. We leverage multiple strategies to reduce prescription drug costs, including participation in the federal 340B Drug Pricing Program, use of cost-effective generic alternatives when clinically appropriate, access to manufacturer patient assistance programs, and coordination with preferred pharmacy partners. Our care teams work closely with patients to identify the lowest-cost therapeutic options and connect them with financial assistance resources to minimize out-of-pocket expenses. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). 12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 10HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https:/bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. 14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment afterpurchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $5,657,629.00 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,372,420.00 to purchase these same drugs at the 340B ceiling price. This represents a 25% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TBCHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services. Operating Hours: We anticipate needing to reduce our clinic hours by 40 hours per week, 3 FTE's, specifically Optometry Services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund additional services such as dental chair side assistants, that support access to services beyond core required services (e.g. Restorative services). Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by 13https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8
HRSA-2026-0001-1912Infinity Health2026-04-20T04:00Z81,034 chars
Please see attached file. Thank you. April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Infinity Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. At Infinity Health, for over 21 years it has been our mission to deliver high quality, patient centered care that connects individuals, families, and communities, to a trusted and connected network of services. Last year we had the privilege of serving 9,592 patients in a total of 45,410 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of up to $3 million annually, we at Infinity Health expect a $735,000 loss from entity-owned pharmacy revenue due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Infinity Health in particular, this means it will impact: 28,000 prescriptions that we processed to assist in serving our 9,592 patients. Floating $2 million, having a detrimental effect on cash flow Hindering the ability to serve our patients who rely on us the most We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Infinity Health provided $283,271 in sliding fee discounts, to 761 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Infinity Health anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Infinity Health anticipates an increase of $200,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 As noted above we expect to hire at least one additional FTE and anticipate that it will cost $60,000 annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We anticipate that 20 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Infinity Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $50,000 annually. Total Cost: For our CHC, which serves 9,592 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to 9 Internal NACHC survey data 7 wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Infinity Health we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications, free prescription delivery, free prescription mailing, free medication packing services, free medication therapy management, along with many other services. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,060,235.30 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $27,300 to purchase these same drugs at the 340B ceiling price. This represents a 7500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Infinity Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Infinity Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 10 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: Infinity Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $170,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Infinity Health the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Infinity Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a massive net annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 12 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Infinity Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B 13 rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Infinity Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Infinity Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kyle Ahlenstorf at kyle.ahlenstorf@weareinfinityhealth.org Sincerely, Kyle Ahlenstorf Infinity Health April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Infinity Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. At Infinity Health, for over 21 years it has been our mission to deliver high quality, patient centered care that connects individuals, families, and communities, to a trusted and connected network of services. Last year we had the privilege of serving 9,592 patients in a total of 45,410 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of up to $3 million annually, we at Infinity Health expect a $735,000 loss from entity-owned pharmacy revenue due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Infinity Health in particular, this means it will impact: 28,000 prescriptions that we processed to assist in serving our 9,592 patients. Floating $2 million, having a detrimental effect on cash flow Hindering the ability to serve our patients who rely on us the most We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Infinity Health provided $283,271 in sliding fee discounts, to 761 patients through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Infinity Health anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Infinity Health anticipates an increase of $200,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. As noted above we expect to hire at least one additional FTE and anticipate that it will cost $60,000 annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We anticipate that 20 hours a month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Infinity Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $50,000 annually. Total Cost: For our CHC, which serves 9,592 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Infinity Health we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications, free prescription delivery, free prescription mailing, free medication packing services, free medication therapy management, along with many other services. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,060,235.30 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $27,300 to purchase these same drugs at the 340B ceiling price. This represents a 7500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Infinity Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Infinity Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Purchasing at WAC: Infinity Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $170,000 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Infinity Health the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Infinity Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a massive net annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Infinity Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Infinity Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Infinity Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kyle Ahlenstorf at kyle.ahlenstorf@weareinfinityhealth.org Sincerely, Kyle Ahlenstorf Infinity Health
HRSA-2026-0001-1913Samantha George2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1914Association of American Medical Colleges2026-04-20T04:00Z61,364 chars
Please see the attached comment letter on behalf of the Association of American Medical Colleges (AAMC) in re: HHS Docket No. HRSA202603042. Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Attention: HHS Docket No. HRSA202603042 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: The AAMC1 welcomes this opportunity to comment on the request for information (RFI) titled Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (February 17, 2026), issued by the Health Resources and Services Administration (HRSA or the Agency). HRSA issued the RFI to collect feedback from the public on whether to implement a rebate model to effectuate prices in the 340B Drug Pricing Program, as well as the costs and implementation considerations related to a 340B rebate model. As we explain further in the comments below, the AAMC strongly opposes the adoption of a rebate model for the 340B program, as such a fundamental restructuring of the programs design would jeopardize the ability of academic health systems nationwide to fulfill the 340B programs core purpose of stretching their scarce resources to reach more eligible patients and provide more comprehensive services.2 The 340B program is critical to academic health systems and the patients and communities they serve. 340B hospitals are a vital part of the nations health care safety net, ensuring access to cutting-edge technology, research, and health expertise for their patients. Nearly 90 percent of AAMC-member short-term non-federal hospitals are 340B eligible and provide highly 1 The AAMC is a nonprofit association dedicated to improving the health of people everywhere through medical education, clinical care, biomedical research, and community collaborations. Its members are all 163 U.S. medical schools accredited by the Liaison Committee on Medical Education; 13 Canadian medical schools accredited by the Committee on Accreditation of Canadian Medical Schools; nearly 500 academic health systems and teaching hospitals, including Department of Veterans Affairs medical centers; and more than 70 academic societies. Through these institutions and organizations, the AAMC leads and serves Americas medical schools, academic health systems and teaching hospitals, and the millions of individuals across academic medicine, including more than 210,000 full-time faculty members, 99,000 medical students, 162,000 resident physicians, and 60,000 graduate students and postdoctoral researchers in the biomedical sciences. Through the Alliance of Academic Health Centers International, AAMC membership reaches more than 60 international academic health centers throughout five regional offices across the globe. 2 H.R. Rep. No. 102-384(II) (1992). Administrator Engels April 20, 2026 Page 2 specialized health care services that are often unavailable in other settings, including oncology services, transplant surgery, trauma care, pediatric specialty care, and treatment for rare and complex conditions. For example, AAMC member hospitals comprise100 percent of all National Cancer Institute (NCI)-designated comprehensive cancer centers, 75 percent of all burn unit beds, 59 percent of all level-one trauma centers, and 64 percent of pediatric ICU beds.3 AAMC member institutions share a common mission to care for the underserved and train the nations future health care workforce, making life-saving health care services available to all patients, regardless of their ability to pay. This commitment to high-quality care, regardless of a patients insurance coverage or socioeconomic status, can create significant financial challenges. Savings from the 340B program help our members to navigate these challenges, supporting their ability to maintain, improve, and expand access to care for their patients. These savings are critical in allowing 340B hospitals to improve the health of their communities, whether through medication management, providing charity care, offering access to healthy food, or expanding care through mobile clinics and community health programs. The AAMC commends HRSA for seeking detailed feedback from 340B program stakeholders on the potential implementation of a 340B rebate model. We continue to maintain our unequivocal opposition to the use of rebate models in the 340B program, which represent a stark departure from over three decades of precedent and are unnecessary to ensure 340B program integrity. The association appreciates the opportunity to comment on this RFI to demonstrate the prohibitive costs associated with participating in rebate models, the significant operational changes rebate models would necessitate, and the availability of more practical solutions to addressing the issues drug manufacturers have cited as their rationale for using rebate models. The following summary reflects the AAMCs comments in response to HRSAs RFI: HRSA Should Not Implement a Rebate Model. Rebate models mark a stark departure from over 34 years of 340B program precedent, are unnecessary to meet HRSAs stated goals, and would set a dangerous precedent for future expansion. To receive meaningful feedback on the costs of a rebate model, HRSA must first outline the parameters of such a rebate model. Payment Timing and Potential Cash Flow Impacts for Covered Entities. Rebate models would significantly delay the ability of 340B hospitals to receive critical savings, having significant negative impacts on their financial standing and downstream impacts on patient care. Costs to Covered Entities. Rebate models would be operationally burdensome and impose substantial administrative costs on 340B hospitals resulting from staffing changes, information technology (IT) system updates, new third-party vendor contracts, and other implementation costs. Rebate Denials. While the AAMC is strongly opposed to the implementation of a rebate model, if HRSA were to nonetheless proceed with implementation of a rebate model 3 AAMC analysis of FY2023 American Hospital Association data, American College of Surgeons Level 1 Trauma Center designations, 2024, and the National Cancer Institutes Office of Cancer Centers, 2024. AAMC membership data, December 2024. Administrator Engels April 20, 2026 Page 3 program, the program should be narrowly crafted and limited in scope with a robust dispute and appeals process. Data Collection by Covered Entities. The agency should take all appropriate steps to streamline and simplify the method and amount of data covered entities need to report to effectuate a rebate model. Required Reporting. If HRSA pursues a rebate model, it should collect data from manufacturers on rebates paid and denied, which will allow the agency to hold manufacturers accountable for honoring their obligation to provide 340B prices to covered entities and to provide rebates as expeditiously as possible. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot. The AAMC does not believe rebate models are necessary to ensure 340B program integrity. Instead of creating additional burden through unnecessary new processes, HRSA should continue to build on existing program integrity tools at its disposal. HRSA SHOULD NOT IMPLEMENT A 340B REBATE MODEL PROGRAM Rebate Models are an Unnecessary Departure from 34 Years of 340B Program Precedent For over thirty years, 340B discounts have been offered by manufacturers to all but one covered entity type through upfront pricing.4 In August 2024, five drug manufacturers and one vendor marketing a rebate platform announced their intention to implement a rebate model for 340B drugs, shifting away from the longstanding upfront pricing structure of the 340B program .5 After a federal district court held that the 340B statute prohibits drug manufacturers from unilaterally effectuating 340B prices through a rebate instead of as upfront discounts without first receiving HRSA approval,6 HRSA issued a notice seeking drug manufacturer applications to participate in a 340B Rebate Model Pilot Program to begin on January 1, 2026.7 The pilot program, which in 2026 was to be limited to the 10 drugs in the Medicare Drug Price Negotiation Program (MDPNP), never went into effect due to a federal district court injunction prohibiting its implementation.8 HRSA is issuing this new RFI to solicit feedback in advance of implementing a new rebate model program. The information HRSA requests feedback on includes the costs associated with rebate models, delayed saving resulting from rebate models, denied rebate claims, and ideas for additional guardrails in future rebate models. HRSA does not specifically propose a rebate model or outline the parameters of a potential new rebate model. However, in both the RFI and in HRSAs separate information collection request,9 HRSA indicates the basic structure of any new rebate model program would require hospitals to submit 4 340B-eligible Aids Drug Assistance Programs (ADAPs) collect rebates to receive 340B discounts instead of receiving upfront discounts. 5 The five drug manufacturers are Johnson & Johnson, Eli Lilly, Sanofi, Bristol Myers Squibb, and Novartis. 6 Eli Lilly & Co v. Kennedy, 2025 WL 1423630, (D.D.C. May 15, 2025) 7 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. 90 FR 36163. August 1, 2025. 8 American Hospital Association v. Robert F. Kennedy, Jr., No. 2:25-cv-00600. December 29, 2025. 9 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906-NEW. 91 FR 9632 (February 26, 2026). Administrator Engels April 20, 2026 Page 4 claims data for 340B drugs and receive the 340B price as a retrospective rebate instead of an upfront discount. As we outline in further detail throughout this letter, such models would result in substantial financial losses for safety-net teaching hospitals, ultimately affecting patient care and access. Moreover, a rebate model would be operationally complex, if not impossible, to implement, especially within the short timeframe outlined. To preserve the vital function of academic health systems and 340B program intent, we urge HRSA to maintain the ability of covered entities to purchase 340B drugs at upfront discounted prices. Further, we ask that HRSA explore other, less disruptive ways to realize the goal of deduplicating 340B and maximum fair price (MFP) under the Inflation Reduction Act (IRA).10 To Collect Meaningful Feedback, HRSA Must Provide Sufficient Information About the Scope of a Potential Rebate Model In the RFI, HRSA seeks detailed information about the impact of a potential rebate model pilot program and asks for the inclusion of facts, research, and evidence as well as data collection instruments, data sets, and detailed findings (p. 7288). The topics on which HRSA seeks feedback include the administrative costs of a potential rebate model program, staffing impacts, systems and infrastructure costs, and cash flow impacts. Yet, HRSA does not provide any details about how a potential rebate model would be structured, such as which manufacturers would participate, which drugs would be covered, whether the model would be limited to certain payers or include all payers, which third-party platform would be used to collect claims data, and who would be responsible for bearing the costs of implementation. While we acknowledge that this is an RFI and not a proposed rule, HRSA should have provided some parameters of a potential rebate model that 340B program stakeholders could use in assessing impact and providing feedback. Without this information, it is impossible to accurately provide the information HRSA is looking for and HRSA is bound to have substantial variation in the responses it receives, as they would be based on different assumptions about the scope of a rebate model. The costs and delayed savings associated with a rebate model that applies to a limited subset of drugs (such as the ten drugs included in the MDPNP in 2026) would differ substantially from the costs and delayed savings associated with a rebate model that includes all 340B drugs. While HRSA does not explicitly state this, it is our assumption that a rebate model would be similar in scope to the 340B Rebate Model Pilot Program that was to begin on January 1, 2026that is, limited to the ten drugs eligible for drug price negotiation through the MDPNP in 2026 and possibly expanded to include other negotiation eligible drugs in subsequent years. Therefore, our specific responses on costs related to participating in a rebate model are based on this assumption, unless otherwise stated. 10 Letter from HRSA Administrator Carole Johnson to Johnson & Johnson CEO Joaquin Duato. September 17, 2024 Administrator Engels April 20, 2026 Page 5 A 340B Rebate Program Sets a Dangerous Precedent for Future Expansion of Rebate Models In the RFI, HRSA does not specifically propose a new rebate model program, but we assume that HRSA would use the feedback provided in response to this RFI to launch a new program that would be limited to drug manufacturers with MDPNP agreements in a given year. While the AAMC appreciates HRSAs approach of issuing a limited rebate model, we believe the introduction of rebate models even in a narrow scope sets a dangerous precedent, opening the door for more harmful expansion of such models in the future. Left unchecked, a rebate model would result in unfettered discretion in the hands of drug manufacturers, handing over HRSAs traditional compliance responsibilities to drug manufacturers and undermining covered entities ability to receive 340B savings. The implementation of rebate models would unilaterally effectuate 340B prices as retrospective rebates instead of upfront discounts, departing from over thirty years of precedent. A change of this magnitude creates unnecessary disruption for covered entities and necessitates significant and costly operational changes for covered entities, manufacturers, and U.S. Department of Health and Human Services (HHS). The structural changes imposed by the use of rebate models in the 340B program fundamentally alter covered entities' financial planning, cash flow management, and operational risk. HRSA Can Pursue Better Alternatives for Ensuring 340B Program Integrity and Achieving MFP Effectuation Under the IRA That Do Not Conflict with the Operation of the 340B Program In the RFI, HRSA indicates the primary purpose of the pilot program is to allow manufacturers to comply with provisions of the IRA that require manufacturers to provide the lower of the MFP or the 340B ceiling price to covered entities. HRSA specifically states that manufacturers should not deny 340B rebates on other compliance grounds, such as alleged duplicate discounts or diversion by the covered entity. (P. 36165), A 340B rebate model is purportedly necessary because of the approach the Centers for Medicare & Medicaid Services (CMS) has taken in its IRA guidance,11 which is to allow manufacturers to develop their own retrospective approaches to honoring MFP, effectively requiring pharmacies to purchase drugs at wholesale acquisition cost (WAC) and then subsequently receive a refund or rebate equal to the difference between WAC and the MFP. When 340B price is lower than the MFP for a specific drug, the manufacturer would provide a larger rebate that equals the difference between the WAC And 340B price. Instead of allowing MFP to be effectuated retrospectively, CMS could require manufacturers to provide the MFP prospectively (at the point of sale). Under a prospective approach, non-340B pharmacies would purchase drugs at MFP up front, while 340B covered entity pharmacies would be able to purchase 340B drugs with upfront discounts. In instances where the MFP is lower than the 340B price, the covered entity would submit data elements to the Medicare Transaction Facilitator (MTF), which would then credit the covered entity the difference between the MFP and the 340B price. Requiring a prospective approach for MFP effectuation would allow 340B discounts to continue to be offered as upfront discounts, as they 11 CMS Final Guidance on Manufacturer Effectuation of MFP in 2026 and 2027, October 2, 2024; CMS Draft Guidance on the Medicare Drug Price Negotiation Program in 2026, 2027, and 2028, May 12, 2025. Administrator Engels April 20, 2026 Page 6 have for over 30 years, and negate the need for retrospective 340B rebates. While IRA implementation is not directly under HRSAs purview, we believe that HRSA can collaborate with CMS to ensure that CMS implementation of the IRA does not have unintended consequences on the 340B program, such as leading to 340B rebate models that would be burdensome for covered entities and for HRSA to oversee (as we explain in more depth below). Alternatively, if CMS chooses not to adopt a prospective model, CMS could use a neutral third- party entity, such as the MTF, to assist with deduplicating MFP from 340B prices. Pharmacies could submit necessary and limited claims data to the MTF, instead of directly to drug manufacturers, to determine whether a drug is a 340B drug or should instead receive the MFP. Because the MTF is an already established entity that facilitates the provision of MFP rebates, it could easily be structured to serve the purpose of deduplicating MFP from 340B price. Another option CMS could consider is to leverage the Medicare Part D Claims Data 340B Repository that it established in the calendar year 2026 Physician Fee Schedule final rule12 for voluntary submissions by covered entities in 2026 to remove 340B units from Part D rebate calculations. This mechanism relates to another provision of the IRA, which is that drug manufacturers provide inflationary rebates to Medicare when their drug prices rise faster than the rate of inflation but that they do not provide an inflationary rebate on 340B drugs. The Part D repository is set up to receive data elements from covered entities that identify drugs as 340B drugs, and therefore, could also be expanded in use to serve the purpose of deduplicating MFP and 340B price. Although CMS is responsible for IRA implementation, HRSA serves an important role in ensuring that CMS preferred implementation approaches do not interfere with the operation of the 340B program. By coordinating with CMS to adopt one of the above alternatives to manufacturers chosen retrospective approaches, HRSA can ensure it is furthering the joint goals of IRA implementation and preserving the structure of the 340B program as an upfront discount program. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES HRSA requests feedback on whether payment timing under a potential rebate model would affect cash flow, including whether rebate models would pose financial risk to 340B covered entities (p. 7289-90). As we explain in further detail, the cash flow delays associated with the use of rebate models to effectuate 340B drug pricing could devastate financially vulnerable 340B hospitals and the programs their patients and communities rely on. A shift from an upfront discount to 340B rebate models would alter the way that 340B covered entities have realized the benefit of discounted drugs for over 30 years. Instead of purchasing 340B drugs upfront at discounted prices and being able to benefit from these savings immediately, hospitals under a rebate model would have to wait potentially months between when a drug is purchased and when a manufacturer provides a rebate on that drug. While under HRSAs previously finalized 340B Rebate Model Pilot Program manufacturers had ten days from receipt of a claim to pay a rebate, 12 90 FR 49266. November 5, 2025. Administrator Engels April 20, 2026 Page 7 the actual lag time between when a drug is purchased and when the 340B rebate is received would be much longer due to drug procurement processes and the many intervening steps that would take place between when a drug is purchased and dispensed and when a rebate is ultimately received. We anticipate that beyond this typical timeline, there would be additional delays in hospitals receiving rebate payments due to claims disputes, errors, and denials. Rebate models undermine the ability of academic health systems and teaching hospitals to provide access to essential services to their patients, while serving only to increase the margins of drug manufacturers. Shifting the 340B program to a rebate program would delay needed cash flow to 340B hospitals by significantly delaying the receipt of their 340B discounts. Even if a new rebate model requires rebates be disbursed within 10 calendar days of data submission, some covered entities may be challenged or unable to acquire 340B drugs without upfront discount pricing and still maintain their other services offered. On average, the delayed or deferred savings resulting from effectuating 340B pricing through a rebate amounts to tens of millions of dollars annually for academic health systems and teaching hospitals.13 The deferred savings are a result of the hospitals having to purchase drugs at WAC and wait for a manufacturer rebate, as opposed to purchasing the drug at the discounted price upfront. Effectively, the hospital ends up floating tens of millions of dollars to the manufacturer in the meantime, depriving the hospital of critical cash reserves while the hospital awaits a rebate. If rebate models were to be expanded to additional drugs in 2027 and beyond, the deferred savings amount would grow significantly. Expanding drugs covered by the rebate model to include the 15 drugs eligible for drug price negotiation in 2027 would nearly double the deferred savings impact compared with the 10 included drugs in 2026. For safety-net hospitals that often carry minimal cash on hand, the impact of the delay in realizing 340B savings would further limit their cash reserves, having significant negative impacts on their financial standing and downstream impacts on patient care. Delays in realizing 340B savings impacting hospitals drug purchasing power is just one part of the financial impact that 340B hospitals will experience due to rebate models. The delayed savings will also result in the loss of interest on deferred savings, which one academic health system estimated at a 4 percent loss on their affected 340B drugs. In addition, hospitals would lose sub-ceiling discounts due to loss of 340B discount pricing. Furthermore, we expect that a percentage of 340B claim rebates would not be paid in error, would be contested, or would be denied by manufacturers altogether. One AAMC member institution estimates that these confounding factorsloss of interest, loss of subceiling discounts, rebate denials, and wastage losswould amount to over $6 million in annual permanent losses, not including any administrative implementation costs. This is one examplefor some institutions with an even larger 340B footprint, these losses could be even greater. Reduced 340B savings would impede the ability of academic health systems and teaching hospitals to maintain the unique services they disproportionately provide, such as burn care, 13 Data collected from AAMC member institutions. The deferred savings were calculated as WAC minus ceiling price for the drugs expected to be included in a rebate model program. Administrator Engels April 20, 2026 Page 8 trauma care, and pediatric specialty care. 340B hospitals have a demonstrated commitment to serving low-income, vulnerable populationsto qualify for the program, they must meet a minimum disproportionate share hospital adjustment percentagerepresenting their commitment to Medicaid and low-income Medicare patients. Financial losses resulting from rebate models would further reduce slim (often negative) financial margins, thus impacting clinical programs, coordination of care services, capital investments, and the community benefit programs offered by these safety-net hospitals. The reduction in cash on hand and the additional upfront compliance costs could also impact hospitals bond ratings and their ability to secure loans. Ultimately, any reduction in services would affect patient access. Direct patient impacts that could result from rebate models include reduced specialty drug inventory, delays in therapy initiation, reduced contract pharmacy access, and decreased patient support programs, particularly affecting rural and underserved populations. Losses from a rebate model would compound the billions of dollars of losses that hospitals have already incurred because of manufacturer restrictions on 340B drugs dispensed through contract pharmacies,14 in addition to other 340B-related pressures such as new claims-level data reporting requirements imposed by three drug manufacturers on in-house pharmacy claims.15 These losses are exacerbated by the enactment of the One Big Beautiful Bill Act, which included a historic $1 trillion cut from federal spending on Medicaid and the Health Insurance Marketplaces over the next decade, increasing the number of uninsured by over 10 million in 2034.16 Cuts to federal spending are expected to further strain already scarce resources for safety-net hospitals committed to serving Medicaid and low-income Medicare patients. Adding an additional layer of fiscal uncertainty would destabilize these hospitals, undermining not just 340B hospitals but harming their patients as well. Delayed Savings and Wholesaler Payment Terms HRSA asks about payment timing under current wholesaler contracts and how that timing would interact with rebate models. While the exact terms are specific to the agreement between a particular wholesaler and hospital, and they often vary for specific classes of drugs, hospitals would not be receiving their 340B rebate under a rebate model before their payment is due to their wholesalers. Therefore, under their wholesaler contracts as currently structured, hospitals would purchase the 340B drug, pay the wholesaler at the higher, non-340B WAC (which is list price), and then receive the 340B rebate (calculated as the difference between WAC and 340B ceiling price) at some point weeks or months later, or not at all if denied by the manufacturer. 14 340B Health. Drugmakers Pulling $8 Billion Out of Safety-Net Hospitals. July 11, 2023. Note that this figure underestimates the true impact of these restrictions, because it was based on 21 drug manufacturers restrictions. The number of manufacturers that have imposed limitations now stands at 37. 15 As of the date of this letter, three drug manufacturersExelixis, Eli Lilly and Company, and Novo Nordisk have begun requiring 340B covered entities to submit claims-level data on in-house pharmacy drugs. 16 Congressional Budget Office, Estimated Budgetary Effects of Public Law 119-21, to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, Relative to CBOs January 2025 Baseline (July 21, 2025) Administrator Engels April 20, 2026 Page 9 COSTS TO COVERED ENTITIES Current Administrative Costs under the Upfront 340B Discount HRSA requests feedback on the compliance costs that 340B covered entities currently incur as part of their participation in the 340B program. We do not have specific data to share on this question because we believe current 340B compliance costs are irrelevant to the question of the additional costs that would be imposed by rebate models. 340B hospitals, who are good stewards of the program dedicated to program integrity, invest substantial resources into 340B compliance. This is an expected and ongoing commitment that 340B hospitals make as part of their participation in the 340B program. These investments assure that the covered entity is complying with the statutory requirements of the 340B program, such as ensuring drugs are dispensed to patients of the covered entity, tracking claims, working with contract pharmacy partners and third party vendors, and avoiding duplicate discounts. 340B hospital maintain staff from multiple functional areas across the entity that help with these responsibilities, including legal, compliance, pharmacy, finance and reimbursement, and revenue cycle staff. In addition to maintaining robust records, they are responsible for conducting internal audits and record reviews, as well as responding to HRSA and manufacturer audits. As large health systems with multifaceted 340B programs that include contract pharmacy arrangements, multiple in-house pharmacies, and offsite clinics, the costs of compliance are higher. These are costs that 340B covered entities take into account in determining the value of 340B participation. In addition to these costs related to compliance with statutory requirements, covered entities costs of participation have increased in recent years due to unilateral reporting requirements imposed by manufacturers, such as contract pharmacy claims and recent requirements by three manufacturers that covered entities report in-house claims data. Additional, unforeseen costs, such as those imposed by 340B rebate models, could potentially change this calculation. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Participating in 340B rebate models would impose significant costs on 340B hospitals. Beyond the direct financial losses that 340B hospitals would incur because of the rebate models, additional resources would need to be allocated to address the significant operational challenges and administrative burden associated with rebate models. Hospitals would need additional IT infrastructure and staff to submit the claims data needed to produce these rebates. Based on feedback we received from AAMC member health systems, the direct administrative costs associated with shifting from an upfront discount program to a retrospective rebate model fall into the following categories: Startup costs related to preparing for rebate workflow development, claims submission, and reconciliation, as well as annual, ongoing costs related to rebate claim submission and reconciliation. Administrator Engels April 20, 2026 Page 10 Startup and ongoing, annual costs of IT-related changes, such as upgrading existing systems or purchasing and installing new systems that have the functionalities needed to comply with a rebate model. Startup and ongoing, annual costs related to revising existing third-party vendor contracts (such as third-party administrators) or contracting with new vendors to assist with rebate model compliance. Costs related to providing education and training to existing hospital staff on new rebate model requirements, as well as costs related to adjusting existing staff workflows and realigning staff responsibilities. Initial and annual costs related to hiring and training new staff responsible for supporting rebate model compliance. Depending on the specific hospital, our member hospitals reported that total annual administrative costs ranged from $100,000 to more than $600,000, encompassing both IT and staffing-related changes. The types of changes contributing to these costs include developing processes and systems to submit and track claims, as well as subsequently reconcile those claims; developing a process for appealing or disputing claims; investing in compliance and audit process changes to prepare for increased audits related to rebate models; staff training and education; and annual vendor fees. Academic health systems have reported that a rebate model would involve extracting data, such as from a third-party administrator and reconciling it with data accepted into the Beacon platform. Staff time related to submitting and reconciling claims and managing disputes and discrepancies is estimated to require 25 to 40 hours per week. Under a 340B rebate program, the parameters of each manufacturers rebate model may differ in many aspects, including the processes for submitting data and terms and conditions. It is also highly likely that each manufacturer will utilize a different vendor, format, or portal for tracking and submitting requests for rebates. It will be confusing and costly for covered entities to keep track of and comply with these numerous rebate models and would ultimately run counter to ensuring program integrity. If these rebate models go into effect, HRSA will need to keep track of the various manufacturer rebate models and ensure compliance with the pilot model criteria. To streamline this work, we suggest HRSA maintain a centralized, impartial system to collect required data, rather than utilizing a patchwork of IT systems from each individual, approved drug manufacturer. Beyond the infrastructure required to effectuate these models, there is a voluminous amount of sensitive data required to implement rebate models, inclusive of multiple data elements for each 340B drug claim. Under HRSAs previously finalized 340B Rebate Model Pilot Program, the agency required covered entities to submit eleven different data elements per claim in order for drug manufacturers to determine if a claim would qualify for a 340B discount. Multiplied by the hundreds of thousands of drug claims covered entities may be expected to submit, the volume of data needed to effectuate rebates would require covered entities to account for a formidable number of units of data. Administrator Engels April 20, 2026 Page 11 HRSA asks how the administrative and operational costs of a rebate model could be offset (p. 7289). In HRSAs 2026 Rebate Model Pilot Program, plans were required to include assurances that all costs for data submission are the responsibility of the manufacturer and no additional administrative costs are passed to covered entities. We stress that in any rebate model, manufacturers should be the sole party responsible for the costs of not only acquiring and implementing the IT programs and infrastructure needed for data submission but would also need to bear the full-time equivalent (FTE) employee costs required to have the additional staff collect, organize, and submit the required data. Lastly, any rebate model program should include details on how covered entities may be reimbursed for these costs. The agency should include requirements around reimbursement for these administrative costs beyond just attestations from drug manufacturers. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program HRSA requests information on whether a potential rebate model pilot program would require additional FTE employees or cause current medical provider FTEs to reallocate work hours from medical care to perform administrative functions (p. 7289). Given the operational complexity associated with participating in rebate models and the compliance concerns implicated by this new process of effectuating the 340B prices, 340B hospitals would have to hire additional staff and realign existing staff to ensure they are ready for a rebate model. These additional staff would be needed for maintaining records of 340B claims subject to the rebate model, submitting claims, reconciling claims, disputing denied claims, responding to expanded audits resulting from the rebate model, and updating IT systems to streamline rebate model compliance. Based on feedback provided by AAMC member hospitals, depending on the institution-specific circumstances and their current staffing levels, a hospital would need to hire from one to more than six FTEs spanning not just the pharmacy department but including legal, compliance, revenue cycle, and finance roles as well. The types of roles that hospitals have already filled or expect to fill to comply with rebate model requirements are: full-time coordinators or analysts, pharmacy 340B insight analysts, pharmacy informaticists, legal/compliance, supply chain compliance analyst, rebate operations analysts, reconciliation/finance analysts, denial and dispute specialists, IT/data integration analysts, and compliance/audit support. These would be permanent positions. Many hospitals also reported that they would have to realign existing staff time to prioritize rebate model compliance, with one hospital citing approximately 12,240 hours of staff time annually resulting from six new FTEs across pharmacy, finance, revenue cycle, and compliance teams. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Rebate models would require costly upgrades to existing systems, procurement of new systems, and in most cases, contracting with external vendors to help with claims submission, tracking, reconciliation, and disputes. For large academic health systems and teaching hospitals, participating in rebate models entails added complexity of submitting and tracking claims due to the sheer volume of claims and the different settings in which 340B drugs are dispensed. As Administrator Engels April 20, 2026 Page 12 340B hospitals, they often have multiple in-house pharmacies and contract pharmacy arrangements, as well as administering drugs in mixed-use settings such as in offsite clinics. 340B hospitals would not be able to rely on their existing systems to submit and track claims in these varied settings, instead having to upgrade systems or utilize third-party vendors. Expected IT system build-outs include claims mapping, interfaces, and secure data transmission of claims information to manufacturers. Finance and accounting systems would also need to be redesigned to allow for receivables tracking and reconciliation processes. Other specific examples of system changes that a rebate model would necessitate include modifications to split-billing and third- party administrator contracts, implementation of rebate submission platforms or clearinghouse interfaces, and additional vendor support for data integration and reconciliation. Due to the additional compliance concerns implicated by rebate models, hospitals would also need to implement expanded audit and risk management controls. If a rebate model program were to be designed similar to HRSAs 340B Rebate Model Pilot Program that was set to take effect on January 1, each participating drug manufacturer would be free to operate its own drug rebate model independently, using its own choice of third-party vendor. As a result, covered entities would be required to maintain multiple different IT platforms and data submission processes to fulfill manufacturers requirements for the 340B rebate models. Collecting and transmitting this data to each of these platforms would require aggregating data from various pharmacy settings, particularly in large academic health systems that manage multiple in-house pharmacies, dispense 340B drugs in mixed-use settings, and have relationships with contract pharmacies. As an example of the additional administrative work needed under these rebate models, 340B hospitals would need to modify their existing inventory practices to maintain a separate inventory for non-340B drugs that are purchased at WAC and cannot be purchased at a lower price through a group purchasing organization (GPO) due to the GPO prohibition on 340B hospitals. As the program is operated currently, this is not required since discounts are applied seamlessly at the point of sale. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program HRSA seeks feedback on other costs of a rebate model pilot program. In addition to delayed savings, forgone savings, and administrative costs, hospitals will see potentially delayed reimbursement and administrative costs stemming from compliance with state Medicaid billing requirements. Since manufacturers first began proposing their individual rebate models in 2024, hospitals have been contending with the question of how 340B rebate models would interact with state Medicaid billing requirements. Specifically, when providing a 340B drug to a Medicaid beneficiary, states require covered entities to bill Medicaid for these drugs at actual acquisition cost (AAC). Typically, the AAC for a 340B drug is the 340B ceiling price, which is the amount that a covered entity bills the state Medicaid agency. Under a rebate model, if 340B hospitals initially purchase drugs at WAC instead of 340B ceiling price, it is unclear if they would bill Medicaid at the WAC (which is the initial acquisition cost to the hospital) or the post-rebate 340B ceiling price. In a since-removed FAQ related to the 340B Rebate Model Pilot Program, HRSA instructed covered entities to work with state Medicaid agencies to determine best practices for billing, also noting that manufacturers have committed to supplying a 340B Administrator Engels April 20, 2026 Page 13 ceiling price file that could be used determine the post-rebate ceiling price that could be used for Medicaid billing.17 However, hospitals have informed us that they have received insufficient direction from state Medicaid agencies on how to bill Medicaid for drugs covered under the rebate model. Assuming that hospitals are to bill Medicaid at the post-rebate price, hospitals have to wait until they receive the rebate before they can bill Medicaid. This would result in added burden for the hospital and would complicate Medicaid billing, resulting in delays in Medicaid reimbursement. REBATE DENIALS HRSA seeks feedback on specific guardrails that should be built into a 340B rebate model pilot program to ensure that denials are limited to appropriate circumstances. Further, HRSA asks about standard process elements required for rebate denials and the timeline for adjudicating improper denials (p. 7290). The agency provides an example of limiting denials to instances when a 340B rebate was provided to another covered entity on the same claim. In other parts of the RFI, HRSA alludes to using rebate models to avoid duplicate discounts not just in the context of the MFP under the IRA but also in other CMS programs such as Medicaid. The AAMC rejects the notion that there is a need for a manufacturer-driven solution to address purported issues around program integrity. Therefore, as we expressed above, we caution HRSA against adopting a rebate model. In the context of Medicaid, which is the only context in which duplicate discounts are explicitly prohibited by the 340B statute,18 HRSA has worked with CMS and state Medicaid agencies to develop mechanisms to prevent duplicate discounts. Most states allow 340B covered entities to decide whether to carve in their 340B drugs (provide 340B discounts to their Medicaid patients) or carve out (forgo a 340B discount and instead allow the state to receive the Medicaid rebate on that drug). Covered entities that choose to carve in 340B drugs for their Medicaid fee-for-service population must list their National Provider Identifier (NPI) number on the Medicaid exclusion file, which indicates to the state Medicaid agency that it should exclude drugs dispensed by that hospital from receiving a Medicaid rebate. Other states use billing modifiers to identify 340B drugs, while some states (most notably, Oregon) use a retrospective approach to identify claims that should be excluded from receiving Medicaid rebates. HRSA does not allow covered entities to dispense 340B drugs in the contract pharmacy setting in Medicaid FFS unless the covered entity, the contract pharmacy, and state create a plan to prevent duplicate discounts and submit this plan to HRSA.19 On top of these approaches to prevent duplicate discounts, the 340B statute authorizes HRSA to sanction 340B hospitals if they violate statutory provisions, including the prohibition on duplicate discounts, through repayment of overpayments and potential removal from the program for systematic and egregious violations. Because there are rigorous prevention and enforcement mechanisms in place regarding Medicaid and 340B duplicate discounts, it is unnecessary for the rebate models to be extended to preventing duplicate discounts in this context. 17 HRSA, 340B Rebate Model Pilot Program (Archived Webpage). December 17, 2025. 18 340B Statute. Sec. 340B(a)(5)A. 19 Notice Regarding 340B Drug Pricing ProgramContract Pharmacy Services , 75 Fed. Reg. at 10278. Administrator Engels April 20, 2026 Page 14 If HRSA were to nonetheless proceed with implementation of a rebate model program, the program should be narrowly crafted and limited in scope. Under a rebate model program, the only acceptable reason for denying a 340B rebate should be in achieving MFP deduplicationthat is, if a pharmacy already received a MFP rebate for a drug included in the MDPNP and the MFP is lower than the 340B ceiling price, then the covered entity would not receive a 340B rebate. In addition to limiting the reasons for which rebates can be denied, HRSA must provide protections including a robust, impartial dispute and appeal process for covered entities. In addition to the delayed receipt of 340B discounts, a rebate model pilot program would leave the determination of which drugs are 340B eligible up to the manufacturer. This shift could result in many 340B claims being denied at the manufacturers discretion, with no oversight or appeal mechanism available to 340B hospitals. The AAMC recommends that HRSA outline a robust appeals process and additional details on how the agency plans to conduct oversight of a pilot program to ensure that manufacturers are remitting 340B rebates on time and not denying 340B rebates. A process to dispute denied claims should also include the ability to dispute denials in bulk, instead of individually. Disputing rebate denials individually is a manual and labor- intensive process. Allowing 340B covered entities to submit bulk disputes would streamline this process and be a more efficient use of limited staff time and resources. The decision to pay or deny a 340B rebate, and the ability to analyze covered entity claims, would fall with drug manufacturers and the third-party platforms they choose to use for the rebate models. In enacting the 340B statute, Congress delegated responsibility for overseeing and enforcing the 340B program solely to HRSA, which resides under HHS. For example, the 340B statute provides HHS with audit authority, as well as discretion to establish a mechanism for avoiding duplicate discounts. While manufacturers are permitted under the statute to audit covered entities, the ultimate decision to sanction a covered entity for violation of 340B program requirements is made by HHS.20 The statute further provides that the Secretary shall provide for improvements in compliance by covered entities with the requirements of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5).21 Allowing manufacturers to assume oversight responsibilities of the 340B program would result in a compliance nightmare for HHS and covered entities, ultimately undermining program integrity efforts and circumventing statutory authority. In HRSAs previously finalized 340B Rebate Model Pilot Program, there was no formal mechanism offered for 340B covered entities to appeal or file a complaint if manufacturers improperly denied rebates. The only process HRSA made available to covered entities was for them to try to resolve any issues directly with manufacturers, and if they were unable to receive a favorable resolution, to send an email to a designated HRSA inbox. Unfortunately, relying on manufacturers to resolve issues in good faith is not a transparent or reliable method of ensuring 20 340B Statute. Sec. 340B(a)(5)A. 21 340B Statute. Sec. 340B(d)(2) (emphasis added). Administrator Engels April 20, 2026 Page 15 program integrity. In their experiences using manufacturer-chosen claims submissions platforms, covered entities have reported issues communicating with these third-party vendors and receiving an explanation for improperly denied claims. AAMC members have reported that 340B ESP, which is a platform drug manufacturers use to collect contract pharmacy claims data from covered entities, has often denied payment for claims, incorrectly alleging that submitted claims for payment were inaccurate or incomplete. When these hospitals have attempted to resolve these issues with 340B ESP, they have encountered delays in communication and insufficient explanations as to the reasons for the denials. The Beacon platform, which is the platform manufacturers are expected to use for rebate models, is operated by the same parent company as 340B ESP and early indications suggest that Beacon is not ready to operationalize a rebate model. These concerns highlight the need not only for a neutral third-party vendor (rather than one chosen by and closely affiliated with drug manufacturers) but also a formal appeals process. The move towards drug manufacturer operated rebate models will ultimately allow manufacturers to assume greater oversight responsibilities of the 340B program by leaving determination of which drugs are 340B eligible to the manufacturers. However, without explicit instruction on how HRSA intends to oversee these rebate models or allow covered entities to appeal such denials, there is little to ensure drug manufacturers compliance with the requirements of a HRSA-approved rebate model program. As currently outlined, manufacturers will be the ones to evaluate each claims 340B eligibility before determining whether to provide a credit equal to the difference between the WAC and the ceiling price. Shifting this responsibility also opens up the possibility that drug manufacturers could conduct their own patient definition reconciliation with little to no transparency, removing covered entities and HRSA from such efforts. Some drug manufacturers have already expressed an interest in this kind of reconciliation effort by utilizing rebate models to require covered entities to submit records establishing a relationship between a patient and the covered entity that satisfies the manufacturers own version of a patient definition, which differs from HRSAs longstanding patient definition.22 Leaving oversight of the rebate models to the drug manufacturers could result in many 340B claims being denied at the manufacturers discretion, with no oversight or appeal mechanism available to 340B hospitals, leaving 340B hospitals, who serve some of the most vulnerable patients, at even greater financial risk. Manufacturers affinity towards rebate models ultimately seek to upend HRSAs compliance responsibilities related to the 340B program and replace them with a patchwork of manufacturer policies addressing purported program integrity issues. Even without an explicit dispute process for these models, we expect an increase in claims from covered entities of manufacturers charging above ceiling price if manufacturers do not provide rebates on some 340B drugs. If manufacturers do have legitimate concerns about program integrity, they can use existing mechanisms authorized by the 340B statute, such as manufacturer 22 Gluck, Adam. Sanofi, Sanofi Tackles 340B Abuse with Innovative Credit Model (November 22, 2024) Administrator Engels April 20, 2026 Page 16 audits or the administrative dispute resolution process to address these concerns rather than fundamentally altering the 340B program. DATA COLLECTION BY COVERED ENTITIES HRSA asks about specific pharmacy and medical claims elements that should be collected as part of a rebate model, whether these data elements are currently available or readily available, the sources of these data, whether the data are already being furnished to third parties, and guardrails to mitigate privacy and security concerns (p. 7290). In implementing rebate models, manufacturers are likely to require covered entities to submit claims data to them through their selected vendors, such as the Beacon platform associated with Second Sight Solutions or the Kalderos Truzo platform. HRSA must engage in oversight of these vendors and their contracts with drug manufacturers to ensure data protections. Based on past experience with third-party vendors and more recent experiences with the Beacon platform, we are concerned the terms and conditions of the contracts 340B hospitals will be compelled to sign will be non-negotiable and contain terms unfavorable to hospitals. Hospitals are typically required to sign these contracts without the ability to meaningfully revise the contracts to protect their patients sensitive data. Many of the vendors operating in this space have worked hand in hand with drug manufacturers for years to craft these proposed rebate models, drawing questions and concerns from other stakeholders. HRSA should limit the data elements covered entities must submit to receive a rebate. In the previously finalized Rebate Model Pilot Program, HRSA had approved 12 pharmacy claims data elements and 14 medical claims data elements that would have to be completed for every claim. Manufacturers could achieve their goal of deduplicating claims using just prescription number and 340B ID. Medical claims in particular pose additional challenges and should be excluded from a rebate model. Medical claims submission introduces unique challenges, particularly due to the timeframe for submitting medical claims, which are physician administered drugs, as well as the complexity of medical claims. Often, the information to submit a claim is not available for weeks or months later and the claim contains multiple claim lines representing potentially multiple drugs and services. And, payers such as Medicare, allow up to a year to submit claims data for payment, meaning hospitals are accustomed to these timelines to gather the data necessary to submit medical claims. The quantity of medication administered to the patient field, which presumably requires the quantity of billable units, poses unique challenges and requires crosslinking to national drug code (NDC). Often, the unit of measure required by the manufacturer differs from the unit of measure captured by the hospital in its IT systems. The data that are required for the medical claims elements are housed in the hospitals electronic health record (EHR) system and are not always tracked at the NDC level, because the hospitals EHR often has its own classification system to group similar drugs. Multiple drugs, such as different brands of a given drug, can be grouped into one classification in the EHR, although they each have unique NDCs. Administrator Engels April 20, 2026 Page 17 Extracting the information in the EHR and attempting to match it to an NDC is a manual and time-intensive process. Further, under CMS CY 2026 PFS final Rule, CMS finalized a voluntary claims data repository inclusive of five data elements to identify a claim as being 340B or not. Under this proposal, only the NDC, date of service, prescription or service reference number, fill number, and the dispensing pharmacy NPI would be needed to determine if a claim was 340B eligible or not.23 Based on this, we urge HRSA to reconsider whether all 12 (or 14 for medical claims) of the required data elements are necessary for identifying claims as eligible for 340B pricing under these rebate models. We agree with the HRSA and CMS decision to exclude a requirement to report this type of data and encourage the agencies to continue to exclude purchasing data from data collection efforts. In order to streamline data collection, we ask HRSA to consider aligning the data elements required with those under the voluntary claims data repository. To the extent possible, the agency should take all appropriate steps to streamline and simplify the method and amount of data covered entities need to report to effectuate a rebate model. REQUIRED REPORTING HRSA solicits feedback on data manufacturers should share with HRSA, and which of this data HRSA should make public, to ensure manufacturers are complying with a rebate model program. If HRSA pursues a rebate model, its robust oversight of the program will be imperative to hold manufacturers accountable for honoring their obligation to provide 340B prices to covered entities and to provide rebates as expeditiously as possible. Transparency will be critical in evaluating the impact of rebate models on access to 340B pricing. Therefore, if HRSA were to implement a rebate model, it should require manufacturers to provide data on the time it takes to process claims, the percentage of submitted claims successfully processed, the percentage of disputed claims, the percentage of submitted claims that are denied, the percentage of disputed claims that are denied, and the basis for denial of claims. Manufacturers should provide this information to HRSA both at the claim and provider level and also in aggregated format. For public reporting purposes. HRSA could publish aggregated information and information broken down by covered entity type and by drug. 340B PROGRAM INTEGRITY AND OTHER POTENTIAL BENEFITS OF A REBATE PILOT HRSA solicits feedback on the benefits of a rebate model and how it would affect the integrity of the 340B program. The AAMC does not believe rebate models are necessary to ensure 340B program integrity. As we have cited throughout the letter, the costs of 340B rebate models to covered entities outweigh any marginal benefit, particularly given the availability of less disruptive alternatives. To date, there have not been documented, widespread program integrity issues that require a fundamental restructuring of the 340B program. To the extent that there are specific, targeted instances of noncompliance with the 340B statute, HRSA currently has the enforcement tools at its disposal. 23 90 FR 32643 Administrator Engels April 20, 2026 Page 18 Under the 340B statute, covered entities are responsible for complying with two program integrity requirements: first, the prohibition on Medicaid duplicate discounts; and second, the prohibition on diversion, meaning 340B drugs should only be dispensed or administered to patients of the covered entities. HRSA, state Medicaid agencies, covered entities, and manufacturers have rigorous controls in place to ensure 340B hospitals are operating within the confines of the 340B statute. As part of regular program integrity efforts, HRSA conducts annual audits of covered entities and publishes its audit findings. In addition, 340B hospitals maintain robust internal controls, such as conducting internal audits, maintaining patient records to support the patient definition, and collaborating with state Medicaid agencies to identify Medicaid claims. HRSA should continue to build on these processes instead of introducing new rebate models that are unnecessary to 340Bs core program integrity goals. Conclusion Thank you for HRSAs continued support of the 340B program and for ensuring program integrity for all 340B stakeholders. 340B hospitals remain invested in and share HRSAs goal of ensuring program integrity through adopting robust program safeguards. To summarize, we urge HRSA to continue to preserve the benefit of the 340B program to covered entities by allowing 340B to continue to operate as an upfront discount program instead of through retrospective rebates. The use of rebate models would create compliance difficulties for HRSA and covered entities and would severely disrupt the flow of 340B savings to academic health systems and teaching hospitals. Ultimately, these rebate models would harm the ability of these providers to invest 340B savings into the programs and specialized health care services they uniquely provide to vulnerable patients. Of most concern, the patients in these health systems communities would be harmed by the inability to continue these programs and specialized services. We would be happy to work with HRSA on any of the issues discussed or other topics related to the 340B program. If you have questions regarding our comments, please feel free to contact my colleague Shahid Zaman (szaman@aamc.org). Sincerely, Jonathan Jaffery, M.D., M.S., M.M.M., F.A.C.P. Chief Health Care Officer AAMC cc: David Skorton, M.D., AAMC President and Chief Executive Officer
HRSA-2026-0001-1915Tug River Health Association, Inc.2026-04-20T04:00Z44,101 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of TUG RIVER HEALTH ASSOCIATION, INC, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Tug River Health Centers anticipates a loss of $750,00 million from entity-owned pharmacy operations and 27% reduction in saving for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Tug River Dental services offered at Tug River Dental Clinic, A School Based Health Center and Mobile unit are more than 80% supported by the 340B savings. A reduction in savings will result in a loss of dental services to children and patients in rural areas. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 2 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Tug River Health Association, Inc in particular, this means it will impact: Over 6,000 chronically ill patients that have an average of 6.5 prescriptions annually Decrease our ability to keep administrative cost low, which currently is 10% of current personnel cost Reduce our ability to provide over 3,000 dental procedures annually to children and patients in poverty stricken rural areas, reduce our ability to provide Community Health Work services to reduce social determinants of health and reduce medication compliancy for our chronically ill uninsured patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Over 80% of the patients served at Tug River Health Association, Inc are eligible for sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: TUG RIVER HEALTH ASSOCIATION, INC anticipates needing 1.3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, TUG RIVER HEALTH ASSOCIATION, INC anticipates an increase of 100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Tug River Health Association, Inc. anticipates an additional .5 FTE to meet reporting demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. The estimate for our organization is $32,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Twenty hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Tug River Health Association, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6,400 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Our one-time cost will be $12,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with twelve pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across twelve different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in McDowell County, West Virginia with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Tug River Health Association, Inc. provides discounted savings to our uninsured and underinsured patients, often at the expense of the organization. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $175,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends 80,000 to purchase these same drugs at the 340B ceiling price. This represents a 118% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TUG RIVER HEALTH ASSOCIATION, INC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile dental service provided over 2.400 procedures in rural areas. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker to directly assist our patients in their well-being. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 611 uninsured patients from rationing their insulin or heart medication. 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. TUG RIVER HEALTH ASSOCIATION, INC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, TUG RIVER HEALTH ASSOCIATION, INC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $50,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. TUG RIVER HEALTH ASSOCIATION, INC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $7,950 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $320,000 annuallyfunds that are currently dedicated to Dental, Community Health Worker and Peer Recovery Coach. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on TUG RIVER HEALTH ASSOCIATION, INC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays Tug River Health Association, Inc urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $10,000 monthly. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion TUG RIVER HEALTH ASSOCIATION, INC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. TUG RIVER HEALTH ASSOCIATION, INC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. TUG RIVER HEALTH ASSOCIATION, INC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Cheryl Mitchem, Chief Development Officer, chmitchem@tugrivermedical.org Sincerely, Andrea Thornton TUG RIVER HEALTH ASSOCIATION, INC
HRSA-2026-0001-1916Inova Health2026-04-20T04:00Z25,947 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request For Information: 340B Rebate Model Program Dear Administrator Engels, On behalf of Inova Health (Inova), we appreciate the opportunity to respond to the Health Resources and Services Administration's (HRSA) Request for Information (RFI) on the 340B Rebate Model Program (rebate model). Inova is the leading nonprofit healthcare provider in Northern Virginia and the Washington, D.C. metropolitan area, caring for more than 1 million unique patients annually across a comprehensive network of hospitals, primary and specialty care practices, emergency and urgent care centers, and outpatient services. As a nonprofit organization, Inova is committed to providing quality healthcare services regardless of a patient's ability to pay, and the 340B program is a critical component of Inova's ability to sustain this mission and continue delivering world-class healthcare to the communities it serves. Inova has serious reservations about the implementation of a rebate model under the 340B program. A transition to a rebate-based structure would represent a fundamental departure from how the program has functioned for more than three decades, and in Inova's view, such a departure is inconsistent with the 340B statute and longstanding agency practice. Even a narrowly scoped rebate model would introduce substantial administrative and financial burdens on safety-net providers like Inova, diverting resources that are currently directed toward patient care, which is directly at odds with the program's statutory purpose and intent. Inova is also concerned that the current RFI, in the absence of a concrete and detailed program proposal, limits the ability of stakeholders to provide meaningful and reliable input. Without a specific framework to evaluate, the information gathered through this process may not be sufficient to support sound and well-informed policymaking. Should HRSA move forward with any rebate model, Inova strongly urges the agency to develop a comprehensive proposal and engage stakeholders in a transparent and collaborative process prior to implementation. Inova welcomes this opportunity to document the operational and financial impact a rebate model would have on our organization and the vulnerable patients we serve. We urge HRSA to consider an approach that strengthens rather than undermines this vital safety net program. Current 340B Administrative Costs In addition to expense associated with employing 4 FTEs dedicated to managing Inovas 340B program, there are substantial administrative expenses associated with compliance and operation of the program that will be exacerbated by a potential rebate model. The three primary drivers of Inova's 340B administrative cost structure, ranked by relative significance, are as follows: Staffing: The 4 FTEs dedicated exclusively to the 340B program constitute the most significant cost driver, encompassing the day-to-day operational management, compliance oversight, and transaction monitoring that the program demands. Third-party administrator fees: Fees paid to third parties such as external audit firms represent the second largest cost category, reflecting the ongoing investments required to maintain program integrity across all dispensing arrangements. Technology and systems: Licensing and maintenance costs for split-billing and compliance platforms round out the primary cost drivers, supporting the continuous claims validation and auditing functions that are essential to responsible and compliant program management. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Inova has assessed the operational lift required to participate in a rebate model and estimates at least 160 hours of startup effort. This estimate is based on the original 10 drugs selected by HRSA for the Rebate Model Pilot Program proposed in 2025. In addition to these startup costs, the ongoing operational burden is an even larger driver of new and increased administrative and operational costs caused by a rebate model. These hours reflect a cross-functional effort involving personnel from IT, legal, compliance, the 340B program team, regulatory affairs, and finance, representing a broad organizational investment that extends well beyond the 340B program team alone. On an ongoing basis, Inova estimates that rebate-related administrative activities would require approximately 3-4 hours per day, encompassing data collection, manual validation, submission, and reconciliation across multiple disparate systems. This recurring burden is in addition to the cost of engaging third-party vendors to support portions of the rebate management process, which Inova anticipates will be necessary given the complexity and volume of transactions involved. The addition of a separate rebate filing process for drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) would introduce yet another parallel workflow, further compounding the staff hours and operational complexity required. These incremental costs and hours are entirely new and would be layered on top of Inova's existing 340B administrative infrastructure, diverting resources that currently support patient care and program integrity. Offsetting Administrative and Operational Costs Under a Potential 340B Rebate Model Pilot Program Inova does not believe there is a fully adequate mechanism to offset the administrative and operational costs that a rebate model would impose on covered entities. However, if HRSA were to pursue an offset structure, the most direct and equitable approach would be to require manufacturers to bear all administrative costs associated with implementing and operating the rebate model, consistent with the principle that the rebate model is a manufacturer-driven mechanism. This could include direct reimbursement to covered entities for documented one-time startup costs, ongoing per-claim processing fees paid by manufacturers to covered entities to offset recurring administrative burden, and reimbursement of any interest charges or financing costs incurred by covered entities as a result of purchasing drugs at WAC while awaiting rebate reimbursement. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program Implementation of a rebate model would require both the addition of new staff and the reallocation of existing employee hours away from their current responsibilities. Inova estimates the need for approximately 2 permanent additional FTE to manage the data collection, submission, validation, and reconciliation activities required under a rebate model. Beyond new hires, existing 340B program staff would be required to absorb additional daily administrative functions, with recurring rebate-related work estimated at 3-4 hours per day. This reallocation would divert existing staff from critical program oversight and compliance monitoring they currently perform. Even where third-party vendors are engaged to assist with portions of the rebate process, internal staff time is still required to oversee, validate, and manage vendor work, meaning the staffing burden exists regardless of the level of vendor engagement. The cumulative effect of these staffing demands would represent a significant operational strain that reduces the time and resources available to support patient care and program integrity. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Implementing a rebate model would require significant new or modified IT infrastructure at Inova. Inova's 340B transaction data currently resides across multiple disparate systems covering in-house pharmacies, clinic-administered medications, mixed-use areas, and clean sites, none of which were designed or configured to support rebate submission workflows. In some cases, Inova would engage software vendors to collect, submit, and reconcile rebate data, a functionality not currently utilized and that would represent a net new cost to the organization. In other cases, Inova would need to build internal reports from scratch and establish entirely new processes for validating, submitting, and reconciling that data, workflows that are not currently required or performed under the upfront discount model. In either approach, substantial investment in new infrastructure, configuration, testing, and ongoing maintenance would be required. The complexity is further compounded by the manual intervention needed to reconcile data inconsistencies across systems, such as mismatched units of measure and missing data fields, which cannot be fully automated. Collectively, these IT demands represent a significant one-time and ongoing cost burden that does not exist under Inova's current administrative infrastructure. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program The most significant additional cost Inova would incur under a rebate model is the increased drug acquisition cost resulting from purchasing the 25 IRA drugs at Wholesaler Acquisition Cost (WAC) rather than at the upfront 340B discounted price. Inova estimates this would result in approximately $13.5 million in additional annual drug acquisition costs. Inova maintains the most generous charity care policy of any health system operating in our region or state and has rapidly expanded care sites dedicated exclusively to serving patients who are uninsured or underinsured in the communities they call home. Adding substantial recurring financial burden to comply with an unnecessary rebate model diverts resources from initiatives like these that further Inovas primary non-profit, community-focused mission. Payment Timing and Potential Cash Flow Impacts Under Inova's current wholesaler agreement, payment terms apply uniformly to both 340B and non- 340B drug purchases with no differentiation between the two. Inova currently operates on a pre-pay deposit structure with invoices due every 15 calendar days, and pre-payment incentives are available that directly reduce Inova's net drug acquisition cost. Under a rebate model limited to the 25 IRA drugs, Inova would be required to purchase these drugs at WAC rather than at the upfront 340B discounted price, resulting in approximately $13.5 million in additional annual drug acquisition costs. Based on Inova's quarterly pre-pay deposit structure, this translates to an estimated increase of approximately $3.375 million per quarter in additional pre-pay deposit requirements. These increased deposit and invoice amounts must be funded within the same contracted payment window, while manufacturer rebates based on Inova's current experience with MFP effectuation are taking 30 days or more to process, creating a direct and unavoidable cash flow gap that does not exist today. There are no alternative payment arrangements under the current wholesaler agreement that could adequately offset these impacts. Should HRSA expand the rebate model beyond IRA drugs to a broader set of 340B products, the financial impact on Inova would be substantially greater. To protect covered entities from these risks, Inova recommends that HRSA require manufacturers to strictly adhere to the 10 calendar day rebate payment window with automatic civil monetary penalties for late payments, establish a standardized payment clock that begins upon complete claim submission under HRSA-defined standards and cannot be paused through repeated manufacturer requests for additional information, and require interim payments on high-cost claims to prevent covered entities from carrying large WAC-based balances for extended periods. Rebate Denials Inova strongly believes that any potential 340B Rebate Model Pilot Program must establish clear and enforceable guardrails around rebate denials to protect covered entities from inappropriate or arbitrary manufacturer denials. Manufacturer denials should be strictly limited to circumstances where a duplicate 340B rebate has been demonstrably provided to another covered entity on the same claim. Any broader denial authority would create significant financial risk for covered entities and undermine the integrity of the rebate model. Inova is particularly concerned about the adequacy of existing dispute resolution mechanisms to address rebate delays and denials. Directing covered entities to resolve rebate disputes through the existing 340B Administrative Dispute Resolution process would be wholly inadequate given that ADR proceedings can take up to one year to reach a decision, during which time covered entities would be required to float significant sums of cash at WAC well beyond any reasonable payment window in addition to the substantial and currently unnecessary legal expense associated with pursuing the 340B pricing manufacturers are statutorily obligated to offer. If rebate delays and denials are treated as overcharges, statutory limitations may further restrict the scope of ADR review, leaving covered entities without a meaningful avenue for timely resolution. A general email address or informal complaint mechanism would similarly be insufficient given the financial implications of rebate delays on covered entity operations. Inova therefore strongly urges HRSA to establish a separate, dedicated dispute resolution process specifically for rebate-related claims that includes expedited review timelines, a designated point of contact for receiving and following up on complaints, and specific adjudication timelines that are commensurate with the financial stakes involved. Denial Documentation Requirements Any rebate denial under a potential 340B Rebate Model Pilot Program should include comprehensive documentation to enable covered entities to understand and appropriately challenge denials. At a minimum, denial documentation should include a detailed narrative explanation of the basis for the denial, supporting primary source materials such as relevant claims information and identification of any other covered entity that received a rebate on the same claim, and an attestation by a named manufacturer representative with direct contact information to facilitate timely resolution of incorrect denials. Inova also recommends that HRSA develop a standardized denial form to streamline the administrative process and ensure consistency across manufacturers. Additionally, HRSA must clarify that manufacturers are prohibited from denying rebates for contract pharmacy claims based on their own unilaterally imposed contract pharmacy restrictions. Since 2020, numerous manufacturers have imposed unlawful restrictions on 340B discounted pricing through contract pharmacies, creating significant administrative and financial burdens for covered entities nationwide. Allowing manufacturers to leverage a rebate model as a mechanism to enforce these restrictions would compound the harm already caused and must be explicitly prohibited by HRSA as part of any rebate model framework. Data Collection by Covered Entities Current Data Collection Inova maintains and retains 340B program data across a variety of systems spanning our in-house pharmacies, clinic-administered medications, mixed-use areas, and clean sites. Inova engages third-party vendors to support several critical program functions including split-billing, contract pharmacy qualifications, in-house pharmacy qualifications, compliance monitoring, and audit support, all of which involve the ongoing collection and retention of 340B transaction data to ensure program integrity and compliance with applicable HRSA requirements. Inova employs multiple layers of oversight to ensure the accuracy, completeness, and consistency of its 340B program data. Inova's 4 dedicated 340B FTEs conduct regular audits across its systems to ensure that 340B drugs are dispensed to eligible patients and that no duplicate discounts have occurred. Third- party vendors who assist Inova with split-billing, contract pharmacy, and in-house pharmacy and claims management also conduct their own checks and balances to ensure that only 340B eligible claims are qualified. In addition, Inova engages independent third-party auditors to conduct a comprehensive audit of its 340B program on an annual basis. Change in Data Collection A rebate model would significantly change Inova's current data collection activities, introducing both one-time and ongoing changes. On a one-time basis, Inova would need to build entirely new reports from scratch, configure new data submission workflows, and establish validation and reconciliation processes that do not currently exist under the current structure. These build-out activities would require a cross- functional team effort spanning IT, legal, compliance, 340B program staff, regulatory affairs, and revenue cycle personnel, requiring at least 160 hours of one-time startup effort. On an ongoing basis, daily collection, manual validation, and submission of rebate claims data would be required across systems not designed for this purpose. Additionally, duplicate discount monitoring would become significantly more complex, as Medicaid claims would initially be billed at WAC and subsequently rebilled at the 340B price once the manufacturer rebate is received. This process is inherently error prone, further compounding Inova's ongoing data collection and compliance burden. Minimum Necessary Data Elements for Pharmacy and Medical Claims Under a Potential 340B Rebate Model Pilot Program Inova strongly believes that data submission requirements under any potential 340B Rebate Model Pilot Program must be narrowly tailored to only those elements that are essential for identifying and preventing duplicate discounts under the IRA. Collecting data beyond what is strictly necessary for this purpose introduces avoidable privacy risk, administrative burden, and operational complexity without any corresponding program integrity benefit. For pharmacy claims, Inova recommends that required data elements be limited to claim ID, date of service, 11-digit NDC, and quantity dispensed, applicable to Medicare Part D claims only. Payer information should be excluded entirely from submission requirements. Under the IRA, manufacturers already receive claims information through the Medicare Transaction Facilitator, making any additional payer data submission by covered entities wholly redundant. The data specifications from the original rebate pilot included fields such as prescriber ID, service provider ID, BIN, and PCN numbers, none of which serve any meaningful purpose in IRA duplicate discount identification and each of which adds unnecessary complexity and privacy exposure to the submission process. With respect to medical claims, Inova strongly urges HRSA not to require medical claims data submission as part of any rebate model at this time. The 25 IRA drugs currently under consideration are all Medicare Part D drugs, and Medicare Part B drugs will not be subject to Maximum Fair Price under the MDPNP until 2028 at the earliest. If the stated objective of the rebate model is deduplication under the IRA, there is simply no programmatic justification for collecting non-Part D claims data, including health plan IDs, payer names, or any other payer-related fields. Inova recommends that HRSA revisit medical claims data requirements only when and if Medicare Part B drugs are incorporated into a future iteration of the rebate model. Safeguarding Patient Information: Privacy and Security Recommendations for a Potential 340B Rebate Model Pilot Program Inova has significant concerns regarding the privacy and security of patient data under a rebate model. The current framework allows each manufacturer to establish its own rebate submission process using its own IT platform and requiring its own set of data elements, meaning covered entities would be required to submit claim level data to multiple different platforms that are neither neutral nor independent. Many of these platforms are owned by or closely affiliated with entities that have a history of working on behalf of drug manufacturers, creating meaningful conflicts of interest and risk that claims level data could be used for purposes outside the scope of the rebate model pilot program. To address these concerns, Inova strongly recommends that HRSA designate a single neutral third-party clearinghouse for all rebate data submissions, which would minimize administrative burden, limit manufacturer access to patient data, and allow HRSA to more effectively oversee the program. HRSA should also impose strict guidelines governing how submitted data may be used, limiting use exclusively to rebate model administration, and establish meaningful penalties for any manufacturer or vendor that uses submitted data for any other purpose. Manufacturer Efforts to Avoid Medicaid Duplicate Discounts Current Medicaid Duplicate Discount Prevention Prior to January 1, 2026, Inova's duplicate discount prevention practices for Medicaid were well- established, largely automated, and required minimal manual intervention. Claim-level identifiers were employed for all Medicaid transactions, and 340B-eligible claims were automatically flagged with the appropriate claim-level identifier as mandated by state Medicaid requirements. This process effectively prevented duplicate discounts by ensuring that 340B-eligible Medicaid claims were consistently and accurately identified at the claim level. Administrative Changes and Challenges in MFP Non-Duplication Compliance Since January 1, 2026 Since January 1, 2026, Inova staff regularly reviews claims through the manufacturer rebate portal to identify and correct instances where 340B-eligible claims have been incorrectly classified as non-340B. Inova has also encountered numerous instances where manufacturers have not correctly applied the non- duplication provision, resulting in non-340B claims being incorrectly identified as 340B in the manufacturer rebate portal, effectively denying access to the MFP on those claims. Upon identifying these discrepancies through its claims review process, Inova has been forced to actively dispute these claims directly with manufacturers to access the 340B discount we are statutorily entitled to receive. This dispute process has been particularly burdensome, as manufacturers are arbitrarily flagging 340B invoices and requesting claim-level data to support dispute resolution. The only path to recovering the rebate on these disputed claims is submitting 340B claims, predominantly non-Part D, to a separate manufacturer portal so that the invoice number can be dissociated from the claim and the rebate processed accordingly. This process is entirely new, highly manual, not scalable at Inova's transaction volume, and is consuming a significant and unanticipated amount of staff time with no clear or consistent resolution timeline across manufacturers. Required Reporting Inova urges HRSA to establish comprehensive, standardized manufacturer reporting requirements as a foundational element of any potential 340B Rebate Model Pilot Program. Reporting should be submitted to HRSA on a monthly basis, with quarterly aggregate summaries providing a higher-level view of program performance. Inova recommends that manufacturer reporting include, at minimum, the following data elements: Total rebate requests received, broken down by number of claims and corresponding dollar amounts Total rebates paid, including payment amounts and adherence to the required 10 calendar day payment window Total rebates paid outside of the required payment window, with corresponding claim counts, dollar amounts, and documented reasons for the delay Total rebates denied, including claim counts, dollar amounts, and specific documented rationale for each denial Denial rates segmented by claim type, drug, and covered entity type Total good faith inquiries currently pending, including the number of associated claims and the duration each inquiry has remained unresolved Total good faith inquiries resolved, including resolution timelines, outcomes, and any manufacturer or platform-level operational issues that contributed to claim processing delays or errors Regarding public disclosure, Inova recommends that HRSA make the following information publicly available on a quarterly basis to support meaningful program transparency and stakeholder accountability: Aggregate rebate payment and denial rates reported by manufacturer and by drug Consolidated denial reason data across all participating manufacturers Average rebate payment timelines by manufacturer The total number and dollar value of outstanding good faith inquiries, as well as any identified patterns of non-compliance with payment timeliness requirements Thank you for your serious consideration of Inovas concerns regarding the proposed rebate model. We understand the important role of 340B in stretching scarce federal resources to support the health of the community we serve. As such, we take our role as a covered entity very seriously and we are committed to operating a responsible and compliant program. Given the substantial administrative burden presented by the proposal and its diversion from the original program purpose and intent, we urge HRSA to consider a different approach that strengthens, rather than undermines, this successful program. Sincerely, Melanie Massiah-White Chief Pharmacy Officer Inova Health
HRSA-2026-0001-1917Kateryna Zahorodnia · Mt Morris, PA, United States2026-04-20T04:00Z314 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Rural patients experience higher rates of diabetes, hypertension, and heart disease. Making essential medications less affordable jeopardizes long-term disease control and increases avoidable hospitalizations.
HRSA-2026-0001-1918Katherine Sill · Greensboro, PA, United States2026-04-20T04:00Z47,494 chars
As Director of Administration and Information Technology at Cornerstone Care, an FQHC in southwestern PA, I work closely with our Pharmacy and 340B administrative teams and am familiar with the program and compliance processes we follow. From an administrative and information technology standpoint, the proposed 340B Rebate Model Pilot would impose a substantial and duplicative burden on community health centers by requiring the creation of complex, resourceintensive systems to replace an existing, functional upfront pricing structure. As described in the attached brief, CHCs would be forced to invest in new pharmacy software configurations, thirdparty administrator enhancements, data conversion processes (including digitizing paperbased clinicadministered drug records), and ongoing reconciliation and disputemanagement workflows to comply with multiple manufacturerspecific rebate requirements. These changes would necessitate significant additional staffing, external vendor support, and IT infrastructure upgrades, while introducing ongoing risks related to data integrity, inconsistent submission standards, delayed or denied rebates, and lack of realtime pricing visibility within pharmacy systems. Collectively, these requirements would divert limited administrative and IT capacity away from patient care and compliance activities that CHCs already perform under robust federal oversight, generating operational complexity and cost without improving program integrity or efficiency. I urge HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot. I believe the rebate model unfairly places all of the risk and burden on safety net providers will giving control of the program to manufacturers. An alternative like a neutral Claims Clearinghouse is a much fairer and effective way of eliminating duplicate discounts. Our 340B claims are the only claims that DON'T go through a clearinghouse - why wouldn't we use a clearinghouse model that is already proven across other areas of healthcare? Also, the fact that bulk numbers of comments are being submitted ALPHABETICALLY indicates to me that the manufacturers are paying patients to comment, and possibly using bots to submit their comments. This is just another example of how big corporate manufacturers have huge resources to manipulate the industry and the conversation at the expensive of (and to profit off the backs of) patients and nonprofit safety net providers. Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-1919Mountain Park Health Center2026-04-20T04:00Z45,882 chars
See attachment which urges HRSA to exempt Community Health Centers from the rebate model to ensure continued access to life saving medications and services without the financial and operations impact to our communities. 40 h. MO UN TAIN PARK HEALTH CENTER April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mountain Park Health Center ("Mountain Park"), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Mountain Park Health Center anticipates a loss of $1,000,000 from entity-owned pharmacy operations and a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Each year, more than 100,000 members of the community receive high-quality primary health care at one of Mountain Park's 11 clinics located in underserved areas across metropolitan Phoenix. Mountain Park serves patients from all walks of life through all stages of life. Mountain Park was the first Joint Commission accredited Federally Qualified Health Center in Arizona, achieving ambulatory health accreditation in 1999 and Primary Care Medical Home accreditation in 2014. Primary care services provided directly at Mountain Park include medical care for adults; pediatric care for infants, children, and adolescents; obstetrical and gynecological care for women; and integrated behavioral health care for all patients. Mountain Park also provides dental services at three clinics, and full-service pharmacies at two clinics. Other professional services provided on-site include nutrition and dietitian services, and a wide array of enabling services that support primary care, including eligibility assistance as well as language and translation programs. The organization is committed to meeting each patient's physical and mental health care needs, including prevention, wellness, acute care, and chronic care services. Sliding fees discounts cover all services provided at Mountain Park. As a Patient Centered Medical Home, Mountain Park actively supports the patient's ability and desire to learn to manage their own care. Each patient has a designated care team which includes the patient at the center, a primary care provider (PCP), non-provider personnel (e.g., medical assistants and case managers), and same day access to integrated behavioral health providers and registered dietitians. Same day access to a clinical pharmacist is also part of the patients' care teams. These teams provide health care services and self-management support, arrange for needed resources, and provide care coordination or other services. I. We Strongly Urge HRSA To Exempt CRCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Mountain Park Health Center in particular, this means it will impact: Over 220,000 340B claims and over 103,000 patients Our already exorbitant 340B Program administration fees nearing $1 million Our 340B Reinvestment is directly tied to providing services for our underserved patient population to ensure equitable health care for all. Our Reinvestment supports our medication management, diabetes/anticoagulation, obesity management, hypertension, medication delivery, discount medication for sliding fee patients, medication disposal services, chronic disease state management and many other services that Mountain Park provides for our patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the fmancial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other 2 medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to rnanage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity! This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. hups://www.ahajourn al s.ora/doi/ndf/10.11 6 I /circulati on ah a. I 23.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. httrys://www.samb sa.ilov/data/data-we-collect/nsduh-national-survevdrug-use-and-health/nati onal-rel eases 3 resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The sarne patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vuhierable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a fmancial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatrnent for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In its fiscal year 2025, Mountain Park Health Center provided $7,144,068 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffmg Impact: Mountain Park Health Center anticipates needing 2.00 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Mountain Park Health Center anticipates an increase of around $500,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand ofreporting 340B rebate claims.7 Mountain Park estimates an additional 2.0 FTE would be needed to maintain the rebate model and the complexities of reporting it would require including the dynamic changes that are constantly occurring at manufacturers' unilateral demand. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Mountain Park estimates the additional 2.0 FTE that would be required would add to Mountain Park's annual cost of around $220,000 including salary, benefits and fringe. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Mountain Park estimates 60 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mountain Park urges HRSA to require 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Part\ Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Mountain Park's current EHR does not include an embedded pharmacy module to support clinic administered drugs, and we do not anticipate that capability for several years. In addition, Mountain Park's current PMS does support uploading price files that differ from those provided by our drug wholesaler. To bill correctly under Arizona's Medicaid program, we would be required to bill at end acquisition cost, although acquisition pricing would differ materially before and after rebate reconciliation. This hinders the process of being able to use the same drug file for all billing in our pharmacy and will place great burden on our staff. Ongoing Resource Diversion: Staff who currently manage pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract PharmacN : The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 7 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New stems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these 6 costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. 9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to rnake difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software frorn the 9 Internal NACHC survey data 7 wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Mountain Park is committed to ensuring that no patient goes without life-saving care. Through our pharmacy, we provide affordable access to critical medications, such as treatments for blood clots, that many patients would otherwise be unable to obtain. The 340B program empowers us to remove financial barriers for low-income patients, making essential services accessible even when families must prioritize basic needs like rent and food. By easing the burden of medication costs, we help patients choose their health without having to choose between survival necessities, ultimately saving lives and strengthening our community. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected 1 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://b0hc.hrsa.ov/coin liance/coinpliance- manual/chapter9#footnotel 0 12h ttps://en] ivenh eal th .co/blo A ear-en d-busin ess-heal th-ch eck-kev-rnetri cs-even, -vh arm acv-own er-should-revi ew 8 contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not rnatch the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost approximately $6,000,000.00 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends 13 https://340boricing.hrsa,gov/ 14 blIps://www. cm sgov/files/zi rilsel ected-dru g-list-neaotiated-i ces-al so-known-maxi in um-fair-! ,ri ces-statutezip.zi p 9 roughly $900,000.00 to purchase these same drugs at the 340B ceiling price. This represents a 700% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Mountain Park Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund other necessary personnel, directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 12,600 uninsured patients from rationing their medications, including critical medications such as insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited fmancial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mountain Park Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order rnedications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Mountain Park Health Center estimates its 2027 Annual Rebate Opportunity Cost to be 10 approximately $1,300,000.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Mountain Park Health Center's Data: Mountain Park Health Center estimates that purchasing the 30 selected drugs for 2026 -2028 at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,000,000.00. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take measures that would impose significant and disproportionate fmancial burdens while we attempt to maintain patient access to medications. This is not a sustainable solution; financing costs incurred to bridge upfront drug purchasing would strain limited resources and directly erode Mountain Park's capacity to sustain essential patient care programs and services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Mountain Park Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Mountain Park Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed rnanufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions!' If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $1,000,000.00 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC rnission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalreg i sten gov/docu men ts/2025/08/01/2025-14619/340b- ro ram-notice-al , 11 cation -orocess-for-the-340b- rebate-model-pi1ot-prouram 11 lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 12 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Mountain Park Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and 13 staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mountain Park Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mountain Park Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Maegan Burris, PharmD - Associate Director of Pharmacy at mburris(a mphc-az.org. Sincerely, C4 1 0 n Swag , ief Executive Officer Mountain Park Health Center 14
HRSA-2026-0001-1920Jacqueline Meriweather · McKees Rocks, PA, United States2026-04-20T04:00Z45,366 chars
Director of Revenue Cycle Management at Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Our billing and inventory processes are already complex. Managing multiple manufacturer rebate timelines and disputes would significantly increase administrative errors and compliance risk. Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-1921St. Charles Health System2026-04-20T04:00Z17,949 chars
HHS Docket No. HRSA-2026-03042. See attached RFI regarding the 340B Rebate Model April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Thank you for the opportunity to respond to HRSAs Request for Information (RFI) regarding the 340B Program and a possible shift from discount to rebate pricing. St. Charles Health System is a 340B program participant and has been for many years. The current pricing model has worked well for decades, and we respectfully encourage you to continue the program in its present form. The proposed rebate model would add expense and burden for St. Charles, and would ultimately disserve the communities, families, and individuals that we serve. St. Charles is a charitable tax-exempt organization, that serves as a vital health care resource for the rural communities of Central Oregon. The existing 340B program allows St. Charles to purchase medications at discounted prices which, in turn, allows St. Charles to stretch other resources to provide care for patients who do not have insurance or other resources to pay for the cost of their health care. We were surprised to learn of the proposed change in 340B pricing. Our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care was built on decades of experience with the 340B program as it has been administered. Moving to a rebate model would disrupt that well- established process. The suggestion that a rebate modeleven one designed with safeguards would have only minimal impact on 340B covered entities (CEs) is not correct. A rebate model would impose onerous and costly administrative requirements on CEs such as St. Charles, diverting critical resources away from patient carean outcome that would conflict with the statutory purpose of the 340B program. Rebates would not improve 340B program integrity and they are not necessary to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of CEs that reveal minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in the 340B program. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of the 340B program. There are significantly less burdensome alternatives to rebates for HRSA to consider. For example, the Department of Health & Human Services (HHS) could require state Medicaid agencies to adopt Oregons process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level could be used to successfully address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers (PBMs) and to leverage more favorable financial treatment under the PBMs formulary. That has nothing to do with 340B program integrity. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and to purchase drugs at non-340B prices to help improve drug manufacturers improve their bottom line. At a minimum, manufacturers should not be permitted to use a CEs rebate claims data for their own commercial purposes. A rebate model would require 340B hospitals to make upfront purchases at higher prices and divert resources from patient care to profitable drug manufacturers. We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. That would increase the number of drugs that we would have to (1) purchase at significantly higher prices, (2) maintain in inventory until dispensed (which could take weeks or months), and (3) then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would be effectively forced to provide what would amount to interest-free loans to drugmakers during the pre-dispense period until a rebate is received, tying up critical resources that would otherwise be used to support patient care. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, again reducing our cash flow. Had the expanded rebate model been fully implemented on 12/31/25, we believe we would have been required to advance drug manufacturers approximately $12.8 million. We have always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. CEs cannot reasonably be expected to create multiple processes to accommodate every manufacturers data template requests. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, multiple follow-up submissions, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Currently, the administrative tasks of the rebate model are straining the department. We simply do not have resources to dedicate additional hours needed for the ongoing data submission to prove dispense status. This often leads to additional claims required that fall outside of the scope of 340B entirely and coincide at a granular invoice level. If the pilot rebate model is allowed to continue with additional NDCs, additional resources would have to be dedicated to managing this -- additional resources that we do not have. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. There may be added delays in receiving rebates issued for medical claims as some hospital accounts are series accounts that remain open for the duration of treatment; weekly or monthly. Rebate costs will reduce resources available for patient care. Additional resources will be needed to manage the burdensome rebate model. Revenue in excess of cost from our 340B program is reinvested and dedicated to serving our patients. If HRSA goes forward with developing a rebate program, we urge it to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Thank you for considering our comments. Sincerely, Jennifer Stubblefield 340B Program Manager, 340B ACE St. Charles Health System | Bend OR 97701 April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Thank you for the opportunity to respond to HRSAs Request for Information (RFI) regarding the 340B Program and a possible shift from discount to rebate pricing. St. Charles Health System is a 340B program participant and has been for many years. The current pricing model has worked well for decades, and we respectfully encourage you to continue the program in its present form. The proposed rebate model would add expense and burden for St. Charles, and would ultimately disserve the communities, families, and individuals that we serve. St. Charles is a charitable tax-exempt organization, that serves as a vital health care resource for the rural communities of Central Oregon. The existing 340B program allows St. Charles to purchase medications at discounted prices which, in turn, allows St. Charles to stretch other resources to provide care for patients who do not have insurance or other resources to pay for the cost of their health care. We were surprised to learn of the proposed change in 340B pricing. Our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care was built on decades of experience with the 340B program as it has been administered. Moving to a rebate model would disrupt that well-established process. The suggestion that a rebate modeleven one designed with safeguardswould have only minimal impact on 340B covered entities (CEs) is not correct. A rebate model would impose onerous and costly administrative requirements on CEs such as St. Charles, diverting critical resources away from patient carean outcome that would conflict with the statutory purpose of the 340B program. Rebates would not improve 340B program integrity and they are not necessary to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of CEs that reveal minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in the 340B program. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of the 340B program. There are significantly less burdensome alternatives to rebates for HRSA to consider. For example, the Department of Health & Human Services (HHS) could require state Medicaid agencies to adopt Oregons process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level could be used to successfully address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers (PBMs) and to leverage more favorable financial treatment under the PBMs formulary. That has nothing to do with 340B program integrity. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and to purchase drugs at non-340B prices to help improve drug manufacturers improve their bottom line. At a minimum, manufacturers should not be permitted to use a CEs rebate claims data for their own commercial purposes. A rebate model would require 340B hospitals to make upfront purchases at higher prices and divert resources from patient care to profitable drug manufacturers. We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. That would increase the number of drugs that we would have to (1) purchase at significantly higher prices, (2) maintain in inventory until dispensed (which could take weeks or months), and (3) then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would be effectively forced to provide what would amount to interest-free loans to drugmakers during the pre-dispense period until a rebate is received, tying up critical resources that would otherwise be used to support patient care. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, again reducing our cash flow. Had the expanded rebate model been fully implemented on 12/31/25, we believe we would have been required to advance drug manufacturers approximately $12.8 million. We have always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. CEs cannot reasonably be expected to create multiple processes to accommodate every manufacturers data template requests. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, multiple follow-up submissions, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Currently, the administrative tasks of the rebate model are straining the department. We simply do not have resources to dedicate additional hours needed for the ongoing data submission to prove dispense status. This often leads to additional claims required that fall outside of the scope of 340B entirely and coincide at a granular invoice level. If the pilot rebate model is allowed to continue with additional NDCs, additional resources would have to be dedicated to managing this -- additional resources that we do not have. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. There may be added delays in receiving rebates issued for medical claims as some hospital accounts are series accounts that remain open for the duration of treatment; weekly or monthly. Rebate costs will reduce resources available for patient care. Additional resources will be needed to manage the burdensome rebate model. Revenue in excess of cost from our 340B program is reinvested and dedicated to serving our patients. If HRSA goes forward with developing a rebate program, we urge it to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Thank you for considering our comments. Sincerely, Jennifer Stubblefield 340B Program Manager, 340B ACE St. Charles Health System | Bend OR 97701
HRSA-2026-0001-1922Anonymous Anonymous2026-04-20T04:00Z3,035 chars
April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Adriana Pharmacy Technician
HRSA-2026-0001-1923Sarah DeCarlo · Uniontown, PA, United States2026-04-20T04:00Z46,130 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. 340B savings allow CHCs to respond quickly to public health needs. Holding funds in manufacturer rebate systems reduces the organizations ability to act during emergencies. Patients served by community health centers are more likely to delay or skip medications due to cost. Removing the upfront 340B discount increases the likelihood of nonadherence, leading to preventable complications and emergency care. Rural patients experience higher rates of diabetes, hypertension, and heart disease. Making essential medications less affordable jeopardizes long term disease control and increases avoidable hospitalizations. Rebate delays may force sudden medication substitutions or coverage gaps. Patients managing chronic illness rely on medication stability; disruptions undermine trust and clinical outcomes. The rebate model ultimately shifts financial risk onto providers serving low income populations, effectively penalizing health centers for caring for the most vulnerable patients. Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
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See Attached Letter April 20, 2026 Thomas J. Engels Chantelle Britton Administrator Director, Office of Pharmacy Affairs Health Resources and Services Administration Health Resources and Services Admin 5600 Fishers Lane 5600 Fishers Lane Rockville, MD 20857 Rockville, MD 2085 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels and Director Britton: On behalf of Indian Health Council, Inc. (IHC), I write in response to HRSAs Request for Information regarding a potential 340B rebate model. IHC serves the American Indian/Alaska Native (AI/AN) population of rural north San Diego County in California. As an ISDEAA Title V Self Governance Program and a FQHC, we have over 10,000 registered patients that rely on the 340B Program to provide access to medications and essential health services. We are concerned that a rebate model would create serious financial challenges for our program. Under this model, we would be required to pay full price for medications upfront and wait for reimbursement. Our program does not have the financial reserves to absorb these costs. Any delay in rebate payments would make it difficult for us to continue purchasing medications consistently. IHC processes approximately 45,000 340B prescriptions annually and relies on these 340B savings to support patient care and services. Under a rebate model, we anticipate increased administrative costs and staff time associated with claims tracking, rebate submission, and compliance activities. Any delays or denials in rebate payments would create financial uncertainty and could result in unrecoverable costs (increased administrative FTE and cost) for our program. A rebate model will increase administrative burden. It would require new work, including tracking claims, submitting rebate requests, managing denials, and handling additional reporting. Our staff and systems are not set up for this, and we would likely need to add .75 to 1.0 FTE time or position to manage these tasks at a minimum. These challenges would directly affect our patients. If we cannot afford to purchase medications upfront or experience delays in reimbursement, it could lead to reduced access to medications or delays in care. This would have a serious impact on the patients we serve. We also do not believe a rebate model would improve program integrity more than the current system. Instead, it would add a burden to providers without a clear benefit. Page 1 of 2 As a Tribal Health Program, we operate under the federal trust responsibility and serve communities that already face barriers to care. If HRSA moves forward with a rebate model, Tribal Health Programs should be fully exempt. For these reasons, IHC opposes the implementation of a 340B rebate model and urges HRSA to maintain the current upfront discount structure. Our concerns are consistent with those raised by bipartisan Members of Congress who have also expressed concern that a rebate model would harm safety-net providers and patients. 1 Thank you for the opportunity to provide comments. Sincerely, Orvin Hanson Chief Executive Officer Cc: Robert Smith, IHC Board Chairman _____________________ 1 Letter from Reps. Doris Matsui, Dusty Johnson, Debbie Dingell, and Tracey Mann, et al., to House Appropriations leadership urging inclusion of FY 2027 appropriations language prohibiting implementation of a 340B rebate model, Mar. 27, 2026 (signed by 94 Members of Congress). Page 2 of 2 Orvin Hanson Digitally signed by Orvin Hanson DN: cn=Orvin Hanson, o=Indian Health Council, Inc., ou=Administration, email=ohanson@indianhealth.com, c=US Date: 2026.04.20 09:39:15 -07'00'
HRSA-2026-0001-1925Richard Vlainich · Washington, PA, United States2026-04-20T04:00Z49,647 chars
As the Pharmacy Manager and a practicing Pharmacist for Cornerstone Care, I am responsible for maintaining medication access, financial stability, and safe continuity of care for patients who rely on the 340B program. From an operational and clinical standpoint, the proposed 340B Rebate Model Pilot introduces substantial and foreseeable risk of harm to patient access and for these reasons, I strongly urge HRSA to exempt community health centers and their pharmacy partnersboth entity-owned and contract pharmaciesfrom the 340B Rebate Model Pilot. Preserving upfront 340B pricing is essential to protecting pharmacy stability, ensuring patient access to medications, and supporting adherence to life-sustaining therapies. April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: As the Pharmacy Manager and a practicing Pharmacist for Cornerstone Care, I am responsible for maintaining medication access, financial stability, and safe continuity of care for patients who rely on the 340B program. From an operational and clinical standpoint, the proposed 340B Rebate Model Pilot introduces substantial and foreseeable risk of harm to patient access and medication adherence. Entity-owned pharmacies rely on predictable acquisition pricing to manage inventory, maintain wholesaler credit limits, and ensure uninterrupted access to essential medications. Replacing upfront 340B pricing with delayed rebate reimbursement introduces prolonged cash-flow exposure, ties up limited capital, and increases the likelihood that pharmacies will exceed wholesaler credit thresholds. Even short delays or partial rebate denials can halt ordering, disrupt inventory levels, and force pharmacies to ration supply or remove certain medications from stock. From a pharmacists perspective, the greatest concern is the impact on patients. Without upfront 340B pricing, Cornerstone Care would lose the ability to provide point-of-sale sliding-fee discounts. Patients are instead exposed to higher out-of-pocket costs and delays in therapy initiation. These conditions reliably lead to medication abandonment, delayed refills, and nonadherenceespecially among uninsured and underinsured patients managing chronic disease. The drugs affected by the proposed pilot are not discretionary therapies. Many are essential to managing diabetes, cardiovascular disease, thromboembolic disorders, and serious mental illness. In practice, affordability barriers force therapeutic substitutions or treatment interruptions that carry well-established clinical risks, including increased hospitalizations, emergency department utilization, and preventable disease progression. As pharmacists, we see firsthand that even brief disruptions in access to insulin, anticoagulants, SGLT2 inhibitors, or behavioral health medications can result in serious and lasting harm. 2 Ultimately, the proposed rebate model transforms the 340B program from a tool that supports medication access into a financing mechanism that shifts risk from manufacturers to safety-net providers and patients. This approach is incompatible with pharmacy operations and contrary to the intent of the 340B program. For these reasons, I strongly urge HRSA to exempt community health centers and their pharmacy partnersboth entity-owned and contract pharmaciesfrom the 340B Rebate Model Pilot. Preserving upfront 340B pricing is essential to protecting pharmacy stability, ensuring patient access to medications, and supporting adherence to life-sustaining therapies. Sincerely, Richard Vlainich, RPh Pharmacy Manager Richard Vlainich (Apr 20, 2026 11:30:52 EDT) Richard Vlainich 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 04.20.26_340B Pharm Mgr Rebate Model Ltr Final Audit Report 2026-04-20 Created: 2026-04-20 By: Katie Sill (ksill@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAA1WtQB2YHt0fG_99yLPfh87Qu9c4PW54D "04.20.26_340B Pharm Mgr Rebate Model Ltr" History Document created by Katie Sill (ksill@cornerstonecare.com) 2026-04-20 - 1:45:55 PM GMT Document emailed to Richard Vlainich (rvlainich@cornerstonecare.com) for signature 2026-04-20 - 1:46:00 PM GMT Email viewed by Richard Vlainich (rvlainich@cornerstonecare.com) 2026-04-20 - 3:28:05 PM GMT Document e-signed by Richard Vlainich (rvlainich@cornerstonecare.com) Signature Date: 2026-04-20 - 3:30:52 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 3:30:52 PM GMT
HRSA-2026-0001-1926SAC Health System2026-04-20T04:00Z4,752 chars
See attached file(s) SAC Health 1003 East Brier Drive San Bernardino, CA. 92408 sachealth.org _________________________________________________________________________________________ Our Mission: To reflect the healing ministry & love of Jesus Christ through healthcare, education, and partnerships that empower our communities to flourish. SAC Health complies with applicable Federal and State civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, sex, sexual orientation or gender. April 17, 2026 Dear HRSA Office of Pharmacy Affairs, Thank you for the opportunity to provide comments regarding the use of manufacturer rebate models as an alternative to traditional upfront 340B pricing. SAC Health System (CHC28992) is a Federally Qualified Health Center serving medically underserved populations in the Inland Empire region of California. Our organization participates in the 340B program to help expand access to care and support essential clinical services for vulnerable patients. SAC Health administers medications within clinical settings and does not operate an in-house pharmacy. As such, we rely on the predictability and transparency of the 340B program to ensure patients receive timely treatment while maintaining program compliance. The implementation of rebate-based purchasing models presents several concerns for organizations like ours. First, rebate models create a significant cash flow burden for safety-net providers. Under this structure, covered entities must purchase medications at full price and then seek reimbursement through a rebate process. For community health centers operating with limited financial margins, carrying the cost of high-value medications while waiting for reimbursement can create substantial financial strain. This approach effectively converts the 340B program from a point-of-purchase discount model into a reimbursement model. Second, rebate structures introduce additional administrative complexity and compliance risk. Covered entities may be required to submit purchase records, submit rebate claims, reconcile payments, and manage disputes across multiple manufacturers. These processes add operational overhead and create fragmentation if each manufacturer implements its own rebate methodology. For organizations without retail pharmacy infrastructure, this represents a meaningful operational challenge. Based on our internal evaluation, SAC Health anticipates that administering a rebate-based purchasing model would require an additional 2 full-time employees (FTEs) dedicated to rebate submission, reconciliation, payment tracking, and audit documentation. For safety-net providers operating with constrained administrative budgets, the need to add staffing solely to manage rebate SAC Health 1003 East Brier Drive San Bernardino, CA. 92408 sachealth.org _________________________________________________________________________________________ Our Mission: To reflect the healing ministry & love of Jesus Christ through healthcare, education, and partnerships that empower our communities to flourish. SAC Health complies with applicable Federal and State civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability, sex, sexual orientation or gender. workflows represents a meaningful operational cost that does not directly support patient care and would discourage our continuation of the 340B program. Third, rebate models may lead to delays in cost recovery, particularly for higher-cost medications. If reimbursement timelines are inconsistent or disputed, safety-net providers may face prolonged financial exposure. In practice, this uncertainty may discourage providers from stocking certain medications or limit access to therapies that carry significant upfront cost. The 340B statute was designed to allow covered entities to obtain drugs at discounted prices at the time of purchase, enabling safety-net providers to stretch scarce federal resources and expand services to underserved populations. Rebate models shift financial and administrative burden onto covered entities in a way that appears misaligned with this intent. We respectfully encourage HRSA to preserve upfront 340B pricing as the standard purchasing mechanism. If rebate models are permitted, establishing clear standards for rebate submission, payment timelines, and process consistency would help mitigate operational risk for covered entities. Thank you for your continued oversight of the 340B program and for considering the perspective of safety-net providers. Sincerely, Michael J. Banning 340B Committee Chairperson
HRSA-2026-0001-1927Ryan White Clinics for 340B Access2026-04-20T04:00Z13,836 chars
See attached file(s) April 20, 2026 SUBMITTED ELECTRONICALLY VIA HTTPS://WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Ryan White Clinics for 340B Access Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Ryan White Clinics for 340B Access (RWC-340B) appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront 340B discounts. RWC-340B is a national association of HIV/AIDS health care providers that receive funding under the Ryan White CARE Act and participate as covered entities in the federal 340B drug discount program. Ryan White Clinics (RWCs) are dedicated to caring for low-income and vulnerable patients living with HIV/AIDS. Our members are on the frontlines of the battle against the HIV/AIDS epidemic, supporting patients living with HIV/AIDS by providing primary care, case management, testing and behavioral health, and other support services that are proven to keep medically vulnerable individuals engaged in their healthcare. The 340B program allows RWCs to stretch their scarce resources to support the full continuum of care that their patients require, including testing, linkage to care, treatment, retention, case management, and medication adherence. Services funded by 340B savings enable RWCs to achieve high viral suppression rates for their patients, helping to improve their health, reduce costs and protect against new incidence of HIV. RWCs have made tremendous strides towards controlling the AIDS epidemic in the U.S. Their success is due in large part to the support they receive from the 340B program. However, such progress would be seriously jeopardized and potentially reversed if HRSA capitulates to industry 2 pressure to allow manufacturers to offer 340B pricing in the form of a post-purchase rebate instead of an upfront discount. Because a rebate model would cause RWCs and their patients significant harm, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. I. A Rebate Model Pilot Would Harm RWCs Ability to Care for Their Patients The comprehensive services that RWCs provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and food and housing assistance. Because RWCs often receive no insurance payments for these services and given that Congress has kept funding for such programs through the Ryan White program flat, they depend on the 340B program to underwrite the cost of providing these critical services to their patients. Importantly, the 340B program allows RWCs to provide these expanded services without any cost to taxpayers. The 340B program enables RWCs to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. RWCs rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating RWCs access to 340B discounts, the Rebate Model Pilot would erode the 340B savings available to RWCs to cover the cost of care to the uninsured and underinsured. A Rebate Model Pilot would make the comprehensive care that RWCs patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent in enacting the 340B program. Increased financial and administrative costs to RWCs from the Rebate Model Pilot would reduce the resources on which RWCs rely, both to care for existing patients and to identify additional patients in need of care. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.1 Additionally, contract pharmacies may be less willing to distribute 340B drugs to patients on behalf of covered entities due to the cumbersome and financially challenging rebate process. If contract pharmacies refuse to enter into agreements with RWCs, access to medications will be limited for Ryan White patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and mental health conditions for RWCs, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and RWCs efforts to encourage patient adherence are significantly compromised if individuals living with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of a Rebate Model Pilot would set back this nations fight to end the AIDS epidemic. 1 H.R. Rep. No. 102-384, pt. 2, at 12. 3 II. A Rebate Model Pilot Would Increase RWCs Drug Acquisition Costs A Rebate Model Pilot would increase RWCs drug acquisition costs because they will lose the upfront 340B price reductions and subceiling discounts that they receive at the time of purchase. RWCs would be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process would place a cash flow strain on already under-resourced RWCs and would threaten their ability to pass through upfront discounts to patients at the point of sale. HIV medications are among the most expensive drugs in the nation. Most RWCs lack the funds to buy their drugs at retail prices, which are often thousands of dollars above the drugs 340B price. RWCs are non-profit community-based organizations that are required by law to invest their savings and revenue into patient care. They do not have the margins to float what is essentially an interest-free loan to drug companies and to wait to receive their 340B rebates. III. A Rebate Model Would Place a Tremendous Administrative Burden on RWCs For the last 30 years, RWCs and their vendor partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that RWCs receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program would completely upend these systems, pose substantial implementation and management costs, and do nothing to improve 340B compliance or operations. RWCs would have to make significant upfront and ongoing financial investments in technology, staff, and workflow redesign to accommodate a Rebate Model Pilot. Importantly, these investments would diminish RWCs ability to care for their patients. Some RWCs are also federally qualified health centers (FQHCs) and participate in 340B as FQHCs. The administrative burden of a Rebate Model Pilot would be even worse for RWCs that are enrolled in 340B as FQHCs and have subgrantees. HRSA currently assigns an FQHC and its subgrantees the same 340B ID, forcing the FQHC and its subgrantees to act as one entity when uploading data to manufacturer platforms. If HRSA advanced its Rebate Model Pilot, FQHCs and their subgrantees would face an onerous process to discern which purchases, dispenses, and rebate payments belong to which 340B ID holder. IV. A Rebate Model Pilot Would Further Manufacturer Efforts to Shrink the 340B Program A Rebate Model Pilot would be a gift to manufacturers. Even a narrowly constructed pilot would provide the foundation and blueprint for more restrictive manufacturer rebate models in the future. For years, manufacturers have attempted to shrink the size and scope of the 340B program, first through contract pharmacy restrictions and most recently through manufacturer- initiated rebate programs. The Rebate Model Pilot would give credibility to manufacturers unfounded claims that the 340B program is flawed and in need of reform. The Rebate Model Pilot would inappropriately shift decision-making power into the hands of manufacturers to decide whether a covered entity purchase is eligible for the statutorily mandated 340B ceiling 4 price. Giving manufacturers control over whether 340B discounts are paid will lead to fewer 340B discounts because these discounts come directly from manufacturers bottom lines. For many years, covered entities have contended with pharmacy benefit managers (PBMs) using 340B claims data and knowledge of entities' program participation to target them for lower, discriminatory reimbursement rates. These payment policies erode covered entities' 340B savings and, in turn, undermine their ability to care for patients. Covered entities have had to fight for dozens of state laws prohibiting such policies and blocking requirements that entities share 340B claims data with PBMs. HRSA should not recreate this same problem by ceding control over 340B discounts to manufacturers or granting them access to data to which they are not entitled. Pharmacy claims data is proprietary information. Manufacturers can use such data to fuel their marketing campaigns, whether directed at patients, providers, or both. Even worse, they can use the data to support their advocacy efforts to attack and shrink the 340B program. Manufacturers have a long history of publishing pseudo-scientific studies that allegedly document misuse of the 340B program. The Rebate Model Pilot would give them new data to expand their misinformation campaigns. V. HRSA Should Pursue a Neutral 340B Clearinghouse Instead of a Rebate Model Pilot Instead of proceeding with a Rebate Model Pilot, RWC-340B respectfully asks that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. The clearinghouse would remove 340B claims from Medicare drug claims and share the non- 340B claims with manufacturers for MFP rebate payments. Since manufacturers would only pay rebates on non-340B claims, duplicate discounts would be prevented. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. In RWCs experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems. Our members have reported endless challenges when reporting 340B claims data to comply with manufacturers contract pharmacy restrictions or to address issues related to MFP-340B duplicate discount prevention or payment of MFP rebates. Manufacturers fail to provide required discounts, correct errors, communicate with covered entities, or understand how covered entities use drugs. Additionally, manufacturers have demonstrated they do not understand how federal grant programs work. These problems are why we need a neutral clearinghouse run by the federal government or a contractor, rather than a Rebate Model Pilot requiring RWCs to submit 340B claims data to manufacturers or their vendors. 5 We believe a clearinghouse with the following elements would benefit manufacturers by preventing duplicate discounts, and covered entities and contract pharmacies by using an impartial process that is not unnecessarily costly or burdensome: prevents duplicate discounts before they occur, Prohibits manufacturers from having their own individual 340B-MFP deduplication requirements, Requires covered entities to submit the minimum necessary 340B claims data, while also providing entities an opportunity to submit supplemental data (e.g., indicating a claim previously identified as 340B is non-340B or a vice versa), Limits data elements provided to manufacturers to only an indicator that a particular claim was 340B, Prohibits manufacturers from deciding whether 340B is used for a 340B-eligible patient, Run by a conflict-free vendor that would be accountable to the government rather than the drug industry, and In instances where a drugs MFP is lower than its 340B ceiling price, provides a way for a covered entity to receive from the manufacturer a payment for the difference between the MFP and the 340B ceiling price. A 340B clearinghouse model represents the ideal solution for all stakeholders - covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. * * * We appreciate HRSAs consideration of our comments. For further information, please contact me at ceo@cempa.org or 423-648-9911. Sincerely, Shannon Burger, MBA, CPA President Ryan White Clinics for 340B Access
HRSA-2026-0001-1928Maria Garcia · Hillsboro, OR, United States2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1929Colorado Coalition for the Homeless2026-04-20T04:00Z46,958 chars
See attached file(s) 1 TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Colorado Coalition for the Homeless DATE: Apr. 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 For over 40 years, Colorado Coalition for the Homeless (the Coalition, CCH) has worked collaboratively toward the prevention of homelessness and the creation of lasting solutions for families, children, and individuals who are experiencing or at-risk of homelessness throughout Colorado. The Colorado Coalition for the Homeless serves more than 13,400 patients annually across Denver and rural southeastern Colorado through Stout Street Health Center, multiple satellite clinics, and mobile outreach. Ninety-eight percent of our patients are low-income, with 19% uninsured, 65% covered by Medicaid, and 12% enrolled in Medicare. Sixty-eight percent of our patients identify as members of minoritized communities. Many of our patients are older adults, living with disabilities, or managing complex chronic or behavioral health conditions. Services are provided regardless of ability to pay, including to individuals in rural and frontier areas where access to affordable medications and specialty care is limited. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our single onsite pharmacy, with no contract pharmacies. The 340B program is foundational to my organizations ability to serve the most vulnerable members of my community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in my community and nationwide. The Coalition, and others across the country, would face staggering, detrimental impacts if the rebate model were to go into effect: CCH would see an average loss of $469,901.94 from entity-owned pharmacy services. 2 We expect our upfront pharmacy costs to increase by 63% due to a rebate model, pulling dollars away from direct patient services, including behavioral health, oral care, primary care, pharmacy, street medicine, and shelter-based care. We further expect the administrative costs to apply for and track the rebates to cost my organization 2 FTE and $156,000, which will further strain our ability to serve our patients. For CCH, this financial turmoil and undermining of Congressional intent of the program to stretch scarce Federal resources as far as possible1 means directly and negatively: Impacting the 7,856 patients who accessed affordable or free medications through our participation in the 340B program, Increasing the administrative costs by $156,000 for our 340B program, and Impeding the Coalitions ability to provide behavioral health, oral care, street medicine, and shelter-based care to our 13,400 patients annually. The Coalition requests the Health Resources and Services Administration (HRSA) exempt all CHCs, from any proposed 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026-03042). We oppose any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or burdens to the 340B program. CCH already had effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the programs intent and the fundamental responsibility of HRSA and HHS to administer this program in the interest of eligible Americans, and the nonprofit, local, trusted community providers who serve them. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is infeasible for my organization, and likely many others, to respond individually to each question. Therefore, we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. RFI Target Area 1: Costs to Covered Entities Financial impacts It is difficult to understate the cost to CCH if we are forced to administer our 340B program through a rebate model due to the lack of detail on exactly which drugs would be included. As a proxy, in 2025, if the Coalition had purchased the same volume of the ten drugs currently part of Medicare Fair Price (MFP) drugs without the 340B discount, purchasing at the Wholesale Acquisition Cost (WAC) would have increased upfront costs by 5,758%. Given that HRSA has not determined or announced the drugs in this potential 340B rebate model pilot program, the expected dollar increase in upfront cost that my CHC will have to account for may rise substantially, if and as more drugs are added to a 340B rebate model. 1 18 340B House Report Legislative History. H.R. REP. 102-384(II). 3 To cover the upfront cost of purchasing drugs and operationalizing the rebate model, the Coalition anticipates needing to consider: Scaling back our non-revenue-generating, but essential, clinical services, like our behavioral health, oral care, street medicine, and shelter-based care, Diverting funds away from our clinical staff to manage the rebate model, or Reducing the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities. It is incomprehensible to impose a rebate model on local, nonprofit CHCs when two-thirds of CHCs in Colorado had negative or breakeven financial operating margins in 2024 and 2025 and it is anticipated a similar number of CHCs will face this financial challenge in 2026. As CHCs, we currently rely on our statutorily allowed savings from the 340B program to fill this gap and make us closer to whole; the burden of a rebate model will exacerbate these financial difficulties and, ultimately, will be insurmountable for my organization, and likely others across Colorado. Pricing impacts By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within our HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact CCHs ability to offer patients steeply discounted medications at the point-of-sale by requiring us to purchase medications at the WAC pricing. We currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems will continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate the drugs price for the patient. The rebate model generates uncertainty about its impact on my CHCs ability to offer sliding fee discounts at the point of sale and forces us to estimate discounts without knowing whether or when a rebate will be paid. This exposes us to financial loss if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced, Colorados Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy 2 42 U.S. Code 254b(k)(3)(G)(i) 4 systems can only pull in the WAC pricing file, CHCs must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi- billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions my organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs, like CCH, have on it by solely asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to my organization and patients, while we had 33,281 340B transactions with 184 of pharmaceutical manufacturers in 2025, my CHC was able to provide 7,856 unique patients with 135,999 prescriptions at $4,900,387.01 (340B cost to your CHC). Through the 340B program, those patients were able to access over $900,000 in savings; for many of my patients, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be disproportionately affected. CHC patients rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, our patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. If a rebate model goes into effect, my pharmacy will need to evaluate the possibility of evolving our drug purchasing practices. With the expected upfront cost equating to the drugs WAC, it will not make fiscal sense to maintain a stock of certain medications. The Coalition has considered shifting to purchase drugs only after the prescription has been written by the patients provider, requiring that patient to return to the clinic or their local pharmacy to pick it up. This fundamentally shifts CHCs away from the same-day model of care we currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. For many of our patients, particularly those experiencing homelessness or living in rural and frontier communities, transportation is unreliable, costly or extremely limited requiring long travel distances, multiple transfers, or coordination with limited shuttle or outreach 5 services. Any changes the proposed rebate model would require that would force our patients to return to the clinic or local pharmacy multiple times a week to pick up their prescription(s) would exacerbate these existing transportation barriers, creating an unconscionable burden that places medication adherence and patient health at serious risk. Imposing a rebate model on CHCs would only serve to weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, particularly those who are low-income and have insurance with high co-pays or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be harmful and burdensome. The Coalition currently employs the equivalent of 1 FTE of pharmacy, financial, and IT to manage our 340B program currently, at a cost of $60,000 per year. To sufficiently and appropriately track the submission of the data and the receipt of rebates across our in-house pharmacy would require the hiring of at least 2 FTE, further compiling onto our anticipated annual increase in costs. Across Colorado, CHCs have the shared concern that a rebate model would require more staff time and administrative cost than current 340B program management; CHCs estimated that managing a rebate model would require the hiring of additional staff to adequately manage, though many of these CHCs also are struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every hour that one of my pharmacists spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care our patients depend on. This diversion of time and resources is not a minor inconvenience for CCH to navigate: it is a structural undermining of the care model that we depend on to serve our community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. The Coalition will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased 6 administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already-strained operational capabilities. The Coalition can estimate that the total projected increase in expenses, solely to manage a rebate model, including labor, IT, and carrying costs, is estimated at over $156,000 annually to cover the salary for 2 additional FTE. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities The Coalition is very concerned by potential cash flow issues of the proposed rebate model. This is linked to the model requiring upfront purchase of the drugs, how quickly a rebated could be requested, and possible denials. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that CCH must forgo discounts or face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should we negotiate with wholesalers or banks to increase our borrowing limit. CCH relies on these discounts and terms outlined in contracts with our wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and exorbitant interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the need upfront will be crippling, and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $389,777.56 on my expected $3,118,220.50 increase in upfront cost. Cardinal Healths standard policy is an 18% annual interest rate on all balances that have not been paid off by the 15th of the month following the purchase. Of course, this cost is only for the ten MFP drugs proposed in the first 340B rebate model pilot program; the cost will further increase if and as more drugs are added to a 340B rebate model. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers are actively advising CHCs to seek loans. 7 We are also concerned that the rebate model will cause the Coalition to lose non-340B discounts we currently receive, which lower our drug spending significantly, including: Loss of sub-ceiling discounts, which reduced the net cost of the ten pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate sub-ceiling discounts on 340B drugs on behalf of covered entities, like CHCs. By allowing a rebate model, HRSA thus eliminates the possibility for Apexus to negotiate discounts on the ten drugs that would likely be included in the pilot program, effectively transferring this discount from CHCs and their patients to the pharmaceutical manufacturer. Loss of prompt payment discounts, which lowers CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a prompt payment discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced Cost of Goods Sold discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. RFI Target Area 3: Rebate Denials Every dollar CCH pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. It is a dollar that we cannot rely on to provide health care services to my patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain our drug supply is not just unethical; it creates an environment of clinical instability with direct patient impacts. In our community, where the patients we serve rely on us to access care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to our communitys safety net and our patients health. If we are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. The Coalition urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated that similar issues would arise in the proposed 340B rebate model. 8 If a rebate is denied, my CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative 5% denial rate would result in a net annual loss of $158,335.05. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We respectfully request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. Any delay beyond the 10-day window creates an immediate cash flow crisis. We are particularly 9 worried that the need to purchase drugs at full WAC will cause us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. We have concerns about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Beacon Channel Managements Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, we are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacons technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model 10 would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts and the Medicaid rebate routes to the state, as required by state statute. CHCs, like mine, maintain up-to-date profiles in the Office of Pharmacy Affairs Information System (OPAIS), so our number of in-house pharmacies is accurate. Additionally, we submit a modifier on each Medicaid claim, so the rebate is appropriately and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in our agreements with our third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. For Medicare, CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries on how to address the findings. Since Jan. 1, 2026, while we understand that manufacturers investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, Congress...constrained the [Health and Human Services] Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 11 discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. The 340B statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSAs statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 12 existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: we are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. 5 https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how-it-works-and-why-its- controversial 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxp.org/wp-content/uploads/2026/01/CSRxP-Margin-Analysis-Chart.pdf 13 Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.8 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety net backbone, to pay upfront WAC pricing simply because 8 H.R. REP. 102-384(II) 14 a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Acts statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot to address 340B and MFP deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to CHCs participation in the program and, most importantly, protect patient access to affordable medications. 15 We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for CCH as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions or would like to know more about how the Coalition uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to Cathy Alderman at cathy.alderman@colordocoalition.org. Sincerely, Cathy Alderman Chief Communication and Public Policy Officer Colorado Coalition for the Homeless
HRSA-2026-0001-1930Amber Warren · Mount Morris, PA, United States2026-04-20T04:00Z297 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. As a provider, I worry that higher upfront drug costs will lead patients to decline medications I know they need, forcing clinical compromises based on affordability rather than best practice.
HRSA-2026-0001-1931Beacon Health System2026-04-20T04:00Z8,304 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels, Beacon Health System serves patients across northern Indiana and southwest Michigan, many of whom live in rural or underserved communities. The 340B program is a critical tool that allows us to support access to care and strengthen services for the communities and patients we serve. We appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program. Beacon opposes implementation of a rebate based model. The 340B program has functioned effectively for decades under a prospective discount structure, enabling covered entities to stretch limited resources and reinvest savings into patient care. A transition to a rebate model would fundamentally alter this structure and introduce significant administrative, financial, and operational challenges without improving program integrity or patient outcomes. A rebate model would require Beacon to purchase drugs at wholesale acquisition cost and wait for reimbursement, shifting financial responsibility from manufacturers to providers. Even with defined payment timelines, delays, denials, and reconciliation issues are likely, and rebates are not assured before payment obligations are due. This creates unnecessary financial challenges and effectively requires providers to finance manufacturer obligations while introducing additional administrative complexity which increases our overall cost of doing business. In a time when the high cost of healthcare is under severe pressure this Pilot Program worsens our ability to drive an efficient cost structure. The operational impact of a rebate model is significant. Beacons 340B program is designed around prospective discounts, with established staffing models, split billing workflows, compliance processes, and vendor relationships. A rebate model would not replace these activities but would add new layers of work, including claim submission across multiple manufacturers, reconciliation of payments and denials, dispute management, and expanded audit and documentation requirements. These functions do not exist today under the current model and do not enhance patient care or program integrity. Implementation would also require significant investment in third party administrators, system configuration, and new data feeds, along with ongoing fees tied to claim level processing. In addition to internal labor, these costs represent a clear shift of administrative burden from manufacturers to covered entities. 2 of 3 Beacon, like every health system and hospital impacted, does not currently have the staffing capacity to support a rebate based model. Implementation would require additional personnel or the diversion of existing pharmacy, compliance, finance, and information technology resources away from patient care supporting activities. Rebate administration is continuous, variable, and resource intensive, and cannot be absorbed within existing operations. A rebate model would also require significant changes to systems and infrastructure. Beacon, like other impacted hospitals and health systems, relies on technology platforms that are designed to support prospective purchasing and compliance, not retrospective rebate adjudication. New or modified systems would be required to extract, validate, and submit claims level data across multiple platforms. Many required data elements are not currently captured in a single system and would require coordination across clinical and financial systems, often with manual processes. These requirements increase administrative burden and introduce additional risk of error. The data collection and reporting requirements associated with a rebate model extend beyond what is currently maintained for 340B compliance. While Beacon has established controls to ensure eligibility and prevent diversion, the additional data required for rebate submission would necessitate new workflows and increased coordination across departments. These requirements are more complex than previously suggested and would add to the operational burden. Rebate models that rely on manufacturer controlled platforms raise concerns related to data security, consistency, and oversight. Prior experience has shown that these platforms may include unclear requirements, shifting expectations, and limited responsiveness. Expanding reliance on such systems increases risk without corresponding benefit, creates variability that complicates compliance, and adds administrative burden that may require additional resources to maintain a compliant program. Allowing manufacturers to define submission processes or operate separate systems further increases complexity and creates the potential for inconsistent requirements, delayed payments, and claim denials that are not aligned with statutory intent. Experience with other rebate based programs demonstrates that these risks are not theoretical and can materially increase cost and administrative burden for providers. The cumulative effect of these burdens would reduce Beacons ability to reinvest 340B savings into patient care. Beacon provides essential services in communities with limited access to care. Any erosion of 340B program value will disproportionately affect vulnerable patient populations, including those who are low income, rural, elderly, or medically complex. Beacon has built its operations, compliance infrastructure, vendor relationships, and long term planning around the use of upfront discounts. Transitioning to a rebate model disrupts decades of established practice and reliance without evidence that the current model is insufficient. The existence of statutory 3 of 3 authority to permit rebates does not justify replacing a structure that has consistently supported patient access and program integrity. If HRSA seeks to address manufacturer concerns, less burdensome alternatives are available. A centralized, neutral third party clearinghouse could address duplicate discount concerns while preserving the prospective discount structure. This approach would maintain consistency, reduce administrative burden, and ensure that manufacturers bear the cost and responsibility of reconciliation. If HRSA proceeds with a pilot despite these concerns, strong safeguards will be necessary. HRSA should retain full authority over program administration and should not delegate operational control to manufacturers. Covered entities must be protected from additional costs through clear mechanisms requiring manufacturers to cover all administrative and operational expenses associated with the model. HRSA should establish enforceable requirements for timely payment, including clear definitions of noncompliance and meaningful penalties for delayed or denied rebates. A standardized, neutral platform for claims submission should be required to avoid multiple manufacturer specific processes and reduce variability. The current dispute resolution framework is not sufficient to address the volume and complexity of rebate related issues, and a more efficient process with defined timelines and accountability will be necessary. Clear and transparent metrics should also be established to evaluate the impact of any pilot on administrative burden, financial performance, and patient access. For these reasons, Beacon Health System respectfully urges HRSA to abandon the rebate model pilot. The proposed approach introduces significant cost, complexity, and risk while offering no meaningful improvement over the current program. If HRSA proceeds despite these concerns, it must allow covered entities an opportunity to comment on the specific design features of any proposed program prior to implementation. Thank you for your consideration. Respectfully, Jeffrey P. Costello Jeanne Anderson Chief Financial Officer Vice President of Pharmacy Services Beacon Health System, Inc. Beacon Health System, Inc.
HRSA-2026-0001-1932Peoples Community Health Clinic, Inc.2026-04-20T04:00Z5,930 chars
See attached file(s) PEOPLES ommuniby Heath Clinic 905 Franklin Street Waterloo, Iowa 50703 (319) 874-3000 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Peoples Community Health Clinic, Inc. (Peoples Clinic), we appreciate the opportunity to respond to the Health Resources and Services Administration (HRSA) Request for Information regarding the proposed 340B Rebate Model Pilot Program. We also thank HRSA for extending the comment deadline to April 20, 2026. Peoples Clinic is a federally qualified health center that has provided comprehensive primary care services for over 50 years. In the past year, we served 18,384 patients across 67,694 visits. As with other community health centers (CHCs), our ability to provide affordable care and medications is closely tied to the 340B Drug Pricing Program. 1. Recommendation: Exempt Community Health Centers from the Rebate Model Pilot Peoples Clinic recommends that HRSA exempt CHCs from participation in any 340B rebate model pilot. Rationale: The proposed model shifts financial and administrative responsibility from manufacturers to covered entities. Requiring CHCs to purchase drugs at Wholesale Acquisition Cost (WAC) and await rebate reimbursement introduces significant cash flow constraints and operational risk. Organizational Impact: Increase in annual administrative costs from approximately $175,000 to $280,000 Additional staffing required to manage rebate submission, tracking, and reconciliation Reduced capacity to use 340B savings to support patient services These impacts are not operationally sustainable for CHCs operating on limited margins. 2. Patient Access Considerations Peoples Clinic is concerned that the rebate model would negatively affect patient access to medications. Key Considerations: CHC patients are disproportionately uninsured or underinsured and rely on point-of-sale affordability Delays in rebate realization create uncertainty in pricing and limit the ability to offer discounted medications Disruptions in access may lead to decreased adherence, delayed treatment, and increased utilization of higher-cost care settings Many of the drugs anticipated to be included in the model are used to manage chronic conditions prevalent in CHC populations, including diabetes, cardiovascular disease, and behavioral health conditions. Operational Concern: The rebate model does not provide a clear mechanism for CHCs to meet existing requirements to offer discounted medications (e.g., insulin) at the point of care. 3. Administrative and Operational Feasibiliq Peoples Clinic has significant concerns regarding the administrative feasibility of the proposed model. Anticipated Requirements: Management of multiple manufacturer-specific submission requirements and timelines Development or acquisition of new IT infrastructure for rebate tracking and reporting Ongoing reconciliation and dispute resolution processes Estimated Impact: At least one additional full-time equivalent (FTE) required Approximately $150,000 in increased annual vendor and support costs Significant diversion of staff time from patient care to administrative compliance The proposed model introduces duplicative processes without corresponding programmatic benefit. 4. Financial Impact and Cash Flow Implications The requirement to purchase drugs at WAC represents a substantial financial shift. Estimated Impact (Peoples Clinic): Current annual spend (340B pricing): approximately $300,000 Estimated annual spend under WAC: approximately $760,000 Upfront cost increase exceeding 250% Flow Considerations: Rebate timelines may extend 40-85 days depending on submission and processing Delays or denials result in unrecoverable costs Increased risk of exceeding wholesaler credit limits These factors create material liquidity risk and may limit the ability to maintain medication inventory and service levels. 2 5. Rebate Integrity and Oversight Peoples Clinic recommends that any rebate model include clear and enforceable standards to ensure program integrity and minimize financial risk to covered entities. Recommended Guardrails: Standardized, transparent rebate denial criteria with claim-level documentation Defined timelines for payment applicable to both initial and corrected claims Enforcement mechanisms for late payments or improper denials Presumption of claim validity unless the manufacturer demonstrates duplication Prohibition on manufacturer-defined patient eligibility criteria Absent these protections, the model places disproportionate financial risk on CHCs. 6. Alternative Approach Peoples Clinic recommends consideration of a neutral, third-party claims clearinghouse model as an alternative to a rebate structure. Potential Benefits: Maintains upfront 340B pricing Reduces administrative burden on covered entities Improves consistency in duplicate discount prevention Preserves patient access to affordable medications Conclusion Peoples Clinic recommends that HRSA exempt CHCs from the 340B Rebate Model Pilot Program due to the significant financial, operational, and patient access concerns outlined above. If HRSA proceeds with implementation, we recommend a delayed start date to allow for system development and operational readiness. We appreciate the opportunity to provide input on this proposal and welcome continued engagement on this issue. For additional information, please contact Amy Rueber, PharmD, Pharmacy Director, at arueber@peoples-clinic.com. Sincerely, Christine Kemp Chief Executive Officer ckemp(aVeoples-clinic.com (319) 874-3311 3
HRSA-2026-0001-1933National Taxpayers Union2026-04-20T04:00Z34,719 chars
See attached file(s) 122 C Street N.W., Suite 700, Washington, DC 20001 April 20, 2026 U.S. Department of Health and Human Services Health Resources and Services Administration Office of Pharmacy Affairs Attn: Chantelle Britton, Director Posted on regulations.gov and sent via email: 340Bpricing@HRSA.gov Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 On behalf of National Taxpayers Union (NTU), the nations oldest taxpayer advocacy organization, we write with brief remarks on HRSA-2026-03042, which seeks comments regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern the approval of manufacturer rebate plans and the impacts on all stakeholders. Much as NTU noted in its September 2025 comments on HHS Docket No. HRSA-2025-14619, this docket has potential to benefit taxpayers, who have been increasingly burdened by the fiscal liabilities of the 340B program. Introduction NTU was founded in 1969 to achieve favorable policy outcomes for taxpayers with Congress and the executive branch. Our experts and advocates engage federal policymakers on important matters affecting taxpayers in a variety of settings, including tax administration, health care, and product regulation. All these matters intersect and provide NTU with an opportunity to offer its views today. For most of NTUs 55-year history, our team has analyzed and provided commentary on important questions surrounding the fiscal impact of federal legislation and regulations on the health care space. We have noted with great concern the decades-long cost spiral in federal health care programs, which has seemed to defy attempts at reducing or at least controlling the burden on current and future taxpayers. According to the Congressional Budget Office, between Fiscal Years 2024 and 2054 the share of federal noninterest outlays consumed by major health care programs is projected to rise from 30% to 38%. By contrast, Social Security, another cost driver in the budget, will see its share of non-interest outlays increase from 26% to 29%.1 Even with the passage of the One Big Beautiful Bill Act (OBBBA), which NTU strongly supported, 1 See the Congressional Budget Office report at: The Long-Term Budget Outlook Data: 2026 to 2056 | Congressional Budget Office. outlays for the federal share of the Medicaid program are projected to increase between Fiscal Years 2025 and 2034 by 31%. It should be noted that, without the reforms contained in OBBBA, federal Medicaid outlays would have risen at roughly double that rate.2 To NTU, it is abundantly clear that innovative approaches to reducing health care costs must be explored and implemented to reorient this unsustainable trajectory toward a more realistic and affordable direction. We believe that thoughtful deployment of prescription drugs (both branded and generic/biosimilar) in more settings, as longer-term alternatives to costlier treatments, can be a vital part of this necessary exercise. Taxpayers, therefore, have a significant stake in how federal and state governments approach prescription drug development, deployment, and payment. The federal government either directly purchases prescription drugs or subsidizes prescription drug coverage for tens of millions of Americans through the Medicare and Medicaid programs. Regulations on both health insurance plans and manufacturers impact when drugs are available to the majority of Americans with private coverage and how much those products will cost. Finally, undertakings such as the 340B Drug Pricing Program have taken prescription drug markets in often-unexpected directions. We commend the Health Resources and Services Administration (HRSA) for its continued engagement in strengthening the 340B Drug Pricing Program through the exploration of a rebate model pilot initiative. Seeking stakeholder input through this Request for Information (RFI) is a positive step forward following legal challenges to previous efforts to reform 340Bs opaque payment practices. While the lawsuit brought by interests representing health care providers paused implementation of HRSAs rebate model pilot program on administrative and procedural grounds, it did not resolve the underlying issues that led to the need for reform in the first place. The court decisions that effectively ended the 2025 pilot program highlight the need for any future initiative to be rolled out on sound legal footing. At the same time, addressing 340Bs weaknesses around transparency, oversight, and program growth remains as urgent as ever. Taxpayers stand to benefit from replacing the current upfront discount structure with a rebate-based payment system that reduces the risk of duplicate discounts between 340B and Medicaid. It is therefore entirely appropriate for HRSA to proceed with a rebate model pilot program to assess the feasibility of this approach. This framework is not about cutting benefits for patientsit is about creating a transparent transaction trail to avoid overlapping discounts that drain taxpayer dollars and erode public trust in government. NTU appreciates the opportunity to file comments on this RFI and stand ready to assist HRSA with our expertise as it moves forward on efforts to improve 340B. Comments Taxpayers Can Benefit from Testing 340B Rebate Concepts As of this date, many comment filers regarding HRSA-2026-03042 represent Covered Entities (CEs) that currently benefit from 340B, along with a few representing other interests in the 2 See early projections of OBBBAs effects on Medicaid spending from the Economic Policy Innovation Center at OBBB Myth vs. Fact: Medicaid Cuts Are Just Washington Math - EPIC for America. 2 health care sector. Yet, it is vital to consider 340Bs impact on taxpayers, and how HRSA-2026-03042 could serve to benefit this often-overlooked constituency. While 340B is regarded as primarily a price discount program for Medicaid providers, the programs breadth and depth is much greater. Medicare Part B and Part D, for example, are not direct participants in 340B, nor do they partake in the discount process. Nonetheless, covered entities can, under certain circumstances, bill Part B and Part D for specified drugs at the lower 340B price and, in turn, get reimbursed from Medicare at the Average Sales Price plus 6% (thereby pocketing a not-inconsiderable profit). It is notable that attempts during the first Trump Administration in 2018 to ratchet down the ASP plus 6% formula to a more reasonable rate were met with lawsuits and a 2022 Supreme Court ruling that struck down the proposed reform. As a result, the Center for Medicare and Medicaid Services decided to provide $10.6 billion in lump sum payments to 340B CEs that [were] paid less due to the now-invalidated policy.3 Taxpayers were the unfortunate guarantors of this windfall. Nowhere is 340Bs adverse impact on taxpayers more acutely felt than at the state level, a fact NTU has uniquely highlighted. Former Wisconsin State Senator Leah Vukmir, NTUs Senior Vice President of State Affairs, has crisscrossed the country to defend taxpayers against state legislation that would force manufacturers to offer 340B prices to contract pharmacies of CEs thereby exacerbating the well-known, longstanding problem of CEs pocketing large differentials between 340B discounts and what they actually charge patients and providers. This pernicious fiscal effect seeps not just into state-level Medicaid systems, but also health insurance plans for state and local government employees that are often heavily taxpayer-subsidized. Vukmirs warnings last year in comments to Tennessees governor provide a vivid illustration of the risks to state taxpayers from 340B expansion. She has repeated similar warnings in 2026 across the country, from Florida and Georgia to Minnesota: The 340B program has expanded significantly over the years with little transparency or accountability, allowing entities that receive discounted drugs from manufacturers to profit from the price differencerather than passing those savings on to patients. Instead of primarily benefiting low-income communities, there has been a proliferation of 340B pharmacies in wealthier neighborhoods, often affiliated with for-profit Pharmacy Benefit Managers (PBMs) and chain drugstores. A 2024 Pioneer Institute Report found 46% of 340B pharmacies supposedly serving the poor are in affluent neighborhoods in Tennessee. I urge you to carefully scrutinize the potential financial implications of SB 1414 for Tennessees state-funded health care programs. Three separate fiscal notes issued on SB 1414 provide contradictory assessments of the bills financial implications. It is my humble opinion that many serious questions have not been asked, and a more thorough investigation of this policys impact on your state budget must take place. 3 For further explanation and analysis, see the CMS announcement at: Hospital Outpatient Prospective Payment System (OPPS): Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022 Final Rule (CMS 1793-F) | CMS 3 Depending on the fiscal note, SB 1414 could cost the state between $7.4 million and $29.8 million. The latest fiscal note claims the bills impact on the state is not significant and then proceeds to report the bill will result in increased expenditures to the State Group Insurance Program. These are glaring inconsistencies that must be addressed before moving forward. Lessons can be learned from other states that have introduced similar 340B legislation. A recent fiscal analysis in Utah found that a 10% increase in drugs purchased through 340B would result in a loss of nearly $2 million in drug rebatesa cost that ultimately falls on taxpayers. In North Carolina, state health plan patients covered under 340B contracts are being charged significantly higher prices, with copays based on inflated list prices rather than the discounted acquisition costs. A recent report from North Carolina State Treasurer Dale Folwell found that hospitals in the 340B program were overcharging cancer patients at rates averaging five times the cost of the actual drugsa burden borne not just by patients but by taxpayers as well. The North Carolina State Health Plan now faces an unfunded health care liability of $32 billion. Similar concerns have been raised in Minnesota, where a 2023 report from the Minnesota Department of Health revealed that 340B hospitals generated at least $630 million in net revenuelikely only half of the true amountwith the states largest 340B hospitals benefiting the most.4 Whether at the federal, state, or local level, a fundamental flaw of many benefit programs is persistent: various categorical and other loosely defined coverage provisions allow recipients to obtain their largesse upfront, leaving government oversight entities to police payment systems after the money has left taxpayer-funded coffers. This arrangement, often described as pay and chase, is a major contributor to some of the worst improper payment rates at all levels of government. Major examples of pay and chase are legion in Medicare and Medicaid, leading to results that leave taxpayers with massive bills for improper payments: In Fiscal Year 2024, the Government Accountability Office (GAO) identified a total of at least $162 billion of improper paymentsa conservative estimate since some entities and programs do not track improper payments. Roughly 84% of the improper payments represent overpayments, many of which are losses that taxpayers cannot easily recover without time-consuming and costly audits, benefit reviews, and even civil actions. More than half of the improper payments for Fiscal Year 2024 come from Medicare ($54.3 billion) and Medicaid ($51.1 billion).5 5 See the GAO improper payments report at: 876591.pdf. 4 The full text of Vukmirs comments to the governor are available at: 340B Expansion in Tennessee Will Exacerbate Drug Prices and Lead to Legal Challenges - Publications - National Taxpayers Union 4 As GAO has pointed out, [w]hile program managers should prioritize prepayment controls, postpayment controls, such as recovery audits, are also important. However, the pay and chase model, where efforts are made to identify and recover improper payments after they are made, can be difficult and expensive.6 While not strictly pay and chase, 340B shares some traits with the wasteful programs that wholly embrace this scheme. The covered entity designation involves a vetting process that can offer some level of protection against improper payments (sometimes, but not always, fraudulent), but the system affords less such protection when day-to-day claims are involved. In 20187 and again in 2020,8 GAO noted the problem of duplicate discounts, whereby manufacturers end up providing the same medication at a 340B markdown price as well as a Medicaid rebate. The proliferation of contract pharmacies participating in 340B, which increased 20-fold over the space of nine years (20102019) due to relaxed restrictions in the Patient Protection and Affordable Care, created numerous points of entry where duplicate discounts could occur. Worse, as GAO and others9 have pointed out, federal oversight has been especially deficient, with GAO noting in 2018 that HRSA had not issued guidance as to how covered entities should prevent duplicate discounts in Medicaid managed care and thus, did not include reviews of covered entities processes to prevent duplicate discounts for drugs dispensed through Medicaid managed care in its audits of the entities. A subsequent 2023 GAO investigation10 into a COVID-era program granting fast-track exceptions to Disproportionate Share Hospital eligibility requirements for hospitals to more quickly and fully participate as 340B covered entities indicated some progressfrom HRSA, the hospitals themselves, and state officials in attempting to identify duplicate discounts. As of mid-2022, GAO reported, HRSA had audited just under half of the excepted hospitals (25 out of 53 total) in this exception carve-out program, noting that: [T]he agency issued a total of 19 findings related to noncompliance for 14 of these hospitals as a result of these audits. Five of the hospitals had more than one finding of noncompliance. The most common finding among the excepted hospitals that were audited related to the potential for duplicate discounts . . . Our review of HRSA documentation found that the 14 hospitals for which HRSA had audit findings all submitted corrective action plans to address these findings, as required by HRSA. However, as we previously reported, HRSA does not require all covered 10 See the GAO report at: gao-23-106095.pdf. 9 GAOs 2020 report helpfully provides the following background material that could inform HRSAs pilot design: Department of Health and Human Services, Office of Inspector General, State Efforts To Exclude 340B Drugs From Medicaid Managed Care Rebates, Report Number OEI-05-14-00430 (Washington, D.C.: June 2016); National Association of Medicaid Directors, NAMD Working Paper Series, Medicaid and the 340B Program: Alignment and Modernization Opportunities, (Washington, D.C.: May 13, 2015); and Medicaid and CHIP Payment and Access Commission, Issue Brief, The 340B Drug Pricing Program and Medicaid Drug Rebate Program: How They Interact, (Washington, D.C.: May 2018). 8 See the GAO report at: gao-20-212.pdf 7 See the GAO report at: gao-18-480.pdf. 6 See GAOs recommendations for strategies to control improper payments at: https://www.gao.gov/assets/gao-23-105876.pdf. 5 entities (including all hospitals) to provide evidence of successful implementation of the corrective actions prior to GAO-23-106095 340B Drug Discount Program closing audits and instead relies on the entities to self-attest that the audit findings have been addressed. Of the 25 hospitals that were audited, HRSA also issued a total of 39 areas for improvement for 22 of the hospitals. Areas for improvement are based on a covered entitys failure to follow best practices that may reflect applicable guidance, but not statutory requirements and do not require corrective action plans. On its own, HRSA-2026-03042 cannot rectify all of these oversight shortcomings. More codification from Congress and HRSA of how and when audits should be conducted, and the obligations of covered entities to implement remedies, is vital to taxpayers. Statutory and regulatory responses are also needed to get a handle on the involvement of contract pharmacies in this process. Yet, a rebate model pilot program can have a salutary impact on both imperatives, by offering the opportunity to determine whether a system that provides timely rebates will allow for better cost control. With so many contract pharmacies and covered entities operating in a regulatory environment that leaves HRSA at an oversight disadvantage amid continuing program growth, it is wise for HRSA to test methods of discount processing that will provide more near-term, near real-time data on program integrity that 340B does not currently foster. Operational and Logistical Aspects of a Rebate Model Pilot Program Can Be Drawn from Successes and Failures Elsewhere in Government Although NTU does not profess wide expertise in the intricacies of 340B discounts and their associated transactions, we have witnessed programmatic approaches to administration of government programs that range from the promising to the problematic. We humbly offer the following suggestions for measuring paperwork burdens consistently and accurately. The medical world is no stranger to electronic transaction processing and recordkeeping, and the same can be said for the tax world in which NTU often deeply participates as a policy advocate. As part of our mission, we have devoted a great deal of effort toward exploring the compliance burdens of various government regulations, chiefly those resulting from tax laws. Since 1999, NTUs research arm (NTUF) has published an annual report on the time, material, and other costs to the public and private sectors associated with administration of the complex tax system.11 However, we have also provided analysis and commentary on regulatory burdens in other areas, including rulemakings issued by the Federal Trade Commission, the Department of Energy, the Surface Transportation Board, and the Federal Housing Finance Agency, to name a few.12 12 See, for example, https://www.ntu.org/publications/detail/ntu-comments-on-irs-proposed-rule-for-supervisory-approval-of-penalties; https://www.ntu.org/publications/detail/ntu-offers-comments-to-the-surface-transportation-board-on-reciprocal-switc hing; and https://www.ntu.org/publications/detail/ntu-comments-to-the-ftc-on-the-contact-lens-rule. 11 See, for example, The Hidden Cost of the Tax Code: 6.93 Billion Hours and More Than $477 Billion in Total Compliance Burdens - Foundation - National Taxpayers Union. 6 In our experience, these rulemakings, guidance documents, and pilot programs have diverse intentions and mechanics, but can reflect common drawbacks: Whether they are initially the product of robust stakeholder input or not, they tend to lack ongoing input to help improve their effectiveness over time. Paperwork burden and information collection estimates concentrate on the design of products such as forms or payment platforms, without also devoting attention to recordkeeping requirements, training, and legitimate private sector concerns over exposure to new enforcement actions. Implementation periods and learning curves vary from sector to sector and often among regulated businesses and individuals that appear to be similarly situated to regulators but actually are quite different. HRSA can at least minimize these problems by adapting solutions that have proven useful to other agencies, or at least instructive to agencies whose processes are evolving. This is especially true for tools employed in the tax realm, where regulations, notices, guidance, and other pronouncements rival or exceed those confronted by stakeholders in the health care industry. While CMS and HRSA already have several advisory panels (e.g., the Pharmaceutical and Therapeutics Committee) and other consultation processes at their disposal closely resembling several of the following suggested remedies, we nonetheless believe these are useful starting points: Adequate implementation periods, which can be further adjusted as feedback informs the pace of change, should be provided. While seemingly simplistic, the element of time not only affords the private sector adequate planning to institute new systems, but it also allows the public sector to discover and address the unknowns while the process is underway rather than attempt to de-bug a process that has been hastily completed. Successful projects proposing major changes can still start from a common and familiar knowledge base. In the case of HRSA-2026-03042, that knowledge base already exists to some degree for actors in the 340B universe. If CMS is to learn the most from a rebate model pilot program, it must ensure that the most widely understood procedures those actors now use are initially promulgated. Mechanisms are available to provide more regular feedback from stakeholders. One technique that NTU would recommend for HRSAs study is the Internal Revenue Services Job Aid concept. While they can vary in their composition and operation, Job Aids are generally initiated by the IRS for either members of its own staff or the practitioner community as how-to guides for ensuring best practices in carrying out the intent of tax regulations. In HRSAs case, well-designed pilots for 340B rebates might be net labor-savers when all the value of time spent by providers, covered entities, manufacturers, and regulators themselves is taken into account. The key here is to realistically appraise that value based on the specialties involved. For example, those who would most often come into contact with the pilots operations on a daily basis may 7 require a sophisticated knowledge of complex 340B law that exceeds the normal requirements that a health insurance claims clerk might face. HRSA needs an accurate view into how these professions are compensated to determine labor costs or savings to the whole private sector of the pilots. A Rebate Model Pilot Program Can and Should Be Able to Inform 340B Modernization Efforts Currently Underway in the Legislative Branch In the current and previous congresses, lawmakers have introduced legislation that would make major changes to the 340B program. For example, HR 4581 (119th Congress), sponsored by Rep. Matsui (D-HI) (and a Senate companion sponsored by Senator Welch, (D-VT)) requires drug manufacturers to offer drug discount pricing pursuant to an agreement [under 340B rules] with respect to drugs purchased by a covered entity regardless of the manner or location in which the drug is dispensed, effectively codifying that contract pharmacies are to be treated like any other intermediary in the 340B program.13 HR 8574 (118th Congress), sponsored by Rep. Buchson (R-IN), would make a number of changes to 340B, including clearer definitions of what constitutes a 340B patient, guardrails on how contract pharmacies may participate, more robust and transparent data collection on how 340B operates, improvements to qualifications for 340B hospitals, and more complete program integrity authority.14 A rebate model pilot program could provide useful data that will give a better view into some of the more persistent issues surrounding 340B that this legislation intends to addressespecially HR 8574, but even HR 4581 as well. These include: Whether contract pharmacies are more or less susceptible to erroneous or duplicative claims; Whether the rebate models are sufficiently responsive to provide payments within or near replenishment windows; Whether the rebate concept adversely affects the operations of DSH facilities or places particular burdens on rural establishments; Whether manufacturer-funded rebate platforms add to or subtract from administrative overhead costs compared to current procedure, for either manufacturers or covered entities; Whether the 340B programs original purpose of providing discounted medications to those in need is more efficiently and effectively served under a rebate-driven model, given the finite resources available in the public and private sectors; And, most importantly from NTUs perspective, whether taxpayers experience a calculable net gain (or at least fewer losses) from a pilot program compared to the status quo. 14 See the text of the legislation at: Text - H.R.8574 - 118th Congress (2023-2024): 340B ACCESS Act | Congress.gov | Library of Congress 13 See the text of the legislation at: Text - H.R.4581 - 119th Congress (2025-2026): 340B PATIENTS Act of 2025 | Congress.gov | Library of Congress 8 At this point, NTU wishes to make clear its longstanding position on 340B reforms. In 2020, NTU responded to a request from the Senate Health, Education, Labor, and Pensions (HELP) Committee on 340B reforms with the following summary of recommendations to support: A temporary moratorium on new 340B enrollees while Congress, GAO, and the HHS IG conduct oversight of program deficiencies; Changes to the 340B statute that clarify the definition of a 340B patient; A re-evaluation of whether DSH hospitals should participate in 340B based on DSH status alone; Enhancements to HRSAs regulatory, enforcement, and data collection capabilities so that the agency can better monitor hospital eligibility, duplicate discounts, and more; Targeted additional resources to HRSA to enable it to fully oversee the 340B program, monitor compliance, and enforce sanctions on entities that break the rules; Additional reporting from 340B entities to HHS, to clarify who benefits from the program, at what level, and how those trends change over time; and A careful study of how large, national contract pharmacies may or may not benefit from the 340B program.15 Nearly six years since NTU weighed in with its 340B recommendations, much additional work remains. Yet, another years-long investigation launched under the auspices of HELP provided a decidedly mixed picture of 340B oversight, noting that, while some hospital systems utilized the discounts as intended, others diverted 340B funds into capital and other projects. Furthermore, contract pharmacies have, in some cases, increasingly resorted to a plethora of fees to charge covered entities for their services, cumbersome inventory and replenishment models increase the chances of non-340B drugs intermixing with 340B-eligible medications, while other porous rules can allow covered entities and third-party administrators to harvest claims.16 While the details surrounding 340B program costs can vary due to insufficient data collection, the bottom line to taxpayers is clearhigher federal budget deficits, and, in some cases, higher state budget shortfalls. As Dan Crippen, former Director of the Congressional Budget Office (CBO) put it in a 2024 report: Even at current levels, the 340B Program results in a large transfer of taxable income to non-profit entities. As a result, last year alone, federal and state tax revenues were reduced by as much as $17B [billion]. Other spillover effects of the discounts reduce revenue even more. The subsidies to covered entities also contribute to an increase in government spending on other health programs, including Medicare Part D . . . Unlike many other off-budget programs, the indirect impacts of the 340B Program on the federal budget and the deficit have not been documented. The effects of the 340B Program, however, are nonetheless contributing to the federal deficit. Any legislation that has an impact on the budget, now or in the future, is implicitly included in current budget 16 For a full copy of the Senate report, see: final_340b_majority_staff_reportpdf.pdf. 15 For further details on NTUs recommendations, see our memo to the Committee at: 340B Program Must Be Reformed to Achieve Its Intended Purpose - Publications - National Taxpayers Union. 9 baselines, including CBOs baseline. Accordingly, any legislated reduction in 340B subsidies would result in a decrease in the federal deficit. Any increase in the subsidies would increase the federal deficit.17 A rebate model pilot program cannot serve as a replacement or surrogate for larger policy agendas surrounding 340B; however, it can and should serve to provide vital empirical evidence that can better inform regulatory and legislative paths forward on the future of 340B for all stakeholders. Americas Flourishing Pharmaceutical Environment Has Been Polluted with Toxic Policy, and a Rebate Model Pilot Program Must Serve as One of Many Necessary Clean-up Efforts Policymakers need to recognize that the U.S. already benefits from a strong pharmaceutical ecosystem. Nearly 90% of all blockbuster drugs are available to patients, and more than 90% of prescriptions are filled via generics, both of which serve taxpayers well. This balance of access and affordability means that government health care programs benefit over the long term from drug breakthroughs that reduce costly hospital stays and other treatments, and benefit over the nearer term from the price competition that generics provide. Unfortunately for U.S. patients, federal policy in recent years has singled out drug manufacturers with price controls while leaving other actors such as pharmacy benefit managers, insurers, and hospitals out of comprehensive, balanced policy solutions. Setting drug prices below the cost of research and development doesnt lead to increased efficiency, it simply discourages private investment in pharmaceutical innovation. It is no coincidence that pharmaceutical firms have already discontinued 26 drugs and 56 research programs18 since the enactment of the Inflation Reduction Acts drug price negotiation program, which effectively functions as a government-mandated price control. And, because some drugs falling under coercive negotiation have generic equivalents under development but not yet marketed, there can be a strong deterrent effect on private investment in generics as well. Moreover, Most-Favored-Nation (MFN) drug pricing initiatives will similarly result in shortages that harm patients and taxpayers alike. By tying Medicare and Medicaids drug reimbursement to prices set in European health systems that rely heavily on government mandates instead of market competition, MFN effectively imports foreign price controls that result in delayed patient access to new therapies. This would only further exacerbate the burden federal health programs impose on taxpayers by increasing reliance on expensive hospital stays and other treatments that could be avoided with access to effective drugs. These price controls risk jeopardizing the delicate balance of access and affordability for drugs that exists in the U.S., a balance not found anywhere else in the world. The current state of 340B adds insult to injury. Initially created as a backstop for safety-net hospitals, 340B has morphed into a subsidy for tax-exempt health care providers that comes at the expense of drug developers and ultimately patients who depend on those treatments. 18 https://lifesciencetracker.com/ 17 See Director Crippens memo on this topic at: AIR340B-CBO-Memo.pdf. 10 A coalition of organizations and individuals (including senior advisors to the Trump Administration) have developed a policy blueprint known as Most Favored Patient that harnesses free-market ideas on behalf of a health care system that is affordable, innovative, and puts patients first. One plank of Most Favored Patient is to require insurer-PBMs and hospitals to pass all drug rebates and discounts directly to patients, families, and those most in need19 a goal that can align with the precepts of HRSA-2026-03042. Hospitals that currently benefit from the 340B program are certain to object to HRSA-2026-03042, just as they did to this RFIs previous iteration. Nonetheless, we would urge HRSA to bear in mind the overall federal policy context in which the RFI is being issued. As one of the authors of these comments has noted: [R]ising prices for hospital services arent the result of a functioning free market, but rather of perverse incentives created by the government that reward hospitals for their size instead of the value they provide patients . . . As a result of distortive policies that encourage hospitals to merge and consolidate, nearly half of all metropolitan areas across the country had just one or two hospital systems controlling the market for inpatient care in 2022. Its not just the federal government reducing competition in hospital markets. State-level certificate of need laws require health care providers to obtain government approval before expanding facilities or offering new services. While these laws aim to reduce waste, in effect they let local bureaucrats shield established hospitals from new competition. A study found that overall health care costs were approximately 11% higher in states with certificate of need laws versus those without them. NTUs point here is that there are many government-driven factors that impact the fiscal state of hospitals, and HRSA should not be deterred from experiments that address just one area of 340B hospitals operations. HRSA should take every opportunity to make incremental gains to the body of policy knowledge that will be necessary to approach larger 340B reforms from an informed and thoughtful perspective. Thank you for your consideration of these comments, and, should you have any questions on this or any other fiscal or regulatory matter before HRSA, we are at your service. Sincerely and respectfully, Pete Sepp, President National Taxpayers Union Alexander Ciccone, Policy and Government Affairs Manager National Taxpayers Union 19 See the Most Favored Patient blueprint at: Most Favored Patient. 11
HRSA-2026-0001-1934Advocates for Community Health2026-04-20T04:00Z8,880 chars
Please see attached comment from the Advocates for Community Health. April 20, 2026 Tom Engels Administrator Health Resources and Services Administration 5600 Fishers Ln, Rockville, MD 20852 HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, Thank you for the opportunity to provide feedback on the 340B Rebate Model Pilot Program as announced by the Health Resources and Services Administration (HRSA) in the Federal Register on February 17, 2026. On behalf of Advocates for Community Health (ACH), a member organization focused on advocacy initiatives to affect positive change for community health centers (CHCs), the patients they serve, and the entire nations health care system, we encourage HRSA to consider an alternative option in order to prevent duplicate discounts and improve 340B program oversight: create a neutral claims clearinghouse operated by HHS to which covered entities submit relevant claims data. ACHs 51 members serve over 4 million patients across 22 states, Puerto Rico, and the District of Columbia. ACH is a longstanding proponent of reform of the 340B program, calling for increased accountability and transparency from all covered entities, authority for HRSA to institute stronger guardrails to protect against diversion and duplicate discounts, and protections for CHCs to leverage the program to reinvest savings directly into patient care. With regards to the specific questions posted in the RFI, we refer you to the comment submitted by the National Association of Community Health Centers (NACHC), which has done extensive work tracking the projected impacts on health centers across the United States, and the hundreds of community health centers that have taken the time to enumerate the burden on their organizations and their patients. Through a nationwide survey, NACHC found that CHCs report an average loss of $50,000 to $4 million from entity-owned pharmacy operations, $5,000 to $720,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation, and an average of $3 million in additional costs annually simply to manage the pilot. For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure. From a NACHC survey, nearly 75 percent of rural health centers spent at least five percent of their 340B savings on mobile clinics, with nearly eight percent spending 20 percent or more. Rural health centers also reported utilizing 340B savings for mental health services, nutrition programs, and capital investment. It is difficult to justify this kind of fiscal and administrative burden on CHCs, the entities that best exemplify the original intent of the 340B program, which is to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. (H.R. Rep. No. 102-384(II), at 12 (1992)). In fact, federal law prohibits these funds from being used for any purpose other than advancing the objective of the health center project. Subsection 330(e)(5)(D) of the Public Health Service Act requires health centers to reinvest all savings into activities that promote the purpose of their grant, and advance their mission of providing care to medically underserved populations. Further, 45 CFR 75.307 requires that program income be actively used either to further the objectives of the health center project, or to reduce the amount of the Federal grant. A recent survey of ACH members found that one out of every four dollars in 340B savings goes to support rural patients, including maintaining rural clinic sites, providing telehealth services, mobile access clinics, and school-based clinics in rural areas. CHC purchases under the 340B program represent just 5.8% of overall covered entity purchases (OPA), and do not pose a significant compliance risk. Since 2012, CHCs have undergone regular oversight audits from HRSA, and consistently conduct their own internal audits for compliance with all federal guidance and regulations. Even if one accepts the premise that a rebate model might achieve marginal compliance improvement, its outweighed by the significant risk it poses to the financial stability and operations of thousands of safety net providers across the country. CHCs are already facing workforce shortages, forthcoming expected losses of Medicaid revenue, and other challenges. The increased administrative burden and financial risk CHCs would have to undergo to participate in the pilot is expected to be significant and will limit their ability to provide high quality and comprehensive care using 340B savings. Health centers will have to add senior level staff with experience and sophistication to track rebates across multiple different models, third party administrators (TPAs), and contract pharmacies. They will need to submit data reports, and submit disputes when manufacturers ultimately do not comply. Resource estimates have increased based on initial interactions with the Beacon system, which has mismanaged the roll-out of the IRA refund process this year, issuing inappropriate refunds to entities and accruing a backlog of resolution requests. Resources needed to hire these staff and set up these processes take away from resources that could be dedicated to patient care. Furthermore, the Pilot Program may impact uninsured access to affordable medications. If the program transitions to a rebate program, CHCs may also face difficulty offering a sliding fee scale to uninsured patients. More specifically, if a CHC assumes a 340B eligible drug and provides a sliding fee scale based on that purchase price, but a rebate isnt paid, CHCs cannot go back to charge the patient more; they will have to absorb that cost. CHCs may have to restructure how they are offering sliding fee scales depending on their cash flow reserves. If required to participate in the rebate model, community-based providers will have to invest in costly overhaul of their internal and external systems without guarantee that their rebate requests to which they are legally entitled will be paid. The rebate model clearly prioritizes the convenience and financial success of large, for-profit corporations, rather than health centers working in underserved communities, whose sole goal is to invest 340B savings back into care for the patients they serve. To be clear, ACH understands and supports the intent behind the rebate model pilot. There is a potential duplicate discount between Maximum Fair Price in the Medicare program and the 340B discount that covered entities receive, and the government needs a system in place to comply with the law preventing this. Rather than impose a burdensome, risky rebate model, instead, HRSA should require covered entities to submit claims to a neutral clearinghouse operated by HHS. A clearinghouse would maintain HHS as the ultimate arbiter of proper 340B discounts, and provide a neutral, centralized model free of conflict of interest. Testing this model is an ideal way to develop a duplicate discount prevention approach that can minimize administrative burden, and decrease risk for community health centers and other covered entities, while complying with federal law. The idea has clear precedent. The Centers for Medicare & Medicaid Services (CMS) is using a claims data repository to identify 340B units for the calculation of Medicare inflation rebates required under the Inflation Reduction Act (IRA); this repository could be used for the purposes of this pilot. In addition, this model is currently underway in the state of Oregon to prevent duplicate discounts in Medicaid, and has received bipartisan support from Congress through various legislative proposals. Should HRSA ultimately decide that the agency needs to pilot a rebate model program, we urge the agency to consider exempting smaller entities from the rebate model given the wide range of concerns. Instead, we recommend testing a clearinghouse concept with entities with lower operating revenue, allowing two concepts for 340B program oversight to be piloted while minimizing administrative burden on small organizations. Thank you again for the opportunity to provide feedback. ACH welcomes the opportunity to serve as a resource and partner in supporting the development of a model that fully considers the best interests of CHCs and the patients they serve. For more information, please contact me at apearskelly@advocatesforcommunityhealth.org and/or Stephanie Krenrich, Senior Vice President of Policy and Government Affairs, at skrenrich@advocatesforcommunityhealth.org. Sincerely, Amanda Pears Kelly Chief Executive Officer Advocates for Community Health
HRSA-2026-0001-1935Jora Bolena · Spokane, WA, United States2026-04-20T04:00Z216,070 chars
See attached file(s) Please see attached file. April 16th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of The NATIVE Project, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: The NATIVE Project anticipates an increased upfront annual drug spend of $1.2M from entity-owned pharmacy operations. This represents a 2,175,203% increase in upfront inventory spend. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For The NATIVE Project in particular, this means it will negatively impact: 2 Over 3500 patients that we serve in our community We utilize our 340B savings to offer and support a multitude of services for our underserved patient population: o Youth Behavioral Health o Dental o Pharmacy o Prevention and wellness programs o Care Coordination o Community educational promotions o Primary Care o Mobile medical visits All of the above-mentioned programs are at risk of being reduced or eliminated with the passage of this rebate pilot program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 5 A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: The NATIVE Project provided $35,785 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. We have thousands of patients who rely on our discounted pricing for brand name medication. This proposed rebate model will eliminate almost all of those patients from receiving pharmaceutical care. Staffing Impact: The NATIVE Project anticipates needing at least 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, The NATIVE Project anticipates an increase of $250,000 to $300,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 payments. At least 30-40 hours a week will be required to report and monitor 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. The NATIVE Project urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. About $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 3500 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $191,984 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 5-10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Under a 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 proposed rebate model, the NATIVE Project will have to offer the WAC pricing due to the delay in receiving the rebate payment. Our organization does not know which rebate claim will come back as accepted or denied, so we will have to charge the WAC pricing. For medications like Jardiance, that means a $10 drug will now be $630 for patients on our sliding fee plan. Our pharmacy utilized our in-house sliding fee plan on over 7500 claims. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $464,495.96 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $19,285.70 to purchase these same drugs at the 340B ceiling price. This represents a 2309% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The NATIVE Project anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as wellness prevention programs for our community, summer program for the children, and Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund an additional behavioral health therapist, ancillary medical staff, and patient services representative directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 335 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. The NATIVE Project asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, The NATIVE Project estimates its 2027 Annual Rebate Opportunity Cost to be approximately 11 $296,103.73. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. The NATIVE Project estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $37,100 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to pull a line of credit or eliminate services we provide for our community. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on The NATIVE Project, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays The NATIVE Project urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of 46,449.50. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.15 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase 15 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 13 costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.16 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,17 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails 16 340B House Report Legislative History. H.R. REP. 102-384(II). 17 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 14 HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.18 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on 18 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 15 access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes19 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where 19 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.20 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.21 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. 20 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 21 Internal NACHC survey data 17 For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. 18 VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,22 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.23 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.24 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of 22 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 23 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 24 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 19 covered entity.25 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.27 The only rebate mechanism HHS has contended 25 H.R. REP. 102-384(II) 26 42 U.S.C. 256b(a)(1) 27 Id. 20 is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.29 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.30 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.31 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts 28 42 U.S.C. 256b(a)(1) 29 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 30 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 31 42 U.S.C. 256b(a)(5)(C). 21 and has billed a 340B drug claim to a state Medicaid FFS plan.32 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.33 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.34 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the 32 42 U.S.C. 256b(a)(5)(C). 33 See 42 U.S.C 256b(a)(5)(A). 34 C.F.R. 447.518(a). 22 Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led 23 clearinghouse repository.35 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.36 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.37 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.38 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this 35 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 36 42 C.F.R. 447.502 37 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 38 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 24 federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.39 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 39 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 25 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.41 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.42 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 41 42 U.S.C. 256b(a)(5)(A)(emphasis added). 42 32 C.F.R. 199.21(q)(2)(iii)(E) 26 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.43 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.44 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.45 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.46 They are negotiated with market discounts, including 340B discounts, already 43 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 27 factored into their high drug list prices.47 Drug industry data vendors have reported that such data is highly valuable to manufacturers.48 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.49 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.50 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.51 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.52 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 49 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 50 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 51 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 52 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 28 Third Circuit has made clear, obligations cannot spring from silence.53 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.54 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.55 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or 53 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 54 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 55 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 29 transferring 340B drugs to nonpatients.56 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.57And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.58 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 56 42 U.S.C. 256b(a)(5)(B) 57 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 58 H.R. REP. 102-384, 16 30 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. 31 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model59 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 59 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 32 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The NATIVE Project strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The NATIVE Project believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 33 The NATIVE Project appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact The NATIVE Project at 509-483- 7535 or Jora Bolena, PharmD jbolena@nativeproject.org. Sincerely, Toni Lodge CEO The NATIVE Project April 16th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of The NATIVE Project, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: The NATIVE Project anticipates an increased upfront annual drug spend of $1.2M from entity-owned pharmacy operations. This represents a 2,175,203% increase in upfront inventory spend. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For The NATIVE Project in particular, this means it will negatively impact: Over 3500 patients that we serve in our community We utilize our 340B savings to offer and support a multitude of services for our underserved patient population: Youth Behavioral Health Dental Pharmacy Prevention and wellness programs Care Coordination Community educational promotions Primary Care Mobile medical visits All of the above-mentioned programs are at risk of being reduced or eliminated with the passage of this rebate pilot program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: The NATIVE Project provided $35,785 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. We have thousands of patients who rely on our discounted pricing for brand name medication. This proposed rebate model will eliminate almost all of those patients from receiving pharmaceutical care. Staffing Impact: The NATIVE Project anticipates needing at least 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, The NATIVE Project anticipates an increase of $250,000 to $300,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 30-40 hours a week will be required to report and monitor 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. The NATIVE Project urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. About $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 3500 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $191,984 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 5-10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Under a proposed rebate model, the NATIVE Project will have to offer the WAC pricing due to the delay in receiving the rebate payment. Our organization does not know which rebate claim will come back as accepted or denied, so we will have to charge the WAC pricing. For medications like Jardiance, that means a $10 drug will now be $630 for patients on our sliding fee plan. Our pharmacy utilized our in-house sliding fee plan on over 7500 claims. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $464,495.96 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $19,285.70 to purchase these same drugs at the 340B ceiling price. This represents a 2309% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The NATIVE Project anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as wellness prevention programs for our community, summer program for the children, and Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund an additional behavioral health therapist, ancillary medical staff, and patient services representative directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 335 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. The NATIVE Project asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, The NATIVE Project estimates its 2027 Annual Rebate Opportunity Cost to be approximately $296,103.73. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. The NATIVE Project estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $37,100 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to pull a line of credit or eliminate services we provide for our community. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on The NATIVE Project, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. Financial Impact of Rebate Denials and Delays The NATIVE Project urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of 46,449.50. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. The 340B Rebate Models Incompatibility with Deduplication Efforts Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data. This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The NATIVE Project strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The NATIVE Project believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The NATIVE Project appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact The NATIVE Project at 509-483-7535 or Jora Bolena, PharmD jbolena@nativeproject.org. Sincerely, Toni Lodge CEO The NATIVE Project
HRSA-2026-0001-1936Mount Sinai Health System2026-04-20T04:00Z20,866 chars
Dear Administrator Engels, Please see attached the Mount Sinai Health System's comment submission for the Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042). We thank HRSA for the opportunity and appreciation your consideration of our comment. 1 April 20, 2026 Via Electronic Submission - http://www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels, On behalf of the Mount Sinai Health System, we respectfully submit these comments on the Health Resources and Services Administrations (HRSAs) Request for Information: 340B Rebate Model Pilot Program; (HRSA202603042). The Mount Sinai Health System (MSHS) is one of the largest academic medical systems in the New York metro area, with 48,000 employees working across seven hospitals and more than 400 outpatient clinics and practices, and a leading school of medicine and graduate education. We have a longstanding mission and commitment to the underserved and have participated in the 340B program as a covered entity for decades. Savings from the 340B program allow Mount Sinai to devote resources to our many community benefit programs throughout the system, in addition to providing charity care to uninsured and underinsured patients. Without the savings from the 340B program, our ability to sustain and support this extraordinary level of community programming and support would be dramatically impacted. General Comments Mount Sinai strongly supports HRSAs mission to safeguard and enhance the Program; however, we firmly oppose the adoption of a rebate model. We believe the current framework already provides the statutory protections needed to ensure 340B program integrity. A rebate structure would create substantial operational burdens and financial risks to covered entities, while potentially enabling the pharmaceutical industry to wrest control over the scope of the Program by restricting Program definitions and rebates to ultimately deny covered entities the savings they are due. Maintaining upfront discounts is a fundamental tenet of the 340B program and allows us to subsidize critical health services and provide financial assistance to communities with very limited resources and means. Rather than improving oversight, a rebate 2 model would undermine the stability and effectiveness of a program that has successfully served patients and providers for decades. We strongly urge HRSA and HHS to re-evaluate the initiation of this or any other proposal that may ultimately result in a complete re-design of the 340B program. However, should a rebate model move forward, we strongly recommend that it contain the following: A neutral, HRSA-controlled clearinghouse to streamline data submission and secure manufacturer compliance Enforceable payment standards Uniform and transparent rebate operations and oversight Prohibition of the expansion of duplicate discount policies beyond statutory Medicaid requirements Consistent and relevant data elements and standards and strong privacy protections We provide more detail about each of these critical recommendations in the comments below. 1. Costs to Covered Entities A. Financial and Administrative Costs A rebate model undermines the core purpose of the 340B Program to sustain essential services for the community. The immediate and predictable savings generated by the upfront discount structure is the foundational element of the 340B model that assures this sustainability. Replacing this proven mechanism with a delayed and uncertain rebate process would force covered entities to purchase drugs at full Wholesale Acquisition Cost, often several times higher than the 340B price, while waiting for reimbursement that may be delayed, disputed, or withheld altogether. This exposes covered entities to substantial financial risk and threatens the very core mission of the 340B program. A rebate model would also impose a sweeping expansion of administrative obligations. Covered entities would be required to build and maintain new systems for rebate validation, claims level reconciliation, payment tracking, late-payment identification, formal dispute resolution, and claims reprocessing. These functions and the staff to perform them -- do not exist under the current upfront discount model. These added requirements would divert resources away from patient care and force covered entities to absorb significant new operational costs simply to access the savings the program already provides today. Implementing a rebate-based 340B model would also require significant new software and infrastructure investments. Mount Sinai would need to build or significantly expand core operational systems, including data exchange interfaces, secure claims-transmission platforms, and contract management tools. These capabilities do not currently exist at the scale or level of automation that a rebate model would require. The new systems would need to support continuous claims-level processing, rebate eligibility validations, claims and payment reconciliation and tracking, and electronic documentation for 3 disputes. Standing up and maintaining this infrastructure represents significant increased costs. The ongoing requirements for real-time data exchange, submission monitoring, and audit-ready recordkeeping would add further operational complexity. Given the magnitude of these startup and recurring costs, HRSA must fully account for the infrastructure and administrative burden associated with any potential transition to a 340B rebate model when it considers the costs and benefits of this proposal. This is particularly relevant since we do not see any benefits of a rebate model to the Program or to HRSA, only to the pharmaceutical manufacturers. Moreover, the manufacturers predicate for requesting a rebate model is unfounded. Their claim that the Program is riddled with inappropriate diversion of claims and duplicate discounts is not supported by any evidence. To the contrary, HRSAs audits of Covered Entities demonstrate that this is not a substantive issue.1,2 B. Staffing Impacts A rebate model would impose staffing demands that far exceed the capacity of already overextended teams and directly undermine providers ability to deliver patient care. Covered entities would be forced to take on an entirely new layer of operational responsibilities, executing complex data exchange contracts, evaluating impacts on patient services, tracking and validating every rebate claim, monitoring- payment timelines, and managing disputes, all while maintaining existing compliance obligations and day to- day- clinical operations. This is not a marginal adjustment; it is a wholesale expansion of workload that providers are not resourced to absorb that goes beyond 340B operations, which will also include revenue cycle integrity. Every stage of the rebate process would demand new staff training, additional personnel time, and continuous resource allocation. This creates an unsustainable administrative burden that diverts staff away from patient care and stretches safety- net- providers beyond their limits. We are particularly concerned that a rebate model would shift enforcement of manufacturers practices, traditionally and appropriately handled by regulators, to covered entities. Providers would be forced to police manufacturer compliance, track late or missing payments, and manage disputes, effectively turning frontline health care organizations into enforcement bodies. This shift would drain administrative capacity and further erode the resources needed to serve vulnerable patients. 2. Cash Flow Impact and Timing of Payments A. Impact of Payment Timing on Cash Flow 1 https://www.hrsa.gov/opa/program-integrity/fy-25-audit-results. Downloaded from HRSA 4/19/2026. Review of the posted FY25 Covered Entity audits indicate that of the 120 audits listed, there were only 14 audits with diversion as a finding, 25 with duplicate discount findings (with most still in pending final action status). 2 https://www.hrsa.gov/opa/program-integrity/fy-24-audit-results. Downloaded from HRSA 4/19/2026. Review of the finalized 179 FY24 Covered Entity audits indicate that there were only 20 audits with state Medicaid- confirmed duplicate discount finding, and only 18 audits with diversion as a finding. 4 A rebate model would shift significant cash flow risk onto covered entities. Without upfront 340B discounts, any delay between drug purchase and rebate reimbursement forces covered entities to carry high acquisition costs for extended periods. Even short lags become material when applied across large drug volumes. Beacon has indicated that rebate payments could take more than 10 days after claim approval, meaning covered entities would shoulder drug costs far longer than manufacturers obligations imply. If HRSA were to adopt any components of a rebate plan, it must set a firm maximum payment timeframe, with consequences for lack of timely payment, and require electronic, traceable payment methods to ensure timely reimbursement. It will be critical for HRSA to clearly define maximum time for actual payment, and clearly state that claim approval notice does not equate to payment transmission. We are extremely concerned that delegating payment timing control to manufacturers creates uncertainty and leaves covered entities with limited recourse when payments are delayed or disputed. This structural mismatch of immediate cash outlays versus delayed reimbursement creates substantial financial exposure. To mitigate these risks, HRSA should adopt enforceable payment deadlines, automatic payment triggers, and remedies for noncompliance, such as interest on late payments. These protections are essential to prevent rebate delays from destabilizing covered entity cash flow. B. Adhering to Payment Timelines Ensuring adherence to the 10 day rebate payment requirement will require HRSA to establish clear, enforceable operational standards. Mount Sinai recommends creating a centralized, standardized mechanism to timestamp both claim submission and rebate receipt, giving all parties a uniform basis for determining whether manufacturers meet the 10 day deadline and reducing administrative burden on covered entities. Enforcement should not rest primarily with providers. Requiring covered entities to track every missed or delayed payment and initiate disputes would impose an unsustainable compliance burden. HRSA should instead take an active oversight role by monitoring manufacturer performance, identifying repeated delays or non-payment patterns, and conducting audits, just as it does for covered entities, to ensure timely payments and proper use of claims data. These steps are essential to ensure that manufacturers consistently meet the proposed 10 day requirement and that the burden of enforcement does not fall disproportionately on covered entities. 3. Rebate Denials Transparency in rebate denials requires eliminating vague categories and enforcing clear documentation. Allowing manufacturers to deny claims under broad labels, such as an unsubstantiated other category, as seen in the Beacon platform, prevents covered entities 5 from understanding the basis for withheld rebates. HRSA should prohibit such categories and require detailed, standardized justification for any denial outside established, clearly defined reasons. Uniform denial processes are essential. HRSA should mandate a single denial template with clear and concrete definitions of what a denial category can include, a consistent set of required data fields, and a standardized documentation package that manufacturers must provide with every denial. We strongly urge that other as a denial category should not be permitted in any initial rollout of a rebate model. These measures would ensure denials are limited to appropriate circumstances and reduce unnecessary administrative burden. Timely resolution is equally important. HRSA should establish a firm deadline for adjudicating improper denials, aligned with any 10-day rebate payment requirement, so covered entities are not left carrying financial uncertainty for extended periods. Parallel timelines for payment and denial adjudication would promote consistency and support predictable cash-flow management. Any rebate model should also include a penalty provision, such that if a manufacturer improperly denies more than ten percent of a covered entitys claims, it shall be required to pay all claims and only adjudicate alleged improper claims through a post-payment refund adjudication process. 4. Data Collection A. Current Data Collection Practices and Challenges Mount Sinai appreciates HRSAs focus on understanding additional data needs under a rebate model. Mount Sinai currently maintains 340B data through internal systems and established vendors, using reconciliation and validation processes to support audit readiness and data integrity. Despite these efforts, covered entities face persistent challenges. The current $1,000 liability cap for platforms transmitting HIPAA-protected data exposes providers to unreasonable risk and does not reflect modern data-exchange realities. Ambiguity in required data fields, unclear definitions, inconsistent formatting, and limited guidance further increases administrative burden and creates variability in reporting. These challenges, combined with the volume and sensitivity of required information, will only intensify without clearer, more structured data expectations. There should also be no liability cap for a HIPAA breach by the manufacturer or any of its designated platforms. B. Importance of Clear Data Standards and Privacy Guardrails Clear, uniform data standards are essential to ensure consistent reporting and reduce administrative burden. HRSA should publish a standardized data dictionary with defined field names, formats, and requirements applicable across all manufacturers. Any expanded data collection must also include strong privacy and security protections, including vendor safeguards, clear liability allocation, and strict limits on data access, use, storage, and sharing. Uniform data-use and security agreements with minimum security standards should be required for all participating vendors and manufacturers. HRSA should also prohibit the use of expanded 6 data elements to create new or arbitrary eligibility rules beyond statutory duplicate-discount prevention. C. Recommendation for a Neutral HRSA-Controlled Claims Clearinghouse If HRSA proceeds with a rebate model, Mount Sinai recommends establishing a neutral claims clearinghouse independent of manufacturers, PBMs, GPOs, or other stakeholders with competing financial interests. A neutral entity would promote standardization, reduce administrative burden, and ensure consistent data submission and reconciliation practices. Even with a single platform, manufacturer-specific variation would persist without independent governance. HRSA should avoid granting any single commercial entity disproportionate control and should minimize unnecessary intermediaries that add cost without improving outcomes. Clear conditions of participation should govern how clearinghouse data may be used, shared, and retained, ensuring sensitive information is not repurposed in ways that disadvantage covered entities. Because reconciliation is often more complex than initial submission, a centralized, neutral structure would support consistent data governance and more uniform oversight. 5. Duplicate Discount Prevention Mount Sinai urges HRSA to maintain a clear distinction between statutory Medicaid duplicate discounts and the separate commercial rebate practices that manufacturers often describe using the same term. The statutory prohibition in 42 USC 256b(a)(5)(A)(i) is narrowly focused on preventing manufacturers from providing both a 340B price and a Medicaid rebate for the same drug unit, whereas manufacturers voluntary commercial arrangements with PBMs, such as formulary-based rebate structures, are unrelated practices that can create their own commercial rebate overlaps. Manufacturers have increasingly conflated these two phenomena, expanding the meaning of duplicate discounts beyond congressional intent and shifting responsibility for commercially driven issues onto covered entities. Because statutory protections already exist, Mount Sinai does not believe a rebate-based model is necessary to prevent duplicate discounts; however, if HRSA pursues such a model, it should be limited strictly to statutory Medicaid duplicate discounts, avoid new data requirements that could enable non-statutory restrictions or patient-definition preferences, and consider a neutral claims clearinghouse to standardize data and reduce manufacturer-driven variability. Mount Sinai therefore recommends that HRSA limit safeguards to those required by statute, prohibit manufacturers from using commercial rebate structures or data demands as de facto 340B restrictions, and ensure that any rebate-based model does not expand manufacturer discretion or impose new operational burdens on covered entities. 7 340B Program Integrity and the Future of the Program Mount Sinai does not support a 340B rebate model and remains concerned that it would undermine core features of the programs long-standing statutory design, which has been relied on upfront discounts to support safety-net providers for more than 30 years. Any shift to delayed rebates would disrupt the substantial operational, financial, compliance, and administrative infrastructure that covered entities have built in reliance on existing guidance. Updated analyses prepared by Mount Sinai show that moving from upfront discounts to delayed rebates would generate significant and escalating carrying costs, many of which may never be recovered. Experience with manufacturer-controlled platforms such as Beacon (specifically 340B ESP) demonstrates that a portion of transactions are routinely rejected and that manufacturers introduce procedural or administrative friction with minimal effort, creating real financial exposure for covered entities. Even more concerning, manufacturers can use these platforms to rely on their own interpretations of the 340B program, such as wholesale revisions to the definition of eligible patient to improperly deny claims. These patterns and potential abuses raise serious concerns that a rebate model would enable the manufacturers to redefine the Program and increase strain over time rather than stabilize program operations. A rebate-based approach also risks complicating HRSA oversight by introducing fragmented, manufacturer-driven implementation practices that may not reduce diversion, improve transparency, or prevent duplicate discounts. Instead, covered entities would face greater operational complexity while manufacturers gain additional discretion over key program functions. For these reasons, Mount Sinai urges HRSA to proceed with caution and ensure that any rebate pilot includes strong guardrails, clear and uniform data standards, and a neutral claims clearinghouse to promote consistency and reduce administrative burden. We respectfully assert that ultimately the realities of operationalizing a rebate model would result in covered entities expending more dollars on non-clinical administrative and infrastructural costs, while likely having less savings generated that go towards funding direct patient care services. We also do not believe that there are any widespread issues of duplicate discounts and or diversion to warrant a change in the Program structure. Any such concerns are substantially overstated and mischaracterized by the manufacturers to justify a rebate model. We strongly urge HRSA to carefully consider the real-life consequences and costs of a rebate model, particularly given the illusory benefits. Above all, any proposal must strengthen rather than destabilize the statutory intent and long-standing operational integrity of the 340B Program. We greatly appreciate your consideration of these comments and remain committed to strengthening and supporting Program improvements. 8 Sincerely, Kenny Yu, PharmD, MBA Senior Vice President and Chief Pharmacy Officer Mount Sinai Health System
HRSA-2026-0001-1937Anonymous Anonymous2026-04-20T04:00Z3,087 chars
Please see attached comment. HRSA RFI Response HRSA-Funded Health Center (California) Submitted on behalf of a HRSA-funded Community Health Center located in California Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a HRSA-funded health center serving a diverse patient population in California, our organization relies on the 340B program to support access to primary care, behavioral health services, pharmacy programs, and enabling services for patients who are uninsured/underinsured. Based on internal modeling of IRA-affected medications, our current annual 340B acquisition cost for these drugs is approximately twenty thousand dollars. Under a rebate-based purchasing model, upfront acquisition costs would increase to more than two million dollars annually. This represents an increase of more than one hundred times the amount currently required to obtain these medications. For a community health center operating within structured grant funding and fixed reimbursement rates, advancing acquisition costs at this level represents a significant change in financial responsibility. Health centers manage resources within defined budgets that are closely tied to patient care delivery, workforce needs, and required program services. Shifts of this magnitude require careful coordination to ensure that core services remain stable. Higher upfront purchasing requirements also introduce additional planning considerations. Even when reimbursement is ultimately received, the timing of those payments becomes an important factor in maintaining consistent operations. Health centers must balance pharmacy purchasing alongside staffing, care coordination, and other essential services that support patient access. A rebate model would also introduce new operational responsibilities, including identifying eligible claims, submitting data, monitoring manufacturer repayment, and reconciling payment differences. These activities would need to be incorporated into existing workflows, often within teams that are already focused on patient care and compliance requirements. Furthermore, even the best designed technical solution is not perfect, so we expect to receive less than 100% of the discounts we are entitled to receive through the 340B legislation. The new systems and added complexity would require us to hire a new highly skilled person to manage the rebate model processes. These changes would re-direct funds away from patient care and reduce our ability to stretch scarce federal resources. The rebate model is at odds with HRSAs stated 340B intent. 340B savings play a direct role in supporting expanded access to care, including chronic disease management, behavioral health services, and programs designed to address barriers to care. Changes to how those savings are realized should consider the connection between funding structure, operational capacity, and patient access. We appreciate HRSAs thoughtful consideration of these factors as it evaluates the proposed rebate model.
HRSA-2026-0001-1938Neighborhood Health Center (NHC)2026-04-20T04:00Z119,078 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Health Center (NHC) in Portland, Oregon, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Neighborhood Health Center (NHC) projects a loss of $148,000.00 from entity-owned pharmacy operations and $744,000.00 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was 2 created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Neighborhood Health Center (NHC) in particular, this means it will impact: 9,523 340B transactions in 2025 representing 636 patients Current admin costs for your 340B program equals including salaries and admin costs equals $984,723.00 340B revenue is reinvested in additional patient services including Behavioral Health Services that are not billable, Clinical Pharmacy support for medication reconciliation as well as RX delivery services to patients within NHCs service are, Community Health Navigators (CHN) supporting patient care management issues and connect patients to much needed community resources. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. Neighborhood Health Center (NHC) has significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and 3 obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or 5 reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Neighborhood Health Center (NHC) provided 1,141 2025 Sliding Fee Discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Neighborhood Health Center (NHC) anticipates needing 1.0 additional FTE, depending on the complexity of the rebate program, to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. There is potentially an need to increase the FTE numbering in order to keep pharmacists providing patient care rather than administrative time to manage the program. External Vendor Costs: Given increased complexity, Neighborhood Health Center (NHC) anticipates an increase to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Neighborhood Health Center (NHC) is hiring 0.5 FTE for 2026, and anticipates needing to hire 0.5 FTE in 2027. 7 Internal NACHC assessment (99 responses). 6 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Neighborhood Health Center (NHC) estimates the cost to hire additional staff to be $91,500 for 1 FTE annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Neighborhood Health Centers (NHC) estimates 20 hours weekly at our in-house pharmacy to reconcile claims and manage price files to maintain medical billing and sliding fee discount program, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Neighborhood Health Center (NHC) urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Neighborhood Health Centers (NHC) estimated one-time cost of $ 25,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 24,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. For Neighborhood Health Centers (NHC) pharmacy software to function correctly and 8 Ibid. 7 allow for the continuation of 340B pricing to our qualified patients Neighborhood Health Center (NHC) will be required to build and maintain an additional pricing structure separate from the WAC files. This will create an additional administrative burden to maintain accurate pricing files for the correct national drug codes. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools if Neighborhood Health Center (NHC) is forced to move to a new software vendor or pay increased costs to our existing vendor as additional API build needs increase. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Neighborhood Health Center (NHC) currently partners with 52 contract pharmacies. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 52 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In Neighborhood Health Centers (NHC) service area, this would leave our 24,000 patients in Clackamas and Washington Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Neighborhood Health Center (NHC) make prescriptions affordable by providing medication delivery services within our service area for patients who are unable to travel to the pharmacy at our Canby Clinic. In addition to delivering medications directly to patients homes, NHC also operates a pharmacy locker at our Tanasbourne Clinic, similar to Amazon pickup lockers. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 Prescriptions are delivered and securely placed in these lockers for patient pickup, helping make medications more accessible for patients who cannot easily travel to the Canby Pharmacy. Another way NHC helps make prescriptions more affordable is through the Neighbors Assistance Fund (NAF), which was established with support from private foundations. This fund helps offset the cost of medications for patients who cannot afford to pay for their prescriptions. Because the fund is limited, assistance is dependent on the availability of outside contributions from generous supporters. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $672,787 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $10,416 to purchase these same drugs at the 340B ceiling price. This represents a 6,360% increase in upfront capital required for procurement. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Neighborhood Health Center (NHC)anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, Neighborhood Health Center (NHC) would be forced to scale back non-revenue-generating but essential services, such as Clinical Pharmacy Services for medication reconciliation for our patients in clinic; prescription delivery to patients in our service area and or closure of the pharmacy locker located in our Tanasbourne Clinic; Behavioral Health Services that are not billable, Clinic Health Navigator (CHN) services which support care management efforts and connecting patients to much needed community resources. Operating Hours: We anticipate needing to reduce some clinic hours by as much as 10-20 hours per week, specifically impacting clinics in rural areas currently open 55 hours a week reduced to 40 hours per week eliminating accessible hours therefore reducing access for many of our patients that work full time jobs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund essential services, such as Clinical Pharmacy services staff, pharmacy delivery services staff, Behavioral Health services staff that are not billable and Clinic Health Navigator (CHN) staff directly decreasing access to essential patient care services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,862 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Neighborhood Health Center (NHC) asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. 12 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Neighborhood Health Center (NHC) estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 102,600. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Neighborhood Health Center (NHC): estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 671,787. This would equate to $1,067,021 in 2027 and $1,223,005 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, Neighborhood Health Center (NHC) would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into a negative operating margin to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Neighborhood Health Center (NHC), the risk of our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Neighborhood Health Center (NHC) urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $ 102,600. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied 14 directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. 16 C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 17 P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data 18 negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. 19 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 20 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 21 by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B 29 Id. 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 22 statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 23 (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states such as Oregon with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 24 Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 26 Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 27 C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing 45 32 C.F.R. 199.21(q)(2)(iii)(E) 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 28 manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 29 and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 30 For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program 59 42 U.S.C. 256b(a)(5)(B) 31 [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 32 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims 33 information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 34 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Neighborhood Health Center (NHC) strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Neighborhood Health Center (NHC)believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Neighborhood Health Center (NHC) appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jeri Weeks, CEO, at weeksj@NHCOregon.org. Sincerely, Jeri Weeks, Chief Executive Officer Neighborhood Health Center (NHC)
HRSA-2026-0001-1939(no commenter metadata)2026-04-20T04:00Z22,513 chars
See attached file(s) Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center 4058 Willows Road Alpine, CA 91901 phone (619) 445-1188 fax (619) 659-3144 www.SIHC.org a consortium comprised of seven Federally recognized Tribes Barona Band of Mission Indians Campo Band of Mission Indians Ewiiaapaayp Band of Kumeyaay Indians Jamul Indian Village of California La Posta Band of Mission Indians Manzanita Band of the Kumeyaay Nation Viejas Band of Kumeyaay Indians April 8, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southern Indian Health Council, Inc. (SIHC), thank you for extending the comment deadline to April 20, 2026. That additional time allowed our organization to conduct a more focused review of the operational, financial, and patient care risks associated with the proposed 340B Rebate Model Pilot Program. The 340B program is essential to SIHCs ability to provide care to vulnerable Native American communities in San Diego County. The proposed rebate model shifts financial and administrative burden away from manufacturers and onto safety-net providers that are directly responsible for patient care. Based on our analysis, SIHC anticipates substantial operational disruption and significant financial harm if required to participate. SIHC projects more than $3 million in additional annual costs associated with this model, driven by increased drug acquisition expense, administrative burden, delayed reimbursement, workforce needs, software changes, and lost purchasing efficiencies. These impacts would be especially severe for tribal health centers, which rely on 340B savings to support patient care, pharmacy operations, clinical services, quality initiatives, compliance activities, and other essential services. Southern Indian Health Council, Inc. is a community-focused healthcare organization dedicated to providing comprehensive medical, dental, and behavioral health services to Native American communities in San Diego County. Through patient-centered care and culturally responsive programs, SIHC works to improve health outcomes and expand access to quality care. I. Request for Exemption from the 340B Rebate Model Pilot Program SIHC strongly urges HRSA to exempt tribal health centers, including SIHC, from participation in the 340B Rebate Model Pilot Program. Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center The proposed model departs from the original purpose of the 340B program. For more than two decades, 340B has allowed SIHC to purchase outpatient medications at reduced prices, enabling us to provide affordable, and often free, medications to low-income and uninsured patients. As Congress intended, the program helps covered entities stretch limited federal resources and expand access to care. Under the proposed rebate model, SIHC would be required to purchase medications at full Wholesale Acquisition Cost and then wait for manufacturers to issue rebate payments. That structure creates substantial cash flow risk, constrains working capital, reduces purchasing flexibility, and threatens continuity of pharmacy services for the approximately 7,000 patients we serve. SIHC currently supports approximately 22,000 340B prescriptions annually, and our administrative costs already account for roughly 10% of the 340B program. Those costs would increase significantly under a rebate-based system. Just as importantly, the rebate model would reduce SIHCs ability to reinvest 340B savings into direct patient care, including services for uninsured patients, pharmacy operations, and clinical, quality, and compliance programs. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the Native patients SIHC serves. For patients who depend on SIHC and its 340B program, this model could place essential therapies financially out of reach. Patients may be forced to transition to less appropriate medications because of cost or lack of availability. Those forced therapeutic substitutions carry real clinical risk, including nonadherence, treatment delays, and worsening outcomes, especially for patients with multiple chronic conditions who have limited alternatives and limited access to other pharmacies. SIHC has significant concerns about the effect a rebate pilot would have on access to life-sustaining medications. Many of the drugs selected for the Medicare Drug Price Negotiation Program in 2026 and 2027, and included in the proposed rebate model, are used to treat chronic conditions that are highly prevalent in primary care. Because SIHC serves a Native patient population with a greater burden of chronic disease, including diabetes, hypertension, obesity, chronic kidney disease, heart failure, and behavioral health conditions, our patients would be disproportionately affected. For example, direct oral anticoagulants such as Xarelto and Eliquis are essential therapies for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many patients, alternatives are limited and may be less safe. These drugs are not optional conveniences. They are critical therapies that help prevent stroke, heart attack, and death. The impact on patients requiring SGLT2 inhibitors such as Farxiga and Jardiance would also be severe. These medications are central to treatment of type 2 diabetes, chronic kidney disease, and heart failure, all of which are common among SIHC patients. Restricting access to these therapies would increase the likelihood of preventable deterioration and hospitalization. The proposed model also raises concerns for behavioral health. Beginning in 2027, the negotiated drug list will include certain behavioral health medications, including Austedo, which is used to treat tardive dyskinesia. Limiting access to these medications would further strain patients already navigating significant mental health challenges. Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center The impact on insulin access is particularly alarming. SIHC serves more than 7,000 patients, many of whom rely on us for diabetes care. Affordability of insulin is a matter of life and death. In addition, Executive Order #14273 conditions future Section 330(e) funds on access to discounted insulin for low- income patients. There is currently no workable operational method to provide these discounted medications at the point of care under a retrospective rebate model. If the wholesaler price file reflects full WAC rather than the discounted 340B price, SIHC cannot reliably provide those discounts at the time patients need medication. Imposing a rebate model on SIHC would weaken the very safety-net providers on which underserved communities rely. For our patients, this model would create a new barrier to essential treatment, especially for those who are uninsured, medically complex, and geographically limited in their options for care. III. Administrative Complexities and Workforce Burden The proposed 340B Rebate Model Pilot Program is not only a financial threat. It also creates a duplicative and unnecessary administrative burden for SIHC. To comply with this model, SIHC would need to absorb additional workforce and IT costs associated with varying manufacturer rebate requirements, different submission timelines, payment reconciliations, and dispute processes for denied rebates. Similar to the challenges covered entities already face with existing manufacturer restrictions, SIHC would have to invest in new infrastructure and redirect staff time away from patient care to manage these operational demands. SIHC anticipates needing at least two additional FTEs as a direct result of the rebate model to manage the increased regulatory, operational, administrative, and compliance burden. Based on our planning, business workflows, and expected reporting requirements, the staffing impact alone is substantial. SIHC also estimates that approximately 80 hours would be required to report rebate claims to third-party platforms, even assuming manufacturers align with the current plans. In reality, lack of standardization would likely force SIHC to manage the same data across multiple systems and reporting processes, further increasing cost and inefficiency. HRSA should require uniformity among participating manufacturers to reduce unnecessary administrative burden and help ensure timely and appropriate rebate payments. IV. Pharmacy Software and Third-Party Administration Changes The rebate pilot would require significant changes to pharmacy software workflows and internal systems. SIHC anticipates one-time implementation costs to adapt pharmacy software, pay for custom dashboard modifications, and redesign internal workflows simply to reach a baseline level of compliance. Our estimate for those initial changes is approximately $50,000. In addition, SIHC projects approximately $350,000 in annual increased costs associated with labor, IT, and carrying costs. For in-house pharmacy operations, the burden is even greater. This model is not a simple accounting adjustment. It is a major technological disruption. To remain compliant, SIHC would need deeper Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center integration between NextGen, our electronic health record, PioneerRx, and new rebate-related infrastructure. We anticipate one-time integration costs of approximately $75,000 for custom interfaces, API builds, and price-file reconciliation tools. We also expect ongoing diversion of staff resources, including approximately 40 hours per week spent manually pulling and reconciling purchase files and price files to verify rebate accuracy. V. Clinic-Administered Drugs Clinic-administered drugs present a separate and significant challenge under the proposed rebate model. SIHCs clinic-administered drug operations and documentation processes were built to align with the realities of tribal health billing and the prospective payment system. Because many clinic-administered drugs are bundled into PPS encounters, they often do not appear on separate claims submitted to payers. This makes rebate-based tracking especially difficult and costly. At the same time, the risk of duplicate discounts in this area is limited. Maximum Fair Prices apply to Medicare Part D claims in 2026 and 2027, then expand to certain Part B claims in 2028. With respect to Medicaid, states already have mechanisms to address duplicate discounts. For those reasons, HRSA should explicitly exclude clinic-administered drugs from any 340B rebate model pilot. At minimum, these drugs should remain excluded unless and until they are billed as discrete claims and a demonstrated duplicate-discount risk exists that cannot be addressed through existing statutory mechanisms. Including clinic-administered drugs now would impose disproportionate administrative costs, software expenses, and compliance risks without corresponding benefit. VI. Financial Challenges and Cash Flow Risk The financial implications of this proposal are severe. Under the proposed rebate model, SIHC would be required to purchase medications at full WAC rather than at the 340B ceiling price. That change would sharply reduce our ability to purchase and maintain needed drug inventory. It would also create uncertainty about when, or whether, the expected rebate would be received. As a result, SIHC would face difficult decisions about how to allocate already limited resources, including whether to reduce services, limit operations, or discontinue programs that directly support patient health outcomes. SIHCs financial modeling shows that it would cost approximately $6 million to $8 million annually to purchase the 10 selected drugs under the proposed rebate model, compared with approximately $2 million under current 340B pricing. That represents a 200% to 300% increase in upfront drug acquisition cost. SIHC also estimates that purchasing those drugs at WAC instead of 340B ceiling prices would increase upfront monthly drug spend by approximately $416,000. These increased costs would have a devastating impact on SIHCs ability to sustain adequate inventory and continue providing discounted medications. To offset those costs, SIHC would be forced to consider reducing essential clinical services, scaling back non-revenue-generating patient support programs, diverting funds from workforce and staffing, and limiting our ability to provide zero-pay or deeply discounted medications to uninsured patients. Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center The rebate model also creates major uncertainty around point-of-sale pricing. The 340B price would no longer be reflected in wholesaler pricing catalogs or pharmacy software at the time the patient needs medication. This makes it difficult to determine appropriate discounts, complicates compliance with sliding fee programs and actual acquisition cost billing requirements, and increases the risk of undercharging or overcharging patients. VII. Wholesaler Credit Limits, Opportunity Costs, and Interest Expense Another major concern is the effect of full-WAC purchasing on wholesaler credit limits. Purchasing at WAC could cause SIHC to exceed wholesaler credit limits, interrupting our ability to order medications. For an organization operating on thin margins, relying on loans or expanded lines of credit to float manufacturer rebates is not a sustainable solution. It defeats the purpose of the 340B program by redirecting patient-care resources toward interest expense, fees, and debt service. SIHC estimates its annual rebate opportunity cost at approximately $500,000, reflecting the combined impact of rebate denials and loss of prompt-pay, purchase-volume, and sub-ceiling discounts. In addition, if SIHC must rely on financing to maintain drug supply, the interest costs alone are estimated at approximately $350,000 annually. These are dollars that would otherwise support direct patient care, community services, or clinical staffing. Every dollar paid upfront at WAC is a dollar temporarily frozen while SIHC waits for reconciliation and rebate payment. That loss of liquidity directly weakens our ability to respond to routine patient needs, sudden public health demands, or operational emergencies. VIII. Rebate Denials, Delays, and Reconciliation Problems The proposed model exposes SIHC to substantial financial loss if rebates are delayed, underpaid, or denied. If a rebate is denied after SIHC has already purchased the product at full WAC and dispensed the medication to the patient at a discount, SIHC absorbs the loss. Based on current volume of the 10 selected drugs, even a conservative 10% denial rate would result in an estimated annual loss of approximately $500,000. That is not a manageable risk for a safety-net organization. The timing delay also matters. Although rebates may be expected within 10 days of completed data submission, prior pilot structures allowed covered entities up to 45 days to submit data. Depending on inventory turn, submission cadence, and manual processing, the total time from purchase to rebate may stretch to 40 to 85 days. That is a long period for a tribal health center to float full WAC costs. SIHC is also concerned about the lack of clear enforcement if manufacturers fail to meet payment deadlines. Based on experience with current MFP to 340B de-duplication processes, corrected claims are not always paid promptly even after disputes are resolved. Without strong enforcement standards, a rebate model effectively functions as an interest-free loan from safety-net providers to manufacturers. IX. Recommended Guardrails if HRSA Proceeds Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center If HRSA moves forward with a rebate-based approach, the program must include enforceable national guardrails that prevent financial and administrative risk from being shifted onto covered entities. At minimum, HRSA should require: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under legally recognized duplicate discount prevention standards. Standardized and publicly defined denial categories with claim-level documentation. Rebate payment timelines that apply to both initial and corrected determinations. A clear enforcement framework with consequences for repeated late payments or improper denials. A requirement that manufacturers bear the burden of establishing that a rebate is not owed. An explicit prohibition against denial methodologies based on manufacturer-defined patient eligibility standards or undisclosed validation criteria. SIHC also recommends that OPA establish a stakeholder advisory panel that includes pharmacists and others with practical expertise in pharmacy software, billing, and operational workflows. X. Existing Compliance Infrastructure SIHC already operates under a robust compliance framework through the Health Center Program and the 340B statute. We participate in regular operational site visits, maintain strict internal 340B compliance protocols, conduct audits and staff training, and comply with reporting requirements related to 340B-purchased drugs, costs, revenues, and the patients served by the program. SIHC is not the source of misuse in the 340B program. Tribal health centers like ours are already heavily regulated and accountable. Imposing a rebate model would add disproportionate burden without addressing the actual compliance strengths already in place. XI. Recommendation for a National Neutral Claims Clearinghouse Rather than implementing a rebate model, SIHC recommends that OPA adopt a National Neutral Claims Clearinghouse approach. A neutral clearinghouse would preserve the upfront 340B discount, avoid cash flow and borrowing burdens for covered entities, reduce administrative complexity, provide manufacturers with the deduplication data they need, improve accuracy, reduce correction cycles, and preserve patient access to affordable medications. It could also support a more standardized national approach to preventing Medicaid duplicate discounts without shifting costly reporting burdens onto safety-net providers. Given the level of disruption the rebate model would create, requiring covered entities to submit data manufacturers may already have access to is redundant and unnecessarily burdensome. HRSA should require manufacturers to use existing data sources rather than imposing new reporting systems that destabilize covered entities. Campo Clinic 36350 Church Rd. Campo, CA 91906 Boys & Girls Club Of Kumeyaay Nation Wellness 8 12 Crestwood Road Boulevard, CA 91905 Kumeyaay Wellness Center 8 Crestwood Road Boulevard, CA 91905 Southern Indian Health Council Community Health Center Conclusion Southern Indian Health Council, Inc. strongly urges HRSA to exempt tribal health centers from participation in the 340B Rebate Model Pilot Program. The proposed model departs from the longstanding structure of the 340B program and would impose substantial financial, operational, and clinical burden on SIHC. By requiring covered entities to purchase medications at full WAC and then wait for uncertain rebate reimbursement, the proposal creates serious cash flow strain, weakens pharmacy operations, reduces flexibility in formulary and service decisions, and threatens access to affordable medications for vulnerable patients. It would also require significant investment in staffing, software, system integration, data reconciliation, and dispute management, diverting scarce resources away from direct patient care. For SIHC and similar tribal health centers, these burdens are not manageable and would directly threaten the stability of the safety net. SIHC appreciates the opportunity to respond to this Request for Information and welcomes continued engagement with HRSA on this important issue. Sincerely, Laura I. Caswell Chief Executive Officer Southern Indian Health Council 4058 Willows Rd. Alpine, CA 91901 Letter to HRSA 04.08.2026 Final Audit Report 2026-04-08 Created: 2026-04-08 By: Mary Johnson (mjohnson@sihc.org) Status: Signed Transaction ID: CBJCHBCAABAAZ9SiXT3l9pF51MwPEkwvE1moDsgtxRej "Letter to HRSA 04.08.2026" History Document created by Mary Johnson (mjohnson@sihc.org) 2026-04-08 - 9:17:52 PM GMT Document emailed to Laura Caswell (lcaswell@sihc.org) for signature 2026-04-08 - 9:18:35 PM GMT Email viewed by Laura Caswell (lcaswell@sihc.org) 2026-04-08 - 9:57:20 PM GMT Document e-signed by Laura Caswell (lcaswell@sihc.org) Signature Date: 2026-04-08 - 9:57:52 PM GMT - Time Source: server Agreement completed. 2026-04-08 - 9:57:52 PM GMT
HRSA-2026-0001-1940Hemophilia Alliance2026-04-20T04:00Z10,695 chars
Please see attached for comments from the Hemophilia Alliance. 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 2085 Re: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels, I am writing to you on behalf of the Hemophilia Alliance (Alliance) to provide feedback on the Request for Information: 340B Rebate Model Pilot Program (Rebate RFI). The Alliance is a not-for-profit organization that represents hemophilia treatment centers (HTCs) with pharmacy programs under Section 340B of the Public Health Services Act. Our member organizations offer clinical and pharmacy services to individuals with bleeding disorders that improve quality outcomes and reduce overall costs of care. The Alliance has significant concerns that switching the 340B program to a rebate model would harm HTCs, the patients they serve, and their public and private payers and asks that HRSA not move forward with it. Background on Bleeding Disorders and Hemophilia Treatment Centers Hemophilia is a rare, genetic bleeding disorder affecting about 30,000 Americans that impairs the ability of blood to clot properly, requiring life-long infusions or injections of high-cost therapies to treat their condition. People with bleeding and clotting disorders are medically vulnerable, since lack of access to expert care and appropriate treatment can lead to life-threatening complications. They receive care at the national network of federally supported HTCs, which receive a minor amount of grant funding under the National Hemophilia Program from the HRSA Maternal and Child Health Bureau and the Centers for Disease Control and Prevention (CDC). Most HTCs also participate in the 340B drug discount program, enabling HTCs to provide treatments at significant discounts to patients served by the center and to reinvest program income to support comprehensive care for all of the centers patients. Congress designated HTCs as original covered entities eligible to participate in the 340B Drug Pricing Program in 1992. Today, approximately 120 HTCs have 340B pharmacy programs. Because HTCs must comply with requirements for federal grantees, any proceeds from participating in the 340B program must be spent to further the purposes of the grant, namely, to provide comprehensive care to people with bleeding and clotting disorders. Due to the high costs of treatment and the volatile nature of hemophilia and its complications and comorbidities, the hemophilia community is extremely medically vulnerable regardless of their income or insurance status. While low income and underserved populations are served at HTCs, even individuals with private and public insurance can have annual drug costs exceeding $500,000. Patients that have surgery, complications or trauma, and patients that develop an inhibitor (an immune response to treatment), can have costs as high as $1 million or more annually. Access to the up-front discounts allowed under the 340B program greatly benefits all patients served by HTCs. HTCs multi-disciplinary and patient-centered care has been a model for people with special needs for more than 40 years. Today, 146 HTCs provide high-quality care to more than 70,000 patients with a variety of 2 bleeding and clotting disorders. HTCs are comprised of an integrated multi-disciplinary team of providers hematologists, nurses, physical therapists, social workers, and pharmacists that provide highly specialized care to assess and treat bleeding disorders and their complications, including inhibitors, liver disease and HIV/AIDS. The HTC care model is patient-centered and trains people living with the disease to recognize and quickly treat life-threatening internal bleeding episodes. Studies have consistently demonstrated the value of the HTC network in improving patient outcomes. For example, in the late 1990s, researchers found that mortality and hospitalization rates are 40% lower for people who use HTCs than in those who do not, despite the fact that more severely affected patients are more likely to be seen in HTCs. A more recent study from 2019 found that there was 47.1% lower frequency of emergency department use among patients being cared for at an HTC compared to patients cared for outside of the HTC network, and that HTC patients are 30% more likely to be treated with prophylaxis, the current standard of care. In 2020, the CDC published a Mortality and Morbidity Weekly Review article with an evaluation of the history of the HTC program and leaders from the HTC network published the results of the first national patient satisfaction survey of HTC patients, which demonstrate near unanimous satisfaction with the network. There is a growing need for even more specialized clinical care as spelled out in a recent publication, Integrated Hemophilia Patient Care via a National Network of Care Centers in the United States: A Model for Rare Coagulation Disorders. Studies have also demonstrated the importance of the 340B program to support the HTC network. The 340B program enables HTCs to stretch limited grant dollars and meet patient needs. A 2018 analysis of 83 HTCs found that 340B program income supported 569 full-time equivalents (FTEs) and an average of more than 5,500 telephone triage, care coordination and case management patient encounters per center. The number of FTEs and patient encounters supported by program income would be even higher if numbers reflected all 120 HTCs that have 340B programs. Comments on the RFI The RFI seeks information from covered entities and other interested parties about the implications of shifting the 340B program from requiring manufacturers to sell eligible drugs to covered entities at an up-front discount to requiring purchase at wholesale acquisition cost (WAC) and waiting for manufacturer rebates after dispensing and claims adjudication. The Hemophilia Alliance represents all HTCs that have 340B pharmacy programs and as such, is not able to answer the center-specific financial and other questions asked in the RFI. We are pleased to share more generally-applicable comments as follows. We oppose the rebate model because it would significantly shift costs onto HTCs, who are non-profit, safety net providers, as well as to public and private payers: HTCs would face higher costs for running their pharmacy programs. First, the drugs themselves would be more expensive. HTCs can purchase clotting factor and related treatments today at a 17.1% discount, which is significantly below the WAC rate. Given the high costs for hemophilia treatments, shifting from a discount to a rebate would mean that HTCs would have to float hundreds of thousands to millions of dollars on behalf of pharmaceutical companies. This is exacerbated by the fact that manufacturer invoices are typically due and payable before HTCs receive reimbursement from the payer. It would be extremely difficult for HTCs, as non-profit entities, to manage this cash flow crisis amidst their other financial responsibilities. HTCs would therefore face higher costs in terms of interest and loans to accommodate these significant expenses. They would also have additional staff and technological costs to successfully complete reporting and paperwork requirements to secure rebates - tracking, reconciliation, dispute resolution, and compliance. HTCs may even face more 3 expensive insurance premiums for the drugs mailed to patients, since they would need a higher limit to accommodate more expensive drugs. Since HTCs are required to reinvest all revenue from their 340B pharmacy programs (specified under 2 C.F.R. Part 200 as program income) back into patient care, bearing the additional costs entailed by the rebate model would directly impede HTCs ability to serve their patients. Patients at HTCs receive significant value in several ways. First, lower cost prescriptions can reduce their out-of-pocket spending and allow patients to maintain their insurance. Integrated clinical and pharmacy services provide comprehensive, high-quality care to patients, including close monitoring of utilization of therapies, allowing for more immediate changes in treatment and better management of costs. Patients also benefit from other critical services, such as dental and supportive services, as well as educational programs that help ensure that they appropriately assess their ongoing treatment needs. All of these services and benefits stem from HTCs 340B pharmacy programs and all would be imperiled by a move to the rebate model. Shifting HTC resources away from care from their medically and financially vulnerable patients into doing more paperwork is contrary to the intent of the 340B Program as well as the National Hemophilia Program grant. Finally, the rebate model would increase costs for the health care system overall. Many payers both Medicaid and private plans reimburse HTCs based on their acquisition cost. The rebate model would increase acquisition cost and therefore, would increase costs for payers, as well as cost-sharing for patients who are charged a percentage of the cost of the drug. These add up to significant harms to the HTC network, their patients, and their patients insurers, all with no countervailing benefit. All stakeholders can be confident that HTC participation in 340B directly benefits the bleeding disorders community as the rules governing the HRSA HTC grant program make this explicit. Moreover, there are other ways that covered entities, manufacturers, and the Centers for Medicare and Medicaid Services (CMS) can ensure there are not duplicate discounts between 340B, Medicaid, and the Medicare Drug Price Negotiation Program that do not impose such costs onto the system. For example, claims modifiers like those implemented in Medicare to facilitate compliance with the Inflation Reduction Act could be implemented with all payers. Conclusion Thank you for your consideration of these comments. We oppose any effort to change the 340B program that jeopardizes its benefits for our patient community and respectfully request that HRSA not allow implementation of the rebate model. The rebate model directly conflicts with the goals of the Administration to lower drug and health care costs and increase affordability for patients. Please contact me at jeff@hemoalliance.org with any questions or for more information. Sincerely, Jeff Blake President and CEO
HRSA-2026-0001-1941Pam Abbe · Waynesburg, PA, United States2026-04-20T04:00Z94 chars
This is a plea to exempt CHC programs from the pilot of a new rebate model on the 340B program
HRSA-2026-0001-1942Waco Family Medicine2026-04-20T04:00Z4,774 chars
See attached file(s) -- thank you for your time and consideration RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Heart of Texas Community Health Center, Inc. (dba Waco Family Medicine), and from the perspective of Waco Family Medicine Pharmacy, thank you for the opportunity to comment on the proposed rebate model. The 340B program is foundational to Community Health Centers (CHCs) and their ability to serve the most vulnerable members of our community. Waco Family Medicine is a Federally Qualified Health Center (FQHC) serving Central Texas. Our patients include a high proportion of uninsured and underinsured individuals who depend on point-of-sale affordability to access chronic disease and specialty medications. I. Utilization of 340B Savings Waco Family Medicine uses 340B savings to support: Sliding fee scale medication affordability, including discounted and, in some cases, zero-pay prescriptions at the point of sale Non-reimbursable pharmacy functions that protect access and compliance, such as audit readiness, eligibility oversight, and patient affordability navigation Outreach and enrollment efforts that help patients remain on therapy Other charity and patient-support programs that prevent interruptions in needed treatment II. Current Operations Costs of the 340B Program The administrative burden of operating a compliant 340B program is already substantial and continues to grow. Since the 340B rebate pilot was paused, manufacturers have increasingly required additional data submissions and related administrative steps as a condition of continued participation. This manufacturer-driven increase in reporting and reconciliation requirements has already required Waco Family Medicine to add a billing and accounts receivable function to support pharmacy operations. We estimate that the implementation of the HRSA rebate model would result in increased direct expenses of approximately $150,000 annually for billing and accounts receivable staffing alone. This figure reflects salaries for this function and does not include any additional IT, vendor, or compliance costs that may follow. In addition, we currently maintain two dedicated 340B staff who conduct daily auditing and prescription-level review to ensure ongoing compliance and to respond to manufacturer audits and eligibility inquiries. The burden to prove 340B eligibility already rests with covered entities today. III. Estimated Financial Impact of a Rebate Model A rebate-based model would significantly worsen these challenges by shifting both administrative responsibility and capital burden onto covered entities. Requiring CHCs to purchase medications at WAC upfront, dispense to patients at safety-net prices, and then wait for reimbursement introduces substantial working-capital strain. This is not merely a timing issue. An upfront shift from 340B pricing to WAC would require fundamental changes to inventory practices. To manage cash exposure, covered entities may be forced into more restrictive just-in-time ordering and reduced on-hand supply. For high-cost and time-sensitive therapies, this creates real risk to medication availability and may lead to delays or interruptions in patient treatment. At the same time, the rebate structure provides manufacturers with the time value of money while covered entities assume both financial risk and compliance burden. CHCs should not be required to finance the program through upfront capital exposure on top of the existing requirement to document, audit, and defend eligibility for every prescription. IV. Health Center Impacts In practice, the rebate model would: Reduce liquidity and place strain on wholesaler credit, increasing the risk of delayed ordering and reduced availability to patients of needed medications Increase administrative and operational burden beyond what CHCs can reasonably absorb Create new barriers for uninsured and underinsured patients who rely on point-of-sale affordability to access essential therapies Conclusion For these reasons, Waco Family Medicine strongly urges HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program. A rebate model represents a departure from the original intent of the 340B program and would create cash-flow disruption, increased administrative burden, and new barriers for medically underserved patients who depend on the up-front 340B discount for access to affordable medications. Thank you for considering our comments. If you have any questions, please contact me at david.king@wacofamilymedicine.org Sincerely, David King, PharmD, MBA, RPh, BCACP Senior Director of Pharmacy
HRSA-2026-0001-1943Carolina Health Centers, Inc.2026-04-20T04:00Z36,995 chars
Thank you in advance for your consideration of our comments. Please see the attached file. April 18, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: I am writing on behalf of Carolina Health Centers, Inc. to provide input on HRSAs Request for Information regarding the 340B Rebate Model Pilot Program (HRSA-2026-03042). We appreciate HRSAs decision to extend the comment period to April 20, 2026; additional time was essential for our team to evaluate the operational realities and financial exposure this proposal would create for Community Health Centers (CHCs). The 340B program is integral to CHCs ability to care for patients with the greatest needs. Shifting the up-front discount model to a retrospective rebate model, effectively moving risk and administrative responsibility from manufacturers to the safety net, would disrupt CHC pharmacy operations across the country. National analyses from NACHC underscore the scale of the impact: Carolina Health Centers serves the county of Greenwood South Carolina, as well as the six rural counties that surround it. We are in the northwestern portion of South Carolina which is commonly referred to as The Upstate. Carolina Health Centers is the medical home for 25,720 patients correlating to approximately 99,310 medical encounters each year. We have 14 family practice sites as well as 3 pediatric offices with integrated, evidence-based child development and home visitation programs. Behavioral health is integrated on site at 6 medical sites. 60% of our patients are living at or below 100% of the Federal Poverty Level (FPL); 73.5% of our patients are living at or below 200% FPL. 20% of our patients are totally uninsured. The contribution that 340B makes to Carolina Health Centers operating margin allows us to provide more comprehensive primary and preventative care to the patients we serve. Some examples of this include but are not limited to: Free home-delivery of medications dispensed from our entity owned pharmacies; Subsidization of dental costs for our patients who see local dentists that our health center contracts with; Uncompensated behavioral health care; Delivery of medications via courier to our outlying medical offices, which increases the access of affordable medications to our uninsured/underinsured patients who dont have a means of transportation to and from our entity-owned pharmacies. Along with these services, the contribution that 340B makes to our health centers operating margin helps offset other lines of service offered at Carolina Health Centers that are currently operating in the red (i.e. Family Practice Medicine, Early Childhood Services, Behavioral health). 2 HRSA should exclude Community Health Centers from the 340B Rebate Model Pilot. As proposed, the 340B Rebate Model Pilot Program would undermine CHCs ability to carry out their mission and would move the 340B program away from its long-standing structure and purpose. For more than 30 years, 340B has enabled CHCs to purchase outpatient medications at reduced prices and then reinvest those savings to expand access- helping patients obtain medications they otherwise could not afford, including at no cost in some circumstances. Congress intended 340B to help safety-net providers stretch scarce Federal resources as far as possible. A rebate-first model reverses that principle by requiring CHCs to front the full cost of drugs and assume the uncertainty, delay, and administrative overhead of seeking reimbursement after the fact. Requiring CHCs to purchase medications at full price and then wait for manufacturer rebates would destabilize cash flow and introduce a level of financial risk that most CHCs cannot absorb. To illustrate the scope of Carolina Health Centers current 340B operations, in calendar year 2025 we processed approximately 152,242 340B transactions. Under Carolina Health Centers current wholesaler arrangements, we purchase 340B-eligible drugs upfront at the 340B ceiling price and pay under Net 14 terms. This approach provides pricing certainty at the time of purchase and dispensing, supports accurate patient discounting and compliance with Medicaid billing requirements, and allows us to capture sub-ceiling pricing and prompt-pay discounts that can reduce our actual acquisition cost below the statutory ceiling price. By contrast, a rebate model that requires Carolina Health Centers (CHC) to purchase drugs at full Wholesale Acquisition Cost (WAC) would immediately and substantially increase upfront drug acquisition costs, fundamentally changing how we finance patient care. Based on internal analysis using our actual purchasing data and prescription volume, CHC estimates that the proposed rebate pilot program would increase our annual upfront drug spend- for only the first 10 drugs included in the pilot- by approximately $3 million in the first year, rising from about $164,406 to $3,166,107. This represents an increase of more than 1000%, driven solely by the shift from upfront 340B pricing to delayed and uncertain manufacturer rebates. This shift would materially reduce the working capital we rely on to support staffing, care coordination, pharmacy operations, and uncompensated patient services. For CHC, which operates on thin margins, these cash-flow disruptions would be destabilizing and ultimately unsustainable. Critically, a rebate model reduces both cash-flow timing and the overall value of 340B savings. Replacing upfront 340B pricing with retrospective rebates eliminates access to sub-ceiling pricing and prompt-pay discounts available under current wholesaler arrangements. As a result, 3 even when rebates are ultimately paid, CHCs would incur a permanent loss of value, making the rebate model structurally more expensive and not financially neutral for covered entities over time. Rebate Uncertainty, Administrative Burden, and Denial Risk Carolina Health Centers urges HRSA to recognize that, absent rigorous and non-discretionary safeguards, a rebate model becomes less a pricing mechanism and more a material financial liability for covered entities. The current concept gives manufacturers substantial discretion over whether statutory savings are recognized and paid, creating an unpredictable environment that can produce direct harm to the safety net. The previously proposed 340B Rebate Pilot framework allowed manufacturers to deny rebate claims for vague reasons, such as duplicate rebate or MFP deduplication, without providing the claims-level data CHCs need to evaluate or contest the denial. Carolina Health Centers analysis assumes that 10% of prescriptions would not result in a rebate payment for a range of reasons, including drugs that are broken or shorted in manufacturer bottles, drugs purchased at WAC that expire before use, and rebate denials or non-payment rates consistent with current manufacturer audit, reconciliation, and dispute practices. Even with this conservative assumption, annual opportunity losses from the rebate pilot for the first 10 drugs exceed $316,000. These losses reflect dollars already paid to wholesalers and discounts already extended to patients, with no practical mechanism to recover funds once a rebate is denied or delayed. It is important to point out that these losses occur only after full WAC pricing has already been paid, exposing covered entities to one-sided financial risk without any corresponding increase in patient services, efficiency, or program integrity. In addition to the direct financial impact, the rebate pilot would add significant administrative workload, including claim identification and submission, tracking and reconciliation, dispute management, and audit response- often across manufacturer-specific platforms and standards. These administrative tasks are additive, not substitutive. For Carolina Health Centers, each additional FTE required to manage 340B rebate administration would divert funding that would otherwise support patient services, discounts, and patient-facing roles such as pharmacy technicians, care coordinators, or community health workers. In practice, the administrative complexity of a rebate model directly reduces CHCs capacity to deliver care. For these reasons, we urge HRSA to categorically exclude CHCs from any rebate-based pilot and to preserve the up-front 340B discount structure that makes safety-net care possible. Impact on patients and medication access The most serious consequence of a rebate-based approach is what it means for patients. Many uninsured and underinsured people served by CHCs rely on 340B-supported pricing to obtain 4 medications that are otherwise unaffordable. If CHCs must buy at full WAC and then wait for reimbursement, access will become less predictable and, for some patients, unattainable. Patients could be forced to switch therapies because of cost or inconsistent availability- changes that carry clinical risk, including nonadherence, delayed treatment, and avoidable complications. These risks are especially acute for people with multiple chronic conditions and for patients in areas where alternative pharmacies are limited or nonexistent. We are particularly concerned about how a rebate model pilot would restrict access to life- saving medications for our most medically and financially vulnerable patients. Many of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027, and contemplated for the rebate model, are commonly used to manage chronic conditions in primary care. That reality means CHC patients would be disproportionately affected. CHCs care for populations with a higher burden of chronic disease than patients seen in many private practices, including higher prevalence of diabetes, hypertension, and obesity. Affordable, consistent medication access is essential to preventing complications and avoidable utilization. For example, direct oral anticoagulants (DOACs)-including Xarelto and Eliquis are essential for patients with conditions such as deep vein thrombosis, pulmonary embolism, and atrial fibrillation. Many patients have few, if any, clinically appropriate alternatives, and substitutes may introduce new safety concerns. Interruptions in anticoagulation are not benign: published evidence shows that stopping oral anticoagulation is associated with significantly increased risks of stroke, myocardial infarction, and death. The same is true for patients who depend on SGLT2 inhibitors such as Farxiga and Jardiance. These therapies are now core components of treatment for Type 2 diabetes, chronic kidney disease, and heart failureconditions that are common among CHC patients. Evidence suggests that even a short interruption can materially worsen outcomes; one study found that a 30-day withdrawal was associated with an increased annualized risk of cardiovascular death or hospitalization for heart failure. A rebate model that makes these drugs harder to dispense consistently would predictably increase preventable complications and hospitalizations. This proposal also arrives during a widely recognized mental health crisis. Nearly one in four Americans (23.4%) lives with a mental illness. Beginning in 2027, the MDPNP will include certain behavioral health medications. Vraylar is an atypical antipsychotic, and medications in this class are central to schizophrenia treatment. A rebate model could create additional administrative and reimbursement barriers that limit CHCs ability to furnish these therapies to uninsured and underinsured patients. The 2027 list also includes Austedo, used to treat tardive dyskinesia-a common and serious side effect of antipsychotics. In clinical studies, 73% of patients treated with Austedo achieved treatment success with corresponding quality-of-life improvements. Any policy change that reduces access to these medications risks worsening patient stability and outcomes. Access to insulin is an especially urgent concernand the proposed model conflicts with existing federal expectations. More than 3 million Americans rely on CHCs for diabetes care, and affordability can be determinative. In addition, Executive Order #14273 conditions future Section 330(e) funds on CHCs ensuring access to discounted insulin for low-income patients. A retrospective rebate model offers no clear operational pathway to provide the required point-of- 5 sale discount because pharmacy price files would reflect full WAC rather than the 340B ceiling price. In practical terms, this would make insulin unaffordable at the counter and prevent CHCs from meeting their obligation to provide the required discount when the medication is dispensed. Ultimately, imposing a rebate model on CHCs would weaken the safety net for the 52 million Americans who depend on us. CHCs must provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines, and those same patients also rely on CHCs to obtain affordable medications. Removing the up-front 340B discount would make participation operationally unworkable for many sites and would create a new barriernot a safeguardfor patients who are uninsured, underinsured, or otherwise have few options for care. Operational burden and added administrative risk for CHCs Beyond the financing risk, the proposed pilot would impose a duplicative and avoidable administrative burden on CHCs. CHCs would be required to build and maintain new processes, staffing models, and IT capabilities to meet multiple manufacturers rebate submission and reconciliation rulesoften with different timelines, data standards, and dispute processes. HRSA should exempt CHCs from the rebate model because these additional workforce and technology demands would divert limited resources away from direct patient care. NACHCs assessment indicates that CHCs would need to upgrade infrastructure and add or reassign staff to manage data submission requirements, payment reconciliation, and rebate denials. The administrative load would scale with prescription volume for the selected drugs, requiring continuous monitoring and follow-up on claims and payments. Sliding fee discounts at risk: In 2025, Carolina Health Centers provided $569,156.65 in sliding fee discounts on discounted medications. Under a rebate model, we anticipate a significant reduction in our ability to sustain these discounts at current levels. Staffing and compliance workload: Carolina Health Centers anticipates needing one additional FTE to manage the expanded regulatory, operational, administrative, and compliance responsibilities created by a rebate model. Increased reliance on external vendors: With added complexity, Carolina Health Centers expects outside support costs to rise by $50,000 These expenses may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical record support, pharmacy software enhancements, and reconciliation services. Workforce Impact The administrative workload will also increase with prescription volume for the selected drugs, including the time required to monitor submissions, track payments, and resolve discrepancies. Carolina Health Centers estimates that 25 to 30 hours per week may be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization-and the likelihood of different requirements across manufacturers-would force CHCs to use multiple internal systems to manage and submit substantially the same information, increasing cost and complexity. Carolina Health Centers 6 urges HRSA to require uniformity among eligible manufacturers to reduce administrative and financial burdens and to improve timely, accurate rebate payments. Contract Pharmacy: The Burden of Network Coordination For CHCs that rely on contract pharmacy networks, the rebate model introduces new layers of complexity that could jeopardize these arrangements altogether. Our CHC currently works with 56 pharmacy partners to expand access to affordable medications for patients who cannot easily reach an in-house pharmacy. Increased reliance on TPAs-and higher fees: Managing manufacturers differing requirements across multiple contract pharmacy sites would require significant TPA involvement. We expect TPAs to pass through the cost of developing rebate-tracking tools via higher per-claim or service fees. Reconciliation lag and monitoring burden: The rebate approach creates a reconciliation gap that must be managed after the dispense. Our staff would need to track claims and rebate outcomes across 56 different pharmacy locations to ensure payments are correct and timely. Risk of contract pharmacy withdrawal: Because a rebate model shifts risk and administrative workload onto pharmacies and covered entities, we are concerned some contract partners will choose to exit 340B participation rather than manage additional complexity. In our region, that would leave patients in much of our service area with few or no affordable medication options. Several of our contract pharmacy partners including Walmart and Walgreens have decided to carve out these rebate drugs all together, effective reducing access to these medications for patients who rely on contract pharmacies to access affordable medications. Over 17 percent of the U.S. population already lives in a pharmacy desert, and pharmacy closures have worsened access; nearly 30 percent of pharmacies that operated between 2010 and 2021 had closed by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) workflows in CHCs are designed to be efficient and aligned with how CHCs bill and document care. Applying a rebate model to CADs would require new software, additional system integration, and staff training to generate electronic data suitable for rebate submission. NACHC estimates these costs could range from $30,000 to $50,000 annuallyand potentially higher depending on the technology selected. Bundled payment reality: Most CADs are included within the prospective payment system (PPS) visit payment when administered in CHCs. Because PPS visits are reimbursed at a flat rate, CADs are often not separately itemized on claims submitted to payers. Records are often streamlined and not claim-ready: CHCs typically maintain limited CAD inventories, and because CADs are not usually billed as discrete claim lines, documentation and inventory logs may still be paper-based, supplemented by narrative documentation in visit notes. While CHCs maintain perpetual inventories and complete administration records, converting these records into electronic, claim-level data for rebate submission would create substantial new work. Very few CHCs use electronic medication administration records (eMARs) common in hospital systems; when eMARs are available, they often require separate software and additional expense. Low duplicate-discount risk in practice: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) apply only to Medicare Part D claims in 2026 and 2027 and 7 expand to Medicare Part B in 2028. For Medicaid, states already use established mechanisms to prevent duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, CADs should remain out of scope unless and until CHCs routinely bill them as discrete claims and there is a demonstrated duplicate-discount risk that cannot be addressed through existing statutory safeguards. Including CADs at this stage would impose disproportionate administrative and software costs and increase compliance risk without improving program integrity or oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would have to purchase medications at full retail price-i.e., the Wholesale Acquisition Cost (WAC). That would break with more than three decades of 340B practice and severely constrain CHCs ability to procure and dispense drugs, because cash flow would hinge on whether and when a manufacturer approves a rebate. In other words, CHCs would be required to provide medications first and recover statutory savings later. This structure would force difficult tradeoffs with limited resources, including scaling back essential services, reducing operating hours, or discontinuing programs that support patient outcomes. Most critically, the rebate model would erode CHCs ability to provide steep discounts at the point of sale, because CHC pharmacies including entity-owned and contract pharmacies would no longer have access to 340B pricing when the patient is standing at the counter. This would make patient pricing far less predictable: the 340B ceiling price would not appear in wholesaler price catalogs or in pharmacy software if the initial purchase is at WAC. The result is confusion about what discount can be offered at dispense, and uncertainty about how CHCs can maintain sliding-fee discounts in real time for eligible patients. A rebate model also injects major uncertainty into how CHCs apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs must offer sliding-fee discounts for all required and additional health services within the HRSA-approved scope of project. Consistent with that mission, CHCs also provide flat or sliding-scale discounts on prescription medications to improve affordability for low-income patients. CHCs can adjust the cost of care, including medications, based on income and family size. CHCs are especially concerned that purchasing at full WAC would create immediate cash- flow strain and could push many centers past wholesaler credit limits- stopping drug orders until invoices are paid. While rebates are expected within 10 days after completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the elapsed time from dispense to rebate could reach 55 days. The financial exposure is even greater for CHCs with entity-owned pharmacies that maintain physical inventory, which would need to be stocked at WAC. Retail pharmacies typically turn inventory 10-12 times per year (roughly every 30 days). Even under a best-case scenario of 15 days to the average 30 days for inventory to turn, pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day submission cadence. Anecdotal reports from CHC pharmacies suggest a 8 two-week submission cadence for entity-owned pharmacy data; even at 14-day submissions, the purchase-to-rebate window is still estimated at 40-55 days. Additional delays are likely if claims are denied or disputed, creating further financial strain. We appreciate HRSAs proposal to require rebate payments within 10 days; however, the pilot materials do not describe how HRSA would enforce this requirement if manufacturers fail to comply. Our experience with manufacturer denials in current MFP-to-340B de-duplication processes indicates that even after a denial is contested and corrected, manufacturers and vendors have not consistently issued payment within the MFP standard of 14 days once status is corrected. We are concerned a 340B rebate pilot could allow corrected rebates to be delayed indefinitely. Compounding these issues, the rebate amount may not match the discount initially extended to the patient, creating unpredictable losses. CHCs would be forced to estimate rebate values and could undercharge or overcharge patients; if a rebate is denied, the CHC absorbs the full loss. Accordingly, if HRSA proceeds with a rebate pilot, manufacturers should be required to pay rebates within 10 days for both initial determinations and corrected determinations. The loss of an up-front 340B discount, combined with substantial IT and infrastructure costs, would fall disproportionately on CHCs and ultimately affect patients. Many CHCs are already financially strained: nearly half operate with fewer than 90 days of cash on hand, and one in four reports operating margins around negative five percent (-5%). Below, we provide specific information illustrating the significant cost increases CHCs would face under a 340B Rebate Model. Wholesaler Implications A further concern is that buying at full WAC could cause many CHCs to exceed wholesaler credit limits- interrupting the ability to order medications until payments are made. Some CHCs report that WAC upfront purchasing would require using already limited reserves or taking on new borrowing, undermining the core purpose of 340B. Carolina Health Centers believes that taking out a loan, or expanding a line of credit, simply to finance drug procurement is a high-risk strategy that leaves our organization in financial limbo. It defeats 340Bs purpose of stretching scarce resources by redirecting patient-care dollars to interest, fees, and debt service. Using credit to float manufacturer rebates is especially precarious at a time when other revenue sources are unstable. Wholesaler credit limits: Purchasing at full WAC could push CHCs beyond established credit limits, stopping medication ordering until invoices are paid. Many CHCs already pay invoices early to remain within credit terms. Given thin margins, CHCs are often viewed as higher credit risks, making credit-limit increases difficult or impractical. Loss of purchase discounts: CHCs often receive prompt-pay, purchase volume, and sub- ceiling discounts. A WAC-upfront structure could prevent CHCs from meeting these terms and could result in losing discounts that help keep costs manageable. 9 Data from our organizational analysis: Carolina Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $250,142 Every dollar paid up front at WAC is a dollar effectively frozen until a manufacturer processes and pays a rebate. During that waiting period, CHCs lose the liquidity needed to respond to urgent needs, whether a public health surge or a facility emergency. To operate under a rebate model, our organization may be forced to utilize limited financial reserves. That approach is not sustainable. For communities that rely on Carolina Health Centers, the risk of reaching credit limits or depleting reserves is a direct threat to the local safety net, with immediate downstream effects such as longer waits, reduced service availability, and fewer resources to provide affordable medications. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing approach, the pilot must include clear, enforceable operational safeguards so that financial and administrative risk is not systematically shifted to covered entities. Any rebate model should operate under uniform national standards that constrain manufacturer discretion, establish accountability, and protect covered entities from avoidable losses. We recommend, at minimum, that HRSA include the following guardrails: A presumption that submitted rebate claims are valid unless a manufacturer can demonstrate, using statutorily supported de-duplication mechanisms, that a discount should not be paid (i.e., 340B with MDRP or MDPNP). Standard, publicly defined denial categories that require claim-level documentation sufficient for covered entities to understand and contest determinations. Rebate payment timing requirements that apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, it must run from the date of the initial determination and again from any subsequent corrected determination to prevent dispute processes from becoming delay mechanisms. A clear enforcement framework, including meaningful consequences for repeated late payments or improper denials. A requirement that manufacturers bear the burden of establishing that a rebate is not owed. Rebate determinations that align with the statutory patient definition. HRSA should explicitly prohibit denials based on manufacturer-defined patient eligibility standards or undisclosed validation criteria. An OPA stakeholder advisory panel to ensure covered entities feedback is formally and consistently incorporated. The panel should include pharmacists and other subject-matter experts who understand pharmacy software, billing workflows, and the data elements required for compliant reporting. Existing CHC Compliance Actions 10 CHCs already operate within a comprehensive compliance framework under both the Health Center Program and the 340B statute, with established processes designed to ensure medications and services remain affordable for patients. Under Section 330 of the Public Health Service Act, CHCs use a sliding-fee discount program that adjusts charges based on income and household size so that patients are not denied services because they cannot pay. CHCs maintain eligibility determination processes and typically provide full discounts for individuals at or below 100% of the Federal Poverty Level (FPL). These patient supports are sustained in large part by 340B savings. FQHCs are legally required to provide discounted medications to eligible patients at or below 200% of the Federal Poverty Level at the time care is delivered. In 2025, Carolina Health Centers provided nearly $569,156.65 in pharmacy discounts to eligible patients. This discount program depends on having the drugs 340B price available at the point of dispensing. When pharmacy systems and wholesaler files reflect only WAC pricing, the health center cannot accurately calculate and apply compliant patient discounts without investing in costly programming workarounds. Even if workarounds are implemented, a material risk remains that CHCs will not receive the rebate after dispensing the drug at a patient price far below CHCs WAC acquisition cost. To manage this risk, health centers may be forced to reduce discounts (i.e., charge higher prices) to discount-program-eligible patients, directly undermining access to affordable medications for the vulnerable populations who need them most. 340B covered entities must bill Medicaid fee-for-service based on actual acquisition cost (AAC). Under a rebate model, the AAC reflected at the time of dispensing is WAC-not the 340B ceiling price, creating a misalignment that forces CHCs to either (1) bill Medicaid at the much higher WAC-based AAC, or (2) invest in the programming workarounds described above so pharmacy systems can reflect the 340B AAC up front. The same financial exposure remains if a rebate is later denied or delayed for a drug that was billed to Medicaid at the lower 340B AAC-well below what CHC paid to acquire the drug. The rebate model also conflicts with a Presidential Executive Order requiring health centers to offer discounted pricing-no more than the 340B ceiling price for injectable epinephrine and insulin. Compliance depends on having the discounted 340B price available at the pharmacy counter at the time of dispensing, not weeks or months later. If the 340B price is removed from wholesaler catalogs and pharmacy systems, there is no practical way to provide the mandated discount in real time without paying for workaround solutions and assuming the same rebate non-payment risk described 11 above. Failure to comply with this Executive Order could jeopardize our health centers 330 Grant funding. CHCs undergo regular Operational Site Visits (OSVs) to verify Health Center Program compliance and implement strict 340B compliance controls, including staff training, internal auditing, and external oversight. CHCs participating in 340B also report program-related information annually through the Uniform Data System (UDS), including data on 340B-purchased drugs, associated costs and revenues, and details about the patients served. Given the robust compliance infrastructure and statutory requirements already governing CHCs, layering a rebate model on top would create disproportionate harm for CHCs and the patients we serve. The administrative, financial, and operational demands of a rebate model would destabilize safety-net providers that 340B was intended to support. CHCs are not driving misuse of the 340B program; rather, CHCs are widely recognized as strong stewards of compliance. I. Establishing a National, Neutral Claims Clearinghouse Carolina Health Centers recognizes the concerns related to prevention of duplicative discounts as well as data accuracy. We also support targeted solutions to address these concerns without doing away with the upfront 340B pricing discount that health centers have relied on for over 30 years. We recommend that OPA pursue a Neutral Claims Clearinghouse (NCC) approach, which can improve de-duplication accuracy at a fraction of the cost and administrative burden of a rebate model. Carolina Health Centers fully supports a Neutral Claims Clearinghouse that allows HRSA to have oversight into the program. Relative to the proposed rebate pilot, an NCC would: Prevent cash-flow and borrowing pressures for covered entities by maintaining the up- front 340B discount. Greatly reduce administrative overhead by minimizing the need for covered entities to build rebate-compliance systems and by reducing staff time spent tracking claims, reconciling payments, and managing cash-flow gaps. Deliver de-duplication data to manufacturers within the same 45-day timeframe without shifting purchase and payment risk to covered entities. Improve accuracy and reduce rework, decreasing the time manufacturers and covered entities spend correcting errors. Maintain the 340B up-front discount structure that has defined the program for more than three decades and enables CHC participation. Protect patient access to affordable MFP drugs by avoiding the cash-flow pressures that could force CHCs to stop purchasing or dispensing these medications. Identify and prevent Medicaid duplicate discounts using a standardized approach by collecting 340B claims data for Medicaid prescriptions and making it available to states. 12 Given the level of disruption a 340B rebate program would cause for CHCs, requiring covered entities to supply data that manufacturers already have, or can access through existing channels, would be redundant and would add avoidable administrative burden to the safety net. HRSA should require manufacturers to leverage existing resources and approaches that protect program integrity without destabilizing the providers the 340B program was designed to support. Conclusion Carolina Health Centers urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A rebate program would depart from the purpose of 340B-to help safety-net providers stretch scarce Federal resources to deliver more comprehensive care. In practice, a rebate model would create significant cash-flow pressures and force difficult decisions about staffing, service availability, and which medications CHCs can afford to stock. It would also require major investments in IT infrastructure and personnel to comply with reporting and reconciliation requirements. Finally, it would create a new barrier for patients, particularly uninsured patients, who depend on the up-front 340B discount, making it operationally difficult or impossible to provide the sliding-fee scale and steeply discounted medications required by law. For these reasons, Carolina Health Centers believes a 340B rebate pilot would cause disproportionate harm to CHC patients and other safety-net populations. Carolina Health Centers appreciates the opportunity to respond to HRSAs Request for Information on the 340B Rebate Model Pilot, and we welcome continued engagement on this issue. If you have questions or would like additional information, please feel free to contact me at: dmellette@carolinahealthcenters.org or (864) 330-8230. Sincerely, Dominic Mellette, PharmD Chief Pharmacy Officer Carolina Health Centers, Inc.
HRSA-2026-0001-1944(no commenter metadata)2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1945Mayers Memorial Hospital2026-04-20T04:00Z4,108 chars
Submitted by: Critical Access Hospital (CAH) Representative in California. I am submitting this comment on behalf of a rural Critical Access Hospital that operates both hospital-based services and an entity-owned retail pharmacy. Our organization relies heavily on the 340B Program to sustain access to care in a geographically isolated and underserved community. While we appreciate the opportunity to provide input, we have significant concerns regarding the operational burden and compliance risk that the proposed rebate model would introduceparticularly for small rural hospitals like ours. Operational Burden and Administrative Complexity The rebate model would fundamentally shift the 340B Program from a point-of-sale discount to a retrospective reimbursement system. For a CAH with limited staffing and resources, this creates a substantial administrative burden. Our pharmacy and 340B program are already operating at maximum capacity managing compliance requirements, including: Medicaid carve-in implementation with manual claim identification and billing adjustments Weekly auditing of claims to ensure eligibility and prevent duplicate discounts Ongoing HRSA audit readiness and internal compliance reviews Management of split-billing, accumulators, and replenishment processes Introducing a rebate model would require additional layers of tracking, reconciliation, and dispute management. This includes identifying eligible claims post-dispense, submitting rebate requests, monitoring manufacturer responses, and reconciling payments. These functions would likely require dedicated full-time staff, which is not financially feasible for many CAHs. Cash Flow and Financial Risk The current 340B model allows covered entities to access upfront savings that are critical to maintaining operations. Transitioning to a rebate-based system would delay access to these funds, creating cash flow challenges for rural hospitals that already operate on thin margins. For our organization, 340B savings directly support patient care services, staffing, and access to medications. Any delay or uncertainty in receiving rebates could disrupt these services and reduce our ability to serve our community. Increased Compliance Risk The rebate model introduces additional risk for errors, particularly in areas such as: Duplicate discount prevention Medicaid billing alignment Manufacturer-specific rebate requirements Timely and accurate data submission Given the complexity of existing workflowsespecially in mixed-use and Medicaid carve-in environmentsadding rebate reconciliation increases the likelihood of inadvertent non-compliance. This is especially concerning for small programs without dedicated compliance teams. Disproportionate Impact on Rural Providers CAHs operate with significantly fewer resources than large health systems. The proposed model does not appear to account for the operational realities of rural healthcare settings, where staff often serve multiple roles and technology infrastructure may be limited. Without substantial investment in systems, staffing, and standardized processes, the rebate model would disproportionately impact rural providers and could ultimately reduce participation in the 340B Program. Recommendation We strongly urge consideration of the following before moving forward with any rebate model pilot: Exemptions or alternative pathways for Critical Access Hospitals and rural providers Standardized processes across manufacturers to reduce administrative variability Clear guidance and safeguards to prevent duplicate discounts Evaluation of financial impact on rural health systems, particularly related to cash flow delays Adequate funding or support for infrastructure and staffing needs In its current form, the rebate model presents significant operational, financial, and compliance challenges that may outweigh its intended benefitsparticularly for small, rural hospitals. We appreciate the opportunity to provide feedback and strongly encourage further evaluation of the impact on Critical Access Hospitals before implementation.
HRSA-2026-0001-1946MaineHealth2026-04-20T04:00Z34,456 chars
Please see attached. MaineHealth Comment of MaineHealth HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program Introduction and Statement of Position On behalf of MaineHealth, a not-for-profit hospital system serving rural communities in Maine and New Hampshire, we respectfully submit comments in response to the Health Resources and Services Administration's Request for Information regarding a potential 340B Rebate Model Pilot Program. MaineHealth is an integrated non-profit health care system that provides a continuum of health care services to the residents of eleven counties in Maine and one in New Hampshire. Each day, MaineHealth's 23,000 care team members work to fulfill our vision of "working together so our communities are the healthiest in America" through nine acute care hospital sites, an integrated medical group / physician group, a lab, home health care services, and an integrated continuum of inpatient and community-based behavioral health services. MaineHealth is the largest private employer in Northern New England. Our system is comprised of two Disproportionate Share Hospitals (DSH) and five Critical Access Hospitals (CAHs), including one CAH located in New Hampshire, all of which serve disproportionately high numbers of Medicare, Medicaid, and uninsured patients. Several of our hospitals are the sole inpatient and outpatient providers within large geographic regions, and many patients already travel long distances, often across difficult terrain and during severe winter weather, to access essential care. The 340B Program is foundational to our ability to maintain access to care in rural Maine and northern New Hampshire, where hospitals operate on thin margins, face chronic workforce shortages, and lack alternative referral options. For our CAHs, 340B savings directly support continued operation of pharmacy services including: infusion, oncology, emergency, and primary care services that would otherwise be financially unsustainable. For the reasons detailed below, we strongly oppose implementation of any rebate-based mechanism under the 340B Program, including implementation on a "pilot" basis. Any rebate model would be inconsistent with the statutory purpose of section 340B, would disregard decades of agency-created reliance interests, and would impose severe administrative, operational, and liquidity burdens on rural hospitals in Maine and New Hampshire. These burdens would directly reduce patient access to care and undermine the very objectives Congress intended the Program to achieve. 110 Free Street, Portland, ME 04101 ainehealth o MaineHealth I. Background and Core Statutory Framework Congress enacted section 340B to enable covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." HRSA has, for more than thirty years, implemented this mandate through an upfront discount model, under which covered entities acquire drugs at or below the ceiling price at the time of purchase. That approach is not incidental. It is the mechanism through which the statutory purpose has been operationalized successfully and predictably for decades. Hospitals, including those in rural Maine and New Hampshire, reasonably relied on this structure when designing operations, staffing, vendor relationships, financial planning, and long-term service delivery strategies. A rebate model would fundamentally alter this framework by forcing hospitals to pay full acquisition costs upfront and await reimbursement of the statutory discount. For rural hospitals and CAHs with limited liquidity, that shift would directly frustrate the statute's purpose by diverting scarce resources away from patient care and into financing manufacturers' obligations. II. Request for Comments 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount MaineHealth currently administers the 340B Program through well-established acquisition-based processes. In FY 2025, MaineHealth processed a total of 1,613,296 packages to satisfy 340B-eligible replenishment. Our system administers the Program using pharmacy staff, compliance personnel, split-billing software, and third-party administrators. MaineHealth incurs administrative costs associated with vendor software, dispense fees paid to third-party administrators and contract pharmacies, internal compliance personnel, and routine auditing and monitoring activities. These costs are predictable, budgeted, and manageable because the statutory discount is applied at the point of purchase. This structure allows hospitals to align staffing levels, vendor contracts, and compliance infrastructure with available resources while maintaining program integrity. The key drivers of current administrative costs include staffing, split-billing and claims identification software, contract pharmacy oversight, and internal auditing activities. These processes have been refined over years of participation in the 340B Program and are fully aligned with HRSA's audit framework. 110 Free Street, Portland, ME 04101 MaineHealth b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based framework would impose substantial incremental administrative and operational costs beyond those incurred under the current upfront discount model. These costs would include both one-time startup expenditures and significant ongoing costs. Incremental costs would include system redesign, new data feeds, legal review of manufacturer-specific rebate policies, contract amendments with third-party vendors, staff training, and ongoing claim-level processing, reconciliation, and dispute resolution. Vendors have indicated that rebate functionality would require additional per-claim fees, expanded data submission requirements, and continuous manual oversight. Based on internal modeling and data submitted to the American Hospital Association, MaineHealth estimates that a rebate-based model would result in approximately $45-$46 million in annual incremental costs, reflecting increased drug acquisition expenses, delayed rebate reimbursement, new vendor fees, software modifications, and internal administrative overhead. These estimates are based on current 340B transaction volume, known reimbursement delays and incorrect clam status determinations by Beacon experienced under existing MFP rebate structures, claim-level rebate workflows. Unlike the upfront discount model, rebate administration would scale in cost with volume, making the administrative burden inherently variable and unpredictable. Incremental administrative functions would include rebate submission, tracking claim status, reconciling payments, resolving denials, responding to audits, and correcting data disputes. These functions do not replace existing 340B compliance activities; rather, they would operate in parallel, increasing total administrative burden. Under current operations, MaineHealth's administrative costs are aligned with an acquisition-based model. A partial shift to rebates would not reduce existing administrative costs but would instead layer new processes on top of existing compliance systems. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program MaineHealth does not have excess administrative capacity to absorb the work associated with rebate administration. Implementation of a rebate model would require additional permanent staffing or reallocation of existing staff away from clinical and patient-facing responsibilities. MaineHealth anticipates the need to add at least one full-time equivalent (FTE) position dedicated to rebate administration, with the potential for two to three FTEs as additional manufacturers implement rebate requirements or modify data specifications. These positions require specialized pharmacy finance and compliance expertise to process claims, reconcile payments, and resolve disputes. 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth Reallocating existing pharmacy, finance, or compliance personnel is not feasible. Rural hospitals and CAHs within MaineHealth operate with minimal administrative staffing by design. Any diversion of staff time to rebate administration would impair medication oversight, compliance monitoring, and patient-facing pharmacy services. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program MaineHealth estimates that initial implementation ("go-live") costs would range from approximately $750,000 to $1.5 million. These one-time costs would include: • Design and build of new system interfaces to transmit pharmacy and medical claims data at the claim level; Configuration and testing of rebate-specific workflows within third-party administrator platforms; Development of internal reporting, reconciliation, and exception-handling tools; Cybersecurity and privacy risk assessments associated with expanded data transmission; Project management, staff training, and user acceptance testing across multiple hospitals and care settings. For a geographically dispersed health system with multiple CAHs and non-integrated legacy systems, these costs reflect the complexity of harmonizing pharmacy, medical, and financial data streams that are not currently required under the upfront discount model. Estimated Ongoing (Annual) Systems and Infrastructure Costs In addition to one-time implementation expenses, MaineHealth estimates ongoing annual systems and infrastructure costs of approximately $500,000 to $1 million per year, driven by: Recurring vendor and third-party administrator fees for rebate processing, data transmission, and reconciliation; Ongoing system maintenance, upgrades, and re-validation as manufacturers modify data specifications or rebate requirements; Increased IT support and monitoring to manage data errors, rejected claims, and system outages; Continued cybersecurity oversight related to expanded sharing of patient-level and claims data. These ongoing costs would be incremental to existing 340B IT expenditures and would not replace current systems used to support compliance and HRSA audits. 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth Operational Impact For MaineHealth's rural hospitals, particularly CAHs with limited IT staffing, these system demands would require diversion of scarce IT resources away from patient-care priorities. In several facilities, medical claims data cannot be automatically extracted and would require manual intervention, increasing both cost and operational risk. These infrastructure burdens would persist for the duration of any rebate model and would scale upward as additional manufacturers participate. e. Other Anticipated Costs or Impacts For MaineHealth's hospitals, particularly CAHs serving rural communities, erosion of 340B savings would require reassessment of services such as outpatient oncology, infusion therapy, emergency department pharmacy support, and the provision of free or discounted drugs to uninsured patients. In some facilities, cumulative rebate-related costs could force consideration of service closure. Implementation of a rebate-based model would result in increased and ongoing legal and compliance costs for MaineHealth beyond those incurred under the current upfront discount framework. These costs would include legal review of assessment of data-sharing and privacy obligations, and legal support related to disputed rebate determinations, audits, and appeals. Unlike the standardized, statute-driven pricing structure that governs the current 340B Program, a rebate model would require continued and increased legal oversight to manage manufacturer-defined rules that may change over time and vary by product. These legal and compliance costs would be recurring and would disproportionately affect MaineHealth's rural hospitals and CAHs, which operate with limited internal legal and administrative resources. Separately, and most critically, the cumulative effect of rebate-related administrative, systems, staffing, and legal costs would directly impair MaineHealth's ability to provide free or deeply discounted medications to patients in need. MaineHealth relies on 340B savings to support medication assistance programs for patients who are uninsured, underinsured, or otherwise unable to afford their prescriptions. A reduction in net 340B savings under a rebate model would require reassessment of these programs and could reduce the availability of free medications for vulnerable patient populations. For rural hospitals serving as sole community providers, reductions in medication assistance would have immediate consequences for treatment adherence and access to care. These impacts are a foreseeable result of diverting limited resources away from patient assistance and toward compliance with rebate-based administrative and legal requirements. 110 Free Street, Portland, ME 04101 MaineHealth 2. Payment Timing and Potential Cash-Flow Impacts for Covered Entities A rebate model would require hospitals to advance funds to manufacturers while awaiting reimbursement of the statutory discount, transforming covered entities, particularly rural hospitals and CAHs in Maine and New Hampshire, into de facto lenders for pharmaceutical manufacturers. This structure is fundamentally inconsistent with the purpose of the 340B Program and places unacceptable financial risk on hospitals with limited liquidity. Our current payment cycles vary based on vendor, and can be prompt pay to sixty days. On average, most health systems have fifteen to thirty day terms with their primary wholesalers. Based on the rebate proposal of ten days, we would anticipate needing to rethink any prompt pay or terms that are shorter then fifteen days, forgoing any prompt pay discounts, to ensure adequate cash flow with anticipation of a rebate paid on 340B medications. Under current Maximum Fair Price (MFP) rebate experiences, MaineHealth has observed delayed payments, disputed determinations, and unpaid rebates adjudicated solely by manufacturers. Preliminary analysis has identified rebate error rates of 40%, underscoring the unreliability of manufacturer-controlled rebate systems. We have concerns based on what we are seeing with the MFP rebates, that a ten day rebate payment would be paid appropriately with no denials or need for appeal. Based on the error rate, we anticipate a 20% increase in medication spend related to a 340B rebate model. Cash on hand at MaineHealth hospitals supports payroll, pharmacy purchasing, emergency services, and compliance with bond covenants. Even short-term disruption in cash flow, particularly during winter months and seasonal population surges, would generate cascading operational risks. 3. Rebate Denials Even if HRSA were to impose nominal guardrails on rebate denial criteria, a rebate model would still impermissibly place manufacturers in the position of deciding whether and when covered entities receive the statutory benefit guaranteed by Congress. Under current MFP rebate practices, manufacturers function as the sole adjudicators of rebate eligibility, with no independent verification and no timely, neutral dispute-resolution mechanism. Critically, manufacturers have no statutory authority to make determinations regarding eligible patients, eligible claims, or appropriate application of the 340B discount. That authority rests with HRSA, which is explicitly empowered to audit both covered entities and manufacturers to ensure program integrity. A rebate model that grants manufacturers decision-making authority over eligibility and payment would conflict with this statutory framework and undermine HRSA's oversight role. 110 Free Street, Portland, ME 04101 MaineHealth Each denied or delayed rebate would require hospitals, particularly small rural hospitals with limited administrative capacity, to divert staff away from patient care to investigate, contest, and reconcile manufacturer decisions. During that time, funds intended to support patient services would remain unavailable, compounding financial and operational harm. 4. Data Collection by Covered Entities A rebate-based model would significantly and permanently expand data collection, validation, and transmission requirements for covered entities, particularly for rural hospitals and CAHs in Maine and New Hampshire. Contrary to prior assertions made during earlier iterations of the rebate pilot, hospitals do not currently collect, maintain, or transmit all the data elements that would be required under a rebate adjudication framework, especially for claims originating in medical settings rather than retail pharmacy environments. Under the current upfront discount model, our hospitals collect and retain data necessary to ensure compliance with eligibility, diversion, and duplicate discount prohibitions, and we do so using systems and operational workflows that have been built and refined over many years. These processes are aligned with HRSA's existing audit framework, under which both covered entities and manufacturers are subject to oversight. A rebate model would introduce an entirely separate, claim-level data regime that is not required for acquisition-based compliance and that would require hospitals to assemble data from multiple internal systems on an ongoing basis. For many of our hospitals in rural Maine and northern New Hampshire, pharmacy systems, electronic health records, billing systems, and third-party administrator platforms are not fully integrated. As a result, rebate compliance would require manual data extraction, intervention by clinical or administrative staff, and repeated reconciliation efforts. These requirements would not be one-time in nature. They would recur with each claim and would increase in complexity as manufacturers modify data specifications, raise new eligibility questions, or dispute claim validity. These expanded data collection requirements also raise serious privacy and security concerns. A rebate model necessarily involves transmission of sensitive patient, prescriber, and claims data to materially increases risk without providing corresponding benefit to patients or the Program. Importantly, none of these data burdens are necessary to achieve 340B compliance. HRSA already possesses statutory authority to audit both covered entities and manufacturers, and existing data systems already support those audit functions. Requiring hospitals to build and maintain parallel data infrastructures solely to support manufacturer rebate adjudication is duplicative, inefficient, and harmful, particularly for hospitals serving as sole community providers in remote areas of Maine and New Hampshire. 110 Free Street, Portland, ME 04101 mainehealth,org MaineHealth 5. Manufacturer Efforts to Avoid Duplicate Discounts Manufacturers have repeatedly asserted that a rebate-based model is necessary to prevent duplicate discounts under the 340B Program and other federal pricing programs, including the Medicare Drug Price Negotiation Program. That assertion is not supported by our experience as a covered entity serving patients in Maine and New Hampshire, nor is it supported by the statutory framework. Our hospital system has longstanding procedures in place to prevent duplicate discounts, including established claims identification processes, use of Medicaid exclusion files, and coordination with state Medicaid agencies where applicable. We have not experienced systemic failures in deduplicating claims that would justify a fundamental restructuring of the 340B pricing mechanism. Where questions have arisen, they have been addressed through existing channels without the need for post-sale rebate adjudication. Critically, manufacturers already have access to less burdensome, lawful tools to address duplicate discount concerns. These include neutral third-party data exchange mechanisms and HRSA-recognized processes that do not involve transferring financial risk or decision-making authority to manufacturers. A rebate model is not required to accomplish deduplication and, in fact, introduces additional complexity and error. Experience with current MFP rebate administration further underscores the risk of relying on manufacturer-controlled adjudication. As discussed elsewhere in this comment, manufacturers currently exercise unilateral control over rebate eligibility and payment decisions, resulting in delayed payments, denials without adequate explanation, and observable error rates, including error rates of 40% at MaineHealth. Extending this model to the 340B Program would magnify these problems and embed them into a program that has historically functioned effectively under an upfront pricing structure. Manufacturers have no statutory authority to determine whether a patient, claim, or transaction qualifies for 340B pricing. Congress assigned oversight responsibility to HRSA, which audits both covered entities and manufacturers to ensure compliance. A rebate model that relies on manufacturer eligibility determinations improperly reallocates that authority and undermines the statutory framework. 6. Required Reporting HRSA has requested comment on additional reporting requirements that might accompany a rebate-based pilot, including data submissions by manufacturers and potential public reporting. While transparency and accountability are important goals, expanded reporting cannot cure the fundamental defects of a rebate model or justify the transfer of administrative and financial risk to covered entities. 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth From the perspective of rural hospitals in Maine and New Hampshire, additional reporting requirements layered on top of a rebate framework would compound administrative burden without addressing the core problems of delayed payment, unilateral manufacturer adjudication, and cash-flow risk. Reporting obligations do not mitigate the need for hospitals to front drug acquisition costs, nor do they ensure timely or accurate rebate payment. Moreover, HRsA already possesses robust audit authority over both covered entities and manufacturers. That authority allows HRSA to collect, review, and verify data needed to assess compliance with the 340B statute without requiring hospitals to participate in ongoing rebate reconciliation processes. Expanding reporting in connection with a rebate model would duplicate existing oversight mechanisms rather than improve them. For CAHs serving as sole community providers, including those in remote areas of Maine and northern New Hampshire, any additional recurring reporting requirements divert scarce administrative resources away from patient care. These hospitals operate with minimal administrative staffing by design, and even incremental reporting obligations can have disproportionate operational impact. If HRSA determines that additional data collection or transparency is necessary, those objectives should be achieved through targeted, neutral mechanisms under HRSA oversight, not by conditioning access to statutory discounts on participation in a rebate system that has already proven unreliable and manufacturer-driven in other federal pricing contexts. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A rebate model would weaken, not strengthen, the integrity of the 340B Program by increasing complexity, fragmenting accountability, and substituting manufacturer discretion for statutory compliance. Rather than improving transparency, a rebate framework obscures price realization by shifting discount verification to post-sale processes controlled by manufacturers. Experience with current MFP rebate administration demonstrates that manufacturer-adjudicated rebate models are prone to high error rates, inconsistent application, delayed payments, and unilateral eligibility determinations. These outcomes directly undermine confidence in data accuracy and compliance and expose covered entities to financial harm without meaningful recourse. Moreover, HRSA has long exercised its authority to audit both covered entities and manufacturers to ensure compliance with the 340B statute. That audit authority provides a neutral, statutorily grounded mechanism to address program integrity concerns without transferring eligibility determinations to manufacturers or requiring hospitals to finance rebate float. A rebate model is therefore neither necessary nor appropriate to achieve program integrity goals. 110 Free Street, Portland, ME 04101 MaineHealth Reliance Interests The RFI invites comment on whether covered entities have reasonable reliance interests in continuing to receive 340B ceiling prices through upfront discounts, particularly considering statutory language permitting the Secretary to provide discounts through either a "rebate or discount." That framing rests on a flawed premise. The mere existence of statutory authority to permit multiple mechanisms does not negate reliance on a particular approach where the agency has, through consistent and longstanding practice, affirmatively fostered settled expectations. For more than three decades, HRSA has implemented the 340B statute through an upfront discount model. During that time, covered entities, including our hospital system's Disproportionate Share Hospitals and CAHs in Maine and New Hampshire, have structured their operations, staffing, vendor relationships, compliance programs, and long-term financial planning around the certainty and immediacy of acquisition-based pricing. This was not casual reliance. It was reliance induced by agency action that remained consistent across administrations, market changes, and statutory amendments. In rural Maine and northern New Hampshire, where hospitals operate with limited liquidity and minimal administrative overhead, that reliance is particularly acute. Our CAHs are designed to operate on narrow margins and limited cash reserves, and several serve as the sole providers of hospital and outpatient services within large geographic regions. These hospitals have integrated anticipated 340B savings, received through upfront discounts, into annual operating budgets, cash-on-hand projections, capital planning, and decisions regarding the continuation of essential but low-margin services such as outpatient oncology, infusion, pharmacy, and emergency care. A sudden shift to a rebate-based model would not merely alter administrative mechanics; it would invalidate foundational assumptions embedded across hospital operations. Hospitals cannot simply unwind years of system design, staffing models, vendor contracts, and financial planning without incurring substantial cost and disruption. For CAHs in Maine and New Hampshire, the disruption would be existential. Even temporary uncertainty regarding the timing and receipt of 340B savings would threaten service continuity and force hospitals to reassess whether they can continue offering certain lines of care. Importantly, HRSA has never identified a systemic failure in the upfront discount model that would justify such a disruptive change. On the contrary, the agency's own audit framework, under which HRSA audits both covered entities and manufacturers, has functioned for decades to protect program integrity without requiring hospitals to finance manufacturers' statutory obligations through rebate float. In the absence of demonstrated harm arising from the existing model, abandoning it would represent an unexplained departure from settled policy that disregards legitimate reliance interests. Moreover, reliance here is not merely operational; it is programmatic and patient-focused. Our hospitals have used 340B savings achieved through upfront discounts to expand access to services 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth in rural and underserved communities, invest in workforce retention, and absorb uncompensated care costs. These investments cannot be paused or restructured on short notice without direct consequences for patients. In rural Maine and New Hampshire, where alternative providers may be hours away, service disruptions translate directly into delayed care, missed treatment, and poorer health outcomes. Finally, the fact that a rebate mechanism may be theoretically permissible under the statute does not require HRSA to adopt it, particularly when doing so would impose disproportionate harm on covered entities. Agency discretion must be exercised in a manner consistent with statutory purpose, reasoned decision-making, and the protection of reliance interests that the agency itself has cultivated. A rebate model, especially one implemented without demonstration of need and without neutral safeguards, fails that test. For all these reasons, the reliance interests of covered entities weigh heavily against any transition away from the longstanding upfront discount model. HRSA should preserve the existing framework that has enabled rural and safety-net hospitals in Maine and New Hampshire to fulfill the mission Congress established when it enacted the 340B Program. Alternatives to a Rebate Model If HRSA determines that additional safeguards are necessary to address deduplication, data sharing, or oversight concerns, those goals can be achieved through neutral, third-party solutions that are agnostic to data receipt and do not involve manufacturer adjudication of rebates. Notably, the solution proposed during the prior attempted rebate pilot was backed by PhRMA and was not structurally neutral. Rather than functioning as a true data-aggregation or validation utility, the platform was designed to support manufacturer-controlled rebate adjudication, thereby entrenching the very power imbalance that places covered entities at risk. Such an approach is incompatible with the 340B statutory framework and fails to protect hospitals and patients. In contrast, a genuinely independent third-party clearinghouse, focused solely on secure data exchange and reconciliation and subject to HRSA oversight, could address deduplication concerns without shifting financial risk, delaying access to statutory discounts, or granting manufacturers authority they do not possess under the law. Absent a reasoned explanation for why such neutral alternatives are infeasible, adoption of a rebate model would represent an unjustified and harmful departure from longstanding practice. Conclusion For hospitals serving rural and underserved communities in Maine and New Hampshire, the consequences of a 340B rebate model would be immediate, concrete, and deeply harmful. The record developed through this RFI demonstrates that any rebate-based mechanism, whether 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth styled as a pilot or otherwise, would fundamentally undermine the statutory purpose of the 340B Program, disregard decades of settled reliance interests fostered by the agency itself, and impose severe administrative, operational, and financial burdens on covered entities that are least able to absorb them. The current upfront discount model has functioned effectively for more than thirty years, enabling hospitals to stretch scarce resources and deliver comprehensive care in communities with limited access to health services. HRSA has not identified a systemic failure in that model that would justify abandoning it. To the contrary, experiences under the existing MFP rebate framework already illustrate the significant risks inherent in manufacture-adjudicated rebate systems, including delayed or unpaid rebates, unilateral eligibility determinations by manufacturers lacking statutory authority, and demonstrable error rates, such as those observed at MaineHealth of 40%. Extending these flawed mechanisms into the 340B Program would magnify harm and institutionalize dysfunction. Rural hospitals and Critical Access Hospitals in Maine and New Hampshire operate on thin margins, limited liquidity, and minimal administrative capacity. Several serve as the sole providers of hospital care across large geographic areas, where patients face long travel distances and weather-related access challenges. For these hospitals, a rebate model's combination of cash-flow disruption, staffing diversion, expanded data burdens, and manufacturer-controlled adjudication would directly threaten the continuation of essential services, including outpatient pharmacy, infusion, oncology, emergency care, and primary care. The resulting impact would fall most heavily on elderly, low-income, and medically complex patients, precisely those populations the 340B statute was enacted to protect. A rebate model would shift core oversight and decision-making functions away from HRSA and toward manufacturers. Congress vested HRSA, not drug manufacturers, with authority to oversee program compliance, including through audits of both covered entities and manufacturers. Allowing manufacturers to determine eligible patients, eligible claims, and entitlement to statutory discounts would conflict with the statutory framework and erode trust in program administration. Critically, HRSA has less disruptive and more lawful options available to address any concerns related to deduplication, data visibility, or oversight. Neutral, third-party data exchange or clearinghouse solutions under HRSA oversight can achieve these objectives without transferring financial risk to hospitals or conditioning access to statutory discounts on manufacturer-controlled rebate processes. HRSA has not offered a reasonable explanation for rejecting such alternatives, nor has it demonstrated that a rebate model is necessary or appropriate. For these reasons, MaineHealth respectfully urges HRSA to abandon the concept of a 340B rebate model in its entirety. Preserving the longstanding upfront discount framework is essential to fulfilling Congress's intent, protecting reliance interests, and ensuring continued access to care for patients in rural Maine, New Hampshire, and similarly situated communities across the country. 110 Free Street, Portland, ME 04101 mainehealth.org MaineHealth Thank you again for the opportunity to comment. Sincerely, Brian Marden (Apr 20, 2026 09:21:25 EDT) C Brian Marden, Pharm.D. Chief Pharmacy Officer, MaineHealth 110 Free Street, Portland, ME 04101
HRSA-2026-0001-1947The Memorial Hospital2026-04-20T04:00Z35,778 chars
HRSA-2026-03042 29 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Memorial Hospital in Craig, CO, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on The Memorial Hospital in Craig, CO, that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which The Memorial Hospital in Craig, CO, has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Memorial Hospital in Craig, CO, has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 30 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The Memorial Hospital in Craig, CO, can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require The Memorial Hospital in Craig, CO, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, The Memorial Hospital in Craig, CO, understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Craneware, the third-party vendor we employ for 340B services, is planning to charge an additional $35,000 for the first year of a 340B Model Rebate Pilot Program, with the annual fee $25,000 for each successive year. Additionally, our preliminary estimates suggest that we will incur significant upfront costs for medications among those that HRSA approved for the Rebate Program. We made these estimates solely based on these initial nine drugs, meaning we do not yet know the cost and administrative impact of the full program implementation; as this list of medications grows each year, we anticipate having more upfront costs and additional loss of 340B savings after these rollout estimates: Outpatient pharmacy, $161,657; and Inpatient pharmacy, $6,862. After the Rebate Program launch, Craneware suggested that they may be able to help with upfront costs for processing and tracking claims; however, we understand that our pharmacy team will still need to confirm correct processing with each claim and track receipt of all rebate dollars. Since we do not know the full scope of this administrative work, we cannot provide an estimate for what we assume will be another significant upfront cost for our small team. One prediction is at least eight hours per week for our retail pharmacy director, with Craneware potentially taking on some of the work from this 0.2 FTE or greater staffing burden. As such, this part of the Rebate Program remains an unknown as we look to calculate the full costs and administrative tasks. 31 With an estimate of $168,519 for our outpatient and inpatient pharmacies, plus the $35,000 fee from Craneware, we can safely assume that the 340B Rebate Program will cost our organization more than $203,519 in the first year. This total does not factor the full list of 25 drugs but only includes the nine HRSA approved for the implementation, and it does not include additional staffing time necessary to process and track claims, plus Cranewares assistance in completing these tasks. Overall, this administrative work and the accompanying costs will place a massive burden on our team that we cannot currently meet. This significant initial cost estimate will also drastically reduce our 340B savings and significantly add to the workload of a small team at a 25-bed Critical Access Hospital in a remote area. Staffing Impacts Under a Potential 340B Rebate Program. The Memorial Hospital in Craig, CO, does not currently have the staff needed to comply with a Rebate Program. As the previous section explains, Craneware may be able to assume some of the staffing burden after implementation of the Rebate Program; however, as we also detail previously, we do not know how much administrative work the program will require. After full rollout of up to 25 drugs, this staffing requirement will add significant upfront costs to our small teamboth for administrative time with our directors, as well as larger hourly rates for Cranewares assistance. Initially, we assume that our team will have to absorb at least eight hours per week on these tasks, with Craneware providing the rest. Again, this total is solely for the nine medications HRSA approved for the initial program rollout, meaning five hours per week is a gross underestimate for the administrative burden with full program implementation of up to 25 drugs. In sum, our small pharmacy team cannot take on this additional work without either adding full-time staff or relying on costly extra assistance from Craneware. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. The Memorial Hospital in Craig, CO, has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. While the process of tracking and registering claims will not change, the Rebate Program will create substantial confusion in adding multiple platforms to this work. Currently, the three platforms HRSA proposed for the Rebate Program are not integrated in our electronic health records (EHR) or our outpatient software. As such, a member of our outpatient team will likely have to take on this extra work of manually tracking and verifying claims. Our small pharmacy team already has difficulties in processing medical claims data, meaning this extra work will add layers of complexity to that work with manual extraction and verification. 32 Overall, we do not know whether we will incur additional system costs in this work, but we assume our pharmacy directors will have to spend significant time developing, integrating, and maintaining these new processes. This development time will add additional burdens to our staff. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Although our organization has been an approved 340B Program site for years, our pharmacy directors finally received access to 340B ESP after February 1, 2026. Previously, HRSA stated that only contract pharmacies required this access; as a county- owned hospital, we did not receive access under these guidelines. We are still in the process of verifying whether 340B ESP can meet the data requirements under these new guidelines, or whether Craneware will need to provide this data. Overall, this data collection requirement will add to our current uncertainty. If we have another data collection requirement under the Rebate Program, our small pharmacy team will face a significant administrative burden that we cannot meet with our current staffing setup. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force The Memorial Hospital in Craig, CO, to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We do not yet know the full scope of the adverse impacts to our organization under the Rebate Program, as we report above, but we do know they will be significant to all pharmacy operations. Specific to our outpatient pharmacy, we provide most medications through 340B to our Medicare and Medicaid populations. Since our pharmacy has the sole delivery service in our remote region, many Medicare and Medicaid patients also use this option. If we cannot pay for high upfront costs of specific drugs, we may have to transfer these prescription requests to other pharmaciesall of which do not have a delivery option. As such, we believe that many patients will become uncompliant with their medications, increasing their health risks and the potential for emergency services. 33 This process will reduce our ability to provide specific servicesespecially for these high-risk populationsthereby passing on costs to other patients and lessening our financial stability. As a major employer and economic engine for our isolated county and greater area, this cascading effect will have many negative impacts on local communities. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that The Memorial Hospital in Craig, CO, will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Beyond what we describe previously, we do not yet know the full financial risks to our organization under the Rebate Program, including upfront costs, staffing impacts, and administrative burden. We assume these risks are substantial, but we cannot yet fully understand them based on the current guidance. Specific to our outpatient pharmacy, we do know that the Rebate Program will force us to purchase the listed medications at full price as we replenish them for each patient, potentially incurring those upfront costs multiple times prior to rebates from drug companies. This upfront cost alone will be significant as we strive to price medications accordingly for our patients. In an isolated region with few pharmacies available, this will increase healthcare costs for the patients we serve, high numbers of which use Medicare or Medicaid each year. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. The Memorial Hospital in Craig, CO, reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. 34 Our current budget assumes that we realize savings from 340B as upfront discounts at the time of purchase. However, if we instead apply these discounts retrospectively, this introduces variability in monthly cash flow depending on reimbursement timing and structure. Delays in receiving 340B savings could create short-term liquidity challenges and may impact day-to-day operations, particularly if funds are tied up for extended periods. Additionally, the retrospective nature of these discounts makes future budgeting more complex, as savings become dependent on fluctuating drug utilization and mix. Variability in the use of high-cost, high-discount medications further amplifies this uncertainty. Significant swings in utilization could materially affect cash flow and operational stability, especially if the Rebate Program requires increased administrative burden to track, reconcile, and recover these discounts. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on The Memorial Hospital in Craig, CO, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date, drug companies have not raised deduplication issues with our organization or Craneware. In our collective experience, manufacturers are currently addressing these issues through the BeaconMFP platform, where they tend to reject MFP claims if they suspect a 340B discount was appliedeven when the claim might not actually be eligible for 340B. This approach typically leads to over-identification of 340B and underpayment of MFP, which is particularly noticeable for entity-owned pharmacies like ours. 35 Overall, we cannot accurately predict the impact of these issues under the Rebate Program. One scenario is that manufacturers could simply approve MFP and deny any 340B claims associated with those MFP claims. Alternatively, they could deny MFP altogether if they anticipate that those claims will be eligible for 340B, even if they do not eventually qualify. We anticipate that the number of 340B claims will decrease, although we cannot predict the difference between current 340B claim levels. Finally, we believe that a rebate model is not necessary to manage deduplication issues. We designed our partnership with Craneware, for example, to identify when 340B claims have already been paid at MFP, and we can reverse those claims to proactively prevent deduplication concerns. For all of these reasons, The Memorial Hospital in Craig, CO, respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow The Memorial Hospital in Craig, CO, and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jennifer Riley, MHA, FACHE Chief Executive Officer The Memorial Hospital in Craig, CO The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Memorial Hospital in Craig, CO, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on The Memorial Hospital in Craig, CO, that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which The Memorial Hospital in Craig, CO, has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Memorial Hospital in Craig, CO, has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The Memorial Hospital in Craig, CO, can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require The Memorial Hospital in Craig, CO, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, The Memorial Hospital in Craig, CO, understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Craneware, the third-party vendor we employ for 340B services, is planning to charge an additional $35,000 for the first year of a 340B Model Rebate Pilot Program, with the annual fee $25,000 for each successive year. Additionally, our preliminary estimates suggest that we will incur significant upfront costs for medications among those that HRSA approved for the Rebate Program. We made these estimates solely based on these initial nine drugs, meaning we do not yet know the cost and administrative impact of the full program implementation; as this list of medications grows each year, we anticipate having more upfront costs and additional loss of 340B savings after these rollout estimates: Outpatient pharmacy, $161,657; and Inpatient pharmacy, $6,862. After the Rebate Program launch, Craneware suggested that they may be able to help with upfront costs for processing and tracking claims; however, we understand that our pharmacy team will still need to confirm correct processing with each claim and track receipt of all rebate dollars. Since we do not know the full scope of this administrative work, we cannot provide an estimate for what we assume will be another significant upfront cost for our small team. One prediction is at least eight hours per week for our retail pharmacy director, with Craneware potentially taking on some of the work from this 0.2 FTE or greater staffing burden. As such, this part of the Rebate Program remains an unknown as we look to calculate the full costs and administrative tasks. With an estimate of $168,519 for our outpatient and inpatient pharmacies, plus the $35,000 fee from Craneware, we can safely assume that the 340B Rebate Program will cost our organization more than $203,519 in the first year. This total does not factor the full list of 25 drugs but only includes the nine HRSA approved for the implementation, and it does not include additional staffing time necessary to process and track claims, plus Cranewares assistance in completing these tasks. Overall, this administrative work and the accompanying costs will place a massive burden on our team that we cannot currently meet. This significant initial cost estimate will also drastically reduce our 340B savings and significantly add to the workload of a small team at a 25-bed Critical Access Hospital in a remote area. Staffing Impacts Under a Potential 340B Rebate Program. The Memorial Hospital in Craig, CO, does not currently have the staff needed to comply with a Rebate Program. As the previous section explains, Craneware may be able to assume some of the staffing burden after implementation of the Rebate Program; however, as we also detail previously, we do not know how much administrative work the program will require. After full rollout of up to 25 drugs, this staffing requirement will add significant upfront costs to our small teamboth for administrative time with our directors, as well as larger hourly rates for Cranewares assistance. Initially, we assume that our team will have to absorb at least eight hours per week on these tasks, with Craneware providing the rest. Again, this total is solely for the nine medications HRSA approved for the initial program rollout, meaning five hours per week is a gross underestimate for the administrative burden with full program implementation of up to 25 drugs. In sum, our small pharmacy team cannot take on this additional work without either adding full-time staff or relying on costly extra assistance from Craneware. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. The Memorial Hospital in Craig, CO, has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. While the process of tracking and registering claims will not change, the Rebate Program will create substantial confusion in adding multiple platforms to this work. Currently, the three platforms HRSA proposed for the Rebate Program are not integrated in our electronic health records (EHR) or our outpatient software. As such, a member of our outpatient team will likely have to take on this extra work of manually tracking and verifying claims. Our small pharmacy team already has difficulties in processing medical claims data, meaning this extra work will add layers of complexity to that work with manual extraction and verification. Overall, we do not know whether we will incur additional system costs in this work, but we assume our pharmacy directors will have to spend significant time developing, integrating, and maintaining these new processes. This development time will add additional burdens to our staff. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Although our organization has been an approved 340B Program site for years, our pharmacy directors finally received access to 340B ESP after February 1, 2026. Previously, HRSA stated that only contract pharmacies required this access; as a county-owned hospital, we did not receive access under these guidelines. We are still in the process of verifying whether 340B ESP can meet the data requirements under these new guidelines, or whether Craneware will need to provide this data. Overall, this data collection requirement will add to our current uncertainty. If we have another data collection requirement under the Rebate Program, our small pharmacy team will face a significant administrative burden that we cannot meet with our current staffing setup. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force The Memorial Hospital in Craig, CO, to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We do not yet know the full scope of the adverse impacts to our organization under the Rebate Program, as we report above, but we do know they will be significant to all pharmacy operations. Specific to our outpatient pharmacy, we provide most medications through 340B to our Medicare and Medicaid populations. Since our pharmacy has the sole delivery service in our remote region, many Medicare and Medicaid patients also use this option. If we cannot pay for high upfront costs of specific drugs, we may have to transfer these prescription requests to other pharmaciesall of which do not have a delivery option. As such, we believe that many patients will become uncompliant with their medications, increasing their health risks and the potential for emergency services. This process will reduce our ability to provide specific servicesespecially for these high-risk populationsthereby passing on costs to other patients and lessening our financial stability. As a major employer and economic engine for our isolated county and greater area, this cascading effect will have many negative impacts on local communities. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that The Memorial Hospital in Craig, CO, will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Beyond what we describe previously, we do not yet know the full financial risks to our organization under the Rebate Program, including upfront costs, staffing impacts, and administrative burden. We assume these risks are substantial, but we cannot yet fully understand them based on the current guidance. Specific to our outpatient pharmacy, we do know that the Rebate Program will force us to purchase the listed medications at full price as we replenish them for each patient, potentially incurring those upfront costs multiple times prior to rebates from drug companies. This upfront cost alone will be significant as we strive to price medications accordingly for our patients. In an isolated region with few pharmacies available, this will increase healthcare costs for the patients we serve, high numbers of which use Medicare or Medicaid each year. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. The Memorial Hospital in Craig, CO, reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our current budget assumes that we realize savings from 340B as upfront discounts at the time of purchase. However, if we instead apply these discounts retrospectively, this introduces variability in monthly cash flow depending on reimbursement timing and structure. Delays in receiving 340B savings could create short-term liquidity challenges and may impact day-to-day operations, particularly if funds are tied up for extended periods. Additionally, the retrospective nature of these discounts makes future budgeting more complex, as savings become dependent on fluctuating drug utilization and mix. Variability in the use of high-cost, high-discount medications further amplifies this uncertainty. Significant swings in utilization could materially affect cash flow and operational stability, especially if the Rebate Program requires increased administrative burden to track, reconcile, and recover these discounts. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on The Memorial Hospital in Craig, CO, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. To date, drug companies have not raised deduplication issues with our organization or Craneware. In our collective experience, manufacturers are currently addressing these issues through the BeaconMFP platform, where they tend to reject MFP claims if they suspect a 340B discount was appliedeven when the claim might not actually be eligible for 340B. This approach typically leads to over-identification of 340B and underpayment of MFP, which is particularly noticeable for entity-owned pharmacies like ours. Overall, we cannot accurately predict the impact of these issues under the Rebate Program. One scenario is that manufacturers could simply approve MFP and deny any 340B claims associated with those MFP claims. Alternatively, they could deny MFP altogether if they anticipate that those claims will be eligible for 340B, even if they do not eventually qualify. We anticipate that the number of 340B claims will decrease, although we cannot predict the difference between current 340B claim levels. Finally, we believe that a rebate model is not necessary to manage deduplication issues. We designed our partnership with Craneware, for example, to identify when 340B claims have already been paid at MFP, and we can reverse those claims to proactively prevent deduplication concerns. For all of these reasons, The Memorial Hospital in Craig, CO, respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow The Memorial Hospital in Craig, CO, and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jennifer Riley, MHA, FACHE Chief Executive Officer The Memorial Hospital in Craig, CO
HRSA-2026-0001-1948Swedish Covenant Health2026-04-20T04:00Z17,867 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimate have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, 2 more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Key cost drivers will include increased staffing, diverting current staff, IT systems and third-party vendors to set up data feeds, financial process to reconcile and verify rebates paid, compliance activities, labor hours, process for challenging denials. Activities include but are not limited to vendor data feed set up and testing, claims processing, data submission, reconciliation/requests for rebates pending, audit support, challenging denials). Lack of information available or transparency from the manufacturers of how appeals on rejected claims will be reviewed and a timeline for these reviews. Currently many organizations are expecting up to a 30% rejection rate based on current use of the manufacturer 340B ESP platform, which again has a multiple million dollar drug budget impact. Implementation of a potential 340B Rebate Program will also require significant one-time fees associated with external consultant 340b and internal legal counsel, executive support, information technology, compliance review, staff training, and vendor support services. For data integrity and compliance, would need to purchase additional vendor software and annual fee approaching a half-million dollars annually to account for rebate data submission, claim approval or rejection, and creation of a queue for our staff to resubmit rejected claims. Minimally would require the addition of four full time employees for pharmacy and two employees in finance/revenue cycle with 340b and data analytic skills to 3 monitor this process considering there is no turn-key solution to support monitoring of the rebate program in terms of claims processing, data submission, reconciliation/requests for rebates pending, audit support, and working through challenging denials. In addition, would need to create a new process to reconcile payments received vs. rebates expected within our billing system. These would be ongoing costs to retain these staff to support the rebate model. The above costs will impact our fiscal viability and will lead to a reduction in services offered that are crucial to support the care and treatment of our patients. Staffing Impacts Under a Potential 340B Rebate Program. Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL does not currently have the staff needed to comply with a Rebate Program. This program would continue the ongoing trend of adding administrative burden to the health care providers by requiring resources that do not directly or indirectly impact patient care. Minimally would require the addition of four full time employees for pharmacy and two employees in finance/revenue cycle with 340b and data analytic skills to monitor this process considering there is no turn-key solution to support monitoring of the rebate program in terms of claims processing, data submission, reconciliation/requests for rebates pending, audit support, and working through challenging denials. In addition, would need to create a new process to reconcile payments received vs. rebates expected within our billing system. These would be ongoing costs to retain these staff to support the rebate model. As these are new staff and new process required to address the volume of claims potentially impacted by the rebate model today and for future, HRSAs current estimate of only 5 hours per week in additional work (for 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. 4 For data integrity and compliance, would need to purchase additional vendor software and annual fee approaching a half-million dollars annually to account for rebate data submission, claim approval or rejection, and creation of a queue for our staff to resubmit rejected claims. Minimally would require the addition of four full time employees for pharmacy and two employees in finance/revenue cycle with 340b and data analytic skills to monitor this process considering there is no turn-key solution to support monitoring of the rebate program in terms of claims processing, data submission, reconciliation/requests for rebates pending, audit support, and working through challenging denials. In addition, would need to create a new process to reconcile payments received vs. rebates expected within our billing system. These would be ongoing costs to retain these staff to support the rebate model. Implementation of a potential 340B Rebate Program will also require some one- time fees information technology, compliance review, staff training, and vendor support services. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. o Currently we do not submit data to 340B ESP. Implementation of the rebate model would require us to data share with an external vendor which will require considerable resources as described above since this will be a new process for us. o Currently we use our electronic health record reports, third party administrator software, and manual review by staff to collect, maintain, retain, and validate or audit data related to 340B Program participation. Most of the data auditing is a manual process. In addition, to solidify our auditing practices we engage an outside vendor for an external annual audit of our 340b program data. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior 5 iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. o Purchasing drugs on WAC up front will have a tens of millions of dollars impact to us. Payment within ten calendar days of submission of a complete claim under a potential 340B Rebate Model Pilot Program will significantly impact our cash flow, especially when considering high cost, high use, specialty or chemotherapy treatments. We pay our wholesaler invoices on a daily basis therefore a 10-day delay is very significant, increased, upfront cost to us. o The change in purchase model will significantly impact our budget, our ability to maintain existing services, and our ability to care for our underserved, uninsured, and underinsured patients. Some infusion center locations and services may be reduced or closed. o Also, if claims are denied, there has not been a clear path or process identified to refute those claims. Will manufacturers have sufficient staff to field these phone calls and review of resubmitted claims? Will information be clear on why a claim was rejected? What will be the turn around review time for resubmitted claims? Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. o The overall financial impact to us is substantial. Some infusion center locations for specialty and oncology treatments and various supportive patient care services may be reduced or closed. New services or locations may not be opened as planned (i.e. addiction medicine, behavioral health, orthopedics immediate care). Treatment options for high-cost medications may have to be reduced and the formulary limited with further restrictions. o Swedish Covenant Health dba Endeavor Health Swedish Hospital is located in a very diverse Chicago neighborhood. As a safety net and disproportionate share hospital we provide services to a large percent of Medicare and Medicaid patients as well as underserved, uninsured, or underinsured patients. We see a large population of unhoused, refugee, and behavioral health patients with many social determinants of health challenges and the proportion of these patients has increased since a neighboring hospital closed this past fall. 6 Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. 340B savings through upfront discounts are budgeted into our finances to estimate financial planning and viability for cash-on-hand financial projections. Annual 340B savings are accounted for in the annual budget with expected drug expense for a predicted volume of patients. Reduction or delay in payments will negatively impact long term planning and may stop projects for new services and reduce the ability for facility and equipment repairs of aging spaces. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon will not sign a business associate agreement with either us as the covered entity or the third-party administrator. This does not provide nor ensure that the potential 340B Rebate Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission. There are no protections for our hospital of how patient specific data are handled outside of our organization, yet we are liable for these patients. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 7 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Alicia Juska, PharmD, BCPS Director of Pharmacy and Primary Contact Swedish Covenant Health dba Endeavor Health Swedish Hospital in Chicago, IL
HRSA-2026-0001-1949Sumner Community Club DBA Community Memorial Hospital2026-04-20T04:00Z14,684 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Sumner Community Club DBA Community Memorial Hospital (CMH) of Sumner, IA, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. CMH serves as a cornerstone of healthcare for the Sumner region, providing essential services as a private nonprofit. Entirely independent of local tax dollars, the facility maintains a dedicated staff for 12 inpatients to meet the needs of our small rural community. The 340B program is critical at CMH given that the median individual income in Sumner is approximately $34,310. This is nearly $10,000 below the average for Bremer County. Preserving upfront 340B discounts, which CMH has relied on for decades to sustain care for these high-need patients, is the best way to fulfill the core purpose of the 340B program. The RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on CMH that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. CMH has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that CMH can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require CMH to spend significant amounts of 340b savings on new administrative costs. To describe this significance in more detail the initial 10 drugs under consideration represent 40% of our qualifying transactions; adding the additional 15 drugs would increase that rate to 59%. Forcing nearly 60% of our 340B volume into a rebate model is not a minor adjustment. Our projected costs for one-time items include approximately $4,000 - $6,000. These numbers are estimates for one-time professional services for legal review, consulting services, the significant labor hours for training new staff and developing new procedures. Ongoing costs are difficult to estimate but are approximated to be an additional $4,000 - $6,000 per year. While HRSA and drug companies have suggested a rebate mechanism would not impose new data burdens, this is incorrect. We receive data reports from our affiliate IT teams, however the responsibility to manually verify that data is accurate and non-duplicated falls on our local pharmacy staff. A rebate model would force us to hire additional staff or vendors to manage the manual review and verification required for data submission and these costs are discussed below. Furthermore, in our rural area, employee turnover poses a unique risk; the complexity of a rebate model increases the likelihood of errors during staff transitions, potentially leading to legal issues that do not exist under our current, stable model. Staffing Impacts Under a Potential 340B Rebate Program CMH does not currently have the staff needed to comply with a Rebate Program. HRSAs current estimate of only 5 hours per week in additional work is a gross underestimate for a program that would encompass nearly 60% of our transactions. Implementation would require: Hiring a 340B Coordinator ($70,200): To manage changes in the 340B program, data submission, auditing, reconciliation and the challenging of denials. Increased Pharmacist FTE ($20,760): We would need to increase our current Pharmacist staffing to provide necessary oversight and troubleshooting without diverting time from direct patient care. Adverse Impacts of These Additional Costs and Burdens The financial health of our hospital relies heavily on 340B program integrity. Currently, our hospital benefits from $240,000 in annual 340B savings, with an additional $335,000 in annual retail 340B revenue. These funds are critical to our survival as a rural provider. The projected $90,960 in new staffing costs alone would effectively eliminate nearly 38% of our hospital's annual savings. When combined with the administrative "tax" of managing a rebate model for 59% of our transactions, the program's benefits are severely eroded. Every dollar diverted to administrative compliance is a dollar removed from direct patient services. This uncertainty has already affected our future planning. Due to the uncertainty of where the 340B program will end up, our facility has been left in limbo and holding off on key projects that could benefit our community and patients. Forcing our facility to "float" the difference between the WAC price and the 340B price leaves CMH with less cash equivalents to invest in new projects and services. Efforts To Avoid 340B/MDPNP Duplicate Discounts CMH maintains a thorough internal self-audit procedure and partners with an outside vendor for comprehensive quarterly audits. Over the past year, these quarterly audits have shown duplicate discount transaction rates ranging from 0% to a maximum of only 0.08%. Furthermore, our most recent HRSA audit resulted in no findings, underscoring the effectiveness of our current compliance framework. This proven track record demonstrates that the upfront discount model is functioning with near-perfect integrity and that a rebate model is unnecessary for our facility. For all of these reasons, CMH respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA should abandon the concept altogether and embrace a neutral, third-party clearinghouse. Sincerely, Dawn Everding President/CFO Community Memorial Hospital Sumner, IA 50674 Mandy Kellogg Pharmacist-In-Charge Community Memorial Hospital Sumner, IA 50674 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Sumner Community Club DBA Community Memorial Hospital (CMH) of Sumner, IA, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. CMH serves as a cornerstone of healthcare for the Sumner region, providing essential services as a private nonprofit. Entirely independent of local tax dollars, the facility maintains a dedicated staff for 12 inpatients to meet the needs of our small rural community. The 340B program is critical at CMH given that the median individual income in Sumner is approximately $34,310. This is nearly $10,000 below the average for Bremer County. Preserving upfront 340B discounts, which CMH has relied on for decades to sustain care for these high-need patients, is the best way to fulfill the core purpose of the 340B program. The RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on CMH that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. CMH has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that CMH can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require CMH to spend significant amounts of 340b savings on new administrative costs. To describe this significance in more detail the initial 10 drugs under consideration represent 40% of our qualifying transactions; adding the additional 15 drugs would increase that rate to 59%. Forcing nearly 60% of our 340B volume into a rebate model is not a minor adjustment. Our projected costs for one-time items include approximately $4,000 - $6,000. These numbers are estimates for one-time professional services for legal review, consulting services, the significant labor hours for training new staff and developing new procedures. Ongoing costs are difficult to estimate but are approximated to be an additional $4,000 - $6,000 per year. While HRSA and drug companies have suggested a rebate mechanism would not impose new data burdens, this is incorrect. We receive data reports from our affiliate IT teams, however the responsibility to manually verify that data is accurate and non-duplicated falls on our local pharmacy staff. A rebate model would force us to hire additional staff or vendors to manage the manual review and verification required for data submission and these costs are discussed below. Furthermore, in our rural area, employee turnover poses a unique risk; the complexity of a rebate model increases the likelihood of errors during staff transitions, potentially leading to legal issues that do not exist under our current, stable model. Staffing Impacts Under a Potential 340B Rebate Program CMH does not currently have the staff needed to comply with a Rebate Program. HRSAs current estimate of only 5 hours per week in additional work is a gross underestimate for a program that would encompass nearly 60% of our transactions. Implementation would require: Hiring a 340B Coordinator ($70,200): To manage changes in the 340B program, data submission, auditing, reconciliation and the challenging of denials. Increased Pharmacist FTE ($20,760): We would need to increase our current Pharmacist staffing to provide necessary oversight and troubleshooting without diverting time from direct patient care. Adverse Impacts of These Additional Costs and Burdens The financial health of our hospital relies heavily on 340B program integrity. Currently, our hospital benefits from $240,000 in annual 340B savings, with an additional $335,000 in annual retail 340B revenue. These funds are critical to our survival as a rural provider. The projected $90,960 in new staffing costs alone would effectively eliminate nearly 38% of our hospital's annual savings. When combined with the administrative "tax" of managing a rebate model for 59% of our transactions, the program's benefits are severely eroded. Every dollar diverted to administrative compliance is a dollar removed from direct patient services. This uncertainty has already affected our future planning. Due to the uncertainty of where the 340B program will end up, our facility has been left in limbo and holding off on key projects that could benefit our community and patients. Forcing our facility to "float" the difference between the WAC price and the 340B price leaves CMH with less cash equivalents to invest in new projects and services. Efforts To Avoid 340B/MDPNP Duplicate Discounts CMH maintains a thorough internal self-audit procedure and partners with an outside vendor for comprehensive quarterly audits. Over the past year, these quarterly audits have shown duplicate discount transaction rates ranging from 0% to a maximum of only 0.08%. Furthermore, our most recent HRSA audit resulted in no findings, underscoring the effectiveness of our current compliance framework. This proven track record demonstrates that the upfront discount model is functioning with near-perfect integrity and that a rebate model is unnecessary for our facility. For all of these reasons, CMH respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA should abandon the concept altogether and embrace a neutral, third-party clearinghouse. Sincerely, Dawn Everding President/CFO Community Memorial Hospital Sumner, IA 50674 Mandy Kellogg Pharmacist-In-Charge Community Memorial Hospital Sumner, IA 50674
HRSA-2026-0001-1950(no commenter metadata)2026-04-20T04:00Z14,202 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information HRSA-2026-03042 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906-NEW Submitted via regulations.gov comments portal and paperwork@hrsa.gov Dear Director Britton: On behalf of Yellowstone City County Health Department dba RiverStone Health (RiverStone Health), I would like to thank the Health Resources and Services Administration (HRSA) for providing the opportunity to share our estimated burden with HRSA on compliance with the 340B rebate model pilot program. Given the severe administrative, financial, and operational burden a rebate model would place on CHCs, RiverStone Health strongly urges HRSA to exempt CHCs from the pilot program. RiverStone Health is a multi-jurisdictional health district serving Yellowstone and Carbon Counties, Montana. RiverStone Health operates a full-scope federally qualified health center (including a Healthcare for the Homeless program), home health and hospice services, the Yellowstone City County Health Department, the Montana Family Medicine Residency Program, and an AHEC/AETC training program. RiverStone Health also operates an entity owned and 340B contract pharmacy network filling approx. 52,000 prescriptions per year. Approx. 37,000 of the prescriptions filled each year are 340B eligible. The 340B program is foundational to RiverStones ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety- net providers directly serving patients through a rebate model threatens to destabilize RiverStone Healths pharmacy operations. Based on our internal assessment, the hours and dollars spent complying with a rebate program are staggering. I. We Request HRSA Exempt CHCs from the 340B Rebate Model Pilot Program Due to Significant Financial and Administrative Burden. II. Including CHCs in the rebate model pilot is a disproportionate response to 340B entities that are, by-and-large, excellent stewards of the program. III. RiverStone Health has had an exemplary track record of compliance with 340B program and individual drug manufacturer requirements. In the history of RiverStone Healths participation in the 340B program, we have never had an adverse 340B audit finding, we have had no instances of duplicate discounts occurring, we provide 100% of 340B savings to uninsured patients at the point of sale, and we reinvest 100% of our 340B revenue into providing enhanced access and services for our patients. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the approx. 14,000 patients who rely on us. RiverStone Health operates on small margins and our estimates indicate that our upfront cash outlay for purchasing the 340B medications subject to the rebate pilot would go from approx. $18,000 to $1.3Million annually. This represents a 7,000% increase in our up-front cash outlay. Up front expense increases of this magnitude will significantly impact our ability to ensure 340B savings are passed along to our patients. In addition to navigating manufacturers existing contract pharmacy restrictions, RiverStone will need to hire additional staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. We will face an increased administrative burden in monitoring rebate claims and payments. Based on historical data, just a 5% manufacturer rebate denial rate would result in the loss or delay of approx. $65,000 annually. RiverStone Health has already experienced increases in operational costs given the multitude of manufacturer restrictions, including requirements for clinic-administered drugs and entity-owned pharmacies. A rebate model will require a significant increase in already-strained operational capabilities. Workforce Impact: Staffing Impact: RiverStone Health anticipates needing 1.0 additional FTE at a cost of approx. $75,000/annually to account for the increase in operational, administrative, and compliance burden created by a rebate model. Number of Hours: RiverStone Health will face an increased administrative burden to monitor rebate claims and payments. We estimate 10 hours weekly will be required to report 340B rebate claims to all of the different third-party platform, payment reconciliations, and manage the dispute process in the event of denied rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires both staff and changes to workflow and software. HRSA should consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers can select different software platforms, like current contract pharmacy policies and as was the case when this pilot was going to be originally implemented, CHC administrative burden would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these rebate-tracking features. These permanent, recurring costs diminish our 340B savings. To date, our software vendor and our TPA have been unable to provide RiverStone Health with estimates of cost increases they anticipate as a result of rebate pilot implementation. Our TPA has been unable to explain to us how they will facilitate the rebate model with our contract pharmacies providing contract pharmacy network uncertainty. The In-House Pharmacy: The Burden of IT Integration RiverStone Health operates an entity owned pharmacy and has contractual arrangements with several pharmacies in our service area. The rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use TPAs, in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. RiverStone Health currently configures our PMS so that the price we pay for 340B medications is the amount entered into the PMS to charge the patient. In order to continue providing medications to patients at the discounted estimated 340B rate after implementation of the rebate model, complex and time consuming processes to estimate how much the 340B rebate will be and manually deduct that from the price of medications will need to be implemented in order to continue to pass those savings onto patients and reconcile the discount provided to the patient with the actual 340B rebate received. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination The rebate model introduces a new complexity that threatens the existence of contractual arrangements. RiverStone Health currently partners with 12 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 13 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: The model shifts financial risk to the pharmacy, potentially causing contract partners to opt out of the 340B program entirely rather than manage the administrative headache. In Yellowstone and Carbon Counties, RiverStone Healths service area, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population already lives in a pharmacy desert. II. Patient Impact RiverStone Health has significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, manage chronic conditions prevalent in primary care settings. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. RiverStone Health is no exception to this. RiverStone Health service users rely on affordable medications to manage these long-term conditions. The impact on insulin access is also alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, insulin affordability is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. No current operational method exists to provide discounted medications in a rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price, making the price unattainable for patients and precluding CHCs from fulfilling their legal obligation to offer the required discount at the point of care. RiverStone Health invests 100% of our 340B savings into expanded services for our CHC patients. Erosion of this funding source will have significant impacts on our ability to continue to provide enhanced services such as restorative dental care, nutrition counseling, chronic disease care management, and resource navigation services. III. Financial Challenges Lack of access to upfront 340B discounts, along with increased administrative costs, will disproportionately impact CHCs and trickle down to patients. As stated above, moving to a rebate model for the qualifying medications will result in RiverStone Healths initial cash outlay going from approx. $18,000 to $1.3Million annually. With that impact to our cash flow, even minor delays in rebate reimbursements will have significant impacts on our ability to continue supporting the expanded services currently financed through 340B savings. Many CHCs are currently under financial strain, with nearly half operating with fewer than 90 days of cash on hand, and one in four reporting negative five percent operating margins. This rebate model creates significant financial challenges, including: Purchasing Drugs at the WAC Price Upfront: Under the proposed model, CHCs would be required to purchase drugs at the WAC. CHCs will have to wait to receive their rebate payment after providing medications to their patients, forcing difficult decisions about how to allocate limited financial resources, including cutting essential services and reducing operating hours. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead CHCs to exceed credit limits with wholesalers, halting their ability to order medications until payments are submitted. Sliding Fee Scale: A rebate model creates substantial uncertainty about RiverStone Healths ability to apply sliding-fee discounts at the point of sale. Historically, RiverStone Health has passed 100% of 340B savings on to uninsured patients at point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Conclusion RiverStone Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing RiverStone Health to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. Additionally, RiverStone Health would need to make significant investments in staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. RiverStone Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. RiverStone Health appreciates the opportunity to respond to this ICR on the 340B Rebate Model Pilot Program, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Jonathon Forte, CEO, at jon.for@riverstonehealth.org or Eric Owen, COO, at eric.owe@riverstonehealth.org. Sincerely, Jonathan P. Forte Chief Executive Officer City-County Health Officer
HRSA-2026-0001-1951Hospital Owned Specialty Pharmacy Alliance2026-04-20T04:00Z13,398 chars
Please accept the attached comments from the Hospital Owned Specialty Pharmacy Alliance in response to HRSAs Request for Information on the 340B Rebate Model Pilot Program. Thank you for the opportunity to provide input on this important issue. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot HHS Docket No. HRSA202603042 Dear Administrator Engels: The Hospital Owned Specialty Pharmacy (HOSP) Alliance appreciates the opportunity to respond to HRSAs request for information regarding whether HRSA should implement a rebate model under the 340B Program and, if so, how such a model should be structured. HOSP is a trade association representing health systems and hospitals that operate in-house specialty pharmacies integrated with the broader care team. Our members support patients facing serious, often time-sensitive conditions and frequently manage high-cost therapies that require intensive clinical coordination, benefits navigation, financial assistance support, and adherence services. The 340B Program is an important part of how many safety-net providers sustain that work and maintain access for eligible patients. HOSPs core view is straightforward. For more than three decades, 340B has functioned through upfront pricing at or below the ceiling price at the time of purchase. A shift to a post-purchase rebate mechanism would be a fundamental operational change that predictably introduces new barriers to timely access, adds material administrative and IT burden, and shifts working capital and payment risk onto covered entities. Those changes would be most acutely felt in precisely the settings and patient populations the program is designed to support. If HRSA nonetheless chooses to test a rebate model in a limited pilot, HOSP urges HRSA to adopt strict, enforceable guardrails that prevent the rebate mechanism from becoming a de facto condition on access to 340B pricing and that minimize operational disruption and patient risk. Summary of HOSP Recommendations 1. Do not replace the current upfront pricing structure with a rebate-based model. Maintain point-of- sale access to 340B pricing as the default operating approach. 2. If HRSA proceeds with a pilot, keep it narrowly scoped, time-limited, and truly voluntary for covered entities, with no adverse consequences for non-participation. 3. Do not allow manufacturer-specific platforms, variable data formats, or manufacturer-defined processes to govern access to 340B pricing or the adjudication of rebate requests. HRSA should set one standardized process and one set of requirements. 4. Protect covered entities from cash-flow shocks. If rebates are tested, payment must be rapid, automatic, and enforceable, with meaningful consequences for late payment and clear remedies when timelines are missed. 5. Limit denials to a small set of clearly defined circumstances. Require standardized denial codes, required documentation, and a fast, HRSA-supervised resolution pathway. 6. Treat claims-level data exchange as high-risk. Minimize required submission and ensure strong privacy, security, retention, and permitted-use limitations. HOSP understands HRSA is also seeking input on minimum data elements and is prepared to engage on that component separately. 7. Evaluate program integrity through targeted oversight and reporting rather than by restructuring the programs core pricing mechanism. HOSP Responses to HRSAs Requested Topic Areas A. Whether HRSA should implement a rebate model and interest in maintaining upfront discounts HOSP urges HRSA not to implement a rebate model. A rebate structure changes the practical allocation of risk in the program. Under an upfront discount model, the ceiling price is realized at the moment of purchase. Under a rebate model, the ceiling price is realized only after a multi-step process that depends on claims capture, data submission, manufacturer processing, and the potential for denials and disputes. Each of those steps creates delay risk and failure risk. That matters operationally and it matters for patients. When therapies are high-cost, time-sensitive, and clinically complex, even short interruptions in the acquisition and dispensing workflow can translate into delayed starts, missed doses, higher abandonment, or reduced capacity to provide supportive services. A program intended to help covered entities stretch limited resources should not be redesigned in a way that predictably expands administrative friction and introduces new uncertainty at the point where medications are being delivered to patients. A rebate model also risks creating uneven access to 340B pricing depending on a covered entitys size, liquidity, and IT maturity. A change that is workable for a well-capitalized system with sophisticated analytics may be unworkable for smaller safety-net providers that nonetheless serve a high proportion of vulnerable patients. That kind of unevenness risks widening access gaps between covered entities, even when the patients they serve look the same. B. Administrative, operational, and financial concerns HRSAs RFI appropriately asks stakeholders to describe the administrative and operational lift associated with rebate models. HOSP cannot responsibly provide a single quantitative estimate on behalf of a diverse membership without collecting and validating standardized cost data across multiple institutions. What we can provide is a clear description of the major burden categories that a rebate model necessarily introduces. A rebate model adds parallel infrastructure on top of existing 340B operations, including: claims capture and normalization across multiple pharmacy and billing systems; new data validation workflows and exception management; submission operations, tracking, reconciliation, and audit support across manufacturers; denial management and dispute resolution functions; new compliance oversight to ensure deadlines are met and submissions are consistent; and IT build, integration, cybersecurity controls, vendor contracting, and ongoing maintenance. Those requirements do not exist merely at launch. They recur with every dispense subject to the model. In other words, this is not a one-time implementation lift. It is a structural shift of work from patient-facing support and clinical coordination toward ongoing administrative processing. A rebate model also increases fragmentation risk. If different manufacturers adopt different submission requirements, timelines, file layouts, or portals, covered entities will face a patchwork of processes that becomes exponentially more difficult to manage at scale. HRSA should view this as a central design risk. Even a voluntary pilot can effectively become mandatory in practice if access to timely ceiling pricing becomes contingent on navigating a series of disparate manufacturer processes. C. Cash flow impacts and payment timing The RFI asks stakeholders to address cash-flow impacts and whether short payment windows would mitigate those impacts. HOSPs view is that payment timing is necessary but not sufficient. Even a short payment window can create meaningful cash-flow pressure when dispenses involve high-cost therapies and when the volume of affected claims is significant. More importantly, payment timing standards that are not enforceable in practice can create persistent uncertainty for covered entities. If HRSA proceeds with any rebate pilot, guardrails should include: a single, standardized HRSA-defined payment clock that starts only when a submission is complete under uniform HRSA rules; automatic payment when a manufacturer fails to act within the required window; a defined remedy for late payment, including interest or other financial consequences that make the covered entity whole; HRSA visibility into payment timeliness and denial rates in near real time, not months later; and clear limitations on incomplete submission determinations so that manufacturers cannot delay payment by repeatedly requesting additional information outside of HRSAs standard. In addition, HRSA should assess how a rebate model interacts with existing wholesaler payment terms and distribution arrangements, recognizing that a covered entity can be required to pay invoices on an established cycle even while rebate dollars remain uncertain. A model that requires covered entities to finance high-cost therapies while waiting on manufacturer adjudication shifts risk away from manufacturers and toward safety-net providers. HRSA should treat that shift as a central policy issue, not merely an operational detail. D. Rebate denials and dispute resolution A rebate model creates a new point in the process where access to the 340B price can be delayed or denied. Under the longstanding upfront purchase approach, the ceiling price is applied at the time of purchase. Under a rebate approach, manufacturers would decide after dispensing whether to approve or deny rebate requests unless HRSA tightly limits and standardizes denial criteria. If HRSA proceeds, HOSP recommends the following baseline standards: denial grounds must be limited to a short list of clearly defined, objective circumstances tied to program rules; denials must use standardized denial codes with required documentation tied to each code; manufacturers must provide a clear, specific rationale sufficient for a covered entity to cure the issue or dispute the denial; covered entities must have access to a rapid reconsideration pathway with firm timelines; and HRSA must supervise a transparent escalation pathway for recurring issues or patterns of denials, including the ability to require corrective action. In practice, even modest denial rates can become a significant operational burden when the process is claims-based and high-volume. A pilot that does not tightly govern denials will predictably devolve into ongoing disputes, delayed payments, and administrative overload. E. Approaches to gather data through required reporting HOSP recognizes that HRSA is seeking input on reporting approaches and how HRSA should evaluate a pilot. If HRSA proceeds, reporting should be designed to answer the policy questions HRSA is trying to test while minimizing the burdens and risks that come with broad claims-level data flows. At minimum, HRSA should ensure that any pilot reporting framework: is standardized and HRSA-governed, rather than manufacturer-by-manufacturer; uses consistent definitions for key metrics so comparisons are meaningful; provides HRSA enough visibility to enforce timeliness and denial guardrails; and avoids encouraging inconsistent shadow rules implemented through manufacturer platforms. HOSP is prepared to engage further with HRSA on the minimum data elements discussion, but we agree with HRSAs implicit premise that data collection should be bounded, justified, and carefully governed. F. Program integrity and other potential benefits HOSP supports strong program integrity. The question is whether a rebate model is an effective and proportionate way to advance integrity goals. In our view, a rebate model can increase integrity risk in at least three ways: It creates new opportunities for inconsistent implementation across manufacturers, which makes compliance harder and oversight less clear. It increases the complexity of transactions and data exchange, which increases the probability of error and dispute. It introduces incentives and leverage points that can be used to condition access to 340B pricing on requirements that are not part of HRSAs uniform program structure. If HRSAs objective is improved transparency and better insight into duplicate discount risk, HOSP believes HRSA should prioritize targeted, HRSA-led oversight approaches that do not restructure the programs pricing mechanism. HRSA can pursue integrity through clearer standards, standardized reporting, and enforcement tools without requiring covered entities to operate a parallel rebate adjudication system to achieve the ceiling price. Conclusion HOSP appreciates HRSAs decision to seek broad input on the operational and patient-level impacts of a rebate model. Based on the realities of how integrated health system specialty pharmacies function and how high-cost therapies are delivered to vulnerable patients, HOSP urges HRSA not to implement a rebate model for the 340B Program. If HRSA nonetheless elects to test a rebate approach, HOSP urges HRSA to adopt strict scope limits, standardized processes, enforceable payment and denial guardrails, and strong privacy and governance protections so that the pilot does not create barriers to access or shift unacceptable operational and financial risk onto covered entities. HOSP welcomes the opportunity to discuss these issues further and to provide additional operational detail from the health system owned specialty pharmacy perspective. Sincerely, Tim Affelt President Health System Owned Specialty Pharmacy Alliance
HRSA-2026-0001-1952Denver Health2026-04-20T04:00Z9,983 chars
See attached file(s) Submitted electronically to regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Denver Health and its hospital, community health centers (CHCs; also known as federally qualified health centers or FQHCs), school-based health clinics and other pediatric and primary care clinics where we serve over 280,000 patients per year, we appreciate the opportunity to comment on the above-captioned notice related to the U.S. Department of Health and Human Services (HHS) 340B Rebate Model Pilot Program. Denver Health is a comprehensive health system with nearly 9,000 employees that provides high-quality care for all people. We deliver medical care to one-third of Denvers population annually, proudly serving as the states premier safety-net hospital, and provide crucial preventative, primary and acute care services. For more than 160 years, Denver Health has been deeply rooted in the health and well-being of the community, providing high-quality clinical care, top-notch education and training for health care workers, and furthering critical research to benefit our patients. We are guided by our mission to serve our community with access to the highest quality and equitable health care regardless of ability to pay. The federal 340B program is foundational to Denver Healths ability to serve the most vulnerable of patients in the State of Colorado. In 2024, we served more than 82,000 unique patients through the 340B program, as nearly 80 percent of our patients are uninsured or underinsured. Through more than $220 million in pharmaceutical savings in 2025, Denver Health was able to ensure robust care, programs and services for our at-risk patient population. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize our safety-net health systems operations and would impact our patients ability to access life-saving medications. Based on the previous iteration of this program, just the upfront cost of these pharmaceuticals would be nearly $6 million at any given time over a two-month period for Denver Health without any promise that we would recoup these costs. And even if we do recoup that funding, our health system will be waiting 60-90 days for the refund. We also know that there will be large, additional administrative costs to be able to implement this program, and it is difficult to model that financial impact. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that Denver Healths hospital and CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Many drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in safety-net health system setting, meaning our patients will be disproportionately affected. Between our hospital and CHCs, we serve a patient population with a higher burden of chronic conditions compared to private practices and large health systems. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause Denver Healths patients to lose access to essential, life-sustaining therapies. For instance: Direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like type 2 diabetes, chronic kidney disease and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.1 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is amid an alarming mental health crisis, and starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for schizophrenia. A rebate model could create barriers for us to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat tardive dyskinesia, a 1 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure - https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 common side effect of antipsychotics. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements, with affordability of insulin being a matter of life or death. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full wholesale acquisition cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes us from fulfilling their legal obligation to offer the required discount at the point of care. Financially and Administratively Burdensome Any rebate mechanism will impose enormous costs and burdens on Denver Health that far outweigh any benefits that might come from it. The Health Resources and Services Administrations (HRSA) desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give priority to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which our safety-net health system has relied on for years, is the best way to fulfill the purpose of the 340B program. Denver Health fully expects a rebate program, which would include up to 25 high-priced pharmaceuticals that our patients rely on, to be extremely problematic for both our finances and operations. Beyond the upfront cost of these drugs, any rebate program would require us to spend significant sums on new administrative costs. We fully understand that running the 340B program at our facilities has some reasonable administrative costs, and our hiring, operations and program administration are designed around an upfront discount model. A shift to a new kind of discount mechanism demands added funds, and because Denver Health is not a part of a large hospital system, we do not have the administrative and financial bandwidth that some of our counterparts have to increase resources for new staff, software, external vendors, and changes to system interoperability, billing, record keeping and contract pharmacy arrangements. Denver Health opposes any effort by HRSA or HHS that would create further administrative barriers or burdens to the 340B program. Our health system already has effective controls in place to ensure these discounts are offered only to our patients and we avoid any duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the programs intent and the fundamental responsibility of HRSA and HHS to administer this program in the interest of eligible patients. In closing, a rebate-based model is not necessary to prevent duplicate discounts. The Front Line Hospital Alliance (FLHA) strongly supports development of an alternative pilot program that fixes problems in the 340B program, including a realistic patient definition grounded in clinical care delivery, contract pharmacies that ensure patient discount at the time of dispensing, a changed definition of child site that simplifies the process and allows transparency into payer mix, drug purchases and service to vulnerable patients, and a neutral, HRSA-administered 340B data clearinghouse as a superior alternative. As a FLHA member, we endorse their comments submitted separately which provide more details on alternative pilot program models. Again, we continue to appreciate the opportunity to provide and submit comments on this very important issue for our safety-net health system. If you have any questions, please reach out to Katie Ryan, Denver Healths Government Relations Director, at katie.ryan@dhha.org or 303-602-2734. Sincerely, Donna Lynne, Dr.PH Chief Executive Officer Denver Health
HRSA-2026-0001-1953(no commenter metadata)2026-04-20T04:00Z47,908 chars
Thank you for the opportunity to comment on the HRSA proposed 340B rebate proposal. April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of APLA Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: APLA Health anticipates a loss of $2.4M a year from entity-owned pharmacy operations and 15% loss in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. APLA Health is a federally qualified health center serving some 13,438 patients annually at eight sites in Los Angeles County, California. Our clinics provide primary, oral and behavioral health care, as well as STD and HIV testing and treatment. 70 percent of our patients are covered through Medi-Cal, the California Medicaid program. These patients live at 138 percent of the federal poverty level or below. We see 2300 patients living with HIV; another 2100 are administered Preps (pre-exposure prophylaxis). As of 2024, we administered over 16,000 STD tests. APLA Health contracts for pharmacy services with 101 contract pharmacies; we also operate one in-house pharmacy. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For APLA Health in particular, this means it will impact: 37,964 340B transactions and 13,438 patients Increase the administrative costs of our 340B program by nearly 33% The dollars we have to reinvest in clinic and community services, including but not limited to primary care staffing, dental, behavioral health, substance use disorder, housing, food bank, benefits/enrollment support. More importantly, our ability to offer services to uninsured patients on a sliding fee scale program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: APLA Health provided $1,221,324 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: APLA Health anticipates needing 3.2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, APLA Health anticipates an increase of $166,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Given APLA Healths large 340B program, we estimate we will need an additional 1.5 FTE 340B financial analyst, 0.5 FTE in-house pharmacy team member, 1.0 FTE finance accounting FTE, 0.2 FTE IT support. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For APLA Health, we estimate additional staffing costs of approximately $510,625 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Fifteen hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. APLA Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: APLA Health anticipates high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Upfront costs of $40,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 13,438 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $686,625 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. In anticipation for a possible rebate model, our in-house pharmacy has moved to a TPA coordinated virtual inventory. The additional cost of this was $50,000 per year. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. APLA Health expects to incur integration costs of $10,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 60 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. APLA Health currently partners with 101 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 101 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Los Angeles County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the 8 project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. APLA Health provides a full discount for medical, dental, mental health, and substance use disorder services to patients at or below 100% of the federal poverty. We also provide medications to patients at or below 200% of the federal poverty line at no cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, APLA Health estimates it would cost $215,522.49 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $33,444.02 to purchase these same drugs at the 340B ceiling price. This represents a 700% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, APLA Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as case management, transportation, and enrollment services. We would also need to reduce our nursing and clinical support staff. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time registered nurse or two full-time medical assistants. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,293 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. APLA Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, APLA Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $159,020. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. APLA Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $82,113 in 2027 and $638,966 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to reduce services, take out a line of credit, and use our limited reserves. This is not a sustainable solution; the interest costs alone are estimated to be nearly $100,000 annuallyfunds that are currently dedicated to case management, clinical support, enrollment staffing, and other critical positions that dont generate revenue. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, 11 where patients have no choice but to rely on APLA Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays APLA Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $33,444. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 13 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards 14 entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion APLA Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. APLA Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. APLA Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Phil Curtis at pcurtis@aplahealth.org Sincerely, 15 Craig E. Thompson Chief Executive Officer APLA Health
HRSA-2026-0001-1954The Institute for Family Health2026-04-20T04:00Z14,782 chars
Please find attached comments from the Institute for Family Health. April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Institute for Family Health and the nearly 100,000 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The Institute serves over 100,000 New York State residents annually at 27 service delivery locations in both New York City and the Mid-Hudson Valley region. We use 340B savings to cover the costs of medications as well as other unreimbursed services we provide to uninsured and underinsured individuals, and to improve our services for our entire community. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of over $1.36M in 2027 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, the Institute for Family Health strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. Page 2 of 6 A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For the Institute for Family Health, a 340B Rebate Model Pilot Program will impact: Nearly 1,400 patients who accessed 340B program medications through the Institute; Our ability to provide direct patient care, programs that strengthen the health care workforce, and cover losses for patients who utilize sliding-fee services. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Page 3 of 6 acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated variability in manufacturer requirements will force us to use multiple internal systems to manage and report data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire two new full time employees. We estimate the cost to hire additional staff to be about $190,000 annually. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An additional $300,000 in third-party administrator fees and $70,000 in auditing fees will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. The Institute for Family Health helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination and other patient support services. Page 4 of 6 The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. Page 5 of 6 A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid potential service reductions. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion The Institute for Family Health strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing this model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable health care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact me at 212-633-0800 x1246. Sincerely, Dr. Eric Gayle, MD President & CEO
HRSA-2026-0001-1955Dignity Health California Hospital Medical Center2026-04-20T04:00Z6,628 chars
ISSUE: 340B Rebate Model Program - Oppose 2 Dignity Health ki California Hospital Medical Center April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Dignity Health California Hospital Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Located in downtown Los Angeles, we are a faith-based, safety-net teaching hospital committed to providing high-quality care to our community, with a focus on those most vulnerable and underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Dignity Health California Hospital Medical Center that far outweigh any benefits that might come from it, Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 3408 hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Dignity Health California Hospital Medical Center relies upon the 3408 drug discount program to reduce our outpatient pharmaceutical costs, enabling disciplined reinvestment into patient care and core operations. As a safety-net hospital, we serve a high proportion of low-income, uninsured, and underinsured patients. HI-IS Docket No. HRSA-2026-03042 Apr; 20, 2O26 The 340B program enables us to offset rising costs while maintaining essential services that would otherwise be difficult to sustain. ln a high-cost environment, these savings are essential to maintaining financial sustainability and ensuring continued access to care. These reinvestments support care coordination for high-need patients, access to language services to ensure safe and effective communication during care, and stronger discharge processes that reduce avoidable utilization and improve continuity of care. Preserving these resources is critical to maintaining operational stability and ensuring continued access to care for the communities we serve. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing nonprofit safety-net hospitals to divert resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, dup!icating some to dual-track the drugs that get a back-end rebate, arid hire additional staff to ensure compliance and reporting. This will create significant additional cost without commensurate increase in value. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. HHS Docket No. HRSA-2026-03042 April 20, 2026 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brian Smolskis Hospital President and CEO Dignity Health California Hospital Medical Center Los Angeles, CA As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at cornrnonspiritorg.
HRSA-2026-0001-1956(no commenter metadata)2026-04-20T04:00Z40,959 chars
See attached file(s) 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4910 * FAX (252) 636-4970 April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Craven County Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Craven County Community Health Center anticipates a loss of $102,000 from entity-owned pharmacy operations and 100% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation forcing us to cancel contracts due to inadequate personnel to manage the added administrative burdens being placed upon our entity. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Our small rural health center estimates that CCCHC will incur roughly $602k in additional annual upfront drug costs and over 400 hours dedicated to maintaining compliance annually. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For CCCHC in particular, this means it will impact: Over 2000 patients that utilize our CHC Pharmacy program Adding $40,000 in admin costs for your 340B program Restrict access to Hepatitis C, HIV and other critical drugs that limit community spread of communicable diseases We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 Sliding Fee Discount: CCCHC provided $246,174 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CCCHC anticipates needing 0.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CCCHC anticipates an increase of $25,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Our small CHC will need to divert an estimated 0.25 FTEs of Pharmacist time away from patient directed care to manage this burden. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For our small entity, we do not have funds to hire additional staff, which is why we must reduce direct patient contact time to manage this burden. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Roughly 5 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CCCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,500 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $15,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in- house pharmacy systems will require costly customization to provide real- time, accurate information at the pharmacy counter. These are not options for CCCHC so our only option is the ongoing resource diversion because we simply cannot afford to implement a software system that integrates with our EHR. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 5 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per- claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in our 2,500 patients in our 3-county area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. We do this by providing all patients below 200% FPL access to a sliding scale price on already deeply discounted pricing, allowing them access, and by providing additional financial assistance programs on a case-by-case basis analyzed by need. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost$334,473 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends$51,809 to purchase these same drugs at the 340B ceiling price. This represents a >600% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CRAVEN COUNTY COMMUNITY HEALTH CENTER anticipates needing to reduce: Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 783 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CCCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $92,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. CCCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by nearly $30,000 and increasing to over $50,000 with implementation of new items in upcoming years. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. a. Financial Impact of Rebate Denials and Delays CCCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 2818 NEUSE BOULEVARD * P.O. DRAWER 12610 * NEW BERN * NORTH CAROLINA * 28562 PHONE (252) 636-4920 * FAX (252) 636-4970 Conclusion Craven County Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CCCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CCCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Zachary Orman, PharmD, RPh at Zachary.orman@cravencountync.gov Sincerely, Zachary Orman, PharmD, RPh Pharmacy Director Craven County Health Department 2818 Neuse Blvd.; New Bern, NC 28561 Phone: 252-636-4920 Fax: 252-636-4970
HRSA-2026-0001-1957Mark Stewart · Philadelphia, PA, United States2026-04-20T04:00Z5,169 chars
Community Health Centers operate within narrow financial margins while serving patients with the highest levels of clinical and social complexity. The proposed 340B Rebate Model Pilot introduces a structural shift that requires upfront purchasing at Wholesale Acquisition Cost and delayed reimbursement through rebates, creating immediate cash flow constraints and financial uncertainty. This model places disproportionate risk on safety net providers and threatens the stability required to sustain essential services, staffing, and access to care. From a patient care perspective, the rebate model undermines the ability to provide affordable medications at the point of service. Many patients rely on predictable, reduced cost access to manage chronic conditions such as diabetes, cardiovascular disease, and behavioral health needs. Introducing variability in pricing and delays in access increases the risk of nonadherence, treatment disruption, and avoidable complications. For medically underserved populations, even short term barriers to medication access can result in significant downstream health impacts. Operationally, the model introduces new administrative and technical requirements that divert limited resources away from direct patient care. Increased staffing needs, system modifications, and ongoing reconciliation processes add cost without improving care delivery. Community Health Centers already maintain strong compliance infrastructure and accountability mechanisms. Any new model should reduce burden and support access, not introduce additional complexity and risk. For these reasons, the proposed approach warrants reconsideration to avoid unintended consequences for patients and providers. Community Health Centers operate within narrow financial margins while serving patients with the highest levels of clinical and social complexity. The proposed 340B Rebate Model Pilot introduces a structural shift that requires upfront purchasing at Wholesale Acquisition Cost and delayed reimbursement through rebates, creating immediate cash flow constraints and financial uncertainty. This model places disproportionate risk on safety net providers and threatens the stability required to sustain essential services, staffing, and access to care. From a patient care perspective, the rebate model undermines the ability to provide affordable medications at the point of service. Many patients rely on predictable, reduced cost access to manage chronic conditions such as diabetes, cardiovascular disease, and behavioral health needs. Introducing variability in pricing and delays in access increases the risk of nonadherence, treatment disruption, and avoidable complications. For medically underserved populations, even short term barriers to medication access can result in significant downstream health impacts. Operationally, the model introduces new administrative and technical requirements that divert limited resources away from direct patient care. Increased staffing needs, system modifications, and ongoing reconciliation processes add cost without improving care delivery. Community Health Centers already maintain strong compliance infrastructure and accountability mechanisms. Any new model should reduce burden and support access, not introduce additional complexity and risk. For these reasons, the proposed approach warrants reconsideration to avoid unintended consequences for patients and providers. Community Health Centers operate within narrow financial margins while serving patients with the highest levels of clinical and social complexity. The proposed 340B Rebate Model Pilot introduces a structural shift that requires upfront purchasing at Wholesale Acquisition Cost and delayed reimbursement through rebates, creating immediate cash flow constraints and financial uncertainty. This model places disproportionate risk on safety net providers and threatens the stability required to sustain essential services, staffing, and access to care. From a patient care perspective, the rebate model undermines the ability to provide affordable medications at the point of service. Many patients rely on predictable, reduced cost access to manage chronic conditions such as diabetes, cardiovascular disease, and behavioral health needs. Introducing variability in pricing and delays in access increases the risk of nonadherence, treatment disruption, and avoidable complications. For medically underserved populations, even short term barriers to medication access can result in significant downstream health impacts. Operationally, the model introduces new administrative and technical requirements that divert limited resources away from direct patient care. Increased staffing needs, system modifications, and ongoing reconciliation processes add cost without improving care delivery. Community Health Centers already maintain strong compliance infrastructure and accountability mechanisms. Any new model should reduce burden and support access, not introduce additional complexity and risk. For these reasons, the proposed approach warrants reconsideration to avoid unintended consequences for patients and providers.
HRSA-2026-0001-1958Charles R Vargo · Pittsburgh, PA, United States2026-04-20T04:00Z659 chars
As a board member and community volunteer with Cornerstone Care, I urge HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. The proposed model shifts effective control of 340B savings from HRSA to drug manufacturers by allowing them to determine rebate eligibility, timelines, and denials, undermining the intent of the 340B statute to protect safety net providers. In addition, 340B savings support non-revenue generating services such as mobile units, care coordination, behavioral health, and workforce programs. Redirecting these savings to cover rebate financing costs would force reductions in critical community services.
HRSA-2026-0001-1959LGBT Life Center2026-04-20T04:00Z4,798 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: LGBT Life Center Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: LGBT Life Center appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. We are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. The proposed 340B Rebate Model presents significant financial and operational risks for safety-net providers. Requiring covered entities to purchase medications upfront at Wholesale Acquisition Cost (WAC) and await reimbursement would create immediate cash flow challenges, potentially limiting the ability to consistently procure essential medications. For organizations already operating with constrained resources, this shift could destabilize day-to-day operations. Loss or delay of 340B savings would directly impact the ability to sustain critical wraparound services that support patient care, including copay assistance, transportation, food access, and other enabling services. These programs are essential to ensuring patients can access and adhere to treatment, and reductions in these services would likely lead to decreased medication adherence, poorer health outcomes, and increased disparities. The model also introduces broader public health concerns. Interruptions in access to affordable medications for individuals living with HIV and those at risk of sexually transmitted infections could increase transmission rates and reverse progress made in prevention and treatment efforts. Additionally, these impacts would place further strain on local healthcare systems. Overall, while the intent of the rebate model may be to improve oversight or access, it does not align with the operational realities of safety-net providers and risks undermining the very populations the 340B program is designed to support. LGBT Life Center is a Ryan White and STD-funded safety-net provider serving individuals living with HIV and those at risk of or affected by sexually transmitted infections. As a qualifying covered entity under the 340B Drug Pricing Program, the organization leverages 340B savings to expand access to care beyond clinical services, including medication affordability programs, prevention services, and essential support such as transportation and food assistance. These savings are reinvested directly into patient care and public health initiatives, making the 340B program a critical component of sustaining comprehensive, equitable healthcare services for a vulnerable population. 2 Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Administrative Burden for Covered Entities with Subgrantees Some RWCs are also federally qualified health centers (FQHCs) and participate in 340B as FQHCs. The administrative burden of a Rebate Model Pilot would be even worse for RWCs that are enrolled in 340B as FQHCs and have subgrantees. HRSA currently assigns an FQHC and its subgrantees the same 340B ID, forcing the FQHC and its subgrantees to act as one entity when uploading data to manufacturer platforms. If HRSA advanced its Rebate Model Pilot, FQHCs and their subgrantees would face an onerous process to discern which purchases, dispenses, and rebate payments belong to which 340B ID holder. * * * We appreciate HRSAs consideration of our comments. For further information, please contact For further information, please feel free to contact me at creybrouck@lgbtlifecenter.org or at 757-640- 0929. Sincerely, Christopher Reybrouck Senior Director, Strategy & Operations LGBT Life Center
HRSA-2026-0001-1960Biogen2026-04-20T04:00Z13,895 chars
See attached file(s) 1 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Mail Stop 10W29 Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot program (HRSA-2026-03042) Submitted Electronically Dear Mr. Engels: Biogen appreciates the opportunity to respond to HRSAs Request for Information (RFI)1 regarding the 340B Rebate Model Pilot Program. Biogen is a leading global biotechnology company that has pioneered multiple breakthrough innovations since its founding in 1978, addressing some of the greatest challenges in medicine. We apply deep understanding of human biology and leverage different modalities to advance first-in-class treatments or therapies that deliver superior outcomes for patients with: Alzheimers Disease, post-partum depression, rare diseases and disorders, like spinal muscular atrophy and Friedreichs Ataxia, as well as a pipeline of novel therapies in neurology and specialized immunology. While we recognize the critical need to maintain a careful balance: ensuring that the 340B Program continues to offer meaningful support to safety-net providers and the vulnerable populations they serve, there remains a pressing need for reliable mechanisms to quickly and efficiently confirm that discounts are genuinely used by covered entities (CEs) to directly benefit those individuals, to address ongoing program integrity concerns, and to avoid duplication of discounts across programs. Biogen is encouraged by the Health Resources and Services Administrations (HRSA) commitment to the implementation of a 340B Rebate Model Pilot Program. This initiative marks a significant advancement in addressing persistent operational and compliance challenges within the 340B Program, particularly by seeking to increase transparency and enhance the programs overall integrity. We commend HRSA for its proactive approach, as 1 91 Fed. Reg. 7,287 (February 17, 2026) available here. 2 well as its dedication to engaging all stakeholders throughout the development of this pilot program. We strongly urge HRSA to consider broadening the scope of the Rebate Model Pilot to include all covered outpatient drugs, rather than limiting this pilot to drugs with a Maximum Fair Price, as initially proposed in the first iteration of the Pilot Program.2 Expanding the Pilots scope would facilitate more comprehensive data collection and enable a robust evaluation of the models effectiveness across a wide range of therapeutic areas. Such inclusivity would ensure equitable treatment for all CEs and manufacturers, thereby maximizing the potential benefits of the pilot and providing a stronger evidentiary foundation for any future programmatic changes. Despite previous efforts to address the issue, duplicate discounts continue to pose considerable challenges for public payers, including Medicaid.3 The Rebate Model provides an efficient, private market solution to the number of flaws present in the current pay and chase 340B system. The absence of effective mechanisms for identifying and preventing duplicate discounts undermines the integrity of the 340B Program and imposes an undue financial burden on manufacturers. We believe that a streamlined and transparent rebate model available to all 340B-eligible drugs could offer a more effective approach to resolving this persistent issue. A rebate is the best and most efficient way to ensure statutory requirements related to 340B nonduplication are met. Any effective Pilot Program would ensure nonduplication requirements apply beyond drugs selected for initial price applicability year 2026, as the initial iteration of the Rebate Pilot considered, and to prevent duplicate discounts in the Medicaid program as well as the Medicare Part B and D inflation penalty programs. Presently, manufacturers struggle to obtain clear, timely, and reliable 340B data to effectively monitor duplicate discounts, often having to rely on disparate data sources and advanced analytical systems just to determine whether a single claim is 340B eligible. Traditional manufacturer data sources (e.g., chargebacks) offer only retrospective views into 340B activity and lack the necessary context to ascertain where discounts are applied and whether they are appropriate. To ensure nonduplication, manufacturers are investing heavily in third party data systems to track 340B claims and prevent duplicate discounts. Simultaneously, manufacturers are increasingly depending on advanced analytics platforms to sift through vast amounts of disparate data, including payer submission files, Medicaid exclusion files, prescriber data, and pharmacy licensing data, to ensure nonduplication. This complexity reflects a landscape where no single data source is sufficient, and multiple third- party services, risk assessments, or reconciliation workflows are required simply to determine whether a claim is 340B eligible. 2 90 Fed. Reg. 36,163 (Aug. 1, 2025) (corrected 90 Fed. Reg. 38,165) available here. 3 See Office of Inspector General, U.S. Dept of Health & Human Servs., Report NO. OEI-05-14-00430, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (2016). 3 Although manufacturers have invested in certain data systems that provide limited and/or incomplete data to help us attempt to identify potential duplicate discounts in Medicaid (an issue a rebate model would negate), effectively resolving duplicate discount issues depends on robust coordination among states, CEs, and often third-party agents. In practice, however, both states and CEs frequently defer responsibility to one another, resulting in unresolved disputes and often endless back-and-forth. In one instance, for example, Biogen engaged in good faith with an academic medical center for three years to resolve a duplicate discount dispute. The academic medical center claimed not to understand the distinction between whether a claim was billed under the medical budget or the pharmacy budget, and instead deferred responsibility to Medicaid. In yet another instance, an academic medical center initially filed multiple claims under Medicaid with the proper claims modifiers to identify the 340B claims, only to reverse and refile the claims without the modifiers, seeking the higher reimbursement. Only after going back and forth between the CE and the state Medicaid program for two years, was a resolution reached. This pervasive lack of clear accountability impedes efficient program administration and exacerbates compliance challenges for all stakeholders.4 In the Medicare inflationary rebate programs (as well as the Medicaid and commercial insurance markets), the current methods used to exclude 340B units from calculations rely on CEs to accurately use claims modifiers. There is not, however, any clear mechanism for CMS or HRSA to enforce that requirement. Furthermore, manufacturers are limited in their ability to address this type of noncompliance. Perhaps of more concern is that CMS has yet to implement an accurate method to identify and exclude units from the Part D inflation rebate calculations under the Part D inflationary program. Instead, in the 2026 Medicare Physician Fee Schedule Final Rule, CMS adopted a claims-based estimation approach, which, by its own admission, is inexact. A 340B rebate would provide a precise way for CMS to exclude 340B units from both the Part B and Part D inflation rebate calculations. Furthermore, when manufacturers assert their legal rights to address program integrity concerns by restricting the use of contract pharmacies, CEs create questionable workarounds that continue to exacerbate duplicate discounts. Specifically, CEs appear to have implemented alternative distribution models, where 340B replenishment inventory is first delivered to a provider-owned pharmacy, then transferred to contract pharmacies for dispensing, bypassing legal contract pharmacy restrictions and maximizing profits for the CE. These questionable workarounds raise questions of potential diversion under the 340B Program and pose considerable challenges to manufacturers in identifying and attempting to resolve duplicate discounts. Today, HRSA oversees the program through its own 340B audits, but that tool is not adequate for a program as large and complex as 340B. Currently, HRSA audits less than 4 See Office of Inspector General, U.S. Dept of Health & Human Servs., Report No. OEI-05-21-00030, State and Covered Entity Roles in Preventing Duplicate Discounts (2024). 4 one percent of CEs, and roughly 70 percent of those HRSA audits return adverse findings.5 While manufacturers can also audit CEs when violations of the 340B statute are suspected or detected, the audit processes are slow, burdensome, and costly. Additionally, current administrative dispute resolution mechanisms are inadequate to address the complexity and volume of issues that arise under the 340B Program. The procedural limitations and resource constraints inherent in these mechanisms often lead to protracted timelines and incomplete resolutions, leaving critical concerns unresolved.6 Based on our experience, Biogen believes the 340B rebate model is the only viable and scalable solution to these longstanding challenges. By centralizing rebate processing and utilizing existing infrastructure, administrative burdens for all parties would be reduced, program transparency would be enhanced, and compliance would be promoted. This would strengthen the programs ability to serve safety-net providers and the vulnerable populations they support.7 As HRSA formalizes a 340B Rebate Model, there is now an opportunity to create a single data source for accurate accounting of 340B claims. To that end, Biogen recommends that at minimum, the data elements listed in Appendix A be included in any 340B Rebate Model. These elements will provide clarity for both medical and pharmacy claims and ensure an efficient process for timely rebate issuance. Thank you again for the opportunity to comment on this important initiative. Biogen stands ready to support and implement the Pilot Program, and we look forward to continued collaboration with HRSA and other stakeholders to ensure the success of the 340B Program for providers and the patients they serve. * * * If you have any questions regarding our comments, or if we can provide additional information to assist in consideration of our comments, please contact Ali Lakhani, Head of U.S. Public Policy at ali.lakhani@biogen.com. Thank you, Ali Lakhani Head of Public Policy Biogen, Inc. 5 Government Accountability Office, Drug Pricing Program HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements (December 2020). 6 See 42 C.F.R. 10.20; Govt Accountability Office, GAO-23-456, 340B Program: Dispute Resolution Challenges (2023). 7 See PhRMA, White Paper: Centralized Rebate Models in Medicaid and 340B (2025). 5 6 Appendix A: Data elements needed to accurately implement a 340B Rebate Model Field Data Type Description Contracted Entity ID Alpha numeric ID that may contain dashes-- starts with 2 or 3 letters The 340B ID of the covered entity where the prescription originated. Date of Service Standard Date Formats The date the patient filled their prescription. Date Prescribed Standard Date Formats The date the prescriber wrote the prescription. NDC Numeric, 11 digits, may contain up to 4 leading zeros The 11-digit National Drug Code which indicates the manufacturer, product, and commercial package size. Prescriber ID Numeric, 10 digits, never starts with a leading zero The unique public ID for the prescribing physician. Accepted IDs include the NPI and DEA ID. Prescriber ID Qualifier Numeric Indicates the type of unique ID provided (e.g., A value of "01" indicates NPI, "12" indicates DEA. Quantity Numeric The number of units in the prescription. Rx Number Numeric, may contain leading zeros The native (unmodified) prescription number for the prescription as generated by the pharmacy. Service Provider ID Numeric, 10 digits, never starts with a leading zero The unique public ID for the dispensing pharmacy. Accepted IDs include the NPI, DEA, NCPDP, and Medicaid ID. Service Provider ID Qualifier Numeric The type of unique ID provider (e.g., "01" for NPI, "05" for Medicaid, "07" for NCPDP, and "12" for DEA). Wholesaler Invoice Number Numeric The invoice number assigned by the wholesaler for the order made by the 340B covered entity. If the claim relates to multiple wholesaler invoices, all invoice numbers should be reported. Payer BIN Alpha numeric, may contain leading zeros The bank identification number of the primary payer on the prescription. 7 Payer PCN Alpha numeric, may contain leading zeros Processor Control Number. Identifier used to determine which processor will handle a prescription drug claim. Ship to Date Standard Date Formats Date when the drug was shipped to the Ship To location. Ship to Location Numeric NPI, DEA, or NCPDP of the pharmacy where the drug was physically shipped. 340B Account Number Alpha numeric Account number assigned by the wholesaler and used for the purchase. Product Serialization Number Numeric Unique ID assigned to the package shipped from the manufacturer to the wholesaler. Fill Number Numeric Indicates the number of times the prescription has been filled as of the current fill. For example, a value of 2 indicates that the prescription has been filled twice and the current fill is the second one.
HRSA-2026-0001-1961Cempa Community Care2026-04-20T04:00Z22,209 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Cempa Community Care Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Cempa Community Care appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. The proposed 340B rebate model introduces significant financial, operational, and patient access risks that are not resolved by prompt pay assurances. Requiring covered entities to purchase drugs at full cost and await rebates shifts working capital burden to safety-net providers, creating ongoing cash flow exposure and financial volatility. The model also imposes substantial new administrative requirements, including claim-level tracking, reconciliation across manufacturers, denial management, and new IT infrastructure, all of which divert limited resources away from patient care. For Ryan White and HIV providers, these changes threaten the stability of programs that rely on 340B savings to fund comprehensive, integrated care. Disruptions to contract pharmacy arrangements and increased operational complexity risk limiting medication access, delaying treatment, and undermining adherence and viral suppression outcomes. Additionally, the rebate model does not address root causes of program integrity concerns, such as payer-side data limitations, and instead adds duplicative reporting burdens to entities that are already among the most highly regulated in healthcare. Critically, weakening the current 340B structure will not eliminate program value but will redirect it away from mission-driven providers to intermediaries, including pharmacy benefit managers, that have no statutory obligation to serve vulnerable populations. The cumulative effect is reduced access, increased administrative cost, and misalignment with the programs intent. Cempa Community Care is a federally qualified health center look-alike and Ryan Whitefunded provider delivering comprehensive, integrated care to medically underserved populations, including individuals living with HIV. As a 340B covered entity, Cempa operates under extensive federal oversight, including HRSA program requirements tied to its Scope of Project, Uniform Data System reporting, and independent financial audits under Uniform Guidance (45 CFR Part 75). The organization maintains strict compliance with all 340B requirements, including prevention of diversion and duplicate discounts. 340B savings are essential to Cempas care model and are reinvested directly into patient services. These 2 funds support access to affordable medications, same-day treatment initiation, integrated behavioral health, case management, transportation assistance, and other wraparound services that improve health outcomes and reduce barriers to care. Cempa serves a high-need patient population, many of whom rely on these services as their primary access point to care. The organizations use of 340B resources is tightly aligned with its mission to expand access, improve outcomes, and sustain comprehensive care for vulnerable communities. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. 340B savings are integral to sustaining the comprehensive HIV care model, including: * Rapid linkage to care and same-day treatment starts * Integrated behavioral health and case management * Medication adherence programs 3 and wraparound services Under a rebate model, reduced predictability and increased administrative costs will force difficult tradeoffs. Resources currently funding these services would be partially redirected to finance inventory and manage rebate administration. The net effect is fewer services for a medically vulnerable population with complex needs. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. Under the current 340B upfront discount model, our organization purchases drugs at reduced cost, allowing alignment between acquisition cost and reimbursement timing. A rebate model would require purchasing at full WAC and waiting for post-dispense rebate reconciliation. Even with prompt pay, this creates a material cash flow gap requiring us to front significantly higher monthly drug spend. The cumulative exposure across high-cost medications, particularly in HIV care, would require increased working capital and/or lines of credit, introducing financing costs and liquidity risk. Any delays, disputes, or denials in rebate processing would further extend this exposure and create volatility in cash flow that does not exist today. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Our current wholesaler agreements typically operate on net terms (generally in the range of 1530 days), with consistent and predictable invoicing cycles. These terms allow for alignment with payer reimbursement timing and 340B purchasing, enabling stable cash management. Payment expectations are clear, and the financial obligation reflects already-discounted 340B pricing. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We currently have access to prompt pay discounts through wholesalers, typically tied to accelerated payment (e.g., early payment within a defined window). These incentives reduce overall acquisition cost and are factored into our purchasing strategy. Participation in these 4 programs requires reliable and predictable cash flow, which would be disrupted under a rebate model that increases upfront cost and delays recovery of funds. State the average number of calendar days within which your organization typically remits payment under these contracts. We currently have access to prompt pay discounts through wholesalers, typically tied to accelerated payment (e.g., early payment within a defined window). These incentives reduce overall acquisition cost and are factored into our purchasing strategy. Participation in these programs requires reliable and predictable cash flow, which would be disrupted under a rebate model that increases upfront cost and delays recovery of funds. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. A rebate-based model would fundamentally misalign payment timing. We would be required to pay wholesalers at full WAC within standard terms (1530 days), while rebate recovery would occur later and be contingent on claim submission, validation, and manufacturer processing. Even under an expedited timeline, this introduces a lag between cash outflow and reimbursement, with variability tied to administrative processing, data discrepancies, and dispute resolution. The result is a persistent and potentially growing cash flow gap, increased administrative burden to track and reconcile payments, and heightened financial risk compared to the current model. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and managements costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. Implementation of a rebate model would introduce both significant one-time and ongoing costs. One-time costs include IT system upgrades or new platform acquisition to enable claim-level tracking, rebate submission, and reconciliation; integration with wholesalers, TPAs, and manufacturer systems; and staff training. These costs are expected to be substantial given the 5 need for real-time or near-real-time data capture and audit readiness. Ongoing costs include additional staffing, third-party administrator fees, expanded audit and compliance functions, legal and consulting support, and increased finance and pharmacy operational workload. There will also be indirect costs associated with managing cash flow (e.g., interest expense or opportunity cost of capital). These represent a permanent increase in administrative overhead that does not exist under the current model. Describe the methodology and assumptions used for the estimates in the preceding question. Estimates are based on current pharmacy program size, prescription volume, number of contract pharmacy arrangements, and existing administrative staffing levels. Assumptions include the need for claim-level adjudication across multiple manufacturers, increased reconciliation cycles, and higher denial/dispute rates requiring manual intervention. Cost projections reflect both internal resource requirements and anticipated reliance on external vendors (e.g., TPAs, IT platforms). Estimates also assume no simplification in data exchange standards and continued variability across manufacturer requirements. Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. Costs reflect the need to support: * Claim-level data capture, validation, and submission for rebates * Reconciliation of rebates against dispensed claims and wholesaler invoices * Denial management, appeals, and dispute resolution * Ongoing compliance monitoring and audit preparation * Contract pharmacy coordination and oversight under increased complexity * Financial tracking of rebate receivables and cash exposure * IT system implementation, maintenance, and integration These activities represent a significant expansion beyond current administrative functions Comment on the impact of these incremental costs under your current operations. The incremental administrative burden would materially disrupt current operations. Existing pharmacy, finance, and compliance teams would be required to shift focus from patient-centered activities to administrative processing. Workflow complexity would increase across all pharmacy channels, particularly contract pharmacy arrangements. The added burden would reduce operational efficiency, slow decision-making, and increase the risk of errors or compliance issues. Over time, these pressures would force tradeoffs 6 between administrative compliance and patient service delivery. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. Implementation would require both additional FTEs and reallocation of existing staff. Current staff do not have excess capacity to absorb the increased workload associated with rebate tracking, reconciliation, and dispute management. Without additional resources, there would be a direct negative impact on patient-facing services and program oversight. If yes to the above, identify the anticipated number of additional FTEs. We estimate a need for approximately 24 additional FTEs depending on final model complexity and claim volume. This includes roles in pharmacy operations, finance/revenue cycle, and compliance. Additional temporary or consulting support may also be required during initial implementation. Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. New and expanded roles would include: * Pharmacy program staff dedicated to rebate submission, tracking, and contract pharmacy coordination * Finance/revenue cycle personnel responsible for reconciliation of rebates, cash flow tracking, and variance analysis * Compliance and audit staff focused on monitoring adherence, preparing for audits, and managing documentation * IT/data support to maintain system integrations and ensure data accuracy These roles would be permanent given the ongoing nature of rebate administration and would represent a structural increase in non- clinical staffing requirements. Administrative Burden for Covered Entities with Subgrantees Some RWCs are also federally qualified health centers (FQHCs) and participate in 340B as FQHCs. The administrative burden of a Rebate Model Pilot would be even worse for RWCs that are enrolled in 340B as FQHCs and have subgrantees. HRSA currently assigns an FQHC and its subgrantees the same 340B ID, forcing the FQHC and its subgrantees to act as one entity when uploading data to manufacturer platforms. If HRSA advanced its Rebate Model Pilot, FQHCs and their subgrantees would face an onerous process to discern which purchases, dispenses, and rebate payments belong to which 340B ID holder. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders covered entities, contract pharmacies, manufacturers, and the government by 7 providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. In our experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems and challenges, which is why we need a neutral clearinghouse run by the federal government or a contractor. Our organization has encountered significant challenges with submitting 340B claims data under current manufacturer-driven deduplication processes. First, submission requirements are fragmented and inconsistent across manufacturers. Each manufacturer requires different data elements, file formats, submission portals, and timelines. This lack of standardization forces us to maintain multiple parallel workflows, increasing administrative burden, risk of error, and operational inefficiency. Second, we often do not have complete or timely access to all required claims-level data, particularly where PBMs and contract pharmacies are involved. This creates gaps between what manufacturers require and what covered entities can reliably validate. As a result, submissions may be delayed, disputed, or rejected based on data outside of our control. Third, there is limited transparency in how manufacturers validate submissions and determine eligibility. Denials and discrepancies are common, but there is no uniform or predictable process for reconciliation or appeal. This introduces financial uncertainty and requires significant staff time to manage ongoing disputes. Fourth, contract pharmacy restrictions further complicate data submission by fragmenting dispensing channels and limiting access to complete transaction data. This increases the likelihood of mismatches and incomplete submissions, while also reducing patient access points. A neutral clearinghouse would significantly improve this process by establishing a single, standardized framework for data submission, validation, and adjudication across all manufacturers. It would reduce duplicative administrative burden, improve data consistency, and create a transparent and uniform reconciliation process. Importantly, a centralized clearinghouse would also provide the federal government with consistent, comprehensive data across the program, strengthening oversight and accountability without placing disproportionate burden on covered entities. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Shannon Burger, Chief Executive Officer, 423-648-9911. Sincerely, Shannon Burger, DSc, MBA, CPA Chief Executive Officer Cempa Community Care
HRSA-2026-0001-1962Grace Aftandilov · Philadelphia, PA, United States2026-04-20T04:00Z1,721 chars
Community Health Centers operate within narrow financial margins while serving patients with the highest levels of clinical and social complexity. The proposed 340B Rebate Model Pilot introduces a structural shift that requires upfront purchasing at Wholesale Acquisition Cost and delayed reimbursement through rebates, creating immediate cash flow constraints and financial uncertainty. This model places disproportionate risk on safety net providers and threatens the stability required to sustain essential services, staffing, and access to care. From a patient care perspective, the rebate model undermines the ability to provide affordable medications at the point of service. Many patients rely on predictable, reduced cost access to manage chronic conditions such as diabetes, cardiovascular disease, and behavioral health needs. Introducing variability in pricing and delays in access increases the risk of nonadherence, treatment disruption, and avoidable complications. For medically underserved populations, even short term barriers to medication access can result in significant downstream health impacts. Operationally, the model introduces new administrative and technical requirements that divert limited resources away from direct patient care. Increased staffing needs, system modifications, and ongoing reconciliation processes add cost without improving care delivery. Community Health Centers already maintain strong compliance infrastructure and accountability mechanisms. Any new model should reduce burden and support access, not introduce additional complexity and risk. For these reasons, the proposed approach warrants reconsideration to avoid unintended consequences for patients and providers.
HRSA-2026-0001-1963Michael Lin · Louisville, KY, United States2026-04-20T04:00Z3,164 chars
April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration RE: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: A rebate model will cripple and very likely mean the death of the Safety Net. On behalf of Family Health Centers, Inc. (FHC) and the more than 39,000 patients we serve in Louisville, thank you for the opportunity to comment on HRSAs proposed 340B rebate model. FHC is a Federally Qualified Health Center providing comprehensive primary care, behavioral health, dental, and pharmacy services to a medically underserved population. In 2025, 88% of our patients lived in poverty, 26% were uninsured, and 10% were experiencing homelessness. More than 40% prefer care in a language other than English. 340B savings are essential to patient care. FHC reinvests 100% of 340B savings into patient services. Over the past five years, this has supported more than $31 million in charitable care and critical services such as care coordination, health education, behavioral health, interpretation, and access to affordable medications. In 2025, 340B savings accounted for 57% of our total revenue. A rebate model would create unsustainable financial and administrative burdens. Under a rebate model, FHC would be required to purchase medications at full Wholesale Acquisition Cost (WAC) and wait for reimbursement. For just a subset of drugs, our costs would increase from $126,000 to $5.6 million annuallya 44-fold increase. Even with a proposed 10-day rebate timeline, health centers must still front these costs, often requiring borrowing. The administrative burden would also be significant. Tracking claims, submitting rebate requests, and managing denials would require substantial new systems and staffingdiverting limited resources away from patient care. Patients will be harmed. Reduced 340B savings will force health centers to scale back services and limit access to affordable medications. Many providers and pharmacies have already stopped dispensing certain drugs due to these financial risks. For patients, this means higher out-of-pocket costs, delays in treatment, reduced adherence, and increased risk of complications and hospitalizations. Uninsured patients will be especially impacted. FHC currently passes 340B savings directly to patients through a cost-plus pricing model. A rebate system would make this approach financially unsustainable. HRSA should pursue a better path. We strongly urge HRSA to: Not implement a mandatory rebate model on CHCs. Pursue a neutral claims clearinghouse (not one that is funded by Pharma) to address duplicate discounts without disrupting the 340B program. Exempt community health centers if a rebate model moves forward. A rebate model shifts financial risk from manufacturers to safety-net providers and ultimately to patients. There are more effective, less burdensome ways to achieve HRSAs goals without undermining access to care. Thank you for your consideration and continued support of the nations health care safety net. Sincerely, Dr. Michael T Lin PharmD Chief Pharmacy Officer Family Health Centers, Inc.
HRSA-2026-0001-1964Western North Carolina Community Health Services, Inc.2026-04-20T04:00Z85,711 chars
Please see the attached comments document for Western North Carolina Community Health Services, Inc. regarding the 340B Rebate Model Pilot Program. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Western North Carolina Community Health Services, Inc. (WNCCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: WNCCHS anticipates a loss of $4,032,943 from entity-owned pharmacy operations and $37,500 reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For WNCCHS in particular, this means it will impact: Our in-house pharmacies filled more than 79,000 prescriptions in the last 12 months, and our CHC served over 14,000 unique patients. Our current admin costs for our 340B program exceed $200,000 annually. We use our 340B revenue to help cover payroll expenses across our staff, operate dental services, prenatal/OB services, care management, services, urgent care services that avoid unnecessary hospitalizations, services for our homeless patient population, and discounted prescriptions services that otherwise we could not provide. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: WNCCHS provided $3,081,612 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: WNCCHS anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, WNCCHS anticipates an increase of $65,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. WNCCHS expects to hire 1.0 additional FTE for these purposes. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Expected increased cost to hire 1.0 FTE for these purposes exceed $50,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We expect to spend at least 10 hours a week to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. WNCCHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $70,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. WNCCHS utilizes DRX software which will need to be fully integrated with our EMR. Currently, many activities in DRX still need to be monitored manually to ensure 340B rebate compliance. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We expect an upfront integration cost of $25,000 between DRX and our EMR. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with CVS pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Buncombe County with limited access to affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. WNCCHS has 5 sliding fee levels for the services in the clinic, including medical, dental and behavioral health services. Pharmacy offers a greatly reduced price equivalent to sliding fee category A for all patients that qualify for the slide. Offering these tremendously discounted prices for medications that initially cost the CHC a large amount of money prior to any rebate in the future is very challenging both logistically and financially. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $4,143,743 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $110,799 to purchase these same drugs at the 340B ceiling price. This represents a 37 Times (or 3,700%) increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, WNCCHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Dental, Prenatal/OB services, Urgent Care services, Care Management, Clinical Pharmacist services for patients with diabetes, obesity, and hypertension. Operating Hours: While we do not anticipate needing to reduce our clinic hours at this time, it is a possibility in our future. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Community Health Worker or Dental Assistant which directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our estimated 5,500 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. WNCCHS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, WNCCHS estimates its 2027 Annual Rebate Opportunity Cost to be approximately $332,470. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. WNCCHS estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $336,079. It is expected that for 2027 those costs will increase just over 50% in 2027 and an additional 30% in 2028 for the MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $20,498 for the first 10 drugs annuallyfunds that are currently dedicated to services for homeless patients, our prenatal program, food and housing assistance programs, our medication assistance program, urgent care services to avoid hospital visits and more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on WNCCHS the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays WNCCHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $201,647. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion WNCCHS strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. WNCCHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. WNCCHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Anita Case, CEO at acase@wncchs.org. Sincerely, Anita Case Western North Carolina Community Health Services, Inc 257 Biltmore Ave Asheville, NC 28801 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Western North Carolina Community Health Services, Inc. (WNCCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: WNCCHS anticipates a loss of $4,032,943 from entity-owned pharmacy operations and $37,500 reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low- income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For WNCCHS in particular, this means it will impact: Our in-house pharmacies filled more than 79,000 prescriptions in the last 12 months, and our CHC served over 14,000 unique patients. Our current admin costs for our 340B program exceed $200,000 annually. We use our 340B revenue to help cover payroll expenses across our staff, operate dental services, prenatal/OB services, care management, services, urgent care services that avoid unnecessary hospitalizations, services for our homeless patient population, and discounted prescriptions services that otherwise we could not provide. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due Mailing Address: P.O. Box 338 Asheville, N C 28802 Minnie Jones Health Center: 257 Biltmore Avenue Asheville, NC 28801 Hominy Valley Health Center: 1914 Smokey Park Hwy Asheville, NC 28715 McDowell Heath Center: 136 Creekview Ct, Marion, NC 28752 to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national- surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: WNCCHS provided $3,081,612 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: WNCCHS anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, WNCCHS anticipates an increase of $65,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 WNCCHS expects to hire 1.0 additional FTE for these purposes. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Expected increased cost to hire 1.0 FTE for these purposes exceed $50,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We expect to spend at least 10 hours a week to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. WNCCHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $70,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. WNCCHS utilizes DRX software which will need to be fully integrated with our EMR. Currently, many activities in DRX still need to be monitored manually to ensure 340B rebate compliance. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We expect an upfront integration cost of $25,000 between DRX and our EMR. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with CVS pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Buncombe County with limited access to affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. WNCCHS has 5 sliding fee levels for the services in the clinic, including medical, dental and behavioral health services. Pharmacy offers a greatly reduced price equivalent to sliding fee category A for all patients that qualify for the slide. Offering these tremendously discounted prices for medications that initially cost the CHC a large amount of money prior to any rebate in the future is very challenging both logistically and financially. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $4,143,743 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $110,799 to purchase these same drugs at the 340B ceiling price. This represents a 37 Times (or 3,700%) increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, WNCCHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Dental, Prenatal/OB services, Urgent Care services, Care Management, Clinical Pharmacist services for patients with diabetes, obesity, and hypertension. Operating Hours: While we do not anticipate needing to reduce our clinic hours at this time, it is a possibility in our future. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a Community Health Worker or Dental Assistant which directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our estimated 5,500 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. WNCCHS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC- upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, WNCCHS estimates its 2027 Annual Rebate Opportunity Cost to be approximately $332,470. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. WNCCHS estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $336,079. It is expected that for 2027 those costs will increase just over 50% in 2027 and an additional 30% in 2028 for the MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $20,498 for the first 10 drugs annuallyfunds that are currently dedicated to services for homeless patients, our prenatal program, food and housing assistance programs, our medication assistance program, urgent care services to avoid hospital visits and more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on WNCCHS the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays WNCCHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $201,647. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model-pilot- program model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion WNCCHS strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. WNCCHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. WNCCHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Anita Case, CEO at acase@wncchs.org. Sincerely, Anita Case Western North Carolina Community Health Services, Inc 257 Biltmore Ave Asheville, NC 28801
HRSA-2026-0001-1965National Association of Community Health Centers (NACHC)2026-04-20T04:00Z122,867 chars
Please see our comments attached. 1 April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: For the past 55 years, the National Association of Community Health Centers (NACHC) has been the leading national, nonpartisan organization dedicated to supporting Community Health Centers (CHCs), also known as Federally Qualified Health Centers, as the Employer, Provider, and Partner of choice in all communities. Collectively, CHCs are the largest primary care network in the nation, serving as the medical home for 34 million patients1 and employing 326,000 dedicated staff. For 60 years, CHCs have provided high-quality, affordable, comprehensive care including primary, preventive, dental, behavioral health, pharmacy, vision, and other essential health services at over 17,000 locations across rural and nonrural communities. This includes 1 in 3 rural residents and 1 in 2 in poverty. As our nations largest primary care system, there is strong evidence, including from the Congressional Budget Office, that our work saves lives and also saves Medicaid and Medicare billions annually by reducing costly emergency, inpatient, and specialty care.2 Research shows that every dollar invested in primary care yields a 13-to-1 return in overall health system savings.3 On behalf of NACHC, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is the bedrock of their ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety net providers directly serving patients with a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments done by NACHC, we know that CHCs are facing staggering impacts: 1 Weitzman, 2025. https://www.mwhs1.com/wp-content/uploads/2025/08/The-Real-CHC-Patient-Base_080525_final.pdf 2 Volerman A, Carlson B, Wan W, Murugesan M, Asfour N, Bolton J, Chin MH, Sripipatana A, Nocon RS. Utilization, quality, and spending for pediatric Medicaid enrollees with primary care in health centers vs non-health centers. BMC Pediatr. 2024 Feb 8;24(1):100. doi: 10.1186/s12887-024-04547-y. PMID: 38331758; PMCID: PMC10851548. https://pubmed.ncbi.nlm.nih.gov/38331758/ 3 https://www.oregon.gov/oha/HPA/dsi-pcpch/Documents/PCPCH-Program-Implementation-Report-Final-Sept-2016.pdf 2 Financial Losses: Nationwide, CHCs report up to $4 million for implementation for entity- owned pharmacy operations and $5,000 to $720,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate their operational costs will increase significantly. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot.4 o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure. From a NACHC survey, nearly 75 percent of rural health centers spent at least five percent of their 340B savings on mobile clinics, with nearly eight percent spending 20 percent or more. Rural health centers also reported utilizing 340B savings for mental health services, nutrition programs, and capital investment. I. NACHC Strongly Urges HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 34 million patients who rely on us. NACHC data indicates that without discounted or free medications, a substantial portion of CHC patientsup to 3 million or morewould lose access to essential treatments.5 These patients often have chronic conditions like diabetes, heart disease, and behavioral health needs. They depend on the essential drugs included in the rebate pilot more than patients with any other conditions. A change of this nature will have an immediate and direct impact on patients at the pharmacy counter. It would limit the range and volume of drugs CHCs can afford to stock, directly contradicting the programs goal of increasing access to affordable medications. Since 90% of CHC patients are at or below 200% of the federal poverty level, they rely on discounted medications from their local CHC.6 To navigate this model, CHCs are being forced into precarious financial positions. Recent surveys indicate that over 50% of CHCs anticipate depleting their limited financial reserves, while 27% anticipate needing to take out lines of credit or loans just to cover the upfront float costs of drugs. Survey findings indicate that CHCs estimate financial losses ranging from four thousand to four million dollars annually, depending on the organizations pharmacy structure, size, and patient volume.7 These projections reflect both delayed 4 NACHC Internal Survey on Rebate Model Burden (2025). 5 https://www.hcadvocacy.org/wp-content/uploads/2023/02/NACHC-340B-Report-Summary-June-2022.pdf 6 Ibid. 7 PCA Survey. 3 reimbursement structures and increased administrative burden associated with the anticipated rebate reconciliation processes. Additionally, the evolving operational landscape for CHCs further compounds these challenges. CHCs are concurrently navigating workforce shortages across clinical and pharmacy staff, increased demand for behavioral health, chronic disease management, and enabling services, and persistent reimbursement constraints across Medicaid, Medicare, and other payers. At the same time, CHCs are absorbing rising operational expenses, including labor costs, IT or technology infrastructure investments necessary to maintain compliance with the ever-changing federal and state program requirements. These pressures are further intensified by ongoing coverage instability among patient populations, administrative burden associated with payer prior authorization and billing requirements, and variability in state-level Medicaid policies. Within this constrained and resource-limited environment, CHCs have limited financial flexibility to absorb additional risk or upfront capital requirements. A 340B rebate model creates a radical shift in financial risk from manufacturers to CHCs, requiring significant liquidity and administrative capacity that many CHCs are not structurally positioned to sustain without compromising service delivery. Nationwide, more than half of CHCs (55.5%) currently own and operate a pharmacy within their organization, offering immediate access to medications and other pharmacy services during a patients visit.8 Not only could this shift reduce formulary options and limit pharmacy hours for patients, but it could also eliminate entity-owned, in-house pharmacy services altogether, effectively undermining critical access points for medically underserved communities.9 Collectively, the proposed rebate model introduces significant financial instability into an already constrained operating environment, with direct implications for patient access, continuity of care, and CHC financial and operational capacity. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. 8 https://www.nachc.org/wp-content/uploads/2026/01/Pharmacy-Survey_Expanding-Access_V2.pdf 9 PCA Survey 4 NACHC has significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.10 This patient population relies on affordable medications to manage these long-term conditions. NACHC is deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.11 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.12 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.13 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and uninsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskensia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.14 Impairing access to these drugs could result in exacerbation of the mental health crisis. 10 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 11 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 12 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 13 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 14 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 5 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,15 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 34 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services and the full spectrum of care that makes a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the pilot program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. 15 2025 UDA Data, HRSA (hrsa.gov) 6 HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. NACHC urges HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with our consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. CHCs will submit data to demonstrate that the cost to comply with a 340B Rebate Model would lead to a significant increase in administrative costs, not incremental, as HRSA suggests. Sliding Fee Discount: We have heard from CHCs that increased costs will lead to changes in their sliding fee scales. For instance, large health center in Georgia estimated that these increased costs will cause them to eliminate and reduce services as well as increase the nominal sliding fee charges for medications and indigent care, since their 330 grant only subsidizes only 25% of their uninsured patients. External Vendor Costs: Given increased complexity, many CHCs anticipate increased costs for external support vendors. Some CHCs have received quotes for hundreds of thousands of dollars for these vendors, and others have already decided they do not have the resources to add another vendor but are concerned about their ability to utilize current capacity to meet the additional burden. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 7 Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.16 For instance, one mid-sized CHC in Alaska stated that the administration time involved in setting up new IT processes to establish data feeds, run financial reports, and decipher Beacon claims will result in at least one FTE employee at $120,000 and another $100,000 for investment in IT systems. For another large health center in Alabama, the estimated logistics will require an additional one to two FTE if the program grows to manage the reconciliation and continued burden. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.17 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Thirty-nine percent of CHCs estimate it will take their staff more than 20 hours to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans; another 38% estimate between 15 to 20 hours, and 23% believe it will take 5 to 10 hours to meet reporting requirements with this pilot program.18 The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NACHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. NACHC encourages HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: CHCs anticipate high upfront costs to adapt their pharmacy software, pay for custom dashboard modifications, and design new internal workflows, all of which will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, CHC TPAs and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 16 Internal NACHC assessment (99 responses). 17 Ibid. 18 Internal NACHC assessment (out of 101 responses). 8 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. The rebate model shifts significant IT, staffing, and operational burden onto CHCs with in-house pharmacies, diverting limited resources away from patient care and core service delivery. To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability Challenges: Unlike contract pharmacies that use Third-Party Administrators (TPAs), CHC with in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This creates new technical dependencies and increases the risk of workflow disruptions at the pharmacy counter. High Upfront Integration Costs: NACHC anticipates CHC would face significant upfront costs to modify existing systems, including building custom APIs and implementing "Price File" reconciliation tools to meet rebate model data submissions and claims validation requirements. Ongoing Administrative Burden and Cost: Reporting requirements alone are expected to be resource intensive. Thirty-nine percent of CHCs estimate it will take their staff more than 20 hours to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans; another 38% estimate between 15 to 20 hours, and 23% believe it will take 5 to 10 hours to meet reporting requirements with this rebate model.19 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.20 The Contract Pharmacy: The Burden of Network Coordination Nationwide, more than 65% of CHCs utilize a contract pharmacy to expand medication access, maintain affordability, and meet patients where they are.21 For contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these partnerships. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. CHCs anticipate that TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. CHC staff will have to monitor claims in their entity owned pharmacies, if applicable, and work with their different contract pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, many CHCs fear their contract partners will opt out of the 340B program entirely rather than manage the administrative headache. This would leave patients in our area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert 19 Internal NACHC assessment (out of 101 responses). 20 Internal NACHC assessment (99 responses). 21 https://www. nachc.org/wp-content/uploads/2026/01/Pharmacy-Survey_Expanding-Access_V2.pdf 9 already,22 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.23 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority clinic administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMAR) common to electronic medical records (EMR) seen at hospitals. Where eMARs are available, they are at an added cost and often require CHC to pay for a standalone software system. Minimal Risk for Duplication of Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. With respect to Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates 22 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 23 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.24 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.25 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems will continuously overwrite the manually added 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).26 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. NACHC appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. 24 HRSA FAQ 25 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 26https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 NACHC is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. NACHC respectfully requests that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain, with the median cash-on-hand at around 100 days and one-quarter reporting operating margins of -4%.27 Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with our consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B28 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.29 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and providing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 27 Forvis presentation, 2025 NACHC CHI Conference, "3 Key Governance Conversations for Financial Health and Mission Sustainability" 28 https://340bpricing.hrsa.gov/ 29 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Based on data collected by NACHC, nearly 30 percent of CHCs surveyed estimated it would cost over $1,000,000 in increased acquisition costs annually to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on a CHCs ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, many CHCs are navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHCs would need to reduce or eliminate certain clinical services and care delivery workflows. For example: Medication affordability programs and pharmacy services, including clinical pharmacist staffing and medication therapy management (MTM), represent one of the most heavily supported uses of 340B savings. Survey data show that approximately 60% of CHCs allocate at least 20% of their 340B savings to these functions, with a substantial subset dedicating 30% or more.30 Reductions in 340B savings would therefore directly limit patients ability to obtain and adhere to prescribed medications, resulting in increased rates of treatment interruption, disease progression, and avoidable hospitalizations. Enabling services, such as community health workers, patient education, outreach and enrollment, and transportation assistance, are similarly dependent on 340B reinvestment. Approximately 65% of CHCs report allocating 20% or more of their savings to these services.31 The loss of these supports would significantly impair patients ability to access care, attend appointments, and navigate complex treatment plans, particularly for individuals with chronic conditions and limited financial resources. Behavioral health services, including both mental health and substance use disorder (SUD) care, are heavily supported through 340B-generated revenue, with roughly two- thirds of CHCs allocating at least 20% of savings to these services and many reporting allocations of 2540%.32 A reduction in 340B savings would likely result in decreased availability of integrated behavioral health services, leading to longer wait times, reduced treatment continuity, and increased risk of acute behavioral health crises. Mobile health services, such as mobile clinics and street medicine programs, also rely heavily on 340B. More than 70% of CHCs dedicate at least 20% of their 340B savings to these outreach models.33 The loss of funding would directly reduce access points for patients in rural and other medically underserved areas, resulting in delayed diagnostics, untreated conditions, and an increased reliance on emergency care. C. Wholesaler Implications As previously mentioned, another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. At present, many 30 PCA Survey, March 2026. 31 Ibid. 32 Ibid. 33 Ibid. 13 CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. NACHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places many CHCs in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scare federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Every dollar paid upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While they await rebates, they lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, a CHC could be forced to either take out a line of credit or utilize limited financial reserves, neither of which are long-term, sustainable solutions. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In many areas of the country, patients only have their local CHC to access care; the risk of the CHCs credit limit being reached or reserves being depleted is a direct threat to the communitys safety net. a. Financial Impact of Rebate Denials and Delays NACHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.34 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- 34 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with the operational realities of CHCs. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. NACHC requests that the process utilized for rebate denials must align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.35 35 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 15 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.36 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods of time. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. NACHC is concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. NACHC respectfully requests that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request HRSA create a different pathway for dispute resolution. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,37 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, NACHC recommends that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system 36 340B House Report Legislative History. H.R. REP. 102-384(II). 37 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 16 of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion and hold them accountable while protecting covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e. 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities is different, they have the potential to misalign even when the entity is fully compliant with 340B program requirements. Currently, when this misalignment happens, manufacturers block entities ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to 17 covered entities.38 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example of this is within MFP effectuation, the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes39 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. NACHC requests that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. 38 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 39 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only NACHC requests that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.40 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.41 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not onetime, and would be incurred even though CADs are not currently billed to Medicare Part B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. 40 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 41 Internal NACHC survey data 19 Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the Inflation Reduction Act, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, adhering to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B- related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 20 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, NACHC encourages HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,42 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.43 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.44 42 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 43 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 44 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 21 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.45 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the intent of the IRA itself. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing goes against HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).46 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate 45 H.R. REP. 102-384(II) 46 42 U.S.C. 256b(a)(1) 22 discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not contain language permitting HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.47 The only rebate mechanism HHS has contended is available to it is found under Section 340B and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).48 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.49 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim 47 Id. 48 42 U.S.C. 256b(a)(1) 49 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 23 identification.50 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.51 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the duplicate discount prohibition. Such records must first be generated and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plans.52 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant safety-net providers that choice. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.53 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs they bill to Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing 50 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 51 42 U.S.C. 256b(a)(5)(C). 52 42 U.S.C. 256b(a)(5)(C). 53 See 42 U.S.C 256b(a)(5)(A). 24 requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.54 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.55 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs for each drug are incurred by an initial purchase at the higher WAC price and added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not every state provided guidance. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. 54 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 55 C.F.R. 447.518(a). 25 Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC price because that is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the Nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.56 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.57 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.58 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.59 56 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 57 42 C.F.R. 447.502 58 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 59 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 26 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and added administrative costs related to claiming a rebate that are factored into the true actual acquisition cost for a 340B- rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale, occurring prior to rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.60 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. 60 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 27 Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.61 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.62 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts 61 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 62 42 U.S.C. 256b(a)(5)(A)(emphasis added). 28 The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.63 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot, or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.64 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. 63 32 C.F.R. 199.21(q)(2)(iii)(E) 64 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 29 Commercial claims data is extraordinarily valuable proprietary information to CHCs.65 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.66 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.67 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.68 Drug industry data vendors have reported that such data is highly valuable to manufacturers.69 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all of the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.70 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.71 NACHC believes that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B 65 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 66 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 67 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 68 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 69 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 70 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 71 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 30 statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. NACHC contends that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.72 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.73 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.74 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law in violation of the federal Administrative Procedure Act.75 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. NACHC harbors significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.76 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. 72 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 73 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 74 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 75 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 76 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 31 For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entitynot HHS and not a manufacturerfrom reselling or transferring 340B drugs to nonpatients.77 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDs Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to establish such relationships. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.78And the legislative 77 42 U.S.C. 256b(a)(5)(B) 78 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 32 history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.79 IX. Establishing a National, Neutral Claims Clearinghouse NACHC recommends OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the Inflation Reduction Act; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims- level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 79 H.R. REP. 102-384, 16 33 B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of fifty different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal 34 government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model80 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 80 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 35 340B Access Act: This Republican-sponsored bill advocates for a NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion NACHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NACHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NACHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Elizabeth Linderbaum, Director of Regulatory Affairs, at elinderbaum@nachc.org Sincerely, Joe Dunn Chief Policy Officer
HRSA-2026-0001-1966(no commenter metadata)2026-04-20T04:00Z36,501 chars
Please see the attached comments of Cambridge Public Health Commission to Request For Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) CHA Cambridge Health Alliance 1493 Cambridge Street, Cambridge, MA 02139 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Cambridge Public Health Commission (CPHC), 1493 Cambridge Street, Cambridge MA 02139, thank you for the opportunity to comment on the Department ofHealth and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." We respectfully request that the rebate model pilot for the 340B program not move forward for the reasons described below and instead preserve the upfront discount model that has successfully enabled covered entities such as CPHC to fulfill the 340B program's purposes.been successful over the last decades. CPHC, which does business as Cambridge Health Alliance, is a public hospital system with locations in Cambridge, Somerville, Everett, Malden, Medford, and Revere, Massachusetts. As a public safety net hospital system with a disproportionate share adjustment percentage of 49.84%, CPHC would like to underscore the critical nature of the 340B prograin in enabling that eligible covered entities (CEs) to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which safety net systems like ours have relied upon for years, is the best way to fulfill that purpose of the 340B program. CPHC provides essential health care services for our communities of 500,000 people, including over 1 Million patient care visits annually. The 340B program enables our hospital to maintain access to affordable medications and sustain health care and behavioral health care services for vulnerable patients across our service area. For example, we provide regional access to behavioral health inpatient, outpatient, and urgent care for patients of all ages. We are the largest inpatient psychiatry hospital for care for children and adolescents in our state. As a safety net hospital systern, the majority of our patients rely on Medicare, Medicaid, or progams for the uninsured (73% public payer mix). Through 340B participation, we provide nearly 145,000 annual prescriptions to low-income, uninsured people and over 160,000 annual prescriptions for those AFFILIATED WITH: Beth Israel Deaconess Medical Center elIPLIes MassC-eneral Hospital for Children- HARVARD MEDICAL SCHOOL TEACHING HOSPITAL IIENTABaBICHa HARVARD TH.CHAN MRS LITI o,: SCHOOL Of PUBLIC HEALTH I.INIVSRSITY I Executive Offices with Medicaid. In addition, we have prescription access programs that assist patients who are underinsured, so they do not experience a delay in therapy. The 340B discount upfront is extended to our patients who can pay for their medications. Changes to the 340B program such as the proposed rebate model that reduce program benefits and cut 340B savings will disproportionately affect our patients and communities. In our comments below and detailed in Appendix I, CPHC estimates significant impacts in terms ofnew costs and administrative burdens that would stem from any rebate model For the proposed rebate pilot's 25 prescription drugs, the estimated annual permanent monetary loss to CPHC is $3.65 Million, inclusive of additional staffing, technological support, consulting and related operational costs. The annual estimated amount under risk is $29.7 Million pending receipt of the rebates due on prescriptions drugs already purchased. The monthly cash flow impact for the proposed rebate pilot's 25 prescription drugs is estimated at $2.5 Million as it will replace the current statutory 340B discounts that are received upfront with increased carrying costs until the rebates are paid after the medications are dispensed. CPHC has made best efforts to provide detailed answers for many of the RFI questions in the time available. To estimate costs, we have assumed that the proposed future Rebate Program under HRSA consideration will include the 10 drugs that IIRSA previously approved thr its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026, Information Collection Request. Administrative Costs Under a Potential 340B Rebate Program. A rebate program would require CPHC to expend significant new administrative costs estimated at $584,580 annually for the proposed 25 rebate pilot prescription drugs. When we began participating in the 340B program, CPHC understood that we would incur some reasonable administrative costs. Our staffing, operations, and program administration was established around an upfront discount modeL A shift to a new kind of discount mechanism through rebates will require new resources and cause CHA to incur additional costs and burdens that will greatly exceed our current administrative cost experience and what we had anticipated as a 340B safety net hospital system. We have identified the key administrative cost drivers (primarily staffing, technical support, and software) which are represented in the table in Appendix H. The current volume ofthe first 25 rebate drugs from our in-house pharmacies is approximately 145 prescriptions per business day.These additional costs are driven by changes that a rebate program will require in the following processes. 1. Budgeting Financial planning for the amount of Wholesale Acquisition Cost (WAC) expenditure needed for upfront purchase of each included NDC on an annual basis. 2 2. Data submission validation ofbilled claims accepted by the payer and application ofthe appropriate modifier to each claim, ensuring only the required information is submitted for each manufacturer's individual policy. 3. Reconciliation Routine monitoring of claims submissions, daily tracking ofrebate status per claim and rebate amount received vs. rebate amount expected dispute initiation, discussions, and resolution with the manufacturer(s). 4. Audit Support Cost incurred through additional required staffing and/or consulting services to support the additional workload. 5. Challenging Denials research and review of denied rebate payments, communications and resolution with the manufacturer(s) and if no resolution, time included for working through the ADR Process. These incremental costs arise in three areas.. First would be the standard mixed-use 340B third party administrator (TPA) workflow. Standard 340B TPA processes do not capture all of the required data for the proposed rebate model submission and require modification to existing data feeds. This leads to additional time spent not only setting up the reporting, but performing quality assurance (QA) steps, working with vendors to accept the updated data feed and map within the TPA software. Reporting then needs to be established for pulling the required data to actually submit in the 340B ESP portaL Depending on the capabilities ofthe TPA, some fields need to be manually reviewed and modified to be accepted for submission. We anticipate the reconciliation of these claims to be labor intensive since we will need to work through a number of systems without system integration. An increase in staff would be necessaiy to submit, monitor and correct issues as they arise. The Beacon platform, which is the chosen claim clearinghouse by the manufacturers, is not very end-user friendly and requires us to outreach to their technical support service on a regular basis. Unfortunately, we do not always achieve resolutions in a timely manner, and we forecast claims to exist in a pending status. Reconciliation by routine monitoring of claims submissions, daily tracking ofrebate status per claim and rebate amount received vs. rebate amount expected resulting in the initiation of dispute resolution with the manufacturer will need to be worked through daily. The reconciliation of rebate claims will need to be supported by consultants who have the knowledge and systems in place to validate claims. They will be required to provide audit support to maintain regulatory compliance and assist in managing de-duplication of claims which occurs with the Maximum Fair Pricing Program. Denials will need to be researched, reviewed and communicated with the manufacturer. Claims without resolution or payment within 10 days of data submission will lead to us working through the Administrative Dispute Resolution (ADR) process. The second area impacted is with mixed-use or clean 340B hospital sites that are not managed in a TPA. CPHC utilizes inventory models that do not require TPA in certain specialties or areas ofthe heakhcare system. These require additional data reporting of varying complexity depending on the data 3 source (EMR or other system). Custom reports must be created to pull the required data points out of the EMR. The third area would be related to our in-house retail pharmacies. Our retail pharmacies utilize a TPA, and the data can be extracted from the TPA, in which case the primary cost increase is related to the labor cost/time ofhaving someone pull and submit this data. At this time, several consulting entities have anticipated this support would cost just under $105,000 annually. This is in addition to resources needed byCPHC to assist with reconciliation given consulting resources would not have access toCPHC's bank account and rebate related deposits. Additional expenses not quantified here would include legal review for terms and conditions associated with 340B ESP and any additional contracts or amendments required to add additional reporting functionality to existing software platforms. Staffing Impacts Under a Potential 340B Rebate Program. CPHC does not currently have the staffneeded to comply with a Rebate Program, and HRSA's estimate of 5 hours per week in additional work is severely understated for our healthcare system. Even after allocating 0.9 FTE current staff time to the proposed program (see Appendix II), the number of rebate drug claims is significant enough to warrant the hiring of an additional 1.0 FTE pharmacist. Further reallocating work hours from direct patient care or support resources to perform administrative functions is not feasible due to the volume of claims and the detailed work and expertise required to manage a rebate program. We generate a significant amount ofprescription volume, and the volume is the determining thctor for staffing levels in the rebate program. Recruiting for the 340B program is very difficult because few people possess the specialized skills and knowledge required with such a complex and heavily regulated program. It is becoming increasingly difficult to identify staff with any previous 340B experience and takes extensive time to grow our own resources. Staff will need to be trained on preparation and submission of claims data, as applicable, data validation, management and tracking of rebate payments, and responses to manufacturers for any inquiries. We require that all team members have a dedicated 340B onboarding/shadowing period of90 days, and then the next 90 days still require oversight. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. CPHC has designed its technological systems and operational infrastructure in reliance of an upfront discount modeL Any shift to a rebate mechanism will force us to incur significant costs to change those systems. 4 Medical Claims billing follows a much different process and timeline than billing for outpatient retail pharmacy claims. 1) Feeds/Files Current Medical Claims data submitted from CPHC's EMR to the TPA does not include information related to billed claims (e.g. claim number, claim line, etc.), but rather related to dispenses and/or administrations which occur long before the claim is billed. This issue creates additional time for the development of reports with the requested data and/or manual updates prior to submission. 2) Timing Medical claims, by nature, are not billed in the same manner as Retail Pharmacy Claims. Medical claims can be billed out weeks or months after the drug was dispensed to the patient in the setting of physician-administered drugs. This proves to be a monumental issue for CEs attempting to recoup a rebate on a claim that was billed weeks after dispensing as CEs must wait until a claim has been billed to provide accurate billing information to the manufacturers that are expecting this data within 45 or even 60 days of dispense. While the CE is held to tight timelines, manufacturers are in a position to be more restrictive in their timeframes of data collection. In addition, appropriate monitoring and tracking of rebates relative to the Maximum Fair Price (MFP) as a result of the Inflation Reduction Act (IRA) have already demonstrated that CPHC must expend a significant amount of time troubleshooting issues, reviewing claims, and identifying 340B-purchased drugs in the Beacon or MTF portal. Additionally, the recent policy pivots of Eli Lilly, Novo Nordisk, and Exelixis to require medical claims data has resuked in significant issues related to submission in 340B ESP including the following: 1) Tracking The requirement for CEs to track individual policies by each individual manufacturer including the following information is completely unmanageable: a) 340B claims required Medical Claims, Entity-owned pharmacy(ies), Contract Pharmacy(ies) all, one, or some combination of the three. b) Whether having an entity-owned pharmacy negates eligibility for contract pharmacy designation. c) Number of contract pharmacies that are included varies by manuthcturer policy, making it difficult to track. d) Number of days between claim submission and date of dispensation varies by manufacturer policy, making it difficuk to track. 2) Timing Medical claims, by nature, are not billed in the same manner as Retail Pharmacy Claims. Medical claims can be billed out weeks or months after the drug was dispensed to the patient in the setting of physician-administered drugs. This proves to be a monumental issue for CEs attempting to recoup a rebate on a claim that was billed weeks after dispensing as CEs must wait until a claim has been billed to provide accurate billing information to the manufacturers that are expecting this data within 45 or even 60 days of dispense. While the CE 5 is held to tight timelines, manufacturers are in a position to be more restrictive in their timeframes of data collection. 3) Confusion around medical claims submissions At what point should the CE submit claims data time of dispense, time of billing, or after the final bill has been paid? 4) Reporting Due to the nature of medical billing and billing software living outside of the EMR for some CEs, difficulty exists in obtaining routine billing information for import into the CE's chosen TPA(s). 5) Insurance-rejected claims A patient's insurance often changes during the billing process, or the insurance company may reject the claim. This is the case with primary, secondary and tertiary payer plans. When this occurs, what is the remedy for claims with inaccurate billing information? 6) Identification of claims with disallowed information Ifboth a HCPCS code and a billing unit of measure is submitted, 340B ESP has stated that the claim submission will fail. Where does this leave CEs with obtaining reimbursement? Data Collection by Covered Entities. Related and in addition to the problems discussed above, a rebate program would impose new data-related burdens on CPHC, forcing it to significantly change its data collection activities.. CPHC collects and audits data from its EMR, TPA, and outpatient pharmacy dispensing software platforms for Medical and Outpatient Retail Pharmacy Claims including its contract pharmacies. A monthly report of claims from the entire previous month is run from the TPA and a sampling of claims is selected from each 340B area [mixed-use, clean sites, entity-owned outpatient retail pharmacies, and contract pharmacy(ies)]. These samples are then reviewed by our TPA, for all of the eligibility elements required for qualification of a 340B claim, including but not limited to the following: 1. Patient status (if physician-administered) 2. 11-digit NDC match between EMR and TPA (ifphysician-administered) 3. Ordering provider 4. Written location 5. Encounter location 6. Insurance coverage (and appropriate NPI and billing modifiers, as applicable) 7. Supporting encounter documentation (e.g., office visit notes, etc.) frorn an eligible location ofthe CE 8. Referral documentation (if applicable) 9. Original office visit with patient at an eligible location of the CE (if a referral prescription) 10.Encounter notes from visits at the location to which the patient was referred (if a referral prescription) 11.Evidence of communication between referring provider and provider to whom the patient was referred (if a referral prescription) 6 12.Copy of original order (if reErral from outside provider into CPHC) 13.Documentation of our care of the patient e.g., vital signs, procedure note, etc. ifreferral from outside provider to our organization) The data that is being requested by manufacturers is not all present in the TPA software. The 340B Rebate Model Pilot Program would significantly change current data collection activities due to the requirement for medical billing claims. As previously described, medical billing differs significantly from outpatient retail pharmacy billing in both timing and process. Since the billing data is required as opposed to dispense/administration data, this requires information from CPHC's billing software which would require a one-time new report build and ongoing maintenance and attention to ensure that all required claims that have been billed reach the manufacturer. It would also require additional manual daily nionitoring to ensure the following: 1. All requirements for each claim submission are met PER MANUFACTURER 2. All rebates are received by our organization within the required timeframe 3. The appropriate basis of rebate calculation (WAC, GPO, or 340B) was utilized by the manufacturer on each claim 4. Rebate is disputed if incorrect and works with the manufacturer and/or filing an ADR to address and close the issue Rebate Model will require Complex Data Pulling and Integration. Our consulting resource is currently pulling reports from our TPA. The data must be filtered to the requested manufacturers at the NDC level, as the manufacturer name is not populated in the report. The Service Provider ID field must also be populated. CPHC has three separate accumulators (one for each hospital campus), so this process needs to be repeated three times. This task is highly time-consnming and takes time away from managing other critical responsibilities. There is no standardized reconciliation process, and it is unclear how submitted claims and manufacturer responses will be tracked. Because the data must be manually transformed, validated, and formatted to meet submission requirements, there is an increased risk to data integrity. Additionally, if fields for BIN, PCN, and Group Number become required, there are certain TPAs that do not provide BIN, PCN, and Group Number information to the CEs. Instead, all insurance is divided into the categories of either "Medicare", "Commerciar" (into which Medicaid MCO claims are lumped), or Uninsured. Medicaid FFS is assumed to be carved out, but CEs have no way of validating this. Multiple TPA vendors continue to run behind when new system updates are needed or warranted based on 340B Program changes such as ESP and updating medical billing fields, and this leaves CPHC vulnerable over a process in which they have no control 7 Payment Timing and Potential Cash Flow Impacts. A rebate-based payment model would meaningfully alter payment timing compared to current drug wholesaler arrangements. CPHC estimates a monthly cash flow impact of $2,476,312. In the past, HRSA credited the position of drug companies that "the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due." This is false, based on the timing and process of medical claims submission. If the process takes days to weeks for medical claims billing to occur, the replenished drug will in many cases be needed for use by the CE before initiation of the claim billing process. Most wholesalers have a "Net 30" term requiring the bill to be paid within 30 calendar days of invoice receipt. Ifthe medical claim is not billed weeks later than the date of service or if the medical claim is rejected for any reason requiring an even longer timeline, the CE will not receive the rebate before the purchase invoice from a wholesaler for the WAC amount is due. Therefore, CEs will have to "float" money to spend on paying higher prices before the rebates occur. This does not account for manufacturer rejections ofrebates or instances in which rebate disputes may occur, or the long, drawn-out process that would surely accompany an ADR submission. Based on the details provided above regarding wholesaler payment terms and the timing and process of medical claims submission and CPHC's experience, we do not believe that manufacturers will be able to comply with a 10 day rebate window. Adverse Impacts of Rebate Model. All of these many different costs and burdens add up. Unfortunately, that means that CPHC, with a disproportionate share adjustment percentage of 49.84%, will no longer be able to use our 340B savings as effectively and comprehensively as we did under an up-front discount model. As a result, our patients and community will suffer in concrete ways. We have prescription access programs that assist patients who are uninsured or underinsured with 340B funds, so they do not experience a delay in therapy. We also offer the 340B discount upfront to our patients who can pay for their medications. The average cost per script for our 340B patients with no prescription insurance coverage is approximately $46. 67 per prescription. Without the upfront discount, the average price per prescription for the 25 rebate drugs increases to $1,416.43. The rebate program will undoubtedly hinder prescription drug access. Reliance Interests. The 340B Program has operated under an upfront discount model for over three decades. In reliance on this, CPHC has, over the decades,expended significant sums to ensure compliance and designed its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model A fundamental switch now would disrupt these settled reliance interests fostered by longstanding IIRSA policy. Absent any identified problems with the 8 upfront discount model and given the massive costs that this disrupfion will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism or a costly pilot of a rebate model Problems With the Beacon IT Platfonn. In preparation for IIRSA's orginal Rebate Program, CPHC experience serious problems with Second Sight Solutions' Beacon IT platform to operate the Program. For example, the following problems were encountered with Beacon's Terms and Conditions: 1. The Terrns and Conditions are required (non-negotiable) for all CEs for a sole platform that demands patient claims data from CEs, which have long protected patient data, in exchange for financial reimbursement. 2. The statement above, taken directly from the Maximum Fair Pricing (MFP) terms and conditions basically indicates that the dispensing entity is granting Second Sight complete WORLDWIDE, IRREVOCABLE access to collect, DISCLOSE, and CREATE DERIVATIVE WORKS OF patient claims data. 3. This statement seems contrary to HIPAA requirements. 4. Manufacturers do not in any way need and should not receive unmitigated access to patient information for their own financial gain and/or business interests. 5. Please see verbiage above relative to CE rights. Second Sight's statement includes the exact opposite rights for CEs and only grants REVOCABLE, limited right and license to access and use the MFP platform. 6. There is no reason to provide commercial payers with ANY access to or derivative of any piece of data submitted to Second Sight for purposes of the 340B program. If allowed, this data will be utilimd expressly for manufacturer business interests (e.g., rebate negotiations with commercial payers outside of the 340B program). 7. Beacon will be handling patient medical claims for CEs nationwide and yet will have practically no liability (up to $1,000) for damages "EVEN IF SECOND SIGHT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES". This is unacceptable. Beacon's shifting data and other requirements were another major issue.Shifting data requirements among the different manufacturers is incredibly cumbersome to manage. Some manufacturers require certain pieces of data while others do not. These shifting requirements make submission of only the required data elements difficult for CEs to navigate and track among other responsibilities. Additionally, TPA's have proven unable to remain caught up with the necessary changes to allow CE's to quickly respond to these types of changes, related in even greater decrease in reimbursement and missing out on restricted 30 45 windows for submission. In our experience when problems arise, Beacon's customer service has beenwholly inadequate. 1. Help desk tickets are easily opened but there's a significant delay in acknowledgement/ resolution of issue by Beacon. 9 2. Numerous problems have gone unresolved with no explanation ofpotentially fixed issues, nor any timeline provided by Beacon. 3. Beacon employees are not well trained to resolve client issues and require escalation, which leads to a long wait time. 4. The web portal is not user friendly and transparent. Efforts To Avoid 340B/MDPNP Duplicate Discounts. A rebate mechanism will impose major financial and operational burdens on CPHC, and a rebate program is not necessary to address the need to deduplicate 340B and MDPNP pricing. HRSA already maintains a robust and multifaceted oversight framework to ensure the integrity and transparency of the 340B Drug Pricing Program. Through its Office of Pharmacy Affairs (OPA), HRSA conducts risk based and targeted audits ofboth CEs and pharmaceutical manuliacturers to assess compliance with statutory requirements, including patient eligibility, prevention of diversion, and avoidance of duplicate discounts. HRSA also requires CEs to undergo annual recertification, during which entities must attest to their continued eligibility, compliance with program requirements, and the accuracy of information reported in the 340B database. CEs are further required to maintain detailed policies and procedures, auditable transaction records, contract pharmacy documentation, and supporting eligibility and utilization data, all of which are routinely reviewed during HRSA audits. In addition, HRSA's self-disclosure process enables CEs to proactively identify, report, and correct compliance issues, reinforcing accountability while promoting continuous improvement. Collectively, these existing audit, reporting, and recertification mechanisms provide meaningful transparency and program safeguards,demonstrating that HRSA already possesses effective tools to ensure compliance without introducing new administrative structures that could destabilize safety net providers.' The Massachusetts Medicaid agency has a rigorous process to prevent duplicate discounts for drugs purchased under the 340B program.2 Massachusetts pharmacies are required to include identifiers when submitting any 340B pharmacy claim billed with 340B acquisition cost. For340B claims submitted by pharmacies on behalf of340B entities (contract or indirect billing),the authorization number (NPI of the 340B entity) is required to be submitted. MassHealthrequires pharmacies to include accurate 340B claim identifiers for claims determined to be 340b Eligible at time of adjudication and for claims that are presumed to be (and to be later verified) as340B eligible. If a claim is submitted with 340B indicators and it is later determined that the claim is not 340B eligible, MassHealth requires the pharmacy to void and resubmit the claim without 340B indicators. If a claim is submitted without 340B indicators and it is later determined that the claim is 340B eligible, MassHealth requires the pharmacy to void and resubmit the claim with accurate 340B indicators. Failure to comply with rules can result in audit penalties as well as revoking registration as a Medicaid pharmacy. HRSA Progra m Integrity, https://www.hrsa.goy/opa/progra m-i ntegrity https ://www.ma ss.gov/doc/pha rma cy-facts-238-j a nuary-16-2025-0/download 10 lf, notwithstanding the foregoing current protections against duplicate discounts, HRSA determines that further mechanisms are needed for deduplication, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. CPHC has a strong 340B program and compliance. With an upfront discount the CE is responsible for determining eligibility and we have all the necessary information (EMR, pharmacy claims data) and processes in place to qualify a patient and add the necessary modifiers to the 340B claims. As the CE, we take on the responsibility of determining patient eligibility for the upfront discount. We possess all required resources, including the EMR and pharmacy claims data, along with established processes to qualify patients and apply the necessary modifiers to the 340B claims. In the 18 years prior to these RFI comments, CPHC has only had two major manufacturers query about duplicate discounts, neither of which resulied in a duplicate discount finding. We worked with the manufacturers in a timely manner to review their concems, findings and in both instances the manufacturers had incorrect information. Once we proved there were no duplicate discounts, the cases were closed. These inquiries are incredibly time-consuming and tie up resources that would be better used by taking care ofpatients and supporting our patient care mission. With the MDPNP, we have found that the MDPNP platform itself has introduced errors into the process. We experienced errors in approximately 25% of our claims. In the beginning of the process starting January 1, 2026, the "20" modifier included on entity-owned retail pharmacy claims was not crossing from PBM to MTF portal. This led to 340B claims on which rebates were paid that should not have been even though the claims information that was requested had been submitted correctly. Although we have submitted tickets for each error, we have received no response to any despite multiple attempts on our part to follow up on these tickets. Although there are indications that this process has been fixed, CEs have been notified that this may not work correctly in all cases, and we have seen no proof that this has been addressed. Manufacturers do not possess the necessary information and would not be able to correctly qualify a patient as 340B eligible or not 340B eligible. As such manufacturers cannot effectively or e fficie ntly deduplicate claims. For the reasons noted above, CPHC is greatly concerned that the costs and adverse impacts of any Rebate Program will outweigh any expected benefits. Therefore, we respectfully request that HRSA not proceed with this Rebate pilot. 11 Should HRSA move forward with development of a pilot program, we request that HRSA provide specific opportunities that enable CEs to provide formal comment on the specifics of its new program, as critical details would be needed to assess it. We appreciate HRSA's consideration of these comments. CPHC is firmly committed to the mission ofthe 340B program and to ensuring that the millions ofpatients who rely on it continue to receive access to life-saving medications and high-quality clinical care. We look forward to working with HRSA on this important issue. Sincerely, Andrew M. Fuqua Senior Vice President and General Counsel and Authorized Official Cambridge Public Health Cornmission 1493 Cambridge Street Carnbridge, MA 02139 12 Appe ndix I Estimated Impact of 340B Rebate Model Pilot (25 Prescription Drugs) Estimated Impact ofRebate Pilot Annual Cost Rationale Total Float: $29,715,744 This is the estimated annual impact of not receiving 340B discounts for the 25 Rebate Pilot NDCs. This is the estimated annual amount under risk of not receiving a rebate. Annual Budgeted Expenses will increase by this amount (Difference between 340B price & WAC price) Cash Flow Impact: S2,476,312 This is the estimated monthly cash flow impact of not receiving the 340B discounts upfront and procuring the 25 rebate drugs at WAC pricing. Additional upfront cash needed to carry the increased costs until rebates are paid. Costs of Cash: $63, 000 This is the estimated value of interest lost (estimated at 3.5%) due to not receiving the 340B discounts upfront. (Time value of money) Interest loss on the float for the timeframe between purchase & rebate Cost of Goods (COGS) - $16,079 to $32,158 Estimates of COGs increase by 0.02% ($16,079) to 0.04% ($32,159) with the first 25 Rebate Pilot drugs. Distributor Fee Increase Additional Administrative $584 580 Estimates of costs to prepare for and operate the Rebate Pilot, including staff, consulting, TPA, PSAO, and software. Please see Appendix II for additional Detail. Costs Permanent Loss of Funds & Additional Costs $663,659 - $679,738 Additional Costs: Rebate Denials $2,971,574 Annual estimate at 10% Total Annual Estimated Permanent Loss including Additional Costs to Manage the Program $3,635,233 - $3,651,312 13 Appendix II Estimates for Additional Administrative and Operational Costs of 340B Rebate Model Pilot (25 Prescription Drugs) Additional $584,580 Adminis trativ e Costs Staff Supporting Rebate Program 0.9 FTE $209,280 -current staff working on new rebate platform. Additional Hospital Staffing 1 FTE $202,800 -regular monitoring and validation of Beacon Platform, supporting staff to maintain regulatory compliance. Audit support for the additional requirements. Consulting Se ry ices N/A $105,000 -regular monitoring and validation of Beacon Platform, supporting staff to maintain regulatory compliance. Audit support for the additional requirements. Third Party Administrator (TPA) N/A $30, 000 -estimated cost of software changes resulting in additional monthly fees to accommodate rebate drugs, custom reports, supporting pharmacy staff on a regular basis. Pharmacy Service Administration Organization (PSAO) N/A $31,500 - updating and changing detailed fmancial reports to include rebate activity; PSAO reports interface with pharmacy software and necessary for financial reconciliation; estimating a 5% increase in monthly fees. Pharrnacy Software N/A $6,000 -estimated cost of software changes to inventory management module, custom reports, financial reconciliation; results in an increase in monthly fees for each in-house pharmacy. Total $584,580 14
HRSA-2026-0001-1967Brown University Health2026-04-20T04:00Z26,388 chars
See attached file(s) Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels: Brown University Health (BUH), on behalf of its 340B Covered Entity affiliates: Rhode Island Hospital (RIH) (DSH410007), and Saint Annes Hospital (DSH220020), both safety net DSH hospitals, the Miriam Hospitals Immunology Center operating a Sexually Transmitted Disease Clinic (STD02904), its Rise TB clinic, a Tuberculosis Clinic (TB02906), and its Ryan White Care Program, a Ryan White AIDS/HIV Part C grantee (HV00018) (collectively BUH), thanks you for the opportunity to comment on the announcement entitled Request for Information: 340B Rebate Model Pilot Program 91 Fed. Reg. 7287 (February 17, 2026), issued by the Health Resources and Services Administration (HRSA) and Department of Health and Human Services (HHS). The purpose of this letter is to answer specific questions posed in the Federal Register and, in general, to articulate BUHs significant objections to the use of a rebate model under the 340B Program. To be clear, BUH not only vigorously opposed HRSAs previously proposed rebate model but also opposes any other variation of a rebate model that HRSAs requests for responses may seek to create. Specifically, the rebate model, and rebates generally, would jeopardize the ability of BUHs Covered Entity affiliates to serve their vulnerable patient populations by introducing impediments including but not limited to cash flow strain, significant operational and administrative burden, and general uncertainty. In short, the basic design of a rebate model: (1) forces Covered Entities to budget operational amounts for the up-front purchase of higher priced drugs in the hopes that manufacturers will provide a rebate, thus reducing the availability of resources to enhance patient care; (2) empowers manufacturers with a unilateral and newly created power to dispute and then deny any rebate request; and (3) forces Covered Entities to perform and/or provide manufacturers with virtually any data/information they request (usually in violation of statute and/or HRSA rules and guidance) due to factors including but not limited to the following: (a) lack of any significant enforcement mechanism and (b) the Covered Entitys budgetary need, at all costs, to regain funds expended on the higher priced pharmaceuticals. As such, a rebate model undermines the goal of the 340B Program, which is to enable Covered Entities to stretch federal resources to reach more eligible patients and provide more comprehensive services. Pharmacy Service Line Christine Collins, MBA, RPh, FASHP SVP, Pharmacy and Perioperative Services Chief Pharmacy Officer Mailing Address: Rhode Island Hospital 593 Eddy Street Providence, RI 02903 Tel: 401-444-4665 Fax: 401-444-4240 Email: ccollins2@brownhealth.org Over the years, BUHs participation in the 340B Program has supported and enabled the systems mission to provide care to all patients who seek it, regardless of ability to pay. Savings from the 340B Program support investment in programs across the region that serve a high proportion of Medicaid and other underserved patients. In recent years, however, the unlawful restrictions imposed by manufacturers to impede access to 340B pricing at contract pharmacies have threatened our organizations ability to provide and expand care in the ways our community requires. These manufacturer restrictions, which disregard HRSAs rules and guidance, provided a preview of dangers posed by a rebate model. This display of defiance resulted in the Rhode Island General Assembly passing, and the Governor signing, legislation that prohibits the manufacturers unilateral actions to restrict the use of contract pharmacies. More specifically, the actions of five manufacturers in 2024 sought to restrict the 340B Program by implementing rebate models in a never-before-seen move to circumvent the intended operation of the program while padding their profits. Justifiably, HRSA challenged these rebates in court, having previously provided notice to the manufacturers that these models were not approved for implementation as required by the statute. Subsequently, the judge hearing the case found in favor of HRSA, affirming that manufacturers could not implement rebate models without prior approval from HRSA. We applaud HRSAs previous efforts to maintain the integrity of the 340B Program and not allow manufacturers to overstep the requirements of the program. Despite this legal victory, HRSA sought to test a rebate model pilot, restricted to those 10 drugs subject to the Maximum Fair Price (MFP) in 2026, by issuing a notice in 90 Fed. Reg. 38165 (August 7, 2025) allowing interested manufacturers to submit an application, and Covered Entities to submit comments, which BUH did in a letter dated September 8, 2025. After receiving over 1,200 responses, HRSA decided to proceed with a rebate pilot to begin on January 1, 2026, seemingly without contemplating most of the concerns described by Covered Entities. For over thirty years, 340B discounts have been offered by manufacturers to nearly all Covered Entity types through upfront pricing. This allowed Covered Entities to tailor their program operations to maintain appropriate oversight staff, reduce expenses and minimize administrative burdens, ensuring that the majority of the financial benefit realized is reinvested into patient care and the community. HRSAs continued intent to implement a rebate model is highly concerning and would open the door for manufacturers to delay and ultimately dilute their obligations to provide 340B discounts to Covered Entities. This situation would gut the intended purpose of the 340B Program by adding expenses and disrupting reliable cash flow for Covered Entities, thus diverting limited hospital resources away from patient care. Without the upfront discounts that the current 340B model allows, Covered Entities may have to delay or close services in order to earmark funds to cover this increased and unbudgeted drug expense. At a time of increasingly constrained hospital finances following nationwide Medicaid changes and the loss of some federal marketplace subsidies, inverting the 340B pricing structure will have a substantial impact. Moreover, the fact that states across the country, including Rhode Island, passed 340B protection legislation but have continued to battle manufacturers imposition of restrictions, conditions and administrative requirements in contravention of explicit state laws, should give HRSA a preview of how manufacturers will exploit the proposed rebate model. The remainder of this response addresses subsections under Section II. Request for Comments within the Federal Register named above. Weve also provided additional concerns not posed by HRSA that we believe important to consider as to whether they will proceed with a rebate model. Any financial specifics that fall under business confidentiality will be shared with HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. We feel this information is not relevant for evaluation of impact under a rebate model. These are costs Covered Entities already bear under current process, were negotiated between the Covered Entity and vendor, and would continue regardless of whether the rebate model is implemented. The focus of cost evaluation should be on any new expenses or new burdens that directly result from the change of the upfront discount model to a rebate model, particularly increases in upfront drug expense with the loss of immediately available 340B discounts. Incredulously, HRSA has not included that question in either this document or the ICR mentioned within. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. ii. Describe the methodology and assumptions used to develop these estimates. iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? v. Comment on the impact of these incremental costs under your current operations. This information will be shared with HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional fulltime employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We would anticipate that implementation of a rebate model would require at least 1 new FTE and up to 3 new FTEs to oversee the review and auditing of claims and submission of data, tracking purchases to match against receipt of rebates, and escalation of issues through the several channels that have been described. This is only in relation to the number of drugs and NDCs currently under consideration. Any expansion of a rebate model could require additional FTEs and salary costs to the Covered Entity. These FTEs would be permanent so long as a rebate model is required to receive our statutorily required 340B discount. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Existing platforms that the manufacturers intended to use for their own rebate model versions should not be considered acceptable simply because they would be free for Covered Entities to use. We have pre-existing data concerns around the ESP platform, which is operated by the same group that created the Beacon rebate platform, that were raised by us in direct letters to HRSA, dated August 19, 2022, July 19, 2023, and November 29, 2023, along with several 340B advocacy groups, like 340B Health, and national hospital associations. Additionally, Kalderos has confirmed that as of December 4, 2025, they will not execute Business Associate Agreements (BAAs) for their Truzo platform used to submit claims data under some manufacturer contract pharmacy restriction notices. This alone is a non-starter for providing patient claims data to that platform. We encourage HRSA to identify and contract with their own vendor or build an independent platform for any data requirements under a rebate model to ensure visibility and appropriate use of the data provided. For our internal tracking purposes, it is most likely that this process would be manual, similar to our data submission processes with 340B ESP. If we were to seek support from a vendor platform, this value is difficult to estimate given that no current vendors that we would be comfortable contracting with have built out these capabilities, or been in a position to provide cost estimates. We think it would be fair to estimate that new expenses could range from several hundred thousand dollars to several million dollars per year. This could apply to existing third-party administrators or vendors adding new service fees for this capability or wholly new vendors that develop platforms for a rebate model that we contract with in the future. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. This information will be shared with HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. While the detailed response to these sections will be shared to HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW, we want to make some general points regarding what we are being asked to describe in financial terms. When the 340B Program was first enacted, HRSA had the opportunity to consider a rebate model. There is a reason why that model was not implemented, and has not been implemented in the 30+ year history of this program. The workflows previously evaluated, and in which HRSA has made allowances for, was to reduce financial and administrative burdens to Covered Entities, showing full understanding of the purpose of the 340B program. ANY increase in expenses that does not generate new benefit, and instead, is carried in order to simply retain what we already have access to, should be a non-starter in any further considerations. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. We frequently hear concerns about this duplication of claims to 2 separate covered entities, but we have never seen this occur. The closest we have seen was several years ago when a pharmacy did not have a methodology to prevent the same script number from being generated by 2 different stores. In that instance, the same Rx number was for 2 different patients and 2 different drugs, captured by the same Covered Entity, and was easy to confirm that these were not actually duplicates. The pharmacy has since implemented safeguards to prevent this going forward. This does raise the question as to how will it be determined if a duplication has happened and whether it is actually for the same claim? It is still concerning that HRSA has not specified what constitutes a justifiable reason for denying rebates and is instead leaving the manufacturers to concoct their own rules, forcing covered entities to expend time and energy challenging denials, while experiencing delays in monies owed both to the state and by the manufacturers. Just as it was not up to the manufacturers to deny 340B pricing to Covered Entities, it should not be up to them to deny rebates. Instead, the manufacturers should report possible issues to HRSA and provide their documentation. In turn, HRSA would send the inquiry to the Covered Entity for investigation and work in collaboration to confirm whether repayment of their rebate is warranted. This is fairly similar to current processes where Covered Entities notify manufacturers of instances of non-compliance, offering repayment of the discounts realized to cure the error, when other options to fix the error have been exhausted. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third party vendors are used to carry out some or all of these activities. b. Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Because these are discussions that would normally occur during a HRSA audit, and remain between HRSA and the Covered Entity, this information will be shared with HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. It is unclear why HRSA is asking questions in relation to deduplication under the MDPNP when CMS has purview over those responsibilities. Those questions and conversations seem to be more appropriate to have with CMS directly instead of relying on a rebate program or Covered Entities to address that need. As to the other subsections, because these are discussions that would normally occur during a HRSA audit, and remain between HRSA and the Covered Entity, would force Covered Entities to describe business practices of contract pharmacies, or are otherwise not the responsibility of the Covered Entity, this information will be shared with HRSA under separate cover as Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If manufacturers are not allowed to dictate the application of rebates as we suggest under Section 3, it would be up to HRSA to determine the cadence of when manufacturers should alert them to issues and how. Any public posting of information could emulate similar processes followed under HRSAs audits of covered entities after confirmation that repayment of rebates were required. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; ii. Reduce diversion or improper claims; and iii. Increase pricing transparency across stakeholders. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. We believe a rebate model is not the appropriate process to address these concerns. Instead, stakeholders should continue to advocate for Congress to renew their review and revisions to the SUSTAIN Act, which contemplated a neutral clearing house for claims to address some of the concerns posed by manufacturers. Additionally, we have yet to see manufacturers advocate for HRSAs budget to be increased, which would allow them, among other things, to increase the number of Covered Entities audited each year. In our comments under the SUSTAIN Act, submitted April 1, 2024, we pointed out that it is common for HRSA to re-audit Covered Entities who have had previous findings, instead of auditing Covered Entities that have never been audited. A change in this area could also ensure that more programs are reviewed. In closing, BUH remains wholly against the implementation of a rebate model in any form. We again hope that HRSA considers our comments, along with those we submitted in September of 2025, and abandons testing or implementing a rebate model. Thank you for considering our comments. Sincerely, Christine Collins, MBA, RPh, FASHP Senior Vice President, Pharmacy and Perioperative Services
HRSA-2026-0001-1968AID Upstate2026-04-20T04:00Z19,138 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: AID Upstate Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: AID Upstate appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. AID Upstate is deeply concerned that the proposed 340B Rebate Model would jeopardize our ability to continue providing comprehensive HIV care to our patient population in Upstate South Carolina. As a Ryan White Part B sub-grantee, our federal funding alone is insufficient to support the full scope of medical and supportive services we currently provide to more than 1,500 individuals and families affected by HIV. Our 340B program is essential to sustaining these services. Our patient population is growing due to both new HIV diagnoses and in-migration to the region, which has already placed significant strain on our clinical capacity. The additional financial and administrative burden associated with implementing a rebate modelcombined with the risk of delayed or denied rebate payments would create serious cash flow challenges and could force us to scale back or potentially close our medical clinic. This would result in thousands of patients losing access to their medical home. The healthcare system in the Upstate is not equipped to absorb this level of displacement. Loss of access to care would disrupt treatment for people living with HIV, leading to decreased medication adherence, loss of viral suppression, and increased risk of HIV transmission. These outcomes would reverse significant public health gains and place additional strain on already limited regional healthcare resources. In summary, the proposed rebate model introduces financial uncertainty and administrative complexity that threaten the stability of safety-net providers like AID Upstate and, most importantly, the continuity of care for vulnerable patients. For AID Upstate, the rebate model does not represent a minor administrative changeit represents a fundamental threat to our ability to deliver care AID Upstate is a 501(c)(3) nonprofit organization providing comprehensive HIV medical care, prevention, and supportive services to individuals in Anderson, Greenville, Oconee, and Pickens Counties of South Carolina. Founded in 1987 in response to the HIV/AIDS epidemic, we are a Ryan White Part B sub- grantee through the South Carolina Department of Public Health and a recipient of CDC prevention funding. As a Ryan White-funded provider, AID Upstate qualifies for participation in the 340B Drug 2 Pricing Program. We use 340B program savings to support and expand access to care through our medical practice, which includes primary care and infectious disease services, medical case management, and an on-site contract pharmacy. These resources allow us to provide comprehensive, coordinated care to more than 1,500 individuals, as well as PrEP servicesincluding testing, clinical care, medications, and navigationfor individuals at risk of HIV. Prior to participation in the 340B program, our organization did not operate a medical clinic, and patients faced significant barriers to timely care. Today, 340B enables us to deliver accessible, high-quality services that improve health outcomes and reduce HIV transmission in our region. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. Payment timing under a rebate model would have a significant and immediate impact on AID Upstates cash flow. Under the current 340B structure, we receive upfront discounts at the time of purchase, which allows us to manage drug acquisition costs and reinvest savings into patient care. Under a rebate model, AID Upstate would be required to purchase medications at full cost and wait for reimbursement from manufacturers. Many HIV medications represent high-cost, ongoing therapies, and even short delays in rebate payments (e.g., 3090 days or longer) would require us to carry substantial unreimbursed drug costs. For an organization of our size, this creates a material cash flow burden. We do not maintain reserves sufficient to absorb prolonged delays or variability in rebate payments across multiple manufacturers. In addition, the administrative complexity of submitting, tracking, and reconciling rebates increases the likelihood of delayed or disputed payments, further exacerbating cash flow uncertainty. As a Ryan White Part B sub-grantee, our program income from 340B is essential to sustaining clinical services, medical case management, and patient support programs. Any 3 disruption or delay in accessing these funds would directly impact our ability to maintain operations and provide continuous care to our patients. In summary, the shift from an upfront discount to a retrospective rebate model introduces significant cash flow risk that could destabilize our operations and limit access to care for people living with HIV in our region. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Orders placed between the 1st and 15th are due on the 24th. Orders placed between the 16th and 31st are due on the 10th of the following month. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. None at this time State the average number of calendar days within which your organization typically remits payment under these contracts. 15 days Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. The current 340B model provides upfront discounts at the time of purchase, while a rebate model would require full payment followed by delayed reimbursement. This would shift payment timing from immediate and predictable (monthly) to delayed and variable, depending on manufacturer processing timelines, and would introduce significant cash flow uncertainty. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and managements costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. AID Upstate estimates that implementation of a rebate model would result in both high one-time (incremental) costs and ongoing operational costs. One-Time (Incremental) Costs: Estimated at $150,000 $300,000, including software acquisition and integration to support claims- level tracking and rebate processing, legal and compliance review, staff training, workflow 4 redesign, and system testing. Ongoing (Operational) Costs: Estimated at $175,000 $250,000 annually, including the cost of 1.01.5 additional FTEs with specialized 340B expertise, ongoing software licensing and maintenance, legal and compliance support, and additional staff time across departments for reconciliation, denial management, and audit readiness. These estimates reflect the transition from a prospective discount model to a retrospective, claims-based rebate system, which introduces sustained administrative complexity and financial burden. Describe the methodology and assumptions used for the estimates in the preceding question. AID Upstate developed these estimates based on current 340B program operations and projected changes under a rebate model. Assumptions include an estimated volume of 1,2002,000 340B-eligible claims per month and an average of 35 minutes per claim for submission, validation, and reconciliation, with additional time required for denials and dispute resolution. We assumed the need for 1.01.5 additional full-time staff with specialized 340B expertise, based on the increased workload associated with claim-level processing across multiple manufacturer platforms (estimated at 815 manufacturers). Staffing cost estimates reflect local market conditions in Greenville, South Carolina, including salary and benefits. Cost estimates for software, legal support, and training were based on anticipated system upgrades, data integration requirements, and ongoing compliance needs. Estimates also account for increased administrative complexity, including error rates, delayed payments, and cross-department coordination. All estimates are intended to be conservative and reflect a transition from a prospective discount model to a retrospective, claims-based rebate system. Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. The estimated costs would cover activities required to administer a claims-based rebate model, including claim-level rebate submission, eligibility verification, denial tracking and appeals, reconciliation of submitted claims to received payments, and management of multiple manufacturer-specific platforms. Additional activities include data integration and reporting, audit preparation, compliance monitoring, and coordination across finance, pharmacy partners, 5 and clinical staff to ensure accurate processing and prevent duplicate discounts. Compared to the current 340B model, which relies on upfront discounts and relatively streamlined administrative processes, these activities represent a significant expansion in both scope and complexity. As a result, administrative costs would increase substantially, requiring dedicated staffing, new systems, and ongoing legal and compliance support. Overall, the rebate model would shift 340B administration from a manageable operational function to a resource- intensive, continuous process, increasing administrative burden and diverting resources away from direct patient care. Comment on the impact of these incremental costs under your current operations. Under our current operations, these incremental costs would significantly undermine AID Upstates ability to sustain clinical services and patient support programs. As a Ryan White Part B sub- grantee, our core funding is insufficient to cover the full cost of care, and we rely on 340B program savings to subsidize our medical practice and comprehensive services. The additional staffing, systems, and compliance costs required under a rebate model would divert limited resources from direct patient care to administrative functions. AID Upstate does not have excess operating margin to absorb these new costs, and as a result, we would likely be forced to reduce services, limit patient access, or delay program expansion despite growing demand. In addition, the financial uncertainty associated with delayed or inconsistent rebate payments would further strain operations, making it more difficult to plan, budget, and maintain continuity of care. Overall, these incremental costs would undermine the sustainability of our current care model and reduce our capacity to serve people living with and at risk for HIV in our region. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. Implementing a rebate model would require both additional FTEs and the reallocation of existing staff time. AID Upstate estimates a need for approximately 1.01.5 additional FTEs dedicated to rebate submission, denial management, and reconciliation. In addition, existing staff across finance, pharmacy coordination, and clinical support functions would need to reallocate time to support data validation, issue resolution, and compliance requirements. This reallocation would 6 reduce the capacity of current staff to perform their primary roles, further increasing operational strain and administrative burden. If yes to the above, identify the anticipated number of additional FTEs. 1.0 1.5 additional FTEs, including one dedicated staff member for rebate administration and partial support from existing staff for reconciliation, denial management, and coordination activities. Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. Additional FTEs would be responsible for end-to- end rebate administration, including claim-level rebate submissions, eligibility verification, denial tracking and appeals, and reconciliation of submitted claims to received payments. Responsibilities would also include managing multiple manufacturer-specific platforms, maintaining documentation for compliance and audit readiness, generating reports, and coordinating with finance, pharmacy partners, and clinical staff to resolve discrepancies and prevent duplicate discounts. These positions would be permanent, as rebate submission, reconciliation, and dispute resolution are ongoing operational requirements under a claims-based rebate model, not limited to implementation or a pilot phase. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential Rebate Model Pilot. Implementing a rebate model would require new, significantly enhanced IT systems and data infrastructure. This includes upgrades to existing 340B split-billing systems or procurement of new platforms capable of claim-level tracking, rebate submission, and reconciliation. Additional requirements include data integration tools to aggregate and normalize information from the EHR, pharmacy systems, wholesalers, and third- party administrators; interfaces or processes to manage multiple manufacturer-specific platforms; and a centralized data repository or reporting system to track submissions, payments, denials, and outstanding rebates. Enhanced compliance and audit support capabilities would also be necessary to maintain documentation, ensure data integrity, and prevent duplicate discounts. Overall, current systems are designed for a prospective discount model and would require substantial modification or replacement to support a retrospective, claims-based rebate model. 7 Provide estimated costs for system development, procurement, maintenance, or integration, and specify whether any such costs would be one- time or recurring. One-Time (Development/Procurement/Integration): $85,000 $185,000 for software acquisition or upgrades, system configuration, and integration with EHR, pharmacy, and third-party systems. Ongoing (Maintenance/Licensing/Support): $25,000 $60,000 annually for software licensing, vendor support, system maintenance, and ongoing data management. Costs may vary based on the number of manufacturer platforms and the level of system integration required. Discretely identify any additional costs not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered) and specify whether these costs are one- time or recurring. Additional costs not captured above include cash flow financing costs associated with purchasing medications at full price and waiting for rebate reimbursement, particularly for high-cost HIV therapies. We also anticipate revenue loss or delays resulting from denied or disputed rebates, as well as increased administrative time to resolve these issues. Other costs include increased audit exposure and associated preparation costs, potential vendor or third-party administrator fees, and opportunity costs resulting from diversion of staff time away from patient care and program development. Collectively, these additional costs further increase the financial and operational burden of a rebate model beyond direct staffing and system expenses. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Greg Campbell, MPA, Chief Operations Officer, 864-250-0607 (ext. 6315). Sincerely, Gregory L Campbell Chief Operations Officer AID Upstate
HRSA-2026-0001-1969Katie Goodsell · United States2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1970Kokua Kalihi Valley2026-04-20T04:00Z7,669 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Kokua Kalihi Valley Comprehensive Family Services, KKV, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep- dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: KKV anticipates a loss of $500,000 from entity-owned pharmacy operations and a 10% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: KKV anticipates an increase of $200,000 in additional costs annually to manage the pilot. Projected Increase in Emergency Room Visits: KKV uninsured and underinsured patients rely on us to provide medications to treat their diabetes, hypertension, COPD, and other comorbid ailments. Without the 340B dollars, we will be unable to provide medications to treat these conditions, which will lead to an increase in untreated patients and higher rates of emergency room visits. Projected Upfront Drug Cost Increases: KKV anticipates an increase of $1.5 million in upfront drug costs. Projected Disruptions: KKV anticipates cash flow disruptions, financial instability, and reduced emergency preparedness. It will greatly impact non-revenue generated community programs, such as food access, transportation assistance, case management, and nutritional support programs. Kokua Kalihi Valley serves the 96819-zip code, a densely populated area that includes both urban and residential communities. Kalihi has the highest concentration of public housing complexes in the state of Hawaii. Within a half-mile radius of KKV are two of the states largest public housing facilities, The Towers of Kuhio (KPT) and Kalihi Valley Homes (KVH). Even closer, less than a third of a mile away, are Hauiki Homes and Kuhio Homes. More than 75% of families living in these communities fall below 100% of the Federal Poverty Level.KKV serves approximately 10,000 patients in the Kalihi community who are either uninsured or living at or below 200% of the Federal Poverty Level. In response to these needs, KKV has developed programs that extend beyond traditional healthcare. The organization stewards 100 acres of land in Kalihi Valley, using it to support patients through food access, education, and cultural healing. KKV also provides a wide range of services, including food distribution, legal assistance, medical supplies and equipment, case management, eligibility services, transportation, interpretation, programs for elders and youth, and urgent care. Without funding from the 340B program, KKV would not be able to sustain these comprehensive services that go beyond basic healthcare. KKV strongly urges HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. KKV has depended on the 340B program to purchase outpatient medications at significantly reduced prices which enabled our staff to provide affordable and free medications for our underinsured or uninsured patients. In 2025, KKV provided over 5000 prescriptions to over 4000 unique patients. Patients that qualified for our sliding fee discount program received medications at a significantly reduced cost or at no cost. The retail cost of these prescriptions without insurance exceeds $1,000,000 dollars. KKV currently spends about $200,000 yearly on administrative costs to maintain the 340B program. If a health center like KKV is unable to use 340B discounts to offset the cost of caring for underinsured or uninsured patients, many of those individuals will be forced to seek care elsewhere, often turning to emergency rooms. The rebate model would also affect KKVs sliding fee discount program, which is available to all qualifying patients. The program enables underinsured and uninsured individuals to access medical care at little to no cost, with prescription fees typically ranging from $0 to $10. The upfront discount is critical in allowing the health center to provide medications to these patients. If a rebate model were implemented instead, it would remove a significant number of drugs from the current sliding fee programcutting off what is, for many patients, their only reliable access to needed medications. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. The upfront discount is essential for KKV to provide medications and services to underinsured and uninsured patients. Without it, KKV would be unable to sustain the rising cost of drug prices while waiting for rebates. Managing a rebate system would also require additional staff, increasing the programs operational costs by approximately $50,000 annually. Without a corresponding increase in revenue, these added expenses would likely result in reduced services or fewer patients being served at KKV. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Many of the drugs selected for MDPNP for 2026 and 2027, which are included in the proposed rebate model, are used to manage chronic conditions prevalent in our primary care setting, meaning our patient will be disproportionately affected. KKV had a higher patient panel with chronic conditions compared to private practices. Our patient population relies on affordable medications to manage these long- term conditions. KKV strongly urges HRSA to exempt CHCs from any 340B Rebate Model Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. KKV believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. KKV appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brandy Shima, bshima@kkv.net Sincerely, David Derauf, CEO Kokua Kalihi Valley Comprehensive Family Services.
HRSA-2026-0001-1971Matthew 25 AIDS Services, Inc.2026-04-20T04:00Z21,892 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Matthew 25 AIDS Services, Inc. Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Matthew 25 AIDS Services, Inc. appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. The proposed 340B rebate model raises significant concerns related to patient harm, financial sustainability, and administrative burden. Under this model, our organization would be required to purchase medications at full wholesale acquisition cost and wait extended periodsoften 60 days or morefor reimbursement. This creates a substantial financing gap, requiring us to front nearly $1 million per month in drug costs, which is not sustainable given our current resources. 340B drug pricing program savings are critical to our operations and are reinvested directly into patient care, including medication access and essential support services such as transportation, care coordination, and outreach. Delays or reductions in these savings would force difficult decisions about reducing services, particularly in a rural setting where patients already face significant barriers to care. This would increase the risk of treatment interruptions, loss of viral suppression, and worsening health outcomes. In addition, the rebate model introduces a significant and ongoing administrative burden. Based on our current experience with Medicare rebate processes, managing claims across multiple manufacturer platforms, resolving frequent errors, and tracking and reconciling payments requires substantial staff timefar exceeding federal estimates. This burden would require additional staffing and divert resources away from direct patient care. Overall, the rebate model shifts financial risk and administrative complexity onto covered entities without improving patient care and poses a direct threat to the sustainability of services supported by 340B drug pricing program savings. Matthew 25 Clinic is a nonprofit healthcare provider serving individuals living with HIV as well as patients in need of STD testing, treatment, and prevention services in a largely rural region. As a Ryan Whitefunded program and safety-net provider, the clinic qualifies for the 340B Drug Pricing Program and uses 340B drug pricing program savings to expand access to medications and comprehensive care for low-income, uninsured, and underinsured patients. These savings are reinvested directly into patient services, including medication access, case management, transportation assistance, mental health 2 services, and outreach, enabling the clinic to deliver integrated, patient-centered care and maintain strong health outcomes, including high rates of viral suppression. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. A rebate model would create immediate and significant risks to patient access to medications, particularly for individuals living with HIV and those seeking STI testing and treatment who rely on uninterrupted access to medications to maintain viral suppression and prevent transmission. Our patient population is largely low income, uninsured, and underinsured, and many live in rural areas where access to 3 healthcare services and pharmacies is already limited. Under a rebate model, delayed reimbursement and increased financial strain would directly impact our ability to consistently purchase high cost medications. This creates a real risk of treatment interruptions. Unlike the current model where 340B discounts are applied upfront, the rebate model forces organizations to absorb substantial costs and wait for repayment, which is not sustainable. 340B drug pricing program savings are reinvested directly into services that make medication access possible, including transportation assistance, medication shipping, case management, and outreach. Any delay or reduction in these savings would immediately limit our ability to provide these supports. For our rural patients, even small disruptions in transportation or medication delivery can prevent access to care entirely. Without these supports, patients are more likely to miss doses, fall out of care, and experience interruptions in treatment. This would lead to loss of viral suppression, worsening health outcomes, and increased risk of transmission. The rebate model does not just introduce administrative complexity. It creates direct and avoidable harm to patients by undermining the systems that ensure they can access and stay on life saving medications. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. Payment timing under a rebate model would have a significant and immediate impact on our cash flow. Under the current model, we benefit from upfront 340B discounts at the time of purchase. Under a rebate model, we would be required to pay wholesale acquisition cost upfront and wait for reimbursement, which may take 60 days or longer, particularly when disputes occur. This creates a financing gap of approximately 80 to 85 days and requires us to front approximately $984,000 per month in drug 4 costs. Based on our current reserves, we would need to cover approximately $1.97 million over a two month period before reimbursement is received. This level of financial exposure is not sustainable and would directly affect our ability to maintain medication access and services supported by 340B drug pricing program savings. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Our organization operates under Net 10 payment terms for drug purchases, meaning payment is due within 10 days of invoice. These terms are consistent across both 340B and non 340B drugs. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our organization does not receive prompt payment discounts from our wholesaler. State the average number of calendar days within which your organization typically remits payment under these contracts. Our organization typically remits payment within 10 calendar days of receiving an invoice, in alignment with our Net 10 contract terms. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. A rebate based payment model would significantly alter payment timing compared to current arrangements. Under the current model, 340B discounts are applied at the point of purchase. Under a rebate model, we would pay full price upfront and wait for reimbursement after claims are submitted and processed. This creates a prolonged delay between payment and reimbursement and introduces ongoing financial strain. Given our existing payment obligations to wholesalers, this misalignment in timing would require us to absorb substantial costs for extended periods and would affect the stability of services supported by 340B drug pricing program savings. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and management costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate We estimate one time startup costs of approximately $75,000 to $150,000 to implement 5 Model Pilot, distinguishing between one-time startup costs and ongoing costs. systems, train staff, and establish workflows required under a rebate model. Ongoing annual incremental costs are estimated at approximately $100,000 to $250,000, including staffing, software, compliance, and administrative activities required to manage rebate submissions, tracking, reconciliation, and dispute resolution. These costs represent a significant burden and would divert 340B drug pricing program savings away from direct patient care and essential services. Describe the methodology and assumptions used for the estimates in the preceding question. These estimates are based on anticipated claim volume and the time required for manual claim submission, tracking, reconciliation, and dispute resolution. We estimate approximately 15 to 25 minutes of staff time per claim, in addition to substantial time required for post submission activities. Assumptions include involvement from pharmacy, finance, and administrative staff and the need to manage multiple manufacturer platforms. Additional time is required for financial processes such as bank reconciliation, accounts receivable tracking, general ledger tracking, and audit preparation. These estimates are informed by our current operational experience with rebate processes, which involve significant ongoing effort beyond initial claim submission. Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. These costs would cover the following new administrative activities required under a rebate model: Claim submission to individual manufacturers, Denial tracking and appeals management, Ongoing claim follow up and resubmissions, Managing multiple manufacturer portals and requirements, Audit support and compliance documentation, Bank deposit tracking and reconciliation of rebate payments, Accounts receivable tracking for outstanding rebates, and General ledger tracking and financial reporting. These activities represent a significant expansion of administrative workload compared to the current model, where 340B discounts are applied at the point of purchase and do not require post purchase rebate reconciliation. Comment on the impact of these incremental costs under your current operations. These incremental costs would place substantial strain on our current operations. As a lean nonprofit organization, we rely heavily on 340B drug pricing program savings to support both medication access and essential patient services. Increased administrative workload and delayed 6 reimbursement would divert staff time and financial resources away from direct patient care. This would reduce our ability to provide services such as transportation assistance, medication shipping, case management, and outreach. For our rural patient population, these services are essential to accessing care. Any reduction would create immediate barriers to medication access and increase the risk of treatment interruptions. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. Yes, implementation of a rebate model would require both additional staffing and reallocation of existing staff time. If yes to the above, identify the anticipated number of additional FTEs. We estimate the need for approximately 1.5 additional full time equivalent staff member to manage rebate related activities. Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. This role would be responsible for claim submission, denial tracking, appeals management, reconciliation, and ongoing communication with manufacturers. Due to the ongoing nature and volume of these activities, this position would be permanent. In addition, existing pharmacy and finance staff would need to redirect significant time to support administrative tasks, reducing time available for patient care and core operations. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential Rebate Model Pilot. Implementation of a rebate model would require new or enhanced systems to track claims, manage rebate submissions, and reconcile payments across multiple manufacturer platforms. While some data can be extracted from our pharmacy system, data required for tracking, reconciliation, and dispute resolution is not centralized. Current processes rely on manual tools that are not scalable. Additional systems or workflow tools would be required to manage data across multiple platforms and ensure accurate tracking and reporting. Provide estimated costs for system development, procurement, maintenance, or integration, and specify whether any such costs would be one- time or recurring. We estimate approximately $10,000 in one time implementation costs for system setup or enhancements, with additional ongoing costs for maintenance, licensing, or workflow tools as needed. Discretely identify any additional costs not otherwise captured above (e.g., legal review, training, consulting services, reduction in services Additional costs include approximately $20,000 annually for legal and consulting support and $10,000 annually for staff training. These costs are recurring and necessary to maintain 7 offered) and specify whether these costs are one- time or recurring. compliance and manage ongoing administrative requirements. There are also indirect costs associated with reduced patient services resulting from diversion of 340B drug pricing program savings, particularly in areas such as transportation assistance, medication delivery, and care coordination. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. In our experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems and challenges, which is why we need a neutral clearinghouse run by the federal government or a contractor. Our experience with manufacturer driven rebate processes highlights significant operational challenges that would be amplified under a broader rebate model. We have encountered frequent inaccuracies in manufacturer claim determinations that require time consuming follow up and dispute resolution. Payment delays are common, with some claims remaining unresolved for extended periods. Each delay increases financial strain and requires additional staff time. The process requires use of multiple manufacturer specific platforms to submit, track, reconcile, and dispute claims, with no centralized system. This fragmentation increases administrative complexity and creates inefficiencies in tracking and reconciliation. A neutral clearinghouse model would provide a standardized and centralized approach to claim submission, validation, and reconciliation. This would reduce administrative burden, improve efficiency, and support more timely and accurate reimbursement without shifting additional financial and operational risk onto covered entities. 8 * * * We appreciate HRSAs consideration of our comments. For further information, please contact Courtney Woolfork, Chief Executive Officer, 270-826-0200. Sincerely, Courtney Woolfork Chief Executive Officer Matthew 25 AIDS Services, Inc.
HRSA-2026-0001-1972Saint Joseph London2026-04-20T04:00Z6,865 chars
Please see attached letters from President John Yanes for Saint Joseph Berea and Saint Joseph London. Thank you! CommonSpint " April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Joseph Berea, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Established on the grounds of Berea College in 1898, Saint Joseph Berea is a not-for-profit, faith-based hospital. As a 25-bed critical access facility serving families in Madison, Estill, Jackson, Rockcastle and Garrard Counties, we recognize the importance of family, friends and familiar surroundings in the healing process. At Saint Joseph Berea, we provide comprehensive 24/7 Emergency Care, Heart and Vascular Care, Outpatient Infusion Services, a Senior Renewal Center and many additional service lines in our patients' home community. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Joseph Berea that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Saint Joseph Berea relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340B program is crucial to the health of our community. We use our 340B savings to provide cardiovascular heart health screenings and educational material to people in Berea, Richmond and surrounding rural communities. The 340B Program helps offset uncompensated care and charity provided to the community. Without the program, keeping our doors open would become a significant challenge. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. CommonSpirit As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org. /)1 nes P sident St Joseph Berea Saint Joseph Berea Berea, KY Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely,
HRSA-2026-0001-1973FirstHealth of the Carolinas, Inc.2026-04-20T04:00Z18,597 chars
See attached file(s) Submitted electronically to: Federal eRulemaking Portal: https://www.regulations.gov RE: Comments on: Request for Information: 340B Rebate Model Pilot Program Dear: Mr. Thomas J. Engels, Administrator of the Health Resources and Services Administration (HRSA) FirstHealth of the Carolinas, Inc. FirstHealth is a nationally recognized health system headquartered in Pinehurst, N.C. Its more than 6,600 employees serve 15 rural counties in the mid-Carolinas. Licensed for four hospitals with 546 beds, the health system offers specialty and subspecialty care and technologies that are typically exclusive to academic institutions in larger metropolitan areas. The system includes facilities for inpatient and outpatient rehabilitation, hospice, a palliative care program, home care, community outreach programs, behavioral health services, fitness facilities, primary and convenient care practices, a hospitality house, EMS and critical care transport services and a host of other services. FirstHealth demonstrates a commitment to treating the whole patient and improving the health of the communities it serves. FirstHealth of the Carolinas operates two covered entities: (1) FirstHealth (340B ID RRC: 340115) and (2) FirstHealth Montgomery Memorial Hospital (340B ID CAH: 341303). On behalf of FirstHealth, we are thankful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program. In short, we believe it is a bad idea that will enable drug companies to further bury covered entities with unnecessary administrative paperwork. As explained below, any rebate mechanism will impose enormous costs and burdens on FirstHealth that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA should prioritize the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism which FirstHealth has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI encourages commenters to include supporting facts, research, and evidence in their responses. FirstHealth has done its best to provide answers. For purposes of estimating costs, we previously projected impact by including only the ten drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, the expense and complexity will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that FirstHealth can spend on patient care and comprehensive health care services. The proposed rebate model will generate substantial burdens for our rural health system and [paradoxically] prevent patients from accessing low-cost medications. Our operational concerns are three-fold: patient care disruption, hospital financial hardship, and new administrative burden, in the event HRSAs proposal decides to include rural hospital types, such as Rural Referral Centers (RRC) and Critical Access Hospitals (CAH). Patient Care Disruption Our service areas population includes some of the poorest counties in North Carolina. Almost a quarter of our served population lives under the federal poverty level and a majority are also uninsured. Implementing a 340B rebate will lead to damage on so many levels. In the event of a rebate pilot, because the covered entity cannot ensure that a rebate will be paid or what 340B quarterly price will be used for its basis, the hospital may not be able to effectively float a zero- interest loan to the drug companies for patients receiving either free or 340B pass-through pricing, which we presently provide, undermining our ability to efficiently address patients with acute discharge and medication access needs. Hospital Financial Hardship FirstHealth, like most rural hospitals, operates on an extremely tight margin. The impact of a rebate model on cash flow cannot be understated. Based on the prior pilots proposed framework, we estimate that the removal of up-front discounts for the medication list proposed will increase our up-front expense by two million dollars per year. As RRC and CAH rural hospital types, our covered entities also do not presently purchase medications at WAC, meaning loss of even GPO pricing up-front as in our mixed-use replenishment model as rural hospitals are not subject to the GPO prohibition and have never been required to purchase outpatient medications at WAC pricing. We anticipate lengthy delays with the proposed rebate program due to three factors: 1) time between WAC purchase and dispense date, as we must hold these medications in inventory, potentially for long periods in anticipation of dispensation, 2) dispensations in less than full package size will result in a rebate only for that fraction of the purchase unit, leaving the remainder in inventory, and 3) submission of rebate request and processing by manufacturers for an additional ten days post dispensation. New Administrative Burden and Expense In addition to ongoing compliance measures, we estimate that a pilot program, if structured like the previously proposed program, will cost an additional $300,000/year in staffing (if extended to 17 MDPNP drugs) and $35,000/year in additional third-party administrator fees. The additional staffing estimate is based on four FTE employees required for data submission, validation, and reconciliation of any rebate payments with rebate claims. Re: Medical Claims - We cannot export the proposed data for medical claims from our hospital mixed-use computer systems, partially because it does not exist (specifically BIN and PCN, which are only tied to a pharmacy benefit and therefore do not reside in our electronic medical record). Also, our electronic medical record does not have the ability to record or maintain invoice data (date, price, etc.) for medications because these records are not tied to specific purchases or invoices, rather they are built for patient medication management. Therefore, medical claims data submission will become a new and burdensome manual process. Furthermore, based on our recent experience with MDPNP drugs thus far in 2026, under the manufacturer-paid refund model, manufacturers are inappropriately denying refunds and are instead burying covered entities with good faith inquiries (GFI) that are extremely time consuming. Extrapolating this experience to a rebate model with 2027 drugs added, our small health-system could easily expect to need a full-time employee solely to field these wasteful inquiries. Data Collection by Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. FirstHealth presently utilizes a single contract pharmacy, refers an extremely low volume of prescriptions to that contract pharmacy, and forgoes any prescriptions subjected by manufacturers to the 340B ESP platform due to its burdensome nature. Other Mechanisms to Avoid 340B/MDPNP Duplicate Discounts The proposed pilot project is a solution in search of a problem, as there are other mechanisms to avoid 340B/MDPNP duplicate discounts, such as a neutral third-party clearing house rather than one where the manufacturer dictates the relationship and makes final determination on rebate. PhRMA companies have never demonstrated systemic problems with duplicate discounts in Medicaid, rather OPA findings tend to point more commonly to variation in the application of processes between the various state Medicaid agencies and typographical errors in the Medicaid Exclusion File. Recommendations for the Pilot 1. FirstHealth requests that HRSA exclude rural hospital types, such as FirstHealths rural Referral Center (RRC) and Critical Access Hospital (CAH), from the proposed pilot project due to their extremely thin operating margins and risk of losing a sole service provider. Rural hospital types (RRC, CAH, SCH) also do not purchase outpatient medications at WAC because they lack the GPO prohibition stipulation. 2. Substantially curtail the scope of any pilot to 3-5 medications max for affected covered entities. 3. Exclude mixed-use medical claims to remove unnecessary complexity in the pilot and reduce administrative burden. Kind regards, M. Wesley Cowell, PharmD, Executive Director of Pharmacy, FirstHealth of the Carolinas, Pinehurst, NC Submitted electronically to: Federal eRulemaking Portal: https://www.regulations.gov RE: Comments on: Request for Information: 340B Rebate Model Pilot Program Dear: Mr. Thomas J. Engels, Administrator of the Health Resources and Services Administration (HRSA) FirstHealth of the Carolinas, Inc. FirstHealth is a nationally recognized health system headquartered in Pinehurst, N.C. Its more than 6,600 employees serve 15 rural counties in the mid-Carolinas. Licensed for four hospitals with 546 beds, the health system offers specialty and subspecialty care and technologies that are typically exclusive to academic institutions in larger metropolitan areas. The system includes facilities for inpatient and outpatient rehabilitation, hospice, a palliative care program, home care, community outreach programs, behavioral health services, fitness facilities, primary and convenient care practices, a hospitality house, EMS and critical care transport services and a host of other services. FirstHealth demonstrates a commitment to treating the whole patient and improving the health of the communities it serves. FirstHealth of the Carolinas operates two covered entities: (1) FirstHealth (340B ID RRC: 340115) and (2) FirstHealth Montgomery Memorial Hospital (340B ID CAH: 341303). On behalf of FirstHealth, we are thankful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program. In short, we believe it is a bad idea that will enable drug companies to further bury covered entities with unnecessary administrative paperwork. As explained below, any rebate mechanism will impose enormous costs and burdens on FirstHealth that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSA should prioritize the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism which FirstHealth has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI encourages commenters to include supporting facts, research, and evidence in their responses. FirstHealth has done its best to provide answers. For purposes of estimating costs, we previously projected impact by including only the ten drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, the expense and complexity will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that FirstHealth can spend on patient care and comprehensive health care services. The proposed rebate model will generate substantial burdens for our rural health system and [paradoxically] prevent patients from accessing low-cost medications. Our operational concerns are three-fold: patient care disruption, hospital financial hardship, and new administrative burden, in the event HRSAs proposal decides to include rural hospital types, such as Rural Referral Centers (RRC) and Critical Access Hospitals (CAH). Patient Care Disruption Our service areas population includes some of the poorest counties in North Carolina. Almost a quarter of our served population lives under the federal poverty level and a majority are also uninsured. Implementing a 340B rebate will lead to damage on so many levels. In the event of a rebate pilot, because the covered entity cannot ensure that a rebate will be paid or what 340B quarterly price will be used for its basis, the hospital may not be able to effectively float a zero-interest loan to the drug companies for patients receiving either free or 340B pass-through pricing, which we presently provide, undermining our ability to efficiently address patients with acute discharge and medication access needs. Hospital Financial Hardship FirstHealth, like most rural hospitals, operates on an extremely tight margin. The impact of a rebate model on cash flow cannot be understated. Based on the prior pilots proposed framework, we estimate that the removal of up-front discounts for the medication list proposed will increase our up-front expense by two million dollars per year. As RRC and CAH rural hospital types, our covered entities also do not presently purchase medications at WAC, meaning loss of even GPO pricing up-front as in our mixed-use replenishment model as rural hospitals are not subject to the GPO prohibition and have never been required to purchase outpatient medications at WAC pricing. We anticipate lengthy delays with the proposed rebate program due to three factors: 1) time between WAC purchase and dispense date, as we must hold these medications in inventory, potentially for long periods in anticipation of dispensation, 2) dispensations in less than full package size will result in a rebate only for that fraction of the purchase unit, leaving the remainder in inventory, and 3) submission of rebate request and processing by manufacturers for an additional ten days post dispensation. New Administrative Burden and Expense In addition to ongoing compliance measures, we estimate that a pilot program, if structured like the previously proposed program, will cost an additional $300,000/year in staffing (if extended to 17 MDPNP drugs) and $35,000/year in additional third-party administrator fees. The additional staffing estimate is based on four FTE employees required for data submission, validation, and reconciliation of any rebate payments with rebate claims. Re: Medical Claims - We cannot export the proposed data for medical claims from our hospital mixed-use computer systems, partially because it does not exist (specifically BIN and PCN, which are only tied to a pharmacy benefit and therefore do not reside in our electronic medical record). Also, our electronic medical record does not have the ability to record or maintain invoice data (date, price, etc.) for medications because these records are not tied to specific purchases or invoices, rather they are built for patient medication management. Therefore, medical claims data submission will become a new and burdensome manual process. Furthermore, based on our recent experience with MDPNP drugs thus far in 2026, under the manufacturer-paid refund model, manufacturers are inappropriately denying refunds and are instead burying covered entities with good faith inquiries (GFI) that are extremely time consuming. Extrapolating this experience to a rebate model with 2027 drugs added, our small health-system could easily expect to need a full-time employee solely to field these wasteful inquiries. Data Collection by Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. FirstHealth presently utilizes a single contract pharmacy, refers an extremely low volume of prescriptions to that contract pharmacy, and forgoes any prescriptions subjected by manufacturers to the 340B ESP platform due to its burdensome nature. Other Mechanisms to Avoid 340B/MDPNP Duplicate Discounts The proposed pilot project is a solution in search of a problem, as there are other mechanisms to avoid 340B/MDPNP duplicate discounts, such as a neutral third-party clearing house rather than one where the manufacturer dictates the relationship and makes final determination on rebate. PhRMA companies have never demonstrated systemic problems with duplicate discounts in Medicaid, rather OPA findings tend to point more commonly to variation in the application of processes between the various state Medicaid agencies and typographical errors in the Medicaid Exclusion File. Recommendations for the Pilot FirstHealth requests that HRSA exclude rural hospital types, such as FirstHealths rural Referral Center (RRC) and Critical Access Hospital (CAH), from the proposed pilot project due to their extremely thin operating margins and risk of losing a sole service provider. Rural hospital types (RRC, CAH, SCH) also do not purchase outpatient medications at WAC because they lack the GPO prohibition stipulation. Substantially curtail the scope of any pilot to 3-5 medications max for affected covered entities. Exclude mixed-use medical claims to remove unnecessary complexity in the pilot and reduce administrative burden. Kind regards, M. Wesley Cowell, PharmD, Executive Director of Pharmacy, FirstHealth of the Carolinas, Pinehurst, NC
HRSA-2026-0001-1974Shelly Golden2026-04-20T04:00Z39,460 chars
Attached is the response for Amery Regional Medical Center, CAH521308, to HRSA's RFI for 340B rebate model. Amery Hospital & Clinic 265 Griffin Street East Amery, WI 54001 715-268-8000 healthpartners.com Our mission is to improve health and well-being in partnership with our members, patients and community. April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Amery Regional Medical Center (Amery), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Amery and other Covered Entities. As a 340B-participating hospital, Amery is a core component of the healthcare safety net in Amery, WI and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Amery participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Amerys 340B Program participation enables us to commit an additional $6 million dollars per year to the Amery community safety net population we serve. Amery also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving April 20, 2026 Page 2 policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Amery wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Amery submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH AMERYS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Amery and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Amery when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR AMERY TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Amery. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, the contract-pharmacy-related restrictions impact on our total 340B savings is approximately 33% annually. Amery has also been forced to terminate several contract pharmacy relationships further reducing our overall 340B value. This directly limits the extent to which we can support our community. Yet, somehow, this isnt enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patients protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Amery pharmacy, manufacturers such as Boehringer Ingelheim, Bristol Myers Squibb, and Novo Nordisk have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Amerys purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Amery trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO AMERY TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Amery would be harmed if it did 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Amery has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 6. WHAT STATUTE OR REGULATION PERMITS AMERY TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE AMERYS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF AMERY? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE AMERY FOR THE VALUE OF ITS DATA? One of Amerys principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Amery for that value? Isnt this the exact harm the Takings Clause prohibits? 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Amery believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Amery urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Amerys perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Amerys patient population, we serve many other patients, including patients with no coverage at all. Requiring Amery to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price April 20, 2026 Page 8 Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO AMERY? IF NOT, WHY NOT? As noted above, Amery firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Amery continues to experience manufacturer restrictions on 340B pricing for our contract pharmacies. A significant challenge we face is manufacturers continuous changes to their contract pharmacy policies. Manufacturers are often not transparent with these changes nor do they communicate them to us timely. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Amery urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON AMERY? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Amery to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what April 20, 2026 Page 9 HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Amery has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Amery is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 10 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Amery hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Amery encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Amery maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Amery has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Amery partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Amery utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Amery to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Amery is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, the time and resources needed (personnel and financial) are difficult to estimate. We know for April 20, 2026 Page 12 certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Amery purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Amery could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Amery will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Amery would be required to generate new claims-level datasets for submission to manufacturers or third-party April 20, 2026 Page 13 platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Amerys operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Amery and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Steven Massey, President, Amery Regional Medical Center April 20, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-1975Southeast Missouri Health Network2026-04-20T04:00Z10,323 chars
See attached file(s) Corporate Office 6738 Highway 77 Benton, MO 63736 573-313-2500 www.semohealthnetwork.org April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Thank you for the opportunity to comment on the 340B Rebate Model Pilot Program. Im writing on behalf of Southeast Missouri Health Network, a federally qualified health center operating clinics in eight locations, with our headquarters in Benton, Missouri. Weve been a 340B participant since January 2005, which puts us at twenty-one years of experience with the program, and over that time the savings it has generated have become deeply embedded in how we care for the 16,808 patients who come to us each year. Ill try to keep this direct. Weve done our best to work through what a rebate model would look like in our operating environment, and the short answer is that it doesnt work not financially, not operationally, and not for our patients. The rest of this letter walks through the specifics. The numbers were looking at Our current 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is approximately $890,000 per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is nearly $6 million per year. Thats a roughly $5 million annual working capital requirement SEMO would need to float to manufacturers every year the rebate mechanism operated. For a federally qualified health center of our scale, thats not a minor cash management adjustment. Its a recurring demand that our balance sheet isnt built to carry. The MFP drug list represents 33.5% of our total 340B program a third of every 340B dollar we work with. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary and we assume it would be the annual working capital requirement grows to nearly $9 million. No community bank in southeastern Missouri is going to extend a line of credit Corporate Office 6738 Highway 77 Benton, MO 63736 573-313-2500 www.semohealthnetwork.org at that scale against the promise of manufacturer reimbursement on claims that may be disputed. Especially considering these are the same manufacturers that have pushed unilateral restrictions on us for the past five years, limiting our access to 340B drugs at our contract pharmacies, and now they are attacking even further our access to 340B drugs at our own clinical sites. Now, we are supposed to trust these same manufacturers to fairly administer a 340B rebate mechanism for those same locations? On top of all of that, Based on the first quarter of 2026, the Medicare Drug Price Negotiation Program is projected to compress our net 340B savings on affected products by approximately 12%. That compression is already baked into our 2026 projections. A rebate-model cash demand would land on top of an already-reduced savings stream. Where the rebate model breaks down in practice Two problems surfaced during our preparation for the planned 2026 pilot, and more preparation time wont solve either of them. First, wholesaler credit capacity. Our wholesaler credit limits were set based on 340B acquisition pricing, not Wholesale Acquisition Cost. In the weeks before the planned start, our wholesalers were clear with us: they werent in a position to extend the credit required to operate our 340B accounts at WAC. When credit gets exceeded, orders get held. When orders get held, replenishment stops, and the 340B program stops with it. If HRSAs goal is to severely hamper the 340B program, aligning with the clear goal the manufacturers have worked toward over the last few years, then proceeding with this rebate model would certainly achieve just that. This operational hurdle alone should be enough to prevent HRSA from even attempting a pilot of 340B as a rebate. Second, reconciliation infrastructure. Our team reviewed the third-party vendor interface manufacturers chose for rebate adjudication, and the data and reporting available through that interface werent adequate to support reliable reconciliation. The vendor cited HIPAA compliance as the reason for not retaining prescription numbers on claims but a vendor entrusted with this function should meet the security requirements necessary to retain and report Rx numbers to the people using the system. Without that claim-level detail, we cant match a denial back to a specific dispense, and we cant close the cash loop on the transaction. Applied to our current MFP volume, a five percent denial rate a reasonable planning assumption would put approximately $300,000 at risk in the first year of the pilot. What this would mean for our patients SEMO serves 16,808 patients. Eighty-five percent live at or below 200% of the federal poverty level, and fifty-five percent live at or below 100%. Fifty-three percent are on Medicaid one of the highest Medicaid shares were aware of among peer FQHCs. Fifty-five percent of our adult patients are managing hypertension, and twenty-seven percent are managing diabetes. In the most recent reporting period, we cared for 217 prenatal patients and managed 108 of them through delivery. These patients fill prescriptions on the MFP list at our contract pharmacy partners every day insulins, SGLT2 inhibitors, the everyday chronic-disease medications that make primary care work. Corporate Office 6738 Highway 77 Benton, MO 63736 573-313-2500 www.semohealthnetwork.org We operate exclusively through a contract pharmacy network. Our pharmacies dispense to our patients at the 340B price because the ceiling price is reflected in the acquisition cost at the time the prescription is filled. A rebate model changes that math. The entity acquires the drug at WAC, and the 340B benefit is reconciled after the fact. HRSA proposed an ad hoc ceiling price file to address this, and we appreciate the effort, but our third-party administrators werent in a position to operationalize that file in the few working days of lead time before the planned 2026 start. Three outcomes are possible and none are acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay, and SEMO floats the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. For the fifty-five percent of our adult patients with hypertension and the twenty-seven percent with diabetes, an interrupted prescription doesnt stay a small problem for long. It turns into a hospitalization, a stroke or heart attack, an amputation, or in the hardest cases, an early death. This also creates a direct conflict with Executive Order 14273, which instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it. A rebate model, by its architecture, cant deliver the 340B price at the point of sale. One policy cant satisfy both requirements. On staffing HRSAs Information Collection Request estimates the administrative burden of a rebate model at roughly five hours per week per covered entity. Thats not what our preparation work indicated. Based on our combined 20262027 MFP claims volume, we estimate wed need approximately 0.5 additional FTE a half-time position dedicated to rebate submission, denial management, reconciliation, and cash forecasting. Thats twenty hours a week, four times HRSAs estimate. Its a cost that doesnt exist in our budget today, and it would come out of the same pool of dollars that funds our clinical staff. A simpler way forward HRSA is working through a real problem. Deduplication between 340B and MFP is required, and were not disputing that a mechanism needs to exist. The question is whether the rebate model is the least burdensome way to accomplish that deduplication, and respectfully, we think it isnt. A neutral, federally administered 340B claims clearinghouse would accomplish the same objective without putting drug manufacturers in the role of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital, and without creating the patient access and compliance problems described above. CMS is already building the framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. A second option is already in use. Manufacturers already require 340B claims data from covered entities as a condition of 340B access. While I do not appreciate the requirements manufactuers have been allowed to impose on us, the reality is that they already have. That same data can support MFP/340B deduplication without standing up a parallel rebate adjudication infrastructure on top of it. One practical adjustment wed ask for: for new pharmacy accounts or accounts without claims Corporate Office 6738 Highway 77 Benton, MO 63736 573-313-2500 www.semohealthnetwork.org history at the time a data requirement is imposed, manufacturers should accept an attestation of compliance rather than withholding 340B access pending data that doesnt yet exist. Our request Southeast Missouri Health Network respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program, to exempt federally qualified health centers from any rebate mechanism that may follow, and to direct the deduplication question to the neutral clearinghouse framework already under development at CMS or to the manufacturer claims data mechanism already in place. Thank you for taking the time to read this and for considering the views of the FQHC community as you work through the comments. The 340B program has allowed organizations like SEMO Health Network to make a real difference for our patients over the past two decades, and were hoping HRSA will keep that mechanism intact. Sincerely, Chris Jones Chief Executive Officer Southeast Missouri Health Network Benton, Missouri 340B ID: CH071370
HRSA-2026-0001-1976Jihad Irani · Burgettstown, PA, United States2026-04-20T04:00Z50,140 chars
As Chief Medical Officer of Cornerstone Care, Inc., a nonprofit Community Health Center in Southwest PA, I am writing to express serious clinical concerns regarding the proposed 340B Rebate Model Pilot Program and its impact on patient access, continuity of care, and health outcomes. Many of the patients we serve are uninsured or underinsured and live with multiple chronic conditions, including diabetes, cardiovascular disease, chronic kidney disease, and serious mental illness. From a patientcare perspective, the proposed rebate model threatens the core safetynet role of community health centers by undermining consistent access to affordable medications that is essential to preventing disease progression, avoidable hospitalizations, and premature death. For these reasons, I strongly urge HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program. Preserving the upfront 340B discount is essential to maintaining uninterrupted access to lifesustaining medications and protecting the health of millions of vulnerable patients nationwide. Please see my attached letter for comments in full. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator, As Chief Medical Officer of Cornerstone Care, Inc., I am writing to express serious clinical concerns regarding the proposed 340B Rebate Model Pilot Program and its impact on patient access, continuity of care, and health outcomes. Cornerstone Care serves more than 23,000 patients annually across 14 fixed sites and three mobile units in rural and underserved communities. Many of the patients we serve are uninsured or underinsured and live with multiple chronic conditions, including diabetes, cardiovascular disease, chronic kidney disease, and serious mental illness. From a patient-care perspective, the proposed rebate model threatens the core safety-net role of community health centers by undermining consistent access to affordable medications that is essential to preventing disease progression, avoidable hospitalizations, and premature death. Key Clinical Impacts of a Rebate-Based Model: Loss of point-of-care certainty: The current 340B program allows clinicians to prescribe evidence-based therapies with confidence that patients can obtain and adhere to them. A rebate-based model would replace this certainty with instability by requiring health centers to purchase medications at full wholesale acquisition cost and wait for manufacturer rebates, introducing uncertainty precisely when treatment and affordability decisions must be made. Forced therapy interruption or substitution: Many drugs included in the proposed rebate model are foundational treatments in primary care, including anticoagulants, diabetes and heart-failure therapies, insulin, and medications used to stabilize serious mental illness. Disruptions in access increase the risk of adverse events, disease destabilization, and avoidable acute-care utilization. Compromised evidence-based care: When patients cannot afford first-line therapies, clinicians are forced to consider less effective or less safe alternatives. This erodes shared decision-making and undermines quality of care, with disproportionate impact in rural communities where alternative pharmacies or specialty providers are limited. 2 Harm to sliding-fee and zero-pay medication programs: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. For these reasons, I strongly urge HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program. Preserving the upfront 340B discount is essential to maintaining uninterrupted access to life-sustaining medications and protecting the health of millions of vulnerable patients nationwide. Thank you for the opportunity to provide this clinical perspective. Sincerely, Dr. Jihad Irani Chief Medical Officer 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 04.20.2026_CMO 340B Rebate Model Ltr Final Audit Report 2026-04-20 Created: 2026-04-20 By: Katie Sill (ksill@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAAjK86vR_zR9Q2A-WGioPDSoEC2sRodZIL "04.20.2026_CMO 340B Rebate Model Ltr" History Document created by Katie Sill (ksill@cornerstonecare.com) 2026-04-20 - 2:11:26 PM GMT Document emailed to Dr. Jihad Irani (jirani@cornerstonecare.com) for signature 2026-04-20 - 2:11:32 PM GMT Email viewed by Dr. Jihad Irani (jirani@cornerstonecare.com) 2026-04-20 - 5:37:22 PM GMT Document e-signed by Dr. Jihad Irani (jirani@cornerstonecare.com) Signature Date: 2026-04-20 - 5:37:48 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 5:37:48 PM GMT
HRSA-2026-0001-1977Shelly Golden2026-04-20T04:00Z38,173 chars
Attached is the response for Hudson Hospital, CAH521335, to HRSA's RFI for 340B rebate model. Hudson Hospital & Clinic 405 Stageline Road Hudson, WI 54016 715-531-6000 800-993-2325 (toll free) hudsonhospital.org Our mission is to improve health and well-being in partnership with our members, patients and community. April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Hudson Hospital (Hudson), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Hudson and other Covered Entities. As a 340B-participating hospital, Hudson is a core component of the healthcare safety net in Hudson, WI and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Hudson participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Hudsons 340B Program participation enables us to commit an additional $3 million dollars per year to the Hudson community safety net population we serve. Hudson also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self- serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent April 20, 2026 Page 2 legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Hudson wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Hudson submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH HUDSON S INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Hudson and other Covered Entities. 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Hudson when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR HUDSON TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Hudson. For example, manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patients protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Hudson pharmacy, manufacturers such as Bristol Myers Squibb and Novo Nordisk have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Hudsons purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Hudson trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO HUDSON TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Hudson would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Hudson has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS HUDSON TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine 9 42 U.S.C. 256b(a)(1). 10 See 45 C.F.R. 160.103. April 20, 2026 Page 6 whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE HUDSONS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF HUDSON? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE HUDSON FOR THE VALUE OF ITS DATA? One of Hudsons principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Hudson for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Hudson believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Hudson urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Hudsons perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Hudsons patient population, we serve many other patients, including patients with no coverage at all. Requiring Hudson to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO HUDSON? IF NOT, WHY NOT? As noted above, Hudson firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level April 20, 2026 Page 8 playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Hudson urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON HUDSON? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Hudson to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Hudson has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further 12 See 45 C.F.R. 164.501. April 20, 2026 Page 9 facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Hudson is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Hudson hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Hudson encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 10 our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Hudson maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Hudson has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Hudson partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Hudson utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. April 20, 2026 Page 11 c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Hudson to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Hudson is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, the time and resources needed (personnel and financial) are difficult to estimate. We know for certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Hudson purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Hudson could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating April 20, 2026 Page 12 on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Hudson will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Hudson would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Hudsons operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Hudson and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. April 20, 2026 Page 13 Best Regards, Steven Massey, President, Hudson Hospital April 20, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-1978Shelly Golden2026-04-20T04:00Z39,757 chars
Attached is the response for Westfields Hospital, CAH521345, to HRSA's RFI for 340B rebate model. Westfields Hospital & Clinic 535 Hospital Road New Richmond, WI 54017 715-243-2600 healthpartners.com Our mission is to improve health and well-being in partnership with our members, patients and community. April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Westfields Hospital (Westfields), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Westfields and other Covered Entities. As a 340B-participating hospital, Westfields is a core component of the healthcare safety net in New Richmond, WI and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Westfields participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Westfields 340B Program participation enables us to commit an additional $9 million dollars per year to the New Richmond community safety net population we serve. Westfields also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model April 20, 2026 Page 2 approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Westfields wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Westfields submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH WESTFIELDS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Westfields and other Covered Entities. 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Westfields when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR WESTFIELDS TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Westfields. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, the contract-pharmacy-related restrictions impact on our total 340B savings is approximately 16% annually. Westfields has also been forced to terminate several contract pharmacy relationships further reducing our overall 340B value. This directly limits the extent to which we can support our community. Yet, somehow, this isnt enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patients protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Westfields pharmacy, manufacturers such as AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Johnson & Johnson, Merck, and Novo Nordisk have denied our MDPNP refund requests 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of [COVERED ENTITY]s purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Westfields trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO WESTFIELDS TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Westfields would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Westfields has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 6. WHAT STATUTE OR REGULATION PERMITS WESTFIELDS TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE WESTFIELDS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF WESTFIELDS? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE WESTFIELDS FOR THE VALUE OF ITS DATA? One of Westfields principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Westfields for that value? Isnt this the exact harm the Takings Clause prohibits? 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Westfields believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Westfields urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Westfields perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Westfields patient population, we serve many other patients, including patients with no coverage at all. Requiring Westfields to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 20, 2026 Page 8 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO WESTFIELDS? IF NOT, WHY NOT? As noted above, Westfields firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Westfields continues to experience manufacturer restrictions on 340B pricing for our contract pharmacies. A significant challenge we face is manufacturers continuous changes to their contract pharmacy policies. Manufacturers are often not transparent with these changes nor do they communicate them to us timely. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Westfields urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON WESTFIELDS? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Westfieldsto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about April 20, 2026 Page 9 data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Westfields has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Westfields is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 10 manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Westfields hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Westfields encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Westfields maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Westfields has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Westfields partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Westfields utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Westfields to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Westfields is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, the time and resources needed (personnel and financial) are difficult to estimate. We know for April 20, 2026 Page 12 certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Westfields purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Westfields could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Westfields will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Westfields would be required to generate new claims-level datasets for submission to manufacturers or third- April 20, 2026 Page 13 party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Westfields operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Westfields and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Steven Massey, President, Westfields Hospital April 20, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-1979Council for Affordable Health Coverage2026-04-20T04:00Z9,157 chars
Please see the attached file April 20, 2026 Thomas J. Engels Administrators Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (Docket No. HRSA-2026- 03042) Submitted electronically to regulations.gov Dear Administrator Engels, Thank you for the opportunity to provide comments on the notice for the voluntary 340B Rebate Model Pilot Program for drugs. The Council for Affordable Health Coverage (CAHC, www.cahc.net) is a broad-based alliance with a singular focus: ensuring all Americans have access to affordable coverage. CAHC promotes policies that lower health costs through competition, transparency, empowered consumers, and expanded choice. CAHC has long supported reduced drug costs, greater access to drug therapies, and fostering innovation to help treat and cure disease. We applaud HRSA for exploring steps to improve the 340B program, including through a rebate model, and encourage HRSA to move away from a discount approach to facilitate lower cost drugs for patients and to better stretch resources for entities that serve low-income populations. In our September 2025 comment letter regarding the pilot, we highlighted concerns regarding the unchecked expansion of the 340B program, persistent rebate duplication, and the growing complexity caused by the Inflation Reduction Act (IRA). We build on those comments here and emphasize how a rebate-based model can address program inefficiencies, including misallocated resources, which are key drivers of higher costs for patients. The Unchecked Expansion of the 340B Program The 340B Drug Pricing Program has strayed far from its original purpose and is now a significant driver of market consolidation and higher health care costs. Since 2010, 340B drug purchases have grown more than sixfold, rising from roughly $7 billion to more than $81 billion annually. CAHC.net | 440 1st St. NW, Suite 430 | Washington, DC 20001 2 While intended to support safety-net providers, the program allows participating hospitals to purchase deeply discounted drugs and bill insurers and Medicare at full market rates, retaining the spread. These incentives have encouraged large nonprofit hospital systems to acquire physician practices and expand outpatient facilities to capture 340B margins, shifting care into higher-cost settings without demonstrable improvements in access for vulnerable patients. The Congressional Budget Office found that between 2013 and 2021, the number of off-site outpatient clinics participating in the 340B program increased from about 6,100 to 27,700, and the share of hospitals with at least one off-site outpatient clinic increased from 50 percent to 76 percent.1 CBO also found that this has resulted in disproportionate spending by 340B facilities on drugs in classes with higher spending growth and more revenue potential. CBO found that if 340B cancer drug spending had followed overall market growth, 2021 spending would have been 3.1 times 2010 levels. Instead, it rose to 8.6 times - from $2.1 billion to $18.1 billion.2 High-cost drugs represent about one-third of total 340B program spending. Even as coverage for the low-income population has greatly expanded, per capita charitable care has declined. In fact, data shows that as 340B hospitals buy more drugs at deep discounts, many are spending less on charity care, often prioritizing revenue for other purposes.3 In fact, in 47 states and D.C., more than half of the DSH hospitals in the 340B program earned more in 340B profit than they spent on charity care. In FY 2021, one-third of 340B DSH hospitals spent less than 1 percent of their operating expenses on charity care.4 Additionally, higher spending is not passed along in better benefits or lower costs to patients. In fact, 340B entities buy products at steeply discounted prices and mark them up significantly, causing patients to pay excessive cost-sharing that is sometimes more than an entitys acquisition cost. Because there is little accountability and data, very little is known about how entities use 340B discounts to benefit specific patients. What is known is that according to HRSAs audits, 49 percent of entities received adverse findings. This is a program in need of reform and greater oversight. A rebate-based model introduces a necessary structural correction. Basic transparency and program integrity require claims-level verification before a 340B discount is realized. A revised program that moves to a rebate approach would help achieve this goal by ensuring discounts are only applied to eligible claims. This shift would bring the program closer to standard practices across the healthcare system, where payment follows verification. Addressing Waste and Abuse to Improve Affordability A central advantage of a rebate-based 340B model is its ability to meaningfully address long- standing waste and abuse that drive higher costs throughout the health care system. Under the current upfront discount framework, manufacturers provide reduced prices before eligibility is confirmed. This lack of real-time verification has enabled documented problems, including diversion to ineligible patients, manipulation of claims to maximize revenue, and, most 1 Growth in the 340B Drug Pricing Program | Congressional Budget Office 2 Ibid 3 2023-Charity-Care-Report-Final-1.pdf 4 Ibid CAHC.net | 440 1st St. NW, Suite 430 | Washington, DC 20001 3 significantly, duplicate discounts across federal programs. Once an improper discount is applied, it is difficult to identify and even harder to recover, creating systemic inefficiencies that ultimately raise costs for patients, employers, and taxpayers. Requiring basic claims-level data before rebate payment offers a practical solution. A rebate- based verification model would: Confirm eligibility before a 340B benefit is realized Prevent duplicate discounts across overlapping programs Create a clear audit trail for oversight and enforcement Aligns the program with standard payment practices used in Medicare, Medicaid, and commercial insurance By addressing these sources of waste and abuse, the model can help reduce excess costs that are ultimately felt by patients through higher premiums, cost-sharing, and taxes. Preventing Duplicate Discounts in a Post-IRA Environment Duplicate discounts remain the most significant operational and compliance risk within the 340B program and are an issue that has been compounded by the Inflation Reduction Acts (IRA) drug pricing provisions. Without effective coordination, manufacturers may be required to provide multiple discounts on the same drug. The suggested pilot approach should include documentation, verification, and reporting requirements that can ensure a single prescription receives only one applicable discount. Leveraging standardized, claims-level data will not only reduce legal and financial risk for stakeholders but also create a scalable framework for long-term program integrity as additional IRA-selected drugs come into scope. Absent these guardrails, unauthorized duplicate discounts could reach billions of dollars annually, undermining both affordability and confidence in federal drug pricing programs. Maintaining Access While Improving Affordability It is essential to emphasize that a rebate model can strengthen program integrity without compromising patient access or imposing undue burden on legitimate safety-net providers. Patients would continue to receive medications without delays, and eligibility determinations would occur post-dispensing, consistent with existing billing and compliance workflows. Providers already collect the data required for verification as part of routine operations, minimizing administrative impact. In many cases, rebate reconciliation timelines can align with existing payment cycles, mitigating cash-flow concerns while improving accuracy. Conclusion CAHC supports HRSAs efforts to modernize the 340B program through a rebate-based approach. By improving transparency, strengthening oversight, and preventing duplicate and improper discounts, the pilot represents a meaningful step toward restoring program integrity. CAHC.net | 440 1st St. NW, Suite 430 | Washington, DC 20001 4 Most importantly, these reforms are essential to advancing affordability. When the 340B program operates without adequate safeguards, excess costs are passed on to patients, employers, and taxpayers. A rebate-based verification model helps ensure that program savings are appropriately targeted and that 340B functions as intended: to support vulnerable patients rather than fuel unnecessary spending. CAHC appreciates the opportunity to provide these comments and looks forward to continued engagement on policies that promote access, accountability, and affordability. Sincerely, Joel White President
HRSA-2026-0001-1980CommonSpirit Health2026-04-20T04:00Z5,989 chars
See attached letter April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Mercy Hospital Bakersfield, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Hospital Bakersfield that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Hospital Bakersfield relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The reduced spending on pharmaceuticals allows us to invest in our patients, staff , and community. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Simon Ratliff President and CEO Mercy Hospital Bakersfield Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-1981Big Springs Medical Association Inc. dba MO Highlands Health Care2026-04-20T04:00Z24,005 chars
See attached file(s) Big Springs Medical Association Missouri Highlands Health Care 110 South 2nd Street Ellington, MO 63638 Phone: (573) 663-2313 Fax: (573) 663-2441 Caring People...Quality Care April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Missouri Highlands Health Care respectfully submits these comments in response to the Health Resources and Services Administrations Request for Information on the 340B Rebate Model Pilot Program. Missouri Highlands is a federally qualified health center headquartered in Ellington, Missouri, serving a large patient population across southeastern Missouri. Missouri Highlands has participated in the 340B Drug Pricing Program since January 2004. Over the twenty-two years since, our pharmacy operations, our staffing, and our financial planning have been built around the upfront discount mechanism through which the 340B program has operated continuously. The proposed rebate model would require the reconstruction of those systems under conditions that our preparation for the 2026 pilot demonstrated to be operationally impracticable and financially untenable. A. Patient Population and Service Profile Missouri Highlands served 25,301 patients in the most recent reporting period. Ninety percent live at or below 200% of the federal poverty level, and forty-one percent live at or below 100%. Ten percent are uninsured. Forty-six percent are enrolled in Medicaid, and sixteen percent in Medicare. Thirty-four percent of our patients are children. Thirty-four percent of our visits involve enabling services case management, transportation, Big Springs Medical Association Missouri Highlands Health Care 110 South 2nd Street Ellington, MO 63638 Phone: (573) 663-2313 Fax: (573) 663-2441 outreach, and other supports that keep patients connected to care which is a distinctive element of our service profile. In the most recent reporting period, our clinical teams cared for 486 prenatal patients and managed 227 of them through delivery. Roughly thirty-six percent of our adult patients are managing hypertension and seventeen percent are managing diabetes. Many of the medications that treat these conditions are on the 2026 and 2027 MFP drug lists, and their uninterrupted affordability is integral to our clinical outcomes. B. Projected Financial Impact of the Rebate Model Our current 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is approximately $1.63 million per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $6.4 million per year. The difference, approximately $4.77 million, is the working capital Missouri Highlands would be required to float to manufacturers every year the rebate mechanism operated. That float is not a one-time implementation expense; it recurs annually for as long as the mechanism remains in place and compounds against our cash position until rebates are collected on manufacturer-controlled terms. The same manufacturers that have spent the last five years aggressively limiting our access to 340B drugs by implementing unilateral policies that flout state and federal law. The 2026 and 2027 MFP drug lists represent 32% of our total 340B program. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary the annual working capital requirement grows to nearly $10 million. Missouri Highlands does not maintain unfunded liquidity at that scale. No community bank in southeastern Missouri will extend a line of credit of that magnitude against the promise of manufacturer reimbursement on contested rebate claims. Separately, the Medicare Drug Price Negotiation Program has already reduced the revenue of our 340B program by 8% in the first quarter of 2026. That compression is already embedded in our 2026 operating projections. Adding rebate-model cash demands on top of an already-compressed savings stream is the specific policy choice HRSA is being asked to authorize. C. Wholesaler Credit Capacity and Reconciliation Infrastructure Two upstream problems surfaced during our preparation for the planned 2026 pilot, and each of them is structural rather than implementation-related. The first is wholesaler credit capacity. Our wholesaler credit limits were calibrated against 340B acquisition pricing, not WAC. In the weeks preceding the planned pilot start, our wholesalers informed us directly that they Big Springs Medical Association Missouri Highlands Health Care 110 South 2nd Street Ellington, MO 63638 Phone: (573) 663-2313 Fax: (573) 663-2441 were not prepared to extend the credit limits required to operate our 340B accounts at WAC. When credit limits are exceeded, 340B orders are held, 340b replenishment to contract pharmacies cease, and all cash flow associated with the 340B program comes to a screeching halt. Additional preparation time does not alter that reality; wholesalers are not positioned to underwrite the cash demand a rebate model would create in a supply chain built around acquisition-price credit terms. This one issue should be enough to prevent HRSA from further consideration of a 340B rebate pilot. The second is reconciliation infrastructure. Our operations and finance teams reviewed the third-party vendor interface manufacturers selected for rebate adjudication. The available data and reporting were not sufficient to support a reliable reconciliation process. The vendor cited HIPAA compliance as the basis for its decision not to retain prescription numbers on claims; any vendor entrusted with a function of this magnitude should meet the security requirements necessary to retain and report Rx numbers to system users. Without claim-level detail, denials cannot be matched to dispenses, corrected reason codes cannot be applied, and the cash loop on the transaction cannot be closed. The manufacturers rebate portal did provide one-time transient access to a report that would crosswalk pharmacy prescription numbers to ICNs, but if the original uploader failed to download that crosswalk at the time of upload, that vital information was inaccessible. For a program of this magnitude, that process is untenable, especially considering the dollars at stake. Applied to our current volume of products on the 2026 and 2027 MFP list, a five percent denial rate a reasonable planning assumption based on how manufacturer adjudication processes have functioned elsewhere would place approximately $320,000 at risk in the first year of the pilot. D. Point-of-Sale Mechanics and Executive Order 14273 Missouri Highlands dispenses exclusively through a contract pharmacy network. Under the current architecture, the entity acquires 340B-eligible drugs at the 340B price at the time of purchase, and that price is reflected at the pharmacy point of sale. Under a rebate model, the entity acquires at Wholesale Acquisition Cost, and the 340B benefit is reconciled afterward. HRSAs proposed ad hoc ceiling price file was an attempt to mitigate this problem, and we appreciate the effort, but our third-party administrators were not positioned to operationalize that file in the narrow lead time available before the planned 2026 start. The technical engineering required to operationalize a new price file, for only a subset of drugs, and apply it accurately at adjudication is no small feat. Three outcomes at the pharmacy counter are foreseeable under a rebate model and none is acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay from the patient, and we float the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC- Big Springs Medical Association Missouri Highlands Health Care 110 South 2nd Street Ellington, MO 63638 Phone: (573) 663-2313 Fax: (573) 663-2441 priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. Each of these outcomes is inconsistent with the function of a safety-net provider. This problem also presents a direct conflict with Executive Order 14273, which instructs the Department of Health and Human Services to preserve access to 340B pricing at the point of sale for patients who depend upon it. A rebate mechanism, by its architecture, cannot deliver the 340B price at the point of sale. A single policy cannot satisfy both the Executive Order and the rebate model as currently proposed. E. Administrative Burden HRSAs Information Collection Request estimates the administrative burden of a rebate model at approximately five hours per week per covered entity. That estimate is materially inconsistent with our observations during the 2026 preparatory period. Based on the claims volume across the combined 20262027 MFP list, Missouri Highlands estimates approximately 0.5 additional full-time-equivalent staff resource dedicated to rebate submission, denial management, reconciliation, and cash forecasting. That staffing requirement represents a cost that does not exist within our current operating budget and would be funded from the same resource pool that supports clinical and enabling services. F. A Less Burdensome Path to Deduplication Missouri Highlands Health Care acknowledges that the Medicare Drug Price Negotiation Program creates a legitimate need for a mechanism to prevent duplication between MFP and 340B discounts. The rebate model, however, is not the least burdensome tool available for that purpose, and it is the most expensive such tool from the perspective of the covered entity. Two alternatives exist that preserve the upfront discount and avoid the operational hurdles described above. A neutral 340B claims clearinghouse administered by or designated by HRSA would accomplish the deduplication objective without requiring the rebate infrastructure described above. Covered entities would report 340B claims to a single source of truth that manufacturers and the Centers for Medicare & Medicaid Services could both reference. CMS has already initiated development of such a framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. That architecture preserves the upfront discount, removes manufacturers from an adjudication role in which they have a clear commercial interest, and does not transfer the operational and financial risks of a rebate mechanism to the safety-net. Big Springs Medical Association Missouri Highlands Health Care 110 South 2nd Street Ellington, MO 63638 Phone: (573) 663-2313 Fax: (573) 663-2441 A second alternative relies on the manufacturer claims data that is already being collected from covered entities. While this solution is not preferrable to the claims clearinghouse option described above, it does seem like a viable stopgap solution while a neutral clearinghouse is built out. Many manufacturers are currently requiring 340B claims data as a condition of 340B access. That data is sufficient to support MFP/340B deduplication without the construction of a parallel rebate adjudication infrastructure. One operational refinement is warranted: for new pharmacy accounts, or for existing accounts that do not yet have claims history at the time a data requirement is imposed, manufacturers should be required to accept an attestation of compliance rather than withholding 340B access pending the submission of data that does not yet exist. Request For the reasons set forth above, Missouri Highlands Health Care respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program in its current form; that any rebate mechanism subsequently proposed exempt federally qualified health centers; and that the deduplication question be directed to the neutral clearinghouse framework already under development at CMS, or to the existing manufacturer claims data mechanism with the attestation accommodation described above. Thank you for your consideration. Sincerely, Karen R. White Karen R. White, CPA Chief Executive Officer Missouri Highlands Health Care Ellington, Missouri 340B ID: CH070430 Caring People...Quality Care April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Missouri Highlands Health Care respectfully submits these comments in response to the Health Resources and Services Administrations Request for Information on the 340B Rebate Model Pilot Program. Missouri Highlands is a federally qualified health center headquartered in Ellington, Missouri, serving a large patient population across southeastern Missouri. Missouri Highlands has participated in the 340B Drug Pricing Program since January 2004. Over the twenty-two years since, our pharmacy operations, our staffing, and our financial planning have been built around the upfront discount mechanism through which the 340B program has operated continuously. The proposed rebate model would require the reconstruction of those systems under conditions that our preparation for the 2026 pilot demonstrated to be operationally impracticable and financially untenable. A. Patient Population and Service Profile Missouri Highlands served 25,301 patients in the most recent reporting period. Ninety percent live at or below 200% of the federal poverty level, and forty-one percent live at or below 100%. Ten percent are uninsured. Forty-six percent are enrolled in Medicaid, and sixteen percent in Medicare. Thirty-four percent of our patients are children. Thirty-four percent of our visits involve enabling services case management, transportation, outreach, and other supports that keep patients connected to care which is a distinctive element of our service profile. In the most recent reporting period, our clinical teams cared for 486 prenatal patients and managed 227 of them through delivery. Roughly thirty-six percent of our adult patients are managing hypertension and seventeen percent are managing diabetes. Many of the medications that treat these conditions are on the 2026 and 2027 MFP drug lists, and their uninterrupted affordability is integral to our clinical outcomes. B. Projected Financial Impact of the Rebate Model Our current 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is approximately $1.63 million per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $6.4 million per year. The difference, approximately $4.77 million, is the working capital Missouri Highlands would be required to float to manufacturers every year the rebate mechanism operated. That float is not a one-time implementation expense; it recurs annually for as long as the mechanism remains in place and compounds against our cash position until rebates are collected on manufacturer-controlled terms. The same manufacturers that have spent the last five years aggressively limiting our access to 340B drugs by implementing unilateral policies that flout state and federal law. The 2026 and 2027 MFP drug lists represent 32% of our total 340B program. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary the annual working capital requirement grows to nearly $10 million. Missouri Highlands does not maintain unfunded liquidity at that scale. No community bank in southeastern Missouri will extend a line of credit of that magnitude against the promise of manufacturer reimbursement on contested rebate claims. Separately, the Medicare Drug Price Negotiation Program has already reduced the revenue of our 340B program by 8% in the first quarter of 2026. That compression is already embedded in our 2026 operating projections. Adding rebate-model cash demands on top of an already-compressed savings stream is the specific policy choice HRSA is being asked to authorize. C. Wholesaler Credit Capacity and Reconciliation Infrastructure Two upstream problems surfaced during our preparation for the planned 2026 pilot, and each of them is structural rather than implementation-related. The first is wholesaler credit capacity. Our wholesaler credit limits were calibrated against 340B acquisition pricing, not WAC. In the weeks preceding the planned pilot start, our wholesalers informed us directly that they were not prepared to extend the credit limits required to operate our 340B accounts at WAC. When credit limits are exceeded, 340B orders are held, 340b replenishment to contract pharmacies cease, and all cash flow associated with the 340B program comes to a screeching halt. Additional preparation time does not alter that reality; wholesalers are not positioned to underwrite the cash demand a rebate model would create in a supply chain built around acquisition-price credit terms. This one issue should be enough to prevent HRSA from further consideration of a 340B rebate pilot. The second is reconciliation infrastructure. Our operations and finance teams reviewed the third-party vendor interface manufacturers selected for rebate adjudication. The available data and reporting were not sufficient to support a reliable reconciliation process. The vendor cited HIPAA compliance as the basis for its decision not to retain prescription numbers on claims; any vendor entrusted with a function of this magnitude should meet the security requirements necessary to retain and report Rx numbers to system users. Without claim-level detail, denials cannot be matched to dispenses, corrected reason codes cannot be applied, and the cash loop on the transaction cannot be closed. The manufacturers rebate portal did provide one-time transient access to a report that would crosswalk pharmacy prescription numbers to ICNs, but if the original uploader failed to download that crosswalk at the time of upload, that vital information was inaccessible. For a program of this magnitude, that process is untenable, especially considering the dollars at stake. Applied to our current volume of products on the 2026 and 2027 MFP list, a five percent denial rate a reasonable planning assumption based on how manufacturer adjudication processes have functioned elsewhere would place approximately $320,000 at risk in the first year of the pilot. D. Point-of-Sale Mechanics and Executive Order 14273 Missouri Highlands dispenses exclusively through a contract pharmacy network. Under the current architecture, the entity acquires 340B-eligible drugs at the 340B price at the time of purchase, and that price is reflected at the pharmacy point of sale. Under a rebate model, the entity acquires at Wholesale Acquisition Cost, and the 340B benefit is reconciled afterward. HRSAs proposed ad hoc ceiling price file was an attempt to mitigate this problem, and we appreciate the effort, but our third-party administrators were not positioned to operationalize that file in the narrow lead time available before the planned 2026 start. The technical engineering required to operationalize a new price file, for only a subset of drugs, and apply it accurately at adjudication is no small feat. Three outcomes at the pharmacy counter are foreseeable under a rebate model and none is acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay from the patient, and we float the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC- priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. Each of these outcomes is inconsistent with the function of a safety-net provider. This problem also presents a direct conflict with Executive Order 14273, which instructs the Department of Health and Human Services to preserve access to 340B pricing at the point of sale for patients who depend upon it. A rebate mechanism, by its architecture, cannot deliver the 340B price at the point of sale. A single policy cannot satisfy both the Executive Order and the rebate model as currently proposed. E. Administrative Burden HRSAs Information Collection Request estimates the administrative burden of a rebate model at approximately five hours per week per covered entity. That estimate is materially inconsistent with our observations during the 2026 preparatory period. Based on the claims volume across the combined 20262027 MFP list, Missouri Highlands estimates approximately 0.5 additional full-time-equivalent staff resource dedicated to rebate submission, denial management, reconciliation, and cash forecasting. That staffing requirement represents a cost that does not exist within our current operating budget and would be funded from the same resource pool that supports clinical and enabling services. F. A Less Burdensome Path to Deduplication Missouri Highlands Health Care acknowledges that the Medicare Drug Price Negotiation Program creates a legitimate need for a mechanism to prevent duplication between MFP and 340B discounts. The rebate model, however, is not the least burdensome tool available for that purpose, and it is the most expensive such tool from the perspective of the covered entity. Two alternatives exist that preserve the upfront discount and avoid the operational hurdles described above. A neutral 340B claims clearinghouse administered by or designated by HRSA would accomplish the deduplication objective without requiring the rebate infrastructure described above. Covered entities would report 340B claims to a single source of truth that manufacturers and the Centers for Medicare & Medicaid Services could both reference. CMS has already initiated development of such a framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. That architecture preserves the upfront discount, removes manufacturers from an adjudication role in which they have a clear commercial interest, and does not transfer the operational and financial risks of a rebate mechanism to the safety-net. A second alternative relies on the manufacturer claims data that is already being collected from covered entities. While this solution is not preferrable to the claims clearinghouse option described above, it does seem like a viable stopgap solution while a neutral clearinghouse is built out. Many manufacturers are currently requiring 340B claims data as a condition of 340B access. That data is sufficient to support MFP/340B deduplication without the construction of a parallel rebate adjudication infrastructure. One operational refinement is warranted: for new pharmacy accounts, or for existing accounts that do not yet have claims history at the time a data requirement is imposed, manufacturers should be required to accept an attestation of compliance rather than withholding 340B access pending the submission of data that does not yet exist. Request For the reasons set forth above, Missouri Highlands Health Care respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program in its current form; that any rebate mechanism subsequently proposed exempt federally qualified health centers; and that the deduplication question be directed to the neutral clearinghouse framework already under development at CMS, or to the existing manufacturer claims data mechanism with the attestation accommodation described above. Thank you for your consideration. Sincerely, Karen R. White Karen R. White, CPA Chief Executive Officer Missouri Highlands Health Care Ellington, Missouri 340B ID: CH070430
HRSA-2026-0001-1982Anonymous Anonymous2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-1983Tri-State Community Health Center2026-04-20T04:00Z5,802 chars
See attached file(s) Tri-State Community Health Center 109 Rayloc Drive Hancock, MD 21750 Phone (301) 678-5187 Fax (301) 678-5797 Tri-State April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.,gov Dear Director Britton: On behalf of Tri-State Cornmunity Health Center's (TSCHC) 20,000 patients served at the 5 Appalachian clinical sites we operate in geographically large rural Maryland, Pennsylvania, and West Virginia, I appreciate the opportunity to comment on HRSA's Request for Information (RFI) regarding a potential 340B rebate pilot. My letter supplements the letters submitted by NACHC and our 3 Primary Care Associations - MACHC, PACHC, and WVPCA - which provided extensive and detailed CHC-specific data and recommendations in response to questions raised in the RFI. My brief letter addresses for you the critical importance of the 340B Program to TSCHC, our patients, and rural communities with few resources and high numbers of vulnerable, low income, and chronically ill residents. 16% of TSCHC's patients receive Medicare, reflecting the reality of youth having to leave the region to seek jobs. TSCHC's Appalachian cultural patients are proud and avoid government programs like Medicare and Medicaid. These independent minded residents depend on TSCHC for our recognized prevention, education, and comprehensive quality healthcare services to keep them well. We have earned their trust; TSCHC was one of 392 Community Health Centers recognized as a FIRSA 2025 Health Center Quality Leader for Improving Health Outcomes and Providing High Quality Care for our Patients. 340B savings are essential to TSCHCs' financial stability and ability to provide needed services at affordable rates to our loW-income and uninsured patients. Consistent with federal law and regulation to stretch scarce Federal resources, TSCHC has always invested every penny of 340B savings into activities expanding and enhancing access to care for our underserved MD, PA, and WV populations. 340B savings not only reduce the cost of needed medications for many patients, but 340B is also a critical funding source that assures many of the services that TSCHC patients rely on. 340B has permitted TSCHC to provide more comprehensive primary care as well as a robust successful OB/GYN Women's Health Center. OB/GYN is a high cost and high liability service line, so few CHCs nationally and only 3 in MD provide OB/GYN. The Cumberland, MD, hospital and community asked TSCHC to expand and provide OB/GYN. For 20 years, we have provided essential comprehensive OB/GYN services for everyone including underserved, adolescent, and high risk women in MD, PA, and WV. A January 20, 2026, National Health Service Corps and MD Division of Primary Care Virtual Site Visit affirmed and applauded the high quality and outstanding outcomes of TSCHC's OB/GYN Program providing OB prenatal care and deliveries, women's and contraceptive services, and GYN surgeries. All CHCs' are experiencing and struggling with workforce issues, increasing costs, flat federal funding, and decreasing funding streams. 340B savings have enabled TSCHC to provide our costly OB/GYN Program for everyone. Continued decreasing 340B savings and now a 340B Rebate Program looming will force TSCHC to have to make difficult decisions about staffing, services, drugs and creates new harsh barriers for patients. TSCHC will likely be forced to close our highly successful OB/GYN program for MD, PA, and WV underserved women and their babies and eliminate plans for our newly purchased mobile van and for integrating behavioral health. The Cumberland, MD, hospital and a soon to retire private OB/GYN are the only other local OB/GYN providers in the region with the closest other OB/GYN services and delivering hospitals around 2+ hours away. The continuing 340B savings losses already create debilitating administrative, financial, and operational burdens for TSCHC and our patients. The Rebate model drastically compounds the situation as outlined in the NACHC and PCA letters. Rebate model barriers make it operationally impossible to provide the slidMg fee scale and discounted medications required by law ancl upon which our patients depend and already struggle to pay for. TSCHC will have problems purchasing drugs at full WAC creating cashflow issues, further depleting our reserve funds, endangering services, and impacting TSCHC's sustainability. Additionally, TSCHC's 9 contraet pharmacies in our large geographic service area already struggle with the 340B administrative burden and the Rebate model will likely cause them to drop 340B contracts. My hope is that this brief snapshot of one CHC will enlighten you about CHCs' real-world reality especially in rural areas. I and TSCHC's Managers lie awake at night and are highly over-stressed about how we can continue to meet our CHC mission and commitments to our patients and cornmunities with any Rebate model. Please advocate for CHC's underserved patients, recognize CHCs' realities, and exclude CHCs from any Rebate model. A Neutral Claims Clearinghouse model suggested by NACHC, PCAs, and others would be a viable alternative and produce more accurate deduplication with less cost and administrative burden. Thank you for your consideration of sustainability for TSCHC's OB/GYN Women's Health Center and for the many other endangered vital CHC programs and services nationally. Susan B. Walter, MSW, CEO, Tri-State Community Health Center 109 Rayloc Drive, Hancock, MD 21750; 301.331.4182 - cell
HRSA-2026-0001-1984Hamilton Health Center, Inc.2026-04-20T04:00Z87,593 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Hamilton Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Hamilton Health Center anticipates a loss of $500,000 to 1 Million from entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Hamilton Health Center, Inc., is a mid-size, federally qualified health center headquartered in Harrisburg, PA (the capital city of Pennsylvania) serving three counties through 5 sites. We have been in existence for nearly 60 consecutive years and are currently providing over 120,000 annual visits to over 30,000 unique patients. Our mission is: To improve physical and behavioral health of Central Pennsylvanias residents by delivering high quality, respectful and patient-centered services that promote access, treatment, education, and prevention regardless of health, economic, or insurance status. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Hamilton in particular, this means it will impact: Approximately 4,500 prescriptions Administrative burden costing nearly $200,000 to $300,000 The ability to provide more low cost or free services at our Hamilton due to rebates payments being held up, and all the inflated costs associated with this Rebate Model We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Hamilton Health Center provided 36,400 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Hamilton Health Center anticipates needing 1 or 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Hamilton Health Center anticipates an increase of 1.2 Million to 1.5 Million to cover costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Hamilton Health Center estimates that we will need approximately 1 to 2 FTE to support the rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate that the annual costs to operate our health center will increase upwards of 5 million dollars by 2028 which will have a negative impact on cash flow and likely will result in turning away patients because we will not be able to afford paying for their medications and awaiting a rebate. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20-25 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Hamilton Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $75,000-$100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 30,000 unique patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Currently, Hamilton Health Center pays to utilize a large hospital systems EHR (EPIC). As such, we do not have integration with the PMS. It is likely that we would never be able to integrate the EHR & PMS because it would become a low priority for the hospital system and would require labor from their information systems to build out the integration. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools of $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20-25 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 3 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Harrisburg, Steelton and surrounding areas with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact Hamilto Health Centers ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Hamilton Health Centers pharmacies, both entity- owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 8 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Hamilton Health Center employees 5 colleagues who actively manage insurance and sliding fee scales for the 30,000+ unique patients that the health center takes care of. This department is called Patient Services (commonly referred to as Navigators) and they are responsible for gathering family size along with proof of income to determine sliding fee scale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $70,000 to $120,000 per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2,000 to $3,500 per month to purchase these same drugs at the 340B ceiling price. This represents a 3,400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Hamilton Health Center anticipates needing to reduce: 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as prescription deliveries, the # of patients receiving treatment for HIV/AID (we refer it as our HOPE Program), and family planning (which includes our womans health and STD clinics). Operating Hours: We anticipate needing to reduce our clinic hours 12 per week, specifically impacting the opportunities for patients to be able to pick up medications from the pharmacy. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund community health work positions and medical assistant positions within the health center. We estimate the need to be between 1 to 2 FTE which would likely result in the cutting of 1 or 2 positions. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 8,400 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Hamilton Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Hamilton Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $600,000 to $800.000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 11 In 2025, Hamilton Health Center spent approximately $42,000 on the 10 selected drugs, when changing this to WAC pricing, this total would exceed well over 1.5 million dollars. We estimate that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $120,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be over $100,000 annuallyfunds that are currently dedicated to HOPE Program, Prenatal Care, Dental, Pediatrics, and Adult Medicine. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Hamilton Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Hamilton Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $600,000 to $800,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 13 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Hamilton Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it 14 operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Hamilton Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Hamilton Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Terese DeLaPlaine, CEO & President at tdelaplaine@hamiltonhealthcenter.com. Sincerely, Terese DeLaPlaine, CEO & President Hamilton Health Center April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Hamilton Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Hamilton Health Center anticipates a loss of $500,000 to 1 Million from entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Hamilton Health Center, Inc., is a mid-size, federally qualified health center headquartered in Harrisburg, PA (the capital city of Pennsylvania) serving three counties through 5 sites. We have been in existence for nearly 60 consecutive years and are currently providing over 120,000 annual visits to over 30,000 unique patients. Our mission is: To improve physical and behavioral health of Central Pennsylvanias residents by delivering high quality, respectful and patient-centered services that promote access, treatment, education, and prevention regardless of health, economic, or insurance status. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Hamilton in particular, this means it will impact: Approximately 4,500 prescriptions Administrative burden costing nearly $200,000 to $300,000 The ability to provide more low cost or free services at our Hamilton due to rebates payments being held up, and all the inflated costs associated with this Rebate Model We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Hamilton Health Center provided 36,400 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Hamilton Health Center anticipates needing 1 or 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Hamilton Health Center anticipates an increase of 1.2 Million to 1.5 Million to cover costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Hamilton Health Center estimates that we will need approximately 1 to 2 FTE to support the rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate that the annual costs to operate our health center will increase upwards of 5 million dollars by 2028 which will have a negative impact on cash flow and likely will result in turning away patients because we will not be able to afford paying for their medications and awaiting a rebate. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20-25 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Hamilton Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $75,000-$100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 30,000 unique patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Currently, Hamilton Health Center pays to utilize a large hospital systems EHR (EPIC). As such, we do not have integration with the PMS. It is likely that we would never be able to integrate the EHR & PMS because it would become a low priority for the hospital system and would require labor from their information systems to build out the integration. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools of $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20-25 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 3 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Harrisburg, Steelton and surrounding areas with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact Hamilto Health Centers ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Hamilton Health Centers pharmacies, both entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Hamilton Health Center employees 5 colleagues who actively manage insurance and sliding fee scales for the 30,000+ unique patients that the health center takes care of. This department is called Patient Services (commonly referred to as Navigators) and they are responsible for gathering family size along with proof of income to determine sliding fee scale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $70,000 to $120,000 per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2,000 to $3,500 per month to purchase these same drugs at the 340B ceiling price. This represents a 3,400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Hamilton Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as prescription deliveries, the # of patients receiving treatment for HIV/AID (we refer it as our HOPE Program), and family planning (which includes our womans health and STD clinics). Operating Hours: We anticipate needing to reduce our clinic hours 12 per week, specifically impacting the opportunities for patients to be able to pick up medications from the pharmacy. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund community health work positions and medical assistant positions within the health center. We estimate the need to be between 1 to 2 FTE which would likely result in the cutting of 1 or 2 positions. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 8,400 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Hamilton Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Hamilton Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $600,000 to $800.000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. In 2025, Hamilton Health Center spent approximately $42,000 on the 10 selected drugs, when changing this to WAC pricing, this total would exceed well over 1.5 million dollars. We estimate that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $120,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be over $100,000 annuallyfunds that are currently dedicated to HOPE Program, Prenatal Care, Dental, Pediatrics, and Adult Medicine. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Hamilton Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Hamilton Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $600,000 to $800,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Hamilton Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Hamilton Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Hamilton Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Terese DeLaPlaine, CEO & President at tdelaplaine@hamiltonhealthcenter.com. Sincerely, Terese DeLaPlaine, CEO & President Hamilton Health Center
HRSA-2026-0001-1985Damien Center2026-04-20T04:00Z9,455 chars
See attached file(s) April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA2026-03042: DAMIEN CENTER Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Damien Center appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. We are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients who represent some of the most vulnerable populations in our service area. As Indianas leading community health center serving people living with HIV, Damien Center delivers lifesaving wraparound services that have helped our patients achieve viral suppression rates well above the national average. Our ability to provide these servicesoften at no cost or at a significant discountdepends on predictable, upfront access to 340B savings. Replacing that structure with a rebate-based model would introduce uncertainty, administrative complexity, and cash-flow disruption that would directly undermine our capacity to sustain these outcomes. For nearly three decades, the 340B program has enabled community-based providers like Damien Center to extend care to communities that would otherwise be left behind, while operating under rigorous oversight and reporting requirements. The existing 340B framework is functioning as Congress intended and weakening it would jeopardize patient access with no corresponding public benefit. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers 1 from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that we provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Damien Center, like many clinics, serves clients regardless of their ability to pay, we often receive no insurance payments and depend on the 340B program to underwrite the cost of providing this necessary care to our patients. Furthermore, were able to provide these expanded services without any cost to taxpayers. A Rebate Model Pilot would make comprehensive HIV and primary care less accessible and more expensive, an outcome that is completely contrary to the intent of the 340B program. Our ability to care for uninsured and underinsured patients depends on receiving 340B savings at the point of purchase. A rebate-based model would delay access to those funds, weakening our capacity to deliver care when reimbursement falls short. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These new, and unnecessary burdens violate the spirit of 340Bs express purpose: to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, the financial risk and operational burden of a rebate model could drive contract pharmacies to withdraw from participation, restricting patient access to care. If contract pharmacies refuse to enter into agreements with community clinics like ours, access to medications will inevitably be reduced for our patients, many of whom are already face steep barriers such as housing instability, food insecurity, unemployment, and substance use disorder. For infectious disease clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling an individuals HIV disease, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the HIV epidemic. Financial Impact of Increased Drug Acquisition Costs The Rebate Model will increase Damien Centers drug acquisition costs and therefore increase the costs of delivering patient care. Under this model, well be forced to pay the full wholesale price for drugs at the point of sale and face a complicated and uncertain rebate process that will create significant cash-flow strain on our small organization. This will threaten our ability to provide low-cost, discounted medications to our patients at a time when healthcare costs are already skyrocketing. Annual Rebate ; , : Increased Upfront % Increase in Opportunity Cost %Increase in Net AanuAl PKUsebende Unita nulaventar (Loss of cost minus Spend Be E v +- rebate denials) (WAC - 340B AAC) Spend Projected Rebate Model ge non $6,950.66 1539% $213,819.05 51186% MFP Drugs in 2026 Projected Rebate Model Impact on $29,625.04 778% $683,113.82 MFP Drugs in 25844% 2027 Projected Rebate Model Impact on $614,405.74 563% $7,552,618.47 MFP Drugs in 2028 18670% Average Increase in Inventory Costs Pending Rebate Payments 30-Day Cash on 45-Day Cashon 60-DayCashonHand 90-Day Cashon Hand Impact Hand Impact Impact Hand Impact Projected Rebate Model Impact on $17,528.74 $26,293.12 $35,057.49 $52,586.23 MFP Drugs in 2026 Projected Rebate Model Impact on $55,372.58 $83,058.88 $110,745.17 $166,117.75 MFP Drugs in 2027 Projected Rebate Model Impact on $587,901.09 $881,851.64 $1,175,802.19 $1,763,703.28 MFP Drugs in 2028 Implementation and Administrative Burden Since 1992, Damien Center has carefully built processes and workflows to manage the complex nature of 340B compliance and reporting. Thats 34 years of institutional knowledge that have all been built on the promise of upfront discounts to covered entities as described by the statute. Suddenly switching this entire infrastructure to a rebate program violates the spirit of the 340B program as written and upends decades of work. It imposes new management costs on small clinics like ours and does nothing to improve compliance or patient care. Damien Center will have to invest in new technologies and staff to adapt to these significant changes all of this under an artificial cash-flow constraint created by this unnecessary change. We estimate that in 2026 alone this would result in an additional $213,819 of additional inventory spending. This cost will increase yearly, and in 2028 we estimate that we will spend over $7,552,618 in additional pharmacy costs and managing the Rebate Models overhead. By that same year, our 90 day cash-on-hand impact will increase by $1,763,703 as we wait on uncertain cash rebates. These costs dont come in a vacuum. The needs of our patients will continue to increase as the general cost of healthcare spirals upward, and we will find ourselves less able to provide effective and low-cost healthcare. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA instead work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders - covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B- Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. We appreciate HRSAs consideration of our comments. For further information, please contact Alan Witchey, President & CEO at awitchey@damien.org Sincerely, Alan Witchey President & CEO Damien Center
HRSA-2026-0001-1986(no commenter metadata)2026-04-20T04:00Z41,029 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request For Information: 340B Rebate Model Program Dear Administrator Engels, On behalf of the University of California Health (UC Health), we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information (RFI) on the 340B Rebate Model Program (rebate model). UC Healths six academic health centers play a leading role in Californias health care safety net and are the states second largest provider of Medicaid inpatient services, despite having only 7% of the hospital beds in California. Currently, UC Health has 19 covered entities that participate in the 340B program including: 12 Disproportionate Share Hospitals (DSH), three Hemophilia Treatment Centers (HTC), two Federally Qualified Health Centers (FQHC), one Childrens Hospital, and one Ryan White Clinic across our five campuses that operate 340B programs. We provide an outsized amount of complex tertiary and quaternary care to low-income patients across the state and serve patients from 99% of the zip codes in California. In addition, in the 2023-24 fiscal year, UC's academic health centers provided an estimated $4.0 billion dollars in uncompensated care to patients insured by Medicaid and Medicare. The 340B Program is essential to the work we do to provide world class healthcare to Californians with limited means and access to care. The adoption of a rebate model will fundamentally shift how the 340B Program has operated for over 30 years. Enacting a rebate model, even if initially limited in scope, conflicts with the 340B statute and decades of agency guidance and introduces avoidable administrative and financial burdens to safety-net providers, including UC Health. UC Health urges HRSA not to implement a 340B Rebate Model Program. Administrator Engles April 20, 2026 Page 2 of 14 If HRSA attempts to implement a rebate model and radically departs from its past policies, it must offer a sufficiently detailed 340B Rebate Model Program Proposal. Prior to implementation, stakeholders should be engaged to offer meaningful analysis and feedback. The current RFI includes a list of questions that are untethered to a concrete proposal. Without a specific proposal to analyze, any information received from this RFI will be unreliable and cannot be used for reasonable or rational policymaking. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. UC Health, nonetheless, appreciates the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospitals and the patients we serve. UC Health urges HRSA to reevaluate its current approach to a rebate model to allow all stakeholders time to work together on ways to strengthen, rather than weaken, this vital safety net program. I. Current 340B Administrative Framework and Baseline Costs During the most recent fiscal year, UC Health processed over 42 million 340B transactions across all covered entity sites. This figure represents the total volume of 340B-eligible drugs dispensed or administered to patients and encompasses all channels through which 340B drugs reach our patients; including in-house pharmacies, hospital/clinic administered medications, and contract pharmacy arrangements. UC Health employs 30 full-time employees (FTEs) dedicated solely to managing the 340B Program. Beyond their salaries and benefits, the organization incurs over $17 million annually in direct administrative costs to operate and maintain the program. Direct costs include administrative fees paid to contract pharmacy partners, maintenance fees for split-billing software used to manage mixed-use purchasing across our covered entities, compliance software platforms used to continuously audit and validate 340B claims, and fees for independent third- party auditors who conduct annual program audits. The primary cost drivers for our 340B Program administrative costs are, in order of significance: Staffing: which represents our largest cost driver and is reflected in the 30 dedicated FTEs required to manage and oversee the program across our different covered entities. Third-party administrator (TPA) fees: include administrative fees paid to contract pharmacy partners and independent auditors to ensure program integrity. Technology platforms: including split-billing software and compliance systems used for ongoing auditing and monitoring of 340B claims across all universes. Administrator Engles April 20, 2026 Page 3 of 14 II. Administrative and Operational Burden Under a 340B Rebate Model Potential Administrative and Operational Costs UC Health expects an inordinate amount of administrative burden to operate a potential rebate model. We estimate approximately 300-400 hours per month of additional work would be required across five academic health centers that operate 340B Programs. The additional work is dedicated solely to rebate data collection, validation, and reconciliation activities required under a rebate model. Beyond new hires, existing 340B Program staff, currently allocated across our 30 dedicated FTEs, would be required to absorb additional daily administrative functions. This reallocation would divert existing staff from critical program oversight, compliance monitoring, and patient-facing support functions they currently perform. This estimate does not include the additional cost of engaging third-party vendors to manage portions of the rebate process, which we anticipate would be required and create additional work. In addition, UC Health estimates approximately 80 hours of one-time startup effort per campus to prepare systems, build reports, train staff, and configure workflows necessary to participate in a rebate model. This estimate is based on the original 10 drugs selected by HRSA for the Rebate Model Pilot Program proposed in 2025. Incremental, Start-up, and On-going Costs and Coverage Implementing a rebate model creates both one-time and recurring administrative costs across IT, legal, compliance, regulatory affairs, revenue cycle, and 340B Program staff. Requiring covered entities to operate dual 340B frameworks one for rebate and one for upfront discount compounds operational complexity and compliance risk without any corresponding benefit. By requiring covered entities to run dual 340B Programs one for a rebate model and one for the upfront discount model organizations must implement two different administrative frameworks, thereby increasing operational complexity, costs, and compliance risk. One-Time Startup Costs: We estimate approximately 80 hours per campus to build reports, configure systems, train staff, and establish submission workflows. This represents a cross- functional investment well beyond the 340B staff alone. Recurring Costs: On an ongoing basis, we estimate an increase of 34 hours per day per campus, plus approximately one additional FTE per campus to manage rebate-related functions. Even with a third-party vendor, internal staff will still be required to oversee and validate that work. Vendor support costs are estimated at $100,000$350,000 per campus annually costs that are entirely new and incremental to our existing administrative baseline. Technology Infrastructure Implementing a rebate model equivalent to the 2025 pilot program would require a new or modified IT infrastructure across our covered entity portfolio. Our 340B transaction data currently resides across multiple disparate systems covering in-house pharmacies, clinic- Administrator Engles April 20, 2026 Page 4 of 14 administered medications, mixed-use spaces, and locations that house pure 340B inventory, otherwise known as clean sites. None of our current IT infrastructures are designed or configured to support rebate submission workflows. In some cases, engaging software vendors to collect, submit, and reconcile rebate data is necessary, which is a functionality we do not currently utilize. This would represent a new net cost to UC Health. In other cases, we would need to build internal reports from scratch and establish entirely new processes for validating, submitting, and reconciling that data. These types of workflows are not currently required or performed under the upfront discount model. In either approach, substantial investment in new infrastructure, configuration, testing, and ongoing maintenance would be required. The complexity is further compounded by the manual intervention needed to reconcile data inconsistencies across systems, such as mismatched units of measure and missing data fields, which cannot be fully automated. Collectively, these IT demands represent a significant one-time and ongoing cost burden that does not exist under our current administrative infrastructure. III. Methodology and Assumptions Our estimates were created based on the assumption that a 340B Rebate Model Pilot Program will be consistent with the rebate model HRSA proposed and attempted to implement in 2025, and would include only the original 10 drugs, not any additional drugs that may be subject to the Medicare negotiated Maximum Fair Price (MFP) starting in 2027. These cost estimates are based on our experience from the proposed 340B Rebate Pilot Program in 2025 as well as a direct operational assessment of our current 340B Program infrastructure. The lack of specificity regarding HRSAs new proposal for a 340B Rebate Model Program makes it impossible to offer an informed estimate of the administrative and operational costs for a potential future rebate model. If HRSA were to include MFP drugs from 2027 and beyond in any rebate model, or make any other changes to the number or types of drugs originally proposed in the 2025 340B Rebate Pilot Program, our cost estimates would substantially increase. The 80-hour one-time startup estimate was created by evaluating the hours necessary to create the reports, data pulls, training of dedicated staff, and submission workflow across our multiple transaction systems. Similarly, the daily hour estimates were created based on our direct experience in preparing for the 340B Rebate Model Pilot last year, as well as evaluating the additional data collection, data validation, and submission that a rebate model would require. From our experience in preparing for the 340B Rebate Pilot Program from last year, the data necessary to submit the rebate is not available from a single database. The data that we have available, as it relates to our 340B transaction data, is available from multiple disparate systems. The various systems include in-house pharmacies, clinic-administered medications, mixed use areas, and clean sites. These various systems exist to serve key operational and regulatory compliance roles and were not designed to serve as a data source for a 340B Rebate Model Administrator Engles April 20, 2026 Page 5 of 14 Program. Therefore, gathering, aggregating, and reconciling data across these platforms imposes a new administrative and operational burden, including a full separate build of the data. In addition, the estimates that we created acknowledge the reality that a large portion of the data preparation would still need to be done manually. The manual nature of this work is significant and cannot be eliminated through automation. Specific examples of manual tasks include: Correcting data fields where payer IDs and provider National Provider Identifications (NPIs) are blank and must be manually populated with the appropriate value before submission. Validating and overriding units of measure to comply with rebate submission requirements, particularly for injectable medications that may be dispensed in different units across our systems. Reconciling data pulled from multiple disparate systems that do not communicate with one another and require manual cross-referencing to ensure accuracy and completeness. IV. Other Anticipated Costs and Impacts of a Potential 340B Rebate Model Pilot Program Additional Costs Beyond the administrative and operational costs previously outlined, the most significant additional cost UC Health would incur under a rebate model is the increased drug acquisition cost resulting from drugs purchased at Wholesale Acquisition Cost (WAC) rather than the upfront 340B discounted price. Under a rebate model equivalent to the 2025 pilot program, we would be required to purchase these drugs at WAC and subsequently seek reimbursement of the discount through a manufacturer rebate process. Across all our campuses, we estimate this would result in approximately $120 million in additional annual drug acquisition costs for 2025 pilot drugs alone, approximately $10 million per month. This represents a substantial and recurring financial burden that would directly strain our organization's operating capital and budget, diverting resources that currently fund critical care programs and services for our vulnerable patient populations. Additional costs will arise due to inappropriately denied rebates. Transitioning from an up-front rebate to a manufacturer-provided rebate grants manufacturers an advantage over covered entities. The administrative cost of monitoring, documenting, and disputing inappropriate denials is difficult to estimate, but likely to be significant. The 2025 rebate model did not include a dispute resolution process, and did not go live, so there is no data available to determine the frequency of manufacturer denials. Impacts to Patient Access Implementation of a rebate model would have direct impacts on patient access to drugs across our covered entity portfolio. The $120 million in additional annual drug acquisition costs would place significant strain on our operating budget, directly threatening the community benefit programs UC Health currently funds with 340B savings. Patients receive medications at no cost Administrator Engles April 20, 2026 Page 6 of 14 to qualifying members or receive 340B discounts directly at the point of dispensing. Under a rebate model, we anticipate these programs would be significantly reduced or eliminated. Additionally, the increased cost of purchasing drugs at list price would necessitate reductions in on-hand drug inventory across our campuses, which could result in dispensing delays and directly impact the continuity and initiation of therapy for patients managing serious or chronic conditions. For example, Stelara (ustekinumab) 90mg prefilled syringe is used to treat serious chronic conditions such as Crohn's disease, ulcerative colitis, and psoriasis. This medication carries a WAC price of over $28,000 per package (over 5 times more than the 340B cost). Under a rebate model, UC Health would be required to purchase this drug at WAC rather than at the 340B discounted price, which would make it financially untenable to maintain adequate inventory levels. Stelara is just one example among the pilot drugs where the financial burden of WAC purchasing would directly translate into reduced inventory and potential delays in patient access to critical therapies. Cash Flow Impacts The 340B statute requires that manufacturers offer covered entities the ability to purchase covered, outpatient drugs at or below the ceiling price. A rebate model that is voluntary for manufacturers, but mandatory for covered entities, would allow manufacturers to selectively impose additional costs on covered entities for their own administrative and cash flow convenience. By allowing manufacturers to transfer costs to covered entities, a rebate model effectively increases the price of covered outpatient drugs above the ceiling price. This is especially true, from a cash-flow perspective, because the impact of a rebate model is to directly transfer the cash-flow costs of manufacturers onto covered entities. Under our current wholesaler contracts, payment for both 340B and non-340B drugs are due every 15 calendar days, with no differentiation in payment terms between the two and no early payment discounts. Payment timing under a rebate model would have a direct and significant impact on our organization's cash flow. As mentioned before, under a rebate model, UC Health would be required to purchase drugs at WAC, resulting in approximately $120 million in additional annual drug acquisition costs. To account for the increased upfront cost, our wholesaler would require the UC Health covered entities to increase their prepay deposit account by approximately $30 million per quarter systemwide, or close to $120 million per year. This is an immediate and outlay of cash thats directly tied to the rebate model. Since our drug invoices are due within 15 calendar days, even a brief gap in invoice payment and rebate receipt would expose UC Health to substantial interest charges. Based on our current experience with the MFP effectuation for the 10 selected Inflation Reduction Act (IRA) drugs, we are already experiencing significant lag in claims processing from the Medicare Transaction Facilitator (MTF) to the manufacturer rebate portal, Beacon. There are additional delays from Beacon back to the MTF before remittances reach our accounts, a process that is currently taking 30 days or more. While we understand a rebate model may not be limited to Medicare Part D drugs, we anticipate similar or greater lag times in claims processing and remittance for non-Part Administrator Engles April 20, 2026 Page 7 of 14 D claims, which would further compound the cash flow strain on UC Health. V. Rebate Denials Dedicated Process to Resolve Rebate Disputes. Any potential 340B Rebate Model Program should clearly communicate how to resolve rebate delays, denials, or any other administrative or logistical issues emerging through implementation of the rebate model. Providing a general email address to lodge complaints will not suffice and is insufficient given the implications of the rebate model on covered entity finances. If the agency requires hospitals to raise concerns through the existing 340B Administrative Dispute Resolution (ADR) process, this process will not suffice. The ADR process can take years before a decision is rendered, which would mean that our hospitals would have to forgo a rebate and advance large sums of cash for an extended period much longer than the 10 days allowed under the agencys notice. Therefore, we strongly recommend that HRSA create a separate process to collect, respond to, and adjudicate any disputes related to its rebate model pilot program. This separate process should allow for expedited review and timely decisions of any rebate- related claim disputes. Most important, the agency should provide (1) a designated human point- of-contact to receive complaints (and follow-ups on those complaints) and (2) a specific mandatory timeline for when those complaints are addressed. HRSA should take these extra measures to ensure that all safety net hospitals, including UC Health, have an accessible and timely mechanism to raise concerns and resolve rebate-related disputes. Denial Documentation Requirements UC Health is concerned that manufacturers may issue a high volume of rebate denials or delays for improper reasons, particularly given that program integrity concerns are not a permissible basis for denial. We also recognize that drug companies have developed ways to evade the rules of the 340B Program. Any denial documentation must include: (1) a narrative description of why a rebate claim is being denied (2) supporting primary source materials (e.g., claims information, indication of which other covered entity received a rebate) justifying such a denial; (3) a signature or attestation by a drug company employee, along with their telephone number or email address, so that covered entities can reach them to address any incorrect denials; (4) a mandatory timeline by which the covered entity must receive a response from the drug manufacturer; and (5) an automatic reversal of the rebate denial if the drug manufacturer does not respond within that time period. HRSA should also consider creating a standard denial form to streamline the administrative process and provide covered entities with sufficient information to understand (and potentially challenge) a denial. To ensure manufacturers do not have an incentive to deny claims temporarily to gain cash flow benefits; manufacturers should also be required to put aside any disputed rebate amount in a separate, non-interest-bearing account during the pendency of any dispute. Administrator Engles April 20, 2026 Page 8 of 14 Denying Rebates Based on Unilateral Contract Pharmacy Restrictions HRSA has not addressed whether drug companies can deny 340B rebates for contract pharmacy claims based on the drug companies unlawful and unilateral contract pharmacy restrictions. As HRSA is aware, since 2020 dozens of drug companies have imposed restrictions on access to 340B discounted pricing through contract pharmacies. These restrictions have created enormous financial and administrative burdens for 340B covered entities nationwide.1 If drug companies are allowed to deny rebates for contract pharmacy claims based on unilaterally imposed restrictions, it will compound the harm these restrictions have already caused 340B hospitals. Therefore, HRSA should clarify that drug companies are not allowed to use 340B rebate denials as a backdoor to enforce their unlawful contract pharmacy policies or any other unilateral contractual or policy restrictions. VI. Data Collection by Covered Entities UC Health collects, maintains, and retains 340B Program data across multiple systems spanning our in-house pharmacies, clinic-administered medications, mixed-use areas, and clean sites across all five campuses that operate 340B Programs. Given the complexity of our covered entity portfolio, data is not housed in a single unified system but rather across multiple disparate platforms that each require separate reporting and reconciliation processes. We utilize third-party vendors for key functions including split-billing, contract pharmacy qualifications, in-house pharmacy qualifications, compliance monitoring, and audit support, all of which involve the collection and retention of 340B transaction data. Ensuring Accuracy UC Health employs multiple layers of oversight to ensure the accuracy, completeness, and consistency of our 340B Program data. Our 30 dedicated 340B FTEs conduct regular audits across our multiple systems to ensure that 340B drugs are given to eligible patients and no duplicate discounts have occurred. Our third-party vendors, who assist us with split billing, contract pharmacy, and in-house management of our pharmacies and claims, also conduct their own checks and balances to guarantee that only 340B eligible claims are qualified. UC Health also employs the services of independent third-party auditors to conduct a comprehensive audit of our 340B Programs on an annual basis. Shift in Data Collection A rebate model would significantly change our current data collection activities, introducing both one-time and ongoing changes. On a one-time basis, our organization would need to build entirely new reports from scratch, configure new data submission workflows, and establish 1 https://www.aha.org/2022-11-14-survey-brief-drug-companies-reduce-patients-access-care-limiting-340b-community- pharmacies Administrator Engles April 20, 2026 Page 9 of 14 validation and reconciliation processes that do not currently exist. On an ongoing basis, daily collection, manual validation, and submission of rebate claims data would be required across systems not designed for this purpose. Establishing a Centralized Platform for Data Submissions The current framework allows each drug company to establish its own process for making the 340B price available under the rebate model. Despite the guardrails provided, each drug company has been given the latitude to use its own IT platform and require a different set of data elements to submit for a rebate. As a result, our hospitals would have to manage many different rebate model schemes. We cannot overstate the complexity and administrative burden this will introduce. This is an example of unnecessary and inefficient variation in the health care system that contributes to an estimated 30% of all health care spending going toward administration instead of patient care.2 Under the current framework, our hospitals would submit data to IT platforms that are either directly owned by drug companies or by third parties that work closely with drug companies. These IT platforms will not be neutral parties. We are concerned about the risk of conflicts of interest or improper use of the data for purposes outside the scope of this rebate model pilot program. For example, one of the IT platforms that will likely be used by some of the drug companies Beacon by Second Sight Solutions is a wholly owned subsidiary of the Berkeley Research Group (BRG), which is a consulting firm that has a long history of working for drug companies and their trade association, PhRMA.3 BRG has released a number of reports funded by PhRMA and critical of the 340B Program.4 In addition, Second Sight Solutions is also the parent company of 340B ESP, the IT platform of choice for several drug companies that have imposed unlawful 340B contract pharmacy restrictions.5 HRSA should impose strict guidelines on how information may be used specifically, restricting the use of that information to exclusively those purposes necessary to implement the limited pilot program. In addition, HRSA should strictly penalize drug companies if information is used for any other purpose. Such penalties should be proportional to, and compensate covered entities for, the value of the information that is improperly exploited. To most effectively remedy these concerns, HRSA should identify and engage a single neutral, third-party entity to serve as a clearinghouse for any data submissions required under the agencys rebate model. The agency already has a potential solution; in the calendar year (CY) 2026 Physician Fee Schedule rule, the Centers for Medicare & Medicaid Services (CMS) proposed to pilot a 340B claims data repository for use in identifying 340B units for the calculation of Medicare inflation rebates required under the IRA.5 HRSA could use this same 2 https://www.commonwealthfund.org/publications/issue-briefs/2023/oct/high-us-health-care-spending-where-is-it-all-going 3 https://beaconchannelmanagement.com/ 4 https://media.thinkbrg.com/wp-content/uploads/2024/05/13163125/340BProgram_Relative_Size_WP_2022Update.pdf 5 https://www.340besp.com/ Administrator Engles April 20, 2026 Page 10 of 14 repository for the rebate model pilot program. This would (1) minimize some of the administrative burden associated with the rebate model by allowing hospitals to submit claims data to a single entity; (2) limit the ability of drug companies to use any data for reasons outside the scope of this rebate model; and (3) allow the agency to more easily oversee the pilot program. VII. Duplicate Discount Prevention: Current Practices and Rebate Model Implications Duplicate Discount Prevention UC Health has robust duplicate discount prevention processes in place that are largely automated and require minimal manual intervention. Claim-level identifiers are applied for all 340B eligible Medicaid transactions, automatically as mandated by California State Medicaid requirement. Any rebate model should be designed exclusively to avoid duplicate discounts prohibited by 340B statute; specifically rebates paid to a State Medicaid Program (per 42 U.S.C. 256b(a)(5)(A)). UC Health recommends that any data submission requirements under a potential 340B Rebate Model Program be strictly limited to the minimum data elements necessary to identify and prevent duplication under the IRA. For pharmacy claims, we recommend limiting required data elements to the following: claim ID, date of service, 11-digit NDC, and quantity dispensed for Medicare Part D claims only. Payer information should not be required, as under the IRA, claims information is already transmitted to manufacturers through the MTF. Submitting payer data is duplicative and unnecessary for duplicate discount identification purposes. The original 340B Rebate Pilot Program's data specifications included additional fields such as prescriber ID, service provider ID, BIN, and PCN numbers, none of which are necessary solely for the purpose deduplication. Extensive data requirements introduce unnecessary privacy risk and administrative burden. UC Health strongly recommends that HRSA refrain from requiring medical claims data submission entirely. If the primary goal of the rebate model is to deduplicate claims under the IRA, there is no basis for collecting non-Part D claims data, as the 10 IRA drugs selected for the current pilot are all Medicare Part D drugs and Medicare Part B drugs are not subject to Maximum Fair Price (MFP) under the Medicare Drug Negotiated Program (MDPNP) until 2028 at the earliest. Requiring medical claims data, including health plan ID, payer name, or any other payer-related fields, would impose a significant and unnecessary administrative burden on covered entities without any corresponding program integrity benefit. HRSA should revisit medical claims data requirements only if and when Medicare Part B drugs are included in a future iteration of the rebate model. Duplicate Discounts Become Harder to Prevent Under a Rebate Model Under the current system, 340B identifiers are automatically attached to Medicaid claims at the Administrator Engles April 20, 2026 Page 11 of 14 time of billing and no manual steps are required. This built-in safeguard effectively eliminates the risk of duplicate discounts. A rebate model would dismantle that safeguard. Claims would initially be billed at full price (WAC), and the 340B identifier would only be applied later manually after the manufacturer rebate is received and the claim is rebilled. This creates several problems: Timing conflict: Prior to last year's rebate pilot, Californias Medicaid agency issued guidance that 340B claims must be held until the rebate is received. This causes two issues: first, the provider has to adjudicate the claim to determine the patients liability before the drug is dispensed. Second, to receive a rebate, covered entities must submit claims information to the manufacturer. This puts covered entities in an impossible position as they cannot hold Medicaid claims, dispense the drug, and have claim-level information to submit for a 340B rebate simultaneously Cash flow risk: Holding claims delays reimbursement, creating direct financial strain on covered entities. Human error risk: Because rebilling is entirely manual, there is a real risk that a covered entity receives the manufacturer rebate but never completes the rebilling step. The result: the state reimburses at full price while the covered entity has already received the rebate exactly the duplicate discount scenario the rebate model is supposed to prevent. In short, the current automated process prevents duplicate discounts by design. A rebate model would replace that with a manual, error-prone process that increases the very risk it claims to address. Challenges Encountered with the Maximum Fair Price under the Medicare Drug Negotiated Program Since the program started on January 1, 2026, UC Health has implemented several operational and administrative changes to manage the intersection of 340B and Medicare Drug Negotiated Program (MDNP) and the Maximum Fair Price (MFP). We have implemented claim-level identifiers to flag 340B eligible Part D transactions to prevent duplication, but our staff is still required to regularly review claims through the manufacturer rebate portal to identify and correct instances where 340B-eligible claims have been incorrectly classified as non-340B. Since January 1, 2026, UC Health has encountered numerous instances where manufacturers have not correctly applied the non-duplication provision, resulting in non-340B claims being incorrectly identified as 340B in the manufacturer rebate portal, effectively denying us access to the MFP on those claims. Upon identifying these discrepancies through our claim-level review process, we have been required to actively dispute these claims directly with manufacturers. This dispute has been particularly burdensome, as manufacturers are arbitrarily attaching 340B invoices to the non-340B claim and requesting claim-level data to support dispute resolution. Administrator Engles April 20, 2026 Page 12 of 14 Furthermore, the only path to recovering the rebate on these disputed claims is submitting 340B claims, predominantly non-Part D, to a separate manufacturer portal so that the invoice number can be dissociated from the claim and the rebate processed accordingly. This process is entirely new, highly manual, not scalable at our transaction volume, and is consuming a significant and unanticipated amount of staff time with no clear or consistent resolution timeline across manufacturers. VIII. Required Reporting To ensure meaningful oversight and accountability under a potential 340B Rebate Model Program, UC Health recommends that HRSA establish robust and standardized manufacturer reporting requirements submitted monthly. At minimum, manufacturer reporting requirements should also include quarterly aggregate summaries. Specifically, manufacturers should be required to report the following data elements to HRSA: Total rebate requests received, including the number of claims and corresponding dollar amounts Total rebates paid, including payment amounts and timeliness relative to the required ten calendar day payment window (based on last years pilot) Total rebates paid outside of the required payment window, including the number of claims, dollar amounts, and reasons for delayed payment Total rebates denied, including the number of claims, dollar amounts, and specific documented reasons for each denial The rate of denial by claim type, drug, and covered entity type Total good faith inquiries that are currently open, including the number of claims associated with each open inquiry and the length of time each inquiry has been pending Total good faith inquiries resolved, including resolution timelines and outcomes Any operational or systems issues experienced by the manufacturer or its contracted platform that resulted in claim processing delays or errors UC Health recommends that HRSA require the following data publicly available on a quarterly basis to enable transparent program evaluation by covered entities, policymakers, and other stakeholders: Aggregate rebate payment and denial rates by manufacturer and by drug Aggregate denial reasons across all participating manufacturers Average rebate payment timelines by manufacturer The number and dollar value of outstanding good faith inquiries; and any patterns of non- compliance with payment timeliness requirements Publicly disclosing these data is critical to hold manufacturers accountable and ensure that covered entities and HRSA have the information necessary to identify systemic issues. Administrator Engles April 20, 2026 Page 13 of 14 IX. 340B Program Integrity Commitment to Transparency To promote transparency, the 340B Program is subject to HRSA oversight, enforcing strict compliance rules. UC Health adheres to 340B compliance rules and is transparent about its use of 340B savings. These enforcement efforts include an annual recertification for all covered entities and audits of both providers and manufacturers to ensure program integrity. HRSA has conducted over 2,200 audits on 340B covered entities since 2012. Each UC academic health center that participates in the 340B Program, has signed the Americas Hospital Association, 340B Good Stewardship Principles which include commitments to communicate the value of the 340B Program, disclose 340B estimated savings that are calculated using a standardized method, and continue rigorous internal oversight of our participation in the program. This information is posted on public websites: UC Davis Health: https://health.ucdavis.edu/news/public-reporting/340b-program UC San Francisco Health: https://www.ucsfhealth.org/about/our-340b-story UC Los Angeles Health: https://www.uclahealth.org/discover/about-ucla- health/government-relations/340b-community-health-program UC Irvine Health: https://www.ucihealth.org/patients-and-visitors/financial- resources/insurance/340b-program UC San Diego Health: https://health.ucsd.edu/about-us/340b-program/ In addition, HRSAs own 340B audit data show that between fiscal years (FY) 2018 and 2022, audit findings across 340B hospitals for duplicate discount and diversion decreased by a combined 62%.6 Only 10.7% of 340B hospital audits had at least one finding of diversion; just 13.2% had a duplicate discount finding in FY 2022.7 UC Health has developed robust internal audit protocols to conduct periodic self-audits of our 340B Program; ensuring compliance by preventing diversion and duplicate discounts. In contrast, between FYs 2018 and 2022, 60% of drug companies had at least one adverse audit finding. And the trends are even more notable with respect to audit findings requiring repayment. In FY 2022, 75% of drug companies that were audited required repayment to 340B hospitals while only 28% of 340B hospitals audit findings involved any repayments.8 The data show that HRSA conducts approximately 160 audits of 340B hospitals annually or about 6% of the 340B hospital field. By contrast, it conducts roughly five audits of drug companies or about 0.6% of participating drug companies.9 In combination with the data showing the rate of audit findings for drug companies in a much smaller sample size, this discrepancy underscores the need for more scrutiny on drug 6 https://www.aha.org/guidesreports/2025-06-16-more-drug-company-oversight-needed-maintain-compliance-340b-program- rules 7 Id. 8 Id. 9 Id. Administrator Engles April 20, 2026 Page 14 of 14 companies. Drug companies are advocating for a 340B rebate model as a solution to a problem that does not exist. HRSA should reconsider the implementation of a 340B rebate model pilot program. While UC Health appreciates the opportunity to provide feedback, a rebate model would limit covered entities ability to support current levels of community benefits and fund critical patient care programs and services. UC Health uses savings in many ways, including funding a range of community benefits. UC Health utilizes 340B savings to provide a variety of clinical care to Medicaid and underserved patients including access to specialty programs that perform lifesaving treatments. Examples of complex care include organ transplants, complex cancer care, immunological care (including stem cell transplants), neurological care, cardiovascular care, and heart surgery. Under a rebate model, UC Health will need to advance millions of dollars to drug companies, coupled with the potential for rebate delays and denials, and have fewer funds to devote to providing community benefits. Similarly, UC Health will have fewer savings to invest in maintaining, improving, and expanding access to an array of vital patient programs and services; it is critical for HRSA to develop strict safeguards for a 340B Rebate Model Program. UC Health urges HRSA to offer a concrete and detailed rebate model pilot program proposal for comment prior to attempting such a drastic change in policy that would have adverse impacts on providers and patients. We appreciate your careful consideration of these issues and are ready to collaborate on solutions that strengthen this vital safety-net program. If you have any questions, please contact Kent Springfield at (202) 993-8810 or kent.springfield@ucdc.edu. Sincerely, Tam Ma Associate Vice President, Health Policy and Regulatory Affairs UC Health
HRSA-2026-0001-1987Valley Wide Health Services2026-04-20T04:00Z2,634 chars
See attached file(s) TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Celina Espinoza, patient board member of Valley-Wide DATE: Apr. 07, 2026 RE: Comments on HRSA's Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 My name is Celina Espinoza and I am a patient board member of Valley-Wide Health Systems. I have served in this capacity for ten years. Valley-Wide is a Federally Qualified Health Center providing primary and preventive care at 34 service sites located throughout 14 rural counties in Southern Colorado covering over 31,000 square land miles. Valley-Wide provides medical, dental, behavior health, pharmacy, physical therapy, and crisis services to 35,907 patients. The potential 340B Rebate Model Pilot Program, as proposed by the Health Resources and Services Administration (HRSA), would be detrimental to Valley-Wide's financial operating margins and it would directly and negatively impact myself, as a patient. While I don't have any major medical issues, I do use the 340B program to purchase preventive medications; statins, hypertension and thyroid. Through my Community Health Center Pharmacy I have easy access to these medications at a discounted affordable price. I am retired and live on a fixed income that does not keep pace with rising consumer prices. It is nice to have the cushion of the 340B knowing that my medications will be affordable and not subject to high inflation. I hope that CHCs will be exempt from any proposed rebate and continue to safety net medications for rural and medically underserved populations l urge you to reconsider a 340B rebate model and, at the very least, exempt CHCs from any proposed or pilot rebate model for the 340B program. The ultimate goal of the program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers "stretch scarce Federal resources as far as possible," and provide discounted medications to patients upfront. CHCs are already statutorily required to pass the discounted price onto the patient ensuring that we, the patients, see the full, intended benefit of the program. Personally, the 340B program allows me to stay healthy, manage my health, and afford the medications that I, and my family member(s), need. Thank you Celina Espinoza, Vice Chair Valley Wide Board Health Services.
HRSA-2026-0001-1988Community Access National Network2026-04-20T04:00Z7,635 chars
Please See Attached. April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs, HRSA 5600 Fishers Lane, Mail Stop 14W52, Rockville, MD 20857 Submitted Via Electronic Portal RE: HRSA Notice Application Process for the 340B Rebate Model Program (HRSA-2026-03042) Dear Ms. Britton and the Office of Pharmacy Affairs: The Community Access National Network (CANN) respectfully submits the following comments regarding the proposed 340B Rebate Model Program, published February 23, 2026. ABOUT CANN: The Community Access National Network (CANN) is a 501(c)(3) national nonprofit organization (formerly incorporated under the "Ryan White CARE Act Title II Community AIDS National Network") focusing on public policy issues relating to HIV/AIDS and viral hepatitis. CANN's mission is to define, promote, and improve access to healthcare services and supports for people living with HIV/AIDS and/or viral hepatitis through advocacy, education, and networking. CANN's coalition-based work is done on behalf of the patient advocacy groups, pharmaceutical partners, and government agencies. CANN strongly supports a rebate-based model for the vast majority of 340B transactions. The AIDS Drug Assistance Programs (ADAPs) administered in every U.S. state and territory have successfully operated under such a model for nearly the entirety of the 340B program. Their experience demonstrates that rebate systems can enhance program integrity, protect access, and streamline oversight when implemented with statutory clarity. Similarly, ADAPs represent a Gold Standard in terms of patient benefit when 340B works as originally intended. The Rebate Model Already Works The rebate model is not a novel or untested idea. ADAPs have proven for decades that rebate mechanisms can be effective, transparent, and fully compliant with the statutory protections of the 340B program. These systems already safeguard against duplicate discounts and maintain patient access without the need for up-front discountsproving that prospective pricing is not the only viable method. Community Access National Network (CANN) www.tiicann.org RE: RE: HRSA Notice Application Process for the 340B Rebate Model Program (HRSA-2026-03042) April 20, 2026 Page Two The voluntary nature of the program, as described in the General requirements under item 3, degrades the quality of data gathering associated with the program. Given complaints offered by CEs related to a Rebate Model, even the most casual observer would appropriately conclude that maintaining current distribution mechanisms for selected medications and making Rebate engagement optional would necessarily mean no or few CEs would opt for the Rebate Model. This suggestion needs clarification both as to implementation and intent. Disproportionate Share Hospitals Are Fully Equipped to Absorb Any Shift Concerns from large covered entities (CEs) particularly major disproportionate share hospital (DSH) systems about rebate model burdens must be viewed in context. These entities operate with substantial revenues, often far exceeding the entire federal 340B awards provided to all state ADAPs. Any concerns about the transition from discount to rebate reflect, at most, a change in cash flow timing, not in total financial benefit. If covered entities are not exploiting the program, there should be no substantive concern with the rebate model. The same dollars are simply moving later in the claims process not being withheld or denied arbitrarily. Those raising alarm are effectively arguing that oversight, transparency, or delayed benefit somehow threatens access which only makes sense if the financial benefit is not aligned with actual patient care delivery. Concerns expressed by some covered entities that rebates may be denied based on such audits are misplaced. Statutorily-allowable audits and limitations are not evidence of abuse they are the legally required tools that preserve program integrity. Indeed, the intensity of pushback from certain CEs, absent any evidence that claims would be denied, raises important questions. If a CE is fearful of a system that enforces basic statutory compliance regarding prohibition on duplicate discounts, it may suggest that the CEs current claims could not survive scrutiny. Such behavior warrants oversight, not accommodation. The Models Limitation to Medicare Violates the 340B Statute While the rebate model applies only to drugs subject to Medicare negotiation, the program explicitly excludes Medicaid duplicate discount protections under the rebates header, item 13 (pg 7). This is a fundamental violation of the 340B statute, which requires manufacturers to ensure that no unit of drug receives both a 340B discount and a Medicaid rebate. Preventing manufacturers from identifying duplicate Medicaid rebates not only conflicts with the law, but invites large-scale exploitation of federal and state resources - the origination of many existing concerns regarding the 340B program. This flaw must be corrected before any implementation. 2 Community Access National Network (CANN) www.tiicann.org RE: RE: HRSA Notice Application Process for the 340B Rebate Model Program (HRSA-2026-03042) April 20, 2026 Page Three CANN supports the adoption of a well-structured 340B rebate model, and we stand behind the operational precedent set by ADAPs. Realigning the program with statutory requirements, andby designinvites regulatory loopholes that jeopardize the programs integrity. Covered entities that operate in good faith should welcome clarity, transparency, and compliance for the benefit of the patients they serve. Those who object to the mere possibility of statutory enforcement only reinforce concerns about potential misuse. We urge HRSA to refocus on building a permanent, comprehensive rebate framework that reflects real-world success, centers patient access and affordability, and enforces statutory accountability across all payers. Mandating Participation Will Ensure Sufficient Data CANN is concerned that if participation is made voluntary to Covered Entities (CEs) that many may opt out of this program, not due to technical or operational constraints, but because their financial models heavily rely on immediate, upfront savings. This dynamic risks undermining the success and evaluative potential of the program before it can yield meaningful data. We urge OPA to mandate participation, particularly among large covered entities that serve substantial patient populations for certain medications from selected manufacturers. This will also allow for proper evaluation on the rebate models impact on covered entities in regards to administrative burden and processes. Without widespread buy-in, the program will be unable to fully test the viability of a rebate-based model as a scalable solution. In closing, CANN supports a strong 340B program, when 340B operates with the legislations intended outcome to reach more eligible patients, and provide more comprehensive services Safety-net providers thrive, vulnerable communities and individuals receive access to healthcare and medications they otherwise would not have. Warmly in service, Kalvin Pugh Director of State Policy, 340B Community Access National Network (CANN) Jen Laws CEO Community Access National Network (CANN) 3 Community Access National Network (CANN) www.tiicann.org 4 Community Access National Network (CANN) www.tiicann.org
HRSA-2026-0001-1989NCPA2026-04-20T04:00Z17,724 chars
The National Community Pharmacists Association (NCPA) appreciates the opportunity to provide comments to HRSA on its Request for Information: 340B Rebate Model Pilot Program and Request for Information: 340B Rebate Model Pilot Program Extension. Please see attached for our full comments. NCPA appreciates the opportunity to share with HRSA our comments and suggestions. Please let us know how we can assist further, and should you have any questions or concerns, please feel free to contact me at steve.postal@ncpa.org or (703) 600-1178. Submitted electronically to: www.regulations.gov Apr. 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Information: 340B Rebate Model Pilot Program Extension] Administrator Engels, The National Community Pharmacists Association (NCPA) appreciates the opportunity to provide comments to HRSA on its Request for Information: 340B Rebate Model Pilot Program and Request for Information: 340B Rebate Model Pilot Program Extension. NCPA represents Americas community pharmacists, including 18,900 independent community pharmacies. Almost half of all community pharmacies provide long-term care services and play a critical role in ensuring patients have immediate access to medications in both community and long-term care (LTC) settings. Together, our members employ 235,000 individuals, and provide an expanding set of healthcare services to millions of patients every day. Our members are small business owners who are among Americas most accessible healthcare providers. NCPA submits these comments on behalf of both community and LTC independent pharmacies. Concerns with Scope NCPA has the following concerns regarding the scope of the 340B Rebate Model Pilot program (Pilot): There are many operational, technical, and even legal questions associated with the pilot. For example, it is not clear: 1) whether HRSA, CMS and manufacturers have the legal authority to do 340B price effectuation through a rebate model rather than an upfront discount, and if so, if this rebate model can be applied to all payers as was proposed in a previous notice,1 especially for non-Medicaid claims, under the 340B statute; 2) how the rebates will work with respect to contract pharmacies, given that contract pharmacies are not explicitly mentioned as a recipient 1 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program [HRSA-2025 and HRSA 202514619] 2 of 7 of the 340B refund in the notice; 3) if manufacturers will be able to meet the rebate turnaround times so that covered entities and contract pharmacies can maintain sufficient cash flow; and 4) how uninsured patients would receive the medications since many copays are based on the 340B price. In addition, the uncertainty surrounding whether the covered entity would even receive the rebate may lessen their comfort in continuing the uninsured program. Given the many complex questions, operational challenges, and financial risks, NCPA advises that HRSA be deliberate in pursuing this pilot, as there are many potential unintended consequences that could be disastrous for covered entities, the pharmacies that serve them, and the 340B program. Implementation Concerns According to the RFI: HRSA is now requesting comments from stakeholders to further evaluate the potential benefits and costs of a rebate model, among other topics. HRSA is issuing this RFI to seek comments from stakeholders across the continuum of the drug supply chain in order to gather information on how a rebate model would impact covered entities, manufacturers, wholesalers, State Medicaid Agencies, pharmacies, the Federal Government, and other stakeholder groups. [NCPA emphasis] NCPA has the following concerns about how a rebate model would impact pharmacies: Concerns with pilot may result in covered entities and contract pharmacies not stocking MDPN program drugs. This rebate model, because of its complicated and unclear mechanisms and delayed payment concerns, may cause covered entities and contract pharmacies to not stock drugs under the Medicare Drug Price Negotiation Program (MDPNP), which would in turn hurt the 340B program and harm access of patients to affordable drugs. Under the MDPNP, contract pharmacies may experience further delays in payment beyond those expected under the MDPNP if manufacturers do not send timely refunds. Unknown risk for contract pharmacies. The Pilot, as written, is not clear on whether contract pharmacies will be holding risk, so NCPA advises that HRSA clarify the role of contract pharmacies before finalizing the Pilot. Because it is not clear how contract pharmacies will participate in the reimbursement/rebate/claims submission process, and because of the challenges contract pharmacies face in identifying 340B claims, there is a risk contract pharmacies will opt out of the program, thereby limiting the ability of covered entities to use contract pharmacies. This will essentially put the continued participation of contract pharmacies in jeopardy, in turn limiting access for patients. NCPA interprets the proposed pilot to envision that under the pilot, the manufacturer sends the refunds to the covered entities. However, under the MDPNP, manufacturers send refunds to pharmacies. NCPA asks HRSA if under the proposed pilot, can contract pharmacies receive 340B 3 of 7 refunds, or can only the covered entities receive 340B refunds? Since an MFP rebate and 340B rebate cannot be paid on the same claim, how will reconciliation occur? Seeking clarity on operationalization of contract pharmacy payment for drugs under the 340B rebate model and the MDPNP. Under the proposed rebate model, for drugs in the MDPNP subject to 340B pricing, NCPA believes that the plan/PBM would pay the pharmacy no more than the maximum fair price (MFP) plus any dispensing fee, and that the manufacturer would pay the remainder payment of Wholesale Acquisition Cost (WAC) minus MFP. The manufacturer would then have 14 days to pay the MFP refund after the claim gets to the Medicare Transaction Facilitator Data Module (MTF-DM), which is the minimum amount due for any drug from the manufacturer, including the 340B drug. NCPA asks clarification from HRSA that if the 340B covered entity applies for a rebate on an MFP drug after the MFP refund has been paid to the pharmacy, how will this be operationalized in the MTF-DM and the Medicare Transaction Facilitator Payment Module (MTF-PM)? NCPA believes that payment to contract pharmacies under the rebate model will occur in either of these two scenarios. NCPA asks HRSA to confirm if our assumptions below are correct: Scenario 1: If the MFP is lower than the 340B price: The contract pharmacy fills the prescription for the selected drug; The PBM/health plan pays the contract pharmacy no more than MFP plus any professional dispensing fee; The PBM/health plan sends the claim to DDPS, which in turn sends the claim to the MTF- DM, which finally sends the claim to the manufacturer; The manufacturer pays the MFP refund claim (which is likely WAC-MFP) within 14 days to the contract pharmacy; The claim is determined later to be 340B; The covered entity cannot seek a refund because the MFP is lower than the 340B ceiling price; Therefore, the total payment goes to the contract pharmacy. Scenario 2: If the 340B price is lower than the MFP: The contract pharmacy fills the prescription for the selected drug; The PBM/health plan pays the contract pharmacy no more than MFP plus any professional dispensing fee; The PBM/health plan sends the claim to DDPS, which in turn sends the claim to the MTF- DM, which finally sends the claim to the manufacturer; The manufacturer pays the MFP refund claim (which is likely WAC-MFP) within 14 days to the contract pharmacy; The claim is determined later to be 340B; Either: 4 of 7 1) The manufacturer owes an additional refund to the contract pharmacy to provide the difference between the MFP and the 340B price, OR 2) the manufacturer reverses the WAC-MFP refund payment to the contract pharmacy, the manufacturer gets a credit in the credit/debit ledger system, and then the manufacturer provides the WAC-340B refund to the covered entity for the 340B claim. NCPA stresses that it is very important that HRSA and CMS clarify these scenarios so that contract pharmacies understand the flow of payment. HRSA should work with CMS to better describe the flow of payments. This is important with respect to the contractual relationships that contract pharmacies have with covered entities. This will also affect the replenishment model which has operated for many years in reducing contract pharmacy outlays for drug product purchases for prescriptions filled for patients of the covered entity. Elimination of the replenishment approach for these drugs will increase pharmacy cost of goods and add to financial pressures. Variability in pilot programs will create significant administrative burden for contract pharmacies. NCPA is also concerned with the variability in the rebate models, as manufacturers will be submitting their own unique rebate proposals. The variability will result in significant administrative burden to pharmacies, which adds to the existing administrative burden on pharmacies having to deal with multiple manufacturer effectuation programs under the MDPNP. Contract pharmacies must have reasonable notice. NCPA seeks clarification on when and how pharmacies will receive notice; HRSAs previous notice for public comment2 merely states that the manufacturers plan ...should allow for 60 calendar days notice to covered entities and other impacted stakeholders before implementation of a rebate model, with instructions for registering for any IT platforms. NCPA requests that HRSA stipulate that at the same time the manufacturers are alerting the covered entities, the manufacturers and/or the covered entities are in turn required to inform the contract pharmacies within the same timeframe of notice of covered entities, i.e., 60 calendar days. Additionally, NCPA requests clarification of the form of notice, i.e., is an e-mail sufficient, or should the notice be delivered in certified mail, and who receives the notice. Manufacturers and plans/PBMs must not impose arbitrary restrictions on the 340B program. In any 340B rebate model, to promote beneficiary access to the pharmacies of their choice, NCPA opposes: Arbitrary manufacturer restrictions on the 340B program, which include manufacturers limiting the number of contract pharmacies that can participate in the program; PBM and plans arbitrarily limiting access for contract pharmacies, including in the following schemes: 2 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program [HRSA-2025 and HRSA 202514619] 5 of 7 o Reimbursing 340B covered entities and contract pharmacies at a lower rate than other entities not participating in the program; o Imposing differing terms (such as fees, charge-backs, or audits) on 340B participants; o Interfering with an individual's choice to receive drugs from a 340B participant; o Requiring 340B participants to identify which drugs fall within the program; o Refusing to contract with a 340B participant on the basis that they utilize the program; o Arbitrarily re-classifying pharmacies as ineligible to provide 340B if they cannot submit N1 transactions, or for other reasons; or o Denying coverage of drug because it is a 340B drug. Contract pharmacies should not be required to identify 340B claims. In any rebate model, NCPA supports CMS not requiring pharmacies to identify 340B claims, and re-emphasizes the inability of pharmacies identifying those claims either proactively or retroactively. NCPA has found that the N1 transaction is not feasible as it is not adopted by pharmacy information systems. For details of NCPAs position, see our July 2024 comments to CMS Medicare Drug Price Negotiation Program: Draft Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price (MFP) in 2026 and 2027, as well as our March 2023 comments to CMS Medicare Part D Drug Inflation Rebates Paid by Manufacturers: Initial Memorandum, Implementation of Section 1860D-14B of Social Security Act, and Solicitation of Comments. Additional Comments Additionally, NCPA has the following comments that it is still seeking clarity on from HRSAs previous notice for comment: 3 1. Plan should include assurances that all costs for data submission through an Information Technology (IT) platform be borne by the manufacturer and no additional administrative costs of running the rebate model shall be passed onto the covered entities. NCPA asks HRSA to expressly add that no additional administrative costs of running the rebate model shall be passed onto covered entities or contract pharmacies. 2. Plan should allow for 60 calendar days notice to covered entities and other impacted stakeholders before implementation of a rebate model, with instructions for registering for any IT platforms. As stated above, NCPA seeks clarification on when and how pharmacies will receive notice. NCPA requests that HRSA stipulate that at the same time the manufacturers are alerting the covered entities, the manufacturers and/or the covered entities are in turn required to inform the contract pharmacies within the same timeframe of notice of covered entities, i.e., 60 calendar days. Additionally, NCPA requests clarification of the form of notice, 3 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program [HRSA-2025 and HRSA 202514619] 6 of 7 i.e., is an e-mail sufficient, or should the notice be delivered in certified mail, and who receives the notice. [...] 4. Plan should provide a technical assistance/customer service component and ensure that opportunities to engage with the manufacturer in good faith regarding questions or concerns are made available to covered entities through both the IT platform and a point of contact at the manufacturer. NCPA asks that HRSA requires manufacturers to provide this technical assistance/customer service component to contract pharmacies as well. 5. Plan should ensure that the IT platform has assurances in place to ensure that the data is secure and protected and collection of the data is limited to the elements listed below that are necessary for providing 340B rebates pursuant to section 340B(a)(1) of the PHSA. NCPA advises that HRSA should make it clear that PBMs and health plans will not receive 340B related information on claims. NCPA is concerned that PBMs and health plans would use this information to discriminate through payments or contracting with pharmacies based on 340B utilization. [...] 7. Plan should ensure that covered entities are allowed to submit and report data (as detailed below) for up to 45 calendar days from date of dispense, with allowances for extenuating circumstances and other exceptions, including adjustments when a 340B status change occurs on a claim. As stated above, NCPA advises that HRSA should make it clear that PBMs and health plans will not receive 340B related information on claims. NCPA is concerned that PBMs and health plans would use this information to discriminate through payments or contracting with pharmacies based on 340B utilization. [...] Rebates [...] 14. Plan should ensure that 340B rebates are only paid on sales of drugs selected under the MDPNP, regardless of payer. NCPA asks that HRSA limit the Pilot to only include Medicare Part D payers and claims for the first 10 drugs under the MDPN Program, not all payers/claims covering these 10 drugs. For example, HRSA does not have authority to regulate duplicate discounts outside of Medicaid.4 4 See 42 USC 256b(a)(5)(A)(i). 7 of 7 Data All data requested [by the manufacturers] as part of the Plan should be limited to only the following readily available pharmacy claim fields: Date of Service; Date Prescribed; RX number; Fill Number; 11 Digit National Drug Code (NDC); Quantity Dispensed; Prescriber ID; Service Provider ID; 340B ID; Rx Bank Identification Number (BIN); and Rx Processor Control Number (PCN). As stated above, NCPA advises that HRSA should make it clear that PBMs and health plans will not receive 340B related information on claims. If a 340B Third Party Administrator (TPA) is making the request for the covered entity for a rebate from the manufacturer, the TPA cannot use any information captured in its other lines of business. NCPA is concerned that PBMs and health plans and administrators would use this information to discriminate through payments or contracting with pharmacies based on 340B utilization. Conclusion NCPA appreciates the opportunity to share with HRSA our comments and suggestions. Please let us know how we can assist further, and should you have any questions or concerns, please feel free to contact me at steve.postal@ncpa.org or (703) 600-1178. Sincerely, Steve Postal, JD Senior Director, Policy & Regulatory Affairs National Community Pharmacists Association
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HHS Docket No. HRSA-2026-03042
HRSA-2026-0001-1991Penobscot Community Health Care2026-04-20T04:00Z119,087 chars
HHS Docket No. HRSA-2026-03042 1 April 13, 2025 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Penobscot Community Health Care (PCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations and by extension the CHCs themselves - nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Penobscot Community Health Care anticipates a loss of 340B saving equal to about $1,204,268.10 annually from both inhouse pharmacies and contract pharmacies due to increased medication costs, manual reconciliation and potential cashflow impacting wholesaler pricing and interest from credit utilization. This projected impact factors in only the first 10 drugs which would be included in this pilot. The financial impact would continue to grow each year as more drugs are added. Projected Cost Increases: CHCs anticipate significant increases in operational costs. PCHC estimates an increase in operational costs of about $250,000 annually, which we expect to grow as the pilot expands to include more medications. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients, and implement programs and supports to meet the needs of our underserved populations. As congressional intent made clear, the program was created to help 2 safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense operational and financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PCHC in particular, this means it will impact: 136,802 340B transactions/ 45,000 patients Our ability to support services which we use 340B savings for, including o Prescription Assistance Program Our staff that ensure our patients have access to necessary medications regardless of their insurance status or ability to pay. o Reduced Cost Medications through our Inhouse Pharmacies This includes a comprehensive discount medication list offered to all patients, sliding scale discounts, and acquisition cost-based pricing on insulin and epinephrine o Primary Care Pharmacy Program Our pharmacists working in the clinics with patients with complex medication regimens and chronic diseases. These pharmacists fill a necessary void in specialty care access that exists in our service area, and they expand the capacity of primary care at a time of local and national shortages of primary care providers. o Recruitment Costs to address the shortage of primary care providers available to care for our patient population We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to lower cost medications and primary care services for the most vulnerable patients. II. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. For PCHC, we may be forced to limit the medications offered on our discount medication list or change how we extend our sliding scale program within our pharmacies. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Without those medications, their condition(s) worsen, often leading to costly hospitalizations, which, in turn, increases the total cost of care to the system and burden on taxpayers. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. These alternatives also require much more frequent clinic monitoring and blood tests that create adherence challenges and higher risk for poor treatment outcomes, especially in rural areas where transportation is a significant barrier to treatment. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity and threaten the fragile cash positions of many CHCs. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately negatively impact the most underserved patients nationwide, exacerbating inequities in a system that is already unfair to those with lesser means. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 6 Sliding Fee Discount: Penobscot Community Health Care provided $155,175.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Penobscot Community Health Care anticipates needing 2.27 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We estimate that this will cost $205,217.11 annually. External Vendor Costs: Given increased complexity, Penobscot Community Health Care anticipates an increase of at least $36,000 for costs related to external support vendors. These vendors include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.[7] At Penobscot Community Health Care we are anticipating needing at least 2.27 FTEs to meet the anticipated demand of reporting, reconciling, and ensuring compliance of the 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Between the reallocation of existing staff and hiring new employees to support the demands of this rebate model, we estimate an increase in salary expenses of $205,217.11. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Approximately 20 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Penobscot Community Health Care urges HRSA to exempt CHCs from the rebate program, but, short of that, to at least require uniformity among eligible 7 Internal NACHC Assessment (99 responses). 7 manufacturers to mitigate administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate an expense of $26,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 45,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $8000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. This would also impact how in-house pharmacies are able to price their medications. Without 340B pricing in our manufacturer's price files, setting prices will be much more challenging, and may result in increased prices charged to patients. Ongoing Resource Diversion: Staff who currently support pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 71 different pharmacy locations to ensure rebates are paid correctly. 8 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At PCHC inhouse pharmacies, having 340B pricing at the time of dispensing allows us to extend significantly reduced pricing on our Discount Medication List drugs, as well as extend sliding scale pricing, and acquisition-cost-based pricing on insulin and epinephrine to patients with a financial need. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,381,043.55 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $471,839 to purchase these same drugs at the 340B ceiling price. This represents a 717% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Penobscot Community Health Care anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as decreasing our outreach and enrollment team who is responsible for assisting patients in signing up for insurance and finding prescription assistance for them when they cant afford their medications. Additionally, we would have to look at constricting some of our services such as our primary care pharmacy line that helps patients with chronic diseases and allows the care team to take better care of them. This includes our homeless medicine team who has been the pioneers of treating the human immunodeficiency virus (HIV) outbreak in Penobscot County. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. In order for us to compliantly administer this program, we would need to expand at least 2 additional FTEs which would cause us to reduce unpaid clinical services, such as primary care pharmacy, clinic-embedded social workers, and/or RNs, that improve 12 patient outcomes and reduce clinical workloads for our strained provider workforce. In short, it will exacerbate the crisis in access to primary care. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,099 uninsured patients from rationing their essential medications. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Penobscot Community Health Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Penobscot Community Health Care estimates its 2027 Annual Rebate Opportunity Cost, using only the first 10 drugs that would be impacted by this pilot, to be approximately $1,119,105.58. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Penobscot Community Health Care estimates that purchasing the 10 13 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $281,753.63. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to seek a line of credit, reduce workforce, and reduce services that benefit our patients. This is not a sustainable solution; the interest costs alone are estimated to be $85,162.52 annuallyfunds that are currently dedicated to improving access to care for underserved populations, providing transitional housing, social workers, street medicine, food pantries, providing care that is uncompensated (primary care pharmacy), and providing discount to medications and other services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Penobscot Community Health Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Penobscot Community Health Care urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $503,666.01. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi- billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework if CHCs are not Exempted from Rebates Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications and healthcare. If HRSA proceeds with a rebatebased pricing model, which we strongly oppose for CHCS, the program must at a minimum include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must 15 revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.16 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. 16 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 16 In sum, if HRSA moves forward with the rebate pricing model, which we strongly oppose for CHCs, HRSA must, at a minimum, clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program, and contrary to congressional intent of the 340b program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use 17 timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.19 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 19 recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.22 We estimate an annual expense of $6000 per year for a single clinic location would be needed to deploy tracking functionality either within our electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 22 Internal NACHC survey data 20 VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. 21 VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,23 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.24 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.25 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these 23 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 24 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 25 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 22 favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.26 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).27 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority 26 H.R. REP. 102-384(II) 27 42 U.S.C. 256b(a)(1) 23 under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.28 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).29 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.30 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim 28 Id. 29 42 U.S.C. 256b(a)(1) 30 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 24 identification.31 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.32 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.33 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.34 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. 31 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 32 42 U.S.C. 256b(a)(5)(C). 33 42 U.S.C. 256b(a)(5)(C). 34 See 42 U.S.C 256b(a)(5)(A). 25 Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.35 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states 35 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 36 C.F.R. 447.518(a). 26 provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 38 42 C.F.R. 447.502 27 Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 28 administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. C. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 29 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). D. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 30 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. E. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 31 alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 32 to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 33 We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 34 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts 35 This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. 36 For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 37 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Penobscot Community Health Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Penobscot Community Health Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Penobscot Community Health Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kristopher Ravin, PharmD, kravin@pchc.com Sincerely, Kristopher Ravin, PharmD Executive Clinical Director of Pharmacy Penobscot Community Health Care
HRSA-2026-0001-1992Outside In2026-04-20T04:00Z93,318 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Outside In, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss between $500,000 to $3 million from entity-owned pharmacy operations and an average 25% reduction in 340b savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Established in 1968, Outside In was one of the first free community health clinics in the U.S. Originally established to serve Portland, Oregons homeless youth, the organization has continued to expand services based on the needs of clients and patients, including medical services for adults, substance use disorder treatment, access to food, education and employment support, onsite and community-based housing, and more. In 2025, the organization employed nearly 200 staff members, engaged approximately 150 volunteers, and served more than 10,000 people, addressing client needs through wraparound support to achieve stability and self-determination. Today, Outside In is a Health Care for the Homeless Federally Qualified Health Center, a licensed Mental Health and Substance Use Treatment Provider, a School-Based Health Center, a founding member of the Multnomah County Homeless Youth Continuum (HYC), and an approved Veterans Affairs Patient-Centered Community Care Program provider. The agency offers integrated 2 medical and behavioral health care including an on-site pharmacy, substance use treatment, and social services at seven locations in the Portland Metro area. In 2025, more than 5700 people received primary health care services across our clinic locations, with 70% living at or near the federal poverty line. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Outside In, in particular, this means it will impact: o 5,709 patients received primary care at Outside In o 1,488 primary care patients self-identified as being unhoused or unstably housed o 1,602 patients served through the onsite pharmacy o 23,306 prescriptions filled through onsite pharmacy For Outside In, current administrative costs for the 340B program includes: o Approximately $150,000 per year in administrative costs to run the 340b program. This comprises of an in-house pharmacy and 3 clinic locations that utilize 304b medications for clinic administered medications and provider dispensed meds. o Additionally, $12,500 is currently spent on inventory tracking software for 340b clinic stock o Pharmacy dispensing software costs approximately $150,000 per year. Outside In relies on 340b revenue to support our patients: o 340b savings are used to help fund medication access for uninsured/underinsured patients o Clinical pharmacy visits and medication reconciliation programs o Chronic disease state management programs for diabetes, hypertension, hyperlipidemia and Hepatitis C. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the 3 affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Outside In provided approximately $600,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Outside In anticipates needing an additional 0.5 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Outside In anticipates an increase of $50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 At Outside In, our entire 340b pharmacy program operates with essentially 2 FTE pharmacists, and 2 FTE pharmacy technicians. Hiring even a staff member at 0.5 FTE to implement the rebate model, a conservative estimate based on NACHC assessments, would result in 12% of our total pharmacy FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Outside In Pharmacy currently operates at a deficit but provides essential services for our patients. The added expense associated with the rebate program is not supported by revenue and poses an existential threat to Outside Ins pharmacy program. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We are estimating that an additional 5 hours per week will initially be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Outside In urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5709 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $50,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Outside In Pharmacy uses Pioneer Rx as our pharmacy dispensing system. Since we are one location, we are required to figure out implementation on our own, without a lot of additional support. Although we are a small pharmacy system overall, implementation is essentially the same as a larger system, which results in a greater percentage of overall staff time being used to research and develop plans for implementation. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently does not partner with any contract pharmacies. We previously had contract pharmacy arrangements, but operational costs outpaced revenue generation and we unfortunately had to cancel the contracts. We rely on our in-house 7 pharmacy to increase access to affordable medications. A number of colleagues have expressed concerns that the rebate model will have a negative impact on contract pharmacy arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that TPAs will pass on the costs of developing rebate-tracking modules through increased per-claim fees. In our experience, TPA fees were the reason we needed to cease contract pharmacy arrangements. Verification Latency: The rebate model creates a reconciliation gap. Staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, it is feared that contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in many parts of Oregon with no affordable medication options. According to a 2024 Associated Press study, Oregon was second to last, next to Alaska, in pharmacy access per capita. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Outside In maintains a safety net formulary of medications that we are able to provide to our patients on a sliding fee scale. If the patient is unable to pay, they are still able to receive the safety net medication. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $104,648.21 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $86.54 to purchase these same drugs at the 340B ceiling price. This represents a 121,056% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Outside In anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as pharmacists providing support to our clinic providers. This includes prompt responses to drug information requests, pre-visit medication reconciliations and formulary navigation assistance. These services streamline the patient visit and allow providers to spend more time with their patients. Additionally clinical pharmacy services would also be reduced. This includes medication therapy management appointment and disease state management appointment for conditions like hepatitis C and Type 2 Diabetes. Operating Hours: Community health center pharmacies may be required to scale back operating hours in an attempt to reduce costs. At Outside In, we have already scaled back operating hours for our in-house pharmacy and clinical pharmacy appointments. Further reduction in hours would significantly affect patient access. As an example, if the pharmacy was closed a couple mornings a week, that is difficult for patients to keep track of. It would result in further loss of revenue, as patients with other options opt to fill prescriptions elsewhere (i.e. using insurance at retail pharmacy), since our hours are not competitive with the market. This may not even be an option in rural areas with limited pharmacy access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund clinical pharmacists and pharmacy technicians. 11 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 974 uninsured/underinsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Outside In asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Outside In estimates its 2027 Annual Rebate Opportunity Cost to be approximately $150,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Outside In estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $9,000. This number may not seem significant but is an approximate 25% increase in monthly drug spend. For the 10 selected drugs specifically, this represents a significant increase of 121,056% in monthly drug spend and required upfront capital. Each year as new MFP drugs are added, this will have a snowballing effect as the list continues to grow. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either take our additional lines of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $20,000 annuallyfunds that are currently dedicated to ensuring medication access and safety among our 12 patients through our in-house pharmacy and clinical pharmacy programs. The resulting effect of forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Outside In, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Outside In urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $5,232 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 14 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Outside In strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Outside In believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Outside In appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mindy Butler, Pharmacy Director at Outside In. Mindyb@outsidein.org. Sincerely, 15 Tina Kirk Chief Financial Officer Outside In April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Outside In, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss between $500,000 to $3 million from entity-owned pharmacy operations and an average 25% reduction in 340b savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Established in 1968, Outside In was one of the first free community health clinics in the U.S. Originally established to serve Portland, Oregons homeless youth, the organization has continued to expand services based on the needs of clients and patients, including medical services for adults, substance use disorder treatment, access to food, education and employment support, onsite and community-based housing, and more. In 2025, the organization employed nearly 200 staff members, engaged approximately 150 volunteers, and served more than 10,000 people, addressing client needs through wraparound support to achieve stability and self-determination. Today, Outside In is a Health Care for the Homeless Federally Qualified Health Center, a licensed Mental Health and Substance Use Treatment Provider, a School-Based Health Center, a founding member of the Multnomah County Homeless Youth Continuum (HYC), and an approved Veterans Affairs Patient-Centered Community Care Program provider. The agency offers integrated medical and behavioral health care including an on-site pharmacy, substance use treatment, and social services at seven locations in the Portland Metro area. In 2025, more than 5700 people received primary health care services across our clinic locations, with 70% living at or near the federal poverty line. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Outside In, in particular, this means it will impact: 5,709 patients received primary care at Outside In 1,488 primary care patients self-identified as being unhoused or unstably housed 1,602 patients served through the onsite pharmacy 23,306 prescriptions filled through onsite pharmacy For Outside In, current administrative costs for the 340B program includes: Approximately $150,000 per year in administrative costs to run the 340b program. This comprises of an in-house pharmacy and 3 clinic locations that utilize 304b medications for clinic administered medications and provider dispensed meds. Additionally, $12,500 is currently spent on inventory tracking software for 340b clinic stock Pharmacy dispensing software costs approximately $150,000 per year. Outside In relies on 340b revenue to support our patients: 340b savings are used to help fund medication access for uninsured/underinsured patients Clinical pharmacy visits and medication reconciliation programs Chronic disease state management programs for diabetes, hypertension, hyperlipidemia and Hepatitis C. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Outside In provided approximately $600,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Outside In anticipates needing an additional 0.5 FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Outside In anticipates an increase of $50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. At Outside In, our entire 340b pharmacy program operates with essentially 2 FTE pharmacists, and 2 FTE pharmacy technicians. Hiring even a staff member at 0.5 FTE to implement the rebate model, a conservative estimate based on NACHC assessments, would result in 12% of our total pharmacy FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Outside In Pharmacy currently operates at a deficit but provides essential services for our patients. The added expense associated with the rebate program is not supported by revenue and poses an existential threat to Outside Ins pharmacy program. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We are estimating that an additional 5 hours per week will initially be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Outside In urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5709 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $50,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Outside In Pharmacy uses Pioneer Rx as our pharmacy dispensing system. Since we are one location, we are required to figure out implementation on our own, without a lot of additional support. Although we are a small pharmacy system overall, implementation is essentially the same as a larger system, which results in a greater percentage of overall staff time being used to research and develop plans for implementation. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently does not partner with any contract pharmacies. We previously had contract pharmacy arrangements, but operational costs outpaced revenue generation and we unfortunately had to cancel the contracts. We rely on our in-house pharmacy to increase access to affordable medications. A number of colleagues have expressed concerns that the rebate model will have a negative impact on contract pharmacy arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that TPAs will pass on the costs of developing rebate-tracking modules through increased per-claim fees. In our experience, TPA fees were the reason we needed to cease contract pharmacy arrangements. Verification Latency: The rebate model creates a reconciliation gap. Staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, it is feared that contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in many parts of Oregon with no affordable medication options. According to a 2024 Associated Press study, Oregon was second to last, next to Alaska, in pharmacy access per capita. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Outside In maintains a safety net formulary of medications that we are able to provide to our patients on a sliding fee scale. If the patient is unable to pay, they are still able to receive the safety net medication. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $104,648.21 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $86.54 to purchase these same drugs at the 340B ceiling price. This represents a 121,056% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Outside In anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as pharmacists providing support to our clinic providers. This includes prompt responses to drug information requests, pre-visit medication reconciliations and formulary navigation assistance. These services streamline the patient visit and allow providers to spend more time with their patients. Additionally clinical pharmacy services would also be reduced. This includes medication therapy management appointment and disease state management appointment for conditions like hepatitis C and Type 2 Diabetes. Operating Hours: Community health center pharmacies may be required to scale back operating hours in an attempt to reduce costs. At Outside In, we have already scaled back operating hours for our in-house pharmacy and clinical pharmacy appointments. Further reduction in hours would significantly affect patient access. As an example, if the pharmacy was closed a couple mornings a week, that is difficult for patients to keep track of. It would result in further loss of revenue, as patients with other options opt to fill prescriptions elsewhere (i.e. using insurance at retail pharmacy), since our hours are not competitive with the market. This may not even be an option in rural areas with limited pharmacy access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund clinical pharmacists and pharmacy technicians. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 974 uninsured/underinsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Outside In asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Outside In estimates its 2027 Annual Rebate Opportunity Cost to be approximately $150,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Outside In estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $9,000. This number may not seem significant but is an approximate 25% increase in monthly drug spend. For the 10 selected drugs specifically, this represents a significant increase of 121,056% in monthly drug spend and required upfront capital. Each year as new MFP drugs are added, this will have a snowballing effect as the list continues to grow. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either take our additional lines of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $20,000 annuallyfunds that are currently dedicated to ensuring medication access and safety among our patients through our in-house pharmacy and clinical pharmacy programs. The resulting effect of forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Outside In, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Outside In urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $5,232 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Outside In strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Outside In believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Outside In appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Mindy Butler, Pharmacy Director at Outside In. Mindyb@outsidein.org. Sincerely, Tina Kirk Chief Financial Officer Outside In
HRSA-2026-0001-1993Dr Neal · WAYNESBURG, PA, United States2026-04-20T04:00Z793 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. As a provider, I worry that higher upfront drug costs will lead patients to decline medications I know they need, forcing clinical compromises based on affordability rather than best practice. Patients served by community health centers are more likely to delay or skip medications due to cost. Removing the upfront 340B discount increases the likelihood of nonadherence, leading to preventable complications and emergency care. The rebate model shifts financial risk onto providers serving low-income populations, effectively penalizing health centers for caring for the most vulnerable patients. Please exempt all FQHCs from the 340 Rebate Model Pilot Program. Thank you Dr. Neal
HRSA-2026-0001-1994America's Essential Hospitals2026-04-20T04:00Z74,979 chars
Please see the attached file on behalf of America's Essential Hospitals. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Thank you for the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. For the past two years, we have shared with the agency our serious concerns about rebate models and the harm that they would cause to the patients that our hospitals serve. These models are not necessary to implement the Medicare Drug Price Negotiation Program (MDPNP) and are nothing more than an attempt by drug manufacturers to boost their profits at the expense of safety net providers. Now that federal courts have stopped the Health Resources and Services Administration (HRSA) from implementing its proposed rebate pilot because it did not fully consider the concerns of covered entities, we urge HRSA to review and respond to our evidence of rebate models real-world impact before further upending the 340B Drug Pricing Program. Below, we summarize our general concerns with rebate models and provide detailed responses to the questions that the agency raised based on our members real-world experience preparing for the rebate pilot. Overall, we estimate continuing HRSAs proposed rebate model would result in $1.51.6 billion in direct costs and $3.7$4.6 billion in total costs for hospitals in 2027 alone. These burdens would disproportionately harm essential hospitals, which account for 9% of 340B hospital covered entities but would bear approximately 15% of the added costs. Americas Essential Hospitals is the leading association and champion for hospitals dedicated to high-quality care for all, including those who face social and financial barriers to care. Since 1981, Americas Essential Hospitals has advanced policies and programs that promote health and access to health care. We support our more than 400 members with advocacy, policy development, research, education, and leadership development. Communities depend on essential hospitals for care across the continuum, health care workforce training, research, public health, and other services. Supported by Essential Hospitals Institute, the associations research and education arm, essential hospitals innovate and adapt to lead all of health care toward better outcomes and value. 2 Essential hospitals are committed to serving people in all communities that need access to quality care. Despite making up just 6% of hospitals nationwide, essential hospitals provide 29% of the nations charity care. About three-quarters of the patients our members serve are uninsured or enrolled in Medicaid or Medicare.1 In addition, nearly two-thirds of essential hospitals provide services to rural patients and communities.2 To meet patient needs, essential hospitals constantly work to improve quality and access, including access to essential services that would otherwise be unavailable in their communities, all while lowering health care costs and spending. Unfortunately, much of the care that essential hospitals provide to their communities is uncompensated or under-reimbursed. In 2023, essential hospitals reported $22.4 billion in unpaid costs of care. These costs contribute to the financial challenges affecting essential hospitals. In 2023, members of Americas Essential Hospitals had an aggregate operating margin of -7.1%, more than three times lower than the aggregate operating margins for all other hospitals (-2.3%).3 The 340B program is instrumental in allowing essential hospitals to stretch scarce federal resources, reach more eligible patients, and provide a wider range of services, exactly as Congress intended. Our members use 340B savings to support patient care services that would otherwise be unavailable in low-margin settings, including oncology and infusion services for uninsured patients, behavioral health programs, trauma and emergency preparedness capacity, care coordination for high-risk patients, and access to discounted or free medications.4 For more than 30 years, this program has worked as Congress intended by making sure that drug manufacturers do not overcharge providers that fill a safety net role. Recently, the 340B programs value has grown because for-profit drug manufacturers continue to increase prices beyond the rate of inflation. To rein in drug prices, Congress and President Trump have implemented several new policies, including MDPNP and most-favored nation policies that are intended to build on the 340B programs success. Unfortunately, several drug manufacturers have tried to use the implementation of these policies as a pretext for shirking their responsibilities to provide up-front discounts through the 340B program. Although spending on 340B covered drugs is less than 3% of global drug company revenues, for-profit drug companies have been ruthless in their attempts to boost their profits at the expense of safety net providers.5 Drug manufacturers tried to implement rebate models before the MDPNP implementation, but these efforts intensified in 2024, when multiple drug manufacturersincluding Johnson & Johnson, Sanofi, Eli Lilly, Nfovartis, and Bristol Myers Squibbsought to unilaterally impose rebate arrangements that would require covered entities to purchase drugs at full price and later submit claims for reimbursement. At the time, HRSA appropriately determined that 1 Miu R, Kelly K, Nelb R. Essential Data 2025: Our Hospitals, Our PatientsResults of Americas Essential Hospitals 2023 Annual Member Characteristics Survey. Americas Essential Hospitals. November 2025. essentialdata.info. Accessed March 31, 2026. 2 Americas Essential Hospitals. Policy Brief: Essential Hospitals Ensure Access to Care in Rural Areas. March 2025. https://essentialhospitals.org/policy-brief-essential-hospitals-ensure-access-to-care-in- rural-areas/. Accessed Feb. 19, 2026. 3 Ibid. 4 Ibid. 5 American Hospital Association. Fact Sheet: The 340B Drug Pricing Program. October 2025. https://www.aha.org/system/files/media/file/2025/10/fact-sheet-the-340b-drug-pricing-program-r-10- 2025.pdf. Accessed March 31, 2026. 3 such unilateral actions violated drug manufacturers statutory obligations and purchasing agreements, emphasizing that rebate models would fundamentally alter the structure of the 340B program, impose significant administrative costs, and shift substantial financial burden onto safety net providers. Drug manufacturers attempted to justify these proposals by citing concerns about duplicate discounts arising from the MDPNP, but both HRSA and federal courts have recognized that rebates are not the only or necessarysolution to address these issues. Despite broad and consistent stakeholder opposition, HRSA announced a limited rebate pilot program in July 2025 focused on drugs subject to negotiation in the MDPNP. With the pilot, HRSA acquiesced to drug manufacturer demands to upend 340B program operation. Additionally, HRSA imposed unnecessary administrative burden on providers and require covered entities to front hundreds of millions of dollars to drug manufacturers while they waited for rebates to process. Americas Essential Hospitals raised these legitimate concerns to HRSA through multiple letters, but after the agency failed to address them, we joined a federal lawsuit to compel HRSA to follow its responsibilities under the Administrative Procedure Act to adequately consider the impact on covered entities. Now that federal courts have stopped the implementation of a rebate pilot, we appreciate HRSAs effort to reassess the value of rebate models by requesting information from stakeholders about the harm that these models would cause. We urge HRSA to use data collected from this RFI to reevaluate whether rebate models are in the publics interest and to respond to stakeholder feedback before taking additional action to implement a rebate pilot. Unfortunately, HRSA has already issued an information collection request (ICR) that signals that the agency may expand its initially proposed rebate program in 2027 with additional drug manufacturers.6 This action appears at odds with the district court for the District of Maines ruling to consider stakeholder feedback before moving forward with implementation. Additionally, it is further evidence of the judges ruling that HRSA is attempting to fly the plane before they build it.7 Americas Essential Hospitals is willing to continue to work with HRSA to support its efforts to oversee and protect the 340B program. We hope that these comments can be the beginning of further, meaningful dialogue with the agency to ensure that the 340B program can continue to work as intended. General Concerns with Rebate Models HRSAs RFI omits some of the most important policy questions that must be considered to determine whether rebate models are in the publics interest, including: What is the effect of rebate models on the ability of covered entities to provide access to all care that their patients need? Are rebates necessary to implement the MDPNP? 6 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-NEW, 91 Fed. Reg. (Feb. 17, 2026). 7American Hospital Association v. Kennedy, No. 2:25-cv-00600-LEW, PageID #: 1185 (D. Me. 2025) 4 Is HRSAs approach to a pilot the most appropriate way to make major structural changes to the 340B Drug Pricing Program? Below, we comment on these overarching questions before responding to the specific concerns that HRSA raised in its RFI. Overall, we find that rebate models would directly harm patients by limiting access to the full range of services that essential hospitals provide. Based on this harm alone, we urge HRSA to reject any version of a rebate model. We have been particularly concerned with HRSAs proposed 340B rebate pilot program because it is based on a flawed assumption that rebate models are necessary to implement MDPNP. At a minimum, we urge HRSA to pause and review the experience of the MDPNP and providers experience preparing for the rebate pilot to make an evidence-based decision about the need to upend the 340B Drug Pricing Program. HRSAs proposed rebate model was flawed from the start because it attempted to make major structural changes to the 340B Drug Pricing Program through a pilot mechanism that was mandatory for covered entities. We urge HRSA to respect congressional intent and not make mandatory structural changes to the program without explicit authorization from Congress. Harm to Patients The 340B program exists to help safety net providers "stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."8 A rebate model inverts that purpose. By forcing essential hospitals to purchase drugs at full wholesale acquisition cost and wait for reimbursement, rebate models drain the operating funds that hospitals use to sustain services for their most vulnerable patientsredirecting money that currently funds uncompensated care directly into drug manufacturer cash flow. HRSAs RFI includes one question about how rebate models would affect patient access to covered drugs, but the agency failed to consider how rebates would affect access to the full range of services that essential hospitals provide. A rebate model not only would affect access to prescription drugs, but also limit access to the wide range of services that essential hospitals provide to low-income and uninsured patients. These include services that are necessary to access prescription drugs in the first place, whether to diagnose and prescribe treatment, or to access professionals to administer complex drugs. a. Rebate models will eliminate or curtail services on which uninsured patients depend. The 340B program allows covered entities to provide uninsured patients drugs at little or no cost, cross-subsidized by revenue from insured patients billed at full price for drugs purchased at the 340B discount. A rebate model breaks this mechanism. Under a rebate model, wholesaler pricing reflects the full wholesale acquisition cost rather than the 340B ceiling price, meaning the discounted price is no longer visible in the pharmacy billing systems that hospitals use to extend sliding-scale fees to uninsured patients. Programs our members use to provide oncology drugs, infusion services, and other high-cost therapies to uninsured patients are placed at direct financial risk; only an up-front discount structure makes these services operationally feasible. 8 H.R. Rep. No. 102-384(II), at 12 (1992). 5 b. Expected changes in uninsured rates will accelerate these harms. Recent federal legislation reducing Medicaid eligibility and marketplace subsidies is expected to substantially increase the number of uninsured Americans who depend on safety net providers. The Congressional Budget Office (CBO) projects 4.2 million more uninsured Americans in 2034 due to the expiration of enhanced premium tax credits and 10 million uninsured due to Medicaid eligibility changes.9 Using this CBO data, we anticipate hospital uncompensated care costs will rise by $466 billion over 10 years. 340B savings are even more critical to sustaining uncompensated care. HRSA should not undermine the financial foundation of safety net hospitals at precisely the moment their uninsured patient load is set to increase. c. Rebate models will undermine emergency preparedness. A rebate model will reduce essential hospitals available cash on hand, which will have far- reaching effects on drug availability beyond rebated products. The up-front discount model enables essential hospitals to maintain on-hand supplies of high-cost, low-utilization emergency drugs. Implementation of a rebate model and the resulting cash-on-hand reductions will draw down essential hospitals inventory buffers and accelerate the risks of drug shortages. For products like CroFab antivenomwith a wholesale acquisition cost of $6,396 per unit hospitals purchasing under a rebate model pay full cost up front and wait, potentially for months, until the product is used and a rebate is paid.10 For the 59% of essential hospitals operating with less than two weeks of cash on hand, that float is not manageable.11 With reduced inventory of emergency drugs, hospitals face a greater risk that critical therapies are unavailable when urgently needed. As more drugs enter the Medicare negotiation program, this harm will compound and provide inflationary pressure on pharmacy inventory spend. Rebate Models Are Unnecessary to Implement the MDPNP Drug manufacturers have claimed for years that rebate models are the only way to deduplicate 340B discounts from Medicare's maximum fair price (MFP).12,13 That claim was always overstated, and it is now refuted by experience. Since the MDPNP took full effect on Jan. 1, 2026, covered entities, drug manufacturers, and the Department of Health and Human Services (HHS) have implemented tools that allow deduplication while preserving up-front discounts. Reversing course now would disrupt the deduplication infrastructure that is already working. 9 Swagel P. Letter to Ron Wyden, Frank Pallone Jr., and Richard Neal on June 4, 2025. https://www.cbo.gov/system/files/2025-06/Wyden-Pallone-Neal_Letter_6-4-25.pdf. Accessed April 6, 2026. 10 Data Overview. Texas Department of State Health Services. https://www.dshs.texas.gov/prescription- drug-price-disclosure-program/data-overview. Accessed March 31, 2026. 11 Centers for Medicare & Medicaid Services. Medicare Cost Reports (2024). Accessed March 31, 2026. 12 Carpenter E, Stancel J. Letter to Thomas Engels on Sept. 8, 2025. https://cdn.aglty.io/phrma/global/resources/import/pdfs/Rebate%20Notice%20PhRMA%20Comments _FINAL.pdf. Accessed April 6, 2026. 13 Novo Nordisk. 340B Program Policy Update. March 2, 2026. https://340besp.com/resources/novo_nordisk/policy.pdf. Accessed April 6, 2026. 6 Congress also made its intent clear when it designed the MFP: drug manufacturers must offer covered entities the lower of the 340B price or the MFP, expressly so the two programs would work in sync. More than 160 members of Congress reaffirmed this intent in September 2025, urging HRSA to abandon the rebate pilot and warning that an unchecked rebate model would severely undermine the 340B program's purpose. Most recently, a bipartisan group of members wrote to the House Appropriations Subcommittee on Labor, HHS, and Education in March 2026 urging inclusion of bill language to bar the use of any fiscal year 2027 funds to implement a 340B rebate modelexplicitly on the grounds that HRSA's resources would be better directed toward protecting covered entities from actual and ongoing threats to the program.14 HRSA should not grant drug manufacturers a structural workaround that Congress has repeatedly declined to provide and explicitly declined to authorize with the MDPNP. a. HRSA's pursuit of rebate models is diverting attention from more pressing oversight failures. While HRSA has devoted significant resources to developing a rebate model, drug manufacturers have been unilaterally imposing new claims submission requirements on covered entities that directly contravene the 340B statute. Eli Lilly and Novo Nordisk have both implemented onerous, divergent data submission requirementsconditioning access to 340B pricing on submission of detailed patient-level claims through proprietary platformswithout statutory authority to do so. These requirements impose real administrative burdens on covered entities today, yet HRSA has not moved to stop them.15,16 The agency's continued focus on rebate model development while these abuses go unaddressed is precisely the misallocation of oversight resources against which Congress warned in its March 2026 appropriations letter. b. HRSA's own precedent confirms rebates are warranted only to expand access, never to restrict it. Since 1992, HRSA has authorized rebates in only one narrow context: AIDS Drug Assistance Programs (ADAPs). ADAPs lack a centralized distribution mechanism that makes up-front discounts operationally infeasible. That limited exception reflects a deliberate policy judgment by policymakersrebates exist to facilitate access to 340B pricing where up-front discounts cannot function, not as an alternative delivery mechanism for the program. No comparable operational constraint exists for other covered entities. Expanding rebates beyond ADAPs would replace a targeted accommodation with a sweeping structural change. c. The rebate model runs counter to the goals of the negotiation program by rewarding the most aggressive drug manufacturers. It is unreasonable to require covered entities to pay more up front for the very drugs deemed most overpriced in the market. These products were selected for the MDPNP precisely because their prices are excessiveso excessive that Congress took the 14 Matsui D, Johnson D, Dingell D, et al. Letter to Robert Aderhold and Rosa Delora on March 27, 2026. https://image.email.aamc.org/lib/fe8e13727c63047f73/m/1/3fcab183-aee3-4029-b449- c04925307f27.pdf. Accessed April 15, 2026 15 DeCubellis J. Letter to Thomas Engels on March 6, 2026. https://essentialhospitals.org/wp- content/uploads/2026/03/Novo-Nordisk-Claims-Submission-Letter.pdf. Accessed April 6, 2026. 16 DeCubellis J. Letter to Thomas Engels on Jan. 29, 2026. https://essentialhospitals.org/wp- content/uploads/2026/01/Lilly-Claims-Data-Submission-obligations-letter.pdf. Accessed April 6, 2026. 7 unprecedented step of mandating federal price negotiation. A rebate model inverts that logic, forcing resource-constrained safety net providers to shoulder the highest up-front costs for the least affordable products, while drug manufacturers retain use of those funds during the rebate period. If any reconciliation mechanism is needed, a more rational approach would require drug manufacturers to provide covered entities with access to the lower of the 340B ceiling price or the MFP at the point of sale, with any necessary adjustments occurring after the transaction. That structure would preserve statutory pricing protections without shifting financial risk onto providers. The proposed rebate model does the opposite and rewards drug manufacturers for excessive pricing while imposing additional financial strain on the safety net providers the 340B program is intended to support. A "Pilot" is Not an Appropriate Vehicle for Fundamental Structural Changes HRSA's framing of the rebate model as a limited "pilot" blatantly misstates its nature: a mandatory, nationwide, fundamental restructuring of how the 340B program works for every covered entity in the country, implemented on an accelerated timeline with no prior notice-and- comment process and no meaningful opportunity for covered entities to shape program design before being subjected to it. A program applying to approximately 14,600 covered entities across 10 of the most widely used drugs in Medicare is a "pilot" in name only. a. The pilot was voluntary for drug manufacturers but mandatory for covered entities. It is indefensible that participation in the rebate pilot will be optional for the parties that benefit from the rebate model and compulsory for the parties who are harmed by it. In the withdrawn pilot, once a drug manufacturer's plan was approved, every covered entity purchasing that drug was required to participatewith only two months' notice and before HRSA had responded to the more than 1,100 comments it received opposing the program. The pilot is a significant benefit to drug manufacturers, which gain both the float on hundreds of millions of dollars in up-front drug purchases and expanded claims data on covered entity purchasing patterns. Covered entities receive none of these benefits and bear all the costs. If HRSA moves forward with any version of a rebate pilot, participation must be voluntary for covered entities, not just for drug manufacturers. b. Rebate models abdicate HRSA's statutory oversight role to private entities. HRSA, not drug manufacturers, holds statutory authority to interpret and enforce 340B obligations. A rebate model that requires covered entities to submit claims data to drug manufactureroperated platforms transfers core oversight functions to for-profit entities with a direct financial interest in limiting 340B utilization and claims approvals. This structure allows drug manufacturers to function as primary gatekeepers of the very discounts they are obligated to providedetermining unilaterally whether claims are approved, on what timeline, and under what documentation standards. HRSA must recognize that delegating these authorities to drug manufacturers is an abdication of responsibility that Congress mandated to reside with HRSA. The 340B program statute specifically directs the Secretary to establish and implement an administrative process for the resolution of claims by covered entities that they have been 8 overcharged for drugs purchased under this section, and claims by drug manufacturers, after the conduct of audits (emphasis added).17 340B statute further clarifies that the imposition of sanctions of covered entities shall be determined by the secretary, clearly establishing that HRSA, not drug manufacturers, is responsible for evaluating program compliance. The withdrawn pilot made this problem concrete. Every participating drug manufacturer selected Beacon Channel Management as its rebate platform. This positioned a single private vendor, accountable to drug manufacturers rather than HRSA or covered entities, at the center of a mandatory federal program. Beacon refused to complete standard data security questionnaires requested by covered entities seeking to comply with Health Insurance Portability and Accountability Act Security Rule requirements. This refusal raised serious questions about the protection of patient health information transmitted through the platform. Beacon's own FAQ indicated that rebate data would be integrated with its MFP platform and used to identify and reduce rebates in Medicare, Medicaid, and commercial channelspurposes well beyond the stated scope of the pilot and directly contrary to covered entities interests. Meanwhile, Beacon made unilateral changes to claim validation requirements after program approval, with no HRSA authorization and no notice to covered entities. These are not implementation details that can be fixed at the margins. They reflect what inevitably happens when a federal program's core functions are delegated to a private entity with financial ties to the parties it is supposed to hold accountable. HRSA should not authorize any model that effectively delegates its own statutory role to the parties it is charged with overseeing. c. Any future rebate pilot must establish clear communication standards, operational safeguards, and a defined endpoint. For a program of this magnitude, HRSA must be the authoritative source of program rulesnot drug manufacturers or their vendor platforms. Any changes to program requirements must go through HRSA review and be communicated to covered entities with adequate notice before taking effect. Drug manufacturers and their designated platforms must be prohibited from making unilateral implementation changes. HHS has committed to set any effective date for a new 340B rebate program to no earlier than 90 days following the public announcement of any approval of drug manufacturers applications.18 Any change to drug manufacturer plan implementation should undergo a similar review and approval timeline so covered entities have ample time to understand, provide feedback on, and implement the changes. HRSA must also include a system fail-safe that automatically reverts to up-front 340B discounts in the event of a platform outage. For many essential hospitals that operate with fewer than two weeks of cash on hand, even a brief delay in rebate payments can threaten operations, as the Change Healthcare cyberattack demonstrated. Most fundamentally, HRSA must establish and publish clear criteria for evaluating a rebate pilotincluding a defined end datebefore implementation begins. The withdrawn pilot had no such criteria and no clear termination point: it was designed to run for "a minimum term of one calendar year," with expansion to additional drugs and drug manufacturers already signaled in 17 42 U.S.C. 256b (2024). 18 American Hospital Association et al. v. Kennedy et al., No. 2:25-cv-00600-LEW, PageID #: 1256 (D. Me. 2026) 9 HRSA's subsequent information collection request. A program with no defined endpoint, no published success metrics, and an explicit expansion trajectory is not a pilot. It is a permanent restructuring of the 340B program being implemented through administrative action rather than legislation. That distinction matters enormously. The 340B program has operated on an up-front discount model for more than 30 years because that is how Congress designed it. Whether to fundamentally change that structureshifting financial risk from drug manufacturers to covered entities on a program-wide and indefinite basisis precisely the kind of major policy decision that should come from congressional action, not agency experimentation. The Supreme Court's major questions doctrine reinforces this point: agencies do not have implicit authority to make transformative changes to longstanding programs without clear congressional authorization. If HRSA intends to make the rebate model a permanent feature of the 340B program, it should seek that authority from Congressnot manufacture it through an open-ended pilot with no exit. Responses to RFI Questions RFI Section 1: Costs to Covered Entities Americas Essential Hospitals strongly disagrees with HRSAs premise that it is possible to construct a rebate that will cause minimal impact on 340B covered entities.19 Our members have already experienced irreparable economic harm due to the withdrawn rebate pilot and have provided us with firsthand estimates of previous and future financial damages brought by rebates. Rebate models would impose significant and ongoing operational, financial, and administrative burdens on safety net providers. To quantify the costs of rebate models on essential hospitals, we used data from our members and information from HRSA to estimate the following direct costs of rebate models that would cause immediate financial harm: Staffing costs of hiring new pharmacy staff to implement the rebate model Technology costs for adapting existing systems to comply with new drug manufacturer requirements Legal fees for ensuring drug manufacturer compliance with the terms of the rebate program The costs of capital from floating funds to drug manufacturers while waiting for a rebate In addition, we also modeled the following additional costs that hospitals are likely to incur based on the way HRSA designed its initial 340B rebate model pilot: The likely costs of drug manufacturer denials of 340B discounts, which are more likely under a 340B rebate model that puts drug manufacturers in control of determining whether covered entities can access statutorily required discounts The cost of stockpiled drugs that hospitals may not be able to get rebates for because, in the regular course of pharmacy operations, some drugs may expire before they are dispensed 19 91 Fed. Reg. 7287, 7288 (Feb. 17, 2026). 10 The costs of subprime discounts that would likely be lost if 340B covered entities were required to purchase drugs at wholesale acquisition costs (WAC) Overall, we estimate that HRSA's proposed rebate pilot for MDPNP-covered drugs would cost hospitals approximately $3.7$4.6 billion in 2027. If a rebate model expanded to additional drugs and drug manufacturers, we estimate annual costs of $10.2$12.9 billion, which is nearly a quarter of the value of 340B savings for hospitals serving the safety net. In addition, we find that these costs would disproportionately harm essential hospitals. Although essential hospitals account for 9% of 340B-eligible hospitals, they would incur 15% of the added costs. This discrepancy is largely due to the higher volume of care that our members provide to low-income patients. Although the administrative costs are likely to be similar across hospitals, we find that essential hospitals will be more affected by disruptions to their cash flow and the potential risk of drug manufacturer denials of 340B discounts. These costs alone should be reason enough for HRSA to reconsider proceeding with a rebate pilot program. However, if HRSA does move forward, the agency should develop a way to hold drug manufacturers financially responsible for newfound costs that covered entities bear under a rebate model. For example, one approach would be to charge drug manufacturers a new administrative fee that HRSA would use to support and offset one-time and ongoing financial costs to covered entities. The fee could support costs associated with claims submission, information technology, and vendor costs. If a rebate pilot is authorized, HRSA should reevaluate the efficacy of the fee on a regular basis and rebate it as necessary to ensure that it adequately covers all costs of complying with the rebate pilot. If HRSA does not feel that it has the authority or capacity to hold drug manufacturers responsible for the costs of implementing the rebate pilot, then it should not move forward with authorizing this model. CURRENT ADMINISTRATIVE COSTS UNDER THE UP-FRONT 340B DISCOUNT Covered entities currently operate within a stable and well-established administrative framework that supports compliance with 340B requirements. Under existing policy, covered entities comply with requirements related to diversion prevention, duplicate discount controls, and audit readiness. Essential hospitals currently process 340B-eligible drug transactions within longstanding pharmacy, billing, and compliance workflows. In most cases, 340B compliance activities are integrated into the responsibilities of existing pharmacy and finance staff rather than requiring standalone administrative infrastructure. The number of full-time equivalent (FTE) staff involved varies by hospital size and complexity and creates complex operational challenges, exacerbated by the accelerating complexity of drug manufacturer-mandated claims submission obligations. However, the up-front discount model is the most efficient means of effectuating 340B discounts. Although drug manufacturers have increasingly imposed additional, non-statutory reporting requirements, the core structure of the program allows covered entities to maintain compliance with relatively limited staffing and without complex claims adjudication systems. This 11 structure enables hospitals to integrate compliance activities into routine operations without disrupting patient care. Because the current up-front discount model makes discounts available at the point of purchase, the submission of claims documentation has a substantial effect on hospital cash flow. As a result, many of our members submit claims weekly or biweekly to meet operational and legal requirements without unnecessarily diverting resources from patient care. ADMINISTRATIVE COSTS UNDER A POTENTIAL 340B REBATE MODEL PILOT PROGRAM A rebate model would require covered entities to build entirely new administrative and operational infrastructure to access statutorily required 340B discounts. Hospitals would need to develop or procure systems to submit rebate claims after purchase, track claim status, reconcile payments across multiple drug manufacturers, and manage denials and appeals. These functions do not exist within the current 340B framework, which is designed around up- front discounts. Our members identified three broad categories of direct administrative costs of the 340B rebate model pilot based on their experiences preparing for the initial pilot program: Staffing costs of hiring new pharmacy staff to implement the rebate model Technology costs for adapting existing systems to comply with new drug manufacturer requirements Legal fees for ensuring drug manufacturer compliance with the terms of the rebate program Using data from our members and data from HRSAs own analysis, we estimate implementing the rebate model for drugs included in the MDPNP would cost hospitals participating in the 340B program approximately $1.5 billion in direct administrative costs in 2027 alone. Most of these costs are ongoing and likely will increase in future years. More details on our methods and assumptions for calculating these costs are described below. HRSA must also consider how administrative costs could compound if additional drugs are added to the rebate program. If HRSA moves forward with upending more than 30 years of precedent in the 340B program, drug manufacturers likely will continue to push to expand rebate models to further profit. At a minimum, it is reasonable to assume that an implemented rebate program would continue to include drugs selected for the MDPNP, which are among the most frequently prescribed medications in the country. In theory, if the process for submitting and monitoring rebates is similar across drug manufacturers, then covered entities may be able to achieve some economies of scale with new administrative costs. However, if drug manufacturers impose different requirements (as we have recently seen with new claims submission requirements by Eli Lilly and Novo Nordisk), then the costs will only continue to grow as new drug manufacturers are added. Adopting more conservative assumptions, we estimate that if the rebate pilot were expanded to include all drugs and drug manufacturers, the direct administrative costs for hospitals would exceed $3.4 billion. STAFFING IMPACTS UNDER A POTENTIAL REBATE MODEL PILOT PROGRAM Implementation of a rebate model would require both hiring new personnel and reallocating existing staff away from patient care and operational roles. Essential hospitals already operate 12 with more limited resources than other acute-care hospitalsincluding providing more charity care and treating more uninsured patients, despite their thin financial margins. We estimated the direct administrative staffing costs of a rebate model by using HRSA's own estimates for the cost of labor needed to implement the rebate pilot and real-world data from our members about the staff that would have been required to administer this model. In HRSAs ICR for its previous rebate model, the agency estimated that the pharmacy staff needed to implement a rebate model would cost $132 per hour, which was similar to estimates provided by our member hospitals. However, HRSA underestimated the implementation time required at only two hours a week.20 In their experience preparing to implement the rebate pilot, leaders from our member hospitals noted that they would need to hire at least one employee to work on this model full-time (40 hours a week). Many of our largest members have indicated that they would need to hire at least three FTE employees to manage the new process. These staff would be needed to conduct ongoing monitoring of claim determinations, investigate denials, and initiate formal appeals processes to ensure access to their statutorily required discounts. Based on these data, we estimate that the rebate pilot would impose $1.2 billion in total direct staffing costs on all hospitals, including $135.9 million in costs on essential hospitals. Even though HRSA has not yet implemented the rebate pilot program, it is important to note that our members are already experiencing economic harm from HRSAs haphazard and illegal attempts to implement rebates in the withdrawn pilot. For example, one member hospital has already allocated approximately $300,000 in staff labor costs across affected departments to begin implementing a rebate program before it was stopped by federal courts. It is also important to note how staffing costs relate to the cash flow challenges a rebate model creates, which are discussed further below in response to Section 2 of the RFI. To mitigate the costs of fronting millions of dollars to drug manufacturers while they wait for rebates, several of our members have reported that they anticipate needing to perform daily claim submission through platforms such as 340B ESP, instead of the weekly or biweekly claim submission process they currently conduct under the existing model of up-front discounts. HRSAs proposed rebate pilot program puts many essential hospitals in a lose-lose situationthey must spend more in staffing costs to prevent further losses from floating millions of dollars to drug manufacturers while they wait for rebates. SYSTEMS AND INFRASTRUCTURE FOR REBATE PILOT IMPLEMENTATION Beyond staffing costs, a rebate model implementation would require significant investments in information technology systems and operational infrastructure. Existing 340B program systems are designed to manage drug purchasing and replenishment under an up-front discount framework. These systems are not designed to support the claims submission, adjudication, and payment tracking functions required under a rebate model. Covered entities would be required to build or procure new systems to submit rebate claims, track claim status, reconcile payments across drug manufacturers, and manage denials and 20 American Hospital Association v. Kennedy, No. 2:25-cv-00600-JAW, at 26. PageID #:1 (2025) 13 appeals. These functions are not part of the current 340B infrastructure and would require substantial system redesign. Hospitals would need to modify billing, pharmacy, and revenue cycle systems to capture new data elements and establish claims-level reconciliation processes across multiple platforms. Hospitals also would need to ensure that any systems used to transmit rebate data comply with applicable privacy and security requirements, including protections for patient health information. Establishing secure interfaces between hospital systems and drug manufacturer- operated platforms would require additional technical safeguards, contractual protections, and ongoing monitoring. During the withdrawn pilot, the Beacon platform refused to fulfill a security questionnaire one of our members requested, raising serious questions about vendor safety practices. These system changes would require substantial financial investment and development time. Hospitals likely would need to engage multiple vendorsincluding pharmacy management vendors, 340B compliance vendors, and revenue cycle vendorsto build and maintain these integrations. In many cases, vendor solutions would need to be customized for individual hospitals or health systems, further increasing implementation costs. It is difficult to estimate the IT costs of implementing a new rebate pilot because technical specifications have not yet been determined. Hospitals have reported a wide range of costs, from $100,000 to $500,000 per hospital, to set up a new system, which do not include ongoing system maintenance expenses. Using data from our members, which suggest that IT costs would be approximately 15% of new staffing costs for the rebate pilot, we estimate a total of $179.3 million in IT system costs for hospitals, in addition to the additive staffing costs in pharmacy and accounting departments for rebate compliance. OTHER ANTICIPATED COSTS OR IMPACTS OF A POTENTIAL 340B REBATE MODEL PILOT PROGRAM In addition to the direct staffing and technology costs mentioned above, our members anticipate substantial legal expenses to ensure compliance with the new, administratively complicated rebate structure. Other potential costs that the RFI does not acknowledge include the costs of lost access to subprime discounts and the loss of up-front discounts on medicines that are stockpiled for emergencies but are not used prior to their expiration date in the normal course of pharmacy operations. In response to Section 2 of the RFI, we provide more information about costs from the disruption in cash flow, and in response to Section 3 of the RFI, we provide more information about the likely cost of rebate denials. Legal Expenses The administrative complexity of the new proposed rebate models will require essential hospitals to incur additional legal fees to review rebate pilot terms and conditions and to assist with enforcing requirements that drug manufacturers pay essential hospitals the discounts required by statute. Although it is difficult to estimate these legal fees, data from our members suggest that these legal fees would be approximately 10% of the new staffing costs for the rebate pilot. As a result, we estimate a total of $119.5 million in added legal fees for hospitals. Loss of Subprime Discounts By requiring covered entities to purchase drugs at wholesale acquisition costs, many of our members will likely lose access to subprime discounts that they currently receive when they 14 purchase drugs for 340B-eligible patients. During the withdrawn pilot, drug manufacturers did not suggest they had plans to account for subprime discounts in their rebate payments to covered entities. While subprime discounts are not required by statute, HRSA should consider how upending longstanding policies and practices of the 340B Drug Discount Program will have ripple effects on other funding streams that essential hospitals rely on. Although there is little public data available on subprime discounts, we used data from our members to estimate that the rebate pilot program would result in approximately $83.6 million in added costs for hospitals losing access to subprime discounts. Additional Costs for Stockpiled Medicines Requiring covered entities to purchase drugs at wholesale acquisition cost (WAC) creates an inflationary pressure on pharmacy inventory prices. CMS reports the products selected for the MDPNP in 2026 and 2027 at WAC cost more than $8 billion per month to Medicare Part D alone.2122 As covered entities currently purchase these products at a discounted price, requiring them to purchase at a higher WAC will result in immense inflationary pressure, and force covered entity pharmacies to reduce inventory if keeping the same pharmacy spend. Maintaining surplus inventory is a key way essential hospitals mitigate the risk of shortages and triage economic shocks caused by extraneous factors. Raising up-front acquisition costs will directly reduce essential hospitals ability to stockpile emergency medicines and to weather shortages such as those caused by Hurricane Helenes destruction of the Baxter North Cove Plant. Rebate models will have further negative impacts on inventory operations. Over the course of regular pharmacy operations, some drugs that are purchased for patient care cannot be used before they expire. The 340B programs current up-front discount structure allows covered entities to receive discounts on these stockpiled drugs because they were purchased for use by 340B-eligible patients. However, under a rebate model, it is unclear if and how hospitals would be able to receive these statutorily required discounts. Using data from our member hospitals for the drugs covered in the MDPNP, we estimate that approximately 2% of drug purchases may lose access to discounts because of the rebate pilot because they expire before use. Extrapolating these costs to all hospitals, we estimate a total of $449.1 million in added costs to hospitals from lost access to discounts on stockpiled medicines. These costs are expected to grow if HRSA extends the rebate pilot to additional medicines that are not used as frequently. We are concerned that eliminating up-front discounts would affect essential hospitals ability to stockpile medicines that are essential for emergencies but are rarely used. For products with long shelf lives but unpredictable demand, hospitals would be forced to tie up scarce capital for prolonged periods without assurance of timely reimbursement. Over time, this will lead hospitals to reduce on-hand supplies of 21 Fact Sheet: Negotiated Prices for Initial Price Applicability Year 2027. Centers for Medicare & Medicaid Services. https://www.cms.gov/files/document/fact-sheet-negotiated-prices-ipay-2027.pdf. Accessed April 6, 2026. 22 Fact Sheet: Negotiated Prices for Initial Price Applicability Year 2026. Centers for Medicare & Medicaid Services. https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability- year-2026.pdf. Accessed April 6, 2026. 15 these drugs, increasing the risk that critical therapies are unavailable when urgently needed. RFI Section 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model imposes a fundamental and inescapable cash flow burden on essential hospitals: from the moment a covered entity purchases a drug at WAC until the moment it receives the rebate, the hospital is financing the drug manufacturer's statutory discount obligation out of its own pocket. Pharmaceutical manufacturers have tried to obscure these costs by funding studies that minimize this reality through optimistic assumptions that do not reflect the operational reality facing essential hospitals. However, based on data from our members, we anticipate that floating these costs to drug manufacturers could cost hospitals between $54.2 and $162.8 million, depending on the extent of their cash reserves. These costs will disproportionately harm essential hospitals because of the high volume of care our members provide to low-income patients and because of the pre-existing cash flow challenges many of our members face. Industry-funded analyses minimize this burden by making a series of optimistic assumptions that do not reflect the operational reality facing safety net hospitals. When those assumptions are corrected, the cash float period extends to at least 30 daysand often longerimposing costs that HRSA was requiredbut failedto genuinely reckon with before the Maine court enjoined the pilot. a. Drug manufacturers incorrectly assume that hospitals can push costs to wholesalers. In December 2025, after hospitals challenged HRSA for not considering the costs of floating funds to pharmaceutical companies in its analysis of the effects of rebate models, the Pharmaceutical Research and Manufacturers of America (PhRMA) funded a report by IQVIA intended to minimize these legitimate cash flow concerns.23 One primary flaw of this report is the assumption that hospitals could mitigate their cash flow concerns by delaying payments to wholesalers. This assumption does not reflect our members real-world experience and ignores the way rebate models would disrupt the processes that essential hospitals use to purchase medicines their patients need. The IQVIA study mistakenly argues that cash flow challenges start when a drug is dispensed to the patient, but a hospitals cash exposure begins much earlier, when the hospital purchases drugs from the wholesaler. Overall, we anticipate that hospitals will have to float funds for at least one month in even the most optimistic scenario. This estimate is supported by the IQVIA analysis, which assumes that a hospital purchases a drug at WAC 15 days before dispensing, submits claims data five days after dispensing, andif everything goes perfectlyreceives the rebate 10 days later (day 15). If drug manufacturers experience any processing delays, or if covered entities submissions require any back-and- fortha near certainty during the initial period of a new and untested data platformthat window extends further. 23 How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? IQVIA. https://www.iqvia.com/locations/united-states/library/fact-sheets/how-will-a-rebate-model-impact- cash-flow-in-the-340b-drug-pricing-program. Accessed April 6, 2026. 16 b. Cash flow impact is meaningfully different under a rebate model than under existing inventory models. Most 340B hospitals currently use a replenishment drug inventory model. Under this model, the hospital purchases a package of a drug at the drug's commercial price. Once the entire package has been dispensed for 340B-eligible scripts, the hospital replenishes its stock by repurchasing a package at the 340B price going forward. Where hospitals use contract pharmacies, 340B providers are never asked to pay the full commercial price for filling eligible prescriptions; they only pay the 340B discounted price. Proponents of a rebate model have claimed that there is no difference between a rebate model and the replenishment model. That is not true. Under the replenishment model, covered entities pay the full commercial price for a drug no more than once. But under a rebate model, covered entities would have to pay the full commercial price every time they make a purchase. The D.C. district court has explicitly highlighted this difference and explained that [b]efore a rebate is received, covered providers would effectively float manufacturers the 340B discount value.24 A dramatic increase in the up-front cost of repurchasing 340B drugs is not an insignificant risk for providers operating with limited days cash on hand and the chances for improperly denied or delayed rebates raise the stakes even higher. c. Rebate models provide an interest-free loan to drug manufacturers at the expense of safety net providers. Even assuming prompt rebate payments and minimal administrative burden, the required cash flow transfer from covered entities to drug manufacturers creates significant financial harm. These costs will be higher for essential hospitals and other covered entities with existing cash flow challenges. For hospitals with adequate cash on hand, we estimate the costs of floating funds to pharmaceutical manufacturers would be equal to average interest rates on funds, which the IQVIA study estimates to be 45%. In our optimistic scenario, we assumed a 4% interest rate, which would still result in $54.2 million in costs for hospitals for a 340B drug pilot. These costs would grow proportionally if the rebate were extended to all drugs, likely exceeding $155 million a year. Unfortunately, many essential hospitals cannot afford the added costs of fronting funds to drug manufacturers and might need to take out loans to cover the costs of these payments. Using estimates for the cost of these loans from the IQVIA study, we estimate that the interest rate on these loans could be 12%, which would translate to $162.8 million in interest costs for all hospitals for the 340B rebate pilot. These costs will only grow as the number of drugs in the rebate pilot continues to grow. Unlike administrative costs, there are no potential economies of scale. Overall, if a rebate model were extended to all 340B drugs, we estimate that the financing costs to hospitals would be at least $155$465 million. 24 American Hospital Association et al. v. Kennedy, No. 1:24-cv-03220-DLF, Document 54 (D.D.C. 2025). 17 d. Restricting cash flow will threaten broader financing and bond covenants structures. For safety net hospitals operating with limited cash reserves, this financing requirement would reduce available cash on hand and restrict financial flexibility. The lost interest revenue is only a fraction of the irreparable damage. For example, reduced liquidity could affect compliance with bond covenants, credit ratings, and the ability to finance future capital investments such as facility upgrades, service expansions, or technology modernization. Requiring hospitals already operating under severe financial pressure to finance drug purchases on behalf of drug manufacturers could have serious long-term consequences for their ability to sustain services. The amount of funding that essential hospitals would need to float to drug manufacturers will materially affect their already low operating margins. For example, one of our members projected that the total amount of funds that they would have needed to float to drug manufacturers under the initially proposed rebate pilot would be 11.4% of their net patient operating revenues. The hospital already operates with a negative operating margin, and so it is not sustainable to further constrict the funds available to support the essential services they provide. e. If HRSA insists upon a rebate model, it should use the shortest prompt payment window possible with deadlines for claims adjudication. We appreciate that HRSA asked about modifying the previously proposed 10-day window to mitigate cash flow concerns for covered entities, and we urge HRSA to use the shortest window possible. However, to be effective, HRSA must also ensure that there are deadlines for manufacturers to adjudicate any claims that are processed incorrectly. Because hospitals must put up funds to purchase drugs before they are dispensed to patients, an up-front discount is the best way to make sure that 340B discounts are paid in a timely manner. One option for HRSAs consideration would be to provide covered entities with a presumptive rebate equal to at least one month of claims that would then be reconciled after the drug is dispensed. f. HRSA should develop policies for drug manufacturers to mitigate cashflow concerns for resource-constrained hospitals. As emphasized throughout this letter, if a rebate model is implemented, our member hospitals would face legitimate cashflow issues. Any rebate model should include a process established by HRSA through which drug manufacturers must mitigate detrimental cash flow disruptions for resource-constrained hospitals. For example, CMS recognized this need in developing the MDPNP. Entities may self-identify as anticipating material cashflow concerns because of payment delays stemming from retrospective MFP refunds. Drug manufacturers must include in their effectuation plans a description of "their approach to mitigating material cashflow concerns, including establishing criteria for dispensing entities to participate in their approach."25 In CMS' MDPNP guidance, 25 Centers for Medicare & Medicaid Services. Medicare Drug Price Negotiation Program: Final Guidance. Sept. 30, 2025. https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. Accessed April 6, 2026. 18 the agency also provides examples of such mitigation processes including a prospective purchasing agreement or accelerated MFP refund timelines. HRSA should go further to identify which hospitals will face cashflow issues due to the rebate model and mandate that drug manufacturers take particular actions, such as an accelerated refund timeline, to mitigate such concerns. RFI Section 3: Rebate Denials Rebate denial risk is among the most serious operational concerns associated with a rebate model. We appreciate that the withdrawn rebate pilot included guardrails to prohibit covered entities from denying rebates due to suspicion of diversion or discount duplication and we urge HRSA to restrict the reasons that rebates can be denied to the narrow circumstances specified within the withdrawn pilot. However, under the withdrawn rebate pilot, drug manufacturers still retained broad discretion to review and deny rebate claims submitted by covered entities. Without clear dictated standards governing these decisions, drug manufacturers could effectively determine whether a covered entity receives the statutory 340B price. Based on prior experience with drug manufacturers and insurers, we still expect that a portion of legitimate claims will be denied. Assuming a 1015% denial rate, which is consistent with our members experience with other payers, we estimate the costs of denials for hospitals could be approximately $1.6 $2.4 billion for MDPNP drugs and $4.77.0 billion across all 340B covered drugs. Our members also expect to incur additional costs when drug manufacturers misidentify 340B claims. Under the current up-front discount policy, a covered entity retains the discount for an alleged mistake while the dispute is resolved, protecting covered entities from incorrect determinations made by a drug manufacturer. However, a rebate model reverses this framework by allowing drug manufacturers or their designees to deny a rebate at any stage. As a result, the penalty for an incorrect determination is borne immediately by the covered entity, and reprieve can only be granted after permanent economic harm has already been suffered. To mitigate these costs, HRSA should add additional guardrails and avoid abdicating its oversight authority to drug manufacturers who frequently impose additional administrative burdens on providers without adequate justification. a. HRSA should articulate the narrow grounds under which drug manufacturers may deny rebates. In the withdrawn pilot, HRSA took an important step to prohibit drug manufacturers from denying 340B rebates based on compliance concerns with diversion or Medicaid duplicate discounts. We appreciate these prior clarifications from HRSA; however, the agency did not provide an exclusive list of the grounds for which denials would be permitted. In any final version of a rebate model, HRSA should explicitly detail the narrow circumstances under which a drug manufacturer can deny a claim. Those scenarios should be limited to when (1) basic claims information is missing or (2) multiple 340B entities submit a rebate for the same claim. Still, even if a drug manufacturer denies a claim for one of these reasons, a covered entity should be allowed to correct the claim and resubmit it. 19 b. HRSA should specify standardized documentation and timeline requirements. Drug manufacturers set to participate in the withdrawn pilot established differing processes that covered entities should take to rectify denials due to certain issues (e.g., missing fields, multiple covered entities submitting the same claims). In any future rebate model, the process for disputing the same types of denials should be standardized across drug manufacturers, including uniform required documentation. HRSA also should set a timeline for rectifying improper denials. In the withdrawn pilot, covered entities were instructed to communicate first with the claims IT platform, next with the drug manufacturer, and only then with HRSA, via a generic 340B email address. Additionally, some drug manufacturers were instructing covered entities to rectify denials amongst themselves. Such processes can be lengthy, and the IT platform and drug manufacturers will not be motivated to rectify improper denials swiftly. HRSA should set a requirement for the number of days a drug manufacturer has to resolve a disputed denial. c. HRSA must ensure prompt and uniform dispute resolution. If a rebate model is implemented, HRSA must include strong guardrails to ensure disputed claims are promptly handled, including the use of civil monetary penalties (CMPs) where appropriate. We are deeply worried that the withdrawn pilot had no timeline for claims dispute resolution. A prompt determination policy is useless if denied claims enter an indeterminate limbo period. As part of the withdrawn pilot, drug manufacturers letters to covered entities include differing processes that covered entities must take to rectify denials due to missing fields and multiple covered entities submitting the same claim. For example, in the case of multiple covered entities submitting the same claim, one drug manufacturer stated that the covered entities must resolve that issue with each other, while another drug manufacturer stated that it will only recognize the first submitted claim. The process for disputing the same types of denials should be standardized across drug manufacturers. Additionally, if a covered entity cannot resolve an issue with the IT platform or drug manufacturer, its only other option is to detail its concern in a note to HRSAs generic 340B email address. Covered entities may face concerns with a high number of claims, clogging the agencys inbox and putting administrative strain on both parties. HRSA also has not identified what documentation should be provided in such an email to ensure swift resolution. We urge HRSA to publish a dedicated email inbox and phone number for covered entities to contact HRSA for issues pertaining to the pilot program and ensure a prompt response. To reduce administrative burden for both covered entities and HRSA, covered entities should receive a clear, standardized process for resolving claims disputes. d. HRSA should enforce prompt payment through clear penalties, including CMPs. 20 Under federal law, HRSA holds the statutory duty to ensure that obligated discounts are provided to 340B covered entities.26 Any drug manufacturer participating in the 340B program that knowingly and intentionally charges a covered entity more than the ceiling price, as defined in 10.10, for a covered outpatient drug, may be subject to a civil monetary penalty not to exceed $5,000 for each instance of overcharging.27 In an instance where an obligated rebate claim is left unpaid, and a covered entity is unable to realize a 340B discount, a drug manufacturer has definitionally charged a covered entity more than the ceiling price. In an instance where prompt access to statutorily obligated 340B discounts has been denied due to drug manufacturer malfeasance, HRSA should levy CMPs on the responsible party. HRSA should clearly articulate the specific circumstances under which CMPs may be levied and how they will be enforced. e. Noncompliant drug manufacturers that are unable to promptly effectuate rebates should be removed from the program. In the withdrawn pilot, HRSA appropriately determined that drug manufacturers that do not comply with program requirements could be removed from the rebate pilot program. However, HRSA improperly failed to clarify under what circumstances a drug manufacturer would be found to be out of compliance with program requirements. The standard articulated for the withdrawn pilot was that if a drug manufacturer trends toward. . .not paying rebates within 10 days of data submissions they could be removed. This vague standard is completely inadequate. HRSA should instead strictly require that all drug manufacturers abide by the established window for claims payment. RFI Section 4: Data Collection by Covered Entities Covered entities already maintain significant data systems to support compliance with the 340B program. These systems are designed to support and engage with myriad key responsibilities, including HRSA audits, diversion prevention, duplicate discount prevention, and contract pharmacy oversight. The data collection envisioned under a rebate model would expand these requirements substantially. In particular, the rebate pilot would require covered entities to submit claims- level information to drug manufacturerdesignated platforms, potentially including sensitive patient data. HRSA must ensure that any such systems comply with all federal privacy requirements and provide adequate safeguards for protected health information. Covered entities are also concerned that manufacturers might seek to use rebate data for purposes unrelated to the rebate program, including efforts to target contract pharmacy arrangements or initiate compliance investigations. HRSA should explicitly prohibit drug manufacturers from using rebate data for purposes outside the administration of the rebate model. a. HRSA must validate rebate platforms methodology and protection of personal health information (PHI). 26 42 C.F.R. 10.10 (2025). 27 Ibid. 21 As the agency designated by the statute of the 340B Program to house OPA, HRSA is obligated to monitor drug manufacturer compliance with 340B program requirements. Throughout the duration of implementation for the withdrawn rebate pilot, HRSA never publicly communicated details regarding PHI protection standards for rebate platforms like Beacon. If HRSA pursues another rebate model, any implicated information technology platform must meet the same program compliance standards as HRSA. IT platforms participating in a rebate pilot must conform to all legal requirements regarding receiving, holding, and transmitting any PHI. b. HRSA must ensure that data provided to drug manufacturers or drug manufacturerselected platforms are not used for purposes outside the rebate model, including audits or targeting of contract pharmacies. We were deeply disappointed by HRSAs decision to expand the slate of permissible claim fieldsbeyond the initial pharmacy claim fields outlined in the original rebate noticeand fear drug manufacturers seek to erode protections HRSA has previously put in place to protect 340B covered entities. Drug manufacturers have a documented history of misusing data to restrict covered entity access to 340B discounts, while HRSA has a duty to safeguard PHI and maintain program integrity. The Beacon Platform, selected by every single drug manufacturer for the withdrawn rebate pilot, continues to state on its FAQ page, 340B rebate data created in Beacon Rebate Model is integrated with Beacon MFP in order to account for duplication in MFP and 340B rebates.28 Even more troublesome is the suggestion that the 340B rebate data will be used beyond the stated purpose of the pilot to identify instances of duplication in Medicare, Medicaid, and commercial channels and ensure that the corresponding rebate in the other channel is reduced or rejected. RFI Section 5: Drug Manufacturer Efforts to Avoid Duplicate Discounts a. Rebate models are not necessary to deduplicate MFP claims. As HRSA has stated, there are viable alternatives available for drug manufacturers to address 340B and MFP deduplication other than rebates.29 HRSA and CMS should work together to implement alternative deduplication methodologies that do not undermine the 340B program. For example, CMS has indicated that it is launching a voluntary 340B claims repository this year, which it might use in the future to exclude 340B drugs when determining Medicare Part D inflation rebates.30 We applaud CMS for testing the repository and implementing user and industry feedback before making further decisions on the repositorys future. Investing in the repository is a helpful alternative to individual drug manufacturer requirements when addressing MFP/340B deduplication issues while protecting access to 340B discounts and limiting provider burden.31 28 Rebate Model Frequently Asked Questions. Beacon Support Center. https://www.hrsa.gov/. Accessed April 6, 2026. 29 American Hospital Association, et al. v. Kennedy, et al, No. 25-2236 Motion of Defendants-Appellants at 13, (D.C. Cir. Dec. 30, 2025). 30 90 Fed. Reg. 49741 (Nov. 5, 2025). 31 Siegel B. Letter to Mehmet Oz on Sept. 12, 2025. https://essentialhospitals.org/wp- content/uploads/2025/09/CY2026-PFS-9.12.25.pdf. Accessed April 6, 2026. 22 RFI Section 6: Required Reporting a. HRSA should monitor drug manufacturers payment timelines, rate of denials, and denial dispute timeline. HRSA should collect information on the number of days it takes for drug manufacturers to provide a rebate, the number and percentage of claims that are denied, and the number of days it takes for a claim dispute to be resolved. This information should be aggregated and published on HRSAs website regularly. b. HRSA should publish manufacturers rebate plans Drug manufacturers fully approved rebate plans should be published on the HRSA website for public viewing. During the withdrawn rebate pilot, the agency only posted a summary of the approved rebate model plans on its website. Merely publishing a summary of drug manufacturers plans does not go far enough; the full plans as approved should be available for public review. Publishing the full plans will enable covered entities to provide immediate feedback to HRSA if programmatic details in drug manufacturer plans raise additional challenges or burdens; assist covered entities in preparing for implementation in what is already a remarkably short window; and create additional public accountability that will hopefully influence the thoughtfulness and quality of drug manufacturer plans. It is critical that HRSA preemptively publish stakeholder plans to ensure all covered entities can fully review their potential obligations under a rebate model. Sharing versions of submitted plans upon request delays the transparency and oversight needed to hold drug manufacturers accountable. RFI Section 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. HRSAs focus on rebate models detracts from actual protection of the 340B program and covered entities. HRSA describes its purpose as to improve health outcomes through access to quality services, a skilled health workforce, and innovative, high-value programs. In the reckless pursuit of 340B rebates, however, the agency has failed to respond to actual and current threats to the 340B program.32 In the more than 18 months since drug manufacturers first tried to implement rebates, drug manufacturers have continued to undermine the 340B program. Eli Lilly and Novo Nordisk have implemented onerous, divergent, and dangerous 340B claims submission requirements that directly contravene 340B statute. Drug manufacturers increasingly are conditioning access to 340B pricing on submission of detailed claims and patient-level data through proprietary platforms, effectively rewriting program requirements outside of statute or regulation. Americas Essential Hospitals has written to HRSA on each of these drug manufacturers policies and has yet to receive substantive response. 32 About HRSA. Health Resources and Services Administration. https://www.hrsa.gov/about. Accessed April 6, 2026. 23 HRSAs own audit program has repeatedly identified drug manufacturer overcharges and compliance failures requiring repayment to covered entities. For example, HRSA audits have found drug manufacturers charging above the 340B ceiling price and failing to provide required refunds, resulting in mandated repayments and corrective action plans.33 Despite these ongoing compliance issues, enforcement remains limited, and these risks to covered entities persist while HRSA continues to prioritize development of rebate models that are unnecessary for the reasons the agency itself established. ******* Rebate models represent an existential threat to the capacity of essential hospitals to provide care that their communities rely on. We urge HRSA to weigh the demonstrated harm of rebate models and to reject such dramatic changes to the 340B program for the sake of patients who depend on essential hospitals for the care they need. Americas Essential Hospitals appreciates the opportunity to submit these comments. If you have questions, please contact Director of Policy Robert Nelb, MPH, at 202-585-0127 or rnelb@essentialhospitals.org. Sincerely, Jennifer DeCubellis President and CEO Americas Essential Hospitals 33 FY 2025 Manufacturer Audit Results. Health Resources and Services Administration. https://www.hrsa.gov/opa/program-integrity/fy-25-manufacturer-audit-results. Dec. 18, 2025. Accessed April 15, 2026.
HRSA-2026-0001-1995The Health Care Authority for Baptist Health, an Affiliate of UAB Health System (Baptist Health)2026-04-20T04:00Z21,617 chars
See the attached comment from The Health Care Authority for Baptist Health, an Affiliate of UAB Health System, Montgomery, Alabama. 411BapTtRist Submitted Electronically April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Baptist Health P O Box 244001 Montgomery. AL 36124 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Health Care Authority for Baptist Health, an Affiliate of UAB Health System ("Baptist Health"), we are grateful for this opportunity to comment on the above-referenced HHS Request for Information ("RFI"). Baptist Health Background Baptist Health is the largest healthcare system serving Central Alabama, providing comprehensive hospital-based and outpatient services to our communities. Baptist Health operates two public hospitals that participate in the 340B program: Baptist Medical Center South ("Baptist South"), and Baptist Medical Center East ("Baptist East"), both located in Montgomery, Alabarna. Baptist South is a licensed 492-bed, acute care regional referral center, fully accredited by the Joint Commission on Accreditation of Healthcare Organizations (TJC). Since its founding in 1963, Baptist South has grown to become Montgomery's largest medical facility and Baptist Health's tertiary care center, offering unsurpassed specialty services and treatments. Baptist Health operates the only Level II trauma center serving Central Alabama, one of only two Level II trauma centers in State of Alabama. The hospital is horne to highly skilled physicians, nurses and support staff committed to meeting the healthcare needs of our communities with care and compassion. Baptist South is known for outstanding cardiovascular, orthopedic, neurology and surgical services. Baptist South also operates Montgomery Cancer Center, Central Alabama's leading provider of advanced oncology care for this community for more than thirty years. Additionally, the hospital offers a variety of specialized services for patients of all ages, including: . Emergency Services Behavioral Health Facility Chest Pain Center Family-Centered Maternity Care Regional Neonatal Intensive Care Unit (NICU) Sleep Disorders Center Hospice and Palliative Care Baptist East is a 176-bed acute care hospital, also fully accredited by TJC, providing high-quality healthcare, specializing in women and children's services. Baptist East is home to approximately 3,800 baby deliveries each year, making it the third-highest in total deliveries in the State of Alabama. In addition to general medical and surgical services, Baptist East offers a full range of specialty care: Emergency services OB Emergency Department Labor and Delivery Center Level III NICU Medical/Surgical Intensive Care Unit Radiology Therapy Center The Baptist East campus is also home to the Baptist Breast Health Center, the Sleep Disorders Center and the Endoscopy Center. Since 2005, Baptist South has qualified for the 340B Program as a Disproportionate Share Hospital ("DSH") serving Central Alabama. Baptist South has a Medicare Disproportionate Share percentage ahnost 50% greater than the required participation amount (11.75%). In our most recently submitted Medicare cost report, Baptist South incurred over 80 million dollars in uncompensated care to vulnerable and underserved patients located in a 17-county region of central Alabama. Since 2005, Baptist East has qualified for the 340B Program as a Disproportionate Share Hospital ("DSH") serving Central Alabama. Baptist East has a Medicare Disproportionate Share percentage over two times the required participation amount. In our most recently submitted Medicare cost report, Baptist East incurred almost thirty million dollars in uncompensated care to vulnerable and underserved patients. 2 Baptist Health response to RFI Overview. Aniong other things, the RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. Our answer is an unqualified "no". Any rebate mechanism will impose enonnous costs and burdens on Baptist Health that will far outweigh any benefits that might come from it. HRSA's own calculations of the cost of this proposed programmatic shift are extraordinary; our own cost calculations only further emphasize the material adverse impact to Baptist Health's ability to serve our patients and communities here in Alabama. Equally concerning is that HRSA's proposed rebate model test is seemingly based on the incorrect premise that it rnust balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that, per Congress' clear tegislative directive, covered entities can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Baptist Health and many others have relied on for years to reach and care for our communities and patients, is the best way to fulfill this singular, exclusive purpose of the 340B Program. For purposes of estimating costs, we have assumed that any future Rebate Program will include at least the 10 drugs that HRSA previously approved for its original Program and potentially also those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027 (per HRSA's February 25, 2026 Information Collection Request), for a total of 25 drugs. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to subrnit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Baptist Health can spend as Congress clearly intended: on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. A shift to a new kind of discount mechanism will impose considerable additional costs and burdens on our system that go far above and beyond what we had expected and planned for as covered entities and far above and beyond what we are experiencing now. 3 With the latest rebate proposal applying to ever rnore drugs across all hospital settings, the administrative burden and financial risk would increase greatly. But more than simply increasing our costs, rebates are in operation less efficient than up front discounts (multiple steps instead of one), and we discuss multiple other administrative and financial inefficiencies throughout this response, all of which are in stark contrast to the federal government's stated aim to reduce regulatory inefficiencies and waste. Staffing Impacts Under a Potential 340B Rebate Program. Baptist Health does not currently have sufficient staff needed to comply with a Rebate Program. We estimate that implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees and would cause current medical provider employees to reallocate work hours from medical care to perform administrative functions. We estimate that approximately $80,000 in new annual FTE personnel costs would be needed to comply with a Rebate Program and that we would incur an additional $80,000 annually through reallocating existing staff hours (away frorn patient care activities in many cases) to manage the Rebate Program. These estimates include the time of both administrative personnel and pharrnacy managers. This total estimate of $160,000 additional annual staffing costs illustrates that HRSA's current estimate of only 5 hours per week in additional work is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Baptist Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to modify or replace those systems. Specifically, at a minimum, we would expect to incur an additional $20,000 in annual software fees to implement the Rebate Program. This does not include the additional time involving manual computations and processing of data required merging and validating the data due to the various systems not being integrated. There will also be additional compliance costs in monitoring our participation in the Rebate Program. Partly based on the additional systems to be used, we expect the time spent by staff ineeting and monitoring compliance, as well as the costs relating to our weekly and annual audits, to increase as a result of the Rebate Program. Data Collection By Covered Entities And Use of Information. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is simply incorrect. Medication claims are processed differently for 4 medical and retail clairns, with differing data points for clairns subrnission. The tools made available for reporting these rebate models have not been created with those differences in mind, yet data consistency is expected. This places undue burden on the entity reporting the information to ensure data is extracted frorn their underlying systein(s), reviewed for accuracy, corrections modifications made if necessary. Those reviews must be performed by those with intimate knowledge of the medications to identify errors or omissions. This most often results in a Pharmacist review of lines of data to ensure clinical information is presented accurately, consistent with processor standards. Examples would include verification of unit of measure or dose calculations for product administered in the proper concentration in agreement with the third party's sanitized standards. Time used in this review is time that could have been spent in providing direct patient clinical care and is a discouraging disservice to our patients. It also bears noting that pharmaceutical companies want to use CE clairns data to avoid paying commercial rebates to PBMs under voluntary agreements that ensure the manufacturers' beneficial treatment under the PBM's forrnulary. This purpose has nothing to do with 340B program integrity and CEs (and our patients) should not be forced to provide clairns data to enable, much less finance, this goal. We urge HRSA not to authorize a 340B rebate program that forces safety net providers (and their patients) to bear the costs of data sharing and purchasing drugs at non-340B prices to assist with policing of manufacturers' commercial agreements. At a minimum, manufacturers should be prohibited from using any CE claims data for these or other inappropriate, non- programmatic commercial purposes. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will improperly force Baptist Health to pre- pay for critical medications at higher WAC prices, effectively providing interest-free loans to drug companies in the arnount of withheld discounts that we are in fact owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. For example, assuming payments are made within 10 days, using the 25 IRA drugs, we estimate that Baptist Health will have to pay over $300,000 more to manufacturers for that 10-day period. This amount will double to over $650,000 if the rebates take 20 days, which we consider likely, given delays in uploading and paytnent processing. On an annual basis, for each of the 25 IRA drugs, we estimate that Baptist Health would be required to front to drug manufacturers over $12 million dollars (representing the difference between the estirnated WAC price of over $25 million dollars for those drugs under the rebate rnodel and the actual 340B price 5 of almost $13 million dollars). As a result, we are actively considering options for dealing with such a significant reduction of cash on hand, including reducing existing savingslinvestments (resulting in a negative impact on investment earnings). Additionally, we currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers' high price before receiving rebates, reducing our cash flow. This would result in us foregoing early payment discounts to preserve cash flow. We have estimated that doing so would cost our organization almost $600,000 annually for just one wholesaler. Finally, along with the heavy financial burden, the lack of clarity in the Pilot Program regarding how rebate plans would provide rebates to covered entities is extremely concerning (e.g., credits to purchasing accounts or actual dollar payments made to bank accounts of covered entities). Anything other than cash payments is unacceptable as allowing other options will only further increase the administrative and financial burden to Baptist Health in managing the various rebate plans. Adverse Impacts of These Additional Costs and Burdens. A11 of these many different costs and burdens add up. Unfortunately, that means that Baptist Health will no longer be able to use our 340B savings as effectively and cornprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Some examples of programs and activities we are actively considering lirniting or eliminating as a result of the Rebate Program are as follow: Community Cancer Screening Programs, by which we currently provide mobile cancer screenings in our rural communities that have lost access to life saving cancer screenings, resulting in later stage diagnosis of cancer that result in higher cost of care treatments with less successful clinical outcomes. Community Mental Health Programs as 340B savings have provided necessary funding to create local programs welcoming those with mental health needs into a supportive, caring, clinical environment without bias or judgment. These prograrns change lives by creating systems to improve medication cornpliance and access to support for patients reentering society. 6 Community Palliative Care Programs we established to manage end-of-life care decisions and minimize care costs. This will burden the acute care facilities facing more end-of-life care costs. Recruitment and retention of subspecialty physicians to Central Alabama will be limited due to the reduction of resources, ultimately reducing access to high quality subspecialty providers in our community. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that frarning rests on a flawed premise. The mere existence ofstatutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Baptist Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. In particular, it was our experience that Beacon was pre-populated with incorrect data, including the NPIs for both of our participating hospitals. This required the filing of change requests and follow ups with customer service. Efforts To Avoid 340B/MDPNP Duplicate Discounts. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated any systemic integrity issues in the Program. HRSA has also rnade clear that drug companies themselves have other available lawful options to address the 7 need to deduplicate 340B and MDPNP pricing. Given the trernendous costs that a rebate mechanism will impose on Baptist Health, HRSA should rely on those other options. Any other decision would irnperrnissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. To the extent EIRSA determines that further measures are needed, we would note various viable, lawful, and significantly less burdensorne alternatives to rebates. For example, HHS could require state Medicaid agencies to adopt Oregon Medicaid's process ofpreventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level could be used to address MDPNP nonduplication. Likewise, we would support the AHA's proposal to adopt a neutral third-party clearinghouse to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a data-driven, reasoned explanation for why these alternatives are neither viable nor less costly than a dubious rebate rnechanism. Other General Concerns with Anv Manufacturer-Directed Program. Finally, we would be remiss not to express our deep concerns that manufacturers and their contractors will inappropriately delay or deny, with no or inadequate explanation, otherwise legitimate rebate claims. As Baptist Health and our patients will already bear the substantially increased program costs, including the cost of dealing with denials (and delays), it is crucial that any rebate program require manufacturers to provide helpful, specific detail for any delay or denial, so we can appropriately and quickly respond in kind. Moreover, it is crucial that the proposed pilot program (and any current or future rnanufacturer-directed program) provide that civil monetary penalties and other appropriate sanctions be imposed for any inappropriate rebate delays or denials, as well as for any underlying acts, ornissions, or other failures of manufacturers or their contractors resulting in such delays or denials. For all of these reasons, Baptist Health respectfully submits that the costs and other potential consequences of any Rebate Program will far outweigh any expected benefits. HRSA therefore should abandon the concept altogether and consider one or more of the alternative approaches noted above. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Baptist Health and other covered entities ample notice and opportunity to comment on the specifics of its new program. While we have endeavored to provide the most detailed inforrnation possible, we are doing so without precise knowledge of which drugs will be 8 included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, program sanctions, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We therefore reserve the right to so provide further comment (as well as any other rights and rernedies that may be available to us should HRSA proceed with these or other adverse Program changes). We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients in Alabama and across our Nation who rely on and benefit from the current 340B ram. Please contact rne if you have questions. Since el ner Chief Executive Officer, The Health Care Authority for Baptist Health, an Affiliate of UAB Health System Montgomery, Alabama 9
HRSA-2026-0001-1996(no commenter metadata)2026-04-20T04:00Z7,943 chars
The letter addresses HRSAs efforts to implement a rebate model under the 340B Program and the Tribal/Urban Indian Impacts that will have, on behalf of the CMS Tribal Technical Advisory Group April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) Mr. Engels, On behalf of the CMS Tribal Technical Advisory Group (TTAG), I write to respond to the Health Resources and Services Administration (HRSA) Request for Information (RFI) for the 340B Rebate Model Pilot Program (91 FR 7287). TTAG recognizes that this request follows prior stakeholder concerns regarding implementation of a 340B rebate- based structure, proposed to strengthen oversight and address duplicative discounts. In this context, TTAG supports efforts to strengthen program integrity and financial accountability. However, HRSA should endeavor to achieve its intended goals while preserving the 340B program's core discount structure. The TTAG is very concerned that many tribal healthcare programs do not have funds available to pay for drugs up front and then obtain a rebate, and as a result, will be shut out of the 340B program if it moves to a rebate model. TTAG writes to reiterate that the program trajectory of a rebate-based model presents unresolved financial, operational, and administrative risks that require a full evaluation through formal Tribal Consultation and Urban Confer before further advancement, given its anticipated impact on participating Tribal health facilities. Impacts on the Indian Health System Necessitate Tribal Consultation and Urban Confer Foremost, the proposed rebate model has clear implications for Tribes and UIOs that warrant formal engagement through Tribal consultation, pursuant to Executive Order 13175 and the Department of Health and Human Services' Tribal consultation policy, and Urban Confer. This shift from an upfront discount structure to a retrospective rebate model represents a fundamental change to how the 340B program operates and directly affects the financing and delivery of services within Tribally operated and UIO facilities. TTAG is not aware of any formal engagement on the 340B restructuring and respectfully requests that HRSA initiate Tribal consultation and Urban Confer before advancing any rebate-based framework. The scale and structure of the 340B program underscore the significance of any policy change affecting it. In 2024 alone, covered entities purchased approximately $81.4 billion in outpatient drugs through the 340B program, reflecting its central role in CMS TTAG Letter to Administrator Engels Re: RFI: 340B Rebate Model Pilot Program (91 FR 7287) April 20, 2026 Page 2 of 3 sustaining safety-net care delivery nationwide. HRSA explicitly recognizes that the program enables covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."1 Within this framework, Tribal, IHS-operated entities, and UIOs are recognized participants, with Tribal contract and compact facilities accounting for approximately $87.0 million in 340B purchases in 2024. Although smaller in aggregate volume, this participation reflects the program's inclusion of federally funded Tribal health systems and UIOs as beneficiaries of the national safety-net infrastructure. Ensuring financial accountability within a system of this scale is essential. However, integrity mechanisms cannot come at the cost of the program's ability to function as a reliable financing tool for safety-net providers or the government's trust responsibility to Tribal Nations. Rebate Models are Incompatible with the Indian Health System TTAG remains concerned that the proposed rebate model is financially incompatible with the Indian health system. Indian Health Service (IHS), Tribal, and UIO (I/T/U) facilities operate within a chronically underfunded system that relies heavily on third- party revenue. Many Tribal facilities and UIOs rely on the immediacy of 340B savings to support pharmacy operations, maintain cash flow stability, and sustain access to essential and high-cost medications for patients. The programmatic shift to post- purchase reimbursement, in which providers must cover full acquisition costs upfront with no guarantee of timely or complete rebate recovery, introduces significant financial strain and risk for Tribal and UIO facilities due to the timing gap between acquisition and repayment. The absence of standardized and enforceable manufacturer rebate processes compounds these concerns. In the absence of enforceable standards governing manufacturer reimbursement timelines, compliance, or a clear appeals process for denied claims, this structure introduces significant revenue uncertainty that disproportionately impacts resource-constrained Tribal and UIO facilities. If rebates are delayed, denied, or inconsistently processed, providers must absorb those costs, resulting in direct impacts on facility revenue and financial stability. From a program integrity perspective, this structure increases complexity, creates additional junctures of failure, and shifts financial risk onto providers least able to absorb it. TTAG is also concerned about the administrative feasibility of a rebate model for Tribal facilities and UIOs. The rebate pilot would require additional claims data submission, transaction tracking, and reconciliation across multiple manufacturers and systems. Many Tribal pharmacies, health systems, and UIOs often operate with limited staffing and infrastructure capacity, and these additional requirements would divert resources away from patient care and essential clinical operations. Overextending 1 Health Resources & Services Administration. (2025, December). 2024 340B Covered Entity Purchases. 340B Drug Pricing Program. https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases CMS TTAG Letter to Administrator Engels Re: RFI: 340B Rebate Model Pilot Program (91 FR 7287) April 20, 2026 Page 3 of 3 already limited staff can impact program data accuracy and compliance and threaten overall program participation. TTAG supports efforts to strengthen program integrity and accountability through mechanisms that preserve point-of-sale discounting while minimizing the burden on participating entities. Approaches like standardized claim validation or centralized verification processes may offer more effective paths forward if designed to operate in real-time, ensure consistency across manufacturers, and avoid shifting financial and administrative responsibility onto providers or patients. Any oversight-focused changes should maintain the core 340B structure, ensuring that discounts are available at the point of purchase and that clear, uniform rules and mechanisms for appeals are in place without disrupting service delivery. Conclusion For these reasons, the TTAG strongly urges HRSA to exempt Indian Health Service, Tribal, and UIO providers from any rebate-based 340B pilot model. TTAG emphasizes that any disruption to the 340B program has direct implications for American Indian and Alaska Native patient access in areas that are already largely unserved. 340B savings support access to essential and high-cost medications in Tribal and Urban Indian communities. Therefore, we urge HRSA to conduct formal engagement with Tribes and UIOs through Tribal Consultation and Urban Confer before further consideration or implementation of a rebate model in place of the existing 340B discounts. Sincerely, W. Ron Allen, TTAG Chair Chairman, Jamestown SKlallam Tribe Cc: Mark Cruz, Senior Advisor to the Secretary Rachel Ryan Pedersen, Acting Director, CMS, DTA
HRSA-2026-0001-1997Family First Health Corporation2026-04-20T04:00Z16,950 chars
See attached file(s) Monday, April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family First Health Corporation, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to us posed by the proposed rebate model. The 340B program is foundational our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that we are facing staggering impacts: Financial Losses: We anticipate a loss of $500,000 from our entity-owned pharmacy operations and $150,000 for contract pharmacy arrangements. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. We strongly urge HRSA to exempt CHSs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Family First Health Corp in particular, this means it will impact: 3000 prescriptions/month Ability to offer free medications to 100 patients/month Increase in our administrative costs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life- sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national- surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Family First Health Corp provided $1,417,634 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Family First Health Corp anticipates needing one (1.00) additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Family First Health Corp anticipates an increase of one half (0.50) to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 6 2025 UDA Data, HRSA (hrsa.gov) A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.7 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.8 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, organizations would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone would pull too many funds away from the other services and programs we provide to our patients. If forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Delays, denials, and financial burdens are a huge concern. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a large net annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. In conclusion, Family First Health Corp strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Sincerely, Jennifer Englerth, CEO Family First Health Corporation 7 HRSA FAQ 8 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10
HRSA-2026-0001-1998Community Health Network, Inc.2026-04-20T04:00Z24,421 chars
See attached letter for comments. Thanks! Network Pharmacy Administration 7240 Shadeland Station Suite 300 Indianapolis, IN 46256 O 317.621.1881 F 317.621.7869 April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Community Health Network, Inc., which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. CHNw anticipates many negative impacts from the proposed rebate model. These include significant cash flow disruptions, delayed and uncertain receipt of 340B savings, increased operation and administrative burdens, and decreased ability to care for our patients. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. These requirements would impose higher burdens on our teams to maintain compliance and ensure that we can accurately submit the data necessary. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Our organization would incur significant financial and resource burdens if required to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Implementation of a rebate model would likely require our organization to reallocate staff hours to work on rebates and potentially result in hiring of staff that would otherwise be unnecessary. We have already needed to shift resources significantly to address the IRA/MFP requirements. The rebate model, spanning a wider range of payors and drugs, would impose even further operational burdens. Costs associated with this process would be substantial and ongoing. These are costs we would otherwise not have and could instead invest those into serving our patients. CHNw anticipates over $32 million dollars over the course of a year that our entities would have to float to manufacturers This process will likely require staffing hours to be shifted to managing this process resulting in over $100k in incurred costs per year. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Data requirements proposed for this model would require significant time and effort to prepare for and submit. These are not data fields that we are accustomed to providing. Due to the nature of billing rules in hospitals, these fields are difficult to obtain in a timely manner for physician-administered drug claims. These fields are often not set for weeks or even months after administration. These would cause delays to our organization in sending data and result in further delayed rebates. Data fields such as Health Plan ID, Claim ID, Claim line number, HCPCS codes, Unit of measure are very difficult to determine for hospitals. These are required fields that would substantially increase burdens on the entity to submit. There are substantial administrative costs and burdens that our organization anticipates would result in further costs being incurred. These include inappropriate denial of rebates, rebate data submission, tracking and reconciliation, delayed cash management and increased finance oversight. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include a decrease in our ability to provide charity care, patient discounts, uncompensated care, unreimbursed care, and patient transportation. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Our organization has experienced substantial issues with the MDPNP process that would further be exacerbated by implementing the 340B rebate model. We need to spend significant resources and time on tracking and reconciling claims through this process. This would only worsen with the rebate model. We would be required to submit substantially more claims data from many different data sources and that would only increase our administrative and operational burdens. Thank you for considering our comments. Sincerely, Community Health Network, Inc. April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Community Health Network, Inc., which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. CHNw anticipates many negative impacts from the proposed rebate model. These include significant cash flow disruptions, delayed and uncertain receipt of 340B savings, increased operation and administrative burdens, and decreased ability to care for our patients. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. These requirements would impose higher burdens on our teams to maintain compliance and ensure that we can accurately submit the data necessary. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Our organization would incur significant financial and resource burdens if required to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). Implementation of a rebate model would likely require our organization to reallocate staff hours to work on rebates and potentially result in hiring of staff that would otherwise be unnecessary. We have already needed to shift resources significantly to address the IRA/MFP requirements. The rebate model, spanning a wider range of payors and drugs, would impose even further operational burdens. Costs associated with this process would be substantial and ongoing. These are costs we would otherwise not have and could instead invest those into serving our patients. CHNw anticipates over $32 million dollars over the course of a year that our entities would have to float to manufacturers This process will likely require staffing hours to be shifted to managing this process resulting in over $100k in incurred costs per year. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Data requirements proposed for this model would require significant time and effort to prepare for and submit. These are not data fields that we are accustomed to providing. Due to the nature of billing rules in hospitals, these fields are difficult to obtain in a timely manner for physician-administered drug claims. These fields are often not set for weeks or even months after administration. These would cause delays to our organization in sending data and result in further delayed rebates. Data fields such as Health Plan ID, Claim ID, Claim line number, HCPCS codes, Unit of measure are very difficult to determine for hospitals. These are required fields that would substantially increase burdens on the entity to submit. There are substantial administrative costs and burdens that our organization anticipates would result in further costs being incurred. These include inappropriate denial of rebates, rebate data submission, tracking and reconciliation, delayed cash management and increased finance oversight. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include a decrease in our ability to provide charity care, patient discounts, uncompensated care, unreimbursed care, and patient transportation. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Our organization has experienced substantial issues with the MDPNP process that would further be exacerbated by implementing the 340B rebate model. We need to spend significant resources and time on tracking and reconciling claims through this process. This would only worsen with the rebate model. We would be required to submit substantially more claims data from many different data sources and that would only increase our administrative and operational burdens. Thank you for considering our comments. Sincerely, Community Health Network, Inc.
HRSA-2026-0001-1999Adventist Health2026-04-20T04:00Z10,821 chars
Adventist Health Clearlake Adventist Health Clear Lake 15630 18th Ave Clearlake, CA 93301 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Clear Lake, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Clear Lake has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Clear Lake is a 25 bed, Medicaid DSH, critical access safety-net hospital located in Lake County. The hospital serves as the sole full-service hospital in Lake County, serving a geographically isolated medically underserved rural population. The Clearlake community and surrounding residents rely on Adventist Health Clear Lake for inpatient and outpatient care. The next nearest hospital is about 15 miles away, although due to mountainous terrain, wildfire risk, and limited road infrastructure, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Clear Lake would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Clear Lake to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Clear Lake has gone beyond the classic hospital care and has been able to provide whole person care to the community, including projects like Hope Center, an interim housing facility and program for unhoused individuals in Clear Lake. Hope Center provides health screenings, meals, and a bed in a safe and secure space. Without 340B funding, Adventist Health Clear Lake would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Clear Lake to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Clear Lake has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Clear Lake would be $1,447.47 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Clear Lake does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Clear Lake is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Clear Lake to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $2,300.74 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Clear Lake. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $230.07 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Clear Lake, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Clear Lake respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Richard Riter, Finance Officer, via email at riterr@ah.org or by phone at 707-467-5351 if you have any questions or would like additional information. Sincerely, Richard Riter Finance Officer
HRSA-2026-0001-2000Nemours Children's Health2026-04-20T04:00Z33,762 chars
Please accept the attached comments on behalf of Nemours Children's Health in response to HRSA's Request for Information: 340B Rebate Model Pilot Program. We appreciate your consideration of our comments. 1 Well Beyond Medicine April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, On behalf of Nemours Childrens Health, thank you for the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program. We appreciate HRSAs longstanding commitment to strengthening the 340B program and preserving access to 340B discounts through its statutory enforcement authority. We write to provide comments in response to this Request for Information, with considerations specific to the pediatric population and the childrens hospitals that serve them. The Nemours Foundation, doing business as Nemours Childrens Health, established through the legacy and philanthropy of Alfred I. duPont, provides pediatric clinical care, research, education, advocacy, and prevention programs to the children, families, and communities it serves. Nemours Childrens is one of the nations largest multistate pediatric health systems and includes two freestanding children's hospitals as well as a network of more than 70 primary and specialty care practices. Nemours Children's seeks to transform the health of children by adopting a holistic health model that utilizes innovative, safe, and high-quality care, while also addressing childrens non-medical needs. As HRSA has previously noted, rebate models could fundamentally shift how the 340B Program has operated for over 30 years. We understand HRSAs intent through this Request for Information is to gather data to test the viability of a 340B rebate model. However, we are concerned about the expected financial impact and administrative burden such a model could have on 340B hospitals and the precedent this could set for the 340B program. Further, we are concerned that adopting a rebate model would undermine the integrity and intent of the 340B program to help covered entities (CEs) stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. For these reasons, we strongly oppose the implementation of any rebate model under the 340B program, given its potential to impose significant costs and burdens that far outweigh any benefits that might come from it. Preserving the upfront discount mechanism, which 340B hospitals and health systems like Nemours Childrens have relied on for years, is the best way to fulfil the original purpose and intent of the 340B program. Please find our detailed comments and recommendations below. Importance of 340B for Childrens Hospitals As you are aware, the 340B Drug Pricing Program supports safety net providers, including freestanding childrens hospitals, in their mission to serve low-income, uninsured, and underinsured patients. Under the 340B program, hospitals that treat a large number of low- income patients can purchase outpatient drugs at lower prices, freeing up resources to support hospital operations and provide services to patients to help bridge health care access gaps. Childrens hospitals were first made eligible for the 340B program in 2006 and began participating in 2009. Today, 53 out of the more than 2,600 hospitals participating in the program are childrens hospitals. As of 2024, childrens hospitals accounted for just 2.9% of total 340B purchases (about $2.37 billion out of $81.4 billion). Across the country, the 340B program has been a critical resource. It helps offset low Medicaid reimbursement rates and helps to further stretch resources to support initiatives that provide essential care to patients in the communities we serve and expand access to care for patients located in rural and underserved regions. At Nemours Childrens, our hospital inpatient census averages nearly 65% Medicaid beneficiaries across our primary states of Delaware and Florida. Broadly, childrens hospitals use savings generated from the 340B program to help subsidize part of the cost of providing a wide range of critical services that benefit the local communities we serve and that otherwise might not be financially possible. These savings are also used to cover the cost of uncompensated care for uninsured, underinsured, and low-income patients. For example, Nemours Childrens leverages our 340B savings to help subsidize high-cost treatments such as gene therapies, complex chemotherapy, and other life-saving interventions; expand access to behavioral health, maternal-fetal medicine and other important services in rural and underserved areas; and invest in initiatives that address food insecurity and promote health. The value of the savings generated by the 340B program cannot be overstated in its importance to enabling childrens hospitals like Nemours Childrens to invest in programs that enhance patient services, improve health, and expand access to care to help us further our mission of creating the healthiest generations of children. Costs to Covered Entities Broadly, we are deeply concerned about the expected administrative, operational, and financial costs associated with a 340B rebate model should such a program be implemented. It is our understanding that HRSA intends to expand a future rebate policy to include the 25 drugs subject to the Medicare Drug Price Negotiation Program by 2027 (15 additional drugs compared to the previous iteration of the model announced in 2025). This means CEs would be required to purchase even more drugs at significantly higher prices than the 340B price, maintain the drugs in inventory until dispensed, and then submit data and wait to receive a rebate. Nemours Childrens has always relied on upfront 340B discounts; given we have never operated under a 340B rebate model, the full scope of rebate-related costs is impossible to quantify in the absence of specific rebate model details. However, based on an initial review of potential administrative costs from HRSAs previous iteration of a rebate model in addition to the expected expanded scope of the model to the 25 drugs under the Medicare Drug Price Negotiation Program, we anticipate our overall pharmacy costs would materially increase under a rebate model. This is particularly concerning, given childrens hospitals are already preparing for major shifts that will impact payment under the Medicaid program. For the reasons outlined above, operating under a 340B rebate model is not financially sustainable and could result in difficult decisions about the programs and services we can continue to offer to our patients. Congress original intent for the 340B program was to reduce the price of outpatient drugs to support CEs to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A rebate model would require CEs to purchase 340B-eligible drugs at the higher wholesale acquisition cost (WAC) and apply for a back-end rebate, therefore increasing our upfront costs by millions of dollars as opposed to receiving an upfront discount. This runs counterintuitive to what the 340B program was designed to do to support safety-net providers. As such, we are extremely concerned about the administrative and financial costs that would result from shifting from an upfront 340B discount to a retrospective rebate model, as well as the potential to never fully recoup those costs. Below, we outline our specific concerns and response to HRSAs questions related to administrative and operational costs, staffing impacts, and other costs that we expect to result from any future rebate model. Administrative Costs Under a Potential 340B Rebate Model Pilot Program We are concerned about potential operational challenges associated with a rebate model that could increase administrative costs and burden on hospital staff. Any rebate program would require Nemours Childrens to spend significant sums on new administrative costs. We expect a departure from the current 340B upfront discount structure to a new retroactive discount mechanism would demand new resources, impose significant additional costs and burdens on our institution beyond those we experience now, and necessitate significant operational changes for implementation. Post-purchase rebates will require a level of reconciliation not currently necessary given the current structure of the 340B program. This change will require increased preparation, submitting and tracking of rebate submissions and payout, and additional review and auditing to ensure the amount of the rebate received is correct. We also anticipate potential time lags associated with record keeping in any rebate model, which can add a layer of burden to the accounting process. This is particularly relevant if rebates cross over fiscal years from the date of purchase, which could result from delays in payments or disputes. Beyond tangible administrative costs, the administrative burden any rebate model is expected to have on CEs and their staff is considerable. We are particularly concerned about the increased burden that may arise with timeline for payment, specifically when required timelines are not met by manufacturers. We anticipate this process could take months, particularly when payment amounts are incorrect, or claims are wrongfully denied. A rebate model structure would place the burden on CEs to continuously track the status of each rebate on a daily basis to ensure receipt, confirm that the payment amount is correct, and to initiate communication with manufacturers to resolve any issues with payment. It would also require the assurance of cooperation when these issues arise to ensure we can recoup these costs. This could increase both administrative burden and legal expenses if the need to challenge denial decisions arises. In general, this process will require continuous communication with manufacturers to track rebates, correct claims as necessary, and receive the proper payment amount. Given the administrative burden this pilot program is anticipated to entail, we can see a scenario in which tracking these rebates and ensuring correct and timely payment from manufacturers becomes so onerous that CEs cease to submit rebate requests at all, thereby reducing resources available to support our patient populations. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program As indicated above, we anticipate that any rebate model would impose significant burden on our staff to implement. Our institution has lean pharmacy teams. We anticipate that the increased time required to submit and match rebate data, track rebate submissions, and account for receipt of payment under a rebate model will add significant administrative burden on these teams. While the rebate model may seem limited in scope by only including the drugs subject to Medicare drug price negotiations, manually tracking each rebate request and ultimately matching the rebate payment amounts with the 340B prices for those 25 drugs to ensure correct payment will require increased staff time, operational changes, and ultimately will be more cumbersome and burdensome to implement. The resources needed to carry out this work, as well as its associated costs, will continue to significantly increase if a rebate model continues to be expanded to additional drugs. Additionally, HRSAs current estimate that a rebate model would only require an estimated five additional hours per week to implement significantly underestimates the time and resources it would take to not only prepare for but ultimately comply with a rebate model. Under the first iteration of HRSAs rebate model, Nemours Childrens staff across our enterprise spent a significant amount of time preparing for implementation. This involved substantial hours spent across several departments and teams to review the terms and conditions of the Beacon platform, overhaul our current reporting structure to comply with the model data requirements, and test and validate updated reports. These efforts were just in preparation for the anticipated model start date on January 1 and do not account for the increased amount of staff time we expect would be required under the confines of a new rebate model once implemented, specifically related to the daily and weekly tasks of submitting claims and tracking rebates. Based on our experience preparing for the first rebate model, we remain concerned about the administrative burden and increased staff time this model would require for compliance. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Program At Nemours Childrens, our pharmacy teams have designed our technological systems and operational infrastructure based on an upfront discount model. Any shift to a rebate mechanism will require us to undergo burdensome operational undertakings to develop a new model to adequately track and monitor rebate submissions, as well as incur significant costs to change those systems. We could also foresee a scenario where we would have to create a new accounts receivable system to ensure receipt of owed rebate payments by manufacturers. To comply with HRSAs initial iteration of the rebate model, our teams were preparing for substantial systems changes to gather and track the required pharmacy and medical claims data, and generate updated reports needed to apply for rebates. As noted above, it became evident as we prepared just how much time, effort, and resources would be required to comply, and to ultimately ensure claims data was being submitted correctly. We also would have been required to submit data that hospitals have not previously been required to provide to drugmakers to obtain 340B discounts, particularly the medical claims fields data that hospitals were asked to submit to obtain rebates. The rebate model pilot would have also required us to overhaul the reports we generate to capture medical claims data, requiring daily efforts to make internal changes, including IT changes, and validate information. We experienced significant administrative and operational burden even before a rebate model officially began. Additionally, under the prior iteration of the pilot program, each drug manufacturer was permitted to develop its own data submission process and IT platform, meaning CEs would have been required to navigate nine distinct manufacturer systems and protocols for the initial 10 drugs included under the pilot. In the lead up to implementation, we received confusing and inconsistent information across manufacturers on required medical claims data for rebate submission, which created complexities in developing IT solutions to submit the required data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to develop their own data submission process and IT platforms, as well as define the data fields and submission windows required to receive a rebate, the resulting uncertainty and variation across manufacturers will impose significant and ongoing implementation burdens on hospitals. For all these reasons, we remain concerned about the administrative lift and system changes that would be required to comply with a future rebate model. Should HRSA move forward with a rebate model, we urge HRSA to standardize the IT platform and data fields required for claims submissions and require that all manufacturers abide by the same requirements to reduce variation. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program The many costs and burdens expected from a rebate model, described above and addressed in the next section on expected cash flow impacts, will leave CEs to make difficult decisions that could impact the services we are able to provide. A retroactive rebate model that shifts the financial risk from manufacturers to childrens hospitals could have significant downstream impacts on patient care and operational needs, resulting from the need to divert limited resources to adjust to this model. Specifically, the delay in realizing these savings and the potential to never recoup them could undermine our ability to continue providing access to essential programs and services, including those provided within rural and underserved areas. A rebate model will result in a reduction of our upfront 340B savings, limiting our ability to reinvest these dollars as efficiently and effectively as we do under the current 340B discount structure. This could result in the need to make potentially difficult decisions about which programs to continue to support as a result of higher upfront costs and uncertainty about when and whether they will be recouped. Additionally, these collective changes could further reduce our financial resources to support our patient population, potentially jeopardizing our ability to provide the same level of care and support that we currently offer. In addition to the burdens described above, a rebate model would materially expand both the scope and intensity of legal support required to ensure compliance and to protect a CEs rights under the program. The anticipated increase in incorrect and delayed rebate payments, opaque denial rationales, and inconsistent data requirements will result in increased legal costs to determine whether denial decisions are compliant with HRSA requirements and to assess appropriate escalation strategies. Given that the existing Administrative Dispute Resolution process can take up to one year to resolve, CEs will incur prolonged legal costs while simultaneously bearing the financial risk of unrecovered rebates. Finally, childrens hospitals face unique operational and financial challenges in accessing drug rebates due to the specialized nature of pediatric care. Unlike adult hospitals, it is not uncommon for childrens hospitals to administer significantly smaller, weight-based dosage units to adhere to pediatric needs, or to provide specialized pediatric drug formulations such as liquid formulations for younger patients. This is particularly true of pediatric-capable specialty pharmacies, which are limited in number and provide these services in addition to high-touch clinical support. Flexible and individualized dosing strategies are critical for the pediatric population. These unique practices often delay the accumulation of quantities sufficient to meet the minimum package size required for rebate submission, which could create further delays in receiving payments for purchased drugs. It is unclear based on previous iterations of a rebate model when CEs could apply for a rebate for a purchased drug, and whether we must factor the timing from purchase to dispense before submitting data to claim rebates in this calculation. Further, we are concerned that a rebate model that imposes inconsistent data requirements or restricts eligibility could further constrain access to essential contract and specialty pharmacies. Should HRSA move forward with a rebate model, we strongly recommend that HRSA identify a pathway to address how the unique dispensing practices of childrens hospitals would impact the timeline and criteria for rebate submission and receipt for drugs where this circumstance would apply. Payment Timing and Potential Cash Flow Impacts The ability to purchase drugs at an upfront discounted rate through the 340B program has been instrumental in our ability to best serve our patients and reinvest savings in ways that benefit them. As such, we are deeply concerned about the financial implications that a rebate model could have for CEs, specifically from a payment timing and cash flow perspective. Under a rebate model, CEs would be required to purchase drugs at WAC, submit rebate claims to manufacturers for drugs dispensed to eligible 340B patients, and apply for rebates for the difference between the WAC and 340B price for these drugs. We understand HRSA intends to test the viability of rebate models through a limited set of drugs. However, requiring 340B hospitals to pay the significantly higher WAC price for these selected drugs and wait to receive a retrospective rebate payment rather than an upfront discount could lead to significant financial implications that may impact the types of services we are able to provide. Under this schema, we are concerned that manufacturers will be financially incentivized to make the rebate process as complicated and burdensome as possible, creating unnecessary expense and administrative burden in a system that HRSA has spent at least the last decade streamlining. Even if CEs are eventually made whole, floating millions of dollars to manufacturers in the form of higher upfront drug costs will divert critical savings and resources as hospitals await rebate payments. Shifting to a rebate model could delay needed funds to 340B hospitals, as we anticipate these changes could result in significant delays (or inappropriate denials) of 340B discounts and ultimately result in an overall financial loss. In the previous iteration of the rebate model, HRSA would have required manufacturers to pay rebates within 10 calendar days of submission of a complete claim. While we appreciate HRSAs intent to ensure CEs receive expeditious payment of rebates within 10 days, we have concerns about the feasibility of this timeline in practice. Any rebate model would require hospitals to absorb the full cost of drugs for an unknown period of time should rebates be delayed or denied, requiring additional administrative burdens to challenge or appeal such actions. As previously stated, we have serious concerns about our ability to recoup these costs from manufacturers under a rebate model. Delaying the ability for CEs to realize and therefore actualize these savings (even if eventually recouped) could result in significant financial impacts for childrens hospitals and downstream impacts on patient care. Prior experience submitting 340B claims data to 340B ESP, the platform used by CEs and manufacturers to resolve duplicate discounts, gives us more reason to expect errors and delays, which could lead to costly challenges. CEs upload de-identified 340B claims data originating from contract pharmacies, and 340B ESP identifies duplicate discounts with Medicaid and commercial rebate data provided by manufacturers. In using 340B ESP, we have experienced the need to address errors, inconsistencies, and opaque requirements on data matching. We must dedicate staff time and resources to address these issues when they arise, and we have experienced difficulty in speaking to 340B ESP directly to address these issues. Often, we are referred back to manufacturer policy, which causes further delays. We are concerned we would face similar challenges with claims submissions under a rebate model in working with manufacturers and the selected vendors operating the program, and that access to 340B rebates would be delayed or denied outright despite compliance with rebate model and manufacturer policies. This would significantly increase administrative burden and financial risk for CEs. We are also concerned that manufacturers could delay, deny, or dispute rebates at the point of dispensing for claims originating from contract pharmacies. These arrangements are critical for childrens hospitals, as our patients already face barriers to care related to geography, specialty pharmacy availability, and complexity of medication regimens. We urge HRSA to ensure that any rebate model does not undermine these important arrangements. To address the above issues, we recommend that any future rebate model specify a clear and time-bound dispute resolution process. The current Administrative Dispute Resolution process can take up to one year before issuing a decision, which would mean childrens hospitals would have to forgo a rebate and float large sums of money for an extended period, beyond the 10 days under consideration for required payment. This would create uncertainty and require additional operational support. Finally, the 25 medications subject to Medicare drug price negotiations beginning in 2027 that would be included under a rebate model are already costly. Based on our internal analyses, we would have needed to float $5-6 million in upfront across our enterprise to pay the WAC price for the 10 drugs currently subject to Medicare drug price negotiations, with no guarantee of expeditious payment of rebates. We continue to conduct internal analyses on the expected WAC price for the additional 15 drugs subject to drug price negotiations beginning in 2027; we anticipate our upfront costs would significantly increase based on the drugs we administer as an enterprise. As programs continue to grow, and we see more patients requiring these drugs in our specialty pharmacies, we will continue to see further increases in our upfront costs. Rebate Denials If HRSA moves forward with developing a rebate model, we urge HRSA to prohibit manufacturers from denying any rebates from 340B hospitals. This would help to limit a portion of the new costs and administrative burden that providers would be expected to incur to challenge denials. If HRSA decides to permit denials, HRSA should build in very specific guardrails for manufacturers to ensure denials are not arbitrary. Additionally, HRSA should require manufacturers to provide specific details on rebate denials so that CEs have sufficient information to address the denial and ensure there is a pathway to recoup 340B savings. Further, we are concerned that a rebate model could inadvertently allow manufacturers to introduce restrictive interpretations of patient eligibility, particularly if manufacturers conduct their own patient definition reconciliation as they evaluate each rebate claims 340B eligibility. Some manufacturers have already expressed interest in this kind of reconciliation effort by utilizing rebate models to require CEs to submit records establishing a relationship between a patient and the CE to satisfy the manufacturers own version of a patient definition (rather than adhering to HRSAs longstanding definition). We urge HRSA to ensure that any rebate model does not allow manufacturers to redefine or narrow the scope of 340B patient eligibility. HRSA should include specific accountability and enforcement measures for manufacturers to ensure compliance should rebate denials be permitted. Should HRSA move forward with a rebate model, we recommend that HRSA engage in a robust stakeholder engagement process to provide input on what an adjudication and denial process should look like. We urge consideration of specific guardrails for inclusion to protect CEs, such as creating a standardized denial framework and appeals process by which manufacturers must abide. We also recommend that HRSA consider rebate program participation repercussions, including pathways for revoking manufacturer participation in any future rebate model, for repeated noncompliance or systemic rebate denials. Data Collection By Covered Entities As previously stated, a rebate model would impose significant new data collection, reporting, and compliance burdens on childrens hospitals. During the prior iteration of the HRSA 340B Rebate Model Pilot Program, HRSA stated it would not impose new data-related burdens on CEs under a rebate model. HRSA has suggested that hospitals already provide the required information through 340B ESP or provide comparable data to third-party vendors; however, this is not the case. Implementing claims identification requirements often requires a significant investment of financial resources and the need for manual updates of millions of claims on a regular basis. Imposing additional claims data reporting could be duplicative and create an unnecessary burden for childrens hospitals, particularly if manufacturers implement different claims data submission requirements as some are currently doing for 340B discounts. We also have concerns about whether manufacturers would continue to change the data elements required for submission to successfully receive a rebate once a rebate model is operational. Should HRSA move forward with a rebate model, we strongly recommend that HRSA streamline and simplify the data CEs must submit to receive a rebate, making efforts to mirror the data CEs already submit through 340B ESP and to third-party administrators. We also recommend that HRSA require all manufacturers to abide by the same requirements to reduce variation and administrative burden, and restrict manufacturers ability to change data submission requirements for CEs after a rebate model becomes operational. Further, standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs. The timing of data submissions is dependent on the full claims lifecycle, including billing, reconciliation, and resolution of potential payer disputes, all of which can cause delays in the availability of finalized and accurate data. To meet manufacturer and program requirements, hospitals would be required to conduct frequent data validation, reconciliation, and auditing activities, representing significant additional administrative burden and resources. This can take a long time internally to generate a report that accounts for all these factors, generating concern about the limited time frames available to submit claims data. Therefore, we recommend that HRSA include specifications for manufacturers on applicable submission windows that account for these factors. Manufacturer Efforts to Avoid Duplicate Discounts We understand HRSAs commitment to preventing duplicate discounts within the 340B program. However, many 340B hospitals already participate in shared savings programs with the state in which they are located to prevent duplicate discounts in Medicaid. For example, Nemours Childrens Hospital, Delaware participates in such an arrangement with the State of Delaware. The state sends our hospital an invoice based on the 340B discounts we receive for medications provided to our Medicaid patients, accounting for rebates it would have received from manufacturers for drugs under the Medicaid program. We then pay the state a portion of our 340B savings in an effort to make the state whole and prevent duplicate discounts. In both Delaware and Florida, Nemours Childrens uses 340B ESP, which helps to identify and address duplicate discounts. While doing so supports our ability to prevent duplicate discounts and receive contract revenue back, it is an arduous process. While we support efforts to ensure program integrity, adhering to a rebate mechanism on top of our existing efforts to prevent duplicate discounts would be burdensome. We encourage HRSA to consider the unique arrangements and retrospective methods 340B hospitals use with states to prevent duplicate discounts instead of imposing additional requirements and new processes. 340B Program Integrity In the request for information, HRSA solicits feedback on the benefits of a rebate model and how it would affect the integrity of the 340B program. We do not believe that a 340B rebate model is necessary to improve 340B program integrity, accountability or transparency. Nemours Childrens supports efforts to improve program integrity in the 340B program. Requirements are already in place for hospitals participating in the 340B program to uphold program integrity, recertify eligibility for the program annually, maintain auditable records, and participate in audits conducted by HRSA and drug manufacturers. Nemours Childrens actively supports and participates in these processes to maintain our 340B status and supports efforts to ensure such program integrity measures remain in place. A rebate model is not a solution to improving 340B program integrity and will only increase administrative burden on childrens hospitals that regularly comply with numerous existing annual hospital reporting requirements. We also believe that any efforts to improve program integrity measures across the 340B program should be equitably applied to both covered entities and manufacturers. Conclusion Thank you for the opportunity to comment on this Request for Information. Given the concerns outlined above, we urge HRSA to consider withdrawing the concept of a rebate model program under the 340B program. Please do not hesitate to reach out to Casey Osgood at casey.osgood@nemours.org if we can be of further assistance. Sincerely, Robert Mullen, Pharm.D., RPh, MBA Vice President, Delaware Valley Patient Operations Enterprise Chief Pharmacy Executive Nemours Childrens Health Ryan Forman Hal Williams Vice President, Finance, Delaware Valley Vice President, Finance, Florida Nemours Childrens Health Nemours Childrens Health
HRSA-2026-0001-2001Adventist Health2026-04-20T04:00Z10,844 chars
Adventist Health Howard Memorial Adventist Health Howard Memorial 1 Marcela Drive Willits, CA 95490 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Howard Memorial, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Howard Memorial has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Howard Memorial is a 25 bed, critical access safety-net hospital located in Mendocino County. The hospital serves a geographically isolate, rural region of inland Mendocino County, with limited alternative acute-care access. The Willits community and surrounding residents rely on Adventist Health Howard Memorial for inpatient and outpatient care. The next nearest hospital is about 20 miles away, although due to weather, wildfire risk, landslides, and highway disruptions, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Howard Memorial would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Howard Memorial to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Howard Memorial has gone beyond the classic hospital care and has been able to provide whole person care to the community, including providing food to senior and food insecure community members, free vaccination to vulnerable populations, and continuation of SafeRx Mendocino, an opioid response initiative. Without 340B funding, Adventist Health Howard Memorial would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Howard Memorial to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Howard Memorial has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Howard Memorial would be $1,584.11 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Howard Memorial does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Howard Memorial is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Howard Memorial to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $1,723.31 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Howard Memorial. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $172.33 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Howard Memorial, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Howard Memorial respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Richard Riter, Finance Officer, at riterr@ah.org or 707-467-5351 if you have any questions or would like additional information. Sincerely, Richard Riter Finance Officer
HRSA-2026-0001-2002Mid-Delta Health Systems, Inc.2026-04-20T04:00Z10,429 chars
See attached file(s) - i LJ L., HEALTH SYSTEMS, INC April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for information: 3406 Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton. Mid-Delta Health Systems submits this comment in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program. Mid-Delta is a federally qualified health center based in Clarendon, in the Arkansas Delta region. We have participated in the 340B program since October 2006. The savings that program has generated over the last nineteen years have been central to how we operate, how we staff, and how we keep prescriptions affordable for the 4,646 patients we serve each year. I want to be direct about what the proposed rebate model would mean for us in practical terms. The rest of this letter walks through what we see when we apply the proposed mechanics to our actual data. What the Numbers Mean for Us Our 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is approximately $371,000 per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $2.36 million per year. The difference nearly $2 million is working capital Mid-Delta would be required to float to manufacturers every year the rebate ADMINISTRATIVE OFFICE 245 Madison Street Clarendon, AR 72029 870-747-3381 1-800-244-3602 FAX: 870-747-3631 MID-DELTA HEALTH CENTER 245 Madison Street Clarendon, AR 72029 870-747-3381 FAX: 870-747-3631 MID-DELTA HEALTH-DEWITT 1940 S. Whitehead Dr. Dewitt, AR 72401 870-946-4505 MID-DELTA HEALTH-STUT1GART 2022 S. Buerkle St. Stuttgart, AR 72160 870-659-2600 MID-DELTA HEALTH-LION'S 1117 Eason Road Clarendon, AR 72029 479-439-9680 FAX: 870-747-5963 A Member of Community Health Centers of Arkansas, Inc. IKW) X HEALTH SYSTEMS, INC mechanism operated. For a health center of our size, that is not a manageable working capital adjustment. It is a cash demand our balance sheet was not built to absorb. I want to call out one number in particular. The 2026 and 2027 MFP drug list represents 60.2% of our total 340B program six of every ten 340B dollars at Mid-Delta fall under the rebate mechanism. If the rebate is extended beyond the MFP list to the full 340B formulary and there is no principled reason to assume it will stay permanently confined the annual working capital requirement grows to approximately $3 million. No community bank in Monroe County will extend a line of credit at that scale against the promise of manufacturer reimbursement on disputed rebate claims. The same manufacturers that have spent the last five years trying to limit our access to these drugs through unilateral policies. Separately, our revenue from the 340B program has already been reduced by the Medicare Drug Price Negotiation Program. Our net 340B savings on affected products dropped by approximately 13% in the first quarter of 2026. That compression is already embedded in our 2026 operating projections. A rebate- model cash demand would land on top of an already-compressed savings stream. What We Saw When We Tried to Prepare Two problems surfaced during our preparation for the planned 2026 pilot that more preparation time would not resolve. The first is wholesaler credit capacity. Our wholesaler credit limits were calibrated against 340B acquisition pricing. In the weeks before the planned start, our wholesalers were direct with us: they were not positioned to extend the credit limits required to operate our 340B accounts at WAC. When credit is exceeded, orders are held. When orders are held, replenishment stops, and the 340B program stops with it. This issue alone should suffice to drop all consideration of moving forward with a 340B rebate model. The second is reconciliation infrastructure. Our team reviewed the third-party vendor interface manufacturers chose for rebate adjudication. The data and reporting available through that interface were not adequate to support a reliable reconciliation. The vendor cited HIPAA compliance as the reason for not retaining prescription numbers on claims but any vendor entrusted with this A Member of Community Health Centers of Arkansas, Inc. i'll1-0 1- 1_,1_1_1/ X HEALTH SYSTEMS, INC function should meet the security requirements necessary to retain and report Rx numbers to its system users. Without that claim-level detail, a denial cannot be matched back to a specific dispense, and we cannot close the cash loop on the transaction. While an ICN to Rx Number mapping report was made available in the system, it was only available at the time of upload. If the uploading user failed to grab that key, there is no option to retrieve that crucial mapping key. With the dollars we have risk in this proposed program, that is an unacceptable process. Applied to our 2026-2027 MFP volume, a five percent denial rate a reasonable planning assumption would place approximately $120,000 at risk in the first year of the pilot. What Happens at the Pharmacy Counter Mid-Delta operates through a contract pharmacy network. The 340B benefit reaches our patients today because we acquire the drug at 340B pricing at the point of purchase, and that price is reflected at the pharmacy counter. A rebate model changes that arithmetic. The entity acquires at WAC and the 340B benefit is reconciled afterward. HRSA's proposed ad hoc ceiling price file was an attempt to mitigate this problem, and we appreciate the effort, but our third-party administrators were not positioned to operationalize the file in the narrow lead time available before the planned 2026 start. Three outcomes at the counter are possible and none are acceptable: the pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay from the patient, and Mid-Delta floats the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. None of these results is consistent with the function of a safety-net provider and it places our patients in unnecessary risk of complications, hospitalizations, or early death due to unmanaged diseases. Separately, Executive Order 14273 instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it. A rebate model, by its architecture, cannot deliver the 340B price at the point of sale, and HRSA has not explained how covered entities are expected to resolve that conflict. A Member of Community Health Centers of Arkansas, inc. Ktri 1_1/ X HEALTH SYSTEMS, INC Who Our Patients Are Mid-Delta served 4,646 patients in the most recent reporting period. Ninety-nine percent live at or below 200% of the federal poverty level, and ninety-six percent live at or below 100%. Take a moment to let those numbers sink in ninety-six percent live at or below 100% FPL. Thirty-seven percent belong to racial or ethnic minority groups. Forty-three percent of our adult patients are managing hypertension, and eighteen percent are managing diabetes. The medications on the 2026 and 2027 MFP lists insulins, SGLT2 inhibitors, and other chronic- disease medications are prescribed at our clinic and filled at our contract pharmacy partners every day. Under the current upfront discount model, those medications reach our patients at prices they can manage. A rebate mechanism puts that access at risk at the pharmacy counter. Administrative Burden HRSA's Information Collection Request estimates the administrative burden of a rebate model at approximately five hours per week per covered entity. That estimate is not consistent with what our preparation work indicated. Based on the combined 2026-2027 MFP claims volume, we estimate approximately 0.25 additional FTE dedicated to submission, denial management, reconciliation, and cash forecasting. That is a position we do not have today and would have to fund from the same pool of dollars that supports clinical services. A Better Option Exists HRSA is solving a real problem. Deduplication between 340B and MFP is required, and manufacturers are not obligated to pay both discounts on the same unit of drug. The practical question is whether the rebate model is the least burdensome way to accomplish deduplication, and the practical answer is that it is not. A neutral, federally administered 340B claims clearinghouse would achieve the same deduplication objective without placing manufacturers in the role of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital, and without creating the access and compliance problems described above. CMS is already building the framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. A Member of Community Health Centers of Arkansas, Inc. KN_IPr ry ) IHEIAILT H SY ST E MLS, I NI A second alternative is already in use. Manufacturers currently require 340B claims data from covered entities as a condition of 340B access. That data could be sufficient to support MFP/340B deduplication without constructing a parallel rebate adjudication infrastructure on top of it. One operational adjustment is warranted: for new pharmacy accounts or accounts without claims history at the time a data requirement is imposed, manufacturers should accept an attestation of compliance rather than withholding 340B access pending data that does not yet exist. Request Mid-Delta Health Systems respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program, to exempt federally qualified health centers from any rebate mechanism that may follow, and to direct the deduplication question to the neutral clearinghouse framework already under development at CMS or to the existing manufacturer claims data mechanism with the attestation accommodation described above. Thank you for your consideration. Sincerely, Monica L. Lindley Chief Executive Officer Mid-Delta Health Systems Clarendon, Arkansas 340B ID: CH062090 A Member of Community Health Centers of Arkansas, Inc.
HRSA-2026-0001-2003Adventist Health2026-04-20T04:00Z10,838 chars
Adventist Health St Helena Adventist Health Howard Memorial 1 Marcela Drive Willits, CA 95490 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Howard Memorial, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Howard Memorial has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Howard Memorial is a 25 bed, critical access safety-net hospital located in Mendocino County. The hospital serves a geographically isolate, rural region of inland Mendocino County, with limited alternative acute-care access. The Willits community and surrounding residents rely on Adventist Health Howard Memorial for inpatient and outpatient care. The next nearest hospital is about 20 miles away, although due to weather, wildfire risk, landslides, and highway disruptions, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Howard Memorial would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Howard Memorial to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Howard Memorial has gone beyond the classic hospital care and has been able to provide whole person care to the community, including providing food to senior and food insecure community members, free vaccination to vulnerable populations, and continuation of SafeRx Mendocino, an opioid response initiative. Without 340B funding, Adventist Health Howard Memorial would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Howard Memorial to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Howard Memorial has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Howard Memorial would be $1,584.11 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Howard Memorial does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Howard Memorial is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Howard Memorial to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $1,723.31 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Howard Memorial. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $172.33 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Howard Memorial, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Howard Memorial respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Richard Riter, Finance Officer, at riterr@ah.org or 707-467-5351 if you have any questions or would like additional information. Sincerely, Richard Riter Finance Officer
HRSA-2026-0001-2004(no commenter metadata)2026-04-20T04:00Z18,402 chars
See attached file(s) Ilk PRISCILLA CHAN AND MARK ZUCKERBERG SAN FRANCISCO GENERAL Hospital and Trauma Center City and County of San Francisco Daniel Lurie Mayor April 20, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of the San Francisco Department of Pubtic Health (SFDPH) and Zuckerberg San Francisco General Hospital (ZSFG), we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on SFDPH and ZSFG that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which we have relied on for years, is the best way to fulfill that purpose of the 340B program. Ketrtoslology infoirning responses to RF1 The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request, for a total of 25 drugs. Local Program Overview: San Francisco Department of Public Health is the public health system for the City and County of San Francisco, and participates in the 340B program via three covered entities: 1) a Disproportionate Share Hospital (DSH) covered entity, SFDPH's ZSFG, which includes an acute caretrauma hospital, including specialty care, primary care, and infusion services. 2) a Sub-Grantee of a Healthcare for the Homeless grant, which includes primary care clinics run by SFDPH located throughout the low- income areas of the county, and 3) the Department's "San Francisco City Clinic", which reties on Ryan White funding, ADAP, and the 340B drug pricing program to be able to provide STI and HIV care and prevention regardless of patients' ability to pay. Functionally, both the DSH (1) and Grantee (2) programs are managed byZuckerberg San Francisco General pharmacy staff and descriptions for both programs will be described as "ZSFG" for the remainder of this letter and represents nearly all 340B activity in our system. ZSFG is a safety-net provider, with 34% of patients considered low-income and 86% have either Medicare or Medicaid coverage. ZSFG, as part of the county's health network, provides cornprehensive health access (primary, specialty, acute care, medication coverage) for those without insurance. Current 340B transactions processed during the most recent fiscal year under the upfront 340B Discount Program: The 340B program is essential to providing medication access for our patients, with the following volume of transactions for FY2024-25: Approximately 670,670 total transactions for our ZSFG Covered Entity. 146,807 prescription-related transactions. 450,270 ZSFG campus medication administration transactions in the mixed-use setting. 15,469 clinic medication administration transactions in our Grantee Covered Entity clinics. Approximately 15,124 prescription transactions from all contract pharmacies The 340B discounts received in FY 2024-25 reduced the total pharmaceutical cost needed by our system by over 35%, with moneyfrom the program used to support programs and medication access for those without insurance or under-insured. Current administrative costs under the Upfront 340B Discount: Costs include personnel, vendor contracts, and contract pharmacy monitoring as noted below: Staff: 1 FTE Pharmacist, 0.5 FTE technician, 0.4 FTE program analyst, and combined 1 FTE of Manager/Program oversite Current vendor contract: one TPA vendor for both our DSH-campus, one vendor for our contract pharmacies, and one contract for compliance auditing. Current monitoring and optimization (1.0 FTE pharmacist, 0.5 FTE technician); italic sections identify areas where program capacity will be most directly impacted by a rebate model pilot program: 340B Monthly and Weekly Operations: I Review all processed outpatient prescriptions for the following: 2 340B prescription eligibility based on location and provider Prevention of duplicate discounts by appending the appropriate Medicaid rnodifiers and the 340B actual acquisition cost and Subrnission Clarification Code Optimize 3408 savings by reviewing high-impact unaccumulated prescriptions for 340B eligibility Optimize pharmacy revenue by ensuring non-340B claims are adjudicated appropriately without the 340B modifiers I Review medications administered at the infusion center: Ensure all 340B Medicare claims are processed with a TB modifier Ensure all Status G and K drugs as indicated by CMS OPPS Addendum B are appended either the .1W waste modifier or .IZ (no waste) modifierfor appropriate 340B accumulation and appropriate charge submission to CMS for reimbursement I Review 340B/GPO mixed use transactions: Ensure the charge data from hospital EMR feeds appropriately into the 340B software to ensure accumulations Troubleshoot any issues related to interfacing data with the hospital EMR, 340B software, and wholesale vendor. 340B Monthly Compliance: I Monitor retail pharmacy compliance with in-house and contract pharmacies I Monitor mixed-use pharmacy compliance with all hospital mixed use locations such as Emergency department and Infusion Center I Monitor clean site medication administrations and purchases to maintain compliance Impacts under Potential 340B Rebate Program Administrative Costs Under a Potential 340B Rebate Program: For ZSFG, a shift to a new rebate mechanism demands new resources dedicated to its oversight, imposing additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Data collection under a 340B Rebate Model Program. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, due to initial concerns about privacy of claims-level data, our covered entity has NOT participated in sharing information through 340B ESP. The Rebate Pilot represents new and ongoing data submission beyond MFP. A rebate rnodel would impose substantial new claims monitoring burdens beyond what is required by current practices or for the MDPNP. One clear example ofthis is the requirement 3 to provide medical claims data. Medical claims data represents something new. Our current vendors only access pharmacy claims and are unable to consider medical claims. Thus, for hospital medical claims, we are required to upload the data ourselves because automated reports will be insufficient and our hospital will be unable to access any 340B pricing for all Medical Claims due to the narrow window of claim eligibility. For example, it might take 6 months to gather enough 340B accumulations for Xarelte for medical dispensations, but medical claim data after 45 days cannot be uploaded. While the impact is clearly greater in the retail setting compared to the medical setting, the impact will compound itself as more manufacturers participate in the 340B rebate program. If the 340B rebate program is to be rolled out, an exception needs to be made for covered entities purchasing medications for non-retail use for that very reason. One-time administrative and operational costs under a 340B Rebate Model Program: The following staff time would be expected for the initial research, workflow deve[opment, and onboarding to implement a 340B Rebate Program at ZSFG: Establish a Beacon 340B Rebate account and work with key stakeholders in establishing user access 40 hours Develop 340B Rebate workflow for claim data submission and rebate reconciliation 120 hours Work with 340B software vendor to develop and allow 340B Claim data submission 10 hours Coordinate with hospital EMR analysts and wholesale vendor to review how claims can be adjudicated to allow for proper reporting of 340B acquisition costs and modifier codes to prevent duplicate discounts with Medicaid claims 32 hours Attended DHCS and 340B Health meetings regarding 340B rebate pilot - 10 hours Training pharmacy and non-pharmacy staff on howto utilize the Beacon 340B Rebate platform 160 hours Integrating the 340B Rebate Modelwith the MFP modelto monitor and evaluate for duplicate discounts Ongoing, incremental administrative and operational costs under a 3408 Rebate Model Program: As noted in the table below, the estimate by HRSA and drug manufacturers that the Rebate Modet woutd require only 5 additional hours per week is a gross underestimate of the impact to the fiscal impact and the staffing required to support a Rebate Model. Estimated annual loss of $1.1 million in 340B Mixed Use: A 340B rebate model will require precise coordination between the pharmacy 340B operation team, 4 pharmacy purchasing team, hospital account receivable team, and hospital finance team to ensure all rebate payments align with 340B claims, especially in mixed use settings such as our on-campus infusion center. savings from the hospital mixed use Rationale: Staff bandwidth to identify missed savings opportunities will decrease 50-75% due to additional monitoring of a Rebate Program. 340B operations staff realized between $1 million to $1.6 million in savings in past 12-month period with enhanced monitoring, as noted in Current Monitoring and Optimization section above. In-House retail: This new continuous process of reconciling 340B rebates will place a heavy burden across all areas of the 340B Pharmacy Team and hospital. This will reduce the team's abilityto maintain optimization achieved in past 12 months. Estimated annual loss of up to $1.5 million in 340B savings frorn the hospita[ retail spending accounts due to reduced 340B optimization oversight Time to manage rebate denials/other disputes - Rebate disputes must be addressed at the prescription claim adjudication level, NDC purchasing level, and the accounting level; all of which requires various key team members of the hospital pharmacy and accounting team to address 1T/Patient Financial Services: 2-3 hour per week Accounting: 1-2 hours per week Pharmacists time: 8 hours per week Technician time: 4 hours per week Cost to manage the Beacon 340B rebate platform - For Medical Claims, data must be manually extracted from the 340B software and uploaded into the Beacon 340B rebate platform on a continuous basis due to the limited 45-day window for clairn uploads New Vender management contracts/oversight Pharmacist time: 8 hours per week of pharmacist's time Pharmacist: 1 hour per week Manager: 8 hours per month Incremental costs under a 340B Rebate Program - Vendor atZSFG: TPA for ZSFG: $12,000 annual fee, which includes initial claim submission to Beacon platform for rebate processing, new API integration, new helpdesk support, dashboard tracking of rebate received, ongoing logic configuration to claims processing. TPA for contract pharmacies: currently they are unable to provide additional services to support a Rebate Model, so all additional work will be absorbed by our staff at ZSFG. 5 Additional costs under a 340B Rebate Program - San Francisco City Clinic (Ryan White): San Francisco City Clinic is the third covered entity in our system. Changing the 340B program to a reimbursement model would severely challenge our ability to provide for individual patients and to fulfill our public health mission of controlling STIs and HIV in San Francisco County. Because the clinic simply does not have staff to support any increased monitoring and data submission via 340B ESP to comply with the Rebate Model. Of the 25 drugs for the MDPNP, the primary drug impact will be Biktavey. 340B pricing has allowed City Clinic to efficiently use federal funds to purchase a clinic stock of Biktarvy to be used for 7-day starter packs. These starter packs are for patients whose treatment start would be delayed by difficulties accessing a commercial pharmacy or enrolling in medication coverage. Using 340B pricing, we were able to purchase 19 bottles of 30 tablets for $50,000, which is the cost of 10 bottles at the AWP of $5,000/bottle. To serve the same patients with those 19 bottles, it wilt cost us $95,000. This 90% increase in cost will directly reduce funding of other HIV-related services supported by federal funding. Additional fiscal considerations fora potential 340B Rebate Program: The reductions in Medicaid funding resulting from H.R. 1 substantially impacts our heatth system's revenue. As noted above, to maintain the current degree of 340B savings for our underserved patients under a potential 340B Rebate Model Pilot Program, we would need to nearly double our small 340B-dedicated pharmacy staff as well as partial hires in patient financial services and accounting. The current fiscal climate would create significant challenges with allocating staffing time necessary for implementing and operating such a program. Reliance interests: The RFI expressly invites comment on "retiance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably rnayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Zuckerberg San Francisco General Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Unlike the existing upfront discount mechanism, any rebate mechanism will force Zuckerberg San Francisco General Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute to the amount of over $1 (Lam dollars based on current utilization of the 25 drugs in the MDPNP. 6 Efforts To Avoid 340B/MDPNP Duplicate Discounts. While we appreciate the drug companies concerns around deduplication, we have not had any drug company contact our covered entity with these concerns, to date. As such, we do not understand or support the need to move to a rebate model pilot to address that issue. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Zuckerberg San Francisco General Hospital, HRSA should rety on those other options. Any other decision would impermissibly privilege the interests of drug companies overthose of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Association's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costlythan a rebate mechanism. For all of these reasons, Zuckerberg San Francisco General Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. All the different costs and burdens from a potential rebate program would mean that Zuckerberg San Francisco General Hospital would no longer be able to use 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We appreciateyour consideration ofthese comments and lookforward to workingwith HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Susan Ehrlich, MD MPP Chief Executive Officer Zuckerberg San Francisco Genera! Hospital 7
HRSA-2026-0001-2005Adventist Health Ukiah Valley2026-04-20T04:00Z10,664 chars
Adventist Health Ukiah Valley Adventist Health Ukiah Valley 275 Hospital Dr Ukiah, CA 95482 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Ukiah Valley, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Ukiah Valley has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Ukiah Valley is a 68-bed facility and serves as the only Level IV trauma center and primary stroke center in Mendocino County. As the countys only trauma-designated hospital, it acts as the principal inpatient and emergency care anchor for inland Mendocino County, providing essential services like cancer care and maternity care to rural and tribal communities. The next closest hospital is approximately 25 miles away, but due to challenging conditions such as weather, wildfire risk, landslides, and highway disruptions, actual travel times are often far longer than the distance suggests. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Ukiah Valley would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Ukiah Valley to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Ukiah Valley has gone beyond the classic hospital care and has been able to provide whole person care to the community, including operating a homeless street medicine program that serves more than 1,300 people annually. Without 340B funding, Adventist Health Ukiah Valley would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Ukiah Valley to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Ukiah Valley has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Ukiah Valley would be $44,553.67 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Ukiah Valley does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Ukiah Valley is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Ukiah Valley to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $1,134,410.10 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Ukiah Valley. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $113,441.01 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Ukiah Valley, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Ukiah Valley respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Richard Riter, Finance Officer, at riterr@ah.org or 707-467-5351 if you have any questions or would like additional information. Sincerely, Richard Riter Finance Officer
HRSA-2026-0001-2006Adventist Health Sonora2026-04-20T04:00Z10,748 chars
Adventist Health Sonora Adventist Health Sonora 1000 Greenley Rd Sonora, CA 95370 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Sonora, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Sonora has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Sonora is a 72 bed, Medicare DSH, safety-net hospital located in Tuolumne County. The hospital serves a geographically isolated medically underserved rural population. The emergency department provides care to over 100,000 residents across the sierra foothills. The Sonora community and surrounding residents rely on Adventist Health Sonora for inpatient and outpatient care, and specialty care like maternity, robotic surgeries, and cancer services. The next nearest hospital is 30 miles away, but due to limited road access, wildfire risk, and seasonal travel constraints, it is not always available to the Sonora community. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Sonora would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Sonora to provide medication at free or reduced cost for our patients. For example, an elderly couple both facing cancer diagnoses lived far from providers. Due to 340B benefits we were able to directly cover expenses that were not covered by health insurance like gas, groceries, utility bills, and medication co-pays. The patients were able to focus on their treatment and healing. Without 340B, individuals like the couple above could be left without help and cause more harm to their well-being. Our hospital relies on these savings to help every single one of our patients, whether it is a discounted prescription or the ability to pay for life-saving medical treatment. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Sonora to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Sonora has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Sonora would be $65,789.63 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Sonora does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Sonora is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Sonora to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savingsfunctionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $2,807,758.60 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Sonora. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $280,775.86 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Sonora, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Sonora respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Jeff Shultz/Finance Officer/shultzja@ah.org/(209) 536-5019 if you have any questions or would like additional information. Sincerely, Jeff Shultz Finance Officer, Adventist Health Sonora
HRSA-2026-0001-2007(no commenter metadata)2026-04-20T04:00Z33,066 chars
See attached file(s) April 20th, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrative Engels, On behalf of the Massachusetts Health & Hospital Association (MHA), and our member hospitals, health systems, physician organizations, and allied healthcare providers, thank you for the opportunity to respond to the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. MHA serves as the unified voice for Massachusetts hospitals and health systems in public advocacy with both state and federal government. Our members include 76 licensed hospitals, many of which are organized in healthcare systems. MHA represents 33 340B hospitals across the state, all of which provide essential services and medically necessary care to their communities and would experience significant financial and operational impacts if the rebate model were to be implemented as proposed. The 340B Drug Pricing Program is a vital element of the commonwealths healthcare safety net, enabling hospitals and community health centers to manage rising prescription drug costs while reinvesting savings directly into patient care. These savings help offset the high cost of pharmaceuticals; sustain and expand essential health services; support workforce investments; and fund a wide range of community benefit programs. Importantly, 340B savings are also used to help low-income patients access needed medications regardless of their ability to pay, including through free or discounted medications for uninsured and underinsured individuals. Without the upfront benefits generated through the current 340B discount model, Massachusetts hospitals would face significant challenges in maintaining critical community services such as medication management and clinics that address substance use and mental health disorders. The resulting impact would affect all patients, regardless of payer type, and would be especially acute in communities where access to care is already fragile. MHA is deeply concerned that any rebate-based approach would impose substantial financial and operational burdens on already strained Massachusetts hospitals, diverting critical resources away from essential services and patient care. The rebate model undermines the intent of the Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 2 program and introduces an interim step and middleman, leading to significant inefficiencies, compliance risks, and administrative complexity that undermine the core intent of the 340B program. For these reasons, MHA strongly urges the Health Resources and Services Administration (HRSA) not to implement a rebate model under the 340B program. The proposed 340B Rebate Model Pilot would fundamentally alter how 340B benefits are accessed by placing manufacturers in the position of deciding whether and when to approve rebate payments. This shift exposes hospitals to severe financial uncertainty, as they would be required to front the full cost of drugs at levels far higher than current 340B prices or negotiated non-340B rates. Hospitals are especially concerned about their ability to absorb these upfront costs while awaiting a rebate determination controlled entirely by the manufacturer, which would retain the financial benefit of holding the funds during the review process. Such an arrangement threatens the integrity of the 340B program and runs counter to its long-standing purpose of helping hospitals stretch scarce federal resources as far as possible. To understand and illustrate the effects of the proposed rebate pilot to the 33 Massachusetts 340B hospitals, MHA conducted a survey to gauge the costs and administrative burdens to hospitals, as well as the impact on patient access and services. Results from the survey include: In aggregate, respondents estimated a $26.9 million monthly outlay for the 10 drugs introduced in the 2026 PILOT program. 340B entities estimate that in aggregate, approximately 15% of eligible rebates will not be received, with some hospitals anticipating rates closer to 30%. This is expected to result in an annual loss of approximately $47.2 million in revenue a significant loss in proportion to annual revenue. The fiscal impact will be greater if additional drugs are included in a potential future pilot, including those that are part of the 2027 Medicare Drug Price Negotiation Program Agreements. Nearly 100% of respondents reported that the PILOT program will be an additional administrative burden on existing staff and that staff will require additional training for this program. o Approximately 70% of respondents anticipate hiring more than 10 new FTEs at a cost of $1.3 million to assist with the rebate process; some organizations cannot afford to hire additional staff as they prioritize the availability of patient- facing services. o 38% of respondents anticipate allocating frontline/clinical staff time away from clinical duties to administrative duties to assist handling the program o All but one respondent reported anticipating expending additional resources for legal expenses related to the rebate process. 77% of respondents reported anticipating acquiring additional software/IT products to assist with the rebate process These challenges come at a time of unprecedented financial strain for Massachusetts hospitals. The statewide median hospital operating margin fell to negative 2% in FY2024, down sharply Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 3 from 0.2% the year prior.1 Hospitals continue to face severe workforce shortages, rising costs of care, and anticipated growth of uninsured and underinsured populations that will further strain an already fragile safety net. Introducing an administratively complex rebate pilot in 2027 would add yet another serious burden, shifting resources away from patient care and toward pharmaceutical manufacturers. It will also add unnecessary administrative cost and complexity to the system, at a time when the administration is rightfully focused on affordability, efficiency, and reducing overall healthcare costs. While MHA recognizes that longstanding federal programs can benefit from thoughtful improvements, now would be a dangerous time to pursue a fundamental restructuring of the 340B program. The proposed 340B Rebate Model threatens hospitals at a moment when they are least able to absorb additional financial instability. Maintaining the long-standing upfront discount mechanism on which hospitals have relied for decades is the most effective way to preserve the core mission of the 340B program and ensure continued access to essential services in Massachusetts. Below, we provide additional details and respond directly to the specific questions HRSA posed in the Request for Information. We appreciate the opportunity to offer these comments and thank HRSA for its continued engagement with hospitals on this critical issue. Costs to Massachusetts Hospitals and Covered Entities Financial Pressures and the Critical Role of the 340B Program for Hospitals Massachusetts hospitals are facing severe and worsening financial strain, underscoring the critical importance of the 340B program in keeping patient care services viable. These financial challenges are already affecting hospitals workforce, service capacity, and ability to invest in innovation. According to the Center for Health Information and Analysis (CHIA), rising pharmaceutical costs are a major driver of this strain: pharmacy spending is the largest contributor to healthcare cost growth and, net of rebates, accounted for 23.2% of Massachusetts total healthcare expenditure growth, with hospital drug spending increasing at a rate four times higher than overall hospital price growth. Pharmaceutical costs now represent approximately 20% of Massachusetts outpatient spending, reflecting the disproportionate and unsustainable effect of drug pricing on provider finances1. The 340B program is therefore not ancillary but essential to hospitals ability to manage escalating drug costs while continuing to serve at-risk populations. A shift to a rebate-based 340B model would undermine this support by requiring substantial upfront cash for drug purchases, along with investments in additional staff, specialized software, and pharmacy resources further destabilizing hospitals that already are operating at a loss and threatening the programs fundamental purpose of strengthening the healthcare safety net for patients. Drug Acquisition Costs 1 Annual Report on the Performance of the Massachusetts Health Care System (March 2026), Center for Health Information and Analysis Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 4 Massachusetts 340B hospitals reported an estimated $26.9 million monthly outlay for the 10 drugs introduced in the 2026 PILOT program the only drugs included in the MHA survey. If the number of drugs were expanded as mentioned in the RFA to also include the 2027 Medicare Drug Price Negotiation Program Agreements, the fiscal impact will be greater. Hospitals be put in the untenable position to come up with this money to pay pharmaceutical companies the full price for the drugs. Hospitals already operating on negative margins may have to take greater financial risks, by assuming loans or diverting reserves to cover the initial purchase of drugs in this rebate model. This funding will then go to pharmaceutical companies, where they can invest the money and collect interest on it during the time they take to process hospital rebate claims, further increasing their profit margins at the expense of 340B hospitals. In addition to fronting cash, Massachusetts 340B hospital respondents estimate that in aggregate, approximately 15% of eligible rebates will not be received, with some hospitals anticipating rates closer to 30%. This is expected to result in an annual loss of approximately $47.2 million in revenue. The parameters by which pharmaceutical companies will have to abide when processing rebate claims are unclear. As we have seen with prior authorization, confusion around claims can cause payment delays for months at a time. During these months in which hospitals wait for rebate payments, they will still have to purchase drugs, leading to a greater financial deficit, while pharma continues to be paid. This rebate model greatly favors the pharmaceutical industry, instead of hospitals caring for patients. Massachusetts 340B entities with contract pharmacies also will be negatively affected by the proposed rebate model, losing up to $183.4 million. Contract pharmacies are vital to ensuring patients have access to their prescriptions in their communities. Pharmaceutical companies have been attacking hospitals use of contract pharmacies for years through various discriminatory policies, causing many states to pass legislation to protect such pharmacies. The proposed model would limit patients access to medications in their communities because of the increased upfront costs to purchase drugs. In turn, this could cause more acute health issues across populations. It could also cause contract pharmacy closures, leading to issues such as pharmacy deserts. The anticipated effects of the pilot on contract pharmacies is detrimental to patient access to medications. Cash Flow, Financing, and Pricing Methodology Concerns A shift from the longstanding upfront 340B discount to a rebate-based model would materially harm hospitals cash flow by requiring covered entities to purchase drugs at full wholesale acquisition cost (WAC) and wait for post-dispense rebates. This change would eliminate the immediate availability of 340B benefits, depriving hospitals of working capital that is currently used to support patient care and, in many cases, generates modest but meaningful income that helps offset operating costs and ultimately allows them to maintain care services. Hospitals with limited access to capital, particularly rural and safety-net providers, would be disproportionately affected and may incur new borrowing or financing costs. In addition, purchasing at full WAC has implications beyond cash flow; it may distort average pricing benchmarks, including Average Wholesale Price (AWP), by increasing the volume and duration of transactions at higher price points. Such distortions could have downstream effects on payer reimbursement methodologies, pharmacy contracts, and patient cost-sharing calculations that rely on AWP-based formulas. These combined financial and pricing effects underscore that a rebate Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 5 model is not operationally nor economically neutral for hospitals and risks undermining the stability and predictability that are foundational to the 340B program. Payment Timing and Potential Cash Flow Problems for Covered Entities Massachusetts hospitals are concerned that imposing a strict 45-day deadline for rebate claim submissions will result in the loss of legitimate 340B rebates due to routine and unavoidable realities of hospital billing and care delivery. Claims resolution is frequently delayed by long patient lengths of stay, late clinical coding, insurance adjudication timelines, and retroactive changes to patient status, all of which commonly extend beyond 45 days. In addition, reversals, resubmissions, and retroactive charge or coverage adjustments are a normal part of the claims lifecycle and often occur well after an initial submission window has closed. These challenges are compounded by operational and technical constraints, including administrative burden, limited staffing, workforce burnout, EMR and billing system errors, third-party administrator delays, and data-feed limitations that can postpone submission readiness for reasons outside of a hospitals control. A strict 45-day cutoff would remove hospitals ability to correct errors and recapture rebates, effectively enabling pharmaceutical manufacturers to avoid paying rebates delayed due to factors unrelated to hospital compliance and contrary to the intent of the 340B program to support safety-net providers in managing rising drug costs and maintaining access to care. Administrative and Staffing Costs Massachusetts 340B hospitals report that the proposed rebate model would significantly increase administrative complexity and staffing demands. Hospitals have designed their hiring, operations, and program administration around an upfront discount model since the 340B program was established in 1992. Transitioning to a rebatebased mechanism would require fundamentally new resources and infrastructure, imposing costs, and operational burdens well beyond what hospitals anticipated when opting to participate in the program. These impacts would be compounded by already rising hospital administrative expenses driven by increasing billing and regulatory requirements. While hospitals recognize that participation in the 340B program entails reasonable administrative costs, the rebate model represents a material departure from established operations. Implementing a rebatebased approach would require entirely new operational workflows for medication ordering, billing, documentation, tracking, appeals, and payment reconciliation processes that are currently streamlined under the upfront discount model. As a result, more than twothirds of Massachusetts 340B hospitals report they would need to hire additional staff to manage these new requirements. Surveyed hospitals estimate the need for approximately 13 new fulltime employees across systems, at an annual cost of $1.3 million, solely to support rebate administration. Other hospitals indicated that while additional staffing would be necessary, financial constraints would prevent them from hiring. Additionally, 38% of hospitals anticipate shifting rebaterelated administrative duties to frontline and clinical staff, reducing the time available for patient care activities. All respondents indicated that the pilot program would place additional strain on existing staff and require new training to ensure compliance. These staffing Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 6 and operational demands would occur amid ongoing workforce shortages and escalating labor costs, further diverting limited hospital resources away from direct patient care. Infrastructure and Implementation Costs The systems and infrastructure associated with implementation of a 340B rebate model pilot program are an additional cost to 340B hospitals. Hospitals would need to consider purchasing additional IT solutions that integrate with their current pharmacy purchasing and billing/claims software. Under HRSAs original rebate program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform. Hospitals identified serious issues with this platform in the brief time they had to prepare before the anticipated rebate launch. The volume of pharmacy claims that some of our larger members process would require additional IT solutions to ensure compliance with all 340B program requirements. Seventy-seven percent of Massachusetts 340B hospitals anticipate the need to acquire additional software or IT products to assist with the rebate process. MHA has been approached by vendors offering solutions to help with electronic rebate claims capture, such as third-party clearing house solutions. These IT solutions claim that they would prevent duplicate discounts and help with claim dispute resolution. The additional software solutions vary by the size of the 340B entity and their estimated number of claims but have significant cost implications. In addition to the one-time software purchase, there are annual costs for the software, as well as the cost of the implementation. Implementation will require multiple hospital employees to work with an outside vendor to ensure that a new IT system integrates with existing software and operational processes. This is an additional cost to hospitals that must dedicate their own employees and resources (ex. project management, IT, pharmacists) during the time it takes to build, test, launch and train the pharmacy and billing teams to use a new system. These projects often take many months to a year to successfully launch. In addition to all these anticipated costs, all but one respondent anticipated expending additional resources for legal expenses related to the rebate process. These anticipated expenses will be extremely difficult for Massachusetts hospitals to plan for. Many hospitals have already finalized their budgets for FY2027 and cannot account for the millions of dollars it would take to successfully implement a rebate pilot in the near future. Any additional administrative, staffing, infrastructure, and IT costs would further erode the razor-thin margins Massachusetts hospitals are already struggling to operate within. Introducing a rebate model at this time will put hospitals in a precarious situation where they are forced to make decisions that could impact service delivery and disrupt patient care. Rebate Denials Based on currently available information, member hospitals estimate that, in aggregate, approximately 15% of eligible rebates will not be received, with some hospitals anticipating rates closer to 30%. This is expected to result in an annual loss of approximately $47.2 million in revenue a significant loss given Massachusetts size. The fiscal impact will be greater if additional drugs are included in a potential future pilot, including those that are part of the 2027 Medicare Drug Price Negotiation Program Agreements. Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 7 While hospitals would make every effort to identify and recover unpaid rebates, doing so would require substantial staff time and administrative capacity, diverting limited resources away from patient care. Hospitals would also be required to build and maintain new data interfaces, manage denial activity, reconcile rebate payments, and perform ongoing monitoring imposing significant and ongoing operational burdens that your administration is striving to address. To prevent inappropriate denials and undue burden on covered entities, any 340B Rebate Model Pilot Program must include clear, enforceable guardrails; a standardized and transparent denial process; defined timelines for manufacturer review and payment; a formal, independent appeals process; and explicit protections to ensure covered entities are made whole when denials are overturned, including payment of the full rebate amount without penalty or delay. If the programs intent is to prevent duplicate rebate payments, denial criteria must be narrowly and explicitly limited to duplication alone and applied uniformly across all manufacturers. Most importantly, allowing manufacturers to establish denial standards and serve as the final arbiters of rebate eligibility creates a direct conflict of interest. To ensure fairness and accountability, HRSA should require the use of an independent third-party administrator to review denials and adjudicate appeals. HRSA should also mandate public reporting of denial and appeal outcomes by manufacturer and conduct regular audits to ensure compliance. Standardized template forms, uniform documentation requirements, and strict response timeframes would be essential to preventing unnecessary delays and preserving the value of the 340B program for safety-net providers and their patients. Data Collection by Covered Entities and Efforts to Avoid Duplicate Discounts HRSA already maintains a robust and multifaceted oversight framework to ensure the integrity and transparency of the 340B Drug Pricing Program. Through its Office of Pharmacy Affairs (OPA), HRSA conducts risk-based and targeted audits of both covered entities and pharmaceutical manufacturers to assess compliance with statutory requirements, including patient eligibility, prevention of diversion, and avoidance of duplicate discounts. HRSA also requires covered entities to undergo annual recertification, during which entities must attest to their continued eligibility, compliance with program requirements, and the accuracy of information reported in the 340B database. Covered entities are further required to maintain detailed policies and procedures, auditable transaction records, contract pharmacy documentation, and supporting eligibility and utilization data, all of which are routinely reviewed during HRSA audits. In addition, HRSAs self-disclosure process enables covered entities to proactively identify, report, and correct compliance issues, reinforcing accountability while promoting continuous improvement. Collectively, these existing audit, reporting, and recertification mechanisms provide meaningful transparency and program safeguards, demonstrating that HRSA already possesses effective tools to ensure compliance without introducing new administrative structures that could destabilize safety net providers.2 The Massachusetts Medicaid agency (MassHealth) has a rigorous process to prevent duplicate discounts for drugs purchased under the 340B program.3 Massachusetts pharmacies are required to include identifiers when submitting any 340B pharmacy claim billed with 340B acquisition 2 HRSA Program Integrity, https://www.hrsa.gov/opa/program-integrity 3 https://www.mass.gov/doc/pharmacy-facts-238-january-16-2025-0/download Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 8 cost. For 340B claims submitted by pharmacies on behalf of 340B entities (contract or indirect billing), the authorization number (NPI of the 340B entity) is required. MassHealth requires pharmacies to include accurate 340B claim identifiers for claims determined to be 340B eligible at time of adjudication and for claims that are presumed to be (and to be later verified) as 340B eligible. If a claim is submitted with 340B indicators and it is later determined that the claim is not 340B eligible, MassHealth requires the pharmacy to void and resubmit the claim without 340B indicators. If a claim is submitted without 340B indicators and it is later determined that the claim is 340B eligible, MassHealth requires the pharmacy to void and resubmit the claim with accurate 340B indicators. Failure to comply with the rules can result in audit penalties as well as revoking registration as a Medicaid pharmacy. Program Duration, Reporting, and Independent Evaluation Requirements To ensure transparency, accountability, and fair administration of any 340B Rebate Model Pilot Program, HRSA should establish clear, uniform manufacturer reporting requirements, and define the pilot as a time-limited initiative with a definitive end date of one year. A rebate-based model introduces significant risks of inappropriate denials, payment delays, and financial disruption for covered entities; therefore, robust data submission, independent evaluation, and public reporting must be core elements not optional features of the pilot. To support effective government oversight, manufacturers should be required to submit standardized, auditable, claim-level data to HRSA on a monthly basis, with quarterly certification of accuracy. Required data elements should include: (1) all rebate claims received from covered entities; (2) the status of each claim approved, pending, denied, or under appeal with all relevant dates for submission, determination, appeal, and payment; (3) product-level information, including quantities dispensed and applicable 340B ceiling prices; (4) the specific duplicate discount validation methodology applied; and (5) complete documentation supporting any denial, including the precise rationale and point of sale or claims data relied upon. Manufacturers should also submit monthly aggregated financial reporting, including total rebate dollars paid, denied, pending, and under appeal, as well as reconciliation files for all adjudicated claims. To promote transparency and facilitate meaningful public oversight, HRSA should publish manufacturer-specific and program-level data at least quarterly. Public reporting should include denial rates (overall and by denial category), appeal volumes and outcomes, average adjudication and payment timelines, rebate dollars paid versus denied, and the results of HRSA audits. This transparency is essential to identifying systemic patterns of inappropriate denials, excessive delays, or manufacturer noncompliance that could undermine the program and shift disproportionate administrative and financial burden onto covered entities. In addition, HRSA should require a formal, independent third-party evaluation of the pilot throughout its duration and upon its conclusion. This evaluation should assess the full fiscal and operational impact of the rebate model on 340B covered entities and pharmaceutical manufacturers, including but not limited to: the volume and value of denied and overturned claims; appeal timelines and outcomes; administrative costs incurred by hospitals; the amount of rebate dollars retained by manufacturers for extended periods and any associated interest or Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 9 financial benefit realized; and the total dollar value of rebates delayed or permanently lost by hospitals. Findings from this evaluation should be released and used to inform any future policy decisions. Finally, manufacturer data should be collected monthly for the entire duration of the pilot and retained for at least five years following its conclusion to support retrospective audits, cumulative impact analyses, and any future regulatory or legislative consideration. HRSA should make clear that the pilot will not be expanded or extended absent affirmative evidence (validated through independent assessment) and that the rebate model improves program integrity without harming covered entities financial stability or access to patient care. Any expansion beyond the pilot, particularly to medical benefit drugs, would significantly undermine the resources hospitals rely upon to sustain the healthcare safety net. The administrative burden, delayed reimbursement, and added costs inherent to a rebate-based model threaten already strained hospital budgets and directly compromise hospitals ability to provide essential services. Ultimately, the limited and theoretical benefits of this pilot are far outweighed by the demonstrated risks and real-world burdens imposed on hospitals, health systems, and other 340B covered entities. Impacts on Massachusetts Hospitals and Patients A 340B rebate model would have far reaching negative financial effects across the healthcare system that directly contradict the purpose for which Congress established the bipartisan 340B program in 1992 to protect access to care and medications in the nations most underserved communities. The 340B Drug Pricing Program is a foundational component of Massachusetts healthcare safety net, enabling hospitals and community health centers to manage rising prescription drug costs and reinvest resulting savings directly into patient care. Replacing upfront benefits with a rebate-based model would disrupt this structure, create unnecessary administrative complexity and inefficiency, and reduce patient access to both care and medications. The proposed rebate model would significantly harm Massachusetts hospitals and the patients and communities they serve, weakening public health infrastructure across the commonwealth. Moving forward with a rebate model similar to the proposed pilot would introduce substantial financial pressure that threatens service sustainability. The loss or delay of 340B benefits, combined with uncertain rebate recovery, would create major budget gaps, forcing hospitals to absorb costs through reductions across programs and services. Pharmacy services would experience the most immediate and severe impact, placing discharge prescription programs, pharmacist-led clinical services, specialty pharmacy support, infusion program administration, home delivery, and contract pharmacy arrangements at elevated risk. Hospitals currently rely on 340B benefits to support community-based initiatives and to subsidize essential services that are inadequately reimbursed by both public and private payers. A rebate model would require hospitals to front millions of dollars in drug acquisition costs, compelling them to scale back to other critical service areas. As a result, hospitals would face untenable choices, including the reduction or elimination of underfunded but vital patient Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581 10 services and safety net programs currently supported by 340B benefits. These include community vaccination and health screening initiatives, maternal health services, behavioral health, and substance use disorder treatment, dental care, transportation programs, and other supports that MHA members provide to address community needs. The cumulative effect would be reduced access to care, particularly for low income and rural patients. With hospital operating margins already negative or razor thin, hospitals would be forced to offset upfront drug costs and rebate losses through staffing reductions, program cuts, and delayed or forego investments in facilities, technology, and workforce development. That is a reality that no one wants to see play out. MHA and its members appreciate the opportunity to provide feedback on the proposed 340B rebate model through this Request for Information. We strongly urge HRSA to develop a balanced approach that preserves patient access to care and remains fully aligned with the intent of the 340B statute. MHA encourages a collaborative process to improve affordability and transparency while safeguarding the healthcare safety net. We welcome continued engagement with HRSA and look forward to ongoing collaboration to strengthen and preserve the 340B program. For questions, please contact MHAs Vice President of Federal Affairs and Strategic Initiatives, Amy Bianco. Sincerely, Amy Bianco Vice President of Federal Affairs and Strategic Initiatives Docusign Envelope ID: 2B7FD315-E6E7-8A12-82F7-5F57C4914581
HRSA-2026-0001-2008Bristol Hospital, Inc.2026-04-20T04:00Z36,263 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Executive Summary to Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 Public Comments Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Overview of Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 Location: 41 Brewster Rd, Bristol, CT 06010 Type: Independent Disproportionate Share Hospital (DSH) serving a predominantly Medicare and Medicaid population Mission: Caring Today For Your Tomorrow. Safetynet provider delivering highquality, comprehensive care to vulnerable patients Financial Context: Operates on razorthin margins; relies on 340B upfront discounts to offset chronic underpayment and sustain essential community programs to address community health equity Program Impact: In FY25, Bristol Hospitals 340B participation generated over $7.8 million in savings, reinvested directly into patient care, safetynet services, and infrastructure Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010, Position The proposed rebate model replaces the proven upfront discount mechanism with delayed reimbursement, creating cashflow instability and administrative burdens that hospitals cannot absorb. The infrastructure to support a rebate system does not exist. All stakeholders including manufacturers, Third Party Administrators, and clearinghouses lack capacity to administer rebates efficiently or transparently. Rebate processing would require new data systems, staff, and compliance oversight, diverting scarce resources from patient care. Delayed payments and potential denials mirror the worst practices of commercial payors, threatening solvency for hospitals like Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has structured its operations, staffing, and financial planning around the current upfront discount model that has functioned successfully for over 30 years and has allowed for Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 to establish great community benefit programs. HRSAs premise that it must balance manufacturer and hospital interests is incorrect. The statute requires prioritizing covered entities ability to stretch scarce federal resources. The rebate model would reduce access to care, destabilize finances, and jeopardize programs serving lowincome and elderly patients. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. In the current state, Bristol Hospital, Inc., 41 Brewster Rd, Bristol CT, 06010 is able to deliver high-quality care much in part due to the current upfront discount model that contributes to partial offsetting of the severe underpayment for more than 73% of our patient population being Medicare, Medicare Advantage, and Medicaid. Preserving the upfront discount mechanism, which Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has relied on for years, is the best way to fulfill the purpose of the 340B program. In fact, as further outlined below, the proposed 340B Rebate Model Pilot Program, if implemented, will detrimentally create significant and harmful access to care issues for the communities served by Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bristol Hospital, Inc. 41 Brewster Rd, Bristol, CT 06010 can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Bristol Hospital, Inc. 41 Brewster Rd, Bristol, CT 06010 to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now in an already challenging labor market. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 estimates that it will cost the organization anywhere between $150,000 to over $500,000 to contract with a third-party administrator to manage the rebate program for a hospital of our size. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will require a third-party administrator to manage the program given the significant administrative burden the program will place on already scarce resources. These are not hypothetical figures, they reflect the actual pricing structures presented to Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010. Even worse, Sentry, our current third-party administrator, has removed all pricing for the original rebate model, signaling that future costs will likely increase as they redesign their platform. These administrative expenses would immediately erode the opportunity for Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 to reinvest in community health and wellbeing. Over the last 24 months alone, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 processed $18.3 Million in 340B drug spend, volume that would now require complex claim-level submissions, reconciliation, and dispute management under a rebate model. HRSAs estimate of five hours per week on these administrative burdens is grossly undercalculated. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 operational data estimates that just the inclusion of 10 drugs into the rebate model would require an additional 10-15 hours per week, and HRSA is now indicating that up to 25 additional drugs may be added to a rebate program, further multiplying this burden on an already stretched thin organization. The administrative costs and burdens of a rebate model is not a marginal inconvenience, it is a structural threat to the viability of the 340B program and to hospitals serving underserved communities across the country. Staffing Impacts Under a Potential 340B Rebate Program. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 does not currently have the staff needed to comply with a Rebate Program. In its current format, managing compliance, procurement, auditing, and program integrity requires 2.0-3.5 full-time equivalent (FTE) staffing. A rebate model would require additional staff or would require us to divert clinical staff away from patient care to perform burdensome administrative tasks that do not deliver any benefit to the patient. This is a significant concern, considering the labor market for pharmacy and compliance professionals is already strained, and hiring additional FTEs would require months of lead time and significant investments beyond Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 means. The staffing requirements necessary to comply with a rebate model program is incompatible with the operational reality of a Disproportionate Share Hospital managing millions of dollars in 340B drug volume and delivering high-quality, accessible healthcare services to government-insured patients who have no other means to access basic, necessary medical care. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. For example, Sentry, the third-party administrator for Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 does not have a direct feed into the electronic health record (EHR), meaning that a rebate model program would require additional resources that Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 does not currently have to manually extract, validate, and reconcile claim data across multiple internal systems. The staff that will be required to do this are clinically licensed staff capable and authorized to access such protected health information, all while they should be putting their clinical skills to direct patient care explaining medication compliance, efficacy. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 collects 340B data through our program partners, Sentry and Omnicell, but neither system captures the full set of medical claims data that HRSA and manufacturers would require under a rebate model. As mentioned previously, the current manual abstraction data is already burdensome, so adding to the data elements necessary to claim an owed rebate will only become increasingly complex and take away from Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 limited resources. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 is in a very precarious financial state without factoring in the potential negative impacts of a 340B Rebate Model Pilot Program. In the last three operational fiscal years, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has been carrying its Mission with less than fifteen (15) days cash on hand. Our financial team meets daily to identify how to best utilize our limited financial resources to continue delivering necessary care for our community, who would likely go without any medical or emergent care if Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 were to close its doors. Further extending owed receivables by ten days or more will shutter Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 and likely result in the organization needing to close. An internal analysis during the January 2026 transition period that shifted the model to wholesale acquisition cost (WAC) upfront purchasing created a $560,000 cash flow impact, driven by reduced reimbursement and delayed recovery of 340B savings. This experience disproves HRSAs claim that rebates would be paid before wholesaler invoices are due. The reality is Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 was forced to float substantial cash for extended periods, creating significant liquidity strain and increasing financial volatility. Having been in violation of Bond Covenants over at least the last 36 months due to operating with less than 15 days cash on hand, further straining Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 cash flow will undoubtedly result in the organization filing for bankruptcy protection and the severing of critical access to medical and emergency care for the more than 40,000 lives that rely on Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 emergency department, and the more than 6,000 life saving surgeries performed annually. Furthermore, it is extremely bothersome to imagine that under a rebate model program, we face the possibility that drug companies will be able to unreasonably deny rebate claims. Denied claims for owed services is not just a fear, it is a lived nightmare that Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 faces every day. Allowing a pathway to potentially deny owed claims is not only inefficient but it also introduces delayed payments and additional burdensome costs to hospitals. There are many examples of the damage caused to Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 by payors with their claim denial and appeal processes. This example demonstrates how easily payors can delay, deflect, and deny payment, even when the patient is covered, the service is authorized, and the claim is billed correctly. Nine months after the patient was discharged and the claim billed, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 received a denial from the payor indicating it was not responsible for payment. In that time the payor made multiple record requests, reviewed the medical records, and performed a high dollar claim review. The Hospital was forced to repeatedly respond to duplicative requests, navigate conflicting information, and absorb the financial risk while the payor and its vendor, which the payor indicated was responsible for payment, disputed responsibility. 407 days after discharge the payor acknowledged responsibility. However, one month later the payor issued another denial stating the member did not have coverage at the time of service. After the Hospital disputed that, the payor and its vendor acknowledged the vendor was responsible for payment and 535 days after discharge payment of over $195,000.00 was received. For nearly a year and a half, the payor was allowed to deflect payment and faced no consequences for imposing financial strains and threatening the financial viability of the organization. Again, such occurrences are not isolated; they are common. In another case a patient presented to Bristol Hospital, Inc., 41 Brewster Road, Bristol, CT, 06010, emergency room, was admitted and then discharged over the course of 3 days. The payor was notified in accordance with policy and the patient discharged the day after admission. Three days after discharge the authorization for this emergent admission was denied by the payor for lack of medical necessity. The claim was billed which the payor then denied for lacking medical necessity. The denial was appealed by the Hospital, though, as it subsequently learned that the appeal was cancelled by the payor upon receipt and converted to a reconciliation. The difference is a reconciliation addresses administrative and clerical requirements, whereas appeals address more complex issues, including medical necessity, in-depth clinical reviews, and extenuating circumstances. By the time the Hospital learned of the reconsideration, the payor had already exceeded its own time frames to address a reconsideration. On follow-up 3 months after discharge, the Hospital learned the payor cancelled the claim and created a new claim and claim number. That new claim, though, was stuck in a Medical Claim Review backlog and would take an additional 180 days to be addressed. On being pressed, the payor indicated the claim was not truly denied; they needed more time to review it. Four and one-half months later, 136 days after discharge, payment was received. These are the exact scenarios HRSA must understand: when payors are given a denial pathway, they use it aggressively, inconsistently, and without regard for the financial harm they impose on hospitals. Under a rebate model, manufacturers would have the same ability to delay, deny, or dispute rebates, forcing hospitals to float drug costs for months or years while navigating an opaque and adversarial process, or even worse, having no recourse to recoup owed payments while simultaneously incurring costs to enforce the program. If a fully insured, authorized Medicare Advantage claim can be delayed for 17 months, the risk under a 340B rebate model, where manufacturers have a financial incentive to deny, is exponentially higher. The cases described above clearly demonstrate why a denialbased rebate structure is unworkable, unsustainable, and harmful to safetynet hospitals and the patients we serve. Bristol Hospital, Incs., 41 Brewster Rd, Bristol, CT 06010 continued operation is directly tied to the stability and predictability of the current 340B upfront discount model. As a small, independent DSH hospital serving a disproportionately high Medicare and Medicaid population, our margins are already razorthin, and our ability to remain solvent depends on the timely, reliable savings generated through 340B. In FY 2025 alone, the program produced more than $7.80 million in savings for the organization. Those savings were immediately reinvested into patient care, safetynet services, and essential infrastructure. Without these upfront discounts, our financial position would deteriorate rapidly; the combination of chronic underpayment from government payors, rising labor and supply costs, and delayed reimbursement would push the organization into insolvency. This will not only impact patient access to care, but it will ripple into the communitys economic viability. In FY 2025, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 estimated direct economic impact in the community is calculated to be more than a half billion dollars. Put plainly, the 340B program is not supplemental revenue for Bristol Hospital, Inc., 41 Brewster Rd, Bristol CT, 06010, it is the only mechanism preventing bankruptcy and closure, and any disruption to the upfront discount structure would jeopardize the hospitals ability to continue operating as a large economic driver and, most importantly, as the communitys primary source of care. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. As a result of the additional administrative costs, untimely rebate payments, and additional burdens, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will no longer be able to fund community health programs such as our Better Breathers Group, a completely free health literacy support group for patients with chronic pulmonary conditions, or our Lung Cancer Screening Program, which offers free low dose computed tomography screenings for patients who cannot afford the diagnostic test, offer free pharmacy delivery or mail order options for patients who have no transportation. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 established these and other programs to meet the needs of our community. Our Community Health Needs Assessment identified that particulate air matter, a measure of outdoor air quality that is associated with higher rates of respiratory illnesses such as chronic pulmonary disease (COPD) and asthma, is higher in the communities served by Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 as compared to the state of Connecticut. Public health data also indicates that the rate per 1,000 lives, for age-adjusted population eighteen years of age and older who have been diagnosed with COPD, is nearly ten times higher than the state of Connecticut. Clearly, discontinuing the Better Breathers Group will further hurt the community. Another immediate service that will need to be terminated is Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010, a complimentary Pharmacotherapy program offered to patients. The Pharmacotherapy program is a huge community benefit, allowing patients the access to a licensed pharmacist who can promote interoperability between multiple physicians to ensure the patient has the best and most successful medication regiment across multiple prescribing providers. Through use of our free Pharmacotherapy program, one patient was taken off of a medication because of the contraindication with another medication prescribed by a completely different prescriber, leading to the drug having no clinical benefit. While being on the two drugs did not harm the patient, the organizations Pharmacotherapy program addressed large waste from continuing to occur. This not only allowed the pharmacist to work with the prescribing providers for a better more effective alternative, but it allowed the organization to help the patient realize great financial savings and improved health outcomes. If Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 were to need to dissolve its Pharmacotherapy program, there is no other structured opportunity to catch such waste from occurring. In addition, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will need to make very difficult decisions to reduce or cut patient services. Should the 340B Rebate Model Pilot program be implemented, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will likely be forced to cut its Plastic Surgery program, which a majority of our Cancer Care patients rely on during their cancer care journey. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will also need to make determinations on reducing the number of providers employed by the health system, resulting in greater accessibility issues. The current average wait time for a new appointment with a specialist is seven to fourteen days. Reducing the number of providers available by just one provider will result in an increase of at least an additional fourteen days for a new appointment with a specialist. This creates a clear access issue and can lead to concerning health outcomes. In the absence of the already budgeted and calculated upfront discount model, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 will also need to cancel the labor and delivery unit renovation, hospital tower rooftop heating, ventilation, and air conditioning (HVAC) unit, perioperative center rooftop unit, and patient office expansion project. All of these projects are critical to the infrastructure of our patient care areas. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 existing building and infrastructure is beyond its use of life and failure of these units have the potential to cause patient harm and threaten Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 ability to operate as an acute care hospital. Shall a rebate model move forward, the impact to patient care is very real. According to the Connecticut Health Equity Dashboard, 7.9% of Bristol, CT residents have no access to a vehicle, higher than the state average. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has pursued its strategic objectives with these social barriers in mind, creating access to care points in key areas to address transportation barriers. In addition, to access primary and specialty care services, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 offers complimentary drug home delivery and mail services. If HRSAs rebate model goes into effect and causes Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 to become insolvent, that is 7.9% of just the Bristol, CT population that will not only have zero opportunity to get necessary care, but 7.9% of residents who will not be able to get their medication. The rebate model would not simply increase administrative burden; it would directly harm patient access, reduce service availability, and undermine the health of the communities we serve. It is simply a harmful model that will cause irrevocable harm to every single patient who relies on Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has long structured its operations, staffing, financial planning, and community programs around the upfront discount model that has defined the 340B program since its inception. This reliance is deeply practical. The upfront discount is built directly into our annual budget, our capital planning assumptions, and our ability to sustain services for a patient population that is overwhelmingly Medicare and Medicaid. In FY 2025, the inpatient pharmacy savings exceeded $7.80 million, funds that are already committed to patient care, safetynet programs, and essential infrastructure in complete benefit to the community. Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 continues to project its cash flow, meeting mandatory debt obligations such as payroll and critical vendor payments. A sudden shift to a rebate model, with its higher administrative costs, delayed reimbursement, and increased operational burden, would destabilize these carefully planned investments and undermine our financial stability. HRSAs suggestion that hospitals should have anticipated a rebate model disregards the programs 30year history and the agencys own consistent reliance on upfront discounts. Bristol Healths reliance on this structure is not only reasonable; it is fundamental to our ability to remain operational and continue serving our community. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Because those issues emerged even within that short preparation period, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 has significant concerns about relying on Beacon for a future rebate model. The RFI specifically asks hospitals to comment on areas such as Terms and Conditions, shifting data requirements, customer service responsiveness, and the safeguards needed to protect patient information. Our experience made clear that these areas require far stronger guardrails than what was presented during the prior iteration of the program. At a minimum, any platform used to administer a 340B rebate model would require clear and stable contractual terms, consistently applied data requirements, reliable support when issues arise, and strong privacy and security protections for patient information. Yet none of these safeguards were in place during the prior iteration of the program, and HRSA has provided no evidence that these elements could be established or enforced before implementation. Expecting Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 to submit sensitive patientlevel data to a thirdparty platform without these protections is untenable. The absence of these basic guardrails is not a minor administrative gap, it is a fundamental flaw that makes a rebate model unworkable and unsafe. Proceeding without these protections would expose covered entities to significant operational risk, legal uncertainty, serious liability exposure, and potential breaches of patient information. For these reasons, the rebate model should not be advanced in any form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. In addition, the record before HRSA makes clear that a rebate model is not merely imperfect but it is truly unworkable. The administrative burden, cashflow disruption, and operational risk it imposes are so substantial that no reasonable balancing of costs and benefits could justify advancing it. HRSA has identified no deficiency in the existing upfront discount model that would warrant such a destabilizing departure, and absent such a justification, the agency cannot rationally proceed. For Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010, and for many DSH hospitals across the country, the rebate model is not a policy option. It is an existential threat. The model would convert the 340B Program from a functioning, predictable mechanism into one that withholds critical resources, delays reimbursement, and exposes hospitals to denial pathways that mirror the most harmful practices of commercial payors. Advancing such a structure would predictably undermine the very safetynet institutions the statute is designed to support. HRSA must also recognize that the operational infrastructure required to support a rebate model simply does not exist. The agency has not demonstrated that manufacturers, TPAs, or thirdparty platforms are capable of administering such a system without imposing massive new burdens on covered entities. Proceeding without this assurance would be inconsistent with HRSAs statutory obligation to protect covered entities ability to stretch scarce federal resources. If HRSA were to move forward despite these clear and documented risks, it would be doing so in full knowledge that the model will reduce access to care, destabilize hospital finances, and jeopardize essential community programs. No pilot program should be allowed to proceed when the foreseeable harms so dramatically outweigh any speculative benefits. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bristol Hospital, Inc., 41 Brewster Rd, Bristol, CT 06010 and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, and other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kurt A. Barwis, FACHE President & Chief Executive Officer Bristol Hospital, Inc. 41 Brewster Rd, Bristol, CT 06010 cc: Richard Blumenthal, United States Senate Christopher S. Murphy, United States Senate John Larson, United States House of Representatives Saud Anwar, Connecticut State Senate Jorge Cabrera, Connecticut State Senate Mary Fortier, Connecticut State House of Representatives Joe Hoxha, Connecticut State House of Representatives Henri Martin, Connecticut State Senate Cristin McCarthy Vahey, Connecticut House of Representatives Cara Christine Pavalock DAmato, Connecticut State House of Representatives Heather Somers, Connecticut State Senate Kerry S. Wood, Connecticut State House of Representatives
HRSA-2026-0001-2009WakeMed2026-04-20T04:00Z22,722 chars
See attached file(s) WakeMed Health & Hospitals 3000 New Bern Avenue Raleigh, NC 27610 April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: WakeMed, which participates in 340B as a covered entity, submits this response to Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and an additional 15 drugs beginning in 2027. As a 340B-participating hospital, WakeMed is a core component of the healthcare safety net in the Raleigh, North Carolina community. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. At a high level, WakeMeds 340B Program participation enables us to commit an additional $40 million dollars per year to Raleigh community safety net population we serve. WakeMed also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self- serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, WakeMed wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Covered Entities like WakeMed have reasonably relied on receiving 340B pricing through upfront discounts in creating compliant 340B programs to meet the needs of our communities. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF Hospitals 340B programs are complex and involve detailed inventory management, data sharing, and robust auditing. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model could cause only a minimal impact on 340B covered entities is incorrect. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so now that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care. This directly contradicts the program's statutory intent to enable safety-net providers to stretch scarce federal resources as far as possible in order to benefit eligible patients. We appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. A Rebate Model Is Not Necessary for MDPNP Deduplication In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.1 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,2 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto WakeMed and other Covered Entities. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the MDPNP. In our experience, the existing MDPNP process is functioning well overall. The percentage of claims with errors is minor compared to total MDPNP claims, and we have found that most claims are being paid correctly. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. A Rebate Model Serves Commercial Interests, Not Patients The 340B program was established to reduce operating costs for eligible providers to enable them to stretch limited resources to maintain and improve care for patients. Hospitals that qualify as 340B Covered Entities serve as a vital health care resource for low-income and underserved 1 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 2 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 3 42 U.S.C. 256b(d)(1)(B)(vi). Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF patients, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Unfortunately, the proposed rebate model helps pharmaceutical companies and leaves fewer resources available for the patients the program is supposed to benefit. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected WakeMed. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of access for our patients to get their medications. Manufacturers have also demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price. Manufacturers employees and contractors such as Kalderos have sent us overreaching demands for data. Pharmaceutical companies want to use Covered Entities claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.4 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. PBM commercial rebates have nothing to do with 340B program integrity and safety net hospitals should not have to finance pharmaceutical companies efforts in this space. The measures taken by pharmaceutical companies to collect claims data are troubling. The Second Sight Beacon platform terms and conditions are weighted heavily in favor of the manufacturers, are not sufficiently protective of the privacy of patient information, and are not subject to negotiation. The terms and conditions grant Second Sight a universal and perpetual license to all data submitted by Covered Entities and do not protect patients data from inappropriate use by pharmaceutical manufacturers. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. Manufacturers have long pushed back against designation of HIPAA Covered Entity, meaning that any patient data released to the pharmaceutical manufacturers falls outside the protections of HIPAA. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.5 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or 4 See https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate- Investment-Activity_2024.pdf. 5 See 45 C.F.R. 164.501. Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF monetize sensitive patient information. WakeMeds attempts to negotiate confidentiality and privacy protections for our patient data was rejected out of hand by Second Sight. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use Covered Entities rebate claims data for any commercial purposes, and pharmaceutical manufacturers should be restricted to using our data only for MDPNP deduplication purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025 that was blocked by the District Court. The impact of this revised rebate program would be even more catastrophic than the original proposal. The revised proposal requires Covered Entities to purchase many more drugs at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data and wait to receive a rebate representing the difference between the higher price and the 340B price. Under this process Covered Entities would essentially be forced to provide interest-free loans to pharmaceutical companies during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. Over the course of one year, we estimate our hospital would be required to front approximately $10 million dollars to drug manufacturers. This impact disrupts decades of business practices built around 340B upfront discounts. At a time when a record number of hospitals are closing across America while drug makers see billions in revenue, the proposed rebate program would simply be one more blow for critical safety-net providers and their patients. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the 340B program is built on upfront discounts, the full scope of rebate-related costs is impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot. We received confusing and inconsistent information from the manufacturers rebate pilot vendor, which cost our pharmacy, operations, legal, and IT employees valuable time and money trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Implementation of a rebate-based model would require WakeMed to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF resolution. The development of a new model will by definition pull staffers and dollars away from patient care. WakeMed estimates we will need two additional full-time employees with hospital pharmacy experience to manage the 340B Rebate Program, in order to submit data, track rebates, resolve denials, and reconcile financial ledgers. We estimate the cost of increased staff to be at least $250,000 annually. If more medications are added to the program, our staff needs will increase accordingly. Additionally, some of our child sites do not use a Third-Party Administrator (TPA) so these child sites will be more challenging to submit medical claims data for 340B rebates. This will be a manual process and may require another 0.5 FTE if medical claims data submission is required. To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims- level data. WakeMed estimates that the potential increased cost for new technology infrastructure and information systems management to administer the 340B Rebate Model would be at least $150,000 annually. Please note that the various types of data that would be required under the proposed model are found across multiple IT systems and are not easily accessible/compiled. As a community hospital that serves all patients regardless of the ability to pay for their medical care, the upfront WAC cost (even if rebates are received later) puts our hospital in a difficult financial situation. The increased cost of purchasing the 340B Rebate Model medications at WAC with no guarantee of reimbursement is very significant, at over $10 million dollars per year in upfront cost. Rebate costs will reduce resources available for patient care, resulting in potential decreases in charity care due to the costs of staffing and increased drug costs. WakeMed will require additional legal advice to ensure our hospital is receiving the correct pricing for 340B medications, as laid out in the 340B Statute, and to engage in any advocacy or legal matters, as needed. This cost cannot be estimated because it depends on the amount of legal support that is required, including the amount of rebates denied by pharmaceutical companies. A rebate model would also significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, WakeMed purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. WakeMed also has agreements with our wholesalers and other vendors to receive prompt pay discounts and retroactive pricing tiers/rebates for paying within 7-15 days of services. Therefore, the potential delays in reimbursement from the 340B Rebate Model would have significant impacts on WakeMeds Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF overall financial health and agreements with drug vendors. WakeMed would also be left responsible to float the cost of these WAC purchases (over $10 million per year) until reimbursement is made, while the manufacturers receive a higher payment immediately. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. WakeMed could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. Any Rebate Model Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. Any HRSA rebate program should explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers rebate vendor. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit that data, as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that Covered Entities have sufficient information to address the denial. A Rebate Model Should Include Audits and Compliance Requirements for Manufacturers At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.6 With manufacturers noncompliance rate so high, WakeMed is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. Alternatives to Rebates Should Be Considered There are significantly less burdensome alternatives to rebates. For example, one option that HRSA could consider is implementation of a claims submission portal, similar to what is currently being used for MDPNP or the future optional CMS-repository to de-duplicate for IRA rebates. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 6 See https://www.hrsa.gov/opa/program-integrity. Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting. These models allow for standardized data submissionsuch as 340B modifiers and other claim details without shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,7 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. WakeMed encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. Conclusion The proposed rebate program will have an enormous impact on WakeMed and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the concerns noted above. We hope that HRSA will seriously consider and meaningfully address the information presented in this letter and by other Covered Entities and reach a solution that protects the vulnerable patients the 340B Program is designed to serve. Without due care, our healthcare safety netand the lives who rely on itare at risk. Thank you for considering our comments. Sincerely, Donald R. Gintzig President & CEO WakeMed Health and Hospitals 7 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). Docusign Envelope ID: A3DB526A-D002-4D5F-A63F-999459F8AFAF
HRSA-2026-0001-2010NOVUS Health2026-04-20T04:00Z11,421 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: NOVUS Health Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: NOVUS Health appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. Continued assistance for treatment for HIV and STIs is a significant burden, particularly for uninsured and underinsured patients. Lab costs are not covered and 340B provides funding to assist with these costs. As a non-profit, the current structure of a rebate model would cause a significant issue in the amount of medication NOVUS Health could provide in any given month, thus limiting the number of people we could serve and affecting access to medication in a timely manner. The continued administrative burden of submitting claims, not from the pharmacy but the entity itself, requires additional staffing and again pulls funding, which impacts clinical care and treatment. NOVUS Health provides multiple health services and is a primary sexual health clinic with a specialty in HIV care. NOVUS maintains a full patient clinic of nearly 2,000 patients and has a walk-in STI clinic that sees an additional 100 patients per month. NOVUS Health is a 340B STI entity and a 340B Ryan White HIV site. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics 2 often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. This model would require a small non-profit entity to pay full price for medication on the front end. As such, the entity could not sustain assistance for the number of patients that currently seek care. This would include a reduction in medication access, including having to limit the number of patients served within a given month or even a week and even having to delay treatment in some instances. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model The added time for reimbursement and the uncertainty of that reimbursement (timing) would put further burdens on all clinical services, as funding (cash flow) would not be available to 3 Pilot would affect your cash flow, including any financial risks to your organization. assist individuals with lab costs or vaccines. The process would further burden funding and would require additional staffing just to process claims. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Current payment for medication is immediate to 30 days. Payments are dependent on revenue coming in at the time the payments are due. State the average number of calendar days within which your organization typically remits payment under these contracts. 30 days or less Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Again, the increase in upfront medication cost will require bigger payments and outpace our revenue intake for the month. Any increase in days to payment will increase the likelihood we could not continue to provide clinical care or would, at minimum, have to limit that care. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and management costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. With a minimum of 38 scripts per month to start under the Rebate Model, the burden would require at least 6 hours minimum time per script or 228 hours additional per month just to manage, report, and follow up on these scripts. This is equal to nearly 1.5 FTE and requires additional documentation and accounting services of no less than 40 hours a month in addition to the above-mentioned time. Describe the methodology and assumptions used for the estimates in the preceding question. Processing Rebates requires the entity to report to the multiple systems now required by manufacturers, extract the data from our EMR, and then submit additional data in accordance with protocol. There would also be follow-up time weekly until a rebate is issued along with calculation for requests that are denied or need further information. In addition, financial reporting and documentation would be required based on billing source and insurance. 4 Comment on the impact of these incremental costs under your current operations. The most significant cost would be the upfront cost to purchase medication at full price. This cost would immediately impact all medication purchases, as current COGS run at 55% to 60% for 340B cost. Full cost would most likely be 80% to 90% and would eliminate in some cases our ability to purchase medications. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. 10 to 20% of fiscal time. 20% of Reporting of health information management. 100% of additional person just to manage the overall rebate format. If yes to the above, identify the anticipated number of additional FTEs. 1.5 to start and would increase based on growth in volume. Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. Manage the rebate process from beginning to end. This would require more than one person. From acquisition, submission, follow-up, denials, documentation of claims and final processing. Fiscal would require managing insurance and documenting payment verification depending on payor source. IT would be managing additional data request, reports, and processing. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Dale R. Wrigley, CEP 314-779-8466. Sincerely, Dale R. Wrigley CEO NOVUS Health
HRSA-2026-0001-2011HopeHealth2026-04-20T04:00Z222,634 chars
See attached file(s) Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HopeHealth, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: HopeHealth anticipates an average loss of $1 million to $3 million from entity-owned pharmacy operations and more than 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For HopeHealth in particular, this means it will impact: Over 600,000 340B dispenses/administrations serving over 59,000 patients annually Current admin costs of 340B program Ability to continue current scale program that saved patients over $5 million in 2025 [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Ability to continue current services for low-income and uninsured patients including Behavioral Health, Substance Use Disorder Treatment, Dental, Senior Health, Infectious Diseases, Pharmacy, Chiropractic Care, Womens Health, Lab, Radiology, Chronic Disease Management, Telehealth, Endocrinology, Rheumatology, Pediatric Care, and Primary Care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national- releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: HopeHealth provided $5,600,995 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Staffing Impact: HopeHealth anticipates needing 2 additional FTEs at a minimum to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, HopeHealth anticipates an increase of $500,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. After serving more than 59,000 unique patients in 2025, HopeHealth anticipates annual costs exceeding $4 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Minimally, 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HopeHealth urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 7 Internal NACHC assessment (99 responses). 8 Ibid. [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Total Cost: For our CHC, which serves 59,422 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at more than $4 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend countless hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 89 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 89 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 5 counties across South Carolina, including Florence, Orangeburg, Clarendon, Williamsburg, and Aiken, with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For patients that meet the guidelines, HopeHealth offers discounts on medications based on annual approved sliding-scale level, ranging between 75% to 95% discount. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $7 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $750,000 to purchase these same drugs at the 340B ceiling price. This represents an 800% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HopeHealth anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Dental, Behavioral Health, Substance Use Disorder Treatment, medication therapy management (MTM) program for complex diabetic patients, and others. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we may lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,417 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org purpose of the 340B program. HopeHealth asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HopeHealth estimates its 2027 Annual Rebate Opportunity Cost to be approximately $3 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HopeHealth estimates that purchasing the 10 selected 2026 MFP drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $550,000. We anticipate the additional 2027 and 2028 MFP drugs will increase our upfront annual drug spend by $20 million for 2027 and $40 million for 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization may be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone create an undue and unjust financial burden. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on HopeHealth, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays HopeHealth urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $1 million for the 2026 MFP drug list. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the- 340b-rebate-model-pilot-program [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12- 96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024- 08262.pdf [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act- section-340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 23 Internal NACHC survey data [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B- purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of- purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount 28 42 U.S.C. 256b(a)(1) 29 Id. [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, when the pharmacy carves-in Medicaid FFS, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the 36 C.F.R. 447.518(a). [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC- based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.39 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.40 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028- final-guidance.pdf. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 40 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B- rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter- IV/subchapter-C/part-438/subpart-A/section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug 44 32 C.F.R. 199.21(q)(2)(iii)(E) 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org alternatives.48 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.50 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org obligations cannot spring from silence.55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.58 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. 55 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 56 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 58 42 U.S.C. 256b(a)(5)(B) [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.60 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 60 H.R. REP. 102-384, 16 [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model61 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 61 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) [Type here] Florence Lake City Timmonsville Manning Kingstree Greeleyville Orangeburg Aiken hope-health.org 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HopeHealth strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HopeHealth believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HopeHealth appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact HopeHealth VP of Strategic Marketing and External Affairs at sames@hope-health.org. Sincerely, Carl M. Humphries, CEO HopeHealth [Type here] April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HopeHealth, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: HopeHealth anticipates an average loss of $1 million to $3 million from entity-owned pharmacy operations and more than 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For HopeHealth in particular, this means it will impact: Over 600,000 340B dispenses/administrations serving over 59,000 patients annually Current admin costs of 340B program Ability to continue current scale program that saved patients over $5 million in 2025 Ability to continue current services for low-income and uninsured patients including Behavioral Health, Substance Use Disorder Treatment, Dental, Senior Health, Infectious Diseases, Pharmacy, Chiropractic Care, Womens Health, Lab, Radiology, Chronic Disease Management, Telehealth, Endocrinology, Rheumatology, Pediatric Care, and Primary Care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: HopeHealth provided $5,600,995 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: HopeHealth anticipates needing 2 additional FTEs at a minimum to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, HopeHealth anticipates an increase of $500,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. After serving more than 59,000 unique patients in 2025, HopeHealth anticipates annual costs exceeding $4 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Minimally, 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HopeHealth urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 59,422 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at more than $4 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend countless hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 89 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 89 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 5 counties across South Carolina, including Florence, Orangeburg, Clarendon, Williamsburg, and Aiken, with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For patients that meet the guidelines, HopeHealth offers discounts on medications based on annual approved sliding-scale level, ranging between 75% to 95% discount. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $7 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $750,000 to purchase these same drugs at the 340B ceiling price. This represents an 800% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HopeHealth anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Dental, Behavioral Health, Substance Use Disorder Treatment, medication therapy management (MTM) program for complex diabetic patients, and others. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we may lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,417 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HopeHealth asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HopeHealth estimates its 2027 Annual Rebate Opportunity Cost to be approximately $3 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HopeHealth estimates that purchasing the 10 selected 2026 MFP drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $550,000. We anticipate the additional 2027 and 2028 MFP drugs will increase our upfront annual drug spend by $20 million for 2027 and $40 million for 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization may be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone create an undue and unjust financial burden. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on HopeHealth, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. Financial Impact of Rebate Denials and Delays HopeHealth urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $1 million for the 2026 MFP drug list. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities. Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts. Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. The 340B Rebate Models Incompatibility with Deduplication Efforts Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders, and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule. This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting. If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug. The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary). That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug. Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification. HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan. However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language. Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, when the pharmacy carves-in Medicaid FFS, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs. Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository. Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers. The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase. The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers. Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs. It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing. While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations. The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients. The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data. This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations. Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation. Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence. By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws. The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HopeHealth strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HopeHealth believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HopeHealth appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact HopeHealth VP of Strategic Marketing and External Affairs at sames@hope-health.org. Sincerely, Carl M. Humphries, CEO HopeHealth
HRSA-2026-0001-2012Adventist Health and Rideout2026-04-20T04:00Z5,438 chars
See attached file(s) Adventist Health and Rideout 726 4"' Street Marysville, CA 95901 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 _, Adventist Health RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health and Rideout, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSA's interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Odventist Health !and Rideout has strived to provide HRSA with detailed responses to the RFl's 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs ,.., Adventist Health ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health and Rideout has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health and Rideout would be $42,616.92 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health and Rideout does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health and Rideout is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PB Ms) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities' rebate claims data for commercial purposes unrelated to 340B. '.J Adventist Health provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Greg Jackson, Chief Finance Officer, if you have any questions or would like additional information.
HRSA-2026-0001-2013Memorial Health System2026-04-20T04:00Z80,228 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Health System, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Memorial Health System that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Memorial Health System has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Memorial Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and 2 therefore less money that Memorial Health System can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Memorial Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Memorial Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Memorial Health System estimates that a 340B Model Rebate Pilot Program would impose substantial new one-time and ongoing administrative and operational burdens on our organization, particularly if up to 25 drugs are included. A shift from an upfront discount to a retrospective rebate model would effectively require us to build and maintain a new claims verification, tracking, reconciliation, and dispute-resolution function on top of our existing 340B compliance structure, all requiring additional labor hours in areas that are already stretched thin. Our estimated one-time startup activities would include redesigning internal workflows; revising policies and procedures; developing tracking processes; coordinating with split- billing and third-party administrators; determining how to identify, segregate, submit, monitor, and reconcile eligible claims for as many as 25 drugs; training finance, pharmacy, compliance, and revenue cycle staff; and reviewing legal and compliance considerations related to data sharing and reporting Our estimated ongoing administrative requirements are also significant. This additional time would be spent working to support recurring activities that do not exist under the current upfront discount model. These activities would include identifying and validating eligible claims; collecting and compiling required data from multiple systems; submitting rebate requests; monitoring receipt of payments; reconciling expected versus actual rebates; researching discrepancies; tracking turnaround times; following up on missing, delayed, or denied rebate payments; preparing documentation for challenges and disputes; and maintaining records for audit and compliance purposes. The primary operational drivers of these administrative burdens are clear. First, the rebate model would require additional staffing or, at a minimum, significant diversion of current staff time from their existing responsibilities. In a small Critical Access Hospital, those 3 burdens cannot simply be absorbed without consequence. Pharmacy leadership, finance staff, revenue cycle personnel, compliance staff, and administrative leadership would all need to dedicate time to implementation and ongoing management. Second, the proposal would create new IT and data management requirements. Our systems were not designed around a retrospective rebate model, and there is not a single automated data feed capable of satisfying these requirements without additional manual intervention and coordination with vendors. Third, the rebate model would increase reliance on third-party vendors, including split-billing administrators and data reporting tools, to help generate reports, track claims, and reconcile rebate payments. Fourth, the model would introduce additional compliance monitoring and audit responsibilities, requiring more internal oversight. Finally, the process for researching and challenging delayed or denied rebates would require ongoing staff time and coordination. These incremental administrative hours would support a wide range of operational functions that are not required, or are significantly more limited, under the current upfront discount structure. Those functions include claims identification and processing, drug-specific tracking, data collection and submission, payment monitoring, monthly and quarterly reconciliation, denial management, dispute preparation, audit support, internal compliance review, policy maintenance, vendor coordination, staff training, and management oversight. Under the current upfront 340B discount model, our administrative responsibilities primarily involve maintaining compliant purchasing practices, overseeing split-billing processes, and ensuring program integrity. By contrast, a rebate model would create an entirely new downstream administrative process that resembles a receivables management function. Rather than receiving the discount at the time of purchase, we would be required to submit rebate requests, monitor payment status, reconcile expected and received amounts, and expend staff time pursuing payments that should have been automatically applied. Additional administrative burdens not otherwise captured above would also arise. These include legal and compliance review of data-sharing requirements, staff education and retraining, development of internal tracking tools and documentation processes, preparation for potential audits, and ongoing leadership oversight to ensure that rebate claims are being submitted and reconciled accurately. Some of these activities would occur during implementation, while many would continue on an ongoing basis as staff turnover occurs, reporting requirements evolve, and disputes arise. These administrative burdens would materially erode the benefit of the 340B Program for our hospital. For a small rural hospital, 340B savings are meaningful precisely because margins are narrow and resources are limited. A rebate model would not merely reduce efficiency; it would require substantial administrative time and attention to obtain the same statutory discount that we currently receive automatically through the upfront discount model. Even if the affected drugs represent only a portion of our 340B 4 utilization, the administrative burden attached to those drugs would be disproportionate to our size and staffing capacity. In short, the rebate mechanism would be labor-intensive and operationally disruptive for our hospital. It would require significant startup work, ongoing administrative oversight, coordination with vendors, expanded compliance monitoring, and continuous management of disputes and payment reconciliation. For large health systems, these burdens may be distributed across large administrative teams. For a small rural Critical Access Hospital such as ours, those same requirements are magnified and would directly undermine the purpose of the 340B Programto allow covered entities to stretch scarce federal resources as far as possible in service of patients and communities. Staffing Impacts Under a Potential 340B Rebate Program. Memorial Health System does not currently have the staff needed to comply with a Rebate Program. Memorial Health System does not currently have the staffing capacity necessary to administer a rebate-based 340B program. As a small rural Critical Access Hospital, our administrative and clinical staff operate in lean departments where individuals routinely perform multiple roles. The current 340B program is manageable under the existing upfront discount model because the operational processes are largely built into purchasing and split-billing workflows. A rebate-based model would introduce an entirely new layer of administrative tasks that our current staffing structure is not designed to absorb. Implementation of a rebate model would require either the addition of new administrative personnel or the diversion of current staff from their existing responsibilities. These responsibilities would likely fall across multiple departments, including pharmacy leadership, revenue cycle staff, finance personnel, and compliance oversight. While the cumulative hours may not initially justify a full dedicated position, the reality for a rural hospital is that these hours must come from already fully utilized staff. For example, pharmacy leadership may be required to shift time away from clinical oversight, medication safety initiatives, and pharmacy operations in order to support rebate tracking and verification activities. Similarly, revenue cycle or finance staff would need to redirect time from existing billing, reconciliation, and reporting functions in order to manage rebate submissions, monitor payments, and resolve disputes with manufacturers or administrators. If the rebate model expands or operational complexity increases, we anticipate that a dedicated partial administrative position or shared administrative support role may ultimately be required to manage these functions. Recruiting for such a position in a rural community can take several months due to workforce limitations and competition for 5 qualified healthcare administrative staff. Realistically, we would require at least three to six months of advance notice to recruit, hire, and train staff capable of managing these responsibilities. HRSAs estimate that implementing a rebate model would require only five additional hours per week significantly underestimates the operational realities faced by hospitals such as ours. That estimate appears to assume a streamlined, largely automated process; however, in practice, rebate management would involve multiple manual verification steps, cross-checking data across several systems, coordinating with third-party vendors, and responding to discrepancies or denials. Each rebate claim may require staff to verify drug eligibility, confirm claim accuracy, validate patient and payer information, ensure compliance with 340B requirements, and reconcile expected rebates against actual payments received. When multiplied across as many as 25 drugs and potentially numerous patient encounters each month, these tasks create a workload that far exceeds a few hours per week. Additionally, HRSAs estimate does not appear to account for the time required to investigate delayed or denied rebate payments, coordinate with manufacturers or program administrators, maintain documentation for audit purposes, or manage ongoing compliance oversight. In a small Critical Access Hospital environment where staff already manage multiple operational responsibilities, even modest additional administrative requirements quickly translate into meaningful staffing impacts. As a result, HRSAs estimate substantially understates the real staffing burden that a rebate- based model would impose on rural hospitals like ours. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Memorial Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Memorial Health System has built its operational workflows and technological infrastructure around the longstanding upfront 340B discount model. Our current systems support compliant purchasing, split-billing management, and internal oversight of the 340B program, but they were not designed to support a retrospective rebate model that requires submission, tracking, reconciliation, and dispute management for individual claims across multiple drug manufacturers. Implementing a rebate-based model would therefore require significant modifications to our existing systems and operational infrastructure. To support a rebate mechanism, we would likely need to modify or expand several systems and processes. These would include modifications to our pharmacy purchasing 6 workflows, additional reporting capabilities within our electronic health record (EHR), enhanced data extraction processes for claims and dispensing records, and expanded coordination with our third-party split-billing administrator. At a minimum, our organization would need to establish processes for identifying eligible claims associated with each drug included in the rebate program, extracting and validating data elements required for rebate submission, compiling those data elements into an appropriate reporting format, and maintaining internal records to track submission status and rebate reconciliation. One of the most significant operational challenges relates to the collection and transmission of medical claims data necessary to support rebate submissions. Our hospitals systems were not designed to automatically transmit all of the required data elements directly to our third-party administrator (TPA) or other rebate-processing entities. In many cases, the necessary data elements exist in different internal systems, including our EHR, pharmacy dispensing records, billing systems, and financial reporting systems. These systems do not currently operate through a single automated data feed that can easily generate the information required to support rebate submissions. As a result, assembling the necessary data for rebate requests would likely require a combination of system-generated reports and manual verification. Staff would need to extract relevant reports, review the data for accuracy, cross-reference dispensing records with billing and claims information, and format the data in a manner compatible with vendor requirements. Because our third-party administrator does not have a direct real- time data feed into our EHR, this process would likely involve repeated manual steps to compile, verify, and transmit data. Each step introduces additional staff time and increases the risk of discrepancies that would require further investigation. Furthermore, if different manufacturers or rebate administrators require slightly different data formats or submission processes, the complexity of these workflows would increase further. Each variation could require additional reporting configurations, additional validation steps, and additional staff oversight to ensure compliance with program requirements. In short, the systems and infrastructure required to support a rebate model are fundamentally different from those required under the current upfront discount approach. Our existing systems were not designed to support the continuous submission, monitoring, reconciliation, and dispute resolution that a rebate model would require. As a result, implementing such a program would require meaningful system adjustments, ongoing vendor coordination, and a substantial increase in staff time dedicated to data extraction, validation, and reporting. For a small rural Critical Access Hospital with limited IT and administrative resources, these system and infrastructure changes represent a significant operational burden. 7 Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Memorial Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The existing 340B upfront discount mechanism allows Memorial Health System to purchase eligible drugs at the statutorily required 340B ceiling price at the time of purchase. This structure provides predictability and allows us to manage pharmacy purchasing within the limited financial resources available to a small rural Critical Access Hospital. A rebate-based model would fundamentally change this structure by requiring the hospital to purchase drugs at the full acquisition price and then seek reimbursement through a retrospective rebate process. In effect, this model would require Memorial Health System to temporarily finance the statutory discount on behalf of drug manufacturers until rebates are processed and paid. This shift would have meaningful cash-flow implications for our hospital. Like many rural hospitals, Memorial Health System operates with limited operating margins and must carefully manage working capital to meet payroll, supply costs, and other operating obligations. Under a rebate model, the hospital would be required to purchase certain drugs at their higher acquisition cost and wait for rebate payments to recover the statutory discount. Even if rebates were paid within ten calendar days of submission, the hospital would still experience a delay between the time drugs are purchased and the time rebates are received. In practice, this delay may be longer due to claim processing time, data verification, submission requirements, or disputes over eligibility. Our current drug purchasing arrangements with wholesalers are structured around standard payment terms that typically require payment within a relatively short period following delivery. In many cases, those invoices are due before the hospital would realistically receive a rebate payment under a rebate model. As a result, Memorial Health System would likely be required to pay the full acquisition cost of certain medications before receiving the associated rebate. This would create a temporary but meaningful financial exposure that does not exist under the current upfront discount model. The assumption that rebates would in most instances be paid before the purchase invoice from a wholesaler is due does not accurately reflect the purchasing and billing processes used by many small hospitals. Wholesaler invoices are generated based on the timing of drug purchases and are subject to standard payment terms that are independent of rebate processing timelines. Even if a rebate submission could be prepared immediately after a 8 qualifying claim occurs, the rebate would still need to be validated, processed, and approved before payment is issued. Any discrepancy, delay, or denial would further extend the time before funds are received. These factors create a material risk that hospitals would be required to carry the full acquisition cost of certain medications for extended periods. Although Memorial Health System maintains responsible financial management practices, requiring the hospital to float these costs would introduce additional financial risk and uncertainty. Small rural hospitals typically operate with limited liquidity and must maintain adequate cash reserves to meet operating obligations and comply with various financial requirements associated with loans, capital financing, or other financial agreements. Introducing a rebate model that delays recovery of statutory discounts could place additional strain on working capital and complicate cash-flow planning. Even if HRSA were to require rebate payments to be made within ten calendar days of submission, that timeframe may not fully mitigate these risks. The ten-day period would begin only after a complete claim has been submitted, which itself requires the hospital to identify eligible claims, compile required data elements, validate the information, and transmit the submission through the appropriate platform. This process may take additional time depending on reporting cycles, system limitations, and staff availability. Additionally, any disputes or denials would extend the time required for resolution and payment. For these reasons, even relatively short rebate processing timelines could create real financial challenges for small hospitals like ours. The current upfront discount model avoids these risks entirely by ensuring that covered entities receive the statutory discount at the point of purchase. Replacing that system with a rebate-based model would introduce unnecessary financial complexity and expose hospitals to cash-flow volatility that could ultimately affect our ability to sustain services for the patients and communities we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Memorial Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The additional administrative burdens, staffing requirements, operational changes, and cash-flow risks associated with a rebate-based 340B model would have meaningful consequences for Memorial Health System and the patients we serve. The 340B Program 9 was designed to allow covered entities to stretch scarce resources in order to maintain access to care in underserved communities. When those resources are diverted to administrative tasks, compliance activities, system modifications, and cash-flow management rather than patient care, the intended benefits of the program are diminished. For a small rural Critical Access Hospital, even modest increases in administrative burden can have a disproportionate impact. Our hospital operates with limited staffing and narrow operating margins, and we rely on 340B savings to help support essential healthcare services that are often under-reimbursed in rural settings. A rebate model would require our hospital to devote significant additional time and resources to administrative oversight, claims management, reconciliation activities, and dispute resolution. Those resources would necessarily be diverted away from other operational priorities and patient care initiatives. As a result, Memorial Health System may be forced to reconsider how we allocate limited resources. Administrative staff and pharmacy leadership would need to dedicate additional time to rebate management activities rather than operational improvements, clinical support initiatives, or patient-focused programs. Over time, this shift could limit our ability to invest in service expansion, quality improvement initiatives, and community health programs that depend on stable financial support. The increased administrative complexity and financial uncertainty associated with a rebate model could also affect our ability to maintain certain services that are particularly important in rural communities. Critical Access Hospitals often operate services that are essential for community access to care but operate on very narrow margins. If the administrative and financial burden of a rebate program erodes the net benefit of the 340B Program, hospitals like ours may have fewer resources available to sustain these services. This could affect areas such as outpatient pharmacy services, infusion-related medication support, medication assistance programs, and other initiatives that help ensure patients have access to necessary medications close to home. In addition, the uncertainty surrounding the implementation of a rebate model has already introduced new challenges into our financial planning. Hospitals must make long-term decisions about staffing, equipment, facility improvements, and service line development. When a major federal program that supports rural healthcare access becomes uncertain, it complicates these planning efforts. Hospital leadership must consider the potential financial risks associated with program changes when evaluating future investments and operational priorities. The potential impact on patients in our community should not be underestimated. Memorial Health System serves a rural population where many residents rely on Medicare, Medicaid, or other government-supported health programs. Access to healthcare services in rural areas is already limited, and patients often must travel 10 significant distances to obtain specialized services that are not available locally. Maintaining local access to essential services helps reduce these barriers and ensures that patients can receive care in a timely and convenient manner. If the financial and administrative burdens of a rebate model reduce the effectiveness of the 340B Program, hospitals like ours may have fewer resources available to support medication access programs, maintain certain drug inventories, or sustain services that help patients receive treatment locally. In particular, the need to temporarily finance higher drug acquisition costs while awaiting rebate payments could make it more difficult for small hospitals to maintain inventory of certain higher-cost medications. This could result in delays in treatment. Ultimately, the cumulative effect of these administrative, operational, and financial burdens would undermine the core purpose of the 340B Program. Instead of allowing covered entities to stretch scarce resources and expand patient services, a rebate-based model would force hospitals to divert time, staff capacity, and financial resources toward administrative compliance activities. For a small rural hospital such as Memorial Health System, that shift would directly affect our ability to maintain access to care for the community we serve. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Memorial Health System reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Memorial Health System has structured multiple aspects of its financial planning and operational decision-making around the longstanding upfront discount structure of the 340B Program. For rural Critical Access Hospitals with limited operating margins, the 11 predictability of the upfront discount model allows hospital leadership to responsibly plan how 340B savings will be used to support patient care, maintain services, and address ongoing facility and equipment needs. At our hospital, 340B savings are incorporated into annual budgeting and long-term financial planning. Because the discount is realized at the time of purchase, we are able to project pharmacy costs with reasonable certainty and incorporate those savings into operating budgets and cash-flow projections. These savings help support routine operating needs, including maintaining pharmacy operations, supporting medication access for patients, and offsetting costs associated with services that are essential to the community but often operate with limited reimbursement. In addition, predictable 340B savings are considered when evaluating longer-term operational priorities such as facility improvements, equipment replacement, and service line sustainability. Rural hospitals must carefully plan for capital improvements and infrastructure needs, including building maintenance, equipment upgrades, and investments in technology necessary to maintain safe and effective patient care. The stability of the upfront discount structure allows our organization to incorporate these expected savings into responsible financial planning. The reliance interest is therefore not theoreticalit is operational and financial. Over time, Memorial Health System has developed internal processes, staffing models, vendor relationships, and financial projections based on the assumption that the 340B statutory discount would continue to be delivered through the established upfront purchasing model. A sudden shift to a rebate-based structure would disrupt those planning assumptions and introduce financial uncertainty that makes long-term planning significantly more difficult for small hospitals. For rural providers like ours, maintaining predictable operating costs is essential to sustaining access to care. The longstanding structure of the 340B Program has allowed hospitals to plan responsibly for patient care needs, operational stability, and infrastructure maintenance. Changing that structure now would undermine those reliance interests and create unnecessary uncertainty for hospitals that have organized their operations in good faith around the programs historical implementation. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 12 During the preparation period for HRSAs prior rebate program proposal, Memorial Health System reviewed the Beacon platform developed by Second Sight Solutions as the system through which rebate-related data would be submitted and managed. Although our hospital did not ultimately implement the system due to the programs suspension, the short period of preparation that was required revealed several concerns related to operational readiness, contractual requirements, and data governance. One area of concern involved the Terms and Conditions associated with use of the Beacon platform. Hospitals were asked to review and accept participation agreements and data-sharing requirements within a relatively compressed timeframe. For small rural hospitals with limited legal and compliance resources, it was difficult to fully evaluate the implications of these agreements, particularly with respect to data ownership, data security, and the responsibilities of participating hospitals in the event of a data breach or misuse of information. Because the platform involved the submission of sensitive patient and claims-related information, hospitals must ensure that any agreements governing such data exchange provide clear protections for covered entities and their patients. A second challenge involved changes in data requirements and reporting expectations during the early stages of the program rollout. Hospitals were required to understand what data elements would be required for rebate submissions, but the exact requirements appeared to evolve as the implementation process progressed. For small hospitals that must rely on third-party administrators, split-billing vendors, and limited internal IT resources, shifting data requirements create additional complexity. Each change requires additional system configuration, additional staff training, and additional testing to ensure that data can be extracted accurately and submitted in the required format. More broadly, the experience highlighted concerns about the centralized collection and transmission of sensitive patient and claims information through a third-party platform. Hospitals must comply with strict federal and state requirements related to patient privacy, data security, and protection of health information. Any system that requires hospitals to transmit detailed claims-level information must ensure that appropriate safeguards, contractual protections, and clear lines of responsibility are established before hospitals are asked to participate. If HRSA were to pursue a rebate-based model in the future, it would be essential to establish strong guardrails to protect both covered entities and patient information. At a minimum, hospitals would need clear contractual protections regarding data ownership, liability, and breach notification responsibilities. Data submission requirements should be stable, transparent, and fully documented well in advance of implementation so that hospitals and their vendors have sufficient time to prepare. Additionally, participating hospitals should have access to reliable technical support, clear documentation, and adequate testing periods before any system becomes operational. 13 For small rural hospitals like Memorial Health System, any rebate platform must also recognize the limitations of existing hospital systems and staffing. Requirements that assume seamless automated data feeds or extensive internal IT resources may not reflect the operational realities of many Critical Access Hospitals. Without appropriate safeguards, implementation timelines, and support mechanisms, a centralized rebate platform could introduce significant operational and compliance risks for hospitals that are already operating with limited administrative capacity. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Memorial Health System, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Our current operational practices, supported by our pharmacy management processes and third-party program administration tools, allow us to appropriately track medication utilization and ensure that applicable program requirements are followed. The processes currently used to manage potential duplicate discount concerns rely on existing purchasing records, dispensing documentation, and program oversight mechanisms that are already incorporated into routine 340B compliance activities. These processes are manageable within the current upfront discount framework and do not require the extensive administrative infrastructure that would be necessary under a rebate model. As a result, the existing system allows our hospital to maintain compliance while minimizing unnecessary administrative burden. Based on our experience, the current structure of the 340B Program has allowed hospitals, manufacturers, and program administrators to manage these issues through established operational processes without requiring a retrospective rebate mechanism. Introducing a rebate-based model to address duplicate discount concerns would impose substantial new administrative burdens on hospitals even in situations where no duplicate discount issues have occurred. 14 In contrast, the alternative approach discussed by HRSA and supported by the American Hospital Associationa neutral third-party clearinghouse mechanismcould address any potential deduplication concerns without fundamentally altering the longstanding operational structure of the 340B Program. Such a mechanism would allow relevant stakeholders to verify program eligibility and pricing interactions while avoiding the extensive administrative, financial, and operational burdens that a rebate system would impose on covered entities. For hospitals such as Memorial Health System, the current operational processes for monitoring 340B program compliance have proven manageable and effective. A rebate- based system would not meaningfully improve these processes but would significantly increase administrative complexity and staffing demands. For that reason, we believe that a rebate mechanism is unnecessary to address potential 340B/MDPNP deduplication concerns and that less burdensome alternatives should be pursued. For all of these reasons, Memorial Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Memorial Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely,s Tori Bowers CFO Memorial Health System The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Health System, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Memorial Health System that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Memorial Health System has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Memorial Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Memorial Health System can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Memorial Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Memorial Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Memorial Health System estimates that a 340B Model Rebate Pilot Program would impose substantial new one-time and ongoing administrative and operational burdens on our organization, particularly if up to 25 drugs are included. A shift from an upfront discount to a retrospective rebate model would effectively require us to build and maintain a new claims verification, tracking, reconciliation, and dispute-resolution function on top of our existing 340B compliance structure, all requiring additional labor hours in areas that are already stretched thin. Our estimated one-time startup activities would include redesigning internal workflows; revising policies and procedures; developing tracking processes; coordinating with split-billing and third-party administrators; determining how to identify, segregate, submit, monitor, and reconcile eligible claims for as many as 25 drugs; training finance, pharmacy, compliance, and revenue cycle staff; and reviewing legal and compliance considerations related to data sharing and reporting Our estimated ongoing administrative requirements are also significant. This additional time would be spent working to support recurring activities that do not exist under the current upfront discount model. These activities would include identifying and validating eligible claims; collecting and compiling required data from multiple systems; submitting rebate requests; monitoring receipt of payments; reconciling expected versus actual rebates; researching discrepancies; tracking turnaround times; following up on missing, delayed, or denied rebate payments; preparing documentation for challenges and disputes; and maintaining records for audit and compliance purposes. The primary operational drivers of these administrative burdens are clear. First, the rebate model would require additional staffing or, at a minimum, significant diversion of current staff time from their existing responsibilities. In a small Critical Access Hospital, those burdens cannot simply be absorbed without consequence. Pharmacy leadership, finance staff, revenue cycle personnel, compliance staff, and administrative leadership would all need to dedicate time to implementation and ongoing management. Second, the proposal would create new IT and data management requirements. Our systems were not designed around a retrospective rebate model, and there is not a single automated data feed capable of satisfying these requirements without additional manual intervention and coordination with vendors. Third, the rebate model would increase reliance on third-party vendors, including split-billing administrators and data reporting tools, to help generate reports, track claims, and reconcile rebate payments. Fourth, the model would introduce additional compliance monitoring and audit responsibilities, requiring more internal oversight. Finally, the process for researching and challenging delayed or denied rebates would require ongoing staff time and coordination. These incremental administrative hours would support a wide range of operational functions that are not required, or are significantly more limited, under the current upfront discount structure. Those functions include claims identification and processing, drug-specific tracking, data collection and submission, payment monitoring, monthly and quarterly reconciliation, denial management, dispute preparation, audit support, internal compliance review, policy maintenance, vendor coordination, staff training, and management oversight. Under the current upfront 340B discount model, our administrative responsibilities primarily involve maintaining compliant purchasing practices, overseeing split-billing processes, and ensuring program integrity. By contrast, a rebate model would create an entirely new downstream administrative process that resembles a receivables management function. Rather than receiving the discount at the time of purchase, we would be required to submit rebate requests, monitor payment status, reconcile expected and received amounts, and expend staff time pursuing payments that should have been automatically applied. Additional administrative burdens not otherwise captured above would also arise. These include legal and compliance review of data-sharing requirements, staff education and retraining, development of internal tracking tools and documentation processes, preparation for potential audits, and ongoing leadership oversight to ensure that rebate claims are being submitted and reconciled accurately. Some of these activities would occur during implementation, while many would continue on an ongoing basis as staff turnover occurs, reporting requirements evolve, and disputes arise. These administrative burdens would materially erode the benefit of the 340B Program for our hospital. For a small rural hospital, 340B savings are meaningful precisely because margins are narrow and resources are limited. A rebate model would not merely reduce efficiency; it would require substantial administrative time and attention to obtain the same statutory discount that we currently receive automatically through the upfront discount model. Even if the affected drugs represent only a portion of our 340B utilization, the administrative burden attached to those drugs would be disproportionate to our size and staffing capacity. In short, the rebate mechanism would be labor-intensive and operationally disruptive for our hospital. It would require significant startup work, ongoing administrative oversight, coordination with vendors, expanded compliance monitoring, and continuous management of disputes and payment reconciliation. For large health systems, these burdens may be distributed across large administrative teams. For a small rural Critical Access Hospital such as ours, those same requirements are magnified and would directly undermine the purpose of the 340B Programto allow covered entities to stretch scarce federal resources as far as possible in service of patients and communities. Staffing Impacts Under a Potential 340B Rebate Program. Memorial Health System does not currently have the staff needed to comply with a Rebate Program. Memorial Health System does not currently have the staffing capacity necessary to administer a rebate-based 340B program. As a small rural Critical Access Hospital, our administrative and clinical staff operate in lean departments where individuals routinely perform multiple roles. The current 340B program is manageable under the existing upfront discount model because the operational processes are largely built into purchasing and split-billing workflows. A rebate-based model would introduce an entirely new layer of administrative tasks that our current staffing structure is not designed to absorb. Implementation of a rebate model would require either the addition of new administrative personnel or the diversion of current staff from their existing responsibilities. These responsibilities would likely fall across multiple departments, including pharmacy leadership, revenue cycle staff, finance personnel, and compliance oversight. While the cumulative hours may not initially justify a full dedicated position, the reality for a rural hospital is that these hours must come from already fully utilized staff. For example, pharmacy leadership may be required to shift time away from clinical oversight, medication safety initiatives, and pharmacy operations in order to support rebate tracking and verification activities. Similarly, revenue cycle or finance staff would need to redirect time from existing billing, reconciliation, and reporting functions in order to manage rebate submissions, monitor payments, and resolve disputes with manufacturers or administrators. If the rebate model expands or operational complexity increases, we anticipate that a dedicated partial administrative position or shared administrative support role may ultimately be required to manage these functions. Recruiting for such a position in a rural community can take several months due to workforce limitations and competition for qualified healthcare administrative staff. Realistically, we would require at least three to six months of advance notice to recruit, hire, and train staff capable of managing these responsibilities. HRSAs estimate that implementing a rebate model would require only five additional hours per week significantly underestimates the operational realities faced by hospitals such as ours. That estimate appears to assume a streamlined, largely automated process; however, in practice, rebate management would involve multiple manual verification steps, cross-checking data across several systems, coordinating with third-party vendors, and responding to discrepancies or denials. Each rebate claim may require staff to verify drug eligibility, confirm claim accuracy, validate patient and payer information, ensure compliance with 340B requirements, and reconcile expected rebates against actual payments received. When multiplied across as many as 25 drugs and potentially numerous patient encounters each month, these tasks create a workload that far exceeds a few hours per week. Additionally, HRSAs estimate does not appear to account for the time required to investigate delayed or denied rebate payments, coordinate with manufacturers or program administrators, maintain documentation for audit purposes, or manage ongoing compliance oversight. In a small Critical Access Hospital environment where staff already manage multiple operational responsibilities, even modest additional administrative requirements quickly translate into meaningful staffing impacts. As a result, HRSAs estimate substantially understates the real staffing burden that a rebate-based model would impose on rural hospitals like ours. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Memorial Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Memorial Health System has built its operational workflows and technological infrastructure around the longstanding upfront 340B discount model. Our current systems support compliant purchasing, split-billing management, and internal oversight of the 340B program, but they were not designed to support a retrospective rebate model that requires submission, tracking, reconciliation, and dispute management for individual claims across multiple drug manufacturers. Implementing a rebate-based model would therefore require significant modifications to our existing systems and operational infrastructure. To support a rebate mechanism, we would likely need to modify or expand several systems and processes. These would include modifications to our pharmacy purchasing workflows, additional reporting capabilities within our electronic health record (EHR), enhanced data extraction processes for claims and dispensing records, and expanded coordination with our third-party split-billing administrator. At a minimum, our organization would need to establish processes for identifying eligible claims associated with each drug included in the rebate program, extracting and validating data elements required for rebate submission, compiling those data elements into an appropriate reporting format, and maintaining internal records to track submission status and rebate reconciliation. One of the most significant operational challenges relates to the collection and transmission of medical claims data necessary to support rebate submissions. Our hospitals systems were not designed to automatically transmit all of the required data elements directly to our third-party administrator (TPA) or other rebate-processing entities. In many cases, the necessary data elements exist in different internal systems, including our EHR, pharmacy dispensing records, billing systems, and financial reporting systems. These systems do not currently operate through a single automated data feed that can easily generate the information required to support rebate submissions. As a result, assembling the necessary data for rebate requests would likely require a combination of system-generated reports and manual verification. Staff would need to extract relevant reports, review the data for accuracy, cross-reference dispensing records with billing and claims information, and format the data in a manner compatible with vendor requirements. Because our third-party administrator does not have a direct real-time data feed into our EHR, this process would likely involve repeated manual steps to compile, verify, and transmit data. Each step introduces additional staff time and increases the risk of discrepancies that would require further investigation. Furthermore, if different manufacturers or rebate administrators require slightly different data formats or submission processes, the complexity of these workflows would increase further. Each variation could require additional reporting configurations, additional validation steps, and additional staff oversight to ensure compliance with program requirements. In short, the systems and infrastructure required to support a rebate model are fundamentally different from those required under the current upfront discount approach. Our existing systems were not designed to support the continuous submission, monitoring, reconciliation, and dispute resolution that a rebate model would require. As a result, implementing such a program would require meaningful system adjustments, ongoing vendor coordination, and a substantial increase in staff time dedicated to data extraction, validation, and reporting. For a small rural Critical Access Hospital with limited IT and administrative resources, these system and infrastructure changes represent a significant operational burden. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Memorial Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The existing 340B upfront discount mechanism allows Memorial Health System to purchase eligible drugs at the statutorily required 340B ceiling price at the time of purchase. This structure provides predictability and allows us to manage pharmacy purchasing within the limited financial resources available to a small rural Critical Access Hospital. A rebate-based model would fundamentally change this structure by requiring the hospital to purchase drugs at the full acquisition price and then seek reimbursement through a retrospective rebate process. In effect, this model would require Memorial Health System to temporarily finance the statutory discount on behalf of drug manufacturers until rebates are processed and paid. This shift would have meaningful cash-flow implications for our hospital. Like many rural hospitals, Memorial Health System operates with limited operating margins and must carefully manage working capital to meet payroll, supply costs, and other operating obligations. Under a rebate model, the hospital would be required to purchase certain drugs at their higher acquisition cost and wait for rebate payments to recover the statutory discount. Even if rebates were paid within ten calendar days of submission, the hospital would still experience a delay between the time drugs are purchased and the time rebates are received. In practice, this delay may be longer due to claim processing time, data verification, submission requirements, or disputes over eligibility. Our current drug purchasing arrangements with wholesalers are structured around standard payment terms that typically require payment within a relatively short period following delivery. In many cases, those invoices are due before the hospital would realistically receive a rebate payment under a rebate model. As a result, Memorial Health System would likely be required to pay the full acquisition cost of certain medications before receiving the associated rebate. This would create a temporary but meaningful financial exposure that does not exist under the current upfront discount model. The assumption that rebates would in most instances be paid before the purchase invoice from a wholesaler is due does not accurately reflect the purchasing and billing processes used by many small hospitals. Wholesaler invoices are generated based on the timing of drug purchases and are subject to standard payment terms that are independent of rebate processing timelines. Even if a rebate submission could be prepared immediately after a qualifying claim occurs, the rebate would still need to be validated, processed, and approved before payment is issued. Any discrepancy, delay, or denial would further extend the time before funds are received. These factors create a material risk that hospitals would be required to carry the full acquisition cost of certain medications for extended periods. Although Memorial Health System maintains responsible financial management practices, requiring the hospital to float these costs would introduce additional financial risk and uncertainty. Small rural hospitals typically operate with limited liquidity and must maintain adequate cash reserves to meet operating obligations and comply with various financial requirements associated with loans, capital financing, or other financial agreements. Introducing a rebate model that delays recovery of statutory discounts could place additional strain on working capital and complicate cash-flow planning. Even if HRSA were to require rebate payments to be made within ten calendar days of submission, that timeframe may not fully mitigate these risks. The ten-day period would begin only after a complete claim has been submitted, which itself requires the hospital to identify eligible claims, compile required data elements, validate the information, and transmit the submission through the appropriate platform. This process may take additional time depending on reporting cycles, system limitations, and staff availability. Additionally, any disputes or denials would extend the time required for resolution and payment. For these reasons, even relatively short rebate processing timelines could create real financial challenges for small hospitals like ours. The current upfront discount model avoids these risks entirely by ensuring that covered entities receive the statutory discount at the point of purchase. Replacing that system with a rebate-based model would introduce unnecessary financial complexity and expose hospitals to cash-flow volatility that could ultimately affect our ability to sustain services for the patients and communities we serve. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Memorial Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The additional administrative burdens, staffing requirements, operational changes, and cash-flow risks associated with a rebate-based 340B model would have meaningful consequences for Memorial Health System and the patients we serve. The 340B Program was designed to allow covered entities to stretch scarce resources in order to maintain access to care in underserved communities. When those resources are diverted to administrative tasks, compliance activities, system modifications, and cash-flow management rather than patient care, the intended benefits of the program are diminished. For a small rural Critical Access Hospital, even modest increases in administrative burden can have a disproportionate impact. Our hospital operates with limited staffing and narrow operating margins, and we rely on 340B savings to help support essential healthcare services that are often under-reimbursed in rural settings. A rebate model would require our hospital to devote significant additional time and resources to administrative oversight, claims management, reconciliation activities, and dispute resolution. Those resources would necessarily be diverted away from other operational priorities and patient care initiatives. As a result, Memorial Health System may be forced to reconsider how we allocate limited resources. Administrative staff and pharmacy leadership would need to dedicate additional time to rebate management activities rather than operational improvements, clinical support initiatives, or patient-focused programs. Over time, this shift could limit our ability to invest in service expansion, quality improvement initiatives, and community health programs that depend on stable financial support. The increased administrative complexity and financial uncertainty associated with a rebate model could also affect our ability to maintain certain services that are particularly important in rural communities. Critical Access Hospitals often operate services that are essential for community access to care but operate on very narrow margins. If the administrative and financial burden of a rebate program erodes the net benefit of the 340B Program, hospitals like ours may have fewer resources available to sustain these services. This could affect areas such as outpatient pharmacy services, infusion-related medication support, medication assistance programs, and other initiatives that help ensure patients have access to necessary medications close to home. In addition, the uncertainty surrounding the implementation of a rebate model has already introduced new challenges into our financial planning. Hospitals must make long-term decisions about staffing, equipment, facility improvements, and service line development. When a major federal program that supports rural healthcare access becomes uncertain, it complicates these planning efforts. Hospital leadership must consider the potential financial risks associated with program changes when evaluating future investments and operational priorities. The potential impact on patients in our community should not be underestimated. Memorial Health System serves a rural population where many residents rely on Medicare, Medicaid, or other government-supported health programs. Access to healthcare services in rural areas is already limited, and patients often must travel significant distances to obtain specialized services that are not available locally. Maintaining local access to essential services helps reduce these barriers and ensures that patients can receive care in a timely and convenient manner. If the financial and administrative burdens of a rebate model reduce the effectiveness of the 340B Program, hospitals like ours may have fewer resources available to support medication access programs, maintain certain drug inventories, or sustain services that help patients receive treatment locally. In particular, the need to temporarily finance higher drug acquisition costs while awaiting rebate payments could make it more difficult for small hospitals to maintain inventory of certain higher-cost medications. This could result in delays in treatment. Ultimately, the cumulative effect of these administrative, operational, and financial burdens would undermine the core purpose of the 340B Program. Instead of allowing covered entities to stretch scarce resources and expand patient services, a rebate-based model would force hospitals to divert time, staff capacity, and financial resources toward administrative compliance activities. For a small rural hospital such as Memorial Health System, that shift would directly affect our ability to maintain access to care for the community we serve. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Memorial Health System reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Memorial Health System has structured multiple aspects of its financial planning and operational decision-making around the longstanding upfront discount structure of the 340B Program. For rural Critical Access Hospitals with limited operating margins, the predictability of the upfront discount model allows hospital leadership to responsibly plan how 340B savings will be used to support patient care, maintain services, and address ongoing facility and equipment needs. At our hospital, 340B savings are incorporated into annual budgeting and long-term financial planning. Because the discount is realized at the time of purchase, we are able to project pharmacy costs with reasonable certainty and incorporate those savings into operating budgets and cash-flow projections. These savings help support routine operating needs, including maintaining pharmacy operations, supporting medication access for patients, and offsetting costs associated with services that are essential to the community but often operate with limited reimbursement. In addition, predictable 340B savings are considered when evaluating longer-term operational priorities such as facility improvements, equipment replacement, and service line sustainability. Rural hospitals must carefully plan for capital improvements and infrastructure needs, including building maintenance, equipment upgrades, and investments in technology necessary to maintain safe and effective patient care. The stability of the upfront discount structure allows our organization to incorporate these expected savings into responsible financial planning. The reliance interest is therefore not theoreticalit is operational and financial. Over time, Memorial Health System has developed internal processes, staffing models, vendor relationships, and financial projections based on the assumption that the 340B statutory discount would continue to be delivered through the established upfront purchasing model. A sudden shift to a rebate-based structure would disrupt those planning assumptions and introduce financial uncertainty that makes long-term planning significantly more difficult for small hospitals. For rural providers like ours, maintaining predictable operating costs is essential to sustaining access to care. The longstanding structure of the 340B Program has allowed hospitals to plan responsibly for patient care needs, operational stability, and infrastructure maintenance. Changing that structure now would undermine those reliance interests and create unnecessary uncertainty for hospitals that have organized their operations in good faith around the programs historical implementation. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. During the preparation period for HRSAs prior rebate program proposal, Memorial Health System reviewed the Beacon platform developed by Second Sight Solutions as the system through which rebate-related data would be submitted and managed. Although our hospital did not ultimately implement the system due to the programs suspension, the short period of preparation that was required revealed several concerns related to operational readiness, contractual requirements, and data governance. One area of concern involved the Terms and Conditions associated with use of the Beacon platform. Hospitals were asked to review and accept participation agreements and data-sharing requirements within a relatively compressed timeframe. For small rural hospitals with limited legal and compliance resources, it was difficult to fully evaluate the implications of these agreements, particularly with respect to data ownership, data security, and the responsibilities of participating hospitals in the event of a data breach or misuse of information. Because the platform involved the submission of sensitive patient and claims-related information, hospitals must ensure that any agreements governing such data exchange provide clear protections for covered entities and their patients. A second challenge involved changes in data requirements and reporting expectations during the early stages of the program rollout. Hospitals were required to understand what data elements would be required for rebate submissions, but the exact requirements appeared to evolve as the implementation process progressed. For small hospitals that must rely on third-party administrators, split-billing vendors, and limited internal IT resources, shifting data requirements create additional complexity. Each change requires additional system configuration, additional staff training, and additional testing to ensure that data can be extracted accurately and submitted in the required format. More broadly, the experience highlighted concerns about the centralized collection and transmission of sensitive patient and claims information through a third-party platform. Hospitals must comply with strict federal and state requirements related to patient privacy, data security, and protection of health information. Any system that requires hospitals to transmit detailed claims-level information must ensure that appropriate safeguards, contractual protections, and clear lines of responsibility are established before hospitals are asked to participate. If HRSA were to pursue a rebate-based model in the future, it would be essential to establish strong guardrails to protect both covered entities and patient information. At a minimum, hospitals would need clear contractual protections regarding data ownership, liability, and breach notification responsibilities. Data submission requirements should be stable, transparent, and fully documented well in advance of implementation so that hospitals and their vendors have sufficient time to prepare. Additionally, participating hospitals should have access to reliable technical support, clear documentation, and adequate testing periods before any system becomes operational. For small rural hospitals like Memorial Health System, any rebate platform must also recognize the limitations of existing hospital systems and staffing. Requirements that assume seamless automated data feeds or extensive internal IT resources may not reflect the operational realities of many Critical Access Hospitals. Without appropriate safeguards, implementation timelines, and support mechanisms, a centralized rebate platform could introduce significant operational and compliance risks for hospitals that are already operating with limited administrative capacity. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Memorial Health System, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Our current operational practices, supported by our pharmacy management processes and third-party program administration tools, allow us to appropriately track medication utilization and ensure that applicable program requirements are followed. The processes currently used to manage potential duplicate discount concerns rely on existing purchasing records, dispensing documentation, and program oversight mechanisms that are already incorporated into routine 340B compliance activities. These processes are manageable within the current upfront discount framework and do not require the extensive administrative infrastructure that would be necessary under a rebate model. As a result, the existing system allows our hospital to maintain compliance while minimizing unnecessary administrative burden. Based on our experience, the current structure of the 340B Program has allowed hospitals, manufacturers, and program administrators to manage these issues through established operational processes without requiring a retrospective rebate mechanism. Introducing a rebate-based model to address duplicate discount concerns would impose substantial new administrative burdens on hospitals even in situations where no duplicate discount issues have occurred. In contrast, the alternative approach discussed by HRSA and supported by the American Hospital Associationa neutral third-party clearinghouse mechanismcould address any potential deduplication concerns without fundamentally altering the longstanding operational structure of the 340B Program. Such a mechanism would allow relevant stakeholders to verify program eligibility and pricing interactions while avoiding the extensive administrative, financial, and operational burdens that a rebate system would impose on covered entities. For hospitals such as Memorial Health System, the current operational processes for monitoring 340B program compliance have proven manageable and effective. A rebate-based system would not meaningfully improve these processes but would significantly increase administrative complexity and staffing demands. For that reason, we believe that a rebate mechanism is unnecessary to address potential 340B/MDPNP deduplication concerns and that less burdensome alternatives should be pursued. For all of these reasons, Memorial Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Memorial Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely,s Tori Bowers CFO Memorial Health System
HRSA-2026-0001-2014Community HealthCare Association of the Dakotas2026-04-20T04:00Z26,138 chars
Please see the attached letter with concerns from the Community HealthCare Association of the Dakotas, the Primary Care Association representing North Dakota and South Dakota about the proposed 340B Rebate Model. 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the community health centers (CHCs) in North Dakota and South Dakota, the Community Healthcare Association of the Dakotas (CHAD) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. In North Dakota, five CHCs serve over 36,000 patients, and in South Dakota, five CHCs serve over 126,500 patients. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, CHAD strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, CHAD explains: 1 HRSA requested input on these in the first paragraph of the RFI summary. 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net A. The importance of 340B savings to North Dakota and South Dakota CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 20,765 low-income and uninsured patients in North Dakota and 47,100 low-income and uninsured patients in South Dakota. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. In North Dakota CHCs served 7,452 uninsured patients in 2024 and in South Dakota CHCs served 29,297 uninsured patients in 2024. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in North Dakota and South Dakota, CHCs routinely rely on 340B savings to support services such as: sliding fee scale prescription services for low-income patients; dental care; behavioral health services such as mental health counseling services in rural schools and Behavioral Health and Medication Assisted Therapy; school-based primary care services; transportation services; language 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net translation services; Community Health Workers (CHWs); Navigators; patient enrollment services; to name a few. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients of all income levels and insurance types. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by North Dakota and South Dakota CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) A CHC in North Dakota shared they have already begun reviewing programs supported by 340B savings and are anticipating needing to make decisions about discontinuing programs such as school-based primary care, care coordination services, mental and behavioral health services, psychiatry services, and may be forced to close two rural clinic sites. A CHC surveyed in South Dakota shared that reductions in savings from the 340B model have already contributed to the closure of 3 medical clinic locations and 1 dental clinic location and contributed to the elimination of clinical and administrative positions in rural South Dakota. Additional administrative costs and financial burdens incurred as a result of a Rebate Model could create further staffing reductions and clinic closures. The reduction in services mentioned above will have an adverse impact on patients served in some of the most rural areas in North Dakota and South Dakota. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net In North Dakota, pharmacies must be at least 51% owned by a pharmacist licensed in the State. This means CHCs in North Dakota are not allowed by law to operate an entity- owned pharmacy at a CHC and are completely reliant on contract pharmacies for dispensing 340B drugs to their patients. If contract pharmacies decide the burden of a 340B Rebate Model is too great, this could further reduce the ability of CHC patients to access affordable medications. Only one CHC in South Dakota currently operates an entity-owned pharmacy. In rural and frontier areas like much of North Dakota and South Dakota, CHCs value and support locally owned pharmacies. In many rural communities CHC entity owned pharmacies would be in direct competition with a small locally owned pharmacy and its unlikely both would be sustainable. A CHC in South Dakota shared that they will be closely evaluating whether they will need to block certain drugs in the 340B program if the financial burden is too great under a Rebate Model. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. A CHC in North Dakota shared that they expect to significantly reduce the medications included in the drug discount program for sliding-fee scale patients, if the rebate model moves forward. Several of those drugs have no therapeutic alternatives and are critical life-saving treatments. It will be harder for patients to access these medications at an affordable cost. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that reduced savings from the 340B model have already contributed to the closure of 3 rural medical clinic locations and 1 rural dental clinic location in South Dakota, and contributed to the elimination of clinical and administrative positions in rural South Dakota. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Shelly Ten Napel at shellytennapel@communityhealthcare.net Sincerely, Shelly Ten Napel, MSW, MPP CEO, Community HealthCare Association of the Dakotas 196 E. 6th Street, Suite 200, Sioux Falls, SD 57104 | 216 N 2nd Street, Suite 104, Bismarck, ND 58501 Phone: (605) 275-2423 | Phone: (701) 221-9824 www.communityhealthcare.net Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2015CHCANYS2026-04-20T04:00Z16,146 chars
See attached pdf for comments 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the Community Health Care Association of New York State (CHCANYS), representing more than 80 federally qualified health centers (FQHCs), also known as community health centers (CHCs), we welcome the opportunity to submit comments on the Request for Information for the 340B Rebate Model Pilot Program. Collectively, New York community health centers operate over 900 sites across the state and serve 2.5 million patients each year, representing approximately 1 in 8 New Yorkers, regardless of their insurance status or ability to pay. Health centers serve all patients but disproportionately care for those with low incomes and limited coverage options. The 340B program is foundational to CHCs ability to serve patients across New York. The proposed shift of responsibility from manufacturers to safety-net providers via a rebate model would pose significant operational and financial challenges. Despite being framed as a non-disruptive change, transitioning from an upfront discount to a rebate model would require substantial changes to pharmacy workflows, billing systems, and staffing. In 2025, across New York, health centers missed out on $80 million in 340B savings due to increased pharmaceutical manufacturer restrictions on health center in- house and contract pharmacies. We expect the rebate model to further reduce savings from both entity- owned and contract pharmacy arrangements due to administrative complexity and reconciliation challenges. Summary of Recommendations: In short, CHCANYS strongly urges HRSA to consider the following: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow New Yorks CHCs to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers 2 stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect their ability to serve their patients, who go to them for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. A 340B Rebate Model Pilot Program will impact New Yorks health centers ability to provide many services supported by 340B revenue, including dental care, SUD treatment, mental health services, school-based health programs, care coordination, and case management. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on New Yorks patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit health centers ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil CHCs financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect safety net providers like CHCs from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create significant financial strain. The change to a rebate would force health centers to make difficult decisions about how to allocate limited financial resources including cutting essential services, adjusting sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require covered entities to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 standardization and anticipated varying requirements across manufacturers will likely force CHCs to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Increased scrutiny around eligibility and duplicate discounts may appear reasonable, but in practice is likely to result in more denied claims and narrower interpretations, further reducing 340B savings that are currently reinvested into patient care. Workforce Impacts: To meet a rebate models complicated requirements, health centers anticipate needing to hire additional FTEs. In addition, we expect that health center staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate health centers will face high upfront costs to adapt pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase overall drug costs by eliminating discounts that currently reduce total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs also face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden for health centers and further limits their ability to maintain services and access to medications for their patients. The rebate model also inherently advantages larger health systems with greater cash reserves, staffing, and infrastructure, creating a structural imbalance that disadvantages community- based primary care providers and may accelerate consolidation. C. The costs from a 340B Rebate Model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Many of New Yorks health centers help patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, health centers anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, they may be forced to scale back essential services such as care coordination, behavioral health services, dental services, mobile health programs, school-based health, food assistance, or medication therapy management programs. 4 Operating hours: The additional costs of a rebate model may require some health centers to reduce their clinic hours, which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on health centers ability to maintain an adequate supply of the drugs included in the pilot. They may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: New Yorks health centers ability to provide affordable medications to their patients may be compromised. If they do continue to purchase medications under a 340B rebate, they may be forced to offer smaller discounts to patients, meaning their patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in treatment initiation and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to their heightened vulnerability and the undue pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have, threatening their financial viability. These impacts will be particularly severe for health centers serving low-income and underserved communities, which have limited access to capital and fewer resources to absorb payment delays or revenue volatility. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, health center patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and their patients cannot afford to lose access to the care supported by the 340B program. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. 5 A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion CHCANYS strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of New Yorks low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing health centers to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Health centers would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Derek Tobia at dtobia@chcanys.org Sincerely, Derek Tobia Senior Director of Financial Strategy Community Health Care Association of New York State (CHCANYS) On behalf of CHCANYS and New Yorks community health centers dtobia@chcanys.org
HRSA-2026-0001-2016Indiana Primary Health Care Association2026-04-20T04:00Z29,188 chars
Please see attached comment letter. indianapca.org | 150 W. Market St., Suite 520, Indianapolis, IN 46204 | Phone: 317.630.0845 | Fax: 317.630.0849 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Indianas 42 Community Health Centers (CHCs) and the more than 800,000 Hoosiers they serve, the Indiana Primary Health Care Association (IPHCA) appreciates the opportunity to comment on HRSAs Request for Information regarding a potential 340B rebate pilot. These comments supplement the center-specific submissions filed by Indiana CHCs and focus on the statewide operational, financial, and patient-care consequences that a rebate model would create. For Indianas health centers, 340B is not a margin enhancement. It is working capital that keeps medications affordable and helps underwrite primary care, behavioral health, dental care, pharmacy access, and other services for low-income, uninsured, and underinsured patients. In Indiana, where more than half of health center patients rely on Medicaid, destabilizing 340B cash flow would fall hardest on the patients least able to absorb delays, higher out-of-pocket costs, or reduced access to care. Summary of Recommendations 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse that can achieve the program-integrity and deduplication objectives HRSA has identified without imposing the harms described below. 3. If HRSA nevertheless proceeds with a rebate model, CHCs should be categorically exempted. 4. If HRSA permits manufacturers to apply a rebate model to CHCs, manufacturer rebate plans should be approved only if they include strong, uniform safeguards that fully protect CHCs from cash-flow, administrative, and operational harm. Summary of Comments A. Why 340B savings are essential to Indiana CHCs ability to provide affordable, integrated care to the communities they serve. indianapca.org | 150 W. Market St., Suite 520, Indianapolis, IN 46204 | Phone: 317.630.0845 | Fax: 317.630.0849 B. Why a rebate model would impose severe cash-flow demands, major administrative burdens, and direct financial losses on CHCs. C. Why those costs would inevitably reduce patient discounts, weaken services, and in some cases cause CHCs or contract pharmacies to stop participating for affected drugs altogether. D. Why CHCs should be exempted from any rebate model, even if HRSA moves forward for other covered entities. E. What minimum safeguards HRSA should require if it nevertheless allows manufacturers to impose a rebate model on CHCs. F. Why a neutral claims clearinghouse is the better path. A. 340B savings underwrite a wide range of services that Indiana CHC patients rely on. CHCs are the backbone of the safety net in Indiana and nationally. They provide high-quality primary care, behavioral health, dental care, pharmacy access, and enabling services regardless of a patients ability to pay. For many patients, especially in rural communities and medically underserved urban neighborhoods, the health center is the most reliable point of access to care. 340B savings are essential to this model. They help reduce the cost of medications for patients, but their role is broader than that. Those savings support the infrastructure that allows CHCs to keep people connected to care: pharmacy access, clinical staffing, care coordination, chronic disease management, behavioral health integration, and other services that are difficult to sustain on thin operating margins alone. That is especially important in Indiana. Our health centers serve a large Medicaid population, significant numbers of uninsured patients, and communities where provider shortages, transportation barriers, and affordability challenges are real and persistent. When 340B savings are reduced, the consequences are not abstract. The loss shows up in fewer local resources, fewer flexible dollars to keep services available, and less ability to help patients obtain and stay on needed medications. It is also important to remember what 340B is and is not. 340B savings are not a new taxpayer-funded appropriation. They are the statutory discounts that covered entities rely upon to stretch scarce resources and expand care. Every dollar of 340B value that remains with a CHC can be reinvested locally and directly into patient care. B. A rebate model would create major cash-flow, administrative, and operational burdens for CHCs. First, a rebate model would force CHCs to finance drug purchases at far higher upfront prices and wait to be made whole later. That is a fundamental restructuring of how the program works. For health centers operating with limited margins and limited borrowing capacity, this is not a manageable inconvenience. It is a material financial risk. A ten-day rebate turnaround does not solve that problem. It addresses only one step in a much longer chain. CHCs still must purchase inventory, carry those costs until drugs are dispensed, manage wholesaler payment deadlines, and absorb the risk of delayed payment, disputed claims, denials, or operational errors. In practice, this means more borrowing, more interest expense, more cash on hand tied up in inventory, and less flexibility to support care delivery. indianapca.org | 150 W. Market St., Suite 520, Indianapolis, IN 46204 | Phone: 317.630.0845 | Fax: 317.630.0849 Second, the administrative burden would be substantial. A rebate model would require new or upgraded information systems, claim-level data collection and submission, reconciliation across manufacturers, denial management, appeal processes, auditing, financial tracking, and more intensive oversight of contract-pharmacy arrangements. For CHCs, this is not just a back-office nuisance. It means diverting already-limited staff time and resources away from patient care and into a complicated manufacturer-driven administrative process. Third, CHCs would face direct financial losses beyond financing costs. A rebate model threatens the loss of sub- ceiling discounts, prompt-pay discounts, volume-based pricing benefits, cost-of-goods-sold discounts, and other efficiencies that help make current purchasing workable. It also creates unresolved questions around expired, damaged, or otherwise undispensed units that arise in the ordinary course of responsible pharmacy operations. If those units are excluded from rebate treatment, CHCs would be forced to absorb full acquisition cost despite complying with normal pharmacy standards. Indianas recent debates over efforts to capture additional governmental value tied to 340B-referenced claims are instructive here. Time and again, the headline governmental savings can look larger on paper than they are in practice, while the local loss to CHCs is immediate and real. When health centers lose flexible 340B resources, Indiana communities lose those dollars in full. The government, by contrast, often does not retain every gross dollar once financing rules and program mechanics are taken into account. That mismatch is one reason policymakers should be extremely cautious about replacing upfront discounts with delayed rebates. C. These burdens would reduce access, reduce services, and harm patients. When 340B savings decline, CHCs have fewer resources to deploy locally. That means fewer dollars available to subsidize medications, fewer resources to support enabling services, and less room to absorb the costs of caring for patients with complex medical, behavioral health, and social needs. The most immediate patient impact is on affordability. If CHCs must buy at much higher upfront prices, take on financing costs, and live with uncertainty over rebate timing and denials, they will have less ability to discount medications deeply enough for low-income patients. Some centers and some contract-pharmacy arrangements may determine that the financial exposure is too great for certain drugs and may stop offering those drugs through 340B channels altogether. That would be particularly damaging for CHCs because they rely more heavily than many other covered entities on contract pharmacies to make medications accessible in the communities where their patients live. If contract pharmacies carve out rebate-model drugs, or if CHCs cannot safely carry the working-capital burden, patient access will narrow quickly. The downstream consequences are predictable: delayed starts on therapy, lower adherence, worsening chronic disease management, more avoidable complications, and more costly downstream utilization. These are not speculative concerns. They follow directly from making essential medications harder to access and less affordable for medically underserved patients. indianapca.org | 150 W. Market St., Suite 520, Indianapolis, IN 46204 | Phone: 317.630.0845 | Fax: 317.630.0849 This would also come at a particularly difficult moment. CHCs have already had to absorb significant pressure from contract-pharmacy restrictions, declining savings on some drugs, workforce constraints, and years of operating strain. A rebate model would not land on a financially neutral system. It would hit a system that has already been asked to do more with less. D. CHCs should be categorically exempted from any rebate model. IPHCA strongly urges HRSA not to impose a mandatory rebate model on any covered entities. But if HRSA decides to proceed, CHCs should be categorically exempted. CHCs are uniquely vulnerable for several reasons. First, the drugs most likely to be swept into this type of framework are often drugs that are commonly dispensed in ambulatory, community-based settings. That means the model can hit CHCs particularly hard. Second, CHCs are highly dependent on contract pharmacies relative to many other covered-entity types, which makes them especially exposed when outside pharmacy partners carve out affected drugs or impose new administrative conditions. Third, CHCs generally do not have the balance sheets, reserves, or borrowing capacity needed to absorb large new working-capital requirements and manufacturer-payment risk. There is also a strong policy reason to exempt CHCs. Health centers use 340B savings in the most direct possible way: to expand access for low-income and underserved patients. Pulling those dollars out of CHCs does not simply change accounting treatment. It reduces local care capacity. In Indiana, that means fewer resources reaching rural towns, small cities, and urban neighborhoods where the safety net is already stretched. E. If HRSA allows manufacturers to apply a rebate model to CHCs, it must require robust, uniform protections. If HRSA nevertheless allows manufacturers to apply a rebate model to CHCs, the standards governing approval of manufacturer plans should include, at minimum, the following protections: 1. Advance funding sufficient to prevent routine cash-flow harm. For each rebate-model drug, manufacturers should be required to advance enough rebate value to cover the greater of two full package sizes or approximately two months of a CHCs typical dispensing volume for that drug. Without this protection, cash- flow strain is built into the model. 2. Full, prompt, and transparent reimbursement of all implementation costs. Manufacturers should be required to reimburse CHCs for all reasonable costs caused by the rebate model, including information-technology changes, pharmacy operations, finance staff time, contract-pharmacy management, dispute resolution, borrowing costs, and other administrative expenses. Reimbursement should be monthly, standardized, and auditable. 3. Rebates at the unit level. Unit-level rebate processing is essential to reduce working-capital exposure and speed reimbursement, particularly for drugs sold in multi-unit packages. 4. Rebates on a reasonable number of undispensed units. Manufacturer plans should include a practical mechanism for CHCs to receive rebate treatment for expired, damaged, or otherwise undispensed units that arise in the normal course of compliant pharmacy operations. 5. No BIN or PCN requirement where those data are unavailable to the CHC. HRSA should prohibit manufacturer requirements that depend on data elements that CHCs or their contract-pharmacy arrangements may not consistently receive or control. indianapca.org | 150 W. Market St., Suite 520, Indianapolis, IN 46204 | Phone: 317.630.0845 | Fax: 317.630.0849 6. Uniform national administrative rules, deadlines, and appeals processes. HRSA should establish standardized operating rules governing submission timelines, payment deadlines, denials, corrections, dispute resolution, and treatment of transition inventory. CHCs should not be forced to navigate a different rulebook for every manufacturer. 7. Clear protections for contract-pharmacy arrangements. Because CHCs depend heavily on contract pharmacies, manufacturer plans should be approved only if they can be operationalized in contract-pharmacy settings without forcing widespread carve-outs or making participation impracticable. Even with these protections, however, a rebate model would remain inferior to the longstanding upfront-discount structure of the 340B program. F. A neutral claims clearinghouse is the better solution. If HRSAs objective is accurate deduplication and program integrity, a neutral claims clearinghouse is the better approach. It would allow necessary data validation and coordination without requiring CHCs to front vastly higher acquisition costs and wait for manufacturers to reimburse them later. Compared with a rebate model, a neutral clearinghouse would preserve the basic structure of the 340B program, avoid unnecessary borrowing and cash-flow disruption, reduce administrative complexity, lower the risk of disputes and denials, and better protect patient access. It would also avoid forcing safety-net providers to shoulder costs and risks that do not improve care and are not necessary to accomplish HRSAs stated objectives. Conclusion Indianas CHCs stretch 340B resources every day to keep medications affordable and sustain access to care for more than 800,000 Hoosiers. A mandatory rebate model would destabilize that work by shifting financial risk, administrative burden, and working-capital pressure onto the very providers Congress intended to support. HRSA should reject a mandatory rebate model for covered entities and pursue a more practical alternative, such as a neutral claims clearinghouse. At a minimum, if HRSA proceeds further down this path, CHCs should be categorically exempted. Indianas health centers should not be forced to finance a federal policy experiment at the expense of patient access, local care capacity, and community stability. Thank you for the opportunity to comment and for your consideration of the operational realities facing community health centers. Sincerely, Ben Harvey, CEO Indiana Primary Health Care Association April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Indianas 42 Community Health Centers (CHCs) and the more than 800,000 Hoosiers they serve, the Indiana Primary Health Care Association (IPHCA) appreciates the opportunity to comment on HRSAs Request for Information regarding a potential 340B rebate pilot. These comments supplement the center-specific submissions filed by Indiana CHCs and focus on the statewide operational, financial, and patient-care consequences that a rebate model would create. For Indianas health centers, 340B is not a margin enhancement. It is working capital that keeps medications affordable and helps underwrite primary care, behavioral health, dental care, pharmacy access, and other services for low-income, uninsured, and underinsured patients. In Indiana, where more than half of health center patients rely on Medicaid, destabilizing 340B cash flow would fall hardest on the patients least able to absorb delays, higher out-of-pocket costs, or reduced access to care. Summary of Comments A. Why 340B savings are essential to Indiana CHCs ability to provide affordable, integrated care to the communities they serve. B. Why a rebate model would impose severe cash-flow demands, major administrative burdens, and direct financial losses on CHCs. C. Why those costs would inevitably reduce patient discounts, weaken services, and in some cases cause CHCs or contract pharmacies to stop participating for affected drugs altogether. D. Why CHCs should be exempted from any rebate model, even if HRSA moves forward for other covered entities. E. What minimum safeguards HRSA should require if it nevertheless allows manufacturers to impose a rebate model on CHCs. F. Why a neutral claims clearinghouse is the better path. A. 340B savings underwrite a wide range of services that Indiana CHC patients rely on. CHCs are the backbone of the safety net in Indiana and nationally. They provide high-quality primary care, behavioral health, dental care, pharmacy access, and enabling services regardless of a patients ability to pay. For many patients, especially in rural communities and medically underserved urban neighborhoods, the health center is the most reliable point of access to care. 340B savings are essential to this model. They help reduce the cost of medications for patients, but their role is broader than that. Those savings support the infrastructure that allows CHCs to keep people connected to care: pharmacy access, clinical staffing, care coordination, chronic disease management, behavioral health integration, and other services that are difficult to sustain on thin operating margins alone. That is especially important in Indiana. Our health centers serve a large Medicaid population, significant numbers of uninsured patients, and communities where provider shortages, transportation barriers, and affordability challenges are real and persistent. When 340B savings are reduced, the consequences are not abstract. The loss shows up in fewer local resources, fewer flexible dollars to keep services available, and less ability to help patients obtain and stay on needed medications. It is also important to remember what 340B is and is not. 340B savings are not a new taxpayer-funded appropriation. They are the statutory discounts that covered entities rely upon to stretch scarce resources and expand care. Every dollar of 340B value that remains with a CHC can be reinvested locally and directly into patient care. B. A rebate model would create major cash-flow, administrative, and operational burdens for CHCs. First, a rebate model would force CHCs to finance drug purchases at far higher upfront prices and wait to be made whole later. That is a fundamental restructuring of how the program works. For health centers operating with limited margins and limited borrowing capacity, this is not a manageable inconvenience. It is a material financial risk. A ten-day rebate turnaround does not solve that problem. It addresses only one step in a much longer chain. CHCs still must purchase inventory, carry those costs until drugs are dispensed, manage wholesaler payment deadlines, and absorb the risk of delayed payment, disputed claims, denials, or operational errors. In practice, this means more borrowing, more interest expense, more cash on hand tied up in inventory, and less flexibility to support care delivery. Second, the administrative burden would be substantial. A rebate model would require new or upgraded information systems, claim-level data collection and submission, reconciliation across manufacturers, denial management, appeal processes, auditing, financial tracking, and more intensive oversight of contract-pharmacy arrangements. For CHCs, this is not just a back-office nuisance. It means diverting already-limited staff time and resources away from patient care and into a complicated manufacturer-driven administrative process. Third, CHCs would face direct financial losses beyond financing costs. A rebate model threatens the loss of sub-ceiling discounts, prompt-pay discounts, volume-based pricing benefits, cost-of-goods-sold discounts, and other efficiencies that help make current purchasing workable. It also creates unresolved questions around expired, damaged, or otherwise undispensed units that arise in the ordinary course of responsible pharmacy operations. If those units are excluded from rebate treatment, CHCs would be forced to absorb full acquisition cost despite complying with normal pharmacy standards. Indianas recent debates over efforts to capture additional governmental value tied to 340B-referenced claims are instructive here. Time and again, the headline governmental savings can look larger on paper than they are in practice, while the local loss to CHCs is immediate and real. When health centers lose flexible 340B resources, Indiana communities lose those dollars in full. The government, by contrast, often does not retain every gross dollar once financing rules and program mechanics are taken into account. That mismatch is one reason policymakers should be extremely cautious about replacing upfront discounts with delayed rebates. C. These burdens would reduce access, reduce services, and harm patients. When 340B savings decline, CHCs have fewer resources to deploy locally. That means fewer dollars available to subsidize medications, fewer resources to support enabling services, and less room to absorb the costs of caring for patients with complex medical, behavioral health, and social needs. The most immediate patient impact is on affordability. If CHCs must buy at much higher upfront prices, take on financing costs, and live with uncertainty over rebate timing and denials, they will have less ability to discount medications deeply enough for low-income patients. Some centers and some contract-pharmacy arrangements may determine that the financial exposure is too great for certain drugs and may stop offering those drugs through 340B channels altogether. That would be particularly damaging for CHCs because they rely more heavily than many other covered entities on contract pharmacies to make medications accessible in the communities where their patients live. If contract pharmacies carve out rebate-model drugs, or if CHCs cannot safely carry the working-capital burden, patient access will narrow quickly. The downstream consequences are predictable: delayed starts on therapy, lower adherence, worsening chronic disease management, more avoidable complications, and more costly downstream utilization. These are not speculative concerns. They follow directly from making essential medications harder to access and less affordable for medically underserved patients. This would also come at a particularly difficult moment. CHCs have already had to absorb significant pressure from contract-pharmacy restrictions, declining savings on some drugs, workforce constraints, and years of operating strain. A rebate model would not land on a financially neutral system. It would hit a system that has already been asked to do more with less. D. CHCs should be categorically exempted from any rebate model. IPHCA strongly urges HRSA not to impose a mandatory rebate model on any covered entities. But if HRSA decides to proceed, CHCs should be categorically exempted. CHCs are uniquely vulnerable for several reasons. First, the drugs most likely to be swept into this type of framework are often drugs that are commonly dispensed in ambulatory, community-based settings. That means the model can hit CHCs particularly hard. Second, CHCs are highly dependent on contract pharmacies relative to many other covered-entity types, which makes them especially exposed when outside pharmacy partners carve out affected drugs or impose new administrative conditions. Third, CHCs generally do not have the balance sheets, reserves, or borrowing capacity needed to absorb large new working-capital requirements and manufacturer-payment risk. There is also a strong policy reason to exempt CHCs. Health centers use 340B savings in the most direct possible way: to expand access for low-income and underserved patients. Pulling those dollars out of CHCs does not simply change accounting treatment. It reduces local care capacity. In Indiana, that means fewer resources reaching rural towns, small cities, and urban neighborhoods where the safety net is already stretched. E. If HRSA allows manufacturers to apply a rebate model to CHCs, it must require robust, uniform protections. If HRSA nevertheless allows manufacturers to apply a rebate model to CHCs, the standards governing approval of manufacturer plans should include, at minimum, the following protections: 1. Advance funding sufficient to prevent routine cash-flow harm. For each rebate-model drug, manufacturers should be required to advance enough rebate value to cover the greater of two full package sizes or approximately two months of a CHCs typical dispensing volume for that drug. Without this protection, cash-flow strain is built into the model. 2. Full, prompt, and transparent reimbursement of all implementation costs. Manufacturers should be required to reimburse CHCs for all reasonable costs caused by the rebate model, including information-technology changes, pharmacy operations, finance staff time, contract-pharmacy management, dispute resolution, borrowing costs, and other administrative expenses. Reimbursement should be monthly, standardized, and auditable. 3. Rebates at the unit level. Unit-level rebate processing is essential to reduce working-capital exposure and speed reimbursement, particularly for drugs sold in multi-unit packages. 4. Rebates on a reasonable number of undispensed units. Manufacturer plans should include a practical mechanism for CHCs to receive rebate treatment for expired, damaged, or otherwise undispensed units that arise in the normal course of compliant pharmacy operations. 5. No BIN or PCN requirement where those data are unavailable to the CHC. HRSA should prohibit manufacturer requirements that depend on data elements that CHCs or their contract-pharmacy arrangements may not consistently receive or control. 6. Uniform national administrative rules, deadlines, and appeals processes. HRSA should establish standardized operating rules governing submission timelines, payment deadlines, denials, corrections, dispute resolution, and treatment of transition inventory. CHCs should not be forced to navigate a different rulebook for every manufacturer. 7. Clear protections for contract-pharmacy arrangements. Because CHCs depend heavily on contract pharmacies, manufacturer plans should be approved only if they can be operationalized in contract-pharmacy settings without forcing widespread carve-outs or making participation impracticable. Even with these protections, however, a rebate model would remain inferior to the longstanding upfront-discount structure of the 340B program. F. A neutral claims clearinghouse is the better solution. If HRSAs objective is accurate deduplication and program integrity, a neutral claims clearinghouse is the better approach. It would allow necessary data validation and coordination without requiring CHCs to front vastly higher acquisition costs and wait for manufacturers to reimburse them later. Compared with a rebate model, a neutral clearinghouse would preserve the basic structure of the 340B program, avoid unnecessary borrowing and cash-flow disruption, reduce administrative complexity, lower the risk of disputes and denials, and better protect patient access. It would also avoid forcing safety-net providers to shoulder costs and risks that do not improve care and are not necessary to accomplish HRSAs stated objectives. Conclusion Indianas CHCs stretch 340B resources every day to keep medications affordable and sustain access to care for more than 800,000 Hoosiers. A mandatory rebate model would destabilize that work by shifting financial risk, administrative burden, and working-capital pressure onto the very providers Congress intended to support. HRSA should reject a mandatory rebate model for covered entities and pursue a more practical alternative, such as a neutral claims clearinghouse. At a minimum, if HRSA proceeds further down this path, CHCs should be categorically exempted. Indianas health centers should not be forced to finance a federal policy experiment at the expense of patient access, local care capacity, and community stability. Thank you for the opportunity to comment and for your consideration of the operational realities facing community health centers. Sincerely, Ben Harvey, CEO Indiana Primary Health Care Association
HRSA-2026-0001-2017Hospital and Health System Association of Pennsylvania2026-04-20T04:00Z28,169 chars
On behalf of 235 member hospitals, health systems, and other health care organizations, The Hospital and Healthsystem Association of Pennsylvania (HAP) is grateful for the opportunity to comment on the Health Resources & Services Administrations (HRSA) second request for information on a 340B Rebate Model Pilot Program. Pennsylvanias 340B hospitals are already operating under significant financial and operational strain. The abrupt transition from the current 340B upfront drug discount model to a claims-based rebate model for 10 to 25 drugs, that represent a significant portion of most programs, creates new administrative, staffing, and technical challengeswhile providing manufacturers with unchecked opportunities to delay or deny paymentsthat will put distressed hospitals on the path to closure. HAP echoes the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate model. In particular, we urge HRSA to adopt a third-party clearinghouse, to advance deduplication efforts and to maintain the integrity and mission of the program. Please see the attached letter for a detailed summary of our concerns and recommendations. Thank you. April 20, 2026 Thomas J. Engels Administrator Health Resources & Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of 235 member hospitals, health systems, and other health care organizations, The Hospital and Healthsystem Association of Pennsylvania (HAP) is grateful for the opportunity to comment on the Health Resources & Services Administrations (HRSA) second request for information on a 340B Rebate Model Pilot Program. In Pennsylvania, 72 hospitals (in 30 counties) participate in the 340B program and serve our most vulnerable populations. About half are in rural areas15 of which also offer critical labor and delivery services. Eighty (80) percent of the states Critical Access Hospitals (CAH) are part of this program. Many 340B hospitals are the lifelines of their community, and the discounts they receive through the 340B program enable these organizations to maintain a broad array of services for their patients. However, these facilities are financially vulnerable. In Pennsylvania, 53 percent of the 340B hospitals operate with a negative margin. For hospitals, access to the savings the 340B program offers is the difference between a positive and a negative operating margin and a deciding factor when they consider what service lines to maintain. According to a report by the Commonwealth Fund, drugs purchased through the 340B program accounted for only 7 percent of the total U.S. drug market. Further, chipping away at the financial viability of hospitals will have negative downstream effects on vulnerable patients. 340B hospitals use the savings they receive on the discounted drugs to reinvest in programs that enhance patient services and access to care, as well as provide free or reduced-price prescription drugs. Some examples of things that Pennsylvania 340B hospitals are doing with the savings include: Providing financial assistance to patients unable to afford their prescriptions. Providing clinical pharmacy services, such as disease management programs or medication therapy management. Funding other medical services, such as obstetrics, diabetes education, oncology services, and other ambulatory services. Administrator Engels April 20, 2026 Page 2 Funding behavioral health services and substance abuse treatment programs. Establishing additional outpatient clinics to improve access. Creating new community outreach programs that address housing instability and food insecurity. Offering free vaccinations for vulnerable populations. Pennsylvanias 340B hospitals are already operating under significant financial and operational strain. The abrupt transition from the current 340B upfront drug discount model to a claims-based rebate model for 10 to 25 drugs, that represent a significant portion of most programs, creates new administrative, staffing, and technical challengeswhile providing manufacturers with unchecked opportunities to delay or deny paymentsthat will put distressed hospitals on the path to closure. HAP echoes the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate model. In particular, we urge HRSA to adopt a third-party clearinghouse, to advance deduplication efforts and to maintain the integrity and mission of the program. COSTS TO COVERED ENTITIES Current Administrative Costs Under the Upfront 340B Discount There are a number of administrative costs that covered entities (CE) incur under the current upfront discount model. Hospitals invest significant resources in 340B program oversight and compliance, ensuring policies are maintained, and diversion prevention controls are consistently monitored. Additional efforts to ensure duplicate discount prevention, including separate Medicaid workflows, are also in place and require consistent monitoring. Hospitals invest resources in maintaining audit readiness and data integrity and consistently conduct self-audits and internal sampling to ensure continued compliance. Significant investments in revenue cycle coordination are required, including eligibility workflows that support compliance with the definition of patient, as well as systems for split-billing and general oversight and reconciliation of the programs financial aspects. Many CEs use third-party administrator services (TPA) to help with oversight of contract pharmacy services requiring additional financial and administrative resources. Every 340B program is different and hospitals in Pennsylvania use different strategies to maintain the integrity of their programs. Generally, some rely on in-house staff dedicated to 340B operations for: contract pharmacy oversight; eligibility review and reconciliation; and compliance and audit support driving staffing costs. Other hospitals rely more heavily on TPAs, consultants, and external audit supports driving contracting costs. All programs require significant information technology (IT) support, a scarce Administrator Engels April 20, 2026 Page 3 resource regardless of the size of the hospital or health system, to build and monitor several IT systems and interfaces to support billing systems, pharmacy dispensing, wholesaler purchasing, and contract pharmacy arrangementthe cost of which may also vary based on the nature of the programs used and contract negotiation. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Hospitals participating in the 340B program designed their programs and operations around an upfront discount model. A shift to a rebate model demands new resources, imposing considerable additional costs and burdens on our institutions that go far above and beyond what we had expected and what we are experiencing now. Hospitals would see material start-up costs tied to building rebate submission workflows as the program requires coordination from multiple departments within the hospital including IT, pharmacy, finance, legal, and administration. Our members report that in the months leading up to the initial implementation date of January 1, hundreds of hours were spent mapping out the departmental changes that would need to be put into place to accommodate the pilot program. Many of the covered entities in our state still had not identified pathways for full compliance with the new data requirements nor had they identified pathways for successful claim submission when the pilot was suspended. Additional start-up investments would need to be made to build IT systems to support the claims data element requirements, establish secure transmission, and ensure integration with manufacturer platforms. New accounting and finance workflows would need to be mapped out to handle receivables, and reconciliation. There would be start- up costs tied to staff training, legal review of data sharing terms, privacy protections, and contract amendments with TPAs, contract pharmacies, and wholesalers. Covered entities in Pennsylvania worked with TPAs for months to prepare for the rebate model proposed last year and by December, were still not ready to comply with the proposed program requirements. These TPAs would have had to submit claims manually, far from the automated process advertised by the agency. In addition to the start-up costs, covered entities expect ongoing costs that will reduce savings in perpetuity. The transition to a claims-based rebate model requires continuous claim creation and submission for eligible drugs. Payment timelines will need to be monitored against the 10-day requirement and outstanding receivables will need to be tracked. New processes for denial intake, documentation review, and appeals or dispute resolution will be established, the cost of which will be ongoing. Our hospitals are also expecting additional workflows for the Medicare Drug Price Negotiation Administrator Engels April 20, 2026 Page 4 Program/Maximum Fair Price related rebate submissions and interactions with Medicare reporting requirements. Agreements with wholesalers are built around the existing 340B model and will take time to renegotiate. Current agreements are structured based on purchasing patterns with very limited or no discounts on Wholesale Acquisition Cost (WAC) drug purchases. With the migration of the 340B program to a rebate model, covered entities are not given enough time to restructure these agreements, leaving them not only with cash float issues, but underlying cost increases due to increased 340B drug purchasing expenses by not realizing any wholesale distributor cost discounts on WAC accounts. A runway of at least three years should be provided to restructure these agreements in a way to hold health systems harmless from the abrupt shift. Special consideration must be given for certain types of claims that will further add to the administrative burden imposed on covered entities. For example, claims for patients paying cash and claims that will be covered by the hospitals charity care program are not transmitted in the National Council for Prescription Drug Programs claim format (the industry standard for pharmacy claim transactions), or to a switch provider (an intermediary that connects pharmacies to Pharmacy Benefit Managers and insurers for insurance adjudication). Instead, unique claims submission processes or custom business rules will need to be created and put into place. These custom business rules would have to be set up for each individual pharmacy and pharmacy billing system. There is a significant risk that these claims will be denied because of the complexity tied to setting up custom business rules to supply the required data elements to meet the claims submission requirement. The irony is, the claims for patients most impacted, are the same patients the program was created to assist. The agency must also consider the cost of essentially running two 340B programs at the same time. Covered entities will have to manage a rebate model for the piloted drugs but sustain the traditional 340B program upfront pricing model for the rest. Our member hospitals will continue to conduct all the operational activities described above to maintain compliance with the current 340B program and then must implement separate processes for drugs purchased under the rebate model, thereby doubling the resources required to maintain billing and compliance functions, and further eroding the savings derived from the program. While the agency indicates that the pilot program would be limited to 10 or even 25 medications, those parameters are misleading and dont capture the fact that just 10 drugs represent hundreds of national drug codes that vary based on strength, dosage, and form. HRSA must give covered entities, who have relied for years on upfront discount mechanisms, priority so they can stretch their/those resources. Administrator Engels April 20, 2026 Page 5 There are potential unintended consequences of implementing a rebate model that the agency has not yet contemplated, including potential implications to the cost to the Medicaid program, including programs like the AIDS Drug Assistance Program. In certain pharmacy provider participation agreements, pharmacies are required to report Actual Acquisition Cost (AAC) on claims and are subsequently reimbursed according to the AAC. Under a rebate model, the AAC would change from the 340B price to the WAC price; thereby significantly increasing the expense to the plan with unknown impacts to the level of benefits that those programs will be able to continue to offer. Further complicating the issue is the uncertainty providers face in what to populate in AAC in a shift to a rebate model. If providers and pharmacies are to report 340B costs in that field, they are only able to do so if a rebate is received, which means there will be significant resources required to submit those transactions. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program The transition to a rebate model will, without a doubt, require additional full-time employees and staff hours to manage. The nature of the additional full-time equivalents (FTE) required will vary based on the size of the 340B program and the volume of rebate requests that would have to be submitted. Our rural hospitals and small community hospitals report that they would need at least one additional FTE to manage data sets and ensure that newly required data elements have accurately been incorporated into claims. The same small to medium-sized hospitals report that an additional FTE would be required for rebate reconciliation, ensuring that rebates are not inappropriately denied and that payments matched eligible purchases made at wholesale acquisition cost price points. Some covered entities choose to hire outside vendors to manage data, handle inquiries from manufacturers, and oversee reconciliation; but the service comes at a significant cost and ultimately diminishes the savings achieved through the program and intended to be reinvested into patient care. Depending on the rates of rebate request denials, additional FTEs may be needed to perform dispute management. HRSA estimated that it would only take two hours per week to comply with the rebate models program requirements, but our covered entities have not found this to be true and question the basis for this projection. The complexity of the data elements needed to comply with IT platforms (like Beacons) user requirements and the rebate models data standards are immense. It will take a considerable amount of additional time for covered entities to prepare data, validate it, ensure that it is transmitted in a timely manner, confirm receipt, and reconcile payment. Some of the data elements will require manual chart review and manipulation to complete order sets. Small rural organizations estimate that a minimum of 40 hours a week would be required to manage the data alone, not to mention reconciliation of rebates and purchases. Administrator Engels April 20, 2026 Page 6 The agency also needs to account for time spent by covered entities on questions and requests for information from individual manufacturers (either the 10 manufacturers initially identified or more if the pilot program were to expand to additional drugs) and those from an IT platform (like Beacon) to validate documentation. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program The programmatic and infrastructure changes required to transition to a claims-based rebate model and electronic data submission is incredibly complex. Covered entities will need to construct new internal programs that can compile the required data elements. Modifications need to be made to billing systems to support extraction of rebate-eligible claims. Current electronic health record systems need to be integrated in new ways with pharmacy systems and claims adjudication feeds to support the new programs. IT infrastructure changes will be needed to move the required information to manufacturers platforms, including secure transmission tools tailored to file the transfer requirements. After all these changes are put into place, testing will be needed to ensure the integrity of the IT platform and its ability to communicate with the technology and programs constructed by covered entities. The cost associated with these changes will scale, based on the volume of eligible claims, but the impact will be significant regardless of the size of the program. Several vendors have already emerged into this space offering to help covered entities navigate the additional burdens that they would face under a rebate model. Vendors offer to help manage data elements, ensure proper formatting, validate the completeness of data sets, and reconcile data submission and response from the IT platform to maximize lost rebates. A service of this nature would have cost $20,000 $30,000 for a small rural health systemmoney that is not currently spent on an up- front pricing model. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES The very factors that impact a hospitals eligibility to participate in the 340B program (caring for high volumes of Medicaid patients) also increase sensitivity to cash flow disruptions and administrative costs. Since more than 50 percent of Pennsylvanias 340B hospitals operate at a negative margin, many programs will be unable to float the WAC price while they wait for rebates and will ultimately have to scale back the program. Patients access to medication will be directly impacted. Administrator Engels April 20, 2026 Page 7 Covered entities also remain concerned by the agencys indication that the rebate model will expand to additional drugs in short order. The more drugs that fall under the rebate model, the greater the risk to 340B programs and to patient access. A report by 340B Health indicates that if the 340B program were to fully convert to a rebate model, an average size disproportionate share hospital (DSH) would, on average, float drug manufacturers $72.2 million dollars per year. For DSH hospitals with more than 487 beds, that average annual float cost would likely be closer to $208 million. Costs of this magnitude will not only require hospitals to scale back charitable programs for patients, but will jeopardize their ability to offer specialty service lines and, in some cases, their ability to remain open. HRSA indicates in its proposal that approved rebate requests will be paid in 10 days. However, covered entities remain doubtful that manufacturers and any organization acting on their behalf will be able to meet that timeline. We have seen this process play out already under the Maximum Fair Price program. Our member hospitals report that refunds that are invoiced very quickly by the wholesaler for the applicable products are taking weeks (six or more) to be issued. There is no reason to believe that rebate requests would move more quickly. The impact of these delays would be exacerbated even further under the rebate model as covered entities would be required to buy the drugs at much higher prices than a group purchasing organization or retail prices, floating a loan to the drug manufacturers and hoping for rebates. Several 340B hospitals in Pennsylvania, particularly rural hospitals, have negotiated prompt pay discounts with manufacturers or wholesalers. Under these arrangements, hospitals payments are made to manufacturers or wholesalers on a weekly basis. Thus, invoices would be payable prior to receiving a rebate, even if they were promptly paid within 10 days. It will not be feasible for hospitals to float the funds needed for drug orders, even if temporary. Similarly, the previous guidance indicated that covered entities have 45 days to submit rebate requests. For many of Pennsylvanias smaller 340B hospitals, reaching a full package size within 45 days is unattainable and will delay their access to rebate dollars. Additionally, covered entities report that 45 days is not enough time to reconcile patient visit data and identify any missed opportunities for rebates. Sometimes it takes weeks to find an issue and resolve it, particularly with new programs and processes. Covered entities are concerned they may not be able to solve all administrative errors causing unnecessary and significant financial damagenot to mention that most delays are often in the spirit of maintaining compliance with other program requirements. Administrator Engels April 20, 2026 Page 8 REBATE DENIALS HAP appreciates the safeguards HRSA attempted to put into place under the previous proposal by prohibiting manufacturers from denying rebates based on 340B program non-compliance. However, we remain deeply concerned by the limited protections proposed for covered entities should manufacturers begin to deny rebate requests broadly over de-duplication concerns (that a rebate was already provided for that claim). Once a rebate request is denied, covered entities would have had to move through the administrative dispute resolution (ADR) process and fight for their rebate a process that has not been effective in the surprise billing space. Pennsylvania 340B hospitals are deeply concerned that the ADR process will be costly and burdensome and will further diminish 340B dollarsparticularly since they will have to float the WAC price while the matter is being resolved; and there is no guidance on how to determine which party is entitled to a claim. Based on HRSAs previous guidance, covered entities stand to lose rebates while there are no penalties for manufacturers and little to no incentive for them to participate in the ADR process. The power imbalance embedded in the rebate model proposed by HRSA last year creates opportunities for manufacturers to drive change in other areas they deem to be unfair and put parameters around eligibility requirements that have been debated by Congress for years. Earlier this month, AbbVie filed a new lawsuit challenging the federal governments definition of patients and calling for significant new restrictions on covered entities. Similarly, drug manufacturers issue policy statements with no warning adding new requirements in order for covered entities to access discounted pricing; the most recent of which was a policy announced by Eli Lilly earlier this year. At least four drug companies have followed suit, requiring claims data submission as a condition of accessing 340B pricing. HRSA must create penalties and implement safeguards that address manufacturer non-compliance, regardless of the path forward. Some ways the agency could do this include creating a uniform definition of a complete claim to reduce the number of denials based on incomplete data, centralized submission through a neutral party clearinghouse with automated completeness validation, interest charged on late payments, and requirements for key performance indicators for manufacturers that are publicly available. DATA COLLECTION BY COVERED ENTITIES The rebate model program, as previously proposed, required far more detailed claims level data than what is currently required or maintained under the up-front discount Administrator Engels April 20, 2026 Page 9 model. Complying with the data requirements would have necessitated additional ongoing data collection and processing as hospitals would have had to create rebate submission-ready claim files, track timelines, maintain payment status per claim, and retain any data needed for the dispute resolution process. Data requirements should be minimal and limited to only those elements needed to prevent duplicate discounts. Even if an IT platform like Beacon is working with TPAs directly, maintenance of the data is still a huge burden for covered entities to sustain. TPAs are only as good as the data they collect, how they collect it, and the maintenance of those data feeds, all of which falls on covered entities. This maintenance requires constant work to validate data extracts, and ensure the feeds remain intact and are processing correctly. There is also a huge manual component for some of the data elements required, especially in the medical claims space. 340B PROGRAM INTEGRITY Covered entities have expressed serious concerns regarding their ability to share the required data with drug manufacturers while maintaining compliance with HIPAA laws. Some of the required data elements included in the previous proposal are considered personal health information (PHI) and although the guidance indicates that plans should ensure that the IT platform has mechanisms in place to protect patient identifying information in a manner consistent with HIPAA, covered entities will not be protected in the event of a data breach. Covered entities also have no alternative to using the IT platform if they want to get their rebate. HRSA should consider safe harbor provisions for the duration of any pilot program. The previous guidance also lacked any protection for covered entities from unnecessary and harmful terms and conditions associated with using required IT platforms for rebate request submission. The power imbalance unfairly penalizes covered entities that would have had to either agree to any terms or conditions of using the IT platform or forgo 340B dollars. Similarly, manufacturers would have easily been able to use the data for purposes outside the scope of the program with no recourse. Policy issues that have long been debated in Congress regarding caps on contract pharmacies and the definition of patient could be adjudicated by drug manufacturers in a vacuum. The lack of indemnification and cyber security protection guarantees is concerning and must be evaluated. Last fall, when our member hospitals engaged Beacon in preliminary discussions, they could not get the organization to send the information needed to complete the required security assessments for third-party 340B vendors. Beacon reportedly refused to complete security questionnaires or vendor assessments. They instead were offering covered entities a document listing their security documentation Administrator Engels April 20, 2026 Page 10 for review. It is our understanding that the Beacon document lacked some of the information required to complete a proper assessment. Covered entities need to have access to the information needed to complete security assessments and properly protect the data of their patients. Covered entities in Pennsylvania remain concerned that HRSA has not contested the claims data submission requirements led by Eli Lilly and followed by others earlier this year. Claims data submission requirements aimed at gaining access to pricing achieve the same end goal as a rebate model without the shift to a postpaid rebate and new administrative infrastructure costs. However, if HRSA continues to allow each manufacturer to introduce its own policies and requirements, it creates chaos for covered entities trying to comply with each. HRSA should instead work with manufacturers and covered entities on a neutral third-party clearinghouse to meet the transparency concerns of manufacturers while at the same time minimizing expenses to covered entities. Sincerely, Kate McCale Vice President, Compliance and Regulatory Affairs
HRSA-2026-0001-2018Corewell Health2026-04-20T04:00Z19,752 chars
See attached file(s) 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: Corewell Health appreciates the opportunity to provide comments on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Corewell Health is a Michigan-based nonprofit integrated health system with a team of over 65,000 dedicated people including more than 11,500 physicians and advanced practice providers and more than 15,000 nurses providing care and services in 21 hospitals and over 300 outpatient locations. In addition, as an integrated health system, Corewell Health includes Priority Health, a health plan that insures more than 1.3 million lives in four states. Corewell Health is not only Michigans largest health system but also Michigans largest private employer. Through experience and collaboration, we are reimagining a better model of health and wellness that serves everyone. We submit these comments through the lens of an integrated health system. Overview For reasons explained below, Corewell Health opposes implementation of a rebate model under the 340B program, either partially or entirely in lieu of the upfront discount model that has worked successfully for decades. Any rebate mechanism will impose enormous costs and burdens for Corewell Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs underestimate the infrastructure necessary for covered entities to adopt to comply. We hope that the following information provides a better understanding of the significant resources that covered entities devote to an upfront discount program, and the extreme costs a rebate model demonstration (RMD) would impose on covered entities. We also believe that a RMD is based on the incorrect premise that HRSA must balance the interests of 340B covered entities and drug companies when choosing a discount mechanism. Congressional intent mandates that HRSA must give preference to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 comprehensive services. Preserving the upfront discount mechanism, which Corewell Health and its legacy systems have continuously relied on for years, is the best way to fulfill that purpose of the 340B program. For these reasons, HRSA should abandon any effort to consider a rebate program and rely on what has worked for decades: an upfront discount model. A Potential 340B Rebate Program Imposes Substantial Administrative Costs The RFI poses thirty questions and encourages commenters to include supporting facts, research, and evidence in their responses. The following comments are a best- faith effort to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future RMD will include the ten drugs that HRSA previously approved for its original RMD and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims potentially thousands more to submit, more rebates to track and reconcile, more money we will float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less resources that Corewell Health can spend on patient care and comprehensive health care services. Any rebate program would require Corewell Health to spend significant sums on new administrative costs. Corewell Healths total claim volume is nearly 300,000 claims in the 340B program last year, and a potential RMD would be extremely disruptive given this level of claims. All covered entities in the 340B program understand that they will incur reasonable administrative costs to ensure compliance with the programs requirements. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a rebate mechanism, in which covered entities must bear float costs, demands new resources, imposing considerable additional costs and burdens on us that go far beyond what we had expected, planned for, and experience now as 340B safety- net hospitals. Further, such administrative burdens contradict President Trumps executive order 14192, Unleashing Prosperity Through Deregulation,1 to reduce regulatory burdens as well as positions that President Trump and HRSA took under his first term in office. Notably, HRSA rejected a similar attempt by Eli Lilly to require burdensome and needless data submissions from covered entities during the first Trump term. The creation of MDPNP does not justify a reversal of HRSAs position in violation of the deregulation executive order and the availability of less burdensome and less intrusive policy options. 1 Federal Register: Unleashing Prosperity Through Deregulation 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 A Potential 340B Rebate Program Would Require Additional Capacity to Meet Increased Administrative Burdens In trying to project the potential staffing needs from the RFIs hypothetical RMD, Corewell Health does not have the current staff needed to comply with a Rebate Program. HRSAs estimate of only five hours per week for the proposed RMD does not reflect actual clinical and pharmacy practice. HRSAs estimate should not be based on the number of drugs in the proposed RMD but on the volume of those drugs as dispensed. For many entities, a single drug may be dispensed or administered hundreds or thousands of times across care environments in a single day. CMS selected these 25 drugs for MDPNP because of their cost, utilization, and volumeit was not simply selecting 25 drugs arbitrarily. Thus, a more prolifically utilized drug will scale the work effort in conjunction with that from an auditing and reconciliation of rebate perspective. Covered entities are being continuously asked to supply increasingly more data as a condition of receiving 340B pricing, and these data requests are becoming more intrusive and therefore more labor intensive. For example, both HRSA and drug companies incorrectly assert that the prior RMD would not impose new data-related burdens on 340B safety-net hospitals greater than what is already provided through 340B ESP. We estimate, however, that the effort for these 25 drugs will be far more than five hours a week because the current data submission using 340B ESP takes more time than five hours a week, and the potential new RMD likely will require a far more extensive data submission based on the prior RMD. We conservatively anticipate that at least two full-time employees would be needed to comply with data and process management to support a potential RMD based on the likely volume of drugs in MDPNP, not on the number of drugs. Such an estimate, however, assumes that the claims process works efficiently without delays, follow-up requests for information, or lengthy resolutions over denials; as such, it does not include the potential legal and administrative staff that may be needed for the dispute resolution process as we are unable to anticipate those potential needs. Relatedly, HRSA does not consider the unprecedented data submissions that drug makers are requiring as a condition of 340B pricing for their products. HRSA should prevent drug makers from making such submissions a requirement of utilizing a statutory benefit. Corewell Health, other covered entities, and our associations such as the American Hospital Association have alerted HRSA to recent data submission requirements by Eli Lilly and Novo Nordisk that go beyond what is necessary for compliance with the 340B statute or prevention of duplicate discounts. These drug makers are requiring both pharmacy and medical claims for their entire product line regardless of where the drug is dispensed. HRSA must prohibit such fishing expeditions, particularly if it adds more complexity via the RMD. 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program Like other covered entities, Coverall Health has designed its compliance processes, technological systems, and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our current third-party administrators (TPAs) would require substantial modifications and maintenance to comply with the demands of a potential RMD. Further, submitting medical claims will add even more development necessary to meet the likely requirements of a new RMD as current systems do not have medical claims data adjudicated in real time, meaning recurrent data pulls until claims are settled. Those will be manual queries and manual submissions to meet the standard. We currently interact with multiple TPAs, meaning the impact is multiplied by each TPA to prepare. Moreover, any estimate would presume that HRSA does not make further changes to the RMD after its launch as those changes will require additional internal staff time or external consultants and vendors. Requiring 340B Covered Entities to Float Costs, Causing Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Corewell Health to effectively provide drug companies interest-free loans a float as we await the discounts that we are owed under the 340B statute. Even if HRSA requires the potential RMD to pay within 10 calendar days of data submission, that window will have meaningful impact on our institution and the patients we serve. Moreover, that potential window does not consider denials or requests for additional information that we see with 340B ESP today. In our experience, those delays occur at a high rate and are ultimately data integrity issues, not fundamentally ensuring eligibility of a claim. The potential RMD does not reflect the contractual realities that covered entities have with other parts of the supply chain. We cannot amend our terms without losing discounts and drug pricing we currently contractually hold. We are next day pay with wholesalers and vendors, meaning we will hold the expense from day of purchase until day of rebate. In the prior debate over a RMD, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due, but that would be inaccurate: since we are next day pay, we will not receive the rebate before the invoice is due. Lastly, we request that HRSA ensure that there is transparency, including audits, of drug makers compliance and the likely use of the Beacon system. We will have little insight into how Beacon and drug makers use the data and whether they are 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 complying with its intended use, not for other purposes including marketing. Such secondary uses may run afoul of federal regulations prohibiting drug makers from using patients prescribing practices for marketing. Covered entities will have no recourse if a drug maker refuses to issue a rebate as they will have already purchased the drug at cost from their wholesalers. It is not clear if HRSA has any statutory authority to compel the drug maker to comply, and we would suggest that HRSA work with CMS to develop remedies and penalties for drug makers that fail to comply. HRSA is Jeopardizing Covered Entities Substantial Reliance Interests, Creating Uncertainty and Adverse Impacts on Hospitals Planning and Community Benefits The RFI asks for comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. The mere existence of statutory authority, however, does not imply that an agency willor reasonably mayexercise it in a particular manner given that since its inception, the 340B Program has consistently provided discounts through upfront pricing rather than post-sale rebates. Like all other covered entities, Corewell Health reasonably relied on this history of an upfront-discount model when designing our internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy across multiple administrations. Even the lack of certainty in how HRSA will proceed is creating a financial gap that will have collateral impact on investments and people resources. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism even as a pilot when there are less burdensome and less intrusive means of accomplishing HRSAs purported goal of reducing MDPNP duplicate discounts. In addition to the time and expense necessary to reconfigure our system to be able to comply with a potential RMD in addition to compliance with existing requirements from HRSA and increasingly from drug makers, the RFI underestimates the impact that the float that covered entities will have to endure as well as the uncertainty around arbitrating potential disagreements with drug makers. If the burden of proof is on the covered entity to arbitrate each discount or submission for an undisclosed amount of time, this delay may be a bigger issue than if the rebate is paid timely. Further, HRSA may inadvertently encourage the health sector to move away from certain manufacturers due to the burden of data submission and the risks of a lengthy, complicated dispute resolution process. This 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 may be particularly problematic where the only therapeutic agent for a patient or disease state is produced by a single manufacturer. All of these burdens add costssome anticipated, some unexpectedthat will fall on 340B safety-net hospitals to make up. Unfortunately, that means that covered entities will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients, our community, and the health system as a whole will suffer in concrete ways. Corewell Healths 340B savings are a significant portion of its community benefit and impact.2 HRSA Could Adopt Less Burdensome and Intrusive Means to Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Corewell Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of our patients and the communities we serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a clear legal rationale for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism as well as why more information beyond Medicare claims is necessary. In fact, Corewell Healths experience demonstrates that a potential RMD is not necessary to prevent potential 340B/MDPNP deduplication issues. Products at risk for duplicate discounts can be excluded or blacklisted to prevent duplication from becoming an issue. We have never had duplicate discount findings in our audits. All entities have been audited, some multiple times. External and internal audits of the program specifically for duplicate discount and diversion happen monthly and in totality annually. Additionally, we work closely with our state Medicaid agency to prevent duplicate discounts there, too, using claim modifiers and other less burdensome means. Conclusion 2 https://assets.contentstack.io/v3/assets/blt3055f692fe7bf193/blt5ec3ab7502d7f08f/corewell-health- community-impact-report.pdf, p. 6; see also https://assets.contentstack.io/v3/assets/blt3055f692fe7bf193/bltc017c3b1faca4584/6851be47d10dc043d5 d7f5d2/Final_2024_Community_Health_Impact_Report.pdf. 100 Corewell Drive NW | MC60 | Grand Rapids, MI 49503 26901 Beaumont Boulevard | Southfield, MI 48033 Corewell Health urges HRSA to abandon the rebate concept altogether. As demonstrated above, the costs of any RMD will outweigh any expected benefits that Congress intended for covered entities. Instead, HRSA should embrace a neutral third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must provide covered entities sufficient time to review, evaluate, and comment on the specifics of its new program and any manufacturer-submitted rebate program proposals. For example, HRSA did not allow covered entities sufficient time to review and comment on the prior iteration of the RMD, and it was not clear that such comments were meaningfully considered before HRSA moved forward with the prior iteration. Covered entities had little time to prepare before the initial start date had the initial demonstration gone forward. While we have tried to provide herein the most detailed information possible, we do so without precise knowledge of which drugs will be included in a RMD and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). Failing to permit meaningful comments on the specific features of the demonstration will be a failure of administrative process to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact Oliver Kim, Senior Director, Public Policy, at oliver.kim@corewellhealth.org, if you have questions. Sincerely, Lindsey R. Kelley, PharmD, MS, FASHP SVP, Chief Pharmacy Officer Corewell Health
HRSA-2026-0001-2019Delaware Healthcare Association2026-04-20T04:00Z6,647 chars
Please see attached the Delaware Healthcare Association's comments on the RFI: 340B Rebate Model Pilot Program. 1280 South Governors Avenue, Dover DE 19904 | Phone: 302-674-2853 Brian Frazee President & CEO ChristianaCare Janice E. Nevin, MD, MPH President & CEO DHA Board Chair Bayhealth Terry Murphy President & CEO DHA Board Vice-Chair TidalHealth Nanticoke Penny Short, MSM, BSN, RN President DHA Board Secretary & Treasurer Beebe Healthcare David A. Tam, MD, MBA President & CEO Saint Francis Hospital Marlow Levy, RN, MBA, FACHE President Nemours Childrens Health Laura Kowal, MPT, JD President Delaware Valley Delaware Healthcare Association Brian W. Frazee President & CEO April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Delaware Healthcare Association, representing Delawares hospitals, health systems and related healthcare organizations, thank you for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. DHA appreciates your interest in promoting the integrity of the 340B program and is committed to working together on this issue, but strongly opposes the implementation of a 340B rebate model. We respectfully request an opportunity to work collaboratively on other program integrity approaches that will not impose significant burden on hospitals and healthcare providers. The 340B program allows safety-net providers, including hospitals, to reduce the price of outpatient pharmaceuticals for patients and expand health services to the patients and communities they serve. Delaware hospitals use 340B savings to help provide a range of services that benefit the underserved in Delaware including charity care, free health screenings, programs to address food insecurity, transportation to help patients get to needed medical appointments, and more. In FY24, the $85.3 million in savings Delaware hospitals realized through the 340B program powered more than $833 million in community benefit and health investments across the state. Moving from the current 340B upfront discount model to a rebate model mechanism would impose significant financial costs and administrative burdens on safety-net hospitals. This additional burden would be felt acutely in Delaware as all of Delawares general acute care and pediatric hospitals are nonprofits and operate on very thin margins. In FY22, 50% of Delaware hospitals operated at a loss. In FY23, five out of six of our acute care hospital members were operating at a loss, resulting in a statewide hospital operating margin of -2.6%. We have seen a slight improvement in FY24, the most recent DHA data collection year, with the statewide operating margin averaging just a modest 2.45%. 1280 South Governors Avenue, Dover DE 19904 | Phone: 302-674-2853 At the same time, Delaware hospitals are experiencing significant growth in the expenses particularly pharmaceutical drug costs incurred to care for their patients and communities. A recent DHA survey of hospital members highlights that between FY20 and FY24, pharmaceutical expenses increased 54%, supply expenses increased 42%, and labor expenses climbed 30%. Hospitals must cover all of these expenses in order to keep their doors open 24/7/365 and still care for all including those without health insurance. At the same time, reimbursement for care fails to keep pace with these increases let alone inflation. As the cost of drugs continues to rise, the 340B program is more important now than ever before. With rising expenses and thin margins creating challenges for hospitals, now is not the time to impose a 340B rebate model that will require hospitals to hire additional staff, support, and implement new systems to successfully navigate. Even a so-called limited rebate model could put the program out of reach for some of our hospitals, jeopardizing access to these drugs. Preserving the 340B programs current up-front discount model is critical to maintaining access to the program for Delawares safety-net hospitals and the patients and communities they serve. Promoting integrity of the 340B program is an important goal that should be pursued through means other than a rebate model. Transparency is a key to trust in health care, and we are committed to working transparently with our partners for the common good of quality, accessible and affordable care. Delaware hospitals are supportive of transparency in the 340B program. Delaware hospitals that participate in the 340B program are currently subject to oversight and must meet program integrity requirements. They must recertify annually their eligibility to participate in the program and attest to meeting all the program requirements. This includes participating in audits and maintaining auditable records and inventories of all 340B and non-340B prescription drugs. In addition, nonprofit hospitals report on their investments in programs and services that benefit the community through the IRS tax form 990. Delaware hospitals are already subject to various 340B program integrity requirements and we are committed to working collaboratively on additional approaches other than rebate models that further enhance transparency without creating undue burden on healthcare providers. One potential option we respectfully submit for consideration is the adoption of a third- party clearinghouse to advance 340B/MDPNP deduplication and program integrity. Thank you again for the opportunity to provide comments on the Request 1280 South Governors Avenue, Dover DE 19904 | Phone: 302-674-2853 for Information: 340B Rebate Model Pilot Program. On behalf of Delawares hospitals and health systems, we strongly oppose moving to a 340B rebate model due to the significant costs associated with this mechanism. We look forward to working with HRSA on approaches other than a rebate model to promote 340B program integrity. Sincerely, Brian Frazee President & CEO Delaware Healthcare Association
HRSA-2026-0001-2020Sanofi2026-04-20T04:00Z46,915 chars
Please find attached, Sanofi's Response to HRSA's Request for Information: 340B Rebate Model Pilot Program 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 1 of 13 April 20, 2026 VIA ELECTRONIC FILING http://www.regulations.gov Mr. Thomas J. Engles, Administrator Ms. Chantelle Britton, Director Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane, Mail Stop 10W29 Rockville, Maryland 20857 Re: FR Doc-2026-03042, HRSA-2026-0001-0001; Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels and Director Britton: On behalf of Sanofi, thank you for the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information on the 340B Rebate Model Pilot Program, and specifically to address whether and how HRSA should implement a rebate- based approach. Sanofi strongly supports HRSAs interest in testing rebate-based approaches as a potential path to strengthen 340B Program integrity. Rebate models would bring much needed transparency to the 340B Program and help prevent the statutorily prohibited conduct of duplicate discounting and diversion. Because HRSA is interested in testing a rebate model before supporting the models broader implementation, HRSA should move forward with the Pilot Program. The Pilot Program, however, would benefit from some modifications to the structure that HRSA has recently proposed.1 First, the Pilot Program is overly restrictive as to the manufacturers that can participate. That group is currently limited to manufacturers of drugs included on the Centers for Medicare and Medicaid (CMS) Medicare Drug Price Negotiation Program (MDPNP) Selected Drug List for 2026 and 2027. However, well- documented problems of duplicate discounting and diversion are by no means limited to those drugs, and an overly narrow Pilot Program risks yielding results that cannot be generalized to other manufacturers. Other manufacturers including Sanofi should be permitted to apply for and participate in the Pilot Program. Second, manufacturers participating in the Pilot Program should be allowed to use limited health care encounter data to verify that those receiving drugs dispensed in connection with a 340B claim are in fact patients of the relevant covered entity, as the 340B statute requires. This validation can easily be accomplished in connection with a rebate model and would provide an efficient means of identifying - and preventing - diversion of 340B drugs to ineligible patients. Sanofi has developed a rebate model that incorporates the use of health care encounter data and thus provides a ready template for the Pilot Program. Below we explain Sanofis perspective on these issues. 1 Health Resources and Services Administration (HRSA), Request for Information: 340B Rebate Model Pilot Program, 9 Fed. Reg. 7287 at 7288, Feb. 17, 2026. HRSA Proposed Information Collection Request Notice, 91 Fed. Reg. 9632, Feb. 26, 2026. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 2 of 13 Sanofis Perspective on the 340B Program Sanofi is a research and development-driven, AI-powered healthcare biopharma company committed to improving lives through innovative medicines and vaccines. Sanofi brings together world-class research and development in the pursuit of leading health care solutions that serve major therapeutic areas including vaccines, diabetes, chronic disease, multiple sclerosis, cardiovascular disease, oncology, rare diseases, immunology, and hemophilia. We are committed to taking the lead on breakthrough science and striving to go further and faster for patients with innovative and effective treatments that change peoples lives. We support critical safety net programs and deliver our own patient support programs to lower eligible patient out-of-pocket costs. We know our commitment to improving peoples lives only matters if paired with access and affordability to the medicines that people need. Consistent with this patient-focused perspective, we support the original intent of the 340B Program: to help low-income and uninsured patients receive better and more affordable healthcare at safety net hospitals and health clinics that serve a disproportionate number of these patients. However, today, the 340B Program does not operate with this original intent. Extensive evidence amassed by experts and government oversight entities shows that abuse and manipulation of the 340B Program has led to increased costs and waste of taxpayer dollars without benefiting vulnerable patients. As Sanofi has previously indicated, a rebate model can directly address these long- standing, costly program integrity issues by enabling claims-level verification to reduce duplicate discounts and diversion while improving transparency. This approach would provide HRSA with close-to-real time data needed to strengthen oversight beyond what is currently feasible. While not a cure-all for the problematic financial incentives in the current operation of the 340B Program, implementing a rebate model is a key step towards modernizing and reforming a program that is on track to becoming the largest federal drug program by 2027.2 The 340B Programs Current Scale and Skewed Financial Incentives HRSA reports that the current scale of the 340B Program is substantial, with approximately 14,000 covered entities accounting for $81.4 billion in outpatient drug purchases in 2024.3 In September 2025, the Congressional Budget Office (CBO) confirmed that 340B purchases have grown rapidly over time and that participating covered entities receive reimbursements from payers that far exceed the 340B discounted price. CBO notes, participating [340B] facilities generate net revenue when a drug purchased at the 340B discounted price is sold to a patient who has commercial insurance, Medicare, or a Medicaid managed care plan that reimburses the facility at a higher rate.4 While the CBO assessment of the 340B Program is fairly recent, numerous government reports throughout the years have documented how the 340B Program increases both drug utilization and skews prescribing behavior towards higher reimbursed drugs. A 2015 Government Accountability Office (GAO) report found substantially higher Medicare Part B drug spending at 340B hospitals compared to non-340B hospitals, noting that there is 2 BRG, 340B Program at a Glance: 2025, https://media.thinkbrg.com/wp-content/uploads/2025/02/19075246/340B- Program-at-a-Glance-2025_F.pdf. 3 Health Resources and Services Administration (HRSA), Request for Information: 340B Rebate Model Pilot Program, 9 Fed. Reg. 7287 at 7288, Feb. 17, 2026. 4 Congressional Budget Office, Growth in the 340B Drug Pricing Program, Sept. 2025, https://www.cbo.gov/publication/61730. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 3 of 13 a financial incentive at hospitals participating in the 340B program to prescribe more drugs or more expensive drugs.5 In addition to the negative implications for the Medicare trust funds, GAO noted how Medicare beneficiaries would be financially liable for larger cost- sharing obligations as a result of receiving more or more expensive drugs. GAO also raised concerns about the appropriateness of the health care provided by covered entities in connection with 340B prescriptions.6 Similarly, in a study published in the New England Journal of Medicine, researchers found that eligible 340B hospitals significantly increased the administration of higher reimbursed drugs as compared to ineligible hospitals: 90% more in cancer care and 177% more in eye care.7 In addition, researchers found no evidence that these types of 340B hospitals, which received higher Medicare and Medicaid reimbursement, used 340B savings to expand safety-net care, contrary to the goals of the Program.8 Sanofis own experience confirms these findings: demand for products under the 340B Program significantly outpaces national demand across payor types.9 One large health system increased its 340B purchases of Sanofi products by 6,600% year-over-year, while many other 340B hospitals increased purchases by more than 200 percent.10 As noted above, the 340B margin leads to both greater utilization and prescribing of higher reimbursed drugs compared to lower reimbursed alternatives. This translates to Medicare and commercial health insurers as well as employers paying more in higher claims. When spending on health care costs rise, premiums generally rise as well in order to cover those costs. One recent study from the National Bureau of Economic Research (NBER) found that increased health spending is passed through on a dollar-to-dollar basis into employer- sponsored premiums.11 In addition, it has been well-documented that the 340B margin encourages hospitals to acquire physician practices and offices to qualify them as part of the 340B hospital (referred to as hospital child sites.).12 This practice increases 340B purchases in two ways. First, this consolidation allows an acquired physician practice to be eligible for drugs under the 340B Program. Growth in 340B child sites has been a major driver of 340B Program expansion and utilization. One study found that hospital child sites grew from just over 7,000 in 2013 to more than 34,000 in 2023 and were disproportionately located 5 Government Accounting Office, Medicare Part B Drugs, Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals, GAO-15-442, June 2015, https://www.gao.gov/products/gao-15-442. 6 Id. 7 S. Desai and M. McWilliams, Consequences of the 340B Drug Pricing Program, N Engl J Med 2018;378:539-548, DOI:10.1056/NEJMsa1706475, https://www.nejm.org/doi/full/10.1056/NEJMsa1706475. This study focused on Disproportionate Share Hospitals which receive higher reimbursement from Medicare and Medicaid for treating a higher volume of lower-income patients to offset that care. DSHs are also eligible to participate in the 340B Program and currently account for the most 340B purchases in 2024, approximately $64B of the $81B. 8 Id. See also, MedPAC, Report to the Congress: Medicare Payment Policy, March 2020, https://www.medpac.gov/document/http-www-medpac-gov-docs-default-source-reports-mar20_entirereport_sec-pdf, which found at the request of Congress, that 340B discounts create incentives for hospitals to choose higher reimbursed drugs and influence prescribing behavior. 9 Sanofi Pricing Principles, A Closer Look at 340B, 340B-Issue Brief 2026, Sanofi-Policy-Perspective-2026-A-Closer-Look-at- 340B.pdf. 10 Id. 11 Z. Brot-Goldberg, et.al, Who Pays for Rising Health Care Prices? Evidence From Hospital Mergers, National Bureau of Economic Research, Working Paper 32613, June 2024, Revised Dec. 2024, https://www.nber.org/papers/w32613. 12 See Congressional Budget Office, Growth in the 340B Drug Pricing Program, Sept. 2025, https://www.cbo.gov/publication/61730. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 4 of 13 in higher-income, better-insured areas.13 Second, vertical integration allows 340B hospitals to receive a higher reimbursement for health care services compared to physicians offices or ambulatory surgical centers. According to a Blue Cross Blue Shield study, the price of receiving care for common medical procedures at a hospital outpatient department is consistently higher than at a physicians office or an unaffiliated ambulatory surgical center; for example, clinical visits cost 31% more and cataract surgery costs 56% more in a hospital outpatient department.14 Expanding 340B hospital participation through child sites drives significant cost increases. For example, one study found that this type of expansion of 340B participation from 2017 to 2023 tripled 340B hospital purchases from $20 billion to over $60 billion, accounted for approximately 8% of the total increase in employer sponsored insurance, and translated to an estimated $137 more annually for individual insurance coverage and $415 more for family coverage.15 Persistent Program Integrity Issues Plague the 340B Program Given the 340B Programs significant scale and impact on our healthcare system, reform is needed. Program integrity issues inclusive of statutorily prohibited duplicate discounts and diversion are persistent compliance risks embedded in the current 340B Program structure. Various reports from GAO and the HHS Office of the Inspector General (OIG) over the years have repeatedly found evidence of both duplicate discounts and diversion, underscoring the need for more comprehensive oversight.16 As such, policymakers and oversight bodies alike have increasingly called for 340B reform, citing concerns about unchecked growth, weak accountability, and longstanding integrity risks.17 Under the 340B statute and HRSA guidance, covered entities are prohibited from submitting a claim for a 340B drug to Medicaid in a manner that triggers a Medicaid rebate.18 In spite of this clear statutory prohibition, duplicate discounts have plagued both programs for decades: an estimated 3% to 5% of Medicaid drug rebates, or $1.7 to $2.9 13 N. Masia, Income, health, and racial gaps between 340B hospitals, child sites, and nearby neighborhood, Health Affairs Scholar, Vol. 3, Issue 7, July 2024, https://doi.org/10.1093/haschl/qxaf121. 14 Costs for Common Health Care Procedures Significantly Higher When Performed in Hospital Outpatient Departments | Blue Cross Blue Shield, Sept. 14, 2023, See also, Blue Health Intelligence, Hospital outpatient prices far higher, rising faster than physician sites | Blue Cross Blue Shield. Dec. 2023. 15 N. Masia, et. al. The 340B Drug Purchasing Program and Commercial Insurance Premiums, Health Capital Group White Paper, May 2025, https://www.npcnow.org/sites/default/files/2025- 05/340B%20and%20Employer%20Costs%20White%20Paper.pdf. 16 See GAO, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480, June 2018; GAO, Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement, GAO-11-836. Hearing on Examining HRSAs Oversight of the 340B Drug Pricing Program Before the Subcomm. on Oversight & Investigations of the H. Comm. on Energy & Com., 115th Cong. 5 (2017), Testimony of Erin Bliss, Assistant Inspector Gen. for Evaluation & Inspections, U.S. Dept of Health & Hum. Servs. Off. of Inspector Gen. 17 See Senator Bill Cassidy, M.D., Chair of the Senate Health Education Labor Pensions Com. (119th Congress), Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program, April 2025. Hearing on Examining HRSAs Oversight of the 340B Drug Pricing Program Before the Subcomm. on Oversight & Investigations of the H. Comm. on Energy & Com., 115th Cong. 5 (2017), Testimony of Erin Bliss, Assistant Inspector Gen. for Evaluation & Inspections, U.S. Dept of Health & Hum. Servs. Off. of Inspector Gen. 18 Section 340B(a)(5)(A) of the Public Health Service Act (42 U.S.C. 256b). 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 5 of 13 billion in 2024 Medicaid dollars, are duplicate discounts.19 Analyses by government entities and outside experts demonstrate this abuse of the program is driven by four factors: (1) unreliability of the Medicaid Exclusion File (MEF), (2) stakeholders inability to monitor Medicaid managed care organization (MCO) drug claims; (3) the significant growth in covered entities and contract pharmacies; and (4) inadequate oversight enforcement by HRSA. Since 1993, HRSA has been using one primary means of ensuring duplicate discounts do not occur for covered outpatient drugs provided to Medicaid fee-for-service (FFS) patients -- the MEF.20 The MEF is intended to notify states and manufacturers which drug claims are ineligible for Medicaid rebates by indicating which covered entities are dispensing 340B drugs to Medicaid patients.21 However, the MEF is only as reliable as the data covered entities provide.22 Uneven covered entity participation and disclosure practices have rendered the MEF an ineffective mechanism to appropriately and accurately prevent duplicate discounts. Those covered entities that carve-in, i.e., dispense 340B discounted drugs to Medicaid patients, are required to be listed on the MEF, while those that carve-out must guarantee that Medicaid patients do not receive any 340B discounted drug product.23 Nevertheless, HRSA audits often find misclassifications under the MEF system, which can lead to the payment of duplicate discounts. Monitoring of Medicaid MCOs In 2010, the Affordable Care Act (ACA) extended Medicaid drug rebates to outpatient drugs reimbursed by MCOs, which currently cover about 78% of all Medicaid enrollees.24 This expansion created a new 340B program integrity challenge for HRSA and manufacturers since duplicate discounts could now occur for Medicaid patients in MCOs. Difficulty stems from the fact that HRSA does not utilize a MEF, or any other similar mechanism, to identify claims processed by Medicaid MCOs.25 Even when 340B duplicate discounts are identified in Medicaid MCOs, HRSA does not require covered entities to work with manufacturers to address or repay them.26 19 The 340B Noncompliance Data Gap Leaves Drug Manufacturers in the Dark, Drug Channels Blog, Drug Channels Institute, March 18, 2022. MACPAC, Medicaid Gross Spending and Rebates for Drugs by Delivery System, January 2026, https://www.macpac.gov/wp-content/uploads/2026/01/EXHIBIT-28.-Medicaid-Gross-Spending-and-Rebates-for-Drugs-by- Delivery-System-FY-2024.pdf. 20 Final Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Duplicate Discounts and Rebates on Drug Purchases, 58 Fed. Reg. 34058, June 23, 1993. 340B Medicaid Exclusion File. Health Resources and Services Administration, October 2015, 340B Medicaid Exclusion File | HRSA. 21 Review of the 340B Drug Pricing Program, House Energy and Commerce Committee Report, 2018. https://d1dth6e84htgma.cloudfront.net/legacy/uploads/2018/01/20180110Review_of_the_340B_Drug_Pricing_Program. pdf. 22 340B MEF, HRSA, October 2015, 340B Medicaid Exclusion File | HRSA. 23 The 340B Drug Pricing Program and Medicaid Drug Rebate Program: How They Interact, Issue Brief, Medicaid and CHIP Payment Advisory Commission (MACPAC), May 2018, 340B-Drug-Pricing-Program-and-Medicaid-Drug-Rebate- Program-How-They-Interact.pdf. 24 Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010). Kaiser Family Foundation, Managed Care Tracker, https://www.kff.org/medicaid/state-indicator/total-medicaid-mco- enrollment/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D. 25 340B Drug Discount Program: Agency Oversight Has Improved, But Actions Needed to Address Weaknesses, Testimony before the U.S. Senate Health, Education, Labor, and Pensions Committee, Michelle B. Rosenburg, Director, Health Care, U.S. Government Accountability Office, October 23, 2025, https://www.gao.gov/assets/gao-26-108784.pdf. 26 Id. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 6 of 13 Contract Pharmacy Expansion Also in 2010, HRSA expanded its 340B contract pharmacy guidance to permit covered entities to contract with an unlimited number of contract pharmacies.27 These arrangements have materially expanded the reach and scale of the Program from about 3,000 contract pharmacy arrangements in 2010 to more than 220,000 in 2024.28 Currently, 75 percent of contract pharmacy arrangements with covered entities are with five large pharmacy chains (CVS, Walgreens, Express Scripts, OptumRx, and Walmart).29 This rapid expansion has significantly increased the risk of wasteful and illegal diversion and duplicate discounts while failing to meaningfully improve patient access to drugs. For example, IQVIA recently found no evidence that 340B contract pharmacies meaningfully increase patient access to drugs.30 Nearly all contract pharmacies serve the general public rather than functioning as 340B-only access points (referred to as closed contract pharmacies). IQVIA found that less than 1% of contract pharmacies are closed or operate solely for 340B patients, and the HHS OIG found that most contract pharmacies serve the public, reinforcing that contract pharmacies generally are not limited channels uniquely expanding access for 340B patients.31 This indiscriminate expansion of public access points, combined with the Programs prevailing model of upfront discounts and replenishment (replenishment model), creates an environment rife for waste and abuse. Under the replenishment model, 340B eligibility is ordinarily unknown at the point of sale. A prescription is dispensed from the regular pharmacy inventory first, and only later is matched and adjudicated for 340B eligibility by the covered entity.32 Both the GAO and OIG have acknowledged this dynamic, describing how the complexity of contract pharmacy arrangements makes oversight difficult, in part because the definition of patient eligible to receive 340B discounted drugs and how to apply it is ambiguous,33 which leads to statutorily prohibited duplicate discounts and diversion. 27 See HRSA, Notice Regarding 340B Drug Pricing Program-Contract Pharmacy Services, 75 Fed. Reg. 10272, March 5, 2010. 28 Drug Pricing Channels, Overview of the 340B Drug Pricing Program: 2010 v. 2024, Dec. 15, 2025. See also S. Nikpay, C. McGlave, and J. Bruno. Trends in 340B Drug Pricing Program Contract Growth Among Retail Pharmacies From 2009 to 2022, JAMA Health Forum 2023;4;(8). 29 For 2023, Five For-Profit Retailers and PBMs Dominate an Evolving 340B Contact Pharmacy Market, Drug Channels Institute, July 11, 2023, Drug Channels: EXCLUSIVE: For 2023, Five For-Profit Retailers and PBMs Dominate an Evolving 340B Contract Pharmacy Market. 30 IQVIA, Do 340B Contract Pharmacies Really Increase Access for 340B Patients? (Dec. 30, 2025), https://www.iqvia.com/locations/united-states/library/white-papers/do-340b-contract-pharmacies-really-increase- access-for-340b-patients. 31 Id. See Office of Inspector General, Department of Health and Human Services, Contract Pharmacy Arrangements in the 340B Program, OEI-05-13-00431, Feb. 4, 2014, Contract Pharmacy Arrangements in the 340B Program | Office of Inspector General | Government Oversight | U.S. Department of Health and Human Services. 32 See Majority Staff Report, Senate Committee on Health, Education, Labor, and Pensions, Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program, April 2025, FINAL 340B Majority Staff Report.pdf. 33 Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO Report, June 2018, https://www.gao.gov/products/gao-18-480. Contract Pharmacy Arrangements in the 340B Program, Memorandum to HRSA Administrator Mary Wakefield, Office of Inspector General, February 4, 2014, https://www.govinfo.gov/content/pkg/GOVPUB-HE-PURL-gpo67419/pdf/GOVPUB-HE-PURL-gpo67419.pdf. Examining HRSAs Oversight of the 340B Drug Pricing Program, Testimony before the U.S. House Energy and Commerce Committee, Subcommittee on Oversight and Investigations, Erin Bliss, Assistant Inspector General for the Evaluation and Inspections, Office of Inspector General, July 18, 2017. Testimony before the Committee on U.S. Senate Health, Education, Labor, and Pensions Committee, Michelle B. Rosenburg, Health Care Director, GAO-26-108784, October 23, 2025. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 7 of 13 HRSA Oversight The lack of oversight of covered entities and contract pharmacies compounds these program integrity problems. The ACA authorized HRSA to conduct audits of 340B participants, both covered entities and manufacturers. However, HRSA has limited the number of audits to 200 per year.34 In 2015, 200 audits amounted to 1% of covered entities, with todays number of covered entities that amounts to approximately .33 percent.35 Ninety percent of the covered entity audits are selected randomly, while 10% are targeted because of information given to HRSA by stakeholders (e.g., drug manufacturers).36 Approximately 70% of all audits have resulted in adverse findings.37 Further, since 2015, 68 covered entities have been re-audited and 68% (46) of them were found to still be non-compliant.38 Both the GAO39 and OIG40 have published reports recommending steps and more action to improve oversight given systemic problems in duplicate discounts. In fact, the GAO made a total of 20 recommendations to HRSA to improve its oversight, the agency has implemented five of them.41 It disagreed with six recommendations; this leaves nine recommendations that the agency still has not enacted to improve the integrity of the program.42 These concerns are only augmented now that 340B discounts are also prohibited for drugs subject to inflation rebates and drug price negotiation in Medicare under the IRA. We commend HRSA on its 340B Rebate Model Pilot Program as a positive step forward towards ensuring program integrity and greater transparency, and we believe HRSA should move forward with the Pilot Program. However, as previously noted, we are concerned that the Pilot Program, as currently designed is too narrowly limited to manufacturers with drugs under the MDPNP for 2026 and 2027.43 As numerous government reports and HRSAs own audits found, illegal duplicate discounts and diversion in the 340B Program currently occur in instances far beyond the drugs subject to the MDPNP. In addition, Sanofi urges HRSA to test rebate models that leverage limited health care encounter data, in parallel, to track and prevent illegal duplicate discounts and diversion given this opportunity to address compliance concerns more comprehensively. We therefore encourage HRSA to expand the scope of the Pilot Program, and provide the following recommendations to inform HRSAs standards and procedures for the rebate model Pilot Program, and to answer specific questions in the Request for Information. *** 34 Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010). 35 ADVI. (March 2025). Analysis of HRSA 340B Covered Entity Audits. https://advi.com/insight/advi-analysis-hrsa-340b- covered-entity-audits/ (Accessed: March 27, 2026) 36 Id. 37 Id. 38 Id. 39 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO, January 2020. https://www.gao.gov/products/gao-20-212. 40 State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OIG, June 2016. https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/. 41 340B Drug Discount Program: Agency Oversight Has Improved, But Actions Needed to Address Weaknesses, Testimony before the U.S. Senate Health, Education, Labor, and Pensions Committee, Michelle B. Rosenburg, Director, Health Care, U.S. Government Accountability Office, October 23, 2025, https://www.gao.gov/assets/gao-26-108784.pdf. 42 Id.. 43 See HRSA Proposed Information Collection Request Notice, 91 Fed. Reg. 9632, Feb. 26, 2026. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 8 of 13 Sanofi Recommendations for a Rebate Model Pilot Program Expand the Pilots Scope to Additional Manufacturers. The scope of the Pilot Program should be sufficient to generate representative evidence. The proposed Pilot Programs narrow scope, however, risks producing non-generalizable results. Therefore, HRSA should permit participation beyond the current narrow category of manufacturers with MDPNP drugs and allow participating manufacturers to propose a set of products reflecting where duplicate discounts and diversion risk are most operationally significant. Allow Models to Propose Mechanisms to Track and Prevent Diversion. Sanofi recommends the use of rebate models to address prohibited diversion of 340B drugs to ineligible patients a problem consistently detected by HRSA audits.44 Participating manufacturers could utilize limited health care encounter data to validate that a patient to whom a drug was dispensed for a specific 340B pharmacy claim is an actual patient of the covered entity, as set forth in HRSAs 1996 guidance.45 Sanofis proposed model presumes a patient is 340B-eligible if they have received healthcare services from the covered entity within the past 24 months of the prescription being dispensed and provides covered entities the ability to rebut an ineligibility finding. A patient who has not received healthcare services from the covered entity within 24 months of the prescription being dispensed would be presumptively ineligible. However, our model would allow a covered entity to rebut that presumption. A Pilot Program is an opportunity to test new approaches for increased program integrity. HRSA should consider incorporating similar health care encounter data collection and evaluation as proposed in Sanofis Credit Model in order to best evaluate the success and potential expansion of the Pilot Program. Incorporating combatting diversion as a policy goal would also efficiently provide stakeholders with evidence on how a rebate model could address the 340B Programs twin, explicit compliance concerns duplicate discounts and diversion. This dual focus would strengthen the Pilot Programs efficacy and allow it to test solutions to the compliance issues most frequently highlighted in HRSA audits.46 Sanofi Responses to Request for Information Question 5: Sanofi Efforts to Avoid Duplicate Discounts Avoiding 340B discounts in Medicaid remains operationally difficult because the system still depends on fragmented billing practices, self-reporting, and coordination across multiple parties rather than a uniform claims-level approach.47 To prevent a duplicate discount, states and manufacturers must be able to identify a Medicaid claim with a drug provided at the 340B price, but that information is not consistently visible to manufacturers, including Sanofi. There is currently no requirement to identify a 340B claim 44 As Sanofis Credit Model will provide a credit for the difference between the WAC and 340B price, the Credit Model fits within the structure of the rebate model contemplated by the Pilot Program. See also, see Sanofi v. Dept. of Health and Human Services, Motion for Summary Judgment, Case No. 24-cv-3496, Feb. 2, 2025. 45 Health Resources and Services Administration, Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55156 (Oct. 24, 1996). 46 At a minimum, the pilot could treat the inclusion of diversion as an evaluation component of the pilot. This approach would allow HRSA and stakeholders to test its effectiveness as a viable tool for diversion prevention. We welcome HRSAs feedback as well as the opportunity to work with HRSA on this approach. 47 See Health Management Associates, 340B Duplicate Discounts: Enforcement Inconsistent and Weak Due to Lack of Data Transparency and Despite Federal Prohibition, February 2025, https://www.healthmanagement.com/insights/briefs- reports/340b-duplicate-discounts/. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 9 of 13 as such. The MEF is a limited administrative tool because it does not function as a real- time, claims-level approach against duplicate discounts but instead relies on covered entity self-reporting to be accurate and complete. HRSAs own limited audits have demonstrated that covered entities have repeatedly maintained inaccurate or incomplete entries to the Medicaid Exclusion File.48 Moreover, the MEF only applies to Medicaid fee- for-service, excluding 34 state Medicaid managed care programs.49 Both the GAO and OIG have warned of this major gap in addressing duplicate discounts. HRSA itself has acknowledged this complexity stating, HRSA recognizes that the Medicaid marketplace has grown increasingly complex for 340B stakeholders (state Medicaid agencies, covered entities, and manufacturers), posing challenges for duplicate discount prevention.50 For Sanofi, our experience with identifying 340B claims to avoid duplicate discounts reflects the complexity that HRSA acknowledges. Our practices and procedures prior to January 1, 2026, and currently entail reviewing State Medicaid Claim Level Detail (CLD) quarterly through a systematic validation approach to identify 340B claims. Claims that fail validation are formally disputed with states. However, Sanofi faces persistent challenges in consistently obtaining CLD due to significant variation in how states make the data available and the varying formats in which states provide CLD. Some states provide CLD through online portals, while others transmit the information manually via emails, resulting in inconsistencies, delays, and administrative burden. Establishing a standardized format that all states follow would significantly improve our ability to process and utilize CLD effectively to avoid duplicate discounts. Delayed, incomplete, or absent CLD impedes our ability to identify 340B discounts. Moreover, since there is no requirement to include a 340B claims identifier, covered entities often fail to include an appropriate identifier to designate a Medicaid claim as 340B. Furthermore, manufacturer-identified issues with Medicaid claims frequently stall and are left unresolved, as state agencies often do not engage in the reconciliation process. These dynamics significantly undermine the integrity of current mechanisms intended to avoid duplicate discounts. Sanofi does not currently have a drug subject to the Medicare Drug Price Negotiation Program (MDPNP) for 2026 or 2027, and therefore has not implemented MFP-specific operational changes since January 1, 2026. However, Sanofi supports HRSAs objective of using a Pilot Program to improve coordination with other federal programs including the MDPNP, as a necessary program integrity tool. Sanofi believes the data elements outlined in Appendix A are the minimum necessary to determine whether a claim implicates another rebate obligation and to prevent diversion. We note that the inclusion of purchase data is necessary to validate 340B drug purchases and acquisition costs. For example, we have experienced some covered entities significantly increasing the purchase of Sanofi products and re-distributing to their affiliated pharmacies. Furthermore, the proposed health care encounter data elements in Appendix A are consistent with data elements that third party administrators already use 48 See HRSA, Program Integrity: FY20 Audit Results, Program Integrity: FY20 Audit Results | HRSA. 49 HRSA, Clarification on Use of the Medicaid Exclusion File, Dec. 12, 2014, https://www.hrsa.gov/sites/default/files/hrsa/opa/clarification-medicaid-exclusion.pdf. See E. Williams, 5 Key Facts about Medicaid Prescription Drugs, Kaiser Family Foundation, March 24, 2026, https://www.kff.org/medicaid/5-key-facts-about- medicaid-prescription-drugs/. 50 HRSA, Office of Pharmacy Affairs Update, 340B Medicaid Exclusion File, Oct. 2015, https://www.hrsa.gov/opa/updates/2015-october. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 10 of 13 to identify 340B-eligible dispenses on behalf of covered entities, and with the data what covered entities would need to evaluate 340B eligibility if they are not using a third-party administrator. Therefore, there would not be additional burden on covered entities to add these common data elements. Sanofi encourages the use of a standardized data template that incorporates the data elements listed in Appendix A. Such a standardized approach can simplify requirements for covered entities and reduce errors and piecemeal submissions (and thus the need for data resubmissions). Standardized and uniform data collection would also improve HRSAs ability to evaluate a rebate model framework and evaluate its utility. Question 6: Required Manufacturer Reporting Sanofi recommends that participating manufacturers report the following standardized and aggregated data sufficient to evaluate pilot performance: average days from clean claim submission to rebate payment; number of rebates paid within 10 days (out of specified number of total rebate claims, so that average can be calculated); number of rebates denied, with reasons (out of specified number of total rebate claims, so that average can be calculated) total purchases by covered entity type (in dollars at the 340B ceiling price and at WAC) number of claims where an MFP refund was denied due to a 340B discount being paid. Any public reporting of manufacturer data should be aggregated and ensure only non- proprietary information is provided. As a member of the Pharmaceutical Research and Manufacturers of America (PhRMA), we incorporate PhRMAs approach to required manufacturer reporting as well as guardrails to protect confidential and proprietary information from public disclosure. Manufacturers' confidential and proprietary data submitted to HRSA under a rebate model must be strictly protected from public disclosure. This includes safeguarding such information under Exemption Four of the Freedom of Information Act (FOIA), the Trade Secrets Act, and the Pharmaceutical Pricing Agreement (PPA), which prohibits disclosure of information in a form that identifies the manufacturer. HRSA should clearly communicate these legal protections in all model-related documents and ensure that both HRSA and any partner agencies or contractors maintain this information in strict confidence. Evaluation of the rebate model should be limited to HRSA and appropriate government partners, including HHS OIG, CMS' Center for Program Integrity, the Medicare Drug Rebate and Negotiations Group, and the Center for Medicaid and CHIP Services, using transparent and measurable criteria. Any contractors engaged for non-evaluative functions must be free from actual or perceived conflicts of interest. Notably, the 340B Prime Vendor, Apexus, should be excluded from any evaluative role or access to sensitive pilot data, given well-documented concerns about its conflicts of interest, including its compensation structure, expanding business interests beyond its core role, and its ownership by a hospital-affiliated entity. Question 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Program As previously indicated, Sanofi has committed financial and operational resources to developing a proposed rebate model and supporting the development of a platform needed 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 11 of 13 for claims collection. Sanofi has also designed its rebate model carefully to reduce administrative burden on covered entities while accounting for the different types of participating covered entities. The model is intended to address duplicate discounts and diversion, and includes a process through which covered entities may challenge rejected claims.51 Sanofis developed rebate model should be a template that HRSA considers in developing the Pilot Program. For example, Sanofis rebate model has been developed to continue access to discounted medicines without hindering covered entity cash flow. Under our rebate model, covered entities would submit a claim for 340B-eligible medicines and Sanofi would provide the difference between 340B price and the list price in less than the existing timeframe applying to covered entities and wholesalers.52 To confirm 340B eligibility, covered entities only need to provide a portion of the data that they already submit to payers and others in the reimbursement system. While some covered entities may argue that a Rebate Pilot would impose substantial new costs for data collection and submission, the evidence suggests otherwise. Currently, covered entities already incur significant 340B-related expensesprimarily fees paid to contract pharmacies and third-party administrators who help maximize their 340B claims.53 Given that participation in 340B is optional for covered entities and all healthcare payers require some level of compliance costs, administrative requirements for maintaining auditable records are entirely reasonable and proportionate. The data requirements proposed under a rebate model would not represent a significant new burden because covered entities already collect, maintain, and submit this information for other purposes. The requested data elements align with information already captured in electronic health records, required for 340B audits, necessary for Medicare and Medicaid billing compliance, submitted to manufacturers under certain contract pharmacy policies, and used for routine inventory management and reimbursement from commercial payers. HRSA appropriately recognizes that burden "may not be significant" when covered entities submit data comparable to what they already collect through existing vendor relationships.54 Claims by organizations like the American Hospital Association that hospitals would need two additional full-time employees (resulting in 11.2 million burden hours across all 340B hospitals) lack reliable justification and ignore these relevant facts.55 A rebate model leveraging existing data collection requirements through electronic and often automated systems would not impose novel burdens on compliant covered entities but could actually reduce administrative costs by improving compliance and creating operational efficiencies. All 340B Program participants, including manufacturers and covered entities, share a responsibility to protect program integrity, and the submission of accurate claims data is critical to meeting that obligation. In addition to program integrity, a well-designed rebate model can create greater transparency and consistency across stakeholders by tying the 340B discount to verified claims data, which can reduce disputes and improve predictability for both manufacturers 51 While Sanofis approach includes a process for covered entities to dispute a rejected claim, HRSA can address concerns about rebate denials by engaging with stakeholders to establish standardized procedures and timeframes. 52 Sanofis rebate model can provide a 340B rebate within 10 days of complete data submission. 53 Note that Minnesotas 340B Transparency Report indicates that these existing costs represent the majority of covered entities' program expenses. 54 HRSA Proposed Information Collection Request Notice, 91 Fed. Reg. 9632 at 9633, Feb. 26, 2026. 55 American Hospital Association Letter to HRSA, 340B Rebate Model Pilot Program, Sept. 30, 2025, https://www.aha.org/lettercomment/2025-09-30-aha-letter-hrsa-re-340b-rebate-model-pilot-program. 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 12 of 13 and covered entities. A rebate-based approach can also modernize 340B Program administration by aligning 340B more closely with existing rebate infrastructure under Medicare and commercial models) and enabling better data analytic ability and oversight. *** Sanofi believes that a rebate model is an important first step towards modernizing and strengthening the 340B Program while policymakers consider broader policy reforms. A rebate model can establish needed safeguards against duplicate discounts and diversion, while more generally introducing greater transparency. As such, a rebate model offers HRSA and stakeholders a practical and immediate mechanism to improve program integrity. In testing the rebate model via a Pilot Program, HRSA should broaden the list of eligible manufacturers to ensure that the Pilot Programs results are representative. And Sanofis ultimate participation in the Pilot Program, in particular, would provide HRSA with valuable insights into the effectiveness of a rebate model across diverse drug portfolios, and in preventing not only duplicate discounts but also diversion. Indeed, HRSA should use Sanofis own Credit Model as a template for the Pilot Program, most significantly by allowing participating manufacturers to use limited health care encounter data to verify that drugs are not being diverted to individuals who are not patients of the relevant covered entities. Expanding the Pilot Program to allow for additional manufacturer participation and broadening it to allow manufacturers to use health care encounter data, would demonstrate HRSAs commitment to testing all available mechanisms for safeguarding the integrity of the important 340B Program. We appreciate this opportunity to contribute to the Pilot Programs development and look forward to continued collaboration with HRSA. Sincerely, /s/ Adam Gluck Head, U.S. and Specialty Care Corporate Affairs 1001 Pennsylvania Avenue N.W., Suite 650, Washington, D.C. 20004 Page 13 of 13 Appendix A: Recommended Standardized Data Elements Sanofi strongly recommends adding the following limited set of purchase data and health care encounter data: Invoice date (date the purchase was invoiced to the covered entity) Invoice number (wholesaler assigned invoice number for the purchase order) Package account number (wholesale assigned number used to place the order) Package units (number of packages of the product ordered) Ship to Pharmacy ID (NPI of the pharmacy that received the physical shipment of the product from the wholesaler) Health Plan ID (ID assigned to identify the health plan) Claim Number (a unique identifier for a prescription and claim processor) Billing Service Provider ID (ID assigned to the entity billing for the healthcare services provided to the patient, to the extent not captured by HRSAs proposed Service Provider ID element) Rendering Physician ID (ID assigned to the healthcare professional providing the healthcare services to the patient) HCPCS Code (HCPCS Level II code set value assigned to the healthcare service provided to the patient) Diagnosis Code (ICD-10 code indicating medical conditions evaluated as part of the health care encounter) Place of Service Code (Code identifying the place where a product or service is administered)
HRSA-2026-0001-2021(no commenter metadata)2026-04-20T04:00Z34,670 chars
Please see the attached comments from New York City Health + Hospitals. Thank you for the opportunity to submit feedback on this proposal. 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program [HRSA-2026-03042] Dear Administrator Engels: New York City (NYC) Health + Hospitals (NYC H+H) appreciates the opportunity to respond to the Department of Health and Human Services (HHS) Request for Information on the 340B Rebate Model Pilot Program. NYC H+H is the largest municipal health care system in the United States. Our mission is to provide the highest quality health care services to all New Yorkers with compassion, dignity, and respect to all, regardless of insurance status or ability to pay. Over 70,000 NYC H+H team members provide essential inpatient, outpatient, and home-based services to more than one million New Yorkers every year across NYCs five boroughs. Our integrated system includes 11 acute care locations, all 340B covered entities; 5 post-acute / long-term care facilities; over 30 community health care centers; home care services; an accountable care organization; and a health plan, MetroPlus. We are also the direct provider of health care in NYC jails; our Correctional Health Services division offers medical, nursing, mental health, substance-use treatment, social work, dental and vision care, discharge planning, and reentry support services. We provide nearly 60 percent of all behavioral health services in NYC, and we are the largest provider of health care to New Yorkers experiencing homelessness. The populations that we serve continue to be the most marginalized populations in NYC. Overall Feedback We strongly oppose HRSA moving away from the upfront discount model that has worked successfully for decades and instead adopting a rebate model under the 340B program. As explained below, any rebate mechanism will impose enormous costs and burdens on our safety net health system. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. HRSAs enabling statute requires that must prioritize the needs of 340B covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which NYC H+H and other 340B covered entities have relied on for more than 30 years, is the best way to fulfill that purpose of the 340B program. 2 For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimate has increased over the estimates we had calculated for the 2026 drugs alone. More drugs and more drug companies will lead to more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that NYC H+H can spend on patient care. A Potential 340B Rebate Program Is an Unacceptable Resource Drain As outlined below, implementing the 340B Rebate Model Pilot Program will require that NYC H+H invest a significant amount of money. Unfortunately, that means that NYC H+H will no longer be able to use our 340B savings as effectively and comprehensively as we currently do under an upfront discount model. The incremental costs associated with a 340B Rebate Model Pilot Program would not be marginalthey would be significant, ongoing, and deeply destabilizing. These costs would compound across staffing, IT infrastructure, compliance, and financing, creating a substantial financial drain on already constrained healthcare systems. Critically, these are not investments that improve patient care or outcomes. Instead, they represent pure administrative overhead, diverting scarce resources away from clinical services and into bureaucratic processes. The model effectively shifts resources away from patients and toward administrative processes, undermining the intent of the 340B program and weakening the health care safety net. Nearly 70% of our adult population is insured by Medicaid or has no insurance, and 97% of babies born within our system are Medicaid patients. Our system has an average of 20 days cash on hand, compared to 150 days for the average NYC hospital and 200 days for hospitals nationally. Hospitals are already facing significant financial consequences due to the cuts to health care funding and Medicaid eligibility in H.R. 1, and we cannot absorb the additional costs resulting from this proposed pilot. Administrative Costs Under A Potential 340B Rebate Program Any rebate program would require NYC H+H to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital, and far above and beyond what we are experiencing now. Implementing the proposed 340B Model Rebate Pilot Program would create substantial incremental administrative and operational costs for NYC H+H, especially as HRSA now indicates that up to 25 drugs could be included in the rebate program. As the largest municipal health system in the United States, including 11 hospitals and an extensive FQHC network, the scale of our 3 operations would make both one-time startup activities and ongoing program maintenance highly resource-intensive. One-time startup costs would include system configuration and software modifications, development of internal policies and procedures, workflow redesign, staff training across multiple departments, and coordination with payers and third-party intermediaries. These activities would require extensive project management and significant time commitments from finance, pharmacy, IT, and compliance teams. The complexity of implementing a new rebate process across all sites would be exceptionally high, making this startup effort both logistically challenging and cost-prohibitive. Ongoing operational costs would involve continuous monitoring, processing, and reconciliation of rebate transactions, resolving discrepancies, maintaining compliance documentation, and regular reporting to HRSA and other oversight entities. The repetitive, high-volume nature of these tasks would require a dedicated, ongoing administrative workforce, adding substantial operational burden and diverting resources from direct patient care. Given the size and complexity of our health system, the proposed rebate program would be extremely difficult, time-consuming, and costly to implement and sustain. The primary cost drivers for implementing a 340B Rebate Program would include: Increased staffing and diversion of current staff: Significant time from pharmacy, billing, finance, IT, and compliance personnel would be required for setup, ongoing reconciliation, and dispute resolution. Existing staff would need to shift focus from direct patient care and current 340B operations. IT systems and data integration: System upgrades and configuration changes would be required to track rebates, feed data to third-party intermediaries, and reconcile transactions. Third-party administrators (TPAs) and other vendors have already quoted substantial costs for establishing secure data feeds and processing workflows. The setup and ongoing management of these feeds represents a major cost driver. Third-party vendor fees: Any engagement of TPAs or external consultants to support the rebate programranging from system integration to audit supportwould create recurring contractual costs. Compliance activities and labor hours: Ensuring adherence to HRSA requirements, monitoring for duplication, and handling discrepancies would require substantial ongoing labor hours. Processes for challenging denials: Resolving payer disputes and managing claims denials under a rebate model would introduce a massive administrative burden, requiring specialized staff time and workflow changes that would likely never be fully rectified due to sheer size and scope. The incremental costs would be incurred across the following activities: Claims processing: Implementing systems to identify drugs subject to the rebate program and ensuring accurate claim adjudication. Data submission and reconciliation: Transmitting drug-level data to third-party administrators, reconciling rebates, and verifying accuracy across multiple payers. Chasing down rebates: Ongoing follow-up to resolve discrepancies, delayed payments, or payer noncompliance. 4 Audit support: Preparing documentation and supporting HRSA or payer audits related to rebate transactions. Challenging denials: Addressing denied claims or disputes regarding rebate eligibility, which would require staff dedicated to resolution processes. Furthermore, there would be additional costs to NYC H+H to maintain compliance with this rebate model, including: Legal review: Evaluating contracts, agreements with TPAs, and compliance implications. Training: Educating staff on new workflows, policies, and system changes. Consulting services: Engaging external experts to ensure program integrity and operational feasibility. For a health system of our size, this pilot rebate program would divert a significant amount of staffing and resources away from the existing 340B program. The incremental administrative and operational costsparticularly labor, IT system modifications, third-party vendor fees, and ongoing reconciliationwould require additional financial outlays and materially reduce the net savings achieved from the drugs included in the pilot. In many cases, the added complexity and expense of implementing a rebate model would outweigh the financial benefit of the 340B program for these drugs, making the approach inefficient and cost-prohibitive. Staffing Impacts Under a Potential 340B Rebate Program HRSAs estimate of five additional hours per week is an unrealistic estimate of the true administrative burden. It does not reflect the operational reality of rebate-based systems, which require continuous, transaction-level oversight rather than periodic or batch processing. Each eligible claim would necessitate multiple layers of review, including eligibility determination, payer coordination, data validation, and reconciliation with manufacturer rebate submissions. These processes are inherently labor-intensive and frequently generate discrepancies that must be manually investigated and resolved. Even a small volume of drugs can produce a disproportionately large administrative workload due to variability in payer policies, claim denials, and data mismatches. Furthermore, the estimate does not account for ongoing compliance obligations, system maintenance, staff training, or audit preparationall of which are integral to operating such a program. As the number of applicable drugs increases over time, the workload would scale, exponentially compounding the burden. The reality is that our organization would face in excess of 100 additional administrative hours per week, not five. This level of effort represents a significant operational strain, increasing costs, introducing compliance risk, and diverting critical resources away from patient care. The estimate fundamentally understates both the scope and the impact of the proposed model. NYC H+H does not currently have the staff needed to comply with a Rebate Program; to implement the program as proposed would unquestionably require both the hiring of at least 5-7 additional full-time employees and the reallocation of existing clinical and operational staff away from patient care. This staffing estimate would increase as the number of additional Maximum Fair Pricing (MFP) medications included in the Rebate Program 5 increases. The administrative complexity introduced by a rebate-based system, particularly the need for ongoing claims tracking, eligibility verification, rebate reconciliation, and compliance monitoring, cannot be absorbed within current staffing structures. In practical terms, existing pharmacy, billing, and clinical support staff would be forced to dedicate significant portions of their time to administrative tasks, diverting their time from direct patient care. Even with reallocation, however, the workload would exceed internal capacity, requiring our system to invest in additional staffing resources. NYC H+H would have to hire multiple full-time employees dedicated exclusively to managing these rebate-related functions: Rebate program analysts responsible for tracking and validating claims data across multiple systems Compliance specialists to oversee adherence to evolving program requirements and prepare for audits Billing and reconciliation staff to manage payment discrepancies, manufacturer disputes, and resubmissions IT/data support personnel to maintain and adapt systems required for rebate tracking and reporting Importantly, these roles require additional and specialized expertise that is not readily available within existing teams. The organization would need substantial lead timeno less than 12 monthsto recruit, hire, and train qualified personnel. Even after onboarding, a prolonged ramp- up period would be necessary to establish functional workflows, during which operational inefficiencies and compliance risks would remain elevated. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program NYC H+H has designed its technological systems and operational infrastructure in reliance on an upfront discount model, as the program is designed based on existing statute. Implementation of a 340B Rebate Model Pilot Program would necessitate extensive and disruptive changes to existing IT systems and data infrastructure, at substantial cost to our system. Current systems are not designed to support the level of real-time, claim-level tracking, cross-system reconciliation, and manufacturer-specific rebate processing that this model would require. We would have to either procure entirely new software platforms or heavily modify existing electronic health records (EHR), pharmacy management systems, and billing platforms to enable end-to-end visibility into drug utilization, payer adjudication, and rebate eligibility. This would also require the development of complex data interfaces between internal systems and external stakeholders, including TPAs, contract pharmacies, and manufacturers. This burden alone would be beyond what our internal teams can handle. In addition, entirely new data governance and validation processes would need to be established to ensure accuracy across multiple data sourceseach with differing formats, timing, and levels of completeness. The result would be a fragmented and highly fragile infrastructure that is costly to maintain and highly susceptible to delays and data mismatches. Providing medical claims data under this model would be exceptionally burdensome, particularly in the absence of a direct data feed between the organizations EHR and its TPA. Without automated integration, there is no seamless mechanism to transmit the detailed, claim-level data 6 required for rebate processing. As a result, organizations would have to rely on manual data extraction, formatting, and transmission processes. Staff would need to pull data from multiple systemsoften in incompatible formatsthen cleanse, validate, and reconcile that data before it could even be shared with the TPA. This process is not only time-intensive but also highly error- prone, increasing the likelihood of discrepancies, rejected claims, and delayed or forfeited rebates. Compounding the issue, medical claims data is inherently complex, involving multiple variables such as diagnosis codes, procedure codes, payer adjudication details, and patient eligibility criteria. Ensuring that all required data elements are complete and accurate across disparate systems would require repeated manual intervention and iterative corrections. In effect, the lack of interoperability transforms what should be an automated data exchange into a labor-intensive, ongoing administrative exercise. This significantly increases operational burden, introduces compliance risks, and further diverts staff from patient-facing responsibilitiesundermining both efficiency and the overall intent of the program. The financial burden associated with implementing the necessary IT infrastructure would be substantial and ongoing. Initial costs would include system procurement or development, vendor implementation fees, and extensive customization of existing platforms to accommodate rebate tracking and reporting requirements. These one-time costs could easily reach millions of dollars. depending on size and system complexity. Moreover, the more significant concern is the recurring cost structure. Ongoing expenses would include system maintenance, vendor licensing fees, data storage, interface management, cybersecurity enhancements, and continuous updates to reflect evolving program requirements. Additionally, we would incur recurring personnel costs for IT support and data management staff required to sustain these systems. Integration costs alone particularly for establishing and maintaining interfaces between EHRs, TPAs, and external partnerswould be both high and persistent, as data feeds would require constant monitoring and troubleshooting. Rather than a one-time investment, this model creates a perpetual financial obligation that compounds over time, further straining already limited healthcare resources. Data Collection by Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. NYC H+Hs current 340B data processes are already highly complex, resource-intensive, and carefully structured to comply with existing program requirements. We rely on a combination of internal systemsincluding our EHR, pharmacy dispensing systems, and billing platforms alongside third-party vendors to manage key aspects of data collection, tracking, and compliance oversight. A 340B Rebate Model Pilot Program would fundamentally and permanently alter current data collection activities, introducing entirely new requirements that go far beyond existing processes. These changes would not be limited to a one-time system adjustment; rather, they would create ongoing, highly complex data collection and validation obligations that conflict with current practices. This would result in a permanent escalation in administrative workload, requiring sustained staffing, system maintenance, and manual oversight with no clear endpoint. 7 It is not accurate to suggest that hospitals currently submit the type or level of data required under a rebate model to drug manufacturers. Existing 340B compliance processes do not require routine transmission of detailed, claim-level data to manufacturers in the manner contemplated under a rebate system. A rebate model would require the submission of significantly expanded data elements, potentially including detailed patient encounter information, drug administration or dispensing records, payer adjudication details, claim identifiers, and other highly specific eligibility indicators. These data elements are not compiled into a single, manufacturer-facing dataset under current workflows and would require substantial new processes to generate and validate. Importantly, this data is fundamentally different from what is submitted to payers for billing purposes. Billing claims are designed for reimbursement and follow standardized formats, whereas rebate data would require enhanced validation, cross-referencing across systems, and alignment with manufacturer-specific requirements. Organizations would incur both one-time costs for system modifications and ongoing costs related to staffing, data management, error resolution, and compliance monitoring. These added expenses, combined with the operational complexity, would impose a substantial and unsustainable burdenparticularly given that this work represents a duplication of effort that provides no direct benefit to patient care. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force NYC H+H to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Fronting drug costs at scale combined with a delay in payment would create a new and significant financial risk for our system. A rebate model effectively shifts financing responsibility from manufacturers to providers, requiring our organization to function as an intermediary that carries significant accounts receivable balances. This is not a sustainable expectation. A rebate-based payment structure would introduce significant and destabilizing cash flow risk. Under the current model, our organization benefits from upfront pricing predictability through wholesalers. In contrast, a rebate model forces our organization to purchase drugs at higher upfront costs while waiting and hoping for reimbursement that is contingent on claim submission, validation, and manufacturer approval. Even under an assumed 10-day turnaround, payment timing would remain uncertain and highly variable in practice due to disputes, data mismatches, and processing delays. This lag would create a persistent gap between when expenses are incurred and when/if funds are recovered, requiring the organization to continuously front substantial capital. The cumulative effect would be a material strain on operating cash flow, particularly for high-cost drugs or high-volume providers. This introduces real financial risk, including reduced liquidity, increased borrowing needs, and diminished ability to invest in patient care services. A rebate-based model represents a fundamental and unfavorable shift in payment timing. Currently, organizations purchase drugs at discounted prices through wholesalers, with predictable invoicing cycles and established payment terms. This allows for relatively stable and manageable cash flow planning. Under a rebate model, organizations must instead pay the full wholesale acquisition cost (WAC) upfront and then hope and wait for reimbursement through a separate, 8 administratively complex process. This introduces delays, uncertainty, and dependency on external parties for payment. The result is a clear deterioration in payment timing, transforming a predictable procurement process into a fragmented and delayed reimbursement cycle that significantly increases financial exposure. The statement in the proposed 340B Model Rebate Pilot Program that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due, does not reflect operational reality. There is no reliable mechanism to ensure that rebate payments would consistently be received before wholesaler invoices are due. In practice, rebate processing is subject to delays related to data submission, validation, dispute resolution, and manufacturer review. Wholesaler payment terms, by contrast, are fixed and enforceable. Organizations are obligated to pay invoices on a defined schedule regardless of whether rebate funds have been received. Any disruption or delay in rebate processing would immediately create a cash flow shortfall. Given the assurance of discrepancies and administrative delays in a rebate system, it is far more realistic to expect that payments would lag behind invoice obligationsnot precede them. Furthermore, a 10-day requirement is not sufficient to mitigate the financial and operational risks inherent in a rebate model. While it may appear reasonable in theory, it does not account for the practical realities of data validation, error resolution, and dispute management. Even minor discrepancies can delay processing well beyond 10 days, and there is no guarantee of consistent compliance by manufacturers. Additionally, the burden remains on providers to ensure that submissions are complete and accurate, which itself is a time-intensive process. More importantly, even a perfectly functioning 10-day cycle would still require providers to front substantial costs during that period, creating ongoing liquidity pressure. As such, the proposed timeframe understates the fundamental cash flow challenges and does not resolve them.;. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount.. The 340B Program has, since its inception more than 30 years ago, consistently provided discounts through upfront pricing rather than post-sale rebates. NYC H+H reasonably relied on this longstanding policy and the upfront-discount model when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even as a pilot. Problems with the Beacon IT Platform Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Our experience with Beacon was not the result of a voluntary vendor selection process, but rather a 9 function of being effectively required to participate as a condition of engaging in a rebate-based model. Beacon operated as an intermediary that we were required to use, despite significant and warranted concerns about its independence, incentives, and alignment. From the outset, it was clear that Beacon was not a neutral third party. Its close alignment with pharmaceutical manufacturer interests created an inherent conflict, as its role in adjudicating or facilitating rebate- related processes positioned it to benefit from reduced rebate payments or increased administrative friction. This structure undermined trust and raised serious concerns about fairness, transparency, and accountability. Beacons Terms and Conditions were deeply problematic and fundamentally one-sided. They were presented on a take-it-or-leave-it basis, leaving our organization with no meaningful ability to negotiate or reject unfavorable provisions. In effect, we were placed in a position where we had to accept these terms in order to participate at all. The terms overwhelmingly favored Beacon and its affiliated interests, while imposing disproportionate obligations, risks, and liabilities on providers. Of particular concern were provisions related to data use, limitation of liability, and dispute resolution, which lacked basic safeguards that would be expected in a fair and balanced vendor agreement. Under normal circumstances, our organization would not agree to such terms with any vendor. The fact that participation in the model was contingent on accepting these conditions raises serious concerns about coercion, fairness, and the integrity of the overall program structure. Beacons data requirements were extensive, inconsistent and frequently changing without proper notice or explanation. Expectations around required data elements, formatting, and submission processes shifted over time, often without sufficient notice or clear guidance. This created a constantly moving target for compliance, requiring staff to repeatedly adjust workflows, reconfigure data extracts, and revalidate potential submissions. The lack of standardization and predictability significantly increased administrative burden and introduced a high risk of errors and delays. Compounding the issue, these evolving requirements were disconnected from operational realities within provider systems, suggesting a complete lack of understanding for the complexity of healthcare data environments. The result was an inefficient, frustrating process that consumed substantial time and resources with little to no added value. When issues did come up with Beacons customer service, as they frequently did due to the complexity and instability of the process, their services were insufficient, and suggested an AI bot that could not fix the problems. Resolution timelines were often prolonged, with limited transparency into the status of inquiries or disputes. This lack of timely and effective support exacerbated existing operational challenges, leaving providers to manage unresolved discrepancies and financial uncertainty. In a system where payment depends on accurate and timely processing, inadequate customer service is not a minor inconvenience. It directly contributes to delayed or lost revenue and increased administrative strain. If a rebate-based model were to be implemented, it must include strict and enforceable guardrails to address the significant privacy, security, and ethical concerns raised by the use of third-party intermediaries like Beacon: 10 Any third-party entity involved in data handling or rebate administration should be demonstrably independent and free from conflicts of interest. Entities with direct or indirect ties to pharmaceutical manufacturers should not be permitted to operate in roles where they can influence rebate eligibility, data interpretation, or payment outcomes. Participation in any third-party platform should be truly voluntary, with fair, balanced, and negotiable contractual terms. Providers must not be coerced into accepting one-sided agreements as a condition of program participation. All contracts should include clear limitations on data use, explicit prohibitions on secondary data monetization, and robust accountability measures for misuse. Data requirements should be standardized, stable, and minimally necessary, with clear guidance and sufficient implementation timelines. Constantly shifting requirements create unnecessary risk and undermine compliance efforts. Strong data privacy and security protections should be mandatory. This includes strict controls on how patient data is accessed, transmitted, stored, and used, as well as full transparency into any downstream data sharing. Providers must retain ownership and control over their data, and any use beyond core program functions must be explicitly prohibited. There should be meaningful oversight and enforcement mechanisms to ensure compliance with these guardrails, including audit rights, dispute resolution pathways, and penalties for misconduct. Without these protections, a rebate model risks enabling biased administration, inappropriate data use, and systemic inequities that ultimately harm providers and patients alike. Efforts to Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous burden and costs that a rebate mechanism would impose on NYC H+H and other 340B covered entities, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. For all of these reasons, NYC H+H respectfully submits that HRSA should not adopt or implement a 340B Rebate Model. Such a model would fundamentally alter the 340B program as it currently exists and introduce administrative and operational burdens of an unprecedented scale, significantly disrupting established processes that currently ensure program compliance and integrity. Our experience demonstrates that existing mechanisms already provide precise, auditable deduplication across all payers. In light of these considerations, we strongly urge HRSA to abandon the proposed 340B Rebate Model in its entirety. Moreover, if HRSA chooses to move forward with this effort, we request that it share the specific features of the program and allow NYC H+H and other covered entities to review and provide additional comment. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program 11 and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Deborah Brown Senior Vice President Chief External Affairs Officer NYC Health + Hospitals
HRSA-2026-0001-2022Community Care Network of Kansas2026-04-20T04:00Z14,027 chars
On behalf of Kansass 21 Community Health Centers (CHCs) and the more than 355,000 patients they serve, the Community Care Network of Kansas (CCNK) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, CCNK strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. Summary of Comments: In these comments, CCNK explains: A. The importance of 340B savings to Kansas CHCs, and how they assist them in providing high-quality, affordable primary care, behavioral health, supportive services, imaging, laboratory, dental care, and a myriad of other services in their communities to their low-income and uninsured patients. B. How the costs inherent in a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially drive them to stop providing rebate drugs entirely resulting in avoidable harm to patients health. C. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, further complicating their financial stability while not addressing the core issues related to the 340B program that manufacturers say they are trying to impact. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. How a neutral claims clearinghouse would achieve the same goals as a rebate model without the negative impacts of a rebate model. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Kansass 21 Community Health Centers (CHCs) and the more than 355,000 patients they serve, the Community Care Network of Kansas (CCNK) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, CCNK strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. Summary of Comments: In these comments, CCNK explains: A. The importance of 340B savings to Kansas CHCs, and how they assist them in providing high- quality, affordable primary care, behavioral health, supportive services, imaging, laboratory, dental care, and a myriad of other services in their communities to their low-income and uninsured patients. B. How the costs inherent in a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially drive them to stop providing rebate drugs entirely resulting in avoidable harm to patients health. C. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, further complicating their financial stability while not addressing the core issues related to the 340B program that manufacturers say they are trying to impact. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. How a neutral claims clearinghouse would achieve the same goals as a rebate model without the negative impacts of a rebate model. A. 340B savings support a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured1. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law2 and regulation3, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that supports many of the services that CHC patients rely on. For example, in Kansas, CHCs routinely rely on 340B savings to support services such as mental health, dental care, school-based health programs, care coordination, lab services, and diagnostic imaging. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. 1 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 2 Section 330(e)(5)(D) of the Public Health Service Act. 3 45 Code of Federal Register 75.307 Program Income B. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely, resulting in avoidable harm to patients health. As required by law and regulation, CHCs invest all their 340B savings into services that expand access to care for their medically underserved patients. Due to this fact, every time 340B savings are reduced CHCs are forced to scale back services on which their patients depend. The impact will extend far beyond affordable pricing for medications, to all the types of services. A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. Some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non- adherence, causing the occurrence of avoidable complications and hospitalizations to rise. C. A rebate model will create massive cashflow, administrative, and other costs for CHCs. The rebate model will erode the ability of CHCs to continue to provide the level of services they currently provide due to the undue financial and administrative burdens this model places on CHCs. Four of the most pronounced issues identified as we looked at the impact of a rebate model on our CHCs are: Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only the last step in a multi-step financing process; other steps, including initial purchase, inventory aging, and undispensed medications will still force CHCs to borrow substantial amounts of cash. CHCs also face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains, including the uncertainty created by their low or negative margins, are well known. Any creditor willing to lend to them will charge above- average rates, and many may seek additional lending terms that are exceedingly prohibitive. Massive administrative burdens: A rebate model will require CHCs to implement additional IT resources to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require increased administration to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts, prompt pay discounts, and volume discounts. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above apply to some degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication4 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CEs, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for their care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at rstiles@communitycareks.org Sincerely, Robert Stiles Chief Executive Officer Community Care Network of Kansas 4 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619
HRSA-2026-0001-2023Sutter Health2026-04-20T04:00Z29,750 chars
Please see attached comment from Sutter Health. 2200 River Plaza Drive Sacramento, CA 95833 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels, Sutter Health (Sutter) appreciates the opportunity to submit comments on the 340B Program Notice: 340B Rebate Model Pilot Program. Sutter Health is a not-for-profit health care system dedicated to providing comprehensive care throughout California. Sutter Health currently serves 3.5 million patients, thanks to a dedicated team of more than 60,000 employees and 14,000+ affiliated physicians and advanced practice clinicians. Sutter delivers exceptional and affordable care through its hospitals, aligned medical groups, ambulatory surgery centers, urgent care clinics, telehealth, home health, and hospice services. As a long-standing and dedicated participant in the 340B Drug Discount Program, Sutter values HRSAs ongoing efforts to support and modernize the program. However, Sutter does not support the implementation of a 340B rebate-based model and believes that existing statutory protections are sufficient to address program integrity concerns without introducing the financial and operational risks associated with such a framework. Sutter is deeply concerned that a 340B rebate model could threaten the long-term viability of the 340B Programplacing the greatest burden on the vulnerable patients it was designed to support. Where Sutter offers comments on the design or operation of a rebate model, those comments are provided solely for purposes of risk mitigation and due diligence in the event HRSA nevertheless elects to pursue such an approach and should not be interpreted as endorsement of a 340B rebatebased framework. At a high level, Sutter recommends that HRSA: Maintain upfront discounts as the primary 340B mechanism and avoid transitioning to a rebate-based model that requires covered entities to purchase drugs at Wholesale Acquisition Cost (WAC); Establish enforceable payment standards for any rebate model, including a guaranteed maximum payment timeframe (e.g., 10 days from claim approval), electronic traceable payments, and penalties (e.g., interest) for late payments; Standardize rebate operations and oversight, including uniform denial categories, required documentation for denials, and defined timelines for denial adjudication; Limit duplicate discount policies to statutory Medicaid requirements and prohibit manufacturers from using commercial rebate or data requirements to restrict 340B utilization; Adopt uniform data standards and privacy safeguards, including a standardized data dictionary, minimum security requirements, and clear limits on how PHI and claims data may be used; and Implement a neutral, HRSA-governed claims clearinghouse to centralize data submission, ensure consistent manufacturer compliance, and reduce administrative burden on covered entities. The shift from an upfront discount to a post-sale rebate model would create significant financial and operational issues for covered entities, while delegating authority to drug manufacturers and limiting HRSAs oversight. We are pleased to offer the following comments on a potential 340B rebate model and to share specific insights on how these changes could impact patients and providers across Northern California. Our detailed response to key areas of the RFI is provided below. 1. Costs to Covered Entities A. Financial and Administrative Costs A potential rebate model would fundamentally alter Sutters financial dynamics. The cornerstone of the 340B Programs success has been its upfront discount mechanism, which provides covered entities with immediate cost savings. Replacing this existing mechanism with an administratively complex and delayed rebate system would require covered entities to purchase drugs at Wholesale Acquisition Cost (WAC)often several times higher than the 340B pricewhile waiting for delayed and uncertain reimbursement, especially in instances where manufacturers may inappropriately withhold reimbursement. This shift would force covered entities to absorb significantly higher upfront drug costs with no guarantee of timely repayment, creating substantial financial exposure and destabilizing the very safetynet services the 340B Program is intended to support. Beyond financial exposure, a rebate-based model would impose substantial new administrative burdens. In addition to existing responsibilities, such a system would require additional administrative functions, including rebate validation, claims-level reconciliation, payment tracking, late-payment identification, and formal dispute resolution. These activities do not exist under the current upfront discount model and would significantly expand the administrative scope of Sutters 340B Program, contrary to the spirit of Executive Order 14192 "Unleashing Prosperity Through Deregulation," which states the Administrations policy to significantly reduce the private expenditures required to comply with Federal regulations. B. Staffing Impacts The shift to a rebate model would require additional staffing and further strain already overextended teams. Providers would need to assume new responsibilities, including executing contracts to facilitate data exchange, assessing impacts on patient services, tracking and validating rebate claims, monitoring payment timelines, and resolving disputes, all while maintaining care delivery and existing compliance practices. Even for a wellstaffed 340B department, a single audit can require an allhandsondeck response. The magnitude of changes required under a rebate model would be significantly greater. Each step of the rebate process would require new staff training, additional personnel time, and ongoing resource allocation, creating an unsustainable burden that diverts time and funding from patient care. Sutter is also concerned that enforcement functions traditionally handled by regulators could shift to covered entities, forcing providers to monitor payment compliance and manage disputes, further drawing administrative capacity from patient care. In recognition of the staffing impacts and the considerable administrative burden, despite our opposition to a rebate model, Sutter recommends that manufacturers be required to provide at least 90 calendar days notice before instituting a 340B rebate model, so that covered entities have adequate time to prepare the workflows needed to implement an entirely new rebatecapture process. C. Systems and Infrastructure for Implementation The rebate model would require substantial new infrastructure investments. Sutter would need to develop or expand our infrastructure, including data-exchange interfaces, secure claims transmission systems, and contract management tools, among other systems. These new systems would be required to manage rebate validation, claims reconciliation, and dispute documentation. The infrastructure needed for continuous claims-level processing, payment tracking, and submission monitoring would represent a significant new cost center. If HRSA were to pursue a 340B rebate-based model, it should account for these significant startup and ongoing operational requirements when evaluating the burden of such a model. D. Other Anticipated Costs A Threat to the Safety Net A weakened 340B program directly undermines its statutory intent and Sutters safetynet capacity. Funds would be diverted from patient and community services to support rebate management activities and expanded compliance operations. If a rebate model is implemented, Sutter anticipates needing to scale back nonreimbursable services currently funded through 340B savings. These include programs offering patients cash prices based on 340B discounts, as well as services delivered through the East Bay Advanced Care Pharmacy and Clinic, Pharmacotherapy Clinics, and the Patient Management Program. In addition to reduced services and reduced patient access to 340B-discounted medications, the requirement to purchase drugs at WAC and absorb reimbursement delays would create operational pressures severe enough to force Sutter to evaluate whether certain 340B sites can continue to operate. Locations such as Roseville and Sacramento, and others could face program closures if sustained periods of unreimbursed costs occur. These pressures would be even more pronounced for smaller, lessresourced providers. Sutter is deeply concerned that such reductions would undermine the goals of the 340B Program. Such changes would introduce new gaps in service availability at a time when demand for safetynet resources continues to grow, reducing the stability and predictability providers need to plan and sustain community programs. 2. Payment Timing and Cash Flow Impacts A. Impact of Rebate Payment Timing on Cash Flow If a rebatebased model were implemented, the timing of manufacturer payments would become a central driver of cash flow exposure for covered entities. Because covered entities would not receive the 340B discount upfront, any delay between drug purchase and rebate reimbursement would extend the period during which they must carry high, upfront drug acquisition costs. Even relatively short delays could create material cash flow strain when applied across large volumes. Sutter has also heard from Beacon, the technology platform slated for implementation under the previously proposed rebate pilot, that the carrying time for rebate payments could exceed 10 days, with the 10-day period beginning only after claim approval. Under such approach, covered entities would be required to carry the cost of these drugs significantly longer than manufacturers obligations would suggest. To mitigate this risk under any rebate framework, HRSA would need to establish a guaranteed maximum payment timeframe and require that manufacturers use electronic, traceable payment methods to ensure timely receipt. In our comments on the previously proposed rebate pilot,1 Sutter also expressed concern about HRSAs delegation of authority to manufacturers. These concerns remain relevant here: if manufacturers control the timing and processing of rebate payments, covered entities will face heightened uncertainty and have little recourse in the event of delayed or withheld payments. The mismatch between manufacturer payment timelines and covered entity cashoutlay timelines would create substantial financial exposure. Covered entities could be forced to front drug costs for prolonged periods without certainty of reimbursement. To limit these risks, any rebate-based model would require enforceable timelines, automatic payment triggers, and clearly defined remedies for manufacturer noncompliance, such as interest on late payments or corrective actions. Absent such safeguards, delayed rebates would likely exacerbate, rather than alleviate, cash flow instability for covered entities. B. Ensuring Manufacturer Adherence to the 10-Day Requirement If a rebate-based model were implemented, HRSA would need to establish clear, enforceable operational standards to ensure manufacturer compliance with a 10day rebate payment requirement. In particular, a centralized, standardized mechanism for timestamping claim submission and rebate receipt would be necessary to create a uniform basis for assessing compliance with the 10day requirement. Such a mechanism would help reduce variability across manufacturers and minimize the administrative burden on covered entities. As discussed above, Sutter also emphasizes that enforcement responsibilities should not fall solely on covered entities. Requiring providers to monitor and initiate disputes for each missed or delayed payment imposes an unreasonable and unsustainable compliance burden. To address this risk, HRSA would need to provide active oversight of manufacturer performance by implementing mechanisms to flag repeated payment delays and patterns of non-payment. 1 Sutter Health Comments on 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (2025-14998). https://www.regulations.gov/comment/HRSA-2025-0001-0816 The agency would also need to audit manufacturers, as it does for covered entities, to ensure compliance with payment timelines and proper use of claims data. C. Additional Safeguards to Address Payment Timing and Cash-Flow Impacts To mitigate the risks inherent in a rebatebased model, additional safeguards would be necessary to protect covered entities from cash flow strain created by delayed rebate payments. HRSA would need to require automated payment status reporting from manufacturers, uniform file formats for determination notices, clear escalation pathways for unresolved payments, and documentation standards for any payment delays. Any such framework would also require a centralized dispute resolution process, administered by HRSA or a truly neutral clearinghouse, to ensure consistency and prevent manufacturerdriven variation. These measures would increase transparency, improve consistency across manufacturer practices, and limit cashflow impacts without placing further burden on covered entities. 3. Rebate Denials If HRSA were to pursue a rebatebased model, transparency and consistency in rebate denials would be essential to mitigating financial harm to covered entities and avoiding arbitrary outcomes. In the Beacon platform, specifically its 340B ESP product, manufacturers can select from multiple denial categories for contract pharmacy transaction submission, including an other category that does not require justification. While HRSA has not indicated whether Beacon or any similar platform would be used in a future pilot, this example highlights a broader concern: denial categories that lack rationale prevent covered entities from understanding why rebates are withheld. To limit inappropriate denials under any rebatebased approach, HRSA would need to prohibit denial categories that lack defined justification and require detailed, enforceable documentation standards for any denial outside established categories. In addition, to ensure denials are limited to appropriate circumstances, HRSA would need to establish standard process requirements for the denial of any rebate claim. These safeguards should include a uniform denial template, a clearly defined set of required data fields, and a standardized documentation package that manufacturers must provide when issuing a denial. Any rebate framework would also require a defined timeline for adjudicating improper denials to ensure that covered entities receive timely resolution and do not face prolonged financial uncertainty. To align with a potential 10day rebate payment requirement, Sutter recommends that improper denials also be adjudicated within a comparable 10day timeframe. Parallel timelines for payment and denial adjudication would promote consistency, support timely resolution, and reduce administrative uncertainty for both manufacturers and covered entities. 4. Data Collection by Covered Entities A. Current Data Collection Practices and Challenges Sutter greatly appreciates HRSAs interest in understanding what additional data would need to be collected by covered entities under a rebate model. Sutter currently collects and maintains 340Brelated data through a combination of internal systems and established thirdparty vendors, using processes designed to support audit readiness, data integrity, and compliance. Routine reconciliation and validation activities help ensure accuracy and consistency across pharmacy and billing systems. Despite these practices, covered entities continue to face significant data collection challenges. For example, the current $1,000 limit of liability for platforms that transmit HIPAAprotected data presents an unreasonable risk to providers and does not reflect the realities of modern dataexchange demands. Covered entities also encounter ambiguity in required data fields. When data collection elements lack clear definitions, standardized formatting, or explicit guidance, substantial time must be devoted to interpreting expectations, thereby increasing the administrative burden and creating variability in reporting. These documentation challenges are compounded by the volume and sensitivity of the information required for 340B oversight. Without clearer definitions and more structured expectations, covered entities will continue to face barriers that add cost and administrative complexity under any rebatebased model. B. Importance of Clear Data Standards and Privacy Guardrails Greater specificity in required data elements would be essential to prevent variable interpretations and ensure consistent reporting under any rebate-based model. A single, welldefined set of data standards would help improve data integrity and minimize the administrative burden associated with inconsistent or unclear reporting expectations. A functioning rebatebased approach would therefore require HRSA to publish a uniform data dictionary with standardized field names, definitions, and formatting expectations to ensure consistent implementation across all manufacturers. Any expanded data collection framework would also require robust privacy and security guardrails. Where additional PHI or sensitive claims data are required, strong security protections would be essential, including appropriate vendor safeguards, clear allocation of liability, and strict limits on how data may be accessed, used, stored, or shared. This, in turn, would require HRSA to mandate uniform data use and security agreements for participating vendors and manufacturers, with minimum security standards. Finally, Sutter is concerned that expanded or illdefined data elements could inadvertently enable the creation of arbitrary rules defining 340B eligibility. HRSA would therefore need to implement guardrails that prohibit the use of data elements or reporting fields for purposes beyond statutory duplicate discount prevention unless explicitly authorized. C. Recommendation for a Neutral Claims Clearinghouse Sutter does not support the implementation of a 340B rebate model, but if one moves forward, we recommend the use of a neutral claims clearinghouse. Any vendor or intermediary selected by HRSA would need to be fully independent and not aligned with manufacturers, PBMs, GPOs, or other stakeholders with competing financial interests. A neutral entity would be expected to promote standardization and uniform data expectations while reducing administrative burden, rather than introducing additional complexity or cost. A neutral clearinghouse would also promote consistency across data submission and downstream reconciliation processes. Even if a single platform were used to interface with all participating manufacturers, as contemplated in the previously proposed rebate pilot, variation in manufacturer behavior and implementation practices would remain. A neutral clearinghouse would provide the independent governance needed to ensure that all manufacturers follow the same standards and that covered entities are not subject to differing requirements. In establishing a clearinghouse, Sutter recommends that HRSA avoid granting any single commercial entity disproportionate or exclusive control over clearinghouse functions. The model must ensure that governance of 340B data submission and reconciliation is independent and subject to meaningful oversight, rather than vested longterm in a single commercial entity. It should also minimize unnecessary middleman layers that increase costs without improving outcomes. Sutter further recommends that HRSA establish clear conditions of participation governing how data submitted to the clearinghouse may be used, shared, and retained. Uniform guardrails would help ensure that reporting expectations are consistent and that sensitive information is not repurposed in ways that disadvantage covered entities. Finally, the reconciliation phase is often more complex and resourceintensive than initial submission, and covered entities may need to engage additional vendors beyond traditional claims processing partners. A neutral clearinghouse that centralizes expectations would promote consistency in data governance and support more uniform program oversight. 5. Manufacturer Efforts to Avoid Duplicate Discounts Sutter appreciates HRSAs effort to clarify definitions and reduce duplicate discounts. However, we emphasize the importance of distinguishing between statutory Medicaid duplicate discounts and commercial practices that manufacturers also deem as duplicate discounts. Maintaining this distinction is critical to ensuring that efforts to prevent statutory duplicate discounts do not inadvertently enable new, nonstatutory restrictions to protect other commercial interests of manufacturers. The statutory duplicate discount prohibition under 42 USC 256b(a)(5)(A)(i) is a longstanding safeguard designed to prevent manufacturers from providing both the 340B discounted price and the Medicaid rebate on the same drug unit. This requirement is welldefined in statute and grounded in Medicaid program integrity. In contrast, manufacturers are frequently subject to commercial pressures in their arrangements with PBMs, including paytoplay models for preferred formulary placement. A range of other PBM practicesmany of which are well documentedcan result in commercial rebate overlaps. Nevertheless, manufacturers continue to conflate two distinct commercial phenomena under the single label of duplicate discounts. Specifically, manufacturers have regularly conflated their own voluntary PBM rebate arrangements with the statutorily defined duplicate discount, effectively laundering a selfcreated commercial cost through a regulatory category originally intended to describe coveredentity misconduct. Over time, this has contributed to a form of definitional capture of the duplicate discount concept, extending its meaning beyond congressional intent and shifting responsibility to covered entities for a problem that manufacturers, in significant part, have created through their own commercial practices. Given that statutory duplicate discount protections already exist, Sutter does not believe a rebatebased model is necessary to prevent duplicate discounts under the 340B Program. If HRSA nevertheless pursues such an approach, it should be narrowly designed to address only statutory Medicaid duplicate discounts and should not introduce new data submission requirements that could enable manufacturers to impose restrictions that are not authorized by law. To promote consistency and reduce variability, HRSA should consider the use of a neutral claims clearinghouse to standardize data used for duplicate discount prevention and minimize manufacturer-driven variation. For these reasons, Sutter recommends HRSA: Limit duplicate discount safeguards to those expressly required by statute; Prohibit manufacturers from using voluntary commercial rebate arrangements, PBM- driven practices, or data collection requirements as de facto 340B restrictions by conflating those practices with the statutorily defined duplicate discount; and Ensure any rebatebased model does not expand manufacturer discretion or create new operational burdens on covered entities. Sutter encourages HRSA to design any rebatebased approach that preserves the narrow statutory scope of duplicate discount protections and avoids inadvertently creating new barriers to accessing 340B pricing. 6. Required Reporting A. Manufacturer Reporting Requirements As suggested above, Sutter recommends that HRSA adopt a neutral claims clearinghouse model for any 340B rebate-based reporting structure to provide a single, standardized mechanism for manufacturers to submit required information and for HRSA to evaluate compliance. To support transparency and program integrity while minimizing burden on covered entities, Sutter recommends that HRSA focus required reporting on a small set of highvalue metrics. One particularly meaningful reporting element would be the percentage of denials issued by each manufacturer, calculated consistently across the clearinghouse. This metric would support programwide transparency by establishing a consistent benchmark for covered entities to evaluate manufacturer performance and identify outlier behavior. B. Public Data Sharing by HRSA Sutter recommends that, if a rebate-based model is implemented, HRSA publish an annual public report summarizing key program indicators to provide meaningful program-wide visibility without imposing unnecessary burden. This report should include aggregate denial rates, the timeliness of rebate payments, compliance with documentation requirements, and related operational trends. A yearly reporting cadence would provide meaningful visibility into program performance and help parties improve their communication and data submission quality while balancing administrative feasibility. 7. 340B Program Integrity and Broader Policy Considerations Sutter does not support implementing a 340B rebate model and remains concerned that such an approach would undermine key features of the existing 340B framework. Since Congress established the 340B Program more than 30 years ago, its structure has relied on upfront discounts as the primary mechanism for supporting safetynet providers. A rebatebased model would represent a significant departure from this longstanding statutory design. If HRSA pursues this avenue, we urge the agency to fully consider the significant operational, financial, compliance, and administrative infrastructure that covered entities have built in reliance on longstanding 340B Program guidance. Any major policy shift must account for these reliance interests to avoid undue disruption and unintended consequences. To better understand the full impacts of a rebate model, Sutter has prepared updated analyses showing the financial and operational effects of shifting from upfront discounts to delayed rebates. Please see the chart below, which shows a significant rise in carrying costs during the early life of this potential model. *Based on proposed 340B Rebate model; carrying costs are for unknown period of time These findings are not theoretical projections. These analyses reflect real, tangible carrying costs and are legitimate expenses that will be incurred. The projections are likely to increase as Sutter expands to meet growing patient needs, reaching more eligible patients and providing $8.1 million $21.5 million 0 5 10 15 20 25 30 35 Dollars (in millions) Sutter Health Projected Annual Medication Carrying Costs* by IRA Cohort 2025 Cohort (10 products) 2026 Cohort (15 products) more comprehensive services. We have significant concern that a meaningful portion may never be recovered. Our experience operating within the manufacturer ecosystem on the Beacon (specifically 340B ESP) platform has shown that a portion of transactions are ultimately rejected, and we have every reason to believe this risk is equally present here. The reality is that it requires very little effort for manufacturers to introduce friction, whether procedural, administrative, or operational, to protect even a modest portion of their financial interest at stake. This pattern is well-documented in our experience and cannot be dismissed when evaluating the true financial exposure this arrangement represents for covered entities. Our findings indicate that financial strain and administrative burden would increase significantly over time. From Sutters perspective, a rebatebased model does not enhance program integrity and may instead complicate HRSA oversight by introducing fragmented and variable implementation practices. While HRSA asks whether a rebate model could reduce diversion, improve pricing transparency, or help manufacturers avoid duplicate discounts, Sutter is concerned that these outcomes are not guaranteed and, in some cases, may be more difficult to achieve under a decentralized rebate framework. Covered entities would face increased operational complexity while manufacturers would gain additional discretion over key aspects of the program, which may not lead to more transparent or consistent outcomes. For these reasons, Sutter Health encourages HRSA to proceed with caution and ensure that any potential rebate pilot is accompanied by strong guardrails, clear data standards, and a neutral infrastructure, such as a neutral claims clearinghouse, to promote consistency and reduce administrative burden. Above all, HRSA should ensure that any proposal strengthens, rather than destabilizes, the core statutory intent and longstanding operational integrity of the 340B Program. 8. Conclusion We appreciate your consideration of our comments and remain committed to supporting constructive program improvements. Should you have questions, please do not hesitate to contact me by phone at 916-718-2085 or email at Jonathan.Williams@sutterhealth.org. Sincerely, Jonathan Williams Vice President of Government Affairs Sutter Health
HRSA-2026-0001-2024Mosaic Community Health2026-04-20T04:00Z36,454 chars
See attached file(s). April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mosaic Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comments deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B Drug Pricing Program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Mosaic Community Health has been a trusted healthcare partner in Central Oregon for 24 years. Starting with a single site in Prineville, we now have 16 clinics throughout the region, including Bend, Madras, Prineville, Redmond, Sisters, and two mobile clinics. We provide high-quality, whole-person healthcare services for 37,000 patients, primarily for those who are uninsured, underinsured, or on Medicaid. Our mission is to provide trusted quality care, with compassion and support for all. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. At Mosaic Community Health, this will impact: Any number of our 28,112 CHC patients who receive nearly 80,000 prescriptions annually from our pharmacies. Current administrative costs for our 340B program o Staff: ~ $400k per year Vendor/TPA fees: $2,013,000 Our program revenue is specifically used to: o Provide low-to-no cost medications to patients who otherwise would not be able to afford their care. o Provide direct financial assistance for insured patients to get through their deductible period o Support clinical services that are not revenue-producing, such as: Mobile Clinics Clinical Pharmacy Services Nutrition Services Community Health Workers Language Access Services We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 3 We have significant concerns about the impacts a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 4 discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Mosaic Community Health provided over $675,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Mosaic Community Health anticipates needing 1.25 additional FTEs as well as increased vendor agreements to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Mosaic Community Health anticipates an increase of $115,000 annually to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Mosaic Community Health anticipates needing an additional 1.25 FTE to assist with accounting, reconciliation and submission of good-faith inquires required to ensure we receive every rebate we are eligible for. An internal time study indicates, on average, each claim will require around 15 min in total. Between the 2026 and 2027 MDPNP drugs, Mosaic Community Health anticipates around 10,000 rebate submission claims per year which equates to 2,500 additional staff hours required annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Only considering additional staff costs, Mosaic Community Health anticipates an additional annual salary increase of $218,750 to meet the needs to a Rebate program. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mosaic Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 28,112 patients, the total projected increase in expensesincluding labor, vendor agreements, and ITis estimated at $333,750 annually. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 6 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 42 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 43 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Oregon with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 7 records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 8 medications, based on a patients income and family size. At Mosaic Community Health we are able to use program revenue to reduce medication costs for patients by: Utilizing a sliding fee scale to reduce patient out-of-pocket costs anywhere from $0 to $8 depending on financial status Absorbing patient insurance plan deductibles to provide medication they could not otherwise afford There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC- specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 9 Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Financial Impact of Rebate Denials and Delays Mosaic Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $127,000 for 2026/2027 drugs. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 10 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 11 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E Mosaic Community Health 541-383-3005 MosaicCH.org 12 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Mosaic Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program to allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mosaic Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mosaic Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Steve Strang, CFO at steve.strang@mosaicch.org. Sincerely, Megan Haase, FNP Chief Executive Officer Mosaic Community Health Docusign Envelope ID: C4C88545-F525-8AAF-8224-ECD58C71413E
HRSA-2026-0001-2025HealthHIV2026-04-20T04:00Z21,531 chars
The proposed 340B rebate model introduces added administrative and financial considerations for HRSA-covered entities and related HIV programs, with implications for how care is delivered and sustained. It also brings cash-flow and operational complexities that could affect patient access and the stability of the HIV safety net. If implemented, it will require clear safeguards for the providers in these programs, including workable timelines, strengthened oversight, and auditing to ensure the model functions as intended without disrupting care. April 20, 2026 Thank you for the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) Request for Information on the proposed 340B Rebate Model Pilot Program. Our submission focuses primarily on implications for HRSA-covered entities (CEs) and related Ryan White, Ending the HIV Epidemic (EHE), and Section 318 programs across operations, financing, and patient access. And while we dont provide detailed quantitative or operational metrics, we offer a grounded account of how these models function in practice and where they create risk for the HIV safety net. As background, HealthHIV is a national non-profit working with healthcare organizations, communities, and providers to advance effective HIV, viral Hepatitis, and sexually transmitted infection (STI) care through education and training, technical assistance and capacity building, advocacy, communications, and health services research and evaluation. HealthHIV submits this response grounded in decades of experience supporting education for providers and public programs that depend on uninterrupted and effective antiretroviral therapy (ART) for HIV care. Executive Summary: The proposed 340B rebate model introduces added administrative and financial considerations for HRSA-covered entities and related HIV programs, with implications for how care is delivered and sustained. It also brings cash-flow and operational complexities that could affect patient access and the stability of the HIV safety net. If implemented, it will require clear safeguards for the providers in these programs, including workable timelines, strengthened oversight, and auditing to ensure the model functions as intended without disrupting care. Additional Context: The 340B program isnt perfect. In large (often for-profit) hospital systems and specialty care centers with their own pharmacies, the way these systems are structured and how they make money from pharmacy operations have pushed the program beyond its original intent. These systems are largely driving the call for reform, including this Pilot. Those concerns have long been raised by HRSA CEs that deliver HIV community services, which operate under defined scopes of work, contracts, and regular auditing requirements. But those standards are not applied in the same way across larger systems, where much of the drift is occurring. This pilot puts HRSA CEs in double jeopardy, first from compliance and now from cash- flow concerns. HRSA CEs (including Ryan White-funded providers), as well as EHE, and Section 318-funded providers are subject to audits and oversight, with compliance monitoring by the HRSA Office of Pharmacy Affairs (OPA) for 340B entities and programmatic and fiscal oversight tied to grants and scopes of work. In consolidated systems, program savings often dont make it back to patient care. That creates pressure to grow and capture more of it. Thats the issue. A rebate model moves in a different direction without addressing the underlying issues that call for stronger oversight and real auditing of "bad actors." It shifts financial risk onto HIV providers and disrupts how care is delivered. All of that weakens the HIV care infrastructure and leaves those problems in place. And this concern isnt theoretical; its how these programs actually operate in practice. Any rebate model, as implemented, should preserve existing ADAP (AIDS Drug Assistance Program) structures and avoid creating parallel systems that disrupt how these programs actually work today. If HRSA moves forward with the rebate model, it needs to more accurately acknowledge the risk and depict how ADAPs, Ryan White, EHE, and Section 318 programs actually operate. These programs sit within and often straddle different systems and structures. Not all 340B or Ryan Whiterelated CEs function the same wayand that matters for how the rebate model would hit them. Some are clinical providersplaces that see patients directly. They prescribe medications, keep medical records, and deliver care. They can be Ryan White clinics, community health centers, or clinics. Their ability to ensure cash flow is resourced appropriately isnt uniform. Other entities may operate their programs through multiple administrative layers; they dont see patients directly but still manage payment and coordinationpaying for medications, handling benefits, working through pharmacies, and coordinating services. They often use contract pharmacies that dispense drugs on behalf of a CE that cant afford to run its own pharmacy. They may also involve a third-party administrator (TPA) to manage those arrangements. Those layers add cost and create ongoing cash flow pressure because the entity still has to pay those partners even though it isnt delivering care itself. At the same time, they hold contracts that allow them to use those funds within their scopes of work. The patient may not interact with the CE at the pharmacy counter, even though they are engaged with the CE for care. They may fill prescriptions at a contract pharmacy rather than a CE-owned pharmacy. While some models have the capacity to do it all, it doesnt make programs with less cash flow outlay any less important in the HIV ecosystem. These programs still help patients access and stay on medications and remain in lifelong care, and serve an important role within the ecosystem. They can also involve both medical and non- medical components, such as supportive services, to coordinate patient care, coverage, and adherence. They dont prescribe, but theyre central to keeping patients involved in their lifelong care. In many cases, the entity responsible for purchasing or managing drugs is not the same entity that writes the prescription or holds the clinical record. And that split matters. Meeting these requirements would force system changes and contract revisions under state procurement rules. This mandate doesnt come with funding. Purchasing at WAC (the Wholesale Acquisition Cost) creates immediate cash flow exposure and risks, especially when federal awards are delayed or come in tranches, and especially for smaller programs, but in the meantime, expenditures and cash outlays for HRSA CEs and related Ryan White, EHE, and Section 318 programs dont cease. States might further engage in the use of carve-outs to control and direct how dollars are used, especially through ADAP and Medicaid structures. The point, historically, is an intentional steering of funds, not just leveraging. This is a way of shaping program dollars around state priorities, but those dollars may not actually reach community-level services or patient needs in the same way. Requirements should also align with Medicaid and other federal programs to prevent duplicate discounts and conflicting claims across payers. Different manufacturer portals all have their own rules, so providers have to navigate inconsistent requirements. The model should include clear reconciliation processes and standardized denial requirements to ensure claims are handled consistently and transparently across entities. But when claims are denied, its often unclear why. Managing these systems takes extra time and resources, and if theyre not handled properly, they can also create risks around patient data privacy. Short submission windowssuch as the 45- day requirementdont align with how these programs operate. They dont align with state processes, funding cycles, or how claims are generated. That means that any single claim doesnt always sit with just one CE. When there are short windows or first-come rules, the claim that gets submitted later can be denied even if its the correct onesimply because of timing. So decisions end up being based on who submitted first, not necessarily who is actually responsible for the claim. In short, the 340B program has always been a lifeline for HIV care, and it should be protected. Its benefits arent abstracttheyre the dollars that keep a case manager on staff, the labs that track viral suppression, and the premiums that stop lifesaving HIV treatment from being interrupted. Dropping a rebate model into this already fragile system risks accelerating and exacerbating the very outcomes already on the horizon. Coverage losses mean more people with no other options turning to existing safety-net programs. Premium hikes can also drive ADAP costs higher and stretch already flat budgets even thinner. ADAP shortfalls can force states to ration, cut eligibility, or even reduce formularies. And waitlists, long thought to be part of history, could once again be used to ration care. Taken together, these issues point to a mismatch between the model and the programs it depends on. Our requests are straightforward, but urgent for the communities we serve, and HHS must decide whether it intends to safeguard the HIV safety-net or potentially (further) weaken it through this pilot. That said, we respectfully request that you: 1. Exempt HIV and prevention drugs from the rebate pilot entirely, recognizing the substantial solvency risks to Ryan White programs and ADAPs. 2. If exemptions arent granted, require upfront chargebacks so CEs never have to pay more than the 340B ceiling price at purchase. 3. Centralize data submission under HRSA or some neutral clearinghouse, not across multiple manufacturer portals, with strict limits on required fields and independent privacy safeguards. 4. Guarantee rebate payments within ten days as enforceable, with penalties and interest for delays or denials. 5. Conduct impact assessments specific to HIV safety-net providers before any expansion, with public reporting on denial rates, payment timelines, and program solvency impacts. 6. Delay implementation for one year to allow Ryan White programs, ADAPs, and other HIV safety- net providers to build up the infrastructure, agreements, and financial reserves necessary to withstand a WAC-first purchase model without disrupting patient care. 7. Establish workable submission timelines and clear claim standards, including transparent denial reasons, and a process to resolve conflicting claims across CEs. 8. Strengthen oversight and auditing of the 340B program to address known issues directly, rather than shifting the model in ways that create new risks for providers and patients. Anything less will weaken the HIV safety-net at the exact moment that it is most needed. Sincerely, Scott D. Bertani Director of Advocacy, HealthHIV April 20, 2026 Thank you for the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) Request for Information on the proposed 340B Rebate Model Pilot Program. Our submission focuses primarily on implications for HRSA-covered entities (CEs) and related Ryan White, Ending the HIV Epidemic (EHE), and Section 318 programs across operations, financing, and patient access. And while we dont provide detailed quantitative or operational metrics, we offer a grounded account of how these models function in practice and where they create risk for the HIV safety net. As background, HealthHIV is a national non-profit working with healthcare organizations, communities, and providers to advance effective HIV, viral Hepatitis, and sexually transmitted infection (STI) care through education and training, technical assistance and capacity building, advocacy, communications, and health services research and evaluation. HealthHIV submits this response grounded in decades of experience supporting education for providers and public programs that depend on uninterrupted and effective antiretroviral therapy (ART) for HIV care. Executive Summary: The proposed 340B rebate model introduces added administrative and financial considerations for HRSA-covered entities and related HIV programs, with implications for how care is delivered and sustained. It also brings cash-flow and operational complexities that could affect patient access and the stability of the HIV safety net. If implemented, it will require clear safeguards for the providers in these programs, including workable timelines, strengthened oversight, and auditing to ensure the model functions as intended without disrupting care. Additional Context: The 340B program isnt perfect. In large (often for-profit) hospital systems and specialty care centers with their own pharmacies, the way these systems are structured and how they make money from pharmacy operations have pushed the program beyond its original intent. These systems are largely driving the call for reform, including this Pilot. Those concerns have long been raised by HRSA CEs that deliver HIV community services, which operate under defined scopes of work, contracts, and regular auditing requirements. But those standards are not applied in the same way across larger systems, where much of the drift is occurring. This pilot puts HRSA CEs in double jeopardy, first from compliance and now from cash-flow concerns. HRSA CEs (including Ryan White-funded providers), as well as EHE, and Section 318-funded providers are subject to audits and oversight, with compliance monitoring by the HRSA Office of Pharmacy Affairs (OPA) for 340B entities and programmatic and fiscal oversight tied to grants and scopes of work. In consolidated systems, program savings often dont make it back to patient care. That creates pressure to grow and capture more of it. Thats the issue. A rebate model moves in a different direction without addressing the underlying issues that call for stronger oversight and real auditing of "bad actors." It shifts financial risk onto HIV providers and disrupts how care is delivered. All of that weakens the HIV care infrastructure and leaves those problems in place. And this concern isnt theoretical; its how these programs actually operate in practice. Any rebate model, as implemented, should preserve existing ADAP (AIDS Drug Assistance Program) structures and avoid creating parallel systems that disrupt how these programs actually work today. If HRSA moves forward with the rebate model, it needs to more accurately acknowledge the risk and depict how ADAPs, Ryan White, EHE, and Section 318 programs actually operate. These programs sit within and often straddle different systems and structures. Not all 340B or Ryan Whiterelated CEs function the same wayand that matters for how the rebate model would hit them. Some are clinical providersplaces that see patients directly. They prescribe medications, keep medical records, and deliver care. They can be Ryan White clinics, community health centers, or clinics. Their ability to ensure cash flow is resourced appropriately isnt uniform. Other entities may operate their programs through multiple administrative layers; they dont see patients directly but still manage payment and coordinationpaying for medications, handling benefits, working through pharmacies, and coordinating services. They often use contract pharmacies that dispense drugs on behalf of a CE that cant afford to run its own pharmacy. They may also involve a third-party administrator (TPA) to manage those arrangements. Those layers add cost and create ongoing cash flow pressure because the entity still has to pay those partners even though it isnt delivering care itself. At the same time, they hold contracts that allow them to use those funds within their scopes of work. The patient may not interact with the CE at the pharmacy counter, even though they are engaged with the CE for care. They may fill prescriptions at a contract pharmacy rather than a CE-owned pharmacy. While some models have the capacity to do it all, it doesnt make programs with less cash flow outlay any less important in the HIV ecosystem. These programs still help patients access and stay on medications and remain in lifelong care, and serve an important role within the ecosystem. They can also involve both medical and non-medical components, such as supportive services, to coordinate patient care, coverage, and adherence. They dont prescribe, but theyre central to keeping patients involved in their lifelong care. In many cases, the entity responsible for purchasing or managing drugs is not the same entity that writes the prescription or holds the clinical record. And that split matters. Meeting these requirements would force system changes and contract revisions under state procurement rules. This mandate doesnt come with funding. Purchasing at WAC (the Wholesale Acquisition Cost) creates immediate cash flow exposure and risks, especially when federal awards are delayed or come in tranches, and especially for smaller programs, but in the meantime, expenditures and cash outlays for HRSA CEs and related Ryan White, EHE, and Section 318 programs dont cease. States might further engage in the use of carve-outs to control and direct how dollars are used, especially through ADAP and Medicaid structures. The point, historically, is an intentional steering of funds, not just leveraging. This is a way of shaping program dollars around state priorities, but those dollars may not actually reach community-level services or patient needs in the same way. Requirements should also align with Medicaid and other federal programs to prevent duplicate discounts and conflicting claims across payers. Different manufacturer portals all have their own rules, so providers have to navigate inconsistent requirements. The model should include clear reconciliation processes and standardized denial requirements to ensure claims are handled consistently and transparently across entities. But when claims are denied, its often unclear why. Managing these systems takes extra time and resources, and if theyre not handled properly, they can also create risks around patient data privacy. Short submission windowssuch as the 45-day requirementdont align with how these programs operate. They dont align with state processes, funding cycles, or how claims are generated. That means that any single claim doesnt always sit with just one CE. When there are short windows or first-come rules, the claim that gets submitted later can be deniedeven if its the correct onesimply because of timing. So decisions end up being based on who submitted first, not necessarily who is actually responsible for the claim. In short, the 340B program has always been a lifeline for HIV care, and it should be protected. Its benefits arent abstracttheyre the dollars that keep a case manager on staff, the labs that track viral suppression, and the premiums that stop lifesaving HIV treatment from being interrupted. Dropping a rebate model into this already fragile system risks accelerating and exacerbating the very outcomes already on the horizon. Coverage losses mean more people with no other options turning to existing safety-net programs. Premium hikes can also drive ADAP costs higher and stretch already flat budgets even thinner. ADAP shortfalls can force states to ration, cut eligibility, or even reduce formularies. And waitlists, long thought to be part of history, could once again be used to ration care. Taken together, these issues point to a mismatch between the model and the programs it depends on. Our requests are straightforward, but urgent for the communities we serve, and HHS must decide whether it intends to safeguard the HIV safety-net or potentially (further) weaken it through this pilot. That said, we respectfully request that you: Exempt HIV and prevention drugs from the rebate pilot entirely, recognizing the substantial solvency risks to Ryan White programs and ADAPs. If exemptions arent granted, require upfront chargebacks so CEs never have to pay more than the 340B ceiling price at purchase. Centralize data submission under HRSA or some neutral clearinghouse, not across multiple manufacturer portals, with strict limits on required fields and independent privacy safeguards. Guarantee rebate payments within ten days as enforceable, with penalties and interest for delays or denials. Conduct impact assessments specific to HIV safety-net providers before any expansion, with public reporting on denial rates, payment timelines, and program solvency impacts. Delay implementation for one year to allow Ryan White programs, ADAPs, and other HIV safety-net providers to build up the infrastructure, agreements, and financial reserves necessary to withstand a WAC-first purchase model without disrupting patient care. Establish workable submission timelines and clear claim standards, including transparent denial reasons, and a process to resolve conflicting claims across CEs. Strengthen oversight and auditing of the 340B program to address known issues directly, rather than shifting the model in ways that create new risks for providers and patients. Anything less will weaken the HIV safety-net at the exact moment that it is most needed. Sincerely, Scott D. Bertani Director of Advocacy, HealthHIV
HRSA-2026-0001-2026Florida Hospital Association2026-04-20T04:00Z18,605 chars
See attached comment letter. Page 1 of 8 April 20, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Submitted via regulations.gov Re: Request for Information (RFI): 340B Rebate Model Pilot Program, Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of our more than 260 member hospitals and health systems, the Florida Hospital Association (FHA) appreciates the opportunity to comment on the Request for Information (RFI): 340B Rebate Model Pilot Program, Docket No. HRSA- 2026-03042. I. INTRODUCTION Founded in 1927, FHA is the leading voice for health care in the state of Florida. Through representation and advocacy, education and informational services, FHA supports the mission of our member hospitals and health systems to provide the highest quality of care to the patients they serve. Fifty-two of our member hospitals participate in the 340B Drug Pricing Program, many of which are critical access hospitals and childrens hospitals, while others are rural referral centers, freestanding cancer hospitals, and Medicare disproportionate share hospitals that serve a significant number of low-income patients and are committed to providing quality health care to all patients regardless of their ability to pay. Many of these hospitals, including critical access hospitals that serve as a lifeline for Floridas rural communities, operate on negative margins (and, in some cases, extremely negative margins) or exceedingly narrow margins. All of Floridas 340B hospitals use their savings through the program exactly as Congress intended to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. A hospital on the Gulf Coast uses its savings to provide free community health education and screenings, a community garden and food pharmacy that provides nutritious food to patients with diabetes, hypertension and obesity, and primary and specialty care to underinsured and underserved families in their community. A hospital in North Florida uses its Page 2 of 8 savings to provide free discharge medications to low-income patients and to support critical clinical services, including behavioral health services for adults and adolescents, oncology and infusion care, and a dedicated heart failure clinic. A hospital in Central Florida uses its savings to provide drug prescriptions and primary care to indigent patients, as well as transportation services. A childrens hospital uses its savings to provide comprehensive care for infants at risk for congenital health conditions, treatment for sickle cell disease and hemophilia, pediatric cancer care, and diabetes care to improve health outcomes for all children, including those at high-risk for chronic illness. All of these hospitals reinvest their 340B savings directly into the communities, providing targeted, tailored solutions to address the unique needs of their communities. In addition to reinvesting these savings into their communities, these hospitals have developed and invested in extensive program integrity protocols, including routine internal and external auditing to ensure compliance with all 340B program requirements. The fundamental question at the heart of the RFI is whether HRSA should implement a rebate model under the 340B program instead of the longstanding upfront discount model that has worked successfully for both manufacturers and covered entities for decades. The answer to that fundamental question is a resounding no. The reality is that any shift from the longstanding upfront discount to a rebate model will impose enormous costs and burdens on 340B hospitals that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the Congressional intent of the program, which was focused on the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which 340B hospitals have relied on for years, is the best way to fulfill Congresss purpose behind the program and preserve access to critical health care services for the most vulnerable patients. II. THERE IS NO REASON TO IMPLEMENT A REBATE MODEL FHA strongly opposes any redesigning of the 340B program from the longstanding upfront discount model to a back-end rebate model that will allow drug companies to unilaterally refuse to issue rebates to hospitals. Moreover, FHA has serious concerns that the impetus for HRSAs interest in a Page 3 of 8 rebate model was motivated not by its own concerns of program integrity, but by relentless attempts by drug companies to impose such a model on covered entities without authorization. As we explained in our comments to HRSAs publication of the 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program last fall, despite the repeated cries of drug companies, there is no program integrity problem among hospitals that needs to be addressed by a rebate model. To the contrary, the data demonstrate that drug companiesnot hospitalsare responsible for the bulk of 340B program integrity violations. HRSAs own audit data show that between fiscal years (FY) 2018 and 2022, audit findings across 340B hospitals for duplicate discount and diversion decreased by a combined 62%.1 Only 10.7% of 340B hospital audits had at least one finding of diversion; just 13.2% had a duplicate discount finding in FY 2022. As with any program as regulatorily and operationally complex as 340B, hospitals have adapted their 340B programs to better comply with all rules and regulations. For example, 340B hospitals have developed robust internal audit protocols to conduct periodic self-audits of their 340B program and, in some cases, leveraged technologyat a significant cost to the hospitalto mitigate against any inadvertent instances of diversion or duplicate discounts. While HRSAs data demonstrates substantial compliance by 340B hospitals, the same cannot be said of drug companies. Between FYs 2018 and 2022, 60% of drug companies had at least one adverse audit finding. And the trends are even more notable with respect to audit findings requiring repayment. In FY 2022, 75% of drug companies that were audited required repayment to 340B hospitals while only 28% of 340B hospitals audit findings involved any repayments.2 The evidence is cleardrug companies, not hospitals, are the entities with a 340B program integrity problem. The data further undermines the drug companies claim that HRSA is not conducting enough oversight of 340B hospitals. The data show that HRSA conducts approximately 160 audits of 340B hospitals annuallyor about 6% of the 340B hospital field. By contrast, it conducts just five audits of drug companiesor about .06% of participating drug companies. In combination with the data showing the astonishing rate of audit findings for drug companies in a much smaller sample size, this discrepancy underscores the need for more scrutiny on drug companiesnot 340B hospitals. 1 https://www.aha.org/guidesreports/2025-06-16-more-drug-company-oversight-needed-maintain- compliance-340b-program-rules 2 https://www.aha.org/guidesreports/2025-06-16-more-drug-company-oversight-needed-maintain- compliance-340b-program-rules Page 4 of 8 Thus, drug companies are advocating for a 340B rebate model as a solution to a problem that does not exist. FHA continues to have serious concerns that the introduction of a rebate pilot will give in to the drug companies transparent crusade to undermine the 340B program. By suggesting that it may expand the pilot to even more drugs, HRSA would give the drug companies exactly what they seeka significantly diminished 340B program that puts drug company profits over the patients the program was meant to protect. We urge HRSA to reject these efforts to undermine the 340B program and to avoid the creation of a rebate model. Instead, we suggest HRSA continue to monitor, enforce, and ensure compliance with the program through clear directives to manufacturers and, if necessary, enforcement action. III. A REBATE MODEL WILL HARM PATIENTS AND PROVIDERS Shifting to a back-end rebate model would require hospitals to purchase drugs at a higher price and then wait for manufacturers to issue rebates. This would put providers already facing thin or negative operating margins under enormous financial strain, threatening their ability to continue providing essential health care services to low-income and underserved patients in their communities. We strongly oppose a rebate model that puts drug company profits over patients. A. Administration, Operational, and Financial Concerns Any rebate program would require hospitals to spend significant sums on new administrative costs. When Floridas 340B hospitals chose to participate in the 340B program, they understood that they would need to incur some reasonable administrative costs and, thus, designed their hiring, operations, and program administrationincluding robust internal auditing and compliance measuresaround an upfront discount model. A shift to an entirely new type of model would necessarily demand new resources, imposing considerable additional costs and burdens on hospitals that go far above and beyond what they reasonably expected and planned for as a 340B hospitaland far above and beyond what they are experiencing now. Administrative and operational costs include building new data infrastructure, hiring additional staff, and managing complex tracking systems to comply with rebate model program requirements, submit and track rebate submission, and challenge denials and chase rebate payments. These added expenses will not be offset by any increase in savings, making the rebate model a net financial loss for 340B hospitals. Page 5 of 8 B. Cash-Flow Impacts and Access Concerns Unlike the existing upfront discount mechanism, any rebate mechanism would force hospitals to effectively provide drug companies interest-free loans as they await the discounts that are owed under the 340B statute. Even if drug companies are required to pay within 10 days of receiving the rebate request as contemplated under the prior iteration of the rebate pilot, that delayed discount will have a significant impact on hospitals and the patients they serve. Hospitals that are eligible to participate in the 340B program are by definition treating the most vulnerable patient populations. Many of Floridas 340B hospitals will be extremely challenged or unable to acquire 340B drugs without upfront discounts while also maintaining other services. Indeed, any delay in payment would not be just a logistical inconvenience; for some hospitals, it poses a serious financial risk. One of our member hospitals reported that its monthly 340B savings nearly matches its total monthly drug spend. Under the prior iteration of the rebate pilot, this hospital estimated an additional $10 million per month in unreimbursed drug costs that would accumulate until rebates are eventually (and, hopefully) returned. That level of cash outlay, which is not unique to this hospital, is simply unsustainable and will jeopardize hospitals ability to reach more eligible patients and provide more comprehensive services as Congress intended when it created the 340B program. Moreover, and as described above, 340B hospitals use their savings in many ways, including funding a range of community benefits. In 2020 alone, 340B hospitals across the country provided $84.4 billion in community benefits such as medication therapy management, diabetes education and counseling, and access to free or discounted medications.3 With the need to float millions of dollars to drug companies, coupled with the potential for rebate delays and denials, 340B hospitals would have far fewer funds to devote to providing community benefits and far fewer savings to devote to maintaining, improving, and expanding access to an array of vital patient programs and services. Simply put, shifting to a back-end rebate model would undermine the critical services hospitals provide to their communities through their 340B savings and the vulnerable patients who depend on them. 3 https://www.aha.org/guidesreports/2023-10-19-340b-hospital-community-benefit-analysis Page 6 of 8 C. Hospital Reliance Interests in the Upfront Discount Model The RFI invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. We respectfully suggest that this framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates.4 Florida hospitals reasonably relied on this history when designing its internal operations (including compliance mechanisms), staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals, there is no reason to switch to a rebate mechanism, even in so-called pilot form. D. Alternatives and Scope-Limiting Measures The RFI invites comments on proposed alternatives and scope-limiting measures to inform a rebate pilot design, including safeguards to promote the integrity of the 340B Program, and avoid duplicate discounts, as well as consistency with the MDPNP [Medicare Drug Price Negotiation Program] nonduplication provision. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on 340B hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interest of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations (AHA) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate 4 Indeed, as the United States Court of Appeals for the First Circuit recently observed, HHS has historically determined a rebate mechanism is both inferior to Section 340Bs current upfront-discount model and disruptive to safety-net hospitals. Am. Hosp. Assn v. Kennedy, 164 F.4th 28, 32 (1st Cir. 2026). Page 7 of 8 mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP duplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, we respectfully submit that the costs of any rebate program will outweigh any expected benefits and urge HRSA to abandon the concept altogether and embrace a neutral, third- party clearinghouse. As we explained in our comments last fall, if HRSA is intent on implementing a rebate pilot, we strongly suggest the imposition of significant guardrails to mitigate the harm such a model would have on providers and patients, including: Requiring drug companies to cover the full range of costs associated with a rebate model, including all administrative costs. Establishing strict enforcement guidelines for drug company non-compliance, including HRSA exercising its authority under the 340B statute to impose civil monetary penalties for each instance of noncompliance (including improper rebate denials, delayed rebate payment, and failure to pay for hospital costs and administrative burdens) and HRSA using its statutory authority to require drug companies to pay interest on any failure to pay rebates in a timely manner. Establishing a centralized platform for data submissions that are managed by HRSA or a neutral, third-party entity. Creating a dedicated process to resolve rebate disputes which allows for expedited review and timely determinations of any rebate-related claims disputes. Requiring denial documentation to provide a thorough explanation for why a rebate will not be paid. Clarifying that drug companies cannot deny rebates based on unilateral contract pharmacy restrictions, as dozens have done since 2020. Defining how the agency will measure and determine the success of any pilot program, which should include heavily weighing improper delays and denials by drug companies. However, if HRSA chooses to move forward will this ill-conceived effort, it must allow hospitals and other covered entities to comment on the specifics of its new program. While we have endeavored to provide detailed comments informed by our members, we are doing so without precise knowledge of which drugs would be included in a rebate program and many other critical Page 8 of 8 details, such as data required, possible grounds for denial of rebates, dispute resolution process, and other guardrails. IV. CONCLUSION We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. If you have any questions, please do not hesitate to contact Kristen Dobson, FHAs General Counsel and Vice President of Regulatory Affairs, at kristend@fha.org. Sincerely, Mary C. Mayhew President and CEO Florida Hospital Association
HRSA-2026-0001-2027Peak Vista Community Health Centers2026-04-20T04:00Z38,495 chars
Please see attached file. TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Peak Vista Community Health Centers DATE: April 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Peak Vista Community Health Centers (Peak Vista) is the medical home for 70,195 patients in the Pikes Peak and East Central regions of Colorado. The 49,000 households we serve each year live in households with limited access to resources, with 63% living at or below the Federal Poverty Level (FPL) and 89% living at or below 200% of FPL. Providers at our 20 sites treat the whole person and whole family through integrated medical, dental, and behavioral health care. Patients largely reside in the Colorado Springs Metropolitan Area and 10% are located in a rural geographic service area. Within that population, 10% are elderly, 1% have self-identified as homeless and 2% identify themselves as veterans. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our 2 onsite and 71 contract pharmacies. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in my community and nationwide. The proposed 340B rebate model introduces material operational, financial, and compliance risks that are not feasible within current FQHC infrastructure. For our organization, the model would: Require upfront purchasing at Wholesale Acquisition Cost (WAC), creating sustained cash flow strain Introduce reimbursement delays, resulting in a structural mismatch with wholesaler payment terms Increase administrative burden requiring 1-2 additional FTEs, diverting resources from patient care Undermine our ability to accurately apply patient discounts at the point of sale Introduce risk to compliant Medicaid billing in Colorado Create exposure to rebate denials and delays without enforceable protections Peak Vista Community Health Centers page 2 Introduce significant complexity across our in-house operations and 71 contract pharmacy relationships Taken together, these impacts represent a fundamental disruption to care delivery, not an incremental operational change. Recommendation: Peak Vista Community Health Centers strongly recommends that Health Resources and Services Administration exempt all FQHCs from any 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026-03042), preserve the upfront discount structure that is central to the programs intent, and consider alternate means, such as a neutral claims data clearinghouse, to address 340B and MFP deduplication. For PVCHC, the rebate model is not an operational modification it is a fundamental restructuring of how care is financed and delivered. RFI Target Area 1: Costs to Covered Entities Current Administrative Costs Under the Upfront 340B Discount PVCHC operates a mature 340B program supported by established workflows, third-party administrator (TPA) relationships, and internal compliance processes. In the most recent fiscal year, PVCHC processed 106,447 separate 340B transactions. Administrative costs are driven primarily by: Staffing required to manage compliance, reporting, and oversight Third-party administrator services supporting contract pharmacy arrangements IT systems and reporting infrastructure Ongoing audit and compliance activities PVCHC currently dedicates approximately 1.0 FTE (~$89,000 annually) to manage 340B operations. These processes are stable, predictable, and integrated into existing pharmacy workflows. Administrative Costs Under a Potential 340B Rebate Model The proposed rebate model introduces significant incremental administrative and operational costs (both one-time and ongoing). Using the initial set of ten Medicare Fair Price (MFP) drugs as a proxy, PVCHC estimates: Upfront drug acquisition cost increase of approximately 8,612% Incremental annual cost exposure of approximately $9 million Additional administrative burden requiring ~2 FTE (~$200,000 annually) equivalent of pharmacy, accounting, & IT resources These estimates are based on: Historical purchasing volume for MFP drugs 340B pricing vs. Wholesale Acquisition Cost (WAC) comparisons Expected labor required for claim-level rebate tracking and reconciliation Activities Driving Incremental Costs The rebate model would require PVCHC to implement new functions that do not exist under the current model, including: Claim-level tracking and validation Peak Vista Community Health Centers page 3 Submission of rebate requests to multiple manufacturers Monitoring payment status and reconciling discrepancies Managing disputes for denied or delayed rebates Coordinating data across in-house and contract pharmacy arrangements These functions would significantly increase administrative complexity and reduce efficiency of existing 340B operations. Impact on Existing Administrative Structure The introduction of a rebate model does not replace existing administrative workit adds a parallel layer of complexity. Current 340B processes (compliance, audits, reporting) would still be required, while new rebate-related activities would operate concurrently. As a result, total administrative burden increases substantially rather than shifting. Even if structured to offset administrative costs, accurately quantifying and distributing such offsets would be operationally complex and unlikely to fully account for: Variability in claim volume Differences in contract pharmacy scale Ongoing dispute and reconciliation workload Staffing Impacts Implementation of a rebate model would require additional permanent staffing. PVCHC estimates the need for at least 2 additional FTEs, with responsibilities including: Rebate claim submission and tracking Payment reconciliation and reporting Dispute management and audit support These roles would be ongoing, not temporary. Importantly, this increase in administrative staffing would require reallocation of limited resources away from patient-facing roles, including clinical pharmacy services and community health workers. Each additional FTE dedicated to rebate management represents a direct tradeoff with patient care capacity. Systems and Infrastructure Requirements The rebate model would require significant modifications to existing systems and infrastructure, including: Pharmacy system enhancements to support individual claim-level tracking Custom reporting tools and dashboards Integration with manufacturer-specific submission platforms Expanded TPA functionality to support rebate workflows PVCHC anticipates: One-time IT investment to build required infrastructure Ongoing vendor and service fees to maintain rebate tracking capabilities These represent permanent structural costs, not temporary implementation expenses. Additional Costs and Operational Impacts Beyond direct administrative and IT costs, the rebate model introduces broader operational and patient care impacts. Operational Tradeoffs To absorb increased costs, PVCHC would be forced to evaluate: Scaling back non-revenue-generating but essential services Reducing clinic hours and access Peak Vista Community Health Centers page 4 Diverting staff from clinical care to administrative functions Reevaluating patient financial assistance programs Pricing and Compliance Impacts The rebate model disrupts real-time pricing by requiring purchases at WAC while final cost remains unknown until rebate adjudication. This creates: Need to estimate patient pricing rather than calculate it Increased financial risk from rebate delays or denials Challenges in maintaining compliance with prescription discounts Increased risk in Medicaid AAC billing, requirements for manual overrides and increased audit exposure Contract Pharmacy Impact For FQHCs that rely on contract pharmacy networks, the rebate model introduces significant additional complexity. PVCHC currently contracts with 71 pharmacies, each of which adds to the number of rebate pathways requiring tracking and reconciliation. TPAs are expected to pass through costs of rebate-tracking infrastructure through increased per-claim fees. At the same time, the financial and administrative burden may cause some contract pharmacies to reevaluate participation in the 340B program. Any reduction in contract pharmacy participation would directly limit patient access to affordable medications, particularly in rural or underserved areas. Summary The rebate model introduces: Significant new administrative and staffing requirements Substantial IT and infrastructure costs Increased financial and operational complexity Direct tradeoffs with patient care and access These impacts represent a fundamental expansion of administrative burden, not an incremental adjustment to current operations. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts Impact of Rebate Timing on Cash Flow The proposed rebate model creates a fundamental misalignment between drug purchasing costs and reimbursement timing that is not operationally sustainable for FQHCs. Under this model, PVCHC would be required to purchase medications at full WAC and then wait for rebate reimbursement. Even under an expedited framework (e.g., 10 days from submission), the operational reality includes additional time for claim stabilization, submission, and adjudication. This actually results in a multi-week gap between purchase and reimbursement. This timing gap creates a sustained working capital burden and introduces material financial risk, including: Cash Flow Instability Each prescription dispensed requires upfront capital that cannot be recovered in real Peak Vista Community Health Centers page 5 time, effectively requiring PVCHC to finance drug costs without access to corresponding revenue. Credit and Liquidity Constraints Purchasing at WAC significantly increases reliance on wholesaler credit and increases the likelihood of reaching credit limits, which may restrict the ability to procure medications. Increased Financing Costs To maintain operations, PVCHC may be forced to rely on external financing or extended credit, with interest rates above 5%, introducing additional, unrecoverable costs. To mitigate the cash flow impacts above, PVCHC may be forced to rely on external financing and credit, creating additional interest payments of up to $500,000 of unrecoverable costs in our full-year projections. Current Wholesaler Payment Terms PVCHC operates under standard wholesaler payment terms, which require payment within approximately 15 days of purchase. These terms generally do not differ between 340B and non- 340B drugs. PVCHC typically remits payment within these required timelines to maintain purchasing access and avoid penalties. PVCHC does not rely on prompt pay discounts or similar incentives as a primary cost management strategy. Comparison to Rebate Model Timing A rebate-based model fundamentally alters payment timing compared to current arrangements. Under current operations: Drug acquisition cost is known at the time of purchase Payment obligations align with known cost Under a rebate model: Full WAC must be paid upfront Final net cost is unknown until rebate adjudication Reimbursement occurs after dispensing and administrative processing PVCHC explored mitigation strategies with our wholesalers in preparation for a prior rebate model. While wholesalers indicated a willingness to increase credit limits to a limited extent, they were not willing to extend payment terms. As a result, increased credit capacity does not resolve the core issuethe inability to align fixed payment obligations with delayed reimbursement. Ensuring Timely Manufacturer Payment If a rebate model were to be implemented, strict enforcement mechanisms would be required to ensure manufacturer compliance with payment timelines. At a minimum: Rebates should be presumed valid unless denied with claim-level documentation tied to statutory requirements Ensuring Timely Manufacturer Payment, contd Manufacturers should be required to pay or deny claims within a defined timeframe (e.g., 10 days) The same payment standard should apply to corrected or resubmitted claims Financial penalties or interest should apply to late payments Covered entities should be made whole for delayed reimbursement, including financing costs Peak Vista Community Health Centers page 6 Without enforceable standards, stated payment timelines will not mitigate cash flow risk. Additional Structural Considerations To address payment timing and cash flow impacts, any rebate model would need to include structural safeguards. However, even with such safeguards, the fundamental timing mismatch remains. Potential mitigation strategies could include: Shortening the claim stabilization period, where feasible Standardizing submission and adjudication processes across manufacturers Providing real-time or near-real-time eligibility validation tools Ensuring uniform data requirements and processing timelines However, these measures would not eliminate the need for upfront WAC purchasing or the associated working capital burden. Summary The proposed rebate model introduces a sustained financing gap in which PVCHC must absorb the cost of medications for an extended period before reimbursement is received. This gap cannot be resolved through credit line increases alone, as wholesalers are not willing to extend payment terms. As a result, PVCHC would be required to meet fixed payment obligations while awaiting uncertain reimbursement. This level of financial exposure is not compatible with the operating structure of safety net providers and introduces risk to both medication access and broader clinical services. RFI Target Area 3: Rebate Denials Guardrails on Manufacturer Denials Under a rebate-based model, PVCHC must purchase medications at WAC and dispense them to patients at a discounted rate before knowing whether a rebate will be approved. If a rebate is denied, the organization absorbs the full financial loss. Based on current volume of the initial ten MFP drugs for 2026, even a conservative denial rate of 10% would result in an estimated annual loss of approximately $900,000, representing a direct reduction in resources available for patient care. This level of risk necessitates clear, enforceable guardrails on manufacturer denial authority. Current frameworks allow manufacturers to deny rebate claims based on vague or undefined criteria (e.g., duplicate rebate or other), often without sufficient claim-level detail to allow covered entities to validate or contest those determinations. This creates an environment in which financial outcomes are driven by processes that are not transparent, standardized, or consistently applied. PVCHC strongly recommends that any rebate model include the following guardrails: Rebate claims should be presumed valid unless a manufacturer can demonstrate a specific, permissible statutory basis for denial Denials should be limited to clearly defined circumstances, such as confirmed duplicate discounts under Medicaid or applicable CMS programs Manufacturers must bear the burden of proof, supported by claim-level documentation Peak Vista Community Health Centers page 7 Denial categories must be standardized and exhaustively defined, with no use of vague or open-ended categories Any model that requires covered entities to demonstrate compliance beyond existing statutory requirementsparticularly where manufacturers rely on proprietary or unpublished methodologiescreates an imbalance that undermines program integrity and is not supported by the 340B statute or the Inflation Reduction Act. Required Denial Processes, Documentation, and Timelines In addition to guardrails on when denials may occur, PVCHC recommends that standardized process requirements be established to ensure transparency, consistency, and enforceability. At a minimum, rebate denial processes should include: Standardized denial templates, including: o Claim-level identifiers o Specific statutory basis for denial o Supporting documentation sufficient for validation Defined adjudication timelines, including: o Initial determination within a specified timeframe (e.g., 10 days) o Required timelines for corrected or resubmitted claims, not just initial submissions Transparent dispute resolution processes, including: o Clear escalation pathways o Defined timelines for review and final determination o Alignment with existing HRSA dispute resolution frameworks Enforcement mechanisms, including: o Financial penalties or interest for late payments o Requirements to make covered entities whole for delayed reimbursement Experience with existing Medicare Transaction Facilitator rebate-related processes demonstrates that lack of enforcement undermines stated timelines. Even when claims are successfully contested, payment is not consistently made within expected timeframes, extending the period during which covered entities must carry unreimbursed costs. Summary Absent clearly defined guardrails and enforceable process requirements, a rebate model creates a system in which: Manufacturers act as the final arbiter of covered entity eligibility for statutory savings Denials may be issued without sufficient transparency or accountability Covered entities assume full financial risk for denied or delayed rebates This structure is not operationally sustainable for safety net providers and introduces a level of financial uncertainty that directly impacts patient care. Peak Vista Community Health Centers page 8 RFI Target Area 4: Data Collection by Covered Entities Current Data Collection, Maintenance, and Retention PVCHC maintains a comprehensive data infrastructure to support 340B Program compliance across both in-house and contract pharmacy arrangements. Data collection and management are supported through: Internal pharmacy systems and reporting tools TPAs supporting contract pharmacy operations Integration with electronic health records and dispensing systems PVCHC collects and maintains data at the claim and prescription level, including patient eligibility, provider association, drug dispensed, and payer information. Data is retained in accordance with federal and state requirements and is accessible for audit and compliance purposes. Data Accuracy, Completeness, and Consistency PVCHC employs multiple layers of controls to ensure data integrity, including: Routine reconciliations between dispensing data, claims data, and inventory Internal audits conducted on a regular basis Annual external audits to validate compliance Real-time validation checks within TPA and pharmacy systems Oversight through a multidisciplinary 340B Oversight Committee These processes ensure that 340B data is accurate, complete, and consistently applied across all pharmacy operations. Impact of a Rebate Model on Data Collection A rebate-based model would significantly expand current data collection and management requirements. PVCHC would be required to: Track claims at a more granular level for rebate eligibility Submit data to multiple manufacturers, each with potentially different requirements Monitor rebate status and reconcile discrepancies Maintain additional documentation to support claim validation and dispute resolution These changes would represent an ongoing operational burden, not a one-time implementation effort. Importantly, these requirements would operate in addition to existing 340B compliance processes, rather than replacing them. Required Data Elements From an operational perspective, PVCHC already collects the majority of data elements necessary to support duplicate discount prevention and compliance monitoring. Key data elements include: Prescription-level identifiers (e.g., Rx number, fill date, NDC, quantity) Patient eligibility and encounter information Prescribing provider and site information Payer type (Medicaid, Medicare, commercial) Dispensing entity (in-house vs. contract pharmacy) 340B eligibility indicators These data elements are currently available through internal systems and TPAs and are already used for compliance monitoring, audit support, and reporting. However, effective use of these Peak Vista Community Health Centers page 9 data elements depends on standardization, transparency, and consistent application across stakeholders. Privacy, Security, and Guardrails Any expansion of data collection under a rebate model raises important privacy and security considerations, particularly related to patient-level information. To mitigate these risks, PVCHC recommends: Limiting data sharing to the minimum necessary information required for program administration Ensuring compliance with HIPAA and other applicable privacy regulations Requiring standardized data use agreements between covered entities, manufacturers, and third parties Implementing secure transmission and storage protocols for all submitted data Restricting use of data to defined program purposes only, with prohibitions on secondary or commercial use Without clear guardrails, expanded data collection requirements could expose sensitive patient and operational data without corresponding benefit to program integrity. Summary PVCHC already maintains robust data collection, validation, and reporting processes to support 340B compliance. A rebate model would: Introduce redundant and ongoing data collection requirements Increase administrative burden without improving data accuracy Require expanded data sharing with associated privacy and security risks The primary challenge is not the availability of data, but rather the lack of standardization, transparency, and alignment across stakeholders. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts Operations Prior to January 1, 2026 Prior to January 1, 2026, PVCHC maintained well-established processes to prevent duplicate discounts in Medicaid. In Colorado, duplicate discounts are effectively addressed through coordinated state and covered entity practices. PVCHC maintains accurate records in the Office of Pharmacy Affairs Information System (OPAIS), ensuring that all clinics and in-house pharmacies are identified by NPI and Medicaid billing number, and contract pharmacy locations are appropriately registered and updated. Colorado Medicaid uses the OPAIS Medicaid Exclusion File to ensure they are not requesting rebates for medications from locations that carve-in 340B drugs. Additionally, at the claim level, PVCHC applies the required modifiers that further identify 340B meds to ensure they are not included in rebate requests from the state. PVCHC also works with third-party administrators to carve out applicable Bank Identification Numbers (BINs) and Processor Control Numbers (PCNs) for every contract pharmacy. These combined processes create a closed-loop system in which duplicate discounts are prevented. Peak Vista Community Health Centers page 10 As a result, both prior to and continuing beyond January 1, 2026, there has been no risk of duplicate discounts on Medicaid claims in Colorado. Operational Changes Since January 1, 2026 To address potential duplicate discounts between 340B and Medicare Maximum Fair Price (MFP) requirements, PVCHC implemented a conservative compliance approach and has carved out Medicare claims for the initial set of ten MFP drugs across all pharmacy locations, including both in-house and contract pharmacies. This approach ensures compliance but comes at the cost of foregone revenue and reduced program efficiency, as it limits the organizations ability to fully utilize 340B pricing where it would otherwise be appropriate. Experience and Challenges with MFP and Duplicate Discount Identification In monitoring the experience of our peers using the Medicare Transaction Facilitator and Beacon Channel Management, PVCHCs experience to date highlights that the primary challenge is not the absence of a rebate mechanism, but rather limitations in data transparency, system reliability, and claim-level identification processes. Key challenges include: Limited visibility into manufacturer decision-making, including how claims are evaluated for duplicate discount status Inconsistent or unclear denial reasons, often based on proprietary or unpublished methodologies Timing mismatches between dispensing, claim adjudication, and rebate processing, which complicate accurate tracking Dependence on external platforms (e.g., Medicare Transaction Facilitator) that have not demonstrated consistent reliability or transparency These challenges have made it difficult to confidently identify which claims are eligible for MFP pricing versus 340B, leading PVCHC to adopt a more restrictive operational approach (i.e., carve-outs) to avoid compliance risk. Minimum Data Elements and Considerations From an operational perspective, preventing duplicate discounts does not require a rebate model, but rather access to accurate, timely, and standardized data. At a minimum, manufacturers would need: Claim-level identifiers (e.g., prescription number, fill date, NDC, quantity) Payer type and coverage information (Medicaid, Medicare, commercial) Indicator of 340B eligibility at the claim level Dispensing entity identification (including contract pharmacy relationships) However, even with these data elements, effectiveness depends on standardization, transparency, and timely data exchangeareas where current systems have demonstrated limitations. Summary PVCHCs experience demonstrates that: Duplicate discounts in Medicaid are already effectively addressed through existing processes Current approaches to MFP deduplication introduce operational complexity and uncertainty Peak Vista Community Health Centers page 11 Challenges are driven by data transparency and system limitations, not the absence of a rebate mechanism As such, a rebate model is not necessary to achieve the policy goal of preventing duplicate discounts and instead introduces additional administrative burden and financial risk without resolving the underlying issues. RFI Target Area 6: Required Reporting Commercial Claims Data PVCHC strongly opposes any requirement that covered entities submit commercial claims data to manufacturers as part of a 340B rebate model. The 340B statute authorizes Health Resources and Services Administration to administer ceiling pricing requirements; it does not authorize the agency to require covered entities to disclose proprietary commercial data as a condition of accessing 340B pricing. Such a requirement would introduce significant legal, operational, and financial concerns and is not necessary to achieve the stated goals of the rebate model. Commercial claims data is highly valuable proprietary information. Requiring its disclosure would effectively transfer value from safety net providers to manufacturers without clear statutory authority or corresponding benefit to patients or covered entities. Additionally, there is no statutory prohibition on commercial duplicate discounts, and Congress has not extended Medicaid-style protections to the commercial market. As such, this requirement does not align with the structure or intent of the 340B program. For these reasons, PVCHC strongly recommends that commercial claims data not be required under any rebate model framework. Manufacturer Reporting Requirements If a rebate model were to be implemented, PVCHC recommends that reporting requirements be placed on manufacturers, with a focus on transparency, consistency, and enforceability. At a minimum, manufacturers should be required to submit the following data to HRSA on a monthly basis: Total number of rebate claims submitted, approved, denied, and pending Average and median time to rebate payment (initial and corrected claims) Total dollar value of rebates owed vs. paid Denial rates, including standardized denial reason categories Claim-level detail sufficient to allow covered entities to validate determinations (upon request) This reporting should be designed to allow HRSA to monitor compliance, identify systemic issues, and ensure timely payment of rebates. Public Transparency To support program oversight and accountability, HRSA should publish aggregated manufacturer-level data on a quarterly basis, including: Rebate approval and denial rates Peak Vista Community Health Centers page 12 Average time to payment Volume and value of rebates processed Trends in denial reasons and dispute outcomes Public reporting should be structured to protect proprietary information, while still providing meaningful visibility into manufacturer performance and program function. Frequency and Duration of Reporting Manufacturer reporting should occur through: Monthly submissions to HRSA (to support real-time monitoring) Quarterly public reporting (to support transparency and oversight) Data collection should extend for the full duration of the pilot program, with sufficient historical retention to allow for trend analysis and evaluation of program performance over time. Summary PVCHCs primary concern is that a rebate model introduces complexity and risk without addressing the underlying challenges related to data transparency and system reliability. If implemented, reporting requirements should: Focus on manufacturer accountability, not additional burden on covered entities Provide timely, standardized, and transparent data Support enforcement of payment timelines and dispute resolution Absent these safeguards, reporting requirements will not mitigate the financial and operational risks introduced by the rebate model. RFI Target Area 7: 340B Program Integrity and Potential Benefits of a Rebate Model Impact on 340B Program Integrity The 340B program was established to enable safety net providers to stretch scarce Federal resources as far as possible by providing discounted medications at the point of purchase and reinvesting those savings into patient care. The proposed rebate model fundamentally alters this structure by shifting financial and operational control from covered entities to manufacturers. Rather than strengthening program integrity, this model introduces variability, financial risk, and administrative complexity that are inconsistent with how the program was designed to function. Under a rebate model: Covered entities must purchase at full cost and seek reimbursement later, undermining the upfront benefit. Manufacturers gain discretion over whether and when discounts are provided. Pricing becomes less predictable and less transparent at the point of care. This represents a shift from a predictable pricing model to one that depends on retrospective approval, which weakens operational reliability and program stability. Effect on Duplicate Discounts, Diversion, and Transparency A rebate-based model is not necessary to prevent duplicate discounts. As demonstrated in Medicaid, duplicate discount prevention can be effectively achieved through claim-level controls, modifiers, and data coordination without requiring retrospective reimbursement. Peak Vista Community Health Centers page 13 The rebate model introduces additional administrative steps but does not resolve the underlying challenges related to data accuracy and system transparency, which are the primary drivers of duplicate discount concerns. There is no evidence that a rebate model would meaningfully reduce diversion or improper claims. Covered entities already maintain compliance through: Internal controls and audits HRSA oversight and Operational Site Visits Established patient eligibility determinations The rebate model does not strengthen these controls and instead introduces new points of failure related to claim tracking, reconciliation, and manufacturer adjudication. The rebate model reducesnot increasespricing transparency. Under the current structure, covered entities have visibility into acquisition cost at the time of dispensing. Under a rebate model, the final net cost is not known until after rebate adjudication, which introduces uncertainty for both providers and patients. Recommendations to Strengthen Program Integrity If the goal is to improve program integrity while minimizing administrative burden, PVCHC recommends focusing on: Standardized, transparent data exchange mechanisms to support duplicate discount identification Clear, enforceable requirements for manufacturer accountability, including payment timelines and denial criteria Enhancements to existing systems, rather than introduction of a new rebate-based structure Audit and compliance alignment, building on existing HRSA oversight processes These approaches address the root causes of current challenges without introducing the financial and operational risks associated with a rebate model. Assessment of Potential Benefits PVCHC does not believe that a rebate model provides meaningful benefits that outweigh its risks. While a rebate model is often positioned as a mechanism to improve transparency or support audit processes, in practice: Transparency is reduced due to delayed pricing visibility Administrative burden increases significantly for covered entities Financial risk is shifted to safety net providers Existing compliance and oversight mechanisms are not meaningfully enhanced Any theoretical benefits are outweighed by the operational disruption, financial exposure, and risk to patient access introduced by the model. Legal and Structural Considerations The rebate model also raises significant legal and structural concerns. Under the 340B statute, covered entities are responsible for determining patient eligibility, and manufacturers may audit compliance after the fact. A rebate model shifts elements of this determination to manufacturers by allowing them to decide whether a rebate is owed based on Peak Vista Community Health Centers page 14 submitted data. Additionally, requiring covered entities to purchase drugs at WAC and rely on retrospective rebates may conflict with statutory requirements that manufacturers provide drugs at or below the 340B ceiling price. The 340B programs legislative history emphasizes selecting the least burdensome and most efficient mechanism for covered entities. A rebate model requiring upfront payment, retrospective reconciliation, and ongoing dispute resolutiondoes not meet this standard. Summary The proposed rebate model does not strengthen 340B program integrity. Instead, it: Shifts financial and operational control to manufacturers Introduces uncertainty into pricing and reimbursement Increases administrative burden without improving compliance Creates risk to patient access and safety net operations PVCHC recommends that Health Resources and Services Administration pursue alternative approaches that preserve the upfront discount structure, maintain clear accountability, and minimize burden on covered entities. Alternative Approach: Neutral Claims Clearinghouse The primary policy goal of the rebate modelpreventing duplicate discountscan be achieved through a less burdensome and more operationally feasible approach. A neutral claims clearinghouse would: Allow submission of standardized claims data Enable identification of duplicate discount scenarios Preserve the upfront 340B discount structure Reduce administrative burden Improve accuracy and transparency This approach addresses policy concerns without introducing the financial and operational risks associated with a rebate model. A rebate model is not necessary to achieve deduplication and represents the most burdensome option for covered entities. Conclusion The proposed 340B rebate model represents a fundamental shift in program structure that introduces significant financial, operational, and patient care risks for FQHCs. For Peak Vista Community Health Centers, these impacts include: Increased upfront costs and cash flow strain Additional administrative burden and staffing requirements Reduced ability to provide affordable medications Increased risk of delayed or denied reimbursement Direct negative impacts on patient access and outcomes Given these considerations, PVCHC strongly recommends that Health Resources and Services Administration: Peak Vista Community Health Centers page 15 Exempt all FQHCs from any 340B rebate model, including the proposed pilot Pursue alternative approaches that preserve the upfront discount structure and minimize burden on covered entities PVCHC appreciates the opportunity to provide input and are available to provide additional detail regarding the operational and financial impacts outlined above. Should you have any questions or would like to know more about how Peak Vista Community Health Centers uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to Katie Boudreaux, PharmD, Vice President of Pharmacy Services at kboudreaux@peakvista.org. \Sincerely, cMum Jaeson Fournier, D.C., MPH President & Chief Executive Officer Peak Vista Community Health Centers
HRSA-2026-0001-2028Adventist Health Reedley2026-04-20T04:00Z10,882 chars
Adventist Health Reedley [ADVENTISTHEALTH:INTERNAL] Adventist Health Reedley 372 W Cypress Ave Reedley, CA 93654 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Reedley, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Reedley has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs [ADVENTISTHEALTH:INTERNAL] selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Reedley is a 49 bed, Medicare DSH, and low-volume safety-net hospital located in Fresno County. The hospital serves predominantly agricultural lower income communities in Southern Fresno and Northern Tulare County. The Reedley community and surrounding residents rely on Adventist Health Reedley for inpatient and outpatient care including a birth center. The next nearest hospital is about 20 miles away, although due to agricultural traffic and limited public transportation options, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Reedley would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Reedley to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Reedley has gone beyond the classic hospital care and has been able to provide whole person care to the community, including community resource education through health fairs and non- emergency medical transportation for individuals to attend follow up appointments. Without 340B funding, Adventist Health Reedley would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Reedley to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program [ADVENTISTHEALTH:INTERNAL] A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Reedley has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Reedley would be $4,997.05 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Reedley does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Reedley is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, [ADVENTISTHEALTH:INTERNAL] manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Reedley to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $502.49 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Reedley. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $50.25 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Reedley, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. [ADVENTISTHEALTH:INTERNAL] Conclusion For these reasons, Adventist Health Reedley respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive (drefkej@ah.org; 916.406.1501), if you have any questions or would like additional information. Sincerely, Heidar Thordarson Finance Officer / CFO
HRSA-2026-0001-2029Adventist Health Hanford2026-04-20T04:00Z10,770 chars
Adventist Health Hanford [ADVENTISTHEALTH:INTERNAL] Adventist Health Hanford 115 Mall Drive Hanford, CA 93230 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Hanford, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Hanford has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs [ADVENTISTHEALTH:INTERNAL] selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Hanford is a 173 bed, Medicaid DSH, and Medicare DSH safety-net hospital located in Kings County. The hospital serves the central valley region, which has elevated poverty rates. The Hanford community and surrounding residents rely on Adventist Health Hanford for inpatient and outpatient care. The next nearest hospital is about 18 miles away, although due to agricultural traffic and limited public transportation options, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Hanford would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Hanford to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Hanford has gone beyond the classic hospital care and has been able to provide whole person care to the community, including free dental clinics, community resource education through health fairs, and free haircuts. Without 340B funding, Adventist Health Hanford would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Hanford to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential [ADVENTISTHEALTH:INTERNAL] manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Hanford has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Hanford would be $4,040.59 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Hanford does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Hanford is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. [ADVENTISTHEALTH:INTERNAL] Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Hanford to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $4,528.21 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Hanford. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $452.82 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Hanford, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Hanford respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide [ADVENTISTHEALTH:INTERNAL] covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive (drefkej@ah.org; 916.406.1501), if you have any questions or would like additional information. Sincerely, Heidar Thordarson Finance Officer / CFO
HRSA-2026-0001-2030Regions Hospital2026-04-20T04:00Z40,901 chars
See attached letter. Regions Hospital 640 Jackson Street St. Paul, MN 55101 651-254-3456 healthpartners.com Our mission is to improve health and well-being in partnership with our members, patients and community. April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Regions Hospital (Regions), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Regions and other Covered Entities. As a 340B-participating hospital, Regions is a core component of the healthcare safety net in St. Paul, MN and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Regions participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Regions 340B Program participation enables us to commit an additional $47million dollars per year to the St. Paul community safety net population we serve. Regions also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self- serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency April 20, 2026 Page 2 would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Regions wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Regions submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH REGIONS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Regions and other Covered Entities. 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Regions when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR REGIONS TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Regions. For example, Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by 50% in the past 6 years, directly limiting the extent to which we can support our community. Regions has lost access to some manufacturer 340B pricing within all contract pharmacy relationships further reducing our overall 340B value. Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Additionally, we are required to disclose patients protected health information to the platform of the manufacturers choice without the ability to negotiate terms and conditions to access it. Manufacturers employees and contractors such as Kalderos and IQVIA have sent us overreaching demands. When our operations change (e.g., if we hire a new physician or open a new on-site clinic), we forego 340B purchases to avoid a so-called unusual change 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 in purchases. Manufacturers such as Genentech and Johnson & Johnson reach out with lists of questions like interrogatories and document demands, inappropriately threatening to seek HRSA OPA approval for a manufacturer audit unless their demands are met. A rebate model would only further exacerbate these issues. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Regions pharmacy, manufacturers such as Johnson & Johnson have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and received neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Regions purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Regions trust them to give up money they are not entitled to? 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO REGIONS TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Regions would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Regions has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS REGIONS TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE REGIONS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF REGIONS? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE REGIONS FOR THE VALUE OF ITS DATA? One of Regions principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Regions for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Regions believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Regions urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Regions perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Regions patient population, we serve many other patients, including patients with no coverage at all. Requiring Regions to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 20, 2026 Page 8 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO REGIONS? IF NOT, WHY NOT? As noted above, Regions firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to doRegions continues to experience manufacturer restrictions on 340B pricing for our contract pharmacies. A significant challenge we face is manufacturers continuous changes to their contract pharmacy policies. Manufacturers are often not transparent with these changes nor do they communicate them to us timely. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Regions urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON REGIONS? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Regionsto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about April 20, 2026 Page 9 data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Regions has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Regions is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 10 will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Regions hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Regions encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Regions maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Regions has dedicated staff to maintaining 340B Program requirements utilizing assistance from a third- party administrator that has only operated in an upfront 340B discount model. Additionally, Regions partners with an external, independent audit firm to perform regular review and oversight to ensure a high level of compliance. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. As previously mentioned, Regions utilizes a third-party administrator to help facilitate 340B Program compliance. Third-party administrators are not equipped to support a 340B rebate model nor is Beacon prepared to provide them with the appropriate data to allow covered entities to fully reconcile rebate payments. Not only will our upfront costs go up significantly, but we anticipate further losses due to rebate denials. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Regions to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Regions is certain that additional staffing would be required to support a rebate model given the drastic change to the way the 340B Program has operated for many years. It is challenging to estimate the cost for additional staff with so many uncertainties of how a rebate model would operate and how manufacturers may issue inaccurate rebate denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Since this model is so significantly different from the existing, the time and resources needed (personnel and financial) are difficult to estimate. We know for April 20, 2026 Page 12 certain that a rebate model would require additional resources at a cost but given the uncertainty of what this type of model will look like, it is impossible to estimate that value. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. All of these changes to systems and infrastructure would require significant time to develop, test, implement, and audit. 60 days is not ample time to work across multiple systems and implement an entirely new workflow. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Regions purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Regions would lose $2 million in prompt pay discounts per year. If all products were required to get the 340B discount through the rebate process, Regions would incur and additional $4 million of accounts receivable due from manufacturers. This amount would increase for every day above the 14 days that manufacturers delay payment. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Regions could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. [Regions would lose the 340B discounts on drugs that expire on the shelf due to change or cancellation of treatment plans. Regions would also have to pay WAC on all waste due to partial vials or cancelled, altered, or changed patient needs during procedures. As a covered entity in the state of Minnesota, we are required to pay Minnesota Care Tax (2% of acquisition cost) on all purchased medications. If a rebate model goes into effect and we are required to pay WAC upfront, our tax expense will increase significantly. This increased expense is not factored into the 340B rebate we would receive and further reduces 340B benefit which ultimately impacts patient access to care. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory April 20, 2026 Page 13 guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Regions will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Regions would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Regions operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Regions and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Regions Hospital Leadership April 20, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2031Adventist Health Bakersfield2026-04-20T04:00Z10,668 chars
Adventist Health Bakersfield [ADVENTISTHEALTH:INTERNAL] Adventist Health Bakersfield 2615 Chester Ave Bakersfield, CA 93301 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Bakersfield, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Bakersfield has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs [ADVENTISTHEALTH:INTERNAL] selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Bakersfield is a 253 bed Medicare DSH, safety-net hospital located in Kern County, one of Californias highest poverty regions. The hospital serves as one of the largest- acute care providers in kern county and is a core access point for Medicaid and Medicare patients. The Bakersfield community and surrounding residents rely on Adventist Health Bakersfield for inpatient and outpatient care including services like maternity care and cancer care. In fact, Adventist Health Bakersfield operates the AIS Cancer Center, the only commission-on-cancer-accredited comprehensive cancer center in Kern County. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Bakersfield would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Bakersfield to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Bakersfield has invested in free immunizations to children of Kern County, free dental clinics, and free health clinics to underinsured and uninsured community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Bakersfield to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. [ADVENTISTHEALTH:INTERNAL] Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Bakersfield has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Bakersfield would be $71,341.10 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Bakersfield does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Bakersfield is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts [ADVENTISTHEALTH:INTERNAL] The proposed rebate mechanism would require Adventist Health Bakersfield to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $875,325.92 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Bakersfield. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $87,532.59 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Bakersfield, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Bakersfield respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational [ADVENTISTHEALTH:INTERNAL] elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive (drefkej@ah.org; 916.406.1501), if you have any questions or would like additional information. Sincerely, Heidar Thordarson Finance Officer / CFO
HRSA-2026-0001-2032Speare Memorial Hospital2026-04-20T04:00Z10,082 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Speare Memorial Hospital located in Plymouth, NH, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Speare Memorial Hospital located in Plymouth, NH that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Speare Memorial Hospital located in Plymouth, NH has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Speare Memorial Hospital located in Plymouth, NH has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need 2 to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Speare Memorial Hospital located in Plymouth, NH can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Speare Memorial Hospital located in Plymouth, NH to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Speare Memorial Hospital located in Plymouth, NH understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Speare Memorial Hospital located in Plymouth, NH does not currently have the staff needed to comply with a Rebate Program. o Currently have half an FTE for a 340B pharmacist with no capacity for additional responsibilities. Thus, needing additional FTEs. 340B Pharmacists time fixing non-conforming data Upfront training hours for staff Continued ongoing education o Finance time on accepting rebate payments and allocating them to the GL account o Auditing payments received Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Speare Memorial Hospital located in Plymouth, NH has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. o IT report building and validation o Unknown increase in TPA costs Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 3 Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Speare Memorial Hospital located in Plymouth, NH to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. o For the selected drugs, we would incur a requirement to have a higher upfront cost and interest payment included of almost $500,000 annually. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Speare Memorial Hospital located in Plymouth, NH will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. o Decreased care for underprivileged, rural area served by critical access hospital. Currently we provide over $1 million in charity care to our community. o Potential major loss in critical community service lines such as obstetrics and oncology related care o Loss of savings from blocks from TPAs Most Medicare Part D plans for these drugs Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Speare Memorial Hospital located in Plymouth, NH reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs 4 that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Speare Memorial Hospital located in Plymouth, NH, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. o Speare Memorial Hospital located in Plymouth, NH does not have any in house retail pharmacies currently, but would be impacted if the program expands to include mixed use pharmacy purchasing. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Speare Memorial Hospital located in Plymouth, NH respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Speare Memorial Hospital located in Plymouth, NH and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kerri Federico Director of Pharmacy Speare Memorial Hospital, Plymouth, New Hampshire
HRSA-2026-0001-2033Adventist Health Tehachapi Valley2026-04-20T04:00Z10,879 chars
Adventist Health Tehachapi Valley [ADVENTISTHEALTH:INTERNAL] Adventist Health Tehachapi Valley 1100 Magellan Dr Tehachapi, CA 93561 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Tehachapi Valley, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Tehachapi Valley has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the [ADVENTISTHEALTH:INTERNAL] drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Tehachapi Valley is a 25 bed, critical access safety-net hospital located in Tehachapi, California. The hospital serves as the sole full-service hospital in the area, serving a geographically isolated medically underserved rural population. The Tehachapi community and surrounding residents rely on Adventist Health Tehachapi Valley for inpatient and outpatient care. The next nearest hospital is about 40 miles away, although due to mountainous terrain, travel times are significantly longer than mileage suggests. Having a full-service acute care hospital is the difference between life or death for critical patients. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Tehachapi Valley would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Tehachapi Valley to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Tehachapi Valley has expanded services to this rural area, providing inpatient and outpatient surgery, imaging, lab services, and infusion centers. Without 340B funding, Adventist Health Tehachapi Valley would not be able to provide these types of services to our vulnerable community members. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Tehachapi Valley to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential [ADVENTISTHEALTH:INTERNAL] manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Tehachapi Valley has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Tehachapi Valley would be $941.28 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Tehachapi Valley does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Tehachapi Valley is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. [ADVENTISTHEALTH:INTERNAL] Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Tehachapi Valley to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savingsfunctionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $2,090.12 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Tehachapi Valley. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $209.01 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Tehachapi Valley, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion [ADVENTISTHEALTH:INTERNAL] For these reasons, Adventist Health Tehachapi Valley respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive (drefkej@ah.org; 916.406.1501), if you have any questions or would like additional information. Sincerely, Heidar Thordarson Finance Officer / CFO
HRSA-2026-0001-2034Memorial Hermann Health System2026-04-20T04:00Z23,289 chars
On behalf of Memorial Herman Health System (Memorial Hermann) we are grateful for the opportunity to comment on the Health Resources and Services Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI). Memorial Hermann, as a safety-net provider and system of disproportionate share hospitals (DSH), operates within the frameworks established by both federal and state policies, ensuring the benefits derived from the 340B drug pricing program are utilized to enhance patient care and community services. A fundamental shift in how the 340B program has operated would have significant negative impacts on those services. We respectfully oppose the 340B pilot program and urge the agency to not move forward with this proposed pilot. 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Memorial Herman Health System (Memorial Hermann) we are grateful for the opportunity to comment on the Health Resources and Services Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI). Memorial Hermann, as a safety-net provider and system of disproportionate share hospitals (DSH), operates within the frameworks established by both federal and state policies, ensuring the benefits derived from the 340B drug pricing program are utilized to enhance patient care and community services. A fundamental shift in how the 340B program has operated would have significant negative impacts on those services. We respectfully oppose the 340B pilot program and urge the agency to not move forward with this proposed pilot. As explained below, any rebate mechanism will impose enormous costs and burdens on Memorial Hermann that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Memorial Hermann has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Memorial Hermann has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Memorial Hermann can spend on patient care and comprehensive health care services. 2 Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Memorial Hermann to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Memorial Hermann understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that goes far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Memorial Hermann processes upwards of 10 million 340B transactions annually, and the pharmaceutical products identified in the current proposal make up a substantial number of these transactions. As more products are identified for CMS drug price negotiations, we expect that HRSAs rebate model, as proposed, will eventually grow to make up the majority of our 340B claims. The administrative requirements of managing so many claims will require additional solutions from our Third Party Accumulators (TPAs) and likely additional third party software that specializes in rebate management to track, review, and contest denied claims. Initial quotes that Memorial Hermann has received for these types of solutions are in excess of $120,000/yr. Additionally, it is expected that the work required to format, submit, and track these rebates will need additional dedicated personnel resources that will either need to be taken from the organizations compliance resources or add an additional toll for continued participation in the 340B program. Benchmarking off 340B ESP data submissions, Memorial Hermann has estimated that it could require as many as 4 additional full-time employees to properly manage a fully implemented rebate model. Memorial Hermann believes these resources would be required to properly ensure rebates are being paid, combat denials, and manage the more complicated flow of funds from these transactions. These administrative needs would limit the financial resources that Memorial Hermann will be able to devote to providing care to underserved populations. In other words, the proposed pilot program will divert financial resources that could be utilized to support care of underinsured and uninsured patients to support resources to access discounts that Memorial Hermann is legally entitled to receive and is already receiving through a system that does not require such intense personnel and IT support.. Data Collection By Covered Entities. During the prior iteration of the rebate program proposed by HRSA, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. This incorrect assertion can best be exampled by looking at how Lilly and Novo Nordisk have attempted to require entities to submit all claims, including medical claims for access to pricing through 340B ESP. For those hospitals that have attempted to comply with these data requests, they have been met with extreme challenges with data formatting, data uploads, and ESP 3 allowing for the entity to accurately convey what has been done by the covered entity. Insulin, one of Memorial Hermanns top used drugs has been an example of these submission headaches. The common ownership of 340B ESP and the previously selected Beacon platform gives concern that these tools are not ready to be the primary administrator for such an important hospital lifeline. Memorial Hermann is also concerned that the Beacon platform was developed via funding from drug manufacturers. The Beacon platform is also difficult to use and offers limited customer support. If HRSA does proceed with a rebate model, Memorial Hermann contends it should be done through a truly neutral platform and administered through a neutral group, such as the 340B Prime Vendor. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens associated with the proposed model add up. Unfortunately, that means that under the proposed model Memorial Hermann will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Chiefly among these consequences will be a potential decline in our ability to provide medications at a reduced cost or no cost to our indigent patients. As Memorial Hermann would be required to account for the actual price of the product at the point of dispense and hope for a rebate that may or may not be granted, it would create uncertainty and cause Memorial Hermann to assume a percentage denial of rebates, ultimately reducing how many patients could realistically be serviced by financial assistance. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Memorial Hermann reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by HRSAs prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP 4 pricing. Given the tremendous costs that a rebate mechanism will impose on Memorial Hermann, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. For all of these reasons, Memorial Hermann respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this effort, it must allow Memorial Hermann and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a new rebate program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact me if you have questions. Sincerely, Binita Patel Vice President, System Pharmacy Services Memorial Hermann Health System The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Memorial Herman Health System (Memorial Hermann) we are grateful for the opportunity to comment on the Health Resources and Services Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI). Memorial Hermann, as a safety-net provider and system of disproportionate share hospitals (DSH), operates within the frameworks established by both federal and state policies, ensuring the benefits derived from the 340B drug pricing program are utilized to enhance patient care and community services. A fundamental shift in how the 340B program has operated would have significant negative impacts on those services. We respectfully oppose the 340B pilot program and urge the agency to not move forward with this proposed pilot. As explained below, any rebate mechanism will impose enormous costs and burdens on Memorial Hermann that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Memorial Hermann has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Memorial Hermann has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Memorial Hermann can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Memorial Hermann to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Memorial Hermann understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that goes far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Memorial Hermann processes upwards of 10 million 340B transactions annually, and the pharmaceutical products identified in the current proposal make up a substantial number of these transactions. As more products are identified for CMS drug price negotiations, we expect that HRSAs rebate model, as proposed, will eventually grow to make up the majority of our 340B claims. The administrative requirements of managing so many claims will require additional solutions from our Third Party Accumulators (TPAs) and likely additional third party software that specializes in rebate management to track, review, and contest denied claims. Initial quotes that Memorial Hermann has received for these types of solutions are in excess of $120,000/yr. Additionally, it is expected that the work required to format, submit, and track these rebates will need additional dedicated personnel resources that will either need to be taken from the organizations compliance resources or add an additional toll for continued participation in the 340B program. Benchmarking off 340B ESP data submissions, Memorial Hermann has estimated that it could require as many as 4 additional full-time employees to properly manage a fully implemented rebate model. Memorial Hermann believes these resources would be required to properly ensure rebates are being paid, combat denials, and manage the more complicated flow of funds from these transactions. These administrative needs would limit the financial resources that Memorial Hermann will be able to devote to providing care to underserved populations. In other words, the proposed pilot program will divert financial resources that could be utilized to support care of underinsured and uninsured patients to support resources to access discounts that Memorial Hermann is legally entitled to receive and is already receiving through a system that does not require such intense personnel and IT support.. Data Collection By Covered Entities. During the prior iteration of the rebate program proposed by HRSA, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. This incorrect assertion can best be exampled by looking at how Lilly and Novo Nordisk have attempted to require entities to submit all claims, including medical claims for access to pricing through 340B ESP. For those hospitals that have attempted to comply with these data requests, they have been met with extreme challenges with data formatting, data uploads, and ESP allowing for the entity to accurately convey what has been done by the covered entity. Insulin, one of Memorial Hermanns top used drugs has been an example of these submission headaches. The common ownership of 340B ESP and the previously selected Beacon platform gives concern that these tools are not ready to be the primary administrator for such an important hospital lifeline. Memorial Hermann is also concerned that the Beacon platform was developed via funding from drug manufacturers. The Beacon platform is also difficult to use and offers limited customer support. If HRSA does proceed with a rebate model, Memorial Hermann contends it should be done through a truly neutral platform and administered through a neutral group, such as the 340B Prime Vendor. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens associated with the proposed model add up. Unfortunately, that means that under the proposed model Memorial Hermann will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Chiefly among these consequences will be a potential decline in our ability to provide medications at a reduced cost or no cost to our indigent patients. As Memorial Hermann would be required to account for the actual price of the product at the point of dispense and hope for a rebate that may or may not be granted, it would create uncertainty and cause Memorial Hermann to assume a percentage denial of rebates, ultimately reducing how many patients could realistically be serviced by financial assistance. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Memorial Hermann reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by HRSAs prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Memorial Hermann, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. For all of these reasons, Memorial Hermann respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this effort, it must allow Memorial Hermann and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a new rebate program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact me if you have questions. Sincerely, Binita Patel Vice President, System Pharmacy Services Memorial Hermann Health System
HRSA-2026-0001-2035Coastal Community Health Services Inc.2026-04-20T04:00Z58,317 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Coastal Community Health Services, Inc. 340B ID CHC26592-00 Entity Type HRSA - Funded Health Center State Georgia In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors PharmaForce, Walgreens, Wellpartner Contact Name Cheryl Woods Contact Email cheryl.woods@coastalchs.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 36,000 contract pharmacy and in-house 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $1.5M in administrative 340B cost for contract pharmacy and in-house pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. All the above impacts health centers. Delayed reimbursement impacts health centers. Health centers should be carved out of this process. Field Response Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 23 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 23 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 23 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 23 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 23 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 23 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 23 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 23 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 23 340B Rebate Intake Form 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. This would significantly impact cash flow, as we have our operational cost to cover the first 2 weeks of each month and would not be able to carry this cost while waiting for reimbursement. 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 15 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. Page 10 of 23 340B Rebate Intake Form 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. We need immediate payment, as rebate model delays reimbursement while our cost and savings given to patients impact us in real time daily. Page 11 of 23 340B Rebate Intake Form 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. I believe health centers should be carved out of the rebate model. Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3. Rebate Denials Process Page 12 of 23 340B Rebate Intake Form 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4. Data Collection By Covered Entities Page 13 of 23 340B Rebate Intake Form 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. Page 14 of 23 340B Rebate Intake Form 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5. Duplicate Discount Prevention Page 15 of 23 340B Rebate Intake Form 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. Page 16 of 23 340B Rebate Intake Form 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 17 of 23 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 18 of 23 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 19 of 23 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 20 of 23 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 21 of 23 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 22 of 23 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 23 of 23
HRSA-2026-0001-2036Wisconsin Hospital Association2026-04-20T04:00Z13,851 chars
See attached file(s) ADVOCATE. ADVANCE. LEAD. 5510 Research Park Drive P.O. Box 259038 Madison, WI 53725-9038 608.274.1820 | FAX 608.274.8554 | www.wha.org April 20, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of our more than 150 member hospitals and integrated health systems, around half of which participate in the 340B Prescription Drug Pricing Program, the Wisconsin Hospital Association (WHA) appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSAs) notice of the 340B Rebate Model Pilot Program. WHA was established in 1920 and is a voluntary membership association. We are proud to say we represent all of Wisconsins hospitals, including small Critical Access Hospitals, mid, and large-sized academic medical centers. We have hospitals in every part of the statefrom very rural locations to larger, urban centers like Milwaukee. In addition, we count close to two dozen psychiatric, long-term acute care, rehabilitation and veterans hospitals among our members. The 340B program is extremely important to our members that qualify for it. Quite simply, many of our members service lines would look drastically different if they lost their 340B discounts. The savings hospitals realize from these discounts truly stretches scarce federal resources and would be the difference between maintaining or losing OB labor and delivery, behavioral health, or myriad other programs that cost hospitals significant dollars to operate, but that are nevertheless relied upon by the communities hospitals serve. It is no stretch to say that the 340B program means more to Wisconsin hospitals, nearly 1/3 of which operated at a loss in WHAs 2023 fiscal survey, than it does to the drug companies that continue to make record profits even with the discounts they are required to provide under the 340B program. This point is illustrated by the adjoining chart prepared by STAT News. Despite the immense profits enjoyed by drug companies, 340B discounts account for only 3% of drug companies global revenues. WISCONSIN HOSPITAL ASSOCIATION PAGE | 2 Prescription drug spending represents a growing expense for hospitals, and one that is almost completely out of hospitals control. According to data analyzed by the American Hospital Association, and as shown in the figure below, hospitals prescription drug costs increased by 13.6% in 2025, a rate that was nearly twice as much as total hospital expense growth and four times the rate of hospital price growth. 340B drug discounts are one of the only options hospitals have to offset a small portion of such drastic prescription drug cost increases. WHA greatly appreciates HRSAs work to police adverse actions taken by drug companies, and has joined an amicus briefing in defense of HRSA, maintaining that HRSA, and not individual drug companies, has the authority to approve, deny or set other parameters regarding the lawful use of rebates in the 340B program. WHA believes that a rebate pilot is unnecessary, as it would only show the wisdom of HRSA operating 340B under a discount model for over three decades. While WHA appreciates that HRSA put meaningful thought into creating strict parameters for its previously proposed pilot, in line with their clear authority to do so, WHA believes that a pilot would not be in the best interests of any entity except drug manufacturers. HRSA should not move forward with this pilot According to Congressional Report language, and as HRSA notes on its website, the 340B Program enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. It is hard to imagine how moving 340B to a rebate model will advance that goal. In WHAs September 2025 comment letter to HRSA, we brought a number of concerns forward about the implementation of what at that point seemed to be an impending action to begin this pilot. Given HRSA is re- evaluating whether to go forward with the pilot, we strongly urge HRSA to abandon it. At the forefront of the decision of whether to move forward is the question of who will benefit. As HRSA knows, the 340B program relies on no taxpayer money, but only discounts provided by drug companies. The only taxpayer money involved consists of the operational costs for HRSA to administer the program. Therefore, if moving to rebates adds complexity to the 340B program, it will not benefit taxpayers, but will actually be adding to the costs HRSA and others expend administering and complying with the program. Program integrity concerns among hospitals are not a sound reason for moving to a rebate model The actions by drug companies to sue HRSA to force a rebate program on their terms certainly suggests it is only in drug companies interests to move the program to a rebate model. While they have claimed the reason for this is a need for program integrity to prevent duplicate discounts, the data shows otherwise, and that, in fact, drug companies have far more program integrity violations than hospitals. For instance, in 2022, 75% of drug companies that were audited by HRSA required repayment to 340B hospitals whereas only 28% of 340B hospital audits required repayments.i In fact, Between 2018 and 2022, 340B hospital audit data from HRSA shows duplicate discounts and diversion findings decreased by a combined 62% and the amount of adverse audit findings were six times higher for drug companies than for 340B WISCONSIN HOSPITAL ASSOCIATION PAGE | 3 hospitals.ii If anything, the data shows a need to hold drug companies accountable for program integrity concerns rather than 340B hospitals. At the very least, there are viable, and less burdensome alternatives that could achieve similar program integrity benefits, such as adopting a third-party clearinghouse, rather than a rebate mechanism, to avoid duplicate discounts. Given that there appears to be no benefit to either taxpayers or patients treated by the covered entities that participate in 340B, there is no good reason to move forward with the pilot. Why a rebate model is likely to increase costs and complexity for providers WHA is concerned that moving 340B to a rebate model will harm hospitals by increasing their costs, something that will ultimately be detrimental to the patients and communities hospitals serve. A rebate model will increase the up-front costs hospitals must pay to acquire 340B drugs. Hospitals will be required to purchase drugs at the wholesale acquisition cost (WAC), the highest sale price for a drug and one that is not often paid due to the advent of group purchasing orders. For instance, three of these 10 prescription drugs list a WAC of thousands of dollars, with Imbruvica at nearly $15,000, Stelara at nearly $14,000, and Enbrel at over $7,000.iii Purchasing these 10 drugs at their WAC will require some hospitals to dip into their cash reserves and could be challenging for those hospitals with little cash reserves. Doing so could even impact a hospitals credit rating in a way that may have ripple effects on that hospitals financial situation. For instance, a credit downgrade for a hospital can lead to higher borrowing costs, thereby increasing costs for hospital construction projects and making it more challenging to increase access to care. Under HRSA's originally proposed pilot program, 340B hospitals would be required to purchase the 10 drugs on the CMS Medicare Drug Price Negotiation Selected Drug list for 2026 at wholesale acquisition cost, submit certain data elements to drug companies, and receive a rebate within 10 calendar days of data being submitted. HRSA is now indicating that it is considering expanding the number of drugs to all drugs included in the Inflation Reduction Acts Medicare Drug Price Negotiation Program through 2027. This means that cost and burden estimates would need to account for 25 total drugs across 13 drug companies. Such an increase would also increase the administrative burden hospitals face for a rebate program, because more drugs and more drug companies means more claims to submit, more rebates to track and reconcile. It also means hospitals will be floating more money to drug companies while they wait for rebates and very likely, more disputes over delays and denials, just like hospitals face with insurance prior authorization denials. All of these impacts ultimately threaten to detract from hospitals core mission of delivery high quality high value health care. Not only will hospitals lose money by paying higher up-front costs, but without extremely tight parameters for timely repayment and swift resolution of any contested denials, hospitals are very likely to lose even more money by a rebate model that puts drug companies in charge of if and when hospitals will even get the 340B discount the law requires. Lastly, it is hard to imagine that hospitals will not need to expend additional resources on compliance, data submissions, and appeals. The pilot allows drug companies to establish their own processes and IT platforms that hospitals will need to adapt to. Running a 340B program already entails significant complexity as hospitals must constantly track changes in the thousands of prescription drugs they purchase as supply chains shift and alter package quantities, etc. Creating a whole new layer of 340B processes will add additional complexity. Nearly one-third of Wisconsin hospitals already operated at a loss in 2023, a dynamic that has led to the closure of important service lines like inpatient behavioral health and labor and delivery. In some cases, these losses have culminated into closures, including two Eau Claire-area hospitals closing in 2024 after experiencing over $50 million in losses over the prior two years. With 340B discounts often being the difference between a Critical Access Hospital operating in the black versus the red, losing even a portion of these discounts can make a very real difference in a hospitals financial health. WISCONSIN HOSPITAL ASSOCIATION PAGE | 4 If HRSA does move forward with a pilot, it must strengthen the parameters included in the pilot As previously stated, WHA strongly opposes moving forward with a pilot for the reasons previously laid out. However, if HRSA does move forward with a pilot, WHA supports strengthening the following parameters as previously laid out in WHAs September 2025 comment letter. 1. Consequences for non-compliance. WHA believes there must be real consequences for dug companies that do not comply with the parameters established in the pilot beyond simply revoking their rebate model application. HRSA should consider a mechanism that has more teeth, such as civil monetary penalties for each instance of non-compliance that is not corrected. Drug companies actions in denying discounts HRSA requires at contract pharmacies show that they are eager and willing to flout HRSA policies if violating such policies does not lead to immediate consequences. 2. Central platform for data submissions. Complying with various aspects of the 340B program when there are constant changes to drug supply chains is already complex enough. Layering on further complexity with data submissions on the drug companies terms will add even more complexity. For this reason, HRSA must come up with a standard platform that allows hospitals to seamlessly upload their data at no additional expense. Without a central data platform, hospitals could have 9 different IT platforms for the 9 different drug companies eligible to participate in this pilot. Hospitals are already dealing with a maze of portals for the myriad insurance company prior authorization requests they field; adding a new maze of portals for 340B would only add to this already significant regulatory burden hospitals bear. 3. Do not allow rebates to become prior authorization for 340B. HRSA must be extremely cautious not to give drug companies the ability to deny 340B discounts arbitrarily in the same way hospitals are already receiving denials for covered services under insurance company prior authorization policies. To avoid this, HRSA must create a dedicated process to resolve rebate disputes promptly with designated human points of contact and an expedited timeline for addressing complaints. HRSA should also require thorough and specific documentation for denials to allow covered entities to quickly address the reason for any denials. In closing, WHA greatly appreciates HRSAs partnership in administering the 340B program. While WHA opposes moving the 340B program to a rebate model, it appreciates that HRSAs previously proposed pilot attempted to create strict parameters for drug company compliance. As WHA has maintained, there is no solid reason to suspect that moving the 340B program from up front discounts to back end rebates will benefiting 340B covered entities in a way that advances the goals of the program stretching scarce federal resources. Given this, we again urge HRSA to abandon moving forward with a 340B rebate pilot program. Sincerely, Kyle OBrien President & CEO i https://www.aha.org/guidesreports/2025-06-16-more-drug-company-oversight-needed-maintain-compliance-340b- program-rules ii Id. iii https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf
HRSA-2026-0001-2037Biotechnology Innovation Organization (BIO)2026-04-20T04:00Z34,726 chars
See attached file(s) Biotechnology Innovation Organization 1201 New York Avenue NW Suite 1300 Washington, DC, 20005 202-962-9200 April 20, 2026 Mr. Thomas Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Administrator: I am writing on behalf of the Biotechnology Innovation Organization (BIO) to offer comments regarding the HHS Docket No. HRSA-2026-03042; Request for Information for a 340B Rebate Model Pilot Program. BIO is the premier biotechnology advocacy organization representing biotech companies, industry leaders, and state biotech associations in the United States and more than 35 countries around the globe. BIO members range from biotech start- ups to some of the worlds largest biopharmaceutical companies all united by the same goal: to develop medical and scientific breakthroughs that prevent and fight disease, restore health, and improve patients lives. BIO also organizes the BIO International Convention and a series of annual conferences that drive partnerships, investment, and progress within the sector. The 340B Program has grown exponentially, from a few hundred entities in 1992 to more than 50,000 today.1 From 2015 to 2021, purchases under the Program grew an average of 24% per year.2 By the end of 2024, 340B Program sales at list prices reached $147.8 billion, growing 16.7% year over year, 1 Mulligan, K. The 340B drug pricing program: background, ongoing challenges, and recent developments. USC Schaeffer Center for Health Policy & Economics. October 14, 2021. Accessed September 14, 2023. https://healthpolicy.usc.edu/ research/the-340b-drug-pricing-program-background-ongoing-chal-lenges-and-recent- developments 2 Fein, Adam, What I (and Others) Told the Senate about the 340B Drug Pricing Program. Drug Channels, August 8, 2023. Accessed September 14, 2023. https://www.drugchannels.net/2023/08/what-i-and-others-told-senate- about.html Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 2 driven in part by growth in the use of contract pharmacies.3 Reflecting the incentives in the 340B program, this exponential growth is shown in data from IQVIA, which shows 340B purchases at list price in 2024 grew by 174.6%, compared to only 53.3% growth for non-340B purchases.4 The 340B Program is now the second largest federal drug programbehind only Medicare Part D. This growth reflects the degree to which covered entities and their pharmacy and third-party administrator (TPA) partners have co-opted this safety-net program to generate massive profits for their own benefit.5,6 Unfortunately, evidence does not show that these profits are being used to advance the programs intended purpose of providing vulnerable patients with more affordable medications. Additionally, this exponential growth has exacerbated levels of illegal diversion and Medicaid duplicate discounting. The problem of illegal duplicate discounting will worsen under the Medicare Parts B and D inflation rebate programs and the Medicare Drug Price Negotiation Program (DPNP). These unsustainable trends highlight the urgent need to fundamentally reform the 340B program and its oversight mechanisms. As we have previously noted in our communications with HRSA,7,8 BIO strongly supports all 340B participating manufacturers having the option, consistent with the statute,9 to effectuate the 340B ceiling price either through a discount or through a rebate. Further, we believe rebate models offer a unique opportunity to improve the effectiveness and efficiency of the 340B program and to prevent duplicate discounts and other types of non-compliance prohibited by law. Implementing a 340B Rebate Model Pilot would be an important first step in improving the 340B programs integrity and we look forward to working with the Agency in that regard. We believe expanded use of rebate models, coupled with other critically needed reforms, will help improve the long-term sustainability of the 340B program for the benefit of vulnerable patients. More detailed comments follow. 3Martin, Rory, Ph.D., and Karne, Harish, M.S., The Size and Growth of the 340B Program in 2024, White Paper, IQVIA, 2025. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-update-on-340b-growth-in- 2024-white-paper-2025.pdf 4 Martin, 340B Growth, IQVIA, 2025. 5 340B Covered Entity Report: Report to the Legislature, Minnesota Department of Health, February 27, 2026. https://www.health.state.mn.us/data/340b/docs/2025report.pdf (Accessed: April 9, 2026) 6 Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program, Majority Staff Report, April 2025. https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf.pdf (Accessed: April 9, 2026) 7 BIO Letter to HRSA regarding 340B Rebate Models, October 10, 2024. 8 BIO Comments to HRSA regarding 2025 340B Rebate Pilot, September 5, 2025. 9 Section 340B(a)(1), Public Health Service Act. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 3 In Summary: 340B Covered entity (CE) estimation of program cost for a 340B Rebate Pilot is unsupported and grossly exaggerated. Manufacturers exposure to statutorily prohibited duplicate discounts across Medicaid, Medicare Drug Price Negotiation Program and Inflation Rebate Program in Medicare Parts B and D is substantial and a Rebate Pilot will resolve much of these issues. Appropriate data fields in a 340B Rebate Pilot should include purchase data fields in order so manufacturers may validate claims. A 340B Rebate Pilot should include appropriate metrics and be assessed by an independent evaluator to clearly evaluate the programs success. Program Costs Many manufacturers have already invested heavily in developing and operationalizing rebate model platforms, including CE education and tools to simplify implementation. While there may be certain one-time or up-front implementation costs, as there are with any 340B pricing or inventory management model CEs have unilaterally implemented to date, these costs are small in comparison to the benefit CEs realize through their 340B program participation. We believe the assertion by CEs that a rebate pilot would cost more than $400 million10 in annual costs is exorbitant and unsupported. It should be noted that, to the extent there are material rebate pilot implementation costs, these one-time costs were likely already incurred to a large degree in the lead-up to the January 1, 2026, start date of the original Pilot. Further, with respect to data, CEs already capture and retain the required data in their auditable records through routine 340B qualification and accumulation processes. Submitting this information for rebate purposes should not create any meaningful additional administrative or financial burden, as noted by HRSA: ...data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant.11 10 American Hospital Association Letter to HRSA, September 30, 2025. https://www.aha.org/lettercomment/2025- 09-30-aha-letter-hrsa-re-340b-rebate-model-pilot-program (Accessed: March 30, 2026) 11 Pages 9632-9633, Federal Register, Vol. 91, No. 38, February 26, 2026. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 4 Indeed, data elements that were to be required under the 2025 Rebate Model Pilot are typically captured in payer claims submitted for reimbursement, used for routine internal 340B operations, retained for 340B recordkeeping and federal audit compliance, and routinely shared with manufacturers under certain contract pharmacy and claims data arrangements. Further, the Centers for Medicare and Medicaid Services (CMS) itself has noted that a small number of third-party administrators (TPAs) process most 340B claims. It said that it, understands that 340B TPAs typically determine which claims are 340B eligible in a relatively short amount of time (often within as little as 24 hours).12 Covered entities reliance on TPAs to qualify 340B claims and manage data reporting, particularly on a short turnaround can ensure that rebate claims are submitted to manufacturers quickly and a 340B rebate payments are transmitted within the standard wholesaler payment window. We also understand that many CEs have said that rebate models will force them to float money until they receive the rebate and this would be a financial burden, but analysis proves otherwise. IQVIA modeled the cash flow impacts that covered entities would face if utilizing a rebate model, finding that the estimated financing costs from using a 340B rebate model at entity-owned pharmacies were the same as financing costs with using common replenishment models today.13 Further, cashflow under the 340B rebate model was better than under existing replenishment models at contract pharmacies, where the interest costs for the rebate model were less than currently used credit-based and physical (virtual) replenishment ($0.18 under the rebate model, versus $0.54 and $0.81, respectively).14 Duplicate Discounts The 340B statute prohibits covered entities from claiming 340B pricing on the same unit of a drug that generates a Medicaid rebate, and applies equally to Medicaid fee- for-service and managed care.15 The recent introduction of the Medicare DPNP and inflation rebates in Medicare Parts B and D under the Inflation Reduction Act (IRA), has added a new layer of complexity, as these programs also prohibit duplicate discounts, making the identification and deduplication of 340B claims across all federal programs increasingly important. 12 Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027, page 232, October 2, 2024. https://www.cms.gov/files/document/medicare-drug-price- negotiation-final-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf (Accessed: March 25, 2026) 13 Sun, et al. IQVIA White Paper How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program. December 2, 2025. https://www.iqvia.com/locations/united-states/library/white-papers/how-will-a-rebate-model- impact-cash-flow-in-the-340b-drug-pricing-program (Accessed: March 25, 2026) 14 Ibid. 15 Section 340B(a)(5)(A) of the Public Health Service Act Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 5 Medicaid Duplicate discounts have plagued the 340B and Medicaid programs since the inception of 340B. It is estimated that 3% to 5% of Medicaid rebates are duplicate discounts.16 In FY 2024 this equates to approximately $1.7 billion to $2.9 billion.17 There are several factors that have exacerbated the problem of duplicate discounts in Medicaid: (1) the expansion of Medicaid rebates to managed care organizations without an effective and enforced means for preventing duplicate discounts; (2) the significant growth in covered entities and contract pharmacies, as well as their use of third-party administrators (TPAs); and (3) inadequate oversight and enforcement by HHS. Generally, HRSA places responsibility for ensuring duplicate discounts are not occurring on the covered entity (CE). Since 1993, HRSA has been using one primary means of ensuring duplicate discounts do not occur for covered outpatient drugs provided to Medicaid fee- for-services (FFS) patients, which is the Medicaid Exclusion File (MEF).18,19 The MEF is intended to notify states and manufacturers which drug claims are not eligible for Medicaid rebates by indicating which covered entities are dispensing 340B purchased drugs to Medicaid patients.20 However, the reliability of the MEF depends largely on participation and the disclosure of accurate and current information.21 Due to the lack of consistency with the use of the MEF at the state level, it has been an ineffective mechanism to appropriately and accurately prevent duplicate discounts. Those covered entities that carve-in, i.e., dispense 340B discounted drugs to Medicaid patients, are required to be listed on the MEF, while those that carve-out must guarantee that Medicaid patients do not receive any 340B discounted drug product.22 Nevertheless, HRSA audits often find misclassifications under the MEF system, which can lead to the payment of duplicate discounts. In 2010, the ACA included a provision that extended Medicaid rebates to outpatient drug utilization in managed care organizations (MCOs). Approximately 78% of all 16 The 340B Noncompliance Data Gap Leaves Drug Manufacturers in the Dark, Drug Channels blog, Drug Channels Institute, March 18, 2022. https://www.drugchannels.net/2022/03/the-340b-noncompliance-data-gap- leaves.html (Accessed: March 30, 2026) 17 MACPAC, January 2026. https://www.macpac.gov/wp-content/uploads/2026/01/EXHIBIT-28.-Medicaid-Gross- Spending-and-Rebates-for-Drugs-by-Delivery-System-FY-2024.pdf 18 Final Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Duplicate Discounts and Rebates on Drug Purchases, 58 Federal Register, 34058 (June 23, 1993). 19 340B Medicaid Exclusion File. Health Resources and Services Administration, October 2015. 340B Medicaid Exclusion File | HRSA (Accessed: March 26, 2026) 20 Review of the 340B Drug Pricing Program, House Energy and Commerce Committee Report, 2017. 21 340B MEF. HRSA, October 2015. 22 The 340B Drug Pricing Program and Medicaid Drug Rebate Program: How They Interact, Issue Brief, Medicaid and CHIP Payment Advisory Commission (MACPAC), May 2018. 340B-Drug-Pricing-Program-and-Medicaid-Drug- Rebate-Program-How-They-Interact.pdf (Accessed: March 26, 2026) Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 6 Medicaid enrollees receive their care from Medicaid MCOs.23 The extension of these rebates to MCOs created a new 340B liability for manufacturers, as duplicate discounts now occur for Medicaid patients in MCOs. Difficulty stems from the fact that, despite a statutory requirement to do so,24 HRSA has not implemented any mechanism to prevent duplicate discounts on claims processed by Medicaid MCOs. To make matters worse, in conducting CE audits, HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service not in managed care despite most Medicaid patients being enrolled in MCOs.25 Even when 340B duplicate discounts are identified in Medicaid managed care, HRSA does not require covered entities to work with manufacturers to address or repay them, as they do in FFS.26 Thus, while duplicate discounts are essentially guaranteed to happen in managed care, manufacturers have very limited insight into those duplicate discounts and even more limited recourse to resolve them. Contract Pharmacy At the same time these changes occurred, covered entities use of contract pharmacies to supercharge their collective profits from the 340B program grew exponentially. From April 2010 to April 2020 the number of contract pharmacy arrangements grew by 4,228%, from 2,321 to 101,469. Today that number sits at 229,531.27,28 This growth is driven by the enormous profitability the 340B program provides to CEs and their for-profit pharmacy partners. The gross profit margin on a 340B medicine dispensed at a contract pharmacy is estimated to be 72% compared to just 22% for a non-340B drug when dispensed at an independent pharmacy.29 Worse yet, according to IQVIA, only 1.4% of 340B eligible claims received discounts at a contract pharmacy despite demonstrating the ability to do so with discount 23 Kaiser Family Foundation, Managed Care Tracker. https://www.kff.org/medicaid/state-indicator/total-medicaid- mco- enrollment/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D (Accessed: March 27, 2026) 24 Section 340B(d)(2)(B)(iii), Public Health Service Act (providing that the Secretary shall provide for improvements in compliance by covered entities including by development of more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts). 25 340B Drug Discount Program: Agency Oversight Has Improved, But Actions Needed to Address Weaknesses, Testimony before the U.S. Senate Health, Education, Labor, and Pensions Committee, Michelle B. Rosenburg, Director, Health Care, U.S. Government Accountability Office, October 23, 2025. https://www.gao.gov/assets/gao- 26-108784.pdf (Accessed: March 27, 2026) 26 GAO Testimony, Rosenberg, October 23, 2025. 27 Vandervelde, Aaron, et al., For-profit Pharmacy Participation in the 340B Program, BRG Group, October 2020. https://media.thinkbrg.com/wp-content/uploads/2020/10/06150726/BRG- ForProfitPharmacyParticipation340B_2020.pdf (Accessed: March 27, 2026) 28 Fein, Adam, The 340B Contract Pharmacy Market in 2025: Big Chains and PBMs Tighten Their Grip, June 10, 2025. https://www.drugchannels.net/2025/06/340b-contract-pharmacy-market-in-2025.html (Accessed: March 27, 2026) 29 Vandervelde, October 2020. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 7 cards.30 The U.S. Government Accountability Office (GAO) and the Health and Human Services Office of Inspector General (OIG) have both acknowledged before Congress and in reports that the complexity of contract pharmacy arrangements makes oversight difficult, in part, because the definition of patient eligible to receive 340B discounted drugs and how to apply it is ambiguous,31,32,33,34 which leads to statutorily prohibited diversion, in addition to duplicate discounts. HRSA Oversight Limited oversight of CEs and contract pharmacies compounds the duplicate discount problem. While HRSA conducts audits of 340B CEs, limited funding from Congress means HRSA conducts just 200 audits per year. In 2015, 200 audits amounted to 1% of covered entities, with todays number of CEs that amounts to approximately .33%.35 Ninety percent of the CE audits are selected randomly, while 10% are targeted because of information given to HRSA by stakeholders (e.g., drug manufacturers).36 Approximately 70% of all audits have resulted in adverse findings.37 Further, since 2015, 68 CEs have been re-audited and 68% (46) of them were found to still be non-compliant.38 Even more, HRSAs audits do not consider covered entity compliance with state Medicaid MCO policies to prevent duplicate discounts.39 Manufacturers experience with CE audits highlights the shortcomings of this oversight mechanism and the critical need for a rebate model that provides real-time transparency into the 340B status of individual claims and enables rapid verification of compliance with certain statutory requirements. HRSAs manufacturer audit guidelines impose burdensome steps on manufacturers that make audits costly, inefficient, and poorly tailored to the scope of the program and the degree of non- compliance occurring. For example, the guidelines require manufacturers to show reasonable cause that a CE has violated the diversion and/or duplicate discount 30 Are discounts in the 340B Drug Discount Program being shared with patients?, IQVIA White Paper, September 2022. https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/are-discounts-in-the-340b-drug-discount- program-being-shared-with-patients-at-contract-pharmacies.pdf (Accessed: April 17, 2026) 31 Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO Report, June 2018. https://www.gao.gov/products/gao-18-480 (Accessed: March 27, 2026) 32 Contract Pharmacy Arrangements in the 340B Program, Memorandum to HRSA Administrator Mary Wakefield, Office of Inspector General, February 4, 2014. https://www.govinfo.gov/content/pkg/GOVPUB-HE-PURL- gpo67419/pdf/GOVPUB-HE-PURL-gpo67419.pdf (Accessed: March 27, 2026) 33 Examining HRSAs Oversight of the 340B Drug Pricing Program, Testimony before the U.S. House Energy and Commerce Committee, Subcommittee on Oversight and Investigations, Erin Bliss, Assistant Inspector General for the Evaluation and Inspections, Office of Inspector General, July 18, 2017. 34 GAO Testimony, Rosenburg, October 23, 2025. 35 ADVI. (March 2025). Analysis of HRSA 340B Covered Entity Audits. https://advi.com/insight/advi-analysis-hrsa- 340b-covered-entity-audits/ (Accessed: March 27, 2026) 36 Ibid. 37 Ibid. 38 ADVI, March 2025. 39 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO, January 2020. https://www.gao.gov/products/gao-20-212 (Accessed: April 1, 2026) Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 8 prohibition before seeking to conduct an audit40 (despite manufacturers having access to little, if any, data to meet this standard). Additionally, the guidelines limit audits to a one-year period and allow only one audit of a CE at a time.41 Given the significant cost and inefficiency of audits, few audits have been conducted historically.42 When manufacturers have sought to conduct audits, it has become more common for CEs to try to thwart the audits by refusing to provide necessary records included in the HRSA-approved audit work plan, delaying production of in- scope records to the independent auditor, engaging in prophylactic reviews and taking corrective actions (sometimes under attorney-client privilege) that skew the audit results, and, in some cases, suing HRSA to challenge the agencys approval of the audit.43 Moreover, both the GAO44 and OIG45 have published reports recommending steps and more action to improve oversight given systemic problems in duplicate discounts. In fact, the GAO made a total of 20 recommendations to HRSA to improve its oversight, the agency has implemented 5 of them. It disagreed with 6 recommendations; this leaves 9 recommendations that the agency still has not enacted to improve the integrity of the program.46 We believe that rebate models will help resolve many of the issues that have not been addressed by HRSA because it will provide the claims data and transparency necessary for manufacturers to adjudicate 340B claims in an efficient manner. Medicare The implementation of the non-duplication provisions of the IRA related to Medicare Maximum Fair Prices, and inflation rebates in Medicare Parts B and D, only compounds the complexity of determining and deduplicating 340B claims from all the programs and increases the risk that manufacturers will pay duplicate discounts. IQVIA estimates for self-administered drugs (Part D) and physician-administered drugs (Part B) that Medicare accounts for roughly 40% and 36% of 340B-eligible volume, respectively.47 Thus, Medicare represents a substantial potential exposure to duplicate discounts in 340B. Unfortunately, while CMS has taken some steps to 40 61 Fed. Reg. 65406 (Dec. 12, 1996). 41 Ibid. 42 Declaration of Chantelle V. Britton, 15, ECF No. 22-1, Univ. of Wash. Med. Ctr. v. Becerra, No. 1:24-cv-02998 (D.D.C. Dec. 20, 2024) (noting that, prior to covered entity lawsuits against HRSA in 2024, there have been 18 manufacturer-conducted audits over the past decade-plus). 43 See Maine General Med. Ctr. v. Engels, No. 25-5297, 2025 WL 2982893 (D.C. Cir. Oct. 21, 2025). 44 Ibid. 45 State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OIG, June 2016. https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/ (Accessed: April 1, 2026) 46 GAO Testimony, Rosenburg, October 23, 2025. 47 Can 340B Modifiers Avoid Duplicate Discounts in the IRA? IQVIA. February 2023. https://www.iqvia.com/- /media/iqvia/pdfs/us/white-paper/2023/can-340b-modifiers-avoid-duplicate-discounts-in-the-ira.pdf (Accessed: March 28, 2026) Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 9 deduplicate 340B discounts in these Medicare programs, none are sufficient to ensure compliance with statutory duplicate discount protections. We believe a 340B rebate model is the best way to provide the transparency, efficiency, and integrity that is necessary to best deduplicate claims. Part B Drug Inflation Rebates CMS requires all providers to utilize the TB claims modifier for purposes of Medicare Part B reimbursement and to support the deduplication of 340B claims under the inflation rebate provisions. However, this mechanism is not fully reliable because not all providers adhere to the policy. Notably, an IQVIA analysis found that rural referral centers and sole community hospitals applied the modifier in only 61% to 72% of instances involving Part B separately payable drugs.48 While covered entities were found to use the 340B modifier more often across all care sites when required, they still did not use them to fullest extent.49 Unfortunately, CMS has not established a clear regulatory framework to ensure compliance. A 340B rebate model would provide manufacturers and CMS with an accurate view of all 340B claims and ensure compliance with the statutory requirement that CMS exclude 340B units from the Part B inflation rebate calculation. Part D Drug Inflation Rebates Currently, CMS has decided to use an inaccurate Provider-Prescriber based methodology to infer likely 340B claims. When CMS proposed this method, it was recognized by the agency, manufacturers, and covered entities that it will be imprecise. Yet CMS is moving forward with this methodology despite its statutory mandate to exclude all 340B units from the Part D inflation rebate calculation. As explained above, a 340B rebate would provide manufacturers and CMS with accurate 340B claims data to ensure that no 340B units are included in the calculation. Medicare DPNP and Part D Beginning January 1, 2026, the IRA requires manufacturers to provide access to the maximum fair price (MFP) or the 340B price, whichever is lower, for selected drugs under Medicare Part D. It is worth noting that CMS relies on a rebate model to reimburse dispensing entities if the MFP is lower than the 340B price. More importantly, the IRA statute specifically protects manufacturers from paying both the MFP and 340B discounted prices, a duplicate discount. Despite having the responsibility for deduplication of 340B claims from the MFP claims. Yet, CMS has specifically shifted that burden to manufacturers; stating that it will not, at this time, assume responsibility for nonduplication of discounts between the 340B ceiling price 48 340B Modifiers, IQVIA, February 2023. 49 Ibid. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 10 and MFP.50 Without CMS providing an effective means of deduplication, manufacturers have been left to their own devices for Initial Price Applicability Years (IPAY) 2026 and 2027 selected drugs. According to BRG, fewer than .5% of MFP claims have been self-identified as 340B by their pharmacies, yet an analysis of the Medicare Part D prescription drug events (PDEs) reveals that around 10% to 12% of claims for selected drugs are subject to 340B pricing; this suggests that fewer than 5% of 340B claims are self-identified by pharmacies.51 This analysis further suggests that if these trends hold true, manufacturers would be solely responsible for preventing $5 billion in duplicate discounts in Medicare Part D in 2027.52 A 340B Rebate model that ensures manufacturers receive timely access to limited claims data would go a long way in addressing the duplicate discount issues described above. Data Fields Accurate claims data is crucial for effective operation of a 340B rebate model. A manufacturer would only be able to process a claim for a 340B rebate when it can confirm that one of its covered outpatient drugs was dispensed or administered by a 340B CE at an eligible location, and that the CE purchased the drug on which a rebate is being requested. Notably, the necessary data fall into 3 categories: 1) pharmacy claims data; 2) medical claims data; and 3) purchase data. We have compiled the following lists. Pharmacy claims data fields (as were included in the original Rebate Model Pilot) should be: Date of service; Date prescribed; Rx number; Fill number; 11-digit National Drug Code (NDC); Quantity Dispensed; Prescriber ID; Service provider ID; 340B ID; Rx Bank Identification Number (BIN); and, Rx Processor Control Number (PCN). 50 Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027, CMS, October 2, 2024. https://www.cms.gov/files/document/medicare-drug-price-negotiation- final-guidance-ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf. (Accessed: March 29, 2026) 51 Blalock, Eleanor, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, BRG, April 2026. https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair- Price-in-2026-and-Outlook-to-2027.pdf (Accessed: April 9, 2026) 52 Ibid. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 11 Medical claims data fields (as were included in the original Rebate Model Pilot) should be: Service provider ID; HCPCS ID; 11-digit NDC; Quantity dispensed; Date of service; Rendering Physician ID; Claim number; 340B ID; Health Plan ID; Health Plan name (analogous to Rx BIN & Rx PCN); Claim Line Number; and Unit of Measure. Purchase Data fields (for all 340B claims) should be: Wholesaler/distributor name; Wholesaler Account number; Invoice date; Invoice number; Package units; Ship-to pharmacy NPI; 340B ID; and 11-digit NDC. It should be noted that manufacturers need purchase data to confirm that a drug was bought by an eligible 340B CE and to verify the purchase price (i.e., the WAC, GPO, or other manufacturer-offered price). Because WAC prices change and not all Covered Entities buy at WAC, purchase details are essential to ensure rebate payments reflect the correct amount calculated as the difference between the WAC, GPO, or other manufacturer-offered price (whichever is applicable) and the 340B ceiling price. Without this data, manufacturers have limited ability to validate rebates. As we have noted in our previous letter,53 at the start of the Pilot, there is also a risk that Covered Entities could submit rebate claims for drugs that already received the 340B price through replenishment. Also, it is important to point out that purchase data is a separate flow of information than claims data. Therefore, the 340B ID and the NDC-11, though we include it as 53 BIO Letter, September 5, 2025. Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 12 part of claims data should also be included as part of the purchase data fields, as well. Metrics The metrics for a rebate pilot should help to clearly determine the programs successfocusing squarely on stronger program integrity and greater 340B claim transparency. Key indicators should include trends in avoided Medicaid and MFP duplicate discounts, faster and more accurate 340B claim identification, the share of rebates paid versus denied (and why), average payment timelines, and other measures directly tied to permissible data. HRSA should also make these results publicly available to ensure accountability and trust. Independent Evaluator The Information Collection Request (ICR) issued by HRSA on February 26, 2026, states that manufacturers will be required to submit data to the 340B Prime Vendor monthly to evaluate program integrity and to provide greater transparency in the 340B Program.54 The ICR also states that the data will also support the ongoing assessment of any 340B Rebate Model Pilot Program. The evaluation of the rebate pilot must be done by an independent evaluator, and not by Apexus, the Prime Vendor. Apexus, a for-profit company, is currently under Congressional investigation for conflicts-of-interest.55 As was pointed out in a New York Times investigative report, Apexus has significant incentives to aggressively expand the 340B program and drive the utilization of more expensive drugs, particularly oncology.56 HRSA should work with other government partners to evaluate the model. We urge HRSA to collaborate with HHS OIG and CMS to set clear, transparent criteria for assessing any rebate model and potential changes. OIG can offer insights from past program recommendations, while CMS offices including the Center for Program Integrity, the Medicare Drug Rebate and Negotiations Group, and the Center for Medicaid and CHIP Services should help evaluate effectiveness, compliance with the IRA, and Medicaid nonduplication requirements. * * * 54 91 Federal Register, 9632-9633 55 Letter from Senator Bill Cassidy, MD to Christopher Hatwig, MS, RPh, FASHP, President of Apexus, February 1, 2026. 56 Gabler, Ellen. How a Company Makes Millions Off a Hospital Program Meant to Help the Poor, NY Times (January 15, 2025). Administrator Thomas Engels BIO 340B Rebate RFI Comments Page 13 Thank you for your consideration. We believe a 340B rebate model will improve the integrity and efficiency of the 340B Drug Program, which will help reorient the program in a way that will truly help patients. If you have questions, please contact me at 202-962-9200 or at jgeisser@bio.org. Sincerely, /s/ Jack Geisser Vice President Health Policy
HRSA-2026-0001-2038Carolina Family Health Centers, Inc.2026-04-20T04:00Z45,756 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Carolina Family Health Centers, Inc. (CFHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Carolina Family Health Centers anticipates a loss of $300,000 to $1.5 million from our exclusively in-house, entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation and the potential for rebate denials. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. For CFHC, these projected cost increases exceed $7 million. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics, transportation and telehealth. Carolina Family Health Centers is a federally qualified CHC with locations in rural Edgecombe, Nash and Wilson counties of Eastern North Carolina. CFHC provides comprehensive, high quality, and cost-effective health care which includes primary care, dental, behavioral health, and pharmacy services. Enabling services include transportation, medication delivery, and case management. As part of primary care services, CFHC offers gynecology, rheumatology, general surgery, radiology, mammography, substance use disorder treatment, and care for individuals living with HIV and AIDS. A broad range of services is combined to increase access to healthcare and is available regardless of ability to pay. In 2025, approximately 78% of our 23,935 patients had a household income at or below 100% of the federal poverty level, and 44% did not have insurance. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Since CHCs account for only 5% of total 340B spending, an initial pilot can certainly be tested and refined without including them. At Carolina Family Health Centers, the 340B Drug Pricing Program helps us to offer reasonably priced medications and fund critical services for our patients. As called for by our program requirements and our mission, we use all savings from participating in the 340B program to benefit our patients by reinvesting in additional programs and services that increase access to healthcare. These programs and services include, but are not limited to, free transportation to and from appointments, mobile medical clinics, school-based dental screenings, free medication adherence packaging and medication delivery, certified diabetes education and flat fee rates for medical services. A reduction in 340B savings would significantly limit our ability to provide these enabling services. Specifically, at CFHC, we have been able to utilize the revenues generated from the 340B program to: Establish a flat fee structure for patients without insurance on our Sliding Fee Discount Program. This is a single, upfront fee that patients pay to be seen by our medical or behavioral health providers, including labs and in-house specialty services we provide in the areas of gynecology, general surgery, and rheumatology. Keep patient fees low. Our organization is proud of the fact that we have not increased the patient fees for our Sliding Fee Discount Program since 2010 even through the pandemic and its aftermath striving to be a constant resource within our communities. Completely offset the cost of labs for patients without insurance infected with Hepatitis C, allowing for a full workup of the individual for treatment and access to medications through manufacturer sponsored patient assistance programs. Treatments for both HIV and Hepatitis C are incredibly costly but critical for the health of individuals and communities affected. Bolster service offerings for persons living with HIV or AIDS to include eligibility services and access to a certified HIV Pharmacist for adherence education. Expand transportation services to all of our medical facilities and dental facility and provide pharmacy medication delivery services, all free of charge to individuals. Expand medication assisted treatment services for individuals with opioid use disorder to all three of our medical facilities while keeping the cost of these services low for patients. Add radiology services (including in-house mammography) at two of our medical locations. Sustain our dental services in spite of profitability issues related to payer mix 3 Expand pharmacy services to provide medication adherence strategies to help individuals take their medications on a regular, prescribed basis. Services range from as simple as coordinating all chronic medications to be filled on the same day each month or as sophisticated as individualized packaging of medications (with the help of pharmacy automation) into a strip system specific to the day and time patients take their medications. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Carolina Family Health Centers in particular, this means it will impact our nearly 24,000 patients and more than 212,000 prescription transactions annually. Related to Maximum Fair Price (MFP) negotiations for IRA 2026 drugs, our internal analyses estimate an annual reduction in 340B savings for CFHC of $3.5 million. Coupled with the additional cash flow demand needed to implement the 340B Rebate Pilot for the same drugs, our leadership teams are already discussing potential impacts to operations as our 340B savings continue to erode savings on which our services depend. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 4 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesale Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have recently been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Carolina Family Health Centers provided $7,454,052 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Carolina Family Health Centers anticipates needing 1 to 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Carolina Family Health Centers anticipates an increase of $30,000 for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 6 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 CFHC estimates needing to hire 1 to 2 FTEs, as mentioned previously. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. Many CHCs operate on razor-thin margins, and these additional costs are not an option for maintaining full operations. CFHC estimates the annual financial impact to hire the necessary additional staff around $100,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. CFHC estimates that 6 to 8 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Additional time needed for monitoring, reconciling, and troubleshooting is estimated at another 6 to 8 hours per week. Carolina Family Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. CFHC estimates $8,500 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our organization, which serves 23,935 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $40,000 to $50,000 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 In-House Pharmacies: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. CFHCs current pharmacy software can only handle one acquisition cost per drug file which is currently set based on last cost paid to our pharmaceutical wholesaler for the product. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 to 16 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Internal NACHC survey data 8 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the WAC. This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including increasing patient fees, cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. All patients of Carolina Family Health Centers are encouraged to apply for our Sliding Fee Discount Program, and qualifying patients are provided discounts based on their household income. Uninsured, low-income patients on the lowest tier of the program are currently able to access life- saving medications for a nominal fee which has not been increased in the past 10 years. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. The average timeline for CFHC to receive approved MFP rebates for the first 3 months of 2026 ranged from 19 to 21 days. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $7 million annually to purchase these 10 drugs under the proposed rebate model versus purchasing the same drugs at the 340B ceiling price. This represents a 686,000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Carolina Family Health Centers anticipates evaluating the need to reduce: Workforce & Staffing: The administrative burden of this pilot may require us to divert funds away from other departments. For every Rebate Coordinator position we are forced to hire, we potentially impact other positions that could have a negative downstream effect on healthcare access. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 10,547 uninsured patients served by CFHC from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Carolina Family Health Centers asserts that extending our line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Carolina Family Health Centers estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1.5 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Carolina Family Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by nearly $600,000. If the rebate pilot is continued, upfront monthly spend is projected to escalate by nearly $900,000 in 2027 and $1.3 million in 2028 with the potential inclusion of the additional MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. In 2020, CFHC mobilized immediate efforts for prevention, preparation, and response to the pandemic. Efforts included establishing a triage hotline staffed with a medical provider to answer questions and facilitate onsite curbside testing for our patients and the broader community and developing large-scale off- site testing and vaccination capabilities in partnership with local employers, health departments and hospitals. To navigate the rebate model, CFHC would be forced to draw on the organizations savings and reserves. This is not a sustainable solution; these reserves are intended for capital projects (e.g., buildings, renovations) and to maintain essential medical, dental, behavioral health and pharmacy services as well as administrative operations during emergencies not for ongoing drug purchases. In our rural region of Eastern North Carolina, where patients have no choice but to rely on CFHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If CHCs are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Carolina Family Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed 12 in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $400,000. This is a sum CFHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi- billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Manufacturers must bear the burden of establishing that a rebate is not owed versus the covered entity bearing the burden that it is, in fact, owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. HRSAs Office of Pharmacy Affairs (OPA) should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Carolina Family Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of 14 drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Carolina Family Health Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Carolina Family Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please do not hesitate to contact me at hgentry@cfhcnc.org. Sincerely, Holly Gentry, PharmD Chief Pharmacy Officer Carolina Family Health Centers, Inc.
HRSA-2026-0001-2039Colorado Community Health Network2026-04-20T04:00Z49,434 chars
See attached file(s) 1 TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Colorado Community Health Network DATE: Apr. 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Colorado Community Health Network (CCHN) is the membership association for the states 21 Federally Qualified Health Centers (FQHCs, also known as Community Health Centers or CHCs), which includes nineteen grantees and two Look-Alikes. As covered entities, all 21 Colorado CHCs participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through onsite or contract pharmacies. The proposed rebate model is not an appropriate nor efficient manner to operate the 340B program, as it pulls limited funding and staff time away from patients and towards management of the rebate model. The proposed model would inhibit patient access to affordable prescription medications. CCHN requests HRSA exempt all CHCs from any proposed 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026- 03042). CCHN opposes any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or financial burdens in the 340B program. CHCs have effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Ultimately, a 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi-billion-dollar manufacturers. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is not feasible to respond individually to each question, so we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. 2 RFI Target Area 1: Costs to Covered Entities Financial impacts With the information available, it is difficult to estimate the cost to Colorados CHCs if they are forced to administer their 340B program through a rebate model. This estimation is made more challenging with the lack of detail on exactly which drugs would be included. As a proxy, in 2024, if the eight CHCs who responded to CCHNs data request had purchased the same volume of the ten drugs currently part of the Medicare Fair Price (MFP) negotiations without the 340B discount, their upfront Wholesale Acquisition Cost (WAC) would have increased by over 7,200%. In 2026, if the rebate model is expanded to the entire 340B program, CHCs in Colorado would face an average increase in upfront cost of over $11 million1. These estimated increases will likely be even greater, because they do not include the necessary investments in IT system upgrades, staffing cost and time, and other administrative expenditures CHCs would need to maintain compliance. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities; 70% of CHCs had negative or breakeven financial operating margins in 2024 and 2025. This will make it impossible to pay the full cost of pharmaceuticals up front. If this rebate model goes forward, Colorado CHCs are planning to: Scale back non-revenue-generating, but essential clinical services, pharmacy services, behavioral health care, and nutrition and wellness education programs; Reduce weekly clinical hours, impacting access to care for patients who juggle long work hours and may only be able to come in for care during extended hours or weekends; Divert and reallocate support staff and funds away from clinical teams to manage the rebate model; and Reduce the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Pricing impacts By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within their HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact the ability of CHCs to offer patients steeply discounted medications at the point-of-sale by requiring them to purchase medications at the WAC pricing. CHCs currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate a drugs 340B price for the patient. The rebate model generates uncertainty about its impact on CHCs ability to offer sliding fee discounts at the point of sale and forces them to estimate discounts without knowing whether or 1 Data reported to CCHN by Colorado CHCs 2 42 U.S. Code 254b(k)(3)(G)(i) 3 when a rebate will be paid. This exposes CHCs to additional financial losses if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service for Colorados Medicaid program. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced in the fall of 2025, Colorados Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCs must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi- billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions an organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs have on it, solely by asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to CHCs across Colorado and their patients, CCHN asked CHCs how many individual eligible patients received prescriptions. More than 250,000 individual eligible patients received prescriptions from the fourteen CHCs that responded to CCHNs survey. Those CHCs spent $36.4 million on those medications, which would have cost $279 million if the CHCs had to purchase them at the upfront WAC. Across the CHCs, they would see an average percentage increase of 468% in upfront costs across their entire 340B program. For many of the patients that CHCs serve, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and of which some were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in a primary care setting. This means CHC patients will be disproportionately affected. These patient populations rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. 4 If a rebate model goes into effect, pharmacies across the state will need to reconsider drug purchasing practices. With the expected upfront cost increase equating to the drugs WAC, it will not make fiscal sense to maintain a stock of certain medications. CHCs have considered no longer carrying these particular medications, carrying them in a severely limited supply, or shifting to purchase them only after the prescription has been made by the patients provider, requiring the patient to return to the clinic or their local pharmacy to pick it up. This fundamental change shifts CHCs away from the same-day model of care they currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model could require patients to return to the CHC or local pharmacy multiple times a week to pick up prescription(s) is too large a burden. Imposing a rebate model on CHCs would weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for the most vulnerable patients, particularly those who are low-income and have insurance with high copayments or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be onerous and burdensome. Of the fifteen CHCs in Colorado who responded to CCHNs survey in time for submission of this public comment, 87% responded they would require more staff time and dollars to adequately manage a rebate model than their current pharmacy program. To sufficiently and adequately track the submission of the data and the receipt of rebates across in-house and contract pharmacies, it would require an average of about one additional full-time-equivalent (FTE), or about 1,962 staff hours per year, at a cost of nearly $100,000 annually, for each CHC. For one of the larger CHCs, they report this will cost $500,000 per year, stating, if the rebate model went into effect, we would have to lay off employees in order to cover the WAC cost, which will contribute to [a loss in] patient access to care. We would see a negative impact to operations, by having to close locations. Many of these CHCs are also struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every FTE that a CHC must hire to participate in the rebate program is a patient support role they will no longer be able to fund, like community health workers, health educators, patient navigators, or translators. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care patients depend on. This 5 diversion of time and resources is not a minor inconvenience for CHCs to navigate: it is a structural undermining of the care model that CHCs depend on to serve their community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. In addition, CHCs will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already-strained operational capabilities. Managing the rebate model would require significant changes to CHC pharmacy software and third-party administrator workflows. CHCs anticipate high operational costs to adapt their pharmacy software, pay for custom dashboard notifications, and design new, internal workflows. Additionally, beyond implementation, third-party administrator and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be permanent, recurring costs that further diminish 340B savings. For CHCs that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide real-time, accurate information at the pharmacy counter, including updating electronic health records and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring the CHC to account for high upfront cost increases to pay software vendors for custom API builds and price file reconciliation tools. Additionally, for CHCs that contract with pharmacy partners, the rebate model threatens the very existence and possibility of these contract arrangements. It is likely that third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to the covered entity, through increased per-claim fees. The more contract pharmacies the CHC partners with, the greater the number of rebate pathways their pharmacy staff need to track in order to ensure rebates are paid correctly and in a timely manner. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility that contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patient options of accessible, affordable locations to access their medications, particularly in rural communities, and would further harm patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities CHCs are very concerned by potential cash flow issues of the proposed rebate model. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that CHCs must forgo discounts or 6 face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should they attempt to negotiate with wholesalers or banks to increase their borrowing limit. CHCs rely on these discounts and terms outlined in contracts with their wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and very high interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the need upfront will be crippling, and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $2.5 million on the average Colorado CHCs expected increase of $19.9 million in upfront cost. Cardinal Healths standard policy is an 18% annual interest rate on all balances that have not been paid off by the 15th of the month following the purchase. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers have actively advised CHCs to seek loans. CCHN is also concerned that the rebate model will cause CHCs to lose non-340B discounts they currently receive, which lower their drug spending significantly, including: Loss of sub-ceiling discounts, which reduced the net cost of the ten MFP pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate sub-ceiling discounts on 340B drugs on behalf of covered entities, like CHCs. Loss of prompt payment discounts, which lower CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a prompt payment discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced Cost of Goods Sold discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. 7 The loss of these discounts pose a very significant challenge in maintaining the inventory on hand needed to serve patients if cash flow impacts from a rebate model...are realized, as one Colorado CHC pharmacy director explained. RFI Target Area 3: Rebate Denials Every dollar that a CHC pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. It is a dollar that the CHC cannot rely on to provide health care services to patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain their drug supply creates an environment of clinical instability with direct patient impacts. In communities across Colorado, where patients rely on CHCs to access care, the risk of the CHCs credit limit being reached or their reserves being depleted is a direct threat to their communitys safety net and patients health. If CHCs are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. We urge HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability for safety net providers, like CHCs. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. If a rebate is denied, the CHC would take a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Any reduction in financial resources will directly affect the ability the CHC to fulfill their mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. 8 Any delay beyond the 10-day window creates an immediate cash flow crisis. CCHN is particularly worried that the need to purchase drugs at full WAC will cause CHCs to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. CCHN is concerned about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Beacon Channel Managements Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. 9 Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacons technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts and the Medicaid rebate routes to the state, as required by state statute. CHCs maintain up-to-date profiles in the Office of Pharmacy Affairs Information System, so their number of in-house and contract pharmacies are accurate. Additionally, CHCs submit a modifier on each Medicaid claim, so the rebate is appropriately and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in their agreements with third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries on how to address the findings. As a result, 50% of the CHCs that responded to CCHNs survey decided to stop submitting 340B claims at their contract pharmacies for the ten drugs subject to the MDPNP to avoid any possibility of duplicate discount; many of them saw their claims automatically denied in the Beacon platform. One CHC has even stopped submitting 340B claims for Medicare prescriptions at their in-house pharmacy to avoid any possibility of a duplicate discount. Since Jan. 1, 2026, while we understand that manufacturers investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared 10 above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the Administrative Procedures Act (APA), raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, Congress...constrained the [HHS] Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 11 The 340B statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSAs statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: they are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. 5 https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how-it-works-and-why-its- controversial 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxp.org/wp-content/uploads/2026/01/CSRxP-Margin-Analysis-Chart.pdf 12 Recommendations to protect CHCs HRSA should exempt CHCs from the rebate model. However, if HRSA insists on forcing CHCs into a rebate model, HRSA must ensure manufacturers are required to incorporate the following protections into their rebate model plans: Requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense in order to mitigate ongoing cashflow issues. Manufacturers should advance CHCs the rebates for two packages of each drug and for drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two- month period. Requirement to reimburse CHCs for all costs incurred due to the rebate model, fully, promptly, and transparently; although the first proposed rebate model pilot stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities, HRSA-approved manufacturer plans fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Requirement to provide 340B rebates on a reasonable number of undispensed units, or the units of a drug that, during normal and appropriate course of business, are not dispensed to a patient because they are expired or damaged. If manufacturers are not required to reimburse CHCs for any of these undispensed units, CHCs will be forced to pay upfront WAC and absorb that cost, with no recourse the 340B savings would transfer from the CHCs to the manufacturers, and CHCs costs and financial harms would skyrocket. Requirement to provide rebates at a unit level to reduce cashflow demands and interest costs on CHCs by significantly speeding up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Prohibition on requiring BINs (Bank Identification Numbers) or PCNs (Processor Control Numbers) on rebate claims as those data elements are unnecessary to implement a rebate model pilot, as manufacturers have demonstrated they do not need BIN/PCN data to identify drugs for 340B purposes. Further, they are not always available to the covered entity; for instance, Walgreens, a major contract pharmacy partner, does not make this data available to covered entities. Requiring CHCs to provide BIN/PCN data to receive a rebate would functionally eliminate the rebate model pilot drugs from CHCs contract pharmacies. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the APA and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion from the CHC to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC 13 and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B rebate model pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available at the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSAs rebate authority should not be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.8 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. 8 H.R. REP. 102-384(II) 14 When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Acts statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot to address 340B and MFP deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to CHCs participation in the program and, most importantly, protect patient access to affordable medications. 15 We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for CHCs across Colorado as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions, please reach out to myself, Ross Brooks, President and CEO of CCHN, at rbrooks@cchn.org, or Suzanne Smith, Health Center Operations Director of CCHN, at suzanne@cchn.org. Ross Brooks President and CEO, Colorado Community Health Network
HRSA-2026-0001-2040Community Health Centers of Southeastern Iowa, Inc.2026-04-20T04:00Z59,175 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Community Health Centers of Southeastern Iowa Inc 340B ID CH077310 Entity Type HRSA - Funded Health Center State Iowa In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors RxPreferred, Walgreens, Wellpartner Contact Name William Grimm Contact Email williamgrimm@chcseia.com Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 60,000 contract pharmacy and in-house 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $1.6M in administrative 340B cost for contract pharmacy and in-house pharmacy. 1. COST TO COVERED ENTITY Site Profile 1a. Current 340B Administrative Costs Page 1 of 23 340B Rebate Intake Form iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Our current administrative cost drivers for managing the 340B program include staffing, IT systems, thirdparty vendors, compliance activities, and significant labor hours dedicated to ongoing monitoring and reporting. Key cost components include personnel time for eligibility validation, claims review, auditing, and reconciliation; IT infrastructure to support data integration and tracking; and fees paid to external vendors for compliance support and software platforms. Compliance activitiessuch as internal audits, external audits, and duplicate discount preventionalso require substantial staff time and specialized expertise. Under a potential 340B Rebate Model Pilot Program, these cost drivers would increase considerably. The added administrative complexity of rebate processing, managing denials, reconciling payments, and maintaining new datasubmission workflows would require additional staffing and expanded IT capabilities. We estimate that these added administrative requirements would result in approximately $100,000 in additional annual costs for our organization. This includes increased labor hours, potential new vendor contracts, system upgrades, and expanded compliance oversight. For an FQHC operating on thin margins, these added costs would place meaningful strain on our budget and divert resources away from direct patient care and essential services. Field Response i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Page 2 of 23 340B Rebate Intake Form ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 23 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 4 of 23 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 5 of 23 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 6 of 23 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing two additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 7 of 23 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 8 of 23 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 9 of 23 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 10 of 23 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 11 of 23 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. 3. Rebate Denials Process Page 12 of 23 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4. Data Collection By Covered Entities Page 13 of 23 340B Rebate Intake Form 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 14 of 23 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 15 of 23 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 16 of 23 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 17 of 23 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 18 of 23 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 19 of 23 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 20 of 23 340B Rebate Intake Form 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. Page 21 of 23 340B Rebate Intake Form 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 22 of 23 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 23 of 23
HRSA-2026-0001-2041Heart of Ohio Family Health2026-04-20T04:00Z48,786 chars
Submitting FQHC comments for Docket No. HRSA-2026-03042 This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 April , 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Heart of Ohio Family Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of over 4,000 prescriptions (5% of all filled), which results in a loss of over $48,000, without factoring in labor or supplies from entity-owned pharmacy operations. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Since 2003, Heart of Ohio Family Health (HOFH) has operated as a 501(c)(3) nonprofit community health organization committed to serving the diverse communities in Central Ohio. As Federally Qualified Health Centers (FQHC), HOFH has six convenient locations that provide services in primary care, pediatrics, behavioral health, substance use disorder, OBGYN, diagnostic laboratory, pharmacy, dietetics & nutrition, and interpretation. HOFH is governed by a Board made up of patients and community stakeholders along with a team of about 200 talented staff members who are dedicated to providing high-quality and affordable healthcare. Our mission is to provide high-quality, holistic, and compassionate care to meet the healthcare needs of everyone in our diverse community, one heart at a time. Heart of Ohio Family Health provides exceptional and personalized care delivered by dedicated professionals and advocates offering access to comprehensive wellness experiences to all who are served. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Heart of Ohio Family Health in particular, this means it will impact: Over 80,000 340B pharmacy claims/over 21,000 patients served in 2025 Current admin costs for your 340B program: ~$681K for 2025 How do you use your 340B revenue specifically? We use the revenue generated from 340B savings to expand offered services such as opening a second in-house pharmacy and implementing a dental department. We are able to increase the number of our patients with a ~10% growth on an annual basis. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Heart of Ohio Family Health provided $30M in 2025 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Heart of Ohio Family Health anticipates needing an additional full-time employee at $60K a year, to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Heart of Ohio Family Health anticipates an increase of ~$4M annually to purchase medications at full price before the rebate is honored; for the first 10 IRA drugs proposed for rebate. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 hours/week or 2080 hours/year will be required to report 340B rebate claims to a third-party platform, assuming all adheres to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Heart of Ohio Family Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 21,000 patients, the total projected increase in expenses, including labor, IT, and carrying costs. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. 7 Internal NACHC assessment (99 responses). 8 Ibid. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with (over 150) pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 150+ different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Franklin, Fairfield, and Licking Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Heart of Ohio increases access to critical medication by offering our Sliding Scale Fee discount; offering the drugs at 340B acquisition price plus a small dispensing fee; or a highly discounted rate, in which Heart of Ohio takes a loss or generates an even expense. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost (~$4M annually) to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends ($5.7M budgeted for 2026) to purchase these same drugs at the 340B ceiling price. This represents an increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Heart of Ohio Family Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as our pregnancy centering and dental health programs. Operating Hours: We anticipate needing to reduce our clinic hours by zero per week, but this could change if the organization does not receive an additional subsidy from the federal governments, or if the rebate program expands Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund, directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 4,000 pharmacy uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 Heart of Ohio Family Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Heart of Ohio Family Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $378K/monthly or $4.5M annually. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our credit line with our wholesaler, which is already at $600K, and would be difficult to increase since if the rebate program is extended. This is not a sustainable solution; which would directly affect the funds that are currently dedicated to our dental program and pregnancy centering program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Heart of Ohio Family Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Heart of Ohio Family Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of over $2M. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. This health center is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). Administration: 5000 E. Main St, Columbus, OH 43213 Tel: (614) 235-5555 Fax (614) 536-1994 Conclusion Heart of Ohio Family Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Heart of Ohio Family Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Heart of Ohio Family Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Alexandra Zeleski, PharmD, RPh, Director of Pharmacy at 614- 235-5555 ext. 1136. Sincerely, Dr. M. Buhari Mohammed, CEO Heart of Ohio Family Health 20/04/2026 2026-04-16 HOH 340B HRSA RFI Letter Final Audit Report 2026-04-20 Created: 2026-04-20 By: Rebecca Shaw (rshaw@hofhc.org) Status: Signed Transaction ID: CBJCHBCAABAAP9vMBsre0JcqgCX-P-DcDLFCZ7wxP-wB "2026-04-16 HOH 340B HRSA RFI Letter" History Document created by Rebecca Shaw (rshaw@hofhc.org) 2026-04-20 - 6:36:53 PM GMT Document emailed to Buhari Mohammed (mmohammed@hofhc.org) for signature 2026-04-20 - 6:36:59 PM GMT Email viewed by Buhari Mohammed (mmohammed@hofhc.org) 2026-04-20 - 6:53:03 PM GMT Document e-signed by Buhari Mohammed (mmohammed@hofhc.org) Signature Date: 2026-04-20 - 6:53:40 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 6:53:40 PM GMT
HRSA-2026-0001-2042Salud Family Health2026-04-20T04:00Z49,841 chars
See attached file(s) April 20, 2026 Mr. Thomas J. Engels Administrator Health Resources and Services Administration Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration FROM: Salud Family Health RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Salud Family Health (Salud) is a Federally Qualified Health Center (FQHC), operates as a 5013 nonprofit, operating thirteen unique clinic locations, ten school sites and a mobile unit. Saluds Mission is to provide a quality, integrated health care home to the communities we serve. Salud provides comprehensive primary care services; including medical, dental, pharmacy and behavioral health care services along with care coordination, enrollment and other services to support integrated quality care. As a Community Health Center (CHC), also known as a Federally Qualified Health Center (FQHC), we participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through our 5 onsite and 53 contract pharmacies. The 340B program is foundational to my organizations ability to serve the most vulnerable members of my community. The proposed shift of responsibility from manufacturers to covered entities directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations in my community and nationwide. Stanley J. Brasher Administrative and Training Center 203 South Rollie Avenue Fort Lupton, CO 80621 (303) 892-6401 MISSION To provide a quality integrated health care home to the communities we serve. CORE VALUES Commitment Compassion Creativity & Innovation Dignity Integrity Quality & Excellence Teamwork COMMUNITIES SERVED Aurora Brighton Commerce City Estes Park Fort Collins Fort Lupton Fort Morgan Frederick Longmont Sterling Trinidad Mobile Unit Salud Family Health and other health centers across the country, would face staggering, detrimental impacts if the rebate model were to go into effect: We expect our upfront pharmacy costs to increase monthly by $700,000 due to a rebate model, pulling dollars away from direct patient services, including behavioral health, oral care, primary care and pharmacy. Salud Family Health would experience an average loss of $125,000 from Salud owned pharmacy services and a $136,000 reduction in savings from our contract pharmacy arrangements due to the administrative burdens of manual reconciliation. We further expect the administrative costs to apply for and track the rebates to cost my organization one FTE at a cost of $105,000, which will further strain our ability to serve our patients. For Salud Family Health, this financial turmoil and undermining of Congressional intent of the program to stretch scarce Federal resources as far as possible1 means directly and negatively: Impacting the 125,000 patients who accessed affordable or free medications through our participation in the 340B program, Increasing the administrative costs by $105,000 for our 340B program, and Salud Family Health requests the Health Resources and Services Administration (HRSA) exempt all CHCs, from any proposed 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026-03042). We oppose any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or burdens to the 340B program. Salud Family Health already had effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Introducing a rebate model into the management of the 340B program is contrary to the programs intent and the fundamental responsibility of HRSA and HHS to administer this program in the interest of eligible Americans, and the nonprofit, local, trusted community providers who serve them. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is infeasible for my organization, and likely many others, to respond individually to each question. Therefore, we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. RFI Target Area 1: Costs to Covered Entities Financial impacts It is difficult to understate the cost to Salud Family Health if we are forced to administer our 340B program through a rebate model due to the lack of detail on exactly which drugs would be included. As a proxy, in in 2025, if Salud Family Health had purchased the same volume of the ten drugs currently 1 18 340B House Report Legislative History. H.R. REP. 102-384(II). part of the Medicare Fair Price (MFP) drugs without the 340B discount, purchasing at the Wholesale Acquisition Cost (WAC) would have increased upfront costs by [4592.48%]. Given that HRSA has not determined or announced the drugs in this potential 340B rebate model pilot program, the expected dollar increase in upfront cost that my CHC will have to account for may rise substantially, if and as more drugs are added to a 340B rebate model. To cover the upfront cost of purchasing drugs and operationalizing the rebate model, Salud Family Health anticipates needing to consider: Scaling back essential patient support services such as care management and outreach and enrollment activities. Reducing our clinic hours weekly, which impacts access to care for our patients who juggle long work hours and may only be able to come in for care during extended hours or weekends, Diverting support staff and funds away from our clinical staff to manage the rebate model. Reducing the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities. It is incomprehensible to impose a rebate model on local, nonprofit CHCs when two-thirds of CHCs in Colorado had negative operating margins in 2024 and 2025 and it is anticipated a similar number of CHCs will face this financial challenge in 2026. As CHCs, we currently rely on our statutorily allowed savings from the 340B program to fill this gap and make us closer to whole; the burden of a rebate model will exacerbate these financial difficulties and, ultimately, will be insurmountable for my organization, and likely others across Colorado. Pricing impacts By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within our HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact Salud Family Healths ability to offer patients steeply discounted medications at the point-of-sale by requiring us to purchase medications at the WAC pricing. We currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems are continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate the drugs price for the patient. The rebate model generates uncertainty about its impact on my CHCs ability to offer sliding fee discounts at the point of sale and forces us to estimate discounts without knowing whether or when a rebate will be paid. This exposes 2 42 U.S. Code 254b(k)(3)(G)(i) us to financial loss if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced, Colorados Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCS must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi-billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions my organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs, like Salud, have on it by solely asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to my organization and patients, while we had 125,000 340B transactions with of pharmaceutical manufacturers in 2025, my CHC was able to provide over 70,000 patients with 125,000 prescriptions at $4,222,020 340B cost to Salud through the 340B program, those patients were able to access $11,137,757 in savings; for many of my patients, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in primary care settings. This means CHC patients will be disproportionately affected. CHC patients rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, our patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. If a rebate model goes into effect, my pharmacy will need to evaluate the possibility of evolving our drug purchasing practices. With the expected upfront cost equating to the drugs WAC, it will not make fiscal sense to maintain a stock of certain medications. Salud Family Health has considered no longer stocking these medications, shifting to purchase drugs only after the prescription has been made by the patients provider, requiring that patient to return to the clinic or their local pharmacy to pick it up. This fundamentally shifts CHCs away from the same day model of care we currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model would require that would force our patients to return to the clinic or local pharmacy multiple times a week to pick up their prescription(s) is simply an unconscionable barrier and burden. Imposing a rebate model on CHCs would only serve to weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, particularly those who are low-income and have insurance with high co-pays or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be harmful and burdensome. Salud Family Health currently employs the equivalent of 1 FTE of pharmacy to manage our 340B program currently. To track the submission of the data and the receipt of rebates sufficiently and appropriately across our in-house and contract pharmacies would require the hiring of at least 1-1.5 FTE, further compiling onto our anticipated annual increase in costs. Salud does not have the budget to hire any additional staff, of any kind, at this time. We are currently in a hiring freeze for any positions that arent directly involved in patient care. Across Colorado, CHCs have the shared concern that a rebate model would require more staff time and administrative cost than current 340B program management; CHCs estimated that managing a rebate model would require the hiring of additional staff to adequately manage, though many of these CHCs also are struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. The administrative burden of navigating a new rebate model structure will impact our current workflows and divert staff time and resources away from patient care. Every hour that one of my pharmacists spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care our patients depend on. This diversion of time and resources is not a minor inconvenience for Salud Family Health to navigate: it is a structural undermining of the care model that we depend on to serve our community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. Salud Family Health will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already-strained operational capabilities. Managing the rebate model would require significant changes to my CHCs pharmacy software and third-party administrator workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard notifications, and design new, internal workflows; $105,000 will be required to simply reach to baseline of compliance before a single rebate is ever received. Additionally, beyond implementation, third-party administrator and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be permanent, recurring costs that further diminish our 340B savings. For CHCs, like mine, that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide accurate real-time information at the pharmacy counter, including updating our electronic health record and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring our organization to account for high upfront cost increases to pay software vendors for custom API builds and price file reconciliation tools. Additionally, for CHCs like mine, that contract with pharmacy partners, the rebate model 0threatens the very existence and possibility of these contract arrangements. We currently contract with 53 contract pharmacies, and it is likely that our third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to us, the covered entity, through increased per-claim fees. This number of contract pharmacies we partner with further compiles the number of rebate pathways our pharmacy staff need to track in order to ensure rebates are paid correctly and timely. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility our contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patients options of accessible, affordable locations to access their medications, particularly in rural communities. This would further harm our patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. Salud Family Health can estimate that the total projected increase in expenses, solely to manage a rebate model, including labor, IT, and carrying costs, is estimated at $128,000 annually. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities Salud Family Health is very concerned by potential cash flow issues of the proposed rebate model. This is linked to the model requiring upfront purchase of the drugs, how quickly a rebated could be requested, and possible denials. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that Salud Family Health must forgo discounts or face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should we negotiate with wholesalers or banks to increase our borrowing limit. Salud Family Health relies on these discounts and terms outlined in contracts with our wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and exorbitant interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the need upfront will be crippling and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $87,000 on our health centers expected $704,000 increase in upfront cost. Cencoras standard policy is an 18% annual interest rate on all balances that have not been paid off by the 15th of the month following the purchase. Of course, this cost is only for the ten MFP drugs proposed in the first 340B rebate model pilot program; the cost will further increase if and as more drugs are added to a 340B rebate model. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers are actively advising CHCs to seek loans. We are also concerned that the rebate model will cause Salud Family Health to lose non-340B discounts we currently receive, which lower our drug spending significantly, including: Loss of sub-ceiling discounts, which reduced the net cost of the ten pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate sub-ceiling discounts on 340B drugs on behalf of covered entities, like CHCs. By allowing a rebate model, HRSA thus eliminates the possibility for Apexus to negotiate discounts on the ten drugs that would likely be included in the pilot program, effectively transferring this discount from CHCs and their patients to the pharmaceutical manufacturer. Loss of prompt payment discounts, which lower CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a prompt payment discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced Cost of Goods Sold discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. RFI Target Area 3: Rebate Denials Every dollar my organization pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. It is a dollar that my organization cannot rely on to provide health care services to my patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain our drug supply is not just unethical; it creates an environment of clinical instability with direct patient impacts. In our community, where the patients we serve rely on us to access care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to our communitys safety net and our patients health. If we are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. Salud Family Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. If a rebate is denied, my CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the ten selected drugs, even a conservative 5% denial rate would result in a net annual loss of $35,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We respectfully request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. Any delay beyond the 10-day window creates an immediate cash flow crisis. We are particularly worried that the need to purchase drugs at full WAC will cause us to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. We have concerns about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Beacon Channel Managements Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, we are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacons technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. Since the inception of the MFP program in January, our health center has seen an error rate of 61% in the Beacon platforms ability to correctly identify eligible rebates owed. Since it is the Beacon platform which will administer the rebate model, we can only assume a similar error rate with this process. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts, and the Medicaid rebate routes to the state, as required by state statute. CHCs, like mine, maintain up-to-date profiles in the Office of Pharmacy Affairs Information System (OPAIS), so our number of in-house and contract pharmacies are accurate. Additionally, we submit a modifier on each Medicaid claim, so the rebate is appropriate and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in our agreements with our third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. For Medicare, CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries about how to address the findings. Since Jan. 1, 2026, while we understand that manufacturers investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of duplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, Congress...constrained the [Health and Human Services] Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored in their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. The 340B statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSAs statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: we are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 5 https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how-it-works-and-why-its-controversial 6 42 U.S. Code 254b(k)(3)(G)(i) margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts. Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make 7 https://www.csrxp.org/wp-content/uploads/2026/01/CSRxP-Margin-Analysis-Chart.pdf available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to health centers is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.8 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Acts statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot to address 340B and MFP deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. 8 H.R. REP. 102-384(II) Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims- level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to CHCs participation in the program and, most importantly, protect patient access to affordable medications. We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for Salud Family Health as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions or would like to know more about how Salud Family Health uses the 340B program and its savings to support our patient services and access to affordable medications, please reach out to John Santistevan at jsantistevan@saludclinic.org. John Santistevan President/ CEO
HRSA-2026-0001-2043Community Hospital of the Monterey Peninsula2026-04-20T04:00Z4,994 chars
April 20, 2026 Thomas Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Community Hospital of the Monterey Peninsula, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs-subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis-not post-sales rebates-and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program-including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care- is built around upfront discounts. Respectfully, HRSA's assumption that a rebate model-even one designed with safeguards-could cause only a "minimal impact" on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care-outcomes that conflict with the program's statutory intent. HRSA's continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model that the one in HRSA'S withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure manufacturers' beneficial treatment under the pharmacy benefit manager's (PBM's) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufactures' commercial agreements. At a minimum, manufacturers should not be permitted to use CE's rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers. We understand that HRSA's new rebate policy would cover 25 drugs, 15more than the version announced in 2025. This means there would be more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed, and then submit data, and wait to receive a rebate. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care. Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. HRSA Should Prohibit All Rebate Denials. If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. Thank you for considering comments. Sincerely, Community Hospital of the Monterey Peninsula
HRSA-2026-0001-2044Presbyterian Healthcare Services Dr. Dan C. Trigg Memorial Hospital2026-04-20T04:00Z4,786 chars
See attached file(s) fi.\ PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Dr. Dan C Trigg Memorial Hospital, a Critical Access Hospital (CAH) and often the sole provider of hospital services in our region, we appreciate the opportunity to comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly urge HRSA not to move forward with a rebate model, as such a change would jeopardize the financial viability of rural hospitals and limit access to care in already underserved communities. For Critical Access Hospitals, the 340B program is a practical and essential tool that helps offset persistent challenges, including low patient volumes, geographic isolation, workforce shortages, and limited access to capital. The program's upfront discount structure allows us to remain operational, stock essential medications, and maintain core services such as emergency care, infusion therapy, and chronic disease management. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. Many Critical Access Hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in chronically low reimbursement levels that fail to cover the true cost of care. The 340B program allows CAHs to bridge this gap by reinvesting limited drug savings into expanded care access, including emergency services, primary care, behavioral health services, chronic disease management, transportation assistance, and medication access for vulnerable patients, Without the stability provided by upfront 340B pricing, CAHs across New Mexico would face reduced capacity to meet community needs, exacerbating health disparities in a state already challenged by provider shortages, geographic barriers, and persistently poor health outcomes. a PRESBYTERIAN Healthcare Services www.phs.org A rebate model would create immediate and unsustainable cash-flow risk for CAHs. Requiring upfront payment at full drug prices - followed by delayed reimbursementwould force small rural hospitals to float costs they simply cannot absorb. Unlike larger systems, CAHs operate with minimal reserves. Even short delays in rebate payment could impair our ability to purchase drugs, meet payroll, or comply with financial covenants. Administrative burden is another critical concern. A rebate model would require new IT systems, data reporting processes, staff training, and ongoing claims reconciliation. CAHs typically rely on very small administrative and clinical teams, where staff already perform multiple roles. Diverting limited personnel from patient care to manage rebate administration would worsen workforce strain and reduce access to services. Data privacy risks are aiso magnified in rural settings. Small patient populations make it easier to identify individuals from data shared outside the hospital. Covered entities remain fully accountable under HIPAA, while manufacturers and their vendors are not held to the same standards, exposing CAHs to compliance risks we are ill-equipped to manage. 0ur hospital has reasonably relied on HRSA's consistent, decades-long use of upfront 3408 pricing to remain financially stable and to continue serving our community. Introducing a rebate modelparticularly as a "pilot"would introduce uncertainty that undermines planning and threatens essential services. In rural communities, reductions in hospital services do not result in inconvenience; they result in patients traveling long distances or foregoing care altogether. If HRSA believes changes are necessary to address concerns such as duplicate discounts, we urge the agency to consider alternatives that do not place rural hospitals at risk. A neutral, HRSA-sanctioned claims clearinghouse would address manufacturer concerns while preserving the upfront pricing structure that CAHs depend on. For Critical Access Hospitals, the stakes of this policy decision are existential. We respectfully urge HRSA to preserve the upfront discount structure of the 340B program and abandon the rebate model concept to ensure continued access to care in rural America. Sincerely, Erica Downing VP, Chief Pharmacy Officer Dr. Dan C. Trigg Memorial Hospital Tucumcari, New Mexico
HRSA-2026-0001-2045Genentech2026-04-20T04:00Z13,536 chars
Genentech appreciates the opportunity to provide feedback; please see the attached file for our detailed comments and supporting information. VIA ELECTRONIC SUBMISSION April 20, 2026 Mr. Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane, Mail Stop 08W05A Rockville, MD 20857 Re: Genentech Comments on the 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: Genentech appreciates the opportunity to provide comments on Health Resources and Services Administrations (HRSA) proposed 340B Rebate Model Pilot Program. Genentech is a leading innovative biotechnology company that discovers, develops, manufactures, and commercializes novel medicines to treat patients with serious or life-threatening medical conditions. We have participated in the 340B Drug Discount Program (hereafter, the 340B program) since its inception and strongly support efforts to improve the transparency and integrity of the program, and to ensure that patients more directly benefit from the program. To this end, we have engaged HRSA, Congress, and the Administration on many occasions over the years. We commend HRSA for this long-overdue step toward modernizing the programs operational infrastructure. It is imperative to recognize that the 340B program has undergone a massive transformation. The resulting scale and complexity have created a profound disconnect between the programs goals and its practical reality, leading to integrity challenges, administrative friction, and risks to its long-term sustainability. Genentech believes that a well-designed rebate model, built on the transparent exchange of validated, claims-level data, fundamentally shifts the paradigm from retroactive and challenging "pay-and-chase" enforcement to proactive verification and mutual accountability. Our comments below offer specific recommendations to ensure the pilot is structured for maximum success and scalability. However, we must emphasize that this pilot is only a first step and cannot, on its own, resolve the underlying systemic issues. Genentech continues to support a larger, permanent fix for the 340B programone that ensures affordability benefits reach patients directly, increases transparency, prevents duplicate discounts, and provides the administration with sufficient oversight to prevent fraud and waste. We believe this pilot will demonstrate the feasibility of a modernized model, but we look forward to working with the Administration on the broader reforms necessary to restore common sense and accountability to the entire program. Recommendations for a Successful and Scalable Pilot To ensure the Rebate Model Pilot Program achieves its full potential and serves as a viable model for the entire 340B program, we offer the following recommendations for its design and implementation. 1. Improving Program Integrity by Avoiding Duplicate Discounts Via Claims-Level Data Under the current 340B system, manufacturers lack the transactional transparency necessary to verify discount legitimacya sharp departure from the foundational principles of Medicare and Medicaid. While those programs rely on a robust flow of data to administer rebates retroactively once eligibility is confirmed, 340B operates as an outlier by requiring upfront discounts before a patients status is definitively known, undermining the standard mechanisms used to prevent fraud, waste, and abuse. Visibility into claims-level data for manufacturers is the only way to effectively operationalize the statutory prohibition on 340B/Medicaid duplicate discounts, especially within the complex realm of Medicaid managed care. This need is further amplified by the Inflation Reduction Act (IRA), which created complex new prohibitions between 340B, the Maximum Fair Price (MFP), and inflationary rebates. It is not operationally feasible for manufacturers to comply with these MFP prohibitions without the data tools a rebate model provides, especially if CMS will not be leading on MFP deduplication. Our organization operates a comprehensive compliance framework supported by a large internal team dedicated to the identification and mitigation of duplicate discounts. This team engages directly with covered entities (CEs) to resolve instances where 340B discounts and Medicaid rebates were applied to the same drug dispensing. Despite these significant investments, under the current program, it remains impossible to proactively avoid paying both a 340B discount and a Medicaid rebate.. Our procedures are inherently retrospective, which is exacerbated by the fact that the data we receive from State Medicaid agencies are significantly delayed and often incomplete. This makes it extremely difficult to validate even timely claims. Additionally, state Medicaid agencies have no limitation on how far back they can request a rebate, creating a severe timing mismatch. As CEs regularly claim that they cannot produce historical records dating back 3 years, manufacturers are then unable to validate older claims. Engagement has become increasingly difficult as CEs adopt positions that are not supported by federal guidance. Many entities now resist responsibility for managed Medicaid claims by citing the original 1992 statute or claiming that federal law preempts state-issued billing guidance, despite HRSA advising cooperation with state agencies. Additionally, we face a critical lack of accountability from state Medicaid agencies, which often defer our inquiries back to the CEs. The current reliance on modifier policies is fundamentally flawed because 340B status is typically flagged only after a claim is adjudicated, and state agencies frequently fail to audit CE compliance with these requirements. This structure effectively forces manufacturers to police CEs on their adherence to Medicaid policies, an inappropriate burden given that existing operational entities like Apexus lack independent authority and operate under incentive structures that prioritize program growth over neutral regulation. The identification of these duplicates is further complicated by systemic data failures, particularly within medical benefit claims where information is frequently incomplete or entirely missing. While pharmacy claims utilize a standardized RX ID, medical claims lack a common numeric identifier (e.g., order history number) that all parties can use to connect a claim back to a 340B purchase. This problem is exacerbated when data is manipulated by intermediaries like managed care plans, or when necessary identifying information is dropped during the transfer of dual-eligible Medicare-Medicaid patient claims. Furthermore, our team has encountered escalating pushback from CEs who often claim an inability to find relevant records or argue that any loss of information during the billing cycle is not their responsibility. We do not deny that in many cases there is a legitimate, insurmountable ability for CEs to identify claims or find relevant records, which we believe is further evidence of the need for a common numeric identifier. Regarding the claims-level data, we reiterate our prior comments on the fields necessary to accurately and reliably validate 340B claims. To prevent erroneous denials, the program must require covered entities to submit accurate, complete, and standardized data sets. This aligns with their existing statutory obligation to maintain auditable records and does not present novel privacy risks, as it leverages routine data exchanges already common in the healthcare industry. The proposed data elements are a good starting point, but they must be refined to reflect the operational realities of claims adjudication in a complex healthcare environment. For physician-administered drugs, which constitute a significant portion of medicines in the 340B program, the National Drug Code (NDC) alone is often insufficient to validate a claim. It is critical to include the HCPCS code used for billing, relevant claim and provider identification numbers, quantity and unit of measure, and plan information to accurately process a claim and avoid erroneous denials. For all claims, requiring claims modifiers and DSCSA-mandated product serial numbers would also be useful for validation. Serial numbers, which are legally required in product barcodes, improve patient safety and product tracing beyond 340B compliance, and retrieving this data should be simple since entities already use bedside barcoding. Finally, HRSAs Office of Pharmacy Affairs (OPA) should track denial rates by specific reason, engaging in good faith with manufacturers to address compliance issues before taking punitive actions. 2. Ensuring Compliance through Reporting To ensure the pilots credibility, its success should be measured against clear, objective, and transparent metrics. Genentech recommends that HRSA partner with the OIG and key CMS groups, such as the Center for Program Integrity and the Medicare Drug Rebate and Negotiations Group, to establish a framework for evaluation. This framework should track quantitative metrics such as the average time-to-payment for clean claims, claim denial and dispute rates, the rate of successful identification of MFP duplicate discounts, and any implementation challenges reported by covered entities. Such data is necessary to assess whether the 10-day payment window is being met and to ensure the pilot's integrity. Genentech recognizes that a predictable, 10-day adjudication window is essential to the viability of a rebate model, as it is crucial for minimizing the administrative and cash-flow burden on covered entities, providing them with the resources needed to serve patients without the delays inherent in the current system. To ensure adherence and demonstrate our commitment as a responsible partner, we propose the use of secure, third-party technology platforms that create an objective, auditable record, reducing manual intervention and ensuring the 10-day limit is an operational certainty. To enhance program integrity, it may be productive for manufacturers to report aggregated data on common root causes and systemic trends identified in duplicate discount occurrences. Publicly sharing these insights would allow covered entities to proactively adjust their internal systems to address recurring issues. To assess the success of a rebate model, we suggest the reporting of evidence-based, manufacturer suspicions regarding duplicate discounts under the current 340B system to accurately track volume fluctuations under a rebate model, alongside metrics for successfully recovered or prevented duplicates. Manufacturers should also report specific reasons for claim denials, such as instances where multiple covered entities attempt to claim a discount on the same transaction, thereby shedding light on the complexities of claim-level adjudication. Furthermore, we believe program oversight must remain with independent government authorities rather than biased stakeholders. As a for-profit entity that generates revenue from nearly every transaction and collects fees for drug sales, Apexus operates under an incentive structure that prioritizes program growth over neutral regulation. This creates perceived conflicts of interest, as the organization facilitates sub-340B and sub-WAC discounts for profit while simultaneously offering paid consultancy and "optimization" services to maximize entity drug utilization. Consequently, to ensure the integrity of a 340B rebate model and manufacturer compliance, regulation and assessment of the rebate model success should favor true government oversight. 3. Expand the Rebate Model to All 340B Drugs The persistent challenges of duplicate discounts and diversion are symptoms of an administrative system that was not designed for today's complex healthcare delivery models. A rebate model addresses these issues by replacing information asymmetry with a robust flow of data, enabling the prevention of fraud, waste, and abuse. This system formalizes and improves the existing "replenishment" workflow, providing a predictable path to receiving 340B savings while reducing the need for burdensome manual reconciliations. While the pilot currently focuses on drugs with a MFP, the principles of transparency and efficiency apply universally; expanding the rebate model to all 340B drugs would solve broader systemic problems, such as the long-standing challenge of illegal Medicaid and IRA-related duplicate discountsa problem that is more pervasive than MFP duplication and accounted for an estimated $1.5 billion in duplicate discounts in 2019 alone, when the program was less than half its current size. * * * * * Genentech appreciates the opportunity to comment on the Rebate Model Pilot Program. We are committed to the long-term viability of the 340B program and believe this pilot is a critical step toward implementing a commonsense solution to long-standing challenges. We fully support this initiative and look forward to collaborating with HRSA and stakeholders to ensure a successful pilot and its subsequent expansion. Please contact us if you have any questions regarding our feedback. Sincerely, Dan Neves Senior Director US Policy and Evidence nevesd2@gene.com
HRSA-2026-0001-2046Presbyterian Healthcare Services Espanola Hospital2026-04-20T04:00Z3,930 chars
See attached file(s) PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Espanola Hospital, a Disproportionate Share Hospital (DSH) that serves a high volume of Medicaid-insured, uninsured, and medically complex patients, we appreciate the opportunity to comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. We respectfully urge HRSA not to implement a rebate model, as such a change would undermine the statutory purpose of the 340B program and significantly impair our ability to seive vulnerable populations. For DSH hospitals, the 3408 program's upfront discount structure is essential to sustaining care for patients who rely on safety-net services. Our hospital operates under chronic financial pressure driven by disproportionate uncompensated care, high-acuity case mix, and persistent workforce shortages. Prospective 340B pricing enables us to stabilize finances and maintain access to high-cost therapies. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. DSH hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in persistently low reimbursement levels that do not reflect the true cost of providing care. The 340B program enables DSH hospitals to reinvest crucial drug savings into expanded access to care, including primary and specialty services, behavioral health treatment, chronic disease management, and medication access for medically complex patients. Without the stability provided by upfront 340B pricing, safety-net hospitals across New Mexico would face serious constraints on their ability to meet community needs, worsening health disparities in a state already challenged by workforce shortages, geographic barriers, and poor population health outcomes. Rebate-based payment structures have already proven burdensome under the Inflation Reduction Act, where delayed payments, denied claims, and administrative complexity are common. Extending this approach to the 340B program would multiply those challenges. A rebate model would also impose significant administrative and compliance costs. Claims-level data submissions, reconciliation, audits, and appeals would require additional staffing, IT investments, and a PRESBYTERIAN Healthcare Services www.phs.org vendor contracts - directly offsetting the value of the 340B program and reducing our capacity to reinvest in patient care. Data privacy and security risks further compound these concerns. Manufacturers and their intermediaries are not subject to the same HIPAA obligations as covered entities, exposing DSH hospitals to compliance and liability risks beyond our control. DSH hospitals have reasonably relied on HRSA's decades-long implementation of the 340B program through upfront discounts when designing staffing models, service lines, and financial plans. A sudden shift to a rebate framework would disrupt those reliance interests and destabilize the safety net. If HRSA believes additional safeguards are necessary, we strongly support alternatives that preserve upfront pricing, including a neutral, HRSA-sanctioned claims clearinghouse. For these reasons, we respectfully urge HRSA to preserve the upfront discount structure of the 340B program and abandon the rebate model concept. Sincerely, Erica Downing VP, Chief Pharmacy Officer Espanola Hospital Espanola, New Mexico
HRSA-2026-0001-2047Community Health Development, Inc.2026-04-20T04:00Z23,271 chars
Community Health Development, Inc. is very much appreciated for the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot and respectfully asks for your support in exempting FQHCs from the 340B Rebate Model, which we believe will negatively impact the 34 million. We look forward to continuing to engage with HRSA on this prominent issue. April 18, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Development, Inc. (CHDI), I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Organizational Background CHDI was founded in 1983 in Uvalde, Texas, with the mission of increasing access to high-quality healthcare services for uninsured and underserved populations. Since its inception, CHDI has remained committed to improving the health and well-being of the communities it serves. CHDI began delivering medical care in 1984 with a staff of four, operating out of an 800-square- foot trailer on the east side of Uvalde. Today, CHDI has grown into a comprehensive, multi-site healthcare organization that: Operates seven service delivery sites across Uvalde and Real counties, including a School- Based Health Center; Provides integrated medical, dental, behavioral health, pharmacy, laboratory, and radiology (X-ray) services; Employs more than 140 staff members, making CHDI one of the major employers in our area; and Serves 13,005 patients annually. Of those served, 86% have incomes at or below 200% of the Federal Poverty Level. Additionally, 34% of patients are uninsured, while 12% are covered by Medicaid, 18% by Medicare, and 36% by private insurance. Community Health Development, Inc. The Heart of the Community 2 Since 2021, CHDI has been recognized by the HRSA as a Health Center Quality Leader, reflecting its commitment to delivering high-quality, patient-centered care. In 2025, CHDI earned its first National Quality Leader Badges for excellence in Diabetes and Behavioral Health, further demonstrating its strong clinical outcomes and dedication to addressing critical health needs in its service area. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For CHDI in particular, this means it will impact: In 2025, 6,547 patientsrepresenting 50% of our total patient populationrelied on the 340B program to access 71,401 medications, underscoring its critical role in supporting care for our most vulnerable populations. Our current administrative cost of $211,700 to operate the 340B program will increase significantly under the proposed rebate model, placing an additional financial and operational burden on our organization. The reduced and delayed revenue associated with the rebate model will directly impact on our ability to sustain essential, non-revenue-generating services, including outreach and enrollment, care coordination, health education, quality improvement, and compliance. These constraints may ultimately force us to reduce services or increase the cost of care for the patients we serve. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. 3 340B Rebate Model Operational & Administrative Costs A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, CHDI provided $3,202,394 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CHDI anticipates needing at least five additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CHDI anticipates an increase of $65,100 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.1 For CHDI, the anticipated staffing impact is substantial. We estimate the need to hire: o 1.0 FTE revenue and billing specialist to manage claims and rebate processing o .5 FTE compliance specialist to update and monitor adherence to evolving HRSA requirements o 1.0 FTE pharmacy technician to support program monitoring and coordination with non-pharmacy staff o 0.5 FTE IT specialist to support software modifications and reporting customization o 1.0 FTE pharmacist to oversee 340B program operations These additional staffing requirements represent a significant and ongoing financial burden that is not currently built into CHDIs operating model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.2 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At CHDI, patient demand continues to grow, with utilization increasing by approximately 58% in 2026. In 2025 alone, CHDI spent $2,371,754 on pharmaceuticals. With continued patient growth and the requirement to absorb upfront drug purchasing costs under the rebate model, we project this expense to increase to approximately $4,098,028. 1 Internal NACHC assessment (99 responses). 2 Ibid. 4 The combined impact of increased staffing requirements and rising pharmaceutical expenditure will strain already limited resources, divert funding from patient care, and jeopardize CHDIs ability to sustain services for underserved populations. For these reasons, we strongly urge HRSA to exempt Community Health Centers from the 340B rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. CHDI estimates that at least 16 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all 9 drug manufacturers plans are followed. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CHDI urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Our organization estimates that $25,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For CHDI, which served 13,005 patients in 2025, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2,302,584 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use TPAs, in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. CHDI will have to manually compute costs and sliding fee discounts unless we can contract with companies that understand the process and can program an interface between the pharmacy software and EHR systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. CHDI has not been able to identify a 5 software vendor that fully understands how the rebate model should operate, while also understanding CHDI workflow, and estimates range between $20,000 and $55,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with one pharmacy to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across one pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Uvalde and Real with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,3 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.4 A. Financial Challenges The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.5 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.6 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At CHDI, it has been our longstanding practice to provide medications at acquisition cost plus a minimal dispensing fee, scaled according to income ($4, $6, $8, or $12), thereby directly passing 340B savings on to patients. 3 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 4 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 5 HRSA FAQ 6 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 6 Requiring CHDI to purchase medications at full cost under a rebate model would undermine this approach and create a significant financial barrier for patients. This shift would directly impact medication adherence and access to care for the low-income populations we serve, contradicting the intent of the 340B program and CHCs statutory obligation to provide affordable services. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. Based on our organizations data, we estimate it would cost $1,020,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $561,000 to purchase these same drugs at the 340B ceiling price. This represents a 55% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHDI anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of medications, we would be compelled to scale back non-revenue-generating yet essential services, including outreach, health education, care coordination, and referral services. Additionally, we would be forced to reduce behavioral health services, including psychiatric medication management, as the revenue generated is insufficient to sustain therapists and psychiatric providers. Following the Robb Elementary shooting tragedy in 2022, the demand for behavioral health services increased significantly, making these reductions particularly concerning. Operating Hours: We anticipate the need to reduce Saturday clinic hours by four hours per week and eliminate a full-time provider position dedicated to urgent and acute care (40 hours per week), which would negatively impact access to care. Our evening and weekend hours are often the only times working-class and agricultural patients can seek medical attention without losing wages. Having a dedicated acute care provider allows patients to be seen promptly and return to work with minimal disruption to their income. Reducing these services would significantly limit timely access to care for this population. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time community health worker, medical support staff, and a behavioral health and medical provider, thereby delaying wait times for medical and mental health appointments. appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4484 uninsured patients from rationing their insulin or heart medication. 7 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Every dollar paid upfront at WAC is effectively frozen within the manufacturers reconciliation process, limiting immediate access to critical operating funds. During the rebate period, CHDI experiences a significant reduction in liquidity, constraining our ability to respond to urgent public health needs, facility emergencies, and emerging community demands. Operating under a rebate model would require us to rely on limited financial reservesan approach that is neither sustainable nor aligned with the intent of the 340B program. These reserves are currently allocated to the recruitment and retention of essential medical, dental, and behavioral health providers. Redirecting these funds would force us to suspend recruitment efforts for critically needed providers, further exacerbating existing workforce shortages and access-to-care challenges in our service area. Requiring CHCs to incur debt to maintain access to medications threatens our financial and clinical stability. In medically underserved regions such as ours, where patients depend on CHDI as a primary safety-net provider, the risk of reaching credit limits or depleting reserves represents a direct threat to continuity of care and community health outcomes. If CHCs are forced into prolonged financial strain, the downstream effects will be immediate and measurable: increased patient wait times, reduced service capacity, and a diminished ability to provide affordable medications. These impacts run counter to the mission of the 340B program and jeopardize access to care for the more than 34 million patients served by health centers nationwide. a. Financial Impact of Rebate Denials and Delays CHDI urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.7 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $172,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 7 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 8 Conclusion CHDI strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHDI believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The success of HRSA in expanding the highly effective health center model is now at risk due to the 340B rebate program. This program will negatively impact the 34 million Americans served by FQHCs. Additionally, rural economies like ours may suffer as CHDI is forced to reduce staffing and services due to decreased revenue and rising expenses. Community Health Development, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please do not hesitate to contact me at mcastanon@CHDI4health.org or call me at 830-278-5604 ext. 3104. Sincerely, Mayela Castanon Chief Executive Officer Community Health Development, Inc. Serving Uvalde, Real, Edwards, and Zavala counties since 1983 Administration Offices 908 Evans, Bldg. A Uvalde, Texas 78801 (830) 278-5604 Fax: (830) 278-1836 www.chdi4health.org
HRSA-2026-0001-2048Presbyterian Healthcare Services Lincoln County Medical Center2026-04-20T04:00Z4,809 chars
See attached file(s) Z.4 PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Lincoln County Medical Center, a Critical Access Hospital (CAH) and often the sole provider of hospital services in our region, we appreciate the opportunity to comment on HRSA's Request for information regarding a potential 340B Rebate Model Pilot Program. We strongly urge HRSA not to move forward with a rebate model, as such a change would jeopardize the financial viability of rural hospitals and limit access to care in already underseived communities. For Critical Access Hospitals, the 3408 program is a practical and essential tool that helps offset persistent challenges, including low patient volumes, geographic isolation, workforce shortages, and limited access to capital. The program's upfront discount structure allows us to remain operational, stock essential medications, and maintain core services such as emergency care, infusion therapy, and chronic disease management. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. Many Critical Access Hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in chronically low reimbursement levels that fail to cover the true cost of care. The 340B program allows CAHs to bridge this gap by reinvesting limited drug savings into expanded care access, including emergency services, primary care, behavioral health services, chronic disease rnanagernent, transportation assistance, and medication access for vulnerable patients. Without the stability provided by upfront 3408 pricing, CAHs across New Mexico would face reduced capacity to meet community needs, exacerbating health disparities in a state already challenged by provider shortages, geographic barriers, and persistently poor health outcomes. A rebate model would create immediate and unsustainable cash-flow risk for CAHs. Requiring upfront payment at full drug pricesfollowed by delayed reimbursementwould force small rural hospitals to float costs they simply cannot absorb. Unlike larger systems, CAHs operate with minimal reserves. Even short delays in rebate payment could impair our ability to purchase drugs, meet payroll, or comply with financial covenants. Administrative burden is another critical concern. A rebate model wouid require new IT systems, data reporting processes, staff training, and ongoing claims reconciliation. CAHs typically rely on very small administrative and clinical teams, where staff already perform multiple roles. Diverting limited personnel from patient care to manage rebate administration would worsen workforce strain and reduce access to services. LA PRESBYTERIAN Healthcare Services www.phs.org Data privacy risks are also magnified in rural settings. Small patient populations make it easier to identify individuals from data shared outside the hospital. Covered entities remain fully accountable under HIPAA, while manufacturers and their vendors are not held to the same standards, exposing CAHs to compliance risks we are ill-equipped to manage. Our hospital has reasonably relied on HRSA's consistent, decades-long use of upfront 340B pricing to remain financially stable and to continue serving our community. Introducing a rebate model - particularly as a pilot - would introduce uncertainty that undermines planning and threatens essential services. In rural communities, reductions in hospital services do not result in inconvenience; they result in patients traveling long distances or foregoing care altogether. If HRSA believes changes are necessary to address concerns such as duplicate discounts, we urge the agency to consider alternatives that do not place rural hospitals at risk. A neutral, HRSA-sanctioned claims clearinghouse would address manufacturer concerns while preserving the upfront pricing structure that CAHs depend on. For Critical Access Hospitals, the stakes of this policy decision are existential. We respectfully urge HRSA to preserve the upfront discount structure of the 340B program and abandon the rebate model concept to ensure continued access to care in rural America. Sincerely, IA - Li- 0 --- 1 ) 11 - - - - - .. Erica Downing VP, Chief Pharmacy Officer Lincoln County Medical Center Ruidoso, New Mexico
HRSA-2026-0001-2049Presbyterian Healthcare Services Plains Regional Medical Center2026-04-20T04:00Z3,979 chars
See attached file(s) a PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Plains Regional Medical Center, a Disproportionate Share Hospital (DSH) that serves a high volume of Medicaid-insured, uninsured, and medically complex patients, we appreciate the opportunity to comment on HRSA's Request for lnformation regarding a potential 340B Rebate Model Pilot Program. We respectfully urge HRSA not to implement a rebate model, as such a change would undermine the statutory purpose of the 340B program and significantly impair our abiiity to serve vulnerable populations. For DSH hospitals, the 340B program's upfront discount structure is essential to sustaining care for patients who rely on safety-net services. Our hospital operates under chronic financial pressure driven by disproportionate uncompensated care, high-acuity case mix, and persistent workforce shortages. Prospective 340B pricing enabies us to stabilize finances and maintain access to high-cost therapies. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. DSH hospitals in New Mexico serve patient populations in which Medicaid comprises a signifcant share of the overall payer mix, resulting in persistently low reimbursement [evels that do not reflect the true cost of providing care. The 3408 program enables DSH hospitals to reinvest crucial drug savings into expanded access to care, including primary and specialty services, behavioral health treatment, chronic disease management, and medication access for medically complex patients. Without the stability provided by upfront 340B pricing, safety-net hospitals across New Mexico would face serious constraints on their ability to meet community needs, worsening health disparities in a state already challenged by workforce shortages, geographic barriers, and poor population health outcomes. Rebate-based payment structures have already proven burdensome under the Inflation Reduction Act, where delayed payments, denied claims, and administrative complexity are common. Extending this approach to the 340B program would multiply those challenges. A rebate model would also impose significant administrative and compliance costs. Claims-level data submissions, reconciliation, audits, and appeals would require additional staffing, IT investments, and a PRESBYTERIAN Healthcare Services www.phs.org vendor contracts - directly offsetting the value of the 340B program and reducing our capacity to reinvest in patient care. Data privacy and security risks further compound these concerns. Manufacturers and their intermediaries are not subject to the same HIPAA obligations as covered entities, exposing DSH hospitals to compliance and liability risks beyond our control. DSH hospitals have reasonably relied on HRSA's decades-long implementation of the 340B program through upfront discounts when designing staffing models, service lines, and financial plans. A sudden shift to a rebate framework would disrupt those reliance interests and destabilize the safety net. If HRSA believes additional safeguards are necessary, we strongly support alternatives that preserve upfront pricing, including a neutral, HRSA-sanctioned claims clearinghouse. For these reasons, we respectfully urge HRSA to preserve the upfront discount structure of the 340B prograrn and abandon the rebate model concept. Sincerely, &tio.__. De.J\----... Erica Downing VP, Chief Pharmacy Officer Plains Regional Medical Center Clovis, New Mexico
HRSA-2026-0001-2050Healthcare Association of New York State2026-04-20T04:00Z13,714 chars
See HANYS' comments attached April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Attention: HRSA-2026-03042 5600 Fishers Lane Rockville, Maryland 20857 RE: HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of our member nonprofit and public hospitals participating in the 340B Drug Pricing Program, the Healthcare Association of New York State welcomes the opportunity to comment on the RFI above. While the RFI requests input from 340B covered entities through a series of specific questions, the serious harm posed by the proposed 340B rebate model compels HANYS to express our opposition to the rebate approach overall, raise specific concerns on how it would be operationalized and highlight the new, additional cost challenges it would impose on covered entities. A 340B rebate model would fundamentally undermine the programs purpose The 340B Drug Pricing Program, as currently structured, functions precisely as Congress intended: it lowers provider costs upfront, at the point of sale, thereby enabling 340B hospitals to fund essential healthcare services without relying on additional federal funding. A shift away from this longstanding upfront discount structure to a back-end rebate model would represent a fundamental departure from congressional intent. Moreover, a rebate model would negatively impact participating hospitals by introducing new costs, disrupting cash flow, and requiring significant workflow and system changes. Collectively, these impacts would substantially erode the value of the 340B program for participating hospitals. Any increase in costs for 340B hospitals could also necessitate additional wraparound funding from state or federal governments, thereby undermining the 340B programs core purpose: to reduce provider costs without relying on new public expenditures. Thomas J. Engels Page 2 April 20, 2026 A 2025 survey1 of New York hospitals showed statewide projections of a breakeven median operating margin of only 0.1%, highlighting a healthcare system with virtually no financial cushion to withstand payment reductions or added costs. Notably, the survey identified drug costs as the single largest driver of cost growth from 2022 to 2025, increasing by an astonishing 71%, far outpacing general inflation (9%). For these reasons, and as further detailed below, HANYS strongly opposes any move toward a 340B rebate model, which we view as a misguided and unnecessary departure from the programs successful 30-year design. Rebate model would undermine 340B hospital reliance interests and centralized federal oversight HRSA specifically requested information on our members perspectives regarding hospitals reliance on maintaining upfront discounts and whether those reliance interests are reasonable considering the HHS secretarys statutory authority to implement discounts through a rebate. For decades, hospitals have reasonably relied on receiving 340B discounts upfront and on centralized federal oversight when designing their budgets, IT systems, operational workflows, compliance infrastructure and patient-care delivery models. As outlined below, a rebate model would upend that reliance, weaken HRSAs ability to oversee and enforce the program, and create a system that is difficult to operate and structurally favors manufacturers over the safety net providers the 340B program was created to support. Purchasing drugs upfront at the wholesale acquisition cost. 340B hospitals have structured their financial planning, liquidity management and drug purchasing operations around the certainty and immediacy of upfront, discount 340B pricing at the point of sale. Requiring hospitals to front the funds to purchase 340B drugs at WAC would fundamentally disrupt these longstanding practices by converting predictable 340B savings into uncertain and/or delayed receivables. It would also effectively put hospitals in the position of financing drug manufacturers statutory discount obligations for weeks or months at a time. This shift would impose significant liquidity strain and financial risk on 340B hospitals, while conferring a substantial advantage to drug manufacturers by allowing them to retain and use funds that should have been discounted at the time of purchase. The result would be a material erosion of the value and reliability of the 340B benefit at its most critical point: drug acquisition. Drug dispensing/administration. 340B hospitals have designed their inventory systems, contract pharmacy arrangements and care delivery workflows around the certainty of upfront 340B pricing. If hospitals must implement a rebate model, they would be required to dispense or administer drugs only after having already paid full price, thereby assuming all financial risk without knowing whether, when or in what amount a rebate would ultimately be paid. At this stage, the 340B hospital would have fully incurred the drug cost and delivered care yet would not have realized any 340B statutory benefit. Moreover, HRSAs oversight role would be limited or deferred until well after dispensing and/or administration of the drugs has occurred, even though financial exposure and compliance consequences would have already accrued to the hospital. This structure forces hospitals to bear 1 New York State Hospitals Fiscal Survey Report https://www.hanys.org/communications/publications/2025/new-york-state- hospitals-fiscal-survey-report-nov-2025.pdf Thomas J. Engels Page 3 April 20, 2026 unilateral risk during drug dispensing and administration, fundamentally undermining the predictability and reliability that longstanding, upfront 340B pricing has provided. Claims submission and review. 340B hospitals have invested extensively in staffing, information technology systems, workflows and compliance infrastructure built around upfront pointofsale discounts and HRSA audit readiness not the ongoing claims submission, receivables tracking and multimanufacturer dispute management that a rebate model would require. Under a rebate approach, hospitals would first need to assemble and submit detailed pharmacy or medical claims before accessing any 340B savings. This process could take weeks or months due to clinical documentation, coding and/or payer billing timelines. This delay would significantly slow access to 340B savings that are otherwise available immediately through upfront pricing. It would also shift substantial administrative burden and new costs onto hospitals while granting drug manufacturers significant discretion over whether submitted claims are deemed valid for rebate. In effect, the rebate model would shift compliance and eligibility determinations from the programs administering agency to drug manufacturers entities with the strongest financial incentive to deny, delay or dispute payment. This would fundamentally alter the balance and integrity of the 340B program. Rebate payment. 340B hospitals have long depended on timely, point-of-sale access to drug cost savings to support core operations, maintain liquidity and fund patient services. Delayed rebates whether caused by claims assembly, review timelines or manufacturer decision-making reduce cash on hand, eliminate potential interest earnings and permanently erode the real value of 340B savings. Even when rebates are ultimately paid, hospitals and other covered entities will have already incurred substantial and irreparable financial harm from the loss of liquidity and the administrative costs required to pursue payment. Meanwhile, drug manufacturers would gain financial benefit from retaining and using these funds during the submission, review and decision period. This imbalance would leave 340B hospitals fully exposed to risk of delay and denial, erode 340B program statutory benefits and undermine the programs congressional design of predictable, upfront savings. Dispute resolution. 340B hospitals have long operated within a framework and have built their compliance programs, systems, workflows and staffing around upfront eligibility determinations followed by post-purchase HRSA audits. They have not structured their operations to manage the potential financial disputes across multiple drug manufacturers as a condition of receiving statutory 340B drug discounts. Even with appropriate HRSA oversight at this stage, a rebate-based model would fundamentally alter the program by imposing substantial new administrative burdens, risk and costs on 340B hospitals. Requiring hospitals to actively pursue and resolve disputes in order to obtain savings guaranteed by statute further delays access to funds and diverts limited resources away from patient care. This shift would diminish the predictability, timeliness and value of 340B discounts, eroding the programs statutory benefits and undermining the reliance interests hospitals have reasonably developed over decades of program operation. Thomas J. Engels Page 4 April 20, 2026 The cost of implementing and maintaining a 340B rebate model for hospitals and other CEs Under a rebate model, providers would now be required to expend additional resources simply to access the same statutory benefit they receive today. HRSAs own 340B rebate model RFI acknowledges that transitioning the 340B program from upfront point-of-sale discounts to a rebate- based model would impose significant new administrative, staffing and IT costs on 340B hospitals and other CEs. These increased requirements would not enhance patient care or program integrity; instead, they would layer complexity and expense onto an already resource-strained system. Each additional dollar and staff hour spent administering rebates would therefore divert necessary funds away from direct patient care. Based on conversations with 340B hospitals across New York state, HANYS assessment of the cost implications of a rebate-based aligns with that of the American Hospital Association. The AHA estimates that hospitals would need, on average, one to three additional full-time equivalents to manage the transition to and ongoing compliance with a rebate system. In addition to staffing needs, the AHA projects annual operational costs ranging from $100,000 to $900,000 per hospital. Importantly, these are recurring expenses, not one-time implementation costs. In addition to these new operating costs, 340B hospitals across New York would be forced to outlay millions of dollars upfront to purchase drugs at WAC. This cash outlay would be demanded of hospitals many of which are already in financial peril. As noted above, hospitals in New York are operating on extremely thin margins, with 70% reporting negative or unsustainable operating margins. These hospitals simply lack the financial capacity to outlay cash for upfront drug costs or delayed payments under a rebate model. In fact, about half of New Yorks 340B hospitals are considered financially distressed, meaning they receive direct supplemental funding from the state to support their operation and/or operate as a public hospital. Based on their 2024 audited financial statements, these hospitals reported an average of just 33 days of cash on hand. These data demonstrate that a rebate model is not only a massive structural shift but one that would impose additional financial strain on a program Congress designed specifically to alleviate this strain on safety-net providers. By increasing costs and complexity, a rebate model would weaken the effectiveness of the 340B program and reduce the programs ability to achieve its core goal of supporting access to care for vulnerable patients. Conclusion The 340B Drug Pricing Program is a vital financial lifeline for more than 100 New York hospitals and the communities/patients they serve. In New York state, hospitals have reported leveraging 340B savings to operate programs and services that they might otherwise not be able to offer, such as: free or substantially discounted prescriptions for uninsured or low-income patients; medication therapy management programs to improve patient care and reduce overall healthcare costs and hospital readmissions; mobile units to bring care to rural and other medically underserved communities without local primary care options or pharmacies; free oncology services for low-income patients; HIV/AIDS clinics; diabetes management programs; multidisciplinary clinics offering substance abuse and mental health services; and Thomas J. Engels Page 5 April 20, 2026 transportation support for patients who need emergency room and chronic care services. Undermining the 340B benefit through a rebate model puts not only these service offerings at risk, but also the financial stability of the very hospitals the program was intended to protect. Preserving the upfront discount mechanism that hospitals have relied on for years is the best way to fulfill the purpose of the 340B program. Thank you for the opportunity to comment. If you have questions, contact Kevin Krawiecki, vice president, fiscal policy, at kkrawiec@hanys.org or 518.431.7634. Sincerely, Marie B. Grause, RN, JD President
HRSA-2026-0001-2051Presbyterian Healthcare Services Presbyterian Hospital2026-04-20T04:00Z3,970 chars
See attached file(s) LA PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Presbyterian Hospital, a Disproportionate Share Hospital (DSH) that serves a high volume of Medicaid-insured, uninsured, and medically complex patients, we appreciate the opportunity to comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. We respectfully urge HRSA not to implement a rebate model, as such a change would undermine the statutory purpose of the 340B program and significantly impair our ability to serve vulnerable populations. For DSH hospitals, the 340B program's upfront discount structure is essential to sustaining care for patients who rely on safety-net services. Our hospital operates under chronic financial pressure driven by disproportionate uncompensated care, high-acuity case mix, and persistent workforce shortages. Prospective 340B pricing enables us to stabilize finances and maintain access to high-cost therapies. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. DSH hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in persistently low reimbursement levels that do not reflect the true cost of providing care. The 3408 program enables DSH hospitals to reinvest crucial drug savings into expanded access to care, including prirnary and specialty services, behavioral health treatment, chronic disease management, and medication access for medically complex patients. Without the stability provided by upfront 340B pricing, safety-net hospitals across New Mexico would face serious constraints on their ability to meet community needs, worsening health disparities in a state already challenged by workforce shortages, geographic barriers, and poor population health outcomes. Rebate-based payment structures have already proven burdensome under the Inflation Reduction Act, where delayed payments, denied claims, and administrative complexity are common. Extending this approach to the 3408 program would multiply those challenges. A rebate model would also irnpose significant administrative and compliance costs. Claims-level data submissions, reconciliation, audits, and appeals would require additional staffing, IT investments, and Sincerely, o w: - Dcn,:;--_, Cot- a PRESBYTERIAN Healthcare Services www.phs.org vendor contracts - directly offsetting the value of the 340B program and reducing our capacity to reinvest in patient care. Data privacy and security risks further compound these concerns. Manufacturers and their intermediaries are not subject to the same HIPAA obligations as covered entities, exposing DSH hospitals to compliance and liability risks beyond our control. DSH hospitals have reasonably relied on HRSA's decades-long implementation of the 340B program through upfront discounts when designing staffing models, service lines, and financial plans. A sudden shift to a rebate framework would disrupt those reliance interests and destabilize the safety net. If HRSA believes additional safeguards are necessary, we strongly support alternatives that preserve upfront pricing, including a neutral, HRSA-sanctioned claims clearinghouse. For these reasons, we respectfully urge HRSA to preserve the upfront discount structure of the 3408 program and abandon the rebate model concept. Erica Downing VP, Chief Pharmacy Officer Presbyterian Hospital Albuquerque, New Mexico
HRSA-2026-0001-2052Jefferson Comprehensive Care System, Inc.2026-04-20T04:00Z6,730 chars
See attached file(s) JEFFERSON COMPREHENSIVE CARE SYSTEM, INC. P.O. Box 1285 Pine Bluff, AR 71613-1285 (870) 543-2380 www.jccsi.org CI Pine Bluff 1101 Tennessee St. Phone: 870-543-2380 April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Jefferson Comprehensive Care System submits these comments in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program. Jefferson Comprehensive is a federally qualified health center headquartered in Pine Bluff, Arkansas, serving Jefferson and Pulaski counties, and has participated in the 340B Drug Pricing Program since January 2007. We serve 8,133 patients whose medical and economic circumstances make our participation in the 340B program indispensable to our operations. The proposed rebate model would undermine that participation and the care we deliver through it. Financial Impact Our current 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is approximately $153,000 per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $898,000 per year roughly six times our current acquisition cost. The difference of approximately $745,000 is the working capital Jefferson Comprehensive would be required to float to manufacturers each year the rebate mechanism operated. That float is not a one-time implementation expense; it recurs annually for as long as the mechanism remains in place. The MFP drug list represents 30.2% of our total 340B program. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary and we see no principled basis for assuming it will remain permanently confined CI Altheimer Center 309 S. Edline Phone: 870-766-8411 CI Redfield Center 823 River Road Phone: 501-397-2261 ID College Station Ctr. 4206 Frazier Pike Phone: 501-490-2440 CI Open Hands Center Healthcare for the Homeless 3000 Springer Blvd. Ste. B, Little Rock Phone: 501-244-2121 CI Little Rock Community Health Center 1100 N. University Ste. 125 Phone: 501-663-0055 CI North Little Rock Community Health Ctr. 2525 Willow St. Ste. 1 Phone: 501-812-0225 CI AR Baptist College 1724 Bishop St. Little Rock Phone: 501-737-2014 CI Downtown Little Rock Community Health Ctr. 1400 Main St. Little Rock Phone: 501-371-0055 MEMBER COMMUNITY HEALTH CENTERS OF ARKANSAS the annual working capital requirement grows to approximately $1.55 million. Jefferson Comprehensive does not maintain unfunded liquidity at that scale, and no community bank in our service area will extend a line of credit against the promise of manufacturer reimbursement on disputed rebate claims. Separately, the Medicare Drug Price Negotiation Program has compressed our net 340B savings on affected products by 15% in the first quarter of 2026. That compression is already embedded in our 2026 operating projections. Adding the cash flow requirements on top of this absolute revenue reduction would be devastating to our organization. Operational Impact Three operational problems surfaced during our preparation for the planned 2026 pilot, and each of them remains unresolved. First, wholesaler credit capacity. Our wholesaler credit limits were calibrated against 340B acquisition pricing, not WAC. Our wholesalers were neither prepared nor willing to extend the credit limits required to operate our 340B accounts at WAC. When credit limits are exceeded, orders are held, replenishment stops, and the 340B program ceases to function. Second, reconciliation infrastructure. The third-party vendor interface manufacturers selected for rebate adjudication did not provide data and reporting sufficient to support a reliable reconciliation process. The vendor cited HIPAA compliance as the basis for not retaining prescription numbers on claims; any vendor entrusted with this function should meet the security requirements necessary to retain and report Rx numbers to its system users. Without that claim-level detail, denials cannot be matched to dispenses, corrected reason codes cannot be applied, and the cash loop on the transaction cannot be closed. On our combined 2026-2027 MFP volume, a five percent denial rate a reasonable planning assumption would place approximately $45,000 at risk in the first year of the pilot. Third, the administrative burden. HRSA' s Information Collection Request estimates approximately five hours per week per covered entity. Our preparation work does not support that estimate. We estimate approximately 0.25 additional FTE dedicated to submission, denial management, reconciliation, and cash forecasting a position that does not exist in our operating budget today. Alternative The deduplication objective the rebate model is designed to address can be accomplished through a neutral, federally administered 340B claims clearinghouse. CMS has begun building the framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. A clearinghouse approach satisfies the deduplication objective without placing drug manufacturers in the position of adjudicating 340B eligibility, without requiring covered entities to float working capital to manufacturers, and without creating the access and compliance problems described above. A second alternative is already in use. Manufacturers currently require 340B claims data from covered entities as a condition of 340B access. That data is sufficient to support MFP/340B deduplication without constructing a parallel rebate adjudication infrastructure. One operational refinement is warranted: for new pharmacy accounts, or for accounts without claims history at the time a data requirement is imposed, manufacturers should be required to accept an attestation of compliance rather than withholding 340B access pending data that does not yet exist. Jefferson Comprehensive Care System respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program, exempt federally qualified health centers from any rebate mechanism subsequently proposed, and direct the deduplication question to the neutral clearinghouse framework already under development at CMS or to the existing manufacturer claims data mechanism with the attestation accommodation described above. Thank you for your consideration. Sincerely, Sandra J. Brown Chief Executive Officer Jefferson Comprehensive Care System Pine Bluff, Arkansas 340B ID: CH060110
HRSA-2026-0001-2053Presbyterian Healthcare Services Santa Fe Medical Center2026-04-20T04:00Z3,963 chars
See attached file(s) PRESBYTERIAN Healthcare Services www.phs.org Re: Request for information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Santa Fe Medical Center, a Disproportionate Share Hospital (DSH) that serves a high volume of Medicaid-insured, uninsured, and medically complex patients, we appreciate the opportunity to comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. We respectfully urge HRSA not to implement a rebate model, as such a change would undermine the statutory purpose of the 340B program and significantly impair our ability to serve vulnerable populations. For DSH hospitals, the 3408 program's upfront discount structure is essential to sustaining care for patients who rely on safety-net services. Our hospital operates under chronic financial pressure driven by disproportionate uncompensated care, high-acuity case mix, and persistent workforce shortages. Prospective 340B pricing enables us to stabilize finances and maintain access to high-cost therapies. In New Mexico, the importance of the 340B program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. DSH hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in persistently low reimbursement levels that do not reflect the true cost of providing care. The 340B program enables DSH hospitals to reinvest crucial drug savings into expanded access to care, including primary and specialty services, behavioral health treatment, chronic disease management, and medication access for medically complex patients. Without the stability provided by upfront 340B pricing, safety-net hospitals across New Mexico would face serious constraints on their ability to meet community needs, worsening health disparities in a state already challenged by workforce shortages, geographic barriers, and poor population health outcomes. Rebate-based payment structures have already proven burdensome under the Inflation Reduction Act, where delayed payments, denied claims, and administrative complexity are common. Extending this approach to the 340B program would multiply those challenges. a PRESBYTERIAN Healthcare Services www.phs.org A rebate model would also impose significant administrative and compliance costs. Claims-level data submissions, reconciliation, audits, and appeals would require additional staffing, IT investments, and vendor contracts - directly offsetting the value of the 340B program and reducing our capacity to reinvest in patient care. Data privacy and security risks further compound these concerns. Manufacturers and their intermediaries are not subject to the same HIPAA obligations as covered entities, exposing DSH hospitals to compliance and liability risks beyond our control. DSH hospitals have reasonably reiled on HRSA's decades-long impiementation of the 340B program through upfront discounts when designing staffing models, service lines, and financial plans. A sudden shift to a rebate framework would disrupt those reliance interests and destabilize the safety net. lf HRSA believes additional safeguards are necessary, we strongly support alternatives that preserve upfront pricing, including a neutral, HRSA-sanctional claims clearinghouse. For these reasons, we respectfully urge HRSA to preserve the upfront discount structure of the 340B program and abandon the rebate model concept. Sincerely, ._ , O._ D ,,.._,.. Erica Downing VP, Chief Pharmacy Officer Santa Fe Medical Center Santa Fe, New Mexico
HRSA-2026-0001-2054Deaconess Health System2026-04-20T04:00Z41,629 chars
See attached letter ah Deaconess April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate MadeI Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA CPA's Request for Information ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by Deaconess Health System (includes Deaconess Hospital, Deaconess Henderson Hospital, Gibson General Hospital, Deaconess Union County Hospital, Jennie Stuart Medical Center, Baptist Health Deaconess Madisonville Hospital, Union County Hospital District, Red Bud Regional Hospital, and Deaconess Memorial Medical Center), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Deaconess Health System and other Covered Entities. As a 340B-participating hospital, Deaconess Health System is a core component of the healthcare safety net in the Southern Indiana, lllinois, and Western Kentucky comrnunities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Deaconess HeaIth System participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for RHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate rnodel. To that end, we offer our own context, comments and recornmendations regarding the RFI. At a high level, Deaconess's 340B Program participation enables us to commit more than $168million dollars per year to the comrnunity safety net populations we serve. Deaconess Health System also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access ta 340B pricing, a rebate model approved by your 6 00 Mary Street, Evansville, IN 47747 812-450-5000 deaconess,com April 20, 2026 Page 2 ah Deaconess Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, Deaconess Health System wishes to rnake clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not neoded to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of "consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process," Deaconess Health System submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH DEACONESS HEALTH SYSTEM'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate rnodel materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.' More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 91 Fed. Reg. 7287, 7289 (Feb. I 7, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 3 dh Deaconess A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Deaconess Health System and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval,' HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Deaconess Health System when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affmnatively chose to place it on manufacturers? 2. HOW COULD HRSA OR DEACONESS HEALTH SYSTEM TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Deaconess Health System. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased over the past 6 years, directly limiting the extent to which we can support our community. Yet, somehow, this isn't enough for the manufacturers or, apparently, MIS and HRSA OPA. Manufacturers have also demanded that we disclose patients' protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through many covered entities' pharmacy, manufacturers have denied MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means covered entities have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B 5 42 U.S.c. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). Whitman v. Am. Trucking Ass"ns, 531 U.S. 457 (2001). 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.corn April 20, 2026 Page 4 JL. dh Deaconess price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers' agent, Second Sight Solutions, demands that covered entities upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process they've developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, covered entities simply need to click an "Identify as 340B" button within Second Sight's Beacon software, and the manufacturer rnakes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing rnanufacturer adherence to any 340B rebate model requirements. Finally, a "float" often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturer's drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the "float," requiring it not just for Part D beneficiaries, but all of Deaconess Health System's purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Deaconess Health System trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO DEACONESS HEALTH SYSTEM TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid biIling practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Deaconess Health System would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The systern manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available 8 Letter from J. DeCubellis President & CEO of America's Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2020 (https://essentialbospitals.orewp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2020. 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess,corn April 20, 2026 Page 5 IL dh Deaconess meaningfiuI tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES URSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the cornmitments it expects rnanufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entity's contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies, If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Deaconess Health System has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entity's interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 9 42 U.s.c. 256b(a)(1). 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 6 dh Deaconess 6. WHAT STATUTE OR REGULATION PERMITS DEACONESS HEALTH SYSTEM TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.1 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE DEACONESS HEALTH SYSTEM'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF DEACONESS HEALTH SYSTEM? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE DEACONESS HEALTH SYSTEM FOR THE VALUE OF ITS DATA? One of Deaconess Health System's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deciupIication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Deaconess Health System for that value? Isn't this the exact harm the Takings Clause prohibits? 1 See 45 C.F.R. 160.103. By all appearances Berge:ey Researcl Grupo fei4s- a rs tette to hide the fa0 :liar PnRftif, trayr, it to pi court- friendly whitcp.pers This foutnote rvirnic.,, I he dIsclosu,r s:-.aterrreol typittaliv fotiort ror thr,st mato-ibis 7.poirri IVO gi fon: roiLir totidenseti lir spatirir. hese tistiotorf tm Liss are typical for l'irRfrifii, as HRSoft sltrioid tro avanra FCt ari e.);arrip:e BRGs irst of this t:e-calted disclesort, 5tt tile pacre of thiF ritrps.//inedia.: ikbrt orri/erp rorilr uploarisriti7-1/C8 /2613f19.12 /340B Private Egrorty -and -Col poi atr, Inrsstruent-Artivity 2(12er twit 6OO Mary Street, Evansville, IN 47747 812-45O-5OOO deaconess.com April 20, 2026 Page 7 dh Deaconess 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? Deaconess Health System believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility ofmanufacturer rebate models between 2024 and 2026. In 2024, IIRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscorod the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Prograrn and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Deaconess Health System urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Deaconess Health System's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Deaconess Health System's patient population, we serve many other patients, including patients with no coverage at all. Requiring Deaconess Health Systern to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 8 dh Deaconess 10.WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate rnodel to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and adrninistrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11.WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO DEACONESS HEALTH SYSTEM? IF NOT, WHY NOT? As noted above, Deaconess Health System firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on RRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive ta do. Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Deaconess Health System urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12.IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON DEACONESS HEALTH SYSTEM? In 2025, every manufacturer pursuing a rebate rnadel selected Second Sight Solutions' Beacon platforrn as its sole rebate administrator, forcing Covered Entitiesincluding Deaconess Health Systemto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. 6 00 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.corn April 20, 2026 Page 9 IL dh Deaconess The Beacon platform's overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates.'2 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Deaconess Health Systern has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. IfHRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure faimess. lf perrnitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? 1F NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers' noncompliance rate so high, Deaconess Health System is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from IIRSA OPA's website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 10 dh Deaconess 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Deaconess Health System hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a govemment-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Ivledicare Part D inflation rebates," would firther standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Deaconess Health System encourages irnprovements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use ofbatch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSA 's REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Deaconess Health System maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reirnbursement. Recently, the covered entities in the Deaconess Health System that are located in the state of Indiana submitted required 340B pricing transparency information mandated by state law. Of those entities, 938,895 claims were proeessed as 340B eligible for the calendar year 2025. For one of those hospitals, the administrative costs approximately $772,000, which includes dedicated full-- time employees (FTEs), third-party adrninistrator software, legal fees, and other program maintenance items. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). 500 Mary Street, EvansvHle, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 11 -AL dh Deaconess b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based stnicture would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational fiinctions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expimdecl compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose ofthe 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Due to this, Deaconess Health System fully anticipates that additional labor/FTEs will be needed. Other costs that are expected to increase are Iegal fees, consulting fees, software fees, and the potential for increased cyber-attack insurance. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Deaconess Health System to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Deaconess Health System conservatively estimates the addition ofat least 2 to 3 FTEs at the beginning of the rollout that would need to have their roles dedicated just to the rebate model maintenance and operating functions previously mentioned, which would need to be permanent positions. Deaconess Health System does not feel the ability to reallocate current staff hours due to the estimated workload and the number of hours needed dedicated to this piece of a covered entity's 340B program. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant developrnent costs, integration work, and ongoing maintenance. Deaconess Health System feels that security is of extreme importance as evidenced by the Relay HealthlChange Healthcare cyberattack in 2024. This security risks evaluation would not only concern any HIPAA concems but also the bank accounts 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.corn April 20, 2026 Page 12 dh Deaconess that the rebates money is sent to. This, in turn, leads to additional costs for hardware, software, and the potential for additional FTEs in IT. In addition to these direct technology costs, Covered Entities would need to irnplement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. Deaconess Health System will also need to increase insurance coverage for cyberattacics. All added infrastructure mentioned in this section would be permanent costs. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate modeI would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Deaconess Health System purchases drugs at the 340B ceiling price at the tirne of acquisition, allowing us to manage inventory and budgeting with predictable costs. By switching to purchasing all on WAC upfront, Deaconess Health System will lose any cost of goods discounts and contracted compliance purchasing percentages rebates that had been on Group Purchasing Organizations (GPOs) that would not be replaced by the rebate model. By 2028, Deaconess Health System anticipates seeing an increase in upfront WAC spend of 419.8 million, that would floated until rebates are sent back. This translates into requiring an additional $1.68 million to our 90-Day Cash On Hand. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Deaconess Health Systern could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement rnechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Deaconess Health System will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 5OO Mary Street, EvarisvHle, IN 47747 812-45O-5OOO deacoriess.corn April 20, 2026 Page 13 dh Deaconess 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Deaconess Health System would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Deaconess Health System operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take vveeks or months to finalize. These timing differences would make it difficult to provide complete and accurate clairns data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Deaconess Health System and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on itare at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Carrie Morton, PharmD, MBA Vice President, Centers of Excellence & Chief Pharmacy Officer 600 Mary Street, Evansville, IN 47747 812-450-5000 deaconess.com April 20, 2026 Page 14 JP. dh Deaconess APPENDIX: SUMMARY OF HRSA's AUDITS OF DRUG MANUFACTURERS HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 2020 2021 2022 2023 2024 2025 2026 2018 2019 2020 2021 2022 2023 2024 2025 2026 4 1 4 3 2 11=211111 Clean Audits 1 4 Audits with Findings 1 4 2 1 FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 3408 Price Manufacturer Failed to Offer 3408 Price FINDING: 4 1 3 4 1 5 4 5 5 6OO Mary Street, Evansville, IN 47747 812-45O-5OOO deaconess.corn April 20, 2026 Page 15 j dh Deaconess FINDING: OVERCHARGED COVERED ENTITIES 2018 2019 2020 2021 2022 2023 2024 2025 2026 2018 2019 2020 2021 2022 2023 2024 2025 2026 5 Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities PRICING DATA Manufacturer Submitted Pridng Data 3 2 2 4 1 4 1 3 2 2 2 FINDING: FAILED TO SUBMIT 5 3 2 4 2 3 4 I Manuafaurer Failed to Submit Pricing Data 4 4 1 600 Mary Street, Evansville, IN 47747 812-45O-5OOO deaconess.com April 20, 2026 Page 16 IL dh Deaconess FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 2022 2023 2024 2025 5 Manufacturer Determined Ceiling 5 5 3 2 Price for New Drugs Manufacturer Failed to Determine 3408 Ceiling Price for New Drugs 4 1 4 1 3 2 4 1 2026 2 600 Mary Street, Evansville, IN 47747 812-45O-5OOO deaconess.com
HRSA-2026-0001-2055Regional One Health2026-04-20T04:00Z11,599 chars
On behalf of Regional One Health, please see the attached comment letter. Thank you. Regional One Health April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Regional One Health (DSH440152) we appreciate the opportunity to comment on the Department of Health and Human Services' (HHS) Request for Information (RFI) regarding the "340B Rebate Model Pilot Program." Among other issues, the RFI asks whether the Health Resources and Services Administration (HRSA) should implement a rebate model under the 340B Program for certain drugs in place of the longstanding upfront discount model. The answer is unequivocally no. As explained below, any rebate mechanism would impose substantial costs and administrative burdens on Regional One Health that far outweigh any potential benefits. HRSA's own cost estimates for covered entity compliance an estimated 1.5 million hours of labor required to comply with the unimplemented 2025 340B Rebate Model Pilot Program's data submission requirements are significant.' More fundamentally, the premise underlyingthe proposed rebate model appears flawed. HRSA is not required to balance the interests of 340B covered entities and drug manufacturers when selecting a discount mechanism. Rather, the agency must prioritize the needs of covered entities to ensure they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount modelupon which Regional One Health has long reliedis the most effective way to fulfill the statutory purpose of the 340B Program. 1 Notice Agency lnformation Collection Activities: Proposed Collection: Public Comment Request; lnformation Collection Request Title: 3408 Rebate Model Pilot Program Application, !mplementation, and Evaluation, OMB Number 0906-0111-Extension, 90 FR 44197 (Sept. 12, 2025), https://www.federalregister.govirdocuments12025/09, 12i2025-17641/agencv-information-collection-activities- prouosed-collection-public-comment-repuest-information. 877 Jefferson Avenue Memobis TN 38103 LEGAL/1081815v1 regionaloneheatth.org The RFI includes 30 questions and encourages respondents to provide supporting data and analysis. Regional One Health has made every effort to provide detailed responses within the limited timeframe available for comments. For purposes of estimating costs, we assume that any future rebate program would include the 10 drugs previously approved under HRSA's initial pilot, as well as those selected underthe Medicare Drug Price Negotiation Program (MDPNP) for 2027, as referenced in HRSA's February 25, 2026, Information Collection Request. The addition of drugs selected for MDPNP in 2027 significantly increases projected costs. More drugs and manufacturers mean more claims submissions, rebate tracking and reconciliation, increased cash flow burdens, and a higher likelihood of disputesall of which reduce our resources available for patient care and comprehensive services. About Regional One Health Regional One Health is the Mid-South's safety net hospital, caring for some of the most traumatic and challenging cases, while also providing more routine care for thousands of patients every year. We are the Level I trauma center and the only American Burn Association-verified burn center in the tri- state area. We also care for the approximately 3,000 babies that are delivered at Regional One Health each year, 25 percent of whom are considered high risk pregnancies. Regional One Health also operates several primary care clinics throughout our community, including in underserved neighborhoods, to provide convenient and accessible locations for care. We have one of the highest percentages of uninsured patients in the U.S. and when combined with Medicaid recipients, our low-income patient population accounts for nearly 40 percent of those we serve. The challenges of treating vulnerable patients from our rural and urban region reflect this patient population's broad range of health care needs. As the receiving facility for high-risk, complex, and trauma care across the region, Regional One Health exemplifies the type of institution Congress intended to support through the 340B Program. We reinvest the savings generated through the program back into our community, including funding a robust charity care program for patients who cannot afford care. Administrative Costs Under a Potential 340B Rebate Program A rebate model would require Regional One Health to incur substantial new administrative costs that will only grow over time as more drugs are added to the program. When we elected to participate in the 340B Program, we structured our staffing, operations, and compliance systems around the upfront discount model. Transitioningto a rebate mechanism would necessitate significant additional resources beyond what was anticipated. Regional One Health estimates the need for approximately two additional full-time employees (FTEs), at an annual cost of approximately $125,000 (excluding benefits), to manage a rebate model covering the proposed 25 drugs for 2026-2027. This cost would increase as additional drugs are included. 2 These additional staffing needs would divert resources from core 340B compliance activities to tasks such as data submission to the Beacon platform, extracting and formatting data from third-party vendors, reconciling reimbursements, and researching and correcting denied or underpaid claims. Third-party vendors may charge additional fees to support Beacon data submission, and current reports indicate challenges with meeting Beacon's formatting requirements. Medical billing data differs significantly from retail pharmacy formats and must be extracted from multiple systems. This will require significant IT investmentestimated at a one-time cost of $150,000- for report development and validation. Under the Inflation Reduction Act (IRA), Regional One Health has observed a 30-40% error rate in Maximum Fair Price (MFP) reimbursements compared to 340B pricing. This has already resulted in substantial administrative burden related to reconciliation and dispute resolution for just 10 drugs. Expanding to 25 drugs under a rebate model would significantly increase these challenges. Additional anticipated costs include legal expenses, training, consulting fees, and potential reductions in patient care services. Staffing Impacts Regional One Health does not currently have sufficient staff to comply with the requirements stemming from a potential rebate model. We estimate the need for at least two additional FTEs initially, with further increases as the program expands. Staff responsibilities would include: o Preparing and validating data submissions to the Beacon portal; o Reconciling reimbursement payments; and o Researching and disputing denied or inaccurate reimbursements. The estimated five hours of labor cited for data submission significantly understates the true burden, which includes extensive reconciliation and dispute resolution activitiesparticularly given current IRA-related error rates. Systems and Infrastructure Regional One Health's information technology (IT) systems are designed for an upfront discount model. A rebate model would require costly system modifications, including: Medical and retail pharmacy data reside in separate systems, requiring integration and transformation for submission to Beacon. IT costs for report development and validation are estimated at $150,000. 3 Data Collection Requirements Contrary to prior assertions, a rebate model would impose new data reporting burdens. Regional One Health does not currently submit data through 340B ESP due to concerns with its Terms and Use policies related to contract pharmacies. While we submit data to Beacon for IRA compliance, we must also use 340B ESP to dispute denied or incorrect reimbursements. A rebate model would require use of at least three separate platforms, thereby adding to our administrative costs: o 340B ESP; o Beacon MFP portal; and o Beacon 340B rebate portal. Payment Timing and Cash Flow Impacts A rebate model would significantly strain our cash flow by requiring upfront payment at wholesale acquisition cost (WAC) and delayed reimbursement. Based on prior pilot drugs, Regional One Health estimates approximately $4.2 million in WAC- related holding costsan amount that would increase with additional drugs. The proposed 10-day reimbursement timeframe is unrealistic due to reconciliation delays and dispute processes. These delays will strain our cashflows and have an adverse impact on our ability to purchase drugs, while covering other operational expenses. Adverse Impacts The cumulative effect of these burdens would directly impact patient care, including through: Potential hiring freezes or reassignment of clinical staff to administrative roles. Reduction or elimination of patient care services currently supported by 340B savings. Reliance Interests Regional One Health has reasonably relied on the longstanding upfront discount model in structuring its operations, staffing, contractual relationships, and financial planning. A shift to a rebate model would disrupt well-established reliance interests without any demonstrated deficiency in the current system, including: Financial planning and capital investments are based on upfront savings gained through the 340B Program. 4 A rebate model would divert funds from long-term investments and patient services to short- term drug purchasing costs. Concerns with the Beacon IT Platform While assessing our systems in preparation of the 340B Rebate Model Pilot that was later held to be unlawful, Regional One Health identified significant concerns with the Beacon platform including: Terms and conditions disclaim responsibility for data breaches and may be modified unilaterally. Data formatting requirements may change, necessitating ongoing IT adjustments. Customer support is limited, with delayed responses that may not resolve issues. Alternatives to a Rebate Model HRSA has acknowledged alternative approaches to prevent duplicate discounts under the 340B Program and the MDPNP. Given the substantial burdens of a rebate model, these alternatives should be prioritized. We support the American Hospital Association's recommendation to adopt a third-party clearinghouse model, which could achieve program integrity goals with significantly less administrative and financial burden. Need for Further Comment If HRSA proceeds with a rebate model, it must provide covered entities with an opportunity to comment on the specific design and operational details. Critical elements, including drug selection, data requirements, denial criteria, and dispute processes, remain undefined. Failure to solicit further input would prevent meaningful consideration of key issues. We appreciate your consideration of these comments and look forward to continued engagement with HRSA on this critical issue, which has significant implications for the patients and communities served by the 340B Program. Please contact me with any questions. Sincerely, Re d, M.D. President and CEO 5
HRSA-2026-0001-2056Masschusetts Pharmacist Association (MPhA)2026-04-20T04:00Z7,352 chars
Comments submitted by the Massachusetts Pharmacist Association (MPhA) have been uploaded as an attached file here. 54 Broadway Road, PO Box 367 Dracut, MA 01826 Phone (781) 933-1107 Fax (781) 933-1109 www.masspharmacists.org 1 Office of Special Health Initiatives Health Resources and Services Administration (HRSA) Attn: Chantelle Britton, Director, Office of Pharmacy Affairs 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 April 20, 2026 Re: Comments on Potential Implementation of 340B Rebate Model Pilot Program Docket No. HRSA-2026-03042 Submitted by MPhA Dear Director Britton: The Massachusetts Pharmacist Association (MPhA) appreciates the opportunity to provide comments in response to the Request for Information issued by the Health Resources and Services Administration regarding the potential implementation of a 340B rebate model pilot program. MPhA represents pharmacists across diverse practice settings throughout Massachusetts, including community pharmacies, hospital systems, and 340B covered entities. Our members play a critical role in ensuring access to medications and delivering patient-centered care, particularly in underserved and vulnerable communities that rely heavily on the 340B program. At its core, this proposal raises a fundamental question about whether the 340B program can continue to achieve its statutory purpose under a fundamentally altered financial structure. As outlined in prior stakeholder feedback, including comments submitted by aligned pharmacy organizations, the current 340B model is not merely an administrative mechanism, it is the operational foundation that allows covered entities to maintain access, manage costs, and sustain patient care services. 1. Structural Shift from Upfront Discount to Rebate Model For decades, the 340B program has functioned as an upfront discount system. This structure provides immediate price relief, enabling covered entities to stretch scarce resources and reinvest savings into expanded patient services. The proposed rebate model reverses this framework entirely. Instead of receiving discounts at the point of purchase, covered entities would be required to pay full price and seek reimbursement 54 Broadway Road, PO Box 367 Dracut, MA 01826 Phone (781) 933-1107 Fax (781) 933-1109 www.masspharmacists.org 2 afterward. This shift introduces a fundamental change in how financial risk is allocated within the program. From MPhAs perspective, this is not a technical adjustment, it is a structural redesign that alters the balance between manufacturers, providers, and patients. 2. Cash Flow and Financial Viability Concerns The most immediate and consequential impact of a rebate model is on cash flow. Many pharmacies and covered entities, particularly independent and providers serving underserved populations, operate with limited liquidity. Requiring these entities to front the full cost of medications, especially high-cost specialty drugs, creates significant financial exposure. Even short delays in rebate payments could result in: Reduced ability to maintain adequate inventory Constraints on dispensing high-cost therapies Increased reliance on credit or external financing Potential disruptions in patient access For community pharmacies and smaller health systems, these risks are not hypothetical, they directly affect day-to-day operations and patient care decisions. 3. Administrative and Operational Burden Pharmacy systems today are designed for real-time acquisition and dispensing, not retrospective rebate reconciliation. Transitioning to a rebate model would require substantial operational changes, including: Development of new tracking and claims validation systems Ongoing reconciliation processes between manufacturers and covered entities Dispute resolution mechanisms Enhanced audit and compliance infrastructure These requirements would impose significant costs in staffing, technology, and oversight. For many pharmacies, particularly smaller entities, the burden may be disproportionate and unsustainable. Importantly, these are not marginal adjustments. They represent a fundamental redesign of pharmacy operations within the 340B framework. 54 Broadway Road, PO Box 367 Dracut, MA 01826 Phone (781) 933-1107 Fax (781) 933-1109 www.masspharmacists.org 3 4. Risk to Patient Access and Continuity of Care The introduction of timing uncertainty, including potential delays in rebate payments, eligibility disputes, or inconsistent manufacturer participation, creates downstream risks for patients. Pharmacists are often the last point of contact in the care continuum. When financial or operational barriers arise, they directly impact: Medication availability Timeliness of therapy initiation Adherence and continuity of care Any model that introduces uncertainty into drug acquisition risks undermining the programs core mission of expanding access to care for vulnerable populations. 5. Alignment with Statutory Purpose of the 340B Program The 340B program was established to allow covered entities to stretch scarce federal resources as far as possible. Any proposed policy change must be evaluated against this standard. While a rebate model may achieve similar pricing outcomes in theory, it shifts financial and operational risk onto providers in practice. This shift raises a critical question: can the program continue to fulfill its purpose if covered entities bear increased financial burden and operational complexity? MPhA is concerned that the proposed model may weaken, rather than strengthen, the programs ability to support patient access and provider sustainability. 6. Recommendation At this stage, MPhA urges HRSA to proceed with caution and to fully evaluate the real-world implications of this proposal. Specifically, we recommend: Conducting comprehensive impact analyses on cash flow and liquidity for covered entities Quantifying administrative and compliance costs across pharmacy settings Assessing risks to patient access and medication continuity Engaging directly with community pharmacies and safety-net providers 54 Broadway Road, PO Box 367 Dracut, MA 01826 Phone (781) 933-1107 Fax (781) 933-1109 www.masspharmacists.org 4 The record should clearly reflect that a rebate model introduces material financial strain, significant administrative burden, and operational uncertainty. Conclusion MPhA appreciates HRSAs efforts to engage stakeholders and evaluate potential program improvements. However, any changes to the 340B program must preserve its fundamental purpose and ensure that pharmacies and providers can continue to serve patients effectively. We respectfully urge HRSA to carefully consider these concerns before advancing any pilot program. If there are any questions or any information is needed from us, please contact our Director of Government Affairs, Maria Sosa, Esq., via msosa@lantonlaw.com or (216) 860-2756. Respectfully submitted, Massachusetts Pharmacists Association Ryann Abrams, PharmD, President Massachusetts Pharmacist Association Maria Sosa, Esq., Director of Government Affairs Massachusetts Pharmacist Association
HRSA-2026-0001-2057The OSU Wexner Medical Center2026-04-20T04:00Z38,853 chars
Attached is the comment letter from The Ohio State University Wexner Medical Center April 14, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: The Ohio State University (3OSU ) appreciates the opportunity to submit these comments on behalf of its University Hospital (3OSUH, 340B program ID DSH360085) regarding HRSA OPAs Request for Information (3RFI ) regarding a potential 340B rebate model. This letter responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. OSUH is contained within The Ohio State University Wexner Medical Center (3OSUWMC ), which is a public, academic health center that provides care to a high volume of Medicare and Medicaid patients. In 2024, around 71% of the patients served in our University Hospitals were covered by government programs or self-pay, including Medicare (34.6%) and Medicaid only (26.8%). Our service area is the entire state of Ohio, with more than 50% of our inpatient admissions being patients from Columbus and Franklin County, 16% coming from adjacent counties and 32% coming from other counties in Ohio outside of central Ohio. As a 340B- participating hospital, OSUH is uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. OSU participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, OSUHs 340B Program participation enables us to commit an additional $239 million dollars per year to patient care services. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by HRSA OPA would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (3MFP ) duplication require a solution, OSUH wishes to make April 14, 2026 Page 2 clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit 3comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of 3consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process, 1 OSUH submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH OSUHS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (3MDPNP ) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Price2not both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturer2where Congress placed it2to OSUH and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). April 14, 2026 Page 3 fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to OSUH when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR OSUH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected OSUH. For example: Regarding contract pharmacies generally: Manufacturers have significantly limited our ability to serve patients through our contract pharmacies, undermining an important source of revenue that supports our nonprofit mission. Our contract-pharmacy-related savings have decreased by over 50% in the last 5 years, limiting the extent to which we can support our community. We have also been specifically affected by certain manufacturer policies, such as Exelixis restrictive policy that does not allow OSUH to purchase its products at OSUs wholly owned pharmacies. Regarding data disclosures: Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor, 340B ESP, and give them the right to monetize that data in order to maintain access to their drugs. OSUH invests significant personnel resources to retrieve, format and validate this data to maintain 340B pricing. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, to address the burden placed on Covered Entities to produce this data. Regarding anticipated rebate denials: We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our OSUH wholly owned pharmacy, manufacturers such as Boeringer Ingelheim have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the Wholesale Acquisition Cost (3WAC ) price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, the manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 14, 2026 Page 4 efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an 3Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Regarding entity-owned pharmacy 3float : Finally, a 3float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the 3float, requiring it not just for Part D beneficiaries, but all of OSUHs purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or OSUH trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO OSUH TO MONITOR MANUFACTURER COMPLIANCE? 3Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function2 eligibility decisions2from Covered Entities to manufacturers. OSUH would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 14, 2026 Page 5 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority under the 340B statute9. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? OSUH has seen manufacturers continually pressure the 340B Program through lobbying and litigation. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR process2which has resulted in only six public decisions since 2021, all of which have favored manufacturers2 would be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant serious2and publicly documented2consideration. 6. WHAT STATUTE OR REGULATION PERMITS OSUH TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of 3HIPAA Covered Entity, but this activity may bring them under the definition of a 3health plan 9 42 U.S.C. 256b(a)(1). April 14, 2026 Page 6 under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the 3HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE OSUHS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF OSUH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE OSUH FOR THE VALUE OF ITS DATA? One of OSUHs principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program. Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate OSUH for that value? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? OSUH believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. 10 See 45 C.F.R. 160.103. April 14, 2026 Page 7 Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. OSUH urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From OSUH perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of OSUH patient population, we serve many other patients, including patients with no coverage at all. Requiring OSUH to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO OSUH? IF NOT, WHY NOT? As noted above, OSUH firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and April 14, 2026 Page 8 commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPA2an agency already stretched thin2to address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. OSUH urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON OSUH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entities2including OSUH2to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs 3payment exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustment2not payment for patient care2the scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms, which could facially violate state law governing certain covered entities, including OSUH, unless HRSA intervenes to ensure fairness. If permitted without material protections, we 11 See 45 C.F.R. 164.501. April 14, 2026 Page 9 ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers noncompliance rate so high, OSUH is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? OSUH hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submission2such as 340B modifiers and other claim details2without shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. OSUH encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 14, 2026 Page 10 our operational experience2including use of batch flat-file submissions2and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. OSUH maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. OSUHs total costs for IT platforms, services, and personnel is $3,280,000 annually. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these existing operational workflows and increase costs. Instead of relying on established workflows, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functionality that would have to be established as a Covered Entity. These net new activities would require expanded compliance oversight, significant administrative time, and financial burdens for safety-net providers. OSUH anticipates administrative costs of approximately $158,000 annually on a recurring basis. This cost is calculated through allocation of 0.2 FTE labor resource dedication from compliance, revenue cycle, IT, legal and leadership personnel (1.0 FTE total). These increased costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. To offset these costs, HRSA could consider developing a fee structure manufacturers would pay to participate in the rebate program. That fee should be assessed at the claim level for each claim a Covered Entity submits for rebate payment. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require OSUH to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, performing self-audits, managing third party administrator software, monitoring contract pharmacy activity, and preparing for potential audits. April 14, 2026 Page 11 A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. OSUH anticipates a staffing increase of 3.5 full-time employees (FTEs) to adequately meet the requirements of a rebate-based model. This staff would be split into 3 FTEs supporting compliance/reporting and 0.5 FTE supporting information technology (IT) totaling $364,000 in annual salaries and benefits. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. OSUH would need to source and implement a new third party reconciliation platform to match purchase, claims and rebate payment. This platform is necessary to maintain adequate financial controls and ensure compliance with Generally Accepted Accounting Principles. Preliminary cost estimates from vendors is approximately $20,000 in one-time costs and $200,000 annually in recurring costs. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. OSUH anticipates 0.2 FTE of IT labor resources totaling $30,000 annually in recurring cost. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, OSUH purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Should a rebate model proceed, OSUH anticipates an annual cash flow outlay of $30,118,461. This figure is calculated by comparing the 340B cost of the 10 IRA/MDPNP drugs that became eligible for MFP rebates January 1, 2026 to the cost of purchasing these drugs at WAC. OSUH has 2 days payment terms with its primary wholesale drug distributor, which is applicable to both 340B and non-340B drugs. As such, payment is made for all drug purchases two days after the drug is invoiced. A rebate model that requires payment 10 days after data submission imposes an 8 day delay relative OSUHs pay terms and financial recovery of a rebate. Note that April 14, 2026 Page 12 the 10 day rebate payment begins after data submission, which would occur approximately 14 calendar days after the drug is invoiced. This creates a functional cash flow risk of 24 days (14 days to data submission + 10 days to rebate payment), nearly an entire months worth of drug expense. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. 3. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. As mentioned previously, OSUH has already experienced improper rebate denials by Boeringer Ingelheim under the MDPNP since January 1, 2026, which has added unnecessary administrative costs needed to resolve these improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, OSUH will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 4. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, OSUH would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in OSUHs operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on OSUH and the communities we serve. A rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication. Claims level modifiers and batch flat- file data submission have been used successfully across different state Medicaid programs to achieve the same deduplication goal. OSUH anticipates total annual recurring costs of $722,000 and adverse cash flow impacts of $30,118,461. These are significant financial investments April 14, 2026 Page 13 diverted away from patient care, simply to recover statutorily-required discounts from drug manufacturers that should be provided at the time of purchase. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety net2and the lives who rely on it2are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Trisha A. Jordan, PharmD, MS Chief Pharmacy Officer The Ohio State University Wexner Medical Center Assistant Dean, Medical Center Affairs OSU College of Pharmacy Room 368 Doan Hall 410 W. 10th Avenue Columbus, OH 43210 614-293-9097 trisha.jordan@osumc.edu April 14, 2026 Page 14 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 14, 2026 Page 15 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 14, 2026 Page 16 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2058Cook County Health2026-04-20T04:00Z7,847 chars
Please see attached for comments from Cook County Health. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Cook County Health appreciates the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. As one of the largest public hospital systems in the nation, Cook County Health has served the residents of Cook County for nearly two centuries and has a proud legacy of advancing health care. The 340B program is a vital lifeline for public and safety-net health care systems like Cook County Health, given that the majority of Cook County Health patients are covered by Medicaid, uninsured, or underinsured. The savings Cook County Health realizes from participation in the 340B drug discount program allows us to invest in our system to provide prescription drugs to those who are unable to afford or access life-saving medications elsewhere. Changes to the 340B program that reduce program benefits and cut 340B savings, as a rebate model would, disproportionately impacts Cook County Health and our patients. We urge HRSA to NOT move forward with a rebate model or related pilot program and to consider the negative impacts of rebate models, specifically, the financial and operational burdens these models impose on public and safety-net health systems like Cook County Health. The Financial and Operational Costs of Rebate Models Are Unsustainable As a public, safety-net health system, Cook County Health would be significantly impacted by massive disruptions to our finances that a 340B rebate model would impose, through increased administrative costs and cash flow challenges. Based on the pharmaceuticals initially identified in the 340B Pilot Program, we estimate that implementing the rebate model for those specific NDCs would cost Cook County Health approximately $30 million. Costs are expected to increase as additional pharmaceuticals are incorporated into the rebate program. Docusign Envelope ID: 74C7E444-0879-8DE6-8294-73E4A2CDDD42 Administrative Burden from Rebate Model Implementation New 340B requirements from manufacturers add substantial administrative costs to the program that divert funding from patient care. We anticipate that a limited rebate pilot, including just the products selected for the Medicare Drug Price Negotiation Selected Drug list, and claims fields included in the initial pilot will necessitate 2 additional FTEs to manage claims level tracking and submission as well as reconciliation and dispute management. Managing different manufacturer requirements will create significant administrative and operational complexity beyond the current 340B system. Loss of discounts By requiring covered entities to purchase drugs at wholesale acquisition costs instead of receiving up-front discounts, rebate models appear to eliminate the possibility for covered entities to access 340B subceiling discounts. Cook County Health would lose upfront savings, thereby increasing hospital costs and undermining patient access to care. In addition, hospitals that receive discounts from wholesalers for prompt payments will be challenged to maintain these discounts when charged for wholesale priced purchases, while waiting for the rebates. This will significantly reduce cash flow. Alternatively, early payment discounts could be forgone to preserve cash flow, but that prospect could cost our organization an estimated additional $1-2 million annually (based on the initial 10 IRA drugs). Costs of floating funding to pharmaceutical companies By fundamentally changing the nature of the 340B rebate program from a point-of-sale discount to a post-purchase reimbursement system, rebate models would require hospitals to float substantial sums of money to manufacturers, which would generate cash flow challenges. This policy allows manufacturers to generate interest from money owed to safety net providers, rather than allowing those monies to be invested by our health system in patient care services. Potential costs of inappropriately denied or significantly delayed rebates There is also an assumption that some percentage of claims will be inappropriately denied; fighting and resolving these denials will involve significant capacity. Using a conservative estimate that 10% of Cook County Health claims will be denied, this would result in an estimated $3 million in increased costs for our system, solely based on the proposed 10 drugs for the former pilot. HRSA has previously acknowledged the likely challenge of delayed or denied rebates but has failed to propose efficient and enforceable methods to address these issues. HRSAs previously issued FAQ indicate that, in the event of a dispute, covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue, and only once the Docusign Envelope ID: 74C7E444-0879-8DE6-8294-73E4A2CDDD42 parties have failed to find a consensus should the covered entity contact a generic HRSA email. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment when manufacturers are responsible for these failures. Potential costs of unauthorized manufacturer requirements Based on Cook County Healths experience with the pre-implementation of HRSAs rebate pilot, we are concerned that manufacturers will change requirements and impose additional burdens that will add to administrative costs and compromise our ability to receive the 340B savings the statute requires. For example, changes to Beacon guidance during prior implementation planning materially affected our operational assumptions, raising concerns about the lack of transparent oversight. Manufacturers and the Beacon platform updated the Beacon FAQ page without any public notice. We saw the Beacon platform amend responses on its FAQ page without any notice or clarification. Reliance on an FAQ page, particularly one hosted by a private party rather than a federal agency, is an inappropriate and unreliable means of communicating changes to a statutorily authorized program. Any changes to the 340B rebate pilot must be made and authorized by HRSA, not by manufacturers with an interest in limiting the number of 340B discounts. We are particularly concerned by the double standards the Beacon platform proposes with regard to information technology security. Covered entities are expected to agree to Beacons data requirements; however, Beacon refused to complete a simple security questionnaire to ensure compliance with onboarded data. Covered entities were notified that, The Beacon team is currently not completing security questionnaires. I can direct you to our security support page for the available details, with a link to Beacons public page on protocols.1 In conclusion, the 340B program allows Cook County Health to sustain essential services and expand access to care. Policies that delay or reduce access to 340B savings will directly affect patient care in our community. We deeply appreciate the opportunity to comment on this RFI and encourage HRSA to weigh the tremendous negative impact to the program and wholly reject the concept of a rebate model for the 340B Drug Pricing Program. Sincerely, Erik Mikaitis, MD, MPH Chief Executive Officer Docusign Envelope ID: 74C7E444-0879-8DE6-8294-73E4A2CDDD42
HRSA-2026-0001-2059The HELP Center for LGBTQ+ Health2026-04-20T04:00Z11,697 chars
See attached. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information on 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: I appreciate the opportunity to comment on this Request for Information. The HELP Center is a two-clinic 340B STD 340B grantee with physical locations in Fort Worth and Arlington, Texas. We also serve patients statewide via our telehealth program. We are proud of the work we provide in our community. The 340B savings from the program allow our clinics to offer all our healthcare services to our patients, regardless of their ability to pay or not. HELP has also opened new lines of care in recent years thanks exclusively to our 340B savings derived from the program. In this context, we believe we are the embodiment of Congress intent for the 340B program to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. It is because we have witnessed the transformative nature of the 340B program in expanding and improving healthcare in the communities in which we work that we strongly oppose the proposed 340B Rebate Pilot Program. Our response is directly related to the current proposal, but also predicts some future negative impacts if the pilot model is deemed successful and is expanded across the entire 34B program. We will attempt to outline some of our principal objections to the proposed pilot program below, wherever possible following HRSAs requested information construct: I. Payment Timing and Projected Cash Flow Impact A primary challenge of a rebate model is the financial burden placed on covered entities. Under the current system, entities benefit from immediate discounts, enabling them to reinvest savings into patient services. A rebate model would require upfront payment at wholesale acquisition cost (WAC) or similar pricing, followed by delayed reimbursement. This shift fundamentally converts the 340B benefit from a point-of-sale price reduction into a working capital requirement. Even with a relatively short rebate timeline, covered entities must still finance the spread between WAC and the 340B ceiling price across their full purchasing volume. Illustrative Example (Single Drug Purchase): WAC price per unit: $1,000 340B ceiling price: $650 Monthly volume: 1,000 units Current model: Upfront spend: $650,000 Immediate savings realized: $350,000 Rebate model (assuming 10-day rebate lag + ~5-day billing delay): Upfront spend: $1,000,000 Rebate received later: $350,000 Working capital required: $350,000 for ~15 days total (10-day rebate lag + ~5-day billing delay) Even with an effective ~15-day lag (10-day rebate + ~5-day billing delay), the entity must still carry $350,000 in additional cash exposure. Multiplied across dozens of high-cost drugs, this creates a continuous and material working capital burden. Manufacturer Float Advantage (Implicit Interest-Free Financing) An often-overlooked consequence of the rebate model is that it effectively provides pharmaceutical manufacturers with interest-free use of covered entities capital during the rebate lag period. Under the current upfront discount model, manufacturers receive the reduced 340B price immediately. Under a rebate model, however, manufacturers receive payment at full WAC and retain the discount portion (the rebate amount) until it is returned to the covered entity. Example: Covered entity pays $1,000 (WAC) True 340B price: $650 Manufacturer holds $350 for ~15 days Across large purchasing volumes, this creates a significant aggregate float benefit for manufacturers, with no corresponding compensation to covered entities. From a financial perspective, this is equivalent to covered entities extending short-term, interest-free loans to manufacturerswhile those same entities may need to borrow funds and pay interest to finance the exact same float. Comparison to Current Contract Pharmacy Model Under the current 340B model, particularly in contract pharmacy arrangements, covered entities already experience modest timing differences between dispense and reconciliation. However, these occur at 340B-discounted pricing, not at full WAC exposure. Current contract pharmacy environment: Typical lag: ~5 days from expense to reimbursement Pricing basis: 340B discounted rates Financial exposure: limited, as entities are not fronting WAC-level costs Proposed rebate model: Nominal rebate lag: 10 days Additional billing/submission delay: ~5 days Effective lag: ~15 days (or longer in practice) Pricing basis: full WAC upfront This distinction is critical. While both models involve some timing delay, the proposed rebate model float is triple that of the existing up-front model. The financial magnitude of the exposure is fundamentally different: Current model: short lag on already-discounted prices Rebate model: longer lag on significantly higher WAC prices As a result, even a modest increase in lag time translates into disproportionately larger working capital requirements under a rebate system. Extended Effective Float for Smaller Providers In practice, the effective float period may exceed the nominal 15-day rebate timeline due to billing and operational constraints. Many smaller providers, including FQHCs and rural hospitals: Do not bill continuously on a daily basis Operate on semi-monthly or periodic billing cycles As a result, the timeline from drug purchase to rebate submissionand ultimately reimbursementcan extend well beyond 15 days. Example Scenario: Drug purchased on Day 1 Claim not submitted until semi-monthly billing cycle (Day 1015) 15-day rebate processing period begins after submission Total effective float: up to ~2530 days This extended float further increases: Working capital requirements Borrowing needs Interest costs For smaller entities, this operational reality materially worsens the financial burden of a rebate model and amplifies inequities between large and small providers. Summary of Payment Timing and Potential Cash Flow Impact Even with a nominal 10-day rebate lag (and ~15-day effective lag including billing delays), the model shifts the programs economics from price reduction to credit-dependent reimbursement, introducing: Ongoing working capital requirements New borrowing and interest costs Manufacturers benefit from interest-free float Extended effective float periods due to billing cycles Exposure to timing variability and financial risk These dynamics reduce the net value of the program and directly divert resources away from patient care. To demonstrate the scale of this resource diversion, for our agency, the additional capital carrying cost required for a single medication prescribed to 1,200 patients would be approximately $4.5 million. For context, this represents roughly 4.5 months of our agencys entire staffing costs. II. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Implementing a rebate system would significantly increase administrative overhead for all stakeholders. Covered entities like HELP would need to: Track eligible prescriptions Submit rebate claims Reconcile payments across multiple manufacturers HRSA would also need to establish new infrastructure for oversight, auditing, and dispute resolution. The lack of standardized processes across manufacturers could further complicate implementation. III. Data Collection by Covered Entities A rebate model depends heavily on accurate, timely data exchange between covered entities, pharmacies, manufacturers, and potentially third-party administrators. Challenges include: Inconsistent data standards across stakeholders Limited interoperability between electronic health records (EHRs) and pharmacy systems Risk of errors leading to delayed or denied rebates Without robust data systems, the model could introduce inefficiencies and increase compliance risk. IV. Rebate Denials The Pilot Rebate Model is akin to automatic denials of claims unless proven otherwise. Unlike upfront discounts, rebates are contingent on successful claim adjudication. Covered entities face risks such as: Denied claims due to technical errors Delays in payment processing Disputes over eligibility or documentation These risks could erode trust in the system and create financial uncertainty. Manufacturer Compliance and Incentives While manufacturers advocate for rebate models to enhance oversight, compliance is not guaranteed. Manufacturers may: Delay rebate payments Apply restrictive eligibility criteria Introduce proprietary systems that fragment the process HRSA would need to enforce consistent standards across manufacturers, which could prove difficult without additional statutory authority. V. Additional Concerns Legal and Statutory Constraints Quite honestly, HRSAs authority to mandate or approve such a model could be challenged on the grounds that it effectively alters the pricing mechanism defined by law. Legal ambiguity may expose the agency to litigation and delay implementation. The 340B statute specifies that manufacturers offer each covered entity 340B covered drugs for purchase at or below the applicable ceiling price. A rebate modelwhere entities initially pay full pricemay conflict with the statutory framework. Impact on Patient Access and Care Delivery If covered entities experience reduced cash flow, increased cash reserve requirements or increased administrative burden, patient services may be affected. Potential consequences include: Reduced availability of medications Entities not being able to prescribe the most effective treatment due to cost of medication and delayed reimbursements. Cuts to support programs funded by 340B savings Delays in care delivery The rebate model may unintentionally shift resources away from patient care toward administrative functions. Oversight and Enforcement Burden on HRSA HRSA currently operates the 340B program with limited resources and statutory authority. A rebate model would require: Expanded auditing capabilities Real-time data monitoring systems Dispute resolution mechanisms Without significant investment and potentially new legislative authority, HRSA may struggle to effectively oversee the model. Equity Concerns The rebate model may disproportionately affect smaller and resource-limited providers. Larger health systems may have the infrastructure and capital to adapt, while smaller entities may not. This could lead to: Consolidation in the healthcare market Reduced access in rural or underserved areas 7 Difficulty for at-risk patients to access the best treatment options available, thereby creating a two-tiered system of care. Widening disparities in care Transition Risks Even as a pilot, transitioning to a rebate model carries operational risks: Disruption to existing workflows . Training requirements for staff Potential errors during system changeover For these reasons and others, I urge HRSA to reject the implementation of this rebate pilot program. This proposal represents a fundamentally flawed approachone that appears to prioritize manufacturers' financial interests at the expense of the most vulnerable patients in need of care. Rather than advancing equitable access, it risks undermining it. Respectfully, Deaty T2 DeeJay R. Johannessen, CEO The HELP Center for LGBTQ+ Health
HRSA-2026-0001-2060National Minority Quality Forum2026-04-20T04:00Z4,777 chars
See attached file(s) Page 1 ELECTRONIC SUBMISSION April 20, 2026 Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Subject: HHS Docket No. HRSA-2026-03042: NMQF Public Comment Regarding the Request for Information on the 340B Rebate Model Pilot Program Dear Director Britton: The National Minority Quality Forum (NMQF) is a 501(c)(3) not-for-profit research and advocacy organization dedicated to reducing patient risk and eliminating healthcare disparities for underserved communities. We are pleased to submit this comment in response to the Health Resources and Services Administration's (HRSA) Request for Information regarding a potential rebate model for the 340B Drug Pricing Program, and we commend HRSA for its persistence in advancing this promising reform. NMQF has worked for over 25 years to promote policies that reduce systemic barriers to accessible, quality health care for marginalized populations and communities. As we stated in our previous submission to HRSA on September 8, 2025, NMQF believes a rebate model is an important step toward ensuring the 340B Program reaches its full potential to promote better health outcomes for patients and underserved communities. Congress established the 340B Program to strengthen the healthcare safety net by enabling health care facilities that treat low-income and uninsured patient populations to purchase outpatient drugs at reduced prices. Regrettably, the drug discounts available to covered entities often do not translate into direct, tangible benefits to the patients whose compromised health status informed the awareness of need. Since its inception in 1992, the 340B program has experienced significant growth. As noted in the April 2025 majority staff report on 340B, the number of covered entities participating in the 340B program has expanded by 600% since 2000, reaching more than 60,000 as of early 2025. In 2024, 340B covered entities collectively paid approximately $81.4 billion for outpatient drugs whose wholesale acquisition costs would have totaled an estimated $147.8 billion. However, the 340B statute does not specify how covered entities must allocate this revenue or even require them to use it in ways that directly benefit vulnerable patients. NMQF suggests that a rebate model would help HRSA better monitor whether the savings that covered entities receive are being passed on to patients. April 20, 2026 Subject: HHS Docket No. HRSA-2026-03042: NMQF Public Comment Regarding the Request for Information on the 340B Rebate Model Pilot Program Page 2 To maximize the impact and accuracy of any new pilot, HRSA should ensure that the model includes a narrow list of drugs selected for the Medicare Drug Price Negotiation Program in Initial Price Applicability Years (IPAY) 2026 and 2027 to start. These medicines are some of the most commonly prescribed drugs in the country. Including them in the pilot would enable HRSA to collect the most meaningful data on how a rebate system can improve transparency and lower costs for patients. Based on the outcomes of the pilot program, expanding the rebate model to include more drugs would be ideal. For similar reasons, we encourage HRSA to implement any pilot uniformly across all types of covered entities. Although hospitals account for the vast majority of 340B purchases, many other types of entities also participate in the program. If the goal is to evaluate how shifting to after- the-fact rebates, rather than up-front discounts, changes covered entities' purchasing and prescribing behavior, it makes no sense to exempt certain types of covered entities from the pilot. Such exemptions would limit the data available to HRSA to refine and implement long-lasting reforms. Finally, HRSA should provide technical assistance to covered entities, as well as manufacturers and patient communities involved in the pilot. HRSA should also consider steps to promote transparency and continued stakeholder input throughout the pilot process. These steps would ensure that the transition to a rebate model improves not only patient health but also trust in providers and in the 340B program. In closing, NMQF remains committed to a 340B program that serves to reduce healthcare inequities. A comprehensive 340B rebate model will contribute to the achievement of that objective. Please direct questions about this comment to Gretchen C. Wartman, NMQF Vice President for Policy and Program (gwartman@nmqf.org). Sincerely, Gary A. Puckrein, PhD President and Chief Executive Officer National Minority Quality Forum
HRSA-2026-0001-2061Association for Utah Community Health2026-04-20T04:00Z21,397 chars
Attached please find comments from the Association for Utah Community Health outlining our concerns about this proposed program. Thank you. 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org MEMBERS Carbon Medical Service Association, Inc. Community Health Centers, Inc. Creek Valley Health Clinic Enterprise Valley Medical Clinic Family Healthcare FourPoints Health Green River Medical Center Health West Midtown Community Health Center Mountainlands Family Health Center Utah Navajo Health System, Inc. Utah Partners for Health Wasatch Homeless Health Care, Inc. Wayne Community Health Centers, Inc. AFFILIATE MEMBERS First Step House Odyssey House Sacred Circle Healthcare Urban Indian Center of Salt Lake Utah AIDS Foundation April 15, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Submitted via regulations.gov Dear Director Britton: The Association for Utah Community Health (AUCH), Utahs Primary Care Association (PCA), thanks you for the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by Utahs 12 Community Health Centers (CHCs). The Association for Utah Community Health (AUCH) has been recognized as Utahs PCA since 1985 and Utahs Health Center Controlled Network (HCCN) since 2019. AUCH provides over 12,000 hours of training and technical assistance annually to Utahs Section 330 Health Center grantees (CHCs) and AUCHs affiliate members. AUCH helps reduce barriers to healthcare through health promotion, community engagement and development, education, and policy analysis. Utahs CHC organizations provide primary, dental, behavioral health, and pharmacy services to over 143,000 patients annually. This letter outlines our concerns. In short, AUCH strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, AUCH will explain: A. The importance of 340B savings to Utahs CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating multiple harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured1. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law2 and regulation3, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Utah, CHCs routinely rely on 340B savings to support services including, but not limited to, dental care (a very costly service that few CHC patients have insurance for), enhanced pharmacy medication management services, and unreimbursed care coordination and case management services. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. 1 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 2 Section 330(e)(5)(D) of the Public Health Service Act. 3 45 Code of Federal Register 75.307 Program Income 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org B. A rebate model will create massive cash flow, administrative, and other costs for CHCs. Unsustainable cash flow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Utahs CHCs will provide details on these financing needs. Most of Utahs CHCs are small and operate on very thin financial margins. They will have trouble accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs, including the cost of hiring additional staff to manage the rebate model. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains), and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest all of their 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services currently underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies, including Walgreens and Walmart, publicly announced that they would also carve out rebate drugs from 340B starting in the new year. Several of Utahs FQHCs rely on contract pharmacies because they are spread out over large geographical areas and would be very vulnerable to these forced carve- outs. 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result of these changes, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. In recent years, Utahs CHCs have faced multiple challenges with their 340B programs. For example: o Contract pharmacy restrictions have significantly impacted Utahs CHCs. One of Utahs larger CHCs had patients living over 75 miles away from the one contract pharmacy location generously permitted by pharmaceutical manufacturers. A CHC with an in-house pharmacy at their largest location had patients seen in a smaller, remote clinic who lived over 150 miles away from the in-house pharmacy location. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that several of Utahs CHCs have already had to lay off staff and greatly reduce dental services. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted for the following reasons: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs already subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: CHCs are by far the most reliant on contract pharmacies of all 340B CEs. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the increased cashflow demands and costs created by a rebate model. 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to build the following protections into their plans: 1. For each rebate drug, include a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved of last autumn fell far short of this commitment, as they failed to account for most of the administrative rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, including the administrative costs, and Provide reimbursement promptly and transparently. (We recommend that costs be billed and reimbursement provided monthly.) To assist HRSA in establishing this system, the comments submitted by Utahs CHCs will include costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing a system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price for all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to CEs. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication information at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on CEs. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication4 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of millions of low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. 4 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 5217 South State Street, Suite 201 Murray, UT 84107 801.716.4600 www.auch.org Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Rachel Craig at rcraig@auch.org with any questions. Sincerely, Alan Pruhs, Executive Director
HRSA-2026-0001-2062Sadler Health Center2026-04-20T04:00Z44,944 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Sadler Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Sadler Health Center anticipates a loss of $800,551 from entity-owned pharmacy operations and 155% loss for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Sadler Health Centers mission is to advance the health of our community by providing inclusive, high-quality and compassionate care. As a federally qualified health center, Sadler offers comprehensive and affordable services to all patients including those who are uninsured or underinsured through a patient-centered medical home model. Across its Cumberland County locations in Carlisle and Mechanicsburg, PA, Sadler provides a broad range of services including medical, dental, vision, behavioral health, addiction recovery, pharmacy, express care, lab testing, nutrition, insurance enrollment and community 2 resource connections. The organization also offers dental services in Perry County at its Loysville, PA location. Together, Sadler served nearly 14,000 patients last year. 1. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Sadler Health Center in particular, this means it will impact: 13,973 patients will be impacted $235,480 in current admin costs for the 340B program The savings produced by the 340B Program mainly helps patients with hardships in our sliding fee capacity, Dental, and Mental Health Services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Sadler Health Center provided $370,358.48 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Sadler Health Center anticipates needing 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, Sadler Health Center anticipates an increase of $80,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Sadler Health Center has estimated the need for an additional 1.25 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Sadler Health Center estimates its impact for this rebate model to be $1 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Sadler Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $60,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Total Cost: For our CHC, which serves 13,973 patients, the total projected increase in expenses Including labor, IT, and carrying costsis estimated at $1 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Sadler Health Center has 2 entity-owned pharmacies, that use 2 different PMSs. This will not only impact on the amount of time taken to compile date but also to format it so they can be compared on an organization-wide scale. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Sadler Health Center estimates its one time integration cost at $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 53 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 53 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Pennsylvania with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 8 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Sadler Health Center offers patients a sliding fee for medications and services. This allows patients to maintain their health even if they are experiencing hardship. Without this assistance, the community burden would be tremendous. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $747,691 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $113,576 to purchase these same drugs at the 340B ceiling price. This represents a 558% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Sadler Health Center anticipates needing to reduce: 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as trips for our medical team to give vaccinations through different school districts, dietician services and care coordination for complex diabetic and hypertensive patients. Operating Hours: We anticipate needing to reduce our clinic hours by 2 hours per week, specifically impacting our evening hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant], directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1677 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Sadler Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Sadler Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $243,688.79. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 11 Sadler Health Centers Data: Sadler Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 62,307. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $150,000 annuallyfunds that are currently dedicated to care coordination for complex diabetic and hypertensive patients and our Opioid Use Disorder program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Sadler Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Sadler Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $112,153. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 13 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Sadler Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. 14 Sadler Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Sadler Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Samantha Imbraguglio Edenfield at sedenfield@sadlerhealth.org. Sincerely, Manal El Harrak Sadler Health Center
HRSA-2026-0001-2063Presbyterian Healthcare Services Socorro General Hospital2026-04-20T04:00Z4,763 chars
See attached file(s) &PRESBYTERIAN Healthcare Services www.phs.org Re: Request for Information 340B Rebate Model Pilot Prograrn HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Adrninistration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Dear Administrator Engels: On behalf of Socorro General Hospital, a Critical Access Hospital (CAH) and often the sole provider of hospital services in our region, we appreciate the opportunity to comment on HRSA's Request for Information regarding a potential 340B Rebate Model Pilot Program. We strongly urge HRSA not to move forward with a rebate model, as such a change would jeopardize the financial viability of rural hospitals and limit access to care in already underserved communities. For Critical Access Hospitals, the 340B program is a practical and essential tool that helps offset persistent challenges, including low patient volumes, geographic isolation, workforce shortages, and limited access to capital. The program's upfront discount structure allows us to remain operational, stock essential medications, and maintain core services such as ernergency care, infusion therapy, and chronic disease management. In New Mexico, the importance of the 3406 program is particularly pronounced due to the state's exceptionally high Medicaid enrollment and large proportion of low-income, rural, and medically underserved residents. Many Critical Access Hospitals in New Mexico serve patient populations in which Medicaid comprises a significant share of the overall payer mix, resulting in chronically low reimbursement levels that fail to cover the true cost of care. The 340B program allows CAHs to bridge this gap by reinvesting limited drug savings into expanded care access, including emergency services, primary care, behavioral health services, chronic disease management, transportation assistance, and medication access for vulnerable patients. Without the stability provided by upfront 340B pricing, CAHs across New Mexico would face reduced capacity to meet community needs, exacerbating health disparities in a state already challenged by provider shortages, geographic barriers, and persistently poor health outcomes. A rebate model would create immediate and unsustainable cash-flow risk for CAHs. Requiring upfront payment at full drug prices-followed by delayed reimbursementwould force small rural hospitals to float costs they simply cannot absorb. Unlike larger systems, CAHs operate with minimal reserves. Even short PRESBYTERIAN Healthcare Services www.phs.org delays in rebate payment could impair our ability to purchase drugs, meet payroll, or comply with financial covenants. Administrative burden is another critical concern. A rebate model would require new IT systems, data reporting processes, staff training, and ongoing claims reconciliation. CAHs typically rely on very small administrative and clinical teams, where staff already perform multiple roles. Diverting limited personnel from patient care to manage rebate administration would worsen workforce strain and reduce access to services. Data privacy risks are also magnified in rural settings. Small patient populations make it easier to identify individuals from data shared outside the hospital. Covered entities remain fully accountable under HIPAA, while manufacturers and their vendors are not held to the same standards, exposing CAHs to compliance risks we are ill-equipped to manage. Our hospital has reasonably relied on HRSA's consistent, decades-long use of upfront 340B pricing to remain financially stable and to continue serving our community. Introducing a rebate modelparticularly as a "pilot" - would introduce uncertainty that undermines planning and threatens essential services. In rural communities, reductions in hospital services do not result in inconvenience; they result in patients traveling long distances or foregoing care altogether. If HRSA believes changes are necessary to address concerns such as duplicate discounts, we urge the agency to consider alternatives that do not place rural hospitals at risk. A neutral, HRSA-sanctioned claims clearinghouse would address manufacturer concerns while preserving the upfront pricing structure that CAHs depend on. For Critical Access Hospitals, the stakes of this policy decision are existential. We respectfully urge HRSA to preserve the upfront discount structure of the 340B program and abandon the rebate model concept to ensure continued access to care in rural America. Sincerely, Erica Downing VP, Chief Pharmacy Officer Socorro General Hospital Socorro, New Mexico
HRSA-2026-0001-2064UMass Memorial Medical Center2026-04-20T04:00Z18,145 chars
Thank you for the opportunity to comment on this important issue. Please find UMass Memorial Medical Center's response to the RFI attached herewith. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: UMass Memorial Medical Center, a participating 340B covered entity (CE), appreciates the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the potential use of backend rebates to replace upfront 340B discounts. We understand HRSA is considering a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any transition to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed the 340B program for more than three decades. We have built our program operations, financial planning, and patient care services around the long-standing and reliable framework of upfront discounts. For over 30 years, 340B has functioned effectively without reliance on post-sale rebates, and the recent consideration of such a fundamental shift introduces significant disruption and uncertainty. This proposed change was neither anticipated nor accounted for in our operational and financial models. Transitioning to a rebate-based approach would not only increase costs but also impose substantial administrative burdens on covered entitiescontrary to congressional intent. Our 340B infrastructure, including inventory management, data-sharing arrangements with third- party administrators, and resource allocation for patient care, is deeply rooted in the upfront discount model. Any shift to rebates would undermine these established processes and disrupt long-standing reliance interests. Respectfully, HRSAs assertion that a rebate model could have only a minimal impact on covered entities significantly underestimates the operational, financial, and administrative consequences. A rebate-based system would divert critical resources away from patient care and toward managing complex reimbursement workflows, ultimately weakening the programs ability to support vulnerable populations. 340B hospitals serve as essential providers for low-income, uninsured, and underinsured patientspopulations for whom reimbursement often falls below the cost of care. The program was designed to enable providers to stretch scarce resources and expand access to care. A rebate model runs counter to this purpose by introducing inefficiencies, delays, and financial strain. We also disagree with HRSAs position that rebates are necessary to improve program integrity or ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs own audits consistently demonstrate high levels of compliance among covered entities, and manufacturers have not provided evidence of widespread integrity concerns. Less burdensome alternatives exist. For example, HHS could require state Medicaid agencies to adopt models similar to Oregon Medicaids retrospective claims review process to prevent duplicate discounts. A comparable federal approach could effectively address MDPNP deduplication without overhauling the 340B framework. Furthermore, it is evident that pharmaceutical manufacturers are seeking access to CE claims data for purposes unrelated to 340B program integritynamely, to manage their commercial rebate obligations with pharmacy benefit managers (PBMs). Covered entities should not be required to absorb the financial and administrative burden of facilitating manufacturers commercial strategies. At a minimum, HRSA should prohibit the use of CE-submitted rebate data for commercial purposes. Financial and Operational Impact of a Rebate Model Under a rebate model, our hospital would be required to purchase drugs at significantly higher upfront costs, maintain inventory for extended periods, and then submit detailed claims data to receive rebates after dispensing. Even with a 10-day rebate turnaround, this structure effectively forces covered entities to provide interest-free financing to pharmaceutical manufacturers. These cash flow constraints would tie up critical resources that are currently used to support patient care, expand services, and offset uncompensated care costs. Additionally, our hospital currently benefits from prompt pay discounts through wholesalers as well as a cost-minus on 340B purchases. To maintain these discounts, we would need to pay higher upfront prices before receiving rebates, further straining our cash flow. Alternatively, forfeiting these discounts would result in measurable increases in annual drug spend. Collectively, these financial pressures represent a significant departure from the stability and predictability of the current 340B model. Administrative Burden and Increased Costs The administrative complexity associated with a rebate model would be substantial. Based on our experience with HRSAs withdrawn rebate pilot and ongoing interactions with manufacturer data platforms such as 340B ESP, we anticipate significant challenges, including unclear data requirements, inconsistent vendor guidance, and increased IT development costs. Implementing a rebate system would require: Significant investment in new data infrastructure and reporting capabilities Additional full-time staff or reallocation of existing staff to manage rebate submissions, reconciliation, and dispute resolution Increased reliance on third-party vendors to support data aggregation, validation, and compliance Ongoing auditing and monitoring to ensure accuracy and mitigate risk of denied rebates These activities would divert resources from core patient care functions and introduce ongoing operational costs that are both substantial and difficult to fully quantify. Hospitals would also face delays in submitting claims data for physician-administered drugs, which are processed through medical billing systems and may not be finalized for weeks after administration. This contradicts assumptions that claims data submission can occur quickly and efficiently and further delays rebate recovery, exacerbating financial strain. Risk of Denials and Disputes We are particularly concerned about the potential for rebate denials. Our experience with manufacturer data submission platforms, including 340B ESP, has revealed significant and ongoing operational, administrative, and compliance challenges. These platforms frequently present issues related to data inaccuracies, mismatched claim elements, and evolving or inconsistently applied requirements. In addition, there is limited transparency into how submitted data are evaluated, validated, or used by manufacturers to make determinations regarding 340B pricing eligibility. Despite making good-faith efforts to comply with all stated manufacturer policies and submission requirements, we have experienced delays and, at times, denials of access to 340B pricing. These outcomes often occur without sufficient explanation or actionable feedback, making it difficult to identify root causes or implement corrective actions. If rebate-based models or expanded data submission requirements were to be implemented across all hospital settingsincluding in-house pharmacies, outpatient departments, and other provider-based locationsthe administrative burden would increase substantially. Unlike contract pharmacy arrangements, where such requirements are currently more concentrated, broader application would exponentially increase the volume and complexity of data that must be tracked, validated, and submitted. If HRSA proceeds with a rebate model despite our concerns, we strongly urge the agency to prohibit manufacturers from denying rebates. At a minimum, manufacturers should be required to provide detailed and transparent explanations for any denials to allow covered entities to effectively respond. Rebates Are Not Necessary for MDPNP Deduplication Any challenges associated with MDPNP deduplication should be addressed through targeted improvements by CMS rather than through a sweeping restructuring of the 340B program. A rebate model would introduce far greater complexity and burden than the issues it seeks to resolve. Conclusion In summary, a rebate-based model would fundamentally alter the 340B program in ways that increase costs, impose significant administrative burdens, and reduce the resources available for patient care. It would shift financial risk to safety-net providers while benefiting pharmaceutical manufacturersan outcome that is inconsistent with the intent of the 340B statute. We strongly urge HRSA to maintain the longstanding upfront discount structure and reject any move toward a rebate-based system. Thank you for the opportunity to provide input on this important issue. Sincerely, UMass Memorial Medical Center April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: UMass Memorial Medical Center, a participating 340B covered entity (CE), appreciates the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the potential use of backend rebates to replace upfront 340B discounts. We understand HRSA is considering a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any transition to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed the 340B program for more than three decades. We have built our program operations, financial planning, and patient care services around the long-standing and reliable framework of upfront discounts. For over 30 years, 340B has functioned effectively without reliance on post-sale rebates, and the recent consideration of such a fundamental shift introduces significant disruption and uncertainty. This proposed change was neither anticipated nor accounted for in our operational and financial models. Transitioning to a rebate-based approach would not only increase costs but also impose substantial administrative burdens on covered entitiescontrary to congressional intent. Our 340B infrastructure, including inventory management, data-sharing arrangements with third-party administrators, and resource allocation for patient care, is deeply rooted in the upfront discount model. Any shift to rebates would undermine these established processes and disrupt long-standing reliance interests. Respectfully, HRSAs assertion that a rebate model could have only a minimal impact on covered entities significantly underestimates the operational, financial, and administrative consequences. A rebate-based system would divert critical resources away from patient care and toward managing complex reimbursement workflows, ultimately weakening the programs ability to support vulnerable populations. 340B hospitals serve as essential providers for low-income, uninsured, and underinsured patientspopulations for whom reimbursement often falls below the cost of care. The program was designed to enable providers to stretch scarce resources and expand access to care. A rebate model runs counter to this purpose by introducing inefficiencies, delays, and financial strain. We also disagree with HRSAs position that rebates are necessary to improve program integrity or ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs own audits consistently demonstrate high levels of compliance among covered entities, and manufacturers have not provided evidence of widespread integrity concerns. Less burdensome alternatives exist. For example, HHS could require state Medicaid agencies to adopt models similar to Oregon Medicaids retrospective claims review process to prevent duplicate discounts. A comparable federal approach could effectively address MDPNP deduplication without overhauling the 340B framework. Furthermore, it is evident that pharmaceutical manufacturers are seeking access to CE claims data for purposes unrelated to 340B program integritynamely, to manage their commercial rebate obligations with pharmacy benefit managers (PBMs). Covered entities should not be required to absorb the financial and administrative burden of facilitating manufacturers commercial strategies. At a minimum, HRSA should prohibit the use of CE-submitted rebate data for commercial purposes. Financial and Operational Impact of a Rebate Model Under a rebate model, our hospital would be required to purchase drugs at significantly higher upfront costs, maintain inventory for extended periods, and then submit detailed claims data to receive rebates after dispensing. Even with a 10-day rebate turnaround, this structure effectively forces covered entities to provide interest-free financing to pharmaceutical manufacturers. These cash flow constraints would tie up critical resources that are currently used to support patient care, expand services, and offset uncompensated care costs. Additionally, our hospital currently benefits from prompt pay discounts through wholesalers as well as a cost-minus on 340B purchases. To maintain these discounts, we would need to pay higher upfront prices before receiving rebates, further straining our cash flow. Alternatively, forfeiting these discounts would result in measurable increases in annual drug spend. Collectively, these financial pressures represent a significant departure from the stability and predictability of the current 340B model. Administrative Burden and Increased Costs The administrative complexity associated with a rebate model would be substantial. Based on our experience with HRSAs withdrawn rebate pilot and ongoing interactions with manufacturer data platforms such as 340B ESP, we anticipate significant challenges, including unclear data requirements, inconsistent vendor guidance, and increased IT development costs. Implementing a rebate system would require: Significant investment in new data infrastructure and reporting capabilities Additional full-time staff or reallocation of existing staff to manage rebate submissions, reconciliation, and dispute resolution Increased reliance on third-party vendors to support data aggregation, validation, and compliance Ongoing auditing and monitoring to ensure accuracy and mitigate risk of denied rebates These activities would divert resources from core patient care functions and introduce ongoing operational costs that are both substantial and difficult to fully quantify. Hospitals would also face delays in submitting claims data for physician-administered drugs, which are processed through medical billing systems and may not be finalized for weeks after administration. This contradicts assumptions that claims data submission can occur quickly and efficiently and further delays rebate recovery, exacerbating financial strain. Risk of Denials and Disputes We are particularly concerned about the potential for rebate denials. Our experience with manufacturer data submission platforms, including 340B ESP, has revealed significant and ongoing operational, administrative, and compliance challenges. These platforms frequently present issues related to data inaccuracies, mismatched claim elements, and evolving or inconsistently applied requirements. In addition, there is limited transparency into how submitted data are evaluated, validated, or used by manufacturers to make determinations regarding 340B pricing eligibility. Despite making good-faith efforts to comply with all stated manufacturer policies and submission requirements, we have experienced delays and, at times, denials of access to 340B pricing. These outcomes often occur without sufficient explanation or actionable feedback, making it difficult to identify root causes or implement corrective actions. If rebate-based models or expanded data submission requirements were to be implemented across all hospital settingsincluding in-house pharmacies, outpatient departments, and other provider-based locationsthe administrative burden would increase substantially. Unlike contract pharmacy arrangements, where such requirements are currently more concentrated, broader application would exponentially increase the volume and complexity of data that must be tracked, validated, and submitted. If HRSA proceeds with a rebate model despite our concerns, we strongly urge the agency to prohibit manufacturers from denying rebates. At a minimum, manufacturers should be required to provide detailed and transparent explanations for any denials to allow covered entities to effectively respond. Rebates Are Not Necessary for MDPNP Deduplication Any challenges associated with MDPNP deduplication should be addressed through targeted improvements by CMS rather than through a sweeping restructuring of the 340B program. A rebate model would introduce far greater complexity and burden than the issues it seeks to resolve. Conclusion In summary, a rebate-based model would fundamentally alter the 340B program in ways that increase costs, impose significant administrative burdens, and reduce the resources available for patient care. It would shift financial risk to safety-net providers while benefiting pharmaceutical manufacturersan outcome that is inconsistent with the intent of the 340B statute. We strongly urge HRSA to maintain the longstanding upfront discount structure and reject any move toward a rebate-based system. Thank you for the opportunity to provide input on this important issue. Sincerely, UMass Memorial Medical Center
HRSA-2026-0001-2065CHI Saint Joseph Health2026-04-20T04:00Z6,493 chars
See attached letter from Matthew Grimshaw, President, Saint Joseph Health. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Saint Joseph Health, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net health system, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Saint Joseph Health that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 Saint Joseph Health HHS Docket No. HRSA-2026-03042 Saint Joseph Health relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facilities. Savings from the 340B program enable us in Lexington, Kentucky to provide support services including social workers and support groups for cancer survivors. In our more rural communities of London and Mt. Sterling, Kentucky, the 340B program enables us to employ oncology pharmacists dedicated to infusion clinics to improve patient outcomes and keep a high standard of patient care close to home. Additionally, we use our 340B savings in rural Berea, Kentucky to provide cardiovascular heart health screenings. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front Apr 20, 2026 Saint Joseph Health HHS Docket No. HRSA-2026-03042 discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me at Matthew.Grimshaw@commonspirit.org if you have questions. Sincerely, Matt Grimshaw, MBA President, Saint Joseph Health As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2066CHRISTUS Health2026-04-20T04:00Z13,654 chars
See attached file submitted on behalf of CHRISTUS Health. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of CHRISTUS Health, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose significant and material costs and burdens on CHRISTUS Health that far outweigh any benefits that might come from it. More fundamentally, HRSAs desire to test a rebate model appears to be based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. Under the established and long existing law, however, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which CHRISTUS Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. CHRISTUS Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. More drugs mean more claims to submit, more 5101 N OConnor Blvd | Irving | TX, 75039 | Tel 469-282-2000 rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that CHRISTUS Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require CHRISTUS Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, CHRISTUS Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital and far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. CHRISTUS Health does not currently have the staff needed to comply with a Rebate Program. CHRISTUS Health expects to need an increase in its 340B dedicated staff by roughly 25% with the implementation of the 340B rebate model pilot program. This added expense is driven in part by the medical claim submission requirements, which are currently not industry- standard in the claim submission processes through programs like 340B ESP. We estimate the salary expense increase to be around $300,000 annually. CHRISTUS Health also anticipates needing to redirect existing resources across its network to support the program in addition to the added dedicated staff described above. Front-line patient care staff will need to support the centralized workforce in investigating manufacturer responses to rebate claim submissions. The ultimate number of front-line patient care staff that will need to be added to address the administrative requirement of a rebate is unknown at this time and in addition to the costs noted above. It is also reasonable to believe that we will endure additional front-line turnover given that unavoidable administrative duties, such as those required by a rebate model, are a prominent driver of staff burnout. While the costs are difficult to measure at this level, they are real and detrimental to the overall cost of care and quality of care. CHRISTUS Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. The external software cost associated with our Third Party Administrator (TPA) to be able to submit 340B data to Beacon was originally planned to cost approximately $600,000 in annual subscription expenses. There will be additional IT systems/software costs that arent yet known. Additional significant, difficult to estimate yet material costs come because of the difficulty in the reconciliation, monitoring, and dispute processes described above. Those costs can be significantly increased by each individual manufacturer given their discretion to deny claims. The medical claims data, specifically claim line and claim line number, lack clear universal guidelines for formatting as opposed to pharmacy claims data which has NCPDP standards. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Current data aggregation and submission processes exist for operational areas leveraging a TPA software solution for virtual replenishment but does not exist for the complexity of current health system operations that may have physically separated, 340B clean site operational models. Additionally, medical claims data, as described in previous comments, if required would pose significant additional complexity and costs that are not measurable at this time but expected to be material. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force CHRISTUS Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The implementation of the 340B rebate program further increases our cost by adding yet another accounts receivable workflow. This will reduce our cash position making it more difficult to be able to support our ongoing operational needs. CHRISTUS cash position is used as a key metric in determining our cost of capital key to maintaining and growing access to quality healthcare. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that CHRISTUS Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will or reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post- sale rebates. CHRISTUS Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. CHRISTUS Health has a variety of programs designed and structured around the availability of an upfront discount program. In Nueces County, Texas, CHRISTUS Spohn Health System is partnered with the county to provide all healthcare services to the indigent population of the county. Relying on the 340B discount is one of the mechanisms to maintain affordable services for that community, and the uncertainty of whether the discount truly exists in the rebate model may impact our ability to continue providing population health services in that community. CHRISTUS Health also provides medication financial assistance to its underinsured patients via a discount plan leveraging 340B pricing. The uncertainty of whether the discount truly exists in the rebate model will impact our ability to continue providing this much needed community benefit for our ambulatory patients. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. CHRISTUS reiterates the communication it made to HRSA at "340Bpricing@hrsa.gov" on December 18, 2025, outlining concerns with and objections to the mandate of the Beacon platform. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on CHRISTUS Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Without a third-party clearing house the control over the deduplication process, and therefore the ultimate the costs and burdens of that process lie with the manufacturer and/or its agent. These two entities have the sole ability to determine when they believe something is 340B eligible based on an opaque proprietary algorithm coded within Beacon MFP. This lack of transparency cannot be an element in an efficient and fair system designed to help providers stretch healthcare resources. Further, any algorithm, without significant and ongoing human intervention, will not be sufficiently reliable and accurate in its determinations. If the 340B rebate pilot process ultimately employs the same or similar algorithm via Beacon 340B, we anticipate seeing similar. Unless the manufacturers can attest that it is 100% accurate, then HRSA has failed to enforce the Pharmaceutical Pricing Agreement by failing to require manufacturers to offer 340B pricing. For all of these reasons, CHRISTUS Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow CHRISTUS Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Paul Bollinger Vice President Advocacy and Government Affairs CHRISTUS Health
HRSA-2026-0001-2067(no commenter metadata)2026-04-20T04:00Z34,911 chars
See attached file(s) April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Phelps County Regional Medical Center d/b/a Phelps Health (Phelps Health), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Phelps Health and other Covered Entities. As a 340B-participating hospital, Phelps Health is a core component of the healthcare safety net in the rural communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Phelps Health participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Phelps Healths 340B Program participation enables us to commit an additional ten million dollars per year to the Rolla, Missouri community safety net population we serve. Phelps Health also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Phelps Health wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Phelps Health submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH PHELPS HEALTHS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Phelps Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval,5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Phelps Health when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? HOW COULD HRSA OR PHELPS HEALTH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers, in conjunction with platform companies such as Kalderos (in conjunction with Second Sight) have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Phelps Health. Regarding data disclosures, manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendors and give them the right to monetize that data in order to maintain access to their drugs. Further, the entire claims submission process has increased our administrative burden, with no standardized processes across vendors in a rapidly changing landscape. Manufacturers employees and contractors such as Kalderos and IQVIA have sent us overreaching demands. When our operations change (e.g., if we hire a new physician or open a new on-site clinic), we forego 340B purchases to avoid a so-called unusual change in purchases. Manufacturers such as AbbVie and Boehringer Ingelheim reach out with lists of questions like interrogatories and document demands, inappropriately threatening to seek HRSA OPA approval for a manufacturer audit unless their demands are met. A rebate model would only further exacerbate these issues. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO PHELPS HEALTH TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Phelps Health would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Phelps Health has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 8 42 U.S.C. 256b(a)(1). WHAT STATUTE OR REGULATION PERMITS PHELPS HEALTH TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? WOULD DRUG MANUFACTURERS BE PERMITTED TO USE PHELPS HEALTHS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF PHELPS HEALTH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE PHELPS HEALTH FOR THE VALUE OF ITS DATA? One of Phelps Healths principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.10 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Phelps Health for that value? Isnt this the exact harm the Takings Clause prohibits? 9 See 45 C.F.R. 160.103. 10 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp- content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Phelps Health believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Phelps Health urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Phelps Healths perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Phelps Healths patient population, we serve many other patients, including patients with no coverage at all. Requiring Phelps Health to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO PHELPS HEALTH? IF NOT, WHY NOT? As noted above, Phelps Health firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Phelps Health urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON PHELPS HEALTH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Phelps Healthto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.11 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers noncompliance rate so high, Phelps Health is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 11 See 45 C.F.R. 164.501. 12 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Phelps Health hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Phelps Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Phelps Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. At a minimum, Phelps Health would have to budget for at least 2.0 FTEs, which would include a 340B Program Analyst and a financial analyst experienced in 340B unit economics. Building and maintaining an additional TPA module would further increase our expenses. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Phelps Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. By our estimates, this effort would cost at least $240,000 annually. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Phelps Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. If, for example, Walgreens and Walmartas our contract pharmacy partnerschose to exclude NDCs from our program, we would have seen annual losses of $1.6 million and $1.2 million, respectively. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Phelps Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independentand realisticmechanism for resolving disputes. Currently, the 340B ESP and Truzo claims submission platforms lack these aspects and we fear a rebate model constructed by entrenched vendors will compound these issues. Without such safeguards, Phelps Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Phelps Health would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Phelps Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Phelps Health and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Alexander Paris, Esq, Associate General Counsel, Phelps County Regional Medical Center APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
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See attached file(s) Parkland April 17, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HFIS Docket No. HRSA-2026-03042 Dear Administrator Engels: Dallas County Hospital District d/b/a Parkland Health (Parkland), a covered entity participating in the 340B Drug Pricing Program since 1992, submits the following comments in response to the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) regarding the potential use of a backend rebate model in lieu of upfront 340B discounts. We understand HRSA is considering a rebate-based approach to effectuate 340B ceiling prices for up to 25 drugs-10 drugs subject to Medicare Part D negotiated prices which began in 2026, and an additional 15 drugs beginning in 2027. As the public safety-net hospital system for Dallas County, Texas, Parkland Health serves a patient population of approximately 21% Medicaid and 43% uninsured. In fiscal year 2025, Parkland had more than 61,000 discharges, 1.2 million outpatient visits and dispensed approximately 2.2 million retail prescriptions. Our disproportionate share percentage for the same period was approximately 42%. Parkland does not utilize contract pharmacies but provides free and tow-cost medications to eligible patients through Parkland's own network of entity-owned outpatient pharmacies throughout the county which are connected to some of our 16 primary care health centers and our specialty clinics. In the 340B program, Parkland is registered as one parent hospital with 133 child sites (under DSH designation) and one parent and nine associated sites under a FQHC designation for our homeless outreach program. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those who are uninsured or covered by public insurance, which typically reimburses less than the cost of care. The 340B program was established by Congress to reduce operating costs for participating entities so they may stretch scarce federal resources to provide greater access to medical care for low-income patients. The importance of the 340B program to Parkland and our patients cannot be overstated. In 2025, the 340B program saved Parkland $267 million in medication costs which enabled us to provide medications and other medical services to our vulnerable population. In FY 2025, Parkland's charity care Parkland Health 5200 Harry Hines Blvd. l Dallas, TX 75235 214-590-8000 l fax 214-590-809G parklandhealth.org and uncompensated care amounts ($1 billion and $1.4 billion, respectively) far exceeded 340B drug savings, thereby highlighting the importance of every dollar preserved through the 340B program. As one of the original 340B Program providers, Parkland Health strives to abide by the legislative intent of the program. Our charity care program, which is based on federal poverty guidelines, has existed for decades and provides free or low-cost medical services and prescription medications to eligible patients; the same patients and healthcare entities for which the program was established. Two-thirds of our entity-owned retail pharmacy prescriptions went to unfunded/charity care patients. Parkland Health, in partnership with Dallas County Health and Human Services, also conducts community health needs assessments to identify medically underserved areas within the county. Over the years, Parkland has used this information and has expanded medical clinics and services throughout these areas of the community, providing more access to care for those in need. Guaranteed 340B drug cost savings from the upfront discount methodology has afforded Parkland to expand access to medical and pharmacy services. Parkland Heaith strongly opposes any transition from the longstanding upfront discount model to a rebate-based framework and urges HRSA to preserve the mechanism through which the 340B Program has operated successfully for more than three decades. Should HRSA or Congress question the integrity of the program, Parkland recommends increasing transparency or adding certain safeguards to the current model rather than transitioning to a rebate model that only benefits the rnanufacturers and not Americans who rely on free and reduce cost drugs afforded to them by health systems like Parkland. Any proposed rebate model will substantially increase costs, administrative complexity, and financial risk for the very providers Congress intended the 340B Program to support. Our 340B operations including inventory management, compliance controls, minimal data reporting to third-party vendors, and allocation of resources to patient carehave been deliberately designed around the upfront discount model. A shift to rebates would upend these settled reliance interests, which are grounded in decades of consistent statutory interpretation and program administration. Respectfully, we disagree with HRSA's suggestion that a rebate model, even one incorporating safeguards, would result in only a "minimal impact" on covered entities. This does not align with the operational reality faced by Parkland and many other health systems participating in the 340B program. A rebate-based nriodel vvill impose significant and ongoing administrative burdens and financial costs on covered entities, diverting critical resources away from direct patient care and undermining the core statutory purpose of the 340B Program. We are also concerned HRSA is now contemplating a broader rebate framework than the one outlined in its previously withdrawn rebate pilot notice. While we appreciate the opportunity to comment through this RFI, we submit these comrnents to underscore the substantial harm, increased costs, and adverse patient-care consequences a rebate rnodel would create for our health system and the communities we serve. Parkland Health 5200 Harry Hines Blvd, 1 Dallas, TX 75235 214.590-8000 I fax 214-590-8096 parklandhealth.org Financial and Operational impact A 340B rebate model will create tremendous financial and operational burdens for Parkland and the implications are concerning. Shifting to WAC priced purchasing will create significant budgetary pressures. We understand that HRSA's revised rebate policy would now apply to 25 drugs-15 more than the 2025 version. This expansion means we would have to buy even more drugs at prices far above the 340B rate in most cases, hold them in inventory for weeks or months, and then wait for rebates to recover the difference. In addition, resources would have to be allocated for auditing and formally appealing denied rebates. Even with a 10-day rebate window, the policy would effectively require health systems to provide interest-free loans to drugmakers throughout the pre-dispense period and beyond, tying up resources that could have used to support patient care under 340B's longstanding upfront discount model. For the 25 IRA drugs selected for 2026 and 2027, using CY 2025 purchase volurnes to model future use, what would cost Parkland $9.3 million with current 340B pricing, would instead result in a cost of $96 million in WAC pricing. When creating a fiscal budget, we must plan for actual expenses incurred, and it would be irresponsible to assume we would receive the full expected amount due to manufacturer 340B rebates. An additional $85.4 million in expense is not an insignificant amount which can easily be absorbed elsewhere. It is difficult to predict to what extent services may be affected by a rebate model. Direct patient care and/or our charity care drug program would likely have to be reduced to compensate for increased drug costs. If patients are less likely to receive outpatient medications, they are more likely to return to the emergency department for more expensive care. It is also possible a higher upfront expense leads to lower inventory levels of some high-cost drugs, thereby increasing the risk of a delay in patient care. All Parkland retail pharmacies and outpatient clinics operate as 340B clean sites. The difference between 340B to WAC pricing translates to an additional drug expense carrying cost of about $237,000 per day. This is the amount of cash Parkland will have to spend each day, from time of drug purchase to dispensation to receipt of rebate. Using historical inventory turnover data (20 days), estimated entity rebate data processing time (2 days), and the maximum 10-day manufacturer allowance, we anticipate rebates will be delayed by 32 days. This arnounts to an additional $7.6 million in drug expense Parkland will have to spend at the onset of the rebate model. Of note, many drugs may be held in inventory for a longer time frame, resulting in an even higher onset cost. The Federal Register RFI Notice states rebates may be denied for reasons other than diversion or Medicaid duplicate discounts; therefore, it is likely manufacturers will deny rebates. Using what we believe is a conservative estimate of 15% rebate loss (manufacturer denials, expired drugs, etc.) results in an additional annual drug expense of $12.8 million. Of note, Parkland will also lose our significant negotiated wholesaler cost of goods sold (COGS) discount under the rebate model (due to contractual confidentiality requirements, we are not able to disclose Parkland Health 5200 Harry Hines Blvd. l Dallas, TX 75235 214-590-8000 l fax 214-590-8096 parklandhealth.org this amount). During the most recent fiscal year, Parkland processed over 5.1 million 340B transactions. As a safety- net health system, our goal is to minimize administrative costs and instead, direct money to patient care activities. Current cost drivers are primarily related to staffing and to a lesser extent, third-party 340B vendors. We employ one 340B program manager who is responsible for all day-to-day operations including compliance auditing. Ancillary pharmacy informatics/analyst staff spend approximately 20 percent of their time on 340B reporting related activities (- 830 hours total annually). All 340B report processing for mixed-use transactions is performed internally, after which the resulting files are transmitted to a third-party 340B vendor that provides split-billing IT services. Current internal administrative costs for program management, IT analysts, audit functions under the upfront 340B discount model are about $275,000 for labor and $45,000 for third party split-billing services. Implementing a 340B rebate model would impose substantial one-time and ongoing costs on our organization. One-time implementation expenses would include legal and regulatory review, program design and governance, IT system modifications and integration, development of a dedicated internal rebate model database, data reporting and validation, staff training, and rebate platform(s) registration and onboarding. A conservative estimated startup cost range is $250,000 - $300,000. Ongoing annual administrative and operational costs would include dedicated staffing for rebate program administration, incremental IT and data support, denial and appeal management, enhanced compliance and audit activities. For a 340B rebate model, we estimate needing an additional 4.5 permanent FTEs consisting of a 340B Team Lead (1 FTE), 340B analysts (3 FTE), and a Revenue Cycle/Finance liaison (0.5 FTE). These staff members would be responsible for data reporting, data validation, data submission, rebate reconciliation, auditing, denied rebate investigation and appeals processing, Medicaid 340B modifier validation, and general ledger routing support. Collectively, these new ongoing costs are estimated at $475,000 annually, exclusive of vendor fees, lost or denied rebates, and liquidity impacts. These expenses would divert limited resources from patient care and are inconsistent with the statutory purpose of the 340B Program. 340B data vendors are still developing software to assist entities with rebate model data submissions and reconciliation. Therefore, it is difficult to ascertain the full value of using a third-party vendor, especially since there may be a high associated expense whether it be a flat annual cost or a per transaction fee. We assume the rebate model payment process will be similar to what is used for MFP payments under the Medicare Drug Price Negotiation Program (MDPNP). Reconciling manufacturer payments with 835 remittance files, CMS reporting, Beacon platform reporting, and routing payments to appropriate expense accounts has been a very difficult process. While a rebate model would be a new process, if the MFP payments under the MDPNP is any indication of what a rebate model will entail, rebate model Parkland Health 5200 Harry Hines Blvd. [ Dallas, IX 75235 214,590-8000 [ fax 214-590-8096 parklandhealth.org payments may also be difficult to understand anci reconcile. If HRSA intends to move forward with a rebate model pilot, HRSA should require manufacturers to refund health systems for the additional administrative costs based on entities stated time and salary expenses and provide third-party vendor services at no charge. An alternative could be to provide the entity with a per transaction refund based on entity-specific expenses. Methods to offset increased operational costs could be achieved by providing rebates for expired/wasted drugs and to not permit any rebate denials. We feel the best method is to avoid these costs by not utilizing a rebate model. As a safety-net health system with budget constraints, we rely heavily on managing the ever-increasing pharmaceutical costs. A rebate model also hinders the revenue cycle analysis for drugs included in the model. Drug expense data is typically pulled from the electronic health record (EHR) which uses wholesaler invoices as the data source, or directly from wholesaler purchasing reports. Any 340B rebates will not be reflected in either of these two data sources. There will be a loss of a real-time purchasing/expense trail. We also foresee difficulty in accurately routing manufacturer payments to the specific areas that purchased and utilized the drugs. This will make it difficult and burdensome for Parkland, or any other entity for that matter, to perform accurate financial reconciliation, analysis, and planning, which is a critical component to being fiscally responsible stewards of taxpayer funds. Annual 340B savings calculations are often done by 340B entities. Although not currently required by federal statute, some state laws require it, and multiple Congressional legislative proposals require some level of savings reporting. Having WAC purchases on a 340B account and reconciling with separate back-end rebate information will not only be complicated but will also add further administrative burden when attempting to calculate an accurate 340B savings value, especially if needed at the child- site vs entity level. The table below summarizes financial risk and expense undertaken by Parkland with a Rebate Model Pilot Program, the magnitude of which would likely require reductions or limitations to services provided to the most vulnerable patients in modern society. Rebate Model pilot - Financial lmpact Estimate Category Expense Notes Annual Additional Carrying Cost $ 86,672,048 Extra annual expense for WAC purchases (WAC minus 340B price). The a mount at risk of not receiving a rebate. Upfront Cash Float 7,598,645 Extra cash spent on WAC drugs prior to onset of rebate payments, based on a 32-day rebate waiting period. Time Value of Money 303,946 The value of interest (4%) lost Loss of Wholesaler COGS discount confidential Current Administrative Costs 320,000 Parkland Health 5200 Harry Hines Blvd. I Dallas, TX 75235 214590-8000 I fax 214-590-8096 parklandhealth.org Additional Administrative Costs 707,000 Rebate Denials (10% estimate) $ 8,539,912 Wastage Loss (5% estimate) $ 4,269,956 TOTALAnnual Additional Costs: $ 21,419,459 Medicaid Billing Parkland Health has significant concerns with the proposed rebate model's intersection with Medicaid billing. The proposed rebate model creates significant uncertainty regarding Medicaid billing, modifiers, and actual acquisition cost (AAC) reporting. Many payors require submission of actual acquisition cost on drug claims. 5ince EHR drug pricing data (which is submitted on claims) is automatically sourced from invoice pricing or wholesaler catalog price files, drug costs reflected on claims for rebatable drugs would reflect WAC cost under the proposed rebate model. Claim level modifiers to identify 340B drugs are also a concern. Texas Medicaid has indicated we should place the required 340B modifier on all drug claims for which we would submit for a rebate. If 340B modifiers are submitted for rebate model drugs, then Medicaid and/or other payor reimbursement is reduced. If a manufacturer subsequently denies a rebate, then we will suffer financial harm from the lower reimbursement and/or the burden of tracking and manually resubmitting affected claims without the 340B modifier. It is also important to note some payors are aware Parkland is a 340B entity and automatically deny claims sent without a 340B modifier, another monetary loss and/or administrative burden on our institution. Covered outpatient drug claims with 3408 modifiers that have been manually removed because of denied rebates also pose complexities and burdens on auditing for Medicaid duplicate discount prevention. Whether an entity is performing self-audits or audited by another party (e.g., HRSA, manufacturer), historical reviewing of specific claims without a 340B modifier and linking to a third-party rebate platform would be very challenging, with uncertain consequences. Compliance with Medicaid billing rules and duplicate discount prevention is a significant focus of our internal self-audits, as well as both HRSA 340B audits and manufacturer inquiries of entities. The rebate model will be an impediment to Medicaid duplicate discount prevention and poses an unnecessary additional compliance risk on entities. Payment Timing and Rebate Denials Parkland's wholesaler contracts typically have net 30 payment terms for all classes of drugs. Invoices are typically paid within the required 30-day deadline. Payment terms are set in contract and not altered by Parldand Health 5200 Harry Hines Blvd. 1 Dallas, TX 75235 214-590.8000 1 fax 214-59D-8096 parklandhealth.org a rebate model. Even if manufacturers are required to send payment within 10 calendar days of a claim, there is still tremendous financial risk to Parkland. We would still have to incur $7.6 million at the onset of the program as an additional and unbudgeted expense. The amount of time a drug sits in inventory as well as data reporting processing time all contribute to cash flow implications. As a county hospital, this could be devastating to our ability to serve the vulnerable patients entrusted to our care. The RFI mentions submission of a "complete claim." We are concerned about delays, especially with clinic adrninistered medical claims. These "completed" final claims often are not filed for many weeks after the service was provided and this follows normal billing practices. This in turn increases financial cash flow risk. Any rebate model pilot should have criteria for a manufacturer to uphold rebate payment requirements, otherwise risk removal from the program for repeated offenses. Another option would be to require manufacturers to fund an escrow account for the purpose of distributing payments if they are delayed. While we applaud HRSA for seeking structured methods to address payment timing and cashflow impacts, Parkland believes any attempted safeguards HRSA imposes under a rebate model will be flawed because there will be a period of time where drugs are sitting in inventory, unused after purchase. Structuring manufacturer rebate payment terms to one- or two-days verses ten can certainly assist, but there will always be purchased drugs that sit in inventory for weeks at a time, resulting in financial risk to entities. If HRSA elects to proceed with a rebate program despite these concerns, we urge the agency to prohibit manufacturers from denying rebates submitted by 3408 covered entities. At a minimum, HiSA should expressly prohibit manufacturers from denying rebates based on allegations of IVledicaid duplicate discounts or diversion. Permitting rebate denialsparticularly on broad, subjective, or manufacturer-defined groundswould add significant administrative burden, cost, and financial uncertainty for safety-net providers, especially given the need to interface with manufacturer-designated vendors to administer rebate transactions. Under a rebate framework, manufacturers would continue to receive the claim level data they assert is necessary for program integrity purposes and would retain their existing statutory audit rights under the 340B statute. If HRSA nevertheless allows limited rebate denials, it should require manufacturers to provide detailed, standardized, and timely documentation for each denial, so covered entities have sufficient information to meaningfully validate, correct, or appeal such determinations. Entity Data Collection All EHR (Epic) data is contained in the EHR's data universe which is under the responsibility of our health system's Enterprise Data Systems department. Parkland pharmacy reporting collects daily drug usage data for our mixed-use areas (acute care hospital). This data is based on medication administrations or dispensations. Validation occurs at time of report creation as well as during internal audits. This data contains the basic elements needed to properly classify a drug accrual as 340B or GPO. An internally Parkland Health 5200 Harry Hines Blvd. 1 Dallas, TX 75235 214-590-8000 1 fax 214-590-8096 parklandhealth.org generated, fully processed, data file is sent to a third-party split-billing software vendor. Our outpatient clinics and entity-owned retail pharmacies are all 340B clean sites and therefore, daily 3408 files for these areas are not generated daily, but reports are created on an as needed basis. A potential rebate model pilot woud significantly change data collection activities. A new file would have to be created to meet the needs of the rebate pilot and additional files would also have to be created to capture data for outpatient clinic administered medications as well as for retail prescriptions. Parkland is currently not submitting comprehensive data elements which were listed in the previously withdrawn rebate model RFI to any third-party vendor. If a pilot rebate model is approved, entities should be required to submit minimal data elements for both retail and medical clairns. For retail claims: prescription number, date of service, NDC, quantity, pharmacy NPI, and parent HRSA 340B ID should be sufficient. For medical claims: date of service (allow time stamp), NDC, quantity, unit of measure (NCPDP standard should be listed), clinic/hospital NPI, and parent HRSA 340B ID. Data elements relating to wholesaler purchase data or invoice numbers should not be allowed. In addition, there should not be any time limitations for entities to submit data and rebates should be at the unit level, not a full package. Ideally all manufacturers would have the exact same data elements and only utilize one standard platform. Manufacturers and rebate platform vendors must adhere to all HIPPA guidelines. Any rebate-based model would require the transmission of sensitive claims-level data outside the direct control of covered entities, raising significant privacy and security concerns. To mitigate these risks, HRSA should require robust safeguards, including data-minimization standards limiting submission to the minimum necessary data elements; prohibitions on the transmission of unnecessary patient identifiers; secure, encrypted data transrnission and storage protocols; defined data-retention limits; and binding contractual restrictions preventing manufacturers or their vendors frorn using 3408 rebate data for commercial, pricing, formulary, or other non-program purposes. Covered entities must also have transparency into how their data is used and meaningful recourse in the event of unauthorized access, misuse, or disclosure. Reporting Requirernents If HRSA were to proceed with a rebate pilot program, manufacturers should be subject to clear and standardized reporting requirements to enable effective oversight. At a minimum, manufacturers should be required to report to HRSA on a monthly basis, aggregate data on rebate payment compliance including average days for payment, denial rates and reasons, and dispute resolution outcomes including time (days) from dispute filing to resolution. The same data elements, with the addition of detailed reasoning for denied claims on a line-by-line basis should also be available to entities on a regular basis. HRSA should publicly report high-level performance rnetrics, per manufacturer, to promote transparency while avoiding disclosure of covered entity-specific data. Participation in the Parkland Health 5200 Harry Hines Blvd. IDallas, TX 75235 214-590-8000 l fax 214-590-8096 parklandhealth.org rebate model pilot program should be dependent on achieving and mainta ning a specific metric of performance for the manufacturer. Program Integrity We disagree with HRSA that a rebate model would improve 340B program integrity and is needed to ensure deduplication under the Medicare Drug Price Negotiation Program. Parkland believes a rebate model will decrease program integrity, especially when related to Medicaid duplicate discounts as it will be difficult to track and link 340B claim modifiers to paid or denied rebates. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to consider implementing. The Department of Health & Human Services (HHS) could require state Medicaid agencies to adopt a process similar to Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level could also be used to address MDPNP nonduplication. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model that will likely result in lirnitations on care for the most vulnerable population. Parkland Health appreciates HRSA's ongoing efforts to support the integrity of the 340B Program. However, we strongly urge HRSA to reconsider implementation of the 340B Rebate Model Pilot Program given its far-reaching financial, operational, and cornpliance burdens on safety-net health systems. A change of this magnitude could harm the very patients the program was designed to serve This rebate model will not create savings for the federal budget and will cost the taxpayers of Dallas County and taxpayers from across the country who support public health systems like Parkland. Thank you for your consideration of our comments and for your continued support of health systems serving our nation's most vulnerable patients. Should you wish to discuss the rebate model further, please reach out to Katherine Yoder, Vice President of Government Relations for assistance at katherine.yoder@phhs.org or 214-590-0122. Regards, Fred Cerise, MD, MPH President and Chief Executive Officer Parkland Health 5200 Harry Hines Blvd. Dallas, TX 75235 214-590-8000 l fax 214-590-8096 parklandhealth.org
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See attached file(s) April 20th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Subject: Formal Request for Exemption of FQHC Look-Alikes from the 340B Rebate Model Pilot HRSA-2026-03042 Dear Director Britton, I am writing to you today on behalf of a FQHC Look A-like to respectfully and urgently request the exemption of Federally Qualified Health Center Look-Alikes (FQHCLALs) from the proposed 340B Rebate Model Pilot. As an FQHC Look-Alike, we operate a critical network of rural offices providing essential medical services to our communities. We are heavily reliant on the current structure of the 340B program, specifically the up-front cost savings, to meet our annual budgetary requirements. Unlike many other covered entities, look a-likes do not receive federal funding; therefore, the 340B program is our only significant revenue source to fund the operations of the rural offices upon which our communities depend. The financial strain caused by recent changes, specifically the anticipated losses associated with the Manufacturer Drug Pricing Notification (MDPN) program, is already significant. We anticipate a reduction in 340B savings in 2026 to be in the hundreds of thousands of dollars due to MDPN. Implementing the 340B Rebate Model Pilot would inflict devastating financial harm on our organization, compounding existing losses. The 340B program accounts for roughly 40% of our total revenue budget. Our 2025 data shows that our upfront drug costs would soar from just over $309,000 to more than $2,000,000. This immense and immediate expense increase is not fiscally sustainable, given our organization's current size and funding model. The consequence of implementing this rebate model for our organization, and likely for other FQHC Look-Alikes, would be dire. At a minimum, we anticipate being forced to close critical offices to continue to provide any medical services to our communities. Furthermore, implementation of the rebate model would remove our ability to offer an up-front sliding fee discount to our most vulnerable patients at our in-house pharmacy. This would severely limit access to care for the vulnerable populations we serve. We urge the Office of Pharmacy Affairs to consider the unique financial structure and dependence of FQHC Look-Alikes, on the existing 340B up-front savings model. We request an immediate exemption for FQHC Look-Alikes from the 340B Rebate Model Pilot to ensure the continuity of care in rural areas. Thank you for your time and consideration of this urgent matter.
HRSA-2026-0001-2070Open Cities Health Center, Inc.2026-04-20T04:00Z58,905 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Open Cities Health Center Inc. 340B ID CH052730 Entity Type HRSA - FUNDED HEALTH CENTER State Minnesota In-House Pharmacy (Y/N) N Contract Pharmacies (Y/N) Y List TPA Vendors Walgreens and Wellpartner Contact Name Todd Moultrie Contact Email Todd.Moultrie@opencitieshealth.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 3,700 contract pharmacy 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. We endured about $163k in administrative 340B cost for contract pharmacy. iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Our cost of short-term debt is prime + 1%. For us to float the cost of these drugs would materially impact our ability to provide quality patient care to our community members. Since we are basically break-even, government funding would need to be increased to compensate for the cost of short-term debt. Field Response 1. COST TO COVERED ENTITY Site Profile 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1a. Current 340B Administrative Costs Page 1 of 24 340B Rebate Intake Form i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. We estimate the annual cost of short-term debt to cover the cost of 340B drugs would be $40k+ which is more than we can absorb. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. ii. Describe the methodology and assumptions used to develop these estimates. Assume $45k+/month x 7% interest. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 2 of 24 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 24 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Page 4 of 24 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. We can't absorb. Government reimbursement would need to increase to pay for the interest expense. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 5 of 24 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 6 of 24 340B Rebate Intake Form i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 7 of 24 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. The recurring increased interest expense would be ~$40k per year. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). The losses we are incurring in reduced patient volume due to federal ICE activities prevents us from having the capacity to pilot this program. As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 8 of 24 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. We have HIV and other patients who depend on us. These patients may not have access to alternative sources of the drugs they need for survival. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 9 of 24 340B Rebate Intake Form 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. 10 calendar days for a government agency to respond would be amazing but doubtful. Also this would be very to our lean accountant staff time to handle this additional responsibility. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. Page 10 of 24 340B Rebate Intake Form 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Once per month ACH pulls. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. Page 11 of 24 340B Rebate Intake Form 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3. Rebate Denials Process Page 12 of 24 340B Rebate Intake Form 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4. Data Collection By Covered Entities Page 13 of 24 340B Rebate Intake Form 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. Page 14 of 24 340B Rebate Intake Form 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5. Duplicate Discount Prevention Page 15 of 24 340B Rebate Intake Form 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. Page 16 of 24 340B Rebate Intake Form 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 17 of 24 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 18 of 24 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 19 of 24 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 20 of 24 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 21 of 24 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 22 of 24 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 23 of 24 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 24 of 24
HRSA-2026-0001-2071Medical University of South Carolina2026-04-20T04:00Z57,723 chars
See attached file(s) 1 NOTE: THE SECTIONS OF THE MODEL COMMENT LETTER HIGHLIGHTED IN YELLOW ARE FOR HOSPITALS TO INSERT THEIR NAMES AND ANY ORGANIZATION-SPECIFIC INFORMATION. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Medical University Hospital Authority (MUSC Health) based out of Charleston, South Carolina, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on MUSC Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which MUSC Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. MUSC Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates 2 to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that MUSC Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require MUSC Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, MUSC Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. One-time startup costs: ~$400,000 in implementation/contractual fees and labor hours Ongoing, annual costs: ~300,000 in contractual fees and labor hours Key cost drivers: o increased staffing o diverting current staff o IT systems o third-party vendors o compliance activities o labor hours o process for challenging denials o legal reviews o training o consulting services Key functions that will contribute to the above: o claims processing o data submission o reconciliation/chasing down rebates o audit support Staffing Impacts Under a Potential 340B Rebate Program. MUSC Health does not currently have the staff needed to comply with a Rebate Program. To comply with the abrupt changes to the program, we would require at least 2 additional full-time employees 3 in addition to new relationships with third-party organizations who can create a solution for the complexities we will undoubtably experience. Based on current hiring practices and the need for experienced personnel, it would take us three months to onboard a new full- time employee. The current estimate of only 5 hours per week does not account for the IT build required to create data that doesnt currently exist. It does not account for the delay that we currently experience through the ESP and Beacon platforms. Lastly, it does not account for the claim volume associated with the changes that are being proposed; the 25 drugs proposed generated hundreds of thousands of claims per year that would need to be audited, verified, submitted, and cleared through the process. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. MUSC Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. New or Modified IT Systems, Software, and Data Infrastructure Required Implementation of a potential 340B Rebate Model Pilot Program would require significant modifications and/or new investments across multiple systems, including: 1. Split-Billing Software Reconfiguration: Existing split-billing platforms are designed to identify 340B-eligible transactions and support purchasing at the point of sale under the upfront discount model. These systems would require substantial redesign to support rebate tracking, claim-level rebate eligibility determination, rebate accumulation, submission workflows, reconciliation processes, and exception management. 2. Electronic Health Record (EHR) and Revenue Cycle System Modifications: Significant changes would be required to extract, normalize, and transmit new data elements needed to support rebate claims, including linking drug administration records, charge data, payer information, and potentially claims-level adjudication data. 3. Third-Party Administrator (TPA) Infrastructure Enhancements: Because our TPA does not currently receive a direct data feed from our EHR for medical claims data, new interfaces or data exchange mechanisms would need to be developed. In the absence of automated interfaces, manual data extraction, formatting, validation, and transmission processes would be required. 4. Rebate Management and Reconciliation Tools: New systems or software modules would likely be needed to track rebate submissions, monitor manufacturer payments, reconcile discrepancies, manage disputes, and support audit readiness. 4 5. Data Warehouse and Reporting Infrastructure: Additional analytics and data storage infrastructure would likely be needed to support expanded reporting, monitoring, compliance oversight, and record retention associated with a rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 1. Data Collection by Covered Entities The assertion that a potential 340B Rebate Model Pilot Program would not impose new data-related burdens on covered entities is inaccurate. MUSC Healths current data collection processes are designed to support compliance under the existing upfront discount model, not a post-purchase rebate mechanism. While certain data elements may exist across current systems or in limited formats shared through vendor relationships, those data are not collected, integrated, validated, or maintained in a manner that would support routine rebate administration without substantial additional burden. 2. Current Data Collection, Maintenance, and Validation MUSC Health currently collects, maintains, retains, and validates data related to 340B Program participation through a combination of internal systems and third-party vendor support. This includes data maintained within split-billing software, the electronic health record (EHR), pharmacy systems, wholesaler purchasing records, and other revenue cycle or operational systems. Third-party administrators (TPAs) and other vendors support key functions such as eligibility determinations, accumulation, compliance monitoring, and auditing. Importantly, these systems and vendor relationships are structured to support the current 340B operational model, including diversion prevention, duplicate discount controls, and program compliance. They are not designed to support the additional claim-level data collection, aggregation, transmission, and reconciliation demands that would be required under a rebate model. 3. Changes Required Under a Rebate Model A potential 340B Rebate Model Pilot Program would materially change current data collection activities and create both one-time and ongoing burdens. 5 One-time changes would likely include system modifications, interface development, data mapping, workflow redesign, and development of new processes to capture and transmit data elements required for rebate submissions. Ongoing changes would include continued data extraction, formatting, validation, submission, reconciliation, dispute resolution, and expanded auditing and compliance oversight. These would represent recurring operational burdens, not temporary implementation activities. 4. Need to Pull Data from Multiple Systems and Manual Work Compliance with a rebate model would require pulling information from multiple internal systems that do not currently operate as a single integrated source for rebate administration. Relevant data may reside across the EHR, split-billing platforms, revenue cycle systems, payer claims systems, wholesaler data, and TPA platforms. Particularly for medical claims data, substantial manual work would likely be required. Our TPA does not have a direct data feed into our EHR for medical claims data, which means data extraction, formatting, validation, and transmission may need to occur through manual or semi-manual processes unless costly interfaces are developed. Additional manual effort would also likely be required to resolve discrepancies, manage exceptions, and reconcile manufacturer rebate payments. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force MUSC Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. 1. Payment Timing and Potential Cash Flow Impacts A potential 340B Rebate Model Pilot Program would create significant cash flow disruption and financial risk for MUSC Health by replacing the current upfront discount model with a delayed reimbursement model. Under the existing 340B structure, discounts are realized at the point of purchase, which allows covered entities to manage cash flow predictably and preserve resources that support patient care, compliance infrastructure, and operations. A rebate model would reverse that structure and require covered entities to front the full acquisition cost of drugs while awaiting repayment of discounts owed under statute. 2. Cash Flow Impact and Financial Risk 6 Payment timing under a rebate model, including payment within 10 calendar days of submission of a complete claim, would still affect cash flow. Even relatively short delays would require MUSC Health to finance the gap between drug purchase and rebate receipt, effectively extending interest-free financing to manufacturers. Given the scale and volume of 340B purchases, even brief delays could create significant working capital strain, reduce liquidity, and introduce operational risk. Further, the risk is not limited to routine timing delays. A rebate model introduces additional risk associated with claim disputes, denials, incomplete submissions, data mismatches, manufacturer processing delays, and payment variability. These factors could extend payment beyond nominal timelines and create uncertainty not present under the current upfront discount model. 3. Sufficiency of Cash on Hand/Liquidity Risks While MUSC Health manages liquidity prudently, the question is not simply whether sufficient cash exists to absorb a rebate model in theory, but whether covered entities should be required to use their liquidity to finance manufacturers statutory discount obligations. Diverting cash to float manufacturers could affect working capital management, reduce financial flexibility, and impair resources otherwise used to support operations, capital planning, and patient services. 4. Potential Impact on Bond Covenants and Financial Covenants A rebate model could create risk related to bond covenants or other financial covenants to the extent it adversely affects liquidity metrics, days cash on hand, or other financial ratios that may be monitored by creditors, rating agencies, or financing agreements. Even where direct covenant violations may not be immediate, the introduction of sustained working capital pressure and liquidity volatility could create financial risk that does not exist under the current model. 5. Change in Payment Timing Compared to Current Wholesaler Arrangements A rebate-based model would materially alter payment timing compared to current wholesaler arrangements. Today, the 340B discount is realized upfront at purchase. Under a rebate model, MUSC Health would pay the full acquisition cost upfront, then await reimbursement later. That is a fundamental shift in payment timing, not simply an administrative variation. 6. Response to the Assertion That Rebates Would Arrive Before Wholesaler Invoices Are Due The assertion that rebates would, in most instances, be paid before wholesaler invoices for WAC amounts are due should not be assumed to be true in practice. Wholesaler 7 payment terms, invoice cycles, claim submission timing, manufacturer processing, dispute resolution, and operational delays may not align in a way that reliably ensures rebate receipt precedes payment obligations. Moreover, even if such timing occurred in some instances, the model still introduces uncertainty and financial exposure that do not exist under an upfront discount structure. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that MUSC Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. 1. Impact of Incremental Administrative Costs The incremental administrative costs associated with implementing a 340B Rebate Model would divert already limited resources away from direct patient care and critical compliance infrastructure. These costs include investments in new information technology systems, additional staffing for claims reconciliation and dispute resolution, expanded auditing and oversight functions, and the working capital required to absorb delays between drug acquisition costs and rebate receipt. Rather than strengthening patient services, these expenditures represent administrative overhead imposed solely to accommodate a fundamentally different discount mechanism. Every dollar redirected toward managing a rebate model is a dollar unavailable for patient care, care coordination, clinical expansion, and community benefit programs currently supported through 340B savings. 2. What Our Hospital May No Longer Be Able to Do As a result of these additional administrative costs, MUSC Health may be forced to defer or scale back investments in ambulatory care expansion, pharmacy services growth, patient assistance programs, and technology enhancements designed to improve access and quality. Resources that would otherwise support care delivery innovation may instead be consumed by compliance infrastructure necessary to operationalize the rebate model. This could also limit our ability to recruit or retain clinical pharmacy staff, expand specialty pharmacy support, and maintain the same level of uncompensated or undercompensated care. 3. Patient Services That May Be Reduced or Cut A rebate model could jeopardize services funded or supported by 340B savings, including medication access programs, care management services, infusion support, specialty pharmacy services, outpatient clinical pharmacy programs, and programs designed to support vulnerable populations, including uninsured and underinsured patients. Reduced financial flexibility could also impact support services that improve adherence and outcomes, such as social work, patient navigation, and other wraparound services often essential to complex patient populations. 8 4. Critical Projects That May Need to Be Paused or Canceled Critical projects that may be delayed, paused, or canceled include pharmacy automation and compliance technology upgrades, expansion of outpatient clinical services, specialty pharmacy growth initiatives, and strategic investments intended to improve access in rural and underserved areas. Uncertainty surrounding whether HRSA will proceed with a rebate model has itself created challenges for financial and operational planning, requiring institutions to consider contingency planning for potential liquidity impacts, technology investments, and staffing needs before any final policy is established. That uncertainty can delay forward- looking investments, as organizations may be forced to preserve capital in anticipation of significant operational disruption. 5. Impact on Patients and the Community A rebate model is harmful because its effects extend far beyond administrative inconvenienceit threatens the financial structure that supports access to care for vulnerable patients. Increased costs, delayed rebates, and cash flow strain reduce hospitals capacity to sustain services that patients rely on today. In practical terms, this may mean reduced access to medications, fewer support services, longer wait times, slower expansion of needed services, and fewer resources available to meet growing community health needs. For medically complex, low- income, rural, and underserved patients, these impacts can translate directly into delayed treatment, poorer outcomes, and increased barriers to care. 6. Hospital and Community Characteristics That Magnify the Harm MUSC Health serves a significant number of Medicare, Medicaid, and other vulnerable patients, making preservation of 340B savings especially important. As a major academic medical center and safety-net provider, MUSC Health also provides highly specialized and essential services that may not be readily available elsewhere, particularly for patients in rural and underserved communities who may otherwise face significant travel burdens to access comparable care. Reductions in services supported by 340B savings would therefore have outsized consequences not only for individual patients, but for access across the broader region we serve. 7. Impacts on Access to Drugs A rebate model may directly impair access to high-cost medications, particularly in outpatient and specialty settings. If hospitals must purchase drugs at full acquisition cost and wait for rebates, institutions may face significant cash flow pressures that affect inventory decisions, particularly for high-priced drugs. In practice, this could limit a hospitals ability to maintain stock of certain medications, create barriers to timely access for patients, or require difficult decisions about how to manage financial risk associated with expensive therapies. For patients dependent on timely access to these medications, those risks are significant and unacceptable. 9 Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. MUSC Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 1. Experience with Beacon Programs Our experience with the Beacon platform provides a practical example of the operational, legal, and compliance risks that can arise when third-party administrators are inserted into the 340B process without sufficient guardrails, transparency, or accountability. Participation in Beacon-related processes required significant administrative effort to meet evolving data submission requirements, support claims validation, and respond to operational issues that frequently arose. Rather than creating a streamlined pathway for compliance, these processes often introduce additional burden, uncertainty, and resource strain. 2. Problems with Beacons Terms and Conditions Beacons Terms and Conditions raised significant concerns because they often placed substantial obligations, liabilities, and operational responsibilities on covered entities without corresponding protections, clarity, or balanced accountability from the vendor or participating manufacturers. Certain provisions created uncertainty around data use, data ownership, confidentiality protections, dispute resolution processes, and responsibilities for errors or system failures. These types of contractual arrangements can force covered entities into accepting terms that raise compliance, privacy, and legal risks simply to preserve access to 340B pricing. 3. Problems with Beacons Shifting Data and Other Requirements A major challenge with Beacon was the instability and variability of data submission requirements. Requirements frequently shifted over time, creating operational inefficiencies, forcing repeated workflow changes, and requiring additional staff 10 resources to continually adapt processes. Changing standards for data elements, formatting, documentation, and validation expectations made compliance difficult and increased the risk of submission errors, delays, and disputes. These moving targets created unnecessary burden and made it difficult to establish sustainable, standardized operational processes. 4. Problems with Beacons Customer Service and Issue Resolution When problems arose, customer service and issue resolution were often inadequate to support the complexity and urgency of the issues involved. Delays in responses, lack of transparency in issue escalation, inconsistent guidance, and limited accountability for resolving disputes created additional operational strain. For a process tied to drug access, compliance, and potentially significant financial exposure, these service shortcomings are especially concerning. Covered entities should not bear the consequences of system failures or vendor responsiveness issues outside their control. 5. Recommendations for Guardrails in a Potential 340B Rebate Program If HRSA proceeds with any rebate model, strong guardrails are essential to mitigate privacy, security, operational, and compliance risks. At minimum, any model should include: a. Standardized, Stable Requirements: Data submission standards, claim validation requirements, and operational rules must be uniform, transparent, and not subject to frequent unilateral changes by manufacturers or third-party administrators. b. Strict Limits on Data Collection: Covered entities should only be required to submit the minimum data necessary to support rebate validation. Data requests should be narrowly tailored and should not permit unnecessary access to sensitive patient-level information. c. Robust Privacy and Security Protections: Any third-party administrator involved should be subject to strict data security requirements, HIPAA-compliant safeguards, clear limitations on data use, and prohibitions against using submitted data for purposes unrelated to rebate administration. d. Required Data Use and Confidentiality Agreements: Participation should require appropriate legal agreements, including Business Associate Agreements where applicable, data use agreements, confidentiality agreements, and clear contractual restrictions governing data ownership, access, retention, and permissible use. e. Prohibition on Unilateral Terms and Conditions: Manufacturers or third-party administrators should not be permitted to impose one-sided contractual terms as a condition of participation in the 340B program. f. Independent Oversight and Dispute Resolution: HRSA should establish clear oversight mechanisms, standardized dispute resolution processes, response time requirements, and accountability measures for third-party administrators and manufacturers. g. No Patient Care Disruption Due to Administrative Failures: Covered entities should not lose access to 340B pricing, rebates, or drug access because of system outages, vendor failures, disputes, or delays caused by third parties. 11 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on MUSC Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, MUSC Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow MUSC Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, John David Scheper Jr., PharmD System Director, 340B Program Operations MUSC Health NOTE: THE SECTIONS OF THE MODEL COMMENT LETTER HIGHLIGHTED IN YELLOW ARE FOR HOSPITALS TO INSERT THEIR NAMES AND ANY ORGANIZATION-SPECIFIC INFORMATION. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Medical University Hospital Authority (MUSC Health) based out of Charleston, South Carolina, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on MUSC Health that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which MUSC Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. MUSC Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that MUSC Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require MUSC Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, MUSC Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. One-time startup costs: ~$400,000 in implementation/contractual fees and labor hours Ongoing, annual costs: ~300,000 in contractual fees and labor hours Key cost drivers: increased staffing diverting current staff IT systems third-party vendors compliance activities labor hours process for challenging denials legal reviews training consulting services Key functions that will contribute to the above: claims processing data submission reconciliation/chasing down rebates audit support Staffing Impacts Under a Potential 340B Rebate Program. MUSC Health does not currently have the staff needed to comply with a Rebate Program. To comply with the abrupt changes to the program, we would require at least 2 additional full-time employees in addition to new relationships with third-party organizations who can create a solution for the complexities we will undoubtably experience. Based on current hiring practices and the need for experienced personnel, it would take us three months to onboard a new full-time employee. The current estimate of only 5 hours per week does not account for the IT build required to create data that doesnt currently exist. It does not account for the delay that we currently experience through the ESP and Beacon platforms. Lastly, it does not account for the claim volume associated with the changes that are being proposed; the 25 drugs proposed generated hundreds of thousands of claims per year that would need to be audited, verified, submitted, and cleared through the process. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. MUSC Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. New or Modified IT Systems, Software, and Data Infrastructure Required Implementation of a potential 340B Rebate Model Pilot Program would require significant modifications and/or new investments across multiple systems, including: Split-Billing Software Reconfiguration: Existing split-billing platforms are designed to identify 340B-eligible transactions and support purchasing at the point of sale under the upfront discount model. These systems would require substantial redesign to support rebate tracking, claim-level rebate eligibility determination, rebate accumulation, submission workflows, reconciliation processes, and exception management. Electronic Health Record (EHR) and Revenue Cycle System Modifications: Significant changes would be required to extract, normalize, and transmit new data elements needed to support rebate claims, including linking drug administration records, charge data, payer information, and potentially claims-level adjudication data. Third-Party Administrator (TPA) Infrastructure Enhancements: Because our TPA does not currently receive a direct data feed from our EHR for medical claims data, new interfaces or data exchange mechanisms would need to be developed. In the absence of automated interfaces, manual data extraction, formatting, validation, and transmission processes would be required. Rebate Management and Reconciliation Tools: New systems or software modules would likely be needed to track rebate submissions, monitor manufacturer payments, reconcile discrepancies, manage disputes, and support audit readiness. Data Warehouse and Reporting Infrastructure: Additional analytics and data storage infrastructure would likely be needed to support expanded reporting, monitoring, compliance oversight, and record retention associated with a rebate model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Data Collection by Covered Entities The assertion that a potential 340B Rebate Model Pilot Program would not impose new data-related burdens on covered entities is inaccurate. MUSC Healths current data collection processes are designed to support compliance under the existing upfront discount model, not a post-purchase rebate mechanism. While certain data elements may exist across current systems or in limited formats shared through vendor relationships, those data are not collected, integrated, validated, or maintained in a manner that would support routine rebate administration without substantial additional burden. Current Data Collection, Maintenance, and Validation MUSC Health currently collects, maintains, retains, and validates data related to 340B Program participation through a combination of internal systems and third-party vendor support. This includes data maintained within split-billing software, the electronic health record (EHR), pharmacy systems, wholesaler purchasing records, and other revenue cycle or operational systems. Third-party administrators (TPAs) and other vendors support key functions such as eligibility determinations, accumulation, compliance monitoring, and auditing. Importantly, these systems and vendor relationships are structured to support the current 340B operational model, including diversion prevention, duplicate discount controls, and program compliance. They are not designed to support the additional claim-level data collection, aggregation, transmission, and reconciliation demands that would be required under a rebate model. Changes Required Under a Rebate Model A potential 340B Rebate Model Pilot Program would materially change current data collection activities and create both one-time and ongoing burdens. One-time changes would likely include system modifications, interface development, data mapping, workflow redesign, and development of new processes to capture and transmit data elements required for rebate submissions. Ongoing changes would include continued data extraction, formatting, validation, submission, reconciliation, dispute resolution, and expanded auditing and compliance oversight. These would represent recurring operational burdens, not temporary implementation activities. Need to Pull Data from Multiple Systems and Manual Work Compliance with a rebate model would require pulling information from multiple internal systems that do not currently operate as a single integrated source for rebate administration. Relevant data may reside across the EHR, split-billing platforms, revenue cycle systems, payer claims systems, wholesaler data, and TPA platforms. Particularly for medical claims data, substantial manual work would likely be required. Our TPA does not have a direct data feed into our EHR for medical claims data, which means data extraction, formatting, validation, and transmission may need to occur through manual or semi-manual processes unless costly interfaces are developed. Additional manual effort would also likely be required to resolve discrepancies, manage exceptions, and reconcile manufacturer rebate payments. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force MUSC Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Payment Timing and Potential Cash Flow Impacts A potential 340B Rebate Model Pilot Program would create significant cash flow disruption and financial risk for MUSC Health by replacing the current upfront discount model with a delayed reimbursement model. Under the existing 340B structure, discounts are realized at the point of purchase, which allows covered entities to manage cash flow predictably and preserve resources that support patient care, compliance infrastructure, and operations. A rebate model would reverse that structure and require covered entities to front the full acquisition cost of drugs while awaiting repayment of discounts owed under statute. Cash Flow Impact and Financial Risk Payment timing under a rebate model, including payment within 10 calendar days of submission of a complete claim, would still affect cash flow. Even relatively short delays would require MUSC Health to finance the gap between drug purchase and rebate receipt, effectively extending interest-free financing to manufacturers. Given the scale and volume of 340B purchases, even brief delays could create significant working capital strain, reduce liquidity, and introduce operational risk. Further, the risk is not limited to routine timing delays. A rebate model introduces additional risk associated with claim disputes, denials, incomplete submissions, data mismatches, manufacturer processing delays, and payment variability. These factors could extend payment beyond nominal timelines and create uncertainty not present under the current upfront discount model. Sufficiency of Cash on Hand/Liquidity Risks While MUSC Health manages liquidity prudently, the question is not simply whether sufficient cash exists to absorb a rebate model in theory, but whether covered entities should be required to use their liquidity to finance manufacturers statutory discount obligations. Diverting cash to float manufacturers could affect working capital management, reduce financial flexibility, and impair resources otherwise used to support operations, capital planning, and patient services. Potential Impact on Bond Covenants and Financial Covenants A rebate model could create risk related to bond covenants or other financial covenants to the extent it adversely affects liquidity metrics, days cash on hand, or other financial ratios that may be monitored by creditors, rating agencies, or financing agreements. Even where direct covenant violations may not be immediate, the introduction of sustained working capital pressure and liquidity volatility could create financial risk that does not exist under the current model. Change in Payment Timing Compared to Current Wholesaler Arrangements A rebate-based model would materially alter payment timing compared to current wholesaler arrangements. Today, the 340B discount is realized upfront at purchase. Under a rebate model, MUSC Health would pay the full acquisition cost upfront, then await reimbursement later. That is a fundamental shift in payment timing, not simply an administrative variation. Response to the Assertion That Rebates Would Arrive Before Wholesaler Invoices Are Due The assertion that rebates would, in most instances, be paid before wholesaler invoices for WAC amounts are due should not be assumed to be true in practice. Wholesaler payment terms, invoice cycles, claim submission timing, manufacturer processing, dispute resolution, and operational delays may not align in a way that reliably ensures rebate receipt precedes payment obligations. Moreover, even if such timing occurred in some instances, the model still introduces uncertainty and financial exposure that do not exist under an upfront discount structure. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that MUSC Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Impact of Incremental Administrative Costs The incremental administrative costs associated with implementing a 340B Rebate Model would divert already limited resources away from direct patient care and critical compliance infrastructure. These costs include investments in new information technology systems, additional staffing for claims reconciliation and dispute resolution, expanded auditing and oversight functions, and the working capital required to absorb delays between drug acquisition costs and rebate receipt. Rather than strengthening patient services, these expenditures represent administrative overhead imposed solely to accommodate a fundamentally different discount mechanism. Every dollar redirected toward managing a rebate model is a dollar unavailable for patient care, care coordination, clinical expansion, and community benefit programs currently supported through 340B savings. What Our Hospital May No Longer Be Able to Do As a result of these additional administrative costs, MUSC Health may be forced to defer or scale back investments in ambulatory care expansion, pharmacy services growth, patient assistance programs, and technology enhancements designed to improve access and quality. Resources that would otherwise support care delivery innovation may instead be consumed by compliance infrastructure necessary to operationalize the rebate model. This could also limit our ability to recruit or retain clinical pharmacy staff, expand specialty pharmacy support, and maintain the same level of uncompensated or undercompensated care. Patient Services That May Be Reduced or Cut A rebate model could jeopardize services funded or supported by 340B savings, including medication access programs, care management services, infusion support, specialty pharmacy services, outpatient clinical pharmacy programs, and programs designed to support vulnerable populations, including uninsured and underinsured patients. Reduced financial flexibility could also impact support services that improve adherence and outcomes, such as social work, patient navigation, and other wraparound services often essential to complex patient populations. Critical Projects That May Need to Be Paused or Canceled Critical projects that may be delayed, paused, or canceled include pharmacy automation and compliance technology upgrades, expansion of outpatient clinical services, specialty pharmacy growth initiatives, and strategic investments intended to improve access in rural and underserved areas. Uncertainty surrounding whether HRSA will proceed with a rebate model has itself created challenges for financial and operational planning, requiring institutions to consider contingency planning for potential liquidity impacts, technology investments, and staffing needs before any final policy is established. That uncertainty can delay forward-looking investments, as organizations may be forced to preserve capital in anticipation of significant operational disruption. Impact on Patients and the Community A rebate model is harmful because its effects extend far beyond administrative inconvenienceit threatens the financial structure that supports access to care for vulnerable patients. Increased costs, delayed rebates, and cash flow strain reduce hospitals capacity to sustain services that patients rely on today. In practical terms, this may mean reduced access to medications, fewer support services, longer wait times, slower expansion of needed services, and fewer resources available to meet growing community health needs. For medically complex, low-income, rural, and underserved patients, these impacts can translate directly into delayed treatment, poorer outcomes, and increased barriers to care. Hospital and Community Characteristics That Magnify the Harm MUSC Health serves a significant number of Medicare, Medicaid, and other vulnerable patients, making preservation of 340B savings especially important. As a major academic medical center and safety-net provider, MUSC Health also provides highly specialized and essential services that may not be readily available elsewhere, particularly for patients in rural and underserved communities who may otherwise face significant travel burdens to access comparable care. Reductions in services supported by 340B savings would therefore have outsized consequences not only for individual patients, but for access across the broader region we serve. Impacts on Access to Drugs A rebate model may directly impair access to high-cost medications, particularly in outpatient and specialty settings. If hospitals must purchase drugs at full acquisition cost and wait for rebates, institutions may face significant cash flow pressures that affect inventory decisions, particularly for high-priced drugs. In practice, this could limit a hospitals ability to maintain stock of certain medications, create barriers to timely access for patients, or require difficult decisions about how to manage financial risk associated with expensive therapies. For patients dependent on timely access to these medications, those risks are significant and unacceptable. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. MUSC Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Experience with Beacon Programs Our experience with the Beacon platform provides a practical example of the operational, legal, and compliance risks that can arise when third-party administrators are inserted into the 340B process without sufficient guardrails, transparency, or accountability. Participation in Beacon-related processes required significant administrative effort to meet evolving data submission requirements, support claims validation, and respond to operational issues that frequently arose. Rather than creating a streamlined pathway for compliance, these processes often introduce additional burden, uncertainty, and resource strain. Problems with Beacons Terms and Conditions Beacons Terms and Conditions raised significant concerns because they often placed substantial obligations, liabilities, and operational responsibilities on covered entities without corresponding protections, clarity, or balanced accountability from the vendor or participating manufacturers. Certain provisions created uncertainty around data use, data ownership, confidentiality protections, dispute resolution processes, and responsibilities for errors or system failures. These types of contractual arrangements can force covered entities into accepting terms that raise compliance, privacy, and legal risks simply to preserve access to 340B pricing. Problems with Beacons Shifting Data and Other Requirements A major challenge with Beacon was the instability and variability of data submission requirements. Requirements frequently shifted over time, creating operational inefficiencies, forcing repeated workflow changes, and requiring additional staff resources to continually adapt processes. Changing standards for data elements, formatting, documentation, and validation expectations made compliance difficult and increased the risk of submission errors, delays, and disputes. These moving targets created unnecessary burden and made it difficult to establish sustainable, standardized operational processes. Problems with Beacons Customer Service and Issue Resolution When problems arose, customer service and issue resolution were often inadequate to support the complexity and urgency of the issues involved. Delays in responses, lack of transparency in issue escalation, inconsistent guidance, and limited accountability for resolving disputes created additional operational strain. For a process tied to drug access, compliance, and potentially significant financial exposure, these service shortcomings are especially concerning. Covered entities should not bear the consequences of system failures or vendor responsiveness issues outside their control. Recommendations for Guardrails in a Potential 340B Rebate Program If HRSA proceeds with any rebate model, strong guardrails are essential to mitigate privacy, security, operational, and compliance risks. At minimum, any model should include: Standardized, Stable Requirements: Data submission standards, claim validation requirements, and operational rules must be uniform, transparent, and not subject to frequent unilateral changes by manufacturers or third-party administrators. Strict Limits on Data Collection: Covered entities should only be required to submit the minimum data necessary to support rebate validation. Data requests should be narrowly tailored and should not permit unnecessary access to sensitive patient-level information. Robust Privacy and Security Protections: Any third-party administrator involved should be subject to strict data security requirements, HIPAA-compliant safeguards, clear limitations on data use, and prohibitions against using submitted data for purposes unrelated to rebate administration. Required Data Use and Confidentiality Agreements: Participation should require appropriate legal agreements, including Business Associate Agreements where applicable, data use agreements, confidentiality agreements, and clear contractual restrictions governing data ownership, access, retention, and permissible use. Prohibition on Unilateral Terms and Conditions: Manufacturers or third-party administrators should not be permitted to impose one-sided contractual terms as a condition of participation in the 340B program. Independent Oversight and Dispute Resolution: HRSA should establish clear oversight mechanisms, standardized dispute resolution processes, response time requirements, and accountability measures for third-party administrators and manufacturers. No Patient Care Disruption Due to Administrative Failures: Covered entities should not lose access to 340B pricing, rebates, or drug access because of system outages, vendor failures, disputes, or delays caused by third parties. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on MUSC Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, MUSC Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow MUSC Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, John David Scheper Jr., PharmD System Director, 340B Program Operations MUSC Health
HRSA-2026-0001-2072Meritus Medical Center2026-04-20T04:00Z41,908 chars
Please see attached Meritus Medical Center 11116 Medical Campus Road Hagerstown, MD 21742 Phone 301-790-8000 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Meritus Medical Center, a private non-profit community health system, located in Western Maryland, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is: no. As explained below, any rebate mechanism will impose enormous costs and burdens on Meritus Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Meritus Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Meritus Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 2 we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Meritus Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Meritus Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Meritus Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Estimated Incremental Costs One-Time (Startup) Costs Estimated total: $150,000 $300,000+ Key Cost Components One-Time (Startup) Costs Estimated: $150,000 $300,000+ IT / EHR Development & Reporting Build of custom reports and data extraction tools to capture claims-level data across mixed-use areas, child sites, in-house retail pharmacies, and contract pharmacies. Estimated: $75,000 $150,000 TPA & Vendor Implementation Data feed development, workflow redesign, and vendor setup fees required to support rebate submission. Estimated: $25,000 $75,000 Legal, Compliance, and Training Contracting updates, policy development, regulatory interpretation, and staff training to support new workflows. Estimated: $20,000 $45,000 External Consulting (as needed) Support for 340B compliance and operational design. Estimated: $20,000 $50,000 Ongoing Annual Costs Estimated: $200,000 $400,000+ Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 3 Staffing ($160,000 $230,000 annually) Addition of 1.0 FTE pharmacist (340B Coordinator) and expansion of 0.5 FTE technician to full-time. Existing staff across pharmacy, IT, and finance will also need to divert time from core responsibilities, creating operational inefficiencies. IT & Data Management ($25,000 $75,000 annually) Ongoing maintenance of reporting infrastructure, data validation, troubleshooting, and system updates. TPA / Vendor Fees ($25,000 $75,000 annually) Recurring costs for claims processing, data submission, and rebate-related support, with variability based on volume and complexity. Claims Processing & Reconciliation (4055+ hours/week) Includes data extraction, submission to rebate platforms (e.g., Beacon), payment reconciliation, denial management, and resubmissionrepresenting a full-time operational workload. Compliance & Audit Support ($10,000 $30,000 annually) Internal auditing, audit preparation, and monitoring for duplicate discounts and compliance risks. Activities Driving These Costs Incremental costs are driven by the need to support entirely new administrative functions, including: Claims-level data extraction and submission Rebate tracking and payment reconciliation Denial management and appeals TPA coordination and oversight IT system customization and maintenance Compliance monitoring and audit preparation Under the current upfront discount model, these activities are either minimal or non-existent. The rebate model fundamentally transforms the program into a claims-based administrative system, significantly increasing operational complexity. Impact of Covering Up to 25 Drugs While the rebate model may initially apply to up to 25 drugs under the Inflation Reduction Act, this limitation does not significantly reduce administrative burden: Each drug may be used across multiple care settings Mixed-use and billing variability require manual validation for each claim Data submission and reconciliation processes remain the same regardless of drug count Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 4 As a result, the administrative infrastructure required must be built to support full program complexity, not just a limited drug list. Comparison to 340B Savings The administrative costs outlined above will directly erode the financial benefit of the 340B Program. Incremental annual administrative costs of $200,000 $400,000+ These costs represent a significant portion of savings generated by the affected drugs As emphasized by 340B Health, shifting to a rebate model reduces the efficiency of the program and diverts resources away from patient care services. The 340B Rebate Model introduces substantial new administrative and financial burdens that far exceed those associated with the current upfront discount model. These costs include significant one-time investments, ongoing staffing and vendor expenses, and increased compliance and financial risk. The rebate mechanism fundamentally alters the structure of the 340B Program, transforming it into a resource-intensive claims adjudication system. For Meritus Medical Center, these changes will require considerable new investment and will directly reduce the resources available to support patient care and community health services. Staffing Impacts Under a Potential 340B Rebate Program. Meritus Medical Center does not currently have the staffing, operational infrastructure, or information technology support required to comply with a 340B Rebate Model Pilot Program. Implementation would require both the addition of new full-time employees and the reallocation of existing clinical staff from direct patient care to administrative functions. Impact on Staffing and Work Reallocation Implementation of a rebate model would require: 1.0 FTE Pharmacist (340B Coordinator) new position Increase of existing 0.5 FTE 340B Technician to 1.0 FTE In the absence of these additional resources, current pharmacy leadership would need to shift significant time away from patient care activities including regulatory compliance and patient safety, operational and financial management and improvement of pharmacy programsto perform administrative rebate-related functions. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 5 Additionally, the current 340B technician supports frontline operations by covering technician callouts and assisting with medication dispensing during peak patient volumes. Transitioning this role to full-time administrative responsibilities would reduce staffing flexibility and negatively impact medication turnaround times and patient care throughput. Roles, Responsibilities, and Functions 340B Pharmacist / Coordinator (1.0 FTE) This position would oversee all aspects of rebate program implementation and compliance, including: Development of standard workflows to operationalize the rebate model Revision and maintenance of policies and procedures Coordination with internal legal counsel for contracting requirements Engagement with external compliance consultants Collaboration with IT and EHR reporting teams to extract, validate, and format claims- level data for submission to the Beacon platform, including: o Mixed-use medical claims o Child site claims o In-house retail pharmacy claims (2 locations) Coordination with Third Party Administrators (TPAs) to establish submission workflows Oversight of internal audits, denied claims, and revenue recovery processes 340B Technician (increase from 0.5 to 1.0 FTE) This role would support the operational execution of the rebate model, including: Weekly extraction of claims data from the EHR across: o Mixed-use areas o Child sites o In-house retail pharmacies o Contract pharmacies Formatting and submission of claims data to the Beacon platform Ongoing monitoring and reconciliation of submitted claims Identification, investigation, and resubmission of denied claims Estimated Workload and Time Burden The operational requirements of the rebate model significantly exceed the estimate provided by the Health Resources and Services Administration of 5 hours per week. Estimated weekly workload includes: Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 6 Data extraction, validation, and formatting: 1520 hours/week Claims submission and coordination with TPAs: 810 hours/week Denial management, reconciliation, and resubmission: 1015 hours/week Internal coordination (IT, legal, compliance, reporting): 510 hours/week Total estimated workload: 4055+ hours per week, representing a full-time operational function rather than a marginal administrative increase. Hiring Timeline and Operational Readiness Due to the specialized expertise required for 340B program management, Meritus Medical Center anticipates a 612-month timeframe to recruit, hire, and train a qualified pharmacist with 340B experience. Beyond staffing, additional time will be required for: Workflow design and validation IT system build and testing Staff training and competency development Alignment with TPAs and external stakeholders Full operational readiness is expected to exceed 12 months. Information Technology and System Limitations Current hospital systems are not designed to support claims-level rebate adjudication. Existing EHR functionality qualifies 340B eligibility based on medication administration, not billing data Significant manual data extraction, manipulation, and validation would be required Additional IT resources or system enhancements would be necessary to support ongoing operations This creates a highly manual and resource-intensive process that increases the risk of error and inefficiency. Financial Impact Implementation of the rebate model would introduce significant unfunded costs, including: 1.0 FTE Pharmacist: approximately $130,000$180,000 annually (salary and benefits) 0.5 FTE Technician increase: approximately $30,000$50,000 annually These expenses would directly offset 340B savings, which are intended to support patient care services. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 7 Additionally, the rebate model introduces: Cash flow delays due to lag between drug purchase and rebate receipt Revenue uncertainty related to denied or disputed claims Increased administrative costs associated with tracking and recovering payments As emphasized by 340B Health, shifting to a rebate-based model transfers financial risk from manufacturers to covered entities. Compliance and Audit Risk The complexity of claims-level rebate processing significantly increases compliance risk, including: Potential for duplicate discounts (e.g., Medicaid and manufacturer rebates) Increased likelihood of data submission errors Greater exposure to manufacturer disputes and audit findings These risks require additional oversight and auditing resources, further increasing administrative burden. Expansion of Existing 340B Administrative Burden The administrative requirements of the 340B program have already expanded significantly and now include: Manufacturer-specific data submission requirements Management of contract pricing access and reinstatement Revenue recovery from incorrect manufacturer payments Development of customized reporting across multiple platforms The rebate model represents a fundamental shift from a purchasing program to a claims-based adjudication system, further compounding existing administrative complexity. Limiting the rebate model to a subset of drugs under the Inflation Reduction Act does not meaningfully reduce operational burden due to the complexity of billing pathways, mixed-use settings, and site-of-care variability. The assumption that implementation would require only 5 additional hours per week is a significant underestimation. The rebate model introduces a sustained, resource-intensive administrative framework requiring dedicated full-time staffing, substantial IT support, and ongoing financial and compliance oversight. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 8 Meritus Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Required IT Systems and Infrastructure Changes Implementation of a 340B Rebate Model Pilot Program would require substantial modifications and additions across multiple systems. 1. EHR Reporting and Data Extraction Enhancements Current electronic health record (EHR) functionality is not designed to produce the claims-level data required for rebate submission. To comply with a rebate model, Meritus would need to build custom reports and data extraction tools to identify drug utilization tied to specific patient encounters, billing-related data elements such as payer and claim status, and site-of-care distinctions including mixed-use areas, child sites, retail pharmacies, and contract pharmacies. In addition, Meritus would need to reconcile clinical administration data with billing and claims data, which are housed in separate systems and not natively linked for this purpose. These capabilities do not exist today and would require significant internal IT development and ongoing maintenance. 2. Data Integration and Transformation Infrastructure The rebate model requires transforming internal data into formats required by external platforms such as Beacon and third-party administrators (TPAs). This would require development of data mapping and transformation logic, creation of interfaces or manual processes to transmit data to TPAs, and ongoing validation to ensure data accuracy and completeness. Currently, TPAs do not have direct data feeds into our EHR, requiring manual extraction, formatting, and submission of data files for medical claims. 3. TPA and Vendor System Enhancements While TPAs are working toward supporting rebate model requirements, these capabilities are still evolving and not fully operational. Additional vendor configuration and testing will be required, and submission to rebate platforms such as Beacon carries additional costs and fees. Ongoing vendor dependency introduces variability in performance, timelines, and cost. Estimated Costs One-Time Costs (also referenced in prior section) Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 9 Estimated: $100,000 $225,000+ These costs include EHR report development and IT build, data integration and interface development, vendor setup and implementation fees, and system testing and validation. Ongoing (Recurring) Costs Estimated: $50,000 $150,000+ annually These costs include maintenance of custom reports and data infrastructure, IT staff support for troubleshooting and updates, vendor and TPA data processing and submission fees, and continuous enhancements as program requirements evolve. Challenges with Medical Claims Data Extraction A central challenge of the rebate model is the assumption that covered entities can readily access and submit medical claims-level data. This does not reflect how 340B programs are currently structured or operated. Under the current 340B model, eligibility is determined based on medication administration and accumulation logic rather than claims billing. Systems are designed to track dispensing and usage, not payer-specific claim adjudication. Accumulations occur when administered medications reach a threshold that allows replacement with 340B inventory. In contrast, the rebate model requires submission of claims-based data, including payer information, billing status, and reimbursement details. This requires alignment between clinical events and financial claims, which are not inherently connected with current workflows. Why This Creates Significant Burden Extracting claims-level data requires completely different data logic and reporting structures than current 340B processes. Clinical and billing systems operate independently, requiring manual reconciliation. No automated pipeline exists between the EHR and TPAs for this level of detail. As a result, data must be manually extracted, reformatted to meet submission requirements, validated for accuracy, and reconciled against rebate payments. This creates a highly manual, labor-intensive process that increases both cost and risk of error. Operational Reality Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 10 Even with significant IT investment, many aspects of the rebate model would remain manual due to variability in payer requirements, differences in billing practices across sites of care, and lack of standardized data formats across manufacturers and TPAs. Meritus Medical Center would need to maintain ongoing manual oversight and intervention, further increasing administrative burden. Conclusion The transition from an upfront discount model to a rebate-based system represents a fundamental shift in the technological and operational requirements of the 340B Program. Existing systems are not designed to support claims-level data extraction, reconciliation, and submission, requiring substantial new investment in IT infrastructure, vendor integration, and manual processes. The assumption that covered entities can readily provide medical claims data significantly underestimates the complexity of hospital systems and the resources required to bridge the gap between clinical operations and billing data. These system limitations create a costly, inefficient, and high-risk operational environment that will require sustained investment and oversight. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Current Data Collection Practices Currently, data collection related to the 340B Program is limited in scope and primarily supported by third-party administrators (TPAs). Data submitted through 340B ESP is specific to contract pharmacy claims only TPAs generate reports that can be downloaded and, in some cases, formatted for submission to ESP Some TPAs provide data in the required format, while others require manual reformatting by hospital staff Certain TPAs offer direct submission to ESP, often for an additional fee Data submission for contract pharmacies occurs on a biweekly basis Importantly, this process is limited to pharmacy (dispensing) claims and does not include broader medical claims data. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 11 Impact of a Rebate Model on Data Collection A 340B Rebate Model Pilot Program would significantly expand and fundamentally change current data collection requirements. Under a rebate model, Meritus would be required to collect and submit data across: Contract pharmacies Entity-owned retail pharmacies Child sites Mixed-use clinical areas While current processes partially support contract pharmacy reporting, no existing infrastructure supports data collection for the additional required areas. These changes would be ongoing, not one-time, and would require sustained operational and technical resources. Need for Multiple Systems and Manual Processes To comply with rebate model requirements, Meritus would need to extract and reconcile data from multiple internal systems, including: Medication administration records (clinical data) Billing and claims systems (financial data) These systems are not integrated in a way that supports claims-level rebate reporting. Key challenges include: 340B eligibility is currently determined based on medication administration and accumulation logic, not billing data TPAs do not have access to medical claims data, as this information is not part of the current 340B workflow Clinical and billing data reside in separate sections of the EHR, requiring new reporting build to extract data As a result, staff would need to: Create new reporting Reconcile differences between clinical and billing records Reformat data to meet submission requirements Validate and audit submissions for accuracy Challenges with Medical Claims Data Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 12 The rebate models reliance on medical claims data introduces significant complexity that is not present in the current 340B model. Medication administration and billing are fundamentally different data sets Extracting accurate claims-level data is difficult due to: o Variability in billing practices o Lack of direct linkage between administration and claims o Limitations in current reporting tools For example, medications administered multiple times per day are common in hospital settings. When attempting to extract this information from claims data, these administrations may appear as duplicate charges or be difficult to distinguish accurately, requiring manual review and interpretation. Response to HRSAs Burden Estimate The assertion by Health Resources and Services Administration that data required for a rebate model is already being collected and maintained, and therefore would not impose significant additional burden, is incorrect. Current data submitted through ESP is limited to contract pharmacy dispensing data, not medical claims data There is no existing infrastructure to collect, validate, and submit the expanded data set required under a rebate model TPAs are not currently equipped to access or process this level of data without significant new development Substantial manual work would be required to bridge gaps between clinical and billing systems Rather than leveraging existing processes, the rebate model would require entirely new data collection, validation, and submission workflows. Conclusion The data requirements of a 340B Rebate Model Pilot Program represent a significant departure from current 340B data practices. Existing systems, vendor relationships, and workflows are not designed to support claims-level data extraction and reporting across all required care settings. For Meritus Medical Center, compliance would require extensive manual processes, new system development, and ongoing resource investment. The burden associated with these data requirements is substantial and cannot be characterized as minimal or comparable to current data collection activities. Payment Timing and Potential Cash Flow Impacts Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 13 Unlike the existing upfront discount mechanism, any rebate mechanism will force Meritus Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Cash Flow and Financial Risk While Meritus Medical Center maintains sufficient liquidity to operationally withstand a rebate- based model, the proposed structure would materially alter the timing of cash flows by requiring the hospital to purchase drugs at wholesale acquisition cost (WAC) and await reimbursement of the 340B discount. This effectively forces covered entities to extend interest- free financing to pharmaceutical manufacturersan outcome that is inconsistent with the statutory intent of the 340B program to support, not burden, safety-net providers. Although the magnitude of these timing differences would not, in isolation, create immediate financial distress for our organization, the cumulative effect across high-cost drugs and growing program scope introduces unnecessary working capital volatility. More importantly, it diverts financial resources away from patient care and toward financing delays that benefit manufacturers. Liquidity Position Meritus Medical Center has sufficient cash on hand to withstand a rebate model. However, the relevant policy question is not whether individual hospitals can absorb the burden, but whether they should be required to do so. Requiring covered entities to deploy liquidity in this manner represents an inefficient reallocation of scarce healthcare resources and undermines the purpose of the 340B program. Debt Covenants and Financial Obligations A rebate model would not place the organization at risk of violating bond covenants or other financial obligations, nor do we maintain liquidity requirements that would be directly triggered by these timing differences. Nonetheless, the absence of covenant risk should not be interpreted as evidence that the model is financially appropriate. Even where compliance is maintained, the model introduces avoidable strain on cash management practices and reduces financial flexibility. Change in Payment Timing vs. Current Model Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 14 Under the current upfront discount model, 340B pricing is realized at the point of purchase, eliminating the need for post-transaction reconciliation and ensuring predictable, efficient cash flows. A rebate-based model fundamentally reverses this structure by introducing delays, administrative friction, and uncertainty around payment timing. Unlike wholesaler arrangements, where payment terms are clearly defined and predictable, a rebate model introduces dependency on manufacturer processing, adjudication, and potential disputes. This creates variability in timing and increases the likelihood of delayed or denied payments, further exacerbating cash flow uncertainty. Response to HRSA Assertion Regarding Timing The assertion that rebates would in most instances be paid before WAC invoices are due does not reflect operational reality. In practice: Wholesaler payment terms are fixed and enforceable (e.g., net 30 days), while rebate payments are contingent on submission accuracy, manufacturer validation, and potential dispute resolution. Even under an expedited framework, variability in processing, data reconciliation, and denial management creates a meaningful risk that rebates will not consistently precede invoice obligations. Any exception to this assumptionparticularly for high-cost drugsresults in the hospital carrying significant short-term financing exposure. Accordingly, reliance on this assumption is not appropriate for financial planning or policy design. Adequacy of a 10-Day Rebate Window A 10-day payment window, while seemingly expedient, does not fully mitigate the financial and operational concerns associated with a rebate model. Specifically: The 10-day clock is dependent on submission of a complete claim, a standard that introduces ambiguity and creates opportunities for delay through requests for additional documentation or claim denials. It does not account for disputes, resubmissions, or partial denials, all of which extend the effective reimbursement timeline. It fails to eliminate the fundamental issue: covered entities must still front the full WAC cost, creating an inherent financing obligation regardless of turnaround time. Even under a best-case scenario, the model still shifts working capital burden from manufacturers to providers. Therefore, while a 10-day window may reduce the duration of exposure, it does not address the underlying policy concern. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 15 Summary Position While the proposed rebate structure would not independently jeopardize Meritus Medical Centers financial stability, it introduces unnecessary cash flow inefficiencies, operational complexity, and financing burdens that are inconsistent with the purpose of the 340B program. The model effectively advantages manufacturers by providing float at the expense of covered entities and their patients. As such, reimbursement should occur at the point of sale consistent with the longstanding upfront discount modelrather than through a post-purchase rebate mechanism. Adverse Impacts of These Additional Costs and Burdens All these many different costs and burdens add up. Unfortunately, that means that Meritus Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The cumulative impact of the administrative, operational, and cash flow burdens associated with a rebate-based model will materially erode the value of the 340B program for Meritus Medical Center. While we will continue to prioritize maintaining core clinical services, these added costs will directly reduce the resources available to support critical patient programs, expand access, and address community health needs. Impact of Incremental Costs Even if not immediately visible through service eliminations, these incremental costs function as a direct reduction in 340B program effectiveness. Every dollar diverted to administrative complexity, delayed reimbursement, or dispute resolution is a dollar no longer available to support patient care. Over time, this diminishes our ability to stretch scarce federal resources, which is the central purpose of the 340B program. Programs and Services Affected Rather than abrupt service cuts, the more likely and equally harmful outcome is the degradation and constrained growth of essential programs, including: Social determinants of health (SDOH) initiatives such as loneliness outreach (care caller program), free or subsidized transportation, and food access programs (e.g., Food Farmacy) Charity care and financial assistance programs Community-based access initiatives, including mobile health services Expansion of outpatient services and access points for underserved populations Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 16 These programs are often the first to feel pressure because they rely heavily on 340B savings and operate on thin or negative margins. A rebate model reduces the funding stability necessary to sustain and grow these services. Deferred or Constrained Strategic Investments The added uncertainty and resource diversion associated with a rebate model will also impact long-term planning. Capital and strategic initiativessuch as expanding service lines, investing in community health infrastructure, or enhancing access in rural and underserved areaswill face increased scrutiny and potential delay. Even in the absence of immediate project cancellations, the organization will be forced to: Reprioritize investments toward core operations over community benefit programs Maintain higher liquidity reserves to manage reimbursement uncertainty, reducing funds available for reinvestment Slow or scale back planned expansions that depend on predictable 340B savings Impact of Policy Uncertainty on Financial Planning Uncertainty surrounding potential implementation of a rebate model has already introduced challenges into financial planning processes. Hospitals must now consider scenarios in which 340B savings are less predictable, more administratively costly, and delayed in realization. This uncertainty: Complicates budgeting and forecasting Discourages long-term commitments to new programs or services Creates a more conservative financial posture that limits innovation and community investment Impact on Patients and Community The ultimate impact of these changes falls on the patients and communities we serve. The 340B program enables hospitals like Meritus Medical Center to provide services that would otherwise be financially unsustainable. A rebate model weakens this capability in several ways: Reduced access to supportive services that address barriers to care, such as transportation and food insecurity Slower expansion of services in underserved and rural areas Greater financial pressure on safety-net programs, including charity care Potential limitations on access to high-cost therapies, particularly if reimbursement delays create financial risk in maintaining adequate inventory Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 17 Importantly, these impacts may not appear as immediate cuts but rather as missed opportunities to expand care, reduced program reach, and diminished support for vulnerable populations. This form of harm is less visible but equally significant. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Meritus Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Meritus Medical Center has long incorporated 340B savings derived from upfront discounts into its core financial planning, liquidity management, and strategic investment decisions. These savings are not treated as incidental revenue but as a predictable and essential funding stream that supports both ongoing operations and long-term community benefit initiatives. From a cash flow perspective, the upfront discount model allows the organization to: Accurately forecast cash-on-hand and working capital needs, as savings are realized at the point of purchase rather than delayed through a reconciliation process Maintain stable liquidity levels without needing to reserve additional capital to account for reimbursement timing uncertainty Avoid incremental borrowing or internal reallocation of funds to cover temporary financing gaps On an annual basis, 340B savings are directly embedded into: Operating budgets, particularly for programs that serve vulnerable populations and operate at a financial loss Charity care and uncompensated care planning, enabling the hospital to sustain services for uninsured and underinsured patients Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 18 Community benefit programs, including social determinants of health initiatives such as transportation, food access, and care coordination In addition, 340B savings play a critical role in long-term strategic planning, including: Expansion of outpatient and community-based services Investment in mobile health programs and access points in underserved areas Facility upgrades, equipment replacement, and infrastructure improvements necessary to maintain quality care The predictability of upfront discounts is fundamental to these planning processes. A shift to a rebate model would introduce uncertainty in both timing and realization of savings, requiring the hospital to: Increase liquidity reserves to manage variability Adopt more conservative financial assumptions Potentially delay or scale back investments that depend on reliable 340B funding In this way, the current upfront discount structure is not merely an operational preference, it is a foundational element of financial stability and community investment strategy. Disrupting this model would weaken the hospitals ability to plan, invest, and sustain services at the level currently supported by the 340B program. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Meritus Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9 19 For all these reasons, Meritus Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Meritus Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Joshua Repac Chief Financial Officer Meritus Medical Center Hagerstown, MD Docusign Envelope ID: CCFF6A0A-AD08-4519-83C9-5F00651A2EA9
HRSA-2026-0001-2073Jay Wiley · West Monroe, LA, United States2026-04-20T04:00Z13,691 chars
See attached file(s) PUBLIC COMMENT SUBMISSION Agency: Health Resources and Services Administration (HRSA) Office: Office of Pharmacy Affairs (OPA) Docket: 340B Rebate Model Pilot Program Request for Information Commenter: Jay Wiley Date: April 19, 2026 Executive Summary I appreciate HRSAs continued leadership in strengthening the integrity and sustainability of the 340B Program. The intent of the proposed rebate modelto reduce duplicate discounts and improve program oversightis both appropriate and necessary. However, the proposed rebate-based approach risks introducing an additional post-adjudication process layer that may unintentionally perpetuate many of the challenges it seeks to resolve. These include administrative complexity, delayed payments, incomplete data validation, and continued risk of duplicate discounts due to reliance on retrospective reconciliation. An alternative policy and systems approach could be enabled that aligns more directly with HRSAs stated goals: real-time, integrated adjudication of all applicable prescription benefit streams at the point of sale. While this approach is not achievable under certain current policy and process constraints, modest adjustments to claim chronology, data validation requirements, and benefit coordination rules would enable this model within existing industry infrastructure. This framework builds upon capabilities already familiar within prescription benefit processing but extends them to coordinate multiple public and private benefit programs within a single, unified transaction. This approach: Prevents duplicate discounts before they occur Ensures complete and accurate data at the time of adjudication Reduces administrative burden across stakeholders Enables prompt payment timelines consistent with existing standards Provides full transparency to patients and program participants I respectfully encourage HRSA to consider incorporating these principles into the pilot design or evaluating them alongside the proposed rebate model. General Observations on the Proposed Rebate Model The proposed rebate model represents a thoughtful effort to address known issues in the current system. However, by design, it operates after the point of dispense, which introduces several structural limitations: Delayed validation of eligibility and data completeness Increased administrative burden for covered entities and manufacturers Extended payment timelines, potentially impacting covered entity cash flow Continued reliance on multi-step reconciliation processes Residual risk of duplicate discounts across overlapping programs These characteristics are not unique to the 340B programthey are common to systems that attempt to resolve eligibility and financial responsibility after the transaction has occurred. A more effective approach is to address these issues at the point of transaction, where eligibility, data validation, and benefit coordination can be enforced in real time. The primary barrier to this approach is not technological feasibility, but the sequencing and policy constraints that currently govern how and when benefits may be applied. Responses to Specific RFI Questions 1. Flexibilities to Maximize Efficiency and Efficacy for Manufacturers Efficiency and accuracy can be significantly improved by enabling 340B to function as a standardized prescription benefit within a unified adjudication framework, rather than as a separate post-dispense financial process. Flexibilities for consideration include: Real-time eligibility determination using defined data requirements aligned with existing electronic claim standards Automated sequencing of benefit application across multiple programs (e.g., 340B, MFP, Medicaid, commercial benefits) Standardized adjudication workflows consistent with current prescription processing infrastructure Automated payment facilitation mechanisms aligned with established industry practices These flexibilities would allow manufacturers to avoid duplicate discount liability with greater certainty, reduce reliance on retrospective reconciliation, and operate within predictable, auditable workflows. 2. Safeguards to Mitigate Unintended Impacts for Covered Entities The most effective safeguard is ensuring that benefits are determined and applied prior to or at the point of sale, rather than after dispensing. Benefits include: Elimination of extended payment delays, supporting covered entity financial stability Reduction in administrative burden associated with tracking and reconciling claims Improved predictability of reimbursement Alignment with existing prompt payment expectations for clean electronic claims In contrast, current rebate-based models inherently delay financial resolution and shift operational burden to covered entities. 3. Data and Reporting Elements Rather than expanding post-adjudication data requirements, a more effective approach is to require complete and validated data at the time of claim submission. This can be achieved by: Defining required data elements as mandatory for successful adjudication Enforcing data completeness through existing electronic validation processes Leveraging standardized claim frameworks to verify: o Patient eligibility o Provider eligibility o Covered entity relationships o Program-specific qualification criteria When data is validated in real time, data quality improves, auditability is strengthened at the claim level, and the need for retrospective correction is minimized. 4. Potential Implementation Issues A key challenge is the timeliness and accuracy of eligibility data, particularly regarding relationships between covered entities, providers, and pharmacies. To address this: Consider more frequent updates to centralized eligibility datasets Enable electronic validation of relationships during claim adjudication Reduce reliance on manual cross-referencing and delayed verification processes Additionally, requiring multiple parties to maintain and submit duplicative datasets introduces unnecessary administrative burden. Leveraging centralized, continuously updated data sources would improve both efficiency and accuracy. Advancing the Pilot: Toward an Integrated Model A modernized approach to prescription benefit processing can support the goals of the 340B program while addressing systemic inefficiencies. Core capabilities that could be enabled include: Identification of all applicable benefit programs from a single claim submission Intelligent sequencing of benefit application to avoid overlap Automated de-duplication across programs Real-time eligibility verification Consolidated payment facilitation workflows Delivery of a single, final adjudicated response to the dispensing pharmacy These capabilities could be achieved by leveraging existing infrastructure while enabling improved coordination across benefit programs. Patient Transparency and Experience An integrated, real-time approach enables clear, comprehensive transparency to the patient at or near the point of sale. As illustrated in the attached Explanation of Benefits example, this model enables: Visibility into each entity contributing to the cost of the prescription Clear identification of manufacturer contributions, plan contributions, and final patient responsibility A complete, claim-level financial breakdown delivered in a single, unified format This level of transparency is not achievable in a post-adjudication rebate model, where key financial elements are determined after the transaction is complete. Conclusion HRSAs objective to reduce duplicate discounts, improve oversight, and strengthen program integrity is well-founded. However, the introduction of an additional rebate-based process risks reinforcing the very challenges the pilot seeks to address. A policy-enabled, real-time, integrated adjudication approach offers a more direct and sustainable path forward by: Preventing duplicate discounts before they occur Ensuring data accuracy at the point of transaction Reducing administrative complexity Accelerating payments to covered entities Enhancing transparency for all stakeholders, including patients I respectfully encourage HRSA to consider incorporating these principles into the pilot design or evaluating them alongside the proposed rebate model to ensure the most effective long-term outcome for the program. ATTACHMENT 1 Technical Appendix: Integrated Prescription Benefit Adjudication Framework 1. Purpose This appendix describes a policy-enabled framework for improving prescription benefit coordination across multiple programs, including 340B, Medicare Drug Price Negotiation Program (MFP), Medicaid, and commercial benefit structures. The objective of this framework is to: Prevent duplicate discounts Improve data integrity and auditability Reduce administrative burden Enable timely and accurate payment flows Enhance transparency across stakeholders 2. Current System Limitations Under current program structures, multiple benefit streams operate independently and are often applied at different points in time. Common limitations include: Fragmented Processing: Benefit programs are adjudicated separately. Retrospective Reconciliation: Eligibility and financial responsibility determined after dispensing. Duplicate Discount Risk: Overlapping programs may duplicate benefits. Delayed Payments: Payment flows may take up to 90 days. Incomplete Data: Required data elements may be missing. 3. Proposed Framework Overview A coordinated adjudication framework can be enabled through policy adjustments that allow multiple benefit programs to be evaluated and applied within a single transaction workflow. Key Concept: A single prescription claim submission can be evaluated against all applicable benefit programs, with benefits applied in a defined and optimized sequence prior to final adjudication. 4. Functional Components 4.1 Centralized Claim Evaluation Patient eligibility across programs Provider and dispensing entity eligibility Applicable benefit programs 4.2 Benefit Identification and Sequencing Programs applied in cost-effective order Prevention of overlapping benefits Adherence to program rules 4.3 Real-Time Adjudication Immediate determination of financial responsibility Elimination of downstream reconciliation Enforcement of eligibility before approval 4.4 Automated De-Duplication Cross-program visibility Rule-based validation Prevention of duplicate discounts at source 4.5 Consolidated Response to Pharmacy Total reimbursement amount Final patient responsibility Confirmation of applied benefits 4.6 Payment Facilitation Alignment with electronic payment processes Predictable payment timelines Reduced reconciliation effort 5. Data Requirements and Validation Mandatory data elements for eligibility determination Real-time validation of patient, provider, and program criteria Outcome: Higher data integrity, improved auditability, and elimination of incomplete downstream data. 6. Eligibility Data Considerations More frequent updates to centralized datasets Electronic validation during adjudication Reduced reliance on manual datasets 7. Operational Benefits Covered Entities: Reduced administrative burden Faster and more predictable payments Elimination of rebate tracking complexity Manufacturers: Reduced duplicate discount risk Improved visibility into program participation Streamlined payment obligations Payers and Programs: Improved cost control Real-time visibility into claim-level activity Enhanced auditability and compliance Regulators: Automated enforcement of program rules Reduced reliance on retrospective audits Improved data quality and reporting 8. Implementation Considerations Flexibility in claim processing chronology Standardization of required data elements Authorization for real-time coordination Alignment with existing claim standards Key Constraint: The primary limitation is policy sequencing rules, not technology. 9. Summary Prevent duplicate discounts at transaction point Improve data accuracy Reduce administrative burden Accelerate payments Strengthen transparency and integrity 10. Informational Note (Optional Background Context) The concepts described in this appendix are informed by prior work in prescription benefit coordination and real-time adjudication methodologies. Certain aspects of multi-benefit integration, sequencing, and aggregation at the point of sale have been explored in existing intellectual property and technical frameworks. This appendix is provided solely to inform policy considerations and does not rely on or require adoption of any specific proprietary implementation. The intent is to illustrate a feasible direction for improving coordination across benefit programs using capabilities consistent with existing industry infrastructure. Prescription Claim Submit INPUT EVALUATION COORDINATION & PROCESSING OUTPUT Eligibility Determination (Patient / Provider / Product / Inv. / CE) Identify Applicable Benefits (340B, MFP, Medicaid, Commercial, Benefit Sequencing & Coordination (Rules-Based Ordering) De-Duplication Controls (Prevent Overlapping Discounts) Real-Time Benefit Adjudication (Apply Programs in Sequence) Final Aggregated Response (Single Output to Submitter) Payment Facilitation (Aligned to Adjudication)
HRSA-2026-0001-2074SpendMend LLC2026-04-20T04:00Z41,872 chars
See attached file. Thank you, Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: SpendMend LLC, offers independent 340B compliance audits and other operational support for 340B covered entities (CE). We have over 800 CEs as clients, spanning virtually every entity type and have been selected five times by Apexus as a Consultant Contributor to help provide education to the 340B CE community. We have supported over 200 HRSA audits of our clients and performed over 3000 mock audits to help them maintain compliance. We provide these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our organization strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our clients have reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. CEs could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Given the size of our client base, we have seen countless ways to operate 340B programs in a compliant manner. While there is great variability in how CEs operationalize their programs from physical inventory to virtual inventory, automated software to manual tracking, participation in data sharing program with manufacturers or not all programs we have supported are built around access to discounted prices at the time of purchase. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. Based on HRSAs initial proposal for a rebate model, we developed a playbook for clients to implement the initial pilot. For most of our clients, we estimated a minimum of 6 weeks of preparation time which would have required interdisciplinary support across the CE including legal, accounting/finance, pharmacy, IT and analytics. We recommend including legal assessment of the non-negotiable Terms & Conditions offered by the rebate software vendor; assessment, development, and quality assurance to develop the reporting capabilities to ensure accurate data is submitted; and development of new workflows such as data submission and reconciliation workflows to ensure proper payment. We also recommend at least six additional weeks after the initial data submission to monitor other changes which might be required. This included reassessing contract pharmacy contracts to reflect the new model, updating policies and procedures, and monitoring rebate denials. The denials could trigger additional activities such as assessing formulary decisions to determine the most cost-effective products and revising charity care policies to ensure that drugs with denied rebates would not be part of charity care plans (i.e., that the charity care policy did not include products ultimately purchased at WAC prices). All told, a covered entity could easily exceed 200 hours of project time depending on the complexity of their program and how readily reportable the data is. We believe that implementing any rebate model would incur similar administrative costs on CEs to begin participation. Additionally, there would be significant new resource requirements created that would be needed each month. The largest burden would fall on the smallest CEs, particularly those that are too small to utilize third party software to operationalize their 340B program. While the magnitude of the impact would vary by CE, all would be negatively impacted with new administrative burdens which could divert critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B CEs are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. We have clients in all 50 states, and this model seems to be the most efficient and effective way to ensure compliance with duplicate discount requirements. Importantly, this data sharing is done with a neutral party that is not affiliated with either CEs or manufacturers, improving the fairness and transparency of the process. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data in ways that have nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with improving manufacturers commercial interests. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Covered Entities to Make Upfront Purchases at Higher Prices and Prevent Some Eligible Patients from Accessing 340B Discounts We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that would have to be purchased at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed, and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, CEs would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. There are a number of real-world scenarios in which CEs will not only lose the benefit from 340B, but incur long term financial harm: Consider a Critical Access Hospital which must order a non-formulary medication to meet a patient need. They would pay the WAC price for that medication and may only dispense a single dose of the medication from the stock bottle. They may never use that medication again and would have to wait months, if not years, for the remaining product to expire before they could return the product via a reverse distributor for a partial refund. It is unlikely a single dose of the medication would offset the premium paid for the entire stock bottle under a rebate model. Alternatively, they could purchase the medication on their GPO account and preclude any possibility of realizing the 340B discount, even if the patient scenario would otherwise qualify. Converting from a retrospective replenishment model to a rebate necessarily must preclude some patients and CEs from receiving the 340B discounts. Under a replenishment model, purchases are made for eligible patients that have previously received the medications and becomes neutral inventory. However, under the rebate model, this neutral inventory and any other inventory that is on hand on the start date of the rebate model is not eligible for rebates because it was not purchased at WAC. Therefore, any 340B-eligible patients who receive inventory that was on hand at the start of the rebate model will be precluded from ever being able to access 340B discounted medications. While CEs continue to be statutorily responsible for maintaining compliance in their programs, a rebate model removes their authority to access 340B prices in accordance with that responsibility. Instead, that authority is given, not to HRSA or a neutral party, but ultimately to drug manufacturers or their agents. Simultaneously, this model creates new potential financial penalties for CEs which are not based on compliance with the statute but instead are based on appropriately staffing the technical infrastructure of the program to ensure timely and accurate submission of data which is not required under the statute. Transitioning to a rebate model would create substantial risk for any CE which operates a patient assistance program which uses 340B discounts to provide prescriptions to patients at no charge. Today they are guaranteed access to 340B discounts on those prescriptions, subject to their compliance with all rules and regulations. Under a rebate model, there is no guarantee that they will be able to access 340B discounts. Instead, they face a very real possibility that a data glitch, technical delay, or any other issue would result in them giving drugs away at no charge and paying the highest possible price for them WAC. This seems like significant risk that many safety net providers may not be willing to take. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care While we are not a covered entity and cannot estimate specific costs for our organization, our breadth of experience allows us to compare the impact a rebate model would have across many entity types, sizes, and locations. In many cases, the smallest CEs will have the largest negative impact from a rebate model. Small CEs often have manual, and even paper-based, processes for tracking eligibility. Many small CEs do not have programs which are large enough to use a TPA because the cost of the software will exceed the savings the CE realizes from 340B. These CEs will incur the largest administrative burden, needing to ensure they can digitize their records in compliance with the data submission requirements, do so in timely manner, and expend staff resources to regularly perform manual uploads of this data to realize their discounts. Any delays in this process will result in further financial harm to the organization due to the WAC premium they have paid to the manufacturers. This risk is particularly acute as staff at these small facilities often are juggling many disparate duties and have many competing priorities which increase the risk of delayed data submission. Alternatively, the CE could choose to incur the cost of implementing a TPA to automate the process, which would also divert those dollars away from patient care. There are also state-level variables which will disproportionately impact the costs and burdens across different geographies. For instance, wholesale purchases of medications are subject to a tax in the state of Minnesota. By requiring purchases at WAC, CEs in the state would be taxed on that price rather than 340B price thereby increasing the effective price they pay for 340B eligible drugs. Covered entities of all sizes would require additional oversight and staffing to ensure accurate data submission, payment, and financial reconciliation. This would likely require additional FTEs even for mid-sized covered entities. Based on our direct discussions with the software vendor that had been selected by manufacturers for the proposed 340B rebate model, to reconcile claims-level detail a separate report would need to be downloaded for each NDC dispensed from each unique pharmacy/dispensing location. The vendor reported that there was no functionality to automate, schedule, or aggregate these reports; a human would need to login and manually trigger each one. With 84 NDCs included in the initial pilot proposal , this work would be substantial. For a mid-sized FQHC with 10 locations and 10 contract pharmacies, they would have 20 dispensing locations, each of which would require 84 different reports to be downloaded every month. Assuming just 30 seconds to run, download, and save each report, this CE would have incurred 7 hours per month to simply get access to the data needed to reconcile payments. With the data downloaded, they would then need to aggregate and analyze it, which would incur additional hours. As another example of how this work could balloon, consider a large health system with 10 CEs, each of which has a mixed use pharmacy, an in-house pharmacy, and 15 contract pharmacies. It would need to download 14,280 reports which at 30 seconds per report would take 119 hours per month 0.75 FTE - before doing any work to reconcile the data. Even if these technical report generation shortcomings of the vendor were addressed, the resources required to reconcile potentially hundreds of thousands of claims per month would be significant. With mixed-use data being at the dose level, even small 340B program has a significant volume of claims. We also have direct experience working on behalf of covered entities with vendors in the market which currently support manufacturers contract pharmacy restrictions. Our experiences collaborating with the vendor who supports both contract pharmacy restrictions and Maximum Fair Price (MFP) refunds suggest that many claims will be incorrectly rejected and require substantial time to correct. In our early work supporting clients with the MFP process, we are seeing nearly up to a 40% error rate in the system identifying 340B claims. The data required to dispute the claim is not readily available for most CEs which means each dispute can take up to 10 minutes to analyze and collect the data by hand. While technology could make this process more efficient, CEs would need to invest resources to purchase or develop it. Claims submission for contract pharmacy is similarly rife with inefficiencies and errors. CEs build their processes and systems to qualify claims based on HRSAs longstanding interpretation of the statute and the 1996 patient definition. However, the rules enforced by the manufacturers vendor add stipulations such as a 45-day window which are not supported by the statute or any guidance issued by HRSA. This leads to discrepancies between what the CEs believe they can purchase (based on their TPA) and what the manufacturer believes they can purchase (based on their software). Reconciling these discrepancies requires multiple hours per month per CE and often the result is that the CE is not able to access 340B pricing for 340B-eligible patients. A rebate model would suffer the same problems, but a financial penalty as opposed to just lost savings when eligible claims do not meet the arbitrary additional requirements imposed by manufacturers. Furthermore, we have seen a significant increase in the number of instances where pricing is temporarily removed from accounts which should have it since the advent of the contract pharmacy. For instance, we recently supported a client who lost 340B pricing on multiple accounts for 5 days. The wholesaler reported this was due to errors in the files it received from the manufacturer. These files have become much more complex as manufacturers try to toggle pricing across all possible 340B accounts; glitches like are the natural, yet largely unforeseen, consequence of this added complexity. HRSA needs to improve its oversight of manufacturers to ensure that glitches like this are identified and appropriately addressed in its audits of manufacturers because they ultimately represent failure of the manufacturer to meet its obligations under the statute. A rebate model will create additional complexity in the system, and we expect new unforeseen issues to arise, further increasing the need for HRSA ensure the statute is followed. The current manufacturer vendor system also significantly reduces transparency in the 340B program. Software changes which impact the ability of CEs to access 340B prices are implemented with no prior communication. The detailed logic and checks the software performs are not communicated to all 340B stakeholders; this was particularly acute in preparation for the previously proposed rebate model. Our questions to the software vendor about how certain common scenarios would be managed were not, or could not, be answered even by senior staff. The vendor also refuses to share official notices from manufacturers on how they are complying with various state contract pharmacy laws with non-CEs, including us acting as their agent. This restriction directly requires CEs to expend resources to communicate with the software vendor instead of the agents working on their behalf. While proponents of a rebate model may claim that it would increase transparency in the program, our experience suggests that it will decrease transparency in a way that can hide instances where eligible patients lose access to 340B discounts. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that CEs have sufficient information to address the denial. Any data clearinghouse needs to be a neutral party with full transparency and rules If a data clearinghouse is implemented, it must be a neutral party which implements and manages it. Given the current level of dispute between various stakeholders in the system, a vendor who is aligned more closely with any given stakeholder will be viewed skeptically by the others. A neutral party could maintain transparency and balance interests in a way that a vendor with perceived conflicts of interest ever could. While HRSA has a role in approving any overall plans, the nuance of the program makes it impossible to predefine every possible scenario. A neutral party is the only way to address those details in a way that all stakeholders can have faith or confidence in. Thank you for considering our comments. Sincerely, Robert Nahoopii, PharmD, MS SVP Pharmacy Services SpendMend LLC Page 1 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: SpendMend LLC, offers independent 340B compliance audits and other operational support for 340B covered entities (CE). We have over 800 CEs as clients, spanning virtually every entity type and have been selected five times by Apexus as a Consultant Contributor to help provide education to the 340B CE community. We have supported over 200 HRSA audits of our clients and performed over 3000 mock audits to help them maintain compliance. We provide these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our organization strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our clients have reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. CEs could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Given the size of our client base, we have seen countless ways to operate 340B programs in a compliant manner. While there is great variability in how CEs operationalize their programs from physical inventory to virtual inventory, automated software to manual tracking, participation in data sharing program with manufacturers or not all programs we have supported are built around access to discounted prices at the time of purchase. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. Page 2 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com Based on HRSAs initial proposal for a rebate model, we developed a playbook for clients to implement the initial pilot. For most of our clients, we estimated a minimum of 6 weeks of preparation time which would have required interdisciplinary support across the CE including legal, accounting/finance, pharmacy, IT and analytics. We recommend including legal assessment of the non-negotiable Terms & Conditions offered by the rebate software vendor; assessment, development, and quality assurance to develop the reporting capabilities to ensure accurate data is submitted; and development of new workflows such as data submission and reconciliation workflows to ensure proper payment. We also recommend at least six additional weeks after the initial data submission to monitor other changes which might be required. This included reassessing contract pharmacy contracts to reflect the new model, updating policies and procedures, and monitoring rebate denials. The denials could trigger additional activities such as assessing formulary decisions to determine the most cost-effective products and revising charity care policies to ensure that drugs with denied rebates would not be part of charity care plans (i.e., that the charity care policy did not include products ultimately purchased at WAC prices). All told, a covered entity could easily exceed 200 hours of project time depending on the complexity of their program and how readily reportable the data is. We believe that implementing any rebate model would incur similar administrative costs on CEs to begin participation. Additionally, there would be significant new resource requirements created that would be needed each month. The largest burden would fall on the smallest CEs, particularly those that are too small to utilize third party software to operationalize their 340B program. While the magnitude of the impact would vary by CE, all would be negatively impacted with new administrative burdens which could divert critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B CEs are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to Page 3 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. We have clients in all 50 states, and this model seems to be the most efficient and effective way to ensure compliance with duplicate discount requirements. Importantly, this data sharing is done with a neutral party that is not affiliated with either CEs or manufacturers, improving the fairness and transparency of the process. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data in ways that have nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with improving manufacturers commercial interests. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Covered Entities to Make Upfront Purchases at Higher Prices and Prevent Some Eligible Patients from Accessing 340B Discounts We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that would have to be purchased at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed, and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, CEs would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. There are a number of real-world scenarios in which CEs will not only lose the benefit from 340B, but incur long term financial harm: Consider a Critical Access Hospital which must order a non-formulary medication to meet a patient need. They would pay the WAC price for that medication and may only dispense a single dose of the medication from the stock bottle. They may never use that medication again and would have to wait months, if not years, for the remaining product to expire before they could return the product via a reverse distributor for a partial refund. It is unlikely a single dose of the medication would offset the premium paid for the entire stock bottle under a rebate model. Alternatively, they could purchase the medication on their GPO account and preclude any possibility of realizing the 340B discount, even if the patient scenario would otherwise qualify. Converting from a retrospective replenishment model to a rebate necessarily must preclude some patients and CEs from receiving the 340B discounts. Under a Page 4 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com replenishment model, purchases are made for eligible patients that have previously received the medications and becomes neutral inventory. However, under the rebate model, this neutral inventory and any other inventory that is on hand on the start date of the rebate model is not eligible for rebates because it was not purchased at WAC. Therefore, any 340B-eligible patients who receive inventory that was on hand at the start of the rebate model will be precluded from ever being able to access 340B discounted medications. While CEs continue to be statutorily responsible for maintaining compliance in their programs, a rebate model removes their authority to access 340B prices in accordance with that responsibility. Instead, that authority is given, not to HRSA or a neutral party, but ultimately to drug manufacturers or their agents. Simultaneously, this model creates new potential financial penalties for CEs which are not based on compliance with the statute but instead are based on appropriately staffing the technical infrastructure of the program to ensure timely and accurate submission of data which is not required under the statute. Transitioning to a rebate model would create substantial risk for any CE which operates a patient assistance program which uses 340B discounts to provide prescriptions to patients at no charge. Today they are guaranteed access to 340B discounts on those prescriptions, subject to their compliance with all rules and regulations. Under a rebate model, there is no guarantee that they will be able to access 340B discounts. Instead, they face a very real possibility that a data glitch, technical delay, or any other issue would result in them giving drugs away at no charge and paying the highest possible price for them WAC. This seems like significant risk that many safety net providers may not be willing to take. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care While we are not a covered entity and cannot estimate specific costs for our organization, our breadth of experience allows us to compare the impact a rebate model would have across many entity types, sizes, and locations. In many cases, the smallest CEs will have the largest negative impact from a rebate model. Small CEs often have manual, and even paper-based, processes for tracking eligibility. Many small CEs do not have programs which are large enough to use a TPA because the cost of the software will exceed the savings the CE realizes from 340B. These CEs will incur the largest administrative burden, needing to ensure they can digitize their records in compliance with the data submission requirements, do so in timely manner, and expend staff resources to regularly perform manual uploads of this data to realize their discounts. Any delays in this process will result in further financial harm to the organization due to the WAC premium they have paid to the manufacturers. This risk is particularly acute as staff at these small facilities often are juggling many disparate duties and have many competing priorities which increase the risk of delayed data submission. Alternatively, the CE could choose to incur the cost of implementing a TPA to automate the process, which would also divert those dollars away from patient care. Page 5 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com There are also state-level variables which will disproportionately impact the costs and burdens across different geographies. For instance, wholesale purchases of medications are subject to a tax in the state of Minnesota. By requiring purchases at WAC, CEs in the state would be taxed on that price rather than 340B price thereby increasing the effective price they pay for 340B eligible drugs. Covered entities of all sizes would require additional oversight and staffing to ensure accurate data submission, payment, and financial reconciliation. This would likely require additional FTEs even for mid-sized covered entities. Based on our direct discussions with the software vendor that had been selected by manufacturers for the proposed 340B rebate model, to reconcile claims-level detail a separate report would need to be downloaded for each NDC dispensed from each unique pharmacy/dispensing location. The vendor reported that there was no functionality to automate, schedule, or aggregate these reports; a human would need to login and manually trigger each one. With 84 NDCs included in the initial pilot proposal , this work would be substantial. For a mid-sized FQHC with 10 locations and 10 contract pharmacies, they would have 20 dispensing locations, each of which would require 84 different reports to be downloaded every month. Assuming just 30 seconds to run, download, and save each report, this CE would have incurred 7 hours per month to simply get access to the data needed to reconcile payments. With the data downloaded, they would then need to aggregate and analyze it, which would incur additional hours. As another example of how this work could balloon, consider a large health system with 10 CEs, each of which has a mixed use pharmacy, an in- house pharmacy, and 15 contract pharmacies. It would need to download 14,280 reports which at 30 seconds per report would take 119 hours per month 0.75 FTE - before doing any work to reconcile the data. Even if these technical report generation shortcomings of the vendor were addressed, the resources required to reconcile potentially hundreds of thousands of claims per month would be significant. With mixed-use data being at the dose level, even small 340B program has a significant volume of claims. We also have direct experience working on behalf of covered entities with vendors in the market which currently support manufacturers contract pharmacy restrictions. Our experiences collaborating with the vendor who supports both contract pharmacy restrictions and Maximum Fair Price (MFP) refunds suggest that many claims will be incorrectly rejected and require substantial time to correct. In our early work supporting clients with the MFP process, we are seeing nearly up to a 40% error rate in the system identifying 340B claims. The data required to dispute the claim is not readily available for most CEs which means each dispute can take up to 10 minutes to analyze and collect the data by hand. While technology could make this process more efficient, CEs would need to invest resources to purchase or develop it. Claims submission for contract pharmacy is similarly rife with inefficiencies and errors. CEs build their processes and systems to qualify claims based on HRSAs longstanding interpretation of the statute and the 1996 patient definition. However, the rules enforced by the manufacturers vendor add stipulations such as a 45-day window which are not supported by the statute or any guidance issued by HRSA. This leads to discrepancies between what the CEs believe they can purchase (based on their TPA) and what the manufacturer believes they Page 6 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com can purchase (based on their software). Reconciling these discrepancies requires multiple hours per month per CE and often the result is that the CE is not able to access 340B pricing for 340B-eligible patients. A rebate model would suffer the same problems, but a financial penalty as opposed to just lost savings when eligible claims do not meet the arbitrary additional requirements imposed by manufacturers. Furthermore, we have seen a significant increase in the number of instances where pricing is temporarily removed from accounts which should have it since the advent of the contract pharmacy. For instance, we recently supported a client who lost 340B pricing on multiple accounts for 5 days. The wholesaler reported this was due to errors in the files it received from the manufacturer. These files have become much more complex as manufacturers try to toggle pricing across all possible 340B accounts; glitches like are the natural, yet largely unforeseen, consequence of this added complexity. HRSA needs to improve its oversight of manufacturers to ensure that glitches like this are identified and appropriately addressed in its audits of manufacturers because they ultimately represent failure of the manufacturer to meet its obligations under the statute. A rebate model will create additional complexity in the system, and we expect new unforeseen issues to arise, further increasing the need for HRSA ensure the statute is followed. The current manufacturer vendor system also significantly reduces transparency in the 340B program. Software changes which impact the ability of CEs to access 340B prices are implemented with no prior communication. The detailed logic and checks the software performs are not communicated to all 340B stakeholders; this was particularly acute in preparation for the previously proposed rebate model. Our questions to the software vendor about how certain common scenarios would be managed were not, or could not, be answered even by senior staff. The vendor also refuses to share official notices from manufacturers on how they are complying with various state contract pharmacy laws with non-CEs, including us acting as their agent. This restriction directly requires CEs to expend resources to communicate with the software vendor instead of the agents working on their behalf. While proponents of a rebate model may claim that it would increase transparency in the program, our experience suggests that it will decrease transparency in a way that can hide instances where eligible patients lose access to 340B discounts. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to Page 7 of 7 2680 Horizon Drive SE | Grand Rapids, MI 49546 | spendmend.com permit denials, HRSA should require manufacturers to provide specific details so that CEs have sufficient information to address the denial. Any data clearinghouse needs to be a neutral party with full transparency and rules If a data clearinghouse is implemented, it must be a neutral party which implements and manages it. Given the current level of dispute between various stakeholders in the system, a vendor who is aligned more closely with any given stakeholder will be viewed skeptically by the others. A neutral party could maintain transparency and balance interests in a way that a vendor with perceived conflicts of interest ever could. While HRSA has a role in approving any overall plans, the nuance of the program makes it impossible to predefine every possible scenario. A neutral party is the only way to address those details in a way that all stakeholders can have faith or confidence in. Thank you for considering our comments. Sincerely, Robert Nahoopii, PharmD, MS SVP Pharmacy Services SpendMend LLC
HRSA-2026-0001-2075Tyler Family Circle of Care2026-04-20T04:00Z7,293 chars
Please see the attached PDF for official comments from Tyler Family Circle of Care (dba Family Circle of Care) regarding the 340B Rebate Model Pilot Program (HRSA-2026-03042). r;;._MILY \_ Circle of Care if,\ IH F'J rR, April 20, 2026 Chantelle Britton Director of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Administrative Office 523 S. Fannin Avenue - Tyler, TX 75702 Phone: (903) 535-9041 I Fax: (903) 531-9490 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, On behalf ofTyler Family Circle of Care (dba Family Circle of Care, or FCC), I am writing to provide our perspective on the proposed 340B Rebate Model Pilot Program. While we appreciate HRSA's efforts to explore new program mechanics, we strongly urge the agency to exempt Community Health Centers (CHCs) from this model. For a safety-net provider like Family Circle of Care, which serves over 35,000 patients across Tyler, Jacksonville, and Athens, the transition to a rebate model introduces logistical and financial complexities that could unintentionally hinder our ability to provide care to our most vulnerable neighbors. I. Navigating the East Texas Healthcare Landscape Family Circle of Care is dedicated to providing essential pediatric, women's health, family medicine, dental, and psychiatric care. The vast majority of our patients are uninsured or live below the Federal Poverty Level, making 3408 access a cornerstone of our clinical model. Historically, our organization utilized a combination of internal Class D pharmacies and local independent pharmacies to meet our patients' pharmacy needs. However, as external pharmacy arrangements became more complex over the last five years, we made the proactive decision to invest in our own full-service in-house pharmacy to ensure a stable, affordable medication pipeline for our community. We are concerned that the rebate model, as proposed, would introduce new instabilities into this carefully built system that is nearing opening and implementation. II. Administrative Requirements and Workforce Allocation The shift from the current model of upfront 3408 pricing to a post-transaction rebate model would require a significant reallocation of our limited administrative resources: Staffing Demands: We estimate that FCC would need to hire at least one additional Full- Time Equivalent (FTE} Rebate Coordinator to manage the data uploads, claim tracking, and reconciliation processes required to ensure the program functions as intended. r;;._MILY \_ ci7cle of Care t ;.. ' CC J i? ' Administrative Office 523 S. Fannin Avenue - Tyler, TX 75702 Phone: (903) 535-9041 I Fax: (903) 531-9490 Technical Infrastructure: Implementation would require an estimated $25,000 to $50,000 in upfront IT costs to build the necessary interfaces between our Pharmacy Management System and various manufacturer platforms. Ongoing Maintenance: Beyond the initial setup, we anticipate significant ongoing maintenance and operational costs to manage these interfaces. Ensuring consistent data security, software compatibility, and API stability across multiple third-party platforms creates a permanent financial and technical drain on our organization. Operational Focus: As a CHC, our primary goal is to keep our staff focused on clinical outcomes. Redirecting funds and labor toward complex back-end rebate management creates a significant administrative hurdle that diverts resources away from patient- facing care. Ill. Financial Considerations and Liquidity Management CHCs operate with very limited financial reserves, making liquidity a primary concern when evaluating new procurement models: Upfront Capital Requirements: Based on our internal data, purchasing the ten selected pilot drugs at full Wholesale Acquisition Cost (WAC) would require an upfront capital increase of approximately $1.8 million to $2 million. Credit and Supply Chain Continuity: This requirement for increased upfront capital could lead to challenges with wholesaler credit limits. Any delay in the rebate reconciliation process could potentially impact our ability to maintain a consistent supply of medications for our patients. Reconciliation Risk: Even with a low rate of rebate denials or delays, a non-profit entity like FCC cannot easily absorb the resulting financial gaps. We estimate a potential unrecoverable loss of $85,000 annually if reconciliation processes do not align perfectly with our dispensing data. IV. The Disproportionate Financial Burden and Resulting Clinical Inequity The proposed model shifts the full financial and operational risk of the 3408 program onto non- profit safety-net providers. This creates a significant "risk imbalance" that is both structurally and ethically problematic: Mission-Driven Resource Allocation: As a non-profit organization, Family Circle of Care exists solely to serve our community. Every dollar we have is already appropriated toward medical care, dental services, and psychiatric support for the vulnerable. Asking a non-profit to bear the financial burden of a multi-million-dollar "rebate queue" is an extreme request that our budget is not designed to handle. r;;,_MILY \. Circle of Care I- ~,. r Administrative Office 523 S. Fannin Avenue - Tyler, TX 75702 Phone: (903) 535-9041 I Fax: (903) 531-9490 Unsustainability and Loss of Access: If FCC is forced to "float" the cost of expensive medications while awaiting a rebate, the resulting financial strain will inevitably lead to minimized access for our most vulnerable patients. We simply do not have the capital to subsidize these costs indefinitely, which may force us to limit the availability of certain therapies within our in-house and Class D pharmacies. The Risk of Suboptimal Clinical Alternatives: If our ability to provide the primary medications included in this pilot is hamstrung by financial strain, we may be forced to offer patients alternative drug therapies. This is fundamentally unfair; the quality of a patient's medical treatment should not be dictated by a provider's ability to manage a manufacturer's rebate timeline. Inherent Unfairness of Risk-Shifting: It is unreasonable to ask a safety-net provider to assume the risk of rebate denials, administrative errors, and liquidity delays. When our capital is tied up in a manufacturer's reconciliation queue, it creates an immediate and direct limit on our ability to provide for every patient we serve. The 3408 program is a vital tool that allows safety-net providers to "stretch scarce Federal resources." We believe the proposed rebate pilot introduces unnecessary risk and strain to an essential service. Family Circle of Care urges HRSA to protect the health of East Texans by exempting CHCs from this pilot, allowing us to remain focused on our mission of providing compassionate, unsurpassed care to our community. Sincerely, Kristen S. Harris, JD Chief Executive Officer 903-535-9041, Ext 1003 Kristen.Harris@txfcc.org For technical or pharmacy-specific inquiries, please contact: Judd Ramsey Pharmacy Director 903-567-9757 Judd.Ramsey@txfcc.org
HRSA-2026-0001-2076Spectrum Health Services, Inc.2026-04-20T04:00Z47,666 chars
See attached file(s) SpectrumHealth We Cam We Value. We Serve. April 20, 2026 Chantelle Britton Director Office o' Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Ms. Britton: Spectrum Health Services, Inc. (Spectrum) appreciates the Health Resources and Services Administration (HRSA) for extending the public comment opportunity to Community Health Centers (CHCs). This additional time has been critical to allowing our organization to conduct a comprehensive assessment of the significant operational and financial risks that the proposed rebate model poses to Spectrum. The 340B program is essential to CHCs' ability to provide care to the most vulnerable populations in our communities. However, shifting responsibility from manufacturers to safety-net providers through a rebate-based structure threatens to destabilize CHC pharmacy operations nationwide. National a.nalyses from the National Association of Community Health Centers (NACHC) dernonstrate that CHCs would face profound and far- reaching impacts. Summary of Financial and Operational Impact to Spectrum: The proposed 340B Rebate Model Pilot would impose severe and unsustainable financial strain on Spectrum's Community Health Centers (CHCs) with the following impacts: Increase in upfront annual drug spend (10 drugs): o From $1,723,734 (340B) to $4,817,741 (WAC) +$3,094,007 annually (180% increase) Increase in upfront annual drug spend: +$951,592 per year Projected annual fmancial losses from rebate denials (estimated 15% rate : o $146,331 Lost prompt-pay, volume, and sub-ceiling discounts (opportunity cost): $365,784 annually Entity-owned pharmacy losses (Year 1): o Estimated range $146,000 - $241,000 Contract pharmacy savings reduction: Spectrum Health Services, lnc. (Corporate Office) 5201 Haverford Avenue. Philadelphia. PA 19139 (215) 471-2761 vvww,SpectrumHS.org o Estimated $41,250 atmually Additional staffing costs (L0 FTE Pharmacy Coordinator): o Estimated $82,680 amninIly (salary + benefits) External vendor l consulting costs: o Estimated $39,000 annually One-time pharmacy software & IT implementation costs: o Estirnated $15,000 - $20,000 Additional administrative reporting burden: o Estimated at 1,200 staff hours annually Sliding fee discounts provided (at risk): o Estimated impact to uninsured patients - $230,581 Uninsured patients at risk of losing medication assistance: o Estimated 740 patients based on UDS data Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 rnillion in additionaI costs annually to manage the pilot. Spectrum is a 501(c)(3) non-profit Federally Qualified Health Center (FQHC) established in 1967. Its mission and purpose is to improve the health conditions for those we serve within our communities through the delivery ofprimary care and specialty and social services. Spectrum is focused on supporting the needs ofthe most vulnerable citizens residing in underserved communities within Philadelphia providing care regardless of a patient's ability to pay. Core services include medical, dental, behavioral health pharmacy, OB-GYN, podiatry, and other specialty care and services. Spectrurn provides a sliding fee scale based on family size and income. Accreditations include recognition by the National Committee for Quality Assurance (NCQA) as a Patient-Centered Medical Home (PCMH). I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense fmancial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turrnoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Spectrum, this means it will impact 13,408 patients representing approximately 83,412 340B prograrn claims annually. p'oIlowing the intent of the 340B Drug Pricing Program established in 1992 by Congress, Spectrum utilizes 340B savings by maintaining, improving, and expanding access to health services for vulnerable communities without additional cost to taxpayers. Some examples of those services at Spectrum include: Medication access through free delivery services Pharmacy-provided compliance packaging that results in patient medication cornpliance leading to improved health outcomes Prescription discount cards for uninsured patients Mobile screening programs (e.g., mammograms, dental, colorectal, blood pressure, etc.) Facility improvements including building and maintenance oftwo entity-owned pharrnacies located within our health centers extending our reach to patients needing access to pharmacy services. Leases and maintenance of medication coinpliance equipment for safe, compliant medication management systems in our clinics (e.g., Pyxis, Trumed, etc.) Leases and maintenance of diagnostic equipment (e.g., ultrasound) Nutrition and healthy cooking classes Food as Medicine Program Transportation support for patients Cornmunity health and welhess outreach programs Non-clinical patient support including case rnanagers, financial counselors, patient service representatives, communications/outreach managers, etc. We strongly urge IMSA to exempt CHCs frorn any rebate modeI to protect the financial stability of safety-net providers and ensure continucd access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program_ These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. ' Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(11:50-9, doi: 10.1097/JAC.0b013e31823c127b6. PhilID: 22156955. We are deeply concemed that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and. Eliquis are vital for patients with deep vein thrombosis, pulmonary embolisrn, and atrial fibrillation. For rnany of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLTZ inhibitors, such as Famiga and Jardiance would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent arnong our patients. Research has found that even a. 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(0 funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfdling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMC1D: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflorin or Placebo in Patients with Heart Failure. Circulation. httos://www ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health CHI-IS Puhlicatin No. PEP25-07-007, NSDUH Series F1-60). Center for Behavioral Heaith Statistics and Quality, Substance Abuse and IvIental Health Services Administration. Imps://www.samhsa.aav/data/data-we-collect/nsduh-national-surveydrug-use-and-health/nationa3-releases 5 Hauser RA. et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neural. 2022 Feb 23;13:773999. cloi: 10.3389/Theur2022.773999. MAID: 35280262; PMCID: PMC890684-1. 6 1025 UDA Data, HRSA (hrsa.gov) Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional worklorce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program, Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data subrnission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a phaimacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Spectrurn provided $230,581 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Spectrum conservatively anticipates initially needing additional 1.0 FTE as a result of the rebate model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Spectrum anticipates an initial increase of $39,000 to costs for external support vendors related to the rebate model. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implernenting new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-tirne equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing rnore than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Spectrum anticipates needing to increase program support by 1.0 FTE representing an annual impact in the first year of $82,680 including salary and benefits. In addition, our CHC anticipates a need for an increase in external vendor support services conservatively estimated at an additional 156 hours per year resulting in anticipated fees o $39,000. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or exp.ired drugs without rebate recovery. CHCs operate on razor-thin rnargins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy 'ills for the l 0 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated additional 1,200 hours annually will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Speetrutn urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving tirneIy and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if mamifacturers are allowed to select different software platforrns, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially, One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated $15,000-$20,000 one-time cost will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond irnplementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 13,408 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at S20,000 annually. 7 Internal NACHC assessment (99 responses). 8 1 bid. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technologic& disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharrnacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 4-8 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 20 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking rnodules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must rnonitor clairns across 22 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the North, Northeast, South and West Philadelphia and surrounding communities of Philadelphia, Pennsylvania with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be rnuch higher, depending on the software. n Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory 9 Vulnerability Index. Approach to Identify Pharmaev Deserts and kelstone Pharmacies I Pharman and Clinical Pharmacology JAMA Network Oven I JAMA Network '11ups-/Avww.healthaffairs.org./doi/absi10.1377/hlthaff.2024.00192?journalCode=h1thaff Internal NACHC survey data logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete adminisixative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicab]e to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and unti] they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would irnpose disproportionate administrative costs, software expenses, and cornpliance risks on CHCs without corresponding benefits to program integrity or federal oversight A. Financial Challenges Under the proposed 340B Rebate Model Pilot CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs.' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront, CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its irnpact on CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the RRSA-approved scope of the project. 12 In line with their rnission, CHCs offer flat or sliding-scale discounts on prescription 12 FIRSA FAQ drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Spectrum offers a Sliding Fee Discount Program to all who are unable to pay the full costs of services; three sliding fee scales have been adopted. Spectrum bases program eligibility on a person's ability to pay and will not discriminate based on age, gender, race, creed, disability, or national origin. The Federal Poverty Guidelines (FPA) http://aspe.hhs.gov/povertv, are used in creating and annually updating the Sliding Fee Schedule (SFS) to determine patient eligibility. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current Iv1FP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the IV1FP standard of 14 days from when the status is corrected. We are concemed that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC would be forced to take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and triclde down to patients. It is important to note that many CHCs are culTently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 13 Such discounts are subject to potential legal and contractual restrictions. httos://bphc.hrsa_gov/compliance/compliance- man ual/chapter94 footnote I 0 1411 ttos://enliven h ea th.co/b log/year-end-business-heal th-cheek-key-m etri cs-evety-phatmacy-ow ner-sho uld-rev iew margins. Below, you will fmd specific data demonstrating the significant increase in fmancial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the fmancial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volurne to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B thr 2025 purchases by NDC & volume, reflected in QI 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data subrnission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volurne, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited fmancial resources. Based on our organization's data, we estimate it would cost $4,817,741 to purchase these 10 drugs under the proposed rebate model. Ctu-rently, our organization spends $1,723,734 to purchase these same drugs at the 340B ceiling price. This represents a 180% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing dnigs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Spectrum anticipates needing to reduce: Essential Clinical Services: To ofEet the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Medication access through free delivery services httn://34013pricine.hrsamw 16 httoslAmw.cms.gov/flieskin/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezio.zip Pharmacy-provided compliance packaging that results in patient medication cornpliance leading to improved health outcomes Mobile screening programs (e.g., mammograms, dental, colorectal, blood pressure, etc.) Facility irnprovements including building and maintenance of two entity-owned pharmacies located within our health centers extending our reach to patients needing access to pharmacy services. Equipment and infrastructure o Leases and maintenance of medication compliance equipment for safe, compliant medication management in our clinics (e.g., Pyxis, Trumed, etc.) Leases and maintenance of diagnostic equipment (e.g., ultrasound) Community food donations Nutrition and cooking classes Food as Medicine Program Community health and weIlness outreach programs Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time a Pharrnacy Technician, a Pharmacy Intern, a Community Health Worker, a Behavioral Health Consultant, a Financial Counselor, etc., directly increasMg wait times for services and appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be cornpromi.sed. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 740 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, sorne CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Spectrum asserts that taking out a loan or an extended line of credit (which Spectrum currently does not have in place) to fund drug procurement is a high-risk strategy that places our organization in a state of "fmancial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payrnents, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Spectrum estimates its 2027 Annual Rebate Opportunity Cost to be approximately S365,784. This cost aggregates the estimated financial impact of rebate denials and loss of purchase di scounts. Spectrum estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $951,592. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients rely on Spectrum, the risk of our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Spectrum urges URSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a. significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. lfa rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 151/4 denial rate would result in a net annual loss of $146,331. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (A.AC) billing in fee-for-service Medicaid. This may 17 Application Process for the 340B Rebath Model Pilot Program, 2025-14619 (90 FR 36163) b ttos://www. federal regi ste r. gov /doc umen ts/2025/08/0 I /2025-14619 /34 Ob -pro gram-no t i ce-ap p i cat ion-process-for-th e-340b- rebate- model-o ilo t-pro gram lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges IfHRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. IIRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recornmendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claim-level documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that reIy on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a cornprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's incorne and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would t-iot be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Prograrn complia.nce, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340)3-related information annually through the Uniform Data Systern (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed inforrnation about the patients served by the program. Given the cornpliance infrastructure and strict statutory requirements already in place for CHCs, irnplementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate rnodel, the NCC approach would: Avoid cash-flovv and borrovving challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative hurden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Dupbcate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Spectrum strongly urges 'EISA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure liorn the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range ofdrugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Spectrum believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Spectrum appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Suzanne Brovvn, Director of Pharrnacy Services, sybrown@spectrumhs.org. Sincerely, Veronica Hill-Milbourne President and CEO Spectrum Health Services, Inc.
HRSA-2026-0001-2077Trillium Health2026-04-20T04:00Z16,143 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Trillium Health Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Trillium Health appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. The proposed 340B Rebate Model Pilot Program is a direct threat to Trillium Healths core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over 20 years, the 340B program has allowed Trillium Health to purchase outpatient medications at significantly reduced prices, allowing us to provide comprehensive services and affordable medications to thousands of low- income, uninsured, and underinsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce federal resources as far as possible. Instead, the proposed rebate model would place an immense financial burden on Trillium Health, which would have to pay an additional $22 million a year to purchase drugs upfront at the WAC price and hope to get reimbursed at the 340B price later. The upfront cost, combined with additional expenses that we would incur, would deplete our cash-on-hand, and it would directly affect our ability to serve the 14,500 vulnerable patients who rely on us for care. Trillium Health was founded as an HIV/AIDS clinic in 1989 during the height of the AIDS crisis. We became eligible for the 340B Prescription Drug Discount Program as a Ryan White Grantee (Parts B and C), and we maintained our eligibility when we became an FQHC Look-Alike in 2016 and a fully funded FQHC in 2025. Trillium Health uses 340B savings to provide discounted medications to patients, care management services (such as food, housing, and transportation), assistance with insurance eligibility and enrollment, support for HIV programming, peer navigation, and clinical pharmacists to help manage chronic diseases, and to close the gap between operational costs and reimbursement. The 340B Prescription Drug Discount Program has allowed us to serve more low-income, vulnerable patients and expand access to care in a medically underserved area. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and 2 collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027 and included in the proposed rebate model are used to manage chronic conditions prevalent in primary care settings, meaning that Trillium Healths patients will be disproportionately affected. Trillium Health serves a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses such as diabetes, hypertension, and obesity. This patient 3 population relies on affordable medications to manage these long-term conditions, and we are concerned that we would not be able to offer these medications for free or at significantly reduced prices due to the 340B rebates. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. If Trillium Health were required to pay WAC upfront each month, our monthly cash exposure would exceed $1.8 million - nearly depleting our $3 million in cash on hand and potentially putting the organization at serious financial risk. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. After invoicing, our primary wholesaler allows 15 days for payment, and secondary wholesalers allow for 15 and 90 days, respectively. The payment terms do not differ for 340B drugs. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We currently receive a discount for early payment from one secondary wholesaler if paid within 90 days. Our primary wholesaler also offers a discount, which is dependent on the terms and conditions of payment. State the average number of calendar days within which your organization typically remits payment under these contracts. Trillium Health typically remits payments under these contracts within 15 days. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Under a rebate model, it could take 65 days to receive payment after submitting a claim. If there are denials, disputes, or appeals, it could take 95 days to receive payment. Therefore, the estimated financing gap could be approximately 110 days. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and management costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in 4 technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. Under a rebate pilot program, Trillium Health would incur approximately $150,000 in one-time costs to prepare for 340B program management (i.e., purchasing new software, training staff, and legal review). Annual costs would be approximately $305,000. This includes 1.5 FTEs to review and process claims related to 60-90 prescriptions per month for the first 10 drugs. The staffing would cost an average of $65,000 per position per year plus 27% fringe. Describe the methodology and assumptions used for the estimates in the preceding question. These estimates were based on existing TPA contracts and current salaries for mid-range professionals. Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. The FTEs would be responsible for tracking 340B eligible prescriptions; submitting claims; booking and reconciling rebate receivables and cash receipts; and managing follow up on discrepancies, non-payments, and denials, including resubmission and reprocessing as needed. Comment on the impact of these incremental costs under your current operations. The additional costs will consume 6-7% of Trillium Healths current net savings from the 340B program. It will create a significant financial burden on the organization. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. The rebate model pilot would require additional full-time FTEs. If yes to the above, identify the anticipated number of additional FTEs. Trillium Health would need an additional 1.5 FTEs Describe their roles, responsibilities, and functions and indicate whether the FTEs would be temporary or permanent. These would be permanent positions responsible for pulling reports on rebateeligible drugs administered, submitting rebate claims, posting rebate payments, reconciling payments to expected amounts, and following up on discrepancies and denials. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential Rebate Model Pilot. We would utilize an outsourced IT system to implement a rebate pilot program. Provide estimated costs for system development, procurement, maintenance, or integration, and The recurring costs required for the development, procurement, maintenance, or integration needed to implement an IT system would be 5 specify whether any such costs would be one- time or recurring. approximately $150,000. In addition, it would cost approximately $25,000 for on-going legal review, staff training, and outside consultants. There would also be a $50,000 one-time cost for contract or process reviews. Discretely identify any additional costs not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered) and specify whether these costs are one- time or recurring. Trillium Health could lose an additional discount that was negotiated directly with a wholesaler, currently valued at over $1 million annually. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. In our experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems and challenges, which is why we need a neutral clearinghouse run by the federal government or a contractor. One of the primary challenges is the use of multiple vendors without consistent, unique identifiers across systems, making it difficult to determine where claims should be submitted. Additionally, each vendor requires a different workflow, increasing administrative burden and the risk of errors. As a result, the rebates received do not always align with expectations, complicating reconciliation and increasing dedicated staff time. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Christopher Woodring, Chief Pharmacy Officer, cwoodring@trilliumhealth.org. Sincerely, Jason Barnecut-Kearns President and CEO Trillium Health
HRSA-2026-0001-2078Vibrance Health2026-04-20T04:00Z19,602 chars
Please see letter below. SIS MN'S 1400,1,01V 1O HONOR GO0 Methodist Healthcare Ministries ne 4 ,A. F VIBRANCE 101 Avenue F North Bay City, Texas 77414 (979) 245-2008 Fax: (979) 314-7164 www.vibrancetx .org charrison@vibrancetx.orq Community Health Center Board of Directors Wright, Eric President, Bay City, TX Rodriguez, David Vice President, Boling, TX Johnson, Martha Treasurer Van Vleck, TX Rodriquez, Robert Secretary Bay City, TX Bartley, Reesa Wharton, Texas Fagan-Baker, Emily Palacios, TX Ferdinand, Mike Bay City, TX Figirova, Marisol El Campo, TX Humphries, Jim DDS Bay City, TX Kucera, Jennifer Van Vleck, TX April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Vibrance Health I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. Vibrance Health offers services in Matagorda and Wharton Counties which have a total population of 78,451 according to the US Census Bureau and are rural, low-incorne areas. Vibrance Health offers services in Family Medicine, Pediatrics, Women's Health Support Services, Behavioral Health, Gastroenterology, Ophthalmology, Dental, and Pharmacy. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Vibrance Health in particular, this means it will impact over 14,000 patients. The current Third-Party administration cost for the 340B program is $253,604.00 which does not include in-house administration costs. Our current 340B revenue supports our sliding fee scale, outreach and enrollment, non-reimbursable services, transportation for patients, our farm, delivery of our farm products to the community, our clinics, and our in-house pharmacy. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial Sanchez, Tasha stability of safety-net providers and ensure continued access to care for the most vulnerable Palacios, TX patients. Smith, Karen II. Administrative Complexities and Financial Challenges for CHCs Wharton, TX Watson, Adraylle El Campo, TX The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. IIRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. 340B Model Operation & Administrative Costs A refund model will require a significant increase in already-strained operation capabilities. Sliding Fee Discount: Vibrance Health provided $1,435,118.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Vibrance Health anticipates needing four additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Vibrance Health anticipates an increase of $80,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.1 Vibrance Health anticipates the need to hire two (2) full-time Rebate Coordinators, one (1) additional full-time Pharmacy Administrator, and one (1) full-time Accountant. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.2 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Vibrance Health anticipates the need to hire 4 additional full-time employees for a total cost (salary and benefits) of $348,000. In addition, Vibrance Health expects to pay an additional $80,000 for legal counsel fees, 340B consultant fees, and Third-Party Administration fees. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Vibrance Health anticipates increased administrative burden of 20 hours per pharmacy will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Vibrance Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 1 Internal NACHC assessment (99 responses). 2 Ibid. Pharmaci Software & Third-Partl Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data subrnission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Our organization estimates that $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $300,000.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Vibrance Health anticipates a cost of $15,000 to $30,000 in order to integrate with the complex new rebate structure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Vibrance Health anticipates an upfront cost of $50,000 for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 34 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 34 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Matagorda and Wharton 2 Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,3 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.4 A. Financial Challenges The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.5 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.6 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. CHC's, like Vibrance Health, make medicine more affordable through the 340B program by saving 20 to 50% off standard prices and passing those savings onto our patients, adjusting patient visits and medications based on a sliding fee scale, focusing on generic medications for our patients in order to offer the most cost-effective options, operating an in-house pharmacy in order to eliminate markups, purchasing medications in bulk with other clinics in order to increase our buying power and lower our per-unit costs, and by providing preventive and ongoing care to increase better disease control with less complications, fewer hospital visits, and less emergency prescriptions. In summary, CHC's make medicines more affordable by combining discounted drug purchasing, income-based pricing, smart prescribing, and patient support programs with a mission to prioritize access over profit. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. Based on our organization's data, we estimate it would cost $9,575,900 yearly to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,453,674 yearly to purchase these same drugs at the 340B ceiling price. This represents a 658% increase in upfront capital required for procurement. 3 Vulnerahilitv Index A, ,rroach to Identify Pharmacy Deserts and Keystone Pharmacies Pharmacy and Clinical Phannacoloev JAMA Network O:en JAMA Network 4 https://www.healthaffairs.orgicloi/abs/10.1377/hlthaff.2024.00192?journalCodehlthaff 5 HRSA FAQ 6 Such discounts are subject to potential legal and contractual restrictions. httos://bohc.hrsa.Roy/compliance/comrliance- manual/chaAer9#footnotel0 3 This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Vibrance Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our transportation for patients unable to drive to clinic and for our farm deliveries of healthy foods to our patients, Operating Hours: We anticipate needing to reduce our clinic hours by 8 to10 hours per week, specifically impacting our evening and weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" or additional staff we are forced to hire, we lose the ability to fund our dietician, our transportation driver, our administration department, and even our clinical staff, directly increasing wait times for clinic appointments (medical, dental, mental health, OB/GYN, etc.). Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our thousands of uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $20,000 annuallyfunds that are currently dedicated to our Mental Health clinic, transportation for patients and deliveries of farm foods, and opening and operating our second pharmacy. The Farmstead currently delivers and teaches patients how to grow and eat healthy foods. Without this program, patients will become more reliant on medications. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Vibrance Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 4 a. Financial Impact of Rebate Denials and Delays Vibrance Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.7 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $500,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Conclusion Vibrance Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Vibrance Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Vibrance Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nan Celeste Harrison at charrison@vibrancetx.org. Sincerely, Nan Celeste Harrison Vibrance Health 7 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://w\mfed era1regi sten goy/documents/2025/08/01/2025-14619/340b- ram-noti ce-applicatioft-zocess-for-the-340b- rebate-mode1-pi lot-program 5
HRSA-2026-0001-2079Adam Ellington · FL, United States2026-04-20T04:00Z11,494 chars
Dear Sir or Madam, Please see my attached comments. Regards Adam Ellington 340B Program Coordinator Baptist Health South Florida Dear Sir or Madam, I'm writing today to encourage you to NOT implement a 340B rebate program, but if you feel you must set up some sort of data upload/transparency program I also want to offer insights so that it is done fairly for all 340B participants. A 340B rebate program is not needed. Manufacturers say they need it at a basic level for MFP deduplication and/or Medicaid duplicate discount concerns. They already have methods for identifying MFP claims they believe to be 340B eligible, and OPAIS and state Medicaid agencies already have procedures for stopping Medicaid duplicate discounts. The manufacturers can operate within those guidelines for these two issues. And even if a new procedure was needed, there is no reason for it to be a rebate program that removes up-front 340B pricing. It could simply be data uploads with pricing removal being a penalty for CE's that fail to upload claims data. That last sentence leads me into my main points, because I think you are going to implement something. I just hope you listen to all stakeholders and implement something that actually works for the 340B program as a whole, to include CEs, patients, and manufacturers. If a claims upload process is deemed necessary the first point is that whatever vendor is chosen to handle the data needs to be selected by HRSA and/or CMS as a neutral third party, not selected by the manufacturers themselves. They currently use Beacon for ESP and MFP, and Beacon has shown themselves to be completely one-sided and not equipped to handle the necessary data. Beacon only exists to serve the needs of the manufacturers and to make life as difficult as possible for CE's and retail pharmacies. Beacon refuses to use appropriate data elements that would allow them to deduplicate claims, for reasons that they have never made clear. Their support staff is extremely unhelpful. Every problem is the fault of someone else, and they have no answers on how to fix the issues. They constantly provide text copy/pasted from manufacturer policy documents as answers to questions, and the staff seems to lack the experience to understand questions and concerns from hospitals trying to provide them the data they want. They are not equipped to handle something as large scale as a full claims upload process for all of the 340B program, even with only a limited catalog of medications. Please, if you decide to start a program, require companies to submit bids for a neutral third-party clearinghouse. I encourage you to accept feedback from CE's, software vendors, etc about the data elements you might include in the program. The last proposal from 2025 had two main issues. First, the data elements didn't allow for true deduplication. There was no PHI. If you simply combined the various elements that were there, such as NDC, claim #, MD NPI, date, etc you get an identifier that while likely to be unique, the chance of it being identified as a duplicate of a different hospitals claim is not zero. That means manufacturers would be able to deny claims where the same MD rounded on two different patients at two different hospitals, but if they order the same medication, and the patients have the same insurance, if that claim number happens to match (which is possible across two separate EMRs), Beacon will deny the claim. The program needs more STANDARD, but unique data elements for the claims. The second point about data elements (specific mainly to medical claims) is that manufacturers want data elements that are unnecessary, because they know that it will make it more difficult to pull the reports, and would give them extra reasons to deny valid claims. Things like HCPCS codes, payer ID codes, etc are not needed for something like this. But drug companies know that those elements are not part of a standard pharmacy or financial charge file. Pulling those requires running extra reports and marrying multiple data reports/feeds together. For an entity that is trying to do all of this on their own, that can make it very difficult (if not impossible for smaller CE's). And for software vendors that are trying to offer this as a service to their existing customers, it adds a layer of complexity that is causing them to charge exorbitant fees for the service. Standard data elements available on charge files should more than suffice. Also, drug companies want things like ICD-10 codes so they can deny a claim for a medication like Xarelto, when the primary ICD-10 on the patient's profile is for a condition such as pneumonia. They know most automation will pull a primary ICD-10, and anything that doesn't match approved uses will give them grounds to improperly deny claims. Drug manufacturers have valid complaints about how the 340B program has expanded. They claim they need this data to check for duplication issues. What they really want it for is to search for diversion concerns, ADM programs, etc. And again, those are valid concerns they have. However, the way they are approaching all of this is heavy handed at best. There is no rationale in their concerns for instituting a 340B rebate program that removes up-front pricing. If you determine any sort of program is needed, I again encourage you to create a program that is fair to both sides, that does not remove up- front 340B pricing, that selects a neutral third party for claims ingestion, and to select data elements that are truly useful, not burdensome to CEs, and cannot be weaponized by drug companies. Thank you for your time in reading this comment. Sincerely, Adam Ellington 340B Program Coordinator Baptist Health South Florida Dear Sir or Madam, I'm writing today to encourage you to NOT implement a 340B rebate program, but if you feel you must set up some sort of data upload/transparency program I also want to offer insights so that it is done fairly for all 340B participants. A 340B rebate program is not needed. Manufacturers say they need it at a basic level for MFP deduplication and/or Medicaid duplicate discount concerns. They already have methods for identifying MFP claims they believe to be 340B eligible, and OPAIS and state Medicaid agencies already have procedures for stopping Medicaid duplicate discounts. The manufacturers can operate within those guidelines for these two issues. And even if a new procedure was needed, there is no reason for it to be a rebate program that removes up-front 340B pricing. It could simply be data uploads with pricing removal being a penalty for CE's that fail to upload claims data. That last sentence leads me into my main points, because I think you are going to implement something. I just hope you listen to all stakeholders and implement something that actually works for the 340B program as a whole, to include CEs, patients, and manufacturers. If a claims upload process is deemed necessary the first point is that whatever vendor is chosen to handle the data needs to be selected by HRSA and/or CMS as a neutral third party, not selected by the manufacturers themselves. They currently use Beacon for ESP and MFP, and Beacon has shown themselves to be completely one-sided and not equipped to handle the necessary data. Beacon only exists to serve the needs of the manufacturers and to make life as difficult as possible for CE's and retail pharmacies. Beacon refuses to use appropriate data elements that would allow them to deduplicate claims, for reasons that they have never made clear. Their support staff is extremely unhelpful. Every problem is the fault of someone else, and they have no answers on how to fix the issues. They constantly provide text copy/pasted from manufacturer policy documents as answers to questions, and the staff seems to lack the experience to understand questions and concerns from hospitals trying to provide them the data they want. They are not equipped to handle something as large scale as a full claims upload process for all of the 340B program, even with only a limited catalog of medications. Please, if you decide to start a program, require companies to submit bids for a neutral third-party clearinghouse. I encourage you to accept feedback from CE's, software vendors, etc about the data elements you might include in the program. The last proposal from 2025 had two main issues. First, the data elements didn't allow for true deduplication. There was no PHI. If you simply combined the various elements that were there, such as NDC, claim #, MD NPI, date, etc you get an identifier that while likely to be unique, the chance of it being identified as a duplicate of a different hospitals claim is not zero. That means manufacturers would be able to deny claims where the same MD rounded on two different patients at two different hospitals, but if they order the same medication, and the patients have the same insurance, if that claim number happens to match (which is possible across two separate EMRs), Beacon will deny the claim. The program needs more STANDARD, but unique data elements for the claims. The second point about data elements (specific mainly to medical claims) is that manufacturers want data elements that are unnecessary, because they know that it will make it more difficult to pull the reports, and would give them extra reasons to deny valid claims. Things like HCPCS codes, payer ID codes, etc are not needed for something like this. But drug companies know that those elements are not part of a standard pharmacy or financial charge file. Pulling those requires running extra reports and marrying multiple data reports/feeds together. For an entity that is trying to do all of this on their own, that can make it very difficult (if not impossible for smaller CE's). And for software vendors that are trying to offer this as a service to their existing customers, it adds a layer of complexity that is causing them to charge exorbitant fees for the service. Standard data elements available on charge files should more than suffice. Also, drug companies want things like ICD-10 codes so they can deny a claim for a medication like Xarelto, when the primary ICD-10 on the patient's profile is for a condition such as pneumonia. They know most automation will pull a primary ICD-10, and anything that doesn't match approved uses will give them grounds to improperly deny claims. Drug manufacturers have valid complaints about how the 340B program has expanded. They claim they need this data to check for duplication issues. What they really want it for is to search for diversion concerns, ADM programs, etc. And again, those are valid concerns they have. However, the way they are approaching all of this is heavy handed at best. There is no rationale in their concerns for instituting a 340B rebate program that removes up-front pricing. If you determine any sort of program is needed, I again encourage you to create a program that is fair to both sides, that does not remove up-front 340B pricing, that selects a neutral third party for claims ingestion, and to select data elements that are truly useful, not burdensome to CEs, and cannot be weaponized by drug companies. Thank you for your time in reading this comment. Sincerely, Adam Ellington 340B Program Coordinator Baptist Health South Florida
HRSA-2026-0001-2080NEPA Community Health Care2026-04-20T04:00Z34,618 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of NEPA Community Health Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: NEPA Community Health Care anticipates a loss of $5,676.88 in the first 30 days for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. NEPA Community Health Care was established in 1983 as a non-profit 501(c)(3) federally qualified health center serving the people of rural Susquehanna County. To ensure that we deliver the highest standards of care to our patients, NEPA Community Health Care sets a lofty standard of regulatory compliance, financial integrity and clinical quality. It is our core belief that primary care is the foundation of whole-person health and, as such, the gateway to all medical subspecialties. As medicine and technology continue to advance, family practice remains at the center of care coordination, relying upon the long-standing relationships built with patients to direct the course of appropriate and effective treatment. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For NEPA Community Health Care in particular, it will impact: 3,276 340B transactions and 7,802 unique patients Our current admin costs for the 340B program which totaled $25,332 in 2025 Our ability to offset the costs of the sliding fee scale We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Many drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: NEPA Community Health Care provided thousands of dollars in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, NEPA Community Health Care anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Additional administrative hours will be required to report 340B rebate claims to a third-party platform, assuming adherence to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NEPA Community Health Care urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 6 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Susquehanna County, 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 PA with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B11 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.12 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $69,271.39 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $9,325.18 to purchase these 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 https://340bpricing.hrsa.gov/ 12 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 7 same drugs at the 340B ceiling price. This represents a 642.84% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, NEPA Community Health Care anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Self-Monitored Blood Pressure program or other Care Management services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund critical clinical positions, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. A. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NEPA Community Health Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, NEPA 8 Community Health Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $85,553. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. NEPA Community Health Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices would increase our upfront annual drug spend by $69,271.39. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on NEPA Community Health Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays NEPA Community Health Care urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.13 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $10,563.01. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers 13 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 9 to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 10 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion NEPA Community Health Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B 11 discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NEPA Community Health Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NEPA Community Health Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ivy Chance at ichance@nepachc.org Sincerely, Ivy Chance Administrative Assistant/ 340B Coordinator NEPA Community Health Care
HRSA-2026-0001-2081Front Line Hospital Alliance2026-04-20T04:00Z90,583 chars
Good afternoon, I am submitting comments on behalf of the Front Line Hospital Alliance. My name is Lisa Hawke, and I am an attorney at Holland & Knight serving as counsel to the Alliance. Please don't hesitate to contact me if there are any questions or follow up you require. Thank you for the opportunity to comment. 1 Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Response to Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) I. BACKGROUND ON FRONT LINE HOSPITAL ALLIANCE The Front Line Hospital Alliance (FLHA) is a group of Front Line multi-mission hospitals characterized by high disproportionate share and that provide tertiary services to the sickest, most impoverished and costliest of patients in our communities. We are super safety-net hospitals, caring for a substantially higher volume of low-income patients than most hospitals. We also provide the full continuum of primary through tertiary services, including complex critical and trauma care, and specialized services to patient populations with multiple comorbidities and other medical and social determinants of health challenges. In addition, we train the next generation of physicians to care for these vulnerable patients. While there are many worthy safety-net hospitals, what distinguishes the 124 qualifying "Front Line" hospitals is the triple mission of caring for an exceptionally high number of low-income patients; providing high-cost, specialized treatment to medically complex and socially at-risk patients, and training the next generation of clinicians to serve those most in need, resulting in serious stresses on our financial viability. Front Line multi-mission hospitals commitment to providing complex care to those most in need with humanity and dignity results in a perpetual financial struggle to make ends meet and deliver necessary services to these populations that typically have relatively poor health status, multiple comorbidities and challenges related to social risk factors. Collectively, these challenges contribute to substantial health disparities for these patients, a great many of whom are African American, Hispanic or members of other minority groups. Our patients commonly suffer from multiple conditions, mental health and substance 2 abuse challenges. Many lack stable housing, employment and proper nutrition all of which contribute to poorer health. Most are insured by public programs such as Medicaid, Medicare, and CHIP, or have no insurance at all. And commercial populations are small, often well below 20 percent. Many have high populations of dually eligible Medicare and Medicaid beneficiaries. For that reason, super safety-net hospitals including those who are members of the Front Line Hospital Alliance (FLHA) operate on the most slim of margins and face significant financial stresses. When the 340B Drug Discount Program was created in 1992, it was intended to lower the cost of pharmaceuticals at covered entities dedicated to serving low-income and underinsured beneficiaries. The U.S. Congress anticipated that there would be approximately 90 public or publicly equivalent hospitals that would qualify when the program was first created. We believe that Front Line hospitals are exactly the public and publicly equivalent hospitals originally intended by the Congress to benefit from 340B. Indeed, our hospitals utilize the program as intended and by providing life-saving medications at affordable prices, so that our low-income patients directly benefit from the 340B Drug Discount Program. We believe that it is our public and publicly equivalent hospitals only 124 by our definition on the front lines of caring for the most medically and socially vulnerable and low-income individuals that are exactly those intended by the original authors of the 340B Program to benefit from the drug discount. II. FRONT LINE HOSPITAL ALLIANCE SUPPORTS EFFORTS TO IMPROVE THE 340B PROGRAM As changes to the 340B Program are considered either by the Administration or by Congress we believe that it is our duty as stewards of caring for the most vulnerable patients to come to the table with solutions. This way, we can ensure the 340B Program may continue to meet its original intent and allow us to use savings from the program to continue serving patients in our communities. That is why the FLHA believes that public and publicly-equivalent hospitals like ours are the hospitals and healthcare entities that should be prioritized and accounted for when any changes to the 340B program are considered. We support policy changes to ensure Congress original intent for the 340B program is met, including by: ensuring benefits reach the patients and hospitals most in need, enhancing transparency, improving program integrity, reducing program complexity, and providing sufficient time for stakeholders to implement required changes. We believe each of these goals can be met by advancing policies such as: 3 Instituting verification of patient eligibility for purposes of discounting medications at the time a patient purchases drugs from the contract pharmacy. Requiring covered entities to apply their financial assistance policy (FAP) at contract pharmacy locations and internal pharmacies. Establishing a robust clearinghouse to enable real time data exchange on 340B patient eligibility, address duplicate discounts, enable immediate identification of a 340B drug to address manufacturer concerns about other discounts, and improve program integrity. Redefining who may be considered as a patient and realigning the child site definition to better reflect the presence of primary hospital and secondary clinical locations and enable reporting and transparency. III. SPECIFIC RESPONSES TO RFI QUESTIONS RFI Question 1: Whether HRSA Should Implement a 340B Rebate Model The Front Line Hospital Alliance does not support implementation of a rebate-based model under the 340B Program. A rebate model would fundamentally restructure how 340B pricing is delivered by replacing statutory upfront discounts with retrospective manufacturer reimbursements. This approach shifts financial, operational, and compliance risk from manufacturers to covered entities, contrary to the statutory intent of the 340B Program. For super safety-net hospitals like the Front Line Hospital Alliance members, whose ability to serve vulnerable populations depends on predictable 340B savings, a rebate model would destabilize operations, strain liquidity, compromise confidential, financial, and patient data, divert resources from patient care, compliance, and program integrity, and reduce patient access to medications and other essential services. RFI Question 2: Operational Standards, Payment Timing, and Reconciliation Under the current 340B upfront discount model, Front Line hospitals purchase drugs at Wholesale Acquisition Cost (WAC), validate 340B eligibility at the point of dispensing or administration, and replenish inventory at the 340B ceiling price for eligible uses. Savings are realized promptly and consistently, allowing those resources to be reinvested into patient care, charity care, and medication access programs. 4 Under a rebate-based model, Front Line hospitals would be required to: Purchase drugs at WAC; Dispense medications to 340B-eligible patients; Replenish inventory again at WAC; and Wait for manufacturers to retroactively determine eligibility and issue rebates. This structure requires repeated upfront exposure to full WAC costs while delaying access to 340B savings that are critical to ongoing patient care and operational sustainability. Adverse Impact of Rebate Model on Uninsured Patients For uninsured patients, Front Line hospitals offer affordable cash pricing regardless of whether a prescription ultimately qualifies for 340B pricing. Because manufacturer determinations may occur after dispensing, there is inherent financial risk, and in some cases pricing may be based on WAC rather than confirmed 340B savings. Despite this uncertainty, our members assume this risk today in order to avoid increasing barriers to medication access for uninsured patients. A rebate-based model would significantly expand this exposure and limit the ability of Front Line hospitals to continue providing the pass-through discounts to our patients. Difficulty with Reconciliation Reconciliation of rebate requests is a time consuming and burdensome activity that would be required to ensure we are receiving the cost savings we are eligible to receive. Based on actual reconciliation of a similar program, the Medicare Maximum Fair Price Rebate Program, manufacturers are requiring that we provide historical claims data to support 340B purchases that occurred last year in order to validate that a claim from last month was not 340B. This takes an extremely long amount of time and results in wasted resources to provide data in exchange for rebates that other entities get automatically. As a safety net provider, our staff is already stretched thin and these futile efforts are so burdensome that 5 we either cannot complete them and lose the rebate, or have to hire more staff to be able to get the same or less cost savings that we have been entitled to get since we joined the 340B Program. RFI Question 3: Cash Flow, Liquidity, and Financial Risk A rebate model introduces a significant timing mismatch between drug payment obligations and rebate recovery. The Administrations proposed 340B Rebate Model Pilot Program would devastate our hospitals as Front Line hospitals simply dont have the cash flow to pay the up-front discount per the rebate model and wait for a post-purchase discount. As evidenced in the following chart, the upfront costs would be significant and DSH hospitals are prohibited from utilizing a GPO to lower the cost even to some degree, leaving many hospitals without options: Hospital Cost of Drug Using 340B Discount Cost of Drug Using Group Purchasing Organization Cost of Drug at Wholesale Acquisition Cost Hospital #1 drug spend (over six months) $1,572,793 $17,056,134 $23,873,077 Hospital #2 (over 12 months) $2,051,113 $48,469,716 $87,945,164 Hospital #3 (over 12 months) $2,456,726 $29,604,770 $44,323,026 Rebate Timing Constraints Some FLHA members operate under net seven (7) day payment terms with its wholesale drug supplier; others pay twice a month or have other arrangements. Any rebate model requiring reimbursement beyond this timeframeincluding common rebate delays of 30 or 60 dayswould create immediate financial strain. Such delays would force Front Line hospitals to: Draw down limited operating reserves, 6 Access external credit, or Delay or restrict inventory purchases. Given the volume and acuity of medications required to serve our patient population, extended rebate float is not operationally sustainable. Drug Categories with Greatest Exposure Oncology medications, along with HIV and diabetes drugs, pose the greatest cash-flow and operational risk under a rebate-based model due to their high acquisition costs and the narrow window between purchase and administration. Diabetes and These therapies cannot be safely delayed without direct harm to patients, yet repeated WAC exposure severely limits flexibility in inventory and purchasing decisions. RFI Question 4: Patient Access and Operational Impact A rebate-based model would directly and measurably reduce patient access to medications. If required to repeatedly cover WAC costs while awaiting rebates, Front Line hospitals would be forced to: More tightly control drug inventory, reducing days-on-hand; Require additional internal approvals prior to purchasing high-cost therapies; Limit stocking of certain medications to single locations; Increase courier use and staff management costs; and Delay treatment starts while pre-authorizations, purchasing, and logistics are completed. These changes would result in delayed therapy initiation, increased patient travel burdens, narrower formularies, and higher rates of rescheduling or canceled treatmentsparticularly in oncology and specialty care. Front Line hospitals are already experiencing access pressures due to drug cost volatility, including restricting certain expensive medications to centralized locations. A rebate-based model would significantly exacerbate these conditions. 7 RFI Question 5: Administrative Burden and Institutional Cost Implementing a rebate-based model would impose substantial and permanent administrative costs. One member of our Alliance estimates the need for: Five (5) full-time analysts/technicians dedicated to data validation, dispute resolution, billing reconciliation, compliance, and audit support, at a fully loaded annual cost of $505,625; One (1) full-time information systems analyst to support IT systems, applications, and reporting, at an annual cost of $193,575; Additional supervisory and management oversight to support expanded rebate operations; and Additional software or vendor platform costs, which could range from tens to hundreds of thousands of dollars annually. In total, our member estimates at least $750,000 per year in new ongoing administrative costs, diverting limited resources from direct patient care. RFI Question 6: IT, Data Governance, and Security Risk Manufacturer-required rebate platforms demand submission of detailed utilization data that may be recombined with PBM data and re-identified. These platforms often operate under non-negotiable terms of use that do not meet Front Line hospitals data privacy, security, and governance standards. The Front Line Hospital Alliance members would not accept such terms in any other operational or clinical context, particularly where protected health information or sensitive utilization patterns are involved. RFI Question 7: Duplicate Discount Prevention and Superior Alternatives The Front Line Hospital Alliance members already prevent Medicaid duplicate discounts through multiple robust mechanisms, including: Registration in HRSAs Medicaid Exclusion File; Use of claim-level modifiers where applicable; Exclusion of 340B drugs from Medicaid claims in contract pharmacy settings; and Internal and independent external audits. 8 A rebate-based model is not necessary to prevent duplicate discounts. The Front Line Hospital Alliance strongly supports development of an alternative pilot program (two options are described below) that fixes the problems in the 340B program, including a realistic patient definition grounded in clinical care delivery, contract pharmacies that ensure patient discount at the time of dispensing, a changed definition of child site that simplifies the process and allows transparency into payer mix, drug purchases and service to vulnerable patients, and a neutral, HRSA-administered 340B data clearinghouse as a superior alternative. A centralized clearinghouse would: Preserve statutory upfront 340B pricing; Prevent duplicate discounts using standardized, authoritative data; Maintain HRSA oversight and enforcement authority; Support compliance and program integrity; Reduce administrative burden and data fragmentation; and Protect covered entities from discriminatory PBM reimbursement practices. Unlike manufacturer-controlled rebate platforms, a neutral and centralized clearinghouse maintains shared responsibility for program integrity without shifting 100 percent of financial and operational risk to safety net providers. IV. ALTERNATIVE PILOT MODELS TO TEST 340B MODERNIZATION The Front Line Hospital Alliance hopes to work with the Administration and Congress to develop and test a more workable pilot program, grounded in the reforms we have proposed in this comment letter and to the Congress over the past several years. There are two models we urge you to consider in lieu of the rebate model. A. PILLARS FOR 340B PILOT UNDER BOTH PROPOSED ALTERNATIVE MODELS Our Front Line hospitals serve as a conduit to ensuring access to primary, specialty and tertiary care and vital medications for our most medically vulnerable patients. Consistent with our belief in the purpose of the 340B Program as stated above, we suggest that the Congress consider several key factors in examining whether or how to improve the 340B Program. We suggest that any consideration of 9 modernizing the 340B Drug Discount Program should be built on six key pillars, to guide decision making that are consistent with and effectuate the purpose of the Program. 1. Ensuring the benefit to patients most in need. 2. Ensuring the benefit to hospitals most in need. 3. Enhancing transparency. 4. Improving program integrity. 5. Simplifying and reducing program complexity. 6. Providing a sufficient runway for all stakeholders for any major change. B. DIRECT SUBSIDY PILOT MODEL The USC Schaeffer Institute has proposed an innovative model in the form of a direct subsidy provided by pharmaceutical manufacturers1. Their paper identifies a fundamental and structural problem with the existing 340B program, which is that among qualifying disproportionate share hospitals, for those with higher Medicare and commercial payer mixes, the 340B program provides a higher level of savings than for those hospitals with high Medicaid and uninsured payer mixes. Put another way, that means that hospitals that are more profitable benefit more than hospitals that are less profitable, for which the drug discount was originally intended. The paper suggests consideration of a fundamentally different approach of manufacturers providing a direct subsidy to those hospitals most in need. While the paper does not propose how such a program would work, it is intriguing and is something that the Front Line Hospital Alliance would be willing to engage with the Administration and relevant stakeholders, including pharmaceutical manufacturers, to potentially develop. C. 340B MODERNIZATION PILOT MODEL The Front Line Hospital Alliance has offered extensive comments to Congressional lawmakers over many years who have requested feedback on how to modernize the 340B program. We believe that these critical components could form the basis of a pilot program to test 340B modernization on a small scale and enable tweaks and fixes before a much larger roll out. Major components to such a pilot are 1 Cui Buno? Misaligned Incentives in the 340B Program, September 29, 2025, Ryan Long, JD et al, https://schaeffer.usc.edu/research/misaligned-incentives-340b/ 10 intertwined, cannot be implemented on an a-la-carte basis as they work together, and are described below. 1. Qualifying Hospitals and Voluntary Participation We believe that only high need hospitals Front Line and other high DSH and rural hospitals should qualify for the pilot program, and that participation in the pilot must be voluntary. 2. Patient Definition The lack of a functional statutory patient definition has led to considerable confusion and challenges for all stakeholders. We believe that a simple and bright line definition is imperative to ensure compliance with 340B requirements, and to enable timely identification of eligible patients of the covered entity to prevent duplicate discounts. We believe the key in defining patient is to align it with the real world of patient care at hospitals and other covered entities. We have provided a definition grounded in common sense and a reasonable time limitation which is simple to audit and verify. Per the section below on child sites, we suggest replacing the concept of child sites entirely and switching to a new means of registering covered entity hospitals and their clinics within physical locations that we refer to as a primary hospital location and secondary clinical locations. The definition of a patient we have provided is designed to work with the new rubric we have proposed to eliminate child sites and replace with primary hospital location and secondary clinical locations. Further, this patient definition, in combination with the replacement of child sites with primary hospital location and secondary clinical location, would allow hospitals to register all its clinical operations that may separately be eligible for the 340B program that are actually operated by the hospitals and for which the losses also roll up to the hospital. This is true of a limited number of FQHCs that are operated jointly by hospitals and community boards and for which the FQHCs losses roll up to the hospital. With the onset of federal designation of Certified Community Behavioral Health Clinics (CCBHC), hospitals that have operated a behavioral health clinic eligible for 340B discounts would no longer be eligible for the discount simply due to the federal designation. Allowing hospitals to include these clinical operations (e.g., FQHC and CCBHC) by location in its registration as we have recommended would create much greater simplicity for hospitals and manufacturers participating in the program. 11 It is important not to introduce complexity with regard to the contracting between prescribing clinicians and the covered entity. With the patient definition we have provided with a clear time limitation, in concert with the new location rubric we have suggested, there is no need to add even more complexity around these contracts because the location of the medical service is clearly operationally integrated into the covered entity hospital. Patient Definition and Related Definitions: Who is a patient for whom a covered entity hospital can dispense the drug at a 340B price? A patient means an individual with whom the covered entity hospital has established a provider-patient relationship as evidenced by the following (i) the clinical provider of the medical service is contracted or employed by the covered entity hospital; (ii) the provision of a medical service by the covered entity hospital provider to the patient at a registered primary hospital location or a secondary clinical location of such hospital within 18 months of such service, including care provided remotely; and (iii) a medical record of the hospital, thoroughly documenting the medical service received. What is a medical service qualifying the individual as a hospital patient under 340B? A medical service means medical evaluation, care, or treatment provided by the covered entity hospital via either an employed or contracted clinician, regardless of whether a prescription is ordered. What is a primary hospital location (PHL)? A primary hospital location is the primary inpatient hospital location physical address as on the hospitals license and serves as the (old language) Parent site of the covered entity hospital. What are secondary clinical locations (SCL)? 12 Secondary clinical locations include both (i) related clinical campus locations (which are on the primary hospital campus, but have a different physical address), and (ii) related clinical offsite locations, (which are not located on the primary hospital campus). Secondary clinical locations shall include CCBHCs, FQHCs, Title X, Ryan White and other clinical locations that are either: (i) listed as practice locations on the CMS Form 855 record of the covered entity hospital; or (ii) on the same tax-ID and are clinically and financially integrated within the health system of the covered entity hospital. A related clinical campus location (RCCL): A related clinical campus location is a physical location that is located on the primary campus of the covered entity hospital, but has a different physical address than the covered entity hospital. A related clinical offsite location (RCOL): A related clinical offsite location is a physical location that is not located on the primary hospital location campus of the covered entity hospital. For how long may the covered entity receive a discounted drug for that patient? A drug can be replenished using the 340B discount for any valid fill of a prescription that was written within 18 months from the date of the last medical service documented in the patients medical record. Which covered entity gets the benefit of the discount if the patient receives services from multiple covered entities? Whichever covered entity provider generated the prescription. 3. Child Sites 13 The current child site registration system does not work because it does not align with hospital accounting systems of the covered entity hospitals. We strongly urge the Administration to reduce 340B Program complexity and administrative burden for hospitals by reforming the child site registration process. If the Congress enacts and the Administration implements a clear and decisive definition of patient that is grounded in the reality of modern hospital delivery systems of care and their accounting systems, that will minimize the need for the cumbersome and antiquated child site registration process. HRSA describes a child site as follows: A hospital clinic/department/offsite facility that is eligible to participate in the 340B Program because it is an integral part of a hospital that participates in the program, as evidenced by the fact that it is reimbursable on the hospital's Medicare cost report. OPA requires that a covered entity register as child sites all offsite clinics, departments, and services where 340B drugs are purchased or used, regardless of whether they are in the same building. Offsite generally means a location has a separate physical address than the hospital parent site and is not located within the main hospital. A hospital does not need to register outpatient clinics, departments, or services located within the entity's main hospital but may do so if they appear on a reimbursable line of a hospital's most recently filed cost report. Put simply a child site is not a synonym for an offsite location. There can be multiple child sites at a single offsite location or there can be child sites within the main hospital facility. Hospital drug purchasing is not correlated to child sites as HRSA has required us to register and report them. HRSAs system adds unnecessary complexity and burden to the entire 340B Program because child sites are overlayed as a matter of bureaucratic record keeping on a system designed to deliver high quality patient care, where and when most appropriate for our patients. This lack of alignment is evidenced by the inability of hospital data systems to report certain data, such as payer mix, by child site. Obtaining certain financial and payer mix information for a covered entity is workable, but doing so by child site is very difficult because it involves a complicated intersection between how hospital financial Information Technology (IT) systems organize data and the definition of a child site. Please see the Appendix for a more detailed explanation of why hospital financial systems are not aligned with HRSAs definition of child site. As long as a location of care within the ownership structure of the hospital (i) either is listed as a practice location via CMS Form 855; or (ii) it is on the same tax ID and is clinically and financially integrated within 14 the covered entitys health system ownership structure, it should not be necessary to separately register every single service line, by Medicare Report Cost Center Line Number and physical location as a child site thus eliminating the need to register tens or even hundreds of separate child sites. In short, the current child site rubric is messy and produces way too many child sites, unnecessarily adds extraordinary complexity for all 340B stakeholders and does nothing to improve or somehow add to the transparency of the 340B Program. We urge you to replace child sites with a new primary hospital location and secondary clinical location that would greatly simplify the registration process for hospitals, and would allow for the more detailed reporting, transparency and accountability that you seek and we support. 1. Primary Hospital Location (PHL). Covered entity hospitals would submit one primary registration using address as depicted on the hospital license. 2. Secondary Clinical Location (SCL). Covered entity hospitals would also submit two types of secondary clinical location registrations: a. Related Clinical Campus Location (RCCL). Such clinical locations would be buildings on the main campus of the covered entity hospital but at a different physical address from the primary inpatient hospital on the campus. b. Related Clinical Offsite Location (RCOL). Such clinical locations would include physical addresses of clinical locations that are off of the primary hospital campus; one registration per each different address where care is being provided. To further illustrate: You are a related clinical offsite location, if you are operated by the primary site hospital, are financially and clinically integrated, are reported on the Primary/Parent site Medicare cost report and listed as a practice location on the Parent site CMS Form 855, or share the same tax ID. This is a related hospital clinical offsite location, even if multiple service lines and Medicare cost report lines within that location/address. If you are a department or service line within the walls of the same Primary Hospital Location/Parent hospital, you are simply under the umbrella of the hospitals Primary Hospital Location/Parent site ID, there would be no need to register as a hospital clinical offsite location (as we may register today as a child site). 15 If you are a second hospital under same tax ID, filed on same Medicare cost report, financially and clinically integrated with Primary Hospital Location/Parent hospital, you would register as a related clinical offsite location based on different address, but not register every single department within that second hospital based on service line and Medicare cost report line number reporting (as we must register today as a child site.) This redefinition of child sites is consistent with the information already reported by hospitals on the CMS Form 855, reduces administrative burden for covered entity hospitals, improves transparency and simplicity for all stakeholders, including manufacturers, and enables accountability of service to the underserved as intended by the Congress. Please see our attached slides which illustrate how child sites are currently defined, and how we propose that the child sites be redefined. 4. Neutral Clearinghouse We support the establishment of a national clearinghouse and have provided detailed information below on how we think it should work, including performing the following functions: Receive data from each covered entity to identify which prescriptions qualify for 340B at their covered entity; Receive data from each contract pharmacy indicating which prescriptions were filled and with which drug (NDC), if Medicaid was a payer; For each match, the NDC could be accumulated for the corresponding covered entity and pharmacy; For each Medicaid dispense that isnt matched to a covered entity, a rebate can be processed; Manufacturers and drug wholesalers can access the data to help them with replenishment, for their own user fee; A pharmacy should have a dashboard, for its user fee, that show how many of each NDC has accumulated for them to replenish and the covered entity that accumulation is attributed to, including 16 o When they order replenishments, their drug wholesaler can confirm the accumulation, for a user fee; o The accumulation can be put on hold when the order is placed with a final deprecation when drug is received; o The covered entity will be billed for the drugs replenished on their accounts. o Since there would be one clearinghouse and not multiple different TPAs, the pharmacy would not need to incur the expense of having a gateway provider to manage their ordering from multiple TPAs. Staff should place orders from within the clearinghouse, or Other software vendors could write software to connect to the clearinghouse (for a user fee) and process comprehensive orders that include both clearinghouse and non-clearinghouse drugs. The clearinghouse should include the functions of a PBM to facilitate patient access to drug discounts at the pharmacy counter: o Each covered entity could be assigned a slate of BIN/PCN/Group numbers to represent each level of discount based on the covered entitys Financial Assistance Policy (FAP); and o Congress could require an additional set of fields to be added to the standardized forms used to electronically transmit prescription information to contain these covered entity specific FAP information. Electronic prescribing is currently standardized under the National Council for Prescription Drug Programs (NCPDP). The clearinghouse should process financial transactions between parties: o The reimbursement amount for each dispense (including copay) would be part of the data provided by the contract pharmacy; 17 o Copay discounts could be provided at the pharmacy based on the special BIN/PCN/Group numbers assigned to the covered entities that are transmitted to the pharmacy when the script is written; o Each pharmacy could get paid a standard dispense fee; and o The clearinghouse could reconcile, on a timely basis (semi-monthly), all validated 340B eligible transactions: Collect receipts from pharmacies; Subtract dispense fees owed to pharmacies; Subtract user fees for administrative services by the clearinghouse; and Transmit remaining amount to covered entities. o Medicaid agencies, for a user fee, could access the clearinghouse and request rebates using the unmatched dispenses. o The clearinghouse could process payment of the rebates by collecting from manufacturers and transmitting to Medicaid Agencies. The clearinghouse should make traditional contract pharmacies obsolete. o Each pharmacy connected could be a contract pharmacy to each covered entity connected. They would simply agree to the standard structures including fees, data, etc. o All eligible patients of a covered entity could get served by any participating pharmacy Please see our attached slides which illustrate how the neutral clearinghouse as we have proposed would operationally function. 5. Contract Pharmacy 18 Codification of the use of contract pharmacies is essential to ensure patient access to pharmaceuticals where they live and work. This includes required contract provisions, registration requirements, a means with which to identify patients, copays, reporting, etc. Particularly for low-income patients, it makes no sense to require them to travel to the hospital to receive needed medications. For our most vulnerable citizens, it is good health policy to encourage medication compliance and minimize the cost, while improving the convenience of obtaining their prescriptions close to home. We strongly support codification on use of contract pharmacies. We agree that patient definition change is critical and works in combination with contract pharmacy and child sites, and that changes to all three must be made holistically. We remain concerned about situations in which low-income patients are paying high amounts for drugs at contract pharmacies. We support verification of patient eligibility for purposes of the discount that includes the application of the hospitals financial assistance policy (FAP) at the time the patient purchases the drug from the contract pharmacy. We support a requirement that the covered entity hospital apply its FAP to contract pharmacy locations as well as its own internal pharmacies. We think that would provide the greatest flexibility in serving patients, and will also ensure that patients are not subjected to high copayments at contract pharmacies. Our proposed clearinghouse provides a meaningful opportunity to streamline identifying patients of the covered entity in real time to ensure program integrity and avoid duplicate discounts. Verification through the clearinghouse in real time must be utilized to ensure the discount is being used for an actual and legitimate patient of the covered entity, including the application of the lower FAP indicated copayment. The most efficient means by which to do so is to update NCPDP claim form fields to include information that, when received by the contract pharmacy, would provide 340B and FAP eligibility. In building a national clearinghouse, it makes sense to use an electronic method of validating this information. The clearinghouse should utilize an experienced but objective PBM to execute this function. Each covered entity would sign up to get a slate of BIN/PCN/Group numbers that represent its FAP options. That BIN/PCN/Group number would be sent with the prescription to the pharmacy using the new fields. The pharmacy would charge the patient the discounted copay. The clearinghouse would collect the information and reconcile it. This way, we know its an eligible 340B prescription when it leaves the hospital even if the clearinghouse has not yet received a file. For more detail, please see our comments on Section 8. 19 Another significant challenge is that some contract pharmacies require remuneration in the form of a high percentage of the drug cost, rather than the actual cost of dispensing the drug with some smaller and reasonable profit. Weve seen requirements as high as 15% of the cost of the drug, which enriches these pharmacies at the expense of the covered entity the Congress is intending to receive the discount. We want to encourage contract pharmacies to help extend access to our patient populations, but not to the point where the program is enriching them rather than supporting hospitals in need. With the establishment of a clearinghouse, the individual pharmacies dont have to manage multiple different CE inventory replenishments and thus cannot justify a high value dispense fee. Accordingly, some kind of limitation would be appropriate if a percentage is used in the contract, which could be determined by the Secretary in rulemaking. For example, the Administration or Congress could require standard contract provisions as follows: the contract pharmacy may receive reasonable remuneration for its services; if the contract utilizes payment in the form of a percentage of the cost of the drug dispensed, the amount may not exceed 200% of national average Medicaid dispense fee for the same class of drug (retail/specialty). CMS should survey state Medicaid agencies to collect dispense fee data and determine an average for retail and specialty prescriptions at least annually. 6. Transparency Front Line hospitals shoulder uncompensated care burdens that well exceed the benefit derived from 340B drug discount savings and would be proud to provide data demonstrating our strong need for the discount. We support transparency, accountability and reporting on the benefit that our hospitals and our patients receive from the 340B Program. Our Front Line hospitals utilize national evidence-based guidelines for our formularies and apply them consistently to all patients as medically appropriate, regardless of insured status or site location. We share Congressional concerns regarding news reports about the 340B Program not being utilized for its intended purpose. Greater transparency into actual prescribing practices may lessen concerns about the possibility of inappropriate 340B utilization. However, as noted above, in order for hospitals to actually be able to report, it is absolutely necessary to shift from the HRSA definition of child site to our suggested new approach of primary hospital location and secondary clinical locations, which will enable hospitals to reasonably comply with these reporting requirements as it is generally aligned with modern hospital accounting systems. 20 Further, it is vital to capture all uncompensated costs borne by 340B hospitals, not just those on the Worksheet S-10. Medicare cost reports include a Worksheet S-10 entry for charity care which is care provided pursuant to a hospitals charity care policy. It is ordinarily combined with bad debt (unpaid bills reduced to a judgment) as a calculation of uncompensated care. However, even with the inclusion of bad debt, many legitimate uncompensated care costs will be excluded. Moreover, Medicare cost reports are premised on the application of a single cost to charge ratio (CCR) that creates imprecise results. We have provided a location-based approach below on how to effectively design reporting requirements in a manner that will yield beneficial information that can reasonably be reported by hospitals, and that is contextualized to reflect different types of DSH hospitals and varying levels of commitment to serving the most vulnerable and low-income individuals. The Secretary should compile all information available on the Medicare Cost Report. For any additional information that cannot be compiled by the Secretary, we believe that hospitals should be required to report this information within no less than 90 days of its most recently filed Medicare cost report, which will generate the most accurate and up-to-date information. We suggest the following data elements for covered entity hospitals. (1) In General. On an annual basis, 340B covered entity hospitals shall report to the Secretary (in a manner and form specified by the Secretary) any information specified in subsection (2) that is not otherwise available on the Medicare Cost Report. The Secretary shall compile all data elements in an annual report to the Congress. (2) Data Elements for All Covered Entity Hospitals. Each covered entity hospital shall report the following information to the Secretary if not readily identifiable to the Secretary on the Medicare Cost Report: (A) Organizational Status: Whether the hospital is (i) Publicly owned or operated (including hospital authorities and districts), or a public or nonprofit with government powers, as under (a)(4)(L)(i); (ii) Private nonprofit hospital under (a)(4)(L)(i) with a contract with a State or local government to provide health care services to low-income individuals not entitled to benefits under title XVIII or XIX of the Social Security Act; 21 (iii) A childrens hospital or free-standing cancer hospital under (a)(4)(M); (iv) A critical access hospital under (a)(4)(N); (v) A rural referral center or sole community hospital under (a)(4)(O). (B) Type of Hospital by Form of Organization. Examples: Voluntary Nonprofit, Church; Voluntary Nonprofit, Other; Governmental, Federal; Governmental, City-County; Governmental, County; Governmental, State; statutory municipal corporation; hospital district or authority, or other political subdivision of the State. (C) Payer Mix. The hospitals overall percentage of gross charges in each of the following categories for inpatient days and outpatient visits for the hospital, for each hospital clinical offsite location (as defined above), and segregated as appropriate into FFS and managed care by each payer group. (D) Total low-income patient loss. This represents a transparent, standardized and accurate calculation of uncompensated care costs for Medicare, Medicaid and uncompensated care and that can be determined as the sum of the following: (as defined in Section (5)(B) of this Section). (i) Medicaid and Uninsured losses from latest Audited State Medicaid DSH UC application/formula (i.e., Medicaid DSH shortfall calculation); and (ii) Medicare hospital cost shortfall together with hospital-incurred losses on physician costs, community primary care clinics owned/controlled by hospital, and operation of EMS/ambulance services obtained from Medicare cost report and submitted under a standardized cost report. (E) Hospital net income or loss. This should be calculated for the period as measured on the Medicare Cost Report Worksheet G-3 (Line 29). (F) Hospital net income on patient service revenue. This is measured on the Medicare Cost Report Worksheet G-3 (Line 5). (G) 340B Savings Amount defined as: 22 (i) Total amount of what the outpatient drug spend at GPO price would have been absent the 340B program, minus (ii) Actual 340B Spend, minus (iii) WAC Impact, minus (iv) Cost to administer and operate the program (infrastructure costs of compliance, staffing, inventory management, software, etc.). Please note that WAC impact refers to those situations where the 340B statute requires a hospital to buy drugs at WAC instead of GPO because they cannot be obtained under 340B. Examples of this situation include When another bottle is needed and the 340B or GPO accumulations have not reached package size; When a new NDC is being used; When a non-eligible site orders drugs and has no accumulations because they are not eligible. (H) 340B Savings Breakdown. 340B savings can be broken down by in-house outpatient and contract pharmacy locations, not by child site as currently in place. Savings should be reported as follows: (i) Hospital 340B savings (also called mixed use); Mixed use is for departments within the hospital, where there could be both inpatients and outpatients. We have to have special software in place in mixed use areas, to make sure we dont use 340B drugs for Inpatients. (ii) Covered entity owned outpatient pharmacy savings. (iii) Contract (non-CE-owned) retail pharmacy savings. (I) Use of 340B savings We believe it is appropriate for participating hospitals to provide the Secretary with a straightforward annual statement documenting specific programmatic investments that benefit its vulnerable patients and communities, such as 23 the provision of trauma or burn care, opioid addiction treatment, medication adherence programs, targeted health programs for specific patient populations, or other patient non-medical services such as wraparound transportation or other services to prevent unnecessary emergency department visits or hospital admissions. This should not be overly burdensome, and should have clearly stated expectations as to what information is expected. (J) Essential community services. We believe the MACPAC defined essential community services offers insightful information for the 340B review, since many 340B hospitals do provide these costly services for their communities. Reporting would simply entail which, if any, of these services are provided by the Covered Entity: Burn Dental HIV/AIDS Neonatal ICU OB-GYN Primary care Substance use disorder Trauma GME Inpatient psych (K) Contracts with third party vendors and contract pharmacies should be reported to HRSA, and there should be guardrail requirements and protections for covered entities (L) Policies of the covered entity should promote access and adherence to prescribed medication, including the financial assistance policy for the hospital, hospital offsite locations and contract pharmacy locations. (M) Patient Demographics should be reported by each redefined physical location. (N) Operational costs to the covered entity related to the 340B program should also be reported. 24 (3) Data Aggregation by Hospital Categories. Reporting requirements and data collection must capture context, which we believe is essential to evaluating the 340B program. There is a wide variation among DSH hospitals in the mission profile and levels of commitment in serving the most medically and socially vulnerable low-income patients and the types of services provided. Some hospitals have a very high disproportionate patient percentage (DPP) and some that qualify for 340B have a much lower DPP. Some are major teaching hospitals with a very sick patient mix, and others have a healthier patient population. As the data begins to be reported, it is essential that the data be aggregated to demonstrate the services provided by 340B hospitals relative to their commitment to serving low-income patients in groupings of hospitals to parse out those differences when considering making any future policy changes. We believe it is imperative that the reported data be rolled up into the following hospital categories based on eligibility in a mutually exclusive manner: High Need Hospitals (see Appendix C for suggested definitions): o Front Line Multimission Hospitals; o Endangered Small Rural Hospitals; and o Vulnerable Community Hospitals. Medicaid Deemed DSH (as defined in federal law) excluding Front Line. Medicare DSH greater or equal to 20.2% (as defined in federal law) excluding Front Line and Medicaid Deemed DSH. Any remaining 340B DSH hospitals providing essential community services (as defined by MACPAC) segregated by those providing 1-3, 4-7 and 7-10. (4) Transparency in Hospital Prescribing Practices. Finally, we support transparency around hospital prescribing practices. Concerns have been raised that 340B hospitals prescribe more drugs and more expensive drugs as a means by which to raise 340B revenue. As mentioned, our Front Line hospitals utilize national evidence-based guidelines for their formularies and apply them consistently to all patients as medically appropriate, regardless of insured status or site location. If there is an increase in the utilization of a particular drug, that is because there is a 25 patient need and protocol established in these evidence-based guidelines.2 To improve transparency around utilization, 340B hospitals would advise the Secretary which guidelines have informed our respective drug formularies. Where new drugs have outpaced production of national guidelines, hospitals shall also include information relating to the discount and choice of drug for medically appropriate patients, but on a HIPAA compliant non-patient specific basis. Consideration should be provided for those instances where medication substitutions are required off-formulary due to drug shortages. Our Front Line hospitals are willing to be audited by an appropriate body with regard to our adherence to these national and evidence-based guidelines. 7. Enhancing Program Integrity 340B Financial Assistance Policy (FAP). We believe it is appropriate for hospitals receiving the benefit of the 340B discount to have a formal policy that ensures vulnerable and low-income patients benefit from the 340B discount received by such hospital. It is noteworthy that Section 501(c)(3) hospitals are not required to offer a specific amount of charity care or community benefit, but they are required to have a formal financial assistance policy. Consistent with that approach, the Congress could require that patients who qualify for financial assistance/charity care under the hospitals policy(ies) shall receive 340B priced drugs from the covered entity hospital in accordance with the free and discounted amounts provided for thereunder. We would suggest a minimum of 150% of FPL which is more closely aligned with coverage under the Affordable Care Act. Hospitals are certainly free to be more generous. Further, the Congress could require such a policy to stipulate patients without a third-party payer resource will be charged no more than actual acquisition price plus a reasonable mark up for overhead and a dispensing fee, including at contract pharmacies. Consistent with our pillars, we believe that ensuring that low-income and uninsured patients benefit from the 340B program is essential. Rather than addressing the FAP within the duplicate discount section, we urge you to establish a separate section specifically called Ensuring Accountability for Extending the Benefit to Patients Most in Need or something to that effect. 2 Examples of potential guidelines include those related to HIV medications developed by the National Institutes of Health (https://aidsinfo.nih.gov/guidelines) and those developed by the National Clinical Cancer Network for oncologic therapies. 26 Audits by the Secretary. We agree that it is appropriate for the Secretary to reserve the right to audit covered entities, including contract pharmacies and child sites of such entities, with a focus on the statutory provision of 340B. We also agree that the audit assesses the covered entitys contract with a state or local government adequately addresses the provision of health care services provided to individuals who are low-income but are not eligible for their states Medicaid program. Additionally, there should be equal effort in auditing manufacturers to assess compliance requirements for accurate price calculations and compliance with non-discriminatory pricing. In addition, auditing of pharmacy benefit managers (PBMs) should be reserved for discriminatory reimbursement strategies and/or adverse pharmacy contracting selection based on 340B status. 340B Vendor Information. In general, we agree that 340B management information system vendors (340B vendors) must be able to submit data for auditing purposes. However, not all covered entities utilize an outside 340B vendor for such a purpose. We would propose that all 340B vendors are required to have the capability of submitting pre-defined data elements to the Secretary; however, ultimately, the requirement to submit the required data elements to the Secretary lies with the covered entity. Therefore, the Secretary should provide the ability for covered entities to self-submit their data and remain in compliance with the data auditing and reporting requirements. The Secretary must also establish pre-defined data elements and structure that all 340B vendors can adhere to. These data elements must be comprehensive enough to monitor for potential violations of drug diversion or duplicate discounts but limited to avoid exposure of protected health information (PHI) and guardrails afforded by HIPAA. The Secretary must also provide a secure methodology for data submission, storage, and management as this data may allow potentially discriminatory practices by manufacturers and PBMs. Information submitted from this data to manufacturers and PBMs must be limited to only provide elements specific to the utilization of their business (i.e., manufactured medications or specific PBM adjudicated prescriptions). Information provided to the manufacturers or PBMs should not include the specific covered entity or pharmacy identifiers. Consequences of Audit: While we agree that the consequences of an audit should be consistent and appropriate with the violations of requirements of the 340B Program, we do not agree that the implementation intent of the covered entitys 340B eligibility criteria and program should be ignored. A covered entity may have inadvertently identified patients or prescriptions as 340B eligible through their 340B vendor and resulted in a non-material breach (financial disparity that is less than 5% of the covered 27 entitys total 340B purchases), can be corrected through either retroactive update to the patients or prescriptions OR by direct payments to the affected manufacturer. In both situations, the manufacturer may be made whole. However, for covered entities who knowingly deem patients or prescriptions 340B eligible with disregard to 340B statutes, regulations, or prime vendor guidance, fail to implement a corrective action plan within 6 months of issuance of a final audit report related to a statutory violation, OR have a material breach from a statutory violation, the Secretary must reserve the right to limit or expel the covered entity from the 340B program. We also agree that higher frequency of audits should occur in covered entities with previously identified violations of the 340B program. 8. Ensuring Equitable Treatment of Covered Entities and Participating Pharmacies. No group health plan, a health insurance issuer offering group or individual health insurance coverage, or a pharmacy benefit manager (PBM) (through either medical, pharmacy or other benefit payments or reimbursement structures) should be able to discriminate against and solely on the basis of a 340B covered entity, contract pharmacy, or a participant, beneficiary, or enrollee of such plan or coverage by imposing discriminatory pricing or reimbursement through either a medical, pharmacy, or other benefit. Additionally, we believe that no group health plan, a health insurance issuer offering group or individual health insurance coverage, or a pharmacy benefit manager shall be able to impose any terms or conditions on a 340B covered entity, contract pharmacy, or a participant, beneficiary, or enrollee of such plan or coverage that is different from those applied to non-340B entities or participants. If PBMs are to access the clearinghouse data, they should be required to offer their owned pharmacies as contract pharmacies to the enrolled covered entities. They should be required to include all dispense transactions, not just the ones on which the dispense fee exceeds their separately negotiated manufacturer rebate. A practical and easily operationalized dispute resolution procedure should be in place by which eligibility, rebates, prices, access, fees, or any other issue can be resolved within the system. Dispute resolutions that require lawyers are not practical or easily operationalized. 9. Allow 340B Drug Discounts in Inpatient Settings for Qualifying Hospitals Participating in the Pilot. We urge the Congress to focus the greatest benefit of the discount on those hospitals most in need of the discount and that are truly serving the most vulnerable and low-income patients, including Front Line, very high DSH community hospitals, freestanding childrens hospitals and small rural hospitals. We 28 have provided a definition for each of these categories of what we describe as High Need Hospitals in the Appendix. Since the inception of the 340B Program in 1992, hospitals have only been allowed to utilize the savings for outpatient drugs and not inpatient drugs. This is a historical anomaly. During Congressional consideration of the 340B Program, hospitals were not initially considered to be eligible and the discount was limited to outpatient drugs. This was because the initial providers considered by the Congress were all outpatient providers (by definition). Certain public and public-equivalent hospitals were added as eligible for the discount toward the end of the legislative process when the outpatient drug discounts were already established. There is no policy rationale that a hospital dispensing the exact same drug to the exact same patient in its outpatient clinic or emergency department may utilize the discount for that patient, but not if it admits the patient to an inpatient unit. The cost of inpatient drugs has skyrocketed. According to the American Hospital Association, during 2015 to 2017, hospital inpatient costs rose on average by 18.5% per admission, which followed a 38% increase in inpatient drug spending from 2013 to 2015. These cost spikes are particularly extremely challenging for Front Line hospitals to absorb, given their very high payer mix of Medicare, Medicaid, CHIP and uninsured, for which reimbursement is substantially lower than the cost of care or nonexistent. There is a subset of endangered and independent small rural hospitals, such as sole community or critical access hospitals, that are at risk of closure and would especially benefit from the extending of the discount to inpatient drugs. They typically do not have large outpatient departments or pharmacies. The inpatient discount would help them to keep their doors open in challenging times. Additional complexity is driven by the requirement to maintain separate inventories of covered outpatient and inpatient drugs. This is simply not a problem for non-hospital covered entities which, by definition, do not provide inpatient services. Allowing the discount for all patients regardless of site of care location would immediately remove an extraordinary amount of unnecessary complexity and expense, and improve program integrity from a program requirement that makes no sense, especially given Congressional movement toward site neutrality of payments. Our position is founded on a broader and longer-term policy consideration, which is to decouple supplemental payment streams from site-specific locations including Medicare DSH, IME and 340B savings. Medicare DSH and IME are tied to inpatient discharges. 340B discounts are allowed only for outpatient drugs. However, this is not the only historic precedent. 29 Extending the discount to inpatients had been included in the ACA but was undone just 5 days later in the proceeding reconciliation package, at the request of the pharmaceutical industry. In 2010 during finalization of the ACA, the pharmaceutical industry agreed to extend the 340B discount for uninsured inpatients of covered entity hospitals above the threshold of 20.2% disproportionate patient percentage (DPP). Led by then Congressman Henry Waxman, legislation including a new 340B1 passed the House of Representatives which extended the 340B to high DPP safety net hospitals to obtain inpatient 340B for uninsured. We believe that supplemental funding and 340B discounts should not be tied to either outpatient or inpatient settings and be sufficient to ensure our ability to provide high quality care to those most in need. Rather, they should enable hospitals to provide the right care in most cost-effective setting. The tie between these funding streams and particular care settings is antiquated and a product of historical creation, rather than smart policy. Effectuating this policy must be carefully constructed so as to ensure the financial viability of Front Line hospitals which depend on these essential revenue streams. We are happy to engage with the Congress on a broader approach that would address these issues holistically. 10. Runway to Enable Revamping of HRSA and Hospital Systems to Meet Pilot Program Requirements. While we support reforms as specified throughout this response, sufficient time must be given to properly implement these historic and substantial changes. If in fact we were to change the child site rubric as we have described, and add inpatient as an allowable type of service where 340B drugs could be used, just as two examples, significant changes to the OPAIS site would need to be effectuated to condense the old child sites into the new by physical address location sites. Inventory accounts would need to be changed to account for the lower number of registered locations and addition of inpatient component. In addition, reports would need to be designed in order to respond to the reporting requirements. The clearinghouse would be a project in and of itself, including finding the right partner, designing the workflows and implementation. These are only a few examples of major work needing to be done. We are suggesting a three-year runway with planned checkpoints along the way, in order to successfully implement the new and improved 340B Program for the future. 11. Remove Group Purchasing Organization (GPO) Prohibition from the Pilot Program. There is a statutory prohibition against hospitals purchasing covered outpatient drugs through a GPO. The GPO prohibition is another example of an antiquated provision of the 340B Program that no longer 30 makes any sense. The GPO prohibition basically says if a hospital is participating in the 340B Program, they cannot access pharmaceuticals through a GPO. Hospitals should be allowed to access the most cost- effective pharmaceuticals available, whether 340B, GPO or WAC. The aim of Congress should be to help hospitals operate in the most efficient manner, and removal of the GPO Prohibition would allow hospitals to be able to do just that. V. CONCLUSION The Front Line Hospital Alliance urges HRSA not to implement a rebate-based model under the 340B Program. A rebate model would shift risk to covered entities, impose unsustainable financial and administrative burdens, and undermine access to care for vulnerable patients. Instead of a rebate model, the Front Line Hospital Alliance urges consideration of the alternative models set forth in this comment. We appreciate the opportunity to provide these comments and stands ready to assist HRSA in further evaluation. ___________________________________________ R. King Hillier Senior Vice President Public Policy & Government Relations Harris Health (Robert.Hillier@harrishealth.org) ___________________________________________ Allison Poulious Senior Vice President, Chief External Affairs Officer The MetroHealth System (apoulious@metrohealth.org) 31 Appendix A EXAMPLES OF WHY IT IS IMPOSSIBLE TO REPORT AT CHILD SITE LEVEL Hospital X uses EPIC for revenue generation and PeopleSoft (PS) as its general ledger accounting system. Below are three examples which illustrate the complexity of Hospital Xs system. Example 1 - PS General Ledger Accounts/Departments have same Service Line, same physical address/location and same Medicare Cost Report Line Number (CCN) If we have three different kinds of Labs, all located at the same physical address, and all reported on the Medicare Cost Report on the Laboratory CCN 60.00, then these three Labs would all group into a singular Child Site. Pathology Lab PS Account # 10500-30005 - 100 Smith Street CCN 60.00 Hematology Lab PS Account # 10500-30006 - 100 Smith Street CCN 60.00 General Lab PS Account # 10500-30007 - 100 Smith Street - CN 60.00 All three of these PS accounts/departments would group to a single Child Site. Example 2 - PS General Ledger Accounts/Departments have same Service Line, different physical address/location + different Medicare Cost Report Line Number (CCN) If we have three different General Medicine Clinics, all three located at different physical addresses, and all reported on the Medicare Cost Report on Clinic CCNs 90.00, 90.01 and 90.02, then these three Clinic departments would all group into three separate Child Sites. General Medicine Clinic #1 PS Account # 10500-40005 - 300 Smith Street CCN 90.00 General Medicine Clinic #2 PS Account # 10500-40006 - 400 Acorn Street CCN 90.01 General Medicine Clinic #2 PS Account # 10500-40007 - 500 Maple Street- CN 90.02 Each of these three PS departments would group to their own Child Site. Example 3 - PS General Ledger Accounts/Department have same physical address/location + same Medicare Cost Report Line Number (CCN), but different Service Line If we have two different clinics, one is a General Medicine Clinic and the other is a General Surgical Clinic. They are accounted for in 32 separate PS accounts, both are located at same physical addresses, and both are reported on the Medicare Cost Report on Clinic CCN 90.00. These two Clinics would group into two separate Child Sites. General Medicine Clinic #1 PS Account # 10500-40005 - 300 Smith Street CCN 90.00 General Surgery Clinic #2 PS Account # 10500-40010 - 300 Smith Street CCN 90.00 Each of these two PS departments would group to their own Child Site, because they are different Service Lines. Tylenol Example: The drug is used at 32 internal locations. The balance for each equals the number of tablets on hand. Administrations from each of these locations feed into the accumulations. As the accumulations reach package size, a bottle can be purchased. The bottle may be purchased by the main drug storeroom and held until a request comes in for a new bottle at a location. More bottles may be purchased at WAC if not enough accumulations have occurred to purchase the needed quantity. We can buy 1 bottle on 340B. That bottle represents 1,000 doses that were administered all over the hospital. It would take serious computing to trace every drug admin back to the exact purchase and further segregate the ones that were not purchased in order to determine the cost savings by location. Appendix B Qualifying High Need Hospitals as of January 22, 2026 BANNER UNIVERSITY MEDICAL CENTER PHX 2 (Voluntary Nonprofit, Other) Nonprofit PHOENIX AZ VALLEYWISE HEALTH MEDICAL CENTER 11 (Governmental, Hospital District) Governmental PHOENIX AZ BANNER UNIVERSITY MED CENTER TUCSON 2 (Voluntary Nonprofit, Other) Nonprofit TUCSON AZ BANNER UNIVERSITY MED CENTER SOUTH 2 (Voluntary Nonprofit, Other) Nonprofit TUCSON AZ UAMS MEDICAL CENTER 10 (Governmental, State) Governmental LITTLE ROCK AR UCSD MEDICAL CENTER 10 (Governmental, State) Governmental SAN DIEGO CA SANTA CLARA VALLEY MEDICAL CENTER 9 (Governmental, County) Governmental SAN JOSE CA LAC OLIVE VIEW/UCLA MEDICAL CENTER 9 (Governmental, County) Governmental SYLMAR CA KAWEAH DELTA MEDICAL CENTER 11 (Governmental, Hospital District) Governmental VISALIA CA COMMUNITY REGIONAL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit FRESNO CA SCRIPPS MERCY HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit SAN DIEGO CA ST. JOSEPHS MEDICAL CENTER 1 (Voluntary Nonprofit, Church) Nonprofit STOCKTON CA ST. AGNES MEDICAL CENTER 1 (Voluntary Nonprofit, Church) Nonprofit FRESNO CA ADVENTIST HEALTH WHITE MEMORIAL 1 (Voluntary Nonprofit, Church) Nonprofit LOS ANGELES CA ST. BERNARDINE MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit SAN BERNARDINO CA SAN JOAQUIN GENERAL HOSPITAL 9 (Governmental, County) Governmental FRENCH CAMP CA ZUCKERBERG SAN FRANCISCO GENERAL 8 (Governmental, City-County) Governmental SAN FRANCISCO CA ARROWHEAD REGIONAL MEDICAL CENTER 9 (Governmental, County) Governmental COLTON CA SIERRA VIEW MEDICAL CENTER 11 (Governmental, Hospital District) Governmental PORTERVILLE CA RONALD REAGAN UCLA 10 (Governmental, State) Governmental LOS ANGELES CA CONTRA COSTA REGIONAL MEDICAL CENTER 9 (Governmental, County) Governmental MARTINEZ CA RIVERSIDE UNIVERSITY HEALTH SYSTEM 9 (Governmental, County) Governmental MORENO VALLEY CA KERN MEDICAL CENTER 9 (Governmental, County) Governmental BAKERSFIELD CA ALAMEDA HEALTH SYSTEM 9 (Governmental, County) Governmental OAKLAND CA LOMA LINDA UNIVERSITY MEDICAL CENTER 1 (Voluntary Nonprofit, Church) Nonprofit LOMA LINDA CA UCI MEDICAL CENTER 10 (Governmental, State) Governmental ORANGE CA LOS ANGELES GENERAL MEDICAL CENTER 9 (Governmental, County) Governmental LOS ANGELES CA HARBOR-UCLA MEDICAL CENTER 9 (Governmental, County) Governmental TORRANCE CA UCSF MEDICAL CENTER 10 (Governmental, State) Governmental SAN FRANCISCO CA MEMORIALCARE LONG BEACH MED CTR 2 (Voluntary Nonprofit, Other) Nonprofit LONG BEACH CA UC DAVIS MEDICAL CENTER 10 (Governmental, State) Governmental SACRAMENTO CA Appendix B Qualifying High Need Hospitals as of January 22, 2026 LOMA LINDA UNIVERSITY CHILDRENS HOSP 1 (Voluntary Nonprofit, Church) Nonprofit LOMA LINDA CA DENVER HEALTH MEDICAL CENTER 10 (Governmental, State) Governmental DENVER CO UNIVERSITY OF CO HOSPITAL 13 (Governmental, Other) Governmental AURORA CO HOWARD UNIVERSITY HOSPITAL CORP 2 (Voluntary Nonprofit, Other) Nonprofit WASHINGTON DC JACKSON MEMORIAL 9 (Governmental, County) Governmental MIAMI FL BROWARD HEALTH MEDICAL CENTER 11 (Governmental, Hospital District) Governmental FT. LAUDERDALE FL GRADY MEMORIAL HOSPITAL 9 (Governmental, County) Governmental ATLANTA GA MOUNT SINAI HOSPITAL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit CHICAGO IL UNIVERSITY OF CHICAGO HOSPITALS 2 (Voluntary Nonprofit, Other) Nonprofit CHICAGO IL JOHN H. STROGER JR. HOSP OF COOK CTY 9 (Governmental, County) Governmental CHICAGO IL BOARD OF TRUSTEES OF THE UNIVERSITY 10 (Governmental, State) Governmental CHICAGO IL PRESENCE SAINTS MARY & ELIZABETH MED 1 (Voluntary Nonprofit, Church) Nonprofit CHICAGO IL ESKENAZI HEALTH 9 (Governmental, County) Governmental INDIANAPOLIS IN UNIVERSITY OF IOWA HEALTH CARE MEDIC 10 (Governmental, State) Governmental IOWA CITY IA BROADLAWNS MEDICAL CENTER 9 (Governmental, County) Governmental DES MOINES IA UNIVERSITY OF LOUISVILLE HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit LOUISVILLE KY UNIVERSITY MEDICAL CTR. AT NEW ORLEA 2 (Voluntary Nonprofit, Other) Nonprofit NEW ORLEANS LA OCHSNER LSU HEALTH SHREVEPORT 2 (Voluntary Nonprofit, Other) Nonprofit SHREVEPORT LA EAST JEFFERSON GENERAL HOSPIAL 2 (Voluntary Nonprofit, Other) Nonprofit METAIRIE LA UNIV OF MD CAPITAL REGION MED CTR 2 (Voluntary Nonprofit, Other) Nonprofit LARGO MD MERCY MEDICAL CENTER 1 (Voluntary Nonprofit, Church) Nonprofit BALTIMORE MD MARYLAND GENERAL HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit BALTIMORE MD CAMBRIDGE HEALTH ALLIANCE 13 (Governmental, Other) Governmental MALDEN MA BOSTON MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BOSTON MA HENRY FORD HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit DETROIT MI HURLEY MEDICAL CENTER 12 (Governmental, City) Governmental FLINT MI ASCENSION ST JOHN HOSPITAL 1 (Voluntary Nonprofit, Church) Nonprofit DETROIT MI HENNEPIN COUNTY MEDICAL CENTER 9 (Governmental, County) Governmental MINNEAPOLIS MN UNIVERSITY OF MISSISSIPPI MEDICAL 10 (Governmental, State) Governmental JACKSON MS UNIVERSITY HEALTH TRUMAN MED CENTER 2 (Voluntary Nonprofit, Other) Nonprofit KANSAS CITY MO SSM HEALTH ST. MARYS HOSPITAL - STL 1 (Voluntary Nonprofit, Church) Nonprofit ST. LOUIS MO Appendix B Qualifying High Need Hospitals as of January 22, 2026 UNIVERSITY HEALTH LAKEWOOD MED CTR 2 (Voluntary Nonprofit, Other) Nonprofit KANSAS CITY MO UNIVERSITY MEDICAL CENTER 9 (Governmental, County) Governmental LAS VEGAS NV NEWARK BETH ISRAEL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit NEWARK NJ ST. JOSEPHS UNIVERSITY MEDICAL CENT 1 (Voluntary Nonprofit, Church) Nonprofit PATERSON NJ TRINITAS HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit ELIZABETH NJ HOBOKEN UNIVERSITY MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit HOBOKEN NJ JERSEY CITY MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit JERSEY CITY NJ UH - UNIVERSITY HOSPITAL 10 (Governmental, State) Governmental NEWARK NJ UNIVERSITY OF NEW MEXICO HOSPITAL 10 (Governmental, State) Governmental ALBUQUERQUE NM ST. JOSEPHS MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit YONKERS NY BRONXCARE HEALTH SYSTEM 2 (Voluntary Nonprofit, Other) Nonprofit BRONX NY JAMAICA HOSPITAL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit JAMAICA NY NASSAU UNIVERSITY MEDICAL CENTER 9 (Governmental, County) Governmental EAST MEADOW NY RICHMOND UNIVERSITY MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit STATEN ISLAND NY MOUNT SINAI ST. LUKES ROOSEVELT HOSP 2 (Voluntary Nonprofit, Other) Nonprofit NEW YORK NY NEWYORK-PRESBYTERIAN/QUEENS 2 (Voluntary Nonprofit, Other) Nonprofit FLUSHING NY THE BROOKLYN HOSPITAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BROOKLYN NY MONTEFIORE MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BRONX NY LINCOLN MEDICAL&MENTAL HEALTH CENTER 12 (Governmental, City) Governmental BRONX NY JACOBI MEDICAL CENTER 12 (Governmental, City) Governmental BRONX NY ELMHURST HOSPITAL CENTER 12 (Governmental, City) Governmental ELMHURST NY MOUNT SINAI HEALTH SYSTEM-BETH ISRAE 2 (Voluntary Nonprofit, Other) Nonprofit NEW YORK NY FLUSHING HOSPITAL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit FLUSHING NY MAIMONIDES MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BROOKLYN NY NYC HEALTH + HOSPITAL / SOUTH BROOKL 12 (Governmental, City) Governmental BROOKLYN NY METROPOLITAN HOSPITAL CENTER 12 (Governmental, City) Governmental NEW YORK NY NYC HEALTH+HOSPITAL/KINGS COUNTY 12 (Governmental, City) Governmental BROOKLYN NY BELLEVUE HOSPITAL CENTER 12 (Governmental, City) Governmental NEW YORK NY ST. JOHNS RIVERSIDE HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit YONKERS NY ERIE COUNTY MEDICAL CENTER 9 (Governmental, County) Governmental BUFFALO NY Appendix B Qualifying High Need Hospitals as of January 22, 2026 WYCKOFF HEIGHTS MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BROOKLYN NY QUEENS HOSPITAL CENTER 12 (Governmental, City) Governmental JAMAICA NY BROOKDALE HOSPITAL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit BROOKLYN NY WESTCHESTER MEDICAL CENTER 10 (Governmental, State) Governmental VALHALLA NY HARLEM HOSPITAL CENTER 12 (Governmental, City) Governmental NEW YORK NY UNIVERSITY HOSPITAL AT DOWNSTATE 10 (Governmental, State) Governmental BROOKLYN NY EPISCOPAL HEALTH SERVICES 2 (Voluntary Nonprofit, Other) Nonprofit FAR ROCKAWAY NY WOODHULL HOSPITAL CENTER 12 (Governmental, City) Governmental BROOKLYN NY SBH HEALTH SYSTEM 2 (Voluntary Nonprofit, Other) Nonprofit BRONX NY CAPE FEAR VALLEY MEDICAL CENTER 9 (Governmental, County) Governmental FAYETTEVILLE NC S.E. REGL MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit LUMBERTON NC CAROLINAS MEDICAL CENTER 11 (Governmental, Hospital District) Governmental CHARLOTTE NC METROHEALTH MEDICAL CENTER 13 (Governmental, Other) Governmental CLEVELAND OH OSU MEDICAL CENTER 10 (Governmental, State) Governmental TULSA OK OU MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit OKLAHOMA CITY OK OHSU HOSPITAL AND CLINICS 13 (Governmental, Other) Governmental PORTLAND OR TEMPLE UNIVERSITY HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit PHILADELPHIA PA UPMC MAGEE-WOMENS HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit PITTSBURGH PA ALBERT EINSTEIN MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit PHILADELPHIA PA SAN JUAN MUNICIPAL HOSPITAL 8 (Governmental, City-County) Governmental SAN JUAN PR UNIVERSITY DISCTRICT HOSPITAL 10 (Governmental, State) Governmental SAN JUAN PR REGIONAL ONE HEALTH 2 (Voluntary Nonprofit, Other) Nonprofit MEMPHIS TN DALLAS CO. HOSP. DIST. 11 (Governmental, Hospital District) Governmental DALLAS TX UNIVERSITY MEDICAL CENTER OF EL PASO 11 (Governmental, Hospital District) Governmental EL PASO TX TCHD D/B/A JPS HEALTH NETWORK 11 (Governmental, Hospital District) Governmental FORT WORTH TX KNAPP MEDICAL CENTER 2 (Voluntary Nonprofit, Other) Nonprofit WESLACO TX UNIVERSITY HEALTH SYSTEM 11 (Governmental, Hospital District) Governmental SAN ANTONIO TX HARRIS HEALTH SYSTEM 11 (Governmental, Hospital District) Governmental BELLAIRE TX UNIVERSITY MEDICAL CENTER 11 (Governmental, Hospital District) Governmental LUBBOCK TX VCU HEALTH SYSTEM MCV HOSPITAL 13 (Governmental, Other) Governmental RICHMOND VA HARBORVIEW MEDICAL CENTER 9 (Governmental, County) Governmental SEATTLE WA Appendix B Qualifying High Need Hospitals as of January 22, 2026 CABELL HUNTINGTON HOSPITAL 2 (Voluntary Nonprofit, Other) Nonprofit HUNTINGTON WV Appendix C High Need Hospitals Dedicated to Underserved Patients Front Line Multimission Vulnerable Community Hospitals Endangered Small Rural PPS Exempt High- Medicaid or Specialty Childrens Hospital Definition Public urban teaching hospital 100 beds with CMI 1.3; IRB 0.17 (or 100 residents) and Medicare DPP 35%; or a nonprofit teaching hospital that meets the IRB and CMI criteria and if 100-1000 beds has a DPP 45%, or if 1000 beds, a DPP 55%. Independent, public or nonprofit 500 with either beds 65% DPP or Medicare + Medicaid days 85% Public or nonprofit rural hospitals with SCH, CAH, Low-Volume or MDH status 100 beds; and a provider-based physician adjustment as % of net patient revenue and a net loss from service to patients as % of net revenue of greater -20% combined; PPS Exempt public or nonprofit childrens hospital under Medicare that has either at least 45% Medicaid inpatient utilization, or is a specialty childrens hospital Explanation of Definition These hospitals have high disproportionate patient percentages (DPP), high teaching, and high tertiary care, the combination of which renders them financially distressed. The nonprofit hospitals have higher thresholds to meet than public hospitals which are by their governance structure accountable to the people of their state or community. These are independent community hospitals that have no other designation and are very high in either DPP or both Medicare and Medicaid combined, which are poor payers, particularly for outpatient services, rendering them financially vulnerable. These are small rural hospitals that are especially endangered due to their high net patient revenue loss and for many, high cost of subsidizing physicians to serve in rural areas. These are high-Medicaid childrens hospitals disproportionately serving Medicaid/CHIP beneficiaries, or specialty childrens hospitals dedicated to unique vulnerable population, such as children with cancer or major orthopedic medical conditions or requiring long term care. Number of qualifying hospitals 124 of 3319 Urban Hospitals 87 of 1619 Independent Community Hospitals (5129 Community Hospitals) 598 of 1,810 Rural Community Hospitals 67 PPS Exempt Childrens Hospitals Current HRSA Child Site Definition Memorial ED Ortho Surg Parent Site ( Depts located in 100 Hospital 100 Broad St. main building not registered Broad St. CCN 50.01 as Child Sites) CCN 91.00 100 Broad St. Parent Site Gen Med 1 Gen Med 2 Gen Med 3 3 Different Child Sites b/c 300 Smith St. 400 Acorn St. 500 Maple St. different locations and ccNs CCN 90.00 CCN 90.01 CCN 90.02 even though same General Medicine service line 1 Child Site b/c same location, Pathology Lab Hematology Lab General Lab 3 different departments 100 Smith St. 100 Smith St. 100 Smith St. within lab service line CCN 60.00 CCN 60.00 CCN 60.00 3 Different Child Sites b/c 3 different service lines and Gen CCNs, even though same Outpt Cardiology Neurology location Surgery 200 Smith St. 200 Smith St. 200 Smith S Medicare Cost Report Line (CcN) = Service Line (ortho, psych, lab) Department = Type of Service Line (gen lab, path lab, hem lab) CCN 69.0 CCN 70.00 CCN 50.00 Location = Physical Address Current HRSA FLHA Proposed Child Definition = 10 Radiology Site Definition = 1 Child Sites at 200 200 Smith St. Child Site at 200 Smith St. CCN 54.00 Smith St. Pathology Lab General Lab Hematology Lab Gen 200 Smith St. 200 Smith St. Specialty 200 Smith St. CCN 60.00 Peds Peds CCN 60.00 CCN 60.00 200 Smith 200 Smith St. CCN St. CCN Gen Med Gen Med 90.05 90.04 Gen Med Clinic #2 Clinic #3 Clinic #1 200 Smith St. 200 Smith St. 200 Smith St. CLEANER A CCN 90.01 CCN 90.02 CCN 90.00 Unnecessarily SIMPLER F complicated by ALL having to register STAKEHOL multiple service Multiple s lines (CCN) and Cardiology Neurology lines (CCN Surgery departments 200 Smith St. 200 Smith St. 200 Smith St. departm even though only but only CCN 50.00 CCN 69.0 CCN 70.00 one location on location Form 855 Form 8 PARENT SITE (on campus) FLHA Proposed Definitions CHILD OFF-SITE LOCATIONS (off campus) Memorial Ortho Surg ED Gen Med 1 Gen Med 2 Gen Med 3 100 Hospital 100 Broad St. 300 Smith St. 400 Acorn St. 500 Maple St. Broad St. CCN 50.01 CCN 90.00 CCN 90.01 CCN 90.02 CCN 91.00 100 Broad St. Pathology Lab General Lab 100 Broad St. 100 Broad St. Neurology CCN 60.00 CCN 60.00 Gen 200 Smith St. CCN 70.00 Surgery Peds Cardiology 600 Smith St. 200 Smith St. 200 Smith St. CCN 90.04 CCN 50.00 GI CCN 69.0 300 Broad St. Specialty Peds Hematology Lab Outpt Psych #1 600 Smith St. CCN 50.00 200 Smith St. 200 Broad St. CCN 90.05 CCN 60.00 CCN 90.06 Endocrinology Dermatology Outpt Psych #2 300 Broad St. 300 Broad St. 200 Broad St. CCN 90.07 CCN 90.08 CCN 90.06 Every physical site - whether parent, child onsite CHILD ON-SITE LOCATIONS (on campus) or offsite - is verifiable on CMS Form 855 All Stakeholder Insurer's Pre Restriction PBM 5 CE's PBM Contracting Toa dministor dire Employers Model Manufacturer discount R Wholesaler Medicare CMS Medicaid DOV Administrator (TPA) R Hospital Contract 340B Pharmacy VUSRCARD Bv Dtieccune Cand IE 340B ESP Insurer's Clearinghouse PBM for Contract CE's PBM To administer dire t patiens Employers Pharmacy Manufacturer discounts Restrictions R Switch 1 p Wholesaler 340B ESP Medicare CMS Medicaid Hospital Contract 340B Pharmacy JUSRCARD Re Doruanet Cael -- Rebate Pilot Insurer's Model PBM with concurrent 3 CE's PBM Toa dminisfer Contract Manufacturer di Employers discounts Pharmacy Restrictions Switch and - pa IRA Rebates Wholesaler BEACON Medicare CMS Third Party Medicaid DOV Administrator (TPA) R Hospital Contract Pharmacy 340B USRCARD Re Dacmne Canl N2 Stakeholder Insurer's Clearinghouse PBM Model 5 CE's PBM dministor with concurrent Manufacturer dir patient Employers IRA Rebates and R Switch Medicaid DD Clearinghouse Wholesaler for receiving data, Prevention processing claims, purchasing drugs, reporting, Medicare CMS calculating patient discounts, dispersing rebates, Medicaid oV preventing duplicate Administrator discounts. m R Hospital Contract Pharmacy 340B USRCARD Bs Dicounr Canl = HRSA Current Patient Definition Current HRSA Patient Definition Problems with Current Patient Definition 1. CE has established a relationship with 1. Provider relationship is undefined and not the individual, such that the covered time limited. entity maintains records of the individual's health care; and 2. Relationship between HC professional and The individual receives health care CE is overly vague. 2. services from a health care 3. Fails to account for academic relationships professional who is either employed by (e.g. faculty practice plan and hospital), the CE or under contractual or other and HRSA has prohibited academic medical arrangements (e.g. referral for centers with separate faculty practice plans consultation) such that responsibility from utilizing 340B drugs, thus forcing for the care provided remains with the higher copays for patients at HOPDs. covered entty; and Challenging to track with rotating 3. If the CE is not a DSH hospital, the residents. individual receives a health care service or range of services which is 5. Some states ban hospital ownership of MD consistent with the grant funding or practices (CA, TX, TN - corporate practice FQHC/look-alike status provided to the of medicine eentity. Front Line Alliance Proposed Patient Definition What is it? Why these changes? Patient means an individual with whom the covered entity has This provides detail around the relationship between the CE, established a provider-patient relationship as evidenced by the clinical provider, and the medical service being provided. following: This clarifies referral relationships and how to establish that 1. The clinical provider of the medical service the responsibility for care remains with the CE hospital a. Is either contracted or employed by the CE hospital; because the medical record of the CE hospital shows the b. Is providing such service pursuant to an agreement for the referral and the consultation notes from the clinical provider covered entity to provide medical education with another to whom the patient was referred. hospital or a medical school; or The 18 month time stamp from when a medical service is Has delivered the medical service pursuant to a referral by such clinical provider under (a) or (b) and the primary provided establishing 340B patient eligibility has a clear end esponsibilitly of care is retaind by the referring CE, with date if there are no other services provided, and is easily such referral to and consultation by the clinical provider ascertainable. 18 months allows sufficient time for patients receiving such referral being evidenced in the medical who are late rescheduling their annual visits and is half the record. time that AHA says is a patient, which is 3 years. 2. The provision of a medical service by the covered entity This recognizes the unique situation of academic medical provider to the patient at a registered parent or child site centers and allows a relationship between the hospital and of such hospital within 18 months of such service, faculty group practice plan that doesn't require turning all including care provided remotely; and those doctor offices into HOPD's with higher copays for A medical record of the hospital, thorouthly documenting patients and costs to insurers. 3. the medical service received. The Congress should NOT impose additional requirements, Medical service means medical evaluation, care, or treatment such as tying the prescription to the reason for the service, as patients with comorbidities are seen for multiple reasons by provided by the CE hospital via a clinical provider described in providers, and this would be impossible to track and (1), regardless of whether a prescription is ordered. mplement and shouldn't matter as long as within 18 months of the original service.
HRSA-2026-0001-2082Jefferson Health2026-04-20T04:00Z27,795 chars
Response by Jefferson Health attached. 1 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 Via Online Submission to www.FederalRegister.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Jefferson Health Corporation, on behalf of its health system affiliates (a 33-hospital integrated delivery and finance system with campuses in Eastern Pennsylvania and New Jersey; collectively, Jefferson Health), is grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Jefferson Health urges HRSA to continue the upfront discount model that has worked successfully for decades. We further urge HRSA not to implement a rebate model under the 340B program, because any rebate mechanism will impose enormous costs and burdens on Jefferson Health that far outweigh any benefits that might come from it. By increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by HHS would needlessly place a large percentage of Jefferson Healths safety net support funds at risk. The costs and burdens to Jefferson Health are detailed in Section II of this letter. In Section I of this Letter, in response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process, Jefferson Health offers preliminary, overarching comments about the inherent flaws in any rebate model. 2 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 I. Inherent flaws in any rebate model. 1. Manufacturers interest in deduplication should not outweigh Covered Entities interests in caring for patients. In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Price for a given purchasernot both. (Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d))). Congress placed the deduplication compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug (42 U.S.C. 1320f-6), and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug (42 U.S.C. 256b(d)(1)(B)(vi)). In contrast, a rebate model would shift this compliance burden and its associated costs from the manufacturer where Congress placed it to Jefferson Health and other Covered Entities.1 With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes. Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). Jefferson Health is unaware of any statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Covered Entities when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, chose to place it on manufacturers. 1 Further, HRSA is arbitrarily extending the duplication burden beyond the Medicare program, but to all patients, where no risk of duplication exists. While manufacturers may argue there is risk of duplication with formulary rebates paid to health plans, those agreements are commercially negotiated. Manufacturers could instead offer the reduced acquisition price directly to pharmacies to pass along directly to patients and health plans but choose not to. If any model is enacted, it should be limited to Medicare and Medicaid where duplication could occur between MFP and the Medicaid Drug Rebate Program (MDRP). 3 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 2. Any rebate model necessarily creates financial incentives for Covered Entities to disclose their patients Protected Health Information (PHI), contrary to and outside of the regulatory framework of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Jefferson Health is unaware of any law, policy, or other factors that justify moving patients PHI outside the HIPAA regulatory framework. We are also unaware of any statute or regulation that permits Covered Entities to disclose PHI to drug manufacturers that operate rebate models. Yet, a rebate model asks that we do both, not in the best interest for patients, but rather for financial gain of manufacturers. Likewise, for this simple reason, any rebate model will necessarily put the financial interests of a Covered Entity at odds with the privacy interests of patients. This perverse financial incentive to disclose patient data is the precise opposite of the financial incentives and behaviors that HRSA should be encouraging. 3. Drug manufacturers will almost certainly use Covered Entities patient data for purposes other than MFP deduplication. Jefferson Health is deeply concerned about how manufacturers will use our patients data. Manufacturers demand our data, and Second Sight Solutions (Second Sight) extracts a perpetual license allowing them to use and profit from it. Second Sight is a for- profit company that operates the 340B ESP web platform, and Second Sight is, in turn, owned by a for-profit consulting company, Berkley Research Group. In 2025, every manufacturer pursuing a rebate model selected Second Sights Beacon platform as its sole rebate administrator. Manufacturers forced Covered Entities, including Jefferson Health, to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates. Because a 340B rebate is simply a retrospective pricing adjustment not payment for patient care the scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and limiting the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, 4 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. If a rebate model is approved, HRSA should strictly limit manufacturers to use the data for MDPNP and MDRP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are manufacturers not required to compensate Covered Entities for that value? If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. II. RFI Response 1. Payment timing and potential cash flow impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Jefferson Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Under a rebate model, Jefferson Health would need to float the cost difference between Wholesale Acquisition Cost (WAC) and 340B pricing while waiting for rebates. In effect, Covered Entities will be required to provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. An internal calculation utilizing Jefferson Healths historical 340B qualifying purchase data of invoices over the preceding 12-month period demonstrated that we would, annually, be floating hundreds of millions of dollars to drug companies while awaiting the 340B rebate. Further, Jefferson relied on the current 340B program structure in crafting its agreements with wholesale distributors by negotiating discounts on purchases made via 340B accounts. By shifting this volume abruptly to WAC accounts, there is not just float 5 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 expense, but substantial increases in drug acquisition costs as we lose pricing discounts that exist with wholesalers. For Jefferson Health, this could lead to over $40M in increased drug spend annually. Both the delayed rebate and foregone discount will have a meaningful impact on our institution and the patients we serve. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Jefferson Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. These cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. The timing of these new financial burdens could not be worse. Many Covered Entities are still recovering from the financial shock of the Covid-19 pandemic and are serving the public on razor thin (or negative) operating margins. These cash flow disruptions will arrive at a time when Covered Entities are facing a host of other financial challenges that jeopardize their ability to deliver care to the patient population Congress most intended to benefit when it established the 340B Program. Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. While Jefferson Health urges HRSA not to implement a rebate model at all, if one is implemented, it would need to include standardized adjudication procedures including reasonable timeline for claims submission at minimum aligned with existing timely filing criteria, clear timelines for manufacturer responses, and an independent and realistic mechanism for resolving disputes. Without these safeguards, Jefferson Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 2. Administrative costs under a potential 340B rebate program. Any rebate program would require Jefferson Health to spend significant sums on new administrative costs. Jefferson Health designed its hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount 6 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Jefferson Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes Third Party Administrators (TPA) to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. Increased staffing would be a main driver of new administrative costs. Jefferson Health, like other Covered Entities, would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, compile claims to submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. In this model, Jefferson Health would be responsible for submission of hundreds of thousands of claims. The pharmacy revenue cycle team required to operate properly would be substantial given the volume of patients served. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. 3. Data Collection and Claims Submission by Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 7 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through the 340B ESP platform. That is incorrect. Jefferson Health currently utilizes a TPA for 340B program management in addition to administration data from the Electronic Medical Record (EMR) matched with purchase data from the wholesaler. The 340B program integrity team uses this data to audit the program to ensure claims are carved into the program compliantly. We also engage with an external consultant to perform an independent audit of the program each year. Jefferson Health does not routinely transmit detailed claims data directly to manufacturers as part of standard pharmacy operations. Existing data exchanges are limited in scope, purpose, and recipients. A rebate model would significantly expand the volume, elements, and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Jefferson Health would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. While many are quick to point out there are established real-time claims data submission processes for pharmacy claims, it misses the nuance of operating a pharmacy, especially those pharmacies like Jefferson Healths which serve indigent populations. Many claims dispensed to patients without insurance or covered through Jefferson Healths Financial Assistance Program do not adjudicate as insured claims, as they are not sent to a switch provider for insurance adjudication (since there is no insurance coverage). Submission of these claims would require custom business rules and new data exchange processes which do not exist today among the variety of pharmacy billing systems used by our pharmacy network. Given this complexity, in a 340B rebate model, Jefferson Health risks losing the 340B discount on these medications, where unequivocally obtaining the 340B discount is most critical. Further, medical claims data reside in the EMRs, and associated billing systems are not structured for automated external sharing with TPAs. In the absence of a direct interface, Jefferson Health relies on manual processes which include data extraction, reconciliation, validation, formatting, transmission, and ongoing maintenance and acceptance handling. These are labor intense activities, error-prone and not feasible to do at scale given the large number of patient encounters. Across both pharmacy and medical claims, Jefferson Health is required to submit accurate claims. The shift to a rebate model creates great uncertainty and potential complexity in meeting these obligations. On claims for certain patients/payers where 8 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 Actual Acquisition Cost (AAC) is not only a required data element, but a data point used in the determination of reimbursement, Jefferson Health is forced into an untenable position. It could place bill holds on these claims until rebates are paid (assuming Jefferson Health can indeed submit for a rebate prior to billing the claim), so the AAC is populated at the net 340B price. Jefferson Health could initially bill at the WAC, and subsequently rescind and rebill the claim if a 340B rebate is paid on the claim, at a significant administrative burden and cost. Or finally it could submit a claim with the higher WAC cost, without rebilling if the rebate is not considered part of the acquisition, causing significant increased medical expenses to those programs serving the members most in need of the discount. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Jefferson Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. Jefferson Health would be required to modify existing billing and data workflows, integrate multiple internal and external platforms, establish secure data transmission and audit controls, and build robust reconciliation, reporting, and denialtracking capabilities. Additional financial system configuration and standardized identifier mapping would be needed to support accurate claim submission, payment tracking, and compliance. At a time when HHS is messaging a campaign to decrease administrative work for providers, this change drastically increases the administrative complexity of operationalizing a provider-led program. 4. Reliance Interests. The RFI invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will or reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Jefferson Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. We include 340B savings 9 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 projections in our annual hospital budgets, which allows us to reinvest in patient programs within the same year, expanding access to critical services without delay. A fundamental switch now would disrupt these settled reliance interests engendered by the Agencys prior policy. Absent any identified problems with the upfront discount model that could not otherwise be addressed in less disruptive ways and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism. 5. Problems With the Beacon IT Platform. Jefferson Health now uses Second Sight Solutions Beacon IT platform for MFP rebate submissions under the IRA. In the few weeks that we have participated in that Program, we encountered serious problems with Beacon. Most worrying, MFP rebate claims are being improperly denied as 340B without any legitimate justification. Jefferson Health is now left to disprove a negative that the claims were not, in fact, 340B and manufacturers have effectively shifted the burden of deduplication to Covered Entities. To dispute the improperly denied MFP rebates, Jefferson Health is now required to accept non-negotiable and grossly unfavorable terms and conditions on the ESP platform to submit our patients data to manufacturers. Attempts to negotiate or submit redlines to ESP were rejected. Jefferson is now left with the choice to lose money on each of these claims or acquiesce to unfavorable terms and conditions and submit even more patient data to manufacturers. Further, Beacons data requirements were frequently unclear and changed over time. MFP rebate claims are flagged or reclassified based on data Beacon appeared to source or reconcile against external systems, sometimes using outdated eligibility information. We have limited transparency into how data is evaluated or corrected once issues are identified. Beacons Customer Support was inconsistent and often ineffective. Online support requests yield little or no resolution. Issues such as account access problems, missing invitations, and data questions required repeated follow-up or escalation. In practice, phone calls were more effective than written support channels, which delayed resolution and increased the administrative burden on Jefferson Health without any notable improvement in claims or payment integrity. 10 Baligh, R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson Jefferson Center 1101 Market Street, 31st Philadelphia, PA 19107 III. Conclusion For all these reasons, Jefferson Health urges HRSA to continue the upfront discount model that has worked successfully for decades. Jefferson Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. Further, Jefferson Health is committed to 340B Program integrity and is willing and engaged to work with HRSA to address all stakeholder concerns in a way that does not unilaterally disadvantage and harm Covered Entities. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Jefferson Health and other Covered Entities to comment on the specifics of its new program, including the timeline for implementation. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, data submission processes, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of how the program will impact Covered Entities and, thereby, the communities served through reinvestment of 340B Program savings. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, Baligh R. Yehia, MD, MPP, MSc, FACP President, Jefferson Health & Executive Vice President, Jefferson April 20, 2026
HRSA-2026-0001-2083Carilion Medical Center2026-04-20T04:00Z9,962 chars
Carilion Medical Center - DSH490024 (340B Rebate Model RFI) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Carilion Medical Center (340B Model Number DSH490024) (Carilion), located in Roanoke, Virginia, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Carilion that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Carilion has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. We have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over CMC Response to Rebate Model RFI Dated April 20, 2026 Page 2 2 delays and denials, and therefore less money that Carilion can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Carilion to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Carilion understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We will incur additional upfront and ongoing costs to retain a third-party vendor to assist with claims processing, data submission, claims reconciliation, and audit support. Additional full-time staff may need to be hired and/or current staff time diverted to addressing a rebate program, including challenge denials. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We currently submit pharmacy claims data through 340B ESP for certain drug manufacturers. A Rebate Program would require us to submit all medical claims data for every drug in the program. Each drug manufacturer may have different data submission requirements, which need to be monitored, and new coding would need to be developed to address the demand. This expanded data collection would require additional one-time and recurring work by internal IT resources and third-party vendors. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Carilion to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Given experience since January 2026 with the Maximum Fair Price (MFP) initiative, even if drug companies paid within a 10-day period as required under the prior CMC Response to Rebate Model RFI Dated April 20, 2026 Page 3 3 iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A reduction in cash on hand could materially impact Carilions financial position and its ability to comply with liquidity requirements, including those tied to bond obligations and other financial agreements. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Carilion will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in meaningful ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Carilion reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few months since the inception of the MFP initiative, we have encountered problems with Beacon, including delayed response times, inaccurate 340B designation of some drugs, and software technical issues. Any software platform that is used for a potential 340B Rebate Program should have the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. CMC Response to Rebate Model RFI Dated April 20, 2026 Page 4 4 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Carilion, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Carilion respectfully submits that the costs of any Rebate Program will significantly outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Carilion and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Tim Auwarter System Vice President and 340B Authorizing Official Carilion Medical Center Roanoke, Virginia
HRSA-2026-0001-2084Children's Hospital Association2026-04-20T04:00Z17,001 chars
The Children's Hospital Association's comments are attached. 600 13th St., NW | Suite 500 | Washington, DC 20005 | 202-753-5500 16011 College Blvd. | Suite 250 | Lenexa, KS 66219 | 913-262-1436 ChildrensHospitals.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, As the nations leading advocate for childrens health, the Childrens Hospital Association (CHA) appreciates the opportunity to comment on the Request for Information: 340B Rebate Model Pilot Program. While we recognize the Health Resources and Services Administrations (HRSA) effort to establish a transparent framework to evaluate the feasibility of a rebate mechanism, we must express our strong opposition to the implementation of a 340B rebate model. We urge you to abandon the rebate model concept due to the significant financial strain on childrens hospitals and administrative burdens that risk diverting resources away from pediatric patient care. Additionally, we are deeply concerned that adopting such a rebate model would establish a precedent for expanding rebate requirements to other drugs which could undermine the integrity and intent of the 340B program. As currently constructed, the 340B program provides vital support to childrens hospitals that are part of academic and larger health care systems and more than 50 self-governing childrens hospitals that take part in the program. The 340B program helps offset low Medicaid reimbursement rates and allows childrens hospitals to stretch resources as far as possible, reaching more eligible pediatric patients and providing more comprehensive services. Often times, these childrens hospitals are the only source of these services and community support. Childrens hospitals depend on the 340B program to provide children from low-income families with access to life-saving medications, and our hospitals have used the savings to partially subsidize the cost of providing critical services that that are underfunded, such as behavioral health services and hemophilia treatment centers. Savings from the 340B program also allows childrens hospitals to purchase critical lifesaving drugs for cancer treatments, cell and gene therapies, and other expensive medicines necessary to treat numerous pediatric medical conditions. This support is crucial for children to access novel therapies for rare diseases, such as pediatric Spinal Muscular Atrophy and Duchenne Muscular Dystrophy, among others. Additionally, 340B savings have provided our hospitals with the resources they need to open pediatric subspecialty clinics to serve patients closer to their homes. Our response to the RFI focuses on critical considerations to ensure that the 340B Program continues to fulfill its statutory purpose of supporting access to safe, effective, and affordable health care for our nations children. Below we provide detailed responses to the specific questions outlined in the RFI. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate model would impose a significant administrative burden on childrens hospitals, requiring them to invest in new resources that far exceed the administrative expectations of the existing upfront discount 600 13th St., NW | Suite 500 | Washington, DC 20005 | 202-753-5500 16011 College Blvd. | Suite 250 | Lenexa, KS 66219 | 913-262-1436 ChildrensHospitals.org model. These added requirements would alter how childrens hospitals operate their 340B programs and redirect institutional capacity away from patient care. Based on early preparations for the initial rebate pilot program and existing 340B Electronic Submission Platform (ESP) reporting requirements, our hospitals project significant increases in labor and operational costs. For example, one hospital estimates that developing the necessary infrastructure to generate audit and reconciliation reports would require between 80 and 160 hours of staff time as a onetime cost, while onboarding and training new personnel to manage rebaterelated workflows would require at least 160 hours. The implementation of external consulting and audit support will be necessary to assess rebate eligibility, ensure data integrity, and maintain proper controls over manufacturer submissions, further inflating costs. In addition, childrens hospitals would incur increased administrative and legal expenses if they need to challenge denial decisions when drug companies choose not to provide appropriate 340B discounts. Navigating dispute resolution and appeals processes would necessitate routine engagement of legal counsel, driving up costs and complexity. In addition, rebate models introduce ongoing reconciliation requirements to match claims, payments, and rebatesan administratively intensive process that may strain hospital operations and increase the risk of delayed or incomplete reimbursement. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program The implementation of a rebate model will force childrens hospitals to hire additional staff or reallocate existing personnel away from patient care to manage data submissions and compliance. These responsibilities go well beyond current 340B program operations and would fundamentally alter how covered entities manage program participation. Several institutions estimate the need for at least one additional full-time equivalent (FTE) and in some cases, at least four or five additional 340B analysts solely to manage data collection, formatting, submission, conduct internal audits, respond to and appeal denials, and navigate varying manufacturer- specific processes and rebate tracking. Importantly, this estimate reflects only a baseline scenario; staffing needs would increase significantly if additional manufacturers or drugs are incorporated into the rebate program over time. One hospital estimates that for every 20 drugs, at least one additional FTE would be needed for payment and reconciliation tasks. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Childrens hospitals have designed their technological systems and operational infrastructure in reliance on an upfront discount model. A transition to a post-sale rebate mechanism would require hospitals to fundamentally reconfigure these systems, incurring substantial and unavoidable costs in order to invest in new software and redesign workflows. Under the prior iteration of the pilot program, each drug manufacturer was permitted to develop its own data submission process and IT platform. With the initial list of 10 drugs involving nine different manufacturers, covered entities would have been forced to navigate nine distinct systems and protocols. Many of our hospitals current systems are not designed to support manufacturer-specific, claim-level tracking, particularly for hospital outpatient purchases or the external reporting required under this model. 600 13th St., NW | Suite 500 | Washington, DC 20005 | 202-753-5500 16011 College Blvd. | Suite 250 | Lenexa, KS 66219 | 913-262-1436 ChildrensHospitals.org A rebate model would require hospitals to extract, link, and validate data across multiple platforms, imposing significant operational complexity and requiring substantial time, technical expertise, and financial investment to maintain data integrity. For example, most electronic health record systems do not currently include functionality to incorporate 340B pricing at the point of sale and retrospective manufacturer rebate validation. Developing this functionality would necessitate costly application builds and expansions, expenses that would directly reduce the net benefit of the 340B program for childrens hospitals and limit their ability to reinvest savings into patient care. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program The downstream effects of a 340B rebate model could jeopardize patient-centered initiatives and workforce development programs supported by participating childrens hospitals. Resources generated through 340B savings are routinely reinvested in essential services that address unmet community needsservices that would be difficult or impossible to maintain if those resources were reduced or eliminated. Many of our hospitals use 340B-supported resources to provide over-the-counter medications and basic health supplies to families who cannot afford them and whose Medicaid coverage does not typically include these items. By meeting these basic needs, hospitals help prevent avoidable emergency department utilization and promote access to care in lower-cost settings. Furthermore, 340B savings support efforts to address workforce shortages. Pharmacies nationwide face persistent pharmacy technician shortages, limiting access to pharmacy services. In response, one of our hospitals launched an accredited pharmacy technician training program, creating career pathways for community members while strengthening the pharmacy workforce. These investments demonstrate how 340B supports both patient care and long-term system stability. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate mechanism will force covered entities to purchase medications at the full list price, placing a substantial financial strain on childrens hospitals that must advance significant funds with the expectation of future rebate reimbursement. This approach jeopardizes the financial stability of childrens hospitals and may compromise their ability to deliver essential care to children. Childrens hospitals qualify for 340B precisely because a significant shortfall exists between the cost of pediatric care and Medicaid payment. The fiscal uncertainty associated with billing Medicaid under this model is especially acute for childrens hospitals, where on average, over 50 percent of patients are covered by Medicaid/CHIP.1 The current lack of uniform Medicaid billing practices across states compounds this risk. Hospitals would be forced to advance full drug costs without predictable alignment between Medicaid reimbursement and receiving the rebate. In light of the Medicaid payment shortfall, layering a rebate model on top of this system would worsen childrens hospitals financial exposure through substantial upfront drug costs. Our hospitals estimate they would need to pay anywhere from a few hundred thousand to several million dollars upfront for the 10 1 Annual Benchmark Report (ABR), Fiscal Year 2023. 600 13th St., NW | Suite 500 | Washington, DC 20005 | 202-753-5500 16011 College Blvd. | Suite 250 | Lenexa, KS 66219 | 913-262-1436 ChildrensHospitals.org pilot drugshighlighting how this model shifts the financial risk from manufacturers to childrens hospitals that are operating on tight budget constraints. Cash flow constraints may compel childrens hospitals to limit purchases of high-cost or specialty drugs at full list prices. This situation can lead to delayed therapy initiation, particularly concerning for infusion, oncology, and specialty treatments that require significant upfront acquisition costs and immediate commencement, thereby directly impacting patient access to critical medications and overall care outcomes. In addition, the rebate model would also disproportionately disadvantage childrens hospitals due to the unique characteristics of pediatric dosing. Smaller, weight-based doses mean pediatric hospitals accumulate drug volume more slowly, significantly delaying eligibility for rebate submission when full package sizes are required. As a result, childrens hospitals would be required to carry unreimbursed drug costs for extended periods, further compounding financial strain and diminishing resources available for patient care. Data Collection by Covered Entities A rebate mechanism would impose significant new data collection, reporting, and compliance burdens on childrens hospitals. A standard timeline for hospitals to submit rebate-related data does not reflect operational realities and is significantly more complex to implement in practice. As mentioned above, childrens hospitals in particular face unique operational and financial challenges in accessing drug rebates due to the specialized nature of pediatric care. Unlike adult hospitals, pediatric institutions often administer significantly smaller dosage units, which delays the accumulation of quantities sufficient to meet the minimum package size required for rebate submission. These realities make rigid or standardized reporting timelines particularly impractical for pediatric providers. In addition, the timing of data submission is dependent on the full claims lifecycle, including billing, reconciliation, and resolution of potential payer disputes, all of which can delay the availability of finalized and accurate data. To meet manufacturer and program requirements, hospitals would be required to conduct frequentpotentially dailydata validation, reconciliation, and auditing activities. These expanded reporting and audit obligations would represent a significant administrative burden, requiring additional staffing and resources. Finally, manufacturers may require Health Insurance Portability and Accountability Act (HIPAA)-protected patient data for rebate validation, which raises concerns about data privacy, regulatory compliance, and operational feasibility of participating hospitals. Childrens hospitals may feel compelled to establish Business Associate Agreements (BAAs) to ensure that each manufacturer will appropriately safeguard personal health information and comply with HIPAA. However, it remains unclear whether manufacturers or other technology platforms that would operationalize the rebate model will accept standard BAAs or enforce their own contractual frameworks, adding more complexity to the process. Manufacturer Efforts to Avoid Duplicate Discounts Children's hospitals are committed to enhanced 340B program integrity and have adapted their 340B programs to prevent duplicate discounts. We encourage HRSA to account for the distinct arrangements 600 13th St., NW | Suite 500 | Washington, DC 20005 | 202-753-5500 16011 College Blvd. | Suite 250 | Lenexa, KS 66219 | 913-262-1436 ChildrensHospitals.org childrens hospitals have made to refine their 340B compliance practices and align with evolving rules and guidance. Many childrens hospitals already participate in shared savings or reconciliation arrangements with their state Medicaid programs to address duplicate discount concerns. Under these models, states invoice hospitals based on the estimated value of 340B discounts received for drugs dispensed to Medicaid patients, accounting for rebates the state otherwise would have claimed from manufacturers. Hospitals then remit an agreed-upon portion of their 340B savings to the state, effectively making the state whole and preventing duplicate discounts without creating additional reporting or rebate mechanisms. If the ten pilot drugs are subject to differing billing practices across states, it could create substantial burdens for childrens hospitals and risk triggering duplicate discounts where manufacturers are inappropriately charged both a 340B discount and a Medicaid rebate for the same drug. Such outcomes would undermine program integrity and expose childrens hospitals to compliance risk despite their good- faith efforts to adhere to all requirements. Conclusion We appreciate the opportunity to provide feedback on the 340B rebate model RFI. We urge HRSA to carefully consider the real-world implications of this policy shift and to abandon the rebate model pilot. If you choose to move forward with the rebate model, we ask you to allow childrens hospitals and other covered entities to comment on the specifics of the new program. We remain committed to working collaboratively with HRSA to preserve the integrity of the 340B program and ensure continued access to essential medications and health care services for pediatric patients. Please contact Natalie Torentinos at Natalie.Torentinos@childrenshospitals.org or (202) 753- 5372 should you need more information. Sincerely, Aimee Ossman VP, Policy
HRSA-2026-0001-2085(no commenter metadata)2026-04-20T04:00Z8,878 chars
On behalf of South Plains Rural Health Services, H80CS00721, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. The proposed 340B Rebate Model Pilot Program is not only a financial threat to our CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Our CHC would needs to start limiting the medications we are able to provide to our patients in order to survive financially if this program were approved. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of South Plains Rural Health Services, Inc (SPRHS), I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community and we are submitting this public response to strongly advocate against the proposed changes moving the program towards a rebate model. Who Is South Plains Rural Health Services? SPRHS is an FQHC operating clinics in the West Texas communities of Levelland, Lamesa, and Big Spring. We provide comprehensive medical, dental, and pharmacy services to over 9800 patients a year in a service area covering 15 west Texas counties. Over 90% of our patients have income below the Federal poverty line, over 60% are completely uninsured, and the majority of our service area is designated as a HRSA Health Professional Shortage Area. As is the case for many FQHCs, we are the only viable option for many patients to access affordable healthcare, the only clinic they can go to where they can know for a fact that cost will not be a barrier to care. The 340B program, which weve been enrolled in since 1992, has been vital to sustaining our affordable and accessible services. We operate 3 in-house pharmacies exclusively (no contract pharmacies) and every dollar of 340B savings is used to support operations and provide sliding fee scale discounts to our low income and un/underinsured patient population. With decades of audits and reviews we have never had a single instance of duplicate discount, a testament to our conservative approach to compliance. Financial Impact of 340B Rebate Model SPRHS utilizes 340B savings to efficiently stretch federal dollars. For less than $1.7 million at 340B prices, SPRHS pharmacists directly provide over 85,000 prescriptions with an average cost to patients of less than $6. This is 340B savings at work in our community, helping people afford high cost medications like insulin, inhalers, and anticoagulants. SPRHS Rx filled 2025: 85475 Rx SPRHS 340B Rx Cost 2025: $1,626,301 Avg 340B Cost Per Rx 2025 $19.03 Avg Cost to Patient per Rx: $5.78 Increased Upfront Costs and Operating Capital If moved to an entirely rebate model, these same prescriptions purchased at Average Wholesale Price (AWP) would cost over $24 million, almost double the budget of the entire organization the year before. This would simply make the provision of pharmacy services infeasible. SPRHS Potential AWP Rx Cost 2025: $24,075,829 SPRHS Total Budget 2024: $12,238,896 In the limited pilot proposed here, operation costs would increase dramatically. Including only the drugs proposed to be covered under this pilot, the upfront cost of medications would increase by over $2.4 million in 2026, and over $3.4 million in 2027, just for that small selection of drugs. This is the upfront cost increase, AWP minus current 340B costs, with total costs reaching past $5 million in 2027 and beyond. For the pilot medications this represents a cost increase over those medications current 340B acquisition costs of over 5600x in 2026 and 3700x in 2027. For all drugs, this represents a total upfront spending increase of +52% in 2026 and +111% in 2027, more than doubling the currently required operating capital for pharmacy stock. 2026 Rebate Model Upfront Cost Increase +$2,472,410 2026 Spend Increase % Pilot Drugs Only +5602.71% 2026 Spend Increase % All Drugs +52% 2027 Rebate Model Upfront Cost Increase +$3,436,125 2027 Spend Increase % Pilot Drugs Only +3789.58% 2026 Spend Increase % All Drugs +111% With these upfront price increases stocking the affected medications would become a major liability, requiring SPRHS to redirect financial resources from providing medical and dental services. De facto this would make the drugs all but impossible to continue stocking. Increased Operating Expenses and Lost Revenue In addition to the higher upfront cost necessitating drastic increases in operating capital, there are the issues of both increased costs and decreased revenues. In consultation with Texas Association of Community Health Centers we estimate that approximately 15% of rebate claims will be disputed, delayed, or denied, resulting in an estimated loss or delay of over $370,000 in 2026 and $515,000 in 2027. Additionally we calculate that the additional administration of the rebate model would necessitate the equivalent of approximately 1.5 additional FTE technicians amounting to a total cost of $89,232. Estimated Rebate Claim Losses 2026: $370,862 Estimated Rebate Claim Losses 2027: $515,419 Estimated Rebate Administrative Costs: $89,232 These additional costs are equivalent of the clinics total annual spending to serve hundreds of patients. This damages the clinics ability to effectively stretch federal dollars to serve patients, redirecting those resources to unproductive administrative costs. Clinical Impact of 340B Rebate Model To minimize these new costs, SPRHS will have to minimize utilization of the medications affected by the Rebate Model. This means formulary policy that will exclude those medications wherever possible is going to be an inevitable result of any instituted rebate model. At SPRHS this would require providers to find alternatives for hundreds of patients and thousands of prescriptions. 2025 Rx Filled Pilot Drugs Only 4,494 2025 Unique Patients Pilot Drugs Only 979 There are no direct alternatives to many of the medications included in the rebate pilot. Patients will need to be changed to older, generic medications. Providers will need to consult formularies that will need to be updated with each new drug included, leaving fewer and fewer options. Many of these medications will not have direct generic equivalents, leaving very few options to providers. The total clinical impact cannot be easily measured but can be reliably predicted. One example would be Entresto, with studies showing that Entresto reduced heart failure hospitalizations by 20%, cardiovascular related morality by 14%, and all cause mortality by 11% compared to the generic alternative ACEi/ARB. Patients denied access to Entresto by the increased costs of a rebate model can be expected to incur this increased utilization and mortality. These costs will be inevitably be borne by not just the patient but the American public. Conclusion South Plains Rural Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. SPRHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. SPRHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Eric Lopez, MHA, RMA, CLSSGB at elopez1@sprhs.org. Sincerely, Judy Madura, MD CEO Judy Madura, MD CEO South Plains Rural Health Services, Inc. jmadura@sprhs.org
HRSA-2026-0001-2086Central Virginia Health Services2026-04-20T04:00Z1,354 chars
Central Virginia Health Services, Inc.(CVHS), an FQHC in VA since 1970 and seeing over 47,000 unique patients in 2025 is respectfully requesting the exclusion of FQHCs from the rebate model. The impact on our cash flow will be over a million dollars per month. That is just in the purchasing alone. This does not include the administrative costs in time and talent to manage this process. These additional costs will erode the already slim margins with which FQHCs operate and impact our ability to provide additional services and support staff to continue to provide care to our rural and urban FQHCs. FQHCs demonstrate we use the funds appropriately by reinvesting the funds into patient services and do not abuse the program. While the cash flow issue will impact the organization, that impact will disrupt the availability and access to medications for thousands of our patients as well. It may impact drugs we make available due to upfront costs or delay drug availability because we cant afford the investment in the inventory. FQHCs were one of the original intended entities and shouldnt be punished by rectifying other abuses of the program. Please reconsider allowing the pharmaceutical companies this to direct this program in this manner. This abuse benefits no one but the manufacturers who already report annual profits in record numbers.
HRSA-2026-0001-2087Carilion Rockbridge Community Hospital2026-04-20T04:00Z10,013 chars
Carilion Rockbridge Community Hospital -- CAH491304 (340B Rebate Model RFI) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Carilion Rockbridge Community Hospital (340B Model Number CAH491304) (Carilion), located in Lexington, Virginia, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Carilion that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Carilion has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. We have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over CRBH Response to Rebate Model RFI Dated April 20, 2026 Page 2 2 delays and denials, and therefore less money that Carilion can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Carilion to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Carilion understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We will incur additional upfront and ongoing costs to retain a third-party vendor to assist with claims processing, data submission, claims reconciliation, and audit support. Additional full-time staff may need to be hired and/or current staff time diverted to addressing a rebate program, including challenge denials. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We currently submit pharmacy claims data through 340B ESP for certain drug manufacturers. A Rebate Program would require us to submit all medical claims data for every drug in the program. Each drug manufacturer may have different data submission requirements, which need to be monitored, and new coding would need to be developed to address the demand. This expanded data collection would require additional one-time and recurring work by internal IT resources and third-party vendors. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Carilion to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Given experience since January 2026 with the Maximum Fair Price (MFP) initiative, even if drug companies paid within a 10-day period as required under the prior CRBH Response to Rebate Model RFI Dated April 20, 2026 Page 3 3 iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A reduction in cash on hand could materially impact Carilions financial position and its ability to comply with liquidity requirements, including those tied to bond obligations and other financial agreements. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Carilion will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in meaningful ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Carilion reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few months since the inception of the MFP initiative, we have encountered problems with Beacon, including delayed response times, inaccurate 340B designation of some drugs, and software technical issues. Any software platform that is used for a potential 340B Rebate Program should have the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. CRBH Response to Rebate Model RFI Dated April 20, 2026 Page 4 4 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Carilion, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Carilion respectfully submits that the costs of any Rebate Program will significantly outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Carilion and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Tim Auwarter System Vice President and 340B Authorizing Official Carilion Rockbridge Community Hospital Roanoke, Virginia
HRSA-2026-0001-2088Carilion Giles Community Hospital2026-04-20T04:00Z9,999 chars
Carilion Giles Community Hospital -- CAH491302 (340B Rebate Model RFI) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Carilion Giles Community Hospital (340B Model Number CAH491302) (Carilion), located in Pearisburg, Virginia, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Carilion that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Carilion has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. We have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over CGCH Response to Rebate Model RFI Dated April 20, 2026 Page 2 2 delays and denials, and therefore less money that Carilion can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Carilion to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Carilion understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. We will incur additional upfront and ongoing costs to retain a third-party vendor to assist with claims processing, data submission, claims reconciliation, and audit support. Additional full-time staff may need to be hired and/or current staff time diverted to addressing a rebate program, including challenge denials. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We currently submit pharmacy claims data through 340B ESP for certain drug manufacturers. A Rebate Program would require us to submit all medical claims data for every drug in the program. Each drug manufacturer may have different data submission requirements, which need to be monitored, and new coding would need to be developed to address the demand. This expanded data collection would require additional one-time and recurring work by internal IT resources and third-party vendors. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Carilion to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Given experience since January 2026 with the Maximum Fair Price (MFP) initiative, even if drug companies paid within a 10-day period as required under the prior CGCH Response to Rebate Model RFI Dated April 20, 2026 Page 3 3 iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A reduction in cash on hand could materially impact Carilions financial position and its ability to comply with liquidity requirements, including those tied to bond obligations and other financial agreements. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Carilion will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in meaningful ways. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Carilion reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few months since the inception of the MFP initiative, we have encountered problems with Beacon, including delayed response times, inaccurate 340B designation of some drugs, and software technical issues. Any software platform that is used for a potential 340B Rebate Program should have the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. CGCH Response to Rebate Model RFI Dated April 20, 2026 Page 4 4 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Carilion, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Carilion respectfully submits that the costs of any Rebate Program will significantly outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Carilion and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Tim Auwarter System Vice President and 340B Authorizing Official Carilion Giles Community Hospital Roanoke, Virginia
HRSA-2026-0001-2089Cayuga Health, a Member of Centralus Health2026-04-20T04:00Z9,157 chars
HHS Docket No. HRSA-2026-03042 April 15, 2026 Health Resources and Services Administration Attn: 340B Rebate Model Pilot Program Comments HHS Docket No. HRSA-2026-03042 Re: Comments on Administrative and Financial Burden of the 340B Rebate Model Program Dear HRSA Officials, On behalf of our organization, I appreciate the opportunity to provide feedback on the proposed 340B Rebate Model Program. While we support HRSAs goal of ensuring program integrity and equitable access to discounted medications, we are concerned about the significant administrative and financial burden the proposed model may impose on hospitals, especially on small organizations like ours. The current proposal appears to require complex data reporting, reconciliation processes and multi-party coordination that could divert critical staff time and resources away from direct patient care. Cayuga Health consists of two small hospitals. One is a Critical Access Hospital with 16 inpatient beds and servicing a nursing home. The other is a Disproportionate Hospital with 200 beds. Both hospitals service rural underserved communities. These patients would have to travel at least 45 minutes to receive care at another health care organization which could become a barrier for these patients to receive health care. The financial burden for our organization would be substantial and unsustainable if the 340B Rebate program is the standard. The upfront cost of the drugs at whole sale cost would be well over $4-5 Million. As a small organization, we do not have this as available cash flow. Our well-established oncology clinics would have the most negative impact because these clinics usually provide our covered entity with the most 340B savings. The cost of oncology medications at full price is exorbitant. We would not have the cash flow to purchase these medications at the same current volume while maintaining operating costs, placing a financial hardship onto the hospital and our patients. If we cannot purchase the medications due to inadequate cash flow, our patients may have to find another facility to receive care which is at least 45 miles away. This will cause a snowball effect in which we begin to lose our patients to other facilities. We are operating with limited administrative capacity with a team of two who have multiple job roles on top of managing 340B program. This 340B rebate program will put us at risk for not getting the 340B savings returned if we are unable to submit the claims in the allotted time and reconcile rejected claims. If we are unable to reconcile in a timely manner, we would not be able to resubmit rejected claims and 340B rebate would be lost. It can take up to 55 days before we see the return funds. With this delay, we would not have the available funds to support some services for our patients. In addition to reconciling the 340B rebates, we are also required to reconcile the Medicare Transaction Facilitator, part of the Medicare Drug Price Negotiation Program, to ensure the maximum fair prices were applied but also audit the 340B claims for duplications. There are also current claims submission requirements that demand more administrative work. At minimum, an additional staff of a full time FTE and possibly a second FTE would be required to audit, reconcile, and report complex data in the time allowed for both hospitals. This cost could be $100,000-200,000 including medical benefits. The integrity of our 340B can be at risk as managing the program would become much more complicated with the complex rules, processes and requirements. With the requirement of adding more staff, potential loss of 340B savings from denied claims, and providing upfront funds to purchase medications at full price, the available cash flow would be spread thin or non-existent. We may have to reduce the programs or services we provide to our patients which completely contradicts the purpose of the 340B program. We are currently having issues meeting the supply and labor demands without the 340B rebate program; therefore, it would be unsustainable with it. Reducing administrative complexity and not implementing the 340B Rebate Program will help ensure that the 340B program continues to fulfill its missionsupporting safety-net providers in delivering affordable medications and comprehensive care to underserved populations. Thank you for your consideration of these comments. We look forward to continued collaboration to strengthen the 340B program while minimizing unnecessary administrative strain and financial burden. April 15, 2026 Health Resources and Services Administration Attn: 340B Rebate Model Pilot Program Comments HHS Docket No. HRSA-2026-03042 Re: Comments on Administrative and Financial Burden of the 340B Rebate Model Program Dear HRSA Officials, On behalf of our organization, I appreciate the opportunity to provide feedback on the proposed 340B Rebate Model Program. While we support HRSAs goal of ensuring program integrity and equitable access to discounted medications, we are concerned about the significant administrative and financial burden the proposed model may impose on hospitals, especially on small organizations like ours. The current proposal appears to require complex data reporting, reconciliation processes and multi-party coordination that could divert critical staff time and resources away from direct patient care. Cayuga Health consists of two small hospitals. One is a Critical Access Hospital with 16 inpatient beds and servicing a nursing home. The other is a Disproportionate Hospital with 200 beds. Both hospitals service rural underserved communities. These patients would have to travel at least 45 minutes to receive care at another health care organization which could become a barrier for these patients to receive health care. The financial burden for our organization would be substantial and unsustainable if the 340B Rebate program is the standard. The upfront cost of the drugs at whole sale cost would be well over $4-5 Million. As a small organization, we do not have this as available cash flow. Our well-established oncology clinics would have the most negative impact because these clinics usually provide our covered entity with the most 340B savings. The cost of oncology medications at full price is exorbitant. We would not have the cash flow to purchase these medications at the same current volume while maintaining operating costs, placing a financial hardship onto the hospital and our patients. If we cannot purchase the medications due to inadequate cash flow, our patients may have to find another facility to receive care which is at least 45 miles away. This will cause a snowball effect in which we begin to lose our patients to other facilities. We are operating with limited administrative capacity with a team of two who have multiple job roles on top of managing 340B program. This 340B rebate program will put us at risk for not getting the 340B savings returned if we are unable to submit the claims in the allotted time and reconcile rejected claims. If we are unable to reconcile in a timely manner, we would not be able to resubmit rejected claims and 340B rebate would be lost. It can take up to 55 days before we see the return funds. With this delay, we would not have the available funds to support some services for our patients. In addition to reconciling the 340B rebates, we are also required to reconcile the Medicare Transaction Facilitator, part of the Medicare Drug Price Negotiation Program, to ensure the maximum fair prices were applied but also audit the 340B claims for duplications. There are also current claims submission requirements that demand more administrative work. At minimum, an additional staff of a full time FTE and possibly a second FTE would be required to audit, reconcile, and report complex data in the time allowed for both hospitals. This cost could be $100,000-200,000 including medical benefits. The integrity of our 340B can be at risk as managing the program would become much more complicated with the complex rules, processes and requirements. With the requirement of adding more staff, potential loss of 340B savings from denied claims, and providing upfront funds to purchase medications at full price, the available cash flow would be spread thin or non-existent. We may have to reduce the programs or services we provide to our patients which completely contradicts the purpose of the 340B program. We are currently having issues meeting the supply and labor demands without the 340B rebate program; therefore, it would be unsustainable with it. Reducing administrative complexity and not implementing the 340B Rebate Program will help ensure that the 340B program continues to fulfill its missionsupporting safety-net providers in delivering affordable medications and comprehensive care to underserved populations. Thank you for your consideration of these comments. We look forward to continued collaboration to strengthen the 340B program while minimizing unnecessary administrative strain and financial burden.
HRSA-2026-0001-2090Northland Cares2026-04-20T04:00Z7,921 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Northland Cares Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Northland Cares appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. How changes in 340B will change the ability to keep staff and help clients with transportation, housing, medication, co-pays, and food assistant. At Northland Cares, we take pride in delivering a full spectrum of outpatient services for individuals living with HIV/AIDS and providing essential prevention services for those at risk in northern Arizona. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. 2 A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. This would directly impact the medications, co- pays, and services that we would be able to provide to our patients. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. This would directly affect our ability to pay bills and staff and to provide resources to our clients. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and management costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. 3 Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what effect the change would have on current administrative costs. This would directly affect our ability to pay bills and staff and to provide resources to our clients. Comment on the impact of these incremental costs under your current operations. This would directly affect our ability to pay bills and staff and to provide resources to our clients. Indicate whether implementation would require additional FTEs or cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. Quantify where possible. This would directly affect our ability to pay bills and staff and to provide resources to our clients. Provide estimated costs for system development, procurement, maintenance, or integration, and specify whether any such costs would be one- time or recurring. This would directly affect our ability to pay bills and staff and to provide resources to our clients. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Nick Adams, Executive Director, 928-642-7700. Sincerely, Nicholas Adams Executive Director Northland Cares
HRSA-2026-0001-2091Community Health Center of Southeast Kansas, Inc.2026-04-20T04:00Z30,317 chars
See attached file(s) IIIIIEEI Community Health Center of Southeast Kansas April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice, Application Process for the 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Director Britton, On behalf of Community Health Center of Southeast Kansas, Inc. (CHC/SEK), I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed 340B Rebate Model Pilot Program (Rebate Model). CHC/SEK is a Federally Qualified Health Center (FQHC) located in southeast Kansas, historically the poorest and most underserved part of the state. Services are provided at more than fifty (50) sites across thirteen (13) counties, in both Kansas and Oklahoma. In 2025, we served 85,636 patients with medical, dental, behavioral health, imaging, support and pharmacy services. No one is turned away due to insurance status or ability to pay. We have provided access to 340B medications through in-house pharmacies since 2007 and now have a network of nine (9) in-house pharmacies, as well as forty-four (44) contract pharmacies, that help to ensure that no one goes without critically needed medications. We are writing today to express our concerns with the Rebate Model and our strong opposition to including FQHCs, as well as less burdensome alternatives that should be considered. The 340B Drug Pricing Program (340B Program) as it exists today, enables our health center to purchase outpatient medications at significantly reduced prices, which in turn allows us to provide affordable medications to thousands of low-income, uninsured, and underinsured patients. Changing this core concept would be a devastating blow for covered entities, who rely on these savings to support valuable patient services. On average, CHC/SEK saves our eligible patients over $940,000.00 per month on the twenty-five (25) proposed rebate drugs, thanks to the 340B Program. If a rebate model were to be implemented, not only would it inhibit our ability to get these patients their medications, but it could also result in the loss of other services funded by 340B savings, including dental, behavioral health, school health outreach, and expanded operating hours, which are crucial for many patients who cannot afford to miss work. HHS Docket No. HRSA-2026-03042 Page 1 of 10 mil Community Health Center of Southeast Kansas In preparation for the original Rebate Model Pilot Program, set to go live January 1, 2026, our staff spent countless hours constructing a workflow, building pharmacy software functions and forecasting budget issues to ensure that we could survive the model's impacts. Valuable time and resources currently allotted to program compliance and patient care were diverted to finding ways to comply with this new, burdensome policy. The initial calculations were significant, indicating a $1.79M (418%) increase in monthly inventory expenses. This increased inventory cost would exacerbate existing cash flow issues brought on by manufacturers' previous policies, which decreased our 340B contract pharmacy savings by thirty-five percent (35%) over the last year. For the 2025 fiscal year, CHC/SEK completed 561,014 3408 transactions with an estimated administrative cost of $871,280.57. This figure includes three (3) full-time equivalents (FTEs) plus partial hours from two (2) additional pharmacy employees, third party administrator (TPA) fees, contract pharmacy dispensing fees, annual external audits, and health information network (HIN) registrations required for claims data submission. If the Rebate Model were to become effective, CHC/SEK would need to compensate for the additional upfront cost of drugs at WAC pricing, onboarding additional employees, ongoing training for providers and pharmacy staff, patient education, ongoing updates to the point-of-sale system to facilitate upfront 340B cash pricing, new workflows, new TPA and pharmacy software reports, collecting and submitting accurate data, reconciling payments and disputing any errors, and manually correcting financials to reflect rebate pricing. At least one (1) permanent FTE would be necessary to manage the program initially, and we would expect to hire more staff at the rate of one (1) FTE per twenty-five (25) additional drugs. The anticipated increase in expenses would be $1.95M in the first year alone, excluding any potential loss for unpaid rebates. Further reductions in cash flow would put CHC/SEK's patient services at risk, notably our sliding fee discount plan, which attributed to over $6.1M in clinical and pharmaceutical discounts for fiscal year 2024. This sliding system allows our most vulnerable patients to access their medications at 340B acquisition cost, with zero ($0) dispensing fee. The financial strain of the Rebate Model could force us to dip into cash reserves that are typically saved for emergencies, in order to maintain business as usual. We would likely forfeit existing wholesaler discounts for paying bi-weekly, as our anticipated decrease in cash flow may not allow us to continue our current payment arrangements. Similarly, even if manufacturers were able to provide payment within a ten (10) day timeframe, that would not guarantee that we have the funds in our account to cover invoices as they come due. For example, our invoices are due on the first and fifteenth of each month. lf we purchased a costly drug on the tenth of the month, no rebate would be available to pay that invoice due on the fifteenth of the month. It is also imperative to note that any expenses brought on by a Rebate Model would be in addition to the extensive amount of time and resources we have already been forced to dedicate to complying with ongoing policy changes. The newly implemented Medicare Maximum Fair Price (MFP) system currently takes an estimated sixteen (16) hours per week to manage with ten (10) drugs. Fifteen (15) more drugs will be included next year, and a total of forty (40) drugs are expected by 2028. Aside from the staffing HHS Docket No. HRSA-2026-03042 Page 2 of 10 Community Health Center of Southeast Kausas required to oversee this process, we are also seeing delays in payments for weeks-to-months. This is thousands of dollars that CHC/SEK counts on for patient care, but is unable to access, while we wait for resolution. Navigating contract pharmacy restrictions further eats into our resources. We have incurred associated expenses from our TPAs to manage this process and even with the required claims data submissions, we only expect to restore 340B pricing access for three (3) of the twenty (20) participating manufacturers, due to their more stringent policy updates. Most recently, we are being required to collect and submit data to retain 340B access at our in-house pharmacies for four (4) manufacturers (and certainly more to come). The lack of standardization from manufacturers and the need to use multiple internal systems to manage and report required data imposes financial and operational hardships. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential rebate model, which will ultimately impact the most underserved patients nationwide. Another crucial consideration is the mission of the 340B program itself, to help safety-net providers "stretch scarce federal resources as far as possible". Imposing a rebate model that forces FQHCs to jump through hoops and float loans to billion-dollar drug companies certainly does not achieve that goal. Instead, it generates harmful consequences for the patients we serve. The medications included in the Rebate Model can be incredibly expensive at WAC price, meaning our pharmacies may not be able to stock drugs that we would typically keep on our shelf, leading to delays in treatment or lack of availability altogether. Accordingly, we may be forced to change patients' treatment plans to align with more affordable alternatives, which introduces significant clinical risk. Each of these scenarios contribute to adverse health outcomes, which could easily be avoided by maintaining the existing upfront discount model. CHC/SEK has dedicated immense resources to improving the overall health outcomes of our patients, who are historically among the poorest and sickest in the state. We have been awarded Community Health Center Quality Recognition badges for being national quality leaders in both diabetes and heart health, preventative health, and improving health care access, among others. CHC/SEK additionally places a direct focus on managing chronic conditions, which helps to lower the rate of hospital visits and lessens the strain on our hospital systems. A Rebate Model stands to unravel the treatment progress made by thousands of patients. One of the most fundamental services that contributes to the successful treatment of our patients is CHC/SEK's contract pharmacy agreements. These pharmacies have always played a vital role in serving our 340B eligible patients, especially considering the rural locations of our clinics. CHC/SEK currently partners with forty-four (44) pharmacies to increase access to affordable medications. For many, the nearest entity-owned pharmacy is an hour or more away, which is not only inconvenient, but completely infeasible. Having access to affordable medication at local contract pharmacies helps increase medication adherence and improve overall health outcomes. Over the past five (5) years, manufacturers have made it almost impossible to care for our patients through these contract pharmacy relationships with their restrictive policies. While a few will allow bill-to, ship-to arrangements for the HHS Docket No. HRSA-2026-03042 Page 3 of 10 Community Health Center of Southeast Kagsas timely and expensive submission of claims-level data, most of the twenty (20) participating manufacturers refuse to honor 340B pricing for any covered entity who has even one (1) in-house pharmacy available. As we serve patients at twenty-eight (28) clinics spread out over hundreds of miles, one (1) contract pharmacy clearly will not support the need that exists. The result is hundreds of drugs, many of which are critical (insulins, inhalers, etc.) now being out of reach for patients, and a seventy- three percent (73%) decrease in 3408 contract pharmacy savings, which are used to support patient services, since the start of these policies in 2020. These pharmacies experienced even further disruption in January 2026, when MFP became effective. There is no guidance on how to compliantly fill 340B Medicare prescriptions for the applicable drugs at contract pharmacies. Unfortunately, the MFP system is not even capable of processing data accurately for our in-house pharmacies at this time, so we do not expect contract pharmacy guidance anytime soon, meaning that thirty (30) more drugs will likely become inaccessible for contract pharmacy patients in the next two (2) years. Based on our experience with the MFP platform (ESP), which is the same platform that would be used in the Rebate Model, and the historical practices of manufacturers, we do not anticipate that providing the data manufacturers are demanding will furnish any relief for our contract pharmacy patients. Instead, a Rebate Model will only create additional difficulty for administrative staff who are already stretched thin, and more struggle for contract pharmacies who do not have the time or capability to calculate upfront 340B discounted pricing. CHC/SEK does not disagree that transparency is needed, however, the current method is doing more harm than good. The Rebate Model seeks to uproot the thirty (30) year standard under which the 340B Program has operated. As the infrastructure has always included an upfront discount model, that is in turn how all systems have been designed to operate. Pharmacy software, for example, is not equipped to factor in post-purchase rebates. It is not designed to absorb external price files, making pharmacy staff responsible for manually calculating a patient's discount and pricing, posing a significant risk for human error. It cannot offer reliable reporting, making it impossible to determine the actual profit or loss on a claim without going into each individual dispense and adjusting the price from WAC to 340B, only after manually reconciling to confirm that the claim was indeed paid a rebate. There also appears to be no mechanism in place for pharmacies who utilize a central fill system where one pharmacy's claims data may be tied to an invoice associated with another pharmacy's inventory order. Even though the data submitted would be accurate, this complexity will likely cause errors within the ESP system, which could lead to manufacturers mistakenly terminating our 340B purchasing ability. CHC/SEK's contract pharmacy TPAs will be required to create additional functionality and reporting, for which they will pass the cost down to covered entities through increased fees. We are also charged an ongoing $50.00 monthly, per-pharmacy fee for the TPA to upload the required data. In regards to reconciliation, the TPAs would have no way to see if or how much we received in rebates, and no way to apply those amounts to each individual claim, once again resulting in unreliable data. HHS Docket No. HRSA-2026-03042 Page 4 of 10 Community Health Center of Southeast Kansas State Medicaid plans would also be impacted by a rebate model. The State of Kansas requires covered entities to bill all 340B Medicaid Fee-for-Service claims with the discounted, 340B acquisition cost. In these instances, we would be billing for the estimated 340B price before knowing whether or not we will actually receive that price. Medicaid would then reimburse based on the discounted acquisition cost, and if we were to not receive a rebate, there would be no way to recoup the WAC insurance reimbursement that we should have received. This system opens the door for the potential over or undercharging of patients, significant cash flow issues, and unpredictable financial losses. At this time, it does not seem as though manufacturers will be able to guarantee with absolute certainty, that covered entities will receive complete and accurate payments within the mentioned ten (10) day timeframe. After working with the designated rebate platform over the last four (4) months to effectuate the MFP program, we can say with certainty that it is a flawed system requiring heavy oversight, and the time and complexity involved often leads to payments not being made until well after the identified twenty-one (21) day timeframe. We are four (4) months into this process, and the system is still paying us when it should not be for claims appropriately marked with the requested 340B identifier, and not paying us for retail claims that should be paid, submitted without the identifier. The credit process is difficult at best; the average response time on a good faith inquiry (their preferred method for communication) is three (3) weeks, and frankly this process does not seem like good faith on the manufacturer's part. Their "resolution" for rectifying retail claims, that their system incorrectly identified as 340B (even though no claim identifier was present), is to require entities to submit all of the 340B data for a random invoice that they have associated with the retail dispense in question. This process does nothing to prove that the retail dispense was filled with a drug purchased at retail price, that would be better demonstrated by submitting the retail invoice associated with that dispense. The fact that manufacturers have chosen the existing method proves that they are simply fishing for additional data that they don't truly need to identify MFP rebate eligible prescriptions. To date, we have seen eighty-eight percent (88%) of our MFP retail claims be denied for rebate. This equates to $19,924.78 that we had to file good faith inquires (GFI) and submit unrelated claims data for, in order to receive payment so far. The process is time consuming and it takes an average of three (3) weeks to receive a deposit from the date a GFI is approved. This process is further drawn out if there are any issues along the way. For example, we have experienced two (2) separate instances where the GFI requested claims data for an invoice that did not even belong to our pharmacy. We sent multiple follow- up messages for assistance but did not receive a resolution for twenty-nine (29) days. The payment was deposited exactly twenty-one (21) days later, resulting in a fifty (50) day turnaround. CMS has not proved helpful in disputing these issues either. In the event that a GFI does not resolve a matter, the next step is to file a complaint with CMS. We have submitted several complaints, and we have received few answers. The most recent answer was for a GFI that was approved and stated that payment would be received in "up to three (3) weeks". After five (5) weeks with no payment, we filed a HHS Docket No. HRSA-2026-03042 Page 5 of 10 Community Health Cellter of Southeast Kansas complaint with CMS and the response we received was, "If your issue is not resolved within the timeframe referenced by the manufacturer in the GFI, you may submit a new complaint". Even if these manufacturers were able to provide payments within ten (10) days of the completed data submission, the previously proposed rebate pilot allowed covered entities up to forty-five (45) days to submit data. This means the potential time from dispense to rebate could be up to fifty-five (55) days. CHC/SEK has been submitting data for entity-owned pharmacies every two (2) weeks, if we were able to maintain this standard, we would expect to see payments every twenty-four (24) days at best, which still would not align with our fifteen (15) day invoicing agreement. It is also critical to recognize the difference between the impact of MFP versus the impact of the Rebate Model. On average, CHC/SEK is owed $10,000.00 a month for MFP drugs, and over $6,600.00 of those payments were received more than twenty-one (21) days after the dispense date. That is a projected $80,000.00 annually that we will not have in our account at the time invoices are due. While this strain on cash flow is still a hardship, it would be minimal compared to the effects of the Rebate Model. CHC/SEK's current dispense volume for the twenty-five (25) proposed drugs is 1,813 fills per month, with an average acquisition cost of $236 per script. The Rebate Model would increase that average to $1,228 perscript, pending manufacturer rebates for nearly $1.8M each month. lf even a fraction of these payments were denied or delayed it could be catastrophic. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased visibility for manufacturers, it has significantly reduced transparency for covered entities. We have been subject to unpublished standards as a condition of 340B pricing, with very limited portions of the determination process being shared with Community Health Centers (CHCs), like CHC/SEK. Manufacturers have essentially been allowed to govern the 340B Program and implement whatever unilateral policies they see fit, with zero regard for their statutory obligations. They continue to push their agenda at the expense of America's healthcare safety-net and will continue to do so until meaningful guidance is enforced. CHC's cannot continue to operate and provide affordable services to those in need, if manufacturers are consistently coming up with new ways to cut down the 340B Program. It is imperative that federal guidance be written to ensure that all parties receive needed transparency without violating the clear intent of the 340B Program. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a Rebate Model would undermine, not strengthen, the integrity of the 3408 Program. The basis for the Rebate Model is simply that manufacturers want to mitigate duplicate discount, and increase transparency. Both of these goals can be very easily accomplished while still maintaining the existing upfront discount model. CHC/SEK takes pride in our compliant use of the 340B Program, and the resources the 340B Program provides to us. We submit timely and accurate data to HRSA's Uniform Data System (UDS), complete regular on-site visits, and perform annual external audits. CHC/SEK also completes monthly audits of both in-house and contract pharmacy claims and pushes out consistent education to our clinical staff. HHS Docket No. HRSA-2026-03042 Page 6 of 10 Community Health Center of Southeast Kansas CHC/SEK believes that deduplication of 340B claims could be best achieved through two (2) key steps: 1. A neutral clearinghouse This would be the most effective way to satisfy the goals of each party, with the least burden. a. One platform could address all concerns, identifying duplicate discount (both Medicaid and duplicate covered entity claims for the same units of drug), and transmitting eligible data to the Medicare Transaction Facilitator to identify rebate eligible MFP claims. b. This process would provide all necessary data to the appropriate parties, thereby eliminating the confusion of each manufacturer enforcing different contract and in- house pharmacy policies via a variety of platforms. c. It would provide peace of mind to covered entities that claims data is secure, not being shared with any other parties, and not being used for any purposes other than what is allowed by statute. d. Any suspected instances of duplicate discount could be submitted to the covered entity for review and retrospectively credited or debited if necessary. i. If manufacturers had concerns based on the data received from the clearinghouse, they may use the proper channels and initiate a good faith inquiry or OPA-approved audit to investigate further. e. This alternative is much cheaper and far less burdensome than the Rebate Model. It prevents the need for covered entities to spend millions of dollars intended for patient care on technological updates and increased drug costs. f. It is also worth noting that contract pharmacy restrictions were the direct result of manufacturers "suspicion" of duplicate discount. Considering that a clearinghouse would resolve this concern, there would be no reason why contract pharmacy restrictions should remain in place. For a clearinghouse to succeed, it must be viewed as truly neutral and trustworthy by all stakeholders, and not work in favor of any one party. Requirements for payer information, in regards to any data shared with manufacturers, should be prohibited as this information is not necessary to deduplicate claims. Nor should covered entities be required to submit purchasing data, this would be unnecessarily duplicative since it has very clearly been demonstrated by ESP that 340B invoices are readily available to manufacturers. 2. A universal Medicaid database It is currently impossible to identify every single Medicaid plan that exists, which increases the risk for duplicate discount. Since the consequences for any incidence of duplicate discount ultimately fall on the covered entity, it is pertinent that reasonable accommodations be made to provide CHCs with the necessary information to comply with federal 340B Medicaid guidance. HHS Docket No. HRSA-2026-03042 Page 7 of 10 Community Health Center of Southeast Kansas a. Implementing a uniform BIN/PCN/Group structure for these plans would make it much easier for pharmacy staff to identify if a patient is using a fee-for-service or managed care Medicaid plan when processing claims, drastically reducing the risk for duplicate discount. b. All Medicaid plans should be uniform and easily identifiable (for example 123456/MCAID/KS for a Kansas Medicaid plan) and published on 340B OPAIS or some other public federal website. c. Having a single, national standardized system would prevent manufacturers from having to navigate fifty (50) different state processes. d. State Medicaid agencies would no longer need to fund their own systems to identify 340B claims, instead they could rely on a single, national data source. The clearinghouse would share 340B Medicaid claims data with state agencies to prevent the submission of ineligible claims for manufacturer rebate. This two-part proposal would mitigate cash-flow challenges by preserving the upfront discount, ensure accurate patient pricing at point-of-sale, substantially reduce administrative burden by utilizing one platform for all objectives instead of multiple systems, remove the time needed for staff to track and reconcile payments, and provide manufacturers with the same deduplication abilities within the same forty-five (45) day window. While we are confident that the solution offered above would be a more efficient and effective method, if the Rebate Model were to be implemented, strict safeguards would need to be put in place to ensure that covered entities receive timely and accurate payments. 1. A Rebate Model must limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. 2. If a rebate request is denied, manufacturers must provide claim-level documentation with a specific and permissible basis tied directly to statutory requirements. Ideally, this would include standardized, publicly defined denial categories. a. If this cannot be completed, rebates must be paid, and manufacturers must revert to the processes described in HRSA's 1996 Manufacturer Audit Guidelines, including conducting good faith inquires and OPA-approved audits. 3. Payment must be received within ten (10) calendar days. If a dispute is filed it should be addressed and resolved within three (3) business days, and the subsequent payment should be received within ten (10) calendar days from the date of resolution. 4. Data may not be shared with any other parties, and will only be used for deduplication purposes. a. Currently, manufacturer collected data may be used by drug makers to reduce their rebate payment liabilities to commercial PBMs, prompting the PBMs to discriminate against 340B providers to make up for lost profit. HHS Docket No. HRSA-2026-03042 Page 8 of 10 Community Health Center of Southeast Kansas b. PBMs may also use this data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all of the above. 5. HRSA should identify the internal resources needed to monitor manufacturer compliance, covered entities should not be required to police manufacturers' behavior through repeated appeals or the administrative dispute resolution process. a. Statistics should be made publicly available via HRSA's website, including: i. How many claims are denied, and for what reason; ii. How many denials are overturned; iii. Any instance of late payments; iv. Percentage of claims where genuine duplicate discount occurred; and v. Rebate dollars paid out by each manufacturer, broken down by National Drug Code (NDC). 6. Framework should be clearly enforced, any instance of failure to pay both timely and accurately should carry a heavy fine. Repeated failures should result in removal from the Rebate Model. 7. All manufacturers must be required to use the same platform, to prevent complication. 8. Payment must be made by unit. 9. A clear policy must exist for how to collect rebates on expired or damaged inventory. CHCs should not be required to forfeit 340B pricing for these anomalies. 10. There must be a formal procedure in place for when a CHC's data does not align with manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, manufacturers' logic often differs from that used by CHCs, especially for locations that utilize virtual inventory. This can cause data misalignment, even when the entity is fully compliant with the 340B Program requirements, resulting in covered entities erroneously being cut off from 340B purchasing. For all the reasons discussed herein, CHC/SEK strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B Programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A Rebate Model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHC/SEK believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HHS Docket No. HRSA-2026-03042 Page 9 of 10 CommunitNealth Center of theastakarisas CHC/SEK appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Daniel Creitz, dcreitz@chcsek.org. Daniel S. Creitz Senior Vice President, Chief Compliance Officer Community Health Center of Southeast Kansas, Inc. HHS Docket No. HRSA-2026-03042 Page 10 of 10
HRSA-2026-0001-2092University of Michigan HealthSparrow Clinton2026-04-20T04:00Z15,689 chars
See attached file(s). Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: University of Michigan HealthSparrow Clinton (UM HealthSparrow Clinton) appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect UM HealthSparrow Clintons experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments University of Michigan HealthSparrow Clinton is a Joint Commissionaccredited Critical Access Hospital (CAH) located in St. Johns, Michigan, serving Clinton County and the surrounding rural communities of Mid-Michigan. With 25 licensed beds and a Level IV Trauma Center, UM Health Sparrow Clinton has provided compassionate care to the residents of Clinton County for nearly 100 years. The hospital has earned Pathway to Excellence designation from the American Nurses Credentialing Center, and its affiliated St. Johns Primary Care practice was the first in the United States associated with a critical access hospital to earn The Joint Commissions Gold Seal of Approval for Primary Care Medical Home (PCMH) Certification. As part of the University of Michigan Health network, UM HealthSparrow Clinton connects rural patients to the expertise and resources of one of the nations top-ranked academic health systems. As a Critical Access Hospital and 340B-participating covered entity, UM HealthSparrow Clinton serves as an essential lifeline for patients in rural Clinton County who would otherwise face significant barriers to accessing affordable healthcare and medications. The 340B program is foundational to our ability to sustain these vital services and fulfill our mission to provide quality, compassionate care to every patient, every time. During the most recent fiscal year, UM HealthSparrow Clinton processed 16,538 340B transactions (limited to ambulatory pharmacies), and currently invests approximately $220,000 annually in third-party administrators and compliance infrastructure to maintain our 340B program. Transitioning to a rebate-based structure would impose disproportionate financial and administrative burdens on a small rural hospital like ours, as these are burdens that a large urban health system might absorb but that a 25-bed Critical Access Hospital simply cannot sustain. UM HealthSparrow Clinton firmly opposes the proposed 340B Rebate Model Pilot Program. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on University of Michigan HealthSparrow Clinton. Under a rebate model, University of Michigan HealthSparrow Clinton would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $35,000 in additional cost, given that we typically hold a two- week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the currently listed MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. Beyond the inventory carrying cost, University of Michigan HealthSparrow Clinton anticipates approximately $3,000 per month in denied rebate claims under a rebate model, and absent appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would represent a permanent and recurring financial loss that diverts scarce resources away from direct patient care. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Clinton strongly disagrees with HRSAs assessment that these impacts would be minimal. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and expanded administrative staffing. These are not temporary transition costs; they are permanent structural burdens. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for University of Michigan HealthSparrow Clinton. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between purchase and rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning University of Michigan HealthSparrow Clinton would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the rebate structure as proposed. If rebate eligibility is conditioned on demonstrating patient administration or dispensing, no mechanism exists to eliminate the inherent gap between purchase and repayment. Preferable alternatives would include structuring the program as a consignment model, where covered entities are not charged at WAC until a drug is administered, or allowing the purchase to be made at the upfront 340B price but reclassified to WAC only if data is not submitted within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter our data management obligations in ways our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms, which requires the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that data required for rebate adjudication does not align with information stored in our current systems. Pharmacy claims are processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide the accurate, comprehensive, contemporaneous data that a rebate model would demand. Under a rebate model, we would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts, all of which would be ongoing and resource-intensive obligations. We strongly recommend that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. For pharmacy claims, required fields should be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. We further dispute the assertion that such a radical shift in data requirements is necessary for program integrity. A neutral, government-funded third-party data clearinghouse could effectively collect and share necessary data with relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured dispute resolution framework. University of Michigan HealthSparrow Clinton expects approximately 10% of submitted claims to be denied under a rebate model without appropriate guardrails, translating to an estimated $3,000 per month in unrecovered funds specific to MDPNP drugs. Our position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation must be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other non-statutory rationale. Any denial must be accompanied by specific, transparent documentation, including the date of the prior rebate payment and the identity of the recipient, so that University of Michigan HealthSparrow Clinton can validate and, where appropriate, dispute the denial. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent dispute resolution mechanism that is not manufacturer-controlled for resolving contested claims. Without these protections, covered entities will absorb losses without meaningful recourse. Program Integrity and Transparency University of Michigan HealthSparrow Clinton is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase, significantly complicating real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Manufacturers already receive extensive data on 340B purchases through the existing chargeback process and Drug Supply Chain Security Act transaction reporting. A rebate model does not provide manufacturers with new information; it merely gives them greater leverage over the disbursement of funds that covered entities have lawfully earned. University of Michigan Health Sparrow Clinton is committed to full compliance and transparency, as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations University of Michigan HealthSparrow Clinton respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, University of Michigan HealthSparrow Clinton urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity, to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a vital lifeline for University of Michigan HealthSparrow Clinton and the vulnerable patients we care for across Clinton County and the surrounding rural communities of Mid-Michigan for over thirty years. It enables us to expand access to essential therapies, sustain charity care programs, support community health initiatives, and serve all who come through our doors regardless of their ability to pay, and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing approximately $35,000 in inventory carrying costs and $3,000 per month in projected denied claims. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Clinton urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services University of Michigan HealthSparrow Clinton HRSA 340B OPAIS Covered Entity ID: CAH231326-00 (SPARROW CLINTON HOSPITAL) 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-2093Westside Family Healthcare2026-04-20T04:00Z44,023 chars
See attached file. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Westside Family Healthcare (Westside), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Westside Family Healthcare anticipates a loss of $1,089,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. As a Federally Qualified Health Center, Westside serves 25,000 Delawareans each year. We are on the front lines of caring for our neighbors most in need. Westside relies on 340B savings to sustain essential services that would otherwise be financially out of reach for many of our patients. These savings directly offset the cost of uncompensated care for underinsured and uninsured individuals, ensuring that our most vulnerable community members receive high- quality, comprehensive care regardless of their ability to pay. 340B savings allow Westside to maintain critical services such as dental care, prenatal care, laboratory testing, and wraparound support for uninsured patients. Additionally, 340B savings facilitate access to medications for uninsured and underinsured patients, including Medicare patients who cannot afford supplemental prescription coverage. These are core components of whole-person primary care that are not fully reimbursed, yet they are indispensable to improving health outcomes and reducing long-term healthcare costs. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Westside in particular, this means it will: Reduce our ability to provide comprehensive wraparound services for the 25,000 patients that we serve each year, Increase the administrative costs for our 340B program and reduce the efficiency of our operations, and Limit our ability to utilize 340B revenue to stay competitive in the current job market and to provide key services that operate in a deficit in Delaware health centers, such as oral health care. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Westside Family Healthcare provided $4,370,395 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that this will decrease significantly under a rebate model. Staffing Impact: Westside anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, Westside anticipates an increase of $50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Westside anticipates needing at least one additional FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Westside, this cost could range from $80,000 to $100,000 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Many additional hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Westside urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $30,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Total Cost: For our CHC, which serves 25,000 patients, the total annual projected increase in expensesincluding labor, IT, and carrying costsis $150,000 and likely more. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: CHCs anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend additional hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 7 major pharmacy organizations to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims at over 100 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Delaware with no, or very few and inaccessible, affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the 8 project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Our team at Westside spends countless hours each week navigating options to find medications that are affordable for our patients through our network of convenient contract pharmacy locations, which offer significant flat discounts. CHCs like Westside are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. It will significantly increase the cost to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, health centers like Westside are anticipating needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be faced with a decision to scale back non-revenue-generating but essential services, such as dental care. Operating Hours: Other health centers anticipate needing to reduce our clinic hours, which will reduce access to care for their communities. Workforce & Staffing: The administrative burden of this pilot will require other CHCs to divert funds away from clinical staff. Instead of hiring a Community Health Worker or a 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Behavioral Health Counselor to provide direct patient care and improve health outcomes, health centers will now be hiring a Rebate Coordinator for administrative duties. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Westside asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Westside predicts that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will significantly increase our upfront monthly drug spend. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; these are funds that are currently dedicated to covering losses in our dental program, funding a critical electronic health record conversion project, and allowing us to recruit and retain our team members by responding to competitive workforce market forces. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients rely on Westside, the risk of our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the discounted medications that our 52 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays Westside Family Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a significant net annual loss. This is something that our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Westside Family Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Westside believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Westside Family Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at chris.fraser@westsidehealth.org. Sincerely, Chris Fraser, MBA, FACHE Westside Family Healthcare
HRSA-2026-0001-2094Wayne Memorial Community Health Centers2026-04-20T04:00Z43,986 chars
See attached file(s) WAYNE MEMORIAL COMMUNITY HEALTH CENTERS April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wayne Memorial Community Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts. Through the 340B program, Wayne Memorial Community Health Centers have achieved tremendous growth over the past 10 Years. We have grown from 23,982 patients with 96,965 visits in 2015 to 57,116 patients and 222,659 visits in 2025, this represents a growth of over 230%. This growth was through acquisitions, and not new access point grant funding. It was through the 340B program that made this growth possible. Wayne Memorial Community Health Centers is the perfect example that exemplifies the 340B program intent, "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services". 100% of the 340B savings goes back into the clinics to sustain our services. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Wayne Memorial Community Health Centers in particular, this means it will impact: 57,116 patients and 31,801 340B transactions Current 340B admin costs are $3,044,550 Increase upfront annual drug cost due to the rebate model of $1,267,429 is unsustainable, these upfront annual drug cost increase to $4,127,301 in 2027 and $4,261,525 in 2028. 100% of 340B savings goes back into the clinics, and the best example of that is Obstetrics. We are one of the few FQHC's that have a full Obstetric program that consists of 2 OB/GYN and 5 Midwives. The 340B program 100% subsidizes our Obstetric program, without 340B this Obstetric program would not exist, and it would create a maternity desert in Wayne and Pike counties. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcornes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to rnanage these long-term conditions. I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. yraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. liups:fiwvm_ahajournals.oruldmipai l(ilicirettlatitimiha.123P657.18 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. lutps://wwm,samhsa,govidataldata-we-collectinsduh-national-surve drun-use-and-healthinationnl-rcICOSOS 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. I Sliding Fee Discount: Wayne Memorial Community Health Centers provided $911,566.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Wayne Memorial Community Health Centers anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Wayne Memorial Community Health Centers anticipates an increase of $85,800 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 4 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Wayne Memorial Community Health Centers anticipates additional need of 1.5 FTE and additional cost of $50,000 from contracted staff. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Wayne Memorial Community Health Centers will incur increased labor cost of $131,820 for an additional 1.5 FTE and the upfront cost for the 10 selected drugs would be $1,267,430. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 13 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Wayne Memorial Community Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Internal NACHC assessment (99 responses). 8 Ibid. 5 Total Cost: For our CHC, which serves 57,116 patients, the total projected increase in expensesincluding labor, IT, and carrying costs-is estimated at $1,419,250 annually. This estimate would increase to $4,427,122 in 2027 and $4,413,346 in 2028. These costs will not be achievable. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 55 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 55 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Wayne, Pike, Susquehanna, and Lackawanna counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Relquired Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Ide% h I41 Identify_Pliarman Heserls and Kesiimc Pharmacies l Phartnac. and Clinical Pharmacoloto JArkl..k Network Ten \M.\ New ork I hups:/"Aywo.hcaltlialiairs.oril.doiialts/ll),1377/IlllhatT.2024.00l92?journolCode=lilthart I Internal NACHC survey data 6 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Wayne Memorial Community Health Centers provides sliding fee patients with a prescription discount card that provides all prescriptions for $5. We also provide a prescription discount card to all patients between 200%-350% of the poverty scale that provide all prescriptions a the 340B Cost 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. hiip:-..qhplic.lirsaxov/compliancompliance. rnanual/chapter91/ footnote 10 7 of Goods. The rebate model will do away with this cash card as patients could not afford WAC pricing. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 34013 Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, '4Inis:/!enlk.oilicitlih,coiblogLyear-out-hositiess-heitIlh-eheck-kev-metrics-clecry-pharrnmc -owncr-shliold-reviek\ 8 which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $1,343,749 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $77,610 to purchase these same drugs at the 340B ceiling price. This represents a 1,731% increase in upfront capital required for procurement. This is unrealistic and with our razor thin margins, we cannot possibly upfront these costs. These costs would rise to $4,127,301 in 2027 and $4,261,525 in 2028 if the new drugs are added to the list. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Wayne Memorial Community Health Centers anticipates the need to make some hard decisions. Essential Clinical Services: The hard decision would be to cut services. We simply cannot upfront the WAC cost of these drugs, it is not feasible. We would also have to cut our discount drug card program, with would cause chaos to our patients. Literally thousands of patients would not be able to afford their prescriptions. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the 15 I 1 iirPi :!/3401/Tric 16 tlitlYS:/ 'ILAVWC110S.11OVin reS.?-Li II/selected-drug-I isi-iwPptiated-pricc ;-al so-known-maximum- lairilrices-statutezl_p.zip 9 ability to fund a Community Health Worker or a Behavioral Health Therapist, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "$5 co-pay" under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 1809 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wayne Memorial Community Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Wayne Memorial Community Health Centers estimates its 2027 Annual Rebate Opportunity Cost to be approximately $120,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Wayne Memorial Community Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $1,267,429. This increases to $4,127,301 for 2027 and $4,264,525 for 2028. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to add to our line of credit. This is not a sustainable solution; the interest costs alone are estimated to be over $100,000 annuallyfunds that are currently dedicated to funding healthcare providers. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on 10 Wayne Memorial Community Health Centers, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Wayne Memorial Community Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $191,191, this loss would be $666,116 in 2027 and $689,232 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national I7 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) ti os://wo, Is.federa I rue( ster.govidixamients/2025/08/01'21)25-146 I 9/340b-program-notice-appl ication -process-for-the-3,40h- rchatc-ri i lol-program 11 standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 12 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to FIRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Wayne Memorial Community Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Wayne Memorial Community Health Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. And remember, CHC's only represent 7-8% of the 340B program. Wayne Memorial Community Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Robert J. Fortuner II, CFO at Fortunerrierwmh.org. 13 Sincerely. Robert J. Fortuner II, CFO Wayne Memorial Community Health Centers 14
HRSA-2026-0001-2095Neighborhood Health Care Incorporated dba Neighborhood Family Practice2026-04-20T04:00Z50,852 chars
See attached file(s) April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Health Care Incorporated dba Neighborhood Family Practice, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Neighborhood Family Practice expects to experience significant cash flow issues with upfront costs increasing to approximately $10 million in 2026, up from $8 million in 2025; along with an anticipated $1 million loss for entity-owned pharmacy operations and $795,000 loss from 1,000 prescriptions from contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Founded in 1980, NFP is a network of six community health centers (CHC) located in HRSA designated medically underserved areas/populations in health professional shortage areas for primary care, behavioral, and dental services in Cleveland, Ohio west side and Lakewood, Ohio neighborhoods. NFP draws patients from all City of Cleveland and Lakewood wards and all Cuyahoga County Districts. In 2025, 23,450 patients received over 88,000 primary care, behavioral health, dental, midwifery, HIV, podiatry, clinical pharmacy, and pharmacy services. Services are provided to people of all ages, regardless of their ability to pay, with 73% of patients having incomes at or below 200% of the federal poverty level (FPL). Over the past seven years, NFP has experienced a 24% growth in patient volume from 18,931 in 2018 to 23,450 in 2025. NFP pharmacies have experienced 100% total growth in pharmacy services since opening in 2019, increasing prescription volume from 39,706 in 2019 to over 79,000 prescriptions in 2025. Guided by a mission of being a trusted partner building healthy communities by providing high- value health care for all, NFP works diligently to remove common barriers to health care- including financial constraints, the need for interpretation services for 28% of patients who are best served in a language other than English, and lack of reliable transportation- so that everyone is able to receive the health care they need. The 340B Drug Pricing Program is essential to sustaining this work and increasing access to affordable and timely health care services and prescription medications across the communities we serve. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has made it possible for CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us for their health care. For Neighborhood Family Practice, the following will be impacted: 6,100 in-house pharmacy 340B transactions (26% of NFPs 23,450 patients) plus an additional 2,400 contract pharmacy 340B transactions annually. This number will increase as patient volume continues to increase due to the opening of two new sites with in-house pharmacies in 2025 and 2026. Current administrative costs for NFPs 340B Program equals $175,000 annually, plus $100,000 annually for oversight costs. One hundred percent of 340B cost savings is reinvested in direct patient care services including community health workers, referral specialists, social workers, financial counselors, medical assistants, medication home delivery, interpretation and transportation services. The 340B Program was intentionally designed to promote sustainability of covered entities (including CHCs) through the cost savings model. The proposed rebate program does not support this initial intent of the 340B Program and many services will need to be cut or dialed back if the Rebate Model is implemented. Neighborhood Family Practice strongly urges HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of conditions like diabetes, hypertension, and obesity.1 Our patient population relies on affordable medications to manage these long-term conditions and to prevent costly complications. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs, as safety-net providers, are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, NFP provided a total of $1,409,132 in sliding-fee discounts; including $543,604 in reduced-cost medical services and $865,528 in reduced cost medications for 5,542 prescriptions. In addition, $382,182 in write-offs for medical care that was not collected due to contractual agreements with insurers and bad debt resulted in lost revenue absorbed by Neighborhood Family Practice. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Neighborhood Family Practice anticipates needing one to two additional 340B Analysts as a result of the Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Due to increased administrative and reporting complexity, NFP anticipates an additional $50,000 (minimum) in external vendor costs, including expanded auditing requirements, higher licensing fees for added users, and increased electronic health record expenses related to data integrations and system build-outs. Additional costs associated with 340B consultants, legal counsel, program coordination, third-party administrators, pharmacy software, and reconciliation services are likely to be needed. Workforce Impact The following data is specific to the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Neighborhood Family Practice projects that we will need to hire an additional 1 2 full- time, (1 FTE) positions to meet the increased reporting demand. This equates to $49,320 for 1 FTE 340B Analyst position and $98,640 for two positions. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For NFP, increased costs would include $98,640 for two additional 340B Analysts, $50,000 in additional external vendor costs, and approximately $2 million for upfront cost of drugs- a total of $2,148,640. We anticipate $795,000 in losses from contract pharmacies. The high administrative burden will most likely result in the elimination of our collaboration with contract pharmacies, and the need to scale back our 340B Program- which is a lifeline for many NFP patients and a revenue source that was initially intended by Congress to support CHC sustainability. Scaling back these services will directly impact our ability to continue support services including community health workers, referral specialists, medication home delivery, financial counselors- all critical services that keep patients engaged and retained in care. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Neighborhood Family Practice estimates a minimum of 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Neighborhood Family Practice urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Fifty- thousand dollars ($50,000) will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. For NFP, ongoing, annual costs will total at least $423,640 which includes $225,000 (minimal administrative costs) plus $198,640 in oversight fees (personnel). Total Cost: For our CHC, which serves 23,450 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,222,620 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. This creates a wave effect. Manufacturers, as a result of the current pause in the rebate model, are creating data requirements in order to get access to 340B pricing. Those data requirements now include clinic-administered medical claims in addition to the entity-owned pharmacy claims and the contract pharmacy claims. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. With NFPs current pharmacy system unable to support this integration, staff are completing the work manually. The necessary pharmacy software needed to support EHR and PMS system integration would be an additional expense. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Due to increased administrative and reporting complexity, NFP anticipates an additional $50,000 (minimum) in external vendor costs, including expanded auditing requirements, higher licensing fees for added users, and increased electronic health record expenses related to data integrations and system build-outs. Additional costs associated with 340B consultants, legal counsel, program coordination, third-party administrators, pharmacy software, and reconciliation services are likely to be needed. Ongoing Resource Diversion: Staff currently responsible for clinical pharmacy services would need to spend a minimum of an estimated 5+ hours per week manually retrieving Purchase Files and Price Files to verify that each rebate payment aligns with the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 19 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across four (4) entity owned (in-house) pharmacies, plus 19 different external pharmacy locations (contract pharmacies) to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the increased administrative burden. In our region, this would leave patients in the Greater Cleveland, Ohio area and Cuyahoga County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required As a result of the current pause in the rebate model, manufacturers are imposing expanded data requirements as a condition for accessing 340B pricing. These requirements now extend beyond entity-owned and contract pharmacy claims to include clinic-administered drug (CAD) medical claims. However, CAD operations and record-keeping within CHCs are intentionally structured to be cost-effective and aligned with the complexities of CHC billing workflows. Implementing a rebate model for CADs would require significant operational changes, including new software, system integrations, and staff training. NACHC estimates these additional costs would range from $30,000 to $50,000 annually and could be substantially higher depending on the technology selected.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 care services, including medications, based on a patients income and family size. Neighborhood Family Practice offers a sliding fee scale that ensures no one is denied access to services, including medications, due to an inability to pay. All patients are encouraged to meet with NFPs financial counselors to be assessed for eligibility and enrolled in NFPs Sliding Fee Scale Program and 340B Pharmacy Program. Discounted fees are based on family size and income. Patients with incomes at or below 100% of the federal poverty level (FPL) pay a nominal charge (as low as $10 for primary care and behavioral health visits), patients with incomes from 101% and 200% of the federal poverty level receive a sliding fee discount that ranges from $15 - $30. Pharmacy services start at Drug Cost plus $2 for patients at or below 100% FPL and increase incrementally up to Drug Cost + $5 for patients between 176 200% FPL. Redetermination is completed annually or sooner if needed. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected. contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, that manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,664,000 to purchase these 10 drugs under the proposed rebate model. In 2025, our organization spent $59,745 to purchase these same drugs at the 340B ceiling price. This represents a 2,685% increase in upfront capital required for procurement. This estimate is based on nothing changing in the current state and does include annual rises in drug costs. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Neighborhood Family Practice anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, NFP would be forced to scale back non-revenue-generating but essential services, such as community health workers, referral specialists, social workers, financial counselors, medical assistants, medication home delivery, interpretation and transportation services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every 340B Analyst that we are forced to hire, we lose the ability to fund NFPs Wellness Coordinator who leads NFPs Food as Medicine Program, clinical pharmacists who play an instrumental role in providing patient education needed for successful self-management of chronic conditions such as diabetes and hypertension, and behavioral health therapists- directly increasing wait times for appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,876 uninsured patients from rationing their insulin, inhalers for asthma, or heart medications. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Neighborhood Family Practice asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Neighborhood Family Practice estimates its 2027 Annual Rebate Opportunity Cost to be similar if not greater related to patients churning between Medicaid and being uninsured, and an increased number of uninsured due to unaffordable Marketplace premiums. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Neighborhood Family Practice estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1,604,255. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves or to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Neighborhood Family Practice- and our five sister Cleveland CHCs -the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Neighborhood Family Practice urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $80,212. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Neighborhood Family Practice strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Neighborhood Family Practice believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Neighborhood Family Practice appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at dhopson@nfpmedcenter.org. Sincerely, Domonic Hopson, MPH, FACHE President and CEO
HRSA-2026-0001-2096University of Michigan HealthSparrow Eaton2026-04-20T04:00Z15,727 chars
See attached file(s). Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: University of Michigan HealthSparrow Eaton (UM HealthSparrow Eaton) appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect UM HealthSparrow Eatons experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments University of Michigan HealthSparrow Eaton is a Critical Access Hospital (CAH) located in Charlotte, Michigan, proudly serving Eaton County and the surrounding rural communities of Mid-Michigan. With 25 licensed beds, a 24-hour Emergency Department staffed by board- certified emergency medicine physicians, and a broad range of outpatient specialty services, UM HealthSparrow Eaton has a rich history of providing essential healthcare to the residents of Eaton County. As part of the University of Michigan Health network, UM HealthSparrow Eaton connects rural patients to the expertise of one of the nations top-ranked academic health systems while delivering the personal, community-centered care that patients in Charlotte and surrounding communities depend on. As a Critical Access Hospital and 340B-participating covered entity, UM HealthSparrow Eaton relies on the 340B program to sustain affordable access to medications and essential health services for the most vulnerable members of our rural community, including patients who are uninsured, underinsured, or who face economic barriers to care. The 340B program is not a peripheral benefit for our institution; it is a foundational tool that enables us to serve all who come through our doors regardless of their ability to pay. During the most recent fiscal year, UM HealthSparrow Eaton processed 3,587 340B transactions (limited to ambulatory pharmacies), and currently invests approximately $380,000 annually in third-party administrators and compliance infrastructure. While the current projected financial impact of the MDPNP drugs under a rebate model appears comparatively modest for Eaton in dollar terms, this reflects the narrow scope of currently affected drugs and not a diminished level of concern. The structural harms of a rebate model, including administrative burden, manufacturer control, erosion of cash flow stability, and the threat of expansion to additional drugs, are equally dangerous for a small rural hospital. UM HealthSparrow Eaton firmly opposes the proposed 340B Rebate Model Pilot Program. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on University of Michigan HealthSparrow Eaton. Under a rebate model, University of Michigan HealthSparrow Eaton would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $600 in additional cost, given that we typically hold a two- week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the currently listed MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. Beyond the inventory carrying cost, University of Michigan HealthSparrow Eaton anticipates approximately $50 per month in denied rebate claims under a rebate model, and absent appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would represent a permanent and recurring financial loss that diverts scarce resources away from direct patient care. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Eaton strongly disagrees with HRSAs assessment that these impacts would be minimal. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and expanded administrative staffing. These are not temporary transition costs; they are permanent structural burdens. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for University of Michigan HealthSparrow Eaton. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between purchase and rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning University of Michigan HealthSparrow Eaton would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the rebate structure as proposed. If rebate eligibility is conditioned on demonstrating patient administration or dispensing, no mechanism exists to eliminate the inherent gap between purchase and repayment. Preferable alternatives would include structuring the program as a consignment model, where covered entities are not charged at WAC until a drug is administered, or allowing the purchase to be made at the upfront 340B price but reclassified to WAC only if data is not submitted within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter our data management obligations in ways our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms, which requires the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that data required for rebate adjudication does not align with information stored in our current systems. Pharmacy claims are processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide the accurate, comprehensive, contemporaneous data that a rebate model would demand. Under a rebate model, we would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts, all of which would be ongoing and resource-intensive obligations. We strongly recommend that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. For pharmacy claims, required fields should be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. We further dispute the assertion that such a radical shift in data requirements is necessary for program integrity. A neutral, government-funded third-party data clearinghouse could effectively collect and share necessary data with relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured dispute resolution framework. University of Michigan HealthSparrow Eaton expects approximately 10% of submitted claims to be denied under a rebate model without appropriate guardrails, translating to an estimated $50 per month in unrecovered funds specific to MDPNP drugs. Our position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation must be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other non-statutory rationale. Any denial must be accompanied by specific, transparent documentation, including the date of the prior rebate payment and the identity of the recipient, so that University of Michigan HealthSparrow Eaton can validate and, where appropriate, dispute the denial. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent dispute resolution mechanism that is not manufacturer-controlled for resolving contested claims. Without these protections, covered entities will absorb losses without meaningful recourse. Program Integrity and Transparency University of Michigan HealthSparrow Eaton is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase, significantly complicating real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Manufacturers already receive extensive data on 340B purchases through the existing chargeback process and Drug Supply Chain Security Act transaction reporting. A rebate model does not provide manufacturers with new information; it merely gives them greater leverage over the disbursement of funds that covered entities have lawfully earned. University of Michigan Health Sparrow Eaton is committed to full compliance and transparency, as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations University of Michigan HealthSparrow Eaton respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, University of Michigan HealthSparrow Eaton urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity, to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a vital lifeline for University of Michigan HealthSparrow Eaton and the vulnerable patients we care for across Eaton County and the surrounding rural communities of Mid-Michigan for over thirty years. It enables us to expand access to essential therapies, sustain charity care programs, support community health initiatives, and serve all who come through our doors regardless of their ability to pay, and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing approximately $600 in inventory carrying costs and $50 per month in projected denied claims. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Eaton urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services University of Michigan HealthSparrow Eaton HRSA 340B OPAIS Covered Entity ID: CAH231327-00 (SPARROW EATON HOSPITAL) 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-20971st Choice Healthcare, Inc.2026-04-20T04:00Z9,131 chars
See attached file(s) .40 sTCHC7ICE ALTHCARE Revolvay.evrematoef" Corporate Office: 1001 N Missouri Ave. PO Box 83 Corning, AR 72422 Telephone: 870.857.3334 Fax: 870.857.9934 Billing: 870.857.3329 April 17, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: I write in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program. 1st Choice Healthcare is a federally qualified health center with sites in Corning, Highland, Paragould, Pocahontas, Salem, and Walnut Ridge, Arkansas. We have participated in the 340B program since November 2005. In the twenty years since, those savings have become inseparable from how we deliver care across our service area. A rebate model would take them away in practice while preserving them on paper. Who We Serve: 1st Choice Healthcare served 19,068 patients last year. Eighty-one percent live at or below 200% of the federal poverty level, and more than half live at or below 100%. Nearly 15% are uninsured. One in three is on Medicaid. Forty percent are best served in a language other than English. Almost a third of our patients are children. For these families, the affordability of medication is not a matter of convenience. It is the question of whether the prescription gets filled. Clinic Locations 1300 Creason Road - Corning, AR 72422 Ph. 870.857.3399 1016 McQuay Avenue - Pocahontas, AR 72455 Ph. 870.892.9949 201 Colonial Drive Walnut Ridge, AR 72476 Ph. 870.886.5507 2178 Hwy 621412 Highland, AR 72542 Ph. 870.994.2202 #1 Medical Drive Paragould, AR 72450 Ph. 870.236.2000 172 Hwy 62 East Salem, AR 72576 Ph. 870.895.2735 Equal Opporiumty Employer What a Rebate Model Would Cost Us: Our 340B acquisition cost for drugs on the 2026 and 2027 MFP lists is approximately $1.55 million per year. At WAC, that same drug volume would require roughly $9 million in upfront outlays a working capital gap of about $7.42 million each year the program operated on a rebate basis. That gap is not a one-time expense. It recurs every year and compounds against our cash position until each rebate is collected. The MFP drug list alone represents 43.2% of our 340B program. If the rebate mechanisrn is extended beyond the M FP drugs to the full 340B formulary, we estimate the annual working capital requirement grows to approximately $11.5 million. An organization of our size does not carry that kind of liquidity, and no rural community bank will extend a line of credit of that magnitude against the promise of manufacturer reimbursement on disputed claims. Separately, in the first quarter of 2026, the Medicare Drug Price Negotiation Program has already reduced our net 340B savings on affected products by approximately 14%. That compression is already priced into our 2026 operating budget. Layering rebate-model cash demands on top of that compression is not a hypothetical risk. It is a direct threat to our operating reserves. Wholesaler Credit Will Not Scale: Our wholesaler credit limits were calibrated against 340B acquisition pricing, not WAC. In the weeks leading up to the planned 2026 rebate pilot, our wholesalers were neither prepared nor uniformly willing to extend the credit limits required to operate a 340B account at WAC. When credit is exceeded, replenishment stops. If pharmacies cannot receive 340B inventory and cannot pay 340B invoices, the program stops with it. That is not a theoretical concern. It is what our account managers told us, in plain terms, when we asked. Reconciliation Infrastructure Is Not Ready: In our preparations forthe 2026 pilot, we reviewed the third-party vendor interface manufacturers selected for rebate adjudication. The available data and reporting were not sufficient to support a reliable reconciliation process. The vendor cited HIPAA compliance as the reason it would not retain prescription numbers on claims but any vendor entrusted with this function should meet the security requirements necessary to retain and report Rx numbers to system users. Without that claim-level detail, we cannot match a rebate payment or denial back to a dispense with confidence. A five percent denial rate, which is not an unreasonable assumption given what manufacturers have done in similar contexts, would put approximately $500,000 at risk for each year the mechanism remained in place. What a Rebate Model Would Break at the Pharmacy Counter: We operate exclusively through a contract pharmacy network. Our pharmacies dispense to our patients at the 340B price because the ceiling price is reflected in the acquisition cost at the tirne the prescription is filled. A rebate model changes that arithmetic. The entity acquires the drug at WAC, and the 340B benefit is reconciled after the fact. We appreciate that HRSA has attempted to address this by proposing an ad hoc ceiling price file for rebate-covered drugs, but our third-party administrators were not in a position to operationalize that file in the few working days of lead time before the planned 2026 start. Three outcomes are possible and none are acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay from the patient, and we float the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. None of these is consistent with how a safety-net provider is supposed to deliver medication to a patient who walked into the clinic that morning. This problem also conflicts with the Administration's own direction. Executive Order 14273 instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it. A rebate mechanism, by design, cannot deliver the 340B price at the point of sale. The two directives cannot both be satisfied by the same policy. The Staffing Burden HRSA Estimated Is Too Low: HRSA's Information Collection Request estimates the administrative burden of the rebate model at roughly five hours per week per covered entity. That figure does not reflect what we saw in our own preparation. Based on the claims volume on the combined 2026-2027 MFP list, we estimate approximately 0.75 additional FTE a dedicated staff resource we do not have and would need to hire to manage the submission, reconciliation, denial disputes, and cash forecasting a rebate model requires. That is a cost that does not exist today, and it comes out of the same pool of resources we use for patient care. A Less Costly Path to Deduplication: We understand HRSA's legitimate need to prevent duplicate discounting between MFP and 340B. We do not disagree that the problem is real. But the answer is not a mechanism that moves the discount out of acquisition and into reconciliation. There are two viable alternatives. First, a neutral 340B clearinghouse administered by or designated by HRSA. Covered entities would report 340B claims to the clearinghouse, which would serve as the single source of truth for deduplication. That architecture preserves the upfront discount, removes manufacturers from the arbiter role, and eliminates the financial risk a rebate model places on the safety-net. Second, better use of the manufacturer claims data that is already being collected. Manufacturers already require 340B claims data from covered entities as a condition of 340B access. That same data can be used for MFP/340B deduplication without deploying a parallel rebate-adjudication infrastructure. One operational improvement worth requiring: for new pharmacy accounts or accounts without usage at the time a claims data requirement is instituted, manufacturers should accept an attestation of compliance rather than withholding 340B access pending data that does not yet exist. What I Am Asking: On behalf of 1st Choice Healthcare, I respectfully ask HRSA to do three things. First, abandon the rebate model pilot as currently contemplated. Second, if the pilot proceeds, exempt federally qualified health centers the covered entities whose operating margins are least able to absorb it. Third, direct the deduplication question to a neutral clearinghouse or to the manufacturer claims data mechanism already in use. The 340B program was designed so that organizations like ours could stretch scarce federal resources and reach more patients. For twenty years, we have done exactly that. The rebate model, whatever its intent, would reverse it. Thank you for the opportunity to comment. I am available at the contact information below to provide any additional data or context that would be useful. Sincerely, Brigitte McDonald Chief Executive Officer 1st Choice Healthcare Ph: 870.857.3334 Email: bmcdonald@lstchoice-ar.org Corning, AR 72422 340B ID: CH063720 BM/arw
HRSA-2026-0001-2098(no commenter metadata)2026-04-20T04:00Z4,916 chars
See attached file(s) 2100 E. Thousand Oaks Blvd., Suite E Thousand Oaks, CA 91362 Tel. (805) 214-2510 Tel. (805) 480-0585 Jeff.Gorell@ventura.org MEMBERS OF THE BOARD JEFF GORELL, CHAIR MATT LAVERE KELLY LONG JANICE S. PARVIN VIANEY LOPEZ SUPERVISOR Jeff Gorell Second District April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: HRSA Request for Information on a 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of the County of Ventura, the Board of Supervisors appreciates the opportunity to respond to the Department of Health and Human Services Request for Information regarding the proposed 340B Rebate Model Pilot Program. Ventura County strongly supports the longstanding structure of the 340B Drug Pricing Program, which for decades has allowed safetynet hospitals to receive upfront discounts on covered outpatient drugs. This model has been essential in enabling Ventura County Medical Center (VCMC) and other covered entities to stretch scarce federal resources, sustain critical services, and serve our most vulnerable residents. After careful review, the Board has significant concerns that any shift from the current upfront discount model to a postpurchase rebate model would undermine the purpose of the 340B Program, impose substantial administrative and financial burdens on safetynet providers, and negatively affect the residents of Ventura County. Significant Fiscal Impact to the County Under the proposed rebate model, hospitals would be required to pay full price for 340B drugs up front and wait weeks or longer for reimbursement. This delay would exacerbate the already severe cashflow challenges facing VCMCchallenges that have required the County to provide substantial General Fund loans to maintain operations. An expansion of reimbursement delays would increase borrowing needs, further strain the Countys General Fund, and reduce the Countys ability to fund other critical programs, services, and capital projects. Substantial and Unfunded Administrative Burden The rebate model would require hospitals to establish new systems for claim identification, data aggregation, eligibility validation, tracking, reconciliation, and dispute resolution. These are not functions supported by current 340B systems. VCMCs analysis indicates that compliance would require substantial new staffing, specialized IT development, extensive new data workflows, and significant ongoing administrative hourscosts that would divert limited resources away from patient care. Hall of Administration 4th Floor 800 South Victoria Avenue Ventura, CA 93009 TEL (805) 654-2703 Reduced Program Effectiveness and Service Capacity As costs and administrative burdens rise, the net value of 340B savings would decline. These savings are a critical funding source for essential services provided to lowincome, uninsured, and underinsured patients across the County. Any reduction in available resources would likely result in reduced service availability, diminished care access, or delays in planned program expansions that benefit our communities. LongStanding Reliance on the Upfront Discount Model For more than three decades, covered entities nationwide, including VCMC, have designed their clinical operations, staffing, information systems, and financial planning around the upfront discount structure. A sudden shift to a rebate model would disrupt these settled reliance interests without evidence of a need for such fundamental change. Consideration for More Effective Alternatives Ventura County agrees with national hospital associations to consider less burdensome, more efficient mechanisms to support 340B program integrity, including thirdparty clearinghouse solutions that avoid duplicate discounts without requiring a massive shift in financial flows or administrative responsibilities. We urge HRSA to meaningfully consider these alternatives before moving forward with any rebate model. For these reasons, the Ventura County Board of Supervisors respectfully urges HRSA not to implement a rebatebased model and to maintain the current upfront discount structure. Should HRSA continue to explore this concept, it is essential that covered entities and local governments be provided the opportunity to comment on the programs specific design features before any pilot is implemented. Thank you for your consideration of these comments and for your continued support of safetynet providers that serve communities like ours. The County of Ventura remains committed to working collaboratively with HRSA to strengthen the 340B Program and preserve access to care for the residents who need it most. Sincerely, Jeff Gorell Chair, Board of Supervisors County of Ventura
HRSA-2026-0001-2099Adventist Health System2026-04-20T04:00Z10,691 chars
Adventist Health System [ADVENTISTHEALTH:INTERNAL] Adventist Health 1 Adventist Health Way Roseville, CA 95661 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health, a safety-net hospital system with multiple 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our system strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs [ADVENTISTHEALTH:INTERNAL] selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health is a safety-net system comprised of 27 hospitals throughout the West Coast and Hawaii. The hospitals serve a majority of geographically isolated medically underserved rural populations. Our communities rely on Adventist Health for inpatient and outpatient care, and are often the only medical choice available. At Adventist Health, we believe that access to healthcare should never depend on geography or income. Most of the communities we serve are rural or located in an area designated as a Health Professional Shortage Area by the Health Resources & Services Administration. We work to bridge these gaps by providing essential services, expanding telehealth capabilities, and focusing on supporting community programs to address the community's health needs. Our goal is to ensure that every individual has access to the care they need to live a healthier, more fulfilling life. The 340B Program plays a vital role in helping Adventist Health extend this important care to our communities. Savings from the 340B Program allow us to reinvest in programs such as medication assistance for patients who struggle to afford prescriptions, community health initiatives like mobile care vans, and expanded access to specialty care in rural areas, including cancer centers. By leveraging 340B savings, we can improve health outcomes for underserved communities. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety- net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees at each participating hospital would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. [ADVENTISTHEALTH:INTERNAL] Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health would be $390,500.00 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospitals at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts [ADVENTISTHEALTH:INTERNAL] The proposed rebate mechanism would require Adventist Health to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savingsfunctionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospitals would be required to front drug manufacturers approximately $12,597,241.69 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for high government payor hospitals such as Adventist Health. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospitals may not be available for months. Estimating the possibility of a 10% claims denial, $1,259,724.17 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third- party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without [ADVENTISTHEALTH:INTERNAL] knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive via email at drefkej@ah.org if you have any questions or would like additional information. Sincerely, Julia Drefke, MPA Public Affairs Executive
HRSA-2026-0001-2100River Hills Community Health Center2026-04-20T04:00Z84,901 chars
See attached file(s) River Hills Community Health Center Ottumwa, Iowa 52501 250 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of River Hills Community Health Center (River Hills), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 2000, it has been River Hills mission to improve the health outcomes of our patients by providing exceptional health care services. Last year we had the privilege of serving 21,850 patients in a total of 91,408 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of a 25% loss in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For River Hills in particular, this means it will impact: The 11,646 340B transactions we processed to assist in serving our 22,264 patients. Our annual $2,090,890 administrative costs to remain compliant with 340B will go up by a minimum of $85,000 Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like 3 diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is amid an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Like navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: River Hills provided $1,456,531 in sliding fee discounts to 7,538 patients, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: River Hills anticipates needing to hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, River Hills anticipates an increase of $85,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs nationwide estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 At River Hills we would need to at a minimum hire an additional FTE to manage the 340B rebate reporting requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At River Hills we estimate that 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. River Hills urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An excessive amount of money will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $85,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure ndors for custom API builds and "Price File" reconciliation tools Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 50 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with seven pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across twenty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, these risks leave patients in our eight-county region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population lives in a pharmacy desert,9and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Cencora, Insight into U.S. pharmacy deserts (2024) 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSA FAQ 8 drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At River Hills we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. Our CHC also uses our savings to help with transportation to and from appointments, outreach and enrollment is also big in our CHC area. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, River Hills anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as helping our patients receive affordable prescriptions, having our outreach and enrollment specialist assisting in helping find resources for the underinsured and possibly depleting our resources for transportation to and from needed appointments. Operating Hours: We anticipate needing to reduce our clinic hours by several hours per week, specifically hurting our working class patients that may not be able to take off work to receive the proper care they need. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund our Community Health Workers and Outreach Coordinators that are out in the field supplying information and resources to our communities. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our thousands of uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. River Hills asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, River Hills estimates its 2027 Annual Rebate Opportunity Cost to be 85,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: River Hills estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spends Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize financial reserves we have carefully put back in case of an extreme situation or take a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be thousands annuallyfunds that are currently dedicated to hiring additional nurse practitioners]. Forcing CHCs into debt to maintain their drug supply creates 11 an environment of clinical instability. In our region, where patients have no choice but to rely on River Hills, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays River Hills urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of income]. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 13 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion River Hills strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. River Hills believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. River Hills appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact: Lori Palmer, 340b Program Coordinator at lpalmer@riverhillshealth.org 14 Sincerely, Dr Joy Alexander CEO River Hills Community Health Center Ottumwa Iowa April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of River Hills Community Health Center (River Hills), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. Since 2000, it has been River Hills mission to improve the health outcomes of our patients by providing exceptional health care services. Last year we had the privilege of serving 21,850 patients in a total of 91,408 clinical visits. Iowas CHCs are a vital part of the high-quality healthcare received in rural and other areas where healthcare can be difficult to access. CHCs are an essential part of the healthcare system, providing primary and preventative health services, saving taxpayer dollars and producing better health outcomes. The 340B program is foundational to CHCs ability to serve the most members of our community with limited access to healthcare. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of a 25% loss in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For River Hills in particular, this means it will impact: The 11,646 340B transactions we processed to assist in serving our 22,264 patients. Our annual $2,090,890 administrative costs to remain compliant with 340B will go up by a minimum of $85,000 Our ability to use 340B savings to lower the cost of healthcare services and medications will be greatly diminished. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most at-risk patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the at-risk patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most at-risk patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is amid an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most at-risk patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent assessment from NACHC illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Like navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: River Hills provided $1,456,531 in sliding fee discounts to 7,538 patients, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: River Hills anticipates needing to hire at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, River Hills anticipates an increase of $85,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs nationwide estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. At River Hills we would need to at a minimum hire an additional FTE to manage the 340B rebate reporting requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One Iowa CHC, which served 48,447 patients last year, anticipates annual costs exceeding $12 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At River Hills we estimate that 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. River Hills urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An excessive amount of money will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We anticipate that these ongoing fees-which are permanent, recurring costs that diminish our 340B savings- will cost $85,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure ndors for custom API builds and "Price File" reconciliation tools Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 50 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with seven pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across twenty different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our service area, these risks leave patients in our eight-county region with little or no affordable medication options with no affordable medication options. Over 19 percent of the Iowa population lives in a pharmacy desert,and the closing of pharmacies nationwide have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 and 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At River Hills we use our 340B savings in a variety of ways including offering sliding fee discounts on services and reducing the overall cost of medications. Our CHC also uses our savings to help with transportation to and from appointments, outreach and enrollment is also big in our CHC area. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, River Hills anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as helping our patients receive affordable prescriptions, having our outreach and enrollment specialist assisting in helping find resources for the underinsured and possibly depleting our resources for transportation to and from needed appointments. Operating Hours: We anticipate needing to reduce our clinic hours by several hours per week, specifically hurting our working class patients that may not be able to take off work to receive the proper care they need. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund our Community Health Workers and Outreach Coordinators that are out in the field supplying information and resources to our communities. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our thousands of uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. River Hills asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, River Hills estimates its 2027 Annual Rebate Opportunity Cost to be 85,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Purchasing at WAC: River Hills estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spends Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize financial reserves we have carefully put back in case of an extreme situation or take a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be thousands annuallyfunds that are currently dedicated to hiring additional nurse practitioners]. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on River Hills, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays River Hills urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of income]. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion River Hills strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. If there cannot be an exemption, we request that HRSA select a January 1st, 2027, start date to allow CHCs time to prepare to comply with program requirements. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. River Hills believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. River Hills appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact: Lori Palmer, 340b Program Coordinator at lpalmer@riverhillshealth.org Sincerely, Dr Joy Alexander CEO River Hills Community Health Center Ottumwa Iowa
HRSA-2026-0001-2101Insight Health Systems2026-04-20T04:00Z7,656 chars
Given the critical role that 340B savings play in sustaining care for underserved populations, Insight Hospital and Medical Center respectfully submits that the costs of any rebate program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse as a less burdensome alternative to achieve its deduplication goals. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane, Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: I am writing in strong opposition to the proposed 340B Drug Pricing Program rebate model on behalf of Insight Hospital and Medical Center Chicago and Insight Hospital and Medical Center Coldwater, both of which serve as Disproportionate Share Hospitals (DSH) dedicated to caring for vulnerable and underserved populations. As Chief Pharmacy Officer, I am deeply concerned that the proposed shift from upfront discounted pricing to a rebate-based mechanism would create significant financial and operational burdens that threaten our ability to provide timely, equitable, and high-quality care. Impact on Cash Flow and Access to Care Under the current 340B structure, covered entities are able to purchase outpatient drugs at discounted prices, allowing immediate reinvestment of savings into patient care services. The proposed rebate model would instead require hospitals to pay full acquisition cost upfront and wait for reimbursement at a later date. For safety-net hospitals like ours, this shift presents serious challenges: Substantial Cash Flow Strain: The need to front the full cost of high-priced medications, particularly specialty and oncology therapies, would create a substantial and unsustainable demand on working capital for a safety-net hospital operating on tight margins. Delayed Reimbursement Uncertainty: Any delays, disputes, or administrative barriers in rebate processing could further exacerbate financial instability. Operational Complexity: The infrastructure required to track, reconcile, and manage rebates across multiple manufacturers would significantly increase administrative burden and cost, requiring meaningful new investments in staffing and operational capacity. These financial pressures would inevitably force difficult decisions that could limit access to medications, reduce clinical services, or delay necessary treatments for patients who already face significant barriers to care. Disproportionate Impact on Underserved Communities Insight Hospital and Medical Center Chicago serves patients in the South Side of Chicago, an area historically impacted by systemic inequities, higher rates of chronic disease, and limited access to healthcare resources. This region has been widely recognized as one of the most medically underserved and demographically challenged areas in the city, characterized by: Higher proportions of low-income and Medicaid-dependent patients Elevated rates of chronic conditions such as diabetes, hypertension, and cardiovascular disease Reduced access to primary and specialty care services Significant racial and ethnic health disparities Insight Hospital has worked diligently to stabilize and expand services for this vulnerable population. The 340B program has been essential in supporting: Medication affordability for uninsured and underinsured patients Expansion of outpatient clinical programs Community-based health initiatives and care coordination services The proposed rebate model would undermine these efforts by diverting critical financial resources away from patient care and into managing liquidity and administrative processes. Risks to Program Integrity and Patient Outcomes The 340B program was established with the clear intent of enabling covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The rebate model introduces unnecessary financial risk and complexity that runs counter to this purpose. Specifically, the model may lead to: Reduced ability to maintain comprehensive pharmacy services Delays in patient access to essential medications Increased disparities in care delivery in already underserved communities Potential scaling back of outreach and population health programs Conclusion and Request Given the critical role that 340B savings play in sustaining care for underserved populations, Insight Hospital and Medical Center respectfully submits that the costs of any rebate program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse as a less burdensome alternative to achieve its deduplication goals. At a minimum, HRSA must provide a reasoned explanation for why a clearinghouse is neither viable nor less costly than a rebate mechanism before moving forward. Maintaining the current upfront discount structure is essential to preserving the financial viability of safety-net providers and ensuring uninterrupted access to care for the patients who need it most. We respectfully request that HRSA engage directly with DSH hospitals and other covered entities to better understand the real-world implications of this proposal, and that covered entities be permitted to comment further should HRSA proceed with a specific program design. Thank you for your consideration of these concerns and for your continued commitment to improving healthcare access for vulnerable populations. Sincerely, David Hughes, PharmD, R.Ph., DAMCP, ABAAHP Chief Pharmacy Officer Insight Hospital and Medical Center Chicago Insight Hospital and Medical Center Coldwater david.hughes@iinn.com 401-249-1963 April 14, 2026 Health Resources and Services Administration (HRSA) Re: Opposition to Proposed 340B Rebate Model Dear HRSA Leadership, I am writing in strong opposition to the proposed 340B Drug Pricing Program rebate model on behalf of Insight Hospital and Medical Center Chicago and Insight Hospital and Medical Center Coldwater, both Disproportionate Share Hospitals (DSH) serving vulnerable populations. The proposed shift requiring upfront payment for 340B drugs followed by delayed rebates would impose severe cash flow burdens. Safety-net hospitals like ours would be required to front millions of dollars in drug acquisition costs, particularly for specialty medications, creating financial instability and operational risk. Insight Hospital Chicago serves the South Side community, including the former Mercy Hospital service areaone of the most medically underserved regions in the city. This population faces disproportionate rates of chronic illness, poverty, and limited access to care. The 340B program is essential to sustaining services, improving medication access, and addressing longstanding health disparities. Transitioning to a rebate model would divert resources away from patient care, delay access to medications, and threaten the viability of programs designed to serve these high-need populations. We strongly urge HRSA to reconsider this proposal and maintain the current upfront discount model to preserve access and care continuity. Sincerely, David Hughes, PharmD, R.Ph., DAMCP, ABAAHP Chief Pharmacy Officer Insight Hospital and Medical Center Chicago Insight Hospital and Medical Center Coldwater david.hughes@iinn.com 401-249-1963
HRSA-2026-0001-2102(no commenter metadata)2026-04-20T04:00Z11,315 chars
please see attached responses from The MetroHealth System in Cleveland, OH. The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Response to Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Introduction and Organizational Background The MetroHealth System (MetroHealth) is the super safety-net county hospital system for Cuyahoga County, Ohio. More than 75 percent of our patients are covered by government-sponsored insurance, primarily Medicaid, or are uninsured. MetroHealths mission is to care for anyone and everyone, regardless of ability to pay, while reducing barriers to care and improving community health outcomes. The 340B Drug Pricing Program is essential to MetroHealths financial stability and our ability to deliver charity care, sliding-scale drug access, and comprehensive safety-net services. Because of our payer mix and role as a super safety-net provider, MetroHealth is uniquely exposed to financial, operational, and patient-access harms associated with a rebate-based model. RFI Question 1: Whether HRSA Should Implement a 340B Rebate Model MetroHealth does not support implementation of a rebate-based model under the 340B Program. A rebate model would fundamentally restructure how 340B pricing is delivered by replacing statutory upfront discounts with retrospective manufacturer reimbursements. This approach shifts financial, operational, and compliance risk from manufacturers to covered entities, contrary to the statutory intent of the 340B Program. For safety-net hospitals like MetroHealth, whose ability to serve vulnerable populations depends on predictable 340B savings, a rebate model would destabilize operations, strain liquidity, compromise confidential, financial, and patient data, divert resources from patient The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org care, compliance, and program integrity, and reduce patient access to medications and other essential services. RFI Question 2: Operational Standards, Payment Timing, and Reconciliation Under the current 340B upfront discount model, MetroHealth purchases drugs at Wholesale Acquisition Cost (WAC), validates 340B eligibility at the point of dispensing or administration, and replenishes inventory at the 340B ceiling price for eligible uses. Savings are realized promptly and consistently, allowing those resources to be reinvested into patient care, charity care, and medication access programs. Under a rebate-based model, MetroHealth would be required to: Purchase drugs at WAC; Dispense medications to 340B-eligible patients; Replenish inventory again at WAC; and Wait for manufacturers to retroactively determine eligibility and issue rebates. This structure requires repeated upfront exposure to full WAC costs while delaying access to 340B savings that are critical to ongoing patient care and operational sustainability. Impact on Uninsured Patients For uninsured patients, MetroHealth continues to offer affordable cash pricing regardless of whether a prescription ultimately qualifies for 340B pricing. Because manufacturer determinations may occur after dispensing, there is inherent financial risk, and in some cases pricing may be based on WAC rather than confirmed 340B savings. Despite this uncertainty, MetroHealth assumes this risk today in order to avoid increasing barriers to medication access for uninsured patients. A rebate-based model would significantly expand this exposure and limit MetroHealths ability to sustain these practices. RFI Question 3: Cash Flow, Liquidity, and Financial Risk A rebate model introduces a significant timing mismatch between drug payment obligations and rebate recovery. Average Daily Outpatient WAC Exposure MetroHealths average daily outpatient drug spend at WAC is: The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org Hospital outpatient services: $30,582.63 per day (based on data from June 2025 forward) Retail outpatient pharmacies: $119,234.74 per day This level of daily exposure represents substantial ongoing liquidity risk when 340B savings are delayed or disputed. Rebate Timing Constraints MetroHealth currently operates under net seven (7) day payment terms with its wholesale drug supplier. Any rebate model requiring reimbursement beyond this timeframeincluding common rebate delays of 30 or 60 dayswould create immediate financial strain. Such delays would force MetroHealth to: Draw down limited operating reserves, Access external credit, or Delay or restrict inventory purchases. Given the volume and acuity of medications required to serve our patient population, extended rebate float is not operationally sustainable. Drug Categories with Greatest Exposure Oncology medications pose the greatest cash-flow and operational risk under a rebate-based model due to their high acquisition costs and the narrow window between purchase and administration. These therapies cannot be safely delayed without direct harm to patients, yet repeated WAC exposure severely limits flexibility in inventory and purchasing decisions. RFI Question 4: Patient Access and Operational Impact A rebate-based model would directly and measurably reduce patient access to medications. If required to repeatedly cover WAC costs while awaiting rebates, MetroHealth would be forced to: More tightly control drug inventory, reducing days-on-hand; Require additional internal approvals prior to purchasing high-cost therapies; Limit stocking of certain medications to single locations; Increase courier use and staff management costs; and Delay treatment starts while pre-authorizations, purchasing, and logistics are completed. The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org These changes would result in delayed therapy initiation, increased patient travel burdens, narrower formularies, and higher rates of rescheduling or canceled treatmentsparticularly in oncology and specialty care. MetroHealth is already experiencing access pressures due to drug cost volatility, including restricting certain expensive medications to centralized locations. A rebate-based model would significantly exacerbate these conditions. RFI Question 5: Administrative Burden, Reconciliation, and Institutional Cost Implementing a rebate-based model would impose substantial and permanent administrative costs on MetroHealth. In addition to significant staffing and IT expenses, reconciliation of rebate requests would be an ongoing, time-consuming, and burdensome activity required simply to ensure that MetroHealth receives savings to which it is statutorily entitled. Based on MetroHealths actual experience with the Medicare Maximum Fair Price (MFP) Rebate Program, manufacturers routinely require submission of extensive historical claims data to support or contest rebate determinations. In practice, this has included requests to produce claims data from prior years in order to retroactively demonstrate that dispensing events from recent months were not 340B eligible. These reconciliation demands are operationally unreasonable and disconnected from how hospital pharmacy and inventory systems function. They consume significant staff time without meaningfully improving program integrity and result in covered entities expending administrative resources merely to receive rebates that other entities receive automatically at the point of sale. As a super safety net provider, MetroHealths staff is already stretched thin. Under a rebate- based 340B model, we would face an untenable choice: either forgo rebates entirely because reconciliation is too burdensome to complete, or hire additional staff simply to access the sameor potentially lesscost savings that MetroHealth has relied upon since joining the 340B Program in 1994. MetroHealth estimates that a rebate-based model would require at least five (5) additional full- time analysts and one (1) information systems analyst, resulting in at least $750,000 per year in new ongoing administrative costs, diverting limited resources away from direct patient care. RFI Question 6: IT, Data Governance, and Security Risk Manufacturer-required rebate platforms demand submission of detailed utilization data that may be recombined with PBM data and re-identified. These platforms often operate under non-negotiable terms of use that do not meet MetroHealths data privacy, security, and governance standards. The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org MetroHealth would not accept such terms in any other operational or clinical context, particularly where protected health information or sensitive utilization patterns are involved. RFI Question 7: Duplicate Discount Prevention and Superior Alternatives MetroHealth already prevents Medicaid duplicate discounts through multiple robust mechanisms, including: Registration in HRSAs Medicaid Exclusion File; Use of claim-level modifiers where applicable; Exclusion of 340B drugs from Medicaid claims in contract pharmacy settings; and Internal and independent external audits. A rebate-based model is not necessary to prevent duplicate discounts. MetroHealth strongly supports development of a neutral, HRSA-administered 340B data clearinghouse as a superior alternative. A centralized clearinghouse would: Preserve statutory upfront 340B pricing; Prevent duplicate discounts using standardized, authoritative data; Maintain HRSA oversight and enforcement authority; Support compliance and program integrity; Reduce administrative burden and data fragmentation; and Protect covered entities from discriminatory PBM reimbursement practices. Unlike manufacturer-controlled rebate platforms, a clearinghouse maintains shared responsibility for program integrity without shifting 100 percent of financial and operational risk to safety net providers. Conclusion MetroHealth urges HRSA not to implement a rebate-based model under the 340B Program. A rebate model would shift risk to covered entities, impose unsustainable financial and administrative burdens, and undermine access to care for vulnerable patients. If HRSA determines that additional data exchange is necessary to prevent duplicate discounts, a centrally administered clearinghouse is the appropriate path forward. MetroHealth appreciates the opportunity to provide these comments and stands ready to assist HRSA in further evaluation. The MetroHealth System . 2500 MetroHealth Drive . Cleveland, Ohio 44109-1998 . www.metrohealth.org Sincerely, Kinsey Jolliff Vice President, Reimbursement The MetroHealth System
HRSA-2026-0001-2103University of Michigan HealthSparrow2026-04-20T04:00Z15,655 chars
See attached file(s). Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: University of Michigan HealthSparrow (UM HealthSparrow) appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect UM Health Sparrows experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments University of Michigan HealthSparrow is MidMichigans largest and only community-owned, community-governed health system, and a proud member of the University of Michigan Health network, which is the top-ranked academic health system in the state. Founded in 1896 when the Womens Hospital Association committed to serving the sick of Lansing with $400 and a rented house, UM HealthSparrow has grown over more than 125 years into a comprehensive integrated health system with its flagship 733-bed Level I Trauma Center hospital in Lansing, five community hospitals, and more than 150 sites of care across Mid-Michigan, served by over 526 providers. UM HealthSparrow is the regions only Level I Trauma Center, a Joint Commissioncertified Comprehensive Stroke Center, and delivers more than 4,500 births annually. It is also home to the Herbert-Herman Cancer Center and the Thoracic Cardiovascular Institute, offering world-class cancer and heart care to Mid-Michigan residents. Guided by its mission to improve the health of the people in our communities by providing quality, compassionate care to every patient, every time, UM HealthSparrow serves all patients regardless of their ability to pay. As a disproportionate share hospital (DSH) and a 340B-participating covered entity, UM HealthSparrow is a cornerstone of the healthcare safety net for the people of Mid- Michigan. The 340B program is foundational to our ability to carry out that mission. During the most recent fiscal year, UM HealthSparrow processed 176,172 340B transactions (limited to ambulatory pharmacies), reflecting the significant scale and operational complexity of our program. We currently invest approximately $950,000 annually in third-party administrators and compliance infrastructure to maintain rigorous adherence to the upfront 340B discount model. Transitioning to a rebate-based structure would fundamentally destabilize this model, imposing severe financial, operational, and administrative burdens on our institution, and ultimately harming the vulnerable patients and communities we serve. UM HealthSparrow firmly opposes the proposed 340B Rebate Model Pilot Program. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on University of Michigan HealthSparrow. Under a rebate model, University of Michigan HealthSparrow would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $1.0 million in additional cost, given that we typically hold a two-week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the currently listed MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. Beyond the inventory carrying cost, University of Michigan HealthSparrow anticipates approximately $58,000 per month in denied rebate claims under a rebate model, and absent appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would represent a permanent and recurring financial loss that diverts scarce resources away from direct patient care. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow strongly disagrees with HRSAs assessment that these impacts would be minimal. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and expanded administrative staffing. These are not temporary transition costs; they are permanent structural burdens. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for University of Michigan HealthSparrow. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between purchase and rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning University of Michigan HealthSparrow would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the rebate structure as proposed. If rebate eligibility is conditioned on demonstrating patient administration or dispensing, no mechanism exists to eliminate the inherent gap between purchase and repayment. Preferable alternatives would include structuring the program as a consignment model, where covered entities are not charged at WAC until a drug is administered, or allowing the purchase to be made at the upfront 340B price but reclassified to WAC only if data is not submitted within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter our data management obligations in ways our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms, which requires the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that data required for rebate adjudication does not align with information stored in our current systems. Pharmacy claims are processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide the accurate, comprehensive, contemporaneous data that a rebate model would demand. Under a rebate model, we would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts, all of which would be ongoing and resource-intensive obligations. We strongly recommend that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. For pharmacy claims, required fields should be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. We further dispute the assertion that such a radical shift in data requirements is necessary for program integrity. A neutral, government-funded third-party data clearinghouse could effectively collect and share necessary data with relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured dispute resolution framework. University of Michigan HealthSparrow expects approximately 10% of submitted claims to be denied under a rebate model without appropriate guardrails, translating to an estimated $58,000 per month in unrecovered funds specific to MDPNP drugs. Our position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation must be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other non-statutory rationale. Any denial must be accompanied by specific, transparent documentation, including the date of the prior rebate payment and the identity of the recipient, so that University of Michigan HealthSparrow can validate and, where appropriate, dispute the denial. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent dispute resolution mechanism that is not manufacturer-controlled for resolving contested claims. Without these protections, covered entities will absorb losses without meaningful recourse. Program Integrity and Transparency University of Michigan HealthSparrow is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase, significantly complicating real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Manufacturers already receive extensive data on 340B purchases through the existing chargeback process and Drug Supply Chain Security Act transaction reporting. A rebate model does not provide manufacturers with new information; it merely gives them greater leverage over the disbursement of funds that covered entities have lawfully earned. University of Michigan Health Sparrow is committed to full compliance and transparency, as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations University of Michigan HealthSparrow respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, University of Michigan HealthSparrow urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity, to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a vital lifeline for University of Michigan HealthSparrow and the vulnerable patients we care for across Mid-Michigan for over thirty years. It enables us to expand access to essential therapies, sustain charity care programs, support community health initiatives, and serve all who come through our doors regardless of their ability to pay, and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing approximately $1.0 million in inventory carrying costs and $58,000 per month in projected denied claims. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services University of Michigan HealthSparrow 340B HRSA ID DSH230230 EDWARD W SPARROW HOSPITAL ASSOCIATION 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-2104Takeda Pharmaceuticals2026-04-20T04:00Z13,401 chars
Please see attached VIA ELECTRONIC FILING TO: www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA Docket No.: HRSA202603042) Dear Administrator Engels: Takeda Pharmaceuticals (Takeda) appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) in response to the Request for Information: 340B Rebate Model Pilot Program (RFI) regarding a 340B rebate model (Rebate Model).1 Takeda is a global, values-based, R&D-driven biopharmaceutical company focused on creating better health for people and a brighter future for the world. We aim to discover and deliver life-transforming treatments in our core therapeutic and business areas, including gastrointestinal and inflammation, rare diseases, plasma- derived therapies, oncology, neuroscience and vaccines. Takeda strongly supported HRSAs 2025 approval of the 340B Rebate Model Pilot Program (Pilot Program).2 We urge HRSA to reapprove a rebate model promptly, which would help to promote program integrity and to conform the 340B program with the goal of increasing access to care for vulnerable patients. By requiring that covered entities submit basic claims data to obtain rebates that reduce their net drug prices to 340B levels, a rebate model would enable manufacturers to identifyand preventnoncompliance with legal requirements, including the 340B laws bans on duplicate discounting and diversion and the Inflation Reduction Act (IRA) provisions to prevent maximum fair price (MFP)/340B duplicate discounts. In addition, Takeda encourages HRSA to make IRA selected drugs 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026), https://www.govinfo.gov/content/pkg/FR-2026-02-17/pdf/2026-03042.pdf; Request for Information: 340B Rebate Model Pilot Program Extension, 91 Fed. Reg. 9632 (Feb. 26, 2026), https://www.govinfo.gov/content/pkg/FR-2026-02-26/pdf/2026-03838.pdf. 2 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction, 90 Fed. Reg. 38165 (Aug. 7, 2025), https://www.govinfo.gov/content/pkg/FR-2025-08-07/pdf/2025-14998.pdf. 2 eligible for any new rebate model that HRSA develops beginning the January following their selection, which would allow manufacturers a limited period to gain important experience with the rebate model before the IRA deduplication process begins. For example, drugs that were selected in January 2026 for inclusion in Initial Price Applicability Year (IPAY) 2028 would be eligible to participate in a rebate model on January 1, 2027. Takeda is a member of the Pharmaceutical Research and Manufacturers of America (PhRMA) and fully supports PhRMAs comments on the RFI. We incorporate PhRMAs comments by reference. Our separate comments below focus on: why a rebate model is necessary and how it can improve 340B program integrity; the selected drugs that should be part of any new rebate model and the timing of their entry into the model; and the importance of HRSA again approving collection of 1) the medical benefit claims data fields it approved under the terminated Rebate Pilot, and 2) purchase data that will allow manufacturers to verify that a covered entity requesting a rebate actually purchased the drug and at what price. A. A Rebate Model Can Resolve Transparency and Data Limitations in the 340B Program, Significantly Improving Program Integrity and Reducing Noncompliance. The 340B program has evolved since it was authorized by Congress more than thirty years ago. While the program was established to lower drug costs for uninsured and indigent patients, 3 over the years the program has increasingly departed from that purpose. Many types of covered entities have been permitted to charge patients and their insurers market rates for the drugs they obtain at steep 340B discounts. Further, they use replenishment models (which involve dispensing drugs to 340B and non-340B patients from a common inventory) and align with an unlimited number of for-profit contract pharmacies to dispense 340B drugs and share in the gains from 340B discounts. In 2024, covered entities made 340B purchases of $81.4 billion at discounted 340B prices that would have cost $147.8 billion at list price.4 Despite the exponential growth of the 340B program, the oversight mechanisms available to manufacturers remain the same, and place significant limits on manufacturers abilities to detect and prevent violations of the statutory, and fundamental, bans on duplicate discounting and diversion. Experience with existing audit and administrative dispute resolution processes shows that they are simply too slow and burdensome to be effective as long-term controls. As a result, difficulties in enforcing prohibitions on duplicate discounting and diversion in the 340B law have multiplied. 3 H.R. Rep. 102-384(II) at 10-12 (1992). The federal 340B Programs intent is to reduce pharmaceutical costs for safety-net medical providers and the indigent populations they serve by creating a low-cost source of pharmaceutical medication for the indigent patients themselves. 4 Drug Channels Institute, 340B Hit $81 Billion in 2024 (+23%): Why CMS and the IRA Are Poised to Cool the Programs Runaway Growth (Dec. 15, 2025), https://www.drugchannels.net/2025/12/340b-hit-81-billion-in- 2024-23-why-cms.html. 3 By enabling manufacturers to obtain claims data that allows them to identify and stop potential violations of the duplicate discount and diversion bans efficiently, a rebate model could improve the integrity of the 340B program and compliance with federal statutory requirements. For example, federal law prohibits 340B/Medicaid duplicate discounts.5 In addition, under the IRA, manufacturers are not required to pay MFP rebates and 340B discounts on the same unit of drugif a selected drug is sold under 340B and furnished to a Medicare beneficiary, manufacturers provide the lower of the MFP or the 340B ceiling price for a given unit of drug.6 In the case of the IRA, manufacturers, and not CMS, must ensure that 340B covered entities receive the MFP in a nonduplicated amount to the 340B ceiling price when the MFP for the selected drug is lower than the 340B ceiling price.7 Because covered entities use a replenishment model for 340B purchasing, manufacturers cannot identify units subject to both 340B and MFPand thus cannot prevent MFP/340B duplicate discountswithout proper data. A rebate model is crucially important to identify and address noncompliance, especially with regard to MFP/340B duplicate discounts, as no government mechanism exists to detect or prevent them. B. HRSA Should Permit Manufacturers of Drugs Selected for Price Negotiation to Participate in a Rebate Model for a Short Learning Period Before the Start of MFP Pricing. Takeda requests that HRSA not only reapprove a rebate model, but that it also design the model to permit manufacturers of drugs selected for price negotiation to participate in the model in advance of the selected drugs IPAY. Specifically, we propose that IRA selected drugs be eligible for a new rebate model the January following their selection (e.g., the list of selected drugs that CMS published on January 27, 20268 should be rebate model-eligible on January 1, 2027). In its information collection request (ICR) for a new rebate model, HRSA indicated that a new rebate model would be open to IPAY 2026 and 2027 selected drugs.9 However, we believe the slightly different timeline we recommend would have important advantages, as it would enable manufacturers to resolve any issues with the operation of the rebate model before the MFP is effective and 5 PHSA 340B(a)(5)(A); SSA 1903(m)(2)(A)(xiii); SSA 1927(j)(1). 6 SSA 1193(d). 7 CMS has stated that it is not charged with verifying or otherwise reviewing whether a particular drug claim is 340B-eligible and instead requires the manufacturer to provide access to the MFP to 340B covered entities in a nonduplicated amount to the 340B ceiling price if the MFP for the selected drug is lower than the 340B ceiling price. CMS, Drug Price Negotiation Program: IPAY 2028 Final Guidance, 40.4.5, at 253, 255 (Sep. 30, 2025) (IPAY 2028 Final Guidance), https://edit.cms.gov/files/document/ipay-2028-final- guidance.pdf. 8 CMS, Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2028 (Jan. 2026), https://www.cms.gov/files/document/factsheet-medicare-negotiation-selected-drug-list-ipay- 2028.pdf. 9 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906NEW, 91 Fed. Reg. 9632 (Feb. 26, 2026), https://www.govinfo.gov/content/pkg/FR-2026- 02-26/pdf/2026-03838.pdf. 4 the deduplication process begins. This approach should help to avert any potential errors in deduplication and would bolster 340B program integrity. C. In Addition to Pharmacy Claims Data, a Rebate Model Should Require Covered Entities to Submit Medical Claims Data and Purchase Data Elements Takeda emphasizes that a rebate model should require covered entities to submit both pharmacy and medical claims data to manufacturers, as HRSA permitted under the prior Pilot Program.10 Takeda proposes that HRSA approve a rebate model with the elements shown in Figure 1 below (which are the same elements that HRSA approved under the now-terminated Pilot Program) and additional purchase data elements. Even if HRSA proceeds with a rebate model that is limited to IRA selected drugs for IPAYs 2026 and 202711which we do not recommendit is important to require submission of pharmacy and medical claims data. Although the selected drugs for IPAYs 2026 and 2027 are considered Part D drugs, these drugs may still be administered as a medical benefit in some cases. Thus, pharmacy claims data fields alone would not always provide adequate data to determine if an IPAY 2026 or 2027 selected drug is 340B rebate- eligible. Additionally, given the inclusion of Part B drugs in IPAY 2028, it is critical that HRSA require submission of medical claims data to ensure manufacturers of selected drugs have adequate data to avoid duplication once MFPs go into effect. The medical claims data that HRSA approved under the prior Pilot Program is commercially reasonable, standard information that a covered entity generally maintains and submits to other parties in the ordinary course of business. In addition, HRSA requires covered entities to submit similar pharmacy and medical claim elements as part of 340B audits.12 Accordingly, it is important that both pharmacy and medical claims data are provided to manufacturers under a rebate model, which would enable manufacturers to identify prohibited duplicate discounts. We also recommend as part of any rebate model that HRSA require the submission of certain purchase data. This will allow manufacturers to verify that the covered entity 10 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/https://www.hrsa.gov/opa/340b-model-pilot-program (available on Dec. 17, 2025). 11 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906NEW, 91 Fed. Reg. 9632 (Feb. 26, 2026), https://www.govinfo.gov/content/pkg/FR-2026- 02-26/pdf/2026-03833.pdf. 12 Apexus, 340B Prime Vendor Program, Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities (2025), https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa- 340b-audit-data-request-for-covered-entities.pdf. 5 claiming a rebate actually purchased a drug and at what price, critical information to ensure the validity of a rebate request. Figure 1: Proposed Data Fields13 Pharmacy Claims Data Fields Medical Claims Data Fields Date of Service Date of Service Date Prescribed Claim Line Number Rx number Claim Number Fill number Unit of Measure NDC-11 NDC-11 Quantity Dispensed Quantity Prescriber ID Rendering Physician ID Service Provider ID Service Provider ID 340B ID 340B ID RX BIN Health Plan Name RX PCN Health Plan ID Group Number ID (optional) Health Plan ID Qualifier (optional) HCPCS Code (optional) HCPCS Modifiers (Up to 4) (optional) Purchase data elements (for pharmacy and medical claims) Wholesaler Name Wholesaler Account Number Invoice Date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID 13 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/https://www.hrsa.gov/opa/340b-model-pilot-program (available on Dec. 17, 2025). 6 Thank you for considering Takedas comments. Please feel free to contact me at natalie.morris@takeda.com with any questions. Sincerely, Natalie Morris Director, Public Policy & Reimbursement U.S. Public Affairs Takeda Pharmaceuticals
HRSA-2026-0001-2105Henry Ford Health2026-04-20T04:00Z51,429 chars
On behalf of Henry Ford Health, we are pleased to submit the attached comment letter in response to the Health Resources and Services Administration's request for information on a 340B rebate model. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted electronically to https://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: On behalf of Henry Ford Health, we appreciate the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) on the 340B Rebate Model Pilot Program (HRSA-2026-03042). The 340B Drug Pricing Program (340B) plays a vital role in helping to ensure access to affordable healthcare for patients across the country. As a safety net provider, the 340B program is critical to our ability to provide charity care, other uncompensated care, and community benefits. We are deeply concerned that a rebate model, in any capacity, would have a negative financial impact on Henry Ford Health and, in turn, limit our ability to provide essential services and programs to our patients and communities, as described in more detail below. We urge HRSA to consider the significant negative impacts a rebate model would have on the 340B program and instead maintain an upfront discount model. Henry Ford Health is a large, Michigan-based, non-profit corporation and integrated healthcare delivery system. We have been committed to improving the health and wellbeing of the community for over 110 years. Henry Ford Health offers healthcare services across the continuum through a diverse network of facilities in the greater Detroit, Flint, and Jackson regions. The system has approximately 50,000 valued employees, more than 550 care delivery locations, and 13 acute care hospitalsincluding our flagship Henry Ford Hospital, a large academic safety net hospital located within the city of Detroit. Several of our hospitals qualify for 340B as disproportionate share hospitals or rural referral centers. This includes Henry Ford Hospital, our main hospital that operates in Detroit. There are no public hospitals in Detroit, so the few private hospitals in the region are responsible for providing charity care and other forms of uncompensated care in the community. All of our qualifying hospitals meet the high disproportionate share adjustment percentage required to qualify for 340Bmeaning they provide healthcare services to a large proportion of low-income and vulnerable patients. General Comments 340B hospitals are, by definition, safety net providers committed to providing care to underserved and vulnerable populations. 340B hospitals provide 77% of the hospital care provided to Medicaid patients and 67% of all hospital uncompensated care. This commitment to providing high-quality care to all patients, regardless of an individuals insurance coverage or ability to pay, often means that safety net hospitals operate on thin financial margins. 340Bwhich was intended for covered entities to stretch 2 scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive servicesis vital to the ability of safety net providers to extend care to the millions of patients who rely on the many services and programs these hospitals are able to provide because of this 30-year-old program. Of note, 340B drug discounts do not utilize federal taxpayer dollars. The discounts are provided by pharmaceutical manufacturers, which voluntarily agree to participate in the program because they receive a major benefit for participation: their drugs are covered by Medicare and Medicaid. Thus, any cuts or modifications to the program that would reduce 340B savings for covered entities would effectively bolster drug manufacturers revenues while reducing safety net providers ability to provide charity care, other uncompensated care, and community benefits and programswithout achieving ANY tax savings or impacting overall drug spending. For Henry Ford Health, the 340B program is immensely valuable. It is an essential part of the delicate balance of benefits and expenses that allows our health system to provide uncompensated care including charity care and care for patients with Medicare and Medicaid where reimbursement does not fully cover the costsand other community benefits. Collectively, for Henry Ford Health, these costs amounted to $1.6 Billion in 2025. While 340B savings offset only a portion of our total uncompensated care costs, without these savings, Henry Ford Health would not be able to provide the breadth of charity care, other uncompensated care, and community benefit services that we currently provide. Specific examples of the ways in which 340B savings are used at Henry Ford Heath include: Free or reduced patient care Providing charity care to cover patient copayments, coinsurance, deductibles, and, in some cases, to fully cover patient healthcare costs Providing free and reduced cost medications to underserved patients across the system Providing reduced cost medical and behavioral healthcare across the system to the uninsured and underinsured Helping to cover implicit price concessions (bad debt/uncollected patient payments) from patients who cannot afford to pay for the full cost of care Prescription drug/pharmacy support Embedding pharmacists in primary care and specialty clinics in Detroit to optimize treatment of chronic diseases and expand patient access through face-to-face appointments Expanding an internal Medication Therapy Management program to support patient adherence and compliance Expanding Specialty Pharmacy to include hub teams (a dedicated team that specializes in a particular disease state) for most disease states to ensure patient compliance and monitoring Providing additional services for all patients including the Meds to Beds program, home delivery, and courier services Community programs and services Operating a comprehensive hemophilia treatment center to provide care for this vulnerable part of the community Helping to fund and staff local community health centers, also known as Federally Qualified Health Centers (FQHCs) 3 Operating school-based and community health programs in child and adolescent health centers and mobile medical units Leading our community to better health and well-being at every stage through regular health fairs, screenings, and outreach Offering no-cost health screenings to address issues such as chronic disease management Providing transportation programs to help bring our patients to their healthcare appointments While charity care and other components of uncompensated care will always be a core focus of our mission, any restriction on 340B would have the effect of reducing Henry Ford Healths ability to provide access to care in our communities. We are concerned that introducing a rebate model into the 340B program in any size or form would have the aforementioned effects by shifting financial burden from highly profitable drug companies to safety net providers and reducing overall 340B savings. 340B discounts have been offered by manufacturers to nearly all covered entity types through upfront pricing for the past 30 years. We agree with HRSAs previous comments that this model would fundamentally shift how 340B has operated since its inceptionwithout a clear reason for this sudden changeand would impose major financial and operational burdens on 340B hospitals, regardless of the scale. We are concerned that implementing a 340B rebate model does not solve any known problems but creates many potential problems for covered entitiesthe safety net providers for whom the 340B program was created to support. Losses from a rebate model would compound the losses that hospitals already incur for providing care to vulnerable and otherwise underserved patients. Losses from the rebate model would also compound other recent cuts to Medicaid and other federal spending under the One Big Beautiful Bill Act (OBBBA) that are expected to further strain already scarce resources for safety net hospitals committed to providing care to low-income and underserved patients. Adding an additional layer of financial uncertainty could destabilize 340B hospitals and, in turn, the programs and services we provide for our patients. Along with a coalition of like-minded health systems, we met with HRSA on July 2, 2025, to share our concerns about a 340B rebate model and reiterated many of those same concerns in a comment letter submitted to HRSA on September 9, 2025 in response to HRSAs initial 340B rebate model pilot program announced last year. Below, we provide additional information in response to the questions posed by HRSA in this latest RFI. In addition to the comments below, as participants in the Hall Render Pharmacy & 340B Collaborative, we support their efforts and comments submitted on this topic. We continue to urge HRSA to refrain from implementing a rebate model in the 340B program and instead work with key 340B stakeholders, including covered entities, to find meaningful ways to protect 340B. Specific Comments Below are responses based on the specific questions posed by HRSA in the RFI. Implementing a 340B Rebate Model would be a Significant Cost for Covered Entities Shifting from an up-front 340B discount model to a rebate model would require Henry Ford Health to invest significant resources into new administrative and operational costs. The 340B program is already an administratively complex program that requires staff, information technology (IT) systems, and third- 4 party vendors to process transactions and maintain compliance. Given our current hiring, operations, infrastructure, and program administration are designed around an upfront discount model, it would take considerable effort and time to modify existing structures and workflows to accommodate new administrative and compliance activitiesincluding new requirements for data submission, rebate processing, reconciliation, and dispute resolutionthat would increase our costs and introduce new liabilities. In total, to implement and maintain a rebate model, we estimate that we would have to invest nearly $2 million annually in new software, platforms, third-party vendors, and staff to manage and reconcile rebates. Importantly, these are not one-time costs, but rather reflect the ongoing operations required to continuously submit claims, reconcile payments, contest denials, and manage IT functions under a rebate model. This estimated burden is based on initial discussions in preparation for HRSAs originally proposed rebate model pilot program for 10 drugs, and would increase if the rebate model was expanded to include additional drugsas an expanded rebate model would require more claims to submit, track, and reconcile. Covered Entities would Need to Implement New IT Systems to Operationalize a Rebate Model A 340B rebate model would require Henry Ford Health to make substantial new IT investments beyond our current infrastructure. Based on the original pilot program, HRSA would require covered entities to submit eleven different data elements per claim in order for drug manufacturers to determine if a claim would even qualify for a 340B discount. This is a significant amount of data required for each claim data that covered entities have not previously had to submit. Collecting and transmitting this data would require aggregating data from various sources and pharmacy settings, such as in-house pharmacies, drugs dispensed in mixed-use settings, and contract pharmacies. We would need additional IT infrastructure and staff to submit the claims data needed to produce these data submissions in hopes of a rebate. In addition to the up-front data submission, we would also need to have the capability to conduct reconciliation, audit management, and secure data exchange in alignment with a rebate model. Updating our IT platforms would be critical to automating workflows, ensuring financial accuracy, and maintaining overall compliance. We anticipate one-time costs for vendor implementation fees, as well as IT and legal staff to build the rebate model infrastructure. We also anticipate recurring annual costs for software licensing and ongoing maintenance. These IT costs would erode the financial benefit of 340B participation, however, these investments would be essential to help minimize Henry Ford Healths operational and financial risks under a rebate model. Covered Entities would Have to Hire Additional Staff to Implement a Rebate Model Under a rebate model, Henry Ford Health would require a minimum of three additional full-time staff to sustain the increased administrative, operational, and compliance workload. This estimate is based on the volume of claims, the complexity of manufacturer requirements, and the need for continuous reconciliation and audit readiness. We anticipate that additional staff would be needed across departmentsincluding pharmacy, finance, IT, and complianceto absorb new functions that do not exist today at scale for claims identification, data submission, reconciliation, and audit documentation. Compliance teams would face expanded audit obligations and heightened duplicate discount risks, increasing both workload and legal exposure. Henry Ford Health would also incur legal review and 5 contracting costs to implement a 340B rebate model. This would include initial and ongoing evaluation of data sharing agreements and manufacturer portal requirements, as well as support related to ongoing audits and disputes. We would also need to spend resources training pharmacy, finance, compliance, and IT teams on changes, both initially and annually as manufacturer requirements evolve. Consulting and vendor implementation services would be required to configure automation tools, optimize data pipelines, and support reconciliation processes. Henry Ford Health may experience temporary productivity losses during the transition to a rebate model, as well as recurring operational impacts if staff and budgets are diverted to support rebate model administration. These roles would not be short term; the functions introduced by a rebate model are ongoing, recurring, and structurally embedded, meaning the new full-time staff would be permanent unless the rebate model were discontinued. The administrative and operational functions introduced by a rebate model recur with every claim cycle, every rebate submission, every reconciliation period, and every audit. Henry Ford Health would be required to submit claims continuously, reconcile payments weekly or monthly, work with manufacturers on denials and audits, and maintain IT integrations indefinitely. Thus, these reflect structural operational changes, not temporary implementation tasks. Manufacturers Should be Responsible for Offsetting the Substantial Implementation Costs We are concerned that the rebate model outlined in the original pilot does not fully account for the additional financial impacts associated with these added operational and compliance costs. Under HRSAs original pilot program, manufacturers approved to participate in the pilot would have been required to pay for all technical and administrative costs and ensure there are sufficient data security assurances and customer service components. HRSA, however, did not specify what is included in its definition of all costs. If a rebate model was structured to offset the significant new administrative and operational burdens placed on covered entities, drug manufacturers would need to be responsible for the costs not only of acquiring and implementing the IT programs and infrastructure needed for data submission but also for the labor costs needed to have additional staff collect, organize, and submit the required data and maintain overall compliance. Without clear details on how covered entities would be reimbursed for these costs, this represents another example where safety net providers would be required to float costs with minimal or no understanding of when or if they will be made whole by drug manufacturers. The agency should further define these costs and include requirements around reimbursement for these administrative costs beyond just attestations from drug manufacturers. For example, HRSA could consider requiring drug manufacturers to pay a standardized administrative add-on or federally set fee for each rebate claim or find another mechanism to ensure that covered entities are made whole in a timely, accurate, and reliable fashion. A Rebate Model would Result in Negative Cash Flow Impacts for Covered Entities A rebate model would require covered entities to purchase selected drugs at wholesale acquisition cost (WAC)which represents the list price for wholesalers or direct purchasers without any discounts, rebates, or price concessions. According to the American Hospital Association, the WAC price can be more than 100 times the 340B price for the same drug. Even though the pilot program may be limited to certain drugs, the ten selected drugs under the originally proposed pilot program are some of the costliest in the Medicare Part D program. Covered entities would be forced to pay these high prices and then wait for a reimbursement to receive the 340B priceif it is approved by a drug manufacturer. Any expansion of the pilot to include additional drugs, as HRSA has indicated it is considering, would only exacerbate these challenges. According to estimates by 340B Health, if the entire 340B program moved 6 to a rebate model, the average DSH would be forced to float an estimated $72.2 million to manufacturers annually. This significant shift in financial burden from profitable drug companies to safety net providers serving their patients and communities does not align with 340Bs intent and would have significant negative consequences for hospitals and their patients. The structural changes imposed by the use of a rebate model in the 340B program, however limited, would have significant implications for Henry Ford Healths cash flow stability and overall financial risk. Under the current up-front discount model, savings are realized immediately, allowing the organization to reinvest those funds directly into patient care, medication assistance programs, and community programs. A shift to a rebate-based structure would introduce a delay between drug purchase and receipt of savings, creating a period during which Henry Ford Health would have to absorb the full acquisition cost of medications, impacting our ability to reinvest the savings. Even with HRSAs original pilot model requiring rebates to be disbursed within 10 calendar days of data submission, that delayed discount would have a meaningful impact on our institution and the patients we serve. First, there would likely be significantly more than 10 days between when the drug is purchased and a rebate is given, when accounting for the full process, from date of purchase, to patient dispense (weeks or months later), to data collection and submission. For safety net hospitals that operate on thin financial margins, the impact of the delay in realizing 340B savings could have significant negative financial impacts. Henry Ford Health would experience cash flow disruption, as drugs would be purchased at the full price upfront and rebates would be recovered weeks or months later, increasing working capital needs and reducing pharmacy margin stability. The timeline for receipt of rebates could be further complicated by Henry Ford Healths existing wholesaler agreements. Henry Ford Healths current wholesaler payment terms for all drugs are governed primarily by a wholesaler that operates under an arrangement whereby Henry Ford Health must remit full payment within 30 days of invoice, with late fees assessed beginning on day 31, creating a predictable but firm cash-flow cycle for all drug purchases. These payment terms apply equally to 340B and non-340B drugs, meaning Henry Ford Health must pay the full acquisition cost upfront regardless of pricing category. In addition to our primary wholesaler relationship, Henry Ford Health also utilizes secondary wholesalers and specialty distributors, many of which impose more restrictive payment timelines, including due-on-receipt, or within seven to 10 days of invoice. These accelerated payment requirements further compress the organizations cash-flow window, particularly for high-cost specialty medications that may be sourced outside the primary wholesaler channel. As a result, any shift from the current 340B replenishment model to a rebate-based modelwhere savings are realized only after claims submission and manufacturer reimbursementwould extend the period during which Henry Ford Health would have to carry the full acquisition cost on its balance sheet. This would create heightened financial exposure, increase working capital needs, and elevate the risk of late-payment penalties, especially if rebate payments are delayed, disputed, or subject to manufacturer-imposed administrative barriers. This timing gap could be particularly challenging given the existing manufacturer restrictions that already impede the ability for covered entities to access 340B savingssuch as limitations on contract pharmacy use, requirements for extensive claims level data submission, and the removal of 340B pricing from designated single contract pharmacies. These restrictions have slowed or prevented 340B savings, reducing available cash and increasing the financial exposure associated with high-cost specialty drugs. If similar manufacturer behaviors occur under a rebate modelsuch as delayed payments, denial of 340B eligible claims, time needed to dispute these claims, or selective non-participationthe financial risk to 7 Henry Ford Health could be substantial, potentially resulting not only in financial challenges but also limiting our capacity to fund patient support programs. All of these many different costs and burdens add up, particularly for safety net providers like Henry Ford Health that already operate on thin financial margins. While timely payment requirements could mitigate some of the risks, any deviation from strict enforcement or any manufacturer-driven administrative barriers would amplify financial strain and undermine the stability of 340B savings that the organization relies on to support vulnerable patient populations. Unfortunately, that means that Henry Ford Health would no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. A rebate model would limit our ability to provide robust community benefits and uncompensated careat a time when we expect uncompensated care costs to increase due to other policy changes to Medicaid and the Affordable Care Act under OBBBA that are likely to result in reimbursement cuts and fewer insured patientsfurther straining hospitals budgets. A Rebate Model would Position Drug Manufacturers to Deny Eligible Rebates Not only would a rebate model delay 340B savings for covered entities, it could also reduce overall 340B savings if drug manufacturers do not provide a rebate on eligible 340B drugscreating even further financial uncertainty for Henry Ford Health. Reduced 340B savings would further undermine our ability to provide uncompensated care (charity care and bad debt) and community benefits. It could also impede the ability of many covered entities to provide access to essential servicesincluding those that may be high cost or operate at a loss. While HRSA included some guardrails in the initial rebate model pilot program, we are concerned that, without further safeguards, a rebate model could further erode the 340B program. As initially outlined, the pilot program would ultimately allow manufacturers to assume greater oversight responsibilities of the 340B program by leaving determination of which drugs are 340B eligible to the manufacturers. HRSA did specify that drug manufacturer plans should ensure that 340B rebates are not denied based on compliance concerns with diversion or Medicaid duplicate discounts and should provide rationale and specific documentation for reasons claims are denied. Without explicit instruction on how HRSA intends to oversee the rebate model or allow covered entities to appeal such denials, however, there is little to ensure drug manufacturers comply with this provision. We are concerned that this shift in oversight responsibility would circumvent statutory authority that designates HRSA as the oversight authority and would likely result in many 340B claims being unfairly denied at the manufacturers discretion, with no oversight or appeal mechanism available to 340B hospitals. For example, we are concerned that drug manufacturers may use the 340B rebate model as a way to enforce compliance with their contract pharmacy restriction policies. Since 2020, more than 35 drug manufacturers have unlawfully and unilaterally restricted 340B savings through contract pharmacy arrangements. These manufacturer-imposed restrictions have been harmful to covered entities, which have been forced to modify operations, submit unnecessary data to drugmakers in exchange for discounts, and in some cases, had 340B pricing completely restricted. We are concerned that the rebate model pilot program would provide additional opportunities for drugmakers to add additional unilateral contract pharmacy restrictions by denying certain claims, requesting additional covered entity data, and ultimately limiting 340B savings for covered entities. Should HRSA move forward with a rebate model, we urge the agency to help protect against these potential drug manufacturer actions by providing more specific guidance to drug manufacturers on the details they need to provide to 340B covered 8 entities when denying a rebate and considering stronger penalties against drug manufacturers for improper delays or denials. To prevent misuse by drug manufacturers, HRSA could require manufacturers to provide detailed, claims-level documentation supporting any denial, including the specific data source used, the date of the conflicting rebate or discount, and the identity of the entity that received it. The pilot could also require that all denials be submitted through a centralized, time-stamped platform to ensure traceability and facilitate HRSA oversight. To protect covered entities from prolonged uncertainty or cash-flow disruption, the program should establish a clear timeline for adjudicating improper denialsfor example, requiring manufacturers to respond to covered entity reconsideration requests within 10 calendar days and requiring HRSA or the program administrator to issue a final determination within a defined period (e.g., 20 to 30 days). HRSA could also establish a mechanism for 340B covered entities to appeal or file a complaint if manufacturers improperly denied rebates. Incorporating these standardized forms, documentation requirements, adjudication timelines, and appeals processes would help ensure that denials are used only in legitimate circumstances and that covered entities have a predictable, fair process for resolving disputes. These guardrails are essential to maintaining program integrity and protecting covered entities from inappropriate financial risk. Losses to 340B savings under a rebate model would erode the financial benefit of 340B participation, affect patient care and free or reduced cost services provided, reduce operational efficiency, and divert resources from patient-facing and strategic initiatives. Without appropriate oversight of drug manufacturers, the rebate model could represent a net negative operational and financial impact for covered entities including Henry Ford Health. A Rebate Model would Create New Data Security Risks for Covered Entities and Patients During the prior iteration of the rebate program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. However, a rebate model would require covered entities to submit a far more expansive set of pharmacy and medical claims data elements than what is currently providedor neededunder the 340B program. Most of the data elements that would have been required under the initial pilot program are dispersed across multiple different platformsincluding electronic medical records, pharmacy dispensing systems, billing platforms, and contract pharmacy claims feedand are not currently extracted, combined, or transmitted in the patient-level format a rebate model would require. Today, Henry Ford Health furnishes only a limited subset of these data elements to third-party vendors that support program administration. We collect only the data necessary to confirm eligibility and maintain a complete audit trail within secure, enterprise-managed systems focused on protecting patient confidentiality. A rebate model would fundamentally change this structure by requiring Henry Ford Health to transmit far more granular patient-level pharmacy and medical claims data to manufacturers rebate platforms. This would shift operations from a system built on precision, control, and standardization to one that forces sensitive data outside the organizations secure environment, increases exposure points, and introduces new risks that cannot be mitigated through internal process excellence alone. These expanded data sharing requirements, especially to manufacturer-controlled platform(s), and the associated patient confidentiality concerns are central reasons why Henry Ford Health does not support HRSA approving the 340B rebate model. 9 We are concerned that the vendors operating in this space are not neutral third parties, as several have worked closely with drug manufacturers to implement unilateral contract pharmacy restrictions and craft manufacturer-proposed rebate models (prior to HRSAs original pilot program notice). Utilizing these vendors could result in a scenario where the terms and conditions of the contracts 340B hospitals would be compelled to sign would be non-negotiable and contain terms unfavorable to hospitalswhich is what we experienced under the initial pilot before it was halted. Under HRSAs original rebate program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the program. In the few weeks we had to prepare for the start of that program, we encountered serious problems with this vendor. Beacon had made clear that it would not modify its contract language, assumed no liability for data misuse or breaches, and reserved broad rights to use, analyze, or share submitted data at its discretion. This is fundamentally incompatible with the Health Insurance Portability and Accountability Act (HIPAA) that hospitals are subject to, and does not align with Henry Fords principle that organizations must maintain control over the systems that safeguard our patients. A rebate model that forces covered entities to surrender protected health information to a platform with no accountability, no contractual flexibility, and no enforceable limitations on data use creates unacceptable privacy and security risks. For these reasons, Henry Ford Health strongly urges HRSA not to approve a rebate model unless these structural risks are eliminated. HRSA must engage in oversight of these vendors and their contracts with drug manufacturers to ensure data protections and to prohibit misuse under a rebate model. A rebate model should include federally mandated data minimization standards, strict limits on the types of protected health information that may be requested, end-to-end encryption requirements, role-based access controls, and a prohibition on secondary use, data aggregation, or redisclosure by manufacturers or their intermediaries. All third parties, including manufacturers, rebate processors, switches, and contract pharmacy vendors should be required to sign comprehensive Business Associate Agreements with clear liability provisions, breach-notification requirements, downstream data-handling obligations, and audit rights for covered entities. We further believe, however, that rather than data exchange through a rebate model process, HRSA could establish a government-led data collection approach (such as a government- or neutral third party-run clearinghouse) that supports implementation of the Medicare Drug Price Negotiation Program (MDPNP)which HRSA has indicated is the primary purpose of the rebate modelwithout replacing upfront discounts with rebates or sharing patient claims data with manufacturers. This would be a much less disruptive alternative to ensure compliance with the MDPNP without fundamentally altering the 340B program or forcing covered entities to comply with varied manufacturer models or share sensitive data with vendors working directly with drug manufacturers. A Rebate Model would Not Support Efforts to Avoid Duplicate Discounts HRSA has indicated that the primary purpose of the pilot program is to ensure deduplication between 340B and the MDPNP. However, we believe there are other available options to address deduplication under the MDPNP that would be less costly, have fewer liabilities, and be less administratively burdensome for covered entities. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. Since implementation of the MDPNP program on January 1, 2026, Henry Ford Health has implemented significant operational and administrative changes to ensure that drug dispenses subject to the 10 maximum fair price (MFP) are fully excluded from 340B discount eligibility. Previously, Henry Ford Health maintained a structured set of operational, technical, and compliance controls to ensure we meet all statutory requirements related to duplicate discounts and diversionand these longstanding controls have consistently demonstrated our effectiveness, as evidenced by Henry Ford Healths clean audit records across all manufacturer and HRSA audits for at least the past 10 years. To support the new federal requirements, we have updated our previous processes and workflows and engaged with additional vendors dedicated to MFP tracking and reconciliations. Despite extensive efforts to comply, manufacturers have been denying 40-50% of claims that Henry Ford Health has validated as fully entitled to an MFP rebate. Henry Ford Health has been forced into ongoing, resource-intensive administrative review, documentation, and appeals to manufacturers to correct these denials and ensure the organization is made whole. This experience underscores the operational burden and financial uncertainty created by the current MFP processes and highlights the need for greater standardization, transparency, and accountability in manufacturer adjudication if a rebate model were to be implemented. We are concerned, however, that a 340B rebate model would shift sensitive data outside the covered entitys secure environment, expanding privacy and HIPAA risks, and creating a manufacturer-controlled data repository that covered entities cannot audit or govern. It would also require covered entities to share more data than is needed to prevent duplicate discounts. HRSA should take all appropriate steps to streamline and simplify the method and amount of data covered entities need to report to effectuate the pilot rebate models, and should further consider a clearinghouse/claims repository that could serve to implement the MDPNP across agencies while minimizing burden on 340B providers. Drug Manufacturers Should be Required to Regularly Report Data under a Rebate Model While we do not believe HRSA should move forward with a 340B rebate model given the significant concerns identified throughout this letter, should the agency still choose to implement a pilot program, significant oversight of pharmaceutical manufacturers is needed to ensure a rebate model is not used as a tool to unfairly deny eligible 340B claims. To ensure meaningful oversight, participating drug manufacturers should be required to submit standardized, auditable data to HRSA on a recurring basiseither monthly or quarterlyto allow HRSA to verify rebate accuracy, identify inappropriate denials, and monitor for duplicate discounts. Required data elements should include: A complete list of all claims submitted by covered entities for rebate consideration, including national drug code, quantity, days supply, date of service, prescriber national provider identifier, and covered-entity identifier The manufacturers determination for each claim (approved, denied, or pending) with a clear, standardized denial reason code The rebate amount paid for each approved claim The date the rebate was issued Any adjustments, reversals, or post-payment disputes Aggregated metrics showing total claims received, total claims denied, and the percentage of denials by reason category 11 Manufacturers should also be required to submit documentation demonstrating the data sources, matching logic, and validation processes used to adjudicate claims, as well as attestations confirming that no protected health information has been used for secondary purposes or shared with unauthorized third parties. This level of transparency is essential for HRSA to evaluate whether manufacturers are complying with statutory obligations and not unfairly denying 340B claims. Without this level of upfront oversight of drug manufacturers, covered entities will be forced to allocate additional resources to review claims and engage in lengthy and time-consuming appeals processes to try to be made whole. HRSA should provide covered entities with manufacturer compliance data at regular intervals, at minimum quarterly, to ensure transparency, accountability, and program integrity. Reporting should include aggregate metrics such as total rebate claims submitted by covered entities, total claims approved, total claims denied, denial rates by standardized reason category, average rebate payment timelines, and the volume of claims requiring appeal or resubmission. HRSA should also publish a list of manufacturers that were formally cited for noncompliance with any 340B program requirements, including failure to pay rebates timely, inappropriate denials, refusal to accept standardized data formats, or misuse of covered-entity data. For each cited manufacturer, HRSA should disclose the nature of the violation, the corrective actions required, and whether the manufacturer ultimately complied, failed to comply, or required enforcement escalation. All reporting should remain at an aggregate level to protect confidentiality while still providing meaningful insight into manufacturer behavior. This combination of reporting, aggregation, and immediate escalation for serious violations is essential to maintain program integrity and ensure manufacturers meet their obligations under a rebate model. A Rebate Model would Undermine 340B Program Integrity A 340B rebate model would materially undermine the integrity of the 340B program by shifting it away from a transparent, fully auditable, replenishment model into a retrospective, manufacturer-controlled, claims adjudication system. Todays 340B framework already includes audits and other accountability measures. Many covered entities, including Henry Ford Health, are good stewards of the program and have a proven track record of compliance. A rebate model would erode existing safeguards by requiring covered entities to transmit large volumes of patient-level pharmacy and medical claims data, including protected health information, to manufacturers or their intermediaries, creating new privacy risks, inconsistent data-handling practices, and opportunities for manufacturers to reinterpret eligibility after-the-fact. By replacing the current rules-based system with one dependent on manufacturer discretion, variable data standards, and non-transparent adjudication logic, the rebate model would weaken the reliability, accountability, and fairness that underpin the 340B program. A rebate-based model would not meaningfully reduce duplicate discount, diversion, or improper claims, as these issues are already tightly controlled under existing 340B compliance parameters and processes. Covered entities like Henry Ford Health maintain robust eligibility systems, multilayered audit trails, and established exclusion logic that prevent duplicate discounts and diversion long before a claim reaches a manufacturer. In fact, recent HRSA audits, including those conducted at Henry Ford Health, have consistently demonstrated that diversion and duplicate discounts are not widespread areas of noncompliance, confirming that the current model already protects program integrity. A rebate-based 12 model would simply shift control to manufacturers and require covered entities to transmit large volumes of protected health information and claims level data beyond what is needed to support program operations and compliance. A rebate model would not meaningfully improve audit compliance, transparency, or program integrity, instead, it would introduce new opacity by allowing manufacturers to retrospectively reinterpret eligibility, delay or deny payments, and deny valid claims. Any perceived transparency gains would accrue almost entirely to manufacturers, not to covered entities or patients, and would duplicate information already available through existing HRSA audits, state Medicaid carve-in declarations, and covered-entity exclusion logic. In practice, the rebate model serves primarily to give manufacturers access to far more data than is necessary to prevent duplicate discounts, without delivering corresponding value to covered entities or strengthening the 340B program. To strengthen the integrity of the 340B program, while minimizing administrative burden, Henry Ford Health recommends establishing standardized, nationally uniform data elements and reporting formats that all stakeholders: covered entities, manufacturers, switches, and vendors, must use. Data collection should prioritize the minimum necessary information to confirm eligibility and prevent duplicate discounts, rather than the expansive patient-level datasets manufacturers are increasingly requesting. HRSA could further reduce burden by creating a centralized, secure reporting portal, governed by HRSA, not manufacturers, which allows covered entities to submit required data once rather than through multiple manufacturer specific platforms. Finally, HRSA should periodically report aggregate manufacturer compliance metrics to reinforce accountability without exposing patient information. These improvements would enhance program oversight, reduce unnecessary administrative complexity, and preserve the operational integrity of the 340B Program. All of this can occur outside of the potential 340B rebate program. Additional Negative Impacts of a 340B Rebate Model Implementation Timeline Must Allow Sufficient Time to Comply HRSA intended to implement its initial 340B rebate model pilot program within an extremely short timelineless than six months notice between when HRSA first announced the 340B rebate model pilot program in August 2025 and the models start date in January 2026that did not provide sufficient time for the agency to fully consider the feedback it received from stakeholders in response to the notice, nor for covered entities to comply with the significant operational changes. Covered entities would have been given less than three months between when pharmaceutical manufacturer applications were approved and the pilot start date. Covered entities would have needed to wait for further instructions from drug manufacturers regarding new IT platforms, policies, and processes required, following approval of their rebate model applications, leaving a very short implementation window. If HRSA moves forward with another rebate pilot program, the agency must give covered entities sufficient time to comply. As discussed throughout this letter, in order to implement a rebate model, covered entities would have to invest in infrastructure and staff and training needed to support the operational changes and data submissions. 340B pharmacy operations are incredibly complexinvolving interconnected systems across stakeholdersincluding drug manufacturers, covered entities, payers, third party administrators, contract pharmacies, pharmacy benefit managers, patients, and more making it impossible to fully anticipate and plan for all of the potential intended or unintended 13 consequences that will result from a fundamental shift to a rebate model within a short time frame. Given the many complexities, if HRSA moves forward with the rebate pilot program, the agency must provide at least one years notice before a rebate model is effective, and provide clarification on the many operational challenges described above. A Pilot Program Could Set a Harmful Precedent for Future Rebate Model Expansion The original 340B rebate model pilot program did not specify an end date, but was intended to be implemented as a test for a minimum of one year. HRSA has indicated several times that it may consider expanding the rebate pilot to additional 340B drugs. Under the original pilot program, HRSA indicated that it planned to evaluate data and reports received from participating manufacturers on the effectiveness of the model, as well as feedback from covered entities and other stakeholders. HRSA did not, however, provide any criteria regarding how it planned to measure success. The RFI contains few further details related to HRSAs future plans for a pilot program, in terms of scope or evaluation criteria. We are concerned that without more specificity around HRSAs goals in implementing a pilot program and what it considers an effective model, a pilot would set a dangerous precedent for possible harmful expansion to additional drugs and/or pharmaceutical manufacturers in the future. We ask HRSA to more clearly state what it hopes a rebate model will achieve and the measures it will use to define success. A Rebate Model Could Impact Patient Access to Drugs Henry Ford Health anticipates that a potential 340B rebate model could have negative impacts on patient access to medications, particularly given the current landscape of manufacturer-imposed 340B restrictions that already limit the systems ability to fully realize program savings. Over the past several years, numerous drug manufacturers have implemented policies that restrict or eliminate 340B pricing when covered entities use contract pharmacies, require extensive claims-level data submission before honoring 340B discounts, or limit access to 340B pricing to a single designated contract pharmacy per covered entity. These restrictions have resulted in Henry Ford Health experiencing delayed or reduced access to eligible savings, including, in some cases, entire classes of prescriptions being disqualified from 340B pricing. As a large integrated health system that relies on a broad network of contract pharmacies to support medication access across diverse communities, these manufacturer limitations have already created operational barriers and increased out-of-pocket costs for patients who depend on affordable medications. Transitioning to a rebate-based model could compound these challenges if manufacturers apply similar restrictions to rebate eligibility, if claims-level data requirements become more burdensome, or if delays in rebate payments reduce the systems ability to reinvest savings into patient-facing programs. As a result, Henry Ford Health is concerned that without clear guardrails preventing manufacturer non-compliance or selective participation, a rebate model could further constrain access to discounted drugs for vulnerable populations and undermine the core intent of the 340B program. Conclusion Since the 340B program became law, it has always been available as an upfront discounted price. To date, this approach has worked well; audits overwhelmingly confirm this. Implementing a 340B rebate model does not solve any known problems but creates many potential problems for covered entities the safety net providers for whom the 340B program was created to support. 14 As detailed in this letter, the 340B rebate model would create significant operational challenges and severely disrupt the flow of 340B savings to safety net providers. The 340B rebate model would harm the ability of covered entities to invest 340B savings into the programs and specialized healthcare services they uniquely provide to vulnerable patients. The 340B rebate model would put decision-making authority in the hands of drug manufacturers rather than HRSA. Of most concern is our ability to continue to offer the same level of charitable programs and specialized services in our communities should a rebate model be put in place. Rather than implement this rebate model, we encourage HRSA to instead work with covered entities to protect the program. If, however, HRSA chooses to move forward with a rebate model, it must allow covered entities to comment on the specifics of its new program. While we have tried to provide the most detailed information possible, we are doing so without precise knowledge of which drugs would be included in a rebate program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). More information is needed on the specific features of the program to fully evaluate the impacts. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for Henry Ford Health and the patients and communities we serve. Sincerely, ____________________________ _____________________________ Jennifer Tryon Alexander Mansour Chief Pharmacy Officer 340B Compliance Officer Henry Ford Health Director, Financial Services, inventory, Audits & Contracts Ambulatory Pharmacy Services
HRSA-2026-0001-2106Adventist Health Lodi Memorial2026-04-20T04:00Z20,563 chars
Adventist Health Lodi Memorial [ADVENTISTHEALTH:INTERNAL] Adventist Health Lodi Memorial 975 Fairmont Avenue, Lodi, CA 95240 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Adventist Health Lodi Memorial, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Lodi Memorial has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program AdventistHealth.org [ADVENTISTHEALTH:INTERNAL] (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Lodi Memorial is a 194 bed Medicare DSH, safety-net hospital serving both residents and surrounding agricultural communities in Lodi, California. The Lodi community and surrounding residents rely on Adventist Health Lodi memorial for inpatient and outpatient care including services like maternity care and pediatric emergency care. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Lodi Memorial would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Lodi Memorial to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Lodi Memorial has invested in free immunizations and health clinics to underinsured and uninsured community members, as well as programs that educate individuals about chronic health conditions. For example, Diabetes Among Friends provides support groups and information about medication to the greater community. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Lodi Memorial to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program [ADVENTISTHEALTH:INTERNAL] Adventist Health Lodi Memorial has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Lodi memorial would be $7,667.65 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Lodi Memorial does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Lodi Memorial is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Lodi Memorial to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savingsfunctionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for [ADVENTISTHEALTH:INTERNAL] providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $151,457.54 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Lodi memorial. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $15,145.75 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Lodi memorial, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Lodi Memorial respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this [ADVENTISTHEALTH:INTERNAL] important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact [Name/Title/Email/Phone] if you have any questions or would like additional information. Sincerely, [Name] [Title] Adventist Health Lodi Memorial 975 Fairmont Avenue, Lodi, CA 95240 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Adventist Health Lodi Memorial, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Lodi Memorial has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Lodi Memorial is a 194 bed Medicare DSH, safety-net hospital serving both residents and surrounding agricultural communities in Lodi, California. The Lodi community and surrounding residents rely on Adventist Health Lodi memorial for inpatient and outpatient care including services like maternity care and pediatric emergency care. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Lodi Memorial would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits allow Adventist Health Lodi Memorial to provide medication at free or reduced cost for our patients. It also allows us to provide charity care to uninsured and underinsured patients. Because of the 340B program, Adventist Health Lodi Memorial has invested in free immunizations and health clinics to underinsured and uninsured community members, as well as programs that educate individuals about chronic health conditions. For example, Diabetes Among Friends provides support groups and information about medication to the greater community. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Lodi Memorial to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Lodi Memorial has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Lodi memorial would be $7,667.65 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Lodi Memorial does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Lodi Memorial is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Lodi Memorial to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savingsfunctionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $151,457.54 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. We have had discussions with the California Department of Health Care Services (DHCS) who have expressed the expectation to wait to submit Medicaid reimbursement claims until after the rebate status of a drug claim has been determined, leading to significant delays in claims submissions to Medicaid. This is not feasible for a high government payor hospital such as Adventist Health Lodi memorial. Due to the rebate model, the guidance from DHCS, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $15,145.75 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Lodi memorial, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Lodi Memorial respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact [Name/Title/Email/Phone] if you have any questions or would like additional information. Sincerely,
HRSA-2026-0001-2107Texas Hospital Association2026-04-20T04:00Z9,717 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, Once more, thank you for the opportunity to contribute via public comment to your organizations efforts to improve the 340B Drug Pricing Program. This letter, on behalf of the Texas Hospital Associations (THA) 460 member hospitals and health systems, including over 150 hospital 340B covered entities, seeks to provide input to HRSA on the anticipated negative impacts of the proposed 340B Rebate Model Pilot Program on Texas hospital covered entities and their patients. As explained below, any rebate mechanism would impose enormous costs and burdens on Texas hospitals that far outweigh any potential benefits. For three decades, the upfront discount model has performed well and expanded access to care for Texans and all Americans. With the proposed rebate model, funds currently dedicated to providing health care for rural, uninsured and otherwise vulnerable populations would instead be retained by pharmaceutical manufacturers, many of them based abroad. This change works against the goal of the program to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services, and undermines the agreements struck by the pharmaceutical manufacturers who would concede upfront discounts under the existing rules of the program in exchange for coverage of their drugs in the Medicaid and Medicare programs. Health care costs are increasing, and the number of uninsured/underinsured patients is expected to continue rising over the next several years. Rural hospitals struggle to keep their doors open, and theres growing financial pressure on every component of the health care industry. Despite the widespread impact of this strain, the pharmaceutical manufacturing industry is seeking relief from its voluntarily agreed-to obligations under the 340B program. Explosive growth in both pharmaceutical expenditures, as well as the increased use of high-cost pharmaceuticals purchased through specialty distribution channels, has led to significant growth in prescription drug spending not only in the 340B program, but in the entire prescription drug sector. The proposed pilot rebate program would fundamentally alter 340B program operations and reduce the programs ability to mitigate hospital cost growth not only for the low-income, uninsured and underinsured patients served by covered entities, but also for local, state and federal governments whose funds are used to serve them. Limited Justification for HRSA to Adopt a Rebate Model The proposed 340B Rebate Model Pilot Program strays from the traditional upfront discount model that has been in place for over 30 years. The upfront discount model succeeds because the program limits participation to eligible, qualifying entities and provides oversight from both manufacturers and HRSA to prevent improper utilization of the program. In this model, covered entities have immediate access to 340B savings and use these funds to advance the goals of the program. A rebate model would require covered entities to pay additional funds to manufacturers until a transaction is reconciled, reducing the monetary amount available to support patient care and services. Regardless of the time frame for returning rebate funds to covered entities, the rebate model would ensnare funds that the program intended for use in service of its community and require covered entities to reserve funds for the same purpose on an ongoing basis. These reserved funds would be unavailable for patient care, thereby reducing and permanently limiting the 340B programs potential impact. The application of the proposed pilot works against the programs stated purpose by unnecessarily preventing savings from reaching its intended recipients while allowing manufacturers to skirt part of its agreement to support Medicare and Medicaid providers. In prior letters regarding rebates in the 340B program, THA and the American Hospital Association noted that wholesale acquisition costs for some of the 340B drugs are more than 100 times the upfront, discounted price. Such drastic pricing spreads make it nearly impossible for covered entities to budget for the upfront expenditures required under a rebate program and/or to maintain the cash reserves to cover such significant sums while awaiting rebate payments. Avoid Strenuous Administrative Burden and Unfunded Mandate Covered entities are authorized to participate in the 340B Drug Pricing Program based on clear program qualifications. Each of these qualifications certifies that a covered entity is serving a population in need and using substantial public resources to do so. A rebate model would require additional verification beyond a covered entitys qualifications to participate in the program. This redundant rebate verification process would impose substantial costs on covered entities to ensure compliance with manufacturer rebate program requirements. Further, this verification would be done through a patchwork of manufacturer-led programs, each with its own process and standards. Compliance would require additional administrative resources, including funds, personnel and possibly third-party administrators, all of which divert resources from the populations the 340B program aims to benefit. This costly, burdensome and unfunded mandate would only increase the cost of health care in Texas, especially in rural areas. Hospitals would have to hire new staff and/or divert existing staff from patient care to accomplish compliance with the pilot program. The proposed pilot program does not require or mandate that the drug manufacturers bear financial responsibility for the rebate model the impact of this pilot benefits manufacturers over addressing the limited capabilities of Texas hospitals and the patients for whom they care. Involuntary Participation and Compliance with Bond Covenants As proposed by HRSA, the 340B Rebate Model Pilot Program is entirely voluntary for manufacturers yet mandatory for covered entities. Regardless of the anticipated revenue impact on covered entities, they would be obliged to subject their operation to any potential pitfalls of this proposed rebate model pilot program. THA proposes making the pilot program voluntary for both covered entities and manufacturers to improve fairness and efficiency and reduce operational confusion for concerned covered entities, while still allowing HRSA to assess the suitability of its novel approach to the 340B program. THA would also like to remind HRSA that many Texas hospitals participating in the 340B program, and presumably those nationwide, use tax-exempt bonds to finance new health care infrastructure. To secure underwriting for the transactions, many tax-exempt bond transactions require that hospitals agree to financial covenants, including the maintenance of a specific number of days cash on hand. Requiring these hospitals to drastically shift what it pays for 340B drugs could put the hospitals at risk of violating these types of covenants resulting in potentially devastating consequences such as credit rating downgrades, increased borrowing costs, delaying necessary infrastructure improvements and, at worst, closure. THA Strongly Urges HRSA to Cancel Plans for a Rebate Model Pilot Program For the reasons above, THA opposes a change from the current upfront discount model to a rebate model. We are particularly concerned that a rebate model invites manufacturers to hold covered entities funds while adjudicating, according to their own standards, whether the covered entity had maintained program fidelity. While we acknowledge manufacturers desires to increase profitability, the 340B program is a source of funds for covered entities to serve elevated numbers of uninsured or underinsured patients. The fact remains that a low percentage of Texas hospitals serve most of our neediest patients. A rebate model is not a viable solution to any perceived problems with the current 340B program. It merely shifts the financial burden of providing health care to these populations leaving manufacturers with a minimal burden while covered entities and local, state and federal funders manage the remaining weight. In summary, this rebate model proposal would increase covered entity costs through additional administrative requirements; tie up funds that 340B hospitals could otherwise use for patient care; and force them to participate in a manner that is not beneficial, harming their ability to stretch the public resources they rely upon. THA strongly urges HRSA to withdraw and cancel its implementation of the 340B Rebate Model Pilot Program. If, however, HRSA chooses to move forward with this effort, THA presses to allow Texas hospitals and other covered entities to comment on the specifics and structure of its new program. Permitting additional comments on the particular features implemented in the program would ensure important aspects are not overlooked. If CMS has any questions on how Texas patients benefit from the current 340B program and would care to discuss this topic further, please reach out to Matt Turner, Senior Director, Health Care Policy at mturner@tha.org. Best regards, John Hawkins President and CEO Texas Hospital Association
HRSA-2026-0001-2108University of Michigan HealthSparrow Ionia2026-04-20T04:00Z15,967 chars
See attached file(s). Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: University of Michigan HealthSparrow Ionia (UM HealthSparrow Ionia) appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect UM HealthSparrow Ionias experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments University of Michigan HealthSparrow Ionia is a LEEDcertified Critical Access Hospital (CAH) located in Ionia, Michigan, proudly serving Ionia County and the surrounding rural communities of Mid-Michigan. Opened in 2015 at 3565 South State Road and accredited by The Joint Commission, UM HealthSparrow Ionia houses 22 beds and provides a full complement of acute, primary, and specialty care services to the residents of Ionia County. The hospital is experiencing significant growth: the University of Michigan Board of Regents recently approved a $28 million expansion to add a 31,000-square-foot ambulatory clinic center, reflecting the increasing demand for services including primary care, imaging, oncology, orthopedics, and cardiology. Primary care practices affiliated with UM HealthSparrow Ionia in Ionia, Portland, and Saranac have earned Patient-Centered Medical Home designation from Blue Cross Blue Shield of Michigan. As part of the University of Michigan Health network, UM HealthSparrow Ionia connects rural Ionia County residents to the expertise of one of the nations top-ranked academic health systems. As a Critical Access Hospital and 340B-participating covered entity, UM HealthSparrow Ionia serves as a vital healthcare anchor for a rural community where access to affordable medications and specialty care is already limited. The 340B program is foundational to our ability to provide equitable access to care for uninsured and underinsured patients and to sustain essential services that would otherwise be unavailable close to home. During the most recent fiscal year, UM HealthSparrow Ionia processed 16,476 340B transactions (limited to ambulatory pharmacies), and currently invests approximately $280,000 annually in third-party administrators and compliance infrastructure. While the projected financial impact of the current MDPNP drugs under a rebate model is comparatively modest in dollar terms for Ionia, this narrow impact reflects only the drugs currently identified and not our level of concern. The structural risks of a rebate model, including erosion of upfront pricing certainty, manufacturer control, and the threat of program expansion, pose an existential risk to a small rural CAH like ours. UM HealthSparrow Ionia firmly opposes the proposed 340B Rebate Model Pilot Program. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on University of Michigan HealthSparrow Ionia. Under a rebate model, University of Michigan HealthSparrow Ionia would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $1,000 in additional cost, given that we typically hold a two-week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the currently listed MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. Beyond the inventory carrying cost, University of Michigan HealthSparrow Ionia anticipates approximately $70 per month in denied rebate claims under a rebate model, and absent appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would represent a permanent and recurring financial loss that diverts scarce resources away from direct patient care. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Ionia strongly disagrees with HRSAs assessment that these impacts would be minimal. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and expanded administrative staffing. These are not temporary transition costs; they are permanent structural burdens. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for University of Michigan HealthSparrow Ionia. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between purchase and rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning University of Michigan HealthSparrow Ionia would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the rebate structure as proposed. If rebate eligibility is conditioned on demonstrating patient administration or dispensing, no mechanism exists to eliminate the inherent gap between purchase and repayment. Preferable alternatives would include structuring the program as a consignment model, where covered entities are not charged at WAC until a drug is administered, or allowing the purchase to be made at the upfront 340B price but reclassified to WAC only if data is not submitted within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter our data management obligations in ways our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms, which requires the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that data required for rebate adjudication does not align with information stored in our current systems. Pharmacy claims are processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide the accurate, comprehensive, contemporaneous data that a rebate model would demand. Under a rebate model, we would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts, all of which would be ongoing and resource-intensive obligations. We strongly recommend that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. For pharmacy claims, required fields should be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. We further dispute the assertion that such a radical shift in data requirements is necessary for program integrity. A neutral, government-funded third-party data clearinghouse could effectively collect and share necessary data with relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured dispute resolution framework. University of Michigan HealthSparrow Ionia expects approximately 10% of submitted claims to be denied under a rebate model without appropriate guardrails, translating to an estimated $70 per month in unrecovered funds specific to MDPNP drugs. Our position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation must be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other non-statutory rationale. Any denial must be accompanied by specific, transparent documentation, including the date of the prior rebate payment and the identity of the recipient, so that University of Michigan HealthSparrow Ionia can validate and, where appropriate, dispute the denial. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent dispute resolution mechanism that is not manufacturer-controlled for resolving contested claims. Without these protections, covered entities will absorb losses without meaningful recourse. Program Integrity and Transparency University of Michigan HealthSparrow Ionia is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase, significantly complicating real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Manufacturers already receive extensive data on 340B purchases through the existing chargeback process and Drug Supply Chain Security Act transaction reporting. A rebate model does not provide manufacturers with new information; it merely gives them greater leverage over the disbursement of funds that covered entities have lawfully earned. University of Michigan Health Sparrow Ionia is committed to full compliance and transparency, as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations University of Michigan HealthSparrow Ionia respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, University of Michigan HealthSparrow Ionia urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity, to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a vital lifeline for University of Michigan HealthSparrow Ionia and the vulnerable patients we care for across Ionia County and the surrounding rural communities of Mid-Michigan for over thirty years. It enables us to expand access to essential therapies, sustain charity care programs, support community health initiatives, and serve all who come through our doors regardless of their ability to pay, and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing approximately $1,000 in inventory carrying costs and $70 per month in projected denied claims. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthSparrow Ionia urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services University of Michigan HealthSparrow Ionia HRSA 340B OPAIS Covered Entity ID: CAH231331-00 (SPARROW IONIA HOSPITAL) 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-2109Wellstar Health System2026-04-20T04:00Z17,064 chars
See attached April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: On behalf of Wellstar Health System, Inc., Marietta, Georgia, (specifically: Wellstar Cobb Medical Center, Wellstar MCG Health Medical Center, Wellstar Spalding Medical Center, Wellstar Sylvan Grove Medical Center, Wellstar West Georgia Medical Center, which participate in 340B as covered entities), we provide these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Wellstar strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Wellstar has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient careis built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguards could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for Wellstar and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that HRSA should explore before implementing a rebate model. Some state Medicaid agencies have developed retrospective, agency-led approaches to deduplication in which covered entities submit limited claims data directly to the state agency rather than to manufacturers, allowing the agency to exclude 340B claims from rebate requests without giving manufacturers direct access to covered entity data. We encourage HRSA and HHS to evaluate whether a similar government-led mechanism could address MDPNP nonduplication. Such an approach would achieve the same program integrity goal while keeping sensitive claims data out of manufacturers' hands and placing the administrative infrastructure where it belongs: at the agency level. Beyond the question of program integrity, it is important for HRSA to recognize that pharmaceutical companies interest in a rebate model is not solely motivated by deduplication concerns. Manufacturers want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that Wellstar expected would be available for that purpose due to 340Bs long history as an upfront discount program. Under the prior rebate pilot covering only 10 drugs, we estimated our five 340B hospitals would be required to front over $14 million annually to drug manufacturers. With 25 drugs now in scope, that figure grows to over $31.6 million per yearfunds that would otherwise support patient care, charity care programs, and community health initiatives across Georgia. This cash flow and liquidity strain would directly limit our ability to offer point-of-sale drug discounts to our most vulnerable patients and would force us to consider scaling back community-based and rural services that thousands of Georgians depend on. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Wellstar has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. Implementing a rebate model would impose substantial, recurring administrative costs on Wellstar's 340B program that cannot be absorbed by our existing team. In preparing for the now- paused 2025 Rebate Pilot, our 340B team of four staff, comprising one Director, one Manager, and two Coordinators, initiated building an entirely new data submission and reconciliation infrastructure spanning five covered entities, multiple dispensing sites, and five third-party vendors: MacroHelix, Verity, Epic (WAMB), Walgreens, and Wellpartner. Each vendor required a distinct submission pathway, validation process, and monitoring protocol, none of which exist under the current upfront discount model. Further, Epic (WAMB) required fully manual daily file extraction and upload to the Beacon platform, as no direct connection between Epic and Beacon exists. In addition, Walgreens, one of our largest contract pharmacy partners, was entirely unable to participate and its claims had to be carved out, a gap that would persist under any future rebate program. Based on this operational planning experience, we estimate that steady-state rebate administration would require approximately 15 additional staff hours per week across our 340B and finance teams on an ongoing basis. This estimate excludes one-time implementation costs and any time required to pursue denied rebates through HRSA's Administrative Dispute Resolution process, meaning the true burden is much higher. Sustaining this workload would require either hiring additional personnel or diverting our current team from their existing roles and responsibilities. These are not one-time costs; they are permanent, recurring obligations that grow with the scope of the program. In addition, under manufacturer maximum fair price (MFP) implementation plans currently in effect, when a manufacturer identifies a claim as 340B-eligible and withholds an MFP refund, covered entities must initiate a Good Faith Inquiry through the manufacturer's designated platform and submit additional claim-level data through 340B ESP to certify that the claim is not 340B- eligible. This process requires covered entity staff to monitor MFP refund determinations claim by claim, prepare and submit supporting documentation for each disputed determination, and track resolution through a manufacturer-controlled platform. Wellstar's 340B team of four staff managing nearly 2 million qualified claims annually does not currently have the capacity to perform this level of claim-by-claim review at scale alongside existing program obligations. A 340B rebate model would layer an identical data submission and dispute workflow on top of this existing burden, applying it across all payers and all uses of the 25 rebate drugs rather than only Medicare Part D claims. HRSA should not interpret covered entities' limited engagement with the Good Faith Inquiry process as evidence that the MDPNP deduplication process is functioning smoothly. In many cases, it reflects the practical reality that covered entities cannot sustain the monitoring and documentation burden the new process demands, let alone an expanded one. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. A rebate model would also create a significant burden for Wellstar under Georgia and South Carolina Medicaid programs. Under current 340B rules, Wellstar is required to bill Medicaid at the 340B acquisition cost for any 340B qualified claim. Under a rebate model, however, we would be purchasing the 25 rebate drugs at wholesale acquisition cost (WAC) and billing Medicaid at the 340B price while awaiting a rebate from the manufacturer representing the difference. If the rebate is paid as expected, Wellstar would then need to reconcile that payment against the corresponding Medicaid claim. If the rebate is denied, Wellstar faces an unrecoverable financial loss unless it either resubmits the Medicaid claim at the non-340B WAC price or initiates a formal dispute through HRSA's Administrative Dispute Resolution process. Each of these pathways requires additional staff time, legal review, and coordination with the state Medicaid agencies, none of which Wellstar currently incurs under the upfront discount model. This is a concrete source of financial risk and administrative burden that HRSA has not addressed in its RFI and that would fall entirely on covered entities like Wellstar. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include the reduction or elimination of programs that Wellstar has built over many years to serve uninsured, low-income, and underserved patients across Georgia. These programs exist because 340B savings are predictable and available upfront. A rebate model introduces financial uncertainty and administrative cost that would directly threaten their continuity. Wellstar's Patient Assistance Program provided essential medications to more than 4,300 uninsured and low-income patients in 2024, representing $178 million in community benefit. This program depends on the reliable availability of 340B savings to fund medication costs at the point of care. The cash flow disruption created by a rebate model, combined with the added administrative burden of tracking and reconciling rebate payments, would put this program directly at risk. Patients who rely on this program for medications to manage chronic conditions, reduce hospital readmissions, and maintain their health outside of acute care settings would bear the consequences of any reduction in funding. Wellstar also operates several community pharmacy programs that provide retail prescriptions to patients in need. These include the Dispensary of Hope program at Wellstar Cobb Medical Center, the West Georgia Community Service Outpatient Pharmacy at Wellstar West Georgia Medical Center, and the Walgreens Total Care Uninsured Program at Wellstar Spalding Medical Center. Together, these programs represent over $2.5 million in annual community impact. Each depends on 340B savings being available and accessible without the delay, uncertainty, and administrative cost that a rebate model would impose. Wellstar serves one out of six Georgians across 148 of the state's 159 counties, and is the top provider of charity care in Georgia. In 2024, Wellstar provided over $1.3 billion in charity care, unreimbursed care, and community programs. The 340B program is not incidental to this mission; it is foundational to it. Diverting resources to manufacturer-driven administrative requirements would not simply reduce savings in the abstract. It would reduce access and assistance to manufacturers patient assistance medication program to those patients in need, reduced access to pharmacy services in rural and underserved communities, and the potential scaling back or elimination of programs that thousands of Georgians depend on for access to care. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Susan Wright, Pharm.D., MBA, FGSHP Vice President Pharmacy Services Wellstar Health System, Inc., Marietta, Georgia
HRSA-2026-0001-2110Anonymous Anonymous2026-04-20T04:00Z4,260 chars
See attached file(s) HRSA RFI Response HRSA-Funded Health Center (Florida) Submitted on behalf of a HRSA-funded Community Health Center located in Florida Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a HRSA-funded health center serving a high proportion of Medicaid, uninsured, and underinsured patients in Florida, our organization relies on the 340B program to support comprehensive primary care, pharmacy services, chronic disease management, and behavioral health services. Using actual 2025 claims data, we modeled the projected impact of transitioning IRA-affected drugs from current 340B acquisition cost to a rebate-based WAC purchasing structure. Under the existing framework, these medications represent approximately $188,067 in annual acquisition cost. Under a rebate model, upfront purchasing requirements would increase to approximately $5.5 million. For a federally funded health center operating within structured grant budgets and fixed reimbursement rates, advancing this level of acquisition cost prior to reimbursement is a significant change in financial responsibility. Community health centers do not operate with large discretionary reserves. Drug purchasing is closely aligned with patient volume, Medicaid reimbursement, and federal grant allocations. Requiring health centers to temporarily absorb substantially higher costs introduces repayment timing uncertainty into routine operations. In addition to the financial component, a rebate structure requires ongoing tracking of eligible claims, monitoring of manufacturer repayment, reconciliation of variances, and management of any disputed amounts. These administrative responsibilities would need to be absorbed within existing staffing models. The 340B program has enabled health centers to reinvest savings directly into patient care and expanded access. Any change to the structure of that program should consider how increased upfront acquisition requirements align with the mission and funding model of HRSA-supported health centers. We appreciate HRSAs thoughtful evaluation of these impacts. HRSA RFI Response HRSA-Funded Health Center (Florida) Submitted on behalf of a HRSA-funded Community Health Center located in Florida Thank you for the opportunity to provide comments regarding the proposed 340B rebate model. As a HRSA-funded health center serving a high proportion of Medicaid, uninsured, and underinsured patients in Florida, our organization relies on the 340B program to support comprehensive primary care, pharmacy services, chronic disease management, and behavioral health services. Using actual 2025 claims data, we modeled the projected impact of transitioning IRA-affected drugs from current 340B acquisition cost to a rebate-based WAC purchasing structure. Under the existing framework, these medications represent approximately $188,067 in annual acquisition cost. Under a rebate model, upfront purchasing requirements would increase to approximately $5.5 million. For a federally funded health center operating within structured grant budgets and fixed reimbursement rates, advancing this level of acquisition cost prior to reimbursement is a significant change in financial responsibility. Community health centers do not operate with large discretionary reserves. Drug purchasing is closely aligned with patient volume, Medicaid reimbursement, and federal grant allocations. Requiring health centers to temporarily absorb substantially higher costs introduces repayment timing uncertainty into routine operations. In addition to the financial component, a rebate structure requires ongoing tracking of eligible claims, monitoring of manufacturer repayment, reconciliation of variances, and management of any disputed amounts. These administrative responsibilities would need to be absorbed within existing staffing models. The 340B program has enabled health centers to reinvest savings directly into patient care and expanded access. Any change to the structure of that program should consider how increased upfront acquisition requirements align with the mission and funding model of HRSA-supported health centers. We appreciate HRSAs thoughtful evaluation of these impacts.
HRSA-2026-0001-2111InterCare Community Health Network2026-04-20T04:00Z45,312 chars
Please see attached comment from InterCare Community Health Network. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of InterCare Community Health Network, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: InterCare Community Health Network anticipates a loss of $627,000, which is 16% of our annual budget, for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. InterCare Community Health Network is a community health center (CHC) that operates as a federally qualified health center in four counties in Southwest Michigan. InterCare Community Health Network has 10 locations across that area to provide medical, dental and mental health services. It is InterCares mission to improve the overall health of the communities we serve by providing comprehensive, patient-centered primary health care to individuals and groups who encounter potential barriers to care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us across the nation. For InterCare Community Health Network in particular, this means it will impact: Almost 38,000 patients who receive 82,456 340B prescriptions annually. Current admin costs for administering the 340B program at our center of $1,456,000. Staffing levels at our clinics would be reduced as these funds ensure additional clinicians are available to provide access to care for our patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: InterCare Community Health Network provided $4,835,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: InterCare Community Health Network anticipates needing 1.2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, InterCare Community Health Network anticipates an increase of $392,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 InterCare Community Health Network estimates an additional 1.2 FTEs would be hired to administer the program and an additional 0.1 FTE of leadership oversight would be needed to oversee the program which limits the ability to oversee expansions of other areas of the business impacting patient access. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. InterCare Community Health Network estimates an impact of $627,000 in additional expenses and lost revenues from the above items. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Forty-eight (48) hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. InterCare Community Health Network urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $76,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves almost 38,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $392,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. While InterCare Community health Network does not operate an in-house pharmacy at this time, we would like to consider opening an in-house pharmacy in the future. The proposed rebate model would add additional hurdles to whether InterCare Community Health Network would be able to provide in-house pharmacy services for the convenience of our patients. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 38 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 38 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the counties of Allegan, Berrien, Ottawa and Van Buren in the State of Michigan with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 During the initial implementation that was halted in late 2025, Walgreens Pharmacy, one of our largest community pharmacies, was not able to implement the rebate process as of the anticipated go-live date, and they indicated that they were uncertain as to the timing that they would ever be able to implement that process. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 health care services, including medications, based on a patients income and family size. We have implemented programs that allow patients to receive drugs at our cost plus a small dispensing fee. If the cost of the drug is increased to WAC at the time of dispensing (rather than the current 340B pricing), our patients will no longer have access to the 340B pricing for their medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,752,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,277,000 to purchase these same drugs at the 340B ceiling price. This represents a 37% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, InterCare Community Health Network anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our RN-led programs for pre-natal and womens health service referral coordination, as well as community health workers outreach program to ensure patient compliance with recommended treatment plans. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund 1.5 medical assistants to support care delivery to our patients. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 7,400 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. InterCare Community Health Network asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, InterCare Community Health Network estimates its 2027 Annual Rebate Opportunity Cost to be approximately $72,500. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. InterCare Community Health Network estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $40,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $7,000 annually. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on InterCare Community Health Network, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced 11 service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays InterCare Community Health Network urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $47,000. While this amount may not appear to be large compared to the Federal Budget, it represents the salary of a 1.0 Medical Assistant who helps our patients receive care. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 13 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion InterCare Community Health Network strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. InterCare Community Health Network believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 InterCare Community Health Network appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact John McElwee, Chief Financial Officer at jmcelwee@intercare.org. Sincerely, Velma Hendershott CEO InterCare Community Health Network
HRSA-2026-0001-2112Bristol Myers Squibb2026-04-20T04:00Z42,952 chars
See attached file(s) 1 April 20, 2026 VIA ELECTRONIC FILING REGULATIONS.GOV Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Bristol Myers Squibb Response to 340B Rebate Model Request for Information (HRSA-2026- 03042) I. Introduction Bristol Myers Squibb Company (BMS) appreciates the opportunity to comment on the Health Resources & Services Administrations (HRSAs) Request for Information (RFI) on the potential use of rebates to effectuate the ceiling price under the 340B Program.1 At BMS, we are inspired by a single vision transforming patients lives through science. Our talented employees come to work every day dedicated to the mission of discovering, developing, and delivering innovative medicines that help patients prevail over serious diseases. In oncology, hematology, immunology, cardiovascular disease, and neuroscience with one of the most diverse and promising pipelines in the industry - we focus on innovations that drive meaningful change. BMS appreciates HRSAs ongoing consideration of a 340B rebate model and welcomes the agencys efforts to address 340B Program abuse and the growing operational and compliance challenges created by overlapping federal drug pricing requirements. The current 340B framework presents a collection of fundamental and increasingly grave problems. Manufacturers are subject to several statutory obligations, including the obligation to offer the 340B ceiling price for purchase by covered entities, and to provide a method for preventing 340B and maximum fair price (MFP) duplicate discounts. Meanwhile, in exchange for the enormous benefit of accessing steeply discounted drugs, 340B covered 1 91 Fed. Reg. 7,287 (Feb. 17, 2026). 2 entities are subject to statutory obligations not to divert 340B-purchased drugs to non- patients and not to cause manufacturers to pay both a 340B discount and a Medicaid rebate on the same unit of drug. Unfortunately, many covered entities, along with pharmacies and other third-party intermediaries, have been engaging increasingly in practices that violate their statutory obligations. Meanwhile, manufacturers are not provided with the data necessary to understand the scope of 340B abuse or to operationalize compliance with their own obligations and monitor covered entity 340B Program compliance and are challenged aggressively whenever they seek even basic transparency. As a result, the existing system does not merely create administrative complexity; it also promotes ongoing and well- documented unlawful behavior and makes compliance with federal law operationally infeasible at scale. A rebate mechanism is therefore not simply an improvement to the current system, allowing for better transparency and oversight of increasing program abuse; it is also necessary to redress unchecked covered entity abuse and to operationalize compliance with statutory requirements. The challenges facing manufacturers are most acute in the context of the Medicare Drug Price Negotiation Program (DPNP). Congress has prohibited the application of both a 340B discount and a Maximum Fair Price (MFP) on the same unit of drug. However, the Centers for Medicare & Medicaid Services (CMS) has not established a a sufficiently standardized mechanism to operationalize that nonduplication requirement, instead requiring manufacturers to develop and maintain their own deduplication process. Yet, as noted, manufacturers do not possess the claims level data necessary to verify all overlapping transpactions with precision. This places manufacturers in a position to satisfy parallel statutory obligations without the information required to do so, creating ongoing compliance risk under both DPNP and the 340B Program. The challenges also extend beyond the DPNP. The absence of a rebate model makes it impossible to reliably prevent 340B duplicate discounts across federal programs, including the Medicaid Drug Rebate Program (MDRP), Medicare Part D inflation rebates, and, as noted, the DPNP. There is no other reliable mechanism to identify 340B-eligible claims.2 A rebate- based-approach is the only scalable and operationally viable mechanism to align these obligations by enabling claim-level validation prior to the realization of discounts, thereby avoiding duplicate discounts while preserving access to 340B pricing. And it is plainly contemplated by law. Covered entities have frequently asserted reliance on upfront discounts. That claim is not supported by current market practice. Many existing 340B arrangements already depend on replenishment and post-dispense inventory reconciliation processes under which the 340B 2 See, e.g., 42 U.S.C. 1320f-2(d)(1) (establishing 340B and MFP deduplication but not a deduplication process). 3 claim is identified and reconciled after dispensing rather than entirely at the point of sale. Those arrangements function, in substance, as rebate-like mechanisms. Moreover, the 340B status authorizes manufacturers to effectuate the ceiling price through either a rebate or a discount, reflecting congressional recognition that multiple operational models may be used to provide 340B pricing while safeguarding program integrity. In light of the foregoing, BMS urges HRSA to implement a 340B rebate model as a necessary mechanism to operationalize compliance with the 340B statute and related federal requirements. BMS believes that a rebate model should be available for all covered outpatient drugs, as was contemplated by the 340B statute well before the IRAs enactment. Alternatively, in light of HRSAs prior suggestions of limiting a rebate model to MFP products, BMS urges that HRSA approve 340B rebate implementation for all MFP products as early as is practicable and to all covered outpatient drugs, given that there is no distinction among products within the 340B statute. The following sections explain why a rebate model is necessary to address the aforementioned challenges and why existing approaches cannot do so. II. A 340B Rebate Model Is Necessary to Operationalize Compliance with Statutory Requirements A. Manufacturers need a rebate model to effectively deduplicate 340B discounts and prevent diversion. Beginning long before the IRAs enactment, manufacturers faced significant hurdles in redressing unlawful duplicate discounts.3 These challenges arise primarily from unchecked profit-seeking behavior, which has been taking advantage of a fundamental feature of the current 340B framework. Based on market practices beyond manufacturer control and neither mandated by statute nor reviewed or approved by a government entity, eligibility for 340B pricing has been claimed retrospectively, after dispensing, with covered entities and third parties using information that is not available to manufacturers. No party, whether the patient, who will likely never know what 340B is or how it applies to them, the covered entity, the pharmacy, or the manufacturer, has a complete, verifiable record in real time of whether an individual dispense qualifies for 340B pricing. And critically, covered entities and those who work on their behalf are the only parties with ultimate, definitive visibility into purported 340B eligibility at the claim level. Yet the current framework does not require that this information be shared with manufacturers in any fashion, let alone in any standardized or timely manner, and manufacturers have faced 3 See 340B Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GOVT ACCOUNTABILITY OFF. 32 (Jan. 2020). 4 astounding opposition in their reasonable efforts to obtain such information from covered entities. This data asymmetry creates a structural limitation that prevents manufacturers from verifying eligibility prior to providing the discount. That determination occurs retroactively, typically after a third-party administrator reconciles multiple data sources and identifies eligible claims. As a result, manufacturers are coerced into providing discounts without the ability to validate eligibility. This inevitably permits duplicate discounts and diversion. This constitutes not just an administrative inefficiency; it also presents a structural failure to support compliance with statutory requirements. The magnitude of the problem is astounding, with one study estimating $37.5 billion dollars in overlap between 340B and Medicare and projecting increases.4 The IRAs enactment and subsequent guidance compounded compliance risks and deduplication challenges. The IRA requires manufacturers to provide Medicare beneficiaries and the pharmacies and other dispensing entities that dispense drugs to those beneficiaries access to certain selected drugs at an MFP as mandated by CMS.5 At the same time, Congress expressly protected manufacturers from duplicate discounts, stipulating that manufacturers with products subject to both the MFPs and 340B pricing are not required to provide both the MFP and the 340B ceiling price for the same drug.6 In theory, this deduplication provision protects manufacturers from providing two distinct discounts on the same drug. In practice, however, preventing duplicate discounts has proven operationally infeasible. Absent a rebate model, manufacturers must provide 340B discounts to covered entities and their contract pharmacies on the front-end.7 But MFP effectuation is conducted differently. Because the IRA requires manufacturers to provide Medicare beneficiaries access to the MFP, manufacturers must provide dispensing entities access to that price for any claim filled for a Medicare patient.8 That can occur in one of two ways.9 First, the manufacturer can give prospective MFP access by selling at the MFP. Alternatively, the manufacturer can sell at the products typical acquisition cost and then reimburse the dispensing entity through a retroactive refund. Dispensing entities notify manufacturers of their MFP-eligible claims through the Medicare Transaction Facilitator (MTF), which receives all claims for MFP-eligible drugs dispensed to 4 Can 340B Modifiers Avoid Duplicate Discounts in the IRA?, IQVIA (Feb. 28, 2023). 5 42 U.S.C. 1320f-2(a). 6 See 42 U.S.C. 1320f-2(d). 7 See Letter from HRSA to Johnson & Johnson, HRSA (Sept. 27, 2024) (Health Resources and Services Administration (HRSA) made clear that the 340B statute requires Secretarial approval of any rebate mechanism... [I]f [Johnson & Johnson] process with implementing its rebate proposal without Secretarial approval, it will violate section 340B(a)(1) of the Public Health Service Act.). 8 42 U.S.C. 1320f-2(a)(3)(A). 9 See, e.g., IPAY 2028 Final Guidance at 218 (Sept. 30, 2025). 5 Medicare Part D enrollees and informs manufacturers of all eligible dispenses made at every dispensing entity. Manufacturers then may provide MFP refunds on valid claims directly through the MTF to dispensing entities that did not have prospective access to the MFP. Inclusion of a 340B claim indicator on the submitted claim is voluntary for the dispensing entity.10 This structure highlights the core problem: covered entities are the only parties with definitive visibility into 340B eligibility at the claim level, and yet there is no requirement that they provide that data to manufacturers in a consistent or timely manner. As a result, manufacturers are left to rely on inferential methods to attempt to identify when a covered entity is requesting an MFP refund on a 340B-purchased product. Amid these challenges, BMS has implemented a deduplication process, as outlined in our MFP effectuation plan provided to CMS, that seeks to meet highly complex and competing compliance obligations. However, while the process generally works reliabily so far as it goes a program level, it does not offer a practical or sufficiently precise mechanism to ensure accurate identification and prevention of duplicate discounts on a dispense-by-dispense basis and, in its current form, remains insufficient without a rebate model. Meanwhile, the current framework keeps BMS in an untenable position, exposing it to financially significant losses that are prohibited by law. B. A rebate model is necessary to restore 340B integrity. A rebate model would address the integrity limitations inherent in the current scheme. To the extent other data tracking mechanisms have been proposed or use, such as modifiers, clearinghouses or repositories, proxy or estimation methodologies, and audits, those approaches are insufficient to documented program abuse and compliance challenges. Experience shows such mechanisms are structurally incapable of preventing duplicate discounts or diversion at scale. Even where oversight exists, such as HRSAs audits, it is retrospective and limited in scope, confirming that current mechanisms do not enable real- time identification or prevention of duplicate discounts or diversion.11 Current mechanismsfail the test of providing real time identification and prevention of duplicate discounts and diversion. That is not to say that some current mechanisms or proposal are without value, but, on their own, they fail the test of providing real time identification and prevention of duplicate discounts and diversion. For instance, 340B modifiers can facilitate deduplication, but they are not fully reliable. Many dispensing entities claim they do not know the 340B status of a 10 See, e.g., id. at 220. 11 Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B, GOVT ACCOUNTABILITY OFF. (Dec. 2020). 6 dispense at the time a prescription is filled.12 Further, as CMS explained in IRA guidance, some stakeholders have noted that a point-of-sale modifier is incompatible with the virtual inventory system because dispensing entities may be unable to make the necessary determinations at the point-of-sale, therefore limiting submission of these codes in a timely manner.13 Another example of a mechanism that appears helpful in theory but is insufficient for deduplication purposes in practice is the recently finalized CMS clearinghouse plan for identifying 340B claims in the Medicare Part D Inflation Rebate Program.14 That system does not resolve the underlying data limitations that prevent claim level validation for duplicate discount prevention and raises similar integrity concerns to any voluntary claim submission mechanism. CMS also has not required universal submission of 340B claims data by all covered entities, leaving manufacturers without complete visibility into whether duplicate discounts have occurred. In the absence of mandatory, comprehensive claims level data submission by covered entities, a CMS-clearinghouse would fail to resolve the core deduplication problem and would instead replicate the same incomplete and inconsistent data environment that has undermined prior approaches. CMS also contemplates that covered entities will report data to the repository on a quarterly basis, with up to three months of lag.15 Such significantly delayed submissions will not facilitate the real time claims adjudication required to effectuate MFP. Finally, manufacturers cannot access the repository (which will be maintained by CMS) and thus cannot use the data to determine which claims are eligible for MFP refunds. Scrubbing methods pose similar challenges in properly identifying duplicate claims. Scrubbing, which involves examining data for errors or compliance issues, is fundamentally limited in the 340B context by incomplete data and thus necessary reliance on subjective assumptions regarding eligibility and dispense circumstances. Estimation methods are similarly hindered by incomplete data and cannot substitute for claim level validation. Manufacturers are required to assess eligibility on a claim-by-claim basis and cannot assume that all claims from a 340B covered entity are ineligible for an MFP refund.16 These approaches shift compliance risk and judgment to manufacturers without providing reliable claim level confirmation. In practice, these approaches increase administrative burden for all parties while failing to achieve their purpose. 12 See, e.g., IPAY 2027 Final Guidance at 59 (Oct. 2, 2024). 13 Id. 14 90 Fed. Reg. 49,266, 49,734-35 (Nov. 5, 2025). 15 Id. at 49,754. 16 See, e.g., IPAY 2028 Final Guidance at 254 (Sept. 30, 2025) (CMS also notes that a provider or prescriber ID alone... generally will not constitute sufficient evidence that a claim was 340B-eligible as not all individuals served by covered entities are necessarily eligible to receive a drug purchased at the 340B ceiling price.). 7 The 340B statute, absent application of its contemplated rebate approach, also does not offer sufficient protection. The law purports to allow manufacturers to pursue audits and file administrative dispute resolution (ADR) to police unlawful diversion and duplication by covered entities.17 But these methods are wholly insufficient on their own and the ability to validate 340B eligibility using claims level data. In practice, individual audits, assuming HRSA approval of those audits (which is often withheld for non-substantive reasons), and the pursuit of individual ADR claims, which cannot occur until completion of audits, does not and cannot address systemic abuses. The MFP dispute process similarly falls short, as it affords manufacturers no meaningful insight or recourse.18 Taken together, these findings, namely the absence of reliable claim level data, the purported challenges of point of sale identification, the voluntary and incomplete nature of data submission, and the retrospective and limited scope of oversight mechanisms, point to a clear conclusion: there are pervasive and costly program integrity challenges within the 340B Program, and current deduplication mechanisms are grossly inadequate to prevent diversion and duplication. Even prior to the implementation of MFPs, the 340B Program faced significant integrity challenges, including duplicate discounts with Medicaid rebates. A comprehensive rebate model would address these longstanding systemic issues by enabling claims-level validation before discounts are applied, rather than relying on incomplete or retrospective data. In doing so, it would replace the current reliance on fragmented, lagged, and administratively inefficient processes with a more targeted and reliable approach, enabling effective prevention of duplicate discounts and diversion. The creation of a rebate model could also address the increasing state-level variability affecting 340B transactions for MFP-eligible drugs. While manufacturers try to implement a consistent process to identify and reject duplicate claims by requiring covered entities and their contract pharmacies to submit claims on 340B-eligible dispenses, a number of states have sought to block these efforts. For example, Maine enacted a law that prohibits manufacturers from requiring covered entities to include any identification, billing modifier, attestation or other indication that a drug is a 340B drug in order to be processed or resubmitted unless it is required by the United States Department of Health and Human services, Centers for Medicare and Medicaid Services or the Department of Health and Human Services for the administration of the MaineCare program .19 Inconsistent state approaches, imposed on an inherently federal, disrupt manufacturers ability to implement uniform national compliance processes.20 As recognized by the Fourth Circuit in its holding that a similar law in West Virginia law is preempted by the federal 340B statute, the 340B Program is a federal spending-power 17 See 42 U.S.C. 256b(d)(3). 18 See IPAY 2028 Final Guidance at 332 (Sept. 30, 2025) (laying out the complaint and dispute process). 19 24-A M.R.S.A. 7753 20 PhRMA v. McCuskey, No. 25-1054, 19 (4th Cir. Mar. 31, 2026). 8 bargain between the federal government and manufacturers.21 The federal government in recent amicus briefs has agreed that state laws may contravene the Supremacy Clause by imposing additional burdens on a federal program and deterring manufacturer participation in Medicare and Medicaid.22 A federally established rebate model would provide a uniform mechanism for implementing 340B discounts for MFP-eligible drugs and would resolve the disparate state approaches to two federal programs, thereby facilitating compliance with federal law. A rebate model would provide a uniform and administrable framework for applying 340B pricing to MFP-eligible drugs. By tying discounts to validated claims data, it would better prevent duplicate discounts and diversion while replacing the current patchwork of retrospective, inconsistent, and inefficient mechanisms. In doing so, it would strengthen program integrity and facilitate compliance across all 340B participants. III. The Administrative Burdens and Associated Costs of a Rebate Model are Less Onerous Than Estimated by Covered Entities A. A rebate model would not require significant additional data collection and submission above what is already required. Covered entities have asserted that a rebate model would impose substantial administrative burden and associated compliance costs. However, Congress already contemplated that a rebate is a viable option for 340B pricing by adding it to the 340B statute. And, as recognized by the D.C. Circuit, the submission of claims data imposes only a minimal burden on covered entities.23 Any incremental steps associated with a rebate model largely reflect activities that covered entities already perform as part of routine 340B compliance, including claims tracking, inventory reconciliation, and audit preparation. A rebate model would standardize and streamline these existing processes rather than introduce a fundamentally new administrative framework. Some stakeholders have supported their argument by asserting that implementation would require significant additional staffing and resources. For example, the American Hospital Association stated that 340B hospitals would spend over $400 million to comply with the administrative obligations of a rebate model, mainly through increased staffing needs.24 However, these estimates do not reflect how a rebate model would be operationalized in practice. To facilitate implementation, BMS would leverage established third-party platforms operated by Berkely Research Group, including 340B ESP and the Beacon Platform, which is 21 Id. at 22. 22 See Brief For The United States As Amicus Curiae In Support of Appellants, AbbVie et al. v. Wesier, No. 25-1439, (10th Cir. Feb. 25, 2026). 23 Novartis Pharms. Corp. v. Johnson, 102 F.4th 452 (D.C. Cir. 2024). 24 Comment from American Hospital Association Re: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB No. 0906-0111 Extension (Sept. 30, 2025). 9 currently utilized by all nine manufacturers of drugs subject to MFPs for IPAY 2026. Covered entities are already familiar with these platforms, given their role in existing 340B and federal drug pricing program operations. As a result, leveraging this existing infrastructure would substantially reduce the need for new system development and mitigate concerns regarding IT burden and staffing requirements. More fundamentally, the asserted burdens are overstated because a 340B rebate model would rely on data that covered entities already collect in the ordinary course of 340B Program compliance. HRSA already expects covered entities to retain auditable records, including claims level data, that are sufficient to demonstrate compliance with statutory eligibility and diversion requirements,which would necessarily include claims level data.25 Covered entities already track, collect, and submit to comply with manufacturer programs to monitor contract pharmacy usage. As part of contract pharmacy claim submissions, covered entities are commonly expected to report data including date of service, date prescribed, National Drug Code (NDC), quantity, Rx number, service provider ID, and fill number.26 These data elements substantially overlap with the data that would be required to facilitate a rebate model. Accordingly, a rebate model would not introduce a new category of data collection but rather standardize the transmission and use of existing data for compliance purposes that covered entities already know how to collect and report. Consistent with this approach, BMS recommends that HRSA evaluate its allowed data elements to ensure each element serves an integral and necessary purpose in validating claims and, to the extent practicable, aligns with data already collected under existing covered entity procedures. Such data elements could include those used in the Pilot Program, as well as other elements such as patient out-of-pocket costs where necessary to support claim validation and program integrity objectives. In this way, a rebate model would require only marginal additional administrative effort and should not be expected to materially increase staffing needs or detract from patient-facing activities. Overall, the anticipated costs of meeting the administrative, data, and technological requirements necessary to participate in a Rebate Model are expected to be limited, manageable, and proportionate to existing compliance obligations for covered entities. B. The alternative suggestion of a claims repository does not reduce administrative burden relative to a rebate model. Assertions by covered entities regarding the administrative burden of the rebate model are undermined by the burdens that would be imposed under their proposed alternative: a claims 25 For example, HRSA addresses these requirements as part of its discussion of the preparation process for audits, available here: https://www.hrsa.gov/opa/program-requirements. 26 See, e.g., Frequently Asked Questions (FAQs), 340B ESP (last accessed Mar. 27, 2026) (listing data elements in response to What fields are collected as part of pharmacy claim submissions?). 10 repository.27 A claims repository, frequently cited by covered entities as a preferable alternative, would require the same underlying data collection and submission activities because it would require the same data without resolving the underlying timing and data validation limitations.28 Under such a system, covered entities would be required to submit the same claims data they already collect and maintain; the only difference would be that the data would be transmitted to a centralized repository rather than directly to manufacturers. For example, the voluntary claims repository finalized in the 2026 Physician Fee Schedule final rule (hereinafter, the 340B Repository) includes such data elements as date of service, prescription or service reference number, fill number, National Provider Identifier (NPI) of the dispensing pharmacy, NDC-11, and claim record indicator.29 These data fields are nearly indistinguishable from those that were proposed by HRSA as part of the Pilot Program.30 The two approaches are not functionally equivalent, however. A claims repository merely aggregates data after dispensing and does not, on its own, enable manufacturers to validate 340B eligibility prior to the application of discounts or the payment of rebates. As a result, it does not prevent duplicate discounts or support real-time compliance with statutory requirements. By contrast, a rebate model could use the same data elements to enable claim level validation tied to financial reconciliation, but would allow manufacturers to verify eligibility before a rebate is paid in order to prevent duplicate discounts. Accordingly, a claims repository does not reduce administrative burden relative to a rebate model and instead adds an additional layer of operational complexity without improving compliance or data reliability. C. Manufacturer costs associated with duplicate discounts far exceed any incremental costs to covered entities of implementing a rebate model. The financial harm imposed on manufacturers by duplicate discounts, which are both statutorily prohibited and operationally unavoidable under the current framework, significantly outweighs the costs associated with implementing a rebate model. BMS anticipates that a rebate model would diminish covered entities and contract pharmacies 27 See, e.g., Comment ID HRSA-2025-0001-0758: Comment from Front Line Hospital Alliance Re: HHS Docket No. HRSA-2025-14619 (Sept. 8, 2025) (supporting the establishment of a repository to which covered entities can submit data at the time of dispensing instead of creating another burdensome data collection and sharing mechanism.). 28 See id.; see also Comment ID HRSA-2025-0001-0770: Comment from Teaching Hospitals of Texas Re: HHS Docket No. HRSA-2025-14619 (90 FR 36163) (Sept. 8, 2025) (supporting as an alternative approach[] to the Pilot Program a claims data repository to support deduplication of 340B and MFP rebates.). 29 90 Fed. Reg. 49,266, 49935 (Nov. 5, 2025). 30 See 90 Fed. Reg. 38,165, 38,167 (Aug. 7, 2025) (limiting requested data elements to Date of Service, Date Prescribed, RX number, Fill Number, NDC-11, Quantity Dispensed, Prescriber ID, Service Provider ID, 340B ID, Rx Bank Identification Number, and Rx Processor Control Number). 11 reliance on the MFP complaint process by reducing variability in disputed denials and limiting manufacturers reliance on inferential eligibility tools. Under the current framework, manufacturers must rely on imperfect estimation methodologies to identify potential duplicate claims, which can lead to disputes and resource-intensive reconciliation processes. Covered entities may pursue good faith inquires or file complaints with CMS to challenge claims denials, but these processes are administratively burdensome and do not resolve the underlying data limitations. By enabling claim level validation prior to rebate payment, a rebate model would materially reduce good faith but erroneous denials, thereby improving administrative efficiency for both manufacturers and covered entities. Any incremental operational adjustments associated with a rebate model are limited in scope and consistent with existing claims infrastructure. Across the ten selected drugs with MFPs that went into effect on January 1, 2026, estimates indicate that the nine impacted manufacturers will lose $4 billion in duplicate discounts this year alone.31 Early indications demonstrate this projection has already started coming to fruition.32 These costs are not theoretical; they represent immediate and ongoing financial harm resulting from the absence of a workable deduplication mechanism. On balance, while a rebate model may require targeted operational adjustments by covered entities, those adjustments are limited in scope and consistent with existing claims infrastructure and are substantially outweighed by the resulting improvements in program integrity, reduced duplicate discounts, and greater alignment across federal pricing programs. D. A rebate model does not alter the ceiling price. Some covered entities have asserted that a rebate model would require them to float funds between the acquisition of a drug and receipt of a rebate, potentially creating cash flow pressures or affecting access to care. These concerns are not supported by the operational realities of how covered entities function under the 340B Program and broader reimbursement systems. As an initial matter, covered entities continue to receive reimbursement for dispensed drugs through existing payer channels, which covers the acquisition cost of the product. Covered entities also routinely finance drug acquisition through established working capital mechanisms, including lines of credit and standard payment terms with wholesalers. These arrangements are a standard and well-established part of covered entity and pharmacy operations and are designed to manage timing differences between acquisition costs and reimbursement. A rebate model does not introduce a new financing dynamic; it operates 31 Implications for Duplication with the 340B Channel, BRG (Oct. 2024). 32 See 40% of Claims Miss the Mark, 340B REPORT (Feb. 20, 2026). 12 within the same financial framework under which covered entities already manage inventory and cash flow. Any 340B rebate represents incremental revenue, not operating capital required to purchase inventory or provide care. A rebate model therefore changes the timing of revenue realization, not the ability of covered entities to finance drug purchases or sustain operations. Importantly, covered entities are not reliant on 340B savings to finance the acquisition of drugs or to sustain ongoing operations. Because reimbursement for dispensed drugs is received through existing payer channels, any 340B rebate reflects incremental revenue rather than a necessary source of liquidity. Moreover, the timing dynamics associated with a rebate model are not materially different from those that exist today. Under the current 340B framework, many covered entities utilize a replenishment or virtual inventory model, under which 340B pricing is realized only after a sufficient volume of prescriptions has been dispensed. In practice, this structure already delays the realization of 340B savings, as covered entities must first dispense product and then qualify for replenishment at the discounted price. Covered entities may also need to purchase additional inventory at wholesale acquisition cost (WAC) before receiving the full economic benefit of prior 340B utilization. A rebate model follows the same fundamental structure by tying the realization of 340B savings to actual utilization, and in some cases, may provide more precise and auditable reconciliation at the unit level. To the extent there is any interval between drug acquisition and rebate receipt; covered entities may incur short-term financing costs, typically limited to modest interest expenses associated with standard working capital or inventory financing practices. A recently released IQVIA study further demonstrates that any timing differences associated with a rebate model are economically negligible.33 Across a range of modeled scenarios, financing costs associated with a rebate-based approach are generally less than one-half of one percent of WAC and are no greater than those observed under existing replenishment models.34 In many cases, a rebate-based approach results in comparable or improved cash flow dynamics relative to current practices. The anticipated timing of rebate payments further limits impact. Under the prior Pilot Program, manufacturers would have been required to pay or deny rebates within ten days of receiving claims data. By comparison, covered entities typically have approximately 30-days top remit payment to wholesalers, and drugs are generally dispensed within a short period following acquisition. As a result, the interval between purchase and rebate receipt would be limited and operationally manageable within existing payment cycles. Ultimately, even if a rebate model introduces a limited shift in the timing of 340B savings, that effect is minimal when evaluated in context. A rebate-based approach provides the only 33 IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? (Dec. 2025). 34 Id. 13 scalable mechanism to enable claim level validation prior to the application of discounts, thereby preventing duplicate discounts and improving compliance with federal law. These program integrity benefits are substantial and cannot be achieved under the current framework. Any incremental timing differences are therefore outweighed by the need to ensure that the 340B Program operates in a manner consistent with statutory requirements and long-term sustainability. Above all, whatever effect a rebate does have in practice is an effect that Congress appears to have contemplated when providing the rebate mechanism expressly in the 340B statute, and HRSAs review should take into account that established permissibility when evaluating costs in context. IV. BMS Supports a Transparent and Predictable Dispute and Review Process As contemplated in both the Pilot Program and the current RFI, a rebate model should provide for timely and fair adjudication of rebate denials. The existing statutory and regulatory frameworks for disputes under the 340B Program (such as the ADR process) provide an established foundation, albeit insufficient, to mitigate operational uncertainty under a rebate model.35 BMS supports the establishment of clear, standardized procedures for reviewing and resolving disputes over rebate denials to ensure consistency, transparency, and predictability for all stakeholders. A rebate model should incorporate defined guardrails governing rebate denials, including clear parameters for when claims may be denied or subject to further review. BMS also supports the implementation of standard process elements that HRSA determines are necessary for rebate denials under a rebate model and timelines for review and reconsideration of denials.36 For example, a dispute review and resolution process for denied 340B rebates could include standardized denial reason codes and enumerated documentation and audit trail expectations, which would facilitate efficient identification, validation, and resolution of discrete claim level issues within defined timeframes. These elements can be complemented by escalation pathways where disputes remain unresolved, including through the statutes contemplated ADR mechanisms. BMS has already implemented a good faith inquires process for MFP effectuation and believes a similar, appropriately tailored approach could be applied in the context of a rebate model. The statutes contemplated ADR process remains available as a backstop to resolve disputes where necessary. Taken together, an efficient rebate denial and review process would provide a transparent, structured, and predictable framework for reducing operational uncertainty for both manufacturers and covered entities. Further, the safeguards provided by a rebate model, as well as the 340B statute and accompanying regulations, ensure that 35 See 42 C.F.R. Part 10. 36 Id. 14 covered entities retain meaningful avenues of recourse for improperly denied rebates. Rather than expanding disputes, a rebate model channels them into structured, auditable, and reviewable processes that promote consistency, accountability, and timely resolution. V. Data Collection for the Rebate Model Will Not Impose Any Additional Security or Privacy Risks BMS recognizes the legitimate need to maintain robust protections for all data transferred as part of a rebate model. Importantly, the data elements required to support a rebate model are not new and are already routinely collected, transmitted, and protected within the existing 340B ecosystem.37 Manufacturers and their technology partners have established and implemented security frameworks that are consistent with industry best practices for protecting sensitive healthcare data. This includes platforms such as Beacon, which utilizes a multi-layer security protocol that is consistent with industry standard security best practice.38 Moreover, covered entities have routinely submitted similar data to the 340B ESP Platform, also operated by BRG, without raising data privacy issues. Many covered entities submit data through the 340B ESP Platform in line with manufacturers contract pharmacy policies.39 The 340B ESP Platform employs security features to deidentify data elements that are protected under the Health Insurance Portability and Accountability Act (HIPAA) and protect claims data.40 For a rebate model, data collection can be appropriately limited to the minimum necessary information to effectuate rebates and enable effective deduplication of MFP, Medicaid, and Medicare Part D discounts and 340B rebates. Accordingly, a rebate model does not introduce new categories of sensitive data or novel data sharing practices, rather it relies on established data elements, existing transmission channels, and mature security frameworks that are already widely used across the 340B Program. VI. Conclusion BMS appreciates the opportunity to provide input and looks forward to continued engagement with HRSA regarding the evaluation and implementation of a rebate model. The current point of sale frameowkr does not provide manufacturers with sufficient visibility to prevent duplicate discounts or ensure compliance across overlapping federal pricing programs. A rebate model is therefore necessary to enable claims level validation, improve program integrity, and support effective administration of the 340B Program. BMS urges HRSA to implement a rebate model for IPAY 2026 drugs, extend that model to all drugs subject to an MFP in future years, and design the frameowkr to support broader adoption across the 340B Program. Establishing a consistent rebate framework would reduce 37 See Rebate Model Frequently Asked Questions, BEACON SUPPORT CENTER (last accessed Mar. 27, 2026). Importantly, data collected by 340B ESP do not include protected health information. See also Frequently Asked Questions: HIPAA and Privacy, 340B ESP (last accessed Mar. 27, 2026). 38 Rebate Model Frequently Asked Questions, BEACON SUPPORT CENTER (last accessed Mar. 27, 2026). 39 Frequently Asked Questions, 340B ESP (last accessed Mar. 27, 2026). 40 Id. 15 diversion and duplicate discount risk, improve transparency, and promote more predictable program operations. BMS therefore respectfully urges HRSA to move promptly to implement a rebate model.If you have any questions about these comments, please do not hesitate to contact Richard Meyers, Senior Director, Policy & Research, U.S. Policy & Research at richard.meyers@bms.com or William Knott, Vice President and Assistant General Counsel, Global Policy and Government Affairs at william.knott@bms.com. Sincerely, /s/ /s/ Richard Meyers William Knott Senior Director, Policy & Research Vice President and Assistant General Counsel U.S. Policy & Government Affairs Global Policy & Government Affairs
HRSA-2026-0001-2113Family Health Center Inc.2026-04-20T04:00Z46,411 chars
Family Health Center Inc. Kalamazoo Michigan. April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Family Health Center Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Family Health Center Inc (FHC) anticipates a loss of $1.1 million from entity-owned pharmacy operations and 25-40% profit margin for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For FHC in particular, this means it will impact: 2 Over 220,000 prescriptions administered to patients in need Over 35,000 health center patients $3.3 million in current 340B administration costs Community outreach programs including the annual, free Dental Day of Caring Social services for social determinates of health needs Behavioral health services Chronic disease management (Hypertension, Asthma, and Diabetes) Immunization programs Well child visits Cancer Screenings Patient accessibility hours of service resulting in increased wait times and delays in service. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Family Health Center Inc. provided $1.4 million in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Family Health Center Inc. anticipates needing 1.5-2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Family Health Center Inc. anticipates an increase of $125,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Family Health Center estimates needing between 1.5 and 2.0 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Family Health Center anticipates added labor costs of $150,000 to $175,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 20hrs/week will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Family Health Center Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. More than $50,000 in up-front costs will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 35,000+ patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at approximately $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Family Health Center has a robust pharmacy software but no integration with EPIC as this is just not feasible nor warranted. Neither EPIC nor our pharmacy system integrates with the software for this rebate program. In order to comply with all the systems needed for this rebate program we would have to manually upload files into those systems. This requires making custom reports to come out of each of our systems in order to comply with this rebate process. This will require customizing each system as well for claims management in order to tag the rebate medications appropriately for such reports for uploading. This is a manual process so as drugs are added, NDCs changed, new doses and vial/bottle sizes added, they will all have to be updated manually. This increases the chances for billing errors whenever you require a manual process so auditing will have to be a part of this new process as well. This will be an ongoing, laborious process which is currently automated to prevent errors. 340B pricing currently comes from the wholesaler to be uploaded into the pharmacy system. This now increases the chances for errors from that account from the wholesaler to the pharmacy system as those prices will change. We use the 340B account for ordering for our clinic administered medications so this will create a need to create a new process to the EPIC system in order to make the upload possible to get the 340B pricing through this rebate program. This is currently not developed and will be a significant challenge. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. This number is likely to surpass $35,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8-10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with five external pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across seven different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Kalamazoo County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 11 Internal NACHC survey data 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Family Health Center uses a sliding fee scale for those that are underinsured or not insured. There is a vetting and qualifying process for this program. This allows us to care for the most vulnerable in our service area and give them affordable medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ 2,073,500 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $ 154,900 to purchase these 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 same drugs at the 340B ceiling price. This represents a 1240% increase in upfront capital required for procurement for these 10 drugs. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Family Health Center Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations to rural / intercity school districts, our community outreach programs like Dental Day of Caring, which provides free dental care to all those that cant afford or access it, and Back to School Bash for preventative health care / immunizations / well child visits for intercity kids, giving them the essentials to go back to school with. Operating Hours: We anticipate needing to reduce our clinic evening and weekend hours, specifically impacting our working-class, agricultural, and intercity patients who cannot afford to seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. This will also impact our ability to maintain our staffing for RN Care Managers, transitions of care staff and even social workers that aid patients with housing, food and Medicaid redetermination. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,757 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Family Health Center Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Family Health Center Inc. estimates its 2027 Annual Rebate Opportunity Cost to be more than $400,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Family Health Center Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $ 1,918,600. This impact to upfront drug spend will be exacerbated in subsequent years by the addition of more drugs to the Rebate Program. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to incur additional financing costs. This is not a sustainable solution; the financing costs alone are estimated to be almost $110,000 annually - funds that are currently dedicated to Immunization programs as well as quality, safety and risk reduction programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Family Health Center Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Family Health Center Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of almost $400,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 13 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is 14 not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Family Health Center Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Family Health Center Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Family Health Center Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Eileen Chiang, Vice President and CFO. Sincerely, Denise Crawford, President and CEO Family Health Center Inc.
HRSA-2026-0001-2114The American Consumer Institute2026-04-20T04:00Z7,384 chars
See attached file(s) In The Matter of Request for Information: 340B Rebate Model Pilot Program Extension The American Consumer Institute is an independent 501(c)(3) education and research organization. Its mission is to identify, analyze, and protect the interests of consumers in selected legislative and rulemaking proceedings in information technology, health care, insurance, and other matters. We write regarding the 340B Rebate Model Pilot Program Extension. While rebates are a potentially helpful way to mitigate flaws in the 340B Drug Pricing Program, a stronger and more permanent approach would be to address these flaws head on. The 340B Drug Pricing Program was created in 1992 under the Veterans Health Care Act to serve a narrow, targeted purpose: allow safety-net providersprimarily those serving a disproportionate share of low-income and uninsured patientsto purchase outpatient drugs at steep discounts so they could stretch scarce federal resources and expand access to care. At the time, the program was relatively small and limited to a defined set of covered entities, such as disproportionate share hospitals. The implicit bargain was straightforward: manufacturers would provide discounts in exchange for access to Medicaid and Medicare markets, and providers would use the savings to subsidize care for vulnerable populations. 1 Over time, however, statutory changes, administrative decisions, and especially the growth of contract pharmacy arrangements have fundamentally altered how the program operates in practice. Guidance from Health Resources and Services Administration (HRSA) in 2010 allowed covered entities to contract with multiple external pharmacies, rather than a single in-house pharmacy, dramatically expanding the size of the program. The number of contract pharmacies grew dramatically nationwide, with a disproportionate concentration in higher-income urban and suburban markets where prescription volumeand therefore profit potentialis highest and patients have the least need of assistance. 2 3 4 Department of Health and Human Services Health Resources and Services Administration Rockville, MD 20852 1 PUBLIC COMMENT APRIL, 2026 Veterans Health Care Act of 1992, Public Law 102-585, Health Resources and Services Administration, last reviewed April 2017, https://www.hrsa.gov/opa/program-requirements/public-law-102-585. 1 Federal Register, vol. 75, no. 43, March 5, 2010, https://www.govinfo.gov/content/pkg/FR-2010-03-05/pdf/2010-4755.pdf. 2 340B Drug Pricing Program, National Pharmaceutical Council, accessed April 16, 2026, https://www.npcnow.org/topics/health- spending/340b-drug-pricing-program. 3 Mary Caffrey, As Court Action Heats Up, Study Shows More Money Made on 340B in Wealthy Areas, The American Journal of Managed Care, April 3, 2025, https://www.ajmc.com/view/as-court-action-heats-up-study-shows-more-money-made-on-340b-in- wealthy-areas. 4 This structural shift has weakened the connection between 340B discounts and the low-income and uninsured patients the program proports to help. Large, well-capitalized hospital systems have strong incentives to acquire physician practices and open outpatient clinics in affluent areas, then designate those sites as a 340B covered contract pharmacy. Prescriptions written in these settingsoften for well-insured, higher-income patientscan be filled using 340B discounts, with all or part of the discount retained by the hospital and pharmacy. Because the statute does not require that 340B covered entities pass discounts directly to patients, nor does it have reporting requirements on how covered entities use the savings, these prescriptions become a revenue stream rather than a targeted subsidy. Empirical analyses have found that 340B-eligible hospitals are more likely to expand into wealthier communities and oncology markets where margins are highest.5 Hospitals maximize the volume of high-reimbursement drugs dispensed under 340B pricing, while manufacturers face a growing share of sales subject to mandatory discounts, incentivizing them to increase list prices to preserve revenue. The result is cross-subsidization in which privately insured patients bear higher costs, while the program loses its focus on low-income patients. A program designed as a targeted safety-net subsidy has morphed into a broad, opaque transfer of wealth toward hospitals in higher-income urban areas rather than underserved rural or low-income communities. Refocusing the program on its original mission requires structuralnot incrementalreform. The HRSA has authority to redefine eligibility and program parameters, and it should use that authority to better align the program with the needs of low-income patients. Hospitals and contract pharmacy arrangements located in high-income ZIP codes or serving well-insured populations should either not qualify, or be subject to stricter eligibility thresholds, and should demonstrate the patients specific need for the program. This would limit the incentive to expand into affluent markets simply to capture 340B margins. At the same time, HRSA should broaden eligibility for providers that clearly serve vulnerable populations but are currently excluded. Rural emergency hospitals often operate on thin margins and serve lower- income and less insured populations, yet do not automatically qualify for 340B status. Extending eligibility to these facilities would better align program benefits with the patients Congress created to help. Similarly, simplifying qualification criteria for hospitals in low-income urban and rural areas make it easier for smaller providers to meet the programs requirements without the infrastructure of large hospital systems. 6 Transparency is the other critical improvement. Without reporting requirements, covered entities can claim discounts without demonstrating patient benefit. Requiring hospitals to document patient eligibility criteria, quantify the discounts received, and disclose how much savings hospitals and pharmacies pass through to patients (either as reduced cost-sharing or uncompensated care) would introduce accountability and enable policymakers to distinguish between genuine safety-net healthcare delivery and maximizing revenue. Additional reforms could include narrowing the definition of eligible prescriptions to only those directly associated with low-income or uninsured patients. 2 Robert Nordyke, James Motyka, and Julie Patterson, The Association of 340B Program Drug Margins with Covered Entity Characteristics, INQUIRY: The Journal of Health Care Organization, Provision, and Financing, March 23, 2025, https://journals.sagepub.com/doi/10.1177/00469580251324051?utm. 5 340B Exposed: New Study Shows Wealthy Hospitals Profit While Rural Patients Lose Out, Patients Rising, April 1, 2025, https://www.patientsrising.org/advocacy-updates/340b-new-study-wealthy-hospitals-profit. 6 Without changes, the program will continue to distort provider behavior, encourage expansion into wealthier markets, and contribute to upward pressure on drug prices, undermining both affordability and access for everybody, especially the very populations it was created to serve. Respectfully, Justin Leventhal Senior Policy Analyst The American Consumer Institute 4350 N. Fairfax Drive Suite 725 Arlington, VA 22203 Justin@TheAmericanConsumer.Org www.TheAmericanConsumer.org 3
HRSA-2026-0001-2115Michigan Medicine, University of Michigan2026-04-20T04:00Z18,331 chars
See attached file(s). Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Michigan Medicine, the academic medical center of the University of Michigan, appreciates the opportunity to submit comments in response to the Request for Information (RFI) issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect Michigan Medicines experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments Michigan Medicine is one of the nations premier academic medical centers, guided by a singular mission: to advance health to serve Michigan and the world. Our vision Our discoveries change care. Our care changes lives reflects a deep institutional commitment to patient care, medical education, and groundbreaking research. For 202526, University of Michigan Healths adult hospitals were ranked the #1 hospital in Michigan and among the nations top ten hospitals in three specialties, recognized nationally across more specialties than any other hospital in the state. As a public, non-profit academic medical center owned and operated by the University of Michigan, Michigan Medicine operates a flagship medical campus in Ann Arbor with over 1,000 licensed beds, including the 550-bed University Hospital, C.S. Mott Childrens Hospital, Von Voigtlander Womens Hospital, the Frankel Cardiovascular Center, and the University of Michigan Rogel Cancer Center. Michigan Medicine houses Level I adult and pediatric trauma centers, a Level I burn center, and the Michigan Congenital Heart Center, one of the largest of its kind in the country. Consistent with our mission, Michigan Medicine treats all who come to us regardless of their ability to pay, providing lifesaving organ transplants, complex cancer care, neurological care, cardiovascular care, and more to patients from across Michigan and beyond. As a 340B-participating covered entity, Michigan Medicine is a vital cornerstone of the healthcare safety net for the people of Michigan. The 340B program is foundational to Michigan Medicines ability to carry out its mission. Savings generated through the 340B program enable Michigan Medicine to provide free care to uninsured patients, offer free vaccines, support mental health and substance abuse programs such as the Michigan Opioid Prescribing Engagement Network (OPEN), fund community health initiatives, dispense prescriptions to patients in our M-Support program with just a $4 copay, and support Meals on Wheels services and food pantry programs in Ypsilanti and Ann Arbor. Without 340B savings, Michigan Medicine could not deliver high- quality healthcare to patients without health insurance, provide access to high-cost drug therapies, or sustain the numerous health improvement and prevention initiatives that benefit seniors, veterans, children, and underserved communities across the state. A shift to a rebate-based model would directly threaten Michigan Medicines capacity to continue these critical programs and services. Michigan Medicine firmly opposes the proposed 340B Rebate Model Pilot Program. During the most recent fiscal year, Michigan Medicine processed 470,580 340B transactions (limited to ambulatory pharmacies) underscoring the scale and operational complexity of our program. We currently invest $5.5 million to $6 million annually in third-party administrators and external consultants to ensure rigorous compliance with the upfront 340B discount model. Transitioning to a rebate-based structure would fundamentally destabilize this model and impose severe and unacceptable financial, operational, and administrative burdens on our institution, ultimately harming the patients and communities we serve. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on Michigan Medicine. Under a rebate model, Michigan Medicine would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $11.3 million in additional cost, given that we typically hold a two-week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the current list of MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. The financial strain does not end there. Michigan Medicine anticipates approximately $806,000 per month in denied rebate claims under a rebate model, in the absence of appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would not be isolated or temporary: they would represent a permanent and recurring financial hemorrhage that diverts scarce resources away from patient care. Additionally, Michigan Medicine would incur one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing full-time employee (FTE) support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. Michigan Medicine strongly disagrees with HRSAs assessment that these impacts would be minimal. These are not transitional costs, rather they are permanent burdens. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes. This is not a marginal adjustment; it is a wholesale restructuring of our 340B infrastructure that would require significant new investments in specialized software and expanded administrative staffing. As a state-owned institution, Michigan Medicine faces unique legal constraints that further complicate participation in a manufacturer-administered rebate model. Certain standard terms of use included in commercially operated platforms, such as provisions governing law or Freedom of Information Act (FOIA) obligations may conflict with Michigan Medicines legal obligations as a public university. The incremental costs of resources and systems required under a rebate model could, in certain circumstances, outweigh the benefit of participation in the 340B program entirely, placing Michigan Medicines safety-net mission at risk. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for Michigan Medicine. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between the date of purchase and the date of rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning that Michigan Medicine would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the current rebate structure as proposed. If rebate payment eligibility is conditioned on demonstration of patient administration or dispensing, there is no mechanism to eliminate the inherent gap between purchase and repayment. One alternative that could reduce this burden would be to structure the program similarly to a consignment model, in which Michigan Medicine is not charged at WAC until a drug is administered. Alternatively, the purchase could be made at the upfront 340B price but reclassified to WAC pricing only if the covered entity fails to submit data within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter Michigan Medicines data management obligations in ways that our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms demanding the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that the data required for rebate adjudication does not align with information stored in Michigan Medicines current systems. Pharmacy claims are typically processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide accurate, comprehensive, and contemporaneous data that a rebate model would demand. Under a rebate model, Michigan Medicine would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts all of which would be ongoing, resource-intensive obligations. Michigan Medicine strongly recommends that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. The resulting opacity creates confusion and undermines program transparency. For pharmacy claims, we recommend that required fields be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims, required fields should include: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. Michigan Medicine further disputes the assertion that such a radical shift in data requirements is necessary for program integrity or for addressing duplicate discount concerns arising from the Medicare Drug Price Negotiation Program. HRSA audit data consistently demonstrates high covered entity compliance. A neutral third-party data clearinghouse, funded by the government and not by manufacturers, could effectively collect and share necessary data with all relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured and enforceable dispute resolution framework. Michigan Medicine expects that approximately 10% of submitted claims would be denied under a rebate model without appropriate guardrails translating to an estimated $806,000 per month in unrecovered funds specific to MDPNP drugs alone. In a system where manufacturers unilaterally evaluate claims, the risk of inconsistent, self-serving, and improper denials is substantial. Michigan Medicines position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation should be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying rebate claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other rationale not expressly authorized by HRSA. Where a manufacturer believes an improper rebate payment has been made, the appropriate remedy is a separate formal process, such as a Good Faith Inquiry, not a unilateral denial that shifts the financial burden onto the covered entity. Any denial that does occur must be accompanied by specific, transparent documentation. This must include the date of the prior rebate payment and the identity of the recipient so that Michigan Medicine can validate and, where appropriate, dispute the denial. Without mandatory disclosure standards, covered entities will be left to absorb losses without any meaningful recourse. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent mechanism; not manufacturer-controlled for resolving contested claims. Program Integrity and Transparency Michigan Medicine is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase which would significantly complicate real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Michigan Medicine also emphasizes that manufacturers currently receive extensive data on 340B purchases through the existing chargeback process and the Drug Supply Chain Security Act transaction reporting requirements. A rebate model does not provide manufacturers with information they do not already possess; it merely gives them greater leverage and control over the disbursement of funds that covered entities have lawfully earned. Michigan Medicine is committed to full compliance and transparency as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations Michigan Medicine respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, Michigan Medicine urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing the specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism whether through HRSA itself or a government contractor to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a lifeline for Michigan Medicine and the vulnerable patients we care for across the state of Michigan for over thirty years. It has enabled us to expand access to high-cost therapies, sustain charity care programs, invest in mental health and community health initiatives, and serve all who come through our doors regardless of their ability to pay and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing an estimated $11.3 million in inventory carrying costs, $806,000 per month in projected denied claims, and hundreds of thousands of dollars in permanent new administrative expenditures all of which would drain resources directly from patient care. Michigan Medicine urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services Michigan Medicine, University of Michigan HRSA 340B OPAIS Covered Entity ID DSH230046 : (UNIVERSITY OF MICHIGAN HOSPITALS AND HEALTH CENTERS) 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-2116FMOL Health2026-04-20T04:00Z32,117 chars
On behalf of FMOL Health, we are pleased to submit the attached comments regarding HHS Docket No. HRSA-2026-03042. FMOL Health appreciates the opportunity to respond to the Health Resources and Services Administrations Request for Information regarding the 340B Drug Pricing Program. As a large, mission-driven health system serving communities across Louisiana, the 340B program plays a critical role in our ability to expand access to care, sustain essential services, and reinvest resources into patient programs that would otherwise be financially challenging to maintain. In a state with significant rural populations and persistent health disparities, 340B enables us to meet patients where they aresupporting everything from outpatient services to care coordination and access to medications. We welcome the opportunity to share our experience and highlight the programs importance to the patients and communities we serve. Re: HHS Docket No. HRSA-2026-03042 Dear Health Resources and Services Administration, FMOL Health appreciates the opportunity to respond to the Health Resources and Services Administrations Request for Information regarding the 340B Drug Pricing Program. As a large, faith-based and mission-driven health system serving communities across Louisiana, the 340B program plays a vital role in our ability to expand access to care, sustain essential services for those most in need, and reinvest resources into patient programs that would otherwise be too financially challenging to maintain. In a state with significant rural populations and persistent health disparities, 340B enables us to meet patients where they are, supporting everything from outpatient services to care coordination and access to low-cost medications. We welcome the opportunity to share our experience, significant costs associated with maintaining the program, and highlight the programs importance to the patients and communities we serve. 1. Costs to Covered Entities A. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. FMOL Healths administrative costs associated with 340B operations and compliance are substantial and increasing, driven by a mix of third-party expenses and internal resource requirements. On the external side, we incur ongoing costs for our third-party administrator (TPA) as well as contract pharmacy dispensing fees. These are necessary to support program administration but represent a consistent and growing expense. Internally, we maintain a dedicated 340B analytics and compliance function. This team is responsible for monthly internal audits, financial tracking, and direct follow-up with covered entities to resolve discrepancies and ensure compliance. A significant portion of this work involves managing data submissions and monitoring accuracy within ESP and Beacon. In practice, data discrepancies within these systems have required intensive staS intervention and, in some cases, have resulted in temporary disruptions to our 340B access. We also rely heavily on internal support from IT, billing, and revenue cycle teams to meet increasingly complex data submission requirements. In addition, we invest in external auditors and multiple analytics and software platforms to validate data and support compliance efforts. Finally, it is important to note that compliance requirements, particularly around data submission, have required ongoing changes to operational workflows. These changes create additional administrative burden that is not always captured as a discrete line item but materially impacts staff time and system resources. iii. Identify any key cost drivers ( e.g., staIing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. The primary drivers of our current administrative costs are staSing, IT infrastructure, and required compliance systems. From a staffing standpoint, we are currently dedicating approximately 11.5 FTEs to support 340B-related data submission and compliance activities. At the system level, this includes roughly 3 FTEs (about 120 hours per week) focused on data submission, validation, troubleshooting, and follow-up. Each covered entity also requires between 0.5 and 1 FTE, totaling approximately 3.5 FTEs across the system. In addition, we utilize 1 FTE within the billing department to support submission requirements, 3 FTEs for system-level IT support, and 1 FTE dedicated to retail pharmacy compliance and operations. Beyond staffing, technology is a significant cost driver. We maintain audit and compliance software platforms that require ongoing licensing, along with other analytics and submission-related tools. These systems are necessary to meet evolving reporting requirements and to validate data accuracy prior to submission. We also incur hardware- related costs to support these systems and ensure reliability, particularly given the volume and sensitivity of the data involved. Together, the combination of labor-intensive processes and technology requirements represents the bulk of our administrative cost structure for 340B compliance. B. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one- time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. Under a 340B Model Rebate Pilot Program, FMOL Health anticipates a significant incremental financial and operational impact, estimated at approximately $15 million annually when accounting for both administrative burden and cash flow implications. From an administrative standpoint, implementation of a rebate model would require additional staffing and system buildout. We estimate the need for approximately 1.5 additional FTEs, including 1 FTE at the system level and approximately 0.5 FTE distributed across facilities to manage increased data submission, validation, and reconciliation requirements. One-time startup costs would include approximately 160 hours to establish data submission processes and an additional 120 hours to implement data monitoring and validation workflows. We also anticipate additional charges from our third-party administrator (TPA), though those costs are not yet fully defined. Ongoing administrative costs would be substantial and labor-intensive. Weekly data submission activities are estimated at approximately 5 hours, while data monitoring including payment matching, discrepancy identification, and follow-upis expected to require approximately 80 hours per week. TPA-related expenses are also expected to increase on a recurring basis as the complexity of rebate processing grows. Operationally, the most significant impact is related to cash flow. Under a rebate model, FMOL Health would be required to purchase drugs at higher upfront, non-340B prices, creating a material cash burden. Importantly, full rebate recovery is not guaranteed. Based on current experience with 340B ESP and Beacon systems, rebate denials frequently occur due to inaccurate data matching and eligibility determinations. For example, ESP has incorrectly classified covered entity purchases as contract pharmacy transactions, while Beacon has denied rebates by inaccurately attributing prescriptions to non-340B eligible pharmacies and flagging them as duplicate discounts. These discrepancies are typically identified only through internal audits, requiring additional staff time to investigate and formally dispute through ESP and Beacon review processes. During these review periods, the covered entity remains financially responsible for the higher, non-340B acquisition cost in order to comply with wholesaler payment terms. While manufacturers have indicated that rebates would be processed prior to invoice deadlines, this has not aligned with our operational experience to date, further exacerbating cash flow risk. Taken together, the combination of increased administrative workload, additional staffing, system costs, and material cash flow exposure underscores the significant burden a rebate-based model would impose on our organization. ii. Describe the methodology and assumptions used to develop these estimates. The estimates provided are based on a combination of internal operational experience, historical staffing data, and observed impacts from prior 340B program changes. For administrative costs, one-time setup estimates were developed by evaluating the staff time required during the initial implementation of the current rebate model framework. This includes time spent building data submission processes, establishing validation protocols, and coordinating across departments. Recurring administrative costs were calculated using historical time tracking associated with ongoing data submission, discrepancy resolution, and follow-up activities under existing 340B compliance requirements. These figures reflect actual staff effort currently required to maintain accuracy and compliance in a complex and evolving reporting environment. Operational cost assumptions are primarily driven by cash flow impacts. Estimates are based on current drug purchasing volumes, modeled as if acquisitions were made at non- 340B pricing. This approach reflects the expected shift under a rebate model, where upfront purchasing costs increase and reimbursement is delayed and uncertain. It is also important to note that each modification to the 340B programwhether through new requirements or changes to existing processesnecessitates corresponding operational adjustments. These adjustments require additional staff time, system updates, and workflow changes, all of which contribute to increased administrative and operational costs beyond those captured in baseline estimates. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The incremental costs associated with a 340B rebate model would span multiple operational and administrative functions, many of which are already resource-intensive under the current upfront discount structure. Importantly, each change to the 340B program, whether implementing new requirements, modifying existing processes, or pausing prior workflows, introduces additional cost and complexity across the organization. These incremental costs would primarily support expanded activities in claims processing, including the identification and tracking of eligible transactions and the coordination of rebate requests. Data submission requirements would increase in both volume and complexity, requiring additional staff time to ensure accuracy, timeliness, and alignment with external systems. Reconciliation functions would become significantly more burdensome, as staff would be required to match rebate payments to original transactions, investigate discrepancies, and pursue resolution through third-party platforms and manufacturers. Audit support would also have to expand, both internally and externally, to validate compliance and defend against inaccuracies in rebate determinations. In parallel, IT and software support functions would be required to build, maintain, and continuously update systems capable of handling new data flows, integrations, and reporting requirements. These changes would necessitate additional staffing support across departments, including pharmacy operations, billing, revenue cycle, and compliance. With respect to the impact on current administrative costs, transitioning some drugs to a rebate model would not reduce existing costs associated with the upfront 340B discount. Instead, it would create a dual-track system in which both discount and rebate processes must be managed simultaneously. This would increase overall administrative burden, requiring parallel workflows, additional validation steps, and greater coordination across internal teams and external partners. As a result, administrative costs would increase rather than shift, further compounding the operational strain on covered entities. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the additional administrative and operational burden it creates, the most practical approach would be direct reimbursement to covered entities for the incremental costs incurred. To be effective, any reimbursement mechanism would need to be structured around clearly defined, standardized cost categoriessuch as labor (FTEs and hours), technology (licensing, system upgrades), third-party vendor fees, and financing/carrying costs tied to delayed rebates. However, accurately quantifying and validating these offsets presents its own challenges. It would likely require ongoing documentation, detailed cost tracking, and potentially additional audit and reporting requirements to substantiate reimbursement claims. In practice, this introduces a risk of further administrative burden and expense, partially offsetting the intended relief. As such, while reimbursement is conceptually the most feasible solution, it must be designed in a way that minimizes additional reporting complexity and avoids creating a secondary layer of compliance costs for covered entities. It must also account for the cash burden incurred by purchasing drugs at higher upfront, non-340B prices. v. Comment on the impact of these incremental costs under your current operations. The incremental costs associated with a rebate-based model would have a direct and adverse impact on our current health system operations. Most significantly, increased administrative and operational expenses would reduce the net savings generated through the 340B program. These savings are currently reinvested into patient care programs, including access to medications, care coordination, and services for underserved populations. A decline in available 340B resources would therefore translate into a reduction in the scope and sustainability of these programs. In addition, the added complexity of data submission, monitoring, and compliance would require additional staffing. We anticipate the need for incremental FTEs to manage increased oversight, reconciliation, and reporting requirements, further driving up administrative costs. Finally, the shift to a rebate model would create meaningful disruption to cash flow. Purchasing drugs at higher upfront, non-340B prices (combined with delays and uncertainties in rebate recovery) would strain financial operations and limit flexibility in resource allocation. These combined factors would materially impact our ability to maintain current service levels and continue investing in patient-focused initiatives. C. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional full-time employees and potentially reallocating existing clinical staff time. Based on our current analysis, we estimate the need for approximately 1.5 additional FTEs specifically to support rebate-related administrative functions. This includes 1 system-level FTE dedicated to managing data submission, validation, reconciliation, and issue resolution, as well as approximately 0.5 FTE distributed across covered entities to support local oversight, coordination, and compliance activities. These roles are incremental and would be necessary to manage the increased complexity associated with rebate processing, data monitoring, and discrepancy follow-up. Importantly, the new requirements and administrative burdens cannot be absorbed solely by existing medical providers without negatively impacting patient care. However, we cannot rule out having to reallocate existing clinical staff time toward administrative functions. More broadly, the shift to a rebate model will increase demands on our existing support teams, including IT, billing, revenue cycle, and compliance, further reinforcing the need for dedicated additional personnel. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. See 1. b. i. for a detailed FTE breakdown. D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B rebate model would require updates to both our current systems and overall IT infrastructure. Our audit and compliance software would need to be reworked to handle rebate-related functions like tracking submissions, matching payments, and resolving discrepancies. These systems were built for the upfront discount model and are not designed for this level of ongoing reconciliation. We would also need upgrades to hardware and software to manage the increased data volume and more frequent data exchanges. This would require continued IT support to maintain performance and keep up with changing requirements, making it a meaningful ongoing investment. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. We estimate total system-related costs to fall between $500,000 and $1 million. This includes upgrades to existing software, development and configuration of data warehouse capabilities, and necessary hardware improvements to support increased data demands. A portion of these costs would be one-time, primarily tied to system development, procurement, and initial setup. However, we would also expect ongoing, recurring costs related to system maintenance, software licensing, and additional resources needed to support and manage the expanded infrastructure. E. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services oIered, and specify whether these costs are one-time or recurring. We estimate approximately $200,000 in additional costs not otherwise captured above. Of this, roughly $50,000 would be one-time expenses related to initial legal review, training, and implementation support. The remaining $150,000 would be recurring, driven by ongoing consulting needs, continued staff training, and compliance-related activities required to sustain operations under a rebate model. Beyond these discrete costs, there is a broader and more significant concern regarding the downstream impact on patient care. As administrative burden and financial uncertainty increaseparticularly with delayed or denied rebates340B savings are at risk of erosion. Those savings are currently used to fund critical patient services, and any sustained reduction could force difficult decisions around scaling back programs. Compounding this is the uncertainty inherent in a rebate model, including variability in rebate timing, accuracy, and recoverability. Taken together, this creates a level of financial unpredictability that makes it challenging to plan, invest, and maintain services at current levels. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A rebate model will put real pressure on patient access to medications. Instead of buying drugs at the 340B price upfront, we would have to purchase them at a higher cost and wait for reimbursement that isnt always guaranteed. This puts the program at risk and will lead to covered entities in rural areas potentially withdrawing from the program. To keep offering medications at reduced prices, we would be taking on financial risk, essentially dispensing drugs below what we paid for them. Thats not sustainable long term. As those pressures build, it could mean fewer discounted medications, tighter eligibility, or delays in getting patients what they need, especially for those who are uninsured or underserved. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities A. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing would have a direct impact on our cash flow. While a ten-day turnaround may seem reasonable, our experience with current vendors340B ESP and Beaconhas not reflected that level of consistency. We routinely see delays tied to misidentified 340B claims and data discrepancies, which slow down rebate processing. We expect those same issues to carry over under a rebate model. In the meantime, wholesalers still require payment on standard terms, regardless of whether a rebate has been received. That gap creates ongoing cash flow pressure and introduces financial risk, particularly when delays or denials occur. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Yesmore specific guardrails are necessary. In practice, we have seen manufacturers deny or withhold rebates based on inaccurate determinations of 340B eligibility. Under the current MFP rebate model, manufacturers are not permitted to deny payment due to suspected duplicate discounts, yet we have still encountered situations where rebates were withheld on that basis. In several cases, claims were flagged as 340B when they were actually dispensed through pharmacies that are not 340B eligible under manufacturer restrictions in 340B ESP. These denials were therefore not appropriate. Without clear, enforceable guardrails, these types of errors are likely to continue. At a minimum, any rebate model should strictly limit denial reasons, require timely payment unless a clearly defined exception applies, and mandate that manufacturers provide detailed rationale and supporting documentation for any denial. There should also be a standardized and timely dispute resolution process to address inaccuracies. Without these protections, covered entities will continue to face inappropriate denials and unnecessary financial risk. 4. Data Collection by Covered Entities A. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. We pull 340B data from a mix of internal and external sources. Internally, that includes our EMR and wholesaler purchase records. For contract pharmacies, we rely on our TPA, Verity Solutions, to provide dispensing and claims data. We also use external sources like 340B OPAIS, Centers for Medicare & Medicaid Services, and Apexus to support compliance and validation. All of this data is pulled together and maintained in our internal systems, with ongoing checks to make sure everything lines up and meets program requirements. B. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). Internal monthly audits are performed along with an external yearly audit. C. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. Ongoing data collection, like tracking what was submitted and issued for rebates, will be essential. As the program continues, more information will likely need to be collected, but the specifics of that additional data are not yet known. 5. Manufacturer EIorts to Avoid Duplicate Discounts A. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, we maintained multiple controls to prevent duplicate discounts between 340B and Medicaid rebates. For mixed-use areas within the hospital, we performed monthly audits of claims to ensure the correct use of modifiers, along with an annual external audit to validate compliance. On the retail side, contract pharmacies were not permitted to dispense 340B drugs for Medicaid patients, while our in-house pharmacies remained eligible under applicable rules. We also routinely reviewed BIN, PCN, and Group combinations against published Medicaid plans for each state to ensure proper identification of Medicaid claims. Appropriate modifiers were applied to both retail and pharmacy claims as required. In addition, we implemented a 100% audit of claims to further ensure accuracy and compliance. B. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record- maintenance practices. Since January 1, 2026, we have implemented several interim steps while continuing to evaluate longer-term process changes. We are currently reviewing all claims identified in CMS MTF reports and conducting additional internal validation. As part of this process, staff must access Beacons system and manually indicate whether a drug was or was not dispensed as 340B, which has added a significant administrative burden. We have not yet received finalized results from Beacon on these submissions. In the meantime, we have initiated good faith inquiries on claims that were denied due to being incorrectly identified as 340B. In working through these issues, Beacon has indicated that it may be matching wholesaler invoice-level purchases to retail claims; however, in several instances, the invoices requested do not align with the pharmacy where the prescription was actually filled. Overall, these changes have required more manual review, additional documentation, and increased staff time, while processes and system expectations continue to evolve. D. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). We have encountered ongoing challenges reconciling data across systems when identifying potential duplicate discounts. Different sources use different identifiers. For example, one system may reference a patient by MRN, while another uses a claim or transaction number. Currently, duplicate discount inquiries from Kalderos and Beacon are tracked by ICN, but our EMR does not use that same identifier. As a result, there is no direct way to tie those inquiries back to a specific patient or encounter without additional manual work. This mismatch creates delays, increases the risk of error, and requires significant staff time to reconcile information across systems. E. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Duplicate discount identification involves both claim modifiers and listing on the MEF. Including the prescription number, fill number, and pharmacy NPI allows Medicaid and Medicare to determine whether a claim was processed under the 340B program. This process should also apply to the rebate program. 6. Required Reporting A. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Manufacturers should be required to submit regular, standardized reporting to support oversight and ensure accountability under a rebate model. At a minimum, this should include weekly reporting on total claims received, claims approved and denied, total rebate amounts paid, and average time to payment. Manufacturers should also report on the number of challenges or disputes raised by covered entities, along with the outcomes of those challenges (e.g., upheld, overturned, pending). This level of consistent, frequent reporting would give HRSA better visibility into payment timeliness, denial patterns, and overall program performance. C. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? 2 years minimum. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A. Explain whether and how a potential 340B Rebate Model Pilot Program would aIect the integrity of the 340B program. A rebate model would introduce new operational challenges and financial risk without meaningfully improving program integrity. By shifting payment to a post-dispense rebate, the model places the burden of recoupment on covered entities. This creates cash flow disruptions and uncertainty, which can delay purchasing decisions and, in turn, impact timely access to medications for patients. At the same time, covered entities are already subject to extensive oversight. This includes HRSA audits, internal self-audits, and annual external audits to ensure compliance. Adding additional layers of requirements tied to a rebate model would increase administrative costs and complexity, but would not materially strengthen the integrity of the 340B program.
HRSA-2026-0001-2117Ventura County Medical Center2026-04-20T04:00Z20,638 chars
Dear Administrator Engels, Attached is Ventura County Medical Center (DSH 050159) response to HRSA's Request for Information for the proposed 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042. Thank you. Jason Arimura Associate Hospital Administrator Ventura County Medical Center April 17, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Ventura County Medical Center in Ventura, California, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Ventura County Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Ventura County Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Ventura County Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and John Fankhauser, MD, MHA Chief Executive Officer Osahon Ekhaese, MBA, FACHE, CPHQ Chief Operating Officer Allison Binkowski, MD Interim Chief Medical Officer Danielle Gabele, DNP, RN, CENP, CCRN-K Chief Nursing Executive Jill K. Ward, CPA Chief Financial Officer 2 reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Ventura County Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program Any rebate program would require Ventura County Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Ventura County Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. One-Time Startup Costs Estimated: $175,000 $325,000 These costs include: o Workflow design and implementation Development of processes to identify rebate-eligible claims, create crosswalks between purchasing, dispensing, and billing systems, and establish internal policies Estimated labor: 300500 hours o IT and data infrastructure modifications System configuration, report development, data mapping, and testing across split-billing, wholesaler, and billing systems Estimated cost: $50,000 $125,000 o Vendor setup and consulting support Third-party administrator configuration, vendor enhancements, and consulting services Estimated cost: $35,000 $75,000 o Training Development of materials and training for pharmacy, finance, billing, and compliance staff Estimated cost: $10,000 $25,000 o Legal/compliance review Policy updates, rebate terms review, and audit risk assessment Estimated cost: $15,000 $40,000 Ongoing Annual Costs Estimated: $400,000 $600,000 annually Ventura County Medical Center estimates that ongoing administration of a rebate model would require approximately 3.0 additional FTEs, or the equivalent diversion of current staff resources. Proposed staffing model: 3 o 1.0 FTE Data / Reporting Analyst Estimated cost (salary + benefits): $110,000 $145,000 Responsibilities: Data extraction and aggregation across systems Identification of rebate-eligible claims Report development and submission validation o 1.0 FTE Compliance / Reconciliation Analyst Estimated cost (salary + benefits): $100,000 $135,000 Responsibilities: Claim-level validation and reconciliation Audit preparation and documentation Monitoring for duplicate discounts and compliance issues o 1.0 FTE Program Coordinator / Operational Liaison Estimated cost (salary + benefits): $90,000 $130,000 Responsibilities: Managing denials, disputes, and appeals Coordinating across pharmacy, finance, and revenue cycle Tracking outstanding rebate activity and timelines Total estimated personnel cost: $300,000 $410,000 annually Additional ongoing costs include: o IT maintenance and reporting support: $25,000 $75,000 annually o Vendor / consultant support: $25,000 $75,000 annually o Training and compliance updates: $5,000 $15,000 annually Total estimated ongoing cost (all-inclusive): $400,000 $600,000 annually Estimated labor commitment: ~6,000 7,000 hours per year Key Cost Drivers Identification and validation of rebate-eligible claims Data aggregation across multiple systems not designed for rebate workflows Submission formatting and error resolution Reconciliation of expected vs. received rebates Denial management and dispute resolution Audit preparation and documentation retention Ongoing vendor coordination and system maintenance Effect on Current Administrative Costs The rebate model would not replace existing 340B administrative functions. Instead, it would layer additional processes on top of current operations, including: 4 o Claim-level tracking and reporting o Post-payment reconciliation o Denial and appeals management o Expanded audit and compliance documentation o This creates a duplicative administrative structure, increasing total workload rather than shifting it. Additional Costs Not Otherwise Captured Consulting and advisory support (one-time and recurring) Staff training and retraining (recurring) Opportunity cost of diverting existing staff Potential reduction in patient support services if resources are reallocated Cash flow delays, requiring increased financial oversight and tracking Comparison to 340B Savings Ventura County Medical Center is concerned that these incremental administrative costs would materially erode the benefit of the 340B Program. Even before accounting for delayed payments, denials, or unrecovered rebates, annual administrative costs of $400,000 $600,000, plus startup costs of $175,000 $325,000, represent a significant financial burden. With up to 25 drugs included in the rebate model, the administrative infrastructure required would still need to operate at full scale. This creates a disproportionately high cost per drug and reduces overall program efficiency. Staffing Impacts Under a Potential 340B Rebate Program Ventura County Medical Center does not currently have the staff needed to comply with a Rebate Program. HRSAs estimate of approximately 5 hours per week significantly understates the operational burden. Implementation of a 340B rebate model would require both additional staffing and reallocation of existing staff time. Rebate administration requires claim-level tracking, cross- system data validation, reconciliation of payments, investigation of discrepancies, and ongoing audit support. These processes are largely manual and cannot be automated within existing systems. Ventura County Medical Center estimates an additional workload of approximately 80120 hours per week, equivalent to 2.53 FTE. If new staff are not immediately available, this work would be absorbed by existing pharmacy, compliance, and administrative staff, resulting in diversion from current responsibilities, including 340B oversight, audit readiness, and support for clinical operations. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program Ventura County Medical Center has designed its systems and operational workflows around an upfront discount model. Transitioning to a rebate-based model would require new system capabilities, data workflows, and ongoing support, resulting in significant one-time and recurring costs. 5 From an IT perspective, implementation would be moderate to high complexity and would require development of new mechanisms to extract and transmit medical claims data at the NDC level. Required System Modifications To support a rebate model, VCMC would need to implement one of the following: 1. New Interface Development (One-Time + Ongoing Costs) Requires coordination with Oracle Cerner teams Estimated one-time cost: $40,000$60,000+ depending on scope Estimated timeline: ~2 months (excluding internal approvals and vendor scheduling) Requires VPN configuration for secure data transmission Lower long-term maintenance compared to other options Ongoing costs: maintenance and vendor support for interface management 2. Custom Data Extract (Lower Upfront, Higher Ongoing Burden) Requires development of complex reporting logic (e.g., CCL-based extraction) Estimated timeline: 3+ months to reach testing Lower upfront cost (minimal if internal resources are available; potential consulting costs if external support is required) Likely relies on SFTP-based transmission Higher ongoing maintenance burden due to report upkeep and validation Both approaches would require: New system configuration (VPN or secure file transfer setup) Cross-system data mapping and validation Staff participation in design, testing, and ongoing support Operational and Resource Constraints Key challenges include: Limited IT personnel capacity, with existing resources already committed to active projects Competing priorities that may delay implementation timelines Ongoing maintenance requirements, particularly for custom data extract solutions Although both interface and extract options could be configured for automation, they require significant upfront build effort and continued oversight. Data Collection By Covered Entities During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 6 Ventura County Medical Center currently collects and maintains 340B-related data across multiple internal systems and third-party vendors, including split-billing software (Verity 340B), wholesaler purchasing data (Cardinal Health), EHR/clinical systems, and billing/revenue cycle systems. These systems were designed to support the upfront discount model, not a rebate-based structure. As a result, 340B data is: Fragmented across multiple platforms Not aligned at the claim level Not centralized or standardized for rebate submission Maintained for compliance and audit purposes, not for reconciliation of payments Third-party vendors support certain functions (e.g., accumulations and reporting), but do not currently provide end-to-end rebate functionality, including submission, reconciliation, and dispute management. A 340B rebate model would require both one-time and ongoing changes to current data collection processes. One-time efforts would include: Developing new workflows to link purchasing, clinical, and claims data Creating data crosswalks and reports across systems Testing and validating data accuracy Ongoing efforts would include: Identifying rebate-eligible claims Aggregating data across systems Reconciling submitted vs. received rebate payments Managing documentation and dispute resolution These activities represent new operational functions, not extensions of current processes. To comply with a rebate model, VCMC would need to pull and align data from multiple systems, including: Wholesaler purchasing data Split-billing/340B eligibility data EHR dispensing/administration records Claims and payment data These systems are not integrated at the level required, resulting in: Manual data extraction and manipulation Matching across systems using inconsistent identifiers Ongoing validation and reconciliation efforts 7 Even with vendor support, these processes would require significant ongoing manual intervention. Payment Timing And Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Ventura County Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. With Medicare, Medi-Cal and third party payor rates insufficient to cover the Medical Systems costs, Ventura County Medical Center relies heavily on supplemental funding. Unfortunately, receipt of that funding is delayed by 18 to 24 months after the care is provided and costs incurred, creating significant cash flow strains. In order to operate, Ventura County Medical Center borrows cash from the Countys General Fund. That loan, which bears interest, averages $300M with peaks above $360M. This represents over 80% of the County of Venturas General Fund available fund balance, creating a significant strain on the General Fund and has resulted in delays of needed County capital projects. The proposed changes to the 340B program will add further strain on Ventura County Medical Center and increase the loan balance since we will forced to pay the full price up front at the time of purchase and expect additional administrative time and costs to process claims for 340B reimbursement, and then the added delay for the reimbursement to be received. The time between initial purchase and reimbursement could exceed 60 days. Adverse Impacts of These Additional Costs And Burdens All of these many different costs and burdens add up. Unfortunately, that means that Ventura County Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. Cuts to services provided by Ventura County Medical Center would have to be considered. As a result, our patients and community will suffer in concrete ways. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will or reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post- sale rebates. Ventura County Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the 8 upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B pricing. Given the tremendous costs that a rebate mechanism will impose on Ventura County Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B de-duplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Ventura County Medical Center recognizes the importance of preventing duplicate discounts within the 340B Program. Based on our experience, existing processes and controls have been effective in managing this risk without the need for a rebate-based model. Ventura County Medical Center has not experienced significant or systemic duplicate discount issues. Current safeguardsincluding split-billing systems, internal monitoring and audit processes, and established billing practicesare integrated into our operations and support program integrity. These existing controls are less burdensome and more efficient than a rebate model, which would require significant new processes such as data aggregation, reconciliation, and dispute resolution. A rebate model would introduce unnecessary complexity and shift operational burden to covered entities without clear added benefit. Given the effectiveness of current controls and the availability of more efficient alternatives, Ventura County Medical Center does not believe a rebate-based approach is necessary. For all of these reasons, Ventura County Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Ventura County Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A 9 failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jason Arimura, PharmD Associate Hospital Administrator Ventura County Medical Center Ventura, California
HRSA-2026-0001-2118Centerville Clinics, Inc.2026-04-20T04:00Z123,402 chars
Please see the attached letter regarding the 340B Rebate Program S ly CENTERVILLE CLINICS Total Health Care for the Entire Community April 20, 2026 Chantell Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Dear Ms. Britton: Centerville Clinics, a Federally Qualified Health Center, has been providing medical, behavioral health, dental, lab, x-ray specialty, and pharmacy services in our 13-community office sites as well as services in our local schools, many of these are rural We are proud to serve in southwestern Pennsylvania over 30,000 patients who reside in Washington, Greene, and Fayette Counties. We are the safety net for the un-underinsured and the elderly who reside in the communities where we have offices. Fayette and Greene counties are two of the least healthy and least wealthy in Pennsylvania The 340B program has helped us support these offices and has enabled us to provide medical and pharmacy (medications) to the poor who qualify for our sliding fee program that is based on the Federl poverty guidelines. If the 340B rebate model pilot program includes FQHC's we will be forced to close sites and curtail services including our sliding fee to the poor. As stated in the attached letter, we have used 340B receipts to maintain and renovate our offices, and to offer a sliding fee to our un-underinsured and elderly. The attached letter details how devastating it will be to our organization and the patients we serve. We urge you to exclude FQHC's from the above 340B rebate model pilot program. We appreciate the consideration that you give to this request. Barry Nr lai Chief Executive Officer Joseph A. Yablonski Memorial Clinic 1070 Old National Pike Fredericktown, PA 15333 (724) 632-6801 Bentleyville Family Practice 100 Wilson Road Bentleyville, PA 15314 (724) 239-2390 California Family Practice 1152 Wood Street California, PA 15419 (724) 938-2122 Carmichaels Clinic 601 West George Street Carmichaels, PA 15320 (724) 966-5081 Charleroi Medical & Dental 200 Chamber Plaza Charleroi, PA 15022 (724) 483-5482 Connellsville Medical & Dental 601 South Arch Street Connellsville, PA 15425 (724) 626-2630 Donora Family Medicine 718 McKean Avenue Donora, PA 15033 (724) 379-4401 Fairchance Office 93 N. Morgantown Street Fairchance, PA 15436 (724) 564-0900 Republic Medical & Dental 1006 Main Street Republic, PA 15475 (724) 246-9434 Uniontown Family Doctors 86 McClellandtown Road Uniontown, PA 15401 (724) 430-7990 Washington Family Doctors 37 Highland Avenue Washington, PA 15301 (724) 223-1067 Waynesburg Office 1150 Seventh Street Waynesburg, PA 15370 (724) 627-8243 www.centervilledinics.com FQHC CENTERVILLE CLINICS fleulth Gurfor d ir tmirr Communini 1070 Old National Pike Fredericktown PA 15333 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Centerville Clinics Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Centerville Clinics Inc. anticipates extraordinary losses amounting to between $1,000,000 and $1,500,000 that will be detrimental to the entire operations as a result we will be forced to curtail services and our sliding fee to the poor patients who need our assistance. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. 1 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Centerville Clinics Inc. in particular, this means it will impact: Centerville Clinics had 73,331- 340B transactions in their two in-house pharmacies and their contracted pharmacy, and in 2025 Centerville served 31,584 patients. Centerville Clinics Current administrative costs for the 340B Program are $2,257,013. Centerville Clinics Inc. serves 31,584 unduplicated patients. .Centerville Clinic was established in 1955, and our mission has been to provide services to the community regardless of their ability to pay. In order to meet the needs of our patients, we have worked jointly with all of our community leaders in the three counties in Pa that we service, Washington, Greene, and Fayette. Centerville has been able to provide comprehensive services to patients regardless of their ability to pay, and these services include 13 sites, and we offer family practice, pediatric, specialist, podiatry, lab, x-ray, dental, black lung program, behavioral health services, community health workers and two in house pharmacies. For patients of Centerville Clinics, transportation remains a critical barrier to healthcare accessibility across Greene, Fayette, and Washington counties. The regions rugged, rural geography lacks a cohesive public transit infrastructure, leaving a high volume of low-income residents-nearly 88% of whom live below 200% of the federal poverty level without reliable ways to reach appointments. Without consistent non-emergency medical transportation, these residents face a cycle of missed screenings and delayed treatments, directly fueling the region's high rate of chronic disease and lower life expectancy compared to the rest of Pennsylvania. The poverty rate for these rural counties averages 5% higher than the State and the Federal poverty rates. Fayette and Greene Counties are two of the least healthy, least wealthy counties in Pennsylvania. For these reasons, we have opened office sites in the small towns where the patients reside. Since our FQHC Federal grant and our Medicare and Medicaid cost reimbursements have not increased at the same rate as our expenses, it is difficult to balance our operating budget. Additionally, to meet our patients' needs, we have opened office sites without receiving any additional Federal Funds. Since we have been operating for over 70 years, some of our offices need either renovation or replacement. For these reasons, we have used our 340B program income to balance our operating budget, establish new sites, and renovate or replace our existing offices. . We have been successful in receiving grants to subsidize some of the costs for purchasing facilities and or renovating our older facilities, however these grants did not cover all of our costs. Our 340B program has given us the ability to provide a pharmacy sliding fee to those patients who are eligible. We recently opened our second in-house pharmacy, and we expect our sliding fee adjustment to reach 1 million dollars. The additional expense and the loss of receipts due to the rebate program implementation will force us to reduce the amount of sliding fee assistance that we now are able to offer our patients. Centerville is concerned that many of these patients with limited incomes will not be able to pay 2 for their medication. This will mean that this will have a negative effect on their health. We will also be forced to eliminate or curtail our services such as food banks and diaper distribution to the poor, medical care for City Mission, and community health workers. We will also be forced to consider closing some of our sites that depend on the 340B program. Centerville Clinics appreciates that the Federal grant and the 340B program has enabled us to provide services to the low income, who depend upon us for their medical, specialist, behavioral health, dental, and pharmacy services This is the reason for the last two months, the pharmacist manager, the manager of the 340B program, and our senior accountant have spent most of their time addressing this issue. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. Pitt rs; pLif 111.1 16.1 circukii ioihrhA .12:O)65 718 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. Imps: v+ 11.1,ii1111)Sil_gcR data-w e.-cssilect nAhth-nati,111;d-, ti i-Iteatth 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 5 A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Centerville Clinic provided [$594,146 in sliding fee discounts, in 2025 however Local Rite Aids have closed in our areas, and our Centerville volume has increase and we recently opened another pharmacy in one of our sites. We anticipate that our sliding fee will increase to over $1,000,000 in 2026 through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Centerville Clinics Inc. anticipates needing an additional 2.39 FTE's as a result of a Rebate Model. And an additional .60 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Centerville Clinics Inc. anticipates an increase of $100,000 to costs for external support vendors. These vendors may include legal counsel, program coordination, annual 340B auditors, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Centerville Clinics Inc. estimates that we will need to hire 2.99 FTE's. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 these additional costs are not an option for many entities. Centerville Clinics Inc estimates that our losses will be similar to the above. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments and will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Centerville Clinics Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 31,584 patients, the total projected increase in expenses including labor, IT, and carrying costs is estimated at $372,206 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our current system does not have the ability to handle the new rebate infrastructure; therefore, we have projected the cost for upgraded systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Our estimate is that our costs will be between $60,000- $75,000 for integration costs. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend additional hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. 7 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with thirty-nine pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across two in-house and one contracted pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the three counties that we serve, Washington, Fayette, and Greene, with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. Vulivrabilitk lailex Approach to Idernir% Pharmack Deserts and IN:el gone Pharmacies Phannuo and Clinical Pharmacoloo JAM A Nem ork Open I J \MA Nem ork huns: vk 1% +a iiiNilthillfair-z.or,2 doi hlthoff..2024,00!92?iiitimalCode=hlibarr 8 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Centerville has a board approved pharmacy assistance plan (Sliding Fee) that will assist patients in receiving their medications without creating a barrier to care. Pursuant to Centerville Clinic's sliding fee policy, Centerville assesses and at annual intervals, reassesses patient's income and family size for eligibility for the Sliding Fee program. Whan a patient qualifies for the sliding fee discount program; Centerville Clinic pharmacies will charge the patient in accordant to the structure. The sliding Fee program is established annually based on the Federal Poverty Levels. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. burrs: .bnlic..hrs.a. coniplinnce, comoli manualithapter9 footn ote 10 9 operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for 13Iti "I' en hcal Ihco, Moe em--and-busilless-health-check-kex -metries-o cr% -nitavrnao -mt nefr`houtd-ro i4", 10 all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, under the proposed rebate model, we propose that our additional monthly cost would be $880,161 and this is over a 400% increase. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Centerville Clinics Inc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Mobile Unit, immunizations, and food banks. Operating Hours: We anticipate needing to reduce our clinic hours. Centerville Clinic offers evening hours for our patients who are working and for our patients, without transportation, who depend upon family members to drive them to their appointments. The 340B rebate program will force us to discontinue evening hours in order to save salary costs for providers and ancillary staff as well as overhead costs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to 14 3 Ilkpriciiildirsa.um 15 how,: IA.c.ms.1.1.0% /ip ,elee.ted-dru271ist-neentialcil-a r-lottm 11 fund a full-time community worker and several behavioral health counselors who provide services in local schools. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,344 uninsured patients and many of our 9,843 commercial patients are poor, and their insurance product does not offer drug coverage. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Centerville Clinic Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. We estimate that our annual rebate opportunity cost in 2026 will be $136,295 due to denials and discounts lost. Centerville Clinics Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase ourypfront monthly drug spend by $880,161. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to use the financial reserves that are needed for balancing our 12 operating budget and for renovating our older facilities for the first year. However, our estimates of next year's cash reserve that is needed would force us to take out a line of credit. This is not a sustainable solution because funds are currently dedicated to balancing our operating budget and for renovating our older facilities for the first year. However, our estimates of next year's cash reserve that is needed would force us to take out a line of credit. Centerville Clinics offers food banks, community health worker services, mobile unit services, city mission services for patients, many of whom are homeless and veterans, and behavioral health counselors in a school-based setting. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Centerville Clinics Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Centerville Clinics Inc urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservativel5% denial rate would result in an annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) litlps://\\ \\.federalreaister.am 'documents/2025/08M 1 ,2025-146 I 9 340h-pro2ram-notice-application-process-for-the-340b- rehnte-model-pilirt-pro2rani 13 to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase 17 Manufacturer Audit Guidelines htips:. III-su.ao% sites deflui I t files 1irsa opt] dispute-reso li it ioii-process- I 2- I 2-9(Lpilf 14 costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not *vide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails 18 340B House Report Legislative History. H.R. REP. 102-384(II). 19 Administrative Dispute Resolution Regulation, .; FR-202-1AM- I 0 ok 202-1-08262.Ni 15 HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claim-level documentation. Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.2 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on 20 Section 340B ofthe Public Health Service Act, haps:. .%\'x.hrstt.52oik .cit.es default Illes hrsa ruml-he.althl)hs-net-seetion. 340b.ndi 16 access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparencv Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where 21 h Ups:: rp.support. beaconchannelmana2emen t.comi'en, articles/ I 3335320-% I id4on-codes-and-prichw-codes-Oossan. 17 no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 We estimate that our cost will be approximately $35,000. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate 22 hilp5: publie-inspeclionied,:ralrestisicreo 2025-1-161941dr! I 753965q18 23 Internal NACHC survey data 18 model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient' s income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing the best internal practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts -to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications 19 at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such 24 5 U.S.C. 500-596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), %. reuuktion lormation (last visited Mar. 13, 2026); H.R. REP. 102-384(I1)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). zb CY 2026 PFS, Final Rule, Iv %%.!IoN 1FR-21125-1i-05 pdf 20 as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price ,points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from 27 H.R. REP. 102-384(II) 28 42 U.S.C. 256b(a)(1) 21 charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."3 That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugmaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be 29 Id. 39 42 U.S.C. 256b(a)(l) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the HHS may "develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. ld. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 22 generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute' s first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 36 C.F.R. 447.518(a). 23 implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. The State of Pennsylvania follows this scenario. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highest possible prices to acquire 24 a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.37 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."38 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."39 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers."4 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care 37 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, hup.:: .citi, lite-z document ipa%. -2ti2S-Iii gui d ance.pd f. 38 42 C.F.R. 447.502 39 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, imps: 1%1\ ,A.reuulations.u_o conintenCHRS.A-2025-0001-0095. 4 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, \11 \ .reculations.2.o\ cominent RS -\ -2025-000 -0980, 25 organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.41 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturer's subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 41 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 26 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.42 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section I 905 (a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. " 43 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BINIPCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.44 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 42 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. bitas n.ccir.tto current title-42 chapter-It subchapter- IL pan-438 subpart- 1 section-438.3 43 42 U.S.C. 256b(a)(5)(A)(emphasis added). 44 32 C.F.R. 199.21(q)(2)(iii)(E) 27 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.45 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.46 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.47 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.48 They are negotiated with market discounts, including 340B discounts, already 45 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, v o. 3. (stating that commercial claims data is worth billions of dollars). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, kk Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with Program meaning a total of roughly $6 billion annually.") 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts %%v, 2023), Issue N o. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, 340B claims data is worth "at least . . . $6 billion annually" in 2022.) .Kalderos.cotn (Oct. 2023), .Krikloros.ctml (Oct. 2023), the 340B Drug Pricing .Kaldcrosxom (Oct. identifying that commercial 28 factored into their high drug list prices.49 Drug industry data vendors have reported that such data is highly valuable to manufacturers.5 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our country's most vulnerable patient populations.51 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.52 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutory authority.53 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."54 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, xt .Kalderos.com (Oct. 2023), \o. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). so Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts u lk,Kaltleros.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 51 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . .. is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 52 340B Report, Legislative Map: Contract Pharmacy Protection Bills, hulls 3-111brezori,:tim ezilktp contract- pharinitet -proz.mioit-bill,: 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, 3-lilbrepon.com le,2i-Joth Im s-passeAl-tIltit-proliihit-oblit-midermi% mem 53 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 54 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 29 Third Circuit has made clear, "obligations cannot spring from silence."55 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.56 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.57 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or ss Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). sb 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 57 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 30 transferring 340B drugs to nonpatients.58 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] `patient' of the covered entity for purposes of this definition if so registered as eligible by the State program."59And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.6 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 58 42 U.S.C. 256b(a)(5)(B) 59 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 6 H.R. REP. 102-384, 16 31 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. 32 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model6i published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 61 paaes, resources (Johnson & Johnson Policy Documents) 33 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Centerville Clinics Inc.] strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Centerville Clinics Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 34 Centerville Clinics Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Barry Niccolai CEO at bniccolai@centervilleclinics.com Bany Niccolai CEO Centerville Clinics Inc, 35
HRSA-2026-0001-2119University of Michigan HealthWest2026-04-20T04:00Z15,254 chars
See attached file(s) Department of Communication | 2901 Hubbard Street, Suite 2400 |Ann Arbor, MI 48109-2435 Phone: 734-764-2220 | Fax: 734-615-2169 | UofMHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: University of Michigan HealthWest (UM HealthWest) appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFI).1 These comments reflect UM Health Wests experience with and perspective on the 340B program in its entirety, not solely as it pertains to drugs subject to the Inflation Reduction Act, unless otherwise specified. Global Comments University of Michigan HealthWest is a nonprofit multispecialty medical provider located in Wyoming, Michigan, serving more than 250,000 patients annually at 30 locations across four counties in West Michigan. Founded in 1942 by a group of osteopathic physicians committed to holistic, patient-centered care, UM HealthWest has grown into a 208-bed teaching hospital that is a Verified Level II Trauma Center, a certified Comprehensive Stroke Center, and an accredited Chest Pain Center. More than 61,000 emergency patients are treated at the hospital each year. As part of the University of Michigan Health network, which is consistently ranked among the nations top academic medical centers, and UM HealthWest brings world-class expertise to the communities of West Michigan. Guided by the mission to advance health to serve Michigan and the world, UM HealthWest is committed to delivering high-quality, compassionate care to all patients in the communities it serves, including those who are uninsured or underinsured. As a disproportionate share hospital (DSH) and a 340B-participating covered entity, UM HealthWest relies on the 340B program as a foundational tool to sustain its safety-net mission and ensure access to essential medications and health services for the most vulnerable residents of West Michigan. During the most recent fiscal year, UM HealthWest processed 53,364 340B transactions (limited to ambulatory pharmacies). Transitioning to a rebate-based structure would fundamentally destabilize our 340B program, imposing severe financial, operational, and administrative burdens on our institution, and ultimately threatening the availability of programs that support the most vulnerable members of our community. UM HealthWest firmly opposes the proposed 340B Rebate Model Pilot Program. Costs of a Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would impose immediate and permanent financial harm on University of Michigan HealthWest. Under a rebate model, University of Michigan HealthWest would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than the 340B ceiling price, creating a substantial and unsustainable WAC float. Based on our projections specific to the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) drugs, this inventory carrying cost would result in approximately $196,000 in additional cost, given that we typically hold a two-week inventory to ensure patient care continuity and that the time from purchase to rebate repayment will be at least one month. This figure represents only the costs attributable to the currently listed MDPNP drugs; expanding the rebate model to additional medications, as HRSAs RFI contemplates, would compound this burden significantly. Beyond the inventory carrying cost, University of Michigan HealthWest anticipates approximately $12,000 per month in denied rebate claims under a rebate model, and absent appropriate guardrails, based on an estimated denial rate of approximately 10% of submitted claims. These denials would represent a permanent and recurring financial loss that diverts scarce resources away from direct patient care. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthWest strongly disagrees with HRSAs assessment that these impacts would be minimal. Our current administrative costs are predictable and integrated into existing pharmacy and billing workflows. A rebate model would require entirely new operational functions, including claims-level tracking, rebate submission management, payment reconciliation, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and expanded administrative staffing. These are not temporary transition costs; they are permanent structural burdens. Payment Timing and Cash Flow The payment timing structure of a rebate model creates serious and unavoidable cash flow risks for University of Michigan HealthWest. We frequently purchase medications weeks before they are administered or dispensed, as maintaining on-hand inventory is essential to providing timely, uninterrupted patient care. For slower-moving but clinically essential medications, the delay between purchase and rebate payment could span months. Our standard wholesaler payment terms are net 30 days for all invoice types, meaning University of Michigan HealthWest would be required to pay for drugs at WAC within 30 days of purchase, yet may not receive rebate repayment for weeks or months thereafter. Michigan Medicine does not believe this impact can be meaningfully mitigated under the rebate structure as proposed. If rebate eligibility is conditioned on demonstrating patient administration or dispensing, no mechanism exists to eliminate the inherent gap between purchase and repayment. Preferable alternatives would include structuring the program as a consignment model, where covered entities are not charged at WAC until a drug is administered, or allowing the purchase to be made at the upfront 340B price but reclassified to WAC only if data is not submitted within a specified timeframe. Either approach would be far preferable to requiring covered entities to front the full WAC cost indefinitely. Data Collection Challenges Transitioning to a rebate model would fundamentally alter our data management obligations in ways our current systems are not designed to accommodate. Rather than maintaining internal compliance records, we would be required to generate highly specialized, claims-level datasets for manufacturers and third-party platforms, which requires the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across multiple, often siloed, systems. A significant practical challenge is that data required for rebate adjudication does not align with information stored in our current systems. Pharmacy claims are processed in real time, whereas medical claims can take weeks or months to finalize. This timing mismatch makes it exceptionally difficult to provide the accurate, comprehensive, contemporaneous data that a rebate model would demand. Under a rebate model, we would need to hold and reconcile significantly more data: tracking what has been uploaded, reconciling claims against payments, and managing disputes and financial impacts, all of which would be ongoing and resource-intensive obligations. We strongly recommend that any required data elements be consistent across all manufacturers and medications and that the use of Internal Control Numbers (ICNs) be prohibited, as many covered entities lack access to this information. For pharmacy claims, required fields should be limited to: 340B ID, prescription number, date of service, NDC, and quantity. For medical claims: 340B ID, claim identifier or transaction number, date of service, NDC, and quantity with unit of measure. We further dispute the assertion that such a radical shift in data requirements is necessary for program integrity. A neutral, government-funded third-party data clearinghouse could effectively collect and share necessary data with relevant stakeholders without dismantling the upfront discount framework that has supported safety-net providers for over thirty years. Rebate Denials and Lack of Adequate Protections The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the prospect of rebate denials in the absence of a structured dispute resolution framework. University of Michigan HealthWest expects approximately 10% of submitted claims to be denied under a rebate model without appropriate guardrails, translating to an estimated $12,000 per month in unrecovered funds specific to MDPNP drugs. Our position is clear: rebate denials should be limited exclusively to claims for which a rebate has already been paid to another covered entity. Manufacturers should have no other valid basis for denial, and this limitation must be explicitly codified in program guidance. Specifically, manufacturers should be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, paid payor rebates, or any other non-statutory rationale. Any denial must be accompanied by specific, transparent documentation, including the date of the prior rebate payment and the identity of the recipient, so that University of Michigan HealthWest can validate and, where appropriate, dispute the denial. We urge HRSA to mandate standardized adjudication protocols, definitive response timelines, and an independent dispute resolution mechanism that is not manufacturer-controlled for resolving contested claims. Without these protections, covered entities will absorb losses without meaningful recourse. Program Integrity and Transparency University of Michigan HealthWest is deeply concerned that a rebate model would fundamentally shift control over 340B pricing away from the federal government and into the hands of pharmaceutical manufacturers. Rather than improving program integrity, this shift would invite manufacturers to impose their own unilateral definitions of diversion and other compliance terms that conflict with the 340B statute and HRSA guidance. It would also reduce transparency for covered entities, who would not know the effective price of a drug until weeks or months after purchase, significantly complicating real-time pharmacy adjudication to Medicaid, where billing at actual acquisition cost is required at the time of dispensing. Manufacturers already receive extensive data on 340B purchases through the existing chargeback process and Drug Supply Chain Security Act transaction reporting. A rebate model does not provide manufacturers with new information; it merely gives them greater leverage over the disbursement of funds that covered entities have lawfully earned. University of Michigan Health West is committed to full compliance and transparency, as evidenced by our regular internal audits and annual independent external audits, and we welcome data-sharing mechanisms that strengthen program integrity without imposing unnecessary financial burdens. Recommendations University of Michigan HealthWest respectfully urges HRSA to reject the proposed 340B Rebate Model Pilot Program in its current form and to preserve the upfront discount model as the statutory and operational foundation of the 340B program. Should HRSA nonetheless proceed with some form of rebate mechanism, University of Michigan HealthWest urges the following minimum requirements: Any rebate framework must be administered by a neutral, government-funded third party under the direct oversight of HRSA and not a manufacturer-sponsored or manufacturer- funded entity, to avoid conflicts of interest and protect covered entities from arbitrary denials. The scope of any rebate mechanism must be narrowly limited to addressing specific duplicate discount issues arising from the Medicare Part D IRA provisions, and must not be extended to all 340B transactions or all drug classes. Rebate denials must be limited exclusively to claims for which a rebate has already been paid, and manufacturers must be prohibited from denying claims on grounds of alleged Medicaid duplicate discounts, diversion, or other non-statutory rationale. All denials must be accompanied by specific, documented justification, with clear adjudication timelines and an independent dispute resolution process. Data requirements must be standardized across all manufacturers, ICNs must be prohibited, and data submission obligations must account for the inherent timing mismatch between pharmacy and medical claims. HRSA should provide a mechanism to offset the reconciliation costs imposed on covered entities, or structure the program to preclude manufacturer denial pending formal dispute resolution. Conclusion The 340B program has served as a vital lifeline for University of Michigan HealthWest and the vulnerable patients we care for across West Michigan for over thirty years. It enables us to expand access to essential therapies, sustain charity care programs, support community health initiatives, and serve all who come through our doors regardless of their ability to pay, and all without cost to taxpayers. The proposed rebate model threatens to dismantle this proven framework by imposing approximately $196,000 in inventory carrying costs and $12,000 per month in projected denied claims. Additionally, all covered entities within our system anticipate one-time startup costs of approximately $250,000 to develop and maintain a system capable of tracking 340B rebate requirements, plus $75,000 in ongoing FTE support costs annually. Our total recurring incremental systems costs are projected at $325,000 per year per covered entity. University of Michigan HealthWest urges HRSA to preserve the upfront discount model, explore less intrusive alternatives to address legitimate deduplication concerns, and engage meaningfully with covered entities before implementing any structural changes to the 340B program. We stand ready to work collaboratively with HRSA to protect the integrity of the program and the patients it was designed to serve. We appreciate your consideration of these comments. If you have any questions or require additional information, please do not hesitate to contact us. Sincerely, Dana Habers, MPH Chief Innovation Officer UM Health and Chief Operating Officer, Pharmacy Services University of Michigan HealthWest HRSA 340B OPAIS Covered Entity ID: DSH230236 (METROPOLITAN HOSPITAL) 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). SIGN
HRSA-2026-0001-2120Ryan Taylor · United States2026-04-20T04:00Z1,723 chars
Community Health Centers operate within narrow financial margins while serving patients with the highest levels of clinical and social complexity. The proposed 340B Rebate Model Pilot introduces a structural shift that requires upfront purchasing at Wholesale Acquisition Cost and delayed reimbursement through rebates, creating immediate cash flow constraints and financial uncertainty. This model places disproportionate risk on safety net providers and threatens the stability required to sustain essential services, staffing, and access to care. From a patient care perspective, the rebate model undermines the ability to provide affordable medications at the point of service. Many patients rely on predictable, reduced cost access to manage chronic conditions such as diabetes, cardiovascular disease, and behavioral health needs. Introducing variability in pricing and delays in access increases the risk of nonadherence, treatment disruption, and avoidable complications. For medically underserved populations, even short-term barriers to medication access can result in significant downstream health impacts. Operationally, the model introduces new administrative and technical requirements that divert limited resources away from direct patient care. Increased staffing needs, system modifications, and ongoing reconciliation processes add cost without improving care delivery. Community Health Centers already maintain strong compliance infrastructure and accountability mechanisms. Any new model should reduce burden and support access, not introduce additional complexity and risk. For these reasons, the proposed approach warrants reconsideration to avoid unintended consequences for patients and providers.
HRSA-2026-0001-2121Caring Health Center, Inc.2026-04-20T04:00Z63,030 chars
Comment on FR Doc # 2026-03042 340B Rebate Intake Form Field Site Name Caring Health Center, Inc. 340B ID CH01084B Entity Type HRSA - Funded Health Center State Massachusetts In-House Pharmacy (Y/N) Y Contract Pharmacies (Y/N) Y List TPA Vendors Verity, Walgreens, Wellpartner, NuvemRx. Contact Name Tania Barber Contact Email tmbarber@caringhealth.org Field Response i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Our entity had 48,000 contract pharmacy and in-house 340B transactions. ii. Describe your current administrative costs, including costs to third parties (e.g., contract pharmacies) related to 340B Program operations and compliance. As a mid-sized Federally Qualified Health Center (FQHC) with approximately 48,000 annual prescriptions across a combination of in-house and contract pharmacy arrangements, our 340B Program requires a substantial administrative infrastructure to maintain compliance and operational effectiveness. These costs include both internal staffing resources and payments to third-party vendors and contract pharmacy partners. We endured about $1.8M in administrative 340B cost for contract pharmacy and in-house pharmacy. Site Profile 1a. Current 340B Administrative Costs 1. COST TO COVERED ENTITY Page 1 of 25 340B Rebate Intake Form iii. Identify any key cost drivers (e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Current 340B administrative costs are driven primarily by staffing, IT systems, thirdparty vendors, and compliance activities. Internally, the program requires $320,000$530,000 annually in labor for program management, pharmacy splitbilling operations, compliance monitoring, and finance/revenuecycle support (approximately 3.755.0 FTEs). Externally, thirdparty administrator fees, contract pharmacy administrative charges, inventory management systems, and audit/consulting services add another $365,000$660,000 annually. In total, current 340B administrative costs range from $685,000 to $1.19 million per year, driven largely by prescription volume, contract pharmacy complexity, and the need to maintain compliance within an upfront discount model that already requires significant operational investment. Field Response i. Estimate the incremental administrative and operational costs your organization would incur under a340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring extensive internal staff time, new workflows, and expanded compliance oversight, as well as additional reliance on external vendors to manage the technical and reporting complexities of a rebatebased system. These increased administrative and vendorrelated demands would occur at the same time our organization experiences reduced 340B program savingsresources we depend on to sustain patient care, medication access, and essential wraparound servicesultimately straining our capacity to meet the needs of the underserved communities we serve. Under the 340B Model Rebate Pilot Program, the organization would incur both onetime startup costs and ongoing operational expenses. Startup costsdriven by IT system modifications, workflow redesign, staff training, and legal/compliance revieware estimated at $110,000 to $225,000 and 5001,000 hours. These activities include updating systems to support rebate tracking, developing new SOPs, training staff, and ensuring compliance readiness. Ongoing annual costsassociated with claim identification, rebate submission, reconciliation, audit preparation, IT maintenance, and denials managementare estimated at $195,000 to $405,000 per year, requiring 3,2006,600 hours (approximately 1.53.0 FTEs). These recurring activities reflect the labor and system support needed to manage rebate processing for drugs subject to MFP under MDPNP. 1b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Page 2 of 25 340B Rebate Intake Form ii. Describe the methodology and assumptions used to develop these estimates. The implementation of a 340B Rebate Model Pilot Program would impose significant new administrative and operational burdens on our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These added administrative and vendorrelated demands would occur alongside reduced 340B program savingsresources our organization depends on to sustain patient care, medication access, and essential wraparound servicesultimately straining our ability to meet the needs of the underserved communities we serve. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support necessary to build and maintain rebatespecific data and reporting functions; and assumed ongoing monthly activities for rebate submission, reconciliation, and audit readiness, as well as additional workload associated with drugs selected for MFP under MDPNP. These assumptions reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 3 of 25 340B Rebate Intake Form iii. Specify the activities or functions these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. The implementation of a 340B Rebate Model Pilot Program would create significant new administrative and operational burdens for our FQHC, requiring substantial internal staff time, new workflows, expanded compliance oversight, and increased reliance on external vendors to manage the technical, reporting, and reconciliation complexities of a rebatebased system. These incremental costs would cover activities such as claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, and audit support, as well as additional tracking and reporting for drugs selected for MFP under MDPNP. The shift of certain drugs from an upfront 340B discount to a rebate model would add layers of administrative work that do not exist todayreplacing an automated pointofsale discount with a manual, multistep process that requires ongoing staff involvement and vendor support. This change would increase our administrative costs while simultaneously reducing the immediate savings our organization currently relies on to support patient care, medication access, and essential wraparound services. The estimates of burden were developed using a methodology that assessed the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; evaluated the additional vendor support needed to build and maintain rebatespecific data and reporting functions; and assumed recurring monthly activities for rebate submission, reconciliation, and audit readiness. Assumptions also included the added workload associated with segregating and validating claims for MFPselected drugs and responding to manufacturer inquiries. These estimates reflect our current operational structure, typical staffing patterns, and the anticipated complexity of transitioning from a pointofsale discount model to a rebatebased framework. Page 4 of 25 340B Rebate Intake Form iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? If a 340B Rebate Model Pilot Program were structured to offset the significant administrative and operational costs it would impose, the most effective approach would be to provide a predictable, standardized administrative fee or reimbursement mechanism tied to the actual workload required to process rebateeligible claims. Such an offset would need to account for the full range of activities introduced by the rebate model, including claims identification and validation, data submission, rebate request preparation, payment reconciliation, duplicate discount monitoring, documentation retention, audit support, and the additional tracking and reporting required for drugs selected for MFP under MDPNP. Because these functions represent new and ongoing responsibilities that do not exist under the current upfront 340B discount model, the offset would need to reflect both the onetime startup burden and the recurring monthly workload. The offset could be accurately quantified using a methodology based on measurable operational inputs. This would include estimating the staff hours required across pharmacy, billing, revenue cycle, IT, and compliance teams; assessing the level of external vendor or TPA support needed to manage data interfaces, reporting, and reconciliation; and evaluating the frequency and complexity of rebate submissions and manufacturer interactions. These estimates would also incorporate the incremental burden created by shifting certain drugs from an automated pointofsale discount to a manual, multistep rebate process. By basing the offset on documented staffing patterns, workflow analyses, and vendor resource requirements, HRSA could establish a transparent and reproducible formula that ensures FQHCs are not financially disadvantaged by participating in the pilot. Without such an offset, the increased administrative burdencombined with reduced 340B savingswould significantly strain our organizations ability to sustain the patient care and wraparound services that the 340B program is intended to support. Administrative and operational costs under a 340B Rebate Model Pilot Program could be offset through predictable, workloadbased reimbursement mechanisms. The most effective options include perclaim administrative payments, percentagebased addons to rebate amounts, and upfront infrastructure payments to cover startup system and workflow changes. Additional support could come from timely rebate payment requirements and centralized processing tools that reduce manual effort. Offsets can be accurately quantified using timedriven activitybased costing, perclaim cost analysis, vendor/IT cost tracking, and pre/postimplementation comparisons. For midsized FQHCs, realworld estimates suggest $25$45 per claim would most closely reflect the incremental administrative burden and ensure the model does not shift costs onto safetynet providers. Page 5 of 25 340B Rebate Intake Form v. Comment on the impact of these incremental costs under your current operations. The incremental administrative and operational costs associated with a 340B rebate modelestimated at $325,000 to $610,000 annually and equivalent to 2.75 to 5.0 FTEswould place significant strain on current operations. Our existing 340B infrastructure is already operating near capacity, and absorbing this additional workload would require new staffing or diverting personnel from clinical and patientsupport functions. The added complexity of claimlevel tracking, rebate submission, reconciliation, and dispute resolution would further burden workflows, especially within contract pharmacy arrangements that are already administratively intensive. Financially, shifting from upfront discounts to retrospective rebates would create cashflow challenges, increase accounts receivable workload, and potentially require shortterm financing. Overall, these incremental costs would be fully additive to current 340B administrative expenses and could reduce resources available for patient care, care coordination, and medication accesscreating disproportionate operational and financial pressure on safetynet providers like FQHCs. Under our current operations, the incremental administrative and operational costs associated with a 340B Rebate Model Pilot Program would have a significant and negative impact on our organization. Our existing 340B structure is built around an upfront discount model that is largely automated, predictable, and integrated into our established pharmacy, billing, and compliance workflows. Introducing a rebatebased model would replace this streamlined process with a laborintensive, multistep system requiring ongoing manual claims identification, data submission, reconciliation, and audit supportfunctions that our current staffing levels are not designed to absorb. These new responsibilities would divert staff time away from direct patient care and core operational functions, requiring reallocation of limited internal resources and increased dependence on external vendors to manage the technical and reporting complexities of the rebate process. The added workload would strain our pharmacy, billing, revenue cycle, IT, and compliance teams, all of which already operate at capacity to meet the needs of our patient population. At the same time, shifting certain drugs from an upfront discount to a rebate model would delay and reduce the 340B savings we currently rely on to fund essential services such as care coordination, medication assistance, behavioral health support, transportation, and enabling services. The combination of higher administrative burden and lower, slower program savings would create operational pressure that could limit our ability to maintain or expand services for underserved patients. In short, these incremental costs would materially weaken the financial and operational stability that the 340B program is intended to support. Field Response 1c. Staffing Impact Under a Potential 340B Rebate Model Pilot Program Page 6 of 25 340B Rebate Intake Form i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a 340B Rebate Model Pilot Program would require additional administrative staffing or force existing staffincluding pharmacy, billing, IT, compliance, and potentially clinical providersto reallocate work hours away from patient care to manage new rebaterelated tasks such as claims identification, data submission, reconciliation, and audit support. Our current staffing model is not designed to absorb these added responsibilities, and the complexity of a rebate system would also require increased reliance on external vendors or TPAs to manage data interfaces and reporting functions. These internal staffing pressures and additional vendor costs would occur at the same time our organization experiences reduced and delayed 340B program savingsresources we rely heavily on to support patient care and essential servicesultimately straining our operational capacity and limiting our ability to meet patient needs. Implementing a 340B Rebate Model Pilot Program would require substantial additional staffing or force significant reallocation of existing staff time away from patient care. Based on the estimated 5,80010,800 additional administrative hours annually, the program would require approximately 2.75 to 5.0 new FTEs across 340B operations, finance, billing, IT, and compliance. Given current financial constraints, hiring this number of staff is unlikely to be feasible. Without new hires, existing personnelincluding pharmacy staff, revenue cycle teams, compliance staff, and careteam support roleswould need to absorb these responsibilities. This would divert an estimated 1.253.0 FTEs worth of time away from patientfacing and clinicalsupport activities, reducing capacity for medication access, care coordination, and operational oversight. Overall, the rebate model would not be operationally neutral. It would require multiple new FTEs or significant reallocation of current staff, resulting in reduced patientcare capacity, increased administrative burden, and heightened risk of workflow delays and staff burnout. Page 7 of 25 340B Rebate Intake Form ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. If a 340B Rebate Model Pilot Program were implemented, we anticipate needing 12 additional fulltime administrative staff to manage new responsibilities such as claims identification, data submission, rebate processing, reconciliation, and audit support. These positions would be permanent, as the rebate model creates ongoing monthly workload rather than temporary implementation tasks. Without these added FTEs, existing pharmacy, billing, IT, compliance, and even clinical staff would be forced to reallocate work hours away from patient care and core duties to support rebaterelated administrative functions. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors or TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. These staffing and vendor burdens would occur while our organization experiences reduced and delayed 340B program savings, which we rely heavily on to support patient care and essential wraparound services. Field Response i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Implementing a 340B Rebate Model Pilot Program would require new or significantly modified IT systems to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation, and enhanced auditready reporting. Our current infrastructure is built for the upfront discount model and cannot support these functions. Because we do not have internal IT resources to design or maintain this level of system infrastructure, we would be forced to contract with external vendors or TPAs to build interfaces, manage data mapping, and maintain ongoing reporting and reconciliation tools. This would introduce new and recurring vendor fees, which would increase as the complexity of the rebate model grows and as more medications are shifted into the rebate process. The overall cost burden would vary significantly based on claim volume and the number of drugs subject to rebate processing, adding substantial expense to an already resourceconstrained program. 1d. Systems & Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Page 8 of 25 340B Rebate Intake Form ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Implementation of a 340B Rebate Model Pilot Program would require substantial investment in new or modified IT systems and data infrastructure. These needs would include developing or procuring software to support claimlevel data capture, NDC validation, rebate file creation, secure data transmission, reconciliation workflows, and expanded auditready reporting. Because our organization does not have the internal IT resources to design, build, or maintain this infrastructure, we would be required to contract these functions out to external vendors or TPAs. This would introduce significant onetime costs for system development, configuration, interface creation, and initial testing, as well as recurring costs for ongoing system maintenance, data extracts, reporting support, and reconciliation activities. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. The overall cost burden would vary considerably based on claim volume, the number of rebateeligible drugs, and the frequency of required submissions. These new systemrelated expensesboth onetime and recurringwould add to the internal administrative burden and vendor reliance already required to navigate the complexities of a rebate model, all while our organization experiences reduced and delayed 340B program savings that we rely heavily on to support patient care and essential services. Field Response 1e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Page 9 of 25 340B Rebate Intake Form i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. In addition to the administrative, staffing, and systemrelated burdens already described, implementation of a 340B Rebate Model Pilot Program would create several additional costs for our organization. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both onetime costs during implementation and recurring costs as program requirements change or expand. The increased operational complexity may also force us to reduce or scale back certain patient services, as staff time and financial resources are redirected toward managing rebaterelated administrative functions. These additional burdens would compound the internal administrative costs and vendor fees already required to navigate the complexities of a rebate model. Importantly, these new expenses would occur while our organization experiences reduced and delayed 340B program savings, which we rely on to fund critical patient care, medication access, and wraparound services. The cumulative impact would significantly strain our financial stability and limit our ability to meet the needs of the underserved community we exist to serve. ii. Identify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). As a community health center, our ability to participate in a potential 340B Rebate Model Pilot Program would be significantly constrained by several organizationspecific factors. We operate with limited administrative staffing, lean financial margins, and a missiondriven focus on serving underserved patientscharacteristics common to FQHCs and small, communitybased providers. Unlike larger health systems, we do not have dedicated IT, compliance, or pharmacy analytics teams capable of absorbing the extensive new requirements of a rebatebased model. Our rural/underserved service area further limits access to specialized workforce and technical expertise, making it difficult to implement and sustain the complex data, reporting, and reconciliation functions required under a rebate structure. These constraints mean that any additional administrative burden would require diverting resources away from patient care or contracting with external vendors, adding new costs to an already resourcelimited program. Combined with reduced and delayed 340B savings under a rebate modelfunds we rely on to support essential servicesthese factors would significantly impact our ability to participate without jeopardizing our capacity to meet community health needs. Page 10 of 25 340B Rebate Intake Form iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. A potential 340B Rebate Model Pilot Program could negatively impact patient access to medications by introducing delays, administrative barriers, and financial strain on our organization. Under a rebate model, savings would be realized only after lengthy processing and reconciliation rather than at the point of sale, reducing our ability to immediately reinvest those savings into medication assistance programs. This delay could limit our capacity to provide lowcost or nocost medications to uninsured and underinsured patients. Additionally, the increased administrative workload required to manage rebate processingcombined with new system, staffing, and vendor costsmay force us to scale back certain pharmacy support services, such as medication delivery, adherence programs, or care coordination. If the rebate model increases the number of drugs subject to complex eligibility validation or duplicate discount monitoring, some medications may become harder for patients to access quickly, particularly highcost therapies. These operational and financial pressures would occur while our organization experiences reduced and delayed 340B savings, which we rely on to maintain affordable access to essential medications. As a result, the rebate model could create real risks of reduced medication availability, longer wait times, and fewer support services for the vulnerable populations we serve. Field Response 2a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Payment timing under a potential 340B Rebate Model Pilot Programsuch as receiving rebate payments only after submitting complete claims and waiting up to ten calendar days or longerwould create significant cashflow challenges for our organization. Under the current upfront discount model, savings are realized immediately at the point of sale and can be reinvested right away to support medication access and patient services. A rebatebased structure would delay these funds, forcing us to absorb the full acquisition cost of medications upfront while waiting for reimbursement. This delay introduces real financial risk, particularly for highcost drugs and for a community health center operating on thin margins. The resulting cashflow strain would limit our ability to maintain medication assistance programs, support essential wraparound services, and respond to patient needs in real time. 2. Payment Timing & Potential Cash Flow Impacts for Covered Entities Page 11 of 25 340B Rebate Intake Form 2b.Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current wholesaler contracts, payment terms for 340B drugs typically allow for a standard payment windowgenerally 30 days from invoicewhich aligns with the terms applied to our non340B drug purchases. These terms provide predictable cashflow management under the existing upfront discount model, where the 340B price is applied immediately at the point of sale. Because the discount is realized upfront, we are not required to carry the full acquisition cost while awaiting reimbursement. Any shift to a rebatebased model would disrupt this stability by requiring us to pay the full drug cost within the same payment window but wait for rebate reimbursement later, creating significant cashflow strain for our organization. 2b.i.Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our current wholesaler agreements include prompt payment incentives that offer small percentage discounts when invoices are paid earlier than the standard payment window. These incentives are typically available when payment is made within 1015 days of the invoice date, compared to the standard 30day payment term. While the discounts are modest, they help support cashflow stability and reduce overall drug acquisition costs under the current upfront 340B pricing model. Any shift to a rebatebased structurewhere we must pay the full drug cost upfront and wait for reimbursementwould make it significantly more difficult to take advantage of these earlypayment incentives, further straining our cash flow and increasing our net drug costs. 2b.ii. State the average number of calendar days within which your organization typically remits payment under these contracts. On average, our organization remits payment to our wholesalers within approximately 2025 calendar days of the invoice date. This timeframe is consistent across both 340B and non340B drug purchases and aligns with our standard 30day payment terms. Maintaining this payment window is feasible under the current upfront discount model, where 340B savings are realized immediately. However, under a rebatebased modelwhere we would be required to pay the full drug acquisition cost upfront and wait for reimbursementthis payment timing would create significant cashflow strain for our organization. Page 12 of 25 340B Rebate Intake Form 2c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. A rebatebased payment model would significantly alter payment timing compared to our current wholesaler arrangements. Today, we benefit from upfront 340B discounts applied at the point of sale, allowing us to pay the reduced acquisition cost within our standard 2025 day payment window. Under a rebate model, however, we would be required to pay the full drug acquisition cost upfront and wait for reimbursement only after submitting complete claims and receiving rebate payments. This shift would create substantial cashflow challenges, particularly for highcost medications, and introduce financial risk for an organization operating on thin margins. While alternative payment arrangementssuch as extended payment terms or delayed invoicingcould theoretically help mitigate some of the cashflow strain, these options are not guaranteed, may not be offered by wholesalers, and would not fully offset the financial pressure created by delayed rebate payments. Ultimately, the rebatebased model would disrupt the predictable cashflow stability we rely on under the current upfront discount structure and could limit our ability to sustain medication access and essential patient services. 2d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Even with safeguards, a 10day payment requirement is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation required. Manufacturers typically operate on much longer rebate cycles, and expecting full review, verification, and payment within such a short window is operationally challenging. If the pilot were to mandate a 10day turnaround, it would require significant new infrastructure, strict enforcement mechanisms, and continuous monitoringyet still may not fully prevent delays. For covered entities, any deviation from the 10day requirement would create immediate cashflow strain, making timely and predictable payments essential but difficult to guarantee under a rebatebased model. 2e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Even with mechanisms in place, requiring manufacturers to pay rebates within 10 calendar days is not realistic given the complexity of rebate processing, the volume of claims, and the multiple layers of validation involved. Because covered entities must pay wholesalers within their standard payment windows, any delay beyond the 10day requirement would immediately create cashflow strain. To mitigate this, the pilot could consider alternative structures such as interim advance payments, partial prepayments, or guaranteed minimum payment timelines. While these options may help reduce financial risk, they would not fully eliminate the burden created by shifting from an upfront discount model to a delayed rebate modelespecially for communitybased providers operating on thin margins. Page 13 of 25 340B Rebate Intake Form Field Response 3a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. A rebatebased model would introduce additional layers of complexity and administrative burden, similar to the challenges already created by 340B ESP. That platform has demonstrated how manufacturerdriven data requirements can become opaque, inconsistent, and operationally disruptive for covered entities. A rebate model would replicateand likely expandthese same issues, adding new uncertainties around data validation, denial disputes, and payment timing. Given these risks, the potential for inappropriate denials, and the substantial administrative and financial strain this model would impose on communitybased providers, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine the stability of the 340B program and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. 3b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Even with these standardized elements in place, a rebatebased model would still impose significant administrative burden on covered entities. The denial and disputeresolution processes would add new layers of work, uncertainty, and operational risk. This model would also introduce unknown complexities, similar to the challenges already experienced with 340B ESP, where data submission requirements, inconsistent manufacturer responses, and opaque processes have created substantial strain on covered entities. A rebate model would replicateand likely expandthese same issues, making it difficult for communitybased providers to manage denials efficiently or predictably. Given the administrative burden, the risk of inappropriate or unsupported denials, and the likelihood of repeating the problematic dynamics seen with 340B ESP, our organization strongly recommends not proceeding with a 340B Rebate Model. The models complexity and unpredictability would undermine program stability and jeopardize our ability to maintain access to essential medications and services for the patients and communities we serve. Field Response 4. Data Collection By Covered Entities 3. Rebate Denials Process Page 14 of 25 340B Rebate Intake Form 4a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains 340B Program data through a combination of EHR and pharmacy systems, contract pharmacy data feeds, and a thirdparty administrator platform. We retain data for at least five years, maintain strict security and access controls, and conduct monthly internal audits on 100% of all claims to ensure accuracy and 340B compliance. This structured approach supports program integrity and ensures readiness for HRSA and manufacturer audits. 4b.Identify current measures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our organization ensures data accuracy, completeness, and consistency through a combination of automated system checks, routine reconciliations, internal and external audits, strong data governance practices, and continuous monitoring. These measures support program integrity, maintain audit readiness, and ensure compliance with HRSAs 340B Program requirements. 4c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be onetime or ongoing. A potential 340B Rebate Model Pilot Program would not simply change current data collection activitiesit would significantly expand them, creating a substantial and ongoing administrative burden. The pilot would require entities to collect, validate, reconcile, and report data at a level of granularity far beyond what is currently necessary. These added requirements would not be a onetime adjustment; they would represent a permanent intensification of data collection processes, demanding continuous operational resources, system modifications, and staff time. In effect, the pilot would magnify existing workflows and introduce new layers of complexity that must be maintained indefinitely. Page 15 of 25 340B Rebate Intake Form 4d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Significant system limitations exist in retrieving and standardizing pharmacy and medical claims data across both contract pharmacies and inhouse pharmacies. While certain data elements may technically exist within various systems, the ability to extract them in a consistent, validated, and linkable format is severely constrained by the fragmented nature of the technology landscape. There are multiple vendors, pharmacy management systems, and EMR platforms, each with different data structures, reporting capabilities, and interoperability limitations. As a result, a uniform or consistent process for pulling the required data simply does not exist today. Although data is currently being pulled to comply with 340B ESP requirements, the strictness and rigidity of those guidelines often exceed what is operationally realistic. Many of the required data elements are not captured in a single system, are not stored in the format demanded, or cannot be linked without extensive manual intervention. These strict and frequently unrealistic specifications make it extremely difficult to produce data that meets the required standards, especially across diverse systems and vendors. A potential 340B Rebate Model Pilot Program that relies on similar or expanded data elements would therefore face the same limitationslikely magnified. The data may be available in theory, but it is not readily retrievable in the manner or level of granularity envisioned. In many cases, the data is not currently furnished to third parties in the format required, and doing so would necessitate substantial system reconfiguration, manual reconciliation, and ongoing administrative effort. 4e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. A general recommendation would be to avoid moving forward with a 340B Rebate Model Pilot Program. The level of data sharing and patientspecific information required would inherently introduce privacy and security risks that are difficult to fully mitigate, even with additional agreements or safeguards. Given the complexity of the data environment and the number of parties involved, the most effective way to protect patient information is to refrain from implementing a model that necessitates such extensive data submission in the first place. Field Response 5. Duplicate Discount Prevention Page 16 of 25 340B Rebate Intake Form 5a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Prior to January 1, 2026, our organization uses a comprehensive set of practices to prevent duplicate discounts, including accurate MEF maintenance, correct Medicaid billing indicators, TPAbased exclusion of Medicaid claims, routine reconciliations, internal and external audits, and robust recordretention practices. These processes ensure that manufacturers do not pay both a 340B discount and a Medicaid rebate on the same drug dispense and that our organization remains fully compliant with HRSA and state Medicaid requirements. In addition, because we conduct a 100% claims audit and maintain a centralized Medicaid BIN/PCN/Group file, any Medicaidrelated claims identified during the monthly audit are immediately addressed. We promptly block the plan from the program and reverse out the affected claims, ensuring timely correction and preventing any potential duplicate discount exposure. 5b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Since January 1, 2026, and based on the limited information available regarding the Medicare Drug Price Negotiation Program (MDPNP), our organization has implemented operational changes to help prevent duplicate discounts on drug dispenses subject to a Maximum Fair Price (MFP). Specifically, we have adopted the practice of submitting all pharmacy claims with Submission Clarification Code (SCC) 20 to clearly identify 340B claims at the point of adjudication. This approach ensures transparency for payers and manufacturers and aligns with current guidance intended to prevent duplicate discounts. It is important to note that retail pharmacies receive the full rebate amount on these same claims, even when SCC 20 is used. Because of this, we strongly believe that 340B claims should not be excluded from receiving these rebates. Excluding covered entities from rebates while retail pharmacies continue to receive them would create an inequitable structure and undermine the intent of the 340B program, which is to support safetynet providers serving vulnerable populations. These operational adjustments have required additional administrative effort and recordmaintenance processes, and further changes would add to the burden already placed on covered entities. Ensuring that 340B claims remain eligible for rebates is essential to maintaining fairness and protecting the financial resources we rely on to serve our community. Page 17 of 25 340B Rebate Intake Form 5c. Describe your organizations experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non- duplication provisions of the MDPNP. Since January 1, 2026, our organization has attempted to comply with the nonduplication provisions of the MDPNP; however, our experience has shown that identifying drug dispenses for which we did not provide access to the MFP is extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claimlevel transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, crossreferencing multiple systems, and reconciling incomplete dataan effort that would demand several additional hours of administrative work on a recurring basis. For a communitybased provider operating with limited staffing and resources, this level of manual oversight is not sustainable. The current data limitations make compliance burdensome and introduce significant operational risk, as covered entities are held responsible for information they cannot reliably access or verify. 5d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). Since January 1, 2026, our organization has encountered significant challenges in identifying potential duplicate discounts across 340B and CMS payment programs, including Medicare and Medicaid. One of the most substantial barriers is the lack of complete and usable data within the Beacon platform, which does not provide the prescription (RX) numbera critical data element needed to accurately match claims. Without this information, it is extremely difficult to reconcile dispenses and determine whether a claim may be subject to a duplicate discount risk. To compensate for these gaps, we are forced to manually tie together information from Beacon, the MTF platform, and our internal pharmacy software. This process is cumbersome, highly laborintensive, and prone to timing mismatches, as each system operates on different data refresh cycles and provides varying levels of detail. Based on the current process and the limitations of available data, it would not be feasible for our organization to perform this reconciliation accurately or consistently without hiring a fulltime staff member dedicated solely to managing these tasks. These challenges highlight the urgent need for better, more complete, and more transparent data to streamline the reconciliation process. Without improved data visibility and standardized reporting across platforms, covered entities will continue to face significant operational burdens and compliance risks in attempting to prevent duplicate discounts. Page 18 of 25 340B Rebate Intake Form 5e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The minimum data elements necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs are straightforward and already wellestablished. In our view, a simple requirement for pharmacies to submit Submission Clarification Code (SCC) 20 on all 340B claims is sufficient for manufacturers to accurately identify these claims and prevent duplicate discounts. This approach is already widely used, operationally feasible, and supported by existing pharmacy system capabilities, which can automatically apply SCC 20 to every 340Bdesignated claim without additional burden. Because this mechanism already exists and functions effectivelymirroring the longstanding Medicaid Drug Rebate Program, which relies on clear claim identifiers rather than complex rebate structuresthere is no need to implement a 340B Rebate Model to achieve duplicatediscount prevention. The rebate model would not add meaningful value in this area and would instead introduce unnecessary administrative complexity, delays, and financial risk for covered entities. While the 340B Rebate Model Pilot Program could theoretically serve as an additional or alternative source of data, it would do so at the cost of creating new layers of operational burden, data reconciliation challenges, and uncertainty. These complexities are similar to those already experienced with platforms like 340B ESP, which have demonstrated how manufacturerdriven data processes can become cumbersome and disruptive for covered entities. For these reasons, we strongly recommend not proceeding with a 340B Rebate Model. Instead, CMS should rely on existing, proven modalitiessuch as universal SCC 20 submissionto identify 340B claims and prevent duplicate discounts in a streamlined, transparent, and minimally burdensome manner. Field Response 6. Reporting Requirements Page 19 of 25 340B Rebate Intake Form 6a. What specific data should manufacturers be required to submit (and to what frequency) for HRSAs review to ensure compliance with a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, manufacturers would presumably be required to submit detailed rebatepayment data, denial documentation, claimlevel identifiers, and reconciliation reports to HRSA on a routine basis. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it introduces unnecessary administrative burden, delays, and complexity without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable mechanism to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already used successfully within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim with no additional burden. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what reporting requirements manufacturers should follow under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive rebate reporting framework. 6b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to publicly report detailed rebatepayment data, denial rates, processing timelines, and compliance metrics on a regular basis to ensure transparency and accountability. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or reporting tool. For these reasons, the question of what manufacturer data HRSA should publicly report under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Page 20 of 25 340B Rebate Intake Form 6c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? If a 340B Rebate Model Pilot Program were implemented, HRSA would likely need manufacturers to submit detailed rebaterelated data on a recurring basispotentially monthly or quarterlyand maintain longitudinal reporting over the full duration of the pilot to assess compliance, payment timeliness, denial patterns, and overall program performance. However, our recommendation is to not proceed with a 340B Rebate Model at all, as it would introduce unnecessary administrative burden, complexity, and financial risk for covered entities without improving duplicatediscount prevention. Because existing modalitiessuch as universal use of Submission Clarification Code (SCC) 20already provide a clear, reliable, and widely adopted method to identify 340B claims, there is no need to create an entirely new rebatebased reporting structure. SCC 20 is already successfully used within the Medicaid Drug Rebate Program, and pharmacy systems can automatically apply SCC 20 to every 340B claim. This makes the rebate model unnecessary as a datacollection or monitoring tool. For these reasons, the question of what frequency or duration of manufacturer reporting HRSA should require under a rebate model does not meaningfully apply, as the rebate model itself is not needed. Instead, HRSA should strengthen and standardize existing mechanismssuch as SCC 20rather than layering on a new, complex, and resourceintensive reporting framework. Field Response 7. Program Integrity & Other Potential Benefits of a Rebate Pilot Page 21 of 25 340B Rebate Intake Form 7a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A potential 340B Rebate Model Pilot Program would not meaningfully change or improve the integrity of the 340B program. The core compliance requirements, eligibility standards, and statutory safeguards that govern 340B pricing would remain the same. Other than adding substantial new administrative work for covered entities, the rebate model would not alter or strengthen program integrity in any meaningful way. In fact, shifting from an upfront discount model to a rebatebased structure would introduce additional operational complexity, new datasubmission requirements, and increased reconciliation workload, all of which create more opportunities for errors, delays, and disputes. These added layers do not enhance program integritythey simply make participation more burdensome for safetynet providers. Given that the rebate model does not improve integrity and instead adds administrative strain, our organization does not support moving forward with a 340B Rebate Model Pilot Program. Strengthening existing mechanismsrather than creating a new, complex rebate structurewould be a more effective and less disruptive approach. 7b.i. Explain whether a rebate-based model would: Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs No, a rebatebased model would not assist manufacturers in avoiding duplicate discounts under the 340B and CMS payment programs. The rebate structure does not provide any additional clarity or operational advantage for identifying 340B claims. Instead, it introduces new layers of administrative work, delays, and reconciliation challenges for covered entitieswithout improving manufacturers ability to prevent duplicate discounts. As stated previously, alternative mechanisms already exist that are far more effective and significantly less burdensome. The most straightforward and reliable solution is the universal use of Submission Clarification Code (SCC) 20 on all 340B claims. This approach is already wellestablished, mirrors the process used in the Medicaid Drug Rebate Program, and can be fully automated within pharmacy systems. SCC 20 provides manufacturers with a clear, consistent claim identifier, enabling them to avoid duplicate discounts without requiring a rebate model. A rebatebased model would only add unnecessary strain and administrative workload to covered entities while offering no meaningful improvement in duplicatediscount prevention. For these reasons, our organization does not support moving forward with a 340B Rebate Model and instead recommends strengthening existing, proven modalities such as SCC 20. Page 22 of 25 340B Rebate Intake Form 7b.ii. Reduce diversion or improper claims A rebatebased model would not reduce diversion or improper claims within the 340B program. Diversion prevention is driven by clear eligibility rules, accurate patient and provider documentation, and strong internal compliance processesnot by the payment mechanism used to deliver 340B savings. Shifting from an upfront discount to a rebate structure does nothing to change these underlying requirements. In fact, a rebate model could introduce additional administrative complexity, new reconciliation steps, and more opportunities for data mismatches or processing errors. These added layers do not prevent diversion; they simply increase the operational burden on covered entities without improving program oversight or accuracy. For these reasons, a rebatebased model would not reduce diversion or improper claims and would not strengthen program integrity. Strengthening existing compliance frameworksnot replacing the current pricing modelis the more effective and less disruptive approach. 7b.iii. Increase pricing transparency across stakeholders. A rebatebased model would not increase pricing transparency across stakeholders in the 340B program. The rebate structure does not provide additional visibility into drug pricing, acquisition costs, or manufacturer discount practices. Instead, it shifts the timing of the price benefit and adds new layers of reconciliation, data submission, and payment processingnone of which enhance transparency for covered entities, manufacturers, or payers. In fact, a rebate model could make transparency more difficult, as stakeholders would need to navigate delayed payments, complex denial rationales, and inconsistent data across multiple platforms. These added steps obscure rather than clarify the true cost of medications and the timing of discounts. For these reasons, a rebatebased model would not improve pricing transparency and would instead introduce additional administrative burden without delivering meaningful benefits. Strengthening existing mechanismsnot replacing the current upfront discount modelis the more effective and transparent approach. Page 23 of 25 340B Rebate Intake Form 7c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden. To strengthen the integrity of the 340B Program while minimizing administrative burden, improvements should focus on simplifying and standardizing existing datacollection practices, rather than creating new, complex reporting structures. The most effective and least burdensome enhancement would be the universal and consistent use of Submission Clarification Code (SCC) 20 on all 340B claims. This single data element provides a clear, automated, and reliable method for identifying 340B transactions across payers and manufacturers. A simple SCC 20 requirement would eliminate the need for additional administrative work, reduce reconciliation challenges, and provide manufacturers with the information they need to prevent duplicate discountswithout imposing new reporting obligations on covered entities. Pharmacy systems already have the capability to automatically apply SCC 20, making this approach both practical and scalable. Page 24 of 25 340B Rebate Intake Form 7d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A 340B Rebate Model Pilot Program would not provide meaningful additional benefitssuch as improved transparency or stronger audit compliancebeyond what already exists in the current 340B framework. The 340B Program has been in place since 1992, and over more than three decades, covered entities have developed robust internal audit processes, undergone external independent audits, and participated in HRSA audits that thoroughly evaluate compliance. As a result, program integrity is already wellestablished without the need for a rebatebased structure. Introducing a rebate model would not enhance these safeguards. Instead, it would add significant administrative burden, delay the timing of savings, and create new operational complexities that do not strengthen compliance. In fact, with the 340B program increasingly targeted by manufacturers through restrictions and datacollection demands, the reduced savings to covered entities could make it harder over time to maintain the strong internal audit and compliance infrastructure that currently exists. Shrinking resources directly underminenot enhancethe ability of safetynet providers to sustain rigorous oversight. Given these realities, the potential benefits of a rebate model do not outweigh the substantial costs and risks. Rather than layering on a new, complex rebate structure, our recommendation is to roll the program back to its original state, where covered entities receive the statutory ceiling price at the point of sale. If program compliance is a concern, we would welcome manufacturers having the ability to audit covered entities in the same manner that HRSA audits the programa transparent, structured, and welldefined process that already works effectively. A rebate model does not improve integrity, transparency, or accountability. It only adds burden and reduces the resources that safetynet providers rely on to serve vulnerable patients. Page 25 of 25
HRSA-2026-0001-2122Tri-Cities Community Health2026-04-20T04:00Z48,228 chars
See attached file(s) Tri-Cities Community Health urges HRSA to exempt Community Health Centers from any 340B rebate programs. Please see full comment in the file. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Tri-Cities Community Health (TCCH), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs are reporting the potential loss of millions annually and high reductions in 340B savings as the costs for monitoring the program will increase under a rebate model. TCCH projects an increase 340B Program administrative cost of $853,653 and approximately over $2 million loss in savings annually. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Tri-Cities Community Health is a medium sized FQHC comprised of 7 clinic locations, with 3 in-house pharmacies, two mobile medical units and one mobile dental clinic. It is located in southeastern Washington that serves 29,113 unique patients over 38 zip codes, 22% uninsured, 46% Medicaid and 6% Medicare. We provided $4,478,989 in sliding fee discounts to patients in the 2025 calendar year. Our services include Primary care, including walk-in services, Pediatrics, OB/Gyn, Dental, WIC/MSS, Behavioral Health, Vision, Clinical Pharmacy and Retail pharmacy. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Tri-Cities Community Health in particular, this means it will impact: 117,351 prescriptions/transactions and 29,113 patients served Increase our administration costs significantly by $853,653 annually Reduce savings by approximately $2 million Our organization passes savings on directly to all of our sliding fee eligible patients, charging them a nominal fee ($0 to $11) plus the acquisition cost of the drug which allows them to purchase their medications at a rate they can actually afford. Additional savings goes towards supporting underfunded programs such as behavioral health, SUD, community health workers, and clinical pharmacy services and vaccinations for uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Tri-Cities Community Health provided $4,478,989 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Tri-Cities Community Health anticipates needing 3.2 FTEs that equates to an additional $321,565 in wages annually, in addition to the current 3.7 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Tri-Cities Community Health anticipates an increase of $58,174 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 At TCCH we have estimated that we will need an additional 3.2 FTEs to assist with the management of the requirements of the 340B program. We have already had an extensive increase in workload managing the 340B program with the manufacturer policy requirements of data submissions and data validation processes, creating the need for an additional pharmacy analyst position, additional finance staff time, additional pharmacy management time and increasing the amount of time leadership spends on data analysis by 0.2 FTE, which results in an increased FTE time of 3.2. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At TCCH we estimate an additional upfront cost of at least $75,000 for recruitment and training for each newly hired employee. In addition to the recruiting/training costs, the salaries of the employees needed for burden of the rebate program will increase labor costs approximately $321,565 annually for the roles it will require to maintain compliance and monitoring Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. It is estimated that will require a minimum of 8 hours per week to upload rebate claims data, an additional 30-40 hours per week per platform (MTF/MFP Beacon/340B Rebate platform monitoring, 40-60 hours per week investigating issues and reconciling claims data, and 20-30 hours of managing software updates to ensure appropriate data is captured, and 10-20 hours per week of management and financial oversight. This estimated additional time will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans, the lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Tri-Cities Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 29,113 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $853,653 annually and does not include the lost savings of over $2million dollars and increased cost of obtaining the drugs our patients need. . . The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This will create additional costs for building financial reporting and reconciling accounts. With our slide fee patients, we pass on savings directly to our patients based on the 340B acquisition cost. If we are forced to purchase at WAC then we would have to bill our slide fee patients WAC + the nominal fee (for our organization it is $0 to $11) resulting in the loss of the 340B discount to our patients. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. TCCH anticipates spending about $15,000 in work hours to implement the changes needed for a rebate program with our inhouse pharmacy software vendor. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 42 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 3 TPAs for 42 different pharmacy locations to ensure rebates are paid correctly. 7 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Tri-Cities and surrounding area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At TCCH our slide patients are only charged a nominal fee based on family size and income ($0 to $11) plus the acquisition cost of the drug per our policies, however with a rebate model our acquisition cost will go up to WAC price and we would not be able to pass on the 340B saving directly to our uninsured and underinsured patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3.94 million annually in 2026 and $6.56 million annually in 2027 to purchase these 10 drugs under the proposed rebate model, this includes interest charged by the wholesaler when not paid by 7 days while awaiting rebate from manufacturers. Currently, our organization spends $206,446 annually (for 2026) to purchase these same drugs at the 340B ceiling price. This represents a 655,191% in 2026 and 418747% in 2027 increase respectively in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Tri- Cities Community Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as vaccinations to the patients that qualify for a slide, clinical pharmacies services that specialize in chronic disease state management, community health worker services that assist patients to navigate our health institutions and locate resources, our behavioral health and substance use disorder providers. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or time with a clinical pharmacist, or behavioral health specialist. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,404 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. 11 Tri-Cities Community Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Tri- Cities Community Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 1,016082.11. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Tri-Cities Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 323,193.22 in 2026, $535,855.61 in 2027 and $558,041.19 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $ 58,174.78 annuallyfunds that are currently dedicated to Clinical Pharmacy services, community health worker services, behavioral health services and our patient discount for prescription medications. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Tri-Cities Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Tri-Cities Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based 12 on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $596,212.58 in 2026, $1,016,082.11 in 2027 and $1,067,300.57 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. A rebate model would also create issues with cash flow. When purchasing drugs at WAC, our 30 day cash on hand spend would increase by $323,193 each month in 2026 up to $558,041 monthly in 2028. If we are not able to pay weekly for our products, we incur interest on our wholesaler accounts. There is also a risk that full package sizes may not be used and a rebate would never be issued, or the product purchased at WAC would expire prior to dispensing and we would not receive credit for the product purchased at full WAC price. If purchased at 340B prices, the financial burden of shrink or loss would be minimized. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 14 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Tri-Cities Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Tri-Cities Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Tri-Cities Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Regina Ahl, Director of Pharmacy (rahl@mytcch.org) Sincerely, Elizabeth Rice Chief Compliance Officer Tri-Cities Community Health
HRSA-2026-0001-2123(no commenter metadata)2026-04-20T04:00Z87,028 chars
As a federally qualified health center, we strongly urge HRSA to exempt health centers from the rebate if it proceeds. Our detailed comments are attached. In summary, the rebate pilot would: Decrease access to important medications for patients; Endanger our financial viability and decrease access to primary care for the medically underserved; increase overall health care costs and administrative burden. Please consider removing health centers from the rebate pilot. Sincerely, Katherine McLeod CEO, First Choice Primary Care April 20, 2025 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of First Choice Primary Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to analyze the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: First Choice Primary Care (FCPC) anticipates a loss of $150,000 to 350,000 from entity-owned pharmacy operations and a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. System-wide increase in complexity and administrative burdens: covered entities will bear the brunt of the increased administrative cost, but all levels of the pharmaceutical industry will add new systems, people and opportunities for errors. At a time when the cost of healthcare is top of mind for the American public, and particularly our medically underserved patients, we suggest that choosing to add this cost and complexity is not in the publics interest. Our health center serves the Central Georgia region. As a non-expansion state, we have a larger uninsured population, making access to 340b drugs even more important for our patients. We receive 330(h) funding in addition to our regular community health center 330 funds and provide care at a homeless day center operated by a faith based organization. They are only able to assist their participants with their medications because of the reduced cost to them through the 340b program. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to the financial viability of our small health center. Since we opened our doors in 2007, the 340B program has allowed us to 2 purchase outpatient medications at significantly reduced prices, and to reinvest the savings in our programs. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 12,000 patients that depend on us for their health care. In the last five years, we have been able to open two entity-owned pharmacies that have been critically important to our patients and to the financial viability of our organization. Our pharmacist are actively involved in patient care, counseling patients, and practicing clinical pharmacy. That would not be possible without the 340b savings. This is one example of how we reinvest those funds. We also provide free home delivery from our pharmacies, which helps our patients with transportation challenges. We have a large Medicare and dual eligible patient population that has difficulty with transportation. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambil Care Manage. 2012 Jan-Mar;35(1):50-9. Doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thrombi Haemost. 2021 Sep;19(9):2322-2334. Doi: 10.1111/jth.15415. Pub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deu tetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. Doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: FCPC provided $3.75M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: FCPC anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, FCPC anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 5 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We anticipate additional staff time needed with both pharmacy and accounting expertise. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For 2026 alone, FCPC expects $840K increased upfront spending, with an anticipated 44% increase in annual drug spend. For 2027, that more than doubles to a 105% increase in upfront drug spending. Instead of spending a projected $582K on MFP drugs, we would have to spend over $2M. That is simply not sustainable in our current financial position. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. One of our pharmacies is quite busy for a health center our size, averaging over 300 prescriptions a day. We think that for our two in-house pharmacies an additional 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. FCPC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We really are not clear about the additional costs, but it is likely to be substantial. Based on previous experience, we think $40K - $60K at a minimum will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costs, is estimated at $350,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Because we operate our own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. FCPC currently partners with over twenty contract pharmacies to increase access to affordable medications. Hundreds of our patients live in outlying rural areas, and these contract arrangements offer them better access to pharmacy services. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Georgia with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make tough decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact our ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 health care services, including medications, based on a patients income and family size. FCPC makes drugs available at the 340b purchase price plus a small dispensing fee, which is based on a sliding fee scale. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The budgetary impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the fiscal impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $839K to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $143K to purchase these same drugs at the 340B ceiling price. This represents an almost 6 fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, FCPC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as outreach services to our homeless and unstably housed residents at resource centers and respite programs. Operating Hours: We anticipate needing to reduce our clinic hours by at least 5 hours per week, specifically impacting our Saturday clinic, which has been successful at making care available to many of our working patients. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 ability to fund an outreach specialist who offers enabling services and helps connect patients to resources, or behavioral health provider. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. FCPC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, FCPC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $2M for 2027 and $2.2 M for 2028 MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be tens of thousands annuallyfunds that are currently dedicated to homeless outreach, medically assisted treatment programs for the uninsured, clinical pharmacy and pharmacy education for our senior patients, and help with Medicaid eligibility. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on First Choice Primary Care, the risk of 11 our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays FCPC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, we take a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a significant net annual loss of an estimated $130,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill our mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, explicitly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 13 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion FCPC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make tough decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. FCPC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. FCPC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at kmcleod@fcpcga.org Sincerely, 14 Katherine McLeod, MSPH Chief Executive Officer April 20, 2025 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of First Choice Primary Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to analyze the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: First Choice Primary Care (FCPC) anticipates a loss of $150,000 to 350,000 from entity-owned pharmacy operations and a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. System-wide increase in complexity and administrative burdens: covered entities will bear the brunt of the increased administrative cost, but all levels of the pharmaceutical industry will add new systems, people and opportunities for errors. At a time when the cost of healthcare is top of mind for the American public, and particularly our medically underserved patients, we suggest that choosing to add this cost and complexity is not in the publics interest. Our health center serves the Central Georgia region. As a non-expansion state, we have a larger uninsured population, making access to 340b drugs even more important for our patients. We receive 330(h) funding in addition to our regular community health center 330 funds and provide care at a homeless day center operated by a faith based organization. They are only able to assist their participants with their medications because of the reduced cost to them through the 340b program. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to the financial viability of our small health center. Since we opened our doors in 2007, the 340B program has allowed us to purchase outpatient medications at significantly reduced prices, and to reinvest the savings in our programs. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 12,000 patients that depend on us for their health care. In the last five years, we have been able to open two entity-owned pharmacies that have been critically important to our patients and to the financial viability of our organization. Our pharmacist are actively involved in patient care, counseling patients, and practicing clinical pharmacy. That would not be possible without the 340b savings. This is one example of how we reinvest those funds. We also provide free home delivery from our pharmacies, which helps our patients with transportation challenges. We have a large Medicare and dual eligible patient population that has difficulty with transportation. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: FCPC provided $3.75M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: FCPC anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, FCPC anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate additional staff time needed with both pharmacy and accounting expertise. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For 2026 alone, FCPC expects $840K increased upfront spending, with an anticipated 44% increase in annual drug spend. For 2027, that more than doubles to a 105% increase in upfront drug spending. Instead of spending a projected $582K on MFP drugs, we would have to spend over $2M. That is simply not sustainable in our current financial position. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. One of our pharmacies is quite busy for a health center our size, averaging over 300 prescriptions a day. We think that for our two in-house pharmacies an additional 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. FCPC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We really are not clear about the additional costs, but it is likely to be substantial. Based on previous experience, we think $40K - $60K at a minimum will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costs, is estimated at $350,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration Because we operate our own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. FCPC currently partners with over twenty contract pharmacies to increase access to affordable medications. Hundreds of our patients live in outlying rural areas, and these contract arrangements offer them better access to pharmacy services. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Central Georgia with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make tough decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact our ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. FCPC makes drugs available at the 340b purchase price plus a small dispensing fee, which is based on a sliding fee scale. We are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The budgetary impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the fiscal impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $839K to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $143K to purchase these same drugs at the 340B ceiling price. This represents an almost 6 fold increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, FCPC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as outreach services to our homeless and unstably housed residents at resource centers and respite programs. Operating Hours: We anticipate needing to reduce our clinic hours by at least 5 hours per week, specifically impacting our Saturday clinic, which has been successful at making care available to many of our working patients. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund an outreach specialist who offers enabling services and helps connect patients to resources, or behavioral health provider. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,000 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. FCPC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, FCPC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by over $2M for 2027 and $2.2 M for 2028 MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be tens of thousands annuallyfunds that are currently dedicated to homeless outreach, medically assisted treatment programs for the uninsured, clinical pharmacy and pharmacy education for our senior patients, and help with Medicaid eligibility. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on First Choice Primary Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays FCPC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, we take a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a significant net annual loss of an estimated $130,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill our mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, explicitly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion FCPC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make tough decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. FCPC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. FCPC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at kmcleod@fcpcga.org Sincerely, Katherine McLeod, MSPH Chief Executive Officer
HRSA-2026-0001-2124AtlantiCare Regional Medical Center Inc.2026-04-20T04:00Z11,750 chars
HHS Docket No. HRSA-2026-03042 Sensitivity: Public April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: AtlantiCare Regional Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of AtlantiCare Health Park 2500 English Creek Avenue, Egg Harbor Township, NJ 08234 Phone: 1-888-569-1000 Sensitivity: Public consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non- 340B prices to assist with policing manufacturers commercial agreements. At a minimum, Sensitivity: Public manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. Our organization operates under a physical inventory model in outpatient settings that provides full price transparency at the point of dispense, allowing us to pass 340B savings directly to patients in real time. Transitioning to a rebate-based model would eliminate this visibility, requiring us to purchase medications at higher upfront costs without certainty of final pricing. This not only creates financial strain but also limits our ability to offer immediate discounts, ultimately shifting burden to patients and delaying access to affordable medications. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. Sensitivity: Public With rebates applying across all hospital settingsnot just contract pharmacy, the administrative burden and financial risk would increase greatly. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Our organization has already had to dedicate significant time and resources to operationalizing rebate-related requirements, including submitting claims data, tracking rebate receipt, and triaging issues related to data submission and payment discrepancies. These activities require ongoing coordination across pharmacy, finance, and IT teams and represent a meaningful administrative burden. Expansion to a broader rebate model would substantially increase this burden. We anticipate the need to reallocate existing staff time away from direct patient care and operational responsibilities to manage rebate submissions, reconciliation, and dispute resolution, with the potential need for additional FTEs or external vendor support. This would include work related to validating data submissions, auditing rebate payments, addressing denials with manufacturers and their vendors, and pursuing appeals through HRSAs ADR process. Unlike IRA/MFP requirementswhich are more limited in scopea rebate model would apply across all payers and settings, significantly increasing volume and complexity. As a result, these activities would represent ongoing and significant operational costs, diverting resources from patient care and core pharmacy services. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include reduced ability to provide point-of-sale patient discounts, increased financial burden on uninsured and underinsured patients, and a decline in uncompensated care support. Additionally, funds that are currently reinvested into expanding clinical services, adding new specialty programs, and supporting hospital operations may be redirected to cover administrative and cash flow demands associated with rebates. This could delay capital improvements, limit growth of ambulatory and specialty pharmacy services, and ultimately impact timely access to high-quality care for our patients. Sensitivity: Public HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Steven Moscola AVP Ambulatory Pharmacy Services AtlantiCare Regional Medical Center 1925 Pacific Ave Atlantic City, NJ 08401
HRSA-2026-0001-2125Erie Family Health Centers2026-04-20T04:00Z33,068 chars
Please see attached comments. April 20, 2026 Ms. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Re: HRSA-2026-03042, Request for Information: 340B Rebate Model Pilot Program Dear Director Britton, On behalf of Erie Family Health Centers, I would like to thank you for your interest in the critically important 340B Drug Pricing Program. We appreciate the opportunity to provide feedback on your plans for a 340B Rebate Model Pilot Program. We are writing to urge you to exempt health centers from the rebate pilot, or, at a minimum, implement safeguards to mitigate the clear harm of the proposed pilot. Erie Family Health Centers (Erie) is a Federally Qualified Health Center (FQHC) with fourteen locations in Chicago and the surrounding suburbs. Erie provides high-quality medical, dental, and behavioral healthcare to all who need it, regardless of their ability to pay. Erie serves approximately 96,000 patients annually. Community Health Centers, including Erie, participate in the 340B Drug Pricing Program (340B Program) as a vital means of making prescriptions affordable for our low- income patients, while also providing financial support for the care provided by the health center. At Erie, we reinvest every penny of 340B savings into expanding care for our medically underserved patients. Law, regulation, and mission require us to utilize 340B savings to provide more comprehensive care to a greater number of eligible patients. Erie patients have chronic conditions, exacerbated by economic challenges. We know that improving health outcomes depends on Erie providing comprehensive care and case management, integrated psychiatry services, behavioral health services, dental care, health coaches, and a range of other essential services. Without 340B savings, Erie would not have the funds to support these programs many of which are not reimbursed. Community Health Centers are proud of our reputation as good stewards of the 340B program, and we appreciate this opportunity to provide feedback on the 340B Rebate Model Pilot Program. We acknowledge that you will receive a high volume of comments on this pilot program. To ensure clarity and conciseness, we will aim to keep our comments concise and reference other submissions where appropriate. You will be receiving comments from our national trade association, the National Association of Community Health Centers (NACHC). Erie agrees with NACHCs comments on the rebate model pilot program, and many of NACHC's arguments have informed our response. We appreciate that HRSA is seeking feedback from stakeholders on the 340B rebate model pilot program, as it would be a massive disruption to how stakeholders currently participate in the 340B program. Thank you for identifying targeted areas and topics for stakeholders to comment on. We will proceed with responding to as many of those topics as our current information and resources allow. 1. Costs to Covered Entities CURRENT ADMINISTRATIVE COSTS UNDER THE UPFRONT 340B DISCOUNT: Erie is proud to serve 96,000 patients with high-quality primary medical, dental, and behavioral healthcare, regardless of the patients ability to pay. In fiscal year 2025, Erie served patient pharmaceutical needs through 123,531 individual 340B transactions. Erie is dedicated to 340B Program compliance and invests in personnel and software resources to support our 340B operations. The current administrative costs of our program are proportional to the number of claims captured. Key cost drivers for current administrative costs include third-party administrator (TPA) fees, contract pharmacy dispense fees, external compliance audits, 340B consulting, and internal personnel resources. The proposed 340B Rebate Model Pilot Program poses a fundamental challenge to the mission of Community Health Centers (CHCs) and departs significantly from the programs original purpose. For over three decades, the 340B Drug Pricing Program has helped CHCs secure outpatient medications at steep discounts, allowing them to expand access to affordable, and in some cases no-cost, treatment for millions of underserved and uninsured individuals. Congress established the program with the clear goal of enabling safety-net providers to stretch scarce Federal resources as far as possible. The rebate model threatens to erode this foundation by imposing substantial financial strain on CHCs such as Erie. ADMINISTRATIVE COSTS UNDER A POTENTIAL 340B REBATE MODEL PILOT PROGRAM: The proposed 340B Rebate Model Pilot Program would impose both financial strain and an added layer of unnecessary administrative complexity on Community Health Centers (CHCs), such as Erie. Rather than streamlining operations, the model would duplicate and significantly complicate existing processes and require Erie to take on new compliance responsibilities. For this reason, HRSA should exclude CHCs from the pilot. Findings from recent NACHC analysis show that participating in the rebate model would force CHCs to expand staffing and invest in new or enhanced IT systems to manage a patchwork of manufacturer- specific requirements. This includes handling varied data reporting standards, tracking submission deadlines, reconciling payments, and addressing denied rebate claims. These demands go well beyond current administrative obligations. In practice, CHCs would need to navigate challenges similar to those already posed by contract pharmacy limitationsonly with added complexity on top of managing those time-consuming existing requirements. For health centers like Erie, with a large prescription volume, a sizeable effort would be required to monitor rebate activity and ensure accurate reimbursement, further stretching already limited operational resources. To meet that additional administrative effort, Erie would need to increase its 340B personnel resources. STAFFING IMPACTS UNDER A POTENTIAL 340B REBATE MODEL PILOT PROGRAM: The shift to a rebate-based model would significantly increase Erie's operational demands, particularly in tracking rebate activity and ensuring accurate payment reconciliation. Erie projects that submitting 340B rebate data through an external platform and monitoring payments will take roughly 20 hours per week, assuming the manufacturers have relatively similar processes and platforms. To absorb this additional workload, Erie anticipates the need to expand its 340B team. Erie plans to add an additional staff resource (0.5 FTE) to our 340B team, focused entirely on managing rebate-related responsibilities. The estimated annual expense for this additional staffing resource is $50,000. This increased administrative overhead and additional staff resources would pull capacity away from essential management of the program. Inconsistent requirements and the absence of a standardized approach across manufacturers will likely require Erie to rely on multiple internal systems to track, manage, and report identical data, driving up costs and complicating operations. To reduce these challenges, Erie strongly encourages HRSA to establish uniform requirements for participating manufacturers in order to mitigate both the administrative workload and financial strain associated with securing timely and accurate 340B rebate payments. SYSTEMS AND INFRASTRUCTURE FOR IMPLEMENTATION OF A POTENTIAL 340B REBATE MODEL PILOT PROGRAM: Participating in this pilot would demand more than additional personnelit would necessitate substantial modifications to pharmacy systems and Third-Party Administrator (TPA) processes. Erie urges HRSA to account for the heightened compliance challenges that arise when manufacturers are permitted to set differing data submission requirements and formats. Furthermore, if manufacturers continue to use separate software platforms, as is common under current contract pharmacy arrangements, CHCs will face a significantly heavier administrative load managing multiple systems and workflows. We do not yet know what additional service costs our contract pharmacy partners and TPAs will charge under a future rebate model, but we do know the real financial harm that Erie faced immediately prior to the Rebate Model Pilot Program's pause on December 31, 2025. Our largest contract pharmacy partner is Walgreens. Our service area includes Chicago and the surrounding suburbs, and most of our patients choose to fill their prescriptions at Walgreens. Erie has built our longstanding 340B contract pharmacy relationships with Walgreens to provide access and break down barriers that might otherwise prevent patients from accessing affordable drugs. Prior to the pause, Walgreens (and its TPA 340B Complete) were not ready to operationalize a rebate model and we were forced to exclude the ten rebate model drugs across all payers, not just Medicare Part D, but also commercial and uninsured patients. During the lead-up to the original rebate model pilot, tens of thousands of Erie patients were no longer able to access an upfront discount on one of the ten rebate model drugs, should they need that treatment. Beyond the harmful impact on uninsured patient access, Erie stood to lose $86,000 per month ($1,032,000 annually) in 340B savings, all because the TPA systems were unable to respond, react, and reconfigure to meet the extraordinarily different technology needs of a rebate model. In anticipation of this previous 340B Rebate Pilot Program, Eries clinical and pharmacy support staff had to spend dozens of hours to educate more than 700 patients and hundreds of our providers about the pending loss in 340B pricing at our largest 340B contract pharmacy partner, Walgreens. Specifically, Eries staff was required to execute this patient and prescriber training and communication plan within just a few weeks since Walgreens announced that they were removing 340B pricing on the drugs in-scope for this rebate program by December 23, 2025. Then compounding this complication for our patients and providers was that after the Federal Court in Maine issued an injunction to pause this previous rebate program, Eries staff during the New Years holiday week had to inform these 700+ patients and all of our providers that for the time being, patients would have to access to 340B pricing for these drugs at Walgreens. The rapid back-and- forth among patients, providers, and pharmacies created a chaotic environment for our patients, providers, and administrative staff. We believe this rebate-related disruption may have caused gaps in patients' access to their medications. OTHER ANTICIPATED COSTS OR IMPACTS OF A POTENTIAL 340B REBATE MODEL PILOT PROGRAM: Unfortunately, a rebate model will likely make it extremely challenging for CHCs to adhere to their long-standing policyand President Trumps and the Administrations expectationsthat they pass on 340B savings to low-income patients. Erie is proud to extend the 340B discount directly to our uninsured and underinsured patients. It has been disheartening to hear critics of the program say that patients do not benefit from the 340B program, because nothing could be further from the truth for our patients. Erie patients benefit from access to discounted drugs. Since Eries earliest participation in the 340B Program, we have made discounted medication accessible and affordable for our uninsured patients. Erie patients benefit from the comprehensive programs and services funded through 340B savings. On an average month, Erie processes more uninsured claims than insured claims through our 340B program. Erie has thousands of patients directly benefiting from 340B-discounted medications through our contract pharmacies. A rebate model will threaten Eries ability to offer 340B discounts to uninsured and underinsured patients at the point-of-sale. This means that patients will no longer be able to access the impacted drugs at an affordable cash price. A rebate model obstructs health centers' ability to pass 340B savings along to low-income patients. This is because standard pharmacy software displays only one price per NDC code, the price charged by the wholesaler. To date, this has always been the 340B price, but under a rebate model, our wholesaler catalog price will switch to the WAC price. As a result, if we are subject to the rebate pilot, pharmacy staff and software systems will no longer have access to the 340B price, and without this information, cannot pass 340B savings onto low-income patients at the point of sale, because they do not know what the savings are. There is no easy or quick technical fix to this issue as it is an inherent flaw in the rebate model structure. Due to Eries extensive urban service area of over 200 zip codes and lack of an entity-owned pharmacy, Erie is entirely reliant on contract pharmacies for 340B access. With current systems and software, it is not operationally feasible to offer cash 340B discounts at the point-of-sale under a rebate model because the software will not know the 340B ceiling price, particularly at contract pharmacies. Additionally, offering upfront 340B discounts to uninsured patients will now expose Erie to significant risk if subsequent rebates are denied. Any form of a rebate model pilot program does a grave disservice to the millions of low-income patients served by our nation's community health centers. This is because a rebate model prevents health centers like Erie from operationalizing point-of-sale cash discounts due to the inherent risk of not receiving a rebate payment. As noted, since its inception, Congress did not intend for the 340B Program to be subject to manufacturer-driven rebates nor was it intended for covered entities to face such financial and operational burdens. It is challenging to foresee the myriad costs and impacts of a future program, but we can make some smart guesses based on: Eries prior experience preparing for the now-paused rebate pilot in late 2025. Eries efforts from the past five years of navigating manufacturer contract pharmacy restrictions. Since August 2025, Erie has spent over $7,000 on consulting services specifically related to the proposed rebate model. Erie has robust internal 340B personnel resources, but a change of this magnitude has required additional consulting support and many hours of educational webinars. Instead of focusing on patient care or other tasks that benefit our patients' access to healthcare: o Eries 340B team spent multiple hours per week attending webinars from Beacon Channel Management (Beacon) and other resources. o Poring over details posted on the HRSA webpage and Beacon resources webpage. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities Erie is especially concerned that having to purchase medications at full wholesale acquisition cost (WAC) could strain cash flow, exceed our credit limits with wholesalers, and stress our payment processing and financial processes organization-wide. Although rebate payments are projected in the RFI document to be issued within 10 days of complete data submission, covered entities cannot be expected to submit detailed claims data every day; thus, the previous version of the pilot allowed up to 45 days for submission. As a result, the total time between dispensing a medication and receiving the rebate could stretch to as long as 55 days. To align with the current manufacturer contract pharmacy restriction administrative burden, Erie would likely submit rebate data every two weeks. Submitting data every other week would mean Erie waits between 11 and 25 days for a rebate payment, assuming everything goes smoothly. Our national organization, NACHC, created a calculator to help us assess the anticipated financial impact of a rebate model, specifically for Erie. Financial data and projections utilize CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of Medicare Drug Price Negotiation Program (MDPNP) selected drugs by NDC. Based on our organizations data, we estimate it would cost Erie $520,000 monthly ($6,240,000 annually) to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $20,000 per month to purchase these same drugs at the 340B ceiling price. This represents a 2,500% increase in upfront capital required to purchase 340B drugs under a rebate model. Erie cannot easily absorb a $500,000 increase in drug cost each month. We would be forced to make hard decisions, such as scaling back crucial services noted above, such as comprehensive care and case management, integrated psychiatry services, behavioral health services, dental care, health coaches, and a range of other essential services. Erie currently receives prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs cannot disclose their exact prompt-pay discount. However, Erie estimates its 2027 annual rebate opportunity cost to nearly $1.3 million. This cost aggregates the estimated financial impact of rebate denials and loss of wholesaler purchase discounts. Each dollar spent upfront at WAC becomes tied up in the manufacturers reconciliation process, effectively limiting access to those funds. While awaiting rebate payments, we lose the financial flexibility needed to respond quickly to urgent public health needs or unexpected operational issues. To manage under a rebate structure, our organization would have to draw from already limited reserves. This kind of financial strain would quickly ripple through our operations, resulting in fewer available services, and a diminished capacity to offer the deeply discounted medications our patients rely on. 3. Rebate Denials Although the request for information (RFI) text implies that rebate denials could be limited and that the manufacturer could be required to provide rationale and documentation for such denials, we have no assurance that this would be the case. Erie implores HRSA that if any rebate model is allowed to move forward, manufacturers and their rebate platforms must have very specific guardrails around when it is appropriate to deny a rebate request. Any rebate denials must follow existing statutory and regulatory guidance. Rebate requests should be assumed valid unless a manufacturer can clearly prove, with claim-level evidence, a specific legal reason to deny them. Right now, manufacturers and their vendors, Beacon Channel Management and 340B ESP, provide very little transparency into internal workings and decisions occurring on the product's back end. We understand that under the current MFP Refund process, denials are often based on vague, unpublished standards. It is unfair and inappropriate to allow manufacturers to determine the reasons for denying rebates; they must be constrained to clearly articulated, tightly limited specific scenarios consistent with 340B rules and regulations. We can think of only two appropriate scenarios in which a manufacturer would deny a rebate. One would be if another covered entity had already received a rebate on that exact claim; that would be an appropriate reason to deny a rebate. The only other appropriate scenario we foresee is if a State Medicaid agency has already received a MDRP rebate on a Medicaid Fee-for-Service claim; however, a rebate model should not become the primary method for avoiding duplicate discounts, as there are already processes in place for that. For any questions related to possible Medicaid Managed Care (MCO) duplicate discounts, those items should be worked out between the manufacturer and the State, as part of their current processes, and should not be grounds for rebate denial. In HRSAs 1996 Manufacturer Audit Guidelines, manufacturers already have established processes for requesting and conducting good- faith inquiries and audits of covered entities, and they should not be given the power to deny rebates as a means to circumvent the established program integrity guidelines. Manufacturers are already requiring many claims data elements to be submitted through vendor platforms (e.g., 340B ESPTM and TruzoTM) as a condition for health centers to continue serving patients through contract pharmacies, which has been extremely difficult for Erie and other health centers. Our team spends hours each week uploading data, fixing ongoing issues, and working with consultants just to manage reporting requirements. The administrative burden is significant, and even centers that try to comply often lose access to 340B pricing, not because they failed to comply, but because the process itself is overly complex and hard to manage. We fear that a future rebate model platform will have some of those same challenges, if not more. There should be a clear process for resolving situations where a health centers submitted data does not match the manufacturers calculations. From our experience with 340B ESP, some manufacturers seem to misunderstand the range of compliant inventory models, such as virtual replenishment of dispensed drugs. Manufacturers often expect to see purchase first, then claims. Under a virtual replenishment model, the order of those dates is reversed. Another very significant challenge is that the vendor systems compare claims and purchase data at the pharmacy store level rather than the chain level. For example, if a health center has 10 Walgreens contract pharmacies, the health center aggregates prescription dispenses across those 10 stores and then replenishes the full package to a single store, but they will be penalized by 340B ESPTM for this very normal inventory method. Because manufacturers and health centers use different methods, their view of the numbers can differ even when the health center is fully compliant. When this happens, manufacturers have been known to block us from buying at 340B prices until we meet their unclear data submission standards which sometimes is impossible to do, or the expectations keep changing. Requiring CHCs to fight for every disputed rebate will drive up costs and may push many covered entities to forgo rightful 340B discounts due to limited staff resources and administrative overload. This added burden would hinder patient care and undermine the 340B programs goal of maximizing limited federal resources to serve more patients and expand services. As a fitting point of comparison, we would like to share some of the severe challenges we have faced in learning to navigate the 340B ESP platform. 340B ESPTM is a product created by Second Sight Solutions, a sister company to Beacon Channel Management. Now that we are skilled in utilizing the 340B ESPTM platform, Erie employees spend approximately 15 hours per month managing the 340B ESPTM data submission process and monitoring results. That is after multiple years of learning via trial and error, how best to comply with and navigate the 340B ESP system. The rebate model platforms will be more complex and time-consuming for our health center staff than this 340B ESP system. Currently, Eries Senior Pharmacy Business Data Analyst leads our ESP data management process, including consolidating, analyzing, reporting, submitting, and monitoring 340B claims data. The Erie 340B Program Manager invests consistent time and energy in monitoring eligibility and designations, as well as working with our third-party administrators and contract pharmacies to operationalize changes in eligibility. Community Health Centers operate with slim margins and are very conscientious about each investment of personnel resources and time. Erie has been forced to dedicate specialized staff resources to managing the 340B ESP process, which diverts capacity and resources away from patient care. We anticipate that complying with a rebate model will require at least twice the staff hours that are currently spent navigating the 340B ESP process, and that would be in addition to the 340B ESP process, which shows no sign of going away. 4. Data Collection by Covered Entities Eries Pharmacy Business Senior Data Analyst leads our ESP data management process, including consolidating, analyzing, reporting, submitting, and monitoring 340B claims data. We obtain the data from our TPA and pharmacy partners. Erie is committed to 340B compliance, allowing us to say with confidence that 340B contract pharmacies can be among the most compliant settings in which 340B drugs are used. In October 2022, Erie was selected for an official HRSA OPA 340B audit. The skilled auditor, experienced in 340B and pharmacy operations, pored over every detail of our 340B program. Notably, HRSA did not identify any findings regarding eligibility, duplicate discounts, or diversion, and the audit did not result in any corrective action plans for our program. Erie has an extensive self-audit program and commissions an external vendor to conduct an annual audit. When conducting internal audits of Eries contract pharmacy and clinic-administered drug programs, Erie has established the following audit methodologies that align with HRSA guidelines: If HRSA moves forward with a rebate model, it should be limited to retail pharmacy claims to avoid unnecessary disruption where no risk of overlapping with MDPNP exists. For example, expanding the model to clinic-administered drugs (CADs) would add a significant administrative burden without advancing the pilots goals as MDPNP is limited to the pharmacy setting (Medicare Part D) for the first two years.. Health centers such as Erie typically do not bill CADs as individual drug claims and often lack the electronic data needed for rebate processing. We have auditable records demonstrating that all CADs were administered or dispensed to eligible patients, but the data is not in a format ready for electronic submission to a rebate platform. Applying a rebate model to medical claims would require entirely new systems, workflows, and ongoing costs. Data elements required for a rebate model should be strictly limited to the absolute bare minimum to accomplish the goal of deduplication with the MDPNP, and should not require BIN & PCN. CMS, in its 2026 physician fee schedule rule (FRN 2025-13271, page 32643), proposes establishing a CMS 340B repository to receive 340B claims data from covered entities, for the purpose of excluding 340B claims from the rebate calculations that are called for under the 2022 Inflation Reduction Act. CMS has identified the data elements needed for that purpose. The CMS-identified data elements are as follows: (1) Date of Service, (2) Prescription Number, (3) Fill Number, (4) Dispensing Pharmacy NPI, and (5) NDC-11. As you can see, BIN and PCN are not required data elements for the CMS repository, and CMS can match claims without them. If the premise of the rebate model is to deduplicate between MFP and 340B, the platforms and the manufacturers should be able to accomplish that aim without BIN or PCN. If allowed to proceed as proposed, a rebate model pilot program that required BIN/PCN would have the same disastrous impact as contract pharmacy restrictions, because it would mean that covered entities using Walgreens contract pharmacies would not be able to participate in the rebate mode because covered entities like Erie would not have the information needed to be able to comply with the BIN/PCN requirement. 5. Manufacturer Efforts to Avoid Duplicate Discounts Erie is committed to avoiding duplicate discounts. We do not have any in-house pharmacies, but across all our contract pharmacies, we exclude Medicaid FFS from our 340B program, and we carefully audit 100% of our claims each month to ensure no Fee for Service (FFS) Medicaid claims slip through our guardrails. In the clinic-administered setting, we apply the UD modifier when billing Medicaid for a 340B drug and regularly self-audit to ensure its proper application. It is a false premise to say that a rebate model is necessary to address the issue of MDPNP nonduplication. That is simply not true; a rebate model is not the only option. There are other options that would be far less burdensome and financially taxing for health centers. A clearly superior alternative to a rebate model is a neutral claims clearinghouse. A neutral claims clearinghouse can achieve accurate deduplication at far lower cost and with far less administrative strain. In this model, covered entities would submit standardized claims data for each 340B drug dispensed to Medicare Part D patients. The neutral clearinghouse would compile this information and provide it to the Medicare Transaction Facilitator (MTF) and manufacturers to identify potential duplicate discounts. A neutral claims clearinghouse would maintain upfront 340B discounts, avoiding cash-flow challenges for CEs and enabling Erie to continue offering discounted drugs to eligible patients at the point of sale. It would significantly reduce administrative burden by removing the need for complex tracking, reconciliation, and compliance systems. A neutral clearinghouse would supply manufacturers with accurate deduplication data on a regular, timely schedule. We believe that the minimum data elements necessary for a manufacturer to identify potential duplication are Date of Service, Prescription Number, Fill Number, Dispensing Pharmacy NPI, and NDC-11-- the same data elements that CMS identified under the 2022 Inflation Reduction Act, as described above. 6. Required Reporting Manufacturers should be required to report to HRSA the percentage of rebates paid within ten days of data submission, as well as a detailed breakdown of each rebate denial rationale, available in aggregate and by covered entity type. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A 340B Rebate Model Pilot Program would not enhance the integrity of the 340B program. The congressional intent of the 340B Program is understood to be to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Nothing about a rebate model furthers that congressional goal; in fact, a rebate model would seriously threaten our health centers ability to reach and serve more patients. As for recommendations to improve data collection and reporting while minimizing administrative burden, we would respectfully refer back to our comments above regarding a neutral claim clearinghouse. Conclusion In summary, we ask you to consider how financially and administratively devastating this pilot program will be for covered entities, particularly for community health centers like Erie. We urge you to exempt health centers from the rebate pilot, or at a minimum, establish a variety of safeguards to help mitigate the clear harm of the pilot program as initially proposed. Now is not the time to add additional burden to safety-net healthcare providers like Erie, and it is certainly not the time to threaten the crucial support we receive as participants of the 340B Drug Pricing Program. The healthcare environment in which Erie operates is changing dramatically in the upcoming years, and the support from the 340B Drug Pricing Program will be more necessary than ever. This time of financial uncertainty is not the time to jeopardize our ability to participate in the 340B program particularly with an administratively burdensome rebate program that will not effectively accomplish its stated goals. 340B savings have been a crucial lifeline for Eries ability to serve patients and to maintain the capacity to provide services in the future. Erie is proud of the work of our care and case managers, health educators, and patient navigators; however, these services are not typically reimbursed. These personalized patient services help Erie patients manage their chronic health conditions, enabling them to be healthier and thriving members of our community. For more than eight years, the U.S. Department of Health and Human Services has recognized Erie as a Health Center Quality Leader for providing the highest quality care to an ever-increasing number of patients. Without 340B savings, we would not have the capacity to fund the comprehensive, award-winning care we provide. Thank you for soliciting feedback on the pilot program. If you have any questions, please contact me at lfrancis@eriefamilyhealth.org. Sincerely, Lee Francis MD MPH President & CEO Erie Family Health Centers
HRSA-2026-0001-2126Allegheny Health Network2026-04-20T04:00Z40,186 chars
HHS Docket No. HRSA-2026-03042 See attached RFI regarding the 340B Rebate Model April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA2026 03042) Submitted to Federal eRulemaking Portal: https://www.regulations.gov Dear Administrator Engels: The Allegheny Health Network (AHN), which has three covered entities within our health system (West Penn Hospital, Saint Vincent Hospital and Positive Health Clinic), appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. As a nonprofit health network, we aim to extend our reach to as many people as possible to offer them a broad spectrum of care and services. We have 14 hospitals and more than 200 primary-and specialty- care practices in more than 300 clinical locations and offices. In addition, AHN has approximately 2,600 physicians in every clinical specialty, 23,000 employees, and thousands of volunteers. AHNs service area spans western Pennsylvania and portions of New York, Ohio and West Virginia where we provide world-class medicine to patients in our communities. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. AHN strongly asserts that such a model is not in the best interest of covered entities or the patients they serve. A rebate model would impose substantial and unnecessary costs and burdens, fundamentally disrupting operations, straining financial liquidity, and ultimately hindering patient access to critical services. AHN has reasonably relied on the upfront discount model for decades, and its core purpose is best fulfilled by preserving this mechanism. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 1. Costs to Covered Entities AHN anticipates a rebate model would introduce prohibitive new administrative, staffing, and IT costs that would significantly erode 340B savings and jeopardize patient care. HRSA's cost estimates are severely underestimated, as a rebate model requires completely new operational activities, specialized staffing (3-4 additional FTEs), and extensive IT system development (estimated one-time costs of $1.2M - $1.5M+), rather than merely adapting existing systems. These incremental costs would directly force reductions in vital patient services and community health initiatives currently funded by 340B savings. a. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs: 1. One-Time Startup Costs (First 6-12 Months): AHN estimates a total of 620 - 1,240 hours (roughly 15.5 to 31 full-time weeks) of dedicated work for initial setup. This includes legal review, IT build-out, operational workflow changes and training, accrual calculation development, and analytics build-out. 2. Ongoing Operational Costs (Weekly/Monthly): An estimated 120 - 160 hours per week (representing 3 to 4 full-time equivalent employees) would be required for ongoing program management. ii. Financial Estimates: 1. Specialized 340B Software Implementation: Range of $1.2M - $1.5M (one-time) 2. New Staff (FTEs - Full-Time Equivalent): Range of $390,000 - $625,000 (ongoing annual) 3. Additional costs for legal review, staff training, and consulting services (not separately quantified but noted as significant one-time and recurring). Range of $500K $900K. iii. Assumption: These estimates assume a program covering up to 25 drugs, including 2026 and 2027 IRA-negotiated drugs. b. Describe the methodology and assumptions used: i. Estimates are derived from a combination of AHN's internal historical data, industry benchmarks, vendor quotes, and expert consultation. They are based on the need to manage rebate submissions, denial tracking, and reconciliation across potentially multiple manufacturer platforms. c. Specify the activities these incremental costs would cover and affect current costs: i. New Activities: Claims processing (per manufacturer), data submission, reconciliation (continuous, labor-intensive), audit support, denial tracking, appeals management, manufacturer portal logins, cash flow monitoring, enhanced HRSA reporting and audit preparation. ii. Effect on Current Costs: The change to a rebate model, even for a subset of drugs, does not reduce existing administrative costs associated with the upfront discount model. Instead, it adds a completely separate and substantial new layer of administrative burden and cost, fundamentally requiring two parallel systems. d. Comment on the impact of these incremental costs under your current operations: i. These costs are not merely administrative nuisances but represent a significant drain on resources, directly compromising AHN's capacity to serve patients and the community. They will inevitably lead to: 1. Foregoing certain patient services or service lines (e.g., new medical procedures, specialized care programs). 2. Cutting back on innovative community health programs (e.g., chronic disease management, outreach). 3. Ceasing certain project improvements (e.g., infrastructure updates, medical equipment upgrades). 4. Reducing direct financial assistance to patients (e.g., co-pays, vaccinations). 5. The uncertainty has already led to delayed strategic investments and increased budgeting conservatism. e. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program. i. Require additional FTEs or reallocate clinical staff? 1. Yes, implementation would absolutely require additional full-time employees (FTEs) and would inevitably cause current medical provider FTEs to reallocate work hours from medical care to administrative functions. 2. Staff would also be reallocated (5-10 hours) from patient counseling at the point of dispense, medication therapy management consultations, care coordination calls with covered entity clinical staff, proactive adherence outreach for patients with chronic conditions (HIV, diabetes, cardiovascular disease). ii. Anticipated number of additional FTEs, roles, responsibilities, and duration: 1. AHN anticipates utilizing multiple FTEs during initial setup phase (6-12 months) and 3-4 additional FTEs on an ongoing basis. 2. Roles: a. Legal/Compliance Specialist (0.5 - 1 FTE, primarily setup, then ongoing for complex issues): Review terms, privacy impacts, policy revisions, contractual negotiations. b. IT System Analyst/Developer (1-1.5 FTE, significant during setup, then ongoing maintenance): Design, build, test new IT solutions for data extraction, transformation, integration, and error handling. c. Rebate Program Operations Specialist/Analyst (2-2.5 FTE, ongoing, with setup involvement): Manage workflows, prepare submissions, submit claims, monitor status, match rebate payments to submitted claims identifying discrepancies and underpayments, maintain a tracking database, process payments, investigate denials, prepare appeal packages, calculate accruals, generate reports. d. Data Governance Specialist (0.5 FTE, primarily setup, then ongoing for oversight): Establish data definitions, standards, data ownership, and impact assessments. 3. Duration: These positions would be permanent due to the continuous and complex nature of the work. 4. Advance Notice: A minimum of 6 to 9 months of advance notice would be required to hire and train these specialized FTEs. f. Explain why HRSA's estimate of 5 hours/week is a gross underestimate: i. HRSA's estimate is woefully inadequate because it fundamentally misunderstands the comprehensive scope of new activities required. It narrowly focuses on data submission, neglecting the critical upstream and downstream activities such as: 1. Extensive legal review and data governance. 2. Complex IT build-out and integration. 3. Entirely new operational workflows. 4. Complex accrual calculations. 5. Labor-intensive reconciliation and denial management. 6. Program tracking and analytics. ii. The assumption that "same type of information" and "same platform" imply minimal effort is incorrect due to new specifications, APIs, file formats, and distinct reporting requirements. g. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. i. New or modified IT systems, software, or data infrastructure: 1. New or Modified Data Extraction and Transformation Tools (ETL): To pull data from various internal systems (claims, pharmacy, EHR, purchasing) and transform it to specific rebate platform formats. 2. New Data Integration Layer/APIs: To establish secure connections between AHN's internal systems and external rebate platforms. 3. New Data Validation and Error Handling Mechanisms: For pre- validation and post-submission error management. ii. Enhanced Data Storage and Warehousing Capabilities: For storing submitted data, platform responses, rebate payments, and audit trails. iii. New Reporting and Analytics Tools/Dashboards: To track performance, monitor financial impact, and ensure compliance. iv. Secure Communication Channels: For transmitting sensitive data with new encryption protocols or VPNs. h. Estimated costs for system development, procurement, maintenance, or integration: i. Direct System Development/Modification Costs: Estimated 400-800 hours (10- 20 weeks FTE equivalent) for IT build during initial setup (one-time, but recurring for ongoing support). ii. Vendor and Third-Party Administrator (TPA) Costs: Costs quoted in excess of $200,000 - $500,000 for implementation and $200,000 - $300,000+ per year for ongoing data processing, submission, reconciliation, and reporting (one-time for implementation, recurring for ongoing). iii. IT System Costs : Estimated Range for One-Time Implementation Costs: $1M+. Recurring costs for maintenance, licenses, and ongoing development would also be significant. i. Other Anticipated Costs or Impacts i. Additional costs not otherwise captured: 1. Legal Review & Counsel: Primarily one-time for initial setup, but recurring for ongoing compliance. 2. Training (Recurring): Extensive training for staff across various departments (pharmacy, finance, IT, legal, revenue cycle) due to new processes, systems, and compliance. 3. Consulting Services (One-time and Recurring): Engaging external consultants for specialized expertise in 340B rebate programs, data privacy, and systems integration. 4. Process for Challenging Denials: An exceptionally high cost driver involving detailed claim comparison, root cause analysis, communication with manufacturers, documentation gathering, negotiation, and meticulous tracking. ii. Specific impacts on patients' access to drugs: 1. Reduced Access to Care for Vulnerable Populations: Reduced 340B savings translate to fewer resources for free/reduced-cost vaccinations, discounted medications, and specialty clinics, disproportionately affecting Medicare, Medicaid, uninsured, and underinsured patients. 2. Erosion of Community Health Initiatives: Forced cuts to vital community health programs (e.g., prevention, chronic disease management, social determinants of health). 3. Compromised Quality and Innovation: Limited ability to invest in cutting-edge medical equipment, advanced diagnostic tools, and new treatment modalities. 4. Impact on Unique Services: Potential reduction or elimination of specialized services, creating health access deserts. 5. Limited Ability to Stock High-Priced Drugs: The necessity to float the full cost of expensive medications for extended periods may prevent AHN from stocking optimal levels, leading to treatment delays or forcing patients to seek care elsewhere. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would critically disrupt AHN's cash flow, forcing the organization to provide significant "interest-free loans" to drug manufacturers by paying full Wholesale Acquisition Cost (WAC) upfront and awaiting delayed rebates. Even a 10-day rebate payment window is insufficient given AHN's rapid wholesaler payment terms (within 15 days). This would create a substantial financial float (estimated $10M+ depending on number of drugs), reduce liquidity, potentially increase borrowing costs, and risk violating bond covenants, undermining financial stability and strategic investments. AHN recommends abandoning the rebate model in favor of a neutral third-party clearinghouse if deduplication is the primary concern. a. Effect on cash flow and financial risks under a rebate model: i. Upfront Payment Requirement: AHN would pay the full Wholesale Acquisition Cost (WAC) for drugs immediately, disbursing funds from operating cash. ii. Delayed Reimbursement: Even a 10-calendar day payment window for rebates is a significant delay compared to the upfront discount model. AHN's operational reality involves drug purchases with very short payment terms (often less than 24 hours to invoice, with payments due in a few days). iii. Creating a "Float" Period: This creates an unavoidable "float" period where AHN's capital is tied up for weeks or months while waiting for rebates, effectively providing interest-free loans to drug manufacturers. AHN anticipates a cash flow float of approximately estimated at $10M+. iv. Reduced Liquidity: Tying up significant working capital reduces overall liquidity, impacting day-to-day operations and the ability to respond to unexpected financial needs. v. Increased Borrowing Costs: Consistently reduced operating cash may necessitate increased reliance on short-term borrowing or lines of credit, incurring additional interest costs. vi. Impact on Strategic Investments: Reduced cash flow directly impacts funding for new medical technologies, facility upgrades, or expansion of patient services. vii. Financial Risks: The rebate model introduces unbudgeted financial strain and disrupts financial planning due to uncertainty around rebate timing and potential denials. b. Typical payment terms under current wholesaler contracts for 340B drugs: i. Semi Monthly: Purchases from the 1st through the 15th of the month are due on the 25th of the month. ii. Payment Window: AHN typically remits payment within 15 days of receiving a wholesaler invoice. iii. Prompt Payment Incentives: Yes, wholesalers offer prompt payment discounts; the discount is highest for prepayment and reduces each day afterward. iv. No Difference: Payment terms do not differ between 340B and non-340B drugs. c. Alteration of payment timing compared to current wholesaler arrangements: i. A rebate-based payment model would drastically alter payment timing. Under the current upfront discount model, the 340B discount is applied at the point of purchase, and AHN pays the net, discounted price within a short payment period (e.g., 5-7 days). This provides immediate financial relief and predictable cash flow. ii. Under a rebate model, AHN would pay WAC upfront. The multi-step rebate process (dispense, data capture, manufacturer review, payment issuance, receipt, and internal processing) means the cumulative timeframe for rebate payment will almost always extend well beyond typical wholesaler payment due dates. iii. Total Estimated Financing Gap: The total estimated financing gap (days to pay wholesaler + days to complete reconciliation + days to receive rebate) could range from 14 to 180+ days. d. Structure to ensure manufacturers adhere to 10-day payment requirement: i. While a 10-calendar day payment window for manufacturers after data submission is an improvement, it is not short enough to prevent significant adverse impacts. This window does not account for the time AHN needs to dispense, collect/prepare data, submit the claim, receive payment, and process it internally. ii. The fundamental problem is that the discount is no longer upfront, creating an inevitable capital float. e. Other ways to address payment timing and cash flow impacts: i. AHN's primary recommendation is to abandon the rebate model concept entirely. If HRSA insists on addressing duplicate discounts, a neutral, third-party clearinghouse is a less burdensome and effective alternative. 3. Rebate Denials AHN stresses the critical need for robust guardrails to prevent arbitrary rebate denials. Manufacturers must be mandated to provide specific rationales and documentation for all denials. A standardized, unbiased, and timely dispute resolution process, including clear responsibilities, template forms, and firm timelines for adjudication, is essential to protect covered entities from unfair and costly rebate rejections. a. More specific guardrails to limit denials to appropriate circumstances: i. AHN believes that strong, specific guardrails are essential. The proposed grounds for denial (e.g., duplicate 340B rebate) are insufficient. Manufacturers must be required to provide the rationale and specific documentation for all denials. b. Standard process elements required for rebate denials: i. A clear, unbiased, and timely dispute resolution process for denied claims is critical, including: 1. Defined responsibilities and remedies. 2. Standardized template forms for submissions and adjudications. 3. Clear timelines for manufacturer responses and resolution of disputes. 4. Data Collection by Covered Entities AHN's current data collection and management systems are robust and designed for an upfront discount model, utilizing internal systems and external TPAs. A rebate model would necessitate a fundamental and dramatic change, requiring significant one-time and ongoing investments in IT system re- engineering, new data flows, and extensive manual effort due to the lack of direct EHR-to-TPA feeds. This increased complexity, coupled with granular data demands and the processing of Protected Health Information (PHI), heightens privacy and security risks. AHN recommends strict guardrails for data minimization, clear use agreements prohibiting commercial use, independent auditing, and secure platform technology to protect sensitive patient data. a. How AHN currently collects, maintains, and retains data, including third-party vendors: i. AHN employs a robust and multi-faceted approach leveraging internal expertise and external support. ii. Data Collection: From various internal systems: pharmacy dispensing systems, EHR (patient eligibility, prescriber data), purchasing/inventory management, and claims processing/billing systems. iii. Data Maintenance & Retention: Data is maintained within secure internal systems and data warehouses, adhering to record retention policies. iv. Internal Monitoring: 340B program staff conduct continuous monitoring and validation checks. v. Internal Compliance Staff: Dedicated personnel perform independent validation and audits. vi. External Vendors: TPAs are utilized for drug accumulation, claim identification, and compliance checks within the upfront discount model. AHN also engages external auditors for unbiased verification. b. Current measures to ensure data accuracy, completeness, and consistency: i. Validation checks, reconciliations, and internal/external audits are regularly performed. This includes continuous monitoring of data outputs and processes, regular reviews of eligibility, claim identification, and program rules. c. Change in data collection activities (one-time or ongoing) under a rebate model: i. A rebate model would fundamentally and dramatically change current data collection activities, requiring significant one-time investments for system and process re-engineering, followed by substantial ongoing efforts. ii. One-Time Changes: New data definitions/formats, new data flows, integration development, policy/procedure revisions. iii. Ongoing Changes: Continuous data extraction/submission, intensive data validation, reconciliation, denial management, audit support, performance monitoring. iv. Necessity for Manual Work: Due to lack of direct EHR-to-TPA feed, manual data extraction, curation, error correction, ad-hoc reporting, and negotiation of denials would be unavoidable and labor-intensive. d. Specific pharmacy and medical claims data elements: i. A rebate model would demand greater granularity than currently required for the upfront discount. Data elements include patient demographics, prescriber information, drug dispensed, quantity, date of dispense, diagnosis codes, procedure codes, claim status, payer information, drug acquisition costs, and dates. This data is not "readily available" in a single, integrated source for direct submission. e. Recommendations for guardrails for privacy and security: i. Standardized, Negotiable, and Balanced Terms & Conditions: Mandate neutral, negotiable terms for data use, security, liability, and dispute resolution. ii. Robust Data Minimization and De-identification: Collect only minimum necessary data, de-identified to the greatest extent possible. iii. Clear Data Use Agreements: Explicit, legally binding agreements prohibiting commercial use of data. iv. Independent Third-Party Auditing and Oversight: Regular, independent audits of the rebate platform and processes with transparent results. v. Secure, Tested, and Certified Platform Technology: Platform must demonstrate robust cybersecurity measures and industry-recognized certifications. 5. Manufacturer Efforts to Avoid Duplicate Discount AHN's current practices, incorporating robust internal processes and TPA systems, have successfully prevented 340B/Medicaid duplicate discounts without any issues raised by manufacturers. This demonstrates that effective deduplication can be achieved without a burdensome rebate model. AHN believes that existing data elements, when complemented by a neutral third-party clearinghouse, are sufficient for this purpose, rendering a complex rebate mechanism unnecessary and disruptive. a. AHN's practices and procedures prior to January 1, 2026, to avoid duplicate 340B/Medicaid discounts: i. AHN has proactive internal processes, TPA systems, and adherence to industry best practices. Internal pharmacy systems are configured to identify and flag Medicaid Fee for Service patients for 340B eligibility and prevent 340B discounts on drugs dispensed to these patients. b. Operational or administrative changes since January 1, 2026, for MDPNP: i. AHN has not had any 340B/MDPNP deduplication issues raised by drug companies to date. This demonstrates the effectiveness of current systems and processes. c. Experience since January 1, 2026, with identifying drug dispenses: i. AHN's approach has been effective and proactive. We have not encountered significant challenges in identifying potential duplicate discounts through robust internal processes and TPA systems. d. Challenges encountered in identifying potential duplicate discounts: i. AHN has successfully managed to avoid deduplication issues to date. This proactive approach has allowed AHN to manage potential deduplication issues without external challenges. e. Minimum data elements for manufacturers to identify duplicate discounts: i. AHN believes that existing data elements, when coupled with a robust third- party clearinghouse, are sufficient for deduplication without the need for a complex rebate model. 6. Required Reporting AHN asserts that manufacturers, as the beneficiaries of a rebate model, should bear the primary reporting burden to HRSA. This includes real-time updates on rebate claim status, detailed rationales for all denials, itemized payment details, and aggregate performance metrics. To ensure transparency and accountability, HRSA should publicly share aggregated, de-identified manufacturer performance data, including average processing times, denial rates, and adherence to payment timelines, via quarterly dashboards and annual reports. a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review? i. Given the significant operational and financial burdens on covered entities, AHN strongly believes that manufacturers, as the beneficiaries of the delayed payment model, should bear the primary reporting burden to demonstrate compliance and program integrity. b. Key Data Elements Manufacturers Should Submit to HRSA: i. Rebate Claim Status: Real-time updates on each submitted claim, including receipt date, approval date, denial date, and payment date. ii. Denial Rationale and Documentation: For every denied claim, a detailed, specific, and transparent explanation for the denial, along with supporting documentation. This should be auditable. iii. Rebate Payment Details: Itemized payment information, including drug, quantity, original WAC, final rebate amount, and date of payment. iv. Aggregate Data: Monthly or quarterly reports on total claims received, approved, denied (with reasons), and paid, including average processing times. v. Audit Outcomes: Reports on any manufacturer-initiated audits of covered entities, including findings and resolutions. vi. Frequency: At a minimum, real-time or daily updates for claim status and payment details, and monthly aggregate reports. Quarterly comprehensive reports should also be required. c. What specific manufacturer data should HRSA share publicly (and to what frequency)? i. To promote transparency, accountability, and allow covered entities to make informed decisions, HRSA should publicly share aggregated, de-identified manufacturer data. ii. Key Data to Share Publicly: 1. Aggregate Manufacturer Performance Metrics: a. Average rebate processing time (from claim submission to payment). b. Rebate denial rates (overall and by reason code). c. Manufacturer adherence to established payment timelines. d. Number of disputes initiated and resolved. 2. Compliance Trends: General findings from HRSA's oversight of manufacturer practices related to the rebate program. 3. Program Impact Data: De-identified, aggregated data on the overall financial impact of the rebate model on covered entities (e.g., total float burden, administrative costs vs. rebate amounts). 4. Frequency: Quarterly performance dashboards and annual comprehensive reports. Public sharing of this data should be presented in an accessible format to allow for meaningful analysis by stakeholders. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot AHN believes a rebate model would severely undermine 340B program integrity, not enhance it, by increasing complexity, administrative burdens, and the potential for errors. It would divert covered entity resources from compliance, increase manufacturer influence over discounts through arbitrary denials, and is unlikely to improve pricing transparency as net costs would be opaque until rebates are received. Any perceived benefits, such as preventing duplicate discounts or reducing improper claims, are already achievable through less disruptive means, and the immense costs of a rebate model far outweigh any speculative advantages, ultimately hindering the program's core mission to support patient care. a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. i. Negative Impact on Program Integrity: AHN believes a rebate model would severely undermine, rather than enhance, program integrity. The increased complexity, administrative burden, and cash flow challenges would create an environment ripe for errors and compliance risks for covered entities. The sheer volume of new processes, data points, and third-party interactions introduces more points of failure. ii. Diversion of Resources from Compliance: Covered entities would be forced to divert resources (staff, IT, financial) from existing, effective compliance programs to manage the rebate model, potentially weakening oversight in other critical 340B areas. iii. Increased Manufacturer Influence: The shift to a rebate model places more control in the hands of manufacturers, increasing the potential for arbitrary denials and delays, which can then impact a covered entity's ability to maintain program integrity. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs: 1. AHN acknowledges that avoiding duplicate discounts is a legitimate goal. However, a rebate model is an overly burdensome and inefficient method to achieve this. Existing mechanisms, such as robust TPA systems and internal processes, coupled with a neutral third-party clearinghouse for deduplication (if truly needed across the entire program), are more effective and less disruptive. A rebate model shifts the burden and complexity onto covered entities without solving the underlying issue more efficiently than other alternatives. ii. Reduce diversion or improper claims: 1. It is unlikely to significantly reduce diversion or improper claims beyond what current robust compliance measures already achieve. The existing upfront discount model, when paired with comprehensive internal controls and TPA oversight, is already designed to prevent diversion. A rebate model merely changes the point of discount application, but the fundamental data required for identifying eligible patients and preventing diversion would remain largely the same. The added administrative complexity of a rebate model could, paradoxically, increase the likelihood of administrative errors leading to "improper claims" rather than reducing them. iii. Increase pricing transparency across stakeholders: 1. A rebate model would not inherently increase pricing transparency for covered entities. In fact, it could decrease it. Covered entities would initially pay WAC, making the true "net price" of the 340B drug opaque until the rebate is processed and reconciled. The current upfront discount provides immediate and clear pricing transparency at the point of purchase. Manufacturers, however, might gain greater insight into covered entity dispensing patterns, which could then be used for commercial purposes, potentially reducing overall program benefits. c. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. i. No Tangible Benefits for Covered Entities: AHN identifies no tangible benefits for covered entities from a rebate model. The perceived benefits (e.g., preventing duplicate discounts, program integrity) can be achieved through less burdensome means. ii. Costs Far Outweigh Any Potential Benefits: The substantial, documented costs (administrative, IT, staffing, cash flow impact, and patient access limitations) far outweigh any theoretical benefits a rebate model might offer. These costs would erode or eliminate the financial benefit of the 340B program, thereby undermining its statutory purpose to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Conclusion: For all these reasons, AHN respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA, therefore, should abandon the concept altogether and embrace a neutral, third-party clearinghouse. AHN's current systems and practices effectively manage compliance and deduplication without the severe financial and operational disruptions a rebate model would cause. The shift from an upfront discount model to a rebate mechanism poses a profound and direct threat to the core mission of the 340B Program and to the vulnerable patient populations AHN serves. AHN's patient population includes a significant number of individuals who are uninsured or underinsured, often relying on 340B programs due to high deductibles and co-pays that render prescription medications unaffordable. Many also have limited financial resources, living at or below the federal poverty level, or are on Medicaid. Furthermore, a substantial portion of our patients reside in underserved or rural areas, facing geographical and transportation barriers to healthcare access. These patients frequently suffer from chronic conditions requiring consistent, ongoing medication, making affordable access critical to their well-being. These patients face significant health, financial, and social barriers that make access to medications not just important, but absolutely critical: Financial Barriers: High out-of-pocket costs can force patients to choose between life-sustaining medications, food, or housing. Even small medication costs can be prohibitive for those with low income or inadequate insurance, leading to tragic choices and worsened health outcomes. Health Barriers: For patients managing chronic conditions like diabetes, heart disease, asthma, and mental health disorders, consistent medication adherence is vital. Interruptions in access can lead to severe health consequences, preventable hospitalizations, and a diminished quality of life. Timely access to medications for acute illnesses and preventive care (e.g., vaccines, screenings) is equally essential to avert more serious and costly health issues. Social Barriers: Lack of reliable transportation, especially in rural areas, can impede pharmacy access. Limited health literacy, social isolation, and language barriers can further hinder effective medication management and patient-provider communication, impacting adherence and overall health. Contract pharmacy locations are absolutely crucial in overcoming these barriers, transforming the 340B program from a theoretical discount into a practical reality for our patients. They provide: Proximity and Accessibility: Reducing travel burdens, especially for patients relying on public transportation or with mobility issues, by situating pharmacies closer to where patients live or work. This "one-stop shop" convenience immediately after appointments is invaluable. Contract pharmacies are also able to serve patients across wide geographic areas including rural Pennsylvania communities where the nearest clinic-based pharmacy may be 30+ miles away. They are often the only pharmacy in town in a patients home community. . Extended Hours and Flexibility: Offering evening and weekend hours accommodates diverse patient schedules, ensuring medications can be picked up when convenient, which is critical for managing acute conditions or preventing gaps in chronic care. Integrated Community Services: Community-based contract pharmacies often provide ancillary services (immunizations, medication therapy management, OTC counseling, durable medical equipment) that clinic-based dispensing cannot offer. For uninsured and underinsured patients, the contract pharmacy may be their primary point of healthcare contact between clinic visits. Capacity to Serve Uninsured/Underinsured: They are specifically equipped to process 340B prescriptions at significantly reduced prices, directly addressing the financial barriers that prevent access to essential drugs. They also provide comprehensive support, including counseling and other ancillary services. Stigma reduction: For patients living with HIV/AIDS and other stigmatized conditions, the ability to fill prescriptions at a discrete mail-order pharmacy or a mainstream community pharmacy, rather than a clinic identified with a specific diagnosis, is clinically meaningful. It supports medication adherence by removing a barrier that, while non-financial, is well-documented in public health literature as a driver of treatment discontinuation. If a rebate model were implemented, the inevitable delays, reductions, or risks to 340B savings would force AHN to make incredibly difficult choices, directly impacting these vital patient services. The services most vulnerable to reduction or elimination would be those essential for vulnerable populations but which lack clear, profitable reimbursement pathways: Uncompensated Care Programs/Financial Assistance: Direct subsidies for uninsured or underinsured patients, including medication co-pays, would be curtailed, shifting the financial burden back to the most vulnerable. Comprehensive Chronic Disease Management Programs: Labor-intensive programs for diabetes, heart failure, HIV, and asthma, which focus on prevention and adherence, would face cuts to staffing and resources. Patient Navigation and Care Coordination Services: Fewer navigators and care coordinators would be available to help complex patients overcome system, social, and logistical hurdles, leading to fragmented care. Behavioral Health Services: Often under-reimbursed, these critical services, including integrated behavioral health and substance use disorder treatment, would see reduced capacity. Community Health and Outreach Programs: Proactive health screenings, vaccination clinics, transportation services, and nutrition counselingall designed to improve population health would be scaled back. Pharmacy-Related Patient Support Services: Medication Therapy Management, medication synchronization, and home delivery options, which significantly enhance adherence and safety, would be jeopardized. In essence, these "wraparound" services, heavily reliant on 340B savings, are what truly enable AHN to address the holistic needs of its diverse patient population, reduce broader healthcare costs through prevention, and improve overall quality of life. The implementation of a rebate model, with its profound administrative burdens, cash flow disruptions, and inherent uncertainties, would not only erode the financial viability of AHN but, more tragically, severely diminish our capacity to deliver on this mission, directly harming the patients and communities we are dedicated to serving. If HRSA chooses to move forward with this ill-conceived effort, it must allow AHN and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Laura Mark Vice President, Pharmacy Allegheny Health Network cc: Mark Sevco, President, AHN Jacqueline M. Bauer, General Counsel and Chief Administrative Officer, AHN Daniel A. Onorato, Executive Vice President, Corporate Affairs, Highmark Health
HRSA-2026-0001-2127Broad Top Area Medical Center Inc.2026-04-20T04:00Z46,994 chars
See attached file(s) April 19 , 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Broad Top Area Medical Center, Inc. (BTAMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: BTAMC anticipates a loss of more than $1,006,712 / e.g., a 17.75% reduction in savings for our contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. A. Introduction an overview of BTAMC and our patient population Broad Top Area Medical Center, Inc. (BTAMC) is a Federally Qualified Health Center (FQHC) located in Huntingdon County. BTAMC has 12 office locations, serving communities throughout the heart of Pennsylvania. A few of our clinic sites are in very rural areas where theres minimal or no public transportation. Several of our practices are within walking distance of schools and public housing. BTAMC has family practices and a dental office to care for pediatric, adult, and geriatric patients. We have a Walk-in Clinic with extended hours for acute care. Well serve minority, specialized, and transient populations without discrimination. In 2025, just over 19% percent of our unduplicated patients were at or below 200% of the Federal Poverty Level (FPL) and could qualify for Sliding Fee Scale Discounts (SFSDP). Just over 6% of our unduplicated patients were uninsured at their visit. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 2 B. By law and by mission, BTAMC uses all savings resulting from participation in the 340B Federal Drug Discount Program to expand our patients access to affordable medication and other essential primary health services The intent and purpose of the Program is to allow covered entities to stretch scarce federal resources as far as possible and provide more comprehensive services. To reach up to 22,000 unique patients annually, the 340B Federal Drug Discount Program allows BTAMC to serve the community and meet our mission, vision, and values every day! BTAMC does not own an in- house pharmacy and does not dispense 340B Clinic Administered medication. We contract with a network of local 340B pharmacies five independent drug stores, two national chain stores, two regional grocery stores. Our contracted pharmacies can provide specialized packaging, drive-thru or delivery services, immunizations, telehealth counseling services, durable medical equipment, or diabetic footwear conveniently, during extended hours. BTAMC providers regularly collaborate with pharmacists to support our chronic disease management and transitional care programs. For best adherence and compliance, there is heightened focus on patient-centered/whole-person care. C. BTAMC makes prescription medication affordable and convenient for our patients Patients always have the freedom of choice to select a pharmacy that is most convenient for them. The 340B Program ensures that medications are affordable for all BTAMC patients, especially our most vulnerable. We offer aid to our patients who cannot afford prescription drugs. We can help our eligible patients reduce their out-of-pocket drug costs. BTAMCs self-pay patients, or those patients who have been qualified for our Sliding Fee Discount Program, who then also have proven barrier to affordable medications may qualify for BTAMC Prescription Assistance Program This benefit is only offered to our patients at our 340B contracted pharmacies. Well purchase and replenish 340B inventory for each contract pharmacy at discounted prices. The savings generated from 340B discounts is filtered right back into other BTAMC programs and services. D. 340B Savings is used to bolster essential primary care at every BTAMC practice location With recent shifts in the Program, our patient health outcomes could be at risk. Our quality assurance and improvement projects could suffer greatly. By reducing how we access 340B Drugs, vital savings that supports BTAMCs patient services like chronic care management or preventive and wellness initiatives, integrated behavioral/mental health, dental care, in-reach and outreach activities, Navigator-assisted insurance enrollment, provider recruitment, or I.T. infrastructure and security are all, threatened to be lost or discontinued without 340B! I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 3 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For BTAMC in particular, this means: A direct impact to our 22,000 eligible patients Decrease current annual 340B eligible prescription transactions from 10,975 Increased to current 340B administrative costs at $1,347,800 Reduce or eliminate pharmaceuticals and inventory management, primary medical, dental and integrated behavioral care services, coordinated and enabling services, patient access and assistance programs, clinical and administrative workforce, I.T. infrastructure and healthcare related business expenses. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. BTAMC significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. BTAMC is deeply concerned that implementing a rebate model would cause our CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis that are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 4 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 5 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: BTAMC provided $29,700 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: BTAMC anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, BTAMC does anticipate an increase to costs for external support vendors. These vendors may include our current 340B consultants, legal counsel, program coordinators and analysts, third-party administrators, electronic medical records platform providers, pharmacy software systems and gateways, or any reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 BTAMC estimates the need for at least one additional FTE in order maintain compliant oversite of Rebate Model activity. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At BTAMC, we specifically would need an additional $50,000 to $75,000 for salary and benefits. We currently do not have the manpower in order to maintain compliant oversite of Rebate Model activity. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. No less than 15 or 20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers proposed plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Should a rebate model launch, BTAMC would respectfully urge HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to pay for custom dashboard modifications and design new internal workflows. BTAMC estimates that we might incur a one-time cost of $35,000 to $40,000 to implement new systems and processes that would be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 22,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 39,600 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 7 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with nine pharmacies to increase access to affordable medications, As the BTAMC service points grow and if we expands our dental services, in the near future we hope to open more clinic sites but in communities without a current contract pharmacy. Opportunities for new partnerships are on the horizon to maintain access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across nine different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts some financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Huntingdon and Mifflin Counties without affordable medication options. Because BTAMC has no in-house pharmacy operations, losing a 340B contract pharmacy partner could literally destroy our CHC. Weve experienced this in the recent past. It was difficult for patient and significantly reduced our 340B savings revenue when six local drug stores closed the doors. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 8 confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. BTAMCs contract pharmacies cannot slide their dispense fees. However, our eligible patient prescription assistance program (EPPAP) enables our pharmacy partners to recognize our approved sliding fee scale patient and assists with determining a reduced, upfront cost for a covered outpatient drugs. The out-of-pocket charge for our patients prescription is simply the pharmacys dispense fee, our Cash Card fee, and the 340B cost of the drug. In turn, allowing our patients to get their life-saving medications at a price they can afford; meanwhile passing the full savings on to our patients. Drugs costs at WAC pricing would never be affordable for our sliding fee scale nor our uninsured patients. CHCs are particularly worried that the need to purchase drugs at full WAC pricing will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 9 match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,192,625 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $180,992 to purchase these same drugs at the 340B ceiling price. This represents a 60175% increase in upfront capital required for procurement. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing under the rebate model, BTAMC can foresee needing to reduce and terminate certain supportive services or even reducing our hired staff and closing a practice site: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as in-reach and outreach education programs, Navigator assisted enrollment services, or immunization clinics for the children in our Amish community Operating Hours: We anticipate needing to reduce our clinic hours by 83 per week, specifically impacting our evening weekend and Walk-In Clinic hours, which are the only times our working-class and pediatric patients can seek care without losing wages, missing work or school. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, Dental Assistant or Dental Hygienist or substitute Radiology or Laboratory Technician. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,318 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. BTAMC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling markdown on their drug purchases. Forcing a WAC-upfront model threatens a CHCs ability to meet their wholesalers terms and conditions. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, BTAMC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $373,151. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. BTAMC estimates that purchasing the next 15 MFP drugs for 2027 at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend to $195,862. Thats an annualized increase by 28420% upfront cost of goods (COG) just to meet wholesaler payment terms. That would surely require $191,4145 necessary cash-on-hand every 30- days to pay for inventory costs; all the while waiting on pending or disputed rebates. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. The risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect on our community will be immediate. a. Financial Impact of Rebate Denials and Delays BTAMC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of over $120,484 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 12 lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays will create serious cash flow issues for CHCs operating on thin margins, which would depend on timely and accurate rebate payments to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with The Medicaid Drug Rebate Program (MDRP) or 340B with the Medicare Drug Price Negotiation Program (MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B 14 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. Conclusion BTAMC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. BTAMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The ripple-effect caused by the proposed Rebate Model Program will have impact on the health outcomes and pharmacy access in the community. BTAMC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Patient Access Programs Director Rita Hollibaugh (rhollibaugh@broadtopmedical.com) OR our 340B Specialist Shamus Walker (swalker@broadtopareamedical.com). Respectfully, John Roth, M.D. Chief Executive Officer Broad Top Area Medical Center, Inc. JR/rah/sw CC: BTAMC Board of Directors, BTAMC Administrative Staff Docusign Envelope ID: 8FC0BC97-F8B0-872B-83BC-CF0F5FF6286B
HRSA-2026-0001-2128Teaching Hospitals of Texas2026-04-20T04:00Z20,315 chars
Administrator Engels and HRSA staff: Thank you for the opportunity to provide comments on the 340B RFI. I'm attaching comments on behalf of the Teaching Hospitals of Texas. Thank you. 1 | P a g e Healing, Teaching, Leading: Essential for the Health of Texas 1210 San Antonio St, SUITE 204. AUSTIN, TEXAS 78701. PHONE: 512-476-1497 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Thank you for the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. The RFI asks among other things whether HRSA should implement a rebate model instead of the upfront discount. On behalf of our members and our association, the answer is no. Based on our and our members analyses and data regarding significant losses of funding and direct negative impacts to bona fide safety net providers and their patients, we urge HRSA to reject the rebate model and to ensure the 340B program continues as a discount program with the benefits and oversight intended by Congress. Unlike other federal programs, financial support for the 340B program comes directly from pharmaceutical companies (not taxpayers) and does so as a condition of their participation in the Medicare and Medicaid programs. The discount approach in place since program inception appropriately anchors oversight with HRSA to ensure the program continues to meet Congressional intent. HRSAs primary obligation for this program is to ensure covered entities (not pharmaceutical companies) are able to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We believe HRSA does not have an obligation to the pharmaceutical companies to implement a pilot particularly when the disruption to the program, the support and resources and patient access improvements the program supports would be reduced. The current discount program, overseen by HRSA, is the best, most cost-effective and direct approach to achieve the program goals. THOT MEMBERS AUSTIN Central Health Dell Seton Medical Center at The University of Texas CORPUS CHRISTI Nueces County Hospital District DALLAS Childrens Health System of Texas Parkland Health & Hospital System The University of Texas Southwestern Medical Center EL PASO University Medical Center of El Paso FORT WORTH JPS Health Network GALVESTON The University of Texas Medical Branch HOUSTON Harris Health System The University of Texas M.D. Anderson Cancer Center LUBBOCK UMC Health System of Lubbock MIDLAND Midland Health ODESSA Medical Center Health System SAN ANTONIO University Health TYLER The University of Texas Health Science Center at Tyler Policy Affiliate AUSTIN Dell Medical School at the University of Texas Austin Regional Affiliate GREENVILLE Hunt Regional 2 | P a g e Shifting to a rebate model would empower pharmacy manufacturers and anchor them as primary program decision makers with unclear oversight, lead to a reduction in program benefits and access to care, and we believe, has the potential to increase burdens on taxpayers to maintain services today made possible by these manufacturer discounts. The financial and operational harms from a rebate program will (as we and CEs have detailed in rule comments and are detailing further in RFI responses): undermine this program, reduce access to care, shift current program savings used to provide care to pharmaceutical manufacturers growing profits, and either reduce access to care or require additional public/taxpayer funding to offset the financial and access losses from a rebate model that will only accrue to pharmaceutical manufacturers benefit. In the end the neediest patients with the fewest care options will suffer while taxpayer burdens increase as pharmaceutical manufacturer profits likewise increase. Specifically in regard to the RFI we make the following overall points: 1. We believe the cited need for the pilot is not validated. The RFI cites the primary reason for the rebate program as manufacturers concerns related to duplicate discounts in the Medicare Drug Price Negotiation program. Before any rebate pilot is considered, independent data and analysis of the claims regarding duplicate discounts must be completed by an independent, qualified group. Do duplicate discounts exist? How extensive are they? Why do they occur? Are there patterns related to their occurrence, the manufacturers reporting them, the entities duplicating these discounts? Are there CEs that would benefit from targeted increased education on duplicate discounts? Based on these and other data identified to: validate whether this is an issue, and identify options to address it, HRSA should validate whether this issue is bona fide, and whether upending the 340B program and shifting billions in funding away from covered entities and to pharmaceutical manufacturers profits is the best solution if there is a material issue. We believe rebates as solution is using an axe in lieu of a scalpel in a surgery that is unnecessary. 2. We believe the pilot and proposed policy shift to rebates are not necessary. We agree with Americas Essential Hospitals and others position that: rebates are not necessary to implement the Medicare drug price negotiation program. Why, therefore is HRSA pursuing a rebate program given the significant risks, the shifting of funds from safety net providers to the profits of pharmaceutical manufacturers many of which are outside the United States, and (as HRSA cited in the RFI), Congressional concern regarding the shift from an upfront discount to a rebate model? From a policy and common-sense perspective, pursuit of this pilot and rebate model make little sense. 3. The rebate pilot as proposed is not voluntary. HRSAs description of the program in the August 2025 proposal consistently cited the voluntary nature of the 3 | P a g e program. This characterization of the program as initially proposed points to a bias in thinking about the pilot that is deeply concerning. The pilot IS voluntary for pharmaceutical manufacturers. As proposed it was not voluntary for covered entities. If HRSA plans to move forward with this pilot- it must do so only with covered entities that choose to participate. The pharmaceutical manufacturers seeking this change can find ways to incent participation (and should do so only without punitive measures). Absent voluntary participation from covered entities, the pilot should not go forward. This same manufacturing bias is seen in the nature of the RFI questions which focus on the covered entities, and not on the manufacturers: what data can manufacturers provide to validate the need for the pilot? What other options have they considered to address any perceived issues and program improvement needs? What data are they willing to provide and what commitments to HRSA oversight of rebate validation, assessments and penalties? 4. The rebate model is not consistent with the goals of 340B program and changes an up-front discount program with immediate CE benefits to a pay and chase model in which CEs pay up front and then chase rebates. This shift benefits manufacturers at the expense of those CEs intended to benefit from the program and either sidelines HRSAs oversight authority or creates significant additional manufacturer oversight and CE denial review needs . The proposed rebate model will undermine Congressional intent for the long-established 340B prescription drug program by shifting funding and the balance of power to drug manufacturers. And as proposed the rebate model puts hospitals and other Covered Entities (CEs) in the unprecedented position of providing drug companies with interest- free loans in lieu of discount pricing. In broad business and economics terms, up-front discounts help consumers (340B CEs in this case) access the benefits of lower costs. Rebates, on the other hand, impose hurdles that provide financial benefit only to those consumers (CEs) that can successfully run the gauntlet of requirements set by the drug manufacturer providing the rebates. Rebates create a structural gap in the program, a forced delay of program benefits (discount) that also delays the funding required for patient care. Health care policy should seek to limit gaps in care; not create them, as this pilot would do. CEs will have immediate expense increases requiring them to increase budgets (or cut services), bear significant new cash flow costs, fund increased administration and oversight costs, and lose funding from likely manufacturer denials as CEs are forced to adopt this pay and chase approach to access the prescription drug price discounts Congress intended them to have. Rather than supporting CEs in stretching scarce federal resources as Congress intended, the financial shift under this proposed rebate model will remove scarce resources from CEs and significantly inhibit timely patient access to needed care and medicines key elements in Making America Healthy Again. 4 | P a g e This shift in financial advantage is precisely the reason why drug manufacturers have been and continue to seek to convert the 340B program from a straightforward, upfront discount to an after-the-fact rebate, pay and chase system: they stand to increase their profits by limiting the intended 340B benefit to CEs and their patients. Delays and gaps in accessing life-saving medications will occur, including, for example, for the over one in ten Americans with diabetes needing insulin and the 40% of Americans projected by the National Cancer Institute to be diagnosed in their lifetimes with cancer needing chemotherapy. To mitigate these care gaps, CEs will have to increase their budgets and allocate funds reserved to continually front load to manufacturers the value of the discounts. This intentional delay of program benefits, resulting care gaps, and the transfer of funds from CEs intended to receive the full benefit of the program to drug companies are unprecedented. Further, unlike upfront discounts, rebate paybacks are not guaranteed. They are subject to manufacturers unilateral requirements, including timelines for data submission and manufacturer validation of the data and approval of the request. Rebate models that condition payment on a manufacturers approval exercised at its sole discretion raise serious concerns about the potential for arbitrary or improper denials of rebate payments, or at the very least delays in owed, approved payment. 5. The program has the potential to reduce Medicaid and overall rebates paid. We anticipate that denied 340B CE rebates will reduce the manufacturers overall rebate amounts by avoiding both CE and Medicaid rebates absent administrative workarounds. The issue will shift from purported duplicate discounts to dodged discounts: in some cases, avoiding discounts to both CEs and Medicaid programs. Currently CEs access discounted drugs and when used for a Medicaid patient, use claims modifiers to indicate that use to the Medicaid program to avoid duplicate discounts (i.e., a discount to the CE and a rebate to Medicaid). In a pilot rebate construct, this same reporting from CEs to Medicaid programs would continue with submission of a modifier to the state on timely claims indicating that the Medicaid program should NOT pursue a Medicaid rebate from the manufacturer because the CE is submitting a claim for a rebate. HOWEVER, under a 340B rebate pilot as proposed, if the manufacturer fails to provide the rebate to the CE, the CE has already indicated that the state should not pursue its discount. Without significant administrative and IT workarounds by the state and CEs to alter the modifier and resubmit and track CE denials of reported duplicates, and without state policy changes to implement a rebate recapture, rebates are lost and both CEs and Medicaid programs lose support while manufacturers benefit from these dodged discounts. The rebate process intended to avoid a duplicate discount results in these cases in the manufacturer providing NO DISCOUNT. 5 | P a g e Who we are: Teaching Hospitals of Texas (THOT) members are a unique group of safety net and critical healthcare providers in Texas. While representing just 4% of hospitals in Texas, our member hospitals: Provide 44% of hospital-reported uncompensated charity care in Texas. Provide over 50% of the states total hospital based graduate medical education clinical training plus clinical training for other healthcare providers including nursing, PT, OT, Speech, diagnostics, pharmacy and other students. Serve as 40% of Texas critical Level I trauma centers, the highest acuity trauma providers serving as the backbone of Texas regional and statewide trauma system; and Serve a patient population has a higher share of patients who are uninsured and have Medicaid/CHIP and a lower share of commercial (i.e., higher paying) patients than other hospitals as a group. In our membership, youll see exemplars of the types of hospitals we believe Congress had in mind and will continue to see as bona fide safety net providers. We anticipate that our individual member hospitals will share their data and specific impacts responsive to the RFI. However, as examples of how the rebate program will affect our safety net hospitals currently providing care with 340B up front discounts, we ask you to consider these two exemplar Teaching Hospitals of Texas members that provide critical health infrastructure and services for their regions and the state as a whole including disproportionate amounts of care to patients without insurance or on Medicaid, level one trauma care for the region and state; extensive healthcare clinical workforce training, and more. Hospital One is a large urban hospital with a payor mix that is 63% uninsured or Medicaid/CHIP (43.4% without insurance and 19.4% with Medicaid/CHIP). It provides $720 million in charity care annually (FY 2023). The budgetary impact to this provider in year one is estimated at $22.4 million dollars and includes the increased budget in the implementation year to cover estimated float in that year. The total estimated loss annual of $15.8 million for hospital one assumes ongoing annual costs without the initial immediate float negative budget impact. Hospital Two is a large urban hospital with a payer mix that is 64% uninsured or Medicaid (43% uninsured or on charity; 21% Medicaid), and less than 15% commercial patients. It provided $1.5 billion in uncompensated care in the most recent reported fiscal year. The budgetary impact to this provider in year one is estimated at $21.4 million dollars and includes the increased budget in the implementation year to cover estimated float in that year. The total estimated loss annual of $13.8 million for hospital two assumes ongoing annual costs without the initial immediate float negative budget impact. 6 | P a g e The table below provides data on the impact to these two hospital members of a rebate program and is informed in part by experience in preparing to implement the rebate pilot. before the courts intervened and HRSA pulled down the pilot program. Impact Category Hospital 1 Hospital 2 Annual amount of cash float as the dollar difference between up front discounts and WAC payments required in rebate program for the pilot NDCs. This is the cash required annually to pay up front this difference and chase rebates. $ 119,542,766 $ 86,672,048 Cash float from budget impacts monthly from cash required to pay full up front full WAC vs. receiving discounts up front and loss of discount pricing. $ 7,200,000 $ 7,600,000 Cost of cash loss: Cash value of loss from up front payments required to manufacturers for the timeframe between purchase and rebates (if received). Compounded nationally for all Covered entities this costs of cash nationally will generate significant losses for CEs, and significant additional profits to the manufacturers. This assumes all bona fide rebates are paid. But with manufacturers making those decisions, we anticipated additional costs related to lost rebates. (See below). $ 288,000 $ 304,000 Loss of wholesale discounts: over half a million dollars annually ($570,000). The loss of 340B discount pricing affects other drug purchasing costs since that loss also causes a loss of 340B Subprime discounts. $ 570,000 Proprietary Amount Additional administration costs based on rebate pilot data and additional estimates for staffing, IT, contract and other costs conservative estimate of $620,000 in additional program costs annually (plus inflation). $ 620,000 $ 707,000 Bona Fide rebate losses and wastage loss costs annually with the limited set of rebate NDCs. We anticipate that 10% of bona fide rebates sought will be denied by manufacturers and/or their platform vendors which would generate . Our experience of challenges with the processes of 5 manufacturers now requiring claims data as a condition for ensuring access to 340B discount pricing supports our assumption that bona fide rebates will be denied. These issues include: all or nothing vendor BAA agreements, lack of requirement clarity and specificity, lack of detail needed to address data rejections and denials; etc. In addition costs of business waste percentages contribute to this anticipated loss total. $ 14,300,000 $ 12,810,000 Total Estimated Budget Impact Annual* $ 22,408,000 $ 21,400,000 Total Estimated Loss Annual $ 15,778,000 $ 13,821,000 Budget Impact annual includes additional costs to flow one month of costs. Total Estimated Loss includes estimated rebate payments to offset rolling float. *Totals for Hospital 2 do not include proprietary wholesale discount amounts lost. 7 | P a g e The impact to our members, the patients they serve and their ability to stretch scarce resources is significant. If HRSA chooses to move forward with a change to the 340B program, there are significantly less burdensome alternatives to rebates that HRSA could implement. For example, universal 340B claims modifiers could be implemented, and a singular neutral, third-party clearinghouse could be established. The Department of Health & Human Services could then require state Medicaid agencies to adopt a process like the Oregon Medicaids process of preventing Medicaid duplicate discounts. Claims could be collected from covered entities retrospectively, allowing Medicaid programs to exclude 340B claims from rebate requests. A similar process using the same clearinghouse at the federal level could be used to address MDPNP de-duplication. Claims denial through MDPNP should be strictly limited (e.g., duplicate claim from covered entity, missing required data) if allowed at all, visible in clearinghouse software, and manufacturers should be required to provide a detailed explanation for the denial and a mechanism to resubmit the denied claim. Covered entities should not have to supply purchasing (i.e., invoice) data. We also fully support the comments you will receive from Americas Essential Hospitals as well as the feedback you are receiving from the Front Line Hospital Alliance. Thank you for your consideration of our comments. Sincerely, Maureen Milligan, President & CEO Teaching Hospitals of Texas
HRSA-2026-0001-2129Caitlyn Ricco · GREENSBORO, PA, United States2026-04-20T04:00Z45,384 chars
Cornerstone Care urges HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. Community Health Centers already comply with extensive HRSA and 340B oversight. The rebate pilot would impose duplicative reporting, reconciliation, and dispute processes that require new IT systems and staffing without improving program integrity Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 3 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 4 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 11 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 14 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
HRSA-2026-0001-2130Louisiana Primary Care Association2026-04-20T04:00Z19,336 chars
See attached file(s) April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Louisianas 43 Community Health Centers (CHCs) and the half a million patients they serve, the Louisiana Primary Care Association (LPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, LPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, LPCA explains: A. The importance of 340B savings to Louisianas CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 500,000 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Louisiana, CHCs routinely rely on 340B savings to support services such as: dental care, SUD treatment, mental health services, school-based health programs, care coordination, case management and so much more. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Louisianas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub- ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that Louisianas CHCs have made to make plans for staff reductions and cuts to service lines. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly- prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low- income and uninsured patients to access affordable primary care, behavioral health care, and dental care depends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Raegan A. Carter, LPCAs Director of Health Policy & Governmental Affairs, at rcarter@lpca.net or (225) 927-7662, ext. 211. Sincerely, Gerrelda Davis Dr. Stacie Bland Executive Director Board President Louisiana Primary Care Association Louisiana Primary Care Association
HRSA-2026-0001-2131Amgen Inc.2026-04-20T04:00Z17,915 chars
Please see attached comment. Greg Portner Senior Vice President Global Government Affairs & Policy 601 Thirteenth Street, NW Suite 1100 North Washington, DC 20005 Phone: (202) 253-7965 Email: gportner@amgen.com www.amgen.com April 20, 2026 VIA ELECTRONIC DELIVERY https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Amgen Inc. (Amgen) appreciates the opportunity to submit comments in response to the Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI).1 In addition, Amgen is a member of the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) and supports their comments on this RFI. Amgen is a science-based, patient-driven company committed to using science and innovation to dramatically improve patient lives. Amgen is dedicated to improving patient access in the U.S. to innovator and biosimilar biological products and promoting high-quality care for patients. Amgen has a long history as an industry leader in U.S. biomanufacturing, and the company is investing heavily to continue growing its U.S. footprint. Amgen has invested $40 billion in U.S. innovation and manufacturing since 2018 and recently announced major investments in North Carolina, Ohio, and Puerto Rico to support increased production of biologic medicines. Our comments reflect our interest in policies that help safeguard program integrity, consistent with the 340B statute and the Administrations focus on reducing fraud, waste, and abuse. We support the 340B programs mission to strengthen access to medicines and reinforce the healthcare safety net for vulnerable patients who are uninsured or underinsured. However, we are concerned that insufficient oversight and accountability combined with rapid growth of the 1 91 Fed. Reg. 7287 (February 17, 2026). April 20, 2026 Amgen comments on HRSA-2026-03042 Page 2 of 7 program has created incentives for program expansion without commensurate benefits to vulnerable populations. The program today lacks even moderately sufficient transparency, which raises risks of illegal duplicate discounts and diversion. The adoption by covered entities and their commercial partners of the replenishment model (not supported by any language in the 340B statute) has created an increasingly opaque system that encourages arbitrage, diversion, and duplicate discounting. We support efforts to enhance the integrity, transparency, and sustainability of the 340B program to ensure it more effectively serves the patients it was designed to help. Despite clear statutory prohibitions on duplicate Medicaid and 340B discounts and on the diversion of 340B drugs to individuals who are not eligible patients, independent government watchdogs have consistently found existing safeguards to be insufficient. Program integrity concerns have also prompted calls for greater oversight and congressional investigations and hearings.2 Limited oversight has allowed some covered entities to obtain discounts for prescriptions that may fall outside program eligibility and the Inflation Reduction Act (IRA) and its byzantine implementation scheme have introduced additional layers of duplicate discount risk, increasing both the complexity of compliance and the urgency of strengthening program integrity controls. Although Amgen maintains that the 340B statute permits manufacturers to implement rebate models without prior HRSA approval, we commend HRSAs RFI as an important initiative toward developing and carrying out a 340B rebate model. A 340B rebate model offers a structured and transparent approach to quickly verify eligibility for improving the identification and prevention of duplicate discounts. We encourage HRSA to explore opportunities to expand its application across all covered outpatient drugs and in pursuit of broader 340B program compliance efforts. Ultimately, the goal should be a comprehensive rebate approach extending beyond IRA-selected drugs, given its broad operational and program integrity benefits across the entire 340B program. A well-designed rebate model would modernize the 340B program by aligning it with existing healthcare payment systems, improving accountability, and ensuring that discounts are applied only when eligibility is confirmed. Manufacturer Efforts to Avoid Duplicate Discounts (Question 5) a. Amgens procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices Today, only covered entities and their 340B administrators have definitive, claim-level visibility into which prescriptions are designated as 340B-eligible. Amgen does not have access to timely, claims-level data to independently verify these designations. This lack of transparency 2 See Senator Bill Cassidy, M.D., Chair of the Senate Health Education Labor Pensions Com. (119th Congress) Senate Committee on Health, Education, Labor, and Pensions (HELP) The 340B Program: Examining Its Growth and Impact on Patients (October 2025), Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program (April 2025). Hearing on Examining HRSAs Oversight of the 340B Drug Pricing Program Before the Subcommittee on Oversight & Investigations of the H. Comm. on Energy & Com., 115th Cong. 5 (2017) (testimony of Erin Bliss, Assistant Inspector Gen. for Evaluation & Inspections, U.S. Dept of Health & Hum. Servs. Off. of Inspector Gen.), https://oig.hhs.gov/documents/testimony/50/20170718_-_Bliss_Testimony.pdf April 20, 2026 Amgen comments on HRSA-2026-03042 Page 3 of 7 creates a persistent risk that Amgen may be required to provide overlapping price concessions, an issue that has long challenged the Medicaid program and is now even more acute under the IRA, where precise claim identification is essential for administering Maximum Fair Price (MFP) refunds. Amgens policies and procedures for identifying duplicate discounts with Medicaid involves a review of claim level detail against the Medicaid Exclusion file to determine eligible 340B Covered Entities. Chargeback (sales) data is then reviewed to determine if the eligible 340B Covered Entity made purchases at the 340B price. Amgen disputes claims that are determined to likely be duplicates to 340B discounts based on this analysis. Historically, resolving disputes for duplicate discounts has been extraordinarily challenging. This can be due to timeliness of updates to the Medicaid Exclusion File and waiting for states to reach out to the Covered Entity and respond back to Amgen on the dispute. States are often very slow to respond to requests for follow-up on disputes, likely due to limited staffing resources. b. Operational and Administrative Changes Implemented January 1, 2026 to Prevent 340B and MFP Duplicate Discounts Amgens subsidiary Immunex Corporation (Immunex) has had direct experience with the challenges of preventing 340B and MFP duplicate discounts. Immunex is the Primary Manufacturer of Enbrel (etanercept) for purposes of the Maximum Fair Price program and also participates in the 340B program with respect to Enbrel through its Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services. Following the halt of the 2025 Rebate Pilot, Immunex was forced to quickly implement an alternative approach to identify potential 340B claims using incomplete and indirect data sources. Immunex has implemented a structured approach to identify and manage potential 340B duplicate discounts using available program data and industry best practices. Operationally, this includes proactively assessing claims to determine whether they are likely associated with 340B utilization and adjusting payment decisions accordingly to prevent overlapping price concessions. However, in the absence of complete, claim-level visibility, this process is inherently complex and operationally burdensome. Given these limitations, Immunex was required to retain an external vendor which uses a well- established, industry-wide methodology to identify duplicate claims and incorporate the relevant data and analytical processes needed to deduplicate claims across the MFP program. This approach requires the use of evolving methodologies to revisit and refine determinations over time as new information becomes available, including ongoing monitoring of program data and incorporation of feedback from covered entities. These efforts reflect a broader administrative framework designed to reduce duplication risk, manage financial exposure, and maintain alignment with CMS expectations. However, the process is operationally burdensome and can require multiple rounds of discussions with covered entities to reconcile datapoints. As a result, Immunex faces increased administrative complexity and a heightened risk of paying duplicate discounts that are explicitly prohibited by April 20, 2026 Amgen comments on HRSA-2026-03042 Page 4 of 7 law, and that cannot be fully identified or prevented. Absent complete and timely data, the approach remains resource-intensive. c. Experience Since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDNP Immunexs experience since January 1, 2026, reflects the practical limitations of implementing requirements to prevent duplicate discounts between the 340B program and the MFP without access to complete and timely claim-level data. Immunex has applied an industry-wide methodology approach to identify duplicate claims that may be associated with 340B utilization, and where appropriate, has not provided access to the MFP to avoid paying duplicate discounts. As described above, these determinations rely on a process that is operationally burdensome and Immunex faces increased administrative complexity and a heightened risk of paying duplicate discounts that cannot be fully identified or prevented. d. Challenges encountered identifying potential duplicate discounts under 340B and CMS payment programs) Based on an analysis published by Berkley Research Group in April 2026, fewer than 0.5 percent of MFP claims had been self-identified as 340B by the pharmacy.3 In the absence of complete claim-level visibility, Immunex has implemented a structured framework to identify duplicate claims. However, this process is inherently complex, operationally burdensome, and risks duplicate discounts that cannot be fully identified or prevented. e. Minimum data elements necessary to identify duplicate discounts under 340B and CMS payment programs Access to relevant, transaction-level data is critical for manufacturers to determine whether a claim involves a 340B-eligible drug and to comply with program requirements, including the MFP de-duplication provisions. Amgen believes the data elements listed in Appendix A represent the minimum necessary for accurately assessing 340B rebate eligibility. Covered entities already maintain this information in readily shareable formats, and they regularly use this data to seek reimbursement from commercial and government insurers. Importantly, covered entities are required to maintain auditable records to demonstrate they are complying with the statute and not abusing the 340B program, 42 U.S.C. 256b(a)(5)(C). Any claim that production of this data would be operationally unfeasible is simply not credible. 3 See Blalock E. (April 2026). Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the- Maximum-Fair-Price-in-2026-and-Outlook-to-2027.pdf April 20, 2026 Amgen comments on HRSA-2026-03042 Page 5 of 7 The proposed elements described in Appendix A include three categories: (1) pharmacy claims data, (2) medical (physician-administered) claims data, which aligned with HRSAs 2025 Rebate Pilot, and (3) covered entity purchase data. Although HRSA did not include purchase data in the 2025 Rebate Pilot, Amgen believes it is essential for an effective rebate model. This data enables manufacturers to confirm that a covered entity purchased the drug in question and to validate the purchase price, both fundamental to ensuring compliance with 340B requirements. Without access to purchase data, manufacturers lack the ability to adequately verify transactions using limited wholesaler information. Program Integrity As the 340B program has grown into the second-largest federal prescription drug program surpassing both Medicare Part B and Medicaid drug spending and has become increasingly interconnected with other healthcare programs reforms are needed to modernize the program and ensure its long-term sustainability. At the same time, HRSAs oversight capacity has not kept pace with this growth. The expansion of contract pharmacy arrangements, increased hospital participation, and the proliferation of offsite child sites have added significant complexity, while HRSAs audit capacity has remained limited4 (and the practical ability of manufacturers to audit has shrunk to nil). Since 2015, HRSA has conducted roughly 200 covered entity audits annually reaching only a small fraction of participants each year and these audits consistently reveal high rates of noncompliance, including duplicate discounts and diversion.5 Against this backdrop, Amgen believes a rebate model represents a necessary evolution of the 340B program. The current upfront discount structure lacks sufficient safeguards to ensure compliance with statutory requirements, and the absence of timely, claims-level data creates a pay-and-chase dynamic in which improper discounts are difficult to detect or prevent. As the program continues to expand, these longstanding oversight challenges have only intensified. A rebate model would address these gaps by linking discounts to verified claims, ensuring they are applied only to eligible transactions. In doing so, it would improve transparency, reduce administrative inefficiencies, and provide manufacturers and regulators with the data needed to more effectively detect and prevent violations. Just as importantly, it would create an opportunity to furnish HRSA with more consistent, standardized data to better illuminate compliance trends and strengthen program oversight. With timely rebate payments and the use of existing data infrastructure, the model could enhance operational efficiency while promoting compliance with key statutory requirements, including the prohibitions on duplicate discounts and diversion. By improving visibility into program operations and enabling more targeted oversight, a rebate model offers a more reliable and sustainable path forward for the 340B program. 4 See GAO, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480, June 2018; Ryan Knox, et. al. Outcomes of the 340B Drug Pricing Program, JAMA Health Forum, 2023 Nov 22; 4(11):e233716. Doi: 10.1001/jamahealthforum.2023.3716. 5 ADVI. Analysis of HRSA 340B Covered Entity Audits, March 2025. April 20, 2026 Amgen comments on HRSA-2026-03042 Page 6 of 7 Conclusion Amgen appreciates HRSAs commitment to improving the 340B program and believes that a rebate model represents a critical step toward achieving greater transparency, accountability, and alignment with the programs original intent. By modernizing the programs structure and leveraging data-driven approaches all without asking more of covered entities than is already required of them under their compliance obligations HRSA can help ensure that the benefits of 340B are more effectively directed to the patients who need them most. We welcome continued engagement with HRSA and other stakeholders as the agency considers next steps and stands ready to support the development and implementation of a successful rebate model. * * * * * We appreciate HRSAs consideration of these comments. Please do not hesitate to contact Ruth Hoffman at (202) 203-9283 or ruth.hoffman@amgen.com if you have any questions. Sincerely, Greg Portner Senior Vice President Global Government Affairs & Policy April 20, 2026 Amgen comments on HRSA-2026-03042 Page 7 of 7 Appendix A: Data elements needed to Improved Implementation and Evaluation of a Rebate Model Pharmacy Claims Data Medical Claims Data Date of service Date prescribed Rx number Fill number 11 digit National Drug Code (NDC) Quantity Dispensed Prescriber ID Service provider ID 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) 11 digit NDC Quantity Date of service 340B ID Service provider ID Claim number (analogous to Rx number) Health plan ID & health plan name (analogous to Rx BIN & Rx PCN) Rendering physician ID (analogous to Prescriber ID) Claim line number Unit of measure Purchase data elements (for pharmacy and medical claims) Wholesaler Name Wholesaler Account Number Invoice Date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID
HRSA-2026-0001-2132Baxter Regional Medical Center2026-04-20T04:00Z22,345 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Baxter Regional Medical Center in Mountain Home, Arkansas, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Baxter Regional Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Baxter Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Baxter Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies 2 while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Baxter Regional Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Baxter Regional Medical Center spend significant sums on new administrative costs. When we chose to participate in the 340B program, Baxter Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Baxter Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. To maintain compliance with a Rebate Program would require Baxter Health to increase our current 340B team by at least one and possibly two full time employees. With the current applicant pool in our area, this process would take months. The position would be responsible for the following new tasks created by the rebate model: o Submits rebate requests to manufacturers post-dispense o Tracks claim status, denials, and resubmissions o Reconciles expected vs. actual rebate amounts o Monitors outstanding rebate payments o Manages aging reports and follow-up with manufacturers o Escalates underpayments or delays o Additional tracking of WAC pricing for Rebate Drugs on our 340B accounts. Additional IT resources will need to be utilized to monitor analyze the additional data feeds and programs. This could require up to an additional part-time employee. All of these functions will greatly exceed HRSAs estimate of only 5 hours per week in additional work. 3 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Baxter Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Changes will have to be made to our current Data Systems to monitor new parameters associated with the Rebate Pilot Program. Dashboards will have to be built and maintained for monitoring: o Rebate volume and value o Denial rates o Turnaround time Currently we are still working on the feed to provided all of the necessary information for medical claims data submission by our TPA. Because of the complexity of the of our EMR, we have to hire a 3rd party programmer to write the code for the reports. This process is only able to be validated via trial and error. It is very costly and time consuming. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Baxter Regional Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. As a Rural Referral Center, we currently arent required to make any WAC purchases. Since the Rebate Pilot Program required those drugs to be purchased on WAC pricing, Baxter Regional Medical Centers drug purchase on those 10 drugs will increase, from our current annual spend of $49,909 to $943,175, significantly amplifying the cash flow problem caused by delayed payments. We also have several of our largest contract pharmacies that are still opting out of the rebate model. These changes will bring the financial impact of the Rebate Pilot Program to well over $1,000,000, when it is one of few programs that keeps our facility financially sustainable. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means Baxter Regional Medical 4 Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We currently provide access to infusions to Medicaid patients in our infusion center that lose money for Baxter Regional Medical Center. The patients would otherwise be forced to travel over two hours to receive their infusions. We are able to provide this service because we use the 340B benefit from the infusion center to cover the losses. It is very likely that we will not be able to continue to offer this service to patients in our community if we experience a negative financial impact from the Rebate Pilot Program. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Baxter Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. 5 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Baxter Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. We currently have not had a drug manufacturer raise a 340B/MDPNP deduplication with our program. For all of these reasons, Baxter Regional Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Baxter Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, 6 Paul Ryan Killian, Pharm.D, BCPS Director of Pharmacy, Authorizing Official Baxter Regional Medical Center, Mountain Home, Arkansas The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Baxter Regional Medical Center in Mountain Home, Arkansas, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Baxter Regional Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Baxter Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Baxter Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Baxter Regional Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Baxter Regional Medical Center spend significant sums on new administrative costs. When we chose to participate in the 340B program, Baxter Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Baxter Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. To maintain compliance with a Rebate Program would require Baxter Health to increase our current 340B team by at least one and possibly two full time employees. With the current applicant pool in our area, this process would take months. The position would be responsible for the following new tasks created by the rebate model: Submits rebate requests to manufacturers post-dispense Tracks claim status, denials, and resubmissions Reconciles expected vs. actual rebate amounts Monitors outstanding rebate payments Manages aging reports and follow-up with manufacturers Escalates underpayments or delays Additional tracking of WAC pricing for Rebate Drugs on our 340B accounts. Additional IT resources will need to be utilized to monitor analyze the additional data feeds and programs. This could require up to an additional part-time employee. All of these functions will greatly exceed HRSAs estimate of only 5 hours per week in additional work. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Baxter Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Changes will have to be made to our current Data Systems to monitor new parameters associated with the Rebate Pilot Program. Dashboards will have to be built and maintained for monitoring: Rebate volume and value Denial rates Turnaround time Currently we are still working on the feed to provided all of the necessary information for medical claims data submission by our TPA. Because of the complexity of the of our EMR, we have to hire a 3rd party programmer to write the code for the reports. This process is only able to be validated via trial and error. It is very costly and time consuming. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Baxter Regional Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. As a Rural Referral Center, we currently arent required to make any WAC purchases. Since the Rebate Pilot Program required those drugs to be purchased on WAC pricing, Baxter Regional Medical Centers drug purchase on those 10 drugs will increase, from our current annual spend of $49,909 to $943,175, significantly amplifying the cash flow problem caused by delayed payments. We also have several of our largest contract pharmacies that are still opting out of the rebate model. These changes will bring the financial impact of the Rebate Pilot Program to well over $1,000,000, when it is one of few programs that keeps our facility financially sustainable. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means Baxter Regional Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. We currently provide access to infusions to Medicaid patients in our infusion center that lose money for Baxter Regional Medical Center. The patients would otherwise be forced to travel over two hours to receive their infusions. We are able to provide this service because we use the 340B benefit from the infusion center to cover the losses. It is very likely that we will not be able to continue to offer this service to patients in our community if we experience a negative financial impact from the Rebate Pilot Program. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Baxter Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Baxter Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. We currently have not had a drug manufacturer raise a 340B/MDPNP deduplication with our program. For all of these reasons, Baxter Regional Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Baxter Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Paul Ryan Killian, Pharm.D, BCPS Director of Pharmacy, Authorizing Official Baxter Regional Medical Center, Mountain Home, Arkansas
HRSA-2026-0001-2133(no commenter metadata)2026-04-20T04:00Z12,796 chars
See attached file(s) Electronically submitted via www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Response to Request for Information: 340B Rebate Model Pilot Program (HRSA 2026 03042) Introduction and Organizational Background The Health and Hospital Corporation of Marion County d/b/a Eskenazi Health (Eskenazi Health) is a public safety-net healthcare system located in Marion County, Indiana. For more than 160 years, Eskenazi Health has served as Indianas largest safety-net system, caring for all individuals regardless of ability to pay. More than seventy-five percent of our patients are covered by government sponsored insurance, primarily Medicaid, or are uninsured. Eskenazi Healths mission is inherently tied to caring for low-income and medically vulnerable individualsit is not part of our mission, it is our mission. By way of background, Eskenazi Health operates: The busiest Emergency Department in Indiana Eskenazi Health Center, a Federally Qualified Health Center (FQHC) with the largest number of patients served in Indiana A Regional Burn Center A Level I Trauma Center A Certified Community Behavioral Health Clinic that provides comprehensive mental health and addiction services These clinical programs all depend on consistent access to medications as a core component of patient care. Since the late 1990s, Eskenazi Health has participated in the 340B Drug Pricing Program, which has been essential to Eskenazi Healths financial stability and our ability to deliver charity care, sliding scale drug access, and comprehensive safety net services. Because of our payer mix and role as a super safety net provider, Eskenazi Health is uniquely exposed to financial, operational, and patient access harms associated with a rebate-based model. RFI Question 1: Whether HRSA Should Implement a 340B Rebate Model Eskenazi Health does not support implementation of a rebate-based model under the 340B Program. A rebate model would fundamentally restructure how 340B pricing is delivered by replacing statutory upfront discounts with retrospective manufacturer reimbursements. This approach shifts financial, operational, and compliance risk from manufacturers to covered entities, contrary to the statutory intent of the 340B Program. For safety net hospitals like Eskenazi Health, whose ability to serve vulnerable populations depends on predictable 340B savings, a rebate model would destabilize operations, strain liquidity, compromise confidential, financial, and patient data, divert resources from patient care, compliance, and program integrity, and reduce patient access to medications and other essential services. RFI Question 2: Operational Standards, Payment Timing, and Reconciliation Under the current 340B upfront discount model, Eskenazi Health purchases drugs at Wholesale Acquisition Cost (WAC), validates 340B eligibility at the point of dispensing or administration, and replenishes inventory at the 340B ceiling price for eligible uses. Savings are realized promptly and consistently, allowing those resources to be reinvested into patient care (including primary care and mental health services), charity care, and medication access programs. Under a rebate-based model, Eskenazi Health would be required to: Purchase drugs at WAC; Dispense medications to 340B-eligible patients; Replenish inventory again at WAC; and Wait for manufacturers to retroactively determine eligibility and issue rebates. This structure requires repeated upfront exposure to full WAC costs while delaying access to 340B savings that are critical to ongoing patient care and operational sustainability. Impact on Uninsured Patients For uninsured patients, Eskenazi Health offers low cost medications regardless of whether a prescription ultimately qualifies for 340B pricing. Because manufacturer determinations may occur after dispensing, there is inherent financial risk, and in some cases pricing may be based on WAC rather than confirmed 340B savings. Despite this uncertainty, Eskenazi Health assumes this risk today in order to avoid increasing barriers to medication access for uninsured patients. A rebate-based model would significantly expand this exposure and limit Eskenazi Healths ability to sustain these practices. RFI Question 3: Cash Flow, Liquidity, and Financial Risk A rebate model introduces a significant timing mismatch between drug payment obligations and rebate recovery. Average Daily Outpatient WAC Exposure Eskenazi Healths average daily outpatient drug spend at WAC is: Hospital outpatient services: $44,400 per day (based on 2025 340B savings) Outpatient pharmacies: $231,000 per day (based on 2025 340B savings) All contract pharmacy relationships are internal between grantees and DSH-owned pharmacies. This level of daily exposure represents substantial ongoing liquidity risk when 340B savings are delayed or disputed. Rebate Timing Constraints Eskenazi Health currently operates under semi-monthly payment terms with its wholesale drug supplier. Any rebate model requiring reimbursement beyond this timeframeincluding common rebate delays of 30 or 60 dayswould create immediate financial strain. Such delays would force Eskenazi Health to: Draw down limited operating reserves, or Delay or restrict inventory purchases. Given the volume and acuity of medications required to serve our patient population, extended rebate float is not operationally sustainable. Drug Categories with Greatest Exposure HIV, diabetes and oncology medications pose the greatest cash-flow and operational risk under a rebate-based model. For example, oncology medications have high acquisition costs and a narrow window between purchase and administration. These therapies cannot be safely delayed without direct harm to patients, yet repeated WAC exposure severely limits flexibility in inventory and purchasing decisions. RFI Question 4: Patient Access and Operational Impact A rebate-based model would directly and measurably reduce patient access to medications. If required to repeatedly cover WAC costs while awaiting rebates, Eskenazi Health would be forced to: More tightly control drug inventory, reducing days-on-hand; Require additional internal approvals prior to purchasing high-cost therapies; Limit stocking of certain medications to single locations; Increase courier use and staff management costs; and Delay treatment starts while pre-authorizations, purchasing, and logistics are completed. These changes would result in delayed therapy initiation, increased patient travel burdens, narrower formularies, and higher rates of rescheduling or canceled treatmentsparticularly in oncology and specialty care. Eskenazi Health is already experiencing access pressures due to drug cost volatility, including restricting certain expensive medications to centralized locations. A rebate-based model would significantly exacerbate these conditions. RFI Question 5: Administrative Burden, Reconciliation, and Institutional Cost Implementing a rebate-based model would impose substantial and permanent administrative costs on Eskenazi Health. In addition to significant staffing and IT expenses, reconciliation of rebate requests would be an ongoing, time-consuming, and burdensome activity required simply to ensure that Eskenazi Health receives savings to which it is statutorily entitled. Based on Eskenazi Healths actual experience with the Medicare Maximum Fair Price (MFP) Rebate Program, manufacturers routinely require submission of extensive historical claims data to support or contest rebate determinations. In practice, this has included requests to produce claims data from prior years in order to retroactively demonstrate that dispensing events from recent months were not 340B eligible. These reconciliation demands are operationally unreasonable and disconnected from how hospital pharmacy and inventory systems function. They consume significant staff time without meaningfully improving program integrity and result in covered entities expending administrative resources merely to receive rebates that other entities receive automatically at the point of sale. As a super safety net provider, Eskenazi Healths staff is already stretched thin. Under a rebate-based 340B model, we would face an untenable choice: either forgo rebates entirely because reconciliation is too burdensome to complete or hire additional staff simply to access the sameor potentially lesscost savings that Eskenazi Health has relied upon since joining the 340B Program in the 1990s. Eskenazi Health estimates that a rebate-based model would require the following staffing and other resources: Six (6) full-time analysts/technicians dedicated to data validation, dispute resolution, billing reconciliation, compliance, and audit support, at an annual cost of $606,750; One (1) full-time information systems analyst to support IT systems, applications, and reporting, at an annual cost of $190,000; Additional supervisory and management oversight to support expanded rebate operations; and Additional software or vendor platform costs, which could range from tens to hundreds of thousands of dollars annually. In total, Eskenazi Health estimates at least $900,000 per year in new ongoing administrative costs, diverting limited resources from direct patient care. RFI Question 6: IT, Data Governance, and Security Risk Manufacturer-required rebate platforms demand submission of detailed utilization data that may be recombined with PBM data and re-identified. These platforms often operate under non-negotiable terms of use that do not meet Eskenazi Healths data privacy, security, and governance standards. Eskenazi Health would not accept such terms in any other operational or clinical context, particularly where protected health information or sensitive utilization patterns are involved. RFI Question 7: Duplicate Discount Prevention and Superior Alternatives Eskenazi Health already prevents Medicaid duplicate discounts through multiple robust mechanisms, including: Registration in HRSAs Medicaid Exclusion File; Use of claim-level modifiers where applicable; Exclusion of 340B drugs from Medicaid claims in contract pharmacy settings; and Internal and independent external audits. A rebate-based model is not necessary to prevent duplicate discounts. Eskenazi Health supports an alternative model developed by the Front Line Hospital Alliance. The Front Line Hospital Alliances alternative pilot program fixes problems in the 340B program, including a realistic patient definition grounded in clinical care delivery, contract pharmacies that ensure patient discount at the time of dispensing, a changed definition of child site that simplifies the process and allows transparency into payer mix, drug purchases and service to vulnerable patients, and a neutral, HRSA-administered 340B data clearinghouse as a superior alternative. A centralized clearinghouse would: Preserve statutory upfront 340B pricing; Prevent duplicate discounts using standardized, authoritative data; Maintain HRSA oversight and enforcement authority; Support compliance and program integrity; Reduce administrative burden and data fragmentation; and Protect covered entities from discriminatory PBM reimbursement practices. Unlike manufacturer-controlled rebate platforms, a clearinghouse maintains shared responsibility for program integrity without shifting 100 percent of financial and operational risk to safety net providers. As a member of the Front Line Hospital Alliance, we endorse their comments submitted separately which provide more details on alternative pilot program models. Conclusion Eskenazi Health urges HRSA not to implement a rebate-based model under the 340B Program. A rebate model would shift risk to covered entities, impose unsustainable financial and administrative burdens, and undermine access to care for vulnerable patients. If HRSA determines that additional data exchange is necessary to prevent duplicate discounts, a centrally administered clearinghouse is the appropriate path forward. Eskenazi Health appreciates the opportunity to provide these comments and stands ready to assist HRSA in further evaluation. Sincerely, Lisa E. Harris, M.D. CEO, Eskenazi Health
HRSA-2026-0001-2134Portsmouth Community Health Center2026-04-20T04:00Z44,420 chars
340B savings are routinely reinvested by CHCs into: Slidingfee pharmacy services Behavioral health, dental, and enabling services Medication adherence programs Care for uninsured patients Delays, denials, or disruptions in rebate payments risk service cuts, reduced medication access, or pharmacy closures, especially in pharmacy deserts where CHCs may be the sole access point. This undermines the core statutory purpose of 340B: to stretch scarce federal resources to reach more patients oc 0 N R046 HEP\- April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Portsmouth Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Portsmouth Community Health Center anticipates a loss of 1 million from entity-owned pharmacy operations and for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. HRCHC provides high-quality, comprehensive primary, behavioral, and dental care services that are essential to advancing health equity in Portsmouth, Virginia. In response to the significant needs of our underserved Medicaid and Medicare populations, we have grown into a region-wide system of care that delivers a broad, integrated range of services and programs. These efforts ensure that residents of all agesregardless of income or insurance statushave access to the care they need to live healthier, more stable lives. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Nlodel Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Portsmouth Community Health Center in particular, this means it will impact: An estimated 3,215 claims/ how many patients does your CHC serve Current admin costs for your 340B program- estimate around 20,155 monthly How do you use your 340B revenue specifically? Our HCH program- help for the homeless, underinsured/no insurance patients, transportation We strongly urge HRSA to exempt CHCs from any rebate model to protect the fmancial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. IA-), I c). I I 61 circulationaha. 23.065748 4 Substance Abuse and Mental Health Ser ices Adininistration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-O7-OO7, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. tt w w w.samh sa.govidataidata-w e-col lect nsd u I-survey drug-tisc-aild-health:national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Ncurol. 2022 Feb 23:13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsagov) 3 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Portsmouth Community Health Center provided [2025 Sliding Fee Discount from UDSJ in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: : Portsmouth Community Health Center anticipates needing [Anticipated Additional FTE as a Result of Rebate Modell additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complcxitv. : Portsmouth Cornmunitl Health Center anticipates an increase of [Anticipated Additional Costs Related to Rebate Model] to costs for external support vendors. These vendors may include 340B consultants, legal 4 counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Recommended staffing: 8-9 employees Estimated annual cost: $300K-$400K Cost per patient: $13$18/year Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments" hrs per day will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens Portsmouth Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 22,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at S300K$400K annually. Internal NACHC assessment (99 responses). s Ibid. 5 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staffwho currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 35 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Hampton Roads Area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what 9 Vulnerability lndcx Approach to identify Pharmacy Deserts and Kcystonc Pharmacies i Pharmacy and Clinical Pharmacology JAMA Network Open i JAMA Nctwork m hups:Pwwwhealthatfa irs.org!doiiabs: O. 377.hlthaff.2024.00 92?ioumalCodehithaff " Internal NACHC survey data 6 was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription 12 HRSA FAQ 7 drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications. hased on a patient's income and family size. Portsmouth Community Health Center offers a sliding scale to patients who cannot afford their medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).t4 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 13 Such discounts are subject to potential legal and contractual restrictions. lutos:!!buhc.hrsa.govIcompliance'compliance- rn an u a lIchapter9# footnote I 0 "httns:ficnlivailicalth.coibloglyear-end-business-hailth-chcck-kev-inctrics-cycrv-nliarinacv-owner-should-revicw 8 To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost (39,580.00 based on a thirty-day supply ) to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends (13,920.00) to purchase these same drugs at the 340B ceiling price. This represents a [INSERT PERCENTAGE, e.g., 400%] increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Portsmouth Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as - Operating Hours: We anticipate needing to reduce our clinic hours per week, specifically impacting Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose 13 https:/!34Obpricing.hrsa.gov! httpsilwww.cms.gov/tilesiiiniselected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezitizip 9 the ability to fund [EXAMPLE: a full-time Community Health Worker or a Behavioral Health Consultant], directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a tnanufacturer, we cannot provide the "bridge" support that prevents our 22,0001 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Portsmouth Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Portsmouth Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves]. This is not a sustainable solution; the interest costs alone are estimated to be [$ AMOUNT] annuallyfunds that are currently dedicated to hiring additional nurse practitioners, Dental/Medical Mobile program]. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Portsmouth Community Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is 10 immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Portsmouth Community Health Center] urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative [INSERT PERCENT, e.g., 5%] denial rate would result in a net annual loss of [$ AMOUNT]. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.lederalregister.go %Alf/CUM entsi2025,08/0 l :2025-146 l9.340b-program-notice-application-process-for-the-340b- rebate-model-pilot-mogram 11 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 12 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Portsmouth Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Portsmouth Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Portsmouth Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Phyllis Spellman Director of Risk and Operations pspellman@hrchc.org Sincerely, 13 CEO NAME : Michele Bile Portsmouth Community Health Center 14
HRSA-2026-0001-2135Hawaii Primary Care Association2026-04-20T04:00Z24,322 chars
Hawaii Primary Care Association strongly opposes implementation of a mandatory 340B rebate model, particularly for Community Health Centers (CHCs), due to the severe and disproportionate harm it would cause to their financial stability, administrative capacity, and patient access to care. As detailed in the attached comments, a rebate model would impose untenable cash flow inversion, significant new administrative and IT burdens, and the loss of existing pharmacy discountsforcing CHCs to scale back essential services, reduce medication affordability, or discontinue dispensing certain drugs altogether. Because CHCs reinvest all 340B savings directly into care for low-income and medically underserved patients, any reduction in those savings leads directly to reductions in access and health outcomes. If HRSA proceeds with a rebate pilot despite these concerns, CHCs must be categorically exempt; alternatively, HRSA should pursue a neutral claims clearinghouse approach that achieves deduplication goals without undermining the safety net. See attached file for detailed comments. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Hawaiis 14 Community Health Centers (CHCs) and the nearly 160,000 patients they serve collectively, the Hawaii Primary Care Association (HPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements in conjunction with those previously submitted by our states CHCs, providing CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, HPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, set forth to achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs by designation of their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least, at minimum, six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, HPCA explains: A. The importance of 340B savings to Hawaii CHCs and for their abilities to provide high-quality, affordable primary care, behavioral health, and dental care to their collective 160,000 patients statewide: these patients are predominately low-income and uninsured patients, often residing in rural and isolated communities. B. How a rebate model will create insurmountable cashflow negation, administrative, and incur ancillary costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force many CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. 1 HRSA requested input on these in the first paragraph of the RFI summary. E. The minimum protections manufacturers shall be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating undue burden or instrumental harm. G. Why CHCs are most vulnerable to contract pharmacy forced carve-outs of 340B rebate model drugs. A. 340B SAVINGS UNDERWRITE A WIDE RANGE OF SERVICES THAT CHCS LOW-INCOME PATIENTS RELY ON. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had reported incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who are underinsured2. CHCs provided these patients with access to high- quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay, as a result, staying focused on their scope of service. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients, exercising the premise of the 340B reinvestment model. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source which underwrites many of the services that CHC patients rely on. For example, in Hawaii, CHCs routinely rely on 340B savings to support services such as: care coordination and patient navigation, nutrition supports for those food insecure, and transportation resources to medical and social service appointments. As explained below, the rebate model will significantly reduce the level of 340B savings CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in utility lead directly to reductions in care for CHC patients. As a result, the rebate model not only undermines patient access to affordable medications, but so too the broader system of care that CHCs have built to meet their patients needs. B. A REBATE MODEL WILL CREATE MASSIVE CASHFLOW INVERSION, ADMINISTRATIVE DIFFICULTY, AND AVENUE TO INCUR OTHER COSTS FOR CHCS. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at Wholesale Acquisition Cost (WAC) would have been between 50 to almost 500 times more than their current cost for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains or constraints. This 10-day turnaround framework addresses only one miniscule step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of capital, or require 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income access to liquidity. Comments submitted by Hawaiis CHCs will provide details on these financing needs, and illustrate in concert the rationales set forth herein. Moreover, CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings, including but not limited to any other statutory remedy afforded. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs, and make clear and evident the burden that would not just be expressed, but experienced. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) along with Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. THE COSTS RESULTING FROM A REBATE MODEL WILL INEVITABLY FORCE CHCS TO SCALE BACK SERVICES, REDUCE DISCOUNTS ON MEDICATIONS, AND POTENTIALLY SIGNIFICANTLY REDUCE PROVIDING REBATE DRUGS ENTIRELY RESULTING IN AVOIDABLE HARM TO PATIENTS HEALTH. Reduction in services: As required by applicable regulations, CHCs invest every penny of 340B savings into services which demonstrably expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) and create a cascade of events which will continue to reduce already constrained service provisions. Stopping dispensing rebate drugs: In the face of these mounting financial pressures, last autumn many CHCs (albeit reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve-out rebate drugs from 340B starting in the new year. Compared to all other CE types, CHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it conceivably more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients, thereby significantly reducing viable options. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate; CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will incur higher out-of-pocket costs, particularly for high-cost therapies, or specialty pharmacologics. This will lead to delays in starting or continuing treatment, increased non-adherence, leading to increased rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals could argue that CHCs are exaggerating how a rebate model will impact their operations and patient access; however, such an argument would be reductionistic at best; these claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade, and there is no foreseeable plan or affordance for such a future consideration. Given these pressures and demonstrating the highest costs of living in the nation, it is not surprising that CHCs in Hawaii have taken conservative approaches to hiring and compensation, and are forced to slow or curtail expansion of care enabling services clearly needed by patients addressing their whole person health. D. CHCS MUST BE EXEMPTED FROM ANY REBATE MODEL DUE TO THEIR HEIGHTENED VULNERABILITY TO THE VERY PRESSURES IT WOULD CREATE. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model to maintain current operations, let alone expand or invest in the expansion of care delivery forthcoming. E. IF HRSA INSISTS ON FORCING CHCS INTO A REBATE MODEL, MANUFACTURERS MUST BE REQUIRED TO INCORPORATE AT LEAST SIX CHC PROTECTIONS IN THEIR PLANS. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans, at minimum, including relevant safeguards in current practice: 1. For each rebate drug, a requirement to advance CHCs sufficient rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking or creating a model without uniform logic and flow, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. It is not inconceivable to understand the common practice of medication wasting while the term may have negative connotations, the principle has been long standing in medicine, and was structured to enhance patient safety. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Moreover, CHCs will have no determination on manufacturer packaging, and if not proposed to modulate thereof, can place manufactures to change their distribution units without any expressed or advanced notice, incurring harm to the CHCs. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. It must be considered that the proprietary information by and between contract pharmacies and CEs may cause inherent disruption, and if accepted, leads down to a pathway of incursion. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them, and should they not, enforce standards succinctly. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A NEUTRAL CLAIMS CLEARINGHOUSE WOULD PRODUCE MORE ACCURATE DEDUPLICATION AT A TINY FRACTION OF THE COST AND ADMINISTRATIVE BURDEN OF A REBATE MODEL. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure which is both seminal as the defined 340B program origination for more than three decades. G. CONCLUSION In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions to essential and ancillary services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- set forth to achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Emily Chung, echung@hawaiipca.net, 808-535-4611. Sincerely, Emily Q. Chung, MPH MCHES Chief Executive Officer Hawaii Primary Care Association 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2136Tri-Cities Community Health2026-04-20T04:00Z121,055 chars
Please see attached for full comment with data elements. Implementing a 340B Rebate program would create a massive administrative burden and prevent our safety net providers from serving our vulnerable patient populations who rely on the 340B drug program to afford essential medications. See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Tri-Cities Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs are reporting the potential loss of millions annually and high reductions in 340B savings as the costs for monitoring the program will increase under a rebate model. TCCH projects an increase 340B Program cost of $853,653 and approximately over $2 million loss in savings annually. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Tri-Cities Community Health is a medium sized FQHC comprised of 7 clinic locations, with 3 in-house pharmacies, two mobile medical units and one mobile dental clinic. It is located in southeastern Washington that serves 29,113 unique patients over 38 zip codes, 22% uninsured, 46% Medicaid and 6% Medicare. We provided $4,478,989 in sliding fee discounts to patients in the 2025 calendar year. Our services include Primary care, including walk-in services, Pediatrics, OB/Gyn, Dental, WIC/MSS, Behavioral Health, Vision, Clinical Pharmacy and Retail pharmacy. I. We Strongly Urges HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Tri-Cities Community Health in particular, this means it will impact: 117,351 prescriptions/transactions and 29,113 patients served Increase our administration costs significantly by $853,653 annually Reduce savings by approximately $2 million Our organization passes savings on directly to all of our sliding fee eligible patients, charging them a nominal fee ($0 to $11) plus the acquisition cost of the drug which allows them to purchase their medications at a rate they can actually afford. Additional savings goes towards supporting underfunded programs such as behavioral health, SUD, community health workers, and clinical pharmacy services and vaccinations for uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. NACHC has significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic 3 conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. NACHC is deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing 5 contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. NACHC urges HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with our consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Tri-Cities Community Health provided $4,478,989 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Tri-Cities Community Health anticipates needing 3.2 FTEs that equates to an additional $321,565 in wages, in addition to the current 3.7 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Tri-Cities Community Health anticipates an increase of $58,174 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 At TCCH we have estimated that we will need an additional 3.2 FTEs to assist with the management of the requirements of the 340B program. We have already had an extensive increase in workload managing the 340B program with the manufacturer 7 Internal NACHC assessment (99 responses). 6 policy requirements of data submissions and data validation processes, creating the need for an additional pharmacy analyst position, additional finance staff time, additional pharmacy management time and increasing the amount of time leadership spends on data analysis by 0.2 FTE, which results in an increased FTE time of 3.2. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. At TCCH we estimate an additional upfront cost of at least $75,000 for recruitment and training for each newly hired employee. In addition to the recruiting/training costs, the salaries of the employees needed for burden of the rebate program will increase labor costs approximately $321,565 annually for the roles it will require to maintain compliance and monitoring. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. It is estimated that will require a minimum of 8 hours per week to upload rebate claims data, an additional 30-40 hours per week per platform (MTF/MFP Beacon/340B Rebate platform monitoring, 40-60 hours per week investigating issues and reconciling claims data, and 20-30 hours of managing software updates to ensure appropriate data is captured, and 10-20 hours per week of management and financial oversight. This estimated additional time will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. the lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Tri-Cities Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. NACHC encourages HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. 8 Ibid. Commented [RA1]: This is an estimation from the time it took me to prepare for the last time a rebate was intended to start. 7 Total Cost: For our CHC, which serves 29,113 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2,853,653 annually and does not include the lost savings of over $2million dollars and increased cost of obtaining the drugs our patients need. . . The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This will create additional costs for building financial reporting and reconciling accounts. With our slide fee patients, we pass on savings directly to our patients based on the 340B acquisition cost. If we are forced to purchase at WAC then we would have to bill our slide fee patients WAC + the nominal fee (for our organization it is $0 to $11) resulting in the loss of the 340B discount to our patients. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. TCCH anticipates spending about $15,000 in work hours to implement the changes needed for a rebate program with our inhouse pharmacy software vendor. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 42 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 3 TPAs for 42 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Tri-Cities and surrounding area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network Commented [RA2]: This is value from estimated carve outs from our TPAs on the rebate program 8 exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9 confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At TCCH our slide patients are only charged a nominal fee based on family size and income ($0 to $11) plus the acquisition cost of the drug per our policies, however with a rebate model our acquisition cost will go up to WAC price and we would not be able to pass on the 340B saving directly to our uninsured and underinsured patients. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. NACHC appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. NACHC is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. NACHC respectfully requests that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with our consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3.94 million annually in 2026 and $6.56 million annually in 2027 to purchase these 10 drugs under the proposed rebate model, this includes interest charged by the wholesaler when not paid by 7 days while awaiting rebate from manufacturers. Currently, our organization spends $206,446 annually (for 2026) to purchase these same drugs at the 340B ceiling price. This represents a 655,191% in 2026 and 418747% in 2027 increase respectively in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Tri- Cities Community Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as [EXAMPLE: our mobile health unit that provides immunizations to rural school districts / our medication therapy management (MTM) program for complex diabetic patients]. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or time with a clinical pharmacist, or behavioral health specialist. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,404 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Tri-Cities Community Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 12 Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Tri- Cities Community Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,016,082.11. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Tri-Cities Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 323,193.22 in 2026, $535,855.61 in 2027 and $558,041.19 in 2028 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $ 58,174.78 annuallyfunds that are currently dedicated to Clinical Pharmacy services, community health worker services, behavioral health services and our patient discount for prescription medications Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Tri-Cities Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Tri-Cities Community Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without 13 providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $596,212.58 in 2026, $1,016,082.11 in 2027 and $1,067,300.57 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. A rebate model would also create issues with cash flow. When purchasing drugs at WAC, our 30 day cash on hand spend would increase by $323,193 each month in 2026 up to $558,041monthly in 2028. If we are not able to pay weekly for our products, we incur interest on our wholesaler accounts. There is also a risk that full package sizes may not be used and a rebate would never be issued, or the product purchased at WAC would expire prior to dispensing and we would not receive credit for the product purchased at full WAC price. If purchased at 340B prices, the financial burden of shrink or loss would be minimized. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. NACHC requests that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 15 The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. NACHC is concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. NACHC respectfully requests that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, NACHC recommends that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 16 Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 17 standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. NACHC requests that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, NACHC requests that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 18 CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In 23 Internal NACHC survey data 19 alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy 20 should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 21 nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts 28 42 U.S.C. 256b(a)(1) 29 Id. 22 The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 23 high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. 35 See 42 U.S.C 256b(a)(5)(A). 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). 24 A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 25 Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 26 dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 27 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 45 32 C.F.R. 199.21(q)(2)(iii)(E) 28 manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.50 Drug industry data vendors have reported that such data 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 29 is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 NACHC believes that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. NACHC contends that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 30 access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. NACHC harbors significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 59 42 U.S.C. 256b(a)(5)(B) 31 which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse NACHC recommends OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 32 This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a 33 voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 34 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Tri-Cities Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Tri-Cities Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 35 Tri-Cities Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Regina Ahl, Director of Pharmacy (rahl@mytcch.org) Sincerely, Regina Ahl Director of Pharmacy Tri-Cities Community Health
HRSA-2026-0001-2137La Familia Medical Center2026-04-20T04:00Z45,808 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of La Familia Medical Center (LFMC) dba La Familia Health (LFH), a FQHC in Santa Fe New Mexico, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. La Familia Medical Center has provided comprehensive high-quality medical, dental and behavioral health care to generations of low-income individuals and families in Santa Fe County and the surrounding areas since 1972. Approximately 43% or 2 in 5 of LFMCs patients are uninsured, the second highest percentage of uninsured patients of New Mexicos 21 FQHCs and Look-alike organizations. LFMCs uninsured patient rate increased by 5% over the last two years while the number of Medicaid patients decreased the same amount, falling to 25%. LFMC patients depend upon the organizations 340B pharmacy for affordable medications for chronic and life- threatening conditions. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For La Familia Health in particular, this means it will impact: In 2025, a total of 40,784 340B prescriptions were dispensed and 14,891 patients served annually. La Familia uses 340B program revenue to support our operating budget, widening the gap between uncompensated care and limited funding. Revenue from the 340B program has created financial stability for the organization. The Rebate Pilot Program will put direct constraints on this financial support for our institution. Administrative costs for our 340B program during the 2025 calendar year totaled $963,176.63. These expenses are supported by 340B program revenue. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: La Familia Medical Center provides $1,856,510 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: La Familia Medical Center anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, La Familia Medical Center anticipates an increase of $25,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 25 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. La Familia Medical Center estimates that an additional 20 hours per week (0.5 FTE) will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. La Familia Medical Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 15,000 patients, the total projected increase in expenses, including labor, IT, and carrying costsis estimated at $50,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Currently La Familia Medical Center operates with two completely separated systems, eClinicalWorks for our EHR, and DRX for our PMS. These platforms do not provide interoperability, and extensive work would be needed to get the two platforms anywhere close to cross-communicating. There is no known 340B compliance package or tool for eClinicalWorks, which would result in manual labor and review of all Rebate Model requirements. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Given that our current EMR is not able to provide native solutions for interoperability, our organization would need to add on additional services from outside vendors in order to complete the requirements these new demands. We anticipate the upfront costs for additional software to be $100,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 42 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 42 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Santa Fe County and surrounding areas with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 8 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Currently, La Familia Medical Center uses the 340B drug discount program to provide patients with medications at low cost, specifically newer (novel) pharmaceutical agents that have an extremely elevated out-of-pocket retail price tag. These drug discounts help to spread scarce resources to a population of uninsured and underinsured individuals who would otherwise not have access to these medications. Without access to affordable medications, these patients would be forced to utilize older, cheaper medications that do not have as robust of clinical impact as the newer, more expensive pharmaceutical agents. Patient care, outcomes, morbidity, and mortality would be directly impacted by these changes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $4,942,575.58 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $468,569.73 to purchase these same drugs at the 340B ceiling price. This represents a 961856% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, La Familia Medical Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our highly successful Diabetes Education program which exceeds HRSA Quality Measures by 10%. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund an additional Community Health Worker in our Diabetes Education program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 6,326 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. La Familia Medical Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, La Familia Medical Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $683,418.95. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 11 La Familias Data: La Familia Medical Center estimates that purchasing the 25 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $366,535.40. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit in order to cover these increased expenses. A recent study by IQVIA estimated that for small entities, like La Familia Medical Center, the cost to borrow money would be 18% interest. This is not a sustainable solution; the interest cost of borrowing money would force our organization to terminate services that are currently funded through 340B revenue. These 340B program revenue funds are currently dedicated to general operating expenses for our uninsured patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on La Familia Medical Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays La Familia Medical Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 25 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $668,927.10. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 13 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion La Familia Medical Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it 14 operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. La Familia Medical Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. La Familia Medical Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Maya Hardman, Pharmacy Director for La Familia Medical Center at mhardman@lfmctr.org. Sincerely, Brandy Van Pelt Ramirez, LMSW, FACHE Chief Executive Officer La Familia Medical Center bvanpelt@lfmctr.org
HRSA-2026-0001-2138Wickenburg Community Hospital2026-04-20T04:00Z42,978 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Wickenburg Community Hospital in Wickenburg, AZ, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Wickenburg Community Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Wickenburg Community Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Wickenburg Community Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug 2 companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Wickenburg Community Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Wickenburg Community Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Wickenburg Community Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In order to effectively run this program, our facility would need add 2.0 FTE (~$125,00 annually) along with costly third party vendors (~$25,000 annually). If a rebate program were to grow, so would our administrative and operational costs. As a potential rebate program grows, our 340B compliance program would need to grow even larger just to ensure our covered entity is compliant. With the current model, we are able to track our 340b accumulations and purchases with relatively low hours of manual labor. Being able to rely on our TPA as well as in-house auditing allows our Critical Access Hospital to use the current 340B funds in other areas to enhance and provide better patient care. The flow of a rebate program would significantly increase the labor necessary to submit claims to a rebate program. Although our TPA has created reports within their system to allow for an ease of claims submission, this is for a small amount of claims specifically. Having to reconcile rebates with claims that are weeks old will create a burden, especially given the difficulty of currently trying to avoid duplicate discounts between MFP rebates as well as 340B claims. This entire process doesnt even address the potential difficulty if a manufacturer incorrectly denies a potential 340B rebate that we are now forced to challenge to attempt to recoup that rebate that currently would not need any challenge previously. With any new program comes with having to gather legal advice/consulting services (~$50,000) to ensure that guidelines of a new rebate program are being followed as intended. In turn, this also means extra training will need to take place with current 340B compliance employees as well as those indirectly effecting the 340B compliance program. 3 In our estimation, with the added costs including but not limited to: FTEs, the additional third-party vendor assistance, legal fees, consultation fees, and training any potential rebate program threatens to slash our 340B savings in half. Currently, our mechanism to acquire drugs at 340B price is seemingly easy. Our compliance team for a facility our size is reasonable given the current mechanisms. By adding the rebate policy, it would add several steps to ensure data is gathered and submitted to manufacturer for a potential rebate, rather than an immediate cost savings. By moving to a rebate model, 340B savings are not realized as swiftly leading to financial issues as the 340B program allows for Critical Access Hospitals such as us rely on to keep doors open. Rather than rely on our own data in our current process, in order to maximize 340B savings, our entity will now need to hire additional FTEs in order to realize these savings. For rural facilities such as ours, it can be rather difficult to find adequate staff in order to fulfill these FTEs. Staffing Impacts Under a Potential 340B Rebate Program. Wickenburg Community Hospital does not currently have the staff needed to comply with a Rebate Program. Given that we are a Critical Access Hospital, we would have no choice but to look to create 340B compliance positions in order to maximize potential 340B savings. The current models burden has our 340B compliance stretched thin, though we manage. Any rebate model would force entities such as ours to hire new positions due to the already difficult task of keeping patient care/administrative positions staffed adequately. In our estimation, we would be required to hire two additional full-time employees to our current 340B compliance team. With the manufacturer restrictions for contract pharmacies, we were unable to hire additional staff to meet the data submission requirements. With a rebate model, this would force our facility to hire the additional staff to be able to collect data, submit data to 340B ESP, cross reference any MFP rebate payments to ensure no duplicate discounts, to reconcile any outstanding potential rebate payments from manufacturers, and to challenge any denials from manufacturers that decide against providing the necessary rebate. In order to properly install these additional FTEs to our facility and 340B compliance team, we would require at least 6 months. HRSA has estimated that covered entities would need only 5 hours per week in additional work in order to properly comply with any new rebate program. 4 Although facilities such as us may be smaller in size, we have created a significantly sized hospital-owned retail pharmacy for our community. Given the volume of claims that would need to be worked to completion, 5 hours per week is a gross underestimation of what covered entities would actually need to realize any 340B rebate savings. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Wickenburg Community Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. In our facilitys case, we would need to work closely with a third party vendor to scrape our EMRs data to continue to fulfill the 340B qualifying claims. Adding a rebate program to the mix will potentially have us further tweak what has already been months worth of work and testing to ensure program integrity. Even with minor tweaks, hours and testing can be quite a financial burden since we do not have an in-house service to pull that raw data from our EMR. Estimates for costs for system development and integration for a potential 340B Rebate Model would include up to $50,000 one-time set up fees and potentially increased TPA recurring rates due to the additional data collection and submission to a separate software. With the potential rebate model, including the medical claims will end up being significantly burdensome given the sheer amount of individual claims that will need to be submitted, tracked, and reconciled. For the retail, outpatient side, those claims end up being less burdensome due to filling 30 or 90 day supplies for patients. On the medical, hospital side, these claims are line by line, with some medications administered multiple times a day. With how these accumulations are currently tracked each individual administration would be its own individual claim to be submitted. This fact alone of having to collect this data and submit this data and reconcile this data would end up being the most significant time consumption of the entire proposed rebate model process. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 5 o Currently, we contract with a third party vendor to assist us in all of our data gathering to ensure compliance with 340b dispensations. In order for this vendor to maintain all of this data, we have to contract with a separate third party vendor to extract and collect all of that dispensation data from our electronic health record. This is to better determine what dispensation data qualifies as 340B eligible or not. Due to the volume of data, we rely on the first vendor to maintain and retain this data with a virtual inventory model to assist our entity to stay in program compliance. o If a 340B Rebate Model were to move forward, we would then have to alter our current data collection activities and reporting from the above vendors to our 430B Third-Party Administrator. Having to alter this data collection will result in an upfront charge as well as ongoing maintenance charges for our facility. Since data collection for the mixed-use (hospital) side is per administration to each patient and requires more data fields than our current settings, which is where the additional costs are incurred. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Wickenburg Community Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. o Given that a current model has our entity realizing savings within days, a rebate model with delayed realized savings would have a significant negative impact on our facilitys finances. Being a Critical Access Hospital, Wickenburg Community Hospital heavily relies on the 340B program to keep our finances stabilized. If a Rebate Pilot were to take place, it is a guarantee that covered entities would not be receiving these realized savings within a timely manner. Even with the assumption above of us receiving the rebate within 10 days, it creates a much tougher situation financially for our institution having to pay GPO price up front for the medication we typically receive 340B savings on. In our experiences, having to pay GPO price up front for all medications leads to our facilities medication related expenses increase by 200%. o With the potential of a Rebate Pilot, the suggestion is that covered entities would be able to realize their 340B rebate savings within a 10 day window. We believe that there would be a significant issue from within the entirety of the program itself to 6 ensure that covered entities would be reimbursed within the required window. Given the reality of Critical Access Hospitals having to sometimes operate with a smaller than desired Days Cash on Hand, for example, us with only 15 days cash on hand for March, any delay of payment could absolutely be detrimental our health care facility. With this rebate program, covered entities are being forced to float finances to the drug manufacturers and which puts other hospital programs or payments to other vendors outside of the pharmaceutical industry in jeopardy. Any scenario in which a covered entity does not realize these 340B savings immediately as the current model does, it puts all other programs within the hospital at a higher risk of needing to be discontinued in order to account for the floating lag of cash flow that would be in place with a Rebate Pilot. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Wickenburg Community Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. o Without hiring additional staff to best ensure we get all of the 340B benefits in a timely manner, Wickenburg Community Hospital faces the reality of having to possibly shut down any of our elective services as well as other potential projects. Here at Wickenburg Community Hospital, we are attempting to expand health care services to those patients who otherwise would have no access. We serve approximately 3,300 square miles serving patient across Arizonas Central, Western, and Northern region. With having to float finances due to the Rebate Program as well as hire and pay for additional services in order to maintain the 340B compliance, expanding and maintaining healthcare would make the expansion project significantly more difficult. o Given our location, our payor mix relies heavily on Medicare and Medicaid, making any potential rebate program that much more detrimental since the vast majority of our claims would be filtered through the 340B Rebate program. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed 7 premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Wickenburg Community Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. With the 340B landscape having changed so drastically over the last few years, our covered entity has had to trim back our contract pharmacy agreements, which means significantly trim back our financial expectations of the 340B program as it exists. More and more restrictions have been placed within the 340B landscape and if a Rebate Model were to come into play, many covered entities may find themselves in more danger than they are currently. In order to counteract the contract pharmacy restrictions from manufacturers and rising TPA costs, we have opened up our own in-house pharmacy to help us maximize our 340B benefit while limiting increasing costs and expenses. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon has a number of issues with its platform, including its terms and conditions. o Within the Terms and Conditions; Beacon requires covered entities to grant Beacon with worldwide, sublicensable, perpetual, and irrevocable license to our data, meaning once they obtain it Beacon is in full control of our data. Beacon has self-limited any responsibility if there are any issues that arise. Beacon has expressly listed their liability cap of only $1,000 which is an exponentially significant financial difference given the amount of finances that are wrapped up in this MFP and Rebate program. 8 Beacons terms list that we indemnify them, meaning we are required to defend and pay for claims against them that may arise from our use of the platform and our data. Beacon states they can terminate access at any time. Beacon has no obligation to return our data. Beacon has the right to change the terms unilaterally meaning they have the ability to make any changes they want without explicit consent. Beacon has limited all disputes to be handled within the jurisdiction of Illinois and has waived users rights to bring along any class actions. Beacon takes no responsibility for data accuracy, even if they are at fault. o Beacon has already raised red flags within their system to assist covered entities on determining dispensations to be either a 340B claim or an MFP claim. While they are gathering and collecting data, their methods of matching dispensations remain unclear. With their methods remaining unclear, it forces us as the entity to be doubly responsible for not only tracking our own data, but how Beacon matches their data as well to ensure our covered entity is seeing the benefit it is supposed to see within the 340B program. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Wickenburg Community Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Wickenburg Community Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA 9 therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Wickenburg Community Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brian Schuele Director of Pharmacy Wickenburg Community Hospital Located in Wickenburg, AZ The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Wickenburg Community Hospital in Wickenburg, AZ, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Wickenburg Community Hospital that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Wickenburg Community Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Wickenburg Community Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Wickenburg Community Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Wickenburg Community Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Wickenburg Community Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In order to effectively run this program, our facility would need add 2.0 FTE (~$125,00 annually) along with costly third party vendors (~$25,000 annually). If a rebate program were to grow, so would our administrative and operational costs. As a potential rebate program grows, our 340B compliance program would need to grow even larger just to ensure our covered entity is compliant. With the current model, we are able to track our 340b accumulations and purchases with relatively low hours of manual labor. Being able to rely on our TPA as well as in-house auditing allows our Critical Access Hospital to use the current 340B funds in other areas to enhance and provide better patient care. The flow of a rebate program would significantly increase the labor necessary to submit claims to a rebate program. Although our TPA has created reports within their system to allow for an ease of claims submission, this is for a small amount of claims specifically. Having to reconcile rebates with claims that are weeks old will create a burden, especially given the difficulty of currently trying to avoid duplicate discounts between MFP rebates as well as 340B claims. This entire process doesnt even address the potential difficulty if a manufacturer incorrectly denies a potential 340B rebate that we are now forced to challenge to attempt to recoup that rebate that currently would not need any challenge previously. With any new program comes with having to gather legal advice/consulting services (~$50,000) to ensure that guidelines of a new rebate program are being followed as intended. In turn, this also means extra training will need to take place with current 340B compliance employees as well as those indirectly effecting the 340B compliance program. In our estimation, with the added costs including but not limited to: FTEs, the additional third-party vendor assistance, legal fees, consultation fees, and training any potential rebate program threatens to slash our 340B savings in half. Currently, our mechanism to acquire drugs at 340B price is seemingly easy. Our compliance team for a facility our size is reasonable given the current mechanisms. By adding the rebate policy, it would add several steps to ensure data is gathered and submitted to manufacturer for a potential rebate, rather than an immediate cost savings. By moving to a rebate model, 340B savings are not realized as swiftly leading to financial issues as the 340B program allows for Critical Access Hospitals such as us rely on to keep doors open. Rather than rely on our own data in our current process, in order to maximize 340B savings, our entity will now need to hire additional FTEs in order to realize these savings. For rural facilities such as ours, it can be rather difficult to find adequate staff in order to fulfill these FTEs. Staffing Impacts Under a Potential 340B Rebate Program. Wickenburg Community Hospital does not currently have the staff needed to comply with a Rebate Program. Given that we are a Critical Access Hospital, we would have no choice but to look to create 340B compliance positions in order to maximize potential 340B savings. The current models burden has our 340B compliance stretched thin, though we manage. Any rebate model would force entities such as ours to hire new positions due to the already difficult task of keeping patient care/administrative positions staffed adequately. In our estimation, we would be required to hire two additional full-time employees to our current 340B compliance team. With the manufacturer restrictions for contract pharmacies, we were unable to hire additional staff to meet the data submission requirements. With a rebate model, this would force our facility to hire the additional staff to be able to collect data, submit data to 340B ESP, cross reference any MFP rebate payments to ensure no duplicate discounts, to reconcile any outstanding potential rebate payments from manufacturers, and to challenge any denials from manufacturers that decide against providing the necessary rebate. In order to properly install these additional FTEs to our facility and 340B compliance team, we would require at least 6 months. HRSA has estimated that covered entities would need only 5 hours per week in additional work in order to properly comply with any new rebate program. Although facilities such as us may be smaller in size, we have created a significantly sized hospital-owned retail pharmacy for our community. Given the volume of claims that would need to be worked to completion, 5 hours per week is a gross underestimation of what covered entities would actually need to realize any 340B rebate savings. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Wickenburg Community Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. In our facilitys case, we would need to work closely with a third party vendor to scrape our EMRs data to continue to fulfill the 340B qualifying claims. Adding a rebate program to the mix will potentially have us further tweak what has already been months worth of work and testing to ensure program integrity. Even with minor tweaks, hours and testing can be quite a financial burden since we do not have an in-house service to pull that raw data from our EMR. Estimates for costs for system development and integration for a potential 340B Rebate Model would include up to $50,000 one-time set up fees and potentially increased TPA recurring rates due to the additional data collection and submission to a separate software. With the potential rebate model, including the medical claims will end up being significantly burdensome given the sheer amount of individual claims that will need to be submitted, tracked, and reconciled. For the retail, outpatient side, those claims end up being less burdensome due to filling 30 or 90 day supplies for patients. On the medical, hospital side, these claims are line by line, with some medications administered multiple times a day. With how these accumulations are currently tracked each individual administration would be its own individual claim to be submitted. This fact alone of having to collect this data and submit this data and reconcile this data would end up being the most significant time consumption of the entire proposed rebate model process. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, we contract with a third party vendor to assist us in all of our data gathering to ensure compliance with 340b dispensations. In order for this vendor to maintain all of this data, we have to contract with a separate third party vendor to extract and collect all of that dispensation data from our electronic health record. This is to better determine what dispensation data qualifies as 340B eligible or not. Due to the volume of data, we rely on the first vendor to maintain and retain this data with a virtual inventory model to assist our entity to stay in program compliance. If a 340B Rebate Model were to move forward, we would then have to alter our current data collection activities and reporting from the above vendors to our 430B Third-Party Administrator. Having to alter this data collection will result in an upfront charge as well as ongoing maintenance charges for our facility. Since data collection for the mixed-use (hospital) side is per administration to each patient and requires more data fields than our current settings, which is where the additional costs are incurred. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Wickenburg Community Hospital to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Given that a current model has our entity realizing savings within days, a rebate model with delayed realized savings would have a significant negative impact on our facilitys finances. Being a Critical Access Hospital, Wickenburg Community Hospital heavily relies on the 340B program to keep our finances stabilized. If a Rebate Pilot were to take place, it is a guarantee that covered entities would not be receiving these realized savings within a timely manner. Even with the assumption above of us receiving the rebate within 10 days, it creates a much tougher situation financially for our institution having to pay GPO price up front for the medication we typically receive 340B savings on. In our experiences, having to pay GPO price up front for all medications leads to our facilities medication related expenses increase by 200%. With the potential of a Rebate Pilot, the suggestion is that covered entities would be able to realize their 340B rebate savings within a 10 day window. We believe that there would be a significant issue from within the entirety of the program itself to ensure that covered entities would be reimbursed within the required window. Given the reality of Critical Access Hospitals having to sometimes operate with a smaller than desired Days Cash on Hand, for example, us with only 15 days cash on hand for March, any delay of payment could absolutely be detrimental our health care facility. With this rebate program, covered entities are being forced to float finances to the drug manufacturers and which puts other hospital programs or payments to other vendors outside of the pharmaceutical industry in jeopardy. Any scenario in which a covered entity does not realize these 340B savings immediately as the current model does, it puts all other programs within the hospital at a higher risk of needing to be discontinued in order to account for the floating lag of cash flow that would be in place with a Rebate Pilot. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Wickenburg Community Hospital will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Without hiring additional staff to best ensure we get all of the 340B benefits in a timely manner, Wickenburg Community Hospital faces the reality of having to possibly shut down any of our elective services as well as other potential projects. Here at Wickenburg Community Hospital, we are attempting to expand health care services to those patients who otherwise would have no access. We serve approximately 3,300 square miles serving patient across Arizonas Central, Western, and Northern region. With having to float finances due to the Rebate Program as well as hire and pay for additional services in order to maintain the 340B compliance, expanding and maintaining healthcare would make the expansion project significantly more difficult. Given our location, our payor mix relies heavily on Medicare and Medicaid, making any potential rebate program that much more detrimental since the vast majority of our claims would be filtered through the 340B Rebate program. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Wickenburg Community Hospital reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. With the 340B landscape having changed so drastically over the last few years, our covered entity has had to trim back our contract pharmacy agreements, which means significantly trim back our financial expectations of the 340B program as it exists. More and more restrictions have been placed within the 340B landscape and if a Rebate Model were to come into play, many covered entities may find themselves in more danger than they are currently. In order to counteract the contract pharmacy restrictions from manufacturers and rising TPA costs, we have opened up our own in-house pharmacy to help us maximize our 340B benefit while limiting increasing costs and expenses. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon has a number of issues with its platform, including its terms and conditions. Within the Terms and Conditions; Beacon requires covered entities to grant Beacon with worldwide, sublicensable, perpetual, and irrevocable license to our data, meaning once they obtain it Beacon is in full control of our data. Beacon has self-limited any responsibility if there are any issues that arise. Beacon has expressly listed their liability cap of only $1,000 which is an exponentially significant financial difference given the amount of finances that are wrapped up in this MFP and Rebate program. Beacons terms list that we indemnify them, meaning we are required to defend and pay for claims against them that may arise from our use of the platform and our data. Beacon states they can terminate access at any time. Beacon has no obligation to return our data. Beacon has the right to change the terms unilaterally meaning they have the ability to make any changes they want without explicit consent. Beacon has limited all disputes to be handled within the jurisdiction of Illinois and has waived users rights to bring along any class actions. Beacon takes no responsibility for data accuracy, even if they are at fault. Beacon has already raised red flags within their system to assist covered entities on determining dispensations to be either a 340B claim or an MFP claim. While they are gathering and collecting data, their methods of matching dispensations remain unclear. With their methods remaining unclear, it forces us as the entity to be doubly responsible for not only tracking our own data, but how Beacon matches their data as well to ensure our covered entity is seeing the benefit it is supposed to see within the 340B program. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Wickenburg Community Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Wickenburg Community Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Wickenburg Community Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Brian Schuele Director of Pharmacy Wickenburg Community Hospital Located in Wickenburg, AZ
HRSA-2026-0001-2139(no commenter metadata)2026-04-20T04:00Z38,971 chars
Please see attached for comments on behalf of UNC Health. 1 Comprehensive Comments in Response to HRSA Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Date: April 13, 2026 Introduction and General Position On behalf of UNC Health, we appreciate the opportunity to respond to the U.S. Department of Health and Human Services Request for Information regarding a potential 340B Rebate Model Pilot Program. The RFI asks whether HRSA should replace the long-standing upfront 340B discount with a retrospective rebate mechanism for certain drugs, including drugs subject to the Medicare Drug Price Negotiation Program under the Inflation Reduction Act (IRA). For the reasons explained below, the answer is unequivocally no. Section 340B of the Public Health Service Act, 42 U.S.C. 256b, has operated successfully for more than thirty years through an upfront discount mechanism that allows covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Any rebate-based approachregardless of scope or purported safeguardswould: Impose extraordinary administrative, operational, staffing, and IT burdens Create material and ongoing cash-flow harm Shift statutory compliance obligations from manufacturers to covered entities Disrupt decades of settled reliance interests Increase manufacturer leverage and audit risk Ultimately divert resources away from patient care UNC Health is a large, integrated safety-net health system serving urban and rural communities across North Carolina. Our 340B program is deeply embedded in our clinical, pharmacy, financial, and compliance infrastructure. That infrastructure was designedand reasonably reliedon HRSAs consistent implementation of 340B as an upfront discount, not a rebate. HRSAs apparent premise that it must balance manufacturer operational preferences against covered-entity burden misapprehends the statute. The 340B Program exists to benefit covered entities and their patients, not to reduce manufacturer administrative inconvenience. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data 2 retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. The proposed 340B rebate model would be implemented at a time when health systems like UNC Health are already absorbing significant financial strain from recent legislative and policy changes. For example, the One Big Beautiful Bill Act is projected to reduce UNC Healths revenues in excess of $900 million once fully implemented, further constraining resources available for patient care and would put several UNC Health facilities at risk of having to reduce or even eliminate services. These impacts compound existing obligations, including UNC Healths provision of approximately $615 million annually in bad debt and charity care. Introducing a rebate model that adds administrative complexity, cash-flow disruption, and financial uncertainty on top of these pressures would materially worsen the cumulative burden on safety-net providers and directly threaten their ability to sustain access, services, and compliance. I. A Rebate Model Is Not Necessary and Is Inconsistent with the Statute Congress Placed Deduplication Obligations on Manufacturers, Not Covered Entities Congress explicitly addressed overlap between the Medicare Drug Price Negotiation Program (MDPNP) and 340B pricing by requiring manufacturers to honor the lesser of the 340B ceiling price or the Maximum Fair Price (MFP) not both. Congress did not: Amend the 340B statute to authorize rebate models Appropriate funding for HRSA to administer a rebate system Shift compliance or financial risk to covered entities Manufacturers remain fully subject to civil monetary penalties for failing to honor 340B pricing or MFP requirements. A rebate model would invert that framework by requiring covered entities to prove eligibility after paying WAC, while manufacturers retain control over adjudication and timing. II. Administrative, Operational, and Compliance Costs Even under the established upfront discount framework, the 340B Program entails substantial ongoing administrative cost for UNC Health. Program oversight requires a robust, specialized 3 340B team, coordination with six third-party administrators, and multiple third-party audits conducted throughout the year to ensure compliance across eligibility, diversion, duplicate discount, and contract pharmacy requirements. These activities already demand significant staffing, system support, and cross-functional coordination among pharmacy, compliance, finance, IT, and legal teams. A rebate model would not simplify these workflows; it would layer additional claims-level data extraction, reconciliation, dispute resolution, and reporting obligations onto an already complex operational structure. As a result, implementation of a rebate model would require additional personnel and expanded technology resources, increasing administrative burden rather than reducing it. It would fundamentally alter UNC Healths 340B operations and require creation of an entirely new compliance infrastructure while maintaining the current infrastructure for non- impacted drugs. UNC Health would incur the following additional burdens in a rebate model, among others: Manual extraction, normalization, and merging of claims data across the electronic medical record (EMR), billing, wholesaler, and TPA systems because required data elements are not captured in existing 340B workflows. In FY25, UNC Health processed over 2 million 340B-eligible transactions across entity-owned outpatient pharmacies, outpatient departments, and contract pharmacy arrangements. Operating multiple manufacturer-specific or vendor-specific portals, each with different data fields, file formats, deadlines, and error logic. The lack of standardization adds to the administrative and operational burden. Claim-level reconciliation of lump-sum rebate payments back to individual drugs, pharmacies, and sites of care for financial tracking Expanded audit exposure, legal fees, and responses to disputes and denials Increased reliance on HRSAs Administrative Dispute Resolution (ADR) process, which we have heard anecdotally can take up to two years and effectively denies access to statutory discounts during that period Smaller hospitals within UNC Health that locally manage their 340B programs would be especially disadvantaged, often facing a binary choice: forgo 340B savings or incur unsustainable consulting fees. At this time, UNC Health cannot reliably estimate the one-time IT build cost or the ongoing annual administrative cost of a rebate model beyond whats outlined above because HRSA and manufacturers have not provided standardized technical requirements or operational specifications. The majority of our costs would likely be ongoing to support additional vendor contracts and labor. III. Staffing Impacts UNC Health does not currently have the staff capacity to administer a rebate program. Implementation would require hiring and retaining multiple new FTEs to: 4 Extract data from EMRs and financial systems not integrated with 340B tools Build and maintain logic for unit-of-measure conversions and submission readiness Reconcile manufacturer determinations, track denials, and reallocate rebate revenue Manage disputes, audits, ADR filings, and manufacturer appeals If manufacturers impose disparate platforms or requirements, additional staffing would be unavoidable. Participation in ESP has caused us to hire additional FTE and the rebate model will cause UNC Health to need even more labor resources to support claims submissions and reconciliations. Currently all of these costs have been shifted to the covered entity. IV. Systems and IT Infrastructure UNC Healths IT environment was designed around prospective pricing. A rebate model would require: New IT development for data elements not routinely captured (e.g., health plan ID) Manual conversion of billing units (e.g., mg mL or each) New vendor contracts to support data exports and submissions New vendor contracts to support claims level reconciliation Ongoing quality control to avoid errors across non-standardized manufacturer platforms These are permanent, recurring changes, not one-time implementation costs. V. Data Collection and Security Risks UNC Health does not currently collect many of the claims-level data elements contemplated under a rebate model, nor does it maintain them in a form that is readily extractable, standardized, or reconcilable across systems. A rebate-based approach would therefore require new data collection, normalization, and manual conversion processes that do not exist today. Specifically, UNC Health does not routinely have access to, or does not capture in a single system of record, the following data elements at the claim level for all outpatient drug transactions: Complete health plan identifiers (including plan-specific IDs and coverage indicators) for all outpatient encounters, particularly for physician-administered drugs billed through hospital cost-based billing systems rather than pharmacy claims platforms. Final adjudicated medical claims data for hospital outpatient departments and provider-based clinics, which are subject to batch billing, lagged charge capture, and post-service reconciliation cycles that may extend well beyond the timeframe contemplated for rebate submission. 5 In addition, a rebate model would require UNC Health to perform manual unit-of-measure conversions that are not required under the upfront discount model and are not built into existing clinical or billing workflows. For example: Clinical documentation and billing systems often record doses in milligrams (mg), international units, or vial-based charges, while manufacturers may require rebate submissions in milliliters (mL), each, or package-specific units. Single-dose and multidose vial use, partial vial wastage, and dose rounding are documented clinically but are not consistently captured in a manner that can be algorithmically converted to manufacturer-defined rebate units. These conversions would require custom logic, manual validation, and ongoing quality assurance, introducing significant risk of error and dispute. To assemble rebate-eligible claims, UNC Health would be required to manually extract, merge, and validate datasets from multiple sources that are not currently integrated, including electronic medical records, hospital billing systems, TPAs, wholesalers, and manufacturer or vendor platforms. These activities would be ongoing, not one-time, and would substantially increase staffing needs and operational complexity. The all-claims data requirements by Eli Lilly and Novo Nordisk resulted in over 150 hours of labor to create processes to provide these files and have resulted in over 65 hours a week of new work continuing to troubleshoot issues related to this. Our team is robust and has been able to support this, but it will not be manageable on a larger scale and is not manageable for our smaller hospitals that choose to locally manage their 340B program. Finally, the expanded collection, transmission, and storage of claims-level and patient-level data would materially increase HIPAA, cybersecurity, and data-governance risk, particularly where manufacturers or manufacturer-aligned vendors require direct access to covered-entity data. VI. Payment Timing and Cash-Flow Harm A rebate model would materially damage UNC Healths cash flow. Impacts include: Purchasing high-cost drugs at WAC while awaiting rebate repayment Reduced cash on hand that could implicate liquidity metrics and bond covenants Loss of wholesaler prompt-pay discounts Severe exposure for oncology, infusion, and clean sites that rely on prospective 340B purchasing Even short rebate delays function as interest-free loans to manufacturers, diverting funds from patient care. UNC Health currently pays drug wholesalers daily under existing purchasing contracts. When examining the impact of a potential rebate model using drugs included in the first three years of Inflation Reduction Act (IRA), a rebate model would require UNC Health to front drug acquisition costs at WAC, resulting in an estimated annual pre-rebate WAC float exceeding 6 $180 million, a 30-day cash-on-hand impact exceeding $14 million, and additional exposure exceeding $25 million assuming loss of cost-minus reimbursement protections and a conservative 10% rebate denial rate. The financial impact of the implementation of a rebate model would be detrimental and potentially catastrophic to several hospitals which UNC Health owns or manages, the most vulnerable of which are sole community providers in rural communities in North Carolina. VII. Rebate Denials and Dispute Resolution HRSA should prohibit all rebate denials. If HRSA permits manufacturers to deny 340B rebate requests under any rebate model, denials must be the rare exception, tightly constrained, fully transparent, and subject to enforceable oversight. Absent these guardrails, rebate denials would function as de facto price increases, undermining the statute and shifting financial risk to covered entities. At a minimum, the following protections must be mandated. A. Strictly Limited Grounds for Denial Manufacturers should be permitted to deny a rebate only when the manufacturer can demonstrate, with documented evidence, that a duplicate 340B rebate has already been paid for the same specific claim to another covered entity. Denials must be explicitly prohibited for: Patient eligibility determinations Interpretation of covered-entity eligibility polices Contract pharmacy use Data formatting or submission issues Minor data discrepancies that do not affect duplicate discount determinations Alleged diversion Disputes regarding Medicaid billing status beyond Medicaid fee-for-service Any denial category beyond a narrow duplicate-payment scenario would exceed the statute and invite abuse. B. Manufacturer Burden of Proof The full burden of proof must rest with the manufacturer, not the covered entity. For any denial, the manufacturer must provide: Claim-level identification of the allegedly duplicative payment The identity of the other covered entity allegedly paid 7 The date and amount of the duplicate rebate The specific basis for concluding duplication occurred Unsupported or conclusory denials must be deemed invalid by default. C. Standardized Denial Format and Data Elements HRSA must require a uniform, standardized denial template applicable to all manufacturers. This template must: Use consistent data fields and definitions Clearly identify the denial reason category Prohibit free-text or proprietary rationale fields Allow automated reconciliation by covered entities Manufacturer-specific denial formats or platforms must be prohibited. D. Mandatory Prompt Payment With Interest Manufacturers must be required to: Pay all undisputed rebates within a fixed, short timeframe of submission Pay interest automatically on any rebate not paid within that period Pay interest retroactively for rebates overturned on appeal Interest must accrue at a rate meaningful enough to deter delay and denial gaming. E. Prohibition on Conditional or Batch Denials Manufacturers must be barred from: Issuing blanket or batch denials Conditioning payment of valid rebates on resolution of unrelated claims Using pending, in review, or similar statuses to delay payment indefinitely Each claim must stand on its own. F. Independent, Time-Bound Dispute Resolution If denials are permitted, HRSA must provide a fast-track, independent dispute resolution process, separate from the existing ADR system, that includes: Firm timelines for manufacturer response Automatic escalation if timelines are missed Interim payment of disputed amounts pending resolution 8 Manufacturers must bear all reasonable administrative and legal costs if a denial is overturned. G. Audit and Enforcement Consequences for Improper Denials HRSA must treat a pattern of improper denials as non-compliance, subject to: Civil monetary penalties Mandatory corrective action plans Public reporting of denial rates Potential suspension of rebate model participation Denial authority without enforcement would encourage systematic underpayment. H. Transparency and Public Reporting Manufacturers participating in any rebate model must publicly report: Number of rebates submitted Number and percentage denied Basis for denials Average payment timelines Outcomes of disputes and appeals Aggregate reporting is essential to detect abuse and protect program integrity. I. Preservation of Covered-Entity Legal Rights Denial processes must not require covered entities to: Waive legal rights Submit to mandatory arbitration Agree to manufacturer-imposed terms of use License or monetize their data Any rebate model that conditions statutory pricing on surrender of legal protections is invalid. Without these guardrails, allowing rebate denials would invert the 340B statute, empower manufacturers to control eligibility determinations, and expose covered entities to systematic financial harm. Even with these protections, denials would remain inherently inconsistent with the upfront discount structure Congress established. VIII. Medicaid Carve-In, Contract Pharmacy Access, and Program Integrity 9 A rebate model creates material uncertainty for Medicaid carve-in and significantly undermines covered entities ability to remain in compliance with both Medicaid billing requirements and 340B program integrity standards. UNC Health currently carves in Medicaid consistent with state policy and federal requirements. Under the upfront discount model, UNC Health knows its actual acquisition cost at the time of purchase, enabling accurate billing to Medicaid at or below the applicable actual acquisition cost (AAC) and ensuring compliance with Medicaid payment rules and duplicate discount protections. Under a rebate model, however, UNC Health would purchase drugs at Wholesale Acquisition Cost (WAC) while awaiting retrospective rebates, meaning the true 340B acquisition cost would be unknown at the time of Medicaid billing. This disconnect creates significant compliance risk. Billing Medicaid based on WAC, absent guaranteed and timely rebate reconciliation, could result in systematic overbilling or underbilling, either of which exposes the covered entity to audit findings, recoupments, and penalties. Denials, delays, or disputed rebates would further exacerbate this risk. If a rebate is denied or only partially paid, UNC Health would be left unable to retrospectively correct Medicaid claims that were submitted without knowledge of the final net acquisition cost. This scenario would place covered entities in the untenable position of choosing between Medicaid billing noncompliance or forfeiting statutory 340B discounts altogether. As a practical matter, this uncertainty would likely force many covered entities to carve out Medicaid under a rebate modelnot because of program integrity failures, but because compliance would no longer be operationally feasible. A widespread shift to carve-out would increase inventory complexity, heighten diversion risk, disrupt continuity of care, and could reduce access for Medicaid patients, directly undermining the stated objectives of the 340B Program. This would also add additional financial strain on health systems. Converting UNC Healths mixed-use space to carve out would cost over $21 million in additional annual WAC, further financially stretching our already stressed and fragile facilities that support rural and underserved communities. These concerns extend to contract pharmacy arrangements. Contract pharmacies rely on clear, predictable acquisition cost and claim-level flags to manage Medicaid billing and prevent duplicate discounts. Introducing a rebate model layered on top of existing ESP and Medicaid reporting obligations would create duplicative submission requirements, inconsistent data timing, and heightened audit exposure, without improving program integrity. Absent clear, binding guidance on how Medicaid carve-in could be maintained when actual acquisition cost is unknown at the time of billingand absent enforceable protections against rebate deniala rebate model would jeopardize compliance, increase risk, and push covered entities away from Medicaid carve-in, harming both patients and state Medicaid programs. Absent explicit protections, manufacturers could also: Further restrict contract pharmacy access Condition 340B pricing on data submission 10 Impose duplicative ESP and rebate reporting requirements A rebate model would undermine, not enhance, program integrity. IX. Manufacturer-Controlled IT Platforms (e.g., Beacon) UNC Health has experiencedand remains deeply concerned aboutmanufacturer-mandated use of manufacturer-selected rebate and data platforms, including Beacon, operated by Second Sight Solutions. Manufacturers have increasingly required covered entities to submit detailed claims data through Beacon as a condition of obtaining refunds or resolving good faith inquiries related to Medicare Maximum Fair Price (MFP) or proposed 340B rebate models. These platforms raise serious concerns: Non-negotiable terms of use, imposed unilaterally on covered entities Broad, perpetual licenses permitting use and monetization of covered-entity data, without compensation No meaningful vendor liability for HIPAA, cybersecurity, or data-breach incidents Mandatory arbitration clauses and waivers of jury trial and collective action, stripping covered entities of legal rights Operational dependence on a single, manufacturer-aligned intermediary, creating conflicts of interest If HRSA were to approve any rebate model, manufacturer-selected platforms such as Beacon must be prohibited. At a minimum, HRSA must require use of a neutral, independent third-party clearinghouse, governed by standardized terms, uniform data requirements, and clear protections for covered-entity data, privacy, and legal rights. Absent such safeguards, a rebate model would further entrench manufacturer control over the 340B Program and amplify the very compliance disputes HRSA seeks to avoid. XI. What Manufacturers Should Be Required to Report Under a 340B Rebate Model If HRSA were to authorize any 340B rebate model, manufacturer reporting requirements would need to be comprehensive, standardized, and publicly enforceable. Robust reporting is essential to ensure transparency, detect misuse of denials or delays, and prevent rebate mechanisms from functioning as de facto price increases. At a minimum, manufacturers participating in a 340B rebate model should be required to report the following categories of information. I. Rebate Volume and Payment Activity Manufacturers should report, for each reporting period: 11 Total number of rebate claims submitted by covered entities Total dollar value of rebates requested Total number and dollar value of rebates paid Average and median time to payment, measured from receipt of a complete claim Number and dollar value of rebates pending beyond required payment timelines These metrics should be reported in the aggregate and by drug, enabling HRSA to assess whether rebates are being paid timely and consistently across products. II. Rebate Denials and Partial Payments If rebate denials are permitted, manufacturers must report detailed denial data, including: Total number and dollar value of denied rebates Denial rate, expressed as a percentage of total claims submitted Specific, standardized reason codes for each denial Drug-level denial rates, not just aggregated totals Number of partial payments or short-pays, including the amount withheld and rationale Manufacturers should be prohibited from using non-standard or free-text denial categories. All denial reasons must map to HRSA-defined categories. III. Dispute Resolution and Appeals Manufacturers should report on dispute activity, including: Number of denials appealed by covered entities Timeliness of manufacturer responses to disputes Outcomes of disputes, including: o Percentage overturned o Amounts ultimately paid Average time to final resolution, measured from dispute initiation A high dispute reversal rate should be treated as an indicator of systemic denial misuse and trigger heightened oversight. IV. Payment Delays and Interest Accrual Manufacturers should report: Number of rebates paid late, beyond statutory or regulatory timelines Duration of payment delays 12 Interest accrued and paid on late rebates, if applicable Number of disputes where payment was withheld pending resolution Reporting must allow HRSA to determine whether manufacturers are using delay as a cash-flow strategy. V. Data Requests and Submission Requirements Imposed on Covered Entities Manufacturers should disclose, in a standardized format: All data elements required for rebate submission if not standardized across all manufacturers Any changes to data requirements during the reporting period Whether automation or batch submission is permitted Any data elements not directly related to duplicate discount prevention This reporting is essential to ensure manufacturers are not using rebate models to impose extra-statutory data demands. VI. Use of Third-Party Vendors or Platforms Manufacturers must report: All third-party vendors or platforms used to administer rebates (e.g., clearinghouses, portals) Whether vendor participation is mandatory for covered entities Contractual terms imposed on covered entities, including: o Data licenses o Arbitration or waiver provisions o Cybersecurity protections Vendor compensation arrangements, including whether costs are indirectly passed to covered entities Manufacturer-aligned platforms must not operate without full transparency and HRSA oversight. VII. Audit and Enforcement Activity Manufacturers should report: Number of audits or data reviews conducted related to rebates Claims or rebates withheld as a result of audits Findings of overpayment or alleged noncompliance 13 Corrective actions taken, if any This information is necessary to distinguish legitimate oversight from retaliatory or leverage-based practices. VIII. Program Integrity Metrics Manufacturers should report standardized metrics to allow HRSA to assess whether a rebate model is achieving stated goals, including: Trend data on duplicate discount detection on Medicaid FFS claims (claims identified vs. validated) Comparison of duplicate discount findings before and after rebate implementation on Medicaid FFS claims Evidence that rebate models are reducing, not increasing, disputes and administrative burden If integrity metrics do not show improvement, continuation of any rebate model would lack justification. IX. Public Transparency Requirements HRSA should require manufacturers to publicly report, at least annually: Aggregate rebate payment and denial rates Average payment timelines Denial reason distributions Dispute resolution outcomes Public reporting is critical to accountability and to ensure that covered entities, policymakers, and HRSA can evaluate real-world impacts. Without mandatory, standardized, and auditable manufacturer reporting, a 340B rebate model would be unworkable and unpoliceable. Reporting requirements must be sufficient to detect systemic underpayment, improper denials, delays, and data abuse. Absent this transparency, rebate mechanisms would underminenot enhanceprogram integrity. XI. Information Collection and Burden Estimates Are Grossly Understated HRSAs burden estimates materially understate actual effort, particularly for: Mixed-use claims Physician-administered drugs Reconciliation and dispute resolution 14 Claims modifiers or a government-backed clearinghouse would be far less burdensome alternatives. XII. Adverse Impacts on Patient Care These cumulative burdens would directly reduce UNC Healths ability to: Maintain prospective access to oncology and infusion drugs Support rural hospitals and CAHs Expand care for uninsured and under-insured patients Some covered entities across the country may be forced to exit the 340B Program entirely if they do not have the capacity to support this added work. XIII. Reliance Interests and Policy Stability UNC Health reasonably relied on three decades of consistent agency practice when designing its staffing, systems, contracts, and financial planning. Absent clear statutory necessity, a rebate model would recklessly disrupt those reliance interests. XIV. The 340B Program Is Not Federally Funded and Is Not a Patient Assistance Program It is critical to correct persistent misconceptions about the 340B Program. 340B is not a federally funded benefit and does not involve federal outlays. The program operates exclusively through a statutory pricing obligation imposed on drug manufacturers as a condition of participating in Medicaid and Medicare Part B. Covered entities do not receive federal payments, grants, or subsidies through 340B, nor does the program function as a patient-specific assistance benefit. Rather, Congress designed 340B to allow covered entities to retain savings generated by statutorily mandated discounts so they can support their broader safety-net missionsexpanding services, offsetting under-reimbursement, and caring for uninsured and underinsured populations. Federal courts, HRSA guidance, and decades of agency practice consistently recognize that 340B does not require discounts to be passed through at the individual patient level, nor is it structured as a means-tested patient assistance program. Efforts to reframe 340B as a subsidy or entitlement distort the statute and improperly justify shifting financial and administrative burdens onto covered entities. Any rebate model premised on correcting a supposed windfall to hospitals rests on a false assumption about how Congress intentionally structured the program. 15 XV. Manufacturer Profitability Far Exceeds Hospital Operating Margins Proposals to shift financial risk to covered entities through a rebate model are especially misplaced given the dramatic disparity between pharmaceutical manufacturer profit margins and hospital operating margins. Independent analyses of publicly reported financial data show that pharmaceutical manufacturers earn average net profit margins of approximately 2025%, dramatically higher than other sectors of the health care system. A 2024 analysis found average manufacturer net margins approaching 23%, roughly ten times higher than other segments of the prescription drug supply chain.1 By contrast, U.S. hospitals operate on razor-thin margins, with many operating at a loss. National hospital cost report data show that in 2022, the median operating margin for a hospital was -3.8% and the average operating margin at that time was -13.5%.2 Against this backdrop, requiring covered entities to front hundreds of millions of dollars at WAC, absorb rebate denials, and finance manufacturers compliance systems through rebate models is economically indefensible. The notion that rebate models are needed to protect manufacturers from financial harm is unsupported by the data. XVI. Potential Solutions to Improve Transparency and Prevent Duplicate Discounts Without a Rebate Model UNC Health supports reasonable, targeted solutions to improve transparency and prevent duplicate discounts where legitimate concerns exist. However, those objectives can be achieved without abandoning the upfront discount model, without retrospective rebates, and without shifting financial risk and administrative burden to covered entities. Two alternatives, in particular, would meaningfully advance transparency and program integrity while preserving access, predictability, and compliance. A. Use of a Standardized Claims-Level Modifier A uniform, government-defined claims modifier would allow covered entities to identify 340B-eligible claims at the point of adjudication in a standardized and minimally burdensome manner. Under this approach: Covered entities would continue to purchase drugs at the upfront 340B price, consistent with longstanding program design. 1 https://www.csrxp.org/csrxp-analysis-finds-pharmaceutical-industrys-profit-margins-ten-times-greater- than-other-sectors-of-drug-supply-chain/. 2 https://www.definitivehc.com/resources/healthcare-insights/hospital-operating-margins-united-states. 16 Claims submitted for dispensing or administration of 340B drugs would include a single, standardized modifier indicating 340B status. Manufacturers and government payers could use this modifier solely for deduplication purposes, without requiring access to broader claims datasets or protected health information. This approach mirrors processes that state Medicaid agencies have successfully used for decades to prevent Medicaid duplicate discounts and would align with existing hospital billing workflows. Importantly, a modifier-based approach would: Avoid retrospective pricing uncertainty by preserving known acquisition cost at the time of purchase; Eliminate the need for manufacturers to adjudicate rebate eligibility; Reduce data handling, reconciliation, and dispute resolution burden; and Allow HRSA and other federal agencies to establish clear, uniform standards, rather than permitting manufacturer-specific requirements. B. A Government-Backed, Neutral Clearinghouse As an alternativeor in combination with a claims modifierHRSA could establish or designate a neutral, government-backed clearinghouse to facilitate deduplication in a limited, controlled manner. Under this model: Covered entities would continue to receive upfront 340B pricing. Covered entities would submit a narrow, standardized to a clearinghouse operated by, or under contract with, a federal agency. The clearinghouse would perform deduplication checks relevant to specific federal programs (such as Medicare Drug Price Negotiation Program claims) and provide limited confirmation or exception reportingwithout transferring control of the process to manufacturers. This model would mirror existing government-run data exchange processes and ensure that: Manufacturers do not control eligibility determinations; Data use is strictly limited to authorized purposes; Privacy, cybersecurity, and governance standards are transparently enforced; and Administrative burden is centralized and standardized, rather than multiplied across manufacturers. One example is to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts that allows covered entities to retrospectively submit limited 340B claims data to the states rebate 17 contractor, allowing the agency to exclude 340B claims from rebate requests. A similar process can be used by CMSs Medicare Transaction Facilitator (MTF) to address nonduplication under the Inflation Reduction Act. Compared to a 340B rebate model, these alternatives would more efficiently promote integrity in 340B and consistency with the Inflation Reduction Acts nonduplication provision and be far less disruptive for 340B providers. C. Why These Alternatives Are Preferable to a Rebate Model Both approaches would promote transparency and accountability while avoiding the most significant harms associated with a rebate model, including: Unknown acquisition cost at the time of billing; Forced Medicaid carve-out due to compliance risk; Manufacturer-controlled adjudication and denial of statutory pricing; Massive cash-flow disruption, claim level reconciliation, and interest-free float to manufacturers; and Expansion of extra statutory data demands and vendor mandates. If HRSA seeks empirical data or wants to pilot transparency mechanisms, it should do so through these less disruptive tools, which are consistent with the structure of the 340B statute and decades of successful program administration. UNC Health urges HRSA to prioritize solutions that preserve the upfront discount, maintain known pricing at the time of purchase, and strengthenrather than undermineprogram integrity. For all of these reasons, UNC Health urges HRSA to abandon any 340B rebate model and preserve the existing upfront discount structure. At a minimum, HRSA should: Reject manufacturer-controlled rebate frameworks Pursue less burdensome alternatives (e.g., claims modifiers, clearinghouses) Provide notice-and-comment on any concrete proposal UNC Health stands ready to engage constructively on solutions that preserve access, reduce burden, and uphold the statutory purpose of the 340B Program. Sincerely, Cristy Page, MD, MPH CEO, UNC Health Dean, UNC School of Medicine
HRSA-2026-0001-2140Community HealthCare System2026-04-20T04:00Z26,747 chars
See attached file for Community HealthCare System's comments. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: We at Community HealthCare System (CHCS) are grateful for the opportunity to provide comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. CHCS is a Critical Access Hospital in northeast Kansas. We have seven clinics that serve our rural communities, five of which are 340B registered child sites. The 340B program is vital to CHCSs ability to provide access to care for our patients. In your RFI you seek to ascertain whether HRSA should implement a 340B rebate model rather than the upfront discount that has worked successfully for decades. At CHCS, we firmly believe that the answer to that question is no. As explained in further detail below, any rebate mechanism will be extremely costly and burdensome to CHCS. The perceived benefits of a rebate model are entirely outweighed by the enormous costs and detriments this change will impose upon covered entities, particularly Critical Access Hospitals (CAH) providing care in our underserved, rural communities. HRSAs desire to balance the interests of 340B hospitals and drug companies is counterintuitive to the purpose of the 340B program and will not help covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism which CHCS has relied on for years is the best way to fulfill that purpose. CHCS has done its best to provide detailed answers to the questions posed in the RFI. To estimate costs, we have assumed that any future Rebate Program will include the 10 2 original drugs that HRSA had originally approved for the Pilot Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. More drugs subject to a rebate mechanism will result in more claims to submit, rebates to track and reconcile, money we will need to pay for the drugs while we wait to receive our statutory discount, disputes over pricing delays and denials, and therefore less money and resources that CHCS can dedicate to serving our rural patients and increasing their access to care. Administrative Costs Under a Potential 340B Rebate Program: CHCS estimates a greater than $1M increase in our direct, up-front drug acquisition costs with a switch from an up-front discount to a rebate model. That is over half of our entire pharmaceutical budget for our rural health system. To float that cost to the pharmaceutical manufacturers while we wait to receive our statutory discount will have a significant impact on our days cash on hand and limit our ability to make necessary capital improvements to our facilities and to increase our patients access to care. CHCS anticipates needing to hire or re-allocate 1.5 FTE, in addition to our current 340B staff, to manage the increased administrative burden associated with a switch to a rebate model. We have additional implementation costs with labor hours to configure the reports necessary to submit the data that are very difficult to quantify. CHCS is currently working with our third-party administrator (TPA) to prepare medical claims files for submission due to new manufacturer restrictions. This has been going on for over a month, and the reports are still not consistently conforming with the data requirements for 340B ESP. A rebate model would be considerably worse to implement and manage. Our entire program benefit last fiscal year was $450,000. The 340B program was intended to help covered entities stretch scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. In fiscal year 2026 our uncompensated care/bad debt was $340,000. CHCS relies on our 340B program benefit to be able to provide our rural patient population access to care. A rebate model will essentially eliminate any benefit to our rural hospital. Staffing Impacts Under a Potential 340B Rebate Program: A shift from an up- front discount to a rebate model would result in CHCS needing to hire or reallocate 1.5 FTE. Hiring qualified 340B experts in our rural area is quite challenging. The 340B program is very specialized and the labor pool is not as large as in more populated areas, unfairly creating an even larger administrative 3 burden for Critical Access Hospitals. CHCS has one full-time pharmacist who serves as the knowledge lead for our 340B program as well as the clinical pharmacist for our system. Additional 340B program needs divert pharmacist time from patient care. Even if we can hire additional staff to assist with the excessive administrative burdens posed to covered entities, the training required to become proficient with the program is extremely time-consuming and therefore incredibly costly. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: While preparing for the 2026 rebate pilot program, our TPA worked to develop a means for preparing and submitting the necessary reports to the Beacon platform. To have them submit these reports on our behalf will cost CHCS an additional $6,000 a year on top of the administrative costs that we have already incurred with our TPA. CHCS estimates it to take 10-20 hours per week to reconcile the rebates and ensure that our 340B pricing remains intact based on our experience with submitting claims data to 340B ESP. That is considerably more than the HRSA estimate of 5 hours per week Data Collection by Covered Entities/Beacon IT Platform problems: CHCS has been submitting claims through 340B ESP, who shares a parent company with the Beacon platform utilized for the rebate pilot, for quite some time. We frequently experience issues with the platform related to claim mapping and what are considered non-conforming claims. Each quarter, one manufacturer cuts off our access to 340B pricing even with 100% conforming claims. Previously we could contact 340B ESP and they would serve as our go between with the manufacturer and help get the pricing restored for our patients, but increasingly they are having us reach out to the manufacturers directly. This causes a significant delay in pricing restoration. We often discover these pricing discrepancies when our patients of greatest need who rely on the 340B program for access to affordable medications experience a significant price increase at our contract pharmacies. Converting the 340B program from an upfront discount to a rebate model will more than double the time it takes to submit claims to the manufacturers. That is a particularly significant burden to our rural hospital and our patients in need. At CHCS, we have no faith in the Beacon platform based on our experience with 340B ESP. Adverse Impacts of These Additional Costs and Burdens: At CHCS, our patients are our neighbors, our family, and our friends. Because of this, we are proud to say that a huge part of our program is our pass-through savings program at our contract pharmacies. CHCS does not have an in-house 4 pharmacy, so we have already been hit hard by the continued manufacturer restrictions that have made our patients travel greater distances (up to 50+ miles) to access affordable medications. A switch to a rebate model will force CHCS to significantly limit or eliminate our pass-through savings program to be able to reconcile the volume of claims and ensure that we are getting timely rebates. A rebate program will create a significant cash flow issue. CHCS has seen 3 neighboring hospitals stop offering obstetrical services in the last 2 years. The 340B program enables CHCS to continue providing critical services, like obstetrics, in our rural area that break even or sometimes operate at a loss. When your entire program net benefit is $450,000 and your systems annual uncompensated care is nearly equal to that, any reduction in 340B program benefit threatens those services. CHCS feels strongly that a rebate model will lead to poorer control of our patients chronic health conditions by reducing their access to affordable medications, subsequently increasing their risk for hospitalization and emergency department visits, and result in negative health outcomes. Reliance Interests: The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. There mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. CHCS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In addition to CHCSs reliance on the up-front discount for the necessary cash-on-hand predictions used in our long- term planning and capital purchasing, our patients rely on the upfront discount to purchase what would be otherwise unaffordable medications. Efforts To Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to 5 deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on CHCS, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. CHCS does not own a community pharmacy. We rely on relationships with our independent community pharmacy partners. Weve inquired with them to see if they are having any issues with deduplication and we hear consistently that they do not have the staff available to reconcile these rebate payments to even know if they are having issues with it. Rural areas and small businesses do not have the infrastructure to reconcile and manage the deduplication process. A neutral clearinghouse for deduplication and an upfront 340B discount is the only way to ensure a 340B benefit to rural America. For all these reasons, Community HealthCare System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If HRSA chooses to move forward with a Rebate Program, it must allow Community HealthCare System and other covered entities the opportunity to comment on specifics of its new program. We have attempted to be very specific in answering your RFI, however, we lack precise knowledge of critical details (data requirements, possible grounds for denial of rebates, dispute resolution processes, other guardrails) necessary to implement a Rebate Program. If CHCS and other covered entities are not permitted the opportunity to provide additional comments on specific features of the 340B Rebate Program, proper consideration of these important aspects will not have been accomplished. We thank you for the opportunity to submit comments and urge HRSA to carefully consider our concerns. Please do not ask rural hospitals, and therefore the patients they serve, to bear the burden of this significant alteration of the 340B program. CHCS patients rely on the 340B program to gain access to care and to affordable prescription 6 medication. They will be the ones who suffer if we allow extremely wealthy pharmaceutical manufacturers to dictate when and how they provide the 340B discount. We look forward to working with HRSA on this important issue. Please contact me if you have any questions. Sincerely, Hali Brown, PharmD., BCPS Pharmacy Manager/340B Director Community HealthCare System 120 West 8th St, Onaga, KS 66502 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: We at Community HealthCare System (CHCS) are grateful for the opportunity to provide comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. CHCS is a Critical Access Hospital in northeast Kansas. We have seven clinics that serve our rural communities, five of which are 340B registered child sites. The 340B program is vital to CHCSs ability to provide access to care for our patients. In your RFI you seek to ascertain whether HRSA should implement a 340B rebate model rather than the upfront discount that has worked successfully for decades. At CHCS, we firmly believe that the answer to that question is no. As explained in further detail below, any rebate mechanism will be extremely costly and burdensome to CHCS. The perceived benefits of a rebate model are entirely outweighed by the enormous costs and detriments this change will impose upon covered entities, particularly Critical Access Hospitals (CAH) providing care in our underserved, rural communities. HRSAs desire to balance the interests of 340B hospitals and drug companies is counterintuitive to the purpose of the 340B program and will not help covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism which CHCS has relied on for years is the best way to fulfill that purpose. CHCS has done its best to provide detailed answers to the questions posed in the RFI. To estimate costs, we have assumed that any future Rebate Program will include the 10 original drugs that HRSA had originally approved for the Pilot Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. More drugs subject to a rebate mechanism will result in more claims to submit, rebates to track and reconcile, money we will need to pay for the drugs while we wait to receive our statutory discount, disputes over pricing delays and denials, and therefore less money and resources that CHCS can dedicate to serving our rural patients and increasing their access to care. Administrative Costs Under a Potential 340B Rebate Program: CHCS estimates a greater than $1M increase in our direct, up-front drug acquisition costs with a switch from an up-front discount to a rebate model. That is over half of our entire pharmaceutical budget for our rural health system. To float that cost to the pharmaceutical manufacturers while we wait to receive our statutory discount will have a significant impact on our days cash on hand and limit our ability to make necessary capital improvements to our facilities and to increase our patients access to care. CHCS anticipates needing to hire or re-allocate 1.5 FTE, in addition to our current 340B staff, to manage the increased administrative burden associated with a switch to a rebate model. We have additional implementation costs with labor hours to configure the reports necessary to submit the data that are very difficult to quantify. CHCS is currently working with our third-party administrator (TPA) to prepare medical claims files for submission due to new manufacturer restrictions. This has been going on for over a month, and the reports are still not consistently conforming with the data requirements for 340B ESP. A rebate model would be considerably worse to implement and manage. Our entire program benefit last fiscal year was $450,000. The 340B program was intended to help covered entities stretch scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. In fiscal year 2026 our uncompensated care/bad debt was $340,000. CHCS relies on our 340B program benefit to be able to provide our rural patient population access to care. A rebate model will essentially eliminate any benefit to our rural hospital. Staffing Impacts Under a Potential 340B Rebate Program: A shift from an up-front discount to a rebate model would result in CHCS needing to hire or reallocate 1.5 FTE. Hiring qualified 340B experts in our rural area is quite challenging. The 340B program is very specialized and the labor pool is not as large as in more populated areas, unfairly creating an even larger administrative burden for Critical Access Hospitals. CHCS has one full-time pharmacist who serves as the knowledge lead for our 340B program as well as the clinical pharmacist for our system. Additional 340B program needs divert pharmacist time from patient care. Even if we can hire additional staff to assist with the excessive administrative burdens posed to covered entities, the training required to become proficient with the program is extremely time-consuming and therefore incredibly costly. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program: While preparing for the 2026 rebate pilot program, our TPA worked to develop a means for preparing and submitting the necessary reports to the Beacon platform. To have them submit these reports on our behalf will cost CHCS an additional $6,000 a year on top of the administrative costs that we have already incurred with our TPA. CHCS estimates it to take 10-20 hours per week to reconcile the rebates and ensure that our 340B pricing remains intact based on our experience with submitting claims data to 340B ESP. That is considerably more than the HRSA estimate of 5 hours per week Data Collection by Covered Entities/Beacon IT Platform problems: CHCS has been submitting claims through 340B ESP, who shares a parent company with the Beacon platform utilized for the rebate pilot, for quite some time. We frequently experience issues with the platform related to claim mapping and what are considered non-conforming claims. Each quarter, one manufacturer cuts off our access to 340B pricing even with 100% conforming claims. Previously we could contact 340B ESP and they would serve as our go between with the manufacturer and help get the pricing restored for our patients, but increasingly they are having us reach out to the manufacturers directly. This causes a significant delay in pricing restoration. We often discover these pricing discrepancies when our patients of greatest need who rely on the 340B program for access to affordable medications experience a significant price increase at our contract pharmacies. Converting the 340B program from an upfront discount to a rebate model will more than double the time it takes to submit claims to the manufacturers. That is a particularly significant burden to our rural hospital and our patients in need. At CHCS, we have no faith in the Beacon platform based on our experience with 340B ESP. Adverse Impacts of These Additional Costs and Burdens: At CHCS, our patients are our neighbors, our family, and our friends. Because of this, we are proud to say that a huge part of our program is our pass-through savings program at our contract pharmacies. CHCS does not have an in-house pharmacy, so we have already been hit hard by the continued manufacturer restrictions that have made our patients travel greater distances (up to 50+ miles) to access affordable medications. A switch to a rebate model will force CHCS to significantly limit or eliminate our pass-through savings program to be able to reconcile the volume of claims and ensure that we are getting timely rebates. A rebate program will create a significant cash flow issue. CHCS has seen 3 neighboring hospitals stop offering obstetrical services in the last 2 years. The 340B program enables CHCS to continue providing critical services, like obstetrics, in our rural area that break even or sometimes operate at a loss. When your entire program net benefit is $450,000 and your systems annual uncompensated care is nearly equal to that, any reduction in 340B program benefit threatens those services. CHCS feels strongly that a rebate model will lead to poorer control of our patients chronic health conditions by reducing their access to affordable medications, subsequently increasing their risk for hospitalization and emergency department visits, and result in negative health outcomes. Reliance Interests: The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. There mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. CHCS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. In addition to CHCSs reliance on the up-front discount for the necessary cash-on-hand predictions used in our long-term planning and capital purchasing, our patients rely on the upfront discount to purchase what would be otherwise unaffordable medications. Efforts To Avoid 340B/MDPNP Duplicate Discounts: HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on CHCS, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. CHCS does not own a community pharmacy. We rely on relationships with our independent community pharmacy partners. Weve inquired with them to see if they are having any issues with deduplication and we hear consistently that they do not have the staff available to reconcile these rebate payments to even know if they are having issues with it. Rural areas and small businesses do not have the infrastructure to reconcile and manage the deduplication process. A neutral clearinghouse for deduplication and an upfront 340B discount is the only way to ensure a 340B benefit to rural America. For all these reasons, Community HealthCare System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If HRSA chooses to move forward with a Rebate Program, it must allow Community HealthCare System and other covered entities the opportunity to comment on specifics of its new program. We have attempted to be very specific in answering your RFI, however, we lack precise knowledge of critical details (data requirements, possible grounds for denial of rebates, dispute resolution processes, other guardrails) necessary to implement a Rebate Program. If CHCS and other covered entities are not permitted the opportunity to provide additional comments on specific features of the 340B Rebate Program, proper consideration of these important aspects will not have been accomplished. We thank you for the opportunity to submit comments and urge HRSA to carefully consider our concerns. Please do not ask rural hospitals, and therefore the patients they serve, to bear the burden of this significant alteration of the 340B program. CHCS patients rely on the 340B program to gain access to care and to affordable prescription medication. They will be the ones who suffer if we allow extremely wealthy pharmaceutical manufacturers to dictate when and how they provide the 340B discount. We look forward to working with HRSA on this important issue. Please contact me if you have any questions. Sincerely, Hali Brown, PharmD., BCPS Pharmacy Manager/340B Director Community HealthCare System 120 West 8th St, Onaga, KS 66502
HRSA-2026-0001-2141St. Luke's Health System2026-04-20T04:00Z18,368 chars
See attached letter. April 20, 2026 Via Online Submission to www.Regulations.gov Chantelle Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. St. Lukes Health System (St. Lukes) is a community-led, Idaho-based, not-for-profit health system that includes six hospitals and a hemophilia treatment center enrolled as covered entities in the 340B Drug Pricing Program (340B Program). In keeping with our not-for-profit mission, St. Lukes maintains an open-door policy under which we care for all patients regardless of their ability to pay. Thousands of patients with no or inadequate healthcare coverage receive free services at our hospitals and clinics each year. In fiscal year 2025, our 340B covered entities collectively provided charity care at a total cost of over $36 million, and we provided services to patients covered by Medicare, Medicaid, and other government programs for which our unreimbursed costs exceeded $660 million. Our covered entities care for more Medicaid and charity patients than any other provider in our state. Idaho is a predominantly rural state that has experienced rapid population growth in recent years, straining an already limited healthcare workforce. Many of our community members must travel long distances to access care, and Idaho ranks last in the nation in physicians per capita. As the largest healthcare provider in the state of Idaho, St. Lukes is home to a wide range of critical services for residents of Idaho and the rural areas of our bordering states including Idahos only Childrens Hospital and the St. Lukes Cancer Institute, which services many rural communities to keep the care of Idaho cancer patients close to home. The discounts we receive from drug manufacturers participating in the 340B Program are essential to our ability to provide healthcare services and prescription medications to the uninsured, underinsured, and other vulnerable populations we serve. Moving to a 340B rebate model risks significantly eroding these critical 340B savings at a time when safety-net providers are already confronting rising operational costs, declining reimbursement rates, and unilateral drug manufacturer actions that restrict access to 340B priced medications. These pressures are further compounded by the anticipated loss of Medicaid coverage among many of our patients once the administrative and eligibility requirements of the One Big Beautiful Bill Act take effect. We recognize drug manufacturers interest in deduplicating 340B and Maximum Fair Price (MFP) discounts. However, implementing a 340B rebate model would shift the burden of deduplication onto covered entities at a uniquely fragile moment for the nations safety net ecosystem. To avoid this outcome, we urge HRSA to establish a centralized claims clearinghouse administered by an independent third party to facilitate post-payment claims reconciliation. Such a clearinghouse could effectively address April 20, 2026 Page 2 manufacturers MFP deduplication concerns while preserving the upfront 340B discounts that have served as a pillar of our countrys safety net infrastructure for more than 30 years. In doing so, HRSA could either commission its own neutral clearinghouse or work collaboratively with CMS to build upon existing federal infrastructure, such as the Medicare Transaction Facilitator (MTF) portal currently used for claims submission under the Medicare Drug Price Negotiation Program. Leveraging or aligning with this platform could create a more standardized, transparent, and efficient mechanism for data submission, validation, and dispute resolution, reducing reliance on manufacturercontrolled systems while promoting consistency and accountability across stakeholders. This approach would also preserve the benefit of the 340B Program for state Medicaid programs, including Idaho Medicaid, which require covered entities that carve-in Medicaid patients to pass along their actual acquisition costs to the state. These actual acquisition costs include upfront wholesaler discounts, resulting in sub-ceiling 340B pricing; Medicaid programs would lose access to these savings under a rebate model. While we firmly believe an independent claims clearinghouse represents the most balanced and sustainable solution to MFP deduplication, we have provided comments below outlining steps HRSA could take to mitigate the significant harms associated with a 340B rebate pilot, should the agency proceed in that direction. In certain instances, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative with the understanding that they will aggregate and anonymize the information they receive from their participating covered entities. We urge HRSA to give substantial weight to the submission prepared by Hall Render as it details the significant administrative and financial burdens that safety-net hospitals, like our St. Lukes disproportionate share and critical access hospitals, would incur under a rebate model. 1. Manufacturers should not be able to unilaterally deny rebate claims. The RFI notes that [u]nder a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited . . . and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. While these contemplated guardrails are important, they are insufficient unless manufacturers are first required to pay 340B rebates promptly and in full. Manufacturers should be required to remit payment on all unit-level rebate claims within 10 days of submission. Any alleged basis for denying a claimed rebate should be addressed only after payment has occurred and through a structured, HRSA-supervised process. Absent this fundamental protection, a rebate model would invite the same abusive tactics drug manufacturers have employed to restrict covered entity access to 340B priced drugs in other contexts. The risks of allowing manufacturers to deny rebate claims unilaterally are not hypothetical. Beginning in the fall of 2020, drug manufacturers began to impose restrictions on covered entities use of contract pharmacy arrangements, citing unsubstantiated concerns about diversion and duplicate discounts. HRSA unequivocally rejected those actions, concluding that they resulted in overcharges . . . in direct violation of the 340B statute and directing manufacturers to immediately begin offering . . . covered outpatient drugs at the 340B ceiling price to covered entities through their contract pharmacy arrangements.1 1 See, e.g., HRSA Letter to Novartis Pharmaceuticals Corporation Regarding Sales to Covered Entities through Contract Pharmacy Arrangements, here (last visited April 2026). April 20, 2026 Page 3 To date, forty-one drug manufacturers have ignored this clear direction from HRSA, including eight of the manufacturers that were eligible to participate in the initial 340B Rebate Pilot Program. Manufacturers have shown their complete disregard for HRSAs guidance when the agencys enforcement mechanisms are limited, and HRSA has been unable to provide covered entities with any recourse. This history demonstrates that, where manufacturers are permitted to self-police compliance obligations without effective enforcement mechanisms, unilateral access restrictions predictably follow. Given this history, any rebate pilot that permits manufacturers to withhold payment based on unilateral determinations would invite similar abuse. To avoid this outcome, HRSA should require manufacturers to follow a process analogous to that set forth in the agencys long standing Manufacturer Audit Guidelines.2 Specifically, if a manufacturer believes a rebate claim should be denied due to MFP deduplication or because a rebate was already paid to another covered entity for the same unit, the manufacturer should be required to notify the covered entity in writing, including the specific rationale and documentation supporting that belief. The parties should then have at least thirty (30) days to attempt a goodfaith resolution of the issue. If the matter cannot be resolved through goodfaith engagement and the manufacturer seeks to pursue denial, it should be required to submit an audit work plan to HRSA for review and approval, consistent with the procedures outlined in the 1996 guidelines.3 Importantly, and in keeping with those same guidelines, manufacturers should be required to continue paying 340B rebates during the pendency of any audit or dispute. As HRSA has long made clear, the initiation of an audit does not suspend a manufacturers statutory obligations absent an agency determination of noncompliance. 4 In the context of a rebate model, manufacturers should not be relieved of their obligation to remit payment without the same agency determination. In the event that a manufacturer and covered entity cannot resolve a dispute through goodfaith engagement, HRSA should serve as the final arbiter of whether a rebate claim may properly be denied. This approach would protect covered entities from inappropriate withholding of 340B pricing, preserve program integrity, and shift the burden of deduplication back to drug manufacturers, which is their responsibility under the Inflation Reduction Act of 2022. Drug manufacturers are among the most profitable companies in the world and are in a better position than safety-net hospitals to absorb the administrative burden and cash-flow risks associated with a rebate pilot. Allowing manufacturers to unilaterally deny rebate claims would force safety-net providers operating on thin margins to finance manufacturers compliance concerns and expose them to further abuse by those manufacturers. This illogical result would erode and violate the intent of the 340B Program. 2. HRSA can mitigate the financial burdens imposed on covered entities by a 340B Rebate Model Pilot Program by requiring drug manufacturers to follow HRSAs 340B contract pharmacy 2 61 Fed. Reg. 65406 (Dec. 12, 1996). 3 See Id. at 65410. 4 See Id. at 65408. In response to a comment that [m]anufacturers should not be required to continue to sell to a covered entity at the mandated price once an audit has been initiated, particularly since reasonable cause has already been demonstrated, HRSA responded that [m]anufacturers must continue to sell at the statutory price during the audit process. Manufacturers must submit evidence of prohibited activity to HRSA for a review and decision before restricting a covered entities access to 340B pricing. April 20, 2026 Page 4 guidance and/or offer voluntary 340B pricing on orphan drugs in order to participate in the pilot. Moving from an upfront discount to a rebate will impose significant administrative, operational, and cash flow burdens on covered entities. If HRSA allows drug manufacturers to make a unilateral decision to deny rebate claims, we expect that abusive drug manufacturer practices will also further erode our 340B savings. To offset these unintended losses, we urge HRSA to require manufacturers to restore covered entities access to 340B priced drugs using contract pharmacy arrangements, in accordance with long-standing HRSA guidance, as a condition of participating in the 340B Rebate Pilot Program. HRSA could also consider requiring participating drug manufacturers to offer voluntary 340B pricing on orphan drugs, or certain orphan drugs, to those covered entities that are subject to the orphan drug exclusion. The RFI is giving HRSA the opportunity to gather detailed information regarding the financial burdens imposed on covered entities by a rebate model. Both of these options would help offset these burdens. 3. HRSA should establish clear and enforceable terms of use for any manufacturer-controlled rebate platform. If HRSA moves forward with a rebate model, it must carefully consider - and explicitly define - the terms under which any manufacturer-controlled rebate platform would be permitted to operate. Absent clear, enforceable limits, reliance on manufacturer-selected vendors would be burdensome, inefficient, and would invite abusive data practices that undermine covered entity participation in the 340B Program. In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, effectively forcing covered entities to use Beacon or lose access to 340B pricing for ten of the most expensive Medicare Part D drugs. This lack of choice created a de facto monopoly, leaving covered entities with no meaningful ability to negotiate terms or protect their data. Beacons Terms and Conditions exploit this imbalance by granting Second Sight Solutions a broad, perpetual, and irrevocable license to all data submitted by covered entities. These provisions raise serious concerns regarding data ownership, secondary use, and long-term retention, and they deprive covered entities of any practical control over how their information may be used or monetized in the future. Critically, Beacons overreaching terms of use go far beyond what is necessary to facilitate rebate processing. Instead of being narrowly tailored to MFP deduplication, they enable manufacturers and their vendors to engage in ongoing surveillance of covered entity prescribing, dispensing, and utilization patterns. A 340B rebate represents a retrospective pricing adjustment, not payment for patient care, and therefore does not justify the expansive data collection and unrestricted downstream use contemplated by Beacons current terms. This scope far exceeds what would reasonably fall within HIPAAs payment exception and instead serves manufacturers interests in monitoring covered entities and unilaterally restricting the scope of the 340B Program. Giving drug manufacturers latitude in their use of a manufacturer-controlled platform like Beacon would also impose significant operational burdens on covered entities. Covered entities would be forced to devote substantial resources to navigating opaque submission requirements, disputing improper denials, and responding to shifting or inconsistently applied data demands, often without clear notice or standardized April 20, 2026 Page 5 remediation pathways. These inefficiencies are not incidental; they are part of a concerted effort by drug manufacturers to reduce access to 340B pricing and discourage full utilization of 340B Program benefits. Our experience with Second Sight Solutions 340B ESP platform illustrates these risks. As manufacturers restricted access to contract pharmacies - often leaving critical access hospitals with no in-house pharmacy limited to a single external pharmacy - the ESP platform introduced persistent operational and compliance challenges. Notifications regarding missing or deficient claims are frequently vague and fail to identify what information is allegedly missing or why, forcing our St. Lukes 340B compliance team into frustrating cycles of guesswork, resubmission, and repeated follow-up. The platform has also generated inaccurate and misleading alerts, including erroneous claims that submissions were out of balance or outside required timelines, creating unnecessary confusion and administrative burden. In one instance, after considerable time spent investigating such an alert, our 340B compliance team was informed: 340B ESPTM erroneously sent your covered entity an email communication about contract pharmacy locations having insufficient claims. However, none of your contract pharmacy locations currently have a status of at risk and remain eligible, so no further action is required. In other cases, covered entities are directed to contact manufacturers directly to resolve discrepancies or dropped pricing, adding yet another layer of outreach, delay, and administrative burden. These systemic issues highlight the danger of allowing a rebate pilot to proceed with a manufacturer-controlled platform instead of an independent, centralized claims clearinghouse. Thus far, HRSA has been unable to protect covered entities from abusive and illegal restrictions on covered entity access to 340B pricing. Drug manufacturers have shown us the playbook they will use with this kind of platform, and HRSA cannot allow these practices to extend to a rebate pilot. If HRSA permits manufacturers to utilize their own rebate platforms despite this history, it must impose clear and uniform terms of use as a condition of participation. At a minimum, HRSA should require that: (1) covered entity data be limited to the minimal elements necessary and collected, used and retained solely for the purpose of MFP deduplication; (2) data licenses be narrowly tailored, time-limited, and non-transferable; (3) secondary use, monetization, or surveillance activities be expressly prohibited; (4) meet the highest industry cybersecurity standards, including rigorous independent security assessments, to ensure the protection of sensitive data; and (5) transparent standards governing submissions, notifications, denials, and dispute resolution be enforced. Without these guardrails, a manufacturer-controlled platform model will create unnecessary administrative burden, exacerbate cash-flow risks, and expose covered entities to abusive data practices that are incompatible with the intent and structure of the 340B Program. Thank you again for the opportunity to respond to this RFI. We would welcome the opportunity to discuss these concerns and recommendations with you further. Sincerely, Christine Neuhoff, JD, MBA Senior Vice President and Chief Legal Officer St. Lukes Health System
HRSA-2026-0001-2142Hospital District2026-04-20T04:00Z10,200 chars
Please see the attached letter for the proposed rebate model. This is disastrous to rural critical access hospitals across the nation. MOORE COUNTY HOSPITAL DISTRICT 224 East 2nd Street * Dumas, TX 79029 Tel (806) 935-7171 * (888) 958-7171 * FAX (806) 934-6578 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Moore County Hospital District (MCHD) in Dumas, Texas, we appreciate the opportunity to comment on the Department of Health and Human Services' Request for Information regarding a potential 340B Rebate Model Pilot Program. HRSA has asked whether it should implement a rebate model under the 340B Program in place of the longstanding upfront discount mechanism. The answer is clearly no. Any rebate model would impose significant administrative, operational, and financial burdens on MCHD that far outweigh any potential benefit. More fundamentally, the proposal is based on a flawed premise that HRSA must balance the interests of covered entities and drug manufacturers. The statutory purpose of the 340B Program is to enable covered entities to "stretch scarce federal resources as far as possible." The current upfront discount model achieves that purpose. A rebate model does not. Administrative Costs Under a Potential 340B Rebate Program Moore County Hospital District (MCHD) anticipates approximately $295,000 in incremental administrative and operational costs under any rebate model, inclusive of both one-time startup costs and recurring ongoing expenses. While this estimate reflects MCHD's best current assessment, it is conservative. Based on operational realities in rural hospitals, actual costs could reasonably exceed $395,000 annually depending on Hospital and Emergency Room (806)935-7171 * Memorial Hospice (806) 935-4884 Moore County General Surgery (806) 935-5094 * Moore County Foot & Ankle (806) 934-9503 Moore County Family Health Clinic (806) 935-1900 * Moore County Rehabilitation Services (806) 935-2225 * Memorial Nursing and Rehabilitation Center (806) 935-6500 denial rates, data requirements, vendor pricing, and the level of manual intervention required. One-time costs would include workflow redesign, legal and contract review, staff training, third-party administrator (TPA) and wholesaler configuration, internal policy revisions, and information technology build or interface development. Recurring costs would include claim identification, submission, reconciliation, denial management, rebate tracking, audit support, compliance monitoring, and ongoing oversight by fmance, pharmacy, revenue cycle, and compliance leadership. At a minimum, MCHD expects to incur substantial recurring labor across multiple departments and will require the addition of at least one full-time employee (FTE) dedicated to managing rebate-related functions. Based on internal assessment: Estimated one-time startup costs: $95,000 Estimated annual ongoing costs: $200,000 Estimated ongoing staff burden: approximately 45 additional hours per week across pharmacy, finance, compliance, reimbursement, and IT functions, inclusive of one dedicated FTE These estimates are conservative and do not fully capture variability associated with denial rates, dispute resolution timelines, or manufacturer responsiveness. Because HRSA has indicated that up to 25 drugs could be included, the burden estimate must account for a significantly broader operational footprint. This expanded scope will increase claim volume, expand denial management workload, and require MCHD to front more capital while awaiting rebates. Staffing Impacts Under a Potential 340B Rebate Program MCHD does not currently have the staffing capacity necessary to comply with a rebate model. Implementation would require at least one additional FTE, along with significant reallocation of responsibilities from existing staff across pharmacy, finance, compliance, revenue cycle, and IT. The FTE would be responsible for claim validation, submission, rebate tracking, denial management, audit support, and coordination with TPAs and manufacturers. In addition, current leadership and staff would absorb approximately 45 hours per week of additional workload. Hospital, Emergency, & Sleep Lab (806)935-7171 * Memorial Hospice (806) 935-4884 Moore County General Surgery (806) 935-5094 * Moore County Foot & Ankle (806) 934-9503 Moore County Family Health Clinic (806) 935-1900 * Memorial Home Health (806) 935-4946 Moore County Rehabilitation Services (806) 935-2225 * Memorial Nursing and Rehabilitation Center (806) 935-6500 MCHD anticipates needing 90-120 days of advance notice to recruit and onboard appropriate staff, particularly given rural workforce limitations. HRSA's estimate of 5 hours per week is not realistic. It assumes automated systems, minimal denials, and limited coordination. In reality, MCHD relies on manual processes for data extraction, validation, and reconciliation, and must actively manage denials and discrepancies. The actual workload is significantly higher. Systems and Infrastructure MCHD's systems are designed around an upfront discount model. A rebate model would require new or modified IT systems, including data extraction processes, formatting, validation, and submission workflows. MCHD would have to establish direct data feeds between its electronic health record and third-party administrators, increasing both cost. Payment Timing and Potential Cash Flow Impacts A rebate model would require MCHD to purchase drugs at full wholesale acquisition cost and wait for reimbursement, shifting financial risk from manufacturers to the hospital. Even under a 10-day payment assumption, MCHD would be required to front substantial capital for high-cost drugs. In reality, delays due to disputes or incomplete data would extend payment timelines significantly. MCHD does not maintain excess liquidity to absorb this burden without consequence. A rebate model would: I Reduce available cash on hand Increase financial risk and variability Require greater focus on short-term liquidity management Undermine financial stability in a rural hospital setting The assumption that rebates would be received before wholesaler invoices are due is not operationally realistic. MCHD would routinely pay for drugs well before receiving rebates, effectively providing interest-free financing to manufacturers. Adverse Impacts to Patients and Community Hospital, Emergency, & Sleep Lab (806)935-7171 * Memorial Hospice (806) 935-4884 Moore County General Surgery (806) 935-5094 * Moore County Foot & Ankle (806) 934-9503 Moore County Family Health Clinic (806) 935-1900 * Memorial Home Health (806) 935-4946 Moore County Rehabilitation Services (806) 935-2225 * Memorial Nursing and Rehabilitation Center (806) 935-6500 The cumulative impact of increased administrative costs, staffing burdens, and cash flow strain would directly affect patient care. As a Critical Access Hospital serving a rural population with a high proportion of Medicare and Medicaid patients, MCHD relies on 340B savings to sustain essential services. A rebate model would force MCHD to: Delay or cancel capital projects Reduce or limit certain service lines Scale back community health programs Limit provider recruitment and retention MCHD serves as a primary access point for care in a geographically large rural area. If services are reduced or high-cost drugs become financially unsustainable to stock, patients may be forced to travel long distances, creating barriers to care and worsening outcomes. Access to medications is a significant concern. The need to front costs and manage delayed rebates may make it infeasible to consistently stock certain high-cost drugs, directly impacting patient treatment. Reliance Interests MCHD has structured its operations, staffing, and financial planning around the longstanding upfront discount model. A shift to a rebate mechanism would disrupt these established systems and impose substantial new costs without justification. There is no demonstrated failure of the current model that warrants such a fundamental change. Efforts to Avoid Duplicate Discounts MCHD supports alternative approaches, including a neutral third-party clearinghouse, to address any concerns related to duplicate discounts. These approaches would be significantly less burdensome than a rebate model and would better preserve the intent of the 340B Program. Hospital, Emergency, & Sleep Lab (806)935-7171 * MemoriaI Hospice (806) 935-4884 Moore County General Surgery (806) 935-5094 * Moore County Foot & Ankle (806) 934-9503 Moore County Family Health Clinic (806) 935-1900 * Memorial Home Health (806) 935-4946 Moore County Rehabilitation Services (806) 935-2225 * Memorial Nursing and Rehabilitation Center (806) 935-6500 Conclusion For all of these reasons, Moore County Hospital District respectfully submits that the costs and risks associated with a rebate model far outweigh any potential benefits. HRSA should not proceed with this proposal and should instead preserve the existing upfront discount structure or pursue less burdensome alternatives. If HRSA does move forward, it must provide additional opportunities for comment once program specifics are defined. We appreciate your consideration of these comments and welcome the opportunity to provide additional information. incerely, di 64 . Ashleigh Is w ell Chief Operations Officer Moore County Hospital District Dumas, Texas Hospital, Emergency, & Sleep Lab (806)935-7171 * Memorial Hospice (806) 935-4884 Moore County General Surgery (806) 935-5094 * Moore County Foot & Ankle (806) 934-9503 Moore County Family Health Clinic (806) 935-1900 * Memorial Home Health (806) 935-4946 Moore County Rehabilitation Services (806) 935-2225 * Memorial Nursing and Rehabilitation Center (806) 935-6500
HRSA-2026-0001-2143PanCare of Florida, Inc.2026-04-20T04:00Z43,596 chars
See attached file(s) Docusign Envelope ID: B32F3187-2A48-8CDA-8391-624824FEC1A5 0F FLORIDA, INC. April 12, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of PanCare of Florida, Incorporated, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report losses from entity-owned pharmacy operations and savings reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. PanCare of Florida, Inc. provides affordable primary, dental, pharmacy, vision and behavioral health care to over 54,000 residents across Northwest Florida, regardless of insurance status. We believe affordable health care should be accessible to all individuals. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 2 Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a fmancial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. htt -)s://www.alidourna1s.oro/doi/ el 0. I 161/circulationaha.123.065748 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. littps://www.samhsa., ov/data/d ata-we-co Ilectin -n ati on al-s urve ,dru - u se-an d-h cal th /n ati o n a I -rel ea ses 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatrnent for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: PanCare of Florida, Inc. provides sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PanCare of Florida, Inc. anticipates needing 2-3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, PanCare of Florida, Inc. anticipates an increase to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate that we will need to add at least 2-3 FTEs to meet the anticipated demand. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing 7 Internal NACHC assessment (99 responses). 8 Ibid. 4 drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PanCare serves 54,000 unique patients, and we estimate that additional staff will cost at least $100,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that at least 80 hours every week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PanCare of Florida, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmac\ Software & Third-Part\ Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recuning costs that diminish our 340B savings. Total Cost: For our CHC, which serves 54,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to increase significantly annually. The In-House Pharmac : The Burden of Dem IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our PMS requires us to manually pull reports that we formulate and comprise ourselves to have the valid data needed. We will then have to use these reports to locate and follow each claim one by one-similar to our process with MFP claims now which has proven very time consuming. This leads us to anticipate $100,000 annual labor cost. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 80 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. 5 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 61 contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 61 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Florida Panhandle with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Svstems Reqpired Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. 9 VUInerahilit ! Index A ).)roach to Identif Pharmac Deserts and Ke 'stone Pharmacies Pharmac and Clinical Pharmaeoloe, JAM A Network Onen JAMA Network I httls:!iwwwhealthaffairs.or idoihtbs' I 0. I 377fhlthaff.2024.00 I 92TournalCode=hlthaff II Internal NACHC survey data 6 HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. PanCare uniformly offers to all patients a sliding fee discount program. Eligibility for the sliding fee discount program is based on household size and gross household income. The sliding fee discount program will be applied uniformly to all patients. The demand for services continues to increase and in order to serve as many people as possible in the fairest way, PanCare has developed the sliding fee discount program policies and procedures. PanCare also has a policy to never deny a services based on patient's inability to pay. The sliding fee policy and procedure is observed and practiced in all settings of PanCare, including the pharmacy with patient prescription costs. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. htt hc.hrsa.eov/com iliance/com )liance- manual/c4pter9#footnote10 7 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14httos://enlivenhealth.co,blooivear-end-business-health-check-kev-metrics-ex cry-lharmac ,-owner-should-review ts htt)s://34011 iricine.hrsa.eov/ 8 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data subrnission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $1.3 million annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $80,000 annually to purchase these same drugs at the 340B ceiling price. This represents a 1500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PanCare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Operating Hours: We anticipate needing to reduce our clinic hours 28 hours per week, specifically impacting our evening and weekend hours, which are the only times our working- class and agricultural patients can seek care without losing wages. Workforce & Staffmg: The administrative burden of this pilot requires us to divert funds away from clinical staff. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 20,000 uninsured patients from rationing their insulin or heart medication. 16 Mils: //www. CM ti. ov/f1 les/zip/selected-dru _ -list-ne_ otiated-orices-also-known-maximum-fairTrices-statutezip.zi. 9 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PanCare of Florida, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. . Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. . Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. PanCare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $110,000. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PanCare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PanCare of Florida, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed 10 in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.' If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $1.1 million. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) httis://www.federalrc. ister.gov/documents/2025/08/01/2025-14619/340b-orooram-notice-ap,lication-xocess-for-the-340b- rebate-model-pilot-31-o_ ram 11 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate coinpliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 12 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PanCare of Florida, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PanCare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PanCare of Florida, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Lori Goodman at lgoodman@pancarefl.org. Sincerely, DocuSigned by: 8D74AA5B8580452.. Robert Thompson, CEO PanCare of Florida, Inc. 13
HRSA-2026-0001-2144Mazzoni Center2026-04-20T04:00Z115,480 chars
See attached file(s) April 20th, 2026 SUBMITTED VIA REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information - 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Mazzoni Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. This destabilization would further impact CHCs ability to provide lifesaving, low-cost care to Americans who need it the most Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts, as follows: Financial Losses: Based on our 2025 data, Mazzoni Center experienced a financial loss of approximately $710,752.51 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation, even without implementation of a rebate program. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single, mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot rebate program, should it be implemented. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. Mazzoni Center and NACHC Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications and care to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The 2 proposed rebate model undermines this by placing an immense financial and administrative burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Mazzoni Center in particular, this would place significant operational and financial strain on the programs, infrastructure, and patient support services that currently allow us to meet community need, including: Serving 10,066 patients in 2025; Maintaining our 340B administrative, compliance, and oversight infrastructure, including $149,192 in Third Party Administrative pharmacy costs and $213,318.56 in staffing costs; and Sustaining patient affordability programs supported by 340B savings, including $1,601,445 in sliding fee discounts provided in 2025 to our most vulnerable patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients across the United States. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access and medical treatment for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. NACHC has significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. NACHC is deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. Moreover, the United States is in the midst of an alarming mental health crisis. Nearly one4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full Wholesaler Acquisition Cost (WAC) rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers purported concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. NACHC urges HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. 5 A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with our consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Mazzoni Center provided $1,601,445 in sliding fee discounts in 2025 through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Mazzoni Center anticipates needing approximately 1.1 additional FTEs to account for the increase in regulatory, operational, and administrative burden created by a rebate model. External Vendor Costs: Given increased complexity, Mazzoni Center anticipates an increase of $46,000 in external support vendor costs related to a rebate model, in addition to existing vendor expenses. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Mazzoni Centers estimate falls within that range at approximately 1.1 additional FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For Mazzoni Center, the projected added staffing cost alone is approximately $100,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Based on our staffing projections, Mazzoni Center anticipates dedicating roughly 44 additional staff hours per week to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mazzoni Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Third-Party Administration, Systems, and Reporting Changes Navigating this pilot requires more than additional staffing; it also requires significant changes to Third-Party Administrator (TPA) workflows, internal systems, and reporting processes. NACHC encourages HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate meaningful upfront costs to modify internal workflows, support custom reporting and dashboard development, and implement the processes necessary to manage rebate-model requirements. While our tables do not yet isolate a separate one-time build cost, Mazzoni Center projects at least $46,000 in added external vendor expense to support rebate-model administration, exclusive of any future system customization or dashboard build costs. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 10,066 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $190,660.67 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with 78 pharmacies to increase access to affordable medications for Mazzoni Centers patients. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees, further reducing critical 340B savings. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 78 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we also fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Philadelphia Area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Mazzoni Center, most medications dispensed or administered in-house are provided at no cost to the patient, and our contract pharmacy arrangements allow uninsured and underinsured patients to receive medication at a significantly discounted price when they pick up their prescriptions at our contract pharmacies. This current structure allows us to provide meaningful, point-of-sale affordability for patients based on financial need and program eligibility. Under a rebate model, that process would become significantly more uncertain because the 340B price would no longer be available upfront, limiting our ability to consistently offer the same level of immediate discount at the time of dispensing and shifting more of the financial burden to patients at contract pharmacies. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler pricing update that is uploaded into the software . Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to significant financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create further financial strain on CHCs. NACHC appreciates HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current maximum fair price (MFP) to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. NACHC is concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. NACHC and Mazzoni Center respectfully request that, if a rebate pilot is implemented, which it should not be, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with our consultant, FQHC 340B Compliance, to create another calculator for all 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by National Drug Code (NDC).15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $42,307.56 to purchase these 2026 selected drugs under the proposed rebate model in just Q1. Currently, our organization spends $7,022.70 to purchase these same drugs at the 340B ceiling price. This represents a 602.4% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Mazzoni Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as case management and HIV testing services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund critical support staff such as case managers, community health workers, medical assistants, and various other clinical support staff. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be greatly compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,345 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead Community Health Centers like ours to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mazzoni Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources to serve under-resourced patientsby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to the uncertainties created by a rebate model. In short, the shift to WAC pricing disrupts the fundamental and longstanding mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as being higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Mazzoni Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $320.14. Mazzoni Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,305.11 in 2026 ($27,661.32 annually) and $3,525.63 in 2027 ($42,307.56 annually), with that burden rising dramatically to $227,457.59 annually starting in 2028. This sharp year-over-year escalation highlights how the financial impact of a rebate model would intensify over time and become increasingly unsustainable for our organization. 11 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to rely on limited financial reserves. This is not a sustainable approach, as those same funds are needed to support the hiring of additional medical providers, behavioral health providers, and clinical support staff, all of which are critical to expanding access and advancing our mission. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Mazzoni Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Mazzoni Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework contemplated in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing at compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss and render the proposed timeframe illusory. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. Indeed, any rebate model would subvert the entire basis and legislative intent behind the 340B program and is likely unlawful. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions, over and above the fact that it is likely unlawful under the current statutory scheme and Administrative Procedures Act. As a covered entity and NACHC member, we request that any process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor, Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits. The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates on under-resourced CHCs. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and 13 general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B programs intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.17 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. NACHC is concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. NACHC is respectfully requesting, as are we, that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,18 CHCs could be waiting up to two years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, NACHC recommends that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. 17 340B House Report Legislative History. H.R. REP. 102-384(II). 18 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 14 A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the covered entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed under any proposed rebate program. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act (IRA) statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to 15 covered entities.19 Systems or methodologies that effectively transfer this determination to private manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased visibility for manufacturers, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes20 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. NACHC requests that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. 19 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 20 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, which it should not, Mazzoni Center requests that the 340B rebate model pilot not include clinic-administered drugs. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under the Prospective Payment System (PPS) and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.21 CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.22 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing 21 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 22 Internal NACHC survey data 17 a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 18 CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,23 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.24 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.25 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least 23 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 24 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 25 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 19 burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statute was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.26 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).27 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority 26 H.R. REP. 102-384(II) 27 42 U.S.C. 256b(a)(1) 20 under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.28 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA; moreover, drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication and is unsupportable from a legal perspective. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in its first paragraph. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).29 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, the statutory language provides that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.30 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.31 HRSA and drugmakers may only audit such Medicaid claims after such 28 Id. 29 42 U.S.C. 256b(a)(1) 30 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 31 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is 21 covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has been billed to the Medicaid state plan.32 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.33 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.34 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 32 42 U.S.C. 256b(a)(5)(C). 33 42 U.S.C. 256b(a)(5)(C). 34 See 42 U.S.C 256b(a)(5)(A). 22 instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.35 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.36 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenges and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available 35 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 36 C.F.R. 447.518(a). 23 through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. Nothing in HHSs design of such a model requires drug manufacturers to charge Community Health Centers one of the highest possible prices at the point of purchase. Rather, a rebate model could be structured through mechanisms such as upfront discounts with retrospective credits or debits, a neutral clearinghouse, or a government- administered clearinghouse repository. Several of these approaches are discussed later in this letter. These alternatives would allow for reconciliation of manufacturer rebate liability without shifting the upfront financial burden onto local CHCs. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agencys determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.37 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.38 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.39 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid 37 42 C.F.R. 447.502 38 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 39 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 24 managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.40 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative 40 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 25 Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.41 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.42 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy 41 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 42 42 U.S.C. 256b(a)(5)(A)(emphasis added). 26 Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.43 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.44 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.45 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs 43 32 C.F.R. 199.21(q)(2)(iii)(E) 44 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 27 routinely pay significant sums to obtain access to such data.46 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.47 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.48 Drug industry data vendors have reported that such data is highly valuable to manufacturers.49 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.50 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.51 NACHC believes that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 50 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 51 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report, Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 28 HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.52 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.53 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.54 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.55 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. NACHC harbors significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute (AKS)and analogous state laws.56 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks under the AKS and other legal frameworks as well as potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons too, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. 52 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 53 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 54 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 55 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 56 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 29 VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain who is an eligible patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.57 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships; indeed, they are not even involved in care of the individuals CHCs serve. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.58 And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.59 57 42 U.S.C. 256b(a)(5)(B) 58 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 59 H.R. REP. 102-384, 16 30 IX. Establishing a National, Neutral Claims Clearinghouse NACHC recommends OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drugs administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program and the savings that permits safety net care for thousands. Protect patient access to affordable MFP drugs and affordable care. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether and impact care for the thousands of patients who depend on CHCs. 31 B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be more complete and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. 32 For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model60 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 60 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. CONCLUSION Mazzoni Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with the onerous administrative requirements of a rebate program and to track and seek rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law for CHCs. Mazzoni Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Finally, such a program violates the 340B statute and other legal strictures and would be an unlawful exercise of HRSAs authority. Mazzoni Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Simon Trowell, Chief Executive Officer, at strowell@mazzonicenter.org or Geoffrey Bruen, Chief Legal Officer, at gbruen@mazzonicenter.org Sincerely, Simon Trowell Chief Executive Officer Mazzoni Center 1348 Bainbridge Street Philadelphia, PA 19147 (215) 563-0652
HRSA-2026-0001-2145Community Health Association of Spokane (CHAS Health)2026-04-20T04:00Z23,787 chars
Attached is a comment letter from Community Health Association of Spokane (CHAS Health). We appreciate the opportunity to provide feedback. April 20, 2025 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: Community Health Association of Spokane (CHAS Health) is a Federally Qualified Health Center (FQHC) based in Spokane, Washington serving both rural and urban populations in eastern Washington and north-central Idaho from 29 physical clinic locations. The 340B program is foundational to CHAS Healths ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through implementation of a rebate model threatens to destabilize the operations of CHAS Health as well as for Community Health Centers (CHCs) nationwide. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible to meet the needs of the communities they serve. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHAS Healths ability to serve the more than 126,000 patients who rely on us for medical, dental, and behavioral health services in addition to more than a million prescriptions annually. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally unfeasible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured or underinsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. For CHAS Health, in the first year alone we anticipate needing to add at least two additional FTEs in addition to increased costs for external support vendors to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. CHAS Health anticipates that reporting, tracking, and researching denied claims will take 80+ hours per week, including daily uploading of claims. Each prescription that is part of this rebate program will need to be individually tracked, and any delays will result in reduced cash on hand for CHAS Health, limiting opportunities to support patients in our community. Additionally, due to ordering requirements CHAS Health will have inventory purchased at Wholesale Acquisition Cost (WAC) that will not receive rebate until all inventory is dispensed through new prescriptions or refills. For example, if the smallest available bottle size is a quantity of 100 but the prescription is written for only 30 units, CHAS Health will be required to purchase the full quantity of 100 at WAC. Only 30 units would be dispensed and eligible for rebate, while the remaining inventory would sit in the pharmacy at WAC cost until a new prescription or refill is received. This is a waste of scarce resources that could be better used to meet patient needs. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If HRSA proceeds with this rebate pilot, CHAS Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs including CHAS Health would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs like CHAS Health that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. CHAS Health would need to work with our pharmacy IT vendor to configure two different acquisition costs for the same drug, requiring daily tracking as well as close monitoring of quarterly changes to 340B pricing. Each time the 340B price changes, the cost table would need to be manually updated to ensure we are submitting the correct pricing for patients. Staff will be forced to manually pull Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination CHAS Health currently partners with pharmacies in the communities where our patients live to increase access to affordable medications for patients. For these contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that TPAs will pass on the costs of developing rebate-tracking modules to CHCs through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff would be required to monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. This is already occurring as a result of the Medicare Drug Price Negotiation Program (MDPNP), and the additional burden of a rebate model will cause even more contract partners to opt out of 340B. A. Financial Challenges It is HRSAs expectation that CHCs maximize third party reimbursement as well as have a minimum level of days cash on hand to ensure financial security. Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC) and wait for a rebate, putting their ability to maintain minimum days cash on hand in jeopardy. This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. Based on our organizations data, CHAS Health estimates a 255% increase in upfront capital required for procurement of the 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. This change will force CHAS Health to make difficult decisions about how to allocate our limited financial resources, including potentially cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.2 A CHC can adjust the cost of health care services based on a patients income and family size. In line with our mission, CHAS Health offers sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.3 CHAS Health is particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead us to exceed credit limits with wholesalers, halting our ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded at CHAS Health-owned pharmacies with physical inventories that must stock shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10- 12 times a year (roughly every 30 days).4 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. There may be other delays in receiving the full rebate, such as denials, which could create financial strain. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current maximum fair price (MFP) to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to 2 HRSA FAQ 3 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 4https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. B. Financial Impact of Rebate Denials and Delays Every dollar CHAS Health pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to other financial obligations and potential emergencies. To navigate the rebate model, our organization would be forced to dip into our limited financial reserves, creating financial instability, and potentially reduce services to patients. CHAS Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.5 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Any reduction in financial resources will directly affect CHAS Healths ability to fulfill our mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion- dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. For some CHCs it could mean leveraging a line of credit or other financing in order to maintain liquidity. 5 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs including CHAS Health already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. The Office of Pharmacy Affairs (OPA) has already established a comprehensive Information System (OPAIS) which limits application of 340B to those entities which satisfy 340B eligibility requirements and provides a database for preventing duplicate discounts and drug diversion. This is in addition to auditing functions of the OPA, the Operational Site Visit (OSV) and the statutory right of manufacturers to conduct reasonable audits related to diversion and duplicate discounts. A rebate model is not only redundant, but contrary to the very purpose of the 340B program by impeding patient access to discounted medications and unnecessarily passing significant costs to CHCs. In alignment with Section 330 of the Public Health Service Act, we utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular OSVs to verify Health Center Program compliance and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients we serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. As stated previously, CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CHAS Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CHAS Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CHAS Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me directly. Sincerely, Aaron Wilson, CEO
HRSA-2026-0001-2146Eisner Health2026-04-20T04:00Z44,662 chars
Please see the attached Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) document from Eisner Health. Thank you very much for your consideration. April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Eisner Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Eisner Health anticipates a loss of approximately $400,000.00 from entity- owned pharmacy operations due to the incremental costs necessary to support the increased administrative hurdles. This loss will compound in future years as the program expands. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Eisner Health provides culturally competent, full life-cycle medical care, prenatal care, labor and delivery, womens health services, dental care, behavioral health care, optometry, dermatology, case management/care coordination, supplemental services (patient benefits and enrollment, outreach), and an on-site pharmacy and lab. We are the provider of choice for more than 40,000 children, adults, and older adults in Los Angeles County each year. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Eisner Health in particular, this means it will impact: 95,178 340B transactions/ 42643 patients served by Eisner Health Current admin costs for Eisner Healths 340B program: $1,967,166.80 Eisner Health uses our 340B savings to fund adult vaccinations, provide an acquisition cost based sliding fee scale for our uninsured patients and provide free medications for victims of crime patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs due to a multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Eisner Health provided $2,804,252.01 in sliding fee discounts, provided through discounted medications and primary care services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Eisner Health anticipates needing 1.2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Eisner Health anticipates an increase of $375,000.00 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 7 Internal NACHC assessment (99 responses). 5 Eisner Health estimates adding 1.2 FTE to address additional reporting and program administration at $252,439.00 Eisner Health anticipates its upfront drug costs for rebate program to exceed $2,567,331.32 in 2026; this is an increase of 79,053% in current drug spend. The upfront drug costs increase year over year as more products are added to the program with an anticipated cost of $5,560,628.97 in 2027 and $5,802,779.23 in 2028. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Eisner Health estimates a minimum of 48 hours per week to report claims and remain compliant with the rebate program will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Eisner Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $102,500.00 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 42,643 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $689,000.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. While no software solutions are available, pharmacy software and electronic health systems a like are looking to program guidance to build interoperability. One-Time Integration Costs: We anticipate high upfront costs, $102,500.00 to pay software vendors for custom API builds and "Price File" reconciliation tools. 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 48 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 8 Internal NACHC survey data 7 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,567,331.32 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $33,718.99 to purchase 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 these same drugs at the 340B ceiling price. This represents a 79,053% increase in upfront working capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Eisner Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as laboratory testing for our patients, adult vaccinations, and auxiliary support roles such as case management and care coordination (non-revenue generating positions). Operating Pharmacy Services: The incremental investments necessary to operate the pharmacy could create an unsustainable environment for Eisner Health to continue to operate an In-House pharmacy. Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Eisner Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Eisner Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $869,401.65. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Eisner Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $210,722.09 for a 30-day supply. 10 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. While funds are tied up in the rebate process Eisner Health is expected to incur an opportunity cost of $93,099.87 over the next 3 years. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Eisner Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $384,567.81. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 12 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. Eisner Healths Medicaid patient population is 81% of the total patient 13 population. The number of rebate-eligible prescriptions dispensed from the Eisner Health In-House pharmacy is 75,642. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Eisner Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Eisner Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 14 Eisner Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Sergey Navolnev, CFO, at snavolnev@eisnerhealth.org. Sincerely, Monica McCarthy President & CEO Pediatric and Family Medical Center DBA Eisner Health
HRSA-2026-0001-2147South Carolina Primary Health Care Association2026-04-20T04:00Z22,247 chars
On behalf of the South Carolina Primary Health Care Association, I am submitting the attached comments in response to 340B Rebate Pilot Program RFI. Access to Quality Health Care for All of South Carolina 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the South Carolinas 24 Community Health Centers (CHCs) and the more than 445,000 patients they serve, the South Carolina Primary Health Care Association (SCPHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, SCPHCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org Summary of Comments: In these comments, SCPHCA explains: A. The importance of 340B savings to South Carolinas CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their over 250,000 low- income patients, many of which were uninsured (over 108,000). B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in South Carolina, CHCs routinely rely on 340B savings to support services such as behavioral health services, school-based health programs, oral health services, clinical pharmacy services, care coordination and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by South Carolinas CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs have begun or are planning to reduce service lines and/or forgo additional services needed to meet the needs of their communities. 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at vickiy@scphca.org or 803-318-8253. Sincerely, Vicki M. Young, PhD Chief Executive Officer 3 Technology Circle, Columbia, South Carolina 29203 T. 803.788.2778, 800.438.3895 F. 803.788.8233 www.scphca.org Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2148Alondra Maldonado · Alamosa, CO, United States2026-04-20T04:00Z6,982 chars
See attached file(s) TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Alondra Maldonado, patient board member of Valley-Wide DATE: April 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 My name is Alondra Maldonado, and I am a patient board member of Valley-Wide Health Systems. I have served in this capacity for 10. Valley-Wide is a Federally Qualified Health Center providing primary and preventive care at 34 service sites located throughout 14 rural counties in Southern Colorado covering over 31,000 square land miles. Valley-Wide provides medical, dental, behavioral health, pharmacy, physical therapy, and crisis services to 35,907 patients. The potential 340B Rebate Model Pilot Program, as proposed by the Health Resources and Services Administration (HRSA), would be detrimental to Valley-Wides financial operating margins, and it would directly and negatively impact me, as a patient. As a patient, Valley-Wide Health Systems has been a lifeline for so many families in our rural, agricultural communities. In areas like ours, healthcare is not something we can easily access. Many of us travel long distances, take time off work during critical farming or ranching seasons, and make difficult choices just to be seen by a provider. Valley-Wide changes that. It brings care closer to home and makes it possible for families like mine to get medical, dental, and behavioral health services without sacrificing our livelihoods. For agricultural families, missing work is not just an inconvenience; it can mean lost crops, lost income, or falling behind in ways that are hard to recover from. The 340B program helps ease that burden by making medications affordable and accessible when we need them. For my family and me, it has meant not having to choose between paying for prescriptions or paying for groceries, fuel, or necessities. It has meant peace of mind knowing we can manage our health without putting our financial stability at risk. If the 340B program moves to a rebate model, it threatens that stability. Delays in funding and reduced resources would directly impact the care we rely on. In rural agricultural communities, there are no backup optionsno nearby hospitals or clinics to absorb the loss. If Valley-Wide has to cut services or reduce support, families like mine will feel it immediately. We would face longer wait times, higher costs, and in some cases, no care at all. That reality is not just inconvenientit is dangerous. I urge you to reconsider a 340B rebate model and, at the very least, exempt CHCs from any proposed or pilot rebate model for the 340B program. The ultimate goal of the program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and provide discounted medications to patients upfront. CHCs are already statutorily required to pass the discounted price onto the patient ensuring that we, the patients, see the full, intended benefit of the program. Personally, the 340B program allows me to stay healthy, manage my health, and afford the medications that I and my family member(s) need. Alondra Maldonado TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Alondra Maldonado, patient board member of Valley-Wide DATE: April 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 My name is Alondra Maldonado, and I am a patient board member of Valley-Wide Health Systems. I have served in this capacity for 10. Valley-Wide is a Federally Qualified Health Center providing primary and preventive care at 34 service sites located throughout 14 rural counties in Southern Colorado covering over 31,000 square land miles. Valley-Wide provides medical, dental, behavioral health, pharmacy, physical therapy, and crisis services to 35,907 patients. The potential 340B Rebate Model Pilot Program, as proposed by the Health Resources and Services Administration (HRSA), would be detrimental to Valley-Wides financial operating margins, and it would directly and negatively impact me, as a patient. As a patient, Valley-Wide Health Systems has been a lifeline for so many families in our rural, agricultural communities. In areas like ours, healthcare is not something we can easily access. Many of us travel long distances, take time off work during critical farming or ranching seasons, and make difficult choices just to be seen by a provider. Valley-Wide changes that. It brings care closer to home and makes it possible for families like mine to get medical, dental, and behavioral health services without sacrificing our livelihoods. For agricultural families, missing work is not just an inconvenience; it can mean lost crops, lost income, or falling behind in ways that are hard to recover from. The 340B program helps ease that burden by making medications affordable and accessible when we need them. For my family and me, it has meant not having to choose between paying for prescriptions or paying for groceries, fuel, or necessities. It has meant peace of mind knowing we can manage our health without putting our financial stability at risk. If the 340B program moves to a rebate model, it threatens that stability. Delays in funding and reduced resources would directly impact the care we rely on. In rural agricultural communities, there are no backup optionsno nearby hospitals or clinics to absorb the loss. If Valley-Wide has to cut services or reduce support, families like mine will feel it immediately. We would face longer wait times, higher costs, and in some cases, no care at all. That reality is not just inconvenientit is dangerous. I urge you to reconsider a 340B rebate model and, at the very least, exempt CHCs from any proposed or pilot rebate model for the 340B program. The ultimate goal of the program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and provide discounted medications to patients upfront. CHCs are already statutorily required to pass the discounted price onto the patient ensuring that we, the patients, see the full, intended benefit of the program. Personally, the 340B program allows me to stay healthy, manage my health, and afford the medications that I and my family member(s) need. Alondra Maldonado
HRSA-2026-0001-2149Second Sight Solutions, LLC2026-04-20T04:00Z26,018 chars
See attached file(s) regarding HHS Docket No. HRSA-2026-03042. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Second Sight Solutions, LLC (Second Sight) appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information (RFI) published February 13, 2026, regarding a potential rebate model pilot program.1 Second Sight is a technology provider with a vision to promote transparency and integrity with healthcare innovators and industry partners. Second Sight provides technology services that identify and address 340B deduplication, including facilitating 340B and MFP data exchange among manufacturers and covered entities. Our team of industry-recognized experts combines deep policy knowledge with practical, technology-enabled solutions to deliver insight, innovation, and impact to manufacturers and integrate with and support their partners, including covered entities, third-party administrators (TPAs), and dispensing pharmacies. These comments reflect our operational experience and do not represent any individual clients position. Since 2020, Second Sight has operated 340B ESP, a technology platform that supports pharmaceutical manufacturers 340B channel management policies, including by allowing covered entities to submit 340B claims data.2 Today, more than 30 manufacturers use the 340B ESP platform, and we have integrations with 33 TPAs. Since its inception, the platform has collected 340B claims data from more than 7,000 covered entities. In 2024, Second Sight introduced a new technology platform, Beacon Rebate Model, that enables 340B covered entities to access 340B pricing through the submission of eligible purchase and claims data.3 In 2025, HRSA announced a Rebate Model Pilot Program (Rebate Model Pilot) available to nine manufacturers of selected drugs subject to the Maximum Fair Price (MFP) within the Medicare Drug Price Negotiation Program (MDPNP) for Initial Price Applicability Year (IPAY) 2026. In their HRSA-approved Rebate Model Pilot applications in October and November 2025, all nine manufacturers indicated that they would use the Beacon Rebate Model 1 Health Resources and Services Administration Request for Information: 340B Rebate Model Pilot Program, February 2025, available at: https://public-inspection.federalregister.gov/2026-03042.pdf. 2 https://340besp.com/about. 3 https://cm.beaconchannelmanagement.com/. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 platform to process 340B rebate requests as part of the pilot program. To date, 10,000 covered entities have registered on the platform, our organization has conducted 21 educational sessions for stakeholders which were attended by over 3,000 individuals, and 53 TPAs have successfully integrated with Beacon Rebate Model. In 2026, Second Sight launched another technology platform, Beacon MFP, that facilitates the processing of MFP rebates on behalf of manufacturers and grants dispensing pharmacies real time visibility into MFP rebate status and access to good faith resolution tools.4 Second Sight has partnered with CMS, drug manufacturers, and 62,000 dispensing pharmacies to successfully ingest and process more than 19 million rebates through the Beacon MFP platform since January 1, 2026. Additionally, Beacon MFP provides a good faith resolution center that facilitates resolution of MFP-related issues that arise between manufacturers and dispensing pharmacies; approximately 90% of these MFP issues also pertain to 340B. HRSA is soliciting comments on whether the agency should implement a Rebate Model Pilot Program and how best to operate any such rebate framework. Second Sight is uniquely positioned to provide responsive data and insights, given our experience collecting 340B claims data from covered entities, facilitating de-duplication between 340B discounts and MFP rebates, and training the covered entity community in the use of the Beacon Rebate Model platform. We respond to HRSAs request for information on the following targeted topics. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Covered entities participating in a Rebate Model Pilot will need to undertake certain one-time tasks to register with a manufacturer-supported platform such as Beacon Rebate Model. These tasks include providing information/documentation establishing that an individual is authorized to register a particular covered entity, as well as banking details for purposes of rebate payment. The timing for these tasks will vary by covered entity and may depend on the availability of relevant documentation. As mentioned above, over 10,000 340B covered entities have already registered with the Beacon Rebate Model platform and completed the one-time registration tasks. Based on our work on behalf of manufacturers, we believe that the covered entities already registered with Beacon Rebate Model account for the majority of 340B purchases of drugs subject to the MFP in IPAY 2026. In addition to these one-time registration tasks, covered entities participating in a Rebate Model Pilot will need to regularly submit certain 340B utilization data. The required data fields and utilization data that entities would submit to Beacon Rebate Model are exactly the same as those submitted to 340B ESP. Thus, for the 7,000 covered entities that have already submitted data to 340B ESP, the incremental work necessary to submit data to Beacon Rebate Model is very limited. 4 https://mfp.beaconchannelmanagement.com/. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 For covered entities that have not previously utilized the 340B ESP platform, the process for submitting data is designed to be straightforward and user-friendly, even for new users. Based on our experience operating the platform, the upload, mapping, and validation steps typically require about 15 minutes per submission, excluding internal data preparation, with actual timing varying by covered entity. This metric is based on actual usage patterns tracked in the 340B ESP platform during 2025. Second Sight is also actively engaging with TPAs and other 340B vendors to support direct data submissions that significantly reduce or eliminate any potential burden of data compilation on the part of the 340B covered entity. As of spring 2026, 53 TPAs and vendors are fully provisioned and able to submit data directly to the Beacon Rebate Model. We would add that HRSA requires covered entities to maintain accurate records to ensure compliance, including a list of all 340B drugs that were furnished, administered, or dispensed to patients, for purposes of audits conducted by HRSA.5 Given this, we expect covered entities that already maintain HRSA-required documentation to experience only a modest incremental effort in preparing files for submission to Beacon. Indeed, covered entity advocacy groups have voiced prior support for a duplicate discount solution in which covered entities would regularly report 340B claims data, indicating that this is within the operational capabilities of covered entities.6 Lastly, Second Sight remains receptive to covered entity feedback regarding the functionality of its platform, with the goal of minimizing the administrative costs of a Rebate Model Pilot. In late 2025, Second Sight convened a group of covered entity representatives for regular insight forums to discuss technical aspects of the Beacon Rebate Model platform. Second Sight continues to regularly meet with TPAs and consultant groups to educate them on the Beacon platforms, solicit feedback, and identify improvements. Payment Timing and Potential Cash Flow Impacts for Covered Entities 5 https://www.hrsa.gov/opa/program-integrity; Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities, September 2025, available at: https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request- for-covered-entities.pdf. 6 American Hospital Association Comments to Medicare Drug Price Negotiation Program Draft Guidance, July 2024, available at: https://www.aha.org/lettercomment/2024-07-02-aha-submits- comments-cms-guidance-medicare-drug-price-negotiation-program (Proposed Approach Ensuring Prospective Access to MFP and 340B Pricing... For a selected drug purchased at the 340B price, the 340B covered entity or its TPA would submit to the MTF a batch datafile that contains only necessary data elements for each 340B-eligible drug claim.); 340B Health Comments on Proposed Medicare Transaction Facilitator for 2026 and 2027 under Sections 11001 and 11002 of the Inflation Reduction Act Information Collection Request (OMB Control Number: 0938-New), December 27, 2024, available at: https://www.regulations.gov/comment/CMS-2024-0323-0015 (we continue to urge CMS to permit covered entities (CEs) to choose to retrospectively submit 340B claims data to CMS Medicare Transaction Facilitator (MTF)). S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 Covered entities participating in a Rebate Model Pilot will purchase applicable products at the Wholesale Acquisition Cost (WAC) through their existing wholesaler relationships and subsequently request a rebate to bring the net acquisition cost to the 340B ceiling price. In practice, the timing of these transactions occurs within the context of standard pharmaceutical supply chain payment terms. Wholesalers commonly provide covered entities with payment windows or credit arrangements for product purchases, which allow entities to receive and dispense medications prior to remitting payment for the corresponding wholesaler invoice.7 These existing payment terms mitigate potential short-term cash flow pressures that could otherwise arise from purchasing products at WAC prior to receiving a rebate adjustment. Additionally, under the prior Rebate Model Pilot, covered entities were permitted to maintain replenishment models. Under this construct, drugs are dispensed from neutral inventory then subsequently replenished at WAC before the rebate request is submitted. This further streamlines the process for covered entities, minimizing the time between date of purchase and date of rebate payment. The expected rebate payment timeline under a rebate model pilot is relatively prompt compared to other financial reconciliation processes that impact 340B pharmacies. Under HRSAs August 2025 Rebate Model Pilot notice, manufacturers were obligated to process and pay 340B rebate claims within ten calendar days following submission of eligible data.8 By comparison, when a pharmacy is eligible to receive an MFP rebate under the MDPNP, that rebate is, on average, paid to the pharmacy twenty-one calendar days after the date of dispense.9 Based on data received through the Beacon MFP platform, 45% of pharmacies dispensing MFP drugs also participate in the 340B program as in-house or contract pharmacies of covered entities, meaning that many 340B pharmacies are already experiencing longer payment delays relative to those they would experience under a Rebate Model Pilot. Some covered entities have argued that they must first dispense an entire package of a drug in order to submit a request for a 340B rebate, creating a delay in rebate payment. This is inconsistent with the operational design of a Rebate Model Pilot as described in HRSAs August 2025 notice, which a) allowed covered entities to dispense from neutral inventory and replenish at WAC and b) permitted rebates to be paid on a claim-by-claim rather than package-by- package basis. Any requirement to dispense a full package prior to submitting a rebate request is a function of the covered entity vendors technology used to operationalize 340B replenishment models, rather than a function of the Rebate Model Pilot itself. Furthermore, analysis of 2024 Medicare Part D Prescription Drug Event (PDE) data limited to IPAY 2026 and 7 Section 33.4: Inventory Financing, Rebates, and Chargebacks, available at: https://pharmacystandards.org/casp/section-33-4-inventory-financing-rebates-and-chargebacks/. 8 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 2025, available at: https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program- notice-application-process-for-the-340b-rebate-model-pilot-program. 9 Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, April 2026, available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the- Maximum-Fair-Price-in-2026-and-Outlook-to-2027.pdf. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 2027 drugs demonstrates that 89% of claims reflect the dispense of an entire package or multiple entire packages of the corresponding NDC. Rebate Denials Clear guardrails that define the scenarios in which a manufacturer may deny a rebate can most readily be integrated into a technology platform like Beacon Rebate Model. Clarity and consistency around permissible denial scenarios will support more predictable outcomes for covered entities, facilitate more efficient manufacturer review processes, and minimize the need for appeals. Data Collection by Covered Entities Covered entities participating in a Rebate Model Pilot will need to submit a defined set of data elements that collectively facilitate validation of the rebate request and de-duplication with CMS payment programs (MDPNP, MDRP). These elements differ for pharmacy and medical claims. The data elements collected by the Beacon Rebate Model, as currently designed, are publicly available on the Beacon Rebate Model website.10 These elements align with data already maintained by covered entities as part of standard claims processing workflows and for purposes of 340B program compliance and audit readiness. One of HRSAs potential goals in implementing a Rebate Model Pilot is to resolve duplication between 340B and the MDPNP. For 2026 and 2027, the MDPNP applies only to Medicare Part D. Some advocates have stated that a Rebate Model Pilot can be limited in scope to only drugs dispensed to Medicare Part D beneficiaries, or only to drugs used in retail pharmacy settings, while still allowing for this goal to be met. This assertion belies other potential goals of a Rebate Model Pilot, such as de-duplication with the MDRP, as well as significant operational and compliance concerns presented by a Rebate Model Pilot that is limited in this manner. If a Rebate Model Pilot were limited to one payer and/or one setting, the same covered entity would access the 340B price for the same drug through two different mechanisms: an up-front discount and a retrospective rebate. This bifurcated procurement process creates the risk that units purchased using an up-front 340B discount will be dispensed to patients who are within the scope of the Rebate Model Pilot. Whether intentionally or unintentionally, a covered entity could, as a result, submit a duplicative request for a 340B rebate when the underlying drug was already purchased at the 340B price. Manufacturers, receiving no claim-level data for the units purchased at the 340B price, would have no mechanism to identify these occurrences and prevent duplicate rebate payments. This would create yet a new type of 340B duplication: 340B chargeback 340B rebate duplication. In addition to claim-level data, the submission of standardized purchase data elements is important to operate a Rebate Model Pilot and prevent duplicate discounts. Specifically, 10 https://support.beaconchannelmanagement.com/en/articles/9589827-rebate-model-frequently-asked- questions. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 purchase data elements enable manufacturers to validate that the drug for which a rebate is requested was purchased by the covered entity and to verify the purchase price. The submission of purchase data would also enable the calculation of different basis prices for 340B rebates, which could provide additional flexibility for 340B covered entities that retain access to discounted commercial prices such as a GPO price. While manufacturers receive sales data from their wholesaler partners, that data does not include the dispense level data elements needed to connect it to rebate requests, as claims level data is not available to the wholesaler. With respect to data privacy and security guardrails, the Beacon Rebate Model platform does not collect protected health information (PHI) and has received an Expert Determination confirming that the data it maintains qualifies as a de-identified dataset under HIPAA. While limited personally identifiable information (PII) is collected as part of the registration process, appropriate administrative, technical, and physical safeguards are in place to ensure compliance with applicable federal and state requirements. Additional detail regarding these safeguards is publicly available through the Beacon Rebate Model Trust Center. The platforms Terms of Use and Privacy Policy are applied uniformly across participants to support consistent program administration at a national scale, while also allowing for targeted modifications where necessary to address specific legal requirements identified by 340B covered entities, including state and governmental stakeholders. Manufacturer Efforts to Avoid Duplication In response to HRSAs request for input regarding potential challenges associated with duplicate discount prevention, one practical consideration relates to the availability and accuracy of claim-level data needed to reconcile against data from Medicare and Medicaid programs. Today, there are a limited number of scenarios in which manufacturers receive 340B claims data. In general, attempts by manufacturers to solicit claims data from covered entities on a voluntary basis have not been fruitful. In the context of the MDPNP, fewer than 0.5 percent of claims processed by the Beacon MFP platform have been self-identified by the pharmacy as 340B, equating to less than five percent of anticipated 340B volume.11 While some manufacturers have established claims data submission as a requirement for 340B purchases, such requirements have most commonly been limited to the contract pharmacy channel. Absent a comprehensive and accurate source of 340B claims data, manufacturers are left with analytical approaches that predict the 340B status of a Medicare or Medicaid claim. Such predictive approaches have been applied by some manufacturers to claims subject to the MFP since January 1, 2026, paired with a good faith resolution process to resolve claims with which there is disagreement. Some advocates have voiced complaints that these predictive approaches do not rely on confirmed claim-level 340B status, an impossible standard to meet without 11 Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, April 2026, available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the- Maximum-Fair-Price-in-2026-and-Outlook-to-2027.pdf. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 comprehensive claims data.12 Despite these complaints, analytics recently published by a covered entity vendor reveal that the volume of MFP claims for which a duplicative rebate is paid (30% of all MFP claims), is significantly higher than the volume of MFP claims for which an MFP rebate was incorrectly withheld (10% of MFP claims).13 These statistics, viewed against the backdrop of pharmacy complaints, suggest that predictive approaches to 340B claims identification are an inferior substitute for a Rebate Model Pilot for multiple stakeholder groups. Some manufacturers have announced a requirement for the submission of all 340B claims for their products. While such requirements are likely to increase the volume of 340B claims data that manufacturers can use to reconcile against Medicare and Medicaid claims, this type of data collection presents complexities for both manufacturers and covered entities that are streamlined under a Rebate Model Pilot. As an example, if multiple covered entities submit the same 340B claim to a manufacturer after both have already replenished it, the manufacturer can identify the noncompliance but has no clear mechanism for resolution given the cumbersome nature of the administrative dispute resolution (ADR) process and limited visibility into 340B reversals. Any clearinghouse solution is likely to be impacted by these same structural complexities. Other challenges with data collection include the open-ended timeline for 340B reversals, manufacturers limited window to dispute duplicate discounts, inconsistent updates to claims submissions by covered entities, frequent discrepancies in data elements, fragmented data collection and submission across entities and vendors, and the retrospective replenishment model, which disconnects the timing and source of purchases and dispensing. By linking effectuation of the 340B price one-to-one with the provision of claims and purchase data, a 340B Rebate Model Pilot would ensure the transparency necessary for addressing numerous challenges with 340B program administration. Required Reporting To support effective oversight of a potential 340B Rebate Model Pilot Program, HRSA should require manufacturers to submit standardized reporting on a monthly basis, consistent with the agencys February 26 Information Collection Request indicating that such data would be used to evaluate program integrity and improve transparency.14 12 Ref: Improving Implementation of Federal Programs to Reduce Drug Costs: Feedback on Progress in Effectuating the Maximum Fair Price and Protecting 340B Discounts, March 2026, available at: https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter-to-CMS.pdf. 13 40% of Claims Miss the Mark, March 2026, available at: https://340breport.com/40-of-claims-miss-the- mark-sponcon-rxparadigm/. 14 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906-NEW, February 2026, available at: https://www.federalregister.gov/documents/2026/02/26/2026-03833/agency-information-collection- activities-proposed-collection-public-comment-request-information. S E C O N D S I G H T S O L U T I O N S Second Sight Solutions, LLC 1800 M Street NW, Second Floor, Washington, DC 20036 With respect to the content of reporting, HRSA could align requirements with data elements established under the prior Rebate Model Pilot design by requiring manufacturers to submit minimally necessary claims level data fields and a set of standardized data aggregations. The transaction-level extract would enable HRSA to assess individual rebate determinations. In parallel, aggregated reporting would provide a program-level view of performance and compliance trends, including metrics such as aggregated sales by covered entity type, average time from claim submission to rebate payment, the number of rebates paid beyond established timeframes, and the volume and reasons for denied rebates. Together, these reporting elements would allow HRSA to monitor the operational performance of a Rebate Model Pilot Program while providing the agency with greater oversight into program use and patterns. Comprehensive reporting of 340B claims has the potential to streamline HRSAs workflows related to covered entity audits, ADR matters, engagement with other federal agencies, and general program monitoring. HRSA could further enhance transparency by publicly reporting selected aggregated metrics derived from manufacturer submissions on a periodic basis, such as quarterly or annual publication. To mitigate the risk of disclosing competitively sensitive information, any public reporting should be aggregated across manufacturers and structured to avoid the identification of individual manufacturer- specific sales or pricing data. Maintaining consistent reporting requirements for the full duration of the Rebate Model Pilot will enable HRSA to assess program performance over time. This approach would balance the goals of transparency and accountability with the need to protect sensitive commercial information, while providing stakeholders with meaningful insight into the operation and outcomes of the pilot program. Please feel free to contact Ellie Blalock at eblalock@thinkbrg.com if there is any further information we can provide or if you have any questions about our comments. Sincerely, /s/ Ellie Blalock Vice President, Strategy & Policy Second Sight Solutions, LLC Request for Information: 340B Rebate Model Pilot Program
HRSA-2026-0001-2150Black River Health Services, Inc2026-04-20T04:00Z2,933 chars
To Whom It May Concern: I am writing to express my strong opposition to the implementation of any 340B rebate model. As a provider dedicated to serving underserved populations and managing pharmacy operations, I believe shifting from an upfront statutory discount to a post-purchase reimbursement process will fundamentally undermine the integrity of the 340B program. Our organization serves a vital dual role as both a Federally Qualified Health Center (FQHC) Look-Alike and a provider of essential pharmacy services. We are a primary provider of healthcare services to a rural, farmworker community that would otherwise face insurmountable obstacles to obtaining affordable care and prescription medications. The 340B program is intended to increase patient access to affordable medications while enabling providers to "stretch scarce federal resources" to keep our doors open. The proposed 340B rebate model creates unnecessary administrative burdens for health centers already operating on razor-thin margins. Furthermore, it forces covered entities to function as interest-free lenders to pharmaceutical manufacturers. By requiring us to pay the full Wholesale Acquisition Cost (WAC) upfront, the program would create an immediate and unsustainable strain on our working capital. For safety-net organizations, this rebate model creates a severe cash-flow constraint that directly threatens our operational viability. Specifically, the implementation of a 340B rebate model poses a direct threat to the health and productivity of our nation's agricultural workforce. For providers serving farmers and farm workers, this is not merely an administrative hurdle; it is a barrier to care that will predictably lead to the following outcomes: Destabilization of Specialized Care: Farmworkers often require immediate access to medications for acute injuries, pesticide exposure, and chronic conditions managed in mobile or rural clinics. By forcing providers to "front" the full cost of these medications, the rebate model creates a liquidity crisis that will force us to scale back these specialized outreach services. Reduced Access in Rural Deserts: In many agricultural regions, our pharmacy services are the only accessible point of care. Requiring us to finance drug costs upfront effectively diverts funds away from the very clinical services that keep our agricultural workforce healthy and operational. The traditional upfront discount model is the only mechanism that allows the 340B program to meet its statutory goal. Rather than imposing a model that weakens the safety net, HRSA should focus on targeted oversight and standardized data reporting that does not jeopardize the financial stability of covered entities. I urge HRSA to abandon the 340B rebate model and maintain the current discount structure. There are no positive outcomes for patients under a rebate modelonly reduced access to care. Thank you.
HRSA-2026-0001-2151Prairie Health Ventures2026-04-20T04:00Z21,836 chars
See attached file for Prairie Health Ventures comments to the 340B rebate model RFI 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Prairie Health Ventures (PHV) and our member hospitals, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. We are requesting HRSA re-evaluate the implementation of a 340B rebate model and consider cancelling such a change indefinitely. Updating the 340B Drug Discount Program from an upfront discount to a post- purchase rebate would impose enormous financial costs, logistical and operational burdens on our 46 rural member hospitals 340B programs. This change could make the 340B program cost-prohibitive for many of our small hospitals. By HRSAs own calculations, the costs of updating to a rebate model are extraordinary for covered entities and the communities they serve. The current 340B discount mechanism of offering an upfront discount has worked as intended for well over a decade which has delivered on the programs original intention of stretching scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Updating the 340B program to a rebate model will hurt our rural hospitals ability to serve more patients and will be forced to reallocate resources that are currently going towards providing more comprehensive services to instead manage a rebate model platform. All manufacturer concerns of program integrity and the de-duplication of Medicare rebates can be alleviated through other much less burdensome mechanisms as described below in our comments. On behalf of our member hospitals who own and direct PHV, PHV has done its best to provide detailed answers in the limited time available to us. All our member hospitals are rural, critical access, and independently owned and operated, so we hope our responses illustrate a wide range of different challenges and complexities each hospital faces independently. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With 2 the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that our hospitals will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that our member hospitals can spend on patient care and comprehensive health care services. Any rebate program would require our hospitals to spend significant sums on new administrative costs. When our hospitals chose to participate in the 340B program, they understood that they would incur some reasonable administrative costs. They designed their hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In fact, our hospitals have already expended more resources and time than initially anticipated due to the numerous arbitrary manufacturer restriction policies that are being updated monthly. Coupling these manufacturer restriction policies with a rebate program that manufacturers can dictate will cause incalculable amount of administrative burden and operational costs that our hospitals cannot support. Many of our rural hospitals do not have a dedicated 340B full-time employee and depend on vendors and consultants like PHV to assist them in complying with Federal, State and Manufacturer policies. Please see our concerns about the 340B Rebate Model Program below: Data Submissions: Since PHVs member hospitals operate independently, they utilize a wide range of third-party administrators [TPA] (340B testing software). Some of these TPAs have not indicated an extra cost, however others are charging up to $10,000+ annually for assistance with rebate model data transmission. This extra cost would nullify any 340B savings earned through their contract pharmacy relationships given the current manufacturer restriction policies. We are also concerned that the other TPAs that are currently transmitting data for free will charge in the future due to the increased complexities and time schedule of these rollouts. If a hospital is forced to submit manually due to financial concerns, the 340B program would become untenable. For example, a hospital would routinely need to manually download and upload 340B claims, track their submissions to remove any 3 duplicated scripts/administrations from past submissions, submit any reversals that occur and validate the data file meets each manufacturers rebate model policy specifications which could vary from manufacturer to manufacturer. Regardless if hospitals submit through a TPA or does the process manually, the act of verifying the data uploaded to the rebate model vendor(s) would be an added step to the hospitals auditing procedure. HRSA already mandates that hospitals routinely audit 340B claims data for accuracy and compliance with Federal and State laws and guidance. Rebate Payment Validation: Outside of just the data submission process alone, hospitals will be expected to validate and reconcile the rebates reports to ensure they are due the money they are owed. Under the current process, hospitals validate payments from their contract/retail pharmacies and payments to wholesalers. By implementing a rebate model, our hospitals will need to take additional steps to reconcile claim status and rebate payments within the selected manufacturer rebate vendor(s). Our hospitals have already started to experience these challenges with reconciling their Medicare Maximum Fair Price (MFP) Rebates. Our hospitals need to use at least five software systems to validate MFP rebate status and payments (TPA, Beacon, MTF, Bank Accounts, Pharmacy Software, etc.). MFP rebate payments are delivered to the hospital in batch payments making it hard for entities to tie payments to individual claim statuses and purchased inventory. If the 340B rebate model operates similar to the current MFP rebate process, our hospitals will need to hire extra help in their finance team to adequately reconcile and track rebate payments. Rebate Claim Validation: Our hospitals will also need to hire or contract additional help to validate claim statuses in the selected rebate model vendor(s). Currently, the life cycle of 340B scripts and purchases can be described generally below: 1. Script dispensed at Contract/Retail Pharmacy 2. Script tested for 340B eligibility in TPA based on eligibility criteria and parameters set by a hospital and 340B accumulation is granted. Hospital routinely self-audits claims to ensure 340B eligibility and validates rules and filters are up to date 3. 340B Accumulation purchased by entity at upfront 340B discount and sent to Contract/Retail Pharmacy 4. Retail pharmacy is invoiced for the financials of the eligible 340B script 4 Adding the 340B Rebate model to this process would change the life cycle of a 340B claim to (assuming a WAC purchase must precede a 340B dispense): 1. Hospital forecasts 340B usage in given week/month and purchases inventory at WAC price a. Pharmacy will receive this extra inventory and may not be able to accommodate the excess inventory 2. Script dispensed at Contract/Retail Pharmacy 3. Script tested for 340B eligibility in TPA based on eligibility criteria and parameters set by a hospital and 340B accumulation is granted. Hospital routinely self-audits claims to ensure 340B eligibility and validates rules and filters are up to date 4. 340B claim data sent to manufacturer rebate vendor for validation 5. Manufacturers apply their own policy to decide if claim is 340B 6. Rebate model vendor pays hospital within 30-45 days of script being transmitted to them in a batch payment that could include other 340B rebate payments 7. Hospital must validate and reconcile rebate by: a. Tying data from TPA to rebate model vendor (since data is de-identified within rebate model vendor) b. Confirm data submission did not contain errors c. Confirm claim conforms to a manufacturers arbitrary 340B restriction policy of which varies from manufacturer to manufacturer and State to State d. Confirm claim is due a rebate through rebate model vendor e. Tie payment from rebate model vendor back to individual script f. Confirm payment amount is correct per individual script 8. Pharmacy is then invoiced for financials of 340B script If there is a breakdown in any of the steps described above, it could cause either a lengthy delay or a hospital to miss out on critical 340B savings entirely. An issue in one part of the chain can also snowball and cause further issues between the rebate model vendor(s), wholesalers, retail pharmacy, TPA, etc. The process described above also limits the hospitals ability to capture 340B claims retroactively if found to be later eligible based on a patients medical records. Multiple Rebate Vendors: 5 We are also unsure if manufacturers will opt to using only 1 vendor to collect 340B data or if there will be multiple. If manufacturers take the same approach to the rebate model as they have with their own independent 340B restriction policies, we could assume there will be multiple rebate model vendors manufacturer utilize. Each of these vendors would have their security, policies, data pathways, etc. that would need to be reviewed and validated for entities to retain their 340B discounts. This would greatly increase the burden of the 340B program. Additional Drug Float: Under the 340B Rebate Model, Hospitals will incur extra drug expense float that they are not experiencing under the current 340B process. Assuming rebates are paid out exactly how upfront discounts are realized today, we are estimating an average critical access hospital from our membership needing to float an additional $670,000 of drug expense annually for their contract/retail pharmacies for just the MFP drugs selected for 2026 and 2027 (based on current WAC cost). This is an 85% increase over their current total 340B spend at their contract/retail pharmacies. Data Request from Manufacturers & Rebate Model Vendors: Our hospitals have concerns about the data the manufacturers require for rebate models. When our hospitals were prepping for a rebate model prior to 2026, many of their electronic medical record (EMR) vendors did not have the ability to add some of the required fields. Some of our hospitals paid for additional IT resources to update their files to meet data specifications. Some EMRs also charged an additional fee to assist hospitals in updating their data feeds. We also have concerns about the specific data fields required by manufacturers such as: Health Plan ID: We heard from many of our hospitals that the Health Plan ID field is not widely used or available in many of the EMRs. Facility NPI: We heard from many of our hospitals EMRs that the Facility NPI field is not accessible in the reports. This field is not needed for 340B compliance testing as hospitals use different fields to exclude ineligible locations (i.e. location name or patient type) Patient Diagnosis: In one of the earlier iterations of the rebate model, manufacturers were requiring patient diagnosis. This is completely unnecessary 6 for the payment of a 340B rebate. Requiring fields like these could allow manufacturers to determine 340B eligibility through arbitrary rules. Also, a patient may have multiple diagnosis codes for a given encounter where the rebate model vendor could not import all patient diagnosis codes. Our hospitals have great concerns about sharing this level of patient information with a vendor they are not contracted with nor can negotiate the terms of service/use for their data after submission. Many of our rural hospitals billing departments operate with a delay of up to 30+ days. Weve seen cases where, due to unforeseen circumstances, a hospital could be behind on billing by up to 90+ days. If claims data is required within 45 days of service, a hospital could miss out on vital 340B savings due to delays in their billing departments. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront 340B discount mechanism, any rebate mechanism will force our hospitals to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Also depending on if a WAC purchase is required prior to a 340B administration/dispense, an entity could carry that WAC purchase expense for months to years depending on how frequently that drug is used in a qualified outpatient setting. When reviewing accumulation data on IRA drugs specifically , we have observed some drugs taking 3+ years to accumulate a full 340B accumulation due to our hospitals operating in a rural setting. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Our hospitals reasonably relied on this history when designing its internal 7 operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon: Beacon was unable to provide additional details describing data requirements (i.e. Health Plan ID) Beacon was unable to provide details on how the 340B process would work and took multiple emails and calls with their leadership team to decide if a purchase had to be made before a 340B administration or if it could be made after a 340B administration. Beacon was unable to develop an adequate process for identifying claim duplications. o Beacon did not include Fill Number in their identification process thus if two fill were dispensed on the same date, Beacon would identify those two separate fills as duplicates. This process can happen when there are changes in scripts billing, patients go on an extended vacation, etc. Beacons Terms of Use/Service are non-negotiable. Our hospitals had concerns with many of the terms detailed in their TOU especially surrounding Beacon/manufacturers use of the hospitals data for other purposes. Beacon was unclear on how an entity can tie the data in Beacon back to the submitted data from the hospitals TPA. Beacon indicated that the only way to track submitted data was to keep the upload key per each individual upload. This would be incredibly cumbersome and nearly impossible to reconcile. Beacon was unclear on how an entity was to track and reconcile a rebate payment to a submitted claim. o If the rebate reconciliation process is similar to the current MFP rebate reconciliation process disseminated through Beacon MFP, our hospitals are very concerned this reconciliation process will cause further hardships. The 8 current MFP rebate reconciliation process is very difficult as currently there is no way to tie the rebate payment information back to the data in Beacon as the rebate payment comes over in a batch of multiple prescriptions. Beacon was unclear on how the arbitrary manufacturer restriction policies and the use of other manufacturer restriction policy platforms may impact rebate payments. o The manufacturers still expected data to be uploaded to their other platform 340B ESP while also uploading similar data to Beacon. It is unclear on how a hospital can reconcile the data between those two platforms. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we are supportive of a less burdensome alternative to de-duplicate MFP rebates and 340B discounts in the form of a government controlled and administered 340B data aggregator. We would request that this data aggregator be an extension of the current Medicare Transaction Facilitator (MTF) that would collect only the necessary information needed to de-duplicate an MFP rebate and a 340B qualified prescription/administration. We would request this data to only be limited to: 1. RX Number 2. Dispense Date 3. Written Date 4. Fill Number 5. Facility NPI 6. Dispense Quantity We would also request this platform have the functionality to connect with our hospitals 340B TPAs so data could be easily transferred between the parties and reporting be made available for hospitals to validate claim submissions to the data aggregation platform. We are supportive of a government controlled and administered clearing house for the following reasons: 1. Our hospitals feel more comfortable submitting sensitive information to governmental authorities rather than a for-profit industry who has their own terms of service and can update those terms at any time. 2. Eliminates the concerns of having multiple data aggregation platforms. Its our understanding that there are currently two platforms looking to administer 340B 9 rebates, Beacon and Kalderos. We are concerned that multiple platforms would increase the burden of 340B program requirements on our hospitals. 3. Eliminates manufacturer concerns of an MFP rebate and a 340B discount 4. Allows hospitals to continue their current processes and keep their 340B program structure with minimal burden 5. No extra costs to the manufacturers as they currently operate within the MTF 6. Eliminates concerns of our hospitals that additional arbitrary restrictions would be imposed by manufacturers At a minimum, HRSA must provide a reasonable explanation for why the third- party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Prairie Health Ventures and our member hospitals respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow our hospitals and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Andrew Cross 340B Manager Prairie Health Ventures 575 Fallbrook Blvd. #204 Lincoln, NE 68521
HRSA-2026-0001-2152Frontera Healthcare Network2026-04-20T04:00Z17,150 chars
See attached file(s) April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Frontera Healthcare Network, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. At Frontera Healthcare Network our mission Is to is to provide quality, accessible, and affordable primary health care to the residents of our rural service area. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Frontera Healthcare in particular, this means it will impact: Our 28,000 340B transactions and 6000 patients. Our current admin costs to manage our 340B program are slightly over $70,000 which we anticipate increasing with a rebate model. The use of our 340B revenue to help our community with the sliding fee scale to help those who are underinsured or uninsured. The money we save from 340B pricing is used to directly benefit our patients and their access to quality healthcare and medications. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. 340B Rebate Model Operational & Administrative Costs 2 A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: [Frontera Healthcare Network] provided $10,769 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Frontera Healthcare Network anticipates needing 1 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Frontera Healthcare Network anticipates an increase of $60,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.1 Frontera healthcare Network estimates needing to hire 1 additional FTE to match the demand of rebate claims reporting. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.2 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Frontera Healthcare Network estimates the cost of hiring an additional FTE along with raising current staffing requirements would be around $55,000 while also increasing annual costs by another $20,000 through missed rebate payments and increased overhead spending. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Frontera Healthcare Network estimates that a weekly average of 15-20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Frontera Healthcare Network urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes 1 Internal NACHC assessment (99 responses). 2 Ibid. 3 Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Our organization estimates that [$5000 - $10,000] will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 85,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools to be around $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 12 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 4 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Kimble, Menard, McCulloch, Mason, and Gillespie counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,3 and the closings of 3 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 4 pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.4 A. Financial Challenges The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.5 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.6 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Frontera Healthcare Network we use the discounted drug rate to slide medication costs for our patients who are otherwise unable to afford it. This is done as a $1, $3, $5, and $10 scale while the maximum an underinsured or uninsured patient will pay is the 340B cost plus $10. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. Based on our organizations data, we estimate it would cost $271,216.22 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends 13,241.52 to purchase these same drugs at the 340B ceiling price. This represents a 200% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Frontera Healthcare Network anticipates needing to reduce: 4 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 5 HRSA FAQ 6 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 5 Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund behavioral health, psychiatry, pediatric and medical clinic divisions. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 120 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution as it would limit our funds that are currently dedicated to sustaining our behavioral health, psychiatry, pediatric, and family medical programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Frontera Healthcare Network, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Frontera Healthcare Network urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.7 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $ 13,560.811. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 7 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 6 Conclusion Frontera Healthcare Network strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Frontera Healthcare Network believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Frontera Healthcare Network appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Chloe Jackowski/ cjackowski@fronterahn.org. Sincerely, Mikki Hand, CEO Frontera Healthcare Network
HRSA-2026-0001-2153Vocational Instruction Project Community Services, Inc.2026-04-20T04:00Z51,836 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC, anticipates a loss of $430,000 from entity-owned pharmacy operations and 25% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. In 2023, New York States Department of Health (DOH) implemented a major change to Medicaids prescription drug benefit that ended 340B savings for most Medicaid drugs. This shift occurred on April 1, 2023, when the state transitioned from a managed care model to a fee-for-service Medicaid pharmacy model. Under the old model, CHCs could purchase certain drugs at 340B discounts and pass the savings to patients; under the new model, those discounts no longer applied to Medicaid patients, significantly reducing CHCs ability to stretch federal drug funding. While some 340B savings remain for commercial insurance, Medicare, and clinic-dispensed Medicaid drugs, the loss of Medicaid drug discounts still eroded overall program savings Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., focuses primarily on racial and ethnic minorities populations in its service areas who are most impacted by the substance use epidemic (SUD diagnosed, collaterals of persons diagnosed, people at risk), using appropriate evidence-based practices (EBP) including Motivational Interviewing (MI), Trauma Informed Care (TIC), Relapse Prevention (RP), Recovery Coaching (RC) and Patient- Centered Care. Most of the Bronx and the areas served by VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., have been classified as medically underserved. Our core values drive every aspect of the work that we do. We are: Mission Driven: Improving our patients and clients health and well-being (meaning non- medical factors that affect health) is why VIP was created and why we are here. Everything we do should be toward achieving our mission. Person-Centered: The person (patient, client, family, VIP team) is at the center of our decisions and will drive how we do things in as holistic a way as possible. Compassionate: When we are compassionate, we listen, we ask questions, we try to understand where the person is at, we are culturally sensitive, we are understanding. It will help us achieve our mission. Respectful: We dont have to agree with or even like the other person, whether they are a client, a patient or another staff member, but we will always act professionally. It is a way of showing care, concern or consideration. Data & Quality Informed: Having data about what we do and how well we are doing it is the only way for us to know if we are in fact achieving our mission. And there is always room for us to do it better, so we will always strive to achieve better quality in everything we do. Our person-centered philosophy tailors services to the individual needs of each client through a wholistic approach to care, meeting clients where they are at. We work with individuals, families and the larger community, and often provide services in partnership with other organizations to ensure clients are provided with the best support for their needs. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients 3 who rely on us. For VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC in particular, this means it will impact the following: During the most recent fiscal year, our FQHC processed approximately 15,000 340B-eligible transactions. This volume reflects the high medication needs of our low-income patient population and the essential role of 340B in supporting access to care. Our Current Administrative Costs Related to 340B Operations and Compliance is approximately $40,000 The ability to: 1. Improve Patient Access to Medications- Offset the cost of medications for uninsured and underinsured patients, Reduce patient out-of-pocket costs, including copays and coinsurance, Support medication assistance programs and short-term medication support 2. Fund Clinical Services for High-Need Populations- Support care for patients with chronic, complex, or high-cost conditions, Sustain safety-net programs that are not fully reimbursed by payers 3.Expand and Sustain Programs That Would Otherwise Be Limited -Support extended clinic hours, specialty access, and community-based care models, Invest in telehealth and outreach services 4. Cover Unreimbursed and Under-Reimbursed Care-Stabilize the overall financial position of our safety-net services and ensure continued service delivery despite rising drug and operational costs 5. Invest in Quality, Compliance, and Infrastructure-Support 340B program oversight, compliance, and auditing, Improve pharmacy systems, data tracking, and reporting capabilities and train staff to ensure regulatory adherence and program integrity We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 4 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC provided a Sliding Fee Discount for patients based on federal guidelines. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 6 Staffing Impact: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC anticipates needing an additional 1 FTE as a result of the rebate model, and an additional .5 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC Anticipates the rebate model would require significant changes to our IT infrastructure, New interfaces between EHR, pharmacy system, 340B platform and finance Systems. Tracking portal for rebate submission. Audit-trail and compliance monitoring tools Financial system modifications to track rebate receivables Rebate submission portal or vendor module and 340B software upgrades Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. would definitely require 2 FTEs which are partially or fully supported through 340B savings. Without 340B revenue, these staffing resources would be difficult to sustain and would limit our ability to maintain a compliant, transparent, and effective program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. participation would require approximately 2 additional FTEs, with estimated staffing costs alone ranging from $75,000$150,000 annually, in addition to substantial upfront drug purchasing costs, increased operational expenses, and financial risk related to expired or unreimbursed medications. Given our limited margins, these costs are not financially feasible without jeopardizing patient services. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. will require ongoing monitoring and reconciliation of rebate claims for the selected drugs would require an estimated 10 additional staff hours per week, increasing administrative workload related to program operations and compliance. This added burden would challenge existing staffing capacity without corresponding operational support and required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated one-time cost of $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 3,600 patients, the projected total increase in expenses, including labor, IT, and carrying costs, is estimated at $325,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Bronx, New York with no 8 affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. utilizes federally compliant sliding fee discount programs to ensure nominal or reduced charges for eligible patients and rely on mechanisms such as the 340B Drug Pricing Program to acquire medications at discounted rates and extend those savings to patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Under the proposed 340B rebate model, based on our organizations data and expected utilization of high-cost therapiesincluding Eliquis (apixaban), Enbrel (etanercept), Farxiga (dapagliflozin), Imbruvica (ibrutinib), Januvia (sitagliptin), Jardiance (empagliflozin), NovoLog (insulin aspart) and related products, Stelara (ustekinumab), Xarelto (rivaroxaban), and Entresto (sacubitril/valsartan)we estimate total annual drug acquisition spending of approximately over $5 million for a population of 3,000 patients when purchasing at non-340B prices under a rebate- based model. This represents a substantial increase in upfront costs, requiring an estimated $5 million to $8 million in additional annual spending to maintain current levels of patient access to discounted medications while awaiting rebate reimbursement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as providing immunization to school districts, our medication therapy management as well as medication for our complex diabetic patients, care coordination, behavioral health services, preventive screenings, chronic disease management that are critical to ensuring access to continuity of care. Operating Hours: We anticipate needing to scale back and reducing our clinic hours by 30 % per week, limiting after hours coverage such as answering services that provide clinical triage, appointment scheduling, and patient support outside of regular business hours, prescription refill requests and urgent patient communications when the clinic is closed. This would have a significant impact on our evening and weekend hours, which are the only hours our patients can see us without losing their wages. Workforce & Staffing: The administrative burden imposed by this pilot program forces our organization to redirect limited resources away from direct patient care. Each additional Rebate coordinator we are forced to hire comes at the expense of diverting funds away from clinical staff, such as Community health worker or Behavioral Health Consultant. This tradeoff is not theoretical. It directly reduced care to our patients and leads to longer wait time for essential services especially behavioral health. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our underinsured patients from rationing their insulin or heart medication. 12 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $100,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1 million. This represents a significant and immediate cash flow burden, requiring the organization to front substantially higher drug acquisition costs while awaiting uncertain and potentially delayed rebate payments. This financial pressure is expected to grow as additional drugs are incorporated into the program in 2027 and 2028 under the Medicare Drug Price Negotiation Program, further compounding the gap between WAC purchasing and 340B pricing and increasing the organizations overall financial exposure. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take on a substantial line of credit or draw down our already limited financial reserves; resources that are typically constrained in a Federally Qualified Health Center (FQHC) setting. Efforts to secure extended payment terms from our pharmaceutical 13 wholesaler have been challenging, as long-term flexibility is not guaranteed. As a result, we would be required to absorb significant upfront costs without reliable short-term financing options, further straining our financial stability. This is not a sustainable solution; the interest costs alone are estimated to be extremely high annually funds that are currently dedicated to our primary care expansion efforts and chronic disease management programs, integrated behavioral health programs, our ability to hire additional nurse practitioners, behavioral health consultants, and care coordinators, preventive care programs, outreach services for underserved populations, Substance use disorder treatment (outpatient, MAT, harm reduction, HIV / infectious disease services, dental and workforce expansion efforts aimed at improving access to timely care. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a non- recoverable loss to be borne by the organization $80,000. This our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 15 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend 16 on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact : DEBBIAN FLETCHER BLAKE PRESIDENT AND CEO dblake@vipservices.org DRACIA BRYDEN-CURROE SENIOR VICE PRESIDENT AND CHIEF CLINICAL OFFICER dcurrie@vipservices.org Sincerely, ________________________________ Debbian Fletcher-Blake, APRN, FNP President and CEO Vocational Instruction Project Community Services, Inc.
HRSA-2026-0001-2154Nebraska Medicine2026-04-20T04:00Z27,103 chars
Please see attached Nebraska Medicine's comments on the 340B Rebate Model Pilot Program RFI (HHS Docket No. HRSA202603042). April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Attention: HHS Docket No. HRSA-2026-03042 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA 202603042) Dear Administrator Engels: Nebraska Medicine is a non-profit, academic medical center covering the Greater Omaha Metropolitan Area and extending across the region with nearly 1,200 doctors, 70 specialty and primary care health centers, and over 9,000 employees. Our two hospitals, Nebraska Medical Center and Bellevue Medical Center, have more than 800 licensed beds. As a 340B covered entity, we are pleased to provide the following comments on HRSAs RFI on a proposed 340B Rebate Model Program, which would effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices under the Inflation Reduction Act (IRA) in 2026, and 15 beginning in 2027. The 340B Drug Pricing Program is immensely valuable to Nebraska Medicine. It is an essential part of the delicate balance of benefits and expenses that allows Nebraska Medicine to provide charity care and critical wraparound services for the most vulnerable patient populations. 340B allows Nebraska Medicine to provide critical services to our patients, such as free prescriptions by mail and more expansive specialty and emergency care. It also allows us to expand services outside of our primary academic medical center, such as our new Kearney Cancer Center and Grand Island Health Center, ensuring cancer patients and residents of rural Nebraska have easy access to life saving medications and the highest quality care close to home. We strongly oppose the 340B Rebate Model and urge HRSA to continue implementing 340B as an upfront discount, as originally intended by statute. Rebates will significantly increase 340B participation costs and will redirect funds that should be used for patient care and ensuring access to affordable medications to manufacturers. Not only is this contrary to 340Bs intent, but HRSA has yet to provide a rationale explaining its decision to change over thirty years of precedent requiring 340B to operate as an upfront discount. To receive meaningful feedback on the costs of a 340B rebate model, HRSA must first outline the parameters of such a rebate model to allow constructive and impactful input to be provided. Manufacturers continue to propose rebate models under the claim that they are necessary to gather data, improve 340B program integrity, and make it easier to meet their compliance obligations under the Inflation Reduction Act (IRA). However, none of these justifications support the adoption of a rebate model, which is unnecessary to meet HRSAs stated goals and would set a dangerous precedent for future expansion of this model. HRSA already conducts audits of covered entities, which result in minimal findings, and manufacturers have not presented any data demonstrating systemic integrity issues that would call for consideration of such a drastic change to the 340B program. With regards to the IRA, manufacturers claim a rebate model, including hospital disclosure of data associated with 340B drugs, is needed to identify 340B drug claims. This could be addressed through a government-led data collection process that removes 340B claims from the IRA data submitted to manufacturers, thereby avoiding any risk of duplication between 340B and the Medicare refund without replacing upfront discounts with rebates or sharing patient claims data or proprietary information with manufacturers. Implications for 340B Hospitals: Why HRSA Should Not Implement a Rebate Model The rebate model would require 340B hospitals to purchase the selected medications at WAC or another higher commercial price, both of which are significantly higher than the 340B discount price, then wait to receive a rebate representing the difference between the higher price and the 340B price. This would force covered entities to float substantial funds to pharmaceutical manufacturers, tying up critical resources that would otherwise support patient care and essential operations. Over the course of one year, for the ten originally selected drugs, Nebraska Medicine would be required to front drug manufacturers approximately $22.5 million, based on current drug costs, which are funds that would be much better spent on patient care, providing access to critical medications, and providing continued community benefits to our most vulnerable patients. If the rebate model is allowed to move forward and applies to the 10 drugs subject to Medicare Part D negotiated prices under the Inflation Reduction Act (IRA) in 2026, plus the additional 15 drugs beginning in 2027, the total would be substantially more and would have a significant impact to our organizational cash flow and cash on hand, which impacts our loan rates, bond rating, access to capital, and would negatively impact patient care. As a disproportionate share hospital (DSH), a rebate model would impose an additional burden on us and other providers that disproportionately treat patients with complex conditions requiring novel therapeutics and orphan drugs. Under a rebate system, these high-cost therapies will amplify cash-flow risks and administrative complexity, further disadvantaging and negatively impacting Nebraska Medicine and providers caring for the most medically complex populations. After buying the drug at this higher price, it will go into our inventory until it is eventually dispensed to a 340B patient, which could take weeks or even months. At that point, we would be required to gather and submit data required by the manufacturer. The timing from purchase to dispensing to sending data will depend on the needs of our patients at any given time. The financial outlay when purchasing these drugs creates a need for us to submit the data as soon as possible, most of which we have not previously had to collect and submit to manufacturers. This will be extremely burdensome and require extra resources and staffing (at least 1 additional FTE, at an estimated cost of at least $88,000/year), further increasing the costs we would be already incurring. The delays are particularly concerning for physician-administered drugs covered under a medical benefit, which we maintain separately from other pharmacy claims due to different HRSA data and filing requirements. This will cause an additional burden for our team members and the complexity of medical claim changes, paired with the lack of clarity as to how this misalignment will be accounted for, is a major cause for concern. Prior experience submitting data under manufacturers contract pharmacy policies, which require hospital submission of data in connection with 340B claims, only increases our concern about delays, as access to 340B pricing has been inconsistent, even when all data and other requirements were met. Manufacturers have proven to not be fully transparent about additional requirements and limitations under their individual contract pharmacy policies, resulting in additional delays or lack of pricing altogether. These issues have been well-documented and submitted to HRSA and are why 21 states have now passed contract pharmacy protection laws to shield covered entities within their borders from such actions. Though Nebraska is fortunate to be one of the 21 states that have passed such protections, we are still concerned with the impact a rebate model would have on contract pharmacy. The new requirements will make coordination between our contract pharmacy partners, third party administrators, and manufacturers challenging, will require the ability to pull and submit data from multiple sources, several of which we do not currently pull and submit from, placing an additional burden on our team members and requiring additional staffing and resources (at least 1 additional FTE, at an estimated cost of at least $88,000/year), and will require additional resources and assurances to ensure the integrity of the data. To ensure we can pull and submit the appropriate data, as well as guarantee its integrity, we will need to purchase at least one software system additional module, with a startup cost of $10,000, plus an anticipated $35,000 annual subscription fee. Those are valuable resources we would much rather put towards ensuring the highest level of patient care. It is also important to note, with the level of information HRSA has provided, we are unsure if we may need to renegotiate contract pharmacy and third-party administration contracts to ensure we are able to attain and adhere to the proposed requirements of any potential 340B Rebate Model. If we are forced to do so, that will come at a sizable cost and require up to 80 hours of additional work by our team members, substantially adding to the administrative burden of a rebate model. This also adds to the cost to realize the 340B benefit, decreasing the overall benefit. We are also concerned that proprietary information may become required for rebates to be issued by manufacturers. Sharing proprietary information with drug manufacturers is not necessary or appropriate and must be addressed prior to any final implementation of the model. A reliable and transparent system also needs to be put in place for reconciliation and tracking of payments vs submissions vs rebates received to ensure process integrity and adherence. Finally, there needs to be protection and assurances that manufacturers cannot use the model to further restrict contract pharmacy relationships and access. We also have significant concerns regarding the Medicaid billing process under a rebate model. First, it is unclear how we should bill 340B claims if the purchase is made at WAC and we have not yet received a rebate. Second, billing at the 340B price and subsequently having the rebate denied will require Nebraska Medicine and the state Medicaid program to resolve any discrepancies, which would likely require up to 0.5 additional FTE and resources. Third, billing at WAC prior to receipt of a rebate and subsequently needing to submit adjusted claims data reflecting the 340B price after receipt of a rebate. These issues are likely to force us to carve out all Medicaid, which will result in higher cost to state Medicaid programs and shift the burden to state Medicaid programs to recoup rebates without providing states any additional resources to manage and maintain such a shift. Some of the fundamental benefits of the 340B program will be lost. HRSA Should Prohibit Rebate Denials, Limit Manufacturer Control, Ensure Integrity in the Appeals and Dispute Process, Adhere to the 340B Statute and Existing Definitions, and Continue to Exclude Invoice Data from Permitted Data Collection List If HRSA goes forward and implements a Rebate Program, against our recommendation, we ask that HRSA prohibit manufacturers from denying any rebates from 340B hospitals and prohibit collection of hospital invoice data for drug purchases. Based on the information provided, if HRSA proceeds with implementation of a rebate model program, again, against our recommendation, the program should be narrowly crafted and limited in scope, with the only acceptable reason for denying a 340B rebate being to achieve MFP deduplication, meaning if a pharmacy already received a MFP rebate for a drug included in the MDPNP and the MFP is lower than the 340B ceiling price, then the covered entity would not receive an MFP rebate. That said, we believe any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing an unnecessary and burdensome rebate model. Opportunities should be explored by CMS and the MTFDM that allow for Covered Entities to acknowledge 340B eligibility OR 340B ineligibility to be identified and corrected, with this then referenced for MFP rebate determination. We are very concerned that manufacturers and their associated third-party platforms may deny claims for a host of reasons, and will provide unintelligible or overly narrow reason codes, making it nearly impossible to challenge without taking the claim through the Administrative Dispute Resolution process. Manufacturers already have statutory authority to audit covered entities after providing the 340B price, but they should not be permitted to deny claims prior to providing the 340B price, outside of being able to achieve MFP deduplication. For these reasons, HRSA must provide protections, including a robust, impartial dispute and appeal process for covered entities. This includes HRSA outlining a robust appeals process and providing additional details on how the agency plans to conduct oversight of a rebate program to ensure that manufacturers are remitting 340B rebates on time and not denying 340B rebates. It is imperative that any process to dispute denied claims includes the ability to dispute denials in bulk, instead of individually. Disputing rebate denials individually is a manual and labor- intensive process. Allowing covered entities to submit bulk disputes would streamline the process and be a more efficient use of limited staff time and resources. Shifting evaluation of each claims 340B eligibility to manufacturers also creates the possibility they could conduct their own patient definition reconciliation with little to no transparency, removing covered entities and HRSA from such efforts. Some manufacturers have already expressed an interest in this kind of reconciliation effort by utilizing rebate models to require covered entities to submit records establishing a relationship between a patient and the covered entity that satisfies the manufacturers own version of a patient definition, which differs from HRSAs longstanding patient definition. Leaving oversight of a rebate model to the manufacturers could result in many 340B claims being denied at the manufacturers discretion, with no oversight or appeal mechanism available to 340B Covered Entities. If manufacturers do have legitimate concerns about program integrity, they can use existing mechanisms authorized by the 340B statute, such as manufacturer audits or the administrative dispute resolution process to address these concerns rather than fundamentally altering the 340B program. In enacting the 340B statute, Congress delegated responsibility for overseeing and enforcing the 340B program solely to HRSA, not to drug manufacturers and their third-party platforms. The 340B statute provides HHS with audit authority, as well as discretion to establish a mechanism for avoiding duplicate discounts. While manufacturers are permitted under the statute to audit covered entities, the ultimate decision to sanction a covered entity for violation of 340B program requirements is made by HHS. The statute further provides that the Secretary shall provide for improvements in compliance by covered entities with the requirements of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5). Allowing manufacturers to assume oversight responsibilities of the 340B program would result in a compliance nightmare for HHS and covered entities, ultimately undermining program integrity efforts and circumventing statutory authority. We strongly oppose requiring hospitals to provide manufacturers with invoice data to prove 340B drugs were purchased at WAC and prior to the date of dispense. This requirement would be extremely burdensome and unnecessary, and we thank HRSA for excluding it and ask that they continue to do so. Providing such data would require retrieval and review of large, complex reports from multiple portals containing data unnecessary to the Rebate Program just to isolate the required information. With tens of thousands of transactions across wholesaler and contract pharmacy relationships, this burdensome process may need to be repeated daily, increasing the risk of errors and subsequent rebate denials. Redirecting staff to manage this task would divert critical resources away from patient care. The requirement would also be redundant, as hospitals would be purchasing the drugs subject to rebates through their 340B-designated wholesaler accounts and would have auditable information to confirm the WAC purchase if there were questions or audits by manufacturers. Acceptable Data to Request of Covered Entities, Data Security and Patient Privacy Concerns HRSA asks about specific pharmacy and medical claims elements that should be collected as part of a rebate model. Since manufacturers are likely to require covered entities to submit claims data to them through their selected vendors, such as the Beacon and ESP platforms associated with Second Sight Solutions or the Kalderos Truzo platform, HRSA must engage in oversight of these vendors and their contracts with drug manufacturers to ensure data protection. Based on past experiences with third-party vendors and more recent experiences with the Beacon platform, we are concerned the terms and conditions of the contracts 340B hospitals will be compelled to sign will be non-negotiable and contain terms unfavorable to hospitals. Hospitals are often required to sign these contracts without the ability to meaningfully revise the contracts to protect their patients sensitive data. Many of the vendors operating in this space have worked hand in hand with drug manufacturers for years to craft these proposed rebate models, drawing questions and concerns from hospitals and other covered entities who fear private patient data may not be adequately protected by these vendors or the manufacturers. This raises serious data security and patient privacy concerns that must be addressed before any implementation. The submission of sensitive patient level data to third-party vendors that may not be subject to the confidentiality and privacy requirements of the Health Insurance Portability and Accountability Act (HIPAA) presents substantial risk. To allow certain data elements, including prescription numbers, fill numbers, prescriber identifiers, and service provider identifiers, could expose covered entities to compliance and liability risks. Covered entities are 100% accountable to HIPAA, while pharmaceutical manufacturers and their intermediaries are not directly regulated by HIPAA as covered entities. To close the gap, there needs to be responsibility on both sides to protect patient privacy and a requirement to indemnify and hold covered entities harmless for any breach of privacy or security resulting from a drug manufacturer or its third-party vendors/agents. Data security and privacy risks are also not evenly distributed. Individuals insured through small employers would face heightened vulnerability to reidentification due to smaller beneficiary pools. Data that is effectively anonymized within a large employer plan is much less identifiable, while data from a small business with only a handful of enrollees could more easily be linked to a specific individual. The same would be true for smaller entities serving smaller communities. As a result, the proposed model could disproportionately threaten the privacy of patients employed by small businesses or those that reside in small communities. Therefore, at a minimum, HRSA should require robust cybersecurity standards, enforce manufacturer liability for breaches, and mandate clear protections and accountability mechanisms for all third-party platforms involved in rebate processing. Our experience with manufacturer data submission platforms (340B ESP, for example) has been rife with costly and time-consuming challenges to address errors, inconsistencies, and opaque requirements. These challenges often delay or deny access to 340B pricing despite compliance with the manufacturers policies. This has forced us to dedicate staff and resources just to address these issues. With the proposed rebate model applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk increase significantly. HRSA should limit the data elements covered entities must submit to receive a rebate. In the previously finalized Rebate Model Pilot Program, HRSA had approved 12 pharmacy claims data elements and 14 medical claims data elements that would have to be completed for every claim. Medical claims submission introduces unique challenges, particularly due to the timeframe for submitting medical claims, which are physician administered drugs. Often, the information to submit a claim is not available for weeks or months later, and payers such as Medicare allow up to a year to submit claims data for payment, meaning hospitals are accustomed to these timelines to gather the data necessary to submit medical claims. The quantity of medication administered to the patient field, which presumably requires the quantity of billable units, poses unique challenges and requires crosslinking to national drug code. Required Reporting If HRSA pursues a rebate model, which we do not feel they should, its robust oversight of the program will be imperative to hold manufacturers accountable for honoring their obligation to provide 340B prices to covered entities and to provide rebates as expeditiously as possible. Transparency will be critical in evaluating the impact of rebate models on access to 340B pricing. If HRSA were to implement a rebate model, against our recommendation, it should require manufacturers to provide data on the time it takes to process claims, the percentage of submitted claims successfully processed, the percentage of disputed claims, the percentage of submitted claims that are denied, the percentage of disputed claims that are denied, and the basis for denial of claims. Manufacturers should provide this information to HRSA both at the claim and provider level and only in aggregated format. For public reporting purposes, HRSA could publish aggregated information and information broken down by covered entity type and by drug. Minimum Necessary Guardrails If HRSA elects to test a rebate model, against our recommendation and despite our serious concerns, the rebate model should be tightly scoped, time-limited, and structured so that participating covered entities are not forced to finance higher-priced purchases or absorb unpredictable operational burden to access the statutory 340B price. HRSA should be clear that a rebate mechanism cannot become a de facto condition on access to 340B pricing, whether through expansion in scope, informal pressure to participate, or operational rules that effectively require covered entities to adopt manufacturer-specific systems to obtain timely repayment. HRSA should establish one uniform operating standard that governs submissions, required fields, error handling, and timelines across all participating manufacturers. A pilot cannot be workable if it relies on manufacturer-by-manufacturer portals, formats, validation rules, or timelines. Without a single HRSA-defined process, covered entities will face a patchwork of requirements that multiplies implementation cost, increases error rates and administrative burden, and creates inconsistent access to repayment. Prompt payment must be enforceable in practice. HRSA should set a clear payment clock that begins only when a submission is complete under uniform HRSA rules and should tightly limit what can be treated as incomplete to avoid repeated resets of the clock. If a manufacturer fails to act within the required timeframe, the default should be approval and payment, not delay. HRSA should also include a defined remedy for late payment, such as interest or another consequence that makes the covered entity whole and creates a real incentive for compliance. If HRSA permits any denials, against our recommendation, denial grounds should be narrowly defined, objective, and tied directly to program rules, not to manufacturer preferences or evolving documentation demands. HRSA should require standardized denial codes and standardized documentation requirements so covered entities can correct issues quickly and avoid duplicative efforts. HRSA should also establish a fast reconsideration pathway with firm timelines and an escalation mechanism for recurring issues or denial patterns. Without these guardrails, a pilot will predictably turn into ongoing disputes, delayed repayments, and significant administrative diversion away from covered entities top priority, patient care. Conclusion Nebraska Medicine is concerned that the feasibility of managing and maintaining services currently sustained by 340B benefits will be severely impacted by a rebate model. The burden of additional submissions, reconciliation, and up-front carrying costs, coupled with the risk of losing millions of dollars compared to todays model, greatly changes the landscape and is a significant cause for concern. If the model goes into effect, HRSA should include a per reviewed claim dispensing fee as an additional rebated amount to ensure and support their statement that no additional administrative costs of running the rebate model shall be passed onto covered entities. In closing, the Rebate Model will result in significant costs for our hospital and will force us to reduce resources available for patient care. Such reductions could include decreasing the free services we would otherwise provide, reducing the provision of discounted and/or free drugs at any pharmacy location, reducing access to patient care services for low income and rural patients, reducing investments in capital to maintain, improve, and add facilities and technology, reducing the provision of uncompensated care, reducing the provision of charity care, reducing the provision of under-reimbursed care (Medicaid and other public insurance programs), and reducing our hospitals operating margin, which is essential to adhering to our mission-based care model and providing the level of serious medicine and extraordinary care our community and patients expect from us as Nebraskas leading academic medical center. We appreciate the opportunity to submit comments on these critically important issues within the proposed 340B Rebate Model Program. If you have any questions or need additional information, please contact me at 402-598-2820 or tjoekel@nebraskamed.com. Sincerely, Tiffany Seibert Joekel Vice President, Government Affairs
HRSA-2026-0001-2155Vocational Instruction Project Community Services, Inc.2026-04-20T04:00Z55,683 chars
Our organization operates on thin margins, and administrative costs for the pilot program would divert resources away from patient care, lack the infrastructure to manage the rebate program without the substantial federal funding and ongoing support. Under this rebate model our organization would pay full price upfront and await reimbursement which in turn will strain our cash flow, risks of underpayment or denied rebates and difficulty in budgeting for services funded by the 340B program. Our organization supports services such as care coordination, behavioral health and medication assistance. Delay in and risks of denied rebates will most certainly jeopardize our programs and care for the underserved population in the Bronx. Furthermore, we will be paying full price at the point of sale and awaiting the rebates to kick or not, will limit participation in contract pharmacy networks, reduce formularies, and restrict access to high cost specialty drugs. This would disproportionately affect low income and underserved population we serve - the very populations the 340B program was designed to support. Whilst we understand that HRSA aim is to ensure covered entities receive the ceiling price even when manufacturers restrict distribution or deny discounts at the point of sale, the rebate model that you are eager to introduce how will HRSA guarantee timely access to discounted drugs especially for entities with limited cash flow ? This will cause a shift of the administrative burden to providers. The current 340B program framework places responsibilities on manufacturers to offer the discounted ceiling price. With the rebate model the burden in now on covered entities like us requiring us to prove eligibility for each claim, manage disputes with manufacturers, navigate complex data sharing requirements. A rebate model would impose new and significant administrative hurdles on us and other vital safety net providers. Health centers like ours operate with limited staff and tight margins, yet we work every day to stretch scarce resources to meet the needs of underserved patients. Adding layers of claims submission, data reconciliation, rebate tracking, and dispute resolution would divert time and funding away from patient care. Instead of supporting our mission, a rebate framework risks creating operational barriers that undermine the very purpose of the 340B Program. We would consider a rebate model with strong guardrails such as to make it workable for FQHCs No upfront payment requirement Guaranteed timelines for processing and payment such as 15 days Federal funding for IT upgrade and staffing Protection of contract pharmacies arrangement Prohibiting manufacturers to impose conditions and restrict access. Standardized data formats to minimize administrative burden on FQHCs As an FQHC we strongly urge HRSA to recognize that the 340B rebate model would be a significantly complex operation, a huge financial risk and potential harm to patient access. The current point of sale discount model remains the most effective and efficient mechanism to ensure the safety net providers to stretch their very scare resources and serve the vulnerable communities. Health centers like us work hard to stretch the limited resources to meet the needs of underserved patients and this rebate mode would comprise patient access and destabilize essential services. We request HRSA to recognize and prioritize patient access and safety net stability, maintain the present 340B program and ensure no pilot program proceeds without clear evidence that will not harm the vulnerable population for which this 340B program was initially designed and developed for. We appreciate this opportunity to comment and would welcome a continued dialogue with HRSA as you move forward to evaluate the future of the 340B program. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC, anticipates a loss of $430,000 from entity-owned pharmacy operations and 25% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. In 2023, New York States Department of Health (DOH) implemented a major change to Medicaids prescription drug benefit that ended 340B savings for most Medicaid drugs. This shift occurred on April 1, 2023, when the state transitioned from a managed care model to a fee-for-service Medicaid pharmacy model. Under the old model, CHCs could purchase certain drugs at 340B discounts and pass the savings to patients; under the new model, those discounts no longer applied to Medicaid patients, significantly reducing CHCs ability to stretch federal drug funding. While some 340B savings remain for commercial insurance, Medicare, and clinic-dispensed Medicaid drugs, the loss of Medicaid drug discounts still eroded overall program savings Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., focuses primarily on racial and ethnic minorities populations in its service areas who are most impacted by the substance use epidemic (SUD diagnosed, collaterals of persons diagnosed, people at risk), using appropriate evidence-based practices (EBP) including Motivational Interviewing (MI), Trauma Informed Care (TIC), Relapse Prevention (RP), Recovery Coaching (RC) and Patient- Centered Care. Most of the Bronx and the areas served by VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., have been classified as medically underserved. Our core values drive every aspect of the work that we do. We are: Mission Driven: Improving our patients and clients health and well-being (meaning non- medical factors that affect health) is why VIP was created and why we are here. Everything we do should be toward achieving our mission. Person-Centered: The person (patient, client, family, VIP team) is at the center of our decisions and will drive how we do things in as holistic a way as possible. Compassionate: When we are compassionate, we listen, we ask questions, we try to understand where the person is at, we are culturally sensitive, we are understanding. It will help us achieve our mission. Respectful: We dont have to agree with or even like the other person, whether they are a client, a patient or another staff member, but we will always act professionally. It is a way of showing care, concern or consideration. Data & Quality Informed: Having data about what we do and how well we are doing it is the only way for us to know if we are in fact achieving our mission. And there is always room for us to do it better, so we will always strive to achieve better quality in everything we do. Our person-centered philosophy tailors services to the individual needs of each client through a wholistic approach to care, meeting clients where they are at. We work with individuals, families and the larger community, and often provide services in partnership with other organizations to ensure clients are provided with the best support for their needs. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients 3 who rely on us. For VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC in particular, this means it will impact the following: During the most recent fiscal year, our FQHC processed approximately 15,000 340B-eligible transactions. This volume reflects the high medication needs of our low-income patient population and the essential role of 340B in supporting access to care. Our Current Administrative Costs Related to 340B Operations and Compliance is approximately $40,000 The ability to: 1. Improve Patient Access to Medications- Offset the cost of medications for uninsured and underinsured patients, Reduce patient out-of-pocket costs, including copays and coinsurance, Support medication assistance programs and short-term medication support 2. Fund Clinical Services for High-Need Populations- Support care for patients with chronic, complex, or high-cost conditions, Sustain safety-net programs that are not fully reimbursed by payers 3.Expand and Sustain Programs That Would Otherwise Be Limited -Support extended clinic hours, specialty access, and community-based care models, Invest in telehealth and outreach services 4. Cover Unreimbursed and Under-Reimbursed Care-Stabilize the overall financial position of our safety-net services and ensure continued service delivery despite rising drug and operational costs 5. Invest in Quality, Compliance, and Infrastructure-Support 340B program oversight, compliance, and auditing, Improve pharmacy systems, data tracking, and reporting capabilities and train staff to ensure regulatory adherence and program integrity We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 4 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC provided a Sliding Fee Discount for patients based on federal guidelines. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 6 Staffing Impact: VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC anticipates needing an additional 1 FTE as a result of the rebate model, and an additional .5 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC Anticipates the rebate model would require significant changes to our IT infrastructure, New interfaces between EHR, pharmacy system, 340B platform and finance Systems. Tracking portal for rebate submission. Audit-trail and compliance monitoring tools Financial system modifications to track rebate receivables Rebate submission portal or vendor module and 340B software upgrades Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. would definitely require 2 FTEs which are partially or fully supported through 340B savings. Without 340B revenue, these staffing resources would be difficult to sustain and would limit our ability to maintain a compliant, transparent, and effective program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. participation would require approximately 2 additional FTEs, with estimated staffing costs alone ranging from $75,000$150,000 annually, in addition to substantial upfront drug purchasing costs, increased operational expenses, and financial risk related to expired or unreimbursed medications. Given our limited margins, these costs are not financially feasible without jeopardizing patient services. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. will require ongoing monitoring and reconciliation of rebate claims for the selected drugs would require an estimated 10 additional staff hours per week, increasing administrative workload related to program operations and compliance. This added burden would challenge existing staffing capacity without corresponding operational support and required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An estimated one-time cost of $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 3,600 patients, the projected total increase in expenses, including labor, IT, and carrying costs, is estimated at $325,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Bronx, New York with no 8 affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. utilizes federally compliant sliding fee discount programs to ensure nominal or reduced charges for eligible patients and rely on mechanisms such as the 340B Drug Pricing Program to acquire medications at discounted rates and extend those savings to patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Under the proposed 340B rebate model, based on our organizations data and expected utilization of high-cost therapiesincluding Eliquis (apixaban), Enbrel (etanercept), Farxiga (dapagliflozin), Imbruvica (ibrutinib), Januvia (sitagliptin), Jardiance (empagliflozin), NovoLog (insulin aspart) and related products, Stelara (ustekinumab), Xarelto (rivaroxaban), and Entresto (sacubitril/valsartan)we estimate total annual drug acquisition spending of approximately over $5 million for a population of 3,000 patients when purchasing at non-340B prices under a rebate- based model. This represents a substantial increase in upfront costs, requiring an estimated $5 million to $8 million in additional annual spending to maintain current levels of patient access to discounted medications while awaiting rebate reimbursement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as providing immunization to school districts, our medication therapy management as well as medication for our complex diabetic patients, care coordination, behavioral health services, preventive screenings, chronic disease management that are critical to ensuring access to continuity of care. Operating Hours: We anticipate needing to scale back and reducing our clinic hours by 30 % per week, limiting after hours coverage such as answering services that provide clinical triage, appointment scheduling, and patient support outside of regular business hours, prescription refill requests and urgent patient communications when the clinic is closed. This would have a significant impact on our evening and weekend hours, which are the only hours our patients can see us without losing their wages. Workforce & Staffing: The administrative burden imposed by this pilot program forces our organization to redirect limited resources away from direct patient care. Each additional Rebate coordinator we are forced to hire comes at the expense of diverting funds away from clinical staff, such as Community health worker or Behavioral Health Consultant. This tradeoff is not theoretical. It directly reduced care to our patients and leads to longer wait time for essential services especially behavioral health. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our underinsured patients from rationing their insulin or heart medication. 12 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $100,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1 million. This represents a significant and immediate cash flow burden, requiring the organization to front substantially higher drug acquisition costs while awaiting uncertain and potentially delayed rebate payments. This financial pressure is expected to grow as additional drugs are incorporated into the program in 2027 and 2028 under the Medicare Drug Price Negotiation Program, further compounding the gap between WAC purchasing and 340B pricing and increasing the organizations overall financial exposure. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take on a substantial line of credit or draw down our already limited financial reserves; resources that are typically constrained in a Federally Qualified Health Center (FQHC) setting. Efforts to secure extended payment terms from our pharmaceutical 13 wholesaler have been challenging, as long-term flexibility is not guaranteed. As a result, we would be required to absorb significant upfront costs without reliable short-term financing options, further straining our financial stability. This is not a sustainable solution; the interest costs alone are estimated to be extremely high annually funds that are currently dedicated to our primary care expansion efforts and chronic disease management programs, integrated behavioral health programs, our ability to hire additional nurse practitioners, behavioral health consultants, and care coordinators, preventive care programs, outreach services for underserved populations, Substance use disorder treatment (outpatient, MAT, harm reduction, HIV / infectious disease services, dental and workforce expansion efforts aimed at improving access to timely care. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a non- recoverable loss to be borne by the organization $80,000. This our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 15 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend 16 on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. VOCATIONAL INSTRUCTION PROJECT COMMUNITY SERVICES, INC. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact : DEBBIAN FLETCHER BLAKE PRESIDENT AND CEO dblake@vipservices.org DRACIA BRYDEN-CURROE SENIOR VICE PRESIDENT AND CHIEF CLINICAL OFFICER dcurrie@vipservices.org Sincerely, ________________________________ Debbian Fletcher-Blake, APRN, FNP President and CEO Vocational Instruction Project Community Services, Inc.
HRSA-2026-0001-2156North Broward Hospital District d/b/a Broward Health2026-04-20T04:00Z26,868 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: I write on behalf of North Broward Hospital District d/b/a Broward Health, a public hospital system in Broward County, Florida. Broward Health owns and operates various medical facilities that participate in the 340B program as covered entities (CEs). Broward Health provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs - 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. We strongly oppose any shift to a rebate-based model and urge HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. We have reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis - not post-sale rebates - and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program - including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care - is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model - even one designed with safeguards - could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care - outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our covered entities and the patients we serve. 340B covered entities are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Covered Entities to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our covered entities expected would be available for that purpose due to 340Bs long history as an upfront discount program. Requiring covered entities to purchase the 25 drugs at higher, non-340B prices and then wait for rebates, even within a nominal 10-day period, would create meaningful financial and operational strain. Notably, the 10-day period does not begin until after data is submitted to Beacon, at which point the clock starts. The time needed to use the drug on an eligible patient, as well as the time required to submit the data to Beacon, is not included in this 10-day window. We anticipate that HRSAs new rebate policy would have the following adverse impacts on our CEs: Increase in upfront drug acquisition costs. Covered entities, especially those operating with thin margins, would need to front significantly more capital to maintain inventory. This could strain cash flow, particularly for safety-net providers that rely on predictable drug pricing to sustain services. Estimated increased upfront annual drug spend to our CEs could range to $10 million or more annually. Reduced ability to offer point-of-sale discounts. Because covered entities would no longer have access to upfront 340B pricing, they may be unable to extend immediate medication discounts to patients. This is particularly harmful for uninsured and underinsured individuals who rely on reduced prices at the time of care. Reduced flexibility to absorb unreimbursed care. With more capital tied up in drug purchasing and rebate reconciliation, entities may have fewer resources to cover uncompensated or under-reimbursed services, potentially limiting access for vulnerable populations. Increased administrative burdens. - Delayed rebate submissions. If eligibility cannot be confirmed in time, Covered Entities may be unable to submit rebate requests within expected windows, effectively extending the reimbursement cycle far beyond 10 days. - Increased payment disputes. Incomplete or subsequently corrected claims data can lead to discrepancies between submitted rebate requests and manufacturer validation, triggering disputes that further delay payment and increase administrative burden. - Risk of missed rebates. Timing mismatches and data gaps raise the likelihood that some rebates are never successfully submitted or reconciled, resulting in permanent loss of expected savings. - Prolonged cash flow strain. Because the true rebate realization timeline becomes unpredictable and extended, Covered Entities must carry higher cost inventory for longer periods, compounding liquidity pressures. - Operational inefficiencies. Staff must dedicate additional time to tracking claim finalization, resubmitting rebate requests, and resolving disputes, adding complexity and cost to an already intensive resource process. - Budgeting uncertainty. Variability in rebate timing, accuracy, and approval introduces unpredictability into financial planning, making it more difficult to sustain patient care programs and operational stability. A Rebate Model Would Increase Costs for 340B Covered Entities and Reduce Resources Available for Patient Care Our covered entities have always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify currently. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on covered entities. We anticipate that the implementation of processes to support claims data submission, rebate tracking, validation, and dispute resolution will additionally require both upfront investment and ongoing operational resources across several functional areas, including but not limited to: Enhancements to existing IT systems and interfaces to support required data formats and transmission protocols, as well as the potential need for additional IT systems to support reconciliation activities, including the associated costs, setup, and manpower required to implement and maintain those systems. Staff time required for data mapping, validation, and exception handling. Additional workload for pharmacy informatics and revenue cycle teams. Legal and compliance staff time to prepare and submit claims through HRSAs Administrative Dispute Resolution (ADR) process, if rebates are denied wrongfully, and additional expenses arising from engaging external legal counsel and/or expert witnesses as may be necessary to redress wrongful denials of rebates. Additional personnel dedicated to tracking expected rebates based on utilization data and routine internal audits of claims submissions, rebate calculations, and payment accuracy along with investment in audit tools or reporting systems. We estimate the cost to hire additional staff to be between $70,000 to $85,000 annually. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of Broward Healths covered entities. Standard covered entity operations do not allow for immediate submission of claims data for physician-administered drugs, which covered entities maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the covered entities in accordance with billing rules. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B covered entities. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Transitioning to a 340B rebate model, under which covered entities must purchase drugs at full price and subsequently pursue rebates, would substantially increase administrative burden. It would introduce heightened risk of errors and financial exposure, while also necessitate additional staffing and pushing for significant investments in data infrastructure or extensive manual processes to support ongoing reconciliation between rebate claims and drug purchasing records. Thank you for considering our comments. Sincerely, Dave Lacknauth, PharmD Vice President of Pharmacy Services North Broward Hospital District dba Broward Health April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: I write on behalf of North Broward Hospital District d/b/a Broward Health, a public hospital system in Broward County, Florida. Broward Health owns and operates various medical facilities that participate in the 340B program as covered entities (CEs). Broward Health provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs - 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. We strongly oppose any shift to a rebate-based model and urge HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. We have reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis - not post-sale rebates - and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program - including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care - is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model - even one designed with safeguards - could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care - outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our covered entities and the patients we serve. 340B covered entities are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Covered Entities to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our covered entities expected would be available for that purpose due to 340Bs long history as an upfront discount program. Requiring covered entities to purchase the 25 drugs at higher, non-340B prices and then wait for rebates, even within a nominal 10-day period, would create meaningful financial and operational strain. Notably, the 10-day period does not begin until after data is submitted to Beacon, at which point the clock starts. The time needed to use the drug on an eligible patient, as well as the time required to submit the data to Beacon, is not included in this 10-day window. We anticipate that HRSAs new rebate policy would have the following adverse impacts on our CEs: Increase in upfront drug acquisition costs. Covered entities, especially those operating with thin margins, would need to front significantly more capital to maintain inventory. This could strain cash flow, particularly for safety-net providers that rely on predictable drug pricing to sustain services. Estimated increased upfront annual drug spend to our CEs could range to $10 million or more annually. Reduced ability to offer point-of-sale discounts. Because covered entities would no longer have access to upfront 340B pricing, they may be unable to extend immediate medication discounts to patients. This is particularly harmful for uninsured and underinsured individuals who rely on reduced prices at the time of care. Reduced flexibility to absorb unreimbursed care. With more capital tied up in drug purchasing and rebate reconciliation, entities may have fewer resources to cover uncompensated or under-reimbursed services, potentially limiting access for vulnerable populations. Increased administrative burdens. Delayed rebate submissions. If eligibility cannot be confirmed in time, Covered Entities may be unable to submit rebate requests within expected windows, effectively extending the reimbursement cycle far beyond 10 days. Increased payment disputes. Incomplete or subsequently corrected claims data can lead to discrepancies between submitted rebate requests and manufacturer validation, triggering disputes that further delay payment and increase administrative burden. Risk of missed rebates. Timing mismatches and data gaps raise the likelihood that some rebates are never successfully submitted or reconciled, resulting in permanent loss of expected savings. Prolonged cash flow strain. Because the true rebate realization timeline becomes unpredictable and extended, Covered Entities must carry higher cost inventory for longer periods, compounding liquidity pressures. Operational inefficiencies. Staff must dedicate additional time to tracking claim finalization, resubmitting rebate requests, and resolving disputes, adding complexity and cost to an already intensive resource process. Budgeting uncertainty. Variability in rebate timing, accuracy, and approval introduces unpredictability into financial planning, making it more difficult to sustain patient care programs and operational stability. A Rebate Model Would Increase Costs for 340B Covered Entities and Reduce Resources Available for Patient Care Our covered entities have always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify currently. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on covered entities. We anticipate that the implementation of processes to support claims data submission, rebate tracking, validation, and dispute resolution will additionally require both upfront investment and ongoing operational resources across several functional areas, including but not limited to: Enhancements to existing IT systems and interfaces to support required data formats and transmission protocols, as well as the potential need for additional IT systems to support reconciliation activities, including the associated costs, setup, and manpower required to implement and maintain those systems. Staff time required for data mapping, validation, and exception handling. Additional workload for pharmacy informatics and revenue cycle teams. Legal and compliance staff time to prepare and submit claims through HRSAs Administrative Dispute Resolution (ADR) process, if rebates are denied wrongfully, and additional expenses arising from engaging external legal counsel and/or expert witnesses as may be necessary to redress wrongful denials of rebates. Additional personnel dedicated to tracking expected rebates based on utilization data and routine internal audits of claims submissions, rebate calculations, and payment accuracy along with investment in audit tools or reporting systems. We estimate the cost to hire additional staff to be between $70,000 to $85,000 annually. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of Broward Healths covered entities. Standard covered entity operations do not allow for immediate submission of claims data for physician-administered drugs, which covered entities maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the covered entities in accordance with billing rules. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B covered entities. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Transitioning to a 340B rebate model, under which covered entities must purchase drugs at full price and subsequently pursue rebates, would substantially increase administrative burden. It would introduce heightened risk of errors and financial exposure, while also necessitate additional staffing and pushing for significant investments in data infrastructure or extensive manual processes to support ongoing reconciliation between rebate claims and drug purchasing records. Thank you for considering our comments. Sincerely, Dave Lacknauth, PharmD Vice President of Pharmacy Services North Broward Hospital District dba Broward Health
HRSA-2026-0001-2157Alabama Hospital Association2026-04-20T04:00Z16,456 chars
Attached is a response letter to the 340B Rebate Model Pilot Program Request for Information from the Alabama Hospital Association. 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: The Alabama Hospital Association (AlaHA) appreciates the opportunity to provide feedback on the request for information (RFI) on a potential 340B Rebate Model Pilot Program. AlaHA represents over 100 hospitals across Alabama, including rural, urban, nonprofit, and safety-net providers and over half of them rely on the 340B Drug Pricing Program (340B Program) to maintain access to essential healthcare services for Alabamians. At the heart of the RFI is the question whether HRSA should implement a rebate model under the 340B Program. The answer is unequivocally no. Changes to the current upfront discount model that has worked successfully for decades will impose significant costs and burdens that far outweigh any perceived benefits. AlaHA strongly opposes this shift. A change of this magnitude would undermine the 340B Programs core purpose, create significant operational and financial challenges for hospitals in rural and underserved communities, and ultimately reduce every patients access to care. The Current 340B Model Is Functioning as Intended The 340B Program is targeted at safety-net providers, flexible to meet community needs, efficient for taxpayers, and effective in expanding access and sustaining essential care. As you know, the 340B Program was designed to allow covered entities to stretch scarce federal resources to serve more patients and provide more comprehensive services. The upfront discount model is central to achieving this goal. The savings gained from the 340B Program benefit patients by allowing eligible hospitals to provide immediate access to reduced-cost drugs and services such as medication adherence programs. Since the beginning of the 340B Program, hospitals have focused on patients by reinvesting these 340B The Honorable Thomas J. Engels U.S. Department of Health and Human Services April 20, 2026 Page 2 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org savings into patient care to support services like behavioral health, oncology, and infusion services that would otherwise be financially unsustainable. In 2019 alone, 340B hospitals provided nearly $68 billion in community benefits, which include charity care policies for individuals unable to pay for their hospital care. At the same time, total 340B sales were approximately $30 billion, of which hospitals accounted for approximately 85 percent or $26 billion. That means for every dollar in 340B sales, 340B hospitals provided over two dollars in benefit to the patients and communities they serve. In addition to caring for the over 420,000 uninsured Alabamians, our hospitals are chronically underpaid by traditional Medicare, Medicare Advantage, Medicaid, and private insurers. In fact, Alabamas rural hospitals receive the lowest Medicare reimbursement in the country because of the Medicare hospital area wage index. 340B Program savings play a critical role in helping bridge these gaps, without requiring additional federal spending. The 340B Program already has built-in accountability to address waste, fraud, and abuse for covered entities. They must meet strict eligibility criteria, undergo audits and compliance reviews along with extra steps to prevent duplicate discounts and diversion. In contrast, drug manufacturers are only subjected to approximately five audits per year. This imbalance is striking and is what should be the focus of any programmatic reforms. HRSAs current oversight already ensures program integrity while also preserving flexibility. Congress created this flexibility to allow hospitals and other covered entities to respond to their local communitys needs because it knew that a one-size-fits-all mandate is not the answer to any problem. Unfortunately, the proposal to transition the 340B Drug Pricing Program to a rebate model would fundamentally alter the structure and erode the programs effectiveness for patients in defiance of the original intent. A Rebate Model Would Create Significant Financial Burdens and Unnecessary Administrative Complexity Approximately 25 percent of total U.S. healthcare expenditures go toward administrative tasks. A 340B rebate model would introduce another substantial administrative burden that only takes resources away from patient care. Hospitals, especially those in Alabama, do not have the financial reserves necessary to front the full wholesale acquisition cost (WAC) of 340B outpatient drugs and wait for a rebate. Seventy-one percent of all hospitals in Alabama operate with negative margins and when that is narrowed to just rural hospitals, 81 percent operate with negative margins. Even short delays in reimbursement could have serious consequences for these hospitals. Under the previous and unimplemented 10-drug pilot, national estimates showed that the average amount each 340B hospital would be forced to advance each year is $72.2 million for Disproportionate Share Hospitals and $1.7 million for Critical Access Hospitals. The cash flow/liquidity issues associated with a 340B rebate model could be devastating, especially considering the financial state of Alabama hospitals. We also note that while HRSA would impose a 10-calendar day deadline for rebate payment, but, absent strong protection, drug manufacturers are likely to delay payment, further exacerbating hospitals WAC holding costs and liquidity concerns. The Honorable Thomas J. Engels U.S. Department of Health and Human Services April 20, 2026 Page 3 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org A 340B rebate model that could include up to 25 drugs selected as part of the Medicare Drug Price Negotiation Program would be destabilizing for hospitals already operating with negative margins, forcing reductions in services or potential closure. The current upfront discount model provides transparency and predictability, but a 340B rebate model would introduce uncertainty on timing and payment from drug manufacturers. Absent strong protections, delays and denials of claims from drug manufacturers are inevitable and additional staff will be needed to handle this perpetual cycle of dispute resolutions over rebate eligibility and timing. Even after an inappropriate denial, many hospitals will not have the resources or cashflow to challenge the determination in what will inevitably become a lengthy deny and appeal cycle with the manufacturers. Hospitals would need at least 2 full-time staff members to comply with the requirements of a 340B rebate model, including data submission and processing reimbursement. The agency estimated more than 1.5 million hours of labor would be needed under the 10-drug pilot, but hospitals report that it would be closer to 11.2 million hours of labor to comply with the onerous data submission requirements associated with a 340B rebate model. This burden will only increase as the scope of rebate model expands to 25 drugs. Beyond the additional staff needed, the uncertainty surrounding the creation of the information technology (IT) systems required for such an enormous undertaking has made it difficult for vendors to even provide estimates of the cost. We do know that creating and maintaining the IT system to implement a 340B rebate model will not be cheap or easy to implement. Contrary to the claims of drug manufacturers, the process of submitting 340B rebate model claims is not readily available through platforms such as 340B ESP. Instead, hospitals and other covered entities would be required to establish complex tracking and reconciliation processes. Additionally, IT problems previously emerged under the original unimplemented 340B rebate model pilot program, and we expect them to continue. Before a federal court enjoined the implementation of the original 340B rebate model pilot program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform, but hospitals encountered serious technical issues potentially caused by a lack of adequate testing. The platform could not handle the massive volume of unit-level data from thousands of covered entities. These technical issues threaten the scarce resources the 340B Program was created to protect, as more staff resources would have to go into remedying these technical issues and would lead to delayed rebate claims submissions, thereby exacerbating hospitals administrative burdens, WAC holding costs, and liquidity concerns. Additionally, the terms of use for the Beacon IT platform granted the company broad rights to use or sell sensitive hospital and patient data to third parties, including drug companies, raising significant security and compliance concerns. Although many coalesced around Beacon in the previously proposed pilot, if the new model allows multiple platforms, covered entities would have to navigate multiple processes and platforms. Alabama hospitals, especially in rural areas, are not currently designed to support multiple manufacturer-specific claims-level tracking and reporting. The scarce resources available and limited staff time should be dedicated to patient care, not extracting, linking, and validating complex data across multiple platforms. The Honorable Thomas J. Engels U.S. Department of Health and Human Services April 20, 2026 Page 4 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org These burdens and their associated costs will divert already scarce resources away from patient care and towards administrative overhead, which is particularly difficult for small hospitals with limited administrative capacity. Moreover, this does not benefit patients. Impact on Patient Access and Affordability Any reduction in the effectiveness of the 340B Program will directly impact patients. Under a rebate model, the resources needed to ensure care for every American would be even more scarce. Hospitals would be forced to make difficult decisions to offset the financial and administrative burden. Community programs and services like mobile clinics would be scaled back. Essential, but costly, services like labor and delivery and oncology programs would close at some hospitals. Prescription discounts for patients would end. These are just a few examples of what would happen if a 340B rebate model goes into effect. Additionally, the supply of drugs hospitals are able to keep in-stock and immediately available for patients would also be impacted leading to reduced access to them. Cash flow disruptions created by a rebate model could create a scenario where hospitals are unable to keep a full supply of necessary, but costly medications, meaning a lifesaving medication may not be available when a patient needs it. This would run counter to the programs intent and harm the very patients it was designed to help. A 340B Drug Pricing rebate model would also disproportionately affect Alabamas pediatric hospitals. Smaller, weight-based pediatric dosing means that these hospitals who focus on our children take longer to accumulate drug volume, ultimately delaying rebate submission eligibility when full package sizes are required. This example of dosing is just one example of the reality previously mentioned that a one-size fits all rebate model does not work. It will only lead to impractical reporting timelines that create extend periods of hospitals carrying unreimbursed costs for providing necessary care A Fundamental Shift to a Rebate Model is Not the Answer A rebate model for 340B drugs would not modernize the program, provide technical improvements, or provide more transparency to the program. First, a rebate model is not a modernization of the 340B Program. Rather, it is a departure from the original Congressional intent of the 340B Program and is designed to delay discounts and create friction in the system that will, ultimately, protect drug manufacturer revenue at the expense of patient care. A 340B rebate model is unsustainable for safety-net hospitals and will hurt all patients by reducing access to care. The proposed rebate model is also not a technical improvement to the 340B Program. Instead, it is a drastic restructuring designed to weaken the 340B Program by delaying resources, increasing administrative burden, and shifting financial risk onto hospitals that serve the most vulnerable patients while ignoring the positive real-world impact of the program. Finally, a rebate model will not improve transparency in the 340B Program. As highlighted above, the 340B Program is already subject to strict oversight from HRSA, and legal and regulatory The Honorable Thomas J. Engels U.S. Department of Health and Human Services April 20, 2026 Page 5 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org processes already exist to address concerns in the program. Covered entities already use sophisticated systems to ensure compliance with eligibility requirements and HRSA audits consistently show high compliance rates among hospitals. Between FY 2018 and FY 2022, where HRSA conducted 160 340B audits on hospital covered entities each FY, 340B hospital audit findings for duplicate discount and diversion decreased by a combined 62 percent. Over that same time, 60 percent of the audits conducted of drug companies had at least one adverse finding. Any growth in the 340B Program is driven by increased patient need and exorbitant increases in drug prices. In fact, drug companies increased the price of their drugs faster than inflation for over 1,200 drugs between July 2021 and July 2022, with an average price increase of 31.6 percent and several drugs experiencing over 500 percent price growth. These increases have led to an average operating margin across the drug industry that is estimated to exceed 25 percent compared to the substantial negative operating margins of Alabama hospitals that we note above. Conclusion The proposed rebate model would weaken the 340B Program and jeopardize access to care across Alabama. The current payment model for 340B drugs is working as intended and remains critical to the financial viability of hospitals and the health of the communities they serve. We therefore urge HRSA not to pursue any future actions associated with a 340B rebate model of any size or scope. If HRSA chooses to move forward with a 340B rebate model, we urge it to engage in further stakeholder consultation from covered entities and consider approaches that preserve the programs intent and patients access to care before publishing any proposed rule. AlaHA appreciates the opportunity to provide input and stands ready to work with the Administration and policymakers to ensure the 340B Program continues to fulfill its original mission of stretching scarce resources to ensure access to quality care for patients. Sincerely, Danne J. Howard President and CEO ALABAMA HOSPITAL ASSOCIATION DH/MW/sy cc: The Honorable Tommy Tuberville, United States Senate The Honorable Katie Britt, United States Senate The Honorable Barry Moore, United States House of Representatives The Honorable Shomari Figures, United States House of Representatives The Honorable Mike Rogers, United States House of Representatives The Honorable Robert Aderholt, United States House of Representatives The Honorable Dale Strong, United States House of Representatives The Honorable Thomas J. Engels U.S. Department of Health and Human Services April 20, 2026 Page 6 500 North East Blvd., Montgomery, AL 36117 | 334.272.8781 | alaha.org The Honorable Gary Palmer, United States House of Representatives The Honorable Terri Sewell, United States House of Representatives
HRSA-2026-0001-2158Community Voices for 340B2026-04-20T04:00Z18,027 chars
See Attached. 4912-2376-9506, v. 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA HTTPS://WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Community Voices for 340B Comments in Response to Request for Information: 340B Rebate Model Pilot Program Introduction Community Voices for 340B (CV340B) thanks the Health Resources and Services Administration (HRSA) for the opportunity to respond to HRSAs Request for Information (RFI) examining the potential impacts of a 340B Drug Pricing Rebate Program. It is paramount that HRSA preserves the intent and integrity of the 340B drug pricing program (340B program) as it considers changes to the way the program has operated for the last 30 years. CV340B Who We Are Community Voices for 340B (CV340B) is a grassroots organization that seeks to raise awareness of the important role that the 340B program plays in protecting and improving health care access and the quality of care for communities nationwide. Over the last ten years, CV340B has been the only national organization that provides a space for all 340B stakeholders to come together to #Defend340B. CV340Bs five Regional Advocacy Groups has over six hundred engaged individual advocates dedicated to defending the 340B program. 4912-2376-9506, v. 1 Why We Care Working closely with its covered entity advocates, which includes representatives from Hospitals, Federally Qualified Community Health Centers, Ryan White Clinics, Pharmacies and other 340B stakeholders, CV340B learns firsthand about the immense value of the 340B program to the patients served by covered entities. Advocates partner with CV340B to educate their patients, staff, community and policymakers about the importance of the 340B Program. Intended to stretch scarce federal resources to reach more patients and provide more services, the 340B program provides financially strapped covered entities with a stable source of savings and revenue that they use to underwrite the cost of daily operations and patient care. But that stable funding source depends on covered entities receiving their 340B discounts at the point of sale. A shift away from upfront discounts puts this fragile financing system at risk, ultimately harming patients who depend on covered entities for care that they cannot afford to get elsewhere. When covered entity advocates were asked by CV340B in a recent survey about the perceived advantages of moving to a rebate-based model, 38 respondents reported they saw no advantage. Many respondents simply said, There is none. One of those respondents elaborated on the sentiment of the group stating: There are no advantages for a [covered entity] moving to a rebate-based model. The only advantage is to pharma [the pharmaceutical industry]. CEs will have to front mon(ies) to pharma in the form of the retail price of a medication--and pharma will have discretion whether to approve or deny the rebate to the CE. This is not sustainable. None of the respondents expressed support for the rebate model. What Is Included in the RFI CV340B appreciates HRSAs thoroughness in gathering information on the 340B rebate model from interested stakeholders. As explained in more detail below, CV340B has serious concerns with the proposed model, especially with respect to the financial and operational impact on covered entities, patient harm, and the lack of manufacturer transparency and accountability. Cost to Covered Entities Covered entities will incur considerable cost as a result of a 340B rebate program. The anticipated impact on operating margins, drug costs, wholesaler payments, cash flow, and 4912-2376-9506, v. 1 patient care are just a few of covered entities most pressing concerns with the proposed transition away from an upfront discount. Operational Impact The increased operational burden of managing a 340B rebate will cripple small covered entities. Safety-net hospitals, community health centers, Ryan White clinics, and other 340B covered entities operate on razor thin margins. An analysis of federally regulated Uniform Data Set indicates that Federally Qualified Community Health Centers (FQHCs) operate on a daunting -2% operating margin.1 Hospitals across the country continue to struggle with chronic Medicaid and Medicare underpayments, high levels of inflation, rising costs of health insurance premiums, and rapid growth in drug costs.2 Receiving 340B discounts upfront allows covered entities to mitigate the impact of these environmental factors and to invest their savings immediately in patient care. HRSAs proposed rebate model would significantly destabilize the current financing system for safety-net providers in the U.S. The shift to a rebate model would disrupt cash flow stability, increase dependance on credit lines, and force staffing and service decisions that will directly impact patients. Rising Drug Costs The unsustainable rise in drug costs and the challenges to patient care created by rising drug costs will be exacerbated by a 340B rebate model. The median cost for a new drug coming to market in 2024 was $370,000, more than double the cost in 2021.3 Beqvez, a drug that treats the bleeding disorder hemophilia and manufactured by Pfizer, hit the market in 2024 with a whopping list price of $3,500,000 per dose, making it completely unaffordable for families trying to protect their loved ones from a fatal bleed.4 The astounding increase in drug prices does not end with new drugs entering the market. The Office of the Assistant Secretary for Planning and Evaluation found that, in 2022, more than 4,200 drugs had an average price increase of 15.2%, nearly double the rate of inflation in the same year.5 The 340B program was designed to combat these rising and often exorbitant drug costs. By shifting to a rebate model, covered entities would be forced to 1 https://data.hrsa.gov/topics/healthcenters/uds/overview 2 AHA. 3 https://trial.medpath.com/news/05f77dd2c80303fb/u-s-drug-prices-double-as-pharmaceutical-industry- shifts-focus-to-rare-diseases. 4 https://www.reuters.com/business/healthcare-pharmaceuticals/prices-new-us-drugs-doubled-4-years- focus-rare-disease-grows-2025-05- 22/#:~:text=The%20percentage%20of%20drugs%20launched,price%20of%20$22%2C500%20a%20year. 5 https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs. 4912-2376-9506, v. 1 bear the full brunt of these high drug costs before receiving any relief from manufacturers. Covered entities are rightfully concerned that if drug companies are willing to price their products far beyond what is considered a reasonable or fair price, they may be just as willing to withhold or delay payment of 340B rebates. The rebate model, therefore, introduces both increased financial risk and administrative burden to the covered entities attempting to make these drugs affordable for their patients. Wholesaler Payments and Cash Flow Impacts The terms and conditions of covered entities current wholesaler agreements were all negotiated based on the assumption of an upfront discount. While specific contract terms are confidential, our covered entity advocates report that wholesaler payment timelines vary from a 30-day payment period to a same-day or prepay arrangement with an average 17-day payment timeline. Wholesaler payment terms are determined in part by cash on hand and previous credit history. While some covered entities have a standard three- month cash on hand, others are operating on less than a day. For those covered entities with prepay or same day wholesaler repayment terms and less than one day cash on hand, a rebate model could force them out of business. Wholesaler payment timelines are structured around predictable pricing. The rebate model creates uncertainty by requiring covered entities to pay full price for the drugs they order and giving them little control over when the rebates for those drugs arrive. They can only hope to receive the rebates from manufacturers in a timely manner. Even the most lenient wholesaler timelines become untenable when manufacturers unilaterally decide to deny rebates. Patient Harm Due to the inevitable financial instability caused by a potential 340B rebate model, patient access to affordable medication and services will be greatly reduced. Our covered entity advocates tell us that they are already bracing for the changes they will have to make to compensate for the delay in receiving a rebate. Some of these anticipated changes include limiting access to high-cost medications for those patients who might have another drug option; reducing services for which 340B was originally intended to support, such as transportation, medication adherence support, and case management; and scaling back community-facing programs like heart health programs and diabetes support services. In a recent survey of our advocates, 36.1% of respondents reported that a rebate program would result in the immediate closure of a facility or clinic. One respondent said, Our cancer center would close immediately. Whats Missing: Manufacturer Audits and Transparency 4912-2376-9506, v. 1 Manufacturers assert that the rebate model will reduce duplicate discount risks and increase transparency within the 340B program. Noticeably missing from this rationale is an acknowledgement that manufacturer overcharges of covered entities is not being adequately addressed. HRSA should establish an automatic review of a manufacturer when there is reasonable evidence that it overcharged covered entities. The purpose of the review should be to determine whether the manufacturer should be audited. Enforcement mechanisms must be timely, transparent, and meaningful to ensure compliance. Covered entities are being audited at nearly forty times the rate of manufacturers. In 2023, 26 manufacturers issued 39 individual notices of overcharge to covered entities on 1,573 distinct NDCs.6 Yet, only two drug manufacturers out of the 26 manufacturers who reported overcharging covered entities have been audited by HRSA.3 HRSAs audit program is not solving the overcharge problem. In 2023, Genentech issued a notice to covered entities detailing a TEN-YEAR period from 2011 to 2021 in which it overcharged covered entities for the orphan drug Klonopin (clonazepam). Like many other drug companies, Genentech has not been audited by HRSA in the past 10 years. Another problem covered entities face is securing repayments from manufacturers to rectify overcharges. The administrative burden of tracking and seeking refunds from manufacturers for overcharges rests entirely on covered entities. Drug companies have access to purchasing records and could easily issue refunds to covered entities automatically. However, in what can only be described as a cost-saving measure, drug companies require covered entities to submit a refund request or credit claim for each overcharged NDC. Manufacturer Notices Number of NDC Overcharges Audits between 2015 and 2023 Alcon 1 22 0 Amgen 2 84 0 Amneal 1 699 0 Amring Pharmaceuticals 1 14 0 Chartwell RX 1 43 0 Daiichi Sankyo 1 3 0 Dermavent 1 1 0 Eli Lilly and Company 2 10 0 Granules 1 94 0 GSK 4 44 0 6 https://www.hrsa.gov/opa/manufacturer-notices. 4912-2376-9506, v. 1 J&J 4 31 1 Jazz 1 2 0 Lifestar Pharma 1 4 0 Meitheal 1 11 0 Merck 3 25 0 Neurocrine Biosciences 1 1 0 Noven 1 21 0 Novo Nordisk 4 9 0 Purdue 1 15 0 SK Life Science 1 8 0 SpecGx 1 118 0 Tolmar 1 7 0 Vertex 1 1 0 VistaPharm 1 245 1 WG Critical Care 1 1 0 Zydus 1 60 0 Total 39 1573 2 https://www.hrsa.gov/opa/manufacturer-notices It is difficult to understand how the rebate model would improve 340B program integrity when the model does nothing to advance manufacturer transparency and accountability. To address this glaring omission, CV340B recommends that HRSA require manufacturers to regularly submit standardized, publicly available data before implementing a 340B rebate model. Such data should include total value of all historical overcharges committed by the manufacturer, drug price increases that exceed the rate of inflation for each NDC sold by the manufacturer, disclosure of all manufacturer-supported patient advocacy groups, and disclosure of all manufacturer-supported studies and articles relating to the 340B program. There are good reasons to expand the rebate initiative to include these manufacturer data submission requirements. Manufacturers impose tremendous administrative burden on covered entities as previously mentioned. It is only fair that manufacturers be required to provide the total number and value of reported overcharges to HRSA. Penny pricing in the 340B program occurs when a manufacturer raises the price of drugs far beyond the rate of inflation. The purpose of this penalty is to protect covered entities from such dramatic price increases. If manufacturers did not habitually raise their prices faster than the rate of inflation, the 340B discount on brand drugs would be a standard 23%. HRSA, covered entities and the general public are entitled to information relating to these price increases, including the manufacturers justification for the increases. 4912-2376-9506, v. 1 During a recent review of the submitted RFI comments on the rebate model, the covered entity community noticed that Patients Rising, a manufacturer-funded patient advocacy group, flooded HRSA with AI-generated letters supporting the model.7 More than half of the initial 300 RFI comments were identical letters submitted in alphabetical order starting with commenters whose names started with the letter a, but were not otherwise identifiable. Whether these letters came from actual patients is an open question. This astro-turf campaign is strong evidence of the egregious quid-pro-quo overreach of manufacturers financial support of patient advocacy groups. CV340B has spent weeks and countless hours educating and preparing covered entities and their patients on the Request for Information from HRSA on the 340B rebate model. For too long, drug manufacturers have hidden behind organizations that have purportedly represented patients while doing the bidding of drug companies without their members knowledge. Furthermore, drug manufacturers ability to buy research to spread misinformation about the 340B program continues to threaten the care that patients receive from covered entities. Funding studies through consulting firms and think tanks which use selective framing of research questions and incomplete datasets leads to research that spreads misinformation that influences policy makers who rely on the seemingly credible data. Lack of transparency of funding sources and methodologies increases covered entity administrative burden, and financial uncertainty due to increased policy threats and restrictions and causes reputational harm to covered entities who attempt to defend the 340B program from these false narratives. Reinforcing 340B misinformation through manufacturer funded research is not only a policy concern when considering a rebate model, it has real tangible consequences for patients access and health outcomes. It is CV340Bs belief that increased drug manufacturer transparency should start with a disclosure of all manufacturer engagements with patient advocacy groups, researchers, and academic scientists. Independent Clearinghouse for Duplicate Discounts There are other reasons to be skeptical of manufacturers claim that the rebate model is needed to reduce duplicate discount risks. First, the risks are overstated. HRSA has essentially eliminated the Medicaid fee-for-service duplicate discount risk through its Medicaid Exclusion File solution. Implementation of the Inflation Reduction Acts Medicare price reduction provisions is still in its infancy. It is too early to declare the existence of a Medicare/340B duplicate discount problem. 7 https://340breport.com/patients-rising-ends-outreach-campaign-after-340b-report-highlights-identical- hrsa-340b-rfi-submissions/. 4912-2376-9506, v. 1 Second, there are other options for managing potential duplicate discounts without inflicting harm to the safety net. CV340B supports the creation of a neutral clearinghouse. An independent clearinghouse could prevent duplication and reduce the administrative and financial burdens placed on covered entities compared to a rebate model. Any clearinghouse should only be used to prevent federally prohibited 340B duplicate discounts involving Medicaid rebates and Medicare maximum fair price and inflationary rebates. It should not be used to address 340B duplicate discounts involving commercial claims. Conclusion The 340B program is currently operating as intended. The programs effectiveness in generating a stable funding source for covered entities would be in grave jeopardy if a 340B rebate model is established. Shifting the financial risk from multinational, for-profit conglomerates to the non-profit safety net makes no sense and would undermine access to affordable healthcare for patients. CV340B urges HRSA not to capitulate to drug company pressure to launch a 340B rebate model. HRSA should instead stand with patients and the American people. We welcome continued dialogue with HRSA and are ready to support policies that protect the 340B program and the patients it serves. For more information, please contact Rhiannon Marshall Klein, Executive Director at Rhiannon.Marshall@cv340B.org or 616.485.9378. Sincerely, Rhiannon Klein Executive Director Community Voices for 340B
HRSA-2026-0001-2159Anonymous Anonymous2026-04-20T04:00Z50,337 chars
See attached file(s): reference HHS Docket No. HRSA202603042 HHS Docket No. HRSA202603042 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. 15,991 transaction - This estimate is based on our annual savings data and may be conservative, as the report captures only full packages that were purchased. Based on these savings, we estimated a total of 15,991 individual items (tablets, vials, etc.) for the year. ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Internal Audits and TPA maintenance/month: 8 hours monthly Level of care change audits: 2 hours Self-pay and payor audits: 2 hours Random sample audits: 2 hours Crosswalk maintenance: 4 hours Quarterly 340b committee meeting: 5.5 hours quarterly Preparation of agenda/minutes: 1.5 hours Meeting time: 4 hours (8 members x 30 minute meeting) TPA subscription: $1313.25/month Mock Audits prep time, days of audit and cost: 60 hours plus $11,500 yearly 8 hours x 3 RPh, 1 tech = 32 hours day of audit 2 hours x 4 admin leaders = 8 hours of admin 1 hour x 2 admin leaders = 2 hours of admin 16 hours of prep $11,500 to external company iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for our institution are primarily related to program compliance. We spend a minimum of 10 hours each month on internal audits and TPA maintenance. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP (Medicare Drug Price Negotiation Program). Make correct designations in TPA to ensure data flows to ESP/Beacon: 15 minutes Open 340B ESP account: 3 hours one-time, 541-2673 hours on-going (0.26-1.29 FTE addition) Contract review: 2 hours Completing sign up: 1 hour Submit claims: 10 minutes weekly Audit claims/review denials/submit appeals: 2-10 minutes per claim Open Beacon 340B rebate account 5 hours one-time, 1599-7995 hours (0.76-3.84 FTE addition) Contract review: 2 hours Completing sign up: 1 hour Open/assign 340B account for rebates to flow to: 2 hours Audit claims/review denials/submit appeals: 2-10 minutes per claim Audit rebates awarded to deposited: 2-10 minutes per claim Code/attribute deposits to 340B program: 2-10 minutes per claim ii. Describe the methodology and assumptions used to develop these estimates. We ran a yearly savings report through the TPA that identified all 340B purchases made at the full- package level. Using this data, we multiplied the BUPP by the number of packages purchased to estimate the total number of claims15,991since each individual unit (tablet, etc.) would now receive a rebate rather than accumulating toward a full-package claim. We estimated that reviewing each item-level claim would take approximately 210 minutes. The total time required was then converted to full-time equivalents (FTEs) using 2,080 hours as one FTE. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. We currently rely on our TPA and EMR to interface and determine eligibility for 340B claims. Aside from routine TPA maintenance and auditing, this process requires minimal intervention from the pharmacy team. We do not utilize contract pharmacies and do not operate an in-house retail pharmacy, reducing the risk of duplicate discounts. Requiring us to establish 340B ESP accounts and manage those claims, in addition to opening and managing a Beacon Rebate account and its associated claims, would substantially increase the workload for our small department. These added responsibilities would significantly expand the resources and time required to maintain compliance. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Structuring the program so that each individual item qualifies for a rebate, rather than the full package, significantly increases the workload. For example, a bottle containing 100 tablets would generate 100 separate claims, each of which must be reviewed to ensure acceptance. Every claim represents a small financial transaction, perhaps just a few cents per tablet, that must be tracked and reconciled. In an ideal scenario, all claims would be accepted without denials and would flow seamlessly from the TPA to the vendor sites. However, the additional effort comes from verifying that each claim was sent and accepted and that the corresponding rebate was ultimately received. This process becomes even more time-consuming when denials require follow-up or appeals. Managing and maintaining multiple vendor sites further adds to the overall workload. v. Comment on the impact of these incremental costs under your current operations. Time would need to be reallocated from existing responsibilities to support these activities. Based on estimated FTE increases of 0.26 to 3.84, this shift would likely necessitate adding additional staffing to adequately manage the workload. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Time would need to be reallocated from existing responsibilities to support these activities. Based on estimated FTE increases ranging from 0.26 to 3.84, this reallocation would likely require additional staffing to adequately manage the workload. Currently, we staff 2.0 FTE pharmacists and 0.8 FTE pharmacy technician. Implementation of this program could nearly double the size of our pharmacy team. Additionally, our current pharmacy location lacks the physical space to accommodate additional staff. To proceed, we would either need to hire personnel who could work remotely or from another area of the hospital, or undertake a renovation to expand the pharmacy workspace. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. The FTE need would likely be permanent, with a higher level of staffing required during the initial pilot phase. Over time, the workload may decrease as we become more familiar with the system(s); however, this will largely depend on the number of vendors being used, volume of claim denials and the need for resubmissions. Some of the 340B work currently being performed could be reallocated to this role, with the new FTE dedicated exclusively to 340B compliance. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. We would also require accounts with ESP and Beacon, as we do not currently have any contract pharmacies or an in-house retail pharmacy. Additionally, increased staffing would necessitate corresponding investments in IT infrastructure, including additional computers, phones, and related equipment. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Currently, our TPA has indicated they are not raising prices to provide all this data, though that remains a real possibility. Other TPAs are already charging for the additional work involved. Anticipated one-time costs are approximately $500. Ongoing costs related to FTE additions could range from $14,900 for a 0.25 FTE, $45,000 for a 0.76 FTE, $76,000 for a 1.25 FTE, up to $219,000 for a 3.5 FTE. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. We anticipate spending $24,000$36,000 over the next year on consulting services and training to ensure staff are using their time efficiently and that we remain compliant with regulatory requirements. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). As a critical access hospital, hiring an additional FTE to sustain this program would significantly reduce any savings realized. These savings are reinvested to support the addition and ongoing maintenance of programs that directly benefit our patients. Most recently, 340B savings have been used to expand sleep study capacity, add EKG and Holter monitor availability, and improve staff communication through the implementation of the Vocera system. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. We do not anticipate any change to access. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Our payments are automatically withdrawn by our wholesaler every Wednesday. In some cases, there are only three business days between invoice issuance and payment, while others allow seven. If rebates are received within 10 days of data submission, we would still be required to pay manufacturers higher prices before receiving rebates, which would negatively impact our cash flow. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Payment terms are the same for our GPO and 340B accounts. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We do not receive prompt payment incentives. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Payments are remitted within 3-7 days of invoice. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. If our wholesaler were willing to delay sending invoices, rebates could be received before payment is made. However, this would shift the cash float from the covered entity to the wholesaler. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Manufacturers should be required to directly match each initial claim from the covered entity to either a rebate payment or a rebate denial. This would allow covered entities to generate reports clearly showing matched claims and their corresponding rebates or denials. HRSA should track this matching to ensure compliance with the expectation of 100% accuracy. Requiring manufacturers to perform this claim-to-outcome matching would help reduce the administrative burden that will be placed on covered entities. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. To avoid cash flow interruptions, rebates would need to be paid within one to two days. Rather than implementing a rebate model, manufacturers could be granted access to the claims data they are requesting. This approach would shift the review burden to manufacturers, allowing them to evaluate claims directly and request audits when appropriate, an option they already have under existing policy. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. We respectfully request that manufacturers be prohibited from denying any rebates for 340B hospitals. It would be particularly helpful for HRSA to explicitly ban denials related to alleged Medicaid duplicate discounts and diversion, though concerns would remain if manufacturers were permitted to deny claims for other reasons. Our hospital carves out Medicaid claims and does not utilize contract pharmacies or an in-house retail pharmacy; therefore, our risk of duplicate discounts is very low. As such, there should be no requirement for our claims to be submitted to receive a rebate. Prohibiting rebate denials would significantly reduce administrative burden and costs that are expected to arise from having to interface with manufacturers vendors administering approved rebate models. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. If rebate denials are permitted, HRSA should designate a single vendor to minimize the administrative burden associated with interfacing with multiple vendors. HRSA should also require manufacturers to provide specific and detailed information with any denial so that covered entities have sufficient data to investigate and address the issue. Alternatively, denials could be prohibited altogether, with manufacturers instead required to rely on audits, as permitted under the 340B statute. Covered entities could submit the claims data manufacturers assert is necessary for program integrity, allowing manufacturers to conduct retrospective audits without creating additional front-end administrative burden. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. We pay for services through a TPA to utilize split-billing software, track and monitor accumulations, and calculate savings. In addition, we conduct internal audits using reports generated by our TPA and perform comparative reviews against our EMR data. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). We perform internal audits monthly and external audits through a 340B partner. We conduct multiple internal audits each month. This includes reviewing every patient with a change in level of care to ensure the charge format (GPO versus 340B) is updated appropriately based on that change. We also review all self-pay patients to ensure accumulations are reversed if the patient later obtains Medicaid coverage or otherwise becomes ineligible. In addition, new payors are reviewed monthly to ensure any Medicaid payors are excluded from the program under our carve-out policy. We perform random sample audits using reports available through our TPA to verify that BUPPs are current, the patient was treated in a valid outpatient location, the patient does not have Medicaid coverage, and that appropriate documentation supports a valid providerpatient relationship. Crosswalk maintenance is performed routinely to ensure the correct products are linked to accumulations. Given recent drug shortages and supply chain challenges, we also periodically review active medication lists in our EMR to confirm that the products on hand match those accumulating under the program. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. As previously noted, a rebate program would add to data collection activities, which we anticipate would be ongoing. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Manufacturers should submit: Total number of rebate claims received Total number of rebate claims approved Total number of rebate claims denied Reason codes for denials, categorized using standardized HRSA-defined categories (e.g., duplicate discount, diversion, administrative error) Average time from claim receipt to rebate payment Dollar value of rebates requested vs. rebates paid Number of audits initiated related to rebate activity and general outcomes (e.g., findings, no findings) Denial-to-approval ratio, both in aggregate and by covered entity type b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should report high-level, aggregate manufacturer performance data on a semi-annual basis to promote transparency, accountability, and informed policy evaluation, while protecting proprietary information and covered-entity-specific data. This level of transparency would allow Congress, covered entities, and other stakeholders to assess whether manufacturers are administering rebate models consistently and fairly. Total rebate claims submitted, approved, and denied per manufacturer Approval and denial percentages by manufacturer Standardized denial reason distribution Median and average time to rebate payment Aggregate rebate dollar amounts paid Number of manufacturers participating in the pilot c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Quarterly submissions to HRSA would allow timely identification of trends, compliance issues, or operational disruptions. For HRSA to adequately assess the effectiveness, feasibility, and unintended consequences of a potential 340B Rebate Model Pilot Program, data collection must occur over a sufficient duration and at consistent intervals, ideally 24-36 months with a mid-pilot assessment at 12- 18 months. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. While increased data sharing and manufacturer visibility could provide additional transparency, a rebate-based model also introduces new operational complexities and financial risks that may undermine the programs core objectives. If not carefully structured, a rebate model could weaken program integrity by shifting financial risk and administrative burden to covered entities, particularly critical access and rural hospitals with limited staffing and cash reserves. Delayed rebate payments, subjective denial decisions, and inconsistent manufacturer processes could create financial instability and divert resources away from patient care and compliance activities. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs A rebate-based model is unlikely to assist manufacturers in avoiding duplicate discounts beyond what current mechanisms already permit. Covered entities that carve out Medicaid claims, particularly those without contract pharmacies, already present little to no risk of duplicate discounts. Manufacturers currently have the right to audit covered entities under the 340B statute and can request claims data as part of those audits. Requiring a rebate process for all covered entities, regardless of their risk profile, does not proportionally address duplicate discount concerns and instead applies a broad solution to a limited issue. Access to claims data and retrospective audits would be a more targeted and effective approach. ii. Reduce diversion or improper claims; There is limited evidence that a rebate-based model would meaningfully reduce diversion or improper claims beyond existing compliance processes. Covered entities already engage in extensive internal auditing, use TPAs, and maintain robust policies to ensure eligibility and appropriate use of 340B drugs. A rebate model may introduce new risks, such as inappropriate denials or administrative errors, while offering minimal incremental benefit in identifying true diversion. Retrospective audits remain the most effective tool for addressing diversion concerns without disrupting front-end operations. iii. Increase pricing transparency across stakeholders. A rebate-based model does not inherently increase pricing transparency for covered entities and may obscure actual acquisition costs by interposing manufacturers rebate calculations behind proprietary processes. Any transparency gained by manufacturers would not necessarily translate to covered entities or the public unless HRSA requires standardized reporting and public disclosure. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. As previously noted, requiring standardized data elements and reporting formats across manufacturers, rather than entity or vendor specific submissions would significantly reduce administrative burden. Another approach would be to shift data review responsibility to manufacturers by granting access to claims data for program integrity purposes while maintaining their existing authority to conduct retrospective audits. Additionally, requiring aggregate, manufacturer-level reporting to HRSA, rather than claim-level submissions tied to payment, would further streamline oversight. Reporting frequency could be limited to quarterly intervals, which would be sufficient for monitoring and oversight without creating continuous operational disruption. Finally, rebate denials should be prohibited or strictly limited, with manufacturers instead relying on audits and corrective actions where appropriate. d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A rebate pilot could provide HRSA with greater visibility into manufacturer practices and improve accountability through public reporting. It would also allow for comparative analysis of approval, denial, and payment trends, which could inform the development of consistent national standards for manufacturer participation. However, for many covered entities, particularly critical access hospitals like our institution, the costs of a rebate-based model are likely to outweigh the benefits, especially given that existing statutory audit mechanisms already address manufacturer concerns. A rebate model would likely result in increased staffing and consulting costs, heightened compliance risk related to denial remediation, and significant cash-flow disruptions. HHS Docket No. HRSA202603042 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. 15,991 transaction - This estimate is based on our annual savings data and may be conservative, as the report captures only full packages that were purchased. Based on these savings, we estimated a total of 15,991 individual items (tablets, vials, etc.) for the year. ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Internal Audits and TPA maintenance/month: 8 hours monthly Level of care change audits: 2 hours Self-pay and payor audits: 2 hours Random sample audits: 2 hours Crosswalk maintenance: 4 hours Quarterly 340b committee meeting: 5.5 hours quarterly Preparation of agenda/minutes: 1.5 hours Meeting time: 4 hours (8 members x 30 minute meeting) TPA subscription: $1313.25/month Mock Audits prep time, days of audit and cost: 60 hours plus $11,500 yearly 8 hours x 3 RPh, 1 tech = 32 hours day of audit 2 hours x 4 admin leaders = 8 hours of admin 1 hour x 2 admin leaders = 2 hours of admin 16 hours of prep $11,500 to external company iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Key cost drivers for our institution are primarily related to program compliance. We spend a minimum of 10 hours each month on internal audits and TPA maintenance. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP (Medicare Drug Price Negotiation Program). Make correct designations in TPA to ensure data flows to ESP/Beacon: 15 minutes Open 340B ESP account: 3 hours one-time, 541-2673 hours on-going (0.26-1.29 FTE addition) Contract review: 2 hours Completing sign up: 1 hour Submit claims: 10 minutes weekly Audit claims/review denials/submit appeals: 2-10 minutes per claim Open Beacon 340B rebate account 5 hours one-time, 1599-7995 hours (0.76-3.84 FTE addition) Contract review: 2 hours Completing sign up: 1 hour Open/assign 340B account for rebates to flow to: 2 hours Audit claims/review denials/submit appeals: 2-10 minutes per claim Audit rebates awarded to deposited: 2-10 minutes per claim Code/attribute deposits to 340B program: 2-10 minutes per claim ii. Describe the methodology and assumptions used to develop these estimates. We ran a yearly savings report through the TPA that identified all 340B purchases made at the full-package level. Using this data, we multiplied the BUPP by the number of packages purchased to estimate the total number of claims15,991since each individual unit (tablet, etc.) would now receive a rebate rather than accumulating toward a full-package claim. We estimated that reviewing each item-level claim would take approximately 210 minutes. The total time required was then converted to full-time equivalents (FTEs) using 2,080 hours as one FTE. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. We currently rely on our TPA and EMR to interface and determine eligibility for 340B claims. Aside from routine TPA maintenance and auditing, this process requires minimal intervention from the pharmacy team. We do not utilize contract pharmacies and do not operate an in-house retail pharmacy, reducing the risk of duplicate discounts. Requiring us to establish 340B ESP accounts and manage those claims, in addition to opening and managing a Beacon Rebate account and its associated claims, would substantially increase the workload for our small department. These added responsibilities would significantly expand the resources and time required to maintain compliance. iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Structuring the program so that each individual item qualifies for a rebate, rather than the full package, significantly increases the workload. For example, a bottle containing 100 tablets would generate 100 separate claims, each of which must be reviewed to ensure acceptance. Every claim represents a small financial transaction, perhaps just a few cents per tablet, that must be tracked and reconciled. In an ideal scenario, all claims would be accepted without denials and would flow seamlessly from the TPA to the vendor sites. However, the additional effort comes from verifying that each claim was sent and accepted and that the corresponding rebate was ultimately received. This process becomes even more time-consuming when denials require follow-up or appeals. Managing and maintaining multiple vendor sites further adds to the overall workload. v. Comment on the impact of these incremental costs under your current operations. Time would need to be reallocated from existing responsibilities to support these activities. Based on estimated FTE increases of 0.26 to 3.84, this shift would likely necessitate adding additional staffing to adequately manage the workload. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Time would need to be reallocated from existing responsibilities to support these activities. Based on estimated FTE increases ranging from 0.26 to 3.84, this reallocation would likely require additional staffing to adequately manage the workload. Currently, we staff 2.0 FTE pharmacists and 0.8 FTE pharmacy technician. Implementation of this program could nearly double the size of our pharmacy team. Additionally, our current pharmacy location lacks the physical space to accommodate additional staff. To proceed, we would either need to hire personnel who could work remotely or from another area of the hospital, or undertake a renovation to expand the pharmacy workspace. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. The FTE need would likely be permanent, with a higher level of staffing required during the initial pilot phase. Over time, the workload may decrease as we become more familiar with the system(s); however, this will largely depend on the number of vendors being used, volume of claim denials and the need for resubmissions. Some of the 340B work currently being performed could be reallocated to this role, with the new FTE dedicated exclusively to 340B compliance. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. We would also require accounts with ESP and Beacon, as we do not currently have any contract pharmacies or an in-house retail pharmacy. Additionally, increased staffing would necessitate corresponding investments in IT infrastructure, including additional computers, phones, and related equipment. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Currently, our TPA has indicated they are not raising prices to provide all this data, though that remains a real possibility. Other TPAs are already charging for the additional work involved. Anticipated one-time costs are approximately $500. Ongoing costs related to FTE additions could range from $14,900 for a 0.25 FTE, $45,000 for a 0.76 FTE, $76,000 for a 1.25 FTE, up to $219,000 for a 3.5 FTE. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. We anticipate spending $24,000$36,000 over the next year on consulting services and training to ensure staff are using their time efficiently and that we remain compliant with regulatory requirements. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). As a critical access hospital, hiring an additional FTE to sustain this program would significantly reduce any savings realized. These savings are reinvested to support the addition and ongoing maintenance of programs that directly benefit our patients. Most recently, 340B savings have been used to expand sleep study capacity, add EKG and Holter monitor availability, and improve staff communication through the implementation of the Vocera system. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. We do not anticipate any change to access. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Our payments are automatically withdrawn by our wholesaler every Wednesday. In some cases, there are only three business days between invoice issuance and payment, while others allow seven. If rebates are received within 10 days of data submission, we would still be required to pay manufacturers higher prices before receiving rebates, which would negatively impact our cash flow. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Payment terms are the same for our GPO and 340B accounts. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We do not receive prompt payment incentives. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. Payments are remitted within 3-7 days of invoice. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. If our wholesaler were willing to delay sending invoices, rebates could be received before payment is made. However, this would shift the cash float from the covered entity to the wholesaler. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Manufacturers should be required to directly match each initial claim from the covered entity to either a rebate payment or a rebate denial. This would allow covered entities to generate reports clearly showing matched claims and their corresponding rebates or denials. HRSA should track this matching to ensure compliance with the expectation of 100% accuracy. Requiring manufacturers to perform this claim-to-outcome matching would help reduce the administrative burden that will be placed on covered entities. e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. To avoid cash flow interruptions, rebates would need to be paid within one to two days. Rather than implementing a rebate model, manufacturers could be granted access to the claims data they are requesting. This approach would shift the review burden to manufacturers, allowing them to evaluate claims directly and request audits when appropriate, an option they already have under existing policy. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. We respectfully request that manufacturers be prohibited from denying any rebates for 340B hospitals. It would be particularly helpful for HRSA to explicitly ban denials related to alleged Medicaid duplicate discounts and diversion, though concerns would remain if manufacturers were permitted to deny claims for other reasons. Our hospital carves out Medicaid claims and does not utilize contract pharmacies or an in-house retail pharmacy; therefore, our risk of duplicate discounts is very low. As such, there should be no requirement for our claims to be submitted to receive a rebate. Prohibiting rebate denials would significantly reduce administrative burden and costs that are expected to arise from having to interface with manufacturers vendors administering approved rebate models. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. If rebate denials are permitted, HRSA should designate a single vendor to minimize the administrative burden associated with interfacing with multiple vendors. HRSA should also require manufacturers to provide specific and detailed information with any denial so that covered entities have sufficient data to investigate and address the issue. Alternatively, denials could be prohibited altogether, with manufacturers instead required to rely on audits, as permitted under the 340B statute. Covered entities could submit the claims data manufacturers assert is necessary for program integrity, allowing manufacturers to conduct retrospective audits without creating additional front-end administrative burden. 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. We pay for services through a TPA to utilize split-billing software, track and monitor accumulations, and calculate savings. In addition, we conduct internal audits using reports generated by our TPA and perform comparative reviews against our EMR data. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). We perform internal audits monthly and external audits through a 340B partner. We conduct multiple internal audits each month. This includes reviewing every patient with a change in level of care to ensure the charge format (GPO versus 340B) is updated appropriately based on that change. We also review all self-pay patients to ensure accumulations are reversed if the patient later obtains Medicaid coverage or otherwise becomes ineligible. In addition, new payors are reviewed monthly to ensure any Medicaid payors are excluded from the program under our carve-out policy. We perform random sample audits using reports available through our TPA to verify that BUPPs are current, the patient was treated in a valid outpatient location, the patient does not have Medicaid coverage, and that appropriate documentation supports a valid providerpatient relationship. Crosswalk maintenance is performed routinely to ensure the correct products are linked to accumulations. Given recent drug shortages and supply chain challenges, we also periodically review active medication lists in our EMR to confirm that the products on hand match those accumulating under the program. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. As previously noted, a rebate program would add to data collection activities, which we anticipate would be ongoing. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Manufacturers should submit: Total number of rebate claims received Total number of rebate claims approved Total number of rebate claims denied Reason codes for denials, categorized using standardized HRSA-defined categories (e.g., duplicate discount, diversion, administrative error) Average time from claim receipt to rebate payment Dollar value of rebates requested vs. rebates paid Number of audits initiated related to rebate activity and general outcomes (e.g., findings, no findings) Denial-to-approval ratio, both in aggregate and by covered entity type b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should report high-level, aggregate manufacturer performance data on a semi-annual basis to promote transparency, accountability, and informed policy evaluation, while protecting proprietary information and covered-entity-specific data. This level of transparency would allow Congress, covered entities, and other stakeholders to assess whether manufacturers are administering rebate models consistently and fairly. Total rebate claims submitted, approved, and denied per manufacturer Approval and denial percentages by manufacturer Standardized denial reason distribution Median and average time to rebate payment Aggregate rebate dollar amounts paid Number of manufacturers participating in the pilot c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Quarterly submissions to HRSA would allow timely identification of trends, compliance issues, or operational disruptions. For HRSA to adequately assess the effectiveness, feasibility, and unintended consequences of a potential 340B Rebate Model Pilot Program, data collection must occur over a sufficient duration and at consistent intervals, ideally 24-36 months with a mid-pilot assessment at 12-18 months. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. While increased data sharing and manufacturer visibility could provide additional transparency, a rebate-based model also introduces new operational complexities and financial risks that may undermine the programs core objectives. If not carefully structured, a rebate model could weaken program integrity by shifting financial risk and administrative burden to covered entities, particularly critical access and rural hospitals with limited staffing and cash reserves. Delayed rebate payments, subjective denial decisions, and inconsistent manufacturer processes could create financial instability and divert resources away from patient care and compliance activities. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs A rebate-based model is unlikely to assist manufacturers in avoiding duplicate discounts beyond what current mechanisms already permit. Covered entities that carve out Medicaid claims, particularly those without contract pharmacies, already present little to no risk of duplicate discounts. Manufacturers currently have the right to audit covered entities under the 340B statute and can request claims data as part of those audits. Requiring a rebate process for all covered entities, regardless of their risk profile, does not proportionally address duplicate discount concerns and instead applies a broad solution to a limited issue. Access to claims data and retrospective audits would be a more targeted and effective approach. ii. Reduce diversion or improper claims; There is limited evidence that a rebate-based model would meaningfully reduce diversion or improper claims beyond existing compliance processes. Covered entities already engage in extensive internal auditing, use TPAs, and maintain robust policies to ensure eligibility and appropriate use of 340B drugs. A rebate model may introduce new risks, such as inappropriate denials or administrative errors, while offering minimal incremental benefit in identifying true diversion. Retrospective audits remain the most effective tool for addressing diversion concerns without disrupting front-end operations. iii. Increase pricing transparency across stakeholders. A rebate-based model does not inherently increase pricing transparency for covered entities and may obscure actual acquisition costs by interposing manufacturers rebate calculations behind proprietary processes. Any transparency gained by manufacturers would not necessarily translate to covered entities or the public unless HRSA requires standardized reporting and public disclosure. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. As previously noted, requiring standardized data elements and reporting formats across manufacturers, rather than entity or vendor specific submissions would significantly reduce administrative burden. Another approach would be to shift data review responsibility to manufacturers by granting access to claims data for program integrity purposes while maintaining their existing authority to conduct retrospective audits. Additionally, requiring aggregate, manufacturer-level reporting to HRSA, rather than claim-level submissions tied to payment, would further streamline oversight. Reporting frequency could be limited to quarterly intervals, which would be sufficient for monitoring and oversight without creating continuous operational disruption. Finally, rebate denials should be prohibited or strictly limited, with manufacturers instead relying on audits and corrective actions where appropriate. d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. A rebate pilot could provide HRSA with greater visibility into manufacturer practices and improve accountability through public reporting. It would also allow for comparative analysis of approval, denial, and payment trends, which could inform the development of consistent national standards for manufacturer participation. However, for many covered entities, particularly critical access hospitals like our institution, the costs of a rebate-based model are likely to outweigh the benefits, especially given that existing statutory audit mechanisms already address manufacturer concerns. A rebate model would likely result in increased staffing and consulting costs, heightened compliance risk related to denial remediation, and significant cash-flow disruptions.
HRSA-2026-0001-2160University of Chicago Medical Center2026-04-20T04:00Z20,914 chars
See attached file(s) AT THE FOREFRONT UChicago Medicine April 20, 2026 The Honorable Thomas J. Engels Adrninistrator Health Resources and Services Adrninistration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The University of Chicago Medical Center ("UCMC"), we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Inforrnation: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should irnplernent a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on UCMC that far outweigh any benefits that might come frorn it. HRSA's own calculations of costs are extraordinary (but are yet a fraction of the costs UCMC calculates will result from a rebate model). More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 34013 hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching rnore eligible patients and providing more cornprehensive services." Preserving the upfront discount mechanism, which UCMC has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. UCMC has done its best to provide detailed answers in the lhnited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Prograrn and those that have been approved under the Medicare Drug Price Negotiation Prograrn (MDPNP) for 2027, per IIRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimate has increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug cornpanies while we await our statutory discount, inore likely disputes over delays and denials, and therefore less money that UCMC can spend on patient care and cornprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require UCMC to spend significant SUMS on new administrative costs. When we chose to participate in the 340B program, UCMC understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, irnposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital-- and far above and beyond what we are experiencing now. Overall, UCMC's rnodeling indicates that the 340B rebate rnodel would require an upfront expenditure of approximately $115,000. These initial expenses would include costs related to: Cash flow strain/upfront capital to purchase drugs Data feed set-up Education and re-training Legal and compliance review Bank and internal account creation CMS enrollment Administrative work with third-party administrators (e.g., blocking NDCs) Strategic formulary moves and reauthorizations Cost of diverting resources Additionally, UCMC would incur even greater expenses on an on-going basis to rnanage compliance with a Rebate Program. For example, the Rebate Prograrn will require significant manual data management and analysis to reconcile multiple data sources, and the complexity of the program will require the hiring ofconsultants and third-party auditors to ensure compliance. In total, UCMC expects to have an additional $312,000 in annual expenses for its participation in a 340B Rebate Program, as compared to the current upfront discount model. 2 Staffing Impacts Under a Potential 340B Rebate Program. UCMC does not currently have the staff needed to cornply with a Rebate Program. HRSA's current estimate of only 5 hours per week in additional work (for 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestirnate of the tirne and manpower required to comply with a Rebate Prograrn. Instead, UCMC anticipates that the implementation of a Rebate Program would require an additional 180 hours of work per week. Most of this additional time will be spent by the 340B pharmacy tearn on the daily data submissions (including monitoring submission status and updating reporting requirernents) and regular auditing of claims status, rebate flows, and inquiries to manufacturers. Clinical providers, as well as legal, cornpliance, and finance teams, will also need to reallocate work hours from their current duties to ensuring the cornpliant management of the Rebate Program. UCMC anticipates it would need to recruit up to 4.5 FTE additional employees to absorb the extra work. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. UCMC has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. For example, we will need to modify the data feeds from our split-billing vendor to include data that were not previously tracked, but are required for reporting under the Rebate Program. Further, under the current upfront discount model, UCMC does not have to manage accounts receivable related to 340B discounts, since we realize the discounts at the tirne of purchase. But under the Rebate Program, UCMC will need to establish new feeds and tracking from accounts receivable vendors to ensure that we are able to track and appropriately account for manufacturer rebates. We will also need to open new bank lockboxes, new bank accounts, and new financial ledger accounts for rebate payments. Those are just the initial changes required. On an on-going basis, UCMC will be required to monitor and update daily sales feeds from third party administrators and regularly reconcile rnultiple disparate systems to track the status of clairns subrnission and rebate payments. Overall, UCMC estimates the system developrnent, procurement, maintenance, or integration that would be required to implement a 340B Rebate Program would require an initial expense of over $50,000 and recurring annual costs ofat least $85,000. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not irnpose new data-related burdens on 34013 hospitals like ours. For exarnple, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. First, UCMC only submits limited data for two manufacturers. The volume of data required for the Rebate Program is several orders of magnitude greater than any data 3 UCMC has subrnitted or is currently submitting. Second, as explained above, the Rebate Program requires different types of claims data and different fields than UCMC currently submits. Current data subrnissions only include in-house pharmacy claims. Under a rebate rnodel, UCMC would also submit medical clairns from its outpatient departments and contract pharrnacy claims. The Rebate Prograrn also requires fieldssuch as DSH ID, claim number, claim line number, health plan, health plan ID, unit of measure, and HCPCS codethat are not part of any current data submission by UCMC. Third, UCMC claims data are not structured in a way that would allow easy or automated submission. Rather, providing the required data would involve detailed manual work. For exarnple, the Rebate Program would require submission of clairns-level inforrnation. However, a single medical claim may have rnultiple drugs or prescriptions grouped together. Therefore, UCMC will need to manually populate a differentiator to identify each different drug. Finally, the Rebate Program will require UCMC to track entirely new types of data related to payments. Under the current upfront discount model, discounts are accrued at the tirne of purchase; there are no regular payments received by covered entities from rnanufacturers that must be tracked. Under a Rebate Program, UCMC would be responsible for what is akin to a new billing and collection process, which would entail collecting data off of various platforms to determine: (1) whether claims have been appropriately posted to the claims submission sites: (2) whether and which claims have been approved for a rebate by the manufacturer; (3) whether the manufacturer has inappropriately denied claims for a rebate; (4) when manufacturers have issued rebates; (4) whether the amounts paid are correct; and (5) when payments are actually received by UCMC. These are all entirely new types of data, which will create a substantial, ongoing burden on UCMC to manage. Once rebates are received, there will be additional burden on UCMC to the extent the rnanufacturers payment mechanisms do not align with UCMC accounts receivable workflows. For example, if inanufacturer rebates are provided at the institutional level as opposed to by ordering locationthat will be misaligned with, and would fundamentally alter, UCMC's financial tracking. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force UCMC to effectively provide drug cornpanies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies pay within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have rneaningful impact on our institution and the patients we serve. In the past, HRSA credited the position of drug companies that "the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount 4 is due." UCMC believes this position to be highly unrealistic. In our experience with claims submission to manufacturers, including through 340B ESP and under MDPNP, we do not see payments owed for at least 30 days, significantly later than the required timefrarne. Often, manufacturers inappropriately flag claims. This leads to additional time intensive, manual work for UCMC to resolve the issues and meaningful delays in receiving payments or results in non-payrnent. Under current drug wholesaler arrangements, UCMC is obligated to make payments every two (2) weeks. Any delay in receipt of rebates could impact UCMC's ability to cornply with its own payment obligations under these arrangements, jeopardizing UCMC's ability to purchase drugs. Even if manufacturers were to comply with the 10-day period, as compared to the current model under which discounts are accrued at the time of purchase, even 10 days creates a meaningful additional financial strain on the organization. Based on UCMC's purchase history, we estimate having to make an additional upfront expenditure of $1 million. UCMC does not have sufficient cash on hand to make this type of required outlay and would likely need to increase borrowing to cover (leading to increased ongoing interest payments). Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that UCMC will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. In the face of declining reimbursements over the years, UCMC has resisted scaling back on services by using 340B prograrn funds to maintain services that are essential to serve our community. Savings derived from the 340B Program enable UCMC to provide a number of essential services to our patients and community: Medication Access and Affordability Program This program provides reimbursement guidance and cost savings to patients who are uninsured or experiencing high copays. For example, UCMC's outpatient pharmacy allows uninsured or underinsured patients to pay a fixed price of $5 or $10 for a 30-day supply of commonly prescribed medications, including inhalers, antimicrobials, antidiabetic, and antihypertensive drugs. Prescription Delivery Services UCMC is located in a pharmacy desert, meaning our patients do not have easy access to retail pharnacies in our community. To ease the burden on patients, UCMC provides free medication home delivery services, so our patients can receive their medications without having to travel to a pharmacy. Emergency Department Outpatient Pharmacy UCMC operates an outpatient pharrnacy in our Ernergency Department, making sure patients are able to leave with their take-home medications following their emergency visit, without having to make a separate trip to the pharrnacy. Outpatient Care Clinic Assistance Savings from the 340B Program have also allowed UCMC to expand pharmacy services in other areas of the hospital. For example, the arnbulatory pharmacy team assists providers in our outpatient care clinics in managing patients' chronic disease states. Meds2Beds Program - Meds2Beds ensures that hospitalized patients have access to their prescription medications prior to being discharged. This service focuses on medication counseling and prescriptions ready at time of discharge. Refills are then mailed to the patient's horne or picked up at the outpatient pharrnacy. AduIt and Pediatric Trauma Centers UCMC also uses 340B savings to further expand the non-pharrnacy services it offers to patients and to more broadly invest in the community. For exarnple, UCMC opened its level 1 adult trauma center in 2018prior to which time the South Side of Chicago had been without an adult trauma center for 27 years. Together with its level 1 pediatric trauma center, UCMC's trauma prograrn operates a Violence Recovery Program to take a more comprehensive approach to breaking the cycle of violence in the community. Oncology Center Devclopment - UCMC is in the rnidst of constructing an $815 million cancer center, Illinois' first and only freestanding cancer hospital. The 575,000 square-foot, seven-story pavilion is expected to open in 2027 and will provide patients and the community access to the newest diagnostic innovations and leading-edge therapies. The rebate model, and its additional costs and inevitable impact on the value of the 340B program, will threaten these programs and other vital care that UCMC provides to its patients and community. Additionally, the financial uncertainty surrounding the Rebate Program has already affected UCMC's strategic and annual planning. Promotions and hiring have been placed on hold and limited capital requests are being approved. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed 6 premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. UCMC reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will irnpose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platforrn to operate the Program. Beacon is also being used by manufacturers to validate and authorize refund payments under the MDPNP. In preparing for the start of the original Rebate Program and tracking rebates under the MDPNP, we encountered serious problems with Beacon. First, Beacon's Terms and Conditions are presented "as-is", thereby requiring UCMC to engage with a third-party entity for which it had no opportunity to negotiate at arms-length the terms of the engagement. Any risks UCMC identified, regardless of degree, had to be accepted as the costs of continued participation in the 340B program or the MDPNP. Second, we have found Beacon's utility to be lirnited and inflexible. When claims are incorrectly categorized (i.e., WAC versus 340B), Beacon offers limited stock responses to provide back to the rnanufacturers that do not effectively resolve disputes. Then, as UCMC works to resolve questions or disputes, Beacon is slow to respond to inquiries and requests additional information outside the scope of the required data submission. In many cases, UCMC has been forced to escalate outside of Beacon directly to CMS to address its concerns. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on UCMC, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the sarne potential benefits as a rebate 7 mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate rnechanism. Notably, no drug manufacturer has raised a 340B/MDPNP cleduplication issue with UCMC to date, indicating that UCMC's existing approaches to preventing duplicate discounts are sufficient. Moreover, the 340B statute already allows manufacturers to conduct good faith audits of covered entities if they identify any duplicate discount concerns, which has effectively resolved such issues in the context of Medicaid rebates and is suitable for MDPNP rebates as well. For all of these reasons, UCMC respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow UCMC and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and rnany other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider irnportant aspects of the program. We appreciate your consideration of these comments and look forward to working with HRSA on this irnportant issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, )eal oteic Denise Scarpelli Vice President, Chief Pharmacy Officer University of Chicago Medical Center Chicago, IL 8
HRSA-2026-0001-2161Oregon Primary Care Association2026-04-20T04:00Z21,475 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Oregons 33 Community Health Centers (CHCs) and the 503,000 patients they serve, the Oregon Primary Care Association (OPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, OPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA does pursues the rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA allows manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, OPCA explains: A. The importance of 340B savings to Oregon CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 503,000 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. 1 HRSA requested input on these in the first paragraph of the RFI summary. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. In 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Oregon, CHCs routinely rely on 340B savings to support services such as: clinical pharmacy services, dental care, SUD treatment, mental health services, mobile health outreach, and school-based health programs. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they are currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Oregons CHCs will provide details on these financing needs. It is important to note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model planned to launch on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low- income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHC patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that in response to lower 340B savings Oregon health centers have laid off staff, reduced prescription assistance programs, and made difficult financial decisions due to reduced 340B savings. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry- picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Oregon has successfully operated a neutral clearinghouse for more than 15 years to avoid duplicate discounts in Medicaid. Furthermore, in keeping with CHCs commitment to 340B program transparency and compliance, Oregon CHCs have recently adopted a neutral clearinghouse to process claims across all other payer channels outside of Medicaid. OPCA has directly asked drug manufacturers to participate in the neutral clearinghouse alongside us to provide the de-duplication data they seek. Unfortunately, manufacturers have declined. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary de-duplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me via email at jwatson-patko@orpca.org or by cell at 267-978- 4400.. Sincerely, Joan Watson-Patko, MSW Executive Director Oregon Primary Care Association 623 SW Oak St, Suite 300 Portland OR 97205 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2162FQHC 340B Compliance2026-04-20T04:00Z75,848 chars
See attached letter. 1 May contain PHI April 20, 2026 Via Online Submission to www.Regulations.gov Chantelle Britton Director - Office of Pharmacy Affairs (HRSA) Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, Maryland, 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton, On behalf of FQHC 340B Compliance, we would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to provide comment on any future iterations of a 340B Rebate Model Pilot Program. As HRSA stated in the initial 340B Rebate Pilot Proposal, the change from upfront discounts represents a fundamental shift in how the program has operated for over 30 years1, with the potential to have major implications for both 340B stakeholders and the communities they serve. FQHC 340B Compliance (FQHC 340B) works in 43 states with over 150 of the 1512 Community Health Centers in the country, as well as with other covered entity types, to support ongoing 340B Program compliance and oversight. Our organization serves as 340B Technical Advisor for the National Association of Community Health Centers and a number of state Primary Care Associations. We provide monthly educational webinars and podcasts to the 340B community to help strengthen 340B stakeholders' understanding of the 340B statute, regulations, guidance, and compliance principles. FQHC 340B actively engages with the broad 340B community from the perspective that the covered entities participation in the program must first be rooted in compliance to achieve the 340B Programs intent stated in the House Report, Legislative History, to enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.2 It is also our firm belief that calls for transparency must be equally applied to all participants of the 340B Program, covered entities and manufacturers alike. Recognizing the breadth of comments that HRSA will be receiving within this Request For Information (RFI), we seek to limit our comments to areas that will help inform operations of the 1 90 FR 36163, 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program 2 H.R. Rep. No. 384(II), 102ND Cong., 2ND Sess. 1992, 1992 WL 239341 (Leg.Hist.) 2 May contain PHI 340B Program and help strengthen transparency if HRSA elects to move forward with 340B Rebate Model Pilot Program. Developments a Decade in the Making It is hard to believe we are almost a decade from one of the most salient moments in 340B program history, July 18, 2017, when then Captain Pedley testified before Energy & Commerce in the hearing Examining HRSAs Oversight of the 340B Drug Pricing Program, Subcommittee on Oversight and Investigations.3 What now RADM. Pedley, made so clear in her statements back then is that the Statute is silent. Eleven times during the hearing she stated this in response to the barrage of questions ranging from how entities use their savings, provide 340B to insured or uninsured patients, and how entities must dispense and get drugs to patients. Add to this, RADM. Pedleys statements that the U.S. District Court for the District of Columbia invalidated a 2013 final rule on a provision related to orphan drugs and HRSA has prioritized rulemaking in areas in which the D.C. circuit has clearly recognized our regulatory authority" and the stage has been set for 340B experiences past, present, and potentially future. It is with the benefit of hindsight, that we encourage HRSA to proceed with extreme caution in the application of any major programmatic changes, including the potential 340B Rebate Model Pilot Program, ensuring that regulatory silences are not left unintentionally for stakeholders to fill with various applications driving additional administrative, operational, and financial burden to the nations safety-net providers. We encourage HRSA to ensure that sufficient detail is requested from manufacturers for their rebate plans. The application plans should include greater detail than the 1000-character limit used in the previous Manufacturer application template from the 2025 iteration of the 340B Rebate Model Pilot Program. Further, to support equal transparency among stakeholders, these plans need to be made available in unredacted form, with access to all information pertaining to the effectuation of 340B rebate determination for all 340B covered entities. Patient Definition and Proactive Compliance Safeguards Timely to the importance of statutory and regulatory detail, are questions in an area where the statute is not silent, but instead brief. Challenges to HRSAs long-standing guidance interpretation 1996 Patient Definition4 drawing from 340B Statutes prohibition that a covered entity shall not resell or otherwise transfer the drug to a person who is not a patient of the entity5 are untimely (thirty years, to date) and predominantly based in speculative logic6. It is likely that comment letters from other members of the 340B stakeholder community will raise what has been seen in 3 https://democrats-energycommerce.house.gov/committee-activity/hearings/hearing-on-examining-hrsa-s-oversight-of-the-340b-drug- pricing-program 4 HRSA 1996 Definition of a Patient: 61 FR 55156 (C) 5 Section 340B of the Public Health Service Act, 42 U.S.C. 256b(a)(5)(B) 6 https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for-Duplicate- Replenishment.pdf 3 May contain PHI recent court filings and publications as justification for the necessity of a 340B rebate model, so it is best to address here as well. In April 2026, BRG, parent company for Second Sight Solutions (SSS), 340B ESP, and Beacon Channel Management Published a white paper titled 340B Patient Definition and Implications for Duplicate Replenishment.6 While this white paper implies that as many as 1 in every five 340B prescriptions is a compliance concern, the paper has not a single example of this duplication occurring. This is interesting since SSS has been collecting 340B transaction data on covered entities since 2020 and the data use agreements, signed by users, authorize essentially limitless use of the data submitted by covered entities.7 One would expect, if the issue was as rampant as implied, instances would have been encountered to be reportable by BRG by now. In the recent lawsuit filed by AbbVie challenging HRSAs interpretation of patient definition8 (see Attachment 1), this issue arises again, limited to one covered entity, further questioning the rampant issue of multiple covered entities qualifying the same prescription in their 340B Programs. To start, AbbVie presented data in Figure 3 on page 52 of the filing, stating the same claim was submitted multiple times for reimbursement. However, the data reflects voluntary data submissions to 340B ESP9 and in no way are requests for reimbursement. Later, on page 245, AbbVie continues to present covered entities interactions with 340B ESP from an unexpected perspective, stating AbbVie found that there were an anomalously high number of instances where a hospital submitted a chargeback request on an individual dispense that was also claimed by another covered entity. The vast majority of these duplicate dispense claims were requested by another 340B covered entity. This logic fails to track as covered entities simply provide voluntary data submissions to 340B ESP. Notably, at present, chargeback requests for non-ADAP covered entities are primarily processed by wholesalers. The term chargeback is absent from the 340B ESP Term of Use,10 so it is unclear how the hospital, referenced in the AbbVie case, could have sought multiple chargebacks through 340B ESP voluntary data submissions. This perceived duplication of 340B discounts was addressed by the covered entity in the good faith inquiry with AbbVie on page 286, describing in detail the process to ensure the 340B status is only claimed by one entity.11 In general, the opportunity for duplication of 340B discounts is the exception not the norm. In our work with TPAs and gateway processors across the 340B industry, there are safeguard logics in place, including for referrals that limit each claim to be captured as 340B only once. Further, the systems are built to monitor for the occurrence of an error of this nature to allow for correction in the extremely rare instance this was to occur. We would encourage OPA to have discussions with 7 You grant Second Sight a worldwide, sublicensable, non-exclusive, royalty-free, perpetual, irrevocable license to collect, process, disclose, create derivative works of and otherwise use the Covered Entity Claims Data (Data License) for the purposes set forth herein, including specifically pursuant to Sections 3.4 and 3.5, and represent and warrant that you are authorized to grant such Data License on behalf of the Covered Entity. https://www.340besp.com/terms-of-use (last accessed Apr. 18, 2026) (emphasis added). 8 AbbVie V HHS, Challenging Patient Definition: Case 1:26-cv-01190 Filed 04/08/26 9 https://help.340besp.com/en/articles/13287651-pharmacy-claims-data-table 10 https://www.340besp.com/terms-of-use 11 AbbVie V HHS, Challenging Patient Definition: Case 1:26-cv-01190 Filed 04/08/26 4 May contain PHI TPAs to better understand the safeguards in place. FQHC 340B continues to have these conversations on a regular basis, to support our clients ongoing compliance in the 340B program, and appreciate the numerous safeguards put in place by the TPAs and gateway processors to proactively prevent the potential for duplication of 340B discounts. In practice, FQHC 340B has observed that covered entities work together diligently to put processes in place to ensure that multiple 340B discounts are not received on the same claim. Following the principles outlined in HRSA FAQ 159912 and Bacons Law13, FQHC 340B has helped facilitate workable strategies when covered entities are not using the same Third-Party administrator at a contract pharmacy. Examples include health centers who have elected to block prescriptions written by providers employed by the neighboring covered entity or covered entities who have developed policies to stratify when prescriptions qualify by the different entities based on the number of degrees of separation the covered entity is from the prescription. Example, if the prescription was written by the health centers primary care provider the health center would qualify it as 340B but if it was written for a health center patient by a hospital specialist from an 340B eligible encounter, then the hospital would qualify the prescription. Past Performance is the Best Predictor of Future Results: Please Plan Accordingly When there is a lack of information, there is misunderstanding, and worse, it may drive a wedge between the 340B stakeholders. We see manufacturers asking for more data to have more transparency into how covered entities 340B programs are operating, a statutory right which is limited to the conducting of audits sanctioned by the Secretary at the manufacturers expense.14 With the level of continuous data submissions, coupled with the shift to the manufacturer's determination of what is and is not 340B, a right not granted in the 340B statute is conveyed. It is questionable whether the 340B Rebate Model Pilot Program as previously proposed15 shifts covered entities into a state of perpetual manufacturer audit, where the covered entities are left to bear the burden of the administrative expense, and question whether HRSA itself may be creating conditions onerous enough to effectively increase the contract price, thus perhaps nudging it above the statutory ceiling as described by the DC Circuit Court of Appeals.16 Based on experience with 340B data sharing and Maximum Fair Price refund processes, FQHC 340B has observed that while manufacturers imposed 340B transparency measures may increase manufacturers visibility, they have significantly reduced transparency for covered entities. Under the current manufacturer conditions imposed through platforms like 340B ESP and Truzo, as well as the handling of 340B claims through Beacon Channel Management for the Medicare Drug Price Negotiation Program (MDPNP), covered entities are subject to unpublished standards 12 FAQ ID: 1599, 340B Prime Vendor Program, https://www.340bpvp.com/search#q=1599&tab=faq. 13 https://www.futuroisnow.com/blog/six-degrees-of-separation 14 Section 340B of the Public Health Service Act, 42 U.S.C. 256b(a)(5)(C) 15 90 FR 36163 16 Novartis Pharms. Corp. v. Johnson, 102 F.4th 452, 462 (D.C. Cir. 2024). 5 May contain PHI conditioning access to 340B pricing. In practice, very limited portions of the 340B determination processes are shared with covered entities. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes17 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves covered entities without a mechanism to validate manufacturers determinations. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. More recently, FQHC 340B has begun receiving reports from pharmacies with no affiliation to the 340B Program (not in contract pharmacy arrangements or part of a 340B covered entity), experiencing denials of MFP refunds, due to claims being assigned 340B status, despite no 340B purchases, contract pharmacy arrangements, or 340B affiliations ever existing for the pharmacies. Again, without transparency into how determinations are made, there is little recourse for anyone involved when access to a statutorily mandated price is denied, whether it be MFP or 340B18. In the words of Brad Taylor, Best predictor of future performance is past performance. And Ive seen your past performance.19 With this in mind, it is imperative that OPA ensure that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. It is also vital that any changes from manufacturers initial plans submitted be approved by OPA and shared with covered entities with a 90-day advanced notice period before implementation. With Great Power, Comes Great Responsibility 17 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 Inflation Reduction Act, 42 USC 1320f2(d) 19 Taylor, B. (2018). Operator down 6 May contain PHI HHS and HRSAs rulemaking authority affirmed in the 2014 Orphan Drug Rule Decision by the DC District Court was limited to three specific areas: 20 The provisions within section 340B of the PHSA upon which HHS rely for its authority require more analysis. Within section 340B, Congress specifically authorized rulemaking in three places: (1) the establishment of an administrative dispute resolution process, (2) the regulatory issuance of precisely defined standards of methodology for calculation of ceiling prices, and (3) the imposition of monetary civil sanctions. Aligning with the regulatory authority to define ceiling price calculations affirmed by the orphan drug ruling, might HRSA not better interpret the taking into account any rebate or discount, as provided by the Secretary to refer to the concept of rebates defined in 42 CFR 447.518(a)(2) used for the purposes of defining the Ceiling Price calculation? Based on the plain text of the 340B statute and HRSAs long standing application of upfront 340B discounts, covered entities have an express reliance interest in the 340B program continuing to operate without the addition of a rebate model that is essentially mandatory for covered entities. From the Department of Health and Human Services, Health Resources and Services Administration (HRSA) Federally Qualified Health Centers Notice of Award Terms and Conditions. Grant Specific Term 1. States Health centers that purchase, are reimbursed for, or provide reimbursement to other entities for outpatient prescription drugs are expected to secure the best prices available to maximize results for the health center and its patients. Eligible health care organizations and covered entities that enroll in the 340B Drug Pricing Program must comply with all 340B Program requirements and will be subject to audit regarding 340B Program compliance. In the 2017 E&C hearing RADM Pedley emphasized that the intent of the program was for these entities defined in statute to be able to purchase the drugs at a discount so they can stretch those scarce federal resources with reference to the legislative history House Report and clearly describing the importance of the upfront discounts to this process. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. Remediation and Remedy Readiness It is imperative that HRSA define methods for addressing inappropriate rebate denials to align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory authority granted to manufacturers. As 20 PhRMA. v. U.S. Dep't of HHS., 43 F. Supp. 3d 28 (D.D.C. 2014). https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2013cv1501-43 7 May contain PHI stated previously, within the current MFP models used by manufacturers and their vendor Beacon Channel Management, covered entities are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.21 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication have the ability to incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for covered entities and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on covered entities would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.22 It is also requested that HRSA explicitly define that 340B rebate payment timing requirements applies to both initial and corrected status determinations. Experiences with existing manufacturerrun MFP deduplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement should be defined as applying to both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. Pilot program language should also provide these protections, ensuring covered entities are not inadvertently left without recourse if rebates are improperly denied or delayed. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins covered entities operate on and the detrimental impact of ongoing delayed payments has on patient care. Further we would encourage OPA to provide a pathway to serve as the primary mechanism for routine rebate disputes. Current ADR timelines are reported to take up to a year for the time of a review panel assignment. Given the time to complete the review and up to 180 days to return 21 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 22 340B House Report Legislative History. H.R. REP. 102-384(II). 8 May contain PHI a determination,23 covered entities could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process cannot be expected to provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. In a rebate model, covered entities ability to continue to serve their communities through scarce Federal resources accessed through the 340B Program will be contingent on HRSA clearly articulating the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. There must be a formal procedure for when a covered entitys data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. Operational and Enforcement Guardrails Any rebate model approved by HRSA should operate under uniform national standards to include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 23 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 9 May contain PHI Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police rebate denials through repeated appeals to manufacturers or the administrative dispute resolution process. Rebates Designed for Payers Not Dispensers FQHC 340B appreciates OPAs strong commitment to 340B Program integrity, including efforts intended to prevent the duplication of 340B discounts with Medicaid and Medicare drug rebate programs. However, we raise for consideration a point that was best reflected in the initial 340B Rebate model being limited to AIDS Drug Assistance Programs on a voluntary participation basis. Standard business practices, such as those reflected in the Medicaid Rebate Program...are appropriate for the development of rebate contracts and agreements between State ADAPs and manufacturers.24 Rebate mechanisms are fundamentally designed for payer systems, i.e., Medicaid agencies, Medicare, insurance plan sponsors, and Pharmacy Benefit Managers (PBMs) that have the claims infrastructure and financing capacity to receive the benefit of their discounts retrospectively. In the response and comment section of the 1998 Rebate Guidance, OPA encouraged the use of the Form CMS-R-144 (See Attachment).25 Form CMS-R-144 is the mandatory quarterly report used by State Medicaid agencies to report drug utilization data to CMS and drug manufacturers for rebate purposes, with submission due within 60 days of the end of each calendar quarter. Key fields of the Form CMS-R-144 include record ID ("FFSU" (Fee-For-Service Unit) or "MCOU" (Managed Care Organization Unit)), National Drug Code (NDC), period covered, and units reimbursed (total units for which the state paid).26 Interestingly, the CMS-R-144 Forms data submissions, codified in statute,27 form the basis of Rebate Model standard business principles and are at the aggregate data level, a fundamentally different ask from what was previously proposed for the non-ADAP 340B covered entities 340B Rebate Pilot Model Data elements.28 One notable difference in providing rebate requests at the aggregate level is it maintains the 340B eligibility 24 FR Doc No: 98-17142(June 29, 1998) - Notice Regarding 1992--Rebate Option 25 ADAPs are encouraged to use Medicaid claim form HCFA-R-144 as a model for two reasons. First, this form can be considered a standard business practice model. Second, manufacturers should find it advantageous to receive rebate claims from State ADAPs in a similar form and format to that received from the State Medicaid programs. FR Doc No: 98-17142(June 29, 1998) 26 https://www.medicaid.gov/medicaid/prescription-drugs/downloads/cms-r-144-state-invoice-data-definitions-jul-2021.pdf 27 42 U.S.C. 1927 (b)(2) - Terms of Rebate Agreement 28 90 Fed. Reg. 38165 (Aug. 7, 2025). 10 May contain PHI determination process with the covered entities, where congress assigned it, that is the covered entity shall not resell or otherwise transfer the drug to a person who is not a patient of the entity.29 Despite numerous statements from various 340B stakeholders attempting to normalize the use of rebates as a means to provide access to prices to dispensers, the vast majority of rebate models are fundamentally designed for payers, including Medicaid, Medicare, and commercial insurance plans, where the economics are starkly different from those of the covered entities. Rebate models have historically worked well for payers because they are only covering the cost of the prescription (minus any patient responsibility) and have economic models including the collection of upfront premiums or direct funding from the Federal or state governments that accommodate delays in rebate payments. Further, the payer systems are designed around the economics of drug rebate models and have built the infrastructure over decades to facilitate this type of payment construct. References to the rebate models already being found in the 340B Program are limited to AIDS Drug Assistance Programs (ADAP) and inappropriately imply that this model will work for all covered entity types. The ADAP entities that participate in the 340B program under the rebate model are those that operate predominantly as payers, not direct care providers. This is made evident in the IQVIA statement which highlights that the ADAPs when using the rebate model are acting as payers, where the ADAP would pay the pharmacy for patient copays and deductibles and submit rebate claims to the manufacturer. In the rebate model, ADAPs do not purchase drugs directly. Instead, they obtain them through a contract pharmacy, pay the pharmacy for patient copays and deductibles, and submit rebate claims to the manufacturer. According to a recent report, 45 out of 49 ADAPS (92%) used rebates, either exclusively or in combination with direct purchases. That is, rebates are the predominant mechanism ADAPs use to access 340B discounts.30 NASTAD State/Territory by Medication Purchasing Mechanism for ADAP-Funded Insurance Programs (2025)30 Medication Purchasing Mechanism Direct Purchase Dual Rebate Full-Pay Medication Program 34.69% 14.29% 51.02% ADAP-Funded Insurance Program 8.16% 14.29% 77.55% What the IQVIA report fails to highlight is that when ADAPs pay the full medication cost, the participation in 340B rebates drops drastically, with these ADAPs electing to realize their 340B savings as an upfront purchase at a rate 4.5 times higher than when the ADAP is funding insurance alone. This stark contrast reinforces our message that the economics of a rebate model are overly costly and burdensome when the organization receiving the rebates must bear the cost of not just the prescription (or deductibles and copays) but the entire cost of the drug delivery system within the pharmacy. 29 Section 340B of the Public Health Service Act, 42 U.S.C. 256b(a)(5)(B) 30 https://nastad.org/sites/default/files/2025-02/pdf-2025-adap-table-16.pdf 11 May contain PHI For example, if the ADAP is only covering the copay for their patients then in a scenario where a prescription cost $1000 and co-pay was $250, the ADAP would only bear the $250 co-pay. However, in a scenario where a Health Center and other covered entities pharmacies must bear the cost in everyday model, they would not only have to pay the $1000 acquisition cost of the medication but also the cost of delivering that medication including facilities, pharmacy staff, administrative overhead, supplies, pharmacy software etc. Again, to contrast when the ADAP functions as a payer they have already received funding to support their work and are benefiting from the 340B drug rebate to further support that program. In the case of the Health Center and other covered entities pharmacies, they must outlay all the costs for the prescription and the function of the pharmacy and subsequently wait for rebate to be paid to make them whole to the cost of the drug. In the case of the ADAPs, the 340B rebates model does not drive-up initial costs because the ADAPs are paying primarily for the co-pays, or deductible only, whereas the Health Center and other covered entities pharmacies must first purchase their medications at the much higher wholesale acquisition cost (WAC) and then wait extended periods of time to receive their rebates. While rebates are seen at independent pharmacies, including those run by health centers, they are typically offered as an incentive based on purchase volume of generics and represent an overall discount less than 5% of total inventory costs, contrast this approximately 40% to 50% of total inventory purchases that will shift to receiving discounts by rebate observed across health centers. To suggest that rebate models are common to independent retail pharmacies without acknowledging the current rebates are an additional incentive discount and not the basis of the health center pharmacies statutory pricing is flawed logic. The fact of the matter is though, we do not need to speculate the impact that a rebate model will have on 340B covered entities as dispensers, analogous results are being observed real-time with the rollout of the MDPNP Maximum Fair Prices when the manufacturers provide access to the prices to the dispensing pharmacies in the form of a rebate. In the MFP model, which benefits from instantaneous claim submissions through the pharmacys transmission of the prescription to the plan sponsor, NCPA reports 37% of members still waiting more than 22 days for payment and additional 22% waiting more than 28 days.31 These delays have meant that more than 60% of pharmacies have had to tap their savings to continue to business operations and 70% of pharmacies have had to reduce their inventory. As safety-net providers, many covered entities, including community health centers operate on extremely narrow margins and sadly do not have sufficient savings to tap with the hopes of receiving rebates to access their statutory 340B pricing at a future date. Since HRSA published the Request for Information (RFI): 340B Rebate Model Pilot Program in the Federal Register on February 17, 2026, members of the FQHC 340B team have spent hundreds of hours educating the 31 https://www.ncpa.co/pdf/2026/advocacy/mtfsurveyletter.pdf 12 May contain PHI 340B community on the RFI and Information Collection Request (ICR). Our goal was to help improve understanding of the requests to hopefully make responding more accessible to those who would be most impacted by the changes. Our RFI educational efforts were in stark contrast to the automated, alphabetically submitted campaign conducted by Patients Rising, where thousands of template letters failed to even include the most basic of customization of submitters role patient or caregiver.32,33,34 Looking back on all these sessions and conversations, it was our meeting with the members of an accountable care organization in Maine that stood out the most. After sharing strategies to calculate some of the metrics OPA requested in the RFI one of the participants stopped us not for a question but for a comment. She expressed appreciation for the information that was being provided but let us know that the differences in upfront costs they calculated were not going to mean the expense of another team member or the expense of interest from borrowing. The increase in upfront drug costs from the proposed 340B rebate model was insurmountable and they would no longer be able to afford to participate in 340B. For their health center, it meant they would cease to exist, cease to serve their community. This was echoed by others in the virtual room. When considering reliance interests, we encourage you to keep in mind the rural communities of our nation served by small health centers that are hours away from any other access to care. Salient to the point that rebate plans are best suited to payers and not the dispensers (as primary purchasers and bearers of the pharmacy system costs) is that the Centers for Medicare and Medicaid Innovation (CMMI) in launching their newest drug discount model, Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE) has moved back to receiving rebates directly from participating manufacturers.35 If the experience of effectuating maximum fair prices (MFPs) primarily through manufacturer rebates (currently Imbruvica WAC price is equal to MFP(See Attachment)),36 it would be expected that CMMI would continue the path to benefit from the upfront discount in remittances paid to the pharmacies for qualifying Part D prescriptions. No pun intended, CMMI restores BALANCE with its GLP-1 discount pricing model, by returning to payer-based rebate payments, allowing manufacturers and state and federal payers, those directly involved and with the greatest financial stability, to settle discounts they negotiated, without requiring dispensers to act as reluctant financiers of national cost savings measures. Instead, for both payers, Medicare Part D and Medicaid, CMS has elected to create access for enrollees who have obesity or related metabolic conditions to GLP-1 therapy through a program 32 https://340breport.com/more-than-1100-identical-comments-flood-hrsas-340b-rebate-rfi-all-linked-to-pharma-funded-patient-group/ 33 https://www.patientsrising.org/action/340b-rebate-model/2026 34 https://www.patientsrising.org/hubfs/2026-0227_340B%20Rebate%20Rule%20Comment%20Toolkit_FINAL.pdf 35 https://www.cms.gov/priorities/innovation/innovation-models/balance 36 Pharmacyclics LLC & Johnson & Johnson. (Oct 2025). IMBRUVICA: Adjusting WAC when Maximum Fair Price (MFP) comes into effect will remove any potential refund delays [Infographic/Flyer]. 13 May contain PHI that is voluntary of States, Medicare Plan Sponsors, and drug manufacturers, with negotiated discounts being provided in the form of rebates to the state and Federal payers.37,38 We would encourage OPA to reflect on CMMIs shift away from involving dispensers in overly complex purchase and payment schemes with delayed access statutorily mandated discounts through rebates to covered entity dispensers, when considering whether to proceed with a future version of a 340B Rebate Model Pilot Program. Continued Support for 340B Integrity: Medicaid Considerations To support the transparency goals of covered entities and manufacturers alike, FQHC 340B encourages HRSA to put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing a Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File could be enhanced to provide 340B covered entities with a mechanism to support compliance with the duplicate discount prohibition. A Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). While the RFI appears to suggest that manufacturer processes in the 340B rebate pilot could ensure the prevention of 340B and MDRP duplicate discounts, respectfully, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.39 We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique 37 https://www.cms.gov/priorities/innovation/files/balance-state-medicaid-rfa.pdf 38 https://www.cms.gov/priorities/innovation/files/balance-part-d-plans-rfa.pdf 39 42 U.S.C. 256b(a)(5)(A)(emphasis added). 14 May contain PHI BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.40 Additional Medicaid Considerations Health centers are concerned that the proposed rebate model will create operational burdens when billing Medicaid. From the previous rebate model pilot, some states provided guidance on how they expected covered entities to bill. Most Medicaid departments that responded required covered entities to submit the 340B ceiling price when billing Medicaid for prescriptions. Health centers rely on wholesaler price files to provide the acquisition cost of the drug to Medicaid at the time of dispensation. In a rebate model, the price file will give the WAC price instead of the 340B ceiling price. Pharmacy software is not developed to allow the use of an external price file which will require health centers to manually insert the 340B ceiling price for each Medicaid claim which is operationally impossible. Adding to the operational burden is the variation between state policies. Health centers who treat patients from different states may have to tailor operations for each Medicaid policy. The requirement of Medicaid departments for covered entities to submit 340B ceiling price is in direct opposition to 42 CFR 447.518(a)(2) which requires Medicaid FFS programs to reimburse covered entities based on Actual Acquisition Cost (AAC). AAC is defined as the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers.41 The definition indicates that Medicaid departments must pay the price paid for the drug which will be WAC. In addition, Departments of Medicaid have expressed concerns about the implementation of a 340B rebate model. Pennsylvania Department of Human Services commented, "If the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.42 The Oregon Health Authority commented, If Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.43 Proposal to Leverage the 340B Data Repository to accomplish Duplication of MFP FQHC 340B has had the pleasure of engaging with CMS in early one-on-one stakeholder sessions to provide input on the 340B Data Repository intended for the deduplication of 340B 40 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438/subpart-A/section-438.3 41 42 CFR 447.502 42 https://www.regulations.gov/comment/HRSA-2025-0001-0095 43 https://www.regulations.gov/comment/HRSA-2025-0001-0980 15 May contain PHI and Medicare Part D Inflationary Penalties as described in CY 2026 Medicare Physician Fee Schedule.44 To prevent the duplication of efforts we suggested to CMS and now again to OPA that the 340B Data repository be leveraged for both the Deduplication of Inflationary Penalties and Maximum Fair Prices. This would create both government efficiency and reduce administrative burden on the nations manufacturers and safety-net providers. In this model, manufacturers would have access to the data they need for MFP-340B de-duplication under CMS standards (an authority not granted in 340B statute to OPA)45 and covered entities would continue to access 340B discounts prospectively as the compliance concern that the rebate pilot was introduced for has been thoroughly addressed. CMS has already made clear its intention to propose mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking.46 CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.47 If both a 340B rebate model and a 340B claims repository are made mandatory, covered entities will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statute was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for community health center: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as community health centers, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.48 The negative implications of a 340B rebate model are well documented and fail to align with legislative intent. 44 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 45 Add 340B Statute Reference 46 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 47 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 48 H.R. REP. 102-384(II) 16 May contain PHI Auditable Records Concerns A critical consideration in implementing a nationwide 340B Rebate Pilot Model, particularly one that conditions access to statutorily defined 340B pricing on mandatory covered entity participation, is that shifting the point at which 340B status is determined fundamentally alters the operational framework for auditable recordkeeping. The scope and complexity of this change are significant and, to date, likely not fully appreciated. The statutory prohibitions on duplicated discounts and diversion, both reference conditions respect to a drug that is subject to an agreement under this section referring the price for each covered outpatient drug subject to the agreement that, according to the manufacturer, represents the maximum price that covered entities may permissibly be required to pay for the drug (referred to in this section as the ceiling price), and shall require that the manufacturer offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.41 Until access to the 340B Ceiling price is received by a covered entity, a drug purchased by the covered entity is not a 340B drug and therefore not subject to 340B statutory requirements. HRSA requires 340B covered entities to maintain auditable records. In a potential rebate model, covered entities would need to crosswalk all pilot model drugs purchase data, administration, dispense, and claims data to the manufacturer rebate payments. This immense and manual process introduces significant operational burden in maintaining complete auditable records. A drugs pedigree is not 340B unless and until the covered entity receives a discount. At the point a 340B ceiling price is received, covered entities are then required to maintain auditable records. Because the 340B pedigree of a drug would not be established until the rebate is received, a 340B rebate model will significantly increase the burden on covered entities in the creation and maintenance of auditable records. To maintain accurate auditable records in a 340B rebate model health centers and other covered entities would be required to crosswalk purchases to manufacturers rebate payments and reconcile and record rebates for 340B transaction, creating significant administrative burden and complicating the ability to respond to standard audit data requests. Because 340B wholesaler accounts will have a mixed pedigree of 340B and non-340B drugs-based rebates approved or denied by manufacturers, health center and other covered entities will encounter difficulty replying to HRSA audit requests. Section 5(C) of the Sample HRSA 340B Audit Data Request List 49 requires a list of all 340B drug purchases. Currently, covered entities can download an accurate list of 340B purchases from their wholesaler platforms. In the rebate pilot, wholesalers will not have access to information related to retrospective rebate determinations, so it will fall to the covered entities to create a system to take their wholesaler 49 https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered-entities.pdf 17 May contain PHI purchase data and reconcile it to rebate payments to create an auditable purchase record. Given that in the previous pilot proposed by OPA, the rebates were to be paid at the unit level as drugs are dispensed, this makes the process even more complicated and likely will result in situations where only portions of a purchased item are defined as 340B within a single package. The rebate purchase records will become even more complicated in the event of a 340B program audit. In a HRSA audit, every purchase record for each drug subject to a rebate will have to be traced to a rebate to ensure a rebate was paid prior to submitting purchases to HRSA. In addition, every targeted claim selection chosen during a HRSA audit for drugs subject to a rebate model will need to have the rebate traced through the manufacturers chosen pathway to ensure the rebate was paid, effectively changing the drugs pedigree to 340B. Covered entities will also now be required to perform the additional compliance task of updating the records for every claim processed. Currently, the manufacturers selected vendor Beacon Channel Management does not provide prescription numbers in the 340B rebate reconciliation files. Instead, health centers will have to comb through reconciliation files and historical upload files to tie together Beacon ID, Claim ID, and prescription number. With health centers having data uploads from clinics, entity-owned pharmacies, and contract pharmacies with upload cadences ranging from daily to bi-weekly, the sheer volume of files that will need to be reviewed to determine a prescription number will grow exponentially as the rebate model continues. From health center experience with the Medicare Transaction Facilitator, cross-walking a claim can take between 15-30 minutes depending on the availability of data across the two systems. In the case of cross-walking claims to the MTF, we have the advantage of not having to seek the claim needle in the file haystack and expect the reconciliation process for 340B rebates to be even more burdensome. See attachment Beacon 340B Rebate Pilot Claim to Payment Reconciliation Basics for a detail process description. Once a claim ID and rebate status is identified, the health center must either go and update their records including clinic logs and pharmacy software to the manufacturer assigned pedigree of the drug or have a separate set of information outside of the current medical records, including pharmacy software, to serve as 340B auditable records. In the scenario where the health center staff must update the records, this last step will be time-consuming, manual, and burdensome. It also invites the opportunity for human error. In the second scenario, auditable records are no longer in a consistent and reportable place. A third option exists for health centers to pay vendors to reconcile the 340B rebate claims for them, but this option adds even more cost and again has the issue of auditable records no longer being housed in the health center medical records and pharmacy software. In response to HRSAs RFI asking whether and how a rebate pilot would affect program integrity, the answer is yes; it would negatively impact covered entities ability to maintain auditable records. With respect to what guardrails can strengthen integrity while minimizing burden, FQHC 340B 18 May contain PHI urges HRSA to leverage CMSs 340B Data Repository approach, limit datasets, or at minimum, adopt a government contracted neutral clearing house with standardized denial/payment rules that preserve auditable records without forcing entities to reconstruct claim-level pedigrees across fragmented platforms. Real World Rebate Implications A reminder of how narrow margins truly are for safety-net providers and how impactful a change to purchasing at WAC could have, the Minnesota Department of Health, 340B Covered Entity Report highlights 50 that Federally Qualified Health Centers (FQHCs), their lookalikes, and tribal health centersgenerated the least net 340B revenue. This low net revenue is attributed to the health centers focus on serving low-income and uninsured patients, often providing drugs for free or at reduced rates. The report goes on to state that for FQHCs and other grantee entities, the 340B program primarily helps reduce losses rather than generate significant net revenue. The report explains when a Covered Entity provides a 340B drug for free or at a reduced ratea requirement for FQHCs that serve a high number of low-income or uninsured patientsit may lose money even at the discounted rate. When quantified in the context of overall state 340B program revenues, the health centers practices generated the least net 340B revenue with less than 1% of the statewide total disproportionate to the approximately 6.5% of 340B program purchases FQHC represent nationally, according to the Office of Pharmacy Affairs.51 CE Type 2024 Total Purchases % of Total Purchases FQHC $5,269,361,995.00 6.5% Hospital $70,681,501,882.00 86.8% Ryan White $2,875,855,420.00 3.5% STD Clinics $2,256,706,191.00 2.8% Other Grantees $350,443,395.00 0.4% Grand Total $81,433,868,883.00 100.0% The Minnesota report is reminder that health centers pass on such high volumes of discounts that some are already operating at losses when it comes to the 340B Program. These operating losses, sustained in an effort to ensure patient access, regardless of ability to pay, are before the 340B Rebate Pilot Model would mandate them to pay what is essentially the highest price in the market and then wait at least a month (based on MFP experience) to receive access to their discounted prices. Surely this is not what congress intended.52 In giving these "covered entities" access to price reductions the Committee intends to enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.53 50 Minnesota Department of Health. 340B Covered Entity Report: Report to the Minnesota Legislature, 2025. Health Economics Program. (February 27, 2026). https://www.health.state.mn.us/data/340b/docs/2025report.pdf 51 OPA, 2024 340B Covered Entity Purchases, https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases 52 H.R. REP. 102-384(II) 53 Id. 19 May contain PHI The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity."54 We thank you again for the opportunity to respond to the Notice. We would appreciate any opportunity to discuss our comments further. Best Regards, FQHC 340B Compliance LLC Felicity Homsted Logan Yoho Felicity Homsted Chief Executive Officer Logan Yoho Director of Advocacy & Education 54 Id. Attachment 1: AbbVie V HHS, Challenging Patient Definition: Case 1:26-cv-01190 Filed 04/08/26 [Reference Page 3] Case 1:26-cv-01190 Document 1 Filed 04/08/26 Page 52 of 72 150. Further, had an unusual and atypical increase in 340B purchases of three Immunology Products (Humira, Skyrizi, and Rinvoq). purchase of these products increased significantly and anomalously. For instance, purchases in the first three quarters of 2024 exceeded purchases made during the entirety of 2023; and purchases of some products had increased by as much as 63.9% in the first three quarters of 2023, as compared to the entire prior year. 151. Voluntary claims data received prior to 2023 (AbbVie has not received data from since then) further revealed a high number of instances where had claimed 340B discounting on a specific unit of a drug that was also claimed by another covered entitysometimes even two other covered entities. The majority of such duplicate-dispense claims were requested by other 340B covered entities under Health System. 152. For example, as shown in the below figure, The and -three unique covered entities under the Health Systemall submitted the exact same claim for reimbursement. The three submissions bear the same date of service, same provider ID, same prescription number, same NDC, and same quantity. The only difference is the covered entity claiming the 340B discount. Figure 3: 3 unique These 5 claim level attributes identify the same claim covered entities Date of service(dispense date), service provider id (pharmacy npi). r number, ndc and quantity nder i noumber m 159073311-893460895460856820-580cDo66 104380362 5064803800622873050890287234616421=80d123843474627872 9546e451856181adc58ac0e66 1043382302 04862400380868278710450899028947234050421489823804340786277867 PRCOD074055402 104332302 22288710e5 153. This data reinforced AbbVie's concerns that covered entities are using HRSA's overly broad definition of "patient"one that permits multiple covered entities within 52 Case 1:26-cv-01190 Document 1-6Filed 04/08/26 abbvie Page 8 of 139 pg 245/393 below. Is 340B purchases of Immunology Products have increased significantly during the first 3 quarters of 2024 as compared to the entirety of 2023 with nine of thirteen NDCs growing by 36% or more. Total Number of Packages by Quarter by NDC-11 Q1-Q4 2023 Q1-Q3 NDC Description NDC 2023 Q12023 Q2 2023 Q32023 Q4 2024 Q1 2024 Q2 2024 Q3 2024 % HUMIRA 40 MG/0.8 ML SYRINGE PS=2 Total 00074-3799-0243 30 49 Total Growth 43 165 121 HUMIRA PEN 40 MG/0.8 ML PS-2 70 34 285 00074-4339-02 107 42.1% 57 58 31 303 154 HUMIRA(CF) 20 MG/0.2 ML SYRING PS=2 73 38 325 5.8% 00074-0616-02 14 5 22 16 58 HUMIRA(CF) 40 MG/0.4 ML SYRING PS=2 40 34 33 107 00074-0243-02 45.8% 136 34 56 139 425 222 197 251 670 HUMIRA(CF) PEN 40 MG/0.4 ML PS=2 36.6% 00074-0554-02 2.377 1,399 958 1.162 5,896 HUMIRA(CF) PEN 80 MG/0.8 ML PS=2 1,800 2,060 2.405 6,265 5.9% 00074-0124-02 96 63 101 177 HUMIRA(CF) PEN CRHN-UC-HS 80MG PS=3 427 247 260 201 708 39.7% 00074-0124-0335 17 19 17 88 43 26 SKYRIZI 150 MG/ML PEN PS=1 30 99 11.1% 00074-2100-01 163 112 120 216 119 391 SKYRIZI 150 MG/ML SYRINGE PS=1 00074-1050-0146 330 404 1,125 45.7% |31 43 33 203 39 34 79 242 16.1% SKYRIZI 360 MG/2.4 ML ON-BODY PS=2 00074-1070-01 37 31 126 271 565 445 518 E09 1,566 $3.9% RINVOQ ER 15 MG TABLET PS=30 00074-2306-30 249 165 166 273 853 432 477 08t RINVOQ ER 30 MG TABLET PS=30 1,389 38.6% 00074-2310-30 226 163 211 379 979 564 635 685 1,884 00074-1043-28 74 48.0% RINVOQ ER 45 MG TABLET PS=28 34 124 211 493 269 253 248 770 36.0% 's 340B purchasing volume increased from 2023 to 2024 despite its contract pharmacy use dramatically declining in the same time period. AbbVie also reviewed the encrypted voluntary claims data submitted by to the 340B ESPTM platform from February 1, 2022, to April 23, 2023. AbbVie found that there were an anomalously high number of instances where submitted a chargeback request on an individual dispense that was also claimed by another covered entity. The vast majority of these duplicate dispense claims were requested by another 340B covered entity under specifically and These trends led AbbVie to reach out to about potential diversion and duplicate discounting. AbbVie has extensively engaged with on these issues since March 2025. AbbVie's inquiry began on March 6, 2025, when AbbVie sent a letter to lidentifying the above trends and asking questions about Mount Sinai's compliance with the 340B program's prohibitions on diversion and duplicate discounting.29 AbbVie spoke with Fepresentatives on a Zoom call on April 4, 2025. During that call, AbbVie raised concerns about diversion and duplicate discounting. In a follow-up email on April 11, 2025, AbbVie sent a narrowed list of questions in the interest of facilitating written responses from brovided more details on their patient eligibility policies in an email on April 12, 2025, and promised further responses. responded to AbbVie on April 15, 2025, with a letter that, while reiterating answers from the April 4 call, failed to answer the majority of AbbVie's questions from either its initial S March 6 letter or the narrowed set of questions emailed on April 11. answer those questions on the ground that they exceeded the bounds of a "good faith" inquiry. In a follow lexpressly refused to up letter on April 28, 2025, AbbVie reminded that its questions were well within the scope of a good faith inquiry under HRSA's non-binding guidance, as they all related to whether products. 29 We have attached our correspondence with Mount Sinai to this letter. 30See 61 Fed. Reg. at 65,406, 65,409. NOT SUBJECT TO RELEASE OR DISCLOSURE UNDER FOIA OR OTHERWISE 7 Case 1:26-cv-01190 Document 1-6 Filed 04/08/26 Page 48 of 139 pg 285/393 April 15, 2025 RE: Purchases of AbbVie Products by The Hospital, inclusive of associated child sites C Dear Mr. Scheidler, We appreciate the partnership and the productive good faith discussions we had on the above matter on our 4/4/2025 zoom call. Together, we scheduled this call in response to your March 6 2025 letter for the purpose of addressing the two main questions posed in that letter, namely, the reasons for the increased purchases of outpatient covered drugs in 2024 and the alleged duplicate discount claims from the 340B covered entities within the Health System ( As we noted on the call, we agreed to send a written response within two weeks to memorialize the explanations we provided on our call. As we explained on the call, the main driver for the increase in purchases last year has been the growth of our specialty pharmacy. We have seen steady growth of our specialty pharmacy across the health system over the past several years as we have expanded both our physical capacity and secured additional access to payor networks. Once we expanded capacity and payor access, we focused on educating our employed physicians about the excellence of the new specialty pharmacy program. As we discussed on the phone, unlike a generic specialty pharmacy, the specialty pharmacy provides our employed physicians and our patients with a high quality service with ready access to own employed and trained pharmacists who in tum communicate directly with the physicians. Moreover, the patients' orders are integrated into and part of the respective patients' hospital medical records enabling both the pharmacists and the physicians to review the entirety of the patients' medical record to better assess the interactions of all the patient's medications and health needs. Indeed, this integration of the pharmacy services into the patient's overall medical care within was one of the main purposes behind the establishment of the specialty pharmacy. Given this high quality, integrated service focused on optimizing patient care, it is no surprise that many if not all of the physicians have sought to transition the hospital patients to our specialty pharmacy. We also noted on our call that maintains one of the largest and best known gastro and dermatology departments in the country. Presumably, AbbVie has sought to market its excellent products to world-renowned clinicians and the company's marketing initiatives has apparently been successful as well. Accordingly both specialty pharmacy initiative and Abbvie's marketing initiatives explain the growth of the program at You also raised questions about claims that were initiated by a clinician from one location and then changed to another location. We explained that this would never result in duplicate dispense claims, since the Order was issued by a single physician who happen to practice at more than one location within the system. But, they are submitting a single order to the patient and that claim is only paid once. Your records presumably confirm that the claim was only paid once (you never suggested otherwise nor did you provide any data that the claim was paid more than once). Thus, we explained that any errors in your data regarding the correct location emanated from the deficiencies with the external ESP program that Abbvie required us to use, not the system. More specifically, as we discussed, maintains its own process for reviewing and reprocessing 340B claims. reviews all claims (both 340B eligible and ineligible) through its own software after the TPA determines 340B eligibility. As a result of this review, claims are submitted on a weekly basis to the TPA to be reversed and reprocessed as 340B or non-340B after they are initially processed. All of these claims and subsequent reversals are (or in AbbVies case) had been submitted to ESP (while AbbVies policy still allowed/applied to ESPs process for removing duplicates and correctly applying reversals to initial submissions is beyond our knowledge and control, but apparently it was inadequate. We are only able to validate that the data we are submitting to ESP is accurate. In fact, we and we were surprised to learn that ESPs system would even allow an identical dispense to be claimed by multiple covered entities. This is not possible in our TPA. To illustrate how we audit for claims to meet our patient definition and why we may need to reverse and reprocess a claim as described above, we gave the example of a provider who may receive a refill request while physically located at a different covered entity (Hospital A) from where they saw the patient for whom the prescription is being written (Hospital B). Our EMR will assign the location of the Rx to the location the physician is physically logged in to at the time (Hospital A) even though they actually saw the patient at a different covered entity (Hospital B). It is only after we run this claim through our own internal software that we know the claim should indeed qualify under Hospital B, not Hospital A because that was where the patient was actually seen. Our system corrects the location, but does NOT generate a second claim. Nor would such a claim be paid. We believe that the above reflects our telephone conversation and addresses the two issues raised in your March 6 good faith inquiry letter regarding increased purchases and duplicate discounts. We further maintain that we have appropriately engaged with this good faith inquiry and provided the relevant responsive information both on our call and in this letter. As we noted on our call, we maintain that the additional detailed questions in your letter far exceed a good faith inquiry. prides itself on the integrity of its 340B program and has devoted substantial resources to ensure compliance with all the various regulatory requirements. We look forward to working with AbbVie as we continue to grow our own specialty pharmacy footprint to serve our communities consistent with the goals and requirements of the 340B program. We have also included examples of how we are using our 340B savings to that same end. Please let us know if theres anything else we can provide to resolve this matter. _340B_Progra m_Profile_Communi Kind regards, Senior Director, 340B Health System CC: , Senior Vice President & Chief Financial Officer , Senior Vice President & Senior Associate General Counsel , Senior Vice President & Chief Pharmacy Officer Case 1:26-cv-01190 Document 1-6 Filed 04/08/26 Page 49 of 139 pg 286/393 Attachment 2: Form CMS-R-144 [Reference Page 9] CMS-R-144 (Exp. 06/30/2027) OMB No. 0938-0582 Form CMS-R-144 is required from States quarterly to report utilization for any drugs paid for during that quarter. The use of Form CMS-144 by States is considered mandatory under the authority of Section 1927 of the Social Security Act. Under the Privacy Act of 1974 any personally identifying information obtained will be kept private to the extent of the law. According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0938-0582. The time required to complete this information collection is estimated to average 46 hours per response, including the time to review instructions, search existing data sources, gather the data needed, and complete and review the information collection. If you have comments concerning the accuracy of the time estimate or suggestions for improving this form, please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Mail Stop C4-26-05, Baltimore, Maryland 21244-1850. MEDICAID DRUG REBATE INVOICE DATE: / / STATE OF PAGE OF ____ MM DD YYYY (Medicaid Agency) Source: State Agencies Target: Manufacturers Manufacturer: STATE CODE: INVOICE NO.: _____ Address: PERIOD COVERED: _______(QYYYY) City: State: Zip: ______ NDC Number FDA Product Name Unit Rebate Amount Record ID Units Reimbursed Rebate Amount Claimed Number of Prescriptions Medicaid Amount Reimbursed Non- Medicaid Amount Reimbursed Total Amount Reimbursed Filler TOTALS: *Please remit this amount to: (Medicaid Agency) Address: Attn: Attachment 3: Pharmacyclics LLC & Johnson & Johnson. (Oct 2025). IMBRUVICA: Adjusting WAC when Maximum Fair Price (MFP) comes into effect will remove any potential refund delays [Infographic/Flyer]. [Reference Page 12] 1 IMBRUVICA ADJUSTING WAC WHEN MAXIMUM FAIR PRICE (MFP) COMES INTO EFFECT WILL REMOVE ANY POTENTIAL REFUND DELAYS Pharmacyclics LLC 2025 Johnson & Johnson and its affiliates 2025 10/25 US-IMBC-250172 CMS = Centers for Medicare & Medicaid Services; MTF = Medicare Transaction Facilitator; WAC = wholesale acquisition cost. Reference: 1. Medicare Drug Price Negotiation Program: negotiated prices for initial price applicability year 2026. CMS. August 2024. Accessed August 27, 2025. https://www.cms.gov/files/document/fact- sheet-negotiated-prices-initial-price-applicability-year-2026.pdf *This list is not exhaustive, and other DE action items may exist. These action items are not mandatory and are only best practice suggestions. When MFP comes into effect January 1, 2026.1 The assignment of an MFP for select drugs will change the drug reimbursement process, and DEs will have to wait for a manufacturer refund, the difference between WAC and MFP, after dispensing an MFP drug. IMBRUVICA intends to adjust WAC to MFP when MFP comes into effect on January 1, 20261. The manufacturer refund will be zero. AbbVie is committed to minimizing access barriers TWO SCENARIOS FOR CONSIDERATION DE action items for effectuation*, WAC is greater than MFP WAC is equal to MFP Await manufacturer refund after dispensing Yes No Reducing the IMBRUVICA WAC to the MFP removes the need for DEs to receive an MFP refund, which may result in less operational concerns and removes any potential for refund delays For more information on MTF enrollment and the Medicare Drug Price Negotiation Program, please review helpful resources for pharmacies and DEs directly from the CMS website here: www.cms.gov/priorities/medicare-prescription-drug-affordability/overview/medicare-drug-price-negotiation- program/pharmacy-and-dispensing-entity-resources CMS may be contacted by phone at: 877-MTF-4HLP (877-683-4457) or email at: MFPMedicareTransactionFacilitator@cms.hhs.gov It is important to note that CMS guidance is ongoing, and that many unknowns still exist. Information communicated on the website is subject to change in the future. For more information about the IMBRUVICA MFP, please email ImbruvicaIRA@Abbvie.com Attachment 4: Beacon 340B Rebate Pilot Claim to Payment Reconciliation Basics [Reference Page 17] info@fqhc340b.com www.fqhc340b.com Beacon 340B Rebate Pilot Claim to Payment Reconciliaon Basics Step 1: Download Receipt File Before Subming Claims Step 2: Download Claim File from Beacon Account Balances Reports info@fqhc340b.com www.fqhc340b.com Beacon 340B Rebate Pilot Claim to Payment Reconciliaon Step 3: Match Receipt File Beacon IDs to Claim File Claim IDs Claim ID = CLM- + Beacon ID e.g. Beacon ID = ABCDE123 then Claim ID = CLM-ABCDE123
HRSA-2026-0001-2163Positive Impact Health Centers, Inc.2026-04-20T04:00Z25,877 chars
See attached file(s) PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA-2026-03042: Comments of Positive Impact Health Centers, Inc. in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Positive Impact Health Centers, Inc. (PIHC) appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a proposed 340B Rebate Model Pilot Program (Rebate Model Pilot). PIHC strongly opposes any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B Drug Pricing Program. PIHC is a Ryan White HIV/AIDS Program grantee headquartered in Atlanta, Georgia, with clinical operations in DeKalb, Gwinnett, Cobb, and Clayton Countiesall designated Tier 1 Ending the HIV Epidemic (EHE) jurisdictions. These four counties are among the highest-burden HIV communities in the United States: Georgia consistently ranks among the top five states in the country for new HIV diagnoses, and the Atlanta metropolitan area accounts for a substantial share of those diagnoses. PIHC serves approximately 10,000 individuals annually, primarily people living with HIV (PLHIV), individuals at increased risk for HIV acquisition who are engaged in pre-exposure prophylaxis (PrEP) services, and patients requiring prevention and treatment services for sexually transmitted infections (STIs). The substantial majority of PIHCs patient population is low-income, uninsured or underinsured, and medically underservedindividuals for whom access to affordable, timely medications is not a convenience but a clinical and public health necessity. PIHC has participated in the 340B Drug Pricing Program as a covered entity for nearly a decade and has made long-term investments in pharmacy infrastructure, staffing, and patient programs specifically built around the programs upfront discount structure. The 340B programs upfront discounts directly enable PIHC to sustain clinical care, wraparound support services, and medication access programs for patients who would otherwise go without. Any modification that replaces or supplements upfront discounts with a rebate-based payment model would cause immediate, measurable, and serious harm to PIHCs patients and to PIHCs ability to PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 contribute to controlling the HIV epidemic in Georgiaa state where an estimated 20,000 people living with HIV remain out of medical care and at risk of preventable deterioration, transmission, and death. As detailed below, a Rebate Model Pilot would impose severe cash flow constraints, substantial administrative and operational burdens, data security risks, and direct patient harm on PIHC and similarly situated safety-net providers. These consequences are neither hypothetical nor speculativethey follow directly from the structural mechanics of a rebate model applied to a resource-constrained nonprofit healthcare organization serving one of the most vulnerable patient populations in the United States. The costs of these harms would not disappearthey would be redistributed to Medicaid, Medicare, Ryan White, and other publicly funded programs as patients who lose access to preventive care and consistent HIV treatment require more expensive interventions. Ultimately, taxpayers bear the cost of a weakened safety net. For the reasons set forth herein, PIHC respectfully requests that HRSA abstain from implementing a Rebate Model Pilot and instead collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as the appropriate, cost-effective, and operationally sound alternative to address duplicate discount concerns. I. PATIENT HARM The 340B programs most fundamental purpose is to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. 42 U.S.C. 256b. For Ryan White HIV/AIDS Program grantees like PIHC, this purpose is not an abstractionit is the operational reality that makes comprehensive HIV care possible for thousands of patients who cannot afford it otherwise. PIHCs patient population faces intersecting and compounding barriers to healthcare access: limited or no insurance coverage, housing instability, food insecurity, transportation challenges, behavioral health needs, and co-occurring substance use disorders. These barriers make consistent adherence to HIV treatment regimens clinically precarious. For people living with HIV, viral suppression depends on uninterrupted access to antiretroviral therapy (ART). Disruptions to medication accesseven brief onescan result in viral rebound, drug resistance, and increased risk of HIV transmission to others. The human cost of treatment interruption falls first on the patient; the financial cost falls on the public programs that fund the more expensive care that follows. A Rebate Model Pilot would directly undermine these outcomes. Under a rebate model, PIHC would purchase covered drugs at wholesale acquisition cost (WAC) and await reimbursement through a retrospective rebate processmeaning its pharmacy systems would not reflect the true discounted cost of medications at the point of sale. PIHC could not reliably pass discounts to patients at the point of dispensing without certainty that a rebate would be received timely and in full. The consequence is direct: patients who currently receive medications at reduced or no cost would face higher out-of-pocket costs, or PIHC would absorb the difference without assurance of reimbursement and begin cutting services. Either outcome harms patients immediately. PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 PIHC also relies on contract pharmacy arrangements to extend medication access to patients who cannot reach PIHCs clinic locations due to geography, transportation barriers, or scheduling constraints. A rebate model would impose significant additional administrative complexity on contract pharmacy partners, increasing the likelihood that those partners would reduce or terminate participation in PIHCs 340B program. Any contraction of PIHCs contract pharmacy network would directly reduce medication access for patients who are already among the hardest to reachoften the same patients whose treatment gaps pose the greatest risk of onward HIV transmission. The services PIHC currently funds through 340B savings extend well beyond medications: case management, transportation assistance to medical and prevention appointments, medication adherence programs, housing assistance referrals, behavioral health services, and insurance enrollment navigation. If 340B savings are delayed, reduced, or placed at risk by a rebate model, these wraparound servicesoften the difference between a patient remaining engaged in care or falling out of the care continuum entirelywould be the first to be cut. Every patient who falls out of care represents a preventable public health failure and a cost that will be borne elsewhere in the healthcare system. The United States has committed, through the Ending the HIV Epidemic initiative, to reducing new HIV infections by 90 percent by 2030. PIHC operates in four of the highest-priority jurisdictions for achieving that goal. A Rebate Model Pilot that weakens PIHCs capacity to deliver consistent, affordable HIV care in those jurisdictions does not merely harm individual patientsit undermines a national public health strategy. The cost of that failuremeasured in new infections, hospitalizations, advanced disease, and lost productivitywill be borne by patients, their families, and taxpayers. II. FINANCIAL IMPACT OF INCREASED DRUG ACQUISITION COSTS AND CASH FLOW DISRUPTION PIHCs 340B program generates substantial net annual savings derived from the difference between WAC and 340B ceiling pricing across its covered drug portfolio. Those savings are not held in reservethey are fully committed to patient services on an ongoing basis, reinvested directly into clinical operations and the programs described above. Under a rebate model, PIHC would be required to finance the entire WAC-to-ceiling-price gap on a monthly basis while awaiting reimbursement from manufacturers who have every financial incentive to delay, dispute, and deny claims. PIHCs unrestricted cash reservesfunds not committed to grants, restricted donations, or other obligationsare insufficient to absorb that working capital requirement without creating material financial risk to the organization and, by direct extension, to the patients who depend on it. The financing gap under a rebate model is not simply the interval between purchase and rebate receipt. It encompasses: (1) the time required to complete monthly 340B reconciliation after the close of each month; (2) the time to compile and submit complete rebate claims to each participating manufacturers platform; (3) manufacturer processing time; (4) the time to resolve denials, disputes, and discrepancies; and (5) actual rebate payment time. Across these stages, the total financing gap could easily extend to 60 to 90 days or longera period during which PIHC would be financing drug costs at WAC with no certainty of timely or full PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 reimbursement. For a nonprofit organization serving uninsured and underinsured patients, a gap of that magnitude is not an inconvenienceit is an existential financial threat. PIHCs current wholesaler agreements are calibrated to the upfront discount model, not to the working capital requirements of WAC-upfront purchasing. A shift to a rebate model would require PIHC to either renegotiate those termswith no guarantee of successor absorb the cash flow gap through borrowing, reserve drawdown, or service reduction. Borrowing to finance drug costs that Congress already entitled PIHC to receive at ceiling prices is not a solution; it is a transfer of financial burden from manufacturers to safety-net providers and the patients they serve. PIHC further notes that the RFIs proposed ten-calendar-day rebate payment standard does not resolve the fundamental cash flow problem. That standard applies only after a complete claim is submittedand the time required to compile a complete claim is itself a significant operational burden. In practice, the full sequence of WAC payment, reconciliation, claim submission, and rebate receipt would span weeks to months for any organization managing a meaningful volume of 340B transactions across multiple manufacturers and dispensing channels. III. IMPLEMENTATION AND ADMINISTRATIVE BURDEN PIHC manages its 340B compliance program in-house, without reliance on for-profit third-party administratorsa model that reflects PIHCs commitment to transparency, accountability, and stewardship of the 340B benefit. Unlike large health systems with dedicated compliance departments, PIHC operates with a lean internal compliance team that has no capacity to absorb the constantly shifting requirements of a manufacturer-by-manufacturer rebate process without redirecting hours from patient care. A Rebate Model Pilot would force PIHC to either hire additional staff whose salaries come out of patient care resources or contract with commercial entities that would profit from complexity Congress never intended. Under a rebate model, PIHC would be required to perform a materially expanded set of administrative functions for each covered drug subject to the pilot, including: (1) individual claim preparation and submission to each manufacturers platform or designated vendor; (2) denial tracking and appeals management across multiple manufacturers with potentially divergent requirements; (3) reconciliation of rebate receipts against claims submitted; (4) audit support and documentation maintenance for each manufacturers audit requirements; and (5) management of multiple manufacturer portals, login credentials, and platform-specific workflows. These obligations would be required in addition tonot instead ofPIHCs existing 340B compliance requirements under the upfront discount model. The staffing implications are direct and immediate. PIHC would require additional dedicated staff, or substantial reallocation of existing pharmacy and compliance staff hours, to manage rebate operations. To the extent current clinical staffincluding pharmacists and care managerswould need to redirect time from patient care to administrative rebate functions. PIHCs clinical capacity would contract accordingly: fewer patients served, longer wait times, and reduced access to medications and services on which peoples health and lives depend. Beyond staffing, PIHC would incur significant one-time and recurring technology costs to build or substantially modify systems capable of tracking claims at WAC pricing, submitting rebate requests across PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 multiple manufacturer platforms, and managing the denial and dispute processes that a rebate model inevitably generates. Every dollar spent on these systems is a dollar not spent on patient care. PIHC estimates that the incremental administrative costs of a Rebate Model Pilotincluding additional staffing, technology investment, legal and compliance review, and ongoing operational overheadwould consume a material percentage of PIHCs current annual 340B net savings. Because those savings are already fully committed to patient services, any reduction is a direct and immediate reduction in care capacity. There is no financial cushion available to absorb these costs without cutting services to the patients Congress created the 340B program to protect. IV. DATA SECURITY AND PROPRIETARY DATA CONCERNS A Rebate Model Pilot would require PIHC to transmit claims-level, prescription-level, and potentially patient- linked data to pharmaceutical manufacturers and their designated vendors. For an organization serving a population for whom confidentiality of HIV-related health information is both a legal protection under Georgia law and a practical prerequisite for care engagement, this expansion of data sharing carries consequences that extend beyond cybersecurity. Patients who fear disclosure of their HIV status or treatment history through a rebate data pipeline will disengage from careand disengagement from care accelerates transmission and drives up public health costs. The claims-level data a rebate model would require PIHC to transmit reveals operational and market-sensitive information: prescribing patterns, patient volume by drug category, referral and dispensing channels, payer mix dynamics, and service line activity. This constitutes proprietary business information that PIHC does not voluntarily share with commercial entities. Compelling PIHC to disclose it to manufacturers as a condition of accessing the statutory pricing to which it is already entitled amounts to an unjustified commercial subsidy transferring valuable strategic information to the entities the 340B statute was designed, in part, to counterbalance. PIHCs experience with manufacturer-imposed contract pharmacy restrictions and associated claims verification requirements has demonstrated that manufacturers use detailed claims data in ways that disadvantage covered entities and their patients. A rebate model would dramatically expand the volume and sensitivity of data to which manufacturers have accessas a condition of receiving the pricing Congress mandated. That outcome is not consistent with congressional intent. V. THE NEUTRAL CLEARINGHOUSE: A SOLUTION THAT WORKS FOR MANUFACTURERS, PROVIDERS, AND PATIENTS PIHC agrees that preventing duplicate discountswhere a covered entity receives both a 340B ceiling price and a Maximum Fair Price (MFP) rebate on the same drug claimis a legitimate program integrity objective. Manufacturers are entitled to protection against that outcome. What PIHC disputes is that a rebate model is the appropriate mechanism to achieve it. A rebate model solves the duplicate discount problem by dismantling the PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 upfront discount structure Congress intendedimposing substantial costs on safety-net providers and their patients to address a problem that has a less disruptive, less expensive, and more reliable solution. That solution is a neutral 340B clearinghouse, administered by the federal government or a government- designated contractor. Under a clearinghouse model, covered entities, third-party administrators, and contract pharmacies would submit 340B claims data to the clearinghouse on a retrospective basis. The clearinghouse would match that data against patient encounter and dispensing records to identify and exclude 340B claims from the information submitted to manufacturers for MFP rebate purposes. Manufacturers would receive rebates only on non-340B claimseliminating duplicate discounts without requiring covered entities to front WAC costs, navigate manufacturer-by-manufacturer rebate processes, or expose proprietary operational data to commercial entities with competing financial interests. A clearinghouse model benefits manufacturers directly and more reliably than a rebate model. Rather than depending on covered entity self-reporting through rebate submissions, manufacturers would receive independent, government-verified assurance that duplicate discounts have been identified and excluded. That verification is more credible than the manufacturer-administered process contemplated by the RFI and eliminates the adversarial dynamic a rebate model would create. A clearinghouse establishes a level, standardized process with uniform rules, transparent audit controls, and consistent outcomes for all participants. A federal clearinghouse precedent is already under development: CMS has indicated its intent to test a clearinghouse-like 340B repository model to prevent duplicate discounts in the Medicare Part D context. The infrastructure and conceptual framework are established. Under a clearinghouse, manufacturers receive verified duplicate discount protection; covered entities retain access to upfront discounts; patients maintain access to medications at the point of dispensing; and the federal government achieves its program integrity objectives through a standardized, transparent, and auditable processat a fraction of the cost a rebate model would impose on the safety-net infrastructure. The costs of a clearinghouse infrastructure could appropriately be offset through service fees assessed on manufacturer participation in the 340B program. Manufacturers benefit financially from the duplicate discount protections a clearinghouse would provide; it is appropriate that they bear a proportionate share of the cost of achieving them. This mechanism ensures that program integrity costs do not fall exclusively on safety-net providers and the patients they serve. VI. CONCLUSION A 340B Rebate Model Pilot would destabilize the financial infrastructure that makes comprehensive HIV care possible for approximately 10,000 patients in some of the highest-burden HIV communities in the United States. The harms described aboveto patient access, to organizational cash flow, to clinical staffing capacity, and to data securityare not speculative. They are the direct and predictable consequences of replacing an upfront discount model with a retrospective rebate process that no safety-net nonprofit was built to sustain. Those consequences are also inconsistent with the 340B programs statutory purpose and contrary to the federal governments own commitment to ending the HIV epidemic. PositiveImpactHealthCenters.org CHAMBLEE Administration Only (404) 600-2420 Fax (404) 464-5750 2800 Century Parkway NE, Suite 550 Atlanta, GA 30345 CLAYTON (678) 210-9750 Fax (678) 210-9690 1117 Battle Creek Rd Jonesboro, GA 30236 DECATUR (404) 589-9040 Fax (404) 589-1615 Espaol (404) 523-1171 523 Church Street Decatur, GA 30030 DULUTH (770) 962-8396 Fax (770) 962-1291 3350 Breckinridge Boulevard, Suite 200 Duluth, GA 30096 MARIETTA (770) 514-2464 Fax (770) 514-2806 1650 County Services Parkway, Suite 200 Marietta, GA 30008 The costs of a weakened safety net do not disappear. They are redistributedto emergency rooms, to Medicaid and Medicare, to Ryan White, and to the public programs that fund the more expensive care that follows when HIV prevention and treatment systems fail. A Rebate Model Pilot would generate those costs in exchange for a duplicate discount solution that is less reliable, less transparent, and more burdensome than the neutral clearinghouse alternative PIHC and other covered entities have proposed. Should a Rebate Model Pilot be implemented, PIHC anticipates concrete and particularized harm to its operations and to the patients it serves, for the reasons described herein. PIHC respectfully requests that HRSA decline to implement a Rebate Model Pilot and instead pursue the neutral clearinghouse alternative as the operationally sound and mission-consistent mechanism for addressing duplicate discount concerns. PIHC stands ready to engage constructively with HRSA in the development of such an approach. We appreciate HRSAs consideration of these comments. Respectfully submitted, Larry M. Lehman President & Chief Executive Officer Positive Impact Health Centers, Inc. 2800 Century Parkway NE, Suite 550 Atlanta, Georgia 30345 larry.lehman@pihcga.org (678-990-6450) Larry Lehman (Apr 20, 2026 15:54:41 EDT) PIHC 340B RFI Public Comment Final 4.20.2026 Final Audit Report 2026-04-20 Created: 2026-04-20 By: Emily Blaiklock (emily.blaiklock@pihcga.org) Status: Signed Transaction ID: CBJCHBCAABAA_PE9C0D97BHsjyO4beXqsSVj2Sqvv_Y7 "PIHC 340B RFI Public Comment Final 4.20.2026" History Document created by Emily Blaiklock (emily.blaiklock@pihcga.org) 2026-04-20 - 7:30:36 PM GMT Document emailed to Larry Lehman (larry.lehman@pihcga.org) for signature 2026-04-20 - 7:31:19 PM GMT Email viewed by Larry Lehman (larry.lehman@pihcga.org) 2026-04-20 - 7:54:09 PM GMT Document e-signed by Larry Lehman (larry.lehman@pihcga.org) Signature Date: 2026-04-20 - 7:54:41 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 7:54:41 PM GMT
HRSA-2026-0001-2164Wirt County Health Service Association, Inc.2026-04-20T04:00Z37,175 chars
See attached file(s) TEL 304.861.4100 I FAX 304.699.0246 wpg) ' 1COPLIN April 20th. 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Wirt County Health Service Association, INC d/b/a Coplin Health Systems, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Coplin Health Systems anticipates a loss of $700,000 from entity-owned pharmacy operations and a 30% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I.We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Coplin Health Systems in particular, this means it will impact: The over 19,000 patients of Coplin Health Systems Current administrative costs for our 340B program. They will dramatically increase to ensure that we are receiving the discounts we deserve. We anticipate having to hire a FTE to handle the administrative duties of the program Our uninsured low-income population who depend on that upfront discount they currently receive will be impacted. Our organization's ability to provide other services that the 340B program supports such as dental and behavioral health. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. ILPatient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication Cv COPLIN HEALTH SYSTEMS EL 304.861.4100 I FAX 304.699.0246 nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and JardianceO, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.' By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes AustedoO, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. TEL 304.861.4100 1 FAX 304.699.0246 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obiigation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III.Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the 6 '1' 6 L LI fl COPL1N k in) EL 304.861.4100 I FAX 304.699 0246 volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: Coplin Health Systems provided sliding fee discounts on medical visits, dental visits, behavioral health visits and pharmaceuticals. We anticipate that our ability to offer sliding fee discounts, especially on medications, will decrease significantly under a rebate model. Staffing Impact: Coplin Health Systems anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Coplin Health Systems anticipates an increase of $40,000 - $80,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. For Coplin Health Systems, we anticipate this costing our organization $50,000 for our 1 FTE. Up front spending for the drugs in the rebate model are estimated to be in the 3-4 million range. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate TEL 304.861 4100 I FAX 304 699.0246 7 RNA P RK RS: W ( 4 claims and payments. At Coplin Health Systems, we anticipate this taking 15-20 hours per week since we will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Coplin Health Systems urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We anticipate a one-time cost of $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in- house pharrnacy systems will require costly customization to provide real- time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our current system is not equipped to handle this process, and we will have to outsource the data collection to a third party. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend approximately 10 hours per week manually kt + HEALin SYSTLMS o'COPLIN EL 304.861.4100 I FAX 304.699.0246 pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with approximately 25 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Clinic Administered Druo: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. TEL 304.861 4100 I FAX 304 699 0246 COPLIN Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. EL 304.861.4100 I FAX 304.699.0246 O COPLIN A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.8 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Through this sliding scale, patients are getting medications they otherwise would not receive. That is a message we hear from patients on a daily basis by us passing these savings onto the patient. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The fmancial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).' Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, HEALTH SYSTEMS TEL 304.861.4100 1 FAX 304.699.0246 COPLIN manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Druz Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B" and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.'2 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. U 1 ARKERSBU G COPLIN -,EALTH SYSTEMS TEL 304.8614100 I FAX 304.699.0246 This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Coplin Health Systems asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. a. Financial Impact of Rebate Denials and Delays Coplin Health Systems urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." TEL 304.861 4100 FAX 304.699.0246 ocopt_m IL I + HEALTH SYSTEMS If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of fmancial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV.Reconciliation and Rebate Denials Operational Challenges. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; EL 304.861.410O I FAX 304.699.0246 Viv ' 6 04 COPLIN EALTH SYSTEMS Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V.Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI.Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: TEL 304 861 4100 ' FAX 304.699 0246 ER ON AV U C 4 Avoid cash-flow and borroN% ing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Coplin Health Systmes strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Coplin Health Systems believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ob D ley Coplin Health Systems TEL 304.861.4100 ' FAX 304.699.0246 40' 4 COPL1N Is) Coplin Health Systems appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Scott Price, Chief Pharmacy Officer at scottp@coplinhealth.com
HRSA-2026-0001-2165Regional Health Care Affiliates DBA Health First CHC2026-04-20T04:00Z23,379 chars
The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. The 340B program currently supports approximately 4045% of our organizations financial sustainability. These funds are essential to maintaining critical patient services, including the ability to offer reduced-cost medications at the point of sale for individuals with financial need. However, the program is facing increasing pressure from multiple directions. As retail drug prices decline, 340B acquisition costs are rising, which continues to compress the margin (spread) that has historically supported our operations. At the same time, ongoing contract pharmacy restrictions are further reducing expected revenue, independent of any future policy changes. The progression toward a rebate-based model represents an even more significant structural concern. If fully implemented, such a model would fundamentally alter the program, shifting it away from upfront savings and toward delayed reimbursement. This would undermine many of the current operational workflows that allow us to provide immediate financial relief to patients at the point of sale. As rural health transformation efforts continue nationwide, there is a shared goal of advancing care delivery and improving outcomes. However, financial constraints tied to 340B changes may force difficult decisions, including formulary adjustments toward lower-cost, and potentially less effective, therapies. While these changes may improve short-term affordability, they risk compromising long-term patient outcomes and overall quality of care. Preserving the integrity and intent of the 340B program is criticalnot only for the financial viability of safety-net providers, but for ensuring that vulnerable patient populations continue to receive timely, effective, and accessible treatment. If we were to move to a Rebate only model for 340B, this would put added strain on an already venerable workforce. Thank you for the opportunity to comment. See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Kentuckys Community Health Centers (CHCs) and the patients they serve, the Regional Health Care Affiliates DBA Health First Community Health Center appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC- specific data in response to questions raised in the RFI. Summary of Recommendations: In short, Health First, an FQHC located in Western Kentucky serving patient in 7 counties with 8 clinics, strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, we hope to explain A. The importance of 340B savings to Kentuckys CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their vast number of low- income and uninsured patients. (Note: With Medicaid changes our patients falling into the safety net gap of needing direct uncompensated care will increase.) B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low- income and uninsured patients. Consistent with federal law and regulation, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Kentucky, CHCs routinely rely on 340B savings to support services such as: Primary Care and a medical home otherwise unavailable with our help, behavioral health, outreach supportive services for food insecurities, transportation and charity care prescription access, dental, optometry, diabetes specialty services providing CGM interpretation and access, just to name a few. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Kentuckys CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. The 340B program currently supports approximately 4045% of our organizations financial sustainability. These funds are essential to maintaining critical patient services, including the ability to offer reduced- cost medications at the point of sale for individuals with financial need. However, the program is facing increasing pressure from multiple directions. As retail drug prices decline, 340B acquisition costs are rising, which continues to compress the margin (spread) that has historically supported our operations. At the same time, ongoing contract pharmacy restrictions are further reducing expected revenue, independent of any future policy changes. The progression toward a rebate-based model represents an even more significant structural concern. If fully implemented, such a model would fundamentally alter the program, shifting it away from upfront savings and toward delayed reimbursement. This would undermine many of the current operational workflows that allow us to provide immediate financial relief to patients at the point of sale. As rural health transformation efforts continue nationwide, there is a shared goal of advancing care delivery and improving outcomes. However, financial constraints tied to 340B changes may force difficult decisions, including formulary adjustments toward lower-cost, and potentially less effective, therapies. While these changes may improve short-term affordability, they risk compromising long-term patient outcomes and overall quality of care. Preserving the integrity and intent of the 340B program is criticalnot only for the financial viability of safety-net providers, but for ensuring that vulnerable patient populations continue to receive timely, effective, and accessible treatment. If we were to move to a Rebate only model for 340B, this would put added strain on an already venerable workforce. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation adjustment to their base grants in over a decade. Given these pressures, it is not surprising that CHCs have had to alter our formularies on medications for charity care, cut expenses surrounding C.E. for providers, quality and employees alike, cut positions and add more a workload on those employees absorbing those position losses. Given the fact that the 340B program is getting harder to manage with all of the various submissions, this cut in the workforce is often unbearable. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs in the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer's plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate- related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided on a monthly basis) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cash flow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. Sincerely, Regional Health Care Affiliates DBA Health First CHC 121 East Main St. Providence, Ky. 42450
HRSA-2026-0001-2166High Country Community Health2026-04-20T04:00Z47,286 chars
On behalf of High Country Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. Please see attached response. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of High Country Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our CHCs ability to serve the most vulnerable members of our Western NC community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: High Country Community Health anticipates a loss of $2.3 million from entity-owned pharmacy operations and a reduction of more than $1.8 million for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. HCCH places a strong emphasis on serving underserved and vulnerable populations, including individuals and families living at or below 200% of the federal poverty level, the uninsured, and those facing barriers to care. Through a sliding fee scale and various assistance programs, HCCH works to eliminate financial obstacles and ensure that cost is not a barrier to receiving essential healthcare services. In 2025, HCCH provided services to 17,319 unique patients with 72,440 visits, demonstrating both reach and trusted community presence. Beyond clinical services, HCCH partners with local organizations, schools, and community groups to expand preventive care and health education, address social determinants of health, and build trust and long-term engagement with vulnerable populations. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For High Country Community Health in particular, this means it will impact: All 17,319 patients served in Western NC Administrative costs to operate our 340B program, estimates show administrative cost burden to increase by approximately $400,000. Programs funded in-part or wholly by our 340B program including medical and pediatric care, dentistry services, behavioral health services, school-based mental health programs, medication assisted treatment (MAT) services, agricultural workforce programs, prescription delivery services, and operations for mobile units. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. In 2025, High County Community Health was unable to provide 340B pricing for more than 22,000 prescriptions, many of which were insulin products, due to the current manufacturer restrictions on contract pharmacies. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: High Country Community Health provided $1,814,181.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: High Country Community Health anticipates needing 2.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, High Country Community Health anticipates an increase of $150,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 7 Internal NACHC assessment (99 responses). High Country Community Health anticipates needing more than 2 FTEs to account for this increased administrative burden. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. High Country Community Health reported a surplus of $200,000 for FY 2025. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. High Country Community Health estimates a time burden of at least 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If reporting is not standardized, time estimates are anticipated to exceed more 20 hours per week to meet not counting the time estimates needed to reconcile the rebates. High Country Community Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. High Country Community Health has already spent $20,000 for a pharmacy software upgrade just to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 17,319 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $145,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 8 Ibid. For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This requires manually pulling files on purchases and pricing for each of our entity-owned pharmacies, as well as manually reconciling each of those anticipated rebate payments, on a weekly basis just to ensure we are receiving the statutory 340B price. Please consider the time it will take to file a good faith inquiry (GFI) on each individual claim where a rebate was either denied or just not received. High Country Community Health estimates an additional 1-2 hours per week or more just to track down 1-2 missing or incomplete rebate claims. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Our software vendor has quoted costs at $200 per hour for report development. The number of hours required are not known at this time as we are unsure of what those reporting elements are. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at minimum 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 62 individual pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 In-House and 62 contract different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in four Western North Carolina counties (Watauga, Avery, Burke, and Surry) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 11 Internal NACHC survey data The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. This is a life-saving service High County Community Health provides for our rural communities, and this service currently costs Americans nothing extra for us to continue operating as we have been since our inception in 2012. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and sub-ceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost more than $863,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $74,000 to purchase these same drugs at the 340B ceiling price. This represents a 1166% increase in upfront capital required for procurement just for these 10 drugs. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, High Country Community Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as school-based mental health services, agricultural workforce programs, free prescription delivery services, medication assisted treatment services, mobile clinics, and indigent community outreach. Operating Hours: We anticipate needing to reduce our clinic hours by 5-10 hours per week, specifically impacting our evening and weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a directly increasing wait times for all related appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 4,867 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. High Country Community Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, High Country Community Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $322,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. High Country Community Health Data: High Country Community Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $72,000. Extrapolating that data to include the additional 15 drugs that will be added in 2027, our spending would increase by $167,000 per month. By 2028, with the addition of 15 more drugs, now totaling 40 drugs, our monthly drug spending increases to $192,000. Our entire health center operated on a margin less than this number for the entire FY 2025. For High Country Community Health, carrying this cost burden to obtain medications we are statutorily entitled to purchase is wholly unsustainable. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit through our wholesaler just to purchase these medications. This is not a sustainable solution; Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on High Country Community Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays High Country Community Health urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $132,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion High Country Community Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. High Country Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. High Country Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Stephanie Hazle, Director of Pharmacy, at pharmacy@hcchmail.org. Sincerely, Stephanie Hazle Stephanie Hazle, PharmD On behalf of Alice Salthouse CEO High Country Community Health
HRSA-2026-0001-2167Chronic Care Policy Alliance2026-04-20T04:00Z2,966 chars
See attached file(s) 1001 K ST. 6th Floor | Sacramento, CA 95814 | 916-444-1985 www.chroniccarealliance.org | www.yourvaccinationguide.org | www.mypatientrights.org @ChronicCareAlliance April 20, 2026 Administrator Thomas J. Engels Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Electronically Submitted via regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: The Chronic Care Policy Alliance (CCPA) appreciates the opportunity to provide input as the Health Resources and Services Administration (HRSA) considers potential reforms to the 340B Drug Pricing Program, including exploration of a rebate-based model. The 340B program plays an important role in supporting safety-net providers and improving access to care for low-income and underserved patients. However, as the program has evolved, ongoing questions about transparency, accountability, and oversight have raised concerns about whether its current structure consistently ensures that savings are reaching patients. The rapid growth of contract pharmacies and increasing vertical integration among program participants has added further complexity and underscores the need for clearer guardrails and greater visibility into how program funds are generated and used. At the same time, there is growing, bipartisan recognition that reforms are needed to strengthen the program and ensure it more effectively supports patients and the providers who serve them. CCPA supports HRSAs interest in exploring a rebate-based model as a potential pathway to improve the programs transparency and accountability. Compared to the current upfront discount structure, a rebate model may offer greater visibility into transactions and create clearer mechanisms to track how 340B savings are generated and ultimately used. This approach could help better align program savings with patient access and affordability, while also reinforcing consistent expectations for covered entities and their partners. Importantly, efforts to reform the 340B program should be viewed as an effort to strengthen, not weaken, the program. Calling for greater transparency and clearer expectations is not a call to dismantle 340B, but rather to ensure it functions in a way that more directly benefits the patients it is intended to serve. As HRSA evaluates a rebate-based approach, we encourage careful consideration of how the model can be implemented in a way that ensures that savings are more directly connected to patient benefit. Strengthening oversight and transparency will be essential to ensuring the program delivers for patients in a more consistent and measurable way. Thank you for your consideration and your continued commitment to patients. Sincerely, Elizabeth Helms CEO Chronic Care Policy Alliance (CCPA) lizh@chroniccarealliance.org
HRSA-2026-0001-2168Sunset Park Health Council, Inc. dba Family Health Centers at NYU Langone2026-04-20T04:00Z18,942 chars
Enclosed please find our letter regarding Request for information: 340B Rebate Model Pilot Program (HRSA - 2026-03042). Thank you FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone and the 116,000 patients we serve annually (plus an additional 40,000 patients via subgrantees), thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The mission of Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone is to improve the overall health of the communities it serves by delivering high quality, culturally competent primary care, and related services within community-based settings. Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone continues to build on its fifty-nine-year history as the primary provider of ambulatory health care services for underserved communities mostly in Southwest Brooklyn. Since its founding in 1967, Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone has grown to become one of the nations largest, most comprehensive federally funded community health center networks. In 2025, Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone delivered care to 116,000 patients in over 742,000 patient visits. Of Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langones users, 52.6% live in households with incomes less than 100% of the Federal Poverty Level; 49.4% receive Medicaid; 21.8% are uninsured; and 30.9% are best served in a language other than English. FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 2 The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of $1.1 million from entity-owned pharmacy operations and $625,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. In addition, Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone has three subgrantees (Callen-Lorde CHC, Metro Community Health Centers and The Door). As you may be aware, subgrantees are separate federally qualified health centers that are under the scope of Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone, for Section 330 and 340B Pharmacy Program purposes. Subgrantees pose its own challenges which we will explain in a separate paragraph below. Summary of Recommendations: In short, Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. 5. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, then HRSA must also separate the subgrantees from the main grantee on OPAIS so each separate entity can pursue rebates on their own. A. Subgrantees: Subgrantees are technically under the scope of the main covered entity but maintain separate 340B programs, OPAIS registrations, banks accounts, etc. However, due to the fact that HRSA does not see subgrantees as separate covered entities under 340B with their own 340B IDs, but rather as additional sites under the main grantee; there is deep cause for concern that there can be commingling of medications, claims submission and monies because the subgrantees would have open unrestricted access and visibility to the main covered entitys platform, not just theirs, which creates compliance issues and risk. The reporting requirements for the proposed 340B Rebate Model Pilot Program under Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone, would affect not only us, but all our subgrantees as well. Therefore, if HRSA insists on allowing manufacturers to impose a rebate model on CHCs, then HRSA must also separate the subgrantees from the main grantee on OPAIS so each separate covered entity can pursue rebates on their own. FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 3 B. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone, a 340B Rebate Model Pilot Program will impact: 1,400 of the 2025 340B-Qualified prescriptions & administrations 25,000 low-income and uninsured patients served Our ability to provide primary care, mental health, prescription medications and expanding services; cover losses for patients who utilize sliding-fee services, and other enabling services not traditionally reimbursable. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 4 CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. C. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire at least one additional FTE and we estimate the cost to hire additional staff to be $100,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $500,000 will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 5 Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. D. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination; behavioral health services; dental services; school-based health, our medication therapy management program for complex diabetic patients, etc. Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours, which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 6 pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. E. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. F. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. FAMILY HEALTH CENTERS Grants Fiscal Department, 150 55th Street, Brooklyn, NY 11220 Phone 718.630.7047 7 G. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Sunset Park Health Council, Inc. d/b/a Family Health Centers at NYU Langone strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Astrid P. Gonzalez, CFO, at Astrid.Gonzalez@nyulangone.org. Sincerely, ASTRID P. GONZALEZ APG/gda VP Finance - CFO
HRSA-2026-0001-2169Anonymous Anonymous2026-04-20T04:00Z3,209 chars
see April 20th 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Premier Community HealthCare Group, Inc. (PCHG) located in Hernando and Pasco County, we appreciate the opportunity to provide feedback on HRSAs RFI regarding a potential shift to a 340B rebate model. As an FQHC, our mission is to provide comprehensive primary and preventive care to underserved populations, regardless of their ability to pay. The 340B Program is vital to this mission, allowing us to stretch scarce resources and expand access to affordable medications for our most vulnerable patients. We strongly urge HRSA to reconsider the implementation of a rebate-based model. Such a shift would fundamentally alter a program that has successfully operated on an upfront discount model for over 30 years, introducing severe operational and financial risks to safety-net providers. 1. Financial & Cash Flow Impact The concerns for our FQHC are the impact on working capital and cash flow. Upfront Costs: Under a rebate model, we would be forced to purchase medications at the full Wholesale Acquisition Cost (WAC), which can be 4 to 5 times higher than the 340B ceiling price. Requiring manufacturers to pay rebate claims within ten days does not protect us from potential cashflow strains. The 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) could force us to borrow cash. Locked Capital: We would need to hold our current monthly 340B savings as working capital to maintain current operations. 2. Increased Administrative Burden and Staffing Operating a rebate-based system requires sophisticated data tracking and reconciliation infrastructure that we currently do not have in our organization. Staffing: We would needing additional dedicated FTEs to manage rebate submissions, track payments, and appeal wrongful denials. Compliance Costs: The transition would require significant one-time startup costs for systems integration, as well as ongoing fees for third-party administrators (TPAs) to manage the rebate pipeline. 3. Risk of Rebate Denials & Loss of Savings A rebate model shifts the burden of proof to our organization. We are concerned that: Manufacturers may use overly restrictive data requirements to deny legitimate 340B claims. The 10-day payment/denial window proposed is insufficient to protect us from manufacturer delays, potentially leading to long-term cash flow gaps. Conclusion For safety net providers like PCHG that operate on thin margins, the rebate model poses a direct threat to our ability to keep current providing the same services we currently offer. We respectfully request that HRSA maintain the current upfront discount model to ensure the continued integrity and effectiveness of the 340B Program. Sincerely, Joseph Resnick Premier Community Healthcare Group, Inc.
HRSA-2026-0001-2170Vista Community Clinic2026-04-20T04:00Z48,303 chars
See attached file(s) Vista Community Clinic April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Program (HRSA-2026-03042) Dear Director Britton: The 340B program is foundational to Vista Community Clinic's (VCC) ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers, directly serving patients, through a rebate model threatens to destabilize our pharmacy operations. The projected impacts upon VCC are staggering: Financial Losses: VCC anticipates a loss of $979,785 in 2027 alone from both entity-owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and loss of 340B up front vendor discounts. Projected Cost Increases: VCC anticipates an annual increase in operational costs of $195 915 solely for the ongoing management of the rebate program. This estimate assumes there are no reconciliation issues requiring a dedicated employee. However, if the program is similar to the current models utilized by manufacturers to impose restrictions, this cost could easily double to approximately $400,000 annually due to complex reconciliation processes and the administrative burden associated with communicating effectively with program administrators. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Program. The proposed 340B Rebate Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHC's to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low- income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model, would cause significant fmancial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Vista Community Clinic, the impact would be substantial: Scale of Impact: In 2025, we cared for over 65,000 patients and supported their medical needs through 54,827 340B-eligible prescriptions. This represents $4,941,705 in total drug costs, $4,135,274 in pharmacy administrative costs, and $1,826,426 in 340B program management and oversight costs, resulting in over $3.8 million in net 340B savings that directly support patient care and critical services. Any disruption to these savings directly affects access to medications for our predominantly uninsured and Medi-Cal patient population. Existing Administrative Burden: Our current administrative costs are approximately $174,000 annually to maintain a compliant 340B program under the existing model. The proposed rebate model would introduce new requirementsincluding claims tracking, rebate submission, reconciliation, and dispute resolutionresulting in a significant and unfunded increase in administrative costs. Direct Impact on Patient Services: 340B savings support 115 programs across our organization, including: access to healthcare, behavioral health, care coordination, dental services, food and basic needs assistance, HIV services, migrant health, women's health, and youth programs. Any reduction in 340B savings or increase in administrative costs would directly limit our ability to sustain these critical services. We strongly urge HRSA to exempt CHC's from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Program would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 2 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Only 19% of VCC's patient population has Medicare or Commercial Insurance. This means that 81%, or approximately 53,000 patients under our care, are either uninsured or enrolled in Medi- Cal and many depend on access to reduced-cost medications, sliding fee discounts, and other affordability programs supported by the current 340B program. These vulnerable individuals will be directly impacted by the proposed 340B Rebate Program. VCC will be required to purchase medications at wholesale acquisition cost (WAC) and await rebate reimbursement, which may prevent us from consistently offering 340B-discounted pricing on medications included in the rebate program. This will significantly limit our ability to assist those most in need and materially compromise our ability to provide the level of care and support on which our patients depend. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https: ' NA, wahaiournals.oreidoi/pdfi l 0.11 6 l circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. haps:// .samhsa..czov,"data'data- e-collectinsduh-national-sureN drue-use-and-health: national-releases 3 resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHC's providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHC's from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHC's would only weaken the safety-net providers that 52 million Americans rely on for health care. CHC's are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the rebate program would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Program is not only a financial threat to CHC's but also a duplicative and unnecessary administrative burden. HRSA should exempt CHC's from the 340B Rebate Program because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHC's in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23:13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262: PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. Vista Community Clinic is already experiencing the operational and financial impact of manufacturer-imposed restrictions. In 2025 alone, 4,116 prescriptions were excluded from the 340B program, resulting in $1,708,836 in lost 340B savings opportunity. Managing these restrictions also required an additional $131,272 in administrative costs related to submissions, compliance, and oversight. These existing burdens demonstrate that manufacturers are already shifting operational complexity and financial strain onto covered entitiesburdens that would be significantly amplified under a rebate model. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Vista Community Clinic provided $7,178,160 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Vista Community Clinic anticipates additional staffing costs of $155,915 annually to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Vista Community Clinic anticipates an increase of $35,000 annually for extemal support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Vista Community Clinic estimates an additional .7 FTE to meet the administrative demands of a 340B Rebate Program as it shifts the burden of proof and data validation to the covered entity, requiring detailed documentation to substantiate that prescriptions are eligible and not subject to duplicate discounts. As an FQHC/CHC we already operate under extensive federal compliance requirements to ensure we are adhering to our HRSA-awarded grant. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last 7 Internal NACHC assesstnent (99 responses). g Ibid. 5 year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHC's operate on razor-thin margins, and these additional costs are not an option for many entities. Vista Comrnunity Clinic will be greatly impacted by: )=. an increase upfront annual drug spend exceeding $6 million, carrying costs of approximately $780,000 and losses exceeding $970,000 due to wholesaler discounts and rebate denials. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHC's will face an increased administrative burden in terms of monitoring rebate claims and payments. It's estimated an additional 10 hours a week will be required for Vista Community Clinic to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHC's to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Vista Community Clinic urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate upfront costs to design new internal workflows and create processes to support the demands of a Rebate Program. Approximately, $5,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 65,000 patients, the total projected increase in expensesincluding labor, IT, and additional vendor costs is estimated at $190,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 88 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 88 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model is more costly and complicated to manage, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in San Diego, Riverside and LA Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharrnacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective matmer that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. u Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 Vulnerability Index Approach to Identify Pharrnacv Deserts and Keystone Pharmacies I Pharmacy and Ciinical Pharrnacolog _TAMA Network Open I lAMA Network 10 nttps:iiwx w.neanhattairs.orejdoitabsi I U. I377/hlthart.2024.00 I 927loumalCodehlthatt I I Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. IIRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Program, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient' s medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Vista Community Clinic works to ensure patients have access to needed medications regardless of income by actively using all available toolsincluding manufacturer vouchers and our Sliding Fee Scaleto reduce costs at the point of sale. Approximately 18,000 prescriptions, or 45% of all prescriptions dispensed through our in-house pharmacies, depend on these efforts. A rebate model undermines this work by requiring CHCs to provide discounts without knowing the final net drug cost or when reimbursement will occur, shifting financial risk onto the CHC and weakening the very mechanisms that enable consistent patient access to medications. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.goviconipliance cowl iance- man ual/chapter%* footnote 10 8 CHCs are particularly concerned that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead to exceed credit limits with wholesalers, halting the ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2- week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the fmancial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.coiblogkear-end-business-health-check-kev-metrics-everv-pharmacv-owner-should-review ts https://340bpricin2.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $10,336,695 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2,287,524 to purchase these same drugs at the 340B ceiling price. This represents a 351% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Vista Community Clinic asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt 16 https://www.cms.govf filesizip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Vista Community Clinic estimates its 2027 Annual Rebate Opportunity Cost to be approximately $979,785. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Vista Community Clinic estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $529,318 for 2027. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. In our region, where patients have no choice but to rely on Vista Community Clinic, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the comrnunity's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 65,000 patients across Southern California. a. Financial Impact of Rebate Denials and Delays Vista Community Clinic urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $347,781. This is a sum our CHC cannot absorb, as it represents a direct extraction of 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https: ' .+ \\Sederalregister.2ovidocuments/2025/08/0 /2025-14619/340h-proeram-notice-application-process-for-the-340b- rehate-model-pilot-pro2ram 11 resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 12 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 13 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, California's Department of Health Care Services (DHCS) issued guidance for California's Medicaid Pharmacy Prograrn, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Ca1 patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut California's multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Ca1 billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is fmancially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCS's six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. 14 If the rebate model moves forward, CHCs in states that adopt guidance like California's will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Vista Community Clinic strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant expenditures on contractors and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Vista Community Clinic believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Vista Community Clinc appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Debra Jones at debra.jones'ac-ivcc.org or Emily Nguyen at enguyenrdvcc.org. Sincerely, Fernando Sanudo, CEO Vista Community Clinic 15
HRSA-2026-0001-2171Franciscan Alliance, Inc.2026-04-20T04:00Z30,674 chars
See attached file(s) Franciscan ALLIANCE April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD RE: Request for Information: 340B Rebate Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels: Franciscan Alliance, Inc. ("Franciscan") respectfully submits these comments in strong opposition of any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs- 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. Franciscan participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. As explained below, any rebate mechanism will impose enormous costs and burdens on Franciscan that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. HRSA's current estimates are 52 submissions per year; 5 hours per submission; totaling 260 hours annually. Franciscan's per entity estimates are 156 to 250 submissions per year; 5 hours per submission,. 5 hours per week for reconciliation and issues; totalinz 1,040 to 1,510 hours annually per entity driven by frequency of submission, volume of claims, and non-reconciled transactions. More fundamentally, HRSA's desire to assess a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount FranciscanAlliance.org CORPORATE OFFICE PH: 574 256 3935 SHIPPING 1515 Dragoon Trail Mishawaka, IN 46544 MAILING P.O. Box 1290 Mishawaka, IN 46546-1290 mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Franciscan has relied on for years, is the best way to fulfill that purpose of the 340B program. Who Franciscan Is and How It Uses 340B Savings Franciscan Alliance, Inc. is a mission-driven, Catholic, not-for-profit health system serving Indiana communities for over 150 years. Franciscan has served local communities operating 11 hospitals in Indiana and employing over 18,000 individuals and practitioners. Over seventy percent of Franciscan's patients are Medicare or Medicaid beneficiaries, or self- pay, with reimbursement substantially below the cost of care. In fact, in 2024, Franciscan provided approximately $912 million in community benefits and unreimbursed Medicare and Medicaid costs, with uncompensated care of $749 million and charitable assistance of $131.6 million. Franciscan hospitals eligible to participate in the 340B Program include Franciscan Health Lafayette and Franciscan Health Michigan City (340B Disproportionate Share Hospitals); Franciscan Health Indianapolis and Franciscan Health Dyer (340B Rural Referral Centers); and Franciscan Health Rensselaer (340B Critical Access Hospital). Franciscan relies on its 2025 340B savings of approximately $88 million to sustain essential, loss- generating services for low-income, rural, and medically underserved populations. Franciscan uses 340B savings for basic purposes, like paying our nurses, doctors, and other providers. 340B savings support a broad range of essential services and community programs for Indiana's most vulnerable populations. Specifically, Franciscan has used its 340B savings to: (1) offset costs of caring for uninsured and underinsured patients; (2) sustain its Critical Access Hospital and rural health clinics; (3) support one of two Bone Marrow Transplant Programs in Indiana, and programs providing outpatient infusion for cancer, rheumatology, and other non- oncology indications; (4) support pharmacist-managed anticoagulation clinics; (5) provide free indigent care and sexual assault clinics; (6) offer community outreach programs including free immunizations, breast health screenings, cancer screenings, various lab screening tests, health fairs, education, and support groups; (7) offer transition of care and medication- to-bedside programs to bridge the gap from hospital to the community; (8) operate healthy living centers for diabetes management, medical education, and other chronic disease state management. These examples highlight Franciscan's longstanding commitment to providing care for Indiana's most vulnerable populations and underscore the critical importance of 340B remaining an upfront discount at the time of purchase in supporting each hospital's charitable mission. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretary's express statutory authority to provide for discounts via `rebate or discount.' Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Franciscan reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Comments in Response to RFI Questions Franciscan believes the 340B Rebate Model Pilot Program, if implemented, will negatively impact Franciscan's programs and divert resources away from improving the health of our communities to 340B administrative tasks. Franciscan respectfully requests HRSA remove consideration of a rebate-based model to effectuate the 340B ceiling price. Franciscan recommends HRSA implement a clearinghouse of 340B prescription and medical claims using the minimum necessary data elements maintained by a neutral party. This clearinghouse could provide the necessary information to the Medicare Transaction Facilitator (MTF) to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP) and to other related parties to ensure deduplication of Medicaid rebates. Franciscan agrees a solution is needed related to deduplication of Medicaid rebates or Medicare Maximum Fair Price (MFP) refunds. Franciscan wishes to make clear that we support data transparency strategies designed to address those goals. However, a 340B rebate model is simply not needed to achieve those goals. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSA's assumption that a rebate modeleven one designed with safeguardscould cause only a "minimal impact" on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care outcomes that conflict with the program's statutory intent. HRSA 's continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSA's withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the MDPNP. A rebate model could diminish 340B program integrity by overcomplicating deduplication. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Manufacturers have indicated that they need CE claims data to manage rebate exposure under commercial arrangements with pharmacy benefit managers (PBMs)these objectives are unrelated to 340B program integrity and should not be CEs' financial responsibility. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non- 340B prices to assist with policing manufacturers' commercial agreements. At a minimum, manufacturers should not be permitted to use CEs' rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSA's new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340B's long history as an upfront discount program. Over the course of one year, Franciscan's five 340B hospitals would be required to front to drug manufacturers approximately $15 million based on our actual 2025 purchases of the 2026 and 2027 MDPNP drugs. Franciscan estimates additional expense of $2.5 million per year due to (1) loss of cost-minus drug wholesaler discounts when purchasing at WAC prices and (2) drug manufacturer rebate denials for unclear reasons. Franciscan estimates a $2.4 million negative impact to 60-day cash on hand based on projected average increase in inventory costs for the 25 drugs. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSA's withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers' rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers' policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmaciesthe administrative burden and financial risk would increase greatly. Franciscan planned to hire 3 additional full-time employees for HRSA's withdrawn rebate pilot with a primary responsibility of completing necessary tasks to comply with a 340B Rebate Program with the goal of obtaining all rebates owed to Franciscan as quickly as possible. The new expense for the 3 additional full-time employees would be approximately $312,500 per year. Part of the new employees' responsibilities would be data preparation, data submission, payment reconciliation between the MDPNP refunds and 340B rebates, and maintaining 340B pricing access on the impacted drugs. Data Preparation and Submission: The employees will access the three (3) third-party administrator applications used by Franciscan to prepare the data for submission at least three times per week. Within the applications, multiple data extracts would have to be processed and combined. Franciscan would target a more frequent submission than the minimum required to decrease the impact on cash flow. From Franciscan's experience submitting only prescription claims data to 340B ESP, Franciscan reviews all data submissions to ensure only the minimum necessary fields and transactions are being shared. It is common pharmacy business practice for multiple insurance adjudications to be required before the final payment transaction. Franciscan reviews the data submissions to remove non-final transactions insignificant to 340B. In addition, the data submissions require manual review to capture reversal transactions for prescriptions not picked up by patients that cross data submission periods. If the reversal happens within the same reporting period, Franciscan will not include the transaction in the data submission as it strives to only share the minimum necessary data. Medical Claims Challenges: The initial 340B Rebate Pilot Program required medical claims data in addition to pharmacy claims data, even though the stated purpose of ensuring MDPNP deduplication is only applicable to pharmacy claims data in 2026 and 2027. Franciscan does not provide the requested medical claim data fields to other parties, like our 340B third-party administrator applications. Franciscan had prioritized preparation to submit pharmacy claims because of experience with 340B ESP data submissions. Franciscan briefly shared minimum prescription claim fields with 340B ESP until Franciscan could transition to 340B covered entity-owned retail pharmacies. Franciscan found the administrative expense to comply with 30+ different manufacturer contract pharmacy policies under non-negotiable 340B ESP terms was not acceptable. Franciscan was not prepared to submit medical claims data by 1/1/26 and was going to purchase impacted drugs in the hospital setting at a non-340B, sometimes the highest cost WAC price. The required Medical Claims fields were unclear. The manufacturer's chosen vendor, Beacon, has acknowledged in webinars and communications that some of the fields were inconsistently identified in practice. There were error-prone issues for drugs dosed more than once per day during a hospital observation stay. Two approaches would be required to address drugs with HCPCS codes and drugs without HCPCS codes. There were concerns about the time it takes to ICD-I 0 code a patient's hospital visit and issue a bill. On average, Franciscan's outpatient-onlv visits with drugs take 8 days to bill with less than 1% falling outside of a 45-day window to bill. Billing delays take an average of 10 days to resolve. Therefore, many of our medical claims are final in 8 to 45 days. This will cause the rebate payment to Franciscan to be well after the drug's administration. Manufacturer 340B Policy Variation: From Franciscan's experience in preparing for the original 340B Rebate Pilot Program, the initial eight HRSA-approved manufacturer rebate policies included variations that would cause Franciscan to incur additional expense to understand, manage, and reconcile the differences. The differences included how unreplenished accumulations prior to 1/1/26 would be managed. It is standard practice in the 340B inventory replenishment model to accumulate until a full package size is reached. 340B covered entities should not be penalized and lose accumulation based on drug utilization rates. The manufacturer policies would have led to irresponsible drug purchasing or loss of 340B accumulations based on past 340B-eligible drug dispenses or administrations. Another variation was that data upload specifications were similar, but not consistent. There was a variation on whether manufacturers would continue to require 340B ESP submissions in addition to Beacon, essentially doubling the work. Payment Reconciliation: Franciscan was concerned about the administrative burden of reconciling 340B rebate payments. Based on experience with manufacturers' contract pharmacy restriction policies, involved parties wanted to blame others when transactions could not be reconciled. There was a lack of transparency. Covered entities could not obtain clear answers regarding 340B pricing when it was removed. With a Rebate Program, Franciscan expects there will not be clear answers when a rebate is denied. Manufacturer actions have shown that they are comfortable making unilateral decisions about who is a 340B patient, including adding more requirements than the HRSA patient guidance. The 2025 published Rebate Program included receiving multiple payments from multiple manufacturers on multiple timelines, requiring reconciliation. Program Integrity: A 340B Rebate Program would introduce more internal and external audits for Franciscan in our efforts to always value program integrity via self-monitoring. Other Operational Impacts: A 340B Rebate Program would require manual updates to the weekly drug price files Franciscan loads in its electronic health record. The Rebate Program will cause the 340B price file to commonly include WAC prices. This will have to be modified manually, involving multiple price files per week per location. In summary, a 340B Rebate program will divert resources to more administrative tasks at a time when other government actions are moving resources and 340B dollars away from the 340B covered entities Congress targeted. For example, Indiana Medicaid has drafted a State Plan Amendment to disallow the use of 340B drugs on Medicaid patients, effectively transitioning the 340B financial benefit away from 340B safety-net hospitals. What Tools would HRSA Make Available to Franciscan to Monitor Manufacturer Compliance? "Transparency" has become a manufacturer's watchword since 2020. In particular, manufacturers argue that they are harmed because they lack line- of-sight into Covered Entities' eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational functioneligibility decisionsfrom Covered Entities to manufacturers. Franciscan would be harmed if it did not have a line of sight into manufacturers' rebate eligibility decisions. The system manufacturers use to manage MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. Would Drug Manufacturers be Permitted to Use Franciscan's data for anything other than MFP deduplication? If so, What Statute Authorizes IIRSA to Require This of Franciscan? If so, Will Manufacturers be Expected to Reduce the Price on our 340B Accounts Below the Ceiling Price to Compensate for the Value of Its Data? One of Franciscan's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, authors PhRMA-funded white papers attacking the 340B Program. Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Franciscan requested to negotiate terms with Beacon regarding its data. Beacon replied that its terms could not be changed, and Franciscan's only option was to accept them as is. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require I IRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Franciscan for that value? This raises serious constitutional questions, including whether compelled data disclosures without compensation could implicate the Takings Clause. What Changed Between 2024 and 2026 That Would Justify HRSA's Change in Position? Franciscan believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, I IRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, raising serious procedural and legal concerns regarding transparency, reviewability, and due process. Any subsequent shift in HRSA's stance should be grounded in substantial changes to law, policy, or public health priorities. Franciscan urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. HRSA Should Prohibit All Rebate Denials If HRSA proceeds with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for I IRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety- net providers under a rebate model that is expected to stem from having to interface with the manufacturers' vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, it should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication From Franciscan's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Franciscan's patient population, we serve many other patients, including patients with no coverage at all. Requiring Franciscan to initially overpay for non-Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements, such as a neutral-party clearinghouse rather than a disruptive overhaul of 340B through a rebate model. Franciscan has experienced pharmaceutical manufacturers identifying approximately 26% of MDPNP claims as 340B without explanation or transparency. A 340B rebate model would be more burdensome and would exacerbate the issues Franciscan is experiencing. Franciscan would have to reconcile 340B rebates in addition to Medicare Maximum Fair Price (MFP) refunds using multiple applications, with the MTF and Beacon platforms lacking the transparency needed for reconciliation. Because the MTF works with manufacturers to process MFP refunds, 340B covered entities would need to submit 340B Rebate data as quickly as possible to reduce the number of adjustments needed to address MFP refunds that have already been paid and are later reversed by later 340B Rebate data. Conclusion Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Franciscan and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face, absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take into account the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives that rely on itare at risk. For all these reasons, Franciscan respectffilly submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA, therefore, should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this deeply concerning effort, it must allow Franciscan and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). Providing an opportunity for additional comment on program specifics would help ensure that HRSA has a complete and informed record addressing the significant operational and legal issues raised by a rebate model. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Respectfully submitted, David R. Blazo Vice President Pharmacy Services Franciscan Alliance Inc. 1515 Dragoon Trail Mishawaka, IN 46544 (office) 574.254.6252 (email) david.blazo@franciscanalliance.org
HRSA-2026-0001-2172(no commenter metadata)2026-04-20T04:00Z24,670 chars
We appreciate your attention to the attached file and consideration for HHS Docket No. HRSA-2026-03042. April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Golden Valley Memorial Healthcare, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. Over the course of one year, we believe our hospital would be required to front to drug manufacturers approximately $8,639,143 This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. A consideration is the administrative and operational costs we anticipate our organization would incur to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This will include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. Implementation of a rebate model would require at least one additional full-time employee at an estimated cost of $60,000 per year, force our hospital to reallocate staff hours to work on rebates limiting resources for safety and compliance audits as well as indigent patient assistance efforts, and require that we retain additional third-party vendors at an estimated cost of $25,000 per year. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. The level of administrative burden associated with preparing and submitting claims data, especially for physician-administered drug claims, will require the involvement of dedicated information technology experts and a dedicated electronic medical records provider contact. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which will cause delays even if manufacturers are required to pay rebates within 10 days. Our CEs experience does not support HRSA's assertion that required claims data will be minimally impactful because you are already providing that to third-party administrators (TPAs) to qualify 340B claims or to manufacturers to access 340B pricing. The current requirements for submitting 340B claims data to manufacturers is already burdensome. To set up and maintain regular submissions of hospital claims data that is recorded on an extended timeline due to billing requirements would require double, if not triple the time and resources required for retail claims submission. Our hospital has not routinely provided to manufacturers or TPAs the following data that would have been required under HRSAs first rebate pilot: Claim Line Number, Claim Number, Unit of Measure, Rendering Physician ID, Service Provider ID, Health Plan Name, Health Plan ID, or HCPCS Code and Modifiers. Additional billing staffing costs are expected to be incurred under a rebate model for administrative costs working with state Medicaid agencies to determine how B rebate drugs purchased at WAC should be billed under AAC billing requirements and unrecoverable financial losses if we are to buy at WAC and bill at 340B but our rebate is denied. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. The existing MDPNP process is functioning well overall. The percentage of claims with errors is small compared to our total MDPNP claims. We are addressing any issues with the manufacturers or complaining directly to CMS. Thank you for considering our comments. Sincerely, Golden Valley Memorial Healthcare April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Golden Valley Memorial Healthcare, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. Over the course of one year, we believe our hospital would be required to front to drug manufacturers approximately $8,639,143 This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. A consideration is the administrative and operational costs we anticipate our organization would incur to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This will include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. Implementation of a rebate model would require at least one additional full-time employee at an estimated cost of $60,000 per year, force our hospital to reallocate staff hours to work on rebates limiting resources for safety and compliance audits as well as indigent patient assistance efforts, and require that we retain additional third-party vendors at an estimated cost of $25,000 per year. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. The level of administrative burden associated with preparing and submitting claims data, especially for physician-administered drug claims, will require the involvement of dedicated information technology experts and a dedicated electronic medical records provider contact. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which will cause delays even if manufacturers are required to pay rebates within 10 days. Our CEs experience does not support HRSA's assertion that required claims data will be minimally impactful because you are already providing that to third-party administrators (TPAs) to qualify 340B claims or to manufacturers to access 340B pricing. The current requirements for submitting 340B claims data to manufacturers is already burdensome. To set up and maintain regular submissions of hospital claims data that is recorded on an extended timeline due to billing requirements would require double, if not triple the time and resources required for retail claims submission. Our hospital has not routinely provided to manufacturers or TPAs the following data that would have been required under HRSAs first rebate pilot: Claim Line Number, Claim Number, Unit of Measure, Rendering Physician ID, Service Provider ID, Health Plan Name, Health Plan ID, or HCPCS Code and Modifiers. Additional billing staffing costs are expected to be incurred under a rebate model for administrative costs working with state Medicaid agencies to determine how B rebate drugs purchased at WAC should be billed under AAC billing requirements and unrecoverable financial losses if we are to buy at WAC and bill at 340B but our rebate is denied. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. The existing MDPNP process is functioning well overall. The percentage of claims with errors is small compared to our total MDPNP claims. We are addressing any issues with the manufacturers or complaining directly to CMS. Thank you for considering our comments. Sincerely, Golden Valley Memorial Healthcare
HRSA-2026-0001-2173Greater Seacoast Community Health (FQHC)2026-04-20T04:00Z8,242 chars
See attached file(s) Request for information (RFI): 340B Rebate Model Greater Seacoast Community Health, FQHC 340B ID: CH 019980 Primary Contact: Jocelyn Caple, CEO Greater Seacoast Community Health is a FQHC participating in the 340B Drug Pricing Program. We have an in-house pharmacy where we utilize the program and dispense to 340B eligible patients. The 340B Program enables us to purchase medications at significantly reduced cost to immediately stretch scarce federal resources and reinvest savings directly into patient care. Many of our patients are low-income and/or uninsured. The proposed rebate model will place an enormous financial burden on our FQHC. The rebate model would require us to purchase medications at wholesale acquisition costs and potentially wait months for reimbursement. While rebates are expected to arrive within 10 days from completed data submissions there are concerns about lack of details regarding enforcement if manufacturers do not meet this deadline. Based on experience with manufacturer denials with the current MFP to 340B de- duplication processes, once a Good Faith Inquiry and data submission is submitted, it is often taking months to receive the rebate. We are concerned that in a 340B rebate pilot, it could take months for manufacturers to send the rebate if the claim is contested. The proposed 340B Rebate Model Program will not only cause direct financial hardship for our FQHC but is operationally and strategically harmful. The 340B Rebate Model Program will eliminate predictable savings, undermine budgeting and cash-flow stability, and will force us to finance drug costs up front. In 2025, Greater Seacoast Community Health Pharmacy processed 18,689 340B transactions and 7,428 sliding scale transactions. We anticipate that our ability to offer sliding scale discounts will decrease significantly under a rebate model. Many of our uninsured and underinsured patient population depend on our up front 340B discount. The 340B rebate model will make it operationally and financially impossible to provide a sliding scale discount paying the full price up front. Under the proposed 340B Rebate Model Pilot, we would be required to purchase the medications at wholesale acquisition price, dispense the medication to the patient, and then wait for the manufacturer to approve the rebate and send it. In 2025 Greater Seacoast Community Health filled 856 prescriptions of the proposed 10 drugs being affected with the rebate model. The 340B cost for these medications was $9,892.75. If these 856 drugs had to be purchased at the wholesale acquisition price the cost would have been over $900,000. The proposed 340B Rebate Model Pilot will directly impact on our financial stability and create significant cash flow challenges. In addition to paying wholesale drug costs up front, we will have other anticipated costs with a 340B rebate model. There will be an increased administrative cost as well. We will need to hire 0.5 to 1 full-time equivalent (FTE) administrative staff to assist with the administrative burden to comply with the new complexities, including data submission requirements, claims level tracking, reconciliations, dispute denied claims, not to mention new compliance and audits. We anticipate the need for a 340B Consultant, Third Party Administrator, as well as new pharmacy software to assist with a 340B rebate model roll out. We are expecting high upfront costs for custom reporting and designing new internal pharmacy workflows. Many of these charges will be ongoing service charges to navigate these complex operational burdens. In conclusion, a 340B Rebate Model would impose substantial financial, administrative, and operational burdens on our FQHC. It will jeopardize access to affordable medication for our patient populations. A rebate model would create significant cash flow challenges, forcing our FQHC to make some difficult decisions. We respectfully urge HRSA to carefully consider the detrimental impact of a 340B rebate model on our FQHC. Thank you for the opportunity to provide information on this topic. Request for information (RFI): 340B Rebate Model Greater Seacoast Community Health, FQHC 340B ID: CH 019980 Primary Contact: Jocelyn Caple, CEO Greater Seacoast Community Health is a FQHC participating in the 340B Drug Pricing Program. We have an in-house pharmacy where we utilize the program and dispense to 340B eligible patients. The 340B Program enables us to purchase medications at significantly reduced cost to immediately stretch scarce federal resources and reinvest savings directly into patient care. Many of our patients are low-income and/or uninsured. The proposed rebate model will place an enormous financial burden on our FQHC. The rebate model would require us to purchase medications at wholesale acquisition costs and potentially wait months for reimbursement. While rebates are expected to arrive within 10 days from completed data submissions there are concerns about lack of details regarding enforcement if manufacturers do not meet this deadline. Based on experience with manufacturer denials with the current MFP to 340B de-duplication processes, once a Good Faith Inquiry and data submission is submitted, it is often taking months to receive the rebate. We are concerned that in a 340B rebate pilot, it could take months for manufacturers to send the rebate if the claim is contested. The proposed 340B Rebate Model Program will not only cause direct financial hardship for our FQHC but is operationally and strategically harmful. The 340B Rebate Model Program will eliminate predictable savings, undermine budgeting and cash-flow stability, and will force us to finance drug costs up front. In 2025, Greater Seacoast Community Health Pharmacy processed 18,689 340B transactions and 7,428 sliding scale transactions. We anticipate that our ability to offer sliding scale discounts will decrease significantly under a rebate model. Many of our uninsured and underinsured patient population depend on our up front 340B discount. The 340B rebate model will make it operationally and financially impossible to provide a sliding scale discount paying the full price up front. Under the proposed 340B Rebate Model Pilot, we would be required to purchase the medications at wholesale acquisition price, dispense the medication to the patient, and then wait for the manufacturer to approve the rebate and send it. In 2025 Greater Seacoast Community Health filled 856 prescriptions of the proposed 10 drugs being affected with the rebate model. The 340B cost for these medications was $9,892.75. If these 856 drugs had to be purchased at the wholesale acquisition price the cost would have been over $900,000. The proposed 340B Rebate Model Pilot will directly impact on our financial stability and create significant cash flow challenges. In addition to paying wholesale drug costs up front, we will have other anticipated costs with a 340B rebate model. There will be an increased administrative cost as well. We will need to hire 0.5 to 1 full-time equivalent (FTE) administrative staff to assist with the administrative burden to comply with the new complexities, including data submission requirements, claims level tracking, reconciliations, dispute denied claims, not to mention new compliance and audits. We anticipate the need for a 340B Consultant, Third Party Administrator, as well as new pharmacy software to assist with a 340B rebate model roll out. We are expecting high upfront costs for custom reporting and designing new internal pharmacy workflows. Many of these charges will be ongoing service charges to navigate these complex operational burdens. In conclusion, a 340B Rebate Model would impose substantial financial, administrative, and operational burdens on our FQHC. It will jeopardize access to affordable medication for our patient populations. A rebate model would create significant cash flow challenges, forcing our FQHC to make some difficult decisions. We respectfully urge HRSA to carefully consider the detrimental impact of a 340B rebate model on our FQHC. Thank you for the opportunity to provide information on this topic.
HRSA-2026-0001-2174University Health2026-04-20T04:00Z36,525 chars
See attached file: University Health Comment - Request for Information 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 el University IIIf Health 4502 Medical Drive San Antonio, Texas 78229 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Electronically submitted via www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Bexar County Hospital District, Bexar County, Texas, dba University Health, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." University Health is the safety net county hospital system for Bexar County, Texas. Approximately 75% of our patients are covered by government sponsored insurance or are uninsured. Our mission is to care for anyone and everyone, regardless of ability to pay, while reducing barriers to care and improving community health outcomes. The 340B Drug Pricing Program is essential to University Health's financial stability and our ability to deliver charity care, sliding scale drug access, and comprehensive safety net services. Because of our payer mix and role as a safety net provider, University Health is uniquely exposed to financial, operational, and patient access harms associated with a rebate-based model. Among other things, this RFI asks "whether the Health Resources and Services Administration (HRSA) should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on University Health that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more et University 110 Health 4502 Medical Drive San Antonio, Texas 78229 comprehensive services." Preserving the upfront discount mechanism, which University Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. University Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that University Health can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require University Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, University Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Implementing a rebate-based model under the 340B Drug Pricing Program would significantly increase both staffing requirements and administrative costs for University Health. Unlike the current upfront discount mechanism, a rebate model introduces a series of complex, resource-intensive processes that fundamentally alter program administration and financial operations. Internally, University Health would face a substantial increase in workload across multiple functional areas. These include expanded staff time for overseeing 340B program operations, managing pharmacy workflows and split-billing processes, submitting claims and tracking rebate status, and performing more frequent and detailed reconciliation activities. Additional coordination across fmance, revenue cycle, compliance, and pharmacy teams would be required to ensure accurate accounting, proper rebate capture, and adherence to evolving program requirements. University Health would also need to dedicate resources to managing third-party administrator (TPA) relationships, coordinating data exchanges, et University TEO Health 4502 Medical Drive San Antonio, Texas 78229 and resolving disputes with manufacturers, activities that are currently minimal or nonexistent under the existing model. Key cost drivers further illustrate the magnitude of this burden. University Health would need to hire additional dedicated staff to manage expanded 340B operations, including contract pharmacy oversight, eligibility determinations, reconciliation, and compliance monitoring. Staff would also be responsible for continuously updating internal policies and procedures in response to manufacturer restrictions and programmatic changes, as well as preparing for and responding to audits. These activities represent a sustained increase in labor hours and organizational complexity. Technology investments would also rise sharply. Implementation of a rebate model requires new or enhanced IT infrastructure capable of integrating electronic health records (EHR), pharmacy dispensing platforms, wholesaler purchasing data, claims adjudication systems, and contract pharmacy data feeds. Establishing and maintaining these interfaces would involve significant upfront costs as well as ongoing maintenance and support expenses. Vendor and external support costs would increase considerably. Current expenditures for University Health compliance and TPA split-billing software, estimated at approximately $125,000 annually, would grow, alongside additional external audit and consulting services estimated at $60,000 annually. Expanded reliance on TPAs would further drive costs related to contract pharmacy administration, data matching, claims processing, reporting, audit support, and reconciliation activities. In total, vendor-related expenses could increase from approximately $185,000 annually to as much as $500,000 when accounting for implementation fees, system upgrades, consulting fees, and expanded service needs. Beyond these direct costs, broader trends in healthcare delivery would compound the financial impact. Increased utilization of specialty drugs, greater claim complexity, expansion of contract pharmacy networks, and growth in outpatient clinics and community-based care settings all contribute to a more complex operating environment. A rebate model would amplify these challenges by adding additional layers of administrative oversight and fmancial uncertainty. The initial personnel impact alone is substantial. University Health invested approximately 165 hours across pharmacy, IT, analytics, finance, and senior leadership during the 60-day preparation window alone for the previously proposed rebate program, with estimated internal iabor costs totaling $19,000. To support initial implementation of a new rebate program: Administrative staffmg would need to increase from 1.0 full-time equivalent (FTE) to between 1.5-2.0 FTEs, representing an estimated cost of $250,000. Operational staffmg would need to increase from 2.0 to 5.0 FTEs to support the expanded worldoad, representing an estimated cost of $144,000. et University TEO Health 4502 Medical Drive San Antonio, Texas 78229 Combined administrative and operational effort across pharmacy, IT, analytics, finance, and senior leadership would significantly increase beyond the 165 hours initially invested. Additionally, physical infrastructure constraints would necessitate new or expanded office space and equipment to accommodate additional staff, resulting in significant facility-related expenses. Taken together, these costs represent a significant, ongoing financial burden that is both unfunded and operationally disruptive. The shift to a rebate model would divert critical resources away from patient care and undermine the intent of the 340B program, which is to enable covered entities to stretch scarce federal resources to serve vulnerable populations. We respectfully urge HRSA to carefully consider the substantial administrative cost shift that a rebate-based model would impose on covered entities. Without dedicated funding or structural safeguards, such a model risks weakening the very safety-net providers the program is designed to support. Staffing Impacts Under a Potential 340B Rebate Program. University Health does not currently have the staff needed to comply with a Rebate Program and anticipates that implementing a 340B rebate model would require adding dedicated staff to manage a wide range of new, labor-intensive responsibilities that do not exist under the current program structure. These responsibilities are largelY manual due to the lack of comprehensive, integrated software solutions to support rebate processing. As a result, the administrative burden is not only increased but also operationally inefficient and highly resource intensive. Staff would be required to submit rebates manually and manage all associated billing and support documentation without automated systems. This includes ensuring the accuracy and completeness of each submission, providing ongoing oversight to maintain quality control, and tracking rebate status across multiple manufacturers. When claims are not processed in a timely manner, staff must actively follow up, often requiring repeated outreach and documentation. The reconciliation process would also become significantly more complex and time-consuming. Staff would need to track each claim through its lifecycle, identify discrepancies, and initiate appeals for denied or underpaid rebates. This enhanced reconciliation function introduces additional compliance risk and requires increased staffing dedicated to compliance monitoring and audit preparedness. Audit-related activities alone, including documentation, validation, and response preparation, would expand considerably under a rebate model. et University TIOT Health 4502 Medical Drive San Antonio, Texas 78229 Importantly, these new responsibilities cannot be absorbed within existing staffing structures. They would require the reallocation of resources away from core functions across pharmacy operations, revenue cycle, IT, and compliance teams, ultimately diminishing efficiency in those areas and negatively impacting patient care delivery. Our facility estimates the need for at least 1.0 additional administrative FTE and 3.0 additional operational FTEs to directly support rebate program functions for the 10 drugs that HRSA previously approved for its original rebate program and those that have been approved under the MDPNP for 2027. Operational staff would play a critical role in both claims and rebate management. From a claims perspective, retail pharmacy workflows are fundamentally built on the ability to determine a prescription's cost at the time of dispensing. Under a rebate model, where drugs are purchased at WAC and final pricing is determined retrospectively through rebates, staff must invest additional time upfront to assess each prescription's financial viability. This is essential to avoid situations where dispensing a medication results in a financial loss. This risk is particularly concerning given that dispensed medications cannot be returned. Once a prescription leaves the pharmacy, any negative margin resulting from inadequate or delayed rebates must be absorbed entirely by the covered entity. This creates a need for increased pre- dispensing review and oversight, further adding to staffmg demands. Rebate management itself represents a substantial and ongoing workload. Experience with existing rebate programs, such as MDPNP, demonstrates that dedicated personnel are required to effectively track, reconcile, manage rebate payments, and facilitate good-faith inquiries and resolutions. The addition of a 340B rebate model would significantly expand these responsibilities. On the administrative side, increased staffing inherently requires supervision, which in a pharmacy setting is typically provided by a licensed pharmacist. This introduces additional costs, as pharmacists represent highly trained and specialized personnel. In this context, supervising pharmacists would also need specific expertise in 340B program requirements, requiring further training or the recruitment of experienced staff. Critically, our experience indicates that HRSA's estimate of approximately 5 additional hours per week to manage rebate-related activities is a significant underestimation of the actual workload required. Internal analysis at our facility demonstrates that the time commitment is substantially higher. For example, across our 8 entity-owned pharmacies, 2 hospitals, 181 child sites, and 66 contract pharmacies, for the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027: Manual claims submission: estimated 1-2 additional hours per week Claims reconciliation: estimated 133 additional hours per week Prescription-filling: workflows would require further expanded time due to added verification and financial review steps ell University Toot Health 4502 Medical Drive San Antonio, Texas 78229 These estimates already exceed HRSA's projection several times over, and they do not fully capture the time required for reconciliation, dispute resolution, audit preparation, compliance oversight, and coordination with manufacturers and TPAs. At least 4 additional full-time employees will be needed initially. Should the rebate model expand to include all 340B-eligible medications, we estimate University Health would need over 20 additional full-time employees to manually submit and reconcile the hundreds of thousands of 340B claims processed monthly. In total, the staffing impact of a 340B rebate model is substantial, ongoing, and operationally disruptive. It introduces a level of manual workload and financial risk that necessitates significant personnel expansion while diverting critical resources away from patient care. We respectfully urge HRSA to reassess its assumptions regarding administrative burden and to fully account for the real-world staffing implications such a model would impose on covered entities. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. University Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. University Health maintains a robust, audit-ready data infrastructure designed to support compliance with the 340B Drug Pricing Program under the current upfront discount model. Data is collected, maintained, and retained to meet compliance requirements and ensure readiness for audits conducted by HRSA, manufacturers, and other stakeholders. We rely on a combination of integrated internal systems and TPAs to manage 340B-related data. Key systems include pharmacy dispensing platforms that capture detailed prescription-level data, such as National Drug Code (NDC), quantity dispensed, day's supply, prescriber, and dispensing location. Electronic health record systems provide patient-level and encounter data, including outpatient status and provider eligibility. Split-billing software supports replenishment processes and ensures appropriate 340B accumulation, while wholesaler procurement reports provide invoice-level purchasing data necessary to validate drug acquisition. For contract pharmacy arrangements, we use TPAs to manage accumulators, claims data, and reporting functions. These systems are designed to align dispensing activity with 340B eligibility requirements and to support compliance monitoring, not to facilitate rebate submission or financial reconciliation with manufacturers. University IV Health 4502 Medical Drive San Antonio, Texas 78229 To ensure data accuracy and compliance, our organization conducts routine internal and external audits. These include reviews of patient eligibility, provider status, encounter dates, and registered locations, as well as duplicate discount and diversion audits. We also conduct HRSA audit readiness activities, including mock audits and documentation validation, and support manufacturer and pharmacy benefit manager (PBM) audits by ensuring full data traceability from claim to accumulation. Policies and procedures are continuously updated in response to changes in HRSA guidance and manufacturer requirements, and contract pharmacies are regularly audited. Impact of a 340B Rebate Model on Data Collection Activities. A 340B rebate model would fundamentally change data collection and management processes for University Health. While our existing systems support eligibility determination and compliance under an upfront discount structure, they are not designed to generate, format, and transmit claim-level data for rebate submissions to multiple manufacturers. The changes required would extend beyond a one-time system update. Although initial implementation would involve significant system configuration and workflow redesign, the majority of the burden would be ongoing. Each claim would require continuous tracking, validation, submission, reconciliation, and potential resubmission. This would represent a permanent shift from largely automated processes to a labor-intensive, transaction-based model that requires sustained administrative effort. To meet the data requirements of a rebate model, our organization would need to extract and reconcile information from multiple internal systems that do not currently operate in a unified manner for rebate processing. These include pharmacy dispensing systems, EHR platforms, split-billing software, wholesaler purchasing data, and TPA-managed contract pharmacy systems. Although these systems collectively contain relevant data elements, they are not structured to produce a standardized, manufacturer- ready dataset for rebate submission. As a result, significant manual intervention would be required to: Aggregate data across systems Match claims to purchasing and eligibility records Validate data accuracy and completeness Format submissions according to varying manufacturer requirements In addition, ongoing manual work would be required to track rebate submissions, resolve discrepancies, respond to manufacturer inquiries, and manage denied or disputed claims. These activities create inefficiencies, increase the risk of errors, and require dedicated staffing. et University TEO Health 4502 Medical Drive San Antonio, Texas 78229 Assessment of HRSA's Data Burden Assumptions. University Health does not agree with HRSA's assertion that the data required under a rebate model would be comparable to data already collected and maintained by covered entities, or that the associated burden would not be significant. While our organization maintains extensive data for 340B compliance, the purpose and usability of that data is fundamentally different from what would be required under a rebate model. Current systems, including those used by TPAs, are designed to support compliance monitoring, eligibility validation, and duplicate discount prevention. They do not support the end-to-end processes required for rebate submission, including claim-level financial reconciliation, submission tracking, denial management, and appeals. Additionally, data currently shared with manufacturers in limited contexts (e.g., claim validations) does not match the scope, format, or frequency required under a rebate model. A rebate system would require standardized, recurring submissions across multiple manufacturers, each of which may impose different data specifications and submission processes. This lack of standardization significantly increases complexity and administrative burden. Comparisons to data submitted under programs such as the MDPNP are also not applicable. Those processes are supported by defined federal infrastructure and standardized requirements, whereas a 340B rebate model would require covered entities to independently manage data exchanges with numerous manufacturers, each with unique expectations. For these reasons, the assumption that implementation would be straightforward or that the burden "may not be significant" does not reflect operational reality. Instead, a rebate model would introduce substantial, ongoing, resource-intensive, and operationally disruptive data collection, validation, and reporting requirements. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force University Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. While University Health currently maintains sufficient cash on hand to technically withstand a rebate-based payment model for a limited number of designated medications, doing so would require a meaningful reallocation of financial resources away from core strategic priorities. Cash currently deployed et University TEO Health 4502 Medical Drive San Antonio, Texas 78229 to expand access, invest in infrastructure, and support care delivery for vulnerable populations would instead be tied up in temporary financing for drug manufacturers. This represents a fundamental shift in financial burden from manufacturers to covered entities and undermines the intent of the 340B program. Although University Health is not directly subject to bond covenant requirements tied to liquidity thresholds, reductions in available cash still carry significant financial consequences. Lower liquidity levels can negatively affect bond ratings, which in turn increases borrowing costs. This would directly affect the affordability of future capital projects, including facility expansions, equipment investments, and service line growth, particularly those designed to serve safety net populations. In addition, a rebate-based model would significantly alter payment timing compared to current wholesaler arrangements, where discounts are applied upfront, and financial certainty is established at the point of purchase. Under a rebate model, University Health would be required to purchase drugs at WAC rather than at 340B and wait for reimbursement through a rebate process, introducing delays and uncertainty into revenue cycles. The financial impact would be substantial, immediate, and unsustainable. See confidential submission for University Health's estimated financial impact. This challenge is compounded by the realities of medical claims adjudication. The proposed pilot program's 45-day rebate submission window begins on the dispensing date; however, rebate submissions require fully adjudicated and validated claims. In practice, claims adjudication timelines often conflict with this requirement. For example, Medicaid timely filing limits can be as short as 90 days from the date of service, and the adjudication process frequently consumes a significant portion of that window. By the time a claim is finalized, a substantial portion, or potentially all, of the 45-day rebate submission window may have elapsed. This misalignment creates a high risk that eligible claims will miss rebate submission deadlines entirely, resulting in unrecoverable financial losses. It also necessitates additional administrative effort to accelerate claims processing, further increasing operational burden. University T...T Health 4502 Medical Drive San Antonio, Texas 78229 Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that University Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post- sale rebates. University Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. University Health relies on 340B savings generated through upfront discounts as a predictable and integral component of its financial planning. These savings are embedded in cash flow projections and long- term strategic planning, supporting investments in patient care services, infrastructure improvements, and program expansion. The proposed rebate model introduces both delay and uncertainty into these savings. In addition to the timing challenges, the model creates new administrative costs associated with developing IT infrastructure for data extraction, managing complex submission processes, conducting reconciliation, and tracking payments. These are costs that do not exist under the current model and represent an unfunded mandate. Collectively, these factors create unnecessary financial risk for a safety-net health system already operating under constrained margins. Impact on Services and Patient Care. Every dollar delayed under a rebate model is a dollar that cannot be invested immediately in patient care. Redirecting funds to administrative processes and temporary financing obligations reduces the resources available to support clinical services, staffing, and community health initiatives. 340B savings currently enable University Health to provide care to uninsured and underinsured populations that would otherwise be financially unsustainable. These resources support essential services that improve health eit University T.Or Health 4502 Medical Drive San Antonio, Texas 78229 outcomes and help patients return to productive, stable lives. Delays or reductions in these savings put these programs at direct risk. If rebate payments are delayed by 60 to 90 days or longer, the resulting decrease in available cash flow would constrain the organization's ability to deploy resources efficiently. This could lead to reduced service capacity, delayed hiring, and limitations on program expansion. Impact on Strategic Projects and Growth. The financial uncertainty introduced by a rebate model would also affect University Health ability to plan and execute critical projects. Reduced liquidity and increased borrowing costs would likely delay or prevent the rollout of new initiatives, particularly those aimed at expanding access for underserved populations. Projects involving new service lines, facility upgrades, or community-based care expansion could be postponed or scaled back as the organization adjusts to the financial and operational impacts of the model. Over time, this would diminish the health system's capacity to meet growing community needs. The transition to a rebate-based model would impose significant cash flow challenges, disrupt established financial planning processes, and introduce new administrative costs and risks. By delaying access to 340B savings and shifting financial burden onto covered entities, the model would weaken the ability of safety net providers like University Health to invest in patient care and community health. We respectfully urge HRSA to carefully consider the real-world financial and operational implications of a rebate model, particularly its impact on liquidity, service delivery, and long-term sustainability for covered entities serving vulnerable populations. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. First, the participation agreement governing use of the Beacon platform contains provisions that are incompatible with the legal and constitutional framework under which University Health operates as a political subdivision of the State of Texas. Specifically, the agreement requires the health system to contractually accept governance under the laws of the State of Illinois. University Health lacks the authority under its enabling statutes to agree to the application of another state's laws in this manner, and such provisions raise serious enforceability and jurisdictional concerns, as well as potentially exposing the Hospital District and its agents to unknown liabilities. University TEO Health 4502 Medical Drive San Antonio, Texas 78229 Second, the agreement requires execution of a Business Associate Agreement without providing sufficient access and opportunity to review vendor security protocols to verify that appropriate data security and privacy safeguards are in place. Given the sensitive nature of the data involved, including protected health information and detailed claims data, this lack of transparency and assurance poses unacceptable compliance and cybersecurity risks. Third, the agreement includes provisions that effectively require University Health to grant a broad license for the use of its de-identified data without compensation. This amounts to an improper gift of valuable patient data to a third party. Likewise, the scope of allowed use under the "data license" extends beyond what is necessary for program administration and would allow the vendor to use the data in ways the organization would not otherwise agree to. As a public entity, University Health must carefully manage and safeguard all data assets and cannot "gift" data rights in a manner that could be interpreted as providing value without appropriate authorization or benefit. Such provisions raise concerns under state constitutional restrictions on the use of public resources. Additionally, the agreement includes indemnification requirements that obligate University Health to assume liability for certain third-party claims. As a governmental entity, University Health is subject to constitutional and statutory limitations that restrict its ability to enter into open-ended indemnification agreements. These provisions are not only inconsistent with state law but also, in many cases, legally impermissible. This issue is compounded by the required agreement to accept foreign state law. Finally, the agreement requires the individual executing the contract to warrant that they have authority to bind University Health to all terms and conditions. This presents a significant hurdle because to the extent the above provisions conflict with state law or constitutional requirements, no individual employee or representative of the hospital district has the authority to bind the organization to such provisions. Taken together, these issues pose fundamental barriers to participation in a rebate model reliant on the Beacon IT platform. The legal, compliance, and governance concerns outlined above are not minor or technical; they are structural and, in some cases, prohibitive for public health systems. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on University Health HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. ell University TKO Health 4502 Medical Drive San Antonio, Texas 78229 Likewise, we support the American Hospital Association's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, University Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow University Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. die 1/(47.617...C Bill P Chie Operating Officer University Health
HRSA-2026-0001-2175Dignity Health2026-04-20T04:00Z6,876 chars
ISSUE: 340B Rebate Model - Please find attached a comment letter from Mercy Medical Center Redding t.i, Dignity Health0 04 Mercy Medical Center Redding April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3406 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Mercy Medical Center Redding, a member of Common5pirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Medical Center Redding that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Medical Center Redding relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Mercy Medical Center Redding leverages the 340B program to ensure comprehensive service to all community members, a necessity given that standard Medicare and Medi-Cal reimbursements typically do not cover the full cost of medications. The resultant savings on pharmaceuticals are strategically reinvested into critical cancer-related services. These include: the Lung Cancer Screening Program, designed for early identification in high-risk individuals; "Quit for Good," an eight-session tobacco cessation program; and the Breast Cancer Early Detection Program, providing annual screenings Apr 20, 2026 Mercy Medical Center Redding HHS Docket No. HRSA-2026-03042 for women aged 40 and above. This emphasis on preventative care not only lowers the overall need for medications and associated costs but also contributes to substantial long-term savings for the community by mitigating the expenses associated with advanced diagnostic and treatment protocols. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions .of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, ._41,t,t5L G. Todd Smith President Mercy Medical Center Redding Apr 20, 2026 Mercy Medical Center Redding HHS Docket No. HRSA-2026-03042 As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2176Fairfax Medical Facilities, Inc.2026-04-20T04:00Z43,973 chars
Comment on FR Doc # 2026-03042 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Fairfax Medical Facilities, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $654,736.00 from entity- owned pharmacy operations and a 34% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Fairfax Medical Facilities, Inc. in particular, this means it will impact: 20,000 340B transactions/ 5,528 patients our CHC serves Current admin costs for the 340B program is $279,029.00 340B Revenue is currently used to support the Dental services and sliding fee scale discounts to the uninsured and underinsured patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Fairfax Medical Facilities, Inc. provided $93,385 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Fairfax Medical Facilities, Inc. anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Fairfax Medical Facilities, Inc. anticipates an increase of $70,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 7 Internal NACHC assessment (99 responses). 5 Fairfax Medical Facilities, Inc. estimates needing to hire 1 full-time equivalent to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Fairfax Medical Facilities, Inc. served 5,528 unique patients last year and our anticipated annual cost increase will be just under a $700,000.00 just for purchasing drugs in this pilot program and increased labor costs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Fairfax Medical Facilities, Inc. estimates it will incur an additional 8 hours per day will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Fairfax Medical Facilities, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,528 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $700,000.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. 8 Ibid. 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with one pharmacy to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across one different pharmacy location to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Osage County, Oklahoma with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. The 340B savings are directly passed on to the patients to ensure that cost is not a barrier to adherence, particularly for patients managing chronic conditions. Revenue generated through 340B savings is reinvested into patient care services, further reducing indirect barriers to medication access. CHCs improve medication adherence, reduce preventable hospitalizations, and advance health equity in underserved communities. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $728,000.00 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $20,382.23 to purchase these same drugs at the 340B ceiling price. This represents a 2281% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Fairfax Medical Facilities, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as dental services that provides essential dental care and additional dental services to patients in the Osage and Kay counties of Oklahoma. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Dental Assistant, directly increasing wait times for dental appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 403 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Fairfax Medical Facilities, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Fairfax Medical Facilities, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $58,705.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Fairfax Medical Facilities, Inc.s Data: Fairfax Medical Facilities, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $58,116.32. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Fairfax Medical Facilities, Inc., the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 11 a. Financial Impact of Rebate Denials and Delays Fairfax Medical Facilities, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $29,700.00. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Fairfax Medical Facilities, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Fairfax Medical Facilities, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Fairfax Medical Facilities, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tammy Leeper at tleeper@fairfaxclinic.com. Sincerely, Tammy Leeper CEO Fairfax Medical Facilities, Inc.
HRSA-2026-0001-2177Organization for Latino Health Advocacy2026-04-20T04:00Z6,926 chars
To Whom It May Concern, On behalf of the Organization for Latino Health Advocacy (OLHA), I am writing to provide formal comments regarding the 340B Rebate Model pilot program under consideration by the Health Resources and Services Administration (HRSA). OLHA supports reforms that center the patients, especially low-income patients who are disproportionally impacted by the rising costs of life-saving medications and limited access to quality healthcare. When patients continue to face significant financial burdens, it is reasonable to ask whether available program discounts are reaching those they were intended to help. Established in 2024, OLHA is a national nonprofit organization committed to empowering Latino communities across the United States to achieve optimal health and well-being through education, outreach, and research. Our mission is to ensure that Latinos and other medically underserved populations have equitable access to the resources, knowledge, and support needed for healthy, fulfilling lives. Rooted in a community-based participatory approach, OLHA seeks to place the voices of Latino communities at the forefront of our research and public health policy development. If HRSA proceeds with a rebate-based structure, I encourage the agency to design it in a way that enhances transparency and strengthens accountability while protecting patient access in the following ways: Prioritizing the Patient and Safety-Net Providers The 340B program must be transitioned back into a true safety-net program. OLHA advocates for policies that ensure 340B prescriptions are offered directly to patients at a discount, ensuring that the financial benefits of the program reach the individuals who need them most. We understand that the rebate model would be detrimental to community clinics that serve low-income and rural populations who have neither the financial nor human resource capacity to wait to be reimbursed. OLHA is not opposed to exempting federally qualified health centers from paying the 340B ceiling price for covered drugs at the time of purchase to minimize the administrative burden this would place on true safety-net providers. Strengthening Transparency While it is imperative that all parties hold themselves accountable to reduce inefficiencies, patients are rarely informed of how this program benefits them. Patients are not always aware that medications were purchased at a 340B discount or how those savings were used to their benefit. Any rebate model should ensure that patients are informed that discounted medications are available to them directly to reduce their out-of-pocket costs. Enhancing Federal Oversight Finally, the current lack of clear regulatory authority hampers the ability to provide consistent oversight. Strengthening the federal administration of the 340B program will ensure that all stakeholders are held to the same high standards of accountability. The 340B program is essential for the health of our communities, and any new rebate model should focus on delivering the best value for the patients who rely on it the most. OLHA strongly recommends the agency ensure that all discounts are traceable and reach the patients it was designed to serve. Sincerely, Jeanette Contreras, MPP Founder & Executive Director LatinoHealthAdvocacy.org 1 April 20, 2026 Chantelle Britton, Director, Office of Pharmacy Affairs (OPA), Office of Special Health Initiatives, HRSA 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 RE: HHS Docket No. HRSA-2026-03042 To Whom It May Concern, On behalf of the Organization for Latino Health Advocacy (OLHA), I am writing to provide formal comments regarding the 340B Rebate Model pilot program under consideration by the Health Resources and Services Administration (HRSA). OLHA supports reforms that center the patients, especially low-income patients who are disproportionally impacted by the rising costs of life-saving medications and limited access to quality healthcare. When patients continue to face significant financial burdens, it is reasonable to ask whether available program discounts are reaching those they were intended to help. Established in 2024, OLHA is a national nonprofit organization committed to empowering Latino communities across the United States to achieve optimal health and well-being through education, outreach, and research. Our mission is to ensure that Latinos and other medically underserved populations have equitable access to the resources, knowledge, and support needed for healthy, fulfilling lives. Rooted in a community-based participatory approach, OLHA seeks to place the voices of Latino communities at the forefront of our research and public health policy development. If HRSA proceeds with a rebate-based structure, I encourage the agency to design it in a way that enhances transparency and strengthens accountability while protecting patient access in the following ways: Prioritizing the Patient and Safety-Net Providers The 340B program must be transitioned back into a true safety-net program. OLHA advocates for policies that ensure 340B prescriptions are offered directly to patients at a discount, ensuring that the financial benefits of the program reach the individuals who need them most. LatinoHealthAdvocacy.org 2 We understand that the rebate model would be detrimental to community clinics that serve low- income and rural populations who have neither the financial nor human resource capacity to wait to be reimbursed. OLHA is not opposed to exempting federally qualified health centers from paying the 340B ceiling price for covered drugs at the time of purchase to minimize the administrative burden this would place on true safety-net providers. Strengthening Transparency While it is imperative that all parties hold themselves accountable to reduce inefficiencies, patients are rarely informed of how this program benefits them. Patients are not always aware that medications were purchased at a 340B discount or how those savings were used to their benefit. Any rebate model should ensure that patients are informed that discounted medications are available to them directly to reduce their out-of-pocket costs. Enhancing Federal Oversight Finally, the current lack of clear regulatory authority hampers the ability to provide consistent oversight. Strengthening the federal administration of the 340B program will ensure that all stakeholders are held to the same high standards of accountability. The 340B program is essential for the health of our communities, and any new rebate model should focus on delivering the best value for the patients who rely on it the most. OLHA strongly recommends the agency ensure that all discounts are traceable and reach the patients it was designed to serve. Sincerely, Jeanette Contreras, MPP Founder & Executive Director
HRSA-2026-0001-2178Tufts Medicine2026-04-20T04:00Z22,617 chars
See attached file(s) 800 District Avenue Suite 520 Burlington, MA 01803 T 978.942.2220 tuftsmedicine.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA2026 03042) Dear Administrator Engels: Tufts Medicine thanks you for the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information (RFI): 340B Rebate Model Pilot Program. Tufts Medicine is a Massachusetts-based health system with more than 13,000 employees, and 2,000 affiliated physicians, across four community hospital campuses, an academic medical center, and a home care enterprise reaching from Cape Cod to the New Hampshire border. An integral part of our mission is to improve the health of our community and address the health problems of at-risk and medically underserved populations. Two of our hospitals, Tufts Medical Center and Lowell General Hospital, participate in the 340B program as Disproportionate Share Hospital covered entities. The 340B program plays a vital role in carrying out our mission and ensuring that our providers can provide high-quality, high-touch care for the vulnerable populations we serve. Tufts Medicine strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed the 340B program for more than 30 years. We are deeply concerned that a rebate-based approach moves the program further away from its original intent: enabling safety-net hospitals that serve large numbers of low-income and vulnerable patients to stretch scarce resources and increase affordability of prescription drugs for vulnerable populations. Further, we are concerned that a shift toward a rebate model undermines the Administrations goals of reducing unnecessary bureaucracy and provider burden. Instead of simplifying 340B and reinforcing its mission, this approach risks creating additional expense and complexity while weakening the very safety-net the program was designed to protect. Any 340B reforms should seek to uplift and promote covered entities critical role in providing care for low-income and underserved patients and hold all actors accountable for their statutory requirements under the program, including pharmaceutical manufacturers and pharmacy benefit managers (PBMs). Background on Tufts Medicine 340B Community Benefit and Program Integrity 2 Tufts Medicine operates two 340B hospitals Tufts Medical Center in Bostons Chinatown neighborhood and Lowell General Hospital in Lowell, Massachusetts. As Disproportionate Share Hospitals, nearly 70% of our patient mix is covered by public payers, and our commercial rates fall below the median for our peers. The 340B program is therefore essential to sustaining our mission of serving high-need communities. Through the 340B program, Tufts Medicine reinvests directly into community benefit programs and uncompensated care. These savings support critical services such as our pharmacy program that provides pharmacist-coordinated care for over 7,500 patients to improve medication safety, health education, and outcomes for chronic and specialty therapies. It also supports a variety of other programs aimed at enhancing community wellness and chronic disease management from smoking cessation to substance use disorder programs and ensures access to low-cost medications through free mail-order and copay assistance programs. Without 340B, many of these services would be scaled back or eliminated. We also maintain the highest standards of program integrity. We carve out all Medicaid prescriptions from external contract pharmacy arrangements, audit 100% of claims, conduct monthly internal audits across all care sites, and engage external auditors annually to ensure compliance. Our contract pharmacy agreements include strict safeguards, and we remove partners that do not meet our standards. Our robust approach to program integrity demonstrates how 340B programs can operate effectively, as intended by Congress, and we strongly disagree that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). Below, we provide additional detail and respond to the questions posed by HRSA in the RFI. We appreciate the opportunity to offer these comments and thank HRSA for its continued engagement with hospitals on this critical issue. Costs to Covered Entities Drug Acquisition Costs Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. The data fields being requested are not easily or readily available from most electronic health records and are not consistent across all covered entities. Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, covered entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. 3 Staffing impacts A rebate-based model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care outcomes that conflict with the program's statutory intent. We anticipate needing to hire at least 2.0 FTE to manage submission of claims data, track rebate data, validate and audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, and file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). We have already had to reallocate staff hours to work on rebate reconciliation with the Medicare Part D rebates. Our staff must work in the Medicare Transaction Facilitator, Second Sight Solutions Beacon MFP platform, and our EHR to try to reconcile issues where rebates are being paid on claims that are 340B and not being paid on non-340B claims incorrectly identified by manufacturers as 340B. It takes multiple pharmacists and technicians from each of our dispensing pharmacies along with our finance team at least 10 hours per week to work on reconciling these payments, identifying missing payments, and marking claims as 340B eligible on Beacon MFP. There is a way to identify a claim as 340B, but there is not a way to identify non-340B claims that have been incorrectly classified and no rebate has been paid. This time commitment is spent trying to reconcile rebates and does not include data collection, report preparation, data submission, or auditing purchases that would be required in a rebate model. Systems and Infrastructure Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as an inability to address errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacies, the administrative burden and financial risk would increase greatly. 340B ESP does not currently provide transparency in their practices comparing covered entity purchases with claims submitted by the covered entity despite numerous requests with their customer service. For example, after Lowell General Hospital had pricing cut off due to the assertion that our purchases outnumbered claims for Novo Nordisk, we requested purchasing information and found that purchases from Tufts Medical Centers in-house and contract pharmacies were attributed to the submission balances of Lowell General Hospital, a completely different covered entity. Once this issue was uncovered for one manufacturer, both covered entities requested information on which accounts were being monitored for purchases and used by 340B ESP to establish these submission balances that dictate whether our covered entities are denied pricing. These requests were repeatedly denied and ignored. The manufacturers and their chosen third-party platform demand transparency from covered entities but are unwilling to be transparent themselves. With the added complexities of the rebate model, this unreliable platform will introduce increased inaccuracy in comparison of data submission and purchases, which will result in covered entities being unfairly denied rebate payments. We will also need to adopt technology solutions for clean site areas where only 340B drugs are dispensed as these locations are not included in the data flowing to the third-party administrators. Some vendors charge additional fees to manage data submission for the covered entity. We would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. 4 Other potential impacts We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements, and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. It is also more difficult to collect and prepare the hospital claims data in comparison to pharmacy claims data. While preparing for the rebate model, our IT teams dedicated a significant amount of time to building custom reports and pulling as much information as possible but still we had concerns about our ability to complete the work before the looming January 1st deadline as the information is challenging to compile. There is also uncertainty with billing Massachusetts Medicaid fee-for-service plans, which require submission of actual acquisition cost (AAC) on the bill. We would need to build workarounds for our system to send pre-determined price values to avoid sending the WAC price as listed in the wholesale catalog that interfaces with our EHR and billing systems. Drugs purchased at WAC and billed under AAC billing requirements may result in unrecoverable financial losses if a rebate is denied. All these additional costs stand to harm the persons the program is intended to support: our most vulnerable patients. Some of the negative impacts we foresee include decreased support for our Patient Medication Affordability Assistance Program, which provides financial assistance to patients who cannot afford their medication, hospital outpatient clinic ancillary support services such as clinical services from pharmacists and nurses, care coordination, and nutrition counseling, or other community initiatives like smoking cessation and HIV clinics. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Our hospitals could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. Additional Recommendations HRSA Should Prohibit All Rebate Denials If HRSA chooses to move forward with a rebate-based program despite our concerns, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. If manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment, a rebate model will introduce significant operational uncertainty related to rebate denials and dispute resolution. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic mechanism for resolving disputes. Without these safeguards, our hospitals will face operational and 5 financial insecurity and uncertainty when it comes to recovering rebates owed under a rebate-based model. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit, as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform (Second Sight or Beacon) as its sole rebate administrator, forcing covered entities to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by covered entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip covered entities of any say over how their information is used or retained. The mandatory use of Beacon without oversight facilitates the improper monetization of patient and hospital data and cedes our legal rights and ability to protect the data to a private, for-profit entity for their own gain. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of covered entities sensitive data, far beyond what HIPAAs payment exception contemplates. Because a 340B rebate is simply a retrospective pricing adjustment, not payment for patient care, the scope of data collection required by Beacon is unnecessary for reimbursement, and instead, serves manufacturers interests in monitoring covered entities and shrinking the 340B Program. This arrangement exposes covered entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Tufts Medicine has attempted to negotiate reasonable terms and conditions with Second Sight, but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that covered entities and vendors do not have equal bargaining positions; approving a model similar to that proposed in 2025. HRSA will need to intervene to ensure fairness in contracting. A Rebate Model Is Not Necessary for MDPNP Deduplication In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that a primary driver of a rebate model is to facilitate deduplication of 340B Program purchases and MDPNP dispenses. As noted above, we disagree with this position and do not believe a rebate-based model is needed to address MDPNP deduplication. Tufts Medicine already has processes in place to address MDPNP deduplication. Furthermore, when Congress created the MDPNP it did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Price (MFP) not both. More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or covered entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug, and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug. A rebate model would shift this compliance burden and its associated costs from the manufacturer, where Congress placed it, to covered entities. 6 We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to fairly adjudicate rebate requests. For drugs dispensed through our system pharmacies, manufacturers have denied our MDPNP refund requests because they assert without evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and received neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for an unrelated 340B drug purchase. This is a cumbersome, inefficient and time-consuming process that needs to be addressed. Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Tufts Medicine hopes that HRSA, as it considers this proposal, will also consider reasonable alternatives. For example, states and covered entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissions, such as 340B modifiers and other claim details, without shifting administrative costs or burdens. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs without having control over the data would also address legal and financial concerns while avoiding conflicts of interest which are evident with the current third-party vendors being required by manufacturers. Tufts Medicine encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. In addition, we believe there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027, and would only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Tufts Medicines patient population, we serve many other patients, including patients with no coverage at all. Requiring our hospitals to initially overpay for non- Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce broader inequities. We are concerned that this approach undermines the intent of the 340B Program by forcing covered entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrestle control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Tufts Medicine and the patients we serve in our communities. Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining important access points for our patients. Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Tufts Medical Center, Lowell General Hospital, and the communities we serve. We hope that HRSA will seriously consider, and meaningfully address, the questions presented in this letter, take 7 account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our health care safety net and the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We appreciate any opportunity to discuss our comments further. Sincerely, Erica Diamantides, PharmD, MHA, BCPS, FASHP Tufts Medicine VP, Ambulatory Pharmacy
HRSA-2026-0001-2179OCHIN2026-04-20T04:00Z10,659 chars
Please find OCHIN's response attached. Submitted via Federal Register April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Director Britton, OCHIN appreciates the opportunity to respond to HRSAs Request for Information seeking input on the potential use of a 340B rebate model program. We understand that HRSA seeks information to assess a rebate model, including how it would address potential duplicate discounts, interact with the Medicare Drug Price Negotiation Program, and operate in practice for rural and lowresourced covered entities. At the outset, any consideration of a rebate model should remain grounded in the statutory purpose of the 340B Program, which is to help covered entities stretch limited federal resources to maintain patient access. The core purpose of the 340B Program must remain support for the health care safety net. For rural and lowresourced providers operating on thin to negative margins, including federally qualified health centers (FQHCs), other community ambulatory covered entities, and critical access hospitals (CAHs), pricing predictability, stable cash flow, and manageable administrative requirements are essential to continue keeping the doors open for patients. For decades, and most especially now with forthcoming changes to Medicaid rural and low-resourced providers need upfront 340B pricing to maintain access to care including to support pharmacy operations. We urge HRSA to target reforms to documented gaps, rather than restructuring the program in a way that shifts financial risk onto rural and safety-net providers. OCHIN: Shared Infrastructure Built for Trust, Affordability, and Scale OCHIN is a nonprofit shared health IT and services organization supporting more than 300 independent providers across 44 states, including FQHCs and critical access hospitals. Our network includes nearly 44,000 providers nationwide, generating realworld evidence from routine clinical care across rural, tribal, and other historically underserved communities. Through our shared Epic electronic health record infrastructure and related services, we observe firsthand the operational complexity, data dependencies, and resource demands associated with implementing new regulatory reporting requirements across various provider types. OCHINsupported providers rely on 340B savings to reduce medication costs for patients, sustain pharmacy operations, and support primary and specialty care services, particularly in rural and lowresourced communities. At the same time, providers in our network are increasingly experiencing death by a thousand cuts from a myriad of reporting requirements, cybersecurity obligations, 2 expanding HIPAA and interoperability obligations and a growing number of pharmaceutical manufacturers imposing duplicative, nonstandardized data submission requirements as a condition of 340B participation. Covered entities must navigate multiple manufacturerspecific forms and compliance workflows, even when the underlying information is largely duplicative. This fragmentation consumes limited administrative capacity and diverts resources away from patient care and pharmacy operations, without improving program integrity. It remains unclear why manufacturers require this level of covered entity data at all to achieve program integrity objectives. Expanding data sharing without enforceable safeguards increases cybersecurity risk and undermines trust in the program. OCHIN has serious concerns regarding cybersecurity and data governance under a rebate-based model. Covered entities would be required to transmit sensitive claims-level and utilization data to pharmaceutical manufacturers without clear federal standards governing data access, use, retention, or security controls. 340B Is Lifeline to Maintaining Access in Rural and Underserved Communities OCHINs financial analysis shows that 340B savings are essential to literally keeping the doors open for many rural and lowresourced providers. Rural and low-resource providers have limited or no financial reserves and high levels of uncompensated care. Underscoring the critical role this funding plays to access is a sample analysis of ambulatory community OCHIN network providers. In the analysis, 340B net revenue accounted for an average of 11 percent of total revenue. And in a sample of network CAHs, 340B net revenue averages 14 percent of total revenue, with a wide revenue range (from 2% to 54%) reflecting local payer mix and service composition. These funds helped close persistent structural funding gaps. Without this funding, these providers would have had to reduce services or worse still face unsustainable financial insolvency. Key Concerns with a Rebate-Based Model OCHIN has significant concerns that a rebate model impacting community clinic and rural providers would impose cost prohibitive administrative burden, financial risk, and operational complexity without clear, corresponding benefits to 340B program integrity. Switching from upfront discounts to delayed rebates would strain the finances of rural and low-resourced providers, who often cannot afford to wait for reimbursement and would be forced to float costs until payment when they lack margin and cash reserves already. For many safetynet providers, this would require borrowing, redirecting limited resources, or scaling back pharmacy operations. Requiring providers to purchase drugs at full wholesale acquisition cost while awaiting retrospective reimbursement introduces cash flow exposure that they are not positioned to manage and cannot afford. They do not have the financial reserves or access to finance this additional cost even on a revolving basis. Our experience underscores the sensitivity of patient outcomes to pharmacy funding disruptions. OCHIN Epic data suggests a meaningful decline of medication adherence by approximately 8 to 12 percent when clinics experience pharmacy funding lags lasting longer than one month, underscoring the direct relationship between payment timing and patient access to clinically necessary medications. Even short delays in rebate payment, increased denial rates, or inconsistent manufacturer requirements could directly affect providers ability to maintain services, particularly for organizations with limited balance sheets, constrained administrative staffing, and reliance on contract pharmacy arrangements. 3 RECOMMENDATIONS Accordingly, OCHIN offers the following recommendations for HRSAs consideration: HRSA should not implement a mandatory rebate model for any 340B covered entities. At a minimum, the agency should exempt CAHs, CHCs, and other ambulatory communitybased covered entities from any rebatebased programs. Rural and lowresourced providers face disproportionate cashflow and administrative risk that could undermine access to care in highneed communities. FQHCs, CAHs, and similar providers are already among the most highly regulated in the healthcare system, with extensive community benefit and reporting obligations. Any data collection needed to support program oversight should be coordinated by HRSA, not manufacturers. Manufactureroperated rebate and data systems shift administrative burden, financial exposure, and compliance risk onto covered entities without adequate federal oversight. Covered entities should not be required to interface with multiple manufacturerspecific systems as a condition of participation. A centralized, HRSAled approach is necessary to protect program integrity while minimizing burden on safetynet providers. Establish a HIPAA and cybersecurity holdharmless provision for covered entities facing increased breach risk resulting from expanding data exchange and reporting requirements. As reporting obligations expand including manufacturerdriven requirements covered entities face heightened HIPAA and cybersecurity risk. These risks disproportionately affect rural and ambulatory communitybased providers with limited financial and technical capacity, particularly as they also face funding reductions associated with forthcoming Medicaid cuts. Many are least prepared to prevent, respond to, or underwrite increasingly sophisticated cyber threats given constrained infrastructure and persistent cybersecurity workforce shortages. To operationalize a centralized clearinghouse, HRSA should establish or designate a national, neutral clearinghouse to manage 340B data and support duplicate discount prevention. Covered entities already comply with statutory requirements and are subject to audit and oversight. Ongoing challenges are more often driven by payer data and claimslevel limitations than provider compliance failures. A rebate model does not resolve these constraints and would add administrative burden and dispute risk. A neutral clearinghouse would preserve upfront discounts, reduce duplicative manufacturer processes, limit unnecessary data disclosure, and improve consistency and accuracy in deduplication. If HRSA proceeds with a rebate model, participation should be strictly voluntary and narrowly scoped. Any rebate pilot should be voluntary and limited, with clear safeguards to ensure neutrality or a demonstrable net benefit for participating covered entities. If HRSA proceeds, clear and enforceable guardrails must be required to protect covered entities. At a minimum, manufacturers should bear administrative and financial responsibility, payment timelines must be standardized and timely, and data submission should be limited to information already generated through routine dispensing and billing. OCHIN urges HRSA to reconsider whether a rebatebased approach is appropriate for further development given the significant burden it would impose on rural and lowresourced covered entities. At a minimum, HRSA should not move forward with collecting covered entity data under a rebate model 4 unless and until the administrative, financial, and operational impacts demonstrated here can be meaningfully reduced. Thank you for engaging with stakeholders on this important issue. We look forward to continuing the conversation as HRSA considers next steps. Please contact me at stollj@ochin.org if we can provide any additional information to support your efforts. Sincerely, Jennifer Stoll Chief External Affairs Officer
HRSA-2026-0001-2180HOMETOWN Health Center2026-04-20T04:00Z38,747 chars
See attached file(s) 55 Fletcher Drive Palmyra, ME 04965 1-866-364-1366 hometownhealthcenter.org April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Sebasticook Family Doctors d.b.a. HOMETOWN Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide with both a financial loss as well as the projected cost increases associated with supporting yet another 340B platform. HOMETOWN Health Center is a Federally Qualified Health Center and is committed to advancing health equity by delivering high-quality, accessible, and affordable care to underserved and rural populations across central Maine. In addition to primary care, we provide dental, behavioral health, podiatry, and wellness services. Our mission is to provide compassionate, comprehensive, affordable, and accessible health care to people of all ages, regardless of economic status. In 2025, we used our $300,00 in savings from the 340B program for programs that help our patients directly. While this may not seem like a lot of money, it ensured that: We were able to get medications to our most at-needed patients with no copay worth over $300,000 by working directly with manufacturers and charities. We were able to provide critically needed social support working directly with our patients to assist in immediate needs such as food insecurity and transportation issues to access healthcare or pick up medications. These are real and tangible supports for our patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Staffing Impact: HOMETOWN Health Center anticipates needing 0.30 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model resulting in an estimated $24,336 in cost. While this does not seem like a large amount, we are a small rural healthcare center and every penny counts. External Vendor Costs: Given increased complexity, HOMETOWN Health Center anticipates an increase of $15,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. HOMETOWN Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 5 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with four pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 15 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In fact Walmart has already decided to block 340B prescriptions that fall under the Rebate Pilot Program resulting in a decrease in 340B claims. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 7 Internal NACHC survey data 6 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.8 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.9 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).10 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 8 HRSA FAQ 9 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B11 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.12 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 11 https://340bpricing.hrsa.gov/ 12 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 8 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $213,678 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $32,104 to purchase these same drugs at the 340B ceiling price. This represents a 66% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HOMETOWN Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Community Health Worker and Prescription Assistance services. Workforce & Staffing: The administrative burden of this pilot will require us to divert funds away from patients. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HOMETOWN Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 9 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HOMETOWN Heath Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $69,783.26. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HOMETOWN Health Center estimates that purchasing the selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $459,083.13 in 2027 and a total of $575,010 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $112,931 in 2027 and $141,761 in 2028funds that are currently dedicated to Prescription Assistance and Community Health Worker services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on HOMETOWN Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Hometown Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.13 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate based on how the MFP is 13 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 10 working today would result in a net annual loss of $69,783 in 2027 and $87.327 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP) Standardized, publicly defined denial categories with claimlevel documentation Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 11 V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. 12 Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HOMETOWN Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law HOMETOWN Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HOMETOWN Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Alicia Millette, HOMETOWN Health Centers Primary Contact at Alicia.millette@hhcme.org. Sincerely, Robin Winslow Robin Winslow CEO HOMETOWN Health Center
HRSA-2026-0001-2181(no commenter metadata)2026-04-20T04:00Z9,920 chars
See attached file(s) Greater gli pi Regional 1700 WEST TOWNLINE ST. CRESTON, IA 50801 641-782-7091 Greater Regional Health 1700 W Townline St Creston, IA 50801 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Adrninistrator Engels: On behalf of Greater Regional Health (GRH), located in Creston, Iowa, we appreciate the opportunity to respond to the Department of Health and Human Services' Request for lnformation: 3408 Rebate Model Pilot Program. We strongly oppose implementation of any rebate-based mechanism within the 340B Program, including any pilot program. The existing upfront discount model is efficient, predictable, and administratively workable. A rebate model would impose substantial new burdens on covered entities, diverting scarce resources away from patient care and undermining the statutory purpose of the 340B Program. General Feedback on Whether HRSA Should Implement a 340B Rebate Model HRSA asks whether it should implement a rebate model as an alternative to upfront discounts. Our answer is no. For more than 30 years, HRSA has implemented the 340B statute through upfront discounts, enabling covered entities to reliably access savings at the point of purchase. This approach aligns with Congress's directive that covered entities be able to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." A rebate model would reverse that structure, introducing unnecessary administrative complexity, cash flow risk, and uncertainty. HRSA has not identified any systemic failure of the upfront Greater Regional HEALTH 1700 WEST TOWNLINE ST. CRESTON, IA 50801 641-782-7091 discount model that would justify such a fundamental change, particularly one that would disproportionately burden safety net providers. Administrative and Operational Costs of a 340B Rebate Model HRSA seeks estimates of the incremental administrative and operational costs hospitals would incur under a rebate model. A rebate mechanism would require our hospital to establish entirely new administrative processes that do not exist today, including: Preparing, validating, and submitting rebate claims for each eligible dispense; Monitoring varying manufacturer payment timelines; Reconciling partial payments, underpayments, or denials; Compiling documentation to challenge improper denials; Tracking outstanding balances across multiple manufacturers; Responding to increased audits, inquiries, and compliance reviews. Based on widely shared industry experience, even a limited rebate program would require hundreds of additional staff hours annually, new or expanded third party administrator arrangements, and ongoing legal and compliance oversight. These costs would not be one-time expenses; they would recur for the duration of the program. As the number of drugs increases, potentially up to 25 across multiple manufacturers, administrative burden increases exponentially. For many hospitals, including ours, these costs would consume a meaningful share of 340B savings, directly reducing funds available for patient care. Staffing Impacts of a 340B Rebate Model HRSA requests information on whether a rebate model would require additional staff or reallocation of existing staff time. GRH does not currently employ personnel dedicated solely to rebate administration because such roles are unnecessary under an upfront discount model. A rebate mechanism would require either: Hiring dedicated reimbursement, finance, or compliance staff; or Reallocating existing pharmacy, finance, and compliance staff away from patient supporting- functions. Greater 111 Regional HEALTH 1700 WEST TOWNLINE ST. CRESTON, IA 50801 641-782-7091 Either approach would strain an already limited workforce. Diverting clinical and pharmacy resources toward administrative tasks would reduce operational capacity and increase burnout. HRSA's estimate that hospitals would spend approximately five additional hours per week administering a rebate program significantly understates the true workload. That estimate does not account for claim volume, manufacturer specific requirements, payment delays, denial appeals, or audit readiness. In practice, rebate administration would require continuous, ongoing effort. Systems, IT, and Infrastructure Requirements HRSA asks about the systems and infrastructure changes that would be required to implement a rebate model. GRH's current IT systems, including pharmacy platforms, EHRs, and billing systems, are designed to support purchase time discounts, not post-purchase rebates. A rebate model would require: Costly new data integration tools or manual extraction processes; Modifications to financial controls and accounting workflows; Ongoing system maintenance to address data mismatches and evolving requirements. Many third-party administrators do not maintain direct EHR data feeds for rebate-specific elements, meaning manual intervention would be unavoidable. This increases administrative burden, cost, and the risk of errors and compliance issues. Data Collection and Reporting Burdens HRSA suggests that data requested under a rebate model may be comparable to data already collected by covered entities. This assumption is incorrect. A rebate model would require hospitals to collect, format, certify, and transmit new categories of claim level data not currently submitted through 340B ESP, including: Data drawn from multiple internal systems; Manufacturer specific formatting and certification requirements; Documentation supporting denied or disputed claims. These activities would be ongoing, not one-time, and would increase compliance exposure and administrative costs. Greater Regional HEALTH 1700 WEST TOWNLINE ST. CRESTON, IA 50801 641-782-7091 Timing of Payments and Cash Flow Impacts HRSA seeks feedback on payment timing and financial risk under a rebate model. Under a rebate structure, GRH would be required to pay full acquisition cost at the time of purchase and wait for reimbursement of the 340B discount. This effectively forces hospitals to finance statutory discounts on behalf of manufacturers. Even assuming a nominal 10-day payment requirement, delays or disputes would: Reduce days cash on hand; Increase reliance on reserves or lines of credit; Potentially affect compliance with liquidity-based financial covenants. Hospitals do not have the same access to capital as manufacturers. Cash flow volatility directly threatens service delivery, particularly for high-cost drugs. impact on Patients, Services, and Communities HRSA asks whether a rebate model would affect hospitals' ability to serve patients. The cumulative impact of increased administrative cost, staffing diversion, IT expense, and delayed reimbursement would necessarily reduce investments in patient care. For hospitals like ours, this could include: Reduced charity care and financial assistance programs; Fewer patient support initiatives tied to high-cost therapies; Delayed or canceled investments in behavioral health, oncology, outpatient, or rural services; Reduced ability to stock or dispense high-cost drugs due to liquidity constraints. These outcomes directly contradict the statutory purpose of the 340B Program. Reliance Interests HRSA requests comment on covered entities' reliance on upfront discounts. For over three decades, HRSA has consistently provided 340B discounts through upfront pricing. GRH relied on that longstanding approach when designing staffing models, financial systems, contractual relationships, and multiyear patient service planning. The existence of statutory authority to use rebates does not justify abandoning a settled, effective policy in the absence of identified problems. Disrupting these reliance interests would impose substantial and unnecessary harm on covered entities. Greater 11 Regional 1700 WEST TOWNLINE ST. CRESTON, IA 50801 641-782-7091 Third-Party Platforms and Prior Rebate Experience HRSA seeks input on lessons learned from prior rebate initiatives. During the prior rebate effort, hospitals encountered significant problems with third-party platforms, including shifting requirements, nonnegotiable contractual terms, limited customer support, and unresolved data privacy concerns. Reintroducing a rebate model would replicate these challenges at scale. Alternatives to a Rebate Model and Duplicate Discount Concerns HRSA has acknowledged that manufacturers have tools other than rebates to address potential 340B/MDPNP duplicate discounts. Existing approaches have proven workable and far less burdensome than a rebate mechanism. We support the lowa Hospital Association's and the American Hospital Association's recommendation that HRSA pursue a neutral third-party clearinghouse, if additional safeguards are necessary. At a minimum, HRSA must explain why such a less burdensome alternative is not viable before adopting a rebate model. For all the reasons outlined above, Greater Regional Health respectfully submits that the costs and harms associated with any 340B rebate model far outweigh any potential benefits. HRSA should preserve the upfront discount model that has supported safety net hospitals and the patients they serve for decades. If HRSA nevertheless continues to consider a rebate program, it must issue a detailed proposal and provide covered entities with a meaningful opportunity to comment on its specific parameters. Thank you for your consideration. Monte E. Neitzel CEO Greater Regional Health
HRSA-2026-0001-2182Bryan Health2026-04-20T04:00Z7,802 chars
See attached file(s) 1600 S. 48th St. Lincoln, NE 68506-1299 402-481-1111 bryanhealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 On behalf of Bryan Health, a Nebraska-based, locally owned and governed health system, we appreciate the opportunity to provide input on HRSA's Request for Information regarding the proposed 340B rebate model pilot program. Bryan Health includes five medical centers: Bryan Medical Center, Crete Area Medical Center, Grand Island Regional Medical Center, Kearney Regional Medical Center and Merrick Medical Center. Three of these facilities currently participate in the 340B program. However, the program's impact is most significant in our critical access hospitals, Crete Area Medical Center and Merrick Medical Center. Based on our operational experience, we do not support replacing the current upfront discount model with a rebate-based approach. We are concerned that a rebate model would not function as intended in rural hospital settings and would introduce risks that many facilities are not positioned to absorb. The proposed model would introduce substantial administrative complexity, create new financial uncertainty, and ultimately reduce the resources available for patient care, particularly in rural communities where there are few alternatives if services are reduced. Impact on Patient Care The savings generated through the 340B program directly support services in our communities. These funds help sustain emergency medical services, medication assistance programs, community outreach and education, and access to specialty services. If 340B net revenue is reduced, we would be forced to make difficult decisions, including scaling back services, limiting patient assistance programs or delaying planned expansions. In practical terms, this could mean fewer EMS resources, reduced access to medication for vulnerable patients and delays in expanding needed services. In rural communities, these impacts are especially significant. In many cases, there are no alternative providers available to fill these gaps. Reliance on the Current Model Our 340B program has successfully operated under an upfront discount model for many years. Bryan Health has built its operations, staffing and financial planning around that structure. A transition to a rebate model would require significant changes and introduce new risks without clear evidence that the current model is not working. Page 2 of 3 1600 S. 48th St. Lincoln, NE 68506-1299 402-481-1111 bryanhealth.org If HRSA seeks to strengthen program integrity, we believe there are more targeted and less burdensome approaches available that do not require hospitals to take on substantial new administrative and financial responsibilities. Administrative Burden A rebate model would require us to build and manage processes that do not exist today. This includes daily claim-level tracking, submission, reconciliation, denial follow-up, and audit support across multiple systems. Based on our internal analysis, this would require approximately 40 hours of additional staff time each week, more than 2,080 hours annually for each of our two rural hospitals. This estimate reflects the day-to-day work involved in submitting claims, resolving discrepancies, tracking payments and responding to denials. This is not a marginal increase in workload as it represents an entirely new operational function that hospitals would need to build and sustain. The added administrative cost of a rebate model for just staffing would be approximately $125,000 to $175,000 per year. For our organization, those are resources that would otherwise support patient care. Implementation would also require upfront investments in system changes, workflow redesign, and staff training, totaling $175,000 to $225,000. These are not discretionary improvements; they would be necessary to comply with the new model, as we envision the process, as we have not seen the final designs. Staffing Impact Our critical access hospitals do not currently have the staffing capacity to take on this additional workload. To operate under a rebate model, we need to add approximately two full-time employees with expertise in reimbursement, compliance, and pharmacy operations. Recruiting and training individuals for these roles would likely take several months and introduce additional implementation challenges. Alternatively, we would need to shift existing staff away from patient-facing responsibilities and core operations. In a rural setting, that tradeoff has direct consequences for access to care. We would also note that HRSA's prior estimate of approximately two hours per week does not align with our operational experience. Based on our analysis, the workload would be significantly higher. Systems and Data Challenges Our current systems are designed around the upfront discount model and are not equipped to support claim-level rebate processing. To comply with a rebate model, we would need to build new data capture and reporting capabilities, integrate pharmacy, EHR and billing systems, and establish new connections with third-party administrators and manufacturers while still maintaining the discount model structure. Page 3 of 3 1600 S. 48th St. Lincoln, NE 68506-1299 402-481-1111 bryanhealth.org Even with system upgrades, we expect a meaningful portion of this work to remain manual around tracking rebates. In practical terms, that means ongoing staff time spent pulling, checking, and reconciling data across systems that were not designed to operate this way. Financial Impact and Cash Flow Risk Under a rebate model, hospitals would be required to purchase many drugs at full cost and wait for reimbursement. For our critical access hospitals, this would require an additional $150,000 to $250,000 in working capital. That is a meaningful burden for facilities operating with thin resources. Just as important, reimbursement timing is unlikely to be predictable. Delays in submission, processing or payment, as well as the potential for denials, would create ongoing financial uncertainty that does not exist under the current model. For rural hospitals, this type of uncertainty is difficult to absorb and could affect both operations and long-term planning. Impact on Program Value When we account for increased administrative costs, staffing needs, system investments, and cash flow requirements, we estimate the rebate model could reduce the overall value of the 340B program to our organization by approximately 10%, or $430,000, per year. That reduction would have real, immediate consequences for the services we can provide. Conclusion For the reasons outlined above, we strongly encourage HRSA to maintain the current upfront discount model and carefully consider whether a rebate approach can be implemented without undermining the program's effectiveness, particularly in rural settings. If HRSA decides to proceed, we respectfully request an additional opportunity for stakeholders to review and comment on the program's detailed design before implementation. We appreciate the opportunity to provide input and would welcome further discussion on approaches that preserve the effectiveness of the 340B program while addressing HRSA's goals. Sincerely, Julie Lacy CEO Crete Area Medical Center, Crete, NE Jodi Mohr CEO Merrick Medical Center, Central City, NE
HRSA-2026-0001-2183Public Health Management Corporation2026-04-20T04:00Z495,492 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Public Health Management Corporation (PHMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks posed to federally-qualified health centers (CHC) by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: Public Health Management Corporation will experience $1,240,063 in losses from our entity-owned pharmacy operations and for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation over next three years alone. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single, mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. This devastation from the 340b rebate model will jeopardize our ability to care for 20,000 medically vulnerable patients across the city of Philadelphia. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Public Health Management Corporation in particular, this means it will impact: 58,440 340B transactions 20,629 patients served by PHMCs CHC services in 2025: 23,145 $1.6 million in current program costs above drug costs associated with PHMCs 340B pharmacy program needed to support over $1.8m in sliding fee discounts for prescription medications for uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, 3 hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. 6 2025 UDA Data, HRSA (hrsa.gov) 5 CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Public Health Management Corporation provided $1,892,463 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Public Health Management Corporation anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model, adding $54,593 in additional costs. External Vendor Costs: Given increased complexity, Public Health Management Corporation anticipates an increase of $150,800 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 PHMC estimates at least an additional 0.5 FTE at an increased coast of $54,593. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PHMC estimates an additional $75,400 in additional vendor costs due to manufacturer restrictions. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments PHMC estimates an additional 20 hours per week at a cost of $75,400 in additional costs to manage the additional administrative and legal burden to manage the rebate model impact, including claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Public Health Management Corporation urges HRSA to 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $45,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our health center, which serves 20,629 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $174,994 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. The Public Health Management Corporation federally- qualified health center program currently partners with nine (9) pharmacies above and beyond our own entity-owned pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. 7 Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across nine (9) different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Philadelphia, Pennsylvania with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. PHMCs sliding fee scale for uninsured patients yielded $1,892,463 in consumer savings for patients with very limited incomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $655,191 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $65,044 to purchase these same drugs at the 340B ceiling price. This represents a staggering and unsustainable 907% increase in upfront capital required for procurement of these medications. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Public Health Management Corporation anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as social services, sufficient clinical staffing to meet basic clinical needs. This would also likely threaten the viability of sites to remain open. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund community health workers and social services staff. Patient Financial Assistance: Our ability to provide medications at zero-pay and deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents 11 our 7,574 uninsured patients from rationing their insulin or heart medication. This is critical care for each individual patient and the wider public health needs of our society. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Public Health Management Corporation asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Public Health Management Corporation estimates its 2026 Annual Rebate Opportunity Cost to be approximately $90,232. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Public Health Management Corporation estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $590,147. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to spend tens of thousands on line-of-credit interest. This is not a sustainable solution; the additional costs alone are estimated to be $48,339 - $145,019 annually in year one to $183,000 to $553,000 in year threefunds that are currently dedicated to a wide variety of community health care programming including prenatal services, general primary care, and basic 12 payroll for an organization with significant cashflow limitations. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Public Health Management Corporation with such limited access to services for un and underinsured community members, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Public Health Management Corporation urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a very conservative 15% denial rate would result in a net annual loss of $90,232 in year one to $385,475 in year three. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate- model-pilot-program 13 IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 14 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. PHMC estimates that the losses from this rebate model will accumulate to $1,240,063 over the next three years. These are losses we CANNOT afford to sustain our clinical care in the health center environment. 15 Conclusion Public Health Management Corporation strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Public Health Management Corporation believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Public Health Management Corporation appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at jabecker@phmc.org. Sincerely, James A (Jake) Becker, MBA, MSEd Managing Director PHMC Health Sheet Name 340B Program Snapshot Nuvem Rx Summary 340B Program Snapshot 340B Program Snapshot 340B Program Snapshot 340B Program Snapshot Nuvem Rx Summary NDC-Level Data NDC-Level Data Drug Cost Impact Summary UDS Data Drug Cost Impact Summary Drug Cost Impact Summary Drug Cost Impact Summary Drug Cost Impact Summary Drug Cost Impact Summary Drug Cost Impact Summary Drug Cost Impact Summary 340B Program Snapshot 340B Program Snapshot Drug Cost Impact Summary + 34 Field Number of 2025 340B-Qualified Prescriptions & Administrations Active Members 2025 Pharmacy Administrative Costs 2025 Sliding Fee Discounts Provided Number of FTEs Dedicated to Program - Estimated Additions to Accommodate a Rebate Model External Vendor Costs - Estimated Additions to Accommodate a Rebate Model Contract Pharmacies Sum of Annual Spend at WAC (2026) Sum of Annual Spend at 340B (2026) % Increase in Upfront Inventory Spend Uninsured Patients (both age groups) Increased Upfront Annual Drug Spend(WAC - 340B AAC) - 2026 Increased Upfront Annual Drug Spend(WAC - 340B AAC) - 2027 Increased Upfront Annual Drug Spend(WAC - 340B AAC) - 2028 Annual Rebate Opportunity Cost (Loss of cost minus + rebate denials) - 2026 Annual Rebate Opportunity Cost (Loss of cost minus + rebate denials) - 2027 Annual Rebate Opportunity Cost (Loss of cost minus + rebate denials) - 2028 Estimated Rebate Denial Rate (Drug Cost Impact Summary) Clinic Administered Drug Tracking - Estimated Additions to Accommodate a Rebate Model SUM of Estimated Additions to Accommodate a Rebate Model (costs) Anticipated Loss due to 340B rebate over next three years Value 58,440 23,145 $1,621,101 $1,892,463 0.50 $75,400 9 $655,191 $65,044 907% 7,574 $590,147 $1,512,292 $2,282,266 $90,232 $239,104 $385,745 15% $45,000 $174,994 $1,240,063 UDS Data Pharmacy Direct Costs (Not Pharmaceuticals) $1,621,101.30 Pharmaceutical Direct Costs $4,040,598.36 Sliding fee discount $1,892,463.29 Admin & Dispense Data Nuvem Rx Contract Pharmacy: 2025 Captured Script 7,971 2025 Gross Revenue $721,146.28 2025 Manufacturer Impact Lost Opportunity: Script Count 2,202 2025 Manufacturer Impact Lost Opportunity: Lost 340B Savings $510,332.70 Entity-Owned Pharmacies: 2025 Captured Script 50,469 2025 Gross Revenue $6,618,974.55 External Consultants Referral Capture Vendor(s) $20,622.80 Select Client: Public Health Management Corporation 340B ID: CH031670 Active Members: 23,145 Entity-Owned Pharmacies: 2 Contract Pharmacies: 9 Health Center Snapshot Patients Served % of Patients Uninsured % of Patients with Medicaid % of Patients with Medicare 2025 Sliding Fee Discounts Provided 2025 Annual 340B Program Overview Number of 2025 340B-Qualified Prescriptions & Administrations 2025 Cost of All Drugs (All universes, not exclusively 340B) 2025 Pharmacy Administrative Costs (Clinic Administration, Entity Owned Pharmacies, & Contract Pharmacies, Including TPA Fees) 2025 340B Management & Oversight Costs 2025 Net 340B Program Savings (From Calculator) Impact Experienced From Manufacturer Rest # of Prescriptions Excluded from 340B Program in 2025 340B Savings Opportunity Lost in 2025 Additional Administrative Costs to Manage Submissions and Oversight 340B Program Administative Burden Element Number of FTEs Dedicated to Program Cost of FTEs Dedicated to Program External Vendor Costs Clinic Administered Drug Tracking trictions ts 20,629 37% 40% 9% $ 1,892,463.29 58,440 $ 4,040,598.36 $ 1,621,101.30 $ 117,216.56 $ 1,561,204.61 2,202 $ 510,332.70 $ 129,993.76 Current State Estimated Additions to Accommodate a Rebate Model 0.50 0.50 $ 54,593.76 $ 54,593.76 $ 62,622.80 $ 75,400.00 $ - $ 45,000.00 Data Element Description Uninsured Patients (0-17 years old) Uninsured Patients (18 & older) Medicaid Patients (0-17 years old) Medicaid Patients (18 & older) Medicare Patients (0-17 years old) Medicare Patients (18 & older) Patients Served (0-17 years old) Patients Served (18 & older) Pharmacy Direct Costs (Not Pharmaceuticals) Entity-Owned Pharmacy: Salaries, benefits, computers, supplies, etc. Contract Pharmacy: Dispensing Fees, TPA Fees, etc. Pharmaceutical Direct Costs Amount paid for pharmaceuticals Sliding fee discount (retail charge - amount collected - amount owed by pts) Table Line Column 4 7 a 4 7 b 4 8 a 4 8 b 4 9 a 4 9 b 4 12 a 4 12 b 8A 8a a 8A 8b a 9D 13 e Entity Value from 2025 UDS Report 2,170 5,404 1,282 6,871 5 1,780 3,645 16,984 $1,621,101.30 $4,040,598.36 $1,892,463.29 Employee FTE Dedicated to 340B Program Oversight Hourly Pay Rate Example: 340B Compliance Staff 1.00 $ 35.00 Example: Financce Staff 0.25 $ 50.00 Example: Additional Pharmacy Staff Employee 1 0.50 $ 40.38 Employee 2 Employee 3 Employee 4 Employee 5 Employee 6 Employee 7 Employee 8 Employee 9 Employee 10 Additional Pharmacy Staff Annual Employee Cost (incl. Benefits/Fringe) FTE Added as a Result of MFR Restrictions Hourly Pay Rate2 $ 94,640.00 0.25 $ 35.00 $ 33,800.00 $ - $ 54,593.76 0.50 $ 40.38 $ - $ - $ - $ - $ - $ - $ - $ - $ - Annual Employee Cost (incl. Benefits/Fringe)3 Anticipated Additional FTE as a Result of Rebate Model $ 23,660.00 1.00 $ - 0.75 $ - 0.50 $ 54,593.76 0.50 $ - $ - $ - $ - $ - $ - $ - $ - $ - Hourly Pay Rate4 Annual Employee Cost (incl. Benefits/Fringe)5 $ 20.00 $ 54,080.00 $ 50.00 $ 101,400.00 $ 60.00 $ 81,120.00 $ 40.38 $ 54,593.76 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Consultant Current Annual Cost Annual 340B Audit $ 8,400 Legal Counsel 340B Consultant/Program Management $ 33,600 Referral Capture Vendor(s) $ 20,623 Medicaid Billing Vendor(s) Increased TPA Fees Other Increased Cost Related to Manufacturer Restrictions $ 8,400 $ 25,000 $ 33,600 $ 8,400 Anticipated Additional Costs Related to Rebate Model $ 8,400 $ 25,000 $ 33,600 $ 8,400 340B Universe 2025 Captured Script or Administered Drug Count NuvemRx 7,971 TPA 2 TPA 3 TPA 4 TPA 5 TPA 6 Contract Pharmacies Without TPA Entity-Owned Pharmacies 50,469 Clinic Administered Drugs 2025 Gross Revenue $721,146.28 $6,618,974.55 2025 Manufacturer Impact Lost Opportunity: Script Count (CRx Only) 2,202 2025 Manufacturer Impact Lost Opportunity: Lost 340B Savings (CRx Only) $510,332.70 Current CAD Tracking Model Current Annual Fees Paper Logs Excel Spreadsheet EHR Module NA Separate Vendor NA Implementation Fee for Change Anticipated Annual Fee for Change $ - $ - $ - $ - $ 15,000.00 $ 7,500.00 $ 15,000.00 $ 7,500.00 Annual Rebate Opportunity Cost (Loss of cost minus + rebate denials) Projected Rebate Model Impact on MFP Drugs in 2026 $90,231.94 Projected Rebate Model Impact on MFP Drugs in 2027 $239,104.14 Projected Rebate Model Impact on MFP Drugs in 2028 $385,745.28 30-Day Cash on Hand Impact Projected Rebate Model Impact on MFP Drugs in 2026 $48,339.87 Projected Rebate Model Impact on MFP Drugs in 2027 $123,112.46 Projected Rebate Model Impact on MFP Drugs in 2028 $183,386.35 CE to Enter Data --> Average Days' Cash on Hand 19 Selecting Average Increase in Inventory Costs Pending Rebate Paym Inventory models, frequency of data submission, and manual process wholesale acquisition cost (WAC) and receiving the Manufacturer Rebate to 34 > CEs with virtual inventories and automated data submis > CEs with significant physical inventories or manual da > CEs with a significant proportion of manually processe > CEs wishing to estimate what the financial impact woul *Disclaimer, this calculator is intended for INTERNAL USE ONLY. Th DO NOT SUBMIT the entire spread sheet when responding to HRSA's 3 Wholesaler Contractual & 340B Pricing are proprietary information. t t ) Average Increase in Inventory Costs Pending Rebate Payments ments timeframe for impact to days cash on hand: ses for referral claim capture can all influence Covered Entities' (CEs) interva 40B Ceiling Price. ssion, consider using 30-Day Cash on Hand Impact ata submissions, consider using 45-Day Cash on Hand Impact ed referrals, consider using "60-Day Cash on Hand Impact" ld be if they did not receive their rebate for a whole quarter can use the "90-D he data from the "Drug Cost Summary Tab" may be used to inform external comments 340B Rebate Request for Information (RFI) or Information Collection Request (ICR CEs should consult legal counsel prior to sharing wholesaler terms publicly (e % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 139% $590,146.74 51% $1,512,292.16 23% $2,282,265.75 45-Day Cash on Hand Impact 60-Day Cash on Hand Impact $72,509.80 $96,679.74 $184,668.69 $246,224.92 $275,079.52 $366,772.69 Wholesaler Payment Terms (e.g., net 7, net 14, net 30) 340B Cost Of Goods Sold Discount net 30 3% als between purchasing a drug at Day Cash on Hand Impact" s. R). e.g. contractual discounts and % Increase in Upfront Inventory Spend 907% 324% 138% 90-Day Cash on Hand Impact $145,019.60 $369,337.38 $550,159.04 Estimated Rebate Denial Rate 15% 2026 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate Abbvie $0.00 Amgen $0.00 Astra Zeneca $21,165.34 Boehringer Ingelheim $24,081.53 Bristol-Myers Squibb $8,844.68 Johnson & Johnson $18,989.16 Merck $6,689.65 Novartis $7,314.44 Novo Nordisk $3,147.15 2027 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate Abbvie $2,319.89 Amgen $0.00 Astellas $0.00 Astra Zeneca $21,165.34 Boehringer Ingelheim $28,568.99 Bristol-Myers Squibb $8,844.68 GSK $10,085.30 Merck $7,874.08 Novo Nordisk $160,245.87 Pfizer $0.00 Teva $0.00 2028 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate Abbvie $2,319.89 Amgen $0.00 Astellas $0.00 Astra Zeneca $21,165.34 Boehringer Ingelheim $28,568.99 Bristol-Myers Squibb $8,844.68 Eisai $0.00 Eli Lilly $24,895.37 Genentech $0.00 Gilead $117,229.94 GSK $14,462.70 Johnson & Johnson $0.00 Merck $7,874.08 Novartis $0.00 Novo Nordisk $160,245.87 Otsuka $138.43 Pfizer $0.00 Takeda $0.00 Teva UCB $0.00 $0.00 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 0% $0.00 0% $0.00 10074% $139,447.51 18651% $160,520.88 280% $58,495.98 30530% $126,583.38 120% $43,626.02 23% $43,072.21 21% $18,400.75 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 9037% $13,467.61 0% $0.00 0% $0.00 10074% $139,447.51 23400% $190,434.55 280% $58,495.98 43% $62,442.66 131% $51,376.91 35% $996,626.94 0% $0.00 0% $0.00 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 9037% $13,467.61 0% $0.00 0% $0.00 10074% $139,447.51 23400% $190,434.55 280% $58,495.98 0% $0.00 17% $136,189.87 0% $0.00 12% $604,470.86 58% $90,967.19 0% $0.00 131% $51,376.91 0% $0.00 35% $996,626.94 18% $788.34 0% $0.00 0% $0.00 99 $0.00 $0.00 % Increase in Upfront Inventory Spend 0% 0% 67145% 124322% 1851% 203519% 782% 133% 123% % Increase in Upfront Inventory Spend 60230% 0% 0% 67145% 155985% 1851% 268% 858% 216% 0% 0% % Increase in Upfront Inventory Spend 60230% 0% 0% 67145% 155985% 1851% 0% 94% 0% 60% 366% 0% 858% 0% 216% 103% 0% 0% 0% 0% 2026 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate ELIQUIS $8,844.68 ENBREL $0.00 ENTRESTO $7,314.44 FARXIGA $21,165.34 FIASP $0.00 IMBRUVICA $0.00 JANUVIA $6,689.65 JARDIANCE $24,081.53 NOVOLOG $3,147.15 STELARA $0.00 XARELTO $18,989.16 2027 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate AUSTEDO $0.00 BREO ELLIPTA $3,375.99 CALQUENCE $0.00 ELIQUIS $8,844.68 ENBREL $0.00 ENBREL $0.00 FARXIGA $21,165.34 FIASP $0.00 IBRANCE $0.00 IMBRUVICA $0.00 JANUMET $1,184.43 JANUVIA $6,689.65 JARDIANCE $24,081.53 LINZESS $381.03 NOVOLOG $3,147.15 OFEV $0.00 OZEMPIC $106,405.36 POMALYST $0.00 RYBELSUS $4,881.29 TRADJENTA $4,487.47 TRELEGY ELLIPTA $6,709.31 VRAYLAR $1,938.85 WEGOVY $45,812.06 XTANDI $0.00 Annual Rebate Opportunity Cost (Loss of Cost Minus + Rebate ANORO ELLIPTA $4,377.40 AUSTEDO $0.00 BIKTARVY $117,229.94 2028 BOTOX $0.00 BREO ELLIPTA $3,375.99 CALQUENCE $0.00 CIMZIA $0.00 COSENTYX $0.00 ELIQUIS $8,844.68 ENBREL $0.00 ENBREL $0.00 ENTYVIO $0.00 ERLEADA $0.00 FARXIGA $21,165.34 FIASP $0.00 IBRANCE $0.00 IMBRUVICA $0.00 JANUMET $1,184.43 JANUVIA $6,689.65 JARDIANCE $24,081.53 KISQALI $0.00 LENVIMA $0.00 LINZESS $381.03 NOVOLOG $3,147.15 OFEV $0.00 ORENCIA $0.00 OZEMPIC $106,405.36 POMALYST $0.00 REXULTI $138.43 RYBELSUS $4,881.29 TRADJENTA $4,487.47 TRELEGY ELLIPTA $6,709.31 TRULICITY $24,895.37 VERZENIO $0.00 VRAYLAR $1,938.85 WEGOVY $45,812.06 XELJANZ $0.00 XOLAIR $0.00 XTANDI $0.00 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 280% $58,495.98 0% $0.00 23% $43,072.21 10074% $139,447.51 0% $0.00 0% $0.00 120% $43,626.02 18651% $160,520.88 21% $18,400.75 0% $0.00 30530% $126,583.38 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 0% $0.00 54% $21,404.89 0% $0.00 280% $58,495.98 0% $0.00 0% $0.00 10074% $139,447.51 0% $0.00 0% $0.00 0% $0.00 143% $7,750.88 120% $43,626.02 18651% $160,520.88 15051% $2,539.79 21% $18,400.75 0% $0.00 42% $665,127.15 0% $0.00 42% $30,504.95 28150% $29,913.66 32% $41,037.77 17% $10,927.82 35% $282,594.09 0% $0.00 % Increase in Net Spend Increased Upfront Annual Drug Spend (WAC - 340B AAC) 117% $28,524.53 0% $0.00 12% $604,470.86 0% $0.00 54% $21,404.89 0% $0.00 0% $0.00 0% $0.00 280% $58,495.98 0% $0.00 0% $0.00 0% $0.00 0% $0.00 10074% $139,447.51 0% $0.00 0% $0.00 0% $0.00 143% $7,750.88 120% $43,626.02 18651% $160,520.88 0% $0.00 0% $0.00 15051% $2,539.79 21% $18,400.75 0% $0.00 0% $0.00 42% $665,127.15 0% $0.00 18% $788.34 42% $30,504.95 28150% $29,913.66 32% $41,037.77 17% $136,189.87 0% $0.00 17% $10,927.82 35% $282,594.09 0% $0.00 0% $0.00 0% $0.00 % Increase in Upfront Inventory Spend 1851% 0% 133% 67145% 0% 0% 782% 124322% 123% 0% 203519% % Increase in Upfront Inventory Spend 0% 341% 0% 1851% 0% 0% 67145% 0% 0% 0% 934% 782% 124322% 100319% 123% 0% 262% 0% 262% 187647% 195% 96% 217% 0% % Increase in Upfront Inventory Spend 760% 0% 60% 0% 341% 0% 0% 0% 1851% 0% 0% 0% 0% 67145% 0% 0% 0% 934% 782% 124322% 0% 0% 100319% 123% 0% 0% 262% 0% 103% 262% 187647% 195% 94% 0% 96% 217% 0% 0% 0% NDC Product IPAY 2026 IPAY 2027 IPAY 2028 66993045730 DAPAGLIFLOZON 10 MG TABLET (FARXIGA) Y Y Y 66993045630 DAPAGLIFLOZON 5 MG TABLET (FARXIGA) Y Y Y 00003089321 ELIQUIS 2.5 MG TABLET Y Y Y 00003089331 ELIQUIS 2.5 MG TABLET Y Y Y 00003089421 ELIQUIS 5 MG TABLET Y Y Y 00003089431 ELIQUIS 5 MG TABLET Y Y Y 00003089470 ELIQUIS 5 MG TABLET Y Y Y 00003376474 ELIQUIS DVT-PE TREAT START 5MG Y Y Y 58406001004 ENBREL 25 MG/0.5 ML SYRINGE Y Y Y 58406005504 ENBREL 25 MG/0.5 ML VIAL Y Y Y 58406004404 ENBREL 50 MG/ML MINI CARTRIDGE Y Y Y 58406003204 ENBREL 50 MG/ML SURECLICK Y Y Y 58406002104 ENBREL 50 MG/ML SYRINGE Y Y Y 00310621030 FARXIGA 10 MG TABLET Y Y Y 00310621039 FARXIGA 10 MG TABLET Y Y Y 00310621090 FARXIGA 10 MG TABLET Y Y Y 00310620530 FARXIGA 5 MG TABLET Y Y Y 00310620590 FARXIGA 5 MG TABLET Y Y Y 00169320415 FIASP 100 UNIT/ML FLEXTOUCH Y Y Y 00169320111 FIASP 100 UNIT/ML VIAL Y Y Y 00169320515 FIASP PENFILL 100 UNIT/ML CART Y Y Y 00169320615 FIASP PUMPCART 100 UNIT/ML Y Y Y 57962014009 IMBRUVICA 140 MG CAPSULE Y Y Y 57962014012 IMBRUVICA 140 MG CAPSULE Y Y Y 57962001428 IMBRUVICA 140 MG TABLET Y Y Y 57962028028 IMBRUVICA 280 MG TABLET Y Y Y 57962042028 IMBRUVICA 420 MG TABLET Y Y Y 57962007028 IMBRUVICA 70 MG CAPSULE Y Y Y 57962000712 IMBRUVICA 70 MG/ML SUSPENSION Y Y Y 73070010011 INSULIN ASPART 100 UNILS/ML VL Y Y Y 73070010215 INSULIN ASPART 100 UNIT/ML CRT Y Y Y 73070010315 INSULIN ASPART 100 UNIT/ML PEN Y Y Y 00006027728 JANUVIA 100 MG TABLET Y Y Y 00006027731 JANUVIA 100 MG TABLET Y Y Y 00006027754 JANUVIA 100 MG TABLET Y Y Y 00006027782 JANUVIA 100 MG TABLET Y Y Y 00006022128 JANUVIA 25 MG TABLET Y Y Y 00006022131 JANUVIA 25 MG TABLET Y Y Y 00006022154 JANUVIA 25 MG TABLET Y Y Y 00006011228 JANUVIA 50 MG TABLET Y Y Y 00006011231 JANUVIA 50 MG TABLET Y Y Y 00006011254 JANUVIA 50 MG TABLET Y Y Y 00597015230 JARDIANCE 10 MG TABLET Y Y Y 00597015237 JARDIANCE 10 MG TABLET Y Y Y 00597015290 JARDIANCE 10 MG TABLET Y Y Y 00597015330 JARDIANCE 25 MG TABLET Y Y Y 00597015337 JARDIANCE 25 MG TABLET Y Y Y 00597015390 JARDIANCE 25 MG TABLET Y Y Y 00169633910 NOVOLOG 100 UNIT/ML FLEXPEN Y Y Y 00169750111 NOVOLOG 100 UNIT/ML VIAL Y Y Y 00169330312 NOVOLOG PENFILL 100 UNIT/ML Y Y Y 00078065920 ENTRESTO 24 MG-26 MG TABLET Y N N 00078065967 ENTRESTO 24 MG-26 MG TABLET Y N N 00078077720 ENTRESTO 49 MG-51 MG TABLET Y N N 00078077767 ENTRESTO 49 MG-51 MG TABLET Y N N 00078069620 ENTRESTO 97 MG-103 MG TABLET Y N N 00078069667 ENTRESTO 97 MG-103 MG TABLET Y N N 00078123820 ENTRESTO SPRINKLE 15-16 MG PLT Y N N 00078123120 ENTRESTO SPRINKLE 6-6MG PELLET Y N N 57894005427 STELARA 130 MG/26 ML VIAL Y N N 57894006003 STELARA 45 MG/0.5 ML SYRINGE Y N N 57894006002 STELARA 45 MG/0.5 ML VIAL Y N N 57894006103 STELARA 90 MG/ML SYRINGE Y N N 50458058010 XARELTO 10 MG TABLET Y N N 50458058030 XARELTO 10 MG TABLET Y N N 50458058090 XARELTO 10 MG TABLET Y N N 50458057810 XARELTO 15 MG TABLET Y N N 50458057830 XARELTO 15 MG TABLET Y N N 50458057890 XARELTO 15 MG TABLET Y N N 50458057710 XARELTO 2.5 MG TABLET Y N N 50458057718 XARELTO 2.5 MG TABLET Y N N 50458057760 XARELTO 2.5 MG TABLET Y N N 50458057910 XARELTO 20 MG TABLET Y N N 50458057930 XARELTO 20 MG TABLET Y N N 50458057989 XARELTO 20 MG TABLET Y N N 50458057990 XARELTO 20 MG TABLET Y N N 50458058451 XARELTO DVT-PE TREAT START 30D Y N N 68546017260 AUSTEDO 12 MG TABLET N Y Y 68546017060 AUSTEDO 6 MG TABLET N Y Y 68546017160 AUSTEDO 9 MG TABLET N Y Y 68546047156 AUSTEDO XR 12 MG TABLET N Y Y 68546047956 AUSTEDO XR 18 MG TABLET N Y Y 68546047256 AUSTEDO XR 24 MG TABLET N Y Y 68546047356 AUSTEDO XR 30 MG TABLET N Y Y 68546047456 AUSTEDO XR 36 MG TABLET N Y Y 68546047556 AUSTEDO XR 42 MG TABLET N Y Y 68546047656 AUSTEDO XR 48 MG TABLET N Y Y 68546047056 AUSTEDO XR 6 MG TABLET N Y Y 68546047729 AUSTEDO XR TITR(12-18-24-30MG) N Y Y 00173085910 BREO ELLIPTA 100-25 MCG INHALR N Y Y 00173085914 BREO ELLIPTA 100-25 MCG INHALR N Y Y 00173088210 BREO ELLIPTA 200-25 MCG INHALR N Y Y 00173088214 BREO ELLIPTA 200-25 MCG INHALR N Y Y 00173091610 BREO ELLIPTA 50-25 MCG INHALER N Y Y 00310351260 CALQUENCE 100 MG TABLET N Y Y 00003102828 ELIQUIS 0.5 MG PKT(1X0.5MG TB) N Y Y 00003102884 ELIQUIS 1.5 MG PKT(3X0.5MG TB) N Y Y 00003102812 ELIQUIS 2 MG PKT(4X 0.5 MG TB) N Y Y 00003089828 ELIQUIS SPRINKLE 0.15 MG CAP N Y Y 66993013597 FLUTICASONE-VILANTEROL 100-25 N Y Y 66993013697 FLUTICASONE-VILANTEROL 200-25 N Y Y 00069018821 IBRANCE 100 MG CAPSULE N Y Y 00069048603 IBRANCE 100 MG TABLET N Y Y 00069018921 IBRANCE 125 MG CAPSULE N Y Y 00069068803 IBRANCE 125 MG TABLET N Y Y 00069018721 IBRANCE 75 MG CAPSULE N Y Y 00069028403 IBRANCE 75 MG TABLET N Y Y 00006057761 JANUMET 50-1,000 MG TABLET N Y Y 00006057762 JANUMET 50-1,000 MG TABLET N Y Y 00006057782 JANUMET 50-1,000 MG TABLET N Y Y 00006057561 JANUMET 50-500 MG TABLET N Y Y 00006057562 JANUMET 50-500 MG TABLET N Y Y 00006057582 JANUMET 50-500 MG TABLET N Y Y 00006008131 JANUMET XR 100-1,000 MG TABLET N Y Y 00006008154 JANUMET XR 100-1,000 MG TABLET N Y Y 00006008182 JANUMET XR 100-1,000 MG TABLET N Y Y 00006008061 JANUMET XR 50-1,000 MG TABLET N Y Y 00006008062 JANUMET XR 50-1,000 MG TABLET N Y Y 00006008082 JANUMET XR 50-1,000 MG TABLET N Y Y 00006007861 JANUMET XR 50-500 MG TABLET N Y Y 00006007862 JANUMET XR 50-500 MG TABLET N Y Y 00006007882 JANUMET XR 50-500 MG TABLET N Y Y 00456120130 LINZESS 145 MCG CAPSULE N Y Y 00456120230 LINZESS 290 MCG CAPSULE N Y Y 00456120330 LINZESS 72 MCG CAPSULE N Y Y 00597014360 OFEV 100 MG CAPSULE N Y Y 00597014560 OFEV 150 MG CAPSULE N Y Y 55513050855 OTEZLA 10-20 MG STARTER 28 DAY N Y Y 55513036955 OTEZLA 10-20-30MG START 28 DAY N Y Y 55513049760 OTEZLA 20 MG TABLET N Y Y 55513013760 OTEZLA 30 MG TABLET N Y Y 55513051930 OTEZLA XR 75 MG TABLET N Y Y 55513051641 OTEZLA XR INITIATION PK 28 DAY N Y Y 00169418113 OZEMPIC 0.25-0.5 MG/DOSE PEN N Y Y 00169413013 OZEMPIC 1 MG/DOSE (4 MG/3 ML) N Y Y 00169477212 OZEMPIC 2 MG/DOSE (8 MG/3 ML) N Y Y 59572050100 POMALYST 1 MG CAPSULE N Y Y 59572050121 POMALYST 1 MG CAPSULE N Y Y 59572050200 POMALYST 2 MG CAPSULE N Y Y 59572050221 POMALYST 2 MG CAPSULE N Y Y 59572050300 POMALYST 3 MG CAPSULE N Y Y 59572050321 POMALYST 3 MG CAPSULE N Y Y 59572050400 POMALYST 4 MG CAPSULE N Y Y 59572050421 POMALYST 4 MG CAPSULE N Y Y 00169431430 RYBELSUS 14 MG TABLET N Y Y 00169430330 RYBELSUS 3 MG TABLET N Y Y 00169430730 RYBELSUS 7 MG TABLET N Y Y 00597014030 TRADJENTA 5 MG TABLET N Y Y 00597014061 TRADJENTA 5 MG TABLET N Y Y 00597014090 TRADJENTA 5 MG TABLET N Y Y 00173088710 TRELEGY ELLIPTA 100-62.5-25 N Y Y 00173088714 TRELEGY ELLIPTA 100-62.5-25 N Y Y 00173089310 TRELEGY ELLIPTA 200-62.5-25 N Y Y 00173089314 TRELEGY ELLIPTA 200-62.5-25 N Y Y 61874011520 VRAYLAR 1.5 MG CAPSULE N Y Y 61874011530 VRAYLAR 1.5 MG CAPSULE N Y Y 61874013020 VRAYLAR 3 MG CAPSULE N Y Y 61874013030 VRAYLAR 3 MG CAPSULE N Y Y 61874014530 VRAYLAR 4.5 MG CAPSULE N Y Y 61874016030 VRAYLAR 6 MG CAPSULE N Y Y 00169452514 WEGOVY 0.25 MG/0.5 ML PEN N Y Y 00169450514 WEGOVY 0.5 MG/0.5 ML PEN N Y Y 00169450114 WEGOVY 1 MG/0.5 ML PEN N Y Y 00169451714 WEGOVY 1.7 MG/0.75 ML PEN N Y Y 00169452414 WEGOVY 2.4 MG/0.75 ML PEN N Y Y 00469012599 XTANDI 40 MG CAPSULE N Y Y 00469062599 XTANDI 40 MG TABLET N Y Y 00469072560 XTANDI 80 MG TABLET N Y Y 00173086906 ANORO ELLIPTA 62.5-25 MCG INH N N Y 00173086910 ANORO ELLIPTA 62.5-25 MCG INH N N Y 61958250501 BIKTARVY 30-120-15 MG TABLET N N Y 61958250601 BIKTARVY 30-120-15 MG TABLET N N Y 61958250101 BIKTARVY 50-200-25 MG TABLET N N Y 61958250103 BIKTARVY 50-200-25 MG TABLET N N Y 00023114501 BOTOX 100 UNIT VIAL N N Y 00023923201 BOTOX 100 UNIT VIAL N N Y 00023392102 BOTOX 200 UNIT VIAL N N Y 00023391950 BOTOX 50 UNIT VIAL N N Y 50474070062 CIMZIA 2X200 MG VIAL KIT N N Y 50474071079 CIMZIA 2X200 MG/ML SYRINGE KIT N N Y 50474071081 CIMZIA 2X200 MG/ML(X3)START KT N N Y 00078116861 COSENTYX 125 MG/5 ML VIAL N N Y 00078063997 COSENTYX 150 MG/ML SYRINGE N N Y 00078063998 COSENTYX 300 MG DOSE-2 SYRINGE N N Y 00078105697 COSENTYX 75 MG/0.5 ML SYRINGE N N Y 00078063968 COSENTYX SENSOREADY 150 MG PEN N N Y 00078063941 COSENTYX SNRDY 300MG DOSE-2PEN N N Y 00078107068 COSENTYX UNOREADY 300 MG PEN N N Y 64764010821 ENTYVIO 108 MG/0.68 ML PEN N N Y 64764030020 ENTYVIO 300 MG VIAL N N Y 59676060430 ERLEADA 240 MG TABLET N N Y 59676060012 ERLEADA 60 MG TABLET N N Y 00078086001 KISQALI 200 MG DAILY DOSE N N Y 00078086742 KISQALI 400 MG DAILY DOSE N N Y 00078087463 KISQALI 600 MG DAILY DOSE N N Y 62856071030 LENVIMA 10 MG DAILY DOSE N N Y 62856071230 LENVIMA 12 MG DAILY DOSE N N Y 62856071430 LENVIMA 14 MG DAILY DOSE N N Y 62856071830 LENVIMA 18 MG DAILY DOSE N N Y 62856072030 LENVIMA 20 MG DAILY DOSE N N Y 62856072430 LENVIMA 24 MG DAILY DOSE N N Y 62856070430 LENVIMA 4 MG CAPSULE N N Y 62856070830 LENVIMA 8 MG DAILY DOSE N N Y 00003218811 ORENCIA 125 MG/ML SYRINGE N N Y 00003218713 ORENCIA 250 MG VIAL N N Y 00003281411 ORENCIA 50 MG/0.4 ML SYRINGE N N Y 00003281811 ORENCIA 87.5 MG/0.7 ML SYRINGE N N Y 00003218851 ORENCIA CLICKJECT 125 MG/ML N N Y 59148003513 REXULTI 0.25 MG TABLET N N Y 59148003613 REXULTI 0.5 MG TABLET N N Y 59148003713 REXULTI 1 MG TABLET N N Y 59148003813 REXULTI 2 MG TABLET N N Y 59148003913 REXULTI 3 MG TABLET N N Y 59148004013 REXULTI 4 MG TABLET N N Y 00002143380 TRULICITY 0.75 MG/0.5 ML PEN N N Y 00002143480 TRULICITY 1.5 MG/0.5 ML PEN N N Y 00002223680 TRULICITY 3 MG/0.5 ML PEN N N Y 00002318280 TRULICITY 4.5 MG/0.5 ML PEN N N Y 66993013497 UMECLIDINIUM-VILANTERO 62.5-25 N N Y 00002481554 VERZENIO 100 MG TABLET N N Y 00002533754 VERZENIO 150 MG TABLET N N Y 00002621654 VERZENIO 200 MG TABLET N N Y 00002448354 VERZENIO 50 MG TABLET N N Y 00069102902 XELJANZ 1 MG/ML SOLUTION N N Y 00069100201 XELJANZ 10 MG TABLET N N Y 00069100101 XELJANZ 5 MG TABLET N N Y 00069050130 XELJANZ XR 11 MG TABLET N N Y 00069050230 XELJANZ XR 22 MG TABLET N N Y 50242004062 XOLAIR 150 MG/1.2ML VIAL N N Y 50242021555 XOLAIR 150 MG/ML AUTOINJECTOR N N Y 50242021501 XOLAIR 150 MG/ML SYRINGE N N Y 50242021503 XOLAIR 150 MG/ML SYRINGE N N Y 50242022755 XOLAIR 300 MG/2 ML AUTOINJECT N N Y 50242022701 XOLAIR 300 MG/2 ML SYRINGE N N Y 50242021455 XOLAIR 75 MG/0.5 ML AUTOINJECT N N Y 50242021401 XOLAIR 75 MG/0.5 ML SYRINGE N N Y 50242021403 XOLAIR 75 MG/0.5 ML SYRINGE N N Y Package Annual 340B Purchases 340B Price WAC Price Annual Spend at 340B Annual Spend at WAC 1 x30EA 28 $ 219.22 $378.46 $5,954.02 $10,596.88 1 x30EA 16 $ 218.38 $378.46 $3,389.26 $6,055.36 1 x60EA 19 $ 24.73 $345.59 $455.77 $6,566.21 1 x100EA 0 $ 41.21 $576.02 $0.00 $0.00 1 x60EA 158 $ 14.47 $345.59 $2,217.67 $54,603.22 1 x100EA 0 $ 24.12 $576.02 $0.00 $0.00 1 x74EA 0 $ 17.85 $426.23 $0.00 $0.00 1 x74EA 0 $ 17.85 $426.23 $0.00 $0.00 4 x0.5ML 0 $ 0.02 $4,282.76 $0.00 $0.00 4 x0.5ML 0 $ 0.02 $4,282.76 $0.00 $0.00 4 x1ML 0 $ 178.27 $8,565.48 $0.00 $0.00 4 x1ML 0 $ 0.04 $8,565.48 $0.00 $0.00 4 x1ML 0 $ 0.04 $8,565.48 $0.00 $0.00 1 x30EA 221 $ 0.29 $377.82 $62.17 $83,498.22 1 x30EA 0 $ 0.29 $377.82 $0.00 $0.00 1 x90EA 0 $ 0.86 $1,133.46 $0.00 $0.00 1 x30EA 129 $ 0.29 $377.82 $36.29 $48,738.78 1 x90EA 0 $ 0.86 $1,133.46 $0.00 $0.00 5 x3ML 0 $ 55.00 $139.71 $0.00 $0.00 1 x10ML 0 $ 29.61 $72.34 $0.00 $0.00 5 x3ML 0 $ 55.00 $134.37 $0.00 $0.00 5 x1.6ML 0 $ 29.32 $71.66 $0.00 $0.00 1 x90EA 0 $ - $0.00 $0.00 $0.00 1 x120EA 0 $ - $0.00 $0.00 $0.00 1 x28EA 0 $ - $0.00 $0.00 $0.00 1 x28EA 0 $ - $0.00 $0.00 $0.00 1 x28EA 0 $ - $0.00 $0.00 $0.00 1 x28EA 0 $ - $0.00 $0.00 $0.00 1 x108ML 0 $ - $0.00 $0.00 $0.00 1 x10ML 0 $ 34.43 $72.34 $0.00 $0.00 5 x3ML 0 $ 63.83 $134.37 $0.00 $0.00 5 x3ML 142 $ 63.83 $139.71 $8,791.94 $19,838.82 1 x100EA 0 $ 124.50 $1,100.00 $0.00 $0.00 1 x30EA 0 $ 37.35 $330.00 $0.00 $0.00 1 x90EA 0 $ 112.06 $990.00 $0.00 $0.00 1 x1000EA 3 $ 1,245.07 $11,000.00 $3,623.15 $33,000.00 1 x100EA 0 $ 136.25 $1,100.00 $0.00 $0.00 1 x30EA 42 $ 40.87 $330.00 $1,665.04 $13,860.00 1 x90EA 0 $ 122.62 $990.00 $0.00 $0.00 1 x100EA 0 $ 125.57 $1,100.00 $0.00 $0.00 1 x30EA 7 $ 37.67 $330.00 $255.78 $2,310.00 1 x90EA 0 $ 113.02 $990.00 $0.00 $0.00 1 x30EA 259 $ 0.29 $350.00 $72.86 $90,650.00 1 x30EA 0 $ 0.29 $350.00 $0.00 $0.00 1 x90EA 0 $ 0.86 $1,050.00 $0.00 $0.00 1 x30EA 200 $ 0.29 $350.00 $56.26 $70,000.00 1 x30EA 0 $ 0.29 $350.00 $0.00 $0.00 1 x90EA 0 $ 0.86 $1,050.00 $0.00 $0.00 5 x3ML 78 $ 63.82 $139.71 $4,828.62 $10,897.38 1 x10ML 33 $ 34.43 $72.34 $1,102.10 $2,387.22 5 x3ML 0 $ 63.82 $134.37 $0.00 $0.00 1 x60EA 30 $ 319.67 $726.37 $9,302.40 $21,791.10 1 x180EA 7 $ 959.01 $2,179.13 $6,511.68 $15,253.91 1 x60EA 22 $ 318.00 $726.37 $6,786.12 $15,980.14 1 x180EA 1 $ 953.98 $2,179.13 $925.36 $2,179.13 1 x60EA 28 $ 329.34 $726.37 $8,944.87 $20,338.36 1 x180EA 0 $ 988.03 $2,179.13 $0.00 $0.00 1 x60EA 0 $ 319.29 $726.37 $0.00 $0.00 1 x60EA 0 $ 319.44 $726.37 $0.00 $0.00 1 x26ML 0 $ 1,118.19 $2,225.64 $0.00 $0.00 1 x0.5ML 0 $ 1,997.10 $15,304.53 $0.00 $0.00 1 x0.5ML 0 $ 2,098.23 $15,304.53 $0.00 $0.00 1 x1ML 0 $ 5,584.06 $30,609.03 $0.00 $0.00 1 x100EA 0 $ 0.95 $2,039.38 $0.00 $0.00 1 x30EA 7 $ 0.29 $611.82 $1.97 $4,282.74 1 x90EA 0 $ 0.86 $1,835.45 $0.00 $0.00 1 x100EA 0 $ 0.95 $2,039.38 $0.00 $0.00 1 x30EA 27 $ 0.29 $611.82 $7.60 $16,519.14 1 x90EA 0 $ 0.86 $1,835.45 $0.00 $0.00 1 x100EA 0 $ 0.95 $1,019.71 $0.00 $0.00 1 x180EA 0 $ 1.71 $1,835.45 $0.00 $0.00 1 x60EA 19 $ 0.57 $611.82 $10.51 $11,624.58 1 x100EA 3 $ 0.95 $2,039.38 $2.76 $6,118.14 1 x30EA 41 $ 0.29 $611.82 $11.53 $25,084.62 1 x1000EA 3 $ 9.52 $20,393.87 $27.70 $61,181.61 1 x90EA 1 $ 0.86 $1,835.45 $0.83 $1,835.45 1 x51EA 0 $ 0.49 $1,040.10 $0.00 $0.00 1 x60EA 0 $ 4,505.79 $7,917.14 $0.00 $0.00 1 x60EA 0 $ 2,984.08 $5,278.17 $0.00 $0.00 1 x60EA 0 $ 3,385.44 $5,937.96 $0.00 $0.00 1 x30EA 0 $ 3,035.77 $5,278.17 $0.00 $0.00 1 x30EA 0 $ 4,552.47 $7,917.25 $0.00 $0.00 1 x30EA 0 $ 4,532.77 $7,917.14 $0.00 $0.00 1 x30EA 0 $ 6,067.73 $10,556.22 $0.00 $0.00 1 x30EA 0 $ 7,590.76 $13,195.41 $0.00 $0.00 1 x30EA 0 $ 9,102.09 $15,834.50 $0.00 $0.00 1 x30EA 0 $ 9,107.29 $15,834.39 $0.00 $0.00 1 x30EA 0 $ 1,519.66 $2,639.08 $0.00 $0.00 1 x28EA 0 $ 4,259.33 $7,389.43 $0.00 $0.00 1 x60EA 44 $ 95.34 $407.22 $4,069.11 $17,917.68 1 x28EA 0 $ 44.49 $156.88 $0.00 $0.00 1 x60EA 24 $ 95.23 $407.22 $2,216.95 $9,773.28 1 x28EA 0 $ 44.44 $156.88 $0.00 $0.00 1 x60EA 0 $ 95.29 $407.22 $0.00 $0.00 1 x60EA 0 $12,172.62 $16,304.03 $0.00 $0.00 1 x28EA 0 $ 3.58 $80.60 $0.00 $0.00 1 x84EA 0 $ 10.73 $241.79 $0.00 $0.00 1 x112EA 0 $ 14.30 $322.39 $0.00 $0.00 1 x28EA 0 $ 3.58 $80.60 $0.00 $0.00 1 x60EA 0 $ 144.33 $249.50 $0.00 $0.00 1 x60EA 0 $ 145.26 $249.50 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x21EA 0 $ - $0.00 $0.00 $0.00 1 x60EA 10 $ 32.24 $330.00 $312.73 $3,300.00 1 x180EA 0 $ 96.71 $990.00 $0.00 $0.00 1 x1000EA 0 $ - $0.00 $0.00 $0.00 1 x60EA 0 $ 33.38 $330.00 $0.00 $0.00 1 x180EA 0 $ 100.15 $990.00 $0.00 $0.00 1 x1000EA 0 $ 556.37 $5,500.00 $0.00 $0.00 1 x30EA 12 $ 33.28 $330.00 $387.38 $3,960.00 1 x90EA 0 $ 99.85 $990.00 $0.00 $0.00 1 x1000EA 0 $ - $0.00 $0.00 $0.00 1 x60EA 4 $ 33.25 $330.00 $129.01 $1,320.00 1 x180EA 0 $ 99.74 $990.00 $0.00 $0.00 1 x1000EA 0 $ - $0.00 $0.00 $0.00 1 x60EA 0 $ 36.97 $330.00 $0.00 $0.00 1 x180EA 0 $ 110.91 $990.00 $0.00 $0.00 1 x1000EA 0 $ - $0.00 $0.00 $0.00 1 x30EA 6 $ 0.29 $282.48 $1.69 $1,694.88 1 x30EA 1 $ 0.29 $282.48 $0.28 $282.48 1 x30EA 2 $ 0.29 $282.48 $0.56 $564.96 1 x60EA 0 $ - $0.00 $0.00 $0.00 1 x60EA 0 $ - $0.00 $0.00 $0.00 1 x55EA 0 $ 0.52 $5,589.89 $0.00 $0.00 1 x55EA 0 $ 0.52 $5,589.89 $0.00 $0.00 1 x60EA 0 $ 0.57 $5,589.89 $0.00 $0.00 1 x60EA 0 $ 0.57 $5,589.89 $0.00 $0.00 1 x30EA 0 $ 0.29 $5,589.89 $0.00 $0.00 1 x41EA 0 $ 0.39 $5,589.89 $0.00 $0.00 1 x3ML 310 $ 301.46 $1,027.51 $90,649.02 $318,528.10 1 x3ML 218 $ 301.46 $1,027.51 $63,746.73 $223,997.18 1 x3ML 365 $ 276.92 $1,027.51 $98,043.53 $375,041.15 1 x100EA 0 $43,500.44 $119,284.25 $0.00 $0.00 1 x21EA 0 $ 9,135.09 $25,049.70 $0.00 $0.00 1 x100EA 0 $43,535.53 $119,284.25 $0.00 $0.00 1 x21EA 0 $ 9,142.46 $25,049.70 $0.00 $0.00 1 x100EA 0 $43,509.21 $119,284.25 $0.00 $0.00 1 x21EA 0 $ 9,136.93 $25,049.70 $0.00 $0.00 1 x100EA 0 $43,554.02 $119,284.25 $0.00 $0.00 1 x21EA 0 $ 9,146.34 $25,049.70 $0.00 $0.00 1 x30EA 9 $ 292.16 $1,027.51 $2,550.56 $9,247.59 1 x30EA 15 $ 292.18 $1,027.51 $4,251.22 $15,412.65 1 x30EA 17 $ 292.37 $1,027.51 $4,821.18 $17,467.67 1 x30EA 15 $ 0.29 $525.08 $4.22 $7,876.20 1 x100EA 0 $ 0.95 $1,750.27 $0.00 $0.00 1 x90EA 14 $ 0.86 $1,575.24 $11.68 $22,053.36 1 x60EA 49 $ 243.95 $697.73 $11,594.94 $34,188.77 1 x28EA 0 $ 113.84 $325.17 $0.00 $0.00 1 x60EA 40 $ 243.95 $697.73 $9,465.26 $27,909.20 1 x28EA 0 $ 113.84 $325.17 $0.00 $0.00 1 x20EA 0 $ 559.63 $1,063.22 $0.00 $0.00 1 x30EA 7 $ 839.44 $1,594.82 $5,699.80 $11,163.74 1 x20EA 0 $ 559.63 $1,063.22 $0.00 $0.00 1 x30EA 7 $ 839.45 $1,594.82 $5,699.87 $11,163.74 1 x30EA 0 $ 839.17 $1,594.82 $0.00 $0.00 1 x30EA 0 $ 839.11 $1,594.82 $0.00 $0.00 4 x0.5ML 45 $ 438.67 $1,349.02 $19,147.95 $60,705.90 4 x0.5ML 46 $ 438.67 $1,349.02 $19,573.46 $62,054.92 4 x0.5ML 34 $ 438.67 $1,349.02 $14,467.34 $45,866.68 4 x0.75ML 63 $ 438.67 $1,349.02 $26,807.12 $84,988.26 4 x0.75ML 118 $ 438.67 $1,349.02 $50,210.17 $159,184.36 1 x120EA 0 $ 6,775.24 $15,352.94 $0.00 $0.00 1 x120EA 0 $ 6,762.03 $15,352.94 $0.00 $0.00 1 x60EA 0 $ 6,767.97 $15,352.94 $0.00 $0.00 1 x14EA 0 $ 13.69 $117.54 $0.00 $0.00 1 x60EA 66 $ 58.66 $489.09 $3,755.41 $32,279.94 1 x30EA 0 $ 2,748.78 $4,216.10 $0.00 $0.00 1 x30EA 0 $ 2,774.36 $4,216.10 $0.00 $0.00 1 x30EA 337 $ 2,719.43 $4,216.10 $888,954.47 $1,420,825.70 1 x30EA 46 $ 2,719.43 $4,216.10 $121,340.97 $193,940.60 1 x1EA 0 $ 470.03 $651.00 $0.00 $0.00 1 x1EA 0 $ 470.03 $656.00 $0.00 $0.00 1 x1EA 0 $ 972.91 $1,302.00 $0.00 $0.00 1 x1EA 0 $ 259.12 $362.00 $0.00 $0.00 1 x1EA 0 $ 1,122.64 $6,299.40 $0.00 $0.00 1 x1EA 0 $ 0.01 $6,299.40 $0.00 $0.00 1 x3EA 0 $ 0.03 $18,898.21 $0.00 $0.00 1 x5ML 0 $ 1,637.80 $2,244.67 $0.00 $0.00 1 x1ML 0 $ 637.15 $8,165.42 $0.00 $0.00 2 x1ML 0 $ 1,274.30 $8,165.42 $0.00 $0.00 1 x0.5ML 0 $ 955.86 $4,082.70 $0.00 $0.00 1 x1ML 0 $ 637.15 $8,165.42 $0.00 $0.00 2 x1ML 0 $ 1,274.30 $8,165.42 $0.00 $0.00 1 x2ML 0 $ 1,942.12 $8,492.03 $0.00 $0.00 1 x0.68ML 0 $ 1,718.48 $3,639.14 $0.00 $0.00 1 x1EA 0 $ 4,577.65 $10,108.70 $0.00 $0.00 1 x30EA 0 $10,374.07 $15,713.54 $0.00 $0.00 1 x120EA 0 $10,379.14 $15,713.54 $0.00 $0.00 1 x21EA 0 $ 3,701.25 $7,640.05 $0.00 $0.00 1 x42EA 0 $ 7,501.74 $15,280.15 $0.00 $0.00 1 x63EA 0 $ 9,184.34 $19,100.20 $0.00 $0.00 1 x30EA 0 $11,465.11 $25,732.00 $0.00 $0.00 1 x90EA 0 $11,475.94 $25,732.00 $0.00 $0.00 1 x60EA 0 $11,468.12 $25,732.00 $0.00 $0.00 1 x90EA 0 $11,448.64 $25,732.00 $0.00 $0.00 1 x60EA 0 $13,468.23 $25,732.00 $0.00 $0.00 1 x90EA 0 $13,471.56 $25,732.00 $0.00 $0.00 1 x30EA 0 $11,468.36 $25,732.00 $0.00 $0.00 1 x60EA 0 $11,470.23 $25,732.00 $0.00 $0.00 4 x1ML 0 $ 35.71 $6,070.59 $0.00 $0.00 1 x1EA 0 $ 458.37 $1,604.25 $0.00 $0.00 4 x0.4ML 0 $ 2,601.06 $6,070.59 $0.00 $0.00 4 x0.7ML 0 $ 2,629.85 $6,070.59 $0.00 $0.00 4 x1ML 0 $ 35.71 $6,070.59 $0.00 $0.00 1 x30EA 0 $ 791.26 $1,555.86 $0.00 $0.00 1 x30EA 1 $ 791.26 $1,555.86 $767.52 $1,555.86 1 x30EA 0 $ 791.26 $1,555.86 $0.00 $0.00 1 x30EA 0 $ 791.26 $1,555.86 $0.00 $0.00 1 x30EA 0 $ 791.26 $1,555.86 $0.00 $0.00 1 x30EA 0 $ 791.26 $1,555.86 $0.00 $0.00 4 x0.5ML 59 $ 425.78 $1,006.93 $24,367.39 $59,408.87 4 x0.5ML 91 $ 425.79 $1,006.93 $37,584.48 $91,630.63 4 x0.5ML 107 $ 722.76 $1,006.93 $75,015.26 $107,741.51 4 x0.5ML 47 $ 722.74 $1,006.93 $32,949.72 $47,325.71 1 x60EA 0 $ 190.88 $317.91 $0.00 $0.00 1 x14EA 0 $ 2,542.17 $4,327.47 $0.00 $0.00 1 x14EA 0 $ 2,539.35 $4,327.47 $0.00 $0.00 1 x14EA 0 $ 2,535.31 $4,327.47 $0.00 $0.00 1 x14EA 0 $ 2,542.24 $4,327.47 $0.00 $0.00 1 x240ML 0 $ 2.28 $5,125.73 $0.00 $0.00 1 x60EA 0 $ 0.57 $6,407.16 $0.00 $0.00 1 x60EA 0 $ 0.57 $4,554.86 $0.00 $0.00 1 x30EA 0 $ 0.29 $6,407.16 $0.00 $0.00 1 x30EA 0 $ 0.29 $6,407.16 $0.00 $0.00 1 x1EA 0 $ 480.22 $1,553.76 $0.00 $0.00 1 x1ML 0 $ 912.57 $1,553.76 $0.00 $0.00 1 x1ML 0 $ 873.88 $1,553.76 $0.00 $0.00 1 x1ML 0 $ 912.57 $1,553.76 $0.00 $0.00 1 x2ML 0 $ 1,956.23 $3,107.53 $0.00 $0.00 1 x2ML 0 $ 1,956.23 $3,107.53 $0.00 $0.00 1 x0.5ML 0 $ 473.09 $776.88 $0.00 $0.00 1 x0.5ML 0 $ 438.55 $776.88 $0.00 $0.00 1 x0.5ML 0 $ 473.09 $776.88 $0.00 $0.00 Calculating Annual Increase in Drug Expense Annual Impact of Lost COGS Discount Annual Impact of Denied Rebates Annual Inrease in Upfront Inventory Spend % Increase in Upfront Inventory Spend $184.14 $668.81 $4,642.86 78% $104.82 $384.19 $2,666.10 79% $14.10 $914.45 $6,110.44 1341% $0.00 $0.00 $0.00 0 $68.59 $7,847.54 $52,385.55 2362% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $1.92 $12,515.12 $83,436.05 134212% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $1.12 $7,305.21 $48,702.49 134212% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $271.92 $1,616.24 $11,046.88 126% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $112.06 $4,389.72 $29,376.85 811% $0.00 $0.00 $0.00 0 $51.50 $1,821.52 $12,194.96 732% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $7.91 $306.95 $2,054.22 803% $0.00 $0.00 $0.00 0 $2.25 $13,586.23 $90,577.14 124322% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $1.74 $10,491.30 $69,943.74 124322% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $149.34 $887.91 $6,068.76 126% $34.09 $187.65 $1,285.12 117% $0.00 $0.00 $0.00 0 $287.70 $1,830.15 $12,488.70 134% $201.39 $1,281.13 $8,742.23 134% $209.88 $1,347.62 $9,194.02 135% $28.62 $183.77 $1,253.77 135% $276.65 $1,667.53 $11,393.49 127% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.06 $642.11 $4,280.77 217397% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.23 $2,476.70 $16,511.54 217397% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.32 $1,742.06 $11,614.07 110557% $0.09 $917.29 $6,115.38 221211% $0.36 $3,760.91 $25,073.09 217397% $0.86 $9,172.96 $61,153.91 220747% $0.03 $275.19 $1,834.62 219925% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $125.85 $2,058.41 $13,848.57 340% $0.00 $0.00 $0.00 0 $68.57 $1,123.16 $7,556.33 341% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $9.67 $446.64 $2,987.27 955% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $11.98 $534.10 $3,572.62 922% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $3.99 $178.05 $1,190.99 923% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.05 $253.97 $1,693.19 100319% $0.01 $42.33 $282.20 100319% $0.02 $84.66 $564.40 100319% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $2,803.58 $33,761.33 $227,879.08 251% $1,971.55 $23,741.84 $160,250.45 251% $3,032.27 $41,094.80 $276,997.62 283% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $78.88 $992.72 $6,697.03 263% $131.48 $1,654.49 $11,161.43 263% $149.11 $1,874.61 $12,646.49 262% $0.13 $1,180.78 $7,871.98 186562% $0.00 $0.00 $0.00 0 $0.36 $3,306.20 $22,041.68 188732% $358.61 $3,335.28 $22,593.83 195% $0.00 $0.00 $0.00 0 $292.74 $2,722.68 $18,443.94 195% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $176.28 $793.15 $5,463.94 96% $0.00 $0.00 $0.00 0 $176.28 $793.14 $5,463.87 96% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $592.20 $6,144.86 $41,557.95 217% $605.36 $6,281.42 $42,481.46 217% $447.44 $4,642.79 $31,399.34 217% $829.09 $8,602.81 $58,181.14 217% $1,552.89 $16,113.20 $108,974.19 217% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $116.15 $4,261.26 $28,524.53 760% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $27,493.44 $75,656.67 $531,871.23 60% $3,752.81 $10,327.02 $72,599.63 60% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $23.74 $114.69 $788.34 103% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $753.63 $5,143.18 $35,041.48 144% $1,162.41 $7,932.56 $54,046.15 144% $2,320.06 $4,560.93 $32,726.25 44% $1,019.06 $2,003.54 $14,375.99 44% $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 0 Cashflow Impact (Amount Less Cash on Hand) Total Annual Increase in Net Spend % Increase in Net Spend 30 Day 45 Day 60 Day 90 Day $852.95 14% $366.47 $549.71 $732.94 $1,099.41 $489.01 14% $210.52 $315.77 $421.03 $631.55 $928.55 204% $501.07 $751.60 $1,002.14 $1,503.21 $0.00 0 $0.00 $0.00 $0.00 $0.00 $7,916.13 357% $4,300.02 $6,450.04 $8,600.05 $12,900.07 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $12,517.04 20134% $6,857.60 $10,286.40 $13,715.20 $20,572.80 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $7,306.33 20134% $4,002.85 $6,004.28 $8,005.70 $12,008.56 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,888.16 21% $885.61 $1,328.42 $1,771.23 $2,656.84 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $4,501.77 124% $2,405.33 $3,607.99 $4,810.65 $7,215.98 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,873.02 112% $998.09 $1,497.14 $1,996.19 $2,994.28 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $314.86 123% $168.19 $252.28 $336.38 $504.57 $0.00 0 $0.00 $0.00 $0.00 $0.00 $13,588.49 18651% $7,444.51 $11,166.77 $14,889.02 $22,333.53 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $10,493.04 18651% $5,748.66 $8,622.99 $11,497.32 $17,245.97 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,037.25 21% $486.53 $729.79 $973.06 $1,459.58 $221.74 20% $102.82 $154.24 $205.65 $308.47 $0.00 0 $0.00 $0.00 $0.00 $0.00 $2,117.85 23% $1,002.82 $1,504.23 $2,005.64 $3,008.47 $1,482.52 23% $701.99 $1,052.98 $1,403.97 $2,105.96 $1,557.50 23% $738.42 $1,107.63 $1,476.84 $2,215.27 $212.39 23% $100.70 $151.05 $201.39 $302.09 $1,944.17 22% $913.71 $1,370.57 $1,827.43 $2,741.14 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $642.17 32612% $351.84 $527.76 $703.68 $1,055.52 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $2,476.93 32612% $1,357.09 $2,035.64 $2,714.19 $4,071.28 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,742.39 16586% $954.55 $1,431.83 $1,909.11 $2,863.66 $917.38 33184% $502.63 $753.94 $1,005.25 $1,507.88 $3,761.27 32612% $2,060.77 $3,091.16 $4,121.54 $6,182.32 $9,173.81 33115% $5,026.28 $7,539.42 $10,052.56 $15,078.83 $275.21 32991% $150.79 $226.18 $301.58 $452.36 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $2,184.26 54% $1,127.89 $1,691.84 $2,255.79 $3,383.68 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,191.73 54% $615.43 $923.15 $1,230.86 $1,846.30 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $456.31 146% $244.73 $367.10 $489.47 $734.20 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $546.08 141% $292.66 $438.98 $585.31 $877.97 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $182.04 141% $97.56 $146.34 $195.12 $292.68 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $254.02 15051% $139.16 $208.74 $278.32 $417.49 $42.34 15051% $23.19 $34.79 $46.39 $69.58 $84.67 15051% $46.39 $69.58 $92.77 $139.16 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $36,564.90 40% $18,499.36 $27,749.03 $36,998.71 $55,498.07 $25,713.38 40% $13,009.22 $19,513.84 $26,018.45 $39,027.67 $44,127.08 45% $22,517.70 $33,776.55 $45,035.40 $67,553.10 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $1,071.61 42% $543.96 $815.94 $1,087.92 $1,631.87 $1,785.97 42% $906.57 $1,359.86 $1,813.14 $2,719.71 $2,023.72 42% $1,027.18 $1,540.77 $2,054.36 $3,081.55 $1,180.91 27987% $647.00 $970.50 $1,294.00 $1,941.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $3,306.56 28312% $1,811.62 $2,717.42 $3,623.23 $5,434.85 $3,693.89 32% $1,827.55 $2,741.33 $3,655.10 $5,482.66 $0.00 0 $0.00 $0.00 $0.00 $0.00 $3,015.42 32% $1,491.88 $2,237.82 $2,983.76 $4,475.64 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $969.43 17% $434.60 $651.90 $869.20 $1,303.81 $0.00 0 $0.00 $0.00 $0.00 $0.00 $969.42 17% $434.60 $651.89 $869.19 $1,303.79 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $6,737.07 35% $3,367.05 $5,050.57 $6,734.10 $10,101.14 $6,886.78 35% $3,441.87 $5,162.81 $6,883.74 $10,325.61 $5,090.23 35% $2,543.99 $3,815.99 $5,087.98 $7,631.98 $9,431.89 35% $4,713.87 $7,070.80 $9,427.73 $14,141.60 $17,666.09 35% $8,829.15 $13,243.72 $17,658.30 $26,487.44 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $4,377.40 117% $2,334.94 $3,502.40 $4,669.87 $7,004.81 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $103,150.11 12% $41,455.71 $62,183.56 $82,911.42 $124,367.13 $14,079.84 12% $5,658.64 $8,487.96 $11,317.29 $16,975.93 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $138.43 18% $62.84 $94.27 $125.69 $188.53 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $5,896.81 24% $2,818.18 $4,227.27 $5,636.36 $8,454.54 $9,094.97 24% $4,346.61 $6,519.91 $8,693.22 $13,039.83 $6,880.99 9% $2,499.14 $3,748.71 $4,998.28 $7,497.42 $3,022.60 9% $1,097.83 $1,646.74 $2,195.66 $3,293.49 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 $0.00 $0.00 0 $0.00 $0.00 $0.00 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Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation McKesson CH031670 Public Health Management Corporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation 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CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation 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CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation CARDINALPHMC340B CH031670 Public Health ManagementCorporation Ship To Account # Ship To Name Ship To Address 100480824 Pharmacy of America VII 4654 N 5th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 100480824 Pharmacy of America VII 4654 N 5th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150415657 West Town Pharmacy 5259 Rodman St 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150408039 Fairmount Pharmacy (NEW) 1900 Green St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 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Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 100480824 Pharmacy of America VII 4654 N 5th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 056050302 Washington Square Pharmacy (New) 241 South 6th Street 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 100459248 Sunray Drugs LLC 142 S 52nd St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100459248 Sunray Drugs LLC 142 S 52nd St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 100480824 Pharmacy of America VII 4654 N 5th St 100459248 Sunray Drugs LLC 142 S 52nd St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 056050302 Washington Square Pharmacy (New) 241 South 6th Street 100480824 Pharmacy of America VII 4654 N 5th St 2150405762 Pharmacy of America IV 1900 N 9th St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 100480824 Pharmacy of America VII 4654 N 5th St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 2150415657 West Town Pharmacy 5259 Rodman St 073535 Philadelphia Pharmacy 101 E Lehigh Ave 2150415657 West Town Pharmacy 5259 Rodman St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 99999073674 Rite Aid #3394 4530 NORTH 5TH STREET 99999073672 Rite Aid #4932 260 WEST LEHIGH AVENUE #80 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 2150405762 Pharmacy of America IV 1900 N 9th St 99999073672 Rite Aid #4932 260 WEST LEHIGH AVENUE #80 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Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy PHMC Pharmacy Ship To City Ship To State Ship To ZIP Contract RX Order Date Philadelphia PA 19140 Y 2024-12-27 0:00:00 Philadelphia PA 19139 Y 2025-01-03 0:00:00 Philadelphia PA 19143 Y 2025-01-17 0:00:00 Philadelphia PA 19140 Y 2024-12-27 0:00:00 Philadelphia PA 19139 Y 2025-01-03 0:00:00 Philadelphia PA 19139 Y 2025-01-03 0:00:00 Philadelphia PA 19139 Y 2025-01-03 0:00:00 Philadelphia PA 19125 Y 2024-12-31 0:00:00 Philadelphia PA 19139 Y 2025-01-03 0:00:00 Philadelphia PA 19125 Y 2024-12-31 0:00:00 Philadelphia PA 19122 Y 2025-03-04 0:00:00 Philadelphia PA 19140 Y 2025-01-08 0:00:00 Philadelphia PA 19140 Y 2025-01-08 0:00:00 Philadelphia PA 19122 Y 2024-12-31 0:00:00 Philadelphia PA 19125 Y 2025-01-03 0:00:00 Philadelphia PA 19125 Y 2025-01-03 0:00:00 Philadelphia PA 19125 Y 2025-01-03 0:00:00 Philadelphia PA 19125 Y 2025-02-26 0:00:00 Philadelphia PA 19139 Y 2025-01-04 0:00:00 Philadelphia PA 19122 Y 2025-02-10 0:00:00 Philadelphia PA 19143 Y 2025-03-04 0:00:00 Philadelphia PA 19122 Y 2025-01-03 0:00:00 Philadelphia PA 19122 Y 2025-01-03 0:00:00 Philadelphia PA 19122 Y 2025-01-01 0:00:00 Philadelphia PA 19122 Y 2025-01-01 0:00:00 Philadelphia PA 19143 Y 2025-02-27 0:00:00 Philadelphia PA 19140 Y 2024-12-31 0:00:00 Philadelphia PA 19140 Y 2025-01-08 0:00:00 Philadelphia PA 19122 Y 2025-01-10 0:00:00 Philadelphia PA 19125 Y 2025-02-04 0:00:00 Philadelphia PA 19139 Y 2025-03-11 0:00:00 Philadelphia PA 19139 Y 2025-03-11 0:00:00 Philadelphia PA 19139 Y 2025-03-11 0:00:00 Philadelphia PA 19143 Y 2025-01-31 0:00:00 Philadelphia PA 19122 Y 2025-01-07 0:00:00 Philadelphia PA 19122 Y 2025-01-28 0:00:00 Philadelphia PA 19140 Y 2025-01-01 0:00:00 Philadelphia PA 19122 Y 2025-01-28 0:00:00 Philadelphia PA 19140 Y 2025-01-01 0:00:00 Philadelphia PA 19122 Y 2025-01-28 0:00:00 Philadelphia PA 19140 Y 2025-01-20 0:00:00 Philadelphia PA 19122 Y 2025-01-14 0:00:00 Philadelphia PA 19140 Y 2025-01-01 0:00:00 Philadelphia PA 19140 Y 2025-01-10 0:00:00 Philadelphia PA 19106 Y 2025-01-13 0:00:00 Philadelphia PA 19140 Y 2025-02-21 0:00:00 Philadelphia PA 19106 Y 2025-01-11 0:00:00 Philadelphia PA 19140 Y 2025-01-15 0:00:00 Philadelphia PA 19143 Y 2025-01-16 0:00:00 Philadelphia PA 19143 Y 2025-01-16 0:00:00 Philadelphia PA 19122 Y 2025-01-09 0:00:00 Philadelphia PA 19122 Y 2025-01-09 0:00:00 Philadelphia PA 19140 Y 2025-04-05 0:00:00 Philadelphia PA 19140 Y 2025-01-16 0:00:00 Philadelphia PA 19122 Y 2025-01-17 0:00:00 Philadelphia PA 19139 Y 2025-01-30 0:00:00 Philadelphia PA 19122 Y 2025-01-17 0:00:00 Philadelphia PA 19125 Y 2025-01-31 0:00:00 Philadelphia PA 19122 Y 2025-01-15 0:00:00 Philadelphia PA 19140 Y 2025-04-04 0:00:00 Philadelphia PA 19125 Y 2025-03-01 0:00:00 Philadelphia PA 19125 Y 2025-01-09 0:00:00 Philadelphia PA 19143 Y 2025-01-11 0:00:00 Philadelphia PA 19143 Y 2025-01-11 0:00:00 Philadelphia PA 19122 Y 2025-03-21 0:00:00 Philadelphia PA 19122 Y 2025-02-25 0:00:00 Philadelphia PA 19122 Y 2025-02-17 0:00:00 Philadelphia PA 19122 Y 2025-02-17 0:00:00 Philadelphia PA 19140 Y 2025-01-11 0:00:00 Philadelphia PA 19125 Y 2025-03-19 0:00:00 Philadelphia PA 19125 Y 2025-01-23 0:00:00 Philadelphia PA 19125 Y 2025-01-23 0:00:00 Philadelphia PA 19143 Y 2025-03-14 0:00:00 Philadelphia PA 19122 Y 2025-01-22 0:00:00 Philadelphia PA 19122 Y 2025-01-22 0:00:00 Philadelphia PA 19122 Y 2025-01-22 0:00:00 Philadelphia PA 19125 Y 2025-03-11 0:00:00 Philadelphia PA 19125 Y 2025-03-11 0:00:00 Philadelphia PA 19122 Y 2025-02-24 0:00:00 Philadelphia PA 19122 Y 2025-02-24 0:00:00 Philadelphia PA 19130 Y 2025-05-10 0:00:00 Philadelphia PA 19130 Y 2025-05-10 0:00:00 Philadelphia PA 19125 Y 2025-01-22 0:00:00 Philadelphia PA 19125 Y 2025-01-22 0:00:00 Philadelphia PA 19125 Y 2025-01-30 0:00:00 Philadelphia PA 19125 Y 2025-01-22 0:00:00 Philadelphia PA 19140 Y 2025-03-24 0:00:00 Philadelphia PA 19143 Y 2025-04-15 0:00:00 Philadelphia PA 19143 Y 2025-04-15 0:00:00 Philadelphia PA 19140 Y 2025-04-03 0:00:00 Philadelphia PA 19143 Y 2025-02-15 0:00:00 Philadelphia PA 19140 Y 2025-04-09 0:00:00 Philadelphia PA 19125 Y 2025-01-08 0:00:00 Philadelphia PA 19122 Y 2025-01-31 0:00:00 Philadelphia PA 19106 Y 2025-01-08 0:00:00 Philadelphia PA 19122 Y 2025-01-31 0:00:00 Philadelphia PA 19106 Y 2025-01-08 0:00:00 Philadelphia PA 19106 Y 2025-01-08 0:00:00 Philadelphia PA 19143 Y 2025-01-20 0:00:00 Philadelphia PA 19140 Y 2025-01-17 0:00:00 Philadelphia PA 19140 Y 2025-01-17 0:00:00 Philadelphia PA 19125 Y 2025-01-10 0:00:00 Philadelphia PA 19122 Y 2025-04-04 0:00:00 Philadelphia PA 19122 Y 2025-01-27 0:00:00 Philadelphia PA 19122 Y 2025-04-21 0:00:00 Philadelphia PA 19143 Y 2025-03-19 0:00:00 Philadelphia PA 19122 Y 2025-01-27 0:00:00 Philadelphia PA 19122 Y 2025-01-27 0:00:00 Philadelphia PA 19140 Y 2025-02-02 0:00:00 Philadelphia PA 19140 Y 2025-04-12 0:00:00 Philadelphia PA 19122 Y 2025-02-05 0:00:00 Philadelphia PA 19143 Y 2025-01-07 0:00:00 Philadelphia PA 19125 Y 2025-01-24 0:00:00 Philadelphia PA 19143 Y 2025-01-07 0:00:00 Philadelphia PA 19125 Y 2025-03-22 0:00:00 Philadelphia PA 19140 Y 2025-02-08 0:00:00 Philadelphia PA 19143 Y 2025-01-07 0:00:00 Philadelphia PA 19125 Y 2025-02-13 0:00:00 Philadelphia PA 19122 Y 2025-03-14 0:00:00 Philadelphia PA 19122 Y 2025-05-01 0:00:00 Philadelphia PA 19143 Y 2025-03-11 0:00:00 Philadelphia PA 19122 Y 2025-03-13 0:00:00 Philadelphia PA 19125 Y 2025-02-18 0:00:00 Philadelphia PA 19143 Y 2025-03-23 0:00:00 Philadelphia PA 19125 Y 2025-03-08 0:00:00 Philadelphia PA 19143 Y 2025-02-18 0:00:00 Philadelphia PA 19143 Y 2025-02-18 0:00:00 Philadelphia PA 19143 Y 2025-02-18 0:00:00 Philadelphia PA 19122 Y 2025-01-16 0:00:00 Philadelphia PA 19122 Y 2025-02-18 0:00:00 Philadelphia PA 19122 Y 2025-02-18 0:00:00 Philadelphia PA 19125 Y 2025-02-20 0:00:00 Philadelphia PA 19122 Y 2025-02-18 0:00:00 Philadelphia PA 19106 Y 2025-03-26 0:00:00 Philadelphia PA 19122 Y 2025-01-13 0:00:00 Philadelphia PA 19125 Y 2025-01-28 0:00:00 Philadelphia PA 19125 Y 2025-01-28 0:00:00 Philadelphia PA 19139 Y 2025-02-26 0:00:00 Philadelphia PA 19139 Y 2025-02-26 0:00:00 Philadelphia PA 19139 Y 2025-02-26 0:00:00 Philadelphia PA 19122 Y 2025-02-21 0:00:00 Philadelphia PA 19122 Y 2025-02-21 0:00:00 Philadelphia PA 19139 Y 2025-01-28 0:00:00 Philadelphia PA 19122 Y 2025-03-10 0:00:00 Philadelphia PA 19139 Y 2025-01-28 0:00:00 Philadelphia PA 19122 Y 2025-03-10 0:00:00 Philadelphia PA 19140 Y 2025-01-22 0:00:00 Philadelphia PA 19125 Y 2025-04-02 0:00:00 Philadelphia PA 19106 Y 2025-02-24 0:00:00 Philadelphia PA 19140 Y 2025-04-30 0:00:00 Philadelphia PA 19122 Y 2025-05-22 0:00:00 Philadelphia PA 19143 Y 2025-04-25 0:00:00 Philadelphia PA 19143 Y 2025-04-25 0:00:00 Philadelphia PA 19140 Y 2025-04-03 0:00:00 Philadelphia PA 19122 Y 2025-05-14 0:00:00 Philadelphia PA 19122 Y 2025-03-28 0:00:00 Philadelphia PA 19122 Y 2025-03-28 0:00:00 Philadelphia PA 19122 Y 2025-05-26 0:00:00 Philadelphia PA 19122 Y 2025-05-26 0:00:00 Philadelphia PA 19125 Y 2025-04-23 0:00:00 Philadelphia PA 19125 Y 2025-04-23 0:00:00 Philadelphia PA 19140 Y 2025-02-25 0:00:00 Philadelphia PA 19125 Y 2025-05-03 0:00:00 Philadelphia PA 19125 Y 2025-02-06 0:00:00 Philadelphia PA 19122 Y 2025-03-17 0:00:00 Philadelphia PA 19122 Y 2025-03-17 0:00:00 Philadelphia PA 19139 Y 2025-03-27 0:00:00 Philadelphia PA 19125 Y 2025-01-21 0:00:00 Philadelphia PA 19125 Y 2025-01-04 0:00:00 Philadelphia PA 19125 Y 2025-05-15 0:00:00 Philadelphia PA 19140 Y 2025-02-05 0:00:00 Philadelphia PA 19139 Y 2025-04-22 0:00:00 Philadelphia PA 19143 Y 2025-01-21 0:00:00 Philadelphia PA 19122 Y 2025-02-03 0:00:00 Philadelphia PA 19122 Y 2025-02-03 0:00:00 Philadelphia PA 19143 Y 2025-03-26 0:00:00 Philadelphia PA 19139 Y 2025-05-16 0:00:00 Philadelphia PA 19130 Y 2025-03-11 0:00:00 Philadelphia PA 19143 Y 2025-01-29 0:00:00 Philadelphia PA 19122 Y 2025-05-14 0:00:00 Philadelphia PA 19143 Y 2025-01-29 0:00:00 Philadelphia PA 19122 Y 2025-03-03 0:00:00 Philadelphia PA 19143 Y 2025-01-29 0:00:00 Philadelphia PA 19125 Y 2025-03-05 0:00:00 Philadelphia PA 19125 Y 2025-03-05 0:00:00 Philadelphia PA 19143 Y 2025-05-07 0:00:00 Philadelphia PA 19143 Y 2025-04-04 0:00:00 Philadelphia PA 19122 Y 2025-01-06 0:00:00 Philadelphia PA 19122 Y 2025-01-06 0:00:00 Philadelphia PA 19122 Y 2025-03-24 0:00:00 Philadelphia PA 19143 Y 2025-01-04 0:00:00 Philadelphia PA 19122 Y 2025-03-24 0:00:00 Philadelphia PA 19122 Y 2025-01-20 0:00:00 Philadelphia PA 19122 Y 2025-01-20 0:00:00 Philadelphia PA 19130 Y 2025-05-17 0:00:00 Philadelphia PA 19130 Y 2025-05-17 0:00:00 Philadelphia PA 19140 Y 2025-03-28 0:00:00 Philadelphia PA 19125 Y 2025-03-10 0:00:00 Philadelphia PA 19130 Y 2025-01-28 0:00:00 Philadelphia PA 19143 Y 2025-04-12 0:00:00 Philadelphia PA 19130 Y 2025-01-28 0:00:00 Philadelphia PA 19122 Y 2025-01-29 0:00:00 Philadelphia PA 19122 Y 2025-01-29 0:00:00 Philadelphia PA 19143 Y 2025-03-05 0:00:00 Philadelphia PA 19143 Y 2025-03-05 0:00:00 Philadelphia PA 19143 Y 2025-04-03 0:00:00 Philadelphia PA 19143 Y 2025-03-05 0:00:00 Philadelphia PA 19143 Y 2025-01-04 0:00:00 Philadelphia PA 19143 Y 2025-03-07 0:00:00 Philadelphia PA 19122 Y 2025-02-07 0:00:00 Philadelphia PA 19122 Y 2025-02-07 0:00:00 Philadelphia PA 19125 Y 2025-02-12 0:00:00 Philadelphia PA 19122 Y 2025-01-30 0:00:00 Philadelphia PA 19122 Y 2025-03-26 0:00:00 Philadelphia PA 19140 Y 2025-04-10 0:00:00 Philadelphia PA 19125 Y 2025-05-01 0:00:00 Philadelphia PA 19122 Y 2025-04-11 0:00:00 Philadelphia PA 19106 Y 2025-02-15 0:00:00 Philadelphia PA 19122 Y 2025-06-02 0:00:00 Philadelphia PA 19122 Y 2025-02-27 0:00:00 Philadelphia PA 19125 Y 2025-04-08 0:00:00 Philadelphia PA 19125 Y 2025-04-08 0:00:00 Philadelphia PA 19125 Y 2025-05-02 0:00:00 Philadelphia PA 19143 Y 2025-04-02 0:00:00 Philadelphia PA 19125 Y 2025-03-13 0:00:00 Philadelphia PA 19130 Y 2025-03-11 0:00:00 Philadelphia PA 19122 Y 2025-04-03 0:00:00 Philadelphia PA 19122 Y 2025-04-03 0:00:00 Philadelphia PA 19125 Y 2025-03-18 0:00:00 Philadelphia PA 19125 Y 2025-03-18 0:00:00 Philadelphia PA 19122 Y 2025-03-31 0:00:00 Philadelphia PA 19140 Y 2025-02-27 0:00:00 Philadelphia PA 19143 Y 2025-02-25 0:00:00 Philadelphia PA 19122 Y 2025-02-04 0:00:00 Philadelphia PA 19143 Y 2025-03-15 0:00:00 Philadelphia PA 19140 Y 2025-05-07 0:00:00 Philadelphia PA 19122 Y 2025-02-14 0:00:00 Philadelphia PA 19125 Y 2025-03-27 0:00:00 Philadelphia PA 19125 Y 2025-03-27 0:00:00 Philadelphia PA 19125 Y 2025-05-21 0:00:00 Philadelphia PA 19106 Y 2025-03-28 0:00:00 Philadelphia PA 19143 Y 2025-03-20 0:00:00 Philadelphia PA 19143 Y 2025-03-20 0:00:00 Philadelphia PA 19140 Y 2025-03-25 0:00:00 Philadelphia PA 19140 Y 2025-03-25 0:00:00 Philadelphia PA 19122 Y 2025-04-25 0:00:00 Philadelphia PA 19125 Y 2025-04-16 0:00:00 Philadelphia PA 19106 Y 2025-02-02 0:00:00 Philadelphia PA 19125 Y 2025-01-16 0:00:00 Philadelphia PA 19125 Y 2025-04-16 0:00:00 Philadelphia PA 19122 Y 2025-04-29 0:00:00 Philadelphia PA 19125 Y 2025-01-17 0:00:00 Philadelphia PA 19122 Y 2025-05-05 0:00:00 Philadelphia PA 19125 Y 2025-04-30 0:00:00 Philadelphia PA 19125 Y 2025-01-17 0:00:00 Philadelphia PA 19125 Y 2025-04-30 0:00:00 Philadelphia PA 19122 Y 2025-02-26 0:00:00 Philadelphia PA 19140 Y 2025-02-04 0:00:00 Philadelphia PA 19143 Y 2025-02-06 0:00:00 Philadelphia PA 19122 Y 2025-04-22 0:00:00 Philadelphia PA 19143 Y 2025-02-06 0:00:00 Philadelphia PA 19122 Y 2025-06-20 0:00:00 Philadelphia PA 19122 Y 2025-04-15 0:00:00 Philadelphia PA 19122 Y 2025-07-23 0:00:00 Philadelphia PA 19122 Y 2025-04-24 0:00:00 Philadelphia PA 19140 Y 2025-04-08 0:00:00 Philadelphia PA 19140 Y 2025-04-08 0:00:00 Philadelphia PA 19143 Y 2025-04-17 0:00:00 Philadelphia PA 19143 Y 2025-03-08 0:00:00 Philadelphia PA 19143 Y 2025-03-08 0:00:00 Philadelphia PA 19125 Y 2025-06-03 0:00:00 Philadelphia PA 19143 Y 2025-04-09 0:00:00 Philadelphia PA 19143 Y 2025-02-26 0:00:00 Philadelphia PA 19143 Y 2025-03-21 0:00:00 Philadelphia PA 19143 Y 2025-03-21 0:00:00 Philadelphia PA 19143 Y 2025-06-04 0:00:00 Philadelphia PA 19143 Y 2025-03-30 0:00:00 Philadelphia PA 19122 Y 2025-06-11 0:00:00 Philadelphia PA 19122 Y 2025-05-16 0:00:00 Philadelphia PA 19140 Y 2025-03-15 0:00:00 Philadelphia PA 19143 Y 2025-01-18 0:00:00 Philadelphia PA 19143 Y 2025-01-25 0:00:00 Philadelphia PA 19140 Y 2025-03-09 0:00:00 Philadelphia PA 19140 Y 2025-02-14 0:00:00 Philadelphia PA 19143 Y 2025-01-25 0:00:00 Philadelphia PA 19140 Y 2025-02-14 0:00:00 Philadelphia PA 19125 Y 2025-02-25 0:00:00 Philadelphia PA 19125 Y 2025-02-25 0:00:00 Philadelphia PA 19125 Y 2025-02-25 0:00:00 Philadelphia PA 19143 Y 2025-02-20 0:00:00 Philadelphia PA 19143 Y 2025-03-24 0:00:00 Philadelphia PA 19143 Y 2025-04-24 0:00:00 Philadelphia PA 19143 Y 2025-04-24 0:00:00 Philadelphia PA 19106 Y 2025-03-28 0:00:00 Philadelphia PA 19125 Y 2025-06-12 0:00:00 Philadelphia PA 19125 Y 2025-06-12 0:00:00 Philadelphia PA 19139 Y 2025-02-07 0:00:00 Philadelphia PA 19139 Y 2025-02-07 0:00:00 Philadelphia PA 19140 Y 2025-04-25 0:00:00 Philadelphia PA 19106 Y 2025-04-05 0:00:00 Philadelphia PA 19143 Y 2025-03-28 0:00:00 Philadelphia PA 19139 Y 2025-03-26 0:00:00 Philadelphia PA 19139 Y 2025-03-26 0:00:00 Philadelphia PA 19122 Y 2025-03-11 0:00:00 Philadelphia PA 19125 Y 2025-04-05 0:00:00 Philadelphia PA 19106 Y 2025-04-10 0:00:00 Philadelphia PA 19125 Y 2025-02-11 0:00:00 Philadelphia PA 19140 Y 2025-04-22 0:00:00 Philadelphia PA 19140 Y 2025-04-22 0:00:00 Philadelphia PA 19122 Y 2025-05-12 0:00:00 Philadelphia PA 19122 Y 2025-05-12 0:00:00 Philadelphia PA 19140 Y 2025-03-05 0:00:00 Philadelphia PA 19122 Y 2025-05-12 0:00:00 Philadelphia PA 19122 Y 2025-05-12 0:00:00 Philadelphia PA 19125 Y 2025-04-24 0:00:00 Philadelphia PA 19125 Y 2025-02-27 0:00:00 Philadelphia PA 19140 Y 2025-05-13 0:00:00 Philadelphia PA 19122 Y 2025-05-21 0:00:00 Philadelphia PA 19106 Y 2025-03-25 0:00:00 Philadelphia PA 19143 Y 2025-07-02 0:00:00 Philadelphia PA 19143 Y 2025-02-11 0:00:00 Philadelphia PA 19139 Y 2025-04-02 0:00:00 Philadelphia PA 19139 Y 2025-04-02 0:00:00 Philadelphia PA 19122 Y 2025-03-18 0:00:00 Philadelphia PA 19122 Y 2025-03-18 0:00:00 Philadelphia PA 19139 Y 2025-05-13 0:00:00 Philadelphia PA 19143 Y 2025-05-16 0:00:00 Philadelphia PA 19143 Y 2025-05-16 0:00:00 Philadelphia PA 19125 Y 2025-05-30 0:00:00 Philadelphia PA 19122 Y 2025-04-07 0:00:00 Philadelphia PA 19122 Y 2025-04-07 0:00:00 Philadelphia PA 19122 Y 2025-04-07 0:00:00 Philadelphia PA 19143 Y 2025-03-06 0:00:00 Philadelphia PA 19125 Y 2025-04-17 0:00:00 Philadelphia PA 19143 Y 2025-05-04 0:00:00 Philadelphia PA 19125 Y 2025-05-29 0:00:00 Philadelphia PA 19143 Y 2025-05-31 0:00:00 Philadelphia PA 19143 Y 2025-05-31 0:00:00 Philadelphia PA 19143 Y 2025-03-31 0:00:00 Philadelphia PA 19143 Y 2025-03-25 0:00:00 Philadelphia PA 19125 Y 2025-07-04 0:00:00 Philadelphia PA 19125 Y 2025-07-04 0:00:00 Philadelphia PA 19143 Y 2025-03-25 0:00:00 Philadelphia PA 19125 Y 2025-05-06 0:00:00 Philadelphia PA 19122 Y 2025-03-20 0:00:00 Philadelphia PA 19122 Y 2025-04-10 0:00:00 Philadelphia PA 19140 Y 2025-02-07 0:00:00 Philadelphia PA 19122 Y 2025-05-13 0:00:00 Philadelphia PA 19143 Y 2025-05-08 0:00:00 Philadelphia PA 19143 Y 2025-03-27 0:00:00 Philadelphia PA 19143 Y 2025-05-08 0:00:00 Philadelphia PA 19143 Y 2025-05-15 0:00:00 Philadelphia PA 19139 Y 2025-03-19 0:00:00 Philadelphia PA 19106 Y 2025-04-08 0:00:00 Philadelphia PA 19106 Y 2025-04-08 0:00:00 Philadelphia PA 19106 Y 2025-04-08 0:00:00 Philadelphia PA 19140 Y 2025-04-13 0:00:00 Philadelphia PA 19140 Y 2025-04-13 0:00:00 Philadelphia PA 19143 Y 2024-12-31 0:00:00 Philadelphia PA 19125 Y 2025-03-21 0:00:00 Philadelphia PA 19125 Y 2025-03-21 0:00:00 Philadelphia PA 19122 Y 2025-05-29 0:00:00 Philadelphia PA 19143 Y 2025-05-01 0:00:00 Philadelphia PA 19143 Y 2025-08-30 0:00:00 Philadelphia PA 19140 Y 2025-04-01 0:00:00 Philadelphia PA 19140 Y 2025-04-01 0:00:00 Philadelphia PA 19143 Y 2025-07-17 0:00:00 Philadelphia PA 19122 Y 2025-03-18 0:00:00 Philadelphia PA 19122 Y 2025-05-15 0:00:00 Philadelphia PA 19122 Y 2025-04-18 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19125 Y 2025-04-04 0:00:00 Philadelphia PA 19125 Y 2025-04-04 0:00:00 Philadelphia PA 19125 Y 2025-04-04 0:00:00 Philadelphia PA 19140 Y 2025-04-01 0:00:00 Philadelphia PA 19140 Y 2025-04-01 0:00:00 Philadelphia PA 19143 Y 2025-06-22 0:00:00 Philadelphia PA 19143 Y 2025-06-22 0:00:00 Philadelphia PA 19143 Y 2025-06-22 0:00:00 Philadelphia PA 19122 Y 2025-04-28 0:00:00 Philadelphia PA 19143 Y 2025-02-19 0:00:00 Philadelphia PA 19143 Y 2025-02-19 0:00:00 Philadelphia PA 19143 Y 2025-02-19 0:00:00 Philadelphia PA 19125 Y 2025-07-09 0:00:00 Philadelphia PA 19122 Y 2025-06-23 0:00:00 Philadelphia PA 19122 Y 2025-06-23 0:00:00 Philadelphia PA 19140 Y 2025-03-23 0:00:00 Philadelphia PA 19106 Y 2025-04-04 0:00:00 Philadelphia PA 19125 Y 2025-04-10 0:00:00 Philadelphia PA 19122 Y 2025-03-25 0:00:00 Philadelphia PA 19122 Y 2025-03-25 0:00:00 Philadelphia PA 19125 Y 2025-03-20 0:00:00 Philadelphia PA 19125 Y 2025-06-24 0:00:00 Philadelphia PA 19125 Y 2025-06-24 0:00:00 Philadelphia PA 19122 Y 2025-06-24 0:00:00 Philadelphia PA 19122 Y 2025-06-24 0:00:00 Philadelphia PA 19143 Y 2025-06-24 0:00:00 Philadelphia PA 19125 Y 2025-06-25 0:00:00 Philadelphia PA 19143 Y 2025-06-24 0:00:00 Philadelphia PA 19125 Y 2025-06-25 0:00:00 Philadelphia PA 19143 Y 2025-05-25 0:00:00 Philadelphia PA 19125 Y 2025-06-11 0:00:00 Philadelphia PA 19122 Y 2025-04-14 0:00:00 Philadelphia PA 19122 Y 2025-04-14 0:00:00 Philadelphia PA 19125 Y 2025-03-04 0:00:00 Philadelphia PA 19140 Y 2025-04-06 0:00:00 Philadelphia PA 19125 Y 2025-06-07 0:00:00 Philadelphia PA 19143 Y 2025-04-05 0:00:00 Philadelphia PA 19143 Y 2025-04-05 0:00:00 Philadelphia PA 19143 Y 2025-04-05 0:00:00 Philadelphia PA 19143 Y 2025-04-05 0:00:00 Philadelphia PA 19122 Y 2025-06-03 0:00:00 Philadelphia PA 19125 Y 2025-05-14 0:00:00 Philadelphia PA 19125 Y 2025-05-14 0:00:00 Philadelphia PA 19125 Y 2025-04-15 0:00:00 Philadelphia PA 19125 Y 2025-05-14 0:00:00 Philadelphia PA 19125 Y 2025-04-15 0:00:00 Philadelphia PA 19139 Y 2025-05-14 0:00:00 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Y PHILADELPHIA PA 19120 Y PHILADELPHIA PA 19133 Y PHILADELPHIA PA 19133 Y Philadelphia PA 19125 Y Philadelphia PA 19125 Y PHILADELPHIA PA 19143 Y N 2025-09-29 0:00:00 N 2025-09-29 0:00:00 N 2025-09-29 0:00:00 N 2025-09-25 0:00:00 N 2025-09-25 0:00:00 N 2025-09-25 0:00:00 N 2025-09-25 0:00:00 N 2025-09-26 0:00:00 N 2025-09-26 0:00:00 N 2025-09-26 0:00:00 N 2025-09-30 0:00:00 N 2025-09-30 0:00:00 N 2025-10-02 0:00:00 N 2025-10-02 0:00:00 N 2025-10-02 0:00:00 N 2025-10-01 0:00:00 N 2025-10-01 0:00:00 N 2025-10-02 0:00:00 N 2025-10-02 0:00:00 N 2025-10-02 0:00:00 N 2025-05-12 0:00:00 N 2025-05-12 0:00:00 N 2025-05-09 0:00:00 N 2025-05-09 0:00:00 N 2025-05-13 0:00:00 N 2025-05-13 0:00:00 N 2025-05-15 0:00:00 N 2025-05-15 0:00:00 N 2025-05-15 0:00:00 N 2025-05-19 0:00:00 N 2025-05-19 0:00:00 N 2025-05-19 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-05-20 0:00:00 N 2025-10-22 0:00:00 N 2025-10-22 0:00:00 N 2025-10-22 0:00:00 N 2025-10-23 0:00:00 N 2025-10-23 0:00:00 N 2025-10-23 0:00:00 N 2025-10-23 0:00:00 N 2025-10-28 0:00:00 N 2025-10-28 0:00:00 N 2025-10-28 0:00:00 N 2025-10-29 0:00:00 N 2025-10-29 0:00:00 N 2025-10-29 0:00:00 N 2025-10-29 0:00:00 N 2025-10-30 0:00:00 N 2025-10-30 0:00:00 N 2025-10-30 0:00:00 N 2025-10-28 0:00:00 N 2025-10-28 0:00:00 N 2025-10-31 0:00:00 N 2025-10-31 0:00:00 N 2025-11-05 0:00:00 N 2025-11-05 0:00:00 N 2025-01-02 0:00:00 N 2025-01-02 0:00:00 N 2025-01-02 0:00:00 N 2025-01-02 0:00:00 N 2025-01-03 0:00:00 N 2025-01-03 0:00:00 N 2025-01-03 0:00:00 N 2025-01-03 0:00:00 N 2025-01-08 0:00:00 N 2025-01-08 0:00:00 N 2025-01-08 0:00:00 N 2025-01-08 0:00:00 N 2025-01-09 0:00:00 N 2025-01-09 0:00:00 N 2025-01-09 0:00:00 N 2025-01-09 0:00:00 N 2025-01-10 0:00:00 N 2025-01-13 0:00:00 N 2025-01-13 0:00:00 N 2025-01-13 0:00:00 N 2025-01-14 0:00:00 N 2025-01-14 0:00:00 N 2025-01-14 0:00:00 N 2025-01-28 0:00:00 N 2025-01-28 0:00:00 N 2025-01-28 0:00:00 N 2025-01-30 0:00:00 N 2025-01-31 0:00:00 N 2025-02-03 0:00:00 N 2025-02-03 0:00:00 N 2025-02-05 0:00:00 N 2025-02-06 0:00:00 N 2025-02-06 0:00:00 N 2025-01-29 0:00:00 N 2025-01-29 0:00:00 N 2025-02-04 0:00:00 N 2025-02-04 0:00:00 N 2025-02-04 0:00:00 N 2025-02-04 0:00:00 N 2025-02-04 0:00:00 N 2025-02-04 0:00:00 N 2025-02-06 0:00:00 N 2025-12-11 0:00:00 N 2025-12-11 0:00:00 N 2025-12-11 0:00:00 N 2025-12-15 0:00:00 N 2025-12-15 0:00:00 N 2025-12-17 0:00:00 N 2025-12-17 0:00:00 N 2025-12-17 0:00:00 N 2025-12-16 0:00:00 N 2025-12-16 0:00:00 N 2025-12-16 0:00:00 N 2025-12-16 0:00:00 N 2025-12-18 0:00:00 N 2025-12-18 0:00:00 N 2025-12-18 0:00:00 N 2025-12-18 0:00:00 N 2025-12-18 0:00:00 N 2025-12-18 0:00:00 N 2025-12-19 0:00:00 N 2025-12-19 0:00:00 N 2025-12-19 0:00:00 N 2025-12-19 0:00:00 N 2025-12-19 0:00:00 N 2025-12-22 0:00:00 N 2025-12-22 0:00:00 N 2025-12-22 0:00:00 N 2025-12-22 0:00:00 N 2025-12-23 0:00:00 N 2025-12-23 0:00:00 N 2025-12-23 0:00:00 N 2025-12-23 0:00:00 N 2025-12-26 0:00:00 N 2025-12-29 0:00:00 N 2025-12-30 0:00:00 N 2025-12-30 0:00:00 N 2025-12-30 0:00:00 N 2025-12-30 0:00:00 N 2025-12-30 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-12-31 0:00:00 N 2025-03-27 0:00:00 N 2025-03-27 0:00:00 N 2025-03-31 0:00:00 N 2025-03-31 0:00:00 N 2025-03-31 0:00:00 N 2025-04-01 0:00:00 N 2025-04-01 0:00:00 N 2025-03-28 0:00:00 N 2025-04-04 0:00:00 N 2025-04-04 0:00:00 N 2025-04-04 0:00:00 N 2025-04-07 0:00:00 N 2025-04-07 0:00:00 N 2025-04-07 0:00:00 N 2025-04-07 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-02 0:00:00 N 2025-04-09 0:00:00 N 2025-04-09 0:00:00 N 2025-04-09 0:00:00 N 2025-01-13 0:00:00 N 2025-01-13 0:00:00 N 2025-01-13 0:00:00 N 2025-01-15 0:00:00 N 2025-01-15 0:00:00 N 2025-01-15 0:00:00 N 2025-01-15 0:00:00 N 2025-01-15 0:00:00 N 2025-01-16 0:00:00 N 2025-01-16 0:00:00 N 2025-01-16 0:00:00 N 2025-01-16 0:00:00 N 2025-01-17 0:00:00 N 2025-01-17 0:00:00 N 2025-01-17 0:00:00 N 2025-01-21 0:00:00 N 2025-01-22 0:00:00 N 2025-01-22 0:00:00 N 2025-01-23 0:00:00 N 2025-01-23 0:00:00 N 2025-01-23 0:00:00 N 2025-01-23 0:00:00 N 2025-01-24 0:00:00 N 2025-01-24 0:00:00 N 2025-01-24 0:00:00 N 2025-01-24 0:00:00 N 2025-01-24 0:00:00 N 2025-01-27 0:00:00 N 2025-01-27 0:00:00 N 2025-12-05 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-12-08 0:00:00 N 2025-12-09 0:00:00 N 2025-12-09 0:00:00 N 2025-12-12 0:00:00 N 2025-12-12 0:00:00 N 2025-12-10 0:00:00 N 2025-12-10 0:00:00 N 2025-02-10 0:00:00 N 2025-02-11 0:00:00 N 2025-02-11 0:00:00 N 2025-02-11 0:00:00 N 2025-02-11 0:00:00 N 2025-02-07 0:00:00 N 2025-02-07 0:00:00 N 2025-02-07 0:00:00 N 2025-02-13 0:00:00 N 2025-02-13 0:00:00 N 2025-02-13 0:00:00 N 2025-02-13 0:00:00 N 2025-02-13 0:00:00 N 2025-02-17 0:00:00 N 2025-02-17 0:00:00 N 2025-02-17 0:00:00 N 2025-02-17 0:00:00 N 2025-02-17 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-02-18 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-12 0:00:00 N 2025-11-14 0:00:00 N 2025-11-14 0:00:00 N 2025-11-17 0:00:00 N 2025-11-18 0:00:00 N 2025-11-18 0:00:00 N 2025-11-14 0:00:00 N 2025-11-14 0:00:00 N 2025-11-14 0:00:00 N 2025-11-17 0:00:00 N 2025-11-17 0:00:00 N 2025-11-19 0:00:00 N 2025-11-19 0:00:00 N 2025-11-21 0:00:00 N 2025-11-21 0:00:00 N 2025-11-25 0:00:00 N 2025-11-25 0:00:00 N 2025-11-25 0:00:00 N 2025-11-25 0:00:00 N 2025-11-27 0:00:00 N 2025-11-27 0:00:00 N 2025-11-27 0:00:00 N 2025-12-02 0:00:00 N 2025-12-02 0:00:00 N 2025-12-02 0:00:00 N 2025-12-02 0:00:00 N 2025-12-04 0:00:00 N 2025-12-08 0:00:00 N 2025-12-08 0:00:00 N 2025-12-08 0:00:00 N 2025-01-06 0:00:00 N 2025-01-06 0:00:00 N 2025-01-06 0:00:00 N 2025-01-06 0:00:00 N 2025-11-03 0:00:00 N 2025-11-03 0:00:00 N 2025-11-04 0:00:00 N 2025-11-04 0:00:00 N 2025-11-05 0:00:00 N 2025-11-06 0:00:00 N 2025-11-06 0:00:00 N 2025-11-06 0:00:00 N 2025-11-06 0:00:00 N 2025-11-06 0:00:00 N 2025-11-06 0:00:00 N 2025-11-07 0:00:00 N 2025-11-07 0:00:00 N 2025-11-07 0:00:00 N 2025-11-07 0:00:00 N 2025-11-10 0:00:00 N 2025-11-10 0:00:00 N 2025-11-11 0:00:00 N 2025-11-11 0:00:00 N 2025-11-11 0:00:00 N 2025-11-11 0:00:00 N 2025-11-13 0:00:00 N 2025-11-13 0:00:00 N 2025-11-13 0:00:00 N 2025-09-05 0:00:00 N 2025-09-05 0:00:00 N 2025-09-05 0:00:00 N 2025-09-04 0:00:00 N 2025-09-04 0:00:00 N 2025-09-04 0:00:00 N 2025-09-04 0:00:00 N 2025-09-09 0:00:00 N 2025-09-09 0:00:00 N 2025-09-09 0:00:00 N 2025-09-09 0:00:00 N 2025-09-09 0:00:00 N 2025-09-08 0:00:00 N 2025-09-08 0:00:00 N 2025-09-08 0:00:00 N 2025-09-08 0:00:00 N 2025-09-08 0:00:00 N 2025-09-10 0:00:00 N 2025-09-10 0:00:00 N 2025-09-10 0:00:00 N 2025-09-10 0:00:00 N 2025-09-10 0:00:00 N 2025-10-16 0:00:00 N 2025-10-16 0:00:00 N 2025-10-16 0:00:00 N 2025-10-14 0:00:00 N 2025-10-14 0:00:00 N 2025-10-17 0:00:00 N 2025-10-17 0:00:00 N 2025-10-17 0:00:00 N 2025-10-20 0:00:00 N 2025-10-21 0:00:00 N 2025-10-21 0:00:00 N 2025-10-21 0:00:00 N 2025-10-20 0:00:00 N 2025-10-03 0:00:00 N 2025-10-03 0:00:00 N 2025-10-03 0:00:00 N 2025-10-06 0:00:00 N 2025-10-07 0:00:00 N 2025-10-07 0:00:00 N 2025-10-08 0:00:00 N 2025-10-08 0:00:00 N 2025-10-08 0:00:00 N 2025-10-08 0:00:00 N 2025-10-09 0:00:00 N 2025-10-09 0:00:00 N 2025-10-09 0:00:00 N 2025-10-09 0:00:00 N 2025-07-01 0:00:00 N 2025-07-01 0:00:00 N 2025-07-01 0:00:00 N 2025-06-30 0:00:00 N 2025-06-30 0:00:00 N 2025-06-30 0:00:00 N 2025-07-02 0:00:00 N 2025-07-02 0:00:00 N 2025-07-03 0:00:00 N 2025-07-03 0:00:00 N 2025-07-03 0:00:00 N 2025-07-04 0:00:00 N 2025-07-08 0:00:00 N 2025-07-08 0:00:00 N 2025-07-29 0:00:00 N 2025-07-29 0:00:00 N 2025-07-29 0:00:00 N 2025-07-29 0:00:00 N 2025-07-29 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-07-31 0:00:00 N 2025-08-05 0:00:00 N 2025-08-05 0:00:00 N 2025-08-05 0:00:00 N 2025-08-01 0:00:00 N 2025-08-01 0:00:00 N 2025-08-04 0:00:00 N 2025-08-06 0:00:00 N 2025-08-06 0:00:00 N 2025-08-06 0:00:00 N 2025-03-18 0:00:00 N 2025-03-20 0:00:00 N 2025-03-25 0:00:00 N 2025-03-19 0:00:00 N 2025-03-25 0:00:00 N 2025-03-25 0:00:00 N 2025-03-26 0:00:00 N 2025-03-26 0:00:00 N 2025-03-26 0:00:00 N 2025-03-26 0:00:00 N 2025-03-26 0:00:00 N 2025-03-26 0:00:00 N 2025-03-27 0:00:00 N 2025-03-27 0:00:00 N 2025-03-27 0:00:00 N 2025-03-27 0:00:00 N 2025-03-27 0:00:00 N 2025-06-02 0:00:00 N 2025-06-02 0:00:00 N 2025-06-02 0:00:00 N 2025-06-02 0:00:00 N 2025-05-29 0:00:00 N 2025-05-30 0:00:00 N 2025-05-30 0:00:00 N 2025-05-30 0:00:00 N 2025-05-30 0:00:00 N 2025-05-30 0:00:00 N 2025-05-30 0:00:00 N 2025-06-05 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-03 0:00:00 N 2025-06-05 0:00:00 N 2025-06-05 0:00:00 N 2025-06-09 0:00:00 N 2025-06-06 0:00:00 N 2025-06-06 0:00:00 N 2025-05-26 0:00:00 N 2025-05-21 0:00:00 N 2025-05-21 0:00:00 N 2025-05-28 0:00:00 N 2025-05-28 0:00:00 N 2025-05-28 0:00:00 N 2025-05-28 0:00:00 N 2025-05-28 0:00:00 N 2025-05-29 0:00:00 N 2025-05-29 0:00:00 N 2025-05-29 0:00:00 N 2025-05-29 0:00:00 N 2025-05-29 0:00:00 N 2025-03-03 0:00:00 N 2025-03-04 0:00:00 N 2025-03-04 0:00:00 N 2025-03-04 0:00:00 N 2025-03-04 0:00:00 N 2025-03-04 0:00:00 N 2025-03-04 0:00:00 N 2025-03-05 0:00:00 N 2025-03-05 0:00:00 N 2025-03-05 0:00:00 N 2025-03-05 0:00:00 N 2025-03-07 0:00:00 N 2025-03-07 0:00:00 N 2025-03-10 0:00:00 N 2025-03-10 0:00:00 N 2025-03-11 0:00:00 N 2025-03-12 0:00:00 N 2025-03-12 0:00:00 N 2025-03-12 0:00:00 N 2025-03-12 0:00:00 N 2025-03-14 0:00:00 N 2025-03-14 0:00:00 N 2025-03-14 0:00:00 N 2025-03-11 0:00:00 N 2025-03-11 0:00:00 N 2025-03-11 0:00:00 N 2025-03-13 0:00:00 N 2025-03-13 0:00:00 N 2025-03-13 0:00:00 N 2025-03-13 0:00:00 N 2025-03-13 0:00:00 N 2025-03-13 0:00:00 N 2025-04-30 0:00:00 N 2025-04-30 0:00:00 N 2025-04-30 0:00:00 N 2025-04-30 0:00:00 N 2025-05-01 0:00:00 N 2025-05-01 0:00:00 N 2025-05-02 0:00:00 N 2025-05-02 0:00:00 N 2025-04-29 0:00:00 N 2025-04-29 0:00:00 N 2025-04-29 0:00:00 N 2025-05-05 0:00:00 N 2025-05-05 0:00:00 N 2025-05-05 0:00:00 N 2025-05-09 0:00:00 N 2025-05-09 0:00:00 N 2025-05-09 0:00:00 N 2025-05-09 0:00:00 N 2025-05-02 0:00:00 N 2025-05-02 0:00:00 N 2025-05-06 0:00:00 N 2025-09-09 0:00:00 N 2025-09-11 0:00:00 N 2025-09-11 0:00:00 N 2025-09-11 0:00:00 N 2025-09-11 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-12 0:00:00 N 2025-09-12 0:00:00 N 2025-09-12 0:00:00 N 2025-09-15 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-16 0:00:00 N 2025-09-18 0:00:00 N 2025-09-17 0:00:00 N 2025-09-17 0:00:00 N 2025-09-17 0:00:00 N 2025-06-10 0:00:00 N 2025-06-12 0:00:00 N 2025-06-12 0:00:00 N 2025-06-11 0:00:00 N 2025-06-13 0:00:00 N 2025-06-17 0:00:00 N 2025-06-17 0:00:00 N 2025-06-17 0:00:00 N 2025-06-17 0:00:00 N 2025-06-17 0:00:00 N 2025-06-17 0:00:00 N 2025-06-18 0:00:00 N 2025-06-18 0:00:00 N 2025-06-12 0:00:00 N 2025-06-12 0:00:00 N 2025-06-18 0:00:00 N 2025-06-18 0:00:00 N 2025-06-23 0:00:00 N 2025-06-23 0:00:00 N 2025-06-23 0:00:00 N 2025-06-24 0:00:00 N 2025-06-24 0:00:00 N 2025-06-16 0:00:00 N 2025-04-11 0:00:00 N 2025-04-08 0:00:00 N 2025-04-08 0:00:00 N 2025-04-15 0:00:00 N 2025-04-15 0:00:00 N 2025-04-09 0:00:00 N 2025-04-17 0:00:00 N 2025-04-17 0:00:00 N 2025-04-17 0:00:00 N 2025-04-17 0:00:00 N 2025-04-16 0:00:00 N 2025-04-16 0:00:00 N 2025-04-16 0:00:00 N 2025-04-16 0:00:00 N 2025-04-18 0:00:00 N 2025-04-18 0:00:00 N 2025-04-18 0:00:00 N 2025-04-18 0:00:00 N 2025-04-21 0:00:00 N 2025-04-21 0:00:00 N 2025-04-03 0:00:00 N 2025-04-03 0:00:00 N 2025-04-03 0:00:00 N 2025-04-23 0:00:00 N 2025-04-23 0:00:00 N 2025-04-22 0:00:00 N 2025-04-23 0:00:00 N 2025-04-23 0:00:00 N 2025-04-23 0:00:00 N 2025-04-28 0:00:00 N 2025-04-24 0:00:00 N 2025-04-24 0:00:00 N 2025-04-24 0:00:00 N 2025-04-24 0:00:00 N 2025-04-24 0:00:00 N 2025-04-25 0:00:00 N 2025-08-12 0:00:00 N 2025-08-12 0:00:00 N 2025-08-12 0:00:00 N 2025-08-12 0:00:00 N 2025-08-08 0:00:00 N 2025-08-22 0:00:00 N 2025-08-22 0:00:00 N 2025-08-22 0:00:00 N 2025-08-20 0:00:00 N 2025-08-20 0:00:00 N 2025-08-20 0:00:00 N 2025-08-20 0:00:00 N 2025-08-20 0:00:00 N 2025-08-20 0:00:00 N 2025-08-21 0:00:00 N 2025-08-21 0:00:00 N 2025-08-21 0:00:00 N 2025-08-21 0:00:00 N 2025-08-21 0:00:00 N 2025-03-21 0:00:00 N 2025-03-21 0:00:00 N 2025-03-24 0:00:00 N 2025-03-24 0:00:00 N 2025-03-24 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0:00:00 7429658817 00169477212 2025-07-14 0:00:00 7429857028 00169450514 2025-07-14 0:00:00 7429857028 00169477212 2025-07-14 0:00:00 7429857028 00169418113 2025-07-15 0:00:00 7430117242 00002143380 2025-07-16 0:00:00 7430311975 00002143380 2025-07-16 0:00:00 7430311975 00002223680 2025-07-16 0:00:00 7430311975 00169452414 2025-07-17 0:00:00 7430464804 00597015230 2025-07-17 0:00:00 7430464804 00078077720 2025-07-15 0:00:00 7430117242 00002318280 2025-07-15 0:00:00 7430117242 00169452414 2025-08-14 0:00:00 7434497854 00002143480 2025-08-14 0:00:00 7434497854 00310621030 2025-08-14 0:00:00 7434497854 00310620530 2025-08-14 0:00:00 7434497854 00173088710 2025-08-14 0:00:00 7434497854 00169418113 2025-08-13 0:00:00 7434320526 00002143480 2025-08-13 0:00:00 7434320526 61874011530 2025-08-13 0:00:00 7434320526 00169477212 2025-08-18 0:00:00 7434891178 00006057761 2025-08-18 0:00:00 7434891178 50458057830 2025-08-15 0:00:00 7434679388 00078069620 2025-08-19 0:00:00 7435112937 61958250101 2025-08-19 0:00:00 7435112937 00169452414 2025-02-25 0:00:00 7410858931 00173085910 2025-02-25 0:00:00 7410858931 00173086910 2025-02-25 0:00:00 7410858931 61958250101 2025-02-25 0:00:00 7410858931 73070010315 2025-02-25 0:00:00 7410858931 00173089310 2025-02-26 0:00:00 7411128219 00173086910 2025-02-26 0:00:00 7411128219 00310621030 2025-02-19 0:00:00 7410106693 00173086910 2025-02-19 0:00:00 7410106693 00169452414 2025-02-19 0:00:00 7410106693 00169477212 2025-02-20 0:00:00 7410287577 00173089310 2025-02-24 0:00:00 7410686334 00173086910 2025-02-21 0:00:00 7410458920 00002143380 2025-02-21 0:00:00 7410458920 00310621030 2025-02-21 0:00:00 7410458920 00310620530 2025-02-21 0:00:00 7410458920 00169430330 2025-02-26 0:00:00 7411128219 61958250101 2025-02-26 0:00:00 7411128219 73070010315 2025-02-26 0:00:00 7411128219 00169413013 2025-02-26 0:00:00 7411128219 00169418113 2025-02-27 0:00:00 7411290528 00597015230 2025-02-27 0:00:00 7411290528 61958250101 2025-02-27 0:00:00 7411290528 00169451714 2025-02-27 0:00:00 7411290528 00169418113 2025-05-07 0:00:00 7420570251 00173085910 Sales Description Manufacturer Sold Qty RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK (1) RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 INS NOVOLOG MD 100U/ML 10ML NOVO NORDISK 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES (1) RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 1 RXXARELTO 20 MG TAB 30 JANSSEN 3 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 4 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 DAPAGLIFLOZIN TB 5MG PRAS 30@ PRASCO LABORATORIES 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 3 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 XARELTO TB 20MG 10X10UD JANSSEN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXLINZESS 290 MCG CAP 30 ALLERGAN 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK (1) OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 1 RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA (2) OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 RXDAPAGLIFLOZIN 5 MG TAB 30 PRASCO LABORATORIES 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 4 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 RXRYBELSUS 3 MG TAB 30 NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 XARELTO TB 2.5MG 60 JANSSEN 1 RYBELSUS TB 3MG 30UU 1/D NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 2 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 RYBELSUS TAB 3MG BOTTLE 30 NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 2 ENTRESTO TAB 24 26MG 60 NOVARTIS 1 RYBELSUS TAB 3MG BOTTLE 30 NOVO NORDISK 3 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 ENTRESTO TB 24-26MG 60 NOVARTIS 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 DAPAGLIFLOZIN TB 5MG PRAS 30@ PRASCO LABORATORIES 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - ENTRESTO TB 49-51MG 60 NOVARTIS 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - ENTRESTO TAB 49 51MG 60 NOVARTIS 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA (1) RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 XARELTO TB 10MG 30 JANSSEN 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 2 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - RYBELSUS TAB 14MG BOTTLE 30 NOVO NORDISK 3 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 2 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 3 VRAYLAR CAP 3MG 30 ALLERGAN 1 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 XARELTO TB 10MG 30 JANSSEN 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 OZEMPIC PEN 2MG NOVO NORDISK 3 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - RXXARELTO 20 MG TAB 30 JANSSEN 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 4 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 XARELTO TB 20MG 30 JANSSEN 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 XARELTO TB 20MG 30 JANSSEN 1 ENTRESTO TB 24-26MG 60 NOVARTIS - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 2 ENTRESTO TB 24-26MG 60 NOVARTIS - OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 2 OZEMPIC PEN 2MG NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 XARELTO TB 10MG 30 JANSSEN 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 4 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 INS NOVOLOG MD 100U/ML 10ML NOVO NORDISK 4 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXDAPAGLIFLOZIN 10 MG TAB 30 PRASCO LABORATORIES 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 RXRYBELSUS 3 MG TAB 30 NOVO NORDISK 1 RXDAPAGLIFLOZIN 10 MG TAB 30 PRASCO LABORATORIES 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 XARELTO TB 2.5MG 60 JANSSEN 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 INS NOVOLOG MD 100U/ML 10ML NOVO NORDISK 4 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RYBELSUS TAB 14MG BOTTLE 30 NOVO NORDISK 3 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 3 RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 RXOZEMPIC 1MG/0.75ML PFP 3 ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 VRAYLAR CAP 3MG 30 ALLERGAN 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 3 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 3 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 4 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 RXOZEMPIC 1MG/0.75ML PFP 3 ML NOVO NORDISK 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 XARELTO TB 2.5MG 60 JANSSEN 1 RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXRYBELSUS 3 MG TAB 30 NOVO NORDISK 3 RXDAPAGLIFLOZIN 10 MG TAB 30 PRASCO LABORATORIES 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK (1) OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 6 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 2 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - ENTRESTO TB 49-51MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN NOVO NORDISK 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 XARELTO TB 20MG 30 JANSSEN 1 XARELTO TAB 20MG 30 JANSSEN 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 2 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 ENTRESTO TAB 24 26MG 60 NOVARTIS 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC PEN 2MG NOVO NORDISK 3 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 2 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 NOVOLOG VIAL 100U 10ML NOVO NORDISK 5 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 2 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 4 OZEMPIC PEN 2MG NOVO NORDISK 1 RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RYBELSUS TB 3MG 30UU 1/D NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC PEN 2MG NOVO NORDISK 3 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 3 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 4 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 RXXARELTO 20 MG TAB 30 JANSSEN 3 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RYBELSUS TB 7MG 30UU 1/D NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 INS NOVOLOG MD 100U/ML 10ML NOVO NORDISK 4 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 4 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 3 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 RXRYBELSUS 3 MG TAB 30 NOVO NORDISK 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 2 XARELTO TB 20MG 10X10UD JANSSEN 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 RYBELSUS TB 7MG 30UU 1/D NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 3 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RYBELSUS TB 3MG 30UU 1/D NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 3 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 INS NOVOLOG FLEXPEN SY 5X3ML PPN NOVO NORDISK 2 OZEMPIC PEN 2MG NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 1 OZEMPIC PEN 2MG NOVO NORDISK 3 NOVOLOG VIAL 100U 10ML NOVO NORDISK 5 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA - OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXENTRESTO FCT 24/ 26MG TAB 60 NOVARTIS 3 RXENTRESTO FCT 97/ 103MG TAB 60 NOVARTIS 2 RXWEGOVY 2.4 MG PFP 4X0.75 ML NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 RXXARELTO 20 MG TAB 30 JANSSEN 3 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 XARELTO TB 2.5MG 60 JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 10X10UD JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ENTRESTO TAB 49 51MG 60 NOVARTIS 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 5 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 3 DAPAGLIFLOZIN TB 10MG PRAS 30@ PRASCO LABORATORIES 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 XARELTO TB 20MG 30 JANSSEN 1 XARELTO TB 15MG 30 JANSSEN 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 2 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 24-26MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 15MG 30 JANSSEN 1 XARELTO TB 20MG 30 JANSSEN 1 XARELTO TB 2.5MG 60 JANSSEN 1 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 RXINSULIN ASPART FLEX 100 UN/ML PFS 5X3 ML NOVO NORDISK PHARMA 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 XARELTO TB 15MG 30 JANSSEN 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 2.5MG 60 JANSSEN 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC PEN 2MG NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 2.5MG 60 JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 RYBELSUS TB 7MG 30UU 1/D NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 XARELTO TB 15MG 30 JANSSEN 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 NOVOLOG VIAL 100U 10ML NOVO NORDISK 6 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 2 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 RXWEGOVY 0.5 MG PFP 4X0.5 ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 XARELTO TB 15MG 30 JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TB 49-51MG 60 NOVARTIS 1 RXXARELTO 20 MG TAB 30 JANSSEN 1 RXDAPAGLIFLOZIN 10 MG TAB 30 PRASCO LABORATORIES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 3 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXVRAYLAR 3 MG CAP 30 ALLERGAN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 2 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK 1 INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXVRAYLAR 1.5 MG CAP 30 ALLERGAN 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 XARELTO TB 2.5MG 60 JANSSEN 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 OZEMPIC PEN 2MG NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 1MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - INS ASP FLXPN SY 100U/ML 5X3ML NOVO NORDISK PHARMA 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 1 INS NOVOLOG MD 100U/ML 10ML NOVO NORDISK 4 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 RXBIKTARVY 50MG/200MG/25MG TAB 30 GILEAD SCIENCES 1 XARELTO TB 20MG 30 JANSSEN 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 RYBELSUS TB 7MG 30UU 1/D NOVO NORDISK 1 XARELTO TB 20MG 30 JANSSEN 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 DAPAGLIFLOZIN TB 10MG 30 PRASCO LABORATORIES 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 RYBELSUS TB 7MG 30UU 1/D NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RYBELSUS TAB 14MG BOTTLE 30 NOVO NORDISK 3 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 ENTRESTO TB 97-103MG 60 NOVARTIS 1 RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 XARELTO TB 15MG 30 JANSSEN 1 XARELTO TB 20MG 30 JANSSEN 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - ENTRESTO TB 97-103MG 60 NOVARTIS 1 DAPAGLIFLOZIN TB 5MG 30 PRASCO LABORATORIES 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 RXNOVOLOG INSULIN FLX 100UN/ML PFS 5X3ML NOVO NORDISK 3 RXOZEMPIC 0.25/0.5 MG PFP 3 ML NOVO NORDISK 1 LINZESS CP 72MCG 30 ALLERGAN 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 RXOZEMPIC 1MG/0.75ML PFP 3 ML NOVO NORDISK 2 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - RXOZEMPIC 2MG/0.75ML PFP 3 ML NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ELIQUIS TB 5MG 60 B-M SQUIBB U.S. (PRIMARY CARE) - OZEMPIC PEN 2MG NOVO NORDISK 3 XARELTO TB 2.5MG 60 JANSSEN 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 LINZESS CP 72MCG 30 ALLERGAN 1 ENTRESTO TAB 97 103MG 60 NOVARTIS 3 ENTRESTO TAB 97 103MG 60 NOVARTIS 3 OZEMPIC SY 1MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN NOVO NORDISK 1 OZEMPIC SY 2MG 3ML PPN NOVO NORDISK 1 ENTRESTO TAB 97 103MG 60 NOVARTIS 3 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 3 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 3 NOVOLOG F PEN PREF SYR 3ML 5 NOVO NORDISK 3 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK 1 WEGOVY 0.25MG 4 PREF PENS NOVO NORDISK (1) OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK (1) OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK (3) OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK (3) OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 3 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK (1) OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 OZEMPIC INJ 0.25MG 0.5MG 3ML NOVO NORDISK 1 XARELTO TAB 20MG 30 JANSSEN 3 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 1 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA 4 INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA (1) INSULIN ASPART FLEXPEN 5X3ML NOVO NORDISK PHARMA (4) XARELTO TAB 10MG 30 JANSSEN 1 XARELTO TAB 10MG 30 JANSSEN 3 LINZESS CAP 145MCG 30 ALLERGAN 3 LINZESS CAP 145MCG 30 ALLERGAN 3 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC 1MG DOSE PEN (3ML) NOVO NORDISK 1 OZEMPIC PEN 2MG NOVO NORDISK (3) OZEMPIC PEN 2MG NOVO NORDISK 3 OZEMPIC PEN 2MG NOVO NORDISK 1 BIKTARVY 50-200-25MG TB 30 CPLT 5 TRULICITY SY 4.5MG/0.5ML 4 PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 INS NOVOLOG FLEXPEN SY 5X3ML PPN 2 OZEMPIC SY 1MG 3ML PPN 4 OZEMPIC SY 2MG 3ML PPN 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 JANUVIA TB 25MG 30UU 3 ELIQUIS TB 5MG 60 10 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT 1 JARDIANCE TB 10MG 30 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 10 XARELTO TB 20MG 1000 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 5 RYBELSUS TB 7MG 30UU 1/D 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 TRADJENTA TB 5MG 30 1 TRELEGY ELLIP IN200-62.5-25MCG 60 2 TRULICITY SY 3MG/0.5ML 4 PPN 4 OZEMPIC SY 2MG 3ML PPN 1 XARELTO TB 15MG 30 3 OZEMPIC SY 2MG 3ML PPN 3 FARXIGA TB 5MG 30 5 TRULICITY SY 3MG/0.5ML 4 PPN 3 TRULICITY SY 4.5MG/0.5ML 4 PPN 2 JARDIANCE TB 25MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 TRADJENTA TB 5MG 30 4 TRADJENTA TB 5MG 90 4 FARXIGA TB 10MG 30 10 TRULICITY SY 4.5MG/0.5ML 4 PPN 5 OZEMPIC SY 1MG 3ML PPN 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 4 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 JARDIANCE TB 25MG 30 - TRULICITY SY 0.75MG/0.5ML 4 PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 1 INS NOVOLOG FLEXPEN SY 5X3ML PPN 3 BIKTARVY 50-200-25MG TB 30 CPLT 1 TRULICITY SY 3MG/0.5ML 4 PPN 3 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 4 FARXIGA TB 10MG 30 10 FARXIGA TB 10MG 30 10 FARXIGA TB 5MG 30 - FARXIGA TB 10MG 30 6 FARXIGA TB 5MG 30 15 TRULICITY SY 3MG/0.5ML 4 PPN 4 OZEMPIC SY 2MG 3ML PPN 5 JANUMET TB 50-1000MG 60 1 JARDIANCE TB 10MG 30 6 JARDIANCE TB 25MG 30 3 BIKTARVY TB50-200-25MG 30CPLT BPK 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 FARXIGA TB 5MG 30 10 ENTRESTO TB 24-26MG 60 2 FARXIGA TB 10MG 30 10 VRAYLAR CP 1.5MG 30 2 JANUMET XR TB 100-1000MG 30UU 12 JARDIANCE TB 10MG 30 6 BIKTARVY 50-200-25MG TB 30 CPLT 4 TRULICITY SY 3MG/0.5ML 4 PPN 2 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 FARXIGA TB 5MG 30 4 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN - WEGOVY SY 2.4MG/0.75ML 4X0.75ML - JARDIANCE TB 10MG 30 5 BREO ELLIPTA IN 200-25MCG 30INH 1 OZEMPIC SY 1MG 3ML PPN 2 OZEMPIC SY 2MG 3ML PPN 1 ANORO ELLIPTA IN 62.5-25MCG 30INH 3 TRELEGY ELLIP IN100-62.5-25MCG 60 3 BIKTARVY 50-200-25MG TB 30 CPLT 5 INS ASP FLXPN SY 100U/ML 5X3ML 5 BIKTARVY 50-200-25MG TB 30 CPLT 3 OZEMPIC SY 1MG 3ML PPN 2 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 OZEMPIC SY 2MG 3ML PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT 2 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 FARXIGA TB 10MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 4 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 BIKTARVY 50-200-25MG TB 30 CPLT 3 ANORO ELLIPTA IN 62.5-25MCG 30INH 3 TRULICITY SY 1.5MG/0.5ML 4 PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT - OZEMPIC SY 1MG 3ML PPN 2 RYBELSUS TB 7MG 30UU 1/D 1 ELIQUIS TB 5MG 60 5 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 1.5MG/0.5ML 4 PPN 2 FARXIGA TB 10MG 30 4 FARXIGA TB 5MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT - OZEMPIC SY 1MG 3ML PPN 2 OZEMPIC SY 2MG 3ML PPN 2 OZEMPIC SY 2MG 3ML PPN 1 TRULICITY SY 3MG/0.5ML 4 PPN 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 2 OZEMPIC SY 2MG 3ML PPN 1 BIKTARVY 50-200-25MG TB 30 CPLT 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 JANUVIA TB 25MG 30UU 2 ANORO ELLIPTA IN 62.5-25MCG 30INH 6 OZEMPIC SY 2MG 3ML PPN 3 XARELTO TB 15MG 30 3 FARXIGA TB 10MG 30 8 BIKTARVY 50-200-25MG TB 30 CPLT 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 ELIQUIS TB 5MG 60 10 JARDIANCE TB 10MG 30 10 FARXIGA TB 10MG 30 3 FARXIGA TB 5MG 30 8 BREO ELLIPTA IN 200-25MCG 30INH 4 RYBELSUS TB 7MG 30UU 1/D 1 JANUVIA TB 25MG 30UU 6 JANUVIA TB 100MG 1000 1 ELIQUIS TB 5MG 60 2 TRELEGY ELLIP IN200-62.5-25MCG 60 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 1 TRELEGY ELLIP IN200-62.5-25MCG 60 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 BREO ELLIPTA IN 100-25MCG 30INH 1 FARXIGA TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 4 INS ASP FLXPN SY 100U/ML 5X3ML 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 TRELEGY ELLIP IN100-62.5-25MCG 60 3 TRULICITY SY 4.5MG/0.5ML 4 PPN 1 BIKTARVY TB50-200-25MG 30CPLT BPK 4 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 JARDIANCE TB 10MG 30 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 TRULICITY SY 4.5MG/0.5ML 4 PPN 2 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 4 OZEMPIC SY 2MG 3ML PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 2 TRULICITY SY 3MG/0.5ML 4 PPN 2 RYBELSUS TB 7MG 30UU 1/D 1 TRULICITY SY 4.5MG/0.5ML 4 PPN 3 TRELEGY ELLIP IN200-62.5-25MCG 60 3 INS NOVOLOG FLEXPEN SY 5X3ML PPN 3 ELIQUIS TB 5MG 60 1 FARXIGA TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 6 BIKTARVY 50-200-25MG TB 30 CPLT 2 OZEMPIC SY 1MG 3ML PPN 2 BIKTARVY TB50-200-25MG 30CPLT BPK 2 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 5 INS NOVOLOG FLEXPEN SY 5X3ML PPN 5 BREO ELLIPTA IN 100-25MCG 30INH 4 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT - INS ASP FLXPN SY 100U/ML 5X3ML - TRULICITY SY 3MG/0.5ML 4 PPN 2 TRELEGY ELLIP IN200-62.5-25MCG 60 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 2 OZEMPIC SY 2MG 3ML PPN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 ELIQUIS TB 5MG 60 10 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 3 BIKTARVY 50-200-25MG TB 30 CPLT 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 BIKTARVY 50-200-25MG TB 30 CPLT 4 BIKTARVY TB50-200-25MG 30CPLT BPK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 TRULICITY SY 0.75MG/0.5ML 4 PPN 3 BIKTARVY 50-200-25MG TB 30 CPLT 2 BIKTARVY TB50-200-25MG 30CPLT BPK 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 JANUVIA TB 100MG 1000 1 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 ENTRESTO TB 24-26MG 180 1 RYBELSUS TB 7MG 30UU 1/D 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 BIKTARVY 50-200-25MG TB 30 CPLT 2 INS ASP FLXPN SY 100U/ML 5X3ML 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML - OZEMPIC SY 2MG 3ML PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 BREO ELLIPTA IN 100-25MCG 30INH 4 JARDIANCE TB 10MG 30 10 JARDIANCE TB 25MG 30 10 TRULICITY SY 3MG/0.5ML 4 PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 TRELEGY ELLIP IN100-62.5-25MCG 60 1 TRELEGY ELLIP IN200-62.5-25MCG 60 2 JARDIANCE TB 25MG 30 8 ELIQUIS TB 2.5MG 60 3 ELIQUIS TB 5MG 60 5 BREO ELLIPTA IN 100-25MCG 30INH 1 JARDIANCE TB 10MG 30 6 JARDIANCE TB 25MG 30 6 BIKTARVY 50-200-25MG TB 30 CPLT 2 INS ASP FLXPN SY 100U/ML 5X3ML 3 TRULICITY SY 3MG/0.5ML 4 PPN 3 BIKTARVY TB50-200-25MG 30CPLT BPK 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 FARXIGA TB 5MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 3MG/0.5ML 4 PPN 5 OZEMPIC SY 2MG 3ML PPN 7 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT 10 BREO ELLIPTA IN 100-25MCG 30INH 1 BREO ELLIPTA IN 200-25MCG 30INH 4 BIKTARVY 50-200-25MG TB 30 CPLT 3 TRULICITY SY 3MG/0.5ML 4 PPN 3 ELIQUIS TB 5MG 60 5 BIKTARVY 50-200-25MG TB 30 CPLT 6 OZEMPIC SY 2MG 3ML PPN 3 XARELTO TB 15MG 30 3 ELIQUIS TB 5MG 60 - TRULICITY SY 1.5MG/0.5ML 4 PPN 3 TRULICITY SY 3MG/0.5ML 4 PPN 3 BIKTARVY TB50-200-25MG 30CPLT BPK 2 ELIQUIS TB 5MG 60 10 JARDIANCE TB 10MG 30 5 JARDIANCE TB 25MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT 2 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 2 JANUVIA TB 25MG 30UU 5 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 TRELEGY ELLIP IN100-62.5-25MCG 60 4 TRULICITY SY 3MG/0.5ML 4 PPN 4 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 4 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 JANUMET TB 50-1000MG 60 1 JARDIANCE TB 10MG 30 10 JARDIANCE TB 25MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 10 OZEMPIC SY 1MG 3ML PPN 5 BIKTARVY TB50-200-25MG 30CPLT BPK 1 OZEMPIC SY 2MG 3ML PPN 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 TRULICITY SY 3MG/0.5ML 4 PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 BIKTARVY TB50-200-25MG 30CPLT BPK 4 OZEMPIC SY 2MG 3ML PPN 5 BIKTARVY TB50-200-25MG 30CPLT BPK 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 5 BIKTARVY TB50-200-25MG 30CPLT BPK 2 XARELTO TB 2.5MG 60 3 TRULICITY SY 3MG/0.5ML 4 PPN 5 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 JARDIANCE TB 25MG 30 10 FARXIGA TB 10MG 30 10 BREO ELLIPTA IN 200-25MCG 30INH 3 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 1 OZEMPIC SY 1MG 3ML PPN 3 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 2 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 2 FARXIGA TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 5 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 5 INS NOVOLOG FLEXPEN SY 5X3ML PPN 2 JARDIANCE TB 25MG 30 2 JANUVIA TB 50MG 30UU 1 FARXIGA TB 10MG 30 1 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 2 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 OZEMPIC SY 2MG 3ML PPN 1 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 VRAYLAR CP 1.5MG 30 - INS ASP FLXPN SY 100U/ML 5X3ML 5 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 4 JANUVIA TB 25MG 30UU 5 XARELTO TB 15MG 30 3 JARDIANCE TB 10MG 30 10 OZEMPIC SY 1MG 3ML PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 OZEMPIC SY 1MG 3ML PPN 1 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 BREO ELLIPTA IN 100-25MCG 30INH 4 VRAYLAR CP 1.5MG 30 1 JARDIANCE TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT - OZEMPIC SY 1MG 3ML PPN 2 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 FARXIGA TB 10MG 30 10 TRULICITY SY 3MG/0.5ML 4 PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 JARDIANCE TB 10MG 30 12 ENTRESTO TB 24-26MG 180 2 OZEMPIC SY 1MG 3ML PPN 3 JANUVIA TB 25MG 30UU 3 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 ENTRESTO TB 24-26MG 60 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 6 XARELTO TB 15MG 30 1 JARDIANCE TB 25MG 30 1 FARXIGA TB 10MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT 5 OZEMPIC SY 2MG 3ML PPN 4 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 FARXIGA TB 10MG 30 10 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 XIFAXAN TB 550MG 60 1 XARELTO TB 15MG 30 1 BREO ELLIPTA IN 100-25MCG 30INH 3 JARDIANCE TB 25MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 6 JARDIANCE TB 10MG 30 1 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 4 OZEMPIC SY 2MG 3ML PPN 5 TRULICITY SY 3MG/0.5ML 4 PPN 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 JARDIANCE TB 10MG 30 1 TRULICITY SY 4.5MG/0.5ML 4 PPN 3 TRULICITY SY 4.5MG/0.5ML 4 PPN 3 JARDIANCE TB 10MG 30 10 JARDIANCE TB 25MG 30 5 ENTRESTO TB 24-26MG 180 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 OZEMPIC SY 1MG 3ML PPN 4 FARXIGA TB 10MG 30 10 FARXIGA TB 5MG 30 5 REXULTI TB 0.5MG 30 1 TRULICITY SY 3MG/0.5ML 4 PPN 1 ELIQUIS TB 5MG 60 10 TRULICITY SY 4.5MG/0.5ML 4 PPN 3 JARDIANCE TB 10MG 30 10 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 FARXIGA TB 5MG 30 10 ENTRESTO TB 24-26MG 180 1 JARDIANCE TB 25MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 5 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 ELIQUIS TB 2.5MG 60 1 XARELTO TB 20MG 1000 1 BIKTARVY TB50-200-25MG 30CPLT BPK 1 ANORO ELLIPTA IN 62.5-25MCG 30INH 4 TRULICITY SY 1.5MG/0.5ML 4 PPN 3 TRELEGY ELLIP IN100-62.5-25MCG 60 4 FARXIGA TB 5MG 30 5 TRULICITY SY 3MG/0.5ML 4 PPN 4 ELIQUIS TB 5MG 60 10 BIKTARVY 50-200-25MG TB 30 CPLT 1 OZEMPIC SY 1MG 3ML PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 10 JANUVIA TB 25MG 30UU 5 BREO ELLIPTA IN 100-25MCG 30INH 3 XIFAXAN TB 550MG 60 1 FARXIGA TB 5MG 30 5 ENTRESTO TB 97-103MG 60 1 VRAYLAR CP 1.5MG 30 1 BIKTARVY TB50-200-25MG 30CPLT BPK 1 ELIQUIS TB 2.5MG 60 5 BREO ELLIPTA IN 100-25MCG 30INH 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 1 FARXIGA TB 5MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT 7 INS ASP FLXPN SY 100U/ML 5X3ML 5 OZEMPIC SY 1MG 3ML PPN 5 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 5 TRULICITY SY 4.5MG/0.5ML 4 PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 JARDIANCE TB 10MG 30 10 OZEMPIC SY 1MG 3ML PPN 5 TRULICITY SY 3MG/0.5ML 4 PPN 2 FARXIGA TB 10MG 30 10 ENTRESTO TB 49-51MG 180 1 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 3MG/0.5ML 4 PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 OZEMPIC SY 2MG 3ML PPN 2 JARDIANCE TB 25MG 30 6 JARDIANCE TB 25MG 30 6 JARDIANCE TB 25MG 30 6 ELIQUIS TB 2.5MG 60 2 ELIQUIS TB 5MG 60 5 ANORO ELLIPTA IN 62.5-25MCG 30INH - TRULICITY SY 0.75MG/0.5ML 4 PPN 2 TRULICITY SY 1.5MG/0.5ML 4 PPN 2 TRULICITY SY 3MG/0.5ML 4 PPN 3 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 JARDIANCE TB 10MG 30 10 FARXIGA TB 10MG 30 5 BREO ELLIPTA IN 200-25MCG 30INH 2 BIKTARVY 50-200-25MG TB 30 CPLT 6 JARDIANCE TB 10MG 30 7 TRULICITY SY 0.75MG/0.5ML 4 PPN 5 OZEMPIC SY 1MG 3ML PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 TRULICITY SY 4.5MG/0.5ML 4 PPN 2 ELIQUIS TB 2.5MG 60 2 ELIQUIS TB 5MG 60 5 TRULICITY SY 0.75MG/0.5ML 4 PPN 4 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 ENTRESTO TB 24-26MG 60 - OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 JARDIANCE TB 25MG 30 10 BREO ELLIPTA IN 100-25MCG 30INH 3 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 TRULICITY SY 1.5MG/0.5ML 4 PPN 3 TRELEGY ELLIP IN100-62.5-25MCG 60 2 INS ASP FLXPN SY 100U/ML 5X3ML 4 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 4 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 TRELEGY ELLIP IN100-62.5-25MCG 60 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 TRULICITY SY 3MG/0.5ML 4 PPN 4 OZEMPIC SY 1MG 3ML PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 OZEMPIC SY 1MG 3ML PPN 2 JANUVIA TB 25MG 30UU 4 OZEMPIC SY 1MG 3ML PPN 1 ELIQUIS TB 2.5MG 60 3 JARDIANCE TB 10MG 30 1 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 3MG/0.5ML 4 PPN 2 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 1 ELIQUIS TB 5MG 60 10 BIKTARVY 50-200-25MG TB 30 CPLT 7 INS ASP FLXPN SY 100U/ML 5X3ML 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 TRULICITY SY 4.5MG/0.5ML 4 PPN 2 OZEMPIC SY 1MG 3ML PPN 2 BREO ELLIPTA IN 100-25MCG 30INH 2 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 BIKTARVY 50-200-25MG TB 30 CPLT - WEGOVY SY 2.4MG/0.75ML 4X0.75ML 3 RYBELSUS TB 7MG 30UU 1/D 1 OZEMPIC SY 2MG 3ML PPN 1 XARELTO TB 20MG 30 2 FARXIGA TB 5MG 30 5 BIKTARVY 50-200-25MG TB 30 CPLT 6 OZEMPIC SY 1MG 3ML PPN 1 TRULICITY SY 3MG/0.5ML 4 PPN 4 OZEMPIC SY 1MG 3ML PPN 1 ENTRESTO TB 24-26MG 60 2 BIKTARVY 50-200-25MG TB 30 CPLT 3 INS NOVOLOG FLEXPEN SY 5X3ML PPN 5 JANUVIA TB 25MG 30UU 5 VRAYLAR CP 3MG 30 1 BIKTARVY 50-200-25MG TB 30 CPLT 4 OZEMPIC SY 2MG 3ML PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 2 BIKTARVY 50-200-25MG TB 30 CPLT 3 TRELEGY ELLIP IN200-62.5-25MCG 60 1 JARDIANCE TB 25MG 30 10 FARXIGA TB 10MG 30 5 BIKTARVY TB50-200-25MG 30CPLT BPK 2 ELIQUIS TB 5MG 60 1 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 TRULICITY SY 1.5MG/0.5ML 4 PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 3MG/0.5ML 4 PPN 3 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 2 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 JARDIANCE TB 10MG 30 10 BREO ELLIPTA IN 200-25MCG 30INH 1 BIKTARVY 50-200-25MG TB 30 CPLT 5 BIKTARVY 50-200-25MG TB 30 CPLT 3 BIKTARVY TB50-200-25MG 30CPLT BPK 2 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 BIKTARVY 50-200-25MG TB 30 CPLT 3 FARXIGA TB 5MG 30 10 TRELEGY ELLIP IN100-62.5-25MCG 60 3 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 3 TRULICITY SY 0.75MG/0.5ML 4 PPN 4 ENTRESTO TB 24-26MG 180 1 TRULICITY SY 3MG/0.5ML 4 PPN 5 XARELTO TB 15MG 30 1 JARDIANCE TB 10MG 30 3 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 BIKTARVY 50-200-25MG TB 30 CPLT 5 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 JANUMET TB 50-1000MG 60 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 XARELTO TB 15MG 30 1 JARDIANCE TB 25MG 30 1 BIKTARVY 50-200-25MG TB 30 CPLT 3 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 ELIQUIS TB 2.5MG 60 1 BREO ELLIPTA IN 100-25MCG 30INH 1 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 JANUVIA TB 25MG 30UU 1 OZEMPIC SY 2MG 3ML PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 JARDIANCE TB 10MG 30 11 FARXIGA TB 5MG 30 3 TRELEGY ELLIP IN100-62.5-25MCG 60 1 TRULICITY SY 3MG/0.5ML 4 PPN 1 OZEMPIC SY 1MG 3ML PPN 5 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 3 JARDIANCE TB 10MG 30 12 TRULICITY SY 0.75MG/0.5ML 4 PPN 1 TRELEGY ELLIP IN100-62.5-25MCG 60 1 TRELEGY ELLIP IN200-62.5-25MCG 60 4 XARELTO TB 15MG 30 3 BIKTARVY 50-200-25MG TB 30 CPLT 7 RYBELSUS TB 7MG 30UU 1/D 1 JARDIANCE TB 10MG 30 8 JARDIANCE TB 25MG 30 10 ENTRESTO TB 49-51MG 60 1 VRAYLAR CP 3MG 30 1 BIKTARVY 50-200-25MG TB 30 CPLT 8 TRULICITY SY 4.5MG/0.5ML 4 PPN 4 OZEMPIC SY 2MG 3ML PPN 4 JARDIANCE TB 10MG 30 6 JARDIANCE TB 25MG 30 10 BIKTARVY TB50-200-25MG 30CPLT BPK 2 OZEMPIC SY 2MG 3ML PPN 3 OZEMPIC SY 2MG 3ML PPN 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 6 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 FARXIGA TB 5MG 30 9 BIKTARVY 50-200-25MG TB 30 CPLT 6 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 XIFAXAN TB 550MG 60 1 TRULICITY SY 0.75MG/0.5ML 4 PPN 3 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 5 OZEMPIC SY 2MG 3ML PPN 2 JARDIANCE TB 25MG 30 5 OZEMPIC SY 1MG 3ML PPN 1 OZEMPIC SY 2MG 3ML PPN 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 3 TRULICITY SY 3MG/0.5ML 4 PPN 5 OZEMPIC SY 1MG 3ML PPN 4 OZEMPIC SY 2MG 3ML PPN 5 TRULICITY SY 0.75MG/0.5ML 4 PPN 3 VRAYLAR CP 3MG 30 2 INS ASP FLXPN SY 100U/ML 5X3ML - TRULICITY SY 3MG/0.5ML 4 PPN - JARDIANCE TB 10MG 30 6 JARDIANCE TB 25MG 30 6 INS ASP FLXPN SY 100U/ML 5X3ML 9 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 FARXIGA TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 6 BIKTARVY 50-200-25MG TB 30 CPLT - BIKTARVY TB50-200-25MG 30CPLT BPK 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 TRULICITY SY 1.5MG/0.5ML 4 PPN 1 BIKTARVY 50-200-25MG TB 30 CPLT 5 TRULICITY SY 3MG/0.5ML 4 PPN - WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 2 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 3 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 BIKTARVY 50-200-25MG TB 30 CPLT 5 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 XARELTO TB 2.5MG 60 2 TRULICITY SY 4.5MG/0.5ML 4 PPN 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 JANUVIA TB 100MG 1000 1 JANUMET TB 50-1000MG 60 2 JARDIANCE TB 10MG 30 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 JANUVIA TB 50MG 30UU 5 BREO ELLIPTA IN 100-25MCG 30INH 1 JARDIANCE TB 10MG 30 10 JARDIANCE TB 25MG 30 10 JANUMET TB 50-1000MG 60 2 ELIQUIS TB 5MG 60 1 BREO ELLIPTA IN 100-25MCG 30INH 1 BREO ELLIPTA IN 200-25MCG 30INH 6 BIKTARVY 50-200-25MG TB 30 CPLT 4 TRULICITY SY 3MG/0.5ML 4 PPN 3 JANUMET XR TB 50-1000MG 60UU 2 BREO ELLIPTA IN 100-25MCG 30INH 3 FARXIGA TB 10MG 30 5 FARXIGA TB 5MG 30 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 RYBELSUS TB 7MG 30UU 1/D 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 INS ASP FLXPN SY 100U/ML 5X3ML - OZEMPIC SY 1MG 3ML PPN 2 OZEMPIC SY 2MG 3ML PPN 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 JARDIANCE TB 10MG 30 7 TRULICITY SY 0.75MG/0.5ML 4 PPN 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 BREO ELLIPTA IN 200-25MCG 30INH 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 INS ASP FLXPN SY 100U/ML 5X3ML - WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 2 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 FARXIGA TB 10MG 30 10 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 4 BREO ELLIPTA IN 200-25MCG 30INH 2 BIKTARVY 50-200-25MG TB 30 CPLT 10 WEGOVY SY 1MG/0.5ML 4X0.5ML PPN 5 TRULICITY SY 3MG/0.5ML 4 PPN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 JARDIANCE TB 10MG 30 1 JARDIANCE TB 25MG 30 10 TRULICITY SY 0.75MG/0.5ML 4 PPN 2 TRELEGY ELLIP IN200-62.5-25MCG 60 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 BIKTARVY TB50-200-25MG 30CPLT BPK 3 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 4 TRELEGY ELLIP IN100-62.5-25MCG 60 4 TRELEGY ELLIP IN200-62.5-25MCG 60 3 BIKTARVY TB50-200-25MG 30CPLT BPK 1 FARXIGA TB 10MG 30 5 XARELTO TB 2.5MG 60 4 INS ASP FLXPN SY 100U/ML 5X3ML 4 TRULICITY SY 4.5MG/0.5ML 4 PPN 6 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 5 ELIQUIS TB 5MG 60 10 ENTRESTO TB 49-51MG 60 2 XARELTO TB 2.5MG 60 1 TRULICITY SY 3MG/0.5ML 4 PPN 4 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 3 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 OZEMPIC SY 2MG 3ML PPN 1 XARELTO TB 20MG 30 - XARELTO TB 20MG 90 1 FARXIGA TB 5MG 30 6 BIKTARVY 50-200-25MG TB 30 CPLT 5 XARELTO TB 20MG 1000 1 BIKTARVY TB50-200-25MG 30CPLT BPK 2 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 TRULICITY SY 3MG/0.5ML 4 PPN 2 BIKTARVY TB50-200-25MG 30CPLT BPK 4 JANUMET XR TB 50-1000MG 60UU 2 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 1 TRELEGY ELLIP IN200-62.5-25MCG 60 2 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 4 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 BIKTARVY 50-200-25MG TB 30 CPLT - TRELEGY ELLIP IN200-62.5-25MCG 60 5 JANUVIA TB 25MG 30UU 3 JANUMET TB 50-1000MG 60 1 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 JARDIANCE TB 10MG 30 10 FARXIGA TB 10MG 30 5 INS ASP FLXPN SY 100U/ML 5X3ML 10 OZEMPIC SY 1MG 3ML PPN 3 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 4 BIKTARVY 50-200-25MG TB 30 CPLT - ANORO ELLIPTA IN 62.5-25MCG 30INH 3 OZEMPIC SY 1MG 3ML PPN 3 OZEMPIC SY 2MG 3ML PPN 3 ANORO ELLIPTA IN 62.5-25MCG 30INH - WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 2 ELIQUIS TB 5MG 60 10 JARDIANCE TB 10MG 30 10 JARDIANCE TB 25MG 30 10 FARXIGA TB 10MG 30 10 ENTRESTO TB 24-26MG 180 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 5 JARDIANCE TB 10MG 30 1 WEGOVY SY 0.25MG/0.5ML4X0.5ML PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 BREO ELLIPTA IN 100-25MCG 30INH 5 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 6 FARXIGA TB 10MG 30 1 BIKTARVY 50-200-25MG TB 30 CPLT 10 INS ASP FLXPN SY 100U/ML 5X3ML 3 BIKTARVY 50-200-25MG TB 30 CPLT 5 OZEMPIC SY 2MG 3ML PPN 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 2 JARDIANCE TB 10MG 30 6 INS NOVOLOG FLEXPEN SY 5X3ML PPN 1 BIKTARVY 50-200-25MG TB 30 CPLT 1 TRELEGY ELLIP IN200-62.5-25MCG 60 2 BIKTARVY TB50-200-25MG 30CPLT BPK - BIKTARVY TB50-200-25MG 30CPLT BPK - ELIQUIS TB 2.5MG 60 2 JARDIANCE TB 25MG 30 10 VRAYLAR CP 1.5MG 30 2 BIKTARVY 50-200-25MG TB 30 CPLT 6 TRULICITY SY 3MG/0.5ML 4 PPN 5 BIKTARVY TB50-200-25MG 30CPLT BPK 2 TRADJENTA TB 5MG 30 10 TRADJENTA TB 5MG 90 10 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 OZEMPIC SY 2MG 3ML PPN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 4 RYBELSUS TB 7MG 30UU 1/D 2 JANUVIA TB 50MG 30UU 1 ANORO ELLIPTA IN 62.5-25MCG 30INH 5 OZEMPIC SY 2MG 3ML PPN 5 WEGOVY SY 0.5MG/0.5ML 4X0.5ML PPN 2 OZEMPIC SY 2MG 3ML PPN 5 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 TRULICITY SY 0.75MG/0.5ML 4 PPN 5 TRULICITY SY 0.75MG/0.5ML 4 PPN 4 TRULICITY SY 3MG/0.5ML 4 PPN 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 3 JARDIANCE TB 10MG 30 1 ENTRESTO TB 49-51MG 60 1 TRULICITY SY 4.5MG/0.5ML 4 PPN 5 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 1 TRULICITY SY 1.5MG/0.5ML 4 PPN 3 FARXIGA TB 10MG 30 4 FARXIGA TB 5MG 30 1 TRELEGY ELLIP IN100-62.5-25MCG 60 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 5 TRULICITY SY 1.5MG/0.5ML 4 PPN 5 VRAYLAR CP 1.5MG 30 - OZEMPIC SY 2MG 3ML PPN 4 JANUMET TB 50-1000MG 60 1 XARELTO TB 15MG 30 2 ENTRESTO TB 97-103MG 60 1 BIKTARVY 50-200-25MG TB 30 CPLT 6 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 BREO ELLIPTA IN 100-25MCG 30INH 3 ANORO ELLIPTA IN 62.5-25MCG 30INH 2 BIKTARVY 50-200-25MG TB 30 CPLT 5 INS ASP FLXPN SY 100U/ML 5X3ML 5 TRELEGY ELLIP IN200-62.5-25MCG 60 4 ANORO ELLIPTA IN 62.5-25MCG 30INH 4 FARXIGA TB 10MG 30 6 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 WEGOVY SY 2.4MG/0.75ML 4X0.75ML 4 OZEMPIC SY 2MG 3ML PPN 2 TRELEGY ELLIP IN200-62.5-25MCG 60 2 ANORO ELLIPTA IN 62.5-25MCG 30INH 1 TRULICITY SY 0.75MG/0.5ML 4 PPN 3 FARXIGA TB 10MG 30 3 FARXIGA TB 5MG 30 3 RYBELSUS TB 3MG 30UU 1/D 2 BIKTARVY 50-200-25MG TB 30 CPLT 5 INS ASP FLXPN SY 100U/ML 5X3ML 5 OZEMPIC SY 1MG 3ML PPN 1 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 3 JARDIANCE TB 10MG 30 10 BIKTARVY 50-200-25MG TB 30 CPLT 1 WEGOVY SY 1.7MG/0.75ML 4X0.75ML 3 OZEMPIC SY0.25 OR 0.5MG 3ML PPN 2 BREO ELLIPTA IN 100-25MCG 30INH 3 Package Qty Units Sold Catalog Pric Catalog Total Invoice Pric Invoice Tota 2 (2) $ 464.16 $ (464.16) $ (1,358.60) $ 1,358.60 30 30 $ 2,877.43 $ 2,877.43 $ 1,910.72 $ 1,910.72 10 10 $ 34.43 $ 34.43 $ 34.51 $ 34.51 2 2 $ 464.16 $ 464.16 $ 600.31 $ 600.31 30 (30) $ 2,877.43 $ (2,877.43) $ (1,910.72) $ 1,910.72 60 60 $ 338.25 $ 338.25 $ 325.18 $ 325.18 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 3 12 $ 315.15 $ 1,260.60 $ 333.85 $ 1,335.40 30 30 $ 2,877.43 $ 2,877.43 $ 2,806.42 $ 2,806.42 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 300.12 $ 300.12 $ 1,004.67 $ 1,004.67 3 3 $ 300.12 $ 300.12 $ 311.84 $ 311.84 3 3 $ 290.94 $ 290.94 $ 291.98 $ 291.98 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 30 30 $ 229.44 $ 229.44 $ 242.13 $ 242.13 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 60 60 $ 348.48 $ 348.48 $ 335.02 $ 335.02 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 15 $ 63.97 $ 63.97 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 100 100 $ 1.00 $ 1.00 $ 0.95 $ 0.95 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 3 (3) $ 300.12 $ (300.12) $ (1,004.67) $ 1,004.67 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 60 60 $ 338.25 $ 338.25 $ 325.18 $ 325.18 3 3 $ 464.16 $ 464.16 $ 600.31 $ 600.31 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 219.22 $ 219.22 $ 232.70 $ 232.70 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 15 (30) $ 67.53 $ (135.06) $ (140.71) $ 281.42 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 15 30 $ 67.53 $ 135.06 $ 140.71 $ 281.42 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 30 $ 67.53 $ 135.06 $ 67.53 $ 135.06 30 30 $ 231.07 $ 231.07 $ 245.08 $ 245.08 15 60 $ 67.31 $ 269.24 $ 67.05 $ 268.20 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 30 30 $ 315.92 $ 315.92 $ 313.37 $ 313.37 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 30 30 $ 306.98 $ 306.98 $ 296.85 $ 296.85 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 - $ 67.53 $ - $ - $ - 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 60 60 $ 348.48 $ 348.48 $ 335.02 $ 335.02 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 15 - $ 67.53 $ - $ - $ - 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 30 30 $ 219.22 $ 219.22 $ 232.70 $ 232.70 15 15 $ 63.97 $ 63.97 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 60 60 $ 335.86 $ 335.86 $ 308.03 $ 308.03 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 30 30 $ 312.12 $ 312.12 $ 309.60 $ 309.60 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 2 2 $ 438.67 $ 438.67 $ 572.70 $ 572.70 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 30 $ 67.05 $ 134.10 $ 63.97 $ 127.94 60 60 $ 334.18 $ 334.18 $ 321.27 $ 321.27 30 90 $ 312.12 $ 936.36 $ 309.60 $ 928.80 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 60 60 $ 319.67 $ 319.67 $ 309.72 $ 309.72 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 60 60 $ 332.43 $ 332.43 $ 319.55 $ 319.55 30 30 $ 229.44 $ 229.44 $ 242.13 $ 242.13 15 - $ 67.53 $ - $ - $ - 60 60 $ 318.00 $ 318.00 $ 308.07 $ 308.07 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 15 - $ 67.53 $ - $ - $ - 3 3 $ 276.92 $ 276.92 $ 297.50 $ 297.50 15 - $ 67.53 $ - $ - $ - 60 60 $ 332.43 $ 332.43 $ 319.55 $ 319.55 60 60 $ 335.86 $ 335.86 $ 308.03 $ 308.03 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 (15) $ 67.31 $ (67.31) $ (140.25) $ 140.25 15 15 $ 67.31 $ 67.31 $ 140.25 $ 140.25 60 60 $ 329.34 $ 329.34 $ 317.35 $ 317.35 2 2 $ 464.16 $ 464.16 $ 604.58 $ 604.58 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 9 $ 290.94 $ 872.82 $ 301.36 $ 904.08 15 - $ - $ - 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 3 3 $ 300.12 $ 300.12 $ 314.06 $ 314.06 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 6 $ 301.46 $ 602.92 $ 321.08 $ 642.16 60 60 $ 332.43 $ 332.43 $ 319.55 $ 319.55 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 15 15 $ 63.97 $ 63.97 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 9 $ 290.94 $ 872.82 $ 301.36 $ 904.08 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 - $ - $ - 30 90 $ 312.20 $ 936.60 $ 309.89 $ 929.67 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 3 6 $ 301.46 $ 602.92 $ 321.08 $ 642.16 15 15 $ 63.82 $ 63.82 $ 63.97 $ 63.97 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 15 - $ 67.31 $ - $ - $ - 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 30 30 $ 877.55 $ 877.55 $ 870.49 $ 870.49 60 60 $ 348.48 $ 348.48 $ 335.02 $ 335.02 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 2,877.43 $ 2,877.43 $ 2,806.42 $ 2,806.42 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 30 30 $ 229.44 $ 229.44 $ 232.16 $ 232.16 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 30 30 $ 2,877.43 $ 2,877.43 $ 2,806.42 $ 2,806.42 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 15 30 $ 67.53 $ 135.06 $ 67.53 $ 135.06 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 15 15 $ 63.82 $ 63.82 $ 63.97 $ 63.97 15 - $ 67.53 $ - $ - $ - 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 30 $ 67.53 $ 135.06 $ 67.53 $ 135.06 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 60 60 $ 348.48 $ 348.48 $ 335.02 $ 335.02 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 3 9 $ 296.51 $ 889.53 $ 314.31 $ 942.93 2 2 $ 464.16 $ 464.16 $ 604.58 $ 604.58 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 218.38 $ 218.38 $ 232.16 $ 232.16 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 15 - $ - $ - 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 60 60 $ 319.67 $ 319.67 $ 308.03 $ 308.03 60 60 $ 318.00 $ 318.00 $ 306.39 $ 306.39 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 2 2 $ 438.67 $ 438.67 $ 572.70 $ 572.70 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 15 15 $ 63.97 $ 63.97 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 296.51 $ 296.51 $ 310.28 $ 310.28 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 438.67 $ 438.67 $ 572.70 $ 572.70 3 12 $ 290.94 $ 1,163.76 $ 297.50 $ 1,190.00 15 15 $ 67.05 $ 67.05 $ 63.97 $ 63.97 60 60 $ 335.86 $ 335.86 $ 308.03 $ 308.03 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 60 60 $ 319.67 $ 319.67 $ 309.72 $ 309.72 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 15 - $ 67.53 $ - $ - $ - 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 60 60 $ 319.67 $ 319.67 $ 308.03 $ 308.03 30 30 $ 218.38 $ 218.38 $ 230.02 $ 230.02 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 60 - $ 335.86 $ - $ - $ - 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 60 60 $ 329.34 $ 329.34 $ 317.35 $ 317.35 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 276.92 $ 276.92 $ 297.50 $ 297.50 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 6 $ 315.15 $ 630.30 $ 334.88 $ 669.76 60 - $ 335.86 $ - $ - $ - 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 15 15 $ 63.97 $ 63.97 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 30 $ 63.97 $ 127.94 3 3 $ 296.51 $ 296.51 $ 310.28 $ 310.28 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 30 30 $ 230.32 $ 230.32 $ 242.70 $ 242.70 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 2 2 $ 464.16 $ 464.16 $ 604.58 $ 604.58 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 9 $ 276.92 $ 830.76 $ 297.50 $ 892.50 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 3 3 $ 296.51 $ 296.51 $ 310.28 $ 310.28 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 15 - $ 67.31 $ - $ - $ - 3 3 $ 276.92 $ 276.92 $ 297.50 $ 297.50 15 - $ - $ - 2 2 $ 464.16 $ 464.16 $ 600.31 $ 600.31 15 30 $ 67.53 $ 135.06 $ 67.05 $ 134.10 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 332.43 $ 332.43 $ 321.31 $ 321.31 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 12 $ 315.15 $ 1,260.60 $ 334.88 $ 1,339.52 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 296.51 $ 296.51 $ 314.31 $ 314.31 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 276.92 $ 276.92 $ 297.50 $ 297.50 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 15 - $ 67.53 $ - $ - $ - 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 30 30 $ 219.22 $ 219.22 $ 232.70 $ 232.70 2 2 $ 458.58 $ 458.58 $ 597.31 $ 597.31 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 10 40 $ 34.43 $ 137.72 $ 34.51 $ 138.04 30 30 $ 218.38 $ 218.38 $ 232.16 $ 232.16 15 - $ - $ - 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 15 - $ - $ - 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 30 30 $ 231.96 $ 231.96 $ 245.66 $ 245.66 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 30 30 $ 315.92 $ 315.92 $ 311.16 $ 311.16 30 30 $ 231.96 $ 231.96 $ 245.66 $ 245.66 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 60 60 $ 332.43 $ 332.43 $ 319.55 $ 319.55 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 296.51 $ 296.51 $ 310.28 $ 310.28 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 15 - $ - $ - 3 3 $ 438.67 $ 438.67 $ 572.70 $ 572.70 10 40 $ 34.43 $ 137.72 $ 34.51 $ 138.04 15 - $ 67.31 $ - $ - $ - 30 90 $ 312.20 $ 936.60 $ 313.57 $ 940.71 30 90 $ 230.32 $ 690.96 $ 241.23 $ 723.69 3 3 $ 464.16 $ 464.16 $ 604.58 $ 604.58 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 15 - $ 67.31 $ - $ - $ - 15 - $ - $ - 3 3 $ 464.16 $ 464.16 $ 600.31 $ 600.31 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 296.51 $ 296.51 $ 314.31 $ 314.31 15 30 $ 67.31 $ 134.62 $ 67.31 $ 134.62 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 2 2 $ 464.16 $ 464.16 $ 600.31 $ 600.31 15 30 $ 67.53 $ 135.06 $ 67.53 $ 135.06 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 9 $ 290.94 $ 872.82 $ 301.36 $ 904.08 30 30 $ 229.44 $ 229.44 $ 230.02 $ 230.02 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 30 30 $ 877.55 $ 877.55 $ 870.49 $ 870.49 3 3 $ 318.98 $ 318.98 $ 336.56 $ 336.56 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 15 - $ 67.31 $ - $ - $ - 3 3 $ 301.46 $ 301.46 $ 318.82 $ 318.82 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 2,877.43 $ 2,877.43 $ 2,819.88 $ 2,819.88 3 3 $ 316.73 $ 316.73 $ 951.69 $ 951.69 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 60 60 $ 338.25 $ 338.25 $ 326.96 $ 326.96 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 15 15 $ 63.97 $ 63.97 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 3 3 $ 276.92 $ 276.92 $ 297.50 $ 297.50 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 15 15 $ 63.97 $ 63.97 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 438.67 $ 438.67 $ 572.70 $ 572.70 15 - $ - $ - 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 3 9 $ 315.15 $ 945.45 $ 332.52 $ 997.56 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 - $ - $ - 3 12 $ 315.15 $ 1,260.60 $ 334.88 $ 1,339.52 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 3 9 $ 318.98 $ 956.94 $ 338.95 $ 1,016.85 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 329.34 $ 329.34 $ 319.07 $ 319.07 15 - $ - $ - 30 30 $ 218.38 $ 218.38 $ 230.02 $ 230.02 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 60 60 $ 338.25 $ 338.25 $ 325.18 $ 325.18 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 30 90 $ 315.92 $ 947.76 $ 316.95 $ 950.85 30 30 $ 231.96 $ 231.96 $ 244.17 $ 244.17 3 3 $ 301.46 $ 301.46 $ 320.10 $ 320.10 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 30 30 $ 218.38 $ 218.38 $ 213.46 $ 213.46 15 - $ 67.53 $ - $ - $ - 15 - $ 67.53 $ - $ - $ - 15 15 $ 63.97 $ 63.97 3 (3) $ 316.73 $ (316.73) $ (951.69) $ 951.69 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 3 18 $ 290.94 $ 1,745.64 $ 301.36 $ 1,808.16 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 2 2 $ 458.58 $ 458.58 $ 597.31 $ 597.31 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 6 $ 318.98 $ 637.96 $ 336.56 $ 673.12 15 - $ 67.53 $ - $ - $ - 60 60 $ 318.00 $ 318.00 $ 308.07 $ 308.07 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 60 60 $ 318.00 $ 318.00 $ 306.39 $ 306.39 2 2 $ 438.67 $ 438.67 $ 572.70 $ 572.70 30 30 $ 218.38 $ 218.38 $ 232.16 $ 232.16 15 15 $ 66.71 $ 66.71 $ 139.01 $ 139.01 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 15 - $ 67.53 $ - $ - $ - 15 - $ 67.31 $ - $ - $ - 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 9 $ 290.94 $ 872.82 $ 297.50 $ 892.50 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 3 3 $ 296.51 $ 296.51 $ 314.31 $ 314.31 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 60 60 $ 332.43 $ 332.43 $ 321.31 $ 321.31 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 60 120 $ 14.47 $ 28.94 $ 10.76 $ 21.52 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 60 60 $ 334.18 $ 334.18 $ 321.27 $ 321.27 15 - $ 67.53 $ - $ - $ - 3 9 $ 296.51 $ 889.53 $ 314.31 $ 942.93 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 60 60 $ 329.34 $ 329.34 $ 319.07 $ 319.07 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 6 $ 316.73 $ 633.46 $ 321.08 $ 642.16 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 10 50 $ 35.99 $ 179.95 $ 35.99 $ 179.95 3 6 $ 315.15 $ 630.30 $ 334.88 $ 669.76 15 60 $ 66.71 $ 266.84 $ 66.71 $ 266.84 3 3 $ 296.51 $ 296.51 $ 314.31 $ 314.31 3 3 $ 464.16 $ 464.16 $ 600.31 $ 600.31 60 60 $ 14.47 $ 14.47 $ 10.19 $ 10.19 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 6 $ 301.46 $ 602.92 $ 321.08 $ 642.16 15 15 $ 63.82 $ 63.82 $ 63.97 $ 63.97 15 - $ - $ - 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 30 30 $ 306.98 $ 306.98 $ 300.23 $ 300.23 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 335.86 $ 335.86 $ 309.72 $ 309.72 15 - $ 67.31 $ - $ - $ - 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 60 60 $ 338.25 $ 338.25 $ 326.96 $ 326.96 3 3 $ 290.94 $ 290.94 $ 269.34 $ 269.34 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 3 9 $ 296.51 $ 889.53 $ 314.31 $ 942.93 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 297.50 $ 297.50 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 464.16 $ 464.16 $ 600.31 $ 600.31 15 - $ 67.31 $ - $ - $ - 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 2 2 $ 458.58 $ 458.58 $ 597.31 $ 597.31 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 60 60 $ 335.86 $ 335.86 $ 309.72 $ 309.72 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 60 60 $ 329.34 $ 329.34 $ 315.24 $ 315.24 60 60 $ 14.47 $ 14.47 $ 9.58 $ 9.58 3 3 $ 301.46 $ 301.46 $ 302.16 $ 302.16 15 - $ 67.53 $ - $ - $ - 15 15 $ 63.82 $ 63.82 $ 63.97 $ 63.97 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 30 90 $ 230.32 $ 690.96 $ 241.23 $ 723.69 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 60 60 $ 348.48 $ 348.48 $ 336.83 $ 336.83 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 3 6 $ 316.73 $ 633.46 $ 318.82 $ 637.64 3 3 $ 316.73 $ 316.73 $ 301.02 $ 301.02 3 3 $ 438.67 $ 438.67 $ 572.70 $ 572.70 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 2,877.43 $ 2,877.43 $ 2,819.88 $ 2,819.88 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 3 9 $ 315.15 $ 945.45 $ 992.59 $ 2,977.77 15 60 $ 66.71 $ 266.84 $ 139.01 $ 556.04 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 3 $ 316.73 $ 316.73 $ 301.02 $ 301.02 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 3 3 $ 301.46 $ 301.46 $ 321.08 $ 321.08 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 60 60 $ 335.86 $ 335.86 $ 309.72 $ 309.72 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 30 30 $ 307.18 $ 307.18 $ 275.16 $ 275.16 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 3 6 $ 290.94 $ 581.88 $ 297.50 $ 595.00 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 15 15 $ 67.05 $ 67.05 $ 63.97 $ 63.97 3 3 $ 296.51 $ 296.51 $ 284.75 $ 284.75 30 30 $ 229.44 $ 229.44 $ 232.16 $ 232.16 3 3 $ 315.15 $ 315.15 $ 334.88 $ 334.88 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 300.12 $ 300.12 $ 291.79 $ 291.79 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 3 3 $ 301.46 $ 301.46 $ 318.82 $ 318.82 10 40 $ 34.43 $ 137.72 $ 34.51 $ 138.04 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 3 12 $ 296.51 $ 1,186.04 $ 314.31 $ 1,257.24 60 60 $ 335.86 $ 335.86 $ 305.86 $ 305.86 3 9 $ 316.73 $ 950.19 $ 318.82 $ 956.46 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 15 15 $ 63.97 $ 63.97 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 2 2 $ 458.58 $ 458.58 $ 597.31 $ 597.31 30 90 $ 230.32 $ 690.96 $ 241.23 $ 723.69 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 3 3 $ 301.46 $ 301.46 $ 318.82 $ 318.82 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 301.46 $ 301.46 $ 318.82 $ 318.82 30 30 $ 315.92 $ 315.92 $ 287.94 $ 287.94 15 30 $ 67.53 $ 135.06 $ 68.37 $ 136.74 100 100 $ 0.95 $ 0.95 $ 0.95 $ 0.95 60 60 $ 335.86 $ 335.86 $ 305.86 $ 305.86 30 30 $ 307.18 $ 307.18 $ 275.16 $ 275.16 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 9 $ 296.51 $ 889.53 $ 992.59 $ 2,977.77 3 9 $ 290.94 $ 872.82 $ 273.02 $ 819.06 3 9 $ 315.15 $ 945.45 $ 992.59 $ 2,977.77 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 45 $ 67.31 $ 201.93 $ 67.31 $ 201.93 15 15 $ 67.31 $ 67.31 $ 67.31 $ 67.31 3 3 $ 438.67 $ 438.67 $ 553.40 $ 553.40 3 9 $ 315.15 $ 945.45 $ 334.88 $ 1,004.64 60 60 $ 335.86 $ 335.86 $ 305.86 $ 305.86 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 2 2 $ 464.16 $ 464.16 $ 591.45 $ 591.45 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 60 60 $ 318.00 $ 318.00 $ 304.36 $ 304.36 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 6 $ 290.94 $ 581.88 $ 301.36 $ 602.72 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 3 3 $ 315.15 $ 315.15 $ 992.59 $ 992.59 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 15 - $ - $ - 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 60 60 $ 318.00 $ 318.00 $ 304.36 $ 304.36 3 3 $ 316.73 $ 316.73 $ 301.02 $ 301.02 30 30 $ 306.98 $ 306.98 $ 274.69 $ 274.69 3 9 $ 316.73 $ 950.19 $ 302.16 $ 906.48 2 2 $ 460.88 $ 460.88 $ 521.22 $ 521.22 3 9 $ 290.94 $ 872.82 $ 269.34 $ 808.02 15 30 $ 67.05 $ 134.10 $ 63.97 $ 127.94 3 3 $ 296.51 $ 296.51 $ 314.31 $ 314.31 15 15 $ 67.31 $ 67.31 $ 68.15 $ 68.15 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 30 30 $ 219.22 $ 219.22 $ 231.29 $ 231.29 60 60 $ 332.43 $ 332.43 $ 317.44 $ 317.44 3 9 $ 296.51 $ 889.53 $ 284.75 $ 854.25 10 50 $ 35.99 $ 179.95 $ 35.99 $ 179.95 30 30 $ 219.22 $ 219.22 $ 218.04 $ 218.04 15 - $ 67.53 $ - $ - $ - 3 3 $ 301.46 $ 301.46 $ 302.16 $ 302.16 3 3 $ 301.46 $ 301.46 $ 297.13 $ 297.13 3 3 $ 276.92 $ 276.92 $ 269.34 $ 269.34 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 2 2 $ 458.58 $ 458.58 $ 1,342.27 $ 1,342.27 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 6 $ 290.94 $ 581.88 $ 269.34 $ 538.68 3 3 $ 301.46 $ 301.46 $ 301.02 $ 301.02 60 180 $ 338.25 $ 1,014.75 $ 322.89 $ 968.67 60 120 $ 348.48 $ 696.96 $ 332.79 $ 665.58 3 3 $ 464.16 $ 464.16 $ 584.20 $ 584.20 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 30 90 $ 2,877.43 $ 8,632.29 $ 2,766.99 $ 8,300.97 3 6 $ 290.94 $ 581.88 $ 269.34 $ 538.68 3 3 $ 315.15 $ 315.15 $ 992.59 $ 992.59 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 100 100 $ 0.95 $ 0.95 $ 0.95 $ 0.95 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 3 3 $ 301.46 $ 301.46 $ 318.82 $ 318.82 60 180 $ 332.43 $ 997.29 $ 317.44 $ 952.32 3 6 $ 276.92 $ 553.84 $ 273.02 $ 546.04 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 3 3 $ 296.51 $ 296.51 $ 284.75 $ 284.75 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 318.98 $ 318.98 $ 321.72 $ 321.72 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 15 15 $ 63.97 $ 63.97 30 90 $ 230.32 $ 690.96 $ 227.41 $ 682.23 3 3 $ 438.67 $ 438.67 $ 553.40 $ 553.40 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 15 15 $ 63.97 $ 63.97 3 3 $ 316.73 $ 316.73 $ 321.08 $ 321.08 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 60 60 $ 335.86 $ 335.86 $ 305.86 $ 305.86 3 3 $ 438.67 $ 438.67 $ 520.13 $ 520.13 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 15 15 $ 67.31 $ 67.31 $ 68.15 $ 68.15 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 3 15 $ 318.98 $ 1,594.90 $ 317.77 $ 1,588.85 3 9 $ 300.12 $ 900.36 $ 288.22 $ 864.66 30 90 $ 230.32 $ 690.96 $ 227.41 $ 682.23 3 6 $ 276.92 $ 553.84 $ 301.36 $ 602.72 15 15 $ 63.97 $ 63.97 60 - $ 14.47 $ - $ - $ - 3 3 $ 301.46 $ 301.46 $ 296.51 $ 296.51 3 3 $ 316.73 $ 316.73 $ 302.16 $ 302.16 30 30 $ 219.22 $ 219.22 $ 218.04 $ 218.04 3 6 $ 290.94 $ 581.88 $ 269.34 $ 538.68 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 15 15 $ 67.53 $ 67.53 $ 68.37 $ 68.37 3 3 $ 296.51 $ 296.51 $ 284.75 $ 284.75 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 15 30 $ 63.97 $ 127.94 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 3 3 $ 290.94 $ 290.94 $ 281.77 $ 281.77 60 60 $ 335.86 $ 335.86 $ 305.86 $ 305.86 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 2 2 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 15 15 $ 67.31 $ 67.31 $ 68.15 $ 68.15 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 460.88 $ 460.88 $ 572.70 $ 572.70 3 3 $ 296.51 $ 296.51 $ 284.75 $ 284.75 15 15 $ 63.97 $ 63.97 15 15 $ 67.53 $ 67.53 $ 68.37 $ 68.37 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 315.15 $ 315.15 $ 332.52 $ 332.52 3 6 $ 316.73 $ 633.46 $ 318.82 $ 637.64 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 3 $ 290.94 $ 290.94 $ 269.34 $ 269.34 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 15 15 $ 63.97 $ 63.97 3 3 $ 315.15 $ 315.15 $ 315.15 $ 315.15 3 3 $ 300.12 $ 300.12 $ 284.34 $ 284.34 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 3 3 $ 438.67 $ 438.67 $ 553.40 $ 553.40 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 3 3 $ 438.67 $ 438.67 $ 521.22 $ 521.22 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 60 60 $ 14.47 $ 14.47 $ 10.76 $ 10.76 60 60 $ 329.34 $ 329.34 $ 319.07 $ 319.07 3 3 $ 276.92 $ 276.92 $ 301.36 $ 301.36 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 30 30 $ 218.38 $ 218.38 $ 230.02 $ 230.02 3 3 $ 316.73 $ 316.73 $ 302.16 $ 302.16 3 3 $ 460.88 $ 460.88 $ 521.22 $ 521.22 3 6 $ 290.94 $ 581.88 $ 269.34 $ 538.68 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 3 3 $ 276.92 $ 276.92 $ 268.78 $ 268.78 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 3 3 $ 316.73 $ 316.73 $ 302.16 $ 302.16 60 60 $ 318.00 $ 318.00 $ 304.36 $ 304.36 30 30 $ 307.18 $ 307.18 $ 285.23 $ 285.23 3 6 $ 290.94 $ 581.88 $ 269.34 $ 538.68 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 2 2 $ 460.88 $ 460.88 $ 521.22 $ 521.22 3 3 $ 290.94 $ 290.94 $ 269.34 $ 269.34 60 60 $ 14.47 $ 14.47 $ 9.58 $ 9.58 3 3 $ 301.46 $ 301.46 $ 310.84 $ 310.84 3 3 $ 276.92 $ 276.92 $ 281.77 $ 281.77 15 15 $ 66.92 $ 66.92 3 3 $ 290.94 $ 290.94 $ 269.34 $ 269.34 10 60 $ 35.99 $ 215.94 $ 35.99 $ 215.94 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 15 15 $ 63.97 $ 63.97 3 3 $ 276.92 $ 276.92 $ 281.77 $ 281.77 3 3 $ 290.94 $ 290.94 $ 301.36 $ 301.36 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 6 $ 296.51 $ 593.02 $ 280.92 $ 561.84 3 3 $ 276.92 $ 276.92 $ 269.34 $ 269.34 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 2 2 $ 464.16 $ 464.16 $ 580.08 $ 580.08 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 3 3 $ 301.46 $ 301.46 $ 301.02 $ 301.02 3 3 $ 276.92 $ 276.92 $ 273.02 $ 273.02 3 3 $ 301.46 $ 301.46 $ 310.84 $ 310.84 3 3 $ 276.92 $ 276.92 $ 281.77 $ 281.77 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 3 3 $ 316.73 $ 316.73 $ 318.82 $ 318.82 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 15 15 $ 66.92 $ 66.92 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 3 3 $ 300.12 $ 300.12 $ 291.79 $ 291.79 3 3 $ 316.73 $ 316.73 $ 301.02 $ 301.02 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 15 15 $ 66.92 $ 66.92 3 3 $ 301.46 $ 301.46 $ 302.16 $ 302.16 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 60 60 $ 318.00 $ 318.00 $ 325.55 $ 325.55 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 30 $ 231.96 $ 231.96 $ 233.03 $ 233.03 3 6 $ 276.92 $ 553.84 $ 281.77 $ 563.54 30 30 $ 2,877.43 $ 2,877.43 $ 2,817.24 $ 2,817.24 3 3 $ 315.15 $ 315.15 $ 315.15 $ 315.15 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 30 30 $ 2,877.43 $ 2,877.43 $ 2,817.24 $ 2,817.24 3 9 $ 290.94 $ 872.82 $ 269.34 $ 808.02 3 3 $ 276.92 $ 276.92 $ 268.78 $ 268.78 30 30 $ 885.32 $ 885.32 $ 1,543.64 $ 1,543.64 3 3 $ 460.88 $ 460.88 $ 553.40 $ 553.40 3 6 $ 290.94 $ 581.88 $ 273.02 $ 546.04 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 30 30 $ 0.30 $ 0.30 $ 0.29 $ 0.29 3 3 $ 315.15 $ 315.15 $ 315.15 $ 315.15 3 3 $ 290.94 $ 290.94 $ 269.34 $ 269.34 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 15 15 $ 66.92 $ 66.92 3 3 $ 316.73 $ 316.73 $ 310.84 $ 310.84 30 30 $ 885.31 $ 885.31 $ 816.23 $ 816.23 60 - $ 14.47 $ - $ - $ - 60 - $ 14.47 $ - $ - $ - 60 60 $ 14.47 $ 14.47 $ 9.58 $ 9.58 60 60 $ 329.34 $ 329.34 $ 322.38 $ 322.38 3 3 $ 276.92 $ 276.92 $ 269.34 $ 269.34 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 30 30 $ 218.38 $ 218.38 $ 221.39 $ 221.39 3 3 $ 300.12 $ 300.12 $ 287.87 $ 287.87 60 60 $ 14.47 $ 14.47 $ 10.02 $ 10.02 60 60 $ 329.34 $ 329.34 $ 337.24 $ 337.24 30 30 $ 218.38 $ 218.38 $ 231.61 $ 231.61 3 3 $ 296.51 $ 296.51 $ 280.92 $ 280.92 60 - $ 14.47 $ - $ - $ - 30 30 $ 219.22 $ 219.22 $ 224.27 $ 224.27 3 3 $ 438.67 $ 438.67 $ 545.26 $ 545.26 3 3 $ 276.92 $ 276.92 $ 268.78 $ 268.78 3 3 $ 318.98 $ 318.98 $ 340.74 $ 340.74 3 3 $ 301.46 $ 301.46 $ 316.10 $ 316.10 3 3 $ 301.46 $ 301.46 $ 310.84 $ 310.84 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 60 - $ 14.47 $ - $ - $ - 15 15 $ 63.83 $ 63.83 60 60 $ 14.47 $ 14.47 $ 10.02 $ 10.02 3 3 $ 276.92 $ 276.92 $ 281.77 $ 281.77 15 15 $ 67.53 $ 67.53 $ 67.53 $ 67.53 10 40 $ 34.43 $ 137.72 $ 36.10 $ 144.40 3 3 $ 290.94 $ 290.94 $ 281.77 $ 281.77 3 3 $ 300.12 $ 300.12 $ 287.87 $ 287.87 30 30 $ 2,877.43 $ 2,877.43 $ 2,817.24 $ 2,817.24 30 30 $ 0.29 $ 0.29 $ 0.30 $ 0.30 3 3 $ 460.88 $ 460.88 $ 545.26 $ 545.26 30 30 $ 307.18 $ 307.18 $ 298.38 $ 298.38 30 30 $ 0.29 $ 0.29 $ 0.29 $ 0.29 3 3 $ 460.88 $ 460.88 $ 545.26 $ 545.26 30 30 $ 219.22 $ 219.22 $ 224.74 $ 224.74 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 60 60 $ 14.47 $ 14.47 $ 10.02 $ 10.02 30 30 $ 307.18 $ 307.18 $ 298.38 $ 298.38 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 30 90 $ 312.20 $ 936.60 $ 287.10 $ 861.30 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 60 60 $ 14.47 $ 14.47 $ 5.82 $ 5.82 60 60 $ 329.34 $ 329.34 $ 315.24 $ 315.24 3 3 $ 300.12 $ 300.12 $ 284.34 $ 284.34 3 3 $ 290.94 $ 290.94 $ 281.77 $ 281.77 3 3 $ 316.73 $ 316.73 $ 310.84 $ 310.84 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 3 3 $ 290.94 $ 290.94 $ 273.02 $ 273.02 60 - $ 14.47 $ - $ - $ - 60 60 $ 329.34 $ 329.34 $ 321.70 $ 321.70 30 30 $ 218.38 $ 218.38 $ 220.93 $ 220.93 60 - $ 14.47 $ - $ - $ - 3 3 $ 276.92 $ 276.92 $ 268.78 $ 268.78 60 60 $ 14.47 $ 14.47 $ 10.02 $ 10.02 3 3 $ 301.46 $ 301.46 $ 310.84 $ 310.84 15 45 $ 67.31 $ 201.93 $ 67.05 $ 201.15 3 3 $ 318.98 $ 318.98 $ 321.72 $ 321.72 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 6 $ 318.98 $ 637.96 $ 340.74 $ 681.48 60 - $ 14.47 $ - $ - $ - 3 3 $ 300.12 $ 300.12 $ 282.33 $ 282.33 3 3 $ 301.46 $ 301.46 $ 296.51 $ 296.51 3 3 $ 301.46 $ 301.46 $ 297.13 $ 297.13 3 3 $ 276.92 $ 276.92 $ 269.34 $ 269.34 60 - $ 14.47 $ - $ - $ - 3 9 $ 296.51 $ 889.53 $ 284.75 $ 854.25 60 60 $ 0.57 $ 0.57 $ 0.57 $ 0.57 3 3 $ 460.88 $ 460.88 $ 545.26 $ 545.26 3 3 $ 290.94 $ 290.94 $ 281.77 $ 281.77 30 30 $ 0.30 $ 0.30 $ 0.30 $ 0.30 60 180 $ 347.83 $ 1,043.50 $ 345.96 $ 1,037.88 60 180 $ 347.83 $ 1,043.50 $ 345.96 $ 1,037.88 3 3 $ 316.73 $ 316.73 $ 316.10 $ 316.10 3 3 $ 316.73 $ 316.73 $ 310.84 $ 310.84 3 3 $ 290.94 $ 290.94 $ 281.77 $ 281.77 60 180 $ 347.83 $ 1,043.50 $ 347.83 $ 1,043.49 15 45 $ 69.73 $ 209.19 $ 69.73 $ 209.19 15 45 $ 69.73 $ 209.19 $ 69.73 $ 209.19 15 45 $ 69.73 $ 209.19 $ 69.73 $ 209.19 2 2 $ 458.58 $ 458.58 $ 577.18 $ 577.18 2 (2) $ 458.58 $ (458.58) $ (1,342.27) $ 1,342.27 3 (3) $ 315.15 $ (315.15) $ (992.59) $ 992.59 3 (9) $ 315.15 $ (945.45) $ (992.59) $ 2,977.77 3 (9) $ 315.15 $ (945.45) $ (992.59) $ 2,977.77 3 9 $ 315.15 $ 945.45 $ 313.95 $ 941.85 3 9 $ 315.15 $ 945.45 $ 313.95 $ 941.85 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 3 $ 315.15 $ 315.15 $ 313.95 $ 313.95 3 (3) $ 315.15 $ (315.15) $ (992.59) $ 992.59 3 3 $ 350.36 $ 350.36 $ 350.02 $ 350.02 3 3 $ 350.36 $ 350.36 $ 350.36 $ 350.36 3 3 $ 350.36 $ 350.36 $ 350.02 $ 350.02 3 3 $ 350.36 $ 350.36 $ 350.36 $ 350.36 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 15 15 $ 66.71 $ 66.71 $ 66.71 $ 66.71 15 60 $ 66.71 $ 266.84 $ 66.71 $ 266.84 15 (15) $ 66.71 $ (66.71) $ (139.01) $ 139.01 15 (60) $ 66.71 $ (266.84) $ (139.01) $ 556.04 30 30 $ 0.31 $ 0.31 $ 0.31 $ 0.31 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 30 90 $ 0.31 $ 0.93 $ 0.31 $ 0.93 3 3 $ 350.36 $ 350.36 $ 350.36 $ 350.36 3 3 $ 350.02 $ 350.02 $ 350.02 $ 350.02 3 3 $ 350.36 $ 350.36 $ 350.36 $ 350.36 3 3 $ 350.02 $ 350.02 $ 350.02 $ 350.02 3 3 $ 350.02 $ 350.02 $ 350.02 $ 350.02 3 (9) $ 296.51 $ (889.53) $ (992.59) $ 2,977.77 3 9 $ 296.51 $ 889.53 $ 284.75 $ 854.25 3 3 $ 328.84 $ 328.84 $ 328.84 $ 328.84 Distributor Reported WAC Price Account Sold In Transaction Type Sale Type $ 1,349.02 CR 340B $ 4,216.10 DI 340B $ 72.34 DR 340B $ 1,349.02 PR 340B $ 4,216.10 CR 340B $ 726.37 DI 340B $ 611.82 DI 340B $ 1,027.51 DI 340B $ 4,216.10 PR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 PR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 378.46 DI 340B $ 1,027.51 DI 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 2,039.38 DR 340B $ 1,027.51 DR 340B $ 282.48 DI 340B $ 1,027.51 CR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 726.37 DI 340B $ 1,349.02 DI 340B $ 611.82 DI 340B $ 378.46 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 CR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 PR 340B $ 378.46 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 378.46 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 726.37 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 611.82 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 726.37 DI 340B $ 378.46 DI 340B $ 139.71 DI 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 726.37 DI 340B $ 726.37 DR 340B $ 139.71 PR 340B $ 1,027.51 DR 340B $ 139.71 CR 340B $ 139.71 DI 340B $ 726.37 DR 340B $ 1,349.02 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,594.82 DI 340B $ 726.37 DI 340B $ 611.82 DI 340B $ 4,216.10 DI 340B $ 1,027.51 DR 340B $ 378.46 DR 340B $ 611.82 DI 340B $ 1,027.51 DR 340B $ 4,216.10 DI 340B $ 611.82 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 139.71 DR 340B $ 139.71 DI 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 726.37 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,349.02 DI 340B $ 611.82 DI 340B $ 378.46 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 611.82 DI 340B $ 726.37 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 611.82 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 726.37 DR 340B $ 378.46 DR 340B $ 611.82 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DI 340B $ 378.46 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DI 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,349.02 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 378.46 DR 340B $ 1,349.02 DI 340B $ 345.59 DR 340B $ 72.34 DR 340B $ 378.46 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 378.46 DI 340B $ 345.59 DR 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 378.46 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 726.37 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 611.82 DR 340B $ 139.71 DR 340B $ 1,349.02 DR 340B $ 72.34 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 378.46 DI 340B $ 1,349.02 DI 340B $ 611.82 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 139.71 DR 340B $ 1,349.02 DI 340B $ 611.82 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,349.02 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 378.46 DR 340B $ 1,027.51 DI 340B $ 1,594.82 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DI 340B $ 4,216.10 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 345.59 DR 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 139.71 DR 340B $ 378.46 DR 340B $ 611.82 DR 340B $ 726.37 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 378.46 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 378.46 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DR 340B $ 1,027.51 CR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,349.02 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,349.02 DR 340B $ 378.46 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 611.82 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 345.59 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 726.37 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 72.34 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,349.02 DI 340B $ 345.59 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,349.02 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 1,349.02 DI 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 378.46 DI 340B $ 139.71 DI 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 611.82 DI 340B $ 4,216.10 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 726.37 DR 340B $ 611.82 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 378.46 DR 340B $ 1,027.51 DI 340B $ 611.82 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 72.34 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 139.71 DI 340B $ 1,349.02 DI 340B $ 378.46 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 2,039.38 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,349.02 DR 340B $ 1,027.51 DI 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DI 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 378.46 DR 340B $ 726.37 DI 340B $ 1,027.51 DI 340B $ 72.34 DI 340B $ 378.46 DR 340B $ 139.71 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 726.37 DI 340B $ 1,349.02 DI 340B $ 1,027.51 DI 340B $ 611.82 DI 340B $ 4,216.10 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 2,039.38 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 378.46 DI 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 378.46 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 378.46 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 611.82 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 611.82 DR 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 345.59 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,349.02 DR 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 378.46 DR 340B $ 1,027.51 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 72.34 DI 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,349.02 DI 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 726.37 DR 340B $ 611.82 DI 340B $ 378.46 DI 340B $ 1,027.51 DR 340B $ 4,216.10 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 4,216.10 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,594.82 DI 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 139.71 DR 340B $ 1,027.51 DR 340B $ 1,594.82 DI 340B $ 345.59 DR 340B $ 345.59 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 378.46 DR 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 378.46 DR 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 378.46 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 139.71 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 72.34 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 4,216.10 DI 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 378.46 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 611.82 DR 340B $ 611.82 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 726.37 DR 340B $ 378.46 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DR 340B $ 139.71 DI 340B $ 1,027.51 DI 340B $ 282.48 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 345.59 DR 340B $ 1,027.51 DI 340B $ 611.82 DR 340B $ 1,349.02 DR 340B $ 1,027.51 DR 340B $ 282.48 DR 340B $ 726.37 DI 340B $ 726.37 DI 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 1,027.51 DR 340B $ 726.37 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 1,349.02 DI 340B $ 1,349.02 CR 340B $ 1,027.51 CR 340B $ 1,027.51 CR 340B $ 1,027.51 CR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 CR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 611.82 DI 340B $ 139.71 DI 340B $ 139.71 DI 340B $ 139.71 CR 340B $ 139.71 CR 340B $ 611.82 DI 340B $ 611.82 DI 340B $ 282.48 DI 340B $ 282.48 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B $ 1,027.51 CR 340B $ 1,027.51 DI 340B $ 1,027.51 DI 340B PHS Price At Time of Order (340B Account $ 600.31 $ 1,910.72 $ 34.51 $ 600.31 $ 1,910.72 $ 325.18 $ 0.31 $ 333.85 $ 1,910.72 $ 66.71 $ 321.08 $ 311.84 $ 311.84 $ 291.98 $ 334.88 $ 66.71 $ 242.13 $ 334.88 $ 335.02 $ 321.08 $ 321.08 $ 297.50 $ 63.97 $ 297.50 $ 0.95 $ 321.08 $ 0.31 $ 311.84 $ 297.50 $ 334.88 $ 325.18 $ 600.31 $ 0.31 $ 232.70 $ 321.08 $ 321.08 $ 67.53 $ 321.08 $ 67.53 $ 297.50 $ 336.56 $ 297.50 $ 67.53 $ 245.08 $ 67.05 $ 67.53 $ 67.31 $ 313.37 $ 10.19 $ 0.57 $ 296.85 $ 297.50 $ - $ 336.56 $ 321.08 $ 335.02 $ 321.08 $ 334.88 $ 321.08 $ - $ 66.71 $ 334.88 $ 232.70 $ 63.97 $ 297.50 $ 308.03 $ 321.08 $ 297.50 $ 336.56 $ 309.60 $ 334.88 $ 66.71 $ 572.70 $ 321.08 $ 297.50 $ 63.97 $ 321.27 $ 309.60 $ 321.08 $ 297.50 $ 309.72 $ 0.29 $ 334.88 $ 66.71 $ 319.55 $ 242.13 $ - $ 308.07 $ 321.08 $ - $ 297.50 $ - $ 319.55 $ 308.03 $ 67.31 $ 297.50 $ 67.31 $ 67.31 $ 317.35 $ 604.58 $ 67.53 $ 334.88 $ 321.08 $ 572.70 $ 301.36 $ - $ 297.50 $ 0.29 $ 314.06 $ 336.56 $ 297.50 $ 10.19 $ 334.88 $ 321.08 $ 319.55 $ 336.56 $ 63.97 $ 334.88 $ 321.08 $ 301.36 $ 321.08 $ 297.50 $ 334.88 $ - $ 309.89 $ 10.19 $ 321.08 $ 63.97 $ 321.08 $ 321.08 $ 572.70 $ 334.88 $ 297.50 $ - $ 297.50 $ 334.88 $ 870.49 $ 335.02 $ 0.31 $ 2,806.42 $ 321.08 $ 232.16 $ 0.31 $ 297.50 $ 2,806.42 $ 0.29 $ 67.53 $ 334.88 $ 67.31 $ 336.56 $ 301.36 $ 10.76 $ 63.97 $ - $ 572.70 $ 321.08 $ 297.50 $ 321.08 $ 572.70 $ 66.71 $ 66.71 $ 67.53 $ 334.88 $ 66.71 $ 321.08 $ 572.70 $ 335.02 $ 334.88 $ 334.88 $ 314.31 $ 604.58 $ 0.31 $ 232.16 $ 321.08 $ 297.50 $ - $ 0.31 $ 308.03 $ 306.39 $ 301.36 $ 572.70 $ 297.50 $ 63.97 $ 334.88 $ 310.28 $ 321.08 $ 572.70 $ 297.50 $ 63.97 $ 308.03 $ 321.08 $ 297.50 $ 321.08 $ 297.50 $ 309.72 $ 0.29 $ - $ 334.88 $ 308.03 $ 230.02 $ 0.29 $ - $ 297.50 $ 10.19 $ 317.35 $ 301.36 $ 321.08 $ 297.50 $ 321.08 $ 321.08 $ 297.50 $ 334.88 $ - $ 321.08 $ 67.53 $ 334.88 $ 321.08 $ 67.31 $ 301.36 $ 63.97 $ 334.88 $ 66.71 $ 334.88 $ 63.97 $ 310.28 $ 0.29 $ 321.08 $ 0.29 $ 334.88 $ 242.70 $ 297.50 $ 604.58 $ 10.19 $ 297.50 $ 297.50 $ 336.56 $ 321.08 $ 334.88 $ 310.28 $ 334.88 $ - $ 297.50 $ - $ 600.31 $ 67.05 $ 301.36 $ 321.31 $ 67.31 $ 66.71 $ 334.88 $ 321.08 $ 334.88 $ 321.08 $ 314.31 $ 66.71 $ 66.71 $ 297.50 $ 336.56 $ 321.08 $ 321.08 $ 297.50 $ 301.36 $ 301.36 $ 273.02 $ 301.36 $ 336.56 $ - $ 321.08 $ 10.19 $ 232.70 $ 597.31 $ 10.76 $ 34.51 $ 232.16 $ - $ 10.76 $ - $ 301.36 $ 321.08 $ 245.66 $ 10.19 $ 10.19 $ 311.16 $ 245.66 $ 321.08 $ 67.53 $ 319.55 $ 334.88 $ 310.28 $ 0.57 $ - $ 572.70 $ 34.51 $ - $ 313.57 $ 241.23 $ 604.58 $ 0.31 $ 336.56 $ - $ - $ 600.31 $ 0.31 $ 321.08 $ 314.31 $ 67.31 $ 66.71 $ 600.31 $ 67.53 $ 321.08 $ 572.70 $ 336.56 $ 301.36 $ 230.02 $ 334.88 $ 870.49 $ 336.56 $ 321.08 $ - $ 318.82 $ 321.08 $ 0.31 $ 2,819.88 $ 321.08 $ 321.08 $ 326.96 $ 10.76 $ 63.97 $ 334.88 $ 321.08 $ 321.08 $ 301.36 $ 297.50 $ 334.88 $ 63.97 $ 66.71 $ 321.08 $ 572.70 $ - $ 10.19 $ 332.52 $ 66.71 $ - $ 334.88 $ 297.50 $ 321.08 $ 338.95 $ 301.36 $ 319.07 $ - $ 230.02 $ 0.57 $ 325.18 $ - $ - $ - $ 316.95 $ 244.17 $ 320.10 $ 334.88 $ 334.88 $ 321.08 $ 321.08 $ 213.46 $ - $ - $ 63.97 $ 321.08 $ 301.36 $ 301.36 $ - $ - $ - $ - $ - $ 597.31 $ 66.71 $ 66.71 $ 336.56 $ - $ 308.07 $ 301.36 $ 0.29 $ 321.08 $ 306.39 $ 572.70 $ 232.16 $ 139.01 $ 321.08 $ 301.36 $ - $ - $ 334.88 $ 297.50 $ 0.29 $ 0.30 $ 334.88 $ 314.31 $ 321.08 $ 301.36 $ 10.76 $ 321.31 $ 321.08 $ 66.71 $ 10.76 $ 66.71 $ 321.08 $ 572.70 $ 321.27 $ - $ 314.31 $ 10.76 $ 319.07 $ 321.08 $ 321.08 $ 321.08 $ 66.71 $ 35.99 $ 334.88 $ 66.71 $ 314.31 $ 600.31 $ 10.19 $ 66.71 $ 321.08 $ 63.97 $ - $ 10.76 $ 301.36 $ 300.23 $ 5.82 $ 301.36 $ 309.72 $ - $ 301.36 $ 321.08 $ 67.53 $ 66.71 $ 326.96 $ 269.34 $ 321.08 $ 321.08 $ 313.95 $ 301.36 $ 10.76 $ 314.31 $ 321.08 $ 297.50 $ 5.82 $ 600.31 $ - $ 66.71 $ 321.08 $ 67.31 $ 5.82 $ 334.88 $ 597.31 $ 321.08 $ 309.72 $ 301.36 $ 5.82 $ 315.24 $ 9.58 $ 302.16 $ - $ 63.97 $ 301.36 $ 241.23 $ 66.71 $ 336.83 $ 301.36 $ 318.82 $ 301.02 $ 572.70 $ 273.02 $ 0.31 $ 2,819.88 $ 273.02 $ 992.59 $ 139.01 $ 318.82 $ 301.02 $ 273.02 $ 321.08 $ 321.08 $ 301.36 $ 318.82 $ 0.29 $ 309.72 $ 0.31 $ 321.08 $ 275.16 $ 572.70 $ 301.36 $ 332.52 $ 297.50 $ 313.95 $ 63.97 $ 284.75 $ 232.16 $ 334.88 $ 0.29 $ 291.79 $ 318.82 $ 273.02 $ 318.82 $ 34.51 $ 301.36 $ 314.31 $ 305.86 $ 318.82 $ 273.02 $ 63.97 $ 67.53 $ 597.31 $ 241.23 $ 332.52 $ 67.31 $ 318.82 $ 66.71 $ 66.71 $ 318.82 $ 287.94 $ 68.37 $ 0.95 $ 305.86 $ 275.16 $ 318.82 $ 553.40 $ 992.59 $ 273.02 $ 992.59 $ 301.36 $ 0.29 $ 66.71 $ 67.31 $ 67.31 $ 553.40 $ 334.88 $ 305.86 $ 273.02 $ 591.45 $ 273.02 $ 304.36 $ 321.08 $ 301.36 $ 321.08 $ 553.40 $ 273.02 $ 992.59 $ 273.02 $ - $ 5.82 $ 304.36 $ 301.02 $ 274.69 $ 302.16 $ 521.22 $ 269.34 $ 63.97 $ 314.31 $ 68.15 $ 273.02 $ 231.29 $ 317.44 $ 284.75 $ 35.99 $ 218.04 $ - $ 302.16 $ 297.13 $ 269.34 $ 321.08 $ 1,342.27 $ 318.82 $ 269.34 $ 301.02 $ 322.89 $ 332.79 $ 584.20 $ 332.52 $ 0.31 $ 2,766.99 $ 269.34 $ 992.59 $ 0.57 $ 301.36 $ 0.95 $ 273.02 $ 332.52 $ 318.82 $ 317.44 $ 273.02 $ 280.92 $ 332.52 $ 284.75 $ 66.71 $ 66.71 $ 321.72 $ 10.76 $ 273.02 $ 63.97 $ 227.41 $ 553.40 $ 273.02 $ 63.97 $ 321.08 $ 301.36 $ 305.86 $ 520.13 $ 318.82 $ 66.71 $ 313.95 $ 313.95 $ 68.15 $ 313.95 $ 273.02 $ 317.77 $ 288.22 $ 227.41 $ 301.36 $ 63.97 $ - $ 296.51 $ 302.16 $ 218.04 $ 269.34 $ 0.29 $ 0.29 $ 68.37 $ 284.75 $ 273.02 $ 63.97 $ 316.10 $ 281.77 $ 305.86 $ 273.02 $ 0.29 $ 0.29 $ 0.57 $ 553.40 $ 273.02 $ 68.15 $ 5.82 $ 572.70 $ 284.75 $ 63.97 $ 68.37 $ 66.71 $ 332.52 $ 318.82 $ 553.40 $ 273.02 $ 5.82 $ 553.40 $ 269.34 $ 273.02 $ 63.97 $ 315.15 $ 284.34 $ 553.40 $ 0.29 $ 553.40 $ 273.02 $ 521.22 $ 318.82 $ 273.02 $ 273.02 $ 10.76 $ 319.07 $ 301.36 $ 0.57 $ 230.02 $ 302.16 $ 521.22 $ 269.34 $ 280.92 $ 273.02 $ 268.78 $ 273.02 $ 0.57 $ 273.02 $ 302.16 $ 304.36 $ 285.23 $ 269.34 $ 273.02 $ 0.29 $ 521.22 $ 269.34 $ 9.58 $ 310.84 $ 281.77 $ 66.92 $ 269.34 $ 35.99 $ 273.02 $ 63.97 $ 281.77 $ 301.36 $ 66.71 $ 280.92 $ 269.34 $ 280.92 $ 580.08 $ 5.82 $ 301.02 $ 273.02 $ 310.84 $ 281.77 $ 0.29 $ 316.10 $ 318.82 $ 280.92 $ 66.92 $ 66.71 $ 291.79 $ 301.02 $ 273.02 $ 66.92 $ 302.16 $ 0.30 $ 273.02 $ 325.55 $ 0.31 $ 233.03 $ 281.77 $ 2,817.24 $ 315.15 $ 280.92 $ 2,817.24 $ 269.34 $ 268.78 $ 1,543.64 $ 553.40 $ 273.02 $ 316.10 $ 0.29 $ 315.15 $ 269.34 $ 280.92 $ 66.92 $ 310.84 $ 816.23 $ - $ - $ 9.58 $ 322.38 $ 269.34 $ 0.57 $ 221.39 $ 287.87 $ 10.02 $ 337.24 $ 231.61 $ 280.92 $ - $ 224.27 $ 545.26 $ 268.78 $ 340.74 $ 316.10 $ 310.84 $ 316.10 $ - $ 63.83 $ 10.02 $ 281.77 $ 67.53 $ 36.10 $ 281.77 $ 287.87 $ 2,817.24 $ 0.30 $ 545.26 $ 298.38 $ 0.29 $ 545.26 $ 224.74 $ 273.02 $ 10.02 $ 298.38 $ 313.95 $ 287.10 $ 316.10 $ 5.82 $ 315.24 $ 284.34 $ 281.77 $ 310.84 $ 0.30 $ 0.30 $ 273.02 $ - $ 321.70 $ 220.93 $ - $ 268.78 $ 10.02 $ 310.84 $ 67.05 $ 321.72 $ 0.30 $ 313.95 $ 340.74 $ - $ 282.33 $ 296.51 $ 297.13 $ 269.34 $ - $ 284.75 $ 0.57 $ 545.26 $ 281.77 $ 0.30 $ 316.10 $ 310.84 $ 281.77 Internal PVP Contract Number Manufacturer NDC/Item # CH031670 GLAXO SMITH KLINE 00173086906 CH031670 GLAXO SMITH KLINE 00173086910 CH031670 TEVA NEUROSCIENCE 68546017260 CH031670 TEVA NEUROSCIENCE 68546017060 CH031670 TEVA NEUROSCIENCE 68546017160 CH031670 TEVA NEUROSCIENCE 68546047356 CH031670 TEVA NEUROSCIENCE 68546047456 CH031670 TEVA NEUROSCIENCE 68546047556 CH031670 TEVA NEUROSCIENCE 68546047656 CH031670 TEVA NEUROSCIENCE 68546047729 CH031670 TEVA NEUROSCIENCE 68546047156 CH031670 TEVA NEUROSCIENCE 68546047956 CH031670 TEVA NEUROSCIENCE 68546047256 CH031670 TEVA NEUROSCIENCE 68546047056 CH031670 TEVA NEUROSCIENCE 68546049052 CH031670 GILEAD SCIENCES 61958250101 CH031670 GILEAD SCIENCES 61958250501 CH031670 GILEAD SCIENCES 61958250601 CH031670 GILEAD SCIENCES 61958250103 CH031670 ALLERGAN 00023923201 CH031670 ALLERGAN 00023391950 CH031670 ALLERGAN 00023114501 CH031670 ALLERGAN 00023392102 CH031670 GLAXO SMITH KLINE 00173085914 CH031670 GLAXO SMITH KLINE 00173085910 CH031670 GLAXO SMITH KLINE 00173088214 CH031670 GLAXO SMITH KLINE 00173088210 CH031670 GLAXO SMITH KLINE 00173091610 CH031670 ASTRAZENECA 00310351260 CH031670 UCB PHARMA 50474075010 CH031670 UCB PHARMA 50474070062 CH031670 UCB PHARMA 50474071079 CH031670 UCB PHARMA 50474071081 CH031670 NOVARTIS 00078116861 CH031670 NOVARTIS 00078063968 CH031670 NOVARTIS 00078063997 CH031670 NOVARTIS 00078063998 CH031670 NOVARTIS 00078063941 CH031670 NOVARTIS 00078105697 CH031670 NOVARTIS 00078107068 CH031670 PRASCO LABORATORIES 66993045730 CH031670 PRASCO LABORATORIES 66993045630 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003102828 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003102884 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003102812 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089828 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089331 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089321 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089431 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089421 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003089470 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003376474 CH031670 AMGEN 58406004404 CH031670 AMGEN 58406003204 CH031670 AMGEN 58406005504 CH031670 AMGEN 58406001004 CH031670 AMGEN 58406002104 CH031670 NOVARTIS 00078123820 CH031670 NOVARTIS 00078123120 CH031670 NOVARTIS 00078065967 CH031670 NOVARTIS 00078065920 CH031670 NOVARTIS 00078077767 CH031670 NOVARTIS 00078077720 CH031670 NOVARTIS 00078069667 CH031670 NOVARTIS 00078069620 CH031670 TAKEDA PHARMACEUTICALS 64764030020 CH031670 TAKEDA PHARMACEUTICALS 64764010821 CH031670 JANSSEN PRODUCTS 59676060430 CH031670 JANSSEN PRODUCTS 59676060012 CH031670 ASTRAZENECA 00310621030 CH031670 ASTRAZENECA 00310621039 CH031670 ASTRAZENECA 00310621090 CH031670 ASTRAZENECA 00310620530 CH031670 ASTRAZENECA 00310620590 CH031670 NOVO NORDISK 00169320615 CH031670 PRASCO LABORATORIES 66993013597 CH031670 PRASCO LABORATORIES 66993013697 CH031670 NOVO NORDISK PHARMA 73070010315 CH031670 NOVO NORDISK PHARMA 73070010011 CH031670 NOVO NORDISK PHARMA 73070010215 CH031670 NOVO NORDISK 00169320415 CH031670 NOVO NORDISK 00169320111 CH031670 NOVO NORDISK 00169320515 CH031670 NOVO NORDISK 00169330312 CH031670 NOVO NORDISK 00169633910 CH031670 NOVO NORDISK 00169750111 CH031670 MERCK SHARP & DOHME 00006057762 CH031670 MERCK SHARP & DOHME 00006057761 CH031670 MERCK SHARP & DOHME 00006057582 CH031670 MERCK SHARP & DOHME 00006057562 CH031670 MERCK SHARP & DOHME 00006057561 CH031670 MERCK SHARP & DOHME 00006008154 CH031670 MERCK SHARP & DOHME 00006008131 CH031670 MERCK SHARP & DOHME 00006008062 CH031670 MERCK SHARP & DOHME 00006008061 CH031670 MERCK SHARP & DOHME 00006007862 CH031670 MERCK SHARP & DOHME 00006007861 CH031670 MERCK SHARP & DOHME 00006027782 CH031670 MERCK SHARP & DOHME 00006027728 CH031670 MERCK SHARP & DOHME 00006027731 CH031670 MERCK SHARP & DOHME 00006027754 CH031670 MERCK SHARP & DOHME 00006022128 CH031670 MERCK SHARP & DOHME 00006022131 CH031670 MERCK SHARP & DOHME 00006022154 CH031670 MERCK SHARP & DOHME 00006011228 CH031670 MERCK SHARP & DOHME 00006011231 CH031670 MERCK SHARP & DOHME 00006011254 CH031670 BOEHRINGER INGELHEIM 00597015230 CH031670 BOEHRINGER INGELHEIM 00597015237 CH031670 BOEHRINGER INGELHEIM 00597015290 CH031670 BOEHRINGER INGELHEIM 00597015330 CH031670 BOEHRINGER INGELHEIM 00597015337 CH031670 BOEHRINGER INGELHEIM 00597015390 CH031670 NOVARTIS 00078086001 CH031670 NOVARTIS 00078086742 CH031670 NOVARTIS 00078087463 CH031670 EISAI 62856071030 CH031670 EISAI 62856071230 CH031670 EISAI 62856071430 CH031670 EISAI 62856071830 CH031670 EISAI 62856072030 CH031670 EISAI 62856072430 CH031670 EISAI 62856070430 CH031670 EISAI 62856070830 CH031670 ALLERGAN 00456120130 CH031670 ALLERGAN 00456120230 CH031670 ALLERGAN 00456120330 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003218851 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003218713 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003218811 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003281411 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 00003281811 CH031670 AMGEN 55513049760 CH031670 AMGEN 55513013760 CH031670 AMGEN 55513051641 CH031670 AMGEN 55513036955 CH031670 AMGEN 55513050855 CH031670 AMGEN 55513051930 CH031670 NOVO NORDISK 00169413013 CH031670 NOVO NORDISK 00169477212 CH031670 NOVO NORDISK 00169418113 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050100 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050121 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050200 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050221 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050300 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050321 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050400 CH031670 B-M SQUIBB U.S. (PRIMARY CARE) 59572050421 CH031670 OTSUKA AMERICA 59148003513 CH031670 OTSUKA AMERICA 59148003613 CH031670 OTSUKA AMERICA 59148003713 CH031670 OTSUKA AMERICA 59148003813 CH031670 OTSUKA AMERICA 59148003913 CH031670 OTSUKA AMERICA 59148004013 CH031670 NOVO NORDISK 00169431430 CH031670 NOVO NORDISK 00169430330 CH031670 NOVO NORDISK 00169430730 CH031670 JANSSEN BIOTECH 57894006002 CH031670 JANSSEN BIOTECH 57894005427 CH031670 JANSSEN BIOTECH 57894006003 CH031670 JANSSEN BIOTECH 57894006103 CH031670 BOEHRINGER INGELHEIM 00597014061 CH031670 BOEHRINGER INGELHEIM 00597014030 CH031670 BOEHRINGER INGELHEIM 00597014090 CH031670 GLAXO SMITH KLINE 00173088714 CH031670 GLAXO SMITH KLINE 00173088710 CH031670 GLAXO SMITH KLINE 00173089314 CH031670 GLAXO SMITH KLINE 00173089310 CH031670 LILLY 00002143380 CH031670 LILLY 00002143480 CH031670 LILLY 00002223680 CH031670 LILLY 00002318280 CH031670 PRASCO LABORATORIES 66993013497 CH031670 JANSSEN BIOTECH 57894044003 CH031670 JANSSEN BIOTECH 57894044401 CH031670 JANSSEN BIOTECH 57894044001 CH031670 JANSSEN BIOTECH 57894044101 CH031670 LILLY 00002481554 CH031670 LILLY 00002533754 CH031670 LILLY 00002621654 CH031670 LILLY 00002448354 CH031670 ALLERGAN 61874025030 CH031670 ALLERGAN 61874027530 CH031670 ALLERGAN 61874011520 CH031670 ALLERGAN 61874011530 CH031670 ALLERGAN 61874013020 CH031670 ALLERGAN 61874013030 CH031670 ALLERGAN 61874014530 CH031670 ALLERGAN 61874016030 CH031670 ALLERGAN 61874017008 CH031670 NOVO NORDISK 00169452514 CH031670 NOVO NORDISK 00169450514 CH031670 NOVO NORDISK 00169451714 CH031670 NOVO NORDISK 00169450114 CH031670 NOVO NORDISK 00169452414 CH031670 NOVO NORDISK 00169441531 CH031670 NOVO NORDISK 00169442531 CH031670 NOVO NORDISK 00169440431 CH031670 NOVO NORDISK 00169440931 CH031670 JANSSEN 50458057501 CH031670 JANSSEN 50458058010 CH031670 JANSSEN 50458058030 CH031670 JANSSEN 50458058090 CH031670 JANSSEN 50458057810 CH031670 JANSSEN 50458057830 CH031670 JANSSEN 50458057890 CH031670 JANSSEN 50458057710 CH031670 JANSSEN 50458057718 CH031670 JANSSEN 50458057760 CH031670 JANSSEN 50458057989 CH031670 JANSSEN 50458057910 CH031670 JANSSEN 50458057930 CH031670 JANSSEN 50458057990 CH031670 JANSSEN 50458058451 CH031670 PFIZER U.S. 00069102902 CH031670 PFIZER U.S. 00069100201 CH031670 PFIZER U.S. 00069100101 CH031670 PFIZER U.S. 00069050130 CH031670 PFIZER U.S. 00069050230 CH031670 GENENTECH 50242004062 CH031670 GENENTECH 50242021555 CH031670 GENENTECH 50242021503 CH031670 GENENTECH 50242021501 CH031670 GENENTECH 50242022755 CH031670 GENENTECH 50242022701 CH031670 GENENTECH 50242021455 CH031670 GENENTECH 50242021403 CH031670 GENENTECH 50242021401 CH031670 ASTELLAS 00469012599 CH031670 ASTELLAS 00469062599 CH031670 ASTELLAS 00469072560 Label Name Package Quantity Description 340B Selling Pric ANORO ELLIP IN62.5-25MCG 14 $ 13.69 ANORO ELLIPTA IN 62.5-25M 60 $ 58.66 AUSTEDO TB 12MG 60 60 $ 4,505.79 AUSTEDO TB 6MG 60 60 $ 2,984.08 AUSTEDO TB 9MG 60 60 $ 3,385.44 AUSTEDO XR ER TB 30MG 30 30 $ 6,067.73 AUSTEDO XR ER TB 36MG 30 30 $ 7,590.76 AUSTEDO XR ER TB 42MG 30 30 $ 9,102.09 AUSTEDO XR ER TB 48MG 30 30 $ 9,107.29 AUSTEDO XR ER TITRATION T 28 $ 4,259.33 AUSTEDO XR TB 12MG 30 30 $ 3,035.77 AUSTEDO XR TB 18MG 30 30 $ 4,552.47 AUSTEDO XR TB 24MG 30 30 $ 4,532.77 AUSTEDO XR TB 6MG 30 30 $ 1,519.66 AUSTEDO XR TITRATION KT 4 42 $ 3,881.34 BIKTARVY 50-200-25MG TB 3 30 $ 2,719.43 BIKTARVY TB 30-120-15MG 3 30 $ 2,748.78 BIKTARVY TB 30-120-15MG 3 30 $ 2,774.36 BIKTARVY TB50-200-25MG 30 30 $ 2,719.43 BOTOX COSMETIC PR 100U DS 1 $ 470.03 BOTOX COSMETIC PR 50U PF 1 $ 259.12 BOTOX PR 100U THPTC DSHP 1 $ 470.03 BOTOX PR 200U PF DSHP 1 $ 972.91 BREO ELLIPTA IN 100-25MCG 28 $ 44.49 BREO ELLIPTA IN 100-25MCG 60 $ 95.34 BREO ELLIPTA IN 200-25MCG 28 $ 44.44 BREO ELLIPTA IN 200-25MCG 60 $ 95.23 BREO ELLIPTA IN 50-25MCG 60 $ 95.29 CALQUENCE TB 100MG 60 SPD 60 $ 12,172.62 CIMZIA KT 200MG/ML PF PFS 1 $ 2,306.78 CIMZIA KT 2X200MG LYOPH V 1 $ 1,122.64 CIMZIA KT 2X200MG PFS SPD 1 $ 0.01 CIMZIA KT 3X2X200MG PFS 3 $ 0.03 COSENTYX SF 25MG/ML 5ML S 5 $ 1,637.80 COSENTYX SY 150MG/ML 1ML 1 $ 637.15 COSENTYX SY 150MG/ML 1ML 1 $ 637.15 COSENTYX SY 150MG/ML 2X1M 2 $ 1,274.30 COSENTYX SY 150MG/ML PF 2 2 $ 1,274.30 COSENTYX SY 75MG/0.5ML 0. 0.5 $ 955.86 COSENTYX UNOREADY SY300MG 2 $ 1,942.12 DAPAGLIFLOZIN TB 10MG 30 30 $ 219.22 DAPAGLIFLOZIN TB 5MG 30 30 $ 218.38 ELIQUIS PK 0.5MG 28 OSUS 28 $ 3.58 ELIQUIS PK 1.5MG 28X3 OSU 84 $ 10.73 ELIQUIS PK 2MG 28X4 OSUS 112 $ 14.30 ELIQUIS SPRINKLE CP 0.15M 28 $ 3.58 ELIQUIS TB 2.5MG 10X10UD 100 $ 41.21 ELIQUIS TB 2.5MG 60 60 $ 24.73 ELIQUIS TB 5MG 10X10UD 100 $ 24.12 ELIQUIS TB 5MG 60 60 $ 14.47 ELIQUIS TB 5MG 74 74 $ 17.85 ELIQUIS TB 5MG 74 30D S/P 74 $ 17.85 ENBREL MINI CT 50MG/ML 4X 4 $ 178.27 ENBREL SCLK SY 50MG/ML 4X 4 $ 0.04 ENBREL SF 25MG/0.5ML 4X0. 2 $ 0.02 ENBREL SY 25MG/0.5ML 4X0. 2 $ 0.02 ENBREL SY 50MG/ML 4X1ML P 4 $ 0.04 ENTRESTO CP 15-16MG 60 60 $ 319.29 ENTRESTO CP 6-6MG 60 60 $ 319.44 ENTRESTO TB 24-26MG 180 180 $ 959.01 ENTRESTO TB 24-26MG 60 60 $ 319.67 ENTRESTO TB 49-51MG 180 180 $ 953.98 ENTRESTO TB 49-51MG 60 60 $ 318.00 ENTRESTO TB 97-103MG 180 180 $ 988.03 ENTRESTO TB 97-103MG 60 60 $ 329.34 ENTYVIO PR 300MG PF SPD 1 $ 4,577.65 ENTYVIO SY 108MG/0.68ML P 0.68 $ 1,718.48 ERLEADA TB 240MG 30 SPD 30 $ 10,374.07 ERLEADA TB 60MG 120 SPD 120 $ 10,379.14 FARXIGA TB 10MG 30 30 $ 0.29 FARXIGA TB 10MG 3X10UD BP 30 $ 0.29 FARXIGA TB 10MG 90 90 $ 0.86 FARXIGA TB 5MG 30 30 $ 0.29 FARXIGA TB 5MG 90 90 $ 0.86 FIASP PUMPCART CT 100U/ML 8 $ 29.32 FLUTICA FUR/VILAN IN 100- 60 $ 144.33 FLUTICA FUR/VILAN IN 200- 60 $ 145.26 INS ASP FLXPN SY 100U/ML 15 $ 63.83 INS ASPART MD 100U/ML 10M 10 $ 34.43 INS ASPART PEN CT 100U/ML 15 $ 63.83 INS FIASP FLXTC SY 100U/M 15 $ 55.00 INS FIASP MD 100U/ML 10ML 10 $ 29.61 INS FIASP PENFILL CT 100U 15 $ 55.00 INS NOVOLOG CT 100U/ML 5X 15 $ 63.82 INS NOVOLOG FLEXPEN SY 5X 15 $ 63.82 INS NOVOLOG MD 100U/ML 10 10 $ 34.43 JANUMET TB 50-1000MG 180 180 $ 96.71 JANUMET TB 50-1000MG 60 60 $ 32.24 JANUMET TB 50-500MG 1000 1000 $ 556.37 JANUMET TB 50-500MG 180UU 180 $ 100.15 JANUMET TB 50-500MG 60 60 $ 33.38 JANUMET XR TB 100-1000MG 90 $ 99.85 JANUMET XR TB 100-1000MG 30 $ 33.28 JANUMET XR TB 50-1000MG 1 180 $ 99.74 JANUMET XR TB 50-1000MG 6 60 $ 33.25 JANUMET XR TB 50-500MG 18 180 $ 110.91 JANUMET XR TB 50-500MG 60 60 $ 36.97 JANUVIA TB 100MG 1000 1000 $ 1,245.07 JANUVIA TB 100MG 10X10UD 100 $ 124.50 JANUVIA TB 100MG 30UU 30 $ 37.35 JANUVIA TB 100MG 90UU 90 $ 112.06 JANUVIA TB 25MG 10X10UD 100 $ 136.25 JANUVIA TB 25MG 30UU 30 $ 40.87 JANUVIA TB 25MG 90UU 90 $ 122.62 JANUVIA TB 50MG 10X10UD 100 $ 125.57 JANUVIA TB 50MG 30UU 30 $ 37.67 JANUVIA TB 50MG 90UU 90 $ 113.02 JARDIANCE TB 10MG 30 30 $ 0.29 JARDIANCE TB 10MG 3X10UD 30 $ 0.29 JARDIANCE TB 10MG 90 90 $ 0.86 JARDIANCE TB 25MG 30 30 $ 0.29 JARDIANCE TB 25MG 3X10UD 30 $ 0.29 JARDIANCE TB 25MG 90 90 $ 0.86 KISQALI TB 200MG 21 BPK 2 21 $ 3,701.25 KISQALI TB 200MG 3X14 BPK 42 $ 7,501.74 KISQALI TB 200MG 3X21 BPK 63 $ 9,184.34 LENVIMA CP 10MG/DAY 30 SP 30 $ 11,465.11 LENVIMA CP 12MG/DAY 90 SP 90 $ 11,475.94 LENVIMA CP 14MG/DAY 60 SP 60 $ 11,468.12 LENVIMA CP 18MG/DAY 90 SP 90 $ 11,448.64 LENVIMA CP 20MG/DAY 60 SP 60 $ 13,468.23 LENVIMA CP 24MG/DAY 90 SP 90 $ 13,471.56 LENVIMA CP 4MG/DAY 30 SPD 30 $ 11,468.36 LENVIMA CP 8MG/DAY 60 SPD 60 $ 11,470.23 LINZESS CP 145MCG 30 30 $ 0.29 LINZESS CP 290MCG 30 30 $ 0.29 LINZESS CP 72MCG 30 30 $ 0.29 ORENCIA CLICKJECT SY125MG 4 $ 35.71 ORENCIA PR 250MG PF 1 $ 458.37 ORENCIA SY 125MG/ML 4X1ML 4 $ 35.71 ORENCIA SY 50MG/0.4ML 4X0 1.6 $ 2,601.06 ORENCIA SY 87.5MG/0.7ML 4 2.8 $ 2,629.85 OTEZLA TB 20MG 60 60 $ 0.57 OTEZLA TB 30MG 60 60 $ 0.57 OTEZLA TB 41 TRTPK ER 41 $ 0.39 OTEZLA TB 55 TRTPK 55 $ 0.52 OTEZLA TB 55 TRTPK 55 $ 0.52 OTEZLA TB 75MG 30 ER 30 $ 0.29 OZEMPIC SY 1MG 3ML PPN 3 $ 301.46 OZEMPIC SY 2MG 3ML PPN 3 $ 276.92 OZEMPIC SY0.25 OR 0.5MG 3 3 $ 301.46 POMALYST CP 1MG 100 DSHP 100 $ 43,500.44 POMALYST CP 1MG 21 DSHP S 21 $ 9,135.09 POMALYST CP 2MG 100 DSHP 100 $ 43,535.53 POMALYST CP 2MG 21 DSHP S 21 $ 9,142.46 POMALYST CP 3MG 100 DSHP 100 $ 43,509.21 POMALYST CP 3MG 21 DSHP S 21 $ 9,136.93 POMALYST CP 4MG 100 DSHP 100 $ 43,554.02 POMALYST CP 4MG 21 DSHP S 21 $ 9,146.34 REXULTI TB 0.25MG 30 30 $ 791.26 REXULTI TB 0.5MG 30 30 $ 791.26 REXULTI TB 1MG 30 30 $ 791.26 REXULTI TB 2MG 30 30 $ 791.26 REXULTI TB 3MG 30 30 $ 791.26 REXULTI TB 4MG 30 30 $ 791.26 RYBELSUS TB 14MG 30UU 1/D 30 $ 292.16 RYBELSUS TB 3MG 30UU 1/D 30 $ 292.18 RYBELSUS TB 7MG 30UU 1/D 30 $ 292.37 STELARA SF 45MG/0.5ML 0.5 $ 2,098.23 STELARA SF 5MG/ML 26ML SP 26 $ 1,118.19 STELARA SY 45MG/0.5ML 0.5 $ 1,997.10 STELARA SY 90MG/ML 1 $ 5,584.06 TRADJENTA TB 5MG 10X10UD 100 $ 0.95 TRADJENTA TB 5MG 30 30 $ 0.29 TRADJENTA TB 5MG 90 90 $ 0.86 TRELEGY ELLIP IN100-62.5- 28 $ 113.84 TRELEGY ELLIP IN100-62.5- 60 $ 243.95 TRELEGY ELLIP IN200-62.5- 28 $ 113.84 TRELEGY ELLIP IN200-62.5- 60 $ 243.95 TRULICITY SY 0.75MG/0.5ML 2 $ 425.78 TRULICITY SY 1.5MG/0.5ML 2 $ 425.79 TRULICITY SY 3MG/0.5ML 4 2 $ 722.76 TRULICITY SY 4.5MG/0.5ML 2 $ 722.74 UMECLID/VILANT IN62.5-25M 60 $ 190.88 USTEKINUMAB SF45MG/0.5ML 0.5 $ 2,933.42 USTEKINUMAB SF5MG/ML26ML 26 $ 1,367.96 USTEKINUMAB SY 45MG/0.5ML 0.5 $ 2,933.42 USTEKINUMAB SY 90MG/ML PF 1 $ 5,457.22 VERZENIO TB 100MG 14 BPK 14 $ 2,542.17 VERZENIO TB 150MG 14 BPK 14 $ 2,539.35 VERZENIO TB 200MG 14 BPK 14 $ 2,535.31 VERZENIO TB 50MG 14 BPK 14 $ 2,542.24 VRAYLAR CP 0.5MG 30 30 $ 1,032.21 VRAYLAR CP 0.75MG 30 30 $ 1,032.21 VRAYLAR CP 1.5MG 2X10UD B 20 $ 559.63 VRAYLAR CP 1.5MG 30 30 $ 839.44 VRAYLAR CP 3MG 2X10UD BPK 20 $ 559.63 VRAYLAR CP 3MG 30 30 $ 839.45 VRAYLAR CP 4.5MG 30 30 $ 839.17 VRAYLAR CP 6MG 30 30 $ 839.11 VRAYLAR CP 7 MIXED BPK 7 $ 193.62 WEGOVY SY 0.25MG/0.5ML4X0 2 $ 438.67 WEGOVY SY 0.5MG/0.5ML 4X0 2 $ 438.67 WEGOVY SY 1.7MG/0.75ML 4X 3 $ 438.67 WEGOVY SY 1MG/0.5ML 4X0.5 2 $ 438.67 WEGOVY SY 2.4MG/0.75ML 4X 3 $ 438.67 WEGOVY TB 1.5MG 30 30 $ 987.38 WEGOVY TB 25MG 30 30 $ 987.38 WEGOVY TB 4MG 30 30 $ 987.38 WEGOVY TB 9MG 30 30 $ 987.38 XARELTO PT 1MG/ML 155ML G 155 $ 1.48 XARELTO TB 10MG 10X10UD I 100 $ 0.95 XARELTO TB 10MG 30 30 $ 0.29 XARELTO TB 10MG 90 90 $ 0.86 XARELTO TB 15MG 10X10UD 100 $ 0.95 XARELTO TB 15MG 30 30 $ 0.29 XARELTO TB 15MG 90 90 $ 0.86 XARELTO TB 2.5MG 10X10UD 100 $ 0.95 XARELTO TB 2.5MG 180 180 $ 1.71 XARELTO TB 2.5MG 60 60 $ 0.57 XARELTO TB 20MG 1000 1000 $ 9.52 XARELTO TB 20MG 10X10UD 100 $ 0.95 XARELTO TB 20MG 30 30 $ 0.29 XARELTO TB 20MG 90 90 $ 0.86 XARELTO TB 51 30D S/PK 51 $ 0.49 XELJANZ SL 1MG/ML 240ML 240 $ 2.28 XELJANZ TB 10MG 60 60 $ 0.57 XELJANZ TB 5MG 60 60 $ 0.57 XELJANZ XR TB 11MG 30 30 $ 0.29 XELJANZ XR TB 22MG 30 30 $ 0.29 XOLAIR PR 150MG SPD 1 $ 480.22 XOLAIR SY 150MG/ML A-INJ 1 $ 912.57 XOLAIR SY 150MG/ML PF SPD 1 $ 912.57 XOLAIR SY 150MG/ML SPD 1 $ 873.88 XOLAIR SY 300MG/2ML A-INJ 2 $ 1,956.23 XOLAIR SY 300MG/2ML PF SP 2 $ 1,956.23 XOLAIR SY 75MG/0.5ML A-IN 0.5 $ 473.09 XOLAIR SY 75MG/0.5ML PF S 0.5 $ 473.09 XOLAIR SY 75MG/0.5ML SPD 0.5 $ 438.55 XTANDI GC 40MG 120 120 $ 6,775.24 XTANDI TB 40MG 120 SPD 120 $ 6,762.03 XTANDI TB 80MG 60 SPD 60 $ 6,767.97 PVP Contracted Price - 340B Account PVP Contracted Price Eff Date - 340B Account PVP Contracted Price Exp Date - 340B Account WAC Price $ 117.54 $ 489.09 $ 7,917.14 $ 5,278.17 $ 5,937.96 $ 10,556.22 $ 13,195.41 $ 15,834.50 $ 15,834.39 $ 7,389.43 $ 5,278.17 $ 7,917.25 $ 7,917.14 $ 2,639.08 $ 6,833.38 $ 4,216.10 $ 4,216.10 $ 4,216.10 $ 4,216.10 $ 656.00 $ 362.00 $ 651.00 $ 1,302.00 $ 156.88 $ 407.22 $ 156.88 $ 407.22 $ 407.22 $ 16,304.03 $ 3,149.71 $ 6,299.40 $ 6,299.40 $ 18,898.21 $ 2,244.67 $ 8,165.42 $ 8,165.42 $ 8,165.42 $ 8,165.42 $ 4,082.70 $ 8,492.03 $ 378.46 $ 378.46 $ 80.60 $ 241.79 $ 322.39 $ 80.60 $ 576.02 $ 345.59 $ 576.02 $ 345.59 $ 426.23 $ 426.23 $ 8,565.48 $ 8,565.48 $ 4,282.76 $ 4,282.76 $ 8,565.48 $ 726.37 $ 726.37 $ 2,179.13 $ 726.37 $ 2,179.13 $ 726.37 $ 2,179.13 $ 726.37 $ 10,108.70 $ 3,639.14 $ 15,713.54 $ 15,713.54 $ 377.82 $ 377.82 $ 1,133.46 $ 377.82 $ 1,133.46 $ 71.66 $ 249.50 $ 249.50 $ 139.71 $ 72.34 $ 134.37 $ 139.71 $ 72.34 $ 134.37 $ 134.37 $ 139.71 $ 72.34 $ 990.00 $ 330.00 $ 5,500.00 $ 990.00 $ 330.00 $ 990.00 $ 330.00 $ 990.00 $ 330.00 $ 990.00 $ 330.00 $ 11,000.00 $ 1,100.00 $ 330.00 $ 990.00 $ 1,100.00 $ 330.00 $ 990.00 $ 1,100.00 $ 330.00 $ 990.00 $ 350.00 $ 350.00 $ 1,050.00 $ 350.00 $ 350.00 $ 1,050.00 $ 7,640.05 $ 15,280.15 $ 19,100.20 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 25,732.00 $ 282.48 $ 282.48 $ 282.48 $ 6,070.59 $ 1,604.25 $ 6,070.59 $ 6,070.59 $ 6,070.59 $ 5,589.89 $ 5,589.89 $ 5,589.89 $ 5,589.89 $ 5,589.89 $ 5,589.89 $ 1,027.51 $ 1,027.51 $ 1,027.51 $ 119,284.25 $ 25,049.70 $ 119,284.25 $ 25,049.70 $ 119,284.25 $ 25,049.70 $ 119,284.25 $ 25,049.70 $ 1,555.86 $ 1,555.86 $ 1,555.86 $ 1,555.86 $ 1,555.86 $ 1,555.86 $ 1,027.51 $ 1,027.51 $ 1,027.51 $ 15,304.53 $ 2,225.64 $ 15,304.53 $ 30,609.03 $ 1,750.27 $ 525.08 $ 1,575.24 $ 325.17 $ 697.73 $ 325.17 $ 697.73 $ 1,006.93 $ 1,006.93 $ 1,006.93 $ 1,006.93 $ 317.91 $ 10,932.00 $ 1,800.00 $ 3,644.00 $ 7,288.00 $ 4,327.47 $ 4,327.47 $ 4,327.47 $ 4,327.47 $ 1,594.82 $ 1,594.82 $ 1,063.22 $ 1,594.82 $ 1,063.22 $ 1,594.82 $ 1,594.82 $ 1,594.82 $ 337.52 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 1,349.02 $ 611.82 $ 2,039.38 $ 611.82 $ 1,835.45 $ 2,039.38 $ 611.82 $ 1,835.45 $ 1,019.71 $ 1,835.45 $ 611.82 $ 20,393.87 $ 2,039.38 $ 611.82 $ 1,835.45 $ 1,040.10 $ 5,125.73 $ 6,407.16 $ 4,554.86 $ 6,407.16 $ 6,407.16 $ 1,553.76 $ 1,553.76 $ 1,553.76 $ 1,553.76 $ 3,107.53 $ 3,107.53 $ 776.88 $ 776.88 $ 776.88 $ 15,352.94 $ 15,352.94 $ 15,352.94 AHFS Therapeutic Class Description
HRSA-2026-0001-2184Pendleton Community Care, Inc.2026-04-20T04:00Z89,159 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of PENDLETON COMMUNITY CARE, INC., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PENDLETON COMMUNITY CARE, INC. estimates an average loss of $356,804 from our entity-owned pharmacies operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as school-based health centers and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PENDLETON COMMUNITY CARE, INC. in particular, this means it will impact: 26,671 340B transactions / 5,100 unique patients $882,457 administrative costs (including salaries & benefits) In the past, 340B savings has been used for the following categories: o Sliding Fee discounts and Care for the Uninsured= 13% o Primary Care = 23% o Laboratory & Radiology Services = 9% o Enabling Services (including Health Education, Outreach, etc) = 7% o School Based Services = 2% o Nutrition Services = 1% o Capital Investments to support care delivery (facility expansion, renovations, repairs & maintenance, building projects) = 45% We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount PENDLETON COMMUNITY CARE, INC. provided $183,941 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PENDLETON COMMUNITY CARE, INC. anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 5 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 PENDLETON COMMUNITY CARE, INC. estimates an increase of 1.5 FTE, which will result in an increase of approximately $135,000 in annual salary and benefit costs. Additionally, there will be upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PENDLETON COMMUNITY CARE, INC estimates that it will pay $869,133 in upfront costs to purchase 340B drugs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. PENDLETON COMMUNITY CARE, INC. estimates it will take 15 HOURS to report claims per week. We will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PENDLETON COMMUNITY CARE, INC. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. PENDLETON COMMUNITY CARE, INC. estimates it could spend up to $50,000 on implementation costs simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,100 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools, estimated to be $50,000.00 7 Internal NACHC assessment (99 responses). 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 8 Internal NACHC survey data 7 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Household Income and household size is obtained during check-in and asked annually to screen for eligibility for the sliding scale discount program. Household income is usually considered as a unit; a household is a group of related or unrelated individuals occupying the same living quarters and sharing expenses. Dependent children living at home (as defined by the IRS) are counted as household members even if they have a job. The income from that type of employment is not included in household revenue. Gross income (before taxes, and other deductions) from the household is considered. A completed Sliding Scale Application and proof of income is required. Income eligibility is reviewed at least annually. PENDLETON COMMUNITY CARE, INC.s Sliding Scale Discount Program offers tiered flat amount discounts on prescription drugs, based upon the reported income and in-line with the annual Federal Poverty Level guidelines. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $4,345,665 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,448,555 to purchase these same drugs at the 340B ceiling price. This represents a projected 300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PENDLETON COMMUNITY CARE, INC. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as additional outreach, nutrition, mammography services, expensive repair and maintenance updates to facilities, Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 338 uninsured patients from rationing medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PENDLETON COMMUNITY CARE, INC. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 10 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PENDLETON COMMUNITY CARE, INC. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $132,266. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PENDLETON COMMUNITY CARE, INC. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $832,910 in 2026. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest rate is currently 6%funds that are currently dedicated to supporting medical care and benefits for employees to retain the workforce. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PENDLETON COMMUNITY CARE, INC. the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PENDLETON COMMUNITY CARE, INC. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 loss of $144,855. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 12 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Under the current Medicare Prescription Payment Plan (MFP) rebate model, our pharmacy has experienced a significant administrative burden relative to the small number of claims processed. On average, our staff spend approximately one hour per month managing only four prescriptions associated with this program. The time required is driven by multiple manual reconciliation steps across several systems. These steps include: Running bi-monthly reports within the Medicare Facilitator platform Extracting corresponding reports from our pharmacy management software Manually matching the ICN number to the correct prescription using a tracking spreadsheet Logging into Beacon to verify that rebates received are appropriate and accurate Tracking manufacturer credits that are due for rebate processing Communicating with manufacturers to dispute claims that are incorrectly categorized as 340B drugs Manufacturer disputes are particularly challenging. We frequently encounter situations where manufacturers classify medications as 340B solely because the pharmacy recently purchased 340B inventory, despite the fact that our pharmacy maintains two completely separate physical inventories. This results in additional administrative time spent providing clarification and correcting inaccurate rebate determinations. It is important to note that this administrative effort currently applies only to the 10 Medicare drugs subject to the MFP model, for which our pharmacy dispenses approximately 60 prescriptions per month. Even within this limited scope, the reconciliation process requires a disproportionate amount of manual staff time. If a 340B rebate model were expanded to apply to all 340B medications, the operational impact would be substantial. Our pharmacy dispenses approximately 2,184 340B prescriptions per month. Based on the current reconciliation workload (approximately one hour per four prescriptions), this would equate to an estimated 546 13 hours of additional support staff time per month required solely to manage rebate reconciliation and dispute processes. For community health center pharmacies and other safety-net providers, this level of administrative burden would require significant additional staffing and operational resources. The current process relies heavily on manual reconciliation across multiple systems and frequent manufacturer disputes, making it difficult to scale without creating major operational strain. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PENDLETON COMMUNITY CARE, INC. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the 14 original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PENDLETON COMMUNITY CARE, INC. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PENDLETON COMMUNITY CARE, INC. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me, JAMIE HUDSON, CEO at jhudson@pcc-nfc.org. Sincerely, Jamie Hudson, CEO PENDLETON COMMUNITY CARE, INC. April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of PENDLETON COMMUNITY CARE, INC., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: PENDLETON COMMUNITY CARE, INC. estimates an average loss of $356,804 from our entity-owned pharmacies operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as school-based health centers and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For PENDLETON COMMUNITY CARE, INC. in particular, this means it will impact: 26,671 340B transactions / 5,100 unique patients $882,457 administrative costs (including salaries & benefits) In the past, 340B savings has been used for the following categories: o Sliding Fee discounts and Care for the Uninsured= 13% o Primary Care = 23% o Laboratory & Radiology Services = 9% o Enabling Services (including Health Education, Outreach, etc.) = 7% o School Based Services = 2% o Nutrition Services = 1% o Capital Investments to support care delivery (facility expansion, renovations, repairs & maintenance, building projects) = 45% We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount PENDLETON COMMUNITY CARE, INC., provided $183,941 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: PENDLETON COMMUNITY CARE, INC. anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 5 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 PENDLETON COMMUNITY CARE, INC. estimates an increase of 1.5 FTE, which will result in an increase of approximately $135,000 in annual salary and benefit costs. Additionally, there will be upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. PENDLETON COMMUNITY CARE, INC estimates that it will pay $869,133 in upfront costs to purchase 340B drugs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. PENDLETON COMMUNITY CARE, INC. estimates it will take 15 HOURS to report claims per week. We will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. PENDLETON COMMUNITY CARE, INC. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. PENDLETON COMMUNITY CARE, INC., estimates it could spend up to $50,000 on implementation costs simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 5,100 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools, estimated to be $50,000.00 7 Internal NACHC assessment (99 responses). 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 8 Internal NACHC survey data 7 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Household Income and household size is obtained during check-in and asked annually to screen for eligibility for the sliding scale discount program. Household income is usually considered as a unit; a household is a group of related or unrelated individuals occupying the same living quarters and sharing expenses. Dependent children living at home (as defined by the IRS) are counted as household members even if they have a job. The income from that type of employment is not included in household revenue. Gross income (before taxes, and other deductions) from the household is considered. A completed Sliding Scale Application and proof of income is required. Income eligibility is reviewed at least annually. PENDLETON COMMUNITY CARE, INC.s Sliding Scale Discount Program offers tiered flat amount discounts on prescription drugs, based upon the reported income and in-line with the annual Federal Poverty Level guidelines. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, PENDLETON COMMUNITY CARE, INC. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as outreach, mammography services, expensive repair and maintenance updates to facilities, some school based health services, etc. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 338 uninsured patients from rationing medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. PENDLETON COMMUNITY CARE, INC. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 10 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, PENDLETON COMMUNITY CARE, INC. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $132,266. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. PENDLETON COMMUNITY CARE, INC. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $832,910 in 2026. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to either take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest rate is currently range between 8%-10% funds that are currently dedicated to supporting medical care, community services, and benefits for employees to retain the workforce. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on PENDLETON COMMUNITY CARE, INC. the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays PENDLETON COMMUNITY CARE, INC. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $144,855. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 12 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Under the current Medicare Prescription Payment Plan (MFP) rebate model, our pharmacy has experienced a significant administrative burden relative to the small number of claims processed. On average, our staff spend approximately one hour per month managing only four prescriptions associated with this program. The time required is driven by multiple manual reconciliation steps across several systems. These steps include: Running bi-monthly reports within the Medicare Facilitator platform Extracting corresponding reports from our pharmacy management software Manually matching the ICN number to the correct prescription using a tracking spreadsheet Logging into Beacon to verify that rebates received are appropriate and accurate Tracking manufacturer credits that are due for rebate processing Communicating with manufacturers to dispute claims that are incorrectly categorized as 340B drugs Manufacturer disputes are particularly challenging. We frequently encounter situations where manufacturers classify medications as 340B solely because the pharmacy recently purchased 340B inventory, despite the fact that our pharmacy maintains two completely separate physical inventories. This results in additional administrative time spent providing clarification and correcting inaccurate rebate determinations. It is important to note that this administrative effort currently applies only to the 10 Medicare drugs subject to the MFP model, for which our pharmacy dispenses approximately 60 prescriptions per month. Even within this limited scope, the reconciliation process requires a disproportionate amount of manual staff time. If a 340B rebate model were expanded to apply to all 340B medications, the operational impact would be substantial. Our pharmacy dispenses approximately 2,184 340B prescriptions per month. Based on the current reconciliation workload (approximately one hour per four prescriptions), this would equate to an estimated 546 hours of additional support staff time per month required solely to manage rebate reconciliation and dispute processes. 13 For community health center pharmacies and other safety-net providers, this level of administrative burden would require significant additional staffing and operational resources. The current process relies heavily on manual reconciliation across multiple systems and frequent manufacturer disputes, making it difficult to scale without creating major operational strain. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion PENDLETON COMMUNITY CARE, INC. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range 14 of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. PENDLETON COMMUNITY CARE, INC. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. PENDLETON COMMUNITY CARE, INC., appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me, JAMIE HUDSON, CEO at jhudson@pcc-nfc.org. Sincerely, Jamie Hudson, CEO PENDLETON COMMUNITY CARE, INC.
HRSA-2026-0001-2185Northern Oswego County Health Services, Inc dba ConnextCare2026-04-20T04:00Z17,677 chars
See attached file(s) Conne2tCare A Community ofCare April 20, 2026 61 Delano Street, Pulaski, New York 13142-1400 Phone: (315) 298-6569 Fax: (315) 298-7488 TDD: 711 www.connextcare.org Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of ConnextCare and the 31,545 patients we serve annually, thank you for the opportunity to comment on HRSA's Request for Information on a potential 3408 rebate pilot. The 3408 program is foundational to our ability to serve the most vulnerable members of our community. Northern Oswego County Health Services, Inc., dba ConnextCare, is a nonprofit 501(c)(3) Federally Qualified Health Center (FQHC) incorporated in 1969. ConnextCare's mission is to provide comprehensive, affordable, and high-quality healthcare and support services to the communities it serves. Our vision is to be an innovative leader in fostering healthy communities, promoting health and well-being, employment, and a strong regional economy. ConnextCare currently operates six health centers, including three with dental services, and nine school-based health centers (SBHCs) across Oswego County. The ConnextCare service area primarily serves Oswego County, as well as portions of Cayuga, Jefferson, Onondaga, and Oneida counties. ConnextCare is recognized as a Level 3 Patient-Centered Medical Home, with Distinction in Behavioral Health Integration. All ConnextCare locations, including School-Based Health Centers (SBHCs), are accredited by The Joint Commission in both Ambulatory Care and Behavioral Health Care and Human Services. These accreditations underscore ConnextCare's unwavering commitment to clinical excellence and quality outcomes. Our current total service area is home to an estimated 652,990 residents, approximately 189,240 (28.9%) of whom live in households with incomes below 200% of the Federal Poverty Level (FPL)1. It is this low-income population, those with incomes below 200% FPL and those who are underserved and uninsured, that comprises our target population. Approximately 16.5% of service area residents live in households with incomes below 100% FPL? The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of over $600k annually for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. 1 US Census American Community Survey (ACS), 2018-2022 US Census ACS, 2018-2022 Say hello to healthy Conne2tCare A Community of Care 61 Delano Street, Pulaski, New York 13142-1400 Phone: (315) 298-6569 Fax: (315) 298-7488 TDD: 711 www.connextcare.org Summary of Recommendations: In short, ConnextCare strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSA's and manufacturers' stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the "standards and procedures that [ ...] govern the approval of manufacturers' rebate plans" must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CH Cs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers "stretch scarce Federal resources as far as possible." A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, through this proposed model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For ConnextCare, a 340B Rebate Model Pilot Program will impact: An estimated 3,712 qualified prescriptions About 3,873 uninsured/patients at 100% and below of the Federal Poverty Guidelines Our ability to deliver dental, SUD, mental health, and school-based health services; support care coordination and case management; strengthen and expand our workforce; and cover losses for patients utilizing sliding-fee services. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients' access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions - including diabetes, hypertension, and obesity- compared to private practices.3 This patient population relies on affordable medications to manage these long- term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. 3 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar,35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Say hello to healthy Conne2tCare A Community ofCare 61 Delano Street, Pulaski, New York 13142-1400 Phone: (315) 298-6569 Fax: (315) 298-7488 TDD: 711 www.connextcare.org B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10- day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate model's complicated requirements, we anticipate needing to hire an additional 2.00 FTE. We estimate the cost to hire additional staff to be around $90,000 per year. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate an additional $12,742 in administrative TPA costs will be passed on to us in order for the TPA to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely - resulting in avoidable harm to patients' health. ConnextCare helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as substance use disorder, dental, school-based health and mental health, including counseling and psychiatry. Say hello to healthy Conne2tCare A Community of Care 61 Delano Street, Pulaski, New York 13142-1400 Phone: (315) 298-6569 Fax: (315) 298-7488 TDD: 711 www.connextcare.org Operating hours and clinic access: The additional costs of a rebate model may require us to reduce our clinic hours or consider the potential reduction of another practice site in our network entirely, which could limit access to care for patients. In 2025, 340B revenue represented approximately 28% of our total revenue; however, escalating manufacturer restrictions drove pharmaceutical costs sharply upward, resulting in a 42% reduction in 340B-related profit. As a result, ConnextCare was forced to take significant actions to stabilize operations and protect its broader primary care network, which resulted in the closure of one of its main health centers. If these trends continue as anticipated under a rebate model, ConnextCare will be forced to consider additional staff reductions and consolidation of neighboring practices, measures that would dramatically limit access to care across our rural communities. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to "advance" CHCs enough rebates to cover the greater of two full package sizes or two months' worth of dispense for each rebate drug. Say hello to healthy Conne2tCare A Community ofCare 61 Delano Street, Pulaski, New York 13142-1400 Phone: (315) 298-6569 Fax: (315) 298-7488 TDD: 711 www.con nextcare.org A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring Bl Ns or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSA's goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion ConnextCare strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New York's primary care safety net and the ability of our low- income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSA's decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nation's safety net. If you have any questions, please contact Tricia Peter Clark at Tclark@connextcare.org. President and CEO Say hello to healthy
HRSA-2026-0001-2186Community health and wellness partners of logan county2026-04-20T04:00Z86,931 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health & Wellness Partners of Logan County, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Community Health & Wellness Partners of Logan County anticipates a loss of $750,000 from entity-owned pharmacy operations and 35% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Since opening in 2014, Community Health & Wellness Partners of Logan County has grown. We now have several locations in Champaign and Logan Counties, including school based health centers. With over 150 team members - like doctors, nurse practitioners, physician assistants, therapists, and case managers - we're proud to be the biggest primary care provider in our area. All our locations are recognized as Primary Care Medical Homes, and we're also accredited by The Joint Commission for both medical and behavioral health. Our team truly cares. From providers to support staff, everyone treats patients with kindness and respect. We listen, we understand, and we treat the whole person - not just the illness. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured 2 patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Community Health & Wellness Partners of Logan County in particular, this means it will impact: 12,797 Patients $1,148,115.00 Pharmacy administrative costs Our ability to provide free prescription delivery to patients. Our ability to offer copay assistance and copay waiver when needed for entity owned pharmacy patients. Our ability to give patients access to clinical pharmacy care with diabetic management and medication management. Expansion of service lines Quality improvement ability IT infrastructure Workforce development Compliance We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Community Health & Wellness Partners of Logan County provided $239,404 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Community Health & Wellness Partners of Logan County anticipates needing $40,560 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Community Health & Wellness Partners of Logan County anticipates an increase of $2,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We anticipate needing at least 1 FTE to meet estimated reporting demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We anticipate additional staffing costs to increase between $40,000 to $120,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 10-15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Community Health & Wellness Partners of Logan County urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,797 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in- house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our pharmacy uses PioneerRx and they do well to integrate und update as needed but are also known for problems with their system when adding in new features or updates. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools around $10,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination 6 For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 11 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 11 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Logan and Champaign Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Currently we help with medication costs first by offering a copay based on the cost of the medication plus a base fee for uninsured or underinsured patients. We also offer copay assistance depending on income and hardship and also waive copays when needed with the help of our 340B program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,800,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $129,000 to purchase these same drugs at the 340B ceiling price. This represents a 1,295% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Community Health & Wellness Partners of Logan County anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, such as our clinical pharmacy diabetic management and medication management we provide. It would also affect our ability to help with copays and medication assistance for patients. Operating Hours: We anticipate needing to reduce our clinic hours by 0 per week, specifically impacting Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Healthcare workers that we need, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 258 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Community Health & Wellness Partners of Logan County asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit 10 limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Community Health & Wellness Partners of Logan County estimates its 2027 Annual Rebate Opportunity Cost to be approximately $640,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 2026 WAC Data: Community Health & Wellness Partners of Logan County estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $157,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to try to increase our credit limit with our wholesaler. This is not a sustainable solution; the interest costs alone are estimated to be $3,000 annuallyfunds that are currently dedicated to prescription delivery, clinical pharmacy management, and community outreach programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Community Health and Wellness Partners of Logan County, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Community Health & Wellness Partners of Logan County urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $280,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. 12 CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Community Health & Wellness Partners of Logan County strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially 13 uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Community Health & Wellness Partners of Logan County believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Community Health & Wellness Partners of Logan County appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tara Bair at tara.bair@chwplc.org . Sincerely, Tara Bair President/CEO April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health & Wellness Partners of Logan County, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Community Health & Wellness Partners of Logan County anticipates a loss of $750,000 from entity-owned pharmacy operations and 35% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Since opening in 2014, Community Health & Wellness Partners of Logan County has grown. We now have several locations in Champaign and Logan Counties, including school based health centers. With over 150 team members - like doctors, nurse practitioners, physician assistants, therapists, and case managers - we're proud to be the biggest primary care provider in our area. All our locations are recognized as Primary Care Medical Homes, and we're also accredited by The Joint Commission for both medical and behavioral health. Our team truly cares. From providers to support staff, everyone treats patients with kindness and respect. We listen, we understand, and we treat the whole person - not just the illness. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Community Health & Wellness Partners of Logan County in particular, this means it will impact: 12,797 Patients $1,148,115.00 Pharmacy administrative costs Our ability to provide free prescription delivery to patients. Our ability to offer copay assistance and copay waiver when needed for entity owned pharmacy patients. Our ability to give patients access to clinical pharmacy care with diabetic management and medication management. Expansion of service lines Quality improvement ability IT infrastructure Workforce development Compliance We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Community Health & Wellness Partners of Logan County provided $239,404 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Community Health & Wellness Partners of Logan County anticipates needing $40,560 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Community Health & Wellness Partners of Logan County anticipates an increase of $2,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate needing at least 1 FTE to meet estimated reporting demands. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We anticipate additional staffing costs to increase between $40,000 to $120,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 10-15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Community Health & Wellness Partners of Logan County urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,797 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Our pharmacy uses PioneerRx and they do well to integrate und update as needed but are also known for problems with their system when adding in new features or updates. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools around $10,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 11 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 11 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Logan and Champaign Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Currently we help with medication costs first by offering a copay based on the cost of the medication plus a base fee for uninsured or underinsured patients. We also offer copay assistance depending on income and hardship and also waive copays when needed with the help of our 340B program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,800,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $129,000 to purchase these same drugs at the 340B ceiling price. This represents a 1,295% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Community Health & Wellness Partners of Logan County anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our clinical pharmacy diabetic management and medication management we provide. It would also affect our ability to help with copays and medication assistance for patients. Operating Hours: We anticipate needing to reduce our clinic hours by 0 per week, specifically impacting Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Healthcare workers that we need, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 258 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Community Health & Wellness Partners of Logan County asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Community Health & Wellness Partners of Logan County estimates its 2027 Annual Rebate Opportunity Cost to be approximately $640,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 2026 WAC Data: Community Health & Wellness Partners of Logan County estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $157,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to try to increase our credit limit with our wholesaler. This is not a sustainable solution; the interest costs alone are estimated to be $3,000 annuallyfunds that are currently dedicated to prescription delivery, clinical pharmacy management, and community outreach programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Community Health and Wellness Partners of Logan County, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Community Health & Wellness Partners of Logan County urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $280,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Community Health & Wellness Partners of Logan County strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Community Health & Wellness Partners of Logan County believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Community Health & Wellness Partners of Logan County appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tara Bair at tara.bair@chwplc.org . Sincerely, Tara Bair President/CEO
HRSA-2026-0001-2187HealthReach Community Health Centers2026-04-20T04:00Z48,288 chars
See attached file(s) April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthReach Community Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing a financial burden on CHCs. HealthReach Community Health Centers is a federally qualified health center with a fifty-one-year history of serving rural communities throughout central and western Maine. Through health centers located in twelve towns with populations ranging from 800 to 3500 residents (Albion, Belgrade, Coopers Mills, Richmond, Strong, Rangeley, Kingfield, Livermore Falls, Madison, Bingham, and Bethel) and one school-based health center in Fairfield, HealthReach serves 26,740 patients annually. Thirty-one percent of HealthReachs patient population is age 65 and older with a significant chronic disease burden. Our organizations provision of integrated services including primary care, behavioral health, and supportive services plays a critical role in enabling rural residents to age in place safely and with dignity. The 340b program supports financially disadvantaged patients who receive assistance via discounted medications. In addition, the savings generated from the 340b program have enabled our organization to expand access to care and enhance services for vulnerable patient populations. Savings generated through the 340B Drug Pricing Program have enabled the development and ongoing support of dedicated triage, medication refill, and care management departments. These services improve timely patient access to care by ensuring clinical concerns are addressed promptly, prescriptions are managed efficiently, and patients receive coordinated support for chronic conditions. By reinvesting 340B savings into these operational areas, the health center has strengthened care continuity, reduced unnecessary hospital utilization, and enhanced the overall patient experienceparticularly for individuals with complex medical needs. Consistent with HRSA guidance, participation in the 340B Drug Pricing Program has helped support the sustainability of our twelve sites in very rural communities by enabling reinvestment in essential infrastructure and strengthening overall financial stability in support of patient care. Patient Impact Most importantly, a 340B rebate model poses a direct threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to medically necessary medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Workforce and Operational Impact Staffing Impact: We anticipate needing 1.0 Additional FTE because of the Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model at a cost of approximately $80,000 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, our organization will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthReach urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate upfront costs to adapt our internal data warehouse and design new internal workflows of approximately $25,000. This will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 26,740 patients, the projected total increase in expenses, including labor, IT, and carrying costsis estimated at $100,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Franklin, Oxford, Somerset, and Kennebec counties with few/no affordable medication options. We already experienced this prospect in early 2026, when several of our contract pharmacies eliminated the 2026 MDPNP selected medications from the 340b program by refusing to fill commercial and Medicare prescriptions with 340b drugs. Over 17 percent of the U.S. population lives in a pharmacy desert already,2 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.3 Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Our contract pharmacies will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.4 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low- 2 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 3 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 4 HRSA FAQ income individuals.5 Our center adjusts the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B6 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.7 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 5 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 6 https://340bpricing.hrsa.gov/ 7 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data for one contract pharmacy, we estimate there would be a 200% increase to purchase these 10 drugs under the proposed rebate model which would increase the upfront capital required for procurement. This increase in costs will have a significant impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. Financial changes associated with the 340B rebate model could influence operational decision-making, including decisions related to service capacity and scope. Financial Impact of Rebate Denials and Delays HealthReach Community Health Centers urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.8 These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that 8 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthReach Community Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthReach believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HealthReach appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please reach out. Sincerely, Constance Coggins President/CEO April 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthReach Community Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing a financial burden on CHCs. HealthReach Community Health Centers is a federally qualified health center with a fifty-one-year history of serving rural communities throughout central and western Maine. Through health centers located in twelve towns with populations ranging from 800 to 3500 residents (Albion, Belgrade, Coopers Mills, Richmond, Strong, Rangeley, Kingfield, Livermore Falls, Madison, Bingham, and Bethel) and one school-based health center in Fairfield, HealthReach serves 26,740 patients annually. Thirty-one percent of HealthReachs patient population is age 65 and older with a significant chronic disease burden. Our organizations provision of integrated services including primary care, behavioral health, and supportive services plays a critical role in enabling rural residents to age in place safely and with dignity. The 340b program supports financially disadvantaged patients who receive assistance via discounted medications. In addition, the savings generated from the 340b program have enabled our organization to expand access to care and enhance services for vulnerable patient populations. Savings generated through the 340B Drug Pricing Program have enabled the development and ongoing support of dedicated triage, medication refill, and care management departments. These services improve timely patient access to care by ensuring clinical concerns are addressed promptly, prescriptions are managed efficiently, and patients receive coordinated support for chronic conditions. By reinvesting 340B savings into these operational areas, the health center has strengthened care continuity, reduced unnecessary hospital utilization, and enhanced the overall patient experienceparticularly for individuals with complex medical needs. Consistent with HRSA guidance, participation in the 340B Drug Pricing Program has helped support the sustainability of our twelve sites in very rural communities by enabling reinvestment in essential infrastructure and strengthening overall financial stability in support of patient care. Patient Impact Most importantly, a 340B rebate model poses a direct threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to medically necessary medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Workforce and Operational Impact Staffing Impact: We anticipate needing 1.0 Additional FTE because of the Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model at a cost of approximately $80,000 per year. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, our organization will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that 15 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthReach urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate upfront costs to adapt our internal data warehouse and design new internal workflows of approximately $25,000. This will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 26,740 patients, the projected total increase in expenses, including labor, IT, and carrying costsis estimated at $100,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Franklin, Oxford, Somerset, and Kennebec counties with few/no affordable medication options. We already experienced this prospect in early 2026, when several of our contract pharmacies eliminated the 2026 MDPNP selected medications from the 340b program by refusing to fill commercial and Medicare prescriptions with 340b drugs. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. Our contract pharmacies will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. Our center adjusts the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data for one contract pharmacy, we estimate there would be a 200% increase to purchase these 10 drugs under the proposed rebate model which would increase the upfront capital required for procurement. This increase in costs will have a significant impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. Financial changes associated with the 340B rebate model could influence operational decision-making, including decisions related to service capacity and scope. Financial Impact of Rebate Denials and Delays HealthReach Community Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthReach Community Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthReach believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HealthReach appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please reach out. Sincerely, Constance Coggins President/CEO
HRSA-2026-0001-2188Memorial Health System2026-04-20T04:00Z11,727 chars
See attached file(s). April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Memorial Health System, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Also, our wholesaler agreements are built based on historical purchasing practices. Shifting to an increased WAC purchasing volume will skew our ratios and will lead to a reduction in discounts from the wholesalers. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We expect that a rebate model will require Memorial to divert current staff to perform claims processing, data collection/submission, data reconciliation, rebate tracking, audit support, and denial challenges. Over time, as the number of 340B rebate-eligible drugs grows, we expect to incur salary and benefit costs for at least two new full-time employee (FTE) roles to handle the persistent reporting and tracking demands. These estimates would change significantly if manufacturers were permitted to select from various IT platforms. Managing different IT platforms would likely force additional manual review and crosswalks, multiple submission workflows, and/or expanded requirements from third- party administrators (TPAs) currently utilized by covered entities, thereby increasing administrative burden and operational costs. In addition to internal staffing needs, the complexity of a rebate model would require increased reliance on external vendors and TPAs to manage data interfaces, reporting, and reconciliationcreating additional ongoing costs. Vendor fees would increase as the complexity of the rebate model grows and as the number of medications subject to rebate processing expands. In addition to the administrative, staffing, and system related burdens, implementation of a 340B Rebate Model Pilot Program would create several additional costs for Memorial. These include legal review of new contracts and compliance requirements, expanded staff training, and the need for consulting services to interpret evolving guidance and ensure accurate rebate processing. All of these activities would generate both one-time costs during implementation and recurring costs as program requirements change or expand. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. All of these rebate costs will reduce resources available for patient care. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Our organization has attempted to comply with the non-duplication provisions of the MDPNP, however, deciphering the fractured data has been extremely challenging. Due to the lack of data visibility within the Beacon/MTF platform, it is not realistically possible for our organization to routinely identify these claims with accuracy. The platform does not provide the level of claim-level transparency or reporting needed to determine, on an ongoing basis, which dispenses may have been excluded from MFP access. As a result, any attempt to identify these claims requires manual review, cross-referencing multiple systems, and reconciling incomplete dataan effort that demands several additional hours of administrative work on a recurring basis. The current data limitations make compliance burdensome and introduce significant operational and financial risk. A new 340B rebate model would be more burdensome and would exacerbate the issues we are experiencing, as we would be required to submit rebate data for all of our 340B claims across all payers and uses of the rebate drugs. Thank you for considering our comments. Sincerely, Memorial Health System
HRSA-2026-0001-2189Montana Consortium for Urban Indian Health2026-04-20T04:00Z7,868 chars
HRSA, On behalf of the Montana Consortium for Urban Indian Health, I am submitting comment on the 340 Rebate Model Pilot Program. I have attached the document. Thanks, Jason Smith Executive Director Montana Consortium for Urban Indian Health MONTANA CONSORTIUM FOR Urban Indian Health April 20, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via: https://www.requlations.ciov RE: HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, On behalf of Montana Consortium for Urban Indian Health (MCUIH), we hereby submit our written comments and recommendations in response to the Health Resources and Services Administration's (HRSA) February 17, 2026, Federal Register notice on HRSA's 340B Rebate Model Pilot Program (hereinafter "340B Rebate Program" or "the Program").1 Background Montana Consortium for Urban Indian Health (MCUIH) is an association of UlOs in Montana. The Consortium promotes the health and well-being of American Indians and Alaskan Natives in urban areas. MCUIH is dedicated to supporting Urban Indian Organizations (UlOs) in their mission to deliver healthcare services to these communities across Montana. We provide training, technical assistance, capacity building, and collaborative opportunities to support UlOs as they provide culturally relevant healthcare. We also focus on educating and informing elected officials, government agencies, and other stakeholders on challenges and opportunities in the healthcare field impacting Urban Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026), https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate- model-pilot-program. Butte Native Wellness Center I Billings Urban Indian Health and Wellness Center I All Nations Health Center Helena Indian Alliance Indian Family Health Clinic 7 West 61h Ave. Suite 4E, Helena, MT 59601 I (406) 410-5167 Indian populations and advocates for changes in public policy to improve healthcare outcomes. Comment MCUIH appreciates the opportunity to comment on HRSA's 340B Rebate Program and thanks HRSA for providing respondents more time to submit written comments by extending the written comment deadline.2 As a general matter, we are concerned that the Program will cause significant administrative and financial burdens for Indian Health Care Providers (IHCPs)- which includes UlOs- and barriers to access to vital medications for American Indian and Alaska Native patients. The United States has a trust obligation to provide "health services to maintain and improve the health or American Indian and Alaska Native people.' The United States owes this trust obligation to American Indian and Alaska Native people no matter where they live4 and contracts with UlOs to fulfill this trust responsibility in urban areas.5 There are currently 25 UlOs that participate in the 340B program and changes to the operation of the program could have significant impacts on their ability to serve their communities. Our members do participate in the program. Accordingly, we make the following comments and requests in response to the February 17, 2026, Federal Register notice on the 340B Rebate Program. Exempt IHCPs from HRSA's 340B Rebate Program Meaningfully engage with UlOs through formal Urban Confer or UIO listening session Exempt IHCPs from the 340B Rebate Program We request an exemption for Indian Health Care Providers from HRSA's 340B Rebate Program. This is also a Tribal request that has been made by both the Department of Health and Human Services (HHS) Secretary's Tribal Advisory Committee (STAC) and the Centers for Medicaid and Medicare Services (CMS) Tribal Technical Advisory Group. We strongly support this request. Under the 340B Rebate Program, participating UlOs would be required to purchase drugs at full retail price and receive a rebate later. Requiring this financial expense while waiting for manufacturer rebates will severely 'Request for Information: 340B Rebate Model Pilot Program Extension, 91 Fed. Reg. 9632 (Feb. 26, 2026), httbs://www.federalregistergovidocuments/2026/02/26/2026-03838/request-for-information-340b-rebate- model-pilot-program-extension. 3 25 U.S.C. 1601(1). 4 S. Rep. No. 100-508, at 25 (1988) (stating that "The responsibility for the provision of health care ... does not end at the borders of an Indian reservation. Rather, government relocation policies which designated certain urban areas as relocation centers for Indians, have in many instances forced Indian people who did not which to leave their reservations to relocate in urban areas, and the responsibility forthe provision of health care services follows them there."). 5 See 25 U.S.C. 1652. compromise their ability to purchase necessary medications and sustain their current level of care. Even temporary delays in rebate payments may significantly strain UIO operating budgets. Additionally, the 340B Rebate Program increases the administrative burden by changing the reimbursement and claims process, and complicates the accounting procedures for UlOs, which disrupts staff capacity and the organization's mission. Increased financial and operational pressures may affect the sustainability of our pharmacy operations and limit the ability to stock or dispense high-cost medications, jeopardizing access to medications for our American Indian and Alaska Native patients. The federal government owes a trust obligation to "ensure the highest possible health status for Indians and urban Indians and to provide all resources necessary to effect that policy."6 In light of this unique federal trust obligation, it is imperative that IHCPs be explicitly exempted from the proposed 340B Rebate Program. Without an exemption, the administrative and financial burden will impede providers' ability to deliver on the trust obligation. Meaningfully Engage with UlOs We request HRSA engage meaningfully with UlOs on the Program through formal Urban Confer or UIO listening session. The best practice for engagement with UlOs and UIO leaders is through hosting Urban Confer sessions or UIO listening sessions. An Urban Confer is "an open and free exchange of information and opinions that leads to mutual understanding and comprehension; and emphasizes trust, respect, and shared responsibility."' The IHS currently has a robust policy8 and we encourage HRSA to work with its colleagues at IHS to organize and facilitate a meeting with UlOs. By conferring with us, HRSA will be able to more fully understand the impacts of the Program on us and the urban American Indian and Alaska Native patients we serve. We reiterate our strong support of Tribal sovereignty and the government-to- government relationship between Tribal Nations and the United States. We wish to make clear that we request further engagement with UlOs only to provide HRSA with the information and technical expertise HRSA needs to better serve urban American Indian and Alaska Native communities, and that development of any programming impacting Indian Country can only take place in accordance with the wishes of Tribes. Conclusion 5 25 U.S.C. 1602(1). ' 25 U.S.C. 1660d. 'INDIAN HEALTH SERV., Conferring with Urban Indian Organizations, in INDIAN HEALTH MANUAL (2023), https://www.ihs.gov/ihm/pc/part-5/p5c26/. Sin Jason Smith Executive Director Montana Consortium for Urban Indian Health The Montana Consortium for Urban Indian Health again appreciates the opportunity to comment on HRSA's 340B Rebate Program. We reiterate the importance of exempting IHCPs- which inclu s UlOs- from 40B Rebate Program,
HRSA-2026-0001-2190(no commenter metadata)2026-04-20T04:00Z42,635 chars
See Attached o, Spectra- April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Spectra Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Spectra Health anticipates losses upon implementation of the rebate model to be equal to or exceed current 340B savings at our contract pharmacies and in clinic dispensing due to the administrative hurdles of manual reconciliation. Spectra Health may not own and operate an entity owned pharmacy due to limitations of state law. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Spectra Health utilizes 340B savings to support our community health worker positions and programming, as well as offering an integrated model of care with behavioral health consultants available during appointments to provide brief interventions at no cost to the patient. Our ability to support and sustain these efforts will be compromised by the addition of further financial strains on the health center. Furthermore, in the event administrative costs exceed 340B savings, the health center may be required to discontinue participating in the 340B program, which will impact Spectra Health's 6,202 patients directly. This includes limiting access to services, and removing access to discounts including access to 340B priced epinephrine and insulin mandated to participating entities by Executive Order #14273. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Spectra Health in particular, this means it will impact: 6,202 patients served annually Approximate 75% increase in annual administrative costs The ability to offer unreimbursed integrated care model including behavioral health consultants and CHW's. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.111I/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://wm.%.ahaiournals.org/doi/pdf/10.116 I /circulationaha. 123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-IA e-collectinsduh-national-surx evdrug-use-and-healthinational-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Spectra Health provided $292,807 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer services will decrease significantly under a rebate model. Staffing Impact: Spectra Health anticipates needing 1.75 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Spectra Health anticipates a minimum increase of $14,250 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 4 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Spectra Health estimates a need for the equivalent of an additional 1.75 FTEs to support the rebate model program. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Spectra Health estimates that the cost of FTEs dedicated to the program will grow by $115,015 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. A minimum 50 hours each year will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Spectra Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $5,000 annually will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6,202 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $38,530 annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 6 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 6 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Grand Forks, North Dakota area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs 9 Vulnerability Index Approach to Ident4 Pharrnacv Deserts and Keystone Pharrnacies I Pharmacy and Clinical Pharrnacology JAMA Network Open I JAMA Network 10 https://wWw.healthaffairs.org/doi/abs/ 0. 377/hithaff.2024.00 92?iournalCode=h1thaff I I Internal NACHC survey data 6 and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Spectra Health complies with these requirements and community health workers often assist patients in connecting to additional community resources to obtain coverage and access regardless of their slide and nominal fees. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. '2 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bohc.hrsa.eov/compliance/cornpliance- manual/chapter9# tbotnote l 0 7 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected mhttps://enlivenhealth.co/hlog/vear-end-business-health-check-key-metries-everv-pharmacv-ox -pharmacv-owner-shouid-review 15 https://340bpricing.hrsa.gov/ 16 hups://www.cms.govitiles/zip/selected-cirug-list-negotiated-prices-also-knowa-maximum-thir-prices-statutezip.zip 8 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost from $35,000 to $105,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $38,172 to purchase these same drugs at the 340B ceiling price. This represents a 100-300% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Spectra Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such Community Health Worker positions, who work closely with our patients to navigate these difficult systems. Operating Hours: We anticipate needing to reduce our clinic hours at our rural location by 10 hours per week, specifically impacting access to care in areas with already limited resources. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staf For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our uninsured patients from rationing their vital medications such as insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at 9 WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Spectra Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other maj or revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Spectra Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $5,243 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize a line of credit. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Spectra Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Spectra Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://ww w. federalrecister.gov/documents/2025/08/01/2025-14619/340b-program-notice-appl icationTrocess-for-the-340b- rebate-model-pi lot-program 10 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 11 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 12 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Spectra Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Spectra Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Spectra Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Caroline Guo at Caroline.Guo@SpectraHealth.org. Sincerely, Mara Jiran Spectra Ilealth 13
HRSA-2026-0001-2191North Carolina Community Health Center Association2026-04-20T04:00Z29,170 chars
The North Carolina Community Health Center Association (NCCHCA) is pleased to offer comment on the Request for Information on the 340B Rebate Model Pilot Program. Please see the attached for NCCHCA's full comments. 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of North Carolinas 42 Community Health Center (CHC) organizations and the 798,826 unique patients they serve each year, the North Carolina Community Health Center Association (NCCHCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, NCCHCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments NCCHCA explains: A. The importance of 340B savings to North Carolina CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their nearly 800,000 underserved patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services on which CHCs low-income patients rely CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provide these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. Savings generated from 340B not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. According to a December 2025 survey of 20 North Carolina CHCs, the most common programs and services supported by 340B savings were: Sliding fee discounts and care for the uninsured Medication affordability programs and pharmacy services Dental care Mental health & substance use care Enabling Services (e.g. Community Health Workers, Health Education, Outreach and Enrollment, Transportation) 340B functions as a gap-filler for these services and supports that would not be sustainable otherwise. For example, consider this testimony from a Community Health Center serving the western part of the state about how 340B has allowed them to grow access to desperately needed dental services in rural communities even while the service operates at a loss: [340B] plays a vital role in pretty much every service line we have. Our organization has invested millions over the last few years in growing community based medicine (mobile) and dental services (mobile and brick and mortar). It could take our dental program 5-10 years to break even, and we 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 could not support it without 340B. We stopped keeping a dental wait list when it reached 1000 patients which occurred about 9 months into starting the program in 2023. We now operate over 20 operatories and hope to add another 4...in the next year. 340B has allowed us to absorb the cost of being a startup model and to grow and serve without requiring specific reimbursement from insurances or patients. Consider another example from a Community Health Center serving rural communities of Eastern North Carolina: [Our health center reinvests] revenues generated from the 340B program to: Establish a flat fee structure for patients without insurance on our sliding fee scale program; this is a single, upfront fee that patients pay to be seen by our medical or behavioral health providers, including labs and in-house specialty services we provide in the areas of gynecology, general surgery, and rheumatology. Keep patient fees low. Our organization is proud of the fact that we have not increased the patient fees for our Sliding Fee Discount Program since 2010 even through the pandemic and its aftermath striving to be a constant resource within our communities. Completely offset the cost of labs for patients without insurance infected with Hepatitis C, allowing for a full workup of the individual for treatment and access to medications through the patient assistance programs. Treatments for both HIV and Hepatitis C are incredibly costly, but critical for the health of individuals and communities affected. Bolster service offerings for persons living with HIV or AIDS to include eligibility services and access to a certified HIV Pharmacist for adherence education Expand transportation services to all of our medical facilities and dental facility and provide pharmacy medication delivery services, all free of charge to individuals. Expand medication assisted treatment services for individuals with opioid use disorder to all of our medical facilities while keeping the cost of these services low for patients. Add radiology services (including in-house mammography) at two of our medical locations Sustain our dental services in spite of profitability issues related to payer mix Expand pharmacy services to provide medication adherence strategies to help individuals take their medications on a regular, prescribed basis. This may be as simple as arranging all of their chronic medications to be filled on the same day each month or as sophisticated as packaging medications (with the help of pharmacy automation) into a strip system specific to the time and day they take their medications. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cash flow, administrative, and other costs for CHCs Unsustainable cashflow burdens. In late 2025, NCCHCA collaborated with the Community Health Centers in our state to review, analyze, and project impacts from the 340B Drug Discount Program Rebate Model Pilot 4 outlined in the Federal Register Notice 2025-14998. A large sample of health centers in our state5 conducted calculations to project the financial impact of the pilot on their health centers based on their historical trends in purchasing, stocking, dispensing, and utilizing of the eligible drugs under the pilot. These CHCs compared what they would spend at existing 340B drug discounts to meet current patient needs against what they would spend up front at the Wholesale Acquisition Cost (WAC). Data from these CHCs show that the original 340B rebate pilot would have increased health centers upfront costs for pilot medications by a whopping 3596 percent on average, though projections ranged as high as a 5986% increase in costs. In the aggregate, the 20 health centers in our sample estimated that the annualized upfront cost to purchase these drugs would increase from just under $3 million at 340B discount prices to over $86 million under the pilot. Whereas the cost of these 10 drugs at 340B discounted prices accounts for less than one percent of the average health center organizations overall total costs across all service lines, these increased upfront drug costs compare to an average 16 percent of overall organizational costs. Smaller health centers in rural communities could see a disproportionate impact relative to their budget; the relative cost of purchasing these pilot drugs at wholesale prices for one small rural North Carolina CHC would consume 46 percent of their annual revenues. This significant upfront cost would cut into CHCs scarce resources, requiring them to seek credit, reduce their other services, or scale back their pharmacy stock and services for these pilot drugs. When surveyed again in December 2025, 20 health centers responded to share how they were planning to manage the increase in drug acquisition costs: 60% would have to use their financial reserves 40% would reduce other spending to absorb the increase in their operational budget* 30% would need to use credit or take out a line of credit or loan *Most of these respondents indicated theyd be forced to lay off or terminate staff to make space in their budget to afford the upfront increase in drug costs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by North Carolinas CHCs will provide details on these financing needs. Also, CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. 5 Twenty (20) CHC organizations generated cost estimates, which NCCHCA reviewed and vetted prior to compiling for a larger aggregate analysis. Though our state has a total of 42 CHC organizations, the sample in our data set is compelling. The 20 CHCs in our data set account for 69 percent of all health center patients in North Carolina. They include small, mid-size, and large health centers when measured by patients served and organizational costs. 5 Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Medicaid billing burdens & confusion: FQHCs will also experience administrative burden in navigating how to bill their respective Medicaid programs and prevent statutorily prohibited duplicate discounts. In North Carolina, while formal guidance was not released in advance of the rebate pilot launch, we understood that in order to seek the 340B rebate and comply with NC Medicaid billing guidelines, FQHCs would be forced to bill at the 340B ceiling price, despite the fact that the Medicaid State Plan requires reimbursement at the Actual Acquisition Cost (AAC), based on the price file made available through the rebate model platform, and identify the drug as 340B using claims modifiers, despite the fact that the drug was acquired at Wholesale Acquisition Cost (WAC) and may be denied a rebate. Some health centers report challenges getting their pharmacy software systems to utilize the price file at the point of service, risking significant manual work and administrative burden. Some FQHCs have explored whether it would be more worthwhile to simply bill the Medicaid agency at WAC and not seek the rebate, which in itself would require more complex and possibly unworkable pharmacy software programming, and in turn would drive up North Carolina Medicaids upfront spending on outpatient medications. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as discussed in the prior section). Stopping dispensing rebate drugs: Last fall, many contract pharmacies including both Walgreens and Walmart publicly announced they that would also carve out rebate drugs from 340B once the rebate model pilot launched in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. 6 Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have already faced, including but not limited to, in their 340B programs. For example: Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. CHCs have not received an inflation-adjustment to their base grants in over a decade. These changes have already had an impact on the sustainability of services that CHCs provide. According to a 2026 survey of North Carolina CHCs, as a result of 340B restrictions: 62% of FQHCs using contract pharmacies have seen reductions in access, including site closures, reduced operating hours, reduction in pharmacy sites for their patients, freezing expansions of new service lines, or freezing expansions of new locations 49% of all FQHCs faced negative workforce impacts, including layoffs and position eliminations, hiring freezes, or foregone workforce retention incentives 42% of FQHCs using contract pharmacies have experienced negative impacts to their patients, including changing medications prescribed, increasing sliding fee costs, or serving fewer total patients overall 69% of FQHCs using contract pharmacies have had to divert resources away from care toward administrative requirements (such IT costs, hire staff, repurpose staff, hire consultants) D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as health centers would disproportionately suffer negative impacts: 7 Compared to other covered entity types, CHCs 340B purchases are disproportionately accounted for by drugs subject to Medicare price negotiation, which are commonly prescribed Part D medications that CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. Compared to other covered entity types, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cash flow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cash flow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last fall fell far short of this commitment, as they failed to account for most of the rebate- related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 8 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026). F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication6 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: 6 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 9 Avoid cash flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. We also trust the agency will evaluate less burdensome alternatives, such as a neutral clearinghouse model, that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Brendan Riley at rileyb@ncchca.org. Sincerely, Crystal Shank President & CEO North Carolina Community Health Center Association 10 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which should be borne by the manufacturer (per the language of the Summer 2025 FRN) Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies and ensuring their compliance. (This may also lead to higher fees from contract pharmacies) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2192Preston-Taylor Community Health Centers, Inc.2026-04-20T04:00Z45,793 chars
See attached file(s) Preston-Jay/or Commandy -Wealth Center3, ADMINSTRATIVE OFFICE 25 W. BLUEMONT STREET PO BOX 399 GRAFTON, WEST VIRGINIA 26354 TELEPHONE (304) 265-0312 FAX mai 265-0314 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Preston-Taylor Community Health Centers, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Preston-Taylor Community Health Centers, Inc. anticipates a loss of $3.1M from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Revenues generated through the 340B program allow Preston-Taylor Community Health Centers, Inc. to offer the essential services in our rural communities of Preston, Taylor, Tucker and Grant Counties. WV is the best at being the worst in regards to health outcomes. Savings generated through 340B help stretch limited resources. This allows the health center to reinvest in essential services, staff, and programs without increasing the financial burden on patients. PTCHC would be forced to eliminate services such as dental and behavioral health, reduce staff, and clinic hours without the savings from the 340B program. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Preston-Taylor Community Health Centers, Inc. in particular, this means it will impact: Our organization filled 66,439 340b prescriptions in 2025 and served 11,292 patients according to 2025 UDS reports. Current admin costs for your 340B program consist of $1.3M Approximately $8.5M was generated in Pharmacy revenue in 2025 allowing PTCHC to offer services in rural communities and balance the bottom line. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 2 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the IvIDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of conununity health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et ai. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. ' Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatrnent with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://wvvw.samhsa.govidata/data-we-collectinsduh-national-survevdrug-use-and-healthinational-releases 3 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fiieur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. HI. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign stAff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Preston-Taylor Community Health Centers, Inc. provided $720K in sliding fee discounts, provided through discounted medications and medical services. We 4 anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Preston-Taylor Community Health Centers, Inc. anticipates needing 1 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Preston-Taylor Community Health Centers, Inc. anticipates an increase of $816K of costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims 7 Preston-Taylor Community Health Centers, Inc estimated the need to 1 full-time staff member to meet the demands of the additional tracking and record keeping. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestem CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Estimates for our organization will require at minimum an additional 32 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Preston-Taylor Community Health Centers, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $35K will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 11,292 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at annually $975k annually. The In-House Pharmacv: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customimtion to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Integrating the EHR with the pharmacy management system and implementing a rebate tracking program requires a coordinated approach that includes secure system interfaces (typically using HL7 or FHIR), accurate data mapping and validation, and configuration of a system to track eligible prescriptions and generate compliant reports. This integration must also ensure adherence to regulatory requirements such as HIPAA and 340B, while aligning staff workflows and providing adequate training to support adoption and data accuracy. The estimated initial investment ranges from approximately $65,000 to $250,000+, depending on system complexity and number of interfaces, with ongoing annual costs of $20,000 to $85,000+ for maintenance, licensing, compliance, and support. Overall, this investment supports improved data integrity, operational efficiency, and optimized rebate capture. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 19 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across two different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in North Central WV, particularly Preston, Taylor, Grant and Tucker counties with no affordable medication 6 options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology I JAMA Network Open l JAMA Network 10 https://wwwhealthaffairs.orgidoi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff " Internal NACHC survey data 7 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. The Sliding Fee Discount Program at Preston-Taylor Community Health Center (PTCHC) plays a critical role in making medications affordable for patients by adjusting costs based on each individual's income and household size. This program ensures that uninsured and underinsured patients can access necessary prescriptions at reduced prices, removing financial barriers to treatment. By aligning medication costs with a patient's ability to pay, PTCHC helps improve adherence to prescribed therapies, supports better health outcomes, and ensures that all patients regardless of financial statushave access to essential medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days)." Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnotel 0 14https://enlivenhealth. co/blogNear-end-business-health-check-kev-metrics-every-phamutcy-owner-should-review 8 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing,hrsa.gov/ 16 httin://www.cms.aovitilesizip/setected-drug-list-negotiated-rinces-also-known-maximum-tair-nnces-statutezio.ziv 9 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Preston-Taylor Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as primary care office hours at 6 of our medical sites. Closing school based health sites, reducing outreach activities and care coordination, and limiting dental service center hours. Operating Hours: We anticipate needing to reduce our clinic hours at each of our office by 8 hours per week, specifically impacting all of our locations and limited resources available to our communities which will result in higher emergency room visits. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund care coordinators and social workers directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 888 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Preston-Taylor Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "fmancial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are 10 submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Preston-Taylor Community Health Centers, Inc estimates its 2027 Annual Rebate Opportunity Cost to be approximately This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Preston-Taylor Community Health Centers, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $1.5M. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $1.5M annuallyfunds that are currently dedicated to all services provides, ie dental, behavioral health, school based health services, and staffing. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Preston-Taylor Community Health Centers, Inc. Preston-Taylor Community Health Centers, Inc. the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Preston-Taylor Community Health Centers, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions." If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a significant loss in a revenue. Our CHC cannot absorb, as it represents a direct extraction of resources from 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.govidocuments/2025/08/01/2025-14619/340b-program-notice-avnlication-process-for-the-340b- rebate-model-pilot-program 11 our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 12 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate modeL Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the stsff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicthd prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 13 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Preston-Taylor Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up- front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Preston-Taylor Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Preston-Taylor Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, June Gri Preston-Taylor Community Health Centers, Inc. 14
HRSA-2026-0001-2193New River Health Association2026-04-20T04:00Z44,928 chars
See attached file(s) New River HEALTH 497 Mall Road, Oak Hill, WV 25901 Phone: 304-469-2905 Fax: 304-465-5486 newriverhea lthwv. com Making Healthcare Happen ... April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of New River Health Assoiation, I would like to thank the Health Resources and Services Adrninistration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: New River Health anticipates a loss of $858,000 to $4 million from entity- owned pharmacy operations over the three years and an additional 20% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. New River Health Association directs a broad range of community health and outreach programs including but not limited to clinical training of health profession students, home-based education for families with young children and people with chronic disease, assisting patients with black lung screening and the application process for black lung benefits, and group activities (yoga, walking, diabetes support, self-management). New River Health's outreach services help participants build on their strengths to improve or maintain health. The Parents as Teachers (PAT) Program is a mother-to-mother home visiting program addressing pregnancy needs and parenting attitudes so that families become healthier, and babies can grow to be healthy, vigorous, and curious preschoolers. The PAT program is a nationally recognized model and has received numerous awards in recent years. In the beginning, New River was located in Fayette County and employed less than 5 employees. With over 40 years of continued dedication to providing quality, accessible and affordable healthcare, New River has expanded into Raleigh and Nicholas Counties and to date employs over 190 employees. The mission of New River Health is "to promote the health, human and economic development, and well-being of individuals and our community." To this day, the mission of New River Health continues to drive the management and staff to provide quality, affordable and accessible health care to the residents of Fayette, Raleigh, and Nicholas Counties. To date, New River has established four Main Clinical Sites, eight School-Based Health Centers, four Pharmacies, a Pulmonary Rehabilitation Center, and a Medication Assisted Treatment (MAT) Program, three Dental Clinics, and is now offering Vision Services at the New River Health Oak Hill Site. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Prograrn is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase rnedications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For New River Health in particular, this means it will impact: 91,300 340B transactions and 23,829 unique patients Administrative costs for New River's 340B program in CY 2025 is expected to be approximately $445,000 New River's dental and vision programs are subsidized 100% from 340B revenue. Combined, these two programs are projected to lose over $400,000 from operations this fiscal year. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 2 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and EliquisiD are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMC1D: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatrnent with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. httos:liwww.ahajournals,orgidoi/pdf/10.1161/circulationaha.123.065748 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 3 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted rnedical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. hups://www.samhsa.vovidataidata-we-collectinsduh-national-survevdrim-use-ancl-healthinational-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol, 2022 Feb 23;13:773999. doi: 10.3389/fheur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: New River Health provided $1,110,595 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: New River Health anticipates needing 1.5 additional FTEs as a Result of the Rebate Model to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, New River Health anticipates an increase of $252,000 in Anticipated Additional Costs Related to Rebate Model for external support vendors. These vendors may include 340B consultants, legal counsel, prograrn coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 New River Health expects to hire 1 new FT, and allocate 0.5 of an existing FTE to meet the demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 0ne midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. New River estimates to hire one new additional staff member at a cost of approximately $75,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. New River estimates an additional 60 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug Internal NACHC assessment (99 responses). 8 Ibid. 5 manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. New River Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 23,829 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $500,000 annually. The In-House Pharmacv: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 14 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 20 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Nicholas, Fayette, and Raleigh Counties West Virginia with no affordable medication options. Over 17 percent of 6 the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has rnechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacolo2v jAMA Network Open I JAMA Network IMps://www.healthaffairs.orizidoilahs/ 0.1377/hlthaff.2024.00 92?journa lCodehlthatT II Intemal NACHC survey data 7 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Through New River Health's pharmacy sliding fee program, we were able adjust off over $315,000 in pharmaceutical costs to our patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports frorn CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphe.hrsa.nov/complianceicompliance- rn ual/chapter9itfootnotelO "huLs://enlivenheolth.colbloerear-enti-business-health-check-kev-melrics-e -erv-pharmacv-owner-shoulthreview 8 MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 15 hilps://340bprieina.hrsa.gov/ 16 https://www.ems.g,ov/filesizipisciected-drue-list-ne2;otiated-prices-also-known-maximum-fair-i:.rices-statutezip.zip 9 Based on our organization's data, we estimate it would cost $4,300,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2,615,842 to purchase these same drugs at the 340B ceiling price. This represents a 64% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, New River Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our in-house dental and vision services that provides basic dental and vision services for those individuals who are uninsured or are covered by Medicaid. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 3,315 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. New River Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to rernain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, New 10 River Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 1,521751. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. New River Health's DATA: New River Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $ 357,798. Should the rebate program continue into 2027 and 2028, New River's monthly spend would increase $632,467 and $672,769, respectively. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on New River Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays New River Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of $857,996. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalreeister. govIdoctnnents/2025/08/01/2025-14619/340h-pro uam-notice-ap p lication-process-for-the-3401)- rebate-model-pilot- proaram 11 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated frorn the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 12 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and rnaintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion New River Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally 13 impossible to provide the sliding fee scale and steeply discounted medications required by law. New River Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. New River Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me directly at JohnR.Schultz@nrhawv.org. Sincerely, J R. Schultz hief Executive Officer ew River Health Association 14
HRSA-2026-0001-2194Franklin Primary Health Center, Inc.2026-04-20T04:00Z45,725 chars
See attached file(s) FRANKLIN PRIMARY HEALTH CENTER INC "Our Primary Concern Is You." P. O. Box 2048 Mobile, AL 36652 251-434-8177 www.franklinprimary.org April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Franklin Primary Health Center, Inc. (FPHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. FPHC was established in 1975 by a group of concerned citizens, is a private not-for-profit Joint Commission accredited Public Health Service Section 330 funded federally qualified health center (FQHC) serving Mobile, Choctaw, Escambia, Monroe, Conecuh, and Baldwin Counties in Alabama. FPHC is a trusted FQHC committed to delivering high quality accessible, and affordable healthcare to individuals and families, regardless of their ability to pay. FPHC provides comprehensive, patient-centered services, including primary care, dental care, behavioral health, women's health, pediatrics, and chronic disease management, with a strong emphasis on preventative care and health education. FPHC strives to reduce health disparities and improve the overall well-being of underserved populations across Southwest Alabama. Our dedicated team is passionate about treating the whole person, addressing both medical and social determinants of health to create healthier communities. Franklin Medical Mall - Aiello/Buskey Medical Center Maysville Medical Center West Mobile Family Medical H.E. Savage Memorial Center Prevention, Education & Counseling Loxley Family Medical Center South Baldwin Family Health Center J.R. Thomas Wellness & Fitness Center Gilbertown Medical & Dental Center Franklin Medical & Dental Express North Baldwin Family Health Center Brewton Family Dental Center Hadley Medical Center Franklin Brewton Family Medical Center Dr. Albert Thomas Medical Center Frisco City Family Medical Center Evergreen Family Medical Center Franklin's Wellness Smiles & Vision Express Franklin Evergreen Family Health Center Charles White Family Health Center I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For FPHC in particular, this means it will impact: .70,775 prescriptions across 39,095 health center patients that we serve. *Current admin costs of $2,077,592 for our 340B program. *Savings generated through the 340B program used to sustain clinical services in rural and underserved communities, support and expand patient care such as mammography and behavioral health, and safety net services including: under-compensated and uncompensated health care, patient transportation; social service assistance, community health workers, case managers, healthcare enrollment workers, care coordination, and outreach and education. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic 2 conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concemed that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. yraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. htti)N: \k.ilta ' ournakon4 dui pill I 0.1161 circulationaha. I 23.005748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. htt wyk .santh:,a.2O\ data data-wc-ea cct nsduh_nadnak.,,r,,,,,lruc_usc-und_hca l th natiunal _reicaNcs 5 Hauser RA. et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year. Open-Label Extension Study. Front Neurol. 2022 Feh 23:13:773999. doi: I 0.3389/fneur.2022.773999. PMID: 35280262: PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: FPHC provided $4,544,416 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 4 Staffing Impact: FPHC anticipates needing .75 additional FTEs or $50,700 increase in costs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, FPHC anticipates an increase of $75,600 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' FPHC estimates needing an additional .75 FTE as a result of a Rebate Model Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. FPHC estimates $126,300 for additional FTE and external vendor costs as a result of the Rebate Model. FPHC estimates incurring $2,732,601 in increased upfront annual drug spend in 2026; $4,194,740 in 2027; and $7,608,899 in 2028. FPHC estimates a financial impact of rebate denials and loss of purchase discounts of $416,592 in 2026, $649,264 in 2027, and $1,218,589 in 2028. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. FPHC estimates incurring an additional 30 hours per week in increased administrative burden. CHCs will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. FPHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Chan2es Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 39,095 patients, the total projected increase in expensesincluding labor, IT, and carrying costs-is estimated at $126,300 annually. The In-House Pharmao : The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools estimated at $75,600. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 30 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 10 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 93 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Southwest Alabama with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." 9 Vffinerabillh Appi , ;;.i..h Idenut\ Nunn-tat.. Dt.iskirti- dud viidone Pharmacies alai l'hatinaeolou. JAM A Networil, Open JAM A Neitv:olik w\iiiislicalthiiiffairs.ort.i, dui Jibs 10.1 177 hlthdlii2021.00192'!journalCodc hlthaft I I Internal NACHC survey data 6 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. 7 A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. FPHC reduces prescription drug costs through the 340B Drug Pricing Program, generic drug prescribing, and offering in-house pharmacies, while expanding patient access to affordable medications through insurance enrollment and patient assistance programs. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).' Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. Int )s: b Mc.hrsa corn )lianec coin diancc- manual cha mer9fr fihunc)tel 0 mhtt enli enhcalth.co, bloo ,Lar-und-businLs:hcalth-chcek-kev-meifies-evcryl pharnmev-m+. ner-slmuld-lcvio 8 CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%)-operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost an additional $2,732,601 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $3,111,995 to purchase these same drugs at the 340B ceiling price. This represents an 88% increase in upfront capital required for procurement. Furthermore, estimated increased upfront annual drug spend is $4,194,740 in 2027 and $7,608,899 in 2028. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, FPHC anticipates needing to reduce: 15 htOs: '34 Oh wicin,,.hrsu. NA \V \\A:rim. yv\ p'scket,211-drivIi:si-ne.otiated- Nices-also-known-maximum-tiiir-onces-statutifi 9 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as enabling services, behavioral health, dental care, outreach, and preventative programs. Operating Hours: We anticipate needing to reduce our clinic hours by 8 hours per week, specifically impacting our weekend hours, which are the only times our working-class seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a full-time Community Health Worker who assist patients with navigating care access or a Behavioral Health Consultant, who prevent an increase wait times for mental health appointments, or a Case Manager who assists with management of patients frequenting the ER and hospital. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 15,247 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. FPHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B program to "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, FPHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $649,264. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 10 FPHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $223,950 in 2026, $342,834 in 2027, and $617,919 in 2028. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $109,000 annuallyfunds that are currently dedicated to our homeless program, mobile mammography, and growing our school-based program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on FPHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays FPHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.' If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $136,630. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https: ww\kcdcralregister.govidoeurnents 2025'08,0 I 2025-14619 3406-progrwn-notke-appl on-pweess- for-the-340b- rehate-model-oi lot- inwrant 11 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 12 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion FPHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in I f infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. FPHC believes 13 that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. FPHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Wilfred Brown, Chief Pharmacy Officer at Wilfied.Browpkt2franklinprimary.org. Charles Wilde, CEO Franklin Primary Health Center, Inc. 14
HRSA-2026-0001-2195ChristianaCare2026-04-20T04:00Z13,729 chars
See attached file ChristianaCare, one of the nations leading not-for-profit health care delivery systems headquartered in Wilmington, Delaware, appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSAs) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). As a committed participant in the 340B Drug Discount Program (the 340B Program), ChristianaCare is dedicated to transparency, accountability, and responsible stewardship of the 340B Program, and we support HRSAs efforts to strengthen program oversight consistent with statutory intent. 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See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Indian Health Board of Minneapolis, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Indian Health Board of Minneapolis is a community health center established in 1971 to serve the urban American Indian population of Minneapolis. Our main clinic is located at 1315 East 24th Street, Minneapolis, MN 55404 in the Phillips neighborhood of Minneapolis. The entire Phillips community is a federally designated Medically Underserved Area. The mission of the Indian Health Board of Minneapolis (IHB) is to ensure access to quality healthcare services for American Indian and other people in the community and to promote health education and wellness. 2 Our services are focused on American Indians because they experience some of the greatest health disparities including high rates of diabetes and heart disease. In addition, poverty rates for children under 18 in Minnesota are four times as high for American Indian children as for white children and rates of insurance are lower. Our current programs include primary medical and dental care, mental health, recovery services and community health services. Our medical programs emphasize health promotion (immunizations, well-child care, lead surveillance, and community outreach), prenatal care, and management and prevention of chronic diseases such as diabetes and hypertension. Our clinical laboratory is capable of providing on-site screening and diagnostic testing, and coordinating comprehensive testing. Our dental clinic provides adult and pediatric general dentistry. The dental staff emphasizes preventive dental care and offers preventive dental care education. Our Counseling and Support Clinic provides professional therapeutic services including individual, family, and group psychotherapy, and psychological assessments and testing. Our Recovery Services offers adult and adolescent intensive outpatient programs. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Indian Health Board of Minneapolis in particular, this means it will impact: the sustainability and growth of our 340B program which has a goal of ensuring access to life-saving medications for our underserved patients and to help maintain crucial clinical services. Within 2025, our Walgreens contract pharmacy dispensed 435 prescriptions to patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the 3 affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 4 Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: The Indian Health Board of Minneapolis provided sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: The Indian Health Board of Minneapolis anticipates needing additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, The Indian Health Board of Minneapolis anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Indian Health Board of Minneapolis urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across numerous different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Hennepin County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Indian Health Board of Minneapolis anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, including our various community health programs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund clinical staff who work directly to provide quality care to our patients. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Indian Health Board of Minneapolis asserts that taking out a loan or an extended line of credit to fund drug procurement fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial 10 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution and the alternative would be to utilize funds that are currently dedicated to offering quality health programs, providing access to critical services (OB care, clinical pharmacy, dietetics, diabetes education, etc). Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on CHC's the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Indian Health Board of Minneapolis urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 12 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Indian Health Board of Minneapolis strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B 13 discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Indian Health Board of Minneapolis believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Indian Health Board of Minneapolis appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kate Hemker (kate.hemker@indianhealthboard.com). Sincerely, Patrick Rock, MD Indian Health Board of Minneapolis
HRSA-2026-0001-2197Richmond University Medical Center2026-04-20T04:00Z11,449 chars
Please see attached letter stating what the Rebate Model would mean to a small covered entitiy. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Richmond University Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Richmond University Medical Center that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Richmond University Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Richmond University Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Richmond University Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Richmond University Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Richmond University Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our hospital that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Richmond University Medical Center does not currently have the staff needed to comply with a Rebate Program. The projected additional workload of five hours per week appears to be significantly underestimated for our facility, given that we manage three TPAs, each with its own distinct data feed. Based on our assessment, supporting the current pilot requirements would necessitate, at a minimum, the addition of one full-time employee (FTE). Furthermore, the anticipated expansion of the rebate model in 2027 and 2028 would likely require incremental increases in dedicated FTEs on an annual basis. In addition, this role demands a comprehensive understanding of the 340B program, as the responsibilities extend well beyond routine data submission. Consideration must also be given to the associated costs of recruiting, advertising, hiring, and training qualified candidates. Given existing budgetary constraints, our pharmacy staff is already operating at capacity, making the addition of new personnel unfeasible. Reassigning current staff would be the only alternative; however, this approach introduces potential patient safety risks and is not a sustainable solution. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Richmond University Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any transition to a rebate-based mechanism would require significant system modifications and associated costs. New data feeds would need to be developed, validated, and continuously monitored for each of our three TPAs, as well as our split-billing vendor, adding substantial technical and operational complexity. Additionally, these perpetually active feeds would require dedicated staffing for building, testing, and ongoing maintenance. As a result, the shift to a rebate model represents not only a one-time implementation effort but a sustained need for additional FTE resources. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Richmond University Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Upon review of the financial impact on key service lines such as oncology and behavioral health, any delay in receiving discounts would hinder our ability to maintain timely care delivery. Even rebates issued within 10 days would create enough cash flow strain to force adjustments in ordering to stay within weekly budget constraints. This delay could also affect our ability to meet wholesaler payment obligations, increasing the risk of credit holds and supply disruptions. For a smaller hospital such as ours, these gaps in reimbursement pose a significant risk to medication access and, ultimately, patient care. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Richmond University Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. As previously discussed, delayed discounts would necessitate changes to critical service lines such as oncology and behavioral health. Physicians may be forced to consider alternative therapies for patients stable on long-term regimens or extend treatment intervals to manage costs. In some cases, transferring care to other facilities may be considered, though this is not always feasible given patient-specific and logistical constraints. These impacts would extend beyond these two service lines to others, including our emergency department, which was recently renovated with support from the 340B program. Without timely access to these program benefits as intended, both patient care delivery and the feasibility of future capital investments would be significantly compromised. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.' Respectfiffly, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will or reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Richmond University Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called "pilot" form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Richmond University Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome altematives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Richmond University Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Richmond University Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Nicholas Galeno 340B Compliance Manager Richmond University Medical Center 355 Bard Ave Staten Island, NY 10310
HRSA-2026-0001-2198(no commenter metadata)2026-04-20T04:00Z84,640 chars
See attached file April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Professionals Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report a loss of from entity-owned pharmacy operations and an estimated 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Valley Professionals Community Health Center provides comprehensive and integrated health care for all individuals and families while promoting health education opportunities for the community, students, and health care professionals. We provide a full range of services, including primary care, behavioral health, dental care, and patient resource support, all conveniently offered under one roof. This integrated approach allows us to treat the whole person, making it easier for patients to access the care they need, when they need it. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Valley Professionals Community Health Center in particular, this means it will impact: 30,294 patients served Increased administrative costs for the 340B program Almost $1 million in Sliding Fee Scale Assistance, Dental Assistance, and Patient Assistance. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Valley Professionals Community Health Center provided $790,678 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Valley Professionals Community Health Center anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Valley Professionals Community Health Center anticipates an increase of $95,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Valley Professionals Community Health Center estimates an additional 1.5 FTEs will be needed at an estimated cost of $150,000 annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours each month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Valley Professionals Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $60,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 30,294 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $450,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools estimated at $25,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with over 50 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across over 50 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Vermillion, Parke, and Vigo counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Valley Professionals Community Health Center currently provides $790,678 savings annually to our patients. We utilize IT tools and third party vendors to manage this program. The rebate model 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 will require adjustment to our processes which will result in additional costs to our program that assists patients in need. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, to purchase these 10 drugs under the proposed rebate model, we estimate a 400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Valley Professionals Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as school based program that provides care to rural school districts and our patient assistance programs. Operating Hours: We anticipate needing to reduce our clinic hours by 10 per week, specifically impacting our evening and weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,575 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Valley Professionals Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Valley Professionals Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by an estimated $80,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Valley Professionals Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays 11 Valley Professionals Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in an estimated net annual loss of $250,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. 13 Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Valley Professionals Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Valley Professionals Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Valley Professionals Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kristi Williams at kwilliams@vpchc.org. Sincerely, Terry J. Warren Valley Professionals Community Health Center April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Valley Professionals Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report a loss of from entity-owned pharmacy operations and an estimated 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Valley Professionals Community Health Center provides comprehensive and integrated health care for all individuals and families while promoting health education opportunities for the community, students, and health care professionals. We provide a full range of services, including primary care, behavioral health, dental care, and patient resource support, all conveniently offered under one roof. This integrated approach allows us to treat the whole person, making it easier for patients to access the care they need, when they need it. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Valley Professionals Community Health Center in particular, this means it will impact: 30,294 patients served Increased administrative costs for the 340B program Almost $1 million in Sliding Fee Scale Assistance, Dental Assistance, and Patient Assistance. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Valley Professionals Community Health Center provided $790,678 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Valley Professionals Community Health Center anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Valley Professionals Community Health Center anticipates an increase of $95,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Valley Professionals Community Health Center estimates an additional 1.5 FTEs will be needed at an estimated cost of $150,000 annually. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours each month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Valley Professionals Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $60,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 30,294 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $450,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools estimated at $25,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with over 50 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across over 50 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Vermillion, Parke, and Vigo counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Valley Professionals Community Health Center currently provides $790,678 savings annually to our patients. We utilize IT tools and third party vendors to manage this program. The rebate model will require adjustment to our processes which will result in additional costs to our program that assists patients in need. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, to purchase these 10 drugs under the proposed rebate model, we estimate a 400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Valley Professionals Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as school based program that provides care to rural school districts and our patient assistance programs. Operating Hours: We anticipate needing to reduce our clinic hours by 10 per week, specifically impacting our evening and weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,575 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Valley Professionals Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Valley Professionals Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by an estimated $80,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Valley Professionals Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Valley Professionals Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in an estimated net annual loss of $250,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Valley Professionals Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Valley Professionals Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Valley Professionals Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kristi Williams at kwilliams@vpchc.org. Sincerely, Terry J. Warren Valley Professionals Community Health Center
HRSA-2026-0001-2199University of Maryland Medical System2026-04-20T04:00Z25,426 chars
University of Maryland Medical System submits the attached comment regarding HRSA-2026-03042. April 20, 2026 VIA REGULATIONS.GOV Docket No. HRSA-2026-03042 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Parklawn Building Room 13N188 Rockville, MD 20857 Re: Comment of 340B Covered Entity Hospitals on the Health Resources and Services Administrations Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026) Dear Administrator Engels: The University of Maryland Medical System (UMMS) along with its constituent covered entity hospitals respectfully submits this response to the Health Resources and Services Administrations recent request for information concerning its proposal to implement a 340B rebate model pilot program. 91 Fed. Reg. 7287 (Feb. 17, 2026) (the RFI). UMMS appreciates the opportunity to provide the agency with information and feedback concerning its proposal. UMMS is a private, non-profit academic health system focused on serving the health care needs of patients in Maryland. UMMS has four covered entity hospitals in its academic health system including the University of Maryland Medical Center, Maryland General Hospital, d/b/a University of Maryland Medical Center Midtown Campus, Dimensions Health Corporation, d/b/a University of Maryland Capital Region Medical Center and James Lawrence Kernan Hospital, d/b/a University of Maryland Orthopaedic and Rehabilitation Institute. The University of Maryland Medical Center is the flagship academic medical center at the heart of UMMS and includes the 789-bed downtown Baltimore campus. The medical staff comprises nearly 1,200 attending physicians who are faculty members at the University of Maryland School of Medicine, as well as 900 residents and fellows in all medical specialties. Maryland General hospital includes a 112-bed midtown campus one mile north of University of Maryland Medical Center. University of Maryland Capital Region Medical Center is a state-of-the-art acute care teaching hospital supporting Prince Georges County and the surrounding areas. The Capital Region Medical Center was designed from the ground up for safety and patient experience and offers services including a Level II trauma center, emergency medicine, a designated stroke center, and advanced surgical services. University of Maryland Rehabilitation and Orthopaedic Institute is the largest inpatient rehabilitation hospital and provider of rehabilitation services in the State of Maryland. Like nearly all covered entities, UMMS relies heavily on the 340B program to support its ability to provide quality care to countless patients as part of Americas healthcare safety net. Recognizing the critical role that hospitals providing significant amounts of uncompensated and undercompensated care play in the health of millions of Americans, Congress created the 340B Drug Pricing Program to prevent manufacturers rising prescription drug prices from reduc[ing] the level of services and the number of individuals that these hospitals and clinics are able to provide with the same level of resources. H.R. Rep. 102-384, pt. 2, at 11 (1992). On a high level, the statute requires drug manufacturers who wish to participate in the Federal Medicare and Medicaid programs to agree to sell their drugs at a discount to safety-net hospitals. These 340B discounts are necessary to allow hospitals to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Id. at 12. April 20, 2026 In the last few years, manufacturers have sought to minimize or eliminate their side of the 340B bargain. Though the 340B statute requires them to offer each covered entity outpatient drugs for purchase at or below the applicable ceiling price (42 U.S.C. 256b(a)(1)), manufacturers have increasingly sought to impose their own conditions on covered entities access to 340B drugs above and beyond those recognized by HRSA. They now seek even further control over the program through rebate programs designed to allow manufacturers to pick and choose which dispenses they will honor. In the RFI, HRSA specifically requested comments on guardrails and procedures concerning rebate denials. 91 Fed. Reg. at 7290. There are good legal and policy reasons why HRSA should not abandon the discount model under which the 340B program has operated for more than three decades. However, if HRSA does intend to pilot or eventually fully permit some rebate models, it is critical that the agency implement proper controls and procedures to ensure that covered entities continue to receive the discounts to which they are entitled. UMMS urges HRSA to implement strict limitations on rebate denials and streamlined, expedient administrative appeals processes for the adjudication of objections to rebate denials. These fundamentals are necessary to safeguard the 340B program and to ensure HRSA maintains its congressionally mandated role as its overseer. A. HRSA must strictly limit the bases for rebate denials. Built into HRSAs RFI is the assumption that a rebate program necessarily would enable manufacturers to deny claims from covered entities. But the best structure for any rebate programand the only one consistent with Congresss design for the 340B statutewould require manufacturers to honor every properly submitted claim1 and then to use existing statutory mechanisms to recover any rebates they claim were improper. If, however, HRSA does decide to partially delegate its adjudicatory responsibilities over 340B discounts to manufacturers, it must clearly and strictly define the narrow set of cases in which a substantive (as opposed to procedural) denial could ever be appropriate. 1. Manufacturers have been explicit that their interest in converting their historical discount programs into rebate programs stems from a desire to provide fewer 340B drugs to covered entities at discounted rates. They have justified that desire through oblique references to concerns about abuses of the 340B program by covered entities. manufacturer resort to self-help is fundamentally incompatible with the text and structure of the 340B statute, which specifies the tools available to manufacturers and covered entities for resolving disputes and designates HRSA as the overseer of the program. Instead, just as manufacturers cannot deny discounts to covered entities on purportedly substantive grounds, they should not be able to deny rebates either. The 340B statute contains specific safeguards to prevent waste, fraud, and abuse. The statute prohibits duplicate discounts or rebates, which precludes any prescription from benefitting both from a discount under 340B and from a Medicaid rebate. 42 U.S.C. 256b(a)(5)(A). It further prohibits the res[ale] or . . . transfer of drugs to any person who is not a patient of the [covered] entitya practice known as diversion. Id. 256b(a)(5)(B). To ensure compliance and transparency, Section 340B allows the Secretary and the manufacturer to audit a covered entitys records. 42 U.S.C. 256b(a)(5)(C). Such audits must occur at the Secretarys or the manufacturers expense. Id. If a covered entity violates these requirements, the manufacturer can recover from the covered entity an amount equal to the improper discount. Id. 256b(a)(5)(D). In 2010, Congress strengthened the 340B program as part of the Patient Protection and Affordable Care Act (ACA). Pub. L. No. 111-148, Title VII, subtitle B, 124 Stat. 119, 821 (2010). In particular, Congress added language providing that participating manufacturers shall . . . offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price. 42 U.S.C. 1 As discussed below, HRSA should carefully review proposed rebate procedures to ensure that they allow covered entities a reasonable opportunity to submit claims in a reasonable format. Just as manufacturers cannot use substantive claims denials to shrink the 340B program, they cannot use constructive denials through procedures that are literally or practically impossible for covered entities to navigate. April 20, 2026 256b(a)(1). This language made clear that 340B discounts were mandatory in every instance. Indeed, HRSA has made explicit that Section 340B leaves no room for manufacturers to limit[] any covered entitys ability to purchase covered outpatient drugs at or below the 340B ceiling price. 42 C.F.R. 10.21(a)(1); see also 340B Drug Pricing Program; Administrative Dispute Resolution Regulation, 89 Fed. Reg. 28,643, 28,649 (Apr. 19, 2024). At the same time, Congress created (and directed HRSA to implement) a new administrative dispute resolution (ADR) system to serve as the exclusive forum for 340B-related disputes between manufacturers and covered entities. 42 U.S.C. 256b(d)(3). As the Eighth Circuit recently observed, the 340B statute creates a regime where [w]hen payment, pricing, diversion, or discount disputes arise between manufacturers and covered entities, 340B mandates parties first go through HHS's dispute resolution process to resolve the issue. PhRMA v. McClain, 95 F.4th 1136, 1142 (8th Cir. 2024). This straightforward statutory schemein which all disputes between covered entities and manufacturers about discounts are channeled into the ADR processdoes not allow manufacturers to deny rebates on substantive grounds.2 But that is plainly what they intend to do, given their purported concerns with alleged violations of the 340B statute by covered entities. If manufacturers believe that a covered entitys submission provides evidence of a statutory violation, Congress has already specified the only path availableAstra makes clear that self-help enforcement or attempts to circumvent these statutory procedures are categorically barred. Astra USA, 563 U.S. at 121. Indeed, HRSAs regulations already suggest that manufacturers have no authority to deny 340B discounts or rebates for any reason. In the agencys civil monetary penalties rule, HRSA has defined an instance of overcharging to be any order for a covered outpatient drug, by NDC, which results in a covered entity paying more than the ceiling price. 42 C.F.R. 10.11(b). And an instance of overcharging may occur at the time of initial purchase or later, due to the failure or refusal to refund or credit a covered entity. Id. 10.11(b)(4). In adopting the rule, HRSA made explicit that manufacturers cannot take enforcement of the 340B statute into their own hands. Manufacturers asked HRSA to includ[e] as an exemption from being considered an overcharge . . . when a manufacturer acted on credible evidence that a covered entity is engaged in diversion of 340B drugs. 82 Fed. Reg. 1210, 1223 (Jan. 5, 2017). These manufacturers suggested that if a manufacturer has evidence a covered entity is improperly diverting a drug, it should be able to charge the covered entity a price above the 340B ceiling price. Id. HHS flatly rejected this proposal. The agency explained that unilaterally overcharging a covered entity based upon suspicion of diversion is not warranted under the statutory language. Id. Under HHSs reading of the statute, [m]anufacturers cannot condition the sale of a 340B drug at the 340B ceiling price because they have concerns or specific evidence of possible non-compliance by a covered entity. Id. And HHS expanded this conclusion to sweep in duplicate discounts as well. Id. Instead, manufacturers with compliance concerns were required to use the regular channels to resolve their disputes after providing the discounts. The agency reiterated this point, rejecting again the specific request that HRSA exempt from documented refusals [a] manufacturers failure to provide the 340B ceiling price to a covered entity that has violated the prohibition against diversion or duplicate discounting. Id. at 1226. HHS dismissed the notion a manufacturer could consider not selling a 340B drug at the 340B ceiling price to a covered entity based on possible noncompliance with program requirements. Id. And it refused manufacturers attempt to limit eligible covered entities to those in compliance with the duplicate discount and diversion prohibitions. Id. at 1212. All these conclusions apply with equal force to proposed rebate models. 2 This conclusion does not necessarily foreclose denials on procedural groundsfor example, if a manufacturer required claims to be submitted within a reasonable amount of time (consistent with payor timely-filing periods) and a covered entity failed to comply with that timeline. Additionally, though UMMS submits manufacturer demands for claims data independently violate the 340B statute, a manufacturers denial of a requested rebate because the covered entity requestor did not include all required information in its claim would be procedural rather than substantive. April 20, 2026 HRSAs initial proposal for the pilot rebate accorded with the agencys longstanding stance against manufacturers unilateral policing of the 340B program. See 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, 90 Fed. Reg. 38,165 (Aug. 7, 2025). One requirement for admission to the program was that plans needed to ensure that 340B rebates are not denied based on compliance concerns with diversion or Medicaid duplicate discounts ... and should provide for rationale and specific documentation for reasons claims are denied. Id. at 38,166. If manufacturers had concerns regarding diversion or Medicaid duplicate discounts, HRSA required the manufacturer to report those concerns to HRSA for enforcement evaluation or utilize the 340B statutory mechanisms, such as audits and administrative dispute resolution (ADR), for addressing such issues. Id. It has thus been HRSAs consistent position that manufacturers may not co-opt the agencys enforcement authority by denying discounts based on suspicions (or even evidence) of noncompliance. That position is correct. The Supreme Court has explained that the ACAs amendments demonstrate that Congress placed the Secretary (acting through her designate, HRSA) in control of 340Bs drug-price prescriptions. Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110, 114 (2011). That control could not be maintained were potentially thousands if manufacturers were able to implement their own idiosyncratic requirements and enforce them by denying rebates to covered entities. Id. Congresss creation of enforcement mechanisms, channeling of disputes into the ADR process, and insistence that manufacturers bear the cost of audits would be rendered meaningless if 340B [manufacturers] could overcome those obstacles by unilaterally imposing private limitations on rebates. Id. at 118. HRSA should notand indeed cannotallow manufacturers to arrogate enforcement authority to themselves by granting them unilateral authority to pick and choose which claims they will honor. 2. If HRSA does choose to allow manufacturers to deny properly documented and procedurally compliant claimsagain, it should notit is critical that the agency strictly and explicitly prescribe the limited set of cases in which denials are permitted. Congress entrusted HRSA with the responsibility of implementing and safeguarding the 340B program. Allowing manufacturers to implement their own requirements based on their own interpretations of the statute and regulations would cut HRSA out of the picture and threaten the viability of the program and the covered entities it was designed to benefit. Importantly, manufacturers must not be permitted to deny claims based on concerns about eligibility or diversion. HRSA has explained this in the civil monetary penalty rulemaking, noting that 340B covered entities are listed on the 340B public database, and those listed are entitled to the 340B ceiling price. 82 Fed. Reg. at 1222; accord id. at 1226. And in the more recent ADR rulemaking, HHS agreed that manufacturers should not be able to recover discounts based on claims related to a covered entitys eligibility, reserving determinations about eligibility to HRSA through its enforcement authority. 89 Fed. Reg. at 28,649. Congress tasked HRSA with creating and implementing a website containing information concerning covered entities, verifying the information on the website, and establishing a single, universal, and standardized identification system by which each covered entity site can be identified by manufacturers, distributors, covered entities, and the Secretary for purposes of facilitating the ordering, purchasing, and delivery of covered outpatient drugs. 42 U.S.C. 256b(d)(2)(B)(i)-(iv). Allowing manufacturers to second-guess HRSAs determinations about which sites are eligible for 340B purchases would enable manufacturers to artificially limit the 340B program beyond the parameters HRSA has already determined. It would also open the door for manufacturers to apply their own restrictive definition of key statutory and regulatory phrases such as patients, even when those interpretations contradict the guidelines HRSA has promulgated. As described above, manufacturers have no authority under the statute to make such determinations in this context. To the extent HRSA permits manufacturers to deny rebates based on alleged violations of the prohibition against duplicate discounts, the agency should provide careful guardrails. First, HRSA should make abundantly clear that the statutory prohibition against duplicate discounts or rebates prohibits only the application of both Medicaid rebates and 340B discounts to the same drug purchase. 42 U.S.C. (a)(5)(A)(i). The statute does not prohibit covered entities from receiving multiple discounts from other sources, such as from drug wholesalers. Second, HRSA should limit denials to circumstances in which April 20, 2026 the Medicaid Exclusion File (MEF) conclusively demonstrates an instance of duplicate discounting. Congress directed HRSA to establish a mechanism to prevent duplicate discounting, which resulted in the creation of the MEF. Id. 256b(a)(5)(A)(ii). Covered entities are required to keep the MEF updated and accurate. If manufacturers are permitted to make their own discretionary judgments about when duplicate discounts are likely to occur, they will usurp HRSAs assigned statutory role. Finally, no matter how HRSA decides to treat manufacturers denials, the agency must carefully review proposals to ensure that manufacturers cannot effectively deny claims through their procedures. In particular, manufacturers should not be permitted to create procedures so byzantine, onerous, or time- limited as to create practical obstacles to covered entities access to rebates. And manufacturers must not be permitted to disguise substantive requirements as procedural or informational onesfor example, manufacturers cannot require covered entities to prove eligibility or compliance with statutory requirements beyond the mechanisms that HRSA has established. B. If HRSA allows rebate denials outside of the ADR process, it should implement streamlined and expedient processes for challenges. For as long as the 340B program has existed, HRSA has required drug manufacturers to provide 340B discounts at the time of sale. Am. Hospital Assn v. Kennedy, --- F. Supp. 3d ---, 2025 WL 3754193, at *2 (D. Me. 2025) (AHA); see Section 602 Guidance, 58 Fed. Reg. 27,289, 28,291-92 (May 7, 1993). Under this system, covered entities are guaranteed their statutory discounts, and if HRSA or manufacturers suspect noncompliance then covered entities keep those discounts unless and until noncompliance is established. As numerous commenters explained in response to HRSAs August 2025 model pilot program announcement, covered entities have engendered serious reliance interests on receiving these up-front discounts. AHA, 2026 WL 3754193, at *6 (noting that HRSA conceded covered entities interests after decades of industry reliance were significant). The impact on covered entities from shifting models is a crucial aspect of the problem that HRSA must address in any pilot rebate program. Id. at *7. Because switching to a rebate model would flip the basic assumptions under which the 340B program has operated from the beginning, HRSA should design procedures and safeguards to minimize the risks and costs associated with the change. Principally, the agency should retain the default presumption that covered entities receive 340B rebates or discounts while disputes concerning those rebates are adjudicated. The fundamental premise behind the 340B program is that, to participate in the extremely lucrative Medicare and Medicaid programs, profitable, stable drug manufacturers must provide discounts to safety-net hospitals, which are predominantly nonprofit entities providing care for the nations poorest and most vulnerable individuals. Because covered entities frequently rely on 340B discounts to remain operational, reversing the normal order and allowing manufacturers to withhold rebates for any claim they allege is invalid or noncompliant would risk hospitals long-term viability. AHA, 2025 WL 3754193, at *7. Depriving covered entities of contested rebates would also incentivize manufacturers to over-deny claims and would exacerbate the cost of floating the full price of covered drugs until 340B entities receive their rebate by adding uncertainty and delay to the receipt of a statutory benefit. In designing a system for covered entities to challenge denials, HRSA should thus ensure that whenever a covered entity disputes the denial the rebate must still be paid until the challenge is adjudicated. At the same time, HRSA should create a streamlined and expedited process for resolving disputes. One potential implementation is as follows: As discussed above (and as HRSA has explained), manufacturers should be required to thoroughly document their bases for denying any claims. When a manufacturer denies a claim, it should then provide a pre-defined window of at least 30 days in which covered entities can dispute the denial. April 20, 2026 Upon receipt of the covered entitys notice of dispute, the manufacturer should immediately provide the disputed rebate. The manufacturer may then reverse its initial decision within seven days; if it does not, it must transmit the notice of dispute and the initial documentation of its decision (including the covered entitys claim documentation) to OPA. OPA should then review the denial. If OPA determines that the propriety of the denial turns on disputed law or disputed facts, it should immediately refer the matter to the ADR process. If OPA determines either that the denial was appropriate or inappropriate as a matter of law, it can resolve the claim immediately. The procedure described above has the advantage of consistency with the 340B statutes channeling of disputes between covered entities and manufacturers into the ADR processthe forum in which HRSA and Congress categorically intended such disputes would be resolved. Adjudicating disputes about rebates through the ADR process is beneficial for manufacturers. Many manufacturers have complained about the cost of auditing covered entities. Because HRSA has required manufacturers to perform an audit prior to initiating ADR proceedings to recover allegedly improper discounts, the audit process has limited the utility of the ADR process for that purpose. See 42 U.S.C. 256b(d)(3)(B)(iv); 89 Fed. Reg. at 28,644. But that requirement applies only to ADR proceedings initiated by manufacturers against covered entities. Alternatively, HRSA could interpret the undefined term audit to be satisfied by the manufacturers inspection of the covered entitys documentary submissions in support of its rebate request. In either event, this streamlined pathway would provide manufacturers with easier access to recover targeted, allegedly improper rebates without incurring the expense or delay associated with a full-scale audit. Finally, whatever appeals procedures HRSA adopts, it should clarify that those procedures are not severable from the permission to operate rebate models more broadly. HRSA (by delegation from the HHS Secretary) enjoys discretion to approve or disapprove rebate modelsit is well within that discretion to operate models only if certain appellate procedures can be observed. 42 U.S.C. 256b(a)(1). Non- severability is necessary to ensure that manufacturers cannot challenge the requirements and safeguards HRSA has implemented but still continue operating a rebate program. Otherwise, an unfavorable judicial decision could well result in manufacturers effecting a complete takeover of the 340B program. * * * UMMS greatly appreciates the opportunity to provide input into HRSAs consideration of whether and how to implement a rebate pilot program. It urges the agency to proceed with caution, and with Section 340Bs overarching goal of supporting safety-net hospitals and the patients they care for. Sincerely, Andre Harvin Chief Pharmacy Officer
HRSA-2026-0001-2200National Alliance of Healthcare Purchaser Coalitions2026-04-20T04:00Z10,631 chars
See attached file(s) April 20, 2026 Submitted electronically via www.regulations.gov Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Comments in Response to Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, On behalf of the National Alliance of Healthcare Purchaser Coalitions (National Alliance), we submit the following comments in response to the U.S. Department of Health and Human Services (the Department) Request for Information: 340B Rebate Model Pilot Program published in the Federal Register on February 17, 2026. For more than 30 years, the National Alliance has brought together business coalitions and their employer and purchaser members to drive high-quality healthcare that enhances patient experience, promotes health equity, and improves outcomes while lowering costs. Our members represent public and private sectors, nonprofits, and labor unions that provide health benefits to over 90 million Americansmore than half of the employer-sponsored insurance marketand invest over $850 billion annually. As an advocate for employers and purchasers across the country, the National Alliance believes in the critical mission of the 340B Drug Pricing Program to increase access to more affordable medications for low-income patients and communities. We strongly support Congress original intent when it established the program in 1992 and recognize its importance today for the numerous health centers and core safety-net hospitals that serve as responsible stewards of program funds. These institutions use these resources to expand care and services across the nation, benefiting a broad spectrum of Americans in need. However, thanks to minimal guardrails and a low threshold for program qualification that has not changed in over 30 years, the 340B program has gone well past that intent. Today, 340B operates as a government-sanctioned arbitrage scheme utilized by many of the largest and most wealthy hospital systems in the country, rather than the support for patients and low-income it was intended to be. As a representative of employers and purchasers, we are worried that 340B and its distortive effects on the market are increasing costs for business leaders and working families across the country. The 340B program allows participating entities to buy low and sell high, purchasing medications at steep discounts and then charging employer sponsored plans full price. This system creates significant distortive effects across the market including health system consolidation, 1 expansion of pharmacy networks (often in wealthy areas),2 and incentives to prescribe higher-priced medications.3 Because manufacturers cannot provide both a 340B discount to an entity and a commercial rebate on the same drug, prescriptions filled through 340B entities to commercially insured patients do not generate rebates for employer health plans. As a result, employers and their plans lose access to rebates they would otherwise rely on to offset rising prescription drug spending. This increases costs for employer-sponsored coverage and often results in increased premiums for working families. However, today, employers often have limited or zero visibility into the extent of these lost rebates. The National Alliance believes that a transparent, rebate-based model, like the one proposed by HRSA, that gives employers claims-level data on their 340B exposure could be a first step towards mitigating the programs cost impact on working families. Transparency Should Extend To Plan Sponsors The RFI repeatedly highlights transparency, data collection, and reporting as potential benefits of a rebate-based model. From an employer perspective, transparency should not be limited to reporting between manufacturers and covered entities. Instead, HRSA should ensure that the pilot program produces meaningful, actionable information that enables employers and other purchasers to better understand how the program operates and how it affects the commercial healthcare market. Research and market analysis increasingly suggest that 340B dynamics can influence prescribing patterns, site-of-care decisions, and the flow of drug rebates within the commercial market. The Minnesota Department of Healths landmark 340B Covered Entity Report, the most sophisticated analysis quantifying the scale of the 340B program, estimates that nearly half of 340B revenue comes via the commercial insurance market. 4 A study published in Health Affairs found that 340B program eligibility was associated with a 22.9 percentage point reduction in biosimilar adoption between 2017 and 2019.5 Another analysis found that between 25% and 56% of hospital systems only list prices for the innovator product, and very few offer all available biosimilars.6 At the same time, employers frequently lack the data needed to determine when a drug dispensed to a covered employee or dependent is associated with a 340B transaction, whether a manufacturer rebate has been triggered or denied, or how those transactions affect overall healthcare spending. HRSA should therefore ensure that transparency resulting from the pilot program extends to employers and other purchasers through standardized reporting and data sharing. Access to this information would help employers evaluate whether financial incentives are shaping utilization patterns and drug selection in ways that affect the cost and value of care for 1 Ten Things to Know About Consolidation in Health Care Provider Markets | KFF 2 Contract Pharmacy Trends May Help Inform 340B Reform Debate | Avalere Health Advisory 3 The Role Of Financial Incentives In Biosimilar Uptake In Medicare: Evidence From The 340B Program | Health Affairs 4 https://www.health.state.mn.us/data/340b/docs/2025report.pdf 5 The Role Of Financial Incentives In Biosimilar Uptake In Medicare: Evidence From The 340B Program | Health Affairs 6 https://communityoncology.org/hospital-340b-drug-profits-report-feb-2021/ workers and families. Clear and actionable data about where they are losing access to PBM- negotiated rebates can be used by employers to influence plan design, mitigate the impact of 340B on the health plan, and help employers to meet their fiduciary obligations as plan sponsors. Public Reporting and Data Transparency (Question 6(b)) Q. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? As HRSA considers what manufacturer data should be shared, the National Alliance urges the Department to ensure that this data is shared with all stakeholders, including employers and other purchashers. Regular, quarterly, reporting would help employers and other stakeholders better understand how the 340B program operates in practice. The National Alliance believes the following data would provide useful insight into the functioning of the 340B program and the rebate model and their impact on plan sponsors: Claim submission date 340B ID NDC-11 Purchased Quantity Unit WAC price Unit 340B ceiling price Unit MFP Rebate amount Rebate Date Paid Rejection Reason Transparency Across Stakeholders (Question 7(b)(iii)) Q. Explain whether a rebate model would increase price transparency across stakeholders. The National Alliance believes a rebate model has the potential to increase price transparency across stakeholders, but only if the model is paired with clear data reporting requirements and provides access to program information across stakeholders. The current structure of the 340B Program provides limited, if not zero, visibility into how discounted drugs move through the healthcare system, particularly in the commerical market. As a result, employers have little to no insight into when 340B transactions occur, how discounts are applied, and which of their employees prescription claims are 340B claims and therefore ineligible for the employers typical commercial rebate. By creating a process in which manufacturers first review claims submitted by covered entities and then provide 340B rebates, the program structure would become more traceable. However, if data collection and reporting only occurs between manufacturers and covered entities, improvements would be limited, and the programs inflationary impact on healthcare spending in the commercial market would continue unabated. Data Collection and Program Integrity (Question 7(c)) Q. Provide any recommendations for improving data collection and reporting to strengthen the 340Bs Program integrity while minimizing administrative burden. HRSA can strengthen 340B Program integrity while minimizing administrative burden by prioritizing standardized and consistent reporting requirements. Data collection should focus on the information most necessary to verify rebate eligibility, identify duplicate discounts, track denials and disputes, and monitor overall performance of the pilot. We encourage HRSA to develop a methodology to ensure that plan sponsors either through the agency directly or through their PBMs and health insurance carriers - receive actionable data, as described above, that they can use to reduce their prescription drug spending. Evaluating the Pilots Broader Market Impact 340B remains a black box for many market players. In particular, plan sponsors in the ERISA self- insured market recieve virtually no information from health plans, PBMs, manufacturers, providers, or HRSA on which employee and plan member claims are being flagged as 340B and its net impact on the health plan. The rebate model, if expanded to all drugs, and with clear data provided to plan sponsors, would allow employers to understand how and why their prescription drug costs, and premiums, are increasing due to 340B. With that information, purchasers can amend plan design to mitigate the impact of 340B on working families. This change can and should be part of the Presidents much-needed affordability agenda. The National Alliance appreciates the opportunity to provide comments and we welcome any follow-up questions on how the 340B program interacts with the commercial market. Sincerely, Shawn Gremminger, MPP President and CEO National Alliance of Healthcare Purchaser Coalitions
HRSA-2026-0001-2201(no commenter metadata)2026-04-20T04:00Z23,929 chars
See attached file from Northwest Human Services, Oregon April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Northwest Human Services340B Rebate Model Pilot Program RFI Response (HRSA- 2026-03042) Dear Director Britton: On behalf of Northwest Human Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a comprehensive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts. At Northwest Human Services (NWHS), we anticipate a loss of $267,200 annually for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. NWHS is a nonprofit community health organization serving Marion and Polk counties in Oregon since 1970. As a Federally Qualified Health Center (FQHC), NWHS provides integrated primary care, dental, and behavioral health services to patients of all ages, with a focus on underserved populations. In addition to clinical services, we provide programs supporting housing stability, crisis response, and other essential needs to improve overall community health. I. We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordableand sometimes freemedications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Northwest Human Services in particular, the proposed model would directly affect: 26,300 340B transactions serving over 16,000 active patients More than $235,000 in annual administrative costs, which would increase substantially under a rebate model 340B-funded programs and services, including: o A medication subsidy programs for patients experiencing homelessness o A community benefits program that passes 340B drug discount pricing directly to patients o Clinical pharmacy services and community health worker programs that expand access to care We strongly urge HRSA to exempt CHCs from any rebate model. Without an exemption, the financial stability of safety-net providers and continued access to care for underserved patients are both at risk. II. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. As a direct result of a 340B rebate pilot program, patients may be forced to make tough decisions in transitioning to other medications, due to cost or availability issues. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes. The impact would fall hardest on patients managing multiple chronic conditions who have limited alternatives, and no other pharmacies close by. We have significant concerns about the impact a rebate model would have on our most vulnerable patients access to life-saving medications. The 10 drugs selected for the MDPNP in 2026 including Eliquis, Xarelto, Jardiance, Farxiga, and insulin products are among the most commonly prescribed medications in primary care settings, used to manage chronic conditions that are highly prevalent among CHC patients. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher 3 prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimaland often less safe alternatives. This is not an optional therapy but a critical tool for survival. As one study showed, discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a standard of care in primary care management of conditions like Type 2 Diabetes, chronic kidney disease, and heart failureall highly prevalent among our patient population. Research has found that even a 30-day withdrawal of these inhibitors increases the risk of cardiovascular death or heart failure hospitalization.3 The rebate model would effectively make these drugs unaffordable for our patients, limiting their access to the most effective therapies for managing their chronic illnesses. The predictable result is an increase in preventable hospitalizations. Starting in 2027, the MDPNP will include behavioral health drugs, extending the rebate models impact to psychiatric care. Vraylar is an atypical antipsychoticthe standard of care for schizophreniafor which there are very limited theraputic alternatives. Austedo, also on the 2027 list, is used to treat tardive dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.4 A rebate model that creates cost or access barriers to these medications would directly undermine CHCs ability to serve patients with serious mental illnessa population that is already facing significant obstacles to consistent care. The proposed rebate model directly conflicts with existing federal requirements for insulin access. Executive Order #14273 conditions future Section 330(e) funding on CHCs providing low- income patients with access to discounted insulin. Under a rebate model, however, the wholesaler price file would reflect the full WAC rather than the discounted 403B price, making the discount unavailable at the point of care. There is currently no operational method to provide these discounted medications in a retrospective rebate model. This effectively precludes CHCs from fulfilling a legal obligation imposed by the federal government itself, while over 3 million Americans relying on CHCs for essential diabetes care.5 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 5 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new barrier to carenot a solution. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program would impose significant and duplicative administrative burdens on CHCs, requiring additional workforce and IT investment to comply with multiple manufacturer rebate requirements. HRSA should exempt CHCs from this pilot on these grounds alone. As a recent NACHC assessment confirms, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities including varying data submission requirements, payment reconciliations, and dispute processes for denied rebatessimilar to the burdens already imposed by manufacturers' existing contract pharmacy restrictions. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Northwest Human Services provided $473,981 in discounted medications in 2025 and over $395,000 in discounted health care services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Northwest Human Services anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Northwest Human Services anticipates an increase of $120,000 to costs for external support vendors. These vendors 5 may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staffit requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. For Northwest Human Services, the projected costs include: One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate that $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For NWHS, which has over 16,000 active patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces complexity that threatens the very existence of these arrangements. We currently maintain 49contract pharmacy partnerships. Navigating manufacturers varying requirements across this network requires high-level TPA intervention, and we anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. The operational risks are significant: Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 49 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Marion and Polk Counties in Oregon with no affordable medication options. Over 17 percent of the U.S. 6 population already lives in a pharmacy desert,6 and nearly 30 percent of pharmacies open in 2010 closed by 2021.7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annuallybut could be much higher.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADsand they are typically not separately billed on claimsit is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 6 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 7 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Internal NACHC survey data 7 Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at the full Wholesale Acquisition Cost (WAC) rather than at the discounted 340B ceiling pricea fundamental departure from over 30 years of established practice. Under this model, CHCs would dispense medications to patients before receiving any rebate, constraining cash flow and forcing difficult decisions about staffing, services, and the range of drugs they can afford to stock. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients discounted medications at the point of sale. Under this model, neither entity-owned nor contract pharmacies would have access to the 340B price when the patient needs medication. The 340B price would no longer be reflected in the wholesaler's price catalog or pharmacy software, making it operationally difficult for CHCs to determine the appropriate discount at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Northwest Human Services helps make medications more affordable by providing eligible patients with discounted pricing through the 340B Drug Pricing Program and, in some cases, covering the full cost of medications for patients experiencing homelessness. At NWHS, we are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data. That means the potential time from dispense to rebate can extend to 55 days. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Beyond timing delays, CHCs face the risk of rebate denials, which would result in a net loss on any affected transaction. The rebate amount may also not match the initial discount offered to the patient, forcing CHCs to estimate pricing and creating the potential to undercharge or overcharge patients. These unpredictable losses compound the financial strain of the model itself. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Based on our data, we estimate it would cost us approximately $924,000 annually to purchase these 10 drugs at WAC under the proposed rebate model. We currently purchase these same drugs at the 340B ceiling price for approximately $12,000. This represents a more than 7,500% increase in upfront procurement costs. 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit that provides immunizations to rural school districts, our collaborative drug therapy management program for complex diabetic patients, and care coordination services that support whole-person care. Patient Financial Assistance: Our ability to provide medications at no cost or at deeply discounted rates under our sliding fee scale would be compromised. If operating capital is held in a manufacturer's reconciliation system awaiting rebate payment, we cannot maintain the bridge support that keeps uninsured patients from rationing critical medications. Medication Subsidies for Unhoused Patients: NWHS currently uses 340B savings to cover the full cost of medications for patients experiencing homelessness. Under a rebate model, our ability to sustain this program would be in jeopardy. Pharmacy Access: If contract pharmacy partners exit the 340B program due to the administrative burden of the rebate model, patients in Marion and Polk Counties would lose access to affordable medications at those locations. Staffing and Capacity: Every dollar diverted to rebate administrationwhether through new hires, vendor costs, or IT investment is a dollar unavailable for direct patient care, including behavioral health services and community health worker programs. Given the major disruption the 340B rebate program is anticipated to have on CHCsa system that forces CHCs to provide data that is already accurately and readily available to manufacturersis not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Northwest Human Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. The proposed model would create significant cash flow challenges, impose substantial administrative costs, and erect new barriers to medication access for the underserved patients CHCs are mandated to servedirectly undermining the program's original intent to help 9 safety-net providers stretch scarce federal resources. A 340B rebate pilot would cause disproportionate harm to CHCs and the patients who depend on them. Northwest Human Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot. If you have any questions, please contact me directly. Sincerely, Kimberly Leathley Chief Executive Officer Northwest Human Services 681 Center St NE Salem, OR 97301 503-588-5828 x2831 kleathley@nwhumanservices.org
HRSA-2026-0001-2202Jordan Yarbrough · Bryan, TX, United States2026-04-20T04:00Z6,175 chars
CHI St. Joseph Health- Brazos Valley CommonSpirit+ April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CHI St. Joseph Health Grimes Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on CHI St. Joseph Health Grimes Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. CHI St. Joseph Health Grimes Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Our critical access hospitals are quite dated and have limited access to resources; each facility has to do more with less. 340B is one mechanism by which these facilities are able to provide care in our communities despite our lack of resources. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual- track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Erin Marietta Mkt VP of Operations, Brazos Valley CHI St. Joseph Health Grimes Hospital Navasota, TX Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 CommonSpirit " As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital- based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2203Bi-State Primary Care Association2026-04-20T04:00Z21,583 chars
See attached. 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of New Hampshires and Vermonts Community Health Centers (also known as FQHCs) and the 300,000 medically-underserved patients they care for each year, we thank you for the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Established in 1986, Bi-State Primary Care Association (Bi-State) is a nonpartisan, nonprofit 501(c)(3) charitable organization promoting access to effective and affordable primary care and preventive services for all, with special emphasis on underserved populations in Vermont and New Hampshire. Bi-States combined Vermont and New Hampshire membership includes 21 Federally Qualified Health Centers (FQHCs), one Look-Alike, Planned Parenthood of Northern New England, Vermonts Free and Referral Clinics, North Country Health Consortium, Community Health Access Network, and the Area Health Education Centers in New Hampshire. Summary of Recommendations: Bi-State strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt FQHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on FQHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, Bi-State explains: 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 A. The importance of 340B savings to NH and VT FQHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their over 300,000 low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for FQHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force FQHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, FQHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to FQHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that FQHCs low-income patients rely on. FQHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. FQHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to FQHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, FQHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that FQHC patients rely on. For example, in NH and VT, FQHCs routinely rely on 340B savings to support services such as: dental care, MAT services, mental health services, care coordination, and home and mobile- based services. As explained below, the rebate model will significantly reduce the level of 340B savings that FQHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for FQHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that FQHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for FQHCs. Unsustainable cashflow burdens. In late 2025, FQHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does not protect FQHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force FQHCs to borrow substantial amounts of cash. Comments submitted by NH and VT FQHCs will provide details on these financing needs. Also note that FQHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on FQHCs buildings. 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 Massive administrative burdens: A rebate model will require FQHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our FQHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause FQHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as FQHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, FQHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the FQHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force FQHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, FQHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model FQHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many FQHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for FQHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some FQCHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. FQHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, FQHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. FQHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that FQHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that FQHCs have faced, including but not limited to in their 340B programs. For example: 4 o Contract pharmacy restrictions have impacted FQHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that FQHCs frequently dispense. o FQHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that FQHCs in NH and VT have closed sites (administrative and clinical), paused planned expansions, and delayed service line expansions. D. FQHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that FQHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for FQHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which FQHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o FQHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, FQHCs are by far the most reliant on contract pharmacies the health centers in NH and VT cover broad geographical service areas necessitating pharmacies across these large spaces. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, FQHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing FQHCs into a rebate model, manufacturers must be required to incorporate at least six FQHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt FQHCs from any rebate model, if the agency insists on imposing one on FQHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance FQHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance FQHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover an FQHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving FQHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse FQHCs for all costs incurred due to the rebate pilot -- fully, promptly, and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell did not account for most of the rebate-related costs that FQHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: 5 Fully reimburse FQHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that FQHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse FQHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, FQHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, FQHCs will be forced to absorb the full WAC price on all undispensed units. This could cause FQHCs costs to skyrocket, and would effectively transfer 340B savings from FQHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for FQHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on FQHCs, because it will significantly speed up how quickly FQHCs receive rebate payments for drugs sold in multi- unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for FQHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring FQHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many FQHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 6 Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten FQHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on FQHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining FQHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at gmaheras@bistatepca.org. Sincerely, Georgia J. Maheras, Esq. SVP, Policy and Strategy 7 Attachment Costs incurred by FQHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from FQHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from FQHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2204Unity Health White County Medical Center2026-04-20T04:00Z5,715 chars
Response to ROI on 340B Rebate Model Pilot Program gap Unity ma. HEALTH WHITE COUNTY MEDICAL CENTER April 16, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fisher Lane Rockville, MD 20852 Re: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Unity Health - White County Medical Center (Unity Health - WCMC) appreciates the opportunity to provide comments on the Health Resources and Services Administration (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. Unity Health - WCMC is a 340B Disproportionate Share Hospital (DSH) and relies on predictable 340B savings to support access to care, especially for rural and underserved communities. Summary of Key Concerns A rebate model would substantially increase administrative burden by adding claims-based submission, receivables tracking, and dispute management on top of existing 340B compliance controls. Even with a nominal 10-day payment requirement, a rebate approach creates material cash-flow exposure because drugs must be purchased at higher upfront prices while rebates remain subject to processing issues, denials, or disputes. Unity Health - WCMC has modeled the cash flow impact to be over $2.5M per month in additional upfront costs, which would not only cause significant strain on our ability as a rural hospital to meet our financial obligations and but could also limit our ability to purchase needed drugs due to wholesaler credit restraints. Operationally, a rebate system would require new/modified IT integrations, new controls, and potentially additional staff time and/or FTEs to maintain auditable compliance. We estimate an additional $295,000 to be required to accomplish new 340B Rebate responsibilities, without any additional benefit to our patients or our hospital. 1. Costs to Covered Entities Under the current upfront 340B discount model, Unity Health - WCMC already incurs meaningful internal and third-party costs to maintain compliance, including eligibility controls, split-billing oversight, diversion prevention, duplicate discount prevention, contract pharmacy oversight, and audit readiness. A rebate model would add an additional layer of work: generating rebate-eligible claim submissions, tracking receivables, reconciling payments at the claim level, and managing denials and disputes. These functions would require new workflows, additional controls, and ongoing monitoring to remain auditable. This all comes as additional costs to our hospital and only further drives up the cost of healthcare for our community. O Unity-Health.org I (501) 268-6121 I 3214 East Race Ave I Searcy, AR 72143 -Hi) Unity Vi/ HEALTH WHITE COUNTY MEDICAL CENTER 2.Payment Timing and Cash Flow Impacts A rebate model would shift the 340B benefit from the point of purchase to a post-dispense rebate, requiring Unity Health - WCMC to finance higher acquisition costs. Delays associated with claim completeness determinations, transmission errors, and denials/disputes can extend the float and create liquidity risk. Because wholesaler credit and exposure are managed tightly in routine operations, introducing a large, recurring float would reduce purchasing flexibility and could affect patient access to high-cost outpatient therapies. Having to upfront roughly $2.5M/month in additional drug costs would cause undue burden on hospital operations. 3.Rebate Denials and Dispute Resolution If HRSA proceeds with a rebate model pilot, strong guardrails are essential to ensure that denials are limited to narrow, objective circumstances and cannot be used as a payment-delay tool. A standardized denial code set, a uniform denial template with required supporting documentation, firm adjudication timelines, and an independent dispute pathway would be critical to minimize administrative burden and protect covered entities from prolonged receivables aging. 4.Data Standards, Privacy, and Security Unity Health - WCMC supports a "minimum necessary" data standard and centralized secure submission processes to reduce PHI/PII exposure and avoid manufacturer-specific, non-standard data demands. Any pilot should standardize the claim schema, transmission security requirements, access controls, audit logs, and retention expectations so covered entities are not forced to build and maintain multiple parallel formats. 5.Reporting and Oversight HRSA should require routine manufacturer reporting focused on payment timeliness, denial rates and reasons, dispute rates and resolution timelines, outstanding unpaid amounts, and operational incidents affecting processing. Public reporting of aggregated performance metrics can improve accountability without disclosing sensitive operational or patient-level data. Conclusion Unity Health - WCMC respectfully urges HRSA not to implement a 340B Rebate Model Pilot Program. Based on the operational and financial impacts described above, a rebate model would introduce significant administrative complexity, increase compliance risk by adding claim-level submission and dispute processes, and create substantial cash-flow exposure by shifting the 340B benefit from point-of-purchase to a post-dispense receivable. HRSA should preserve the current upfront discount structure that provides predictable, immediate savings and supports timely access to outpatient medications. Thank you for your consideration. Sincerely, LaDonna Jo on Unity-Health.org I (501) 268-6121 I 3214 East Race Ave I Searcy, AR 72143
HRSA-2026-0001-2205Lyn Jacobs · Hillsboro, OR, United States2026-04-20T04:00Z1,925 chars
I am submitting this comment as an individual. My comments reflect my personal perspective as a staff member of a large federally qualified health center serving over 50,000 patients annually across both urban and rural communities. I am deeply concerned about HRSAs proposed 340B rebate model and its potential impact on patient access to medications, as well as the services our health center provides to the community. Moving from up-front discounts to a rebate model would increase administrative complexity and personnel costs, requiring additional staff time for tracking, reconciliation, and managing uncertainty in the program. These added burdens would not improve patient care and instead divert critical resources away from direct services. Most importantly, requiring health centers to pay full price upfront and wait for rebates creates financial strain and instability. A rebate model would directly impact our ability to purchase medications for patients in a timely and affordable way, increasing the risk that patients face higher costs, delays, or barriers at the pharmacy counter. Any reduction or delay in 340B savings would force our health center to redirect funding away from essential programs such as clinical pharmacy services, patient assistance, outreach, and other community-based supports that our patients depend on. Ultimately, this policy would shift financial risk onto safety-net providers and the patients we serve. This is an untenable shift that will affect my patients and the medications I can prescribe to them. Even well-intentioned changes that increase uncertainty or reduce access to medications can result in real harm in vulnerable communities. The stability and predictability of the current 340B structure are essential to maintaining access to care. Thank you for your time and consideration. Optional: Sincerely, Lyn Jacobs, M.D. Hillsboro, Oregon
HRSA-2026-0001-2206(no commenter metadata)2026-04-20T04:00Z42,655 chars
See attached file(s) April 20th , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Health Care District of Palm Beach County, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $3.2 million from entity-owned pharmacy operations and $254,000 reduction in savins for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs exceeding $1million annually. The Health Care District of Palm Beach County is an independent special taxing district established by voters in 1988 to serve as the healthcare safety net for Palm Beach County. The District provides a comprehensive, integrated system of care designed to fill critical gaps in access to healthcare services for a diverse and often vulnerable population. Through its network of community health centers, hospital services, school health programs, trauma system, and skilled nursing care, the District delivers high-quality, patient-centered care to residents regardless of their ability to pay. The organization is committed to improving community health outcomes through innovation, collaboration, and fiscally responsible operations, while ensuring access to essential services for underserved populations across the county. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For the Health Care District of Palm Beach County in particular, this means it will impact: Over 138,362 340B transactions and 13,720 patients Current admin costs for your 340B program ~$6.1M 340B savings are reinvested to expand patient access to affordable medications, support clinical services, and offset the cost of care for uninsured and underinsured populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Health Care District of Palm Beach County provided in 2025 $377,846 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Health Care District of Palm Beach County anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Health Care District of Palm Beach County anticipates an increase of $50,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. HCD estimates it will need to hire 2 FTEs to meet the anticipated administrative demand of ongoing reporting. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. The Health Care District of Palm Beach County estimates the FTE cost to be $100,00 annually Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An additional 15 hours will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Health Care District of Palm Beach County urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 13,720 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1.6million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Estimated one time cost from vendors approach $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 15-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 110 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 6 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Palm Beach County area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 Internal NACHC survey data 7 medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. To ensure that no patient shall be denied service due to an individuals inability to pay. The Sliding Fee 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Discount Program is designed to provide a schedule of discounts to patients with no or limited means to pay for medicines and health care services provided by the Health Care District of Palm Beach County (District), through District Clinic Holdings, Inc. d/b/a Health Care District Community Health Center (CHC). All patients are entitled to financial assistance counseling to identify possible solutions and options for patients who do not have the ability to pay in full. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,235,745.38 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $25,090.91 to purchase these same drugs at the 340B ceiling price. This represents a 12,800% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Health Care District of Palm Beach County anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as: Our mobile health unit that provides immunizations to rural school districts / our medication therapy management (MTM) program for complex diabetic patients, our school based programs that serve all schools in Palm Beach County. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 12,541 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Health Care District of Palm Beach County asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Health Care District of Palm Beach County estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $3,235,745.38 a. Financial Impact of Rebate Denials and Delays Health Care District of Palm Beach County urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $161,787.24. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 12 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is 13 not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Health Care District of Palm Beach County strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Health Care District of Palm Beach County believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Health Care District of Palm Beach County appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact the Director of Corporate Pharmacy Sincerely, Leamsi Borges Corporate Director of Pharmacy HRSA Primary Contact 340b OPAIS Lregalad@hcdpbc.org 561-356-0129 x295710
HRSA-2026-0001-2207Unity Health Care2026-04-20T04:00Z108,810 chars
See attached file(s) April 19, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Unity Health Care, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Unity Health Care, Inc expects an average approximate loss of $600,000 to $1M annually from entity-owned pharmacy operations and 38% savings reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation, and TPAs carving out these medications. Projected Cost Increases: Unity Health Care expects to incur an additional $1.8M in additional cost annually to manage the pilot. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For UNITY HEALTH CARE in particular, this means it will impact: 93,454 340B transactions/ and 76,000 patients served by our FQHC Current admin costs of $12.6M for our 340B program We use the 340b revenue to provide medical and pharmaceutical services to the patients of Washington DC, indigent population and the department of Corrections. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description 5 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Unity Health Care, Inc. provided medications at 340b cost cost plus a nominal pharmacy fee, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Unity Health Care, Inc. anticipates needing 2 additional FTE as a Result of Rebate Model additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Unity Health Care, Inc. anticipates an $90,000 Additional Costs Related to Rebate Model to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Unity Health Care will require 2 additional FTE to manage reporting and compliance with this program to meet the anticipated demand of reporting 340B rebate claims. Unity will face an increased administrative burden in terms of monitoring rebate claims and payments. Our organization estimates to report and review claims are 20 to 25 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force Unity to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Unity Health Care, Inc urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Unity 6 Health Care, Inc will be required to invest $25,000 in software enhancements simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. These fees can reach up to $75,000 for one time modifications. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Wellpartner, Walgreens and SunRx pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Or in many cases steer away from carving in these medications into the program which today represents over $600,000 annually for Unity Health Care. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 142 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the District of Columbia with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,7 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.8 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. 7 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 8 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the 8 project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Unity Health Care, Inc asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Unity Health Care, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1.6M. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Unity Health Care, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $159,000 10 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit / utilize limited financial reserves. Financial Impact of Rebate Denials and Delays Unity Health Care, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.12 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate denial rate would result in a net annual loss of $435,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers 12 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.13 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.14 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that 13 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 14 340B House Report Legislative History. H.R. REP. 102-384(II). 12 requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,15 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and 15 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 13 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.16 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it 16 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 14 has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes17 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.18 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. 17 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 18 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 15 Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.19 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 19 Internal NACHC survey data 16 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,20 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee 20 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 17 Schedule.21 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.22 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.23 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. 21 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 22 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 23 H.R. REP. 102-384(II) 18 Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).24 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.25 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).26 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. 24 42 U.S.C. 256b(a)(1) 25 Id. 26 42 U.S.C. 256b(a)(1) 19 The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.27 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.28 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.29 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.30 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.31 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. 27 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 28 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 29 42 U.S.C. 256b(a)(5)(C). 30 42 U.S.C. 256b(a)(5)(C). 31 See 42 U.S.C 256b(a)(5)(A). 20 The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state.] For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.32 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those 32 C.F.R. 447.518(a). 21 states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.33 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.34 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.35 The 33 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 34 42 C.F.R. 447.502 35 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 22 Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.36 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee 36 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 23 may be required to overpay for drugs.37 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.38 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.39 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered 37 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 38 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 39 42 U.S.C. 256b(a)(5)(A)(emphasis added). 24 entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.40 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch 40 32 C.F.R. 199.21(q)(2)(iii)(E) 25 scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.41 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.42 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.43 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.44 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.45 Drug industry data vendors have reported that such data is highly valuable to manufacturers.46 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.47 41 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 42 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 43 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 44 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 47 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 26 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.48 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.49 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.50 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.51 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.52 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal 48 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 49 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 50 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 51 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 52 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 27 AntiKickback Statute and analogous state laws.53 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.54 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care 53 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 54 42 U.S.C. 256b(a)(5)(B) 28 providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.55And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.56 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 55 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 56 H.R. REP. 102-384, 16 29 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 30 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model57 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 57 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 31 Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Unity Health Care, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, Unity Health Care, Inc. would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Unity Health Care, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Leamsi Regalado Borges, Pharm.D, ACE, CPh VP of Pharmacy Services HRSA Primary Contact Unity Health Care, Inc. Lborges@unityhealthcare.org 202-258-0901
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Please see the attached file. [INSERT ORG LOGO] 1. BRG Analysis of HRSA OPAIS Database and Medicare Cost Reports. October 2023 2. IQVIA, Indiana: Cost of 340B Fact Sheet. https://www.iqvia.com/-/media/iqvia/pdfs/us/fact-sheet/340b-fact-sheets/indiana--cost-of-340b-fact-sheet.pd April 20th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthLinc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: In Indiana alone, where 340B participation and contract pharmacy utilization exceed national averages, CHCs report estimated losses of approximately $300,000 to $1 million annually from entity-owned pharmacy operations and a 2030 percent reduction in contract pharmacy savings, driven by the administrative burden of manual reconciliation across a large and complex contract pharmacy network. Indiana has more than 1,600 contract pharmacy arrangements statewide and a higher-than-average share of 340B- eligible drug utilization (14 percent versus approximately 12 percent nationally), increasing operational complexity and exposure to rebate-related inefficiencies.1 2 Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. HealthLinc, Inc. is a Federally Qualified Health Center (FQHC) serving six counties in northern Indiana: Porter, LaPorte, St. Joseph, Lake, Newton, and Starke. We started as a free clinic in 1996 and achieved full FQHC designation in 2006. HealthLincs model ensures a patient-centered medical home that contributes to the creation of healthy communities. In 2025, HealthLinc cared for 56,557 patients through 219,756 visits. Our network includes 14 clinics and one corporate headquarters. According to NIH data, 34% of HealthLincs service area population is low-income, and access to health care continues to be challenging, with 8.9% of Indiana residents uninsured in 2024. As of April 2026, HealthLincs service area population represents 16% of Indiana's total population and spans two time zones and two rural counties. Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For HealthLinc in particular, this means it will impact: Number of 340B transactions / patients served: HealthLinc serves approximately 56,557 patients, many of whom rely on affordable access to care and medications made possible through the 340B program. Current administrative costs for the 340B program: HealthLinc invests approximately $3,000,000 annually to administer and maintain compliance within its 340B programresources dedicated to ensuring the program operates with integrity and continues to serve vulnerable populations. Use of 340B revenue: 340B savings are critical to sustaining essential patient care services at HealthLinc. These funds directly support residency programs, clinical pharmacists, community health workers, and care team nurses, expanding access to comprehensive, team-based care. Any reduction in 340B resources would directly threaten these services and limit HealthLincs ability to meet the needs of its patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.3 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.4 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.5 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.6 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.7 Impairing access to these drugs could result in exacerbation of the mental health crisis. 3 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 4 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 5 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 6 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 7 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,8 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 8 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 5 Sliding Fee Discount: HealthLinc Pharmacies provided over 54,000 prescriptions in a sliding fee discount in 2025 which allowed patients to have access to affordable medications. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: HealthLinc anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, HealthLinc anticipates an increase of $250,000 annually in expenses to cover external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.9 HealthLinc estimates that implementation of the proposed 340B rebate model for 2026 would necessitate an additional 1.0 full-time equivalent (FTE) 340B analyst, along with 0.5 FTE of expanded capacity from existing staff, solely to manage the significant operational and reporting burden associated with rebate administration. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.10 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. HealthLinc estimates that the additional staffing needs and expanded time commitments required of existing personnel to implement the proposed model would result in approximately $140,000 in annual costs, driven by both new staffing requirements and the reallocation of existing staff time from direct patient care and core program operations. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. For 2026, HealthLinc anticipates that reporting rebate claims to the third-party platform will require more than 20 hours per weekassuming full compliance with all nine manufacturers requirementswith additional time needed for claims reconciliation. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthLinc urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 9 Internal NACHC assessment (99 responses). 10 Ibid. Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 6 Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 56,557 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at 6.7 million annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. HealthLinc pharmacies do not utilize a TPA to manage in-house pharmacy claims, meaning there is no automated infrastructure in place to support rebate processing under the proposed model. As a result, implementation would impose a substantial and ongoing operational burden, requiring manual extraction, validation, and reconciliation of pharmacy data from the PMS across all four pharmacy locations. This process would need to be repeated independently for each of nine manufacturers, each of which may impose distinct and evolving reporting requirements. The absence of system integration or standardized reporting pathways would create a highly fragmented, labor- intensive workflow, significantly increasing the risk of errors, delays, and administrative inefficiencies. To meet these requirements, HealthLinc estimates the need for additional staffing capacity and expanded time commitments from existing personnel, resulting in approximately $140,000 in annual costs. This reflects not only incremental staffing needs but also the diversion of current pharmacy and operational staff away from direct patient care and essential clinical services. Taken together, the lack of automation, increased reporting complexity, and added staffing burden represent a structural operational challenge that would materially strain HealthLincs pharmacy operations and limit the organizations ability to efficiently deliver care within existing resource constraints Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 7 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. HealthLinc currently partners with several contract pharmacies, including Walgreens, CVS, Walmart, etc., to expand access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all our different contract pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Northern Indiana with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,11 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.12 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 11 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 12 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 8 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.13 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.14 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. HealthLinc is committed to ensuring that all qualifying patients have access to affordable medications through its sliding fee discount program. Consistent with its mission and HRSA requirements, HealthLinc applies sliding-scale discounts to prescription drugs, enabling patients to access medications at reduced cost. These affordability measures are implemented across all four in-house pharmacy locations and extend to contract pharmacy partners, ensuring equitable access to medications throughout the six counties HealthLinc services in Northwest Indiana. The introduction of a 340B rebate model would create significant uncertainty and financial strain around HealthLincs ability to sustain these discounts at the point of sale. Increased upfront drug acquisition costs and delayed rebate recovery would place additional pressure on already limited resources, directly impacting the organizations cash flow and operating capacity. As a result, HealthLinc would face difficult operational decisions that could ultimately limit its ability to extend sliding fee discounts consistently across all dispensing sites. Any reduction in this program would disproportionately affect low-income patients, increasing out-of-pocket medication costs and creating barriers to medication adherence and continuity of care. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).15 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; 13 HRSA FAQ 14 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 15https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 9 however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B16 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.17 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 16 https://340bpricing.hrsa.gov/ 17 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 10 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $6.3 million dollars to purchase these 10 drugs under the proposed rebate model for the MDPNP Drugs in 2026 alone. Currently, our organization spends $350,000 annually to purchase these same drugs at the 340B ceiling price. This represents a 1,700% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HealthLinc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as care team nurses, clinical pharmacists, residency programs, and community health workers. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund behavior health experts, clinical pharmacists, and care team nurses, directly increasing wait times for primary care and health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 7,500 uninsured patients from rationing their prescription medications. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HealthLinc asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 11 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HealthLinc estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1.7 million dollars. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HealthLinc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices would increase upfront monthly drug expenditures by approximately $519,000 per month. This financial burden is projected to escalate significantly in future years as additional MDPNP drugs are introduced. In 2027, HealthLinc estimates it would need to carry approximately $930,000 in additional monthly drug acquisition costs solely to support MDPNP affected medications. By 2028, this requirement is expected to increase further, reaching approximately $1.06 million in additional monthly cash flow needs to sustain purchasing of the MDPNP designated drugs alone. This level of required upfront capital represents a substantial and ongoing strain on HealthLincs operating liquidity and cash flow stability, particularly for a community health center operating on narrow financial margins. The increased financial exposure would significantly reduce flexibility to invest in patient care services and could create material risk to the organizations ability to maintain consistent medication access for vulnerable populations. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on HealthLinc, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays HealthLinc urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 12 vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.18 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $950,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 18 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 13 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B 14 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthLinc strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthLinc believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HealthLinc appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Broxton Davis, Director of Pharmacy, at bdavis@healthlincchc.org. Sincerely, Melissa D. Mitchell, CEO HealthLinc Docusign Envelope ID: B5ACA01E-6AD9-4C1A-B138-DD5688FF762B
HRSA-2026-0001-2209Legacy Community Health2026-04-20T04:00Z13,754 chars
Legacy Community Health respectfully submits our response for the 340B Pilot Program RFI. Please see attached. Thank you. PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Legacy Community Health, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Legacy Community Health is a full-service health care system comprised of more than 60 locations in the Texas Gulf Coast region offering primary and specialty care, as well as pharmacy services. For over 40 years, Legacy has been innovating the ways we provide comprehensive, quality health care services to individuals, families, and communities in need. As the largest Federally Qualified Health Center (FQHC) in Texas and a United Way-affiliated agency since 1990, Legacy ensures its services and programs are open to all, regardless of the ability to paywithout judgment or exception. I. Utilization of 340B Savings Legacy Community Health utilizes 340B savings in the following ways: Capital Investments to support care delivery- 8% Chronic disease management services- 34% Chronic disease prevention service- 13% Service to rural patients with access challenges- 12% Support to patients with behavioral health challenges- 6% Uncompensated care- 26% PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org 340B savings funds nearly $33M in uncompensated care. And approximately 25% of all patients are on self-pay/ sliding scale. Here is a more specific breakdown on uncompensated care by service line: Behavioral Health- $5.8M Dental- $3.1M Adult/ Family Practice- $8.5M ID/ HIV- $2.4M OB/GYN- $4.3M Pediatrics- $4.6M Vision- $.9M Walk In Clinic- $.4M SBH BH- $1.3M SBH PEDI- $1.6M A reduction in 340B savings would have a significant impact on our ability to provide these services to a very vulnerable population. II. Estimated Financial Impact of Rebate Model - Based on our organizations data, we estimate it would cost $2.1M to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $100K to purchase these same drugs at the 340B ceiling price. This represents a $2M increase in upfront capital required for procurement. - Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $5M and 11k patents who will lose access to care. III. Health Center Impacts Cash Flow- Any implementation of a fully rolled out 340B Rebate model would require $40M of cash, to which Legacy does not have access or means to fund. Legacy would significantly reduce access to care for 200k patients. Revenue Loss -Even a conservative 5% denial rate would result in a net annual loss of $5M and 11k patents who will lose access to care. PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org Why these impacts matter for Legacy and our patients: Cash flow and liquidity pressure. Moving to a rebate-based model would shift 340B savings from an upfront discount to a delayed reimbursement. For a high-volume health center like Legacy, that timing change can create significant cash flow gaps: Legacy would be required to pay higher acquisition costs at the point of purchase and then wait for rebates to be processed and paid. Even short delays can strain liquidity needed for payroll, clinical supplies, pharmacy operations, and mission- critical programs. Legacy will be forced to rely on lines of credit or short-term loans to cover routine operating expensesdiverting dollars away from patient care to interest and administrative costs. Revenue loss risk if rebates are denied or disputed. Under a rebate model, the value of 340B savings becomes contingent on accurate claim identification, data matching, and payer/manufacturer adjudication. Denied, reversed, or partially paid rebates would directly reduce resources Legacy uses to subsidize care for uninsured patients and to expand access for Medicaid and other vulnerable populations. The financial uncertainty also complicates budgeting and staffing decisions: when savings are not reliable, Legacy must either hold back funds that could otherwise support services or accept the risk of mid-year program cuts if expected rebates do not materialize. Increased operational burden to stay in compliance. Legacy already operates in a complex compliance environment, balancing HRSA 340B program requirements, contract pharmacy oversight, audit readiness, and data integrity expectations. A rebate-based approach would add new layers of operational complexity, including claim-level identification, ongoing reconciliation across dispensing, payer, and manufacturer data, dispute management, and expanded reporting. This would likely require additional staff time, specialized compliance expertise, upgraded software/tools, and potentially outside consultants to build and maintain the processes needed to ensure accurate rebate invoices. Legacy is also experiencing current challenges related to ESP data submission requirements and general 340B compliance workload; adding new data and reconciliation demands would increase the risk of errors, delays, and administrative overheadpulling staff capacity away from patient-facing work. PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org Patient impact: access to medications and services. When 340B savings are reduced, delayed, or made uncertain, the impact is felt first by patients. Legacy may be forced to reconsider how broadly it can offer discounted medications, particularly for patients who are uninsured or whose insurance benefits still leave them with unaffordable out-of-pocket costs. If increased drug acquisition costs and delayed/denied rebates materially reduce 340B savings, Legacy could face difficult tradeoffs such as limiting pharmacy support programs, reducing service lines that rely on cross-subsidization, slowing expansion into high-need communities, or adjusting clinic/pharmacy hours. Any reduction in access to affordable medications increases the likelihood of treatment interruptions, worsening chronic disease outcomes, avoidable emergency department utilization, and higher downstream costsoutcomes that directly conflict with Legacys mission to provide comprehensive, equitable care. Upfront cost increases plus delayed rebates create liquidity risk and potential borrowing needs. Added data submission and reconciliation requirements increase compliance burden, staffing needs, and error risk. Reduced 340B resources can mean fewer discounted medications and constrained services for patients who rely on Legacy for care. Cash flow and liquidity pressure. Shifting to a rebate-based model moves 340B savings from upfront discounts to delayed reimbursements. This change would create cash flow gaps for Legacy, requiring $40M upfront cash that Legacy does not have the liquidity to absorb. Legacy would also not be able to add enough credit or loans to cover this gap. Implementation of any rebate model would force Legacy to cut access to patient care. Revenue loss risk if rebates are denied or disputed. Under a rebate model, 340B savings depend on claims processing and timely payments. Denied or disputed rebates reduce resources for subsidized care and make budgeting difficult, risking service cuts if expected funds dont arrive. Increased operational burden to stay in compliance. A rebate system adds complexity to Legacys compliance duties, requiring more staff, tools, and expertise for claim identification, reconciliation, and reporting. This increases error risk and administrative overhead, pulling focus from patient care. PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org Patient impact: access to medications and services. Reduced or delayed 340B savings can force Legacy to cut back on discounted medications and services, especially for uninsured and underinsured patients. This may lead to treatment interruptions, worse health outcomes, and higher costs, undermining Legacys mission of equitable care. Programs Supported by 340B Savings that are at Risk Prenatal and Maternal Health Initiatives: Becoming a Mom Classes: Legacy offers comprehensive prenatal programs designed to support pregnant women in a supportive group setting. These classes cover essential topics such as prenatal care, nutrition, stress management, labor and birth, and postpartum care. Maternal nutrition during pregnancy has been shown to have a significant impact on childhood obesity. Given the epidemic of childhood obesity in our country, subsidizing programs such as these classes multiplies downstream gains in the health of the community. Becoming a Mom Baby Showers: New mothers receive vital supplies needed for the first few weeks after birth, including a diaper bag, diapers, a car seat, and other helpful items. Delphina Care: This AI-powered maternal health platform enhances maternal health care by offering remote monitoring and personalized care services for expecting and postpartum patients. Nutrition and Diabetes Support: Nutrition Counseling: Legacy provides nutrition counseling to help diabetic patients understand how nutrition management can improve their A1c numbers. FreshRx Program: This program is specifically designed to address the unique needs of pregnant patients experiencing food insecurity. Body Positive: This program is a specialized wellness initiative offering tailored fitness, nutrition education, safe, stigma free workout space and serves as a broader commitment to providing comprehensive care. Childhood Literacy and Health Services: Little Readers: The Little Readers initiative promotes early childhood literacy and fosters a love for reading among young children. At every well-child visit, pediatric PO Box 66308 T (832) 730 4433 LegacyCommunityHealth.org Houston, TX 77266 F (832) 548 5092 giving@legacycommunityhealth.org patients receive an age-appropriate book along with a prescription to read, encouraging parents to read to their children. Additional Community Support Services: Free Pregnancy Testing: Legacy offers free pregnancy testing to support early and accessible prenatal care. Free Prescription Delivery: Patients can receive their prescriptions by courier or overnight delivery at no cost, ensuring access to necessary medications without barriers. Navigation Services: Legacy provides navigation services to help patients understand their coverage and payment options, facilitating access to care and support. Conclusion Legacy Community Health urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Legacy Community Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Legacy Community Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ray Purser, Vice President-Government Relations and Public Affairs, 832-203-8756. Sincerely, Robert Palussek Chief Executive Officer Legacy Community Health
HRSA-2026-0001-2210Consumer Action for a Strong Economy (CASE)2026-04-20T04:00Z4,676 chars
See attached file(s) April 20, 2026 Comments Submitted to the Health Resources and Services Administration (HRSA) Re: Request for Information: 340B Rebate Model Pilot Program Docket ID: HRSA-2026-0001-0001 Submitted by: Consumer Action for a Strong Economy (CASE) To Whom It May Concern: On behalf of Consumer Action for a Strong Economy (CASE), a leading voice for pro-growth, free-market policies that support American consumers, I am writing in response to the Health Resources and Services Administration (HRSA) request for information regarding the 340B rebate model pilot program. The 340B program was originally designed to help hospitals and clinics provide discounted prescriptions to rural, low-income, and underserved patients. Over time, however, it has grown far beyond that mission, allowing large healthcare conglomerates to profit from discounts intended to benefit patients. Limited oversight has allowed the 340B program to expand rapidly, driving up costs for patients and reducing accountability. Powerful healthcare entitiesincluding vertically integrated insurer-PBMs inflate drug prices by as much as 72%, with no guarantee that patients see any of the savings. Since 2010, 340B contract pharmacy arrangements with healthcare conglomerates have skyrocketed by more than 12,000%, and more than half are now affiliated with PBMs, which the FTC has investigated repeatedly for manipulating drug pricing at consumers' expense. This level of consolidation is pushing out independent pharmacies, limiting access to care in underserved areas, and further eroding the programs intent to serve the vulnerable. The data further underscores the program's significant unchecked growth. In 2021, participating healthcare entities spent nearly $44 billion on 340B drugsup from just $6.6 billion in 2010. At the same time, analysis from the Congressional Budget Office suggests the program may have been unintentionally incentivizing the prescribing of higher-cost drugs, unnecessary service expansions, and further consolidation between hospitals and affiliated clinicsall of which can contribute to higher overall federal spending. To rein in spending and ensure those intended to benefit from the program are actually benefiting, serious reform is needed. HRSAs proposed rebate pilot is an encouraging step toward bringing much-needed transparency and accountability to the 340B program. Rebates work well in other federal programs, like Medicaid, and applying them to the opaque 340B program could strengthen program integrity without disrupting patient care. By creating a more streamlined rebate system, the pilot prevents duplicative discounts on the same drug while providing providers with a clear, predictable reimbursement processall at a lower cost to taxpayers. Notably, this model was set to be implemented in January of this year, but was blocked by a federal court. This decision further delays action on a pilot program that is a first step toward more accountability in the program. That said, it remains an important and necessary step forward, and HRSA should move forward without further delay. The benefits of the rebate model are clear. Unlike the current 340B structure, which can enable waste and inefficiencies, the rebate model builds on how hospitals and clinics already purchase medicines while introducing key improvements. By setting defined timelines for submitting payments and requiring justification for approvals or denials, this allows for a more predictable and reliable reimbursement process. This system would help ensure that healthcare conglomerates arent engaging in duplicate discounts. Without smart reforms, the unchecked growth of 340B will continue to drive up costs across the system, enriching large hospital systems and pharmacy middlemen while doing little to lower drug prices for consumers. If and when implemented, the rebate model should be expanded to cover all prescription drugsnot just those included in the 2026 and 2027 Medicare Drug Price Negotiation Selected Drug List. Without these changes, the 340B program will continue to raise costs for patients, undermining its ability to lower costs and improve access for those who need it most. CASE applauds HRSA for its time and consideration on this important issue and strongly urges the agency to implement and expand the rebate model without further delay. Sincerely, Gerard Scimeca Consumer Action for a Strong Economy (CASE) ____________________________ Consumer Action for a Strong Economy 1800 Diagonal Road, Suite 600 Alexandria, VA 22314 @CASE_forAmerica
HRSA-2026-0001-2211Virtua Health2026-04-20T04:00Z6,788 chars
See attached comment letter on behalf of Virtua Health. Cort A. Adelman, JD Vice President Government and External Affairs Office of Government and External Affairs 303 Lippincott Drive, Marlton, NJ t: 856-355-0803 cadelman@virtua.org virtua.org April 20, 2026 The Honorable Thomas Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20858 RE: HRSA-2026-03042, Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Virtua Health, Inc. (Virtua) appreciates the opportunity to provide input in response to the Health Resources and Services Administrations (HRSA) request for information regarding a potential rebate model for the 340B Drug Pricing Program. Virtua operates two 340B covered entities - Virtua Willingboro Hospital in Willingboro, NJ and Virtua Our Lady of Lourdes Hospital in Camden, NJalong with more than 400 additional care locations throughout southern New Jersey. Overview Virtua is concerned that a rebate model will have significant operational and financial impacts on covered entities. Any program model shifting from upfront discounted pricing to a rebate structure will create cash flow challenges and require substantial investment of new staffing and IT resources and risk undermining the programs long-standing mission of enabling covered entities to better serve vulnerable patients and communities. While Virtua strongly opposes this fundamental shift in the 340B programs foundational design and urges HRSA to reject any adoption of a rebate model, we appreciate the agencys willingness to solicit stakeholder feedback and public comment. Should the agency decide to move forward with a rebate model, we would strongly urge the agency to incorporate additional safeguards and address previously unaccounted for implementation challenges. Cash Flow Impacts on Covered Entities A rebate model fundamentally shifts the financial burden for cash flow from the manufacturers to the covered entities, requiring upfront cash payment for medications and delayed reconciliation via a rebate payment. In 2025, Virtua Health prescribed and dispensed medications under the 340B program totaling more than $25 million, resulting in more than $10 million in discounts. Under a rebate model, the covered entities would be required to maintain sufficient cash-on-hand to acquire these medications while relying on a complex and potentially complicated system of manufacturer-based rebates to recoup discounts. This shift in cost would place substantial financial strain on covered entities and could directly impact our ability to provide a host of wraparound and community-based support services we otherwise simply could not afford. These services include providing care to uninsured individuals, offering free or reduced-cost vaccines, or supporting low- to no-cost community health programs. Staffing and Administrative Burden Adopting a rebate model would inherently increase administrative costs for covered entities. These costs would include hiring additional staff to manage expanded compliance and reconciliation requirements, purchasing and adopting new IT programs, adapting new program standards and submission protocols, and managing potential cash flow disruptions resulting from covered entities paying significantly higher upfront costs than under the existing program model. In the event HRSA adopts a rebate model, the agency should clarify that all costs associated with rebate submission including additional staffing resources, auditing, and reconciliation costs be borne by the manufacturers. We anticipate these costs could be significant, but HRSA should clarify that costs covered must incorporate all associated costs with rebate submission. Timely Filing Standards and Accountable Appeals Process As Virtua engaged with manufacturers in preparation for a potential rebate model pilot program, we observed wide variation in submission deadlines, documentation standards, and processing requirements. To address administrative burdens, HRSA should clarify that covered entities should be allowed to submit rebate claims in batches, rather than requiring a claim-by-claim submission process as determined by the manufacturers. As HRSA considers data submission requirements, all of which will need to be incorporated into staffing and IT implementation, we urge HRSA to only require strictly essential data fields in the requirements. In addition, any rebate model should include timely filing standards that allow covered entities to submit claims regardless of a patients discharge status. For example, under current program standards, drug submissions may not be applied to the 340B program until a patient is discharged following an acute hospital admission. Under a rebate model, covered entities should be permitted to submit claims at the time of medication dispensing or discharge, rather than waiting for final patient discharge. Should HRSA choose to implement a rebate model, we respectfully request HRSA establish a transparent and timely process to appeal or dispute adverse determinations by a manufacturer. Despite the 10-day rebate turnaround time under the original pilot framework, covered entities would still be required to carry significant upfront costs for drug acquisition compared to the current long-standing structure of the 340B program. Establishing a transparent and timely appeals process, including prompt pay requirements, correction action requirements, and interest payments for delayed rebate payments would ensure accountability and prevent inappropriate denials that would undermine the integrity of the 340B program and the agencys stated goals. Conclusion Virtua Health appreciates HRSAs efforts to engage stakeholders in this pilot program proposal. However, we remain concerned that any rebate model fundamentally shifts costs and risks onto covered entities, undermining the long-standing mission and goals of the 340B program in supporting patients and communities. We strongly urge HRSA to abandon efforts to implement a rebate model for the 340B program. If HRSA proceeds with this concerning model, we urge the agency to adopt additional safeguards and address issues enumerated in this letter above to ensure such a pilot does not inadvertently harm the very providers the 340B program as designed to support. On behalf of Virtua Health, thank you for the opportunity to comment on this request for information. We look forward to working with HRSA to strengthen, rather than undermine, critical health care services in our communities. Sincerely, Cort Adelman Cort A. Adelman, JD
HRSA-2026-0001-2212Owensboro Health2026-04-20T04:00Z22,736 chars
See attached file(s) i t9f ew agi iisboro April 20, 2026 VIA PORTAL SUBMISSION Ms. Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives, HRSA 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 RE: Response from Owensboro Health, Inc. and Owensboro Health Twin Lakes Regional Medical Center, Inc. to Request for Information regarding the 340B Drug Discount Program Proposed Rebate Model (HHS Docket No. HRSA-2026-03042) ("RFI") Dear Ms. Britton: The purpose of this letter is to provide a response to your RFI regarding the 340B Drug Discount Program (the "340B Program" or "Program") proposed rebate model. This letter is provided to you on behalf of Owensboro Health, Inc. ("OHI"), which owns and operates Owensboro Health Regional Hospital (340B Prograrn Covered Entity SCH180038), located in Owensboro, Kentucky, and its affiliate, Owensboro Health Twin Lakes Regional Medical Center, Inc. ("OHTLRMC"), which owns and operates Owensboro Health Twin Lakes Medical Center (340B Program Covered Entity DSH180070), located in Leitchfield, Kentucky. Both of these hospitals are operated by Kentucky nonprofit corporations which are also 501(c)(3) tax-exempt entities. The hospitals are both Kentucky licensed acute care hospitals and serve patients in Western Kentucky and Southern Indiana through their inpatient and outpatient service lines. OHI and OHTLRMC each receive the financial benefit of savings on drug costs through the 340B Program and utilize those savings to the benefit of their patients. OHI and OHTLRMC have compiled data in response to the RFI and have set forth below responses in accordance with HRSA's specific requests in the RFI. The numbers below are combined for the two entities, unless otherwise noted, and are approxiniations, unless otherwise noted. 1. Costs to Covered Entities a. Current Administrative Costs under the Upfront 340B Discount i. For Calendar Year 2025, the total number of 340B transactions processed by both OHI and OHTLRMC was approximately 209,000. ii. In Calendar Year 2025, the total administrative costs related to the 340B Program for both OHI and OHTLRMC was approximately $370,000. 1 Owensboro Health iii. The key cost drivers are staff costs and vendor and consultant costs. b. Administrative Costs under a Potential 340B Rebate Model Pilot Program c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Will the implementation of a potential 340B Rebate Model Pilot Program require additional full-time ernployees or cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions? OHI and OHTLRMC will need move team members from current compliance roles to work in this area. Depending on the denial rate and reconciliation process, OHI and OHTLRMC may have to hire at least one additional team member to handle the new processes. ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or perrnanent. OHI and OHTLRMC would need to reallocate existing team members' time and responsibilities to ensuring compliance in managing rebates. If OHI and OHTLRMC hire a new FTE, he or she will likely spend time working on denials. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. If all the data is submitted to a third party, then OHI and OHTLRMC will need to have a report created and set up an interface with the third party to deliver the reports. The hope is that once the report is written and the drop-off point established, it could be set to auto-run on a weelcly basis. However, it is not clear at this time whether that is possible. ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. 2 Owensboro Health e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above (e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Progranl (e.g., rural, snlall business, conlnlunity health center). The economic impact on OHI and OHTLRMC from the One Big Beautiful Bill Act could inhibit our ability to hire staff to assist in ensuring compliance and challenging denials associated with the proposed Pilot Program. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Based upon our estinlates and assurnptions, including a 15% rebate denial rate, OHI and OHTLRMC believe that the negative impact to the 90 day cash on hand would be approximately $300,000 in 2026, $1.1 million in 2027 and $1.9 million in 2028. OHI and OHTLRMC also anticipate significant and unsustainable increases in upfront costs for drug purchases, including an approximately $1.2 million increase in 2026, $5 million increase in 2027 and $8.5 million increase in 2028. Given the small margins upon which OHI and OHTLRMC operate, these cost increases and negative impacts to cash on hand will likely materially impact OHI's and OHTLRMC's patient care services. Specifically, OHI and OHTLRMC will need to make cuts, including in personnel, to offset the increase in costs. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. 3 i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the tinieframes associated with those incentives. Under OHI's and OHTLRMC's current agreements, the sellers typically provide a cost minus on most drugs. If OHI and OHTLRMC have to extend payment terms, the cost minus could be greatly affected, leading to an increase in cost. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. OHI and OHTLRMC pay the wholesaler on the l0th and 30th of each month. If not paid on time, the contracts require a significant late fee charge until paid (typically around 15-20%). c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Based on the proposed model, OHI and OHTLRMC would expect a $4.5-$6 million dollar impact on a yearly basis, which is a two day loss per year in Days Cash on Hand. This is based on delays in receiving the rebate and the burden of proof that the manufacturers are pushing down on the covered entities. If OHI and OHTLRMC changes their payment timing without renegotiating the contract, they will be charged 18% of any past due balance. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. A penalty needs to created in a way that will encourage the manufacturer to provide the data needed within the 10 day window. I'm not sure if a dollar can be associated with this, but maybe in order for the manufacturer to keep in good standing with Medicare, they need to follow the guidelines. Hospitals should be able to request audits at the manufacturers expense if the denial rate or the turn around is unacceptable. 4 ew a g lisboro e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential casliflow impacts for covered entities. Each covered entity has several departments to which the proposed rebates would relate. We recommend including a requirement for the manufacturers to work with covered entities to include a mechanism to determine how to designate rebates to particular departments and offices within the covered entities. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Prograrn to ensure that denials are limited to appropriate circumstances. In the state of Kentucky, each hospital sends the state a list of items dispensed inpatient. We have been told the State used this report to remove any items that would be considered duplicate on the request they send to the manufacturer for rebates. The major issue with this process is that if the State rejects our report for any reason, the hospital may or may not be able to correct and resend. If the report is not accepted, then a note is dropped in the SFTP folder in which we put the report for the State to pick up. The 340B tearn does not have access to get these messages. If we could then what would we need to do with the items rejected by the State? We were not provided with any guidance on this. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Our hospitals support the use of template and standards forms. That way, when we look at a denial, we have all the data needed and an explanation as to why it was being denied. The timeline for adjudication of improper denials should be no more than 10 days. The longer this draws out, the more of an impact the hospitals will see on cash flow. 4. Data Collection by Covered Entities 5 icewarsboro a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to cariy out some or all of these activities. The hospitals send daily dispense reports to a third-party vendor. The third- party uploads the data and adjusts the accumulations accordingly. Dashboards and reminders from third-party note any items that need immediate attention, and a 340B analyst corrects, adds, or updates the itern in question. Orders are sent from the wholesaler to the third-party vendor. The vendor splits the order based on accumulations and sends the order to wholesaler on the GPO/WAC/340B accounts based on accumulations. There are some complications when working with certain contract pharmacies if their systems do not work with the third-party vendors. b. Identify current rneasures to ensure data accuracy, completeness, and consistency (e.g., validation checks, reconciliations, audits). Our hospitals conduct monthly mock audits on dispenses from the previous month in which the data is analyzed, and any issues are corrected. This includes correction to prevent any identified issues from occurring in the future as feasible. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one- time or ongoing. The front-end items that the covered entities undertake would stay the sarne. The hospitals would likely need to devise a report to submit to the rebate program. It should be a one-time creation. We would then need to run and submit the report within the required timeframe. Anytime a change is made to the program, the report would need to be manually updated. d. Describe the specific pharmacy and medical claims data elements that should conlprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Currently, the data elements for a pharmacy claims template that should comprise the rebate program and which are available are as follows: Contracted entity id Date of service Date prescribed NDC 6 a Owensboro )? Health Prescriber ID Prescriber ID qualifier Quantity RX number Service provider id Service provider ID qualifier Payer bin Payer pcn The data elements for a pharmacy claims template that should comprise the rebate program and which are not available are as follows: Wholesaler invoice number Ship to date Ship to location Account 340B Product serialization number Fill number Currently, the data elements for a medical claims template that should comprise the rebate prograrn and which are available are as follows: Claim number Claim line number Date of service HCPCS code Health plan name Health plan id NDC11 Quantity Unit of measure The data elements for a medical claims template that should comprise the rebate program and which are not available are as follows: HCPCS code modifier Rendering physician id Service provider id Wholesaler invoice number 340B ID (which will need to be haidcoded to the repott, as it does not appear in the hospitals' EMR) We recommend one central location to send this data to as well as one, unified format. Before sending data, the hospital needs to vet the supplier for risks associated with sending the supplier the data. 7 Fiew arsboro Ideally, we would have a single supplier to send all the data to with the standards being created by a third party that ensures that there is a level playing field between manufacturers and covered entities. Manufacturers should have to prove that this process is needed and the hospitals should be able to state what data is obtainable. The third-party supplier would need to be available for Legal, IT, Cyber Security, and other departments monitoring the risk of sharing data. There also needs to be a way to automate the sharing of data. The hospital generates a report and drops in a secure location, for example an SFTP folder, and the supplier picks the data up for processing. If automation is available, then there is less ongoing work for the hospital. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. The state of Kentucky requires hospitals to send a report for all Medicaid dispenses. We also have the hospitals set as carve in for Medicaid with HRSA and the NPIs for all the pharmacies listed. This is the same for the entity- owned retail and specialty pharmacies. This process is extremely reliable, eliminating the need for this rebate program as a means to mitigate risk in this compliance area. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. OHI and OHTLRMC are still working through coming up with a process. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. 8 6t).i ssewagrlisboro lt d. Identify any challenges encountered (e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs (e.g., Medicare and Medicaid). e. Identify the nlinimum data elements you believe are necessary for a nlanufacturer to identify potential duplicate discounts under 340B and CMS paynlent programs and the potential for the 340B Rebate Model Pilot Prograrn to be an additional or alternative source for those data elenlents. OHI and OHTLRMC believe that the following data elenlents are necessary: Date of Service Date Prescribed RX Number Fill Number - Retail only 11 digit NDC Quantity Dispensed Prescriber ID Service Provider ID 340B ID Rx Bank Identification Nurnber (BIN) - Retail only Rx Processor Control Nurnber (PCN) - Retail only 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure conlpliance with a potential 340B Rebate Model Pilot Program? Issues found should be reported back in the same amount of time the hospitals receive for reporting. Hospitals would need a hospital identifier, patient identifier., date, quantity, drug name, reason why it was rejected. b. What specific rnanufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Manufacturers should disclose the percentage of denials and the monies manufacturers have held onto through the denial process. In addition, manufacturers should disclose an average turnaround tinle on denial responses. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? 9 ? Owensboro . Health The frequency and duration should be equivalent to the reporting requirements for the covered entities. 7. 340B Program Itrtegcity and other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B progranl. 340B was intended to offset the cost to serve indigent patients. This program will add costs to the program, decreasing savings, and the number of patient services and reducing funds for resources needed (patient supplies, equipment, and staffing). b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; OHI and OHTLRMC do not believe that the proposed rebate process will give the hospital or manufacturers any additional insight into duplicate discounts. The hospital would be missing the state's requests to the manufacturer. Hospitals need to know what the state provides to the manufacturer for each quarter regarding their rebates. If the manufacturer conies back stating thete is a duplicate discount issue, how do they prove it? How do the hospitals contest it? Will we have to work with the state to validate the manufacturer's denial claim? There are more questions than answers and this process could further complicate the system, rather than enhance it. We already have HRSA audits which look for duplicate discounts, as well as a requirement for internal audits/mock audits. The state of KY requires a quarterly report to be sent of 340B dispensed drugs to Medicaid patients. The state uses this data to remove these items from the rebate requests it sends to manufacturers. Thus, there are already sufficient safeguards against duplicate discounts, in our opinion. ii. Reduce diversion ot improper claims; and OHI and OHTLRMC are not clear on how the manufacturers will be able to identify improper claims under the rebate program. Thus, we are not convinced that there will be compliance enhancement through the program. 10 Owensboro Health iii. Increase pricing transparency across stakeholders. OHI and OHTLRMC do not believe that this proposed program will enhance transparency. Will we be able to get a pricing report from the manufacturers stating what our price is so we can compare to current catalog pricing? There are other means to increase transparency without upsetting the current structure and causing unnecessary financial risk to covered entities. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. We recommend that the system remains as is. If manufacturers believe duplicate discounts are occurring, there is an audit system in place to determine and confirm compliance. d. Describe any other potential benefits (e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. OHI and OHTLRMC do not see any benefits that outweigh the costs. This would simply be another layer of reporting and opportunities for the manufacturers to deny claims. The proposed rebate model will add additional challenges and hardships to the hospitals and not accomplish the purported compliance goals. Thank you for the opportunity to provide information on this program. Sincerely, -aolilvd, Mark Marsh President and Chief Executive Officer Owensboro Health, Inc. Chief Executive Officer Owensboro Health Twin Lalces Regional Medical Center, Inc. 11 b LitAt inr1 Ashley Herrington
HRSA-2026-0001-2213Rural Health Care, Inc., DBA Aza Health2026-04-20T04:00Z31,603 chars
See attached file(s) ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 April 20, 2026 Chantelle Britton - Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Rural Health Care Inc., dba Aza Health, I appreciate the opportunity to provide comments on the proposed 340B Rebate Model Pilot Program. Aza Health is a Federally Qualified Health Center serving more than 37,000 patients annually through integrated primary care services and a network of entity-owned pharmacies. Our pharmacies dispense approximately 156,000 prescriptions each year, many of which are made affordable through the 340B program for uninsured and underinsured patients. We write to clearly and unequivocally oppose the implementation of a rebate- based model within the 340B program for Community Health Centers (CHCs). The proposed model represents a fundamental shift away from the statutory intent of the program and introduces operational, financial, and clinical risks that would directly undermine patient access to care. I. The Rebate Model Undermines the Purpose of the 340B Program For more than three decades, the 340B program has allowed CHCs to purchase medications at reduced prices to stretch limited federal resources and expand access to care. The rebate model reverses this structure by requiring CHCs to purchase medications at full wholesale acquisition cost and wait for reimbursement. This change is not just administrative. It fundamentally alters how care is delivered. 1 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 Requiring upfront WAC purchasing introduces immediate financial strain and removes the ability to provide real-time affordability at the pharmacy counter. CHCs are not structured to finance manufacturers' obligations. Even short delays in rebate reconciliation would create material cash flow disruptions across multi- site pharmacy operations like ours. II. Direct Impact on Patient Access and Care Delivery The most immediate and concerning consequence of a rebate model is its effect on patients. CHCs serve populations with higher rates of chronic illness, limited financial resources, and fewer alternative care options. These patients depend on receiving medications at an affordable price at the time they are dispensed. A retrospective rebate structure makes that model operationally unworkable. Without access to upfront 340B pricing, CHCs lose the ability to consistently offer reduced-cost medications through sliding fee programs. In practice, this results in: Patients delaying or abandoning prescriptions due to cost uncertainty Providers selecting therapies based on affordability rather than clinical appropriateness Declines in medication adherence, particularly among patients with chronic conditions Many of the medications included in the proposed model are essential therapies used to manage diabetes, cardiovascular disease, and behavioral health conditions. Interruptions in access to these medications will lead to preventable complications and increased utilization of emergency and inpatient services. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications 2 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. The rebate model introduces a barrier at the exact point where the 340B prograrn was designed to remove one. III. Operational Disruption to In-House Pharmacy Models For organizations like Aza Health that operate entity-owned pharmacies, the rebate model introduces significant operational disruption. Our current workflows are designed around real-time pricing, allowing us to provide patients with clear, consistent, and affordable medication costs at the point of care. A rebate-based system removes that certainty and requires the introduction of entirely new processes to track, submit, and reconcile rebate claims. This includes: Managing separate data submission requirements across multiple manufacturers Reconciling payments against estimated pricing rather than known acquisition cost Investigating and appealing denied or delayed rebate claims These processes are not currently supported within standard pharmacy management systems and would require system modifications, new workflows, and ongoing administrative oversight. Most importantly, this shifts staff time away from patient care and clinical services and toward administrative reconciliation activities. 3 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (9041 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 Interlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 IV. Financial Risk and Cash Flow Instability The requirement to purchase medications at full WAC introduces substantial financial risk for CHCs. As a multi-site pharmacy operation, our organization depends on predictable drug acquisition costs to maintain inventory and ensure uninterrupted patient access. A rebate model disrupts this stability by introducing a delay between purchase and reimbursement. Even under ideal conditions, this delay creates a gap where significant capital is tied up in inventory. In practice, delays related to submission timelines, claim validation, and dispute resolution will extend this timeframe and create ongoing liquidity challenges. To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 4 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate the increased upfront drug spend would cost $1,733,696.71 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $94,648.62 to purchase these same drugs at the 340B ceiling price. This number increases significantly each year more MFP drugs are added. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Rural Health Care, Inc. D/B/A Aza Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back essential, non-revenue-generating services, including our mobile health unit, which provides free transportation to healthcare appointments across the county and delivers immunizations to patients in rural areas, as well as our medication therapy management and diabetes self- management education programs for patients with complex conditions. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund other direct patient care workers such as behavioral health providers, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot 5 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 provide the "bridge" support that prevents our 5,283 uninsured patients from rationing their insulin or heart medication. A. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Rural Health Care, Inc. D/B/A Aza Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Rural Health Care, Inc. D/BIA Aza Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $547,060.44. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 6 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 interlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: po4) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Rural Health Care, Inc. D/B/A Aza Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Rural Health Care, Inc. D/B/A Aza Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual loss. This is something our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. 7 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 Interlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi- billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Additional risks include: Rebate denials with limited transparency Variability between expected and actual rebate amounts Loss of purchasing efficiencies tied to current acquisition models This model effectively shifts financial risk from manufacturers to safety-net providers, which is inconsistent with the purpose of the 340B program. V. Existing Compliance Frameworks Are Sufficient CHCs already operate under extensive federal oversight and compliance requirements. Through the Health Center Program and the 340B statute, CHCs maintain sliding fee discount programs, undergo regular audits and operational site visits, and report detailed utilization and financial data annually. These structures already ensure program integrity. The rebate model does not strengthen compliance. It introduces unnecessary complexity, cost, and risk into a system that is already highly regulated and functioning as intended. 8 105 Whitehall Dr. Ste 109 St. Augustine, FL 32086 Phone: (904) 829-2782 Fax: (904) 829-2494 DENTAL 250 State Rd. 207 St. Augustine, FL 32084 Phone: (904) 824-3322 Fax: (904) 810-2004 VOLUSIA COUNTY MEDICAL 1425 Dunn Ave Daytona Beach, FL 32114 Phone: (386) 323-9600 Fax: (386) 323-9695 Sincerely, omo ief Financial Officer Rural Health Care Inc. D/B/A Aza Health 9 ADMINISTRATION 146 Comfort Rd. Mail: P.O. Drawer 817 Palatka, FL 32178-0817 Phone: (386) 328-0108 Fax: (386) 325-1086 ALACHUA COUNTY MEDICAL 22066 S.E. 71st Avenue Hawthorne, FL 32640 Phone: (352) 481-2700 Fax: (352) 481-2392 DENTAL 410 NE Waldo Rd. Gainesville, FL 32641 Phone: (352) 375-3790 Fax: (352) 375-3791 CLAY COUNTY MEDICAL 1305 N. Orange Ave., Ste 120 Green Cove Springs, FL 32043 Phone: (904) 284-5904 Fax: (904) 284-5905 100 Commercial Dr. Keystone Heights, FL 32656 Phone: (352) 473-6595 Fax: (352) 473-6597 FLAGLER COUNTY MEDICAL 460 Palm Coast Pkwy SW Ste 5 Palm Coast, FL 32137 Phone: (386) 246-3954 Fax: (386) 246-3960 PUTNAM COUNTY MEDICAL 306 Union Ave. Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-4154 1213 State Rd 20 lnterlachen, FL 32148 Phone: (386) 684-4914 Fax: (386) 684-6524 1302 River St. Palatka, FL 32177 Phone: (386) 328-8371 Fax: (386) 328-1519 DENTAL 306 Union Avenue Crescent City, FL 32112 Phone: (386) 698-1232 Fax: (386) 698-5845 2503 President St. Palatka, FL 32177 Phone: (386) 328-7638 Fax: (386) 328-9644 ST JOHNS COUNTY MEDICAL 201 W. Lattin St. Hastings, FL 32145 Phone: (904) 692-1508 Fax: (904) 692-1509 VI. Recommendation Given the operational, financial, and clinical risks outlined above, we strongly urge HRSA to exclude Community Health Centers from participation in any 340B rebate model pilot. The current upfront discount structure is essential to maintaining access to affordable medications for the populations we serve. Any shift away from this model would undermine the ability of CHCs to deliver timely, effective, and equitable care. Conclusion Aza Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Rural Health Care Inc., D/B/A Aza Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. We appreciate the opportunity to provide input and welcome continued engagement on this issue.
HRSA-2026-0001-2214Zufall Health Center, Inc.2026-04-20T04:00Z46,220 chars
Please see attached response from Zufall Health, Dover, NJ April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Zufall Health, a community health center (CHC) serving NJ residents for 35 years, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: x Financial Losses: Zufall Health anticipates losses exceeding $570,000 in 2026, growing to over $1.48 million annually by 2028 from entity-owned pharmacy operations. x Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Zufall Health is a community health center dedicated to providing access to high-quality, affordable, and culturally responsive healthcare for individuals and communities facing barriers to care. Through a comprehensive, patient-centered approach, Zufall Health delivers primary care, specialty services, and supportive programs that address medical, dental and social needs. The organization is committed to advancing health equity and creating equal opportunity for all individuals to achieve optimal health outcomes. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Zufall Health in particular, this means it will impact: x 55,413 340B transactions x 52,088 patients served at Zufall Health x $1,691,630 in administrative cost x Our ability to subsize the federally required sliding fee scale that adjusts fees according to income and family size without regard to actual costs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.0F1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.1F2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.2F3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.3F4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.4F5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,5F6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture DFWLYLW\ DQG FOLQLFDGPLQLVWHUHG GUXJ WUDFNLQJ PRGHOV WR VXSSRUW RSHUDWLRQDO FRVW IRUHFDVWLQJ. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. x Sliding Fee Discount: Zufall Health provided $22,828,003 in sliding fee discounts through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. x Staffing Impact: Zufall Health anticipates needing 1 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. x External Vendor Costs: Given the increased complexity associated with the rebate model, Zufall Health anticipates an increase of approximately $30,050 annually in costs for external support vendorsnearly tripling current vendor-related expenses. These vendors may include 340B consultants, legal counsel, program coordination services, third-party administrators, electronic medical record systems, pharmacy software vendors, and reconciliation support services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. x According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.6F7 Based on current prescription volume, multi-platform reconciliation requirements, and existing 340B program complexity, our organization estimates the need for at least 1.0 full-time equivalent (FTE) dedicated to 340B data extraction, claims reconciliation, and denial management. This role would be essential to ensure compliance with manufacturer reporting requirements and to manage ongoing discrepancies across third-party administrators and manufacturer portals. x Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7F8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Based on our organizations internal analysis, the projected financial impact significantly exceeds these estimates. We anticipate an annual rebate opportunity loss of approximately $572,769 in 2026, increasing to $755,532 in 2027 and $1,483,169 by 2028 due to rebate denials and loss of cost-minus pricing. In addition, the requirement to purchase drugs at wholesale acquisition cost (WAC) is projected to increase upfront annual drug spend by approximately $3.8 million in 2026, $5.0 million in 2027, and over $6.2 million by 2028representing increases of 254% to 579% in inventory spend. These costs, combined with the need to hire at least one full-time 340B Data & Compliance Analyst (estimated at $83,000$90,000 annually), create a substantial and unsustainable financial burden that directly threatens the Covered Entitys ability to maintain affordable access to medications for its patient population. x Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Based on our organizations annual volume of over 55,000 prescriptions and administered drugs across entity-owned and contract pharmacy arrangements, we estimate approximately 40 hours per week (1 FTE) will be required to extract, validate, submit, and reconcile 340B rebate claims across multiple third-party and manufacturer platforms. Zufall Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. x One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. An additional $10,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. x Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We will also need to increase annual auditing fees by approximately $6,000. These are permanent, recurring costs that diminish our 340B savings. x Total Cost: For our CHC, which serves 52,088 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $125,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. x System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. These systems were not designed to communicate in real time for rebate validation, requiring the development of new data interfaces, manual workarounds, and cross-platform reconciliation processes to ensure compliance with manufacturer-specific requirements. This level of system fragmentation and manual validation introduces a high risk of discrepancies, delayed reimbursement, and audit exposure, further compounding financial and operational strain on the Covered Entity. x One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. x Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 16 pharmacies to increase access to affordable medications. x TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. x Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 16 different pharmacy locations to ensure rebates are paid correctly. x Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Northern New Jersey with no affordable medication options. Over 17 percent of the U.S. population lives in a 7 pharmacy desert already,8F9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9F10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10F11 x Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. x Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. x Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. x HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11F12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12F13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Zufall Health adheres to all applicable statutory and regulatory requirements related to sliding fee discounts, ensuring medications are provided at reduced, income-based pricing at the point of sale for eligible patients. In addition, we offer free medication delivery services, further reducing barriers to access for individuals who may face transportation or socioeconomic challenges. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13F14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14F15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15F16 For individual MDPNP Price Applicability Years, the calculator evaluates: x Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. x Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. x Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). x Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 x WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, currently, our organization spends approximately $4.3 million annually on 340B medications across all drug classes. For the 10 selected drugs alone, we project an increase in annual spend of approximately $3.8 million under the proposed rebate model, representing a 254% increase in upfront inventory costs for those medications. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Zufall Health anticipates needing to reduce: x Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy, nutrition counseling, mobile health services, medication delivery, and more. x Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Case Manager, directly increasing wait times for connections to essential services. x Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 26,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Zufall Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. x Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial 11 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. x Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Zufall Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $755,532.02 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Zufall Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $312,011 in 2026, $411,871 in 2027, and $457,616 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $28,000 annuallyfunds that are currently dedicated to direct service provision. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Zufall Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Zufall Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16F17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of approximately $572,769 in 2026 alone. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges ,I +56$ SURFHHGV ZLWK D UHEDWHEDVHG SULFLQJ PRGHO WKH SURJUDP PXVW LQFOXGH FOHDU HQIRUFHDEOH operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: x A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); x 6WDQGDUGL]HG SXEOLFO\ GHILQHG GHQLDO FDWHJRULHV ZLWK FODLPOHYHO GRFXPHQWDWLRQ x Rebate payment timing requirements must apply to both initial and corrected determinations. ,I +56$ DGRSWV D GD\ SD\PHQW UHTXLUHPHQW WKDW UHTXLUHPHQW PXVW UXQ IURP ERWK WKH LQLWLDO determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; x A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; x Manufacturers must bear the burden of establishing that a rebate is not owed; x Rebate determinations must align with statutory patient definition: HRSA should explicitly SURKLELW UHEDWH GHQLDO PHWKRGRORJLHV WKDW UHO\ RQ PDQXIDFWXUHUGHILQHG SDWLHQW HOLJLELOLW\ standards or undisclosed validation criteria. x OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. x In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 13 x CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. x CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. x CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: x Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. x Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. x Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. x Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. x Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. x Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. x Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion 14 Zufall Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Zufall Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Zufall Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at fpalm@zufallhealth.org or by phone at 973- 985-8120. Sincerely, Frances L. Palm, MPA President & CEO
HRSA-2026-0001-2215ChristianaCare2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-2195
HRSA-2026-0001-2216Exelixis, Inc.2026-04-20T04:00Z27,122 chars
Please see attached comments from Exelixis, Inc. Exelixis appreciates the opportunity to respond to the Health Resources and Services Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI).1 Exelixis is a midsize, innovative, research-based biotechnology company that is driven by a singular focus accelerating the discovery, development, and commercialization of new medicines for difficult-to-treat cancers. Our mission is to help cancer patients recover stronger and live longer. Exelixis is strongly committed to ensuring that patients are able to access our medicines when prescribed by their treating physician. Exelixis supports the original intent of the 340B Program: to expand access to life-saving medicines to low-income and underserved patients.2 We are troubled, however, that abuses of the 340B Program are going unchecked due in large part to profit-driven motives of covered entities and other unintended beneficiaries of the 340B Program, including hospitals and for-profit pharmacies and third-party administrators. Despite longstanding statutory prohibitions on Medicaid duplicate discounts and diversion of 340B medicines to individuals who are not th of these violations are rampant under the current system. The Inflation Reduction Act (IRA) exacerbates these program integrity concerns, because it introduces a new set of 340B nonduplication requirements under the Medicare Drug Price Negotiation Program (DPNP) and the Inflation Rebate Programs. In particular, the 340B nonduplication requirement under the DPNP coupled with Centers for Medicare & Medicaid 1 2 Services (CMS) guidance requiring maximum fair price (MFP) rebates to be paid within 14 days introduces unprecedented complexity to the 340B Program. Exelixis supports flipping the 340B Program on its head. The current system, under which manufacturers generally offer the 340B price as an upfront discount, is not working. We believe that the most effective and perhaps the only way to ensure compliance with the full range of statutory duplicate discount prohibitions and the prohibition on diversion is if manufacturers are able to offer the 340B price as a retrospective rebate to all covered entity types, which the 340B statute explicitly authorizes.3 If manufacturers are able to verify a 340B eligibility before such pricing is offered, it will promote program integrity and ensure compliance with statutory requirements. Exelixis strongly supports the Model.4 In our comments below,5 we generally support the structure of the prior Rebate Model Pilot Program, which was terminated following litigation on procedural issues.6 In particular, given the strong potential for a Rebate Model to address a wide range of program integrity issues not just under the DPNP we encourage HRSA to move quickly to establish a Rebate Model that includes all 340B drugs and that could be used to promote compliance with a range of statutory requirements, including duplicate discount prohibitions under Medicaid and the DPNP, diversion, and other improper claims. We also believe that data from a Rebate Model could provide an effective and efficient means for CMS to exclude 340B units from the Medicare Part B and Part D inflation rebate calculations. The 340B Program has historically faced a number of integrity issues, including violations of the statutory prohibitions on 340B and Medicaid duplicate discounts and the diversion of 340B . The IRA further compounds these integrity problems by introducing new prohibitions on duplicate discounts under the DPNP and the Medicare Part B and Part D Inflation Rebate Programs. Moreover, covered entities are Exelixis supports shifting from the current pay-and-chase system to a 340B Rebate Model, which would 3 4 5 6 be a more efficient and effective way to address these concerns and restore patient-centered focus. Since Congress established the 340B Program in 1992, it has exploded in size, becoming the second largest federal healthcare program, behind only Medicare Part D.7 In 2024, 340B discounted purchases hit the highest level yet, $81.4 billion, representing a year-over-year increase of 23 percent.8 In contrast, from 2007 to 2009, 340B discounted purchases were approximately $4 billion per year.9 340B Program growth has particularly impacted oncology medicines, which are estimated to make up over half of all 340B discounted drug sales.10 Applying that growth to Exelixis as an example, from 2019 to 2025, the number of units the company provided at 340B pricing increased by approximately 250 percent. The ever-increasing volume of 340B discounts depletes resources that midsize biotech companies, like Exelixis, would otherwise invest in R&D to develop the next generation of innovative, critical medicines that serve the American public health.11 This growth has been driven, in large part, by policies that have permitted more entities to participate in the 340B Program,12 creating a profit stream for corporate hospital systems, national chain pharmacies, and pharmacy benefit managers (PBMs) with no direct or even 7 8 9 10 11 12 measurable indirect benefit for vulnerable patients.13 Rather, these corporate entities have a strong financial incentive to increase 340B-priced purchases, in order to pad their profits.14 Corporate hospital entities grow ever more creative in the methodologies they deploy to increase their ability to purchase 340B-priced drugs. For example, covered entities are expanding their reach into more affluent areas (through contract pharmacies, child sites, and consolidation) with 340B drug discou 15 In particular, Congress has expressed concern about covered entities eligibility and reopening formerly- -off, wealthier neighborhoods.16 Moreover, establish basic registration requirements before an off-campus facility qualifies as a child site puts police this behavior in question.17 The 340B Program is replete with abuse, including Medicaid/340B duplicate discounts that are not being effectively detected or prevented.18 For covered entities that - use 340B drugs for their Medicaid fee-for-service patients), HRSA has established the Medicaid Exclusion number are not eligible for a Medicaid rebate.19 However, there are significant gaps in the MEF. First, applies to Medicaid fee-for-service only, and thus does not 20 13 14 15 16 17 18 19 20 21 Second, the MEF does not list the billing number of a covered ent creating a substantial vulnerability for oral cancer medicines, like Exelixis manufactures. While HRSA guidance recommends that covered entities, contract pharmacies, and states develop arrangements to prevent duplicate discounts,22 government watchdogs have found that these policies may not always prevent duplicate discounts particularly in Medicaid managed care. CMS also has issued guidance on best practices to prevent duplicate discounts, but these recommendations are non-binding23 and states have adopted differing approaches.24 In a 2020 report, the Government Accountability Office (GAO) concluded that the current not only puts drug manufacturers at risk of providing duplicate discounts, but also 25 The U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) has expressed similar concerns, stating that for Medicaid managed care, B claims are needed to ensure compliance with the statutory prohibition on duplicate discounts, and recommending method.26 Given the pervasive duplicate discounting in the 340B and Medicaid programs, it is troubling that in the initial price applicability year (IPAY) 2028 Final Guidance, CMS maintains that it will not, at this time, assume responsibility for nonduplication of discounts between the 340B ceiling price and MFP 27 is not charged with verifying or otherwise reviewing whether a particular drug claim is a 340B-eligible claim 28 Instead, CMS strongly encourages manufacturers to work with dispensing entities, covered entities and their 340B TPAs, and other prescription drug supply chain stakeholders (e.g., wholesalers) to 21 22 23 24 25 26 27 28 facilitate access to the lower of the MFP and the 340B ceiling price 29 CMS anticipates this will include utilizing data available from covered entities and their 340B TPAs, and other prescription drug supply chain stakeholders to ensure the process is not unduly burdensome for 30 It is unclear how CMS expects that manufacturers will be able to identify claims subject to the statutory nonduplication requirement, without sufficient information and within the 14-day prompt MFP payment window .31 Covered entities often resist providing claims data, and even if they do eventually provide claims data, the prevailing replenishment model creates significant delays that make it infeasible for manufacturers to determine the 340B status of a given unit prior to the 14-day deadline.32 The combination of s abdication of 340B deduplication to manufacturers, the short MFP payment window, and the replenishment model make it critically important that manufacturers be able to use a Rebate Model to have the data necessary to deduplicate MFP and 340B discounts. The risk of 340B/MFP duplicate discounts is particularly pronounced for manufacturers of oncology medicines, with the Congressional Budget Office recently reporting that as of 2021, 47 percent of 340B spending at hospital-based facilities was on cancer drugs.33 In addition, HRSA reported that in 2024, four of the top ten drugs in terms of 340B purchases were oncology drugs, representing nearly $14 billion in aggregate spend or more than 15 percent of total 340B sales.34 Our internal data also suggests that, for Exelixis, the risk of 340B duplicate discounts may be even greater under the IRA than Medicaid or commercial channels. The data shows that Medicare patient site of care for our medicines tends to be in a hospital or hospital outpatient department, many of which qualify as 340B covered entities (or child sites). 35 29 30 31 32 33 34 35 36 37 38 39 40 In our experience, covered entities are persistently finding new ways to maximize their financial benefit from the 340B Program, often beyond the limits of the 340B statute. Below, we provide recent examples of program abuse that we are observing at alarming rates. Multiple Covered Entities Seeking 340B Pricing on a Single Unit of a Drug. Based on claims-level data that Exelixis collected, we have identified numerous instances where more than one covered entity submitted replenishment orders at the 340B price on the same drug unit. Our understanding is that this occurs because covered entities contract with third-party administrators that use algorithms to identify whether an individual is a 340B patient after a drug is dispensed by a contract pharmacy. In certain instances, if the third-party administrator reports that the individual to whom the product was dispensed is iple covered entities, then multiple covered entities may direct the 36 37 38 39 40 contract pharmacy to replenish the unit with a unit purchased at the 340B price. For example, this may occur with a rural oncology patient who is seen initially at a local community hospital, referred to a specialist at an academic medical center, and then receives follow-up care at the community hospital. It also may occur with a patient who lives in one area for part of the year and another area for the rest of year, and thus may initially receive treatment at one hospital and then may later receive additional treatment at a different hospital. If multiple covered entities direct a contract pharmacy to replenish a unit dispensed to a 340B patient with a unit purchased at the 340B price, then multiple 340B units were purchased based on only one unit dispensed to a 340B patient. The 340B units purchased commercial inventory and may be dispensed to non-340B patients. This is a brazen abuse of 340B Program rules and conflicts with multiple statutory a multiple covered entities on a single unit of a drug.41 Moreover, each provides that a covered entity shall not resell or otherwise transfer a 340B drug to a 42 Genesis, a federal court held that an individual can be a care the individual received at a covered entity.43 A recent study found that if covered entities adopt the Genesis of 340B fills that could be claimed by more than one covered entity.44 Although this profits could increase by one-third creates a strong financial incentive for it to continue.45 Alternative Distribution Models. Alternative distribution channels create a lack of transparency in the system and obfuscate the established process for bill to/ship to arrangements. We have seen arrangements where pharmacies may be transferring product to covered entities or where a credit/debit model is used instead of shipping product to national specialty pharmacies and technology companies distribute marketing materials 41 42 43 44 45 46 In many cases, these models transfer reselling or otherwise transferring a 340B 47 Further, these models make any duplicate discount identification impossible due to the lack of transparency regarding where particular units end up. With respect to its arrangements with certain specialty pharmacy customers, in recent months, Exelixis has documented a clear discrepancy between the estimated inventory that Exelixis expects the pharmacies to have and the actual inventory data reported by the pharmacy. In many cases, specialty pharmacies have significantly more inventory than expected. Historically, the actual and expected inventory data have been in alignment. The pharmacies have indicated that the delta between actual and expected inventory is due to 340B activity. Exelixis believes this recent divergence is likely due to the , including covered entities transferring inventory to specialty pharmacies to dispense. Shifting Between Replenishment and Physical Inventory Models. In addition, Exelixis has recently documented multiple covered entities placing unusually large orders of product at the 340B price, departing from their typical, longstanding practice of only purchasing product to replenish their inventory of dispensed product. It appears that such covered entities may be shifting away from a replenishment model and are instead purchasing physical inventory that will sit on its shelves and presumably be dispensed to 340B patients in the future. Others may be retroactively reclassifying product as a 340B drug well after dispense. We believe it is highly unusual for covered entities to switch between the replenishment model and the use of physical 340B inventory and are concerned that this change presents compliance challenges. Specifically, we are concerned that covered entities may be placing unusually large orders of product at the 340B price prior to identifying any 340B patients eligible for the product, and that this physical inventory could easily be dispensed to non-340B eligible patients in violation of the diversion prohibition. These orders also make it nearly impossible to identify duplicate discounts given the inability to compare data elements supporting the purchases to Medicaid invoices. Under the current upfront discount system, manufacturers only recourse for suspected 340B Program statutory violations is to initiate a good faith inquiry (GFI) and if that does not resolve the issue, request an audit of the covered entity and potentially initiate an administrative dispute 46 47 resolution (ADR) proceeding. However, these options fall far short of addressing 340B Program integrity issues. As an initial matter, the GFI process is not working. Exelixis regularly reviews sales data internally to identify potential compliance issues with the duplicate discount and diversion statutory requirements. When Exelixis becomes aware of sales activity that it believes may amount to a violation of 340B statutory requirements, Exelixis may initiate a GFI to seek additional information from the covered entity to resolve the compliance concern, in accordance with guidance from HRSA. While in theory, we could initiate an ADR proceeding, we would have to conduct an audit before filing an ADR claim.48 And getting HRSA 49 which is virtually impossible to do without claims-level data. If a covered entity refuses to comply with the GFIs and provide the claims-level data, manufacturers cannot avail ourselves of the remedies that are theoretically available to us. Even if HRSA were to allow an audit, In addition, audits and the ADR process are burdensome for both covered entities and the federal government. Exelixis is also troubled by the challenges of disputing duplicate discounts with states. Our understanding is that at least ten state Medicaid Programs do not allow manufacturers to dispute Medicaid/340B duplicate discounts so even if Exelixis has claims data supporting that a Medicaid/340B duplicate discount has occurred, we may not be able to initiate a dispute with a state. which we believe is perhaps the only way to address 340B program abuse and ensure compliance with 340B statutory requirements. A Rebate Model would introduce much-needed transparency to the 340B Program. Under the current upfront discount model, manufacturers have no way of knowing whether a unit is eligible for 340B pricing when a pharmacy or provider acquires a drug. Pharmacies and providers typically serve a mix of different patients, and at the time of acquisition, it is not known which patient will receive the drug and the applicable drug price. 48 49 This lack of transparency has shielded significant program abuse, with no corresponding benefit to patients. Data from a Rebate Model could prevent statutory violations from occurring in the first place, increasing efficiencies for the government, covered entities, and manufacturers. In addition, when an audit is needed, a Rebate Model would provide manufacturers with more fulsome data to demonstrate reasonable cause. manufacturers to have access to claims data. Exelixis supports flipping the 340B Program on its head. Instead of manufacturers providing an upfront discount when a provider or pharmacy acquires a 340B medicine, covered entities should first provide minimal claims data demonstrating that the claim is 340B-eligible. After reviewing data to confirm that the claim conforms with the applicable statutory requirements, manufacturers would then offer the 340B price as a retrospective rebate. This simple switch in how 340B pricing is offered would facilitate compliance with 340B Program requirements more effectively and efficiently than the current pay-and-chase system. Moreover, rebates are explicitly authorized under the 340B statute,50 and have been a longstanding mechanism for manufacturers to offer the 340B price to AIDS Drug Assistance Program (ADAPs).51 Rebates also are commonly used to facilitate access to reduced pricing to other federal and commercial healthcare programs, such as the Medicaid Drug Rebate Program, the IRA, and TRICARE.52 Generally, Exelixis supports the structure of the prior Pilot Program that HRSA announced last year. However, given the strong potential for a Rebate Model to address a broader range of statutory requirements and well-documented program integrity issues, we request that HRSA adopt the following refinements: Open Up the Rebate Model to All 340B Drugs. The prior Pilot Program was limited to drugs selected under the DPNP for IPAY 2026, and in an information collection request (ICR) accompanying the RFI, HRSA suggests that it is considering a Rebate Model that would be limited to IPAY 2026 and 2027 selected drugs.53 However, the statute places a 50 51 52 53 that establishes the benefits of a Rebate Model.54 Given that MFP deduplication is just one of many program integrity issues afflicting the 340B Program, we urge HRSA to open up a Rebate Model to any manufacturer of a 340B drug who wishes to participate. To the extent that HRSA moves forward with a Pilot, we urge HRSA to focus first on therapeutic areas that have the largest 340B Program exposure, which as discussed above, includes oncology medicines.55 We also urge HRSA to conduct frequent evaluations on the benefits of a Rebate Model, which we are confident will support expanding a Rebate Model to all 340B drugs. Use 340B Rebates to Guard Against All Statutory Violations. Exelixis appreciates that manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs 56 The potential for a more expansive scope is deduplication for MFP or 340B rebate provided to another covered entity on the same claim 57 Exelixis requests that the Rebate Model be used to facilitate compliance with statutory nonduplication requirements with Medicaid and MFP rebates. As discussed in Section I, current systems (including the MEF) have significant gaps, and deduplicating 340B and without access to basic claim-level data. We strongly encourage HRSA to establish a Rebate Model that facilitates compliance with the Medicaid and DPNP nonduplication requirements. Exelixis also requests that the Rebate Model be used to ensure that 340B medicines are improper claims (e.g., more than one covered entity seeking 340B pricing on the same unit). Finally, we believe that a Rebate Model could bring transparency to the 340B Program that would have other beneficial purposes. For instance, manufacturers who participate in the Rebate Model could elect to share data with CMS to facilitate the exclusion of 340B units from the Medicare Part B and Part D inflation rebate calculations. As discussed above, neither the Part B modifier nor the Part D Prescriber-Pharmacy methodology (coupled with a voluntary claims data repository) accurately identify 340B units, as the Inflation Rebate Program statutes require.58 Providing manufacturers with the option to provide Rebate Model data to CMS could help solve this problem. For manufacturers that do not participate in the Rebate Model (or that elect not to 54 55 56 57 58 share data with CMS), CMS could rely on existing methods to identify and exclude 340B units from the inflation rebate calculation. 59 60 61 62 Second, if a Rebate Model is structured like the prior Pilot Program, it should not create cashflow concerns for covered entities. The prior Pilot Program would have had a 10 calendar day deadline for manufacturers to pay 340B rebates (or deny claims), and the RFI indicates that a future Rebate Model may also include a 10 calendar day deadline.63 If anything, covered entities may receive a 340B rebate faster than they do today. A 10 calendar day payment deadline is 59 60 61 62 63 with wholesalers, which we understand generally is 30 days.64 Additionally, in many cases, covered entities may access the 340B price faster than under the prevailing replenishment model. Under the replenishment model, covered entities often purchase 340B drugs at the commercial price and then replenish the drugs at the 340B price once the entire drug package has been dispensed or administered to 340B patients. In our experience, covered entities have waited six months to over a year to request replenishment. We have also had multiple covered entities purchase multiple months of product inventory at a time, which they then replenish at the 340B price, which takes up to several months given the volume. Thus, a 10 calendar day deadline, which would not depend on whether the full package has been dispensed or administered to 340B patients, could be significantly faster for many covered entities. A recent IQVIA study debunks the argument that a Rebate Model would increase cashflow concerns for covered entities. IQVIA evaluated the cash flow impacts of different 340B discount mechanisms.65 Based on the study, IQVIA found that physical inventory and physical replenishment, and better than credit- 66 IQVIA also analyzed what the interest costs would be if a hospital or clinic had to borrow money at a 12 percent interest rate which IQVIA considered a conservative estimate of the interest rate whenever its cash flow was negative during the time between its purchase to the receipt of reimbursement.67 IQVIA concern regarding interest costs associated with the rebate model: estimated interest costs are small, even under conservative assumptions and extended timelines for rebate payments. 68 Our 10 calendar day deadline would not create cashflow issues for covered entities. Exelixis appreciates renewed efforts to establish a Rebate Model. The current upfront discount system is not working. Covered entities and their for-profit partners continue to devise ways to maximize their financial benefit from the 340B Program, creating an opaque system that obstructs to address statutory violations. A Rebate Model would increase transparency on the front-end, which would help curtail the rampant 340B Program integrity issues that the current upfront discount system allows to continue unchecked. Exelixis strongly believes that a Rebate Model is the most effective and efficient indeed the only solution to stabilize the 340B Program. Further, while we generally support the structure of the Pilot Program, we believe that HRSA need not first conduct a pilot. Instead, to realize the 64 65 66 67 68 full potential of a Rebate Model, we strongly encourage HRSA to open up the Rebate Model to all full range of statutory violations, including duplicate discounts (Medicaid and MFP), diversion, and other improper claims. We believe that a Rebate Model is a common-sense solution that will inject much-needed transparency into the 340B Program, without adding burdens to covered entities or the government. Thank you for the opportunity to submit comments on this RFI. If you have any questions, please feel free to contact James Fenton at jfenton@exelixis.com. Sincerely, Bethany Jorden Vice President II, Commercial Legal Affairs Exelixis, Inc. EXELIXIS 1851 Harbor Bay Parkway 650.837.7000 MAIN Alameda, CA 94502 650.837.8205 FAX www.exelixis.com Appendix: Data Elements HRSA Approved Under the Prior Pilot Program Pharmacy Claims Data Fields Medical Claims Data Fields Date of Service Date of Service Date Prescribed Claim Line Number Rx number Claim Number Fill number Unit of Measure NDC-11 NDC-11 Quantity Dispensed Quantity Prescriber ID Rendering Physician ID Service Provider ID Service Provider ID 340B ID 340B ID RX BIN Health Plan Name RX PCN Health Plan ID Group Number ID (optional) Health Plan ID Qualifier (optional) [HCPCS Code (optional) [HCPCS Modifiers (Up to 4) (optional) 16
HRSA-2026-0001-2217East Central Missouri Behavioral Health, Inc. dba Arthur Center2026-04-20T04:00Z8,402 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Director Britton: Arthur Center Community Health appreciates the opportunity to respond to HRSAs Request for Information on the 340B Rebate Model Pilot Program. We are a federally qualified health center based in Mexico, Missouri, and have participated in the 340B program since October 2014. The purpose of this letter is straightforward: to describe, in concrete operational terms, what a rebate model would do to our organization and the patients we serve. Our Patients Last year we cared for 10,017 patients. Nine out of ten live at or below 200% of the federal poverty level. Forty-three percent live at or below 100%. Eighteen percent are uninsured. A quarter are children and a fifth are older adults on Medicare. Mental health and substance use services account for a meaningful share of our visit volume behavioral health is not a sidecar program at Arthur Center, it is central to what we do. Many of the medications that treat the conditions our patients bring through the door including those on the MFP list are the ones that determine whether we keep people stable in the community or watch them decompensate back into acute care. The Financial Picture Our 340B acquisition cost on drugs included on the 2026 and 2027 MFP lists is approximately $1 million per year. At WAC, the same volume requires roughly $3.14 million in upfront outlays. The difference about $2.14 million in working capital. That $2.14 million annual float is not the end of the exposure. If the rebate mechanism is extended beyond the MFP drug list to the full 340B formulary, the annual working capital requirement grows to roughly $5.32 million. Arthur Center does not carry those reserves. We operate on a scale where a $5.32 million unfunded working capital demand is not an inconvenience it is a solvency question. The MFP drug list represents approximately 7.6% of our total 340B program. So far in 2026 the Medicare Drug Price Negotiation Program has already eliminated a portion of our would-be 340B savings be shrinking the margin on the selected drugs. Adding a rebate-model on top of it further stresses our resources. Wholesaler Credit Capacity We operate through a combination of contract pharmacy and in-house pharmacy arrangements. Our wholesaler credit limits on the in-house side were set against 340B acquisition pricing. In preparation for the planned 2026 rebate pilot, our wholesalers were not prepared to extend the credit limits required to operate at WAC. When credit limits are exceeded, orders are held. When orders are held, the pharmacy cannot be replenish, and the 340B program does not function. A rebate model does not reduce cash demand; it simply moves it forward in time and requires someone in the supply chain to underwrite it. Reconciliation Infrastructure In the weeks before the planned 2026 start, our teams reviewed the third-party vendor interface manufacturers had selected for rebate adjudication. The available data and reporting did not support a reliable reconciliation process. The vendor cited HIPAA compliance as the reason prescription numbers would not be retained on claims. A vendor entrusted with this function should meet the security requirements necessary to retain and report Rx numbers to the system users who need them. Without that claim-level detail, a denial cannot be matched to a specific dispense, and a matched dispense cannot be re-submitted against a corrected reason code. We estimate that a five percent denial rate on our combined 20262027 MFP volume would put approximately $157,000 of revenue at risk each year the mechanism remained in place. That number assumes the denial process works as designed. If it does not, the exposure is larger. Point-of-Sale Mechanics We operate through a combination of contract pharmacy and in-house pharmacy arrangements. Our pharmacies dispense to our patients at the 340B price because the ceiling price is reflected in the acquisition cost at the time the prescription is filled. A rebate model changes the equation. The entity acquires the drug at WAC, and the 340B benefit is reconciled after the fact. We appreciate that HRSA has attempted to address this by proposing an ad hoc ceiling price file for rebate-covered drugs, but our third-party administrators were not in a position to operationalize that file in the few working days of lead time before the planned 2026 start. With that being the case, three outcomes are possible and none are acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay, and Arthur Center floats the cost until a manufacturer extends a rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. Eighteen percent of our patients are uninsured for that segment of our panel, the WAC-priced copay is not an affordability abstraction; it is the difference between filling the prescription and leaving it at the counter. For the thirty-three percent of our adult patients managing hypertension and the seventeen percent managing diabetes, an interrupted fill translates, over time, into hospitalizations, thrombotic events, amputations, and early deaths. This problem also conflicts with Executive Order 14273, which instructs HHS to preserve access to 340B pricing at the point of sale for patients who depend on it, and which conditions future Section 330(e) funding on FQHCs providing discounted insulin to low-income patients at the point of sale. A rebate model, by its architecture, cannot deliver the 340B price at the point of sale. The two directives cannot both be satisfied by the same policy. Staffing HRSAs Information Collection Request estimates the administrative burden of a rebate model at roughly five hours per week per covered entity. Our estimate, based on the combined claims volume on the 20262027 MFP list, is approximately 0.25 additional FTE dedicated to rebate submission, denial management, reconciliation, and cash forecasting. That is a resource we do not have today and would need to fund. For an organization our size, that additional position is not a rounding error in the budget. A Less Costly Path to Deduplication We understand the legitimate need to prevent duplicate discounting between MFP and 340B. The rebate model is not the only tool for that purpose, and it is the most expensive one for covered entities. A neutral 340B claims clearinghouse administered by or designated by HRSA would do the work. Covered entities would report 340B claims to a single source of truth that manufacturers and CMS could both reference. The upfront discount would be preserved, manufacturers would not be placed in an adjudication role, and the financial risk the rebate model transfers to safety- net providers would not arise. A second path relies on the manufacturer claims data mechanism already in use. Manufacturers already require 340B claims data from covered entities as a condition of 340B access. That data can support MFP/340B deduplication without building a parallel rebate infrastructure. For new pharmacy accounts or accounts without claims history when a data requirement is instituted, manufacturers should accept an attestation of compliance rather than withholding 340B access until data that does not yet exist is produced. The Request Arthur Center respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program as currently contemplated. If the pilot proceeds, we ask that federally qualified health centers be exempted. And we ask that the deduplication question be resolved through the clearinghouse or the existing manufacturer claims data mechanism approaches that are less costly, less disruptive, and less likely to cause patient harm. Thank you for your consideration. Sincerely, Donald Brock Lough Chief Executive Officer Arthur Center Community Health Mexico, Missouri 340B ID: CHC26560-00
HRSA-2026-0001-2218(no commenter metadata)2026-04-20T04:00Z6,682 chars
See attached file(s) 4.)O Dignity Health. , A member of CommonSpirit' Glendale MemOrial Hospital and Health Center 1420 S. Central Ave. Glendale, CA 91204 (818) 502-4578 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Dignity Health Glendale Memorial Hospital and Health Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Established in 1926, Glendale Memorial Hospital and Health Center is a 334-licensed bed facility with 1,000 employees, upwards 500 physicians representing all major specialties, and a dedicated team of 100 volunteers. As part of Dignity Health, our award-winning hospital is home to a full range of services, including the Heart Center, the Colorectal Surgery Institute, the Marcia Ray Breast Center, emergency care, orthopedic and spine care, and more. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate rnodel under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism willimpose enormous costs and burdens on Glendale Memorial Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible Apr20,2026 Dignity Health Glendale Mernorial Hospital and Health Center HHS Docket No. HRSA-2026-03042 patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Glendale Memorial Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Reduced spending on pharmaceuticals allows us to invest these funds into vital medical care and services for our community. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. SinE ely, Apr 20,2026 Dignity Health Glendale Memorial Hospital and Health Center HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. ReV.- C-assie McCarty, MDiv, BCC Director, Mission Integration CommonSoint As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commons;p,,,t.or2.
HRSA-2026-0001-2219Salem Health Hospitals and Clinics2026-04-20T04:00Z8,891 chars
See attached file(s) Salem Health P.O. Box 14001 Salem, Oregon 97309-5014 503-561-5200 salemhealth.org April 20, 2026 Chantelle V. Britton, M.P.A., M.S. Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Submitted via https://www.regulations.gov RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Salem Health respectfully submits these comments in response to HRSAs Request for Information on a potential 340B rebate model.1 Salem Health is a 340B covered entity and a core part of the health care safety net in our region. We have a direct interest in ensuring that any federal action reflects how hospitals purchase, dispense, and account for drugs in actual clinical operations. While we support appropriate program integrity measures, we strongly oppose replacing the 340B Programs upfront discount structure with a rebate-based model. For more than three decades, covered entities have structured their operations around upfront 340B discounts at the time of purchase. This structure is foundationalit allows covered entities to preserve liquidity and direct scarce resources toward patient care, consistent with Congresss intent to help safety-net providers stretch scarce Federal resources as far as possible.2 A rebate model would require covered entities to pay full price upfront, carry those costs until after dispensing and claims administration, and then wait for reimbursement from manufacturers or vendors. At Salem Health, the 340B Program allows us to reinvest approximately $15 million annually into patient care, access expansion, and services for vulnerable populations. Any policy that puts these resources at risk threatens access to care. 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 H.R. Rep. No. 102-384, pt. II, at 12 (1992). Salem Health P.O. Box 14001 Salem, Oregon 97309-5014 503-561-5200 salemhealth.org A rebate model improperly shifts burden from manufacturers to covered entities. The 340B statute requires manufacturers to offer covered outpatient drugs at or below the statutory ceiling price.3 Manufacturersnot covered entitiesbear civil monetary penalties for failing to provide the required price.4 A rebate model inverts this framework by forcing covered entities to finance transactions at higher acquisition costs, compile and transmit detailed claims data, and absorb the financial risks of delay, denial, and underpayment. A rebate model does not reflect the realities of hospital operations. Medical claims are not adjudicated in real time. They may take weeks or months to finalize due to coding review, charge capture, payer-specific billing rules, and downstream corrections. The proposed ten-day rebate payment concept significantly understates the true float, because the clock would start only after covered entities could generate and transmit complete datanot at the point of drug acquisition or administration.5 Manufacturer control over rebate adjudication cannot be trusted to produce fair results. In recent years, manufacturers have used contract pharmacy restrictions, data demands, and third-party platforms to limit 340B access. Based on our internal analysis, manufacturer restrictions have contributed to an estimated 75 percent reduction in Salem Healths contract pharmacy savings. Thus, we have no confidence that expanding manufacturer discretion through a rebate model would produce consistent or transparent outcomes. We expect more denials, more disputes, more risk, more cost, and more administrative burden for covered entities.6 A rebate model raises serious data governance and privacy concerns. HRSAs notices contemplate detailed claims-level submissions from covered entities to manufacturers approved for the pilot. This raises significant questions about data minimization, vendor terms, and whether information shared for rebate adjudication could be used for other purposes. Any model that depends on expanded data transfer must include strict limitations on use, transparency requirements, and enforceable protections for covered entities and their patients.7 3 42 U.S.C. 256b(a)(1). 4 42 U.S.C. 256b(d)(1)(B)(vi); 42 U.S.C. 1320f-6. 5 See 91 Fed. Reg. at 728889. 6 See HRSA Letter to Eli Lilly and Company (May 17, 2021). 7 See 45 C.F.R. 160.103; 45 C.F.R. 164.501. Salem Health P.O. Box 14001 Salem, Oregon 97309-5014 503-561-5200 salemhealth.org Responses to the Request for Information Costs to covered entities: Under the current upfront discount model, Salem Healths compliance functions are integrated into established pharmacy and finance workflows. A rebate model would require us to build entirely new operational processesidentifying eligible transactions, compiling and transmitting claims data, tracking submissions, reconciling manufacturer responses, and pursuing denied or unpaid rebates. Cash flow exposure: Based on the initial set of drugs implicated in rebate model discussions, Salem Health estimates approximately 10.6% of program value in immediate cash flow exposure. This is a conservative figure that does not account for inventory holding periods, claims finalization delays, denied rebates, or potential expansion of the model. If the rebate approach were broadened, long-term exposure could approach the full annual value of our 340B Program. In practical terms, nonprofit Salem Health would be required to provide interest-free financing to for-profit pharmaceutical manufacturers while waiting for reimbursement for drugs Congress intended us to purchase at the discounted price. Staffing and systems costs: We estimate at least two additional full-time employees would be needed to administer rebate-related work, assuming the originally proposed scope. This estimate does not include benefits, supervisory time, legal review, or the burden on other internal teams. We also anticipate additional technology costs to automate data extraction and transmissionthough such tools would convert rather than eliminate the burden. Our existing 340B infrastructure was not designed for manufacturer-by-manufacturer rebate submission. Building that capability would require substantial and costly new work across pharmacy, revenue cycle, compliance, and information technology teams. Physician-administered and hospital outpatient drugs: These drugs involve more complex billing and reconciliation than retail pharmacy claims and are among the highest-cost items in our system. A rebate model would magnify liquidity pressure precisely where safety-net hospitals and patients are least able to absorb prolonged delays and uncertainty. Better Alternatives Exist Salem Health does not agree that a rebate model is necessary to address duplicate discounts under the Medicare Drug Price Negotiation Program. The Inflation Reduction Act places Salem Health P.O. Box 14001 Salem, Oregon 97309-5014 503-561-5200 salemhealth.org deduplication responsibility on manufacturers, not covered entities.8 Less burdensome alternatives - including the use of a nationwide clearinghouse such as Oregons - should be pursued first. If HRSA nevertheless continues to consider a rebate model, Salem Health urges the agency to prohibit rebate denials, require transparency regarding the basis for any denial, establish uniform adjudication rules, mandate prompt payment timelines, and create a realistic enforcement mechanism not just for drug manufacturers, but for their chosen digital portal. HRSA must also clarify what oversight it will apply to participating manufacturers, the digital portal, and what corrective actions it will take for noncompliance.9 Conclusion A rebate model would increase costs, create cash flow strain, require new staffing and infrastructure, expand risk associated with data sharing, and reduce resources available to support access to care. It would do so not because the existing statutory framework requires it, but because manufacturers seek to shift cost, control, and risk onto covered entities. That is inconsistent with the design and purpose of the 340B Program. For these reasons, Salem Health respectfully urges HRSA to maintain the longstanding upfront discount structure of the 340B Program and to pursue narrower, less burdensome approaches for any Medicare-related deduplication needs. Sincerely, Andrew J. Sowles, PharmD, BCPS, BCACP, BC-ADM Director, Ambulatory Care Pharmacy 8 Inflation Reduction Act of 2022, Pub. L. No. 117-169, 11001, 136 Stat. 1818, 184254 (codified at 42 U.S.C. 1320f to 1320f-7). 9 See HRSA, Program Integrity, last updated Mar. 30, 2026.
HRSA-2026-0001-2220UCB2026-04-20T04:00Z27,431 chars
See attached file(s) 1 April 20, 2026 VIA ELECTRONIC FILING TO: www.regulations.gov Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Director Britton: UCB, Inc. (UCB) is a global biopharmaceutical company focused on innovating new medicines to treat chronic, severe diseases in neurology and immunology. We are more than 9,000 people globally, inspired by patients and driven by science. Our foundational commitment to crafting sustainable solutions and delivering medicines that aim to improve lives is at the core of all that we do, as we live our purpose each day. Since 1928, we have brought together the expertise, talent, tools and scientific ingenuity needed to pursue whats right for people living with severe disease and society. UCB is committed to ensuring that all patients have affordable access to the right medicine at the right time, regardless of age, ethnicity, geography, or economic circumstance. Patients are at the heart of everything we do at UCB, from where we invest our research dollars to how we engage with other stakeholders to bring new therapies to market. Every day, we work to ensure that patients have the best individual experience while promoting access to high-quality, coordinated, affordable care and equitable access to medicines for all patients. UCB welcomes the opportunity to provide comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) regarding its Request for Information (RFI) on the potential design and implementation of a 340B rebatebased model. UCB appreciates HRSAs initiative in exploring whether a rebate mechanism could serve as an effective approach to effectuating the 340B ceiling price and strengthening the 340B Programs integrity. We believe that a carefully structured rebate model has the potential to positively impact patients and other stakeholders by introducing greater transparency, mitigating the unsustainable expansion of the 340B Program, and helping curb systemwide cost pressures that stem from markup practices and consolidation trends within the healthcare system. To ensure that any future rebate framework meaningfully addresses these challenges and fully realizes the benefits of a rebate-based approach, UCB provides the following information and input for OPAs consideration: Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 2 I. OPA Should Proceed with Developing a Rebate-Based Model and Ensure It Applies Broadly to All Covered Outpatient Drugs. II. A RebateBased Model Would Overcome Persistent Data and System Gaps That Impede Accurate DuplicateDiscount Prevention. III. Manufacturers Should Be Permitted to Use Rebate Claims Data to Avoid Paying Duplicate Discounts and Diversion. IV. OPA Should Authorize Collection of Additional Data Elements Necessary to Accurately Determine the Rebate Amount. V. OPA Should Ensure That Covered Entities Do Not Shift Administrative Costs onto Manufacturers. VI. OPA Should Predefine the Objective Criteria, Standards, and Other Benchmarks it Will Use to Evaluate the Relative Success of the Rebate Pilot, and Outcomes from the Program Should be Published. I. OPA Should Proceed with Developing a Rebate-Based Model and Ensure It Applies Broadly to All Covered Outpatient Drugs. In Question 7 of the RFI, OPA seeks input on the impact of a rebate-based 340B pilot on the integrity of the 340B Program, as well as other potential benefits of a rebate pilot. UCB strongly supports the implementation of a rebatebased model, as such a model provides a mechanism to meaningfully reduce the incidence of duplicate discounts, improve the transparency and traceability of 340B transactions, and strengthen overall program integrity. Since its inception, the 340B Program has undergone unsustainable growth. In 1992, the year it began, there were 1,000 covered entities (including their registered sites).1 Now, there are over 60,000 sites.2 In addition, the number of contract pharmacies involved in the 340B Program has exploded from approximately 1,000 in 2010 to over 32,000 as of 2025.3,4 This expansion is reflected in the amount of recent Covered Entity purchases.5 For example, in 2024, Covered Entities purchased $81.4 billion in covered outpatient drugs under the 340B Program.6 This represents a 23% increase over the 2023 total 1 The Commonwealth Fund, The 340B Drug Pricing Program: How It Works and Why Its Controversial (Aug. 6, 2025), https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how- it-works-and-why-its-controversial. 2 ADVI, HRSA 340B Covered Entity Audits (Mar. 10, 2025), https://advi.com/insight/advi-analysis-hrsa-340b- covered-entity-audits/ 3 Id. 4 Drug Channels. The 340B contract pharmacy market in 2025. (Jun. 10, 2025), https://www.drugchannels.net/2025/06/340b-contract-pharmacy-market-in-2025.html 5 Shanyue Zeng et al., What Is Driving 340B Growth: Utilization or Price?, 3 Health Affs. Scholar (2025), https://doi.org/10.1093/haschl/qxaf104. 6 Health Resources and Services Administration, 2024 340B Covered Entity Purchases (Oct. 2025), https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 3 of $66.3 billion.7 Furthermore, the rate of growth of 340B sales has greatly outpaced non-340B growth.8 From 2018 to 2023, 340B sales grew at a rate three times that of non-340B sales.9 The expansion of the 340B Program has significantly increased the difficulties that manufacturers face in trying to uphold the integrity of the 340B Program by avoiding duplicate discounts and ensuring that entities purchasing drugs under the 340B Program qualify as eligible covered entities at eligible locations and only dispense those drugs to eligible patients. Under a framework where the 340B ceiling price must be provided at the time of purchase, manufacturers must contend with determining whether an ever-increasing number of 340B units are subject to duplicate discounts or diversion despite having limited information about these units. As the Government Accountability Office (GAO) has explained, HRSA must ensure that covered entities are complying with 340B Program requirements, including the prohibition on duplicate discounts.10 Currently, however, program integrity violations are pervasive in the 340B program. As the Department of Health and Human Services Office of Inspector General has reported, current methods for identifying 340B claims create[] a risk of duplicate discounts.11 According to one estimate, approximately 25% of 340B sales represent a duplicate discount.12 In addition, diversion poses an even greater problem, with an analysis of HRSA audits from 2012 to 2016 showing that the percent of audited Covered Entities that diverted drugs to ineligible patients ranged from 31% to 54% during this time period.13 Meanwhile, a 2025 GAO evaluation found that the number of covered entity sites more than doubled between 2013 and 2023, while critical oversight gaps, including insufficient verification of corrective action, incomplete assessment of duplicate discounts, and weaknesses in ensuring only eligible hospitals participate, remain unresolved and continue to expose the program to misuse and diversion risk.14 7 Health Resources and Services Administration, 2023 340B Covered Entity Purchases (Oct. 2024), https://www.hrsa.gov/opa/updates/2023-340b-covered-entity-purchases. 8 Shanyue Zeng, William Sarraille, and Rory Martin, What is Driving 340B Growth: Utilization or Price?, Health Affairs Scholar (May 21, 2025), https://pmc.ncbi.nlm.nih.gov/articles/PMC12188212/#:~:text=More%20broadly%2C%20from%202018%20to, %25%20vs%2041%25%2C%20respectively. 9 Id. 10 U.S. Government Accountability Office, Report No. GAO-20-212, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, at 27 (Jan. 2020), https://www.gao.gov/assets/gao-20-212.pdf. 11 U.S. Department of Health and Human Services Office of Inspector General, Report No. OEI-05-14-00430, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, at 11 (June 2016), https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. 12 Luke Greenwalt, Uncover the Invisible Impacts of 340B Discounts, IQVIA (Dec. 20, 2021), https://www.iqvia.com/locations/united-states/blogs/2021/12/uncover-the-invisible-impacts-of-340b-discounts. 13 Stephen Barlas, More Clouds Form Over 340B Program, Pharmacy and Therapeutics (Oct. 2017), https://pmc.ncbi.nlm.nih.gov/articles/PMC5614413/. 14 See U.S. Government Accountability Office, Report No. GAO-26-108784, 340B Drug Discount Program: Agency Oversight Has Improved, but Actions Needed to Address Weaknesses (October 2025), https://www.gao.gov/assets/gao-26-108784.pdf. Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 4 It is difficult for manufacturers to avoid these 340B duplicate discounts and diversion of 340B units because they lack the necessary information to do so. Thus, to bolster 340B Program integrity, there is an urgent need to deploy a Rebate Pilot that is sufficiently broad in scope to include an acceptable number of drugs that would meaningfully test the model with the intent to expand to all covered outpatient drugs as soon as feasible, so that all manufacturers have a meaningful opportunity to prevent or remedy 340B duplicate discounts and diversion. A broadly scoped rebate frameworkapplicable across all covered outpatient drugs to the extent practicablewould enable OPA to develop a uniform, transparent, and administratively consistent mechanism for effectuating the statutory ceiling price. Such an approach would also provide OPA with a more complete and representative dataset from which to evaluate the operational, financial, and program integrity impacts of a rebate model. The 340B statute requires provision of the ceiling price but does not specify a point-of-sale mechanism. HRSA therefore retains discretion to implement a rebate-based construct where appropriate to prevent duplicate discounts and diversion, consistent with long-standing federal rebate program design principles. Moreover, a rebatebased model could help CMS more accurately fulfill the Inflation Reduction Acts (IRA) requirement to exclude 340B units from manufacturers Medicare Part B and Part D inflation rebate calculations. For Part B, CMS currently relies on covered entities to apply a 340B claims modifier, yet enforcement has been limited and manufacturers have little ability to monitor noncompliance. Evidence of variable modifier use across settings indicates this approach may have limitations in fully capturing 340B claims.15 For Part D, CMS has not developed an accurate mechanism to identify and exclude 340B units from inflation rebate calculations.16 The claimsbased estimation method adopted in the CY 2026 Medicare Physician Fee Schedule final rule is inexact by CMSs own acknowledgment.17 A 340B rebate model would provide CMS with precise, claimlevel data, eliminating the need for estimation and ensuring that 340B units are properly excluded from manufacturers inflation rebate obligations. II. A RebateBased Model Would Overcome Persistent Data and System Gaps That Impede Accurate DuplicateDiscount Prevention In Question 5d, OPA asks manufacturers to identify any challenges encountered in identifying potential duplicate discounts under 340B and CMS payment programs. 15 IQVIA, White Paper, Can 340B Modifiers Avoid Duplicate Discounts in the IRA? (Feb. 2023), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2023/can-340b-modifiers-avoid-duplicate- discounts-in-the-ira.pdf. 16 Id. 17 90 Fed. Reg. at 49746 (stating that the agency acknowledged in the CY 2026 PFS proposed rule that the proposed Prescriber-Pharmacy Methodology is likely to overestimate the number of 340B-eligible claims). Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 5 Identifying potential duplicate discounts across the 340B program and CMS payment systems remains a pervasive challenge, driven by longstanding data, systems, and process gaps within the healthcare and reimbursement ecosystem.18,19 Persistent issuessuch as incomplete or inconsistent utilization data, missing or misapplied claim identifiers, and timing misalignments between state Medicaid programs and covered entitiescontinue to impede manufacturers ability to avoid duplicate discounts.20 Although these challenges have been documented, they represent fundamental barriers that must be addressed to enable accurate duplicate discount prevention at the most basic operational level. As an example, the recurring absence of reliable 340B claim identifiers or required 340B claim data sharing remains a significant barrier to preventing duplicate discounts. In many instances, it is unclear where this breakdown occurswhether at the covered entity, third party administrator, state Medicaid system, or within data exchange processes. Furthermore, because the source of the issue is difficult to isolate and may be multifactorial, developing and implementing an effective solution remains challenging. This challenge is compounded when disagreements arise between states and manufacturers over duplicate discount disputes. In such cases, states may still request the disputed rebate and direct manufacturers to work with the covered entity, but limited data visibility often hampers effective reconciliation and leaves duplicate discount concerns difficult to fully resolve. Although manufacturers rely on multiple validation methods to detect potential duplicate discounts, the outcome is often the same: when key data is missing, incomplete, or inconsistently applied, it becomes exceedingly challenging and burdensome for manufacturers to verify whether units were purchased under the 340B program. Although various efforts, such as federal and state guidance, recommended billing practices, and voluntary data-sharing arrangements, have aimed to help stakeholders navigate and mitigate these risks, the persistent data gaps, fragmented systems, and lack of transparency fail to offer a meaningful path to address the underlying systemic issues.21 A rebate based pilot presents a pragmatic and targeted solution to these constraints by shifting discounting to a post-adjudication framework that relies on complete and validated claims information. This approach directly mitigates current data and timing limitations and enhances transparency, thereby establishing a more consistent, reliable, and enforceable process for preventing duplicate discounts. 18 Health Management Associates, White Paper, 340B Duplicate Discounts: Enforcement Inconsistent and Weak Due to Lack of Data Transparency and Despite Federal Prohibition (Feb. 2025), at https://www.healthmanagement.com/wp-content/uploads/HMA_340BDuplicateDiscounts_Feb2025v2.pdf. 19 See National Council for Prescription Drug Programs, White Paper, Medicaid Drug Rebate Program - Challenges Across the Industry (Version 1.0) (June 2019), https://www.ncpdp.org/NCPDP/media/pdf/WhitePaper/Medicaid-Drug-Rebate-Program-Challenges-Across-the- Industry.pdf?ext=.pdf. 20 Id. 21 Centers for Medicare & Medicaid Services, CMCS Informational Bulletin, Best Practices for Avoiding 340B Duplicate Discounts in Medicaid, (Jan. 8, 2020), https://www.hrsa.gov/sites/default/files/hrsa/opa/cib-01-08- 20.pdf. Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 6 Indeed, for manufacturers such as UCB that market a limited number of specialty therapies, particularly in chronic and severe disease areas, inaccuracies in 340B eligibility and duplicate discount prevention pose disproportionate financial and compliance risks. A rebate-based model enhances pricing predictability, supports uninterrupted supply, and enables sustained investment in complex biologics that serve small and vulnerable patient populations. III. Manufacturers Should Be Permitted to Use Rebate Claims Data to Avoid Paying Duplicate Discounts and Diversion In Question 3a of the RFI, OPA requests feedback on when manufacturers might decline rebate claims and whether more specific safeguards should be built in to ensure that denials are limited to appropriate circumstances. UCB shares OPAs goal of ensuring that the 340B Program operates fairly, transparently, and in full compliance with statutory prohibitions on duplicate discounts and diversion. We believe that any rebatebased framework should incorporate practical guardrails that allow all parties to address potential issues efficiently, without creating new administrative burdens for covered entities, manufacturers, or OPA. Establishing a balanced approachone that uses available data to support timely resolution of concernswould help advance the shared objective of safeguarding program integrity in a manner that is both fair and operationally sustainable. Accordingly, UCB believes manufacturers should be permitted to use data generated through the Rebate Pilot to decline rebate requests for units where payment would result in a prohibited duplicate discount, including where overlap occurs with Medicaid rebates, or, as applicable, Medicare Maximum Fair Price access, and for units identified as ineligible due to diversion. The 340B statute prohibits both duplicate 340B/Medicaid discounts and diversion of 340B products.22 Requiring manufacturers to remit rebates even when claims data clearly indicate a violation would undermine program integrity and introduce avoidable administrative and financial inefficiencies. Therefore, any rebate framework adopted by OPA must incorporate safeguards that enable manufacturers to meet these statutory obligations. Relying solely on posthoc mechanisms such as audits or administrative dispute resolution (ADR) is insufficient and often ineffective in resolving routine overpayment concerns. Covered entities frequently do not respond to good-faith inquiries or refuse to refund manufacturers when a violation is established.23 Moreover, the requirement that manufacturers complete an audit before initiating ADR further limits the practicality of these statutory pathways when rebate claims could be more 22 42 U.S.C. 256b(a)(5)(A)(i),(a)(5)(B). 23 Brief of Amicus Curiae Kalderos, Inc. in Support of Plaintiffs-Appellees and Affirmance at 9-10, Novartis Pharm. Corp. v. Johnson and United Therapeutics Corp. v. Johnson, Nos. 21-5299, 21-5304 (D.C. Cir. June 15, 2022) Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 7 appropriately and efficiently resolved at the point of submission using available data, and significantly less adversarial between the parties.24 A rebate-based 340B framework would also align the program with well-established federal reimbursement and rebate models that rely on finalized claims data rather than prospective assumptionsan approach Congress and CMS have repeatedly adopted to ensure precision and integrity. A rebate-based approach allows eligibility verification based on adjudicated claims, aligning 340B with Medicare Part D coverage gap discounts, IRA inflation rebates, and Medicaid MDRP true-ups. Claims-level rebate data would strengthen manufacturers ability to identify anomalous utilization patterns, support pharmacovigilance obligations, and detect potential diversion. This enhanced visibility promotes patient safety and supports HRSAs statutory mandate to ensure diversion does not occur. OPA should thus ensure that in addition to utilizing 340B statutory mechanisms to address concerns regarding diversion or Medicaid duplicate discounts, the model is designed in a manner that allows a manufacturer to use the claims data it collects through the Rebate Pilot to identify and reject 340B rebate claims that would create duplicate Medicaid discounts. Manufacturers also should be permitted to identify and reject claims based on diversion when the pharmacy location that dispensesd a particular unit is not a covered entity eligible to purchase or receive products at the 340B price. Providing this authority would enhance program integrity, reduce administrative burden across all stakeholders, and ensure that rebate payments are consistent with statutory requirements. IV. OPA Should Authorize Collection of Additional Data Elements Necessary to Accurately Determine the Rebate Amount In Question 5e, OPA seeks input on the necessary data elements needed for manufacturers to identify potential duplicate discounts, as well as whether the rebate model could serve as an additional or alternative source for obtaining those data. In the original Rebate Pilot, OPA limited manufacturers to a specific list of data elements that they may request from Covered Entities as part of their Rebate Pilot plan.25 In order to ensure the integrity of a Rebate Pilot, OPA should permit manufacturers to request data elements from Covered Entities described in Table 1. 24 Government Accountability Office, Report No. GAO 11-836, Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement, at 22 (Sept. 23, 2011), https://www.gao.gov/assets/gao- 11-836.pdf (agency requirements for these auditssuch as a requirement to hire an independent third party to conduct the auditsare costly and administratively burdensome). 25 90 Fed. Reg. at 38167. Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 8 Table 1. Proposed data elements manufacturers may request from Covered Entities. Retail medicine Physician-administered medicines Date of service Date prescribed Rx number Fill number 11 digit National Drug Code (NDC) Quantity Dispensed Prescriber ID National Provider Identifier (NPI) 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) 11 digit NDC Quantity Date of service 340B ID National Provider Identifier (NPI) Claim number (analogous to Rx number) Health plan ID & health plan name (analogous to Rx BIN & Rx PCN) Rendering physician ID (analogous to Prescriber ID) Claim line number Unit of measure Purchase data elements (for retail and physician-administered) Wholesaler Name Wholesaler Account Number Invoice date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID These data elements are crucial for manufacturers to properly effectuate the 340B ceiling price and help ensure that the 340B rebate was paid in an amount required by the statute. V. OPA Should Ensure That Covered Entities Do Not Shift Administrative Costs onto Manufacturers Several questions in the RFI request stakeholder input on administrative burden and resource impact of a rebate-based model. Should OPA relaunch a rebatebased pilot program, UCB encourages OPA to clearly define cost responsibilities and confirm that manufacturers will not be expected to assume responsibility for administrative or compliance costs incurred by Covered Entities that are not directly tied to the efficient and effective operation of the 340B Program. As a non-exclusive example, administrative costs associated with eligibility determinations, contract pharmacy arrangements, and rebate submissions Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 9 should be borne by the entities that control and create those processes. Manufacturers should not be required to subsidize compliance costs that are unrelated to rebate processing efficiency. We support OPAs efforts to evaluate the potential impacts and burdens of a new rebate pilot and appreciate that this assessment will help OPA gain a clearer understanding of and proactively address any anticipated resource needs. As part of this process, it is also essential for OPA to establish safeguards to ensure that any administrative costs, new or existing, are not unduly shifted to manufacturers, as such practices could introduce uncertainty and compromise the long-term stability of the program. At minimum, OPA should expressly clarify that manufacturers bear no responsibility for any costs borne by Covered Entities in the ordinary course of 340B Program participation. This approach aligns with the RFIs stated focus on balancing stakeholder impacts and ensuring that a rebate model does not create unintended or inequitable burdens. VI. OPA Should Predefine the Objective Criteria, Standards, and Other Benchmarks it Will Use to Evaluate the Relative Success of the Rebate Pilot, and Outcomes from the Program Should be Published Although OPA does not solicit input in this RFI regarding criteria, standards, and other benchmarks it may use to evaluate the success of a potential rebate pilot, we strongly urge OPA to integrate these elements into the broader design of any future pilot model. For example, HRSA should adopt objective safeguards, including timeliness standards for rebate submissions, attestation of eligibility by covered entities, and reasonable look-back limits to prevent perverse incentives or retrospective over-collection. As OPA considers whether and how a rebate-based model could operate within the 340B framework, it is essential that OPA clearly articulate the Administrations policy goals and the criteria it will use to determine whether a rebate model would be consistent with those goals. Absent these elements, stakeholders will lack the clarity necessary to meaningfully assess whether a rebate mechanism aligns with the statutory intent of the 340B Program and the Administrations broader priorities. Defining the criteria for assessing success prior to beginning a rebate pilot will help ensure that the program is evaluated fairly and with metrics that provide actual practical value for stakeholders. Furthermore, publishing the outcomes from the pilot will improve transparency around evaluation of the pilot and allow manufacturers and covered entities to better understand what works and does not work, which would be particularly helpful if the pilot is expanded to other manufacturers in the future. Conclusion UCB appreciates the opportunity to provide input on this RFI and supports OPAs continued efforts to transparently evaluate a 340B rebate model. We believe that a rebate framework has the opportunity to strengthen program integrity, improve pricing accuracy, and reduce duplicate discounts while preserving patient access. Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636 10 We respectfully urge OPA to consider the recommendations herein as it evaluates next steps. Please do not hesitate to contact Christine Liow, Public Policy Lead at Christine.Liow@ucb.com if UCB can provide additional information. Sincerely, Patricia A. Fritz Vice-President, U.S. Corporate Affairs UCB, Inc. Docusign Envelope ID: 20232A98-DE07-4300-916D-914C7ABD6636
HRSA-2026-0001-2221(no commenter metadata)2026-04-20T04:00Z7,201 chars
See attached letter re. HHS Docket No. HRSA202603042 Submitted at: https://www.regulations.gov April 20, 2026 Re: Comments on Request for Information: 340B Model Pilot Program (91FR 7287) [Docket No. HRSA-2026-03042] Thomas Engels, Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville MD 20857 Dear Administrator Engels: On behalf of the Northwest Portland Area Indian Health Board (NPAIHB), we appreciate the opportunity to submit comments on the Request for Information: 340B Model Pilot Program [Docket No. HRSA-2026-03042], (91 FR 7287). Established in 1972, NPAIHB is a tribal organization under the Indian Self-Determination and Education Assistance Act (ISDEAA), P.L. 93-638, advocating on behalf of the 43 federally recognized Indian Tribes in Idaho, Oregon, and Washington (Northwest Tribes) on specific healthcare issues. 1 Over half of the Northwest Tribes participate in the 340B pharmacy program as currently offered through the Health and Human Services (HHS) division of Health Resources and Services Administration (HRSA), BACKGROUND The 340B pharmacy program allows safety-net health systems such as Tribally operated clinics to purchase drugs at discounted prices. In August 2025 a Federal Register notice was published which proposed a 340B Rebate Model Pilot Program (340B Pilot Program). This 340B Pilot Program would shift the financial burden of paying the full cost for pharmaceuticals to the safety-net health system, require safety-net health providers pay the full cost up-front, and apply for a rebate after drugs were purchased and dispensed. A lawsuit filed in December 2025 halted the implementation of this proposal as presented. _____________________ 1A "tribal organization" is recognized under the Indian Self-Determination Education Assistance Act (P.L. 93-638; 25 U.5.C. 450b(1)) as follows: "[T]he recognized governing body of any Indian tribe; any legally established organization of Indians which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities." Administrator Engels April 20, 2026 Page 2 of 3 HRSA-2026-03042 The Request for Information (RFI) issued by HRSA and published at 91 FR 7287 on February 17, 2026, seeks information regarding the use of pharmacy rebates to reach pharmaceutical ceiling prices in the HRSA 340B pharmacy program, requests feedback regarding procedures and standards which would govern approval of manufacturing rebate programs and seeks stakeholder impact information on such a proposal. GENERAL COMMENTS Tribal Consultation. Tribal Nations maintain a unique government-to-government relationship with the federal government that is grounded in the U.S. Constitution, numerous treaties, executive orders, and reaffirmed in U.S. Supreme Court decisions and federal legislation. Additionally, the U.S. has a trust responsibility and legal obligation to elevate the health status of American Indian/Alaska Native (AI/AN) people.2 Several U.S. treaties obligate the federal government to provide medical care to AI/AN people. Given the inherent operational and financial implications, the proposed 340B Pilot Program would have on the Tribally operated health system, consultation pursuant to the HRSA Tribal consultation policy is required prior to any further implementation efforts.3 RFI Targeted Areas of Interest 1. Costs to Covered Entities. The Indian health system receives funding through discretionary appropriations to the Indian Health Service (IHS). IHS is chronically underfunded, with a recent United States Government Accountability Office Report to Congress stating that the IHS is currently funded at 49% of actual need.4 Chronic underfunding also creates a health system that is understaffed, with the most recent staffing vacancy figures shared by IHS leadership hovering near a 35% vacancy rate. As currently operated, the 340B program allows the Indian Health Care Providers (IHCPs) to purchase drugs at discounted prices, the 340B Pilot Program shifts the financial burden of the full cost of drug purchases to the IHCPs. The requirement to pay the full cost at the time of purchase will cripple the ability of IHCPs to provide healthcare services to their communities. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities. _____________________ 2 P.L. 94-437; 25 USC 1602. 3 Department of Health and Human Services Health Resources and Services Administration Tribal Consultation Policy. Section 6, page 5. August 2014. Accessed April 4, 2026. https://www.hrsa.gov/sites/default/files/hrsa/about/organization/bureaus/tribal-consultation-policy.pdf 4 United States Government Accountability Office. Report to Congressional Committees. High-Risk Series. Heightened Attention Could Save Billions More and Improve Government Efficiency and Effectiveness. Feb, 2025, page 204. Accessed April 7, 2026. https://www.gao.gov/assets/gao-25-107743.pdf Administrator Engels April 20, 2026 Page 3 of 3 HRSA-2026-03042 Many IHCPs lack the financial reserves to purchase drugs at the full retail cost and then wait to receive a rebate at some point in the future. The 340B Pilot Programs proposed change away from a purchase discount and to a rebate model threatens the financial stability of IHCPs. IHCPs, as previously stated, are historically underfunded and rely on reimbursement from health insurance companies to support current healthcare operations. Shifting the financial burden to the IHCP will create undue burden on both the Tribal health system and community members who may not be able to access timely care because of reduced services. 3. Rebate Denials. IHCPs consider the uncertainty of rebate approval, lack of clarity regarding timeliness of rebates, and no known vendor standards accountability under the 340B Pilot Program as threats to financial stability of IHCPs. 4. Data Collection by Covered Entities. Northwest Tribes are concerned that the 340B Pilot Program creates data privacy issues. The 340B Pilot Program would require IHCPs to provide patient level data to drug manufacturers. Although the data will be de-identified, requiring IHCPs to report this data violates Tribal data sovereignty, and there are no known restrictions on future research or data analysis of Tribal populations. CONCLUSION Based on federal trust and treaty obligations, chronic underfunding, known under-staffing, and the safety-net status of IHCPs, Northwest Tribes respectfully request an IHCP exemption from any changes made to the 340B program that will shift any associated costs of drug purchases to IHCPs. NPAIHB appreciates your consideration of the comments above. For questions or additional information on these comments, please contact Hilary Edwards, Director of Legal and Government Affairs at hedwards@npaihb.org Sincerely, Aaron Hines Chair, Northwest Portland Area Indian Health Board
HRSA-2026-0001-2222AMGA2026-04-20T04:00Z23,097 chars
Please see the attached comment letter from AMGA. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 HHS Docket No. HRSA-2026-03042 Dear Administrator Engels, On behalf of AMGA, we appreciate the opportunity to comment on the Request for Information on a potential 340B Rebate Model Pilot Program. The 340B Drug Pricing Program is critically important to AMGA members, as it allows them to purchase outpatient drugs at significantly reduced prices, helping stretch scarce resources and expand access to care for vulnerable patient populations. By lowering drug acquisition costs, AMGA members can reinvest savings into other vital services. While we recognize the Department of Health and Human Services (HHS) stated goal of gathering real-world data, the proposed shift from an upfront discount to a post-sale rebate model poses serious financial, operational, and other mission-threatening challenges for safety-net providers and the vulnerable patients AMGA members serve. At its core, AMGA is concerned that a rebate-based approach would fundamentally alter the timing, predictability, and reliability of 340B savings in ways that could destabilize providers and limit access to care. Founded in 1950, AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high- performance health. AMGA is the national voice promoting awareness of our members recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 177,000 physicians practice in our member organizations, delivering care to more than one in three Americans. Our members are also leaders in high-value care delivery, focusing on improving patient outcomes while driving down overall healthcare costs. AMGA offers the following recommendations: 1. Do not proceed with a rebate-based 340B model, as it would undermine the programs core structure and create significant financial and operational risk for covered entities. 2 2. If a pilot is pursued, establish strong financial safeguards, including enforceable payment timelines, interest penalties for delays, and standardized reimbursement requirements. 3. Minimize administrative burden by limiting new reporting requirements and avoiding provider responsibility for complex rebate tracking and dispute resolution processes. 4. Establish a neutral, centralized infrastructure (e.g., clearinghouse) to standardize data submission, reconciliation, and oversight across manufacturers. 5. Limit manufacturer discretion by clearly defining denial criteria, standardizing dispute resolution, and strengthening HRSA oversight and auditing authority. 6. Ensure transparency through standardized reporting, including publicly available metrics on payment timeliness, denial rates, and administrative costs. 7. Evaluate patient access and provider sustainability impacts as primary outcomes of any pilot, with explicit protections for safety-net providers. 8. Modernize 340B eligibility criteria to better reflect current care delivery patterns and include independent medical groups serving high Medicaid and low-income populations. Background: Financial and Structural Pressures on the Safety Net Broader Financial Pressures Facing Safety-Net Providers Potential changes to the 340B program cannot be understood in isolation. AMGA member organizations are navigating a confluence of financial pressures that are straining their capacity to continue serving vulnerable populations. Physician reimbursement under the Medicare Physician Fee Schedule has declined by more than 30% in real terms since 2001, while practice coststracked by the Medicare Economic Index have grown consistently at 24% annually. This widening gap has eroded operating margins across the physician enterprise, with the sharpest impacts felt by primary care and cognitive specialty practices that depend heavily on Medicare and Medicaid revenue and lack the procedural volume to offset declining rates. Simultaneously, recent federal action on Medicaid financingincluding provider tax restrictions enacted in the One Big Beautiful Bill Act and a new CMS final rule tightening the "generally redistributive" standard for provider taxeswill meaningfully reduce the supplemental Medicaid payments that many states have used to sustain physician and hospital participation. As states are forced to restructure their provider tax arrangements and reduce supplemental payments, the financial calculus for practices serving high Medicaid-volume populations grows increasingly difficult. These broader financial dynamics are directly relevant to HRSAs consideration of a rebate- based 340B model. Policies that alter the timing, predictability, or accessibility of 340B savings must be evaluated in the context of providers already operating with limited financial flexibility and constrained margins. For AMGA members committed to serving low-income and Medicaid patients, the margin for sustainability is narrowing. The 340B Program as a Core Safety-Net Mechanism 3 The 340B Program was designed to stretch scarce federal resources by allowing safety-net providers to purchase outpatient drugs at significantly reduced prices, enabling them to reinvest savings into expanded services for the patients who need them most. These savings are not retained as margin; rather, AMGA members routinely reinvest them to expand access to care, support care coordination, fund behavioral health services, and sustain services in medically underserved communities. In this way, the 340B Program functions as a direct investment in the healthcare safety net, enabling providers to deliver comprehensive, high-value care to patients who might otherwise face significant barriers to access. Because of this role, any changes to the structure of the 340B Programparticularly those affecting cash flow, administrative burden, or access to savingshave direct implications for patient access and provider sustainability. Evolving Care Delivery and Program Design Considerations While the 340B Program plays a critical role in supporting safety-net providers, it is also important to recognize how care delivery has evolved. Today, a significant portion of care for low-income and medically complex patients is delivered in ambulatory, community-based settings, including independent medical groups. Independent medical groups that treat substantial volumes of Medicaid and low-income patients face the same drug cost pressures, operate on comparably thin margins, and serve the same vulnerable communities as many currently eligible covered entities. These providers are often on the front lines of managing chronic conditions and coordinating care across settings. This evolution in care delivery underscores the importance of ensuring that any modifications to the 340B Programincluding potential rebate modelsdo not inadvertently disadvantage providers delivering high-value, community-based care to vulnerable populations. The Importance of Preserving 340B as a Stabilizing Resource The 340B Program serves as a meaningful and targeted resource that helps offset the financial pressures described above. Access to 340B pricing allows providers to reduce drug acquisition costs, reinvest savings in care coordination and support services, and sustain participation in Medicaid and other programs serving vulnerable populations. The 340B Program is not a substitute for comprehensive physician payment reformAMGA continues to call on Congress and HHS to address the structural inadequacies of the Physician Fee Schedule and the Medicaid financing environment. Given this role, changes that disrupt how and when providers access these resourcessuch as a shift to a rebate-based modelshould be carefully evaluated to ensure they do not undermine the programs stabilizing function. 4 Detailed Comments on a Potential 340B Rebate Pilot Model Cost to Covered Entities A potential rebate pilot would fundamentally alter covered entities financial dynamics while significantly increasing administrative and operational complexity. The cornerstone of the 340B Programs success has been its upfront discount mechanism, which provides covered entities with immediate cost savings at the point of purchase. Replacing this proven mechanism with a delayed rebate system would require covered entities to purchase drugs at WACoften several times higher than the 340B pricewhile waiting for reimbursement. This shift would substantially increase upfront drug acquisition costs with no guarantee of timely repayment, creating financial stress and forcing safety-net hospitals and clinics to divert limited operating funds toward drug costs instead of patient care. A 340B Rebate Pilot would pose both significant financial risk and substantial administrative burden. Beyond the financial costs, new reporting, tracking, and claims submission requirements would introduce layers of complexity to already overextended pharmacy, billing, and compliance systems. A pilot would shift administrative costs and risks from manufacturers onto providers, as providers would have to track, validate, submit rebate claims, monitor payment timelines, and resolve disputes. Rather than reducing fraud, waste, and abuse, this shift in responsibility could introduce new program integrity risks by reducing direct oversight of manufacturer pricing and rebate processes. In HRSAs previous proposed rebate pilot that has since been abandoned, manufacturers only had to give providers 60 calendar days notice that they would be using a rebate model. In our comments on the previously proposed rebate pilot,1AMGA expressed concern that 60 days notice is not enough for hospitals and clinics to prepare for a potential rebate pilot with all required changes to cash flow. These concerns remain relevant here and AMGA recommends that if HRSA continues with a rebate pilot, manufacturers should be required to give substantially longer and clearly defined advance notice (e.g., at least 180 days) to covered entities to complete the necessary activities. Smaller rural hospitals and clinics, many of which lack a robust administrative infrastructure, would be disproportionately affected by compressed implementation timelines. Rapid changes to systems and staffing cannot be made without disrupting patient services, and the risk of administrative errors increases when compliance requirements are rushed. This would be particularly exacerbated if new IT systems had to be developed, which often require new software modules, vendor implementation fees, and additional IT staff support. These changes may also require new or expanded vendor and third-party administrator arrangements, including contract modifications, transaction fees, and expanded data extractionall of which increase costs to providers. Overall, a potential rebate pilot would run counter to this Administrations stated commitment to reducing burden, fraud, waste, and abuse. 1 AMGA Comments on 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (2025-14998). https://www.regulations.gov/comment/HRSA-2025-0001-0534. 5 Payment Timing and Cash Flow Impacts 1. Safeguards Allowing manufacturers to dictate payment terms, data requirements, and payment timing represents a troubling shift in program governance. The current structuregrounded in statutory discountsplaces clear obligations on manufacturers. By contrast, in the previously proposed rebate model, HRSA increased manufacturer control over both the financial flow and the operational rules of the program. This could erode the 340B Programs protections and intent, moving the program further away from its original mission of supporting safety-net providers. It is important to underscore the importance of safeguards to protect vulnerable covered entities. We urge HRSA to implement enforceable and guaranteed timelines, automatic payment triggers, and interest penalties for late payments if they move forward with a pilot model. These safeguards would help ensure that rebate delays do not cause additional harm to already unstable cash flows for covered entities. 2. Impact on Patients For many providers already operating on razor-thin margins, the requirement to advance funds at wholesale acquisition costs (WAC), combined with delays in reimbursement, could lead to deferred care and cutbacks in essential services. 340B discounts are a lifeline for safety-net providers and allow them to provide affordable medications to millions of low-income and uninsured patients. A rebate pilot poses a direct and serious threat to medication access for vulnerable patientsand tough decisions may have to be made due to unpredictable increased costs of medication. This model would create a new and significant barrier, rather than a solution, for vulnerable patients, especially those who are uninsured and have limited options for affordable care. For example, many oncology and specialty drugs commonly used in outpatient settings (e.g., pembrolizumab/Keytruda) can carry per-dose costs in the tens of thousands of dollars at WAC. Requiring providers to purchase such therapies upfront without predictable reimbursement timelines could create significant financial barriers to maintaining adequate inventory or offering timely treatment, particularly for safety-net providers serving high volumes of uninsured or underinsured patients. In addition to reducing medication costs, 340B savings often are reinvested to expand access to care and critical support services, particularly for low-income and underserved populations. Requiring covered entities to bear upfront drug costs under a rebate model could significantly strain already limited resources, forcing difficult tradeoffs and potential reductions in these services. This risk is especially acute in communities with high Medicaid populations, where providers are already facing financial pressure and scaling back services due to reduced reimbursement levels. 3. Inclusion of Independent Providers As suggested above, 340B savings are a critical lifeline for hospitals and clinics serving low- income, rural, and underserved communities. These savings should also be made available to independent group practices. Drug acquisition costs are generally higher for independent 6 practices, and access to 340B pricing would allow them to be able to support patients in the same respect as larger systems. Rebate Denials In the previously proposed model, while there were some safeguards in place (e.g. timeliness of rebate payments, limits on data collection), there was a lack of clear enforcement penalties and dispute resolution processes outlined by HRSA, particularly surrounding rebate denials. This left providers vulnerable to financial and operational risks, on top of the burden of paying the full WAC prices up front. If HRSA continues with a rebate pilot, the grounds for denial must be narrowly defined, explicitly enumerated, and consistently applied, and may not include incomplete data elements, manufacturer system errors, or formatting discrepancies. Valid reasons may include verified duplicate discount, ineligible entities, or non-covered drug; AMGA recommends HRSA develops a standardized denial process with options for a reason for denials and timelines for manufacturers. Further, this guidance is needed as manufacturers should not determine whether a rebate is valid when there is a disagreement. AMGA therefore urges HRSA to prohibit denials in such categories not specified in the guidance. Data Collection by Covered Entities AMGA appreciates HRSAs commitment to understanding what extra data must be collected by covered entities if the Administration moves forward with a rebate pilot. As mentioned above, we have significant concerns regarding the introduction of new reporting and tracking requirements if a rebate pilot were to be implemented. Many entities are already operating within highly complex compliance environments, and additional reporting obligations would create substantial burden. These challenges are exacerbated by the need to merge multiple data streams including medical claims, split-billing, EHRs, vendor systems, and pharmacy dispensing data. In many cases, these data elements reside in separate systems that are not easily interoperable, making accurate linkage both technically difficult and resource intensive. There is also significant concern regarding the transmission of patient-level data to manufacturers, particularly with respect to privacy, security, and appropriate use. To help address these challenges, AMGA recommends that HRSA establish a neutral claims clearinghouse. A neutral clearinghouse would function as an independent, centralized entity that standardizes data requirements, submission and documentation processes, and reconciliation workflows. By establishing uniform expectations and consistency in data submission, it would ensure that all participating manufacturers adhere to the same standards, reducing variation in data formats and practices while minimizing administrative burden and avoiding the introduction of unnecessary complexity or cost for covered entities. Any clearinghouse should maintain independence from stakeholders with any financial interests and should be able to maintain transparency in their functions. Manufacturer Efforts to Avoid Duplicate Discounts AMGA appreciates HRSAs commitment to reduce duplicate discounts, a long-standing and statutorily required safeguard designed to prevent manufacturers from providing both the 340B discounted price and the Medicaid rebate on the same drug unit. However, the nature of a rebate model significantly expands manufacturer control over key aspects of the 340B program, 7 and AMGA is significantly more concerned about the greater discretion manufacturers may gain with respect to claim eligibility and processing disputes. This increased control could lead to a corresponding rise in dispute volume. To combat these changing dynamics, HRSA should include additional oversight and enhanced auditing of manufacturer activities to ensure transparency and adherence to processes on manufacturers. This will be critical to ensure transparency and adherence to statutory requirements. Establishing clear standards for manufacturer conduct, coupled with robust monitoring mechanisms, will help safeguard program integrity and prevent the imposition of non-statutory barriers. Required Reporting As suggested above, the shift of risk and obligations from HRSA to the manufacturer in a rebate model is troubling. Due to this change, AMGA recommends that HRSA adopt standardized reporting practices for manufacturers to promote transparency and program integrity. At a minimum, such reporting should include clear timelines for denial rates, available dispute resolution pathways and outcomes, and metrics related to payment accuracy. Establishing consistent reporting expectations across manufacturers will help covered entities operate within a predictable framework. In addition, reporting of certain data should be available to the public so that manufacturers, providers, and HRSA can use information to improve any model. Measures that should be publicly reported could include aggregate rebate payment data, provider participation, and denial statistics. Finally, to fully assess the effectiveness of a pilot, AMGA recommends that HRSA evaluate administrative costs, payment delays, patient access, provider participation, and dispute frequency. Collectively, these measures will be critical to determining whether the model improves program efficiency and access to care more than imposing burden on covered entities. 340B Program Integrity and Broader Policy Considerations AMGA does not support the implementation of a 340B rebate model and remains concerned such an approach would undermine significant key features of the existing 340B framework and would ultimately harm patients. If HRSA decides to move forward with a rebate pilot model, we strongly recommend the agency to carefully account for all the operational, financial, compliance, and administrative considerations that covered entities have developed based on existing 340B Program guidance. From AMGAs perspective, a rebate-based model does not enhance program integrity and instead increases administrative burden and could cause providers to limit drug inventories or delay treatments, thereby placing patients at risk. The increased administrative burden could have severe unintended consequences and could result in reduced participation in the 340B program altogether. Covered entities, especially those already operating with limited resources, may be unable to absorb the additional complexity associated with new requirements. Equally concerning are the potential impacts on patient access to care. Delayed rebates may cause providers to limit drug inventories or delay treatments, creating a major patient access concern. These changes are of particular concern for vulnerable populations served by safety- 8 net providersas stated in the introduction, these changes cannot be understood in isolation. AMGA member organizations are navigating a confluence of financial pressures that are straining their capacity to continue serving vulnerable populations, including decreases to physician reimbursement under the Medicare Physician Fee Schedule and recent federal action on Medicaid financing. Potential simultaneous cuts in 340B funds would be catastrophic for providers who treat lower-income patients. Policymakers should carefully consider these dynamics to ensure that any changes to the 340B Program do not inadvertently undermine the very providers and patient populations it is intended to support. For these reasons, AMGA urges HRSA to abandon consideration of a rebate pilot model. If HRSA chooses to proceed, however, it should do so cautiously, ensuring the model includes robust guardrails, clear data standards, and a neutral infrastructure to promote consistency and minimize administrative burden. Conclusion We thank you for your consideration of our comments. Should you have questions, please do not hesitate to contact AMGA's Darryl M. Drevna, senior director of regulatory affairs, at 703.838.0033 ext. 339 or at ddrevna@amga.org. Sincerely, Jerry Penso, M.D., M.B.A. President and Chief Executive Officer, AMGA
HRSA-2026-0001-2223Gulf Health Hospitals, Inc. DBA North Baldwin Infirmary and Mobile Infirmary Medical Center2026-04-20T04:00Z14,771 chars
See attached file(s) 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center in South Alabama, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center in South Alabama that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile 2 Infirmary Medical Center have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center have done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands added resources, imposing considerable additional costs and burdens on our institution that go far beyond what we had expected and planned for as a 340B hospitaland far beyond what we are experiencing now. The administrative and operational costs associated with the 340B Model Rebate Pilot Program is estimated to be hiring an additional 3 FTEs initially with the potential to need more as our program expands and possibly more medications are added. Key cost drivers are increased staffing ($200K annually), diverting current staff (adding at least 10 hours per week), and developing a process for challenging denials. 3 These incremental costs would cover (e.g., claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials) and current administrative costs would increase approximately $1 million for initial purchasing of these medications on WAC and compared to the current upfront 340B discount. Additional costs associated with implementation of a potential 340B Rebate Program not otherwise captured above include legal review ($25K annually), consulting services ($50K annually), and reduction in services offered (savings to patients through secured grants of $600K annually). These costs are recurring. The MFP program has already reduced our savings by $400K per month with the potential for more impact as more medications are added. This reduces the overall savings of our program by nearly $5 million per year. Staffing Impacts Under a Potential 340B Rebate Program. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center do not currently have the staff needed to comply with a Rebate Program. Implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees. The anticipated number of additional full-time employees is 3; and their roles/responsibilities would be to review claims to ensure all qualifying claims are uploaded to the Beacon platform, retrospective review of the data to make sure rebate was approved by the manufacturer, working with accounting to ensure payments are received, and disputing any denied claims with the manufacturer. We would need at least 6 weeks notice to hire/orient these employees and an additional 8 weeks to train them. The details of the roles and responsibilities of the new hires mentioned above require far more than the estimated additional 2 hours of work per week estimated by HRSA. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center have designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. 4 A potential 340B Rebate Model Pilot Program would require additional maintenance of data feeds to TPA to ensure accurate fields are available for reporting to Beacon. Estimated costs for system development and maintenance that would be required to implement a potential 340B Rebate Model Pilot Program are $40K initially and $10K annually. Our TPA does not have a direct feed into our EHR, so the reporting of medical claims would have to be manual. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our organization currently reviews medications given in clean infusion sites daily to ensure correct data is reported to the TPA. In addition, all sites are audited for compliance monthly. Most of the auditing/reconciliation is done by employees of our organization related to 340B Program participation with some activities conducted by a third-party vendor. A potential 340B Rebate Model Pilot Program would increase current data collection activities to include those described above and this increase in activity would be ongoing. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All these many different costs and burdens add up. Unfortunately, that means that Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center, will no longer be able to use our 340B savings as effectively and comprehensively as we did under 5 an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our health system estimates show that with a rebate model, we would have to float $6,960,000 each year to purchase the drugs at WAC. With this amount of money consumed by administrative red tape, we could not continue to support the programs we provide thanks to 340B savings, including, but not limited to: Organized community health fares and screening for our remote communities. Grow our outreach services. Provide training for pharmacy and medical residents. A pharmacy-managed comprehensive medication assistance program to ensure that our uninsured and underinsured patients have access to post- hospitalization medications. Last year approximately $660,000 was secured through co-pay assistance and grant foundations. Expand access to medications across our communities through retail pharmacies, specialty pharmacy, outpatient infusions, discharge medications, and home infusion. Expand access to oncology services. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT 6 platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon has assumed all retail claims for certain rebate model medications were purchased on 340B and therefore not eligible for rebate if there is a history of 340B purchases for the medication. An estimated 30% of claims have been rejected for rebate due to purchase on 340B when the claim was ineligible for 340B. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. NO drug company has raised a 340B/MDPNP deduplication issue with our entities to date Our TPA uses a Medicaid PCN/BIN file and deems any prescriptions filled using one of these file types as ineligible. Our entities have encountered some Medicare MCO programs that share a BIN/PCN with Medicaid and we monitor those claims to make eligible if warranted. We also target our audits for any Medicaid claims and have not identified any that were deemed 340B eligible. These processes are less burdensome than the proposed 340B rebate model. For all these reasons, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. 7 If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely,
HRSA-2026-0001-2224BJC Health2026-04-20T04:00Z15,191 chars
Please see attached from BJC Health in St. Louis, Missouri. BJC Health. East Region 4901 Forest Park Ave. St. Louis, MO 63108 bjc.org West Region 901 E. 104th St. Kansas City, MO 64131 saintlu keskc.org Via Electronic Submission (www.regulations.gov) April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services ATTN: HRSA-2026-03042 Re: Request for Information: 340B Rebate Model Pilot Program DearAdministrator Engels, BJC Health System ("BJC") provides hospital, professional, and post-acute care services throughout the St. Louis and Kansas City metro areas, including southern Illinois and eastern Kansas. BJC-member hospitals include numerous safety net institutions participating as Covered Entities in the 340B Drug Discount program ("340B" or "the Program") under the Critical Access, Sole Community, Pediatric, and Disproportionate Share ("DSH") eligibility criteria. We thank the Health Resources and Services Administration ("HRSA" or "the Agency") forthis second opportunity to provide input regarding a prospective 340B Rebate Model Pilot Program in this Request for Information ("the Rebate RFI").1 BJC previously submitted public comment regarding the prior 340B Rebate Pilot Program withdrawn earlier this year.2 We furtherdirect HRSAto related commentssubmitted by ourtrade associations, includingthe American Hospital Association and 340B Health. BJC-member 340B-participating hospitals rely upon upfront manufacturer discounts on 340B- acquired drugs to fund patient financial assistance and other community benefit programs, as Congress intended when it created the 340B program, "to stretch scarce federal resources as ' "Request for Information: 340B Rebate Model Pilot Program," published February 17, 2026, at 91 FR 7287 and available here: https://www.govinfo.gov/content/pkg/FR-2026-02-17/pdf/2026-03042.pdf. 2 "340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction," published August 7, 2025 at 90 FR 38165 and available here: https://www.govinfo.gov/content/pkg/FR-2025-08- 07/pdf/2025-14998.pdf. BJC's comment letter is available here: https://www.regulations.gov/comment/HRSA- 2025-0001-0769. BJC Health. far as possible, reaching more eligible patients and providing more comprehensive services."3 BJC strongly opposes rebate models within the 340B program, the latest front in drug manufacturers' ongoing battle to diminish the value of the 340B program and undermine every other attempt by policymakers to make pharmaceutical products affordable for American patients. We urge the Agency to reject manufacturers' pressure to introduce a 340B Rebate program and instead redirect its efforts toward addressing the long-studied weaknesses of the broader domestic pharmaceutical industry that the 340B program helps alleviate for patients and providers. We review below key points from our prior commentary on the challenges posed by a 340B Rebate program and respond to the policy concerns raised in this RFI. We offer suggestions for improving the 340B program generally and any prospective rebate model specifically, to preserve the value of 340B participation for safety net providers, patients, and communities. Current state of the 340B Drug Discount Program and possibilities for reform In 2025, the Majority Staff of the Senate Committee on the Health, Education, Labor, and Pensions ("HELP") issued a report recommending various Congressional reforms to the 340B program.4 HELP based those recommendations in part on testimony from 340B Covered Entities ("CEs"), including health systems similarto BJC, Contract Pharmacies ("CPs") that dispense 340B drugs to CE patients, and Manufacturers. HELP draws several important conclusions, including that CEs use 340B savings to fund a variety of safety-net and community benefit programs, including but not exclusively reduced or no-cost prescription drugs for patients; that CEs increasingly rely on CPs to reach patients outside the CE's immediate community but that CPs also capture a growing portion of the 340B discount in administrative fees; and that 340B discounts represent a substantial loss of revenue for manufacturers, who may also experience challenges verifying program integrity given the complexity of drug pricing and payment due to the numerous programs (e.g., the Medicaid Drug Discount Program and new Medicare Drug Price Negotiation Program) and 3 Section 602 of the Veterans Health Care Act of 1992 (P.L. 102-585) added new section 340B to the Public Health Services Act (42 USC 256b, available here: http://uscode.house.gov/view.xhtm l?path=/prelimOtitle42/cha pter6A/subchapter2/partD/subpart7&edition=prelim) This quote comes from a 2014 Interpretive Rule issued bythe Health Resources and Services Administration (HRSA), quoting a congressional committee report issued in conjunction with passage of the Act. The 2014 HRSA Interpretive Rule is available here: https://www.hrsa.gov/opa/progra mrequirements/interpretiverule/interdretiverule.pdf 4 "Congress Must Act To Bring Needed Reforms To The 340b Drug Pricing Program," published April, 2025 and available here: https://www.help.senate.gov/imo/media/doc/final 340b majority staff reportpdf.pdf. BJC Health. institutions (e.g., Pharmacy-Benefit Managers ("PBMs") and insurance companies), that may overlap or conflict with the 340B Program in complex and unpredictable ways. According to the RFI, manufacturers have requested the Agency test such a model due to concerns about Maximum Fair Price ("MFP") deduplication underthe Medicare Drug Price Negotiation ("MDPN") program specifically and duplicate discounts and diversion more generally.5 The HELP report also identifies these concerns and makes recommendations to addressthem based on reportfindings. Those recommendations broadly amountto requiring greater transparency from all parties; more tightly regulating CE and CP eligibility for the program and patient eligibility for a given 340B drug; and reducing administrative complexity.' Notably, HELP does not recommend implementing a rebate model in place of upfront discounts on drug prices. Neither does the Government Accountability Office ("GAO") in its many reviews of the 340B program.' Neither investigative body even considers such a policy, as it would undermine the purpose and value of the 340B program without improving overall program integrity, instead adding yet another layer of complexity on top of an already opaque stack of overlapping programs and protocols, to the benefit of only the manufacturers themselves. 3408 Rebate Models will diminish Americans' access to care Manufacturers feign concern that CEs do not appropriately pass savings on to patients, but their proposed solution would in fact exacerbate that problem (to the extent such problem even exists, which we dispute). Eliminating upfront discounts would force CEs to either discontinue associated safety-net programs funded by 340B savings, or front the funding required to continue operating those benefit programs absent point-of-sale discounts. For example, many CEs operate patient drug discount programs whereby they pass-through to beneficiaries the 340B price forthe covered drug. Under a rebate model, the CE must purchase the covered drug at full price, then either charge the patient the full rate (and then transfer the manufacturer rebate to the patient) or "float" the difference out of CE operating funds and wait for the rebate. Many CEs lack the financial capacity to do so and would instead need to revise, reduce, or eliminate entirely all direct patient support funded by 340B savings. 5 See 91 FR 7288 of the RFI linked in note one above. 6 See conclusion and recommendations starting at p. 38 of the report linked in note three above. 7 See for example, "Oversight ofthe Intersection with the Medicaid Drug Rebate Program Needs Improvement," published January 2020 and available here: httos://www.gao.gov/assetstao-20-212.pdf. BJC Health. BJC anticipates losing approximately $27 Million in upfront discounts annually under a Rebate program of similar scope to the one proposed and withdrawn in 2025. Among other patient and community benefits, upfront 340B savings underwrite BJC's retail pharmacy discount program that dispenses -18,000 low/no-cost prescriptions to -4200 uninsured patients annually. In addition to shoring up basic access to drugs for our most financially insecure patients, upfront 340B savings further enable our pharmacies to acquire the most advanced and/or experimental therapies, all of them very expensive and many of them poorly covered and/or poorly reimbursed by government and commercial payers. BJC hospitals would curtail access to these therapies if required to purchase them at full cost and wait for a rebate. Moving 340B discounts from upfront savings to backend rebates would thus doubly damage Americans' access to drugs at both the high and low ends of the affordability spectrum. We doubt the Agency, or even drug manufacturers themselves, desire this outcome; HRSA out of public interest and manufacturers' out of their desire to sell their products, highlighting the parochial and short-sighted nature of their drive toward rebates. Converting 340B to a rebate program will also diminish and delay CE investment in their facilities and communities. As noted in CE testimony provided to HELP, retained 340B savings keeps many struggling facilities financially viable in the short, medium, and long term.8 The HELP report, along with recent third-party studies of CE's use of 340B savings, find that CEs, after securing baseline operational stability, then use 340B savings to expand necessary services to struggling communities that could not otherwise afford them, rural communities in particular.94An added layer of costly administrative overhead for CEs, and the increased financial risk and uncertainty associated with waiting on a rebate, will delay and reduce this pool of funding and accelerate the demise of many safety-net hospitals serving urban and rural communities alike. Instead of expanding services, CEs will expand their internal bureaucracies and third-party vendor relationships to manage the additional administrative overhead imposed by a Rebate model. For BJC, we anticipate an investment of -$1 million to hire permanent new staff and to 8 See in particular testimony from Bon Secours Mercy Health starting on Appendix p. 3 ofthe HELP report linked in note three above. 9 See for example: Knox RP, Wang J, Feldman WB, Kesselheim AS, Sarpatwari A. Outcomes of the 340B Drug Pricing Program: A Scoping Review. JAMA Health Forum. 2023;4(11): e233716. doi:10.1001/jamahealthforum.2023.3716. 10 See also Access To Oncology Services In Rural Areas: Influence Of The 340B Drug Pricing Program, Kelsey M. Owsley and Cathy J. Bradley, Health Affairs 2023 42:6, 785-794 BJC Health. acquire and implement new IT systems and train current and new staff in their use. We'd also need to hire othervendors and/or consultants to help manage all of the above plus possibly renegotiate new wholesaler agreements and revise internal audit policies and protocols. The exact scope and scale of our efforts would depend in part on the details of any Rebate program, particularly the applicable drugs and the percentage of our total transactions (-5.5 million in 2025) they represent. We note that some ofthese costs will diminish in subsequent years, but most will grow commensurate with the Rebate program. Most importantly, each dollar spent administering the Rebate model will not be spent on patient care or community benefit or invested in new facilities or services as Congress intended when it created the program. Fortunately, different policies might resolve the Agency's legitimate concerns regarding program integrity without blowing up the 340B program entirely. A Patient-centric Rebate Model To its credit, HRSA asks how anticipated administrative costs and other pernicious effects of a Rebate program could be offset or otherwise mitigated." The surest way consists of forgoing a Rebate program entirely. If the Agency insists on some form of Rebate program, we recommend it establish a public third-party administrator to transparently operate all aspects of the Pilot, rather than permitting each manufacturer to operate their own. HRSA could fund this endeavor by requiring participating manufacturers to remit to the Agency a fee for accessing the HRSA TPA rebate portal. HRSA should similarly develop a clear system of oversight, enforcement (including an anonymous provider tipline for suspected manufacturer error), and formal dispute resolution protocols for all involved parties, including financial penalties plus interest for manufacturers that fail to provide timely rebates or deny claims as prohibited in General Requirement #13. HRSA should also expressly prohibit manufacturers from requiring CEs to provide any data beyond the bare minimum necessaryto adjudicate rebate eligibility and calculate rebate amounts. Lastly, HRSA must clearly define by what outcomes it will judge the success or failure of the Pilot. Any resulting financial strife placed on CEs that produces a significant reduction in provider capacity or capability, e.g., hospital closure or service line elimination, should count against the Pilot, outweighing any manufacturer-claimed reduction in alleged abuse of the program by CEs. We further suggest HRSA invite a third- party government agency, e.g., the OIG or the GAO, to audit any rebate program annually for 11 See 91 FR 7289 of the notice linked in note one above. BJC Health. at least the first three years to assess its impact on CEs, manufacturers, and overall program integrity. We believe these measures will produce the least-objectionable Rebate model and demonstrate the futility of such models for improving the 340B program or prescription drug access and affordability more generally. Conclusion BJC appreciates this opportunity to help shape the 340B Drug Discount Program. We strongly recommend HRSA forego any Rebate Model Pilot Program and direct its efforts toward meaningful reform focused on the needs of struggling patients and communities. The manufacturers seeking this model offer only empty posturing and fallacious reasoning to support its creation, an obvious subterfuge intended to facilitate a wholesale end to any and all programs that reduce the exorbitant prices they charge fortheir products, many of which were developed with significant government support. Should the Agency choose to move forward, we strongly recommend it does so by operating the pilot itself and clearly defining metrics for success focused on CEs and their patients attaining optimal health outcomes while avoidingfinancial ruin. Thank you in advance for your consideration. Sincerely, David Braasch, RPh President, Alton Memorial Hospital Senior System Pharmacy Executive BJC Health St. Louis, Missouri
HRSA-2026-0001-2225Rural Wisconsin Health Cooperative2026-04-20T04:00Z17,195 chars
See attached file(s) April 20, 2026 Tom Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 HHS Docket No. HRSA-2026-03042 Delivered via online form: http://www.regulations.gov Subject: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: The Rural Wisconsin Health Cooperative (RWHC) is pleased to offer our comments on the Health Resources and Services Administrations (HRSA) notice regarding the application process for the 340B Rebate Model Pilot Program. We appreciate your continued commitment to the needs of rural patients. Established in 1979, RWHC is owned and operated by forty rural acute, general medical-surgical hospitals. RWHC works to achieve the vision that rural Wisconsin communities will be the healthiest in America. Since 1992, when the 340B program became law, Health & Human Services has recognized a single mechanism to make the 340B price available to participating hospitals and other covered entitiesan upfront discounted price. In fact, HRSA issued guidance soon after the programs inception, stating that upfront discountsnot rebatesmust be made available to 340B covered entities. Upfront discounts have allowed rural covered entities to participate in 340B and effectuate the programs purpose of stretching scarce federal resources, while expanding access to care and vital community health needs. Rebate Model Pilot Program Criteria A rebate model represents a significant departure from how the 340B program has functioned since its inception. RWHC is extremely concerned that rebate models push the financial risk onto covered entities that operate with thin margins, add further administrative burden, and ultimately disincentivize rural covered entities from staying in the program. While we understand that HRSA must take action on rebate models following recent litigation, RWHC contends that rebate models are misaligned with the reality of operating a covered entity in a rural area and the purpose of 340B. We do not support the implementation of a rebate model pilot program, however we offer comment on opportunities to protect rural safety net providers. Rural exemption RWHC urges HRSA to consider adding a rural exemption to the program. Rural sole community hospitals (SCHs), critical access hospitals, rural disproportionate share hospitals (DSH) and federally qualified health centers must be allowed to opt out of this model and continue to receive upfront discounts in the program. Rural covered entities generally have less cash available and operate with thinner margins than do urban rural referral centers (RRCs), childrens hospitals or cancer hospitals. RWHCHRSA 340B Rebate April 20, 2026 Page 2 Additional notice and program parameters. RWHC appreciates the criteria put forth in this notice, but we believe that more guardrails and information are needed. Also, there are 15 days between the end of the comment period for this notice and the deadline for manufacturers to submit plan proposals. We are concerned that HRSA will not have sufficient time to modify the criteria for plans in this notice. In recently published frequently asked questions (FAQs), HRSA indicates that it is under no obligation to respond to or act on the comments. RWHC strongly urges the agency to take stakeholder comments seriously and publish an additional notice that addresses any new issues raised by stakeholders. 340B hospitals do not have a program integrity problem that needs to be addressed by a rebate model. Drug companies have repeatedly, asserted without basis, that there is rampant abuse by hospitals of the 340B program. In contrast, between FYs 2018 and 2022, 60% of drug companies had at least one adverse audit finding. And the trends are even more notable with respect to audit findings requiring repayment. In FY 2022, 75% of drug companies that were audited required repayment to 340B hospitals while only 28% of 340B hospitals audit findings involved any repayments. Enforcement RWHC urges HRSA to pursue all enforcement actions allowed under the 340B statute to rectify improperly denied rebates or other manufacturer abuses of the rebate model. HRSA should utilize its authority to impose civil monetary penalties on manufacturers in addition to its stated ability to terminate manufacturers rebate model agreements. RWHC is particularly concerned that covered entities will not have an efficient and timely process for seeking relief for improperly denied rebates or other issues that may arise out of participating in a rebate model. HRSA notes that manufacturers may use existing statutory processes, including 340B Administrative Dispute Resolution (ADR), for diversion and duplicate discount concerns. Some covered entities that have had ADR claims pending for multiple years and therefore, we are extremely concerned that ADR is not efficient enough for covered entities to obtain relief for improperly denied rebates. This will particularly be an issue for rural covered entities that cannot afford to wait months or years for rebates given that they generally have less cash available and operate with thin margins. RWHC asks that HRSA explore its statutory authority to implement a separate process for resolving rebate disputes. This process must prioritize timely, expedited review of disputes. Contract pharmacy. Manufacturer restrictions on contract pharmacy arrangements have eroded the benefit of the program for rural covered entities and added significant administrative complexity. As HRSA knows, since 2020 dozens of drug companies have imposed restrictions on access to 340B discounted pricing through contract pharmacies. These restrictions have created enormous administrative and financial burdens for 340B rural hospitals. HRSA does not address manufacturers ability to deny claims because covered entities did not comply with contract pharmacy conditions. HRSA explicitly states that rebate claims cannot be denied due to duplicate discount or diversion concerns. Similarly, HRSA must make clear that manufacturers cannot deny rebates for contract pharmacy claims that do not comply with manufacturer restrictions. This is not the appropriate avenue to resolve contract pharmacy disputes and withhold savings from covered entities. We are concerned that if this is a legitimate basis for denying rebate claims, it will be misused by manufacturers. RWHCHRSA 340B Rebate April 20, 2026 Page 3 General Requirements Ideally, RWHC would like to see HRSA establish a centralized repository for processing rebate model claims. The model is limited to drugs selected for on the Centers for Medicare and Medicaid Services (CMS) Medicare Drug Price Negotiation Program (MDPNP); however, that encompasses ten drugs and nine different manufacturers. This means that rural covered entities could be required to register for and use nine different IT platforms, which will be a significant challenge. In the CY26 Physician Fee Schedule rule, CMS proposes to pilot a 340B claims data repository for use in identifying 340B units for the calculation of Medicare inflation rebates required under the Inflation Reduction Act. HRSA could use this same repository for the rebate model pilot program. This would (1) minimize some of the administrative burden associated with the rebate model by allowing hospitals to submit claims data to a single entity; (2) limit the ability of drug companies to use any data for reasons outside the scope of this rebate model; and (3) allow the agency to more easily oversee the pilot program. Moreover, as proposed, hospitals would submit data to IT platforms that are either directly owned by drug companies or by third parties that work closely with drug companies. It is doubtful that these IT platforms would be neutral parties. We are concerned about the risk of conflicts of interest or improper use of the data for purposes outside the scope of this rebate model pilot program. We believe that manufacturers should not be able to choose their own data elements, especially considering that covered entities may have to submit claims to up to nine different manufacturers. However, if HRSA decides to move forward with allowing manufacturers to use their own unique IT platforms, we urge HRSA to ensure that covered entities data submission to manufacturers will not impose additional costs or burdens on covered entities. A limited, uniform set of data elements will help moderate the burden of submitting claims. No additional administrative costs must mean no additional administrative costsof any kind. Increasing complexity in the 340B program have eroded rural covered entities savings and increased workloads. Manufacturers must not be allowed to compound these difficulties by passing along costs of data submission and associated platforms to covered entities. Reporting Requirements RWHC supports HRSAs guideline that requires manufacturers to allow covered entities to submit data for up to 45 days after dispensing. HRSA states that manufacturers must allow any extenuating circumstances and other exceptions when it comes to late data submissions. We request more detailed guidelines around extenuating circumstances and other exceptions. We are concerned that without prescriptive language around what manufacturers may consider extenuating circumstances and other exceptions that they will not afford covered entities true exceptions when they are needed. Rebate models must be transparent for rural covered entities. Many rural covered entities are concerned about rebate models because they do not have ample cash on hand to absorb paying the full wholesale acquisition cost and waiting for a rebate. They should be equipped with transparent, real-time data about the status of their rebate claims. As the agency acknowledges, the rebate model will require hospitals to purchase the 10 Medicare Part D drugs included in the pilot at the drugs wholesale acquisition cost (WAC), the highest sale price for a drug and rarely paid in the market. The WAC price for some of these drugs are more than 100 times the 340B price for the drug. With mere weeks to prepare for this pilot program, hospitals have not been able to budget for such an extraordinary increase in their upfront costs. Even with time to budget, most hospitals lack the necessary cash reserves to float such significant sums of money while waiting for drug companies to pay them back even for 10 days. Rebate Requirements RWHC supports HRSAs call for manufacturers to pay rebates within 10 calendar days. As mentioned above, rural covered entities are not in a financial position to absorb upfront costs and wait for rebates. Rural RWHCHRSA 340B Rebate April 20, 2026 Page 4 covered entities rely upon 340B program savings to help stretch scarce federal resources and provide critical services to their patients, as is the intent of the program. We request stricter guidelines around rebate denials. We appreciate that HRSA includes a requirement for manufacturers to provide documentation in support of a denial but we remain concerned that this is not enough. Manufacturers must provide clear, timely information on any rebate claim denials. Manufacturers must provide a specific reason for the denial along with a narrative justification. This should also include an explanation of how covered entities can rectify the denial and, if possible, resubmit data to receive a rebate. The notice states that covered entities can raise concerns with the Office of Pharmacy Affairs (OPA) if there are issues with rebate delays and denials, or any other administrative or logistical issues emerging through implementation of the rebate model. But the agency does not specify how it expects 340B hospitals to raise these concerns or provide for a particular process to facilitate that beyond providing a general email address to lodge complaints. This is dangerously insufficient given the implications of the rebate model on hospital finances. RWHC strongly recommends that HRSA create a separate process to collect, respond to, and adjudicate any disputes related to its rebate model pilot program. This separate process should allow for expedited review and timely decisions of any rebate-related claim disputes. Most important, the agency should provide (1) a designated human point-of-contact to receive complaints (and follow-ups on those complaints) and (2) a specific timeline for when those complaints will be addressed. HRSA should take these extra measures to ensure that 340B hospitals have an accessible and timely mechanism to raise concerns and resolve rebate-related disputes RWHC strongly supports HRSAs guideline that manufacturers cannot deny rebate claims based on diversion or duplicate discount concerns. Again, we stress that contract pharmacy noncompliance cannot be a legitimate reason for manufacturers to deny claims and HRSA must issue guidance on this. The rebate model has the potential to add multiple layers of complexity for rural covered entities. HRSA must ensure that the pilot program adds as little additional burden to participants as possible. We reiterate that information included along with a denial must explain directly why the claim was denied and how covered entities can rectify the denial and, if possible, resubmit to receive a rebate. Rebate disputes that may result in unrecovered savings means real financial consequences for rural covered entities that have historically relied upon 340B savings to keep services and medications available to patients. We urge HRSA to monitor closely any issues with denied rebates. We encourage the agency to use its authority to terminate manufacturers rebate models, and additionally impose civil monetary penalties, if they are not complying with the criteria outlined in their plans and in HRSAs guidance, particularly for untimely or improperly denied rebates. HRSAs Rebate Model is limited to drugs selected for MDPNP, and only manufacturers eligible for the pilot are those with MDPNP contracts. RWHC fully supports limiting rebate models to MDPNP drugs. We believe that limiting the scope of 340B drugs subject to rebate models will make the process less administratively difficult for rural covered entities. Rural covered entities lack the staff or infrastructure to manage any additional administrative workload. HRSA notes that it may call for plans from manufacturers for future years beyond 2026 at a later date. Future iterations of the rebate model should remain limited in scope. RWHC does not support expanding rebate models to all 340B drugs. Finally, HRSA needs to define how the agency will measure and determine success of the pilot program. HRSAs stated goal of the pilot program is to better understand the merits and shortcomings of the rebate RWHCHRSA 340B Rebate April 20, 2026 Page 5 model. However, the agency does not specify how it will achieve this goal or how it will determine whether the pilot program was successful. Upfront discounts have allowed rural covered entities to participate in 340B and effectuate the programs purpose of stretching scarce federal resources, while expanding access to care and vital community health needs. Any pilot program results needs to be transparent and clear a very high bar before continued implementation that jeopardizes the very rural covered entities that this 30+ year program is meant to help. The 340B programs upfront discount structure provides hospitals with predictability and stability, enabling them to stretch scarce resources to meet community needs. A rebate approach reverses that payment model by requiring hospitals to pay full price upfront and wait for reimbursement. That shift would disrupt cash flow, increase administrative burdens, and introduce uncertainty that many safety-net hospitals cannot absorb. We hope that after careful consideration of comments from 340B hospitals and other stakeholders, HRSA will recognize that imposing hundreds of millions of dollars in costs on hospitals serving rural and underserved communities is not a sound policy. RWHC is extremely skeptical that the drug companies, whose profits improve when rebates are delayed or denied, will work in good faith to resolve disputes with rural hospitals over the timeliness of rebate payments. Rural hospitals are already struggling financially with the delayed and denied reimbursement from health insurers, whether commercial or Medicare Advantage plans, and the impact that this cash flow crunch has upon operations and ultimately rural communities. Thank you for your consideration of these comments on the 340B Rebate Model Pilot Program. We urge your review and reconsideration. We look forward to continuing our work together to achieve mutual goals of improving access and quality of health care for all rural Americans. Sincerely, Tim Size Executive Director
HRSA-2026-0001-2226Johnson & Johnson2026-04-20T04:00Z87,744 chars
Please see attachment. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 1 of 26 SUBMITTED ELECTRONICALLY VIA REGULATIONS.GOV April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources & Services Administration Department of Health & Human Services 5600 Fishers Lane Mail Stop 14W52 Rockville, MD 20857 Re: Johnson & Johnson Health Care Systems Inc. Comments on Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: I write on behalf of Johnson & Johnson Health Care Systems Inc. (J&J) in response to the Health Resources & Services Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) (the RFI)1 and the accompanying Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation (ICR).2 J&J appreciates the opportunity to provide feedback regarding the RFI and ICR. J&J has sought to work transparently and constructively with HRSA on implementation of a rebate model since July 2024. Most recently, in September 2025, J&J submitted comments in response to HRSAs announcement of the application process for the initial 340B Rebate Model Pilot Program (Pilot),3 and HRSA approved J&Js application for initial price applicability year (IPAY) 2026 drugs STELARA4 and XARELTO. J&J planned to participate in the Pilot until HRSA terminated the program earlier this year pursuant to a court order. Although J&J maintains that the 340B statute authorizes manufacturers to implement rebate models without HRSAs prior approval, we nevertheless commend HRSA for re-starting the pilot process and seeking stakeholder input on a new 340B rebate model pilot program. HRSAs support for a rebate model offers a practical mechanism that allows manufacturers to more effectively deduplicate discounts and address ongoing 340B program integrity concerns. We welcome the opportunity to contribute to the success of a rebate model pilot program and support its expansion to all covered outpatient drugs and broader use for 340B Program compliance purposes. Since 2024, J&J has corresponded extensively with HRSA regarding the use of a rebate model and J&Js attempts to conduct statutorily authorized audits of various covered entities due to documented concerns of potential diversion and duplicate discounting. Although HRSA approved our audit requests and associated work plans nearly two years ago, we continue to encounter substantial resistance from certain covered entities, causing those audits to remain incomplete and to result in extraordinary expense, despite the fact that covered entity compliance with HRSA-approved manufacturer audits is a condition of 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906NEW, 91 Fed. Reg. 9632 (Feb. 26, 2026). 3 90 Fed. Reg. 38165 (Aug. 7, 2025). 4 We note that J&Js drug USKETINUMAB (unbranded STELARA) is a selected drug for IPAY 2026 and would also be included in a pilot covering IPAY 2026 selected drugs if J&Js rebate model plan were to be approved. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 2 of 26 participation in the 340B Program.5 Our experience with the audit process reinforces the need for a rebate model. Below we have provided our comments in response to the RFI. Section I outlines J&Js advocacy efforts regarding a rebate model, frustrated pursuit of HRSA-approved covered entity audits, and initial participation in the Pilot. Section II describes the 340B Programs widespread issues with abuse, including duplicate discounting, diversion, the replenishment model, and covered entity audits. Sections III and IV respond to HRSAs questions raised in the RFI. Section III outlines how a rebate model would address program integrity concerns, including through real-time claim and program reporting. In conclusion, Section IV clarifies the limited impact a rebate model would have on covered entities. I. J&Js Advocacy for a Rebate Model, Frustrated Audit Efforts, and Participation in HRSAs Initial Pilot. Since 2024, J&J has advocated for a 340B rebate model that would support program integrity and facilitate deduplication of discounts under Section 340B and the Medicare Drug Price Negotiation Program (MDPNP) created by the Inflation Reduction Act (IRA).6 J&J first proposed a rebate model for sales to Disproportionate Share Hospital (DSH) covered entities of its two IRA-selected drugs (STELARA and XARELTO) in mid-2024, explaining that the deduplication procedure directed by the IRA presented serious logistical hurdles that a rebate model would best address. J&Js advocacy for a rebate model proceeded alongside its efforts to conduct a series of HRSA- approved audits of covered entities. For nearly two years, however, J&J has faced fervent resistance from several covered entities, making clear that audits are not an adequate means to address longstanding program integrity concerns. a. J&Js Pre-Pilot Advocacy for a 340B Rebate Model J&Js interest in pursuing a 340B rebate model arose from concerning trends it observed in the volume of purchases of its products at 340B prices. Across its portfolio, purchases of J&Js drugs at 340B prices have increased at least twice as fast as its overall sales, and 340B purchases of certain of its products increased even faster. For example, from the second quarter of 2023 to the second quarter of 2024, 340B purchases of STELARA increased by 56%about five times as fast as STELARAs overall sales. Likewise, 340B purchases of XARELTO increased by 33%about eight times as fast as XARELTOs overall sales. These significant increases in 340B sales occurred even though the population of patients either uninsured or living in povertythe patients who should be benefiting from 340B discountshas actually declined by almost half, from 15.7% of the U.S. population in 2013 to 8.7% in 2021.7 These aberrant purchasing patterns were a key factor that prompted J&J to pursue covered entity audits and to consider a rebate model. J&J first met with HRSA to discuss 340B rebate models in mid-2024, explaining that under the current structure of the 340B Program, it has little to no visibility into the claims-level data necessary to validate 340B claimsin particular, whether covered entities are unlawfully causing duplicate discounts on 340B-priced drugs. Offering the 340B price through a rebate, J&J explained, would improve the integrity 5 42 U.S.C. 256b(a)(5)(C). 6 Pub. L. No. 117-169, 136 Stat. 1818 (2022). 7 See Rory Martin et al., IQVIA, Unintended Consequences: How the Affordable Care Act Helped Grow the 340B Program, at 8 (Aug. 30, 2024), https://bit.ly/3XFDWh8. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 3 of 26 of the 340B Program by helping to mitigate the risk of duplicate discounts, which HRSAs own audits demonstrate occur frequently year after year.8 J&J also described the challenges it faced in attempting to comply with its obligations under the IRAs MDPNP. Under the IRA, covered entities are entitled to the lesser of the 340B price or the maximum fair price (MFP) for drugs selected for negotiation by CMS. For calendar year 2026, this includes two J&J products, STELARA and XARELTO. Because the IRAs nonduplication provision protects manufacturers from providing both the 340B ceiling price and the MFP on the same drug unit and requires manufacturers to make this determination within 14 days of the transaction, effectuating the MFP requires manufacturers to identify when 340B-priced drugs are dispensed to Medicare beneficiaries in real-time. However, CMS had not yet (and to date, still has not) developed a mechanism that would enable manufacturers to identify 340B-eligible MFP claims. Offering the 340B price through a rebate, J&J explained, would be the most effective means for J&J to fill the gap left by CMS, enabling J&J to identify Medicare claims in real-time and comply with the IRAs nonduplication requirement. In light of these challenges, J&J informed HRSA that it was contemplating a shift to a rebate model. Under the model, DSH covered entitieswhich J&Js data showed were particularly prone to abuse would acquire STELARA and XARELTO from wholesalers at commercial prices and then receive a rebate to realize the 340B ceiling price promptly after submitting commercially standard claims data, which could occur before payment is due under standard wholesaler terms. J&J stressed that the rebate model would utilize standard claims data that covered entities already collect in the normal course of business, retain for 340B compliance purposes, and submit to payers in the reimbursement process. After further correspondence between J&J and HRSA, however, HRSA concluded that Section 340B grants HRSA authority to require its pre-approval before a manufacturer may adopt a rebate model and warned J&J that penalties for proceeding with an unapproved rebate model could include termination from the program. HRSA provided similar responses to other manufacturers that proposed their rebate models. Faced with the threat of termination, J&J paused its plan to implement a rebate model and brought litigation against HRSA. That case, along with other cases brought by other manufacturers, remains pending before the U.S. Court of Appeals for the District of Columbia Circuit. b. J&Js Stymied Audits of Covered Entities In parallel with its efforts to adopt a limited-scope rebate model, J&J sought and obtained HRSAs approval to conduct audits of a dozen covered entities. Instead of cooperating with the duly authorized auditsas the 340B statute required them to do9many of the covered entities resisted, obfuscated, and delayed. Six of the covered entities filed suit against HRSA seeking to halt the audits altogether. All six suits were dismissed.10 8 See U.S. Govt Accountability Off., GAO-21-107, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 1314 (Dec. 14, 2020), https://www.gao.gov/assets/gao-21-107.pdf (finding nearly 35% of HRSAs 2012-2019 audits resulted in a finding of duplicate discounting, and 44% resulted in a finding of diversion); see also HRSA, Program Integrity: FY22 Audit Results, https://www.hrsa.gov/opa/program-integrity/fy-22-audit-results (last updated Feb. 23, 2026) (finding duplicate discounts at nearly two dozen of the 199 covered entities HRSA audited in 2022); HRSA, Program Integrity: FY23 Audit Results, https://www.hrsa.gov/opa/program-integrity/fy-23-audit-results (last updated Mar. 30, 2026) (finding duplicate discounts at nearly two dozen of 176 entities audited in 2023); HRSA, Program Integrity: FY24 Audit Results, https://www.hrsa.gov/opa/program-integrity/fy-24-audit-results (last updated Mar. 30, 2026) (finding duplicate discounts at nearly two dozen of the 179 entities audited in 2024); HRSA, Program Integrity: FY25 Audit Results, https://www.hrsa.gov/opa/program-integrity/fy-25-audit-results (last updated Mar. 30, 2026) (finding duplicate discounts at nearly two dozen of the 115 entities with completed audits conducted in 2025). 9 42 U.S.C. 256b(a)(5)(C). 10 Or. Health & Sci. Univ. v. Engels, No. 24-cv-2184, 2025 WL 1707630 (D.D.C. Jun. 17, 2025). Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 4 of 26 Even now, two years after J&J began its good-faith outreach to covered entities and almost one year since the district court dismissed their lawsuits, some of the entities that brought suit continue to resist J&Js auditsdespite multiple reminders from HRSA that they are required to comply as a condition of their 340B Program eligibility. These covered entities have developed a playbook to vitiate J&Js rights by dramatically increasing the costs and time required even to initiate an audit, let alone complete one and take any disputes to administrative dispute resolution (ADR). Moreover, even when audits can be effectively conducted, they serve a different purpose than rebate models. Audits are backward-looking and cannot ensure future compliance; they address only a narrow subset of historical claims; they can take months or, in our experience, years to complete; they can be conducted only for a handful of entities per year at most; and they do not require covered entities to address the full scope of identified noncompliance or revise the policies or procedures that led to any identified violations. As a resultand especially in light of covered entities ability to resist them without apparent consequenceaudits are a profoundly inefficient and ineffective tool for addressing program abuse and only serve to reinforce the need for a rebate model. c. HRSAs 340B Rebate Model Pilot Program and J&Js IRA Compliance Without a Rebate Model J&J appreciates HRSAs willingness to explore practical solutions to ensure greater program integrity and address challenges manufacturers face in implementing their overlapping statutory obligations. J&J was prepared to participate in the initial Pilot after HRSA approved its application and applauded HRSA for taking an important first step toward structured and transparent rebate models. J&J is pleased to share responses to the questions posed in HRSAs RFI, along with related information that J&J believes will be useful as HRSA considers the potential for another rebate model pilot. Without a rebate model, J&J has been grappling with its limited ability to implement the deduplication provisions of the IRA since the MFP became effective on January 1, 2026. J&J has relatively little access to real-time data needed to deduplicate 340B and MFP discounts consistent with its obligations under the IRA. Without the claims data that a rebate model would make available for all MFP claims across all covered entities, J&J must rely on limited and imperfect data and analytics to reasonably identify units of STELARA or XARELTO dispensed to Medicare Part D beneficiaries that were eligible for 340B pricing. This is, in part, because J&Js current contract pharmacy policy applies only to hospital covered entities, many of which have opted out and submit no data to J&J. As of this time, a very limited subset of dispensing entities self-identify 340B-eligible MFP claims to J&J. To date, pharmacies have classified fewer than 0.5 percent of MFP claims as 340B, despite estimates suggesting 10% to 12% of MFP claims are 340B.11 In the absence of a mechanism to identify all 340B-eligible MFP claims, J&J estimates that it faces increased risk of paying duplicate discounts on up to 40% to 50% of 340B-eligible MFP claims and estimates that it has already paid approximately $80 million in duplicate discounts on 340B-eligible MFP claims for STELARA and XARELTO since January 1, 2026. 11 BRG, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, at 2 (Apr. 2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and- Outlook-to-2027.pdf. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 5 of 26 II. The 340B Program Suffers from Pervasive Program Integrity Abuse. The 340B Program is rife with abuse and has increasingly operated beyond its narrow statutory purpose. The legislative history of the 340B statute confirms the programs intent: to reduce pharmaceutical costs for safety-net medical providers and the indigent populations they serve.12 Over time, however, the Program has expanded in scope and complexity without necessary guardrails or transparency. This expansion has contributed to persistent compliance concerns, including duplicate discounts between Medicaid and 340B, diversion of discounted drugs to ineligible individuals, and the inability to verify program integrity in a timely manner. This section discusses these concerns in more detail. a. Duplicate Discounting is Widespread Under the 340B Program. Covered entities may receive improper duplicate discounts in two ways. First, the 340B statute expressly prohibits a covered entity from obtaining a 340B discount on the same units of a covered outpatient drug that generate a Medicaid rebate.13 Despite this prohibition and well documented risks of manufacturers paying duplicate discounts, manufacturers are significantly limited in their ability to access Medicaid and 340B claims data to prevent duplicate discounts. With respect to accessing 340B claims data, we note that J&Js 340B contract pharmacy policy currently applies only to hospital covered entities (i.e., it excludes grantee covered entities) that opt to submit claims data to 340B ESP, and, even then, only to self-administered drugs that were billed through pharmacy claims. On the Medicaid side, only a subset of states currently provide J&J access to Medicaid claims data that allows for matching against 340B claims to identify potential duplicate claims. Notwithstanding these data limitations, J&J analyzed 340B claims that hospital covered entities submitted to the ESP platform for the most recent nearly three-year period and found more than 16,500 340B claims that were potentially duplicated with Medicaid rebate claims. This amounted to more than $22.4 million in potentially duplicated Medicaid rebate requests during the period. Given the data limitations described above, this estimate likely dramatically understates the true scope of J&Js potential Medicaid duplicate discount exposure. More broadly, however, a 2020 report issued by the Government Accountability Office (GAO) found that, in the 1,242 audits HRSA conducted from fiscal years 2012 through 2019, HRSA had identified 429 findings related to duplicate discounts.14 In other words, nearly 35% of HRSAs audits found evidence of prohibited duplicate discounting. More concerningly, both HRSA and J&J have an even more limited ability to identify (and no means to prevent) duplicate discounts in the Medicaid managed care context which is the primary drug coverage mechanism for Medicaid beneficiarieseven though duplicate discounting in this context may be even more widespread.15 In 2019, when the 340B program was less than half its current size, it was estimated that industry-wide Medicaid/340B duplicate discounts amounted to as much as $1.5 billion annually.16 This duplicate discount risk persists despite the 340B statute expressly obligating the Secretary of HHS to develop[]...more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts....17 Second, as discussed above, although the IRA states that a manufacturer is protected from providing access to the MFP for a selected drug to a 340B covered entity when the 340B ceiling price is lower than 12 H.R. Rep. 102-384, pt. II, at 1012 (1992). 13 42 U.S.C. 256b(a)(5)(A). 14 U.S. Govt Accountability Off., GAO-21-107, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 14 (Dec. 14, 2020), https://www.gao.gov/assets/gao-21-107.pdf. 15 Id. 16 Kalderos, Making Health Policy Work for Patients (2021), https://f.hubspotusercontent40.net/hubfs/7227094/2021%20Annual%20Report/Annual_report_2021.pdf. 17 42 U.S.C. 256b(d)(2)(B)(iii). Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 6 of 26 the MFP,18 no mechanism exists that would permit a manufacturer to verify whether the same unit of drug is subject to both 340B and MFP discounts. The magnitude of duplicate discount risk resulting from the absence of a deduplication mechanism is significant. As of April 2026, pharmacies have classified fewer than 0.5 percent of MFP claims as 340B through either CMS or Beacon MFP mechanisms. An analysis of Medicare Part D PDE data suggests 10% to 12% of MFP claims should be identified as 340B. This translates to fewer than 5 percent of 340B claims [being] self-identified as such by pharmacies.19 J&Js experience is similar. In early March 2026, J&J observed that fewer than 0.4% of MFP claims for its selected drugs were being self-identified as 340B. This dramatically poor rate improved to only 0.5% in April 2026 after J&J sent a communication to all MTF-registered dispensing entities reminding them of their obligation to submit accurate claims and providing instructions for self-identifying 340B-eligible MFP claims in Beacon MFP. Additionally, based on one early report, in the first 30 days after the MFP went into effect, only 60% of MFP claims were properly processed.20 Of the 40% of claims processed incorrectly, the report showed that 30% of total claims experienced duplicate payments, in which manufacturers paid both MFP and 340B pricing on the same transaction. The average dollar value per duplicate payment was $398....21 These error rates translate into substantial and avoidable financial exposure for manufacturers and highlight the need for more reliable, real-time mechanisms to ensure that only one statutory discount applies to a given claim. J&J faces significant challenges in identifying duplicate discounts under the 340B Program. The third-party data sources available to J&J provide only retrospective transactional information, which does not allow J&J to prevent duplicate discounts at the point of sale. Compounding this problem, there is no universal data source that reliably identifies the 340B status of an individual claim. Most covered entities currently do not provide claims-level data to J&J. And, even where such data is available, it is often incomplete, inaccurate, or obsolete, making it difficult to reconcile with other rebate and utilization data. These challenges are further compounded by the MFPs timing requirements, under which J&J must provide access to the MFP on a selected drug dispense within 14 days. When J&J is able to identify an improper 340B duplicate discount, the process for recouping those amounts is burdensome, inefficient, and often unsuccessful. State Medicaid agencies frequently direct us to seek repayment from the covered entity, rather than refunding the associated Medicaid rebate. The covered entity, on the other hand, often directs us to the state Medicaid agency. As a result, because CMS does not require states to implement clear Medicaid managed care guidelines addressing use of 340B drugs,22 and because HRSA does not require covered entities to address identified duplicate discounts in Medicaid managed care and work with manufacturers to repay them,23 recoupment of these duplicates, if identified, is often unsuccessful. 18 Social Security Act 1193(d)(1). 19 BRG, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, at 2 (Apr. 2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and- Outlook-to-2027.pdf. 20 340B Report, 40% of Claims Miss the Mark (Mar. 5, 2026), https://340breport.com/40-of-claims-miss-the-mark-sponcon- rxparadigm/. 21 Id. 22 U.S. Govt Accountability Off., GAO-20-212, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, at 28 (Jan. 27, 2020), https://www.gao.gov/products/gao-20-212. 23 Id. at 26. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 7 of 26 b. The Current 340B Program Structure Undermines Manufacturers Ability to Prevent Diversion. The 340B statute prohibits the resale or transfer of drugs at the 340B ceiling price to any person who is not an eligible patient of the purchasing covered entity, a practice commonly referred to as diversion. HRSAs 1996 guidance defines a patient as having (i) an established relationship with the covered entity, including that the covered entity maintains the individuals healthcare records; (ii) the health care professional is either employed, contracted, or has another arrangement with the covered entity (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and (iii) for grantee covered entities, the care provided is consistent with the scope of services for which the covered entity receives grant funding.24 HRSAs 1996 guidance does not consider an individual a patient of the entity for purposes of 340B if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting.25 The 340B Program has experienced significant diversion concerns, as repeatedly confirmed by HRSAs audit findings.26 In particular, as a result of replenishment systems adopted by covered entities, 340B eligibility is now determined long after the product dispense. Replenishment systems work in one of two ways. First, under product replenishment, a pharmacy initially purchases a drug from a wholesaler at a commercial price, places it in neutral inventory, and then dispenses the product to patrons of the pharmacy. The covered entity or its third-party administrator (TPA) later will determineweeks or even months after the dispensethat the patient was (according to them) a patient of the covered entity. The pharmacy then receives a replacement unit purchased by the covered entity at the 340B price and the manufacturer pays a chargeback to make the distributor whole. Second, under what is called credit-based replenishment, the process is essentially the same, except that, instead of receiving a new unit of the product to replace the unit dispensed to a 340B patient, the wholesaler performs a series of financial transactions that are not transparent to the manufacturer to effectuate 340B pricing without the physical distribution of drugs. While these models differ by wholesaler, they often result in (i) the pharmacy receiving a credit to its wholesale acquisition cost (WAC) account on an invoice for drugs it previously purchased, and (ii) the covered entity being invoiced for those previously purchased drugs at the 340B price with a chargeback issued to the manufacturer. Under either approach, the records associated with the drug dispense or administration to the (purported) covered entity patient do not identify 340B eligibility. Rather, the eligibility determination is made only after the covered entity or its TPA actsweeks or even months following the dispense or administration. The chargeback invoice to the manufacturer requiring the 340B discount is disconnected from the dispense/administration records, therefore creating a lack of visibility into the patient eligibility assessment. And, although manufacturers are allowed to audit covered entities to assess compliance with the statutory duplicate discounting and diversion prohibitions, that process has proven ineffective for the reasons explained above and, in any event, does not allow manufacturers to audit contract pharmacies or TPAs, where much of the evidence concerning patient eligibility is housed. Under this current opaque system that covered entities have created, most diversion can run rampant with virtually no visibility or means of detection. However, using the limited 340B claims data J&J has received from certain hospitals participating in its contract pharmacy policy, for the most recent three-year period, J&J identified more than 10,200 duplicate 340B claims submitted by distinct covered 24 61 Fed. Reg. 55156, 5515758 (Oct. 24, 1996). 25 61 Fed. Reg. at 55158. 26 HRSA, Program Integrity: FY25 Audit Results (last updated Mar. 30, 2026), https://www.hrsa.gov/opa/program-integrity/fy- 25-audit-results. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 8 of 26 entities (i.e., where multiple covered entities claimed 340B pricing on the same drug dispense/administration). Despite guidance stating that only one covered entity is permitted to receive 340B pricing on a single drug dispense or administration,27 J&Js limited data clearly shows that covered entities use of overbroad patient definitions and expansive contract pharmacy networks are causing unlawful diversion on a likely much larger scale that a rebate model would identify and prevent. More broadly, in the GAO report referenced above, GAO found that HRSA made 546 findings related to diversion, meaning over 40% of HRSAs audits found that covered entities were dispensing 340B drugs to non-patients.28 J&J does not have the data necessary to combat all instances of diversion, which manufacturers can only collect from covered entities. Indeed, J&J has been prevented from obtaining such data,29 including from covered entities, even where J&J has reasonable cause to suspect 340B noncompliance and has secured HRSA approval to conduct an audit.30 A rebate model can mitigate this serious problem. III. A Rebate Model Will Improve Program Integrity. A rebate model offers a practical and effective framework for strengthening program integrity and improving compliance within the 340B Program. By requiring standardized reporting of pharmacy claims, medical claims, and purchase data, a rebate model would enhance transparency, enable timely validation of 340B eligibility, and support more effective oversight. This approach represents the most viable means of delivering the real-time data necessary to prevent noncompliance while preserving program functionality. Consistent with these objectives, J&J supports manufacturer-required reporting mechanisms that are essential to demonstrating and operationalizing a rebate model in practice. Below we respond to the following questions that HRSA sets forth in the RFI: Question 1, Costs to Covered Entities; Question 3, Rebate Denials; Question 5, Manufacturer Efforts to Avoid Duplicate Discounting; Question 6, Required Reporting; and Question 7, 340B Program Integrity and other Potential Benefits of a Rebate Pilot. a. HRSA Should Not Limit the Types of Covered Entities that Participate in the Rebate Model. The RFI requests that covered entities [i]dentify any organization-specific factors that could impact your organizations ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center).31 HRSA should not limit a rebate model pilot to certain covered entity types. J&J assumes the purpose of a pilot would be to test the feasibility of rebates with a limited set of drugs. Excluding certain covered entities from a pilot would frustrate this purpose by depriving HRSA and stakeholders of the ability to assess the viability of rebate models across the 340B program. Additionally, implementing a rebate model for only a subset of covered entities, and allowing non- participating covered entities to continue purchasing all 340B drugs at up-front discounts, would create considerable operational complexity across the pharmaceutical supply chain and introduce new 340B 27 340B Prime Vendor Program. (September 30, 2020). FAQ ID: 1599. 340B Patient Definition. Available at: https://www.340bpvp.com/search#tab=faq&cf-p faq category hierarchy=Policy/Implementation,Patient%20Definition. 28 U.S. Govt Accountability Off., GAO-21-107, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 14 (Dec. 14, 2020), https://www.gao.gov/assets/gao-21-107.pdf. 29 Pharm. Rsch. & Mfrs. of Am. v. McCuskey et al., No. 25-1054, --- F.4th ----, 2026 WL 898259, at *11 (4th Cir. Mar. 31, 2026) (stating that if manufacturers are prohibited from obtaining claims data from covered entities, they lack the ability to identify potential diversion). 30 See, e.g., Or. Health & Sci. Univ. v. Engels, No. 24-cv-2184, 2025 WL 1707630 (D.D.C. Jun. 17, 2025). 31 91 Fed. Reg. at 7289. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 9 of 26 compliance risks. While it is difficult to identify the universe of 340B compliance risks that could flow from a bifurcated rebate model approach, such risks include, for example: (i) a single health system may own facilities designated as different covered entity types, which provides the opportunity for the covered entity to circumvent rebate model application, and (ii) pharmacies may dispense 340B drugs for both participating and non-participating covered entities, creating even greater inventory management complexity that increases the risk of 340B statutory violations. Furthermore, excluding certain covered entity types from a pilot would leave manufacturers with no reliable access to 340B claims data to deduplicate 340B/MFP and 340B/Medicaid discounts for these entity types. This would require implementation of one or more alternatives to allow manufacturers to access 340B claims information; however, those alternatives would be less effective than a rebate model (see Section III.c.iii. below), and simultaneous use of these alternatives alongside a rebate model would create considerable complexity and burden for all stakeholders. In August 2024, J&J sought to implement a limited scope rebate model that included only DSH covered entities, partly in anticipation of the need to deduplicate 340B and MFP discounts for all covered entities beginning January 1, 2026. Following hospital litigation challenging and ultimately thwarting the Pilot, there is no longer time to implement a rebate model in such a stepwise fashion. Since 340B and MFP discounts must be deduplicated across all covered entities, a rebate model pilot should apply to all covered entities. Finally, the 340B statute does not expressly define rural, which has allowed large urban hospitals to qualify as rural hospitals (e.g., Cleveland Clinic, Northwestern Memorial Hospital).32 Uniform application of the rebate model pilot across covered entity types will enable HRSA to comprehensively assess the benefits and burdens of a rebate model, and thus will result in better-informed findings at the end of the pilot. b. Manufacturers Should Be Permitted to Deny Ineligible Rebate Claims Under Specified Circumstances (RFI Question 3). In Question 3, HRSA asks stakeholders to consider whether a rebate model should contain specific guardrails that govern rebate denials and, if applicable, to describe what should be required to deny a rebate claim.33 Manufacturers should be permitted to deny ineligible rebate claims for specified reasons. In that circumstance, manufacturers should provide supporting documentation that includes the rationale for the denial. Potential reasons for denials could include: Ineligible National Drug Code (NDC): The NDC is not part of the rebate model pilot program or the NDC expired more than a year before the date of dispense. Ineligible date of dispense: Claims with a date of dispense prior to the beginning of the rebate model pilot should not be eligible for a rebate, with the exception of a limited number of unreplenished 340B dispenses or administrations occurring prior to the pilot initiation. Invalid user: A user attempts to submit rebate data for a covered entity for which it is not an authorized representative. Invalid data types: Data submitted for a given field do not match the data format expected for that field (e.g., an NDC is present within a date field). 32 HRSA, Office of Pharmacy Affairs, 340B OPAIS, Search Covered Entities, https://340bopais.hrsa.gov/SearchCe (last visited Apr. 9, 2026). 33 91 Fed. Reg. at 7290. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 10 of 26 Invalid data values: Prescriber or pharmacy National Provider Identifier (NPI) does not align with accepted structure for an NPI; the prescriber NPI is not an active, individual healthcare provider; or the pharmacy NPI is not an active, organizational healthcare provider. Additionally, for NDCs that are only eligible for dispense through a limited distribution network (LDN), a rebate may be denied if it reflects dispense by a pharmacy NPI that is outside of the LDN. Missing data: One or more HRSA-required fields is not populated. No Active HRSA Registration: Location of dispense or administration is not actively registered with HRSA and active as of the date of dispense. Duplicative rebate: The same claim cannot be submitted more than once for a 340B rebate, either by the same covered entity or multiple covered entities. Late submission: A claim generally cannot be submitted for a 340B rebate after a certain period of time has passed since the date of dispense or administration. The 2025 Pilot utilized 45 days, and J&J provided for case-by-case exceptions due to covered entity operational extenuating circumstances. No WAC purchase: HRSA should require that covered entities only request 340B rebates for units they purchased at the WAC price. A rebate may be denied if there is no evidence of a WAC purchase. Pricing not available (orphan drug): Offering the 340B price to certain covered entity types on orphan drugs is voluntary for manufacturers. A rebate may be denied in instances where the manufacturer does not offer this voluntary pricing. Pricing not available (contract pharmacy): Only certain contract pharmacies may be eligible for a 340B rebate according to the manufacturers contract pharmacy policy. Aberrant quantity: Claims with dispensed or administered units that exceed a certain threshold for reasonable volume may be denied. This check is designed to catch instances where a user inadvertently keys in an incorrect unit value or uses an incorrect unit conversion rate. If not denied, these instances could result in a rebate payment that is excessive for the volume of drug actually dispensed or administered. To deny a rebate claim, manufacturers should establish fully transparent validation guidelines so that covered entities can validate their own claims prior to submission, thereby curtailing the need for denials. Compliance with HRSAs design specifications for manufacturer validations should limit the need for HRSA involvement in denied claims. The Beacon platform, operated by Second Sight Solutions, LLC (Second Sight Solutions), would provide robust support services to help covered entity users understand denial codes and to correct any incomplete or inaccurate data. When a denial does occur, the rebate model platform would communicate the specific reason for the denial and would allow covered entities to resubmit corrected claims, which J&J would not treat as duplicate submissions. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 11 of 26 c. The Rebate Model Should Require Pharmacy Claims, Medical Claims, and Purchase Data Elements (RFI Question 5). Question 5 asks manufacturers to identify required data elements to detect potential duplicate discounts across the 340B Program and CMS payment programs.34 To operate an effective rebate model, J&J believes three categories of data are necessary: pharmacy claims data, medical claims data, and purchase data. J&J agreed with HRSAs decision to include both pharmacy and medical claims data in the Pilot and urges HRSA to include that data in a future pilot program and add purchase data. i. Pharmacy and Medical Claims Data Are Critical to a Rebate Model. Although MFP effectuation is currently limited to pharmacy claims for IPAY 2026 and 2027 selected drugs, certain selected drugs still may be administered in the medical benefit portion of a patients insurance. For example, approximately 10% of STELARA purchases are provider-administered. Similarly, XARELTO may be administered in an outpatient setting (e.g., emergency department, in connection with outpatient surgery). J&J thus requires medical claims data for the associated reimbursement for these products when dispensed in these settings. For this reason, J&J urges HRSA to include medical claims data elements, in addition to pharmacy claims data elements, in a future rebate model pilot. The table in Appendix 1 contains commercially standard information regarding drug administration that covered entities routinely collect and report to payors for reimbursement of medical claims, along with the corollaries between those data elements and pharmacy claims data elements.35 These data are also retained in covered entities auditable 340B records and are subject to production and review in HRSA- and manufacturer-conducted 340B audits, and thus should be readily available to submit to a rebate platform. J&J encourages HRSA to include these data elements in the rebate model. ii. Purchase Data Would Contribute to Increased 340B Program Integrity. Accurate 340B rebate processing also requires access to certain purchase data elements to confirm that rebate requests correspond to units the covered entity actually purchased at WAC, and then to calculate the appropriate rebate amount. Purchase data could be validated, in part, by cross-referencing it with 867 product shipment transaction data exchanged between manufacturers and wholesalers. To reduce burden and protect covered entity confidentiality, J&J proposes to collect only data needed to identify relevant shipment transactions and to determine rebate amounts. Although J&J routinely receives 867 data from wholesalers describing shipments to purchasers,36 that data alone is often insufficient to assess rebate eligibility.37 For example, 867 data does not indicate whether units purchased at WAC are intended for 340B use and does not always identify the ship-to or bill-to customer. In addition, although J&J contracts for certain identifying information (e.g., name, DEA, HIN, or 340B ID, and address) for ship-to and bill-to entities, some retail 34 91 Fed. Reg. at 7290. 35 In the ICR, HRSA states, OPA expects that data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program. Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant. 91 Fed. Reg. at 9633. 36 Because units eligible under the rebate model are sold by J&J at WAC, wholesalers do not transmit chargeback data to J&J identifying a 340B covered entity as the purchaser of a given medication. 37 Relevant data may be delayed or unavailable to J&J. In those circumstances, J&J must rely on purchase data submitted by covered entities to process rebates within the required timeframe. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 12 of 26 pharmacy chains restrict wholesalers from sharing these data or 867 data altogether. As a result, 867 data alone will not allow J&J to determine which covered entity purchased particular units for 340B use or to align shipment and claims data without additional confirmation. Purchase data fills these gaps. First, it will confirm that the covered entity itself purchased the units for which rebates are claimed. This verification is particularly important in complex arrangements involving multiple entities, such as contract pharmacies. Second, purchase data will enable J&J to confirm that the drug was acquired at WAC.38 Third, purchase data helps ensure that rebate claims correspond with units acquired at a commercial price rather than at the 340B price. Without this visibility, rebates could be requested for units purchased at the 340B price before the rebate models effective date, particularly at the outset. Appendix 2 includes the purchase data elements that J&J believes reflect standard, commercially available purchase information that covered entities can readily obtain from wholesalers as part of accounts payable and invoice management processes, including through electronic invoice access and bulk download tools.39 As with claims data, it is appropriate to request the limited standard information necessary to confirm that rebates correspond to actual WAC purchases,40 supporting efficient and reliable administration of the rebate model. iii. A Rebate Model Is the Most Effective and Viable Approach for Providing Needed Real-Time Data and Preventing Noncompliance with the 340B Program. In Question 5(e), HRSA references the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for data elements...necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs.41 As described below, alternative approaches to a rebate model would pose operational challenges, would meet with significant covered entity opposition, and/or would result in delayed access to meaningful claims data (and a continued lack of real-time transparency). By contrast, the rebate model provides a structured and reliable framework for obtaining validated claims data in shorter timeframes. Manufacturer Claims Collection. Some manufacturers have tried to offset the deficit created by the delay in implementation of a rebate model pilot by adopting policies that require covered entities to submit limited, commercially standard 340B claims data for all transactions (whether contract pharmacy or in-house pharmacy) as a condition of manufacturers 340B pricing offers permitted under federal law. Although this approach may increase the volume of claims data available to manufacturers, it is likely less effective than a rebate model. Covered entity stakeholders have objected to providing claims data, and even where claims data is provided, known and ongoing challenges with the accuracy, completeness, and timeliness of the data could render that data less effective as compared to timely and validated claims data afforded by a rebate model. Finally, as with a clearinghouse addressed below, this approach relies on covered entities submitting 340B claims information on a lagged basis without a direct connection to the 340B discount extended on the units associated with each claim. Without the ability to link a request for 340B pricing to validated claims data in real time under a rebate model, manufacturers must identify and 38 J&J would not request information regarding any additional discounts covered entities may negotiate with wholesalers, which we understand to be confidential. 39 See, e.g., McKesson, Pharmacy Accounts Payable Management System, https://www.mckesson.com/pharmacy- technology/pharmaceutical-ordering/pharmacy-accounts-payable/ (last visited Apr. 9, 2026). 40 See, e.g., Novartis Pharm. Corp. v. Johnson, 102 F.4th 452, 463 (D.C. Cir. May 21, 2024); 59 Fed. Reg. 25,109, 25,112 (May 13, 1994). 41 91 Fed. Reg. at 7290. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 13 of 26 address noncompliance retrospectively on a covered entity-by-covered entity basis subject to the inefficiencies and pitfalls described in Sections I and II of this letter. Neutral Clearinghouse. Under a clearinghouse model, a centralized third-party repository would receive covered entity-reported 340B transaction data (and potentially attempt to reconcile that information against CMS data sources). However, this model is fundamentally dependent on covered entities or their TPAs self-identifying 340B claimsperhaps using a modifierafter the drug is dispensed or administered and without any independent mechanism to incentivize timeliness, accuracy, or completeness. As with the current system, therefore, unless HHS were to undertake robust oversight and enforcement to ensure covered entity compliance with clearinghouse reporting requirements, manufacturers would continue to lack the ability to validate reported claims or assess whether duplicate discounts have occurred. Critically, a neutral clearinghouse cannot work properly unless it can substantiate the self-reported claims volume using 340B purchase data. CMSs ongoing efforts to establish a clearinghouse for Part D inflation rebates, which will be optional and is not expected to commence operations until fall 2026 at the earliest underscores the challenges with a narrow-scope clearinghouse option.42 Past experience with the MDPNP also reaffirms that voluntary self-identification of 340B claims does not yield sufficient participation or reliability. As of April 2026, pharmacies have classified fewer than 0.5 percent of MFP claims as 340B through either CMS or Beacon MFP platform mechanisms, which is markedly less than Medicare Part D PDE data suggests should be occurring (potentially 10% to 12% of MFP claims).43 d. J&J Supports Manufacturer-Required Reporting to Demonstrate Rebate Model Operation (RFI Question 6 & ICR). In Question 6 of the RFI, HRSA requests stakeholder feedback on how the rebate model should be monitored for compliance, including the specific data elements manufacturers should report, the frequency of such reporting, and the scope and cadence of HRSA reporting, including public disclosures.44 In the ICR, HRSA proposes that manufacturers will be required to submit data to the 340B Prime Vendor monthly to evaluate program integrity and to provide greater transparency in the 340B program.45 We note that the 340B Prime Vendor, Apexus, currently is the subject of a congressional investigation regarding its business practices related to the 340B Program, including potential conflicts of interest and alleged misaligned financial incentives.46 Apexus also is a wholly-owned subsidiary of Vizient, which is the largest group purchasing organization in the United States and is owned by hospitals.47 Vizients clients include many covered entities. As a result, Apexus may not be an appropriate entity to manage the collection and evaluation of sensitive data related to a rebate model, and it may be more appropriate for manufacturers to report data elements directly to HRSA. J&J agrees with comments 42 90 Fed. Reg. 49266, 49741, 49754 (Nov. 5, 2025). 43 BRG, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, at 2 (Apr. 2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and- Outlook-to-2027.pdf (To date, fewer than 0.5 percent of MFP claims have been self-identified as 340B by the pharmacy . . . . By comparison, analysis of Medicare Part D Prescription Drug Event (PDE) data suggests that between 10 and 12 percent of claims for 2026 selected drugs are subject to 340B pricing. In other words, fewer than 5 percent of 340B claims are self-identified as such by pharmacies.). 44 91 Fed. Reg. at 7290. 45 91 Fed. Reg. at 963233. 46 Senate Health, Education, Labor & Pensions Committee, Chair Cassidy Continues Investigation into 340B Drug Program, Seeks Information from 340B Prime Vendor (Feb. 2, 2026), https://www.help.senate.gov/rep/newsroom/press/chair-cassidy- continues-investigation-into-340b-drug-program-seeks-information-from-340b-prime-vendor-1. 47 Gabler, E. How a Company Makes Millions Off a Hospital Program Meant to Help the Poor, New York Times (Jan. 15, 2025), available at: https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 14 of 26 submitted by PhRMA and BIO that HRSA and other government agencies (e.g., HHS-OIG and certain functions within CMS) should evaluate the pilot. Regardless, J&J agrees that manufacturers should report data elements aligned with the pilot for the duration of the rebate model. J&J proposes that these data elements should include: Claim Submission Date 340B ID NDC-11 Purchased Quantity Unit WAC Price Unit 340B Ceiling Price Unit MFP Price Rebate Amount Rebate Date Paid Rejection Reason (if applicable) In addition, manufacturers should be required to provide aggregated data regarding the operation of the rebate model, including: Aggregated sales by covered entity type as defined in 42 U.S.C. 256b(a)(4) Average days from claim submission to rebate payment for all rebates paid Number of rebates paid after 10 calendar days Number of rebates denied with denial reasons Number of selected drug claims with MFP refunds that are duplicative of 340B pricing provided through the rebate model pilot program Further, HRSA could consider publishing the manufacturer-reported aggregated data. If it does so, HRSA should aggregate data across manufacturers so that it does not inadvertently report proprietary and sensitive data of an individual manufacturer. e. A Rebate Model Would Materially Improve Compliance Associated with the 340B Program (RFI Question 7). Question 7 asks commenters whether a rebate model pilot would affect 340B Program integrity, reduce duplicate discounts and diversion, and increase pricing transparency. It also seeks recommendations on how to improve data collection and reporting and asks stakeholders to describe other potential benefits, as well as to weigh these benefits against potential costs. A rebate model will significantly enhance program transparency, which will help prevent duplicate discounts and other forms of noncompliance. Stakeholders need transparency into the 340B Program, which is the second largest federal drug pricing program. Compared to other federal drug pricing programs of a similar scale (e.g., Medicaid, Medicare), there is a lack of publicly available data necessary to evaluate program integrity and effectiveness. For example, CMS and state Medicaid agencies have access to complete Medicare and Medicaid claims data, enabling robust oversight and analysis. No comparable claims-level data exists for the 340B Programnot for the entities funding the discounts (manufacturers) nor for the agency charged with overseeing the program (HRSA). Participation in the 340B Program is a bargained-for exchange pursuant to the Spending Clause of the United States Constitution. Manufacturers like J&J agree to charge no more than the 340B price to eligible purchasers, subject to the limitations set out in the duplicate discount prohibition, the diversion prohibition, and the theoretical protection afforded by the right to audit, in exchange for coverage and Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 15 of 26 payment for their drugs under Medicaid and Medicare Part B.48 Notably, the 340B program was intended to restore access to voluntary discounts that certain drug manufacturers had offered certain safety net providers prior to enactment of the Medicaid Drug Rebate Program in 1990.49 As noted above, therefore, the purpose and structure of the 340B program were narrow, and the diversion and duplicate discounting provisions are essential parts of the Spending Clause bargain, designed by Congress to moor the program to its intended scope. More transparency through a rebate model is consistent with this intent and will help to restore the 340B program to its original purpose, by enabling better and real-time enforcement of the duplicate discount and diversion prohibitions. Transparency also will enable HRSA to better monitor and enforce program integrity requirements. Duplicate Discounts. The rebate model will provide more complete and timely information, enabling HRSA to gain a comprehensive view of the 340B Program and how it operates across various covered entity categories. Claim-level data fields create an auditable trail that would allow J&J to assess whether a discount has already been provided on the same drug unit (e.g., MFP, Medicaid). By creating a mechanism for manufacturers to receive 340B claims data before providing the 340B price, the rebate model provides real-time insight into specific claims that resulted in payment of a 340B discount and thus facilitates timely, accurate, and efficient deduplication of MFP and Medicaid rebates. In contrast to the current replenishment model, this approach promotes greater and more timely transparency. In addition, by providing real-time access to claims data that can avoid duplicate discounts, disputes between manufacturers and covered entities would be reduced. Ultimately, this conserves stakeholder resources, including those of the government. Diversion. The rebate model also reduces opportunities for diversion, in that it would allow manufacturers to use real-time information to verify that the 340B price is provided only on eligible claims. Unlike a replenishment modelunder which covered entities rely on a neutral inventory that commingles 340B and non340B drugsa rebate model ensures that the same drug for which a covered entity requests a 340B rebate is the drug actually dispensed or administered to the patient. Therefore, it materially reduces the risk of diversion by directly linking the 340B rebate to a specific dispensed or administered drug. By standardizing claim-level validation across covered entity types, a rebate model strengthens diversion controls and reduces risks arising from differing inventory tracking practices. Additionally, by requiring submission of standardized data for each drug dispense or administration, manufacturers can identify instances where a rebate is requested by more than one covered entity and ensure only one rebate is paid, consistent with the diversion prohibition and HRSA guidance. Further, the rebate model would provide data that validates that the pharmacy that dispensed the unit is eligible for the program (i.e., listed as active in Office of Pharmacy Affairs Information System (OPAIS)), reducing the risk of diversion. Access to real-time claims and purchase data would permit J&J to identify any instances in which the dispense or administration occurred in advance of the purchase date. The rebate model provides an alternative to ADR to address certain types of diversionwhile conserving government resources. Manufacturer Audits. A rebate model would reduce the need for inefficient and expensive audits by providing manufacturers with claims data in real-time. By verifying claims before providing the 340B price, the rebate model would mitigate the opacity resulting from prevalent use of replenishment models and also reduce the need for manufacturer audits overall. J&J would be able to identify program integrity concerns earlier and more precisely, creating more thorough and detailed reasonable cause and audit work 48 See Pharm. Rsch. & Mfrs. of Am. v. McCuskey et al., No. 25-1054, --- F.4th ----, 2026 WL 898259 (4th Cir. Mar. 31, 2026) (finding West Virginias contract pharmacy law likely preempted by the 340B statute). 49 H.R. Rep. 102-384, pt. II, at 1012 (1992). Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 16 of 26 plans. Accordingly, HRSAs review also would be more thorough and efficient, utilizing less agency time and allowing HRSA to better direct its own covered entity audits. IRA MFP Compliance. A rebate model is the most effective known means for identifying 340B- eligible Medicare MFP claims in real-time, which in turn allows a manufacturer to meet the IRAs nonduplication requirement within CMSs 14-day prompt MFP payment window. IV. The 340B Rebate Model Would Not Impose Undue Burdens on Covered Entities. Despite assertions to the contrary, transitioning to a rebate model would not introduce significant new financial or operational burdens for covered entities. Rather, manufacturers would bear the costs associated with administering a rebate model platform and providing implementation resources in the form of live and recorded education sessions, data reporting templates, and TPA integrations. In addition, a rebate model would provide a shortened timeline for delivery of 340B pricing and would rely on commercially standard data collection supported by robust privacy and security protections. Below, we discuss RFI questions related to covered entity impact: Question 1, Costs to Covered Entities; Question 2, Payment Timing and Potential Cash Flow Impacts for Covered Entities; and Question 4, Data Collection by Covered Entities. a. Covered Entities Currently Pay Costs to Support Existing 340B Program Operations and a 340B Rebate Model Would Not Create Significant New Financial Burdens (RFI Question 1(a)). Question 1(a) seeks information on 340B-related costs paid by covered entities under the existing 340B Program. Covered entities have utilized TPAs and other vendors to handle the administrative requirements of the 340B Program for many years, including to determine ways to extract more value from the 340B Program.50 For a fee, TPAs offer services to covered entities including compliance, auditing, inventory management and split-billing, program optimization and revenue capture, and patient access.51 TPAs also have begun to offer services that would assist covered entities in implementing rebate model processes.52 Notably, many of the TPA rebate model-specific functions do not vary significantly from the support they presently offer. A 2025 congressional report provided insight on certain TPA fees. The report found that fees charged by Wellpartner, LLC, a CVS Health subsidiary, had more than doubled over four years, rising from $147 million in 2019 to $382 million in 2023 for services . . . includ[ing], but not limited to 340B eligibility determination, technology support and compliance.53 The report also found that Sun River Health, a Federally Qualified Health Center covered entity, spent 5.9 percent of its total 340B revenue of 2019, 9.3 percent in 2020, nine percent in 2021, and 8.7 percent in 2022 on TPA services.54 Separately, the Minnesota Department of Health released a 340B Covered Entity Report in February 2026,55 which found that, in 2024, covered entities in the state reported having 340B operational 50 Sayeh Nikpay et al., Health Affairs Scholar, Growing Administrative Complexity in the 340B Program and the Rise of Third- Party Administrators (Nov. 2023), https://academic.oup.com/healthaffairsscholar/article/1/5/qxad052/7320443?login=false. 51 Id. 52 See, e.g., Verity Solutions, Your 340B Rebate Model Pilot and MFP Checklist: How to Prepare for Launch (Dec. 19, 2025), https://verity-solutions.com/your-340b-rebate-model-pilot-and-mfp-checklist/. 53 Senate Comm. on Health Educ. Lab. & Pensions, Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program (Apr. 2025), https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf.pdf. 54 Id. 55 Minn. Dept of Health, 340B Covered Entity Report (Feb. 27, 2026), https://www.health.state.mn.us/data/340b/docs/2025report.pdf. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 17 of 26 costs [of] approximately $165 million. About $137 million of this amount (83%) was paid to contract pharmacies and other external vendors representing nearly 10% of total statewide gross 340B revenue. This means that [f]or every $100 of gross 340B revenue generated, Covered Entities collectively paid approximately $10 to [these] external organizations.56 The remaining approximately $28 million (17%) of these operational costs were for covered entities internal costs for administering their 340B programs, including staffing and technology. These reports make clear that, under the current discount model, covered entities derive significant financial benefit from the 340B Program and are spending significant shares of their 340B revenues on vendors to grow those revenues further. These growth-driven arrangements often come at the expense of program integrity. The Minnesota report also highlights the comparatively small share of operational costs that covered entities devote to internal functions that would cover 340B Program compliance. Given the size, scope, and complexity of covered entities 340B programs and the program integrity challenges they present, any incremental covered entity costs associated with implementing a rebate model would be outweighed by the models transparency and compliance benefits. Further, as the D.C. Circuit recognized in Novartis Pharms. Corp. v. Johnson,57 it is reasonable that covered entities would be required to expend a small amount of resources to maintain compliance.58 Regarding the provision of medical claims data, to the extent a covered entity has not already implemented a 340B-specific reporting system for this data, we expect that a covered entity would be able to leverage technology they already use to electronically exchange this data with payors (including government programs), 340B TPAs/consultants, and certain manufacturers. As data elements needed for rebate processing overlap with those collected through 340B ESP and the data request list used in HRSA covered entity audits, covered entities should already have access to such data and, in most cases, have already reported data to manufacturers using 340B ESP, a platform that is similar to Beacons rebate model platform. Recently, J&J has observed that certain covered entities have begun submitting their medical claims data for J&Js provider-administered drugs to 340B ESP as a result of claims data policies recently instituted by other manufacturers. J&J has also received medical claims data as part of its good faith inquiry process for MFP/340B deduplication. Submission of medical claims data in response to new manufacturer policies demonstrates that covered entities possess the data required under a rebate model and can share it with a rebate model platform vendor with minimal effort and cost. It is worth emphasizing that any costs incurred in creating a new data reporting stream would be a one-time expensenot an ongoing burden for covered entities. b. Manufacturers Pay Costs Associated with the Operation of a Rebate Model and 340B Compliance GenerallyThey Should Not Be Expected to Reimburse Covered Entities Costs (RFI Question 1(b)). Question 1(b) suggests that HRSA is considering whether a rebate model could be structured so as to offset these administrative and operational costs and requests information as to how [that could] be achieved and how [] such an offset be accurately quantified.59 J&J incurs significant costs to maintain 340B compliancecosts that continue to increase as program complexity grows and which are in addition to the $7.4 billion in 340B discounts that J&J paid to 56 Id. 57 102 F.4th 452 (D.C. Cir. 2024). 58 BRG, 340B Program at a Glance: 2025, https://media.thinkbrg.com/wp-content/uploads/2025/02/19075246/340B-Program-at- a-Glance-2025_F.pdf (2025). 59 91 Fed. Reg. at 7289. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 18 of 26 covered entities in 2024.60 In 2025, for example, J&J paid millions of dollars in primary 340B compliance costs, such as: $14 million to external vendors and systems to manage data intake, validation, and policy enforcement (including MFP deduplication solutions); $5 million for complex data reconciliation across claims, chargebacks, rebates, and government pricing; and $5 million for audit and monitoring requirements, including internal controls and external reviews. In sum, J&Js estimated annual 340B compliance costs approximate upwards of $24 million, before taking into account internal and external 340B legal expenses. These expenses are non-discretionary, recurring, and scale with operational complexity. J&J would fund the operation of its rebate model and provide covered entities no-cost access to an electronic rebate platform and certain implementation resources described below. Any requirement that J&J would then need to offset covered entities 340B operational and compliance costs on top of this would impermissibly extend manufacturers obligations beyond the statutory requirement to offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price.61 Further, there is no precedent for requiring manufacturersor any other partyto offset covered entities 340B operational and compliance costs, and asking covered entities to catalog their costs, submit them to manufacturers, and then require manufacturers to validate and pay those costs would create further audit questions and logistical challenges. In anticipation of the Pilot, the Beacon platform, to which J&J would provide covered entities and their contractors no-cost access, offered trainings and assistance to help covered entities and vendors prepare for launch. Beacon conducted 21 live webinars in November and December 2025 in anticipation of a January 1, 2026 Pilot launch.62 To further help covered entities, Beacon offers a software development kit (SDK) which is a secure and direct data integration that allows automated 340B rebate data submissions and status updates, thereby alleviating covered entity costs and personnel efforts. According to Second Sight Solutions, there are currently over 50 organizations (10 of which are large health systems) set up on the Beacon SDK. Covered entities thus have the technological and administrative ability to support a rebate model, and many have already undertaken significant preparation to begin operating under one. c. A Rebate Model Provides for a Shortened Payment Timeline for 340B Pricing (RFI Questions 1 and 2). In part, Question 1 seeks information regarding whether implementation of a rebate model requires meaningful changes to covered entities resources (e.g., staffing, systems), as well as whether such a model would have any impact on patient access to drugs.63 Question 2 seeks information related to the impact of a payment schedule under a rebate model (e.g., within ten calendar days of submission of a complete claim) and any effect that would have on covered entities.64 60 Johnson & Johnson Center for U.S. Healthcare Policy Research, Issue Brief: The 340B Program: Missing the Mark for Patients (2025), https://policyresearch.jnj.com/the-340b-program/. 61 42 U.S.C. 256b(a)(1). 62 Second Sight Solutions, LLC, Beacon Support Center, https://support.beaconchannelmanagement.com/en/articles/9519227- beacon-support-calendar (last visited Apr. 9, 2026). 63 91 Fed. Reg. at 7289. 64 91 Fed. Reg. at 728990. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 19 of 26 Covered entity payment terms under a rebate model are as good or better than existing payment terms in the 340B Program.65 In todays 340B Program, covered entities voluntarily participate in replenishment models that they created (at their own expense and without HRSA pre-approval), described above in Section II.b. The rebate model would operate at the unit level, as compared to a package level. Thus, covered entities will not need to wait until accumulation to a full package to receive the 340B price as they do under the replenishment model. IQVIA recently reported that any impact of a rebate model on covered entities cash flow should be small and unlikely to be a barrier to its use by covered entities.66 The study found that interest costs as a percent of WAC for a rebate model were consistent with, or less than, interest costs incurred under prevailing inventory models.67 Further, a 10-day payment timeframe benefits covered entities compared to that of the MFP payment period, which the MTF reports takes approximately 21 days (or more) from dispense to payment.68 The Beacon platform includes standard functionality that permits a covered entity to reconcile its 340B-eligible rebate claims to 340B rebate payments received. We agree that manufacturers should be held to making timely rebate payments, which should be done in a manner consistent with the statutory shall offer requirement. Importantly, J&Js rebate model efforts would not affect patient access to J&J drugs. Patients generally are identified as 340B-eligible only after a drug has been dispensed. The 340B discount rarely is passed on to the patient at the point of sale, and patients are typically not aware of their 340B eligibility. A covered entitys decision not to acquire a drug at the 340B ceiling price does not affect a patients ability to access the medication. The patients cost sharing obligationset by their insuranceis exactly the same as it would have been, irrespective of the patients choice of hospital or pharmacy provider. d. The Rebate Model Provides Commercially Standard Data Collection with Robust Privacy and Security Protections (RFI Question 4). Question 4 requests information regarding covered entity and rebate model data collection practices, as well as recommendations for establishing guardrails to address privacy and security concerns.69 Data Collection. The rebate model would collect standard pharmacy and medical claims data elements that covered entities maintain in the ordinary course of business and provide to other stakeholders. As described in Sections III.c.i. and IV.a. above, these fields substantially overlap with data elements that covered entities maintain in their auditable records and produce in the context of audits, collect and report to payors for reimbursement, and provide to manufacturers under various contract pharmacy, in-house pharmacy, and 340B/MFP deduplication processes. Data Privacy and Confidentiality. J&J treats privacy and security with the utmost seriousness. The Beacon platform has robust guardrails in place to manage any privacy or security concerns and applies 65 See SmartSourceRx, Credit and Payment Details, https://www.smartsourcerx.com/credit-and-payment-details (last visited Apr. 9, 2026). 66 Chuan Sun et al., IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1, 13 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper-2025.pdf. 67 Chuan Sun et al, IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1, 13 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper-2025.pdf. 68 BRG, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027, at 1 (Apr. 2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation-of-the-Maximum-Fair-Price-in-2026-and- Outlook-to-2027.pdf (citing data transmitted from the MTF to the Beacon MFP platform). 69 91 Fed. Reg. at 7290. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 20 of 26 its terms uniformly to ensure consistent program administration. Second Sight Solutions platforms are subject to an independent expert determination under the HIPAA de-identification standard at 45 C.F.R. 164.514(b)(1) and to third-party information security audits.70 We note that Second Sight Solutions works directly with 340B Covered Entities to address conflicts with applicable law.71 To date, more than 10,000 340B Covered Entities have registered on the Beacon platform and accepted its terms and privacy policy.72 * * * J&J appreciates HRSAs attention to the issues raised in this letter and welcomes further discussion to support a rebate model. Please do not hesitate to contact us with any questions or if additional information would be helpful. Sincerely, Lauren Paluzzi Senior Director, 340B & Emerging Government Program Strategy & Operations 70 Beacon Channel Management, Beacon Trust Center, https://cm.beaconchannelmanagement.com/pages/trust-center; 340B ESP, Frequently Asked Questions, https://help.340besp.com/en/articles/8808065-frequently-asked-questions-faqs#h_b553637062. 71 Information provided by Second Sight Solutions. 72 Information provided by Second Sight Solutions. Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 21 of 26 Appendix 1 Pharmacy Claim and Medical Claim Data Elements Pharmacy Claim Data Element Medical Claim Data Elements Description Required / Optional HRSA DRL 340B ESP Included in 2025 Pilot73 Date of Service Date of Service Date the prescription was filled at the pharmacy or the drug was administered to the patient Required Date on which the drug was furnished, administered, or dispensed Date of Service Yes Date Prescribed N/A Date the healthcare provider wrote the prescription Required Date the drug order or prescription was written Date Prescribed Yes Rx Number Claim Number The native (unmodified) prescription number for the prescription as generated by the pharmacy (pharmacy claims), or the claim number as assigned by the healthcare provider (medical claims) Required Patient ID number Rx Number Yes Fill Number N/A The code indicating whether the prescription is an original or a refill. For example, a value of 0 indicates that the prescription is the original dispense, whereas the value of 1 indicates the prescription has been refilled once. Required N/A Fill Number Yes 11-Digit National Drug Code (NDC) 11-Digit National Drug Code (NDC) NDC-11 of the product that was purchased by the Covered Entity Required NDC NDC Yes Quantity Dispensed Quantity Number of units dispensed to the patient (pharmacy claims), or total Required Quantity Issued Quantity Yes 73 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/https://www.hrsa.gov/opa/340b- model-pilot-program (available on Dec. 17, 2025). Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 22 of 26 Pharmacy Claim Data Element Medical Claim Data Elements Description Required / Optional HRSA DRL 340B ESP Included in 2025 Pilot73 quantity being submitted on medical claim (units billed) (medical claims) Prescriber ID Rendering Physician ID NPI of the prescriber who wrote the prescription (pharmacy claims) or who administered the medication to the patient (medical claims) Required Ordering provider Prescriber ID Yes Service Provider ID Service Provider ID NPI of the pharmacy that filled the prescription (pharmacy claims) or a pharmacy or facility where the patient received the medication administration (medical claims) Required Location Service Provider ID Yes 340B ID 340B ID The HRSA assigned parent 340B ID of the entity that designated the prescription as 340B (pharmacy claims) or purchased the drug (medical claims) Required Type of account through which the drug was purchased, purchase account, and the associated 340B ID Contracted Entity ID Yes Rx Bank Identification Number (BIN) / Rx Processor Control Number (PCN) Health Plan ID / Health Plan Name Bank identification number of the primary payer on the claim and processor control number assigned by the entity processing payment (pharmacy claims); name and identifier code of patients primary health insurance plan (medical claims) Required / Required N/A Payer BIN / Payer PCN Yes N/A Claim line number The line number of the claim Required N/A Claim Line Number Yes Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 23 of 26 Pharmacy Claim Data Element Medical Claim Data Elements Description Required / Optional HRSA DRL 340B ESP Included in 2025 Pilot73 N/A Unit of measure The unit of measure for the quantity submitted on medical claim. Either HCPCS code or UOM is required. If HCPCS code is not included, UOM is required, and it should be consistent with NCPDP units. Required N/A Unit of Measure Yes N/A HCPCS Code The five character HCPCS code for separately payable medications Optional N/A HCPCS Code Yes N/A HCPCS Modifiers (up to 4) Modifier code associated with a separately payable medication with its own five character HCPCS code Optional N/A HCPCS Code Modifier Yes Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 24 of 26 Appendix 2 Purchase Data Elements Purchase Data Element Description Required / Optional HRSA DRL Wholesaler Name Name of the wholesaler that processed the invoice and shipped the purchased drug. Where 867 transaction data is blocked entirely for a transaction, this data element allows J&J to identify the relevant wholesaler and work directly with that entity, when necessary, to identify the relevant transaction and validate the rebate claim, which may reduce follow up inquiries with the covered entity. Required Wholesaler name Wholesaler Account Number Wholesaler assigned account number used to place the order. This data element allows J&J effectively to resolve any discrepancies between information submitted by the covered entity and data received from the wholesaler. Purchase Account Number enables J&J to work directly with the wholesaler to identify the relevant transaction and validate the rebate claim. While not strictly required, this data point is strongly recommended to reduce the likelihood of follow up inquiries and streamline the rebate validation process for covered entities. This data element is not provided in 867 transaction data. Optional Account number Invoice Date Wholesaler-assigned invoice number for the purchase order. The platform uses Invoice Date to identify the relevant transaction to support verification that the purchase qualifies for a 340B rebate. Because invoice numbers are not necessarily unique across different wholesalers or transactions, the platform requires a combination of Invoice Number, Invoice Date, and NDC-11 to accurately match the covered entitys purchase data to J&Js corresponding 867 data describing the shipment transaction. This multi-field approach ensures reliable identification of WAC purchases while compensating for gaps in standard transaction data. In addition, the platform relies on the Invoice Date paired with the reported NDC-11 to determine the applicable WAC for the unit at the time of purchase, ensuring that the rebate amount is calculated based on the correct pricing in effect on the transaction date. Required Invoice date Invoice Number Wholesaler-assigned invoice number for the purchase order. The platform uses Invoice Number to identify the relevant transaction to support verification that the Required Invoice number Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 25 of 26 purchase qualifies for a 340B rebate. Because invoice numbers are not necessarily unique across different wholesalers or transactions, the platform requires a combination of Invoice Number, Invoice Date, and NDC-11 to accurately match the covered entitys purchase data to J&Js corresponding 867 data describing the shipment transaction. This multi-field approach ensures reliable identification of WAC purchases while compensating for gaps in standard transaction data. Ship-To Pharmacy NPI The NPI of the pharmacy that received the physical shipment of the drug from the wholesaler. This data element is used to validate that the pharmacy receiving the shipment is appropriately associated with the covered entity registered as active in OPAIS, ensuring that rebate claims are paid on 340Beligible transactions. Because shipment data is frequently blocked in 867 transaction data or may not precisely match the relevant ship to location, the data source cannot be reliably used on its own for validationmaking direct collection of the ShipTo Pharmacy NPI essential for rebate processing. Required Ordering location 11-Digit NDC Identifier of the drug purchased by the covered entity. The platform uses NDC-11 to identify the relevant transaction to support verification that the purchase qualifies for a 340B rebate. Because invoice numbers are not necessarily unique across different wholesalers or transactions, the platform requires a combination of Invoice Number, Invoice Date, and NDC-11 to accurately match the covered entitys purchase data to J&Js corresponding 867 data describing the shipment transaction. This multi-field approach ensures reliable identification of WAC purchases while compensating for gaps in standard transaction data. In addition, the platform relies on the NDC-11 paired with the reported Invoice Date to determine the applicable WAC for the unit at the time of purchase, ensuring that the rebate amount is calculated based on the correct pricing in effect on the transaction date. Required Drug NDC Package Units Number of packages of the product ordered. This data element is used to validate that the quantity of units for which 340B rebates are claimed matches (or does not exceed) the quantity of validated units purchased by the covered entity, thereby helping to ensure that 340B rebates are issued only for drugs purchased by the covered entity. Additionally, Package Units is used to calculate the total rebate amount owed, based on the number of validated units. Required Quantity ordered Johnson & Johnson Health Care Systems Inc. 1000 US Highway 202 South Raritan NJ 08869 United States 26 of 26 340B ID HRSAassigned identifier of the 340B covered entity that purchased the drug. This data element is used to validate that the purchasing entity is a 340B covered entity registered as active in the HRSA OPAIS database, ensuring that rebate claims are tied to eligible 340B covered entities. It also enables the platform to link purchase records with rebate claims submitted by the covered entity. This field does not exist in J&Js corresponding 867 data, making direct collection of the 340B ID essential for rebate processing. Required
HRSA-2026-0001-2227UVA Health2026-04-20T04:00Z29,001 chars
On behalf of UVA Health and its three 340B covered entitiesUniversity Medical Center, Prince William Medical Center, and Culpeper Medical Center (UVA Health), please find the attached comment letter on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer, explained in detailed in the attached letter, is no. !" $%&%'()*" !%+(, -. /&0"*, 12+3&3,4'(4%' $"(*4! 5",%6'7", (&2 8"'937", 12+3&3,4'(43%& :.8. ;"<('4+"&4 %= $"(*4! (&2 $6+(& 8"'937", >?@@ A3,!"', B(&" 5%7C93**"D E; F@G>F ;"(' 12+3&3,4'(4%' /&0"*,H I& )"!(*= %= :J1 $"(*4! (&2 34, 4!'"" KL@M 7%9"'"2 "&4343",N:&39"',34O E"237(* P"&4"'D Q'3&7" R3**3(+ E"237(* P"&4"'D (&2 P6*<"<"' E"237(* P"&4"' ST:J1 $"(*4!UVD W" ('" 0'(4"=6* =%' 4!" %<<%'46&34O 4% 7%++"&4 %& 4!" ;"<('4+"&4 %= $"(*4! 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HRSA-2026-0001-2228(no commenter metadata)2026-04-20T04:00Z24,481 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Some of the potential drivers for increase costs would be increased staffing to implement and monitor the rebate model program activities, IT resource time for assisting with claims data transfers, auditing reconciliation processes for claims and purchases, and resource time for challenging any denials. TPA vendor support is a critical component and some have additional costs associated which had been quoted for the rebate pilot. Staffing Impacts Under a Potential 340B Rebate Program. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System does not currently have the staff needed to comply with a Rebate Program. Our facility would need to hire an additional full-time resource to assist with the oversight of a proposed rebate model which includes claims submissions via data feeds, financial and claims reconciliation within the rebate platform, monitoring for denials, and working with TPA vendors and rebate platform vendor for any possible issues that arise. This could also require additional resource time from current pharmacy, finance, and information technology employees. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Implementation of a rebate program will require the ongoing over sight and maintenance of dual processes for both the legacy program and the pilot. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Data is currently being sent to the 340B ESP site for contract pharmacy claims and some manufacturers are starting to require this for medical mixed use claims also. Data collection for a rebate model would be in addition to these feeds and require more oversight on the covered entity. Some third party vendors have stated they can assist with verification of data in the rebate model platform for a fee but some of the work will still be done by the covered entity staff. The compliance burden falls solely on the covered entity. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Upfront increase of purchase costs estimates while awaiting rebate payment from manufacturer Inpatient mixed use setting= $127,000 Contract pharmacy setting= $2,300,000 Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our system uses 340b dollars to help stretch vital resources that provide care to our community, without the community member having to travel vast distances. Impact of the rebate model on the current finances and cash flow of the health system would cause us to have to reevaluate the feasibility of continuing with a Level III NICU, our outpatient oncology infusions as well as other critical to the community service lines. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our entire financial picture is set up on the traditional upfront 340b discount and the implications to our current fiscal year have yet to be determined, if indeed the rebate model goes live. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Cindy R. Duet, RPH, MHA, FACEH Vice President of Clinical Ancillary Services Terrebonne General Health System 8166 Main Street, Houma LA 70360 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs 2 alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Some of the potential drivers for increase costs would be increased staffing to implement and monitor the rebate model program activities, IT resource time for assisting with claims data transfers, auditing reconciliation processes for claims and purchases, and resource time for challenging any denials. TPA vendor support is a critical component and some have additional costs associated which had been quoted for the rebate pilot. Staffing Impacts Under a Potential 340B Rebate Program. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System does not currently have the staff needed to comply with a Rebate Program. Our facility would need to hire an additional full-time resource to assist with the oversight of a proposed rebate model which includes claims submissions via data feeds, financial and claims reconciliation within the rebate platform, monitoring for denials, and working with TPA vendors and rebate platform vendor for any possible issues that arise. This could also require additional resource time from current pharmacy, finance, and information technology employees. 3 Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Implementation of a rebate program will require the ongoing over sight and maintenance of dual processes for both the legacy program and the pilot. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. o Data is currently being sent to the 340B ESP site for contract pharmacy claims and some manufacturers are starting to require this for medical mixed use claims also. Data collection for a rebate model would be in addition to these feeds and require more oversight on the covered entity. Some third party vendors have stated they can assist with verification of data in the rebate model platform for a fee but some of the work will still be done by the covered entity staff. The compliance burden falls solely on the covered entity. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Upfront increase of purchase costs estimates while awaiting rebate payment from manufacturer o Inpatient mixed use setting= $127,000 o Contract pharmacy setting= $2,300,000 4 Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our system uses 340b dollars to help stretch vital resources that provide care to our community, without the community member having to travel vast distances. Impact of the rebate model on the current finances and cash flow of the health system would cause us to have to reevaluate the feasibility of continuing with a Level III NICU, our outpatient oncology infusions as well as other critical to the community service lines. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our entire financial picture is set up on the traditional upfront 340b discount and the implications to our current fiscal year have yet to be determined, if indeed the rebate model goes live. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to de-duplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. 5 Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Hospital Service District No. 1, Parish of Terrebonne, State of Louisiana dba Terrebonne General Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Cindy R. Duet, RPH, MHA, FACEH Vice President of Clinical Ancillary Services Terrebonne General Health System 8166 Main Street, Houma LA 70360
HRSA-2026-0001-2229Texas Society of Health-System Pharmacy2026-04-20T04:00Z12,059 chars
The Texas Society of Health-System Pharmacy opposes the imposition of any rebate model in the 340B Drug Pricing Program. Texas Society of Health-System Pharmacy 402 W Palm Valley Blvd STE A PMB 175, Round Rock, TX 78664 (512) 906-0546 | www.tshp.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our 1200 member pharmacists and pharmacy technicians, the Texas Society of Health-System Pharmacy appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). Texas Society of Health-System Pharmacy 402 W Palm Valley Blvd STE A PMB 175, Round Rock, TX 78664 (512) 906-0546 | www.tshp.org with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Texas Society of Health-System Pharmacy 402 W Palm Valley Blvd STE A PMB 175, Round Rock, TX 78664 (512) 906-0546 | www.tshp.org Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast- tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. Texas Society of Health-System Pharmacy 402 W Palm Valley Blvd STE A PMB 175, Round Rock, TX 78664 (512) 906-0546 | www.tshp.org To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Aaron Reich, PharmD President Texas Society of Health-System Pharmacy Texas Society of Health-System Pharmacy 402 W Palm Valley Blvd STE A PMB 175, Round Rock, TX 78664 (512) 906-0546 | www.tshp.org
HRSA-2026-0001-2230(no commenter metadata)2026-04-20T04:00Z79,766 chars
See attached file(s) 1. Costs to Covered Entities A. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Total number of 340B transactions processed: 274,518 from June 1, 2025 through May 30, 2025 ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. 1) Staffing and Labor Costs: We have approximately 1.25 FTE dedicated to the 340B program. This would be about 60 hours per week. This includes 0.75 FTE as a pharmacy technician and 0.5 FTE of a pharmacist. 2) Information Technology (IT) Systems and Infrastructure: Cost are associated primarily around start up, anytime, HRSA or a Third-Party Vendor makes a data request change, or there is failure with the automation regarding the sending of extracts. The cost is dependent on the type of change. For example, an update to our TPA so we were compliant with sending data regarding the MFP rebate program, probably took around 10 hours. On going maintenance probably averages 2-3 hours monthly. In addition for file uploads that are not yet automated. . 3) Third-Party Vendors: Third party vendor costs are approximately $16,000 per month. 4) Compliance and Audit Activities: Audit activities are included with staffing and labor costs. Outside compliance is completed through our relationship with a 340B consultant group. The cost of this group is around $12,000 annually. 5) Contract Pharmacy Oversight: This is included in our staffing and labor costs. iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. 1) Staffing and Labor Costs: Covered entities incur significant labor costs to administer the 340B Program, including: a. Pharmacy staff responsible for the 340B program are involved with i. Inventory management, split-billing oversight, and replenishment accuracy ii. Internal audits and continuous monitoring to prevent diversion and duplicate discounts iii. Documentation, record retention, and policy updates in response to evolving guidance iv. Responding to manufacturer audits and HRSA oversight v. Contract Pharmacy Oversight b. Finance and revenue cycle personnel supporting charge capture c. Compliance staff tasked with policy monitoring and annual audits 2) Information Technology (IT) Systems and Infrastructure: Participation in 340B requires complex IT infrastructure, including: a. Interfaces between pharmacy dispensing systems, electronic health records, wholesaler platforms, and manufacturer data b. Ongoing system maintenance, upgrades, and cybersecurity safeguards 3) Third-Party Vendors: a. 340B program administration and split-billing services b. Contract pharmacy management and claims processing c. Compliance consulting and audit preparation, B. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. There will be significant incremental administration and operational costs to our organization as the result the proposed 340B rebate model. One-Time Startup Costs: These are costs incurred before or immediately following implementation of the pilot, required to stand up new systems and processes. 1) Extract Redesign and IT activities: a. Modify 340B eligibility logic in pharmacy claims systems b. Build interfaces between 340B system and rebate processing c. Update EHR/ERP to track flagged MDPNP drugs d. Testing and validation of new logic Estimated Hours: 80-120 hours Estimated Cost (at $80/hr):$4,800- $9,600 2) Policy Development & Workflow Redesign and Staff Training a. Develop written policies and SOPs for new rebate process b. Map current state vs. future state c. Revise pharmacy intake workflows d. Educate staff Estimated Hours: Compliance/legal: 10 hrs Pharmacy leadership: 10 hrs Operational staff subject-matter experts: 80 hrs Total One-Time Hours: 100 hours Estimated Cost (@ $80): $8,000 3) Contracting and Vendor Work a. Amend agreements with third-party administrators b. Engage rebate software vendors Contract review Estimated One-Time Hours: 10 hours Estimated Cost (at $80/hr): $800 Ongoing Annual Costs: These reflect incremental, year-over-year operational costs the health system would incur just to comply with the rebate pilot. 1) Rebate Submission Processing: Health systems currently do not file rebates for 340B- purchased drugs, so this is net new work. a. Identify MDPNP drugs subject to rebate b. Prepare and submit rebate support packets c. Respond to payer follow-up d. Track payments and resolve denials Estimated Annual Hours: 20 hours Estimated Annual Cost at $80/hr): $1600 2) Monthly Reconciliation & Audits a. 2 new FTE to help with reconciliation process i. Reconcile rebate submissions vs. receipts vs other rebate programs ii. QA audits of submission accuracy iii. Internal audit compliance function involvement Estimated Annual Hours: 4160 Cost (at $60/hr compliance rate): $249,600 3) IT Support & Maintenance a. Maintain logic that flags rebate drugs b. System updates due to plan changes c. Routine maintenance and troubleshooting Estimated Annual Hours:80 hrs Estimated Annual Cost (at $100/hr): $8,000 ii. Describe the methodology and assumptions used to develop these estimates. The methodology and assumptions underlying these estimates are based on our organizations experience with comparable initiatives, including the startup costs associated with the MFP rebate process, the preparatory efforts required for participation in the initial 340B rebate pilot, and the cumulative operational changes resulting from other historical modifications to the 340B Program in which SPH has been required to participate. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. These incremental costs cover a wide range of activities including: 1) Claims-Level Tracking and Processing: A rebate model would require covered entities to: a. Track 340B-eligible drugs at the individual claim or dispense level. b. Distinguish rebate-eligible claims from non-eligible claims across multiple payers and settings. c. Manage submission timelines and eligibility validation requirements imposed by manufacturers. 2) Data Submission and Validation: Covered entities would incur new costs to: a. Compile, format, and transmit detailed claims and encounter data to manufacturers or rebate administrators b. Perform pre-submission validation to reduce denials and disputes c. Respond to manufacturer data requests and clarification inquiries 3) Reconciliation and Cash Flow Management: Under a rebate model, covered entities would need to: a. Reconcile expected rebates against payments received from manufacturers b. Track delayed, partial, or denied rebates c. Manage cash flow uncertainty associated with reimbursement lag d. In addition, Sole Community Hospitals have the additional burden of paying WAC upfront, not GPO and then if not reimbursed appropriate, requesting a rebill from the wholesaler at GPO, since SCH are not subject to GPO exclusion. 4) Dispute Resolution and Appeals Management: Incremental costs would also arise from: a. Investigating and appealing denied or underpaid rebates b. Maintaining documentation to support rebate eligibility c. Engaging legal, compliance, or third-party resources to resolve manufacturer disputes 5) Audit and Compliance Support: A rebate-based system would expand compliance requirements, including: a. Supporting both HRSA oversight and manufacturer rebate audits b. Retaining expanded datasets and documentation for longer periods c. Updating policies, procedures, and staff training to reflect rebate-specific requirements iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? The strongest recommendation for offsetting these costs would be to restore the contract pharmacy portion of the 340B program. The manufacturers should be required to remove any bill to ship restrictions they currently have in place, in exchange for claims level data for ONLY contract pharmacy claims. v. Comment on the impact of these incremental costs under your current operations. The impact of these costs is significant and burdensome. Over the past five to six years, 340B savings have been substantially reduced due to manufacturer actions that restrict contract pharmacy arrangements and impose increasingly complex and confusing administrative requirements, all of which drive higher costs for covered entities. Implementing an additional complex model, such as a 340B Rebate Program, would further increase administrative and operational expenses, with these costs ultimately borne by covered entities. C. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). A rebate-based model would introduce new administrative functions that are not required under the current upfront discount structure, necessitating dedicated staffing. Based on our current program operations we anticipate the need for an additional FTE. The FTE time would be delegated to 1) Manage claims-level eligibility tracking, rebate submission workflows, denial follow- up, and coordination with manufacturers or rebate administrators. (40% of time) 2) To perform rebate reconciliation, manage delayed or disputed payments, track receivables, and address cash flow variability.(60%) ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. Answered above. Permanent. D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Our institution would need to update their data files to meet the reporting requirements of the program. In addition, we would will likely have to purchase some sort of software to aid with the reconciliations process between wholesaler ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Based on other software programs we anticipate recurring costs of an additional $2000- $5000/month in software subscriptions fees. E. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. None noted. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). The proposed 340B rebate model must account for the differing characteristics and statutory requirements of each 340B covered entity designation. It is inequitable to require Sole Community Hospitals to purchase drugs at Wholesale Acquisition Cost (WAC) upfront when they are not subject to the GPO exclusion. In addition to creating a significant financial burden, this approach would impose added administrative complexity. If a claim is later deemed ineligible, the covered entity would be required to request that the wholesaler retroactively reclassify the purchase from WAC to GPO, further increasing operational burden and risk. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Our institution offers a prescription assistance program to support our patients and give back to the community as a result of our 340B program. If we are required to purchase these drugs upfront at Wholesale Acquisition Cost, we may be forced to exclude these medications from our prescription assistance program. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Cash flow would immediately be impacted by the difference in payment models. Drug expenses are one of the largest categories of spend for healthcare organizations and have been rising faster than any other category. Tying up additional cash in a rebate program will decrease days cash on hand and could push health systems on the edge out of compliance with liquidity requirements. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. There is no difference in payment terms for our 340B accounts and non-340B accounts. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. There is a -0.26% for weekly payments. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. 7 days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate- based payment. Payment terms would not change to the wholesaler, however the total payment would increase significantly. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. No answer provided e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. No answer provided 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Although these guardrails appear adequate, additional clarification is needed regarding how duplicate claims would be adjudicated if two covered entities submit a claim for the same drug. Specifically, it is unclear whether payment would be determined on a first-to-submit basis or by some other defined methodology. A first-come approach would likely incentivize covered entities to submit data multiple times per day, resulting in a more complex, burdensome, and error- prone data submission process. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. The de-identification of claims makes it very difficult to provide adequate data without compromising HIPPA requirements. A busy retail pharmacy could easily fill 10-15 prescriptions for the same NDC that are both Medicare and 340B eligible. Regardless, all data requirement that CE to submit the claim should be included, along with reason for denial. If the manufacturer TPA could re-identify the claim when it goes back to the CE that would be ideal 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization currently collects, maintains, and retains 340B-related data through a combination of internal systems and contracted third-party vendors. Core data elements including patient eligibility, drug utilization, prescribing provider information, and covered outpatient drug claimsare captured through split billing software received from our electronic health records. Our split billing software carries out a majority of these activities. These systems are configured to support 340B eligibility determinations and to prevent diversion and duplicate discounts. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). SPH has a robust compliance program. All areas of the 340B program are audited on a monthly, bimonthly, quarterly or annual bases. In addition to routine audits, SPH steering committee meets quarterly to discuss current issues and concerns and meets annually with risk management to review current practices. Finally, SPH partners with an independent consulting group to compete an annual mock HRSA audit. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. A 340B Rebate Model would significantly expand data collection activities requirements. There would be both one time and ongoing activities. One time would include system configuration and workflow redesign to support rebate eligibility tracking in place of point-of-sale 340B purchasing. We would need to coordinate with third-party administratorsto capture additional data elements required for rebate submission, such as invoice-level WAC purchases, expanded claim identifiers, manufacturer- specific data fields, and rebate status tracking. These changes would require initial IT development, vendor build fees, staff training, and testing to ensure data integrity and compliance. Ongoing changes would be more substantial. Unlike the current 340B model, which relies on split-billing and inventory replenishment, a rebate model would require continuous collection, validation, submission, and reconciliation of claims data to support rebate requests. We would need to maintain more frequent and detailed data feeds, monitor claim acceptance or rejection, resolve duplicate claim disputes, and reconcile rebate payments against original WAC purchases on an ongoing basis. These activities would represent a permanent expansion of administrative workload rather than a temporary transition. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties The required claims data should mirror the data that is required for the MFP date along with the indicator that the claim is a 340b claim or not. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. No recommendations. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. SPH carves out Medicaid claims and considers them ineligible from the 340B program. These claims are filter out using our 340B split billing software. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices At this time, we do not have the staffing or resources necessary to address this issue. It should also be noted that, for dual eligible claims, the 340B discount should be the primary price concession applied rather than the MFP rebate, as the 340B discount is generally more favorable. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Reconciling MFP rebates has presents substantial operational and resource challenges. At present, we do not have the staffing, technical infrastructure, or financial systems necessary to consistently identify, reconcile, and, when appropriate, dispute MFP rebate transactions. Reconciliation requires us to align multiple independent data sourcesincluding MTF submission files, covered entity (CE) claims data, and Beacon/manufacturer rebate dataeach with different data structures, timing, and validation rules. These data feeds are not synchronized and often rely on de-identified or partially masked claim identifiers, which significantly limits our ability to match transactions across systems with confidence. As a result, even determining whether a rebate was correctly calculated or paid becomes a manual, time- intensive process. It is further concerning that the current MFP program only involves 10 drugs in 2026 but will continue to grow in the years ahead. d. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). There are two challenges that currently exist for all CE regarding Medicaid claims. 1) There is no universal list of all Medicaid programs available for CE to identify. 2) Retro-active Medicaid claims eligibility The primary challenge arises once claims data are de-identified within the Beacon submission and the covered entity attempts to reconcile that information back to its original claims data. The loss of direct claim identifiers makes accurate reconciliation difficult, time-consuming, and in many cases impractical. If the rebate administrator could provide a standardized mapping tool or crosswalk to the covered entityallowing Beacon-submitted, de-identified claim data to be reliably matched to the covered entitys original claimsit would significantly streamline the reconciliation process. This mapping could be transmitted unidirectionally to the covered entity, without granting Beacon access to the underlying identifiers, thereby preserving data security and ensuring continued HIPPA compliance e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The general data elements required under the previous 340B rebate pilot model were largely adequate. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? 1. Drug Identification & Pricing Benchmarks Frequency: Quarterly Manufacturers should submit: National Drug Code (NDC) Wholesale Acquisition Cost (WAC) 340B ceiling price (including penny pricing where applicable) Medicaid Best Price (if used for cross-checking) Any applicable refund or restatement adjustments 2. Aggregate Rebate Payment Data Frequency: Quarterly At an aggregate (not CE- or claim-level), manufacturers should report: Total number of rebate-eligible 340B claims processed Total rebate dollars paid Total rebate dollars denied or pending High-level reason codes for denials (e.g., duplicate discount, ineligible NDC) 3. Rebate Timeliness Metrics Frequency: Quarterly Manufacturers should report: Average days from rebate submission to payment Percentage of rebates paid within required timeframes Outstanding rebate balances over defined aging thresholds 4. Dispute and Adjustment Reporting Frequency: Quarterly Manufacturers should submit: Number of disputed rebate claims Categorized dispute reasons Resolution timelines Volume and dollar amount of post-payment adjustments 5. Methodology Attestation Frequency: Annually (or upon material change) Manufacturers should attest to: Rebate calculation methodology Duplicate discount prevention approach Internal controls and compliance checks b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? All data should be made public. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program, For the duration of the program. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. 1. Erosion of the Upfront Discount Framework Established in Statute The integrity of the 340B Program is grounded in a clear, predictable upfront point-of- sale discount that allows covered entities to purchase drugs at or below the 340B ceiling price. A rebate model fundamentally alters this structure by: a) Decoupling purchase price from the statutory ceiling price b) Replacing certainty with post-dispense reimbursement subject to delay, denial, or dispute c) Shifting financial risk from manufacturers to covered entities This departure weakens the consistency and transparency that are essential to program integrity. 2. Increased Risk of Noncompliance and Operational Error A rebate-based system introduces significantly greater complexity, including claims-level tracking, data submission, and reconciliation across multiple parties. This complexity a) Increases the likelihood of inadvertent diversion or duplicate discount errors b) Expands reliance on third-party vendors with varying standards and controls c) Creates inconsistent interpretations of eligibility and documentation requirements As complexity increases, so does compliance riskundermining the programs integrity rather than strengthening it. 3. Fragmentation of Program Administration Moving only some drugs into a rebate model would force covered entities to operate dual administrative systemsone for upfront discounts and one for rebates. This fragmentation: a) Creates inconsistent treatment of drugs within the same program b) Increases the risk of misclassification and reporting errors c) Makes oversight more difficult for both covered entities and regulators A program with multiple operating models is inherently less coherent and less auditable. 4. Reduced Transparency and Increased Disputes Under the current model, pricing is transparent at the time of purchase. A rebate model replaces this clarity with retrospective determinations controlled in large part by manufacturers. This shift: a) Increases disputes over eligibility, data sufficiency, and payment accuracy b) Reduces covered entities ability to independently verify compliance c) Weakens trust among program participants Persistent disputes and opaque decision-making processes directly erode program integrity. 5. Disproportionate Impact on Safety-Net Providers Covered entities with limited administrative and financial capacity would be most affected by delayed rebates, cash flow uncertainty, and increased compliance burden. This outcome: a) Risks uneven participation across the program b) Undermines uniform access to 340B benefits c) Conflicts with the programs purpose of supporting safety-net providers A program that disadvantages smaller or resource-constrained entities cannot maintain equitable integrity. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Although a rebate-based model may assist in identifying and avoiding duplicate discounts, the significant administrative and reconciliation complexities make this approach burdensome and unnecessary. A simpler and more effective alternative is to maintain upfront 340B pricing for covered entities while requiring the submission of claims data that clearly identifies prescriptions eligible for both Medicare and 340B. The proposed rebate-based model introduces avoidable complexity without meaningfully enhancing program integrity. ii. Reduce diversion or improper claims; Previous versions of the 340B rebate model have indicated that the intent is not address or identify diversions it was simply to ensure duplicate rebates are not paid on MFP claims. A rebate-based approach would not meaningfully reduce diversion or improper claims and may, in fact, introduce new risks to program integrity. First, diversion and duplicate discount prevention are already addressed through existing statutory safeguards and audit mechanisms. Covered entities are subject to oversight by Health Resources and Services Administration and routinely undergo audits that require detailed recordkeeping, eligibility verification, and reconciliation processes. These controls are well established and targeted directly at the points where diversion could occur. A rebate-based model does not enhance these controls; instead, it shifts the transaction mechanics without addressing the underlying compliance framework. Second, a rebate-based model relies heavily on post-dispense claims data, which is frequently de-identified, incomplete, or delayed. This creates ambiguity in matching prescriptions to eligible 340B patients and covered entity sites. Rather than reducing improper claims, this model increases the likelihood of misattribution, reconciliation errors, and disputes between manufacturers, third-party administrators, and covered entities. The lack of real-time, patient- level validation undermines confidence in the accuracy of rebate submissions. Third, by moving from a point-of-sale discount model to a retrospective rebate process, the proposal introduces new administrative handoffs and intermediaries. Each additional step in the data flow increases the risk of errors, inconsistencies, and conflicting interpretations of eligibility. These complexities may inadvertently create new forms of noncompliance, even for covered entities with strong compliance programs. iii. Increase pricing transparency across stakeholders. A rebate-based approach would not increase pricing transparency across stakeholders and would likely reduce transparency compared to the current point-of-sale discount structure. Under the existing 340B framework, pricing transparency is achieved through clearly defined ceiling prices and upfront acquisition discounts that are applied at the time of purchase. Covered entities can readily determine whether they are receiving the correct 340B price and can promptly identify pricing errors. This structure allows for timely reconciliation and accountability without reliance on retrospective adjustments. By contrast, a rebate-based model obscures the true net price of a drug by separating the acquisition cost from the eventual rebate. Covered entities would be required to purchase drugs at wholesale acquisition cost and wait weeks or months for a rebate that may be subject to dispute, delay, or partial denial. During this period, neither covered entities nor manufacturers have clear visibility into the final net price, undermining financial predictability and transparency. Moreover, a rebate-based model depends on complex claims data exchanges involving multiple intermediaries, including payers, pharmacy benefit managers, and third-party administrators. Each stakeholder may apply different data standards, eligibility interpretations, and validation rules. This fragmented process reduces clarity regarding how rebate amounts are calculated, which claims qualify, and when payments will be issued. Rather than increasing transparency, the model shifts pricing information into opaque, back-end processes that are difficult for covered entities to audit or validate. Additionally, rebate determinations would be made after the point of care, limiting a covered entitys ability to proactively verify pricing accuracy or correct errors in real time. Dispute resolution would become retrospective and resource-intensive, further diminishing transparency and accountability. Finally, oversight agencies such as Health Resources and Services Administration would face increased difficulty monitoring compliance, as pricing accuracy would depend on post-hoc rebate calculations rather than observable transaction-level discounts. In summary, a rebate-based 340B model would decrease pricing transparency, introduce uncertainty around net drug costs, and complicate oversight across stakeholders, offering no clear improvement over the existing point-of-sale discount system. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. The most effective way to strengthen the integrity of the 340B Program is to simplify the program, close well-understood loopholes, and reinforce existing oversight tools. Expanding data collection through a rebate-based or claims-driven model would increase complexity and administrative burden while offering little demonstrable improvement in compliance or accountability. This should be completed by 1) Preserve the point-of-sale discount model and simplify data requirements: The current upfront pricing structure provides clear, auditable transactions with minimal data handoffs. Rather than introducing rebate reconciliation, data collection should remain focused on essential eligibility and purchase records already maintained by covered entities. Simplificationnot expansionof reporting requirements is the most effective way to strengthen integrity. 2) Standardize and clarify eligibility definitions: Ambiguity around patient definition, site eligibility, and contract pharmacy arrangements drives much of the perceived risk in the program. Clearer, nationally consistent guidance from Health Resources and Services Administration would reduce interpretive variability and limit unintentional noncompliance without requiring additional reporting systems. 3) Target known loopholes through focused oversight, not universal reporting Program integrity would be better served by risk-based audits and targeted data requests rather than broad, continuous reporting across all covered entities. Concentrating oversight on outliers and high-risk arrangements allows regulators to address genuine compliance concerns while minimizing burden on compliant entities. 4) Leverage existing audit and recordkeeping frameworks Covered entities already maintain detailed purchasing, dispensing, and eligibility records and are subject to audits. Enhancing the effectiveness of these existing mechanismsrather than creating new data submission mandatesstrengthens accountability while avoiding duplicative reporting. 5) Avoid claims-level reporting and de-identified data dependencies Claims-level data is frequently de-identified, delayed, or incomplete, and its use increases administrative complexity without improving accuracy. Integrity efforts should prioritize transaction-level purchase data, which is more reliable, auditable, and directly tied to 340B compliance. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. The potential benefits often cited for a 340B Rebate Model Pilot Programsuch as increased transparency or improved audit complianceare limited, incremental, and outweighed by the significant operational, financial, and compliance costs imposed on covered entities. 1) Transparency: Proponents suggest a rebate model may improve transparency by linking claims data to rebate payments. However, covered entities already maintain robust eligibility, accumulation, and auditing processes under the existing upfront 340B purchasing model. Any marginal transparency gains under a rebate approach primarily benefit manufacturers and do not meaningfully enhance HRSA oversight or CE compliance beyond what is currently achievable through standardized claims- level identifiers. 2) Audit and Compliance Oversight: While a rebate model may offer manufacturers an additional mechanism to detect potential duplicate discounts, this benefit is already achievable without disrupting the 340B framework. Requiring claims data to clearly identify prescriptions eligible for both Medicare and 340Bwhile maintaining upfront 340B pricingwould address duplicate discount concerns without shifting reconciliation and dispute resolution responsibilities to covered entities. As a result, the rebate model does not materially strengthen audit compliance relative to its cost. 3) Program Integrity: The rebate model introduces multiple new points of failure, including delayed rebate payments, claim mismatches, dispute backlogs, and cash flow uncertainty. These risks undermine, rather than enhance, program integrity, particularly for safety-net providers that rely on predictable 340B savings to fund From our standpoint, the limited potential benefits of a 340B Rebate Model Pilot Program do not outweigh its significant financial and operational burdens. A simpler, more effective approach is to preserve upfront 340B pricing while implementing targeted claims-level identifiers to address duplicate discount concerns. This approach would enhance transparency and compliance without introducing unnecessary complexity or jeopardizing the integrity of the 340B. 1. Costs to Covered Entities A. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Total number of 340B transactions processed: 274,518 from June 1, 2025 through May 30, 2025 ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Staffing and Labor Costs: We have approximately 1.25 FTE dedicated to the 340B program. This would be about 60 hours per week. This includes 0.75 FTE as a pharmacy technician and 0.5 FTE of a pharmacist. Information Technology (IT) Systems and Infrastructure: Cost are associated primarily around start up, anytime, HRSA or a Third-Party Vendor makes a data request change, or there is failure with the automation regarding the sending of extracts. The cost is dependent on the type of change. For example, an update to our TPA so we were compliant with sending data regarding the MFP rebate program, probably took around 10 hours. On going maintenance probably averages 2-3 hours monthly. In addition for file uploads that are not yet automated. . Third-Party Vendors: Third party vendor costs are approximately $16,000 per month. Compliance and Audit Activities: Audit activities are included with staffing and labor costs. Outside compliance is completed through our relationship with a 340B consultant group. The cost of this group is around $12,000 annually. Contract Pharmacy Oversight: This is included in our staffing and labor costs. iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing and Labor Costs: Covered entities incur significant labor costs to administer the 340B Program, including: Pharmacy staff responsible for the 340B program are involved with Inventory management, split-billing oversight, and replenishment accuracy Internal audits and continuous monitoring to prevent diversion and duplicate discounts Documentation, record retention, and policy updates in response to evolving guidance Responding to manufacturer audits and HRSA oversight Contract Pharmacy Oversight Finance and revenue cycle personnel supporting charge capture Compliance staff tasked with policy monitoring and annual audits Information Technology (IT) Systems and Infrastructure: Participation in 340B requires complex IT infrastructure, including: Interfaces between pharmacy dispensing systems, electronic health records, wholesaler platforms, and manufacturer data Ongoing system maintenance, upgrades, and cybersecurity safeguards Third-Party Vendors: 340B program administration and split-billing services Contract pharmacy management and claims processing Compliance consulting and audit preparation, B. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. There will be significant incremental administration and operational costs to our organization as the result the proposed 340B rebate model. One-Time Startup Costs: These are costs incurred before or immediately following implementation of the pilot, required to stand up new systems and processes. Extract Redesign and IT activities: Modify 340B eligibility logic in pharmacy claims systems Build interfaces between 340B system and rebate processing Update EHR/ERP to track flagged MDPNP drugs Testing and validation of new logic Estimated Hours: 80-120 hours Estimated Cost (at $80/hr):$4,800- $9,600 Policy Development & Workflow Redesign and Staff Training Develop written policies and SOPs for new rebate process Map current state vs. future state Revise pharmacy intake workflows Educate staff Estimated Hours: Compliance/legal: 10 hrs Pharmacy leadership: 10 hrs Operational staff subject-matter experts: 80 hrs Total One-Time Hours: 100 hours Estimated Cost (@ $80): $8,000 Contracting and Vendor Work Amend agreements with third-party administrators Engage rebate software vendors Contract review Estimated One-Time Hours: 10 hours Estimated Cost (at $80/hr): $800 Ongoing Annual Costs: These reflect incremental, year-over-year operational costs the health system would incur just to comply with the rebate pilot. Rebate Submission Processing: Health systems currently do not file rebates for 340B-purchased drugs, so this is net new work. Identify MDPNP drugs subject to rebate Prepare and submit rebate support packets Respond to payer follow-up Track payments and resolve denials Estimated Annual Hours: 20 hours Estimated Annual Cost at $80/hr): $1600 Monthly Reconciliation & Audits 2 new FTE to help with reconciliation process Reconcile rebate submissions vs. receipts vs other rebate programs QA audits of submission accuracy Internal audit compliance function involvement Estimated Annual Hours: 4160 Cost (at $60/hr compliance rate): $249,600 IT Support & Maintenance Maintain logic that flags rebate drugs System updates due to plan changes Routine maintenance and troubleshooting Estimated Annual Hours:80 hrs Estimated Annual Cost (at $100/hr): $8,000 ii. Describe the methodology and assumptions used to develop these estimates. The methodology and assumptions underlying these estimates are based on our organizations experience with comparable initiatives, including the startup costs associated with the MFP rebate process, the preparatory efforts required for participation in the initial 340B rebate pilot, and the cumulative operational changes resulting from other historical modifications to the 340B Program in which SPH has been required to participate. iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. These incremental costs cover a wide range of activities including: Claims-Level Tracking and Processing: A rebate model would require covered entities to: Track 340B-eligible drugs at the individual claim or dispense level. Distinguish rebate-eligible claims from non-eligible claims across multiple payers and settings. Manage submission timelines and eligibility validation requirements imposed by manufacturers. Data Submission and Validation: Covered entities would incur new costs to: Compile, format, and transmit detailed claims and encounter data to manufacturers or rebate administrators Perform pre-submission validation to reduce denials and disputes Respond to manufacturer data requests and clarification inquiries Reconciliation and Cash Flow Management: Under a rebate model, covered entities would need to: Reconcile expected rebates against payments received from manufacturers Track delayed, partial, or denied rebates Manage cash flow uncertainty associated with reimbursement lag In addition, Sole Community Hospitals have the additional burden of paying WAC upfront, not GPO and then if not reimbursed appropriate, requesting a rebill from the wholesaler at GPO, since SCH are not subject to GPO exclusion. Dispute Resolution and Appeals Management: Incremental costs would also arise from: Investigating and appealing denied or underpaid rebates Maintaining documentation to support rebate eligibility Engaging legal, compliance, or third-party resources to resolve manufacturer disputes Audit and Compliance Support: A rebate-based system would expand compliance requirements, including: Supporting both HRSA oversight and manufacturer rebate audits Retaining expanded datasets and documentation for longer periods Updating policies, procedures, and staff training to reflect rebate-specific requirements iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? The strongest recommendation for offsetting these costs would be to restore the contract pharmacy portion of the 340B program. The manufacturers should be required to remove any bill to ship restrictions they currently have in place, in exchange for claims level data for ONLY contract pharmacy claims. v. Comment on the impact of these incremental costs under your current operations. The impact of these costs is significant and burdensome. Over the past five to six years, 340B savings have been substantially reduced due to manufacturer actions that restrict contract pharmacy arrangements and impose increasingly complex and confusing administrative requirements, all of which drive higher costs for covered entities. Implementing an additional complex model, such as a 340B Rebate Program, would further increase administrative and operational expenses, with these costs ultimately borne by covered entities. C. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). A rebate-based model would introduce new administrative functions that are not required under the current upfront discount structure, necessitating dedicated staffing. Based on our current program operations we anticipate the need for an additional FTE. The FTE time would be delegated to Manage claims-level eligibility tracking, rebate submission workflows, denial follow-up, and coordination with manufacturers or rebate administrators. (40% of time) To perform rebate reconciliation, manage delayed or disputed payments, track receivables, and address cash flow variability.(60%) ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. Answered above. Permanent. D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Our institution would need to update their data files to meet the reporting requirements of the program. In addition, we would will likely have to purchase some sort of software to aid with the reconciliations process between wholesaler ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Based on other software programs we anticipate recurring costs of an additional $2000-$5000/month in software subscriptions fees. E. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. None noted. ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). The proposed 340B rebate model must account for the differing characteristics and statutory requirements of each 340B covered entity designation. It is inequitable to require Sole Community Hospitals to purchase drugs at Wholesale Acquisition Cost (WAC) upfront when they are not subject to the GPO exclusion. In addition to creating a significant financial burden, this approach would impose added administrative complexity. If a claim is later deemed ineligible, the covered entity would be required to request that the wholesaler retroactively reclassify the purchase from WAC to GPO, further increasing operational burden and risk. iii. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Our institution offers a prescription assistance program to support our patients and give back to the community as a result of our 340B program. If we are required to purchase these drugs upfront at Wholesale Acquisition Cost, we may be forced to exclude these medications from our prescription assistance program. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Cash flow would immediately be impacted by the difference in payment models. Drug expenses are one of the largest categories of spend for healthcare organizations and have been rising faster than any other category. Tying up additional cash in a rebate program will decrease days cash on hand and could push health systems on the edge out of compliance with liquidity requirements. b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. There is no difference in payment terms for our 340B accounts and non-340B accounts. i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. There is a -0.26% for weekly payments. ii. State the average number of calendar days within which your organization typically remits payment under these contracts. 7 days. c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Payment terms would not change to the wholesaler, however the total payment would increase significantly. d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. No answer provided e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. No answer provided 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Although these guardrails appear adequate, additional clarification is needed regarding how duplicate claims would be adjudicated if two covered entities submit a claim for the same drug. Specifically, it is unclear whether payment would be determined on a first-to-submit basis or by some other defined methodology. A first-come approach would likely incentivize covered entities to submit data multiple times per day, resulting in a more complex, burdensome, and error-prone data submission process. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. The de-identification of claims makes it very difficult to provide adequate data without compromising HIPPA requirements. A busy retail pharmacy could easily fill 10-15 prescriptions for the same NDC that are both Medicare and 340B eligible. Regardless, all data requirement that CE to submit the claim should be included, along with reason for denial. If the manufacturer TPA could re-identify the claim when it goes back to the CE that would be ideal 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization currently collects, maintains, and retains 340B-related data through a combination of internal systems and contracted third-party vendors. Core data elementsincluding patient eligibility, drug utilization, prescribing provider information, and covered outpatient drug claimsare captured through split billing software received from our electronic health records. Our split billing software carries out a majority of these activities. These systems are configured to support 340B eligibility determinations and to prevent diversion and duplicate discounts. b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). SPH has a robust compliance program. All areas of the 340B program are audited on a monthly, bimonthly, quarterly or annual bases. In addition to routine audits, SPH steering committee meets quarterly to discuss current issues and concerns and meets annually with risk management to review current practices. Finally, SPH partners with an independent consulting group to compete an annual mock HRSA audit. c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. A 340B Rebate Model would significantly expand data collection activities requirements. There would be both one time and ongoing activities. One time would include system configuration and workflow redesign to support rebate eligibility tracking in place of point-of-sale 340B purchasing. We would need to coordinate with third-party administratorsto capture additional data elements required for rebate submission, such as invoice-level WAC purchases, expanded claim identifiers, manufacturer-specific data fields, and rebate status tracking. These changes would require initial IT development, vendor build fees, staff training, and testing to ensure data integrity and compliance. Ongoing changes would be more substantial. Unlike the current 340B model, which relies on split-billing and inventory replenishment, a rebate model would require continuous collection, validation, submission, and reconciliation of claims data to support rebate requests. We would need to maintain more frequent and detailed data feeds, monitor claim acceptance or rejection, resolve duplicate claim disputes, and reconcile rebate payments against original WAC purchases on an ongoing basis. These activities would represent a permanent expansion of administrative workload rather than a temporary transition. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties The required claims data should mirror the data that is required for the MFP date along with the indicator that the claim is a 340b claim or not. e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. No recommendations. 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. SPH carves out Medicaid claims and considers them ineligible from the 340B program. These claims are filter out using our 340B split billing software. b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices At this time, we do not have the staffing or resources necessary to address this issue. It should also be noted that, for dual eligible claims, the 340B discount should be the primary price concession applied rather than the MFP rebate, as the 340B discount is generally more favorable. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Reconciling MFP rebates has presents substantial operational and resource challenges. At present, we do not have the staffing, technical infrastructure, or financial systems necessary to consistently identify, reconcile, and, when appropriate, dispute MFP rebate transactions. Reconciliation requires us to align multiple independent data sourcesincluding MTF submission files, covered entity (CE) claims data, and Beacon/manufacturer rebate dataeach with different data structures, timing, and validation rules. These data feeds are not synchronized and often rely on de-identified or partially masked claim identifiers, which significantly limits our ability to match transactions across systems with confidence. As a result, even determining whether a rebate was correctly calculated or paid becomes a manual, time-intensive process. It is further concerning that the current MFP program only involves 10 drugs in 2026 but will continue to grow in the years ahead. d. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). There are two challenges that currently exist for all CE regarding Medicaid claims. 1) There is no universal list of all Medicaid programs available for CE to identify. 2) Retro-active Medicaid claims eligibility The primary challenge arises once claims data are de-identified within the Beacon submission and the covered entity attempts to reconcile that information back to its original claims data. The loss of direct claim identifiers makes accurate reconciliation difficult, time-consuming, and in many cases impractical. If the rebate administrator could provide a standardized mapping tool or crosswalk to the covered entityallowing Beacon-submitted, de-identified claim data to be reliably matched to the covered entitys original claimsit would significantly streamline the reconciliation process. This mapping could be transmitted unidirectionally to the covered entity, without granting Beacon access to the underlying identifiers, thereby preserving data security and ensuring continued HIPPA compliance e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. The general data elements required under the previous 340B rebate pilot model were largely adequate. 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? 1. Drug Identification & Pricing Benchmarks Frequency: Quarterly Manufacturers should submit: National Drug Code (NDC) Wholesale Acquisition Cost (WAC) 340B ceiling price (including penny pricing where applicable) Medicaid Best Price (if used for cross-checking) Any applicable refund or restatement adjustments 2. Aggregate Rebate Payment Data Frequency: Quarterly At an aggregate (not CE- or claim-level), manufacturers should report: Total number of rebate-eligible 340B claims processed Total rebate dollars paid Total rebate dollars denied or pending High-level reason codes for denials (e.g., duplicate discount, ineligible NDC) 3. Rebate Timeliness Metrics Frequency: Quarterly Manufacturers should report: Average days from rebate submission to payment Percentage of rebates paid within required timeframes Outstanding rebate balances over defined aging thresholds 4. Dispute and Adjustment Reporting Frequency: Quarterly Manufacturers should submit: Number of disputed rebate claims Categorized dispute reasons Resolution timelines Volume and dollar amount of post-payment adjustments 5. Methodology Attestation Frequency: Annually (or upon material change) Manufacturers should attest to: Rebate calculation methodology Duplicate discount prevention approach Internal controls and compliance checks b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? All data should be made public. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program, For the duration of the program. 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. Erosion of the Upfront Discount Framework Established in Statute The integrity of the 340B Program is grounded in a clear, predictable upfront point-of-sale discount that allows covered entities to purchase drugs at or below the 340B ceiling price. A rebate model fundamentally alters this structure by: Decoupling purchase price from the statutory ceiling price Replacing certainty with post-dispense reimbursement subject to delay, denial, or dispute Shifting financial risk from manufacturers to covered entities This departure weakens the consistency and transparency that are essential to program integrity. Increased Risk of Noncompliance and Operational Error A rebate-based system introduces significantly greater complexity, including claims-level tracking, data submission, and reconciliation across multiple parties. This complexity Increases the likelihood of inadvertent diversion or duplicate discount errors Expands reliance on third-party vendors with varying standards and controls Creates inconsistent interpretations of eligibility and documentation requirements As complexity increases, so does compliance riskundermining the programs integrity rather than strengthening it. Fragmentation of Program Administration Moving only some drugs into a rebate model would force covered entities to operate dual administrative systemsone for upfront discounts and one for rebates. This fragmentation: Creates inconsistent treatment of drugs within the same program Increases the risk of misclassification and reporting errors Makes oversight more difficult for both covered entities and regulators A program with multiple operating models is inherently less coherent and less auditable. Reduced Transparency and Increased Disputes Under the current model, pricing is transparent at the time of purchase. A rebate model replaces this clarity with retrospective determinations controlled in large part by manufacturers. This shift: Increases disputes over eligibility, data sufficiency, and payment accuracy Reduces covered entities ability to independently verify compliance Weakens trust among program participants Persistent disputes and opaque decision-making processes directly erode program integrity. Disproportionate Impact on Safety-Net Providers Covered entities with limited administrative and financial capacity would be most affected by delayed rebates, cash flow uncertainty, and increased compliance burden. This outcome: Risks uneven participation across the program Undermines uniform access to 340B benefits Conflicts with the programs purpose of supporting safety-net providers A program that disadvantages smaller or resource-constrained entities cannot maintain equitable integrity. b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Although a rebate-based model may assist in identifying and avoiding duplicate discounts, the significant administrative and reconciliation complexities make this approach burdensome and unnecessary. A simpler and more effective alternative is to maintain upfront 340B pricing for covered entities while requiring the submission of claims data that clearly identifies prescriptions eligible for both Medicare and 340B. The proposed rebate-based model introduces avoidable complexity without meaningfully enhancing program integrity. ii. Reduce diversion or improper claims; Previous versions of the 340B rebate model have indicated that the intent is not address or identify diversions it was simply to ensure duplicate rebates are not paid on MFP claims. A rebate-based approach would not meaningfully reduce diversion or improper claims and may, in fact, introduce new risks to program integrity. First, diversion and duplicate discount prevention are already addressed through existing statutory safeguards and audit mechanisms. Covered entities are subject to oversight by Health Resources and Services Administration and routinely undergo audits that require detailed recordkeeping, eligibility verification, and reconciliation processes. These controls are well established and targeted directly at the points where diversion could occur. A rebate-based model does not enhance these controls; instead, it shifts the transaction mechanics without addressing the underlying compliance framework. Second, a rebate-based model relies heavily on post-dispense claims data, which is frequently de-identified, incomplete, or delayed. This creates ambiguity in matching prescriptions to eligible 340B patients and covered entity sites. Rather than reducing improper claims, this model increases the likelihood of misattribution, reconciliation errors, and disputes between manufacturers, third-party administrators, and covered entities. The lack of real-time, patient-level validation undermines confidence in the accuracy of rebate submissions. Third, by moving from a point-of-sale discount model to a retrospective rebate process, the proposal introduces new administrative handoffs and intermediaries. Each additional step in the data flow increases the risk of errors, inconsistencies, and conflicting interpretations of eligibility. These complexities may inadvertently create new forms of noncompliance, even for covered entities with strong compliance programs. iii. Increase pricing transparency across stakeholders. A rebate-based approach would not increase pricing transparency across stakeholders and would likely reduce transparency compared to the current point-of-sale discount structure. Under the existing 340B framework, pricing transparency is achieved through clearly defined ceiling prices and upfront acquisition discounts that are applied at the time of purchase. Covered entities can readily determine whether they are receiving the correct 340B price and can promptly identify pricing errors. This structure allows for timely reconciliation and accountability without reliance on retrospective adjustments. By contrast, a rebate-based model obscures the true net price of a drug by separating the acquisition cost from the eventual rebate. Covered entities would be required to purchase drugs at wholesale acquisition cost and wait weeks or months for a rebate that may be subject to dispute, delay, or partial denial. During this period, neither covered entities nor manufacturers have clear visibility into the final net price, undermining financial predictability and transparency. Moreover, a rebate-based model depends on complex claims data exchanges involving multiple intermediaries, including payers, pharmacy benefit managers, and third-party administrators. Each stakeholder may apply different data standards, eligibility interpretations, and validation rules. This fragmented process reduces clarity regarding how rebate amounts are calculated, which claims qualify, and when payments will be issued. Rather than increasing transparency, the model shifts pricing information into opaque, back-end processes that are difficult for covered entities to audit or validate. Additionally, rebate determinations would be made after the point of care, limiting a covered entitys ability to proactively verify pricing accuracy or correct errors in real time. Dispute resolution would become retrospective and resource-intensive, further diminishing transparency and accountability. Finally, oversight agencies such as Health Resources and Services Administration would face increased difficulty monitoring compliance, as pricing accuracy would depend on post-hoc rebate calculations rather than observable transaction-level discounts. In summary, a rebate-based 340B model would decrease pricing transparency, introduce uncertainty around net drug costs, and complicate oversight across stakeholders, offering no clear improvement over the existing point-of-sale discount system. c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. The most effective way to strengthen the integrity of the 340B Program is to simplify the program, close well-understood loopholes, and reinforce existing oversight tools. Expanding data collection through a rebate-based or claims-driven model would increase complexity and administrative burden while offering little demonstrable improvement in compliance or accountability. This should be completed by 1) Preserve the point-of-sale discount model and simplify data requirements: The current upfront pricing structure provides clear, auditable transactions with minimal data handoffs. Rather than introducing rebate reconciliation, data collection should remain focused on essential eligibility and purchase records already maintained by covered entities. Simplificationnot expansionof reporting requirements is the most effective way to strengthen integrity. 2) Standardize and clarify eligibility definitions: Ambiguity around patient definition, site eligibility, and contract pharmacy arrangements drives much of the perceived risk in the program. Clearer, nationally consistent guidance from Health Resources and Services Administration would reduce interpretive variability and limit unintentional noncompliance without requiring additional reporting systems. 3) Target known loopholes through focused oversight, not universal reporting Program integrity would be better served by risk-based audits and targeted data requests rather than broad, continuous reporting across all covered entities. Concentrating oversight on outliers and high-risk arrangements allows regulators to address genuine compliance concerns while minimizing burden on compliant entities. 4) Leverage existing audit and recordkeeping frameworks Covered entities already maintain detailed purchasing, dispensing, and eligibility records and are subject to audits. Enhancing the effectiveness of these existing mechanismsrather than creating new data submission mandatesstrengthens accountability while avoiding duplicative reporting. 5) Avoid claims-level reporting and de-identified data dependencies Claims-level data is frequently de-identified, delayed, or incomplete, and its use increases administrative complexity without improving accuracy. Integrity efforts should prioritize transaction-level purchase data, which is more reliable, auditable, and directly tied to 340B compliance. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. The potential benefits often cited for a 340B Rebate Model Pilot Programsuch as increased transparency or improved audit complianceare limited, incremental, and outweighed by the significant operational, financial, and compliance costs imposed on covered entities. Transparency: Proponents suggest a rebate model may improve transparency by linking claims data to rebate payments. However, covered entities already maintain robust eligibility, accumulation, and auditing processes under the existing upfront 340B purchasing model. Any marginal transparency gains under a rebate approach primarily benefit manufacturers and do not meaningfully enhance HRSA oversight or CE compliance beyond what is currently achievable through standardized claims-level identifiers. Audit and Compliance Oversight: While a rebate model may offer manufacturers an additional mechanism to detect potential duplicate discounts, this benefit is already achievable without disrupting the 340B framework. Requiring claims data to clearly identify prescriptions eligible for both Medicare and 340Bwhile maintaining upfront 340B pricingwould address duplicate discount concerns without shifting reconciliation and dispute resolution responsibilities to covered entities. As a result, the rebate model does not materially strengthen audit compliance relative to its cost. Program Integrity: The rebate model introduces multiple new points of failure, including delayed rebate payments, claim mismatches, dispute backlogs, and cash flow uncertainty. These risks undermine, rather than enhance, program integrity, particularly for safety-net providers that rely on predictable 340B savings to fund From our standpoint, the limited potential benefits of a 340B Rebate Model Pilot Program do not outweigh its significant financial and operational burdens. A simpler, more effective approach is to preserve upfront 340B pricing while implementing targeted claims-level identifiers to address duplicate discount concerns. This approach would enhance transparency and compliance without introducing unnecessary complexity or jeopardizing the integrity of the 340B.
HRSA-2026-0001-2231Gulf Health Hospitals, Inc. DBA North Baldwin Infirmary and Mobile Infirmary Medical Center2026-04-20T04:00Z43,540 chars
See attached file(s) April 20, 2026 Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center and other Covered Entities. As a 340B-participating hospital system, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center are core components of the healthcare safety net in the South Alabama communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center participate in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. April 20, 2026 Page 2 At a high level, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centers 340B Program participation enables us to commit an additional $80 million dollars per year to the South Alabama community safety net populations we serve. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center also use 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center wish to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center submit the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY ABD MOBILE INFIRMARY MEDICAL CENTERS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). April 20, 2026 Page 3 Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Gulf Health Hospitals, Inc DBA North Baldwin Infirmary, Mobile Infirmary Medical Center, and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center. For example, manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but it is not in the manufacturers best interest to reduce their prices below the 340B ceiling price, most likely resulting in overall higher pricing to the covered entities and patients. 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center pharmacy, manufacturers have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centers purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center have seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTERS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER FOR THE VALUE OF ITS DATA? One of Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centers principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B 10 See 45 C.F.R. 160.103. April 20, 2026 Page 7 Program. 11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center believe it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center urge HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 8 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centers perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centers patient population, we serve many other patients, including patients with no coverage at all. Requiring Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER? IF NOT, WHY NOT? As noted above, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center firmly believe that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. April 20, 2026 Page 9 Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centerurge HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON GULF HEALTH HOSPITALS, INC DBA NORTH BALDWIN INFIRMARY AND MOBILE INFIRMARY MEDICAL CENTER? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Centerto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 12 See 45 C.F.R. 164.501. April 20, 2026 Page 10 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center are deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center hope that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center encourage improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 15. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center maintain auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. The administrative and operational costs associated with the 340B Model Rebate Pilot Program is estimated to be hiring an additional 3 FTEs initially with the potential to need more as our program expands and possibly more medications are added. Key cost drivers are increased staffing ($200K annually), diverting current staff (adding at least 10 hours per week), and developing a process for challenging denials. These incremental costs would cover (e.g., claims processing, data submission, reconciliation/chasing down rebates, audit support, challenging denials) and current administrative costs would increase approximately $1 million for initial purchasing of these medications on WAC and compared to the current upfront 340B discount. Additional costs associated with implementation of a potential 340B Rebate Program not otherwise captured above include legal review ($25K annually), April 20, 2026 Page 12 consulting services ($50K annually), and reduction in services offered (savings to patients through secured grants of $600K annually). These costs are recurring. The MFP program has already reduced our savings by $400K per month with the potential for more impact as more medications are added. This reduces the overall savings of our program by nearly $5 million per year. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. o Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center estimates show that with a rebate model, we would have to float $6,960,000 each year to purchase the drugs at WAC. With this amount of money consumed by administrative red tape, we could not continue to support the programs we provide thanks to 340B savings, including, but not limited to: Organized community health fares and screening for our remote communities. Grow our outreach services. Provide training for pharmacy and medical residents. A pharmacy-managed comprehensive medication assistance program to ensure that our uninsured and underinsured patients have access to post- hospitalization medications. Last year approximately $660,000 was secured through co-pay assistance and grant foundations. Expand access to medications across our communities through retail pharmacies, specialty pharmacy, outpatient infusions, discharge medications, and home infusion. Expand access to oncology services. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. April 20, 2026 Page 13 Implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees. The anticipated number of additional full-time employees is 3; and their roles/responsibilities would be to review claims to ensure all qualifying claims are uploaded to the Beacon platform, retrospective review of the data to make sure rebate was approved by the manufacturer, working with accounting to ensure payments are received, and disputing any denied claims with the manufacturer. We would need at least 6 weeks notice to hire/orient these employees and an additional 8 weeks to train them. The details of the roles and responsibilities of the new hires mentioned above require far more than the estimated additional 2 hours of work per week estimated by HRSA. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. A potential 340B Rebate Model Pilot Program would require additional maintenance of data feeds to TPA to ensure accurate fields are available for reporting to Beacon. Estimated costs for system development and maintenance that would be required to implement a potential 340B Rebate Model Pilot Program are $40K initially and $10K annually. Our TPA does not have a direct feed into our EHR, so the reporting of medical claims would have to be manual. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. April 20, 2026 Page 14 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 16. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 17. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Infirmary Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time April 20, 2026 Page 15 rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Gulf Health Hospitals, Inc DBA North Baldwin Infirmary and Mobile Infirmary Medical Center and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, April 20, 2026 Page 16 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 17 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 18 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2232Coosa Valley Medical Center2026-04-20T04:00Z25,562 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Sylacauga Healthcare Authority DBA Coosa Valley Medical Center located in Sylacauga, AL, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Coosa Valley Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Coosa Valley Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Coosa Valley Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Coosa Valley Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Coosa Valley Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Coosa Valley Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The administrative and operational costs to the organization that we could incur under the 340B Model Rebate Pilot Program will be extensive. Our organization estimates significant costs for implementing the rebate pilot program for the 25 Medicare-negotiated drugs applicable in 2026 and 2027. Key activities associated with rebate pilot program would include claims processing, data submission, rebate reconciliation, and audit support. We estimate that the shift to the rebate model will increase administrative costs greatly based on more actions the covered entity would be responsible for now versus the upfront rebate model. These costs would include increased consulting fees for our 340B compliance vendor, an increase in TPA fees, ongoing staff training, and the need for an additional full time employee to help the organization with the rebate model since the amount of dollars we would have to provide upfront soars to an estimate of $1.7 million for the 25 drugs. Staffing Impacts Under a Potential 340B Rebate Program. Coosa Valley Medical Center does not currently have the staff needed to comply with a Rebate Program. As mentioned above and an additional full time employee would be needed to help the organization manage the rebate program. In our view, hiring for administrative roles detracts from patient care, and our organization would much prefer to invest in staff who can provide direct care to patients rather than shifting those resources for an administrative task. Additionally, we believe that HRSAs current estimate of only 5 hours per weeks of additional work for up to 25 drugs under the proposed rebate model is an underestimation. Given the complexity of managing claims, data submission, rebate tracking, and compliance for the proposed 25 drugs will likely demand more time. We strongly believe that or focus should be on enhancing patient care rather than expanding administrative staff. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Coosa Valley Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur more costs to change those systems. To implement a rebate program, we would need to modify IT systems for extracting and transferring medical claims data to our TPA. This would involve modifying data feeds, developing additional custom reports, and ensuring proper data formatting, and security. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Coosa Valley Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The cash flow impacts of the rebate model is the most detrimental component of this proposal for our organization. The 10-day period of waiting for the rebate would significantly disrupt our cash flow. Most rural health care organizations operate on very thin margins and the current upfront discount model ensures immediate savings at the time of purchase, which helps us be able to continue providing healthcare services to our community. We do not have sufficient cash on hand to withstand the rebate model. An annualized estimate based on the 25 proposed drugs would require us to float an additional $1.7 million. This disruption in cash flow could put us in jeopardy of not being able to make needed capital purchases, meet strategic goals to strengthen patient care, and continue to meet our patients at their point of need. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Coosa Valley Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Should the rebate model be implemented, it could force our administrative team, board of directors, and medical providers to analyze areas of care, which may have to be paused or terminated due to the cash flow impacts. If any services are discontinued, this would force patients in our area to travel further for health care which they have been able to receive in their community today. In addition, it would force our CFO and administrative team to secure more cash on hand to pay the upfront costs of the program, which could affect the initiation of projects to improve patient care or access to care. Another operational disruption would likely force community pharmacies who partner with us in the contract pharmacy space to pause or terminate 340B claims processing for the 25 drugs which will also decrease cash on hand as well. Simply stated, a decrease in cash from multiple sources would be detrimental to our organization. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Coosa Valley Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. There was no opportunity to send test claims to ensure data submissions were successfully received, reviewed, and that those claims passed data processing specifications. Any errors in data submission would have only delayed the payment of the rebate; therefore, putting more financial strain on the covered entity. There was very limited time to review Beacons Terms and Conditions as well. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Coosa Valley Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Coosa Valley Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Coosa Valley Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Roger D. Morris Director of Pharmacy Services Coosa Valley Medical Center, Sylacauga, AL 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of The Sylacauga Healthcare Authority DBA Coosa Valley Medical Center located in Sylacauga, AL, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Coosa Valley Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Coosa Valley Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Coosa Valley Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and 2 therefore less money that Coosa Valley Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Coosa Valley Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Coosa Valley Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. The administrative and operational costs to the organization that we could incur under the 340B Model Rebate Pilot Program will be extensive. Our organization estimates significant costs for implementing the rebate pilot program for the 25 Medicare-negotiated drugs applicable in 2026 and 2027. Key activities associated with rebate pilot program would include claims processing, data submission, rebate reconciliation, and audit support. We estimate that the shift to the rebate model will increase administrative costs greatly based on more actions the covered entity would be responsible for now versus the upfront rebate model. These costs would include increased consulting fees for our 340B compliance vendor, an increase in TPA fees, ongoing staff training, and the need for an additional full time employee to help the organization with the rebate model since the amount of dollars we would have to provide upfront soars to an estimate of $1.7 million for the 25 drugs. Staffing Impacts Under a Potential 340B Rebate Program. Coosa Valley Medical Center does not currently have the staff needed to comply with a Rebate Program. As mentioned above and an additional full time employee would be needed to help the organization manage the rebate program. In our view, hiring for administrative roles detracts from patient care, and our organization would much prefer to invest in staff who can provide direct care to patients rather than shifting those resources for an administrative task. Additionally, we believe that HRSAs current estimate of only 5 hours per weeks of additional work for up to 25 drugs under the proposed rebate model is an underestimation. 3 Given the complexity of managing claims, data submission, rebate tracking, and compliance for the proposed 25 drugs will likely demand more time. We strongly believe that or focus should be on enhancing patient care rather than expanding administrative staff. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Coosa Valley Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur more costs to change those systems. To implement a rebate program, we would need to modify IT systems for extracting and transferring medical claims data to our TPA. This would involve modifying data feeds, developing additional custom reports, and ensuring proper data formatting, and security. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Coosa Valley Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. The cash flow impacts of the rebate model is the most detrimental component of this proposal for our organization. The 10-day period of waiting for the rebate would significantly disrupt our cash flow. Most rural health care organizations operate on very thin margins and the current upfront discount model ensures immediate savings at the time of purchase, which helps us be able to continue providing healthcare services to our community. We do not have sufficient cash on hand to withstand the rebate model. An annualized estimate based on the 25 proposed drugs would require us to float an additional $1.7 million. This disruption in cash flow could put us in jeopardy of not being able to make needed capital purchases, meet strategic goals to strengthen patient care, and continue to meet our patients at their point of need. 4 Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Coosa Valley Medical Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Should the rebate model be implemented, it could force our administrative team, board of directors, and medical providers to analyze areas of care, which may have to be paused or terminated due to the cash flow impacts. If any services are discontinued, this would force patients in our area to travel further for health care which they have been able to receive in their community today. In addition, it would force our CFO and administrative team to secure more cash on hand to pay the upfront costs of the program, which could affect the initiation of projects to improve patient care or access to care. Another operational disruption would likely force community pharmacies who partner with us in the contract pharmacy space to pause or terminate 340B claims processing for the 25 drugs which will also decrease cash on hand as well. Simply stated, a decrease in cash from multiple sources would be detrimental to our organization. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably may exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Coosa Valley Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. 5 Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. There was no opportunity to send test claims to ensure data submissions were successfully received, reviewed, and that those claims passed data processing specifications. Any errors in data submission would have only delayed the payment of the rebate; therefore, putting more financial strain on the covered entity. There was very limited time to review Beacons Terms and Conditions as well. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Coosa Valley Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Coosa Valley Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Coosa Valley Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. 6 We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Roger D. Morris Director of Pharmacy Services Coosa Valley Medical Center, Sylacauga, AL
HRSA-2026-0001-2233Penn Medicine2026-04-20T04:00Z10,164 chars
Please see attached for comment on behalf of Penn Medicine. Perelman Center for Advanced Medicine | 3400 Civic Center Boulevard | Philadelphia, PA 19104-4283 April 20, 2026 The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Penn Medicine, I am writing to offer feedback in response to the Request for Information that the Health Resources and Services Administration (HRSA) published in the Federal Register on February 17, 2026 related to a potential 340B Rebate Model Pilot Program. Penn Medicine is one of the worlds leading academic medical centers, dedicated to the related missions of medical education, biomedical research, and excellence in patient care. Penn Medicine serves the city of Philadelphia, southeastern and central Pennsylvania, and central New Jersey. The system provides our communities with a full spectrum of health care services including physician care within the hospital and through on-site and off-campus physician clinics. Combined, Penn Medicine provides inpatient services to more than 50,000 Medicare inpatients and more than one million Medicare outpatients a year. Concerns with Rebate Model HRSA is interested in transitioning the 340B drug program from an upfront discount on the acquisition price that covered entities pay to a rebate model in which manufacturers deliver a rebate after purchase in the amount equal to the discount. A rebate structure would fundamentally shift the purpose of the 340B program, which was created to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. This provider group cannot manage the upfront costs of purchasing at the wholesale price without the rebate savings coming immediately. For decades, 340B participating hospitals have budgeted in reliance on the 340B upfront discount price and have planned accordingly for the costs of outpatient drug administration, internal technology and administrative processing for these drugs, staffing, and third-party contracts. A switch to a rebate model will disrupt the fundamentals of hospital budgets and impose significant new costs on hospitals that care for high levels of Medicaid patients. Even large academic medical centers need financial predictability when it comes to drug acquisitions costs because health systems plan years ahead for new patient benefits and services and new outlays for rebate amounts will interrupt those plans regardless of whether the covered entity has access to other capital or charitable contributions. We are proud to serve as a safety-net hospital serving our community, and the 340B program is an important way safety-net providers extend services to the community that otherwise would not be possible. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require our institution to spend significant sums on new administrative costs. As participants in the 340B program, reasonable administrative costs are expected. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs on the institution. This new rebate model for 340b claims would be similar to setting up a pre-certification process for 340b with similar tasks such as reviewing denials, answering inquiries, reconciliating responses, and resubmitting claims. It will only increase the amount of staff we have dedicated to administrative tasks relative to patient care. Staffing Impacts Under a Potential 340B Rebate Program Additional staff that will be needed to comply with a Rebate Program. The organization estimates that we would need additional employees dedicated to the process of reconciling rebates which would include managing submissions and denials. As the list of drugs grow, so too would this team. This in effect would impact future investment we would be able to make in patient care. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Penn Medicine has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Currently, contract pharmacy claims are submitted through a similar pathway, however the claims are for informational purposes only, they do not have an impact on upfront 340b pricing access. We are also concerned that the platform hosts patient information like prescription number and claims number, which requires additional compliance with legal and privacy to ensure appropriate patient protections. Beyond the new pressures on hospital budgets, the transition to a rebate model will also change the pressures when deciding how to meet community needs. Our Penn Medicine locations stand as the pillars of the neighborhoods in which they are situated and we pride ourselves on being able to meet the difficult demands of caring for a high Medicaid and uninsured population. However, for some health systems the discounts available in the 340B program may be one of the few incentives to begin serving or expanding their service to areas with a high Medicaid patient population. The high cost of establishing and staffing an outpatient clinic in a low-income neighborhood can be balanced against the future cost-avoidance the hospital could rely on when purchasing 340B covered drugs for that location. Under a rebate model, health system leadership would have to use an entirely different calculus when determining the viability of investments in certain services. HRSA Should Further Investigate Duplicate Discount Findings When planning for the now withdrawn 340B rebate pilot program and in the release of this RFI, HRSA cited significant concerns about covered entities accessing duplicate discounts on their 340B covered drugs from both the drug manufacturer and their state Medicaid program. The audit reports include findings of inaccurate or incomplete information in the HRSA Medicaid Exclusion File (MEF). This finding does not mean that a second discount was obtained by the covered entity but instead indicates an error in the MEF data that is maintained by HRSA. Further, based on how the information is displayed in the audit report, there is no way to determine if a finding of a duplicate discount indicates that one duplicate discount was mistakenly obtained or 300 duplicate discounts were obtained with malicious intent. HRSA in the corrective action process directs covered entities to work with states and manufacturers to repay manufacturers in an amount equal to the reduction in the price of the drug. This audit and remediation strategy is in place to be sure the duplicate discount is transitory, yet transitioning the whole 340B program to a new payment structure will have lasting impacts on hospital financial health. The transition to a rebate model will not address the issues with the MEFs accuracy and completeness that lead to duplication of discounts. HRSA should explore other options to advance its goal of eliminating duplicate discounts, such as new processing with state Medicaid programs or using a third-party clearinghouse for drug purchasing, rather than transitioning to a rebate mechanism that has not been shown to have a connection to this goal. In any future rulemaking, we urge HRSA to explore other, more effective mechanisms to protect against duplicate discounts. HRSA Must Consider Program Integrity Protections Penn applauds the recent efforts by the Centers for Medicare and Medicaid Services (CMS) to eliminate unnecessary paperwork and regulatory burdens, and we urge HRSA to follow suit if it proposes a rebate model in the future. The agency must prioritize clear administrative standards and keep paperwork burdens low to help balance the needs of the 340B entities and the interests of manufacturers and protect seamless access to covered outpatient drugs. We expect covered entities will be required to submit distinct data elements that manufacturers need to process the rebate request, and manufacturers must be required to respond in a timely manner either with payment or requests for missing information. We recommend HRSA set strict limitations on the types of additional documentation requests and denial reasons that the manufacturers can use in administering a rebate model, if implemented. Without those protections, covered entities will be forced to dedicate their scarce staffing resources to chase paperwork instead of reconciling their financial outlays and moving on to focus on patient care. Similar to the penalty if a manufacturer fails to pay covered entities within 10 calendar days, we recommend HRSA charge the manufacturers an interest penalty for any rebate requests that go unanswered within 5 calendar days and any additional documentation requests or denials that are not sufficiently specific for the entities to respond. Conclusion Penn Medicine thanks you for the opportunity to provide feedback in response to this RFI. We hope you find our input informative, and we are available to offer more details on the views we have expressed in this letter. Sincerely, Nishaminy Kasbekar, BS, PharmD, CPEL, FASHP Vice President and Chief Pharmacy Officer University of Pennsylvania Health System
HRSA-2026-0001-2234Heartland Health Services2026-04-20T04:00Z42,183 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Heartland Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Heartland Health Services anticipates a reduction in annual 340B savings of $763,000 on contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. This includes Walgreens, Kroger, and Walmart pharmacies who have stated they are unable to carve in 340B Rebate claims. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Heartland Health Services has participated in the 340B Drug Pricing Program since 2007 and relies on the program's up-front discount structure to maintain operational stability. The current point- of-sale discount model allows our health center to immediately reinvest savings into patient care services a financial cycle that a rebate-based model would fundamentally disrupt. Under a rebate model, Heartland Health Services would be required to purchase drugs at full wholesale acquisition cost (WAC) and await reimbursement after the fact. As a Federally Qualified Health Center serving a predominantly low-income, uninsured, and underinsured patient population, we do not carry the cash reserves or access to capital necessary to front these costs for weeks or months at a time. This operational burden would be disproportionately borne by safety- 2 net providers like FQHCs, who operate on razor-thin margins and lack the financial cushion available to larger health systems. Additionally, the administrative complexity of a rebate model including claim submission, reconciliation, dispute resolution, and rebate tracking across multiple manufacturers and drug categories would require significant new staffing and infrastructure investments. These are resources our health center does not currently have and cannot easily absorb without redirecting funding away from direct patient care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Heartland Health Services in particular, this means it will impact: 21,433 Unique Patients Heartland Health Services uses savings provided by 340B to allow patients with no insurance to utilize a 340B cash discount program, to help patients enroll in health insurance for free, to connect them with resources based on social determinates of health (SDOH), to offer Opioid Programs/Medication Assisted Therapy (MAT), to offer Behavioral Health services and Tele Psych services, OB/Womens Health, and to support free Diabetic Education as well as many other local services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 3 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Sliding Fee Discount: Heartland Health Services wrote off $200,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Heartland Health Services anticipates needing 1 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Heartland Health Services anticipates an increase of $20,000 in annual costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Heartland Health Services. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Heartland Health Services estimated an increased $1,400,000 in cash flow needs annually in order to purchase 340B drugs at WAC. Heartland Health Services estimates the cost of 1 FTE and software to help process and reconcile 340B Rebate Claims at $75,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 36 hours per week to submit and reconcile 340B rebate claims will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Heartland Health Services urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 21,433 Unique Patients, the total projected decrease to our 340B savingsincluding contract pharmacy carve outs, labor, contracted support, IT, and increased cash flow burdenis estimated at over $1,790,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 102 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 102 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Greater Peoria Illinois Area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Heartland Health Services allows our patients to utilize our 340B Cash Program to pay the 340B drug price plus the dispensing and administration fee imposed at the pharmacy. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,519,000 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $115,000 to purchase these same drugs at the 340B ceiling price. This represents a 1,226% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Heartland Health Services anticipates needing to reduce: 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Outreach and Enrollment services, Opioid Programs/Medication Assisted Therapy (MAT), Behavioral Health services and Tele Psych services, OB/Womens Health, and Diabetic Education as well as many other local services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund full time Community Health Workers, Nursing Staff, Certified Medical Assistants, Mental Health Counselors directly impacting the ability of patients to get a timely appointment with our medical teams. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Heartland Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Heartland Health Services estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,584,799. This cost aggregates the estimated financial impact of rebate denials, pharmacy carve outs, loss of purchase discounts, additional head count, and rebate reconciliation software and consultants. 10 Heartland Health Services estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $117,000 for the 10 current drugs proposed. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to consider lines of credit and utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $ 56,000 annuallyfunds that are currently dedicated to Womens Health, Behavioral Health, Opioid Programs/Medication Assisted Therapy (MAT), Tele Psych Services, Diabetic Education, hiring Clinicians, Administrative, and Clinical staff. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Heartland Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Heartland Health Services urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $51,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased 12 drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Heartland Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally 13 impossible to provide the sliding fee scale and steeply discounted medications required by law. Heartland Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Heartland Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Heartland Heath Services Controller, Brett Hammer at b.hammer@hhsil.com. Sincerely, Dewitt Harrell, CEO Heartland Health Services
HRSA-2026-0001-2235Essentia Health2026-04-20T04:00Z18,625 chars
On behalf of Essentia Health, we appreciate the opportunity to submit comments on the proposed 340B Drug Rebate Model Pilot Program. We strongly oppose this major shift in policy from the long-established and effective model of front-end discounted drugs. A rebate scheme threatens safety-net providers and limits access to care for vulnerable patients. The statutory intent of the 340B Drug Pricing Program is clear: it serves as a critical federal initiative that allows safety-net hospitals to stretch limited resources and expand essential health services, especially in rural communities. We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork April 20, 2026 The Honorable Thomas Engels Administrator Health Resource and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Submitted via www.regulations.gov Dear Administrator Engels: On behalf of Essentia Health, we appreciate the opportunity to submit comments on the proposed 340B Drug Rebate Model Pilot Program. We strongly oppose this major shift in policy from the long-established and effective model of front-end discounted drugs. A rebate scheme threatens safety-net providers and limits access to care for vulnerable patients. The statutory intent of the 340B Drug Pricing Program is clear: it serves as a critical federal initiative that allows safety-net hospitals to stretch limited resources and expand essential health services, especially in rural communities. Essentia Health is headquartered in Duluth, Minnesota, and combines the strengths and talents of 15,000 employees, including 2,200 physicians and advanced practitioners, who serve a largely rural region across Minnesota, Wisconsin, and North Dakota including 17 federally recognized Tribal Nations. Essentia Health is a mission-driven organization, being called to make a healthy difference in peoples lives. Essentia lives out this mission with a patient-centered focus at 14 hospitals, 80 clinics, six long-term care facilities, two assisted and three independent living facilities, seven ambulance services, 29 retail pharmacies, and a rural health research institute Essentia Health currently has 14 covered entities participating in the 340B program, including: 8 critical access hospitals; We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork 3 disproportionate share hospitals; 2 rural referral centers; and 1 sole community hospital. The RFI poses 30 questions across a variety of topics. Detailed further in our comment letter, we have numerous comments and concerns pertaining to the proposed rebate pilot, including the: 1) Reliance interests - covered entities rely on the existing program providing upfront discounts that work. 2) A rebate model would create significant administrative and operational costs. 3) Lack of oversight, enforcement and dispute resolution guardrails. The proposed rebate scheme is antithetical to the goals of the Trump Administration to unleash prosperity through deregulatory actions. We appreciate the focus on meaningful deregulatory actions that do not negatively impact patient care. However, this proposed rebate creates more regulatory burden on not-for-profit health care providers and is a solution in search of a problem. Reliance Interests As a health system that spans rural Minnesota, North Dakota, and Wisconsin, many of our patients live in rural and underserved communities and tend to be older, bear greater burdens of chronic disease, experience higher levels of poverty and substance abuse, and have lower rates of insurance coverage compared to people living in urban areas. In these rural states, financial insecurity further perpetuates these challenges, as many of the counties we serve fall below the statewide median income. Section 340B of the Public Health Service Act (42 U.S.C. 256b(a)(1)) clearly says that a manufacturer participating in Medicaid must offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price. This directive is unambiguous: discounts must be made available at the point of purchase, not after the fact through a rebate process. By conditioning access to 340B prices on post-hoc rebate claims, HRSA would effectively replace the statutory requirement of upfront discounts with a model not authorized by Congress. HRSA contends they have statutory authority to reform 340B, specifically to a rebate program. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. The argument provided in the RFI on reliance interests is based on a faulty assumption. Statutory authority does not guarantee the agency will or must act in a new, specific way, especially since the 340B Program has always offered discounts using upfront pricing, not post-sale rebates. With 14 covered entities, Essentia Health could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate scheme that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. HRSA has long affirmed in guidance and enforcement practice that the integrity of the 340B program rests upon its statutory requirement of upfront pricing. Any attempt to bypass this framework without explicit Congressional authorization undermines both program integrity and HRSAs credibility as the programs steward. For these reasons, Essentia Health relies heavily upon 340B savings to ensure we can continue to provide comprehensive health care services that are crucial to the rural and underserved communities we serve. This includes leveraging the total 340B savings Essentia Health receives as a health system to provide our rural facilities with the resources needed to continue offering a full range of health care services, such as primary care, behavioral health and addiction services, and 24/7/365 emergency department services. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. The bottom line is the 340B program, as an upfront discount program, is fundamental built into the fabric of our financial modeling and pharmacy operating systems. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is woefully incorrect. We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork We are guided by our mission and values in providing access to care. But without an operating margin, albeit very small, there is no mission. When evaluating opportunities to provide access to care, such as constructing a new clinic or offering new services, they must be done in stewardship of our available resources. Part of this consideration is the 340B program. Significant Financial Implications to Covered Entities In exploring a potential rebate scheme, HRSA needs to consider a critical economic and policy decision: is the agency willing to significantly disrupt cash flow to nonprofit health care providers on thin operating margins? Essentia Health has an annual financial operating margin of approximately 1-2%. Our current annual 340B savings are approximately $205 million. By fronting millions in upfront costs with the hope of receiving a timely rebate is far too risky of a financial disruption to hospitals. The bottom line is this: a rebate scheme does nothing to solve problems of high prescription drug costs; jeopardizes the financial viability of nonprofit health care providers; and increases administrative costs. In all, a rebate scheme is antithetical to the deregulatory goals of the Trump administration. Beyond the significant cash flow disruption, there are major financial costs to covered entities by moving to a rebate scheme. We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, covered entities including Essentia Health would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The proposed rebate structure demonstrates a limited understanding of the operational and cash-flow challenges faced by safety-net hospitals. This effectively transfers financial implications from pharmaceutical companies to hospitals that often operate with constrained resources. Under this arrangement, not-for-profit hospitals would be required to initially We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork absorb the full cost of medications before realizing any subsequent savings. This approach shifts financial responsibility from large for-profit drug manufacturers to health care providers and safety-net hospitals without a clearly articulated benefit of doing so. The financial strain of a rebate scheme would be substantial. Requiring hospitals to pay WAC prices upfront would tie up significant working capital, placing additional pressure on already limited budgets. This added burden comes at a time when safety-net providers are already contending with a host of emerging regulatory and financial pressures. These combined pressures, along with the delays inherent in a rebate-based system, could threaten the viability of providers that serve our most vulnerable patients. Operational Disruption and Significantly Increased Administrative Burden HRSA seeks detailed information on how a rebate model would affect covered entities costs compared to the current upfront discount model. Administrative costs Staffing impacts Systems, IT, and infrastructure Payment timing and cash flow impacts Beyond substantial and unnecessary financial risk to nonprofit health care providers, the rebate model introduces considerable operational challenges and increased complexity. Hospitals may be required to employ additional personnel focused exclusively on administering rebate submissions, tracking payment statuses, and reconciling transactions across various drug manufacturer platforms. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Furthermore, the proposed rebate model is likely to create inconsistencies in information processing systems among manufacturers, resulting from variations in tracking methods, data requirements, and user interfaces. This divergence would necessitate ongoing, resource-intensive staff training and frequent adaptation. With rebate processes differing across ten drugs and more than thirty manufacturers, administrative complexity would increase significantly, without a clearly defined benefit for moving away from the current process. Existing information technology platforms are optimized for the 340B upfront discount program; dividing orders between WAC and 340B pricing under a rebate system would challenge reconciliation and compliance, thereby increasing administrative workload. We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Oversight, enforcement and dispute resolution guardrails Pursuant to (d)(1)(B)(vi) of the 340B statute, HRSA is authorized to impose civil monetary penalties (CMPs) for each instance of non-compliance, which includes improper denial of rebates, delayed rebate payments, and failure to cover hospital costs or fulfill administrative responsibilities related to the pilot program. Such non-compliance is regarded as a statutory overcharge under the relevant provisions, potentially justifying corresponding penalties. Additionally, in accordance with its oversight authority under 42 U.S.C. 256(d)(1)(B)(ii)(II), the agency may require drug manufacturers to pay interest on any rebate payments to covered entities that are delayed beyond the mandated 10-day timeframe. We question whether drug companies, whose interests may conflict with timely rebate payments, will resolve disputes with hospitals in good faith. Finally, if the agency moves forward with the program, HRSA should also have a specific process for covered entities to report suspected misuse of data as well as general concerns about how drug companies are implementing the pilot rebate program. A Rebate Model Is Not Necessary for MDPNP Deduplication We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid We are called to make a healthy difference in peoples lives. Quality | Hospitality | Respect | Joy | Justice | Stewardship | Teamwork duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. Conclusion For the reasons described throughout our comments, we strongly urge HRSA to abandon the rebate model pilot program and instead focus on strengthening the current upfront discount model through targeted oversight and accountability measures. The 340B programs proven success lies in its ability to provide immediate savings that directly support patient care. The rebate model would introduce unnecessary complexity, go against statutory requirements pertaining to upfront discounts, shift financial risk to resource- constrained providers, and fail to address any demonstrated problem with the current system. In sum, we urge HRSA to uphold the mission of the 340B program. The program ensures access to care for vulnerable communities, by preserving the proven upfront discount model that has worked effectively for over three decades and swiftly withdraw this rebate program. Please feel free to contact me with any questions. Sincerely, Brian Vamstad, PhD Director of Regulatory Affairs Essentia Health brian.vamstad@essentiahealth.org
HRSA-2026-0001-2236(no commenter metadata)2026-04-20T04:00Z36,662 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: Bluegrass Community Health Center (BCHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, BCHC strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least seven safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, BCHC explains: The importance of 340B savings to your states CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their number low-income and uninsured patients. How a rebate model will create massive cashflow, administrative, and other costs for CHCs. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drug, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. The minimum protections that must be put in place if HRSA insists on applying a rebate model to CHCs. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. In 2024 they serviced over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% who were uninsured, and millions more who were underinsured. CHCs provided each of these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs ability to provide affordable services to their low-income and uninsured patients. Consistent with federal law and regulations, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Kentucky, CHCs routinely rely on 340B savings to support services such as: Dental care Substance use disorder (SUD) treatment Behavioral health services School-based health programs Care coordination and case management As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow demands. This 10-day turnaround addresses only one step in a multi-step financing process; other time-consuming steps (e.g., dispensing a full package of drugs, wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Kentuckys CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates and likely seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, volume discounts (as CHCs will be incentivized to minimize their inventories) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will force CHCs to scale back services, reduce discounts on drug, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required under Federal law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend beyond affordable pricing on medications, to all types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many chain pharmacies reached the same decision, with both Walgreens and Walmart - the second and third largest pharmacy chains in the US publicly announcing plans to carve out rebate drugs from 340B starting in the new year. Compared to hospitals (and all other covered entity types), FQHCs rely very heavily on contract pharmacies to ensure affordable medication access to their patients, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to offer affordable rebate drugs to their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue to purchase the drugs under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and non-adherence will increase, causing rates of avoidable complications and hospitalizations to rise. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above (e.g., avoidable cash flow demands, administrative burdens, and harm to patients) apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: Medicare-negotiated drugs represent a much larger share of CHCs 340B purchases than for other CEs types. This is because the drugs subject to Medicare negotiation are common Part D medications, which CHCs frequently prescribe. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, the following protections should be required elements of the manufacturers plans: For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers must advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers must advance enough rebates to cover their average number of dispenses for that drug over a typical two-month period. The two-package or two-month standard will provide CHCs with enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that the last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved in the autumn fell far short of this commitment, as it failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot, and also proposes a methodology for allocating these costs across manufacturers. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on these units. This suggests that CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Removing BIN and PCN from the list of required data elements. These data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many part of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data in order to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me. Sincerely, Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Pharmacy staff time: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: Bluegrass Community Health Center (BCHC) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: In short, BCHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least seven safeguards to reduce the negative financial impacts on CHCs and their patients. 1 First paragraph of the RFI summary 2 Summary of Comments: In these comments, BCHC explains: A. The importance of 340B savings to your states CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their number low-income and uninsured patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drug, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that must be put in place if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. In 2024 they serviced over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% who were uninsured, and millions more who were underinsured2. CHCs provided each of these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs ability to provide affordable services to their low-income and uninsured patients. Consistent with federal law and regulations, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Kentucky, CHCs routinely rely on 340B savings to support services such as: Dental care Substance use disorder (SUD) treatment Behavioral health services School-based health programs Care coordination and case management As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow demands. This 10-day turnaround addresses only one step in a multi-step financing process; other time-consuming steps (e.g., dispensing a full package of drugs, wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Kentuckys CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates and likely seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, volume discounts (as CHCs will be incentivized to minimize their inventories) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will force CHCs to scale back services, reduce discounts on drug, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. 4 Reduction in services: As required under Federal law3 and regulation4, CHCs invest every penny of 340B savings into services that expand access to care for their medically- underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend beyond affordable pricing on medications, to all types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many chain pharmacies reached the same decision, with both Walgreens and Walmart - the second and third largest pharmacy chains in the US publicly announcing plans to carve out rebate drugs from 340B starting in the new year. Compared to hospitals (and all other covered entity types), FQHCs rely very heavily on contract pharmacies to ensure affordable medication access to their patients, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to offer affordable rebate drugs to their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue to purchase the drugs under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and non- adherence will increase, causing rates of avoidable complications and hospitalizations to rise. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above (e.g., avoidable cash flow demands, administrative burdens, and harm to patients) apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of CHCs 340B purchases than for other CEs types. This is because the drugs subject to Medicare negotiation are common Part D medications, which CHCs frequently prescribe. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 5 infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, the following protections should be required elements of the manufacturers plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers must advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers must advance enough rebates to cover their average number of dispenses for that drug over a typical two-month period. The two-package or two-month standard will provide CHCs with enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that the last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved in the autumn fell far short of this commitment, as it failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) 6 To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot, and also proposes a methodology for allocating these costs across manufacturers. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on these units. This suggests that CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Removing BIN and PCN from the list of required data elements. These data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many part of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data in order to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 7 Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me. Sincerely, 8 Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Pharmacy staff time: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2237(no commenter metadata)2026-04-20T04:00Z16,997,761 chars
This submission is 16,997,761 characters — an attachment dump far larger than any other comment in the docket. Its text is omitted here so the page stays usable; it is held in full in the source data and on regulations.gov.
HRSA-2026-0001-2238Neighborhood Health Center of WNY, Inc.2026-04-20T04:00Z43,956 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Health Center of WNY, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Neighborhood Health Center of WNY, Inc. anticipates a loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Neighborhood Health Center of WNY, Inc. in particular, this means it will impact 34,690 patients with 196,560 340B transactions. The current admin costs for the our 340B program is $382,900. The following services that are supported by 340B savings: Over $260,000 to support medication delivery to patients homes Medication therapy management and clinical pharmacist services Population health and advanced care management Allows to maintain low, nominal medication costs for sliding fee scale patients Nutrition services Home visits Transportation services Community health workers and care coordination services We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 3 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- 6 2025 UDA Data, HRSA (hrsa.gov) 5 owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Neighborhood Health Center of WNY, Inc. provided $1,375,389 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Neighborhood Health Center of WNY, Inc. anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Neighborhood Health Center of WNY, Inc. anticipates an increase of to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate needing one additional FTE to support the ongoing change in processes, with the potential to be even greater should the rebate model expand to more NDCs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate the cost of additional staff to be around $97,000 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We anticipate ten hours per week will be required to report 340B rebate claims to a third-party platform and reconcile, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Neighborhood Health Center of WNY, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We also anticipate a significant amount of time to manage outstanding accumulations in the time leading up to the conversion due to restrictions in manufacturer policies regarding unreplenished accumulations. We estimate this cost to be, $6,000 to $10,000, which will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend time manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 8 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 8 different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New Systems Required 7 Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Internal NACHC survey data 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. We currently offer patients access to medication via a nominal fee ranging from $3 to $9 per prescription per month. In the new model, we may be unable to maintain the low fees that at times result in a loss and transition to a cost plus model to ensure sustainability. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,499,399 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $90,033 to purchase these same drugs at the 340B ceiling price. This represents a 2776% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Neighborhood Health Center of WNY, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as o Medication therapy management and clinical pharmacist services o Population health and advanced care management o Allows to maintain low, nominal medication costs for sliding fee scale patients o Nutrition services o Home visits o Transportation services o Community health workers and care coordination services Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other clinical staff. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,045 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Neighborhood Health Center of WNY, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, 11 origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Neighborhood Health Center of WNY, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $842,160. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Neighborhood Health Center of WNY, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $201,000. This increases to approximately $425,000 monthly with the additional 2027 and 2028 MFP drugs. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization could be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution and would limit our growth to meet patient and community needs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Neighborhood Health Center of WNY, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP 12 deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount or submitted the 340B ceiling price to state Medicaid agencies. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $363,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 14 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Neighborhood Health Center of WNY, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Neighborhood Health Center of WNY, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Neighborhood Health Center of WNY, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Kelly Suzan, Vice President of Strategy at Kelly.Suzan@nhcwny.org or Michele Steiner, Vice President of Pharmacy at Michele.Steiner@nhcwny.org. Sincerely, Joanne Haefner President & CEO Neighborhood Health Center of WNY, Inc.
HRSA-2026-0001-2239Howard Brown Health2026-04-20T04:00Z76,661 chars
See attached for comment on behalf of Howard Brown Health. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Howard Brown Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to covered entities ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Howard Brown Health is one of the largest health centers in the Midwest, serving more than 40,000 patients across seven clinic locations in Chicago. Howard Brown serves adults and youth in its diverse health and social service delivery system focused around seven major programmatic divisions: primary medical care, behavioral health, research, HIV/STI prevention, youth services, elder services, and community initiatives. As a federally qualified health center (FQHC), Howard Brown provides services regardless of a patients ability to pay or insurance status. Around 20% of Howard Browns patients are uninsured and we serve vulnerable patients from all over Illinois including rural and low-income areas. I. We strongly urge HRSA to halt the 340B Rebate Model Pilot Program for covered entities, including CHCs. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications with upfront significantly reduced prices. At Howard Brown Health, we pass these savings to low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Howard Brown Heath, this will impact: 2 Patient Care: All our patients benefit from the increased medication access and expanded services that are available through the 340B program. Switching to a rebate model would threaten the health of the 42, 984 patients we saw in 2025. Administrative Burden: Switching to a rebate model would increase our current 340B current administrative costs by 1 FTE in a time when the healthcare sector is already burdened with funding cuts and workforce shortages. Programs and Services: Howard Brown reinvests our 340B savings to help fund and maintain a wide variety of critical services that our patients rely on. Many of these services are unique to Howard Brown and are otherwise poorly funded and reimbursed for. Some of these programs and services include: comprehensive healthcare and social services for unhoused youth at our Broadway Youth Center, case management and insurance navigation for people living with HIV, and free and subsidized full service dental care at our 63rd Street dental clinic. We strongly urge HRSA to halt the rebate model to protect the financial stability of safety- net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on access to affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin that reflects the 340B price. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. A 340B Rebate Model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model will render critical medications financially out of reach since upfront 340B pricing will not be available. Consequently, due to cost, patients may be forced to make tough decisions, including switching to other medications. These therapeutic interchanges 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. The implementation of the 340B Rebate Model Pilot will cause covered entities to incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. If we were to use the manufacturer restriction platform as a proxy to what comes with the Rebate Model, then we are worried about the useability and support of the platform. We spent many hours per week on issues related to restrictions and have scheduled biweekly meetings to review setups and notices. Routine maintenance is equivalent to two to four hours per week Because of the complexity of the system, when an unexpected event occurs, the expected workload can increase five-fold as a team troubleshoots through: o A manufacturer platform representing: Two dozen manufacturers, o Alongside the platforms representing: Multiple wholesalers, Multiple third-party administrators, Multiple contract pharmacy arrangements. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 5 Staffing Impact: To account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model, Howard Brown Health anticipates 1.5 FTEs in the beginning and then goes down to 1 FTE. External Vendor Costs: Given increased complexity, Howard Brown Health anticipates costs related to external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, and reconciliation services. Workforce Impact Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Howard Brown Health has factored 1.5 FTE in for the first 68-month period and then drops down to 1 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Howard Brown Health created a new position in anticipation of the model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Howard Brown Healths experience with the current platform used for manufacturer restrictions informed estimates during the initial planning for the rebate model. It will require pulling data from different vendors and conforming to the required standards. We estimate 10-15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Howard Brown Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Initial Implementation Operational Impact The rebate model will require new workflows, including submission, reporting, and tracking. There will be a high upfront cost to adapt and modify current procedures to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. We work with several different TPAs and pharmacies, including independents pharmacies that provide a point of access in vulnerable communities. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our team must track claims with different pharmacy partners to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative burden, this may leave patients living in pharmacy desert areas of Chicago with limited affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Inventory Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B Rebate Model pilot. By including both Retail and CAD, CHCs will have to create two very different workflows. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). The uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow and is a departure from over 30 years of precedent. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Up front access to 340B pricing at Howard Brown Health, means patients who are under/uninsured have access to affordable medications. Additionally, for patients with less resources, we provide medication vouchers directly to the patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate the purchase of these ten drugs under the proposed 340B Rebate Model would increase our upfront cost by 1,278% (equal to the difference between WAC minus 340B cost, divided by the 340B cost). The 340B Rebate Model makes it more difficult for Howard Brown Health to expand services. It would create a barrier to implementing new programs/services that are important to our patients but may not be billable. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Howard Brown Health estimates that purchasing the 2026, 2027, and 2028 MFP selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by 56% (equal to the difference between WAC minus 340B cost, divided by the 340B cost). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. The long-term impact is if the 340B Rebate 10 Model expands, then the trickle-down effect is longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Howard Brown Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in an annual drug cost increase by 5%. This is a sum our CHC cannot absorb year after year, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operates under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 12 We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Howard Brown Health strongly urges HRSA to halt the 340B Rebate Model Pilot Program. A 340B Rebate Model represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Howard Brown Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Howard Brown Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact [YOUR POLICY DIRECTORS/VPS NAME AND EMAIL ADDRESS.] Sincerely, 13 CEO NAME ORGANIZATIONS NAME April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Howard Brown Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to covered entities ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Howard Brown Health is one of the largest health centers in the Midwest, serving more than 40,000 patients across seven clinic locations in Chicago. Howard Brown serves adults and youth in its diverse health and social service delivery system focused around seven major programmatic divisions: primary medical care, behavioral health, research, HIV/STI prevention, youth services, elder services, and community initiatives. As a federally qualified health center (FQHC), Howard Brown provides services regardless of a patients ability to pay or insurance status. Around 20% of Howard Browns patients are uninsured and we serve vulnerable patients from all over Illinois including rural and low-income areas. We strongly urge HRSA to halt the 340B Rebate Model Pilot Program for covered entities, including CHCs. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications with upfront significantly reduced prices. At Howard Brown Health, we pass these savings to low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Howard Brown Heath, this will impact: Patient Care: All our patients benefit from the increased medication access and expanded services that are available through the 340B program. Switching to a rebate model would threaten the health of the 42, 984 patients we saw in 2025. Administrative Burden: Switching to a rebate model would increase our current 340B current administrative costs by 1 FTE in a time when the healthcare sector is already burdened with funding cuts and workforce shortages. Programs and Services: Howard Brown reinvests our 340B savings to help fund and maintain a wide variety of critical services that our patients rely on. Many of these services are unique to Howard Brown and are otherwise poorly funded and reimbursed for. Some of these programs and services include: comprehensive healthcare and social services for unhoused youth at our Broadway Youth Center, case management and insurance navigation for people living with HIV, and free and subsidized full service dental care at our 63rd Street dental clinic. We strongly urge HRSA to halt the rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on access to affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin that reflects the 340B price. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. A 340B Rebate Model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model will render critical medications financially out of reach since upfront 340B pricing will not be available. Consequently, due to cost, patients may be forced to make tough decisions, including switching to other medications. These therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. The implementation of the 340B Rebate Model Pilot will cause covered entities to incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. If we were to use the manufacturer restriction platform as a proxy to what comes with the Rebate Model, then we are worried about the useability and support of the platform. We spent many hours per week on issues related to restrictions and have scheduled biweekly meetings to review setups and notices. Routine maintenance is equivalent to two to four hours per week Because of the complexity of the system, when an unexpected event occurs, the expected workload can increase five-fold as a team troubleshoots through: A manufacturer platform representing: Two dozen manufacturers, Alongside the platforms representing: Multiple wholesalers, Multiple third-party administrators, Multiple contract pharmacy arrangements. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Staffing Impact: To account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model, Howard Brown Health anticipates 1.5 FTEs in the beginning and then goes down to 1 FTE. External Vendor Costs: Given increased complexity, Howard Brown Health anticipates costs related to external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, and reconciliation services. Workforce Impact Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Howard Brown Health has factored 1.5 FTE in for the first 68-month period and then drops down to 1 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Howard Brown Health created a new position in anticipation of the model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Howard Brown Healths experience with the current platform used for manufacturer restrictions informed estimates during the initial planning for the rebate model. It will require pulling data from different vendors and conforming to the required standards. We estimate 10-15 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Howard Brown Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Initial Implementation Operational Impact The rebate model will require new workflows, including submission, reporting, and tracking. There will be a high upfront cost to adapt and modify current procedures to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. We work with several different TPAs and pharmacies, including independents pharmacies that provide a point of access in vulnerable communities. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our team must track claims with different pharmacy partners to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative burden, this may leave patients living in pharmacy desert areas of Chicago with limited affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Inventory Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B Rebate Model pilot. By including both Retail and CAD, CHCs will have to create two very different workflows. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). The uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow and is a departure from over 30 years of precedent. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Up front access to 340B pricing at Howard Brown Health, means patients who are under/uninsured have access to affordable medications. Additionally, for patients with less resources, we provide medication vouchers directly to the patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate the purchase of these ten drugs under the proposed 340B Rebate Model would increase our upfront cost by 1,278% (equal to the difference between WAC minus 340B cost, divided by the 340B cost). The 340B Rebate Model makes it more difficult for Howard Brown Health to expand services. It would create a barrier to implementing new programs/services that are important to our patients but may not be billable. Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Howard Brown Health estimates that purchasing the 2026, 2027, and 2028 MFP selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by 56% (equal to the difference between WAC minus 340B cost, divided by the 340B cost). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. The long-term impact is if the 340B Rebate Model expands, then the trickle-down effect is longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Howard Brown Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in an annual drug cost increase by 5%. This is a sum our CHC cannot absorb year after year, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operates under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Howard Brown Health strongly urges HRSA to halt the 340B Rebate Model Pilot Program. A 340B Rebate Model represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Howard Brown Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Howard Brown Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact [YOUR POLICY DIRECTORS/VPS NAME AND EMAIL ADDRESS.] Sincerely, CEO NAME ORGANIZATIONS NAME
HRSA-2026-0001-2240LBU Community Clinic2026-04-20T04:00Z4,551 chars
See attached file(s) >Yt LEW April 20, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: HRSA-2026-03042: Request for Information on the 340B Rebate Model Pilot Program Dear Mr. Engels: Los Barrios Community Clinic, Inc. (LBU) is pleased to provide this response to HRSA's Request for Information on the proposed 340B Rebate Model Pilot Program. LBU was founded in 1971, and over the past 55 years has provided primary health care for thousands of people who call Dallas and North Texas home. Most of LBU's 26,000 patients are uninsured (52%) and come from working poor families. In 2025 LBU Community Clinic was honored with HRSA Gold Health Center Quality Leader badges, recognition for being in the top 10% of health centers in the United States for superior clinical performance. The superior clinical outcomes, especially in diabetes management and heart health, are due in large part to the availability of prescription medications. LBU owns and operates an in-house pharmacy that provides affordable medication to patients thanks to the 340B program. Implementation of the 340B Rebate Model Pilot Program will impose substantial financial hardship for LBU. The LBU Pharmacy formulary includes drugs on the rebate list and LBU physicians prescribe these medications as clinically indicated. The current operation of the pharmacy is streamlined and lean. Most of their customers are uninsured and pay cash for their medication. The low overhead and low acquisition costs for the drugs ensure an easy, affordable experience for patients. Utilization patterns from the past 12 months indicate 955 dispensed prescriptions from the drugs on the rebate list. In the case of one drug from the rebate list, the current 340B price is $0.30 per month. The proposed Wholesale Acquisition Cost (WAC) is $377.82 per month for the identical drug at the identical strength. With 805 total months dispensed in one year, LBU acquisition costs will skyrocket from $241.57 per year to $304,233.26 per year, an astonishing 1,259% increase. Even with rebates due to LBU Community Clinic, the cash flow implications are enormous. LBU Community Clinic 809 Singleton Blvd. Dallas, Texas 75212 lbucommunityclinic.org Administration (214) 571-6132 Fax (214) 651-9514 Appointments (214) 540-0300 Sincerely With respect to the 10 drugs on the 2026 rebate list, assuming the next 12 months prescribing/dispensing equals the past 12 months, LBU estimates a loss of $289,292 in the LBU Pharmacy. This includes increased expenses in personnel (pharmacy, clinical, accounting staff, and billing staff), legal fees, consultant fees, IT infrastructure, and audit fees. The proposed requirement for covered entities to pay full acquisition costs upfront, especially for high-cost specialty drugs, would cause huge financial disruption for the entire organization. Already operating at a narrow margin, execution of the 340B Rebate Model Pilot Program threatens long term sustainability for LBU and other community health centers. The potential shift to a rebate model means LBU will need to grow infrastructure to ensure proper management of the program. LBU operates a strong quality improvement and risk management program and a robust compliance program and knows these structures are part of a high quality, high integrity, efficient health care organization. LBU is adept at pivoting as needed and it realizes implementation requires proper infrastructure and the resources to build same. What is now a lean and efficient LBU Pharmacy will become more complex and costly. The Los Barrios Unidos Community Clinic patient-majority Board of Directors and employees wish to continue our 55-year history of providing high quality, affordable health care to underserved communities. LBU's consumer board members greatly appreciate the cost savings provided by the 340B pharmacy model, while also realizing the financial impact of significant upfront costs. They, too, understand that the proposed 340B Rebate Model Pilot Program would compromise the financial health and cash flow of the organization, requiring cost-saving cuts that directly impact health services. Therefore, LBU respectfully requests that FQHC's like Los Barrios Unidos Community Clinic be exempted from the 340B Model Pilot Program. Thank you for your time and consideration. Leonor Marquez, M A, LCSW Chief Executive Officer
HRSA-2026-0001-2241HonorHealth2026-04-20T04:00Z18,313 chars
Please see attachment for HonorHealth's response to HRSA's 340B Rebate Model Pilot Program RFI, and thank you for the opportunity to input. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Hutnan Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Inforination: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: 1 am writing on behalf of HonorHealth, which has four 340B covered entities: HonorHealth John C. Lincoln Medical Center (DSH030014), HonorHealth Deer Valley Medical Center (RRC030092-00), HonorHealth Tempe Medical Center (DSH030037), and HonorHealth Four Peaks Medical Center (DSH030121) (collectively, the "HonorHealth 340B Covered Entities"). HonorHealth is an integrated nonprofit health system serving communities across Arizona, operating 12 hospitals with a total of 1,818 licensed beds. Supported by more than 17,000 team members and over 4,000 physicians and providers on the medical staff, HonorHealth delivers care to more than 3 million patients annually, including a substantial population of lowincome, uninsured, and underinsured individuals. The system includes three certified Level I Trauma Centers, five DNVcertified stroke centers, and five Magnetdesignated hospitals, reflecting its role as a regional safetynet provider for complex, highacuity care. Consistent with the statutory intent of the 340B Program to enable covered entities to stretch scarce federal resources as far as possible and reach more eligible patients, HonorHealth relies on predictable 340B savings to sustain accessoriented services, provide patient financial assistance, and reinvest directly in community health programs that would otherwise be financially unsustainable. HonorHealth strongly opposes the 340B Rebate Model and urges HRSA to continue implementing the 340B program as it is currently structured. As explained below, any rebate mechanism will impose enormous costs and burdens on HonorHealth 340B Covered Entities that far outweigh any benefits that might come from it. If HRSA elects not to preserve the program in its current form, HonorHealth firmly believes that a national 340B clearinghouse is the only acceptable alternative and is categorically preferable to any rebate-based approach. A. Significant Financial Harm Will Result from a Transition to a RebateBased Model. Transitioning the 340B program from an upfront discount model to a rebatebased structure will create meaningful financial losses for HonorHealth 340B Covered Entities. As a result, these impacts would diminish the financial benefits of the 340B Program and reduce resources available to support patient care and communitybased services. 1. Loss of Cost of Goods Discount. HonorHealth 340B Covered Entities currently receive a percentage discount from its wholesaler when buying 340B drugs. The shift to a rebate model forces HonorHealth 340B Covered Entities to instead purchase drugs at WAC prices, which are specifically excluded from the wholesaler's cost of goods discounts. This will result in a loss of over $1 Million to HonorHealth 340B Covered Entities in the next three years. 2. Increased Drug Acquisition Costs Due to Arbitrary Rebate Denials. Rebate denials resulting from unverifiable or insufficiently explained manufacturer denial reasons are expected to materially increase HonorHealth's net drug acquisition costs, resulting in estimated additional expenses of approximately $740,000 in 2026 and $3.7 million in 2027 for HonorHealth 340B Covered Entities. HonorHealth submits that HRSA should explicitly prohibit manufacturers from denying rebates. Without strict prohibitions, manufacturers will inevitably issue denials based on unverifiable claims or "unintelligible" reason codes that are impossible to challenge without the burdensome ADR process. Or, a manufacturer could deny claims based on restrictive, non-HRSA-sanctioned contract pharmacy policies. Manufacturers already possess the statutory authority to audit covered entities after providing 340B pricing, they must not be granted the power to unilaterally deny claims before providing that price. B. Payment Timing and Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force HonorHealth 340B Covered Entities to effectively provide drug companies with interest-free loans it awaits the discounts that are properly owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. 1. Cash Flow Burden Created by WAC-Based Purchasing. Under a rebate model, HonorHealth 340B Covered Entities would have to purchase drugs at Wholesale Acquisition Cost (WAC) rather than 340B ceiling prices, resulting in significant upfront cash outlays. This structure would effectively require the HonorHealth 340B Covered Entities to advance substantial sums to pharmaceutical manufacturers, tying up critical working capital that would otherwise be available to support patient care and essential operations. Based on current purchasing volumes, we estimate this 2 would require fronting approximately $5 million in 2026, with potential exposure increasing to approximately $25 million in 2027 if the rebate model were expanded. 2. Increase in InventoryRelated CashFlow Strain. Under a rebatebased model, HonorHealth 340B Covered Entities would comply with claimlevel data submission requirements; however, there will undoubtedly be a substantial delay between purchasing drugs at Wholesale Acquisition Cost (WAC) and receipt of the corresponding 340B rebate, which can be upward of 45 days. During this period, the Honorflealth 340B Covered Entities must fund highercost drug purchases without reimbursement, placing pressure on liquidity and reducing available cash for patient care and operational needs. This delay effectively forces the hospital to carry highervalue inventory for longer periods of time, resulting in an estimated increase in average inventory on hand of approximately $600,000 in 2026 and up to $3 million in 2027 if the rebate model is expanded. C. Administrative Costs Will Substantially Increase Under A Potential 340B Rebate Program. Any rebate program would require HonorHealth 340B Covered Entities to spend significant sums on new administrative costs. When it chose to participate in the 340B program, HonorHealth understood that it would incur some reasonable administrative costs. However, HonorHealth specifically designed its hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what was expected or planned for as a hospital system with multiple 340B covered entities, and far above and beyond what we are experiencing now. 1. Significant New Technology and Integration Costs. HonorHealth's current systems do not support the dispenselevel data feeds required by the Beacon platform or manufacturerspecific portals. Consequently, HonorHealth would be required to procure and implement new 340B rebate reconciliation software, including complex integrations with the Beacon platform, the Electronic Health Record, and ThirdParty Administrators. Estimated licensing and service costs are approximately $117,000 in 2026 and $172,000 in 2027. 2. Additional Staffing and Administrative Burden. To manage the laborintensive data submission, rebate reconciliation, and denialmanagement workflows required under a 340B rebate model, HonorHealth estimates the need for one (1) additional fulltime equivalent (FTE) dedicated to daytoday rebate operations. In addition, ongoing support would be required from legal (manufacturer dispute resolution and contract 3 interpretation), contracting (reconciliation of rebate terms and eligibility requirements), finance (cashflow tracking, accruals, and rebate accounting), and compliance/information services (data validation, audit support, and systems oversight). The estimated incremental staffing costs associated with these administrative functions are approximately $120,000 in 2026 and $150,000 in 2027. D. Rebate Lag and Funding Volatility Would Force Reductions in SafetyNet Services. If the current upfront 340B discount structure were replaced with a rebate-based model, the delay, uncertainty, and administrative complexity inherent in rebate reconciliation would materially reduce the predictable funding on which HonorHealth relies to sustain critical safetynet programs. As a result, HonorHealth would be forced to eliminate, or, at the very least, scale back programs that depend on stable and timely 340B savings. Current HonorHealth programs supported, in whole or in part, by 340B savings include transportation and navigation services for individuals experiencing homelessness, social determinants of health screening and referral programs, and partnerships with community-based organizations that address food insecurity, housing instability, and access to followup care. Reductions in 340B savings may also threaten support for trauma services, care for uninsured and underinsured patients through residency and specialty care programs, patient financial assistance for prescription drugs and postdischarge services, and expanded access to cancer care and clinical trials. These programs are not ancillary; they directly support access to care, improve health outcomes for vulnerable populations, and help prevent avoidable emergency department utilization. These programs cannot be financed on speculative or delayed reimbursement; therefore, even temporary lags or denials in rebate payments would necessitate reductions in services, with direct and adverse consequences for patient access and community health outcomes. E. A Rebate Model Would Create Significant New Data Collection and Integration Burdens. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. HonorHealth 340B covered entities currently rely on three, and soon four, thirdparty administrators to support 340B compliance across mixeduse settings, inhouse retail pharmacies, and contract pharmacy arrangements. In addition, customized reports must be generated from the electronic health record (EPIC) to support clean site locations. While required 340B data is currently maintained across multiple platforms and is readily available for HRSA audit purposes 4 under the upfront discount model, a rebatebased model would significantly change existing data collection and management processes. Specifically, the rebate model would require consolidation and normalization of data from disparate internal systems and thirdparty vendors into formats compatible with varying manufacturer rebate claim requirements. This would impose both a onetime implementation burden to build new data workflows and system integrations, as well as ongoing operational and maintenance demands that would increase over time as additional manufacturers participate in the rebate model. F. HonorHealth's Proven Compliance Measures Undermine the Need for a Rebate- Based Model. Federal law prohibits duplicate discounts, meaning manufacturers are not required to provide both a 340B ceiling price and a Medicaid drug rebate for the same drug. See 42 U.S.C. 256b(a)(5)(A)(i). Covered entities are therefore required to maintain effective mechanisms to prevent duplicate discounts, a core compliance obligation under the Public Health Service Act. HonorHealth 340B Covered Entities have a longstanding and demonstrated commitment to preventing Medicaid duplicate discounts. HonorHealth's inforrnation in OPAIS and the HRSA Medicaid Exclusion File is accurate and consistent with operational practice and applicable state requirements. For contract pharmacy arrangements, HonorHealth carves out Medicaid prescriptions entirely; no 340B drugs are used. This is operationalized through the use of BIN/PCN/Group exclusion lists, which are shared with all 340B software vendors to prevent 340B replenishment. HonorHealth's commitment to duplicate discount prevention has also been validated through multiple HRSA audits, including audits conducted in 2019 (twice) and in 2022. HRSA's own audit data further confirms the effectiveness of these existing safeguards. Specifically, HRSA audit results show that duplicate discount findings in hospital audits declined between FY 2018 and FY 2022 and have remained steady through FY 2025, demonstrating that the current Medicaid Exclusion File (MEF) is working as intended. In addition, HonorHealth already employs advanced third-party administrator (TPA) software and dedicated internal 340B compliance teams to conduct routine monthly self-audits. These proactive controls are designed to identify and prevent both duplicate discounts and diversion in near real time. As a result, a rebate-based model would not meaningfully "reduce" diversion or duplicate discounts, but would instead duplicate existing controls while significantly increasing administrative burden. More recently, HRSA has recognized that manufacturers have alternative, existing mechanisms available to address 340B Medicaid National Drug Pricing Program (MDNP) deduplication concerns. Given the significant operational and fmancial burden a rebate-based model would irnpose on HonorHealth 340B Covered Entities, HRSA should rely on 340B 5 covered entities to adopt or implement these alternatives rather than adopting a rebate mechanism that would disproportionately burden covered entities and divert resources from patient care. G. A National Clearinghouse is a Preferable Alternative to Replacing Upfront Discounts With Rebates. If HRSA determines that it will not continue to administer the 340B Program under the current upfront discount framework, a centralized national 340B clearinghouse could provide a more workable and less disruptive alternative to a manufacturerdriven rebate model. A neutral clearinghouse administered or designated by HRSA could serve as a single, standardized hub for eligibility validation and duplicate discount prevention without fundamentally altering the statutory design of the program. Unlike a rebate model, which shifts program risk, cashflow instability, and dispute resolution responsibilities to covered entities, a clearinghouse approach would preserve the ability of covered entities to purchase drugs at the point of sale while addressing manufacturers' stated concerns through uniform, transparent verification tnechanisms. A national clearinghouse could leverage existing data sources and safeguards, such as the Medicaid Exclusion File, state Medicaid requirements, and established 340B eligibility parameters, to conduct realtirne or nearrealtime deduplication and validation. Centralizing this function would reduce the need for covered entities to submit redundant or bespoke data to dozens of individual manufacturers, each with its own standards, timelines, and adjudication practices. Importantly, a HRSAauthorized clearinghouse would ensure consistent rules, auditability, and accountabilityeliminating the unilateral denial authority and opacity that characterize rebatebased proposals. This approach would advance program integrity while avoiding the significant administrative burden, delayed reimbursement, and financial uncertainty inherent in rebate reconciliation, all of which undermine the 340B Program's statutory purpose of enabling covered entities to stretch scarce resources and maintain access to care for vulnerable populations. H. Summary For the reasons described above, HonorHealth respectfully submits that any transition frorn the current upfront 340B discount structure to a rebatebased model would fundamentally undermine the 340B Program's statutory purpose and irnpose significant, uncompensated harm on covered entities, the patients they serve, and the communities that rely on them. A rebate model would replace a predictable, pointofsale discount with delay, uncertainty, and administrative complexity, effectively shifting fmancial risk, cashflow strain, and enforcement burdens onto hospitals while granting manufacturers unilateral control over pricing outcomes through opaque denial practices. The resulting fmancial losses, operational disruption, and funding volatility would force covered entities like HonorHealth to divert scarce resources away 6 from patient care and community benefit programs, contrary to Congress's intent that the 340B Program enable covered entities to stretch scarce federal resources and reach more eligible patients. HonorHealth urges HRSA to continue administering the 340B Program as currently structured. Existing safeguards, including HRSA audits, the Medicaid Exclusion File, and robust coveredentity compliance programs, have proven effective in preventing duplicate discounts and maintaining program integrity without imposing unnecessary burdens. Manufacturers already possess audit rights under the statute and do not require a rebate mechanism to address compliance concerns. If, however, HRSA determines not to preserve the current upfront discount framework, HonorHealth strongly believes that a HRSAauthorized national 340B clearinghouse represents the only viable alternative consistent with the statute. HonorHealth appreciates the opportunity to submit these comments and stands ready to work with HRSA to preserve a 340B Program that continues to function as Congress intended and meet the needs of vulnerable patient populations. Please contact me if you have questions. Sincerely, Kristjon Lindgren, PharmD, 340B ACE 340B Program Director 7
HRSA-2026-0001-2242Pampa Regional Medical Center / Prime Healthcare2026-04-20T04:00Z23,035 chars
See attached file(s) Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Pampa Regional Medical Center in Pampa, TX, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Pampa Regional Medical Center in Pampa, TX that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Pampa Regional Medical Center in Pampa, TX has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Pampa Regional Medical Center in Pampa, TX has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Pampa Regional Medical Center in Pampa, TX can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Pampa Regional Medical Center in Pampa, TX to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Pampa Regional Medical Center in Pampa, TX understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. In 2025, the hospital generated on average $138,772 in 340B savings per month. The management of the 340B program includes the pharmacy director, rural health clinic manager, 340B program analyst, and 340B program director. Based on the number of additional hours required to implement a 340B rebate model covering up to 25 negotiated-price drugs, this would impose approximately $60,000 to $95,000 in one-time startup costs and $195,000 to $225,000 in recurring annual administrative and operational costs on our organization. Startup costs would include workflow redesign; legal, privacy, and security review of manufacturer or platform terms; interface development and testing among our split-billing and TPA tools, pharmacy claims data, hospital billing systems, and any external rebate platform; staff training; and policy and procedure revisions. Recurring costs would include at least one dedicated rebate or compliance analyst; ongoing pharmacist oversight; IT and revenue-cycle support to extract, validate, and submit claim-level data; rebate reconciliation; monitoring and challenging denials; audit support; vendor and TPA fees; and outside legal or consulting support when disputes arise. These estimates are conservative. They do not include the cash-flow cost of fronting manufacturers, the difference between wholesale or commercial acquisition cost, and the 340B ceiling price while awaiting payment. Based on our current annualized savings, recurring compliance costs alone would absorb roughly 13% to 18% of the value we currently realize from 340B. In practical terms, the rebate model would divert hundreds of thousands of dollars from patient care to administrative compliance. Staffing Impacts Under a Potential 340B Rebate Program. Pampa Regional Medical Center in Pampa, TX does not currently have the staff needed to comply with a Rebate Program. Implementation of a rebate model would require at least one additional full-time employee dedicated to 340B rebate operations, while also forcing current pharmacy, finance, IT, and compliance staff to divert time from patient care and core hospital operations. At a minimum, we anticipate needing: (1) 1.0 FTE 340B or rebate analyst or coordinator to manage data submissions, reconciliations, and denials; (2) 0.25 FTE pharmacist oversight for eligibility, policy, and audit or compliance review; (3) 0.10 to 0.15 FTE IT support for interfaces, security, and reporting; and (4) 0.20 FTE revenue-cycle or HIM or compliance support for claim extraction and validation. We would need at least 90 to 180 days' advance notice to recruit, train, and operationalize these roles and workflows. HRSA's estimate of only 5 hours of additional work per week is a gross underestimate. That figure does not reflect weeks or months of implementation work to build data feeds, map data elements, test file transfers, revise policies, train staff, and negotiate vendor responsibilities. Nor does it Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 reflect the ongoing time required to review claim-level exceptions, track unpaid rebates, challenge denials, perform monthly reconciliations, and prepare for audits. For a hospital our size, the real burden is not a few extra hours; it is a new operational workstream. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Pampa Regional Medical Center in Pampa, TX has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. A rebate model would require modified software, interfaces, and controls across several systems that today were designed around upfront 340B pricing. At minimum, we would need to enhance split-billing and TPA workflows; create or modify outbound feeds from pharmacy claims, contract- pharmacy accumulations, hospital outpatient billing, and charge or administration systems; establish secure submission capability to a manufacturer-selected platform or other rebate portal; build a rebate receivable tracking and reconciliation process; and implement denial-management and audit- trail reporting. We would also need IT security, privacy, and legal review before allowing any external platform access to claim-level information. These infrastructure costs are included in the startup and recurring estimates above, but they are significant in their own right. The most difficult issue is medical claims data. Unlike pharmacy claims data, hospital-administered drug data often reside across the electronic medical record, billing, revenue cycle, and charge capture systems. Our 340B third-party administrator does not have a direct feed into the EMR for all of these data elements. As a result, medical claims support for a rebate model would likely require custom interfaces or manual extraction, validation, and transmission of data that are not currently shared in this manner. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Today, Pampa Regional Medical Center collects and maintains 340B participation data principally through existing purchasing, dispensing, split-billing, and contract-pharmacy workflows, supplemented by internal pharmacy and finance review and third-party administrator tools. Those current processes are designed to identify 340B-eligible utilization, maintain compliance records, and support periodic reconciliation and audit readiness. A rebate model would materially change that by creating a new outward-facing obligation to submit manufacturer-specific claim-level data on a recurring basis for the payment of amounts that are currently realized automatically at the point of purchase. A rebate model would require us to pull data from multiple internal systems, normalize and validate that data, submit it in the format required by each manufacturer or platform, monitor Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 whether rebates were paid, and then investigate and appeal discrepancies. That is fundamentally different from our current process. It is especially burdensome for medical claims, because those data are not routinely transmitted to 340B vendors in the same way as retail pharmacy claims. That concern is not hypothetical. Individual manufacturers have already attempted to impose these burdens outside a uniform HRSA process, including claims-level submission requirements across all Lilly drugs and WAC-first rebate requirements for certain J&J products. A government-sanctioned rebate model would multiply those burdens, not reduce them. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Pampa Regional Medical Center in Pampa, TX to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Payment timing would have a direct and harmful effect on our cash flow. Under the current upfront- discount model, Pampa Regional Medical Center receives 340B pricing when the drug is purchased. Under a rebate model, we would have to pay a higher commercial or wholesale price upfront and wait for the rebate. Using our 340B dashboard data for January 2025 through March 2026, our average monthly 340B savings were approximately $138,772. Even a nominal 10-day delay would therefore tie up roughly $46,000 of working capital, while a 30-day delay would tie up roughly $139,000 - before accounting for denials, partial payments, resubmissions, or disputed claims. o As a small rural critical access hospital, we do not have unlimited cash on hand to finance manufacturers' statutory obligations. A rebate model would put pressure on liquidity, reduce financial flexibility, and create risk around any internal or external cash-balance expectations used for budgeting, lender reporting, or other financial oversight. At a minimum, it would force us to carry a new rebate receivable on our books instead of receiving the discount up front. That is not how our current wholesaler arrangements work, and it is not a trivial change. o We also do not agree with the suggestion that rebates would reliably be paid before wholesaler invoices come due. That assumption depends on complete and accurate submissions, timely manufacturer validation, no system outages, and no disputes. Those conditions cannot be assumed in the real world. A 10-day payment standard is better than no standard, but it is still insufficient because any incomplete submission, denial, or platform issue can quickly push payment beyond that window and leave the hospital financing the gap. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Pampa Regional Medical Center in Pampa, TX will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 These additional costs would reduce the resources that Pampa Regional Medical Center can devote to direct patient care, service-line stability, and access to medications. PRMC is a 25-bed critical access hospital serving approximately 65,000 residents in the Texas Panhandle, employing more than 275 staff members, and providing emergency care, surgical services, cardiology, women's health, urgent care, rehabilitation, wound care, and other essential services close to home. Gray County also has meaningful socioeconomic vulnerability, including a poverty rate of 15.4%, an uninsured rate of 21.9% for people under age 65, and a 65-and-over population of 17.0%. When 340B dollars are diverted to rebate administration, the hospital has less flexibility to support services that are costly but essential in a rural setting. That includes maintaining local access to emergency and specialty care, supporting medication access and uncompensated care efforts, recruiting and retaining staff, refreshing equipment, and sustaining outpatient services that keep patients from traveling farther for care. Uncertainty alone is harmful because it makes it more difficult to plan capital, staffing, and service investments when a portion of expected 340B savings may be delayed, disputed, or lost. Access to drugs also would be affected. HRSA has acknowledged that specialty medicines account for a disproportionate share of 340B purchasing dollars. If PRMC must repeatedly front wholesale or commercial prices for high-cost drugs and wait for rebates, the hospital will be less able to stock or expand access to expensive therapies when needed. That risk is especially acute now that the maximum fair price and Medicare drug negotiation framework expand the potential rebate-model universe to 25 drugs in 2026 and 2027. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Pampa Regional Medical Center in Pampa, TX reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Pampa Regional Medical Center has structured its budgeting and operations around the longstanding upfront discount model, which annualizes to roughly $1.67 million. Those savings are not theoretical. They are embedded in monthly drug-acquisition budgeting, cash-flow forecasting, staffing plans, and the hospital's ability to sustain core services in a rural community. Converting that predictable point-of-purchase discount into a delayed and potentially disputed receivable would Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 undermine the reliability of those financial plans and disrupt settled reliance interests that have developed over decades of 340B administration. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Our experience evaluating a Beacon-style platform confirmed that the platform is not merely a passive mailbox. It would require the hospital to register users, map data elements, submit claim- level information, monitor claim status, reconcile payments, and investigate denials through an external system. That means new workflows, training, help-desk dependency, and a material increase in administrative work even if the platform itself is nominally offered at no charge. Terms and conditions for any such platform must not permit unilateral changes to requirements, secondary use of hospital or patient data, broad disclaimers that shift privacy or security risk to covered entities, or vague standards for denying or delaying rebates. We are also concerned about shifting specifications and customer-service limitations. If data requirements change after implementation or if a platform loads pricing incorrectly, rejects claims without a clear explanation, or provides inadequate turnaround for support tickets, the burden falls back on the hospital. At a minimum, HRSA should require business associate agreements or equivalent data-use protections; advance notice and change control for file specifications; transparent denial codes; appeal rights; complete audit trails; enforceable payment timelines; and vendor service-level commitments. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Pampa Regional Medical Center in Pampa, TX, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Based on the information available to us, we are not aware of a PRMC-specific 340B or MDPNP duplicate-discount problem that would justify replacing the longstanding upfront discount model with a rebate system. We support HRSA's consideration of less burdensome alternatives, especially a neutral third-party clearinghouse. To date, duplicate-discount risk has been managed through existing 340B eligibility controls, split-billing and contract-pharmacy processes, and targeted data Pampa Regional Medical Center | One Medical Plaza, Pampa, TX 79065 | www.prmctx.com 806-665-3721 exchanges where required. Those workflows already demand attention, but they remain far less burdensome than forcing the hospital to pay commercial prices up front and chase rebates across up to 25 negotiated-price drugs. A clearinghouse or other centralized deduplication solution would be materially preferable because it could standardize submissions, limit manufacturer-by-manufacturer data demands, and reduce the number of separate platforms and denial processes that covered entities must manage. A rebate model is not necessary to address duplicate discounts, and in practice it would create new cost, delay, and access problems without solving the underlying operational complexity. For all of these reasons, Pampa Regional Medical Center in Pampa, TX respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA, therefore, should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Pampa Regional Medical Center in Pampa, TX and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Darra M. Edwards, Pharm.D., MSOL/HCM, BCPS, BCCCP Corporate Pharmacy 340B Program Director Prime Healthcare Lean Six Sigma Black Belt 340B Apexus Certified ExpertTM Cc: Jon Gill - Chief Executive Officer, Pampa Regional Medical Center Kris Vigil Chief Nursing Officer, Pampa Regional Medical Center Derek Smith Director of Pharmacy, Pampa Regional Medical Center Imelda Ochoa Group Pharmacy Director, Texas Region, Prime Healthcare
HRSA-2026-0001-2243National Infusion Center Association (NICA)2026-04-20T04:00Z3,382 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 United States Re: Request for Information: 340B Rebate Model Pilot Program (FR Doc. 2026-03042) Director Britton, We are writing in response to HRSAs request for information regarding the potential use of rebates in the 340B Drug Pricing Program (Docket No. HRSA-2026-93942). The National Infusion Center Association (NICA) is an independent non-profit trade associate and accredited standards developer, dedicated to representing non-hospital infusion providers and outpatient care settings where provider-administered biologics and other specialty medications are prepared and administered. Our members care for patients with complex, chronic, and life-threatening conditions, and they are deeply impacted by the growth and lack of transparency around the 340B program. NICA commends HRSA for proposing the rebate model as a thoughtful step in the right direction toward federal 340B reform. The 340B Drug Pricing Program was created to support safety-net providers in serving low-income and underserved populations by expanding access to affordable prescription drugs and health care services. Over time, however, the program has expanded rapidly, and in many cases drifted from its original mission, with benefits too often failing to reach the patients it was designed to help. While the program plays an important role for true safety-net providers, its unchecked growth has created challenges related to diversion, duplicate discounts, data transparency, and oversight. NICA believes that a rebate model will offer a viable mechanism to address long-standing integrity challenges. From the perspective of nonhospital infusion providers, greater transparency in 340B drug utilization and program flows is essential to maintaining patient access and preserving siteofcare choice. NICA has consistently raised concerns that the current state of the 340B program can obscure how savings are generated and whether they are meaningfully passed to patients, particularly as it relates to hospital participation and contract pharmacy arrangements. A rebatebased framework has the potential to provide HRSA with clearer visibility into program operations and outcomes. We agree that improved data collection and reporting could strengthen compliance monitoring and help policymakers better understand how 340B benefits are distributed across different provider types. NICA believes that maintaining the status quo is not a viable longterm strategy for the 340B program. Thoughtful reform is necessary to ensure the program remains aligned with its statutory intent, supports patients who truly need assistance, and avoids market distortions that limit siteofcare options. NICA supports HRSAs continued evaluation of a 340B rebate model through a pilot program, provided the agency proceeds deliberately, incorporates strong safeguards, and remains focused on patient access and program integrity. We appreciate HRSAs willingness to engage with stakeholders and encourage continued dialogue as this process moves forward. Respectfully, Brian Nyquist President & CEO The National Infusion Center Association
HRSA-2026-0001-2244McLeod Health - McLeod Medical Center Dillon2026-04-20T04:00Z55,532 chars
Please see attached letter for responses from McLeod Medical Center Dillon, a 340B Covered Entity within McLeod Health. McLeod Regional Medical Center Cheraw Clarendon Darlington Dillon Loris Seacoast April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by McLeod Health/McLeod Medical Center - Dillon (MCDI), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from MCDI and other Covered Entities. As a 340B-participating DSH hospital, MCDI is a core component of the healthcare safety net in Florence, SC, and the surrounding regional area. This includes communities in South and eastern North Carolina from the Pee Dee, to the Midlands, and coastal areas. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. MCDI participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, MCDIs 340B Program participation enables McLeod Health to commit millions of dollars per year in healthcare resources to the regional community safety net population we serve. We provide charity care and assistance programs for drug therapies and medical services, as well as a completely free cancer clinic. We offer services in greatly underserved and under- resourced areas. These, and many other, services would not be possible without the 340B program. MCDI also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of April 20, 2026 Page 2 self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, MCDI wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, have several questions relating to a potential rebate model we think are vital to have answers to prior to implementation of any kind of rebate program. Second, we provide responses to many of the questions that HRSA presented through the RFI. We understand other Covered Entities may submit letters using a similar outline, but we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 MCDI submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH MCDIS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto MCDI and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to MCDI when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR MCDI TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected MCDI. There are many examples. Data disclosures: While MCDI does not currently have any contract pharmacy relationships, we have recently been affected by the new data reporting policies issued by Eli Lilly, AstraZeneca, Bristol Myers Squibb and Novo Nordisk. These policies require covered entities to submit in- house pharmacy and medical claims data, even for medications administered within the covered entity. MCDI doesnt have any child sites, or contract pharmacies, but in order to continue accessing 340B pricing on drugs from these manufacturers for outpatient areas within the four walls of the covered entity itself, MCDI must spend valuable time and resources on data reporting to 340B ESP Second Site Solutions, a sister company to Beacon, the rebate administrator for the MDPNP. The disclosure of this protected health information and other confidential information to their vendor gives them the right to monetize that data. We know this data is valuable to them, but none of them have reduced their prices below the 340B ceiling price, or offered anything to offset the burden imposed upon us, in exchange for the value the data brings them. Therefore, they are likely over charging us for these drugs every single day. Good-faith inquiries: Manufacturers employees and contractors such as Kalderos have sent us overreaching demands. They send us good faith inquiries for pharmacy and medical claims, 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 claiming our responses will prevent duplicate discounts. Often we find these claims did not even originate from MCDI. We have received requests containing claims that were submitted by completely different hospitals and pharmacies. Claims are also often several years old or for payers who have not been identified by our, or any other state, as Medicaid. They also provide us with incomplete information which makes researching medical claims time intensive and nearly impossible. A rebate model would only further exacerbate these issues. Anticipated rebate denials: MCDI does not have an outpatient pharmacy, but is part of the McLeod Health system which operates 340B and non-340B outpatient pharmacies. Since both pharmacies dispense prescriptions to Medicare Part D patients, they use Beacon and the MTF to manage and reconcile MDPNP claims. Based on their experiences, MCDI has seen that that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. Rebate claims have been denied because manufacturers assert without clear evidence the drug was replenished with 340B inventory. The manufacturers agent, Second Sight Solutions, demands data uploads to prove claims are not 340B. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. In fact, in some instances they have had to submit data multiple times and rebates still get denied. Rebate calculations are also often incorrect and rarely received on time. Instead of 14 days as required by law, most rebates are not received for 20-30 days, and that is provided they are calculated correctly and there is no 340B dispute. MCDI has concerns because if our dispensing pharmacies are having so many issues with the MDPNP, which applies only to Medicare D claims and 10 drugs at the current time, how much worse will it be when 25 drugs are affected across multiple payers and multiple sites of care? While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. Why cant the process for identifying non-340B claims be just as simple as the process for identifying claims as 340B? HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Entity-owned float: Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. MCDI does not have an outpatient pharmacy, but a 340B rebate model would still dramatically expand the float. We would be required to pay the full WAC price up front on all our purchases for rebate eligible drugs, and not just those used for Medicare Part D beneficiaries. How long would we be expected to float this unreasonable increase in drug costs? Enforcement could stop these bad behaviors, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 against a manufacturer for failing to honor the MDPNP price. We are also not aware of any situations where CMS has imposed penalties for late payments. When manufacturers already have their payments in-hand, how can HRSA or MCDI trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO MCDI TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how and what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. MCDI would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. Support staff in Beacon have also repeatedly exhibited knowledge deficits in how 340B eligibility, inventory and replenishment systems work and do not work. Manufacturers should not be allowed to choose or create their own rebate systems. HRSA should develop and make available and independent, non-biased system with meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. HRSA should not allow a manufacturer to place restrictions on the number, location or types of contract pharmacies a covered entity has. If Covered Entities are permitted to register contract pharmacies and HRSA accepts those registrations, manufacturers should be required to honor 340B pricing at all such registered contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? MCDI has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with the current 340B Program. MCDI is not aware of any recent changes in law or funding to think it reasonable that HRSA could reliably enforce compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? Respectfully, a mechanism other than the ADR process would be needed for this. There have only been only six public decisions issued by the ADR since going online in 2021, all of which have favored manufacturers. Likewise, the Beacon Good Faith Inquiry and submission of complaints to the MTF/CMS portal have proven to be equally ineffective. What is the point of submitting a GFI, submitting data to prove a claim is not 340B eligible, only to have the rebate reprocess and the manufacturer falsely claim it is 340B eligible all over again? Is there an acceptable level of noncompliance, and if so, what is it? If manufacturers are not to be held to the same rigorous standards as Covered Entities, then these acceptable levels should be defined and published. If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documented consideration. 6. WHAT STATUTE OR REGULATION PERMITS MCDI TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. In fact, many pharmacy dispensing systems and payment reconciliation systems categorize MDPNP refunds as expected reimbursement, as if from a payer, on a pharmacy drug claim. MCDI would expect 340B rebate claims to be similarly viewed. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. 10 See 45 C.F.R. 160.103. April 20, 2026 Page 7 In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE MCDIS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF MCDI? IF SO, WILL MANUFACTURERS BE EXPECTED TO OFFSET OR REDUCE THE BURDEN PLACED ON MHCL AS A RESULT OF THIS DATA REPORTING REQUIREMENT? IF SO, WOULD THIS TAKE THE FORM OF A REDUCTION IN 340B CEILING PRICE OR SOME OTHER MECHANISM? IF NOT, THEN WHY NOT? One of MCDIs principal concerns with manufacturers campaign against the 340B Program is that their use of our data, which contains our patients information, appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved despite these and other comments, objections and concerns, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to place the security of their patients protected information in jeopardy, by granting these property rights to manufacturers or Second Sight or any third party vendor? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to provide MCDI with appropriate remuneration for its use? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? MCDI believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 8 above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. MCDI urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From MCDIs perspective, there is no clear statutory or policy rationale supporting a 340B rebate program at all. If a 340B rebate model is implemented anyway, there especially is no basis for the extension of a rebate model beyond Medicare Part D. In the 2025 rebate model materials and court filings, HRSA stated the main purpose of the rebate model was to facilitate deduplication of 340B Program purchases and MDPNP dispenses. Especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries, based on HRSAs own statements, there is no reason to consider a 340B rebate program for non-Medicare patients. While Medicare represents a significant segment of MCDIs patient population, we serve many other patients, including patients with no coverage at all. Requiring MCDI to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. Outpatient departments do not bill Medicare Part D for physician-administered drugs. HRSAs 2025 proposal to include drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before April 20, 2026 Page 9 any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO MCDI? IF NOT, WHY NOT? As noted above, MCDI firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. In our health systems experience with good faith inquiries in Beacon for the MDPNP, manufacturers do not disclose how they determine if they believe a claim is 340B eligible, or how they select invoices for data submission to prove otherwise. Invoices are often unrelated to the pharmacy in question, which leads to serious concerns about manufacturer understanding and participation in ANY rebate program. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. MCDI urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON MCDI? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding MCDIto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. MCDI feels that manufacturers should not be able to select their own rebate administrator, especially not one with obvious conflicts of interest, and that derives additional benefits from financial partnerships with the manufacturers. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what April 20, 2026 Page 10 HIPAAs payment exception contemplates.12 The scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. It also allows manufacturers to derive other benefits from the use of our patient data, for which MCDI is not receiving anything to offset our burdens or costs. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. In anticipation of the 2025 rebate program, MCDI signed up for the Beacon platform. We attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. The response we received from Second Sight was that they were not accepting any redlines to their terms, without any explanation or offer for further discussion or compromise. MCDI believes HRSA should select an independent, non-biased rebate administrator, if the decision is made to move forward with a rebate model anyway. If not, then why not? If HRSA does not select the rebate administrator, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 Finding rates for Covered Entities are lower, yet manufacturers point to audit results as justification for 340B restrictions. Why are manufacturers not subject to the same audit rates as Covered Entities, considering such high noncompliance rates? These finding rates should be more than enough justification to insist upon publicly defined guardrails for manufacturers, as well as monitoring tools for covered entities for any proposed rebate program. With manufacturer noncompliance rates so high, MCDI is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 11 HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? MCDI hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also help address financial concerns. MCDI encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experiences and contribute to the development of a government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. MCDI maintains auditable purchasing records, conducts routine internal reconciliations, works with external auditors and consultants, and utilizes third-party administrators (TPAs) to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. MCDI takes its participation in the 340B program very seriously. We are a small DSH with only 79 acute beds, but we currently spend about $150,000 annually to compliantly operate our 340B program. While this figure comprises mostly predictable, baseline costs of operating the 340B 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 12 program, it is subject to periodic increases. Many vendor and software contracts include inflater clauses that allow for periodic rate increases over specified time intervals to keep up with inflationary rates. Most contract negotiations result in increased fees each term, and of course FTE costs generally rise by inflation or cost of living increases every year. There are other costs often incurred by 340B programs that are difficult to estimate or predict that are not included in this figure. These are typically caused by changes within the healthcare system. Some of these costs are one-time charges, but many can also have an ongoing component. Examples include: 1) software changes, including additions, subtractions, updates, and upgrades; 2) electronic health record changes; 3) technology advancements; 4) additional compliance auditing costs; 5) additional vendor fees; and 6) new vendors contracts. Also not included in this figure are additional, partial FTE costs associated with program operations when input, assistance and guidance is needed from non-dedicated departments and senior leadership. Other departments include Finance, Accounting, Billing, Information Systems and Technology, Pharmacy, Legal, Procurement, Nursing, clinic staff (including physicians and other prescribing providers), Nursing, and Case Management. ]. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Based on the current workload and processes used by other entities within our health system to manage the MDPNP, we estimate total operating costs are likely to increase by $30,000-$50,000 annually. This is on top of the increased up front float drug spend we will be subject to Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require MCDI to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, conducting internal audits and preparing for potential audits. A rebate model would require entirely new operational April 20, 2026 Page 13 functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. While MCDI is not currently affected by the MDPNP, if a rebate program were to be implemented and assuming the chosen rebate administrator continued to be Beacon and Second Sight Solutions, we could expect to experience many of the same challenges our other hospitals and health system pharmacies are experiencing now. They currently spend 16-20 hours a week on Medicare Part D claims for just 10 drugs, and that is not enough to keep up with the workload of managing and reconciling rebates. A rebate program that would require data submission, include all payers, sites of care and 25 drugs would only further increase the staffing requirements. MCDI is currently reporting medical claims to 340B ESP as a result of Eli Lillys new, more restrictive 340B policies. We are spending at least 8 hours a week on these new data reporting requirements. This number will increase as additional manufacturer policies from Novo Nordisk, Bristol Myers Squibb and AstraZeneca go into effect. Based on the experiences of our sister hospitals as well as our own with medical claims submission, we estimate a new rebate program would require the addition of at least 0.5 FTE to properly manage. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Most Covered Entities, including MCDI, contract with TPAs to do exactly these very things. Mechanisms already exist, but those systems were developed for upfront discounts and virtual replenishment inventory systems. In implementing a rebate program that completely changes how the program has operated for the last several decades, resources and money will need to be spent on new product and workflow/process development. This really should not be necessary since a rebate program is not the only way to manage deduplication. MCDI is not certain if we would have been able to comply with the data reporting requirements of the 2025 rebate program, especially for medical claims. Manufacturer and vendor webinars were confusing, inconsistent and incomplete. They often did not have answers to questions from Covered Entities. As a result, evaluating and estimating accurate costs is nearly impossible. Our TPA has been developing a software solution to assist with data reporting and rebate management. Its a new system, requires a contract amendment and comes with additional costs. If we chose to contract for this solution for the 2025 rebate program affecting the initial 10 IRA drugs, it would have doubled our base TPA fees for the year. It is impossible to predict or estimate if this solution would reduce the number of FTEs necessary for rebate management. Because this is new technology, staff must go through training and learn how to use the system. There is no way to know how efficient the system would be. All information and demonstrations surrounding the solution were completed in test environments. Even though our TPA is offering a software solution, we still expect there to be gaps in the data. Many covered entities do not include their April 20, 2026 Page 14 clean sites in TPA data feeds. Rebate solutions cant assist with data reporting if the data doesnt exist in the system. If new sites must be implemented or data feeds need to be updated, MCDI would have to go through new implementation and be subjected to one-time and ongoing costs. Costs can range for $1000 upwards of over $100,000 depending on the type of charge, complexity of the implementation, and actual service being implemented. In addition, while manufacturers claim that Covered Entities already have the data they are asking for, that is not the case for MCDI. TPAs do not all have the same data requirements. Our data feeds do not contain information like claim line numbers. Updating data feeds to contain additional information comes with additional TPA charges and expenditures in internal IT resources. These can range from $2,500-$10,000 per data feed. If manufacturers are allowed to dictate the terms of their participation in a rebate program, including specifying the data fields required, they could expose Covered Entities to multiple additional costs. Our state recently published new billing guidelines for Medicaid FFS patients. One of the new requirements requires the submission of the actual acquisition cost on the claim we send to the state. Implementation of a rebate program would complicate this process and expose MCDI to additional costs and financial losses. What cost would we report on the claim? What happens if we report the 340B cost but our rebate is denied? We have not yet received guidance from the state on how to handle these and other potential situation that may arise. How would we operationalize the processes needed to report the correct cost and then rebill later if permitted? In this day and age, with all the data breaches and security concerns we all have regarding our own personal data and information, data governance protocols to ensure accuracy, security and proper transmission are vital in the healthcare space. McLeod Health may need to invest additional resources in technology costs to make sure we are able to handle new and increased security challenges, especially as additional third parties are introduced to the system with little to no oversight. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, MCDI purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Having to pay the higher WAC costs and float them while waiting to receive 340B rebates will lead to cash flow disruptions and may result in difficulty paying wholesaler invoices. Depending on how long it actually takes to receive rebates, if we are not able to pay our invoices in time, we could lose our prompt pay discount. This would increase drug costs for all pharmacies within our health system and not just those participating in the 340B program. There are additional negative impacts that go beyond the increased upfront and invoice costs. We know that with the MDPNP payments are difficult to reconcile. Currently our health system only has two entities affected by the MDPNP, but when additional covered entities like MCDI are added to the Beacon rebate system, the payments will increase and become even more difficult to identify April 20, 2026 Page 15 and reconcile. This will cause even more workload and confusion with multiple departments and staff involved in budgeting, month end processes and accounting. Currently we are able to offer financial assistance to patients on an up front basis due to availability of up front 340B drug discounts. In moving to a rebate program, we would likely have to move to a retrospective financial assistance program based on receipt of expected 340B rebates. This would have negative impacts on patient care and outcomes. Many patients will choose not to receive care or medications if they cant get it at reduced prices up front. Financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. MCDI is a small hospital and tries to keep drug inventory low to minimize waste and alleviate budgetary constraints. Paying thousands of dollars for a high-cost medication at the full wholesale acquisition cost would be severely detrimental to us and increase liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. We contract with and maintain subscriptions with TPAs to assist with compliance and inventory tracking so that MCDI is able to use accumulations to obtain medications at the best price for our patients. We cannot afford to pay thousands of dollars up front for a medication that we might not fully dispense for a year or more. 3. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, MCDI will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. For examples of such burdens and uncertainly, you only have to look to the current MDPNP, and review the complaints submitted to CMS concerning the MDPNP. Entities also voice their concerns on the Pharmacy/Stakeholder CMS calls. Many covered entities, including other hospitals in our health system, continue to experience inaccurate rebate calculations, lack of transparency, failure to receive rebates, let alone within the 14 days required by law, challenges with rebate reconciliation and tracking, etc. These are the challenges we are experiencing with just 10 drugs at dispensing pharmacies. If this is expanded to 25 drugs, all payers and multiple sites of care, the impacts related to rebate denials and reconciliation will increase exponentially. Ideally, MCDI would prefer that if HRSA moves forward with a rebate program, manufacturers should be prohibited from denying ANY rebates for 340B covered entities. This, in combination with strict enforcement of timely rebate payments, would help reduce some administrative burden and costs. April 20, 2026 Page 16 4. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, MCDI would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. Staff would need additional training to learn new skills to allow them to complete these new tasks. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in MCDIs operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. Medical claims are particularly problematic. These claims cannot be filed until after a patient discharges or the encounter series is closed. Claims take a minimum of 30 days after an encounter has been closed to be submitted, but can take longer. Many manufacturer rebate policies in the 2025 model required data submission within 45 days of dispense. It will not always be possible to submit data within that 45 day window. What would happen if we submitted medical claims data 46, 47 or even 60 days after the date of dispense? How are we to handle claims that are rebilled with patient class changes weeks to months after an encounter is closed? To our understanding, those would be non-conforming claims and would be denied rebates. How was that window determined and why was it approved? HRSA is aware of the difference in claims submission between pharmacy and medical claims. How could 45 days be considered reasonable or acceptable? Claims for clinic administered medications present unique challenges as well, and require additional time for data collection and processing. Most clinics are considered clean sites and covered entities may not include clinic data in the data feeds sent to TPAs. So contrary to manufacturer claims, the data is not already there an available. Getting the required data out of the electronic health record is not a simple task either. It would require time and resources from Information and Technology Systems to build new reports and processes in human readable formats. Claim elements are different and do not easily match up with required data fields for example, clinic claims typically bill based on procedure codes instead of drug codes. These timing and data differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions, and would ultimately lose 340B savings as a result. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on MCDI and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. April 20, 2026 Page 17 We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Christian Soura Hattie Hyman, PharmD SVP/Chief Financial Office Pharmacy 340B Manager 340B Authorizing Official 340B Primary Contact McLeod Health McLeod Health Mcleod Medical Center Dillon McLeod Medical Center - Dillon April 20, 2026 Page 18 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 19 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 20 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2245Cornerstone Care, Inc.2026-04-20T04:00Z48,789 chars
As Chief Executive Officer of Cornerstone Care, a nonprofit Community Health Center in southwest PA, I am writing to strongly urge HRSA to exempt Community Health Centers (CHCs) from participation in any rebate-based pilot. The 340B program is foundational to CHCs ability to serve medically underserved patients by reinvesting up front drug discounts directly into patient care. Replacing this structure with a retrospective rebate model would undermine congressional intent and destabilize safety net providers. The 340B program was designed to help safety net providers stretch scarce resources, but a rebate model instead loans our scarce federal resources to manufacturers. The rebate pilot is just the latest example of the efforts by the pharmaceutical industry to shift control of the 340B program from HRSA to the manufacturers, and the result is a reneging on the original intent and agreement of the program. The rebate buts undue burden on non-profit healthcare providers that are already resource challenged. There are more simple, less costly methods in this day and age. For example, a clearinghouse model. The attached letter and brief details the projected risks and impacts of a 340B Rebate Model Pilot to CHCs nationwide and Cornerstone Care specifically. It also lays out possible alternatives that preserve the upfront 340B discount, such as a national, neutral claims clearinghouse approach. See attached letter and brief for full comments. April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Cornerstone Care, Inc., thank you for the opportunity to comment on HRSAs proposed 340B Rebate Model Pilot Program and for extending the comment deadline. After careful review, Cornerstone Care strongly urges HRSA to exempt Community Health Centers (CHCs) from participation in any rebate-based pilot. The 340B program is foundational to CHCs ability to serve medically underserved patients by reinvesting upfront drug discounts directly into patient care. Replacing this structure with a retrospective rebate model would undermine congressional intent and destabilize safetynet providers. The 340B program was designed to help safety net providers stretch scarce resources, but a rebate model instead loans our scarce federal resources to manufacturers. The rebate pilot is just the latest example of the efforts by the pharmaceutical industry to shift control of the 340B program from HRSA to the manufacturers, and the result is a reneging on the original intent and agreement of the program. Key concerns include: Immediate restriction of patient access Severe cashflow and financial risk for community health centers Unnecessary administrative and IT burden on already thinly-stretched resources Threats to essential services like our Mobile Unit, our food and nutrition programs in schools, our mental health and primary care expansions, and more Threatens our network of contract pharmacies comprising 13,000 square miles of service area, much of it rural 2 The following brief details the projected risks and impacts of a 340B Rebate Model Pilot to CHCs nationwide and Cornerstone Care specifically. It also lays out possible alternatives that preserve the up-front 340B discount, such as a national, neutral claims-clearinghouse approach. Thank you again for the opportunity to comment. We welcome continued engagement on this critical issue and are available should you have any questions. Sincerely, Richard T. Rinehart Chief Executive Officer 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc.
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Please see attached letter. " PIGGOTT IL" HEALTH SYSTEM April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Infarmation: 340B Rebate Model Pilot Program, HHS Docket No. HRSA - 2026-03042 Dear Administrator Engels: Piggott Health System is a Critical Access Hospital located in Piggott, Arkansas, and has participated in the 340B program since April 2014. The twelve years we have spent in this program have allowed us to keep medications within reach for the patients who come to us. The rebate model, as proposed, would take that apart. This letter is short. What I have to say is not complicated. The stakes are what matter, and the stakes are our patients. What This Would Mean for Our Patients Under the current 340B program, when a patient walks into one of our contract pharmacies with a prescription for one of the drugs on the Medicare Drug Price Negotiation Program list insulin, an SGLT2 inhibitor, a medication for heart failure, a chronic condition drug that has to be taken every daythe price they see at the counter reflects the 340B savings Piggott Health System passes through. They can afford to fill the prescription. They come back next month to refill it. That is how chronic disease management works in a rural community like ours. Under a rebate model, that arithmetic changes. Piggott Health System would acquire the drug at Wholesale Acquisition Cost, and the 340B benefit would be reconciled after the fact. We appreciate that HRSA has attempted to address this by proposing an ad hoc ceiling price file for rebate-covered drugs, but our third-party administrators were not in a position to operationalize that file in the few working days of lead time before the planned 2026 start. With that being the case, three outcomes are possible and none are acceptable. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. The patient pays the WAC-priced copay and never returns for a refill. Or the pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay, and Piggott Health System floats the cost until rebate. The first two outcomes mean patients going without medication. For the drugs on the MFP list, going without medication is not a minor inconvenience. It is interrupted insulin. It is interrupted heart failure therapy. It is interrupted chronic disease management. These are the conditions from which emergency department visits, hospitalizations, and avoidable complications emerge when maintenance therapy is disrupted. The third outcomePiggott Health System absorbing the costis not sustainable at our scale for any length of time. At a Critical Access Hospital, there is no reserve from which to subsidize the statutory 340B discount indefinitely. We would be forced to reduce services. Either way, the patient bears the consequence. What the Numbers Show Applying the proposed rebate mechanics to our 2025 claims data for the drugs selected under the Medicare Drug Price Negotiation Program, and recognizing that the drugs added to the MFP list in 2026 remain in effect alongside the drugs added in 2027, Piggott Health System's current 340B acquisition cost for the full set of selected drugs is approximately $219,000. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on those same drugs rises to approximately $1,324,000. The annual capital we would have to float to drug manufacturers totals approximately $1.10 million. The selected drugs represent 58.4% of our total 340B programmore than half of our 340B dollars sitting under the rebate mechanism. If HRSA were to extend the rebate mechanism to the full 340B program, our combined annual upfront capital requirement would rise to approximately $1.4 million on an ongoing basis. Separately, the Maximum Fair Price has already eliminated 15% of our would-be 340B savings on these drugs in the first quarter of 2026 alone, before any rebate mechanism has been implemented. Why the Rebate Mechanics Fail Piggott Health System dispenses 340B medications exclusively through a contract pharmacy network. The current upfront discount model is operable because the 340B price is known at the point of purchase. Under a rebate model, that price becomes a future event contingent on a manufacturer's rebate decision. Three operational realities make that substitution unworkable. Our wholesaler arrangements are configured around 340B acquisition pricing, not WAC; ahead of the 2026 pilot, our wholesalers were not prepared to extend the credit limits needed on our 340B accounts, and when credit limits are exceeded, wholesalers stop fulfilling drug orders. The reconciliation infrastructure is inadequate; the third-party vendor interface selected by manufacturers for the originally planned 2026 rebate pilot cited HIPAA compliance as justification for not retaining prescription numbers on claims, leaving no reliable way to trace, dispute, or recover denied rebate claims. And the rebate model hands manufacturerswho have spent the past five years pursuing unilateral policies restricting 340B pricing at contract pharmacies in litigation that remains unresolvedthe authority to deny rebate claims on the very dispenses they have been trying to exclude. We have no reasonable basis on which to plan for good-faith claim processing under those conditions. Piggott Health System designed its pharmacy operations, wholesaler arrangements, and financial planning around the upfront discount model that has govemed the 340B program since its inception. A shift to a rebate mechanism would disrupt those settled reliance interests, and no identified problem with the upfront discount model justifies the change. The workforce burden is also real: we estimate approximately 0.25 additional FTE for reconciliation, denial tracking, and dispute worksubstantially greater than HRSA's five-hours-per-week estimate. The Alternatives The deduplication objective is legitimate. A manufacturer is not obligated to pay both the 340B discount and the Maximum Fair Price rebate on the same unit of drug. But the rebate model is not the least burdensome way to achieve deduplication. A neutral, federally administered claims clearinghouse would accomplish the same objective without placing drug manufacturers in the role of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital to manufacturers, and without creating the access problems described above. CMS has already begun building the foundation through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. Bipartisan proposals, including the PROTECT 340B Act and the SUSTAIN 340B Act, point in the same direction. Alternatively, manufacturers are already permitted to require 340B claims data from covered entities as a condition of 340B access; that data could be used directly for MFP/340B deduplication. Request Piggott Health System respectfully asks HRSA to abandon the 340B Rebate Model Pilot Program and pursue deduplication through a neutral claims clearinghouse or direct use of the manufacturer claims data already being collected. I ask, on behalf of the patients we serve, that the agency reconsider. Thank you for your consideration. Sincerely, James Magee Executive Director Piggott Health System Piggott, Arkansas 340B ID: CAH041330-00
HRSA-2026-0001-2247McLeod Health Clarendon2026-04-20T04:00Z55,725 chars
Please see attached comments for McLeod Health Clarendon from McLeod Health. McLeod Regional Medical Center Cheraw Clarendon Darlington Dillon Loris Seacoast April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by McLeod Health/McLeod Health Clarendon (MHCL), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from MHCL and other Covered Entities. As a 340B-participating DSH hospital, MHCL is a core component of the healthcare safety net in Florence, SC, and the surrounding regional area. This includes communities in South and eastern North Carolina from the Pee Dee, to the Midlands, and coastal areas. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. MHCL participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, MHCLs 340B Program participation enables McLeod Health to commit millions of dollars per year in healthcare resources to the regional community safety net population we serve. We provide charity care and assistance programs for drug therapies and medical services, as well as a completely free cancer clinic. We offer services in greatly underserved and under- resourced areas. These, and many other, services would not be possible without the 340B program. MHCL also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of April 20, 2026 Page 2 self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, MHCL wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 MHCL submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH MHCLS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto MHCL and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to MHCL when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR MHCL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected MHCL. There are many examples. Data disclosures: MHCL does not currently have any contract pharmacy relationships. Shortly after the hospital became a 340B covered entity, the manufacturers began restricting contract pharmacy. Our patients utilize multiple pharmacies in the area. Contract pharmacy arrangements with local pharmacy partners would not only benefit the patient populations we serve but also help the pharmacies themselves by providing them with extra revenue to help offset losses caused by PBMs, the MDPNP and other reductions in reimbursement. However, we have never been able to engage in contract pharmacy because of the manufacturer restrictions. Now, new policies issued by Eli Lilly, AstraZeneca, Bristol Myers Squibb and Novo Nordisk are placing even more restrictions on 340B, and not just at contract pharmacies. These policies require covered entities to submit in-house pharmacy and medical claims data, even for medications administered within the covered entity. MHCL doesnt have any child sites, or contract pharmacies, but in order to continue accessing 340B pricing on drugs from these manufacturers for outpatient areas within the four walls of the covered entity itself, MHCL must spend valuable time and resources on data reporting to 340B ESP Second Site Solutions, a sister company to the Beacon platform being used to administer MDPNP rebates. The disclosure of this protected health information and other confidential information to their vendor gives them the right to monetize that data. We know this 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 data is valuable to them, but none of them have reduced their prices below the 340B ceiling price, or offered anything to offset the burden imposed upon us, in exchange for the value the data brings them. Therefore, they are likely over charging us for these drugs every single day. Good-faith inquiries: Manufacturers employees and contractors such as Kalderos have sent us overreaching demands. They send us good faith inquiries for pharmacy and medical claims, claiming our responses will prevent duplicate discounts. Often these claims were not even filed by MHCL. We have received requests containing claims from completely different hospitals and pharmacies. Claims are also often several years old or for payers who have not been identified by our, or any other state, as Medicaid. They also provide us with incomplete information which makes researching medical claims time intensive and nearly impossible. A rebate model would only further exacerbate these issues. Anticipated rebate denials: MHCL does not have an outpatient pharmacy, but is part of the McLeod Health system which operates 340B and non-340B outpatient pharmacies fill prescriptions for Medicare Part D claims, and are therefore part of the MDPNP. Based on the experiences of other hospitals and pharmacies within our health system, MHCL has seen that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. Rebate claims have been denied or are incorrectly calculated. The manufacturers agent, Second Sight Solutions, demands data uploads to prove claims are not 340B. This is a cumbersome, time- consuming, and frankly futile process that has not resulted in any material and efficient resolution. In some instances they have had to submit data multiple times only for rebate claims to be denied again. MDPNP rebates are also not getting paid within the 14 days required by law, even at the non-340B outpatient pharmacy. Actual rebate payment times, when received, are around 20-30 days. MHCL has concerns because if our other hospitals are having so many issues with the MDPNP, which applies only to Medicare D claims and 10 drugs at the current time, how much worse will it be when 25 drugs are affected across multiple payers and multiple sites of care? While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, the process to prove a claim is not 340B is drastically more complicated and cumbersome than the process they developed for deduplication identified by 340B covered entities. When the manufacturer mistakenly pays an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. Why can the process for identifying a claim as NOT 340B not be just as easy? HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Entity-owned pharmacy float: Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but for all purchases for rebate drugs, even when purchased to be 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 administered within outpatient departments of the hospital or in clinics. How long would we be expected to float this unreasonable increase in drug costs? Enforcement could stop these bad behaviors, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. We are also not aware of any situations where CMS has imposed penalties for late payments. When manufacturers already have their payments in-hand, how can HRSA or MHCL trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO MHCL TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how and what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. MHCL would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. Support staff in Beacon have also repeatedly exhibited knowledge deficits in how 340B eligibility and inventory systems work and do not work. Manufacturers should not be allowed to choose or create their own rebate systems. HRSA should develop and make available an independent, non-biased system with meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. HRSA should not allow a manufacturer to place restrictions on the number, location or types of contract pharmacies a covered entity has. If Covered Entities are 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 permitted to register contract pharmacies and HRSA accepts those registrations, manufacturers should be required to honor 340B pricing at all such registered contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? MHCL has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with the current 340B Program. MHCL is not aware of any recent changes in law or funding to think it reasonable that HRSA could reliably enforce compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? Respectfully, a mechanism other than the ADR process would be needed for this. There have been only six public ADR decisions since going online in 2021, all of which have favored manufacturers. Likewise, the Beacon Good Faith Inquiry and submission of complaints to the MTF/CMS portal have proven to be equally ineffective. Is there an acceptable level of noncompliance, and if so, what is it? If manufacturers are not to be held to the same rigorous standards as Covered Entities, then these acceptable levels should be defined and published. If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS MHCL TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. Many pharmacy dispensing systems and payment reconciliation systems include MDPNP refunds as expected reimbursement, as if from a payer, on a pharmacy drug claim. How could 340B rebate claims be any different? We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if 10 See 45 C.F.R. 160.103. April 20, 2026 Page 7 manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE MHCLS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF MHCL? IF SO, WILL MANUFACTURERS BE EXPECTED TO OFFSET OR REDUCE THE BURDEN PLACED ON MHCL AS A RESULT OF THIS DATA REPORTING REQUIREMENT? IF SO, WOULD THIS TAKE THE FORM OF A REDUCTION IN 340B CEILING PRICE, OR SOME OTHER MECHANISM? IF NOT, THEN WHY NOT? One of MHCLs principal concerns with manufacturers campaign against the 340B Program is that their use of our data, which contains our patients information, appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Thus, manufacturers profit off the use of our data. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved despite these and other comments, objections and concerns, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to provide their patients protected data to one or more third parties, potentially putting the security of this data at risk, and grant these property rights to manufacturers or Second Sight, or to any other third-party vendor? Moreover, to the extent the data has demonstrable value to manufacturers, how is that value assessed, and are manufacturers not required to provide MHCL with appropriate remuneration for its use? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? MHCL believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 8 above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. What has changed since then? Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. MHCL urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From MHCLs perspective, there is no clear statutory or policy rationale supporting a 340B rebate program at all. If a 340B rebate model is implemented anyway, there especially is no basis for the extension of a rebate model beyond Medicare Part D. In the 2025 rebate model materials and court filings, HRSA stated the main purpose of the rebate model was to facilitate deduplication of 340B Program purchases and MDPNP dispenses. Especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries, based on HRSAs own statements, there is no reason to consider a 340B rebate program for non-Medicare patients. While Medicare represents a significant segment of MHCLs patient population, we serve many other patients, including patients with no coverage at all. Requiring MHCL to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. Outpatient departments of 340B eligible hospitals do not bill Medicare Part D for physician- administered drugs. HRSAs 2025 proposal to include drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and April 20, 2026 Page 9 administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO MHCL? IF NOT, WHY NOT? As noted above, MHCL firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. In our health systems experience with good faith inquiries in Beacon for the MDPNP, manufacturers do not disclose how they determine if they believe a claim is 340B eligible, or how they select invoices for data submission to prove otherwise. Invoices are often unrelated to the pharmacy in question, which leads to serious concerns about manufacturer understanding and participation in ANY rebate program. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. MHCL urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON MHCL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding MHCLto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. MHCL feels that manufacturers should not be able to select their own rebate administrator, especially not one with obvious conflicts of interest, and that derives additional benefits from financial partnerships with the manufacturers. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what April 20, 2026 Page 10 HIPAAs payment exception contemplates.12 The scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. It also allows manufacturers to derive other benefits from the use of our patient data, for which MHCL is not receiving any compensation. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. In anticipation of the 2025 rebate program, MHCL signed up for the Beacon platform. We attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. The response we received from Second Sight was that they were not accepting any redlines to their terms, without any explanation or offer for further discussion or compromise. MHCL believes HRSA should select an independent, non-biased rebate administrator, if the decision is made to move forward with a rebate model anyway. If not, then why not? If HRSA does not select the rebate administrator, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 Finding rates for Covered Entities are lower, yet manufacturers point to audit results as justification for 340B restrictions. Why are manufacturers not subject to the same audit rates as Covered Entities, considering such high noncompliance rates? These finding rates should be more than enough justification to insist upon publicly defined guardrails for manufacturers, as well as monitoring tools for covered entities for any proposed rebate program. With manufacturer noncompliance rates so high, MHCL is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 11 In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audits. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? MHCL hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MDPNP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also help address financial concerns. MHCL encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. MHCL maintains auditable purchasing records, conducts routine internal reconciliations, works with external auditors and consultants, and utilizes third-party administrators (TPAs) to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. MHCL takes its participation in the 340B program very seriously and devotes significant time and resources to program compliance. We are a small DSH, but we currently spend about $130,000 annually to compliantly operate our 340B program. While this figure comprises mostly predictable, baseline costs of operating the 340B program, it is subject to periodic increases. Many 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 12 vendor and software contracts include inflater clauses that allow for periodic rate increases over specified time intervals to keep up with inflationary rates. Most contracts are also subject to renegotiation of fees at the conclusion of the term. FTE costs generally rise yearly with inflation or cost of living increases. Not included in this figure are additional costs often incurred to accommodate ongoing changes within the healthcare system. Some of these costs are one-time charges, but many can also have an ongoing component. Examples include: 1) software changes, including additions, subtractions, updates, and upgrades; 2) electronic health record changes; 3) technology advancements; 4) additional compliance auditing costs; 5) additional vendor fees; and 6) new vendors contracts. Also not included in this figure are additional, partial FTE costs associated with program operations when input, assistance and guidance is needed from non-dedicated departments and hospital leadership. Other departments include Finance, Accounting, Billing, Information Systems and Technology, Pharmacy, Legal, Procurement, Nursing, clinic staff (including physicians and other prescribing providers), Nursing, and Case Management. ]. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Based on the current workload and processes used by other hospitals within our health system to manage the MDPNP, we estimate total operating costs are likely to increase by $30,000-$50,000 annually. These costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require MHCL to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, conducting internal audits and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. April 20, 2026 Page 13 While MHCL does not have an outpatient pharmacy or contract pharmacies that participate in the MDPNP, if a rebate program were to be implemented and the chosen rebate administrator was Second Sight Solutions/Beacon, we could expect to experience many of the same challenges our other hospitals and health system pharmacies are experiencing now. They currently spend 16-20 hours a week on Medicare Part D claims for just 10 drugs, and that is not enough to keep up with the workload of managing and reconciling rebates. A rebate program that would require data submission, include all payers, sites of care and 25 drugs would only further increase the staffing requirements. MHCL is currently reporting medical claims to 340B ESP as a result of Eli Lillys new, more restrictive 340B policy. We are spending at least 8 hours a week on data reporting activities. This number will increase as additional manufacturer policies from Novo Nordisk, Bristom Myers Squibb and AstraZeneca go into effect. Based on the experiences of the other entities within our health system, as well as our own with medical claims submission, we estimate a new rebate program would require the addition of at least 0.5 FTE to properly manage. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Most Covered Entities, including MHCL, contract with TPAs to do exactly these very things. Mechanisms already exist, but those systems were developed for upfront discounts and virtual replenishment inventory systems. In implementing a rebate program that completely changes how the program has operated for decades, resources and money will need to be spent on new product and workflow/process development. This really should not be necessary since a rebate program is not the only way to manage deduplication. MHCL is not certain if we would have been able to comply with the data reporting requirements of the 2025 rebate program. Despite not having an outpatient or contract pharmacies, the data submission requirements of a rebate model will require significant resources. Medical claims submission is particularly problematic. Manufacturer and vendor webinars leading up to the 2025 pilot program were confusing, inconsistent and incomplete. They often did not have answers to questions from Covered Entities. As a result, evaluating and estimating accurate costs is nearly impossible. Our TPA has been developing a software solution to assist with data reporting and rebate management. Its a new system, requires a contract amendment and comes with additional costs. If we had chosen to contract for this solution for the 2025 rebate program affecting the initial 10 IRA drugs, it would have more than doubled our base TPA fees for the year. It is impossible to predict or estimate if this solution would reduce the number of FTEs necessary for rebate management. Because this is new technology, staff must go through training and learn how to use the system. There is no way to know how efficient the system would be. All information and demonstrations surrounding the solution were completed in test environments. Even though our TPA offers a rebate solution, there are still data gaps that need addressed. Data from clean sites is not typically included in TPA data feeds. And while manufacturers claim that Covered Entities April 20, 2026 Page 14 already have the data they are asking for, that is not the case for MHCL. TPAs do not all have the same data requirements. Our data feeds do not contain information like claim line numbers. Updating data feeds to contain additional information comes with additional TPA charges and expenditures in internal IT resources. These can range from $2,500-$10,000 per data feed. If manufacturers are allowed to dictate the terms of their participation in a rebate program, including specifying the data fields required, they could expose Covered Entities to multiple additional costs. Our state recently published new billing guidelines for Medicaid FFS patients. One of the new requirements requires the submission of the actual acquisition cost on the claims we send to the state. Implementation of a rebate program would complicate this process and expose MHCL to additional costs and financial losses. Our primary question involves what cost to place on the claims for drugs that we expect to receive a 340B rebate for, since we initially paid WAC for the drug. Other questions include: How are we to recoup lost payments in the event we report a 340B acquisition cost, but our 340B rebate is denied? Will we be able to rebill at the higher cost? How will we operationalize that process? We will need to engage the state in discussions on these and other concerns. Additional billing FTEs may be necessary to do the work required to rebill these claims with a different acquisition cost. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, MHCL purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Having to pay the higher WAC costs and float them while waiting to receive 340B rebates will lead to cash flow disruptions and may result in difficulty paying wholesaler invoices. Depending on how long it actually takes to receive rebates, if we are not able to pay our invoices in time, we could lose our prompt pay discount. This would increase drug costs for all pharmacies within our health system and not just those participating in the 340B program. There are additional negative impacts that go beyond the increased upfront and invoice costs. We know that MDPNP payments are difficult to reconcile, based on the experiences of other entities within our health system. Currently we have two entities affected by the MDPNP, but when additional covered entities like MHCL are added to the Beacon rebate system, the payments will increase and become even more difficult to identify and reconcile. This will cause even more workload and confusion with multiple departments and staff involved in budgeting, month end processes and accounting. Currently we are able to offer financial assistance to patients on an up front basis due to availability of up front 340B drug discounts. In moving to a rebate program, we would likely April 20, 2026 Page 15 have to move to a retrospective financial assistance program based on receipt of expected 340B rebates. This would have negative impacts on patient care and outcomes. Many patients will choose not to receive care or medications if they cant get it at reduced prices up front. Financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. MHCL could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. We contract and maintain subscriptions with a TPA to assist with compliance and inventory tracking so that MHCL is able to use accumulations to keep medication costs down. This enables us to provide timely care to our patients. We cannot afford to pay thousands of dollars up front for a medication that we might not fully dispense for a year or more. 3. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, MHCL will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. For examples of such burdens and uncertainly, you have only to look at the current MDPNP, review complaints submitted to CMS via the MTF, or attend a Pharmacy/Stakeholder CMS call on the MDPNP/MTF. Multiple covered entities, including other dispensing entities in our health system, continue to experience inaccurate rebate calculations, lack of transparency, failure to receive rebates, late rebates, challenges with rebate reconciliation and tracking, etc. The MTF Help Desk is inundated with complaints and issues and these stakeholders also voice these concerns on the calls. These are the challenges we are experiencing with just 10 drugs at dispensing pharmacies for Medicare Part D payers only. If this is expanded to 25 drugs, all payers and multiple sites of care, the impacts related to rebate denials and reconciliation will increase exponentially. Ideally, MHCL would prefer that if HRSA moves forward with a rebate program, manufacturers should be prohibited from denying ANY rebates for 340B covered entities. This, in combination with strict enforcement of timely rebate payments, would help reduce some administrative burden and costs. April 20, 2026 Page 16 4. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, MHCL would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. Staff would need additional training to learn new skills to allow them to complete these new tasks. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in MHCLs operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. Medical claims present particularly difficult challenges. These claims cannot be filed until after a patient discharges or the encounter series is closed. Claims take a minimum of 30 days after an encounter has been closed to be submitted, but can take longer. Medical claims are also often subject to rebilling with patient class changes, different payers, insurance requirements, modifiers, etc. Many manufacturer rebate policies in the 2025 model required data submission within 45 days of dispense. It will not always be possible to submit data within that 45-day window. What would happen if we submitted medical claims data 46, 47 or even 60 days after the date of dispense? How would we handle situations where patient class changed weeks to months later and a previously reported claim needed to be reversed, or a new claim reported, outside of the 45-day dispense window? To our understanding, those would be non-conforming claims and would be denied rebates. How was that window determined and why was it approved? HRSA is aware of the difference in claims submission between pharmacy and medical claims. How could 45 days be considered reasonable or acceptable? Claims for clinic administered medications present additional challenges as well and require additional time for data collection and processing. Most clinics are considered clean sites and are not implemented in TPAs, so the data doesnt exist in the TPA, contrary to manufacturer claims. Getting the required data out of the electronic health record is not a simple task either. It would require time and resources from Information and Technology Systems to build new reports and processes in human readable formats. Claim elements are different and do not easily match up with required data fields for example, clinic claims typically bill based on procedure codes instead of drug codes. These timing and data differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. We likely would see a decrease in 340B savings caused by the inability to report or adjust data submissions due to claims adjudication requirements out of our control. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on MHCL and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take April 20, 2026 Page 17 account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Christian Soura Hattie Hyman, PharmD SVP/Chief Financial Officer Pharmacy 340B Manager 340B Authorizing Official 340B Primary Contact McLeod Health McLeod Health McLeod Health Clarendon McLeod Health Clarendon April 20, 2026 Page 18 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 19 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 20 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2248Greater Lawrence Family Health Center2026-04-20T04:00Z13,077 chars
See attached file(s) Family Health Center April 14, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information - 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Greater Lawrence Family Health Center, Inc. (GLFHC), we appreciate HRSAfor extending the comment deadline to Aprit 20, 2026, providing critical tirne for Comrnunity Health Centers (CHCs) to evaluate the operational, financial, and patient-care risks posed by the proposed 340B Rebate Model Pilot. GLFHC has served as a Federally Qualified Health Center for 45 years, caring for more than 68,000 patients across the Merrimack Valley. Our mission-driven programs are designed to address significant health disparities and are sustained in large part by 340B savings generated through our six in-house pharmacies. These savings are reinvested directly into patient care, enabling access, affordability, and comprehensive clinical services that would otherwise not exist. The 340B Program is foundational to ChiCs' ability to serve the nation's most vulnerable patients. By design, it enables safety-net providers to stretch limited federal resources through up-front outpatient drug discounts. The proposed rebate model represents a fundamental departure from this structure by shifting financial risk and administrative responsibility from manufacturers to CHCsentities operating on razor-thin margins. Based on national assessments from NACHC, CHCs anticipate: Significant revenue losses across entity-owned and contract pharmacy models Substantial increases in operational costs, often exceeding several million dollars annually for mid-sized CHCs Disproportionate harm to rural and underserved communities, which rely heavily on 340B savings to sustain access points such as mobile clinics, telehealth, and extended-hours services We strongly urge HRSAto exempt Community Health Centers from the 340B Rebate Model Pilot Program. Financial Risk and Cash-Flow Instability Mandating WAC-upfront purchasing creates severe cash-flow risk for CHCs. Many operate with fewer than 90 days of cash on hand and lackthe financial reserves to float drug inventories for extended rebate cycles. Key financial risks include: Delayed or denied rebates, leading to direct financial losses Loss of prompt-pay and volume discounts due to credit-limit strain Forced reliance on loans or lines of credit, diverting patient-care dollars toward interest and debt service GLFHC is already experiencing these risks under the Medicare Drug Price Negotiation process with the Maximum Fair Pricing (MFP) drugs. Between January 1 and March 31, 2026, we were denied $35,025.13 in Standard Default Refund Amounts (SDRA) for MFP drugs dispensed to non-patients, despite clearly identifying claim status through submission clarification codes and manufacturer transaction files. Recovering these funds requires submission of Good Faith Inquiries, with payment contingent on manufacturer approval and subject to extended delays. These denials appear to reflect manufacturers' failureor unwillingnessto honor visible claim-level data, effectively withholding refunds owed to covered entities. Given these documented failures, it is reasonable to anticipate that similar or greater issues would arise under a broader 340B rebate model. This is not sustainable. Analysis of a rebate model with the 2026 MFP drugs would lead to approximately a $IM cash flow impact if the rebate averages net 30 days. Looking forward, the increased drug cost for MFP 2026 and 2027 drug list would increase our drug spend by approximately $817K/month ($9.8M/year) while we wait for the rebates. This structure effectively converts the rebate model into an interest-free loan from safety-net providers to manufacturers, with no meaningful safeguards to prevent financial harm. Further, we have a physical inventory; the combined impact of inventory turnover and rebate submission timelines could extend purchase-to-rebate cycles well beyond 45 days. Even conservative denial rates would result in losses we cannot absorb at our CHC. 2 Administrative and Operational Burden The proposed pilot would impose duplicative and unnecessary administrative complexity on our already small administrative 340B team that already operates under rigorous compliance frameworks. GLFHC is required to: Build and maintain manufacturer-specific rebate reporting processes Manage multipte submission platforms with inconsistent data standards Track denials, reconcile payments, and navigate opaque dispute processes National CHC data indicate that most organizations would need to hire additional staff, often one or more FTEs, and invest heavily in IT infrastructure, pharmacy software customization, and third-party administrative support. For our in-house pharmacies, deep EHR-PMS integration would be required simply to function in the new modet. Here at GLFHC, due to financial constraints, this is a manual process. Operational estimates further illustrate the scale of this effort. Based on the current observed volume with MFP drugs of approximately 300 claims that are 340B every two weeks, with approximately 15 minutes per claim of staff time, the associated administrative workload is estimated at roughly 38 staff hours perweek dedicated to rebate- related processing and administration. Expansion of the pilot beyond the current MFP medications to a full 340B rebate model is expected to substantially increase claim volume, thereby necessitating additionat staffing and resources to ensure ongoing compliance and operational continuity. GLFHC is diverting dedicated time from our pharmacy residency program and shifting our pharmacy residents to assist our 340B team to work on this initiative. These investments divert limited resources away from direct patient care and clinical staffing, weakening the safety net rather than strengthening program integrity. Patient Impact and Access to Care Most importantly, a rebate-based pricing model threatens patient access to essential medications. We serve patients with a disproportionately high burden of chronic disease, including diabetes, hypertension, cardiovascular disease, chronic kidneydisease, and serious mental illness. These patients depend on affordable, predictable access to medications at the point of care. Under a rebate model, we would be required to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for manufacturer approval and payment of rebates. This detay disrupts affordability at the pharmacy counter and undermines CHCs' statutory obligation to provide sliding-fee discounts. 3 Access risks are particularly acute for: Direct oral anticoagulants (DOACs) used to prevent stroke and death SGLT2 inhibitors essential for diabetes, heart failure, and kidney disease Behavioral health therapies, including antipsychotics and agents treating medication-induced movement disorders Insulin, where affordability is a matter of life and death and intersecting federal requirements mandate point-of-sale discounts GLFHC has steadity invested our 340B savings into building a clinical pharmacy program, adherence packaging, free prescription delivery, medication access team to assist with prior authorizations, and other mission driven programs that directly serves our most vulnerable patients. Our Clinical Pharmacy program is comprised of 13 clinical pharmacists providing direct patient care under Collaborative Drug Therapy Management (CDTM) agreements to assist our primary care providers co-manage their patients. Our pharmacists offer chronic disease management including but not limited to management of clinic patients on anticoagulants, with diabetes, asthma, HIV, and those requiring behavioral health services. Clinical Pharmacy services woutd simply not exist without 340B savings. The evidence supporting this model of care of clinical pharmacists integrated in a care team is well- documented. A 2023 study published in the American Journal of Health-System Pharmacy looked specifically at an underserved clinic where most patients were uninsured and found that 1,334 pharmacist interventions over a two-year period generated a total cost avoidance of $477,065, averaging $357.62 per intervention.' GLFHC's ctinical pharmacy program has been generating this levet of impact for 15 years. Most recentty, one of our clinical pharmacists worked closely with a patient to lower her hemoglobin A1c from 12.1% to 7.5% in just 14 months. A peer-reviewed study published in 2017 found that every one- point reduction in A1c is associated with $1211 in medical cost savings; adjusted for inflation and applied to this singte patient, that represents approximately $9,000 in cost avoidance from one pharmacist's intervention alone.2 The impact of pharmacist-led interventions is both immediate and far-reaching. Consider another example: a patient hospitalized for diabetic ketoacidosis was seen in our transition of care (TOC) clinic, where our clinical pharmacist reconciled her medications, addressed access barriers, optimized her regimen, and set up a continuous glucose monitor to track her progress. Recognizing a broader pattern of low blood sugar risk among insulin-dependent patients, the pharmacist coltaborated with our Information Systems team and our physicians to develop an order set. This patient avoided further hospitatizations through elimination of unnecessary mealtime insulin and tighter glycemic control. An intervention that began with one patient transformed into a system-wide safeguard. This is the kind of 4 impact GLFHC delivers every day to patients with little to no other safety net. It is also what is at risk if CHCs are not exempted from the 340B rebate modet pilot program. Given the increase in cost, our pharmacies are limiting our inventoryto preventfinancial loss (i.e. expired medications). Further, this may lead to disruption to our adherence packaging program, ourfree detivery, and our prior authorization team. This may lead to medication interruptions or loss of access which may predictably lead to increased hospitatizations, adverse clinical outcomes, and avoidable system-wide costsall in direct conflict with HRSA's mission. Clinic-Administered Drugs We urge HRSA to explicitly exclude clinic-administered drugs (CADs) from any rebate pilot. CHC CAD operations are not structured for discrete claims billing and carry minimat risk of duplicate discounts due to existing Medicaid and Medicare safeguards. Including CADs would require costly system overhauls, new software, and manual data conversionatl without corresponding program integrity gains. Recommended Alternative: Neutral Claims Clearinghouse Rather than implementing a rebate model, HRSA should pursue a National, Neutrat Claims Clearinghouse approach that: Preserves up-front 340B pricing Reduces administrative burden for covered entities Provides manufacturers with accurate de-duplication data Protects patient access and CHC financial stability This approach aligns with the original intent of the 340B statute while addressing oversight concerns in a cost-effective, scalable manner. This will attow for transparency, which is what manufacturers desire. 5 Conclusion For more than three decades, the 340B Program has enabled CHCs to serve patients regardless of ability to pay. A rebate-based model would undermine this structure by introducing cash-flow instability, administrative overload, and barriers to medication accessparticularly for uninsured and underinsured patients. Greater Lawrence Family Health Center strongly urges HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program and to pursue alternatives that protect patient access while preserving the integrity and sustainability of the safety net. We appreciate the opportunity to provide input on this critical issue and welcome continued engagement with HRSA. Sincerely, .7--oun_ok_rn.A savt6' President & CEO References: 1. Selman Hasham, Pamela Moye-Dickerson, Maria MillerThurston, Description and financial impact of ambulatory care pharmacy team interventions within an underserved patient population, American Journal of Health-System Pharmacy, Volume 80, Issue Supplement_l, 1 March 2023, Pages S42-S48, https://doi.org/10.1093/ajhp/zxac342 2. Hirsch JD, Bounthavong M, Arjmand A, Ha DR, Cadiz CL, Zimmerman A, Ourth H, Morreale AP, Edelman SV, Morello CM. Estimated Cost-Effectiveness, Cost Benefit, and Risk Reduction Associated with an Endocrinologist-Pharmacist Diabetes Intense Medical Management "Tune-Up" Clinic. J Manag Care Spec Pharm. 2017 Mar;23(3):318-326. doi: 10.18553/mcp.2017.23.3.318. PMID: 28230459; PMCID: PMC10398331. https://pmc.ncbi.nlm.nih.gov/articles/PMC10398331/#::text=8%2D12,16%25%2Olower%20($1%2 C505%20vs. 6
HRSA-2026-0001-2249McLeod Regional Medical Center of the Pee Dee Inc.2026-04-20T04:00Z60,360 chars
Please see attached comments for McLeod Regional Medical Center of the Pee Dee Inc, from McLeod Health. McLeod Regional Medical Center Cheraw Clarendon Darlington Dillon Loris Seacoast April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by McLeod Health/Mcleod Regional Medical Center of the Pee Dee Inc (MRMC), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from MRMC and other Covered Entities. As a 340B-participating DSH hospital, MRMC is a core component of the healthcare safety net in Florence, SC, and the surrounding regional area. This includes communities in South and eastern North Carolina from the Pee Dee, to the Midlands, and coastal areas. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. MRMC participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, MRMCs 340B Program participation enables us to commit millions of dollars per year in healthcare resources to the regional community safety net population we serve. We provide charity care and assistance programs for drug therapies and medical services, as well as a completely free cancer clinic. We offer services in greatly underserved and under-resourced areas. These, and many other, services would not be possible without the 340B program. MRMC also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self- April 20, 2026 Page 2 serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, MRMC wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 MRMC submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH MRMCS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto MRMC and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to MRMC when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR MRMC TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected MRMC. There are many examples of this. Contract pharmacies: Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of savings that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by more than 70% since fiscal year 2020 when the first manufacturer restrictions began occurring. This has limited the extent to which we can support our community. Covered entities and their patients are not the sole benefactors of contract pharmacy agreements. Most such agreements include provisions to compensate the pharmacy for taking care of covered entity patients. By restricting contract pharmacies, manufacturers are also cutting off an important source of financial opportunities for local pharmacy partners. Because of these restrictions, MRMC has had to reduce and eliminate partnerships with pharmacies in the community that serve our patient populations. More recently, certain manufacturers have gone another step further, imposing rules and regulations as a condition of obtaining 340B medications within MRMC itself and its registered child sites. MRMC is not aware of any policy, law, or statute that states a Covered Entity must provide data to manufacturers in exchange for 340B discounted drugs. Not at contract pharmacies and most especially not within our own walls. The initial restrictions severely limited our ability to serve our patients at contract pharmacies. But now, Eli Lilly, AstraZeneca, Novo Nordisk and 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 Bristol Meyers Squibb have instituted additional arbitrary claims data requirements for Covered Entities to maintain 340B pricing on their own entity wholesaler accounts (i.e. not limited to bill to/ship to contract pharmacy arrangements). These burdensome policies require us to report in- house pharmacy and medical claims data to continue to access 340B discounted drugs for use within MRMC and our registered child sites. They have issued statements that covered entities will lose pricing if we do not comply with their data reporting requirements. Not only have they unlawfully imposed restrictions on contract pharmacies, but now they are imposing restrictions on the use of 340B drugs at covered entity locations. If we cannot trust the manufacturers to abide by currently established program rules, as evidence by how they have created their own rules for the program already, how can we or HRSA trust that they will follow the rules of a rebate program and provide MRMC with the rebates we are entitled to? Data disclosures: The manufacturer 340B restrictions require the disclosure of patients protected health information and other confidential information to their vendor, in exchange for access to 340B-price medications. Providing this data also gives them the right to monetize that data. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, or offered us anything else to offset our costs and operational burdens in exchange for the use of this data. As a result they are probably overcharging us for these drugs every single day. In fact, if we comply with their restrictive policies, they allow us access to 340B drugs for only a fraction of our patient populations. So not only do they benefit financially from the use of our data, but they limit their own financial obligation to provide 340B discounted drug. Good-faith inquiries: Manufacturers employees and contractors such as Kalderos have sent us overreaching demands. They send us good faith inquiries for pharmacy and medical claims, claiming our responses will prevent duplicate discounts. Often these claims were not even filed by MRMC. We have received requests containing claims that were submitted by completely different hospitals and pharmacies. Claims are also often several years old or for payers who have not been identified by our, or any other state, as Medicaid. They also provide us with incomplete information which makes researching medical claims time intensive and nearly impossible. The patient identifier they provide does not match anything in our electronic health record. During the last inquiry, we spent nearly 30 hours researching just 8 claims and were ultimately unable to definitely match them to patients. A rebate model would only further exacerbate these issues. Anticipated rebate denials: We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our entity-owned outpatient pharmacy, manufacturers such as Boehringer Ingelheim and Prasco have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. In fact, in some instances we have provided data as requested, received acknowledgement of approval for the MDPNP refund, but when the rebate claim went back through processing, it was yet again April 20, 2026 Page 5 denied a MDPNP rebate. In one such case when we inquired about the claim the second time it was denied, we were provided yet another invoice to submit data to Second Site Solutions, and this time the invoice was not even associated with the outpatient pharmacy at all. The response from Boehringer Ingelheim was that they do not require the invoice match the pharmacy, they link rebate claims at the entity level, and not the pharmacy level. As HRSA is aware, that is not how pharmacy 340B dispensing and replenishment works. The MDPNP also only applies to Medicare D claims. Hospital outpatient facilities do not submit claims to Medicare D for drugs administered in these facilities. How can you even try to link rebate claims at the entity level when these areas do not even file Medicare D claims? To make matters even worse, we are not receiving refund payments, correct or otherwise, within the 14 days required by law. Most are taking a minimum of 20-30 days. And if you have to open a GFI to correct a payment, it takes a minimum of 3 more weeks from the time the GFI is approved for the claim to reprocess. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Entity-owned pharmacy float: Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of MRMCs purchases for rebate eligible drugs, including drugs purchased for administration to outpatients within our 340B registered facilities. Based on actual drug costs year-to-date for 2026 IRA drugs, MRMCs up front acquisition costs for facility and outpatient pharmacy dispenses could increase by as much as $11,000,000 for the year. HHS and HRSA OPA have not yet explained whether this cost would be accounted for or mitigated in some way, and if not, why not. How long would we be expected to float this unreasonable increase in drug costs? We are currently not even getting our MDPNP rebates on time. Adding yet another layer of rebates will only increase the amount of time we would have to float these excessive costs. These problems with the MDPNP are not confined to 340B pharmacies. Our health system operates another outpatient pharmacy that is not a 340B-covered-entity-owned outpatient pharmacy. Even though 340B is not a factor for this pharmacy, we are seeing that nearly 100% of rebate payments are incorrect. It also still takes at least 20-30 days to receive payments, instead of the 14 days required by law. If this rebate process cannot even function properly in the absence of 340B, then how are covered entities expected to believe it will function any better when 340B rebates are added on top of this? 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 6 Enforcement could stop these bad behaviors, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. We are also not aware of any situations where CMS has imposed penalties for late payments. When manufacturers already have their payments in-hand, how can HRSA or MRMC trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO MRMC TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how and what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. MRMC would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. Support staff in Beacon have also repeatedly exhibited knowledge deficits in how 340B inventory systems work and do not work. Manufacturers should not be allowed to choose or create their own rebate systems. HRSA should develop and make available and independent, non-biased system with meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. HRSA should not allow a manufacturer to place restrictions on the number, location or types of contract pharmacies a covered entity has. If Covered Entities are permitted to register contract pharmacies and HRSA accepts those registrations, manufacturers should be required to honor 340B pricing at all such registered contract pharmacies. If HRSA 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 7 believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? MRMC has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with the current 340B Program. MRMC is not aware of any recent changes in law or funding to think it reasonable that HRSA could reliably enforce compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? Respectfully, a mechanism other than the ADR process would be needed for this. The ADR process has resulted in only six public decisions since going online in 2021, all of which have favored manufacturers. Likewise, the Beacon Good Faith Inquiry and submission of complaints to the MTF/CMS portal have proven to be equally ineffective. Is there an acceptable level of noncompliance, and if so, what is it? If manufacturers are not to be held to the same rigorous standards as Covered Entities, then these acceptable levels should be defined and published. If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS MRMC TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. In fact, many pharmacy dispensing systems and payment reconciliation systems include MDPNP refunds as expected reimbursement, as if from a payer, on a pharmacy drug claim. We believe 340B rebates can be viewed the same. Would this then not mean the manufacturers should be designated as HIPAA Covered Entities? We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask 10 See 45 C.F.R. 160.103. April 20, 2026 Page 8 what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE MRMCS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF MRMC? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO OFFSET MRMC FOR THE VALUE OF ITS DATA, OR WILL SOME OTHER MECHANISM BE USED? IF NOT, THEN WHY NOT? One of MRMCs principal concerns with manufacturers campaign against the 340B Program is that their use of our data, which contains our patients information, appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved despite these and other comments, objections and concerns, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate MRMC for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? MRMC believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 9 not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. MRMC urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From MRMCs perspective, there is no clear statutory or policy rationale supporting a 340B rebate program at all. If a 340B rebate model is implemented anyway, there especially is no basis for the extension of a rebate model beyond Medicare Part D. In the 2025 rebate model materials and court filings, HRSA stated the main purpose of the rebate model was to facilitate deduplication of 340B Program purchases and MDPNP dispenses. Especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries, based on HRSAs own statements, there is no reason to consider a 340B rebate program for non-Medicare patients. While Medicare represents a significant segment of MRMCs patient population, we serve many other patients, including patients with no coverage at all. Requiring MRMC to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. Outpatient departments do not bill Medicare Part D for physician-administered drugs. HRSAs 2025 proposal to include drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. April 20, 2026 Page 10 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO MRMC? IF NOT, WHY NOT? As noted above, MRMC firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. In MRMCs experience with good faith inquiries in Beacon for the MDPNP, manufacturers do not disclose how they determine if they believe a claim is 340B eligible, or how they select invoices for data submission to prove otherwise. Invoices are often unrelated to the pharmacy in question, which leads to serious concerns about manufacturer understanding and participation in ANY rebate program. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. MRMC urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON MRMC? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding MRMCto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. MRMC feels that manufacturers should not be able to select their own rebate administrator, especially not one with obvious conflicts of interest, and that derives additional benefits from financial partnerships with the manufacturers. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 The scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. It also allows manufacturers to derive other benefits from the use of our patient data, for which MRMC is not receiving any compensation. 12 See 45 C.F.R. 164.501. April 20, 2026 Page 11 This arrangement exposes Covered Entities to significant operational burdens, including time- intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. MRMC has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. The response we received from Second Sight was that they were not accepting any redlines to their terms, without any explanation or offer for further discussion or compromise. MRMC believes HRSA should select an independent, non-biased rebate administrator, if the decision is made to move forward with a rebate model anyway. If not, then why not? If HRSA does not select the rebate administrator, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 Finding rates for Covered Entities are lower, yet manufacturers point to audit results as justification for 340B restrictions. Why are manufacturers not subject to the same audit rates as Covered Entities, considering such high noncompliance rates? These finding rates should be more than enough justification to insist upon publicly defined guardrails for manufacturers, as well as monitoring tools for covered entities for any proposed rebate program. With manufacturer noncompliance rates so high, MRMC is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 12 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? MRMC hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, 14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. MRMC encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. MRMC maintains auditable purchasing records, conducts routine internal reconciliations, works with external auditors and consultants, and utilizes third-party administrators (TPAs) to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. MRMC takes its participation in the 340B program very seriously. We currently spend more than $3,000,000 annually to compliantly operate the 340B program. This figure is inclusive of costs including but not limited to, consulting fees, legal fees, TPA fees, pharmacy fees, audit and compliance costs, and dedicated staff FTEs. While this figure comprises mostly predictable, baseline and dedicated costs of operating the 340B program, it is subject to periodic increases. Contracts often include inflater clauses that allow for periodic rate increases over specified time intervals to keep up with inflationary rates. Most contracts are also subject to renegotiation of fees 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 13 at the conclusion of the term. FTE costs generally rise yearly with inflation or cost of living increases. Not included in this figure are unpredictable costs often incurred to accommodate ongoing changes within the healthcare system. Some of these costs are one-time charges, but many can also have an ongoing component. Examples include: 1) software changes, including additions, subtractions, updates, and upgrades; 2) electronic health record changes; 3) technology advancements; 4) additional compliance auditing costs; 5) additional vendor fees; and 6) new vendors contracts. Also not included in this figure are additional, partial FTE costs associated with program operations when input, assistance and guidance is needed from non-dedicated departments and hospital leadership. Other departments include Finance, Accounting, Billing, Information Systems and Technology, Pharmacy, Legal, Procurement, Nursing, clinic staff (including physicians and other prescribing providers), Nursing, and Case Management. ]. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Using the current processes in development to handle the increased workload due to the MDPNP, as well as current data reporting requirements, we estimate total operating costs are likely to increase by $750,000- $1,000,000. This is on top of the increased up front drug float which we may or may not recoup in rebates. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require MRMC to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, conducting internal audits and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. April 20, 2026 Page 14 MRMC is not able to keep up with the rebate reconciliation/management required to ensure we are receiving correct and timely MDPNP refund payments with current levels of staffing. We are still trying to reconcile rebates for claims submitted in January. We are considering hiring additional staff to reconcile and manage the existing MDPNP rebates. We have attempted to add MDPNP rebate management tasks to existing staff with limited success. The time spent on MDPNP reconciliation (currently 16-20 hrs a week) is insufficient to effectively manage these rebates, and is time taken away from other vital patient care tasks. This is for just 10 drugs for Medicare D patients at our outpatient pharmacies only. A 340B rebate program that encompasses data reporting/submissions, additional drugs, all payers and all sites of care would further increase the staffing requirements to manage and reconcile two rebate programs. On top of that, several manufacturers (Eli Lilly, AstraZeneca, Novo Nordisk, Bristol Meyers Squibb) have imposed additional, harmful and unlawful restrictions on 340B pricing access, requiring expanded claims data reporting to include all in-house pharmacy and medical claims data. MRMC is only submitting new claims data for 1 of the 4 manufacturers at this time, and it is taking at least 16 hours a week for this ONE manufacturer. Based on our current experiences with 340B ESP, the MDPNP, and Beacon, for the existing and new claims data requirements as well as MDPNP rebate reconciliation management, we estimate that at least 2 FTEs will be needed for ongoing data reporting and rebate reconciliation functions related to complying with a 340B rebate program, for MRMC. This equates to an approximately 40% increase in staffing expenses. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. Most Covered Entities, including MRMC, contract with TPAs to do exactly these very things. Mechanisms already exist, but those systems were developed for upfront discounts and virtual replenishment inventory systems. In implementing a rebate program that completely changes how the program has operated for decades, resources and money will need to be spent on new product and workflow/process development. This really should not be necessary since a rebate program is not the only way to manage deduplication. MRMC is not certain if we would have been able to comply with the data reporting requirements of the 2025 rebate program, especially for medical claims. Manufacturer and vendor webinars were confusing, inconsistent and incomplete. They often did not have answers to questions from Covered Entities. As a result, evaluating and estimating accurate costs is difficult if not impossible. Our TPA has been developing a software solution to assist with data reporting and rebate management. Its a new system, requires a contract amendment and comes with additional costs. If we chose to contract for this solution for the 2025 rebate program affecting the initial 10 IRA drugs, our base TPA fees would have increased by approximately $80,000/year. Using the fee schedule provided last year, the addition of the 2027 IRA drugs would increase TPA fees by about about $165,000. It is impossible to predict or estimate if this solution would reduce the amount of April 20, 2026 Page 15 FTEs necessary for rebate management. Because this is new technology, staff must have additional training to learn how to use the system. There is no way to know how efficient the system would be. All information and demonstrations surrounding the solution were completed in test environments. Even though our TPA offers a rebate solution, and other vendors offer other kinds of assistance with data reporting and rebate programs, Covered Entities will still have gaps to fill in, including MRMC. For example, to save on TPA costs, many covered entities do not onboard clean sites into their TPAs. TPA rebate solutions will not be able to assist with clean site data reporting for rebate purposes, unless Covered Entities implement the clean sites into their systems. This comes with additional one-time and ongoing costs. Implementation fees range from $2,500- $75,000 depending on a variety of factors. Ongoing fees can range from as little as $1,000 to > $250,000 depending on the same and additional factors. In addition, while manufacturers claim that Covered Entities already have the data they are asking for, this is not truly the case, at least not for MRMC. TPAs do not all have the same data requirements. Our data feeds do not contain information like claim line numbers. Updating data feeds to contain additional information comes with additional TPA charges and expenditures in internal IT resources. These can range from $2,500-$10,000 per data feed. If manufacturers are allowed to dictate the terms of their participation in a rebate program, including specifying the data fields required, they could expose Covered Entities to multiple additional costs. Our state recently published new billing guidelines for Medicaid FFS patients. One of the new requirements requires the submission of the actual acquisition cost on the claim we send to the state. Implementation of a rebate program would complicate this process and expose MRMC to additional costs and financial losses. There is no guidance yet on how to report acquisition cost on claims when we pay a higher cost upfront on initial acquisition but expect a 340B rebate later. Discussions with the state to address these and other concerns will cost time and resources. Other questions will need to be addressed: How are we to recoup lost payments in the event we report a 340B acquisition cost, but our 340B rebate is denied? Will we be able to rebill at the higher cost? how will we operationalize that process? Additional billing FTEs may be necessary to do the work required to rebill these claims with a different acquisition cost. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, MRMC purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. Based on actual purchases for 2026 MDPNP drugs for calendar year 2026 to date, MRMC could pay as much as $11,000,000 more for the initial acquisition of rebate eligible drugs, in the hopes of receiving 340B rebates later to offset that enormously large figure. This will lead to cash flow disruptions and may result in difficulty paying wholesaler invoices. Depending on how long it actually takes to receive April 20, 2026 Page 16 rebates, if we are not able to pay our invoices in time, we could lose our prompt pay discount. This would increase drug costs for all pharmacies within our health system and not just those participating in the 340B program. There are additional negative impacts that go beyond the increased upfront and invoice costs. We know that with the MDPNP payments, the payments we are receiving are not clearly identified so that we can tell which ones belong to which of our outpatient pharmacies. This is causing increased workload and confusion with multiple departments and staff involved in budgeting, month end processes and accounting. MRMC is just one of three covered entities within McLeod Health. If a new rebate problem is implemented and affects our other 2 covered entities as well, these complications will only increase and compound. Currently we are able to offer financial assistance to patients on an up front basis due to availability of up front 340B drug discounts. In moving to a rebate program, we would likely have to move to a retrospective financial assistance program based on receipt of expected 340B rebates. This would have negative impacts on patient care and outcomes. Many patients will choose not to receive care or medications if they cant get it at reduced prices up front. Financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. MRMC could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. We contract with and maintain subscriptions with our TPA to assist with compliance and inventory tracking so that MRMC is able to use accumulations to obtain medications at the best price for our patients. We cannot afford to pay thousands of dollars up front for a medication that may take 1-2 years to dispense a full package and recoup that excess cost in rebates. 3. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, MRMC will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. For examples of such burdens and uncertainly, you only have to look to the current MDPNP, review complaints submitted to CMS via the MTF helpdesk, or attend a Pharmacy/Stakeholder CMS call on the MFP/MTF. Multiple covered entities, including MRMC, continue to experience inaccurate rebate calculations, lack of transparency, failure to receive April 20, 2026 Page 17 rebates, let alone within 14 days, challenges with rebate reconciliation and tracking, etc. The MTF Help Desk is inundated with complaints and issues and these stakeholders also voice these concerns on the calls. These are the challenges we are experiencing with just 10 drugs at dispensing pharmacies. If this is expanded to 25 drugs, all payers and multiple sites of care, the impacts related to rebate denials and reconciliation will increase exponentially. Ideally, MRMC would prefer that if HRSA moves forward with a rebate program, manufacturers should be prohibited from denying ANY rebates for 340B covered entities. This, in combination with strict enforcement of timely rebate payments, would help reduce some administrative burden and costs. 4. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, MRMC would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. Staff would need to go through training to learn new skills to allow them to complete these new tasks. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in MRMCS operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. Medical claims are particularly problematic. These claims cannot be filed until after a patient discharges or the encounter series is closed. Claims take a minimum of 30 days after an encounter has been closed to be submitted but can take longer. Claims can be rebilled weeks to months later for a variety of reasons, including patient class changes. How do we handle these situations with a 45 day reporting window? It will not always be possible to submit data within that 45 day window. What would happen if we submitted medical claims data 46, 47 or even 60 days after the date of dispense? To our understanding, those would be non-conforming claims and would be denied rebates. How was that window determined and why was it approved? HRSA is aware of the difference in claims submission between pharmacy and medical claims. How could 45 days be considered reasonable or acceptable? Claims for clinic administered medications present unique challenges as well and require additional time for data collection and processing. Most clinics are considered clean sites and are not implemented in TPAs, so the data doesnt exist in the TPA, contrary to manufacturer claims. Getting the required data out of the electronic health record is not a simple task either. It would require time and resources from Information and Technology Systems to build new reports and processes in human readable formats. Claim elements are different and do not easily match up with required data fields for example, clinic claims typically bill based on procedure codes instead of drug codes. These timing and data differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. April 20, 2026 Page 18 CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on MRMC and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Christian Soura Hattie Hyman, PharmD SVP/Chief Financial Officer Pharmacy 340B Manager 340B Authorizing Official 340B Primary Contact McLeod Health McLeod Health McLeod Regional Medical Center McLeod Regional Medical Center April 20, 2026 Page 19 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 20 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 21 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2250Hunter Health Clinic Inc.2026-04-20T04:00Z13,372 chars
See attached file. April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information 340B Rebate Model Pilot Program (HRSA202603042) Dear Director Britton: On behalf of Hunter Health Clinic, Inc. (Hunter Health) I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This additional time has been essential for evaluating the extensive operational and financial impacts the proposed 340B Rebate Model Pilot would impose on Community Health Centers (CHCs). The 340B program is indispensable to CHCs ability to deliver affordable medications and essential services to medically underserved communities. The proposed rebate model - shifting responsibility from manufacturers to safetynet providers - poses severe risks to the CHCs financial stability, clinical operations, and ability to meet federal program requirements. National assessments show CHCs would face profound consequences. Many are already reporting significant losses across entityowned and contract pharmacy operations due to increasing administrative barriers. National data shows that a single midsized health center is projected to incur more than $3 million annually in new administrative, labor, and IT expenses under a rebate model. Rural CHCs, which reinvest an estimated 25% of 340B savings into ruralspecific infrastructure such as mobile clinics and telehealth, would be disproportionately harmed. For the last 50 years, Hunter Health has been a critical health care resource in the community, especially through our service to those most vulnerable and underserved in Wichita and the surrounding cities. Hunter Health is a non-profit, Community Health Center and the only Urban Indian Health Program (UIHP) in Kansas. We know that low-income and racial and ethnic minority populations tend to be at greater risk for chronic health conditions related to healthy behaviors and clinical care, and our mission is to improve the health and wellbeing of everyone in our community. Hunter Health offers a wide range of primary care services including Medical, Dental, Behavioral Health, Vision, Nutrition, HIV Testing and Counseling, Pharmacy, Lab, X-Ray, and same-day appointments for urgent needs. From a common cold to minor surgery, we are a community health center providing more than basic health care needs. As the only UIHP in Kansas, Hunter Health also operates within the federal governments trust responsibility to provide health services to American Indian and Alaska Native people, regardless of where they live. This responsibility extends to urban communities and is fulfilled in part through organizations like ours. Any changes to the 340B program must be evaluated in light of this obligation, as they directly affect our ability to provide essential services to this population. I. We Strongly Urge HRSA to Exempt CHCs and UIHPs from the 340B Rebate Model Pilot For more than 30 years, the 340B program has enabled CHCs to stretch scarce Federal resources by purchasing outpatient medications at discounted prices and reinvesting savings into services for lowincome patients. The rebate model undermines this longstanding structure by forcing CHCs to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for uncertain rebate payments. This redesign would destabilize cash flow, constrain access to medications, and impede CHCs ability to serve the 52 million patients who rely on them. For Hunter Health, the proposal directly impacts: The approximately 45,000 annual 340Beligible prescriptions we dispense. The current administrative cost required to maintain our existing compliant 340B operation. The programs supported by 340B reinvestment, including real time access to behavioral health services, vision services for our diabetic population and imaging services, such as OB sonograms. We strongly urge HRSA to exempt all CHCs and UIHPs from the rebate model to maintain program integrity and protect safetynet access. In addition to the broad impact on CHCs, this proposal presents unique risks for UIHPs. Requiring upfront drug purchases at full cost, even temporarily, undermines our ability to meet the federal trust obligation to provide care to American Indian and Alaska Native patients. Even short delays in rebate payments would strain limited operating margins and could compromise access to essential medications. II. Patient Impact: Threats to Medication Access and Safety Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs and UIHPs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. These risks are particularly concerning for American Indian and Alaska Native patients, who already experience disproportionately high rates of chronic disease and barriers to care, and who rely on safety-net providers like Hunter Health for consistent access to affordable medications. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC and UIHP patients will be disproportionately affected. CHCs and UIHPs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. In addition, the increase in administrative burden and associated costs to manage a 340B rebate model when combined with reduced savings from the program, will result in a compounded reduction in needed services to our patients. Fewer resources will require our CHCs and UIHPs to reduce patient services simply to meet the requirements of an unneeded rebate program. III. Administrative and Financial Burdens on CHCs and UIHPs The proposed rebate model would require CHCs to overhaul pharmacy systems, hire additional staff, and take on new compliance obligations across entityowned, contract, and clinicadministered drug operations. These changes impose substantial new costs without improving program integrity. In addition, losing access to the upfront 340B price in wholesaler catalogs and pharmacy software complicates compliance with sliding fee scale health center rules, Medicaid FFS AAC billing, and the insulin/injectable epinephrine executive order. Each of these issues seem to be unintended consequences that HRSA needs to consider as a part of this decision. Workforce and IT Impacts Nationally, CHCs estimate that 47% will need 0.51 new FTE, 36% will need 12 new FTE, and 7% will need more than 2 FTEs. CHCs report staffing costs ranging from $30,000 to $200,000 annually, with some midsized health centers projecting more than $3 million in combined labor, carrying, and inventory costs under a rebate model. Software and Third-Party Administrator Requirements Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. CHCs and UIHPs would need to: Implement new pharmacy system interfaces. Modify Electronic Health Record (EHR) and Pharmacy Management Systems (PMS) to support multiple manufacturerspecific portals. Pay new costs related to ongoing reconciliation, rebate-tracking modules, and reporting fees to TPAs. EntityOwned and Contract Pharmacies CHCs and UIHPs with inhouse pharmacies would require new integration tools, manual reconciliation processes, and frequent data submissions. Contract pharmaciesalready strained by manufacturer restrictionsmay drop 340B participation entirely, threatening patient access in pharmacy deserts. ClinicAdministered Drugs (CADs) Including CADs in a rebate model is unnecessary and harmful. CHCs often maintain paperbased documentation for CAD inventory and PPSbundled services, making rebate submissions operationally infeasible. CHCs bill Medicare Part A for most CADs, minimizing duplicate discount risk. HRSA should explicitly exclude CADs from any rebate pilot. IV. Cash Flow Challenges, Wholesaler Credit Limits, and Rebate Denials Requiring CHCs and UIHPs to purchase drugs at WAC fundamentally alters the financial foundation of the 340B program. CHCs and UIHPs already operate with limited liquidity - nearly half have fewer than 90 days of cash on hand. Under the rebate model: Rebates may not be paid for 4085 days, depending on inventory turnover and data submission schedules. Manufacturers retain broad discretion to deny rebates, leaving CHCs with unrecoverable WAC costs. Loss of promptpay, volume, and subceiling discounts will significantly increase expenses. To cover WAC purchases, many CHCs and UIHPs would be forced to use scarce reserves or take out lines of credit - diverting funds from clinical care to interest payments and eroding the purpose of the 340B program. V. Existing CHC and UIHP Compliance Systems CHCs and UIHPs already operate under a comprehensive regulatory framework established through the Health Center Program, Indian Health Services and the 340B statute that facilitates making medications affordable for patients. CHCs and UIHPs have systems in place that help us achieve 340B goals, including slidingfee scale programs for patients up to 200% FPL, regular HRSA Operational Site Visits to ensure compliance, annual 340B reporting through the Uniform Data System, and strong internal controls, audits, and external compliance oversight. CHCs and UIHPs are not the source of 340B misuse. Imposing a rebate model would add new burdens without improving accountability. VI. Meaningful Engagement with Urban Indian Health Programs We respectfully request that HRSA engage directly with UIHPs through formal Urban Confer or similar listening sessions. These forums provide an opportunity for meaningful dialogue, grounded in trust, respect, and shared responsibility, and would allow HRSA to better understand the operational and patient impacts of the proposed model. Given the unique role UIHPs play in fulfilling the federal trust responsibility in urban settings, it is critical that their perspectives are incorporated into any policy changes affecting the 340B program. VII. Recommendation: A National, Neutral Claims Clearinghouse (NCC) We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a small fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for Covered Entities (CEs) by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program. Protect patient access to affordable MFP drugs. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given that the required data already exists, a rebate model is an unnecessary and harmful duplication of effort. Conclusion Hunter Health strongly urges HRSA to exempt CHCs and UIHPs from the proposed 340B Rebate Model Pilot. The rebate model threatens medication access, undermines financial stability, adds significant administrative burden, and contradicts congressional intent for the 340B program. It also risks impeding our ability to fulfill the federal trust responsibility to American Indian and Alaska Native patients in our community. We strongly urge HRSA to exempt Community Health Centers and Urban Indian Health Programs from the proposed 340B Rebate Model Pilot and to engage directly with impacted providers before advancing any changes. We appreciate the opportunity to provide feedback and welcome continued engagement. Please contact Amy Feimer, CEO, with any questions. Sincerely, Amy Feimer, CEO E: amy.feimer@hunterhealth.org T: (316) 491-7611
HRSA-2026-0001-2251MultiCare Health System2026-04-20T04:00Z33,890 chars
Attached 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of MultiCare Health System, we appreciate the opportunity to comment on the request for information regarding the 340B Rebate Model Pilot Program from the Department of Health and Human Services (HHS). MultiCare serves patients across the Pacific Northwest and includes nine covered entities in Washington state that participate in the 340B program. In 2025, MultiCare had 5,133,142 340B claims. MultiCare supports efforts to strengthen and preserve the 340B program. However, we strongly urge the Health Resources and Services Administration (HRSA) not to replace the upfront 340B discount model which has worked successfully for decades with a rebate-based approach. Any rebate mechanism would impose enormous operational and financial burdens on MultiCare that far outweigh any potential benefits and would undermine the programs core purpose: helping eligible health care providers stretch scarce resources to improve access for underserved and vulnerable populations. If HRSA proceeds with a rebate approach, our key recommendations include the following: Engage subject matter experts from covered entities in both the design and implementation phases of any pilot rebate program Provide clear guidance regarding the objectives and scope of the pilot Develop a detailed proposal including anticipated outcomes, criteria for success, and an actionable exit strategy should the pilot not achieve goals Please note that for the purposes of estimating costs for this RFI, MultiCare has assumed that any future rebate program would include the 10 drugs HRSA previously approved and those approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, information request. The addition of the 2027 drugs materially increases our estimated costs compared with those calculated for the 2026 drugs alone. Each section below addresses specific questions in the RFI. 2 Administrative costs under a potential 340B rebate program Any rebate program would require MultiCare to incur new administrative costs. We entered the 340B program expecting reasonable operational expenses under an upfront discount model and have designed our staffing and systems accordingly. Shifting to a rebate-based approach would require substantial new resources, creating costs and burdens far beyond what we planned for and what we experience today. For the initial ten drugs included in Medicare DPNP, MultiCare incurred approximately $60,000 in preparatory expenses for the rebate program between Oct. 1 and Dec. 21, 2025. These costs included: Analyst time dedicated to report development Work by a team of fourteen staff and leaders to establish operational procedures At least forty hours spent on webinars to learn Beacon MFP the manufacturer's platform for managing rebates for the Medicare Transaction Facilitator (MTF). Our retail pharmacy teams, the 340B team and our finance/accounting departments had to implement new workflows to facilitate program management and financial tracking. Furthermore, we hired a full-time employee ($130,000 annual salary and benefits) to oversee rebate operations and avoid any distractions from maintaining 340B compliance activities. The total startup expenditure for the first ten rebate drugs under just the Medicare program approached $200,000. With an expansion of the rebate program to include all payers and an additional fifteen drugs, we anticipate that our current operations will be insufficient to support further rebate programs while sustaining existing workflows. To address these needs, we anticipate requiring: Three additional full-time pharmacy/340B program staff at a combined annual salary and benefits cost of $390,000 $15,000 annually for enhanced support to finance and accounting to track rebates Investment in a modern software platform capable of managing data and tracking requirements associated with the expanded program Our market evaluation identified only one available software solution that effectively integrates data from 340B software, the MTF, and Beacon MFP to optimize rebate transaction management. The estimated annual cost for this system is approximately $250,000. Consequently, MultiCare will incur an additional annual expense of $650,000 to maintain the 340B program beyond current spending, in addition to higher upfront purchase costs compared to standard 340B pricing. Several key factors contribute to the overall cost of rebate programs, primarily due to these expenses being entirely new and not substituting any existing components of the 340B program. Presently, more than 60 percent of efforts dedicated to managing the 340B program are focused on compliance, with the remaining portion supporting ongoing operational functions that will persist regardless of the adoption of rebate programs. This assessment is based on our review of operations before and after the implementation of the Medicare rebate program, which indicates that no current processes would be discontinued under 3 the rebate model. Furthermore, these additional expenditures are fixed in nature since the rebate program results in increased operational procedures, compliance activities, third-party vendor fees, labor and reporting requirements. Newly established mandates include tracking rebates across multiple systems, addressing rebate denials, conducting legal reviews, developing new training protocols, and overseeing accounting to ensure that initial purchase funds are appropriately reimbursed through the rebate process. The potential expansion beyond the initial 25 drugs will further increase rebate program expenditures and diminish the benefits available to safety-net hospitals participating in the 340B program. This adjustment may necessitate reallocating staff from patient care duties and requires upfront purchases at elevated prices without assured rebates, thereby restricting financial resources that might otherwise improve access to care, facilitate treatment for additional patients, and support vulnerable populations within our communities. Staffing impacts under a potential 340B rebate program MultiCare does not currently have the staff needed to comply with a rebate program and would need to incur significant additional cost to do so. To prepare for implementation of the new Medicare rebate program (consisting of 10 drugs and Medicare claims only) on Jan. 1, 2026, we hired one full-time individual dedicated to managing data submissions, Beacon MFP reviews, claims oversight, submission of inquiries related to rebate denials, and reconciliation of all claims and rebate payments. This process remains highly manual despite our ongoing efforts to integrate disparate data sources and enhance operational efficiency. As of April 15, 2026, there have been 3,666 Medicare claims sent to Beacon MFP. HRSAs current estimate of only five hours per week in additional work for up to 25 drugs is a gross underestimation of the resources needed. Based on our current experience, we anticipate the need for three additional permanent full-time employees to administer 25 drugs in the rebate program across all payers and areas of the 340B program within our nine covered hospitals. The increased labor costs are not currently reflected in the budget and may necessitate reallocating existing personnel from patient care to these administrative duties, potentially impacting patient access and throughput. Recruitment, onboarding and training of a new employee typically require four to six months. Based on our current experience with Medicare rebates, we have not identified a framework that adequately offsets administrative and operational expenses. The rebate is specifically designed to compensate hospitals for non-340B medication purchases, without provisions for reimbursement related to managing the rebate program. Historically, under our existing 340B initiatives, administrative expenses have been gradually integrated into the program. However, the current proposal would prevent such integration, resulting in substantial and unforeseen upfront costs. Hospitals may be required to allocate additional resources from other programs and invest in further vendor systems, compounding the erosion of 340B savings and harming safety-net hospitals. 4 Systems and infrastructure for implementation of a potential 340B rebate program Established 340B programs have developed their infrastructure over many years with partners under an upfront discount model. Implementing rebate programs would require a complete overhaul of systems and operations. HHS is suggesting this shift when health care organizations lack adequate resources to invest millions of dollars in a rebate model that would unnecessarily divert limited funds away from patient care. The new Medicare rebate program has provided our organization with practical experience in navigating the complexities of rebate initiatives and evaluating infrastructure requirements for the broader implementation of 340B rebates. It is important to note that all systems developed for the Medicare rebates represent new additions to our program and have necessitated considerable investments in both personnel and IT resources. Expanding rebate programs means investing substantially more time and resources to handle vast, intricate datasets and manual review procedures. To ensure compliance with the new Medicare rebate program and optimize rebate management via the Beacon MFP platform, our organization implemented new workflows and procedures. This involved aligning claims from our pharmacy dispensing system with de-identified claims in Beacon MFP and cross-referencing these records with our 340B software and electronic health record systems. Our team developed multiple reports to consolidate data across these platforms. On a daily basis, a designated team member generates reports from the MTF and shares them with the 340B team, who then reconciles the claims and verifies 340B eligibility. These findings are subsequently used to assess whether Beacon MFP has inaccurately denied any rebates. When discrepancies are detected, our team submits a good faith inquiry (GFI) within the Beacon MFP platform. Claims and GFIs in Beacon MFP are reviewed daily. Currently, approximately 32 percent of claims transmitted from the MTF to Beacon MFP are automatically classified as 340B by the platform, necessitating manual review for each claim to confirm or dispute its classification. The team manages these responsibilities alongside ongoing oversight and compliance activities for the 340B program. The initial development of this process required approximately four weeks of dedicated work by our internal team to design and implement workflows for the first ten rebate drugs. As the number of rebate drugs expands across all payers, managing increased data volumes will require additional resources. We anticipate the need to engage an external vendor to support this effort, with an estimated annual software cost of $250,000. Expanding the rebate program to include more drugs, additional payers and all 340B claims will significantly increase operational demands. Our team has coordinated with our 340B software vendor to develop specialized reporting for processing medical claims data as requested by certain manufacturers. Internal IT resources have also supported the secure receipt and transfer of this data to external platforms including ESP and Beacon. Even with the program currently limited to ten drugs under Medicare Part D claims, managing substantial data volumes and integrating disparate systems remains highly complex and resource intensive. 5 Although our organization manages its 340B programs through a system-level team, many hospitals lack these resources. We are concerned that safety-net institutions particularly rural and independent hospitals may be compelled to withdraw from the 340B program due to the burdens of shifting from an upfront discount to a rebate-based model. Given the critical role safety- net providers play in care delivery and access, the implementation of such a model has the potential for substantial, adverse effects on healthcare services and the communities who rely on them. Data collection by covered entities During the prior iteration of the rebate program, HRSA and manufacturers asserted that a rebate mechanism would not impose new data-related burdens on 340B hospitals. For example, both insisted that hospitals already provide the required information through 340B ESP. Our experience demonstrates this is incorrect. MultiCare maintains robust compliance infrastructure designed to meet 340B program requirements under the upfront discount model. Our 340B team conducts systematic audits on daily, weekly, monthly, quarterly, biannual and annual cycles to ensure thorough program oversight and compliance. The team consists of a director, manager and six analysts who collectively supervise nine 340B covered entities. This collaborative framework improves efficiency and standardization compared to handling each entity separately, while also allocating additional resources and support to smaller programs for optimal compliance. As part of these audits, the team verifies data accuracy, confirms eligibility, checks purchasing compliance, ensures group purchasing organization (GPO) prohibition adherence, and prevents duplicate discounts. Furthermore, we retain a third-party consulting firm to perform independent annual audits for each covered entity using procedures aligned with HRSA audit standards. Audit data is sourced from the same systems and methodologies as those used in HRSA data request lists. Given their comprehensive nature, these audits require substantial time and resources throughout the year. Each covered entity receives a detailed report to support quality assurance and continuous improvement. Despite this extensive compliance infrastructure, the Rebate Model Pilot Program introduces new and materially different data requirements that cannot be met through existing processes alone. HRSAs Office of Pharmacy Affairs (OPA) has suggested that data submitted by covered entities to manufacturers will be comparable to information already collected through third-party vendors, contract pharmacy policies, internal pharmacy claims requests, or data associated with claims under the Medicare Drug Price Negotiation Program. However, in our experience this is not the case. The Rebate Model Pilot Program requires additional complex data collection requirements, while current processes must also be maintained. To reconcile claims and establish 340B eligibility, our team must generate and reconcile reports from multiple systems, including our 340B software system, the electronic health record, MTF and Beacon MFP. For covered entities, these processes are new and require developing specific reports and procedures to generate a consolidated data source for manual review and validation in Beacon MFP. 6 Further complicating this process, certain manufacturers now require the submission of medical claims data, a recent and significant change. To comply, vendor partners and IT teams must produce new reports and meet expanded data submission specifications. This development introduces important considerations concerning the privacy and security of patient information, with manufacturer mandates limiting hospitals options for addressing these issues. We have also documented several cases in which Beacon MFP incorrectly classifies more claims as 340B eligible than appropriate, resulting in denied rebates. Therefore, each claim within Beacon MFP undergoes individual review to ensure accurate classification, and good-faith inquiries (GFIs) are submitted when discrepancies occur. In certain circumstances, additional medical claims data must be provided to demonstrate that a claim was not 340B eligible. These responsibilities are newly introduced and expected to increase significantly with the implementation of the Rebate Model Pilot Program. Payment timing and potential cash flow impact Unlike the existing upfront discount approach, any rebate mechanism will force MultiCare to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the rebate program, the delayed discount will have meaningful impact on our organization and the patients we serve. Under the Rebate Model Pilot Program, we are required to purchase pharmaceuticals at prices significantly higher than those available through 340B pricing. These drugs must be maintained in inventory until dispensed which can span several weeks or months followed by submission of documentation and a waiting period for a rebate equivalent to the difference between the elevated price and the 340B rate. Even if 340B rebates are issued within ten days, the process effectively obliges us to extend interest-free credit to manufacturers during the pre-dispense period and until rebates are received, thereby restricting resources that were expected to support patient care, consistent with 340Bs established upfront discount framework. Our experience with the Medicare rebate program has demonstrated increased drug expenditures without commensurate rebate offsets. Data from Beacon MFP indicates that most claims dispensed in January did not receive corresponding rebate payments until February or March, contrary to expectations held by covered entities. Manufacturers have up to ten days to make an initial determination regarding rebates and issue payment. However, it often takes an additional week or more after dispensing for Beacon MFP to submit claims to manufacturers. Once a decision is rendered within this ten-day window, further delays of several weeks before funds are deposited are common. Claims initially denied and later reversed may require four to six weeks for payment. These delays have created substantial challenges regarding organizational cash flow and accounting procedures. As a result, covered entities are required to buy drugs at wholesale acquisition cost (WAC) the highest price and keep these expenses and inventory for up to two months before getting any rebates. According to our wholesaler agreement, payment must be made within seven days. 7 Although HRSA has stated that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due, our experience with the Medicare rebate program clearly shows otherwise. Rebates are processed per claim and can take weeks to arrive, while payments to wholesalers are due within a week. Furthermore, it has been challenging to track when rebates are credited to covered entity accounts, prompting the development of new reporting systems and accounting methods to accurately monitor rebate deposits. Adverse impacts of these additional costs and burdens All of these costs and burdens outlined in previous sections add up, which means that MultiCare will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. MultiCare is a locally owned and operated health system dedicated to partnering for healing and a healthy future. Our goal is to establish ourselves as the highest value health system in the Pacific Northwest. While certain services operate at a negative margin, they remain vital for addressing community needs. In keeping with our nonprofit mission and community benefit obligations, we intentionally retain these mission-critical services, despite financial losses, to ensure access, equity and continuity of care. We maintain numerous partnerships within the community, strategically committing resources to enhance overall health and well-being. Our 340B programs in each community we serve further supports these essential services and initiatives. Financial losses resulting from unnecessary changes to the 340B program model may diminish our hospitals' capacity to sustain certain services and community programs. To prevent closure, hospitals might reduce staffing levels and hours of operation. These actions can lead to longer wait times for patients and limit the ability to accept new patients, presenting significant barriers to access. Such outcomes are likely if there are substantial losses associated with the implementation of rebate programs. Specific examples where this may occur in our health system include our diabetes management clinics and our medication management clinics, which rely heavily on 340B savings to help offset operating costs. Our organization remains one of the few health systems continuing to operate retail pharmacies, including two of the last remaining 24-hour locations in Washington State. These pharmacies deliver essential services, such as access to specialty medications, hospital discharge prescriptions, patient assistance programs, and financial support options like copay assistance and free medication provisions. Since January 1, 2026, we have experienced a notable decline in operating margins across all 15 pharmacy locations, attributable in part to rising drug costs and decreased net operating margins related to the Medicare rebate program. We are currently evaluating our ability to maintain these critical pharmacy services. Ongoing expansion of rebate model programs may ultimately require the closure of our pharmacies, which would adversely affect the communities we serve and contradict the intent of the 340B statute legislation designed to help safety-net hospitals extend limited resources to benefit vulnerable patient populations. 340B savings help cover capital expenses like purchasing new equipment and upgrading facilities, both of which are vital for delivering quality patient care. Without these savings, hospitals already working with limited capital budgets will face even greater challenges, resulting in 8 postponed repairs and replacements of equipment, delays in facility updates and maintenance, and setbacks in building new healthcare access points in underserved areas. Reliance interests The RFI expressly invites comment on reliance interests in continuing to obtain 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the secretarys express statutory authority to provide for discounts via rebate or discount. MultiCare reasonably relied on HRSAs longstanding implementation of Section 340B when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings all based on an upfront-discount model. A fundamental switch now to a rebate-based approach would disrupt these settled reliance interests created by decades of agency policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours there is no reason to switch to a rebate mechanism, even in so-called pilot form. For more than three decades, HRSA has implemented Section 340B through an upfront point-of-sale discount model, under which covered entities obtain drugs at or below the statutory ceiling price at the time of purchase. Covered entities, including MultiCare, reasonably relied on this consistent, agency-directed framework when designing and maintaining: Internal operational workflows and inventory management systems Pharmacy staffing models and compliance infrastructure Contract pharmacy and wholesaler arrangements Third-party administrator (TPA) contracts and data-exchange architecture Financial planning for the generation and use of 340B savings in furtherance of statutory patient-benefit purposes This reliance is not speculative or incidental. It is embedded in the core operational design of covered-entity pharmacy programs, including compliance safeguards that HRSA itself has required and audited against for decades. While the statute permits either rebates or discounts in theory, HRSAs exclusive and uninterrupted implementation of the program through upfront discounts for over 30 years created settled expectations that this was not merely a permissible option, but the governing operational model of the 340B program. At no point has HRSA: Required covered entities to build or maintain rebate-processing infrastructure Issued guidance signaling a transition away from upfront discounts Identified systemic compliance, pricing, or accountability failures inherent in the upfront discount model Against this backdrop, it was entirely reasonable indeed unavoidable for covered entities to structure themselves around the existing model HRSA mandated, audited and enforced, despite the secretarys statutory authority to permit an alternative mechanism. A fundamental shift from upfront discounts to a rebate-based mechanism even framed as a 9 pilot would severely disrupt settled reliance interests and require covered entities to undertake major structural changes, including: Redesigning pharmacy purchasing and charge capture systems Establishing new financial processes to front drug acquisition costs Revising current budgets to account for the cost of implementing rebate programs and the subsequent losses Assuming cash-flow risk and delayed recovery of statutory discounts Entering or renegotiating complex contractual arrangements with manufacturers or TPAs Absorbing new administrative and reconciliation costs unrelated to patient care These impacts are neither marginal nor theoretical, as demonstrated by our experience with Medicare rebates. They represent structural overhauls of a mature, compliance-driven systems built specifically to operate under an upfront discount framework. Importantly, these burdens would fall most heavily on safety-net providers, rural hospitals and childrens hospitals the very entities Congress intended the 340B program to support. Labeling a rebate approach as a pilot does not mitigate its disruptive effect. Even limited pilots: Force immediate system changes Create uncertainty across the broader program Divert resources away from patient benefit activities Undermine confidence in the stability of HRSAs program administration Agencies are required to account for reliance interests before altering longstanding policies including through pilot programs particularly where regulated entities have structured their operations in good faith around agency guidance. Problems with the Beacon IT platform Under HRSAs original rebate program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the program. MultiCare has experienced a variety of challenges with the Beacon MFP system, the manufacturers platform for managing rebates for the Medicare Transition Facilitator (MTF), and we anticipate encountering similar challenges in the 340B rebate context. One of our primary concerns relates to the terms and conditions, which offer no opportunity for negotiation or adjustment. We are concerned about the requirement to use a system developed solely by manufacturers without input from covered entities. When opposing perspectives exist, it is neither equitable nor prudent for one group to design the entire system without considering feedback from others. Although there appear to have been attempts to enhance transparency within the Beacon MFP platform, these measures do not sufficiently enable covered entities to efficiently manage all aspects of the claims and rebate process. As previously indicated, protecting the interests of our hospitals and patients requires significant investment in creating supplemental systems to ensure comprehensive data management. Furthermore, we received limited time to prepare, as we were 10 still familiarizing ourselves with Beacon MFP for the Medicare rebate process at the start of January. From a technical perspective, Beacon MFP presents several challenges: The inquiry screen cannot be exported, making it difficult to track the status of submitted inquiries. The user interface does not adequately meet the needs of most covered entities, and only a single report is available for download, which limits data management capabilities. Users must manually verify that the 340B price status has been removed after an inquiry is approved, as there is no consolidated view for this information. The absence of a "read only" user option means anyone with access can modify scripts to 340B or submit good faith inquiries. The MFP Beacon report omits the remittance number, preventing efficient reconciliation with the MTF to confirm rebate payments. Permitting manufacturers to design their own system raises significant concerns regarding the level of control granted to manufacturers and how covered entities can resolve issues when they arise. There is a lack of assurance that the technical requirements of covered entities will be adequately addressed, which contributes to apprehension about whether a pilot program will truly allow for meaningful feedback from covered entities to be considered. MultiCare urges HRSA to: Engage subject matter experts from covered entities in both the design and implementation phases of any pilot program. This involvement will help ensure that resulting systems and processes are aligned with the needs of covered entities. Provide clear guidance regarding the objectives and scope of the pilot program. Typically, a pilot is understood to be a limited, controlled initiative rather than a comprehensive overhaul affecting all stakeholder groups. Develop a detailed proposal outlining anticipated outcomes, criteria for success or failure, an actionable exit strategy should the pilot not achieve its goals, and transparent processes for collecting, reviewing, and evaluating stakeholder feedback. Efforts to avoid 340B/MDPNP duplicate discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on MultiCare, HRSA should rely on those other options. Any other decision would privilege the interests of drug companies over those of covered entities, their patients and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity and any other potential benefits. At a minimum, 11 HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Manufacturers argue that duplicate discounts are a major reason to shift the 340B program to a rebate system. However, in our organization, we conduct routine audits of our data to ensure we are preventing duplicate discounts, and we conduct annual third-party audits across our entire program where we are assessed for duplicate discount prevention. We have also been through several HRSA audits without any findings of duplicate discounts. Manufacturers occasionally reach out when they suspect a possible duplicate discount, and we cooperate fully with them to review and discuss those claims. So far, none of these inquiries have uncovered actual duplicate discounts. While such situations might arise occasionally in some programs, they do not seem common nor widespread enough to justify overhauling the entire 340B programs operational model. Currently, there simply is not enough evidence to support such a change. Since the costs of any rebate program will outweigh any expected benefits, we urge HRSA to abandon the rebate concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with a rebate approach, it must allow MultiCare and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a rebate program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. Thank you for considering these comments. We look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Ingrid S. Gourley Mungia, JD VP, Public Policy and Advocacy
HRSA-2026-0001-2252Southwest MS Regional Medical Center2026-04-20T04:00Z7,829 chars
See attached file(s) 215 Marion Avenue, P.O. Box 1307, McComb MS 39648 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Southwest Mississippi Regional Medical Center (SMRMC), I appreciate the opportunity to provide comments regarding the proposed 340B Rebate Model Pilot Program. SMRMC is a rural Disproportionate Share Hospital serving a medically vulnerable population across Southwest Mississippi and neighboring Louisiana parishes. Our patients rely heavily on the services supported by the 340B program, and we rely on the programs longstanding structure to sustain access to care in our community. For that reason, I want to be clear at the outset: we strongly oppose the implementation of a rebate model under the 340B program. The statutory framework governing 340B is straightforward. Section 340B of the Public Health Service Act requires manufacturers to offer covered outpatient drugs to covered entities at or below a defined ceiling price at the point of purchase. The law does not contemplate or authorize a retrospective rebate mechanism. More importantly, the intent of the programto allow covered entities to stretch scarce resources to better serve vulnerable patientsis fundamentally tied to the availability of upfront savings. Replacing that structure with a rebate system not only conflicts with the purpose of the statute but raises serious concerns about whether such a change can be implemented without Congressional action. Beyond these legal concerns, our operational experience makes it clear that the proposed model is not workable in practice. Since January of this year, we have been actively engaged in efforts related to Medicare Fair Price claims and associated processes through the existing ESP and Beacon infrastructure. 215 Marion Avenue, P.O. Box 1307, McComb MS 39648 During that time, our team has devoted hundreds of staff hours attempting to correct claim denials. We have reassigned pharmacists from clinical responsibilities, engaged external reporting resources, and worked closely with vendors to reconcile data across multiple systems. Despite these efforts, we have not successfully resolved a single denied claim. In one instance, we determined that claims were being rejected due to a logic error within the ESP platform itselfnot due to any deficiency in our data. It took more than a month to identify and escalate that issue, and even now we are uncertain whether those claims will ultimately be approved as eligible in the ESP, particularly given the expiration of the 45-day submission window. This experience has made one thing very clear: even when a covered entity does everything correctly, there is no assurance of savings under a rebate-based structure. We estimate that additional FTEs would be needed in finance for rebate reconciliation, pharmacy for claims data submission integrity and portal dispute resolution for a total of at minimum 3 additional FTEs. Additional vendors will need to be brought on as partners to contend with the rapidly compounding degree of complexity of the requirements placed on CEs by pharma to maintain pricing eligibility as the instability of pharma requirements are such that industry expertise is required. This reality stands in stark contrast to the assumption that the administrative burden of such a model would be minimal. The level of effort required is substantial and ongoing. It includes not only initial data submission, but also continuous monitoring, reconciliation, resubmission, and coordination with third-party platforms. In our case, it has already required the diversion of clinical pharmacy resources away from direct patient care impacting activities such as medication safety oversight, clinical rounding, and readmission reduction initiatives. A full-scale rebate model would necessitate additional staffing and infrastructure that we simply do not have today. Compounding this issue is the lack of reliable, integrated data systems to support the proposed requirements. The information needed to submit and validate claims must be pulled from multiple internal platforms, manually reconciled, and reformatted to meet external specifications. Even with investment in customized reporting solutions, the process remains labor-intensive and prone to error. The assumption that required data is readily available and easily transmitted does not reflect the reality on the ground. The financial implications are equally concerning. Under a rebate model, covered entities would be required to purchase drugs at higher upfront costs and then wait for reimbursement. For SMRMC, we project this would result in an increase of approximately $1.25 million in upfront drug spend in 2026 alone, with cumulative exposure reaching $6 million dollars increased annual drug spend by 2028. Even modest denial rates would translate into significant unrecovered costs. At the same time, delays in rebate payments would require CEs to carry additional financial burden, placing strain on our cash flow and overall financial stability. We were also recently advised that the financial sector was 215 Marion Avenue, P.O. Box 1307, McComb MS 39648 looking at configuring short term loans for hospitals specifically to address this gapie the safety net hospitals would not only lose upfront discounts, carry additional costs, and be operationally crippledthey would also pay interest on the upfront costs imposed by the Rebate Model just to keep afloat. For a rural safety-net provider like SMRMC, these pressures are not theoretical. The savings generated through the 340B program directly support uncompensated care, access to high-cost medications, and the continuation of essential services in our community. Redirecting those resources toward administrative functionsor absorbing losses associated with denied or delayed rebateswill inevitably reduce our ability to serve patients. Finally, our experience with the current third-party infrastructure raises serious concerns about readiness for broader implementation. The lack of transparency in claim adjudication, shifting data requirements, and limited avenues for dispute resolution all point to a system that is not yet capable of supporting a program of this scale. Expanding this model nationally without addressing these foundational issues would introduce unnecessary risk for covered entities and the patients they serve. We recognize and support efforts to address duplicate discount concerns within the program. However, a rebate model is not the appropriate solution. Alternative approachessuch as a neutral clearinghouse mechanismshould be considered if additional safeguards are needed, provided they preserve the core structure of upfront discounts and do not impose disproportionate burden on covered entities. In closing, the proposed rebate model would fundamentally alter the 340B program in ways that are inconsistent with both its statutory foundation and its intended purpose. It would introduce significant administrative complexity, financial risk, and operational uncertainty, all of which would ultimately impact patient care. For these reasons, we respectfully urge HRSA to abandon the rebate model and preserve the current upfront discount structure. Thank you for the opportunity to provide input on this important issue. Sincerely, Robert C. Weathersby, MSN-HCA, RN Chief Operating Officer (O) 601.249.1882 | (C) 601.259.4536 robert.weathersby@smrmc.com
HRSA-2026-0001-2253Michael Gomber · Washington, PA, United States2026-04-20T04:00Z50,467 chars
As Chair of the Board of Directors of Cornerstone Care, Inc, a nonprofit Community Health Center in southwest PA, I strongly urge HRSA to exempt community health centers from the 340B Rebate Model Pilot Program and to preserve the longstanding upfront discount structure that is essential to sustaining access to care for the nations most vulnerable populations. From a governance and fiduciary standpoint, the Board is particularly concerned that this model would force Cornerstone Care to divert limited operating resources away from patient care in order to finance medication purchases, manage rebate reconciliation, and respond to denied or delayed paymentsoutcomes over which covered entities would have little control. Even modest disruptions in cash flow or unexpected rebate denials would place immediate pressure on our ability to sustain core services, maintain pharmacy access, and continue programmatic investments targeting lowincome and rural patients. Please see my attached letter for comments in full. April 15, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of the Board of Directors of Cornerstone Care, Inc., I write to express our deep concern regarding the proposed 340B Rebate Model Pilot Program and the significant risk it poses to our organizations ability to fulfill its mission. Cornerstone Care is a nonprofit community health center established to ensure access to comprehensive, affordable healthcare for individuals and families regardless of income or insurance status. For nearly five decades, we have served as a critical safety-net provider across rural and medically underserved communities. The 340B Drug Pricing Program is foundational to this mission. It allows us to stretch scarce federal resources, invest in enabling services, and ensure that life-saving medications remain affordable and available to the patients who depend on us. The proposed rebate model represents a fundamental shift in the 340B program that would undermine the very stability the program was designed to provide. Requiring community health centers to purchase medications at full wholesale acquisition cost and await retrospective manufacturer rebates would introduce severe cash-flow uncertainty, expose providers to uncompensated losses, and place administrative and financial risk squarely on safety-net organizations least able to absorb it. From a governance and fiduciary standpoint, the Board is particularly concerned that this model would force Cornerstone Care to divert limited operating resources away from patient care in order to finance medication purchases, manage rebate reconciliation, and respond to denied or delayed paymentsoutcomes over which covered entities would have little control. Even modest disruptions in cash flow or unexpected rebate denials would place immediate pressure on our ability to sustain core services, maintain pharmacy access, and continue programmatic investments targeting low-income and rural patients. 2 The downstream impact on patients would be profound. Many of the medications included in the rebate pilot are essential treatments for chronic and life-threatening conditions commonly managed in primary care settings. Any loss of affordability or predictability in access would increase the risk of medication nonadherence, treatment delays, and avoidable adverse health outcomes directly conflicting with our mission to improve health and reduce disparities. In short, participation in a 340B rebate pilot would create operational and financial instability that threatens Cornerstone Cares long-term viability and its capacity to serve as a reliable healthcare provider for the communities that rely on us. The Board of Directors cannot reconcile these risks with our responsibility to safeguard the organizations mission, patients, and public trust. For these reasons, we strongly urge HRSA to exempt community health centers from the 340B Rebate Model Pilot Program and to preserve the longstanding upfront discount structure that is essential to sustaining access to care for the nations most vulnerable populations. Thank you for the opportunity to provide this perspective. We appreciate HRSAs consideration and remain committed to constructive engagement on policies that strengthenrather than destabilizethe safety net. Sincerely, Mike Gomber Board Chair Mike Gomber (Apr 20, 2026 12:42:48 EDT) Mike Gomber 3 Detailed Response Brief 340B Rebate Model Pilot Program (HRSA-2026-03042) Cornerstone Care, Inc. expresses its gratitude to the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cornerstone Care is a nonprofit community health center committed to providing high-quality, integrated, and affordable healthcare services to all. We began in 1978 with a simple but powerful belief that everyone deserves access to healthcare. What started in a victorian house in Greensboro, Pennsylvania, has grown into a trusted network of care serving more that 23,000 patients in 2025 in fourteen sites and three mobile units across Greene, Washington, Fayette, and Allegheny counties. As the communities we serve have grown and changed, so has Cornerstone Care. Weve expanded beyond primary care to offer a full range of services including medical, pediatrics, behavioral health, dental, vision and other specialty care. Ensuring patients and families can find the support they need close to home. Through every stage of growth, our focus has remained the same: meeting people where they are with compassionate, patient-centered care. Today, Cornerstone Care continues to build on that foundationstrengthening communities, improving health outcomes, and removing barriers to careso that every individual has the opportunity to live a healthy life. The 340B program has been critical to fueling Cornerstone Cares ability to respond to changing needs in our community. Our analysis indicates that shifting to a rebate model would undermine our ability to continue that responsiveness into the future and would likely force us to curtail existing programs and locations targeting the most underserved patients and communities in our service area. 4 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs while transferring control of the 340B program from HRSA to the manufacturers, giving manufacturers the opportunity to deny the rebates. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. In effect, this model loans 340B savings to manufacturers while providing little to no recourse to covered entities to enforce payback if rebates are denied. For Cornerstone Care in particular, this means it will impact: 23,136 patients served annually by Cornerstone Care 14 locations and 3 Mobile Units serving Greene, Washington, Fayette, and southern Allegheny Counties in PA $319,428 discounts provided to low-income patients annually 2,507 340B transactions annually which would have to be purchased at full price with no guarantee of receiving the rebate The following programs and initiatives currently supported by Cornerstone Cares 340B savings: o Increase access for low-income and rural patients by maintaining and expanding services in underserved communities o Maintain operations of our 3 Mobile Units & our Teaching Health Center Family Medicine Residency Program o Expand pharmacy services and provide discounted or free medications o Support non-revenue generating services or providers (Including CHWs and insurance enrollment assistance) o Expand dental, mental health, and reproductive health services o Expand care coordination and enabling services (e.g., medication/care management, social work services, etc.) o Fund programs to address health-related social risk factors (e.g., transportation, food services, career services, housing support, etc.) o Support workforce/staffing needs including workforce development programs We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 5 II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH 6 health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 7 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cornerstone Care, Inc. provided $319,428.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. External Vendor Costs: Given increased complexity, Cornerstone Care, Inc. anticipates an increase of at least $30,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cornerstone Care, Inc. anticipates needing 2.7 additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cornerstone Care, Inc. anticipates $351,192.82 increased costs for additional staffing annually Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 8 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies across our large service area to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Green, Washington, Fayette and Southern Allegheny Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Because Cornerstone Care serves patients spread across a wide geographic region with 14 locations plus 3 mobile units, having a central contract pharmacy is unfeasible. Contract pharmacies are critical to our ability to provide pharmacy services to all patients throughout our entire service area. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 10 Cornerstone Care makes medications affordable to patients in the following ways: Passing the 340B savings directly on to the patient for insulin and epi-pens Providing a sliding fee discount for patients below 200% Federal Poverty Level for all 340B medications Waiving or reducing fees for patients experiencing financial hardship and never turning any patient away for lack of ability to pay CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 11 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,417,836.15 up-front annually to purchase the drugs impacted by the proposed rebate model between 2026 and 2028. Currently, our organization spends $ 633,544.83 annually to purchase these same drugs at the 340B ceiling price. This represents a 281.64% overall increase in upfront capital required for procurement for the drugs impacted by the proposed rebate model. When looking at individual drugs, the increase in up-front cost is even more extreme. For example, in 2026, the following increases are projected: Drug Percent Increase in Up-Front Cost XARELTO 189,122% FARXIGA 129,735% JARDIANCE 120,175% 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 12 Even those medications with increases in the 100-300% range, once you look at the typical volume purchased in a year, the increase in costs is alarming. On one high volume drug alone, a 244% increase represents a $560,811.66 increase in up-front annual spend for Cornerstone Care. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cornerstone Care anticipates needing to reduce: Scale Back 340B Pharmacy Services: Because the increase in up-front cost is an unsustainable financial risk for our organization, a rebate pilot would force us to remove all drugs impacted by the Pilot from Cornerstone Cares 340B program. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. Our Sliding Fee Discount Program for medications is based on a drugs up-front discount under the 340B program. A rebate pilot would force Cornerstone Care to exclude these highly prescribed life-saving drugs under our Sliding Fee Discount Program. Essential Clinical Services: To offset the reduction in our 340B program, we would be forced to scale back non-revenue-generating but essential services, such as Mobile Medical and Dental Units, our food and nutrition programs in schools, our mental health and primary care expansions, and more. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cornerstone Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. 13 Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cornerstone Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $249,258.88. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cornerstone Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $130,654.08 by 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to request an increase to our line of credit with each wholesaler. Our wholesalers typically require invoice payment within two weeks, which means even with increased credit limits, we will still be forced to exhaust our resources before receiving the rebate, effectively capping our purchasing power every two weeks. Delays in payment will generate late fees, which would increase costs further. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cornerstone Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cornerstone Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of 235,177 in 2027. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 16 Conclusion Cornerstone Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cornerstone Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cornerstone Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Nicole Coneybeer, Pharmacy Program Administrator, at nconeybeer@cornerstonecare.com. Sincerely, Richard T. Rinehart Chief Executive Officer Cornerstone Care, Inc. 340B Advocacy Letter - BOARD CHAIR Rebate Model LTR_2026.04 Final Audit Report 2026-04-20 Created: 2026-04-20 By: Cornerstone Care (corporate@cornerstonecare.com) Status: Signed Transaction ID: CBJCHBCAABAAJIaAl9H_C3FchqWHA8fJyh1xa0MVBT60 "340B Advocacy Letter - BOARD CHAIR Rebate Model LTR_20 26.04" History Document created by Cornerstone Care (corporate@cornerstonecare.com) 2026-04-20 - 2:03:58 PM GMT Document emailed to Mike Gomber (mikegomber23@gmail.com) for signature 2026-04-20 - 2:04:05 PM GMT Email viewed by Mike Gomber (mikegomber23@gmail.com) 2026-04-20 - 4:42:16 PM GMT Document e-signed by Mike Gomber (mikegomber23@gmail.com) Signature Date: 2026-04-20 - 4:42:48 PM GMT - Time Source: server Agreement completed. 2026-04-20 - 4:42:48 PM GMT
HRSA-2026-0001-2254Brodstone Healthcare2026-04-20T04:00Z12,875 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of our critical access hospital covered entity, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on our covered entity that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which our covered entity has relied since 2011, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Our covered entity has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that we can spend on patient care and comprehensive health care services. 2 Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require us to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. With current published WAC prices and historical utilization of the past 12 months of NDCs proposed to be included in the Rebate Model, our covered entity looks to spend $1.84 million more dollars in upfront costs of medications that would then need to be recuperated from each manufacturer to be made whole. Wholesalers who already have robust technology systems in place will no longer have to request rebates from these manufacturers for drugs purchased on 340B accounts to be made whole. The burden will be placed on covered entities to submit claim data, receive payment, reconcile payment, and troubleshoot informational technology blunders and claim denials. Onboarding of the Rebate Model has already cost the covered entity in upwards of $10,000 in administrator and pharmacist time attending webinars with Beacon, TPA software, and EHR vendors to prepare for such a rebate model. If approved, these expenses will be incurred again as new onboarding and education will need to be completed for implementation. Covered entity pharmacy staff personnel will have to be diverted away from patient care activities which includes preventing readmissions, medication education, drug monitoring, and obtaining medication access for patients to accomplish new processes to ensure as close to 100% rebate capture of the extra $1.84 million in drug spend. Staffing Impacts Under a Potential 340B Rebate Program. Our covered entity does not currently have the staff needed to comply with a Rebate Program. Our covered entity will have to invest in human capital in upwards of $275,000 or $350,000 in contracted services per year to fulfill some of these obligations of a proposed rebate model. 3 We anticipate to either hire a full-time equivalent staff member knowledgeable in 340B best practices or contract with a service provider if a rebate pilot were to be implemented. HRSAs estimate of 5 hours per week to submit claims, receive and reconcile payment, and troubleshoot claim denials is grossly underestimated. We would estimate that a covered entity of our size and situation would require 20 hours per week or more between the basic functions and tasks of claim submission, checking claim status, following up on claim denials, and linking pharmacy claims to rebate payment serial numbers within the rebate platform. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our covered entity has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Data readiness is still not available from the covered entitys EHR vendor for the required data specifications for medical claim submission to the proposed rebate pilot designated platform despite being announced last Fall. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Our Covered Entity takes great care in being in compliance with the requirements of the 340B Statue to prevent diversion and duplicate discounts for 340B drugs. We contract with two separate 340B services providers to conduct quarterly and annual auditing of contract pharmacy dispenses and mixed-use utilization totally more than $24,000 per year in additional program management expense. In addition to that, Covered Entity pharmacy personnel routinely audit contract pharmacy dispenses and mixed-use utilization to ensure program integrity which accounts for 5 hours per week away from patient care activities. Current methods utilized to ensure that the Covered Entity is purchasing drugs at the 340B price would have to change as the price in the wholesaler account will be 4 a WAC price. The change would increase the amount of time it takes to verify the Covered Entity is paying a 340B price. Rebate data from the Rebate Pilot platform will have to be downloaded and stored to maintain auditable records for compliance. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force our covered entity to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. We estimate that at any given time at least $100,000 will have to be readily available in addition to what is already allocated to provide prompt payment to our contracted wholesalers for the purchase of these Rebate Pilot medications at WAC pricing. This $100,000 could be used to purchase equipment that expands patient care services, invested into a longer term, higher rate performing investment option, or available for indigent patient care. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that our covered entity will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Without the 340B Drug Pricing Program, our Covered Entity would not be able to provide all of the comprehensive healthcare services at their current state to the number of patients we are currently serving. Services that were gained and expanded due to drug savings from the 340B Drug Pricing Program are at risk of being scaled back or eliminated which includes oncology, mental health, therapy, community benefit, education, wellness, and more. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor 5 reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Our covered entity reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on our covered entity HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, our covered entity submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow our covered entity and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. 6 Sincerely, Pharmacy Director and 340B Committee Critical Access Hospital Rural Nebraska
HRSA-2026-0001-2255City of Cincinnati Health Department2026-04-20T04:00Z100,029 chars
Sorry I forgot to sign this! My apologies. Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of City of Cincinnati Health Department (CHD), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHDs posed by the proposed rebate model. The 340B program is foundational to CHDs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHDs six pharmacy operations. Based on national assessments from NACHC, we know that we are facing staggering impacts: Financial Losses: CHDs anticipates a conservative loss of over $750,000 over the next 3 years from our six entity-owned pharmacy operations and continual losses exceedingly over $500,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHD anticipates significant increases in operational costs. National data shows that a single mid-sized Community Health Center (CHC) expects to incur over $3 million in additional costs to manage the pilot. About CHD Founded in 1826, the Cincinnati Health Department (CHD) is committed to protecting and improving the health of the people of Cincinnati. As a nationally recognized leader in public health, CHD advocates responsive health and human services that promote healthy living environments and social wellbeing. It strives to reduce inequities such as poverty and unemployment, which often negatively impact peoples health. City of Cincinnati Primary Care (CCPC), a clinical division of CHD, is a Federally Qualified Health Center (FQHC) and serves more than 45,413 patients annually. It operates six primary care health centers, offering medical, OB-GYN, pediatrics, and behavioral health. All the centers have on-site pharmacies, and five offer dental services. CCPC also runs 13 full-service school- based health centers located within Cincinnati Public Schools. These health centers, which currently serve more than 10,000 students, also serve the medical needs of children and families in the community. Five of these school-based health centers offer dental services and two offer vision services. Additionally, CCPC has a free-standing dental center in Avondale. Additionally, CHD offers a variety of other services to protect and enhance the health and wellbeing of the citizens of Cincinnati. Communicable Disease Prevention and Control respond 2 to all reportable disease and outbreak reports in Cincinnati. Environmental Health keeps Cincinnati safe through licensing and inspections to prevent and reduce the risk of environmental health hazards, such as disease or injury associated with tobacco smoke, food-restaurants, water, animals, rodents, insects, and waste. Healthy Communities provides health education at the individual and community levels and promotes sustainable healthy behavior change through the implementation of policy, system, and environmental changes. CHD also has a dedicated team that responds to lead poisoning in Cincinnati's children. Women, Infants, and Children (WIC) is a special supplemental nutrition and education program for eligible women who are pregnant, breastfeeding, or postpartum and infants and children up to age 5. Public Health Nurses (PHNs) in the Complex Medical Help (CMH) Program provide care coordination, health education, and advocacy for children and families with complex medical needs. PHNs collaborate closely with health care providers and community resources to improve health outcomes and ensure families have access to appropriate services. Community Health Workers (CHWs) provide essential services that support and connect women to available resources and educational opportunities throughout pregnancy. CHWs work closely with medical staff to reduce barriers to care and improve health outcomes for both mothers and their newborns. Vital Statistics provides birth and death certificates. Emergency Preparedness safeguards public health during emergencies, from natural disasters to intentional threats. Mission: To work for the health and wellness of Cincinnati citizens, employing methods that include surveillance, assessment, disease prevention, health education, and assuring access to public health services. Vision: The Cincinnati Health Department will be a public health leader for building and maintaining a healthy and safe community. Core Values: Collaboration We believe in being an active member of our community, participating in conversations and engaging with each other productively and respectfully to achieve common goals. Commitment We foster a culture of compassion and mutual respect among our employees and clients and recognize diversity as a strength in our organization and community. Accountability We demonstrate the highest level of respect, integrity and professionalism, guided by our sense of trust and morality. We are dedicated to cultivating a sense of transparency both internally and with the general public. Quality We honor our mission by upholding excellence in personal, public health and patient care services. We strive to be the model for public health practice to continuously improve health and social equity for people of Cincinnati. We measure performance outcomes and social determinants of health through continuous quality improvement. Health Equity & Access We strive to eliminate disparities and assure that everyone has a fair and just opportunity to be healthy. We work toward the timely availability of personal health services to achieve the best health outcomes. 3 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHDs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled us to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring us to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHDs ability to serve over 45,000 patients who rely on us. For us, this means it will impact: 120,000 340B prescriptions yearly causing us to have over $1 million more in upfront cost to purchase medications! Limit our ability stretch scarce Federal resources as far as possible. For programs such as Continuous Blood Glucose monitors for uninsured patients, clinical pharmacy services for uncontrolled hypertension and diabetic patients (this would increase ED visits and increase health care costs) Increased access to primary care visits for uninsured and underinsured patients Support for chronic disease management programs (e.g., diabetes, hypertension clinics) Extended clinical hours and additional provider staffing Vaccination outreach and immunization clinics Screening programs (cancer, cardiovascular risk, infectious diseases) Smoking cessation and lifestyle modification programs Community health education initiatives Eligibility and enrollment assistance (Medicaid, ACA marketplace) Social work services and housing support referrals Language interpretation services Patient navigation programs Key Impact Overall, 340B savings allow FQHCs to reinvest in access, staffing, medication affordability, and wraparound services, improving both clinical outcomes and health equity for vulnerable populations. We strongly urge HRSA to exempt ALL Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHDs serve. For uninsured and underinsured patients who rely on the 4 affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause our patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 6 Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- potential operational capabilities. Staffing Impact: CHD anticipates needing 80 hours of additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. The addition of the MTF portal, Beacon and 340B ESP has created more administrative tasks to review, create and upload reports for manufactures that already have a mechanism to review potential probate errors. External Vendor Costs: Given increased complexity, CHD anticipates an increase of $2 million in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments 40 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CHD urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $100K will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our health centers, which serves 45,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2.5 million annually. The In-House Pharmacy: The Burden of Deep IT Integration We operate 6 of our own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure hire outside vendors to track these claims. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools at least $600,000 and a yearly cost of $125,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 80 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. We currently partners with CVS, Krogers and Walgreen pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 60 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in City of Cincinnati with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full 11 Internal NACHC survey data 9 WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. If a rebate-based model disrupts the ability of the City of Cincinnati Health Department to apply sliding fee discounts at the point of sale, it would directly create financial and access barriers for patients, particularly low-income populations. For example, a patient with Type 2 Diabetes who qualifies for a sliding fee discount may currently receive affordable insulin or oral therapy at the time of pickup. Under a rebate model, the patient could instead be required to pay the full retail price upfront and wait for a delayed rebate or reimbursement, which is often unrealistic for individuals living paycheck-to-paycheck. This delay or inability to pay can lead to skipped doses or failure to fill in prescriptions. Similarly, patients with Hypertension may forgo refilling maintenance medications due to upfront cost burden, increasing the risk of uncontrolled blood pressure, emergency department visits, and long-term cardiovascular complications. For the City of Cincinnati Health Department, which serves a high proportion of vulnerable and uninsured patients, this shift would undermine the core mission of equitable access by reducing medication adherence, increasing health disparities, and weakening the effectiveness of chronic disease management programs supported through the 340B Drug Pricing Program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1.9 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends little less than $200K to purchase these same drugs at the 340B ceiling price. This represents a 66% increase this year, 165% in 2027 and 207% in 2028 increase in upfront capital required for procurement! This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHD anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as School Base Health Centers, Mental Health Services and other potential clinical services. Operating Hours: We are reviewing if we would need to reduce our clinic hours per week, specifically impacting on our evening and weekend hours, which are the only times our working-class can seek care without losing wages. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our growing uninsured patients (currently at 33% of our patient population) from rationing their insulin or heart medication. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund staffing needs or operational needs. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. 12 The City of Cincinnati Health Department (CHD) asserts that extending and further utilizing current lines of credit to finance drug procurement represents a high-risk financial strategy that places the organization in a state of financial uncertainty. This approach undermines the intent of the 340B Drug Pricing Program, which is designed to stretch limited federal resources to support patient care, by redirecting funds toward interest expense, origination fees, and ongoing debt service obligations. Relying on credit to bridge anticipated manufacturer rebates creates additional financial vulnerability, particularly in the context of unstable revenue streams and escalating pharmaceutical costs. CHD is currently experiencing approximately $750,000 in credit-related constraints, and wholesalersfacing their own liquidity pressures in the current economic environmentare increasingly reluctant to expand credit limits, further compounding operational risk and limiting procurement flexibility. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CHD estimates its 2027 Annual Rebate Opportunity Cost to be approximately $2.7 million This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar paid upfront at Wholesale Acquisition Cost (WAC) becomes effectively frozen within the manufacturer rebate reconciliation process. While the organization awaits rebate recovery, critical liquidity is reduced, limiting the ability to respond quickly to public health needs, operational demands, or facility-level emergencies. To operate a rebate-based model, the organization would be required to either establish or expand reliance on a line of credit and/or utilize limited financial reserves. This approach is not sustainable, as associated with financing costsincluding interest expense and feesare estimated at approximately $2 million annually. These funds would otherwise support essential public health priorities, such as: Chronic disease management programs for conditions like Type 2 Diabetes and Hypertension, including pharmacist-led clinics and medication therapy management Prenatal and maternal health services, including high-risk pregnancy monitoring and post-partum care coordination Behavioral health integration, including expanded access to counseling, psychiatric services, and substance use disorder treatment programs 13 Preventive care initiatives such as immunizations, cancer screenings, and cardiovascular risk reduction programs Workforce expansion, including recruitment and retention of nurse practitioners, pharmacists, and care coordinators to support increased patient demand Medication access and adherence programs, including sliding fee scale pharmacy services and patient assistance initiatives These programs represent core components of the safety-net mission and are directly supported through reinvested savings generated under the 340B Drug Pricing Program. Requiring community health centers (CHCs) to assume debt to maintain medication procurement creates financial strain and introduces operational instability. In regions where patients depend heavily on us as a safety-net provider, reaching credit limits or depleting reserves poses a direct risk to continuity of care and community health access. If the organization is forced into a prolonged state of financial uncertainty, the downstream effects are immediate and measurable: reduced service capacity, longer appointment wait times, constrained pharmacy operations, and diminished ability to provide affordable medications through the 340B Drug Pricing Program. Ultimately, this undermines the core mission of delivering timely, equitable, and accessible care to the populations most reliant on safety-net services. a. Financial Impact of Rebate Denials and Delays The City of Cincinnati Health Department urges HRSA to recognize that absent rigorous and non-discretionary safeguards, the rebate model functions less as a pricing mechanism and more as a material financial liability for covered entities. Under the proposed framework, manufacturers effectively become the sole arbiters of CHCs statutory savings, creating an environment of financial uncertainty and potential harm to safety-net operations. The structure outlined in the previously proposed 340B Drug Pricing Program rebate pilot allows for rebate denials based on broad or non-transparent rationales, such as duplicate rebate or MFP deduplication, without requiring manufacturers to provide sufficient data or documentation to enable covered entities to validate, reconcile, or appeal those determinations. This lack of transparency limits accountability and undermines the integrity of the reimbursement process. In practice, when a rebate is denied, the CHC incurs a direct financial loss on the transaction having already purchased the medication at Wholesale Acquisition Cost (WAC) and dispensed it to the patient at a reduced or discounted rate. Given current utilization volumes across the selected therapeutic classes, even a conservative 510% denial rate would translate into an estimated $12 million annual net loss. This level of unrecovered cost is not sustainable within a safety-net budget and would represent a direct diversion of resources away from essential patient services. 14 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 15 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion 16 The City of Cincinnati Health Department strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The City of Cincinnati Health Department believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The City of Cincinnati Health Department appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contactThe City of Cincinnati Health Department. Sincerely, Joyce Tate CEO City of Cincinnati Health Department Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of City of Cincinnati Health Department (CHD), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHDs posed by the proposed rebate model. The 340B program is foundational to CHDs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHDs six pharmacy operations. Based on national assessments from NACHC, we know that we are facing staggering impacts: Financial Losses: CHDs anticipates a conservative loss of over $750,000 over the next 3 years from our six entity-owned pharmacy operations and continual losses exceedingly over $500,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHD anticipates significant increases in operational costs. National data shows that a single mid-sized Community Health Center (CHC) expects to incur over $3 million in additional costs to manage the pilot. About CHD Founded in 1826, the Cincinnati Health Department (CHD) is committed to protecting and improving the health of the people of Cincinnati. As a nationally recognized leader in public health, CHD advocates responsive health and human services that promote healthy living environments and social wellbeing. It strives to reduce inequities such as poverty and unemployment, which often negatively impact peoples health. City of Cincinnati Primary Care (CCPC), a clinical division of CHD, is a Federally Qualified Health Center (FQHC) and serves more than 45,413 patients annually. It operates six primary care health centers, offering medical, OB-GYN, pediatrics, and behavioral health. All the centers have on-site pharmacies, and five offer dental services. CCPC also runs 13 full-service school-based health centers located within Cincinnati Public Schools. These health centers, which currently serve more than 10,000 students, also serve the medical needs of children and families in the community. Five of these school-based health centers offer dental services and two offer vision services. Additionally, CCPC has a free-standing dental center in Avondale. Additionally, CHD offers a variety of other services to protect and enhance the health and wellbeing of the citizens of Cincinnati. Communicable Disease Prevention and Control respond to all reportable disease and outbreak reports in Cincinnati. Environmental Health keeps Cincinnati safe through licensing and inspections to prevent and reduce the risk of environmental health hazards, such as disease or injury associated with tobacco smoke, food-restaurants, water, animals, rodents, insects, and waste. Healthy Communities provides health education at the individual and community levels and promotes sustainable healthy behavior change through the implementation of policy, system, and environmental changes. CHD also has a dedicated team that responds to lead poisoning in Cincinnati's children. Women, Infants, and Children (WIC) is a special supplemental nutrition and education program for eligible women who are pregnant, breastfeeding, or postpartum and infants and children up to age 5. Public Health Nurses (PHNs) in the Complex Medical Help (CMH) Program provide care coordination, health education, and advocacy for children and families with complex medical needs. PHNs collaborate closely with health care providers and community resources to improve health outcomes and ensure families have access to appropriate services. Community Health Workers (CHWs) provide essential services that support and connect women to available resources and educational opportunities throughout pregnancy. CHWs work closely with medical staff to reduce barriers to care and improve health outcomes for both mothers and their newborns. Vital Statistics provides birth and death certificates. Emergency Preparedness safeguards public health during emergencies, from natural disasters to intentional threats. Mission: To work for the health and wellness of Cincinnati citizens, employing methods that include surveillance, assessment, disease prevention, health education, and assuring access to public health services. Vision: The Cincinnati Health Department will be a public health leader for building and maintaining a healthy and safe community. Core Values: Collaboration We believe in being an active member of our community, participating in conversations and engaging with each other productively and respectfully to achieve common goals. Commitment We foster a culture of compassion and mutual respect among our employees and clients and recognize diversity as a strength in our organization and community. Accountability We demonstrate the highest level of respect, integrity and professionalism, guided by our sense of trust and morality. We are dedicated to cultivating a sense of transparency both internally and with the general public. Quality We honor our mission by upholding excellence in personal, public health and patient care services. We strive to be the model for public health practice to continuously improve health and social equity for people of Cincinnati. We measure performance outcomes and social determinants of health through continuous quality improvement. Health Equity & Access We strive to eliminate disparities and assure that everyone has a fair and just opportunity to be healthy. We work toward the timely availability of personal health services to achieve the best health outcomes. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHDs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled us to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring us to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHDs ability to serve over 45,000 patients who rely on us. For us, this means it will impact: 120,000 340B prescriptions yearly causing us to have over $1 million more in upfront cost to purchase medications! Limit our ability stretch scarce Federal resources as far as possible. For programs such as Continuous Blood Glucose monitors for uninsured patients, clinical pharmacy services for uncontrolled hypertension and diabetic patients (this would increase ED visits and increase health care costs) Increased access to primary care visits for uninsured and underinsured patients Support for chronic disease management programs (e.g., diabetes, hypertension clinics) Extended clinical hours and additional provider staffing Vaccination outreach and immunization clinics Screening programs (cancer, cardiovascular risk, infectious diseases) Smoking cessation and lifestyle modification programs Community health education initiatives Eligibility and enrollment assistance (Medicaid, ACA marketplace) Social work services and housing support referrals Language interpretation services Patient navigation programs Key Impact Overall, 340B savings allow FQHCs to reinvest in access, staffing, medication affordability, and wraparound services, improving both clinical outcomes and health equity for vulnerable populations. We strongly urge HRSA to exempt ALL Community Health Centers from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHDs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause our patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-potential operational capabilities. Staffing Impact: CHD anticipates needing 80 hours of additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. The addition of the MTF portal, Beacon and 340B ESP has created more administrative tasks to review, create and upload reports for manufactures that already have a mechanism to review potential probate errors. External Vendor Costs: Given increased complexity, CHD anticipates an increase of $2 million in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments 40 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CHD urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $100K will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our health centers, which serves 45,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $2.5 million annually. The In-House Pharmacy: The Burden of Deep IT Integration We operate 6 of our own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure hire outside vendors to track these claims. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools at least $600,000 and a yearly cost of $125,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 80 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. We currently partners with CVS, Krogers and Walgreen pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 60 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in City of Cincinnati with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. If a rebate-based model disrupts the ability of the City of Cincinnati Health Department to apply sliding fee discounts at the point of sale, it would directly create financial and access barriers for patients, particularly low-income populations. For example, a patient with Type 2 Diabetes who qualifies for a sliding fee discount may currently receive affordable insulin or oral therapy at the time of pickup. Under a rebate model, the patient could instead be required to pay the full retail price upfront and wait for a delayed rebate or reimbursement, which is often unrealistic for individuals living paycheck-to-paycheck. This delay or inability to pay can lead to skipped doses or failure to fill in prescriptions. Similarly, patients with Hypertension may forgo refilling maintenance medications due to upfront cost burden, increasing the risk of uncontrolled blood pressure, emergency department visits, and long-term cardiovascular complications. For the City of Cincinnati Health Department, which serves a high proportion of vulnerable and uninsured patients, this shift would undermine the core mission of equitable access by reducing medication adherence, increasing health disparities, and weakening the effectiveness of chronic disease management programs supported through the 340B Drug Pricing Program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1.9 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends little less than $200K to purchase these same drugs at the 340B ceiling price. This represents a 66% increase this year, 165% in 2027 and 207% in 2028 increase in upfront capital required for procurement! This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CHD anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as School Base Health Centers, Mental Health Services and other potential clinical services. Operating Hours: We are reviewing if we would need to reduce our clinic hours per week, specifically impacting on our evening and weekend hours, which are the only times our working-class can seek care without losing wages. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our growing uninsured patients (currently at 33% of our patient population) from rationing their insulin or heart medication. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund staffing needs or operational needs. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. The City of Cincinnati Health Department (CHD) asserts that extending and further utilizing current lines of credit to finance drug procurement represents a high-risk financial strategy that places the organization in a state of financial uncertainty. This approach undermines the intent of the 340B Drug Pricing Program, which is designed to stretch limited federal resources to support patient care, by redirecting funds toward interest expense, origination fees, and ongoing debt service obligations. Relying on credit to bridge anticipated manufacturer rebates creates additional financial vulnerability, particularly in the context of unstable revenue streams and escalating pharmaceutical costs. CHD is currently experiencing approximately $750,000 in credit-related constraints, and wholesalersfacing their own liquidity pressures in the current economic environmentare increasingly reluctant to expand credit limits, further compounding operational risk and limiting procurement flexibility. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, CHD estimates its 2027 Annual Rebate Opportunity Cost to be approximately $2.7 million This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar paid upfront at Wholesale Acquisition Cost (WAC) becomes effectively frozen within the manufacturer rebate reconciliation process. While the organization awaits rebate recovery, critical liquidity is reduced, limiting the ability to respond quickly to public health needs, operational demands, or facility-level emergencies. To operate a rebate-based model, the organization would be required to either establish or expand reliance on a line of credit and/or utilize limited financial reserves. This approach is not sustainable, as associated with financing costsincluding interest expense and feesare estimated at approximately $2 million annually. These funds would otherwise support essential public health priorities, such as: Chronic disease management programs for conditions like Type 2 Diabetes and Hypertension, including pharmacist-led clinics and medication therapy management Prenatal and maternal health services, including high-risk pregnancy monitoring and post-partum care coordination Behavioral health integration, including expanded access to counseling, psychiatric services, and substance use disorder treatment programs Preventive care initiatives such as immunizations, cancer screenings, and cardiovascular risk reduction programs Workforce expansion, including recruitment and retention of nurse practitioners, pharmacists, and care coordinators to support increased patient demand Medication access and adherence programs, including sliding fee scale pharmacy services and patient assistance initiatives These programs represent core components of the safety-net mission and are directly supported through reinvested savings generated under the 340B Drug Pricing Program. Requiring community health centers (CHCs) to assume debt to maintain medication procurement creates financial strain and introduces operational instability. In regions where patients depend heavily on us as a safety-net provider, reaching credit limits or depleting reserves poses a direct risk to continuity of care and community health access. If the organization is forced into a prolonged state of financial uncertainty, the downstream effects are immediate and measurable: reduced service capacity, longer appointment wait times, constrained pharmacy operations, and diminished ability to provide affordable medications through the 340B Drug Pricing Program. Ultimately, this undermines the core mission of delivering timely, equitable, and accessible care to the populations most reliant on safety-net services. Financial Impact of Rebate Denials and Delays The City of Cincinnati Health Department urges HRSA to recognize that absent rigorous and non-discretionary safeguards, the rebate model functions less as a pricing mechanism and more as a material financial liability for covered entities. Under the proposed framework, manufacturers effectively become the sole arbiters of CHCs statutory savings, creating an environment of financial uncertainty and potential harm to safety-net operations. The structure outlined in the previously proposed 340B Drug Pricing Program rebate pilot allows for rebate denials based on broad or non-transparent rationales, such as duplicate rebate or MFP deduplication, without requiring manufacturers to provide sufficient data or documentation to enable covered entities to validate, reconcile, or appeal those determinations. This lack of transparency limits accountability and undermines the integrity of the reimbursement process. In practice, when a rebate is denied, the CHC incurs a direct financial loss on the transactionhaving already purchased the medication at Wholesale Acquisition Cost (WAC) and dispensed it to the patient at a reduced or discounted rate. Given current utilization volumes across the selected therapeutic classes, even a conservative 510% denial rate would translate into an estimated $12 million annual net loss. This level of unrecovered cost is not sustainable within a safety-net budget and would represent a direct diversion of resources away from essential patient services. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The City of Cincinnati Health Department strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The City of Cincinnati Health Department believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The City of Cincinnati Health Department appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contactThe City of Cincinnati Health Department. Sincerely, Joyce Tate CEO City of Cincinnati Health Department
HRSA-2026-0001-2256Kentucky Hospital Association2026-04-20T04:00Z12,509 chars
Please see the attached response from the Kentucky Hospital Association to the RFI relating to the 340B Rebate Model Pilot Program. Thanks! P.O. Box 436629 l Louisville, Kentucky 40253-6629 l (502) 426-6220 l www.kyha.com April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: The Kentucky Hospital Association (KHA) represents all hospitals and health systems in the Commonwealth of Kentucky, including 79 hospitals that participate in the 340B program. On behalf of our members, KHA appreciates the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on our member hospitals in Kentucky that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Kentuckys 340B hospitals have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. The Kentucky Hospital Association has done its best to provide detailed answers in the limited time available to us and we have encouraged our member hospitals to provide detailed responses to this RFI. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Kentucky hospitals can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Kentuckys hospitals to spend significant sums on new administrative costs. When our members chose to participate in the 340B program, they understood that they would incur some reasonable administrative costs. They designed their hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on these institutions that go far above and beyond what had been expected and planned for as a 340B hospitaland far above and beyond what hospitals are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Our members do not currently have the staff needed to comply with a Rebate Program. This type of program would require additional full-time employees be hired at each hospital and also require current medical providers to reallocate work hours from medical care to perform administrative functions. HRSAs current estimate of only 5 hours per week in additional work is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our members have designed their technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force our members to incur significant costs to change those systems, at a time when hospital budgets are already strained. It will be difficult to provide medical claims data without involving manual work, which only increases the costs and time demands on our members. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force our members to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our hospitals and the patients they serve. Many of our hospitals do not have the cash on hand to withstand a rebate model. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Kentuckys 340B hospitals will no longer be able to use 340B savings as effectively and comprehensively as they did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The 340B program has successfully allowed health care providers to stretch scarce federal resources to better serve patients and communities and to support essential services, consistent with Congressional objectives, since the program began over 30 years ago. The savings 340B hospitals achieve through purchasing certain outpatient drugs at a discount allow them to provide a range of programs and services that directly benefit their patients. General examples include services like medication therapy management, diabetes education and counseling, behavioral health services, opioid treatment services, and the provision of free or discounted drugs. One of our health systems recently shared the following information about their 340B program specifics: Oncology medications are a large contributor to our 340B savings. These patients are much more medically complex than those treated in physician offices. Our hospital outpatient departments help to navigate multiple aspects of a patients specific circumstances to care and treat the patient. In Fiscal Year 2021-2022 here are some of the wrap around services provided to the patients that are not billed, but needed to ensure patients get timely, quality care: Social worker supported 975 patients with applications and connecting patients to community resources Oncology nurse navigators worked with 786 patients to educate them, answer questions and support their needs Outpatient oncology dieticians worked with 1124 patients, supporting them with nutrition counseling, education/nutrition for feeding and PEG tubes Tumor boards have brought together a multi-disciplinary team to develop a plan for patient treatment for 754 patients A named MD completed 70 peer to peer consults for patients Transportation needs were supported for approximately 1,200 patients Oncology pharmacists provide post care management in conjunction with provider Another health system recently shared: Our organization utilizes savings generated to directly fund all outpatient medication vouchers needs for its indigent and underserved patient populations. In addition to medication vouchers, participation in the program provides access to 340B pricing to ensure cutting edge therapies are available to our patients that would otherwise be cost- prohibitive (e.g., gene therapies). Furthermore, pharmacy services have expanded across the enterprise by integrating pharmacists in new and existing acute and ambulatory service lines, which would not have been possible without program participation. A recent example of pharmacy service expansion includes developing a pharmacist-run hepatitis C virus (HCV) program out of our emergency department. Those are just a few of the real-life examples of how the savings generated from the 340B program goes directly back into serving the needs of our Kentucky communities, our state, our citizens. The 340B program is vital to continue serving and assisting patients throughout the Commonwealth of Kentucky and changing to the proposed rebate model would drastically and negatively impact our hospitals. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Kentuckys 340B hospitals reasonably relied on this history when designing their internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like those in Kentucky, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Kentuckys 340B hospitals, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, the Kentucky Hospital Association respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow the Kentucky Hospital Association and our member 340B hospitals and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Donna Little Associate Vice President for Health Policy and Regulatory Affairs
HRSA-2026-0001-2257Adventist Health Castle2026-04-20T04:00Z10,544 chars
Adventist Health Castle Adventist Heakthas Adventist Health Castle 640 Ulukahiki St Kailua. HI 96734 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Adventist Health Castle. a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administration's (HRSA's) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSA's interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible. reaching more eligible patients and providing more comprehensive services. "wc,,77 Adventist H e Lt. h Adventist Health Castle has strived to provide HRSA with detailed responses to the RFI's 30 questions. For cost-estimating purposes, we assume any future rebate program would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027 consistent with HRSA's February 25, 2026 Information Coliection Request Adverse impacts on Patient Care and Community Services Adventist Health Castle is a 60-bed acute care hospital and the only level III trauma center on the Windward side of Oahu. As a critical access point for emergency care, the hospital plays an essential role during natural disasters and traffic disruptions, when access to medical services can be significantly limited. In addition to providing maternity services, Adventist Health Castle serves as a vital support system for its community, especially given that the nearest alternative hospitals are approximately 20 miles away, over the challenging terrain of the Koolau mountain range. This distance can make travel difficult and time-consuming, further underscoring the hospital's importance for ensuring continuous, high-quality care for residents in and around Kailua. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Castle would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits have enabled Adventist Health Castle to expand and strengthen its oncology department. With the support of 340B savings, Castle has invested in advanced oncology services, allowing patients to access critical cancer treatments and medications at free or reduced cost. These benefits have also allowed Castle to offer specialized care and support programs for uninsured and underinsured individuals facing cancer diagnoses. Because of340B, the hospital has been able to recruit experienced oncology staff, provide comprehensive patient education, and ensure seamless access to necessary therapies, resulting in improved outcomes and a higher quality of care for cancer patients in our community. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Castle to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. "No Adventist Health\ Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Castle has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Castle would be $53,956.40 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Castle does not currently submit data to 340B ESP We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Castle is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund Adventist )-1Pa it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities' rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Castle to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $4,035,591.38 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. Due to the rebate model, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $403,559.14 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Castle, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/ MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Adventist Health\ Conclusion For these reasons, Adventist Health Castle respectfully submits that the costs of any rebate model are Iikely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive (Drefkej@ah.org) if you have any questions or would like additional information. Sincerely, Nicolas Johnson Finance Officer
HRSA-2026-0001-2258Ashley County Medical Center2026-04-20T04:00Z9,316 chars
See attached file(s) ACMC ASHLEY COUNTY MEDICAL CENTER 1015 Unity Road P.O. Box 400 Crossett, AR 71635 Phone: (870) 364-4111 Fax: (870) 364-1245 www.acmconline.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: Ashley County Medical Center submits these comments in response to HRSA's Request for Information on the 340B Rebate Model Pilot Program. Ashley County Medical Center is a Critical Access Hospital located in Crossett, Arkansas, and has participated in the 340B program since January 2011. The savings generated by the program over the last fifteen years have been foundational to how we operate as a safety-net provider. We respectfully urge HRSA to abandon the proposed rebate model. Financial Impact Applying the proposed rebate mechanics to our 2025 claims data for the drugs selected under the Medicare Drug Price Negotiation Program, and recognizing that the drugs added to the MFP list in 2026 remain in effect alongside the drugs added in 2027, Ashley County Medical Center's current 340B acquisition cost for the full set of selected drugs in 2027 is approximately $597,000. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on those same drugs rises to approximately $3,436,000 in 2027. The selected drugs represent 61.0% of our total 340B program. The working capital we would be required to float to drug manufacturers before any rebate arrives totals approximately $2.84 million in the first year of this proposed pilot. For a Critical Access Hospital, that is not a manageable cash flow adjustment. any rebate arrives totals approximately $2.84 million in the first year of this proposed pilot. For a Critical Access Hospital, that is not a manageable cash flow adjustment. If HRSA were to extend the rebate mechanism beyond the pilot to the full 340B program, the combined annual upfront capital requirement for Ashley County Medical Center would rise to approximately $4.04 million on an ongoing basis. The Maximum Fair Price is already compressing our 340B savings on the selected drugs, independent of any rebate mechanism. In the first quarter of 2026, approximately 28% of our would-be 340B savings on the selected drugs were eliminated. That reduction has been absorbed before any rebate mechanism has been implemented. Layering a rebate model on top of this compression asks Ashley County Medical Center to absorb two distinct losses on the same drugsthe savings MFP has already taken, and the capital float and denial exposure a rebate mechanism would introduce. Operational and Reliance Concerns The rebate model inverts the financial risk architecture of the 340B program. Under the current upfront discount mechanism, the statutory discount is built into acquisition. Under a rebate mechanism, the covered entity floats the full WAC cost and bears the risk that rebate claims may be denied, delayed, or disputed by the same manufacturers that have spent the past five years pursuing unilateral policies restricting 340B pricing at contract pharmacies. Those manufacturer restrictions remain the subject of ongoing litigation and regulatory dispute. A rebate model places those same manufacturers in the position of adjudicating claims on the very dispenses they have been seeking to exclude from 340B through other means. Our wholesaler arrangements compound this exposure. Those arrangements are configured around 340B acquisition pricing, not WAC. A transition to WAC on the selected drugs materially increases our monthly invoice exposure against credit limits set for a different purchasing profile. Ahead of the 2026 pilot, our wholesalers were not prepared to extend the credit limits needed on our 340B accounts to operationalize even the partial rebate program. Once credit limits are exceeded, wholesalers stop fulfilling drug orders. If pharmacies cannot receive 340B replenishment orders and consequently cannot pay 340B invoices, the program breaks down for the affected products. The reconciliation infrastructure that would be required to operate a rebate program at scale does not presently exist. Based on our experience with the third-party vendor interface selected by manufacturers for the 2026 rebate pilot, available data and reporting functionality were insufficient to support a reliable and practical reconciliation process. The vendor cited HIPAA compliance as justification for not retaining prescription numbers on claims, but any vendor entrusted with this function should meet the security requirements necessary to maintain and report Rx numbers to system users. Without reliable Rx-level reconciliation, there is no meaningful way to trace, dispute, or recover denied rebate claims. Ashley County Medical Center designed its pharmacy operations, staffing, third-party contractual relationships, and financial planning in reliance on the upfront discount model that has governed the 340B program since its inception. A shift to a rebate mechanism would disrupt those settled reliance interests. The existence of statutory authority to permit rebates does not suggest that such a shift is prudent or justified by any identified problem with the current upfront discount approach. Absent an identified deficiency with the existing mechanism, the disruption cannot be justified by the costs it would impose on safety-net providers. The administrative burden imposed by the rebate model would also require additional resources to maintain 340B participation. Ashley County Medical Center estimates a need for approximately 0.5 additional full-time equivalents to manage reconciliation, denial tracking, data submission, and dispute workflows for the selected drugs. That is roughly 20 hours per week, four times HRSA's own estimate of five hours per week in the Information Collection Request. The five-hour estimate does not match the operational reality of the work involved. Cash Flow A rebate mechanism would effectively require Ashley County Medical Center to extend interest- free financing to drug manufacturers while we await the statutory discount to which we are entitled. Even a 10-day manufacturer payment window, as contemplated in prior pilot iterations, does not eliminate this exposure; it simply defines how long we hold the capital before resolution, and it does nothing to address claims that are denied outright. For a Critical Access Hospital, $2.84 million of working capital, absorbed annually, would require borrowing with associated interest and debt service, or offsetting reductions in services. Neither path is acceptable for an institution whose mission is to sustain rural access to care. Alternative Approaches to MFP/340B Deduplication We recognize that the Medicare Drug Price Negotiation Program creates a legitimate need for a process to prevent duplication between MFP and 340B discounts. A manufacturer is not obligated to pay both discounts on the same unit of drug, and some mechanism must exist to prevent duplication. The question for HRSA is whether the rebate model is the least burdensome way to accomplish that objective. Ashley County Medical Center respectfully submits that it is not. A neutral, federally administered claims clearinghouse would achieve the same deduplication objective without placing drug manufacturers in the position of adjudicating 340B eligibility and without requiring covered entities to float substantial working capital to manufacturers. CMS has already begun building the framework for this approach through the 340B claims repository demonstrably flawed, and no manufacturer-administered process can reliably substitute for the claims identification work already being performed by 340B third-party administrators. Alternatively, manufacturers are already permitted to require 340B claims data from covered entities as a condition of 340B access. That data could be used directly for MFP/340B deduplication rather than deploying unreliable third-party vendor algorithms or the rebate model. One improvement to this approach would be for all manufacturers requiring claims data uploads to permit covered entities to attest to compliance with data upload requirements for new pharmacy accounts or accounts without usage at the time the claims data requirement is instituted. Either pathwaya neutral clearinghouse or direct use of existing manufacturer claims dataresolves the deduplication issue without creating the larger problems a rebate mechanism would introduce. Request Ashley County Medical Center respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program, and pursue deduplication between 340B and MFP through a neutral claims clearinghouse or direct use of the manufacturer claims data already being collected, with the attestation accommodation described above. Thank you for considering our perspective. Sincerely, Phillip Gilmore, PhD, MS, MHA, FACHE Chief Executive Officer Ashley County Medical Center Crossett, Arkansas 340B ID: CAH041323-00
HRSA-2026-0001-2259Golden Valley Health Centers2026-04-20T04:00Z49,397 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Golden Valley Health Centers, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. For more than 50 years, Golden Valley Health Centers has provided high-quality health care to underserved patient populations in Californias Central Valley. What started as a small, hospital- based migrant-health program in Merced County has grown into a network of more than 45 Federally Qualified Health Centers that offers: family medicine, pediatrics, womens health, dentistry, optometry, podiatry, chiropractic, behavioral health, medications for addiction treatment, health education, and Programs of All-inclusive Care for the Elderly to more than 162,000 patients at more than 45 sites, spanning Merced, Stanislaus, and San Joaquin Counties. Nearly all GVHC patients are low-income; more than 75% identify as racial or ethnic minorities; roughly 39% require care in a language other than English; and approximately 10% are agricultural workers. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Golden Valley Health Centers in particular, this means it will impact: A patient base of more than 162,000 who rely on GVHC to fill approximately 84,000 340B prescriptions annually Costs associated with operating, overseeing, and maintaining compliance within the 340B program. Accessibility of medication and subsidized costs for unhoused and low-income patients Assistance with diagnostic lab fees Continuity of care for patients transitioning from hospital settings Availability of community outreach services The ability to direct operating funds toward other organizational priorities including capital projects and integrated behavioral health services The health centers overall financial health, as reimbursement rates have not kept pace with cost increases We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 3 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Golden Valley Health Centers provided over 46,000 in sliding fee discounted visits, provided through discounted medications and medical services. We 5 anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Golden Valley Health Centers anticipates needing 3-4 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Golden Valley Health Centers anticipates an increase of 50% to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Golden Valley Health Centers anticipates needing 1-2 FTEs Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Minimum 15 hours per week will be required to report 340B rebate claims to a third- party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Golden Valley Health Centers urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 $250,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 162,000 unique patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $1,000,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend minimum 0.5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 56 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 56 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Merced County, Stanislaus County and San Joaquin County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the 11 Internal NACHC survey data 8 wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Golden Valley Health Centers offers a sliding fee scale for low-income, uninsured, and underinsured patients. The sliding scale significantly reduces patient costs for services as well as medications. GVHC pharmacists also have access to a small amount of discretionary funding from the organizations general operating budget that allows them to offer medications at no cost for patients who are unable to afford the sliding scale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,367,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $98,307 to purchase these same drugs at the 340B ceiling price. This represents a 2,000% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Golden Valley Health Centers anticipates reductions to: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as: o Mobile health services for patients who have difficulty accessing care at a physical health center o Integrated behavioral and mental health services offered within the health centers and via virtual modalities o Medications for Addiction Treatment which takes a holistic approach to caring for patients diagnosed with substance use disorder o Community outreach and education Operating Hours: GVHC anticipates reducing clinic service hours by approximately 5- 15 hours per week with a disproportionate impact on evening and weekend hours which are particularly important for the health centers working class and agricultural patient populations. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund other vital members of the clinical care team including community health workers, perinatal coordinators, and behavioral health clinicians, directly decreasing both access and quality of care. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our approximately 9,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Golden Valley Health Centers asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Golden Valley Health Centers estimates its 2027 Annual Rebate Opportunity Cost to be approximately $4,912,205. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Golden Valley Health Centers estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $197,000 in 2026, $409,000 in 2027 and $444,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves or take out a line of credit neither of which is not a sustainable solution. The interest costs alone are estimated to be $158,760 annuallyfunds that are currently dedicated to recruitment and retention of direct care medical and dental staff including providers, nurses, medical assistants, community health workers, and prenatal care workers. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Golden Valley Health Centers, the risk of reaching our credit limit or depleting our reserves is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Golden Valley Health Centers urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $113,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 13 V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 14 Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. 15 Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Golden Valley Health Centers strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Golden Valley Health Centers believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Golden Valley Health Centers appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Trisha Ramirez VP&CFO email: Tramirez@gvhc.org Sincerely, David Quackenbush Golden Valley Health Centers
HRSA-2026-0001-2260CommonSpirit Health2026-04-20T04:00Z27,322 chars
See attached comments from CommonSpirit Health. April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, CommonSpirit Health appreciates the opportunity to provide comments on the request for information (RFI) for the 340B Rebate Model Pilot Program issued by the Health Resources and Services Administration (HRSA or the Agency). As a nationwide, faith-based, safety-net provider, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. Many of our rural and safety-net hospitals are 340B covered entities (CEs) and the 340B program is critical to the patients and communities that we serve. Rural and safety-net hospitals, as well as other CE types, that participate in the 340B program are a vital part of the nations health care ecosystem; they ensure access to community programs, discount drugs for low-income individuals, research, necessary medical services, and health expertise for our patients. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. Our recommendations include: 1. HRSA should not create a rebate model for the 340B program. Rebate models mark a stark departure from over 34 years of 340B program precedent, are unnecessary to meet HRSAs stated goals, and would set a dangerous precedent for future expansion. 2. If HRSA decides to move forward, the Agency must place strict guardrails on manufacturers, including: a. Prohibit rebate denials for any reason other than a small, pre-selected set of conditions. b. Prohibit manufacturers from using 340B claims data for non-rebate purposes, including for commercial use. c. Limit the amount of data that manufacturers can collect from CEs to only those items necessary to effectuate the model. Our detailed comments follow. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 HRSA Should Not Implement a 340B Rebate Model Program For over thirty years, 340B discounts have been offered by pharmaceutical manufacturers to all but one CE type through upfront pricing. In August 2024, five drug manufacturers and one vendor marketing a rebate platform announced their intention to implement a rebate model for 340B drugs, shifting away from the longstanding upfront pricing structure of the 340B program.1 After a federal district court held that the 340B statute prohibits drug manufacturers from unilaterally effectuating 340B prices through a rebate instead of as upfront discounts without first receiving HRSA approval, HRSA issued a notice seeking drug manufacturer applications to participate in a 340B Rebate Model Pilot Program to begin on January 1, 2026.2 The pilot program, which in 2026 was limited to the 10 drugs in the Medicare Drug Price Negotiation Program (MDPNP), never went into effect due to a federal district court injunction prohibiting its implementation. HRSA has now issued an RFI to solicit feedback in advance of implementing a new rebate model program. The information HRSA requests feedback on includes the costs associated with rebate models, delayed saving resulting from rebate models, denied rebate claims, and ideas for additional guardrails in future rebate models. We note that it is challenging to provide comments to HRSA since the Agency does not specifically propose a rebate model or outline the parameters of a potential new rebate model. In both the RFI and in HRSAs separate information collection request, the Agency indicates that the basic structure of any new rebate model program would require hospitals to submit claims data to manufacturers to receive the 340B price as a retrospective rebate instead of an upfront discount. As we outline in further detail throughout this letter, such models would result in substantial financial losses for safety-net and rural hospitals, which will ultimately affect patient care and access. Moreover, a rebate model would be operationally complex and expensive to implement. To preserve the vital functions of CEs and Congresss intention for the 340B program, we urge HRSA to maintain the ability of CEs to purchase 340B drugs at upfront discounted prices. Further, we ask that HRSA explore less disruptive ways to realize the goal of de-duplicating 340B and maximum fair price (MFP) under the Inflation Reduction Act (IRA).3 Higher Costs, No Benefit To minimize operational costs, our system has centralized much of the administrative and audit work associated with the 340B program while the reductions in drug spending or any contract pharmacy revenue accrues to individual CEs. These systematized 340B tracking and auditing systems are built upon the existing rules that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire 3 Letter from HRSA Administrator Carole Johnson to Johnson & Johnson CEO Joaquin Duato. September 17, 2024 2 Eli Lilly & Co v. Kennedy, 2025 WL 1423630, (D.D.C. May 15, 2025); 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. 90 FR 36163. August 1, 2025. 1 The five drug manufacturers are Johnson & Johnson, Eli Lilly, Sanofi, Bristol Myers Squibb, and Novartis. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B CEs. For example, both insisted that hospitals already provide the required information through a 340B electronic service point (ESP). That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for CEs. This will increase costs to CEs and reduce the dollars available for patient-serving activities. In our estimation, the costs associated with a rebate model will far outweigh any benefits that might come from this new reimbursement mechanism. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of CEs so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospitals rely upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. The 340B program is a cost avoidance program, meaning that hospitals save money by paying less upfront for their eligible prescription drugs. This cost avoidance allows hospitals (and other CEs) to redirect the funds not spent on 340B drugs to other programmatic priorities, whether that be investing in a new telemetry system, operating a diabetes awareness program for their patients, or simply keeping their doors open to serve their community. For rural and safety-net hospitals that often run on thin margins, the cost avoidance element of 340B can be the difference between having extra funds to invest in patient care or operating in the red. Turning 340B from a cost avoidance model into a retroactive rebate model will reduce the value of the program overall, although the delay in realizing 304B savings is just one part of the equation. The rebate model proposed in 2025, and presumably in future rulemaking, did not fully account for the additional financial impacts associated with added compliance costs or the potential effects on the ability to use 340B discounts for Medicaid patients, as well as potential loss of sub-ceiling prices. There is additional complexity and impact for rebate models that include not only drugs dispensed on the retail side, included on pharmacy benefit claims, but also if the models extend to drugs dispensed on the hospital side, included on medical billing claims. Reducing the value of the 340B program would impede the ability of academic teaching hospitals to maintain the unique services they disproportionately provide, such as burn care, trauma care, and pediatric specialty care. It would limit the ability of a rural critical access hospital to offer important educational opportunities in their communities. And it could create delays and reporting burdens for Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 infusion centers treating a high number of low-income patients. 340B CEs already have a demonstrated commitment to serving low-income, vulnerable populationsto qualify for the program, they must be nonprofit and meet program requirementsrepresenting their commitment to Medicaid and low-income Medicare patients. Losses from a rebate model would compound the billions of dollars of losses that hospitals have already incurred because of manufacturer restrictions on 340B drugs dispensed through contract pharmacies.4 Payment Timing, Increased Spending, and Potential Cash Flow Impacts HRSA requests feedback on whether payment timing under a potential rebate model would affect cash flow, including whether rebate models would pose financial risk to 340B CEs. As we explain in further detail, the cash flow delays associated with the use of rebate models to effectuate 340B drug pricing could devastate financially vulnerable 340B hospitals and the programs their patients and communities rely on. A shift from an upfront discount to 340B rebate models would alter the way that 340B CEs have realized the benefit of discounted drugs for over 30 years. Instead of purchasing 340B drugs upfront at discounted prices and being able to benefit from these savings immediately, hospitals under a rebate model would have to wait potentially months between when a drug is purchased and when a manufacturer provides a rebate on that drug. While under HRSAs previously finalized 340B Rebate Model Pilot Program manufacturers had ten days from receipt of a claim to pay a rebate, the actual lag time between when a drug is purchased and when the 340B rebate is received would be much longer due to drug procurement processes and the many intervening steps that would take place between when a drug is purchased and dispensed and when a rebate is ultimately received. We anticipate that beyond this typical timeline, there would be additional delays in hospitals receiving rebate payments due to claims disputes, errors, and denials. When we looked at the potential impacts to cash flow, our estimates identified approximately $3.8 million in floating costs that would accrue to our system, assuming a 120-day turnaround from drug purchase to receiving the rebate. This is only for a 10-drug pilot, but we can extrapolate that 25 drugs would be more than double the costs and closer to $10 million annually. We also estimate $4.4 million in increased administrative costs due to manufacturer rejection of rebate claims and the loss of wholesaler Cost of Goods Sold (i.e. cost-minus) discounts. For one popular drug alone, Eliquis, we estimate a $1.3 million cash flow impact and nearly $600,000 in increased 340B spending. These are significant financial impacts for our hospitals that provide a disproportionate amount of care to low-income, under-insured and uninsured patients. Floating $10 million to manufacturers while we await a rebate is particularly galling when we review the financial picture of both entities. Non-profit health systems median operating margins rose to 1.2% in 2025 from a -0.5% low in 2023. At CommonSpirit, we had a $225 million operating loss in FY2025, which 4 340B Health. Drugmakers Pulling $8 Billion Out of Safety-Net Hospitals. July 11, 2023. Note that this figure underestimates the true impact of these restrictions, because it was based on 21 drug manufacturers restrictions. The number of manufacturers that have imposed limitations now stands at 37. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 was an improvement from the year before. If we look at that same single drug, Eliquis, which is manufactured and marketed through a collaboration between Bristol Myers Squibb and Pfizer, we can see a significantly different story. Net income attributable to Bristol Myers Squibb was $34.3 billion in 2025 and Pfizer annual gross profit for 2025 was $46.5 billion.5,6 Extra Costs Under a Potential 340B Rebate Model Pilot Program Participating in 340B rebate models will cause significant administrative costs and operational challenges for CommonSpirit. We would need increased IT infrastructure and staff for claim submission, tracking, reconciliation, appeals, and increased audits. Estimated staff time for large CEs could be 25 to 40 hours per week for claims management alone. The likely variation in manufacturer rebate models, vendors, and submission processes would be confusing and costly for CEs, undermining program integrity. We suggest HRSA maintain a centralized, impartial system for data collection instead of a patchwork of individual manufacturer systems. The operational complexity and compliance concerns of a new rebate model will necessitate CEs hiring additional staff (estimated one to six or more FTEs across multiple departments) and reallocating existing staff time for tasks like claim maintenance, submission, reconciliation, dispute management, and audit response. We also will have to restructure some of our IT systems with costly upgrades, new system procurement, and external vendors for claims processing. Large health systems face added complexity due to the volume of claims and varied dispensing settings (in-house, contract, mixed-use). CEs will need to maintain multiple IT platforms and data processes due to manufacturers using different vendors. For example, CEs would need to modify inventory practices to maintain a separate inventory for non-340B WAC-purchased drugs. Finally, a rebate model will lead to delayed savings, forgone savings, and administrative costs from compliance with state Medicaid billing requirements. The initial purchase at Wholesale Acquisition Cost (WAC) instead of the 340B ceiling price creates uncertainty about whether CEs should bill Medicaid at WAC or the post-rebate 340B price. Waiting for the rebate before billing Medicaid would complicate the process and delay reimbursement. HRSA asks how these costs can be offset. We stress that manufacturers must be solely responsible for all associated costs, including IT infrastructure and the full-time employee (FTE) costs for data collection and submission. Any rebate model must detail how CEs will be reimbursed for their expenses. 6 Pfizer, Pfizers 2025 Annual Report: Pfizers Year in Review, Feb. 2026, at https://annualreview.pfizer.com/ 5 Bristol Meyer Squibb, BMY Q4 and 2025 Earnings Press Release, Feb. 2026, at https://www.bms.com/assets/bms/us/en-us/pdf/investor-info/doc_financials/quarterly_reports/2025/BMY-Q4-202 5-Earnings-Press-Release.pdf Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Manufacturers Must Be Held Accountable We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebates unilaterally, forcing non-profit entities like ours to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to CEs. The power disparity between CEs and drug manufacturers will be significantly amplified. Program Integrity Concerns HRSA seeks feedback on specific guardrails that should be built into a 340B rebate model pilot program to ensure that denials are limited to appropriate circumstances. Further, HRSA asks about standard process elements required for rebate denials and the timeline for adjudicating improper denials. The Agency provides an example of limiting denials to instances when a 340B rebate was provided to another CE on the same claim. In other parts of the RFI, HRSA alludes to using rebate models to avoid duplicate discounts not just in the context of the MFP under the IRA but also in other CMS programs such as Medicaid. CommonSpirit rejects the notion that there is a need for a manufacturer-driven solution to address purported issues around program integrity. Therefore, as we expressed above, we caution HRSA against adopting a rebate model. In the context of Medicaid, which is the only context in which duplicate discounts are explicitly prohibited by the 340B statute,HRSA has worked with CMS and state Medicaid agencies to develop mechanisms to prevent duplicate discounts.7 Most states allow 340B CEs to decide whether to carve in their 340B drugs (i.e. provide 340B discounts to their Medicaid patients) or carve out (i.e. forgo a 340B discount and instead allow the state to receive the Medicaid rebate on that drug). CEs that choose to carve in 340B drugs for their Medicaid fee-for-service population must list their National Provider Identifier (NPI) number on the Medicaid exclusion file, which indicates to the state Medicaid agency that it should exclude drugs dispensed by that hospital from receiving a Medicaid rebate. Other states use billing modifiers to identify 340B drugs, while some states (most notably, Oregon) use a retrospective approach to identify claims that should be excluded from receiving Medicaid rebates. HRSA does not allow CEs to dispense 340B drugs in the contract pharmacy setting in Medicaid FFS unless the CE, the contract pharmacy, and state create a plan to prevent duplicate discounts and submit this plan to HRSA.8 On top of these approaches to prevent duplicate discounts, the 340B statute authorizes HRSA to penalize 340B hospitals if they violate statutory provisions, including the prohibition on duplicate discounts, through repayment of overpayments and potential removal from the program for systematic and egregious violations. HRSA already has a robust system in place to prevent duplicate discounts in 8 Notice Regarding 340B Drug Pricing ProgramContract Pharmacy Services , 75 Fed. Reg. at 10278. 7 340B Statute. Sec. 340B(a)(5)A. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 Medicaid; to use the potential for duplicate discounts as a reason to implement a rebate model is disingenuous. If HRSA were to nonetheless proceed with implementation of a rebate model program, the program should be narrowly crafted and limited in scope. Under a rebate model program, the only acceptable reason for denying a 340B rebate should be in achieving MFP deduplicationthat is, if a pharmacy already received a MFP rebate for a drug included in the MDPNP and the MFP is lower than the 340B ceiling price, then the CE would not receive a 340B rebate. In addition to limiting the reasons manufacturers can deny rebates, HRSA must provide protections for CEs including a robust, impartial dispute and appeal process. In addition to the delayed receipt of 340B discounts, a rebate model pilot program would leave the determination of which drugs are 340B-eligible up to the manufacturer. This shift could result in many 340B claims being denied at the manufacturers discretion, with no oversight or appeal mechanism available to 340B hospitals. We strongly recommend that HRSA outline a robust appeals process and additional details on how the Agency plans to conduct oversight of a pilot program to ensure that manufacturers are remitting 340B rebates on time and in full. A process to dispute denied claims should also include the ability to dispute denials in bulk, instead of individually. Allowing 340B CEs to submit bulk disputes would streamline this process and be a more efficient use of limited staff time and resources. Authority to Oversee the 340B Program Under a rebate model, the decision to pay or deny a 340B rebate and the ability to analyze CE claims would fall to drug manufacturers and the third-party platforms they choose to use. However, Congress was very clear when it enacted the 340B statute that the responsibility for overseeing and enforcing the 340B program solely belongs to HRSA, which resides under HHS. For example, the 340B statute provides HHS with audit authority as well as discretion to establish a mechanism for avoiding duplicate discounts. While manufacturers are permitted under the statute to audit CEs, the ultimate decision to penalize a CE for violation of a 340B program requirement is made by HHS.9 The statute further provides that the Secretary shall provide for improvements in compliance by CEs with the requirements of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5).10 Allowing manufacturers to assume oversight responsibilities of the 340B program would result in a compliance nightmare for HHS and CEs, ultimately undermining program integrity efforts and circumventing statutory authority. The move towards drug manufacturer operated rebate models will ultimately allow manufacturers to assume greater oversight responsibilities of the 340B program by leaving determination of which drugs are 340B eligible to the manufacturers. However, without explicit instruction on how HRSA intends to 10 340B Statute. Sec. 340B(d)(2) (emphasis added). 9 340B Statute. Sec. 340B(a)(5)A. Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 oversee these rebate models or allow CEs to appeal such denials, there is little to ensure drug manufacturers compliance with the requirements of a HRSA-approved rebate model program. Data Collection by Covered Entities Implementing a rebate model will require submitting a voluminous amount of sensitive datamultiple elements for potentially hundreds of thousands of claims. As a health provider, we are concerned about any personal health information (PHI) implications. However, we are equally concerned that manufacturers could use their access to this new data to do more than administer 340B rebates; manufacturers could initiate Good Faith Inquiries and audits, identify alternative distribution models, or use the data for marketing purposes. HRSA asks about specific pharmacy and medical claims elements that should be collected as part of a rebate model, whether these data elements are currently available or readily available, the sources of these data, whether the data are already being furnished to third parties, and guardrails to mitigate privacy and security concerns. In implementing rebate models, manufacturers are likely to require CEs to submit claims data to them through their selected vendors, such as the Beacon platform associated with Second Sight Solutions or the Kalderos Truzo platform. HRSA must engage in oversight of these vendors and their contracts with drug manufacturers to ensure that all patient data is protected. Based on past experience with third-party vendors and more recent experiences with the Beacon platform, we are concerned the terms and conditions of the contracts we will be compelled to sign will be non-negotiable and contain terms unfavorable to hospitals. Many of the vendors operating in this space have worked hand-in-hand with drug manufacturers for years to craft these proposed rebate models. We hope HRSA does not move forward with a rebate model at all. But, if the Agency does so, HRSA should limit the data elements manufacturers may request from CEs to only those data elements that are absolutely necessary to operationalize a rebate model. In the previously finalized Rebate Model Pilot Program, HRSA had approved 12 pharmacy claims data elements and 14 medical claims data elements that would have to be completed for every claim. However, this is far more information than is needed; manufacturers could achieve their goal of deduplicating claims using only the prescription numbers and 340B ID. Further, under CMSs Calendar Year 2026 Physician Fee Schedule Final Rule, CMS finalized a voluntary claims data repository inclusive of only five data elements that will identify a claim as being 340B or not. Under this proposal, only the NDC, date of service, prescription or service reference number, fill number, and the dispensing pharmacy NPI would be needed to determine if a claim was 340B eligible or not.11 11 90 CFR 32643 Apr 20, 2026 CommonSpirit Health HHS Docket No. HRSA-2026-03042 If HRSA moves forward with a rebate model, it should work with stakeholders to ensure that CEs need only share the bare minimum amount of information to receive their rebates. Conclusion We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me at rachel.tanner@commonspirit.org if you have questions. Sincerely, /s/ Rachel Tanner Sys. Vice President Regulatory Affairs and State Relations As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2261(no commenter metadata)2026-04-20T04:00Z10,417 chars
See attached file(s) 201 North Clifton Fordyce, AR 71742 870-352-6300 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: Dallas County Medical Center respectfully submits these comments in response to the Health Resources and Services Administrations Request for Information concerning the 340B Rebate Model Pilot Program. Dallas County Medical Center is a Critical Access Hospital located in Fordyce, Arkansas, and has participated in the 340B Drug Pricing Program since August 2010. For the fifteen years since, the 340B savings generated by the program have been an indispensable component of our ability to operate as a Critical Access Hospital serving our community. We respectfully urge HRSA to abandon the proposed rebate model and pursue deduplication between 340B and the Medicare Drug Price Negotiation Program through alternative mechanisms described in Section E of this comment. A. Program Scale and Current MFP Compression Two figures frame the impact of the proposed rebate mechanism on Dallas County Medical Center, and we ask that HRSA consider them together. First, the drugs selected under the Medicare Drug Price Negotiation Program represent approximately 68% of our total 340B program, when the drugs added to the MFP list in 2026 are considered alongside those added in 2027. That share is substantially concentrated relative to our program overall. The rebate mechanism, if implemented, would therefore reach the large majority of our 340B activitynot a marginal subset. Second, the Maximum Fair Price is already compressing our 340B savings on the selected drugs, independent of any rebate mechanism. In the first quarter of 2026, approximately 33.5% of our would-be 340B savings on the selected drugs were eliminated. That is one in three dollars of savings absorbed in a single quarter, before a rebate model has been implemented. A rebate mechanism would layer onto a compression that is already well underway, compounding financial pressure on an institution that operates on the margins typical of the rural hospital sector. B. Financial Impact of the Proposed Rebate Model Applied to our 2025 claims data for the drugs selected under the Medicare Drug Price Negotiation Program, Dallas County Medical Centers current 340B acquisition cost for the full set of selected drugs in 2027 is approximately $431,000. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on those same drugs rises to approximately $2,532,000 in 2027. The annual working capital we would be required to float to drug manufacturers before any rebate is received, measured as the difference between our current 340B acquisition cost and the corresponding WAC cost, is approximately $2.1 million. If HRSA were to extend the rebate mechanism beyond the pilot to cover the full 340B program, our combined annual upfront capital requirement would rise to approximately $2.6 million on an ongoing basis. For a Critical Access Hospital of our size, $2.1 million of working capital diverted annually to manufacturer rebate processing is not a manageable cash flow adjustment. Capital at that scale would be sourced only through borrowing, with associated interest expense and debt service, or through offsetting reductions in services. A rebate mechanism would effectively require Dallas County Medical Center to provide drug manufacturers with interest- free financing while we await the statutory discount to which we are entitled. Even a 10-day manufacturer payment window, as contemplated in prior pilot iterations, does not eliminate this exposure; it defines how long we hold the capital before resolution and does nothing to address claims denied outright. C. Operational Mechanics and Infrastructure Readiness The rebate model inverts the financial risk architecture of the 340B program. Under the current upfront discount mechanism, the statutory 340B discount is built into acquisition. Under a rebate mechanism, Dallas County Medical Center would purchase at WAC, reimburse our contract pharmacy partners on the basis of arrangements that assume a known 340B price, and bear the risk that manufacturer rebate claims may be denied, delayed, or disputed. Drug manufacturers have pursued unilateral policies restricting 340B pricing at contract pharmacies for the past five years. Those restrictions remain the subject of ongoing litigation and regulatory dispute. A rebate model places those same manufacturers in the position of adjudicating rebate claims on the very dispenses they have been attempting to exclude from 340B through other means. Our wholesaler relationships compound this exposure. Those arrangements are configured around 340B acquisition pricing, not WAC. A transition to WAC on the selected drugs materially increases our monthly invoice exposure against credit limits set for a different purchasing profile. Ahead of the 2026 pilot, our wholesalers were not prepared to extend the credit limits needed on our 340B accounts to operationalize even the partial rebate program. When credit limits are exceeded, wholesalers stop fulfilling drug orders, halting the 340B program, not just for the selected pilot products, but for all 340B products. This hurdle alone should be enough to prevent further consideration of a rebate pilot. Reconciliation infrastructure is a related concern. Based on our review of the third-party vendor interface selected by manufacturers for the originally planned 2026 rebate pilot available data and reporting functionality were insufficient to support a reliable and practical reconciliation process. The vendor cited HIPAA compliance as justification for not retaining prescription numbers on claims, but any vendor entrusted with this function should meet the security requirements necessary to maintain and report Rx numbers to system users. Without reliable Rx- level reconciliation, there is no meaningful way to trace, dispute, or recover denied rebate claims at the scale a rebate mechanism would require. The Rx number to ICN crosswalk they offered as a solution to this issue was transient and only available at the time of upload by the uploading user. This is not a sufficient solution when there is so much financial risk tied up in the reconciliation. D. Reliance Interests and Workforce Burden Dallas County Medical Center designed its pharmacy operations, wholesaler arrangements, third- party contractual relationships, and long-term financial planning in reliance on the upfront discount model that has governed the 340B program since its inception in 1992. The settled reliance interests in that model are real and material, and a fundamental shift to a rebate mechanism would disrupt them in ways the proposed pilot has not adequately accounted for. The mere existence of statutory authority to permit rebates does not suggest that such a shift is prudent, particularly where no identified problem with the upfront discount model justifies the change. On workforce, Dallas County Medical Center estimates a need for approximately 0.25 additional full-time equivalents to manage reconciliation, denial tracking, data submission, and dispute workflows for the selected drugs alone. That is approximately 10 hours of additional work per week, twice HRSAs own estimate of five hours per week as referenced in the Information Collection Request. For a Critical Access Hospital with our staffing profile, a new full-time- equivalent demand of that magnitude is not absorbed without consequence. Any extension of the rebate mechanism beyond the pilot drugs would scale this requirement further. E. Alternatives and Request The deduplication objective the rebate model is designed to address is a legitimate policy matter. A manufacturer is not obligated to pay both the 340B discount and the Maximum Fair Price rebate on the same unit of drug, and some mechanism must prevent duplication. The algorithms manufacturers have deployed to identify 340B claims for deduplication purposes are demonstrably unreliable and no substitute for the multi-feed claims identification work performed by 340B third-party administrators. The question is whether the rebate model is the least burdensome mechanism by which to accomplish that objective. Dallas County Medical Center respectfully submits that it is not. A neutral, federally administered claims clearinghouse would accomplish the same objective without placing drug manufacturers in the position of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital to manufacturers, and without introducing the risks and operational concerns described in Sections C and D. CMS has already begun developing this framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. Bipartisan congressional proposals, including the PROTECT 340B Act and the SUSTAIN 340B Act, point in the same direction. Alternatively, manufacturers are already permitted to require 340B claims data from covered entities as a condition of 340B access. That data could be used directly for MFP/340B deduplication rather than deploying unreliable third-party vendor algorithms or the rebate model. One improvement to this approach would be for all manufacturers requiring claims data uploads to permit covered entities to attest to compliance with data upload requirements for new pharmacy accounts or accounts without usage at the time the claims data requirement is instituted. Dallas County Medical Center respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program and pursue deduplication between 340B and MFP through a neutral claims clearinghouse or direct use of the manufacturer claims data already being collected, with the attestation accommodation described above. Thank you for considering this comment. We are available at the contact information below to provide additional data or operational context. Sincerely, Yu M David Mantz Chief Executive Officer Dallas County Medical Center Fordyce, Arkansas 340B ID: CAH041317-00
HRSA-2026-0001-2262Washington State Hospital Association2026-04-20T04:00Z10,467 chars
Attached are comments on behalf of the Washington State Hospital Association. 1201 Third Ave, Suite 1601 | Seattle, WA 98101-3232 | PHONE: (206) 281-7211 | FAX: (206) 283-6122 | www.wsha.org 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Washington State Hospital Association and our more than 100 member hospitals and health systems, we appreciate the opportunity to comment on HRSAs request for information (RFI) regarding the 340B Rebate Model Pilot Program. Our membership includes 85 member hospitals that qualify as 340B covered entities, including 38 critical access hospitals, 36 disproportionate share hospitals, two childrens hospitals, six rural referral centers, and three sole community hospitals. While we support efforts to streamline and make the 340B process more efficient, we have significant concerns with this pilot. We believe this is the wrong direction. It would create new costs, administrative burden and risk for covered entities that significantly exceed any benefit of the pilot program. Our comments reflect input from several of our members. Our comments are not a complete or exhaustive accounting of the magnitude of the impact if the pilot is implemented. We have encouraged our 340B covered entity members to respond directly to HRSA with their responses to the RFI and understand several have done so We encourage review of the individual submissions of our members and 340B entities nationwide to obtain a more complete understanding of the impacts and costs if the pilot were to be implemented. Significant Administrative Costs and Staffing Burdens Under a 340B Rebate Program. Any rebate program would impose significant administrative requirements and costs on covered entities, diverting critical resources and undermining the programs statutory intent. These additional costs would harm all 340B entities and the communities they serve. Qualifying covered entities participating in the 340B program anticipated reasonable administrative costs and structured staffing, operations, and program administration around an upfront discount model. Shifting to a fundamentally different discount mechanism would require new resources, imposing unanticipated additional costs and administrative burdens on our hospitals. Our members have indicated HRSAs projected staffing time and other administrative costs grossly underestimate both the upfront setup costs and ongoing staffing needs, including costs to manage reconciliation related tasks under the 1201 Third Ave, Suite 1601 | Seattle, WA 98101-3232 | PHONE: (206) 281-7211 | FAX: (206) 283-6122 | www.wsha.org 2 program. Rebate dispute resolution is an extraordinarily resource-intensive task. Our members tell us, based on their experience with the Beacon MFP and 340B ESP platforms, claim dispute submissions can take 30-60 minutes apiece. Members have indicated these additional costs would exceed the program benefit for the 25 drugs that would be initially part of the pilot. One of our members estimated the additional staffing cost at more than $3 million per year based the 10-25 drugs anticipated for the pilot. If the program were expanded to include additional drugs, these staffing and ongoing administrative costs would increase in proportion to the number and volume of drugs included in the program. Smaller hospitals especially critical access and rural hospitals would be disproportionately harmed and this will exacerbate their struggle to recruit and pay for staff. This would be a significant additional cost to these hospitals and would jeopardize a program vital to supporting services in rural areas. The 340B program is vital given the expected reductions in payment expected under H.R. 1. Costly System and Infrastructure Changes for Implementation of a340B Rebate Program 340B entities designed their technological systems and operational infrastructure in reliance on an upfront discount model. As stated, any shift to a rebate mechanism will force entities to incur significant labor costs to change those systems. Additionally, a rebate program would require new reconciliation tools, including a tool to track claims, rebate status, remittances, and payments as well as updates to existing audit tools and workflows. Providing medical claims data under a rebate program would be particularly challenging for hospitals because hospital billing and claims differ significantly from retail pharmacy models. Complying with rebate data requests for facility-administered medications would require significant manual intervention, validation, and ongoing testing of data feeds and claims submissions. It is difficult to estimate how many labor hours it would take to build the tools and make the potential billing and other system changes needed to support efficient data submission and reconciliation efforts. The labor hours required would also depend on how many different manufacturer platforms would be in play and would increase as the number of drugs and manufacturers increase. Cash Flow and Financial Risk Impacts We understand HRSAs proposed rebate policy would apply to 25 drugs, 15 more than the version announced in 2025. We understand HRSAs proposed rebate policy would apply to 25 drugs, 15 more than the version announced in 2025. Under this policy, hospitals would be required to: Purchase drugs at non-340B prices Hold inventory for weeks or months and Wait for rebates after submission and reconciliation Even with a proposed 10-day rebate payment window, hospitals would effectively be forced to make interest-free loans to drug manufacturers. This delay would tie up critical financial resources that 1201 Third Ave, Suite 1601 | Seattle, WA 98101-3232 | PHONE: (206) 281-7211 | FAX: (206) 283-6122 | www.wsha.org 3 would otherwise be available to support patient care. Previously, HRSA has credited drug manufacturers claims that they would, in most instances, pay rebates before wholesaler invoices for the WAC amount are due; however, this assumption does not reflect operational realities. Many covered entities pay wholesalers on a fixed schedule, and rebate payments may not align with purchases, especially if payments are delayed, disputed, or reduced. There is also no guarantee that rebates would consistently be paid within 10 days. Purchase-to- dispense lag times, Electronic Fund Transfer processing delays, reconciliation challenges, and the risk of disputed or incorrect rebate amounts could result in shortfalls. This leaves hospitals responsible for full payment without timely reimbursement. We urge HRSA to impose significant interest penalties on any rebate payments that fall outside the required payment timeline. We are very concerned this rebate model will disadvantage 340B non- profit entities in favor of for-profit drug manufacturers. Non-profit organizations will essentially be loaning money to large, for-profit manufacturers in the hope the rebate will be secured within 10 calendar days. Better Alternatives Exist to Avoid 340B/MDPNP Duplicate Discounts HRSA has already acknowledged that drug manufacturers have other options available to address concerns related to de-duplication between the 340B and MDPN programs. Given the significant costs a rebate model will impose on our hospitals, we urge HRSA to pursue other options. Any other decision would inappropriately prioritize the interests of drug manufacturers over those of covered entities, the patients we serve, and communities that depend on hospitals to provide essential care. We support the American Hospital Associations position that viable, lawful, and less burdensome alternatives exist to achieve the same goals a rebate model is intended to address. Specifically, we urge HRSA to adopt a government-sanctioned, independent national 340B claims clearinghouse, overseen by HRSA and developed with input from relevant stakeholders, to support 340B/MDPNP de- duplication, program integrity, and related goals, rather than implementing a rebate model. A national clearinghouse would provide necessary protection and establish a simplified, automated process for covered entities to submit de-identified claims data from public and private payers. This would also increase transparency and ensure all data submissions comply with HRSA requirements rather than manufacturer-imposed standards. At a minimum, we ask HRSA provide a meaningful explanation as to why a third-party clearinghouse would not be feasible or would impose greater costs than a rebate model. The Proposed Pilot Threatens Disruption of Longstanding Reliance Interests Covered entities have long relied on HRSAs longstanding use of upfront discounts when designing operations, staffing, third-party contracts, and financial planning. 340B savings are built directly into 1201 Third Ave, Suite 1601 | Seattle, WA 98101-3232 | PHONE: (206) 281-7211 | FAX: (206) 283-6122 | www.wsha.org 4 drug budget and overall operating assumptions and play a significant role in cash-on-hand projections, annual savings expectations, and long-term planning for patient services and infrastructure needs. A shift to a rebate model would disrupt these settled reliance interests created by the previous policy and significantly increase operating costs. The lack of assurance that rebates would be paid fully and on time would further reduce financial predictability. Given the significant and unnecessary costs such a change would impose on 340B hospitals, we believe there is no justification for transitioning to a rebate model, even in pilot form. Thank you for your consideration of our comments. If you have questions regarding our comments, please contact Andrew Busz, at andrewb@wsha.org. Sincerely, Jacqueline Barton True Andrew Busz VP, Rural and Federal Programs Policy Director, Finance Washington State Hospital Association Washington State Hospital Association
HRSA-2026-0001-2263(no commenter metadata)2026-04-20T04:00Z14,337 chars
See attached file(s) SCVH Administration 777 Turner Drive, Suite 220 San Jose, CA 95128 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No.: HRSA-2026-03042) Dear Administrator Engels, Santa Clara Valley Healthcare (SCVH), which is the division of the County of Santa Clara that operates the Countys health care system, appreciates the opportunity to comment on the request for information (RFI) from the Health Resources and Services Administration (HRSA) regarding a 340B Rebate Model Pilot Program. SCVH is the largest safety net health care provider in Northern California and includes essential hospitals, as well as a comprehensive network of community clinics. SCVH depends on the 340B program to advance the Countys missions of expanding access to comprehensive services to our community, which aligns directly with the statutory intent behind the 340B program. We urge HRSA to consider the costs of rebate models on safety net systems like ours and not move forward with the proposed rebate model or related pilot program. SCVH strongly opposes any shift to a rebate model for discounted 340B drug pricing and urges HRSA to continue implementing 340B pricing as an upfront discount. Rebates, under the proposed model, will increase 340B participation costs significantly, redirecting funds to manufacturers that would otherwise go to patient care or other initiatives to expand access to patient care for needy populations. Not only is this contrary to 340Bs intent, but HRSA has not provided a policy rationale explaining this proposal to change decades of established practice under which the 340B program has operated successfully. As mentioned, SCVH is the biggest safety net health care system in Northern California, with 4 general acute care hospital campuses, a comprehensive network of community clinics, with ancillary departments that support the hospitals and clinics like pharmacy, laboratory Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344 and diagnostic imaging services. According to the United States Census Bureau, our county has 1.9 million residents, with over 137,000 who meet the definition of low- income and another 76,700 who do not have any form of health insurance coverage. SCVH participates in the 340B program as a covered entity. The discounts on drugs available under the 340 program helps SCVH immensely in furnishing a comprehensive array of health care services to county residents and expanding access to much needed services for these low-income and uninsured patients. SCVH appreciates the opportunity to respond to HRSAs RFI and share specific details on how the proposed rebate models would impact our ability to serve patients based on our experience with preparing for the implementation of the 340B rebate pilot program that was halted by the federal courts. Although the purpose of this letter is to respond to the specific inquiries posed by HRSA in the RFI, SCVH notes that we continue to also dispute the overall legal validity of 340B discounts being made available via after-purchase rebates and not up front at the point of sale. SCVH therefore respectfully refers HRSA to comments submitted by Americas Essential Hospitals for a detailed discussion of some significant legal concerns with rebate models. With that said, information that is directly responsive to the RFI follows below. The Financial and Operational Costs of Rebate Models Are Unsustainable Safety Net Healthcare Providers Are Facing a Dire Financial Landscape and 340B Rebate Models Will Only Make the Situation Worse As a safety net healthcare system, SCVH operates on thin financial margins even at the best of times. These are not the best of times for safety net health care. Safety net providers already are facing unprecedented financial challenges due to the sweeping federal Medicaid policy changes that were enacted through H.R. 1 in July 2025. Moreover, in addition to the impact of H.R. 1, SCVH is already experiencing significant, new monetary losses due to the Centers for Medicare and Medicaid Services (CMS) implementation of the maximum fair price program for Medicare reimbursement on certain medications, which took effect at the start of 2026. With these other potentially devastating financial challenges already in place, SCVH simply cannot afford the massive disruptions to our finances that would result from imposition of a 340B rebate model. Even if rebate models work as intended, they would disrupt our health systems finances by causing substantial increases in our administrative costs, limiting our health systems access to 340B subprime discounts, and by requiring our health system to make advance payments on impacted pharmaceuticals to boost the profits of pharmaceutical companies. If pharmaceutical companies deny rebates for our 340B eligible patients, SCVH will be left with substantial additional costs. Overall, we estimate that the implementation of a rebate model will cost our health system tens of millions of dollars between additional costs necessary to seek post-purchase Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344 rebates and anticipated cash flow delays that will necessarily result from a rebate methodology for 340B discount pricing. Complying with a 340B Rebate Model Entails Significant Additional Administrative Burden for Covered Entities New 340B requirements added by manufacturers are adding substantial administrative costs to the program that divert funding from patient care. SCVH believes it is fair to assume that some percentage of rebate claims will be denied and, as such, will need to be appealed. Fighting and resolving such rebate denials will involve significant capital outlay. Since the County has not been confronted with a similar situation previously, it is difficult for the SCVH Pharmacy Department to the additional costs of challenging rebate delays and denials. However, we note that SCVH Pharmacy Department has already experienced difficulties with Medicare drug claims during the 3 months the MDPNP has been existence and we have serious concerns that navigating 340B discount rebate programs from different drug manufacturers will be similarly fraught. SCVH is concerned about rebate delays as well as outright rebate denials. The concerns about delays are especially pressing for drugs administered to patients in outpatient hospital departments. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Delayed rebates will interfere with the billing workflow for physician-administered drugs in outpatient hospital departments. HRSA has previously acknowledged the likely challenge of delayed or denied rebates but has failed to propose efficient and enforceable methods to address these issues. HRSAs previously issued FAQs indicate that in the event of a dispute, covered entities [or the IT platform vendor] and manufacturers should work to resolve the issue, and only once the parties have failed to find a consensus should the covered entity contact a generic HRSA email. Such a system is inadequate and would force covered entities to pay for the time and resources to negotiate payment when manufacturers are responsible for the failures. While SCVH is particularly concerned about dealing with rebate denials and delays, the fact is that the County is going to incur significant additional costs just to be in a position to submit rebate requests to drug manufacturers. If HRSA permanently adopts a rebate model that covers the same drugs as the Medicare Drug Price Negotiation Program (MDPNP), the SCVH Pharmacy Department is anticipating having to add FTEs to manage tasks entailed in complying with a rebate model, including claims level tracking and submission as well as reconciliation and dispute Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344 management. Moreover, the additional burden created by a 340B rebate model will impact more than just SCVH Pharmacy Department Staff. Managing different manufacturer requirements will create significant operational complexity beyond the current 340B system. Preparing to implement a proposed rebate program involved will necessitate staff coordination across multiple departments, including pharmacy, operations, accounting, information technology, and legal. Costs Associated with Having to Make Advanced Payments to Drug Manufacturers By fundamentally changing the nature of the 340B rebate program from a point-of- sale discount to a post-purchase reimbursement system, rebate models would require covered entities to pay substantial sums of money to manufacturers before receiving discount drug pricing, which here, will reduce the cash on hand for covered entities like those operated by SCVH, as well as any interest that could have generated from that funding. 340B rebate model policies thereby allows manufacturers to generate interest from money owed to safety-net providers, rather than allowing those monies to be held by our health system and used for patient care activity or access expansion initiatives. Projecting for implementation, we estimate that having to pursue after- purchase rebates to secure discount pricing on 340B drugs would reduce SCVHs cash on hand by approximately $3.9 million for a 30-day period, $7.9 million for a 60-day period and by roughly $11.8 million after 90 days. This significant reduction in available cash will create significant operational difficulties for our health system. Challenges in Maintaining an Adequate Supply of Drugs The 340B program is currently designed to provide upfront discounts, which helps covered entities ensure that an adequate supply of drugs to meet patients needs remains available. Ensuring an adequate supply of drugs is important for responding to emergencies and meeting the needs of patients with complex care needs. However, under the proposed rebate model, covered entities would lose access to 340B pricing for stockpiled drugs that are not able to be used because of the everyday realities of patient care. The costs of this policy will fall on patients, particularly those with rare diseases and complex care needs who already have challenges accessing the care they need. The Proposed Rebate Models Are Not Necessary to Address Drug Manufacturers Purported Program Integrity Concerns SCVH has described above the significant financial and administrative burdens covered entities will have to endure if forced to seek 340B pricing through after- purchase rebate requests. We believe it is important to contrast those burdens with the fact that there is little evidence to believe that the proposed rebate models will create any significant benefits in terms of protecting the integrity of the 340B program. Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344 Making 340B discount pricing available only through rebates would not improve 340B program integrity. HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, even assuming there is room for improvement with program integrity, there are significantly less burdensome alternatives to rebates that are available to HRSA. For example, the Department of Health & Human Services could require other state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting covered entity data retrospectively, allowing the agency to exclude 340B claims from rebate requests. If there are legitimate program integrity concerns with the 340B program which is not supported by any actual data or other evidence that has been proffered by manufacturers to datethose issues should be addressed by HRSA (and/or CMS with respect to duplicate discounts) through targeted modifications to the program rather than a disruptive overhaul of 340B by implementation of a rebate model. Additional Comments SCVH is concerned that the proposed rebate model would ultimately hinder rather than help covered entities achieve the goal of the 340B program: to stretch scarce federal resources to eligible patients and provide comprehensive care.3 SCVH therefore believes HRSA should withdraw the proposed 340B Rebate Pilot in its entirety and limit drug manufactures to making 340B pricing available only through up-front discounts for covered entities. If the rebate program serves to delay or prevent covered entities from doing so, then there is no need to make such a fundamental change to the 340B program. SCVH understands the need for further transparency and compliance within the 340B program. However, we believe that the proposed rebate program would not help in that regard. The proposed rebate model for access to 340B discount drug pricing only serves to increase administrative burden for covered entities while delaying the savings needed to help fund much needed care in the community. SCVH implores HRSA not to move forward with any form of 340B rebate model and allow the program to continue with point-of- purchase discounts only, consistent with the entire history of 340B and the intent behind creating a drug discount program for safety net providers. We thank HRSA for its consideration of the information provided in this letter. Sincerely, Paul E. Lorenz Chief Executive Officer Santa Clara Valley Healthcare Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344 Docusign Envelope ID: A0231C68-9E27-45C9-A72C-86D8E8320344
HRSA-2026-0001-2264Teva Pharmaceuticals2026-04-20T04:00Z52,635 chars
See attached file(s) 1 April 20, 202 6 Submitted Electronically via Regulations.gov Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Docket No. HRSA 2026 03042 ; Comments on Request for Information: 340B Rebate Model Pilot Program Dear Ms. Britton: Teva Pharmaceuticals (Teva) appreciates the opportunity to comment on the above -captioned Request for Information f rom the Health Resources and Services Administration ( HRSA ) regarding the 340B Program. Teva is a global pharmaceutical company, committed to helping patients around the world to access affordable medicines and benefit from innovations to improve patient health. We are a global leader in generics and biosimilars with a growing innovative portfolio. Our commitment to investing in generic s and biosimilar s demonstrate s an alignment with the original intent of the 340B Program to stretch scarce resources to deliver affordable care to those most in need . 1 in 13 U.S. generic prescriptions are supplied by Teva, resulting in more than $36B in generic medicine savings for the U.S. healthcare system in 2023. As a company deeply committed to expanding access to affordable medicines, Teva recognizes the importance of preserving the integrity and sustainability of the 340B Program. Yet, the programs rapid expansion, increasing complexity and lack of transparency have introduced challenges that threaten its long -term viability. In this context, we commend HRSA for taking meaningful steps to modernize the 340B Program and for recognizing the need to provide manufacturers with flexibility in how they meet their statutory obligations. As Teva has two products, AUSTEDO (deutetrabenazine) and AUSTEDO XR that were negotiated as part of IPAY 2027 - the second year of the Medicare Drug Price Negotiation Program (MDPNP) - we are particularly attuned to the need for a sustainable approach to effectuate the Medicare Maximum Fair Price (MFP) while accounting for purchases at the 340B ceiling price. Below, Teva first addresses broader policy considerations relevant to any potential 340B Rebate Model Pilot Program (rebate model) , and then responds to HRSAs specific questions 2 I. Foundational Requirements for a Viable 340B Rebate Model Pilot a. Any Future Rebate Model Must Include IPAY 2027 Manufacturers from the Outset In its prior pilot framework, HRSA limited participation to manufacturers with drugs selected for IPAY 2026. This was intended to allow HRSA to evaluate early program experience before expanding eligibility to later IPAY years. However, circumstances have materially changed. We are now well into 2026, and any new application period and approval process will not finalize until later this year . As a result, it is no longer feasible or equitable for participation to remain restricted solely to IPAY 2026 manufa cturers. For IPAY 2027 manufacturers, including Teva, the timing constraints are immediate and concrete. Manufacturers must notify CMS of their MFP effectuation method for IPAY 2027 drugs by September 1, 2026. Even before that occurs, Teva needs to sign the MTF agreements and start systems build s. Tevas selected product s, AUSTEDO and AUSTEDO XR , will require full implementation of effectuation processes, including any 340B -related pricing mechanism, beginning January 1, 2027. Given the systems development, testing , contracting, data -exchange protocols, and governance requirements associated with any rebate -based model, meaningful lead time is essential. Limiting participation to a past cohort of IPAY manufacturers and their negotiated products no longer serves any programmatic purpose. While Teva believes that any future rebate model should not be limited to just IPAY manufacturers and drugs with negotiated MFPs, at the very least any opportunity to operate a rebate model must include IPAY 2027 manufacturers from the outset. b. HRSA Should Broaden the Scope of a Rebate Model Beyond MFP Negotiated Drugs While the prior rebate model pilot was structured around drugs subject to a n MFP, HRSA should not carry forward that limitation in a future rebate model. Restricting the model to MFP negotiated drugs significantly constrain s its utility and fail s to address systemic inefficiencies that extend well beyond a narrow subset of products. A rebate model should be evaluated across a broader universe of covered outpatient drugs. Covered entities already have extensive experience receiving manufacturer rebates in non 340B contexts, and rebates are a well established mechanism for delivering price concessions across federal programs and commercial arrangements. Despite concerns that a rebate model would disrupt long standing 340B operations, the model resembles the existing replenishment framework where covered entities purchase drugs through standard distribution channels and later receive the applicable price concession. State AIDS Drug Assistance Programs (ADAPs) have successfully operated rebate based models for years, demonstrating that covered entities can implement and manage these systems effectively. By contrast, implementation of a rebate model requires substantial upfront and ongoing investment by manufacturers in IT infrastructure, data systems, and operational workflows. Under the prior guidance, manufacturers would be responsible for building and maintaining the rebate platform and providing necessary technical support to covered entities. Given this significant manufacturer investment it would 3 be a missed opportunity to confine the pilot to a small number of MFP drugs. Allowing broader application across a manufacturers covered outpatient drug portfolio would promote consistency, enable more effective prevention of duplicate discounts, and yiel d more meaningful insights into the feasibility of a rebate based approach to the 340B Program. c. HRSA Must Actively Confirm that Any Future Rebate Model P reempts State 340B Restrictions HRSA must make explicit in any future rebate model policy that state laws restricting or prohibiting the submission of 340B claims level data , and thus the operation of an approved rebate framework, are preempted by federal law. Congress established the 340B Program as a uniform, federally administered regime under section 340B of the Public Health Service Act, implemented through standardized agreements with HHS and enforced through exclusively federal oversight mechanisms. The Supreme Court has recognized that Congress centralized 340B administration on a nationwide basis, with responsibility for program operation, enforcement, and dispute resolution vested in HHS - not the States. This principle was most recently applied by the Fourth Circuit, which held that a West Virginia statute prohibiting manufacturers from conditioning 340B contract pharmacy participation on the submission of claimslevel data was likely preempted. 1 The court emphasized that state laws singling out 340B participants and restricting access to data necessary to prevent diversion and duplicate discounts impermissibly interfere with the federal spending power bargain Congress struck with manufacturers and intrude on HHS s exclusive authority to administer and enforce the program. The court warned that allowing states to bar claims level data collection would fracture a nationally uniform federal program into conflicting state bystate regimes and frustrate core federal objectives. The United States Department of Justice also recently began filing amicus briefs in multiple cases to advance this same understanding .2 However, t here is ongoing disagreement among the circuits. The Fifth and Eighth Circuits have upheld similar state laws, characterizing them as permissible regulation of pharmacy distribution rather than impermissible interference with the federal 340B scheme. This split has created material legal uncertainty for manufacturers, particularly for rebate -based models that depend on standardized, claims -level validation across jurisdictions. To avoid further fragmentation and to ensure that any rebate model pilot is workable on a national basis, HRSA should clearly communicate that state laws which impede a manufacturers ability to collect 1 PhRMA v. McCuskey, No. 25-1054 (4th Cir. Mar. 31, 2026). 2 Brief for the United States as Amicus Curiae, AbbVie Inc. v. Weiser, No. 25-1439 (10th Cir. Feb. 25, 2026); Brief for the United States as Amicus Curiae Supporting Appellant, AbbVie Inc. v. Neronha, No. 26-1039 (1st Cir. Feb. 25, 2026). 4 claimslevel data or otherwise participate in an approved rebate framework are preempted. Absent such clarity, rebate models risk becoming operationally infeasible . II. Costs to Covered Entities a. Estimate the incremental administrative and operational costs your organization would incur For covered entities, we expect the incremental administrative and operational costs associated with a 340B rebate model pilot to be limited, particularly because manufacturers will provide access to thirdparty portals to support claim submission and validation. These vendor platforms are already familiar to the covered entity community and their third party administrators, as similar systems are widely used today to support manufacturer contract pharmacy policies. Importantly, the data elements requested u nder a rebate model overlap substantially with data already collected and maintained in the ordinary course of operations, including for HRSA audits and for submission for contract pharmacy participation. As a result, the rebate model does not introduce no vel data collection requirements, but rather standardizes the submission of information that covered entities already possess. Operational burden is further mitigated by the extensive training, technical support, and automation made available by vendors operating these platforms. For example, in preparation for the prior pilot launch, vendors conducted extensive outreach and train ing, including dozens of live webinars and ondemand resources to guide covered entities and TPAs through registration, submission workflows, and reconciliation. In addition, vendor supplied software development kits enable direct, system tosystem submiss ions by TPAs and vendors, significantly reducing the need for manual data entry by covered entity staff. Many TPAs have already been onboarded through manufacturer vendors, demonstrating that automated submission at scale is feasible and can materially defray administrative effort. Taken together, these features suggest that any incremental costs to covered entities would primarily reflect one time onboarding and process alignment, rather than ongoing, labor intensive operational burden. b. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? There is no statutory authority for HRSA to require or contemplate offsets to covered entities administrative or operational costs under a 340B rebate model. The 340B statute strictly limits manufacturer obligations to providing covered outpatient drugs at or below the statutory ceiling price and issuing refunds in the event of overcharges. It does not authorize HRSA to impose new financial obligations on manufacturers to fund, reimburse, or otherwise subsidize covered entities participation in the progra m. Any effort to require manufacturers to offset covered entity costs , whether directly or through pass through mechanisms , would unlawfully expand manufacturer obligations beyond those enacted by Congress and would be inconsistent with the structure and limits of Section 340B. 5 Manufacturers responsibility should be confined to developing and maintaining a centralized rebate platform and making that platform available for covered entities to use at no cost. This is the appropriate and legally supportable boundary of manufacturer involvement. Manufacturers must not be expected to finance covered entities internal compliance activities, staffing, vendor arrangements, or operational overhead, all of which are longstanding components of voluntary participation in the 340B Program. This approach is consistent with both the original rebate model concept previously advanced by HRSA and the current contract pharmacy framework. Any future rebate pilot must follow the same principle. c. Identify any organization -specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program (e.g., rural, small business, community health center). Teva is concerned that this question may reflect consideration of a rebate model that would exclude or exempt certain categories of covered entities, such as rural hospitals, small businesses, or community health centers. Manufacturer pricing and compliance systems are not designed to administer the same product through multiple 340B pricing mechanisms simultaneously . Structuring a rebate model around covered entity classifications would introduce significant operational complexity and program integrity risks that jeopardizes the model s feasibility and effectiveness. Excluding certain covered entity types would also create structural opportunities for arbitrage and gamesmanship, particularly within integrated health systems. Many parent organizations operate facilities enrolled under multiple 340B covered entity types (e.g., hospitals, affiliated clinics, and grantees). If some entities are excluded from a rebate model while others are included, products could be acquired at the 340B price through an exempt entity and then dispensed or administered to patie nts of a nonexempt affiliated entity. These cross entity flows would be difficult to detect and would undermine the integrity of any pilot . Limiting participation based on covered entity classification would also distort the pilot s representativeness. Some covered entity types may account for a smaller share of total 340B registrations but represent a substantial share of 340B purchases for particular products or therapeutic classes. Excluding these entities would significantly weaken HRSA s ability to evaluate whether a rebatebased approach can meaningfully reduce duplicate discounts and improve transparency at scale. Finally, covered -entity labels do not map neatly to operating realities. Many health systems own multiple sub-entities under different 340B categories; exempting some while applying the rebate model to others encourages potential cross -entity arbitrage. Mo reover, classification labels can be misleading . For instance, a recent study show ed that over 425 urban hospitals have reclassified as rural to qualify for rural benefits in Medicare and the 340B Program, highlighting how these labels are administrative ly, not 6 geographically, assigned. 3 This allows large urban systems to exploit benefits meant for genuinely rural hospitals, making these classifications unreliable proxies. d. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Teva does not anticipate that a 340B rebate model would negatively affect patient access to medications. Today, 340B discounts are almost never passed through to patients at the point of sale, meaning that whether a prescription is processed as a 340B clai m has no impact on a patients ability to obtain a prescribed drug or the amount they pay for it. A comprehensive IQVIA analysis found that only 1.4% of 340B eligible branded claims at contract pharmacies used a 340B prescription discount card , a primary mechanism through which 340B savings can be shared with patients. 4 The analysis concluded that most lowincome, uninsured, 340B eligible patients do not directly benefit from 340B discounts. This is consistent with program operations: covered entities generally determine 340B status after a prescription has been dispensed, and the widespread use of virtual inventory models makes i t impractical to apply 340B pricing at the point of sale. Moreover, several studies indicate that the structure of the current 340B Program may unintentionally increase patient out ofpocket costs, particularly in the retail setting. 5 Because covered entities and contract pharmacies retain the full margin between the discounted 340B acquisition cost and the payer reimbursement, they are financially rewarded for dispensing higher priced drugs with the largest spread. Findings show that covered entity conversion decisions are often designed to maximize profitability, not to reduce patient spending, and that virtually none of the 340B savings reach patients at the counter. These incentives can lead to the selection of higher WAC products even when clinically appropriate, lowercost alternatives exist , potentially raising patient cost sharing, which is typically calculated as a percentage of the drug s price. Even if a covered entity chooses not to procure a drug under 340B through a rebate model, the patient can still fill the prescription at any pharmacy, and their cost sharing will remain governed by their insurance benefit design, not by the 340B acquisition cost. Because patient out ofpocket costs are 3 Wang, Y., Perkins, J., Whaley, C. M., & Bai, G. (2025). Sharp rise in urban hospitals with rural status in Medicare, 2017 2023. Health Affairs, 44(8). https://doi.org/10.1377/hlthaff.2025.00019 4 Martin & Illich, IQVIA (2022) Are discounts in the 340B Drug Discount Program being shared with patients? Available at: https://www.iqvia.com/locations/united-states/library/white-papers/are-discounts-in-the-340b-drug-discount- program. 5 Hunter, M. T., Gomberg, J., & Kim, C. (2018). Commercial payers spend more on hospital outpatient drugs at 340B participating hospitals. Milliman; Hunter, M. T., Holcomb, K., & Kim, C. (2022). Analysis of 2020 Commercial Outpatient Drug Spend at 340B Participating Hospitals. Milliman; Conti R, Bach P. The 340B drug discount program: hospitals generate profits by expanding to reach more affluent communities. Health Affairs. October 2014; Nikpay SS, Buntin MB, Conti RM. Relationship between initiation of 340B participation and hospital safety-net engagement. Health Services Research. 2020, 55: 157169; U.S. Government Accountability Office. (2015). Medicare Part B Drugs: Action Needed to Reduce Financial Incentives to Prescribe 340B Drugs at Participating Hospitals (GAO-15-442). https://www.gao.gov/assets/gao-15-442.pdf 7 already decoupled from the 340B discount, transitioning to a rebate model will not adversely impact patient access. If anything, it may reduce some of the spread based distortions in the current system that inadvertently expose patients to higher costs. III. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Teva is committed to prompt processing of 340B rebate payments, but the payment timeline should be consistent across federal programs to allow sufficient time to perform necessary validations. A 10 calendar day payment requirement, as contemplated in the prior HRSA rebate model, is compressed for manufacturers. By contrast, the MFP statute provides 14 calendar days for manufacturers to transmit refund payments. Aligning HRSA s requirement with the 14 day MFP timeline would provide needed consistency and en sure manufacturers have adequate time to run cross program checks before issuing payment. If HRSA nevertheless retains a 10 day requirement, it should be defined as 10 business days, recognizing that banking institutions do not process electronic fund transfers on weekends or federal holidays. Additionally, HRSA should confirm in any future model that the obligation is satisfied upon payment transmittal, not tied to phar macy receipt. Concerns about delayed payment to pharmacies or covered entities should also be viewed in context. Under MFP, pharmacies already do not receive the MFP adjusted reimbursement until after the manufacturer s refund is transmitted, which can be up to 14 days post dispense. A 14 day payment standard or less under a 340B rebate model is therefore equal to or faster than what pharmacies will already experience under MFP. Furthermore, 340B operational realities mean covered entities and pharmacies already tolerate payment lags far longer than 10 14 days. Under credit based replenishment, which many contract pharmacies voluntarily use, the pharmacy initially purchases drugs at list price and receives the 340B discount only retroactively when eligibility is confirmed . They effectively carry the acquisition cost while awaiting a later 340B credit adjustment. This model eliminates physical inventory delivery and uses credits wi thin the pharmacys retail account instead, demonstrating that covered entities routinely absorb delays longer than those proposed for a rebate model. Finally, none of these timing considerations account for the fact that pharmacies typically have extended payment terms with wholesalers. It is Tevas understanding that these payment terms often exceed the time it takes to receive plan reimbursement. Pha rmacies are generally reimbursed in full by the health plan shortly after claim adjudication, meaning they already recover the drugs cost well before any 340B reconciliation occurs. As a result, pharmacy cash flow risk is largely decoupled from 340B payme nt timing. 8 b. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program c ould be structured to ensure that manufacturers adhere to such a requirement. As discussed in our response to the preceding question, Teva supports a payment timing framework that is administratively workable and aligned with existing federal drug pricing programs. HRSA does not need to create new enforcement tools to ensure manufacturers adhere to a payment deadline. Instead, HRSA can look to the effectuation of MFP as a potential model. CMS monitors manufacturer compliance through standardized data flows, investig ates complaints or identified deficiencies, engages directly with manufacturers to resolve issues, and conducts audits and assesses civil monetary penalties where warranted. This structured oversight approach ensures compliance while allowing for the corre ction of good faith errors. HRSA could adopt a similar model for any 340B rebate pilot by defining when a payment obligation is triggered (i.e. upon submission of a complete, validated claim), monitoring compliance through centralized reporting, and using existing statutory authoriti es to address patterns of noncompliance. In short, CMSs implementation of the MFP demonstrates that monitoring, audits, and existing enforcement authority are sufficient, and provides a proven template for HRSA to follow. IV. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340 B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Any workable rebate model must allow manufacturers to deny rebate requests for standard, bona fide commercial and program integrity reasons, consistent with longstanding practices in channels where rebates are common and necessary to ensure accurate pricing and avoid improper payments. Restricting denials to only a narrow subset of circumstances , such as where a rebate was already paid to another covered entity on the same claim , would be operationally unworkable and would compel manufacturers to issue reba tes on claims that are plainly invalid or incomplete. For example, manufacturers must be able to deny rebate requests where the date of dispense is ineligible; where submissions contain invalid, incomplete, or improperly formatted data; where the covered entity or dispensing location is not actively registere d with HRSA as of the date of dispense; 9 where a claim is duplicative; or where the request reflects aberrant quantities strongly indicative of dataentry or unit conversion errors. At the same time, the manufacturers statutory obligation under Section 340B is limited and well defined. Manufacturers must offer covered outpatient drugs to eligible covered entities at or below the 340B ceiling price. Courts have made clear that this obligation regulates price, not payment mechanics, and does not require manufacturers to issue reba tes automatically or without validation. 6 An offer, by definition, may be conditioned on the submission of standard data necessary to determine whether a particular claim is eligible for 340B pricing, so long as those conditions do not effectively increase the price or foreclose access to the rebate or discount . Where a rebate request cannot be substantiated because it is incomplete, untimely, duplicative, or otherwise inconsistent with basic eligibility requirements, denying the request does not reflect a failure to offer the 340B price. It reflects the absence of a valid acceptance of that offer. HRSA therefore should not attempt to police manufacturers compliance by prescribing an exhaustive or rigid set of permissible denial reasons. Doing so would improperly collapse the distinction between offering the 340B price and paying a rebate and would go beyond what the statute requires. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Any standard process elements for rebate denials should be simple, transparent, and platform -based, with the primary goal of minimizing denials altogether. Manufacturer validation guidelines should be fully transparent and publicly available, enabling cove red entities and their third party administrators to validate claims against those requirements before submission. Clear, upfront visibility into validation criteria should reduce improper submissions and avoid unnecessary denials. It is also unclear what is meant by template forms in this context. HRSA should not issue or require standardized denial or appeal forms. All validations, denials, and corrections should occur within the rebate processing platform and be as automated as possible. Where a claim is denied, the platform should clearly communicate the specific reason for denial using standardized denial codes tied directly to the applicable validation rule. Covered entities should be able to correct incomplete or inaccurate d ata and resubmit the claim. The platform should also offer robust user support, including explanatory materials, help desk assistance, and technical guidance to help covered entities understand denial reasons and successfully resubmit valid claims where appropriate. V. Data Collection by Covered Entities 6 See Sanofi Aventis U.S. LLC v. Dept of Health & Human Servs., 58 F.4th 696 (3d Cir. 2023); Novartis Pharmaceuticals Corp. v. Johnson, 102 F.4th 452 (D.C. Cir. 2024) 10 a. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one -time or ongoing. A potential 340B rebate model should not materially change the core data collection activities already required of covered entities, either on a one time or ongoing basis. The data elements necessary to support rebate processing , such as covered entity identifiers, drug identifiers, dispense dates, quantities, provider and site information, and payer indicators , largely overlap with information that covered entities already collect, maintain, and routinely produce in connection with existing 340B compliance obligations. These data elements substantially mirror those required under the HRSA 340B audit data request lists, as well as the datasets maintained to support split billing, contract pharmacy oversight, diversion prevention, and duplicate discount avoidance. They also align closely with the data currently submitted through third party platforms used to operationalize manufacturer contract pharmacy policies. As a result, Teva believes adoption of a rebate model would primarily involve standardizing the submission of existing data, rather than imposing novel or burdensome new collection requirements. VI. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organizations practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record -maintenance practices. Tevas approach to identifying potential duplicate discounts in Medicaid has been materially similar to that employed by other manufacturers, relying on retrospective, data dependent analyses within the constraints of the 340B and Medicaid program structures. Teva s ability to identify duplicate discounts has depended heavily on the availability, timeliness, and quality of claim level Medicaid rebate data provided by State Medicaid Agencies or their contractors, which is not uniform across states and varies in format and completeness. Where claimlevel Medicaid rebate data were available, Teva reviewed those data against the HRSA Medicaid Exclusion File (MEF) to determine whether the dispensing covered entity had elected to carve Medicaid utilization into the 340B Program. The MEF includes Medicaid billing identifiers (such as NPIs or Medicaid provider numbers) for covered entities that have elected to carve in. Teva relied on this information to assess whether rebate claims submitted by states were potentially inconsistent with covered entities 340B elections and to identify claims that may warrant further review or dispute. Teva also conducted validation checks to assess whether states were using current and accurate versions of the MEF, recognizing that delays or inaccuracies in MEF u pdates could result in improper rebate billing. Where potential duplicate discounts were identified, Teva reviewed chargeback or sales data to determine whether the same covered entity had purchased the drug at the 340B price. This comparison helped distinguish claims likely subject to both a 340B disco unt and a Medicaid rebate. Claims identified through this analysis as potentially duplicative were raised with State Medicaid Agencies for review and resolution. 11 In addition, Teva employed provider level and pharmacy level matching techniques where data permitted. These analyses compared provider identifiers included in Medicaid rebate claims (such as NPIs and pharmacy identifiers) against Teva s 340B purchasing data to identify overlaps suggesting potential duplicate discounts. In more limited circumstances where Teva had access to contract pharmacy claims data, Teva compared those data with Medicaid rebate claims using transaction level attributes, such as prescription or transaction identifiers, dates of service, and provider or pharmacy identifiers, to identify potential duplication. Historically, resolving identified duplicate discounts has been very challenging. Follow up on disputed claims often depended on states engaging with covered entities and responding back to the manufacturer, and state responses were frequently delayed or incomplete. The effectiveness of remediation efforts was further constrained by delays in MEF updates and the lack of standardized Medicaid managed care guidance addressing duplicate discount prevention. Teva has sought to strengthen its reviews where feasible by leveraging claims data submitted pursuant to its contract pharmacy policies and associated platforms. However, the utility of these tools has been limited because only a subset of covered entities submit claims level data, and submission frequency varies. As a result, these data have supported targeted review efforts but have not enabled systematic, program wide prevention of duplicate discounts or diversion. In sum, Tevas pre 2026 practices reflected good faith, retrospective efforts to identify and address duplicate discounts and diversion, using the data available within a program structure that does not require covered entities to provide claims level transparency and limits manufacturers ability to conduct routine audits . The absence of standardized, reliable claims level data and enforceable eligibility criteria significantly constrained proactive oversight and necessitated reliance on cumbersome postpayment dispute processes. b. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). Manufacturers encounter multiple, interrelated challenges when attempting to identify potential duplicate discounts across the 340B Program and CMS payment programs. In practice, the most significant obstacles fall into four categories: limitations in data availability, difficulties in claim identification and matching, timing mismatches across rebate and claims systems, and state level policies that impede coordinated resolution of duplicate discount risks. Data availability. Tevas core limitation is the availability of 340B claims data. Teva receives very limited 340B claims level data as a general matter. Outside of certain contract pharmacy arrangements, manufacturers are not provided pharmacy or medical claims data for 340B utilization and have no routine, program wide visibility into which dispenses are ultimately designated as 340B. There is no standardized mechanism 12 that requires covered entities to share claims level information with manufacturers across the broader 340B Program. The only claims level 340B data Teva typically receives is data submitted pursuant to manufacturer contract pharmacy restrictions, and even then, only for a subset of covered entities and pharmacies that elect to participate under those terms. This data is limited in scop e and does not provide comprehensive visibility into all 340B utilization for a given drug or covered entity. As a result, manufacturers lack a complete baseline against which to evaluate potential duplicate discounts across programs. Claim identification and matching. Even when data is available, deterministic one toone matching across programs frequently breaks down. Pharmacy and medical claims use different schemas; small inconsistencies like missing Rx/fill identifiers, absent claim line numbers, mismatched units of measure (e.g., mg vs mL), or omitted modifiers routinely prevent precise pairing. These challenges are magnified in contract pharmacy workflows. Under replenishment practices, a single dispense can be associated with more than one covered entity absent standardized covered entity and site identifiers, creating ambiguous ownership and raising duplicate risk signals that are hard to resolve. In addition, retrospective eligibility determinations often reclassify dispenses as 340B well after the date of service, decoupling the original claim identity from the eventual 340B classification and frustrating lat er matching to Medicaid files. Finally, indirect fulfillment paths, such as central fill systems, can obscure which NPI and location actually dispensed or administered the drug, which is why matching must rely on line level claim identifiers and authoritative CE/site fields, not inferred relationships. Timing mismatches. 340B submissions, Medicaid rebate invoices, MFP refunds, and inflation rebate adjustments all operate on different cadences, while claims are routinely reversed or resubmitted long after the original service date. These asynchronous clocks create windows in which the same unit can surface in more than one channel before files converge, forcing labor intensive, retrospective investigations and recoveries. Statelevel impediments. Several states explicitly decline to engage with manufacturers on potential duplicate discounts, directing manufacturers to work only with covered entities and offering little to no state support or provide a clear reconciliation pathway. While some states look to the Medicaid Exclusion File, other states rely on stateunique modifier flags or lists that are not aligned to a common claim level standard and may not extend to managed care, elevating mismatch rates and prolonging resolution. In practice, these policies leave manufacturers without an authoritative, timely pathway to confirm or correct cross program conflicts, undermining consistent administration across Medicaid FFS and MCO. An increasing number of states have also implemented laws that expressly limit manufacturers ability to collect claims level data, manage contract pharmacy utilization, or condition 340B access on data submission. Without the necessary underyling data or an effective mechanism to engage both states and covered entities, it is 13 difficult to impossible for manufacturers to identify, prevent, or timely resolve potential duplicate discounts across programs. c. Identify the minimum data elements n ecessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data element s To reliably prevent duplicate discounts across the 340B Program and CMS payment programs , a rebate model must capture a core set of claim -level identifiers. These fields allow the manufacturer to match a 340B claim against rebate invoices submitted in other channels and ensure that the same unit is not counted twice. The following fields represent the minimum dataset needed for a Pharmacy Claim: Date of Service Date Prescribed Rx Number Fill Number 11 Digit National Drug Code (NDC) Quantity Dispensed Prescriber ID Service Provider ID 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) Group Number ID While the earlier IPAY rounds focused on drugs selected under Part D , several IPAY 2026 and IPAY 2027 products also have significant Part B overlap , and beginning in IPAY 2028 , CMS now selects drugs directly from the Part B benefit. Medical claims carry the coding, site -of-care, and dose -based information needed to reconcile physician -administered drugs, where unit conversions and multiple billing pathways introduce significantly more complexity than in the retail setting. Medical claims data must be included from the outset in any new rebate -model framework. Excluding this data would leave major gaps in manufacturers ability to detect duplicate discounts for Part B drugs and for Part D drugs that are also billed under medical benefits. It would also create an opportunity for channel shifting, where a covered entity procures a p roduct through a medical -benefit purchasing channel but later claims it as a pharmacy -dispensed unit. This risk cannot be mitigated unless pharmacy and medical claims flow into the same validation framework. A Rebate Model should collect t he following critical fields on medical dispenses: Date of Service Claim Line Number Claim Number Unit of Measure 11 Digit NDC Quantity Dispensed Rendering Physician ID Service Provider ID 340B ID Health Plan Name Health Plan ID HCPCS Code HCPCS Modifiers 14 In addition to pharmacy and medical claims, manufacturers require a small but essential set of purchase -level data to tie each rebate request back to the actual acquisition of the product. Purchase data enables verification that the unit being claimed for rebate was actually purchased by the covered entity, the rebate is being paid on the correct package and quantity, and covered entities are not using different purchasing channels for acquisition and dispensing, or replenishing t he same dispense multiple times. Without purchase data, manufacturers cannot confirm whether rebate requests reflect valid, single -unit purchases or whether cross -channel procurement patterns create duplicate -discount exposure. HRSA should include the following purchase data elements in any Rebate Model: Wholesaler Name Invoice Date Invoice Number Wholesaler Account Number Ship -to-Pharmacy NPI 11 Digit NDC Package Units 340B ID VII. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Consistent with the prior rebate model pilot, manufacturer reporting should occur quarterly and consist of two components: (1) a detailed extract of processed rebate claims and (2) a small set of standardized data aggregations. The claim -level rebate extract should include only the following fields, which mirror and modestly build upon the data elements specified in the 2025 guidance and are necessary to reconcile rebates: Claim submission date 340B ID NDC -11 purchased Quantity Unit WAC price Unit 340B ceiling price Unit MFP price (if applicable) Rebate amount Rebate payment date Rejection reason (if applicable) In addition, manufacturers should submit the following aggregate metrics, aligned with HRSAs stated interest in evaluating rebate effectiveness and timeliness: Aggregated sales by covered entity type as defined in section 340B(a)(4) of the PHSA Average number of days from claim submission to rebate payment Number of rebates paid after 10 calendar days 15 Number of rebates denied, with high -level denial reasons Number of claims determined to be eligible for MFP pricing instead of the 340B ceiling price as a result of the rebate model HRSA should also reconsider the role of the 340B Prime Vendor, Apexus, in collecting and evaluating any sensitive manufacturer data through a rebate model pilot . Although the February 26 Information Collection Request indicates that manufacturers would submit monthly data to the Prime Vendor, Apexus is currently the subject of a congressional investigation into its business practices and potentially misaligned in centives related to the 340B Program. Given these ongoing concerns, Apexus is not an appropriate entity to perform compliance evaluation or integrity assessments for a rebate model pilot involving proprietary pricing, rebate, and eligibility determinations. Consistent with the 2025 guidance, any Prime Vendor involvement should be limited to technical or platform related functions, with all program integrity review and compliance oversight retained by HRSA. b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA must maintain strict confidentiality over any proprietary or competitively sensitive manufacturer data submitted as part of a 340B Rebate Model Pilot Program. Transaction level data, pricing information, utilization patterns, and manufacturer specific sales volumes are commercially sensitive and, if disclosed, could provide competitors with insight into a manufacturer s commercialization strategies, contracting practices, or portfolio performance. Public release of such information would risk competiti ve harm and could deter manufacturer participation in any pilot program. To the extent HRSA determines that public reporting is appropriate, disclosure should be limited to high level, aggregated metrics that are necessary to assess the overall functioning of the pilot and that do not reveal information about any individual manufacturer. Any publicly shared data should be aggregated across all participating manufacturers, sufficie ntly anonymized, and reviewed to ensure that it cannot be recreated to infer manufacturer specific pricing, sales volumes, or rebate performance. c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Teva supports data reporting no more frequently than quarterly and for the duration of the pilot. Quarterly reporting provides HRSA with sufficient information to assess the pilots effectiveness while minimizing administrative burden. VIII. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Program a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B Program. 16 A rebate based model would meaningfully enhance the integrity of the 340B Program by restoring transparency and accountability that have been eroded as program operations have evolved. Today s 340B Program bears little resemblance to its original design. Covered entities routinely rely on contract pharmacies and replenishment based purchasing models that obscure the connection between the patient, the provider, and the drug acquisition. This fragmentation limits visibility into which prescriptions are truly 340B eligible and has contributed to persistent compliance challenges, particularly duplicate discounts and diversion. The statute expressly prohibits the payment of both a Medicaid rebate and a 340B discount on the same unit of drug. 7 In practice, however, duplicate discounts occur regularly in Medicaid as well as across other channels. Independent analyses estimate that manufacturers paid approximately $1.6 billion in Medicaid duplicate discounts in 2019 alone, 8 and that roughly one quarter of all 340B sales in 2021 involved a duplicate discount across all channels, costing manufacturers $20 25 billion annually. 9 Government oversight bodies, including the GAO and HRSA, have repeatedly confirmed that duplicate discounts remain a systemic weakness of the program. 10 These failures stem in large part from the current pay andchase model, which forces manufacturers to identify and recover duplicate discounts after the fact through cumbersome disputes, audits or the ADR process - mechanisms that are reactive, costly, and illsuited to addressing program wide risks. A rebate model offers a practical and integrity enhancing alternative. By requiring covered entities to submit claims level data in order to receive a 340B rebate, the model provides manufacturers and HRSA with timely, transaction level visibility into dispenses . This information enables manufacturers to prevent duplicate discounts before they occur, rather than attempting to unwind them after payment, and reduces reliance on audits and disputes. Allowing manufacturers to use rebate model data across paymen t channels - including Medicaid - would significantly strengthen program integrity by targeting the primary source of waste and abuse . For these reasons, HRSA should not limit the use of a rebate model , or the data generated through it , to a narrow subset of drugs (such as MFP negotiated products) or to isolated channels. CMS has already recognized the value of claims level data sharing in proposing a 340B claims repository for Medicare Part D to prevent inflation rebate duplication on 340B units. The same logic applies with equal force to Medicaid and other channels where duplicate payments frequently occur. Permitting manufacturers to use rebate model data to prevent duplicate discounts across programs would materially improve oversight, reduce waste, and advance the core integrity objectives of the 340B statute without imposing new obligations on covered entities. 7 42 USC 256b(a)(5)(A)(i) 8 Kalderos. 2021 Annual Report: Making health policy work for patients. 9 IQVIA, Uncover the Invisible Impacts of 340B Discounts, Greenwalt, Luke. Dec. 20, 2021 10 See HRSA, Program Integrity: FY24 (Aug. 2025) https://www.hrsa.gov/opa/program-integrity/fy-24-audit-results Audit Results; GAO, HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, GAO-21-107 17 b. Explain whether a rebate -based model would assist manufacturers in their efforts to avoid paying duplicate discounts and 340B and CMS payment programs; reduce diversion or improper claims; and increase pricing transparency across stakeholders As discussed in previous answers , many of the potential program integrity benefits of a rebate based model derive from the enhanced data visibility and structured reconciliation inherent in a rebate framework. This structure allows manufacturers and HRSA to verify compliance using objective, transaction -based data rather than indirect proxies from upstream purchasing arrangements. Additionally , improved transparency under a rebate model could enable more targeted and effective oversight by HRSA and manufacturers. Access to standardized, reconciled rebate and utilization data would allow HRSA to better focus its covered entity audit activity on areas of demonstrated risk, rather than relying on limited , more anecdotal information. For manufacturers, greater transparency could help establish the reasonable cause required under the statute to exercise audit rights, improving compliance enforcement while reducing disputes driven by incomplete or opaque data. Finally, a rebate model offers an opportunity to address the significant transparency gap that currently distinguishes the 340B Program from other major federal healthcare programs. While 340B may soon be the largest federal health care program , it operates with far less publicly available data than Medicare or Medicaid - programs for which essentially 100 percent of claims data are made available to researchers and policymakers. By contrast, no comparable data are available in 340B, even to the parties fun ding the program (manufacturers) or overseeing it (HRSA). A rebate model, paired with appropriate reporting , could begin to close this gap and enable more meaningful program evaluation . Conclusion Teva appreciates HRSAs decision to seek stakeholder input on the future of a 340B Rebate Model Pilot Program and commends the agency for recognizing that modernization is necessary to preserve the integrity and sustainability of the 340B Program. As the p rogram has grown in scale and complexity, its operational frameworks have not kept pace . A rebate model offers a meaningful opportunity to address the programs challenges while maintaining access to discounted drugs for covered entities. To succeed, however, any future rebate model must apply broadly enough to yield meaningful insights, include IPAY 2027 manufacturers from the outset, and respect the statutory limits of manufacturer obligations under Section 340B. HRSA also must provide clarity on preemption, data use, and payment mechanics to ensure that approved models are workable on a national basis and do not fracture into conflicting state -by-state regimes. 18 Teva stands ready to continue working with HRSA to ensure that any rebate model pilot advances transparency, strengthens program integrity, and supports the long -term sustainability of the 340B Program . Sincerely, Christopher Weiser Associate General Counsel , Value & Access and Pricing Teva Pharmaceuticals
HRSA-2026-0001-2265White River Health2026-04-20T04:00Z13,583 chars
Please see the attached letter regarding the 340B Rebate Model Program from White River Health in Batesville, Arkansas. Thank you, Maggie Williams, PharmD White Wer HEALTH April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: White River Health respectfully submits these comments in response to the Health Resources and Services Administration's Request for Information concerning the 340B Rebate Model Pilot Program. White River Health is a Disproportionate Share Hospital located in Batesville, Arkansas, and has participated in the 340B Drug Pricing Program since July 2009. Across the seventeen years of our participation, the 340B savings mechanism has become deeply embedded in our institutional operations, financial planning, and capacity to serve the communities that rely on us. White River Health respectfully urges HRSA to abandon the proposed rebate model and pursue deduplication between 340B and the Medicare Drug Price Negotiation Program through the alternatives described in Section 6 of this comment. 1. Scale of Our 340B Program The scope of the proposed rebate mechanism's impact on White River Health is best understood through program scale. Across the drugs selected under the Medicare Drug Price Negotiation Program for IPAY 2026 and 2027, White River Health processes more than 20,000 claims annually. Recognizing that the drugs added to the MFP list in 2026 rernain in effect alongside the drugs added in 2027, the seiected drugs represent 53.5% of our total 340B programmore than i01 _ Main: (870) 262-1200 9 1710 Harrison Street Batesville, AR 72501 WhiteRiverHealth.org White I4ver HEALTH half of our 340B activity sitting under the rebate mechanism. These figures matter for the analysis that follows because they determine both the absolute dollar magnitude of the rebate mechanism's impact on our institution and the proportional share of our 340B program that would sit under a rebate process. The scale of the impact on White River Health is substantial on both dimensions, and the agency should consider our comments in that context. 2. Financial Impact of the Proposed Rebate Model Applied to our 2025 claims data for the drugs selected under the Medicare Drug Price Negotiation Program, White River Health's current 340B acquisition cost for the full set of selected drugs in 2027 is approximately $3,353,000. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on those same drugs is approximately $18,509,000 in 2027. The annual working capital requirement, measured as the difference between current 340B acquisition cost and WAC cost, is approximately $15.16 million. Capital at that scale, diverted annually to manufacturer rebate processing, is not a marginal adjustment even for an institution of our size. It would have to be sourced through a combination of borrowing, with its attendant interest expense and debt service obligations, and offsetting reductions in service lines or staffing. A rebate mechanism would, in effect, require White River Health to extend interest-free financing to drug manufacturers while we await the statutory discount to which we are entitled. Even the ten-day manufacturer payment window contemplated in prior pilot iterations does not eliminate this exposure; it simply defines how long we hold the capital before resolution, and it does nothing at all to address claims that are denied outright. If HRSA were to extend the rebate mechanism beyond the pilot to cover the full 340B program, our combined annual upfront capital requirement would rise to more than $25 million on an ongoing basis. That figure represents a permanent annual financing requirement of a magnitude that would materially alter our institutional financial planning for the indefinite future. Separately, the Maximum Fair Price has already eliminated approximately 14% of our would-be 340B savings on the selected drugs in the first quarter of 2026, before any rebate mechanism has been implemented. A rebate model layered on top of that compression would require White River Health to absorb two distinct losses on the same drugs: the savings MFP has already taken, and the capital float and denial exposure a rebate mechanism would introduce. 3. Operational lmpact Beyond the financial exposure described above, the proposed rebate model would impose operational constraints that our current infrastructure is not positioned to absorb. Three operational realities warrant the agency's specific attention. First, our wholesaler arrangements are calibrated to 340B acquisition pricing, not WAC. A transition to WAC on the selected drugs materially increases our monthly invoice exposure against credit limits established for a different Main: (870) 282-12o0 9 1710 Harmon Street BatesvIlle. AR 72501 WhiteRiverHealth.org White River HEALTH purchasing profile. Ahead of the 2026 pilot, our wholesalers were neither prepared nor, in some cases, willing to extend the credit limits needed on our 340B accounts to operationalize even the partial rebate program. Once credit limits are exceeded, wholesalers stop fulfilling drug orders, halting the 3408 program for all products, not just those selected for the pilot. At the claim volume White River Health processes, even a short interruption in wholesaler replenishment on the selected drugs would have meaningful implications for the sustainability of our 340B prograrn. Without 3408 replenishrnent orders to contract pharmacies, there is no 3408 revenue for our hospital. This operational hurdle alone should be sufficient to prevent further conversations about converting this vital program from an upfront discount to a retrospeoive rebate. Second, reconciliation infrastructure is inadequate to support a rebate program at the scale HRSA is conternplating. Based on our review of the third-party vendor interface selected by manufacturers for the originally planned 2026 rebate pilot, available data and reporting functionality were insufficient to support a reliable and practical reconciliation process. The vendor cited HIPAA compliance as justification for not retaining prescription numbers on claims, but any vendor entrusted with this function should meet the security requirements necessary to maintain and report Rx numbers to system users. Without reliable Rx-level reconciliation, there is no meaningful way to trace, dispute, or recover denied rebate claims at the volume White River Health would need to process. And a transient crosswalk that is only available at the single point of upload, is not a sufficient solution to meet the risk that HRSA would be thrusting upon our hospital. Third, the rebate mechanism inverts the financial risk architecture of the 340B program. Drug manufacturers have pursued unilateral policies restricting 340B access at contract pharmacies for the past five years. Those restrictions remain the subject of ongoing litigation and regulatory dispute. A rebate model places those same manufacturers in the position of adjudicating rebate clairns on the contract pharmacy dispenses they have been attempting to exclude from 340B through other means. We have no reasonable basis on which to plan for good-faith claim processing under these circumstances. The workforce implications are commensurate with the scale described above. White River Health estimates a need for approximately 1.5 additional full-time equivalents to manage reconciliation, denial tracking, data submission, and dispute workflows for the selected drugs alone. That is approximately 60 hours of additional work per week, more than an order of magnitude greater than HRSA's Information Collection Request estimate of five hours per week. Any extension of the rebate mechanism beyond the pilot drugs would scale this requirement further. 4. Reliance Interests Seventeen years of institutional practice have accumulated around the expectation that the statutory 340B discount would be reflected at the point of acquisition. White River Health designed its pharmacy operations, wholesaler relationships, contract pharmacy arrangements, staffing levels, and long-term financial planning in reliance on the id 1710 Harrison Street Batesville, AR 72501 dal WhiteRiverHealth.org White Rver HEALTH upfront discount model that has governed the 340B program since its inception. The settled reliance interests in that model are real, material, and not readily reengineered around a fundamentally different discount mechanism. The mere existence of statutory authority to permit rebates does not suggest that such a shift is prudent, particularly where no identified problem with the upfront discount model justifies the change. 5. Point-of-Sale Mechanics and Patient Access Our patients are able to access discounted 340B drugs at our contract pharmacies because the ceiling price is reflected in the acquisition cost at the time the prescription is filled. Under a rebate model, White River Health would acquire the drug at Wholesale Acquisition Cost, and the 340B benefit would be reconciled after the fact. We appreciate that HRSA has attempted to address this by proposing an ad hoc ceiling price file for rebate-covered drugs, but our third-party administrators were not in a position to operationalize that file in the few working days of lead time before the planned 2026 start. Three outcomes are possible and none are acceptable. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. The patient pays the WAC-priced copay and never returns for a refill. Or the pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay, and White River Health floats the cost until a rebate is received. If our most disadvantaged patients lose access to the discounted price of these drugs, they face serious and severe consequences: complications, amputations, thrombotic events, hospitalizations, and even early death. The current 340B model ensures we are able to facilitate access to the drugs required to manage our patients' diseases before they become emergencies. The financial burden of purchasing these drugs at WAC though, puts our hospital in a position where way may not be able to carry the risk associated with extending the 340B cost to our patients directly at the pharmacy counter while we wait for a rebate that may never come through. 6.The Alternatives and Request The deduplication objective the rebate model is designed to address is a legitimate policy matter. A manufacturer is not obligated to pay both the 340B discount and the Maximum Fair Price rebate on the same unit of drug, and some mechanism must exist to prevent duplication. The algorithms manufacturers have deployed to identify 340B claims for deduplication purposes are demonstrably unreliable and no substitute for the multi-feed claims identification work performed by 340B third-party administrators. The question for HRSA is whether the rebate model is the least burdensome means by which to accomplish that objective, and White River Health respectfully submits that it is not. A neutral, federally administered claims clearinghouse would accomplish the same deduplication objective without placing drug manufacturers in the position of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital to manufacturers, and without creating the operational, compliance, and access concerns described in Sections 3 and 5. CMS has already begun developing this framework through the 340B claims repository M 'gni, - 710 Harrison Street ' _ Main: (8;0) "(D2-1 LQ0 Batesville, AR 72501 'OW VW, whiteRiverHealth.org Sincerely, White I4ver HEALTH finalized in the CY 2026 Physician Fee Schedule. Bipartisan congressional proposals, including the PROTECT 3406 Act and the SUSTAIN 340B Act, point in the same direction. Alternatively, manufacturers are already permitted to require 3406 ciaims data from covered entities as a condition of 340B access. That data could be used directly for MFP/3408 deduplication rather than deploying unreliable third-party vendor algorithms or the rebate model. One improvement to this approach would be for all manufacturers requiring claims data uploads to permit covered entities to attest to compliance with data upload requirements for new pharmacy accounts or accounts without usage at the time the claims data requirement is instituted. White River Health respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program in its entirety, and pursue deduplication between 340B and MFP through a neutral clairns clearinghouse or direct use of the manufacturer claims data already being collected, with the attestation accommodation described above. Thank you for your consideration of these comments. I am available to provide additional data, operational detail, or clarification as the agency may find useful. at Maggie Williams, PharmD Vice President of Ambulatory Care and Ancillary Services White River Health Batesville, Arkansas 340B ID: DSH040119 Main: (870) 262-1200 1710 Harrison Street Batesville. AR 72501 WhiteRiverHeaith.org
HRSA-2026-0001-2266AltaPointe Health Systems, Inc.2026-04-20T04:00Z43,448 chars
Good afternoon, Please see the attached letter in response to the Request for Information related to the 340B Rebate Model Pilot Program. 'imitaPoW, April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Ivlaryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: AltaPointe Health Systems, Inc. (AltaPointe Health) appreciates the opportunity provided by the Health Resources and Services Administration to submit comments on the proposed 340B Rebate Model Pilot Program. The extended comment period gave our health center the time necessary to conduct a thorough analysis of the operational and financial risks this proposed model presents. The 340B program is essential to our ability to serve the most vulnerable members of our community, and the proposed changes would jeopardize that work by shifting a greater burden from manufacturers to safety net providers. I. We Strongly Urge HRSA To Exempt Health Centers from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program poses a serious threat to the health center program's fundamental mission and represents a significant departure from the 340B Drug Pricing Program's original intent. When Congress passed the 1992 legislation, the goal was to give safety net providers an additional revenue stream to "stretch scarce Federal resources as far as possible." For more than thirty years, the 340B program has allowed health centers to purchase outpatient medications at deeply discounted prices, making it possible to offer affordable and in many cases free medications to millions of low-income and uninsured patients. The proposed rebate model places all of that at risk. Requiring health centers to purchase medications at full price and wait for manufacturers to adjudicate and issue rebates would create severe financial strain and directly undermine health centers' capacity to serve the 52 million patients who depend on them for care. For AltaPointe Health specifically, this model would: Jeopardize our ability to dispense 35,636 prescriptions to more than 20,170 patients Dramatically increase our administrative burden and associated costs Compromises our ability to provide medications, uncompensated care, transportation, and interpretation services to those who need them most AltaPointe Health strongly urges HRSA to exempt health centers from any rebate model. Doing so is essential to preserving the financial stability of safety-net providers and ensuring that the most vulnerable patients retain uninterrupted access to the healthcare they depend on. 5750-A Southland Drive I Mobile, AL 36693 I (251) 450-2211 " AltaPointe.org II. Patient Impact For uninsured and underinsured patients who depend on the affordability the 340B program provides, this model could put critical medications financially out of reach. As a direct result of a 340B rebate pilot program, patients may be forced to switch medications due to cost or limited availability -- decisions that carry real clinical consequences. These involuntary therapeutic substitutions introduce significant risks, including medication nonadherence, treatment delays, and adverse health outcomes. This is particularly concerning for patients managing multiple chronic conditions who have few therapeutic alternatives and limited access to other pharmacies. AltaPointe Health has serious concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. Health centers have historically served patient populations with a significantly higher prevalence of chronic conditions such as diabetes, hypertension, and obesity.' The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027 and included in the proposed rebate model are used to manage precisely these types of conditions. As a result, health center patients would be disproportionately affected by this proposal, as they depend on affordable medications to manage these long-term illnesses. Patients who depend on SGLT2 inhibitors including Farxiga and Jardiance stand to be significantly harmed. These medications are a cornerstone of primary care for Type 2 Diabetes, chronic kidney disease, and heart failure, conditions that are widespread in our patient population. Studies have demonstrated that even a brief 30-day interruption in therapy elevates the risk of cardiovascular death or hospitalization for heart failure.2 Rendering these treatments financially out of reach would, in practice, deny patients access to the most effective tools available for managing their chronic conditions and would foreseeably drive a rise in hospitalizations that could otherwise be prevented. The United States is facing a deepening mental health crisis nearly one in four Americans (23.4%) live with a mental illness.3 Beginning in 2027, the MDPNP will expand to include select behavioral health medications. Among them is Vraylar, an atypical antipsychotic and a frontline treatment for Schizophrenia. The 2027 list also includes Austedo, a medication used to treat Tardive Dyskinesia a movement disorder that commonly develops as a side effect of long-term antipsychotic use. Clinical evidence underscores its value: studies have found that 73% of patients treated with AustedoN achieved treatment success, with meaningful improvements in quality of life.4 AltaPointe Health was founded as a community mental health center and continues to serve a disproportionately high number of patients living with serious mental illness. For that reason, we I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. I Ambul Care Manage. 2012 lan-Mar;35(1):50-9. doi: 10. I 097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https:1'www.ahajournals.org.depdf.'10.1161 circulationaha. l 23.065748 5 Substance Abuse and Mental Health Services Administrafion. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.govidata/data- we-col lect/nsduh-nat ional-surveydrug-u se-and-health. national-releases 4 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 2 are deeply concerned about the access barriers the proposed rebate model would create for these medications. Restricting patient access to effective psychiatric treatments risks worsening an already strained mental health landscape and could contribute to a further deterioration of the broader crisis. The implications for insulin access are particularly serious and directly at odds with federal requirements. More than 3 million Americans rely on health centers for diabetes care,5 making insulin affordability a matter of life and death for a substantial and vulnerable segment of the population. Compounding this concern, Executive Order #14273 ties future Section 330(e) funding to health centers' ability to provide low-income patients with access to discounted insulin. Under the proposed rebate model, no viable mechanism exists to deliver these discounts as required. In a retrospective rebate structure, the wholesaler price file reflects the full wholesale acquisition cost rather than the reduced 340B price. As a result, patients would be charged the full, unsubsidized cost at the point of sale a price that is out of reach for many of the low-income individuals health centers serve. This not only creates a practical barrier to access but also places health centers in an untenable position, unable to meet their legal obligation to offer mandated discounts at the time of dispensing. Health centers are legally mandated to offer sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines the same patients who depend on those health centers not just for affordable medical care, but for affordable medications. These two pillars of access are inseparable. Eliminating the up-front 340B discount would make it operationally impossible to continue dispensing the drugs included in the pilot at prices these patients can actually afford. The predictable consequence of the proposed rebate model is that the nation's most vulnerable patients will be forced to go without medications they cannot afford, at a cost that will ultimately be borne in emergency rooms and preventable hospitalizations. Ill. Administrative Complexities and Financial Challenges for Health Centers A recent assessment by the National Association of Community Health Centers (NACHC) makes clear that compliance with the proposed rebate model will entail real operational costs. Health centers will face increased workforce and IT expenditures as they work to meet the varying requirements of multiple manufacturer rebate programs each with its own data submission standards, timelines, payment reconciliation processes, and dispute procedures for denied rebates. The experience of navigating manufacturers' existing contract pharmacy restrictions offers a preview of what lies ahead: significant investment in technology infrastructure and the reallocation or outright hiring of staff to manage an increasingly complex administrative landscape. The scale of this burden will grow in proportion to prescription volume, meaning high-capacity health center pharmacies will shoulder a disproportionate share of the strain. This is not a hypothetical concern for AltaPointe Health it is our current reality. We are already absorbing the administrative weight of monitoring pharmacy rebates and manufacturer adjudications stemming from the Inflation Reduction Act's Maximum Fair Price program. Layering an 5 2025 UDA Data, HRSA (hrsa.gov) 3 additional rebate pilot on top of existing obligations does not merely add complexity; it compounds an already significant burden on organizations whose resources are best directed toward patient care. 340B Rebate Model Operational & Administrative Costs To quantify the financial and operational impact of both current manufacturer restrictions and a potential rebate model, AltaPointe Health utilized cost calculator tools developed by NACHC in partnership with FQHC 340B Compliance. Drawing on 2025 UDS data, staffing and external consulting costs, and dispensing and capture activity, we produced a data-driven forecast of the rebate model's likely impact on our operations. The findings, when viewed alongside the revenue losses and rising operational costs already attributable to the growing web of existing manufacturer restrictions, paint a clear picture: a rebate model would deal a serious blow to an organization already operating under financial strain. These are not abstract projections they reflect the compounding pressures facing a health center that serves some of the most medically complex and economically vulnerable patients in our community. According to an internal NACHC assessment, nearly half (47%) of responding health centers estimate needing 0.5 to 1 full-time equivalent (FTE) to manage anticipated 340B rebate claim reporting, while 36% estimate needing 1 to 2 FTEs, and 7% project needing more than 2 FTEs.6 AltaPointe Health anticipates needing 2.5 additional FTEs at an annual cost exceeding $210,000 to address the increased regulatory, operational, administrative, and compliance demands created by a rebate model. The same assessment found that one midwestern health center serving approximately 12,000 unique patients last year projects annual costs exceeding $3 million under this pilot program. These costs include upfront drug purchasing expenses, increased labor, carrying costs, and potential losses on discounted or expired drugs for which rebates are not recovered.7 AltaPointe Health similarly projects upfront drug purchasing costs for this pilot program to exceed $1.8 million. Health centers already operate on razor-thin margins, making these additional costs untenable for many organizations. The volume of prescriptions filled for the 10 selected drugs will directly affect the administrative burden health centers face in tracking and managing rebate claims and payments. AltaPointe HeaIth has determined that additional staff hours will be required to report 340B rebate claims to a third-party platform assuming full adherence to all nine drug manufacturers' programs based on the time already devoted to complying with existing manufacturer contract pharmacy restrictions and IRA Maximum Fair Price (MFP) reconciliation requirements. The absence of standardization across manufacturers and the likelihood of varying requirements between them will compel health centers to rely on multiple internal systems to manage and report the same data, driving up both costs and operational complexity. AltaPointe Health urges HRSA to mandate uniformity among eligible manufacturers to reduce the administrative and financial burdens of receiving timely, accurate 340B rebates. 6 Internal NAHEALTH CENTER assessment (99 responses). 7 Ibid. 4 Pharmacy Software & Third-Party Administration Changes Beyond staffing considerations, the proposed rebate model would necessitate significant changes to pharmacy and Third-Party Administrator (TPA) workflows. AltaPointe Health urges HRAS to carefully weigh the heightened compliance demands that arise when manufacturers are permitted to impose varying data submission standards and requirements. Furthermore, if manufacturers retain the discretion to mandate different software platforms as is currently the case with contract pharmacy policies the operational impact on health centers would compound significantly. The In-House Pharmacy: The Burden of Deep IT Integration For health centers that operate their own pharmacies, the proposed rebate model represents far more than a routine accounting adjustment it is a significant technological disruption. Achieving and maintaining compliance will require costly customization of in-house pharmacy systems to deliver real-time, accurate pricing information at the point of dispensing. As of this RFI response, AltaPointe Health is still in active discussions with vendors to determine what enhancements and modifications will be necessary to adapt existing software to the new workflows. As a result, specific cost estimates are not yet available. AltaPointe Health also anticipates that vendors and TPAs will impose ongoing service fees to support and maintain the complex rebate tracking functionality these changes require. These costs will recur and permanently erode 340B program savings. Beyond software expenses, AltaPointe Health expects to hire additional pharmacy staff or reallocate existing personnel to monitor purchase and price files and verify that every rebate aligns with the statutory 340B ceiling price. The complexity of this work is not theoretical it is already evident in the considerable time staff have spent reconciling IRA MFP rebates and identifying instances where rebates have not been paid in full for certain drugs. The Contract Pharmacy: The Burden of Network Coordination For health centers that rely on contract pharmacy arrangements, the proposed rebate model introduces complexity that threatens the viability of these partnerships. AltaPointe Health currently works with 28 independent and chain pharmacy locations to expand patient access to affordable medications. These partnerships are essential several AltaPointe clinic sites are located 30, 40, and even 220 miles from the nearest entity-owned pharmacy, making contract pharmacies a critical access point for many patients. TPA Reliance and Fees: Managing manufacturers' varying requirements across multiple contract pharmacy locations demands significant TPA involvement. AltaPointe Health anticipates that TPAs will pass the costs of developing rebate-tracking modules directly to health centers through increased per-claim fees. Verification Latency: The rebate model creates an inherent reconciliation gap. Staff must actively monitor claims across all 30 contract and entity-owned pharmacy locations to confirm that rebates are paid accurately and in full. Risk of Pharmacy Exodus: Because the rebate model shifts financial risk onto the pharmacy, AltaPointe Health is concerned that contract partners will choose to exit the 340B program entirely rather than absorb the associated administrative and financial burden. The 5 consequences for patients would be severe. Patients at AltaPointe's Coosa County, Alabama, location, for example, would be left without access to affordable medications. This concern is not isolated more than 17 percent of the U.S. population already lives in a pharmacy desert,8 and pharmacy closures continue to worsen this crisis, with nearly 30 percent of pharmacies that were open in 2021 having closed by year's end.9 Clinic Administered Drugs: The Burden of New Systems Required AltaPointe Health had planned to begin using the 340B program for purchasing clinic- administered drugs (CADs) this fiscal year. Analysis projected savings of more than 40% on drug costs savings that would have been reinvested to expand clinical services and offset the cost of care provided to uninsured and underinsured patients. The proposed rebate model, however, has put this plan at serious risk. Currently, CAD inventory and ordering are managed through a manual but cost-effective process. The reporting requirements introduced by the rebate model along with new requirements recently imposed by three major drug manufacturers would necessitate software systems capable of integrating with our electronic medical record (EMR) platform. NACHC estimates these costs range from $30,000 to $50,000 annually and could be significantly higher depending on the selected software.'0 Beyond the increased software costs, the unique billing structure of health centers creates additional challenges under the proposed rebate model: Bundled Payments: Most CADs administered at health centers are bundled into the Prospective Payment System (PPS) billing. Because PPS visits are reimbursed at a flat rate, medications administered during these visits are frequently either omitted from payer claims entirely or listed with zero charges and payments. Simplified Records: Because health centers maintain limited CAD inventories and these drugs are typically not billed as separate line items, it remains common practice to track administration and inventory on paper, with medication details documented in patient visit notes. While health centers maintain complete perpetual inventories and administrative records, the paper-based nature of these records creates an added burden of converting them to electronic format before submitting for rebates. Electronic medication administration records (eMARs) a standard in hospital EMR systems are uncommon in health center settings, and when available, they require a separate software system at an additional cost. Minimal Risk of Duplicate Discounts: Health centers primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFPs) apply only to Medicare Part D claims in 2026 and 2027, expanding to Medicare Part B in 2028. For Medicaid, states already have established mechanisms to prevent duplicate discounts, including the Medicaid Exclusion File maintained within HRSA's Office of Pharmacy Affairs Information System (OPAIS). Recommendation Exclude CADs from Any 340B Rebate Pilot: HRSA should explicitly exclude clinic-administered drugs from any 340B rebate model pilot. At a minimum, CADs should remain excluded unless and until they are billed as discrete claims 8 Vulnerability Index Approach to identify Pharmacy Deserts and Keystone Pharmacies l Pharmacy and Clinical Pharmacologv JAMA Network Open l JAMA Network 9 httos://www.healthaffaimorg/doi/abs/10.1377/hlthaf12024.00 92?iournalCodehlthaff 1 internal NAHEALTH CENTER survey data 6 by health centers and a demonstrable duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Incorporating CADs into a rebate pilot at this stage would impose disproportionate administrative burdens, software costs, and compliance risks on health centers with no corresponding benefit to program integrity or federal oversight. IV. Financial Challenges for Health Centers Under the proposed 340B Rebate Model pilot, health centers would be required to purchase drugs at full retail price the Wholesale Acquisition Cost (WAC) before receiving any 340B savings. This represents a significant departure from more than 30 years of established practice and would severely strain health centers' cash flow. Rather than accessing discounted pricing at the point of purchase, health centers would be forced to wait for manufacturers to review and approve rebate payments after medications have already been dispensed. This financial uncertainty would compel health centers to make difficult decisions about resource allocation, potentially resulting in cuts to essential services, reduced operating hours, or the discontinuation of programs critical to patient health outcomes. The shift to upfront WAC purchasing would also directly undermine health centers' ability to offer patients steeply discounted medications at the point of sale. Health center pharmacies including both entity-owned and contract pharmacies would no longer have access to 340B pricing when a patient needs their medication. Because initial purchase prices would reflect WAC rather than 340B rates, the discounted pricing would no longer appear in pharmacy software through the wholesaler's price catalog. This creates an unpredictable and opaque process for deterrnining what a patient will pay at the pharmacy counter. lt also raises serious questions about how or whether health centers can continue to apply sliding-fee discounts at the point of purchase under this model. This uncertainty surrounding sliding-fee discounts is particularly concerning. By statute and regulation, health centers are required to offer sliding-fee discounts for all health services within their HRSA-approved scope of project." Consistent with their mission, health centers routinely provide flat or income-based sliding-scale discounts on prescription drugs to make medications more affordable for low-income patients.12 Under the current point-of-sale model, a health center can adjust the cost of medications based on a patient's income and family size at the time of dispensing. The rebate model introduces significant ambiguity about whether this ability can be preserved, creating both compliance risk and a potential barrier to affordable care for the patients that health centers exist to serve. Rebates are expected to be issued within 10 days of a completed data submission, but the previously proposed rebate pilot allowed covered entities up to 45 days to submit data -- meaning the time from dispense to rebate receipt could stretch to 55 days. This financial burden is compounded for health centers with entity-owned pharmacies that maintain physical inventories, as those shelves must be stocked at WAC. Retail pharmacies typically turn inventory 10-12 times per year, or approximately every 30 days.13 Even under a best-case scenario of 15 HRSAFAQ 12 Such discounts are subject to potential legal and contractual restrictions. htsps::/blahc.hrsrezov coin ianeekompliance- manual:chapter9#footnote I 0 13https:iienliven heal th.co/blogivear-end-bu siness-health-check-key-metries-every-pharniacy-owner-shoul d-review 7 days for inventory to turn, health center pharmacies with physical inventory could face a 70-85 day window from purchase to rebate under a 45-day submission cadence. Anecdotally, health center pharmacies have indicated plans to submit entity-owned pharmacy data on a two-week cycle. Under that cadence, pharmacies with physical inventory could expect a purchase-to-rebate timeframe of 40 to 55 days. Additional delays such as claim denials could further strain health centers' finances. We appreciate HRSA's 10-day rebate payment requirement, but are concerned about the lack of enforcement details should manufacturers fail to comply. Experience with manufacturer denials in the current MFP-to-340B deduplication process has shown that even after a contested denial is resolved, manufacturers and their vendors have failed to pay within the MFP's 14-day standard from the date of correction. We are concerned that this pattern would persist in a 340B rebate pilot, leaving corrected rebates subject to undefined, open-ended payment timelines. This issue is further complicated by the possibility that the rebate amount may not match the discount originally passed to the patient, creating unpredictable financial exposure. Health centers must estimate rebate amounts in advance, risking undercharging or overcharging patients, and if a rebate is ultimately denied, the health center absorbs a net loss on the transaction. We respectfully request that, should a rebate pilot be implemented, manufacturers be required to remit payment within 10 days of both initial and corrected rebate determinations. 340B Rebate Drug Cost Financial Impact AltaPointe Health conducted a financial analysis using the 340B Rebate Drug Cost Impact Calculator, a tool developed by NACHC in partnership with FQHC 340B Compliance. The calculator incorporates health center-specific purchasing data, 340B14 and WAC pricing data from Q1 2026, and the CMS list of MDPNP-selected drugs by NDC.15 or each MDPNP Price Applicability Year, the calculator assessed the following: Increased Upfront Annual Drug Spend: The difference between WAC and 340B pricing was applied to 2025 purchase volumes by NDC, using Q1 2026 price data, to project the total annual increase in initial drug expenditures. Cash Flow Impact: Using the same WAC 340B differential and 2025 purchase data, the calculator modeled the annual increase in upfront spend at payment cycle intervals of 30, 45, 60, and 90 days. These intervals reflect the time between purchasing a drug at WAC and receiving the manufacturer's rebate down to the 340B ceiling price. Factors such as inventory models, data submission frequency, and manual referral claim processes can all affect how long Covered Entities wait between purchase and rebate receipt. Rebate-Related Opportunity Costs: These costs are estimated based on projected losses from prompt-pay discounts, purchase-volume discounts, subceiling discounts, and anticipated rebate denials, each expressed as a percentage of annual WAC spend. NDC-Level Drug Spend Analysis: The WAC 340B differential for 2025 purchases, reflected in Q1 2026 pricing, was first calculated at the individual NDC level and then aggregated by MDPNP-selected drug, manufacturer, and MDPNP Price Applicability Year. 14 https://340bpricing.hrsa.gov: 15 htlps:;7www.cms.goVfiles:zip:.selected-drul list:negotialcl-prices-also-known-rnaximum-fair-prices-tatutezip.zip 8 WAC-to-Rebate "Wait" Period: Under the proposed model, health centers must purchase and dispense medications before receiving any rebate reimbursement. This lag creates significant financial strain, forcing organizations to make difficult decisions about how to allocate limited resources while awaiting payment. Based on our organization's data, we estimate that purchasing these 10 drugs under the proposed rebate model would cost $2,640,334.52, compared to our current expenditure of $734,633.64 under the 340B ceiling price a 72% increase in upfront procurement costs. This financial burden would seriously undermine our ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As noted previously, AltaPointe Health is already operating in a challenging fiscal environment and cannot sustain purchasing drugs at WAC. To absorb these costs, we anticipate being forced to reduce: Essential Clinical Services: To offset increased drug costs, we would need to scale back services critical to patient care but that do not generate direct revenue. Workforce & Staffing: The administrative demands of this pilot would divert funding away from clinical personnel. Each "Rebate Coordinator" position we are compelled to create represents a lost opportunity to hire a Community Health Worker, Care Coordinator, or Medical Assistant. Patient Financial Assistance: Our capacity to provide medications at no cost or on a deeply discounted sliding fee scale would be significantly diminished. When operating capital is tied up awaiting manufacturer rebates, we lose the financial flexibility to support uninsured patients who depend on us to help them afford essential medications including insulin and heart medication. Wholesaler Implications An additional concern is that purchasing drugs at full WAC pricing could cause organizations to exceed their wholesaler credit limits, potentially halting medication orders until outstanding balances are paid. Some health centers have indicated that covering upfront WAC costs would require drawing from already-limited financial reserves or taking on debt outcomes that run directly counter to the core purpose of the 340B program. AltaPointe Health is particularly troubled by the prospect of relying on credit to bridge the gap while awaiting manufacturer rebates, especially at a time when other major revenue streams remain uncertain. This approach fundamentally undermines the 34013 program's mission to stretch scarce federal resources further by redirecting funds that should support patient care toward operational cash flow management. Wholesaler Credit Limits: Purchasing drugs at full WAC can push organizations beyond their wholesaler credit thresholds, suspending their ability to place new medication orders until payments are made. Many health centers are already paying invoices ahead of their due dates just to stay within existing credit limits. Because health centers typically operate on very thin financial margins, they are often viewed as higher credit risks, making it difficult to obtain credit limit increases. 9 Loss of Discounts: Health centers frequently benefit from prompt pay, purchase volume, and subceiling discounts on drug purchases. A WAC-upfront model jeopardizes our ability to meet the terms required to access these discounts, potentially eliminating a meaningful source of savings. While contractual confidentiality prevents health centers from disclosing specific prompt-pay discount rates, AltaPointe Health estimates its 2027 Annual Rebate Opportunity Cost reflecting the combined financial impact of anticipated rebate denials and lost purchase discounts - - at approximately $619,042,71. Escalating Monthly and Annual Costs: AltaPointe Health estimates that purchasing the 10 selected drugs at WAC rather than at the 340B ceiling price would increase our upfront monthly drug spend by $177,284.84. That figure is projected to grow to approximately $1.7 million in 2027 and $1.9 million in 2028. Every dollar paid upfront at WAC is effectively frozen within the manufacturer's reconciliation process. While rebates are pending, we lose the liquidity needed to respond to urgent public health needs or unexpected facility demands. Managing cash flow under this model would force our organization to draw down financial reserves, and compelling health centers to take on debt simply to maintain their drug supply would create ongoing clinical instability. V. Reconciliation and Rebate Denials Operational Challenges AltaPointe Health strongly urges HRSA to acknowledge that, without robust and non- discretionary safeguards, the rebate model functions not as a pricing mechanism but as a significant financial liability. The current framework effectively positions manufacturers as the sole arbiters of a health center's statutory savings an arrangement that introduces serious uncertainty and causes direct financial harm. Under the framework outlined in the previously proposed 340B Rebate Pilot, manufacturers were permitted to deny rebate claims based on vague or poorly defined justifications, such as "duplicate rebate" or "MFP deduplication," while providing health centers with little to no supporting data or documentation. This left Covered Entities unable to meaningfully understand the basis for a denial or mount a credible challenge to it.16 When a rebate is denied, the health center bears a net loss on the transaction having already paid full WAC price to the wholesaler and dispensed the drug to the patient at a significant discount. Based on our current volume of the 10 selected drugs, even a conservative 15% denial rate would produce a net annual loss of $209,278.91. This is not a loss our health center can reasonably be expected to absorb; it represents a direct drain on the resources we rely on to serve our safety-net population. Any erosion of our financial base compromises our ability to fulfill our core mission of providing care to all patients, regardless of their ability to pay. This harm is further compounded by the fact that 340B pricing is no longer reflected in wholesaler catalogs or pharmacy software at the point of purchase. As a result, health centers are left to estimate rebate amounts introducing unpredictable financial exposure and increasing I6 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) tutps:i.'www.federalregistengovidocuments;2025108:0 !2025-146 l 9. 340b-program-not i ce-appl ication-process, for-the-340b- rebate-model-pi lot-program 10 the risk of incorrectly pricing medications for patients. The absence of real-time 340B pricing also creates compliance challenges related to 340B actual acquisition cost (AAC) billing under fee-for-service Medicaid, which could drive up Medicaid costs and trigger state-level recoupments, adding a second layer of financial liability. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot effectively operates as an interest-free loan from safety-net providers to multi- billion-dollar pharmaceutical manufacturers. Unpredictable denials and payment delays generate serious cash flow problems for health centers already operating on narrow margins and dependent on timely reimbursement to sustain services for medically underserved communities. Should HRSA move forward with a rebate-based pricing model, the program must include clear, enforceable operational safeguards that prevent the systematic transfer of financial and administrative risk onto Covered Entities. Any rebate model must operate under uniform national standards that limit manufacturer discretion, ensure manufacturer accountability, and protect health centers from financial harm. AltaPointe Health recommends the following guardrails: Presumption of claim validity: Rebate claims should be presumed valid unless the manufacturer can demonstrate a duplication of discount under statutorily recognized grounds - specifically, concurrent use of 340B with MDRP or MDPNP. Standardized denial categories: All denial reasons must be publicly defined and standardized, with claim-level documentation provided to the Covered Entity at the time of denial. Enforceable payment timelines: Rebate payment timing requirements must apply to both initial and corrected determinations. lf HRSA adopts a 10-day payment standard, that clock must restart upon any corrected determination to prevent manufacturers from exploiting the dispute process as a delay tactic. Manufacturer accountability: A clear enforcement framework must be established, with defined consequences for manufacturers that repeatedly issue late payments or improper denials. Burden of proof on manufacturers: Manufacturers must bear the burden of demonstrating that a rebate is not owed, rather than placing that burden on health centers. Alignment with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Rebate determinations must conform to the statutory definition of an eligible patient. Stakeholder advisory panel: OPA should establish a formal advisory panel inclusive of pharmacists with subject-matter expertise in pharmacy software, billing, and data systems to ensure that Covered Entity concerns are consistently and meaningfully incorporated into program oversight and policy development. VI. Existing HEALTH CENTER Compliance Actions Health centers already operate within a rigorous regulatory framework established through both the Health Center Program and the 340B statute specifically designed to ensure medications remain affordable for the patients they serve. 11 Under Section 330 of the Public Health Service Act, health centers apply a sliding fee discount scale that adjusts patient costs based on income and household size, ensuring that no one is turned away due to an inability to pay. Health centers maintain eligibility determination systems and provide full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services are made possible by the savings generated through the 340B program. Health centers undergo regular Operational Site Visits (OSVs) to verify compliance with Health Center Program requirements and to adhere to strict 340B compliance protocols, including internal audits, staff training, and external oversight. Health centers participating in the 340B program are required to report program-related data annually through the Uniform Data System (UDS), including information on 340B- purchased drugs, associated costs and revenues, and the characteristics of the patients served. Given the robust compliance infrastructure and stringent statutory requirements already governing health centers, imposing a rebate model would inflict disproportionate harm on both these organizations and the vulnerable populations they serve. The administrative, financial, and operational demands of such a model would destabilize the very safety-net providers the 340B program was created to sustain. Health centers are not the source of program misuse they are, by any measure, national models of 340B compliance. VII. Establishing a National, Neutral Claims Clearinghouse AltaPointe Health recommends that OPA adopt a Neutral Claims Clearinghouse (NCC) model, which would achieve more accurate deduplication at a fraction of the cost and administrative burden associated with a rebate-based approach. Compared to HRSA's proposed rebate model, the NCC would: Preserve upfront 340B discounts, eliminating the cash flow challenges and borrowing risks that a WAC-upfront model would impose on Covered Entities. Substantially reduce administrative burden by minimizing the need for health centers to build and maintain complex rebate compliance systems, and reducing the staff time required to track claims, reconcile payments, and manage cash flow. . Meet manufacturer deduplication needs by delivering the necessary data within the same 45-day timeframe currently contemplated under the rebate model. Improve rebate accuracy, reducing the time and resources both manufacturers and Covered Entities must devote to identifying and correcting errors. Preserve the upfront discount structure that has defined the 340B program for more than three decades and remains essential to the program's viability for most health centers. Protect patient access to affordable MFP drugs. The cash flow pressures created by a rebate model could force some health centers to discontinue purchasing or dispensing MFP drugs entirely, directly harming patient access. Standardize Medicaid duplicate discount prevention by collecting Covered Entities' 340B claims data for Medicaid prescriptions and making it available to states through a consistent, nationally uniform process. 12 The disruption that a 340B rebate model would impose on health centers is substantial. Requiring health centers to submit data that is already accurately and readily available to manufacturers is not only redundant it adds unnecessary administrative strain on the safety- net providers the 340B program was built to support. HRSA should require manufacturers to utilize existing data resources rather than shifting that burden onto Covered Entities. Protecting the operational stability of health centers is not optional; it is central to fulfilling the program's statutory purpose. Conclusion AltaPointe Health Systems, Inc. strongly urges HRSA to exempt health centers from any 340B Rebate Model Pilot Program. A rebate-based model represents a fundamental departure from the original intent of the 340B program to enable safety-net providers to stretch scarce federal resources and deliver more comprehensive care to underserved populations. Such a model would create serious cash flow challenges, forcing health centers to make difficult decisions about staffing levels, available services, and the range of medications they can afford to maintain. Significant investments in IT infrastructure and administrative personnel would also be required to manage rebate compliance and claims tracking. Most critically, a rebate model would erect a new barrier to patient access particularly for uninsured patients who depend on the upfront 340B discount making it operationally infeasible for health centers to fulfill their legal obligation to provide sliding-fee-scale pricing and deeply discounted medications. AltaPointe Health firmly believes that a 340B rebate pilot would impose disproportionate harm on the patients served by health centers and other safety-net providers, and we urge HRSA to carefully consider that impact before proceeding. AltaPointe Health appreciates the opportunity to submit comments in response to this Request for Information regarding the 340B Rebate Model Pilot. We welcome continued engagement with HRSA on this important issue. For questions or follow-up, please contact Alicia Donoghue, Vice President & Chief of Staff, at adonoghueltapointe.org. Sincerely, J. Tuerk Schlesinger Chief Executive Officer 3
HRSA-2026-0001-2267Alcona Citizens for Health, Inc.2026-04-20T04:00Z98,114 chars
See attached letter for comment 1 April 19, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Alcona Citizens for Health, Inc. dba Alcona Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Center, CHCs, posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Alcona Health Center anticipates an average loss of $1,737,929 annually in rebate opportunity cost, and an average increase in upfront annual drug spend of $6,672,194, this will reduce our limited cash on hand resources by 13%. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth psychiatry services, expanded dental services, and population health services that all improve patient outcomes in a widely underserved population of Michigan. Alcona Health Centers mission is to provide patient-centered, quality healthcare services regardless of ability to pay. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was 2 created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Alcona Health Center in particular, this means it will impact: 154,188 eligible prescriptions for 34,981 individual patients served $2,150,244 already spent on administering and maintaining pharmacy programs for over 34,000 unduplicated patients. This cost is estimated to increase 10-15% Alcona Health Center provides essential healthcare services to rural communities that are often underserved by other healthcare providers. Many health systems are discontinuing services that are vital to improving health outcomes and reducing disparities, primarily due to high costs and limited financial returns. Our use of 340B savings is crucial in maintaining these services; some examples include: o Alcona Health Center utilizes 340B savings for our Patient in Need (PIN) Program. This program collaborates with pharmaceutical manufacturers to provide medications at no cost to qualifying patients. In 2025, we assisted patients in receiving 343 prescriptions valued at $864,264, with the health center incurring a cost of over $82,000. o Dental care is a significant unmet need in our region, especially as five practices have closed and demand continues to grow. Our center operates two comprehensive dental practices and employs hygienists at two remote sites to deliver hygiene services. Despite stretching limited federal resources, we are still unable to serve all patients in need. In 2025, our dental services program faced a deficit of $314,000, offset by 340B savings. o Our center offers a broad range of psychiatric services, managed by psychiatrists and psychiatric nurse practitioners. In 2025, 2,307 unique patients received initial diagnoses and medication management, resulting in a total of 9,147 visits. Without these services, many patients would need to travel over two hours for care, leaving over 2,000 individuals with untreated mental health conditions. The psychiatry program experienced a deficit of $433,631 in 2025, which was offset through 340B savings to ensure continued operation. o Alcona Health Center has a strong Population Health Department, encompassing 31 staff, including Care Managers who support patients with chronic conditions, Care Coordinators focused on closing preventive care gaps, Transitions of Care Coordinators assisting patients post-hospitalization with follow-up care, Recovery Services Care Managers and Peer Recovery Coaches providing support for individuals with addiction, Registered Dietitians, and Community Health Workers addressing social determinants of health and connecting patients to community resources. Although this department has limited billing capacity, it plays a vital role in meeting community needs. The program's deficit of $1.2 million is offset by 340B savings to remain operational. o Additionally, Alcona Health Center serves a six-county region through 14 medical sites. Maintaining these facilities involves supporting a wide range of staff, 3 including providers, nurses, support staff, etc. The total operational deficit across these facilities is $432,000, which is offset by 340B savings. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. To address the current complexities of manufacturer restrictions on contract pharmacies and now in-house pharmacies, without even factoring in the rebate model, our CHC, has been required to exclude patients from accessing potential 340B savings opportunities on 8,249 prescriptions. The financial impact of the lost 340B savings alone due to these manufacturer restrictions amounts to $2,150,244. Additionally, managing these restrictions and designations has resulted in over $235,000 in administrative costs and numerous hours spent weekly and monthly addressing these challenges. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Alcona Health Center provided $276,973 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Alcona Health Center anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Alcona Health Center anticipates a 20% increase to administrative and contracted costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Alcona Health Center estimates they will need to hire an additional 1.5-2.0 FTEs to manage the demands of a 340B Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Alcona Health Center estimates it will increase current FTE program costs by 60% incurring over $185,000 in additional staffing. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate the Rebate Model will create additional monitoring for over 500 claims per month. Requiring an additional 10 hours per week to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Alcona Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 34,981 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $444,891 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 Pharmacy Management System (PMS) with a complex new rebate infrastructure. Alcona Health Center In-House pharmacy software is currently a very passive, inventory-based purchasing model. Going with the up front discount model. A rebate model would require us to operationalize similar to an insurance company requiring moder, data-rich infrastructure. Legacy software systems, such as ours, do not have the working capital logic to track the cash flow float from a rebate model. This would have to be done very manually and may require an entirely new pharmacy software. While this was not added into the cost estimation it would be substantial cost and time burden as staff would have to be trained and integrate an entirely new software system for this purchasing methodology. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 46 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 48 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in multiple areas and regions including Alpena, Alcona, Cheboygan, Emmet, Iosco, Otsego, Oscoda, Montmorency, and Presque Isle, Chippewa, Mackinac and Luce counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Alcona Health Center has established contract pharmacy partnerships with numerous independent pharmacies. As we are all aware, independent pharmacies face significant challenges due to the high costs of medications and limited reimbursement from payers. Our collaborations with these contract pharmacies have enabled them to continue providing medications to our patients across 12 counties, serving over 250,000 residents. A local independent pharmacy recently shared that without our 340B contract pharmacy partnership where we purchase medications and provide a dispense feethey would be forced to close. This would leave residents in the surrounding counties without access to a pharmacy within 40 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network The Rebate Model not only affects the covered entity but also has implications for the contract pharmacies we collaborate with to supply these medications to our patients. 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 to 50 miles. The Rebate Model does not only impact the covered entity, but also the contract pharmacies we have a relationship with to provide these medications to our patients. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, 11 Internal NACHC survey data 9 including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Alcona Health Centers pharmacy sliding fee program allows patients to obtain medications at significantly reduced rates according to their income level and family size. This option is also available at certain contract pharmacies, with plans to expand to additional contract pharmacies in 2027. Please note that this arrangement would not apply to our contract pharmacies if a rebate model were implemented, because the discount would no longer be paid up front. Since patients pay at the time of medication dispensation rather than at a later date, such a rebate-based model would not be feasible in a contract pharmacy setting. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/PINyear-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,942,042 in annual drug spend for the 10 drugs included in the 2026 rebate model alone. By 2028, this number will have compounded to equal and increase in upfront annual drug spend to $8,520,779. This represents a 112% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Alcona Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as psychiatry services. While we are able to bill for these services, the cost of the psychiatry providers (in a rural area) and reduced reimbursement on some telehealth visits does not cover the cost. This would consequently reduce the number of available visits for patients in our service areas. Operating Hours: We anticipate needing to reduce our clinic hours. With the uncertainty of 340B savings we anticipate having to close on our small rural sites for a minimum of two days, or 16 hours. We do not have the current capacity to hire staff while 340B savings are declining and the uncertainty of additional declines with a future rebate model. Another small remote site, we will likely close due to lack of resources to hire a provider to fully staff this location. This site sees 700 patients annually, whos care will now be displaced and have to drive long distances for primary care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund two Population Health Staff Members, multiple Community Health Workers and or Peer Recover Coaches, who generate little to no revenue but provide imperative resources to our community to assist with social determinants of health, addiction recovery, transitions of care, etc. Additionally, if the Rebate Model is enacted on health centers we will have to cut or remove some behavioral health therapist positions, increasing wait time for mental health appointments and leave some patients/areas with no mental health services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,098 uninsured patients from rationing their insulin or heart medication. 12 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Alcona Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Alcona Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,976,840.74. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Alcona Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $328,503 monthly in 2026, $629,480.23 monthly in 2027 and $710,064.92 monthly in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited days financial reserves and days of cash on hand. This is not a sustainable solution; the interest costs alone are estimated to be $300,000 annuallyfunds that are currently dedicated to psychiatry services, addiction recovery, primary care providers, community health workers, etc. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Alcona Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. 13 a. Financial Impact of Rebate Denials and Delays Alcona Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs would result in a net annual loss of $997,764.42. A conservative denial rate of 25% was selected because at this time with the effectuation of the Medicare Transaction Facilitator our claims percentage incorrectly denied or labeled is 40%. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: 15 Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Alcona Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Alcona Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Alcona Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Katelyn Kane, Pharmacy Director, kkane@alconahc.org. Sincerely, Nancy Spencer, CEO Alcona Citizens for Health, Inc. April 19, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Alcona Citizens for Health, Inc. dba Alcona Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Center, CHCs, posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Alcona Health Center anticipates an average loss of $1,737,929 annually in rebate opportunity cost, and an average increase in upfront annual drug spend of $6,672,194, this will reduce our limited cash on hand resources by 13%. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth psychiatry services, expanded dental services, and population health services that all improve patient outcomes in a widely underserved population of Michigan. Alcona Health Centers mission is to provide patient-centered, quality healthcare services regardless of ability to pay. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Alcona Health Center in particular, this means it will impact: 154,188 eligible prescriptions for 34,981 individual patients served $2,150,244 already spent on administering and maintaining pharmacy programs for over 34,000 unduplicated patients. This cost is estimated to increase 10-15% Alcona Health Center provides essential healthcare services to rural communities that are often underserved by other healthcare providers. Many health systems are discontinuing services that are vital to improving health outcomes and reducing disparities, primarily due to high costs and limited financial returns. Our use of 340B savings is crucial in maintaining these services; some examples include: Alcona Health Center utilizes 340B savings for our Patient in Need (PIN) Program. This program collaborates with pharmaceutical manufacturers to provide medications at no cost to qualifying patients. In 2025, we assisted patients in receiving 343 prescriptions valued at $864,264, with the health center incurring a cost of over $82,000. Dental care is a significant unmet need in our region, especially as five practices have closed and demand continues to grow. Our center operates two comprehensive dental practices and employs hygienists at two remote sites to deliver hygiene services. Despite stretching limited federal resources, we are still unable to serve all patients in need. In 2025, our dental services program faced a deficit of $314,000, offset by 340B savings. Our center offers a broad range of psychiatric services, managed by psychiatrists and psychiatric nurse practitioners. In 2025, 2,307 unique patients received initial diagnoses and medication management, resulting in a total of 9,147 visits. Without these services, many patients would need to travel over two hours for care, leaving over 2,000 individuals with untreated mental health conditions. The psychiatry program experienced a deficit of $433,631 in 2025, which was offset through 340B savings to ensure continued operation. Alcona Health Center has a strong Population Health Department, encompassing 31 staff, including Care Managers who support patients with chronic conditions, Care Coordinators focused on closing preventive care gaps, Transitions of Care Coordinators assisting patients post-hospitalization with follow-up care, Recovery Services Care Managers and Peer Recovery Coaches providing support for individuals with addiction, Registered Dietitians, and Community Health Workers addressing social determinants of health and connecting patients to community resources. Although this department has limited billing capacity, it plays a vital role in meeting community needs. The program's deficit of $1.2 million is offset by 340B savings to remain operational. Additionally, Alcona Health Center serves a six-county region through 14 medical sites. Maintaining these facilities involves supporting a wide range of staff, including providers, nurses, support staff, etc. The total operational deficit across these facilities is $432,000, which is offset by 340B savings. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. To address the current complexities of manufacturer restrictions on contract pharmacies and now in-house pharmacies, without even factoring in the rebate model, our CHC, has been required to exclude patients from accessing potential 340B savings opportunities on 8,249 prescriptions. The financial impact of the lost 340B savings alone due to these manufacturer restrictions amounts to $2,150,244. Additionally, managing these restrictions and designations has resulted in over $235,000 in administrative costs and numerous hours spent weekly and monthly addressing these challenges. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Alcona Health Center provided $276,973 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Alcona Health Center anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Alcona Health Center anticipates a 20% increase to administrative and contracted costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Alcona Health Center estimates they will need to hire an additional 1.5-2.0 FTEs to manage the demands of a 340B Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Alcona Health Center estimates it will increase current FTE program costs by 60% incurring over $185,000 in additional staffing. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate the Rebate Model will create additional monitoring for over 500 claims per month. Requiring an additional 10 hours per week to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Alcona Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 34,981 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $444,891 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Alcona Health Center In-House pharmacy software is currently a very passive, inventory-based purchasing model. Going with the up front discount model. A rebate model would require us to operationalize similar to an insurance company requiring moder, data-rich infrastructure. Legacy software systems, such as ours, do not have the working capital logic to track the cash flow float from a rebate model. This would have to be done very manually and may require an entirely new pharmacy software. While this was not added into the cost estimation it would be substantial cost and time burden as staff would have to be trained and integrate an entirely new software system for this purchasing methodology. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 46 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 48 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in multiple areas and regions including Alpena, Alcona, Cheboygan, Emmet, Iosco, Otsego, Oscoda, Montmorency, and Presque Isle, Chippewa, Mackinac and Luce counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Alcona Health Center has established contract pharmacy partnerships with numerous independent pharmacies. As we are all aware, independent pharmacies face significant challenges due to the high costs of medications and limited reimbursement from payers. Our collaborations with these contract pharmacies have enabled them to continue providing medications to our patients across 12 counties, serving over 250,000 residents. A local independent pharmacy recently shared that without our 340B contract pharmacy partnershipwhere we purchase medications and provide a dispense feethey would be forced to close. This would leave residents in the surrounding counties without access to a pharmacy within 40 to 50 miles. The Rebate Model does not only impact the covered entity, but also the contract pharmacies we have a relationship with to provide these medications to our patients. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Alcona Health Centers pharmacy sliding fee program allows patients to obtain medications at significantly reduced rates according to their income level and family size. This option is also available at certain contract pharmacies, with plans to expand to additional contract pharmacies in 2027. Please note that this arrangement would not apply to our contract pharmacies if a rebate model were implemented, because the discount would no longer be paid up front. Since patients pay at the time of medication dispensation rather than at a later date, such a rebate-based model would not be feasible in a contract pharmacy setting. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,942,042 in annual drug spend for the 10 drugs included in the 2026 rebate model alone. By 2028, this number will have compounded to equal and increase in upfront annual drug spend to $8,520,779. This represents a 112% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Alcona Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as psychiatry services. While we are able to bill for these services, the cost of the psychiatry providers (in a rural area) and reduced reimbursement on some telehealth visits does not cover the cost. This would consequently reduce the number of available visits for patients in our service areas. Operating Hours: We anticipate needing to reduce our clinic hours. With the uncertainty of 340B savings we anticipate having to close on our small rural sites for a minimum of two days, or 16 hours. We do not have the current capacity to hire staff while 340B savings are declining and the uncertainty of additional declines with a future rebate model. Another small remote site, we will likely close due to lack of resources to hire a provider to fully staff this location. This site sees 700 patients annually, whos care will now be displaced and have to drive long distances for primary care. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund two Population Health Staff Members, multiple Community Health Workers and or Peer Recover Coaches, who generate little to no revenue but provide imperative resources to our community to assist with social determinants of health, addiction recovery, transitions of care, etc. Additionally, if the Rebate Model is enacted on health centers we will have to cut or remove some behavioral health therapist positions, increasing wait time for mental health appointments and leave some patients/areas with no mental health services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,098 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Alcona Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Alcona Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,976,840.74. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Alcona Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $328,503 monthly in 2026, $629,480.23 monthly in 2027 and $710,064.92 monthly in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited days financial reserves and days of cash on hand. This is not a sustainable solution; the interest costs alone are estimated to be $300,000 annuallyfunds that are currently dedicated to psychiatry services, addiction recovery, primary care providers, community health workers, etc. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Alcona Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Alcona Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs would result in a net annual loss of $997,764.42. A conservative denial rate of 25% was selected because at this time with the effectuation of the Medicare Transaction Facilitator our claims percentage incorrectly denied or labeled is 40%. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Alcona Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Alcona Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Alcona Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Katelyn Kane, Pharmacy Director, kkane@alconahc.org. Sincerely, Nancy Spencer, CEO Alcona Citizens for Health, Inc.
HRSA-2026-0001-2268The Wright Centers for Community Health and Graduate Medical Education2026-04-20T04:00Z116,484 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of The Wright Centers for Community Health (TWCCH) and Graduate Medical Education (TWCGME), collectively referred to as The Wright Center, thank you for the opportunity to submit comments in response to the Request for Information on the 340B Rebate Model Pilot Program. For the following reasons, we strongly urge HRSA to exempt Community Health Centers (CHCs) from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. The following section provides an executive-level summary and contextual overview of The Wright Center and our concerns with the 340B Rebate Model Pilot Program. The remainder of the document provides a comprehensive, data supported analysis of the statutory, operational, financial, and patient impact considerations associated with the proposed model, along with specific implementation concerns and policy implications. TWCCH is a Federally Qualified Health Center (FQHC) Look-Alike, an Essential Community Provider delivering comprehensive whole person safety-net primary health services. TWCCH serves approximately 38,300 patients, operating thirteen primary care community health centers throughout Northeastern Pennsylvania, inclusive of a school-based health center and a mobile medical and dental unit (Driving Better Health). TWCCH serves as the cornerstone ambulatory whole person primary care delivery organizational member of our Teaching Health Center (THC) Graduate Medical Education Safety-Net Consortium (GME-SNC) operated by our affiliated entity, TWCGME, our Sponsoring Institution accredited by the Accreditation Council on Graduate Medical Education. 2 Together with GME-SNC stakeholders, The Wright Center trains over 200 primary care residents and fellows in a community-based, needs-responsive, interprofessional workforce development model to advance our shared mission to improve the health and welfare of our communities through responsive, whole-person health services for all and the sustainable renewal of an inspired, competent workforce that is privileged to serve. Our GME-SNC is community owned and governed, with a fiduciary responsibility for high-integrity stewardship of federal resources, including those from CMS, the Health Resources and Services Administration (HRSA) THC, and Department of Veterans Affairs GME programs, as well as multi-payer clinical revenues. As a Ryan White HIV/AIDS Program provider since 1999, an Opioid Use Disorder (OUD) Center of Excellence, and a community-governed primary care safety-net organization, The Wright Center serves some of the most medically fragile and vulnerable populations in our region, including elderly patients, dual-eligible Medicare and Medicaid beneficiaries, individuals living with HIV, and patients impacted by substance use disorders. For these patients, reliable access to affordable medications determines whether HIV viral loads remain suppressed, substance use disorder treatment and recovery continues, chronic diseases remain controlled, and broader community transmission and preventable complications are avoided. For almost three decades, we have reinvested 340B savings with disciplined stewardship to offset cost-related barriers to care, management of life and recovery sustaining medication adherence, expand clinical services, prevent HIV comorbidities, and support the core staffing and operational infrastructure required to operate our comprehensive Ryan White program. Federal Ryan White grant dollars alone are insufficient to fund the pharmaceutical access systems, case management, and clinical supports necessary to maintain viral suppression; 340B program income fills that structural gap. Because HIV is a communicable disease, sustained viral suppression is not only an individual clinical outcome but a core public health intervention that protects the broader community. These investments therefore safeguard both individual patients who depend on uninterrupted antiretroviral therapy and the broader public by reducing community viral load and preventing transmission. Disruption of these resources risks recurrence of HIV-related complications, increased transmission risk, and associated comorbidities in populations already at disproportionate risk. Similarly, 340B reinvestments have been foundational to the growth and long-term sustainability of our community health needs responsive, OUD Center of Excellence. These savings enable expanded access to Medication-Assisted Treatment (MAT), integrated medical, dental, mental and behavioral health services, care management, and recovery supports that contribute to the nearly 50 percent national reduction in overdose deaths. Because the effectiveness of MAT depends on consistent, affordable medication availability, introducing volatility into drug financing directly threatens the continuity and clinical integrity of this work. 3 Beyond sustaining existing services, 340B program income enables The Wright Center to responsibly assume the financial risk of expanding into communities with significant unmet health needs but lower patient volumes. While our three flagship, high-volume clinical sites provide a measure of operational stability, they cannot alone absorb the full cost of maintaining clinics in smaller, rural or medically underserved communities. 340B resources create the financial flexibility necessary to establish FQHC Look-Alike services and sustain care delivery in these settings, where fixed operating costs remain constant despite lower visit volume and where access to primary care, HIV services, behavioral health, and substance use disorder treatment would otherwise be limited or absent. This stability is increasingly strained. Over the past four years, 340B margins have steadily narrowed as manufacturer restrictions have intensified and pharmacy market consolidation has accelerated, while independent community pharmacies and smaller hospitals in our region have closed and the bankruptcy of Rite Aid has exacerbated pharmacy access gaps and emerging pharmacy deserts. In response, after years of careful deliberation, The Wright Center invested in developing in-house pharmacy services to stabilize medication access for our patients, protect affordability, and reduce vulnerability to external market volatility, particularly during our transition to a self-insured platform for health benefits that we offer to more than 670 employees. The proposed rebate model now threatens the sustainability of this newly launched pharmacy infrastructure. Requiring upfront Wholesale Acquisition Cost (WAC) purchasing would significantly increase capital exposure and create cash-flow uncertainty during a period when we are still stabilizing operations. The risk is particularly acute for newly established in-house pharmacies that do not yet have mature cash reserves to absorb prolonged rebate cycles or denial volatility. Implemented at this juncture, the rebate model could destabilize medication access precisely when communities are already facing pharmacy closures and limited availability of essential medications, placing additional strain on essential community providers of vital health services that are already under-resourced for their enormous responsibilities. The 340B program is foundational to our mission and to the ability of health centers nationwide to deliver comprehensive care in medically underserved communities. Shifting financial responsibility from manufacturers to safety-net providers through a rebate model would destabilize CHC pharmacy operations across the country. In a country facing a profound primary care health services and workforce crisis, worsening the already significant discordance between the high responsibilities and workload imposed on primary care and the egregiously inadequate resources invested in it would be deeply counterproductive to any credible national healthcare solution. National assessments from NACHC indicate that CHCs are already facing significant operational and financial strain: 4 Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs, including The Wright Center, anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program poses significant challenges to the mission and purpose of CHCs and represents an unfortunately notable shift from the original intent of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For The Wright Center in particular, the 340B program is fundamentally about ensuring our patients can access the medications they need without delay. In fiscal year 2025, we served approximately 38,300 unique patients and processed approximately 7,000 eligible 340B transactions, each representing a critical touchpoint where affordable medication access supported treatment adherence, chronic disease management, and overall health stability. Any disruption to the current point-of-sale 340B purchasing model would directly impact thousands of patients who rely on us to remove financial barriers to care. In addition, The Wright Center incurred approximately $415,000 last year to PharmaForce for administration of the program across both Ryan White and FQHC operations. This includes claims processing, pharmacy coordination, and finance administration fees necessary to manage program integrity and compliance. We also paid separate dispensing fees to contract pharmacies, which totaled approximately $2.9 million last year, representing roughly 15% of our pharmacy revenue. A rebate-based model would add further administrative complexity on top of these existing layered costs, increasing operational burden and diverting limited resources away from patient care. 5 Ryan White providers and CHCs across the country operate with finite federal grant dollars that were never designed to cover full pharmaceutical infrastructure, staffing, and operational overhead. 340B program income fills that gap. For Ryan White centers in particular, 340B savings support core staffing, medication access infrastructure, case management, and adherence supports that are indispensable to maintaining viral suppression rates. A retrospective rebate structure that delays or jeopardizes these funds would destabilize this carefully balanced ecosystem and increase the risk of HIV resurgence, preventable hospitalizations, and associated comorbidities. The Wright Center relies on available 340B program income to subsidize uncompensated and undercompensated care through approved fee waivers for eligible patients. These funds are reinvested directly into maintaining access to comprehensive, whole-person care for our patients most in need. Any delay, unpredictability, or reduction in 340B revenue would create significant financial strain and require difficult operational adjustments to sustain these critical access supports. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the historically underserved patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability provided by the 340B provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. Equally concerning, a rebate model would jeopardize access to the wrap-around support services that health centers predominantly fund through reinvested 340B revenues. Such wrap-around services provided by case managers, counselors, certified recovery specialists, and community health workers provide supportive responses to health-related social needs that are potential barriers to engagement, medication compliance, reduction of high-risk behaviors, healthy lifestyle choices, and self-management of viral suppression. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years 6 achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. Our patient population includes a significant number of elderly individuals and dual-eligible Medicare and Medicaid beneficiaries who manage multiple chronic conditions on fixed incomes. For these patients, even modest fluctuations in medication affordability can result in nonadherence, rationing, or treatment discontinuation. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, including HIV, Hepatitis B, Hepatitis C, diabetes, coronary artery disease, heart failure, kidney disease, substance use disorder, and other dental, mental and behavioral health comorbidities, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses such as diabetes, hypertension, and obesity.[1] This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.[2] Similarly, the impact on patients requiring Sodium-Glucose Cotransporter 2 (SGLT2) inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.[3] By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The nation is facing a deepening mental health crisis with widespread clinical and public health implications. Nearly one in four (23.4%) Americans live with a mental illness.[4] Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients 7 treated with Austedo achieved treatment success, resulting in improved quality of life.[5] Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death.[6] Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for patients and precludes CHCs from fulfilling their mission-driven imperative and legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Currently, our contract pharmacy model primarily relies on discount card mechanisms to reduce out-of-pocket costs at the point of sale, and although we are transitioning toward structuring affordability more directly through our sliding fee scale, implementing and sustaining that model would remain operationally complex and financially challenging under a rebate framework that delays access to 340B pricing. We strongly urge HRSA to exempt CHCs from any rebate model to protect CHCs ability to ensure continued access to life-saving drugs for the most vulnerable patients. III. Administrative Complexities and Financial Challenges for CHCs To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to the 340B Eligibility and Submissions Portal (340B ESP). Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, 8 increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the number of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. For CHCs like The Wright Center that provide comprehensive Medication-Assisted Treatment (MAT) services as part of our response to the opioid epidemic, the consistent and ongoing prescribing of these medications is essential to supporting treatment continuity, reducing overdose risk, and promoting long-term recovery stability. A rebate model that requires upfront purchase at full WAC pricing would shift significant short-term financial liability onto the CHC, while simultaneously increasing the administrative workload associated with tracking and reconciling MAT prescriptions. We encourage HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide, including patients engaged in lifesaving substance use disorder treatment. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with its consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. In response to evolving manufacturer data reporting requirements, TPAs are now providing expanded compliance and reporting services, often accompanied by additional monthly fees. These added costs further compound the administrative and financial burden placed on health centers, even before implementation of a rebate-based model that would introduce yet another layer of reporting, reconciliation, and oversight responsibilities. A rebate model will require a significant increase in already-strained operational capabilities. Discount Cards: At The Wright Center, we mainly operationalize medication affordability through a structured 340B Discount Card Program that reduces out-of-pocket costs for eligible patients at the point of sale through our contract pharmacy network. In 2025 alone, 509 prescriptions were filled using the discount card across all 9 drugs, reflecting direct utilization by patients facing affordability barriers. This program is designed to assist patients who are uninsured, underinsured, or experiencing financial barriers to accessing prescribed medications. By leveraging available 340B savings and approved program income, we are able to provide timely, predictable price relief that supports medication adherence and continuity of care. A rebate-based model that delays access to 340B pricing would introduce financial and operational uncertainty, significantly complicating our ability to consistently offer upfront discounts to patients with immediate financial need. Sliding Fee Discount: The Wright Center provided $313,953 in sliding fee discounts, provided through medical services. Our ability to use 340B resources to provide uncompensated or undercompensated care as required by the sliding fee requirement for FQHCs will put even more pressure on financial stability. Staffing Impact: The Wright Center anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, we expect there may be significant additional costs from external vendors that may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, compliance, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.[7] At The Wright Center, we anticipate the rebate model would require an expansion of our current pharmacy workforce, from 1.0 FTE to approximately 2 FTEs, in addition to one part-time and one per diem team member, as well as added part-time delivery driver support, to manage our in-house pharmacy and the increased reporting, reconciliation, inventory tracking, and cash flow monitoring requirements associated with manufacturer rebates. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.[8] One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. Most CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. The Wright Center, which serves 10 approximately 38,300 unique patients annually, would face greater financial exposure under the proposed rebate model. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The Wright Center expects that 64 hours per month on average will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If CHCs are not exempted from the Rebate Model Pilot, The Wright Center respectfully requests HRSA to urge uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and TPA workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. We currently pay $415,000 annually, and additional fees could arise from further in-house software modifications. These unavoidable recurring and escalating expenses directly diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use TPAs, in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy 11 Management System (PMS) with a complex new rebate infrastructure. At The Wright Center, we are in the infancy stages of integrating PioneerRx with our EHR. Creating a functional connection between the systems could take up to a year, reflecting a significant technical and operational challenge common to many pharmacy programs. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and Price File reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend approximately three hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with three contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across four different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we are concerned that our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Northeast Pennsylvania with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.[9,10] Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 12 Simplified Records: While The Wright Center maintains electronic clinical and administrative records, including structured documentation of medication administration within its electronic health record system, this level of digitization is not universal across all CHCs. Because CHCs typically maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow, agility and intensify resource challenges. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force most CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. As a result, programs like discount cards and sliding-fee scales that lower out-of-pocket costs for patients at the point of sale would be eliminated. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. 13 A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.[11] In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.[12] A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are also worried that the need to purchase drugs at full WAC will cause cash flow issues for many CHCs and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).[13] Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current Maximum Fair Price (MFP) to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented and CHCs are not exempt, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact already under-resourced CHCs trickle down and directly impact patients. Many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below we included specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to develop a rebate model financial impact calculator for all CHCs. The estimates presented herein were generated using that calculator. The tool applies WAC and 340B [14] ceiling prices to projected 2025 purchase data by NDC [15] and volume, with impacts reflected beginning in Q1 2026, to calculate the annual increase in upfront drug spend under a rebate model. It also models cash flow exposure across 30-, 45-, 60-, and 90-day intervals to represent potential timeframes between WAC purchase and manufacturer rebate payment. In addition, the calculator estimates rebate-related opportunity costs, including potential loss of prompt-pay discounts, subceiling discounts, purchase volume impacts, and anticipated rebate denials, calculated as a percentage of annual WAC spend. Based on our organizations data, we estimate it would cost $446,244 in 2026 to purchase these 10 drugs for our current patient population under the proposed rebate model. In 2025, our organization's cost of medications purchased at the 340B ceiling price was $35,167. This represents a 1169% increase in upfront capital required for procurement. By 2028, our estimated cost of medications purchased at the WAC jumps to an unsustainable $8,166.488, when the 340B ceiling price would have been $4,856,590, figures that are based on 2025 drug pricing and should be understood as fluid given ongoing volatility in pharmaceutical pricing trends. This enormous increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot, and will simply compound when additional drugs are added. As previously discussed, our CHC is 15 navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The Wright Center would need to reduce: Clinical Workforce & Staffing: The administrative burden associated with this pilot would require The Wright Center to redirect limited resources toward compliance and rebate management functions, rather than expanding clinical and supportive services. For every Rebate Coordinator role required to manage these new obligations, the organization would have fewer resources available to invest in wraparound services such as Community Health Workers or Behavioral Health Consultants. This shift would not only strain existing operations but would also limit our ability to expand services in response to growing community needs, ultimately constraining organizational capacity to increase access to primary care, behavioral health, and whole-person support services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be severely compromised. If the cash is not in our accounts because it is being held by a manufacturer, we will not financially be in a position to provide bridge support to prevent our 2,103 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Yet another concern facing many community health centers is that purchasing drugs at full WAC will potentially exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, which is completely inconsistent with the programs intent to stretch scarce federal resources to support comprehensive services for patients and eligible individuals and to maintain access for medically underserved populations served by covered entities. As a result, some CHCs may be forced to draw on limited financial reserves or take out loans to support routine drug procurement, which is inconsistent with the intent of the 340B program to preserve scarce federal resources for essential patient care. Taking on loans or extended lines of credit to finance drug purchasing places community health centers in a state of financial limbo, diverting resources toward interest payments, origination fees, and debt service rather than care delivery. Reliance on credit to float manufacturer rebates is particularly concerning at a time when other major revenue streams remain unstable. Another expected complication is that the rebate amount will not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to 16 confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement process and functions. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, The Wright Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $116,685. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. The Wright Centers data estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $281,710. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing community health centers to utilize limited financial reserves or take out loans to continue providing life-saving medications is not a sustainable approach. However, without the necessary resources, CHCs face the impossible decision of whether to divert resources that would otherwise support critical community-based programs, including our nutrition services, lifestyle medicine initiatives, community health worker supports, and our Maternal Opiate Medical Support (MOMS) Program to meet medication needs of the patient populations we serve. 1. Financial Impact of Rebate Denials and Delays The Wright Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model creates significant financial liability for CHCs. Under the current framework, manufacturers have considerable influence over how a CHCs statutory savings are realized, which introduces uncertainty and can result in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.[16] The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss. Our CHC has limited capacity to absorb additional financial volatility, as it 17 represents a direct extraction of resources from our safety-net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission to serve all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials: Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine - not strengthen - the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model that applies to CHCs, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor (Beacon Channel Management), CHCs are given very limited transparency into the 18 process, and denials are often based on vague reasons tied to inconsistent, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSAs 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.[17] The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.[18] Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement should run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination, CHCs could be waiting up to 2 years for their issues to be resolved.[19] Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities 19 rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA should clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA should require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 20 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers should bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act (IRA) statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model should preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.[20] Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP.[21] Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither 21 manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model that includes CHCs, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.[22] Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily 22 repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.[23] CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanisms, particularly in a context where no discrete billing or nearterm Medicare interaction exists, would be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot that includes CHCs. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied 23 services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do we participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but we also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide 340B drug pricing to uninsured and underinsured patients, but a rebate model would make this nearly operationally infeasible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate 24 Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplication, i.e., a 340B rebate model, will definitively create significant administrative, financial, and operational burdens for CHCs. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS has the capacity to implement Medicare-only claims data submission through a government vendor or neutral clearinghouse. This approach would avoid the need for upfront WAC pricing or the submission of sensitive commercial data. Notably, CMS is already exploring a similar mechanism for Medicare IRA rebate deduplication via the voluntary 340B claims repository finalized in the CY 2026 Medicare Physician Fee Schedule.[25] This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, critical access hospitals, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.[26] If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The legislative history of the 340B statute underscores this intent, explicitly noting that a rebate model, though functional for AIDS Drug Assistance Programs (ADAPs), may be inappropriate for CHCs. Specifically, the Committee bill clarifies that while the goal is to secure favorable pricing, it does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.[27] The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and 25 least efficient mechanism for CHCs. While manufacturers are entitled to provide the lower of the 340B or MFP price points, mandating that CHCs pay upfront WAC pricing to access these discounts is a departure from statutory intent. Such a requirement creates a significant and inequitable cash-flow barrier that threatens the operational viability of the very entities the 340B program was designed to protect. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices - 340B or MFP - to a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By not adequately accounting for the covered entitys established right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchases the drug at the highest market price. Statutory Alignment and Medicare/MFP Integration We recommend that HRSA and CMS ensure that any new deduplication mechanisms for the MFP remain consistent with the historical structure of the 340B statute. While the 340B statute includes a parenthetical reference to rebates or discounts, that reference cannot be read in isolation.[28] Any application of rebate-based mechanics to Medicare/IRA deduplication requires clear, affirmative regulatory authority to avoid overlap between statutory frameworks. We further recommend maintaining the longstanding point-of-purchase discount structure. This preserves the statutory 340B ceiling price requirement and avoids requiring covered entities to pay Wholesale Acquisition Cost (WAC) upfront.[29] The ceiling price framework is foundational to ensuring program stability and access for safety-net providers. Rather than a mandated rebate model, we encourage consideration of alternative mechanisms such as a government-led clearinghouse or the Medicare Transaction Facilitator (MTF), which could support transparency and reconciliation without disrupting cash flow at the point of dispensing.[38] Medicaid Integrity and Billing Compliance The proposed rebate structure may inadvertently complicate established statutory responsibilities for preventing Medicaid duplicate discounts.Under the 340B statute, covered entities retain responsibility for identifying and preventing Medicaid fee-for-service duplicate discounts at the point of claim submission.[30,31] State Medicaid agencies establish billing requirements and mechanisms for 340B claim identification, including required claim-level indicators.[32] Audit authority by HRSA and manufacturers applies after claims are generated and submitted, consistent with the statutory framework governing post-submission review.[33,34] This structure 26 reflects a system in which duplicate discount prevention is implemented at the front end by covered entities, with oversight occurring after billing. A rebate-based model risks shifting key aspects of this front-end identification process into a post-adjudication framework, which could create operational uncertainty for covered entities and increase compliance complexity under existing Medicaid billing requirements. We are also concerned that delayed confirmation of 340B status under a rebate structure may introduce compliance risk under federal and state billing rules, particularly where claims must be accurately identified at the time of submission.[37] Operational Feasibility and Financial Stability To preserve the stability of the 340B program, we recommend avoiding structures that require upfront WAC acquisition followed by retrospective rebate reconciliation. Requiring WAC-based purchasing would necessitate that covered entities finance the full cost of drugs prior to receipt of any rebate, creating significant cash flow pressure for safety-net providers.[40,41] This structure would effectively require covered entities to float drug costs while awaiting manufacturer reimbursement. In addition, pharmacy billing systems and Medicaid claim submission workflows are designed around point-of-sale pricing inputs and wholesaler price files. These systems rely on standardized acquisition cost data at the time of billing, and a rebate-based structure would introduce additional administrative complexity and potential for manual intervention.[36] Under current Medicaid frameworks, Actual Acquisition Cost (AAC) methodologies rely on defined acquisition data inputs at the point of billing.[37,39] A rebate model may complicate consistent AAC determination and create variability in reimbursement calculations across states. Finally, we note that multiple state Medicaid agencies have raised concerns that a rebate-based structure could increase program costs and disrupt existing savings flows intended for safety-net providers.[40,41] Alternative Policy Approaches A 340B rebate model is not the only mechanism available to address concerns related to pricing alignment and program administration. HHS could instead consider approaches that preserve point-of-sale access to discounted pricing while allowing for appropriate post-transaction reconciliation. For example, a government-led clearinghouse or centralized coordination function, such as the Medicare Transaction Facilitator, could support data exchange and payment alignment without requiring covered entities to purchase drugs at Wholesale Acquisition Cost upfront.[38] Alternatively, a model that maintains upfront discounts with retrospective credits or adjustments would preserve the core cash flow structure of the 340B program while still allowing for manufacturer reconciliation obligations to be addressed after dispensing. These 27 approaches would achieve policy objectives related to transparency and program integrity without shifting financial risk or operational burden onto covered entities. Medicaid Managed Care Considerations The rebate structure may also create operational challenges within Medicaid managed care systems. Federal law assigns covered entities responsibility for selecting and identifying 340B drugs for Medicaid managed care billing purposes, and states are required to implement systems that exclude 340B utilization from manufacturer rebate invoicing.[31] A post-dispensing rebate determination could complicate these existing processes by delaying final classification of claims, potentially creating inconsistencies in reporting and reimbursement workflows across managed care arrangements. We therefore recommend that any policy development in this area prioritize preservation of point-of-sale 340B pricing structures, maintain covered entity responsibility for front-end claim identification, and explore alternative reconciliation mechanisms that do not require upfront WAC exposure or post hoc reclassification of drug status. VII. Adopting a Revised Medicaid Duplicate Discount Prevention Database Medicaid Plan Billing Information Database (MPBID) We recommend that HRSA explore the development of a centralized, publicly accessible Medicaid Plan Billing Information Database (MPBID). This database could be created by requiring manufacturers, state Medicaid agencies, and Medicaid managed care organizations to submit Medicaid plan billing identifiers used to distinguish Medicaid business lines, including Bank Identification Numbers (BIN), Processor Control Numbers (PCN), and Group Numbers (GRP). The MPBID could be hosted on 340B OPAIS or another appropriate federal platform. This recommendation builds on existing requirements that Medicaid plans, including Medicaid managed care organizations, utilize unique BIN/PCN/GRP identifiers to separate Medicaid claims from commercial pharmacy billing.[43] We believe that exploring the feasibility of such a resource would support the shared goal of federal program integrity and the prevention of duplicate discounts by strengthening the technical infrastructure available to covered entities, manufacturers, and federal agencies. Strengthening the Statutory Framework for Multi-Stakeholder Compliance The 340B statute provides that a covered entity shall not request payment under Medicaid for a 340B-priced drug that is subject to a Medicaid rebate.[44] While this obligation rests with covered entities, manufacturers and federal agencies also benefit from systems that support accurate, prospective identification of Medicaid claims and reduce reliance on retrospective audit processes. 28 Exploring the MPBID as a centralized resource would provide a more structured mechanism to support compliance with this statutory framework by enabling identification of Medicaid plan billing information prior to claim submission. This would help reduce administrative burden associated with retrospective correction processes and improve certainty for all stakeholders in administering both the 340B and Medicaid Drug Rebate Program (MDRP) requirements. Technical Specifications and Administrative Efficiency An MPBID, potentially hosted through 340B OPAIS, could establish a standardized, collaborative data-submission framework involving manufacturers, state Medicaid agencies, and Medicaid managed care organizations. Centralizing plan identifiers such as BIN, PCN, and GRP would improve consistency in Medicaid claim identification and reduce variability across plans and states. For manufacturers, a centralized and government-verified database would support more efficient reconciliation of claims and reduce manual verification processes associated with identifying Medicaid plan eligibility. For HRSA and CMS, it would provide a more structured and transparent data environment to support program oversight and compliance monitoring. For covered entities, access to standardized and up-to-date Medicaid billing identifiers would support accurate prospective claim identification and help ensure compliance with the statutory prohibition on requesting Medicaid payment for 340B-priced drugs.[44] Modernizing Program Integrity Infrastructure As Medicaid continues to evolve toward increasingly complex managed care arrangements, the challenge of accurately identifying Medicaid plans in real time has grown. The Medicaid Exclusion File, while an important compliance tool, is primarily retrospective in nature and may require post-submission reconciliation in certain circumstances. Exploring the MPBID represents a shift toward a more preventative and systems-based approach to program integrity. By enabling earlier identification of Medicaid plan billing information, it would reduce the likelihood of duplicate discount conflicts, minimize administrative burden associated with retrospective audits, and improve the accuracy of claims processing across stakeholders. More broadly, this approach would allow HRSA and CMS to modernize the infrastructure supporting 340B compliance in a way that strengthens program integrity while maintaining the statutory responsibilities of covered entities and preserving the operational efficiency of manufacturers and state Medicaid programs. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 29 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.[45] The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, eligibility determinations and final 340B pricing recognition would occur after purchase, once rebate claims are adjudicated and paid by manufacturers, rather than at the point of sale. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. Commercial Duplicate Discounts The requirement for CHCs to provide 340B commercial claims data to pharmaceutical manufacturers should never be included in the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.[46] The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers 30 to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable information to pharmaceutical manufacturers[47]: studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.[48] This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without a validated public benefit. That data may be used inappropriately by drugmakers manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. One of the goals of privately negotiating those contracts may be to enable drugmakers to obtain better formulary placement for their products and exclude cheaper drug alternatives.[49] They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.[50] Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.[51] Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.[52] We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.[53] The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered 31 entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.[54] Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.[55] We respectfully note that conditioning access to 340B pricing on the transfer of commercial claims data may extend beyond what is expressly outlined in the statute. We respectfully suggest that further clarification may be warranted to ensure this requirement is fully consistent with applicable law and the federal Administrative Procedure Act.[56] There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.[57] The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully request that the 340B Rebate Pilot program be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it challenges the language of the statute if the discretion concerning CHC patient eligibility is transferred to the manufacturer. By requiring a CHC to purchase a drug 32 at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.[58] This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. We suggest that the proposed 340B Rebate Pilot may unintentionally shift the established statutory roles regarding patient eligibility. Under the current framework, the responsibility for preventing diversion rests with the covered entity, subject to retrospective audit. The rebate model, however, introduces a prospective verification process. This effectively requires manufacturers to evaluate patient data before a 340B benefit is realized, a procedural change that appears to diverge from the self-policing and audit-based structure outlined in the 340B statute. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.[59] The legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.[60] IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a 33 rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for covered entities by preserving the upfront 340B discount; Substantially reduce administrative burden on covered entities by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs; Provide manufacturers with the necessary deduplication data within the same 45-day timeframe; Improve rebate accuracy, reducing the time and effort manufacturers and covered entities must spend correcting errors; Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program; and Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 34 B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be complete and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 35 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by covered entities as favoring manufacturers interests. As a result, many covered entities do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: covered entities should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it.[61] Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data should only be used to determine whether a claim is eligible for other discounts or rebates. Data should not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network 36 participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs may then discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion The Wright Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. The 340B Program was designed to allow safety-net providers to stretch scarce federal resources in order to support access to care for medically underserved populations. For Ryan White patients, elderly dual-eligible beneficiaries, individuals living with HIV, and patients battling opioid and substance use disorders, the program is not a margin enhancer, it is a stabilizing force that sustains adherence, viral suppression, recovery, and community health. A rebate-based model that converts immediate statutory pricing into delayed and uncertain reimbursement effectively shifts financial risk from manufacturers to safety-net providers and, ultimately, to medically vulnerable patients. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the 37 up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. The Wright Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The Wright Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Laura Spadaro at spadarol@thewrightcenter.org. Sincerely, Laura Spadaro Vice President of Primary Care & Public Health Policy The Wright Center for Community Health The Wright Center for Graduate Medical Education [1] Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. [2] Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. [3] Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 [4] Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases [5] Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. [6] 2025 UDA Data, HRSA (hrsa.gov) [7] Internal NACHC assessment (99 responses). [8] Ibid. [9] Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 38 [10] https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff [11] HRSA FAQ [12] Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 [13]https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review [14] https://340bpricing.hrsa.gov/ [15] https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip [16] Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-th e-340b-rebate-model-pilot-program [17] Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf [18] 340B House Report Legislative History. H.R. REP. 102-384(II). [19] Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf [20] Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section-340b.pdf [21] https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-gloss ary [22] https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 [23] Internal NACHC survey data [24] 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-a nd-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). [25] Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). [26] CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf [27] H.R. REP. 102-384(II) [28] 42 U.S.C. 256b(a)(1) [29] Id. [30] 42 U.S.C. 256b(a)(1) [31] Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. [32] 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) [33] 42 U.S.C. 256b(a)(5)(C). [34] 42 U.S.C. 256b(a)(5)(C). [35] See 42 U.S.C 256b(a)(5)(A). [36] https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static-assets/documents/provider/2025/12_A_Claim_Submission_Req uirements_340B_Rebate_Model_Pilot_Drugs.pdf 39 [37] C.F.R. 447.518(a). [38] Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. [39] 42 C.F.R. 447.502 [40] [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA202500010095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. [41] Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA202500010980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. [42] See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). [43] 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-C/part-438/subpart-A/section-438.3 [44] 42 U.S.C. 256b(a)(5)(A)(emphasis added). [45] 32 C.F.R. 199.21(q)(2)(iii)(E) [46] Genesis Health Care, Inc. v. Becerra, No. 4:19cv01531RBH, slip op. (D.S.C. Nov. 3, 2023). [47] Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). [48] Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) [49] Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) [50] Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). [51] See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). [52] 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract-pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. [53] Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14cv01685 (RC) (D.D.C. Oct. 9, 2014). [54] Albany Med Health System v. Health Resources & Services Administration, No. 23cv03252 (APM), slip op. (D.D.C. Mar. 3, 2026). [55] Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). [56] 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). [57] 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) [58] 42 U.S.C. 256b(a)(5)(B) [59] Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] [60] H.R. REP. 102-384, 16 [61] https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents)
HRSA-2026-0001-2269CommonspiritHealth - St.Mary Medical Center2026-04-20T04:00Z6,696 chars
See attached file(s) CommonSpint St. Mary Medical Center 1020 Linden Avenue Long Beach, CA 90813-3393 P 562.494,9000 F 562.436.6378 commonspirit.org April 20, 2026 The Honorable Thomas .1. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 3408 Rebate Mode! Pilot Prograrn (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Mary Medical Center, a member of Cornmonspirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Mary Medical Center Center serves the greaterLong Beach area including the cities of Compton, Long Beach, Paramount and Wilmington in Los Angeles County. The population of the service area is approximately 680, 124, is very culturally diverse, and serves a population that is very vulnerable. Among the residents in our service area, 15.7% are at or below 100% of the federal poverty level and 36.2% are at 200% of the federal poverty level or below. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services!' We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Mary Medical Center relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patents. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. It is the policy of CommonSpirit Health to provide, without discrimination, emergency medical care and medically necessary care to an patients, without regard to a patient's financial ability to pay. The hospital's financial assistance program consists of unreimbursed costs of Medicaid, comrnunity health improvement services, community grants and other community benefits. which directly benefit vulnerable populations. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 3408 covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Carolyn Caldwell, FACHE Hospital President and CEO St. Mary Medical Center, Long Beach As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2270Arcare2026-04-20T04:00Z38,422 chars
See attached file(s) April 20, 2026 Re: 340B Rebate Model Pilot Program Request for Information Response To Whom It May Concern, On behalf of Arcare, we appreciate the opportunity to provide input on the proposed 340B Rebate Model Pilot Program. As a multi-state covered entity serving rural and underserved communities, we have extensive operational experience administering the 340B program at our clinics. This includes both in-house and contract pharmacy setups. Our experience shapes the concerns outlined in this submission. We want to be clear from the outset: our response is rooted in protecting the patients we serve every day. The 340B program is a critical lifeline that enables us to expand access to care, reduce medication costs, and reinvest in services that directly impact patient outcomes. Any changes to this program must be evaluated not only for operational feasibility, but for their real-world impact on patient access and community health. While we recognize that the 340B program may benefit from reform, we have significant concerns about the proposed rebate model. It introduces systemic risk that could destabilize the very safety-net infrastructure it is meant to support. Specifically, the rebate model: Shifts financial and operational risk to covered entities Introduces substantial cash flow constraints that are not sustainable for many providers Concentrates disproportionate control with manufacturers Increases administrative burden in an already complex environment Threatens patient access to affordable medications and services We urge HRSA to take these considerations seriously. The implications of this model extend far beyond administrative change. They have the potential to reshape the financial stability of safety-net providers and the accessibility of care for millions of patients. The 340B program was designed with a clear purpose: to enable covered entities to stretch scarce federal resources to serve more patients and provide more comprehensive care. Any proposed reform should strengthen that purpose. We believe there is a path forward that addresses concerns about program integrity and transparency while preserving the program's stability, flexibility, and patient-centered impact. However, the rebate model, as currently proposed, does not achieve that balance. We appreciate the opportunity to share our perspective and stand ready to engage further in collaborative, thoughtful dialogue to ensure that any future changes to the 340B program support both innovation and accesswithout creating undue burden or risk to the providers and patients who rely on it. Respectfully, Arcare Net Neutral No Impact: Implications for Access, Stability, and Quality While a rebate model may be designed as net neutral from a federal budget perspective, that designation does not equate to a neutral impact on covered entities, patient access, or the broader healthcare delivery system. The shift from upfront 340B pricing to a retrospective rebate fundamentally changes cash flow, financial risk, and operational burden, disproportionately affecting safety-net providers. Under the current model, 340B savings are realized at the point of purchase. This allows covered entities to immediately use those resources to support care, expand services, and cover uncompensated care. A rebate model delays that benefit. Providers must pay the full acquisition costoften at WACand then wait for rebate reconciliation. That process can be delayed, disputed, or incomplete. This creates cash flow constraints, especially for rural hospitals, health centers, and smaller systems operating on thin or negative margins. These constraints are not theoretical. For many safety-net providers, drug purchasing is a major and frequent expense. When entities must carry higher drug costs on their balance sheet, it introduces liquidity riskeven if only temporarily. Over time, this pressure can force difficult operational decisions, including: Reducing service lines, particularly high-cost or specialty services Delaying or foregoing investments in staffing, infrastructure, and care coordination Consolidating with larger systems to gain access to capital and purchasing leverage In the most severe cases, closing facilities altogether Rural hospitals and independent health systems are especially vulnerable. Often, these providers lack the financial reserves or access to capital needed to handle sustained increases in working capital requirements. A model that shifts savings from upfront to retrospective disproportionately disadvantages these groups. It speeds consolidation and reduces local care availability. The effects on patients and the healthcare system are significant. As access points close or services are cut: Patients are more likely to defer care or travel longer distances for treatment. Preventable conditions may go unmanaged, leading to increased acuity over time. Emergency departments become the default site of care, driving higher-cost utilization. Care fragmentation increases, negatively impacting quality and outcomes. A policy that is net neutral in federal accounting can still create negative side effects across the delivery system. Increased emergency department use, higher acuity, and less access to routine care all raise total care costs. This can offset any apparent program-level neutrality. Administrative complexity and uncertain rebate realization add more operational strain. Covered entities must invest in new systems, workflows, and staff for rebate tracking and reconciliation. At the same time, they carry more financial risk. Larger systems may absorb these changes. Smaller and rural providers may not. In summary, net neutrality at the federal level masks a major shift of financial burden and risk onto providers least able to bear it. The rebate model: Introduces cash flow constraints that strain safety-net providers Accelerates consolidation and threatens the viability of rural and independent facilities Reduces access to care and shifts utilization toward higher-cost settings like the emergency department Risks worsening quality outcomes through fragmentation and delayed care These impacts are real and measurable for patients and communities, even when they are not reflected in federal budget scoring. They should be carefully considered. Real-World Evidence: Cash Flow Fragility and Operational Risk Recent events have shown how financially fragile much of the U.S. healthcare delivery system becomes when cash flow is disrupted. The Change Healthcare cyberattack is a clear example. When claims processing and payments were disrupted during this event, providers across the country, including large health systems and small rural hospitals, faced immediate and severe financial strain. The American Hospital Association reported that the Change Healthcare cyberattack caused significant financial disruption across hospitals and health systems, including widespread interruptions to claims processing and cash flow that impacted providers ability to meet payroll and maintain operations. In response, both public and private entities set up temporary loan and advance programs to keep providers operational. This cash flow disruption revealed the healthcare system's limited liquidity, especially for safety-net providers. A rebate-based 340B model introduces a similarbut permanentstructural cash flow challenge. A rebate model would institutionalize that delay, introducing ongoing financial uncertainty into an already constrained system. Operational Reality: Rebate Complexity and Timing Risk Beyond cash flow, rebate realization introduces more uncertainty. The Medicaid Drug Rebate Program (MDRP) is a similar system. Under MDRP, rebates are not immediate. They follow specific timelines, disputes, and reconciliation between states and manufacturers. In practice, this has resulted in: Delayed rebate payments Ongoing disputes over eligibility and claim validity Administrative burden associated with tracking and reconciling claims Variability in rebate realization across entities and states More recently, implementation challenges tied to Medicare drug pricing reformssuch as Maximum Fair Price (MFP) provisionshave highlighted the complexity of retrospective pricing and rebate systems. These processes require significant infrastructure, coordination, and oversight. Even so, delays, disputes, or execution gaps may occur. Translating this model into 340B would mean that covered entities carry higher upfront costs. They also depend on a multi-step, externally controlled process. Any breakdownwhether from data mismatches, claim submission gaps, manufacturer disputes, or timing delays directly affects the provider's financial position. Internal Controls and Risk of Market Imbalance A critical lesson from the evolution of Pharmacy Benefit Managers is the consequence of insufficient internal controls and oversight of complex reimbursement systems. Over time, PBMs have grown into powerful intermediaries with significant influence over pricing, reimbursement, and accessoften without transparency or accountability. The result has been well-documented concerns around spread pricing, rebate retention, and misaligned incentives. The proposed rebate model risks introducing a similar structural imbalance. By shifting 340B savings from a transparent, point-of-sale discount to a retrospective rebate controlled by manufacturers, the model places significant authority in the hands of one side of the transaction. Manufacturers would effectively control: The validation of rebate eligibility The timing of the rebate payment The resolution of disputes The operational requirements for participation Without robust, enforceable internal controls and standardized processes, there is potential for inconsistent rebate realization, reduced transparency, and erosion of the intended benefit of the 340B program. The U.S. healthcare system already demonstrates the realities of inadequate oversight in a complex, for-profit environment and risks replicating the same dynamics that allowed intermediary entities like PBMs to capture value at the expense of providers and patients. Preserving the Intent and Stability of the 340B Program It is deeply concerning that a proposal under consideration by Health Resources and Services Administrationan agency tasked with improving access to care for underserved populations could unintentionally introduce structural changes that further destabilize the very providers it is meant to support. At a time when the rural health crisis continues to intensify, policies that increase financial strain, reduce flexibility, or introduce uncertainty into provider operations must be evaluated with extreme caution. For many covered entities, the 340B program is not a supplemental benefitit is a foundational component of financial sustainability. In practice, it is often the only source of flexible funding available to address the unique and evolving needs of local communities. These needs vary significantly across geographies and patient populations and cannot be effectively addressed through rigid, one-size-fits-all funding mechanisms. The flexibility inherent in the current 340B structure is not incidental, it is essential. It allows covered entities to respond to real-time challenges, including expanding service lines, subsidizing care for uninsured or underinsured patients, supporting care coordination, and maintaining access points in underserved areas. While it is true that flexibility introduces the potential for misuse by bad actors, that risk must be addressed through targeted oversight and accountabilitynot by fundamentally restructuring the program in a way that removes its utility for those operating in good faith. It is also important to acknowledge a difficult but necessary reality: it is not ideal that safety-net providers rely so heavily on the 340B program to remain viable. However, this reliance is not accidental. The 340B statute was designed to enable covered entities to stretch scarce federal resources and reinvest savings into patient care. For many providers, particularly those in rural and underserved areas, this program has become a lifeline precisely because broader reimbursement systems do not fully account for the cost of delivering care in these settings. A rebate-based model risks undermining that lifeline by introducing delay, uncertainty, and external dependency into how savings are realized. More importantly, it risks creating an imbalance of power by shifting control over the timing, validation, and delivery of those savings to manufacturers. Any solution that concentrates that level of control with a single stakeholder should be approached with caution, particularly given the healthcare systems experience with other intermediaries. Reform, where necessary, should be deliberate, balanced, and informed by the full range of stakeholders impacted by the program. It should preserve the core function of 340B: enabling covered entities to meet the needs of their communities in a flexible and responsive manner. Incremental improvements in transparency, accountability, and program integrity are appropriate and necessary. However, dismantling or fundamentally altering the mechanism by which savings are realizedwithout a proven alternative that maintains stability and access poses significant risk. In summary: The 340B program is a critical lifeline for many covered entities, particularly in rural and underserved areas. Its flexibility is essential to meeting diverse and localized patient needs. While oversight is necessary, structural changes should not undermine the programs core function. Any reform must avoid creating power imbalances among stakeholders. Solutions should be developed collaboratively and thoughtfully, with a focus on preserving access to care. The goal should not be to dismantle what is working, but to strengthen itensuring the program continues to serve its intended purpose without introducing new risks to the healthcare system's stability. Impact on Patient Discount Programs and Pricing Integrity Covered entities across the country rely on the 340B program to directly support patient affordability through robust discount programs. Many of these programsincluding oursare structured explicitly around the 340B acquisition cost, allowing us to pass those savings directly to patients through reduced pricing. A shift to a rebate-based model raises fundamental and unresolved questions about how these patient discount programs would function: How are covered entities expected to structure patient discounts when the 340B price is no longer realized at the point of purchase? Are covered entities expected to extend discounted pricing to patients based on a price they have not yet receivedand may not ultimately receive if a rebate is denied? What safeguards exist to ensure that patient pricing remains predictable and sustainable if it becomes dependent on retrospective rebate realization? How are covered entities supposed to operationalize patient discounts when the 340B ceiling price itself is neither widely accessible nor transparent within organizations? Under the current model, the 340B price serves as a reliable and immediate benchmark that enables covered entities to design and administer patient discount programs with confidence. That price is intentionally controlled and limited in visibilityaccessible only to designated individuals such as the Authorizing Official or Primary Contactfor important program integrity reasons. This controlled access underscores that the 340B price is not designed to function as a broadly distributed or externally referenced pricing mechanism. A rebate model disrupts this structure entirely. Without upfront access to the 340B price: Covered entities lose the ability to anchor patient discounts to a known and realized cost. Pricing decisions must be made based on estimates, assumptions, or delayed reconciliation. Financial risk shifts to the covered entity if rebates are delayed, reduced, or denied Patient pricing consistency may be compromised, undermining trust and access. This creates an untenable position for covered entities. Either: 1. Discounts are reduced or eliminated to avoid financial risk, directly impacting patient affordability, or 2. Discounts are extended based on uncertain future rebates, placing financial strain on the provider. Neither outcome aligns with the intent of the 340B program. Importantly, patient discount programs are one of the most direct and tangible ways 340B savings are translated into community benefit. Any model that weakens covered entities' ability to confidently and sustainably offer these discounts risks eroding access to medications for the very populations the program is intended to serve. Further, while manufacturers often express concern that covered entities do not sufficiently pass along 340B savings to patients, a rebate-based model directly undermines the very mechanisms that enable those savings to be shared. Patient discount programs that exist today are made possible because covered entities have immediate, predictable access to reduced drug pricing. Removing that certainty makes these programs significantly more difficultif not impossibleto sustain. This creates a fundamental contradiction: Concerns are raised about insufficient patient benefit. While simultaneously introducing a model that limits the ability to deliver that benefit What patient discount programs exist today will become increasingly difficult to maintain under a rebate structure. Over time, this will likely result in fewer discounts, less predictable pricing for patients, and reduced access to affordable medications. At its core, this model shifts financial risk in a way that is misaligned with the program's intent. Covered entities do not expect manufacturers to sell drugs at a loss, and manufacturers should not expect covered entities to do so either. Requiring providers to front costs and extend patient discounts without guaranteed rebate realization places them in an unsustainable position. In summary: Patient discount programs are often directly tied to the 340B acquisition price. A rebate model removes the certainty and immediacy of that pricing foundation. Covered entities would be forced to choose between financial risk and reduced patient support. The lack of accessible, real-time 340B pricing undermines the operational viability of discount programs. The rebate model contradicts stated concerns about patient benefit by making it harder to deliver Any proposed change to the 340B structure must account for these realities. Without a clear and reliable mechanism to preserve patient-level affordability, a rebate model risks diminishing one of the programs most critical benefits. Pricing Confidentiality vs. Operational Transparency A fundamental contradiction within the proposed rebate model is the simultaneous expectation of pricing confidentiality and operational transparency. Drug manufacturers have consistently emphasized the importance of maintaining the confidentiality of 340B ceiling pricing. This confidentiality is not incidentalit is a core component of how the program is structured and protected. Today, 340B pricing is tightly controlled and intentionally limited in access. Within covered entities, visibility is typically restricted to designated individuals such as the Authorizing Official or Primary Contact. This controlled access helps preserve the integrity of the program, prevents inappropriate price dissemination, and aligns with manufacturer expectations around sensitive pricing data. A rebate-based model fundamentally disrupts this framework. To operationalize rebates at scale, covered entities would need access to 340B-equivalent pricing in a format that is: Reportable Auditable Shareable across internal systems and external partners This would require pricing data to be embedded in claims workflows, reconciliation reports, audit documentation, and financial tracking systems. By definition, this transforms 340B pricing from a tightly controlled data point into one that is distributed across: Billing and revenue cycle teams Pharmacy operations Third-party administrators Contract pharmacies Auditors and compliance entities Potentially state and federal oversight bodies In other words, a rebate model would necessitate that 340B pricing be shared far more broadly than it is today. This creates a direct conflict: Manufacturers seek to maintain the strict confidentiality of pricing. A rebate model requires widespread visibility of that same pricing to function effectively. These two objectives cannot be fully reconciled. Without access to usable, reportable pricing data, covered entities cannot accurately: Validate rebate amounts Reconcile payments Support audit requirements Administer patient pricing programs. However, providing that level of access inherently expands the distribution of sensitive pricing information beyond its current, controlled environment. This raises critical concerns: How will pricing confidentiality be preserved once data is embedded across multiple operational systems? What safeguards will prevent broader dissemination of 340B pricing once it becomes part of routine reporting and reconciliation? How will manufacturers reconcile their desire for confidentiality with the operational necessity of transparency? The current 340B model successfully balances these priorities by limiting access to pricing while enabling covered entities to realize savings at the point of purchase. A rebate model disrupts that balance, forcing a tradeoff between confidentiality and functionality. In summary: 340B pricing confidentiality is a deliberate and essential feature of the current program A rebate model requires pricing data to be widely accessible in reportable formats. This creates an inherent conflict between manufacturer expectations and operational reality. Expanding access to pricing data introduces risk to program integrity and confidentiality. Any proposed rebate structure must directly address this contradiction. Without a clear, enforceable framework to preserve pricing confidentiality while enabling operational execution, the model introduces significant, unresolved risk. Rebate vs. Replenishment: Structural Considerations for the Contract Pharmacy Model The current 340B contract pharmacy model relies heavily on a replenishment-based framework that, while functional, introduces layers of operational complexity, inefficiency, and fragmentation. This model requires coordination across covered entities, contract pharmacies, wholesalers, and third-party administrators, often resulting in duplicative processes, inventory management challenges, and administrative burden. It is important to acknowledge that a rebate-based approach can address some of the known limitations of the replenishment modelmost notably, manufacturer concerns about duplicate discounts (multiple rebates or discounts applied to a single unit of drug). A properly designed rebate system tied to validated claims could create a clearer, more auditable linkage between dispensing events and manufacturer liability. However, these two modelsreplenishment and rebateare fundamentally incompatible if layered on top of one another. Attempting to operate both simultaneously introduces unnecessary redundancy, increases administrative burden, and amplifies the very inefficiencies the rebate model seeks to resolve. The currently contemplated structure, which effectively overlays a rebate process on top of an existing replenishment framework, risks creating a multi- step, circular flow of funds and product that is operationally burdensome and difficult to manage. This structure adds multiple financial transactions, timing delays, and reconciliation points without eliminating the underlying inventory and replenishment requirements. The result is a system that is more complex, less predictable, and more resource-intensive for all parties involved. If a rebate model is to be considered within the contract pharmacy environment, it should be implemented as a replacementnot an additionto the replenishment model. This approach would fundamentally change the cash flow dynamics of the program but offers several potential advantages: Improved transparency: Savings are tied directly to claims, reducing reliance on indirect inventory tracking mechanisms Reduced inventory complexity: Eliminates the need for replenishment logistics and the movement of product tied to 340B eligibility Decreased administrative burden: Reduces reliance on accumulators, EDI infrastructure, and complex inventory matching processes More predictable product flow: Removes the need for covered entities to manage inventory across contract pharmacy networks Additionally, eliminating replenishment could alleviate certain downstream burdens created by supply chain requirements, including those associated with the Drug Supply Chain Security Act, which has introduced increased tracking, verification, and inventory management complexity across distributed pharmacy networks. It would also reduce or eliminate the need for: Wholesaler-level 340B account structures specific to contract pharmacy replenishment Third-party administrator accumulator systems designed to match dispenses to inventory. Complex financial reconciliation between contract pharmacies and covered entities. However, it is critical to recognize that while a replacement rebate model may streamline certain operational aspects, it introduces significant trade-offsmost notably in cash flow timing, rebate reliability, and reliance on external parties to realize savings. These risks must be fully addressed before any transition away from replenishment is considered. In summary: The current replenishment model is operationally complex and inefficient in the contract pharmacy setting. A rebate model could address specific issues, including duplicate discount concerns. Rebate and replenishment models should not coexist, as doing so compounds inefficiencies. Any move toward a rebate approach should fully replace, not layer onto, the replenishment structure. A replacement model could streamline operations, but it must be carefully designed to mitigate cash flow and execution risk. A thoughtful, end-to-end redesignrather than a partial overlaywill be essential to achieving the intended benefits without introducing new systemic challenges. Key Operational Questions: Rebate Overlay in a Replenishment Environment The introduction of a rebate model into the existing contract pharmacy replenishment framework raises several unresolved operational and financial questions: When a contract pharmacy is replenished with 340B inventory, dispenses that drug, and a rebate is later denied or deemed ineligible, how is that discrepancy corrected? Is the covered entity expected to repay the rebate amount if a claim is later deemed ineligible? If so, on what timeline and under what dispute resolution process? How are funds reconciled between the covered entity and the contract pharmacy in this scenario? What mechanisms exist to compel or facilitate repayment or adjustment from the contract pharmacy after funds have already been remitted? How will contract pharmacies respond to retroactive financial true-ups, particularly when they are not the party responsible for rebate submission or adjudication? Who ultimately bears the financial risk when there is a mismatch between replenishment eligibility and rebate approvalthe covered entity, the contract pharmacy, or another party? How are these discrepancies tracked, audited, and resolved across thousands of transactions and multiple stakeholders? What safeguards exist to prevent continuous cycles of repayment, dispute, and reconciliation that increase administrative burden and financial uncertainty? These are not theoretical concernsthey are inherent conflicts created by attempting to layer a rebate model on top of a replenishment-based system. The coexistence of both models introduces circular financial flows, duplicative validation processes, and misaligned incentives between covered entities, contract pharmacies, and manufacturers. Each additional step creates another point of potential failure, delay, or dispute. To withstand the implementation of rebates and meaningfully reduce industry waste, the replenishment model must be removed from the contract pharmacy environment. Maintaining both structures simultaneously does not resolve inefficienciesit compounds them. Transitioning to a single, claims-based rebate framework in the contract pharmacy setting would: Eliminate conflicting inventory and financial reconciliation processes. Reduce administrative burden across covered entities, contract pharmacies, and third parties. Allow a greater share of program value to remain with the covered entity, where it can be reinvested into patient care. A clear, singular modelrather than overlapping systemsis necessary to ensure operational integrity, financial predictability, and alignment across stakeholders. At a fundamental level, the healthcare system does not need additional administrative burdenit needs less. Covered entities are already operating in highly complex environments with limited resources, balancing clinical care, compliance, and financial sustainability. Introducing a rebate overlay on top of an already intricate replenishment framework adds layers of process, reconciliation, and risk without delivering corresponding operational value. Alignment of Incentives Across the Healthcare System A sustainable and effective healthcare system depends on the appropriate alignment of incentives across all stakeholders. Manufacturers play a critical role in developing and bringing life-saving therapies to market, and it is important that they are appropriately incentivized to continue that innovation. At the same time, covered entities are responsible for the delivery of careensuring that patients, particularly those in underserved and vulnerable populations, are able to access and receive those therapies. Just as innovation must be supported on the front end, access must be supported on the delivery side. A healthy healthcare system requires both. Policies that shift financial risk or introduce operational barriers on either side of this equation create imbalance and ultimately undermine patient care. If manufacturers are incentivized to produce therapies, covered entities must be equally empowered and supported to deliver them efficiently, affordably, and consistently to the patients who need them most. The 340B Rebate Model Undermines Health System Stability The proposed shift to a manufacturer-driven 340B rebate model presents significant risks to the financial stability of health centers and the broader healthcare ecosystem. While thoughtful 340B reform is needed, this model concentrates power with manufacturers, introduces dangerous cash-flow constraints, and destabilizes the safety-net infrastructure that millions of patients rely on. If the goal is to protect and strengthen a healthcare system that depends on balanced market dynamics, the rebate model moves us in the opposite direction. A sustainable healthcare system requires: Balance among stakeholders Stable cash flow for providers A structure that supports the safety net By giving manufacturers disproportionate control over reimbursement timing and financial recovery, the rebate model disrupts this balance. Instead of reinforcing a functional, market- based healthcare system, it accelerates consolidation, destabilizes community-based providers, and weakens the infrastructure necessary to deliver care effectively. Key Risks of the Rebate Model Concentration of Power with Manufacturers Under a rebate model, manufacturers gain direct control over whetherand whencovered entities are made whole. This creates a dynamic where manufacturers can influence the financial stability of safety-net providers. The healthcare system has already seen the consequences of insufficient oversight and imbalance with entities like Pharmacy Benefit Managers. Replicating or expanding that imbalance introduces significant long-term risk. Unsustainable Cash-Flow Pressure on Providers Covered entities would be required to purchase drugs at wholesale acquisition cost (WAC), dispense them, and then wait for rebate reconciliation to recover costs. Even if this model is theoretically net neutral over time, the cash flow reality is not sustainable for many providers. Health centersparticularly those in rural and underserved areasoperate on thin margins and limited liquidity. This model would push many to the financial edge, forcing reductions in services or, in some cases, closure. A Precedent That Will Expand Beyond Initial Scope While the model may begin with a limited number of drugs, there are no meaningful constraints preventing expansion. Once manufacturers gain control over the timing and flow of funds, the likelihood of reversal is low. The healthcare system has seen similar trajectories beforewhere incremental changes led to lasting structural imbalances that are difficult to unwind. Replenishment Inefficiencies Are RealBut Not a Justification for Rebates The current replenishment model, particularly in the contract pharmacy setting, does have inefficiencies. Inventory management challenges, administrative burden, and operational complexity are valid concerns that warrant attention. However, the rebate model does not resolve these inefficienciesit shifts risk and financial burden to covered entities. Manufacturers already operate within rebate-like frameworks through existing distribution and pricing mechanisms. Introducing a new 340B rebate structure does not eliminate complexity; it redistributes it in a way that disadvantages providers. Risk of Long-Term System Damage If implemented and expanded, the rebate model risks creating the same type of structural imbalance that policymakers are actively working to address in other areas of healthcare. Over time, this could lead to: Increased consolidation of providers Reduced access to care in rural and underserved communities Greater reliance on higher-cost care settings, such as emergency departments Erosion of the safety-net infrastructure These are not short-term disruptionsthey are long-term system consequences. Broader System Risk The 340B program is a critical mechanism that enables covered entities to expand access to care, particularly for underserved populations. Its current structure provides certainty, immediacy, and transparency in how savings are realized and deployed. A rebate model replaces that certainty with delay, complexity, and dependency on external actors. Embedding that uncertainty into the program's core structure introduces systemic risk. In summary: The healthcare system has already demonstrated limited liquidity under short-term disruption, as shown in the Change Healthcare disruption event. A rebate model would create a permanent, structural delay in realizing savings. Existing rebate frameworks (MDRP, MFP) show consistent challenges with timing, disputes, and administrative burden. Without strong internal controls, shifting power to manufacturers risks replicating the imbalance seen with PBMs These factors collectively suggest that a rebate-based approach is not simply an administrative change, but a fundamental shift that could weaken provider stability, reduce access to care, and undermine the intent of the 340B program. Reform Is NecessaryBut It Must Be Balanced There is broad agreement that aspects of the 340B program can be improved. The replenishment model can be modernized, and oversight can be strengthened. However, any reform must be grounded in balance and sustainability. Specifically, it must: Protect the financial stability of covered entities. Avoid shifting cash-flow risk to providers. Maintain balance among manufacturers, payers, and safety-net systems. Preserve and enhance patient access to medications and services. The proposed rebate model does not meet these standards. Conclusion For the 340B programand the patients it servesto remain viable, reforms must strengthen the safety net, not destabilize it. A sustainable path forward requires preserving balance, protecting provider cash flow, and ensuring operational feasibility. Any policy that undermines these principles risks weakening the very system it is intended to improve. The 340B program, in its current form, helps maintain that balance by enabling covered entities to stretch resources and reinvest savings into patient care and access. Any proposed changes to the program should preserve this alignmentnot disrupt it. It is both possible and necessary for stakeholders to work collaboratively toward solutions that address legitimate concernssuch as program integrity and transparencywithout introducing undue hardship, excessive administrative burden, or barriers to care. Reform should: Maintain appropriate incentives for both manufacturers and providers. Avoid shifting disproportionate financial or operational risk to one party. Reduce, not increase, administrative complexity. Preserve and strengthen patient access to medications and services. Ultimately, the shared goal is clear: ensuring that life-saving therapies are not only developed but also reach the patients who need them. Achieving that goal requires balance, collaboration, and thoughtful policy, not structural changes that unintentionally weaken one side of the system.
HRSA-2026-0001-2271Community Health of South Florida Inc.2026-04-20T04:00Z120,153 chars
See attached file(s) HHS Docket No. HRSA-2026-03042 COMMUNITY HEALTH of SOUTH FLORIDA, INC. April 14, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: 0n behalf of Community Health of South Florida, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $1,750,000 from entity-owned pharmacy operations and 20% for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. FIRSA F",.. :no I rtr, it FLORIDADEPARTMENT CHR0REN AND miku LIES AilIMAMIU11.1334 JaCkSon 111411151.1INI Thali& Sor i t . O v F lo lo ra rl I cla Cteldren'sTtust lEteallti Nelwork CHI is a not-for-profit corporation partially sponsored/funded by Health Resources & Services Administrator (HRSA); Florida Department of Children & Families, Distrlct 11; the Florida Department of Health; Jackson Health System; Public Health Trust of Miomi-Dade County; The Children's Trust; and the South Florida Behavioral Health Network. 10300 SW 216 Street Miami, Florida 33190 Office: (305) 253-5100 Fax: (786) 245-2770 chisouthfl.org The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Community Health of South Florida in particular, this means it will impact: 185,581 340B transactions per year/ 52,279 patients Current admin costs for our 340B program is $21,805,354 annually Community Health of South Florida uses the revenue to fund mobile health units, medication therapy management programs, anticoagulation classes, diabetes management classes, community outreach programs, community health worker services, behavioral health integration, chronic disease management programs, extended clinic hours, and patient medication assistance initiatives. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and seiious threat to rnedication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B prograrn provides, this rnodel could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other phannacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharrnacy educational materials and prescription bag stuffers, a signal that the operational and human irnpact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the hnpact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The rnajority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients wiI1 be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to Ovate practices, with studies showing a significantly higher prevalence of illnesses like diabetes, 2 hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonaiy embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primaiy care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alaiming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatoty barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alanning and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furtheimore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the Richard P, Ku L, DorA, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patienls with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haernost. 2021 Sep; I 9(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PM ID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randornized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doilpdf/ 0.1161/circulationah a. l 23.065748 4 Substance Abuse and Mental Healtb Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. h Ups ://w ww. s uov/data/data-we-collec t/nscl u h-nat io nal-s u rveyd ru a-use- and-hen ltli/n ation al-re leases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: l0.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 rnillion Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incornes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, d isrupts established pharinacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Eveiy dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of time and resources is not a minor inconvenience; it is a structural undeirnining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. HI. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Prograin would force CHCs to divert even more scarce resources away frorn patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple inanufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating inanufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in rnonitoring rebate claims and payments. We urge HRSA to consider the high up-front and 4 ongoing costs of compliance with a potential 340B Rebate Model, which will uftimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operationaI impact of culTent manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Staffing Impact: Community Health of South Florida anticipates needing 3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate rnodel. External Vendor Costs: Given increased complexity, Community Health of South Florida anticipates an increase of $7,200 per year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two F tEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, canying costs, and potential losses on discounted or expired drugs without rebate recovely. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. 3 full time employees would require $108,000 per year plus an estimated 3 million for 10 selected drugs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate clairns and payments. An estimated 30 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization 7 Internal NACI-IC assessment (99 responses). 8 Ibid. 5 and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Community Health of South Flodda urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to phannacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacture's have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they culrently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $19,532 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these coinplex rebate-tracking features. These are permanent, recuiring costs that diminish our 340B savings. Total Cost: For our CHC, which seives 52,279 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $21,805,354 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract phaimacies that use Third-Party Administrators (TPAs), in-house phaimacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. RX30 serves as the pharmacy dispensing and pharmacy management system, functioning as the system of record for outpatient prescription processing, dispensing, claims adjudication, and related pharmacy transaction data. RX30 provides dispense level information, including NDC, quantity, fill date, payer, and claim outcomes, which is required for identifying and validating prescriptions eligible for 340B rebate consideration. Epic Systems serves as the electronic health record (EHR) and clinical system of record, providing patient demographics, encounter data, provider information, and outpatient eligibility indicators necessary to determine 340B program compliance. Epic supplies encounter and provider relationship data used to validate that prescriptions meet 340B eligibility requirements. For purposes of the 340B rebate pilot program, RX30 and Epic shall be integrated or coordinated to enable accurate matching of dispensed prescription data with corresponding patient encounters and provider eligibility information. This combined data will support post-dispensing identification of rebate eligible prescriptions, submission of rebate claims, compliance with 340B statutory and regulatory requirements, prevention of duplicate discounts, and audit readiness. 6 One-Time Integration Costs: We anticipate high upfront costs of $53,000 to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who culTently manage clinical pharmacy services will be forced to spend 40 hours per week manually pulling "Purchase Files" and "Price Files" to verify that eveiy rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these an-angements. My CHC currently partners with 72 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 72 different phaimacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Miami-Dade and Monroe Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharrnacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-adrninistered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was adrninistered. While the CHCs maintain peipetual inventories and complete adrninistrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maxhnum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 vulnerability lndex Approach to Identify Pharmacv Deserts and Kevstone Pharmacies I Pharmacy and Clinical Pharmacoloev I JAMA Network Onen I JAW\ Network 19 httim://www.healthaffairs,org/doi/abs/l 0.1377/h I thaff:2024.00 I 92?journ a(Code=htthafC 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health seivices within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Patients with incomes at or below 100% of FPL receive a full discount and typically pay a nominal fee, while patients with incomes between 100% and 200% of federal poverty level (FPL) receive progressively reduced charges according to established discount tiers. The sliding fee scale must be applied uniformly to all eligible patients and services within the approved scope of care, including prescription medications. Access to up-front 340B pricing is essential to operationalizing this requirement, as it allows FQHCs to calculate and apply affordable medication charges in real time at the point of sale; without upfront 340B discounts, FQHCs cannot reliably determine or offer compliant patient pricing. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, paiticularly into a single inventory categoiy. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect " HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://hphc.hrsa.gov/compliance/comnl lance- man ualichapter9# footho le 1 0 8 forces CHCs to esthnate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and rnust stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventoiy 10-12 tirnes a year (roughly eveiy 30 days)." Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data eveiy 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payinents; however, we have concerns about the lacic of details regarding enforcement if rnanufacturers fail to rneet this requirement. Based on experience with manufacturer denials related to the cuirent MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide coirected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers are required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately irnpact CHCs and trickle down to patients. It is important to note that many CHCs are cuirently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To suppoit CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worlced with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 14 and WAC pricing data for the first quarter of " littps://en liveithealth.co/b loRN ear-end-bus iness -hea Ith-ch eek-key-metries-everv-ph armacv-owner-shou Id-rev i ew fittps://340bpricine.hrsa.uow' 9 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Anil ual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to detern-iine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventoiy models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estitnate it would cost $2,846,793.29 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $308,822.26 per year to purchase these same drugs at the 340B ceiling price. This represents an 822% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Community Health of South FIorida anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as mobile health units, medication therapy management programs, anticoagulation classes, diabetes management classes, community outreach programs, community health worker services, behavioral health integration, chronic disease management programs, extended clinic hours, and patient medication assistance initiatives. Patient Financial Assistance: 0ur ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "biidge" support that prevents our 25,100 uninsured patients (48% of our patient population) from rationing their insulin or heart medication. 15 httos://www.erns.wv/idestziolselected-drue-I ist-uegot iated-pric es-also-know n-max i mum-fa ir-prices-stamlezin.zin 10 C. Wholesaler Implications Another concern is that purchasing drugs at full WAC -will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Community Health of South Florida asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organi7ation in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diveiting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other rnajor revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, rnany CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Community Health of South Florida estimates its 2027 Annual Rebate Opportunity Cost to be approximately $339,687.29. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Community IIealth of South Florida estirnates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $68,682.24. Purchasing drugs at WAC instead of the 340B ceiling price would increase monthly spending from $25,735.18 to $94,417.42an approximately 267% increase. This dramatic escalation in upfront drug costs is unsustainable for a CHC operating on thin margins and reliant on timely 340B savings to fund patient care. Eveiy dollar we pay upfront at WAC is a dollar that remains "fiozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to imrnediate public health ciises or facility emergencies. To navigate the rebate model, our organization would be forced to take out an un-estitnated amount of credit to spend on patient needs. This is not a sustainable solution; the interest costs alone are estimated to be $1,190,702 annuallyfunds that are cuirently dedicated to mobile health units, medication therapy management programs, anticoagulation classes, diabetes management classes, community outreach programs, community health worker services, behavioral health integration, chronic disease management programs, extended clinic hours, and patient 11 medication assistance initiatives. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Community Health of South Florida, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the countty depend on. a. Financial Impact of Rebate Denials and DeIays Community Health of South Florida urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $65,052.85. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10-day window creates an immediate cash flow crisis. CHCs are particularly wonied that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the phannacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-tirne 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second Iayer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow I6 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36 l 63) https:/hvww. federalreaister. aov/documcnts/2025/08 /01/2025-14619/340b-urom a n i-not ce- aopli cat ion-nrocess-for-the-340b-reb ate- mode I-oilot-program 12 issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable rnanufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Prograrn and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systeinatic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutoiy requirements. Within the cuiTent MFP inodels used by manufacturers and their vendor Beacon Channel Management, CHCs are given extremely limited transparency into the process, and denials are often based on vague reasons tied to arbitraiy, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutoiy requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and 0PA-approved audits." The previously proposed rebate construct and the one currently used by manufacturers for MFP de- duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for eveiy rebate questioned by manufacturers will increase costs for CHCs and lilcely lead many covered entities to forgo the appropriate statutoiy 3408 discounts due to insufficient personnel to perfoim the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care deliveiy and fails to align with the 340B program's intent "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."18 Rebate payment thning requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run IVIFP de-duplication processes demonstrate that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. 17 Manufacturer Audit Guidelines htips://www.ltia.gov/s Res/default/II lcs/hisa/opa/d ispute-resolu tion-process-12-12-96.pdf " 340B House Report Legislative History. H.R. RER 102-384(II). 13 The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, Ieaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Cul-rent ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to retum a deterrnination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volurne of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of phatmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer self-policing, contrary to HRSA's statutoiy responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operates under unifoim national standards that limit manufacturer's discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or Iv1DPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payinent timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates 19 Administrative Dispute Resolution Regulation, httos://www.govinfo.gov/contentLpke/FR-2024-04- I Wodf/2024-08262.pdf 14 by categoly, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" tirneframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutoiy requiretnents, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model rnust preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchase-history logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes2i to be utilized "to understand the validations perfoimed following the successful transrnission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and 20 Section 340B of the Public Health Service Act, https://www.hisa.eov/sites/default/files/Imakural-health/nhs-act-section-34013.pdf 21 httpS://111.11).SLIpport.beaconchannelmanagement.com/en/ar tic les/13335320-validation-cod es-and-uric inu-codes-ulossary 15 "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved ill the determination process be published in detail for all covered entities. Code Description Type Dentition PI 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of a recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to deterrnine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If BRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated plices do not apply until future years, would impose extraordinaiy administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repuiposed for rebate submission or reconciliation. Implementing a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incretnental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support intemal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase adrninistrative burden and compliance risk without improving program integrity. 22 httns nection. fed= lre is ter. gov /2025 - I 4619.pd f?17539659 I 8 16 Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be rnuch higher, depending on the software.23 An estimated $128,000 would be required to implement new software and staff plus an undetennined TPA costs. CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-term applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not cunently raise those concerns. Moreover, where manufacturers have concerns about diversion or cornpliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or near-term Medicare interaction existswould be duplicative and unnecessaiy. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutoiy mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs aheady operate under a comprehensive regulatoiy framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilin a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Prograrn cornpliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related 23 Internal NACHC survey data 17 infmmation annually through the Uniform Data System (UDS). This includes data on 340B - purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included inedications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alteinatives are available for HHS' consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for putposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntaiy model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatoiy reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVII1 of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatoiy 24 5 U.S.C. 500-596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), Jutps://www. Fda. nov/reaulatorv-infortnation/search - a-mtidan ce-docu moils/ leas t-burd ensotne-prov is ions-con cept- and-princ iples (last visited Mat 13, 2026); H.R. REP. 102-384(11)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 18 reporting to the 340B repositoiy in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repositoiy are made mandatoiy, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of- purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of "covered entity," such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Comrnittee expects that the Secretary of HHS, in developing these agreernents, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity."27 The negative implications of a 340B rebate rnodel are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's prirnary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra- statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."28 That clause, however, cannot be read in a vacuum. From this clause, HHS has 26 CY 2026 PFS, Final Rule, blips:8w ww.aov info.gov/contentinkg/FR-2025- I 1-05/m102025- I 9787.pdf " H.R. REP. 102-384(H) 28 42 U.S.C. 256b(a)(1) 19 contended that it may authorize manufacturer 340B rebate models. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutoiy ceiling price. That statute merely states that a drugmaker must make available at the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statute's plain text prohibiting a manufacturer from charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA 's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretaiy shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretaly)."3 That clause cannot be read in a vacuum. RRSA's authority over the 340B statute, including its alleged ability to itnplement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug maniffacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity [, not HHS or a drugmaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.3 I Accordingly, only the covered entity rnay elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid 29 Id. 3 42 U.S.C. 256b(a)( I ) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the FIHS may "develop[][more detailed guidance describing methodologies and options available lo covered entities for billing covered outpatient drugs to State Medicaid agencies in a rnanner that avoids duplicate discounts pursuant to subsection (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of IIHS may institute a systern to ensure that the covered entity does what the statute says it's obligated to do prevent duplicate discounts. Id. 20 agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such a covered entity election has been made rneaning their authority to deduplicate such claims only vests after the 340B drug have already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugrnakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also conceined that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a diug is a 340B diug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization ("MCO"). The billing requirements vaiy further depending on whether the drugs are billed under a pharmacy benefit or a 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims managernent is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payrnent under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 14 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). 21 medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre- rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted .36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. Florida Medicaid requires CHCs to determine and identify 340B status at the point of billing, with different requirements applying across fee for- service and managed care programs and across pharmacy versus medical benefits. Under Florida's AAC- based reimbursement methodology, 340B drugs must be billed prospectively at actual acquisition cost and clearly identified as 340B at the time a claim is submitted. A rebate model requiring CHCs to purchase drugs at WAC and await -post dispense rebates would prevent timely- and compliant Medicaid billing, create overpayment risk, and expose CHCs to recoupments and compliance findings. Because Florida Medicaid does not accommodate retrospective repricing or reclassification of claims, a -rebate based- model is operationally incompatible with Florida Medicaid requirements and infeasible for CHCs operating within the state. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a dmg, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for dnigs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point- of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to detennine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incuned at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the 36 htlps://inedi-ealrx.dhcs.ca.aov/cms/medicalrx/static- assets/documents/movider/2025/12 A Claim Submission Reouirem ems 340B Rebate Model Pilot Druas.odf 37 C.F.R. 447.518(a). 22 states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugrnaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when subrnitting a drug's AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC inust purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHS's designing of a rebate model does not require it to authorize drugmakers to charge the nation's CHCs one of the highestpossible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a govemment-led clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or adrninistered by covered entities frorn 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's determination of the pharmacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."39 The definition indicates that Medicaid departments may deterrnine that AAC should be based on the wholesaler pricing files, which would be WAC- based pricing under a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concems about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, "[i]f the AAC for drugs in the Pilot Program is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaid's cost for these drugs will increase."40 The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered 33 Ctrs. for Medicare & Medicaid Servs., IPA' 2028 Final Guidance, httns://www.cms.cov/files/document/inav-2028-final- guidance,pdf. 39 42 C.F.R. 447.502 4 [I 4]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, Jittps://www.reLulations.gov/comuenUHRSA-2025-0001-0095. 23 entities at the 340B ceiling price, we will fail to meet the entity's initial cost and wilI contribute to cash flow problems and financial instability for the impacted safety net providers."'" Furtheimore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugrnaker, the authoiity to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC piicing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usuiped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utili7ation data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports" submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugrnakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmalcer's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B mice of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true "actual acquisition cost" of a 340B- rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to oveipay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim was not 340B based on the manufacturer's subsequent discretionaiy denial of the 340B rebate. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. '1z See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 24 Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification infoimation. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Number (PCN), and Gthup Number (GRP) to identify those FFS and managed care plans under which a manufacturer rnay pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: "A covered entiO, shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section i f the drug is subject to the payment qf a rebate to the State under section 1927 of such Act. " 44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Infoimation Database. To date, the rnechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP rnust assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.cov/current/title-42/chap ter-W/subchapt er-C/oart-438/suboart- A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(ernphasis added). 25 Benefits Prograrn, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatoiy structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutoiy exclusion, TRICARE PBM agreements rnay obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted dings. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a diug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is lilcely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a rnanufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for unifonned service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceuticaI manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statute's design reflects Congress's intent to ensure non-discriminatory access to discounted drugs, not to insulate manufacturem from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize underrnines the 340B program's puipose and contradicts its statutoiy structure. Commercial claims data is extraordinarily valuable proprietaiy information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely 45 32 C.F.R. 199.21(q)(2)(iii)(E) 16 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). V7 Kalderos, Sightlines Issue No. 3, Double, douhle, toil and amble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 26 pay significant sums to obtain access to such data.48 This regulatory action represents the first thne in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub regulatoiy guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better foimulaiy placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factomd into their high drug list prices.5 Drug industry data vendors have reported that such data is highly valuable to naanufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to cornmercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countiy's most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that URSA lacks statutory authority to require the submission of commercial clahns data. HRSA's authorization of mandatory commercial claims data submission under the 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of cornmercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), lssue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least . . $6 billion annually" ui 2022.) 5 Kalderos, Sightlines Issue No. 3, Doub!e, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by rnanufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial conrracts, www.Kalderos.com (Oct. 2023), lssue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. It Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that "the goat of the 340B statute .. . is to malce 'covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 93 340B Report, Legislative Map: Contract Pharnracy Protection Bills, https://340breport.comilegislative-map/contract-pharmacv- protection-billA 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayinent, httos://3,10breoort.comflegislative- ma Wlaw s-Das sed-that-nro hib i t-nbm-underpav men U. 27 rebate pilot exceeds the agency's statutoly authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements;, it does not authorize the agency to compel covered entities to surrender valuable proprietaty data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretaiy's ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secietaiy to create extra- statutoty hurdles to 340B participation."55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affitmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."56 By conditioning access to 340B pricing on the transfer of cornmercial claims data, HRSA has created a requirement wholly untethered to the statutoiy text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Adrninistrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statute's histoiy, advances the statutory purpose of the 340B Program to enable safety-net providers, inchiding CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial clahns data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal Anti-Kickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA's action exceeds statutoiy authority, violates the APA, raises serious constitutional concems, and directly undeimines the purpose of the 340B statute. VIH. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14 -cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health Systern v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). $7 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 28 whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutoiy discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will deterrnine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the tam "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or funded AIDS dnig purchasing assistance program [from the requirements of] `patient' of the covered entity for puiposes of this definition if so, registered as eligible by the State program."60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Pfice (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC 59 42 U.S.C. 256b(a)(5)(B) G0 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Rcg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] " H.R. REP. 102-384, 16 29 Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claiins that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSA 's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and rnaintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to inost CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were impleinented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs cunently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longei need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the cunent patchwork of 50 different state processes and data sets. 30 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessrnents sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone systern, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be complete and more accurate than data collected through the voluntaty repositoiy CMS is currently developing. C. Importance of Neutrak For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder's interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platfoim illustrates this concein. ESP was developed for and is financed by pharmaceutical manufacturers; its terrns and conditions are widely viewed by CEs as favoring manufacturers' interests and the platform itself. As a result, many CEs do not view ESP as a neutral systern and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessaiy for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessaiy to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable infoimation, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate mode162 published August 23, 2024, should be prohibited. Manufacturers have akeady demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 62 httos://beaconchamielmanagement.conilpageskesources (Johnson & Johnson Policy Documents) 31 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization managernent, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to comrnercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Community Health of South Florida strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track_rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, inaking it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Community Health of South Florida believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 32 Community Health of South Florida appreciates the opportunity to respond to this Request for Infoimation on the 340B Rebate Model Pilot, and we look foiward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dr. Samuel K. James, PharmD, AVP for Pharmacy Operations SJames@chisouthfl.org Sincerely, Blake Hall, CEO Community Health of South Florida, Inc. 33
HRSA-2026-0001-2272The Gay and Lesbian Community Center of Southern Nevada2026-04-20T04:00Z12,228 chars
See attached file(s) HRSA REQUEST FOR INFORMATION 340B REBATE MODEL PILOT PROGRAM (2026-03042) The Gay and Lesbian Community Center of Southern Nevada EXECUTIVE SUMMARY The Gay and Lesbian Community Center of Southern Nevada submits this response to HRSAs Request for Information regarding the proposed 340B Rebate Model Pilot Program. The current 340B upfront discount model provides financial predictability, operational efficiency, and direct reinvestment into patient care services. It enables covered entities to manage drug acquisition costs at the point of purchase and maintain stable cash flow. A rebate-based model would introduce structural operational and financial shifts, including: Approximately 65-day cash flow delay cycle Increased administrative and compliance burden Expanded data collection and reporting requirements Additional staffing and systems costs Increased exposure to manufacturer payment timing variability Key Financial Indicators (Most Recent Fiscal Year) Total 340B purchases (ceiling price): $14,953,829.54 Net annual 340B program benefit: $5,137,374.50 Estimated WAC vs. 340B differential: $8,052,062.06 Estimated monthly cash exposure under rebate model: $671,005.17 Additional staffing requirement: 1.0 FTE ($68,750 annually) 1. COSTS TO COVERED ENTITIES 1a. Current Administrative Costs Under the Upfront 340B Discount 340B Transaction Volume 31,225 prescriptions annually Current Administrative Cost Components Integrity audit costs Pharmacy dispensing fees Pharmacy administrative fees Provider fees (telehealth and affiliate providers) Replenishment costs Third-party administrator (TPA) fees Staff training and development costs Dedicated 340B staffing (Specialist + Director of Strategy & Optimization) Key Cost Drivers 1. Staffing and labor intensity (eligibility, compliance, reconciliation, HRSA reporting) 2. Compliance and audit requirements (internal and external oversight) 3. Third-party vendor infrastructure (TPA systems, contract pharmacies, replenishment networks) 4. Program scale and transaction volume 1b. Administrative Costs Under a 340B Rebate Model One-Time Costs System development or procurement for rebate tracking Workflow redesign and policy updates Vendor implementation and integration support Staff training and onboarding Ongoing Costs Additional staffing: 1.0 FTE ($68,750 annually) Manufacturer portal management across multiple platforms Rebate submission, reconciliation, and validation Denial tracking and appeals management Cash flow monitoring and financing costs Increased TPA and software licensing expenses Incremental Activities Rebate request preparation and submission Data validation and aggregation Manufacturer portal management Payment reconciliation and dispute resolution Audit support and documentation Financial and liquidity monitoring Impact on Current Operations The rebate model would layer additional administrative workflows onto existing 340B operations, increasing complexity and delaying reinvestment of program savings into patient care. 1c. Staffing Impacts Additional staffing required: Yes Additional FTE: 1.0 (Permanent) Role Responsibilities Rebate submission and tracking Manufacturer portal administration Claims validation and reconciliation Denial management and appeals Audit support and documentation Financial reconciliation Annual Cost $68,750 (salary + benefits) 1d. Systems and Infrastructure A rebate model would require: Manufacturer-specific rebate portals Centralized claims tracking systems Reconciliation and validation databases Compliance and audit reporting tools Multi-system integration across pharmacy networks 1e. Other Anticipated Costs or Impacts Additional Costs Legal and regulatory review Staff training across departments Consulting and implementation support Workflow redesign and compliance restructuring Organizational Factors Community-based safety-net provider High reliance on 340B savings for service delivery High-volume outpatient pharmacy network (61 contract + 1 in-house) Impact on Patient Access Potential reductions in: HIV prevention and treatment services Behavioral health services Medication affordability programs Capacity to add providers and extend clinic hours Capacity to improve appointment availability and reduce wait times Capacity to strengthen care navigation and outreach including providing transportation support and mobile services 2. PAYMENT TIMING AND CASH FLOW IMPACTS 2a. Cash Flow Impact Under a rebate model: Full wholesale acquisition cost (WAC) must be paid upfront Reimbursement is delayed post-submission Creates structural liquidity gap Monthly Cash Exposure $671,005.17 2b. Current Wholesaler Terms Net 30 payment terms Effective payment cycle: 1530 days post-dispense No meaningful prompt-pay incentives Applies equally to 340B and non-340B drugs 2c. Rebate Model vs. Current Model The rebate model introduces a ~65-day financing gap, compared to the current 1530 day operational cycle, resulting in increased working capital requirements. 2d. Ensuring Compliance with 10-Day Rebate Requirement A rebate model could ensure compliance with a 10-calendar-day requirement by: Establishing a binding program agreement with manufacturers Defining a start-of-clock trigger upon electronic acceptance of complete data Implementing a centralized submission platform with time-stamped transactions Automating rebate deadline tracking and violation alerts Requiring payment or formally coded denial within 10 days Imposing financial penalties for late payment Requiring public reporting of turnaround times Establishing neutral adjudication for unresolved claims 3. REBATE DENIALS Rebate denials should be limited to clearly defined circumstances such as duplicate discount prevention. Required Safeguards Standardized denial templates Mandatory written rationale for denials Defined adjudication timelines Formal appeal process for disputed claims 4. DATA COLLECTION BY COVERED ENTITIES 4a. Current Data Collection Systems The Center currently utilizes: Alchemy Pillr Health WellPartner Internal SharePoint document repositories These systems support claims processing, eligibility validation, reconciliation, and compliance reporting. 4b. Data Integrity Controls Validation checks Reconciliation processes Internal compliance reviews Third-party administrator oversight Routine audit procedures 4c. Impact of Rebate Model A rebate model would require: Expanded claim-level reporting Manufacturer-specific submission formats Increased reconciliation frequency Ongoing real-time reporting obligations 4d. Required Data Elements A rebate model would rely on data that is already routinely captured across pharmacy systems, EHRs, and third-party administrators (e.g., Alchemy, Pillr Health, WellPartner), but would require standardization and consolidation for submission. Key data elements would include: Patient & provider data: de-identified patient ID, provider ID Pharmacy data: NDC, dispense date, quantity, pharmacy site (in-house or contract) Payer data: payer type, eligibility at time of dispense, Medicaid status 340B data: eligibility flag, accumulation status, duplicate discount indicators Financial data: WAC, 340B ceiling price equivalents, rebate calculation fields While this information is already available and being used for eligibility and reconciliation today, implementing a rebate model would require additional staffing and operational effort to aggregate, reconcile, and standardize data across systems into a consistent submission format. 4e. Recommendations Standardized national data submission format Centralized federal submission platform Interoperability across vendor systems Reduced duplicate reporting requirements 5. DUPLICATE DISCOUNTS Current safeguards include: Third-party administrator (TPA) oversight systems Medicaid coordination processes Internal eligibility validation Audit and compliance controls Use of claim modifiers and billing indicators to help prevent duplicate discount capture and ensure proper claim identification The rebate model does not inherently eliminate the risk of duplicate discounts and may increase reconciliation complexity due to timing and data alignment challenges across payers, pharmacies, and manufacturers. This issue is primarily one of data coordination and standardization rather than pricing structure. 6. REQUIRED REPORTING A rebate model would require: Claim-level rebate submission data provided on a standardized, manufacturer- specific format Regular reporting of rebate activity (e.g., monthly submission and reconciliation cycles) Denial, adjustment, and appeal documentation with standardized reason codes Reconciliation reports aligning submitted claims, paid rebates, and outstanding balances Supporting audit documentation to validate compliance and data integrity For oversight and transparency purposes, HRSA would also likely require aggregated public reporting of key program metrics (e.g., total claims processed, rebate payment rates, denial rates, and timeliness of payment) on a quarterly basis. Data would need to be retained and made available for the duration of the pilot program and for a defined post-pilot evaluation period to support auditability, reconciliation, and program performance assessment. This approach would represent a material increase in reporting complexity relative to the current 340B operational framework. 7. PROGRAM INTEGRITY AND POTENTIAL BENEFITS Existing 340B Safeguards - Audits, compliance monitoring, and third-party administrator oversight 7a. Program Integrity Impact A rebate model would not strengthen program integrity Shifts controls from point-of-dispense safeguards to retrospective reconciliation Increases reliance on delayed, multi-system data matching Introduces greater risk of timing mismatches and data inconsistencies 7b. Potential Effects of a Rebate-Based Model Duplicate discounts: Does not inherently prevent duplicate discounts; may increase risk due to misaligned Medicaid, CMS, and 340B data timing and attribution Diversion/improper claims: Does not prevent diversion at point of dispense; reduces real-time program controls by shifting validation post-transaction Pricing transparency: Limited transparency gains dependent on extensive standardization; added reconciliation layers may reduce overall clarity 7c. Recommendations Maintain point-of-dispense safeguards rather than shifting to a retrospective rebate model Avoid duplicative reporting structures that increase administrative burden without improving compliance Leverage existing TPA and pharmacy data feeds with standardized formats Prioritize interoperability within existing systems over new parallel infrastructure 7d. Other Benefits and Tradeoffs Benefits are largely administrative rather than substantive improvements Increased operational complexity and administrative burden on covered entities and manufacturers Delayed access to savings impacting cash flow and program sustainability Greater risk of payment delays, disputes, and reconciliation failures Overall, benefits do not clearly outweigh added cost, complexity, and operational risk compared to the current 340B framework CONCLUSION The upfront 340B discount model remains the most efficient and operationally stable mechanism for covered entities. A rebate-based model would introduce: Structural cash flow delays (~65 days) Increased administrative and staffing burden Expanded data and reporting obligations Greater operational and financial risk The Center respectfully urges HRSA to carefully evaluate the downstream impact on patient access and covered entity sustainability before advancing a rebate-based pilot structure.
HRSA-2026-0001-2273Citizens Memorial Hospital2026-04-20T04:00Z31,594 chars
See attached file(s) 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Citizens Memorial Hospital Bolivar, Missouri, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Citizens Memorial Hospital Bolivar, Missouri that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Citizens Memorial Hospital Bolivar, Missouri has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Citizens Memorial Hospital Bolivar, Missouri has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over 2 delays and denials, and therefore less money that Citizens Memorial Hospital Bolivar, Missouri can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Citizens Memorial Hospital Bolivar, Missouri to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Citizens Memorial Hospital Bolivar, Missouri understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A rebate program with an estimated ~25 drugs (a large number of drugs for an initial roll-out) would result in a significant increase in administrative costs, program oversight burden, and higher operational complexity. Already, the number of manufacturers requiring expanded submission of [medical] claims data is increasing resulting in delays associated with third-party administrator (TPA) configuration and troubleshooting. We can rightly assume that claim submission burdens would absolutely increase with the implementation of a rebate program, as manufacturers would undoubtedly wish to superintend this new compensation modality with more claims requirements. The costs associated with TPA configuration to accommodate proposed rebate model is unknown at this point, as TPAs halted rollout of system enhancements when the rebate pilot was suspended. Increased fees to support these enhancements are anticipated, but they are largely unknown at this time. Investment in a $500,000 per year AI-based compliance service is proving to be the only realistic solution for inherent difficulty in data alignment and parsing of key fields that are hidden by the established infrastructure and reliance on multiple vendor databases to collectively reconcile large amounts of claims data. Staffing Impacts Under a Potential 340B Rebate Program. Citizens Memorial Hospital Bolivar, Missouri does not currently have the staff needed to comply with a Rebate Program. The impending implementation of the 340B Rebate Model Pilot Program has already caused our small (already stretched) 340B team to shift rolls and 3 responsibilities to account for the new burdens brought on by the proposed program characteristics. Citizens Memorial Hospital Bolivar, Missouri is a small rural organization and is very sensitive to personnel changes. Just in the last 4 months, we have expanded our 340B team from 1 FTE to 3 FTEs, adding a 340B analyst ($135,200/year) and a 340B Program Manager ($56,150/year), simply to accommodate the roles and responsibilities of a functioning and compliant 340B program (without rebate program modalities). HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Citizens Memorial Hospital Bolivar, Missouri has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. It is unclear if any new or modified IT systems, software, or data infrastructure would be required to implement a potential 340B Rebate Model Pilot Program. As discussed above, our primary TPA has not provided us estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program, as the rebate pilot was suspended. It is also unclear whether any such costs would be one-time or recurring. As discussed above, any changes to our TPA data configurations always take significant time and must be verified before additional features become available or useful. This usually necessitates manual submissions of claims by our staff. Particularly difficult manual work is required to procure medical claims (increasingly demanded by manufacturers) data for submission. To use our primary TPA as an example, we have had a ticket open for 9 months in order to have 1 field added to 1 report to provide better access to the data for compliance and tracking. The TPAs do not have the resources to support their ongoing client needs for compliance tools with all the demands for platform changes to accommodate rebates. Citizens Memorial Hospital Bolivar, Missouri interfaces to four different TPAs, with varying levels of operational and interpersonal complexity. The proposed changes to our 340B program would strain these delicate relationships. 4 Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. As discussed above, our 340B staff have constantly had to manually submit data due to our TPAs lack of infrastructure to support us. Tasks like changing a report or adding additional fields for expanded claims adds a significant time burden as we wait on decentralized report writers. 340B ESP is not structured fully to support TPA interfacing and allow for CE data visibility and verification. TPAs have no way of getting claim submission verification back from 340B ESP. This means that TPAs are not able to verify which batch of claims have been submitted successfully. We have numerous examples of duplicate claims with no clarity on how the final claim was chosen. We also have examples of claims filed under our NPI erroneously. The CE has no visibility in ESP on where the data originated. Data-related burdens will exponentially increase with implementation of a rebate program in another instance of the ESP software (Beacon). Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Citizens Memorial Hospital Bolivar, Missouri to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Upfront drug discounts afford our organization an appropriate level of operational certainty and flexibility. Whereas, a rebate model introduces complications associated with costs that are not synchronized with reimbursement. Even if every single manufacture issues rebates within a 10-day period, it is very likely that each manufacturer will choose to issue rebates at different points within that window. This would only increase our aforementioned program oversight frustrations, having no consistent way to track our programs real-time reimbursement status. Also, our drug purchasing is not consistent day-to-day, and we do not have the financial liquidity to constantly float the drug companies. 5 CMH is very concerned with the impact a rebate program will have with our days cash on hand and ability to address urgent hospital operational needs and meet financing obligations to our lenders. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Citizens Memorial Hospital Bolivar, Missouri will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The following are programs that have been kept afloat by our 340B program. o Obstetrics care in a rural community hospital o Geriatric wellness unit to meet behavioral needs in aging population o Home health and health transit services for patients to access care o Senior Health Center for residents to access exercise equipment and community resources at no cost o Specialty clinics with board certified providers close to home o Access to new Alzheimers research and clinical trials o Robust acute care, transitional care, and chronic care management services o Community education and outreach to create new programs like our mobile integrated health unit o Medication Discount Program CMH anticipates hard decisions will be required on whether or not these service lines remain intact or even open under the rebate model. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Citizens Memorial Hospital Bolivar, Missouri reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the 6 upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. It should be noted that any one of the following issues could compromise rebate reimbursement for a covered entity. Intermittent posting of manufacturer eligibility details. Lack of important fields available for claim reconciliation or auditing purposes. Lack of communication back to TPAs for verification of claim submissions (including: claim date; time; status). Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Citizens Memorial Hospital Bolivar, Missouri, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Citizens Memorial Hospital Bolivar, Missouri respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Citizens Memorial Hospital Bolivar, Missouri and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data 7 required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Mariah Hollabaugh, PharmD, MBA, BCPS, CPEL System Director of Pharmacy Citizens Memorial Hospital Bolivar, Missouri The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Citizens Memorial Hospital Bolivar, Missouri, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Citizens Memorial Hospital Bolivar, Missouri that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Citizens Memorial Hospital Bolivar, Missouri has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Citizens Memorial Hospital Bolivar, Missouri has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Citizens Memorial Hospital Bolivar, Missouri can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Citizens Memorial Hospital Bolivar, Missouri to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Citizens Memorial Hospital Bolivar, Missouri understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. A rebate program with an estimated ~25 drugs (a large number of drugs for an initial roll-out) would result in a significant increase in administrative costs, program oversight burden, and higher operational complexity. Already, the number of manufacturers requiring expanded submission of [medical] claims data is increasing resulting in delays associated with third-party administrator (TPA) configuration and troubleshooting. We can rightly assume that claim submission burdens would absolutely increase with the implementation of a rebate program, as manufacturers would undoubtedly wish to superintend this new compensation modality with more claims requirements. The costs associated with TPA configuration to accommodate proposed rebate model is unknown at this point, as TPAs halted rollout of system enhancements when the rebate pilot was suspended. Increased fees to support these enhancements are anticipated, but they are largely unknown at this time. Investment in a $500,000 per year AI-based compliance service is proving to be the only realistic solution for inherent difficulty in data alignment and parsing of key fields that are hidden by the established infrastructure and reliance on multiple vendor databases to collectively reconcile large amounts of claims data. Staffing Impacts Under a Potential 340B Rebate Program. Citizens Memorial Hospital Bolivar, Missouri does not currently have the staff needed to comply with a Rebate Program. The impending implementation of the 340B Rebate Model Pilot Program has already caused our small (already stretched) 340B team to shift rolls and responsibilities to account for the new burdens brought on by the proposed program characteristics. Citizens Memorial Hospital Bolivar, Missouri is a small rural organization and is very sensitive to personnel changes. Just in the last 4 months, we have expanded our 340B team from 1 FTE to 3 FTEs, adding a 340B analyst ($135,200/year) and a 340B Program Manager ($56,150/year), simply to accommodate the roles and responsibilities of a functioning and compliant 340B program (without rebate program modalities). HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Citizens Memorial Hospital Bolivar, Missouri has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. It is unclear if any new or modified IT systems, software, or data infrastructure would be required to implement a potential 340B Rebate Model Pilot Program. As discussed above, our primary TPA has not provided us estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program, as the rebate pilot was suspended. It is also unclear whether any such costs would be one-time or recurring. As discussed above, any changes to our TPA data configurations always take significant time and must be verified before additional features become available or useful. This usually necessitates manual submissions of claims by our staff. Particularly difficult manual work is required to procure medical claims (increasingly demanded by manufacturers) data for submission. To use our primary TPA as an example, we have had a ticket open for 9 months in order to have 1 field added to 1 report to provide better access to the data for compliance and tracking. The TPAs do not have the resources to support their ongoing client needs for compliance tools with all the demands for platform changes to accommodate rebates. Citizens Memorial Hospital Bolivar, Missouri interfaces to four different TPAs, with varying levels of operational and interpersonal complexity. The proposed changes to our 340B program would strain these delicate relationships. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. As discussed above, our 340B staff have constantly had to manually submit data due to our TPAs lack of infrastructure to support us. Tasks like changing a report or adding additional fields for expanded claims adds a significant time burden as we wait on decentralized report writers. 340B ESP is not structured fully to support TPA interfacing and allow for CE data visibility and verification. TPAs have no way of getting claim submission verification back from 340B ESP. This means that TPAs are not able to verify which batch of claims have been submitted successfully. We have numerous examples of duplicate claims with no clarity on how the final claim was chosen. We also have examples of claims filed under our NPI erroneously. The CE has no visibility in ESP on where the data originated. Data-related burdens will exponentially increase with implementation of a rebate program in another instance of the ESP software (Beacon). Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Citizens Memorial Hospital Bolivar, Missouri to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Upfront drug discounts afford our organization an appropriate level of operational certainty and flexibility. Whereas, a rebate model introduces complications associated with costs that are not synchronized with reimbursement. Even if every single manufacture issues rebates within a 10-day period, it is very likely that each manufacturer will choose to issue rebates at different points within that window. This would only increase our aforementioned program oversight frustrations, having no consistent way to track our programs real-time reimbursement status. Also, our drug purchasing is not consistent day-to-day, and we do not have the financial liquidity to constantly float the drug companies. CMH is very concerned with the impact a rebate program will have with our days cash on hand and ability to address urgent hospital operational needs and meet financing obligations to our lenders. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Citizens Memorial Hospital Bolivar, Missouri will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The following are programs that have been kept afloat by our 340B program. Obstetrics care in a rural community hospital Geriatric wellness unit to meet behavioral needs in aging population Home health and health transit services for patients to access care Senior Health Center for residents to access exercise equipment and community resources at no cost Specialty clinics with board certified providers close to home Access to new Alzheimers research and clinical trials Robust acute care, transitional care, and chronic care management services Community education and outreach to create new programs like our mobile integrated health unit Medication Discount Program CMH anticipates hard decisions will be required on whether or not these service lines remain intact or even open under the rebate model. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Citizens Memorial Hospital Bolivar, Missouri reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. It should be noted that any one of the following issues could compromise rebate reimbursement for a covered entity. Intermittent posting of manufacturer eligibility details. Lack of important fields available for claim reconciliation or auditing purposes. Lack of communication back to TPAs for verification of claim submissions (including: claim date; time; status). Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Citizens Memorial Hospital Bolivar, Missouri, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Citizens Memorial Hospital Bolivar, Missouri respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Citizens Memorial Hospital Bolivar, Missouri and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Mariah Hollabaugh, PharmD, MBA, BCPS, CPEL System Director of Pharmacy Citizens Memorial Hospital Bolivar, Missouri
HRSA-2026-0001-2274Greater Lawrence Family Health Center2026-04-20T04:00Z13,879 chars
Greater Lawrence Family Health Center strongly urges HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program and to pursue alternatives that protect patient access while preserving the integrity and sustainability of the safety net. For more than three decades, the 340B Program has enabled CHCs to serve patients regardless of ability to pay. A rebatebased model would undermine this structure by introducing cashflow instability, administrative overload, and barriers to medication accessparticularly for uninsured and underinsured patients. Rather than implementing a rebate model, HRSA should pursue a National, Neutral Claims Clearinghouse approach. We appreciate the opportunity to provide input on this critical issue and welcome continued engagement with HRSA. Please see attached file. Family Health Center April 14, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information - 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Greater Lawrence Family Health Center, Inc. (GLFHC), we appreciate HRSAfor extending the comment deadline to Aprit 20, 2026, providing critical tirne for Comrnunity Health Centers (CHCs) to evaluate the operational, financial, and patient-care risks posed by the proposed 340B Rebate Model Pilot. GLFHC has served as a Federally Qualified Health Center for 45 years, caring for more than 68,000 patients across the Merrimack Valley. Our mission-driven programs are designed to address significant health disparities and are sustained in large part by 340B savings generated through our six in-house pharmacies. These savings are reinvested directly into patient care, enabling access, affordability, and comprehensive clinical services that would otherwise not exist. The 340B Program is foundational to ChiCs' ability to serve the nation's most vulnerable patients. By design, it enables safety-net providers to stretch limited federal resources through up-front outpatient drug discounts. The proposed rebate model represents a fundamental departure from this structure by shifting financial risk and administrative responsibility from manufacturers to CHCsentities operating on razor-thin margins. Based on national assessments from NACHC, CHCs anticipate: Significant revenue losses across entity-owned and contract pharmacy models Substantial increases in operational costs, often exceeding several million dollars annually for mid-sized CHCs Disproportionate harm to rural and underserved communities, which rely heavily on 340B savings to sustain access points such as mobile clinics, telehealth, and extended-hours services We strongly urge HRSAto exempt Community Health Centers from the 340B Rebate Model Pilot Program. Financial Risk and Cash-Flow Instability Mandating WAC-upfront purchasing creates severe cash-flow risk for CHCs. Many operate with fewer than 90 days of cash on hand and lackthe financial reserves to float drug inventories for extended rebate cycles. Key financial risks include: Delayed or denied rebates, leading to direct financial losses Loss of prompt-pay and volume discounts due to credit-limit strain Forced reliance on loans or lines of credit, diverting patient-care dollars toward interest and debt service GLFHC is already experiencing these risks under the Medicare Drug Price Negotiation process with the Maximum Fair Pricing (MFP) drugs. Between January 1 and March 31, 2026, we were denied $35,025.13 in Standard Default Refund Amounts (SDRA) for MFP drugs dispensed to non-patients, despite clearly identifying claim status through submission clarification codes and manufacturer transaction files. Recovering these funds requires submission of Good Faith Inquiries, with payment contingent on manufacturer approval and subject to extended delays. These denials appear to reflect manufacturers' failureor unwillingnessto honor visible claim-level data, effectively withholding refunds owed to covered entities. Given these documented failures, it is reasonable to anticipate that similar or greater issues would arise under a broader 340B rebate model. This is not sustainable. Analysis of a rebate model with the 2026 MFP drugs would lead to approximately a $IM cash flow impact if the rebate averages net 30 days. Looking forward, the increased drug cost for MFP 2026 and 2027 drug list would increase our drug spend by approximately $817K/month ($9.8M/year) while we wait for the rebates. This structure effectively converts the rebate model into an interest-free loan from safety-net providers to manufacturers, with no meaningful safeguards to prevent financial harm. Further, we have a physical inventory; the combined impact of inventory turnover and rebate submission timelines could extend purchase-to-rebate cycles well beyond 45 days. Even conservative denial rates would result in losses we cannot absorb at our CHC. 2 Administrative and Operational Burden The proposed pilot would impose duplicative and unnecessary administrative complexity on our already small administrative 340B team that already operates under rigorous compliance frameworks. GLFHC is required to: Build and maintain manufacturer-specific rebate reporting processes Manage multipte submission platforms with inconsistent data standards Track denials, reconcile payments, and navigate opaque dispute processes National CHC data indicate that most organizations would need to hire additional staff, often one or more FTEs, and invest heavily in IT infrastructure, pharmacy software customization, and third-party administrative support. For our in-house pharmacies, deep EHR-PMS integration would be required simply to function in the new modet. Here at GLFHC, due to financial constraints, this is a manual process. Operational estimates further illustrate the scale of this effort. Based on the current observed volume with MFP drugs of approximately 300 claims that are 340B every two weeks, with approximately 15 minutes per claim of staff time, the associated administrative workload is estimated at roughly 38 staff hours perweek dedicated to rebate- related processing and administration. Expansion of the pilot beyond the current MFP medications to a full 340B rebate model is expected to substantially increase claim volume, thereby necessitating additionat staffing and resources to ensure ongoing compliance and operational continuity. GLFHC is diverting dedicated time from our pharmacy residency program and shifting our pharmacy residents to assist our 340B team to work on this initiative. These investments divert limited resources away from direct patient care and clinical staffing, weakening the safety net rather than strengthening program integrity. Patient Impact and Access to Care Most importantly, a rebate-based pricing model threatens patient access to essential medications. We serve patients with a disproportionately high burden of chronic disease, including diabetes, hypertension, cardiovascular disease, chronic kidneydisease, and serious mental illness. These patients depend on affordable, predictable access to medications at the point of care. Under a rebate model, we would be required to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for manufacturer approval and payment of rebates. This detay disrupts affordability at the pharmacy counter and undermines CHCs' statutory obligation to provide sliding-fee discounts. 3 Access risks are particularly acute for: Direct oral anticoagulants (DOACs) used to prevent stroke and death SGLT2 inhibitors essential for diabetes, heart failure, and kidney disease Behavioral health therapies, including antipsychotics and agents treating medication-induced movement disorders Insulin, where affordability is a matter of life and death and intersecting federal requirements mandate point-of-sale discounts GLFHC has steadity invested our 340B savings into building a clinical pharmacy program, adherence packaging, free prescription delivery, medication access team to assist with prior authorizations, and other mission driven programs that directly serves our most vulnerable patients. Our Clinical Pharmacy program is comprised of 13 clinical pharmacists providing direct patient care under Collaborative Drug Therapy Management (CDTM) agreements to assist our primary care providers co-manage their patients. Our pharmacists offer chronic disease management including but not limited to management of clinic patients on anticoagulants, with diabetes, asthma, HIV, and those requiring behavioral health services. Clinical Pharmacy services woutd simply not exist without 340B savings. The evidence supporting this model of care of clinical pharmacists integrated in a care team is well- documented. A 2023 study published in the American Journal of Health-System Pharmacy looked specifically at an underserved clinic where most patients were uninsured and found that 1,334 pharmacist interventions over a two-year period generated a total cost avoidance of $477,065, averaging $357.62 per intervention.' GLFHC's ctinical pharmacy program has been generating this levet of impact for 15 years. Most recentty, one of our clinical pharmacists worked closely with a patient to lower her hemoglobin A1c from 12.1% to 7.5% in just 14 months. A peer-reviewed study published in 2017 found that every one- point reduction in A1c is associated with $1211 in medical cost savings; adjusted for inflation and applied to this singte patient, that represents approximately $9,000 in cost avoidance from one pharmacist's intervention alone.2 The impact of pharmacist-led interventions is both immediate and far-reaching. Consider another example: a patient hospitalized for diabetic ketoacidosis was seen in our transition of care (TOC) clinic, where our clinical pharmacist reconciled her medications, addressed access barriers, optimized her regimen, and set up a continuous glucose monitor to track her progress. Recognizing a broader pattern of low blood sugar risk among insulin-dependent patients, the pharmacist coltaborated with our Information Systems team and our physicians to develop an order set. This patient avoided further hospitatizations through elimination of unnecessary mealtime insulin and tighter glycemic control. An intervention that began with one patient transformed into a system-wide safeguard. This is the kind of 4 impact GLFHC delivers every day to patients with little to no other safety net. It is also what is at risk if CHCs are not exempted from the 340B rebate modet pilot program. Given the increase in cost, our pharmacies are limiting our inventoryto preventfinancial loss (i.e. expired medications). Further, this may lead to disruption to our adherence packaging program, ourfree detivery, and our prior authorization team. This may lead to medication interruptions or loss of access which may predictably lead to increased hospitatizations, adverse clinical outcomes, and avoidable system-wide costsall in direct conflict with HRSA's mission. Clinic-Administered Drugs We urge HRSA to explicitly exclude clinic-administered drugs (CADs) from any rebate pilot. CHC CAD operations are not structured for discrete claims billing and carry minimat risk of duplicate discounts due to existing Medicaid and Medicare safeguards. Including CADs would require costly system overhauls, new software, and manual data conversionatl without corresponding program integrity gains. Recommended Alternative: Neutral Claims Clearinghouse Rather than implementing a rebate model, HRSA should pursue a National, Neutrat Claims Clearinghouse approach that: Preserves up-front 340B pricing Reduces administrative burden for covered entities Provides manufacturers with accurate de-duplication data Protects patient access and CHC financial stability This approach aligns with the original intent of the 340B statute while addressing oversight concerns in a cost-effective, scalable manner. This will attow for transparency, which is what manufacturers desire. 5 Conclusion For more than three decades, the 340B Program has enabled CHCs to serve patients regardless of ability to pay. A rebate-based model would undermine this structure by introducing cash-flow instability, administrative overload, and barriers to medication accessparticularly for uninsured and underinsured patients. Greater Lawrence Family Health Center strongly urges HRSA to exempt Community Health Centers from any 340B Rebate Model Pilot Program and to pursue alternatives that protect patient access while preserving the integrity and sustainability of the safety net. We appreciate the opportunity to provide input on this critical issue and welcome continued engagement with HRSA. Sincerely, .7--oun_ok_rn.A savt6' President & CEO References: 1. Selman Hasham, Pamela Moye-Dickerson, Maria MillerThurston, Description and financial impact of ambulatory care pharmacy team interventions within an underserved patient population, American Journal of Health-System Pharmacy, Volume 80, Issue Supplement_l, 1 March 2023, Pages S42-S48, https://doi.org/10.1093/ajhp/zxac342 2. Hirsch JD, Bounthavong M, Arjmand A, Ha DR, Cadiz CL, Zimmerman A, Ourth H, Morreale AP, Edelman SV, Morello CM. Estimated Cost-Effectiveness, Cost Benefit, and Risk Reduction Associated with an Endocrinologist-Pharmacist Diabetes Intense Medical Management "Tune-Up" Clinic. J Manag Care Spec Pharm. 2017 Mar;23(3):318-326. doi: 10.18553/mcp.2017.23.3.318. PMID: 28230459; PMCID: PMC10398331. https://pmc.ncbi.nlm.nih.gov/articles/PMC10398331/#::text=8%2D12,16%25%2Olower%20($1%2 C505%20vs. 6
HRSA-2026-0001-2275Apicha Community Health Center2026-04-20T04:00Z15,747 chars
Apicha CHC strongly urges HRSA to not implement a mandatory rebate model for any 340B covered entities. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. See attached file with detailed comments April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Apicha Community Health Center (CHC) and the 8,000 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate this would burden us with additional administrative costs estimated one-time costs between $385,000 to $935,000 and annual ongoing additional costs of $480,000 to $1,210,000. Summary of Recommendations: In short, Apicha CHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans 2 must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Apicha CHC, a 340B Rebate Model Pilot Program will: Negatively impact the number of our 340B-Qualified prescriptions as well as 340B administration Our ability to provide services of our health center by 340B revenue, including dental care, SUD treatment, mental health services, care coordination, case management, direct patient care. The revenue covers losses for patients who utilize sliding-fee services, provide supports such as transportation, food assistance, and other enabling services not traditionally reimbursable. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire and estimated additional 3.5 to 6 FTE across pharmacy, finance, and compliance. We estimate the cost to hire additional staff to be ongoing additional costs of $480,000 to $1,210,000. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We anticipate additional External Vendor Costs will be required to meet compliance requirements before a single rebate is ever received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial 4 risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Apicha CHC helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, we would be forced to scale back essential services such as care coordination; behavioral health services; dental services; and enabling services like food assistance. Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours, which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of-pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs 5 like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 6 Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Apicha CHC strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact Glenn D. Magpantay, Apicha CHCs Senior Director of External Affairs at gmagpantay@apicha.org or 347-949-0570. Sincerely, Therese R. Rodriguez Chief Executive Officer Apicha Community Health Center
HRSA-2026-0001-2276Apicha Community Health Center2026-04-20T04:00Z19,325 chars
Apicha CHC strongly urges HRSA to not implement a mandatory rebate model for any 340B covered entities. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. See attached file with detailed comments 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Apicha Community Health Center we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Apicha Community Health Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Apicha Community Health Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Apicha Community Health Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug 400 Broadway / New York, NY 10013 o 212 334 6029 / f 212 334 7957 apicha.org 2 companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Apicha Community Health Center can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program are exponential. Any rebate program would require Apicha Community Health Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Apicha Community Health Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B Entity. This is also far and beyond what we are experiencing now. One Time: $385,000 - $935,000 IT Build & System Configuration: 340B system redesign, rebate tracking logic, claim flagging for 25 drugs. o Estimated hours: 800-1,200 o Costs: $150,000-$300,000 TPA Implementation Fees: New data feeds, rebate-specific configurations, contract pharmacy alignment. o Costs: $25,000-$100,000 EHR/Pharmacy System Modifications: Charge capture, NDC-level tracking, accumulator adjustments o Estimated hours: 200-400 o Costs: $50,000-$120,000 Policy & SOP Development: Rebate workflows, compliance protocols, denial management o Estimated hours: 100-200 o Costs: $15,000-$40,000 Legal & Compliance Review: Contracting, regulatory interpretation, audit preparation o Estimated hours: 150-300 o Costs: $20,000-$50,000 Staff Training: Pharmacy, finance, compliance, IT o Estimated hours: 150-300 o Costs: $20,000-$50,000 3 External Consulting: Advisory support for implementation strategies o Costs: $50,000-$150,000 Ongoing (annual): $480,000-$1,210,000 Rebate Processing & Reconciliation: Tracking claims, invoicing manufacturers, matching payments o Estimated FTE: 1.5-3.0 o Costs: $120,000-$300,000 Denials Management: Investigating and appealing rebate denials o Estimated FTE: 1.0-2.0 o Costs: $80,000-$200,000 TPA Ongoing Fees: Incremental per-claim or per-drug fees for rebate tracking o Costs: $50,000-$125,000 IT Maintenance & Enhancements: Ongoing system updates, error correction o Estimated Hours: 200-400 o Costs: $40,000-$120,000 Compliance & Audit Support: Internal audit prep and HRSA audit readiness o Estimated FTE: 0.5-1 o Costs: $50,000-$120,000 Contract Pharmacy Administration: Increased complexity managing rebate vs discount claims o Estimated FTE: 0.5-1.5FTE o Costs: $50,000-$120,000 Finance & Revenue Cycle Impact: Cash flow tracking and delayed revenue reconciliation o Estimated FTE: 0.5-1.0 o Costs: $50,000-$120,000 Key Cost Drivers: Increased Staffing Burden manual reconciliation workload along with denial and appeals infrastructure. Estimated 3.5-6 FTE across pharmacy, finance, and compliance TPA Costs data feed development, per-claim rebate tracking, and custom reporting modules. Estimated $50,000-$150,000 IT system adjustments to move away from upfront discounts to rebates. Created high risk of data mismatches, payment delays, and revenue leakage. 4 Denials & Dispute Resolution unlike upfront discounts, rebate will introduce disputes with manufacturers at an estimated 5-15%. The appeals process is labor intensive and slow, requiring FTEs to be directed away from supporting patient care. Cash Flow Impacts shifts from immediate savings to delayed reimbursement (60+). This requires significant working capital and increased financial tracking. Staffing Impacts Under a Potential 340B Rebate Program. Apicha Community Health Center does not currently have the staff needed to comply with a Rebate Program. Additional time to complete required activities would total 140-240 hours per week, equivalent to 3.5 to 6 FTE. These would be net new full-time employees as well as relocation of existing staff time including diverting clinical resources away from patient care. Because existing pharmacy staff and revenue cycle teams are already operating at capacity, pharmacists would need to spend time reviewing rebate eligibility and documentation as well as assist with denial resolution and audits. Revenue cycle and finance staff would shift focus from core billing and reimbursement functions to tracking rebates and reconciliation. Pharmacy Buyers/Inventory Control (1-2 FTE): o Identify and track eligible claims across 25 drugs o Submit rebate invoices to manufacturers o Monitor payment status and reconcile discrepancies o Investigate rejected or unpaid rebates o Compile documentation for appeals o Interface with manufacturers and TPAs 340B Program Manager (1 FTE): o Maintain audits and Ensure compliance with HRSA o Oversee policy adherence and reporting IT Data Analyst (1-2 FTE): o Maintain data feeds between EHR, split-billing software, and TPA o Troubleshoot claim mismatches and system errors o Build reporting tools for rebate tracking Contracting (0.5-1 FTE) o Coordinate rebate eligibility o Manage operational complexity of mixed rebate/discount models o Ensure alignment with TPAs 5 HRSAs estimate of 5 hours per week is not realistic. While initial claim volume may be approximately 300 claims/year (growing to 2,100 claims/year by 2028), the assumption of 3 minutes per claim significantly understates the true operational effort. Each claim requires eligibility validation, data capture, rebate tracking, and often follow- up activities such as denial resolution and audit preparation. A more realistic estimate of 1015 minutes per claim results in 5075 hours/year (1.01.4 hours/week) at current volumes and 350525 hours/year (6.710.1 hours/week) at projected volumes. This exceeds HRSAs estimate when accounting for real-world administrative burden, particularly as claim volume scales and program complexity increases. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Apicha Community Health Center has designed its technological systems and operational infrastructure in relation to an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Current split- billing platforms are designed to determine 340B eligibility at the point of dispense and accumulate utilization for replenishment. New capabilities will include claim-level rebate eligibility tracking, flagging claims subject to Medicare negotiated pricing, tracking the lifecycle of the claim, and integrating with manufacturer rebate submission portals or intermediaries. These new capabilities would require a new module or outside solution that would help to track and reconcile payments, manage denials and appeals, and generate rebate invoices. This is on top of the EHR and Pharmacy System modifications that would include updates to HL7 interface development, batch file creation and validation, and exception handling. Lastly, to support the reporting requirements there needs to be enhanced infrastructure for data warehouses as well as compliance and auditing teams. On the Medical claims side, there are also significant barriers to aligning with a potential 340B Rebate Program. This includes a lack of direct data feed from TPA to real-time medical claims data within the EHR, accurate linkage between required data elements, manual data extraction, data lag and timing issues, and significant quality and reconciliation challenges. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. A 340B Rebate Program would fundamentally change data requirements, requiring both one-time system redesign and ongoing operational changes. One-time changes would include the redesign of data architecture, development of new interfaces 6 between EHR and TPAs, and created on new data validation rules. Ongoing changes would include the continuous extraction and submission of the claims-level data as well as reconciliation. Due to the lack of direct integration, data must be extracted, matched using non-standard identifiers, transformed into submission-ready formats, reviewed for completeness and accuracy, and reconciled post-submission. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Apicha Community Health Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. This estimated cash flow impact by our institution utilizing a time value of money at 4% and a 30 day turnaround time (sitting, data processing, rebate waiting) came to an estimated $240,000 before accounting for any potential denied claims. When considering claims denied at a modest 5%, we estimate the true cost to fall between $7,000,000 and $10,000,000 for the institution. This is true lost savings that cannot be allocated to support direct patient services. While the above is significant on its own, this also does not include the substantial impact of cash flow. Fronting all claims at WAC will drastically decrease available working capital which creates liquidity strain and increased exposure to revenue cycle variability and manufacturer payment delays. Most health systems are not structured to absorb this level of cash flow disruption without impact when we are running on operating margins often between 1-3%. Redirecting this liquidity to float drug manufacturers puts payroll, capital projects, and debt service obligation at risk. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Tarrant County Hospital District will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The incremental administrative, IT, and staffing costs associated with a 340B Rebate Model, combined with cash flow disruption and revenue uncertainty, would materially reduce the financial benefit of the 340B Program and directly impact our ability to provide care. This diverts resources from patients to administrative and financing costs. 7 Apicha Community Health Center serves a predominantly underserved population where we address health disparities, provide services to vulnerable populations, and improve health outcomes. We provide these services regardless of the patients ability to pay and we directly pass on 340B savings to our patients at point-of-sale (POS) to reduce copayment. With the 340B Rebate Program, we cannot guarantee 340B savings at POS and are not able to pass on these savings to the patient. This impacts our patients at every pharmacy visit and is in opposition to the intent of the program. For many of these patients we are one of the few or only providers who can provide specialized services and any reduction in services would create access gaps, increased travel burden, and potentially delayed or forgone care. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Apicha Community Health Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. This included the system not allowing dashes, changing uninsured patients to CASH, aligning unit of measures with ambulatory dispensing, shifting data requirements, and constant changes to the Welcome Packet which was undergoing significant changes even less than 30 days before the intended January 1st go-live. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 8 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Health Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Apicha Community Health Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Tarrant County Hospital District and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Mihaela Mihai Chief Operations Officer Apicha Community Health Center
HRSA-2026-0001-2277Kiamichi Family Medical Center2026-04-20T04:00Z48,572 chars
Thank you for the opportunity to comment on the 340B Rebate Model Pilot. Please find Kiamichi Family Medical Center's response attached. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Kiamichi Family Medical Center (KFMC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: KFMC reports an average loss of $1,076,530 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. KFMC is one of these rural health centers. All four sites are in rural towns. Battiest is unincorporated and located in a sparsely populated area. Physical addresses for this area use Broken Bows zip code. Broken Bow is located 40 miles south of Battiest. Battiest Independent School District has less than 250 students enrolled in pre-kindergarten through 12th grade. Broken Bow is located between Battiest and Idabel. The population was 4,228 at the 2020 census. Idabel is the county seat of McCurtain County. The population was 6,961 at the 2 2020 census. Finally, Hugo is the county seat of Choctaw County. As of the 2020 census, the population was 5,166. Kiamichi Family Medical Center (KFMC) is a rural health center that relies entirely on contract pharmacy arrangements with locally owned pharmacies to operate its 340B program. The only other pharmacies in the service area belong to Walmart in Idabel, Broken Bow and Hugo. With a total annual operating budget of just $11 million, KFMC projects that the proposed 340B Rebate Model would require an additional $4.3 million in upfront drug spending beginning in 2027nearly 40 percent of the organizations entire annual budget. For a small rural safety-net provider, this increase is overwhelming and simply not absorbable. This proposal creates an immediate and severe cash-flow crisis that threatens the financial stability of the health center and the continuity of care for our patients. Approximately 50 percent of KFMCs 340B prescriptions are cash-pay claims for patients who qualify for sliding fee discounts. These are patients with the fewest resources and the greatest barriers to care. Today, patients with household incomes below 200 percent of the federal poverty level are charged only the 340B drug acquisition cost plus a dispensing feeoften the only way they can afford their medications at all. The rebate model dismantles the financial foundation that makes this access possible. Requiring KFMC to pay full drug costs upfront while waiting for manufacturer rebates introduces delays and uncertainty that a RURAL health center of our size cannot withstand. Without reliable and immediate access to 340B pricing, KFMC may be forced to reconsider or reduce discounted medication pricing for the patients who rely on it most. For many of our patients, losing access to affordable medications is not an inconvenience it is a matter of whether they fill a prescription, manage a chronic condition, or delay treatment altogether. The proposed rebate model places RURAL providers like KFMC at risk of being unable to fulfill the mission of the 340B program: to stretch scarce resources and serve vulnerable populations. As proposed, this model threatens patient access, destabilizes RURAL health centers, and undermines the very communities the 340B program was designed to protect. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 3 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Kiamichi Family Medical Center in particular, this means it will impact: Number of 340B transactions/ how many patients does your CHC serve KFMC served 7,168 patients and had 40,726 scripts Current admin costs for your 340B program $125,000 How do you use your 340B revenue specifically? Kiamichi Family Medical Center (KFMC) uses its 340B savings precisely as Congress and HRSA intended: to stretch scarce federal resources as far as possible, enabling the health center to reach more eligible patients and provide deeply discounted prescriptions to uninsured and underinsured patients as well as more comprehensive services. For KFMC, 340B savings are not ancillary revenuethey are a core mechanism that allows the organization to fulfill its mission as a rural safety-net provider serving medically underserved communities. Consistent with HRSAs guidance, KFMC reinvests 340B savings directly into patient care by providing free or deeply discounted medications to uninsured and underinsured patients, expanding access to primary care, behavioral health, and dental services, and offsetting the substantial costs of uncompensated care. These savings also support efforts to extend clinic hours, expand access to care through additional clinical locations, and improve patient navigation, care coordination, and transportationeach of which directly addresses barriers to access faced by vulnerable populations in rural areas. A clear example of this statutory intent in action is KFMCs decision to open a clinic site in Broken Bow without New Access Point funding. Although the town was already within KFMCs designated service area, residents lacked meaningful access to comprehensive primary care. The Broken Bow site is now the only primary care clinic in the community that employs a physician, filling a critical gap in access that would not have been addressed without the financial flexibility provided by 340B savings. This investment directly reflects the programs purpose: using limited resources to expand access to high-quality care where it would not otherwise exist. KFMC also uses 340B savings to address non-medical barriers that routinely prevent patients from accessing care, an approach recognized by HRSA as essential to improving health outcomes. In response to the absence of public transportation across our rural service area, KFMC established a transportation voucher program for patients who qualify for the sliding fee discount. Through partnerships with local fuel stations in each of the four communities where KFMC operates, eligible patients receive gas vouchers following their appointments. This support often determines whether patients can attend follow-up visits, adhere to treatment plans, or obtain necessary medications. 4 These programs exemplify the core purpose of the 340B statute: to ensure that covered entities can reinvest savings to expand access, improve services, and stabilize care delivery for underserved populations. Any disruption to 340B savingssuch as the cash flow uncertainty introduced by the proposed rebate modelputs these investments at immediate risk. For KFMC, reduced 340B flexibility would not result in administrative inconvenience; it would directly undermine patient access, threaten service sustainability, and weaken the ability of a rural health center to carry out the mission HRSA has charged it to fulfill. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 5 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 6 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Kiamichi Family Medical Center provided $250,679 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Kiamichi Family Medical Center anticipates needing 1.50 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Kiamichi Family Medical Center anticipates an increase of $115,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 7 Internal NACHC assessment (99 responses). 7 KFMC is expecting to add 1.5 additional FTEs to meet the need of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. KFMC is estimating the cost of additional staff and upfront purchasing of drugs to be approximately $4 million. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Kiamichi Family Medical Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 7,168 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $15,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 12 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 12 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the 8 Ibid. 8 administrative headache. In our region, this would leave patients in McCurtain and Choctaw counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Patients with household incomes below 200 percent of the federal poverty level are charged only the 340B drug acquisition cost plus a dispensing fee. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $3,335,466 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $92,833 to purchase these same drugs at the 340B ceiling price. This represents a 3,493% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Kiamichi Family Medical Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as the travel voucher program. Operating Hours: We anticipate needing to reduce our clinic hours by 4 per week, specifically impacting our evening hours, which are the only times our working-class patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured and underinsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Kiamichi Family Medical Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 12 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Kiamichi Family Medical Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $645,270.86. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Kiamichi Family Medical Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $270,219. Monthly costs are forecasted to increase by $355,439 in 2027 and $376,547 in 2028 when the additional drugs are added. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Kiamichi Family Medical Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Kiamichi Family Medical Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 loss of almost $650,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 14 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 15 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Kiamichi Family Medical Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. KFMC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Kiamichi Family Medical Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please feel free to contact me at agilbreath@kiamichimed.org Sincerely, Amy Gilbreath, CEO Kiamichi Family Medical Center
HRSA-2026-0001-2278Alliance for Positive Change2026-04-20T04:00Z11,073 chars
See attached file(s) 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Alliance for Positive Change Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Alliance for Positive Change appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. As a Ryan White grantee 340B provider, we are deeply concerned about the proposed Rebate Model Pilot. We do not own an in-house pharmacy, so we rely on contract pharmacies to participate in the 340B program and reinvest all savings into supportive services for our program participants. As such, we do not have a dedicated team/FTE to take on the additional administrative burden of a Rebate Model Pilot. A Rebate Model Pilot will reduce our 340B savings we can reinvest to serve the people who need it most. As a nonprofit, community-based organization primarily funded through restricted government grants, we are also concerned with the cashflow constraints that would be caused by a Rebate Model Pilot. Alliance for Positive Change is a leading multiservice organization providing low-income New Yorkers living with HIV and other chronic conditions access to quality health care, housing, behavioral health, coaching, and training and job placement programs that cultivate leadership and economic mobility. Alliance for Positive Change is a Ryan White program grantee and a 340B covered entity as designated by the federal HRSA through classification as a Ryan White grantee. Alliance uses the 340B benefit to ensure that low-income New Yorkers living with HIV, HCV, substance use disorder, and other chronic conditions have access to life-saving medications, adhere to medication regimens, and achieve improved health. Alliance's dedicated treatment adherence program serves over 800 low-income New Yorkers living with HIV each year, and we provide counseling, support groups, direct observation therapy (DOT), navigation to medical care, and other support services for over 5,000 program participants. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B 2 clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White grantees like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, behavioral health, and housing assistance. Importantly, the 340B program allows Ryan White grantees to provide expanded services without any cost to taxpayers. The 340B program enables Ryan White grantees to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to support existing program participants and to identify additional people in need of care. We rely on upfront 340B discounts to provide care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and substance use disorder. For Ryan White grantees like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. Alliance for Positive Change reinvests all 340B savings into programming for the people we serve, including a dedicated treatment adherence program that helps people access low-cost and no-cost medications, treatment adherence support to ensure they are taking their medications, and supportive services to ensure their commitment to their healthcare appointments and regime. The Rebate Model Pilot is likely to reduce the 340B benefit to Alliance for Positive Change programs, which would be passed down to the patients, limiting their access to no-cost medications and supportive services. 3 Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. As a nonprofit, community-based organization, Alliance for Positive Change is only able to participate in the 340B program by using upfront savings to fund ongoing program costs and would not be able to fund invoices while waiting for a rebate. The majority of our funding is through restricted government grants, so we do not have unrestricted cash flow to fund program costs. State the average number of calendar days within which your organization typically remits payment under these contracts. 30 days Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. A rebate-based payment model would alter payment timing compared to current arrangements and our current contracts would not allow for a delay in payment beyond the negotiated remittance timing. Implementation and Administrative Burden For the last 30 years, covered entities and their vendors partners have developed sophisticated technologies and workflows to manage the complexities of 340B compliance and operations. These carefully crafted systems have been built on the premise that entities receive 340B ceiling prices as upfront discounts. Converting 340B into a rebate program completely upends these systems, poses substantial implementation and management costs, and does nothing to improve 340B compliance or operations. Covered entities will have to make significant upfront and ongoing financial investments in technology, staff, and redesigning workflows to accommodate a rebate program. Worst of all, these investments will diminish covered entities ability to care for their patients. Neutral Clearinghouse as an Alternative Instead of proceeding with a Rebate Model Pilot, we ask that HRSA work with CMS to develop a neutral clearinghouse run by the federal government or a government contractor, to which covered entities, third-party administrators, and/or contract pharmacies retrospectively submit 340B claims data to prevent 340B-MFP duplicate discounts. A 340B clearinghouse model represents the ideal solution for all stakeholders covered entities, contract pharmacies, manufacturers, and the government by providing an efficient and coordinated framework that streamlines and enhances compliance, data exchange, and program integrity. The clearinghouse would match the 340B claims data with patient encounter data to identify and remove those claims from information shared with manufacturers for payment of MFP rebates to 4 providers. Manufacturers would only pay rebates on non-340B claims, thereby preventing duplicate discounts. This approach is not without precedent. CMS already plans to test a clearinghouse-like model that the agency is calling a 340B repository to prevent 340B-Medicare Part D inflation rebate duplicate discounts. A clearinghouse approach could also be used to prevent 340B-Medicaid rebate duplicate discounts. In our experience, submitting 340B claims data to manufacturers or their vendors has been a nightmare full of problems and challenges, which is why we need a neutral clearinghouse run by the federal government or a contractor. Manufacturers contract pharmacy restrictions have impacted our program, as we need dedicated FTE and staff time to comply with 340B claims data submissions and respond to changing eligibility and contract pharmacy restrictions. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Brooke Montes, CSAO, (212) 645-0875, x303. Sincerely, Brooke Montes Chief Strategy & Advancement Officer Alliance for Positive Change
HRSA-2026-0001-2279Tida Watkins · Reno, NV, USA, NV, United States2026-04-20T04:00Z19,859 chars
See attached file(s) I strongly oppose the proposed 340B Rebate Model Pilot Program because it puts patients at risk by removing the one thing they depend on most at the pharmacy counter: immediate affordability. The patients served by 340B providers are not abstractions. They are people rationing insulin, seniors choosing between heart medications and groceries, and individuals managing serious mental illness, HIV, or substance use disorder who cannot afford even short gaps in treatment. For these patients, the difference between an upfront discount and a delayed rebate is the difference between taking their medication and walking away without it. A rebate model may function on paper, but patients do not receive rebates. They encounter prices. Requiring safetynet providers to purchase medications at full price and wait for reimbursement eliminates the ability to consistently offer affordable medications at the point of care. This change will lead to delayed treatment, skipped doses, declining adherence, and preventable hospitalizationsoutcomes that directly contradict the purpose of the 340B program. The current 340B structure works because it aligns financial mechanics with patient need. It provides immediate access to essential medications and allows providers to reinvest savings into care for people who have nowhere else to turn. Replacing that structure with a rebate model threatens access, destabilizes providers, and harms the very patients Congress intended the program to protect. I urge HRSA to abandon the 340B Rebate Model Pilot Program and preserve the upfront discount that ensures medications are affordable when patients need themat the moment they are prescribed. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Northern Nevada HOPES, thank you for extending the deadline to respond to the Request for Information on the proposed 340B Rebate Model Pilot Program. We appreciate the opportunity to share not only data and projections, but the very real consequences this proposal would have on the patients and communities we serve every day. For our organization, the 340B program is not an abstract financing mechanismit is a lifeline. It is the reason our patients can afford insulin, heart medications, behavioral health treatments, and life-sustaining therapies that would otherwise be out of reach. It allows us to keep our doors open in communities where access to care is already fragile. It allows parents to pick up medications without choosing between rent and refills. It allows our clinicians to practice medicine guided by what is best for the patient, not what is cheapest that day. The proposed shift from an upfront discount to a retrospective rebate model threatens that foundation. By transferring financial risk from manufacturers to the very safety-net providers Congress intended to protect, this model places our organizationand thousands like usin an untenable position. The rebate model does not simply change how drugs are paid for; it fundamentally destabilizes how Community Health Centers operate and how patients access care. A rebate model breaks this system. It forces safety-net providers to front full Wholesale Acquisition Cost pricesoften hundreds of percent higher than 340Bwhile waiting weeks or months for reimbursement that may be delayed, denied, or disputed. For organizations operating on razor-thin margins, this is not a cash-flow inconvenience; it is an existential threat. The mission of Northern Nevada HOPES is to provide affordable, high-quality medical, behavioral health, and support services for ALL. Northern Nevada HOPES is a nonprofit, federally qualified health center (FQHC) and Ryan White HIV/AIDS Program provider serving patients throughout the RenoSparks region and surrounding communities. HOPES delivers comprehensive, integrated careincluding primary care, behavioral health, substance use treatment, infectious disease services, and pharmacy servicesto individuals who face significant medical, social, and economic barriers to care. HOPES serves a largely low-income, uninsured, and underinsured patient population, many of whom are living with chronic conditions such as diabetes, cardiovascular disease, mental illness, substance use disorders, and HIV. Through its in-house pharmacy and participation in the 340B Drug Pricing Program, HOPES is able to make essential medications affordable, support sliding-fee discounts, and reinvest savings directly into patient care, care coordination, and access-expanding services. Consistent with the Health Center Program mission, Northern Nevada HOPES is committed to ensuring access to high-quality, affordable healthcare for medically underserved communities, regardless of a patients ability to pay. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. For more than three decades, the 340B Drug Pricing Program has worked as Congress intended: allowing covered entities to stretch scarce federal resources to serve more patients with deeper needs. At Northern Nevada HOPES, 340B savings are reinvested directly into patient caresupporting sliding-fee discounts, expanding pharmacy access, funding outreach, and sustaining programs that do not generate revenue but are essential to community health. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety- net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact: What This Means at the Pharmacy Counter The most troubling aspect of the proposed 340B Rebate Model Pilot is its direct impact on patients. Our patients are not theoretical. They are seniors on fixed incomes managing atrial fibrillation. They are people with diabetes rationing insulin. They are individuals living with serious mental illness who rely on consistent access to medication to remain stable, employed, and housed. Many have no other pharmacy within miles. Many are uninsured or underinsured. For them, affordability is not a preferenceit determines whether treatment happens at all. Under a rebate model, we would be required to purchase medications at full price and wait for reimbursement after the medication has already been dispensed. At the moment a patient stands at our pharmacy counter, the 340B price would no longer exist in our system. That means we could no longer reliably offer the deep, immediate discounts patients depend on. In practice, this would place lifesaving medications out of reach for the very patients Congress intended 340B to protect. The consequences are predictable and devastating: Patients will delay care or skip doses because prices are suddenly unaffordable. Providers will be forced to switch stable patients to less effective or riskier alternatives based solely on cost. Medication adherence will decline, leading to avoidable hospitalizations, increased emergency department utilization, and worse long-term outcomes. These are not hypothetical risks. We have already seen how even short disruptions in access to medications like anticoagulants, SGLT2 inhibitors, insulin, and antipsychotics can result in strokes, heart failure exacerbations, psychiatric decompensation, and preventable deaths. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. For example, many of our patients rely on direct oral anticoagulants such as Eliquis or Xarelto to prevent stroke and blood clots. These medications are not optional. Without the upfront 340B discount, we would be forced to either deny access or significantly raise pricesplacing patients at immediate risk. For someone living paycheck to paycheck, even a single week without therapy can have permanent consequences. Similarly, patients with Type 2 diabetes, chronic kidney disease, and heart failure depend on medications like Jardiance and Farxiga. Removing affordable access does not simply worsen lab valuesit 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. accelerates disease progression and increases mortality. These are the patients we see hospitalized when access breaks down. These are the hospitalizations that could have been prevented. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,2 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. Sliding Fee Discount: 61% of our patients living at or below 200% of the Federal Poverty Level were provided discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. 2 2025 UDA Data, HRSA (hrsa.gov) Staffing Impact: Northern Nevada HOPES anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Northern Nevada HOPES anticipates an increase of $300,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Northern Nevada HOPES currently partners with 75 contract pharmacies (CVS, Walgreens, Walmart, and OptumRx ) to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Washoe County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,3 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.4 IV. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price 3 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 4 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. Based on our organizations data, we estimate it would cost $3,000,000 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $12,000 annually to purchase these same drugs at the 340B ceiling price. This represents a 99.6% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Northern Nevada HOPES anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non- revenue-generating but essential services, including free mail-order and delivery pharmacy services that many of our patients rely on for medication access. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund behavioral therapists and MAT services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents thousands of uninsured patients from rationing their insulin or heart medication. Conclusion The proposed 340B Rebate Model Pilot would not modernize the program or improve oversightit would shift financial and administrative risk onto safety-net providers who are least equipped to absorb it, while directly harming patient access to essential medications. Northern Nevada HOPES urge HRSA to exempt Community Health Centers from the rebate model and preserve the upfront 340B discount structure that has worked for decades. Protecting the financial stability of CHCs is not about operational convenienceit is about protecting patient lives, community trust, and the nations healthcare safety net. Thank you for the opportunity to share our perspective and our experience. We welcome continued dialogue and stand ready to work collaboratively toward solutions that improve program integrity without placing patients at risk. If you have any questions, please do not hesitate to reach out. Sincerely, Tida Watkins, Pharm.D. Director of Pharmacy Northern Nevada HOPES twatkins@nnhopes.org 775-348-1306
HRSA-2026-0001-2280Black Women's Health Imperative2026-04-20T04:00Z3,785 chars
Please see the attached comment submitted for BWHI.org April 20, 2026 The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 United States Re: Request for Information: 340B Rebate Model Pilot Program (FR Doc. 2026-03042) To Whom it May Concern, On behalf of the Black Women's Health Imperative, we write in support of the Health Resources and Services Administrations (HRSA) proposed rebate model. As a nonprofit organization dedicated to advancing the health and wellness of Black women and girls, we are deeply concerned by the unjust misuse and commodification by hospital systems and covered entities' benefiting off of 340B resources- which has dire consequences to patient care access, particularly for those who are underinsured. We believe this rebate model is a meaningful first step toward introducing the accountability and transparency necessary to restore the 340B program to its original purpose. The 340B program was originally established to protect safety-net hospitals and the low-income communities they serve from high healthcare costs. Over time, however, it has been co-opted by covered entities that leverage drug discounts for margin profit rather than patient benefit. As it stands, Disproportionate Share Hospitals (DSHs) and other covered entities are not required to reinvest savings into the patients and communities they serve. In 2024, DSHs accounted for $64.1 billion in 340B purchases, yet there are no requirements governing how the savings from those purchases are allocated. Additionally, many covered entities are able to obtain duplicate discounts between the 340B program and Medicare's Maximum Fair Price. This issue will be further exacerbated with the implementation of the Inflation Reduction Act, which allows these hospitals to capture even greater discounts without passing the benefits on to patients. BWHI.ORG 384 Northyards Blvd NW, Bldg 100, Atlanta, GA 30313 We have significant concerns with the program abuse in 340B. Loopholes in the program are enabling hospital systems to generate substantial profits without meaningfully serving the patient communities that qualify them for participation. The majority of these communities are low-income or minority populations with high rates of un- and underinsurance, communities that depend on accessible resources the program is currently failing to deliver. HRSA's proposed rebate model would be a meaningful step toward substantive reform. We support the inclusion of the 25 drugs that would be included in the pilot (IPAY 2026 and 2027 drugs, found here). This narrow scope of drugs is a good first step to testing how a rebate program could add more transparency to the 340B program. Strengthening data collection and reporting requirements provides much needed program guardrails. This rebate model reflects thoughtful, targeted reform and is designed to minimize disruption for safety-net providers. We look forward to learning the results of a pilot program that provides more transparency to the program while allowing all providers in the program to continue serving the low-income and underserved populations. BWHI respectfully urges HRSA to implement the 340B rebate model, introduce the transparency this program demands, and take decisive action to protect patients from abuse, ensuring the 340B program fulfills the purpose for which it was created. Thank you for your consideration. We welcome the opportunity to discuss this issue further. Sincerely, Black Womens Health Imperative Ifeoma C. Udoh, PhD Executive VP: Policy, Advocacy and Science The Black Women's Health Imperative iudoh@bwhi.org BWHI.ORG 384 Northyards Blvd NW, Bldg 100, Atlanta, GA 30313
HRSA-2026-0001-2281Vivent Health2026-04-20T04:00Z22,185 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Director Britton: Vivent Health appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) in response to the issued Request for Information: 340B Rebate Model Pilot Program: 2026-03042 (91 FR 7287). We are especially grateful for this opportunity given the significant, detrimental impact such a fundamental change would have on the operation and success of the 340B Drug Pricing Program (340B Program) for our patients. About Vivent Health Vivent Health is one of the largest providers of HIV prevention, care and treatment services in the United States. Our mission is to end HIV/AIDS by providing integrated, personalized, judgement-free healthcare, social services and effective prevention strategies. While we are a multi-state operation delivering services in Colorado, Illinois, Michigan, Missouri, Texas and Wisconsin, our approach is community-driven and grounded in the belief that everyone deserves to live their healthiest life. Today, Vivent Health is at the forefront of HIV care and treatment and is committed to delivering excellence in care and prevention by using the latest and most effective treatment regimens to help people achieve viral suppression, stay undetectable, and reduce their risk of HIV acquisition. Today, more than 93% of Vivent Health patients living with HIV are achieving viral suppression, the optimal health outcome for someone living with HIV. Make no mistake, our ability to provide high-quality, effective healthcare to more than 18,000 people living with or vulnerable to HIV is predicated on our ability to participate in the 340B Program. In fact, given relatively level federal funding levels for HIV prevention, care and treatment programs such as the Ryan White Program and CDC HIV prevention services; changing health insurance coverage rates and AIDS Drug Assistance Program eligibility for low-income individuals; and the expiration of ACA Premium Tax Credits which is increasing costs for health insurance for many people living with HIV, the 340B program remains a critical and stable contributor to our financial sustainability. Given the complexities of the 340B Program, its importance to our financial health, the participation of the program by our partners in the pharmaceutical industry and its Congressionally-mandated and HRSA-recognized role in supporting healthcare providers as we stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services,1 we take seriously 340B Program compliance. To date, Vivent Health has never been the subject of a manufacturer claim of duplicate discounts, and we have an exemplary track record of clean, recurring 340B audits that we conduct utilizing an independent, third-party auditor. Vivent Health Opposes the Implementation of a Rebate Model for the 340B Program Vivent Health opposes the implementation of a rebate model in the 340B Program based on statutory and programmatic grounds. With all due respect, the 340B statute does not give permission to HRSA to implement a rebate model, or any other retrospective payment method. According to the Code of Federal Regulations, Section 340B of the Public Health Services Act instructs the Secretary of Health and Human Services to enter into agreements with manufacturers of covered outpatient drugs under which the amount to be paid to manufacturers by certain statutorily-define covered entities does not exceed the 340B ceiling price.2 The very nature of a rebate model requires that covered entities pay more than the 340B ceiling price in return for the opportunity to claim a rebate on covered and eligible outpatient medications. Had Congress intended the 340B program to function as a rebate model when it created the program in 1992, it would have explicitly done so given it had just created the Medicaid Drug Rebate Program via the Omnibus Budget Reconciliation Act in 1990. In addition to the questionable legal standing of a 340B Program rebate model, there are significant and detrimental operational, programmatic and financial implications for 340B grantee covered entities under such a model, especially for entities that provide care and treatment to people living with and vulnerable to HIV such as Vivent Health. A 340B Program rebate model necessitates that Vivent Health will experience a significant increase in our pharmaceutical acquisition costs. This will occur as not only the price Vivent Health pays for medications for our patients will increase, but also because Vivent Health will have to significantly increase the quantity of medications it purchases to mitigate the impact of delayed or denied 340B rebate claims. Even as Vivent Health is considered a large and successful Ryan White Clinic/AIDS Services Organization, these significant increases in costs will mean these funds are unavailable to invest in patient healthcare and social services and instead will be spent on higher medication costs, higher contracted payments to wholesalers, and the need to access expensive lines of credit to meet payroll, drug purchasing and other operational costs. In addition to the cost increases mentioned above, Vivent Health will also incur significant new administrative costs associated with a rebate model. Combined, these costs inherently mean that there will be fewer financial resources available to invest in patient care and treatment. Ultimately, the outcome of a 340B Program rebate model will mean financial resources that could be going into patient care will be redirected to for-profit vendors, creditors, and manufacturers instead of into patient care and treatment as envisioned by Congress when the 340B Program was created. It is important to also recognize the proposal to create a 340B Program Rebate Model comes at a time when Vivent Health and other similarly situated HIV/AIDS clinics are facing incredible uncertainty as we work to meet HRSAs targets to end the HIV epidemic by 2030. Today, Vivent Health is facing significant challenges, including: the Medicare Transaction Facilitator, resulting in significant unpaid claims; the questionable prospect of using the 340B Programs Administrative Dispute Resolution (ADR) process which was not only delayed for years, but to date has only resolved a small subset of claims submitted by either manufacturers or covered entities; manufacturers setting their own payment and participation guidelines that run afoul of 340B Program regulations; and recent changes in the coverage of Pre- Exposure Prophylaxis (PrEP) by Medicare (now covered under Medicare Part D instead of Part B). It is the view of Vivent Health that a 340B Program Rebate Model is a solution in search of a problem. Further, it is a solution created by manufacturers that will create considerable harm to safety-net covered entities like Vivent Health. One need look no further than recent efforts by manufacturers that have unilaterally implemented contract pharmacy restrictions and rebate models that require the use of clearinghouses that can collect, package and sell data to third parties. This data can then be used by health insurance companies and their Pharmacy Benefit Managers (PBMs) to capture 340B Program savings as their own through discriminatory reimbursement methodologies, further reducing financial resources to support healthcare for some of the most vulnerable patients and communities we serve. Below, please find detailed responses to the questions posed to covered entities as a part of the 340B Rebate Model Pilot Program RFI: Impact on Patient Access In addition to the specific impact on patient access to medications outlined in the below table, there is a critical patient privacy aspect to the proposed rebate due to the use of the third-party vendor, Beacon for facilitating the rebate model. The loss of these protections for patients creates a significant disincentive for engaging in care and erodes their privacy concerning a personal and often stigmatized health condition. The Beacon platforms terms of service raise serious concerns regarding data ownership, control, and potential commercialization. Specifically, the terms permit the sale, sharing, or secondary use of transaction-level data. Covered entities are stewards of highly sensitive patient and prescribing information. This is especially true at Vivent Health where, given our role as an HIV care and treatment provider, patient data is connected to a specific diagnosis: HIV. Even when data is de-identified, aggregation and commercialization introduce ethical, legal, and reputational risks. The potential for third-party monetization of 340B-related data undermines trust and may conflict with organizational data governance policies, state privacy laws, and patient expectations. Participation in a federally endorsed pilot should not require covered entities to relinquish control over their data or accept ambiguous terms that enable downstream commercial exploitation. Furthermore, the mandate to use the Beacon platform constitutes an uncompensated taking of a high-value digital asset. Specialty HIV pharmacy claims command a market premium of $75$150 per record. Forcing 87,000 records through a proprietary platform with "commercial data rights" language effectively transfers $6.5M $13.0M in value from a safety-net provider to a private vendor without compensation. The required use of a private third-party platform also introduces significant legal risks for HIV care providers. In several states in which Vivent Health operates there are confidentiality protections established in state statutes. Of note: Illinois (410 ILCS 305) and Michigan (MCL 333.5131) require specific legal justifications for releasing HIV-identifying information that are not satisfied by a third-party commercial platforms standard "Terms of Use." Texas (Health & Safety Code 81.046) limits the use of HIV-related records to protected medical and public health purposes, directly conflicting with platform terms that allow for "secondary" commercial data sales. Missouri law limits re-disclosure of health data by third parties. If Beacon's terms allow them to sell "de-identified" HIV data to research firms or manufacturers (and their partners), it exceeds the "need to know" scope allowed for 340B financial validation (Mo. Rev. Stat. 191.656). Colorado law (C.R.S. 25-4-1404) maintains that all reports and records concerning HIV are confidential. Furthermore, Senate Bill 25-071 (passed March 2025) explicitly prohibits manufacturers from requiring hospitals to submit health information unless it is directly related to a claim under a federal health care program, meaning Colorado law now provides a direct shield for hospitals against manufacturer-imposed data demands. Wisconsin has one of the strictest HIV privacy laws in the country. It explicitly prohibits the disclosure of HIV test results without a signed, specific authorization that names the specific person to whom the disclosure is authorized. Liability and "Pecuniary Gain": Several states, such as Wisconsin, explicitly criminalize the disclosure of HIV data for "pecuniary gain." By mandating a platform that claims commercial rights to monetize this data, HRSA is effectively requiring health systems to facilitate a third partys profit at the risk of the provider's liability under state law. Identify any specific impacts on patients access to drugs that may occur because of a potential Rebate Model Pilot. Vivent Health anticipates significant detrimental impacts on the ability of our patients to access their medications due to a change to a rebate model for 340B. Patients will no longer be eligible to receive medications at a 340B price at the point of sale under a rebate model. Given the high rates of people living with HIV who are also low income or uninsured, this increased cost to the patient when they pick up their medications will mean many will not be able to afford their medications, effectively removing one of the intended benefits of the 340B program related to access to medications. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Specifically, the proposed rebate model represents a fundamental departure from the long-standing 340B purchasing structure by requiring covered entities to acquire drugs at wholesale acquisition cost (WAC) and wait for manufacturer rebates. This shift imposes a substantial working capital burden onto covered entities. Vivent Health estimates that the shift will cause Vivent Health to lose millions of dollars in available capital, representing up to 25% of our operating cash immediately, and up to 30% of our claims adjudications and reimbursement being lost going forward which negatively impacts our organizations sustainability. This shift would decimate many of our services as these dollars are currently used to support essential patient care activities, including uncompensated care, care coordination, and clinical programs. Redirecting scarce capital to temporarily subsidize non-guaranteed and unproven manufacturer payments under this new model introduces significant financial risk and would likely mean reductions in service and/or reliance on external financing that would come with interest and risk. Based on our analysis, and our experience with the ten medications currently listed in the MTF, Vivent Health reasonably estimates that 20% of the 18,000 patients we serve would be at risk of losing access to some or all their care. This is because monthly 340B savings directly fund our patient programs. The allowable lag in recouping rebates under the proposed model will also likely force an immediate reduction in staffing and services, impacting the health of approximately 3,600 people. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. The rebate model proposed will negatively impact our cash flow by significantly increasing our medication acquisition costs. The significant increases in our costs will also mean our pharmacies will keep less medication in our inventory. Vivent Health estimates that across our nine pharmacies, we will experience a multi-million-dollar negative impact on our cash flow per month purchasing medications at WAC as opposed to 340B prices. Also, using our experience with the Medicare Transaction Facilitator (MTF) as a test case, we are skeptical that a rebate program would work any differently. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Under our current terms with our wholesaler, any payments made after their due date will incur a two percent (2%) (or the maximum allowed by law, if lower) increase in the price of the merchandise. A one percent (1%) service charge (or the maximum allowed by law, if lower) will be imposed semi-monthly on all balances delinquent more than fifteen (15) days. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Vivent Health can earn a prompt payment incentive under the terms of our wholesaler contracts. Should we lose the ability to meet the terms of our prompt payment incentive, Vivent Health would incur an increase in the cost of our medications. State the average number of calendar days within which your organization typically remits payment under these contracts. Vivent Health remits payments to our wholesalers the next business day after we receive invoices from them. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Vivent Health would significantly alter our payment timing under our current wholesaler arrangements. Without known reimbursement from manufacturers, we would not be able to pay our wholesalers until we have received the rebate. Given the allotted time for manufacturers to issue decisions and payments, as well as for an appeal process for any denials, we would likely lose any prompt payment incentive and risk running afoul of our contract terms with our wholesaler. Implementation and Administrative Burden Estimate the incremental and operational costs your organization would incur under a Rebate Model Pilot, distinguishing between one-time startup costs and ongoing costs. (These figures can be Vivent Health estimates $1.7 million in annual incremental costs related to the implementation of a rebate model. measured in terms of hours or dollars and can include administrative and operational costs related to filing rebates requests for the first 10 drugs subject to MFP.) Included in this estimate are roughly $55,000 in one-time costs, $700,000 in ongoing annual payments related to use of our line of credit for increased medication costs, and the remainder related to ongoing salary and compliance costs. Describe the methodology and assumptions used for the estimates in the preceding row. Vivent Health estimates at least 6 new full time position equivalents (FTE) to support implementation and ongoing compliance for a rebate model, including: 1.5 FTE for 340B compliance data system engineer 1 FTE for 340B compliance counsel 3 FTE for pharmacy claims billing and appeals 0.5 FTE administrative support Specify activities these incremental costs would cover (e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a Rebate Model Pilot would have on current administrative costs under the upfront 340B discount model. Under a rebate model, 100% of claims will need heightened review to ensure no claims are wrongly denied. Given we submit over 150,000 340B claims per year, we estimate adding at least: 3 highly skilled FTE for claims billing and review including processing, data collection and submission, reconciliation and auditing Comment on the impact of these incremental costs under your current operations. Every dollar Vivent Health invests in administrative and regulatory costs associated with 340B compliance are designed to ensure we operate as a fair, transparent and collaborative partner in the HIV safety net space which we believe includes patients, public funders, private insurance, public insurance programs and the pharmaceutical manufacturers. We also recognize that these investments need to be balanced with access to care for the people and communities we serve. Every dollar we invest in administrative costs is a dollar we cannot invest in patient care, medications and critical social services to help people living with and vulnerable to HIV live longer, healthier lives. Indicate whether implementation of a Rebate Model Pilot would require additional full-time employees (FTEs) or would cause current medical provider FTEs to reallocate work hours from medical care to administrative functions, being sure to quantify the impact where possible. Yes. Vivent Health would allocate additional FTEs related to administrative functions and Vivent Health medical providers would be responsible for some additional administrative functions. This is difficult to quantify, but given our experience with other changes pharmaceutical manufacturers have implemented in recent years (changes to 340B claims data requirements, contract pharmacy restrictions, and patient assistance programs), and our experience with the Medicare Transaction Facilitator (MTF) we anticipate the need to add additional staffing and allow for providers to reallocate their non- clinical/administrative time. If the answer is yes to the question in the preceding row, identify the anticipated number of additional FTEs. 6 Conclusion Vivent Health objects, entirely, to the use of a rebate model for the 340B program. Such a proposal shifts significant financial risk onto covered entities such as Vivent Health, introduces legal and privacy uncertainty, compromises data governance, conflicts with established wholesaler contracting frameworks, and significantly increases administrative burden. Collectively, these impacts undermine the statutory intent of the 340B program to help safety-net providers stretch scarce resources to better serve vulnerable patients. As always, we would be more than willing to engage in additional dialogue with HRSA, OPA and HHS to provide clarity regarding our comments. Please do not hesitate to contact Bill Keeton, Vivent Health Chief Advocacy Officer at bill.keeton@viventhealth.org with any requests. Sincerely, Bill Keeton Chief Advocacy Officer Vivent Health
HRSA-2026-0001-2282MCR Health, Incorporated2026-04-20T04:00Z115,904 chars
See attached file(s) iyMCR HEALTH April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of MCR Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. MCR Health is a leading not-for-profit healthcare system that provides high quality, compassionate care to families throughout Florida. MCR operates 27 healthcare centers and 13 pharmacies, providing a wide range of services including family practice, internal medicine, pediatrics, OB/GYN, behavioral health, vision, dental, podiatry, cardiology, general surgeiy and many other medical services. Our mission is to provide all patients including the underserved and uninsured access to quality primaiy care and preventative health education regardless of race, sex, disability, or economic status. MCR Health, Inc. is committed to delivering quality care while valuing and respecting eveiy individual's needs. MCR Health has been and will remain focused on its mission to improve health through access to quality services, a skilled health workforce, and innovative programs for all. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 101 Riverfront Blvd., Suite 710, Bradenton, FL 34205 941-776-4000 mcr.health The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B prograrn has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free rnedications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel undermines this by placing an irnmense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For MCR Health in particular, this means it will impact: 106,563 patients annually through 360,611 pharmacy transactions Current admin costs for our 340B program = $229,120 31% of our entity owned pharmacy activity is generated uninsured patients who receive a significant portion of the savings from the 340B drug discount prograni We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the inost vulnerable patients. II. Patient Impact Most irnportantly, a 340B rebate model poses a direct and serious threat to rnedication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients rnay be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human irnpact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate rnodel, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity) This patient population relies on affordable medications to manage these long-term conditions. I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi; 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. We are deeply concerned that implernenting a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolisrn, and atrial fibrillation. For many of our patients, there are rninimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the irnpact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for rnanaging their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarrning mental health crisis. Nearly one in four (23.4%) Arnericans live with a mental illness.4 Starting in 2027, the MDPNP will include sorne behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Irnpairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.111 l/jth.I5415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doilpdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.sainhsa.gov/data/data-we-collect/nsduh-national-survevdrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Arnericans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, espeeially those who are uninsured and have limited options for afforclable care. Beyond the direct impact on individual patients, the rebate rnodel threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that underrnine medication continuity. Eveiy hour that a pharmacist spends reconciling rebate clairns is an hour not spent on medication counseling. Every dollar spent on cornpliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of tiine and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. lf hnplemented without meaningful safeguards, this model will force CHCs to make irnpossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a prograrn designed to expand access to care for those who need it most. III. Adininistrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a cluplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Prograin would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharrnacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs froni the 340B Rebate Moclel Pilot because they will incur additional workforce and IT costs to coinply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating rnanufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to rnanage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of cornpliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking inodels to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of rnanufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MCR Health provided $33,290,058 in sliding fee discounts, provided through discounted medications and rnedical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCR Health anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate rnodel. External Vendor Costs: Given increased complexity, MCR Health anticipates an increase of $30,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the adrninistrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 MCR Healtli estimates that one FTE will be required to properly manage this new process. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, canying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate that additional staff will cost $75,000 per year. 7 Internal NACHC assessment (99 responses). 8 Ibid. Depending on the volume of prescriptions a pharrnacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. MCR Health will be required to report 340B rebate claims to a third-party platform, assurning all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the sarne data, thereby increasing costs and operational burdens. MCR Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elernents. Additionally, if rnanufacturers are allowed to select different soiware platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custorn dashboard modifications, and design new internal workflows. We estimate that $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that dirninish our 340B savings. Total Cost: For our CHC, which serves 106,663 patients, the total projected increase in expenses 'ncluding labor, IT, and canying costs is estimated at $170,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly custoniization to provide real-thne, accurate inforrnation at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies rnust directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently rnanage clinical pharmacy services will be forced to spend unnecessary hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutoiy 340B price. The Contract Pharmacy: Tlie Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 204 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' valying requirements across rnultiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking rnodules to us through increased per-clairn fees. Verification Latency: The rebate rnodel creates a reconciliation gap. Our staff rnust monitor clairns across 204 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Manatee/Sarasota/DeSota Counties with no affordable rnedication options. Over 17 percent of the U.S. population lives in a pharrnacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-adrninistered drugs are bundled into the prospective payinent system (PPS) billing when adrninistered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on clairns billed to payers. Simplified Records: Because CHCs maintain lirnited inventories of CADs and they are typically not separately billed on claims, it is still cornrnon for adrninistration and inventoly logs to be maintained on paper, with text documentation in patient visit notes describing what was adrninistered. While the CHCs rnaintain perpetual inventories and cornplete administrative records, the fact that the records are often paper irnposes the added burden of converting them to electronic data before submitting for rebate. Veiy few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic rnedical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software systetn. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximurn Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Patt B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically ditninish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies ] Pharmacv and Clinical Pharmacolow JAMA Network Open I JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff2024.00192?journalCode=h1thaff force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcornes. The proposed 340B Rebate IVIodel Pilot would directly impact CHCs' ability to offer patients steeply discounted niedications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a veiy unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the FIRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. MCR Health has a program for uninsured patients where they can receive prescription medications at a price not greater than $15 above cost for generics and not greater than $30 above cost for brands. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until paynients are submitted. While rebates are expected to arrive within 10 days from cornpleted data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to subrnit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharrnacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventoiy 10-12 times a year (roughly eveiy 30 days), '3 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC " HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. htips://bpbc.hrsa.gov/compliance/compliance- manu al/chapter9# footnote l 0 "https://enlivenhealth,co/blog/year-end-business-health-check-key-mctrics-every-phannacy-owner-should-review pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data subrnissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timefrarne for rebate payments; however, we have concerns about the lack of details regarding enforcernent if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, rnanufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate arnount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfiont 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B" and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate paylnent cycles. Inventory models, frequency of data submission, and rnanual processes for 14 https://340bpricing.hrsa.gov/ 15 littps://www.cms.govifiles/zip/selected-drug-list-negotiated-prices-also-known-maximunt-fair-prices-statutezip.zip referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volurne, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs rnust wait to receive a rebate payment after purchasing and d'spensing medication to the patient. This delay forces difficult decisions about allocating limited financial resouices. Based on our organization's data, we estimate it would cost $10,551,724 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,090,915 o purchase these same drugs at the 340B ceiling price. This represents a 867% increase in upfront capital required for procurernent. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MCR Health anticipates needing to reduce: Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund one pharmacy technician, Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 19,181 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at fulI WAC will potentially leacl the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into lirnited financial reserves or taking out loans, thereby defeating the purpose of the 340B prograrn. MCR Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial liinbo." This approach fundamentally defeats the purpose of the 340B prograinto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a tirne when all other major revenue sources are unstable. Another complication is that the rebate amount may not rnatch the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundarnental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are subrnitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit lirnits. Given that CHCs typically operate with extremely lirnited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirernents, CHCs are unable to disclose their exact prompt-pay discount. However, MCR Health estirnates its 2027 Annual Rebate Opportunity Cost to be approximately $1,090,915 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. MCR Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $10,551,724. This value increases o $15,955,571 for 2027 MFP impacted drugs and $22,064,831 for 2028 MFP impacted drugs. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the rnanufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate ptiblic health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $70,000 annually. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on MCR Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the countiy depend on, a. Financial Impact of Rebate Denials ancl Delays MCR Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The frarnework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate clairns based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.'6 The 16 Application Process for the 34013 Rebate Model Pilot Program, 2025-14619 (90 FR 36163) h ttp s://www. federal registe r. gor/do cu ments/2025/08/01/2025-14619/340b-program-not ice-app icat ion -p ro cess-for-the-34 Ob- rebate-model-pilot-program use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing cornpliance requirernents that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $1,051,201. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC rnission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day tiinefranie for rebate payments, the lack of enforcernent details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an hninediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are rnade whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the tirne of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan frorn safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Iv. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to coveied entities. A rebate model that relies on retrospective payment and inanufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable fmancial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a rnanufacturer can demonstrate, with claim-level documentation, a specific and perrnissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutoiy requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates rnust be paid, and the manufacturers rnust revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits." The previously proposed rebate construct and the one currently used by rnanufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead rnany covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perforrn the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care deliveiy and fails to align with the 340B prograrn's intent "to stretch scarce Federal resources as far as possible, reaching rnore eligible patients and providing more conlprehensive services."18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes dernonstrates that, even when a covered entity successfully contests a denial, payrnent is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected deternlination to prevent rnanufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncornpliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becorning a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR tirnelines are reported to take up to a year from the time of a review panel assignment. Given the time to cornplete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/defaultifiles/hrsatopaidispute-resolution-process-12-12-96.pdf " 340B House Report Legislative History. H.R. REP. 102-384(11). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable sohition to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, witli defined timelines, escalation protocols, and agency oversight. HRSA rnust clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharrnacists with the necessary subject-matter expertise to understand the cornplexities of pharrnacy software, billing, and data cornponents. Without explicit enforcement, a rebate pilot risks becoming a system of rnanufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate rnodel operate under uniforin national standards that limit manufacturer discretion, hold inanufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate clairns are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or IvIDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively nionitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fiilly compliant with the 340B progratn requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate cornpliance beyond existing statutoiy requirements, particularly where rnanufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility deterrninations. The 340B statute assigns patient definition and eligibility deternlinations to covered entities.20 Systenls or methodologies that effectively transfer this determination to nlanufacturers, whether through retrospective algorithrns, proxy indicators, or undisclosed purchase-histoiy logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial rnethodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Progran1. Since 2020, manufacturers have inlposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B clairns for MDPNP, which are in the confidential portion of the rnanufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes2i to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P I 340B Claim Indicator Pricing Claim included a 340B modifier. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsairural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/entarticles/13335320-validation-codes-and-pricing-codes-glossary P2 340B Clahn Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to deterrnine MFP refund amount. P8 Entity Identified 34013 Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 Pricing Clairn identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 340B Pharmacy Allocation V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate rnodel to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implernenting a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incrernental modifications to existing systems. In addition, auditable records for CADs are frequently rnaintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would conlpel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estinlates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic rnedical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative 22 https://public-inspection.federalregister.gov/2025-14619.pdf71753965918 23 Internal NACHC survey data workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to IvIedicare Parts B or D. Furthermore, IvIedicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-terrn applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and tlie ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanisms--particularly in a context where no discrete billing or near-terrn Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate modeI pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride thernselves on rnaintaining compliance with both the Health Center Prograrn requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related inforination annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirernents provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the prograin. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, irnplementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The adrninistrative, financial, and operational burdens frorn such a rnodel would threaten the stability of the safety-net providers that the 340B prograrn was designed to support. CHCs are not the source of rnisuse in the 340B prograrn; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally irnpossible because they rely on wholesale price files to deterrnine the acquisition cost of the drug to calculate a discounted price. In a rebate nlodel, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included rnedications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts a. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA rnaxirnum fair price (MFP) and the 340B price from the sarne unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant adrninistrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could irnplernent Medicare-only claims data subrnission to a government vendor or neutral clearinghouse withottt also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to subrnit commercial clairns data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B clairns repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that rnany covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payrnents, CAHs, and FQHCs. CMS noted that it was actively considering options for rnandatory reporting to the 340B repository in the near future and 24 5 U.S.C. 500-596; Food & Drug Adrnin., Least Burdensorne Provisions: Concept and Principles (n.d.), https://vvvvw.fda.goviregulatory-infonnation/search-fda-miidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repositoty reporting.26 If both a 340B rebate model and a 340B claims repositoiy are made mandatory, CHCs will be subject to two new adrninistrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative Histoiy demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other rnechanisrn. A mechanism that is appropriate to one type of "covered entity," such as CHCs, rnay not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretaty of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity.i27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirernent. A 340B rebate rnodel not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Prograrn and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primaty care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutoiy and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs tinder which the amount required to be paid (taking into account any rebate or discount, as provided by the 26 CY 2026 PFS, Final Rule, htlps://www.lovinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(11) Secretary)."28 That clause, however, cannot be read in a vacuurn. From this clause, HHS has contended that it rnay authorize rnanufacturer 340B rebate niodels. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of IvIFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously rnodifying the 340B statute's plain text prohibiting a manufacturer frorn charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate rnodel would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. b. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."" That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and IVIedicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers frorn Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugniaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only 28 42 U.S.C. 256b(a)(I) 29 Id. 3 42 U.S.C. 256b(a)(I) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the HHS may "develop[][rnore detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugrnakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drtig has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutoiy discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B clairns data to prevent such discounts before a covered entity elects to bill the clairn under applicable state requirements. Congress knew how to furnish such discretion to drugrnakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the subrnission of clairns data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirernent to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the nianufacturer has paid the rebate. (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii), And the Secretary of1-1HS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent dttplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement clairns form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any rnanufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirernents vaty depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid rnanaged care plan or organization ("MCO"). The billing requirernents vary further depending on whether the drugs are billed under a pharrnacy benefit or a rnedical benefit for each plan type. These requirements create a conlplex web of billing and reimbursement policies for Medicaid FFS plans, which vaiy even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is subrnitted pre-rebate at the WAC, this could result in overpaynlent, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharrnacy clairns, federal regulations require states to irnplenlent policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have irnplemented AAC-based reirnbursement for Medicaid FFS nledical claims, and some Medicaid MCOs inlplernent AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or rnedical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the clain1, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost deterrnination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal irnpossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the coveted entity believed it 36 https://medi-calrx.dhes.ca.eov/anshnedicalrx/static- assets/documents/provider/2025/12 A Claim Subtnission Requiretnents 340B Rebate Model Pilot Drues.pdf 37 C.F.R. 447.518(a). would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price clairn rnay have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid clairn. In a 340B rebate rnodel, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be rnade available through the wholesaler for drugs subject to the 340B rebate model. Phamtacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid clairn, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B prograrn and Medicaid Prograrns. A 340B rebate niodel is unduly burdensome. HI-IS 's designing of a rebate model does not require it to authorize drugrnakers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Sorne of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's deterinination of the pharrnacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing tinder a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Hurnan Services stated, "[i]f the AAC for drugs in the Pilot Prograrn is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit frorn the 340B discount and Medicaid's cost for these drugs will increase."" The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/fdes/document/ipay-2028-final- guidance.pd 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, hltps://www.regulationsgoy/comment/HRSA-2025-0001-0095. and will contribute to cash flow problems and financial instability for the impacted safety net providers."41 Furtherrnore, the 340B rebate model would create legal impossibilities under Medicaid rnanaged care for covered entities, state Medicaid agencies, and Medicaid rnanaged care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(l) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugrnakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implenient systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugniakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts tinder the 340B drug pricing program from the reports" submitted to rnanufacturers for Medicaid rebate payments. Although their policies vary, niost states require Medicaid managed care organizaions to require covered entities to identify 340B drugs when billing for such clairns. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid rnanaged care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or rnay not be later deemed to be false based on a third-party drugtnaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate inodel effectively raises the 340B price of a drug above the 34013 ceiling price, and such costs must be included in billing state Medicaid plans. This is because tlie CHC would have to float WAC pricing for each drug and incur additional administrative costs related to clairning a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify clairns as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, hUps://www.reaulations.gov/commentlliRSA-2025-0001-0980. 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultitnately was not 340B based on the manufacturer's subsequent discretionaly denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance irnpossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Adrninistrative Procedure Act and is cleatly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discowit Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification infortnation. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring rnanufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing inforrnation used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Nurnber (PCN), and Group Nutnber (GRP) to identify those FFS and managed care plans under which a manufacturer inay pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the stattitoiy obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(0(12) ofsuch Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. "44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by iinplementing the Medicaid Plan Billing Information Database. To date, the rnechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities cornply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.govicurrent/titte-42/chapter-IV/subchapter- C/oart-438/subpart-A/section-438.3 44 42 256b(a)(5)(A)(emphasis added). c. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharrnacy Benefits Prograrn, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis foi the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription ftom being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirernents. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutoiy exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a clairn as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharrnacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their faniilies. d. Commercial Duplicate Discounts The requireinent for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in oidei to offset the costs ofproviding care to uninsured and underinsured patients.46 The statute's design reflects Congress's intent to ensure non-discriminatory access to 45 32 C.F.R. 199.21(q)(2)(iii)(E) 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C, Nov. 3, 2023). discounted drugs, not to insulate manufacturers from comrnercial pricing dynamics. Allowing rnanufacturers to recapture value through regulatory mechanisrns that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietaly information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first thne in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugrnakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.5 Drug industry data vendors have reported that such data is highly valuable to manufacturels.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial clainis data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discrirninate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requireinents against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Prograin, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and underconipensated services they furnish to our country's most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are Iikely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 39 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industly data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least .. . $6 billion annually" in 2022.) 5 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). sl Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Stipp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . . is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 33 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/: 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-mao/laws-nassed-that-prohibit-pbm-undernavinent/. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on comrnercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutoiy authority.54 The 340B statute authorizes HRSA to adrninister ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general ruleinaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."S5 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."56 By conditioning access to 340B pricing on the transfer of cornmercial clahns data, HRSA has created a requirernent wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first tirne in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute rnay implicate the federal Anti-Kickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Clairns Act. HRSA cannot 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 5S 42 U.S.C. 1320a-7b (making it illegal to pay reinuneration in exchange for items or services billable to federal health care programs.) lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA' s action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. hnportantly, the statute allows HRSA and drugmakers to audit only qfter such a determination has been rnade. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugniakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Sirnply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishrnent of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs qfter the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, arnong other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or fiinded AIDS drug purchasing assistance prograrn [from the requirements of] `patient' of the covered entity for purposes of this definition if so 59 42 U.S.C. 256b(a)(5)(B) registered as eligible by the State program."60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost ancl administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reiinbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claiins for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of clairns-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provicle manufacturers with the necessary deduplication data within the same 45-clay tim eframe. Improve rebate accuracy, reducing the tirne and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid prograrns currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those clairns. These approaches include claiin modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and rnaking it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, adrninister, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single systern rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit frorn a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Meclicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessrnents sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and inore accurate than data collected through the voluntary repositoiy CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by phamiaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platforin itsel As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted interrnediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recomrnend that the NCC be developed and adrninistered either directly by the federal govermnent or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should subrnit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate mode162 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CliCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transrnitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discrhninate against 340B clahns and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support https://beaconchannehnanagement,com/pages/resourccs (Johnson & Johnson Policy Documents) Si in Price President and CEO MCR Health iy MCR HEALTH Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MCR Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MCR Health believes that a 340B rebate pilot would cause disproportionate harrn to patients served by CHCs and other safety net providers. MCR Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Randy Heiser, Vice President of Pharrnacy, rheiser@mcr.health. 101 Riverfront Blvd., Suite 710, Bradenton, FL 34205 941-776-4000 mcr.health
HRSA-2026-0001-2283UnityPoint Health2026-04-20T04:00Z40,326 chars
Attached please find a comment letter from UnityPoint Health. Government and External Affairs 1776 West Lakes Parkway, Suite 400 West Des Moines, IA 50266 unitypoint.org April 20, 2026 Administrator Thomas J. Engels Health and Human Services Administration (HRSA) Department of Health and Human Services Attention: HHS Docket No. HRSA-2026-03042 5600 Fishers Lane Rockville, MD 20857 RE: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program; published at Vol. 91, No. 31 Federal Register 7287-7291 on February 17, 2026. Submitted electronically via http://www.regulations.gov Dear Administrator Engels, UnityPoint Health appreciates this opportunity to provide comments on this 340B Rebate Model Pilot Program Request for Information. UnityPoint Health is one of the nations most integrated health care systems. Through more than 31,000 employees and our relationships with more than 400+ physician clinics, 34 hospitals in urban and rural communities, and 13 home care areas of service across our 8 regions, UnityPoint Health provides care throughout Iowa, central Illinois, and southern Wisconsin. On an annual basis, UnityPoint Health hospitals, clinics, and home health agencies provide a full range of coordinated care to patients and families through more than 8 million patient visits. The 340B Drug Pricing Program allows safety-net providers to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The 340B Drug Pricing Program requires drug manufacturers to provide front-end discounts on covered outpatient drugs purchased by specified government-supported facilities that serve the nations most vulnerable patient populations. As a large nonprofit, integrated health care system in the Midwest, the UnityPoint Health network of Disproportionate Share Hospitals, Sole Community Hospitals, Critical Access Hospitals, and Rural Health Clinics provide vital access to health care services. The 340B Drug Pricing Program has served as a critical federal resource for our safety-net providers and the patients we serve in Iowa, Illinois, and Wisconsin. Not including our affiliated 17 critical access hospitals, we have 12 hospitals (9 TINs) that participate as covered entities under the 340B Drug Pricing Program. Savings from 340B Drug Pricing Program help to provide affordable medications and support medication therapy management clinics, behavioral health outreach, preventive screenings, and other team-based and wellness initiatives. We appreciate that HRSA is seeking stakeholders feedback on the proposed 340B Rebate Model Pilot HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 2 Program (Rebate Pilot). As members of 340B Health, the American Hospital Association, the Illinois Health and Hospital Association, and the Iowa Hospital Association, we support their comment letters. We provide additional input below. GENERAL COMMENTS HRSA is assessing whether to implement a potential 340B Rebate Pilot and is seeking stakeholder input. Comment: Foremost, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model chassis that has operated successfully for decades. The short answer is no. HRSA lacks rationale for why it would fundamentally shift how the program has operated. This transition is ill-advised and ill-timed as safety-net hospitals are in fragile financial positions1, while pharmaceutical companies are generating significant revenue2 and drug product prices continue to rise3. The Rebate Pilot does not need to be launched to identify the harm to covered entities and beneficiaries that will result. The Rebate Pilot departs from the traditional upfront discount system, risking hospitals paying higher drug costs without reasonable certainty as to when or if rebates will be paid. Over the course of one year for the piloted drugs alone, UnityPoint Health will be forced by HRSA to front to drug manufacturers in excess of $33 million from our hospitals that Congress has designated as serving vulnerable populations. While cash flow implications may jeopardize whether some covered entities remain viable, it is certain that all covered entities will need to reprioritize how to stretch scarce federal resources by reaching less and not more eligible patients and providing fewer and not more comprehensive services. For an Administration that champions deregulation, the Rebate Pilot is the poster child of administrative burden and adds layers of red tape. Under the Rebate Pilot, HRSA is inappropriately ceding its authority to regulate both covered entities and drug manufacturers to one of those interested parties. As discussed in this letter, any rebate mechanism would impose substantial administrative and financial burdens on UnityPoint Health that far exceed any potential benefits. HRSAs own cost estimates underscore the magnitude of these burdens. More fundamentally, HRSAs stated interest in testing a 1 MedPAC, Chapter 3. Hospital inpatient and outpatient services: Assessing payment adequacy and updating payments, Report to the Congress: Medicare Payment Policy (March 2025) In 2023, while the average hospitals all-payer operating margin was 5.1%, one quarter of hospitals had an all-payer operating margin below 4%, with margins remaining lower for DSH and MedPAC-developed Medicare Safety-Net Index (MSNI) hospitals. 2 2025 Q2 earnings for Gilead and Eli Lilly, with links to Q2 earnings from Amgen, Pfizer, AbbeVie, Bristol Myers Squibb, AstraZeneca, GSK, Roche, and Johnson & Johnson https://www.csrxp.org/big-pharma-earnings-watch- gilead-and-eli-lilly/ 3 ASPE Issue Brief, Changes in the List Prices of Prescription Drugs, 2017-2023 (October 6, 2023) - Over the period from January 2022 to January 2023, more than 4,200 drug products had price increases, of which 46 percent were larger than the rate of inflation. The average drug price increase over the course of the period was 15.2 percent, which translates to $590 per drug product. Accessed at https://aspe.hhs.gov/reports/changes-list-prices- prescription-drugs HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 3 Rebate Pilot appears to rest on the flawed premise that the agency must balance the interests of 340B covered entities and drug manufacturers when determining a discount mechanism. The statute is clear, however, that priority must be given to enabling covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the existing upfront discount mechanismon which UnityPoint Health dependsis the most effective way to advance this statutory purpose. The RFI poses 30 questions and encourages commenters to provide supporting facts, research, and evidence. UnityPoint Health has endeavored to respond as thoroughly as possible within the limited timeframe. For purposes of estimating costs, we have assumed that any future rebate program would include the ten drugs previously approved by HRSA for its original program, as well as those selected for 2027 under the Medicare Drug Price Negotiation Program, consistent with HRSAs February 25, 2026, Information Collection Request. The inclusion of the 2027 drugs materially increases projected costs beyond our prior estimates for 2026 alone. Additional drugs and manufacturers necessarily mean more claims submissions, increased tracking and reconciliation requirements, greater cash flow demands while awaiting statutory discounts, and a higher likelihood of disputes related to delays or denials. These burdens would directly reduce the resources available for patient care and comprehensive health services. UnityPoint Healths concern is, and remains, the impact on the patients and communities we servenot the interests of shareholders. COSTS TO COVERED ENTITIES HRSA seeks information on costs under the current upfront 340B discount framework as well as potential costs under a proposed 340B Rebate Pilot. Comment: UnityPoint Health supports efforts to reduce administrative burden for covered entities participating in the 340B Drug Pricing Program so that limited federal resources can be redirected from back-office compliance to patient access. Current Covered Entity Costs. We appreciate HRSAs interest in better understanding covered entity costs and burden. However, we respectfully suggest that the transaction-level data requested in this RFI would be better leveraged to reduce existing burdenparticularly burden stemming from manufacturers 340B contract pharmacy restrictions. In CY 2025, UnityPoint Health processed more than 6.1 million 340B transactions across nine covered entities, including disproportionate share, sole community, and critical access hospitals. Per covered entity, transaction volume ranged from roughly 40,000 to more than 2 million across mixed-use, in-house, and contract pharmacy settings. Total 340B administrative costs in 2025 were approximately $17 million, driven primarily by third-party administrator fees, in-house staffing (340B analysts, IT, billing, and data support), external auditing, and contract pharmacy implementation. Estimated Rebate Pilot Administrative and Staffing Costs. For more than 30 years, the 340B Program has operated as an upfront discount model, and UnityPoint Health has structured its staffing, systems, and operations accordingly. A shift to a Rebate Pilot would impose significant new and unanticipated administrative costs beyond those already borne by covered entities. We estimate first-year costs of $800,000 to $1 million, with approximately 30 percent attributable to one-time expenses such as Third- Party Administrator (TPA) implementation, project management, legal, and IT costs. Ongoing costs would HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 4 be driven largely by personnel. This cost estimate is conservative, assuming current rebate drug volume and manufacturers remain statican assumption that is unlikely, particularly as utilization of high-cost drugs such as GLP-1s increases and more drugs are added to the Rebate Pilot. Implementation of a Rebate Pilot would require at least five additional technical or analyst-level FTEs to manage dual processes for rebate and upfront-discount drugs. In the current healthcare labor market, recruiting and retaining this specialized staff is extremely challenging and now takes months to replace one analyst. It would be difficult to hire five FTEs prior to operationalizing the proposed Rebate Pilot, which would further strain hospital resources already under pressure from declining reimbursement. HRSAs estimate of five hours per week to manage rebate-related activities significantly understates the operational complexity involved. Experience with Inflation Reduction Act-related rebate monitoring has already required hospitals to add staff or engage outside vendors, with frequent reconciliation errors and substantial time spent resolving good-faith inquiries. Many hospitals cannot afford external consultants and instead absorb this work internally, diverting staff from core auditing and compliance functions and potentially compromising program integrity. Estimated Rebate Pilot Infrastructure and Systems Impacts. UnityPoint Healths technological infrastructure was built around an upfront discount model. Transitioning to a rebate mechanism would require costly system redesigns, new data builds, and extensive coordination across IT, TPAs, and vendors. Even preparing for a much smaller proposed rebate pilot4 required significant investments by UnityPoint Health in external project management, IT development, and TPA reportingillustrating the scale of effort such a shift demands. Other Rebate Pilot Implications. While not fully captured in direct cost estimates, the diversion of staff and resources required to manage a Rebate Pilot presents a serious risk to program oversight and integrity. Covered entities ultimately remain responsible for compliance, yet increasingly lack control over the systems and policies governing program administration. We do not see a viable path by which a Rebate Pilot could be implemented without increasing administrative burden and costs, nor one that would offset the significant new demands placed on covered entities. As a community-based, nonprofit healthcare system, participation in the 340B Program is ultimately about serving our patients and communities, and not about enriching stakeholders and investors. The Rebate Pilot will erode the total 340B benefit and impact patient services and access. Patient services impact: The average public payer mix (Medicaid and Medicare) for UnityPoint Health hospitals is 68%. The rural communities we serve include a larger proportion of older adults with greater health complexities and less financial resources. Our community hospitals each target 340B funds to meet local community needs covering a wide range of services from assisting with affordable medications to shoring up underfunded services or providing needed services that are not currently reimbursed. We highlight some of our 2025 initiatives: Provide pharmacy/medication programs: UnityPoint Health hospitals used the 340B Drug Pricing 4 HHS Docket No. HRSA-2025-14998 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, published at Vol. 90, No. 146 Federal Register 36163-36165 on August 1, 2025 HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 5 Program to provide discounted drugs to low-income patients, offer meds-to-beds programs to reduce hospital readmissions, supply community partners with Narcan kits, offer medication delivery and bubble-packs to targeted populations, and expand medication therapy management clinics to combat chronic disease. These pharmacy initiatives have yielded positive outcomes for individual patients. Bolster team-based care: UnityPoint Health hospitals used the 340B Drug Pricing Program to provide heightened care coordination services in emergency departments to prevent avoidable visits, oncology navigation services, and targeted chronic disease management. Sustain under-funded service lines: As Iowas largest provider of behavioral health services, UnityPoint Health used the 340B Drug Pricing Program to underwrite behavioral health services, including child and adolescent psychiatry, overall inpatient behavioral health services, and walk- in behavioral health services. As the largest provider of obstetrics and maternal health in the state of Iowa and our Illinois and Wisconsin markets, funding supports neonatal services, transportation involving neonate hospital transfers, OB/ED hospitalists, donor milk dispensary operations, and pre-natal education. Other vital services include inpatient hospice services, inpatient pediatrics services, child development center support, and assistance for forensic nurse examiners programs. Stand up supportive and prevention services: UnityPoint Health strive to keep individuals out of the hospital and 340B Drug Pricing Program funds are used for non-emergent transport, lifestyle changes such as cardiopulmonary exercise programs and healthy eating and nutrition classes, and no-cost or low-cost cancer and heart health screenings. The extent to which 340B funds are available will influence how and if our various hospitals will be able to continue the above initiatives. Patient access impact: We anticipate that patient access will be impacted by diversion of funding for capital improvements and hospital operations for underfunded service lines, like behavioral health, maternal health, pediatrics, and emergency care. Recently several of our hospitals have used 340B Drug Pricing Program funds to upgrade security infrastructure, including limiting access points (i.e. reducing the number of entrances), installing panic buttons, and installing advanced, video-monitored security systems in Neonatal Intensive Care Units. These were needed capital projects that lacked reimbursement or donor funds. As for service line closures, a recent analysis found that a significant number of rural hospitals lose money delivering patient services in the UnityPoint Health footprint, rural hospitals with losses on inpatient services are 30% in Illinois, 20% in Iowa, and 27% in Wisconsin.5 340B Drug Pricing Program funds do enable rural hospitals to keep doors and services open. When service lines or hospitals close, those residents must travel further for care impacting health outcomes 5 Center for Healthcare Quality & Payment Reform, Rural Hospitals At Risk of Closing (August 2025) accessed at https://ruralhospitals.chqpr.org/downloads/Rural_Hospitals_at_Risk_of_Closing.pdf HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 6 when care is urgent or complex.6 PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES HRSA seeks information related to the impact of the 340B Rebate Pilot on payment timing and cash flow and requests input on how to structure the pilot to address these issues. Comment: Unlike the existing upfront discount model, a rebate mechanism would require UnityPoint Health to advance full payment to manufacturers and wait for statutorily owed 340B savingseffectively providing interest-free loans to drug companies. Even if manufacturers were to remit rebates within 10 days, as contemplated under rebate proposals, the delayed realization of savings would have meaningful cash-flow implications for our health system and the patients we serve. In todays healthcare environment, services designed to support our most vulnerable patientsoften operating at a financial lossare among the first to face cuts when resources are constrained. While UnityPoint Health does not anticipate that delayed or intermittently denied rebates alone would threaten overall system viability, the combined impact of delayed payment, increased administrative costs, and inevitable rebate disputes would directly challenge our ability to sustain high-value, non-revenue-generating patient programs. For example, UnityPoint Health operates medication-focused services such as Meds-to-Beds, free adherence packaging, and patient medication assistance programs funded through 340B savings. These programs have demonstrably improved outcomes, including reduced hospital readmissions, yet generate no direct reimbursement. Similarly, in certain markets, our emergency departments are able to waive charges and furnish patients with no-cost medicationssuch as antibioticsto prevent avoidable ED returns or admissions. These programs rely on stable 340B savings to support automation, staffing, and medication costs. Under a Rebate Pilot, the financial uncertainty and delayed access to savings place these programs at significant risk of reduction or elimination. From an operational standpoint, UnityPoint Health currently operates under standard payment terms of 12 days, with a seven-day grace period before penaltiesterms that apply consistently across 340B and non-340B purchases. Based on experience with routine invoice reconciliation, we believe it is likely, if not inevitable, that a Rebate Pilot would substantially increase late fees. Even absent a Rebate Pilot, UnityPoint Health already incurs six-figure annual late-fee exposure due to invoice corrections and disputes. A rebate structure would compound this risk and may ultimately force renegotiation of payment terms, adversely affecting existing volume-based and cost-minus discounts. Finally, while the RFI invites comment on reliance interests in the upfront discount model, framing the issue solely around statutory authority overlooks decades of consistent agency practice. Since its inception, the 340B Program has operated as an upfront discount program, and UnityPoint Health reasonably relied on that structure in designing its staffing, internal controls, vendor contracts, financial planning, and patient-facing program investments. A fundamental shift to a rebate mechanismeven on a pilot basiswould significantly disrupt these settled reliance interests, impose substantial new costs on 6 Clark NM, Hernandez AH, Bertalan MS, et al. Travel Time as an Indicator of Poor Access to Care in Surgical Emergencies. JAMA Netw Open. 2025;8(1):e2455258. doi:10.1001/jamanetworkopen.2024.55258 HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 7 covered entities, and undermine the very patient benefits the 340B Program is intended to support. In the absence of demonstrated shortcomings in the upfront discount model, there is no compelling justification for introducing a rebate mechanism that would destabilize program operations and patient access. REBATE DENIALS HRSA requests information on denial guardrails and process. Comment: Under HRSAs initial Rebate Program framework, manufacturers proposed to operate the program through Second Sight Solutions Beacon platform. During the limited preparation period, UnityPoint Health identified significant concerns with Beacons functionality, governance, and participation terms. Our legal review found the Beacon terms and conditions to be materially unbalanced, offering extensive protections to the platform operator while providing minimal safeguards for covered entities, particularly with respect to patient data security, integrity, and liability. We also remain concerned that Beacon retains unilateral authority to modify participation terms without input from covered entities. Requests from internal and external legal counsel for clarification or revision were declined, raising broader concerns about whether program oversight and rulemaking authority are being effectively delegated to third-party vendors and, indirectly, to manufacturers. These experiences inform our significant concern regarding manufacturer rebate denials under any rebate model. Hospitals are already encountering challenges with manufacturer review and denial of submitted data under the Inflation Reduction Act rebate requirements, and we would expect such disputes to increase substantially under a 340B rebate framework. Under the current upfront discount model, covered entities can readily determine whether 340B pricing has been applied at the point of purchase and work directly with wholesalers and manufacturers to resolve pricing issuesa process that has functioned effectively for decades. Introducing a rebate framework that relies on post-sale adjudication by manufacturers and their vendors adds unnecessary complexity, creates new points of dispute, increases administrative burden, and diverts limited hospital resources away from patient care. If HRSA proceeds with a Rebate Pilot, UnityPoint Health strongly urges the agency to prohibit manufacturers from denying rebates to 340B covered entities. At a minimum, HRSA should expressly bar denials based on alleged Medicaid duplicate discounts or diversion. While manufacturers would retain their statutory audit rights, prohibiting denials would significantly reduce administrative burden and cost for safety-net providers while still allowing manufacturers access to claims data for program-integrity purposes. If HRSA nevertheless permits rebate denials, manufacturers should be required to provide detailed, claim-specific explanations sufficient for covered entities to meaningfully evaluate and resolve the denial. Absent such guardrails, a Rebate Pilot risks replicatingand magnifyingthe administrative barriers that Congress sought to avoid in establishing the 340B Program. HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 8 DATA COLLECTION BY COVERED ENTITIES HRSA seeks information on current practices, how this would change under a potential 340B Rebate Pilot, and recommendations related to data elements and any privacy/security guardrails. Comment: During the prior iteration of the Rebate Pilot, HRSA and manufacturers asserted that a Rebate Pilot would not impose new data-collection burdens on covered entities, suggesting that required information was already available through mechanisms such as 340B ESP. That assertion does not reflect operational reality. UnityPoint Health relies on multiple systems, data pathways, and specialized staff to collect, reconcile, and monitor 340B-related data. Medical claims and most contract pharmacy claims are shared with our TPA for processing and reporting, while other contract pharmacy claims flow through proprietary accumulator systems operated by contracted pharmacies. Claims from covered-entity-owned pharmacies are processed through an accumulator housed within our electronic health record (EHR). All of these pathways require customized data extracts prepared and validated by our staff. A significant portion of analyst time is devoted to auditing claims for 340B eligibilityboth targeted and randomto ensure compliance with diversion and duplicate discount prohibitions. We maintain extensive processes for data validation, monitoring health plan changes, and maintaining appropriate TPA configurations. Dedicated IT resources trained in 340B compliance are essential to maintaining system integrity. Introducing a Rebate Pilot would fundamentally alter these workflows, shifting staff focus away from compliance and auditing toward retrospective validation of manufacturer and vendor interpretations of claims data. A Rebate Pilot would also create substantial one-time and ongoing costs. Significant system builds would be required to collect and transmit new data elementssome of which are not currently captured or reportedthrough our EHR and TPA platforms. TPAs would similarly need to develop new data submission frameworks and reporting capabilities, costs that would almost certainly be passed on to covered entities. Rather than improving program integrity, a Rebate Pilot risks creating duplicative data exchanges and administrative busywork that offers little value to patients or program oversight. Sharing Claims Data with Manufacturers. The RFI asks which medical and pharmacy claims data elements should be shared with manufacturers under a Rebate Pilot . UnityPoint Health does not believe covered-entity claims data should be shared with manufacturers. We are particularly concerned that manufacturers may seek access to covered-entity data to manage or offset commercial rebate obligations to pharmacy benefit managersan objective unrelated to 340B program integrity. Covered entities should not be required to finance or facilitate oversight of manufacturers commercial contracting arrangements, especially by purchasing drugs at non-340B prices. At a minimum, manufacturers should be expressly prohibited from using covered-entity rebate data for commercial purposes. Concerns with Proposed Data Governance Guardrails. UnityPoint Health remains deeply concerned that the data-governance framework contemplated under a Rebate Pilotparticularly as reflected in the Beacon platform terms and conditionsfails to provide adequate protections for covered entities and introduces substantial compliance, operational, and financial risk. Combination of Covered-Entity and Manufacturer Data. The Beacon terms permit covered-entity HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 9 rebate data to be combined with manufacturer pricing data, 340B ceiling price information, and rebate program terms to evaluate rebate eligibility and compliance.7 Combining these datasets may expose sensitive information, create compliance risks, and diminish covered entities control over how their data are used. Broad reporting rights to external parties further heighten the risk of inappropriate disclosure or secondary use beyond program-integrity purposes. Disclosure and Sublicensing of Rebate Data. The agreement expressly allows Beacon to disclose and sublicense covered-entity rebate data and derived datasets to manufacturers, commercial payers, rebate claims processors, HHS, and state Medicaid agencies.8 This expansive authority raises significant concerns about downstream uses of covered-entity data, including uses unrelated to 340B oversight. These provisions appear more aligned with facilitating data commercialization than safeguarding the interests of safety-net providers or the integrity of the 340B Program. Aggregation with External Datasets. Beacon is permitted to combine covered-entity rebate data with rebate records, claims data, pricing information, and datasets supplied by manufacturers, payers, other covered entities, and third parties.9 Such aggregation materially increases the risk of data matching or re-identification and exposes covered entities to liability for errors or misuse occurring outside their control. It also creates complex and opaque compliance obligations that covered entities are ill-positioned to supervise or remedy. Lack of Data Return or Retention Transparency. The terms state that Beacon has no obligation to return data stored on its systems.10 This raises serious concerns regarding long-term data retention, aggregation, and redistribution, particularly if covered-entity data are combined with other datasets and later shared while the originating covered entity loses visibility and control. Disproportionate Limitation of Vendor Liability. The Beacon agreement broadly disclaims any warranty that the rebate platform will operate without interruption, error, or delay, or that its outputs will be reliable or accurate.11 At the same time, it disclaims liability for indirect, consequential, incidental, special, or punitive damages and caps Second Sights aggregate liability 7 Covered entities agree that Second Sight may enable rebate data to be combined with Manufacturer pricing data, 340B ceiling price information and rebate program terms in order to confirm 340B rebate eligibility and compliance with 340B requirements and manufacturer rebate agreement terms. 8 Covered entities allow Second Sight the ability to disclose and sub-license the Rebate Data and any other data derived from the interpretation, analysis, and combination of the foregoing data with other data... to the manufacturers, commercial payers, rebate claims processors, HHS, or state Medicaid agencies... 9 Covered entities allow Second Sight to combine Rebate Data with rebate records, claims data, pricing information, and other datasets provided by manufacturers, payers (including Medicaid, Medicare, TRICARE and commercial payers), other covered entities, and third parties, as necessary to prevent duplicate rebates and validate rebate eligibility under the 340B program. 10 Second Sight shall have no obligation to return to you any data stored on Second Sights systems. 11 SECOND SIGHT DOES NOT WARRANT THAT THE REBATE PLATFORM WILL BE UNINTERRUPTED, ERROR FREE OR WITHOUT DELAY, NOR DOES SECOND SIGHT MAKE ANY WARRANTY AS TO ANY RESULTS THAT MAY BE OBTAINED BY USE OF THE REBATE PLATFORM. HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 10 for direct damages at $1,000, except in cases of gross negligence or willful misconduct.12 This limitation grossly understates the financial, operational, and compliance harm that could result from system outages, data errors, or processing delays. These terms effectively shift all meaningful risk to covered entities while insulating the platform operator from accountability an arrangement incompatible with administration of a federal program involving sensitive patient data and substantial statutory drug discounts. Absent strong, enforceable guardrails governing data ownership, use, disclosure, retention, and vendor accountability, a Rebate Pilot would significantly expand administrative burden and compliance risk for covered entities without corresponding benefit to program integrity or patient access. MANUFACTURER EFFORTS TO AVOID DUPLICATE DISCOUNTS HRSA seeks information on current practices and challenges preventing Medicaid and MFP duplicate discounts and suggestions for a minimum data set to be used by Pilot Program manufacturers. Comment: Avoidance of Duplicate Discounts. UnityPoint Healths covered entities maintain robust controls to prevent duplicate discounts, including extensive auditing of 340B claimsoften reviewing up to 100 percent of transactions to confirm eligibility. Our covered entities have undergone multiple HRSA audits in recent years, none of which identified duplicate discount findings. We are not aware of any manufacturer raising duplicate discount concerns in our markets. Assertions from manufacturers suggesting widespread duplication lack factual support and do not reflect the compliance realities of covered entities like ours. In practice, UnityPoint Health routinely loses access to 340B pricing without notice due to unilateral manufacturer actions, with no corresponding accountability for manufacturers. Considerable staff time and resources are required to identify and correct lost pricing. Since January 1, 2026, UnityPoint Health has also been manually submitting data to support enforcement of the Medicare Drug Price Negotiation Program (MDPNP) under the Inflation Reduction Act. As part of this process, several contract pharmacies have elected to exclude Medicaid Part D claims from 340B eligibility, further eroding 340B savings for our patients and communities. The operational complexity associated with this process has already required engagement of an external vendor to manage monitoring and reconciliation, adding six-figure costs that are still being finalized. Alternative Approaches to Deduplication. HRSA has already acknowledged that manufacturers have alternative tools available to address duplicate discount concerns without imposing a rebate mechanism. Given the substantial administrative and financial burdens a Rebate Pilot would impose on covered entities, HRSA should rely on these existing options. Choosing otherwise would improperly prioritize manufacturer convenience over the interests of safety-net providers and the patients and communities 12 Second Sight SHALL NOT BE LIABLE FOR ANY DAMAGES, ECONOMIC OR OTHER LOSS OR DAMAGE, WHETHER INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE, AND EVEN IF SECOND SIGHT HAS BEEN ADVISED OF THE POSSIBILTY OF SUCH DAMAGES. THE LIMITATIONS OF LIABILITY SHALL NOT APPLY TO SECOND SIGHT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. SECOND SIGHTS AGGREGATE LIABILITY FOR DIRECT DAMAGES UNDER THIS AGREEMENT WILL NOT EXCEED ONE THOUSAND DOLLARS ($1,000). THIS LIMITATON SHALL NOT APPLY TO DAMAGES ARISING FROM SECOND SIGHTS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 11 they serve. We also support and reiterate the American Hospital Associations position that there are viable, lawful, and significantly less burdensome alternatives to a Rebate Pilot to address 340B and MDPNP deduplication. In particular, HRSA should pursue a third-party clearinghouse approach rather than a rebate mechanism. At a minimum, HRSA should provide a clear and reasoned explanation for why such a clearinghouse is not feasible or less costly. We disagree that rebates are necessary or would improve 340B program integrity. HRSAs existing covered-entity audit program has consistently demonstrated strong compliance and minimal duplication issues. If additional safeguards are warranted, HHS could adopt alternative modelssuch as requiring Medicaid agencies to follow Oregon Medicaids retrospective claims-exclusion approachor explore a comparable federal-level process for MDPNP deduplication. These approaches would preserve program integrity without destabilizing the longstanding and effective upfront discount model. REQUIRED MANUFACTURER REPORTING HRSA seeks information on parameters for Pilot Program manufacturers to submit data to HRSA for compliance and program assessment as well as what reported information should be available to the public. Comment: UnityPoint Health agrees that HRSA should retain a direct role in overseeing any pilot program. Under the upfront cost model, oversight has been loped-sided HRSA conducts audits of approximately 160 (or 6%) 340B hospitals annually. In contrast, HRSA audits only five (0.6%) of participating drug manufacturers. Yet in FY 2022, 75% of audited drug manufacturers required repayment to 340B hospitals while only 28% of audited 340B hospitals required repayments to drug manufacturers. 340B PROGRAM INTEGRITY AND OTHER POTENTIAL BENEFITS OF A REBATE PILOT HRSA seeks information on potential 340B program integrity concerns as well as 340B program benefits from implementing the potential 340B Rebate Pilot. Comment: UnityPoint Health strongly disagrees that a Rebate Pilot would enhance the integrity of the 340B Program. Existing evidenceincluding routine HRSA auditsdemonstrates that covered entities operate the program with a high degree of compliance, and manufacturers have not substantiated claims of widespread diversion or duplicate discounts. Assertions to the contrary appear driven by financial interests rather than by demonstrable patient- or program-integrity concerns. From our perspective, a Rebate Pilot offers no incremental integrity benefit over the longstanding upfront discount framework. Instead, it introduces significant additional workflow, staffing demands, compliance risk, and administrative expensediverting limited resources away from patient care. These added burdens directly undermine the statutory purpose of the 340B Program by reducing our ability to stretch scarce federal resources to reach more eligible patients and sustain high-value services. For these reasons, UnityPoint Health concludes that the costs of any rebate mechanism would far outweigh any speculative benefits. HRSA should therefore abandon the Rebate Pilot and instead pursue less burdensome alternativessuch as a neutral third-party clearinghousethat preserve program integrity while minimizing disruption to covered entities and patient access. HHS Docket No. HRSA-2026-03042 | 340B Rebate Model Pilot Program Request for Information UnityPoint Health Page 12 If HRSA nonetheless elects to proceed with a Rebate Pilot, it must provide covered entities a meaningful opportunity to comment on the specific design and operational details of the program. At present, covered entities are being asked to respond without clarity regarding key elements, including the drugs subject to rebates, required data elements, permissible grounds for rebate denials, dispute-resolution processes, and applicable guardrails. Failure to solicit and consider public input on these core aspects would constitute a failure to consider important dimensions of the problem and would further erode confidence in the proposed approach. We are pleased to provide input on this RFI. To discuss our comments or for additional information on any of the addressed topics, please contact Cathy Simmons, Executive Director, Government & External Affairs at cathy.simmons@unitypoint.org or 319-361-2336. Sincerely, Scott Leigh, Pharm.D. Cathy Simmons, MPP, JD 340B Manager Executive Director, Government & External Affairs UnityPoint Health UnityPoint Health
HRSA-2026-0001-2284MCR Health, Incorporated2026-04-20T04:00Z115,904 chars
See attached file(s) iyMCR HEALTH April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of MCR Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. MCR Health is a leading not-for-profit healthcare system that provides high quality, compassionate care to families throughout Florida. MCR operates 27 healthcare centers and 13 pharmacies, providing a wide range of services including family practice, internal medicine, pediatrics, OB/GYN, behavioral health, vision, dental, podiatry, cardiology, general surgeiy and many other medical services. Our mission is to provide all patients including the underserved and uninsured access to quality primaiy care and preventative health education regardless of race, sex, disability, or economic status. MCR Health, Inc. is committed to delivering quality care while valuing and respecting eveiy individual's needs. MCR Health has been and will remain focused on its mission to improve health through access to quality services, a skilled health workforce, and innovative programs for all. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 101 Riverfront Blvd., Suite 710, Bradenton, FL 34205 941-776-4000 mcr.health The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B prograrn has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free rnedications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel undermines this by placing an irnmense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For MCR Health in particular, this means it will impact: 106,563 patients annually through 360,611 pharmacy transactions Current admin costs for our 340B program = $229,120 31% of our entity owned pharmacy activity is generated uninsured patients who receive a significant portion of the savings from the 340B drug discount prograni We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the inost vulnerable patients. II. Patient Impact Most irnportantly, a 340B rebate model poses a direct and serious threat to rnedication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients rnay be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human irnpact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate rnodel, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity) This patient population relies on affordable medications to manage these long-term conditions. I Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi; 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. We are deeply concerned that implernenting a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolisrn, and atrial fibrillation. For many of our patients, there are rninimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the irnpact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for rnanaging their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarrning mental health crisis. Nearly one in four (23.4%) Arnericans live with a mental illness.4 Starting in 2027, the MDPNP will include sorne behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Irnpairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.111 l/jth.I5415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doilpdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.sainhsa.gov/data/data-we-collect/nsduh-national-survevdrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Arnericans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, espeeially those who are uninsured and have limited options for afforclable care. Beyond the direct impact on individual patients, the rebate rnodel threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that underrnine medication continuity. Eveiy hour that a pharmacist spends reconciling rebate clairns is an hour not spent on medication counseling. Every dollar spent on cornpliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients' lives. This diversion of tiine and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. lf hnplemented without meaningful safeguards, this model will force CHCs to make irnpossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a prograrn designed to expand access to care for those who need it most. III. Adininistrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a cluplicative and unnecessary administrative burden. To address manufacturers' "concerns" about duplicate discounts, the Pilot Prograin would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers' existing contract pharrnacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs froni the 340B Rebate Moclel Pilot because they will incur additional workforce and IT costs to coinply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating rnanufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to rnanage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of cornpliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking inodels to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of rnanufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MCR Health provided $33,290,058 in sliding fee discounts, provided through discounted medications and rnedical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MCR Health anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate rnodel. External Vendor Costs: Given increased complexity, MCR Health anticipates an increase of $30,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the adrninistrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 MCR Healtli estimates that one FTE will be required to properly manage this new process. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, canying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We estimate that additional staff will cost $75,000 per year. 7 Internal NACHC assessment (99 responses). 8 Ibid. Depending on the volume of prescriptions a pharrnacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. MCR Health will be required to report 340B rebate claims to a third-party platform, assurning all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the sarne data, thereby increasing costs and operational burdens. MCR Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elernents. Additionally, if rnanufacturers are allowed to select different soiware platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custorn dashboard modifications, and design new internal workflows. We estimate that $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that dirninish our 340B savings. Total Cost: For our CHC, which serves 106,663 patients, the total projected increase in expenses 'ncluding labor, IT, and canying costs is estimated at $170,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly custoniization to provide real-thne, accurate inforrnation at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies rnust directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently rnanage clinical pharmacy services will be forced to spend unnecessary hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutoiy 340B price. The Contract Pharmacy: Tlie Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 204 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' valying requirements across rnultiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking rnodules to us through increased per-clairn fees. Verification Latency: The rebate rnodel creates a reconciliation gap. Our staff rnust monitor clairns across 204 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Manatee/Sarasota/DeSota Counties with no affordable rnedication options. Over 17 percent of the U.S. population lives in a pharrnacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-adrninistered drugs are bundled into the prospective payinent system (PPS) billing when adrninistered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on clairns billed to payers. Simplified Records: Because CHCs maintain lirnited inventories of CADs and they are typically not separately billed on claims, it is still cornrnon for adrninistration and inventoly logs to be maintained on paper, with text documentation in patient visit notes describing what was adrninistered. While the CHCs rnaintain perpetual inventories and cornplete administrative records, the fact that the records are often paper irnposes the added burden of converting them to electronic data before submitting for rebate. Veiy few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic rnedical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software systetn. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximurn Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Patt B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically ditninish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies ] Pharmacv and Clinical Pharmacolow JAMA Network Open I JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff2024.00192?journalCode=h1thaff force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcornes. The proposed 340B Rebate IVIodel Pilot would directly impact CHCs' ability to offer patients steeply discounted niedications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a veiy unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the FIRSA-approved scope of the project." In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. MCR Health has a program for uninsured patients where they can receive prescription medications at a price not greater than $15 above cost for generics and not greater than $30 above cost for brands. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until paynients are submitted. While rebates are expected to arrive within 10 days from cornpleted data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to subrnit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharrnacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventoiy 10-12 times a year (roughly eveiy 30 days), '3 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC " HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. htips://bpbc.hrsa.gov/compliance/compliance- manu al/chapter9# footnote l 0 "https://enlivenhealth,co/blog/year-end-business-health-check-key-mctrics-every-phannacy-owner-should-review pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data subrnissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timefrarne for rebate payments; however, we have concerns about the lack of details regarding enforcernent if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, rnanufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate arnount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfiont 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B" and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate paylnent cycles. Inventory models, frequency of data submission, and rnanual processes for 14 https://340bpricing.hrsa.gov/ 15 littps://www.cms.govifiles/zip/selected-drug-list-negotiated-prices-also-known-maximunt-fair-prices-statutezip.zip referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volurne, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs rnust wait to receive a rebate payment after purchasing and d'spensing medication to the patient. This delay forces difficult decisions about allocating limited financial resouices. Based on our organization's data, we estimate it would cost $10,551,724 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,090,915 o purchase these same drugs at the 340B ceiling price. This represents a 867% increase in upfront capital required for procurernent. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, MCR Health anticipates needing to reduce: Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund one pharmacy technician, Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 19,181 uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at fulI WAC will potentially leacl the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into lirnited financial reserves or taking out loans, thereby defeating the purpose of the 340B prograrn. MCR Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial liinbo." This approach fundamentally defeats the purpose of the 340B prograinto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a tirne when all other major revenue sources are unstable. Another complication is that the rebate amount may not rnatch the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundarnental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are subrnitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit lirnits. Given that CHCs typically operate with extremely lirnited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirernents, CHCs are unable to disclose their exact prompt-pay discount. However, MCR Health estirnates its 2027 Annual Rebate Opportunity Cost to be approximately $1,090,915 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. MCR Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $10,551,724. This value increases o $15,955,571 for 2027 MFP impacted drugs and $22,064,831 for 2028 MFP impacted drugs. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the rnanufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate ptiblic health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $70,000 annually. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on MCR Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the countiy depend on, a. Financial Impact of Rebate Denials ancl Delays MCR Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The frarnework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate clairns based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.'6 The 16 Application Process for the 34013 Rebate Model Pilot Program, 2025-14619 (90 FR 36163) h ttp s://www. federal registe r. gor/do cu ments/2025/08/01/2025-14619/340b-program-not ice-app icat ion -p ro cess-for-the-34 Ob- rebate-model-pilot-program use of a vague "other" category for denial reasons only added to the confusion, leaving CHCs guessing cornpliance requirernents that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $1,051,201. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC rnission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day tiinefranie for rebate payments, the lack of enforcernent details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an hninediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are rnade whole for the interest lost while capital is "frozen" in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the tirne of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan frorn safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Iv. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cash-flow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs' operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to coveied entities. A rebate model that relies on retrospective payment and inanufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safety-net providers in untenable fmancial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a rnanufacturer can demonstrate, with claim-level documentation, a specific and perrnissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutoiy requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates rnust be paid, and the manufacturers rnust revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits." The previously proposed rebate construct and the one currently used by rnanufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead rnany covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perforrn the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care deliveiy and fails to align with the 340B prograrn's intent "to stretch scarce Federal resources as far as possible, reaching rnore eligible patients and providing more conlprehensive services."18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturer-run MFP de-duplication processes dernonstrates that, even when a covered entity successfully contests a denial, payrnent is often delayed for indeterminate periods. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected deternlination to prevent rnanufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncornpliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becorning a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR tirnelines are reported to take up to a year from the time of a review panel assignment. Given the time to cornplete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/defaultifiles/hrsatopaidispute-resolution-process-12-12-96.pdf " 340B House Report Legislative History. H.R. REP. 102-384(11). 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable sohition to address covered entities' rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, witli defined timelines, escalation protocols, and agency oversight. HRSA rnust clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharrnacists with the necessary subject-matter expertise to understand the cornplexities of pharrnacy software, billing, and data cornponents. Without explicit enforcement, a rebate pilot risks becoming a system of rnanufacturer self-policing, contrary to HRSA's statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate rnodel operate under uniforin national standards that limit manufacturer discretion, hold inanufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate clairns are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or IvIDPNP); Standardized, publicly defined denial categories with claim-level documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively nionitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers' behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHC's data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturer's accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished "reasonable use" timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fiilly compliant with the 340B progratn requirements. Currently, when this misalignment occurs, manufacturers block an entity's ability to purchase at 340B prices until the entity meets the manufacturer's unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate cornpliance beyond existing statutoiy requirements, particularly where rnanufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility deterrninations. The 340B statute assigns patient definition and eligibility deternlinations to covered entities.20 Systenls or methodologies that effectively transfer this determination to nlanufacturers, whether through retrospective algorithrns, proxy indicators, or undisclosed purchase-histoiy logic, exceed statutory authority and introduce non-transparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial rnethodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSA's commitment to transparency in the 340B Progran1. Since 2020, manufacturers have inlposed several self-declared "340B transparency measures" as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers' visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B clairns for MDPNP, which are in the confidential portion of the rnanufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturer's vendor, Second Sight Solutions, has published a list of pricing codes2i to be utilized "to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP." Three of the MFP determination methodologies in the table below highlight this issue. For the "recent 340B purchase" and "aggregate 340B purchase history of the Dispensing Entity" scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers' determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P I 340B Claim Indicator Pricing Claim included a 340B modifier. 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsairural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/entarticles/13335320-validation-codes-and-pricing-codes-glossary P2 340B Clahn Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to deterrnine MFP refund amount. P8 Entity Identified 34013 Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 Pricing Clairn identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. 340B Pharmacy Allocation V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate rnodel to clinic-administered drugs (CADs), where CHCs' claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retail-only approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, line-item drug claims. Instead, the cost of these drugs is embedded within encounter-based reimbursement. As a result, CHCs do not maintain electronic, claim-level billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implernenting a rebate-based framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incrernental modifications to existing systems. In addition, auditable records for CADs are frequently rnaintained in paper logs or other non-standard internal documentation, rather than in structured electronic data fields. These record-keeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would conlpel CHCs to convert paper-based records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estinlates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic rnedical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative 22 https://public-inspection.federalregister.gov/2025-14619.pdf71753965918 23 Internal NACHC survey data workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to IvIedicare Parts B or D. Furthermore, IvIedicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of near-terrn applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebate-based reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and tlie ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanisms--particularly in a context where no discrete billing or near-terrn Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate modeI pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride thernselves on rnaintaining compliance with both the Health Center Prograrn requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related inforination annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirernents provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs' exemplary stewardship of the prograin. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, irnplementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The adrninistrative, financial, and operational burdens frorn such a rnodel would threaten the stability of the safety-net providers that the 340B prograrn was designed to support. CHCs are not the source of rnisuse in the 340B prograrn; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally irnpossible because they rely on wholesale price files to deterrnine the acquisition cost of the drug to calculate a discounted price. In a rebate nlodel, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included rnedications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Model's Incompatibility with Deduplication Efforts a. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers' investment in a mechanism to deduplicate Medicare IRA rnaxirnum fair price (MFP) and the 340B price from the sarne unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant adrninistrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the government's goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS' consideration. As further discussed below, CMS could irnplernent Medicare-only claims data subrnission to a government vendor or neutral clearinghouse withottt also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to subrnit commercial clairns data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B clairns repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that rnany covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payrnents, CAHs, and FQHCs. CMS noted that it was actively considering options for rnandatory reporting to the 340B repository in the near future and 24 5 U.S.C. 500-596; Food & Drug Adrnin., Least Burdensorne Provisions: Concept and Principles (n.d.), https://vvvvw.fda.goviregulatory-infonnation/search-fda-miidance-documents/least-burdensome-provisions-concept-and- principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repositoty reporting.26 If both a 340B rebate model and a 340B claims repositoiy are made mandatory, CHCs will be subject to two new adrninistrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative Histoiy demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: "The Committee bill does not specify whether "covered entities" would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other rnechanisrn. A mechanism that is appropriate to one type of "covered entity," such as CHCs, rnay not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretaty of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of "covered entity.i27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the "least burdensome" requirernent. A 340B rebate rnodel not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Prograrn and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nation's primaty care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutoiy and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRA's intent. Under the IRA, the manufacturer must provide the lower of the two prices-340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSA's stated authority. The 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph. Specifically, the 340B statute states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs tinder which the amount required to be paid (taking into account any rebate or discount, as provided by the 26 CY 2026 PFS, Final Rule, htlps://www.lovinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(11) Secretary)."28 That clause, however, cannot be read in a vacuurn. From this clause, HHS has contended that it rnay authorize rnanufacturer 340B rebate niodels. However, HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statute's bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSA's authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service ("FFS") duplicate discounts. Accordingly, HRSA's rebate authority under the 340B statute cannot be extended to deduplication of IvIFP and 340B drug claims. Such an extension would be an ultra vires application of HRSA's alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously rnodifying the 340B statute's plain text prohibiting a manufacturer frorn charging above the 340B ceiling price "the maximum price that covered entities may permissibly be required to pay for the drug."29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSA's alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate rnodel would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. b. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term "rebate" in a parenthetical in the first paragraph of that statute. Specifically, it states that the "Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary)."" That clause cannot be read in a vacuum. HRSA's authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and IVIedicaid Drug Rebate Program ("MDRP") statutes' bounds. The 340B statute only protects drugmakers frorn Medicaid duplicate discounts. The 340B statute's clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a "covered entity[, not HHS or a drugniaker,] shall not request payment under" the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only 28 42 U.S.C. 256b(a)(I) 29 Id. 3 42 U.S.C. 256b(a)(I) 31 Indeed, the 340B statute states that the covered entity may choose "options" for billing 340B drugs to Medicaid. Specifically, it states that the HHS may "develop[][rnore detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugrnakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drtig has already been billed to the Medicaid state plan.33 Specifically, the 340B statute's audit provision states that a "covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entity's compliance with the" duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutoiy discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B clairns data to prevent such discounts before a covered entity elects to bill the clairn under applicable state requirements. Congress knew how to furnish such discretion to drugrnakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entity's statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the subrnission of clairns data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term "rebate" in a parenthetical of the statute's first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs' ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirernent to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the nianufacturer has paid the rebate. (a)(5)(A)." 42 U.S.C. 256b(d)(2)(B)(iii), And the Secretary of1-1HS may institute a system to ensure that the covered entity does what the statute says it's obligated to do prevent dttplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) ("Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement clairns form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any rnanufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.") 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). 35 See 42 U.S.C 256b(a)(5)(A). Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirernents vaty depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid rnanaged care plan or organization ("MCO"). The billing requirernents vary further depending on whether the drugs are billed under a pharrnacy benefit or a rnedical benefit for each plan type. These requirements create a conlplex web of billing and reimbursement policies for Medicaid FFS plans, which vaiy even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is subrnitted pre-rebate at the WAC, this could result in overpaynlent, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies. For Medicaid FFS retail pharrnacy clairns, federal regulations require states to irnplenlent policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have irnplemented AAC-based reirnbursement for Medicaid FFS nledical claims, and some Medicaid MCOs inlplernent AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or rnedical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the clain1, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost deterrnination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal irnpossibility for covered entities because it would revoke the covered entity's ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entity's discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmaker's future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the coveted entity believed it 36 https://medi-calrx.dhes.ca.eov/anshnedicalrx/static- assets/documents/provider/2025/12 A Claim Subtnission Requiretnents 340B Rebate Model Pilot Drues.pdf 37 C.F.R. 447.518(a). would receive a 340B rebate under the drugmaker's discretion. But if the drug isn't subject to a rebate in the future, the initial 340B ceiling price clairn rnay have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drug's AAC with a Medicaid clairn. In a 340B rebate rnodel, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be rnade available through the wholesaler for drugs subject to the 340B rebate model. Phamtacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid clairn, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each state's Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHC's authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B prograrn and Medicaid Prograrns. A 340B rebate niodel is unduly burdensome. HI-IS 's designing of a rebate model does not require it to authorize drugrnakers to charge the nation's CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.38 Sorne of these ideas are explored later in this letter. This way, the manufacturer's rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as "the agency's deterinination of the pharrnacy providers' actual prices paid to acquire drug products marketed or sold by specific manufacturers."39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing tinder a 340B rebate model. In submitting comments regarding HRSA's previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Hurnan Services stated, "[i]f the AAC for drugs in the Pilot Prograrn is the covered entity's cost before the 340B rebate, then Medicaid FFS will no longer benefit frorn the 340B discount and Medicaid's cost for these drugs will increase."" The Oregon Health Authority commented, "[i]f Oregon's FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entity's initial cost 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/fdes/document/ipay-2028-final- guidance.pd 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, hltps://www.regulationsgoy/comment/HRSA-2025-0001-0095. and will contribute to cash flow problems and financial instability for the impacted safety net providers."41 Furtherrnore, the 340B rebate model would create legal impossibilities under Medicaid rnanaged care for covered entities, state Medicaid agencies, and Medicaid rnanaged care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(l) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugrnakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implenient systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugniakers or HHS, "establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts tinder the 340B drug pricing program from the reports" submitted to rnanufacturers for Medicaid rebate payments. Although their policies vary, niost states require Medicaid managed care organizaions to require covered entities to identify 340B drugs when billing for such clairns. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid rnanaged care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or rnay not be later deemed to be false based on a third-party drugtnaker's decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate inodel effectively raises the 340B price of a drug above the 34013 ceiling price, and such costs must be included in billing state Medicaid plans. This is because tlie CHC would have to float WAC pricing for each drug and incur additional administrative costs related to clairning a rebate, which are factored into the true "actual acquisition cost" of a 340B-rebated drug. Second, the CHC may be forced to over-identify clairns as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, hUps://www.reaulations.gov/commentlliRSA-2025-0001-0980. 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultitnately was not 340B based on the manufacturer's subsequent discretionaly denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance irnpossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSA's authorization of this illegal framework would violate the Adrninistrative Procedure Act and is cleatly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discowit Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification infortnation. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring rnanufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing inforrnation used to identify Medicaid plans. This plan identification information includes the Medicaid plan's unique Bank Identification Number (BIN), Processing Control Nurnber (PCN), and Group Nutnber (GRP) to identify those FFS and managed care plans under which a manufacturer inay pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the stattitoiy obligation for the compliance measure falls to the covered entities: "A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(0(12) ofsuch Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act. "44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities' compliance with the duplicate discount prohibition by iinplementing the Medicaid Plan Billing Information Database. To date, the rnechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities cornply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.govicurrent/titte-42/chapter-IV/subchapter- C/oart-438/subpart-A/section-438.3 44 42 256b(a)(5)(A)(emphasis added). c. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharrnacy Benefits Prograrn, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a "covered drug" as defined under 38 U.S.C. 8126, which serves as the statutory basis foi the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a "covered drug" any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a "covered drug" for purposes of TRICARE's retail network pricing and TRICARE's manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription ftom being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirernents. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutoiy exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drug's 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a clairn as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharrnacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entity's ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their faniilies. d. Commercial Duplicate Discounts The requireinent for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in oidei to offset the costs ofproviding care to uninsured and underinsured patients.46 The statute's design reflects Congress's intent to ensure non-discriminatory access to 45 32 C.F.R. 199.21(q)(2)(iii)(E) 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C, Nov. 3, 2023). discounted drugs, not to insulate manufacturers from comrnercial pricing dynamics. Allowing rnanufacturers to recapture value through regulatory mechanisrns that Congress declined to authorize undermines the 340B program's purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietaly information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first thne in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers' possession without compensation or a valid public use. That data will be used by drugrnakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.5 Drug industry data vendors have reported that such data is highly valuable to manufacturels.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial clainis data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discrirninate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requireinents against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Prograin, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and underconipensated services they furnish to our country's most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are Iikely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.") 39 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industly data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth "at least .. . $6 billion annually" in 2022.) 5 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct 2023), Issue No. 3. (stating that "5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually."). sl Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Stipp. 3d 312, 330 (D.S.C. 2023) (stating that "the goal of the 340B statute . . is to make `covered entities' profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day."). 33 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/: 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-mao/laws-nassed-that-prohibit-pbm-undernavinent/. We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on comrnercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congress's omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSA's authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agency's statutoiy authority.54 The 340B statute authorizes HRSA to adrninister ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, "Congress therefore constrained the Secretary's ability to adopt regulations that have the force of law. This denial of general ruleinaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation."S5 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, "obligations cannot spring from silence."56 By conditioning access to 340B pricing on the transfer of cornmercial clahns data, HRSA has created a requirernent wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first tirne in the 340B statute's history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate model's requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute rnay implicate the federal Anti-Kickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Clairns Act. HRSA cannot 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 56 Sanofi Aventis U.S. LLC v. U.S. Dep't of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law"). 5S 42 U.S.C. 1320a-7b (making it illegal to pay reinuneration in exchange for items or services billable to federal health care programs.) lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSA' s action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. hnportantly, the statute allows HRSA and drugmakers to audit only qfter such a determination has been rnade. Indeed, the only provision that mentions the term "patient" in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.59 This is commonly referenced as the "diversion prohibition." Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugniakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Sirnply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term "rebate" in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishrnent of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs qfter the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, arnong other things. Hence, a rebate model is appropriate for them. Indeed, HRSA's longstanding guidance defining eligible 340B patients explicitly excludes "individual[s] registered in a State operated or fiinded AIDS drug purchasing assistance prograrn [from the requirements of] `patient' of the covered entity for purposes of this definition if so 59 42 U.S.C. 256b(a)(5)(B) registered as eligible by the State program."60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost ancl administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP) deduplication" - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reiinbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claiins for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of clairns-level data elements for dispensing of their 340B drugs. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provicle manufacturers with the necessary deduplication data within the same 45-clay tim eframe. Improve rebate accuracy, reducing the tirne and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid prograrns currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those clairns. These approaches include claiin modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and rnaking it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, adrninister, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single systern rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit frorn a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Meclicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessrnents sent to manufacturers. CMS is currently developing a "voluntary data repository" for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and inore accurate than data collected through the voluntary repositoiy CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by phamiaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers' interests and the platforin itsel As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted interrnediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recomrnend that the NCC be developed and adrninistered either directly by the federal govermnent or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should subrnit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate mode162 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CliCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transrnitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discrhninate against 340B clahns and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support https://beaconchannehnanagement,com/pages/resourccs (Johnson & Johnson Policy Documents) Si in Price President and CEO MCR Health iy MCR HEALTH Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan "Group of Six" Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MCR Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MCR Health believes that a 340B rebate pilot would cause disproportionate harrn to patients served by CHCs and other safety net providers. MCR Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Randy Heiser, Vice President of Pharrnacy, rheiser@mcr.health. 101 Riverfront Blvd., Suite 710, Bradenton, FL 34205 941-776-4000 mcr.health
HRSA-2026-0001-2285City of Hope National Medical Center2026-04-20T04:00Z14,977 chars
See attached file(s) 1500 East Duarte Road Duarte, CA 91010-3000 Phone 800-826-HOPE Fax 800-555-5555 CityofHope.org April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Health Resources and Services Administration (HRSA) Department of Health and Human Services (HHS) 5600 Fishers Lane Mail Stop 14W52 Rockville, MD 20857 Re: HHS Docket No. HRSA-2026-03042 Request for Information: 340B Rebate Model Pilot Program Dear Director Britton, On behalf of City of Hope National Medical Center (COH), we appreciate the opportunity to submit these comments regarding the Health Resources and Service Administration (HRSA) Request for Information: 340B Rebate Model Pilot Program. Executive Summary of City of Hope Recommendations City of Hope urges HRSA not to proceed with a rebate-based 340B model as contemplated because it would add substantial operational burden, create cash-flow disruptions, and reduce resources available for charity care, uncompensated care, and other patient-support programs funded by 340B savings. If HRSA proceeds with any pilot, freestanding cancer centers (FSCCs) that are subject to the GPO prohibition and orphan drug exclusion should be exempted or permitted to opt out, given the uniquely restrictive 340B rules already applicable to this entity type and the disproportionate impact of moving high-cost oncology drugs to WAC-at-purchase. Any pilot should include enforceable manufacturer obligations for timely payment, standardized denial rationales limited to narrow grounds (e.g., confirmed duplicate rebate already paid on the same claim), and a neutral dispute-resolution process with HRSA or an independent validator. To minimize administrative burden and protect patient privacy, HRSA should use a manufacturer-neutral, government-funded data clearinghouse (or contractor) to standardize data submission and reconciliation, rather than claim-level manufacturer-by- manufacturer processes. HRSA should harmonize requirements with state Medicaid agencies and other federal data- collection initiatives to avoid conflicting standards, duplicative reporting, and increased risk of error. Page 2 City of Hopes Interest in the 340B Program City of Hope is a National Cancer Institute (NCI)-designated Comprehensive Cancer Center and one of only 11 PPS-exempt cancer specialty hospitals in the country. We are the only freestanding NCI-designated comprehensive cancer center in California that is not affiliated with a university. In 2023, the NCI awarded City of Hope its highest possible Cancer Center Support Grant (CCSG) review rating of Exceptional, placing City of Hope in the top tier of Americas 57 NCI- designated comprehensive cancer centers. Our mission is to alleviate the burden of cancer, diabetes, HIV/AIDS, and other life-threatening diseases through scientific innovation, personalized care, and collaborative treatment models. Our integrated network includes the NCI-designated comprehensive cancer center in Duarte, California; a Southern California care network; and treatment centers in Atlanta, Chicago, and Phoenix. City of Hope also includes the Translational Genomics Research Institute (TGen) in Phoenix, a genomics research center that supports our translational research efforts. City of Hope provides highly specialized care for patients with complex cancers that require advanced clinical expertise, robust infrastructure, and sophisticated technology. Each year, we treat nearly 160,000 patients with cancer. Our blood and marrow transplant program has performed more than 20,000 transplants to date and is the highest-volume center in the United States. City of Hope investigators helped lay the groundwork for monoclonal antibody-based immunotherapies, including foundational technologies behind Herceptin, Rituxan, and Avastin, and we played a pivotal role in advancing chimeric antigen receptor (CAR) T-cell therapies. City of Hopes Use of 340B Savings and Impact of a Rebate Model Disproportionate Impact on Freestanding Cancer Centers City of Hope relies on the 340B Program to help deliver high-cost, high-complexity cancer care to vulnerable patients under uniquely restrictive program rules. As a freestanding cancer center subject to the GPO prohibition and orphan drug exclusion, our participation is already operationally complex. Moving covered outpatient drugs from upfront 340B pricing to WAC-at-purchase with a later rebate would reduce 340Bs immediate benefit, increase administrative burden, and create cash-flow volatility that could directly diminish resources available for patient assistance and uncompensated care. City of Hopes perspective on the 340B program is framed by the enormous clinical complexity and the intensity of the personalized needs of the patients that we serve, and the way in which COH utilizes 340B savings. The savings gained from the 340B program enable City of Hope to provide cancer care to vulnerable patients with unmet care needs, including low-income Medicare and Medicaid beneficiaries, as well as patients who are underinsured or uninsured. City of Hope National Medical Center features the most expansive financial assistance policy of any cancer center, with families qualifying for assistance that earn up to six times the federal poverty level. Thanks to 340B, City of Hope provided more than $56 million in charity care and $86 million in unreimbursed Medi-Cal services in fiscal year (FY) 2024. Unlike 340B-participating community-based or rural hospitals, which purchase pharmaceuticals that are intended to principally serve a general medical-surgical population, a cancer-specialty hospitals portfolio of 340B drugs is focused upon high-complexity, high-cost anti-cancer therapeutics. The rebate model shift toward purchasing these pharmaceuticals at Wholesale Acquisition Cost (WAC) versus the current 340B pricing model will disproportionately impact cashflow to cancer centers. Moreover, as a freestanding cancer center (FSCC), COH is already Page 3 subject to restrictive 340B program rules including the GPO prohibition and orphan drug exclusion. Only three FSCCs participate in this more limited 340B Program. Responses to HRSAs RFI Questions (Narrative) City of Hopes comments below address HRSAs RFI topics in narrative form, organized around the practical issues a rebate model would create for a freestanding cancer center: administrative burden and cost, staffing and IT changes, cash-flow and payment timing, denial guardrails and dispute resolution, data collection and privacy, and impacts on program integrity. These added costs and workflow changes would reduce 340B savings and, therefore, reduce resources City of Hope reinvests into patient care, including charity care, uncompensated care, and programs that improve access to affordable cancer care for vulnerable patients. They would also require staff to shift time from patient-care support functions to administrative reconciliation and dispute work. Administrative, Staffing, and IT Burden Implementing a rebate model would require City of Hope to reallocate existing 340B and related staff resources and add dedicated capacity. Currently, City of Hope expends approximately 23,000 labor hours annually, representing nearly $2 million, to manage our highly complex free-standing cancer center 340B Program. Preparation for the proposed January 1, 2026, rebate model implementation has already required 1,850 labor hours, totaling approximately $152,000. Ongoing operation of a rebate model would add an estimated 3,000 incremental labor hours annually, representing more than $311,000 in additional recurring administrative burden. Based on the current list of impacted medications, we will also require at least one additional permanent FTE if the model persists. This role would coordinate rebate-related activities, including data submission and review, defect resolution, claim-status tracking, and reconciliation across the EMR, 340B database, third-party administrator tools, Beacon, banking/ACH records, dashboards, and reporting. If additional drugs were incorporated into a rebate model, staffing needs would grow accordingly. Additional costs would also include $22,000 in IT consulting services to build a 340B database (340B database build is $220k, an estimated 10 percent is directly related to rebate model data needs). In addition, there would be recurring expenses that would include third-party solutions that may incur monthly fees (amount varies by vendor and scope); these would be recurring costs in addition to internal IT maintenance and ongoing staff time for reconciliation and audit support. Cash-Flow Disruption from WAC-at-Purchase A rebate-based model would materially disrupt cash flow for a cancer specialty hospital because we must often stock high-cost oncology drugs well in advance of administration or dispensing. As a result, City of Hope frequently incurs acquisition costs weeks before use; for critical but slower- moving medications, the lag between purchase and utilization can extend for months. Under our current wholesaler arrangements, our typical payment terms are net 7 days for both 340B and non- 340B invoices, and earlier payment can yield slightly higher discounts on some distribution channels (though not specialty distribution, where most of our spend occurs). Even if wholesalers offered longer terms (e.g., net 30), that would not align with the end-to-end timeline in a rebate model (purchase stocking administration/dispensing claim submission reconciliation rebate payment), which commonly extends beyond 30 days. As a result, a rebate model would require City of Hope to carry the full acquisition cost of high-cost oncology drugs for extended periodsoften monthsbefore receiving any rebate reimbursement, creating material cash-flow volatility. Page 4 Manufacturer Accountability, Denials, and Dispute Resolution If HRSA requires rebates to be paid (or denied with documentation) within 10 calendar days of complete data submission, HRSA should pair that requirement with enforceable accountability. At a minimum, HRSA should require standardized submission formats, standardized denial rationales limited to narrow grounds, and reporting to HRSA on payment timeliness and denial rates. In City of Hopes view, a manufacturer-neutral, independently funded data clearinghouse would be better positioned than individual manufacturers to support consistent validation, reduce friction, and help HRSA monitor adherence to payment-timing requirements. A neutral, independently funded data clearinghouseone not financially supported by manufacturerswould be better positioned to objectively oversee and enforce any payment-timing requirements outlined in the program guidance. With respect to avoiding duplicate discounts across the 340B program and CMS payment programs, the rebate model does not add additional value. City of Hope has established robust, system-driven controls to prevent duplicate discounts across all settings, including mixed-use, in-house retail, and contract pharmacies. Claims are systematically identified, appropriately designated, and billed with required modifiers. Exclusion files, billing indicators, automated TPA logic, and targeted work queues are used to ensure duplicate discounts do not occur. The core challenge is that covered entities are expected to prevent duplicate discounts without visibility into rebate activity between states and manufacturers. Rather than imposing a burdensome rebate model that adds little value, covered entities should be given access to state rebate payment dataaligned with matching ICNs on payer remittancesso duplicate discounts can be accurately reconciled and appropriately addressed. In addition, to these considerations, we also respectfully raise the concern that implementation of the proposed rebate model might be viewed as a level of overreach in regard to the Agencys authority in the domain of 340B regulation. In Albany Med Health System v. HRSA (D.D.C. Mar. 3, 2026), the court vacated HRSAs child-site registration precondition on the basis that it imposed an extra-statutory term of eligibility that the agency lacked authority to impose as a condition of child-site 340B program eligibility. Id. At 10. By imposing mandatory data submission requirements and rebate requests prior to allowing access to 340B prices, HRSA creates an impermissible precondition to accessing statutory discounts. The rebate models replicate the same legal defect that the court identified in Albany. We believe this program represents overreach by attempting to reengineer the fundamentals of the 340B program through added administrative requirements rather than through the statutory framework Congress established. Conclusion A rebate model would not strengthen 340B program integrity for freestanding cancer centers. Instead, it would add operational and regulatory complexity to a program that is already difficult to administer under the GPO prohibition and orphan drug exclusion. It would also divert staff time and financial resources away from core compliance activities, and reduce funds available for charity care, uncompensated care, and patient support programs. The rebate approach would also undermine the purpose of 340Bto help covered entities stretch scarce resourcesby adding significant administrative expense and cash-flow volatility that reduces funds available for patient care. Our 340B program is already highly difficult to administer and adding a rebate model on top of these requirements introduces yet another layer of operational and regulatory complexity. This additional burden diverts critical time and resources away from maintaining core 340B compliance, which can compromise 340B program integrity. Page 5 For these reasons, City of Hope respectfully urges HRSA to refrain from implementing a rebate- based 340B model. If HRSA proceeds with a pilot, HRSA should (1) exempt or allow opt-out for freestanding cancer centers subject to the GPO prohibition and orphan drug exclusion; (2) establish a manufacturer-neutral, government-funded data and reconciliation approach; and (3) impose enforceable, standardized requirements for timely payment, narrowly limit denial bases, transparency, and independent adjudication. We appreciate HRSAs consideration of these comments and welcome continued engagement on approaches that protect program integrity while minimizing administrative burden. Sincerely, Harlan Levine, M.D. Joseph Alvarnas, M.D. President, Healthcare Innovation & Policy Vice President, Government Affairs Professor, Division of Leukemia, Department of Hematology
HRSA-2026-0001-2286ChesPenn Health Services2026-04-20T04:00Z9,582 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of ChesPenn Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Using our contract pharmacy data for October 2025 through March 2026, ChesPenn recorded approximately 1,444 thirty-day supplies across the identified drugs, which annualizes to approximately 2,887.27 thirty-day supplies. At wholesale acquisition cost, the affected drugs would have required $256,056.17 in up front drug spend for the 6-month period, or $512,112.34 annually. The net cost reflected after rebate was still $22,690.82 out of pocket for the 6-month period. Additionally, this rebate model produces a monthly cash flow needed of $38,894.23 for this slice of our program alone. Even more concerning, these calculations reflect only a subset of our 340B activity. They are limited to the contract pharmacy workbook provided to us and do not include the rest of our 340B program, including any additional dispensing channels, patient assistance impacts, software modification costs, staffing costs, or wholesaler credit effects. Accordingly, the true operational and financial exposure to ChesPenn would almost certainly be greater than the figures cited here. A rebate model would also impair our ability to continue providing affordable medications at the point of sale. Community health centers are expected to stretch scarce resources and support 2 access for uninsured and underinsured patients. Requiring covered entities to front full acquisition cost and wait for retrospective rebate processing creates uncertainty that is fundamentally inconsistent with the role the 340B program plays in safety net care. I. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. II. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 3 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. III. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion ChesPenn Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and 4 staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. ChesPenn Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ChesPenn Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact David Ruvolo, Chief Compliance Officer at druvolo@chespenn.org. Sincerely, Susan Harris-McGovern President and CEO ChesPenn Health Services
HRSA-2026-0001-2287University of Rochester Medicine2026-04-20T04:00Z35,369 chars
See attached file(s) 1 Submitted electronically via www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of UR Medicine, upstate New Yorks largest and most comprehensive healthcare system, we are grateful for the opportunity to comment on the U.S. Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Our answer is unequivocally no. UR Medicine serves over 3 million people across a 27-county catchment area with its eight hospitals. Three of these facilities participate in the 340B program: Strong Memorial Hospital (a 340B covered entity teaching hospital in Rochester, home to the regions only Level 1 Trauma Center, childrens hospital and other highly specialized services), Jones Memorial Hospital in Allegany County (a Sole Community Hospital), and Soldiers and Sailors Memorial Hospital of Yates County (a Critical Access Hospital). Participation in 340B is crucial, allowing us to expand access to care for vulnerable patients throughout New Yorks Finger Lakes and Southern Tier regions and helping our rural hospitals keep their doors open. The communities we serve face significant challenges, with 26 of 27 counties having poverty rates higher than the U.S. average, and residents experiencing higher rates of chronic diseases, mental health and substance use disorders, and lower rates of preventive screenings. The 340B program is essential to addressing these 2 disparities and supporting the health of these communities, all without additional cost to taxpayers. The flexibility inherent in the 340B program allows UR Medicine to tailor programs and services to meet these unique needs. Beyond offering low- and no-cost medications, 340B savings enable vital services such as transitional supportive housing for high-risk patients, expanded substance use disorder treatment, oncology care at 13 regional locations, comprehensive mental health and wellness care, and supports pediatric and maternal health. For instance, without 340B, Jones Memorial Hospital, the sole provider of labor and delivery services in Allegany County, would be unable to sustain this critical unit, putting mothers and babies at risk in an underserved area. Furthermore, 340B helps mitigate significant financial losses from rising drug prices, temporary staffing, and chronic underpayment by government payers like Medicare and Medicaid. The 340B program has also allowed Jones to bring oncology, neurology, and rheumatology services from urban areas to our rural communities. Jones Memorial was recently recognized as one of the Top 20 Rural and Community Hospitals in the nation by the National Rural Health Association a recognition that wouldnt have been possible without the 340B program. We believe this pilot program is a response to a non-existent program integrity problem that drug manufacturers have created in public discourse to effect changes to the program to increase their already massive profits at the expense of safety net hospitals that are struggling to break even, let alone make a margin. Covered entities like Strong Memorial Hospital already implement robust internal policies and procedures, coupled with advanced technological solutions, specifically designed to prevent duplicate discounts and ensure strict adherence to all 340B program requirements. These comprehensive safeguards are regularly reviewed, monitored, and updated. The effectiveness of these measures has been consistently confirmed by clean audit reports, including: A recent manufacturer audit initiated by Johnson & Johnson and conducted by Deloitte, an international compliance firm, yielded no findings or recommendations. Clean audit reports from HRSA for Jones Memorial Hospital and Soldiers and Sailors Memorial Hospital 340B programs, conducted by The Bizzell Group in April of 2024. Moreover, Medicaid agencies in states like New York have comprehensive policies for identifying 340B transactions, using claim-level identifiers during the billing process. The substantial investment in compliance infrastructure by covered entities underscores our unwavering commitment to preventing any form of program abuse and ensuring that the benefits of 340B reach the intended vulnerable patient populations. Therefore, the premise that widespread program integrity issues necessitate such a fundamental shift in the 340B 3 model appears to overlook the comprehensive oversight and diligent compliance efforts already in place across the program. As explained below, any rebate mechanism would impose enormous costs and burdens on UR Medicine that far outweigh any benefits it might yield. More fundamentally, HRSAs desire to test a rebate model appears to rest on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. When establishing the 340B program, Congress made clear that its intent was to enable safety-net providers to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. This legislative purpose reflects the programs design as a support mechanism for covered entities and the vulnerable patient populations they serve. As HRSA evaluates potential policy changes, maintaining alignment with this foundational objective should remain a central consideration. Moving from an upfront discount to a rebate model would represent a radical change to the program. Preserving the upfront discount mechanism, which UR Medicine has relied on for years, and which pharmaceutical manufacturers have agreed to for decades as a condition of the Pharmaceutical Pricing Agreement, is the best way to fulfill the 340B program's purpose. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. UR Medicine has provided detailed answers in the limited time available to respond. For purposes of estimating costs, we have assumed that any future Rebate Program proposal will include the drugs approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased from those we calculated for the 2026 drugs alone. After all, more drugs and more drug companies mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that UR Medicine can spend on patient care and comprehensive health care services. HRSA notes that covered entities purchased $81.4 billion in covered outpatient drugs under the 340B Program in 2024. While this figure accurately reflects the programs scale, its interpretation requires consideration of broader market and clinical factors that influence aggregate purchasing trends. Analysis of publicly available data from 2018 through 2024 indicates that, while drug acquisition costs increased during that time, growth in aggregate purchasing reflects, in significant part, underlying pharmaceutical price inflation and evolving patient needs rather than changes in program utilization alone. Consideration of these contextual drivers is important to ensure that policy decisions are informed by a comprehensive understanding of healthcare market dynamics and do not inadvertently misattribute the causes of program growth. These trends highlight that a 4 rebate model, by shifting upfront costs to covered entities, would significantly amplify financial exposure and cash flow volatility, particularly given the substantial pharmaceutical price inflation observed. This volatility would also happen at the same time as providers will be facing dramatic changes in insurance coverage due to the implementation of P.L. 119-21. All metrics are indexed to 2018 = 100. CMI is shown on the secondary axis because the range of changes is smaller. In the context of the proposed 340B Rebate Model Pilot, these dynamics are particularly relevant. A rebate-based approach would shift covered entities from receiving upfront discounts to operating in a reimbursement environment where they must initially absorb acquisition costs and await retrospective payment. During a period marked by significant pharmaceutical price inflation and ongoing financial pressure on safety-net providers, this shift could introduce material cash flow volatility and operational risk, especially for hospitals serving a high proportion of publicly insured or uninsured patients. If aggregate purchasing growth is driven in part by rising drug prices rather than changes in program utilization, a rebate structure may amplify financial exposure without addressing the underlying drivers of cost escalation. Careful consideration of these factors will be important to ensure that any pilot model preserves the programs ability to support access to care and does not inadvertently destabilize providers that rely on predictable upfront discounts to sustain essential services. Financial and Operational Challenges of a Rebate Model Transitioning to a rebate model would create catastrophic financial and operational challenges for safety net providers, potentially undermining the core mission of the 340B program and putting drug manufacturers in control of program benefits rather than HRSA and HHS, as required by law. Among our 340B covered entities, we estimate substantial 100 102 104 106 108 110 0 50 100 150 200 250 300 350 Year 2018 2019 2020 2021 2022 2023 340B Spending Growth in Context: Drug Prices and Patient Complexity NADAC Index 340B Program Spending Index CMI Index 5 losses from additional contract pharmacy restrictions, as well as roughly $13.4 million in annual losses from potential rebate denials, loss of distributor discounts, and cash flow constraints from delayed rebates. This would significantly eat into the benefits of the 340B Program. Currently, drugs procured at 340B pricing provide cost of goods (COG) savings under our Prime Vendor Agreement (PVA). Transitioning from upfront 340B discounts to a rebate- based system will disrupt this process in multiple ways. A primary concern is the potential loss of our current 7-day Days on Hand (DOS) discount terms. A 10-day payment structure for rebates would compel entities to either absorb the financial risk for pharmaceutical manufacturers or forgo these valuable 7 DOS discounts, both of which carry substantial costs. Furthermore, the cash flow impact is significantly exacerbated by the time between drug purchase and actual use, particularly for expensive, slow-moving inventory. For example, a high-cost drug sitting on the shelf for weeks before administration means the entity has paid the Wholesale Acquisition Cost (WAC) upfront, incurring a substantial financial burden until the rebate process can even begin, upon administration or perhaps billing of the drug. The cost of ageing inventory must be considered, not just the time difference between the rebate payment and the invoice date. While we cannot disclose specific, confidential terms of our PVA, we estimate that the combined cash flow and PVA implications will result in at least $1.1 million in unrecoverable losses per month. This calculation is based on the initial drugs within the scope of the IRAs Maximum Fair Price list for 2027, and specifically accounts for cash flow implications, inevitable rebate denials, and the loss of COG discounts for drugs purchased for facility administration and dispensed from hospital-owned pharmacies. Increased Administrative Costs and Burdens Calculating the comprehensive administrative costs of operating UR Medicines 340B program poses challenges due to its integrated nature across multiple departments. However, we can state that the direct administrative costs, specifically for program staff and vendors, currently represent a small percentage of the overall program benefit. As the statute intends, the savings and revenue generated as a 340B covered entity are reinvested directly into patient care and services, allowing our participating UR hospitals to 'stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.' Without the 340B program benefit, UR would undoubtedly offer fewer services, thereby reducing administrative costs. It's also important to note that managing the frequent program changes imposed by the pharmaceutical industry over the past five years has significantly strained resources. This has often forced UR Medicine, along with safety-net providers nationwide, into a reactive mode, diverting staff from routine operational and compliance monitoring to address ever-changing, manufacturer- specific policies and mitigate potential losses. It is this experience over the past five years 6 that raises grave concerns about a rebate pilot policy that could place manufacturers in a position of power to perpetuate this inconsistent, ever-changing, and reactive model, or worsen it. Any rebate program would require UR Medicines 340B entities to incur new administrative costs, far beyond what we had expected and planned for as a 340B hospital. Key cost drivers would include: Increased Staffing: UR Medicine has dedicated 15 full-time equivalents (FTEs) specifically to 340B oversight. A rebate model would require additional staff hours and new hires to manage the likely varying requirements of each individual rebate program, including claims-level tracking, reconciliation, rebate request submission, monitoring, disputing denied claims, and expanded reporting. HRSAs current estimate of only 5 hours per week for additional work is a gross underestimate, as evidenced by our recent experiences. For instance, just two months into the Inflation Reduction Act's (IRA) maximum fair price (MFP) policy, UR Medicine is already encountering significant challenges. By the end of February, Strong had over 500 rebates requiring dispute resolution because manufacturers had failed to pay MFP rebates for non-340B prescriptions, resulting in more than $200,000 in outstanding amounts. This represents not only a substantial financial impact but also an extremely challenging operational burden, as the dispute process is proving to be manual and onerous, requiring entities to follow a multi-step procedure to meticulously prove that each rebate was indeed due. Early estimates suggest that each prescription takes at least 20 to 30 minutes to work through the dispute process. Furthermore, the current data submission process with Second Sight Solutions other platform, 340BESP, is another area for lessons learned. On March 3, 2026, Strong Memorial Hospital received notification from 340BESP that the volume of 340B purchases for a designated pharmacy exceeded the conforming claims submitted. The email stated, If your covered entity fails to submit conforming claims consistent with the volume of 340B purchases for your contract pharmacy, your covered entity may lose access to 340B pricing at its contract pharmacy. An analyst employed by Strong conducted a detailed reconciliation of the purchases and corresponding prescription data, verifying that there was no imbalance. In fact, upon further investigation, he confirmed that the same information was available on the 340BESP portal. It is unclear why the notification and threat of pricing revocation were received. This information has been reported to the 340BESP support team. Unfortunately, this type of notification from 340BESP and the additional resources required to manage it are not uncommon for URs 340B hospitals. 7 This type of activity will undoubtedly increase exponentially if we are forced to move to a Beacon-administered rebate model for 340B activity across all settings, making HRSA's staffing estimates entirely unrealistic. IT Systems: Significant new investments in information systems, software, and data infrastructure would be required for claims-level tracking, reconciliation across wholesalers, pharmacies, and manufacturers, and expanded reporting. These costs would be both one-time for setup and recurring for ongoing maintenance and updates. Our existing data infrastructure, including feeds to Third-Party Administrators (TPAs), is built to each vendor's specific requirements. These feeds are automated and incorporate different, often more comprehensive, information than what would or could be submitted in response to a rebate policy. Managing data to and from these various vendors already presents its own challenges, given the need to work with different systems across diverse pharmacy arrangements and settings. While these scenarios can be challenging, they at least serve a business or operational purpose, supporting patient care and value-add objectives. The new data management required for the rebate pilot will not alleviate any of these existing complexities, nor could these existing workflows be leveraged. Instead, it will only add burdensome workflows, increasing both compliance and financial risk. In most cases, the data provided to TPAs would not align with the data necessary to satisfy rebate requests. This is because covered entities send different datasets depending on the specific setting. For example, Strong Memorial Hospital provides ePrescription data and a couple of other routine files to TPAs for contract pharmacy relationships; none of this data would be relevant for a rebate request submission. This is because ePrescription data represents a medication prescription that has been transmitted to a pharmacy, which may or may not result in a dispensed prescription, let alone one qualified for Strongs 340B program. Data submitted for rebates must specifically represent dispensed and qualified 340B prescriptions. Additionally, most internal activities for Strongs facility-administered and hospital- owned pharmacies are managed in-house, without TPA support, creating a further disconnect with a rebate-based system. Furthermore, it is particularly difficult to provide medical claims data through such platforms/feeds. Unlike pharmacy claims, which are adjudicated in near real time, medical claims often involve complex coding, review, and billing processes that can result in significant delays between administration, billing, and payment. Many covered entities would face substantial operational challenges in providing finalized medical claims data when a rebate determination is required, as claims may still be pending, under review, or subject to payer-specific processing timelines. By 8 contrast, medical charge data is typically generated at the point of administration or dispensing and contains nearly all relevant clinical and financial data elements needed to verify utilization. Allowing submission of charge data in lieu of finalized claims data would be significantly more operationally feasible while still supporting program integrity objectives. To this end, it must be understood that these claims will be extremely challenging to map to remittance or rebate data on the backend due to timing constraints and a general lack of identifying elements in the data. Third-Party Vendors: We anticipate needing to engage third-party administrators to provide technology solutions for overseeing and managing a complex rebate program. The current vendors, often acting as agents for the pharmaceutical industry, impose one-sided and unfair terms, making them unreliable for honest, line-item level rebate adjudication. Our experience with platforms like Beacon/340BESP further highlights this issue, as we've observed a seemingly biased approach to applying data configurations and rules. Further details regarding these challenges are shared in the 'Problems With the Beacon IT Platform' section. This necessitates contracting with independent technology vendors under fair terms, which would incur substantial new costs for our institution. While UR Medicine is unable to disclose specific contractual details regarding third- party administrator and vendor costs and contract pharmacy dispensing fees, we can share that these fees vary significantly. This range depends on the specific vendor, pharmacy, and type of medication involved. While safety net providers are sometimes compelled to accept less-than-desirable financial terms, these relationships are, for the most part, negotiated in good faith with fair-market-value considerations. These vendor and pharmacy relationships are necessary for safety net providers to manage the complex operations of the 340B program and ensure compliant, optimal program participation. While UR Medicine would support mindful guardrails for vendors in the 340B space, they generally do provide an important service. On the contrary, safety net providers are often subject to contracts of adhesion with pharmacy benefit managers (PBMs), which can result in these for-profit organizations dictating lower payment terms for prescriptions dispensed by pharmacies owned by safety net providers. These terms undermine the intent of the 340B program and constitute an egregious example of for-profit organizations profiting unnecessarily. Compliance Activities: Increased program transparency and reporting requirements will significantly increase the resources needed to manage these tasks, potentially putting existing compliance oversight protocols at risk. 9 Legal Review, Training, Consulting Services: These would represent additional costs, likely both one-time and recurring, associated with implementing a new, complex rebate program. HRSAs assertion that data submitted by covered entities to manufacturers will be comparable to existing data is incorrect. New reporting frameworks that vary by manufacturer or require bespoke formats would create a significant administrative burden, increase the risk of reporting inconsistencies, and divert resources away from other compliance, administrative, and operational activities. Requests for expansive datasets beyond what is operationally relevant could introduce unnecessary complexity, increase privacy risks, and expose proprietary information. Given the sensitive nature of healthcare data, broad or poorly defined data requests also raise important patient privacy considerations. Covered entities must ensure compliance with the Health Insurance Portability and Accountability Act (HIPAA) and other federal and state privacy protections when sharing claims or patient-related information. The transmission of large datasets to multiple manufacturers or third-party entities would require significant safeguards, including processes for de-identification, secure transmission, and ongoing data governance. These requirements introduce additional administrative burden and potential compliance risk if not carefully standardized and limited to the minimum data elements necessary to support program integrity objectives. Problems With the Beacon IT Platform Our experience with the IRA's maximum fair price policy, which utilizes the Beacon portal for dispute resolution, has highlighted significant issues. The current dispute process is highly manual, requiring multiple interventions for each prescription. It begins with initiating a dispute in the Beacon portal, which then requires entities to identify corresponding 340B transactions and submit this data via the 340B ESP portal. The relevance of 2025 340B data for determining the status of non-340B prescriptions dispensed in 2026 remains unclear, yet entities are compelled to follow Beacon's directives despite ongoing questions about its authority. As we discussed previously, the challenges with the 340BESP platform offer another critical lesson. Strong Memorial Hospital, like other UR 340B hospitals, has experienced unwarranted notifications from 340BESP regarding alleged imbalances between 340B purchases and conforming claims. Internal reviews consistently confirm that purchasing data and prescription activity display normal workflows, with no abnormal patterns indicating variance or inconsistencies. Despite this, each inquiry and the associated threat of pricing loss still require significant resources to address. This recurring issue further underscores that a rebate-only model would not alleviate, but rather exacerbate, existing data submission burdens. 10 Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform. We were forced to accept unfavorable, non- negotiable terms and conditions, despite our reasonable requests for redlines that Second Sight Solutions refused to accommodate. The existing terms grant Beacon the right to unilaterally change or introduce new conditions. There is a strong desire to ensure that any external documents, such as FAQs, are treated as guidance rather than binding rules. Protecting shared data is also a critical concern, and Second Sight is requested to ensure proper data protection, compliance with privacy laws, and effective anonymization of patient information. The current terms are seen as unfair, placing all risk on the covered entity while capping Second Sight's liability at a minimal amount. To ensure a potential 340B Rebate Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, we recommend: Guaranteed payment timelines with enforceable penalties. Interest accrual for delayed rebates. Transparent and timely adjudication processes. Mechanisms to mitigate liquidity risk. Standardized data formats and limitations to essential data elements. Strong protections for patient privacy and proprietary information, with alignment to existing reporting structures. Data provided to a third party solely for claiming rebates should not be used for any other purpose without explicit written agreement from the covered entity, and such permission should not be a mandatory term and condition of the agreement with the third party, as it currently is. Mandatory documentation requirements established by HRSA, applied uniformly. A clearly defined appeal process established by HRSA. Consideration of an independent review mechanism to adjudicate contested determinations. Similarly, Eli Lilly and Novo Nordisks attempts to implement data requirement policies carry parallel risks, as they rely on similar 340BESP functionality. These policies lack essential guardrails for standardization, a clear change-control process, and a defined neutral review mechanism for contested determinations. Adverse Impacts of These Additional Costs and Burdens All these many different costs and burdens add up. Unfortunately, that means that UR Medicine will no longer be able to use our 340B savings as effectively and comprehensively 11 as we have under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The incremental costs would likely force UR Medicine to offer fewer services, reduce or cut patient services, and pause or cancel critical projects. Our smaller hospitals may no longer be able to stock high-priced drugs because we cannot afford to cover the difference between the full price and the 340B price, which directly affects patient care. Uncertainty over whether HRSA will proceed with a rebate program has already affected our hospitals financial planning, causing us to delay certain projects. And for hospitals like Jones Memorial in Wellsville, New York, 340B savings are essential to keeping their doors open and maintaining access to acute hospital and emergency services in Allegany County, one of the poorest and most rural counties in New York State. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has consistently provided discounts through upfront pricing rather than post-sale rebates since its inception. UR Medicine reasonably relied on this history when designing its internal operations, staffing (including 15 dedicated FTEs), third-party contractual relationships, and financial planning for the use of 340B savings, all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model and given the massive costs and patient impact that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Our 340B savings through upfront discounts are budgeted directly into our finances, supporting cash-on-hand financial projections and annual operational planning. These savings are reinvested directly into patient care and services, allowing our participating UR hospitals to stretch scarce Federal resources as far as possible. The program also helps mitigate significant losses from rising drug prices, temporary staffing shortages, and chronic underpayment by payers such as Medicare and Medicaid. A shift to a rebate model would undermine our long-term planning for new services and repairs, as well as our ability to sustain essential services. Efforts To Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a 12 rebate mechanism will impose on UR Medicine, HRSA should rely on those other options. Should HRSA nonetheless proceed with a rebate mechanism, it is imperative that rebate policies allow denial only upon identification of an MFP or Medicaid duplicate discount. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities served. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. We urge HRSA to adopt a third-party clearinghouse rather than a rebate mechanism to advance 340B/MDPNP deduplication, program integrity, and other potential benefits. A neutral, third-party clearinghouse offers a less burdensome, more standardized, and impartial mechanism for preventing duplicate discounts. Such a model could allow covered entities to submit limited, standardized data to a centralized platform where transactions could be compared against Medicaid and Medicare rebate claims using consistent validation rules. This approach would avoid the inherent conflicts of interest, operational inconsistencies, and administrative complexities associated with manufacturer-controlled rebate review processes. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Current approaches to Medicaid duplicate discount prevention rely on a combination of HRSA database elections, state-level billing processes, and covered entity compliance systems. While these mechanisms have allowed the program to function, they are fragmented and administratively complex. A clearinghouse-based approach could provide a more consistent, transparent, and scalable framework for identifying and resolving potential duplicate discounts. The proposed neutral clearinghouse could also solve recent problematic moves by pharmaceutical manufacturers. For example, Eli Lilly and Novo Nordisk have rolled out similar data-sharing policies, but with no guardrails, standardization controls, or an impartial dispute-resolution process. For all these reasons, UR Medicine respectfully submits that the negative impact of any Rebate Program will outweigh any expected benefits. HRSA should therefore abandon the concept altogether and embrace a neutral, third-party clearinghouse. A neutral clearinghouse framework could be implemented as a targeted pilot, allowing HRSA to evaluate standardized data validation and duplicate discount prevention mechanisms while preserving the operational stability of the existing upfront discount structure. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow UR Medicine and other covered entities to comment on the specifics of its new program. While 13 we have endeavored to provide the most detailed information possible, we do so without precise knowledge of which drugs will be included in a Rebate Program or of many other critical details (e.g., data requirements, grounds for denying rebates which, in our view, should only allow for denial based upon identification of a duplicate discount such as an MFP or Medicaid discount, dispute-resolution processes, and other guardrails). A failure to permit additional comments on the specific features of the program will, in effect, be a wholesale failure to consider important aspects of the problem. Thank you again for the opportunity to comment. We welcome the opportunity to engage in stakeholder discussions and help craft balanced solutions that support all parties while preserving the 340B programs mission, enabling safety-net providers to stretch scarce resources and better serve their patients and communities without adding to taxpayers' costs. Please dont hesitate to reach out to us if you need any further information or clarification. We look forward to working together on practical, sustainable solutions. Sincerely, David C. Linehan, M.D. CEO, University of Rochester Medical Center Dean. School of Medicine and Dentistry Senior Vice President for Health Sciences Kathy Parrinello, RN, PhD, FACHE President & CEO Strong Memorial Hospital and Highland Hospital James Helms, FHFMA, CPA President& CEO Jones Memorial Hospital Jose Acevedo, M.D., MBA President & CEO Finger Lakes Health
HRSA-2026-0001-2288AltaMed Health Services Corporation2026-04-20T04:00Z44,173 chars
Comments are being submitted on behalf of AltaMed Health Services Corporation. 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of AltaMed Health Services Corporation (AltaMed), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: AltaMed anticipates a significant loss from entity-owned pharmacy operations and a 10% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. For over 55 years, AltaMed has operated as a nonprofit federally qualified health center (FQHC), providing high-quality, comprehensive, and affordable primary and preventive care across Southern California. We serve more than 700,000 individuals with integrated medical, dental, behavioral health, pharmacy, vision, and other essential servicesoften acting as the only accessible source of care for hardworking individuals and families. Our pharmacies further expand access with affordable medications, lower-cost generics, diabetes management, and free delivery, particularly in underserved communities. As such, we strongly urge HRSA to exempt Community Health Centers from the 340B Rebate Model Pilot Program. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For AltaMed in particular, this change would affect approximately over 1 million 340B transactions, impacting more than 100,000 patients. In addition, this would substantially limit our ability to provide critical services that keep patients engaged in treatment and support improved health outcomes in the community. This includes glucose monitors at no cost to help patients manage diabetes, transportation vouchers that ensure patients can get to critical clinic appointments, and free home delivery of medication that many patients depend on to maintain consistent care and avoid interruptions in treatment. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOAC (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, 1 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: AltaMed provided sliding fee discounts in 2025 through its Sliding Fee Discount Program, offering reduced-cost medications and medical services. Under a rebate model, we would no longer be able to provide a sliding fee scale at the point of dispensing. Staffing Impact: AltaMed anticipates needing two additional FTEsequivalent to 4,160 hours per yearto address the increased regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, AltaMed anticipates an additional increase of $15,000 in costs, along with a $5,000 monthly fee for external support venders. These vendors may include 340B consultants, legal counsel, program coordination, third- party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 For AltaMed, this translates to an estimated organizational impact of approximately 2 additional FTEs to manage the increased administrative and reporting workload associated with program requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually, and AltaMeds estimated costs for additional staffing would be approximately $124,000.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that 4,160 hours annually will be needed to manage the increased administrative and reporting workload associated with program requirements, including the submission of 340B rebate claims through a third-party platform, assuming full adherence to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. AltaMed urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $15,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. We estimate these recurring costs will be at least $5,000 annually, representing a permanent expense that reduces our 340B savings. Total Cost: For AltaMed, which serves approximately 100,000 patients receiving prescriptions through the 340B program, the total projected increase in expenses including labor, IT, and carrying costsis estimated at least $144,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools, including an additional $15,000 in costs to AltaMed. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. AltaMed currently partners with over 100 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per- claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 100 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Southern California with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs 12 HRSA FAQ 8 to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Based on our organizations data, the proposed rebate model would result in a 2887% increase in upfront capital required for procurement.15 This increase in costs will have a devastating impact 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14 https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 Costs are estimated based on the period January 2025 through August 2025. 9 on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover upfront costs of purchasing drugs and operationalizing the rebate, AltaMeds ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. A. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. AltaMed asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. In our region, where patients have no choice but to rely on AltaMed, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our patients depend on. A. Financial Impact of Rebate Denials and Delays AltaMed urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously 10 proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a damaging net annual loss. A sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or 12 dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and 13 audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion AltaMed strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. AltaMed believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. AltaMed appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Bertha Alisia Guerrero, Associate Vice President of Government Affairs at beguerrero@altamed.org. Sincerely, Berenice Nuez Constant Senior Vice President of Government Relations and External Affairs AltaMed Health Services
HRSA-2026-0001-2289MEDNORTH HEALTH CENTER2026-04-20T04:00Z80,347 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of New Hanover Community Health Center, DBA Mednorth Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Impacts: Mednorth Health Center anticipates that a rebate model would increase our upfront spending greatly. In 2026, the projected rebate model could cost us upwards of 2.6 million dollars in increased spending. This is roughly a 301000% increase compared to where we are now. To purchase the drug at wholesale cost and then have to wait for a rebate payment would significantly affect cash flow and the possibility of even having the drug to provide to our patients. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Mission Statement: Building a Healthier Community. Vision: To serve as a medical home for all our patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MedNorth Health Center, in particular, this means it will impact: The ability for us to help patients afford their medication. We have filled 47,145 prescriptions for our patients at our 1 health center in Wilmington, NC. The ability to assist patients with high copays ($133,000 in high copays paid by the health center to lower patient responsibility, FY 2025. Patients otherwise wouldve opted out of taking their medications. I cant get it, my copay is too high.) The ability to provide medications at no cost to Wilmington, NC area homeless population ($6200 in copays paid by the health center so patients have no cost medications. FY 2025) The 340B revenue pays the salaries of various staff from the health center. We are experiencing tremendous growth in our service area and the 340B program allows the stretching of scarce federal resources and we reinvest in the health of our community. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 3 of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Mednorth Health Center provided $2,091,431.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Mednorth Health Center anticipates needing 1.2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. 5 External Vendor Costs: Given increased complexity, Mednorth Health Center anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Due to the complex nature of the rebate program and the newness of all the required data, we are not sure of the cost that may be incurred. This causes great stress for the health center leadership as we ponder how to navigate the uncertainty of the program that has allowed us to care for our patients. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Mednorth Health Center believes we will need to hire 2 FTEs to properly maintain records, submit and reconcile claims data, and monitor for compliance. Not getting prices upfront will complicate our mission of providing care, while ensuring they have access to their medications. The unknown of appropriate pricing upfront makes this a logistical nightmare that seems unreasonable to force on safety net providers, operating on a mission to serve others. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 8 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mednorth Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. All rebate program manufactures should request the same data elements and have the same rebate policy. However, Federally Qualified Health 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Centers should be exempt from the rebate program. We simply do not have the resources to navigate this rebate program and plead with HRSA to exclude health centers. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Mednorth Health Center saves money by monitoring all in-house pharmacy claims. We do not have a Third-Party Administrator. The complexity of the rebate program may require the unnecessary expense of a TPA program that we have historically monitored on our own. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 2 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 33 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 33 different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Internal NACHC survey data 7 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Mednorth Health Center helps patients afford their medications every day using the successful 340B program. Discounts offered to the health center upfront for medication allows us the ability to 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 provide medications to patients on that same day, without worrying if we are providing something to a patient that we will not be reimbursed for. Our patients have very limited incomes, mostly <200% FPL. If they have insurance, its usually insurance with catastrophic type coverage. Which means, the insurance is not that great and doesnt really offer a benefit to the patient. These plans have very high deductibles, which usually means medications are unaffordable. The 340B discount program allows the health center to provide the medication using our discount program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,683,086.70 annually to purchase these 10 drugs under the proposed rebate model. The total amount spent on rebate drugs in 2025 was $391,472.79. This represents a 685% increase in upfront capital required for procurement. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mednorth Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Mednorth Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $305,828.98 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Financial Impact of Rebate Denials and Delays Mednorth Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $153,727.97. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 12 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Mednorth Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications 13 required by law. Mednorth Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mednorth Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Amy Alphin, Pharmacy Director Althea Johnson, Chief Executive Officer Mednorth Health Center April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of New Hanover Community Health Center, DBA Mednorth Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Impacts: Mednorth Health Center anticipates that a rebate model would increase our upfront spending greatly. In 2026, the projected rebate model could cost us upwards of 2.6 million dollars in increased spending. This is roughly a 301000% increase compared to where we are now. To purchase the drug at wholesale cost and then have to wait for a rebate payment would significantly affect cash flow and the possibility of even having the drug to provide to our patients. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Mission Statement: Building a Healthier Community. Vision: To serve as a medical home for all our patients. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For MedNorth Health Center, in particular, this means it will impact: The ability for us to help patients afford their medication. We have filled 47,145 prescriptions for our patients at our 1 health center in Wilmington, NC. The ability to assist patients with high copays ($133,000 in high copays paid by the health center to lower patient responsibility, FY 2025. Patients otherwise wouldve opted out of taking their medications. I cant get it, my copay is too high.) The ability to provide medications at no cost to Wilmington, NC area homeless population ($6200 in copays paid by the health center so patients have no cost medications. FY 2025) The 340B revenue pays the salaries of various staff from the health center. We are experiencing tremendous growth in our service area and the 340B program allows the stretching of scarce federal resources and we reinvest in the health of our community. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Mednorth Health Center provided $2,091,431.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Mednorth Health Center anticipates needing 1.2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Mednorth Health Center anticipates an increase in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Due to the complex nature of the rebate program and the newness of all the required data, we are not sure of the cost that may be incurred. This causes great stress for the health center leadership as we ponder how to navigate the uncertainty of the program that has allowed us to care for our patients. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Mednorth Health Center believes we will need to hire 2 FTEs to properly maintain records, submit and reconcile claims data, and monitor for compliance. Not getting prices upfront will complicate our mission of providing care, while ensuring they have access to their medications. The unknown of appropriate pricing upfront makes this a logistical nightmare that seems unreasonable to force on safety net providers, operating on a mission to serve others. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 8 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Mednorth Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. All rebate program manufactures should request the same data elements and have the same rebate policy. However, Federally Qualified Health Centers should be exempt from the rebate program. We simply do not have the resources to navigate this rebate program and plead with HRSA to exclude health centers. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Mednorth Health Center saves money by monitoring all in-house pharmacy claims. We do not have a Third-Party Administrator. The complexity of the rebate program may require the unnecessary expense of a TPA program that we have historically monitored on our own. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 2 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 33 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 33 different pharmacy locations to ensure rebates are paid correctly. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Mednorth Health Center helps patients afford their medications every day using the successful 340B program. Discounts offered to the health center upfront for medication allows us the ability to provide medications to patients on that same day, without worrying if we are providing something to a patient that we will not be reimbursed for. Our patients have very limited incomes, mostly <200% FPL. If they have insurance, its usually insurance with catastrophic type coverage. Which means, the insurance is not that great and doesnt really offer a benefit to the patient. These plans have very high deductibles, which usually means medications are unaffordable. The 340B discount program allows the health center to provide the medication using our discount program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,683,086.70 annually to purchase these 10 drugs under the proposed rebate model. The total amount spent on rebate drugs in 2025 was $391,472.79. This represents a 685% increase in upfront capital required for procurement. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Mednorth Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Mednorth Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $305,828.98 This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Financial Impact of Rebate Denials and Delays Mednorth Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $153,727.97. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Mednorth Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Mednorth Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Mednorth Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Amy Alphin, Pharmacy Director Althea Johnson, Chief Executive Officer Mednorth Health Center
HRSA-2026-0001-2290Amity Medical Group2026-04-20T04:00Z45,343 chars
See attached file(s) April 6, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Amity Medical Group, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Amity Medical Group anticipates a 16% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Amity Medical Group is a 501(c)3 nonprofit medical practice serving the community in the greater Charlotte area of North Carolina in Gaston & Mecklenburg Counties. We provide high-quality, affordable, comprehensive primary care services and linkage to care and coordination of care using our Board-certified team of healthcare professionals and in collaboration with our community partners. We come together to serve a greater purpose than what we could offer individually. Our mission and vision serves our community and we hope that anyone we touch becomes even better than they were yesterday. We have an adherence to our cause and are committed to advancing towards a greater cause. We are an independent Adult & Pediatric Primary Care practice with an on-site pharmacy specializing in HIV & Infectious Disease Care, LGBTQIA+ Care, Diabetes Care, and Addiction Medicine & Counseling including Medication Assisted Treatment (MAT) for opioid, alcohol, and tobacco addiction. We have been recognized both locally and nationally for outstanding quality of care, community leadership, and service. Our staff is dedicated to providing our patients with the best, most comprehensive care possible in a warm friendly family practice atmosphere. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Amity Medical Group in particular, this means it will impact: Nearly 44,000 prescriptions serving over 12,000 of Amity Medical Groups patients Our current admin costs for our 340B program is over $277,000 How we are able to assist patients with their medication and office visit costs. (Transportation, Community Health workers, Outreach Programs ) We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 2 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Sliding Fee Discount: Amity Medical Group provided over $18,400 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Bridges To Access: Amity Medical Group provided over $356,000 of copay assistance in 2025 through the savings created from the 340B Drug Pricing Program. Without this assistance, many of our patients would not be able to afford their medications and would likely go without. Staffing Impact: Amity Medical Group anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Amity Medical Group anticipates an increase of $12,000 to the current $71,700 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. In-House Pharmacy: We are strongly considering opening an In-House Pharmacy to help maintain some of the 340B savings as the cost for external vendors and contract pharmacy fees will only continue to increase as the complexity increases. This will initially require additional funding to create the infrastructure and credentialing needed to open a pharmacy. It will also require use to hire additional staffing. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Amity Medical Group anticipates needing to hire 2 full-time equivalents to manage the claims data submissions, reconciliation, systems programming, and rejection monitoring and appeals. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Amity Medical Group estimates the cost to hire additional staff to be $202,800 annually as well as an additional loss of over $170,000 in 2026 to over $1 million in 2028 from lost of cost of goods sold discounts and estimated rebate denials. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Amity Medical Group estimates over 15 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across 8 Ibid. 7 Internal NACHC assessment (99 responses). 5 manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Amity Medical Group urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $215,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 153 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 153 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Mecklenburg County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 6 CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a 11 Internal NACHC survey data 7 patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Amity Medical Group offers a sliding-scale discount on prescriptions based on the patients Federal Poverty Level percentage. The contract pharmacy setup to facilitate the sliding-scale program uses physical inventory and receives the pricing file from the wholesaler once the medication is purchased. The patients financial responsibility is calculated using a formula of the cost of the medication (from the wholesales purchasing price file) plus a nominal dispensing fee. With the rebate model, since the upfront cost of the medication is not discounted, we would would not be able to use our current method for offering discounts. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 12 HRSA FAQ 8 status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 15 https://340bpricing.hrsa.gov/ 9 Based on our organizations data, we estimate it would cost $1,125,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $5,660,000 to purchase these same drugs at the 340B ceiling price. This represents an increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Amity Medical Group anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Health and Wellness Events that provide health screenings and vaccinations, Back To School Event that provides free health screenings and sports physicals, and our education classes for our complex diabetic patients. Operating Hours: If we need to reduce our clinic hours or number of providers and staff, we anticipate we will not be able to accommodate our patients needs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or Behavioral Health Consultant. Patient Financial Assistance: Our ability to provide medications at deeply discounted rates under our sliding fee scale and Bridges to Access Program will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients or patients with high deductibles from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Amity Medical Group asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited 10 financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Amity Medical Group estimates its 2027 Annual Rebate Opportunity Cost to be approximately $545,133. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Amity Medical Group estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $92,258. Additionally, we estimate this monthly upfront cost to increase to $280,606 in 2027 and $484.937 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Amity Medical Group, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Amity Medical Group urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $60,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebat e-model-pilot-program 11 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 12 CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 13 Conclusion Amity Medical Group strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Amity Medical Group believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Amity Medical Group appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amy Kern, Director of Pharmacy akern@amitymed.org. Sincerely, Amy Kern Director of Pharmacy Amity Medical Group 14
HRSA-2026-0001-2291Fair Haven Community Health Clinic, Inc.2026-04-20T04:00Z21,061 chars
See attached file(s) Fair aven Community Heal [. Ca e Locations 374 Grand Avenue New Haven, O1- 06513 5:0 Grand ,,7\3,cnne New Haven, U1 06513: 150 Sargent Drive New Haven, CT 06511 Bella Vista 339 Ea t, Building CT 05513 April 20, 2026 Chantelle Britton Director Office of Pharrnacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Shoreline Family Health Care RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) 221 West Main Street Branford, CT 06405 Submitted via requiations.qov MAAS 420 East Street New Haven, CT 06511 Dear Director Britton: On behalf of the Fair Haven Community Health Clinic, and the 38,000 patients we serve, we appreciate the opportunity to comment on HRSA's Request for Information (RFI) regarding a potential 340B rebate pilot. Summary of Recommendations: In short, Fair Haven Community Health Clinic (FHCHC), strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entity (CE). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSA's and manufacturers' stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHC's like FHCHC due to their heightened vulnerability to additional financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model, the "standards and procedures that... govern the approval of manufacturers rebate plansm" must include at least six safeguards to reduce the negative financial impacts on FHCHC's patients. Summary of Comments: In these comments, Fair Haven Community Health Clinic explains: A. The importance of 340B savings in FHCHC's ability to provide high-quality, affordable primary care, behavioral health, and dental care to over 38,000 low-income and uninsured patients. B. A rebate model will create significant cashflow, administrative, and other costs for FHCHC. Grand Pharmacy Locations 111 Grand Avenue New Haven, CT 05513 221 West Main Sireei Branford, CT 06405 New Haven School Based Health Centers Clinton Avenue School Fair Fle, en K-8 School John S. M;';, i1-102f. School Wilbur Cross High School Fs Academy of 3:!!zploration Bishop Wor;ds Architecture 8, Desion Mccnet School Ross Woodwird School Metropolitan Business Academy East Haven School Based Health Centers Joseph Mo!illo Middle School Boat H1,, en High School Branford School Based Health Centers John B. Sliney School Mary Tisko School fhchc.org C. These costs due to a rebate model may force FHCHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients' health. D. Why HRSA should never impose a mandatory rebate model on CEs like FHCHC and why if the agency insists on doing so, CHC's like Fair Haven Community Health Care must be exempted due to reasons above. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to FHCHC. F. How a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 3408 savings underwrite a wide range of services that FHCHC's low-income patients rely on. CHC's serves as the backbone of the nation's safety net, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsuredlil. In 2025, FHCHC provided care to more than 38,000 patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmacy services regardless of their ability to pay. 340B savings are essential to FHCHC's financial stability, and our ability to continue to provide these services at affordable rates to our low-income and uninsured patients. Consistent with federal lavi-3-1 and regulatiori-41, FHCHC invests every penny of 340B savings into activities that expand access to care for the underserved populations we care for. 340B savings not only reduce the cost of medication for many of our patients, but they are also a critical funding source that underwrites many of the services that our patients rely on. As explained below, the rebate model will significantly reduce the level of 340B savings that FHCHC will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for FHCHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that FHCHC have built to meet their patients' needs. B. A rebate model will create significant ceshflow, administrative, and other costs for FHCHC. Unsustainable cashflow burdens. In late 2025, FHCHC estimated that our upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than what we currently pay for these drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect FHCHC from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) may still force FHCHC to face significant cash flow issues. Significant administrative burdens: A rebate model will require FHCHC t implement El- systems to coliect and submit claim-level data, reconcile payrnents across rnultipie manufacturers, and manage, denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of rebates on undispensed units: "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last year's proposed rebate model, FHCHC would have been forced to absorb the full WAC price on units that are undispensed, despite following all appropriate pharmacy standards. The costs resuiting from a rebate model may force FHCHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patien health. Reduction in services: As required by law and reguiation, Fair Haven Comrnu Health Care invests every penny of 340B savings into services that expand access to care fortheir medically- underserved patients. Thus, every time 3403 savings are reduced which would dearly occur under a rebate model FHCHC may be forced to scale back services or which their patients currently depend. The impacts can eKtend far beyond affordable pricing on medications, to ail the services underwritten by 3403 sayings (as jeSc'ibed in Section A.) Many contract pharmacies including both Wa!greens and Waimart publicly announcing would also carve out rebate drugs from 3408 starting in the nevi year. Compared to ali other CE types, FQHCs !ike us rely most heaviiy on contract pharmacies, making us most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for FHCHC to discount rebate drugs enough to make them affordable for our low-income patients. Our health center would have to consider to stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. As a result, FHCHC patients may face higher out-of-pocket costs, particularly for high-cost therapies. This may often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. FHCHC has already experienced significant reductions to 3408 sayings in recent years Some individuals might argue that CHC's like FHCHC are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHC's like FHCHC have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted FHCHC more severely than any other CE type, as we are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that FHCHC frequently dispenses. o FHCHC has not received an inflation-adjustment to our base grants in over a decade. Given these pressures and uncertainties, it is not surprising that Community Health Centers such as Fair Haven Community Health Clinic routinely rely on 340B savings to support a wide range of essential services. Under a rebate model, the significant reduction and uncertainty in 340B savings would inevitably force health centers such as Fair Haven Community Health Clinic to make difficult operational decisions, including scaling back or eliminating some of the services outlined above. Services that are most vulnerable include, dental services, care coordination, school-based health services, Food as Medicine and pharmacy-supported Medication Therapy Management programs which are often those most dependent on 340B savings and least likely to be fully reimbursed by other payers. At the same time, the rebate model would have a direct and significant impact on staff who are essential to delivering these services. Reduced 340B savings would limit Fair Haven's ability to recruit and retain pharmacists, pharmacy technicians, care coordinators, and support staff, while the administrative burdens associated with managing rebate claims would divert already strained clinical and pharmacy staff away from patient care. Over time, these pressures would likely lead to staff reductions, increased turnover, and burnout, further constraining access to care for low-income and uninsured patients, and undermining the stability of the safety-net workforce. D. FHCHC and other CHCs must be exempted from any rebate model ciue ko cur eightened vuin ' to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to our patients - apply to a degree to all 3408 CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHC's such as FHCHC be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 3408 purchases for FHCHC than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which FHCHC frequently dispenses for our patients. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o FHCHC will be impacted by contract pharmacies choosing to stop purchasing rebate drugs under 3408: AII categories of CEs, including FHCHC, are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. E. if HRSA insists on forcing FHCHC into a rebate ei, manufacture - ust be re uired to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the "standards and procedures that should govern the approval of manufacturers rebate plans." While we strongly encourage HRSA to exempt CHC's such as FHCHC from any rebate model, if the agency insists on imposing one on FHCHC, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to "advance" enough rebates to cover the greater of two full package sizes or two months' worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover an average number of dispenses for that drug over a typical two-month period. This "two-package or two-month" standard should eliminate most cashflow issues by giving enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse FHCHC for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summer's FRN stated that "no additional administrative costs of running the rebate model shall be passed onto the covered entities." However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that FHCHC will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse FHCHC for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that FHCHC will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse FHCHC fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number f "undispensed" units. "Undispensed" units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, FHCHC has been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for us to request or receive rebates on undispensed units. This suggests that under a rebate model, FHCHC will be forced to absorb the full WAC price on all undispensed units. This could cause our costs to skyrocket, and would effectively transfer 340B savings from FHCHC back to manufacturers. To avoid this outcome, a manufacturer's rebate plan must contain a mechanism for us to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on FHCHC, because it will significantly speed up how quickly we receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for FHCHC does not make this data available to covered entities. Therefore, requiring FHCHC to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many FHCHC's contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturer's unique rules and timelines for the same issue. (For example, in December 2025, each manufacturer established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutrai Claims Clearinghouse would produce rnore accurate deduplication at a tiny fraction cf the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cashflow demands and administrative burdens on covered entities (CEs) such as Fair Haven Community Health Clinic. Fortunately, HRSA's primary goal of the rebate pilot "to address 340B and Maximum Fair Price (MFP)deduplication"I51 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for FHCHC. Substantially reduce administrative burden on FHCHC. By reducing costs, avoid service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nation's primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSA's decisions in this area. A rebate model can directly threaten FHCHC's financial stability and force reductions in the essential services our patients rely on. We appreciate HRSA's commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on FHCHC, and how this will impact our patients who rely on us for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining FHCHC' financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nation's safety net. For further information, please contact Suzanne Lagarde, MD, MBA, FACP a_ .f~C- Since"r-ely, Suzanne Lagarde, MD MBA FACP CEO Costs incurred by FHCHC as a direct result of the rebate pilot which the Summer 2025 FRN said should "be borne by the manufacturer." Time and effort from FHCHC' pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drug's discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Time and effort from FHCHC' financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the FHCHC' costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs. HRSA requested input on these in the first paragraph of the RFI summary. lilSource: https://data.hrsa.gov/topics/healthcenters/uds/overview/national I/Section 330(e)(5)(D) of the Public Health Service Act. 45 Code of Federal Register 75.307 Program Income Health Resources and Services Administration 3:-03 Program Notice: L,po[ication Process for the 3403 Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619
HRSA-2026-0001-2292Pfizer, Inc.2026-04-20T04:00Z58,404 chars
See attached file(s) 1 66 Hudson Boulevard East New York, NY 10001-2192 VIA ELECTRONIC FILING http://www.regulations.gov April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Pfizer Inc. (Pfizer) appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI).1 Pfizer is a research-based, global biopharmaceutical company. We apply science and our global resources to bring therapies to people that extend and significantly improve their lives through the discovery, development, and manufacture of medicines and vaccines. HRSA explained that it issued the RFI to gather input from interested parties regarding the potential use of rebates to effectuate the ceiling price under the 340B Program, including the standards and procedures that should govern the approval of manufacturer rebate plans and the impacts on all stakeholders.2 Pfizer appreciates HRSA's decision to solicit broad stakeholder input through this RFI and supports the agency's efforts to evaluate how a rebate model may strengthen 340B Program integrity and compliance. As the 340B Program has grown into the second largest federal drug purchasing program surpassing Medicare Part B and Medicaid and as it becomes increasingly 1 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 91 Fed. Reg. at 7287. 2 66 Hudson Boulevard East New York, NY 10001-2192 interconnected with these and other federal payment programs, meaningful reform is essential to modernize the Program and ensure its long-term sustainability.3,4 Given the size and complexity of today's 340B Program and the limitations of retrospective audits whether conducted by HRSA or manufacturers Pfizer agrees that HRSA should evaluate and implement prospective integrity tools, including rebate- based approaches. HRSA's consideration of a 340B rebate model represents a positive first step toward leveraging commonsense solutions to strengthen the Program particularly by addressing duplicate discounting, which has been a perennial compliance challenge. Independent assessments by government watchdogs have repeatedly found existing safeguards insufficient to reliably prevent duplicate discounts and diversion, underscoring the limits of the current enforcement framework.5 Pfizer is a longstanding participant in and supporter of the 340B Program, which Congress designed to help ensure that vulnerable, low-income, and underserved patients have access to needed medicines. As the Program has grown in size and complexity, however, longstanding structural limitations and misaligned incentives have increasingly undermined its original intent to benefit safety-net patients while hindering effective oversight and program integrity, particularly with respect to duplicate discounts and interactions with other federal payment programs. In practice, the financial benefits of the 340B Program too often flow to covered entities rather than directly to patients, reinforcing those misaligned incentives and elevating the risk of noncompliance.6 3 Blalock E. (May 2025). Measuring the Relative Size of the 340B Program: 2022 Update. Berkeley Research Group. Available at: https://www.thinkbrg.com/insights/publications/measuring-relative-size-of-340b-program- 2022-update/. 4 In 2023, the most recent year data is available, covered entities and their for-profit partners collected nearly $65 billion in 340B profit. Blalock E., Ferritto M., Taylor, J. (January 2025). The Pharmaceutical Supply Chain, 2013 2023. Berkeley Research Group. Available at: https://cdn.aglty.io/phrma/global/blog/import/pdfs/PhRMA_Supply- Chain-2013-2023_White-Paper_V484.pdf. 5 GAO. (January 2020). 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212. Available at: https://www.gao.gov/assets/gao-20-212.pdf; OIG. (June 2016). State Efforts to Exclude 340B Drugs from Managed Care Rebates. Available at: https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. 6 See GAO. (June 2018). Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480. Available at: https://www.gao.gov/assets/gao-18-480.pdf ((Thirty of the 55 covered entities GAO reviewed reported providing low-income, uninsured patients discounts on 340B drugs at some or all of their contract pharmacies. Of the 30 covered entities that provided discounts, 23 indicated that they pass on 3 66 Hudson Boulevard East New York, NY 10001-2192 Program integrity concerns have grown more acute in recent years with the addition of new non-duplication requirements under the Inflation Reduction Act (IRA), layered atop the longstanding Medicaid prohibition yet without CMS assuming an operational role in preventing duplicate discounts. For manufacturers of IRA-selected drugs, this has created an immediate and operationally complex obligation to avoid impermissible dual discounts involving both the 340B ceiling price and the Maximum Fair Price (MFP), often with limited or imperfect data. Against this backdrop, a 340B rebate model represents a practical, targeted, and forward-looking tool to strengthen program integrity by enabling prospective, claims-level identification and validation of 340B eligibility, while reducing reliance on inefficient pay-and-chase processes. As discussed below, a rebate model can strengthen compliance, promote transparency, and reduce administrative burden for all stakeholders while preserving patient access and the core purpose of the 340B Program. Pfizer believes that 340B Program rebates should be available for all drugs immediately, rather than beginning with a limited pilot. If HRSA does proceed with a pilot, however, it should at a minimum include all drugs selected under the IRA for imposition of a Maximum Fair Price (MFP) regardless of Initial Price Applicability Year (IPAY) and should be designed for prompt expansion based on early performance. HRSA should review pilot data expeditiously and be prepared to scale a successful model without delay. As discussed more fully below, Pfizer also believes that any rebate program should apply to all 340B covered entities, not solely to hospital-type covered entities. Pfizer urges HRSA to move expeditiously to implement a rebate model no later than January 1, 2027. Pfizer anticipates that a rebate model will support greater efficiency in the 340B Program by providing a prospective, claims-level mechanism to prevent duplicate discounts rather than relying on retrospective audits and dispute resolution. By shifting from retrospective enforcement to prospective validation, a rebate model would the full 340B discount to patients, resulting in patients paying the 340B price or less for drugs. Additionally, 14 of the 30 covered entities said they determined patients eligibility for discounts based on whether their income was below a specified level, 11 reported providing discounts to all patients, and 5 determined eligibility for discounts on a case-by-case basis.); see also HELP Committee. (April 2025). Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program. Available at: https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf1.pdf (finding that Bon Secours Mercy Health and Cleveland Clinic do not directly pass 340B discounts to patients). 4 66 Hudson Boulevard East New York, NY 10001-2192 streamline oversight, reduce federal administrative burdens, and conserve taxpayer resources, while bolstering 340B Program integrity. Pfizer offers the comments below to assist HRSA in developing a complete administrative record and in evaluating whether a rebate model would serve the public interest. Pfizer also offers these comments to support the structuring of a rebate model consistent with the 340B statute, which by its plain terms clearly contemplates that manufacturers may provide 340B pricing through rebates.7 Indeed, the 340B Program already operates on a rebate basis for the majority of AIDS Drug Assistance Program (ADAP) covered entities, and this established experience demonstrates both the benefits and the workability of rebates within the Program.8 Pfizer notes that it endorses the comments of its trade association, the Pharmaceutical Research and Manufacturers of America (PhRMA). Pfizer writes separately to amplify its views on certain key aspects of a 340B rebate model. Pfizer's comments address the following: Pfizer's experience attempting to resolve 340B Program integrity concerns including widespread duplicate discounting across covered entities demonstrates both the scope of the problem and the labor-intensive nature of policing the Program without appropriate tools. A rebate model would enable timely verification and resolution before discounts are finalized. The Inflation Reduction Act (IRA) has amplified program integrity challenges by introducing new non-duplication requirements involving 340B pricing and the Maximum Fair Price (MFP), without an operational CMS solution. A rebate model provides a practical mechanism to prevent impermissible dual discounts on a prospective basis. HRSA should require covered entities to purchase products at WAC and, after dispensing medicines to patients, report sufficient data elements to support the smooth operation of a rebate model; covered entities would then receive the 340B price via rebate. 7 42 U.S.C. 256b(a)(1) (The Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs . . .) (emphasis added). 8 NASTAD, ADAP Medication Purchasing Mechanism, as of July 1, 2023, PDF-ADAP_2024_Table_18_0.pdf. 5 66 Hudson Boulevard East New York, NY 10001-2192 Pfizer urges HRSA to require covered entities to report a targeted, standardized set of data elements including pharmacy- and physician-administered claims (as in the 2025 rebate pilot) and purchase data to confirm both eligibility and pricing. Persistent structural data gaps, such as the inability to align dispensing and purchase data, reconcile inconsistent identifiers, or obtain timely claims-level information, have undermined Program integrity and reinforce the need for comprehensive, standardized reporting across all covered entities and payors. HRSA should avoid carve-outs premised on covered entity or payor type. All covered entities should be required to participate in any rebate model, as program integrity risks such as duplicate discounting are not unique to particular covered entity types and partial participation would undermine the model's effectiveness. Pfizer believes that submission of required data elements would not significantly burden covered entities, as these elements are already maintained by covered entities and can be reported via automated, system-to-system data transfer. Pfizer believes that a 10-calendar-day rebate payment deadline would not create cash flow problems for covered entities and, in many cases, could improve cash flow relative to current 340B payment models. A rebate model will not harm patient access; it is operationally comparable to replenishment approaches used today, and rebates are already widely used in other federal programs, including Medicaid, TRICARE, and ADAP. Only core compliance costs should be attributed to the rebate model; elective, program-expanding activities such as contract pharmacy expansion and third- party administrator (TPA) fees should not be included in burden estimates. Retrospective alternatives such as audits, claims modifiers, or standalone clearinghouses would not address program integrity concerns as effectively as a rebate model and would perpetuate reliance on enforcement mechanisms that have proven insufficient at scale. A clearinghouse could complement, but not replace, a 340B rebate model. HRSA should establish industry-standard data exchange processes and requirements for rebate denials, drawing on its own experience with covered entity audits, Corrective Action Plans (CAPs), and covered entity self-disclosures. HRSA should require manufacturers to report certain data elements under a rebate model (as specified in Appendix B) on a regular basis and should publish 6 66 Hudson Boulevard East New York, NY 10001-2192 only aggregated, non-confidential, non-proprietary versions of this data to support evaluation of the model, while ensuring appropriate protection of non- aggregated confidential and proprietary data. Only HRSA and other government entities should assess the rebate model, based on transparent, quantitative metrics. The Prime Vendor (Apexus) should not be involved in assessing the rebate model, nor should it have access to any confidential or sensitive rebate data. HRSA should avoid centralizing rebate submissions through a government contractor and instead preserve flexibility for manufacturers to select private-sector vendors, subject to appropriate data standards and protections. HRSA should evaluate rebate denials as part of any rebate model it implements and, based on that evaluation, determine whether a standardized adjudication template for improper denials is warranted. Pfizer supports the use of existing, industry-standard processes, data elements, and documentation for consistency and transparency, and does not believe HRSA should establish a standardized adjudication template at the outset. Pfizer appreciates the Health Resources and Services Administration's consideration of these comments. * * * I. RFI Question 1 Costs to Covered Entities HRSA Information Request: HRSA seeks information on covered entities current administrative costs under the upfront 340B discount; their administrative costs under a 340B rebate model; staffing impacts covered entities could face under a 340B rebate model; systems and infrastructure covered entities may need to implement a 340B rebate model; and other anticipated costs or impacts of a 340B rebate model. Pfizer Comment: A rebate model similar to the 2025 rebate pilot HRSA planned can improve program integrity without significantly burdening covered entities. The data elements HRSA approved under the 2025 rebate pilot overlap with the information covered entities already maintain for other purposes and thus would not result in significantly new administrative burdens. Pfizer proposes that HRSA require covered entities to report the same elements that HRSA included in the 2025 rebate pilot, along with several purchase data elements that would help manufacturers ensure that the 7 66 Hudson Boulevard East New York, NY 10001-2192 covered entity requesting the rebate actually purchased the drug and determine the price at which the covered entity purchased the drug. The complete list of data elements recommended by Pfizer is included in Appendix A. A. Data elements are already maintained and used for other required functions. Most of these data elements are (1) already stored in electronic health records (EHR), (2) required for 340B audits, (3) needed for other federal program audits, (4) submitted to manufacturers under contract pharmacy policies, or (5) needed for billing private and government insurance payers, managing inventory, and other typical functions. Pfizer thus strongly believes that its recommended data elements are readily available at covered entities, and Pfizer encourages HRSA to recognize that any suggestion of a significant burden associated with the maintenance of these elements may be significantly exaggerated. 9, 10, 11, 12 B. A rebate model does not create new or additional operational functions In addition, although the RFI requests information from covered entities regarding functions described as new and raising potential additional costs, it is important to recognize that many of the activities associated with a rebate model already are undertaken at covered entities. For example, activities like claims extraction, validation, reconciliation, and audits already are a routine part of operating as a health care facility -- including as a 340B covered entity. Any suggestion that these activities will present new or additional operational burdens thus is overstated. HRSA should not accept overblown claims of burdens associated with a rebate model by covered entities particularly when covered entities already expend significant resources to maximize discounts and associated revenue insurance reimbursement under the 340B Program. Pfizer thus believes that covered entity burden estimates associated with a rebate model are substantially exaggerated and that a rebate model would not materially expand 9 See, e.g., United States Core Data for Interoperability (USCDI), Office of the Natl Coordinator for Health Info. Tech., https://isp.healthit.gov/united-states-core-data-interoperability-uscdi#uscdi-v6. The USCDI defines the standardized classes and individual data elements that certified EHR systems must be able to capture and exchange. 10 See, e.g., Section 3(C), Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities, https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered- entities.pdf. 11 See 340B ESP, Data Submissions FAQ 9, https://help.340besp.com/en/articles/8808065-frequently-asked- questions-faqs#h_a1adc6cecc. 12 For example, covered entities must provide many of the data elements HRSA approved for the 2025 rebate pilot on the 837P form used to bill Medicare for separately payable drugs covered under Part B and as part of the D.0 electronic telecommunication standard used for pharmacy billing. 8 66 Hudson Boulevard East New York, NY 10001-2192 covered entity responsibilities for program participation. Extracting existing data and submitting it through a standardized platform is a routine data transmission exercise -- not a novel activity that would require substantial time investments or costs by covered entities. C. Burden estimates should reflect automation and standard data exchange Moreover, HRSA should be skeptical of covered entity cost and burden estimates that assume: Manual workflows and ignore batch processing/automation capabilities; The addition of full-time employees (FTE) devoted to manual submissions; Year-round FTE needs absent evidence (given routine claims extraction and transmission to third-party administrators today); and The need for multiple or duplicative vendors. A rebate model primarily requires configuration and reuse of existing systems (EHRs, pharmacy systems, billing platforms) -- not new infrastructure. Furthermore, ongoing submissions should rely on automated system-to-system data transfer and standard validation checks. Thus, after initial configuration and testing, HRSA should measure the time burden for ongoing submissions in minutes, not hours. D. Only core compliance costs must be attributed to the rebate model Even where covered entities incur real costs associated with participation in the 340B Program, HRSA should distinguish between core compliance activities necessary to meet baseline statutory and program requirements and elective, programexpanding activities undertaken to increase 340B volume or revenue. For example, a recent Minnesota Health Department 340B report found that in 2024 covered entities collectively spent $120 million on operational costs for contract pharmacies, which increase the number of locations that can dispense 340B drugs on behalf of a covered entity.13 In addition, covered entities spent $17 million on other external costs, including payments to third-party administrators (TPAs), which we understand mine data to help covered entities maximize the number of scripts on which they can claim 340B pricing.14 Such costs should not be attributed to any rebate model because they would not be 13 Minnesota Dept of Health, 340B Covered Entity Report, at 23 (Feb. 27, 2026), https://www.health.state.mn.us/data/340b/docs/2025report.pdf. 14 Minnesota Dept of Health, 340B Covered Entity Report, at 23 (Feb. 27, 2026), https://www.health.state.mn.us/data/340b/docs/2025report.pdf. 9 66 Hudson Boulevard East New York, NY 10001-2192 necessary for carrying out covered entity data reporting requirements under a model. While such expenditures may reflect business or programmatic choices made by covered entities, they are not required to carry out standardized data reporting, eligibility validation, or rebate submission functions under a rebate model and therefore should not be attributed to that model. Pfizer thus encourages HRSA to evaluate covered entity burden estimates carefully to ensure that costs claimed for participation in a rebate model truly would be expended for that purpose and not for program expanding or maximizing opportunities. Similarly, HRSA should reaffirm that manufacturer responsibility for IT platform costs does not extend to covered entity internal data preparation or quality-control activities, which already should be occurring for various reasons including audit preparedness. E. A rebate model will not harm patient access Pfizer also notes that a rebate model will not harm patient access to therapy. Currently, 340B discounts are often provided to covered entities through a replenishment model. Under a replenishment model, a drug purchased at list price is dispensed to a patient and, following that dispense, the covered entity then determines that the patient is 340B-eligible. Once a full package size is dispensed to 340B-eligible patients, the covered entity purchases the product at the 340B price to replace the dispensed product.15 A rebate model would be practically and operationally comparable to the replenishment approaches used today. Indeed, as with a replenishment model, the reality is that pharmacies routinely serve a variety of patients with different insurance and federal program eligibility. The identity of specific patients -- including status as the patient of a covered entity qualifying the facility to 340B pricing -- is not known until after product is dispensed to patients at the pharmacy counter. Thus, any allegation that patients could be harmed under a rebate model ignores the reality of the way the 340B Program operates today. If covered entities make any claims of access harms, they must be clearly substantiated and transparently reported. As noted above, rebates already are widely used among ADAP covered entities in the 340B Program, and rebates also function as the operational centerpiece of numerous other federal programs including the Medicaid Drug Rebate Program, the TRICARE retail pharmacy program, the IRA MFP program and inflation rebates, and within the commercial marketplace. 15 Pfizer does not support the use of replenishment models due to the significant instances of program integrity issues that have been documented as a result of this approach. As described more fully in this submission, Pfizer believes that a rebate model will afford all 340B stakeholders a more workable approach to extending the 340B ceiling price to covered entities while significantly mitigating the risks of duplicate discounting. 10 66 Hudson Boulevard East New York, NY 10001-2192 F. Avoid carve-outs by covered entity or payor type to preserve program integrity Finally, Pfizer urges HRSA to avoid carve-outs premised on covered entity or payor type. Program integrity risks -- including duplicate discounts -- arise across all covered entity types and should be addressed consistently. For example, Pfizer has seen evidence of significant duplicate discounts by grantee covered entities, indicating the need for grantees to be included in a rebate model. Furthermore, it would be an enormous operational challenge for manufacturers to have some covered entities in a rebate model while others are carved out because manufacturers would have to determine whether each covered entity is in the rebate model and would then have to use different methods to provide 340B pricing to covered entities depending on whether a particular covered entity is included in the model. There would not be a principled reason for HRSA only to include certain entity types in a rebate model, particularly because the aim of such a model should be a comprehensive evaluation of duplicate discounts that exist throughout the 340B Program. A rebate model that excludes certain covered entity types would not provide HRSA or stakeholders with sufficient visibility into program integrity across all sectors, and Pfizer encourages HRSA not to limit the usefulness of a rebate model based on artificial considerations like covered entity type. II. RFI Question 2 Payment Timing and Potential Cash Flow Impacts HRSA Information Request: HRSA requests input on whether rebate payment timing could affect covered entity cash flow, the typical payment terms under covered entities current wholesaler contracts for 340B drugs, how rebate payment requirements (e.g., within 10 calendar days) could be structured, and what alternative arrangements could mitigate potential impacts. Pfizer Comment: Claims by covered entities that a rebate model would create cash flow issues are overstated. A 2025 IQVIA report determined that wholesalers payment terms vary from pre-pay to 45 days or more, but multiple respondents in [IQVIAs] interviews said that the standard is 30 days unless the provider agrees to a shorter period in exchange for more favorable terms.16 This timing is consistent with the understanding of industry experts that, if a covered entity received a rebate payment about 10 days after submitting a clean claim, it usually would receive the rebate payment prior to when it 16 Chuan Sun et al., How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 8, IQVIA (Dec. 2, 2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b- white-paper-2025.pdf [hereinafter IQVIA Rebate Model Report]. 11 66 Hudson Boulevard East New York, NY 10001-2192 ordinarily would have to pay its wholesaler for drugs initially purchased at WAC or list price. Additionally, as discussed in Section I of these comments, in most instances, 340B medicines today are purchased at list price and replenished at the 340B price under a replenishment model only once the entire package of the medicine has been dispensed or administered to a covered entitys 340B patients. Thus, under a 10-calendar day deadline to pay the rebate (or explain in writing the reasons for denying payment), covered entities may be able to obtain 340B pricing more quickly than under the replenishment model, since the rebate payment will not hinge on use of the remaining units of medicine in the package. This too is supported by IQVIAs report, which concluded that, in terms of cash flow, the rebate model performs as well as physical inventory and physical replenishment, and better than credit-based replenishment.17 IQVIA also examined what interest costs a hospital or clinic would be subject to, assuming such entities had to borrow at a 12 percent interest rate -- which IQVIA stated is a conservative estimate of the interest rate these entities would have to pay -- whenever it experienced a negative cash flow during the period between the purchase date and the receipt of reimbursement.18 IQVIA determined that with respect to covered entity-owned pharmacies, during that time period, a rebate model would have an interest cost equivalent to physical inventory, physical replenishment, and presumptive credit models, and a lower interest cost than credit-based replenishment.19 With respect to contract pharmacies, IQVIA found that a rebate model would have a lower interest cost than both physical replenishment and credit-based replenishment.20 Furthermore, the report noted that [t]he most important observation is that [across all eight models IQVIA analyzed] the interest costs are small.21 Thus, the IQVIA analysis demonstrates that covered entities would not face negative cash flow issues under a 10-calendar day rebate payment deadline and that compared to a number of the 340B payment models in use today, a rebate model would potentially even improve cash flow for certain covered entities. Pfizers view therefore is that covered entities should experience very little -- if any -- change in their cashflow related to participation in the 340B Program, and certain covered entities actually may fare 17 IQVIA Rebate Model Report at 18. 18 IQVIA Rebate Model Report at 8. 19 IQVIA Rebate Model Report at 17. 20 IQVIA Rebate Model Report at 17. Figure 4 on page 13 of the report shows the full comparisons. 21 IQVIA Rebate Model Report at 18. 12 66 Hudson Boulevard East New York, NY 10001-2192 better under a rebate model by virtue of their ability to claim rebates at the unit, versus the package, level. III. RFI Question 3 Rebate Denials HRSA Information Request: HRSA seeks comment on whether specific guardrails should apply to manufacturer rebate denials, including permissible denial grounds, required documentation, and standard process elements for adjudicating disputes. Pfizer Comment: Pfizer urges HRSA to evaluate rebate denials as part of any rebate model it implements and, based on its evaluation, should consider whether a standardized template for adjudications of improper denials is needed in the future. Pfizer supports consistency, transparency, and the reduction of administrative burden for all stakeholders using existing, industrystandard processes, data elements, and documentation, rather than through the creation of new or prescriptive requirements. Accordingly, Pfizer does not believe that HRSA should establish a standardized template for adjudications of improper rebate denials at the outset. If, following its evaluation, HRSA nonetheless determines that some form of standardized adjudication framework is warranted, HRSA should work closely with stakeholders to ensure that any such framework is grounded in existing industry standards, reflects realworld operational practices, and minimizes administrative burden. A. Existing industry standards provide workable models for rebate denial processes In that context, HRSA could look to readily available, industrystandard data exchange formats and rejection or dispute codes to facilitate clear identification and documentation of 340B rebate denials by manufacturers, rather than developing novel or duplicative requirements. Illustrative examples include established approaches used in other federal programs and settings, such as the Medicaid Drug Rebate Programs Reconciliation of State Invoice (ROSI) (CMS304) and Prior Quarter Adjustment Statement (PQAS) (CMS304a), including associated adjustment and dispute codes; existing 340B compliance tools and selfdisclosure templates; National Council for 13 66 Hudson Boulevard East New York, NY 10001-2192 Prescription Drug Programs (NCPDP) rebate data submission standards; and rebate dispute resolution formats used under other federal purchasing arrangements. 22, 23, 24, 25 HRSAs own experience with covered entity audit findings and CAPs, along with manufacturers experience resolving issues through goodfaith inquiries, may also provide valuable input in identifying best practices. At the same time, any approach adopted should preserve appropriate flexibility and avoid creating any denial adjudication process that would conflict with data driven dispute resolution practices or that would address integrity concerns beyond strictly evaluating individual claims denials. IV. RFI Question 5 Manufacturer Efforts to Avoid Duplicate Discounts Request: HRSA seeks input on manufacturer practices to avoid duplicate discounts (including pre- and post-January 1, 2026), experience identifying MFP non-duplication issues, challenges encountered, and minimum data elements needed to identify potential duplicates across 340B and CMS payment programs. Pfizer Comment: Pfizer relies on several distinct processes to identify and address duplicate discounts under the 340B Program and Medicaid, each of which highlights the limits of retrospective enforcement approaches in a system where covered entities receive an upfront discount at the 340B price. As relevant here, Pfizers experience reflects: (1) its Medicaid backend dispute resolution process, which relies on postpayment reconciliation with states; (2) its Medicaid upfront dispute resolution process, which uses claimslevel data to identify potential duplicate discounts before payment; and (3) its 340B Good Faith Dispute Resolution (GFDR) process involving covered entity selfreporting. The discussion below draws on Pfizers experience across these processes and specifies which data relate to each. 22 CMS-304 and 304a, https://www.cms.gov/regulations-and-guidancelegislationpaperworkreductionactof1995pra- listing/cms-304-and-304a. 23 Apexus, Self-Disclosure to HRSA and Manufacturer Template (May 2024), self-disclosure-to-hrsa-and- manufacturer-template.docx. 24 Natl Council for Prescription Drug Program, Manufacturer Rebate Utilization, Plan, Formulary, Market Basket, and Reconciliation Flat File Standard; Natl Council for Prescription Drug Program, Medical Rebate Data Submission Standard. 25 See, e.g., Dept of Defense, TRICARE Retail Refund Program Manufacturer Policy and Procedure Guide, at 27- 28 (Apr. 2025), https://health.mil/Reference-Center/Publications/2025/04/25/Manufacturer-Policy-and-Procedure- Guide. 14 66 Hudson Boulevard East New York, NY 10001-2192 A. Pfizers experience demonstrates the limits of retrospective payandchase approaches Pfizer expends significant efforts in policing duplicate discounts in the 340B Program and yet still experiences substantial duplicate discounting -- in violation of the statute -- due to our participation in the program. Currently, Pfizer uses both upfront and back-end dispute resolution processes to address 340B/Medicaid duplicate discounts. Pfizer has implemented, at great expense and with limited resources, upfront processes to obtain claims-level detail from state Medicaid claims processor portals in connection with certain states Medicaid Drug Rebate Program (MDRP) quarterly invoices (under our Medicaid upfront dispute resolution process). These processes allow Pfizer to prospectively identify potential 340B units, initiate disputes, and pay MDRP rebates in response to each states invoice by the statutory due date. Pfizers experience demonstrates that only claims-level data provides the granularity necessary to accurately verify, document, and remove 340B units as duplicate MDRP rebates. Building and operating the Medicaid upfront dispute resolution process has required Pfizer to develop bespoke internal systems and workflows to extract, normalize, and validate nonstandard claimslevel detail across states. Since 2020, this has included developing internal validation tools (including templates, automated queries, and basic automation routines within spreadsheet systems), reconciling claimslevel detail received in disparate formats, and crossreferencing multiple data sources (including state claims detail files, manufacturer chargeback data, and Medicaid Exclusion File information) to identify potential mismatches before payment. In practice, Pfizer must review and scrub millions of claimslevel records annually under the upfront process, reflecting both the scale of Medicaid utilization and the lack of standardized, programwide mechanisms for prospective duplicate discount prevention. For calendar year 2025 alone, the Medicaid upfront process involved review of approximately 3.3 million claims lines. Under Pfizers Medicaid upfront dispute resolution process, Pfizer aims to identify potentially invalid or questionable units within approximately 30 days from receipt of state invoice and claims-level data, consistent with the statutory rebate payment deadline under Social Security Act 1927(b)(1)(A). This allows Pfizer to initiate good faith disputes regarding any potential duplicates while ensuring payment of claims that are not in dispute per the terms of the National Drug Rebate Agreement and the statutory deadline. These efforts, while resourceintensive and additive to Pfizers existing compliance activities, capture only a subset of potential duplicate discounts and do not eliminate the need for continued postpayment reconciliation, underscoring the limits of layered, retrospective controls in the absence of a standardized, prospective mechanism like a rebate model. 15 66 Hudson Boulevard East New York, NY 10001-2192 While the upfront process enables earlier identification of potential 340B/Medicaid duplicate discounts and can reduce the amount of impermissible discounts paid before reconciliation, it has not replaced Pfizers continued reliance on backend dispute resolution and postpayment recovery efforts. Pfizer remains required to invest substantial personnel and financial resources in retrospective payandchase processes alongside upfront review. By contrast, prior to implementing these upfront processes, the only reconciliation method relied on Pfizers ability to obtain claimslevel detail after paying quarterly state MDRP invoices, requiring reliance on estimates and prolonged postpayment dispute resolution once detailed data became available. For example, under the back-end process, the average number of hours Pfizer spends resolving each case is on average 33 hours, and in 2025 closed cases involving 185 unique Pfizer NDCs. With the upfront process, Pfizer is able to identify and raise potential duplicate discounts before payment. However, final resolution often still depends on state Medicaid engagement. In Pfizers experience, many state Medicaid programs are reluctant to engage substantively in MDRP/340B dispute resolution -- often not responding, or only responding with instructions for Pfizer to work directly with each covered entity. As a result, Pfizer has only been able to resolve about 20% of identified 340B duplicate discount disputes from the front-end validation process, notwithstanding early identification. Where states do engage, however, Pfizer has been able to work with them to identify prior-period adjustments, submit corrections, and reprocess claims to resolve MDRP/340B disputes. Pfizer still has many open, longstanding, unresolved disputes with multiple states, reflecting the continued limits of retrospective, postpayment reconciliation frameworks even where manufacturers operate both upfront and backend compliance processes in parallel. Manufacturers like Pfizer should not be left in the untenable position of continuing to expend significant personnel and financial resources to ensure statutory compliance on the part of other stakeholders. In addition to the Medicaid back-end and upfront efforts, Pfizer also uses a 340B Good Faith Dispute Resolution (GFDR) process to address instances where covered entities self-report and/or Pfizer inquires about potential 340B Program integrity issues. In 2025, Pfizer averaged 19 hours per case during the GFDR process, closing cases involving 271 unique NDCs. Importantly, the number of covered entity self-reported cases to Pfizer has continuously declined since 2019 when HRSA announced it would no longer issue audit findings based on noncompliance with guidance alone.26 26 GAO, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 15 (Dec. 2020), https://www.gao.gov/assets/gao-21-107.pdf. 16 66 Hudson Boulevard East New York, NY 10001-2192 Pfizers experience across its Medicaid back-end, Medicaid upfront, and 340B GFDR processes also underscores several persistent data gaps that limit the effectiveness of retrospective duplicate discount prevention in a system where covered entities receive an upfront discount at the 340B price. In particular, Pfizer frequently lacks the ability to reliably align dispensing data with covered entity purchase data, reconcile inconsistent identifiers across payment systems, or obtain standardized, timely claimslevel information before payment obligations are triggered. These gaps are structural rather than incidental and cannot be addressed through audits, modifiers, or estimates alone -- reinforcing the need for standardized claimslevel and purchase data reporting under a rebate model. B. Claimslevel data are necessary to prevent duplicate discounts prospectively If it implements a rebate model, HRSA should require covered entities to report a standardized list of data elements sufficient to validate 340B eligibility and pricing. Specifically, based upon our significant experience in researching and identifying non- compliant 340B duplicate discounts, HRSA should require covered entities to report the data elements listed in Appendix A. Those data elements include the pharmacy- administered claims data elements and the physician-administered claims data elements that HRSA approved for the 2025 rebate pilot. In addition, we urge HRSA to require covered entities to also report purchase data to enable manufacturers to determine whether the covered entity requesting the rebate actually purchased the drug for which they are seeking a rebate and the price they paid for the drug. HRSA also should encourage covered entities to report additional optional fields where the data are readily available (e.g., HCPCS codes/340B modifiers, plan qualifiers) to improve accuracy -- particularly for physician administered claims -- without undermining feasibility or increasing burden unnecessarily. V. RFI Question 6 Required Reporting HRSA Information Request: HRSA requests input on what data manufacturers should submit (and at what frequency) to enable HRSA oversight, what information (if any) HRSA should share publicly (and at what frequency), and the appropriate frequency and duration of manufacturer reporting to support assessment of a rebate model. Pfizer Comment: HRSA should require manufacturers to report data that supports the objective evaluation of rebate model performance (e.g., timeliness, accuracy, and denial rates by reason). In particular, HRSA should require manufacturers to report the data elements listed in Appendix B. We recommend that manufacturers report these 17 66 Hudson Boulevard East New York, NY 10001-2192 elements to HRSA on a monthly basis to allow for rapid assessment of a rebate model during the evaluation period. A. Public reporting should emphasize aggregate, nonproprietary metrics Furthermore, we urge HRSA to publicly release aggregate forms (or averages where specified) of the following data: (1) total purchases by covered entity type (in dollars at the 340B ceiling price and at WAC); (2) average days from clean claim submission to rebate payment; (3) number of rebates paid within 10 days (out of total rebate claims, so that the average can be calculated); (4) number of rebates denied, with reasons (out of total rebate claims, so that the average can be calculated); and (5) number of claims where an MFP refund was denied due to a 340B discount being paid. Sharing this information with the public will help 340B stakeholders understand how a rebate model is performing and assist HRSA with determining if any improvements are needed and how best to expand the model over time. HRSA should confirm that the unaggregated version of these data elements and the other data elements listed in Appendix B are confidential and proprietary and protected from disclosure under FOIA Exemption 4 and the Trade Secrets Act, consistent with Pharmaceutical Pricing Agreement confidentiality. In addition, HRSA should ensure that the privacy and security guardrails that it puts in place, including encryption, are consistent with HHS standards. HRSA also should publish these aggregated metrics on a regular basis (e.g., quarterly) using standardized definitions (including clean claim) to prevent misinterpretation. B. Rebate model evaluation should remain governmentled and conflictfree Only HRSA and other government bodies should assess a rebate model. We urge HRSA to work with HHS Office of Inspector General (OIG), which will provide valuable insight based on their past recommendations for program improvements.27 Within CMS, the Center for Program Integrity should be involved in any assessment of a rebate model given their expertise in preventing and reducing waste, fraud, and abuse. CMS Medicare Drug Rebate and Negotiations Group and the Center for Medicaid and CHIP Services should also be part of any evaluation to determine how well a rebate model helped ensure compliance with the IRA and Medicaid nonduplication requirements, respectively. 27 OIG. (June 2016). State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates. Available at: https://oig.hhs.gov/reports/all/2016/state-efforts-to-exclude-340b-drugs-from-medicaid-managed-care-rebates/. 18 66 Hudson Boulevard East New York, NY 10001-2192 If HRSA does use contractors to assist with a rebate model with respect to aspects other than evaluation, HRSA should ensure that the contractors do not have any actual or perceived conflicts of interest. Specifically, the Prime Vendor (Apexus) must not be involved in assessing any rebate model or have access to confidential or sensitive data related to the model. In addition, we respectfully recommend that HRSA refrain from centralizing rebate submissions through itself or a government contractor (such as Apexus or another third party). Instead, we suggest maintaining flexibility that allows manufacturers to select private-sector vendors. This approach would promote efficiency, ensure impartiality, reduce administrative burdens on the government, and uphold appropriate data standards and protections. VI. RFI Question 7 340B Program Integrity and Other Potential Benefits HRSA Information Request: HRSA seeks input on (1) whether and how a rebate model would affect 340B program integrity, assist in avoiding duplicate discounts and reducing diversion or improper claims, and increase pricing transparency; (2) recommendations for improving data collection and reporting to strengthen the 340B Programs integrity while minimizing administrative burden; and (3) any other potential benefits of a rebate model. Pfizer Comment: A rebate model provides an efficient, prospective mechanism to improve integrity by enabling timely verification and resolution of statutory violations using claims-level data. The IRA introduces new 340B non-duplication challenges through its prohibition on 340B/MFP duplicate discounts,28 and a rebate model would be the most efficient solution to this issue. By leveraging claims-level data, a rebate model would provide a precise mechanism to identify 340B units for purposes of 340B/MFP deduplication. A. A rebate model offers a more reliable and efficient solution to program integrity challenges than claims modifiers or estimation methodologies CMSs reliance on modifiers and estimation approaches to exclude 340B units from Medicare Part B and Part D inflation rebate calculations, respectively, is inexact. A 2023 IQVIA study found that for Medicare Part B drugs, 340B modifier usage ranged from 18% to 92% depending on covered entity type.29 Furthermore, using an estimation approach for purposes of excluding 340B units form the Part D inflation rebate 28 Social Security Act (SSA) 1193(d), 1847A(i)(3)(B)(ii)(I), 1860D-14B(b)(1)(B). 29 IQVIA, Can 340B Modifiers Avoid Duplicate Discounts in the IRA?, at 8 (Feb. 21, 2023), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2023/can-340b-modifiers-avoid-duplicate-discounts-in- the-ira.pdf. 19 66 Hudson Boulevard East New York, NY 10001-2192 calculation is inconsistent with the statute, which makes no mention of an estimation methodology.30 A rebate model would provide a more precise mechanism to identify 340B units for exclusion from Part B and Part D inflation rebate calculations that would be compliant with the statute. Rebates also provide the most efficient solution for addressing 340B/Medicaid duplicate discounts because manufacturers often do not have the necessary information to identify these duplicate discounts, as discussed above in Section IV. The data collected by HRSA through a rebate model focused on deduplication under the IRA may effectively illustrate the potential of this approach for future Medicaid deduplication efforts. Additionally, implementing a rebate model could mitigate product diversion, such as instances where multiple covered entities seek a 340B discount on the same unit. HRSA also could use the claims data that covered entities provide under a rebate model to assist it in identifying which covered entities are most likely involved in significant program integrity violations and what types of violations may be occurring. This information would help inform HRSAs decision-making regarding what covered entities to audit, which would target audits toward the covered entities most likely responsible for program integrity issues. B. Claims-level data under a rebate model enables more timely and effective dispute resolution compared to retrospective audits The 340B Program is large and complex and reliance on limited retrospective HRSA audits and the current pay and chase system (where the discount is upfront without verification of compliant dispensing) is insufficient to address 340B Program integrity issues. Currently, HRSA audits fewer than one percent of covered entities annually, and roughly 70 percent of those HRSA audits result in unfavorable findings.31 Although a 70 percent rate of adverse findings is seriously concerning, given the small number of reviews, the true magnitude of statutory violations within the 340B Program likely is even greater. In addition, as of 2019, HRSA no longer issues audit findings based on noncompliance with guidance alone.32 GAO reported that, according to HRSA, during fiscal year 2019 this change resulted in HRSA reporting 36 fewer instances of adverse 30 SSA 1860D-14B(b)(1)(B). 31 ADVI, Analysis of HRSA 340B Covered Entity Audits (Mar. 2025), https://advi.com/insight/advi- analysis-hrsa-340b-covered-entity-audits/. 32 GAO, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 15 (Dec. 2020), https://www.gao.gov/assets/gao-21-107.pdf. 20 66 Hudson Boulevard East New York, NY 10001-2192 findings.33 As the program has grown and covered entities have learned that HRSA is not enforcing its guidance, this problem likely has worsened. Furthermore, manufacturer audits are constrained by outdated guidance and covered entity resistance and litigation, making manufacturer-initiated audits costly and rare. In Pfizers experience, covered entities regularly fail to disclose integrity issues. In addition, when Pfizer contacts covered entities to obtain information to resolve a potential integrity issue that a covered entity has self-reported, covered entities do not always provide the requested purchasing and dispensing information. Or, if they do provide requested information to substantiate a noncompliance issue, they do so only after numerous instances of follow-up. This recalcitrance is significant because it is virtually impossible for a manufacturer to address such integrity concerns unless the relevant covered entity cooperates with the manufacturers inquiry. As CMS and HRSA have long recognized, covered entities and manufacturers are expected to work in good faith to identify and resolve instances of non-compliance within the 340B Program, but unfortunately Pfizers experience is that covered entities do not always support proactive identification of non-compliance nor resolution of clearly identified compliance problems. Although a manufacturer theoretically could begin an ADR proceeding, a manufacturer must conduct an audit before filing an ADR claim (which is a requirement not imposed on covered entities, thus rendering the existing ADR process significantly asymmetrical and notably burdensome on manufacturers).34 Furthermore, manufacturers need HRSAs approval for an audit. To obtain such approval, despite no statutory language supporting the requirement, manufacturers must show reasonable cause35 to audit -- which is extremely difficult to do without claims-level data. In addition, even if HRSA approves an audit, audits are expensive and time-consuming for manufacturers so manufacturers often are precluded from ADR due to the cost and resource burden of conducting an audit. Moreover, audits and the ADR process place a significant burden on both covered entities and the federal government. Manufacturers thus are faced with significant and recurrent obstacles in trying to resolve program compliance issues. Without good faith covered entity engagement, including through manufacturer-initiated inquiries, it becomes challenging if not impossible to establish reasonable cause to proceed with an audit -- let alone ever get to ADR. 33 GAO, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements, at 16 (Dec. 2020), https://www.gao.gov/assets/gao-21-107.pdf. 34 42 C.F.R. 10.21(a)(2). 35 61 Fed. Reg. 65406, 65409 (Dec. 12, 1996). 21 66 Hudson Boulevard East New York, NY 10001-2192 While rebate model data could help address some data access barriers, broader reforms to the ADR process are needed to ensure equitable dispute resolution for all stakeholders. C. A clearinghouse could complement, but not replace, a 340B rebate model With respect to the use of a claims clearinghouse, we note that a claims clearinghouse is an incomplete data collection option and could only complement (but not replace) a rebate model. Rebate data could feed into a clearinghouse, but delayed submissions by covered entities mean a clearinghouse alone is insufficient to address 340B Program integrity issues. In addition, even if HRSA requires data to be submitted through a clearinghouse and seeks to enforce this requirement, covered entities are less likely to report data through a clearinghouse alone than through a rebate model because under a rebate model they are incentivized to provide data in order to obtain their rebate. As discussed above, we have already experienced instances where covered entities have refused to provide data when a rebate model is not in place, demonstrating that there is a real risk that covered entities would fail to provide data under a clearinghouse that is divorced from a rebate model. D. Transparent, quantitative metrics should guide evaluation and expansion of any rebate model Finally, we emphasize that a fair evaluation of a 340B rebate model should include transparent, quantitative metrics and a timely assessment to inform expansion decisions. HRSA should carefully assess any 340B rebate model and use its findings to determine whether any adjustments are needed and how to best expand the model to more fully address 340B Program integrity concerns. In addition, it is important for HRSA to publicly share its metrics and findings to ensure that stakeholders understand how well a rebate model is working and how HRSA reached its conclusions. * * * 22 66 Hudson Boulevard East New York, NY 10001-2192 Pfizer appreciates the opportunity to comment and looks forward to continued engagement with HRSA to ensure the success and rapid expansion of a rebate model, consistent with objective evaluation results. If you have questions or need additional information, please contact Margaret.Davis@pfizer.com. Sincerely, Margaret Davis-Cerone Head of Federal Policy US Policy and Government Relations 23 66 Hudson Boulevard East New York, NY 10001-2192 Appendix A: Data elements needed to accurately implement a rebate model Retail medicine Physician-administered medicines Date of service Date prescribed Rx number Fill number 11 digit National Drug Code (NDC) Quantity Dispensed Prescriber ID Service provider ID 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) 11 digit NDC Quantity Date of service 340B ID Service provider ID Claim number (analogous to Rx number) Health plan ID & health plan name (analogous to Rx BIN & Rx PCN) Rendering physician ID (analogous to Prescriber ID) Claim line number Unit of measure Purchase data elements (for retail and physician-administered) Wholesaler Name Wholesaler Account Number Invoice Date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID 24 66 Hudson Boulevard East New York, NY 10001-2192 Appendix B: HRSA should require manufacturers to report the following data elements Claim submission date 340B ID NDC-11 and quantity purchased Unit WAC, 340B Ceiling, and MFP Rebate amount and date paid Rejection reason (if applicable) Aggregated sales by covered entity type Average days from claim submission to rebate payment Number of rebates paid in 10 days Number of rebates denied, with reasons Number of claims determined to be eligible for MFP instead of 340B
HRSA-2026-0001-2293(no commenter metadata)2026-04-20T04:00Z49,741 chars
See attached file(s) Hawaii Island Community Health Center 75-5751 Kuakini Highway Suite 203, Kailua Kona, HI 96740 (808) 326-5629 www.hichc.org APRIL 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: REQUEST FOR INFORMATION: 340B REBATE MODEL PILOT PROGRAM (HRSA-2026-03042) Dear Director Britton: On behalf of Hawaii Island Community Health Center (HICHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This additional time has been essential in allowing our organization to conduct a thorough analysis of the operational and financial risks the proposed 340B rebate model poses to Community Health Centers (CHCs). The 340B Program is foundational to CHCs ability to serve the most vulnerable members of our communities. However, shifting responsibility from manufacturers to safetynet providers through a rebatebased structure threatens to destabilize CHC pharmacy operations nationwide. In 2022, Bay Clinic and West Hawaii Community Health Center, both nonprofit Federally Qualified Health Centers, merged to form Hawaii Island Community Health Center. This bold and strategic unification created an integrated, islandwide system dedicated to delivering highquality, comprehensive care across Hawaii Island. Our mission is to promote lifelong health and wellness through quality healthcare that is comprehensive, integrated, culturally responsive and accessible to all. This mission is guided by our core values of compassion, respect, humility, advocacy, and excellence. The 340B Drug Pricing Program is essential to fulfilling our mission. It enables HICHC to stretch scarce federal resources, reinvest in patient care, and provide comprehensive services regardless of a patients ability to pay. Through our slidingfeescale discount program, we saved patients more than one million dollars in direct medication costs last year alone. These savings also sustain a wide range of critical services, including clinical pharmacy support, behavioral health, schoolbased health centers, mobile health units, dental care, womens health, prescription medication access, durable medical equipment, prior authorization processing, and prescription refills by protocol. These services are vital to ensuring that patients, especially those in rural and underserved communities, receive the care they need without financial barriers. 2 NATIONAL DATA UNDERSCORES THE SEVERITY OF THE THREAT POSED BY THE PROPOSED REBATE MODEL. BASED ON ASSESSMENTS FROM THE NATIONAL ASSOCIATION OF COMMUNITY HEALTH CENTERS (NACHC), CHCS ARE ALREADY PROJECTING STAGGERING IMPACTS: FINANCIAL LOSSES: CHCs nationwide report average losses ranging from $500,000 to $3 million from entityowned pharmacy operations, along with an estimated 25% reduction in savings for contract pharmacy arrangements due to the administrative burden of manual reconciliation. PROJECTED COST INCREASES: A single midsized CHC anticipates more than $3 million in additional annual costs to manage the pilot. For rural CHCs, these costs are even more devastating. Nearly onequarter (25%) of rural 340B savings are reinvested in ruralspecific infrastructure such as mobile clinics and telehealth, services that would be jeopardized under a rebate model. These national trends mirror the risks we face locally. The proposed rebate model would require HICHC to purchase certain medications at full price and then seek reimbursement through a complex, manufacturercontrolled rebate system. This structure introduces several dangerous consequences, including unsustainable cashflow burdens, significant administrative strain, reduced access to essential medications, and the erosion of 340B savings that fund core services. For HICHC, the impacts would be immediate and severe. Our ability to maintain lifesaving programs, including Hepatitis C treatment and anticoagulation services, would be jeopardized. Patients managing chronic conditions would face higher costs and reduced access to medications. The financial strain created by rebate models would force us to reassess the scope of services we provide, undermining our mission and compromising the health of our island community. We respectfully urge HRSA to reconsider the proposed rebate model and pursue alternatives that preserve the intent of the 340B Program by strengthening the safetynet, expanding access to affordable medications, and enabling CHCs to reinvest savings into comprehensive, communitybased care. We appreciate your time and attention in reviewing the detailed information, national data, and local impacts outlined in our letter below. Thank you for considering the full scope of concerns raised by community health centers regarding the proposed rebate model. 1 HICHC STRONGLY URGES HRSA TO EXEMPT CHCS FROM THE 340B REBATE MODEL PILOT PROGRAM The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 3 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Hawaii Island Community Health Center (HICHC) in particular, this means it will impact: PATIENT POPULATION SERVED: HICHC provides care to approximately 39,700 patients across Hawaii Island, many of whom rely on 340B-supported services to access affordable medications and comprehensive care CONSTRAINTS ON 340B PROGRAM VOLUME: HICHC processes approximately 20,600 340B transactions each year to serve its patient population patients across Hawaii Island. EXISTING ADMINISTRATIVE COSTS: HICHC already invests approximately $640,000 annually in staff time, software, auditing, and compliance to responsibly manage its 340B Program. USE OF 340B REVENUE: HICHC reinvests 340B savings directly into patient care, including medication assistance, clinical pharmacy support (Anticoagulation Services, Hepatitis C Treatment Program and more), behavioral health, school-based health centers, mobile health units, dental care, womens health, durable medical equipment, prior authorization processing, prescription refills by protocol, and more. LOSS OF CRITICAL 340B SAVINGS that support essential programs across Hawaii Island. SEVERE CASHFLOW STRAIN from being required to pay full price upfront for highcost medications without the reserves needed to float these expenses. REDUCED ABILITY TO MAINTAIN MEDICATION ACCESS for the Hawaii Island community if HICHC is forced to limit, delay, or carve-out the affected drugs. RISK OF SERVICE REDUCTIONS as funds are diverted from patient care, outreach, and enabling services to cover inflated drug acquisition costs. SIGNIFICANT NEW ADMINISTRATIVE BURDEN to track, submit, reconcile, and dispute rebate claims for every unit dispensed which is work that will require staffing HICHC does not currently have. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. 2 PATIENT IMPACT Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. 4 We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, DIRECT ORAL ANTICOAGULANTS (DOACS) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 INHIBITORS, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 5 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible to provide via sliding fee. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 ADMINISTRATIVE COMPLEXITIES AND FINANCIAL CHALLENGES FOR CHCS The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B REBATE MODEL OPERATIONAL & ADMINISTRATIVE COST CALCULATOR DESCRIPTION To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- 6 2025 UDA Data, HRSA (hrsa.gov) 6 owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. SLIDING FEE DISCOUNT: HICHC provided approximately $1,500,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. STAFFING IMPACT: HICHC anticipates needing 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. EXTERNAL VENDOR COSTS: Given increased complexity, HICHC anticipates an increase of approximately $51,000 for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. WORKFORCE IMPACT Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. ACCORDING TO AN INTERNAL NACHC ASSESSMENT, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 HICHC is estimating an additional 1.25 FTEs needed in anticipation of the rebate model. ADDITIONALLY, SEVERAL CHCS ESTIMATE THE COST TO HIRE ADDITIONAL STAFF TO BE BETWEEN $30,000 TO $200,000 ANNUALLY.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. In line with other CHCs across the nation, HICHC estimates approximately $120,000 in additional administrative costs needed to manage submissions and oversight alone. INCREASED ADMINISTRATIVE BURDEN: Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. HICHC estimates that an additional 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HICHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. PHARMACY SOFTWARE & THIRD-PARTY ADMINISTRATION CHANGES Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. ONE-TIME IMPLEMENTATION COSTS: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. HICHC estimates that $17,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. ONGOING OPERATIONAL FEES: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees (estimated at $8,500 monthly) to maintain these complex rebate- tracking features. These are permanent, recurring costs that diminish our 340B savings. TOTAL COST: For HICHC, which serves approximately 39,700 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $199,000 annually. THE IN-HOUSE PHARMACY: THE BURDEN OF DEEP IT INTEGRATION For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. SYSTEM INTEROPERABILITY: Unlike contract pharmacies that rely on ThirdParty Administrators (TPAs) to automate claim capture, data validation, and manufacturerspecific reporting, HICHCs entityowned pharmacy must build this functionality internally. The HICHC in house pharmacy uses PioneerRx, which does not have native 340B rebatemodel reporting capabilities. To comply with the proposed rebate infrastructure, HICHC would be required to take on the administrative burden of creating customizable reports to meet 340B rebatemodel reporting requirements. ONE-TIME INTEGRATION COSTS: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. HICHC is anticipating integration costs as high as $75,000 per NACHC estimation. ONGOING RESOURCE DIVERSION: Staff who could be providing more comprehensive services to the patient will be forced to spend approximately 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. THE CONTRACT PHARMACY: THE BURDEN OF NETWORK COORDINATION For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. HICHC currently partners with thirty-five pharmacies to increase access to affordable medications. TPA RELIANCE AND FEES: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. VERIFICATION LATENCY: The rebate model creates a reconciliation gap. Our staff must monitor claims across thirty-five different pharmacy locations to ensure rebates are paid correctly. RISK OF PHARMACY EXODUS: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients across much of Hawaii Island without any viable, affordable medication options. Over 17 percent of the U.S. population lives 8 in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 CLINIC ADMINISTERED DRUGS: THE BURDEN OF NEW SYSTEMS REQUIRED Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 BUNDLED PAYMENTS: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. SIMPLIFIED RECORDS: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. MINIMAL RISK OF DUPLICATE DISCOUNTS: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA SHOULD EXPLICITLY EXCLUDE CADS FROM ANY 340B REBATE MODEL PILOT. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 3.1 FINANCIAL CHALLENGES Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. HICHC offers a Sliding-Fee-Scale to ensure medications remain affordable for all patients. Based on household size and income, eligible patients can receive prescriptions at significantly reduced costs at our Entity Owned Pharmacy, which offers mail and delivery services island wide. This ensures essential medications access across Hawaii Island, regardless of ability to pay. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B REBATE DRUG COST IMPACT CALCULATOR DESCRIPTION To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: INCREASE UPFRONT ANNUAL DRUG SPEND: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. CASH FLOW IMPACT: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. REBATE-RELATED OPPORTUNITY COSTS: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). INCREASE UPFRONT DRUG SPEND: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC PURCHASE TO 340B REBATE PAYMENT WAIT PERIOD: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations analysis, we estimate that purchasing these ten drugs under the proposed rebate model would require more than $900,000 in upfront annual drug expenditures. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Currently, our organization purchases these same medications at the 340B ceiling price, and the proposed model would increase our upfront cost by more than sevenfold. This represents a substantial escalation in the capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, HICHC anticipates needing to reduce: ESSENTIAL CLINICAL SERVICES: To offset the upfront cost of drugs, HICHC would be forced consider scaling back non-revenue-generating but essential services, such as our mobile health unit, delivery services, hepatitis c treatment program, anticoagulation services, and more. OPERATING HOURS: HICHC recently expanded access by opening on Saturdays, allowing working-class patients, who often cannot attend weekday appointments without losing wages, to receive care. Under the proposed 340B Rebate Model Pilot, HICHC may be forced to reduce service availability, including the potential closure of Saturday clinic hours. WORKFORCE & STAFFING: The administrative burden imposed by this pilot would require us to divert critical funds away from clinical staffing. For every Rebate Coordinator we must hire, we lose the ability to support a fulltime Community Health Worker, directly reducing patient access and contributing to longer wait times and diminished continuity of care. PATIENT FINANCIAL ASSISTANCE: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2380 uninsured patients from rationing their insulin or heart medication. 3.2 WHOLESALER IMPLICATIONS Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. HICHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. WHOLESALER CREDIT LIMITS: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial 12 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. DISCOUNTS: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, HICHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $220,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. HICHC DATA: HICHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $115,000 and $127,000 in 2027 and 2028, respectively. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the significant interest costs alone would erode into funds that are currently dedicated to patient care services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have limited access to medical resources outside of Hawaii Island Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our patients depend on. FINANCIAL IMPACT OF REBATE DENIALS AND DELAYS Hawaii Island Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of approximately $80,000, which is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 4 RECONCILIATION AND REBATE DENIALS OPERATIONAL CHALLENGES If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A PRESUMPTION THAT REBATE CLAIMS ARE VALID unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP) STANDARDIZED, PUBLICLY DEFINED DENIAL CATEGORIES with claimlevel documentation. REBATE PAYMENT TIMING REQUIREMENTS must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A CLEAR ENFORCEMENT FRAMEWORK, including consequences for repeated late payments or improper denials by manufacturers. MANUFACTURERS MUST BEAR THE BURDEN of establishing that a rebate is not owed. REBATE DETERMINATIONS MUST ALIGN WITH STATUTORY PATIENT DEFINITION: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA SHOULD ESTABLISH A STAKEHOLDER ADVISORY PANEL to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. 5 EXISTING CHC COMPLIANCE ACTIONS CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. IN ALIGNMENT WITH SECTION 330 OF THE PUBLIC HEALTH SERVICE ACT, THEY UTILIZE A SLIDING FEE DISCOUNT that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. 14 CHCS ALSO ESTABLISH SYSTEMS FOR ELIGIBILITY DETERMINATION AND OFFER FULL DISCOUNTS TO INDIVIDUALS AT OR BELOW 100% OF THE FEDERAL POVERTY LEVEL (FPL). These services would not be possible without the savings generated from the 340B program. CHCS PARTICIPATE IN REGULAR OPERATIONAL SITE VISITS (OSVS) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCS PARTICIPATING IN THE 340B PROGRAM ARE REQUIRED TO REPORT 340B-RELATED INFORMATION ANNUALLY THROUGH THE UNIFORM DATA SYSTEM (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 6 ESTABLISHING A NATIONAL, NEUTRAL CLAIMS CLEARINGHOUSE WE RECOMMEND OPA USE A NEUTRAL CLAIMS CLEARINGHOUSE, WHICH WOULD PRODUCE MORE ACCURATE DEDUPLICATION AT A TINY FRACTION OF THE COST AND ADMINISTRATIVE BURDEN OF A REBATE MODEL. Compared to HRSAs proposed rebate model, the NCC approach would: AVOID CASH-FLOW AND BORROWING CHALLENGES for CEs by preserving the upfront 340B discount. SUBSTANTIALLY REDUCE ADMINISTRATIVE BURDEN ON CES by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. PROVIDE MANUFACTURERS WITH THE NECESSARY DEDUPLICATION DATA WITHIN THE SAME 45-DAY TIMEFRAME. IMPROVE REBATE ACCURACY, reducing the time and effort manufacturers and CEs must spend correcting errors. PRESERVE THE LONGSTANDING UPFRONT DISCOUNT STRUCTURE that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. PROTECT PATIENT ACCESS TO AFFORDABLE MFP DRUGS. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. IDENTIFY MEDICAID DUPLICATE DISCOUNTS IN MEDICAID. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not 15 only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. 7 CONCLUSION HAWAII ISLAND COMMUNITY HEALTH CENTER STRONGLY URGES HRSA TO EXEMPT CHCS FROM ANY 340B REBATE MODEL PILOT PROGRAM. A 340B rebate program represents a significant departure from the original intent of the 340B statute to allow safetynet providers to stretch scarce Federal resources and expand access to comprehensive care. A rebatebased structure would create substantial cashflow challenges, forcing CHCs to make difficult decisions about staffing levels, essential services, and even the range of medications they can afford to stock. In addition, CHCs would be required to make major investments in IT infrastructure, datatracking systems, and personnel to comply with rebate processing and reconciliation requirements. A rebate model would also create new barriers for patients, particularly uninsured individuals who rely on the upfront 340B discount to access affordable medications. Under a rebate system, it would be operationally impossible to provide the slidingfeescale and deeply discounted medications that CHCs are required by law to offer. As a result, patients with the fewest resources would face the greatest harm. Hawaii Island Community Health Center believes that a 340B rebate pilot would disproportionately impact the patients served by CHCs and other safetynet providers, undermining access to care and threatening the stability of essential communitybased services. Hawaii Island Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continued engagement with HRSA on this critical issue. If you have any questions, I can be reached via email at MABumgardner@hichc.org or telephone at 808-331-6489. SINCERELY, MELISSA BUMGARDNER, PHARM.D., BCPS VICE PRESIDENT OF PHARMACY SERVICES, HAWAII ISLAND COMMUNITY HEALTH CENTER
HRSA-2026-0001-2294Jefferson Hospital Association, Inc.2026-04-20T04:00Z12,204 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Jefferson Hospital Association, Inc. d.b.a. Jefferson Regional Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. One way our hospital uses the discounted savings it is entitled to under 340B is to offer discounted drugs to certain patients who cannot afford them, and that discount based on our purchase price. If we are required to purchase these medications at wholesale prices subject to rebates that are determined afterward, this program may cease to exist. We currently receive prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so could add a significant amount to our costs each year. Additionally, we believe our hospital would essentially be floating significant value to the drug manufacturers, benefiting the very companies who are otherwise required to provide this discount to covered entities, such as our safety net hospital. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. We have attempted to submit medical claims to certain manufacturers and have a multitude of problems that have been unresolved for months. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We have spent countless hours attempting to work with data submission platform providers regarding issues with errors in their handling of our data. In some of these instances, they seem unable or unwilling to correct their mistakes. Furthermore, some of the data elements desired by the manufacturers is not easily tracked and, in some cases, may be unavailable. We have to dedicate staff just to address these issues. With rebates applying across all hospital settingsnot just contract pharmacythe administrative burden and financial risk would increase greatly. We believe our hospital we would need to increase staff any where from two to four full time employees to monitor the rebate system, and this is before considering the additional cost of additional software and claims processing fees that would likely be necessary just to track rebates to ensure manufacturer accountability under the program. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. This situation creates unique challenges from a timing perspective to meet deadlines (i.e. 45 days) imposed by the manufacturers. As an example of other administrative challenges this creates, our team recently spent a significant number of staff hours gathering data for a claims submission, which required manually retrieving missing data for a very small number of claims for a certain manufacturer. The rebate submission system could not absorb our information without error. This is still not resolved. The solution offered by the data submission platform provider was to suggest we manually look-up the requested information and enter it into a spreadsheet to upload. This is simply not a sustainable process. Rebate costs will reduce resources available for patient care. One of the negative impacts we foresee includes that which may arise from affordable medications not being available to patients, such as those provided through our discount program. We believe some patients will not be able to afford and will not receive their medications, which may lead to unfavorable patient outcomes, potential readmissions to the hospital, and higher overall costs through higher health care service utilization. This in turn would put a strain on the health care in this rural hospital. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Jefferson Hospital Association, Inc.
HRSA-2026-0001-2295Raul Cabellos Flores · McMinnville, OR2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-1347
HRSA-2026-0001-2296(no commenter metadata)2026-04-20T04:00Z24,929 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Woodlawn Hospital is a 25-bed critical access hospital in Fulton County Indiana. We are the largest employer in our rural Indiana county. Four hospitals surrounding Fulton County Indiana have closed their OB units in the last 4 years, Pulaski Memorial in Winamac, Indiana, St. Joseph Plymouth Medical Center in Plymouth, IN, Dukes Memorial Hospital in Peru, IN and Parkview Wabash Hospital in Wabash, IN. We continue to operate an OB labor and delivery unit which relies heavily on income from the 340B program to offset losses from that department. We are truly a maternal oasis for north central Indiana. Fulton County has approximately 16% of children under the age of 18 living in poverty. One-thousand six hundred and ninety- three (1,693) students receive free or reduced lunches. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. Woodlawn Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. 1) Cost to covered entities: A) Administrative costs a. We processed approximately 3246 340B claims in 2025 b. We paid approximately $490,766 in fees to administer the program c. The fees above are driven by dispensing fees to contract pharmacies, third party administrators, 340B consultant fees to ensure auditing and compliance, pharmacy staff salaries to audit the program to ensure compliance. B) Potential increase in administrative costs if the rebate model goes into effect: a. I spend approximately 25% of my week currently managing the 340B program. I expect my time to at least double with the increased requirements of submitting claims level data to multiple entities, attempting to reconcile WAC purchases waiting for rebates. This is a conservative estimate. b. Our 340B Consultant firm is considering adding a separate service with additional fee to have Beacon credentials and verify rebates are being received as expected. C) Staffing Impacts a. I am a staff pharmacist first and 340B Primary Contact, second, for our small 25 bed Critical Access Hospital in Rural Indiana. The amount of time I spend auditing the program submitting data to 340B ESP currently cuts into my time to take care of our patients. With the proposed submission of even more data to several new entities, i.e., Beacon and Truzo by Kalderos, and monitoring to ensure we receive the rebates, it would take multiple hours each week, taking even more time from patient care. b. I estimate another FTE may need to be hired in the pharmacy department to manage this program. The roles would be to oversee and implement the new data extracts required, submit data to the different entities, Beacon, and Truzo, monitoring the WAC purchases to ensure 340B rebates are received, and investigating and possibly appealing any rebate denials received. D) System Infrastructure. a. Build and implement new medical claims data extracts. This will require extra hours from the Information Systems Department, the Pharmacy department and the EHR software department. b. One-time set up costs are conservatively estimated at $5000 E) Other Anticipated Costs a. There would be a reduction in patient care time spent by pharmacy staff due to increased time required to monitor and be compliant with the program b. Legal review and external audit of the program. c. The requirement to buy the medication at wholesale acquisition cost (WAC) will have a negative impact on cash flow. As rural critical access hospital we have minimal cash reserves. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. Woodlawn Hospitals cash flow is already razor thin each month. The burden and risk of buying medications at wholesale acquisition cost (WAC) would increase our costs substantially. One of the 25 drugs proposed has a 340B price currently under $1.00 the WAC cost of the same product is over $1200. Frankly, we do not have the cash flow to support buying this medication and waiting for a rebate that may or may not come from the manufacturer. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. We are genuinely concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Woodlawn Hospital is a 25-bed critical access hospital in Fulton County Indiana. We are the largest employer in our rural Indiana county. Four hospitals surrounding Fulton County Indiana have closed their OB units in the last 4 years, Pulaski Memorial in Winamac, Indiana, St. Joseph Plymouth Medical Center in Plymouth, IN, Dukes Memorial Hospital in Peru, IN and Parkview Wabash Hospital in Wabash, IN. We continue to operate an OB labor and delivery unit which relies heavily on income from the 340B program to offset losses from that department. We are truly a maternal oasis for north central Indiana. Fulton County has approximately 16% of children under the age of 18 living in poverty. One-thousand six hundred and ninety- three (1,693) students receive free or reduced lunches. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. Woodlawn Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Cost to covered entities: Administrative costs We processed approximately 3246 340B claims in 2025 We paid approximately $490,766 in fees to administer the program The fees above are driven by dispensing fees to contract pharmacies, third party administrators, 340B consultant fees to ensure auditing and compliance, pharmacy staff salaries to audit the program to ensure compliance. Potential increase in administrative costs if the rebate model goes into effect: I spend approximately 25% of my week currently managing the 340B program. I expect my time to at least double with the increased requirements of submitting claims level data to multiple entities, attempting to reconcile WAC purchases waiting for rebates. This is a conservative estimate. Our 340B Consultant firm is considering adding a separate service with additional fee to have Beacon credentials and verify rebates are being received as expected. Staffing Impacts I am a staff pharmacist first and 340B Primary Contact, second, for our small 25 bed Critical Access Hospital in Rural Indiana. The amount of time I spend auditing the program submitting data to 340B ESP currently cuts into my time to take care of our patients. With the proposed submission of even more data to several new entities, i.e., Beacon and Truzo by Kalderos, and monitoring to ensure we receive the rebates, it would take multiple hours each week, taking even more time from patient care. I estimate another FTE may need to be hired in the pharmacy department to manage this program. The roles would be to oversee and implement the new data extracts required, submit data to the different entities, Beacon, and Truzo, monitoring the WAC purchases to ensure 340B rebates are received, and investigating and possibly appealing any rebate denials received. System Infrastructure. Build and implement new medical claims data extracts. This will require extra hours from the Information Systems Department, the Pharmacy department and the EHR software department. One-time set up costs are conservatively estimated at $5000 Other Anticipated Costs There would be a reduction in patient care time spent by pharmacy staff due to increased time required to monitor and be compliant with the program Legal review and external audit of the program. The requirement to buy the medication at wholesale acquisition cost (WAC) will have a negative impact on cash flow. As rural critical access hospital we have minimal cash reserves. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basisnot post-sale rebatesand only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. Woodlawn Hospitals cash flow is already razor thin each month. The burden and risk of buying medications at wholesale acquisition cost (WAC) would increase our costs substantially. One of the 25 drugs proposed has a 340B price currently under $1.00 the WAC cost of the same product is over $1200. Frankly, we do not have the cash flow to support buying this medication and waiting for a rebate that may or may not come from the manufacturer. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify. Our estimated rebate costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. Our experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. We must dedicate staff just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. We are genuinely concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely,
HRSA-2026-0001-2297Arkansas Methodist Medical Center2026-04-20T04:00Z7,918 chars
See attached file(s) Arkansas Methodist Medical Center 900 West Kingshighway PO Box 339 Paragould, AR 72451 (870) 239-7000 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: I. Introduction On behalf of Arkansas Methodist Medical Center, we appreciate the opportunity to respond to the Health Resources and Services Administration's (HRSA) Request for Information (RFI) regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Program. Arkansas Methodist Medical Center is a disproportionate share hospital located in Paragould, Arkansas that has participated in the 340B program since January 2024. In line with the congressional intent of Section 340B of the Public Health Service Act, the savings our institution realizes through the 340B program are pivotal in allowing us to continue serving the most vulnerable members of our community. The current mechanismin which covered entities receive an upfront discounted acquisition cost for 340B-eligible drugsis foundational to the program's effectiveness for safety-net providers. II. Background: Impact on Our 340B Program To illustrate the concrete impact of the proposed rebate model on our operations, we provide the following data reflecting all drugs on the 2026 and 2027 Medicare Drug Price Negotiation Program (MFP) list, recognizing that the drugs added to the MFP list in 2026 remain in effect alongside the drugs added in 2027: Total claims for products on the 2026 and 2027 MFP drug list: 2,591 Current 340B acquisition cost for those drugs in 2027: 4445,000 Estimated upfront cost under the proposed rebate model (at WAC) in 2027: $2,966,000 These products as a share of our total 340B program: 30.6% Annual capital we would be required to float to drug manufacturers: $2.5 million Projected whole-program annual upfront capital requirement if the rebate model is extended to all 340B products: $11.5 million Observed first-quarter 2026 reduction in 340B savings due to the Medicare Drug Price Negotiation Program: 6% These figures demonstrate that a shift from upfront discounts to prospective rebates, especially in the face of reduced 340B revenue, would impose a substantial and immediate financial burden on our entityone that may threaten our ability to sustain current levels of patient care. III. Analysis: Concerns with the Proposed Rebate Model Based on our direct operational experience with the rebate pilot initially planned for January 1, 2026, we have identified the following concerns with the proposed model: Inequitable transfer of financial risk. Under the proposed rebate model, the safety-net provider would be forced to carry the financial risk of a claim being denied the 340B rebate, while manufacturers and their third-party vendors are granted the authority to deny access to the 340B discount. This fundamentally inverts the program's design, which was intended to benefit covered entities, not to position manufacturers as arbiters of 340B eligibility. Wholesaler credit capacity. Our wholesalers were neither prepared nor, in some cases, willing to extend the credit limits needed on our 340B accounts to operationalize even the partial 2026 rebate pilot. Once credit limits are exceeded, wholesalers stop fulfilling drug orders, effectively halting the 340B program. If pharmacies cannot receive 340B replenishment orders and consequently cannot pay 340B invoices, the entire program breaks down. This operational hurdle alone should be enough to prevent HRSA from implementing 340B as a rebate model. Inadequate reconciliation infrastructure. Based on our experience with the third-party vendor interface selected by manufacturers for the 2026 rebate pilot, available data and reporting were insufficient to support a reliable and practical reconciliation process. Notably, the vendor cited HIPAA compliance as justification for not retaining prescription numbers on claimsbut any vendor entrusted with this function should meet the security requirements necessary to maintain and report Rx numbers to system users. Increased operational and administrative burden. Beyond the increased acquisition costs, the added complexity of a rebate model will require additional resources from our operations and finance teams to continue participating in the 340B program. For the proposed pilot alone, we estimate we will need approximately 0.25 additional full-time equivalents to manage reconciliation, denial tracking, data submission, and dispute workflows. HRSA's Information Collection Request estimate of five hours per week of additional burden substantially understates the operational reality of the work involved. IV. Recommendations: Alternative Approaches to MFP/340B Deduplication We recognize that the Medicare Drug Price Negotiation Program creates a legitimate need for a process to prevent duplication between MFP and 340B discounts. However, the algorithms manufacturers have deployed to identify 340B claims are demonstrably flawed. Our 340B third- party administrators require multiple data feeds to appropriately identify 340B-eligible claims; there is no algorithm that manufacturers can replicate to match those processes. We respectfully urge HRSA to consider the following alternative approaches, which would achieve the deduplication objective with significantly less risk to covered entities: Establish a neutral 340B claims clearinghouse. Covered entities would be required to report 340B claims to a neutral, HRSA-administered or HRSA-designated clearinghouse. This would remove manufacturers from the undue position of serving as arbiters of 340B eligibility and eliminate the financial risk the proposed rebate model places on covered entities. Leverage existing manufacturer claims data for deduplication. Manufacturers are already permitted to require 340B claims data from covered entities as a condition of 340B access. This data could be used directly for MFP/340B deduplication rather than deploying unreliable third-party vendor algorithms. One improvement to this process would be for all manufacturers requiring claims data uploads to permit covered entities to attest to compliance with data upload requirements for new pharmacy accounts or accounts without usage at the time the claims data requirement is instituted. While a neutral 340B claims clearinghouse is a preferred mechanism for this task, the existing data upload platforms manufacturers are using could serve as a stopgap. V. Conclusion Arkansas Methodist Medical Center strongly urges HRSA to abandon the 340B Rebate Model Pilot Program and pursue alternative solutions to the MFP/340B deduplication requirement. As described above, the proposed rebate model would: (1) shift significant financial and operational burdens to the covered entities the 340B program was designed to benefit; (2) grant manufacturers undue authority over 340B eligibility determinations; and (3) jeopardize access to essential medications for uninsured and underinsured patients. We urge HRSA to instead pursue a neutral claims clearinghouse or improved use of existing claims data mechanismsapproaches that would achieve the deduplication objective without undermining the 340B program's core mission of expanding access to care for vulnerable communities. Thank you for considering our perspective. We welcome further engagement on this critical issue and are available to provide additional data or clarification as needed. Sincerely, Stan Carmack Pharmacy Director Arkansas Methodist Medical Center Paragould, Arkansas 340B ID: DSH040039
HRSA-2026-0001-2298North Arkansas Regional Medical Center2026-04-20T04:00Z4,703 chars
See attached file(s) 1 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of North Arkansas Regional Medical Center (NARMC), thank you for the opportunity to provide comments in response to the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. As a rural disproportionate share hospital (DSH), NARMC relies on the 340B Program to stretch scarce federal resources and sustain access to essential healthcare services for the communities we serve. The programs current structureproviding upfront discountsenables us to reinvest savings directly into patient care, including critical service lines such as maternal health, oncology, emergency care, and other services that are often under-reimbursed in rural settings. A transition to a rebate-based model fundamentally alters this structure. Requiring covered entities to purchase medications at full cost and await reimbursement introduces immediate cash flow constraints, reimbursement delays, and financial uncertainty. For rural hospitals with limited reserves, this shift creates operational instability and directly threatens access to care. A rebate-based approach also substantially increases administrative complexity. Current systems support retrospective validation, compliance monitoring, and audit readiness. A rebate model requires prospective, claim-level data submissions, near real-time validation, expanded reconciliation processes, and continuous dispute management. These requirements demand significant investment in staffing, system infrastructure, and vendor support, resulting in both substantial implementation costs and ongoing operational expenses. From a staffing perspective, this model necessitates additional full-time personnel and diverts existing staff from core responsibilities. These demands place additional strain on already limited rural healthcare resources and shift focus away from patient-centered care. Importantly, the current 340B framework already includes robust safeguards to ensure program integrity. Covered entities operate under established compliance requirements, maintain auditable records, and remain subject to HRSA oversight and audit processes. These mechanisms effectively address diversion, duplicate 2 discounts, and compliance concerns. A rebate-based model does not eliminate the need for these safeguards and instead introduces new layers of complexity. While preventing duplicate discounts remains a shared priority, assigning manufacturers the authority to determine rebate eligibility creates a clear conflict of interest. Manufacturers have a direct financial stake in limiting 340B pricing and rebate payments. Allowing manufacturers to serve as gatekeepers over eligibility, denial, and payment determinations undermines the integrity and neutrality of the program. Compliance with statutory requirements remains the responsibility of manufacturers, and enforcement must remain under HRSA oversightnot delegated to entities with competing financial incentives. Based on our assessment, a rebate-based model introduces significant operational and financial burdens. This model is not an effective or appropriate approach for the 340B Program. The responsibility for preventing duplicate discounts and ensuring compliance rests with manufacturers and must not be shifted onto covered entities. Any program modifications must avoid imposing new or disproportionate administrative burdens on covered entities. A rebate-based model may be presented as increasing transparency; however, these proposed benefits are not realized, and the model introduces significant operational, financial, and administrative burdens. For rural and safety-net providers, these impacts are substantial and directly affect the ability to sustain essential services. In summary, the current 340B Program structure effectively supports both program integrity and patient access. Any modifications must build upon existing compliance and oversight frameworks rather than fundamentally altering the model in a manner that introduces unnecessary burden and risk for covered entities. We appreciate HRSAs consideration of stakeholder input and the opportunity to share our perspective. Sincerely, Pamela Kindall North Arkansas Regional Medical Center Primary Contact Pharmacy Business Operations Supervisor
HRSA-2026-0001-2299340B Health System Coalition2026-04-20T04:00Z10,392 chars
Please see the attached comment letter from the 340B Health System Coalition April 20, 2026 Honorable Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-0001-0001) Dear Administrator Engels, On behalf of our hospitals and health systems, we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information on a potential 340B Rebate Model Pilot Program. While we believe that reforms are necessary to maintain the longevity and integrity of the 340B Drug Pricing Program, we urge you not to support, encourage or recommend a 340B Rebate Model Pilot Program. We are deeply concerned about the adoption of a rebate model in any form. As HRSA itself has acknowledged, such a model would fundamentally shift how the 340B program has operated for over 30 years. The 340B program was intentionally implemented to provide upfront discounts on covered outpatient drugs to safety-net providers, enabling them to stretch scarce resources and maintain access to care for vulnerable populations. A change to a rebate model would undermine the mission of the program by shifting financial, operational, and compliance burdens from manufacturers onto covered entities, particularly those least able to absorb them. Even more important, we are concerned that a rebate model, as was proposed previously by HHS, would directly harm patients. Pharmaceutical manufacturers often assert that implementing a rebate model into the 340B program would solve intrinsic problems related to duplicate discounts, data integrity, and fraud and abuse. We believe, however, that a more effective and durable solution is the establishment of a government sanctioned, independent national 340B claims clearinghouse, overseen by HRSA and developed with input from all relevant stakeholders. Such a clearinghouse could securely receive standardized, de- identified electronic claims data, provide state Medicaid programs with the minimum necessary information to prevent duplicate discounts, and eliminate the need for retrospective rebate arrangements, payer specific reporting requirements, and Medicaid modifiers. Creating a government-sanctioned National Clearinghouse would provide necessary protection while establishing a simplified, automated process for covered entities to submit de-identified claims data from both public and private payers. This approach would increase transparency and ensure that all data submissions comply with HRSA requirements rather than manufacturer-imposed standards. Under a rebate-based model, covered entities would be required to pay the full acquisition cost of drugs upfront and then wait for reimbursement. It is imperative that covered entities not be forced to receive the rebate only after the entire package purchased is dispensed. Reimbursement should occur on a per- prescription basis. Many pharmaceutical products are packaged in large quantities, sometimes containing hundreds of doses. Complete package dispensation can vary widely, from days to months, particularly for low-utilization drugs. Of note, full dispensation of a purchased package may stretch beyond the 45-day time constraints established by manufacturers for receipt of dispensing data, resulting in lost opportunity for rebates due to non-conforming claims that manufacturers are allowed to deny. Consequently, the 2 rebate model creates significant cash-flow gaps, particularly for providers with lower patient volumes or inconsistent demand for high-cost medications, where slower drug turnover extends the time to receive rebates. Any purported promptness after a rebate is requested is largely irrelevant to the financial reality facing covered entities. These challenges would place added financial strain on all covered entities and would be especially burdensome for disproportionate share hospitals (DSH), rural, and critical access hospitals, and smaller providers operating on thin margins and relying on 340B savings to sustain services. As a result, a rebate structure would disproportionately harm the very providers and patients the 340B program is intended to support, exacerbating inequities and undermining its role as a critical safety- net resource. It is critical to clarify the meaning of prompt payment as it is being applied to a potential 340B rebate model. Proponents often point to the ten-day period between the submission of a rebate request and payment outlined in the model. However, this framing ignores the period that matters most to covered entities: the time between the initial purchase of a drug at wholesale acquisition cost (again, a significantly higher price rarely paid by healthcare entities for these drugs) and receipt of the rebate. Covered entities are obligated to pay wholesalers within a contracted timeframe and any time spent waiting for a rebate would minimize financial resources available to remit payment to their debtors. Furthermore, it is imperative that a prompt and efficient appeals mechanism for any rebate claims that are declined or denied is put in place to ensure covered entities are protected. Manufacturers should not be permitted to create an interest free cash reserve at the expense of covered entities. A rebate model would furthermore impose added burdens on DSH hospitals and other providers that disproportionately treat patients with complex conditions requiring novel therapeutics and orphan drugs. These high-cost therapies would amplify cash-flow risks and administrative complexity under a rebate system, further disadvantaging providers that care for the most medically complex populations. In addition to the financial strain, a rebate model would significantly increase administrative complexity. Covered entities would be required to implement new IT systems, integrate extensive data tracking and claims reconciliation processes, and devote staff time to rebate management and appeals. These requirements would divert already limited resources away from patient care towards pharmaceutical management while increasing the costs of administering the 340B program and thereby diminishing the benefit of the program that was originally intended by Congress. Absent strict standardization and enforcement, providers may be forced to navigate multiple manufacturer-specific platforms and processes simultaneously. Covered entities would have little leverage or input into the design of these systems, despite bearing the operational burden. The cumulative effect would be increased administrative costs and inefficiencies that further undermine the programs effectiveness. The proposed rebate model also raises serious data security and patient privacy concerns that must be addressed before any implementation. The submission of sensitive patient level data to third party vendors that may not be subject to the confidentiality and privacy requirements of the Health Insurance Portability and Accountability Act (HIPAA) presents substantial risk. To allow certain data elements, including prescription numbers, fill numbers, prescriber identifiers, and service provider identifiers, could expose covered entities to compliance and liability risks. To put it another way, covered entities are 100 percent accountable to HIPAA, while pharmaceutical manufacturers and their intermediaries are 0 percent subject to the law. To close the gap, there needs to be responsibility on both sides to protect patient privacy and a requirement to indemnify and hold Covered Entitys harmless for any breach of privacy or security resulting from a drug manufacturer or its agents. 3 Data security and privacy risks are not evenly distributed. Individuals insured through small employers would face heightened vulnerability to reidentification due to smaller beneficiary pools. For example, data that is effectively anonymized within a large employer plan could much more easily be linked to a specific individual in a small business with only a handful of enrollees. The same would be true for smaller entities serving smaller communities. As a result, the proposed model could disproportionately threaten the privacy of patients employed by small businesses or those that reside in small communities. At a minimum, HRSA should require robust cybersecurity standards, enforce manufacturer liability for breaches, and mandate clear protections and accountability mechanisms for all third-party platforms involved in rebate processing. Finally, HRSA should make clear that manufacturers may not withhold or deny discounts/rebates for eligible 340B drugs. If a manufacturer contends a rebate is not owed, it must provide timely detailed documentation identifying the specific basis for non-payment and the data relied upon, and covered entities must have access to a transparent, enforceable dispute-resolution and appeal process with defined timelines. Reliance on informal, good-faith negotiations and after-the-fact program removal for repeated delays is insufficient to prevent financial harm to covered entities or to deter improper denials and payment delays. We urge HRSA to carefully consider these concerns before implementing any rebate model. At a minimum, HRSA should delay moving forward with such a proposal until the significant financial, administrative, and privacy risks identified above are fully addressed. Doing so is essential to safeguarding patient information, protecting safety-net providers, ensuring that essential services and drugs may continue to be provided to patients in the communities served by 340B Covered Entities, and preserving the integrity and intent of the 340B program. Thank you for your consideration. Sincerely, Baptist Health CentraCare Kentucky, Indiana Minnesota Henry Ford Health Legacy Health Michigan Oregon, Washington Methodist Le Bonheur Healthcare OSF HealthCare Tennessee, Mississippi Illinois, Michigan Piedmont Healthcare Sanford Health Georgia South Dakota University of Kansas Health System Kansas
HRSA-2026-0001-2300Mlama I Ke Ola Health Center2026-04-20T04:00Z43,451 chars
See attached file(s) April 17, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Community Clinic of Maui, Inc, dba Mlama I Ke Ola Health Center (CCM), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Mlama I Ke Ola Health Center (CCM) is a federally qualified health center committed to improving the health and well-being of our community. Rooted in our mission to provide culturally sensitive, coordinated primary care services emphasizing education, prevention, and advocacy, we strive to mlamacare forthe whole person, regardless of their ability to pay at the time of visit. Our approach integrates medical, dental, and supportive services to ensure patients receive coordinated care that honors the different communities we serve on Maui. We provide services across multiple sites, school-based health centers and a street medicine program, reaching communities throughout the island. Our geographic scope allows us to meet patients where they are, expanding access to essential health services in areas with limited healthcare resources. We are dedicated to advancing health equity by reducing disparities and ensuring that all patients receive care that is respectful, inclusive and safe. 2 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For CCM in particular, this means it will impact: 171,064 340B transactions and 18,296 patients Current admin costs for the 340B program are approximately $300,000 340B revenue is used to offset uncompensated care. With increased costs or reduced reimbursements from the 340B program, CCM would need to curtail its services and the curtailment of those services would disproportionately affect the most vulnerable of our patient population. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CCM provided $1,492,501 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CCM anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CCM anticipates an increase of $200,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 CCM would need to hire 2 FTEs to manage the 340B rebate reimbursements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. CCM estimates 2 additional FTEs and costs related to staffing those positions is estimated at $150,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CCM urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. CCM estimates that implementation costs of $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 18,296 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $350,000 annually. The Contract Pharmacy: The Burden of Network Coordination 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 40 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 40 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Maui County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CCM has an agreement with the contract pharmacies to provide uninsured patients with discount drugs. The patients provide a letter and receive the discount when presenting the letter at the pharmacy. CCM also maintains select in-house medications that can be dispensed to uninsured patients as needed. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $110,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $3,700 to purchase these same drugs at the 340B ceiling price. This represents a 2,841% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CCM anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Street Medicine program and Kahana satellite clinic. Operating Hours: We anticipate needing to reduce our clinic hours by 11 hours per week, specifically impacting our evening and weekend hours. This would limit access to care and greatly impact patients that work, caregivers, and those who are not able to seek care during standard business hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Community Health Workers, directly affecting our ability to engage in outreach and ensure continuity of care, particularly for patients with chronic conditions. As a result, we anticipate declines in clinical quality performance and preventive care measures, as well as increased use of the emergency department and/or hospitalizations. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,471 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 10 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CCM asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. CCM estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $9,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on CCM, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays CCM urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or 11 ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $11,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. 13 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CCM strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CCM believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CCM appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Zachary Johnson at zjohnson@ccmaui.org. Sincerely, Dr. John Vaz, MD, MSHA Community Clinic of Maui, Inc Dba Mlama I Ke Ola Health Center
HRSA-2026-0001-2301Lane Regional Medical Center2026-04-20T04:00Z11,930 chars
See attached file(s) above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos would not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. We urge HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Sincerely, Jassoni Martin, PharmD Executive Director of Pharmacy and Retail Services 225-658-4364 (pharmacy) 225-658-4449 (office) Lane Regional Medical Center 6300 Main Street, Zachary LA 70791 Our mission is to provide exceptional healthcare services to every patient, every time. manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a Clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials),with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) ofthe 3408 statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prornpt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRA's prompt payment requirements. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. Allowing manufacturers any flexibility in the pilot program opens the.door to abuse of a model they alone demanded. Further, to best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete timelines for resolution. Further, manufacturers must be required to cover the legal fees and othdr'administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from creating bespoke programs to implement a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted Our mission is to provide exceptional healthcare seivices to every patient every time. explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. lf HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 3406 covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA roIlout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead.with a rebate model over covered entities' objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSA's previous statement that plans must assure that "no additional administrative costs of running the rebate model shall be passed on to covered entities." However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providdrs, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systerns are seeing delayed rebate and claims payments, forcing them to float additional costs. Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Although Our mission is to provide exceptional healthcare services to every patient, every time. r Lane Regional Medical Center Care You Can Count On 6300 Main Street, Zachary, Louisiana 70791-4037 (225) 658-4300 phone (225) 658-4287 fax www.LaneRMC.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: On behalf of the largest employer in Zachary, LA comprised of 974 employees which includes 27 pharmacy employees, Lane Regional Medical Center appreciates the opportunity to comment on the Health Resources and Services Administration's (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the "pilot program" or "model"). We continue to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.' Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We continue to believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improperjustification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSA's efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the rebate model pilot was See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AlDs programs that are structured differently than other covered entities). Our mission is to provide exceptional healthcare seivices to every patient, every time.
HRSA-2026-0001-2302Community Health Service Agency, Inc of Hunt County dba Carevide2026-04-20T04:00Z4,732 chars
See attached file(s) CarAde April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Service Agency, Inc. of Hunt County dba Carevide, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. We strongly urge HRSA to exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot Program. The proposed shift of responsibility from manufacturers to safety-net providers through a retrospective rebate model threatens to destabilize our pharmacy operations and hinder our ability to serve the most vulnerable members of the North Texas communities we serve. The Human Cost of a Rebate Model Carevide has a nearly half-century history of providing primary healthcare services, including women's health, pediatrics, dental, behavioral health, and enabling services to residents of North Texas. Today, Carevide serves patients through eight health centers in five countiesCollin, Delta, Fannin, Hunt, and Kaufman counties, many of which are located in medically underserved areas. For the patients who walk through our health center doors, Carevide is often their only lifeline to health care and life-sustaining medications. Our typical patient is a hard-working member of our North Texas community who is likely low-income, uninsured, or underinsured. They are often managing chronic illnesses like diabetes, and they rely entirely on our in- house pharmacy to afford essential, daily therapies such as insulin. For these individuals, access to discounted medications is not a convenienceit is a matter of basic survival. If a rebate model forces our organization to face insurmountable upfront drug costs, we will be forced to discontinue carrying these medications and our patients will bear the ultimate burden. They will be forced into making the impossible choice of delaying treatment, rationing their medication, or going without it entirely. This will inevitably lead to uncontrolled illness, avoidable emergency room visits, hospitalizations, and devastating long-term health complications. Financial and Administrative Challenges The shift to a rebate model would create a profound operational and financial barrier for Carevide. Annually, our 340B revenue (net of drug costs) accounts for about 3% of our overall revenue. For the most recent 12-month period (March 2025 - February 2026), our 903.455.5986 I 4500 Wesley St., Greenville, Texas 75428 I Carevide.org Coracle total 340B drug costs were approximately 2% of our expenditure budget, factoring in the current 340B reduced prices. Because we operate on a strict, balanced budget, requiring Carevide to purchase these medications at full wholesale acquisition cost while waiting indefinitely for rebates would be virtually impossible to absorb. It would severely impede our ability to cover the day-to-day operational costs required to keep our eight health centers open. Due to these financial and administrative challenges, Carevide would be unable to continue offering these necessary medications through our in-house pharmacies. In addition, if Carevide continued to carry these medications, we would likely be required to hire additional staffing and divert precious resources simply to manage the intricacies and new administrative burdens of a rebate program. Threat to the Sliding Fee Discount and Essential Care In 2025, Carevide served a total of 27,771 patients. Because the vast majority of our patients lack adequate coverage, we are proud to provide sliding fee discounts to make care accessible. Under a 340B rebate model, maintaining this sliding fee discount would become incredibly challenging. This would cause an immediate, negative financial impact to Carevide and to the vulnerable populations who rely heavily on these discounts to afford health care. The current upfront 340B discount structure allows Carevide to provide timely, reliable access to medications for individuals who need them most. Moving to a rebate model fundamentally undermines that access, placing both safety-net providers and the communities we serve at severe risk. We respecffully request that HRSA exempt Carevide and CHCs from any rebate model to protect their financial stability and ensure continued, life-saving access to care for patients across the county. Sincerely, Michael Glas, MBA Chief Executive Officer 903.455.5986 I 4500 Wesley St., Greenville, Texas 75428 I Carevide.org
HRSA-2026-0001-2303Hospital General Menonita, Inc.2026-04-20T04:00Z14,804 chars
Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Mennonite Health System, which is a large private nonprofit health system in Puerto Rico, operating six general hospitals (340B Covered Entities), one mental health hospital with 7 large ambulatory clinics, 11 emergency departments (5 child sites), and six entity owned pharmacies in the central and southern regions of the island. We serve a disproportionate share of low income families in our service area and the medical indigency rate or our population is around 47%, compared to a national average of around 20%. We are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on the Mennonite Health System and our six covered entities, that far outweigh any benefit that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which all Covered Entities including the Hospitals of Mennonite Health System of P.R. has relied for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their response. The Mennonite Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating cost, we have assumed that any future Rebate Program wll include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs Februrary 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The Mennonite Health System can spend on patient care and comprehensive health care services. OFICINA CORPORATIVA Apartado 1650 Cidra, PR 00739 | Tel. 787-434-1700 / Fax 787-434-1734 April 20, 2026 The Honorable Thomas J. Engles Administrator Health Resources and Services Adminitration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Mennonite Health System, which is a large private nonprofit health system in Puerto Rico, operating six general hospitals (340B Covered Entities), one mental health hospital with 7 large ambulatory clinics, 11 emergency departments (5 child sites), and six entity owned pharmacies in the central and southern regions of the island. We serve a disproportionate share of low income families in our service area and the medical indigency rate or our population is around 47%, compared to a national average of around 20%. We are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on the Mennonite Health System and our six covered entities, that far outweigh any benefit that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which all Covered Entities including the Hospitals of Mennonite Health System of P.R. has relied for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their response. The Mennonite Health System has done its best to provide detailed answers in the limited time available to us. For purposes of estimating cost, we have assumed that any future Rebate Program wll include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs Februrary 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that The Mennonite Health System can spend on patient care and comprehensive health care services. 2 Administrative Cost under a Potential 340B Rebate Program Any rebate program would require The Mennonite Health System to spend significant sums on new administrative cost. When we chose to participate in the 340B Program in 2022, The Mennonite Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institutions that go far above any beyond what we had expeted and planned for as a 340B hospital and far above and beyond what we are experiencing now. Below is the estimated incremental administrative and operational cost our organization would incur under a 340B Model Rebate Pilot Program: Initial cost of Implementation ($175,000) Estimated TPA Annual Fee - $115,000 (This fee is considering only 10 drugs in the Rebate Pilot Program the annual fee can increase next year with the addition of 25 more drugs in 2027) TPA One Time Implementation Fee per Facility - $10,000 for a total of $60,000 This will cover cost related to claim processing, data submission, reconciliation/chasing down rebates, audit support, and challenging denials. Ongoing costs ($115,000) Estimated Annual TPA Fees: Approximately $115,000 or more based on a flat fee structure, and/or alternative pricing models proposed by the TPA, including tiered fee structures or a percentage-based rebate savings retention model. Other potential recurring expenses are legal review, training, consulting services, and a reduction in services offered. Staffing costs Impact Under a Potential 340B Rebate Program ($260,000) The Mennonite Health System will require an increased number of full-time personnel to effectively manage the complexities of the program, including payment reconciliation processes, dispute resolution, claim monitoring, and additional audit related activities, among other responsibilities. One (1) FTE financial Analyst approximately $50,000 annually, responsible for payment reconciliation, tracking and recovering rebates, and managing process for challenging denials. One (1) FTE Pharmacy Technician per facility (6) approximately $35,000 per FTE, totaling $210,000 annually, responsible for compliance activities, IT System support and staff training. The Total estimated annual incremental cost to operate the 340B Rebate Program for the Mennonite Health System is $435,000, representing a material deduction from the total savings achieved in FY25. System and Infrastructure for Implementation of a Potential 340B Rebate Program The Mennonite Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Providing medical claim data to the manufacturers selected TPA will be operationally challenging for our institution due to the lack of a direct data interface between the TPA and our EHR. Without any automated data feed, the process would rely heavily on manual data extraction, validation, and transmission. 3 Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force the Mennonite Health System to effectively provide drug companies with interest- free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, which delayed discount will have meaningful impact on our institution and the patients we serve. Overall, based on the dispensing volume of the drugs included in the first two phases of the program, the estimated 340B savings at risk due to the 340B Rebate Pilot Program is approximately $670,000. This represents approximately 25% of the total savings achieved in FY25. Adverse Impact of These Additional Cost and Burdens All these many different costs and burdens add up. Unfortunately, that means that Mennonite Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Our system offers a wide range of healthcare services, including emergency care, inpatient and outpatient hospital services, surgical procedures, pharmacy services with home delivery and a new addition of a Specialty Pharmacy, and specialized clinical programs designed to meet the diverse needs of the communities we serve. The Mennonite Health System has recently achieved historic certifications in Puerto Rico, standing out as the first institution on the island to reach specific international accreditation levels from The Joint Commission and other prestigious organizations. The most recent certifications are: Age-Friendly Health System (Menonita Guayama Hospital): Recognized in April 2026 by the Institute for Healthcare Improvement (IHI) for implementing the 4Ms model Advance Total Hip and Knee Replacement Center of Excellence (Menonita Aibonito Hospital) In March 2026, it became the first and only hospital in PR to receive this advanced certification from The Joint Commission in collaboration with the American Academy of Orthopedic Surgeons (AAOS) Advance Comprehensive Stroke and Neuroscience Center (Menonita Caguas Hospital): Certified in September 2025, by The Joint Commission. This unprecedented distinction on the island includes the Gold Seal of Approval and the Heart-Check mark. Primary Stroke Center (Menonita Ponce Hospital): Received this accreditation in June 2025, validating its capacity for rapid and effective response to cerebrovascular emergencies. Get with the guidelines- Stroke Silver Plus Recognition: Awarded in July 2025 to the Caguas and Ponce hospitals by the American Heart Association for complying with evidence-based protocols for 12 consecutive months. Academic Accreditation for General Surgery Residency: Menonita Cayey Medical Center obtained a new accreditation in March 2026 to train surgical physicians on the island. ACGME Accreditations (Cayey): Recently secured endorsement for residency programs in Internal Medicine and Family Medicine, following its certification as a Teaching Hospital in late 2023. Chest Pain Center Accreditation (Menonita Cayey Hospital): Accredited by the American College of Cardiology in July 2024. Center of Excellence in Robotic and Minimally Invasive Surgery: Certified by the Surgical Review Corporation (SRC). Bariatric Center of Excellence: Re-accredited by the American College of Surgeons (ACS), maintaining this distinction continuously since 2001 4 The savings captured through the 340B Drug Pricing Program are an indispensable component of our operational framework, directly fulfilling the programs intent to stretch scarce resources. These funds are essential for the ongoing expansion of specialized services tailored to high-need communities and underserved populations across the island. For all these reasons, Mennonite Health System respectfully submit that the cost of any Rebate Program will outweigh any expected benefit. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Mennonite Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and may other critical details (e.g., data required, possible ground for denial of rebates, dispute resolution process, other guardrails). A failure to permit additional comments on the specifics features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have any questions. Sincerely, CPA Ricardo Hernndez Rivera Chief Executive Officer
HRSA-2026-0001-2304Baptist Memorial Health Care Corporation2026-04-20T04:00Z134,711 chars
Please see attached. April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital North Mississippi, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital North Mississippi April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Oktibbeha County, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Oktibbeha County April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Union County, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Union County April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Medical Center Leake, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Medical Center Leake April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: NEA Baptist Memorial Hospital, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, NEA Baptist Memorial Hospital April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Memphis, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Memphis April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Union City, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Union City April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Golden Triangle, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Golden Triangle April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Crittenden, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Crittenden April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Calhoun, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Calhoun April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: MS Baptist Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, MS Baptist Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Medical Center Yazoo, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Medical Center Yazoo April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Arkansas Methodist Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Arkansas Methodist Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Desoto, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Desoto April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Memorial Hospital Tipton, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Memorial Hospital Tipton April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Anderson Regional Medical Center, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Anderson Regional Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Baptist Medical Center Attala, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs, 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Our hospital strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates, and only recently has HRSA suggested a change. We could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B program, including our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care, is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate model, even one designed with safeguards, could cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care, outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant burden and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pays less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Our hospital has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify ongoing implementation burdens on hospitals. We will incur administrative and operational costs to prepare and submit claims data, track rebate data, validate/audit receipt of rebates, interface with the manufacturers vendor and/or manufacturers to address errors and pursue payment for denied rebates, or file wrongfully denied rebate claims with HRSAs Administrative Dispute Resolution (ADR). This could include costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites where only 340B drugs are used, in addition to conducting regular self-audits of those locations to ensure that the systems are working correctly. The implementation of a rebate model would require that we hire at least 2 additional full-time employees and force our hospital to reallocate staff hours to work on rebates. We would have to add additional services with our current third-party vendors and potentially need to add additional third-party vendors. This would add significant cost to our hospital. We are very concerned about rebate delays, especially for drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include negative impacts to patient care, patient discounts, uncompensated care, unreimbursed care, capital improvements, addition of new specialties, and hospital operations. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Baptist Medical Center Attala
HRSA-2026-0001-2305Dignity Health2026-04-20T04:00Z7,100 chars
ISSUE: 340B Rebate Model - Please see attached Comment Letter from Mercy Medical Center Mt. Shasta Dignity Health tAi Mercy Medical Center Mt. Shasta April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Mercy Medical Center Mt. Shasta, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. Mercy Medical Center Mt. Shasta is a critical access hospital that provides much needed medical resources to its community and surrounding areas. The next closest medical facility that provides the same services is more than 60 miles away. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Medical Center Mt. Shasta that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Medical Center Mt. Shasta relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The 340B program is vital for Mercy Medical Center Mt. Shasta, allowing it to serve the entire community by covering medication costs that Medicare and Medi-Cal reimbursements don't fully address. This financial relief on pharmaceuticals enables the hospital to reinvest in crucial, non-reimbursed community health initiatives. These include medications for indigent patients, Bereavement Support Groups, Breastfeeding Support, Childbirth Classes, Community Health Screenings and Education, Community Grants, the Hope and Healing Support Group Apr 2O, 2026 Mercy Medical Center Mt. Shasta HHS Docket No. HRSA-2O26-O3O42 (for infant loss), and Lactation Counseling. These programs proactively reduce drug dependence and overall medical expenses for the community by emphasizing prevention and early support, thereby lessening the need for costly, advanced care. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESR That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Rodger Page President Dignity Health- North State Market & Mercy Medical Center Mt. Shasta St. Elizabeth Community Hospital Apr 20, 2026 Mercy Medical Center Mt. Shasta HHS Docket No. HRSA-2O26-03042 CommonSpint As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2306NO/AIDS Taskforce dba CrescentCare2026-04-20T04:00Z42,546 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of CrescentCare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: CrescentCare anticipates a significant reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. CrescentCare is a federally qualified health center in New Orleans serving over 14,000 patients with primary medical care, dental and behavioral health services. CrescentCare's mission is to strengthen our entire community through whole-person healthcare and education. The organization is rapidly growing with many highly successful programs through its holistic approach to health care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For CrescentCare in particular, this means it will impact: 14,000 patients we serve Current administrative costs for CrescentCares 340B program, which are substantial and represent a significant ongoing investment in compliance, pharmacy operations, and patient access infrastructure. CrescentCare uses 340B program income directly support primary medical care, dental care, behavioral health services, legal services, case management, psychiatry, nutrition, quality and data initiatives, and food access programs, in addition to essential operational and overhead costs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CrescentCare provided services to 2770 uninsured patients, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CrescentCare anticipates needing 1.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CrescentCare anticipates an increase of $50,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 CrescentCare anticipates needing approximately 1.0 additional FTE, which would require new hiring due to lack of existing staff capacity. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. CrescentCare anticipates meaningful increases in staffing costs associated with hiring and supporting new personnel dedicated to rebate administration and compliance. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 20 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CrescentCare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes 7 Internal NACHC assessment (99 responses). 8 Ibid. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Approximately $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 14,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with three contract pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across multiple pharmacy partners, including national networks such as Avita, CVS, and Walgreens, each with numerous dispensing locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Orleans and surrounding parishes with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full 11 Internal NACHC survey data WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CrescentCare provides medications at the 340B price, which is critical to sustaining affordable prescription access under our sliding fee discount program. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate that purchasing these 10 drugs under the proposed rebate model would require significantly higher upfront capital compared to current 340B ceiling pricing. This represents a substantial increase in financial burden and cash flow risk that CrescentCare cannot absorb without reducing services. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CrescentCare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our care coordination and case management services that connect patients to housing, food, and behavioral health support. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a linkage-to-care specialist who connects patients to HIV and behavioral health services, directly increasing wait times for care. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,675 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CrescentCare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be substantial annuallyfunds that are currently dedicated to expanding access to primary care, behavioral health services, and medication access for uninsured and low-income patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on CrescentCare, our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays CrescentCare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in significant net annual losses. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CrescentCare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CrescentCare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CrescentCare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact SarahJane Guidry, Director of Policy, at sarahjane.guidry@crescentcare.org Sincerely, Alice Riener CEO, CrescentCare
HRSA-2026-0001-2307HENDRICK MEDICAL CENTER2026-04-20T04:00Z39,300 chars
See attached file 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 1 April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Hendrick Medical Center (SCH450229) and Hendrick Medical Center Brownwood (SCH450587) (Hendrick Medical Center), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Hendrick Medical Center and other Covered Entities. As a 340B-participating hospital, Hendrick Medical Center is a core component of the healthcare safety net in Abilene and Brownwood, Texas and the surrounding communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Hendrick Medical Center participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Hendrick Medical Centers 340B Program participation enables us to commit an approximately additional $50 million dollars per year to the Abilene and Brownwood, Texas and surrounding communities safety net population we serve, including using 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and facilitating manufacturer application of self-serving 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 2 policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Hendrick Medical Center wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Hendrick Medical Center submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH HENDRICK MEDICAL CENTERS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP- 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f- 2(d)). 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 3 eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B- eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Hendrick Medical Center and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval,5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Hendrick Medical Center when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR HENDRICK MEDICAL CENTER TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. Drug manufacturers have progressively increased the number of administrative requests and demands placed on covered entities, requiring covered entities to create new processes and commit additional labor and resources culminating in significant expense. In order to maintain access to drugs, manufacturers have demanded that covered entities disclose patients protected health information and other confidential information to their vendor and third-party contractors, such as Kalderos, 340B ESP and Beacon, giving vendors the right to monetize covered entity data. Additionally, covered entities have not been provided 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 4 assurances that protected health information and other confidential information will be securely maintained. Beacons terms and conditions as published with the prior attempt to implement a 340B rebate model was one sided, and onerous. For example, we must correct errors in their favor in perpetuity, but errors in our favor must be corrected within 45 days or we lose the opportunity to correct them. Other demands for information have been made by Boehringer Ingelheim requesting interrogatories and documents from covered entities. We further note that the Medicare Drug Price Negotiation Program (MDPNP), which became effective January 1, 2026, has already shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated debate requests. For drugs dispensed through our Hendrick Medical Center pharmacy, manufacturers such as Johnson & Johnson, Prasco, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, and Novo Nordisk have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at our entity owned pharmacies under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Hendrick Medical Centers purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication- Issue-Letter-to-CMS.pdf) (last accessed Apr. 9, 2026). 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 5 Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Hendrick Medical Center trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO HENDRICK MEDICAL CENTER TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Hendrick Medical Center would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not 9 42 U.S.C. 256b(a)(1). 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 6 lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Hendrick Medical Center has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS HENDRICK MEDICAL CENTER TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also 10 See 45 C.F.R. 160.103. 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 7 ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE HENDRICK MEDICAL CENTERS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF HENDRICK MEDICAL CENTER? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE HENDRICK MEDICAL CENTER FOR THE VALUE OF ITS DATA? One of Hendrick Medical Centers principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Hendrick Medical Center for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Hendrick Medical Center believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment- Activity_2024.pdf. 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 8 pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Hendrick Medical Center urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Hendrick Medical Centers perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Hendrick Medical Centers patient population, we serve many other patients, including patients with no coverage at all. Requiring Hendrick Medical Center to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 9 HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO HENDRICK MEDICAL CENTER? IF NOT, WHY NOT? As noted above, Hendrick Medical Center firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Hendrick Medical Center urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON HENDRICK MEDICAL CENTER? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Hendrick Medical Center to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data 12 See 45 C.F.R. 164.501. 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 10 collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. Hendrick Medical Center attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Hendrick Medical Center is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT- BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Hendrick Medical Center hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States 13 See Appendix for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 11 and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Hendrick Medical Center encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat- file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Hendrick Medical Center maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post- transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 12 expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Hendrick Medical Center to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Hendrick Medical Center purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Hendrick Medical Center could be required to carry the full acquisition cost of these drugs for weeks or months 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 13 before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Hendrick Medical Center will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Hendrick Medical Center would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Henrick Medical Centers operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Hendrick Medical Center and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 14 questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on itare at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, _______________________________ Jeremy Walker, CFO & Vice President Hendrick Medical Center 1900 Pine Street Abilene, TX 79601 325.670.2182 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 15 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 16 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data 1900 Pine Street Abilene, Texas 79601-2432 325-670-2000 hendrickhealth.org Page 17 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2308Dignity Health2026-04-20T04:00Z6,952 chars
ISSUE: 340B Rebate Model - Please see attached Comment Letter from St. Elizabeth Community Hospital rl 11 P rfl u-geaLili St. Elizabeth Community Hospital April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for lnformation: 3408 Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Elizabeth Community Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Elizabeth Community Hospital that far outweigh any benefits that might come from it. Indeed, HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." We also disagree that HRSA must "choose a discount mechanism" when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Elizabeth Community Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. St. Elizabeth Community Hospital relies on the 340B program to ensure comprehensive service to its entire community. The program addresses the shortfall in medication funding from Medicare and Medi-Cal reimbursements, thereby enabling the hospital to reallocate these pharmaceutical savings into essential, non-reimbursed community health initiatives. These initiatives include Diabetes Education and Support Groups, provision of medications for indigent patients, community grants supporting local non-profits, a dedicated sports medicine program inclusive of student sports physicals, and crucial transportation services. By prioritizing Apr 20, 2026 St. Elizabeth Community Hospital HHS Docket No. HRSA-2026-03042 prevention and early intervention, these programs demonstrably reduce overall pharmaceutical dependence and healthcare expenditures for the community, mitigating the need for more costly, advanced medical interventions. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, / Rodger Page President Dignity Health- North State Market & Mercy Medical Center Mt. Shasta St. Elizabeth Community Hospital Apr 2O, 2026 St. Elizabeth Community Hospital HHS Docket No. HRSA-2O26-O3O42 Com TionSpint As one of the nation's largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2309Carle Health2026-04-20T04:00Z35,400 chars
See attached letter April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPA's Request for Information ("RFI") regarding a potential 340B rebate model. This letter, submitted respectfully by Carle Health The Carle Foundation Hospital, responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from The Carle Foundation Hospital and other Covered Entities. As a 340B-participating hospital, The Carle Foundation Hospital is a core component of the healthcare safety net in the Central Illinois communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. The Carle Foundation Hospital participates in the Hall Render Phannacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our country's safety net presented by a 340B rebate model. To that end. IN e offer our own context. comments and recomrnendations regarding the RFI. At a high level, The Carle Foundation Hospital's 340B Program participation enables us to commit an additional 10 million dollars per year to the Central Illinois community safety net population we serve. The Carle Foundation Hospital also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price ("MFP") duplication require a solution, The Carle Foundation April 20, 2026 Page 2 Hospital wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFI's invitation for stakeholders to submit "comments on all aspects of a rebate pilot program implementation under the 340B Program," and to help facilitate HRSA's goal of "consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,"1 The Carle Foundation Hospital submits the below questions for HRSA's consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate rnodel. 1. WHY DOES A MANUFACTURER'S INTEREST IN DEDUPLICATION OUTWEIGH THE CARLE FOUNDATION HOSPITAL'S INTEREST IN CARING FOR ITS PATIENTS? In the Agency's 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program ("MDPNP") dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities: manufacturers are subject to ci il monetary penalties (CMPs) ifthey fail to hono: the MFP price for an MFP-eligible drug,' and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate rnodel would shift this compliance burden and its associated costs from the manufacturer where Congress placed itto The Carle Foundation Hospital and other Covered Entities. I 91 Fed. Reg. 7287. 7289 (Feb. 17. 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). April 20, 2026 Page 3 Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSA's approval,5 HRSA's reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to The Carle Foundation Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR THE CARLE FOUNDATION HOSPITAL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES' REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected The Carle Foundation Hospital. For example, manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Specifically, our contract-pharmacy-related savings have decreased by over 80% in the past 6 years, directly limiting the extent to which we can support our community. Yet, somehow, this isn't enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have also demanded that we disclose patients' protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. Finally, a "float" often occurs at the dispensing pharrnacy level under the MDPNP where our pharmacy buys the manufacturer's drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expancl thc - float,- requiring it not just for Part D beneficiaries, but all of The Carle Foundation Hospital's purchases. HEIS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action 5 42 U.S.C. 256b(a)( I). The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 20215), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicabilitv Year 2027). - Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 (2001). April 20, 2026 Page 4 against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or The Carle Foundation Hospital trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO THE CARLE FOUNDATION HOSPITAL TO MONITOR MANUFACTURER COMPLIANCE? "Transparency" has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities' eligible patient determinations and Medicaid biiling practices. One of their first requests in good-faith inquiries is a copy of the Covered Entity's eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisions from Covered Entities to manufacturers. The Carle Foundation Hospital would be harmed if it did not have line-of-sight into manufacturers' rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers' compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSA's approval of a rebate model would rely on its authority to "provide[]"8 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shill toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entity's contract pharmacy locations. it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? The Carle Foundation Hospital has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers' compliance with a rebate model. 8 42 U.S.C. 256b(a)(1). April 20, 2026 Page 5 Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturer's Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entity's interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS THE CARLE F0UNDATION HOSPITAL TO DISCLOSE PATIENTS' PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of "HIPAA Covered Entity," but this activity may bring them under the definition of a "health plan" under HIPAA.9 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the "HIPAA Covered Entity" designation, we would also ask what law, policy, or other factors would justify moving patients' PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE THE CARLE FOUNDATION HOSPITAL'S DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF THE CARLE FOUNDATION HOSPITAL? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE THE CARLE FOUNDATION HOSPITAL FOR THE VALUE OF ITS DATA? One of The Carle Foundation Hospital's principal concerns with manufacturers' campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white 9 See 45 C.F.R. 160.103. April 20, 2026 Page 6 papers attacking the 340B Program.lc Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate The Carle Foundation Hospital for that value? Isn't this the exact harrn the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSA'S CHANGE IN POSITION? The Carle Foundation Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers' unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations. making the 2025 pilot legally insufficient. Any subsequent shift in HRSA's stance should bc grounded in substantial changes to law, policy, or public health priorities. The Carle Foundation Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, iuch a change risks undermining trust in HRSA's administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and dernonstrable need. rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. April 20, 2026 Page 7 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From The Carle Foundation Hospital's perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of The Carle Foundation Hospital's patient population, we serve many other patients, including patients with no coverage at all. Requiring The Carle Foundation Hospital to initially overpay for non- Medicare patients' drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10.WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSA's 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding prograrn alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11.WOULD DRUG MANUFACTURERS' REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO THE CARLE FOUNDATION HOSPITAL? IF NOT, WHY NOT? As noted above, The Carle Foundation Hospital firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Makine drug manufacturers' rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. lf these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers' proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve April 20, 2026 Page 8 patients and fulfill program obligations. The Carle Foundation Hospital urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12.IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON THE CARLE FOUNDATION HOSPITAL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions' Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding The Carle Foundation Hospitalto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacon's Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacon's terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platform's overreaching terms ofuse do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities' sensitive data, far beyond what HIPAA's "payment" exception contemplates." Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers' interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens. including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a rnodel similar to that used in 2025 would ernpower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairncs!,. If permitted without rnaterial protections, we ask that HRSA explain the policy behind and basis tbr any decision to further facilitate the improper monetization of our data and ceding our legal rights to a private, for- profit entity. 13.WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 6201) of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of " See 45 C.F.R. 164.501. April 20, 2026 Page 9 audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.12 With manufacturers' noncompliance rate so high, The Carle Foundation Hospital is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? The Carle Foundation Hospital hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assurne that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim details without shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 34013 and Medicare Part D inflation rebates,13 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. The Carle Foundation Hospital encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitirnate program goals. RESPONSES TO HRSA 's REQLEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 3408 Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. The Carle Foundation Hospital maintains auditable See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPA's website through the links on the following page: https: www.hrsa.gov opalprogram-integrity. 13 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 10 purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. The Carle Foundation Hospital estimates annual costs will minimally increase 3 million dollars. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate subrnissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require The Carle Foundation Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions. including claims-level tracking. rebate request submission. payment monitoring, reconciliation, and dispute resolution. The Carle Foundation Hospital estimates an annual increase in staffing costs of 150,000 thousand dollars. d. Systems and Infrastructure for Implementation of a Potential 34141 Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. April 20, 2026 Page 11 In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, The Carle Foundation Hospital purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. The Carle Foundation Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and deterrnining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, The Carle Foundation Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, The Carle Foundation Hospital would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, rnedical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in The Carle Foundation Hospital's operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities April 20, 2026 Page 12 could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on The Carle Foundation Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concems noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Linda Fred VP of Pharmacy Services Carle Health 4 ry 4 April 20, 2026 Page 13 APPENDIX: SUMMARY OF HRSA's AUDITS OF DRUG MANUFACTURERS HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 2018 2019 2020 2021 2022 2023 2024 2025 2026 4 4 Clean Audits 4 a Audits with Findings 1 FINDING: FAILED TO OFFER 340B PRICE 2018 2019 2020 2021 2022 2023 ' 2024 2025 Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 3408 Price 2026 INIMMOM .1 April 20, 2026 Page 14 FINDING: OVERCHARGED COVERED ENTITIES 2021 Manufacturer Did Not overcharge Covered Entities 2022 I Manufacturer Overcharged Covered 2023 1 4 Entities 2 FINDING: FAILED TO SUBIVIIT PRICING DATA 2 2021 5 Manufacturer Submitted Pricing Data 2022 e Manuafcturer Failed to Submit Pricing Data 1 2018 2019 2020 2024 2025 2026 2018 2019 2020 2023 2024 2025 2026 April 20, 2026 Page 15 FINDING: FAILED TO CALCULATE CEILING PRICE 2018 2019 2020 2021 2022 2023 2024 2025 2026 im Manufacturer Deterrnined Ceiling Prrce for New Drugs II Manufacturer Failed to Determine 340B Ceiling Price for New Drugs 17. 1 3 4 1 2
HRSA-2026-0001-2310Adventist Health Columbia Gorge2026-04-20T04:00Z12,822 chars
See attached file(s) [ADVENTISTHEALTH:INTERNAL] Adventist Health Columbia Gorge 1700 E 19th St The Dalles, OR 97058 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Columbia Gorge, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Columbia Gorge has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program [ADVENTISTHEALTH:INTERNAL] would include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Columbia Gorge is a 49-bed rural hospital serving a multi-county area in the Columbia River Gorge. As the sole full-service hospital for The Dalles and surrounding rural communities situated along a geographically constrained river-and-mountain corridor, Adventist Health Columbia Gorge is the primary access point for emergency and specialty care. Alternative hospital options are extremely limited: the nearest hospital is 20 miles away but offers only basic services, while the closest facility with full-service capabilities is located 90 miles away. The regions challenging terrain, frequent winter weather, and restricted highway access through the Gorge significantly impact travel and complicate timely healthcare access for local residents. Despite these challenges, Adventist Health Columbia Gorge provides a comprehensive range of servicesincluding maternity care, stroke care, advanced cardiac and cancer treatment, and robust financial assistance programsto ensure access to essential prescriptions and treatments for patients facing economic hardship. The hospital plays an essential role during natural disasters and disruptions, supporting the health and well-being of its diverse community, especially those who might otherwise face barriers to high-quality medical services due to geographic and socioeconomic constraints. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Columbia Gorge would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Specifically, the 340B program benefits have enabled Adventist Health Columbia Gorge to expand and strengthen its oncology department. With the support of 340B savings, the hospital has invested in advanced oncology services, allowing patients to access critical cancer treatments and medications at free or reduced cost. These benefits have also allowed the hospital to offer specialized care and support programs for uninsured and underinsured individuals facing cancer diagnoses. Because of 340B, the hospital has been able to recruit experienced oncology staff, provide comprehensive patient education, and ensure seamless access to necessary therapies, resulting in improved outcomes and a higher quality of care for cancer patients in our community. Specifically, the 340B program benefits have enabled Adventist Health Columbia Gorge to expand and strengthen its outreach outside of the hospital walls. The hospital offers 17 free mini clinics specifically dedicated to uninsured and underinsured residents, delivering essential healthcare services to those who may otherwise lack access. Furthermore, Adventist [ADVENTISTHEALTH:INTERNAL] Health Columbia Gorge provides free vaccinations at these clinics to help protect community members from preventable diseases, prioritizing the health and well-being of individuals who are most at risk. Specifically, the 340B program benefits have enabled Adventist Health Columbia Gorge to expand and strengthen its outreach outside of the hospital walls. Adventist Health Columbia Gorge has Two Community Health Workers (CHWs) to further support patients by connecting them with vital community resources tailored to their identified health-related social needs (HRSNs). These CHWs focus on addressing challenges such as housing instability, food insecurity, transportation barriers, and facilitating connections with other local agencies. By actively linking patients to services and resources that address their unique circumstances, the hospital aims to promote improved health outcomes and enhance overall access to care for vulnerable populations. The integration of CHWs into our outreach initiatives will reinforce our commitment to comprehensive patient support and community well-being. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Columbia Gorge to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Columbia Gorge has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. [ADVENTISTHEALTH:INTERNAL] Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Columbia Gorge would be $7,901.54 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Columbia Gorge does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Columbia Gorge is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts The proposed rebate mechanism would require Adventist Health Columbia Gorge to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $1,570,382.27 based on our annual volume for the assumed [ADVENTISTHEALTH:INTERNAL] drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. Due to the rebate model, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $157,038.23 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Columbia Gorge, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third- party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Columbia Gorge respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive, Drefkej@ah.org if you have any questions or would like additional information. Sincerely, [ADVENTISTHEALTH:INTERNAL] Julia Drefke, MPA Public Affairs Executive
HRSA-2026-0001-2311Adventist Health Tillamook2026-04-20T04:00Z10,257 chars
See attached file(s) Adventist Health Tillamook [ADVENTISTHEALTH:INTERNAL] Adventist Health Tillamook 1000 3rd St Tillamook, OR 97141 AdventistHealth.org April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026- 03042) Dear Administrator Engels, Adventist Health Tillamook, a 340B covered entity, respectfully submits these comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) regarding the 340B Rebate Model Pilot Program (HHS Docket No. HRSA- 2026-03042). Our hospital strongly opposes shifting the 340B program from the longstanding upfront discount model to a rebate-based mechanism, including the rebate model currently being considered for up to 25 drugs (10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027). The upfront discount structure has worked effectively for participating covered entities. Moving to a rebate model would disrupt established workflows, increase costs and administrative burden, and could adversely affect our ability to serve patients and communities. HRSAs interest in testing a rebate model appears to reflect a desire to balance the interests of covered entities and manufacturers when selecting a discount mechanism. However, Congress created the 340B program to help safety-net providers purchase outpatient drugs at reduced prices so they can better serve low-income and vulnerable populations. Covered entities rely on 340B savings to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Adventist Health Tillamook has strived to provide HRSA with detailed responses to the RFIs 30 questions. For cost-estimating purposes, we assume any future rebate program would [ADVENTISTHEALTH:INTERNAL] include (1) the 10 drugs HRSA previously approved for its original program and (2) the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSAs February 25, 2026 Information Collection Request. Adverse Impacts on Patient Care and Community Services Adventist Health Tillamook is a 25-bed Critical Access Hospital (CAH) serving a geographically isolated population as the only hospital in Tillamook County. The hospital is the single point of access for emergency and specialty care for residents throughout the county, with no other inpatient facility available locally. Frequent winter weather, flooding, and landslides regularly restrict travel to inland facilities, making it challenging for patients to reach alternative care sites. The closest hospital offering more comprehensive services is located 60 miles away, underscoring the vital role Adventist Health Tillamook plays in ensuring timely healthcare access for its community. Despite these challenges, Adventist Health Tillamook provides a comprehensive range of servicesincluding maternity care and cancer treatments. The hospital plays an essential role during natural disasters and disruptions, supporting the health and well-being of its diverse community, especially those who might otherwise face barriers to high-quality medical services due to geographic and socioeconomic constraints. Due to our high percentage of government payers (Medicare/Medicaid), Adventist Health Tillamook would not be able to provide quality care, safety and consistency for our community members without supplemental programs like 340B. Administrative Costs Under a Potential 340B Rebate Program A rebate-based model would require Adventist Health Tillamook to incur significant new administrative costs. Our current 340B program staffing, operations, and internal controls are built around an upfront discount model and are designed to be efficient and cost-conscious. As a safety-net provider, we do not have excess cash reserves to absorb additional overhead. A shift to a rebate mechanism would require material changes to our workflows and systems and would create ongoing, incremental costs. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model will require us to hire additional full-time employees (FTE). Based on our analysis, an additional 1 to 2 employees would be needed to perform audits on the submitted claims to ensure accuracy of the submission data, respond to potential manufacturer claim denials, and perform monthly reconciliation or rebate payments. Each additional FTE would have a cost of $100,000 to $200,000 per year. [ADVENTISTHEALTH:INTERNAL] Systems and Infrastructure Needed to Implement a Potential 340B Rebate Program Adventist Health Tillamook has designed its technology systems and operational infrastructure around an upfront discount model. Any shift to a rebate mechanism would require significant changes to those systems and processes and would impose substantial implementation and maintenance costs. Currently, we are exploring the possibility of implementing Plenful, a tool that will assist with 340B audit and optimizations, automate maximum fair price (MFP) reconciliation, and automate rebate reporting submissions and monitor reconciliation via centralized dashboards. The cost of the Plenful program for Adventist Health Tillamook would be $5,180.97 per year. Data Collection by Covered Entities Some stakeholders have suggested that covered entities already provide the information that would be required under a rebate model through the 340B ESP. That characterization is inaccurate. A rebate model would impose new (and potentially duplicative) data-collection, validation, and submission requirements on covered entities. Adventist Health Tillamook does not currently submit data to 340B ESP. We are currently partnering with RxStrategies. Together, we have augmented our charge file to support additional data fields that are required. RxStrategies currently provides this to our hospital at no additional cost, however, this is not to say they will not charge for these services in the future. While we use RxStrategies to provide data, Adventist Health Tillamook is responsible for any manual work that would be associated with claims validation and payment reconciliation as described in the staffing impact section above. In addition, manufacturers have indicated interest in using covered entity claims data to address their commercial rebate exposure (e.g., rebates paid to pharmacy benefit managers (PBMs) under voluntary, formulary-related agreements). That objective is unrelated to 340B program integrity, and covered entities should not be required to fund it. We urge HRSA not to authorize a rebate model that forces safety-net providers to bear the cost of expanded data sharing and to purchase drugs at non-340B prices while awaiting rebates. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for commercial purposes unrelated to 340B. Payment Timing and Potential Cash-Flow Impacts [ADVENTISTHEALTH:INTERNAL] The proposed rebate mechanism would require Adventist Health Tillamook to purchase drugs at or near full price and then wait for manufacturers to remit the 340B savings functionally shifting working-capital costs to safety-net providers. Even if rebates were paid within 10 days, the model would still create cash-flow strain for providers with limited cash on hand and could delay reinvestment of 340B savings into patient services. Over the course of one year, we have estimated our hospital would be required to front drug manufacturers approximately $3,963.71 based on our annual volume for the assumed drugs. This impact would disrupt decades of business practices built around 340B upfront discounts. Due to the rebate model, and the possibility of claims denials and processing, reimbursement that is owed to our hospital may not be available for months. Estimating the possibility of a 10% claims denial, $396.37 would be held instead of going to critical patient care and health programming. Neutral, Third-Party Clearinghouse is Needed HRSA has indicated that manufacturers have alternative options to address potential duplicate discounts between 340B and the Medicare Drug Price Negotiation Program (MDPNP). Given the substantial costs and operational disruption a rebate mechanism would impose on Adventist Health Tillamook, HRSA should rely on those less burdensome options. Any other decision would place manufacturer interests over those of covered entities, their patients, and the communities they serve. We urge HRSA to consider a neutral third-party clearinghouse, rather than a rebate mechanism, to support 340B/MDPNP duplicate-discount prevention, program integrity, and any other legitimate program objectives. At a minimum, HRSA should provide a reasonable explanation for why a third-party clearinghouse is not viable or would be more costly than a rebate mechanism. Conclusion For these reasons, Adventist Health Tillamook respectfully submits that the costs of any rebate model are likely to outweigh any anticipated benefits. HRSA should instead pursue a neutral, third-party clearinghouse approach. If HRSA proceeds with a rebate model, it should provide covered entities with a meaningful opportunity to comment on specific program design details. While we have provided the most detailed information possible, we do so without knowing which drugs would be included and without clarity on key operational elements, including required data fields, grounds for rebate denial, dispute resolution processes, timelines, and other safeguards. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has [ADVENTISTHEALTH:INTERNAL] profound implications for the millions of patients who rely on the 340B program. Please contact Julia Drefke, Public Affairs Executive, drefkej@ah.org if you have any questions or would like additional information. Sincerely, Julia Drefke, MPA Public Affairs Executive
HRSA-2026-0001-2312Union Community Health Center2026-04-20T04:00Z21,063 chars
See attached file(s) Responsible Party Status FQHC THE PREFERRED RESOURCE FOR COMMUNITY HEALTH CENTERS 340B Compliance Data Source 2025 filed UDS report HR Records - # of FTEs and associated wages TPA Reports - 2025 financial report and manufacturer impa Entity-Owned Pharmacy Software - 2025 financial report EHR Module or Clinic Administered Drug tracking software Estimates from vendor partners of estimated cost increase act report contracts/invoices - fee s es Health Center Snapshot Patients Served % of Patients Uninsured % of Patients with Medicaid % of Patients with Medicare % of Patients with Commercial Insurance 2025 Sliding Fee Discounts Provided 2025 Annual 340B Program Overview Number of 2025 340B-Qualified Prescriptions & Administrations 2025 Cost of All Drugs (All universes, not exclusively 340B) 2025 Pharmacy Administrative Costs (Clinic Administration, Entity Owned Pharmacies, & Contract Pharmacies, Including TPA Fees) 2025 340B Management & Oversight Costs 2025 Net 340B Program Savings (From Calculator) Impact Experienced From Manufacturer Rest # of Prescriptions Excluded from 340B Program in 2025 340B Savings Opportunity Lost in 2025 Additional Administrative Costs to Manage Submissions and Oversight 340B Program Administative Burden Element Number of FTEs Dedicated to Program Cost of FTEs Dedicated to Program External Vendor Costs Clinic Administered Drug Tracking trictions ts 33882 21% 46% 11% 20% $ 1,611,445.00 6043.00 $ 1,444,918.00 $ 31,520.00 $ 399,664.00 $ (1,395,417.36) 432 $ 152,898.84 $ 91,260.00 Current State Estimated Additions to Accommodate a Rebate Model 2.25 3.00 $ 270,400.00 $ 365,040.00 $ 129,264.00 $ - $ - $ - Data Element Description Uninsured Patients (0-17 years old) Uninsured Patients (18 & older) Medicaid Patients (0-17 years old) Medicaid Patients (18 & older) Medicare Patients (0-17 years old) Medicare Patients (18 & older) Commercially Insured Patients (0-17 years old) Commercially Insured Patients (18 & older) Patients Served (0-17 years old) Patients Served (18 & older) Pharmacy Direct Costs (Not Pharmaceuticals) Entity-Owned Pharmacy: Salaries, benefits, computers, supplies, etc. Contract Pharmacy: Dispensing Fees, TPA Fees, etc. Pharmaceutical Direct Costs Amount paid for pharmaceuticals Sliding fee discount (retail charge - amount collected - amount owed by pts) Table Line Column 4 7 a 4 7 b 4 8 a 4 8 b 4 9 a 4 9 b 4 11 a 4 11 b 4 12 a 4 12 b 8A 8a a 8A 8b a 9D 13 e Entity Value from 2025 UDS Report 2,206 4,871 6,072 9,539 26 3,681 567 6,143 9,559 24,323 31,520 1,444,918 1,611,445 Employee FTE Dedicated to 340B Program Oversight Hourly Pay Rate Example: 340B Compliance Staff 1.00 $ 35.00 Example: Finance Staff 0.25 $ 50.00 Example: Additional Pharmacy Staff Employee 1 1.00 $ 35.00 Employee 2 1.00 $ 50.00 Employee 3 0.25 $ 60.00 Employee 4 Employee 5 Employee 6 Employee 7 Employee 8 Employee 9 Employee 10 Additional Pharmacy Staff Annual Employee Cost (incl. Benefits/Fringe) FTE Added as a Result of MFR Restrictions Hourly Pay Rate2 $ 94,640.00 0.25 $ 35.00 $ 33,800.00 $ - $ 94,640.00 0.25 $ 35.00 $ 135,200.00 0.50 $ 50.00 $ 40,560.00 $ - $ - $ - $ - $ - $ - $ - Annual Employee Cost (incl. Benefits/Fringe)3 Anticipated Additional FTE as a Result of Rebate Model Hourly Pay Rate4 $ 23,660.00 1.00 $ 20.00 $ - 0.75 $ 50.00 $ - 0.50 $ 60.00 $ 23,660.00 1.50 $ 40.00 $ 67,600.00 1.50 $ 50.00 $ - $ - $ - $ - $ - $ - $ - $ - Annual Employee Cost (incl. Benefits/Fringe)5 $ 54,080.00 $ 101,400.00 $ 81,120.00 $ 162,240.00 $ 202,800.00 $ - $ - $ - $ - $ - $ - $ - $ - $ - Consultant Current Annual Cost Annual 340B Audit Legal Counsel $ 50,000.00 340B Consultant/Program Management $ 79,264.00 Referral Capture Vendor(s) Medicaid Billing Vendor(s) Increased TPA Fees Other Increased Cost Related to Manufacturer Restrictions Anticipated Additional Costs Related to Rebate Model 340B Universe 2025 Captured Script or Administered Drug Count TPA 1 6043 TPA 2 TPA 3 TPA 4 TPA 5 TPA 6 Contract Pharmacies Without TPA Entity-Owned Pharmacies Clinic Administered Drugs 2025 Gross Revenue 480684.64 2025 Manufacturer Impact Lost Opportunity: Script Count (CRx Only) 432 2025 Manufacturer Impact Lost Opportunity: Lost 340B Savings (CRx Only) 152898.84 Current CAD Tracking Model Current Annual Fees Paper Logs Excel Spreadsheet EHR Module $ - Separate Vendor $ - Implementation Fee for Change Anticipated Annual Fee for Change $ - $ - $ - $ - $ - $ - $ - $ - 1 April 20th, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Union Community Health Center (UNION) and the 34,000 patients we serve annually, thank you for the opportunity to comment on HRSAs Request for Information on a potential 340B rebate pilot. The 340B program is foundational to our ability to serve the most vulnerable members of our community. Union Community Health Center, operating continuously as a health care provider in the Bronx since 1909, is today one of the largest Federally Qualified Health Centers (FQHC) in NYS. UNIONs mission is to provide comprehensive, primary and preventive health care services to improve the health status and decrease health disparities of the medically underserved populations in the Bronx. UNION continues to impact more Bronx residents each year with five clinic locations and two Mobile Units (medical and dental). UNION serves nearly 34,000 underserved residents of the Bronx providing over 200,000 patient care visits annually. UNION utilizes an impressive model of a holistic and integrated approach to patient care that unifies primary care, behavioral health, and dental care providers creating one team, designing and delivering care for each patient. Additionally, UNION provides specialty services, needed and otherwise difficult for Medicaid patients to access, including physical and occupational therapy, speech therapy, audiology, cardiology, behavioral health and psychiatric services among many others. The proposed shift of responsibility from manufacturers to safety-net providers, such as federally qualified health centers (FQHCs), also known as community health centers (CHCs), via a rebate model would pose significant operational and financial challenges. We anticipate a loss of $1.3 million dollars from entity- owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Summary of Recommendations: In short, Union Community Health Center strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities. 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms detailed below. 2 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that [...] govern the approval of manufacturers' rebate plans must include safeguards to reduce the negative financial impacts on CHCs and their patients. A. 340B savings allow our CHC to provide a wide range of services that our low-income patients rely on, including access to affordable medications. A 340B Rebate Model Pilot Program would be a departure from the original purpose of the 340B Drug Pricing Program. For over 30 years, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling us to expand services and provide affordable medications to low-income and uninsured patients. The program was created to help safety net providers stretch scarce Federal resources as far as possible. A rebate model would be inconsistent with Congressional intent and place a significant financial burden on CHCs. By requiring CHCs to purchase medications at full Wholesale Acquisition Cost (WAC) price and wait for rebates, a rebate model would create significant financial strain and directly affect our ability to serve our patients, who come to us for high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals, regardless of their ability to pay. Without the upfront 340B discount, CHCs would be required to front the full cost of medications and wait for reimbursement, creating significant financial risk and uncertainty. For Union Community Health Center, a 340B Rebate Model Pilot Program will impact: 6,043 340B-Qualified prescriptions & administrations Impacting 21% of Unions uninsured patients Our ability to provide services for Medicare, uninsured, private and Medicaid patients that help navigate, educate and advocate for referral to community-based organizations (CBOs) that address social determinants of health such as housing, food insecurity, legal aid, and chronic care management i.e. Asthma management through CBOs such as AIR NYC. Additionally, UNION will have scale down Medicare run chronic care management programs that provide chronic condition management for diabetes, hypertension, asthma, mental health, obesity, and cardiovascular diseases. We also have significant concerns about the impact a 340B Rebate Model Pilot Program will have on our patients access to medications. A rebate model could render critical medications financially out of reach, forcing patients to make difficult decisions about their treatment. By requiring upfront payment at full cost and delayed reimbursement, the rebate model creates financial barriers that could limit our ability to consistently provide these medications to patients, which could disrupt access to medications that 3 patients rely on to manage chronic conditions such as diabetes, heart disease, and behavioral health conditions that are prevalent among our patients. CHCs serve a patient population with a higher burden of chronic conditions including diabetes, hypertension, and obesity compared to private practices.1 This patient population relies on affordable medications to manage these long-term conditions. We are particularly concerned for our patients with Type 2 Diabetes, chronic kidney disease, heart failure, deep vein thrombosis, pulmonary embolism, atrial fibrillation, and those needing atypical antipsychotics, whose medications would be impacted by the rebate model. B. A 340B Rebate Model Pilot Program will create cash flow challenges, impose significant administrative burden, and generate additional costs that imperil our financial stability. Upfront Costs and Cash Flow Issues: In late 2025, CHCs nationwide estimated that upfront costs to purchase the ten 2026 rebate pilot drugs at WAC would have been 50-500 times higher than current acquisition costs for those drugs. The 10-day manufacturer rebate turnaround time does not protect us from cash flow strain. Additionally, delays in receiving rebates, including those due to manufacturer denials, will create financial strain. The change to a rebate would force us to make difficult decisions about how to allocate our limited financial resources including cutting essential services, adjusting our sliding fee discounts, or reducing operating hours. Administrative Burden: A rebate model will require us to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. The lack of standardization and anticipated varying requirements across manufacturers will likely force us to use multiple internal systems to manage and report the same data. We strongly urge HRSA to require uniformity among eligible manufacturers to mitigate administrative burdens associated with receiving timely and appropriate 340B rebates. Workforce Impacts: To meet a rebate models complicated requirements, we anticipate needing to hire 3.0 FTE. We estimate the cost to hire additional staff to be $365,040. In addition, we expect that our staff will be significantly burdened by a rebate pilot model due to additional time required for claims reporting, reconciliation, and managing denials and disputes. External Vendors and IT Infrastructure Costs: Navigating a rebate pilot requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $143,264 will be required to meet compliance requirements before a single rebate is ever 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 4 received. We also anticipate an increase in costs for external support vendors, including 340B consultants, legal counsel, program coordination, TPAs, electronic medical records, pharmacy software, and reconciliation services. Loss of Existing Discounts and Increased Financing Costs: A rebate pilot will increase our overall drug costs by eliminating discounts that currently reduce our total spending, including sub-ceiling discounts, prompt pay discounts, volume discounts, and cost of goods sold discounts from wholesalers and distributors. By requiring upfront payment at full WAC, CHCs will need to borrow to cover these costs while waiting for reimbursement. CHCs face significant challenges accessing credit, and any available financing often comes with higher interest rates and additional financial risk. This creates an unsustainable financial burden and further limits our ability to maintain services and access to medications for our patients. C. The costs from a 340B Rebate Model will force our CHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Union Community Health Center helps patients afford medications through programs such as sliding fee scale discounts, reduced-cost medications, and other financial assistance. 340B savings support both affordable medications and broader patient services, including sliding fee discounts. To cover the upfront costs of purchasing drugs and operationalizing the rebate, we anticipate needing to reduce: Essential clinical services: Health centers reinvest 340B savings into services that expand access to care. If these 340B savings are reduced, UNION would be forced to scale back essential services such as care coordination; behavioral health services; dental Community Health Worker services; mobile health programs, and enabling services like transportation, Community Health Workers in the pediatric and family practice departments and referral management for food assistance, housing, legal aid and other Community Based Organization. Additionally, UNION would need to scale back on the Chronic Care Management and Remote Patient Monitoring program and that address and cares for patients with chronic conditions such as diabetes, hypertension, and asthma. Operating hours: The additional costs of a rebate model may require us to reduce our clinic hours which could limit access to care for patients. The dispensing of rebate drugs: An increase in costs due to a 340B Rebate Model will have a significant impact on our ability to maintain an adequate supply of the drugs included in the pilot. We may need to limit or stop purchasing certain drugs under 340B due to financial risk and uncertainty around receiving rebates. Additionally, many contract pharmacies, including Walgreens and Walmart, have indicated they may exclude these drugs from 340B, which could further limit where patients can access medications, particularly in areas with limited pharmacy options. 5 Patient financial assistance: Our ability to provide affordable medications to our patients may be compromised. If we do continue to purchase medications under a 340B rebate, we expect to be forced to offer smaller discounts to our patients, meaning our patients may face higher out-of- pocket costs. Higher patient costs may lead to delays in our patients starting treatment and increased non-adherence, leading to avoidable complications and increased hospitalizations. D. CHCs must be exempted from any rebate model due to our heightened vulnerability and the pressures a rebate model would create. The concerns described above apply to all 340B covered entities, and therefore, we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted due to the disproportionately negative impact it will have on us, threatening our financial viability. Nationwide, in 2024, health centers experienced negative 2%+ operating margins. Moreover, our patients are incredibly vulnerable. In New York, 89% live below 200% of the federal poverty level. Overall, CHCs like ours lack the margins and borrowing capacity needed to manage the cash flow demands and increased costs created by a rebate model, and our patients cannot afford to lose access to the care we are able to provide thanks to 340B. E. If HRSA insists on forcing CHCs into a 340B rebate model, manufacturers must be required to incorporate the following CHC protections into their plans. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA should require manufacturers to incorporate the following protections into their plans: A requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense for each rebate drug. A requirement that manufacturers reimburse CHCs for the full cost of eligible drugs purchased at WAC under the rebate model, regardless of dispensing timing, to prevent uncompensated financial risk. A requirement to reimburse CHCs for all costs incurred due to the rebate pilot fully, promptly, and transparently. A requirement to provide 340B rebates on a reasonable number of undispensed units. A requirement to provide rebates at the unit level. A prohibition on requiring BINs or PCNs on rebate claims. A requirement to adhere to standardized administrative rules. 6 F. A replacement to the 340B Rebate Model Pilot Program could be a Neutral Claims Clearinghouse, which would produce accurate deduplication at a fraction of the cost and administrative burden of a rebate model. HRSAs goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for covered entities. Substantially reduce administrative burden on covered entities. By reducing costs on covered entities, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy And preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion Union Community Health Center strongly urges HRSA not to implement a 340B rebate model. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs. The sustainability of New Yorks primary care safety net and the ability of our low-income and uninsured patients to access affordable primary care, behavioral health care, and dental care depend on HRSAs decisions to pursue a 340B rebate model. A rebate model would create significant cash flow challenges, forcing us to make difficult decisions about staffing, services, and the range of drugs we can afford to stock. We would need to make significant investments in IT infrastructure and staff to comply with the requirements of a rebate model, and we are deeply worried about our patients who depend on the upfront 340B discount. Thank you for your consideration and for your continued commitment to the nations safety net. If you have any questions, please contact: John Decarvalho, Jdecarvalho@uchcbronx.org. Sincerely, John Decarvalho Vice President for Government and External Affairs Union Community Health Center
HRSA-2026-0001-2313Connecticut Institute For Communities, Inc.2026-04-20T04:00Z5,258 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Connecticut Institute for Communities, Inc. (d/b/a CIFC Health), thank you for extending the comment deadline to April 20, 2026. This extension allowed us to assess the substantial operational, financial, and patient-care risks the proposed 340B Rebate Model Pilot would pose to Community Health Centers (CHCs). CIFC Health is a Federally Qualified Health Center serving underserved communities across Western Connecticut. We provide comprehensive primary care, behavioral health, dental, OB/GYN, substance use, pediatric, and school-based services, supported in part through our 340B contract pharmacy network. The 340B program is essential to our ability to stretch scarce resources and provide affordable medications and services to uninsured and underinsured patients. Exempt CHCs from the 340B Rebate Model Pilot We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. Requiring CHCs to purchase drugs at full Wholesale Acquisition Cost (WAC) and wait for manufacturer rebates represents a fundamental departure from the intent of the 340B statute and shifts financial risk from manufacturers to safety-net providers like CIFC Health. CIFC-Specific Financial Impact Estimates Based on CIFC Healths internal modeling using 2025 purchasing data and national 340B rebate impact tools, the proposed rebate model would result in the following CIFC-specific impacts: Increased upfront annual drug spend for selected MFP drugs of approximately $488,896.92 in 2026, $796,123.85 in 2027, and $964,028.73 in 2028 as a result of purchasing at WAC rather than 340B ceiling prices. Estimated annual rebate-related financial losses of approximately $74,504.10 in 2026, $124,253.55 in 2027, and $152,729.24 in 2028, reflecting anticipated rebate denials and the loss of purchase-related savings such as sub-ceiling and prompt-pay discounts. 2 An estimated increase in average upfront monthly drug spend of approximately $40,741.41 in 2026, $66,343.65 in 2027, and $80,335.73 in 2028. Additional working-capital tied up pending rebate payment ranging from approximately $40,070 at 30 days in 2026 to as much as $235,348 at 90 days in 2028, placing significant strain on liquidity for an organization with approximately 41.7 days cash on hand, the latter of which varies to longer or shorter depending on circumstances. Anticipated material reallocation of existing staff timeoften 20 or more hours per week across pharmacy oversight, compliance, finance, billing, and quality functionsto manage data validation, reporting, reconciliation, and denied rebates, with the potential need for additional staffing and external vendor support. In 2025, CIFC Health provided $1,802,655 in sliding-fee discounts, many of which are supported by 340B savings; erosion of these savings would directly reduce our ability to sustain discounted medications and services for uninsured and underinsured patients. Threat to Patient Access and Clinical Outcomes A rebate model threatens patient access to essential medications. CIFC Health serves a population with a disproportionately high burden of chronic disease, and many of the drugs included in the proposed modelsuch as direct oral anticoagulants, SGLT2 inhibitors, insulin, and behavioral health medicationsare not optional therapies. Delays, denials, or unaffordable point-of-sale pricing will lead to treatment interruptions, forced therapeutic substitutions, medication nonadherence, and preventable hospitalizations. Administrative and Operational Burden CHCs already face significant administrative strain due to manufacturer restrictions. The proposed rebate pilot would require new systems for data submission, claims validation, dispute resolution, and cash-flow management, often with inconsistent manufacturer requirements. For CIFC Health, these changes would result in immediate and recurring costs for third-party administrators, pharmacy software modifications, reconciliation services, and compliance supportfurther eroding 340B savings before any rebates are received. Conclusion CIFC Health respectfully urges HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. The CIFC-specific cost estimates outlined above demonstrate that a rebate model would undermine our financial stability, weaken our ability to offer sliding-fee and discounted medications, and directly harm patient access to care. Preserving the upfront 340B discount is essential to maintaining a stable and effective safety net. CIFC Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this important 3 issue. If you have any questions, please contact Vinicius Barreto, 340B Manager, BarretoV@cifc.org. Sincerely, Katherine M. Curran President & CEO Connecticut Institute For Communities, Inc. (CIFC) d/b/a CIFC Health
HRSA-2026-0001-2314AIDS Healthcare Foundation2026-04-20T04:00Z8,670 chars
HHS Docket No. HRSA-2026-03042 6255 W. Sunset Blvd. 21st Floor Los Angeles, CA 90028 Tel (323) 860-5200 / Fax (323) 467-8450 www.aidshealth.org April 20, 2026 Tom Myers General Counsel 323-860-5200 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: AIDS Healthcare Foundation (AHF) submits the following response regarding HRSAs Request for Information (RFI) regarding a 340B Rebate Model Pilot Program. As a recipient of multiple Ryan White grants, AHF is a longtime covered entity, providing HIV/AIDS care in 16 States, Puerto Rico and the District of Columbia. AHF is opposed to use of a rebate model, which at base is simply another effort by drug companies to shirk their responsibilities under the 340B program, and further attack and reduce the program, solely for their profit. The proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize pharmacy operations nationwide. Like the unlawful imposition of contract pharmacy restrictions, pharma rebate models are yet another effort to place administrative and financial burdens on covered entities, discouraging and limiting their ability to access 340B discounts to provide more and more comprehensive services to their clients. This effort to undermine the 340B program is obvious and clear already, large contract pharmacies have announced they will reduce their participation in the 340B program due to rebate concerns, making it harder for patients to fill 340B prescriptions, and reducing the number of prescriptions filled at 340B prices. Further, pharmas intent could not be made more clear by its bad faith attempts to game this very RFI process, flooding HRSA with thousands of identical, supposedly grass roots comments supporting rebate model, the source of which is a pharma- backed and funded third party. More importantly, as this RFI recognizes, changing from the current up-front discount model to a back-end rebate model will impose significant costs upon safety net covered entities. The amount of money covered entities will realize from the 340B program from increased costs of implementing the program, to decreased number of 340B prescriptions that are filled will go down significantly. Page 2 | 4 There is no getting around this basic fact fewer 340B dollars means fewer covered entity services and fewer clients served. This is especially true in the case of grantee covered entities like AHF the Ryan White grants it receives do not and are not intended to cover the full costs of care, and 340B monies cover a significant portion of these costs. With less money, covered entities will have to reduce services. With less money, covered entities will have to serve fewer clients. Given that the entire purpose of the 340B program is to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services, and that a rebate model does just the opposite fewer service for fewer clients the rebate model itself is antithetical to the purpose and intent of the 340B statute, and should be rejected altogether. Negative Impact Of The Model On The HIV/AIDS Epidemic> In reviewing and analyzing the specific yearly (not including one-time start-up costs) costs and burdens the RFI asks covered entities to address: Administrative Costs Staffing Impacts System and Infrastructure Costs Payment timing and Negative Cash Flow Impacts Costs and Fees Associated With Rebate Denials AHF estimates that, if a rebate model were implemented, it would have to reduce the number of clients it serves by 1.3%. Other Ryan White clinics, which operate outpatient medical clinics on similar models would have significantly different cost burdens or structures, would experience similar costs and reduction in services. Given that Ryan White grantees provide healthcare services to approximately 392,148 Americans,1 a 1.3% across the board reduction in services translates to 5,096 people living with HIV/AIDS having their care disrupted. It is unclear where they would receive services, as Ryan White is a payer of last resort. This would mean 5,096 people out of care, or 5,096 sicker, no longer virally suppressed people who are less able to work and care for their families. Because HIV/AIDS is an infectious disease, and people with HIV/AIDS who are not in care and not virally suppressed can transmit the virus, this would result in approximately 459 additional HIV infections annually,2 placing further burdens and strains on this nations health. The human harm that rebater models will impose is simply too high a price to pay 1 HRSA. Ryan White HIV/AIDS Program Annual Data Report. Ryan White HIV/AIDS Program Services Report, 2024. https://ryanwhite.hrsa.gov/sites/default/files/ryanwhite/data/2024-ryan-white-annual-data- report.pdf 2 Approximately 31,800 people in the U.S. become infected with HIV/AIDS every year. The source of these infections are people living with HIV/AIDS who are not virally suppressed, Page 3 | 4 All of the above assumes a frictionless and mistake-free operation of the rebate model, and for only a select number of drugs. Given the many, many mistakes already being made by Beacon, and the costs already involved in fixing those errors, and the potential legal and other costs of challenging incorrect rebate denials, and the currently unquantified but likely effect of contract pharmacies exiting the 30B space due to the rebate model, these costs likely will be much higher (and will increase if more drugs are put into a rebate system), and even more detrimental to the public health. Current 340B Integrity Measures Are Sufficient. The Rebate Model Will Not Meaingfully Increase Program Integrity, And Any Gains Are Far Outweighed By The Costs And Harms Of The Model. AHF does not believe that a rebate model will meaningfully alter or improve program integrity i.e., identifying diversion or duplicate discounts. It is AHFs experience that existing protocols and guardrails for ensuring program integrity are more than adequate. AHF has been audited by HRSA 3 times in the past two years, and each time no instance of either diversion or duplicate discounts was found. It is unclear how a rebate model will improve upon that, and it certainly will not be more effective given the costs of implementing. The existing audit and oversight system works, A rebate model will not meaningfully improve program integrity, and the cost simply is not justified. Alternate Methods Exist To Achieve HRSAs Aim Regrading The Medicare Drug price Negotiation Program. It appears HRSAs primary interest in a rebate model is to implement the Medicare Drug Price Negotiation program. If that is indeed the case, it is needlessly overbroad and inefficient, as it will apply to each 340B purchase of those drugs, regardless of whether the purchase and dispensing is for a Medicare recipient. Most likely, the vast number of 340B purchases for these drugs will be for filling and reimbursement for a program other the Medicare, making this a highly inefficient, intrusive, and expensive for covered entities as a method of implementing the Drug Price Negotiation program. AHF does recognize that a rebate model may help resolve unintended consequences in the Medicare Drug Price Negotiation program, namely 340B discount and Maximum Fair Price duplication, although other methods exist as well, such as the use of a neutral clearinghouse. These methods would be far more targeted and efficient, and certainly less costly to covered entities and the clients they serve, than a rebate model. Conclusion. which is estimated to be about 353,000 people. An increase of 5,096 additional non-suppressed people translates into approximately 459 additional infections. CDC. AtlasPlus Data. https://gis.cdc.gov/grasp/nchhstpatlas/tables.htm Page 4 | 4 Recent court deiciosn have made clear that only HRSA, not pharma, has the authority to impose a rebate model on the 340B program. Because such models will cause very real harms to the health of thousands of people, HRSA should refrain from doing so. Sincerely, Tom Myers General Counsel AIDS Healthcare Foundation
HRSA-2026-0001-2315AdventHealth2026-04-20T04:00Z13,410 chars
Please see the attached comments from AdventHealth. Submitted electronically to: http://www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels, On behalf of AdventHealth, we appreciate the opportunity to provide feedback in response to the Health Resources and Services Administrations (HRSA) proposed 340B Rebate Model Request For Information (RFI). AdventHealth includes 57 hospital facilities located across nine states, some of which rely substantially on savings from the 340B program to provide a variety of services to vulnerable populations. Patients who seek care at AdventHealth reflect the communities we serve: diverse in age, race, ethnicity, income and coverage. Many of our facilities depend on the 340B program to serve complex patients in socioeconomically challenged settings. AdventHealth supports efforts by HRSA to ensure the sustainability of the 340B program. We appreciate HRSAs thoughtful approach to the various rebate models proposed in recent months to ensure uniformity and minimal disruptions to patients in vulnerable communities. However, we believe that replacing the current upfront discount model with a retrospective rebate framework would fundamentally undermine the core mission of the 340B program. We are also concerned that a rebate model would not align with the statutory framework of the 340B program. We believe that this will create financial pressures for hospitals, add new administrative complexities, and risk reducing the resources available for patient care. We encourage HRSA to consider adjustments that would safeguard program stability while advancing shared goals of transparency and accountability. We specifically offer feedback regarding: Statutory Design and Purpose of the 340B Program Cash-Flow Disruptions for Strained Hospitals Administrative and Operational Burden Systems and Data Infrastructure Challenges Impact on Patient Care and Community Services Alternatives to a Rebate Model Page 2 of 6 Statutory Design and Purpose of the 340B Program Congress designed the 340B Program to require manufacturers to provide covered outpatient drugs to covered entities at or below the statutorily defined ceiling price at the time of purchase. The statutory framework in section 340B of the Public Health Service Act (42 U.S.C. 256b) consistently reflects a prospective pricing obligation tied to drug acquisition, not a retrospective reimbursement mechanism. While the statute references discounts and rebates, that language must be interpreted in the context of how the program has been implemented for more than three decadeswith uniform reliance on upfront discounts effectuated through wholesalers and manufacturers. At no point has HRSA successfully implemented a system-wide rebate mechanism as the primary means of ensuring compliance with the 340B ceiling price. HRSAs current RFI acknowledges that the 340B Program has operated as an upfront discount model since its inception, and covered entitiesincluding AdventHealthhave structured their compliance systems, contractual relationships, and patient care investments around that longstanding framework. A shift to a rebate-based model would therefore represent not a minor administrative adjustment, but a fundamental restructuring of the program. Such a restructuring raises significant legal concerns. Courts have already scrutinized HRSAs authority to alter core elements of the 340B Program. In American Hospital Association et al. v. Kennedy, the U.S. District Court vacated HRSAs prior rebate pilot initiative, underscoring the agencys limited authority to deviate from the statutory design absent clear congressional authorization. A rebate-based system that replaces the established upfront discount mechanism risks reintroducing the same legal deficiencies identified by the court. Moreover, replacing a prospective pricing obligation with a retrospective rebate framework would effectively shift financial risk from manufacturers to covered entitiesan outcome that is inconsistent with Congresss directive that the program enable providers to stretch scarce federal resources as far as possible. Requiring hospitals to purchase drugs at higher prices and later seek reimbursement is not simply a different delivery mechanism; it alters the economic substance of the statutory benefit. At a minimum, such a change would require a clear and unambiguous delegation of authority from Congress. In the absence of such direction, adopting a rebate modelparticularly on a broad or mandatory basiswould raise serious concerns under established administrative law principles, including whether the agency has acted within its statutory authority and whether it has adequately considered the reliance interests of regulated entities. For these reasons, AdventHealth strongly urges HRSA to maintain the upfront discount structure that is consistent with both the statutory design and decades of program implementation. Page 3 of 6 Cash-Flow Disruptions for Strained Hospitals Under a rebate model, covered entities would be required to purchase drugs at wholesale acquisition cost (WAC) or another higher price and wait weeks or months for reimbursement of the 340B discount. For AdventHealth, this approach would: Require the diversion of millions of dollars in working capital Introduce uncertainty as to the timing and accuracy of manufacturer rebate payments Create financial volatility that directly undermines patient care investments The RFI seeks input on these cash-flow impacts, implicitly recognizing that payment timing under a rebate model differs materially from current arrangements with manufacturers and wholesalers. For AdventHealth, the transition to a rebate-based model would require us to front substantial capitalas much as $81.4 million over the next three yearsto manufacturers while awaiting reimbursement, effectively forcing hospitals to operate as short-term financiers for pharmaceutical companies. Even under optimistic assumptions regarding rebate timing, the lag between drug acquisition, patient administration or dispensing, claims submission, and rebate reconciliation would create persistent liquidity pressures across our system. Rebate models introduce meaningful and ongoing financial exposure, including millions of dollars in monthly cash flow impacts and significant annual funds placed at risk due to denied, delayed, or disputed rebates. These pressures would be magnified across a multi-state system like AdventHealth, where the system often has a small presence in a State or is the sole community provider and predictable access to 340B savings is essential to sustaining patient care programs. Moreover, rebate timing assumptions do not reflect real-world hospital billing and operational workflows. For many physician-administered drugs, claims data is not finalized until weeks after administration due to coding, charge capture, and payer billing processes. As a result, even a nominal 10-day rebate payment requirement would not mitigate the inherent delays in the system and would still require hospitals to carry significant financial exposure for extended periods. Administrative and Operational Burden A rebate model would also impose significant new administrative and operational burdens on AdventHealth. Our current 340B program infrastructureincluding inventory management, compliance systems, and third-party vendor relationshipshas been designed around an upfront discount framework. Transitioning to a rebate model would require fundamental redesign of these systems. Page 4 of 6 Specifically, AdventHealth anticipates that a rebate model would require: New workflows for claims identification, extraction, validation, submission, and tracking Expanded reliance on third-party administrators (TPAs) and associated vendor costs Increased manual review processes to ensure claims accuracy and eligibility Ongoing reconciliation of rebate payments, including tracking denials and pursuing appeals Additional audit, compliance, and documentation requirements Hospitals experience with existing manufacturer data submission platforms underscores the complexity of these processes. Even under current limited data-sharing arrangements (e.g., contract pharmacy claims submissions), hospitals encounter frequent data inconsistencies, unclear error messaging, and delays in resolutionissues that would be significantly amplified under a full rebate model spanning all sites of care. Contrary to HRSAs assumption that these requirements would impose minimal additional burden, AdventHealth expects that a rebate model would necessitate significant incremental staffing and operational investment. These are not one-time implementation costs, but ongoing resource demands that would divert personnel away from direct patient care and programmatic support. Systems and Data Infrastructure Challenges Implementation of a rebate model would also require substantial investments in information technology and data infrastructure. AdventHealths current systems are not configured to extract and transmit all required data elements for rebate claims across multiple care settings, including hospital outpatient departments, provider-based clinics, and in-house pharmacies. To comply with a rebate model, AdventHealth would need to: Develop new interfaces between electronic health records (EHRs), pharmacy systems, and third-party vendors Build or procure software capable of aggregating and validating claims-level data across disparate systems Implement new data governance and audit protocols to ensure compliance with manufacturer and HRSA requirements Conduct extensive staff training and ongoing system maintenance Importantly, much of the data required for rebate submissionsparticularly for medical claimsis not readily accessible in a single system and would require manual intervention to compile and validate. This introduces additional risk of error, delays in submission, and potential rebate denials. Page 5 of 6 Impact on Patient Care and Community Services The cumulative effect of these financial and administrative burdens would be a reduction in the resources available to support patient care. AdventHealth relies on 340B savings to fund a wide range of services, including: Care coordination and chronic disease management programs Access to high-cost specialty medications Uncompensated care and financial assistance for uninsured patients Community health initiatives targeting vulnerable populations A rebate model would erode these resources by introducing uncertainty in both the timing and amount of 340B savings. As demonstrated in peer analyses, delayed and unpredictable rebate payments can disrupt budgeting, limit investment in patient services, and jeopardize access to essential medications. In practical terms, this could result in reduced availability of high-cost therapies, delays in care delivery, and scaling back of programs designed to address health disparities in the communities we serve. Alternatives to a Rebate Model AdventHealth strongly supports the consideration of less disruptive alternatives to address HRSAs stated goals, including program integrity and prevention of duplicate discounts. As highlighted by national hospital associations, viable approaches exist that do not require abandoning the upfront discount model. In particular, we support: Use of third-party clearinghouse mechanisms for 340B eligible IRA selected drugs to facilitate claims verification and deduplication Targeted improvements to existing Medicare Drug Price Negotiation Program (MDPNP) processes Standardized data-sharing frameworks that minimize administrative burden on covered entities These approaches would better balance program integrity objectives with the need to preserve access to 340B savings for patient care. Conclusion Page 6 of 6 AdventHealths mission is to extend the healing ministry of Christ by caring for the most vulnerable. The 340B program is an essential tool in fulfilling that mission. The proposed rebate model raises serious questions about financial sustainability, statutory alignment, administrative feasibility, and patient impact. We deeply respect HRSAs commitment to ensuring program integrity. We urge the Agency to reconsider this rebate proposal and work collaboratively with providers to design solutions that advance transparency and accountability while preserving the stability of hospitals and the care they provide. AdventHealth welcomes the opportunity to further discuss any of the recommendations provided above. If you have any questions or would like further information, please do not hesitate to contact me or Susana Molina Ramos, Executive Director of Public Policy at Susana.MolinaRamos@AdventHealth.com. Thank you for your continued commitment to the 340B Program. Sincerely, Michael E. Griffin Senior Vice President Advocacy and Public Policy AdventHealth
HRSA-2026-0001-2316Alaska Pharmacy Association2026-04-20T04:00Z13,313 chars
See attached file(s) April 18, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Administrator Engels: The Alaska Pharmacy Association Health-System Academy appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) proposal to pilot a rebate-based model for the 340B Drug Pricing Program. AKPhA Health-System Academy represents pharmacists and pharmacy leaders practicing in Alaskas hospitals, health systems, and clinics, including organizations that serve geographically remote and medically underserved communities. While we recognize HRSAs goal of improving transparency and program integrity, we are deeply concerned that a shift from the longstanding upfront discount model to a rebate-based model would create significant unintended consequences for Alaskas health care institutions and the patients they serve. Cash Flow Challenges for Alaska Health Care Institutions A primary concern with a rebate-based 340B model is the substantial cash flow burden it would impose on covered entities. Under the current structure, eligible providers receive upfront drug discounts, allowing limited financial resources to be preserved and reinvested immediately into patient care. A rebate model would require hospitals and clinics to purchase high-cost medications at full price and then wait weeks or months for manufacturer rebates to be processed and reimbursed. For Alaska providersparticularly Critical Access Hospitals (CAHs) and small rural facilities operating on extremely narrow marginsthis shift presents a serious financial risk. Many of these institutions lack the capital reserves or borrowing flexibility needed to front the full acquisition cost of expensive medications, including specialty drugs and infusions. Delays or disputes in rebate payment could further exacerbate financial instability, potentially threatening the viability of essential health services. Rebate Denials Concerns Under a potential 340B rebate-based pilot, the Alaska Pharmacy Association Health-System Academy strongly supports the inclusion of clear, enforceable guardrails to ensure manufacturer rebate denials are limited to narrowly defined and appropriate circumstances. Without explicit limitations and mandatory transparency, there is significant risk that denials could be issued for administrative or technical reasons, exacerbating cash flow challenges for Alaska hospitals and clinicsparticularly Critical Access Hospitals and other health systems serving our underserved communitesand further threatening local patient access to medications and services. Manufacturers should be required to provide a clear rationale and claim-level documentation for any denial to allow covered entities meaningful review and response. To minimize administrative burden and financial risk, we urge HRSA to require standardized denial processes, including uniform denial templates, defined timelines for determinations and appeals, and a clear adjudication pathway for improper denials. Delays or unresolved denials under a rebate model would directly impact covered entities ability to fund essential services, increasing the likelihood of service reductions or care being shifted out of local communities. Strong denial safeguards are essential to preserve the intent of the 340B program and protect patient access in rural and frontier settings such as Alaska. Impact on Patient Access and Local Services The financial strain introduced by a rebate model could directly reduce patient access to care. In Alaska, hospitals and clinics frequently use 340B savings to support high-cost infusion and specialty medication services that would otherwise be unsustainable in rural communities. Without predictable and timely access to 340B discounts, institutions may be forced to discontinue certain infusion therapies or specialty services altogether. The loss of these local services would require patientsmany of whom already face transportation, weather, and cost barriersto travel long distances out of their communities to receive care. This not only increases the burden on patients and families but also increases the risk of delayed or forgone treatment, poorer health outcomes, and higher overall system costs. Downstream Effects on Other Essential Health Services 340B savings are not limited to medication access alone. The organizations that AKPhA Health-System Academy represents include clinics and hospitals that routinely leverage these funds to offset the cost of other critical services that are otherwise underfunded or inadequately reimbursed. A rebate-based model would introduce new administrative expenses, including additional billing infrastructure, tracking systems, staff time, and compliance oversight, all of which would divert limited resources away from patient care. In speaking with represented organizations, as overall expenses rise, fewer funds would remain available to support essential services such as: Clinical pharmacy services, including medication management and chronic disease support Laboratory services, which are critical for timely diagnosis and monitoring Dental services, often limited or unavailable for underserved communities Mental and behavioral health services, which are already in short supply across Alaska The cumulative effect would be a reduction in the breadth and quality of services offered locally, disproportionately impacting vulnerable and underserved populations that the 340B program was designed to support. Conclusion AKPhA Health-System Academy respectfully urges HRSA to carefully consider the unique operational realities of Alaskas health care system when evaluating any changes to the 340B program. A rebate-based model risks destabilizing already-fragile institutions, reducing patient access to local care, and undermining the very purpose of the 340B program. We encourage HRSA to engage directly with rural and frontier stakeholders and to avoid policy changes that shift financial risk onto covered entities without clear safeguards, timely reimbursement guarantees, and demonstrable patient benefit. Preserving predictable access to 340B savings is essential to sustaining health care services in Alaska communities. Thank you for the opportunity to comment and for your continued commitment to improving care for vulnerable populations. Sincerely, Alaska Pharmacy Association Health-System Academy April 18, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels: The Alaska Pharmacy Association Health-System Academy appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSA) proposal to pilot a rebate-based model for the 340B Drug Pricing Program. AKPhA Health-System Academy represents pharmacists and pharmacy leaders practicing in Alaskas hospitals, health systems, and clinics, including organizations that serve geographically remote and medically underserved communities. While we recognize HRSAs goal of improving transparency and program integrity, we are deeply concerned that a shift from the longstanding upfront discount model to a rebate-based model would create significant unintended consequences for Alaskas health care institutions and the patients they serve. Cash Flow Challenges for Alaska Health Care Institutions A primary concern with a rebate-based 340B model is the substantial cash flow burden it would impose on covered entities. Under the current structure, eligible providers receive upfront drug discounts, allowing limited financial resources to be preserved and reinvested immediately into patient care. A rebate model would require hospitals and clinics to purchase high-cost medications at full price and then wait weeks or months for manufacturer rebates to be processed and reimbursed. For Alaska providersparticularly Critical Access Hospitals (CAHs) and small rural facilities operating on extremely narrow marginsthis shift presents a serious financial risk. Many of these institutions lack the capital reserves or borrowing flexibility needed to front the full acquisition cost of expensive medications, including specialty drugs and infusions. Delays or disputes in rebate payment could further exacerbate financial instability, potentially threatening the viability of essential health services. Rebate Denials Concerns Under a potential 340B rebate-based pilot, the Alaska Pharmacy Association Health-System Academy strongly supports the inclusion of clear, enforceable guardrails to ensure manufacturer rebate denials are limited to narrowly defined and appropriate circumstances. Without explicit limitations and mandatory transparency, there is significant risk that denials could be issued for administrative or technical reasons, exacerbating cash flow challenges for Alaska hospitals and clinicsparticularly Critical Access Hospitals and other health systems serving our underserved communitesand further threatening local patient access to medications and services. Manufacturers should be required to provide a clear rationale and claim-level documentation for any denial to allow covered entities meaningful review and response. To minimize administrative burden and financial risk, we urge HRSA to require standardized denial processes, including uniform denial templates, defined timelines for determinations and appeals, and a clear adjudication pathway for improper denials. Delays or unresolved denials under a rebate model would directly impact covered entities ability to fund essential services, increasing the likelihood of service reductions or care being shifted out of local communities. Strong denial safeguards are essential to preserve the intent of the 340B program and protect patient access in rural and frontier settings such as Alaska. Impact on Patient Access and Local Services The financial strain introduced by a rebate model could directly reduce patient access to care. In Alaska, hospitals and clinics frequently use 340B savings to support high-cost infusion and specialty medication services that would otherwise be unsustainable in rural communities. Without predictable and timely access to 340B discounts, institutions may be forced to discontinue certain infusion therapies or specialty services altogether. The loss of these local services would require patientsmany of whom already face transportation, weather, and cost barriersto travel long distances out of their communities to receive care. This not only increases the burden on patients and families but also increases the risk of delayed or forgone treatment, poorer health outcomes, and higher overall system costs. Downstream Effects on Other Essential Health Services 340B savings are not limited to medication access alone. The organizations that AKPhA Health-System Academy represents include clinics and hospitals that routinely leverage these funds to offset the cost of other critical services that are otherwise underfunded or inadequately reimbursed. A rebate-based model would introduce new administrative expenses, including additional billing infrastructure, tracking systems, staff time, and compliance oversight, all of which would divert limited resources away from patient care. In speaking with represented organizations, as overall expenses rise, fewer funds would remain available to support essential services such as: Clinical pharmacy services, including medication management and chronic disease support Laboratory services, which are critical for timely diagnosis and monitoring Dental services, often limited or unavailable for underserved communities Mental and behavioral health services, which are already in short supply across Alaska The cumulative effect would be a reduction in the breadth and quality of services offered locally, disproportionately impacting vulnerable and underserved populations that the 340B program was designed to support. Conclusion AKPhA Health-System Academy respectfully urges HRSA to carefully consider the unique operational realities of Alaskas health care system when evaluating any changes to the 340B program. A rebate-based model risks destabilizing already-fragile institutions, reducing patient access to local care, and undermining the very purpose of the 340B program. We encourage HRSA to engage directly with rural and frontier stakeholders and to avoid policy changes that shift financial risk onto covered entities without clear safeguards, timely reimbursement guarantees, and demonstrable patient benefit. Preserving predictable access to 340B savings is essential to sustaining health care services in Alaska communities. Thank you for the opportunity to comment and for your continued commitment to improving care for vulnerable populations. Sincerely, Alaska Pharmacy Association Health-System Academy
HRSA-2026-0001-2317Adventist Health Policy Association2026-04-20T04:00Z13,457 chars
Please see the attached comments from the Adventist Health Policy Association. Submitted electronically to: http://www.regulations.gov April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels, On behalf of the Adventist Health Policy Association, we appreciate the opportunity to provide feedback in response to the Health Resources and Services Administrations (HRSA) proposed 340B Rebate Model Request For Information (RFI). AHPA is the collective policy voice of the five Seventh-day Adventist-affiliated health systems in the United States. Our member systems operate 107 hospitals and over 600 other health facilities across 16 states and the District of Columbia, some of which rely substantially on savings from the 340B program to provide a variety of services to vulnerable populations. Together, we serve over 16 million patients who reflect the communities we serve: diverse in age, race, ethnicity, income and coverage. Many of our facilities depend on the 340B program to serve complex patients in socioeconomically challenged settings. AHPA supports efforts by HRSA to ensure the sustainability of the 340B program. We appreciate HRSAs thoughtful approach to the various rebate models proposed in recent months to ensure uniformity and minimal disruptions to patients in vulnerable communities. However, we believe that replacing the current upfront discount model with a retrospective rebate framework would fundamentally undermine the core mission of the 340B program. We are also concerned that a rebate model would not align with the statutory framework of the 340B program. We believe that this will create financial pressures for hospitals, add new administrative complexities, and risk reducing the resources available for patient care. We encourage HRSA to consider adjustments that would safeguard program stability while advancing shared goals of transparency and accountability. We specifically offer feedback regarding: Statutory Design and Purpose of the 340B Program Cash-Flow Disruptions for Strained Hospitals Administrative and Operational Burden Systems and Data Infrastructure Challenges Impact on Patient Care and Community Services Alternatives to a Rebate Model Page 2 of 6 Statutory Design and Purpose of the 340B Program Congress designed the 340B Program to require manufacturers to provide covered outpatient drugs to covered entities at or below the statutorily defined ceiling price at the time of purchase. The statutory framework in section 340B of the Public Health Service Act (42 U.S.C. 256b) consistently reflects a prospective pricing obligation tied to drug acquisition, not a retrospective reimbursement mechanism. While the statute references discounts and rebates, that language must be interpreted in the context of how the program has been implemented for more than three decadeswith uniform reliance on upfront discounts effectuated through wholesalers and manufacturers. At no point has HRSA successfully implemented a system-wide rebate mechanism as the primary means of ensuring compliance with the 340B ceiling price. HRSAs current RFI acknowledges that the 340B Program has operated as an upfront discount model since its inception, and covered entities have structured their compliance systems, contractual relationships, and patient care investments around that longstanding framework. A shift to a rebate-based model would therefore represent not a minor administrative adjustment, but a fundamental restructuring of the program. Such a restructuring raises significant legal concerns. Courts have already scrutinized HRSAs authority to alter core elements of the 340B Program. In American Hospital Association et al. v. Kennedy, the U.S. District Court vacated HRSAs prior rebate pilot initiative, underscoring the agencys limited authority to deviate from the statutory design absent clear congressional authorization. A rebate-based system that replaces the established upfront discount mechanism risks reintroducing the same legal deficiencies identified by the court. Moreover, replacing a prospective pricing obligation with a retrospective rebate framework would effectively shift financial risk from manufacturers to covered entitiesan outcome that is inconsistent with Congresss directive that the program enable providers to stretch scarce federal resources as far as possible. Requiring hospitals to purchase drugs at higher prices and later seek reimbursement is not simply a different delivery mechanism; it alters the economic substance of the statutory benefit. At a minimum, such a change would require a clear and unambiguous delegation of authority from Congress. In the absence of such direction, adopting a rebate modelparticularly on a broad or mandatory basiswould raise serious concerns under established administrative law principles, including whether the agency has acted within its statutory authority and whether it has adequately considered the reliance interests of regulated entities. For these reasons, AHPA strongly urges HRSA to maintain the upfront discount structure that is consistent with both the statutory design and decades of program implementation. Page 3 of 6 Cash-Flow Disruptions for Strained Hospitals Under a rebate model, covered entities would be required to purchase drugs at wholesale acquisition cost (WAC) or another higher price and wait weeks or months for reimbursement of the 340B discount. For AHPA, this approach would: Require the diversion of millions of dollars in working capital Introduce uncertainty as to the timing and accuracy of manufacturer rebate payments Create financial volatility that directly undermines patient care investments The RFI seeks input on these cash-flow impacts, implicitly recognizing that payment timing under a rebate model differs materially from current arrangements with manufacturers and wholesalers. For our member systems, the transition to a rebate-based model would require them to front substantial capital to manufacturers while awaiting reimbursement, effectively forcing hospitals to operate as short-term financiers for pharmaceutical companies. Even under optimistic assumptions regarding rebate timing, the lag between drug acquisition, patient administration or dispensing, claims submission, and rebate reconciliation would create persistent liquidity pressures across our system. Rebate models introduce meaningful and ongoing financial exposure, including millions of dollars in monthly cash flow impacts and significant annual funds placed at risk due to denied, delayed, or disputed rebates. These pressures would be magnified across multi-state systems, where the system often has a small presence in a State or is the sole community provider and predictable access to 340B savings is essential to sustaining patient care programs. Moreover, rebate timing assumptions do not reflect real-world hospital billing and operational workflows. For many physician-administered drugs, claims data is not finalized until weeks after administration due to coding, charge capture, and payer billing processes. As a result, even a nominal 10-day rebate payment requirement would not mitigate the inherent delays in the system and would still require hospitals to carry significant financial exposure for extended periods. Administrative and Operational Burden A rebate model would also impose significant new administrative and operational burdens on our systems. Our current 340B program infrastructureincluding inventory management, compliance systems, and third-party vendor relationshipshas been designed around an upfront discount framework. Transitioning to a rebate model would require fundamental redesign of these systems. Page 4 of 6 Specifically, AHPA anticipates that a rebate model would require: New workflows for claims identification, extraction, validation, submission, and tracking Expanded reliance on third-party administrators (TPAs) and associated vendor costs Increased manual review processes to ensure claims accuracy and eligibility Ongoing reconciliation of rebate payments, including tracking denials and pursuing appeals Additional audit, compliance, and documentation requirements Hospitals experience with existing manufacturer data submission platforms underscores the complexity of these processes. Even under current limited data-sharing arrangements (e.g., contract pharmacy claims submissions), hospitals encounter frequent data inconsistencies, unclear error messaging, and delays in resolutionissues that would be significantly amplified under a full rebate model spanning all sites of care. Contrary to HRSAs assumption that these requirements would impose minimal additional burden, AHPA expects that a rebate model would necessitate significant incremental staffing and operational investment. These are not one-time implementation costs, but ongoing resource demands that would divert personnel away from direct patient care and programmatic support. Systems and Data Infrastructure Challenges Implementation of a rebate model would also require substantial investments in information technology and data infrastructure. Our current systems are not configured to extract and transmit all required data elements for rebate claims across multiple care settings, including hospital outpatient departments, provider-based clinics, and in-house pharmacies. To comply with a rebate model, we would need to: Develop new interfaces between electronic health records (EHRs), pharmacy systems, and third-party vendors Build or procure software capable of aggregating and validating claims-level data across disparate systems Implement new data governance and audit protocols to ensure compliance with manufacturer and HRSA requirements Conduct extensive staff training and ongoing system maintenance Importantly, much of the data required for rebate submissionsparticularly for medical claimsis not readily accessible in a single system and would require manual intervention to compile and validate. This introduces additional risk of error, delays in submission, and potential rebate denials. Page 5 of 6 Impact on Patient Care and Community Services The cumulative effect of these financial and administrative burdens would be a reduction in the resources available to support patient care. AHPA relies on 340B savings to fund a wide range of services, including: Care coordination and chronic disease management programs Access to high-cost specialty medications Uncompensated care and financial assistance for uninsured patients Community health initiatives targeting vulnerable populations A rebate model would erode these resources by introducing uncertainty in both the timing and amount of 340B savings. As demonstrated in peer analyses, delayed and unpredictable rebate payments can disrupt budgeting, limit investment in patient services, and jeopardize access to essential medications. In practical terms, this could result in reduced availability of high-cost therapies, delays in care delivery, and scaling back of programs designed to address health disparities in the communities we serve. Alternatives to a Rebate Model AHPA strongly supports the consideration of less disruptive alternatives to address HRSAs stated goals, including program integrity and prevention of duplicate discounts. As highlighted by national hospital associations, viable approaches exist that do not require abandoning the upfront discount model. In particular, we support: Use of third-party clearinghouse mechanisms for 340B eligible IRA selected drugs to facilitate claims verification and deduplication Targeted improvements to existing Medicare Drug Price Negotiation Program (MDPNP) processes Standardized data-sharing frameworks that minimize administrative burden on covered entities These approaches would better balance program integrity objectives with the need to preserve access to 340B savings for patient care. Conclusion Page 6 of 6 AHPAs mission is to promote wholeness to live Gods healing love, especially for the most vulnerable. The 340B program is an essential tool in fulfilling that mission. The proposed rebate model raises serious questions about financial sustainability, statutory alignment, administrative feasibility, and patient impact. We deeply respect HRSAs commitment to ensuring program integrity. We urge the Agency to reconsider this rebate proposal and work collaboratively with providers to design solutions that advance transparency and accountability while preserving the stability of hospitals and the care they provide. AHPA welcomes the opportunity to further discuss any of the recommendations provided above. If you have any questions or would like further information, please do not hesitate to contact me or Susana Molina Ramos, Executive Director of Public Policy at Susana.MolinaRamos@AdventHealth.com. Thank you for your continued commitment to the 340B Program. Sincerely, Michael E. Griffin President Adventist Health Policy Association
HRSA-2026-0001-2318International Community Health Services2026-04-20T04:00Z31,840 chars
Please see attached file. 1 of 11 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA- 2026-03042) Dear Director Britton: On behalf of International Community Health Services (ICHS), I would like to thank the Health Resources and Services Administration (HRSA) for the additional opportunity to provide comments on a potential 340B Rebate Model Pilot Program. The 340B program is foundational to Community Health Centers (CHCs) ability to care for medically underserved communities. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. ICHS is a Community Health Center in King County, Washington. We served 36,283 unique patients in 2025 living across the greater Puget Sound region. The overwhelming majority of our patients 81 percent are low-income, and over half are on Medicaid or are dually eligible for Medicare and Medicaid. We serve patients regardless of insurance or ability to pay. ICHS Strongly Urges HRSA to Exempt CHCs from the 340B Rebate Model Pilot Program. Such a model poses a number of threats to CHCs abilities to fulfill their mandate and provide health care services. The proposed 340B Rebate Model Pilot Program (rebate model) is a direct threat to CHCs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has allowed health centers to purchase outpatient medications at significantly reduced costs. This enables us to provide affordable and sometimes free medications to millions of low-income and uninsured patients. Congressional intent is clear: 340B was created to help safety- net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 of 11 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the patients who rely on us. At ICHS, this will impact: The 36,283 patients we serve each year. The $3 million administrative costs for our current 340B program. The substance use disorder treatment, mobile medical and dental, and insurance enrollment support services we offer. We strongly urge HRSA to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients served by CHCs. This model could render critical medications financially out of reach for uninsured and underinsured patients who rely on the 340B programs affordability. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a result of a 340B rebate model. These forced therapeutic changes introduce real clinical risk: nonadherence, treatment delays, and adverse outcomes, among others. This is especially risky for patients managing multiple chronic conditions who have limited medication alternatives and nearby pharmacies. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings. This means that CHC patients will be disproportionately affected, where adults age 18-64 are 35 percent more likely to have a chronic condition and 31 percent more likely to have multiple chronic conditions than patients seen by private practice providers.1 Studies show a significantly higher prevalence of diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, like-sustaining therapies. For instance, direct oral anticoagulants (DOACs) are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival. One study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 https://www.nachc.org/wp-content/uploads/2026/02/Policy-Papers_CHC-Chronic-Disease_Feb-2026_FINAL.pdf 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 of 11 At ICHS, we estimate that with the rebate model, the DAOCs Eliquis and Xarelto will require a 308 percent and 31,525 percent increase, respectively, in net spending based on 2025 prescriptions. Similarly, SGLT2 inhibitors such as Farxiga and Jardiance, which treat Type 2 diabetes, chronic kidney disease, and heart failure, will require an 11,683 percent and 18,023 percent increase, respectively, in net spending. Enbrel, used to treat patients with painful autoimmune conditions like rheumatoid arthritis and plaque psoriasis, will require a 3,311,385 percent increase in net spending. By making these drugs unaffordable, the rebate model would deny our patients access to the most effective therapies for managing their chronic and in some cases, critical illnesses, leading to a predictable increase in preventable hospitalizations. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,3 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed rebate model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would weaken the safety net providers that 1 in 7 Americans and 1 in 3 rural residents rely on for healthcare.4 CHCs are required to provide sliding fee discounts to patients with incomes at or below 200 percent of the federal poverty guidelines. At ICHS, this accounts for 4 in 5 of our patients. These same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the upfront 340B discount, affording the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients. The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate model. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure updates and hire or reassign staff to manage new complexities. These include varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the 3 https://www.nachc.org/wp-content/uploads/2026/02/Policy-Papers_CHC-Chronic-Disease_Feb-2026_FINAL.pdf 4 https://www.nachc.org/wp-content/uploads/2026/02/Policy-Papers_CHC101_Feb-2026_FINAL.pdf 4 of 11 volume of prescriptions a pharmacy fills for a given drug, CHCs will face an increased administrative burden in monitoring rebate claims and payments. CHCs have already experienced steep increases in operational costs because of the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs (CADs) and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capacities. ICHS estimates we will need at least two new full-time equivalents (FTEs) to manage data submissions and reconciliations. This is in line with a NACHC assessment, which found that 47 percent of CHCs estimate needing to hire 0.5 to 1 FTEs, 36 percent estimate needing 1 to 2 FTEs, and 7 percent estimate needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.5 Navigating this pilot requires more than just staff time; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would substantially increase. For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Unlike contract pharmacies that use TPAs, in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new infrastructure. ICHS difficulties are compounded because our EHR is purchased through another health care network. We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. ICHS expects it will cost approximately $325,000 upfront to invest in third-party rebate tracking systems. Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. ICHS, which serves over 36,000 patients, estimates that the total projected increase in administrative expenses including stand-up and implementation of new IT and pharmacy systems, staff resources, and carrying costs will be nearly $720,000. For CHCs with contract pharmacies, the rebate model introduces a new complexity that threatens the very existence of these arrangements. ICHS currently partners with seven pharmacies to increase access to affordable medications. But navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per- 5 Internal NACHC assessment (99 responses). 5 of 11 claim fees. The rebate model also creates a reconciliation gap. Our staff must monitor claims across seven different pharmacy locations to ensure rebates are paid correctly. Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Over 17 percent of the US population already lives in a pharmacy desert,6 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.7 This is acutely felt in Washington, where up to 1.2 million people live in areas with minimal access to pharmacies.8 Between January 2023 and March 2024, 81 pharmacies across the state closed, including both national chains and locally owned businesses. Washington was once home to the countrys oldest family-owned chain drug store, which at its height had 67 stores across the Puget Sound region. Its last store closed in October 2025.9 These losses demonstrate how easily families in our service area can lose pharmacy access. Our Bellevue Medical and Dental Clinic does not have an in-house pharmacy and relies almost entirely on contract pharmacies to fill our patients prescriptions. HRSA should explicitly exclude Clinic Administered Drugs (CADs) from any 340B rebate model pilot. Including CADs in a rebate model at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. CAD operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADS would require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 ICHS estimates that implementing new CAD systems would cost $262,000. We cannot yet calculate annual fees associated with this change, as we do not know what the owner of our EHR module will charge us. The proposed 340B rebate model would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full Wholesale Acquisition Cost pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. Under the proposed rebate model, CHCs would be required to purchase drugs at full retail price, known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of 6 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 7 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 https://www.seattletimes.com/business/the-loss-of-bartell-drugs-weighs-heavy-on-a-city-rich-with-assets/ 9 https://www.seattletimes.com/business/everything-must-go-seattles-135-year-old-bartell-drugs-fades-away/ 10 Internal NACHC survey data 6 of 11 precedent would dramatically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as initial purchase prices will be at the WACH and the 340B price is no longer reflected in the pharmacy software from the wholesalers catalog. The rebate model creates substantial uncertainty about its impact on a CHCs ability to offer sliding fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of project.11 In line with this mission, CHCs offer flat or sliding-scale discount on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. This change, however, will force CHCs to make difficult decisions about how to allocate their limited financial resources. At ICHS, a patient who is at or below 100 percent FPL will have services discounted to a nominal fee, which must be nominal from the perspective of the patient. These lowest-income patients account for 40 percent of ICHS 2025 patient population. ICHS provided $560,641 in sliding fee discounts in 2025, and we expect that need will increase in 2026 and beyond. We also expect that our ability to offer sliding fee discounts will decrease significantly under a rebate model. The refund timeline in practice is another concern. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities (CEs) up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year, roughly every thirty days.13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day submission cadence. Based on national anecdotal data, pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. At ICHS, three of our four full-service clinics have physical pharmacies, which would feel significant strain operating under this cycle. There may be other delays in receiving the full rebate, such as denials, which could create further strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments. However, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials 11 https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#requirements-9 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance-manual/chapter9#footnote10 13 https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 7 of 11 related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. ICHS estimates a 15 percent rebate denial rate, which would add significant financial and administrative strain under even these conditions. Further complicating matters, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to the confusion. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. CHCs are concerned that purchasing drugs at full WAC will potentially lead CHCs to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. Some CHCs have suggested paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NACHC estimates that, on average, CHCs operate with margins below -4 percent, a razor-thin divide.14 ICHS has projected a 45-day cash on hand impact on MFP drugs in 2026 of $657,271. ICHS worries that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B program to stretch scarce federal resources15 by diverting patient-care funds towards interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. CHCs are often perceived as having higher credit risks due to these slim financial margins, making it difficult or impractical to obtain increases to credit limits. CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WACH-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, ICHS estimates our 2027 annual rebate opportunity cost on MFP drugs to be approximately $1.07 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. We also estimate that purchasing the ten selected drugs at WAC instead of 340B ceiling prices will increase our 2027 average upfront monthly drug spend by $584,995.71. In 2028, that will increase even more to an average of $641,676.42 per month. 14 https://www.nachc.org/community-health-centers-grew-in-2024-but-patient-access-faces-a-tipping-point/ 15 https://www.hrsa.gov/opa 8 of 11 Every dollar we pay at upfront WAC is a dollar that remains frozen in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond immediately to public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out significant new credit lines or dip into limited financial reserves. This is not a sustainable solution; the interest costs alone will significantly impair our ability to fund existing programs and services at their current levels. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on ICHS, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the cascading effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that ICHS' 36,000 patients and 34 million CHC patients across the country depend on. ICHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previous 340B rebate pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given ICHSs current volume of the ten selected drugs, we estimate $812,529 annual rebate opportunity costs, which will grow in 2027 and 2028 as additional drugs are included in the rebate. This is a sum ICHS cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without standardized, transparent, and neutral dispute resolution processes, the 340B rebate pilot functions as an interest-free loan from 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 9 of 11 safety net providers to multibillion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. CHCs already operate under a comprehensive framework established through the Health Center Program and 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, CHCs utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100 percent FPL. These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, administered under HRSA guidance. They also follow strict 340B compliance protocols, including audits, training, and external oversite. CHCs participating in the 340B program are required to report 340_-related information annually through the Uniform Data System (UDS). This included data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients we serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, we are national models of compliance. HRSA must require that any rebate model operates under uniform national standards that limit manufacturers discretion, hold manufacturers accountable, and protect CEs from financial harm. We recommend the following guardrails: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (ie: 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claim-level documentation. Rebate payment timing requirements that must apply to both initial and corrected determinations if HRSA adopts a ten-day payment requirement, then that requirement must run from both the initial determination and any subsequent corrected determinations to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denial by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. 10 of 11 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria3 The Office of Pharmacy Affairs OPA) should establish a stakeholder advisory panel to ensure that the feedback and concerns of CEs are formally and consistently addressed this panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. We further recommend that OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash slow and borrowing challenges for covered entities by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs if a rebate model were implemented, the resulting cash flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid: a NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 440B claims data for Medicaid prescriptions and making it available to states. Given the major disruptions the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety net providers and that the 340B program was designed to support. In conclusion, ICHS strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. 11 of 11 A rebate program represents a departure from the original intent of the 340B program to allow safety net providers to stretch scarce federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staffing to comply with rebate requirements and to track rebates. It would create a new barrier for patients, especially uninsured patients, who depend on the upfront 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. ICHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. ICHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot. Please do not hesitate to contact us if you have any questions. Sincerely, Kelli Nomura, MBA, MHP Chief Executive Officer International Community Health Services
HRSA-2026-0001-2319Pillr Health2026-04-20T04:00Z11,957 chars
Pillr Health Comments Dear Administrator Engels and HRSA Officials, On behalf of Pillr Health, we respectfully submit the following comments regarding the 340B Rebate Model Pilot Program outlined in HHS Docket No. HRSA-2026-03042. Pillr Health is a nationally recognized 340B Third Party Administrator (TPA), partnering with covered entities, contract pharmacies, and wholesalers across the country to support compliant, efficient program operations under Section 340B of the Public Health Service Act. We commend Health Resources and Services Administrations ongoing efforts to safeguard the integrity of the 340B program. However, based on extensive feedback from hospitals, community health centers, and other stakeholdersas well as operational insights from across the TPA and vendor ecosystemwe believe the proposed rebate model raises serious risks to the statutory framework of the 340B program, as well as to the financial stability and operational feasibility of safety-net providers who rely on it. I. Key Concerns with the Rebate Model Cash Flow Disruption The requirement to purchase drugs at Wholesale Acquisition Cost (WAC) and await retrospective rebates places undue strain on covered entities. Health Centers and rural covered entities including critical access hospitals, already operating on thin margins, are particularly vulnerable to liquidity challenges under this model. From an operational standpoint, TPAs and vendors consistently note that rebate timing variability introduces significant uncertainty into financial forecasting, effectively shifting 340B from a point-of-sale savings model to a reimbursement-dependent financing model. Administrative Burden, Fragmentation, and Lack of Standardization By introducing multiple manufacturer-controlled platforms with inconsistent requirements, the proposed model adds unnecessary complexity and fragmentation. Across the TPA/vendor community, there is broad consensus that the model lacks: Standardized data fields and submission formats Uniform claim identifiers to support traceability Consistent transaction lifecycle definitions Without these foundational standards, covered entities and their partners will be forced to build and maintain duplicative, manufacturer-specific workflows, materially increasing administrative burden and risk of noncompliance. Reconciliation Complexity and System Readiness The rebate model introduces a fundamentally new operational paradigm requiring reconciliation across multiple independent data streams, including: Pharmacy & medical claims Wholesaler purchase data Manufacturer rebate determinations TPAs and technology vendors uniformly emphasized that current 340B infrastructure is not designed to support this level of multi-party, claim-level reconciliation at scale. Absent a centralized framework, this creates a high likelihood of mismatches, delays, and unrecoverable financial discrepancies. Rebate Denials and Lack of Resolution Process The current framework provides no clear guarantee of timely rebate payment nor a robust, enforceable process for dispute resolution. From an operational perspective, TPAs are likely to be positioned as de facto intermediaries in dispute management without defined authority, standardized workflows, or service-level expectations. The absence of: Defined denial criteria Standardized Good Faith Inquiry (GFI) processes Enforceable timelines for resolution creates significant financial exposure for covered entities and operational ambiguity across all stakeholders. Dependency on Manufacturer-Controlled Platforms The proposed model relies heavily on manufacturer-designated platforms, many of which lack: Interoperability with existing TPA systems Standardized APIs or data exchange protocols Real-time visibility into rebate status This fragmented, manufacturer-centric approach introduces scalability challenges and risks disintermediation of neutral administrative oversight, while simultaneously increasing the operational burden on providers and their partners. CMS MTF Operational Challenges Improved coordination between Centers for Medicare & Medicaid Services and Health Resources and Services Administration is critical to the success of any rebate model. Pillr Health is a certified CMS Medicare Transaction Facilitator (MTF) Third Party Support Entity (TPSE) in a remit-only capacity. However, the CMS-MTF framework currently limits dispensing entities to selecting only one (1) remit-only TPSE. This restriction creates a significant operational barrier, as it prevents dispensing entities from connecting to multiple TPSEs, including Pillr Health. Without appropriate connectivity and access to key financial dataparticularly the 835 remittance filesTPAs are unable to effectively support covered entities and dispensing entities in managing rebate reconciliation, denial tracking, and IRA-related workflows. This limitation materially constrains the ability to operationalize the rebate model and introduces fragmentation between CMS and HRSA program administration that must be addressed. Standardization of Rebate Model Parameters Across Manufacturers A consistent theme across TPA and vendor feedback is the need for strict standardization of rebate model parameters. Manufacturers should be required to follow uniform procedures to ensure operational feasibility and equitable treatment of covered entities. In the previously proposed rebate pilot scheduled for January 1, 2026, significant variability was observed across participating manufacturers policies (as published through Beacon and related communications), including: Carryover Package Limits per NDC: Some manufacturers limited carryover to one package, while others did not define limits Claim Carryover Lookback Timeframes: Ranged from as short as 14 days to as long as a full quarter (Q4 2025) Claim Carryover Submission Windows: Often undefined or inconsistently applied Additional Carryover Policies: Frequently discretionary and determined on a case- by-case basis Post-Go-Live WAC Treatment for Pre-Go-Live Claims: Only explicitly defined by a single manufacturer These inconsistencies create significant operational challenges, increase administrative burden, and will inevitably result in lost 340B savings for covered entities due to missed eligibility windows and misaligned requirements. To ensure fairness and feasibility, HRSA should define and enforce standardized parameters across all manufacturers. At a minimum, the rebate model should include a transitional period allowing unreplenished claims from the prior quarter to be eligible within the rebate framework. Data Privacy and Security Risks Requiring patient-level claims data submission to manufacturer-affiliated platforms raises significant HIPAA and compliance concerns. It also introduces conflicts of interest by placing sensitive data into systems operated by commercial stakeholders with direct financial incentives tied to rebate determinations. Departure from Statutory Intent Since 1992, the 340B statute has required manufacturers to provide drugs at or below the ceiling price at the point of sale. The rebate model deviates from this long-standing statutory framework and introduces retrospective mechanics not authorized by Congress. II. The Role of Third-Party Administrators As neutral administrators, TPAs play a critical role in enabling compliant and efficient 340B program operations. The feedback across the vendor ecosystem consistently points to the need for a centralized coordination layer to support the rebate model, should it proceed. Pillr Health is uniquely positioned to mitigate many of these risks while supporting program transparency and compliance: Centralized Data Management: Standardizing data intake, normalization, and reconciliation across manufacturers and trading partners End-to-End Reconciliation Capabilities: Aligning claims, purchases, and rebate determinations to ensure accuracy and traceability Audit and Compliance Safeguards: Maintaining detailed audit trails and documentation to support oversight and program integrity Cash Flow Visibility and Forecasting: Integrating rebate accruals and payment timelines into financial modeling for covered entities Neutral Technology Infrastructure: Providing HIPAA-compliant, vendor-agnostic platforms independent of manufacturer control Structured Dispute Management: Supporting standardized workflows, documentation, and escalation processes for rebate disputes Importantly, TPAs are positioned to serve as a neutral interoperability layer, reducing fragmentation and enabling consistent application of program rules across stakeholders. III. Recommendations to HRSA To reduce risks and better align the pilot with program intent, we respectfully recommend that HRSA: 1. Establish a Standardized National Data Framework Define required data elements, formats, and transaction protocols (e.g., claims, rebate responses, and reconciliation files) to ensure consistency across all manufacturers and platforms. 2. Affirm Neutral Clearinghouse Principles Recognize TPAs or a HRSA-administered platform as the central hub for submission, reconciliation, and reporting to eliminate fragmentation and ensure consistent oversight. 3. Require Manufacturer Funding of Administrative Costs Ensure manufacturers bear the full cost of rebate implementation, including infrastructure, integration, staffing, and reconciliation. 4. Mandate Timely Rebate Payment with Enforceable Standards Establish clear payment timelines, require interest accrual on delayed payments, and authorize civil monetary penalties for repeated noncompliance. 5. Establish a Standardized Dispute Resolution Framework Create a HRSA-administered process with: Defined denial criteria Standardized Good Faith Inquiry workflows Mandatory service-level agreements (SLAs) 6. Require Interoperability and Open Access Standards Mandate that all manufacturer platforms support standardized APIs and data exchange protocols to ensure integration with TPAs and provider systems. 7. Protect Data Privacy and Limit Manufacturer Data Control Prohibit manufacturer-owned platforms from serving as primary data aggregation points and restrict data use strictly to rebate processing functions. 8. Implement a Phased Pilot Approach Limit initial scope (e.g., by manufacturer or drug class) and require testing and certification of all participants prior to broader implementation. IV. Conclusion The 340B program has, for over 30 years, provided critical support to safety-net providers serving vulnerable patient populations. The rebate model pilot, as proposed, introduces significant financial, administrative, and operational risks that fundamentally conflict with both the programs statutory framework and current infrastructure capabilities. Feedback from across the TPA and vendor ecosystem consistently demonstrates that the model, in its current form, lacks the standardization, interoperability, and governance necessary for successful implementation at scale. Pillr Health remains committed to supporting Health Resources and Services Administration in protecting program integrity while ensuring providers retain the resources needed to care for underserved communities. We urge HRSA to reconsider the structure of the rebate model and incorporate the necessary operational safeguards before any implementation. We thank you for the opportunity to comment and stand ready to assist HRSA in advancing a fair, compliant, and sustainable 340B program. Respectfully submitted, Casey Nelson, Pharm.D. Chief Pharmacy Officer Pillr Health
HRSA-2026-0001-2320TrueCare2026-04-20T04:00Z44,963 chars
See attached file(s) PATIENT .CEN1E4ED MENEM HOME -111111Pr- trueeaufew April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of TrueCare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and fmancial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: TrueCare anticipates a major loss from entity-owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. TrueCare is a designated Federally-Qualified Health Center (FQHC) serving over 68,000 patients in San Diego and Riverside Counties, regardless of ability to pay. Our organization provides comprehensive, skilled, and compassionate primary care to underserved patients across the region. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. Corporate Office: 150 Valpreda Road, San Marcos, CA 92069 I T (760) 736-6700 I F (760) 736-6753 Patient Navigation Center: T (760) 736-6767 I F (760) 566-1501 I Website: truecare.org The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For TrueCare in particular, current 340B revenue is used to expand access to care, fund enabling and clinical services, offset uncompensated care costs, and improve medication access and adherence programs. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. The proposed model would create immediate barriers to accessing medications by eliminating point-of-sale affordability. As a result, patients may experience delays in therapy initiation or continuation, providers may be forced to alter treatment plans based on cost rather than clinical need, and medication abandonment may, increase, particularly among already vulnerable populations. Chronic disease managementincluding 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of comrnunity health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 diabetes, cardiovascular conditions, and behavioral healthwould be especially affected. Loss of access to high-cost therapies could lead to increased hospitalizations and poorer health outcomes. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis8 are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar CD is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo8 achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb IIaemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. litips,;//www.andpurnals.org/doVpsi I/ I 0.1.161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUII Series II-60). Center for Behavioral FIealth Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.santhsa.govklataklata-we-collectinsduh-nat ion al-su rveyclrug-use-ancl-heal th/nat ional-re leases 5 Hauser RA, et al, Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMC[D: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: TrueCare provided $8,703,657 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: TrueCare anticipates needing at least two additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, TrueCare anticipates an $85,000 increase in costs for external support vendors, such as 340B consultants, legal counsel, program coordination, and third-party administrators (TPAs), as well as for electronic medical records, pharmacy software, and reconciliation services. 4 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CFICs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments and following up on disputes. Significant additional dedicated staff time across teams will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. TrueCare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Partv Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, design new internal workflows, facilitate staff training time and change management, and invest in initial vendor setup, requiring additional costs simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. TrueCare anticipates increased costs related to additional staffing for reconciliation and oversight, compliance and audit support, developing and obtaining necessary reporting and analytics tools, and extended IT support and system maintenance. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 68,069 patients, the total projected increase in expenses would include additional labor, IT, and carrying costs annually. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharrnacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. This will require accurate, real-time data tracking, ongoing reconciliation between dispensing and purchasing, and internal validation of rebate payments. Without a TPA buffer, this work will sit with internal teams, increasing both IT lift and day-to-day operational workload. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to divert clinical hours towards manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. TrueCare currently partners with 50 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 50 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in San Diego and Riverside Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021." Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software." Bundled Payments: The rnajority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because 9 Vulnerability Index Approach lo Identi ry Pharmacy Deserts and Keystone Pharmacies Pharmac and Clinical Pharmacology I JAMA Network. Open J JAMA Network 1 https://www.healthafrairs.ora/doi/abs/ 0.1377/hlthaff.2024.00 92?ioumalCode=h hair 11 Internal NACHC survey data 6 PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee 7 discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CFIC can adjust the cost of health care services, including medications, based on a patient's income and family size. For the patients our organization serves many of whom live at or below the poverty line the difference between a discounted price and full price at the pharmacy counter is often the difference between filling a prescription and going without. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. hups://blth c.hrsa.nov/complianeekompli Ellice- manual/chapter9tifootnotel0 141thps://enlivenhealth.co/blon7year-encl-business-ltealth-elleck-key-metrics-everv-phartnacv-owner-should-review 8 margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340BI5 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $1,284,074 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $95,704 to purchase these same drugs at the 340B ceiling price. This represents an 835% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TrueCare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our medication assistance programs and HIV-related services. 15 ham://3401vricing.hrsa.eov/ 16 hups://wkw.m1s.gov/files/zip/selected-drugHist-negotiated: piiices-also-known-maximum-fair-prices-statutezik4 9 Operating Hours: We anticipate needing to reduce our clinic hours per week, specifically impacting our evening and weekend hours, which are the only times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund direct patient care. This shifts resources from care delivery into administrative work, directly increasing patient access and wait times. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 8,308 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. TrueCare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model creates immediate cash flow pressure and threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, TrueCare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,384,451. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. TrueCare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $99,031. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate rnodel, our 10 organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $19,261 annuallyfunds that are currently dedicated to our food distributions to food insecure populations, care coordination, and youth health education programs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on TrueCare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays TrueCare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national "Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) h nps://ww w. federalrevistengov/documems/2025/08/01/2025-14619/340h-program-notice-appl ication-process- for-the-3406- relmie-tnodet- )ilot-proaram 11 standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 12 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion TrueCare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. TrueCare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. TrueCare appreciates the opportunity to respond to this Request for Information on the 340B 13 Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Anthony White, Vice President of Government & Community Affairs at Anthony. White0 ruec are.org. Sincerely, Michelle D. Gonzalez, MPA President & CEO TrueCare ii) Hert44, onside Welcome on truecare-
HRSA-2026-0001-2321Neighborhood Health Clinics, Inc.2026-04-20T04:00Z45,140 chars
Response to FR Doc # 2026-03042 1 April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Health Clinics, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000 to $3 million from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant operational costs increases. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural- specific infrastructure, such as mobile clinics and telehealth. Neighborhood Health Clinics, Inc. (NHC) is a Federally Qualified Health Center serving Northeast Indiana for over 55 years whose mission is to ensure access to comprehensive, high- quality healthcare regardless of income or insurance status. Neighborhood Health is the only FQHC in the region that offers a comprehensive, integrated care model under one roof, including primary medical care, dental, behavioral health, chiropractic, vision, onsite retail pharmacy, nutrition services, and other wraparound services. 1717 S Calhoun Street, Fort Wayne, IN 46802 phone 260-458-2641 PO Box 11949, Fort Wayne, IN 46862 fax 260-458-3093 mynhfw.org 2 Today, NHC operates four clinic locations in Allen County and serves more than 25,000 patients annually, serving approximately 1 in 10 Fort Wayne residents. NH operates under a sliding fee scale and serves a low-income population, with 88% of patients classified as low-income and more than half living below the federal poverty level. I.We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. As NHs current PPS rate does not cover the actual cost of providing care and cash reserves are not available to purchase all drugs at full price, we will be forced to make difficult decisions on what drugs and services we can sustain. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II.Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like 3 diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Furthermore, as a CHC, we provide all eligible patients with a Sliding Fee Scale for their medications at a discounted rate outside of the mandated insulins. According to 2025 data, of the total claims for the MDPNP that would have been impacted, 34% were uninsured patients. Again, in the proposed model, there is no way for the CHC to pass the 340B price to these patients without significant manual administrative burden due to operational insufficiencies in the system. 4 By offering upfront patient discounts, we help prevent avoidable hospitalizations. Numerous patient experiences demonstrate this impact, including one particularly illustrative case involving an uninsured patient diagnosed with a deep vein thrombosis (DVT) in the outpatient setting. Immediate anticoagulation therapy was clinically necessary; however, the standard outpatient treatmentsXarelto and Eliquiswere prohibitively expensive without insurance coverage, which this patient did not have. As a result, the provider was preparing to refer the patient to the emergency department for initiation of therapy. Instead, the provider consulted our in-house pharmacy to explore alternative options. Through this collaboration, we were able to secure the required anticoagulation therapy for the patient due at an affordable price the same day due to the upfront discounts that the current 340B program is structured. This allowed the patient to receive timely treatment and avoid hospitalization. With the implementation of the 340B rebate program, it is unclear on our ability to keep these types of patients out of the emergency room as current structure will not allow for appropriate upfront discounts. The potential denied claims provide potential risk for the CHC that may not be able to take on for those without insurance. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III.Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Like navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discounts: NHC provides $3.6 million in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: NHC anticipates needing additional 1-2 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, NHC anticipates an increase of approximately $100,000 annually for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 NHC anticipates that implementation of a 340B rebate model would require an additional 12 full-time equivalents (FTEs) over the next one to two years to manage the increased operational and data-submission complexity. Even under the current state, significant administrative burden already exists related to claim submissions for 340B contract pharmacies. Manufacturers frequently impose pricing or claim blocks, often despite programs being operated compliantly, and resolution of these issues can take months. These delays disrupt cash flow, increase staff time dedicated to troubleshooting, and introduce ongoing uncertainty into program operations. Additionally, substantial manual intervention is often required to reconcile and adjust claims data to ensure proper formatting and compliance with manufacturer requirements within the 340B ESP portal. These manual corrections increase the risk of errors, slow submission timelines, and place additional strain on pharmacy and compliance teams. Given these existing challenges, it is reasonable to anticipate that similaror potentially heighteneddata integrity, submission, and reconciliation issues would arise under a 340B rebate model, further compounding administrative workload and resource needs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying 6 costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For NHC, in the first year, it is anticipated the increased upfront drug cost will be approximately 1.1 million and will increase to 2.4 million with the potential rebated drugs in year 2028 increasing our inventorial expenditure by 23000%. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. NHC estimates the administrative burden to be approximately 10 hours / month to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. NHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Also, if manufacturers can select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase greatly. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. NHC estimates it will cost approximately $5,000 simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in- house pharmacy systems will require costly customization to provide real- time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Integration Costs: We anticipate high costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend at least 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B 7 price. This takes valuable time away from direct patient care to manage administrative work that will not improve patient outcomes. These are currently potentially catastrophic hidden costs to CHCs for the implementation of 340B Rebate model and are at the detriment of the patients and the CHCs infrastructure. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. NHC currently partners with 72 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across all contract pharmacies that dispense medications included in the 340B rebate program to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Allen County, IN particularly the undeserved area of southeast Fort Wayne with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D 8 claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For patients who qualify under the sliding fee schedule, medications are dispensed at the 340B acquisition cost plus a nominal dispensing fee. This approach has significantly improved access to medications that were previously unaffordable for many patients, serving as a critical, and often lifesaving, access point to therapy. Patients most impacted by this benefit are those managing high-risk and chronic disease states, including diabetes mellitus, asthma, chronic obstructive pulmonary disease (COPD), and conditions requiring anticoagulation. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting 9 their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2- week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time limit of 40 to 55 days. As a community health center (CHC) operating two in-house pharmacies that both utilize a physical inventory model, implementation will require an increase in 45-day cash on hand. This increase is estimated at $150,000 with the inclusion of MFP drugs in 2026, rising to as much as $300,000 once the full scope of MFP drugs is incorporated in 2028. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day time limit for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 10 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1.2 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $170,000 to purchase these same drugs at the 340B ceiling price. This represents a 60400% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, NHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back essential services, such as behavioral health, dental, and clinical pharmacists. Operating Hours: We may need to reduce our clinic hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker to support quality improvement, health outcome initiatives. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 5,822 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 11 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. NHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high- risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to tap into its line of credit, which is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates clinical instability. In our region, where patients have no choice but to rely on NHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays NHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative of 10% denial rate would result in a net annual loss of $115,000. This is a sum our CHC cannot absorb, as it represents a direct extraction 12 of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion- dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV.Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operates under uniform national standards that limit manufacturer's discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V.Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. 13 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI.Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day time limit. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to prevent duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is 14 not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion NHC urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. NHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. NHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dr. Andrea Mekonnen, Senior Director of Pharmacy Services. Sincerely, Angie Hannon Neighborhood Health Clinics, Inc.
HRSA-2026-0001-2322West Virginia Primary Care Association2026-04-20T04:00Z21,288 chars
See attached file. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the West Virginias 33 Community Health Centers (CHCs) and the over 580,000 patients they serve, the West Virginia Primary Care Association (WVPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC- specific data in response to questions raised in the RFI. Summary of Recommendations: In short, WVPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. Summary of Comments: In these comments, WVPCA explains: A. The importance of 340B savings to Werst Virginia CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their low-income and uninsured patients. Currently, 83% of CHC patients identify as low income. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in West Virginia, CHCs routinely rely on 340B savings to support services such as: clinical pharmacy; school-based health services (medical and behavioral health); satellite locations of the health center in rural areas; food access programs (including for the elderly); dental care; care coordination and case management. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by West Virginias CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of other pharmacy-related discounts: The rebate pilot will cause CHCs to lose non- 340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as CHCs will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings (as described in Section A.) Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, it is not surprising that heath centers have developed mitigation strategies to ensure their core services can be maintained: evaluating rural location closures (fixed costs with low census- being provided to give access to care to remote regions); reduction in school-based health services and locations; reduction in dental services/locations; food access programs; etc. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: All of categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) To assist HRSA in establishing this system, the Attachment lists some categories of costs that CHCs will incur in administering the rebate pilot. We hope you will find this list helpful in establishing the system to ensure that manufacturers reimburse CHCs fully, promptly, and transparently for these costs. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact me at sherri@wvpca.org. Respectfully, Sherri P. Ferrell, President & CEO West Virginia Primary Care Association Attachment Costs incurred by CHCs as a direct result of the rebate pilot which the Summer 2025 FRN said should be borne by the manufacturer. Time and effort from CHCs pharmacy staff, including for: Preparing and submitting rebate requests. Monitoring which requests were paid. Disputing denials. Explaining to patients why their drugs discounted price has changed. For all drugs subject to Medicaid Actual Acquisition Cost (AAC) billing, manually revising claims before they are sent to the state, and replacing the WAC price (that their IT system automatically entered) with the 340B price. Explaining the new rules to contract pharmacies, and ensuring their compliance. (This may also lead to higher fees from contract pharmacies.) IT upgrades needed to comply with the new reporting requirements. Direct financial losses. Loss of sub-ceiling discounts on pilot drugs (estimated at 10% - 15% of 340B price) Loss of prompt payment discounts on all drug purchases (not just rebate drugs), which range from 1% to 5% of 340B purchase price. Loss of other discounts, including volume discounts and Cost of Goods Sold discounts. Interest paid on loans (from wholesaler or other creditors.) Time and effort from CHCs financial staff, including for: Evaluating cash flow needs and seeking credit options. Tracking how much rebate funding has been received, and therefore how much of the loan they can pay off. Tracking and documenting the CHCs costs to implement the pilot; billing manufacturers for these costs; tracking payments from manufacturers. Working with state Medicaid agencies to determine how to bill for 340B drugs.
HRSA-2026-0001-2323Boehringer Ingelheim2026-04-20T04:00Z65,063 chars
See attached file(s) Life forward Date April 20, 2026 Page 1 Re: Request for Information: 340B Rebate Model Pilot Program Docket No. HRSA-2026-03042 Dear Administrator Engels: Boehringer Ingelheim Pharmaceuticals, Inc. (Boehringer) welcomes the opportunity to provide the following comments in response to the Health Resources and Services Administrations (HRSAs) Request for Information to gather input from interested parties regarding the potential use of rebates to effectuate the ceiling price under the 340B Program. See 91 Fed. Reg. 7,287 (Feb. 17, 2026). Boehringer is a leading research-driven biopharmaceutical company committed to innovation in areas of high unmet medical need. Accordingly, Boehringer has a significant interest in the effective administration of the 340B Drug Pricing Program. Moreover, as the manufacturer of JARDIANCE, OFEV, and TRADJENTA, drugs selected for the Inflation Reduction Act (IRA) Medicare Drug Price Negotiation Program (the IRA Program), Boehringer is acutely aware of the critical role a 340B Rebate Model will play in the proper administration of both the IRA and 340B Programs. Boehringer thanks HRSA for its continued efforts to implement a 340B Rebate Model. A 340B Rebate Model is critical to ensure nonduplication of the maximum fair price (MFP) set under the IRA Program and the 340B ceiling price in an accurate manner, consistent with the requirements of Boehringer Ingelheim USA Corporation 900 Ridgebury Road Ridgefield CT 06877 Via Regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 2 Life forward section 1193(d)(1) of the Social Security Act. A 340B Rebate Model would also improve program integrity. Boehringer strongly supports the creation of a 340B Rebate Model for four reasons: (1) a 340B Rebate Model is the only accurate method to prevent duplicate 340B and MFP discounts; (2) in the absence of a 340B Rebate Model, Boehringer is bearing untenable costs of over $5 million dollars weekly in duplicate discounts to comply with the pricing requirements of both the 340B and IRA Programs; (3) the alleged harms of a 340B Rebate Model to covered entities are greatly exaggerated and do not outweigh the clear benefits of the 340B Rebate Model; and (4) a 340B Rebate Model would have significant benefits for 340B Program integrity, ensuring the long-term viability of the 340B Program. For these reasons, Boehringer urges HRSA to approve a 340B Rebate Model for its JARDIANCE drug product. Additionally, Boehringer urges HRSA to move quickly to approve a 340B Rebate Model for drug products selected for both Initial Price Applicability Year (IPAY) 2026 and IPAY 2027. Once drugs selected for the IRA Program are covered by a 340B Rebate Model, HRSA should then broaden the model to all 340B products to improve the overall integrity of the 340B Program. I. A 340B Rebate Model Is Necessary for Manufacturers to Avoid Paying Duplicate 340B and MFP Discounts. A. The IRA expressly provides that manufacturers of selected drugs are not required to provide access to the 340B ceiling price and the MFP. A covered entity is eligible for the 340B discount when a qualifying patient fills a prescription at an in-house pharmacy or associated contract pharmacy. Under prevailing practices, the patient, dispensing entity, manufacturer, and covered entity cannot know at the point of sale whether a given product will be dispensed to a 340B-eligible patient. It is generally not until a third-party administrator (TPA) hired by the covered entity untangles a complicated web of data flows that a claim is identified as 340B- eligible. It would be easiest for the 340B discount to be issued after a 340B- eligible claim is identified. However, due to the history and evolution of the 340B Program, access to the 340B price has morphed into intricate inventory management systems that require complex data analysis to effectuate.1 ______________________________________ 1 When the 340B Program first began in 1992, self-administered 340B-discounted drugs could only be dispensed through in-house pharmacies. Because fewer than 5% of covered entities had such in-house pharmacies, HRSA expanded the program to allow covered entities to utilize contract pharmacies. See Karen Mulligan, The 340B Drug Pricing Program: Background, Ongoing Challenges, and Recent Developments at 1 (Oct. 2021). But contract pharmacies serve both 340B patients and non-340B patients. Consequently, covered entities developed new methods to access the 340B price for eligible dispenses. One such method, used by most covered entities today, is the replenishment model. See Rory Martin and Kepler Illich, Are Discounts in the 340B Drug Discount Program Being Shared with Patients at Contract Pharmacies? at 6 (Most contract pharmacies use a replenishment model in which claims are filled with neutral inventory, and the covered entity selects the 3 Life forward The IRA added yet another complicated layer to this framework. Under the IRA, manufacturers such as Boehringer are required to provide Medicare beneficiaries access to their selected drugs at a highly discounted maximum fair price prescribed by the Centers for Medicare and Medicaid Services (CMS). See 42 U.S.C. 1320f-2(a). Recognizing the potential overlap between the IRA and 340B Programs, Congress included a provision in the IRA expressly providing that a manufacturer subject to both the IRA and 340B Programs shall not be required to provide both the MFP and 340B discounts. 42 U.S.C. 1320f-2(d). The IRA has made the process of providing up-front access to the 340B ceiling price to covered entities unworkable. Due to the challenges of providing access to the MFP prospectively (discussed further below), manufacturers of selected drugs, including Boehringer, must provide the MFP through retrospective refunds, as permitted by CMS. See CMS, IPAY 2027 Final Guidance 196. This creates tension with the 340B Program as currently administered: currently, when a dispensing entity submits a claim requesting a refund to account for the MFP, manufacturers have no way of knowing whether the particular unit was purchased at the 340B ceiling price. Absent this information, manufacturers are effectively required to issue both the prospective 340B discount and the retrospective MFP refund, in contravention of the IRAs nonduplication directive. To give effect to the IRAs statutory command, HRSA authorized a proposed 340B Rebate Model Pilot Program (Pilot Program) in August 2025 that would have permitted manufacturers of IRA selected drugs to provide access to the 340B ceiling price through a retrospective rebate. See 90 Fed. Reg. 36,163 (Aug. 1, 2025). Under the Pilot Program, manufacturers of IRA selected drugs would have been able to identify which of the 340B ceiling price or the MFP a given dispense was eligible for and to provide the proper price through retrospective rebates. Covered entities would have been required to provide modest claims datawhich they already collect and retainto manufacturers to allow them to identify 340B-eligible claims. Although Boehringer and other manufacturers of selected drugs applied for and received approval to participate in the Pilot Program, a federal court enjoined the model on a preliminary review with hours to go before the first MFPs took effect. See American Hospital Association v. Kennedy, No. 25- cv-00600, 2025 WL 3754193 (D. Me. Dec. 29, 2025). Importantly, the court did not question whether the 340B Rebate Model was substantively lawful but concluded only that it was likely that HRSA had not adequately explained its decision to enact the Pilot Program. HRSA thereafter agreed to vacatur of the order approving the Pilot Program in light of the courts ruling. Thus, under the current regime, Boehringer is effectively required to provide both the 340B ceiling price and MFP refund, in contravention of the IRAs nonduplication provision, and may be required to sell drug products at a loss. ______________________________________ ones to convert to 340B after the claims are filled.). Under the replenishment model, a covered entity will accumulate all 340B eligible dispenses across its in-house and contract pharmacies through its TPA. The covered entity will then place a replenishment order supposedly equal to the amount of product dispensed to eligible patients at the 340B price. 4 Life forward In guidance, CMS affirmatively disclaimed responsibility for deduplicating MFP and 340B claims, placing the deduplication burden squarely on manufacturers. See CMS, IPAY 2027 Final Guidance 54 (CMS and the [Medicare Transaction Facilitator Data Module] will not assume responsibility for deduplicating discounts between the 340B ceiling price and MFP.). But, without a 340B Rebate Model, manufacturers are not able to detect and account for all duplicate 340B and MFP claims, as discussed below. As a result, manufacturers of selected drugs are effectively required to provide both the 340B ceiling price and MFP refunds for certain claims the very outcome that the IRA seeks to avoid. Accordingly, to comply with the statute, manufacturers must be allowed to take remedial steps to avoid duplicate discounts. The 340B Rebate Model remains the best solution to resolve the problem of duplicate MFP and 340B discounts and is necessary to effectuate the IRAs nonduplication provisions. B. Following the withdrawal of HRSAs original 340B Rebate Model Pilot Program, manufacturers do not have adequate information to prevent duplicate 340B/MFP discounts. HRSAs initial Pilot Program was enjoined with hours to go before the MFPs of the first selected drugs took effect. Manufacturers were thus forced to rush to implement new, less effective 340B/MFP deduplication strategies. In other words, Boehringer has been obligated to develop an alternative process to try to identify MFP refund claims that it reasonably believes were dispensed using drugs purchased subject to the 340B Program. See CMS, IPAY 2027 Final Guidance 284. However, due to the structure of the 340B Program, Boehringer does not have sufficient information to identify whether many specific MFP claims overlap with 340B claims. Boehringers current process is therefore nowhere near as effective as a 340B Rebate Model, and Boehringer is losing millions of dollars every week to duplicate discounts as a result. Without a 340B Rebate Model, Boehringers efforts to avoid duplicating the 340B ceiling price and MFP rely on two primary components. First, Boehringer receives claims data for a small fraction of 340B dispenses, namely dispenses from contract pharmacies in states that allow claims-data requirements and from the rare covered entities that voluntarily submit data to Boehringer (e.g., through voluntary claims modifiers).2 In these cases, ______________________________________ 2 Certain states have passed laws purporting to prohibit manufacturers from collecting claims data from contract pharmacies or prevent the use of a 340B Rebate Model entirely, further complicating Boehringers efforts to address duplicate discounts. See, e.g., R.I. Gen. Laws 5-19.3-3(a)(7) (prohibiting manufacturer from [r]equir[ing] submission of claims-level data or documentation that identifies 340B drugs as a condition of reimbursement or pricing, unless it is required by the Centers for Medicare and Medicaid Services.). As the federal government has argued in recent amicus briefs, these state laws violate the Supremacy Clause of the United States Constitution because they impose additional conditions and burdens on participation in a federal program and disincentivize manufacturer participation in Medicare and Medicaid. See, e.g., Brief for the United States as Amicus Curiae in Support of Appellant, Pharm. Rsch. & Mfrs. of Am. v. Neronha, No. 26-1039 (1st Cir. Feb. 25, 5 Life forward Boehringer can directly match and deduplicate MFP claims and 340B claims. However, this claims data is available for only a subset of dispensing entities. In fact, with respect to voluntary claims modifiers, an analysis from Berkeley Research Group (BRG) concluded that modifiers were included in less than .5% of all MFP rebate claims. Many covered entitiesincluding all those that distribute 340B drugs through an in-house pharmacies and many that rely on contract pharmaciesare not required to provide (and in fact do not provide) Boehringer the relevant claims data. Only 1% of all MFP rebate claims include 340B claims data submitted by covered entities. For claims submitted by these covered entities, Boehringer applies its second approach: a chargeback-to-sales (CSR) ratio. Under this approach, Boehringer calculates a ratio equivalent to the proportion of the covered entitys total purchases made at the 340B price over the covered entitys total purchases for the preceding 12 months. Boehringer then pays MFP refunds to dispensing entities at least proportionate to their unique ratio. For example, if 90% of a covered entitys drug purchases were made at the 340B price over the preceding 12-month period, Boehringer would assign a CSR ratio of 9:1. Once the dispensing entity associated with the covered entity submits MFP refund claims, Boehringer will provide the MFP refund for the first claim and not provide the MFP refund for the subsequent nine claims, repeating this process to maintain the 9:1 ratio. Although these methods help address duplicate 340B/MFP discounts, they cannot identify specific 340B claims. In particular, Boehringer has no way of identifying whether a claim dispensed by a covered entity that does not share claims data was dispensed to a 340B patient. Due to these discrepancies, Boehringer is paying many duplicate discounts. According to BRG, across all IPAY 2026 selected drugs, manufacturers have identified roughly 6.6% of MFP rebate claims as duplicative with 340B discounts compared to roughly 10.6% of sales that are made at the 340B price for these products. And even though these imperfect deduplications result in the payment of vast duplicate discounts, covered entities have nevertheless complained about these deduplication methods: Boehringer has received 1,718 inquiries and 89 complaints from dispensing entities alleging that Boehringer has failed to pay the MFP refund due to the companys deduplication methodologies. Because Boehringers deduplication methodologies cannot accurately identify all duplicate discount requests, the company is effectively required to provide duplicate MFP and 340B discounts, in contravention of 42 U.S.C. 1320f-2(d)(1). A 340B Rebate Model is necessary to comply with the ______________________________________ 2026). Some states have gone further and prohibit manufacturers from offer[ing] or otherwise mak[ing] available 340B drug pricing in the form of a rebate. E.g., Vt. Stat. Ann. tit. 18 4682. These state statutes are preempted by federal law because they directly conflict with the 340B statute, which grants discretion to the Secretary to authorize manufacturers to provide the 340B discount rate through a rebate. 42 U.S.C. 256b(a)(1). Consistent with the federal governments position, Boehringer urges CMS to state that, by approving a 340B Rebate Model, the federal government is preempting any state law purporting to directly or indirectly limit manufacturers ability to use such a model, including by purporting to prohibit the collection of claims data. 6 Life forward IRAs nonduplication directive and to allow Boehringer to identify and deduplicate MFP and 340B claims. C. Despite claims to the contrary from covered entities, no alternative deduplication method can ensure that manufacturers do not pay duplicate 340B/MFP discounts. Covered entities have argued that a 340B Rebate Model is not necessary because manufacturers can use alternative methods to prevent duplicate discounts. None of the alternatives identified by covered entities would effectively prevent duplicate discounts. In the Pilot Program litigation, covered entity plaintiffs identified two alternative methods they claimed would avoid duplicate discounts: a 340B claims repository and manufacturers providing access to the MFP prospectively. Neither is adequate. First, there is currently no mandatory 340B claims clearinghouse or repository. Although CMS has proposed to create a voluntary claims repository as part of the 2026 Physician Fee Schedule, this voluntary system will not be in effect until Fall 2026 at the earliest. See 90 Fed. Reg. 49,266, 49,754 (Nov. 5, 2025) (explaining that CMS expected the Medicare Part D claims data 340B repository to launch in Fall 2026.). Once this voluntary claims repository is in effect, there is no mechanism to require that covered entities submit 340B claims data or ensure that all 340B claims have been submitted. Indeed, the voluntary claims repository will be functionally similar to the voluntary 340B Claim Indicator that covered entities can, but seldom do, include in their Medicare Transaction Facilitator data submissions. Although CMS may be able to create a mandatory claims repository in the long run, it is not clear (1) how such a mandatory claims repository would work, (2) how long the agency would take to implement this new repository through rulemaking and to build an operationally effective repository, and (3) that the alleged data reporting burden on covered entities would be any different than in a 340B Rebate Model. Indeed, covered entities would likely have to submit similar information to a repository as they would to manufacturers under a 340B Rebate Model. For CMSs proposed voluntary 340B claims repository, for example, covered entities are instructed to submit the claims (1) Date of Service; (2) Prescription or Service Reference Number; (3) Fill Number; (4) Dispensing Pharmacy NPI; (5) NDC-11 (6) 340B ID; and (7) 340B name. See CMS, 340B Repository Data Elements Collection Instructions at 2-3. Pharmacies would submit these exact fields in a 340B Rebate Model, which undercuts their arguments that the 340B Rebate Model would be unduly costly. In any event, a repository covering all 340B claims is not something that manufacturers can establish on their ownmeaning that a repository is not currently an option. Second, it is impossible in almost all cases for manufacturers to provide access to the MFP prospectively. As discussed above, the IRA requires that manufacturers provide the MFP to Medicare beneficiaries only. But 7 Life forward manufacturers have no accurate way of confirming whether a unit of drug that it sells will ultimately be dispensed to a Medicare beneficiary (as opposed to some other type of patient, such as an individual who has private insurance and thus is not eligible for the MFP discount). When a manufacturer sells a drug product to a wholesalerwho, in turn, distributes the product to dispensing entitiesit does so without knowledge of whom the product will be prescribed to and dispensed by. Indeed, the manufacturer may not even know which dispensing entity will receive the product from the wholesaler. As such, providing prospective access to the MFP would require manufacturers to provide the MFP discount for all purchases of IRA selected drugs to all dispensing entities, regardless of MFP eligibility. Because only Medicare beneficiaries are entitled to the MFP, manufacturers would then have to develop a complicated system of claw backs to recoup the difference between the MFP and acquisition cost for all dispenses provided to non-Medicare beneficiaries. Covered entities have not shown how this system would work or that manufacturers have authority to impose it. Moreover, this system would impose overwhelming administrative costs on manufacturers and would impose at least some compliance costs (e.g., tracking and contesting claw backs) on all dispensing entities, including those that are not affiliated with 340B covered entities. For these reasons, this is not a viable alternative. Similarly, covered entities argument that a 340B Rebate Model should apply only to a subset of covered entities is misguided. As previously discussed, absent a 340B Rebate Model, manufacturers are functionally required to provide both the 340B ceiling price and the MFP, in contravention of the IRA. If HRSA carves out certain covered entities from a 340B Rebate Model, the Agency would effectively be requiring manufacturers to continue providing these duplicate discounts to a subset of covered entities. For example, if HRSA exempts certain categories of covered entities from a 340B Rebate Model, Boehringer would face the same difficulties identifying duplicate discounts that it does today effectively forcing the company to provide duplicate discounts to these exempt covered entities in contravention of the IRA. To comply with the IRA and ensure that manufacturers are not required to provide access to both the 340B ceiling price and MFP, HRSA should ensure that a 340B Rebate Model applies to all covered entities. D. A 340B Rebate Model is expressly permitted by the 340B statute. A 340B Rebate Model is lawful and indeed necessary to give effect to the IRAs nonduplication provision. Rebate models are expressly authorized by statute. The 340B statute is explicit that manufacturers may provide the 340B discount rate through either a back-end rebate or a front-end discount. 42 U.S.C. 256b(a)(1) (emphasis added). This clear statutory authorization is reinforced by the legislative record. The House Committee Report accompanying the legislation, for example, contemplates that the 340B price reductions would be implemented . . . either by a point-of- purchase discount, a rebate, or other mechanism. H.R. Rep. No. 102-384(II), at 12. 8 Life forward Recognizing this explicit statutory authorization, both federal courts and HRSA itself have acknowledged that the 340B statute expressly permits the Agency to administer the 340B Program through retrospective rebates. See Eli Lilly and Company v. Kennedy, 2025 WL 1423630, at *11 (D.D.C. 2025) (denying request for a declaration that rebates are categorically prohibited under the 340B statute). Indeed, there is a long history of HRSA effectively administering the 340B Program without issue through retrospective rebates for AIDS Drug Assistance Programs (ADAPs). See 63 Fed. Reg. 35,293 (June 29, 1998) (recognizing a rebate option for State AIDS Drug Assistance Programs (ADAPs) . . . as an optional alternate means of accessing section 340B discount pricing.). And though the Pilot Program was preliminarily enjoined by a federal district court in American Hospital Association v. Kennedy and a court of appeals declined to issue an interim stay, neither court made a final determination on the merits, or even questioned the substantive legality of the Pilot Program. No. 25-cv-00600, 2025 WL 3754193 (D. Me. Dec. 29, 2025); No. 25-2236, 2026 WL 49499 (1st Cir. Jan. 7, 2026). Rather, the district court made a preliminary determination only that HRSA likely had not provided an adequate explanation when it first implemented the Pilot Program, an issue it can readily remedy in a new approval decision. Therefore, a 340B Rebate Model remains the most effective mechanism to effectuate the IRAs directive and is necessary to prevent duplicate discounts. II. In the Absence of a 340B Rebate Model, Boehringer is Facing Untenable Costs to Comply with the Requirements of the 340B Program and IRA. A. Without a 340B Rebate Model, Boehringer is unable to verify which specific MFP refund claims have already been provided a 340B discount and the costs of duplicate discounts already result in significant unavoidable losses. As laid out above, the lack of a 340B Rebate Model leaves Boehringer without an accurate method to identify all specific 340B claims and avoid providing both the 340B ceiling price and MFP for any particular dispense. Rather, Boehringer is forced to rely on incomplete data sets from covered entities and contract pharmacies, many of which refuse to engage in good faith efforts to submit relevant claims data or to self-identify 340B claims. The end result is a massive, and growing, set of financial losses that is actively harming Boehringers business. Every day, thousands of Medicare beneficiaries are dispensed JARDIANCE. Among the ten drugs selected for the IRA Program in 2026, JARDIANCE had the second highest utilization among Medicare beneficiaries. See CMS, Fact Sheet: Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2026 (Aug. 2023) (noting that 1,573,000 Medicare Part D enrollees used the drug from June 2022-May 2023). With this utilization comes a commensurate amount of MFP refund claims, 9 Life forward further increasing the potential for duplicate 340B and MFP discounts. As a result, since the MFP for JARDIANCE took effect on January 1 and until a 340B Rebate Model is implemented, Boehringer is losing $5 million every week to duplicate discounts. Moreover, there is no reasonable method for Boehringer to retrospectively address the duplicate discounts that are currently accruing. For certain MFP refund claims, Boehringer will never receive the 340B claims data necessary to confirm whether an MFP refund should indeed have been provided. Even if a 340B Rebate Model took effect tomorrow, covered entities presumably would not be required to retrospectively submit 340B claims data for the vast majority of dispenses that have occurred since January 1. As a result, Boehringer would have no way to retroactively remedy the duplicate discounts that the company has paid to date cementing the staggering (and growing) costs that Boehringer is incurring. Manufacturers throughout the industry are facing similar costs. Across all 10 selected drugs with MFPs currently in effect, BRG estimates that manufacturers will lose $4 billion in duplicate discounts in 2026 alone. BRG, Implications for Duplication with the 340B Channel 2 (Oct. 2024) (attached hereto as Exhibit 1). This projection is consistent with the losses experienced by manufacturers in the first two months since the MFPs took effect. See 340B Report, 40% of Claims Miss the Mark (Feb. 20, 2026). Boehringer, like other manufacturers of IRA selected drugs, is compelled to provide these duplicate discounts due to the steep penalties associated with noncompliance with either the 340B statute or the IRA. If Boehringer were to fail to provide the 340B ceiling price to an eligible covered entity, it would be subject to potential sanctions in the form of a civil monetary penalty. See 42 U.S.C. 256b(d)(1)(B)(vi) (providing for [t]he imposition of sanctions in the form of civil monetary penalties up to $5,000 for each instance of overcharging a covered entity that may have occurred)3. Worse still, failing to provide access to the MFP can result in a civil monetary penalty equal to ten times the difference between the price paid and the MFP, multiplied by the number of violative units. 42 U.S.C. 1320f-6(a). Taken together, these provisions expose Boehringer to substantial penalties if it inaccurately deduplicates IRA and MFP claims. The company is thus faced with an impossible choice: comply with the IRA and 340B statutes and pay many millions of dollars in duplicate discounts or risk violating the statutes and paying substantial penalties. Clearly, manufacturers need a better option. B. Boehringers duplicate discount costs will increase as two additional productsOFEV and TRADJENTAare slated to be subject to MFPs on January 1, 2027. Two additional Boehringer products, OFEV and TRADJENTA, have been selected for the IRA Program and thus are scheduled to be subject to MFPs ______________________________________ 3 The inflation-adjusted penalty amount is $7,217. See 91 Fed. Reg. 3,665, 3,669 (Jan. 28, 2026). 10 Life forward as of January 1, 2027. CMS, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027 (Nov. 2025). Accordingly, the harm to Boehringer will be compounded if a 340B Rebate Model is not in effect or if it does not cover IPAY 2027 drugs by the MFP effectuation date. Boehringer is the only manufacturer with three IRA drugs as of 2027. Again, the statute guarantees that the company would not be required to pay duplicate 340B/MFP discounts. Absent a 340B Rebate Model, Boehringers losses will accelerate in 2027. In accordance with CMS guidance, Boehringer (and other manufacturers with products subject to MFPs next year) must provide the first part of the companys MFP effectuation plans for IPAY 2027 selected drugs to CMS by June 1a mere two months away. To provide clarity to manufacturers of selected drugs for IPAY 2027, a 340B Rebate Model must be made available as soon as possible to facilitate MFP effectuation preparations, and at minimum before the second MFP effectuation submissions containing 340B deduplication plans are due on September 1, 2026. Otherwise, the uncertainty will impose additional compliance costs on Boehringer and all manufacturers who must invest considerable resources to develop alternative, less effective 340B/MFP deduplication plans including developing bespoke technology solutionsall at great cost to manufacturers. Boehringer urges HRSA to make a decision on the 340B Rebate Model as soon as possible, and in all events before the September 1, 2026 deadline for IPAY 2027 manufacturers to submit MFP effectuation plans with information about planned 340B/MFP deduplication methods. C. HRSA should implement the 340B statute by approving a 340B Rebate Model to avoid an unconstitutional taking. If HRSA and CMS implement the 340B and IRA statutes without providing a reasonable method to deduplicate 340B and MFP discounts, the agencies will effectuate an unconstitutional taking of manufacturers drug products. The IRA expressly states that manufacturers shall not be required to provide duplicate discounts. 42 U.S.C. 1320f-2(d). But without an effective method to deduplicate, manufacturers must provide duplicate discounts on their drug products, which requires them to distribute their drugs at prices well below the market value, even at a loss. See, e.g., IQVIA, Understanding and Tackling the Complexities of 340B Duplicate Discount Scrubbing at 2 (illustrating a typical case of a 340B duplicate discount which results in the manufacturer losing money on a product dispense). HRSA and CMSs implementation thus could amount to tak[ing] of private property . . . for public use, without just compensation. U.S. Const. amend. V; Horne v. Department of Agriculture, 576 U.S. 350, 360 (2015). HRSA should steer clear of this constitutional problem by implementing the 340B statute to provide a method for manufacturers to deduplicate, so as to avoid any taking. 11 Life forward III. Covered Entities are Exaggerating the Costs of Complying with a 340B Rebate Model. Covered entities drastically exaggerate the costs they would incur if HRSA approves a 340B Rebate Model. These alleged costs are dwarfed by the significant (and growing) benefits that covered entities receive from their participation in the 340B Program, and they do not outweigh the benefits of a 340B Rebate Model. Minor costs that marginally reduce the benefits that covered entities receive from the program do not disprove the validity and reasonableness of the 340B Rebate Model. Floating Costs: Covered entities opposing the 340B Rebate Model have suggested that they would have to float cash to manufacturers while waiting for rebates. The 340B Rebate Model would require covered entities to purchase drugs at the wholesale acquisition cost before receiving a rebate, and they argue that this float period could create cash flow concerns for them. These arguments are misguided. In the 340B Rebate Model Pilot Program, HRSA would have required a 10- day window for rebates that would significantly lessen the need for covered entities to float any funds. Boehringer would be willing to apply this requirement to a future 340B Rebate Model. Coupled with standard wholesaler payment terms, these 10-day payment windows should eliminate the float requirement for most covered entities. Standard wholesaler payment terms generally require covered entities to pay for drug purchases within 30 days of purchase. If covered entities submit claims promptly, many entities will therefore receive 340B rebates before wholesaler invoices come due.4 Furthermore, some covered entities voluntarily use a virtual credit modelan inventory model that is materially similar to a 340B Rebate Model. Under the virtual credit model, covered entities pay the wholesale price for drug purchases and receive the value of the 340B discount as an after-the-fact credit in their wholesaler account.5 The practical effect of ______________________________________ 4 While some covered entities have expressed concern regarding rebate denial risk, rebates will not be denied for claims that are eligible, accurately submitted, and received within established timeliness requirements. 5 Under these virtual credit models, covered entities (or their contract pharmacies) purchase all medications at commercial prices and maintain a single inventory, without differentiating between 340B and non-340B products. The covered entity dispenses medications in the ordinary course and then identifies (after the fact) transactions that were eligible for 340B pricing. The covered entity sends that datausually through a third-party administrator to its distributor, which attempts to match the dispenses identified as 340B eligible with prior purchases of the same National Drug Code and quantity. When the distributor successfully makes a match, it (i) credit[s] the [covered entitys] non-340B commercial account for the difference between the commercial and 340B price, and (ii) generates a non-inventory purchase on the 340B covered entity bill-to/ship-to account. See AmerisourceBergen (now Cencora), Inventory Synchronization Program Guide, Doc. No. HS- 110567 at 3. PharmaForce, which offers a variety of 340B services for covered entities and pharmacies, has similarly identified the adoption of credit-based replenishment models as a recent trend in 340B program that eliminates the need for physical inventory deliveries and instead us[es] a credit system within the pharmacys retail account. PharmaForce, Credit-Based Replenishment: The Future of 340B?. 12 Life forward the virtual credit model is the same as the 340B Rebate Model: the covered entity pays the full price up front and receives a credit after the drug is dispensed. If floating costs were as dire as some covered entities claim, no one would voluntarily use a virtual credit model. But an increasing number of covered entities rely on the virtual credit model to obtain access to the 340B price, which undercuts the argument that a short wait for a rebate would gravely injure covered entities. Even if some covered entities encounter a delay between purchasing a drug and receiving the rebate, the burden on covered entities in those situations remains minimal. Only ten drugs, making up 2% of the 340B Programs value, are selected for IPAY 2026. Moreover, nine of the ten selected drugs for IPAY 2027 do not feature among the top ten drugs in terms of 340B purchases in 2024. See HRSA, 2024 340B Covered Entity Purchases (Dec. 2025). Although some covered entities contend that they will have to float the difference between WAC and MFP if they cannot dispense before the end of the 30-day wholesaler payment window, Boehringer thinks the extent of this is likely limited. First, through prudent inventory management, pharmacies can place orders that limit the amount of stock that will sit on pharmacy shelves for more than 20-30 days. Second, covered entities frequently re-order JARDIANCE, showing that the product does not spend significant time in inventory waiting to be dispensed. See JARDIANCE Purchase Analysis (2024) (attached hereto as Exhibit 2). There is thus no reason to conclude that any covered entity will face significant hardship. More broadly, covered entities receive significant subsidies from the 340B Program, and the value of those subsidies is considerably larger than any marginal costs they may incur in floating the price of IPAY 2026 drugs for a short period. Participating in the 340B Program has always involved compliance burdens, and covered entities have not shown why this modest burden is any different than the others that have long been in place. Administrative Burdens: Covered entities also allege that a 340B Rebate Model will require them to take on administrative and compliance costs estimated at greater than $400 million, including staffing costs and the cost of revising existing procedures to fit new administrative burdens. They also complain that the previously approved 340B Rebate Model lacked a functional dispute resolution mechanism and would divert staff time away from patient care. These allegations are unfounded. The 340B Rebate Model would rely on data that covered entities routinely collect as part of ordinary 340B Program compliance. By law, covered entities are already required to collect and maintain auditable records of all the claims data that would be required as part of the 340B Rebate Model. 42 U.S.C. 256b(a)(5)(C). The only additional administrative task presented by the 340B Rebate Model would be the submission of these data to manufacturersa process some covered entities undertake through the 340B ESP platform to comply with Boehringers contract pharmacy policy. The added cost and administrative burden of this one additional task would be marginal and should not need to divert staff time from patient care. 13 Life forward Boehringer is committed to implementing a 340B Rebate Model built on best-in-class technology and policies that support covered entities compliance. That is why Boehringer intends to partner with BRGa familiar data provider to covered entitiesfor a future 340B Rebate Model. Indeed, the Beacon system that Boehringer will use to administer a 340B Rebate Model is an outgrowth of the existing BRG platform, which many covered entities already use to provide claims data for contract pharmacies. Using the Beacon platform, covered entities will have access to an integrated, seamless platform to submit 340B rebate requests and the necessary claims data. Boehringer has also worked closely with BRG to make targeted adjustments to business rules to address concerns from covered entities, including solutions for unreplenished dispensed product during the initial transition period. Boehringer is also committed to issuing rebates quickly and providing the necessary support to covered entities. As such, covered entities should be able to promptly adapt to the new model. Covered entities claims of administrative burden are also belied by their proposed alternative. A mandatory claims repository, which covered entities have cited as a preferred implementation method, would entail the same administrative burden as a 340B Rebate Model. Covered entities would have to submit the same claims data, but instead of submitting directly to the manufacturer, they would submit it to the claims repository. The administrative burden would be identical to the 340B Rebate Model. Threats of Financial Harm to Covered Entities and Diminished Patient Care: Covered entities also claim that these costs would threaten the financial stability of covered entities. They advance a sweeping parade of dire predictions, asserting that a 340B Rebate Model would result in forced cuts to future capital investments; present a risk of closure of covered entities serving vulnerable patient populations; create a chilling effect on 340B Program participation; cause patients to lose access to critical drugs; force cuts to charity care; and increase out-of-pocket costs for vulnerable patients. These harms are speculative downstream consequences of the alleged cost increases discussed above. Because those alleged cost increases are overstated, these downstream consequences should not materialize. In any event, compliance costs are, and always have been, part of the 340B Program. Taken to its logical conclusion, the covered entities argument is that HRSA may never increase their compliance costs because those increases will necessarily consume resources that could be spent on other things. That is not the law. In fact, this argument is contrary to the law which, as discussed above, requires that HRSA provide for improvements in compliance by covered entities with the requirements of this section in order to prevent diversion and violations of the duplicate discount provision and other requirements specified under subsection (a)(5). 42 U.S.C. 256b(d)(2)(A). Congress thus explicitly contemplated that covered entities may bear additional costs to address the problem of duplicate discounts and ensure program integrity. 14 Life forward Any costs to covered entities will be minimal as explained above and will amount to only a fraction of the benefits that they receive from the 340B Program. The 340B Program has ballooned in size in recent years. In 2010, $6.6 billion in drugs were purchased through the 340B Program. See Congressional Budget Office, Growth in the 340B Drug Pricing Program (Sep. 2025). By 2024, that number grew to $81.4 billionincreasing more than 1200% over a 14-year time period. See HRSA, 2024 340B Covered Entity Purchases (Dec. 2025). The vast majority of this growth has been captured by large 340B hospitals. According to a 2026 report by the Minnesota Department of Health, large hospitals captured over 80% of the statewide net 340B revenue. Minnesota Department of Health, 340B Covered Entity Report: Report to the Legislature 7, 20 (Feb. 27, 2026). If the 340B Program continues to grow, any marginal compliance costs associated with a 340B Rebate Model are likely to be eclipsed by new revenue generated through the 340B Program. Moreover, any minor financial impact is unlikely to affect patient care, especially given the evidence that 340B discounts are often not passed along to patients. Government reports have found that 25 out of 55 surveyed covered entities offered no discount at all to patients at their contract pharmacies. See U.S. Govt Accountability Off., GAO-18-480, Report to Congressional Requesters: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement 30 (June 2018). Instead, 340B drugs are often sold at full prices to insured patients because they can generate revenue when the insurance reimbursement exceeds the 340B price paid for the drug. Id. at 12. And as major media coverage has confirmed, abuses are preventing manufacturers drugs from being used to benefit the underserved communities that Congress created the program to help. See Anne Wilde Mathews et al., Many Hospitals Get Big Drug Discounts. That Doesnt Mean Markdowns for Patients, Wall St. J. (Dec. 20, 2022) (describing how covered entities buy drugs at reduced prices and sell them to patients and insurers for much more, often at facilities in affluent communities); see also Katie Thomas & Jessica Silver-Greenberg, Profits Over Patients: How a Hospital Chain Used a Poor Neighborhood to Turn Huge Profits, N.Y. Times (Sept. 24, 2022); Ted Okan, Hospitals and for- profit PBMs are diverting billions in 340B savings from patients in need, STATNews.com (July 7, 2022). According to a 2023 study, 69% of Disproportionate Share Hospitals that participate in the 340B Program provided less charity care than the national average for all hospitals. Alliance for Integrity & Reform, Charity Care at 340B Hospitals is on a Downward Trend (Oct. 2023). The argument that any minor compliance costs associated with a 340B Rebate Model would affect a covered entitys ability to provide additional patient care is thus implausible. This is especially true for large 340B covered entities. In sum, covered entities increased costs will not have the catastrophic downstream effects that opponents of the 340B Rebate Model predict. Data Security and Privacy: Covered entities complain that the Pilot Program would pose data security and privacy risks. These concerns are 15 Life forward baseless. BRG has developed a robust data privacy policy, which received an Expert Determination from a leading HIPAA practitioner confirming that the platform is compliant with HIPAA and does not collect or maintain identifiable protected health information. See Beacon Channel Management, Rebate Model Frequently Asked Questions. The Beacon platform does not collect or maintain identifiable protected health information. It also mirrors software used by covered entities for their 340B purchasing, which belies any supposed concerns by covered entities. Systemic Harms: Covered entities also assert that a 340B Rebate Model would disrupt their reliance interests in up-front discounts and destabilize the 340B Program by increasing manufacturers power. While HRSAs new decision should address the reliance interests of covered entities as directed by the courts in the Pilot Program litigation, the agency should recognize that these reliance interests are overinflated and are outweighed by the need to harmonize HRSAs practices with the new statutory framework. Covered entities reliance interests are overstated and should not limit HRSAs ability to resolve the novel issues presented by the IRA. First, covered entities have always been on notice that a 340B Rebate Model could be implemented. The 340B statute expressly contemplates the use of rebates, grants covered entities only limited rights to be offered drugs at discounted prices, and instructs HRSA to take steps to protect program integrity. HRSA has never categorically and permanently refused to allow the implementation of a rebate mechanism. Moreover, the IRAs MFP pricing changed the statutory context significantly and created new statutory directives, including the non-duplication directive. The Supreme Court has recognized that an agency must be given ample latitude to adapt their rules and policies to the demands of changing circumstances, Motor Vehicle Manufacturers Assn of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42 (quoting Permian Basin Area Rate Cases, 390 U.S. 747, 784 (1968)); see Atchison, T. & S. F. Ry. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 808 (1973), which includes change in the statutory landscape, see Cboe Glob. Markets, Inc. v. SEC, 155 F.4th 704, 718 (D.C. Cir. 2025) (expressing doubt that the change-in-position requirement applied where there are obvious differences in context). Covered entities reliance interests should not cabin HRSAs ability to address these novel issues. Indeed, covered entities reliance interests are significantly outweighed by the new burdens imposed on manufacturers absent a 340B Rebate Model. Manufacturers are losing millions of dollars every week to duplicate discounts. These losses overshadow covered entities interests in continuing to use their preferred payment model. Covered entities have also been willing to implement complex and cumbersome business practices to extract maximum benefits from the 340B Program. For example, covered entities have engaged in business relationships with contract pharmacies and TPAs to maximize the amount of dispenses that can claim a 340B discount. As part of these arrangements, covered entities must pay both the contract pharmacy and the TPA fees that they have negotiated for their roles in managing and distributing 340B 16 Life forward drugs. See U.S. Govt Accountability Off., GAO-18-480, Report to Congressional Requesters: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement 13 (June 2018). According to the 2026 report from the Minnesota Department of Health, for every $100 dollars of gross 340B revenue generated, Covered Entities collectively paid approximately $10 to external organizationssuch as contract pharmacies and third-party administrators. Minnesota Department of Health, 340B Covered Entity Report: Report to the Legislature at 23 (Feb. 27, 2026). Moreover, the Minnesota study revealed that, for hospital covered entities, contract pharmacy fees accounted for approximately 70% of . . . costs. Id. at 24. By comparison, compliance with a 340B Rebate Model is modest and any small implementation cost is dwarfed by the continued (and growing) benefit associated with participation in the 340B Program. Moreover, covered entities reliance interests cannot nullify the statutes clear authorization for providing 340B pricing through rebates, particularly where, as here, covered entities have substantial advance notice of the 340B Rebate Model. For these reasons, covered entities complaints of increased costs are overblown and should not deter HRSA from implementing the 340B Rebate Model. IV. A 340B Rebate Model Would Help Improve Program Integrity, Securing the Long-Term Future of the 340B Program. The benefits of a 340B Rebate Model extend beyond eliminating 340B and MFP discounts. For example, a 340B Rebate Model is necessary to address many instances of diversion or duplicate discounts that threaten program integrity. The 340B statute directs HRSA to provide for improvements in compliance by covered entities . . . to prevent diversion and violations of the duplicate discount provision. 42 U.S.C. 256b(d)(2)(A). A 340B Rebate Model is the most reliable and accurate method for identifying and preventing both diversion and duplicate discounts. Boehringer urges HRSA to act on its statutory mandate and to implement a 340B Rebate Model to increase program integrity and prevent diversion and duplicate discounts. As HRSA is aware, duplicate discounts are a widespread, systemic problem that extends far beyond the IRA. Units purchased at the 340B ceiling price will regularly and unlawfully benefit from a second discount, including Medicaid fee-for-service rebates, Medicaid managed care rebates, commercial pharmacy benefit manager rebates, TRICARE retail refunds, patient coupons, and free drug vouchers. Medicaid duplicate discounts alone represent an estimated $2025 billion annuallyroughly onequarter of all 340B drug sales. See Luke Greenwalt, Uncover the Invisible Impacts of 340B Discounts, IQVIA (Dec. 20, 2021). This duplication is caused by covered entities refusal to share claims data with manufacturers. A 340B Rebate Model with consistent data exchange is the most efficient and transparent way to manage these overlapping programs and prevent duplicate discounts. 17 Life forward Government reports and HRSA audits confirm that program abuse including diversion and duplicate discountsis substantial. For example, between 2012 and 2019, HRSA audited 1,242 covered entities and made 546 findings related to diversion and 429 findings related to duplicate discounting. See U.S. Govt Accountability Off., GAO-21-107, Drug Pricing Program: HHS Uses Multiple Mechanisms to Help Ensure Compliance with 340B Requirements 14 (Dec. 14, 2020). Similarly, numerous covered entities HRSA audited in 2023 had multiple instances of diversion or duplicate discounting. See HRSA, Program Integrity: FY23 Audit Results (May 8, 2024). Extensive evidence shows that covered entities are not accurately identifying which drugs dispensed by pharmacies qualify for the discounted 340B price. See U.S. Govt Accountability Off., GAO-11-836, Drug Pricing: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement 2223 (Sept. 23, 2011) (noting that covered entities broadly interpret[] the definition [of patient] to include individuals such as those seen by providers who are only loosely affiliated with a covered entity and thus, for whom the entity is serving an administrative function and does not actually have the responsibility for care). The failure of covered entities to maintain adequate records, despite statutory requirements, and the absence of workable audit procedures has resulted in rampant diversion and duplicate discounting. See 42 U.S.C. 256b(a)(5)(C). See Luke Greenwalt, Uncover the Invisible Impacts of 340B Discounts, IQVIA (Dec. 20, 2021) (pointing to a lack of data visibility that results in significant costs of duplicate discounts to manufacturers and other stakeholders including $20-25 billion losses borne by manufacturers.). This pervasive program abuse demonstrates that existing methods to ensure program integrity are insufficient. The two primary methods to address diversion and duplicate discountsaudits and Administrative Dispute Resolution (ADR)are wholly inadequate to address the scale of the problem. The key limitation of both audits and the ADR process rests in the imbalance between the number of 340B covered entities and participating manufacturers. More than 13,300 covered entities participate in the 340B Prime Vendor Program compared to only 150 manufacturers. See 340B Prime Vendor Program, Save on Drugs and Supplies as a PVP Participant. To effectively prevent duplicate discounts, manufacturers must initiate audits for thousands of covered entitiesa costly, resource- intensive, and unscalable process. Moreover, the 340B statute requires that manufacturers conduct an audit of a covered entity prior to initiating ADR proceedings, foreclosing dispute resolution as a viable pathway for manufacturers to address large-scale issues. See 42 U.S.C. 256b(d)(3)(A). Simply put, audits and the ADR process were never designed to resolve highvolume, claimlevel duplication problems. A 340B Rebate Model can provide program integrity benefits that extend beyond the IRA selected drugs and can ensure the long-term viability of the 340B Program. For this reason, Boehringer encourages HRSA to outline a roadmap to expand the 340B Rebate Model to all 340B products and permit the use of such a model to address all instances of improper diversion and 18 Life forward duplicate discounts. Such a 340B Rebate Model is consistent with HRSAs statutory directive to provide for improvements in compliance by covered entities and is essential to the Programs longterm viability. 42 U.S.C. 256b(d)(2)(A). V. Conclusion Boehringer appreciates HRSAs further consideration of a 340B Rebate Model. In light of Boehringers ongoing costs due to duplicate discounts, we request that HRSA (1) immediately approve a 340B Rebate Model for JARDIANCE, (2) promptly enact a 340B Rebate Model Pilot Program for all current and future IRA selected drugs, and (3) work to expand the 340B Rebate Model to all 340B drug products in order to address serious program integrity issues and ensure the continued viability of the 340B Program. If you have any questions about these comments, please do not hesitate to contact me at carrie.harney@boehringer-ingelheim.com. Sincerely, Carrie Harney Executive Director, Public Policy Boehringer Ingelheim Pharmaceuticals, Inc. Overview On October 2, 2024, the Centers for Medicare & Medicaid Services (CMS) released final guidance on effectuation of the maximum fair price (MFP) for 2026 and 2027.1 The final guidance provides new insights into CMS expectations for effectuation and additional details on the role of the Medicare transaction facilitator (MTF). The final guidance leaves unanswered, however, the question of how to prevent the payment of duplicative MFP and 340B discounts. 1 CMS, Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027 (October 2, 2024). https://www.cms.gov/files/document/medicare-drug-price-negotiation-final-guidance- ipay-2027-and-manufacturer-effectuation-mfp-2026-2027.pdf IMPLICATIONS FOR DUPLICATION WITH THE 340B CHANNEL Always HEALTHCARE CMS OCTOBER 2024 FINAL GUIDANCE FOR MFP EFFECTUATION IN 20262027: Figure 1: Potential Impact of Duplicate MFP and 340B Discounts for Selected Drugs in 2026 $4 billion in duplicate discounts will be paid on selected drugs in 2026 alone Manufacturers will lose money on claims subject to a duplicate discount $626 $238 After 340B discount After MFP discount Average list price per 30-day supply -$303 Exhibit 1 340B De-Duplication Under the law that established Medicare Drug Price Negotiation, manufacturers are not required to provide both the MFP and 340B discounts on the same unit of a drug.2 Rather, they need only provide the lower of the two prices. According to the final guidance, CMS continues to decline responsibility for ensuring that manufacturers are not subject to duplication across MFP and 340B discounts and maintains that it will not compel use of a 340B modifier or establish a 340B clearinghouse for 2026 or 2027. Manufacturers can decline to pay an MFP rebate (or seek recoupment through the credit/debit system) if the 340B price of their drug is below the MFP and the claim is 340B eligible.3 The manufacturer must, however, maintain documentation to support the claims 340B eligibility. The final guidance states that this documentation must include one of the following pieces of evidence: 1. the manufacturers process and conclusion from its 340B de-duplication process, or 2. confirmation from a 340B covered entity or its vendor that the claim was 340B-eligible. It remains unclear what de-duplication processes CMS will accept to satisfy the first option. The second optiondirect confirmation of claim- level 340B status from the covered entity or a vendoris not something that covered entities provide regularly to manufacturers.4 This and other portions of the final guidance suggest that CMS may not fully appreciate this aspect of 340B program operations. To wit, in response to a commenter who noted that covered entities have no incentive to proactively identify 340B claims to manufacturers, the agency disagreed, writing that covered entities would be incentivized to identify claims to receive the 340B discount at the time of purchase. Today, in almost all instances, covered entities access the 340B price via an on-invoice discount provided by their wholesaler.5 When placing an order at the 340B price, covered entities are not required to provide claim-level data to support the 340B eligibility of the purchase. Covered entities have no financial incentive to voluntarily provide data to manufacturers on 340B claims for MFP-eligible drugs. That data would be used to withhold or recoup duplicative 340B discounts (if the MFP price is lower) or MFP rebates (if the 340B price is lower). Either scenario reduces the profits earned by the covered entity. In its earlier May guidance, CMS appeared to express an openness to alternative approaches that manufacturers might use to provide the 340B discount; e.g., as a retrospective rebate or credit. If such a retrospective payment were linked to the submission of claims data, manufacturers could ensure receipt of the information needed to de-duplicate MFP and 340B discounts. Absent this option, and without a 340B modifier or clearinghouse, it will be impossible for manufacturers to comprehensively prevent duplication. Without a de-duplication mechanism, manufacturers will pay more than $4 billion in duplicate discounts in 2026 alone.6 For each of the ten drugs selected for price negotiation in 2026, every dispense subject to a duplicate discount will represent a financial loss to the manufacturer, even before considering the impact of manufacturing and other costs. This is because the 340B discount and the MFP discount, when added together, exceed the drugs list price. An estimated 12 percent of Part D dispenses for these ten drugs could be subject to a duplicate discount, meaning they would be sold at a loss. This issue will only be exacerbated in 2027 and later years, when additional drugs are subject to MFP pricing. 2 US Congress, H.R.5376 - Inflation Reduction Act of 2022 (August 16, 2022). https://www.congress.gov/bill/117th-congress/house-bill/5376/text 3 The final guidance states that if a claim is 340B eligible but the 340B price is higher than the MFP, manufacturers may not withhold payment of the MFP rebate. 4 Certain AIDS Drug Assistance Programs access the 340B discount through a rebate based on the provision of claims data. 5 The manufacturer subsequently reimburses the wholesaler for the 340B discount. 6 This amount was derived based on analysis of the share of claims that are 340B-eligible within historical Medicare Part D Prescription Drug Event data, estimates (based on public data) of the current 340B discount for drugs subject to the MFP, and the 2026 MFPs as reported by CMS: Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026 (August 2024). https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf Copyright 2024 by Berkeley Research Group, LLC. Except as may be expressly provided elsewhere in this publication, permission is hereby granted to produce and distribute copies of individual works from this publication for nonprofit educational purposes, provided that the author, source, and copyright notice are included on each copy. This permission is in addition to rights of reproduction granted under Sections 107, 108, and other provisions of the US Copyright Act and its amendments. Disclaimer: The opinions expressed in this publication are those of the individual authors and do not represent the opinions of BRG or its other employees and affiliates. The brief was funded by the Pharmaceutical Research and Manufacturers of America. The information provided in the publication is not intended to and does not render legal, accounting, tax, or other professional advice or services, and no client relationship is established with BRG by making any information available in this publication, or from you transmitting an email or other message to us. None of the information contained herein should be used as a substitute for consultation with competent advisors. About BRG Healthcare BRG Healthcares mission is to solve complex challenges for healthcare stakeholders with real-world expertise, advanced analytics, and actionable insights. We work closely with healthcare payers, providers, life sciences manufacturers, investors, and legal professionals from strategy through execution. Each opportunity, issue, dispute, or transaction is different, and so is the approach we bring to it. Our customized scopes and tailored teams are built for our clients individual needs. THINKBRG.COM HEALTHCARE Always Eleanor Blalock 240.475.0697 eblalock@thinkbrg.com CONTACT US FOR A DEEPER DISCUSSION Beacon 1 340B Identification: NPI+ Considerations Condition for Rebates identified as 340B that are used in Claims Certification JARDIANCE RECENT PURCHASE FOR NPI+ [1] SUMMARY Most covered entities are purchasing the same Jardiance NDC on a regular cadence, with 86% purchasing within 10 days on average [2] MANUFACTURER DECISION 1. Lookback Period for Evidence of Purchase Applies to CP, CE 69% 17% 6% 3% 2% 1% 2% $0 M $200 M $400 M $600 M $800 M $1000 M $1200 M $1400 M $1600 M $1800 M 0-5 5-10 10-15 15-20 20-25 25-30 >30 Chargebacks Average Days Between Purchases (Entity/NDC Level) [1] Limited to chargeback data from 1/1/2024 to 12/31/2024 . Analysis considers the average number of days an entity purchases a given Jardiance NDC on average. [2] 86% of entities purchase within 10 days on average when weighting by total 2024 chargeback volume. Exhibit 2
HRSA-2026-0001-2324MemorialCare Health System2026-04-20T04:00Z9,843 chars
See attached file(s) 1 17360 Brookhurst Street, Suite 160 Fountain Valley, California 92708 memorialcare.org April 20, 206 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted: Federal eRulemaking Portal: https://www.regulations.gov SUBJECT: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels, On behalf of MemorialCare, a nonprofit, fully-integrated health care delivery system located in Southern California that includes four hospitals and over 200 ambulatory sites of care, we appreciate the opportunity to submit comments to Health Resources and Services Administration (HRSA). Three of our four hospitals participate in the 340 B program, and these comments reflect their concerns on HRSAs Request for Information (RFI) on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. If a rebate model moves forward, access to critical specialty care for uninsured and underinsured patients will be drastically reduced, leaving patients without timely access to specialized medical care in the community. Miller Childrens and Womens Hospital Long Beach (a free-Standing Childrens hospital), Orange Coast Medical Center, and Long Beach Medical Center all strongly oppose the 340B Rebate Pilot and urge HRSA to continue implementing 340B as an upfront discount. Rebates will increase 340B participation costs significantly, redirecting funds to manufacturers that would otherwise go to patient care. Not only is this contrary to 340Bs intent, but HRSA has not provided a policy rationale explaining its decision to change decades of requiring 340B to operate as an upfront price discount. The implementation of rebate models would unilaterally effectuate 340B prices as retrospective rebates instead of upfront discounts, departing from over thirty years of precedent. A change of this magnitude creates unnecessary disruption for covered entities and necessitates significant and costly operational changes for covered entities, manufacturers, and U.S. Department of Health and Human Services (HHS). The structural changes imposed using rebate models in the 340B program fundamentally alter our financial planning, cash flow management, and operational risk. Things to think about: A Rebate Model Would Increase Costs for 340B Hospitals and Divert Resources Away from Patient Care. HRSA Should Prohibit All Rebate Denials Data Collection Privacy by Covered Entities 2 A Rebate Model Would Increase Costs for 340B Hospitals and Divert Resources Away from Patient Care: The Rebate Pilot would require 340B hospitals to purchase the up to 25 medications at prices significantly higher than the 340B price (wholesale acquisition cost [WAC] or other commercial price) and wait to receive a rebate representing the difference between the higher price and the 340B price. We will be forced to float substantial funds to pharmaceutical manufacturers tying up critical resources that would otherwise support patient care and essential operations. This will result in less care and services for patients in the community because our finances will be tied up in a rebate program and our hospitals have limited dollars due to a high payer mix of Medicaid and Medicare beneficiaries. After the hospital purchases the drug at this high price, it goes into our inventory until it is eventually dispensed to a 340B patient, which could take weeks or months. At that point, we would be required to gather and submit data required by the manufacturer. The timing from purchase to dispensing to sending data will depend on the needs of our patients at any given time. The high financial outlay when purchasing these drugs creates a strong need for us to submit the data as soon as possible, most of which we have not previously had to collect and submit to manufacturers. This will require extra resources and staffing, further increasing the costs we would be already incurring because of floating revenue to profitable manufacturers. The delays are particularly concerning for physician-administered drugs covered under a medical benefit, which hospitals maintain separately from pharmacy claims due to different filing requirements. The Rebate Pilot will result in significant and extensive costs to our hospital, which will reduce resources available for patient care. This will result in reducing or eliminating clinical hours for our specialty clinics and other health services. We have many concerns about the disruption in patient care, as an example we will have to rethink the hourly operations of our cystic fibrosis clinic, which is one of the only child and adult clinics serving multiple counties in Southern California. HRSA Should Prohibit All Rebate Denials: If HRSA goes forward with the Rebate Pilot against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates from 340B hospitals and prohibit collection of hospital invoice data for drug purchases. While it is helpful that HRSA explicitly bans manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, we remain concerned that manufacturers may deny claims for a host of reasons and will provide unintelligible or overly narrow reason codes, making it nearly impossible to challenge without taking the claim through the Administrative Dispute Resolution process. For example, manufacturers could assert that they already paid the rebate for a claim to another covered entity, but there would be no way for us to confirm the truth of that statement unless they shared the name of the entity, which could raise Health Insurance Portability and Accountability Act (HIPAA) issues. Similarly, they could assert that the claim did not comply with their restrictive contract pharmacy policies, but that denial would not be under HRSAs purview because HRSA is not legally tasked with enforcing manufacturer conditions, raising questions about how a covered entity could challenge that denial. Simply put, as manufacturers have statutory authority to audit covered entities after providing the 340B price, they should also not be permitted to deny claims prior to providing the 340B price. Data Collection Privacy by Covered Entities: HRSA asks about specific pharmacy and medical claims elements that should be collected as part of a rebate model, whether these data elements are currently available or readily available, the sources of these data, 3 whether the data are already being furnished to third parties, and guardrails to mitigate privacy and security concerns (p. 7290). In implementing rebate models, manufacturers are likely to require covered entities to submit claims data to them through their selected vendors, such as the Beacon platform associated with Second Sight Solutions or the Kalderos Truzo platform. HRSA must engage in oversight of these vendors and their contracts with drug manufacturers to ensure data protection. Based on experience with third-party vendors and more recent experiences with the Beacon platform, we are concerned the terms and conditions of the contracts 340B hospitals will be compelled to sign will be non-negotiable and contain terms unfavorable to hospitals. Hospitals are typically required to sign these contracts without the ability to meaningfully revise the contracts to protect their patients sensitive data. Many of the vendors operating in this space have worked hand in hand with drug manufacturers for years to craft these proposed rebate models, drawing questions and concerns from other stakeholders. Recently, Eli Lilly, Novo Nordisk, and Exelixis are conditioning 340 B covered entities to submit extensive claims level data for all 340B drugs dispensed from in house pharmacies, including retail and mixed-use, which is unlawful and gives drug manufactures improper control over the 340 B program. For these reasons as stated above, this creates data privacy issues and burdensome data collection with no purpose, except for adding administrative requirements onto an already highly regulated process managed by HRSA. Conclusion: While we acknowledge that this is an RFI and not a proposed rule, HRSA should have provided some parameters of a potential rebate model that 340B program stakeholders could use in assessing impact and providing feedback. Without this information, it is impossible to accurately provide the information HRSA is looking for and HRSA is bound to have substantial variation in the responses it receives, as they would be based on different assumptions about the scope of a rebate model. A rebate model would impose onerous administrative requirements onto our three hospitals, diverting critical resources from patient careoutcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. Thank you for the opportunity to provide comments. If you have any questions, please feel free to contact me at KPugh@memorialcare.org. Sincerely, Kristen Pugh, MPA Vice President, Advocacy and Government Relations MemorialCare Health System
HRSA-2026-0001-2325The Children's Clinic 'Serving Children and Their Families'2026-04-20T04:00Z37,575 chars
See attached file(s) Family Healbh April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) We request that you exempt Community Health Centers Dear Director Britton: On behalf of TCC Family Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHC) posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from rnanufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering irnpacts: Projected Cost Increases: Community Health Centers (CHC) anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to inanage the pilot. Based on our organization's data, we estimate it would cost an additional $1 Million to purchase these 10 drugs under the proposed rebate rnodel. Currently, our organization spends approximately $100,000 to purchase these same drugs at the 340B ceiling price. This represents a 1000% increase in upfront capital required for procurement. I. We Strongly Urge HRSA to Exempt Community Health Centers from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to Community Health Centers'(CHC) core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel undennines this by placing an immense financial burden on CHCs. 11 Page By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For TCC Family Health in particular, this means it will impact: Affecting approximately 35,000 patients we serve Current admin costs for TCC Family Health's 340B program is approximately $200,000 annually TCC Family Health uses our 340B revenue to augment/supplement medications and services to our most vulnerable patient population. We strongly urge HRSA to exempt Community Health Centers from any rebate model to protect the finarcial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients inay be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non adherence, treatment delays, and adverse outcoines, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolisrn, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and jardiancee, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 2 1 Page of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for rnanaging their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the Medicare Drug Price Negotiation Program (MDPNP) will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The irnpact on insulin access is particularly alaiming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a rnatter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate inodel. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. HI. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to cornply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to inaintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Sirnilar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharrnacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to creae an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. Wage CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: TCC Family Health provided $502,758 in sliding fee discounts, provided through discounted rnedications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate rnodel. Staffing Impact: TCC Family Health anticipates needing 2 additional FTEs as a result of the Rebate Model implementation. The additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased cornplexity, TCC Family Health anticipates an increase of $150,000 to $200,000 additional costs related to the Rebate Model to costs for external support vendors. These vendors may include 340B consultants, legal counsel, prograrn coordination, third-party administrators, electronic rnedical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the adrninistrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estirnate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate clairns. TCC Family Health anticipates the need for an additional 2 FTEs. Additionally, several Cornmunity Health Centers estirnate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. TCC Family Health estirnates an additional cost of $200,000 for additional staffing. Depending on the vohime of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. TCC estimates an additional 20 hours plus per week will be required to report 340B rebate claims to a third-party platform, assuining all adhere to the nine drug manufacturers' plans, the lack of standardization and likely varying requirements across rnanufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. TCC Family Health urges HIZSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. 4 Page Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Adrninistrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharrnacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain cornpliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangernents. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be rnaintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete adrninistrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D clairns in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose 5 lPage disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years ofprecedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the phatmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. The sliding- scale discounts ensure that patients have access to and receive life-saving medications at little or no cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from cornpleted data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to subinit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 clays from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical 6iPage inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that rnany CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Irnpact: WAC 340B for 2025 purchases by NDC & volutne, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral clairn capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 7[Page Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost an additional $1 Million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $100,000 to purchase these same drugs at the 340B ceiling price. This represents a 1000% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the IIRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, TCC Farnily Health will need to consider reducing critical services: Essential Clinical Services: To offset the upfront cost of drugs, we would have to consider scaling back non-revenue-generating but essential services, such as, or example, walk-in immunization services or chronic disease clinic events for diabetic and/or hypertensive patients. Operating Hours: The possibility of the reduction of our clinic hours. Evening and weekend hours, which are the only times our working-class patients can seek care without losing wages. Workforce & Staffing: The adrninistrative burden of this pilot may require us to divert funds away from clinical staf For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund clinical positions, directly increasing wait tirnes for appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our approxirnately 5,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted, For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. TCC Family Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B prograrnto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payrnents, origination fees, and debt 8IPage service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a tirne when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications untiI payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial rnargins, they are often perceived as having higher credit risks, rnaking increases to credit limits difficult or impractical. TCC Family Health Data: TCC Family Health estimates that purchasing the 1,0 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $75,000. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the Iiquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. Possibly forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on TCC Fainily Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the coininunity's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays TCC Family Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed inanufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or docurnentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $100,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the tiine of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-tiine 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 9IPage lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniforin national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement frarnework, including consequences for repeated late payrnents or irnproper denials by manufacturers; Manufacturers rnust bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program coinpliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 10 Page CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed inforrnation about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. . Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate cornpliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and rnaking it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion TCC Family Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about stafflng, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to 11 'Page comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. TCC Family Health believes that the proposed 340B rebate model that would cost an additional $1 Million to purchase would cause disproportionate harm to patients served by Community Health Centers and other safety net providers. TCC Family Health appreciates the opportunity to respond to this Request for Infonnation on the 340B Rebate Model Pilot, and we hope you will exempt Community Health Centers. We Iook forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Cesar Vazquez, Director of Operations/cvazquez@tccfamilyhealth.org. Sincerely, Elisa Nicholas, MD, MSPH Chief Executive Officer TCC Family Health 12 l Page
HRSA-2026-0001-2326Gilead Sciences2026-04-20T04:00Z35,842 chars
Please see the attached comment letter on behalf of Gilead Sciences regarding HHS Docket No. HRSA202603042. Page 1 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com April 20, 2026 VIA ELECTRONIC FILING TO: www.regulations.gov Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Response to Request for Information on the 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Director Britton: Gilead Sciences, Inc. (Gilead or the Company) appreciates the opportunity to provide feedback on the Health Resources and Services Administrations (HRSAs) Office of Pharmacy Affairs (OPA) request for information regarding the 340B Rebate Model Pilot Program.1 Gilead, headquartered in Foster City, California, is a research-based biopharmaceutical company that discovers, develops, and commercializes innovative medicines in areas of unmet medical need. Gileads therapeutic areas of focus include human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS), liver diseases, inflammatory conditions, and cancer (particularly metastatic triple negative breast cancer and cell therapy, through our subsidiary, Kite Pharma, Inc.). For more than 30 years, Gilead has been a leading innovator in the field of HIV, driving advances in treatment, prevention, testing, linkage to care, and cure research. We are actively working to ensure patient outcomes are optimized for all individuals impacted by HIV through antiretroviral regimens that achieve long-term viral suppression and prevention therapies. Most recently, Gilead received approval for YEZTUGO (lenacapavir), a twice-yearly long- acting injectable for HIV preexposure prophylaxis. YEZTUGO received FDA Fast Track and Breakthrough Therapy Designations as well as Rolling Review and Priority Review. Gilead supports the 340B Drug Pricing Program (the 340B Program) as one way to ensure access to medicines for uninsured and underinsured patients. At the same time, we are concerned that oversight of the 340B Program has not kept pace with its explosive growth, and thus we view a rebate model pilot as a necessary step towards improving 340B Program integrity. In particular, we believe the program integrity and transparency enabled through a rebate model pilot will increase the transparency critically needed to identify and mitigate a broad range of 1 HRSA, Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7,287 (Feb. 17, 2026). Page 2 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com duplicate discounts. These include duplicate discounts between the 340B Program and the Medicare Maximum Fair Price (MFP) as well as statutorily prohibited discounts between the 340B Program and Medicaid Drug Rebate Program which currently occur on many medicines not subject to an MFP. A rebate model pilot will also support other goals such as preventing provision of 340B drugs to ineligible recipients (i.e., diversion) and excluding 340B drugs from Medicare inflation penalties. Duplicate discounts and diversion increase the cost of the 340B program to Gilead beyond our legal obligations. These additional costs negatively affect Gileads ability to sustain our investments in activities to eliminate HIV in the U.S. While comprehensive reform is needed to fully address the 340B programs integrity concerns that have resulted from its growth and lack of oversight, we view the rebate model pilot as a promising, necessary first step towards addressing many of these concerns. While Gilead does not believe that HRSAs preapproval of manufacturers 340B rebate models is required,2 we appreciate the opportunity to provide feedback on certain questions of particular importance based on the Companys extensive experience participating in the 340B Program. Below we explain why a rebate model is needed today more than ever before and recommend HRSA: 1. Apply the Rebate Model Pilot to All Categories of Covered Entities: We request that HRSA expressly clarify that the rebate model pilot applies to all 340B Program covered entity types, including hospitals and grantees. All covered entities generate duplicate discounts and if some or all are exempt from the rebate model pilot, their duplicate discounts will remain undetected. This will encourage gaming by covered entities that are impacted partnering with those that are exempt to avoid or limit the impact of the rebate model. 2. Acknowledge that a Rebate Model is Needed Because Other Approaches to Improving Transparency in the 340B Program are Insufficient. Given the substantial number of program violations that persist in the 340B Program despite HRSA and manufacturers efforts to date, a rebate model remains critical to enhancing program integrity and preventing duplicate discounts. 3. Expand the 340B Rebate Model Pilot Beyond Drugs with an MFP for Initial Payment Applicability Year (IPAY) 2026 and 2027. A rebate model has the potential to provide much-needed program integrity for all covered outpatient drugs, regardless of whether they are subject to an MFP. The data obtained via a rebate model can also help to prevent illegal Medicaid duplicate discounts and Medicare inflation rebate duplicate discounts for drugs with and without an MFP. 4. Establish a 340B Rebate Model Framework that Minimizes Operational Burdens for All Parties. A rebate model will not pose a burden for covered entity participants, given that the overwhelming majority of covered entities cashflow will not be impacted by the rebate model and there are solutions to address the few 2 Indeed, Gileads position is that such preapproval is not required as a matter of law. See 42 U.S.C. 256b(a)(1). Page 3 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com instances where cashflow may become a concern. Gilead also supports providing denial documentation to covered entities and submitting monthly reports to HRSA to inform and improve future iterations of the rebate model, as detailed below. * * * * * 1. Why a Rebate Model is Needed Now More Than Ever (RFI Question 7a and 7b). The 340B Program was originally relatively limited in scope, and contract pharmacy arrangements were rare. 340B units were largely identified at the point of sale and dispensed by the covered entity registered with HRSA, and manufacturers primary federal pricing obligation outside of 340B was the Medicaid Drug Rebate Program, which only applied to fee-for-service Medicaid. The 340B statute provided for a rebate model, and the use of an upfront discount model was administratively workable in the programs original context. The expansion of the 340B Program, however, has significantly increased the difficulties that manufacturers face in trying to prevent duplicate discounts and ensure that drugs bought under the 340B Program are only dispensed at eligible sites and to eligible patients. Over the past 15 years the number of covered entities has grown from 10,000 in 2010 to 66,000 in 2025.3 There were $5B in purchases at the 340B price in 2010; those sales grew to $81B in 2024, a 22% annual growth rate.4 This was much faster than U.S. expenditures on retail prescription drugs which increased 4.4% annually during the same period.5 The programs expansion in scope not only resulted in growth, but also greater complexity. In 1994, HRSA issued guidance that established child sites (off-site outpatient facilities affiliated with a covered entity) as eligible for 340B prices.6 In 2010, HRSA issued the current guidance allowing unlimited contract pharmacy arrangements for covered entities, well beyond the one contract pharmacy that was previously allowed for covered entities that did not have their own in- house pharmacy.7 As a result, the number of covered entity/contract pharmacy relationships grew from a few thousand in 2010 to more than 220,000 in 2024.8 In addition, HRSA allowed contract pharmacies to use the replenishment model, in lieu of maintaining a separate 340B inventory, to access 340B prices, which significantly increased program complexity for manufacturers. In the 3 https://schaeffer.usc.edu/research/misaligned-incentives-340b/ 4 Drug Channels: 340B Hit $81 Billion in 2024 (+23%): Why CMS and the IRA Are Poised to Cool the Programs Runaway Growth (Dec. 15, 2025), available at https://www.drugchannels.net/2025/12/340b-hit-81-billion-in-2024- 23-why-cms.html 5 From 2020 to 2024, retail prescription drugs experienced the fastest average growth in spending at 7.8%, following 3.1% compound annual growth from 2010 to 2020.: Peterson-KFF (January 22, 2026, available at https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed- time/#Total%20national%20health%20expenditures,%20US%20$%20per%20capita,%201970-2024 6 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Outpatient Hospital Facilities, 59 Fed. Reg, 47884, 47884-85 (Sept. 18, 1994). 7 Notice Regarding 340B Drug Pricing Program-Contract Pharmacy Services, 75 Fed Reg. 10272, 10273-75 (March 5, 20210). 8 Adam J. Fein, The 340B Contract Pharmacy Market in 2025: Big Chains and PBMs Tighten Their Grip, Drug Channels (June 10, 2025), https://www.drugchannels.net/2025/06/340b-contract-pharmacy-market-in-2025.html; The Big 5 Pharmacies in 340B, Beckers Hosp. Rev. (Oct. 13, 2025), https://www.beckershospitalreview.com/pharmacy/the-big-5-pharmacies-in-340b/. Page 4 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com replenishment model, covered entities do not identify 340B units at the point of sale. Rather, they or their third-party administrators determine the 340B status after the contract pharmacy has dispensed the drug to the patient, and then, they purchase a unit to replenish the dispensed unit at the 340B price. The delay in the identification of 340B status creates opportunities for duplicate discounts. After the Affordable Care Act expanded Medicaid, increased the size of the Medicaid rebate, and expanded the Medicaid Drug Rebate Program (MDRP) to Medicaid managed care utilization, illegal duplicate discounts between 340B and Medicaid increased dramatically.9 This was due to a lack of transparency in the program and ineffective processes that prevent manufacturers from addressing duplicate discounts that are identified. When the Inflation Reduction Act was enacted in 2022, it established other federal pricing programsMedicare inflation rebates and the Medicare Drug Price Negotiation Program (MDPNP)this created potential for new types of duplicate discounts that cannot be adequately prevented through an upfront discount framework.10 As explained below, a 340B rebate model is the best way to avoid many new duplicate discounts posed by these overlapping pricing and rebate obligations. Gilead has successfully used a rebate model to prevent duplicate discounts for AIDS Drug Assistance Programs (ADAPs) for over 20 years. While the rebate model is not mandatory, in 2023 75% of ADAP full-pay medication programs opted to use rebate models to receive 340B pricing.11 Despite having small staff sizes, these ADAPs have been able to successfully implement the models. This experience demonstrates the effectiveness and applicability of the rebate model to the 340B program. As a result, Gilead is confident that a rebate model across all covered entities and all 340B drugs is achievable and will be beneficial. Our input to HRSA regarding the potential rebate model pilot leverages the lessons learned from our ADAP experience. 2. The Rebate Model Pilot Must Apply to All Types of Covered Entities (RFI Question 7b). Duplicate discounts are prohibited by federal law, and all covered entities can generate duplicate discounts. The rebate model pilot has the potential to significantly reduce duplicate discounts, but only if it extends to all covered entity types. Resolving integrity issues is a requirement for all covered entities. Grantees account for a disproportionate share of spending on Gileads medicines. This is shown by the Congressional Budget Office, which found that 77 percent of spending on drugs purchased through the Prime Vendor Program in 2021 was on anti-infective drugs, Gileads largest 9 See Government Accountability Office, Report No. GAO-20-212, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement (Jan. 2020), 1, 27, https://www.gao.gov/assets/gao-20-212.pdf. 10 See Government Accountability Office, Report No. GAO-20-212, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement (Jan. 2020), 1, 27, https://www.gao.gov/assets/gao-20-212.pdf. 11 NASTAD, 2024 National RWHAP Part B ADAP Monitoring Project Annual Report tbl. 18, https://nastad.org/sites/default/files/2024-03/PDF-ADAP_2024_Table_18_0.pdf. Page 5 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com therapeutic area.12 Across all covered entities, a recent analysis by the 340B Industry Roundtable for Gilead estimates that manufacturers paid approximately $19.1 billion in duplicate discounts in 2023.13 This increased the cost of the 340B program to manufacturers by nearly 20%.14 This increased cost occurs at all covered entity types, hospital and grantee covered entities. HRSA audits show that grantees do not have sufficient processes in place to prevent duplicate discounts.15 While audits between 2020 and 2024 found that 20% of the covered entities had processes that could lead to duplicate discounts, grantees were nearly twice as likely as hospitals to have problems with their processes that could lead to duplicate discounts 31% for grantees vs 18% for hospitals.16 Excluding certain or all grantees would create a large loophole that hospitals could exploit. A 2023 study from BRG for Gilead found that in 2022, approximately 21% of 340B hospitals had at least one grantee clinic registration and 7% of grantees were located within a 340B hospital.17 If grantees are regulated differently than hospitals, hospitals would be incentivized to further seek and expand their registrations and affiliations with clinics to evade hospital-specific requirements. Additionally, if HRSA exempts grantees from the rebate model pilot it could encourage pharmacy benefit managers, contract pharmacies, and other for-profit third-party middlemen in the program to help shift volume from hospitals to grantees not subject to the rebate model pilot and ultimately increase the amount of money they extract from the programultimately tripling the amount of money these middlemen extract from grantees in the 340B Program.18 Gilead respectfully urges HRSA to include all covered entities in the rebate model pilot. 3. A Rebate Model is Needed Because Other Approaches to Improving Transparency in the 340B Program are Insufficient (RFI Questions 5a, 5d and 7d). a. A claims clearinghouse would be an insufficient way to solve the duplicate discount problem Gilead understands that some covered entities are advocating for a claims clearinghouse to be used to address duplicate discounts, instead of the rebate model. However, for multiple reasons, a claims clearinghouse is not a sufficient alternative to the 340B rebate model. A rebate model will be more 12 CBO. Growth in the 340B Drug Pricing Program. September 2025. 13 ibid. 14 ibid. 15 340B Duplicate Discounts: Impact to Manufacturers, 340B Industry Roundtable (April 2026), available at https://roundtable.thinkmosaic.com/links/Duplicate_Discounts_Paid_2026 16 ibid. 17 Federal Grantee Clinics and the 340B Drug Discount Program, BRG (May 2023), available at https://ecommunication.thinkbrg.com/67/2549/uploads/blalock-fedgranteeclinics-340b-2023-final.pdf. 18 Grantee-Only Contract Pharmacy Mandates: Estimating the Potential 340B Economic Leakage from Overlapping Patients, Health Capital Group (April 2026), available at https://www.healthcapitalgroup.com/grantee-only- contract-pharmacy-mandates Page 6 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com efficient and less error-prone than a claims clearinghouse, because, under a rebate model, the identification of 340B eligibility and access to 340B prices would occur simultaneously. This will ensure manufacturers receive timely data and can avoid inappropriately paying duplicate rebates to payers. In contrast, with a clearinghouse, covered entities would submit the data needed to identify duplicate discounts or diversions after the covered entities purchased the drug at the 340B price. Thus, manufacturers would only be able to identify 340B units retrospectively, and generally after the MFP or other rebate has been paid. This delay will increase the number of duplicate discounts paid. Addressing these duplicates will require manufacturers to pursue good-faith inquiries and auditsprocesses that both manufacturers and covered entities find to be extremely inefficient, as explained below. Even if HRSA mandates use of a clearinghouse, there is no evidence that it will be able to effectively eliminate duplicate discounts. Given that accurate submission of clearinghouse data would not be a requirement for obtaining the 340B price, there would be no strong incentives for payers or covered entities to ensure that complete data is submitted promptly and accurately. Use of claims modifiers in pharmacy claims bears this out. When covered entities include 340B modifiers on claims, they are often dropped either by the third-party vendors that transmit the claims for processing. This is because neither the payer nor the pharmacy has an incentive to make sure that this field is transmitted accurately. As a result, the modifier is often not available to be used by the payer to identify duplicate discounts. A clearinghouse would not have information needed to determine the completeness and accuracy of the submitted data and therefore would be an insufficient solution to ongoing program integrity problems. b. Audits and good-faith inquiries are an insufficient way to solve the duplicate discount problem To date, HRSA has demonstrated its inability to effectively enforce 340B Program requirements through its own audits and other enforcement mechanisms. While HRSA annually performs audits of covered entities for program integrity issues such as insufficient processes to prevent duplicate discounts, the scope of its audits is insufficient. HRSA currently audits less than 1% of covered entities each year. Between 2020 and 2024, over 60% of the audited covered entities had at least one adverse finding. Thus, it is likely that many program integrity issues are undetected among the unaudited covered entities. Manufacturer-led audits and good-faith inquiries also are insufficient ways to address duplicate discounts because they are expensive, time consuming, and because there is no penalty or interest on recouped claims they effectively result in manufacturers providing a free loan to covered entities or payers that inappropriately claim duplicate discounts. However, without a rebate model or claims data from covered entities, these audits and good-faith inquiries are the tools manufacturers must rely on, despite the fact that they and our limited data are insufficient to address the full scale of the 340B duplicate discount problem. Identifying and pursuing duplicate discounts involves several steps and requirements that make it very burdensome for manufacturers. Quarterly, Gilead scrubs the data related to 340B purchases and finds instances of 340B/MDRP duplicate discounts. We attempt to settle these duplicates with States. Unfortunately, attempts to settle amicably and efficiently with the State are frequently unsuccessful. In such a case, we commence a good faith inquiry and negotiation with the covered Page 7 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com entity (if we can identify the covered entity that purchased the drug at the 340B price, which is not always possible for contract pharmacy claims). If the good faith inquiry is not resolved, we may consider an audit. For an audit, HRSA requires that we engage an independent accountant to prepare for the audit and develop documents to seek HRSAs approval of the audit. In Gileads experience, the audit process itself takes an average of 6 months. The covered entitys size is often a factor in the effort it takes to coordinate an audit. Smaller covered entities typically need significantly more time to review the prescription data that we provide them. In total, the entire process could take up to 18 to 24 months from start of our data scrubbing to audit closure. The labor, time, and other resources needed for the above steps to either directly resolve issues with covered entities or effectively monitor and conduct audits under current guidelines is significant. First, manufacturers cannot access the detailed results of HRSAs completed audits and must engage in our own potentially duplicate and inefficient audits. Second, our audit requests are frequently not approved by HRSA. For example, Gilead has had two audit requests rejected because HRSA was already auditing the covered entity at issue. For other requested audits, HRSA has required Gilead to submit multiple iterations of the audit work plan and imposed several restrictions, including limiting the audit to only a sample of patient data and restricting the period that auditors could remain on-site. Third, approved audits do not always result in repayment to Gilead due to challenges such as unclear state requirements. Thus, despite knowing from our internal analyses that there are duplicates, the audit process yields limited recoveries. Because the process is so burdensome and costly with no guarantee of a return, we are not able to pursue every instance of suspected or confirmed duplicate discounts. c. The Medicaid Exclusion File is insufficient to solve the duplicate discount problem Similarly, the Medicaid Exclusion File (MEF) has proven to be insufficient in catching duplicate discounts and prohibited Medicaid duplicates still occur frequently. As an initial matter, the MEF data is provided by covered entities for drugs billed under Medicaid-fee-for-service and does not apply to Medicaid managed care organizations (MCOs). As a result, the MEF is wholly ineffective for Medicaid managed care, which constitutes over 70% of Medicaid enrollees. The U.S. Department of Health and Human Services Office of Inspector General released a report on this issue in 2016, concluding that the existing methods for identifying 340B claims for MCO drugs create a risk of duplicate discounts.19 The MEF also cannot be used for many contract pharmacy claims because large chain pharmacies are often dispensing drugs to both 340B and non-340B patients. No meaningful reforms have rectified the issue which persists nearly a decade later. d. Manufacturer Contract Pharmacy Integrity Initiatives are insufficient to solve the duplicate discount problem Many manufacturers have implemented contract pharmacy integrity initiatives as a self-help option to address duplicate discounts, but these initiatives are also becoming less effective. Our Contract Pharmacy Integrity Initiative (CPII) experience demonstrates the importance of manufacturers access to data to detect and prevent potential duplicate discounts. In May 2022, 19 U.S. Department of Health and Human Services Office of Inspector General, Report No. OEI-05-14-00430, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates 11 (June 2016), https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. Page 8 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com Gilead implemented our CPII, which requires covered entities to provide claims level data for our branded hepatitis C products purchased at the 340B price and dispensed at contract pharmacies. Using CPII data, we initially were able to identify potential duplicate discounts for significant portions of submitted claims. Yet, in recent years the amount of data received via our CPII has decreased as CEs have developed alternative distribution methods for their contract pharmacies to avoid data submission. For example, covered entities have 340B drugs initially shipped to the covered entity, which takes possession of the drugs and then transfers them to its contract pharmacies, evading our and others efforts to identify and prevent duplicate discounts. In short, a rebate model pilot is needed because all available methods to detect and prevent duplicate discounts are insufficient and demonstrate the ineffectiveness of current approaches. In addition to addressing integrity concerns, the rebate model will also reduce the use of the audit process which multiple stakeholders find to be overly burdensome. 4. HRSA Should Expand the 340B Rebate Model Pilot Beyond Drugs with a MFP for Initial Payment Applicability Year (IPAY) 2026 and 2027 (RFI Questions 5d). In its February 26, 2026, Information Collection Request (ICR) about the rebate model burden, HRSA described the potential rebate model pilot as being limited to NDC-11s included on the Medicare Drug Price Program Selected Drug Lists for IPAYs 2026 and 2027. Yet, as described above, a rebate model could provide much-needed data on all covered outpatient drugs, regardless of whether they are subject to an MFP. The data obtained via a rebate model can also help to prevent illegal Medicaid duplicate discounts and Medicare inflation rebate duplicate discounts for drugs with and without an MFP.20 These duplicates are no less concerning or legally prohibited than MFP duplicates. As noted previously, the 340B Industry Roundtable estimated that manufacturers paid approximately $19.1 billion in duplicate discounts in 2023,21 increasing the cost of the 340B program by 20% beyond what is required by law. These funds could have been used by manufacturers to invest in the development of new medicines for people living with or at risk of contracting HIV at a time when new, long-acting medicines are coming to market, and hope for a cure is increasing. The growing program integrity issues also threaten Gileads support of partners working to eliminate HIV and of screening and linkage to care efforts that have been developed to ensure that those who have HIV remain in care and on treatment. In addition, as described above, the data gathered in a rebate model pilot could also allow for more accurate identification of 340B drugs that should be excluded from Medicare inflation rebates. CMS has only recently begun sending invoices for these rebates to manufacturers, and estimates of duplicate discounts are not yet available. However, given the imprecise estimation methodology that CMS will use to exclude 340B units in Medicare Part D, the same transparency limitations 20 See 42 U.S.C. 256b(a)(5)(A). 21 340B Duplicate Discounts: Impact to Manufacturers, 340B Industry Roundtable (April 2026), available at https://roundtable.thinkmosaic.com/links/Duplicate_Discounts_Paid_2026 Page 9 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com that have fueled duplicate discounts in Medicaid are likely to cause duplicates in the Medicare inflation rebate program as well given. A rebate model would be very helpful in reducing duplicate discounts between 340B and Medicaid Managed Care, given the lack of transparency of that program. Manufacturers and States both need better data to identify these 340B claims in order to eliminate duplicate discounts. We therefore urge HRSA to expand the rebate model pilot program to include all covered drugs not just those with an MFP for IPAY 2026 and 2027. 5. HRSA Should Establish a 340B Rebate Model Framework that Minimizes Operational Burdens for All Parties (RFI Questions 2a, 2c, 2e & 6). a. The rebate model is designed to eliminate duplicate discounts, consistent with the Inflation Reduction Actit is not designed to create cash flow problems for covered entities. The rebate model is designed to eliminate duplicate discounts, consistent with the IRA. It is not designed to create cash flow problems for covered entities and is likely to improve cash flow in some cases. An IQVIA analysis found that, overall, providers would pay less than 0.2% of the medicines list price in annual financing costs, even with conservative assumptions (such as 12% interest rate on cash balances, a 340B discount of 55%, and lower than expected interest costs for physical replenishment).22 Thus, IQVIAs findings indicate that the impact of the rebate model pilot on covered entities cash flow is anticipated to be minimal. On average, covered entities financing costs will stay the same, and in many cases will decrease, due to the rebate model. This is because, under the rebate model, manufacturers will pay rebates to effectuate the 340B price before wholesaler payments are due for most covered entities. Typical payments terms between a covered entity and wholesaler allow for 30 to 60 days between the order of a drug and payment for the drug. Manufacturers have previously committed to providing covered entities with rebates within ten calendar days of claims submission. Therefore, if covered entities promptly submit accurate rebate claims, they will typically receive rebates before their wholesaler invoices are due. Thus, in these situations there will not be any cashflow concerns. Some covered entities have stated that they have cashflow concerns because they have atypical wholesaler payment terms that require payment significantly before thirty days. In this case, covered entities and wholesalers have the ability to renegotiate the payment terms of their contracts to accommodate the rebate model. There are anecdotal examples of covered entities successfully renegotiating wholesaler contracts because of changes in the supply chain.23 22 IQVIA White Paper, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, available at https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper- 2025.pdf. 23 BRG discussions with covered entities. Page 10 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com Finally, although covered entities that have drugs on the shelf for longer than is typical could potentially face some cashflow issues, several manufacturers that have proposed rebate models have contemplated this concern and have offered solutions to alleviate any resulting cashflow issues.24 For example, they have proposed a process that monitors the dispensing of units from a bottle, and where appropriate in select cases, manufacturers can provide partial rebates prior to the complete distribution of a bottle. Alternatively, in appropriate cases, a manufacturer could provide a 340B discounted bottle near the start of the rebate model to certain covered entities with a documented history of slow bottle dispenses--preempting cash-flow concerns. Moreover, as stated earlier, our ADAP experience demonstrates that a rebate model is feasible and effective. Manufacturers can ensure that a rebate model is implemented in a standardized and timely way to limit the burden on covered entities. b. Gilead Supports Manufacturers Reporting Data to HRSA to Improve Transparency in the 340B Program Gilead is committed to improving transparency in the 340B program through the rebate model. To this end, we support providing denial documentation to covered entities and submitting monthly reports to HRSA containing the data elements required in the previous rebate model pilots ICR. Additional transparency can be achieved if, as part of our monthly reports to HRSA under the rebate model pilot, manufacturers, submit data related to the frequency of events that should never occur given the statute, laws, and rules governing the 340B program. Such data will provide HRSA with insight into the range and frequency of inappropriate actions in the 340B program. Maintaining a record of these instances can be used to inform future iterations of the rebate pilot. Examples of such events include, but are not limited to, the following: Covered entity rebate requests on Medicaid claims: (1) for covered entities located in states that have restrictions on the 340B eligibility of drugs reimbursed via Medicaid; and (2) instances where a state Medicaid program attests that a covered entity should not have received the 340B ceiling price. Rebate claims whose Service Provider ID is not that of a contract pharmacy listed in HRSAs Office of Pharmacy Information System (OPAIS) database as tied to the submitting covered entity. Contract pharmacy relationships are required to be listed in the OPAIS database as active in order for any 340B drugs to be dispensed via the pharmacy. Thus, there should not be instances in which the combination of a covered entitys 340B ID and the pharmacys ID is not indicated as active at the time of a 340B drugs dispense. Rebate claims associated with a drug unit for which the manufacturer has already provided a 340B rebate, and therefore a covered entity receiving a 340B rebate for a drug unit whose rebate has already been paid causes a duplicate discount. 24 See, e.g., Notice to 340B End Customers Regarding Purchases of STELARA and XARELTO (August 23, 2024), J-J-Innovative-Med-340B-Rebate-Model-Policy-Update-08-23-2024.pdf. Page 11 of 11 Gilead Sciences, Inc. 333 Lakeside Drive Foster City, CA 94404 USA phone 650 574 3000 facsimile 650 578 9264 www.gilead.com www.gilead.com As the 340B Program continues to grow and evolve, there likely will be new types of program violations that should be brought to HRSAs attention. Thus, manufacturers should have flexibility to report other prohibited events, beyond the examples contemplated above. * * * * * Thank you again for the opportunity to comment on the 340B Rebate Model Pilot Program, including the use of rebates to effectuate 340B pricing and the critical need to address duplicate discounts under the 340B Program. We look forward to further dialogue on these issues. If you have any questions regarding Gileads comments, or if we can provide any additional information, please contact Michelle Drozd at michelle.drozd2@gilead.com. Sincerely, Rekha Ramesh Vice President, U.S. Policy, Government Affairs Gilead Sciences, Inc.
HRSA-2026-0001-2327Biocon Biologics Inc.2026-04-20T04:00Z7,008 chars
Biocon Biologics Inc. Response to RFI- HRSA 340 Rebate Model Pilot Program Current 340B Exclusion and Validation Process Pharmacy: Evaluate claim data to determine if there are potential matches against the 340B list of Covered Entities published by HRSA. This is established by matching various customer identifiers including the NPI (National Provider Identifier). Additionally, we utilize the information included in the NCPDP monthly data refreshes that can indicate connections to 340B Covered Entities since this is something that pharmacies can self-report. The current process is not the best way to identify 340B claims but absent 340B pharmacy claims data this is the best approach we have to identify 340B and avoid duplicate discounts. Medical: The primary means of determining 340B in Medical claims is through the J-Code Modifier values of JG & TB. This is why it is very crucial that the J-Code Modifier field be included in the list of required data elements. Due to the limited amount of data generally provided for Medical claims, this field is one of the only ways to verify 340B on these claims. A majority of the claims dont have these modifiers but absent 340B Medical claims data this is the best approach we have to identify 340B and avoid duplicate discounts. Medicaid and Managed Care Challenges: In Managed Care, emerging contractual and policy language is increasingly restricting manufacturers ability to identify duplicate 340B claims. For example, managed care customers ask for scrub cap limitations on what can be challenged, as well as limiting our look back period/timeframe to dispute the same. Most manufacturers are limited in their resources to review claims broadly and within these limitations, i.e., timeframes. These limitations further exacerbate the risk of duplicate discounts and reduce the practical mechanisms available to manufacturers to ensure compliance with statutory requirements. Broader Duplicate Discount Risk Across Programs: In addition, the continued expansion of rebate constructs introduces further complexity and increases the likelihood of overlapping discount and rebate liabilities. As these programs evolve, the absence of clear coordination mechanisms heightens the risk of manufacturers providing multiple, unintended price concessions on the same unit of drug. Similar to above, all burden is placed on the manufacturer with similar limitations. Summary: Manufacturers currently rely on contract alignment and retrospective claims data analysis to mitigate duplicate discounts. However, no existing methodology has proven fully effective in consistently linking managed care claims data to the discounts ultimately realized under applicable government programs. As a result, these processes are resource-intensive, costly, and administratively burdensome, frequently requiring post hoc reconciliation and recovery efforts. Given the persistent risk of duplicate discounts, Biocon has, at times, been forced to make challenging business decisions, including exiting certain products due to the unsustainable financial impact. Biocon remains aligned with the overarching objectives of the 340B programnamely, expanding access to lower-cost therapies to better serve patient needs. We are committed to collaborating with stakeholders to develop solutions that advance these goals while minimizing unintended consequences and misaligned incentives. We appreciate the opportunity to provide this feedback. Biocon Biologics Inc. Response to RFI- HRSA 340 Rebate Model Pilot Program Current 340B Exclusion and Validation Process Pharmacy: Evaluate claim data to determine if there are potential matches against the 340B list of Covered Entities published by HRSA. This is established by matching various customer identifiers including the NPI (National Provider Identifier). Additionally, we utilize the information included in the NCPDP monthly data refreshes that can indicate connections to 340B Covered Entities since this is something that pharmacies can self-report. The current process is not the best way to identify 340B claims but absent 340B pharmacy claims data this is the best approach we have to identify 340B and avoid duplicate discounts. Medical: The primary means of determining 340B in Medical claims is through the J-Code Modifier values of JG & TB. This is why it is very crucial that the J-Code Modifier field be included in the list of required data elements. Due to the limited amount of data generally provided for Medical claims, this field is one of the only ways to verify 340B on these claims. A majority of the claims dont have these modifiers but absent 340B Medical claims data this is the best approach we have to identify 340B and avoid duplicate discounts. Medicaid and Managed Care Challenges: In Managed Care, emerging contractual and policy language is increasingly restricting manufacturers ability to identify duplicate 340B claims. For example, managed care customers ask for scrub cap limitations on what can be challenged, as well as limiting our look back period/timeframe to dispute the same. Most manufacturers are limited in their resources to review claims broadly and within these limitations, i.e., timeframes. These limitations further exacerbate the risk of duplicate discounts and reduce the practical mechanisms available to manufacturers to ensure compliance with statutory requirements. Broader Duplicate Discount Risk Across Programs: In addition, the continued expansion of rebate constructs introduces further complexity and increases the likelihood of overlapping discount and rebate liabilities. As these programs evolve, the absence of clear coordination mechanisms heightens the risk of manufacturers providing multiple, unintended price concessions on the same unit of drug. Similar to above, all burden is placed on the manufacturer with similar limitations. Summary: Manufacturers currently rely on contract alignment and retrospective claims data analysis to mitigate duplicate discounts. However, no existing methodology has proven fully effective in consistently linking managed care claims data to the discounts ultimately realized under applicable government programs. As a result, these processes are resource-intensive, costly, and administratively burdensome, frequently requiring post hoc reconciliation and recovery efforts. Given the persistent risk of duplicate discounts, Biocon has, at times, been forced to make challenging business decisions, including exiting certain products due to the unsustainable financial impact. Biocon remains aligned with the overarching objectives of the 340B programnamely, expanding access to lower-cost therapies to better serve patient needs. We are committed to collaborating with stakeholders to develop solutions that advance these goals while minimizing unintended consequences and misaligned incentives. We appreciate the opportunity to provide this feedback.
HRSA-2026-0001-2328Anonymous Anonymous2026-04-20T04:00Z45,115 chars
As a covered entity, we strongly oppose then rebate model pilot program. It would significantly impact the care we would be able to provide to our community. See attached files. Current Administrative Costs Under the Upfront 340B Discount 1. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. 140,586 2. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. i. Internal staffing and program management 1. 340B program pharmacist and technician personnel 2. Compliance and audit teams ii. Third-party vendor costs 1. Split-billing software platforms (multiple) 2. Third-party administrators (TPAs) personnel 3. Contract pharmacy administration fees 4. Data analytics and audit support vendors iii. Contract pharmacy-related expenses 1. Dispensing fees iv. Compliance and oversight 1. Internal audits and monitoring 2. External audit support 3. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. i. Staffing and labor hours 1. Ongoing eligibility tracking, diversion prevention, and duplicate discount monitoring require significant human oversight. ii. IT systems and infrastructure 1. Split-billing software is essential to accurately tracking eligible prescriptions and maintaining compliance. 2. Integration with EHRs, pharmacy systems, and wholesaler data feeds. iii. Third-party vendors 1. TPAs and contract pharmacy administrators manage complex multi- entity arrangements iv. Compliance activities 1. Routine internal audits and HRSA audit preparedness 2. Maintenance of documentation and policies 3. Continuous staff training v. Contract pharmacy complexity 1. Managing multiple contract pharmacy relationships increases reconciliation and oversight costs. Administrative Costs Under a Potential 340B Rebate Model Pilot Program 1. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one- time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. i. Start Up Cost: 1. Administrative ($300,000): 1 pharmacist, 1 technician, IT technical support, legal and compliance review, staff training, financial department reconciliation 2. Operational ($500,000+): On hand cash for initial WAC purchases, TPA Setup cost for rebate tracking, EMR redesign and integration ii. Ongoing Cost: 1. Administrative ($300,000): 1 pharmacist, 1 technician, and IT technical support to support claim reconciliation and disputes, financial department reconciliation 2. Operational ($500,000): Lag time between WAC purchase and rebate receipt, TPA annual cost, EMR redesign and integration 2. Describe the methodology and assumptions used to develop these estimates. Cost was based on current model program where all 340B purchases have an upfront discount. Technological and administrative processes will undoubtably be impacted drastically. Covered entities will spend countless hours tracking rebates and ensuring if patients qualify for MFP or 340B. 3. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. i. Cash flow tracking and accounting adjustments ii. Denial management and dispute resolution iii. Enhanced auditing 4. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? A potential 340B Rebate Model Pilot Program could offset administrative and operational costs through a combination of per-claim administrative fees, percentage-based add-ons to rebates, upfront infrastructure funding, and centralized support tools, ensuring that covered entities are compensated for the full scope of new activities such as claim identification, submission, reconciliation, and dispute resolution. 5. Comment on the impact of these incremental costs under your current operations. All cost attributable to the rebate model program have been the responsibility of our CE. These costs have included, but are not limited to additional personnel, entity software support, and TPA program support. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program 1. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). i. Implementation of a potential 340B Rebate Model Pilot Program would likely require both additional full-time employees (FTEs) and some reallocation of existing staff time away from patient care to administrative tasks. 1-2 FTEs are needed to support functions such as claims identification, submission, and denial management. Absent new staffing, existing pharmacy, billing, and compliance staff could shift a portion of their time from clinical or patient-facing responsibilities to focus more on the pilot program. 2. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We have added 1 FTE to support all preliminary rebate task, but will surely need more FTEs once the program is fully operational and we can gauge the workload. I anticipate these additional staff to serve in a permanent fashion for program support. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program 1. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program i. Implementation of a potential 340B Rebate Model Pilot Program would require enhanced accounting services for revenue cycle management, new TPA add on to support the pilot, and internal IT modifications for claim identification, tracking, and reconciliation. Upgrades to EHRs, pharmacy management platforms, and secure data exchange interfaces (e.g., APIs) would be a necessity. Additional capabilities for data validation, duplicate detection, and audit/reporting would also be required. These investments are essential to ensure accurate, timely rebate processing and compliance. 2. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. i. Cost would likely vary as we gauge the complexity of the program. We anticipate the initial cost to be upwards $250,000+. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program 1. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. i. Implementation would result in one-time costs such as TPA system upgrades, legal review, staff training, and external consulting support, as well as recurring costs including ongoing compliance monitoring, and auditing support. Additional administrative burden may also require incremental staffing or reallocation of existing resources. These costs could be significant during initial implementation and persist at a lower level over time. 2. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). i. As a large, integrated health system with both urban and rural service areas, participation may be influenced by variation in infrastructure across sites, patient volume, and existing 340B program complexity. Rural hospitals and affiliated clinics may face greater resource constraints and limited administrative capacity, impacting scalability and consistency of implementation. 3. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. i. The program could create cash flow delays and administrative burden that may limit resources available to support patient care programs. This may result in reduced availability of discounted drugs, tighter formularies, or scaling back of uncompensated care services, particularly in underserved areas. Over time, this could negatively affect access to medications for vulnerable patient populations. Payment Timing and Potential Cash Flow Impacts for Covered Entities 1. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. i. A 10-day rebate payment timeline may partially mitigate but not eliminate cash flow risk, as entities must still purchase drugs upfront. Any delays or denials could create short-term liquidity strain, particularly given the high volume of uninsured and underinsured patients. 2. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. i. Typical wholesaler contracts require payment within 1530 days, generally consistent across 340B and non-340B drugs, though 340B pricing provides upfront cost relief rather than delayed reimbursement. 3. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. i. Wholesalers often offer prompt pay discounts (e.g., 12%) for payment within 1015 days, creating incentives for early remittance that improve margin and cash flow. 4. State the average number of calendar days within which your organization typically remits payment under these contracts. i. Hospital systems typically remit payment within 1020 days to take advantage of discounts and maintain favorable supplier relationships. 5. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. i. A rebate-based model would shift from upfront discounts to delayed reimbursement, increasing working capital requirements and financial exposure. Alternative arrangements such as advance payments, shorter rebate timelines, or hybrid discount/rebate models could help mitigate these impacts. 6. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. i. The program could include enforceable deadlines, standardized electronic submission requirements, automated tracking, and financial penalties or interest for late payments. Transparency through reporting and audit mechanisms would further support compliance. 7. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. i. Cash flow impacts could be mitigated through prospective payments, minimum rebate guarantees, centralized clearinghouses, or access to short-term financing mechanisms. A hybrid model maintaining partial upfront discounts would further reduce financial risk for covered entities. Rebate Denials A) Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. i. Our organization supports the inclusion of more specific guardrails in a potential 340B Rebate Model Pilot Program to ensure that rebate denials are limited to appropriate, well-defined circumstances. A. Without clear parameters, there is a significant risk of: 1. Inconsistent denial practices across manufacturers 2. Administrative burden on covered entities to investigate vague or unsupported denials 3. Cash flow disruptions for safety-net providers relying on timely rebate recovery 4. Guardrails should prohibit broad or discretionary denial categories such as insufficient information. They should also Include auditability standards, ensuring all denials can be retrospectively reviewed by regulators 2. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. A) Implementing clear guardrails and standardized denial processes is essential to ensure that rebate denials are: i. Appropriate and limited in scope ii. Transparent and well-documented iii. Efficiently resolved B) Manufacturers should be required to use a uniform denial notification format that includes: i. Claim identifier (e.g., prescription number, date of service) ii. National Drug Code (NDC) iii. Covered entity identifier iv. Specific denial reason code (from a standardized list) v. Detailed explanation of denial rationale vi. Sufficient appeal window vii. Supporting documentation (or clear description of documentation available upon request) viii. Clear dispute escalation pathway These measures will reduce administrative burden, improve compliance, and support the overall success of the 340B Rebate Model Pilot Program. Data Collection by Covered Entities 1. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. i. Our organization collects and maintains 340B program data through integrated pharmacy and billing systems, supplemented by third-party vendors for tracking and reporting. Data is retained according to regulatory and audit requirements. 2. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). i. We use automated validation checks and internal audits to ensure data accuracy, completeness, and consistency. Discrepancies are reviewed and corrected promptly. 3. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. i. A 340B Rebate Model Pilot Program would require expanded claim-level data capture and reporting, including contract pharmacies, with ongoing adjustments to maintain accuracy and compliance. 4. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. i. Necessary elements include NDC, patient or claim-level identifiers, date of service, covered entity ID, contract pharmacy ID, and payment/rebate codes. 70% of these elements are currently available. However, accessing these elements through existing EHR systems and third-party vendors is challenging. 5. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. i. Guardrails should include data encryption, role-based access, HIPAA-compliant data sharing, and formal agreements with third parties. Only de-identified or aggregated data should be publicly reported to mitigate privacy risks. Manufacturer Efforts to Avoid Duplicate Discounts 1. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices i. Our organization has technological mechanisms in place with our TPA that helps prevent 340B and Medicaid rebates on the same drugs. Claims are audited monthly to ensure they are processed as they should. 2. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record- maintenance practices. i. All claims are reviewed monthly as we have noticed inaccurate data within the MFP platform. Disputes have been initiated. The administrative burden has been much more than we anticipated. 3. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. 4. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). i. Key challenges include data availability across disparate systems, timing mismatches between claims submission and rebate processing, and accurately linking patient-level identifiers to both 340B and CMPs. Escalation of claims that have been identified incorrectly has been very tedious. 5. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. i. Manufacturers need NDC, date of service, patient or claim-level identifiers, covered entity ID, and payment/rebate codes to detect duplicates. A 340B Rebate Model Pilot Program provides centralized, standardized claim-level data as an additional or alternative source to improve accuracy and reduce administrative burden. Required Reporting 1. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? i. Manufacturers should submit cost to produce drugs and revenue generated monthly. They should also claim-level rebate data, including NDC, covered entity identifier, date of service, denial reason (if applicable), and rebate amount. Data should be submitted monthly to allow timely oversight and compliance monitoring. 2. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? i. HRSA should share revenue data along with denial rates/reasons. They should also report trends by manufacturer and drug class on a monthly basis, ensuring transparency while protecting proprietary information. 3. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? i. Data should be collected monthly and retained for at least 3yea rs to support program evaluation, trend analysis, and audit purposes. This duration allows sufficient time to assess financial, operational, and compliance impacts of the pilot. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot 1. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. i. A rebate model could improve program integrity through enhanced claim-level visibility and auditability but may also introduce operational complexity and risk of inappropriate denials if not well-structured. 2. Explain whether a rebate-based model would assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; reduce diversion or improper claims; and increase pricing transparency across stakeholders. i. A rebate-based model could help manufacturers validate claims. The CMS program is currently misidentifying 340B and MFP claims. I do not believe the 340B rebate model would help with the current confusion that already exist. It could also increase pricing transparency, though gains may be limited without standardized reporting and analysis. 3. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden i. Standardized data formats, claim-level identifiers, and centralized reporting mechanisms should be required to ensure consistency. Leveraging automated systems and existing data infrastructure can strengthen oversight while minimizing administrative burden. 4. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. i. Potential benefits include improved transparency, stronger audit compliance, and clearer accountability across stakeholders. However, these benefits may be partially offset by increased administrative costs and cash flow challenges, particularly for safety-net providers. Current Administrative Costs Under the Upfront 340B Discount Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. 140,586 Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Internal staffing and program management 340B program pharmacist and technician personnel Compliance and audit teams Third-party vendor costs Split-billing software platforms (multiple) Third-party administrators (TPAs) personnel Contract pharmacy administration fees Data analytics and audit support vendors Contract pharmacy-related expenses Dispensing fees Compliance and oversight Internal audits and monitoring External audit support Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing and labor hours Ongoing eligibility tracking, diversion prevention, and duplicate discount monitoring require significant human oversight. IT systems and infrastructure Split-billing software is essential to accurately tracking eligible prescriptions and maintaining compliance. Integration with EHRs, pharmacy systems, and wholesaler data feeds. Third-party vendors TPAs and contract pharmacy administrators manage complex multi-entity arrangements Compliance activities Routine internal audits and HRSA audit preparedness Maintenance of documentation and policies Continuous staff training Contract pharmacy complexity Managing multiple contract pharmacy relationships increases reconciliation and oversight costs. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. Start Up Cost: Administrative ($300,000): 1 pharmacist, 1 technician, IT technical support, legal and compliance review, staff training, financial department reconciliation Operational ($500,000+): On hand cash for initial WAC purchases, TPA Setup cost for rebate tracking, EMR redesign and integration Ongoing Cost: Administrative ($300,000): 1 pharmacist, 1 technician, and IT technical support to support claim reconciliation and disputes, financial department reconciliation Operational ($500,000): Lag time between WAC purchase and rebate receipt, TPA annual cost, EMR redesign and integration Describe the methodology and assumptions used to develop these estimates. Cost was based on current model program where all 340B purchases have an upfront discount. Technological and administrative processes will undoubtably be impacted drastically. Covered entities will spend countless hours tracking rebates and ensuring if patients qualify for MFP or 340B. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. Cash flow tracking and accounting adjustments Denial management and dispute resolution Enhanced auditing If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? A potential 340B Rebate Model Pilot Program could offset administrative and operational costs through a combination of per-claim administrative fees, percentage-based add-ons to rebates, upfront infrastructure funding, and centralized support tools, ensuring that covered entities are compensated for the full scope of new activities such as claim identification, submission, reconciliation, and dispute resolution. Comment on the impact of these incremental costs under your current operations. All cost attributable to the rebate model program have been the responsibility of our CE. These costs have included, but are not limited to additional personnel, entity software support, and TPA program support. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Implementation of a potential 340B Rebate Model Pilot Program would likely require both additional full-time employees (FTEs) and some reallocation of existing staff time away from patient care to administrative tasks. 1-2 FTEs are needed to support functions such as claims identification, submission, and denial management. Absent new staffing, existing pharmacy, billing, and compliance staff could shift a portion of their time from clinical or patient-facing responsibilities to focus more on the pilot program. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. We have added 1 FTE to support all preliminary rebate task, but will surely need more FTEs once the program is fully operational and we can gauge the workload. I anticipate these additional staff to serve in a permanent fashion for program support. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program Implementation of a potential 340B Rebate Model Pilot Program would require enhanced accounting services for revenue cycle management, new TPA add on to support the pilot, and internal IT modifications for claim identification, tracking, and reconciliation. Upgrades to EHRs, pharmacy management platforms, and secure data exchange interfaces (e.g., APIs) would be a necessity. Additional capabilities for data validation, duplicate detection, and audit/reporting would also be required. These investments are essential to ensure accurate, timely rebate processing and compliance. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. Cost would likely vary as we gauge the complexity of the program. We anticipate the initial cost to be upwards $250,000+. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Implementation would result in one-time costs such as TPA system upgrades, legal review, staff training, and external consulting support, as well as recurring costs including ongoing compliance monitoring, and auditing support. Additional administrative burden may also require incremental staffing or reallocation of existing resources. These costs could be significant during initial implementation and persist at a lower level over time. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). As a large, integrated health system with both urban and rural service areas, participation may be influenced by variation in infrastructure across sites, patient volume, and existing 340B program complexity. Rural hospitals and affiliated clinics may face greater resource constraints and limited administrative capacity, impacting scalability and consistency of implementation. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. The program could create cash flow delays and administrative burden that may limit resources available to support patient care programs. This may result in reduced availability of discounted drugs, tighter formularies, or scaling back of uncompensated care services, particularly in underserved areas. Over time, this could negatively affect access to medications for vulnerable patient populations. Payment Timing and Potential Cash Flow Impacts for Covered Entities Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. A 10-day rebate payment timeline may partially mitigate but not eliminate cash flow risk, as entities must still purchase drugs upfront. Any delays or denials could create short-term liquidity strain, particularly given the high volume of uninsured and underinsured patients. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Typical wholesaler contracts require payment within 1530 days, generally consistent across 340B and non-340B drugs, though 340B pricing provides upfront cost relief rather than delayed reimbursement. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Wholesalers often offer prompt pay discounts (e.g., 12%) for payment within 1015 days, creating incentives for early remittance that improve margin and cash flow. State the average number of calendar days within which your organization typically remits payment under these contracts. Hospital systems typically remit payment within 1020 days to take advantage of discounts and maintain favorable supplier relationships. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements, and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. A rebate-based model would shift from upfront discounts to delayed reimbursement, increasing working capital requirements and financial exposure. Alternative arrangements such as advance payments, shorter rebate timelines, or hybrid discount/rebate models could help mitigate these impacts. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. The program could include enforceable deadlines, standardized electronic submission requirements, automated tracking, and financial penalties or interest for late payments. Transparency through reporting and audit mechanisms would further support compliance. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. Cash flow impacts could be mitigated through prospective payments, minimum rebate guarantees, centralized clearinghouses, or access to short-term financing mechanisms. A hybrid model maintaining partial upfront discounts would further reduce financial risk for covered entities. Rebate Denials Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. Our organization supports the inclusion of more specific guardrails in a potential 340B Rebate Model Pilot Program to ensure that rebate denials are limited to appropriate, well-defined circumstances. Without clear parameters, there is a significant risk of: Inconsistent denial practices across manufacturers Administrative burden on covered entities to investigate vague or unsupported denials Cash flow disruptions for safety-net providers relying on timely rebate recovery Guardrails should prohibit broad or discretionary denial categories such as insufficient information. They should also Include auditability standards, ensuring all denials can be retrospectively reviewed by regulators Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Implementing clear guardrails and standardized denial processes is essential to ensure that rebate denials are: Appropriate and limited in scope Transparent and well-documented Efficiently resolved Manufacturers should be required to use a uniform denial notification format that includes: Claim identifier (e.g., prescription number, date of service) National Drug Code (NDC) Covered entity identifier Specific denial reason code (from a standardized list) Detailed explanation of denial rationale Sufficient appeal window Supporting documentation (or clear description of documentation available upon request) Clear dispute escalation pathway These measures will reduce administrative burden, improve compliance, and support the overall success of the 340B Rebate Model Pilot Program. Data Collection by Covered Entities Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects and maintains 340B program data through integrated pharmacy and billing systems, supplemented by third-party vendors for tracking and reporting. Data is retained according to regulatory and audit requirements. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). We use automated validation checks and internal audits to ensure data accuracy, completeness, and consistency. Discrepancies are reviewed and corrected promptly. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. A 340B Rebate Model Pilot Program would require expanded claim-level data capture and reporting, including contract pharmacies, with ongoing adjustments to maintain accuracy and compliance. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. Necessary elements include NDC, patient or claim-level identifiers, date of service, covered entity ID, contract pharmacy ID, and payment/rebate codes. 70% of these elements are currently available. However, accessing these elements through existing EHR systems and third-party vendors is challenging. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Guardrails should include data encryption, role-based access, HIPAA-compliant data sharing, and formal agreements with third parties. Only de-identified or aggregated data should be publicly reported to mitigate privacy risks. Manufacturer Efforts to Avoid Duplicate Discounts Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices Our organization has technological mechanisms in place with our TPA that helps prevent 340B and Medicaid rebates on the same drugs. Claims are audited monthly to ensure they are processed as they should. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. All claims are reviewed monthly as we have noticed inaccurate data within the MFP platform. Disputes have been initiated. The administrative burden has been much more than we anticipated. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). Key challenges include data availability across disparate systems, timing mismatches between claims submission and rebate processing, and accurately linking patient-level identifiers to both 340B and CMPs. Escalation of claims that have been identified incorrectly has been very tedious. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. Manufacturers need NDC, date of service, patient or claim-level identifiers, covered entity ID, and payment/rebate codes to detect duplicates. A 340B Rebate Model Pilot Program provides centralized, standardized claim-level data as an additional or alternative source to improve accuracy and reduce administrative burden. Required Reporting What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Manufacturers should submit cost to produce drugs and revenue generated monthly. They should also claim-level rebate data, including NDC, covered entity identifier, date of service, denial reason (if applicable), and rebate amount. Data should be submitted monthly to allow timely oversight and compliance monitoring. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? HRSA should share revenue data along with denial rates/reasons. They should also report trends by manufacturer and drug class on a monthly basis, ensuring transparency while protecting proprietary information. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Data should be collected monthly and retained for at least 3yea rs to support program evaluation, trend analysis, and audit purposes. This duration allows sufficient time to assess financial, operational, and compliance impacts of the pilot. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. A rebate model could improve program integrity through enhanced claim-level visibility and auditability but may also introduce operational complexity and risk of inappropriate denials if not well-structured. Explain whether a rebate-based model would assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; reduce diversion or improper claims; and increase pricing transparency across stakeholders. A rebate-based model could help manufacturers validate claims. The CMS program is currently misidentifying 340B and MFP claims. I do not believe the 340B rebate model would help with the current confusion that already exist. It could also increase pricing transparency, though gains may be limited without standardized reporting and analysis. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden Standardized data formats, claim-level identifiers, and centralized reporting mechanisms should be required to ensure consistency. Leveraging automated systems and existing data infrastructure can strengthen oversight while minimizing administrative burden. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. Potential benefits include improved transparency, stronger audit compliance, and clearer accountability across stakeholders. However, these benefits may be partially offset by increased administrative costs and cash flow challenges, particularly for safety-net providers.
HRSA-2026-0001-2329Baltimore Medical System, Inc.2026-04-20T04:00Z23,144 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Baltimore Medical System, Inc. (BMS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to Community Health Centers (CHCs) posed by the proposed rebate model. Baltimore Medical System has been a cornerstone of care for the community since 1984, growing from four delivery sites into a comprehensive network that serves patients across Baltimore City and eastern Baltimore County. This growth has always been guided by one principle, meeting the needs of patients who might otherwise go without care. Today, BMS delivers integrated, patient- centered services that address not only medical conditions but the broader factors that influence health and wellbeing. A critical part of this work is made possible through the 340B program, which allows BMS to provide affordable medications and reinvest savings into expanded services. For many uninsured and underinsured patients, this program is the difference between receiving treatment and going without it. Without 340B, many of the services that patients rely on every day would simply not exist at the same scale or level of accessibility. BMS has developed innovative models of care that reach patients where they are, including eight school-based health centers within Baltimore City Public Schools. BMS strengthens outcomes through integrated care teams that include clinical pharmacists, behavioral health specialists, and 2 care managers. Patients benefit from coordinated services such as medication management, chronic disease education, and lifestyle support. A 340B rebate model would put all of this at risk by limiting access to affordable medications and forcing difficult treatment changes for vulnerable patients. As the When medications become unaffordable or unavailable, patients face delays, nonadherence, and worsening health outcomes. Protecting the 340B program is essential to sustaining the lifesaving, patient centered work that BMS provides every day. The 340B program is foundational to Baltimore Medical Systems ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on internal analysis, Baltimore Medical System estimates a $4.5 million in additional costs annually and approximately $130,000 in administrative costs. The proposed 340B Rebate Model Pilot Program is a direct threat to BMSs core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled Community Health Centers such as Baltimore Medical System to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Baltimore Medical System, Inc., supports 63,000 patients annually with approximately 25,000 patients utilizing pharmacy services in particular. A 340B rebate model would impact the following: The BMS 340B program funds are directly reinvested into services that patients depend on every day to access, understand, and adhere to their care. If the rebate model is enacted, many of these essential programs, positions, and processes would be significantly reduced or eliminated altogether, with immediate and far-reaching consequences for our most vulnerable populations. One of the most immediate impacts would be the loss of the Pharmacy Assistance Program Coordinator, a role that is critical in helping patients and providers navigate complex manufacturer patient assistance programs. Without this support, many patients, particularly those who are uninsured or underinsured, would face overwhelming barriers to completing applications and securing life-sustaining medications, leading to increased out-of-pocket costs or going without treatment altogether. Equally concerning is the likely discontinuation of our clinical pharmacy model, which has become an integral part of patient care. Our clinical pharmacists work closely with providers to manage prior authorizations for high-cost medications, identify cost-effective therapeutic alternatives, and ensure timely access to treatment. They also play a key role 3 in connecting patients with essential resources, including free blood glucose monitoring kits and supplies for those managing diabetes. Without this layer of clinical and financial coordination, patients would face delays in care, increased costs, and poorer health outcomes. The ripple effects would extend into our quality and value-based care initiatives, where pharmacy teams actively contribute to meeting performance metrics tied to improved patient outcomes. The loss of these efforts would not only diminish care quality but also negatively impact the health systems ability to sustain value-based purchasing agreements that rely on strong clinical outcomes. Additionally, our current free prescription delivery service, relied upon by many chronically ill elderly patients and mothers caring for sick children, would likely be discontinued or transitioned to a fee-based model. For patients with limited mobility, transportation challenges, or caregiving responsibilities, this service is often the only reliable way they can receive their medications. Introducing new costs or removing this service altogether would create significant barriers to adherence and continuity of care. Beyond direct medication access, 340B funding also supports critical wraparound services that address social and communication barriers. We are able to provide interpreter services that ensure patients fully understand their diagnoses, treatment plans, and medication instructions an essential component of safe and effective care. In addition, Health Benefit Advisors serve as navigators, guiding patients through insurance enrollment, financial assistance options, and coordinated care services. These roles are foundational to building trust and helping patients successfully engage in their healthcare. Patients would not only face higher costs and reduced access to medications, but also the loss of the support systems that help them manage chronic conditions, understand their care, and remain connected to the healthcare system. Over time, this would lead to worsening clinical outcomes, increased hospitalizations, and greater strain on an already vulnerable population. At its core, the 340B program allows us to provide compassionate, comprehensive, and accessible care. The rebate model threatens to dismantle these critical supports, replacing stability with uncertainty and access with barriers. For the patients we serve, the consequences would not be theoretical; they would be deeply personal and profoundly harmful. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient experiences and testimonials are a vital part of understanding the true impact of our care model. We actively encourage patients to share feedback in a transparent and open manner, as their voices not only validate the effectiveness of services supported by 340B funding but also guide continuous improvement. This feedback provides real-world insight into how clinical pharmacy services, care coordination, and access programs directly influence outcomes, adherence, and overall quality of life. Maintaining this transparency is essential, particularly as 4 policy decisions are considered that could fundamentally alter or eliminate the very services patients are describing. The following patient examples illustrate not only meaningful clinical improvements, but also the significant financial value associated with this outcome both for patients and the broader healthcare system. Patient one entered care at the end of 2024 with an A1c of 10.8% and, through medication adjustments and close monitoring, reduced her A1c to 6.3% within months. This level of improvement significantly lowers the risk of complications such as neuropathy, kidney disease, and hospitalizations. Based on published estimates, improved diabetes control at this level can reduce annual healthcare costs by approximately $2,500$4,000 per patient by avoiding acute and long-term complications. Patient two shared, When I was told I had Hepatitis C, I didnt know how I was going to pay to see a specialist or afford $25,000 for my medication, but Im glad the health department sent me to Baltimore Medical Systems. Thanks to your clinic, Im cured of Hep C. Through access to 340B- supported services and care coordination, this patient was able to receive curative treatment that would have otherwise been financially unattainable. Hepatitis C treatment regimens can range from $20,000 to $30,000, and curing the disease prevents long-term complications such as liver cirrhosis, liver cancer, and transplant conditions that can exceed $100,000 in lifetime medical costs. The ability to provide this treatment represents both a life-changing clinical outcome and substantial cost savings. Patient three began with an A1c of 13% and, through counseling, medication optimization, and sustained adherence, reduced her A1c to 6.7% by December. Achieving this level of control can prevent high-cost interventions such as emergency department visits or hospital admissions, which average $8,000$12,000 per event. The structured support she received represents an estimated annual cost avoidance of $3,000$5,000. Patient four expressed, I am staying undetectable because of the great work you all are doing at BMS. I am uninsured, but through the sliding fee program, your clinic helps me get my labs and medications at an affordable cost. Thank you so much. Maintaining an undetectable status in the context of chronic conditions such as HIV often requires consistent access to medications and routine laboratory monitoring. Without support, annual medication costs alone can exceed $20,000$40,000, with additional lab and care costs adding several thousand more per year. By ensuring affordability and adherence, the program not only supports the patients. Patient five, presented with an initial A1c of 13.3%, faced significant social barriers, including reliance on fast food due to family circumstances. Through tailored education, practical dietary guidance, and adherence tools such as medication reminders, his A1c improved to 6.8% within six months. This type of intervention not only demonstrates the importance of individualized care but also represents an estimated $3,000$6,000 in avoided annual healthcare costs, particularly by reducing the likelihood of uncontrolled diabetes complications. 5 Patient voices are among the most powerful reflections of the impact of 340B-supported care, and we encourage individuals to share their experiences openly and transparently. These five examples demonstrate that the services supported by 340B funding are not optional enhancements. Their feedback not only highlights the clinical success of these programs but also underscores the very real financial relief and access to care that would otherwise be out of reach. These testimonials represent more than gratitude. They demonstrate measurable outcomes and significant cost avoidance that benefit both patients and the healthcare system. BMS cared for approximately 16,000 diabetic patients of whom ~4,300 had HbA1c> 9%. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. Affordability of insulin is a matter of life and death. Patient feedback and outcomes clearly illustrate the value of our current 340B-supported care model. These services are essential, high-impact interventions that improve outcomes, reduce costs, and strengthen patient trust and engagement. Preserving this structure is not only a matter of operational sustainability It is a matter of protecting access, improving health outcomes, and ensuring that vulnerable patients continue to receive the comprehensive, compassionate care they need. The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Baltimore Medical System would have to hire two full- time staff due to the demand for reporting 340B rebate claims. With the change to a model with the ten drugs, depending on the volume of prescriptions a pharmacy fills for drugs, BMS will face an increased administrative burden in terms of monitoring rebate claims and payments. For BMS, the proposed rebate model adds significant complexity that could undermine contract pharmacy partnerships and limit patient access to medications. Our health center currently works with about 55 pharmacies to ensure patients can obtain affordable prescriptions, but this model would increase reliance on third party administrators, leading to higher fees that are passed on to us. It would also create delays and administrative burdens, as staff would need to track and verify claims across more than 60 pharmacy locations to ensure rebates are properly processed. Most concerning, this model shifts financial risk onto pharmacies, which may cause many of our partners to leave the program altogether rather than manage the added burden. In areas like Baltimore City and Eastern Baltimore County, where access is already limited, this could leave patients with few or no affordable options, worsening an already growing pharmacy access crisis. Under the proposed 340B Rebate Model Pilot, BMS would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish BMSs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force BMS to make difficult decisions about how to allocate their limited financial 6 resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. BMS pharmacies as well as our contract pharmacies will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at Wholesale Acquisition Cost (WAC). The rebate model creates confusion about its impact on a Community Health Centers ability to offer sliding-fee discounts at the point of purchase. BMS is deeply concerned that requiring drugs to be purchased at full wholesale acquisition cost will create serious cash flow challenges and may push the organization beyond its credit limits with wholesalers, potentially disrupting the ability to maintain medication supply. Although rebates are expected within 10 days after data submission, prior models allowed up to 45 days to submit that data, extending the total time from dispensing to reimbursement to as much as 55 days. This delay is especially burdensome for BMS because it operates its own pharmacies and must maintain physical inventory purchased at full cost, resulting in a typical purchase to rebate cycle of 40 to 55 days and placing additional strain on already limited financial resources. If BMS is forced to pay for medications upfront at WAC prices, this would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. BMS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Baltimore Medical System urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to function as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of approximately $600,000 This is a sum BMS cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This will force BMS to estimate rebate amounts, creating unpredictable financial losses and the potential to 7 undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for BMS and other CHCs. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for BMS and other CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Given the significant disruption the 340B rebate model is expected to cause for community health centers, requiring submission of data that manufacturers already have is redundant and adds unnecessary administrative burden. HRSA should require manufacturers to use existing data sources to avoid placing additional strain on safety net providers and to preserve the stability the 340B program is intended to support. Baltimore Medical System, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. At its core, this issue is about people, not policy. Baltimore Medical System, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. It is about patients who are working to manage chronic illnesses, parents trying to keep their children healthy, and individuals who rely on Baltimore Medical System as their only consistent source of care. The 340B program makes it possible for these patients to access affordable medications and the comprehensive, wraparound services that support their health. Without it, many would face impossible choices between paying for medications and meeting basic needs. A rebate model risks disrupting this delicate balance. It introduces delays, uncertainty, and financial barriers that community health centers and their patients are not equipped to absorb. For the patients BMS serves, even a short gap in access can lead to missed doses, worsening conditions, and avoidable complications. These are not abstract risks. They are real consequences that impact health, stability, and quality of life. Community health centers operate with a clear mission to serve those who have nowhere else to turn. The flexibility and immediate savings provided by the current 340B structure allow centers like BMS to respond in real time to patient needs, expand services, and invest in programs that address the root causes of poor health outcomes. A rebate model would undermine that responsiveness and limit the very services that make this care model effective. Excluding community health centers from the 340B rebate model is not simply a policy preference. It is a necessary step to protect access, preserve continuity of care, and ensure that the most vulnerable patients are not left behind. Safeguarding the current structure allows health centers to continue delivering high quality, patient centered care without interruption. We respectfully urge that community health centers be excluded from the 340B rebate model so that organizations like Baltimore Medical System can continue to do what they have always done, meet patients where they are, care for them with dignity, and ensure that no one is denied the treatment they need because of cost. Baltimore Medical System, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Baltimore Medical System, Inc., 8 appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this critical issue. If you have any questions, please contact Dawn Jacobs, PharmD, VP of Pharmacy Operations at Dawn.Jacobs@bmsi.org Sincerely, Shirley Sutton Baltimore Medical System, Inc. President and CEO
HRSA-2026-0001-2330Midtown Community Health Center, Inc.2026-04-20T04:00Z41,449 chars
Midtown Community Health Center resepectfully submits the following comments and urges HRSA to exclude Community Health Centers (CHCs) from the 340b Rebate Model. As key safety net providers in our community, the 340B program provides costs savings to eligible citizens who are low income, underserved and uninsured. Please see the attached file. April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Midtown Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to send comments and for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model will harm our pharmacy operations and our entire organization. Financial Losses: Midtown Community Health Center anticipates a loss of approximately $255,000 from entity-owned pharmacy operations. Projected Cost Increases: Midtown Community Health Center expects that our operational costs will increase by nearly $210,000 annually just to manage the pilot. This includes additional staff time and resources to manage the 340B Rebate Program. Midtown already has a lean team of administrators. Management of the rebate program would deter resources from our primary mission of providing high quality health care services to underserved communities Midtown Community Health Center has served the Northern Utah Community for over thirty years. In 2025, more than 24,000 unique patients were served across 67,830 visits. Midtown is highly responsive to the needs of the patient population and understands the unique challenges vulnerable populations face in accessing healthcare services, with 90 percent of Midtown patients living at or below 200 percent of the federal poverty guidelines. In addition, 42 percent of Midtown patients lack insurance coverage. Despite these challenges, Midtown remains resilient in its mission to improve the overall health of the community by providing affordable, high-quality services. Every dollar lost in revenue is a loss to patient services. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients nationwide who rely on us. For Midtown Community Health Center in particular, this means it will impact: 45,000 340B transactions 24, 238 individuals served annually 42 percent of uninsured patients Current administrative costs reflect $332,628 in required support from pharmacists, supervisory staff and administrative staff time Midtown relies on 340B cost saving to ensure patients can access supportive services including care coordination and case management, enrollment assistance for public programs including Medicaid, CHIP, WIC and SNAP. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Utahs CHCs serve a larger percentage of uninsured patients than our counterparts in other states; across all of Utahs heath centers, nearly 49% are uninsured1. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non-adherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 1 https://data.hrsa.gov/topics/healthcenters/uds/overview/state/UT/table?tableName=9D 3 of illnesses like diabetes, hypertension, and obesity.2 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are very few and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.4 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.5 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.6 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,7 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted 2 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 6 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 7 2025 UDA Data, HRSA (hrsa.gov) 4 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. Midtown Community Health Center will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. 340B Rebate Model Operational & Administrative Cost Calculator Description To estimate the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, we used the Operational & Administrative Cost Calculator created by NACHC and their consultant, FQHC 340B Compliance. Our organization has already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in our already- strained operational capabilities. Sliding Fee Discount: Midtown Community Health Center provided $6,759,477 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Midtown Community Health Center anticipates needing a minimum of 0.25 FTE Pharmacist, 0.25 FTE Quality and Compliance staff time, and 0.1 FTE IT staff time to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. In addition, current administrative staff will assume various responsibilities to ensure appropriate compliance and monitoring processes are in place. 5 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Midtown Community Health Center anticipates needing a minimum of 0.25 FTE Pharmacist to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Total additional cost for program implementation and monitors is estimated at $60,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, we will face an increased administrative burden in terms of monitoring rebate claims and payments. Midtown Community Health Center anticipates an additional 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force us to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. If the rebate model is adopted, Midtown Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes We encourage HRSA to consider the increased compliance burdens if manufacturers continue to have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs could continue to increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that further diminish our 340B savings. Total Cost: For our CHC, which serves 24,238 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,000. This includes costs related to salaries and benefits, IT, and interest charges, lost discounts, and missed rebates annually. The In-House Pharmacy: The Burden of Deep IT Integration To remain compliant, our in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend an estimated minimum of 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Our primary concern here is the delay in prescription services for patients. Midtown does not have the budgetary means to add staff to support increased activity, and would have to delay services when key pharmacy staff is stepping away to complete related duties, thus impeding the delivery of high-quality patient services. 6 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.8 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. For the above reasons, CAD drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full 8 Internal NACHC survey data 7 WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.9 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.10 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to theoretically arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).11 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. In addition, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC will take a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay 9 HRSA FAQ 10 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 11https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 rebates within 10 days of both initial and corrected determinations. We further request that a clear appeal process be spelled out that manufacturers must comply with. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B12 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.13 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $195,000 additional per month to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends approximately $2000 to purchase these same drugs at the 340B ceiling price. This represents a 9650% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously 12 https://340bpricing.hrsa.gov/ 13 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Midtown Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as care coordination services and enrollment assistance for key public programs. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund supportive services staff, including care coordinators and case managers, positions who are key to supporting our patients in meeting their treatment goals. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 10,180 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Midtown Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discounts. However, Midtown Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $30,750. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. 10 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate crises or facility emergencies. To navigate the rebate model, our organization would be forced to reduce services or secure a line of credit to ensure we can obtain the appropriate level of medication. This is not a sustainable solution, rather it would force CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where underserved patients heavily rely on Midtown Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Midtown Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those 14 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $29,250. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges 14 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they are required to provide a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and must follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten 12 the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse Instead of implementing the 340B Rebate Model, we recommend OPA establish a Neutral Claims Clearinghouse (NCC), which would produce more accurate information at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary information to assess potential duplicate discounts within the same 45-day timeframe. If the 340B Rebate Model is implemented, this would improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is redundant and adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety- net providers that the 340B program was designed to support. Conclusion Midtown Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would have to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discounts, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Midtown Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 13 Midtown Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me directly at amartinez@midtownchc.org. Sincerely, Alicia Martinez Midtown Community Health Center
HRSA-2026-0001-2331(no commenter metadata)2026-04-20T04:00Z4,698 chars
See attached file(s) Los Angeles County Board of Supervisors Hilda L. Solis First District Holly J. Mitchell Second District Lindsey P. Horvath Third District Janice K. Hahn Fourth District Kathryn Barger Fifth District Christina R. Ghaly, M.D. Director Nina J. Park, M.D. Chief Deputy Director, Clinical Affairs & Population Health Aries Limbaga, DNP, MBA Chief Deputy Director, Operations Elizabeth M. Jacobi, J.D. Administrative Deputy The Alhambra 1000 S. Fremont Ave. Alhambra, CA 91803 Tel: (213) 288-8050 Fax: (213) 481-0503 www.dhs.lacounty.gov To advance the health of our patients and our communities by providing extraordinary care www.dhs.lacounty.gov April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs, Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Submitted electronically to regulations.gov RE: 340B REBATE MODEL PILOT PROGRAM HHS DOCKET NO. HRSA-2026-03042 Dear Director Britton: Thank you for the opportunity to submit comments on the Request for Information (RFI): 340B Rebate Model Pilot Program [HHS Docket No. HRSA-2026-03838] As the second-largest public healthcare system in the country, Los Angeles County Department of Health Services (LA Health Services) facilities care for more than 500,000 people annually, regardless of insurance, income, or immigration status in four medical centers, 23 community health centers, correctional health, and directly on the streets through mobile teams. More than three decades ago, Congress created the 340B Program to help safety-net hospitals and clinics to maintain access to essential medications for vulnerable populations, including low-income and rural patients. Administered by the Health Resources and Services Administration (HRSA), the 340B Program allows safety-net providers, such as Health Services, to purchase discounted drugs from manufacturers. According to the HRSA, disproportionate share hospitals account for more than 75 percent of 340B purchases. The increasing cost of prescription drugs in the United States has become a source of growing concern for medical professionals, healthcare plans, patients, and policy makers as prescription drug spending continues to increase rapidly year over year. Drugmakers that want to take part in Medicare or Medicaid must offer their medicines at a discount typically, 25 percent to 50 percent, but sometimes higher to participating hospitals and clinics. Director Chantelle Britton April 20, 2026 Page 2 of 2 The RFI seeks comments on several issues, including the potential cash-flow impacts of a 340B Rebate Model Pilot Program. This is of great concern for LA Health Services, as it would create devastating and unsustainable financial challenges for the departments healthcare operation. A rebate model would fundamentally alter the current upfront discount model by requiring covered entities to purchase drugs at market price and later seek reimbursement through manufacturer-administered rebates. This approach introduces several critical risks that affect both financial stability and the real-world ability to deliver timely, reliable care. Covered entities would be required to front substantially higher drug acquisition costs in already constrained environments, creating immediate cash flow pressures. At the same time, tracking, validating, and reconciling rebates at scale introduces significant administrative complexity and variability across manufacturers. Manufacturer controlled rebates will create and introduce significant uncertainty and inconsistency to 340B pricing. As such, a 340B Rebate Model Pilot Program would have an immediate and devastating impact to Health Services ability to provide services. By eliminating rebates upfront, a rebate model would substantially increase costs that are not feasible especially when considered in the context of funding cuts to Medicaid and other safety net programs under H.R. 1, the One Big Beautiful Bill Act. For these reasons, we strongly urge HRSA to heed the views of safety net providers like LA Health Services and abandon a 340B Rebate Model Pilot Program. We urge you to maintain the 340B Program as it is currently structured with upfront discounts. If you have any questions, you may contact me, or your staff may contact Jean Pallares, Director of Pharmacy Services, by email at jpallares@dhs.lacounty.gov. Sincerely, Christina R. Ghaly, M.D. Director CRG:rgp
HRSA-2026-0001-2332East Arkansas Family Health Center2026-04-20T04:00Z13,920 chars
See attached file(s) 00ILY z at e,p .0 East Arkansas Family Health Center Accredited by Joint Commission Member of BBB Preventive Health Care for a Healthier Tomorrow April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Infortnation: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Director Britton: East Arkansas Family Health Center respectfully submits these comments in response to the Health Resources and Services Administration's Request for Information on the 340B Rebate Model Pilot Prograrn. East Arkansas is a federally qualified health center headquartered in West Memphis, Arkansas, and has participated in the 340B Drug Pricing Program since its inception in December 1992. Over the course of more than three decades, our organization has constructed its pharmacy operations, its staffing model, and its financial planning around the upfront discount mechanism through which the 340B program has functioned continuously. The proposed rebate model would require us to disrnantle and reconstruct those systems under conditions that the preparatory period preceding the 2026 pilot demonstrated to be operationally impracticable and financially untenable. Summary of Concerns East Arkansas Family Health Center objects to the proposed 340B Rebate Model Pilot Prograrn on five principal grounds. First, the financial exposure associated with converting upfront discounts to prospective rebates would impose working capital demands that our organization cannot absorb and that no rural lender in our service area will underwrite. Second, our wholesaler credit arrangements are set against 340B acquisition pricing and cannot accommodate purchasing at Wholesale Acquisition Cost; the 2026 preparatory period confirmed this directly. Third, the reconciliation infrastructure proposed by manufacturers for the 2026 pilot is insufficient to support reliable adjudication of rebate claims and creates material denial risk. Fourth, the rebate model cannot deliver the 340B price at the point of sale and therefore conflicts with the requirements of Executive Order 14273. Fifth, the deduplication objective that motivates the rebate proposal can be achieved through less burdensome alternatives already 900 North Street West Memphis. Arkansas 72301 Phone: (870) 735-3842 Fax: (870) 394-4817 ADAC: (870) 735-3291 417 West Main Street Trumann, Arkansas 72472 Phone: (870) 483-1025 Fax: (870) 4B3-1057 605 North 2' Street Blytheville. Arkansas 72315 Phone: (870) 532-6001 Fax: (870) 532-6008 102 West Broad Street Lepanto. Arkansas 72354 Phone: (870) 475-2977 Fax: (870) 475-3440 513 Porter Helena. Arkansas 72342 Phone: (370) 817-0122 Fax: (870) 817-0058 216 Arkansas St. Earle, Arkansas 72331 Phone: (870) 792-7676 Fax: (870) 792-7698 1008 West Main Street Marvell, AR 72366 Phone: (870) 829-1194 Fax: (870) 470-5037 under development, including a neutral claims clearinghouse and the improved use of manufacturer clairns data already being collected. The Patient Population East Arkansas Serves East Arkansas Family Health Center (EAFHC) cared for 22,078 patients in the most recent reporting period. Eighty-eight percent of those patients live at or below 200% of the federal poverty level, and sixty-four percent live at or below 100%. Approximately thirty-two percent are uninsured. Twenty-eight percent are enrolled in Medicaid, and twenty-one percent in Medicare. Seventy-two percent of our patients belong to racial or ethnic minority groups. Sixty- four percent of our patients are adults between the ages of 18 and 64. In the most recent reporting period, our clinical teams cared for 344 prenatal patients and managed 200 of them through delivery. The clinical profile of our patient population reflects the chronic disease burden characteristic of the communities we serve. Roughly forty percent of our adult patients are managing hypertension, twenty percent are managing diabetes, and our HIV patient panel is among the larger such panels maintained by federally qualified health centers in our region. Many of the medications that treat these conditions are on the 2026 and 2027 MFP drug lists. The uninterrupted affordability of those medications is integral to our clinical outcomes. Financial Impact of a Rebate Model on East Arkansas Our current 340B acquisition cost on drugs included on the 2026 and 2027 MFP lists is approximately $3 million per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $18 million per year. The difference between the two figures approximately $15 million is the working capital our organization would be required to float to drug manufacturers eveiy year the rebate rnechanisrn operated. That float is not a one-time implementation expense; it recurs throughout every year the mechanism is in place, and it cornpounds against our cash position until rebates are collected on manufacturer- controlled terms. The MFP drug list represents 10% of our total 340B program on a combined 2026-2027 basis. That proportion, while lower than the MFP share at many of our peer organizations, understates our exposure. If the rebate mechanism is extended beyond the MFP drug list to the full 340B formulary and there is no principled basis on which to assume it will remain permanently confined the annual working capital requirement grows to approximately $25 million. Our extension exposure alone exceeds $10 million. East Arkansas does not catty cash reserves of that magnitude. No rural community bank will extend a line of credit of that size against the promise of manufacturer reimbursement on contested rebate claims. Independent of the rebate proposal, the Medicare Drug Price Negotiation Program has already compressed our net 340B savings on affected products by 20% in the first quarter of 2026. This reduction is already embedded in our 2026 operating projections. Adding rebate-model cash demands on top of that is the specific policy choice HRSA is being asked to authorize. Wholesaler Credit Capacity EAFHC operates through a combined network of in-house pharmacies and contracted pharmacies. Our wholesaler credit limits on both sides of the operation were set against 340B acquisition pricing. In the weeks preceding the planned 2026 rebate pilot, our wholesaler representatives informed us directly that they were not prepared to extend credit limits sufficient to support ordering at Wholesale Acquisition Cost for the pilot drugs. When credit limits are exceeded, orders are held, replenishment stops, and the 340B program ceases to function. A rebate model does not reduce cash demand in the pharmacy supply chain. It advances the cash demand in time and requires a party in the chain the wholesaler, the covered entity, or the contract pharmacy to underwrite it. None of the parties in our operating environment possesses the balance sheet to do so. Reconciliation Infrastructure Our operational and finance teams reviewed the third-party vendor interface that manufacturers selected for rebate adjudication in advance of the planned 2026 start. The available data and reporting were not sufficient to support a reliable or even practical reconciliation process. The vendor cited HIPAA compliance as the basis for its decision not to retain prescription numbers on claims. That reasoning is not persuasive; any vendor entrusted with an adjudication function of this magnitude should be prepared to meet the security requirernents necessary to retain and report Rx numbers to its system users. Without claim-level detail, a denial cannot be matched to a specific dispense, a corrected reason code cannot be applied, and the cash loop on the transaction cannot be closed. Applied to our MFP volume, a five percent denial rate which we consider a reasonable planning assumption based on how manufacturer adjudication processes have functioned historically would place approximately $890,000 at risk each year the mechanism remains in place. Higher denial rates, which manufacturers have imposed in other contexts, would scale that exposure. Point-of-Sale Mechanics and Executive Order 14273 EAFHC operates through both a contract pharmacy network and an in-house pharmacy network. Under the current architecture, the 340B benefit reaches our patients at the point of sale because the adjudication process incorporates our current 340B acquisition cost. The proposed rebate model changes that architecture. The pharmacy acquires the drug at Wholesale Acquisition Cost, and the 340B benefit is reconciled afterward. We appreciate that IIRSA has attempted to mitigate this problern through the proposal of an ad hoc ceiling price file for rebate-covered drugs. However, our third-party administrators and our dispensing software vendor were not positioned to operationalize that file in the narrow Iead time before the planned 2026 start. The technical engineering required to consume a new price file, reconcile it against manufacturer rebate submissions, and apply it accurately at adjudication is not a minor undertaking. Two outcomes at the pharmacy counter are foreseeable under a rebate model, and neither is acceptable. The pharmacy dispenses a product we purchased at the Wholesale Acquisition Cost and EAFHC floats the cost until rebate, carrying the risk of an outright denial. The claim adjudicates with a Wholesale Acquisition Cost that is passed on to the patient, and the patient more than likely walks out without the therapy they require. When our patients go without these medications, unnecessary hospitalizations occur, amputations occur, thrombotic events occur, early deaths occur. Each of these outcomes is inconsistent with the function of a safety-net provider as the 340B statute has been understood to date. This issue also presents a direct conflict with Executive Order 14273, which instructs the Department of Health and Human Services to preserve access to 340B pricing at the point of sale for patients who depend upon it. A rebate mechanism, by its architecture, cannot deliver the 340B price at the point of sale. A single policy cannot satisfy both the Executive Order and the rebate model as currently proposed. Administrative Burden FIRSA's Inforrnation Collection Request estimates the administrative burden associated with a rebate model at approxirnately five hours per week per covered entity. That estimate is materially inconsistent with our observations during the 2026 preparatory period. Based on the claims volume across the combined 2026-2027 MFP Iist, EAFHC estimates approximately 1.0 additional full-time-equivalent staff resource dedicated to rebate submission, denial management, reconciliation, and cash forecasting. That staffing requirement represents a cost that does not exist within our current operating budget and would be funded from the same resource pool that supports clinical services. A Less Burdensome Path to Deduplication East Arkansas Family Health Center acknowledges that the Medicare Drug Price Negotiation Program creates a legitimate need for a mechanism to prevent duplication between MFP and 340B discounts. The rebate model, however, is not the least burdensome tool available for that purpose, and it is the most expensive such tool from the perspective of the covered entity. A neutral 340B claims clearinghouse administered by or designated by HRSA would accomplish the cleduplication obj ective without requiring the rebate infrastructure described above. Covered entities would report 340B claims to a single source of truth that manufacturers and the Centers for Medicare & Medicaid Services could both reference. CMS has already initiated development of such a framework through thc 340B claims repository finalized in the CY 2026 Physician Fee Schedule. That architecture preserves the upfront discount, removes manufacturers from an adjudication role in which they have an evident eommercial interest, and does not transfer the operational and financial risks of a rebate mechanism to the safety-net healthcare providers this country's most vulnerable patients rely on. A second alternative relies on the manufacturer claims data that is already being collected from covered entities. Manufacturers currently require 340B claims data as a condition of 340B access (now at both in-house and contract pharmacies). That data is sufficient to support MFP/340B deduplication without the construction of a parallel rebate adjudication infrastructure. One operational refinement is warranted: for new pharmacy accounts, or for existing accounts that do not yet have claims history at the time a. data requirement is imposed, manufacturers should be required to accept an attestation of compliance rather than withholding 340B access pending the submission of data that does not yet exist. Request For the reasons set forth above, East Arkansas Family Health Center respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program in its current form; that any rebate mechanism subsequently proposed exempt fderally qualified health centers; and that the deduplication question be directed to the neutral clearinghouse framework already under development at CMS, or to the existing manufacturer claims data mechanism with the attestation accommodation described above. We appreciate HRSA's consideration of these comments and remain available to provide additional data or operational detail as may be useful to the agency's review. Susan Ward-Jones, MD Chief Executive Officer East Arkansas Family Health Center West Memphis, Arkansas 340B ID: CH060140
HRSA-2026-0001-2333Anonymous Anonymous2026-04-20T04:00Z41,929 chars
See attached file(s) 17th April, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Henry J. Austin Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Henry J. Austin Health Center anticipates a loss of $500000 from entity- owned pharmacy operations and Impact Annual revenue for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Henry J. Austin Health Center (HJAHC) is a federally qualified health center and the largest non- hospital-based ambulatory care provider in Trenton, New Jersey. For nearly 60 years, HJAHC has provided high-quality, comprehensive, and culturally responsive care to medically underserved communities, regardless of a patients ability to pay. Services include primary care, behavioral health, dental care, and clinical pharmacy, delivered through a coordinated, patient-centered model. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Henry J. Austin Health Center in particular, this means it will impact: Over 25,000 patients HJA uses 340B saving to provide non-reimbursable services like clinical pharmacy services, services through community health workers, transportation, etc. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Henry J. Austin Health Center provides sliding fee discounts to roughly 40-45% of the health centers patients, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Henry J. Austin Health Center anticipates needing 1 Pharmacy and 1 Finance & Compliance. So, Total 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Henry J. Austin Health Center anticipates an increase of $15000-$25000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact 5 Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to our internal assessment, Well need more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 Hours FTE will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Henry J. Austin Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $25000- $30000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 25,029 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200 to $300K annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 36 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 38 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in the Greater Trenton area 7 Internal NACHC assessment (99 responses). 6 with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 10 Internal NACHC survey data 7 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 40% of our In-House Patient fall under 200% FPL receives significant discount on dispensing fee via sliding scale. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $500000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $2000 to purchase these same drugs at the 340B ceiling price. This represents a 250% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Henry J. Austin Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as integrated Behavioral Health Services, MAT Service, Services through CHW, Community Health Worker, Transportation Service, Dietician Service and Clinical Services. Operating Hours: We anticipate needing to reduce our clinic hours by 10 per week for each of our service locations, specifically impacting. Our evening and weekend hours, which are the only times our working-class patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund. A full-time Community Health Worker and a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 40-45% uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Henry J. Austin Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 10 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Henry J. Austin Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately 4% of the total purchases from the Wholesaler. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Henry J. Austin Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $100k for this year. For year 2027 & 2028 will need significantly higher amount of cash in hand to purchase those drugs. a. Financial Impact of Rebate Denials and Delays Henry J. Austin Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 7% denial rate would result in a net annual loss of $70,000-$80,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 12 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Henry J. Austin Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and 13 staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Henry J. Austin Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Henry J. Austin Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Dr. Poonam Kalaria, Director of Pharmacy; Poonam.kalaria@henryjaustin.org Sincerely, Poonam Kalaria, Henry J Austin Health Centre Audit Trail Document Details Title 03_26_26_340B Rebate Model Pilot RFI_ SHORT_NACHC Template.docx File Name 03_26_26_340B Rebate Model Pilot RFI_ SHORT_NACHC Template.docx Document ID 624f6103c78b4057921b9d8e6d649851 Fingerprint 1d8341b2356a989248696e30cfdcb3bc Status Completed Document History Document Created Document Created by Poonam Kalaria (poonam.kalaria@henryjaustin.org) Fingerprint: 7d6097710de008203de68dae1714dc47 Apr 20 2026 06:55PM America/New_York Document Signed Document Signed by Poonam Kalaria (poonam.kalaria@henryjaustin.org) IP: 152.186.149.202 Apr 20 2026 06:55PM America/New_York Document Completed This document has been completed. Fingerprint: 1d8341b2356a989248696e30cfdcb3bc Apr 20 2026 06:55PM America/New_York
HRSA-2026-0001-2334Southern Tier Community Health Center Network, Inc. d/b/a Universal Primary Care2026-04-20T04:00Z84,901 chars
Please See Attached April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southern Tier Community Health Center Network, Inc. d/b/a Universal Primary Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Universal Primary Care anticipates a loss of $300,000 to $1.5 Million from entity-owned pharmacy operations and a 25% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs like ours, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, to subsidize oral health and obstetric care services where our reimbursement does not cover our costs for providing them. Southern Tier Community Health Center Network, Inc./Universal Primary Care (UPC)s mission is working together to improve lives by providing access to affordable health care and our vision is high-quality healthcare for every member of our community! We assist patients with barriers to care and assure access to care in a culturally sensitive manner. We have an energized, educated and effective staff providing high-quality health care. We seek opportunities to teach and educate others. We are an engaged partner to help meet community health care needs in all of the communities we serve. 2 Our patient-lead board of directors is engaged and holds us accountable to serve our community well. We have four clinic sites in Allegany and Cattaraugus Counties in New York and two clinic sites (a physical health and dental health center) in McKean County, Pennsylvania. We provide primary care throughout the entire life cycle at all of our sites, direct obstetrical care at four of our sites, and direct dental care at one site. Primary care includes; pediatrics, adult care, and women's health services. We also provide integrated behavioral health services, care management and educational services at all of our site locations. We also host the SUNY University at Buffalos Rural Family Medicine Track Residency Program and the University of Pittsburgh School of Dental Medicine to train additional health care workforce. In 2025, we served 14,000 individual patients at 47,603 patient visits in our area. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Universal Primary Care in particular, this means it will impact: Over 14,000 patients Our ability to keep providing womens health care especially obstetrics, dental care, and behavioral health services where the reimbursement for providing those services does not cover the cost of providing those services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication 3 nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we- collect/nsduh-national-surveydrug-use-and-health/national-releases 4 resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Universal Primary Care provided tens of thousand dollars in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Universal Primary Care anticipates needing 2 additional FTEs additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Universal Primary Care anticipates an increase of $150,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 This is what we estimate it will also cost Universal Primary Care. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Universal Primary Care will see face these extra costs as well straining our already razor thin margin we will likely have to close one or two of our sites or end an expensive service line to afford this. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate an additional 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Universal Primary Care urges HRSA to require 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate it will require about $50,000 in investment will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools of around $75,000 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5-10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 24 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 35 different pharmacy locations to ensure rebates are paid correctly. 7 Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rural Allegany, Cattaraugus and McKean Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Womens Health and Obstetrical Care, Behavioral Health and Dental Care. Health Center Site Reductions: We anticipate needing to close one or two of our sites serving very rural populations. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Health Therapist, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 250 Rural Uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Universal Primary Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 11 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Universal Primary Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $250,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to Our very weak financial position, where all of our resources are already leveraged for loan funding, would be forced to close sites or end services that dont cover their cost. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Universal Primary Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Universal Primary Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $250,000. This is a sum our CHC cannot absorb, as it represents a direct extraction 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b-rebate-model- pilot-program 12 of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 13 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 14 Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Universal Primary Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Universal Primary Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Universal Primary Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brett Lawton, blawton@upchealth.net. Sincerely, Brett Lawton, CEO Universal Primary Care April 17, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southern Tier Community Health Center Network, Inc. d/b/a Universal Primary Care, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Universal Primary Care anticipates a loss of $300,000 to $1.5 Million from entity-owned pharmacy operations and a 25% reduction for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs like ours, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, to subsidize oral health and obstetric care services where our reimbursement does not cover our costs for providing them. Southern Tier Community Health Center Network, Inc./Universal Primary Care (UPC)s mission is working together to improve lives by providing access to affordable health care and our vision is high-quality healthcare for every member of our community! We assist patients with barriers to care and assure access to care in a culturally sensitive manner. We have an energized, educated and effective staff providing high-quality health care. We seek opportunities to teach and educate others. We are an engaged partner to help meet community health care needs in all of the communities we serve. Our patient-lead board of directors is engaged and holds us accountable to serve our community well. We have four clinic sites in Allegany and Cattaraugus Counties in New York and two clinic sites (a physical health and dental health center) in McKean County, Pennsylvania. We provide primary care throughout the entire life cycle at all of our sites, direct obstetrical care at four of our sites, and direct dental care at one site. Primary care includes; pediatrics, adult care, and women's health services. We also provide integrated behavioral health services, care management and educational services at all of our site locations. We also host the SUNY University at Buffalos Rural Family Medicine Track Residency Program and the University of Pittsburgh School of Dental Medicine to train additional health care workforce. In 2025, we served 14,000 individual patients at 47,603 patient visits in our area. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Universal Primary Care in particular, this means it will impact: Over 14,000 patients Our ability to keep providing womens health care especially obstetrics, dental care, and behavioral health services where the reimbursement for providing those services does not cover the cost of providing those services. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Universal Primary Care provided tens of thousand dollars in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Universal Primary Care anticipates needing 2 additional FTEs additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Universal Primary Care anticipates an increase of $150,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. This is what we estimate it will also cost Universal Primary Care. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Universal Primary Care will see face these extra costs as well straining our already razor thin margin we will likely have to close one or two of our sites or end an expensive service line to afford this. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate an additional 20 hours per month will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Universal Primary Care urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate it will require about $50,000 in investment will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 12,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $150,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools of around $75,000 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5-10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 24 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 35 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rural Allegany, Cattaraugus and McKean Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Womens Health and Obstetrical Care, Behavioral Health and Dental Care. Health Center Site Reductions: We anticipate needing to close one or two of our sites serving very rural populations. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund Behavioral Health Therapist, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 250 Rural Uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Universal Primary Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Universal Primary Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $250,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to Our very weak financial position, where all of our resources are already leveraged for loan funding, would be forced to close sites or end services that dont cover their cost. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Universal Primary Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Universal Primary Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $250,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Universal Primary Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Universal Primary Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Universal Primary Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Brett Lawton, blawton@upchealth.net. Sincerely, Brett Lawton, CEO Universal Primary Care
HRSA-2026-0001-2335Sinai Health System (Sinai Chicago)2026-04-20T04:00Z19,292 chars
See attached file(s) 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Sinai Chicago is the largest private safety-net provider in the State of Illinois, with 80% of our patients insured by Medicaid, Medicare, and a portion uninsured. Sinai Chicagos service reach is 1.5 million people on Chicagos West and Southwest Side. Sinai Chicago is comprised of 3 hospitals: Mount Sinai Hospital (MSH), Holy Cross Hospital (HCH) and Schwab Rehabilitation Hospital (SRH). Sinai Chicago also provides free-standing neighborhood clinics run by Sinai Medical Group, a research entity (Sinai Urban Health Institute) and community programs run by Sinai Community Institute. We consist of two 340B DSH hospitals: DSH140018 Mount Sinai Hospital Medical Center Level 1 Trauma and Level 3 NICU DSH140133 Holy Cross Hospital The 340B program enables our hospital system to maintain access to essential medications and sustain services for vulnerable patients across our service area. Because of 340B savings, we can support critical service lines to our underserved communities like behavioral health, oncology, HIV, rheumatology, gastroenterology, neurology, etc. We were able to provide over 800 patients with free or affordable medications so they could receive the treatment that they deserved. This includes patients requiring oncology infusion treatments, discharge medications, or visiting our clinics. Sinai Chicago opposes the HRSA Rebate program. We urge HRSA to consider the cost of rebate models on essential hospitals like ours and not move forward with a rebate model or related pilot program because they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. Costs to Covered Entities Current Administrative Costs Under the Upfront 340B Discount Sinai Chicago currently manages over 300,000 transactions for the 340B program includes medical and prescription claims. The vast majority of these 340B transactions are medical claims which keep hospital drug expenses low. Administrative costs include software, pharmacy dispense fees, third-party administrative fees, inventory fees, staffing, and compliance activities. Top key cost drivers are staffing, 340B IT Systems, and third-party vendors. We cant envision a structure where costs would be to be offset with a change to a rebate system. The structure must remain neutral underneath HRSAs authority. 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 Administrative costs under a 340B Rebate Model will significantly increase. We estimate the incremental administrative and operational costs to our organization to be more than $5,000,000 annually. Assumption: all 340B pricing shifts to 340B rebate model 10% inefficiency in 340B capture which is supported from experience with MTF and drug manufacturers o Includes situations where drug manufacturers are slow to respond and to reinstate 340B pricing Staffing costs will increase under a 340B Rebate Model. We will require 2 additional full-time employees (FTE) to address both medical and prescription claims. A 340B Rebate program introduces new workflows that include increased data submission, claims reconciliation (MTF, new rebate platform, payments, etc.), good faith inquiries, individual drug manufacturer rebate policy upkeep, and accounts receivable to identify, monitor, and project manage incorrect payment amounts and payment resolution. These FTEs would be permanent if rebates were permanent practice. The biggest challenge is finding qualified staff and speed to implementation. This is especially challenging in a safety-net health system environment with access to lower resources. The staff would also not have the proper tools in place. Without further 340B rebate details, there is no software solution that exists to meet all the new anticipated 340B rebate workflow. 340B is a niche and complex area that requires uniquely qualified staff. Sinai Chicago currently has about 3 FTEs dedicated to maintaining the 340B program. Adding 2 additional staff members would double our current staff. With all covered entities needed additional staff, it would be challenging to recruit and retain qualified staff members. We expect the shortage of properly knowledgeable and qualified 340B personnel will lead to more 340B rebate inefficiencies creating unnecessary cost for covered entities. Information technology systems will increase and require additional lead time for implementation of 340B Rebate Model. Additional 340B software will be required to administer and address new rebate steps. There is no complete solution that currently exists and this will lead to greater inefficiency and cost to covered entities. At minimum, new/modified 340B TPA systems would not just qualify 340B claims but create and upload reports, reconcile MFP rebates and payments, manage good faith inquiries, and develop a user-friendly portal that will allow these tasks to be managed in one place. For implementation, there would need to be resources from TPA, covered entity, and EHR teams to ensure all data is properly curated. This will take significant time and bottlenecks are expected if every covered entity must go-live with 340B rebate implementation at once. Significant lead time is needed to prevent disruption of 340B pricing and expenses for covered entities. Annual software maintenance costs are difficult to predict since this is not available. In our experience, any new software solution would cost at least $100,000+ annually. One-time implementation cost examples and estimated costs include EHR development Cost ($20,000), software ($20,000), and implementation ($20,000). 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 Resources and time from the covered entity would include hospital leadership, pharmacy, IT, legal, etc. Depending on the program requirement, this could take significant hours to prepare our covered entities for implementation. A 340B Rebate Model would produce unintended costs to covered entities that undermine the intent of the 340B program. One-time setup costs are not limited to just internal and IT teams. We will need the help of outside counsel and other consultant groups to review contracting, regulatory implications, and workflows. Covered entities will not be able to stock 340B medications as easily to address drug shortages and daily supply. Requiring claims data for each 340B purchase conflicts with the long-standing practice of separate inventory procedure. Covered entities were able to purchase upfront 340B discounted medications to meet patient demand. One example includes when Vitamin K was needed to address severe bleeding cases associated with illicit drug use. The only way to ensure there was enough supply for patients was to purchase at the 340B discounted price. If purchased without 340B, it wouldve costed the health system hundreds of thousands of dollars to have it on the shelf. We are concerned this will cause supply chain issues during drug shortages since cost-sensitive covered entities will reduce inventory or not be able to stock medications. There will be a reduction in contract pharmacies participating in the 340B program. Contract pharmacies will choose to eliminate 340B rebate drugs from covered entities 340B programs due to complexity or exit contract pharmacy agreements. This eliminates the use of 340B drugs for medication access and savings to support covered entities service lines If claims data is sent to a drug manufacturer-sponsored third party, we are very concerned that the claims data will be used to deny 340B pricing to covered entities. We have already experienced barriers and slow response time from drug manufacturers. HRSA oversight is needed if drug manufacturers withhold 340B pricing. One example of 340B barrier we have encountered. A drug manufacturer notified us through 340B ESP that there was one NDC in question with regards to 340B purchases. We did not receive a follow-up notice from 340B ESP. Without further notification, 340B pricing for the entire drug manufacturer catalog was removed include NDCs that were not in question. After weeks, this was eventually resolved but took about an additional 10 business days to be reflected on our wholesaler site. Even when resolved, the drug manufacturer will not reinstate 340B for claims retrospectively. 340B ESP was also slow or unresponsive. In general, our experience with 340B ESP has included limited responsiveness and delayed resolution. It is difficult to get in touch with a person or manager to resolve a situation promptly. Most recently, MTF/340B claim resolution takes 10-15 days. If 340B rebates occur, the tracking of 340B claims disputes will be burdensome. Payment Timing and Potential Cash Flow Impacts for Covered Entities A 340B Rebate Model will negatively impact safety-net health systems ability to have enough cash on hand. Like most safety-net health systems, our financial situation affects our payment schedule. We typically ask vendors to provide terms that are beyond 30 days due to low cash flows. However, this does not allow us to have the best pricing. 340B 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 discounts help to level drug pricing for lower resourced institutions who dont have the volume or immediate payment schedule like well-resourced institutions. Disrupting cash flow with 340B rebates forces low-cash institutions to deploy funds more slowly. This can affect broader hospital operations and how vendors and services are paid. Thus, it affects how patient care is delivered. We estimate a delay in receiving rebates even if just 10 days could translate up to over $500,000 in cash to be held. This would cause delays in paying critical vendors. If you combine this with drug manufacturer threats and actions of taking away 340B pricing, it puts health systems and covered entities at serious financial risk to purchase medications at WAC pricing up front. Drug manufacturers face little repercussions for these disruptions or oversight. There needs to be more HRSA oversight when drug manufacturers are removing 340B pricing from covered entities. Rebate Denials Guardrails should exist to prevent drug manufacturers from unilaterally taking away 340B pricing on drug manufacturer input alone. HRSA currently is not involved with the day-to-day claims-level data submission to drug manufacturers. Drug manufacturers have created arbitrary rules that are forced onto covered entities without any discernable statement from HRSA approving these actions. While the drug manufacturers do provide important feedback with regards to program compliance, they are not empowered by the 340B statute to be the enforcers and judge of the 340B compliance. HRSA needs to provide more clarity to this resolution process. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. We urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. The rebate process will cause covered entities to upfront purchase medication at higher prices. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. Data Collection by Covered Entities Drug manufacturers shouldnt determine the removal of 340B pricing alone. Drug manufacturers have acted with limited transparency and insufficient notice through their third-party taking weeks to rectify. HRSA already plays a key role in 340B program compliance. HRSA needs to play a more active role with data collection if its being used for the determination of 340B compliance. Currently, we provide prescription data voluntarily to drug manufacturers. We have now begun submitting medical claims data as drug manufacturer policies are rapidly changing. Sinai Chicago uses several third-party vendors to assist with data collection, maintenance, and carry out these activities. We conduct self-audits and independent audits to ensure compliance. 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 Data fields should be kept at a minimum for best privacy and security practices. Covered entities need to have more data protection. Manufacturers refuse to contract individually with health systems and do not allow redlines to their Business Associate Agreement, Terms of Use, and Privacy Policy. Covered entities need to be given more lead time for new data requirements. The rebate program will change current data collection activities and increase administrative and operational work and associated costs as mentioned before. Medical claims is a particular area where standard reporting currently doesnt exist. Not all medical data is readily available and formatted for acceptance by drug manufacturer vendors. Yet, drug manufacturer vendors have begun requiring covered entities to report all data in as little as 2 weeks. This is too little time. For comparison, covered entities can only register contract pharmacies on a quarterly basis and must wait a quarter before utilizing 340B. It is deeply concerning that drug manufacturers can institute 340B policy changes that can drastically change the program for covered entities with no review or oversight process. Manufacturer Efforts to Avoid Duplicate Discounts We provide 340B modifiers on 340B claims both on medical and prescription. Specifically with Manufacturers Discount Pricing (MFP) claims, we notice drug manufacturers arent utilizing these 340B modifiers. This has caused MFP rebates to be erroneously issued on 340B discounts. This is preventable if drug manufacturers used 340B labeled claims volunteered by the covered entity. We continuously must monitor and reconcile MFP claims to our 340B claims to ensure duplicate discounts do not occur and prove when we are entitled to MFP rebate that hasnt been issued. In accordance with the non-duplication provisions of the MDPNP, we ensure that MFP is not applied to claims that qualify for 340B pricing. For each claim, whether medical or prescription, we review the relevant data to ensure compliance with these provisions. If any instances arise where MFP should not be provided due to non-duplication, we identify and address them promptly in Beacon. Drug manufacturers do not provide enough insight into their methodology to determine if a claim is 340B on their side. Regardless, they assume their information is correct and act accordingly which produces an estimated 10-15% error rate. This could be avoided if they recognized 340B modifiers on claims and allowed covered entities to intervene on claims before rebates are issued. Required Reporting As the 340B Rebate Model Pilot Program progresses, HRSA should publicly share detailed manufacturer data on a regular, transparent basis to ensure accountability and inform stakeholders. Drug manufacturers must be held accountable when 340B pricing for any NDC is withheld. This should occur immediately after the action is taken. The drug manufacturer should report daily how many NDCs have been terminated for 340B pricing. Reporting should also include the number of denied rebates and the reason for each denial, broken down by manufacturer and state. Reporting should also cover the frequency of 340B claims consented by covered entities (CEs) 1500 S Fairfield Ave Chicago, IL 60608 sinaichicago.org 773.542.2000 and, among those, the number of claims subsequently overturned. Additionally, HRSA should provide a gross-to-net analysis of 340B claims, along with information on rebate timing and any associated payment lag. Site-of-care data should be included, differentiating claims processed through hospital outpatient departments, physician offices, and retail settings. Finally, publicly shared data should reflect manufacturer compliance, including the timeliness of rebate payments and any penalties imposed for noncompliance, helping ensure prompt payment and adherence to program requirements. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A 340B Rebate model heavily favors drug manufacturers needs and gives them more control over 340B pricing. Covered entities need to be reassured that they will receive all rebates they are entitled to in a timely manner that is not determined solely by drug manufacturer policy. Time constraints must be widened to accommodate for unforeseen implementation and IT maintenance issues. 340B rebate-based model creates more upfront administration of the program that doesnt necessarily change duplicate discounts. Similar reconciliation process can be done on the backend retrospectively that allows covered entities less financial risk. Keeping 340B as a discount program protects covered entitys access to 340B pricing. There can be a retrospective-claims model created that would allow reconciliation of various claims and protect covered entities from higher drug costs. Data collection and reporting should be centralized and under HRSAs authority. Summary Sinai Chicago strongly urges HRSA not to proceed with a 340B rebatebased model or pilot. As the largest private safetynet health system in Illinois, our ability to deliver essential care depends on the predictability and timeliness of the current upfront 340B discount. A rebate model would shift financial risk to covered entities, significantly increase administrative and IT burdens, disrupt cash flow, limit medication supply, and further empower manufacturers to unilaterally withhold or delay 340B pricing with insufficient oversight. These impacts would undermine--not strengthen-- 340B program integrity and threaten services that 340B savings support. If HRSA continues to explore rebate concepts, any approach must preserve 340B pricing, data collection oversight, and enforcement under HRSAs authority. Drug manufacturers should not be able to initiate rebate denials or pricing removals without essential HRSA oversight to ensure transparency and accountability. Protecting covered entities from financial and operational harm is essential to preserving the statutory intent of the 340B program and the patients it was designed to serve. If you have any questions, please feel free to follow up with me directly at thomas.yu@sinai.org. Thanks, Thomas Yu System Director of Ambulatory Pharmacy Services Sinai Chicago
HRSA-2026-0001-2336Cone Health2026-04-20T04:00Z17,641 chars
Comment on FR Doc # 2026-03042 *4-0 \gol CONE HEALTH The Network for Exceptional Care Pharmacy Department 1200 North Elm Street Greensboro, NC 27401-1020 conehealth.com April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: On behalf of Cone Health, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this request for information (RFI) asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." For context and background, Cone Health is a not-for-profit health care network serving people in Alamance, Forsyth, Guilford, Randolph, Rockingham, and surrounding counties in North Carolina. Cone Health includes five hospitals, six ambulatory care centers, three outpatient surgery centers, 10 urgent care centers, one retirement community, more than 120 physician practices, virtual care, an accountable care organization, and a Medicare Advantage plan. Hospitals operating under our Moses H. Cone Memorial Hospital license qualify as disproportionate share hospitals (DSH) under the 340B program. In 2025, our 2% operating margin was $100 million and our savings from the 340B program was $156 million. As explained below, any rebate mechanism will impose enormous costs and burdens on Cone Health that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Cone Health has relied on for years, is the best way to fulfill that purpose of the 340B program. HRSA Page 2 April 20, 2026 The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Cone Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 25 drugs selected for the IRA. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require Cone Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Cone Health processed over 2.3 million 340B claims last year with an estimated cost to administer the program of approximately $1.5M. We are unable to estimate the administrative cost related to vendors as we do not know the specific requests of the vendors at this time. Charge structure varies by vendor as to implementation fees and cost per transaction. Staffing Impacts Under a Potential 340B Rebate Program Based on our experience with the Medicare Drug Price Negotiation Program (MDPNP) rebate model, Cone Health does not have the staff needed to comply with a 340B Rebate Program. The MDPNP program required hiring a full-time staff member for 10 medications. As the number of medications included in the MDPNP increases, additional staff will be required. The complexity and impact of collecting data from MTF, Beacon, dispensing records, and payment information has been grossly underestimated. Adding a 340B rebate model will further increase complexity and adds four additional data sources to pull data. Currently, it takes approximately 60 minutes per Good Faith Inquiry (GFI) for researching, gathering data elements and submitting. We have submitted 80 GFIs with over 500 that need to be submitted. This equates to 34,800 minutes or 580 hours or 72 working days to pull requested data and submit for 10 medications. This is not a sustainable model! We anticipate the need for additional staff members for the 340B rebate pilot and for the additional 15 medications in the MDPNP program. The number of additional staff required for the 340B rebate pilot will be dependent on the size of the pilot. Staff will be responsible for verifying rebates are received, reconciling between the two rebate programs, gathering data for GFI submission, and following up on the GFI submissions. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Cone Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. HRSA Page 3 April 20, 2026 Current data feeds contain seven of the eleven previously proposed requirements for medical claims data. Assumptions are being made that all data already exists, which is not accurate. For example, self- pay or cash patients do not generate claims and there is no claim ID. We would not be able to meet this data requirement. If we created a customized report and randomly assigned a claim and claim number, that would require maintaining a crosswalk that ties the number back to the patient encounter, which adds additional complexity and ongoing cost. Without knowing the specifics of a rebate program, it is not possible to calculate the additional costs. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Cone Health to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Cone Health has a seven-day payment term with our wholesaler. If we received rebates within 10 days of data submission, we would have to pay the manufacturers' higher price before receiving rebates, reducing our cash flow. Over the course of one year, we believe our hospital would be required to front to drug manufacturers a conservative $4M for the 25 drugs currently selected for the IRA. If the rebate model expanded to the full 340B program, we would have to float $46M in drug expense alone based on our payment terms. These figures do not account for the delays associated with medical claims billing, which are usually held five days for outpatients. That would increase the number of days from 3 to 15, increasing the above dollar amounts by a factor of 5. This impact disrupts decades of business practices built around 340B upfront discounts and raises significant concerns about how denials will be handled based on our current experience with the MDPNP program. We are over 90 days into the program and have not received payment for any inaccurately denied claims. Adverse Impacts of these Additional Costs and Burdens We understand that HRSA's new rebate policy may cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340B's long history as an upfront discount program. Placing the qualification in the hands of the manufacturer places this program at risk, negatively impacting the very patients who need it most. For example, Cone Health provides uninsured patients with a 34-day supply of medications for free, or up to a $3 charge. This is extended to patients regardless of whether the prescription qualifies for 340B. As previously stated, a rebate model will significantly impact cash flow, requiring reassessment of the viability of this program as financial resources will be strained. HRSA Page 4 April 20, 2026 Reliance Interests The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Cone Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. A rebate model, even a pilot, will negatively impact Cone Health's ability to care for the neediest patients in our communities. An example of a program that could be impacted is a program we call "CATCH 5 in 5." This Collaborative Actions Toward Community Health initiative seeks to add five years of life in five years by addressing life expectancy gaps in underserved communities. Cone Health has pledged to invest $150 million to bring care and address social determinants of health directly to underserved areas including: Mobile Health Program Virtual Primary Care School Telehealth Food Assistance Congregational and Community Nurse Program Interpreter Services Community Events Problems with the Beacon IT Platform Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon has refused to negotiate terms and conditions granting Second Sight a universal and perpetual license to all data submitted. This raises concerns for data privacy and how the information is used or retained. Following are issues encountered with the Beacon platform related to the MDPNP rebate model. The GFI resolution center is ineffective for establishing a good-faith exchange with the manufacturers. A11 GFIs initiated for underpaid claims require additional data to be submitted to ESP, and that data is nearly impossible to accurately acquire. The ability to link wholesaler invoices to prescription dispense data is impossible. HRSA Page 5 April 20, 2026 Each manufacturer requires different data elements when submitting a GFI, further complicating the process. As mentioned above, manually gathering and arranging the data takes approximately 60 minutes per GFI submission to Beacon, which is unsustainable due to the large number of underpaid claims being disputed. We currently have over 80 GFIs submitted and additionally over 500 that need to be submitted. This equates to 34,800 minutes or 580 hours or 72 working days to pull requested data and submit for only 10 medications. Again, this is not sustainable! o Claims that have been adjusted one or more times appear within Beacon's platform as additional claims without a clear reason. The lack of transparency with the adjustments requires more manual investigation to identify the causes. This is not included in the time estimates above. Manufacturers are assigning inaccurate basis of price over 50% of the time, placing significant burden on us a covered entity. o Identifying 340B duplicative claims is easily accomplished by clicking a single button, immediately initiating a payment reversal without data requirement. However, claims inaccurately identified as 340B require data submission that is not standardized and not always applicable. We are over 3 months into this process and have not received payment for one claim that has been inaccurately identified by the manufacturer despite our efforts in communicating the claim was inaccurately identified as 340B. Some manufacturers are not paying any rebates, assuming all claims for their products are 340B purchases, which is not accurate for Cone Health. Manufacturers are inaccurately identifying the wrong contract price and applying it across all pharmacy accounts when the contract price is not applicable to all pharmacy accounts. This has occurred on over 500 clairns since starting the program, without resolution. This requires submission of a GFI for each instance. Based on our experience with the MDPNP and Beacon platform, implementation of a 340B rebate model will require the hiring of multiple staff members due to the gross error rate in the current model inaccurately identifying claims as 340B, the level of complexity for data aggregation to track and validate rebate payments, varying data requirements from manufacturers, and time required to aggregate necessary data to provide justification to manufacturers who fail to respond. The MDPNP model partnering with manufacturers and the Beacon platform has demonstrated an error rate of over 50%. What industry would accept this type of error rate and continue moving forward? This is not acceptable and demonstrates moving to a rebate model is a failed approach. Efforts to Avoid 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Cone Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. HRSA conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in the 340B program. There are HRSA Page 6 April 20, 2026 significantly less burdensome alternatives to rebates that we urge HRSA to implement. HHS should require state Medicaid agencies to adopt Oregon Medicaid's process of preventing Medicaid duplicate discounts by collecting covered entity data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. Another option is to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, we respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace other alternatives. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of the Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Kristen Kruszewski, PharmD, MBA, BCSCP Chief Pharmacy Officer Patrick Cline, PharmD, MHA Executive Director of Pharmacy Business and Non-Acute Care Services
HRSA-2026-0001-2337Gardner Family Health Network, d.b.a. Gardner Health Services2026-04-20T04:00Z46,261 chars
See attached file(s) tiGARDNER Health Services CORPORATE OFFICE 160 East Virginia Street, Suite 100, San Jose, CA 95112 Office: 408.200.2291 Facsimile: 408.278.7799 www.gardnerhealthservices.org April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Gardner Family Health Network, Inc. d.b.a. Gardner Health Services, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Gardner Health Services anticipates a loss ranging from $500,000 to $800,000 annually for the next three years from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Gardner Health Services is a nonprofit, Federally Qualified Health Center in San Jose providing integrated primary care, behavioral health, dental, and supportive services to underserved communities across Santa Clara and San Mateo counties, with a focus on accessible, culturally responsive care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Gardner Health Services in particular, this means it will greatly impact the revenue dedicated to maintain our in-house pharmacies that fill over 47,000 prescriptions a year and our clinics that provide services to our low-income patients, in which more than 46% fall within the 150% FPL. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concemed that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe altematives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi:10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Re2istry. J Thromb Haemost. 2021 Sen:19(9):2322-2334. doi: 10.1111/ith.15415. Enub 2021 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarrning and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajoumals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HI-IS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. 5 Hauser RA, et al. Long-Term Deutetrabena.zine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262: PMCID: PMC8906841. " " . . . , . https://www.samnsa.gowaataiaata-we-conecvnsaun-nationai-surveyarug-use-ana-neanninationai-releases multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Gardner Health Services provided 2025 Sliding Fee Discount from UDS in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffmg Impact: Gardner Health Services anticipates needing 0.5 FTE additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Gardner Health Services' initial estimate of an additional 0.5 FTE is derived from the what is currently seen with the MFP effectuation, which already incorrectly assigned approximately 19% of the captured prescriptions. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Gardner Health Services anticipates an increase cost of $56,000 to hire an additional 0.5 FTE. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We are anticipating that 3 to 5 hours a week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Gardner Health Services urges HRSA to require uniformity among 7 Internal NACHC assessment (99 responses). eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 44 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 44 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Santa Clara County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.1 9 Vulnerability Index Approach to Identify Pharrnacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology I. JAMA Network Onen I JAMA Network Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.' Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Gardner Health Services provides free medications through our Healthcare for the Homeless program and in special cases in which patients cannot afford the medications. The uncertainty of rebate denials and pricing will affect the access to life-saving medications to these patients in addition to all our other low-income patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days)." Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/comoliance/compliance- manuallchaoter9#footnotel 0 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B 15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $910,718.12 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $1,186.02 to purchase these same drugs at the 340B ceiling price. This represents a 76,788% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Gardner Health Services anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back both revenue-generating and non-revenue-generating roles that are essential to delivering and supporting patient care Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund and invest in both revenue-generating and non-revenue-generating roles that are essential to delivering and supporting patient care, which ultimately may increase wait times. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support 15 httos://340boricina.hrsa. goy/ that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Gardner Health Services asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of"financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Gardner Health Services estimates its 2027 Annual Rebate Opportunity Cost to be approximately $264,000. This cost aggregates the estimated fmancial impact of rebate denials and loss of purchase discounts. Gardner Health Services estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $76,000 for 2026. With the addition of drugs in 2027 and 2028, this will be increased by $114,000 and $130,000, respectively. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution, as it would negatively impact our days cash on hand, which are currently dedicated to our organization's personnel and operating costs. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Gardner Health Services, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Gardner Health Services urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 19% denial rate would result in a net annual loss of $174,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) httos://www.federalreeister.gov/documents/2025/08/01/2025-14619/340b-oroeram-notice-anolication-orocess-for-the-340b- Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory fra.mework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and extemal oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Califomia's Department of Health Care Services (DHCS) issued guidance for California's Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi- system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut California's multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCS's six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like California's will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Gardner Health Services strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Gardner Health Services believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Gardner Health Services appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Thuy-Trang Ha, Pharmacy Director, at tha@gfhn.org. Guillermo Viveros President & CEO Gardner Health Services
HRSA-2026-0001-2338Parkview Health System2026-04-20T04:00Z54,099 chars
See attached file. 1450 Production Road Fort Wayne, IN 46808 260-373-4000 www.parkview.com The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA-2026-03042; We appreciate the opportunity to provide comments to the Health Resources and Services Administration (HRSA) Request for Information (RFI) seeking comments on whether HRSA should implement a rebate model under Section 340B of the Public Health Service Act1 (the 340B Statute) and how best to operationalize any such rebate framework. Parkview Health (Parkview) is a leading health system providing access to high-quality care for nearly 1.5 million people across 22 counties in Indiana and Ohio. Parkview cares for these communities with nearly 1,300 beds and a network of more than 1,400 physicians and advanced practice providers. In 2024 alone, Parkview saw nearly 4 million unique patient encounters and provided almost $260 million dollars in charity care, community health improvement services, community building, and other charitable efforts. In the same year, Parkview employed or otherwise contracted with over 17,500 individuals vital to Parkviews mission. Like many other community hospitals and health systems whose patient populations include low-income and indigent patients, Parkview purchases outpatient drugs at discounted prices pursuant to the 340B Statute and, in turn, employs the savings realized through these discounted prices to support its mission in the communities it serves. Below, Parkview has answered HRSAs questions outlined in the RFI in turn: I. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount During its most recent fiscal year, Parkview processed a large volume of 340B-eligible transactions across its mixed-use in-house pharmacies, contract pharmacy network, and outpatient clinic administration sites. Direct annual administrative costs for 340B Program operations are estimated at to be in the millions, with several full-time employees dedicated to 340B compliance, audit readiness, and split-billing operations; third-party administrator (TPA) and software-licensing fees; contract pharmacy administrative fees; and internal legal, audit, and finance support time. These costs reflect the operational status quo under an upfront discount model, which Parkview has built and refined over more than ten years of participation in the 340B Program. It is important for HRSA to appreciate what Parkviews current estimated costs are, and what they are not. Parkviews estimated costs are related to running a mature, predictable, 1 42 U.S.C. 256b. Page 2 of 15 wholesaler-integrated purchasing model in which the 340B price is applied at the point of purchase and reconciled retrospectively through standard split-billing and accumulator logic. These estimated costs do not include and cannot be accurately extrapolated to estimate the cost of building and operating an entirely new infrastructure that would necessarily include required claims submission processes, per-transaction rebate-tracking, and inevitable engagement with manufacturers related to overcharge disputes that a rebate model would require. HRSA should not consider Parkviews current administrative expenditures as a ceiling or baseline for the administrative and financial burden that a rebate model would create; Parkviews current costs would constitute the floor, and the expected acute exponential increase in costs described in Section 1.b below would sit on top of, not replace, most of this existing spend. The financial strain implicated by the Pilot Program is further compounded by the operational realities of compliance with manufacturer rebate models. While a comparatively limited number of sophisticated hospitals and health systems are regularly engaged in limited, granular claims-level data exchange with manufacturers, for example, in connection with limited distribution drug arrangements, many more are not. Because rebate models have no precedent in the thirty-plus-year history of the 340B Program (apart from the very limited context of state AIDS drug assistance programs), few covered entities have in place the infrastructure to comply with the data-intensive activities that a rebate model demands. Under any rebate model, even if limited to a subset of drugs, most covered entities would be required to hire new staff, purchase or license new software, and conduct additional training to meet these demands, likely with as little as two to three months between any HRSA approval of a manufacturer plan and its operational start date, just in order to secure 340B discounts to which they are legally entitled. A claims data-driven rebate model would punish the very safety-net provider community the 340B Statute was designed to support, since, by definition, they care for a larger proportion of the poor and indigent and are therefore much more likely to lack the resources to rapidly develop and operationalize sophisticated data-collection and processing activities. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program Parkview estimates that implementation of a rebate model, even one narrowly scoped to the ten IRA-negotiated drugs, would require significant dollars in one-time start-up costs and approximately further material, recurring operating costs above current 340B administrative spend. These estimates assume: build-out of a rebate-claims submission workstream integrated with Parkview's pharmacy dispensing systems, electronic health record (EHR), and medical-claims feeds; new reconciliation logic to track submitted, paid, pended, denied, and reversed rebate claims against purchased drug inventory; additional full-time employees (FTEs) for data submission, exception handling, manufacturer dispute resolution, and audit response; legal and consulting spend to interpret and negotiate (to the extent possible) manufacturer terms of use and data-sharing agreements and to assist with inevitable overcharge disputes; and expanded cyber-liability coverage to address the increased data-breach exposure associated with transmitting claim-level patient data to manufacturer-controlled platforms. Parkviews methodology draws on: actual labor-hour estimates from our current 340B compliance and pharmacy analytics teams; Page 3 of 15 benchmarked vendor quotes for rebate-management and claims-submission tooling; comparable implementation cost experience from Second Sights 340B ESP platform and the Beacon platform; and AHAs published estimates of per-hospital burden under the original pilot design, which indicated that HRSAs own burden estimate in the accompanying ICR materially understated the actual administrative cost to covered entities by orders of magnitude. The specific activities driving the acute increased costs cost include: capture of the required pharmacy and medical-claim data elements at or near the point of dispense/administration; daily or weekly rebate-claim file generation and submission; claim-by- claim status monitoring on the manufacturer (or manufacturer-vendor) platform; research and resubmission of pended and denied claims; reconciliation of rebate receipts against WAC- purchased inventory; tracking of the 10-day payment window against each submitted claim; audit-ready documentation retention; and ongoing updates each time a manufacturer changes its platform, data-field requirements, or terms of use. Importantly, a rebate model would not eliminate any of Parkviews existing 340B compliance activities; it would create an additional layer of required administrative burden and operational complexity on top of an already-complex program, even for a the subset of drugs in scope, and create a bifurcated operating model that is more, not less, complex, expensive, and onerous to run. Note that these estimates do not even attempt to quantify the expected and assured loss of 340B discounts that Parkview will experience through any rebate model that permits manufacturers to enforce their respective contract pharmacy lock-out policies and own views of eligible dispenses, as was permitted by HRSA under manufacturers rebate programs under the Rebate Pilot Program. Even if covered entities can adapt and are fully prepared to meet the data collection requirements of a potential smattering of manufacturer rebate models, manufacturers should be required to bear the total cost of any rebate program entirely to meet their objectives. Unfortunately for covered entities, a rebate model would place an enormous financial burden on covered entities through new staff and infrastructure in order to participate in the data collection and processing activities that are integral to rebate models to access 340B pricing to which it is legally entitled, while the for-profit manufacturers can simply reach into their deep pockets to pay a third party vendor like Second Sight Solutions, to manage their respective rebate programs. In our view, covered entities should be insulated from administrative costs required to implement and manage a rebate model requested by manufacturers and those manufacturers should foot the entire bill for their request. Specifically, to accurately quantify such an offset, HRSA should require manufacturers, as a condition of plan approval, to: directly pay a standardized per-claim administrative fee to the covered entity on top of the rebate itself; reimburse documented one-time implementation costs upon covered-entity attestation; and cover the cost of a neutral, HRSA-selected IT clearinghouse in lieu of any manufacturer- controlled platform. The per-claim administrative fee should be calibrated based on independent time-and-motion data, not on HRSAs current ICR burden estimates, which have been widely criticized as unrealistic and inaccurate. Under Parkviews current operations, the impact of unreimbursed additional costs would be direct and measurable: every dollar of new administrative spend is a dollar not spent on patient-facing services. Parkview already operates on thin margins and is managing through ongoing workforce pressures, rising pharmaceutical costs, and reduced government and commercial reimbursement. Absorbing seven-figure net new operating costs to preserve legally entitled access to ten outpatient drugs while still being responsible for all existing 340B Page 4 of 15 compliance is not financially sustainable without corresponding service reductions elsewhere, and those cuts would necessarily have to be directed to services that do not generate revenue and therefore would disproportionally affect vulnerable patient populations. c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program Implementation of a rebate model, even one limited to the original ten IRA drugs, would require Parkview to add new staff and, in the interim, to reallocate time from existing clinical and pharmacy operations staff. Parkview estimates an initial need for approximately three FTEs in permanent new roles, plus 2 FTEs of temporary implementation support during the first 12 months. These roles would include: 340B Rebate Operations Analyst responsible for daily generation, validation, and submission of rebate claims files; monitoring of claim status on manufacturer/vendor platforms; and first-line research of pending and denied claims. Pharmacy Data Integration Specialist responsible for mapping required data elements from the EHR, pharmacy management system, and medical-claims feed into the format required by each manufacturer platform, and for maintaining those mappings as requirements change. Rebate Reconciliation and Finance Analyst responsible for matching rebate receipts against WAC-purchased inventory, tracking aged/unpaid rebates, flagging liquidity risk, and supporting month-end close. Compliance and Audit Support Personnel through additional time allocation within Parkviews 340B compliance function for manufacturer inquiries, HRSA correspondence, dispute preparation, and internal audit of the new rebate workflow. Legal and Privacy Support Personnel through additional time allocation for review of manufacturer/vendor terms of use, data-processing agreements, breach-notification terms, and business associate agreements. Most of these roles would be permanent so long as any rebate model remains in effect; the volume of work does not diminish over time because each drug, each claim, and each manufacturer platform update generates recurring activity. Critically, in the period between HRSAs approval of any manufacturer plan and the hiring and training of new staff, the work would fall on Parkviews existing 340B pharmacy, compliance, and IT teams, whose time is currently spent supporting current 340B Program operations, clinical pharmacy services, medication therapy management, oncology and specialty pharmacy workflows, patient financial navigation, and medication-assistance program enrollment. Every hour these staff spend on administration of a rebate model is an hour not spent helping a patient afford, obtain, or safely use their medication. This is the most direct and concrete care-delivery impact of a rebate model, and one HRSA should weigh heavily. It is also worth noting that Parkviews catchment area includes rural and medically underserved communities where pharmacy-workforce shortages are already acute. Adding a rebate-driven administrative workload on top of existing clinical demands is likely to worsen workforce strain, not accommodate it. The FTE estimates above assume Parkview is able to hire into these new roles at all; if qualified candidates are not available in our market, the reallocation of clinical FTE time away from patient care will be more pronounced. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program Implementation of a rebate model would require meaningful modification of, and in several cases, net-new additions to Parkviews pharmacy, revenue-cycle, data-integration, data security, and compliance infrastructure. At a minimum, Parkview would need to: Page 5 of 15 Modify its pharmacy management system and EHR-integrated medication administration records to flag, capture, and export the specific data elements required for rebate claim submission (date of service, date prescribed, Rx number, fill number, 11-digit NDC, quantity dispensed, prescriber ID, service provider ID, 340B ID, BIN, PCN, and any additional elements imposed by individual manufacturer platforms); Stand up a new rebate claims-generation and submission engine capable of producing files in the format(s) required by each manufacturers designated IT platform, on each platforms required cadence, and within the applicable submission window (as short as 45 days from date of dispense under the prior Rebate Pilot Model); Build a rebate-status tracking and reconciliation module to monitor the lifecycle of every submitted claim submitted, accepted, pended, denied, paid and to tie each rebate receipt back to the corresponding purchased inventory unit for 340B accumulator and split-billing purposes; Enhance its split-billing / virtual inventory platform to handle bifurcated workflows: upfront discount for most drugs, retrospective rebate for drugs in scope. This bifurcation is itself a significant driver of complexity; Implement or expand cybersecurity controls, including enhanced data loss prevention, encryption, access logging, and monitoring, commensurate with the volume and sensitivity of patient-level data being transmitted to external manufacturer-controlled or manufacturer-selected platforms; Integrate new data-exchange endpoints with manufacturer (or manufacturer-vendor) platforms, and maintain those integrations as each platform evolves its API, file format, or data-element requirements; and Expand audit-trail and document-retention capabilities to support both internal audit and any HRSA or manufacturer audit of rebate claims. In addition to one-time implementation costs for the above, there will also be additional recurring annual costs, including licensing, maintenance, integration upkeep, and cybersecurity overhead. These figures exclude the FTE costs described in Section 1.c and exclude any costs associated with TPA or contract-pharmacy vendor implementations, which would bill Parkview separately. They also assume a narrow rebate program involving a small subset of drugs; if HRSA were to expand a rebate model to cover all drugs selected for Medicare price negotiation through 2027, as HRSA has indicated it may consider, these costs would increase materially. Importantly, these costs are stranded investments that produce no clinical value, no patient-facing service, and no operational improvement, but would be incurred solely to enable the retrospective recovery of a discount Parkview already receives reliably under the upfront model. HRSA should weigh this against any purported program-integrity benefits of a rebate model and recognize that every dollar spent on rebate infrastructure is a dollar diverted from care. e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Beyond the direct staffing and IT costs described above, Parkview anticipates meaningful additional expense in the following categories: outside legal counsel to review and, where possible, negotiate manufacturer and platform-vendor terms of use and data-sharing agreements, and to advise on False Claims Act and Medicaid billing-compliance exposure arising from the rebate models interaction with state Medicaid requirements; Page 6 of 15 consulting support to design, validate, and audit the rebate claim-submission workflow; expanded cyber-liability insurance coverage to address the new breach exposure associated with transmitting patient-level claims data to manufacturer-controlled platforms; staff training and change-management costs across pharmacy, compliance, finance, IT, and clinical leadership; and bond-covenant and lender-relations costs if the rebate model triggers covenant review or renegotiation given the cash-flow impacts described in Section 2. Parkview serves a large rural and semi-rural catchment area across northeast Indiana and northwest Ohio. Within that footprint, Parkview operates several critical-access and rural- referral sites and participates in the 340B Program through multiple covered-entity types. A Rebate Model Pilots impact is not uniform across these sites: Rural and critical-access sites operate with minimal pharmacy administrative overhead and are least able to absorb new claims-submission, reconciliation, and dispute workflows. Centralizing this work at Parkviews system level is possible but it does not eliminate the underlying cost. It simply reallocates it within the system. Sites with a high proportion of uninsured and Medicaid patients rely on 340B savings to fund medication-assistance, charity-care drug dispensing, and sliding-scale programs. Any reduction in the reliability or timing of those savings translates directly into reduced ability to support those programs. Sites with significant oncology and infusion volume carry the greatest WAC-purchasing exposure under a rebate model because the drugs in scope and their analogues are high- acquisition-cost therapies; even a short delay in rebate payment creates material cash- flow strain. Contract-pharmacy arrangements, through which Parkview extends medication access to patients in communities where it does not operate an owned pharmacy, become materially more complex to operate under a rebate model because of the need to capture and transmit claims data from third-party pharmacy systems within tight submission windows. Parkview anticipates numerous direct, concrete impacts on patient access to drugs if a rebate model is implemented: Reduction or elimination of 340B-funded clinical services. A significant portion of Parkviews 340B savings is currently reinvested in services that are not otherwise self- sustaining, including without limitation, oncology nurse navigation, pharmacist-led anticoagulation and heart-failure clinics, diabetes education, medication-therapy management for high-risk polypharmacy patients, transitions-of-care pharmacy support, and patient financial-assistance programs that help uninsured and underinsured patients afford medications. Any net reduction in 340B savings whether through cash-flow impairment, denied rebates, or administrative cost absorption puts these services directly at risk. Narrowing of medication-assistance programs. Parkviews medication-assistance programs help patients afford medications, including the very classes of drugs in scope for proposed Rebate Pilot Model (anticoagulants, DPP-4 and SGLT2 agents, biologics for autoimmune and oncologic indications, insulin). Under a rebate model, the drugs most at risk for access disruption would be, ironically, the same drugs the MDPNP was designed to make more affordable. Page 7 of 15 Delayed therapy initiation. Where a covered entity cannot confidently rely on timely rebate payment, there is pressure to delay or decline to initiate costly therapies for patients whose third-payer payer leaves financial risk with the provider. This is particularly acute in outpatient oncology and specialty infusion, where a single course of therapy can carry six-figure drug acquisition costs. Site-of-care shifts. Financial pressure from a rebate model could force consolidation of specialty infusion and outpatient oncology services toward higher-volume urban sites, increasing travel burden for rural patients, many of whom already face significant access challenges. This would run directly counter to the 340B Statutes purpose of reaching more eligible patients with more comprehensive services. Formulary and dispensing-channel changes. Covered entities facing operational complexity on a narrow set of drugs may, reluctantly, steer patients toward alternative therapies or alternative dispensing channels where feasible, decisions that should be driven by clinical considerations, not rebate-model administration. These are not hypothetical risks. They are the predictable, direct consequence of layering a new operational model onto a program whose savings are already fully committed to patient-facing services. 2. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES HRSA is already aware that covered entities eligible to participate in the 340B Program operate on thin margins, and purchasing 340B drugs pursuant to any rebate model would force covered entities to advance manufacturers significant sums millions of dollars that most safety-net covered entities simply do not have sitting idle. Under current arrangements, Parkview purchases 340B drugs from its primary wholesaler on standard payment terms, with prompt-pay discounts available. Critically, Parkview pays the 340B price at the point of purchase, not WAC, meaning the working-capital requirement under the current model is a small fraction of what it would be under a rebate model. Given that the difference between WAC pricing and 340B pricing is a minimum of 22.5%, up to about 30%, Parkview estimates that purchasing the ten in-scope drugs at WAC and awaiting rebate would require us to float millions of dollars in working capital at any given time during a rebate pilot, before accounting for any pended or denied claims. This estimate reflects approximately 4 weeks of average inventory turnover at WAC pricing for the in-scope drugs, plus an additional buffer to account for the gap between data submission and rebate receipt even under a compliant 10-day payment window. This concern is made more acute by the fact that HRSA expressly contemplates covered entities purchasing drugs under any rebate pilot at WAC a premium price at which few healthcare providers actually purchase drugs in the ordinary course in the real market. That artificially inflates the working-capital burden above even what a straightforward pay list, get rebate framing would suggest. It also exposes covered entities to mispricing, overcharges, and reconciliation risk on the purchasing side, quite apart from the rebate side of the equation. This kind of dramatic budgetary shift would be untenable for many covered entities, particularly rural, disproportionate-share, and community-based sites, and flies in the face of Congresss intent in enacting the 340B Statute. Hundreds of hospitals reported to the AHA in the wake of the Johnson & Johnson rebate proposal that rebate policies could cause them to violate their bond covenants, leading to catastrophic financial distress and, for some, permanent closure. HRSA simply cannot responsibly implement a model that pushes hundreds of hospitals to the brink of closure and leaves the communities they serve without access to critical care. If Page 8 of 15 HRSA proceeds with any rebate model, a stated 10-day payment window is meaningless without enforcement. Parkview recommends the following structural elements: A mandatory automatic-payment mechanism pursuant to which rebates should be released to the covered entity within 10 calendar days of a validly submitted claim by default, with any denied or pending claim requiring affirmative manufacturer action and documented basis. The burden of action should sit with the manufacturer, not the covered entity. Mandatory daily-compounding interest on any rebate not paid within 10 calendar days, at a rate that exceeds the covered entitys cost of capital, so that delay is unambiguously averse to the manufacturer. A clear, published, HRSA-administered escalation and enforcement path with defined timelines and consequences for manufacturer non-compliance, including automatic revocation of plan approval upon a documented pattern of late or improper denials, rather than a referral to the OPA inbox. Mandatory public reporting, at least quarterly, of manufacturer-level rebate timeliness metrics (claims submitted, paid within 10 days, paid after 10 days, pended, denied, median days to pay). An express requirement that manufacturers reimburse covered entities for the cost of capital associated with any advance purchasing under the rebate model, as an additional per-claim administrative payment. Alternative payment structures that would mitigate cash-flow impact, including: advance-deposit or escrow arrangements funded by manufacturers; direct-bill arrangements in which the covered entity is invoiced net of the 340B price at the point of purchase (i.e., effectively an upfront discount administered through a rebate mechanism); or a hybrid pre-validation model in which eligibility is confirmed at purchase and the financial transaction settles net. Each of these approaches would more closely align with the operational reality of how covered entities manage pharmaceutical working capital today, and each would reduce, though not eliminate, the harms described above. 3. REBATE DENIALS. A rebate model without strict, narrow, and enforceable inappropriate denial guardrails is an invitation for manufacturers to delay and deny their way to de facto refusal of 340B pricing. Parkview strongly recommends that HRSA limit the acceptable grounds for manufacturer denial of a rebate request to a closed list, limited to: (i) a showing that a 340B rebate was provided on the same claim to another covered entity; (ii) a showing that the dispense was subject to the MDPNPs non-duplication provision; or (iii) a facial defect in the submitted claim that the manufacturer identifies and describes with specificity within a short, fixed window after submission. All other grounds should be expressly disallowed, and any denial should require contemporaneous, specific, written rationale and documentation delivered to the covered entity through the designated, government-run platform. Beyond the acceptable grounds for denial, Parkview is particularly concerned about the significant potential for manufacturers to use the data collected through any rebate model in ways not expressly permitted by HRSA. While the prior Rebate Pilot Model Program Notice prohibited manufacturers from denying rebates based on alleged diversion or Medicaid duplicate-discount compliance concerns, it provided no guardrails limiting manufacturers use of collected data with respect to denial of rebates on other grounds. A significant concern among covered entities Parkview included is that, in the absence of express protections, manufacturers would use data Page 9 of 15 collected through any rebate program to deny rebate claims inconsistent with the manufacturers unapproved contract pharmacy restrictions, which would neither relate to diversion nor duplicate discounts and is not a 340B Program compliance issue that HRSA should be enforcing. The prior Rebate Model Notice also failed to address how HRSA-approved manufacturer rebate programs are expected or required to account for state law contract-pharmacy protections, leaving the door wide open for manufacturers to extend such restrictions to claims that would otherwise be protected under state law. Parkview and the broader 340B covered-entity community fully expect manufacturers to exploit this distinction to deny appropriate and compliant rebate claims, particularly in light of the absence of specific safeguards to protect covered entities from inappropriate denials and the absence of meaningful enforcement mechanisms to ensure manufacturers pay valid rebates on a timely basis (discussed further in Section 5). HRSA should, at a minimum, adopt the following standard process elements: A uniform denial code set and template denial notice, so that covered entities can systematically identify, categorize, and respond to denials across manufacturers. A strict timeline for manufacturer adjudication of any contested denial, not to exceed 30 calendar days from the covered entitys challenge, with automatic deemed approval if the manufacturer fails to act. An express prohibition on denials based on contract-pharmacy status, number of contract pharmacies, geographic restrictions, or any criterion not grounded in the narrow-closed list above. An express prohibition on manufacturers using data submitted through any rebate platform for purposes other than adjudication of the specific rebate claim at hand, including, specifically, no use for contract pharmacy policy enforcement, no use for commercial analytics, and no sharing with affiliated entities or trade associations. A dedicated HRSA-administered dispute-resolution process (see Section 5), including escalation pathways, documented decision timelines, and remedies that include interest, penalties, and plan-revocation triggers. 4. DATA COLLECTION BY COVERED ENTITIES Current data collection, maintenance, and integrity Parkview currently collects, maintains, and retains 340B Program data through an integrated combination of its pharmacy management system, EHR, inventory-management platform, and split-billing / virtual-inventory TPA. Parkview applies a multi-layered data- integrity framework that includes automated validation at the point of data capture; daily and monthly reconciliation between dispense records, purchase orders, and accumulator adjustments; independent internal audit review on a defined cadence; and annual comprehensive audits performed by independent external auditors. Parkviews current data practices are built around the upfront-discount model and support both day-to-day operations and audit readiness under HRSAs existing guidance. A rebate model would materially expand the scope, granularity, frequency, and counterpart reach of Parkviews 340B data collection. Specifically, Parkview would need to: capture and transmit claim-level data elements to external manufacturer (or manufacturer-vendor) platforms that Parkview does not currently send outside its own systems; maintain those data flows in parallel with existing internal split-billing processes; Page 10 of 15 implement new retention and audit-trail requirements specific to rebate claim submissions, denials, and payments; and expand its privacy, security, and breach-notification controls to encompass the new external data flows. These changes would be substantially ongoing, not one-time, because each manufacturer platform is likely to evolve its data specifications over time. Appropriate data elements and limits If HRSA determines that any rebate model should proceed, the required data elements should be strictly limited to the minimum necessary to adjudicate a rebate claim and to identify duplicate-discount risk under 340B and the MDPNP. Parkview recommends that HRSA specify a single, uniform, closed data set applicable to all manufacturers, that it prohibits manufacturers from requesting any additional elements, and that it excludes any element that is not already routinely captured in pharmacy or medical claim records. In particular: No patient-identifying data elements beyond what is strictly necessary for duplicate- discount deduplication should be required. Name, address, date of birth, and free-text clinical notes should be categorically excluded. Prescriber-level identifiers should not be required beyond standard NPI and should not be used for any purpose other than claim adjudication. For contract-pharmacy dispenses, the data set should be the same as for in-house dispenses; a bifurcated requirement would invite manufacturers to impose heightened burdens on contract-pharmacy claims as a de facto contract-pharmacy restriction. Data elements for the rebate platform should be harmonized, to the maximum extent possible, with data elements covered entities already submitted under the MDPNP non- duplication workflow, to avoid duplicative reporting. Privacy, security, and guardrails serious concerns Covered entities have serious concerns about the practical implications of the data- sharing required under a rebate model. First, if HRSA permits manufacturers to implement their respective rebate programs through their own individual IT platforms (whether owned and operated directly or through contracted vendors), the result is the operational reality of covered entities having to navigate multiple separate IT platforms, each with its own data-submission requirements, processes, and timelines. Even in the context of a limited rebate pilot applicable to ten drugs sold by nine different manufacturers, this latitude could require covered entities to interface with nine separate platforms. Beyond the heightened risk of delays and errors in data submission and rebate payment, and the inherent conflicts of interest that manufacturer- controlled platforms create, the sheer complexity and burden of interfacing with nine separate rebate platforms is untenable for many covered entities. If any rebate program moves forward, HRSA must require a single, neutral IT platform, one that is not owned or operated by any manufacturer or by a vendor affiliated with manufacturers or its trade associates serve as the data clearinghouse for covered-entity submissions. This is the single most important structural safeguard HRSA can adopt to protect against data misuse, reduce administrative burden, and maintain a level playing field among manufacturers. Notwithstanding general requirements that manufacturer proposals include assurances that data will be secure and protected and that collection will be limited to listed elements, Parkview has significant concerns about the prospective protection and security of data submitted by covered entities, and about the availability of recourse against manufacturers and their IT platform vendors in the event of any breach or data loss. The prior Rebate Pilot Page 11 of 15 Model Program Notice did not require manufacturers to limit covered entities financial or regulatory exposure in the event of a breach, which suggests that HRSA does not appreciate the risk and financial liability that this data sharing presents. Covered entities recent experience with manufacturer-driven platforms provides no confidence that manufacturer-operated or manufacturer-selected IT platforms will offer meaningful protection or recourse. For example, the terms of use for Second Sight Solutions 340B ESP platform, presented as non-negotiable by Second Sight, contain limited data privacy and security assurances and cap Second Sights liability for unauthorized use or disclosure of claims data and security breaches at $100 for any damages incurred by a covered entity. Submission of data through 340B ESP is nonetheless required for covered entities to access certain 340B drug replenishment for contract pharmacies due to manufacturers unlawful contract-pharmacy policies, so covered entities are required to accept, without any opportunity to negotiate, substantial risk that they will be saddled with the full burden of a data breach. More recently, covered entities were presented with the same non-negotiable approach in connection with rebate models proposed by Johnson & Johnson and Sanofi via the Beacon platform, which is also owned and operated by Second Sight Solutions. While the lack of contractual privacy, security, and liability protections from Second Sight is unsurprising, HRSAs failure to require such protections under the original pilot was surprising and disappointing. When considering manufacturer proposals for any rebate model, HRSA must pay particularly close attention to proposed data-protection measures and proposed terms governing covered-entity recourse. Given that a rebate model results in added financial and administrative burden for covered entities, covered entities should not also be required to unilaterally insure against manufacturer failures to appropriately protect the patient data they are newly required to submit in order to secure continued access to 340B pricing. At a minimum, HRSA should require: a floor of manufacturer (or platform-vendor) liability that is commercially reasonable and scaled to actual breach exposure, not capped at nominal amounts; mandatory breach-notification timelines consistent with or stricter than HIPAA; mandatory cyber-insurance coverage held by the platform operator, naming covered entities as additional insureds; an express prohibition on the use of submitted data for any purpose other than rebate adjudication; and contractual audit rights for covered entities (or HRSA, on their behalf) to verify data- handling practices. 5. MANUFACTURER EFFORTS TO AVOID DUPLICATE DISCOUNTS Parkview has long maintained robust practices and procedures to avoid paying both 340B discounts and Medicaid rebates on the same dispensing. These practices are built into Parkview's pharmacy and revenue-cycle workflows and are validated through periodic internal audit and through HRSAs own audit activity. Since January 1, 2026, Parkview has also implemented operational and administrative adjustments to comply with the MDPNP non-duplication provision. Parkviews experience to date has surfaced several challenges that HRSA should understand before concluding that a rebate model is necessary to address duplicate-discount risk under the MDPNP. These include: Data availability and timing mismatches; Page 12 of 15 MDPNP eligibility information is not always available at the point of dispense, requiring retrospective reconciliation; The interaction of 340B carve-in/carve-out rules, Medicaid Exclusion File listings, state- specific modifiers, Medicare Part D claim flows, and managed-care reporting creates identification challenges that no single rebate platform can fully resolve; State Medicaid agencies and MCOs have varied requirements, with some requiring claim modifiers, and some requiring actual acquisition cost reporting, without consistent alignment; and The lack of a central source of truth. There are no single, authoritative, low-latency system where covered entities, manufacturers, and payers can reconcile whether a specific unit of drug has been discounted under 340B, subject to a Medicaid rebate, or subject to the Maximum Fair Price under MDPNP. HRSA must provide clear guidance on how covered entities should bill state Medicaid agencies and Medicaid MCOs that require claim modifiers or actual acquisition cost reporting under a rebate model, rather than passing the burden of alignment to covered entities. HRSAs failure to thoughtfully consider this issue will expose covered entities not only to 340B Program compliance risk with respect to duplicate-discount prevention, but also to federal program billing compliance risk and potential liability under the False Claims Act. This is not a theoretical concern. Covered entities are being asked to build rebate workflows while simultaneously complying with Medicaid billing rules that may or may not accommodate WAC purchasing, and the interaction of the two creates real legal exposure. In terms of minimum data elements, the duplicate-discount inquiry requires: NDC, date of service, dispensing pharmacy NPI, 340B ID, Medicaid status indicator, and an MDPNP applicability indicator. These elements are already captured in routine pharmacy and medical claim records and already reportable through existing split-billing and Medicaid Exclusion File mechanisms. A rebate model is not needed to access this data; a targeted, HRSA-administered duplicate-discount clearinghouse would be a far less disruptive alternative. Finally, Parkview acknowledges that any rebate program would require manufacturers to resolve diversion or Medicaid duplicate-discount compliance concerns through existing 340B dispute-resolution procedures rather than denying rebate claims on those grounds. Even so, manufacturers would otherwise have significant latitude to approve or deny claims (and to define what constitutes sufficient documentation in support of a denial), and the covered entitys only recourse is to raise the concern with OPA. The worst a manufacturer would face under the prior pilot design was HRSAs revocation of its rebate model if the manufacturer trended toward failing to timely remit payment. That is not a serious consequence. On the other side of the ledger, it is squarely in manufacturers economic interest to deny or delay rebate claims at as high a rate and for as long as possible. The absence of a meaningful recourse mechanism compounds the covered entity's de facto advance of funds to manufacturers because there is no guarantee the covered entity will ever recover the full value of rebates to which it is legally entitled. This would further narrow covered-entity margins and place many at serious financial risk. HRSA must implement a dedicated process for disputing unpaid rebates and outline a robust enforcement mechanism and penalties for manufacturers' failure to timely remit payment or for inappropriate denials. Absent a more structured enforcement mechanism, covered entities are at a tremendous disadvantage in resolving disputes on unpaid rebates. Specifically, Parkview recommends that HRSA establish: a formal, published dispute-resolution process with defined decision timelines and appeal rights; per-day interest on unpaid rebates at a rate exceeding the covered entitys cost of capital; Page 13 of 15 automatic plan-revocation triggers for documented patterns of late payment or improper denial; public manufacturer-level reporting on rebate timeliness, pending claim rates, and claim denial rates; and a statutory-style ADR pathway (modeled on existing HRSA ADR) available to covered entities at their election. 6. REQUIRED REPORTING Robust reporting from manufacturers is essential to any rebate program, both for HRSAs oversight and for public accountability. The current rebate model framework places the vast majority of data-submission burden on covered entities while requiring comparatively little from manufacturers an imbalance that should be corrected. At minimum, HRSA must require manufacturers to submit the following on a monthly basis: Total number of rebate claims received, by drug and by covered entity type (grantee, DSH, CAH, childrens hospital, etc.); Total number of rebate claims paid within 10 calendar days, paid after 10 days (with distribution of days-to-pay), pended, and denied; Denial reasons, disaggregated by a uniform HRSA-defined denial code set, with counts by reason.; Aggregate dollar value of rebates requested, paid, pending, and denied; Median and 90th-percentile days-to-payment across all claims; Counts and outcomes of dispute-resolution matters initiated by covered entities against the manufacturer; and Data-security incidents on any IT platform used by or for the manufacturer, consistent with HIPAA breach-notification timelines. HRSA should publicly release, at least quarterly, a manufacturer-level scorecard reflecting these metrics. Transparency is the single most effective check on manufacturer behavior in a program of this kind: if covered entities, researchers, and the public can see which manufacturers are paying timely and which are not, accountability will follow. This should be a condition of plan approval, not a voluntary commitment. For program assessment, manufacturer reporting should be required for the full duration of any pilot, with a minimum reporting period of 12 months post-implementation and continuing so long as the program remains in effect. HRSA should commit in advance to a formal evaluation framework, with criteria published before implementation begins, so that stakeholders understand what outcomes the pilot is being measured against and how the program will be wound down, continued, or modified based on those outcomes. A rebate pilot without a pre-defined evaluation framework is not a pilot; it is a permanent change in program design wearing a pilots label. Finally, HRSA should require manufacturers to report on their own administrative costs of operating their rebate programs precisely the information HRSA is asking covered entities to supply so that the burden picture is symmetric. Parkview is skeptical of any design in which manufacturers are permitted to keep their own costs and operations opaque while covered entities are required to expose theirs. 7. 340B PROGRAM INTEGRITY AND OTHER POTENTIAL BENEFITS OF A REBATE PILOT Page 14 of 15 Parkviews view, shared by the AHA, AAMC, Americas Essential Hospitals, Premier, 340B Health, and the community health center field, is that a rebate model would not strengthen 340B Program integrity; it would weaken it. Program integrity is a function of (i) whether the intended beneficiaries of 340B receive the intended benefit, (ii) whether manufacturers provide the required price concession reliably and in full, and (iii) whether duplicate discounts are prevented. On each of these three dimensions, a rebate model performs worse than the upfront- discount model that has been in place for more than three decades. Effect on program integrity Reliability of benefit delivery. Under the upfront model, the 340B discount is applied at the point of purchase and delivered with certainty. Under a rebate model, delivery is contingent on claim submission, manufacturer adjudication, and timely payment, all of which introduce new failure points. Every failure point reduces the certainty that the statutory benefit actually reaches the covered entity and, by extension, the patients it serves. This is a net reduction in program integrity, not an improvement. Shift of financial risk. Program integrity is also undermined when financial risk is shifted from the manufacturer (who is the party with the statutory obligation) to the covered entity (who is the party the 340B Statute was designed to protect). A rebate model effects precisely that shift, and it does so without any corresponding protections for covered entities against manufacturer delay, denial, or misuse of submitted data. Asymmetric information and leverage. The rebate model framework, as originally proposed, gave manufacturers near-total control over the IT platforms through which rebate claims would be adjudicated, while providing covered entities with no meaningful leverage to contest denials or enforce payment timeliness. This asymmetry is corrosive to program integrity. A rebate model does not help with the prohibition of duplicate discounts, diversion, or transparency. In particular: Duplicate discounts: A rebate model is not necessary to address duplicate-discount risk. The data elements required to identify duplicate discounts under 340B and the MDPNP are already captured in routine claims data and are already reportable through existing mechanisms. A targeted HRSA-administered duplicate-discount clearinghouse or enhancement of the existing Medicaid Exclusion File and MDPNP non-duplication workflows would address the issue more directly, with far less disruption to covered entities. The rebate model uses a sledgehammer where a scalpel is available. Diversion: A rebate model does not reduce diversion risk. Diversion is addressed through eligibility controls, patient-definition enforcement, and audit all of which operate today under the upfront model. A rebate model adds no new diversion- prevention capability; it simply inserts a manufacturer as an additional gatekeeper in a role the 340B Statute does not permit. Transparency: A rebate model does not increase transparency in any direction that benefits patients or the public. It increases the volume of patient-level data flowing to manufacturers, which is the opposite of patient-centered transparency. Genuine transparency for example, public reporting of manufacturer pricing, 340B ceiling prices, and manufacturer rebate timeliness does not require a rebate model to achieve and would be better pursued as a standalone policy. Recommendations for improving program integrity without a rebate model Page 15 of 15 If HRSAs underlying goals are duplicate-discount prevention, MDPNP non-duplication compliance, and improved transparency, Parkview recommends the following alternatives, each of which is materially less disruptive than a rebate model: Enhance the Medicaid Exclusion File and require state Medicaid agencies and MCOs to fully utilize it for both FFS and managed-care claims. Build or designate a neutral duplicate-discount clearinghouse that receives minimal NDC-level data from covered entities and compares against MDPNP claim data, returning a simple non-duplication determination. Require manufacturer public reporting of 340B ceiling prices, rebate payment timeliness (under existing Medicaid rebate processes), and compliance metrics which do not require a new covered-entity-facing data flow. Align MDPNP non-duplication billing guidance across Medicare, Medicaid, and state programs so that covered entities are not required to reconcile conflicting rules. Strengthening HRSA audit authority and enforcement against manufacturers that overcharge covered entities a documented and persistent compliance gap. Net assessment of costs vs. benefits On Parkviews assessment, the costs of a rebate model operational, financial, clinical, and to 340B Program integrity significantly outweigh any purported benefits, and every benefit HRSA identifies as a rationale for the model can be achieved through less disruptive alternatives. The 340B Statute directs manufacturers to provide a discount to covered entities. For more than three decades, that discount has been provided upfront, reliably, and on a scale. Covered entities have organized their financial operations, staffing, patient services, and community programs around that reliable upfront discount. Disturbing that arrangement for a narrow set of drugs, on a compressed timeline, through manufacturer-controlled platforms, without meaningful enforcement or data protection is not 340B Program improvement. It is 340B Program degradation. Parkview respectfully urges HRSA to decline implementing a rebate model and to pursue the targeted alternatives above instead. 8. CONCLUSION Parkview appreciates HRSAs consideration of the foregoing comments in response to the Rebate Model Pilot Notice and strongly urges HRSA not to implement the Rebate Pilot, as it will strain financial resources that are already stretched thin, jeopardize patient-facing clinical resources, and increase compliance risks. If HRSA decides to move forward with the Rebate Pilot, HRSA must take steps to minimize the financial and compliance burdens outlined herein to avoid serious and lasting damage to covered entities ability to serve their communities in direct contravention of the 340B Programs intended purpose. Sincerely, Chris Jellison, RPh, MBA, Senior Vice President of Enterprise Pharmacy Parkview Health
HRSA-2026-0001-2339American Healthcare Conundrum2026-04-20T04:00Z23,602 chars
This comment is submitted by the publisher of The American Healthcare Conundrum, an investigative data journalism project that uses publicly available federal data to quantify waste in the US healthcare system. The full comment is provided in the attached document. In summary: (1) the 340B rebate concept should not be abandoned the prior pilot was enjoined on APA grounds, not on a finding that a rebate mechanism is inconsistent with section 340B(a)(1), which expressly contemplates a "rebate or discount"; (2) the principal defect of any 340B design is information asymmetry, not the timing of the discount; (3) transparency and auditability must be design requirements, with published covered-entity-level and manufacturer-level rebate data at a granularity comparable to CMS Medicare Part D Spending by Drug; (4) biosimilar neutrality should be written into the rebate framework, given documented structural failures in biosimilar adoption (adalimumab biosimilars captured 1.1% of Medicare Part D claims after multiple FDA approvals); (5) independent researcher access is a program-integrity asset. Detailed responses to the seven numbered topic areas follow in the attached document. All supporting code, data, and methodology are open-source at https://github.com/rexrodeo/american-healthcare-conundrum. Andrew Rexroad The American Healthcare Conundrum vonrexroad@gmail.com April 20, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Submitted via https://www.regulations.gov Re: Request for Information: 340B Rebate Model Pilot Program; HHS Docket No. HRSA-2026-03042 (91 Fed. Reg., published February 17, 2026; comment period extended to April 20, 2026, 91 Fed. Reg. notice published February 26, 2026). To the Office of Pharmacy Affairs: This comment is submitted by the publisher of The American Healthcare Conundrum, an investigative data journalism project that uses publicly available federal data to quantify waste in the US healthcare system. The comment represents no covered entity, manufacturer, wholesaler, pharmacy, PBM, or trade association. All supporting code, data, and methodology are open-source at https://github.com/rexrodeo/american-healthcare-conundrum. The analysis relies on primary federal data (CMS HCRIS, CMS Medicare Part D Spending by Drug, CMS National Health Expenditure Accounts), peer-reviewed literature, and published federal reports (FTC PBM Interim Reports I and II, 2024 and 2025; state auditor reports; RAND Round 5.1 Hospital Pricing Study 2023). Figures cited below are documented in published issues of The American Healthcare Conundrum and can be independently verified from their underlying public datasets. Summary of Position The 340B rebate concept should not be abandoned. The vacated pilot was enjoined on Administrative Procedure Act grounds, not on a judicial finding that the rebate mechanism is inconsistent with section 340B(a)(1). The statute expressly contemplates effectuation of the ceiling price through "rebate or discount." A rebate mechanism, properly scoped and transparently operated, is a legitimate and potentially superior tool for preventing duplicate discounts and for generating the auditable data trail the current upfront-discount system does not produce. The principal defect of any 340B design is information asymmetry, not the timing of the discount. The analytically important question for HRSA is not whether the discount is delivered upfront or as a rebate. It is whether the covered entity, the manufacturer, the wholesaler, and the Federal Government can each independently verify that the discount reached an eligible patient at an eligible site, and that no duplicate discount was paid. Any rebate framework HRSA considers should be evaluated against this test. Transparency and auditability must be design requirements, not afterthoughts. If HRSA proceeds with a rebate pilot, the program should publish de-identified, covered-entity-level and manufacturer-level data on rebate claims submitted, paid, denied, and reconciled, within 180 days of each rebate cycle, at a level of granularity comparable to CMS Medicare Part D Spending by Drug. The same transparency failures that allowed documented extraction in the PBM layer (FTC Interim Report I, July 2024) will repeat in the 340B rebate layer if data flows are not public and analyzable. Biosimilar neutrality should be written into the rebate framework. Analysis of CMS Medicare Part D Spending by Drug data for calendar year 2023 shows adalimumab biosimilars captured 1.1 percent of Medicare Part D claims and 0.3 percent of spending after multiple FDA-approved biosimilars entered the market. This is a structural failure in formulary economics. A rebate mechanism that inadvertently rewards higher-list-price reference products over biosimilars would propagate this failure into the 340B program. Any rebate rule should include molecule- level neutrality provisions. Independent researcher access is a program-integrity asset. HRSA's 340B Office of Pharmacy Affairs Information System (OPAIS) documents which entities participate. It does not expose prices, volumes, or the spread between acquisition cost and dispensing revenue. A rebate mechanism creates a natural audit point at the manufacturer-to-covered-entity rebate record. HRSA should commit to publishing that record in a standardized, analyzable format. The remainder of this comment responds to the seven numbered topic areas in section II of the RFI. Given that this commenter is neither a covered entity nor a manufacturer, responses are limited to the areas where independent public data, primary federal data, and peer-reviewed literature support a substantive observation. 1. Costs to Covered Entities The RFI asks covered entities to quantify current and incremental administrative costs under a rebate model. Several observations bear on how HRSA should interpret those responses. The comparative baseline must include the hidden administrative costs of the current upfront- discount system. The current system generates contract-pharmacy reconciliation work, third-party administrator fees, and duplicate-discount avoidance logic at multiple points in the supply chain. HRSA should instruct commenters to itemize these costs so the incremental cost of a rebate system can be compared against a complete, not a partial, baseline. Administrative cost estimates should be reconcilable against published hospital cost reports. CMS HCRIS FY2023 HOSP10-REPORTS data, analyzed across 3,193 acute-care hospitals (Issue #3 of The American Healthcare Conundrum), show that general and administrative overhead is one of the most variable line items across peer hospitals. Administrative costs claimed as attributable to 340B compliance should be reconcilable to Worksheet A cost center data. Cost estimates that cannot be matched against HCRIS filings should be treated as provisional and subject to audit. Offsetting administrative cost recovery should be bounded. If HRSA structures the rebate program to offset covered-entity administrative costs (sub-question 1.b.iv), the offset must be transparent and capped at documented incremental cost. An open-ended administrative recovery provision would create a new extraction vector analogous to the PBM "bona fide service fee" structures documented in FTC Interim Report II (January 2025), which have functioned in practice as a mechanism to preserve rebate retention while nominally complying with pass-through requirements. 2. Payment Timing and Cash-Flow Impacts The 10-calendar-day rebate payment window contemplated in sub-question 2.d is a reasonable baseline, consistent with the 7-to-15-day prompt-payment terms that predominate in pharmaceutical wholesale contracts. For the rebate mechanism to be cash-flow-neutral relative to the current upfront- discount arrangement, three design elements are load-bearing: A regulatory rebate payment deadline with automatic interest accrual. Self-executing interest at the Federal short-term rate plus two percentage points, payable to the covered entity, for any rebate not paid within the 10-day window. This mirrors the Prompt Payment Act (31 U.S.C. Chapter 39) and does not require HRSA to adjudicate each dispute. An escrow or bond requirement for manufacturer participants. Each participating manufacturer should maintain a dedicated rebate account or surety bond sufficient to cover 30 days of expected rebate obligations. This addresses the risk that a manufacturer could delay payment, challenge each claim individually, and extract an interest-free loan from covered entities at scale. A uniform rebate-submission data standard. A single national data standard, published by HRSA and maintained under versioned change control, eliminates the ability of any single manufacturer to impose idiosyncratic submission requirements as a de facto denial mechanism. 3. Rebate Denials HRSA's sub-question 3.a proposes to limit acceptable grounds for rebate denial, for example to cases where a 340B rebate was provided to another covered entity on the same claim. This approach is correct in principle and should be narrowed further. Specifically: Acceptable denial grounds should be enumerated, not illustrated. A rule that permits denial only on enumerated grounds (duplicate discount already paid on the claim; claim outside the covered entity's registered ship-to or contract-pharmacy relationship; drug not covered by the manufacturer's 340B Pharmaceutical Pricing Agreement; documented non-340B-eligible patient) is auditable. A catch-all permitting denial "for other reasons as determined by the manufacturer" recreates the opacity the rebate model is intended to eliminate. Denials must be adjudicable on a defined timeline. An improper-denial adjudication process should have a 30-day statutory deadline from appeal, with a default outcome favoring the covered entity if HRSA does not adjudicate within the window. Open-ended adjudication creates an incentive for manufacturers to deny speculatively and wait out the process. Aggregate denial data must be public. Manufacturer-level denial rates, overturn rates, and time-to-adjudication should be published quarterly. The CMS-0057-F Prior Authorization Transparency Rule, which as of April 2026 exposes Medicare Advantage contract-level denial and appeal rates, has already demonstrated the diagnostic value of per-entity operating data in identifying outlier behavior. 4. Data Collection by Covered Entities The data elements contemplated in sub-question 4.d (pharmacy and medical claims data elements for both contract pharmacies and in-house pharmacies) are the foundation of program integrity. Several considerations should shape HRSA's approach. Data elements should be sufficient to reconstruct the claim. At minimum: NDC, quantity dispensed, date of service, covered entity 340B ID, prescribing provider NPI, dispensing pharmacy NPI or 340B contract-pharmacy identifier, payer type, and a patient-eligibility attestation linked to the covered entity's patient definition. The patient-eligibility element is the single most important field for preventing diversion and is the one most commonly absent from current 340B data flows. Privacy protections should be a function of data aggregation, not of data suppression. Patient-level identifiers are not required to be transmitted to manufacturers for the rebate mechanism to function. A covered-entity-generated claim token coupled with a HIPAA-compliant eligibility attestation is sufficient. De-identified claim-level data should be available for HRSA audit and for independent research under a data use agreement comparable to the CMS Limited Data Set framework. Third-party administrator data flows are the integrity choke point. Current 340B data in many covered entities flows through contract-pharmacy third-party administrators whose business models depend on volume-based fees. The rebate model should require the claim-level data used to justify each rebate request to be retained by the covered entity itself, in a form readable by HRSA auditors, for not less than 10 years. Reliance on third-party administrator databases alone creates a gap HRSA has historically had difficulty auditing. 5. Manufacturer Efforts to Avoid Duplicate Discounts The MDPNP nonduplication provision (42 U.S.C. 1320f-2(d)) creates a direct, statutorily-mandated reason for HRSA to solve the duplicate-discount identification problem. The rebate model is one of the few mechanisms that structurally supports this. Several observations follow. A rebate-at-claim design exposes duplicate discounts at the point of reconciliation, which an upfront- discount design does not. Current duplicate-discount detection relies on retrospective Medicaid claim matching, which is imperfect and can lag by quarters or years. A rebate-at-claim model, with the data elements itemized in Section 4, allows the manufacturer to see, at the time of rebate processing, whether the same claim has been identified as Medicaid-subject or MDPNP-subject. This is the central program-integrity argument for the rebate framework. The data asymmetry that currently favors manufacturers would reverse under a rebate model. Covered entities today have limited visibility into which specific dispenses a manufacturer believes were ineligible. Under a rebate model, each denial creates a written record. HRSA should treat that record as a program asset and publish aggregated denial data by manufacturer and by covered entity type on a defined cadence. Since January 1, 2026, the MDPNP nonduplication question has been operationally live. Experience to date with the first 10 MDPNP-negotiated drugs (Eliquis, Jardiance, Xarelto, Farxiga, Januvia, Entresto, Stelara, Imbruvica, Enbrel, NovoLog) has highlighted the difficulty of real-time identification of MFP- subject dispenses. Any rebate pilot should incorporate lessons from the first MDPNP applicability year and should not be scoped so narrowly that operational learnings are limited. 6. Required Reporting The reporting architecture of the rebate pilot is the single most consequential design choice in front of HRSA. Reporting determines whether the program is auditable by HRSA, by Congress, and by independent researchers. The recommendations below are grounded in the transparency standards already in use across comparable federal programs. Monthly manufacturer reporting to HRSA during the pilot. Required fields: rebate requests received (by covered entity type and drug); rebate requests paid; rebate requests denied and denial reason code; rebate requests under appeal; days-to-adjudication distribution; aggregate rebate dollars moved. Monthly cadence is appropriate because the pilot's purpose is to generate learnable data. Public release of de-identified covered-entity-level and manufacturer-level rebate data within 180 days of each rebate cycle. The reference transparency standard is CMS Medicare Part D Spending by Drug (data.cms.gov), which publishes claim counts, gross spending, and beneficiary counts by drug and by year for every Part D drug. That dataset has enabled an independent research ecosystem (including the adalimumab biosimilar analysis in Issue #4 of The American Healthcare Conundrum) that has materially informed federal policy. The 340B rebate program should meet the same standard. Machine-readable, versioned publication. HRSA should publish a rebate-data schema with semantic versioning and release every dataset in CSV or Parquet format. PDF-only publication would defeat the transparency purpose. The operational lesson of the HPT Final Rule is that format standardization is the difference between data that is audited and data that is ignored. Three-year minimum reporting horizon. Year 1 captures startup transients; Year 2 captures steady-state operations; Year 3 supports trend analysis. Horizons shorter than three years will not produce a record sufficient to resolve whether the mechanism works. 7. 340B Program Integrity and Other Potential Benefits The RFI's seventh topic area invites comments on whether a rebate-based model would strengthen program integrity, reduce diversion, and increase transparency. The weight of the public evidence supports a qualified yes, with four conditions. Condition 1: Transparency must be a statutory design requirement, not a discretionary agency choice. FTC Interim Report I (July 2024) documented $7.3 billion in excess specialty-drug reimbursements to PBM-owned pharmacies over five years. That extraction was invisible for a decade because the underlying data was not public. The 340B program is structurally vulnerable to the same extraction pattern through the spread between hospital 340B acquisition cost and commercial dispensing revenue, with the spread captured by contract-pharmacy administrators. The rebate mechanism is not a substitute for transparency. It is a complement. Neither alone is sufficient. Condition 2: Biosimilar neutrality must be built into the rebate framework. Analysis of CMS Medicare Part D Spending by Drug data for calendar year 2023 (Issue #4 of The American Healthcare Conundrum) shows that adalimumab biosimilars captured 1.1 percent of Medicare Part D claims despite FDA- approved interchangeable biosimilars priced at $2,703 per claim versus $9,148 per claim for the brand Humira. For filgrastim, by contrast, biosimilars captured 76 percent of Part D claims. The difference is not clinical. It is commercial: formulary economics. A 340B rebate mechanism that preserves per-unit rebate dollars on higher-list-price reference products without a corresponding neutrality rule will replicate this distortion. HRSA should include an explicit provision that, for any molecule with at least one FDA-approved biosimilar, the rebate mechanism must not structurally disadvantage the biosimilar in 340B acquisition. Condition 3: Independent researcher access must be a design feature. HRSA's OPAIS data establishes which entities participate. It does not expose the prices paid, the volumes moved, or the spread retained. A rebate mechanism creates a natural audit point at the manufacturer rebate record. HRSA should commit, in the final rule or notice governing the pilot, to publishing that record in a de-identified analyzable form, and to accepting independent data use agreements comparable to the CMS Limited Data Set framework. Peer-reviewed and open-source analyses of federal data have consistently preceded and informed federal reforms in this sector (FTC PBM investigation, IRA Part D design, HPT enforcement). The 340B program should be evaluated on the same public evidentiary record. Condition 4: Hospital pricing context must not be ignored in the savings calculus. Analysis of CMS HCRIS FY2023 HOSP10-REPORTS covering 3,193 acute-care hospitals (Issue #3 of The American Healthcare Conundrum) shows that the median US hospital charges commercial payers at 2.6 times its actual operating cost, with 37 percent of hospitals charging 3 times or more. The RAND Round 5.1 Hospital Pricing Study 2023 documents commercial payments at 254 percent of Medicare for identical inpatient procedures. In that environment, a 340B discount captured by a hospital system and not passed through to patient-visible prices does not produce the access benefit the statute contemplates. The rebate mechanism should be paired with a parallel requirement that covered entities publicly report how 340B savings (whether captured upfront or via rebate) translate into patient-facing price reductions, community benefit investments, or uncompensated care. Without that reporting, the program risks subsidizing the commercial pricing premium rather than offsetting it. Conclusion The 340B rebate concept, properly scoped and transparently operated, is a legitimate tool for preventing duplicate discounts, for interacting correctly with the MDPNP nonduplication provision, and for generating the auditable data trail the current upfront-discount system does not produce. The defect of the vacated pilot was not the rebate mechanism. It was the procedural path by which that mechanism was introduced, the breadth of the scope imposed on covered entities, and the absence of transparency and independent-researcher access provisions in the pilot's operational design. HRSA should proceed with a narrowed, transparent, and auditable 340B Rebate Model Pilot Program along the lines set out above, with the following specific asks: Preserve the rebate mechanism as a program-integrity tool, scoped initially to the drugs subject to MDPNP nonduplication and to manufacturers voluntarily participating. Adopt enumerated and auditable denial grounds; a 10-day rebate payment deadline with automatic interest accrual; and an escrow or bond requirement for manufacturer participants. Mandate uniform rebate-submission data standards, claim-level data retention by covered entities, and manufacturer monthly reporting to HRSA during the pilot. Publish de-identified, analyzable rebate data at covered-entity and manufacturer granularity within 180 days of each rebate cycle, matching the transparency cadence of CMS Medicare Part D Spending by Drug. Include an explicit biosimilar neutrality provision. A rebate mechanism that replicates the formulary economics that produced a 1.1 percent adalimumab biosimilar penetration rate in Medicare Part D is not a program-integrity improvement. Require covered entities to publicly report how 340B savings (whether captured upfront or via rebate) translate into patient-facing price reductions, community benefit investments, or uncompensated care. Without this reporting, the 340B program cannot be evaluated against its statutory purpose. The information asymmetries that shape extraction in the current US prescription drug supply chain are by now well-documented in the public record. The 340B program's legitimacy depends on whether the public record for 340B itself reaches the same level of granularity. A rebate model, properly designed, is the best available path to that record. About the Commenter The American Healthcare Conundrum (https://andrewrexroad.substack.com) is an independent investigative data journalism project that identifies quantifiable problems in the US healthcare system using publicly available federal data. Published issues referenced in this comment: Issue #2 (Medicare Part D brand drug pricing versus international peers); Issue #3 (commercial hospital reference pricing; original analysis of CMS HCRIS FY2023 HOSP10-REPORTS covering 3,193 acute-care hospitals and RAND Round 5.1); Issue #4 (PBM extraction mechanisms; original analysis of CMS Medicare Part D Spending by Drug data for calendar year 2023 incorporating FTC PBM Interim Reports I and II and state auditor findings). All analysis code is open-source at https://github.com/rexrodeo/american-healthcare- conundrum. The project accepts no industry or institutional funding and has no client relationships with covered entities, manufacturers, wholesalers, PBMs, or any party regulated by HRSA. Respectfully submitted, Andrew Rexroad The American Healthcare Conundrum vonrexroad@gmail.com https://andrewrexroad.substack.com https://github.com/rexrodeo/american-healthcare-conundrum
HRSA-2026-0001-2340Dignity Health a member of CommonSpirit2026-04-20T04:00Z5,880 chars
See attached file(s) Northridge Hospital Medical Center 18300 Roscoe Blvd Northridge, CA 91325 Direct (818) 885- 8500 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Northridge Hospital Medical Center, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Northridge Hospital Medical Center, that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Northridge Hospital Medical Center, relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Jeremy Zoch, PhD, MHA, FACHE President and CEO Northridge Hospital Medical Center As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2341California Primary Care Association2026-04-20T04:00Z20,590 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Californias nearly 2,300 Community Health Centers (CHCs) and the 6.2 million patients they serve, the California Primary Care Association (CPCA) appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This letter supplements those submitted by our states CHCs, which provide CHC-specific data in response to questions raised in the RFI. Summary of Recommendations: CPCA strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. 2 Summary of Comments: In these comments, CPCA explains: A. The importance of 340B savings to California CHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their 6.2 million patients. B. How a rebate model will create massive cashflow, administrative, and other costs for CHCs, imperiling their financial stability. C. Why the costs due to a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should never impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Unsustainable cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at Wholesale Acquisition Cost (WAC) would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income 3 requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi- step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Comments submitted by Californias CHCs will provide details on these financing needs. Also note that CHCs face substantial difficulty accessing credit from the private market at reasonable interest rates. Their financial strains (including the uncertainty around their Federal grant funding and their low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put liens on CHCs buildings. Massive administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Comments from our CHCs will help flesh out these costs. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will inevitably force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve- outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable 4 for their low-income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Considering all type of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. 5 This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit; this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. F. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs the rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. 6 This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just cherry-picking a few; and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement provided, on a monthly basis.) 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to skyrocket, and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues, and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and 7 burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) G. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on CEs. Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. The Claims Clearinghouse would operate as a neutral entity processing 340B claims and rebate requests thereby preventing duplicate discounts and allowing manufacturers to identify 340B transactions without accessing sensitive, proprietary, or competitive pricing data. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 8 Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Anna Marshall, Deputy Director of Federal Affairs and Policy, amarshall@cpca.org. Sincerely, Anna Marshall Deputy Director of Federal Affairs and Policy California Primary Care Association
HRSA-2026-0001-2342Christ Community Health Services2026-04-20T04:00Z41,891 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of Christ Community Health Services, Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Christ Community Health Services anticipates having $869,000 in upfront costs to purchase at WAC instead of 340b and having to increase our annual credit limit to over $3,000,000 with added interest costs of $275,153. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Christ Community Health Services in particular, this means it will impact over 63,000 patients in the Memphis Tennessee area. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: CCHS provided over $11,500,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: CCHS anticipates needing 2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, CCHS anticipates an increase of $150,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. CCHS will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. CCHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Roughly $100,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 63,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $300,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 3 pharmacies to increase access to affordable medications. 6 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Shelby and Jackson County Tennessee with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $11,000,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $400,000 to purchase these same drugs at the 340B ceiling price. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, CCHS anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health clinic. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 25,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. CCHS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain 10 within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $365,000 annually. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on CCHS, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays CCHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $1,000,000 This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 12 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion CCHS strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with 13 rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. CCHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. CCHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Jessica Hughes Jessica Hughes, MHA Interim CFO Christ Community Health Services
HRSA-2026-0001-2343Mercy Medical Center Merced2026-04-20T04:00Z5,744 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Mercy Medical Center - Merced, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Mercy Medical Center - Merced that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Mercy Medical Center - Merced relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Cathan Riding Chief Operating Officer Mercy Medical Center Merced As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2344Benefis Health System2026-04-20T04:00Z53,421 chars
See attached file(s) A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: On behalf of Benefis Health System in Great Falls, Montana, we appreciate the opportunity to comment on HRSAs Request for Information regarding the proposed shift to backend rebates in place of upfront 340B discounts, and we thank HRSA for extending the comment deadline to ensure covered entities can fully assess and articulate the impact of this proposal. Introduction and SafetyNet Role of Benefis Health System Benefis Health System is a communitybased, nonprofit health system in Great Falls, Montana, with one DSH hospital and two Critical Access Hospitals participating in 340B. Benefis serves approximately 230,000 residents across a fourteencounty region in central Montana, much of it rural and medically underserved. As the regions primary safetynet provider, we care for a large share of Medicare, Medicaid, uninsured, and lowincome patients, reflecting the financial vulnerability of the communities we serve. Benefis provides a robust set of services as a regional health system in a rural frontier state, including Level II trauma and emergency care, comprehensive specialty services, cancer treatment, advanced chronicdisease management, and stateoftheart diagnostics. Over the past three years, Benefis has provided over $3040 million per year in community-benefit investments, encompassing charity care, patient assistance, education, and other programs that advance community health and support vulnerable populations. The ability to offer this level of highquality, compassionate, and accessible carewhile operating as a lean organization with strong financial stewardship and thin marginsis made possible in large part by the savings we receive through the 340B program. Benefis ability to sustain this level of care for our community and region depends on the stability and predictability of the longstanding upfront discount model. A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 A Rebate Model Would Require Higher Upfront Costs, Create Significant Administrative and Operational Burdens, and Erode Resources for Patient Care Benefis strongly opposes any shift to a rebatebased model and urges HRSA to preserve the longstanding upfront discount model that has anchored the 340B program for three decades. A rebatebased approach would force hospitals like ours to purchase drugs at higher upfront prices, absorb substantial new administrative and operational burdens, and wait months for uncertain reimbursementdirectly reducing the resources available for patient care, community benefit programs, and the essential services our rural and frontier patients rely on. No Evidence Supports Replacing the Upfront Discount Model Manufacturers have not produced concrete, verifiable data demonstrating that duplicate discounts are occurring on a scale that would justify the extreme disruption to covered entities by replacing the longstanding upfront discount model. Independent analyses consistently note that the scope of duplicate discounts is unclear and have not identified systemic failures in the current framework. Available federal audits, state Medicaid guidance, and independent policy reviews describe theoretical risk but do not present empirical findings of widespread duplicate discounts or failures in existing prevention mechanisms. A Rebate Model Would Disrupt Established Reliance Interests Our 340B program - including inventory management, data integration with thirdparty vendors, systems and claims monitoring, compliance auditing, and the resources we allocate to patient care - has been built over years around upfront 340B discounts. Moving to a rebate model would disrupt wellestablished reliance interests grounded in decades of effective, consistent, compliant implementation of 340B to benefit our patients. Respectfully, HRSAs assumption that a rebate modeleven one designed with certain parameterswould have only a minimal impact on covered entities is incorrect. Since the August 1 Federal Register notice, covered entities have already been significantly impacted as we scramble with limited time and resources to interpret rapidly changing information and prepare operational infrastructure, budget projections, and anticipated impacts to programs and patient care. We are concerned this is only the beginning of significant disruption and increased costs and lost savings that weand our patient programsdepend upon. Operational and Financial Impacts to Benefis A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 HRSAs proposed rebatebased approach will disrupt decades of business practices built around upfront discounts. Benefis would be significantly impacted by having to: Purchase drugs at significantly higher upfront prices while waiting for rebate payments effectively providing interestfree loans to manufacturers. We project this impact will exceed $5 million annually for the first twentyfive drugs alone, with costs increasing each year. Devote significant internal IT and operational resources to gather medical claims data with additional data elements not used in standard billing or TPA submissions. Incur incremental administrative and operational costs to work with multiple TPAs and data platforms to submit claims data, track rebate data, validate and audit rebate payments, and pursue payment for denied rebates through goodfaith inquiries or HRSAs Administrative Dispute Resolution process. Submit data to thirdparty vendors from locations that do not currently do so, including multiple clean sites where only 340B drugs are used. All incremental costs are difficult to project given the broad impact on internal staff across pharmacy operations, IT, accounting and finance, administrative leadership, and compliance, as well as external consultants/agency staff combined with incremental software and data platform costs. Estimated impact: at least $500,000 per year, based on: Administrative and operational time devoted to preparing for the proposed (paused) rebate pilot in 2025. Realized or quoted consultant/software/agency staff fee changes or new scopeofwork proposals. Operational time recently incurred to implement new data submissions in response to manufacturer notices blocking 340B pricing unless data is submitted through 340B ESP. Administrative and operational time we are now incurring to manage the MFP effectuation payment determinations and reconciliation - which involves similar laborintensive data management and operational tasks (has already resulted in significant confusion, rapidly changing requirements, and an unacceptably high rate of pay/nopay errors requiring followup). Additional Concerns for a Rebate Model A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 Benefis has never accessed 340B pricing through rebates, making the full scope of rebaterelated costs impossible to fully quantify. However, our experience with HRSAs withdrawn rebate pilot and with manufacturer datasubmission platforms such as 340B ESP and Beacon demonstrates the challenges we would face: Confusing and inconsistent vendor guidance Costly IT development and troubleshooting Ongoing staff time dedicated to resolving data errors and inconsistencies Delayed or denied access to 340B pricing despite compliance Increased burden across all hospital settingsnot just contract pharmacy We are especially concerned about rebate delays for physicianadministered drugs utilized in our oncology and infusion centers where many high-cost therapies are administered. Standard hospital billing processes do not allow for immediate submission and claims may not be available for weeks after administration, making timely rebate adjudication unrealistic and error prone. We have significant concerns related to how a rebate model would impact operationalizing our state Medicaid duplicatediscount prevention requirements. Medicaid mandates submission of Actual Acquisition Cost (AAC) on claims where a 340B drug is dispensed or administered and reimbursement is for AAC plus a small fee. Despite repeated requests, our state Medicaid program was unable to provide definitive guidance on the correct process for AAC submission prior to the tentative January 1, 2026, rebatepilot golive date. This lack of clarity created significant operational challenges across pharmacy, billing, and IT teams and illustrates the realworld difficulty of implementing complex, datadependent requirementsparticularly in a rural safetynet environment with a high percentage of Medicaid patients and limited administrative bandwidth. Benefis also risks receiving AAC based reimbursement on claims that may not be captured for or may be denied a 340B rebate. Operationalizing the application of rebate payments to outpatient cost centers where drug costs are incurred would also be complex and overly burdensome. Less Burdensome Alternatives Exist to Address Duplicate Discounts A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 We disagree with HRSA that rebates are necessary to improve program integrity or prevent duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs routine audits show minimal compliance issues, and manufacturers have not demonstrated systemic integrity problems in 340B. There are significantly less burdensome alternatives HRSA should adopt. The Department of Health & Human Services (HHS) should require state Medicaid agencies to implement processes similar to Oregon Medicaids approach, which prevents duplicate discounts by retrospectively collecting covered entity data and excluding 340B claims from rebate requests. A comparable federal process should be used to address MDPNP nonduplication. Manufacturers Commercial Interests Should Not Drive 340B Policy. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) both generate substantial profits from the current drug pricing and rebate system, and their commercial incentives should not shape federal 340B policy. Manufacturers seek covered entity claims data to avoid paying commercial rebates to PBMs under voluntary agreements that secure favorable formulary placementagreements that they have designed to protect or enhance manufacturer and PBM revenue streams, not to strengthen program integrity. This purpose is unrelated to 340B oversight, and safetynet providers (who will be harmed by the rebate model) should not be required to absorb the financial and administrative burden of supporting these commercial objectives. Requiring hospitals to share extensive claims data or to purchase drugs at non340B prices so manufacturers and PBMs can manage their commercial rebate arrangements is inappropriate and diverts resources away from patient care and the core purpose of the 340B program. We urge HRSA not to authorize another 340B rebate program that shifts costs onto safetynet providers to facilitate manufacturer and PBM commercial interests. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for any commercial purpose. CONCLUSION Benefis urges HRSA to reject a rebatebased model that would raise costs, create significant administrative burden, and undermine the resources we rely on to care for rural, lowincome, and medically underserved patients. The longstanding A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 upfront discount model remains the most effective and least burdensome approach, and no evidence supports replacing it. By increasing coveredentity costs and adding new administrative layers, the proposed model would run counter to national efforts to control and reduce healthcare spending. Shifting additional costs into hospitals ultimately increases the overall cost of care in an environment where the focus must be on improving affordability for patients and payers. We recognize the importance of maintaining a highintegrity 340B program and support targeted, practical solutions that address misuse and strengthen oversight. However, a largescale structural change such as the proposed rebate model would impose farreaching harm on safetynet providers while failing to address the specific issues it seeks to solve. Sweeping changes of this magnitude risk discarding what works in the name of fixing what has not been shown to be broken. We encourage HRSA to pursue focused, evidencebased approaches to duplicatediscount prevention that protect program integrity without jeopardizing the mission of the 340B program or the patients it was designed to support. Thank you again for the opportunity to provide comment and impact information on this critical issue. Please feel free to contact me at jamieleonard@benefis.org or (406) 455-5434 with any questions. Respectfully submitted, Jamie H. Leonard, PharmD Pharmacy Director, Business Strategy and 340B Benefis Health System April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: On behalf of Benefis Health System in Great Falls, Montana, we appreciate the opportunity to comment on HRSAs Request for Information regarding the proposed shift to backend rebates in place of upfront 340B discounts, and we thank HRSA for extending the comment deadline to ensure covered entities can fully assess and articulate the impact of this proposal. Introduction and SafetyNet Role of Benefis Health System Benefis Health System is a communitybased, nonprofit health system in Great Falls, Montana, with one DSH hospital and two Critical Access Hospitals participating in 340B. Benefis serves approximately 230,000 residents across a fourteencounty region in central Montana, much of it rural and medically underserved. As the regions primary safetynet provider, we care for a large share of Medicare, Medicaid, uninsured, and lowincome patients, reflecting the financial vulnerability of the communities we serve. Benefis provides a robust set of services as a regional health system in a rural frontier state, including Level II trauma and emergency care, comprehensive specialty services, cancer treatment, advanced chronicdisease management, and stateoftheart diagnostics. Over the past three years, Benefis has provided over $3040 million per year in community-benefit investments, encompassing charity care, patient assistance, education, and other programs that advance community health and support vulnerable populations. The ability to offer this level of highquality, compassionate, and accessible carewhile operating as a lean organization with strong financial stewardship and thin marginsis made possible in large part by the savings we receive through the 340B program. Benefis ability to sustain this level of care for our community and region depends on the stability and predictability of the longstanding upfront discount model. A Rebate Model Would Require Higher Upfront Costs, Create Significant Administrative and Operational Burdens, and Erode Resources for Patient Care Benefis strongly opposes any shift to a rebatebased model and urges HRSA to preserve the longstanding upfront discount model that has anchored the 340B program for three decades. A rebatebased approach would force hospitals like ours to purchase drugs at higher upfront prices, absorb substantial new administrative and operational burdens, and wait months for uncertain reimbursementdirectly reducing the resources available for patient care, community benefit programs, and the essential services our rural and frontier patients rely on. No Evidence Supports Replacing the Upfront Discount Model Manufacturers have not produced concrete, verifiable data demonstrating that duplicate discounts are occurring on a scale that would justify the extreme disruption to covered entities by replacing the longstanding upfront discount model. Independent analyses consistently note that the scope of duplicate discounts is unclear and have not identified systemic failures in the current framework. Available federal audits, state Medicaid guidance, and independent policy reviews describe theoretical risk but do not present empirical findings of widespread duplicate discounts or failures in existing prevention mechanisms. A Rebate Model Would Disrupt Established Reliance Interests Our 340B program - including inventory management, data integration with thirdparty vendors, systems and claims monitoring, compliance auditing, and the resources we allocate to patient care - has been built over years around upfront 340B discounts. Moving to a rebate model would disrupt wellestablished reliance interests grounded in decades of effective, consistent, compliant implementation of 340B to benefit our patients. Respectfully, HRSAs assumption that a rebate modeleven one designed with certain parameterswould have only a minimal impact on covered entities is incorrect. Since the August 1 Federal Register notice, covered entities have already been significantly impacted as we scramble with limited time and resources to interpret rapidly changing information and prepare operational infrastructure, budget projections, and anticipated impacts to programs and patient care. We are concerned this is only the beginning of significant disruption and increased costs and lost savings that weand our patient programsdepend upon. Operational and Financial Impacts to Benefis HRSAs proposed rebatebased approach will disrupt decades of business practices built around upfront discounts. Benefis would be significantly impacted by having to: Purchase drugs at significantly higher upfront prices while waiting for rebate payments effectively providing interestfree loans to manufacturers. We project this impact will exceed $5 million annually for the first twentyfive drugs alone, with costs increasing each year. Devote significant internal IT and operational resources to gather medical claims data with additional data elements not used in standard billing or TPA submissions. Incur incremental administrative and operational costs to work with multiple TPAs and data platforms to submit claims data, track rebate data, validate and audit rebate payments, and pursue payment for denied rebates through goodfaith inquiries or HRSAs Administrative Dispute Resolution process. Submit data to thirdparty vendors from locations that do not currently do so, including multiple clean sites where only 340B drugs are used. All incremental costs are difficult to project given the broad impact on internal staff across pharmacy operations, IT, accounting and finance, administrative leadership, and compliance, as well as external consultants/agency staff combined with incremental software and data platform costs. Estimated impact: at least $500,000 per year, based on: Administrative and operational time devoted to preparing for the proposed (paused) rebate pilot in 2025. Realized or quoted consultant/software/agency staff fee changes or new scopeofwork proposals. Operational time recently incurred to implement new data submissions in response to manufacturer notices blocking 340B pricing unless data is submitted through 340B ESP. Administrative and operational time we are now incurring to manage the MFP effectuation payment determinations and reconciliation - which involves similar laborintensive data management and operational tasks (has already resulted in significant confusion, rapidly changing requirements, and an unacceptably high rate of pay/nopay errors requiring followup). Additional Concerns for a Rebate Model Benefis has never accessed 340B pricing through rebates, making the full scope of rebaterelated costs impossible to fully quantify. However, our experience with HRSAs withdrawn rebate pilot and with manufacturer datasubmission platforms such as 340B ESP and Beacon demonstrates the challenges we would face: Confusing and inconsistent vendor guidance Costly IT development and troubleshooting Ongoing staff time dedicated to resolving data errors and inconsistencies Delayed or denied access to 340B pricing despite compliance Increased burden across all hospital settingsnot just contract pharmacy We are especially concerned about rebate delays for physicianadministered drugs utilized in our oncology and infusion centers where many high-cost therapies are administered. Standard hospital billing processes do not allow for immediate submission and claims may not be available for weeks after administration, making timely rebate adjudication unrealistic and error prone. We have significant concerns related to how a rebate model would impact operationalizing our state Medicaid duplicatediscount prevention requirements. Medicaid mandates submission of Actual Acquisition Cost (AAC) on claims where a 340B drug is dispensed or administered and reimbursement is for AAC plus a small fee. Despite repeated requests, our state Medicaid program was unable to provide definitive guidance on the correct process for AAC submission prior to the tentative January 1, 2026, rebatepilot golive date. This lack of clarity created significant operational challenges across pharmacy, billing, and IT teams and illustrates the realworld difficulty of implementing complex, datadependent requirementsparticularly in a rural safetynet environment with a high percentage of Medicaid patients and limited administrative bandwidth. Benefis also risks receiving AAC based reimbursement on claims that may not be captured for or may be denied a 340B rebate. Operationalizing the application of rebate payments to outpatient cost centers where drug costs are incurred would also be complex and overly burdensome. Less Burdensome Alternatives Exist to Address Duplicate Discounts We disagree with HRSA that rebates are necessary to improve program integrity or prevent duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs routine audits show minimal compliance issues, and manufacturers have not demonstrated systemic integrity problems in 340B. There are significantly less burdensome alternatives HRSA should adopt. The Department of Health & Human Services (HHS) should require state Medicaid agencies to implement processes similar to Oregon Medicaids approach, which prevents duplicate discounts by retrospectively collecting covered entity data and excluding 340B claims from rebate requests. A comparable federal process should be used to address MDPNP nonduplication. Manufacturers Commercial Interests Should Not Drive 340B Policy. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) both generate substantial profits from the current drug pricing and rebate system, and their commercial incentives should not shape federal 340B policy. Manufacturers seek covered entity claims data to avoid paying commercial rebates to PBMs under voluntary agreements that secure favorable formulary placementagreements that they have designed to protect or enhance manufacturer and PBM revenue streams, not to strengthen program integrity. This purpose is unrelated to 340B oversight, and safetynet providers (who will be harmed by the rebate model) should not be required to absorb the financial and administrative burden of supporting these commercial objectives. Requiring hospitals to share extensive claims data or to purchase drugs at non340B prices so manufacturers and PBMs can manage their commercial rebate arrangements is inappropriate and diverts resources away from patient care and the core purpose of the 340B program. We urge HRSA not to authorize another 340B rebate program that shifts costs onto safetynet providers to facilitate manufacturer and PBM commercial interests. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for any commercial purpose. CONCLUSION Benefis urges HRSA to reject a rebatebased model that would raise costs, create significant administrative burden, and undermine the resources we rely on to care for rural, lowincome, and medically underserved patients. The longstanding upfront discount model remains the most effective and least burdensome approach, and no evidence supports replacing it. By increasing coveredentity costs and adding new administrative layers, the proposed model would run counter to national efforts to control and reduce healthcare spending. Shifting additional costs into hospitals ultimately increases the overall cost of care in an environment where the focus must be on improving affordability for patients and payers. We recognize the importance of maintaining a highintegrity 340B program and support targeted, practical solutions that address misuse and strengthen oversight. However, a largescale structural change such as the proposed rebate model would impose farreaching harm on safetynet providers while failing to address the specific issues it seeks to solve. Sweeping changes of this magnitude risk discarding what works in the name of fixing what has not been shown to be broken. We encourage HRSA to pursue focused, evidencebased approaches to duplicatediscount prevention that protect program integrity without jeopardizing the mission of the 340B program or the patients it was designed to support. Thank you again for the opportunity to provide comment and impact information on this critical issue. Please feel free to contact me at jamieleonard@benefis.org or (406) 455-5434 with any questions. Respectfully submitted, Jamie H. Leonard, PharmD Pharmacy Director, Business Strategy and 340B Benefis Health System April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: On behalf of Benefis Health System in Great Falls, Montana, we appreciate the opportunity to comment on HRSAs Request for Information regarding the proposed shift to backend rebates in place of upfront 340B discounts, and we thank HRSA for extending the comment deadline to ensure covered entities can fully assess and articulate the impact of this proposal. Introduction and SafetyNet Role of Benefis Health System Benefis Health System is a communitybased, nonprofit health system in Great Falls, Montana, with one DSH hospital and two Critical Access Hospitals participating in 340B. Benefis serves approximately 230,000 residents across a fourteencounty region in central Montana, much of it rural and medically underserved. As the regions primary safetynet provider, we care for a large share of Medicare, Medicaid, uninsured, and lowincome patients, reflecting the financial vulnerability of the communities we serve. Benefis provides a robust set of services as a regional health system in a rural frontier state, including Level II trauma and emergency care, comprehensive specialty services, cancer treatment, advanced chronicdisease management, and stateoftheart diagnostics. Over the past three years, Benefis has provided over $3040 million per year in community-benefit investments, encompassing charity care, patient assistance, education, and other programs that advance community health and support vulnerable populations. The ability to offer this level of highquality, compassionate, and accessible carewhile operating as a lean organization with strong financial stewardship and thin marginsis made possible in large part by the savings we receive through the 340B program. Benefis ability to sustain this level of care for our community and region depends on the stability and predictability of the longstanding upfront discount model. A Rebate Model Would Require Higher Upfront Costs, Create Significant Administrative and Operational Burdens, and Erode Resources for Patient Care Benefis strongly opposes any shift to a rebatebased model and urges HRSA to preserve the longstanding upfront discount model that has anchored the 340B program for three decades. A rebatebased approach would force hospitals like ours to purchase drugs at higher upfront prices, absorb substantial new administrative and operational burdens, and wait months for uncertain reimbursementdirectly reducing the resources available for patient care, community benefit programs, and the essential services our rural and frontier patients rely on. No Evidence Supports Replacing the Upfront Discount Model Manufacturers have not produced concrete, verifiable data demonstrating that duplicate discounts are occurring on a scale that would justify the extreme disruption to covered entities by replacing the longstanding upfront discount model. Independent analyses consistently note that the scope of duplicate discounts is unclear and have not identified systemic failures in the current framework. Available federal audits, state Medicaid guidance, and independent policy reviews describe theoretical risk but do not present empirical findings of widespread duplicate discounts or failures in existing prevention mechanisms. A Rebate Model Would Disrupt Established Reliance Interests Our 340B program - including inventory management, data integration with thirdparty vendors, systems and claims monitoring, compliance auditing, and the resources we allocate to patient care - has been built over years around upfront 340B discounts. Moving to a rebate model would disrupt wellestablished reliance interests grounded in decades of effective, consistent, compliant implementation of 340B to benefit our patients. Respectfully, HRSAs assumption that a rebate modeleven one designed with certain parameterswould have only a minimal impact on covered entities is incorrect. Since the August 1 Federal Register notice, covered entities have already been significantly impacted as we scramble with limited time and resources to interpret rapidly changing information and prepare operational infrastructure, budget projections, and anticipated impacts to programs and patient care. We are concerned this is only the beginning of significant disruption and increased costs and lost savings that weand our patient programsdepend upon. Operational and Financial Impacts to Benefis HRSAs proposed rebatebased approach will disrupt decades of business practices built around upfront discounts. Benefis would be significantly impacted by having to: Purchase drugs at significantly higher upfront prices while waiting for rebate payments effectively providing interestfree loans to manufacturers. We project this impact will exceed $5 million annually for the first twentyfive drugs alone, with costs increasing each year. Devote significant internal IT and operational resources to gather medical claims data with additional data elements not used in standard billing or TPA submissions. Incur incremental administrative and operational costs to work with multiple TPAs and data platforms to submit claims data, track rebate data, validate and audit rebate payments, and pursue payment for denied rebates through goodfaith inquiries or HRSAs Administrative Dispute Resolution process. Submit data to thirdparty vendors from locations that do not currently do so, including multiple clean sites where only 340B drugs are used. All incremental costs are difficult to project given the broad impact on internal staff across pharmacy operations, IT, accounting and finance, administrative leadership, and compliance, as well as external consultants/agency staff combined with incremental software and data platform costs. Estimated impact: at least $500,000 per year, based on: Administrative and operational time devoted to preparing for the proposed (paused) rebate pilot in 2025. Realized or quoted consultant/software/agency staff fee changes or new scopeofwork proposals. Operational time recently incurred to implement new data submissions in response to manufacturer notices blocking 340B pricing unless data is submitted through 340B ESP. Administrative and operational time we are now incurring to manage the MFP effectuation payment determinations and reconciliation - which involves similar laborintensive data management and operational tasks (has already resulted in significant confusion, rapidly changing requirements, and an unacceptably high rate of pay/nopay errors requiring followup). Additional Concerns for a Rebate Model Benefis has never accessed 340B pricing through rebates, making the full scope of rebaterelated costs impossible to fully quantify. However, our experience with HRSAs withdrawn rebate pilot and with manufacturer datasubmission platforms such as 340B ESP and Beacon demonstrates the challenges we would face: Confusing and inconsistent vendor guidance Costly IT development and troubleshooting Ongoing staff time dedicated to resolving data errors and inconsistencies Delayed or denied access to 340B pricing despite compliance Increased burden across all hospital settingsnot just contract pharmacy We are especially concerned about rebate delays for physicianadministered drugs utilized in our oncology and infusion centers where many high-cost therapies are administered. Standard hospital billing processes do not allow for immediate submission and claims may not be available for weeks after administration, making timely rebate adjudication unrealistic and error prone. We have significant concerns related to how a rebate model would impact operationalizing our state Medicaid duplicatediscount prevention requirements. Medicaid mandates submission of Actual Acquisition Cost (AAC) on claims where a 340B drug is dispensed or administered and reimbursement is for AAC plus a small fee. Despite repeated requests, our state Medicaid program was unable to provide definitive guidance on the correct process for AAC submission prior to the tentative January 1, 2026, rebatepilot golive date. This lack of clarity created significant operational challenges across pharmacy, billing, and IT teams and illustrates the realworld difficulty of implementing complex, datadependent requirementsparticularly in a rural safetynet environment with a high percentage of Medicaid patients and limited administrative bandwidth. Benefis also risks receiving AAC based reimbursement on claims that may not be captured for or may be denied a 340B rebate. Operationalizing the application of rebate payments to outpatient cost centers where drug costs are incurred would also be complex and overly burdensome. Less Burdensome Alternatives Exist to Address Duplicate Discounts We disagree with HRSA that rebates are necessary to improve program integrity or prevent duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs routine audits show minimal compliance issues, and manufacturers have not demonstrated systemic integrity problems in 340B. There are significantly less burdensome alternatives HRSA should adopt. The Department of Health & Human Services (HHS) should require state Medicaid agencies to implement processes similar to Oregon Medicaids approach, which prevents duplicate discounts by retrospectively collecting covered entity data and excluding 340B claims from rebate requests. A comparable federal process should be used to address MDPNP nonduplication. Manufacturers Commercial Interests Should Not Drive 340B Policy. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) both generate substantial profits from the current drug pricing and rebate system, and their commercial incentives should not shape federal 340B policy. Manufacturers seek covered entity claims data to avoid paying commercial rebates to PBMs under voluntary agreements that secure favorable formulary placementagreements that they have designed to protect or enhance manufacturer and PBM revenue streams, not to strengthen program integrity. This purpose is unrelated to 340B oversight, and safetynet providers (who will be harmed by the rebate model) should not be required to absorb the financial and administrative burden of supporting these commercial objectives. Requiring hospitals to share extensive claims data or to purchase drugs at non340B prices so manufacturers and PBMs can manage their commercial rebate arrangements is inappropriate and diverts resources away from patient care and the core purpose of the 340B program. We urge HRSA not to authorize another 340B rebate program that shifts costs onto safetynet providers to facilitate manufacturer and PBM commercial interests. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for any commercial purpose. CONCLUSION Benefis urges HRSA to reject a rebatebased model that would raise costs, create significant administrative burden, and undermine the resources we rely on to care for rural, lowincome, and medically underserved patients. The longstanding upfront discount model remains the most effective and least burdensome approach, and no evidence supports replacing it. By increasing coveredentity costs and adding new administrative layers, the proposed model would run counter to national efforts to control and reduce healthcare spending. Shifting additional costs into hospitals ultimately increases the overall cost of care in an environment where the focus must be on improving affordability for patients and payers. We recognize the importance of maintaining a highintegrity 340B program and support targeted, practical solutions that address misuse and strengthen oversight. However, a largescale structural change such as the proposed rebate model would impose farreaching harm on safetynet providers while failing to address the specific issues it seeks to solve. Sweeping changes of this magnitude risk discarding what works in the name of fixing what has not been shown to be broken. We encourage HRSA to pursue focused, evidencebased approaches to duplicatediscount prevention that protect program integrity without jeopardizing the mission of the 340B program or the patients it was designed to support. Thank you again for the opportunity to provide comment and impact information on this critical issue. Please feel free to contact me at jamieleonard@benefis.org or (406) 455-5434 with any questions. Respectfully submitted, Jamie H. Leonard, PharmD Pharmacy Director, Business Strategy and 340B Benefis Health System A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: On behalf of Benefis Health System in Great Falls, Montana, we appreciate the opportunity to comment on HRSAs Request for Information regarding the proposed shift to backend rebates in place of upfront 340B discounts, and we thank HRSA for extending the comment deadline to ensure covered entities can fully assess and articulate the impact of this proposal. Introduction and SafetyNet Role of Benefis Health System Benefis Health System is a communitybased, nonprofit health system in Great Falls, Montana, with one DSH hospital and two Critical Access Hospitals participating in 340B. Benefis serves approximately 230,000 residents across a fourteencounty region in central Montana, much of it rural and medically underserved. As the regions primary safetynet provider, we care for a large share of Medicare, Medicaid, uninsured, and lowincome patients, reflecting the financial vulnerability of the communities we serve. Benefis provides a robust set of services as a regional health system in a rural frontier state, including Level II trauma and emergency care, comprehensive specialty services, cancer treatment, advanced chronicdisease management, and stateoftheart diagnostics. Over the past three years, Benefis has provided over $3040 million per year in community-benefit investments, encompassing charity care, patient assistance, education, and other programs that advance community health and support vulnerable populations. The ability to offer this level of highquality, compassionate, and accessible carewhile operating as a lean organization with strong financial stewardship and thin marginsis made possible in large part by the savings we receive through the 340B program. Benefis ability to sustain this level of care for our community and region depends on the stability and predictability of the longstanding upfront discount model. A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 A Rebate Model Would Require Higher Upfront Costs, Create Significant Administrative and Operational Burdens, and Erode Resources for Patient Care Benefis strongly opposes any shift to a rebatebased model and urges HRSA to preserve the longstanding upfront discount model that has anchored the 340B program for three decades. A rebatebased approach would force hospitals like ours to purchase drugs at higher upfront prices, absorb substantial new administrative and operational burdens, and wait months for uncertain reimbursementdirectly reducing the resources available for patient care, community benefit programs, and the essential services our rural and frontier patients rely on. No Evidence Supports Replacing the Upfront Discount Model Manufacturers have not produced concrete, verifiable data demonstrating that duplicate discounts are occurring on a scale that would justify the extreme disruption to covered entities by replacing the longstanding upfront discount model. Independent analyses consistently note that the scope of duplicate discounts is unclear and have not identified systemic failures in the current framework. Available federal audits, state Medicaid guidance, and independent policy reviews describe theoretical risk but do not present empirical findings of widespread duplicate discounts or failures in existing prevention mechanisms. A Rebate Model Would Disrupt Established Reliance Interests Our 340B program - including inventory management, data integration with thirdparty vendors, systems and claims monitoring, compliance auditing, and the resources we allocate to patient care - has been built over years around upfront 340B discounts. Moving to a rebate model would disrupt wellestablished reliance interests grounded in decades of effective, consistent, compliant implementation of 340B to benefit our patients. Respectfully, HRSAs assumption that a rebate modeleven one designed with certain parameterswould have only a minimal impact on covered entities is incorrect. Since the August 1 Federal Register notice, covered entities have already been significantly impacted as we scramble with limited time and resources to interpret rapidly changing information and prepare operational infrastructure, budget projections, and anticipated impacts to programs and patient care. We are concerned this is only the beginning of significant disruption and increased costs and lost savings that weand our patient programsdepend upon. Operational and Financial Impacts to Benefis A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 HRSAs proposed rebatebased approach will disrupt decades of business practices built around upfront discounts. Benefis would be significantly impacted by having to: Purchase drugs at significantly higher upfront prices while waiting for rebate payments effectively providing interestfree loans to manufacturers. We project this impact will exceed $5 million annually for the first twentyfive drugs alone, with costs increasing each year. Devote significant internal IT and operational resources to gather medical claims data with additional data elements not used in standard billing or TPA submissions. Incur incremental administrative and operational costs to work with multiple TPAs and data platforms to submit claims data, track rebate data, validate and audit rebate payments, and pursue payment for denied rebates through goodfaith inquiries or HRSAs Administrative Dispute Resolution process. Submit data to thirdparty vendors from locations that do not currently do so, including multiple clean sites where only 340B drugs are used. All incremental costs are difficult to project given the broad impact on internal staff across pharmacy operations, IT, accounting and finance, administrative leadership, and compliance, as well as external consultants/agency staff combined with incremental software and data platform costs. Estimated impact: at least $500,000 per year, based on: Administrative and operational time devoted to preparing for the proposed (paused) rebate pilot in 2025. Realized or quoted consultant/software/agency staff fee changes or new scopeofwork proposals. Operational time recently incurred to implement new data submissions in response to manufacturer notices blocking 340B pricing unless data is submitted through 340B ESP. Administrative and operational time we are now incurring to manage the MFP effectuation payment determinations and reconciliation - which involves similar laborintensive data management and operational tasks (has already resulted in significant confusion, rapidly changing requirements, and an unacceptably high rate of pay/nopay errors requiring followup). Additional Concerns for a Rebate Model A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 Benefis has never accessed 340B pricing through rebates, making the full scope of rebaterelated costs impossible to fully quantify. However, our experience with HRSAs withdrawn rebate pilot and with manufacturer datasubmission platforms such as 340B ESP and Beacon demonstrates the challenges we would face: Confusing and inconsistent vendor guidance Costly IT development and troubleshooting Ongoing staff time dedicated to resolving data errors and inconsistencies Delayed or denied access to 340B pricing despite compliance Increased burden across all hospital settingsnot just contract pharmacy We are especially concerned about rebate delays for physicianadministered drugs utilized in our oncology and infusion centers where many high-cost therapies are administered. Standard hospital billing processes do not allow for immediate submission and claims may not be available for weeks after administration, making timely rebate adjudication unrealistic and error prone. We have significant concerns related to how a rebate model would impact operationalizing our state Medicaid duplicatediscount prevention requirements. Medicaid mandates submission of Actual Acquisition Cost (AAC) on claims where a 340B drug is dispensed or administered and reimbursement is for AAC plus a small fee. Despite repeated requests, our state Medicaid program was unable to provide definitive guidance on the correct process for AAC submission prior to the tentative January 1, 2026, rebatepilot golive date. This lack of clarity created significant operational challenges across pharmacy, billing, and IT teams and illustrates the realworld difficulty of implementing complex, datadependent requirementsparticularly in a rural safetynet environment with a high percentage of Medicaid patients and limited administrative bandwidth. Benefis also risks receiving AAC based reimbursement on claims that may not be captured for or may be denied a 340B rebate. Operationalizing the application of rebate payments to outpatient cost centers where drug costs are incurred would also be complex and overly burdensome. Less Burdensome Alternatives Exist to Address Duplicate Discounts A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 We disagree with HRSA that rebates are necessary to improve program integrity or prevent duplicate discounts under the Medicare Drug Price Negotiation Program (MDPNP). HRSAs routine audits show minimal compliance issues, and manufacturers have not demonstrated systemic integrity problems in 340B. There are significantly less burdensome alternatives HRSA should adopt. The Department of Health & Human Services (HHS) should require state Medicaid agencies to implement processes similar to Oregon Medicaids approach, which prevents duplicate discounts by retrospectively collecting covered entity data and excluding 340B claims from rebate requests. A comparable federal process should be used to address MDPNP nonduplication. Manufacturers Commercial Interests Should Not Drive 340B Policy. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) both generate substantial profits from the current drug pricing and rebate system, and their commercial incentives should not shape federal 340B policy. Manufacturers seek covered entity claims data to avoid paying commercial rebates to PBMs under voluntary agreements that secure favorable formulary placementagreements that they have designed to protect or enhance manufacturer and PBM revenue streams, not to strengthen program integrity. This purpose is unrelated to 340B oversight, and safetynet providers (who will be harmed by the rebate model) should not be required to absorb the financial and administrative burden of supporting these commercial objectives. Requiring hospitals to share extensive claims data or to purchase drugs at non340B prices so manufacturers and PBMs can manage their commercial rebate arrangements is inappropriate and diverts resources away from patient care and the core purpose of the 340B program. We urge HRSA not to authorize another 340B rebate program that shifts costs onto safetynet providers to facilitate manufacturer and PBM commercial interests. At a minimum, manufacturers should be prohibited from using covered entities rebate claims data for any commercial purpose. CONCLUSION Benefis urges HRSA to reject a rebatebased model that would raise costs, create significant administrative burden, and undermine the resources we rely on to care for rural, lowincome, and medically underserved patients. The longstanding A SUBSIDIARY OF BENEFIS HEALTH SYSTEM EAST 1101 26thStreet South, Great Falls, MT 59405 I WEST 500 15th Avenue South, Great Falls, MT 59405 I www.benefis.org I 406.455.5000 upfront discount model remains the most effective and least burdensome approach, and no evidence supports replacing it. By increasing coveredentity costs and adding new administrative layers, the proposed model would run counter to national efforts to control and reduce healthcare spending. Shifting additional costs into hospitals ultimately increases the overall cost of care in an environment where the focus must be on improving affordability for patients and payers. We recognize the importance of maintaining a highintegrity 340B program and support targeted, practical solutions that address misuse and strengthen oversight. However, a largescale structural change such as the proposed rebate model would impose farreaching harm on safetynet providers while failing to address the specific issues it seeks to solve. Sweeping changes of this magnitude risk discarding what works in the name of fixing what has not been shown to be broken. We encourage HRSA to pursue focused, evidencebased approaches to duplicatediscount prevention that protect program integrity without jeopardizing the mission of the 340B program or the patients it was designed to support. Thank you again for the opportunity to provide comment and impact information on this critical issue. Please feel free to contact me at jamieleonard@benefis.org or (406) 455-5434 with any questions. Respectfully submitted, Jamie H. Leonard, PharmD Pharmacy Director, Business Strategy and 340B Benefis Health System
HRSA-2026-0001-2345Community Health Centers, Inc.2026-04-20T04:00Z39,472 chars
See attached file(s) Our mission is to provide quality and compassionate primary healthcare services to Central Florida's diverse communities. 407-905-8827 | 352-314-7400 | WWW.CHCFL.ORG | 110 S WOODLAND ST, WINTER GARDEN, FL 34787 April 20, 2026 Chantelle Briton, Director Office of Pharmacy Affairs Health Resources and Services Administraon 5600 Fishers Lane Rockville, MD 20857 RE: Request for Informaon: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Briton, I am wring this leter as the Chief Execuve Officer of an FQHC with 340B pharmacies, both contract pharmacies and in-house. The 340B program is foundaonal to CHCs ability to serve the most vulnerable members of our community. However, the proposed shi of responsibility from manufacturers to safety-net providers directly serving paents through a rebate model threatens to destabilize CHC pharmacy operaons naonwide. At our FQHC, we serve over 66,000 paents each year with 70% of our paents presenng as uninsured or using Medicaid benefits. The 340B program is vital to our organizaon, providing over 364,000 340B-eligible prescripons to our paents at affordable prices to promote posive paent outcomes in our communies. Our organizaon reinvests 100% of 340B savings generated through the program into paent services, including behavioral health, medicaon therapy management, chronic disease management and educaon, affordable medicaons, and other health iniaves that benefit our paents served. I. We strongly urge HRSA to exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpaent medicaons at significantly reduced prices, enabling them to provide affordable medicaons to millions of low-income and uninsured paents. As congressional intent made clear, the program was created to help safety- net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 2 of 13 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For our organization, this means it will impact: Over 66,000 patients served and 364,000 prescriptions dispensed to 340B-eligible patients annually Over $5M in current admin costs for the 340B program annually Patient care services offered including primary and preventive health care services, family medicine, dental, OB/GYN, behavioral health, optometry, lab, case management, medication therapy management, affordable medications, and more. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. I. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. Most drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 3 of 13 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is facing an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. II. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 4 of 13 NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Like navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Our organization provided over $12M in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Our organization anticipates needing 1.25 additional FTEs (with salary and benefits, nearly $200,000 annually), to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 5 of 13 option for many entities. For our organization, we anticipate annual costs exceeding $15 million for the above-mentioned costs. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Our organization urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. The Contract Pharmacy: The Burden of Network Coordination For Community Health Centers, Inc. (CHC) contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. Our CHC currently partners with 65 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 6 of 13 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: Most clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 7 of 13 limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Upfront 340B pricing allows our organization to provide patients with affordable, flat discounts on prescription drugs at the point-of-sale. A rebate model will make it incredibly challenging to proactively price medications affordably for our patients served. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 8 of 13 enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 9 of 13 WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $6 million to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $650,000 to purchase these same drugs at the 340B ceiling price. This represents a significant increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, our CHC anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our medication therapy management (MTM) program for complex diabetic patients and other patient education programs. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 13,000 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Our CHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 10 of 13 typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, our CHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $2 million. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Our CHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $570,000 in 2026 and $1.1 million in 2027. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution and forces CHCs to redirect funds away from key health programs offered to patients and communities in need. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on our CHC, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Our CHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a significant net annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 11 of 13 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state- level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. III. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 12 of 13 IV. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. V. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864 Page 13 of 13 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Our CHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs will need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up- front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Our CHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Our CHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Debra Andree, M.D., BSN, FAAP President and Chief Executive Office Docusign Envelope ID: 43156360-3F63-8730-80C2-3DC75976E864
HRSA-2026-0001-2346Common Spirit Dignity Health St. John's Regional Medical Center2026-04-20T04:00Z7,139 chars
See attached file(s) St. Johns Regional Medical Center 1600 North Rose Avenue Oxnard, CA 93030 805.988.2500 DignityHealth.org/StJohnsRegional St. Johns Hospital Camarillo 2309 Antonio Avenue Camarillo, CA 93010 805.389.5800 DignityHealth.org/StJohnsCamarilloHospital April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Johns Regional Medical Center and St. Johns Hospital Camarillo, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Johns Regional Medical Center and St. Johns Hospital Camarillo that far outweighs any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Johns Regional Medical Center and St. Johns Hospital Camarillo relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. Based on a review of our hospital specific information the 340B program has created a total cost avoidance impact of $24.7 million. Generating this type of savings is critical to providing key services to our local community., This includes funding capital investments, such as replacing cath lab equipment to provide up-to-date technology, and developing an outpatient infusion center in Ventura to offer much needed chemotherapy and other critical infusion services. This funding also supports our hospitals current capability to provide key community services including a fully capable Womens Services Center that delivers some of the most critical babies with the support of a level III NICU. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments Now to each one the manifestation of the Spirit is given for the common good. and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Douglas Kleam, President & CEO St. Johns Regional Medical Center & St. Johns Hospital Camarillo Located at 1600 N. Rose Avenue, Oxnard, CA 93030 & 2309 Antonio Ave., Camarillo, CA 93010 Now to each one the manifestation of the Spirit is given for the common good. As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org.
HRSA-2026-0001-2347Sonoma Valley Community Health Center2026-04-20T04:00Z47,785 chars
See attached file(s) SVCHC April 16, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Sonoma Valley Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Sonoma Valley Community Health Center anticipates a loss of $300,000 or 2,216% increase from entity-owned pharmacy operations for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o RuraI Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Sonoma Valley Community Health Center (SVCHC) is a federally qualified health center serving the Sonoma Valley and surrounding rural communities. SVCHC provides comprehensive primary care, behavioral health, and pharmacy services to low-income, uninsured, underinsured, agricultural, and Medi-Ca1 patients regardless of ability to pay. A majority of SVCHC patients live at or below 200% of the Federal Poverty Level, and many face geographic, linguistic, and financial barriers to accessing care. The 340B Drug Pricing Program is a critical component of SVCHC's ability to sustain pharmacy services, offer sliding-fee discounts, and reinvest savings into patient-centered programs that address chronic disease management, rural access, and health equity. 19270 Sonoma Highway Sonoma, CA 95476 I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Sonoma Valley Community Health Center in particular, this means it will impact: Approximately 12,000-15,000 340B-eligible prescriptions annually, serving approximately 6,500 patients a year, the majority of whom rely on discounted medications to manage chronic conditions such as diabetes, hypertension, asthma, and behavioral health disorders. SVCHC currently operates its 340B program with lean administrative staffing and limited IT resources, with estimated annual administrative and compliance costs of approximately $120,000-$150,000, including pharmacy oversight, auditing, reporting, and third-party administration fees. SVCHC reinvests 340B savings directly into patient care, including sliding-fee medication discounts, staffing, chronic disease management programs, behavioral health integration, mobile outreach to rural patients, and extended pharmacy access for uninsured and Medi-Cal patients. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients rnay be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The rnajority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage 2 chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.' Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure, Circulation. IAILls://www.ahaiournals.ort2/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. htips://www.samhsa. )lov/data/data-we-collect/nsduh -n ati on al - surve,, drug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 3 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate rnodel on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a fmancial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple, manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Sirnilar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the fmancial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Sonoma Valley Conununity Health Center provided $1.2 million in sliding fee discounts, provided through discounted medications and medical services. We 4 anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Sonoma Valley Community Health Center anticipates needing 1.0 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Sonoma Valley Community Health Center anticipates an increase of $75,000-$125,000 annually to costs for external support vendors. These vendors rnay include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' SVCHC anticipates an estimated annual cost to hire and support additional administrative staff ranges from $90,000 to $150,000, excluding IT and vendor costs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. SVCHC estimates an addition 12- 15 hours per week. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. SVCHC estimates an additional 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Sonoma Valley Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and fmancial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Party Administration Changes Navigating this pilot requires rnore than just staff it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. We estimate approximately $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 6,500 patients, the total projected increase in expensesincluding labor, IT, and carrying costs-is estimated at $65,000 annually. The In-House Pharmacv: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-15 hours per week manually pulling "Purchase Files" and "Price Files" to verify that every rebate check matches the statutory 340B price. The Contract Pharmacv: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Sonoma Valley, CA with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.'9 Clinic Administered Drugs: The Burden of New Systems Reguired Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these 9 Vulnerability Index A roach to Identif Pharmacy Deserts and Keystone Pharmacies t Pharmacy and Clinical Pharmacolo2y1 JAMA Network Open I JAMA Network 10 httos://www.healthaffairs.ore/doi/abs/10.1377/hlthaff.2024.00192?journalCode=h1thaff 6 costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the 11 Internal NACHC survey data 7 wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. We make prescription drugs affordable by using our 340B savings to offer at-the-counter reduced prices including flat copays, sliding-scale discounts, and in some cases no-cost medicationsso that patients with low incomes can fill needed prescriptions without delaying or foregoing treatment due to cost. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. httos://bphc.hrsa.gov/compliance/comoliance- manual/chapter9#footnotelO 14httns://enlivenhealth.co/bloch ear-end-business-health-check-kev-metrics-everv-phannacv-owner-should-review 8 match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC - 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organization's data, we estimate it would cost $185,466 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $8,007 to purchase these same drugs at the 340B ceiling price. This represents a 2,216% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 htt ps://www.crn s.gov/fil es/zi p/selected-dru i st-ne2otiated-prices-al so-known-m axial urn-fair-I Ti ces-statutezi p.zi p 9 This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Sonorna Valley Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as case management for our most vulnerable populations. Workforce & Staffmg: The administrative burden of this pilot requires us to divert funds away frorn clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund one full time care coordinator/case rnanager, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be comprornised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payrnents are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Sonoma Valley Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a tirne when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Sonoma Valley Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be 10 approximately $350,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Sonoma Valley Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $314,000. Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to cut back on healthcare providers. In our region, where patients have no choice but to rely on Sonoma Valley Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Sonoma Valley Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) lAp s://www.federalregi sten gov/docurnents/2025/08/01/2025-14619/340b-nrograrn-notice-anplication-nrocess-for-the-340b- rebate-model-ni lot-program 11 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. 12 Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, California's Departrnent of Health Care Services (DHCS) issued guidance for California's Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is 13 complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfrontbut California's multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCS's six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like California's will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. Conclusion Sonoma Valley Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B 14 Sincerely, Sara Brewer discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Sonoma Valley Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Sonoma Valley Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at sbrewer(aisychc.org. Sonoma Valley Community Health Center 15
HRSA-2026-0001-2348National Pharmaceutical Council2026-04-20T04:00Z42,921 chars
Dear Ms. Britton, The National Pharmaceutical Council (NPC) thanks you and the Health Resources and Services Administration (HRSA) for the opportunity to provide research-focused insights on the Request for Information: 340B Rebate Model Pilot Program. NPC serves patients and society with policy-relevant research on the value of patient access to innovative medicines and the importance of scientific advancement. NPCs extensive research on the 340B Drug Pricing Program has informed our response to the Request for Information (RFI) below. NPC applauds HRSA and the Department of Health and Human Services (HHS) for their leadership in seeking information on the standards and procedures by which HRSA should consider implementation of a rebate model under the 340B Program. April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs (OPA) Office of Special Health Initiatives Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane, Mail Stop 10W29, Rockville, MD 20857 HHS Docket No. HRSA2026-03042 Submitted Electronically via: regulations.gov RE: Request for Information, 340B Rebate Model Pilot Program Dear Ms. Britton, The National Pharmaceutical Council (NPC) thanks you and the Health Resources and Services Administration (HRSA) for the opportunity to provide research-focused insights on the Request for Information: 340B Rebate Model Pilot Program. NPC serves patients and society with policy-relevant research on the value of patient access to innovative medicines and the importance of scientific advancement.1 NPCs extensive research on the 340B Drug Pricing Program has informed our response to the Request for Information (RFI) below. NPC applauds HRSA and the Department of Health and Human Services (HHS) for their leadership in seeking information on the standards and procedures by which HRSA should consider implementation of a rebate model under the 340B Program. Our comments are particularly addressed to targeted areas 1 (Costs to Covered Entities) and 7 (340B Program Integrity and Other Potential Benefits of a Rebate Pilot) in the RFI.2 In December 2025, IQVIA published modeling results that suggested cash flow for covered entities would be at least as favorable under a rebate model as under current approaches that are not based on rebates.3 An April 2026 update of this research using alternative assumptions and January 2026 list prices for the ten drugs subject to 1 National Pharmaceutical Council. About NPC. Accessed March 26, 2026. https://www.npcnow.org/about. 2 340B Program Notice: Request for Information: 340B Rebate Model Pilot Program. Docket No. HRSA2026-03042. Health Resources and Human Services Administration. Published February 17, 2026. Accessed March 26, 2026. Available at: https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate-model-pilot-program. 3 Sun C, Zeng S, Sarraille W, Martin R. How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? IQVIA White Paper. Released December 2, 2026. Accessed March 26, 2026. Available at: https://www.iqvia.com/locations/united-states/library/white-papers/how- will-a-rebate-model-impact-cash-flow-in-the-340b-drug-pricing-program. 2 Maximum Fair Prices (MFPs) again found that a rebate model would not impose significant costs on covered entities.4 This evidence contradicts covered entities claims that they would incur a significant financial burden due to the implementation of a manufacturer rebate model under a HRSA Pilot Program.5 We believe that a rebate model will improve the 340B programs integrity and transparency and address the specific problem of duplicate discounts for the drugs to which it applies. SUMMARY OF RECOMMENDATIONS Primary Recommendations: NPC strongly supports HRSAs implementation of a 340B Rebate Model Pilot Program as a very effective way to prevent duplicate discounts on drugs. A 340B Rebate Model will improve program integrity and transparency. IQVIA research supports that a rebate program can be implemented without limiting patient access to Covered Outpatient Drugs in any way. To efficiently address both duplicate discounts between 340B discounts and MFPs under the Medicare Drug Price Negotiation Program (DPNP) and duplicate discounts between 340B discounts and Medicaid rebates, NPC further recommends that the Pilot Program rapidly expand to apply to all Covered Outpatient Drugs, as defined in Section 1927(k) of the Social Security Act. We urge HRSA to consider the broader benefits of the rebate model and their applicability to additional circumstances as soon as possible following launch to allow for prompt expansion of the pilot. Secondary Recommendations: We also recommend that HRSA consider the following to enhance a Pilot Program. However, these suggestions should not slow down implementation of the Pilot Program. NPC recommends that the evaluation of the proposed Pilot Program focus on program integrity and patient impacts. o NPC recommends that HRSA announce a 340B rebate model with a clear evaluation plan. o NPC recommends that evaluation of the 340B rebate model be independent of HRSA to promote greater efficiency; however, we recommend that vendors, such as Apexus, should not be evaluators of the pilot given conflicts of interest. o NPC recommends that HRSA continue the Rebate Model Pilot Program while the evaluation is conducted. NPC recommends that HRSA include all payers in a 340B rebate model. 4 Martin R, Sun C, Sarraille WA. Do 340B Rebates Create a Significant Financial Burden for 340B Providers? IQVIA White Paper. Released April 17, 2026. Accessed April 20, 2026. Available at: https://www.iqvia.com/locations/united-states/library/white-papers/do-340b-rebates-create-a- significant-financial-burden-for-340b-providers. 5 Ibid., p. 4. 3 I. Program integrity has been a problem in the 340B Program Program integrity has been a longstanding problem in the 340B Program.6 The rapid growth and increasing complexity of the 340B program have outpaced existing oversight, allowing duplicate discounts, diversion, and other compliance issues to persist. In 2019, when the program was less than half its current size, Medicaid/340B duplicate discounts were estimated at up to $1.6 billion annually.7 This figure, along with longstanding Government Accountability Office (GAO)8 and Office of Inspector General (OIG)9 findings that remain largely unaddressed, highlights a significant and ongoing program integrity concern. In 2025, for example, the GAO reported that HRSA had implemented only five of the twenty recommendations GAO issued in 2011, 2018, 2019, and 2020.8 The recommendations that had not been implemented included issuance of guidance to covered entities to prevent duplicate discounts with Medicaid Managed Care. The complex structure of the 340B Program adds to its program integrity challenges. In 2010, the Patient Protection and Affordability Act expanded the types of eligible covered entities to include critical access hospitals, sole community hospitals, rural referral centers, free-standing childrens hospitals, and free-standing cancer hospitals.10 Since 2010, the number of disproportionate share hospitals (DSHs) has also significantly increased. In 2010, HRSA also issued a notice to covered entities permitting covered entities to use multiple pharmacy arrangements as long as they comply with guidance developed to help ensure against diversion and duplicate discounts and the policies set forth regarding patient definition.11 Since enactment of this policy, the number of contract pharmacies in the US has increased from 1,300 unique contract pharmacy locations in 2010 to 31,900 unique contract pharmacy locations in 2022 comprising half of the US pharmacy industry.12 However, as evidenced by the OIG and GAO reports on the 340B Program after enactment of this policy,8,13,14 diversion persists. These reports signal that the current status quo of program oversight is not sufficient to ensure that duplicative discounts a present issue do not persist. Over the years, HRSA has continued to remain committed to protecting the integrity of the 340B Program. In fact, Administrator Wakefield issued a 2012 memo to 340B Program participants stating, 6 OBrien J. After 30 years of 340B, its time for data and an honest conversation. STAT News. 26 October 2022. Available at: https://www.statnews.com/2022/10/26/after-30-years-of-340b-time-for-data-honest-conversation/ 7 Kalderos, Making Health Policy Work for Patients. 2021 Annual Report. Accessed April 7, 2026. Available at: https://f.hubspotusercontent40.net/hubfs/7227094/2021%20Annual%20Report/Annual_report_2021.pdf 8 Government Accountability Office. 340B Drug Discount Program: Agency Oversight Has Improved, but Actions Needed to Address Weaknesses. Released October 23, 2025. Accessed March 31, 2026. Available at: https://www.gao.gov/assets/gao-26-108784.pdf. 9 Department of Health and Human Services, Office of Inspector General. Memorandum Report: Contract Pharmacy Arrangements in the 340B Program, OEI-05-13-00431. Published February 4, 2014. Accessed March 26, 2026. Available at: https://oig.hhs.gov/documents/evaluation/2914/OEI-05-13-00431-Complete%20Report.pdf 10 Barlas S. Health Care Reform Bill Expands Access to Section 340B Discounted Drugs for Hospitals. P T. 2010 Nov;35(11):632-4. PMID: 21139820; PMCID: PMC2993068. 11 Notice Regarding 340B Drug Pricing Program Contract Services. Health Resources and Services Administration. 3 March 2010. Accessed August 20, 2025. Available at: https://www.federalregister.gov/documents/2010/03/05/2010-4755/notice-regarding-340b-drug-pricing- program-contract-pharmacy-services 12 Fein A. Exclusive: Five Pharmacy Chains and PBMs Dominate 2022s Still-Booming 340B Contract Pharmacy Market. Drug Channels. 12 July 2022. Available at: https://www.drugchannels.net/2022/07/exclusive-five-pharmacies-and-pbms.html 13 Department of Health and Human Services, Office of Inspector General. State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OEI-05-14-00430. Published June 2016. Accessed April 7, 2026. Available at: https://oig.hhs.gov/documents/evaluation/2918/OEI-05- 14-00430-Complete%20Report.pdf. 14 Government Accountability Office. 340B Drug Discount Program. Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement. GAO-20-212. Published January 2020. Accessed March 26, 2026. https://www.gao.gov/assets/gao-20-212.pdf. 4 Two of the most important responsibilities we have are to ensure that our programs are free of fraud, waste, and abuse and that we do everything we can to maximize the positive impact of every dollar we spend. HRSA is fully committed to strengthening 340B program integrity efforts and ensuring that our management and oversight supports the program's continued success.15 However, HRSA has not made any structural changes to the 340B Program to ensure compliance against duplicative discounts since inception of the program. In response to a lack of efforts by HRSA, states have taken action to carve-out pharmacy benefits from managed care to reduce duplicative discounts.16 While these state-level efforts are in a positive direction, these efforts can cause inconsistencies across state lines. In response to the IRAs statutory requirement to prevent duplicative discounts between 340B Program and MFP, many organizations, including NPC, have proposed that HRSA develop a 340B clearinghouse to address duplicative discounts.17 While we believe this is a part of an effective approach, CMS has not taken action to develop a 340B clearinghouse.18 HRSAs actions to meet program compliance are therefore necessary and urgently needed. We applaud HRSA for seeking information to inform the development of a 340B Rebate Model Pilot Program and for including questions about the effects of a rebate model on program integrity in general, and on the specific problem of duplicate discounts. A rebate model would enable efficient and accurate deduplication of 340B, MFPs, and Medicaid rebates Illegal duplicate discounts with the Medicaid Drug Rebate Program Section 340B of the Public Health Service Act, the statutory basis for the program, is clear in prohibiting duplicate discounts between 340B and Medicaid.19 In the absence of a rebate model, however, pharmaceutical manufacturers have been unable to prevent duplicate discounts between the 340B Program and the Medicaid Drug Rebate Program, particularly in Medicaid Managed Care and for drugs dispensed through contract pharmacies. The rapid growth and increasing complexity of the 340B program have outpaced existing oversight, allowing duplicate discounts, diversion, and other compliance issues to persist. In 2019, when the program was less than half its current size, Medicaid/340B duplicate discounts were estimated at up to $1.6 billion annually.7 This figure, along with longstanding GAO and OIG findings that remain largely unaddressed, highlights a significant and ongoing program integrity concern. Duplicative discounts 15 Health Resources and Services Administration. Letter to 340B participant explaining program integrity audit. February 10, 2012. Accessed April 9, 2026. Available at: https://www.hrsa.gov/sites/default/files/hrsa/opa/program-integrity-02-10-12.pdf 16 340B Duplicate Discounts: Enforcement Inconsistent and Weak Due to Lack of Data Transparency and Despite Federal Prohibition. Health Management Associates. February 2025. Available at: https://www.healthmanagement.com/wp- content/uploads/HMA_340BDuplicateDiscounts_Feb2025v2.pdf 17 National Pharmaceutical Council comments re: Medicare Drug Price Negotiation Program Draft Guidance for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028.28 June 2025. Available at: https://www.npcnow.org/resources/npc-submits-comments-cms-regarding-ipay-2028-draft-guidance 18 Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028. Centers for Medicare and Medicaid Services. Available at: https://www.cms.gov/files/document/ipay-2028-final-guidance.pdf. 19 Public Health Service Act, Sec. 340B(5)(A). Accessed March 31, 2026. Available at: https://www.govinfo.gov/content/pkg/COMPS- 8773/pdf/COMPS-8773.pdf. 5 between the 340B and Medicaid Program have been shown by evidence to persist. A 2014 report by the HHS Office of Inspector General (OIG) found that some 340B contract pharmacies dispensed drugs to Medicaid patients without reporting safeguards to prevent the associated covered entities from claiming 340B discounts.9 Another OIG report, issued in June 2016, found that the methods used by most states would not identify all 340B claims and were therefore inadequate to prevent duplicate discounts. OIG recommended that CMS require states to use claims-level methods, but CMS did not accept this recommendation.20 A January 2020 GAO report found that oversight by HRSA, CMS, and state Medicaid programs was inadequate to prevent duplicate discounts between 340B and Medicaid Managed Care,14 which now enrolls nearly three-quarters of Medicaid participants.21 Over a seven-year period (Fiscal Years 2017-2023), HRSA audits of 1,361 covered entities produced 253 findings of duplicate discounts.22 More recent evidence suggests that the problem of duplicate discounts between 340B and Medicaid has not been resolved. Health Management Associates interviewed former and current State Medicaid Directors and pharmaceutical policy experts in 13 states and the District of Columbia.23 All interviewees agreed that duplicate discounts occurred despite the clear federal prohibition. Medicaid Managed Care Organizations were not tracking or preventing duplicate discounts and had no incentive to do so. Use of contract pharmacies increased the difficulty of preventing duplicate discounts. The October 2025 Majority Staff Report of the Senate HELP Committee included documents from two manufacturers reporting their difficulties in identifying duplicate discounts and their reliance on widely varying state policies when they did.24 Enactment of Maximum Fair Prices (MFPs) further complicates duplicative discounts with the 340B Program Enactment of the Inflation Reduction Act (IRA) added the new challenges of duplicate discounts between 340B discounts and MFPs and between 340B and Medicare inflation rebates to the unsolved problem of duplicate discounts between 340B and Medicaid drug rebates. The IRA statute is clear that manufacturers are responsible for providing eligible entities with the selected drug at the 340B ceiling price in a nonduplicative manner with the MFP, if the 340B ceiling price is lower than the MFP.25 Providing manufacturers with data from covered entities around 340B prescriptions, as a rebate model will do, is critical for manufacturers to comply with the IRA statute and remove duplicate 20 Department of Health and Human Services, Office of Inspector General. State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OEI-05-14-00430. Published June 2016. Accessed April 7, 2026. Available at: https://oig.hhs.gov/documents/evaluation/2918/OEI-05- 14-00430-Complete%20Report.pdf. 21 Medicaid and CHIP Payment and Access Commission (MACPAC). MACStats: Medicaid and CHIP Data Book. Published February 2026. Accessed April 9. 2026. Available at: https://www.macpac.gov/wp-content/uploads/2026/02/MACSTATS_Feb2026_WEB_508.pdf 22 NPC analysis of data in ADVI Analysis: HRSA 340B Covered Entity Audits. ADVI. Published March 10, 2025. Accessed March 26, 2026. Available at: https://advi.com/insight/advi-analysis-hrsa-340b-covered-entity-audits/ 23 Health Management Associates. 340B Duplicate Discounts: Enforcement Inconsistent and Weak Due to Lack of Data Transparency and Despite Federal Prohibition. February 2025. Accessed March 30, 2026. Available at: https://www.healthmanagement.com/insights/briefs-reports/340b- duplicate-discounts/. 24 Senate Committee on Health Education Labor & Pensions. Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program. Majority Staff Report. April 2025. Accessed March 30, 2026. Available at: https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf1.pdf. 25 Social Security Act, Title XI, Sec. 1193(d). 6 discounts. In the IPAY 2028 Final Guidance, CMS reiterates the responsibility of the primary manufacturer to provide access to the MFP or 340B ceiling price, whichever is less.18 In the case where the MFP is lower than the 340B ceiling price (and the MFP was not provided proactively), the primary manufacturer must transmit payment of an amount that provides access to the MFP of a selected drug to the dispensing entity within a 14-day prompt MFP payment window. However, without a rebate model, manufacturers do not have a way to ascertain if a selected drug is being administered to a 340B- eligible individual at the point of sale or retrospectively. A 340B rebate model will allow manufacturers to comply with their obligations under the 340B and IRA statutes by receiving timely information on the 340B status of a selected drug and paying an appropriate rebate that provides access to the lesser of the MFP or the 340B ceiling price. A 340B rebate pilot program is a critical solution to address program compliance and integrity issues surrounding the program, namely duplicative discounts between the 340B Program, the Drug Price Negotiation Program, and Medicaid rebates. Further actions, beyond the scope of a rebate model pilot, could address the broader concerns about the 340B Program (please see Appendix). II. We support HRSAs implementation of a 340B Rebate Model Pilot Program The RFI asks for comments on whether HRSA should implement a rebate program under the 340B Program and how best to operationalize any such rebate framework for stakeholders.2 For all the reasons outlined above, NPC strongly supports HRSAs implementation of a 340B Rebate Model Pilot Program as a very effective way to prevent duplicate discounts on drugs. This includes both duplicate discounts between 340B and MFPs and duplicate discounts among two or more covered entities. A 340B Rebate Model will improve program integrity and transparency. Voluntary 340B claims modifiers have not met these needs because they have been underused by covered entities. IQVIA research supports that a rebate program can be implemented without limiting patient access to Covered Outpatient Drugs in any way.3,4 To efficiently address both duplicate discounts between 340B discounts and Maximum Fair Prices (MFPs) under the Medicare Drug Price Negotiation Program (DPNP) and duplicate discounts between 340B discounts and Medicaid rebates, NPC further recommends that the Pilot Program rapidly expand to apply to all Covered Outpatient Drugs, as defined in Section 1927(k) of the Social Security Act. We urge HRSA to consider the broader benefits of the rebate model and their applicability to additional circumstances as soon as possible following launch to allow for prompt expansion of the pilot. As described above, application to all Covered Outpatient Drugs will make it possible for HRSA, CMS, manufacturers, and covered entities to address duplicate discounts between 340B and MFPs and between 340B and Medicare Part B and Part D inflation rebates. In addition, application to all Covered Outpatient Drugs will increase program transparency as covered entities report data on the full set of drugs subject to 340B discounts. Increased program transparency will give policymakers within and outside of HRSA more information about the operations of the program to monitor and address duplicative discounts. Finally, including all Covered Outpatient Drugs in the Rebate Model Pilot Program will create greater efficiency and consistency across 340B pricing and purchasing mechanisms, which will be beneficial to all stakeholders. 7 Our responses to the specific RFI questions are outlined below: Targeted area 7.b.i. asks respondents to Explain whether a rebate-based model would...Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs.2 A rebate model under the 340B program will be a very effective method of addressing/stopping duplicative discounts between the DPNP and 340B Program. A rebate model will address the problem of duplicate discounts between 340B and MFPs by ensuring manufacturers receive timely information on the 340B status of selected drug claims to facilitate payment of appropriate rebates that provide access to the lesser of the MFP or the 340B ceiling price. ADVI Health analysis of 340B modifier use with IPAY 2026 selected drugs shows that HRSA and CMS cannot rely on covered entities voluntary submission of modifiers to prevent duplicate discounts between 340B and MFPs.26 In 2025, 0.3% of Medicare Part D claims for IPAY 2026 selected drugs included a 340B modifier, far below the estimated 9-12% of Part D prescriptions that are eligible for 340B pricing. Estimates were similarly low for the first two months of 2026 (0.5%) and for IPAY 2027 selected drugs (0.4% in both 2025 and the first two months of 2026). None of the drugs selected for either year had modifiers on more than 1.7% of their claims in either time period. A rebate-based model will also be an effective way to prevent multiple covered entities from receiving duplicate 340B discounts for the same prescription. BRG analysis of Medicare Part D Prescription Drug Event (PDE) data found that in 2024, two or more covered entities could seek up-front discounts on more than 20% of events qualifying for 340B replenishment, including some events with five or more covered entities.27 As stated by BGR, the covered entities themselves lack information on what other covered entities have sought replenishment, and therefore have no way to meet their responsibility to ensure no more than one covered entity receives a 340B discount on a transaction.28 Targeted area 7.a. asks respondents to the RFI to Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program.2 As aligned with the IRA statute,29 a manufacturer of a selected drug participating in a 340B rebate model pilot would be required to withhold or adjust an MFP rebate amount if a 340B rebate is also requested to ensure compliance with the IRAs de-duplication requirement. Duplicate discounts between 340B and Medicaid rebates are also prohibited by law.19 Manufacturers in a rebate pilot program would be required to similarly withhold or adjust rebates based on the compliance information provided to them. The proposed Rebate Model Pilot Program thus promises to improve program integrity. Targeted area 7.b.iii asks respondents to Explain whether a rebate-based model would...Increase pricing transparency across stakeholders.2 A 340B Rebate Model Pilot Program would increase pricing 26 ADVI Health. Analysis of 340B modifier usage in Medicare Part D claims for IPAYT 2026 and IPAY 2027 selected drugs. April 14, 2026. Accessed April 20, 2026. Available at: https://www.advi.com/wp-content/uploads/2026/04/ADVI-White-Paper-340B-Modifier-Usage-in-Medicare- Claims_Final_2026.04.14.pdf 27 Blalock E. 340 Patient Definition and Implications for Duplicate Replenishment. April 2026. Accessed April 20, 2026. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for-Duplicate- Replenishment.pdf 28 Blalock E. 340 Patient Definition and Implications for Duplicate Replenishment. April 2026. Accessed April 20, 2026. Available at: https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for-Duplicate- Replenishment.pdf [Page 1] 29 H.R. 5376, 117th Cong, Inflation Reduction Act of 2022. Public Law No. 117-169. August 16, 2022. Accessed June 24, 2025. Available at: https://www.congress.gov/bill/117th-congress/house-bill/5376/text. 8 transparency because covered entities would support rebate requests with information on program compliance that manufacturers do not receive under current arrangements. Targeted area 7.d. asks respondents to weigh the benefits of a 340B Rebate Model Pilot Program against its potential costs.2 Our recommendation of supporting a rebate pilot model is in part grounded in evidence demonstrating that a rebate program could be implemented without significant additional costs on covered entities. Three recent IQVIA White Papers demonstrate that covered entity cash flow under a rebate model will be similar to cash flow under the approaches now in use. In the White Paper, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, Sun, Zeng, Sarraille, and Martin compared cash flow timelines for the physical inventory, physical replenishment, and credit-based replenishment models currently used in entity-owned and contract pharmacies with a 340B rebate model and an alternative 340B presumptive credit model and used conservative assumptions to translate model timelines into interest costs measured in dollars.3 The authors assumed manufacturers would issue rebates to covered entities ten days after data submission, as required under the Rebate Model Pilot Program announced by HRSA in 2025,30 and assumed based on interviews with industry stakeholders that covered entities have thirty-day terms to pay distributors for drugs. Interest costs, the authors estimated, would be at least as low under the 340B rebate model as under the models currently used by 340B entity-owned pharmacies, and lower than under the models currently used by 340B contract pharmacies. A new White Paper by the same team shows that an assumption of 10.5-day payment terms, as the midpoint of a 7-14 day range, produces similar results.4 Another paper by the IQVIA team added cash flow for drugs selected for the Medicare Drug Price Negotiation Program (DPNP) to the 340B analysis.31 Zeng, Sun, Sarraille, and Martin found that the MFP rebate model for DPNP-selected drugs imposes higher interest costs than a 340B rebate model would because of the extra steps of Medicare Part D payer data submission and Medicare Transaction Facilitator processing required for MFP effectuation under CMS guidance. Modeling assumptions for the IQVIA studies were based on stakeholder interviews and the parameters of the 2025 Pilot Program; the takeaways were robust under different assumptions.3,4,31 Data collected for the Rebate Model Pilot Program, and analyzed as part of the rigorous evaluation of the Pilot, will be the best evidence available about cash flow and financial impacts under rebate models and alternative arrangements. IQVIA research shows that the 340B rebate model will improve program integrity and transparency without in any way limiting patient access to the drugs included in the model. We note in this regard that AIDS Drug Assistance Programs (ADAPs) have been able to expand financial assistance and other drug and non-drug services for HIV and AIDS patients, despite flat federal funding, 30 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. Docket No. HRSA202514619. Health Resources and Human Services Administration. Released August 7, 2025. Accessed March 26, 2026. Available at: https://www.federalregister.gov/documents/2025/08/07/2025-14998/340b-program-notice-application-process-for-the-340b-rebate-model- pilot-program-correction. 31 Zeng S, Sun C, Sarraille W, Martin R. How Will a Rebate Model Impact Cash Flow for Price Negotiated Drugs in Medicare Part D? IQVIA White Paper. Released December 9, 2026. Accessed March 26, 2026. Available at: https://www.iqvia.com/locations/united-states/library/white- papers/how-will-a-rebate-model-impact-cash-flow. 9 over a period when they have been the only covered entities receiving 340B pricing under a rebate model.32 III. We also recommend that HRSA consider the following to enhance a Pilot Program; however, these suggestions should not slow down implementation of the Pilot Program a. A 340B rebate model pilot should be announced with a clear evaluation plan NPC recommends that HRSA announce a 340B rebate model pilot with a clear evaluation plan focused on program integrity and patient impacts. In the spirit of the data collection requests in the RFI, HRSA should assess the impacts of the 340B rebate model pilot on covered entities, manufacturers, and other interested parties on the strength of the empirical evidence collected. The empirical assessment should systematically compare quantitative data on the experiences under a rebate model with experiences under other approaches, rather than rely on anecdotes and other forms of qualitative data. Data to be analyzed in the evaluation should include duplicate discounts identified by type (340B/MFP, 340B/Medicaid, multiple covered entities) and timeliness of rebate payments. NPC recommends that evaluation of the 340B rebate model be independent of HRSA to promote greater efficiency. HRSA, which administers the 340B Program and will administer a Rebate Model Pilot Program, should seek an independent evaluation or assessment of the Pilot Program by an independent body or another component of HHS. Apexus, as HRSA-designated Prime Vendor, should not be involved either. Given media scrutiny33 and Congressional inquiry34 of the relationship between Apexus and the 340B Program, an evaluation conducted by Apexus may be less credible to external stakeholders. We are concerned, as should be HRSA, that an evaluation by Apexus would be viewed as less credible and therefore HRSA should avoid this vendor as an evaluator. This independence would make it more likely the findings are accepted as credible by all interested parties. For example, HRSA and Secretary Kennedy should consider assigning responsibility for the evaluation to the HHS Office of Inspector General (OIG) or the CMS Center for Program Integrity, each of which has substantial expertise in program integrity. If HRSA does not assign responsibility for evaluating the 340B rebate model elsewhere, HRSA should at least consult with HHS OIG, the Center for Program Integrity, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE), the Government Accountability Office (GAO), the Medicare Payment Advisory Commission (MedPAC), and the Medicaid and CHIP Payment and Access Commission (MACPAC) in planning the evaluation. NPC recommends that HRSA continue the Rebate Model Pilot Program while the evaluation is conducted. We suggest that HRSA explore the rapid cycle innovation approach developed by the CMS 32 NASTAD. 2025 National RWHAP Part B ADAP Monitoring Project Annual Report. Accessed March 26, 2026. https://nastad.org/2025-rwhap- part-b-adap-monitoring-report 33 Gaber E. How a Company Makes Millions Off a Hospital Program Meant to Help the Poor. New York Times. January 15, 2025. Available at: https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html 34 Cassidy B. Letter to Apexus. February 1, 2026. Accessed April 9, 2026. Available at: https://www.help.senate.gov/imo/media/doc/26-02- 01_chairman_cassidy_letter_to_apexus_finalpdf.pdf 10 Innovation Center35 and consult with that Centers leadership and staff to develop an approach to evaluation of the Pilot Program that is rigorous, timely, and appropriate to the objectives and data of the Rebate Model. Pausing the Rebate Model, possibly for several years, while the evaluation is conducted would increase the risk of duplicate discounts as the cumulative number of drugs with MFPs increases, and be contrary to the Trump Administrations efforts against waste, fraud, and abuse in U.S. health care. b. A 340B rebate model pilot should apply to all payers. NPC recommends that HRSA include all payers in a 340B rebate model, as under the 340B Rebate Model Pilot Program announced in August 2025.30 This provision avoids the requirement that manufacturers seeking to implement rebate models operate multiple systems for 340B purchases of drugs included in the rebate model. Implementing 340B rebates on a payer-specific basis would be operationally infeasible. The Rebate Model Pilot Program must again apply to all in-scope 340B-priced drugs, regardless of payer. IV. Conclusion The National Pharmaceutical Council appreciates the opportunity to submit comments in response to this RFI and looks forward to additional opportunities to engage with HRSA around its interest in implementing a 340B rebate model pilot program. Please contact me at john.obrien@npcnow.org or (202) 827-2080 if we may provide any additional information about our cited 340B research or comments. Sincerely, John Michael OBrien PharmD, MPH President & Chief Executive Officer 35 Center for Medicare & Medicaid Services. Innovation Insight: New rapid cycle testing sets out to identify best practices earlier. November 28, 2025. Available at: https://www.cms.gov/priorities/innovation/innovation-insight-new-rapid-cycle-testing-sets-out-identify-best-practices- earlier. Accessed March 13, 2026. 11 APPENDIX: NPC and external evidence of the broad concerns of the 340B Program, which are out of scope for evaluation in this pilot. Patients, advocates, and researchers have long called for reform to the 340B Program. As we have iterated in our prior research surrounding the 340B Program, long-standing issues in the 340B Program require program reforms.36 The costs of the 340B Program might be justifiable if the benefits of the program went to vulnerable patients. The evidence, however, suggests that they largely do not, because covered entities are not required to use the spread between payer reimbursement and acquisition costs for the benefit of the patients they serve. The 340B Program provides very limited benefits to vulnerable patients NPC and other researchers have found that covered entities do not use their margins from the 340B Program to help vulnerable patients get access to prescription drugs. A recent IQVIA study found that patients received 340B discounts at contract pharmacies for less than 5% of all 340B branded prescriptions.37 Nearly all contract pharmacies are open to all patients, rather than restricted to patients who are eligible for 340B, suggesting the growing number of contract pharmacies has not expanded pharmacy access for covered entity patients.38 This is problematic because as stated by the authors: In summary, for the vast majority of cases, drug availability at contract pharmacies does not depend on patients 340B eligibility. We therefore find no evidence that 340B contract pharmacies increase drug availability in a meaningful way or that manufacturer policies reduced patient access at contract pharmacies. Our research also found that 340B drug margins are higher among covered entities experiencing less competition and those serving wealthier communities, suggesting 340B profit extraction may be driving the movement of necessary health care services from low-income to wealthy areas.39 340B child sites and pharmacies are also not targeted to need. Child sites are located in neighborhoods that are wealthier, healthier, better insured, and less diverse than the neighborhoods of their covered entity or other neighborhoods within a ten-mile radius of the covered entity.40 Contract pharmacies are located in areas with less vulnerable populations than the covered entitys own facilities.41 Revenues from the 340B Program do benefit contract pharmacies and third-party administrators. Minnesotas recently updated study of 340B covered entities found that in 2024, nearly 10% of gross 36 OBrien J. After 30 years of 340B, its time for data and an honest conversation. STAT News. 26 October 2022. Available at: https://www.statnews.com/2022/10/26/after-30-years-of-340b-time-for-data-honest-conversation/ 37 Martin R, Sarraille W, Illich K. Do Patients Receive 340B Drug Discounts at the Contract Pharmacy Counter? IQVIA. Published July 2, 2025. Accessed March 26, 2026. https://www.iqvia.com/locations/united-states/library/white-papers/do-patients-receive-340b-drug-discounts-at- the-contract-pharmacy-counter 38 Sarraille W, Zeng S, Martin R. Do 340B Contract Pharmacies Really Increase Access for 340B Patients? Published December 30, 2025. Accessed March 26, 2026. Available at: https://www.iqvia.com/locations/united-states/library/white-papers/do-340b-contract-pharmacies- really-increase-access-for-340b-patients 39 Nordyke RJ, Motyka J, Patterson JA. The Association of 340B Program Drug Margins with Covered Entity Characteristics. INQUIRY. 2025;62:469580251324051. doi:10.1177/00469580251324051. 40 Masia N, Filson D, Martin S, Neumann U. Income, health, and racial gaps between 340B hospitals, child sites, and nearby neighborhoods. Health Affairs Scholar. July 2025. Accessed March 30, 2026. Available at: https://academic.oup.com/healthaffairsscholar/article/3/7/qxaf121/8162672 41 Coughlin M, Mishra DD. Local population characteristics and access equity of 340B contract pharmacies. Health Affairs Scholar. July 2025. Accessed March 30, 2025. Available at: https://academic.oup.com/healthaffairsscholar/article/3/7/qxaf117/8160113 12 340B revenues in the state went to payments to contract pharmacies and third-party administrators.42 Congress has raised concerns regarding private entities serving as third-party administrators and contract pharmacies in the 340B Program.24 The 340B Program has imposed substantial costs to employers, employees, and local markets We are also concerned that our research demonstrates that the 340B Program has substantial costs to employers, employees, and local markets. We utilized a financial model to estimate 340B utilization and rebate losses for employer and government health plans in each state.43 Due to loss of rebate contracts for employers, the 340B Program increased health care costs by $6.6 billion for all employer- sponsored plans, including $1.0 billion in additional annual costs for state and local governments.44 This research demonstrates that the 340B Program results in costs for taxpayers. A separate NPC analysis estimated that 340B Program growth increased individual market insurance premiums $106 per year for each subsidized Affordable Care Act enrollee.45 The 340 Program also encourages health care consolidation. 340B discounts drive large hospitals to acquire independent physician practices.46 340B contract pharmacies are disproportionately part of chains such as Walgreens and CVS rather than independents.47 42 Minnesota Department of Health. 340B Covered Entity Report. Report to the Legislature. Published February 27, 2026. Accessed March 26, 2026. Available at: https://www.health.state.mn.us/data/340b/docs/2025report.pdf. 43 Sun C, Zeng S, Matin R, Campbell JD, Motyka JD, Westrich K. The Costs of 340B Program to States. National Pharmaceutical Council and IQVIA. Poster presented at ISPOR Annual Meeting, May 13-16, 2025, Montreal, QC, Canada. Accessed August 25, 2025. 44 Sun C, Zeng S, Martin R. The Cost of the 340B Program to States. IQVIA White Paper. Published February 4, 2025. Accessed March 26, 2026. Available at: https://www.iqvia.com/locations/united-states/library/white-papers/the-cost-of-the-340b-program-to-states. 45 Masia N, Motyka JD, Westrich K, Campbell JD. The Association of the 340B Program with Affordable Care Act (ACA) Premiums: A Longitudinal Analysis from 2018 to 2022. Inquiry. 2025 Jan-Dec;62:469580251370317. doi: 10.1177/00469580251370317. Epub 2025 Sep 4. PMID: 40905271; PMCID: PMC12411698. 46 Desai S, McWilliams JM. Consequences of the 340B Drug Pricing Program. New England Journal of Medicine. January 24, 2018. Available at: https://www.nejm.org/doi/full/10.1056/NEJMsa1706475 47 McGlave C, Bruno J, Watts E, Nikpay S. 340B Contract pharmacy growth by pharmacy ownership: 2009-2022. Health Affairs Scholar. January 2024. Accessed March 26, 2026. Available at: https://academic.oup.com/healthaffairsscholar/article/2/1/qxad075/7465208
HRSA-2026-0001-2349Winding Waters Community Health Center2026-04-20T04:00Z38,688 chars
See attached file(s) Your Health Care Home April 2, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (IIRSA-2026-03042) Dear Director Britton: On behalf of Winding Waters Medical Clinic, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $500,000-$750,000 from entity-owned open door pharmacy operations and a 40% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 rnillion in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. o Frontier Health Center Breakdown: While hard data are not available to us, we know that Frontier CHCs are even more vulnerable to programmatic and financial hardship brought on by increasing administrative burden. Winding Waters Clinic is a frontier non-profit community health center dedicated to providing high-quality, affordable, and compassionate prirnary and preventive healthcare to the residents of Wallowa County, Oregon. With a comrnitrnent to patient-centered, integrated care, Winding Waters Clinic offers a wide range of services, including medical, dental, mental and behavioral health, public health, and pharmacy. I. We Strongly Urge HRSA To Exempt Community Health Centers (CHCs) from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Prograrn is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Prograrn. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate rnodel underrnines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Winding Waters in particular, such a change would impact 18,000 340B transactions across 5,700 patients annually; Increasing our current administrative costs for our 340B program, already at $92,662 annually; Jeopardizing our ability to continue critical services that keep patients out of the hospital and enable them to remain safely in their homes. For example, programs like our Medication Preparation Program which provides weekly medication planners to those patients who are homebound or cannot maintain medication compliance would end. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. H. Patient Impact A 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to rnanage chronic conditions prevalent in primaiy care settings, rneaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence 2 of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and JardianceS, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent arnong our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for rnanaging their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include sorne behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatrnent success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted I Richard P, Ku L, DorA, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thrornb Haemost. 2021 Sep; I 9(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 JuI 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Tern] Randornized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahaiournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Adrninistration. (2025). Key substance use and mental health indicators in the United States: Results firom the 2024 NationaI Survey on Drug Use and HeaIth (HES Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. h ttps://www.sannh sa. gov/data/data-wc-co! lect/nsduh -n ational-surveydmg -use-and- health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/faeur.2022.773999.PMID: 35280262; PMCID: PMC89O684I. 6 2025 UDA Data, HRSA (hrsa.gov) 3 medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, any drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. ITRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers' existing contract phaimacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments since each manufacturer creates their own criteria for participation. Sliding Fee Discount: Winding Waters provided $64,000 in medication sliding fee discounts in the past year. Our sliding fee program specifically discounts medications to cost less thank our 340B price for those medications. We anticipate that our ability to offer these sliding fee discounts below 340B prices will end under a rebate rnodel. Staffing Impact: Winding Waters anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Winding Waters anticipates an increase of $20,000-$50,000 in costs for external support vendors. These vendors include a range of 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 4 Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to I full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Winding Waters would be aligned with those findings and anticipates needing at least one FTE to track and confirm rebate payments. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One rnidwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carlying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. In our case, we estimate an additional cost of between $85,000-$100,000 to cover the needed additional staffing. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terrns of monitoring rebate claims and payments. As the nutnber of selected drugs increase, Winding Waters anticipates the need to dedicate up to 20 hours weeldy to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers' plans. In addition, time needs to be spent contesting denied rebates which is currently occurring 60% of the time nationally. The lacl of standardization and likely varying requirements across manufacturers will force CHCs to use rnultiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Winding Waters urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacv Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require vaiying data submission standards and elements. Additionally, if rnanufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Thne Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. As much as $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, rem-ring costs that diminish our 340B savings. 7 Internal NACIIC assessment (99 responses). 8 Ibid. 5 Total Cost: For our CHC, which serves 5,700 patients annually in frontier Wallowa County, Oregon, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated to be at least $120,000 annually. Clinic Administered Drugs: The Burden of New Svstems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate rnodel for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range frorn $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-adrninistered drugs are bundled into the prospective payment systern (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the rnedications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventoty logs to be maintained on paper, with text docunientation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic rnedication administration records (eMARs), which are common in hospital electronic medical records (E1VIRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part 13 claims in 2028. Regarding Medicaid, each state ah-eady has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure fi-om over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited fmancial resources, 9 Internal NACHC survey data 6 including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. m In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals." A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Winding Waters offers sliding scale support to patients who qualify based of Federal Poverty Levels for both those who are uninsured as well as those whose co-pays are a bather to care. We are deeply concerned that should proposed cuts be rnade to ACA premium support, the number of uninsured patients will skyrocket. This would pose additional uncertainty as to how to care for these patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventoiy could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventoiy submitting data every 14 days would anticipate a purchase-to-rebate payrnent time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create fmancial strain on CHCs. We appreciate HRSA' s requirement for a 10-day timeframe for rebate payments; however, we have concems about the lack of details regarding enforcement if manufacturers fail 1 BRSA FAQ Such discounts are subject to potential LegaI and contractual restrictions. https://bolic.hrsa.gov/compliance/compliance- manual/chauter9HfootuoteI0 12https://enlivenhealth.co/blog/year-end-business-health-check-kcy-inetrics-cvery-pharinacy-owner-should-review 7 to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. Based on our organization's data, we estimate it would cost as much as $200,000 to purchase these 10 drugs under the proposed rebate model. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that ca.nnot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Winding Waters anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as Chronic Care Management, medication delivery services, and pharmaceutical co-visits with primary care providers. Workforce & Staffmg: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a Community Health Worker or Behavioral Health Counselor or RN or additional pharmacy staff to help serve patients, address social determinants of health, and further improve access to care. Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially Iead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at 8 WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Winding Waters asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of"financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, malcing increases to credit limits difficult or impractical. Winding Waters estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will bloat our upfront monthly drug spend by approximately $50,000 Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation systern. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, which lacks even a county health department, patients rely on Winding Waters for access to essential care. The risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If CHC's are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a wealcened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Winding Waters urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing mechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environrnent that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.13 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the chug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $250,000 This is a surn our CHC cannot absorb, as it represents a direct extraction of 13 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https: //www. federalregister. aov /docurnents/2025/08/01/2025-14619/340b -program-notice-appli cation-process-for-the-340 b- rebate-modcl-pilo t- pro grain resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HR.SA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements rnust apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are foimally and consistently addressed. This panel should include pharmacists with the necessaiy subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatoiy frarnework established through the Health Center Program and the 340B statute to make medications affordable for patients. 10 In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B prograrn. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program cornpliance, and also follow strict 340B compliance protocols, including internal audits, training, and extemal oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirernents already in place for CHCs, implementing a rebate rnodel would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens frorn such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of rnisuse in the 340B program; rather, they are national models of compliance. . Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the tirne and effort manufacturers and CEs must spend correcting eiTors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the program. Protect patient access to affordable MFP drugs. If a rebate rnodel were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is 11 imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Winding Waters strongly urges IIRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Winding Waters believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Winding Waters appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this essential issue. We are hopeful HRSA will understand the consequences to our organization and rnost importantly patient outcomes and exernpt CHC's from this program. If you have any questions, please contact either of us at the e-mails listed below. Sincerely, 1(140 a_ (frti Nicolas Powers, CEO Michael Farley, Pharm y Director nic@windingwaters.org mike.farley@windingwaters.org Winding Waters Medical Clinic 12
HRSA-2026-0001-2350PREVENTION 305, Inc.2026-04-20T04:00Z13,180 chars
See attached file(s) 1 April 16, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Clinic Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Clinic appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate 2 Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Identify any specific impacts on patients access to drugs that may occur as a result of a potential Rebate Model Pilot. A potential Rebate Model Pilot could have several direct and indirect impacts on patients access to medications, largely driven by the shift in financial timing. Because we would be required to pay upfront for drugs but wait extended for rebate reimbursement, there may be a need to more tightly manage inventory thus resulting in potential delays in initiating therapy. Impact on adherence and continuity of care which may include gaps in therapy in addition it may cause a strain on patient support services Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. Describe with specificity whether payment timing (e.g., within ten calendar days of submission of a complete claim) under a potential Rebate Model Pilot would affect your cash flow, including any financial risks to your organization. Payment timing under a Rebate Model Pilot would have a direct and material impact on cash flow, particularly under a structure requiring 90 days for claim submission and an additional 90 days for rebate payment. 3 Under this model, the total cash conversion cycle could extend to up to 180 days from dispense to reimbursement. This creates a meaningful gap between when drug acquisition costs are incurred and when funds are received Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Our current wholesalers require payment within 15 days of invoice receipt (Net 30). The payment terms do not differ with non-340b drugs Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. We do not receive percentage-based reductions tied to accelerated payment timelines. Under our current wholesaler agreements for 340B drugs, no prompt payment incentives or early payment discounts are utilized or contractually applied. Our current payment obligations are based solely on standard net terms, without optional early pay benefit structures State the average number of calendar days within which your organization typically remits payment under these contracts. Under our current wholesaler contracts, we typically remit payment within an average of 15 calendar days from the invoice date. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements. Yes, a rebate-based payment model would materially alter payment timing compared to current drug wholesaler arrangements. A rebate-based model introduces a significant delay between the upfront payment and subsequent reimbursement. The organization would still be required to purchase and pay for drugs under our standard wholesaler terms, but rebate payments would not be received until well after the claim is submitted and processed. Under a structure that allows up to 90 days for claim submission and an additional 90 days for rebate payment, total reimbursement timing could extend to as much as 180 days from the date of dispense * * * We appreciate HRSAs consideration of our comments. For further information, please contact Greg Doggett, Counsel. 4 Sincerely, Greg Doggett Counsel Patrick Whiteside CEO PREVENTION 305, Inc. April 16, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director Office of Pharmacy Affairs Office of Special Health Initiatives Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 RE: HHS Docket No. HRSA202603042: Clinic Comments in Response to Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Clinic appreciates the opportunity to submit comments to the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) in response to the Request for Information (RFI) regarding a 340B Rebate Model Pilot Program (Rebate Model Pilot). We strongly oppose any Rebate Model Pilot or any other proposal that would limit covered entities access to upfront discounts under the 340B program. As demonstrated by the data and information we provide below, we are deeply concerned about the tremendous administrative and financial burdens a rebate model would place on our organization and the damaging impact it would have on our ability to serve our patients. Given the harms a rebate model would cause our patients, our organization, and other covered entities, we respectfully request that HRSA abstain from implementing a Rebate Model Pilot and collaborate with the Centers for Medicare & Medicaid Services (CMS) to establish a neutral 340B clearinghouse as an alternative approach to protect manufacturers from providing a covered entity access to both the 340B ceiling price and a maximum fair price (MFP) rebate on the same drug claim. Patient Harm The comprehensive services that Ryan White clinics like our organization provide range from free or discounted medications to critical wrap-around support services for people living with HIV, including case management, dental and behavioral health, and housing assistance. Because Ryan White clinics often receive no insurance payments for these services, they depend on the 340B program to underwrite the cost of providing this care to their patients. Importantly, the 340B program allows Ryan White clinics to provide these expanded services without any cost to taxpayers. The 340B program enables Ryan White clinics to maximize their resources to support the full HIV/AIDS care continuum, from diagnosis, to linkage to care, to medication adherence and viral suppression. A Rebate Model Pilot would make the comprehensive care our patients need less accessible and more expensive, an outcome that is completely contrary to congressional intent when the 340B program was created. Increased financial and administrative costs from the Rebate Model Pilot will reduce the resources on which we rely both to care for existing patients and to identify additional patients in need of care. We rely on upfront 340B discounts to provide patient care that is uncompensated or undercompensated. By delaying and complicating covered entities access to 340B discounts, the Rebate Model Pilot will erode our 340B savings available to us to cover the cost of care to the uninsured and underinsured. These burdens directly contradict the purpose of the 340B program to enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Additionally, contract pharmacies may be less willing to distribute drugs to patients on behalf of covered entities due to the cumbersome and financially straining rebate process. If contract pharmacies refuse to enter into agreements with entities, access to medications will be limited for their patients, many of whom are already difficult to reach due to barriers such as housing instability, food insecurity, unemployment, and addiction. For Ryan White clinics like ours, adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and the ability to do so wanes when individuals with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Simply put, implementation of the Rebate Model Pilot will set back this nations fight to end the AIDS epidemic. Financial Impact of Increased Drug Acquisition Costs A Rebate Model Pilot will increase covered entities drug acquisition costs because we will lose the upfront 340B price reductions and subceiling discounts that we receive at the time of purchase. We will be forced to pay wholesale acquisition cost for drugs at the point of sale and face the uncertainty of obtaining a rebate in the future. This process places a cash flow strain on our already under-resourced organization and threatens our ability to provide patients with upfront discounts on their medications at the point of sale. * * * We appreciate HRSAs consideration of our comments. For further information, please contact Greg Doggett, Counsel. Sincerely, Greg Doggett Counsel Patrick Whiteside CEO PREVENTION 305, Inc.
HRSA-2026-0001-2351Anonymous Anonymous2026-04-20T04:00Z3,633 chars
HRSAs proposed 340B Rebate Model Pilot Program introduces a level of financial uncertainty that community health centers are not structurally equipped to absorb, ultimately placing patient access and continuity of care at risk. Unlike traditional reimbursement mechanisms that provide predictable margins at the point of dispensing, a rebate-based approach delays the realization of 340B savings, effectively forcing health centers to front the cost of medications without assurance of timely or complete repayment. For organizations operating with limited cash reserves, this shift could disrupt day-to-day financial operations, including maintaining pharmacy inventory, meeting payroll, and sustaining clinical services. This model also fundamentally alters how health centers deploy 340B savings to address social determinants of health. Many centers reinvest these funds into programs that are not billable but are critical to improving health outcomes, such as chronic disease management support, language access services, mobile clinics, and community outreach initiatives. The uncertainty and lag associated with rebates would make it significantly more difficult to budget for and sustain these programs, potentially leading to their reduction or elimination. In turn, this would disproportionately affect patients who rely on these wraparound services to navigate complex healthcare and socioeconomic challenges. In addition, the administrative burden associated with a rebate model cannot be overstated. Health centers would need to implement new systems to track drug utilization at a granular level, reconcile rebate payments, manage disputes with manufacturers, and ensure ongoing compliance with evolving program requirements. These activities require both specialized staff and technological investment resources that many health centers lack. Rather than enhancing program integrity, the model risks overwhelming providers with operational complexity while yielding minimal practical benefit to patient care. The rebate model may also introduce barriers to access at the patient level. Health centers could face greater hesitancy to stock high-cost medications due to cash flow constraints and uncertainty about rebate recovery. This could result in limited formularies, delays in treatment initiation, or increased reliance on external pharmacies that may not offer the same level of coordinated, patient-centered care. For patients managing chronic conditions such as diabetes, HIV, or cancer, even short disruptions in medication access can lead to significant clinical deterioration and higher downstream costs. Finally, the proposed model creates a misalignment between policy intent and real-world impact. While aimed at improving oversight and reducing misuse, it shifts financial and operational risk onto the very providers the 340B program was designed to support. Community health centers are uniquely positioned to deliver cost-effective, preventive, and comprehensive care to underserved populations, but only if they have stable and predictable funding streams. By introducing volatility into one of their most critical funding mechanisms, the rebate model threatens to erode the capacity of these organizations to fulfill their mission. A more effective approach would focus on strengthening transparency and accountability within the existing framework, without dismantling the point-of-sale savings structure that health centers depend on. Preserving the integrity and intent of the 340B program is essential to ensuring that vulnerable populations continue to receive the care and support they need.
HRSA-2026-0001-2352Neighborhood Health Centers of the Lehigh Valley2026-04-20T04:00Z3,122 chars
On behalf of Neighborhood Health Centers of the Lehigh Valley- NHCLV- ( H80CS24158), I respectfully submit concerns re: proposed rebate model for 340B Pharmacy Program. Our health center system is small and are only recently able to move forward with in house pharmacy model ( with a partner) due to contract pharmacy changes limiting access to needed medication for our patients and a rebate model could stop us indefinitely. We do not have resources to set up and manage a 340B program in the proposed model, having to wait for rebates and an external, partisan entity ( aka, for profit with a model set to maximize their revenue using a program intended to support those at highest risk) determining if rebate is justified or not. This program is intended for low income patients with proceeds designated to support mission of CHC model of care. NHCLV is not in a position to provide financial data because we have never been able to build to larger model- and being located where we are, current restrictions on contract pharmacies and manufacturers' rules mean many of our patients still cannot benefit from 340B program benefits due to distance to the "allowed" pharmacy. 340B proceeds represent less than 0.0075% of our budget- mostly due to current pharmacy manufacturer restrictions. NHCLV's strategy had always been to develop the 340B program in the way it was intended with the goal of filling gap of uninsured and under-insured patients' care not covered by sliding fee patient revenue and 330 federal subsidy. Unfortunately, NHCLV patients do not benefit much due to all the recent changes. However, if this rebate model is not approved NHCLV's new plans for an in-house pharmacy would support our fiscal gap and allow us to not only provide access to needed medications it would also allow us to remain fiscally viable as an employer located in more disadvantaged neighborhoods. An in house pharmacy under current model is important for us to not only improve access to much needed medications ( considering all current restrictions) but any revenue will allow us to better support the 45% uninsured community we serve in NE PA. NHCLV manages this program with transparency and our governing body monitors that proceeds serve mission. We were counting on 340B in house pharmacy to continue serving community. A rebate model will limit what we can do for our patients having to 'front' much of the funds and wait on a rebate to close the gap. With less than 60 days cash on hand, patient care would be impacted if we have to take cash to pay for medications up front and will severely limit availability of medications for our already at risk patient community. Please consider not approving the rebate model, or at minimum, excluding FQHCs from this proposed rebate model if you decide to move ahead for other types of covered entities- we would not be able to make it work and community health would be negatively impacted both in short term health consequences as well as longer term public health outcomes ( i.e. life expectancy and overall quality of health for the communities we serve). Thank you.
HRSA-2026-0001-2353Anonymous Anonymous2026-04-20T04:00Z4,408 chars
See attached file(s) 4/20/2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Thank you for the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. I am a pharmacy director at a safety net hospital in California. My hospital depends on 340B savings to help provide care and services to our underserved patient population. Our hospital operates on a very thin margin (<1%), and the cost of a rebate program would put a significant strain on our already limited resources. Approximately 65% of the patients we serve have Medi-CAL (California Medicaid). Medi-CAL stated that they will only pay hospitals at the net drug price after rebate. However, hospitals have to pay for the medications at full undiscounted price and carry the cost of the medication only to be made whole after Medi-CAL pays the 340b price and a rebate is received from the manufacturer. The 340B program is currently designed to provide up-front discounts, which help hospitals ensure an adequate supply of drugs to meet their patients needshowever rare those needs may be. The net effect will significantly increase the cost to maintain inventory. Hospitals nationwide typically operate at a less than 1% margin, many hospitals continue to operate at a negative margin, and to expect the hospitals to be the financier of Medicaids drug spend is not a reasonable ask. Furthermore, the added complexity of a rebate model would require my hospital to employ an additional 2-3 FTEs at a minimum. This is an unnecessary expense to health systems like mine that are struggling to stay open and serve our community. I urge HRSA to consider the cost of rebate models on hospitals like ours and not move forward with a rebate model or related pilot program because they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. Sincerely, Anonymous 4/20/2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Ref: HRSA-2026-03042: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Thank you for the opportunity to comment on the request for information (RFI) regarding a 340B Rebate Model Pilot Program. I am a pharmacy director at a safety net hospital in California. My hospital depends on 340B savings to help provide care and services to our underserved patient population. Our hospital operates on a very thin margin (<1%), and the cost of a rebate program would put a significant strain on our already limited resources. Approximately 65% of the patients we serve have Medi-CAL (California Medicaid). Medi-CAL stated that they will only pay hospitals at the net drug price after rebate. However, hospitals have to pay for the medications at full undiscounted price and carry the cost of the medication only to be made whole after Medi-CAL pays the 340b price and a rebate is received from the manufacturer. The 340B program is currently designed to provide up-front discounts, which help hospitals ensure an adequate supply of drugs to meet their patients needshowever rare those needs may be. The net effect will significantly increase the cost to maintain inventory. Hospitals nationwide typically operate at a less than 1% margin, many hospitals continue to operate at a negative margin, and to expect the hospitals to be the financier of Medicaids drug spend is not a reasonable ask. Furthermore, the added complexity of a rebate model would require my hospital to employ an additional 2-3 FTEs at a minimum. This is an unnecessary expense to health systems like mine that are struggling to stay open and serve our community. I urge HRSA to consider the cost of rebate models on hospitals like ours and not move forward with a rebate model or related pilot program because they will impose significant financial and operational burdens that will undermine our ability to fulfill our safety net mission. Sincerely, Anonymous
HRSA-2026-0001-2354Duke University Health System2026-04-20T04:00Z15,285 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Duke University Health System, including Duke University Hospital and Duke Regional Hospital located in Durham, NC, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Duke University Health System that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Duke University Health System has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Duke University Health System has done its best to provide detailed answers in the limited time available to us. For purposes of Department of Pharmacy 14221 Duke Clinic, DUMC 3089 TEL 919-681-2414 DukeHealth.org Durham, NC 27710 FAX 919-681-3895 estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Duke University Health System can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Duke University Health System to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Duke University Health System understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Duke University Health System estimates at least $2 million annual administrative and operational costs under a 340B Model Rebate Pilot Program. Key cost drivers include increased staffing, diverting current staff, IT systems data development, third-party vendors, compliance activities, labor hours, process for challenging denials, and finally, detailed payment reconciliation and financial accounting. Specifically, the activities or functions these incremental costs would cover includes, claims processing for ~30 million transactions per year, data submission, reconciliation/chasing down rebates, audit support, complex financial accounting for deferred expense, and responding to challenging denials. Should manufacturers deny any good faith inquiry, escalation would involve legal proceedings following HRSAs Administrative Dispute Resolution process. On January 1st, 2026 manufacturers implemented the rebates for the first ten drugs. After three months, only 33% of rebates owed have been paid to Duke University Health System. Manufacturers are withholding rebates due to hospitals and pharmacies. The Department of HHS has visibility to this data via the CMS Medicare Transaction Facilitator. Duke University Health System urges HRSA to establish a fair and neutral clearinghouse for retrospective 340B data identification. Allowing manufacturers to be the arbiter for payment is letting a fox guard a hen house. Staffing Impacts Under a Potential 340B Rebate Program. Duke University Health System does not currently have the staff needed to comply with a Rebate Program. Implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees and would cause current medical provider employees to reallocate work hours from medical care to perform administrative functions. Duke University Health System anticipates needing to hire and train 5 additional full-time employees to operationalize the rebate model. This includes 2 pharmacists, 1 lawyer, 1 financial accountant, and 1 IT analyst costing in total $1.5 million in labor each year. HRSAs current estimate of only 5 hours per week in additional work (for up to 25 total drugs, including both the 2026 and 2027 drugs approved under the IRA Drug Price Negotiation Program) is a gross underestimate. After 3 months of just the first ten drugs, Duke University Health System has lost over $1 million in denied rebates due to lack of hired and trained staff to dispute denials. Hourly Wage Rate** Number of Hours/ Week Number of Weeks Number of 340B Hospitals Annualized Cost Annualized Burden Hours Pharmacis t (2 FTE) $138.72 80 52 2728 $1,574,261,146 11,348,480 Lawyer $214.14 2 52 2728 $60,754,088 283,712 Accountin g/Finance $78.22 5 52 2728 $55,479,882 709,280 IT $154.24 2 52 2728 $43,759,739 283,712 TOTAL w/ 2 Pharmacy FTE $1,734,254,854 12,625,184 *Based on HRSA OPAIS Data for 340B Hospitals participating as of 1/1/2026 **Based on https://www.bls.gov/oes/2023/may/naics4_622100.htm#31-0000 (hourly rates are doubled to account for overhead costs and benefits) Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Duke University Health System has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Implementation a potential 340B Rebate Model Pilot Program would require Duke University Health System to develop new data feeds for claims submission and integrate new systems to reconcile payment with claim details. Financial accounting processes will be more complex as the full cost to procure the drug cannot be recognized until the status of the rebate is finalized. Duke University Health System estimates $500,000 in additional annual maintenance costs for system development, procurement, maintenance, and integration that would be required to implement a potential 340B Rebate Model Pilot Program recurring. In addition, it is particularly difficult to provide medical claims data within the 45 day of dispense requirement for many drugs utilized in the hospital and clinic setting. These claims generally have one year for timely filing to ensure appropriate billing requirements after patients are discharged from an extended length of stay. As such, some required data elements cannot in time to meet the policy requirements. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Manufacturers are requiring more data elements via policies published on Beacon. Some of these data elements, i.e. internal control number (ICN), NDC to HCPCS code mapping, live in different internal data systems and requires manual cross walking an auditing that is not a part of current internal and external program audits. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Duke University Health System to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Drug supply must be purchased ahead of dispensing to patients. The 10-day period does not account for the carrying costs and time inventory is stocked and partially used for patients. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Duke University Health System will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. At a high level, Duke University Health Systems 340B Program participation enables us to commit to promoting health, wellness, and access to quality care for the people and communities of North Carolina. For the fiscal year ending June 30, 2024, Duke University Health System, including our 340B hospitals, provided a total of $175 million in financial assistance for 457,946 patients, nearly all of whom call North Carolina home. In addition to providing substantial patient assistance, Duke contributes to numerous programs in the community and in schools to promote wellness, care improvement, and access to services, including Lincoln Community Health Center (a Federally Qualified Health Center), Northern Piedmont Community Care, Durham Health Innovations, Durham Center Access, and Local Access to Coordinated Healthcare. Indeed, drug companies are already forcing 340B hospitals to submit to targeted rebate schemes for certain life-saving cell and gene therapies. These therapies notably include some of the worlds most expensive drugs, with drug company prices of up to four million dollars. As a full-service tertiary and quaternary academic medical center, Duke University Hospital has long provided these critical therapies to acutely ill and often vulnerable patients who would not otherwise have access to these therapies. Unfortunately, though, growing patient volumes the proliferation of these schemes has significantly increased the negative consequences for both hospitals and our patients. Due to complex rules surrounding the 340B Program we would be happy to discuss with you or your team, these rebate models are limiting our ability to make these drugs available to all that need them. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Duke University Health System reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Duke University Health System HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Duke University Health System respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Duke University Health System and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Respectfully submitted, Duke University Health System Thomas A. Owens, MD Executive Vice President and Chief Operating Officer Duke University Health System
HRSA-2026-0001-2355Titus Regional Medical Center2026-04-20T04:00Z17,531 chars
Please accept the attached from Titus Regional Medical Center concern the Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Titus Regional Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on Titus Regional Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Titus Regional Medical Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Titus Regional Medical Center has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Titus Regional Medical Center can spend on patient care and comprehensive health care services. The additional administrative costs and cash flow requirements associated with a rebate model would substantially reduce the net benefit of 340B savings. In the first year, the combination of implementation costs and the need to float drug purchases at Wholesale Acquisition Cost (WAC) would likely offset most, if not all, of the financial benefit from the affected drugs. In subsequent years, ongoing administrative and operational costs would continue to erode the overall value of the program. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Titus Regional Medical Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Titus Regional Medical Center understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Titus Regional Medical Center estimates that implementation of a 340B Rebate Model Pilot Program would result in substantial administrative and operational costs (both one-time and ongoing). These estimates are based on our current 340B program structure which operates with 1.0 FTE dedicated to 340B operations and relies on third-party vendors to support split-billing and contract pharmacy accumulations. These estimates are based on the 10 drugs that are included in the Medicare negotiated drugs applicable to 2026 only. We expect the burden to increase as claim volume, data collection, reconciliation, and dispute activity expand across both medical and pharmacy claims in subsequent years. Estimated start-up implementation costs: IT system configurations, data mapping/vendor integration: $25,000-$45,000 Third-party vendor setup for rebate workflows & data feeds: $10,000-$15,000 Staff training and workflow designs: 80-120 hours Estimated ongoing annual administrative & operational costs: 15-20 additional hours per week (780-1,300 annually) Equivalent to approximately 0.50 FTE Staffing Impacts Under a Potential 340B Rebate Program. Titus Regional Medical Center does not currently have the staff needed to comply with a Rebate Program. As stated above, we currently operate our 340B program with 1.0 FTE, which is fully utilized under the existing upfront discount model. Implementation of a rebate model would require an estimated 1525 additional administrative hours per week, equivalent to approximately 0.5 FTE, necessitating either hiring additional staff or diverting time from pharmacy, finance, or clinical personnel. We anticipate the need for this additional staff to manage claims validation, data submission, rebate tracking, reconciliation, denial follow-up, and audit support, and would require approximately 36 months advance notice to recruit and train qualified staff in our rural market. HRSAs estimate of 5 hours per week significantly understates the burden, as it does not account for manual data extraction across multiple systems, coordination across multiple vendors, and ongoing denial and dispute management. Additionally, as new drugs are added to the rebate model beyond 2027, this will impact claim volumes which will further expand staffing needs. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Titus Regional Medical Center has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Because there is no single, centralized data source, the required data elements are not currently maintained in a rebate-ready format. A rebate model would require: New data extraction workflows from EHR, pharmacy and revenue cycle systems Development of claims-level data files to include additional required data fields New interfaces/manual file transfers between multiple external vendors and manufacturers Implementation of reconciliation processes to align medical claims data with corresponding drug utilization and NDC-level purchases Expanded reporting and audit documentation infrastructure This manual process is labor-intensive, increases the risk of errors, and would require ongoing IT and staff support. As a result, implementation of a rebate model would significantly increase system complexity, cost, and compliance risk compared to the current model. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Titus Regional Medical Center currently manages 340B data through various vendors for both split-billing and contract pharmacy administration. These systems are generally designed for accumulation tracking and audit support, not for claim-level data submission to manufacturers. A rebate model would fundamentally change our data processes by requiring ongoing extraction, validation, and submission of detailed claims-level data for each eligible transaction. Data required for rebate submission is not housed in a single system and must be pulled from multiple sources, including the EHR, pharmacy systems, billing/revenue cycle systems, and vendor platforms. Because our TPAs do not have direct access to our EHR, this would require manual extraction, alignment, and validation of data across systems. Additional complexity exists in aligning medical claims data (e.g., HCPCS/J-codes) with NDC- level drug utilization and matching claims to specific purchases. HRSAs assertion that the required data is already being collected and can be readily submitted is not accurate for our organization. While elements of the data exist, they are not centralized, standardized, or formatted for submission, and current systems (including 340B ESP/Beacon) are limited in scope and not designed for comprehensive, ongoing rebate reporting across multiple drugs and manufacturers. As a result, implementation of a rebate model would create a significant, ongoing manual data burden, increasing operational complexity, risk of errors, and compliance exposure compared to the current upfront discount model. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Titus Regional Medical Center to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Titus Regional Medical Center would experience a substantial impact on cash flow and increased financial risk under a 340B rebate model because we would be required to purchase drugs at WAC (full price) and then wait to be reimbursed. Over a recent 3-month period, our hospital would have had to cover $142,572 in additional drug costs, increasing spend from $4,179 under 340B pricing to $146,751 at WACan increase of over 3,400% in upfront cost, or about $570,000 annually just for the 10 drugs that have been identified under the 2026 HRSA rebate model. This impact will increase further as additional drugs are included in future years. This represents a considerable increase in the amount of cash we would need to have available to support operations and would directly impact our day-to-day financial flexibility. While Titus Regional Medical Center maintains appropriate cash levels for normal operations, we do not have sufficient available cash reserves to consistently absorb this level of recurring cost without risk, particularly given the potential for delayed, denied, or disputed rebates. In the last fiscal year, Titus Regional Medical Center averaged 41 days of cash on hand. A rebate model would significantly change payment timing by requiring payment to wholesalers on standard terms before rebate receipt, contrary to HRSAs assumption that rebates would typically be received first. Even a 10-day payment window is not sufficient, as it does not account for time needed for data compilation, submission, manufacturer review, and resolution of incomplete or disputed claims. Adverse Impacts of These Additional Costs And Burdens. The additional administrative costs, staffing demands, and cash flow pressures created by a rebate model would directly reduce Titus Regional Medical Centers ability to use 340B savings to support patient care. Instead of being reinvested into services, those savings would be redirected to cover new administrative work, vendor costs, and the financial burden of purchasing drugs at WAC and waiting for reimbursement. Based on recent data, this includes approximately $570,000 in additional, upfront drug costs annually for a limited set of drugs. This represents a substantial portion of the financial benefit currently realized through 340B for these drugs. As a result, our hospital would be forced to make difficult trade-offs. Resources currently used to support patient assistance programs, medication access, and pharmacy services would be reduced in order to cover these new costs. We would also have less ability to invest in expanding outpatient services, strengthening care coordination, and improving access to care in our community. The need to float high-cost drugs is particularly concerning. This level of financial exposure may force us to: Limit or delay access to certain high-cost medications Refer patients to outside facilities for treatment Reevaluate whether we can continue offering certain therapies locally Titus Regional Medical Center serves a rural and medically underserved population, including a significant number of Medicare and Medicaid patients. In many cases, alternative providers are not nearby, meaning patients would have to travel outside the community to receive care. This creates real barriers for patients, especially those with transportation challenges, financial limitations, or complex medical needs. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Titus Regional Medical Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. At Titus Regional Medical Center, 340B savings are incorporated into our operating budget, cash flow planning, and support for patient care services. Because these savings are realized upfront, they provide predictable funding that supports ongoing operations, staffing, and service delivery. A shift to a rebate model would introduce uncertainty in both timing and availability of these funds, making it more difficult to plan for and sustain patient services. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Titus Regional Medical Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third- party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Titus Regional Medical Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Titus Regional Medical Center and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Andy Fortenberry, CPA, MBA Chief Financial Officer Titus Regional Medical Center
HRSA-2026-0001-2356Florida Community Health Centers, Inc.2026-04-20T04:00Z79,553 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026- 03042) Dear Director Britton: On behalf of Florida Community Health Centers, Inc. (FCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: FCHC anticipates substantial losses due to the 340B Rebate Model Pilot Program. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. With a mission to provide community-based comprehensive healthcare of the highest quality with dignity and respect to all, regardless of the ability to pay, Florida Community Health Centers, Inc. (FCHC) is a community health leader in healthcare in St. Lucie, Martin, Okeechobee, Glades, Hendry, and Palm Beach counties, surrounding Lake Okeechobee in South Florida. FCHC has a rich history of service to the underserved and uninsured residents of the six counties that we provide health care to and the surrounding areas, with the services that began in 1976. Over the last 50 years, FCHC has expanded to include services in behavioral health, dental, obstetrics, pediatrics, primary care, and pharmacy. One area that FCHC has identified as a primary focus is collaboration between disciplines and connections to care. This is a critical aspect of ensuring that all patients are treated holistically and have access to all available care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For FCHC in particular, this means it will impact: Approximately 123,173 340B transactions for the nearly 50,000 patients served Current administrative costs of approximately $718,000 Use of 340B savings for delivery by mail of prescriptions to patients, outreach and care management programs, and providing medications to indigent/homeless patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 With the growth of in-house pharmacy claims reporting, FCHC anticipates adding 1.5 to 2 FTEs to help manage the program going forward. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. This could add an additional 15 hours per week (and this is a very modest estimate) to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans This is in addition to the reporting already required from manufacturers for in-house reporting and contract pharmacy reporting. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. FCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We have learned since manufacturers have insisted on in-house reporting that a fair amount of formatting is involved in getting reports from our pharmacy software. The formatting of these reports and actually uploading them properly can be time consuming, taking up to 2 to 3 hours in some cases. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Walgreens, CVS, Walmart, and 2 independent pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 38 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave many patients in St. Lucie, Martin, Okeechobee, Glades, Hendry, and Palm Beach Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA- approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. FCHC lowers the cost of medications utilizing a sliding fee discount scale. We also waive fees for indigent and homeless patients and offer discount pricing on common medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45- day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $279,464.81 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $335.82 to purchase these same drugs at the 340B ceiling price. This represents a 83218% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, FCHC anticipates needing to reduce: Operating Hours: We anticipate needing to reduce our clinic hours per week, if not close some clinic sites all together, impacting communities that have little to no access to health care or where all the clinicians in the community work in one of our centers, such as pediatricians in Okeechobee. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund health benefit coordinators, who help patients sign up for Medicaid, SNAP benefits, and help with affordable housing. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 10,000 uninsured patients who utilize our pharmacies from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. FCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, FCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $70,949.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. FCHCs Data: FCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $34,020.24. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on FCHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays FCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state- level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion FCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. FCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. FCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Melissa A. Davis, 340B Coordinator. Sincerely, Dr. Wilhelmina Lewis President/CEO Florida Community Health Centers, Inc. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Florida Community Health Centers, Inc. (FCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: FCHC anticipates substantial losses due to the 340B Rebate Model Pilot Program. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. With a mission to provide community-based comprehensive healthcare of the highest quality with dignity and respect to all, regardless of the ability to pay, Florida Community Health Centers, Inc. (FCHC) is a community health leader in healthcare in St. Lucie, Martin, Okeechobee, Glades, Hendry, and Palm Beach counties, surrounding Lake Okeechobee in South Florida. FCHC has a rich history of service to the underserved and uninsured residents of the six counties that we provide health care to and the surrounding areas, with the services that began in 1976. Over the last 50 years, FCHC has expanded to include services in behavioral health, dental, obstetrics, pediatrics, primary care, and pharmacy. One area that FCHC has identified as a primary focus is collaboration between disciplines and connections to care. This is a critical aspect of ensuring that all patients are treated holistically and have access to all available care. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For FCHC in particular, this means it will impact: Approximately 123,173 340B transactions for the nearly 50,000 patients served Current administrative costs of approximately $718,000 Use of 340B savings for delivery by mail of prescriptions to patients, outreach and care management programs, and providing medications to indigent/homeless patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 With the growth of in-house pharmacy claims reporting, FCHC anticipates adding 1.5 to 2 FTEs to help manage the program going forward. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. This could add an additional 15 hours per week (and this is a very modest estimate) to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans This is in addition to the reporting already required from manufacturers for in-house reporting and contract pharmacy reporting. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. FCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. We have learned since manufacturers have insisted on in-house reporting that a fair amount of formatting is involved in getting reports from our pharmacy software. The formatting of these reports and actually uploading them properly can be time consuming, taking up to 2 to 3 hours in some cases. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with Walgreens, CVS, Walmart, and 2 independent pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 38 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave many patients in St. Lucie, Martin, Okeechobee, Glades, Hendry, and Palm Beach Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. FCHC lowers the cost of medications utilizing a sliding fee discount scale. We also waive fees for indigent and homeless patients and offer discount pricing on common medications. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $279,464.81 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $335.82 to purchase these same drugs at the 340B ceiling price. This represents a 83218% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, FCHC anticipates needing to reduce: Operating Hours: We anticipate needing to reduce our clinic hours per week, if not close some clinic sites all together, impacting communities that have little to no access to health care or where all the clinicians in the community work in one of our centers, such as pediatricians in Okeechobee. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund health benefit coordinators, who help patients sign up for Medicaid, SNAP benefits, and help with affordable housing. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our over 10,000 uninsured patients who utilize our pharmacies from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. FCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, FCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $70,949.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. FCHCs Data: FCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $34,020.24. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on FCHC the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays FCHC urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion FCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. FCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. FCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Melissa A. Davis, 340B Coordinator. Sincerely, Dr. Wilhelmina Lewis President/CEO Florida Community Health Centers, Inc.
HRSA-2026-0001-2357Contentnea Health2026-04-20T04:00Z38,853 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Contentnea Health, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts. Financial Losses: Contentnea Health anticipates a significant loss of savings from both entity-owned pharmacy operations and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Contentnea Health is a Federally Qualified Health Center serving eastern North Carolina through eight sites across Greene, Pitt, and Pamlico counties. The organization provides compassionate, quality care through integrated medical, dental, behavioral health, student health, diabetology, pharmacy, and mobile health services, with a mission of delivering care every day for all. Contentnea Health also offers sliding fee scale assistance for qualifying patients, helping improve access to care for individuals and families across the communities it serves. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Contentnea Health in particular, this means it will impact: 36,926 patients 8 clinic sites Services provided We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already- strained operational capabilities. Sliding Fee Discount: Contentnea Health provided $6,379,326.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Contentnea Health anticipates needing 1.25 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Contentnea Health anticipates an increase of $103,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate that we will need to add 1.25 full-time equivalent (FTEs) to reconcile claims and initiate/track appeals if necessary. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Contentnea Health estimates an excess of $600,000.00 in additional administrative costs to manage and oversee submissions. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Additional employee hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Contentnea Health urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves approximately 37000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $624,474.00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in- house pharmacy systems will require costly customization to provide real- time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Manual submission of claims will be yet one more task that will burden entity-owned pharmacies. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 12 to 15 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with multiple pharmacies, including chain and independent, to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 25 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Pitt, Greene and Pamlico counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding- fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding- fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Contentnea Health provides access to affordable medications at our entity-owned pharmacy as well as contract pharmacies. As our pricing hinges on the cost of medications, a rebate program will make it difficult to establish pricing before the rebate is processed. If a rebate is denied, this could mean that the pharmacy would have dispensed at a significant loss. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $788,234.00 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $157,647.00 to purchase these same drugs at the 340B ceiling price. This represents a 500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Contentnea Health anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health unit, our mobile dental van, behavioral health services, and school based clinics. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator hired, we may lose the ability to fund a Behavioral Health Consultant directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 30,179 uninsured patients from rationing their medications. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Contentnea Health asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B program to stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Contentnea Health estimates its 2027 Annual Rebate Opportunity Cost to be approximately $231,698.00. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Contentnea Health estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $96,541.00. This would increase to $100,855.00 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This would impact funds that are currently dedicated to integrated medical, dental, behavioral health, student health, diabetology, pharmacy and mobile health services. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Contentnea Health, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Contentnea Health urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a substantial net annual loss which our CHC cannot absorb. This would represent a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for- service Medicaid. This may lead to increased Medicaid costs and potential state-level claw- backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B- purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45- day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety- net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Contentnea Health strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Contentnea Health believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Contentnea Health appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Melissa Torres at mtorres@contentnea.org. Sincerely, Melissa Torres Chief Executive Officer Contentnea Health
HRSA-2026-0001-2358Via Care Community Health Center - Los Angeles, CA2026-04-20T04:00Z44,161 chars
See attached file(s) 2 April 15 , 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Via Care Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Via Care anticipates a loss of $1.3 million from entity-owned pharmacy operations and 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Via Care Community Health Center (Via Care) was founded in 2015 to address the increasing lack of access to healthcare for low-income residents of Southern California. Since then, Via Care has grown into a full-service 501(c)(3) Federally Qualified Health Center (FQHC) safety-net provider, serving low-income patients of all ages with culturally and linguistically appropriate health and wellness services. Through its network of clinics throughout Los Angeles County, Via Care offers primary medical, dental, behavioral health, and supportive services to community members regardless of insurance or an individuals ability to pay. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 3 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Via Care in particular, this means it will impact: Number of 340B transactions/ how many patients does your CHC serve Current admin costs for your 340B program We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication non adherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 4 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Via Care provided in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Via Care anticipates needing one additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Via Care anticipates an increase of $150,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 6 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Via Care urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $35,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 26,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $ 250,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. $50,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 8 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 34 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 35 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Los Angeles with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 8 Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 9 arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $600,000 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $120,000 to purchase these same drugs at the 340B ceiling price. This represents a 500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Via Care anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our medication therapy management (MTM) program for complex diabetic patients. Operating Hours: We anticipate needing to reduce our clinic hours by 16 per week, specifically impacting clinical pharmacy program. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund EXAMPLE: a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 11 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Via Care asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Via Care estimates its 2027 Annual Rebate Opportunity Cost to be approximately $ 240,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Via Care estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $500,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $ 120,000 annually funds that are currently dedicated to Case management , clinical pharmacy program and our prenatal care program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Via Care, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Via Care urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously 12 proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $ 300,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 14 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Via Care strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Via Care believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Via Care appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Chief Development Officer, Patrice Wagonhurst at pwagonhurst@viacarela.org. Sincerely, Deborah Villar President and CEO Via Care Community Health Center ______________________________________________________________________________ 3601 East 1st Street, Los Angeles, California 90063 Tel: 323-268-9191 Fax: 323-268-9119 Website: viacarela.org
HRSA-2026-0001-2359Shasta Community Health Center2026-04-20T04:00Z45,672 chars
See attached file Shasta Community Health Center a californiake&V center COMMUNI1V NEM. CENaP F . HC April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Shasta Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHC's ability to serve the rnost vulnerable mernbers of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Shasta Community Health Center anticipates a loss of 15-20% of340B savings for contract pharrnacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single rrad-sized CHC expects to incur over $3 million in additional costs annually to rnanage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in tural-specific infi-astructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure frorn the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B prograrn has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling thern to provide affordable and sometimes free rnedications to millions of low-incorne and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers "stretch scarce Federal resources as far as possible." The proposed rebate model underrnines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs' ability to serve the 52 million patients who rely on us. For Shasta Comrnunity Health Center in particular, this rneans it will impact: Prescription prices for the 36,000 patients Shasta Community serves annually. Our ability to upgrade our existing infrastructure or expand services. The discount we can provide to our patients on their prescriptions We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact 't ils (530) 246-5710 pri P.0. Box 992790 1035 Placer Street Redding, CA 96099-2790 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a caUfornia6Aik center cOMMUMTY Hr.", crNIER F Hic Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B prograrn provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients' access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.' This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life- sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrornbosis, pulmonary ernbolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.' Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a rnainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the rnidst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Irnpairing access to these drugs could result in exacerbation of the mental health crisis. Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pd1710.1 I 61/circulationaha. I 23.065748 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.govklata/data-we-collect/nsduh-national- surycydrue-usc-and-hcalth/national-relcases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia ls Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. ikeN (530) 246-5710 ,11K1 P.O. Box 992790 1035 Placer Street AWL Redding, CA 96099-2790 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a california keattk center cOMMUNtlY Iltnl111CCHTIR F Hc The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,' affordability of insulin is a matter of life and death. Furtherrnore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted rnedications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This rnakes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incornes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. URSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessrnent illustrates that CHCs will incur additional workforce and IT costs to maintain cornpliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot prograrn. Similar to navigating manufacturers' existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirernents and timelines, payrnent reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate rnodel, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates prograrn savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-adrninistered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-adrninistered drugs and entity-owned pharrnacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Shasta Community Health Center provided $2,845,806 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Shasta Community Health Center anticipates needing 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate rnodel. External Vendor Costs: Given increased complexity, Shasta Cornrnunity Health Center anticipates an increase of $75,000-$100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. 6 2025 UDA Data, FIRSA (hrsa.gov) itoo (530) 246-5710 ),IIN P.O. Box 992790 1035 Placer Street Redding, CA 96099-2790 (? Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a california6lik center COMMUNLIV NUM,. CENT", F HC Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.' Shasta Community Health Center estimates needing to add between 1 and 2 FTE to meet the reporting and tracking requirements. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Ongoing Operational Fees: Beyond irnplementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 36,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $750,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharrnacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with more than 20 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers' varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking rnodules to us through increased per-claim fees. Verification Latency: The rebate rnodel creates a reconciliation gap. Our staff must monitor claims across many different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Shasta County and Far Northern California with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,' and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective rnanner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range fi-om $30,000 to $50,000 annually and could be much higher, depending on the software.10 7 Internal NACHC assessment (99 responses). 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies I Pharmacy and Clinical Pharmacology I JAMA Network Open I JAMA Nctwork 9 https://www.healthaffairs.org/doi/abs/10.1 377/h lthaff.2024.00192?journalCocle=hlthaff 10 Internal NACHC survey data ittiz (530) 246-5710 pri P.O. Box 992790 1035 Placer Street Redding, CA 96099-2790 Q. Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a california6ak center COMPAM., NEAL111 F HC.. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Veiy few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D clairns in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs' ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients' health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs' ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs' pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a veiy unpredictable process for determining the level of discount and pricing for a patient's medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesaler's price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHC's ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs' ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to rnake them more affordable for low-income individuals.1z A CHC can adjust the cost of health care services, including medications, based on a patient's income and family size. Currently, Shasta Community Health Center makes prescriptions available at a cost of between $10 and the 340B price for patients who qualify for the sliding fee discount. This reduction comes at a large cost to the organization. For our patients at the lowest end of our sliding fee discount, Shasta Community subsidizes over $1 million in prescription costs in 2025. 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/cornpliance- rnanual/chapter9grootnotel0 (530) 246-5710 pIK P.O. Box 992790 c lop 1035 Placer Street Redding, CA 96099-2790 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a california kulfrk center COMMUNI1V IICALIII Cl TIP F HC CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharrnacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSA's requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC." For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual 13littps://enlivenhcalth.co/blog/year-end-busincss-hcalth-check-key-rnetrics-everv-pharmacv-owner-should-review 14 littps://340hpricing.hrsa.gov/ 15 https://www.cms.gov/11 les/zip/selected-drug-list-neaoliated-prices-also-known-maximum-fair-prices-statutezip.zip (530) 246-5710 M P.O. Box 992790 9 1035 Placer Street Redding, CA 96099-2790 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a cal.iforniaUfk, center CONTNIUNITV RERUN CENTER F H C processes for referral claim capture can all influence Covered Entities' (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment "Wait" Period: CHCs rnust wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organization's ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Shasta Community Health Center anticipates needing to reduce: Patient Financial Assistance: Our ability to provide medications at "zero-pay" or deeply discounted rates under our sliding fee scale will be cornprornised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the "bridge" support that prevents our 2,500 uninsured patients frorn rationing their insulin or heart medication. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every "Rebate Coordinator" we are forced to hire, we lose the ability to fund a Community Health Worker, or a Case Manager B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Shasta Comrnunity Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of "financial limbo." This approach fundamentally defeats the purpose of the 340B programto "stretch" scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to "float" manufacturer rebates is particularly dangerous at a time when all other rnajor revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order rnedications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely lirnited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or irnpractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these teims, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Shasta Comrnunity Health Center estirnates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $50,000. k e, (530) 246-5710 pr,:i P.O. Box 992790 1035 Placer Street Redding, CA 96099-2790 9 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a california 64,Uk center COMMUIVTV IIC.111CrIOCR F HC Every dollar we pay upfront at WAC is a dollar that remains "frozen" in the manufacturer's reconciliation system. While we wait for rebates, we lose the liquidity necessaiy to respond to imrnediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution as these funds are currently committed to future capital expansion and infrastructure upgrade. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Shasta Community Health Center, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the community's safety net. If we are forced into financial limbo, the "trickle-down" effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Shasta Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a "pricing inechanism" but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHC's statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as "duplicate rebate" or "MFP deduplication," without providing the data or documentation CHCs need to understand or contest those decisions.' 6 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative denial rate would result in a net annual loss. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesaler's price catalog or the pharmacy software at the time of purchase. This forces CHCs to "estimate" rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www. federalrecistergov/clocuments/2025/08/01/2025-14619/340b-program-noticc-appl ication-proccss-for-the-340b-rebatc-model-pi lot- proaram iis. (530) 246-5710 P.O. Box 992790 9 1035 Placer Street Redding, CA 96099-2790 .... Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a catifornia ha& center COMMUNFIV F HC Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement frarnework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include phaimacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patient's income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B prograrn. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Prograrn compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harrn to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSA's proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs' participation in the prograrn. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. 46/s (530) 246-5710 P.O. Box 992790 (I) 1035 Placer Street Redding, CA 96099-2790 -... Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a californiaUdti center CUMMUNII V 11.1.11/ CfNIEP Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs' 340B clairns data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level irnplementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, California's Department of Health Care Services (DHCS) issued guidance for California's Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharrnacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is cornplete. This means a CHC dispensing a rebate-rnodel drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate adrninistrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, rnulti-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks. Medi-Cal Rx real-time adjudication perforrns critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharrnacywith no real-time safety net to catch it. Unsustainable upfront cost burden. The rebate model already forces CHCs to carry the full WAC cost upfront but California's rnulti-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: dispensing, Beacon data subrnission, rebate receipt, retroactive Medi- Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a rninor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative 2 percent. Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursernent, is financially unsustainable. Unsustainable administrative burden. CHCs must manually track claims across rnultiple systems and stages interirn cash claims, Beacon subrnissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCS's six-rnonth timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like California's will face a cascade of additional harrns beyond their control. HRSA must take these compounding harrns into consideration. (530) 246-5710 pri P.O. Box 992790 9 1035 Placer Street Redding, CA 96099-2790 Redding, CA 96001 www.shastahealth.org Shasta Community Health Center a californiakutte/i,f center cOMPAUNITY NEAll. CENTER F Hc Conclusion Shasta Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to "stretch scarce Federal resources" and provide more comprehensive care. A rebate rnodel would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally irnpossible to provide the sliding fee scale and steeply discounted medications required by law. Shasta Cornmunity Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Shasta Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Daniel Santi, Chief Financial Officer. His email address is dsanti@shastahealth.org Sincerely, J. Brandon Thornock, CEO Shasta Community Health Center itles (530) 246-5710 pliq P.0. Box 992790 1035 Placer Street 46'6" Redding, CA 96099-2790 Q. Redding, CA 96001 [7:3 www.shastahealth.org
HRSA-2026-0001-2360Minnesota Hospital Association2026-04-20T04:00Z17,646 chars
Attached are the Minnesota Hospital Association's comments 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org April 20, 2026 Thomas Engels Administrator Health Resource and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically through www.regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, On behalf of the Minnesota Hospital Association (MHA) and our 139 member hospitals and health systems, we appreciate the opportunity to respond to the Health Resources and Services Administrations (HRSA) Request for Information (RFI) regarding the potential use of a rebate model to effectuate 340B ceiling prices. MHA represents hospitals of every size and setting across Minnesota, including urban academic medical centers, regional referral hospitals, independent community hospitals, and critical access hospitals (CAHs) serving the states most rural and geographically isolated communities. Every one of our 340B-participating members is a safety net provider, and the 340B Drug Pricing Program is fundamental to their ability to serve low-income, uninsured, and underinsured patients. MHA submitted comments on Sept. 8, 2025, in strong opposition to the original 340B Rebate Model Pilot Program application notice. Those concerns have only intensified in the months since. We remain opposed to any shift away from the upfront discount structure that has governed 340B for more than three decades, and we urge HRSA to decline to advance a rebate model in any form. The information below reflects the real- world operational, financial, and patient-access consequences a rebate model would impose on our member hospitals and health systems. Minnesota Hospitals Have Substantial and Reasonable Reliance Interests in the Upfront Discount Model 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org Since 340B was enacted in 1992, Minnesotas safety-net hospitals have built every component of their drug procurement, inventory management, financial planning, billing, compliance, and patient-assistance operations around the expectation that 340B savings would be realized at the point of purchase. The upfront discount is not merely a feature of the program; it is the foundation on which covered entities have structured their pharmacy operations, negotiated wholesaler contracts, designed their electronic health record (EHR) and third-party administrator (TPA) workflows, and planned the delivery of services to vulnerable patients. The upfront discount is the the central pillar of 340B and these savings directly sustain financial solvency, offset uncompensated care and public-payer shortfalls, support medication-assisted treatment (MAT) programs, fund patient medication assistance for uninsured patients, and have enabled the acquisition and operation of community pharmacies in underserved areas. A shift to rebates would disrupt financial planning and operational assumptions that have been reasonably maintained for more than thirty years. These reliance interests are not incidental; they are the direct result of the Departments consistent implementation of 340B as an upfront discount program and of Congresss stated purpose that covered entities be able to stretch scarce Federal resources as far as possible. A Rebate Model Would Create Severe Cash-Flow Strain on Already-Stretched Safety-Net Providers A rebate model would require covered entities to purchase rebate-eligible drugs at wholesale acquisition cost (WAC), hold those inventory dollars on their balance sheets, and wait for rebate payments that our me mbers experience with the Maximum Fair Price (MFP) program suggests will arrive far later than any stated timeline. Our members who have operated under MFP report that processing timelines promised at 10 or 14 days have in practice stretched to six to eight weeks. There is no reason to believe rebate processing would be faster or more reliable, particularly as the universe of rebate-eligible drugs expands from the 10 drugs contemplated in 2025 to the 25 drugs anticipated under the expanded framework. The cash-flow implications for Minnesota hospitals are substantial. We anticipate mid- sized and larger safety-net systems would need, on average, approximately $500,000 in additional working capital each month to float the difference between WAC and 340B pricing on rebate-eligible drugs, with the total dollar amount floated to manufacturers growing substantially as the universe of rebate-eligible drugs expands to 25 drugs and beyond. Smaller community hospitals and CAHs, which operate on far thinner margins, 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org cannot absorb a burden of this magnitude without consequence. To manage the shortfall, our members would be forced to extend wholesaler payment terms from 60 days to 90 or 120 days, forgo prompt-payment discounts currently negotiated with wholesalers, or draw on lines of credit at interest to finance what is effectively an interest-free loan to pharmaceutical manufacturers. Each of these options imposes real, ongoing costs that will not be recovered through any rebate payment. This concern is not hypothetical. A significant share of Minnesotas hospitals are currently operating at negative margins, and drug costs typically represent the second- largest expense on hospital income statements after labor. Specialty drugs such as Stelara, Imbruvica, and Enbrel carry extraordinarily high WAC prices, and requiring hospitals to front these costs, often for weeks or months before a patient claim can be generated, reconciled, and submitted for rebate, would tie up capital that would otherwise support patient care. As the number of rebate-eligible drugs grows in subsequent years under the Inflation Reduction Act, this burden will scale accordingly. The cumulative cash requirement, particularly when layered on top of existing regulatory and reimbursement pressures, will threaten the financial viability of safety-net operations. Administrative and Operational Costs Would Increase Substantially and Divert Resources from Patient Care Our member hospitals and health systems already incur significant costs to operate compliant 340B programs. Current annual administrative and compliance costs among our member hospitals and health systems range from approximately $29,000 at small critical access hospitals to more than $790,000 at larger health systems, with mid-sized community hospitals typically reporting between $60,000 and $130,000 per year. On average, larger tertiary systems report current 340B program costs approaching or exceeding $500,000 annually when TPA fees, consulting services, and internal staff time are combined. These costs are already substantial, and they cover a program that operates on the relatively efficient upfront discount model. A rebate model would layer significant new costs on top of this existing baseline. Our member hospitals and health systems anticipate the following categories of additional cost, each of which would be ongoing and, in aggregate, material: Staffing: Our member hospitals and health systems estimate needing, on average, 0.5 to 3.0 additional full-time equivalent (FTE) positions dedicated solely to gathering, formatting, submitting, tracking, validating, and disputing rebate claims across multiple manufacturer platforms. At larger facilities, this would translate to approximately 120 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org additional staff hours per week. Members also note that managing the comparable Maximum Fair Price (MFP) process, which involves far fewer claims than 340B overall, has already absorbed significant staff capacity across Minnesota hospitals, and a rebate model applied to all 340B claims across all payers would require substantially more resources. IT and data infrastructure: Member EHRs are designed for a prospective pricing model in which 340B eligibility and price are determined at the point of sale or at the point of inventory qualification, not retroactively through rebate reconciliation. Current systems are not consistently able to link drug administration time with claim data for provider-administered drugs. Upgrade costs range from approximately $25,000 to $35,000 and roughly four weeks of development time to build a TPA-enabled automated rebate-data formatting solution, up to several hundred thousand dollars if EHR modifications are required to capture new data elements. Our member hospitals and health systems also anticipate needing to establish new Secure File Transfer Protocol (SFTP) connections, acquire or expand analytical tools capable of handling the data volume (because spreadsheet-based tools are insufficient), and retain additional third- party vendors, each of which carries ongoing monthly fees. Third-party administrator reliance and coordination: Members rely heavily on TPAs to manage an increasingly complex regulatory environment. Under prior manufacturer- driven data submission initiatives, some TPAs have been unwilling or unable to accept additional data elements that manufacturers required, leaving covered entities unable to comply through no fault of their own. A rebate model with manufacturer-specific data specifications would exacerbate this problem. There is the need for an integrated, standardized data pathway rather than a proliferation of manufacturer-specific portals, data specifications, and dispute processes. Rebate denials and dispute resolution: Members anticipate meaningful ongoing costs associated with disputing improperly denied rebate claims. A rebate model effectively positions manufacturers as the gatekeepers of program savings, allowing them to deny or delay payments for a wide range of reasons, many of which would be opaque or inadequately explained. The only avenue available to covered entities to contest such denials, HRSAs Administrative Dispute Resolution process, is not designed to handle the volume of claim-level disputes that a rebate model would generate, and pursuing ADR requires substantial staff time and legal resources. Members share a common concern that a rebate model effectively places manufacturers in charge of program oversight, and that the programs intended benefit 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org could be undercut if manufacturers deem claims ineligible or hold rebates back for reasons outside the covered entitys control. Collectively, we anticipate that a rebate model would add ongoing incremental costs averaging well in excess of $100,000 per year per facility, with larger systems expecting costs significantly higher depending on the scope of EHR modifications and vendor services required. These are resources that would otherwise directly fund patient care, charity care, community pharmacy operations, medication assistance for uninsured patients, behavioral health and MAT services, and other essential safety-net functions. A Rebate Model Creates Serious Medicaid Billing Compliance Risk As MHA raised in our September 2025 comments, Medical Assistance (Minnesotas Medicaid program), like most state Medicaid programs, requires covered entities to bill at actual acquisition cost (AAC). Under a rebate model, covered entities would not know at the time of claim adjudication whether the AAC is the WAC they paid or the 340B ceiling price they will ultimately realize once a rebate is received. This ambiguity creates a structural compliance problem. Hospitals may bill Medicaid initially at WAC and subsequently be required to rebill once a rebate is received, or they may bill at the 340B price and face compliance exposure if the rebate is denied. In either case, the result is additional administrative work, increased risk of overpayment or underpayment, potential repayment obligations, and fiscal uncertainty for state Medicaid programs. This issue was not adequately addressed in the original pilot notice, and the RFI does not resolve it. The Operational Complexity of a Multi-Manufacturer, Multi-Platform Rebate System Is Severely Underestimated If a rebate model were to proceed, covered entities would be required to interact with separate manufacturer-designated vendors, each potentially operating a distinct platform with its own data specifications, submission windows, error messaging, dispute procedures, and user interfaces. Some manufacturers track at the package level and others at the unit level. Some impose tight look-back windows (such as 45 days) that do not align with how hospitals manage inventory turnover, particularly for low-volume specialty drugs dispensed by CAHs and small community hospitals. The cumulative effect is a fragmented, non-standardized patchwork of incompatible systems that covered entities must maintain, train staff on, audit, and reconcile, not a single integrated rebate process. 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org HRSAs statement in the original pilot notice that rebate claim submission would be minimally impactful because covered entities already submit data to TPAs for contract pharmacy qualification is incorrect. The data required for rebate submission, particularly for physician-administered drugs in hospital outpatient settings, is substantially more extensive than what is submitted today. Physician-administered drug claims are generated through hospital billing cycles that often take weeks to finalize after the drug is administered, and they rely on data fields that are not currently captured in ways compatible with manufacturer rebate portals. Even with a 10-day manufacturer rebate turnaround, covered entities would experience delays of weeks or months between drug acquisition and rebate receipt. Less Burdensome Alternatives Exist and Should Be Pursued MHA urges HRSA to abandon the rebate model approach and instead focus on strengthening the existing upfront discount framework through targeted, less disruptive mechanisms. HRSA should reject the premise that a rebate model is necessary to address Medicaid duplicate discounts or nonduplication under the Medicare Drug Price Negotiation Program (MDPNP). Existing mechanisms, including HRSA's routine audits of covered entities, manufacturers' statutory audit rights, and established state Medicaid deduplication processes, have functioned for decades and have not produced findings that justify a fundamental restructuring of 340B. Any nonduplication questions specific to the MDPNP should be resolved through coordination between HRSA, CMS, and state Medicaid agencies, and should not be used as justification for abandoning a discount model on which Minnesota's safety-net hospitals have reasonably relied for more than thirty years. To the extent HRSA has identified discrete program integrity concerns, those concerns can and should be addressed through targeted oversight and accountability measures within the existing upfront discount framework, rather than through a wholesale shift that imposes significant new costs on every safety-net provider regardless of whether any integrity issue has been documented at that facility. HRSA's existing audit authority, together with manufacturers' statutory audit rights, provides ample tools to verify program integrity without constructing a parallel manufacturer-controlled rebate infrastructure that would impose ongoing costs on covered entities while providing no demonstrated benefit to patients or to the integrity of the 340B Program itself. Conclusion The 340B Drug Pricing Program has operated effectively for more than three decades as an upfront discount program. It directly supports the ability of our member hospitals 161 Rondo Ave, St. 1010 St. Paul, MN 55103 mnhospitals.org and health systems to serve their most vulnerable patients, sustain rural access in communities that would otherwise have no alternative, and to provide services, including medication assistance, MAT, community pharmacy access, and charity care, that would not otherwise be financially viable. A rebate model would shift financial risk from some of the most profitable companies in the American economy onto safety-net providers that are, in many cases, already operating at negative margins. It would impose administrative costs well in excess of any demonstrated program-integrity benefit, and it would do so at a moment when Minnesota hospitals are already absorbing significant regulatory and financial pressures, including changes to the Outpatient Prospective Payment System 340B remedy timeline, the Drug Acquisition Cost Survey, rising labor and supply costs, and escalating manufacturer restrictions on contract pharmacy access. MHA respectfully urges HRSA to conclude, on the basis of this RFI, that a rebate model is not in the interest of covered entities, patients, or the 340B Program itself, and to preserve the upfront discount model that Congress and the Department have successfully implemented for more than thirty years. Thank you for your consideration of these comments. We welcome the opportunity to provide additional information or to discuss the experiences of Minnesota hospitals in further detail. Sincerely, Joe Schindler Vice President, Finance Policy Minnesota Hospital Association
HRSA-2026-0001-2361Adelante Healthcare Inc.2026-04-20T04:00Z84,067 chars
See attached file(s) CENTER SUPPORT OFFICE | 3033 N. Central Ave Suite 145 | Phoenix AZ 85012 P 623.583.3001 | F 602.346.0399 | adelantehealthcare.com Adelante Healthcare is an equal opportunity provider and employer. April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Adelante Healthcare Inc. (AHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Adelante Healthcare Inc. anticipates a loss of $5 million from entity-owned pharmacy operations for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Adelante Healthcare in particular, this means it will impact: Adelante Healthcare has 32,000 unique patients and overall serves over 85,000 patients. Current admin costs for our 340B program are around $4 million. Adelante Healthcare, as required by statute, reinvests all 340B savings directly back into patient care and services for the communities we serve. These savings are critical to sustaining and expanding programs that address the needs of our most vulnerable patients. Through the 340B program, Adelante has been able to expand behavioral health services, increase access to dental care for uninsured patients, and provide a charity prescription program for patients who cannot afford their medicationseven at the reduced 340B price. In our OB/GYN department, 340B savings allow us to support sliding-fee patients throughout their prenatal care and help cover the cost of specialty services when a mother requires additional care but does not have the financial means to access it. Programs like these are only possible because of the savings generated through the 340B program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Adelante Healthcare provided $7,081,948.36 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Adelante Healthcare anticipates needing three additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Adelante Healthcare anticipates an increase of $500,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 For our program to continue operating at the highest compliance level and meet the administrative needs of the rebate model, we will need to hire 3 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and 7 Internal NACHC assessment (99 responses). 8 Ibid. these additional costs are not an option for many entities. There would be an increase of $200,000.00 in salary alone. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 120 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Adelante Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 85,000 patients, the total projected increase in expenses including labor, IT, and carrying costsis estimated at $200,000 to $500,00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend over 120 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 265 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 268 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Maricopa County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Adelantes participation in the 340B program enables our patients to access affordable medications through our sliding scale model. By purchasing medications at the 340B price, we are able to pass those savings directly on to our patients, significantly reducing cost barriers to care. For patients with no income or financial means, we can provide medications at no costan outcome that would not be possible without the 340B program. Transitioning the program to a rebate model would create substantial financial strain on our organization. Under such a structure, Adelante would be required to purchase medications at full Wholesale Acquisition Cost (WAC), effectively fronting the expense with the expectation that manufacturers will reimburse the difference at a later date. This shift introduces significant financial risk, cash flow challenges, and administrative burden, ultimately jeopardizing our ability to sustain critical patient assistance programs and maintain access to affordable medications for our most vulnerable populations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Adelante Healthcare anticipates needing to reduce: Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 23,257 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Adelante Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Adelante Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately above $3 million dollars. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to significantly decrease our days cash on hand and have to take out a line of credit in order to purchase these medications. This is not a sustainable solution; the interest costs alone are estimated to be astronomical funds that are currently dedicated to expanding behavioral health services, increasing access to dental care for uninsured patients, and creating a sexual health program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Adelante Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Adelante Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with the statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Adelante Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Adelante Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Adelante Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amanda Murray Pharmacy Director at amurray@adelantehealthcare.org. Sincerely, Pedro Cons CEO Adelante Healthcare April 16, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Adelante Healthcare Inc. (AHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Adelante Healthcare Inc. anticipates a loss of $5 million from entity-owned pharmacy operations for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Adelante Healthcare in particular, this means it will impact: Adelante Healthcare has 32,000 unique patients and overall serves over 85,000 patients. Current admin costs for our 340B program are around $4 million. Adelante Healthcare, as required by statute, reinvests all 340B savings directly back into patient care and services for the communities we serve. These savings are critical to sustaining and expanding programs that address the needs of our most vulnerable patients. Through the 340B program, Adelante has been able to expand behavioral health services, increase access to dental care for uninsured patients, and provide a charity prescription program for patients who cannot afford their medicationseven at the reduced 340B price. In our OB/GYN department, 340B savings allow us to support sliding-fee patients throughout their prenatal care and help cover the cost of specialty services when a mother requires additional care but does not have the financial means to access it. Programs like these are only possible because of the savings generated through the 340B program. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Adelante Healthcare provided $7,081,948.36 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Adelante Healthcare anticipates needing three additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Adelante Healthcare anticipates an increase of $500,000.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. For our program to continue operating at the highest compliance level and meet the administrative needs of the rebate model, we will need to hire 3 FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. There would be an increase of $200,000.00 in salary alone. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. At least 120 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Adelante Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 85,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 to $500,00 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend over 120 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 265 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 268 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Maricopa County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Adelantes participation in the 340B program enables our patients to access affordable medications through our sliding scale model. By purchasing medications at the 340B price, we are able to pass those savings directly on to our patients, significantly reducing cost barriers to care. For patients with no income or financial means, we can provide medications at no costan outcome that would not be possible without the 340B program. Transitioning the program to a rebate model would create substantial financial strain on our organization. Under such a structure, Adelante would be required to purchase medications at full Wholesale Acquisition Cost (WAC), effectively fronting the expense with the expectation that manufacturers will reimburse the difference at a later date. This shift introduces significant financial risk, cash flow challenges, and administrative burden, ultimately jeopardizing our ability to sustain critical patient assistance programs and maintain access to affordable medications for our most vulnerable populations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Adelante Healthcare anticipates needing to reduce: Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 23,257 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Adelante Healthcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Adelante Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately above $3 million dollars. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to significantly decrease our days cash on hand and have to take out a line of credit in order to purchase these medications. This is not a sustainable solution; the interest costs alone are estimated to be astronomical funds that are currently dedicated to expanding behavioral health services, increasing access to dental care for uninsured patients, and creating a sexual health program. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Adelante Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Adelante Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with the statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Adelante Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Adelante Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Adelante Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Amanda Murray Pharmacy Director at amurray@adelantehealthcare.org. Sincerely, Pedro Cons CEO Adelante Healthcare
HRSA-2026-0001-2362La Clinica2026-04-20T04:00Z43,462 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of La Clinica, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: La Clinica anticipates a loss of $200,000-$300,000 for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. La Clinica is a community health center located in Jackson County, Oregon with 553 employees. We serve over 32,000 patients per year and provide comprehensive primary, behavioral, and dental care. We serve our patients across 31 sites. We offer 2 retail pharmacy locations and mobile healthcare services. Sixty percent of our patients rely on Medicaid, 10% rely on Medicare, and 10% are uninsured. More than half of our patients care considered low income and qualify for sliding-scale discounts. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 2 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For La Clinica in particular, this will cause a shift in cashflow that will directly impact those we serve: Over 32,000 patients annually, including 10% of those patients without insurance Approximately 6,500 prescriptions managed between entity owned and contract pharmacies Ability to allocate 340B savings to critical services and infrastructure such as our mobile healthcare team, safety net programs like sliding scale discounts, pharmacy prescription funds, and access to care through our 31 sites. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: La Clinica provided $7,716,452 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: La Clinica anticipates needing 0.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 5 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 La Clinica estimates an additional $35,000-$50,000 annual expense in FTE cost. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. La Clinica anticipates an additional 10-20 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. La Clinica urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate additional upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. This will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10-20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 12 individual contract pharmacy locations to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 14 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Jackson County, Oregon with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Health centers that participate in the federal 340B Drug Pricing Program help stretch limited federal resources and improve access to affordable medications for underserved populations. Through the program, CHCs are able to purchase outpatient prescription drugs at significantly reduced prices. The savings generated are reinvested directly into patient care, allowing health centers to lower medication costs, reduce or eliminate patient copays, and provide prescription assistance to uninsured and underinsured individuals. As a result, 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 patients are more likely to initiate and adhere to prescribed therapies, leading to improved health outcomes and reduced overall healthcare costs. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an additional $1,429,283 to purchase these 10 drugs under the proposed rebate model. This represents a 54641% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, La Clinica anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,260 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. La Clinica asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, La Clinica estimates its 2027 Annual Rebate Opportunity Cost to be approximately $259, 437. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. La Clinica estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by approximately $120,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to shift critical operational resources to account for cash flow issues caused by the rebate pilot. This is not a sustainable solutionfunds that are currently dedicated to serving vulnerable populations, accounting for known shifts in Medicaid funding, and sustaining our workforce. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely La Clinica, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays La Clinica urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current 11 framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $214,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 13 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion La Clinica strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. La Clinica believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. La Clinica appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Staci Sparks, Medical Operations Officer at ssparks@laclinicahealth.org. Sincerely, Brenda Johnson Chief Executive Officer La Clinca
HRSA-2026-0001-2363Edward M. Kennedy Community Health Center2026-04-20T04:00Z41,020 chars
Please see attached letter April 13, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Edward M. Kennedy Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts. Edward M. Kennedy Community Health Center anticipates a loss of over $100,000 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation along with increased inventory carrying costs. The mission of Edward M. Kennedy Community Health Center is to help people live healthier lives. We believe that everyone has a right to accessible, high quality, comprehensive, integrated and compassionate health care. As a federally qualified community health center, Edward M. Kennedy Community Health Center provides comprehensive care to its patients, who are at disparate risk for chronic disease and poor health outcomes. Currently over 34,000 patients receive care from Edward M. Kennedy Community Health Center annually. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Edward M. Kennedy Community Health Center in particular, this means it will impact: 3,076 prescriptions / 340B transactions annually An additional $100,000 in administrative, operational, and inventory costs Impaired ability to support access to fund care for underinsured / uninsured patients We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Edward M. Kennedy Community Health Center provides sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Edward M. Kennedy Community Health Center anticipates needing at least one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Edward M. Kennedy Community Health Center anticipates an increase of $30,000 annually to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project 5 needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Edward M. Kennedy Community Health Center currently estimates this need to be at least 1 FTE to support these functions. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Edward M. Kennedy Community Health Center estimates at least an additional $60,000 in staffing costs to support program compliance Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Edward M. Kennedy Community Health Center estimates 40 hours per week will be required to report, track, and reconcile 340B rebate claims through a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Edward M. Kennedy Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff will be forced to spend an estimated 15 to 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full 9 Internal NACHC survey data 7 WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $655,653 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $62,250 per year to purchase these same drugs at the 340B ceiling price. This represents over a 1,000% increase in up front capital required for procurement., This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Edward M. Kennedy Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our clinical pharmacy program that provides medication therapy management (MTM) program for patients with chronic disease states and complex medication regimens. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a role such a a full-time Community Health Worker. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Edward M. Kennedy Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. Edward M. Kennedy Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $54,638. These figures will continue to increase dramatically if the rebate program is expanded to include 2027 and 2028 MFP drugs in the future. 10 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Edward M. Kennedy Community Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $32,785. This represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. 12 VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Edward M. Kennedy Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Edward M. Kennedy Community Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. 13 Edward M. Kennedy Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ruby Pezanetti, COO, at (508) 270-5751 ext. 1430 or ruby.pezanetti@kennedychc.org. Sincerely, Ruby Pezanetti, Chief Operating Officer Edward M. Kennedy Community Health Center
HRSA-2026-0001-2364Los Angeles LGBT Center2026-04-20T04:00Z43,700 chars
Please see attached. 1 April 20, 2026 SUBMITTED ELECTRONICALLY VIA WWW.REGULATIONS.GOV Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: The Los Angeles LGBT Center takes this opportunity to comment in response to the Health Resources and Services Administration (HRSA) Request for Information on its Proposed 340B Model Pilot Program. As an initial matter, the Center would like to thank HRSA for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a thorough analysis of the operational and financial risks to community health centers (CHCs) posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from the National Association of Community Health Centers (NACHC), we know that CHCs are facing staggering impacts: Financial Losses: The Los Angeles LGBT Center anticipates a loss of $668,800 annually from entity-owned pharmacy operations and as yet unknown losses from contract pharmacies who may be unwilling to participate in the 340B program under a rebate pilot and/or change the contract terms. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Since 1969, the Center has cared for, championed, and celebrated LGBT individuals and families in Los Angeles and beyond. Today the Centers over 800 employees provide services for more LGBT people than any other organization in the world. The Center is one of the few FQHCs in the nation with providers who specialize in primary care, HIV/AIDS specialty care, womens care through the Audre Lorde Health Program, and trans specific care through the Trans Wellness Center. In addition, the Center covers a broad range of other services including, but not limited to, mental health, substance abuse, and housing navigation. Across all our programs, 2 we see over 50,000 clients per month; or, over half a million visits each year. In this moment, the need for our services has never been greater. I. We Strongly Urge HRSA to Exempt CHCs and RWCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to the core mission of CHCs and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us, including the 15,600 patients we see annually at the Los Angeles LGBT Center. The proposed 340B Rebate Model Pilot Program will have significant financial repercussions for our administrative costs and ability to continue delivering critical care and services. In 2025, the Center handled over 239,000 340B qualified prescriptions and administrations. The revenue we generated from those discounts went towards ensuring low- and no-cost access to our behavioral health, substance use, and case management and navigation programs. Moreover, for Ryan White clinics (RWCs) and other HIV care providers in particular, the impacts of the proposed rebate model will compound dramatically once the first HIV medication, Biktarvy, is added to the Medicare Drug Price Negotiation Program (MDPNP) in 2028. As an RWC, the Center is one of the nations few CHCs with providers who specialize in primary care for LGBT people and those living with HIV. The addition of this single HIV medication will increase drug costs to the Center by $2.2M in 2028, which is three times as much as all the other MDPNP drugs for that year combined due to the high costs of these drugs as set by the manufacturer. RWCs, like the Center, are dedicated to caring for low-income and vulnerable patients living with HIV/AIDS. As such, RWCs treat a high concentration of patients for a single disease stateHIVa disease state for which there are only a limited number of medications and therapies available for prevention and treatment. A rebate model for HIV medications can have an outsized impact on both patient and RWC because such a large percentage of patients take each individual drug. There is much lower variability in HIV treatment options compared to other disease states while the cost burden of treating HIV positive patients is often much higher. We believe it is not the intention of HRSA to disproportionately impact Ryan White clinics and other HIV providers in such a manner, and so recommend excluding RWCs or HIV medications from the 340B rebate pilot to avoid devasting the HIV safety net and reversing decades of progress towards ending the HIV epidemic. We strongly urge HRSA to exempt CHCs and RWCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs and RWCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost 3 or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC and RWC patients will be disproportionately affected. CHCs, and RWCs in particular, serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. For RWC patients, in particular, a rebate models impact on access to HIV medication would be devastating. Studies show that single tablet regimen improve patient outcomes through treatment retention and viral suppression, compared with patients taking multiple pills.2 Biktarvy is the only single tablet regimen included among the national HIV treatment guidelines3 list of recommended initial treatment regimens. HIV patients have limited options for treatment, and as a result, are uniquely and disproportionately impacted by any changes in accessibility for drugs and therapies. Adherence to prescribed treatment regimens is an essential component of controlling the HIV/AIDS epidemic, and efforts to encourage patient adherence are significantly compromised if individuals living with HIV/AIDS do not have consistent and convenient access to the prescription drugs they need. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. For RWCs and other HIV care providers, in particular, the 340B program allows us to stretch our scarce resources to support the full continuum of care that our patients require, including testing, linkage to care, treatment, retention, case management, and medication adherenceat no cost to taxpayers. RWCs have made tremendous strides towards controlling the AIDS epidemic in the U.S. Our success is due in large part to the support we receive from the 340B program, and implementation of the proposed rebate model would set back this nations fight to end the AIDS epidemic. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate 1 Richard P, et al. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan- Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Hemmige V, et al. Single tablet HIV regimens facilitate virologic suppression and retention in care among treatment nave patients. AIDS Care. 2018 Aug;30(8):1017-1024. doi: 10.1080/09540121.2018.1442554. Epub 2018 Feb 25. PMID: 29478329; PMCID: PMC6094383. Cotte L, et al. Effectiveness and tolerance of single tablet versus once daily multiple tablet regimens as first-line antiretroviral therapy - Results from a large french multicenter cohort study. PLoS One. 2017 Feb 2;12(2):e0170661. doi: 10.1371/journal.pone.0170661. PMID: 28152047; PMCID: PMC5289500. 3 Clinicalinfo.HIV.gov, Guidelines for the Use of Antiretroviral Agents in Adults and Adolescents With HIV, Sept. 12, 2024, https://clinicalinfo.hiv.gov/en/guidelines/hiv-clinical-guidelines-adult-and-adolescent-arv/what-start-initial-combination- regimens. 4 requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description. To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic-administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, the Los Angeles LGBT Center provided $829,000 in sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: The Center anticipates needing to double its full-time equivalent (FTE) capacity to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, we anticipate an increase of over $70,000 to annual costs for external support vendors, including 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 FTE, 36% estimate needing 1 to 2 FTEs, and 7% project needing more than 2 FTEs to meet the anticipated demand of reporting 340B rebate claims.4 For the Center, this more than doubles the amount of FTE time needed for 340B compliancefrom 0.27 FTE to 0.54 FTE, adding approximately 12 additional hours a week across all existing staff currently dedicated to 340B. Depending on the volume of prescriptions a pharmacy fills for selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Because Biktarvy, the first HIV medication being added to the MDPNP, makes up such a large percentage of the Centers entity owned pharmacy prescription dispensations, the Center will need to hire an external company to analyze and submit the data for a rebate pilot at a cost of over $26,000 annually. The Center pharmacy fills over 100 orders of Biktarvy every day, not including all the other MDPNP drugs. About 20% of all patients at the in-house pharmacy are prescribed Biktarvy because there are only three complete HIV regimens recommended at the highest tier 4 Internal NACHC assessment (99 responses). 5 on the Department of Health and Human Services (HHS) HIV guidelines. The Center would need to hire multiple staff to fulfill the reporting obligations for the rebate pilot drugs once Biktarvy is added in 2028, which is not feasible due to space and monetary constraints. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. The Los Angeles LGBT Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes. Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. The Center estimates $11,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For the Center, which serves 15,600 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $110,000 annually. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about a CHCs ability to offer sliding-fee discounts at the point of purchase. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.5 In line with their mission, CHCs offer flat 5 HRSA, 340B Drug Pricing Program, FAQ, https://www.hrsa.gov/opa/faqs?categories=All&keywords=. 6 or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.6 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. For the Los Angeles LGBT Center, we offer medications to low-income patients at the 340B cost plus a minimal dispensing fee, and we also provide steeply reduced medical visit and lab costs. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed our credit limits with wholesalers, halting our ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs, like the Center, have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).7 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de- duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description. To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B8 and WAC pricing 6 Such discounts are subject to potential legal and contractual restrictions. HRSA Health Center Program, Health Center Program Compliance Manual, Chapter 9: Sliding Fee Discount Program (Nov. 2025), https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10. 7 Enliven Health, Year-End Business Health Check: Key Metrics Every Pharmacy Owner Should Review (Dec. 3, 2025), https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review. 8 Available at https://340bpricing.hrsa.gov/. 7 data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. 9 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate that in 2026, it would require an additional cost of $50,300 to purchase these 10 drugs under the proposed rebate model. For the Center, the most dramatic impact will come in 2028, once Biktarvywhich is dispensed to 20% of all patients using our entity owned pharmacyis included in the MDPNP. At that stage, our increased upfront annual cost would rise to a staggering $2.9 million, an increase of $2.6 million over 2027 levels. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, The Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services by reducing staffing across our programs, limiting operating clinic hours, or closing clinic sites. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support for uninsured patients, who make up 7% of the Centers patient population, which is critical to maintaining basic preventive care, and without which could result in patients rationing medication like insulin or heart medication or dropping out of care entirely. 9 Available at https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices- statutezip.zip. 8 B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead covered entities to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. The Los Angeles LGBT Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, we are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on our drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose our exact prompt-pay discount. However, the Center estimates its 2028 Annual Rebate Opportunity Cost to be approximately $669,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. For example, during the 2022 outbreak of MPOX, the Center was able to utilize 340B revenue to rapidly mobilize to obtain and begin administering vaccines to the community a full month before reimbursements became available. Within the first few weeks of the outbreak, we were administering about 20% of all vaccines across Los Angeles County. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain our drug supply creates an environment of clinical instability, and the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that 34 million CHC patients across the country depend on. 1. Financial Impact of Rebate Denials and Delays The Los Angeles LGBT Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, 9 such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.10 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of selected drugs, even a conservative 15% denial rate would result in a net annual loss of $7,700 in 2026, rising to $669,000 in 2028. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. As we discuss further below, this presents unique challenges for CHCs, like the Center, in California. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. 2. Potential Duplicate Discounts for ADAP-Eligible Drugs Contrary to its explicit purpose of preventing duplicate discounts, the proposed rebate model could also exacerbate the risk of duplicate discounts for HIV medications eligible for AIDS Drug Assistance Program (ADAP) reimbursements. The proposed rebate model would require CHCs to pay full WAC for ADAP- eligible drugs before seeking billing reimbursement from ADAP. Presently, upon receipt of a reimbursement request for full-price drugs, ADAP submits to the manufacturer for a rebate, therefore increasing the risk for duplicate discounts. Should HRSA move forward with this proposed rebate model and decide not to exempt RWCs, ADAP grantees would need to develop a new process to avoid these duplicate discounts. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate-based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claim-level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10-day payment requirement, that requirement must run from both the initial 10 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163), https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the- 340b-rebate-model-pilot-program. 10 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer-defined patient eligibility standards or undisclosed validation criteria; and Office of Pharmacy Affairs (OPA) should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% FPL. These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for covered entities by preserving the upfront 340B discount. 11 Substantially reduce administrative burden on covered entities by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and covered entities must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting covered entities 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. VII. California Case Study: State Medicaid Implementation Will Compound the Harms of the Rebate Model The rebate model does not exist in isolationit will be interpreted and operationalized by state Medicaid agencies in ways that HRSA cannot control. California provides a concrete example of how state-level implementation guidance can multiply the burdens on CHCs far beyond what the federal pilot alone would impose. When HRSA previously proposed the rebate pilot, Californias Department of Health Care Services (DHCS) issued guidance for Californias Medicaid Pharmacy Program, Medi-Cal Rx, requiring pharmacies to delay Medi-Cal billing until after manufacturer rebate reconciliation is complete. This means a CHC dispensing a rebate-model drug to a Medi-Cal patient would have to: purchase at WAC, dispense the drug, submit data to the rebate administrator (Beacon), receive the rebate, and only then submit a retroactive Medi-Cal claimwith a required return to the Beacon platform to reconcile records. A single prescription becomes a five-step, multi-system process. This approach creates three serious, compounding harms for CHCs: Patient safety risks: Medi-Cal Rx real-time adjudication performs critical safety checks at the point of dispensingeligibility verification, prior authorization, drug utilization review, and duplicate therapy screening. Delaying billing bypasses these safeguards entirely. Medications could be dispensed to patients who are ineligible, have a coverage conflict, or receive a duplicate fill at another pharmacywith no real-time safety net to catch it. Unsustainable upfront cost burden: The rebate model already forces CHCs to carry the full WAC cost upfrontbut Californias multi-step billing process extended that carrying period significantly. Because Medi-Cal reimbursement cannot be submitted until after the rebate is received from Beacon, CHCs would need to finance WAC purchases through the entire sequence: 12 dispensing, Beacon data submission, rebate receipt, retroactive Medi-Cal billing, and final reconciliation. For specialty drugs that can exceed $10,000 per unit, this is not a minor cash flow inconvenienceit is a structural financial burden. CHCs already operate on a national average margin of negative two percent (-2%). Requiring these providers to front escalating WAC costs for extended periods, with no guarantee of timely or full reimbursement, is financially unsustainable. Unsustainable administrative burden: CHCs must manually track claims across multiple systems and stagesinterim cash claims, Beacon submissions, rebate receipts, retroactive Medi-Cal rebilling, and Beacon reconciliationall within DHCSs six-month timely filing window. For CHCs without sophisticated technology platforms, this is entirely manual work and creates significant risk of missed deadlines, lost reimbursement, and audit exposure. If the rebate model moves forward, CHCs in states that adopt guidance like Californias will face a cascade of additional harms beyond their control. HRSA must take these compounding harms into consideration. VIII. Conclusion The Los Angeles LGBT Center strongly urges HRSA to exempt CHCs and RWCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. The Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. The Los Angeles LGBT Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this important issue. If you have any questions, please contact Jennifer Chou, Health Policy Director, at jennifer.chou@lalgbtcenter.org. Sincerely, Terra Russell-Slavin Chief Strategy Officer Los Angeles LGBT Center
HRSA-2026-0001-2365Dignity Health Inland Empire2026-04-20T04:00Z5,072 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Community Hospital of San Bernardino and St. Bernardine Medical Center, members of CommonSpirit Health, appreciate the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on our two Inland Empire hospitals that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Both Community Hospital of San Bernardino and St. Bernardine Medical Center rely upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter most our patients. As nonprofit entities, we see a large number of low-income, uninsured, and under-insured patients in our facility. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up- front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Dan Murphy Vice President and CPO
HRSA-2026-0001-2366Teresa Decker · Lakeview, OR, United States2026-04-20T04:00Z3,517 chars
The HRSA Rebate Model creates an undo burden for Critical Access Hospitals (CAH). The Rebate Model program is a shift in the intent of the 340B program. The 340B program was designed to provide immediate upfront discounts to help safety-net providers stretch scarce resources. A rebate model shifts the administrative burden and financial risk from drug manufacturers to covered entities. Most CAH have one to two pharmacists and two to three technicians. Our 25 bed hospital has one pharmacist and two technicians. The rebate model is very complex and will increase operating costs as it will require hiring additional staff and it will cause a disruption in our cash flow. Administrative Burden Our Third Party Administrator cannot currently ingest medical claims data. We will need to evaluate a new 340B Third Party Administrator (TPA) which will take many days and the cost of the TPA administrator will increase. Ninety percent of the software vendors do not link the medical claims data with an invoice so this is almost, a universal problem. Invoice data needs to be manually entered which takes additional staff hours. Switching IT infrastructure will take additional training of IT and pharmacy staff. Data submission is complex and reconciling claims across multiple third-party platforms (TPAs) is difficult. There is the risk of forfeited savings due to missing or delayed data. Managing rebate denials will require detailed documentation and manual review. We expect that we will need to hire an additional full-time pharmacy technician to submit and track claims and to dispute denials and make sure that our program remains in compliance. Cash Flow Our hospital will experience a strain on our cash flow. We will have to pay significantly higher list prices upfront and wait for rebates, which could take 6090 days if involving contract pharmacies. Requiring upfront payment of higher prices will create significant cash flow shortages which may require loans to continue to serve our vulnerable population. Payments will be delayed as a rebate system risks "pricing denials" by manufacturers, forcing our hospital pharmacy staff into lengthy dispute resolutions just to receive the 340B savings we are legally entitled to. RxPardigm published in the 340B Report details about how the Medicare Maximum Fair Price (MFP) program is not working well. They studied January 2026 claims processing and found that only 60% were processed correctly and 40% were processed incorrectly. 40% of MFP claims were processed incorrectly. 10% of total claims that qualified for MFP payment were incorrectly rejected after being misidentified as 340B The average dollar value per incorrectly rejected claim was $1,088. This creates material financial exposure and cash -flow disruption for pharmacies and covered entities. 30% of total claims experienced duplicate payments, in which manufacturers paid both MFP and 340B pricing on the same transaction. The average dollar value per duplicate payment was $398, representing meaningful overpayment exposure for manufacturers. The 340B Rebate Program must run more smoothly than the MFP program! If the 340B Rebate Pilot Program proceeds, there must be strict requirements so that manufacturers provide upfront documentation, adhere to payment timelines such as 30 days, and have an efficient and effective dispute resolution process. A government allowance to assist hospitals with the administrative burden might also be considered.
HRSA-2026-0001-2367Hall Render2026-04-20T04:00Z191,817 chars
Please see the attached comment from the Hall Render Pharmacy & 340B Collaborative Hall, Render, Killian, Heath & Lyman, P.C. 330 East Kilbourn Avenue, Suite 1250 Milwaukee, WI 53202 https://www.hallrender.com Todd A. Nova (414) 721-0464 tnova@hallrender.com T. James Junger (414) 721-0922 jjunger@hallrender.com April 20, 2026 Via Online Submission to www.Regulations.gov Chantelle V. Britton, M.P.A, M.S. Director Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: We write you on behalf of the Hall Render Pharmacy & 340B Collaborative (340B Collaborative). The 340B Collaborative is comprised of more than 100 independent hospitals, health systems, and grantee networks with thousands of 340B Covered Entity (Covered Entities) locations across the country. We thank you for the opportunity to comment on HRSAs Request for Information1 (RFI) regarding a 340B Rebate Model Program (340B Rebate Model or Rebate Model). You may have received letters responding to the RFI from many 340B Collaborative members. Those letters asked important questions that HRSA must consider related to a Rebate Model. If HRSA publishes a Rebate Model proposal after considering the responses to the RFI, we hope the proposal will meaningfully address those questions. This letter addresses legal and policy-driven concerns with a 340B Rebate Model. It also provides HRSA with new materials to contribute to its deliberations and that must be considered when evaluating compliance with Administrative Procedure Act and other requirements related to federal agency actions. Those materials include: 1. A report by Dr. Charles Courtemanche, Professor of Economics and Director of the Institute for the Study of Free Enterprise at the Gatton College of Business and Economics, University of Kentucky. Dr. Courtemanche is leading the way on developing an 1 91 Fed. Reg. 7287 (Feb. 17, 2026). April 20, 2026 Page 2 2 academically rigorous body of work evaluating the 340B Program, having recently published What Economists Should Know about the 340B Drug Discounting Program.2 The enclosed report, which Dr. Courtemanche prepared with support from a research grant from the Kentucky Hospital Association and a consulting agreement with Hall Render, makes several surprising, evidence-based conclusions regarding the costs and benefits of a 340B Rebate Model. Dr. Courtemanches report, entitled 340B Data from the ESP and Beacon Platforms Holds Considerable Value for Drug Manufacturers (Courtemanche Study) is enclosed as Attachment 1. 2. A list of papers, reports, and other works published by Berkeley Research Group (BRG) funded by the Pharmaceutical Research and Manufacturers of America (PhRMA). We identified sixteen such publications. Notably, half of these materials were published since August 2024, when manufacturers announced their plans to use the Beacon platform to impose a 340B rebate model without HRSAs authorization. This shows that BRGs interests are clearly conflicted and entangled with drug manufacturers, and both have a clear financial interest in convincing HHS to approve a 340B Rebate Model. This list is enclosed as Attachment 2. 3. A letter that we sent to CMS on April 20, 2026, disclosing what we believe to be widespread violations of manufacturers confidentiality obligations under their Medicare Drug Price Negotiation Program Data Module Agreements with CMS. As stated in the letter, BRG recently published a study demonstrating that it has accessed and used CMS Data in a way that we believe is unlawful and sanctionable. This letter is enclosed as Attachment 3. 4. A summary of our clients responses to many of the questions posed in HRSAs RFI. Although HRSA made a confidential submission option available to stakeholders, we understand that those procedures were intended to address Freedom of Information Act requests. As you are aware, many Covered Entities have been subpoenaed by drug manufacturers challenging states contract pharmacy protection laws. HRSA cannot control whether manufacturers subpoena materials in its possession, and many Collaborative members preferred to provide their responses in an aggregated manner. Unlike with HRSAs 2025 proposal, Collaborative members now have lived through a pseudo-rebate model in the Beacon MFP platform. The data in this report demonstrates that Collaborative members anticipate a 340B Rebate Model would lead to a wide and material array of increased drug, personnel, and vendor costs. This report is enclosed as Attachment 4. If HRSA would like access to the (anonymized) raw data, please contact us. Each attachment informs the positions we take in this letter. We understand that our RFI response is detailed, as this level of detail is essential for HHS to understand the Covered Entity perspective and experience regarding rebates in the 340B Program. This is particularly important given the 2 Courtemanche, C., and J. Garuccio. 2026. What Economists Should Know About the 340B Drug Discounting Program. Journal of Economic Surveys. https://doi.org/10.1111/joes.70076. April 20, 2026 Page 3 3 relentless and widespread efforts by PhRMA to (in some ways, successfully) wrest control of the 340B Program from HRSA through lobbying and litigation. For instance, Prof. Courtemanches work demonstrates that a manufacturer-controlled Rebate Model like the one proposed in 2025 would be akin to the fox guarding the henhouse. It would be the next step in PhRMAs efforts to attempt to continue to reap the benefits of federal coverage of their products through Medicare and Medicaid without supporting the healthcare safety net as Congress intended. It is important that HRSA consider and address these clear, measurable costs as it evaluates a Rebate Model. This is not a dispute over transparency. Collaborative members acknowledge that the 340B Program is complex, which can make it seem opaque, so they fully support efforts to reduce complexity and increase stakeholder confidence. Rather, this dispute is about control. HHS must consider, and should adopt, less disruptive mechanisms to address legitimate concerns about maximum fair price (MFP) and Medicaid rebate deduplication. We have shared those suggestions with HRSA in prior communications.3 In comparison, a Rebate Model would be disproportionately disruptive to the 340B Programs intent. In light of Federal law requiring HHS to interrogate both the costs and benefits of a Rebate Model as well as address reliance interests before deciding which policy to implement,4 this letter proceeds as follows. First, we discuss the 2025 Rebate Model proposal, including procedural and substantive deficiencies that we believe should be remedied in any future model. Next, we explain why conditions for Covered Entities have only worsened since the introduction of the 2025 rebate model. We then identify key concerns that should form the contours of any future Rebate Model. Next, we identify reasonable alternatives to a Rebate Model that could address legitimate concerns about MFP and drug rebate deduplication with minimal 340B Program disruption. Finally, we respond to a number of the questions that HRSA posed in the RFI. The Collaboratives concerns are offered to assist HRSA in developing a complete administrative record regarding the legal and operational realities facing Covered Entities. We appreciate the extra time that HRSA is taking to examine this issue anew. Ultimately, our position remains simple: While Covered Entities are supportive of increasing transparency and of efforts to reduce complexity in the 340B Program, a 340B Rebate Model is unwise, unnecessary, and unlawful. I. Any Rebate Model Must Be Substantially Different from the 2025 Proposal While HRSAs current RFI does not propose a specific Rebate Model, our understanding of how such a model would operate is informed by the rebate pilot proposed in August 2025 (2025 Rebate Pilot).5 That framework contemplated a fundamental and broad-based shift from the 340B Programs longstanding upfront-discount structure to a post-sale reimbursement model, under which Covered Entities would float costs by purchasing drugs at a higher initial price and 3 See, e.g. HHS Docket No. HRSA-2025-14619; Application Process for the 340B Rebate Model Pilot Program, HALL RENDER PHARMACY & 340B LEGAL COLLABORATIVE (Sept. 8, 2025). 4 Dept of Homeland Security v. Regents of the Univ. of Cal., 590 U.S. 1, 30-31. 5 See generally 340B Rebate Model Pilot Program Application Notice, 90 Fed. Reg. 38,165 (Aug. 7, 2025). April 20, 2026 Page 4 4 subsequently request rebates reflecting the 340B price. Worse, relied on claims-level data submissions to a manufacturer-selected vendor and manufacturer-operated retrospective validation processes. Although HRSA has not formally reintroduced that model here, it represents the most concrete and recent example of how a rebate-based approach could function in practice. Furthermore, context surrounding the RFI strongly suggests that any subsequent Rebate Model could be materially similar. When HRSA proposed the rebate model in 2025, Hall Render also submitted a comment with many of the concerns below that the agency did not answer or consider. Thankfully, the courts prohibited HHS from moving forward with its proposal. While those decisions were founded on procedural errors, the substance of the 2025 proposal was fundamentally flawed. A. The 2025 Rebate Pilot Placed Enormous Burden on Covered Entities After HRSA originally proposed its Rebate Model Pilot Program, it disclosed that the estimated annualized cost to Covered Entitiessafety-net hospitals, rural health clinics, and community health centerswould have been over $200 million, with more than 1.5 million hours of pharmacist labor required to comply with the rebate models data submission requirements.6 By comparison, since 2016, HRSA has awarded less than $50 million in grants to support Hemophilia Treatment Centers.7 This staggering disparityfour decades of HTC funding equaling one year of Rebate Model costsillustrates the absurdity of the 2025 Rebate Pilot. As it considers whether to implement a Rebate Model, HRSA must consider it alongside judicial interpretations of the 340B Statute and its own overcharge regulations. In Novartis Pharmaceuticals Corp. v. Johnson, the court acknowledged that manufacturer-imposed conditions may be onerous enough to effectively increase the contract price, thus perhaps nudging it above the statutory ceiling.8 If HRSA were to follow the 2025 Rebate Pilot and permit manufacturers not Covered Entitiesto opt-in to rebate models, it must identify methods through which those manufacturers will be held responsible for Covered Entities material related costs. This is not a theoretical question. The costs associated with complying with varied, opaque, and often inaccurate manufacturer data submission requirements (such as via BRGs Second Sight platforms) are significant. Without these measures, and without charging less than the 340B ceiling price, manufacturers will overcharge Covered Entities for covered outpatient drugs in contravention of HRSAs own 6 See Health Resources & Services Administration, 340B rebate Model Pilot Program Application, Implementation, and Evaluation Supporting Statement, at 6 (last accessed Sept. 6, 2025) (Indicating an Estimated Annualized Burden Costs to Respondents of $200,467,392 and Total Estimated Burden Hours of 1,518,760.). 7 Analysis of HRSA Grants Dashboard Data, available at https://data.hrsa.gov/DataDownload/DD_Files/GRANTS_DASHBOARD.xlsx (last accessed Apr. 17, 2026). 8 Novartis Pharmaceuticals Corp. v. Johnson, 102 F.4th 452, 462 (D.D.C. 2024). April 20, 2026 Page 5 5 regulations related to 340B overcharges.9 We raised this concern in our 2025 comment. That concern went unanswered, and we reiterate it here. B. The 2025 Rebate Pilot and Recent Experience Show That HRSA Must Control for Conflicts of Interest 1. Any Rebate Model Must Require Disclosure of and Control Over Financial Relationships Between Manufacturers and Their Intermediaries Under the 2025 Rebate Pilot, all 340B Covered Entities were required to submit their patients medical and pharmacy data to the Beacon web-based platform operated by Second Sight Solutions, LLC (Second Sight), a for-profit subsidiary of BRG.10 BRG has long served as a mouthpiece for the drug industry, routinely publishing studies and reports funded by PhRMA, the drug industrys main lobbying organization. As noted above, we know of at least 16 such publications, listed on Attachment 2. The relationships between BRG and Second Sight on one hand, and PhRMA and drug manufacturers on the other, cause substantial harm to Covered Entities. While a parent-subsidiary relationship does not necessarily imply aligned motives, it is clear that BRG and Second Sight operate as one in the same entity. For instance, earlier this month, BRG published a report wherein it analyzed data extracted from Second Sights Beacon MFP platform. It appears that CMS was the original source of this data, and Second Sight took it subject to confidentiality agreements between CMS and the MFP-participating manufacturers, then improperly disclosed it to BRG. BRG used that data to publish a study meant to influence public opinion in manufacturers favor. We have disclosed this incident to CMS, and a copy of the disclosure letter is enclosed as Attachment 3. Notably, BRGs work in this area goes beyond simple authorship to active promotion. Shortly after publication, well-connected BRG employees promoted this study via LinkedIn, with the original post from Mr. Andrew Brownlee being reshared by 17 other people, 15 of whom are BRG employees according to their LinkedIn profiles.11 The relationship between BRG and Second Sight Solutions presents a substantial conflict of interest. HRSA must develop meaningful controls for such conflicts to ensure that the 340B 9 42 C.F.R. 10.11. 10 See S. Young, Second Sight Solutions Parent Company Targeted in Cyber Attack, Firm Says 340B Platforms Do Not Appear to Have Been Affected. 340B Report (Mar. 27, 2025). Available behind paywall at https://340breport.com/second-sight-solutions-parent-company-targeted-in-cyber-attack-firm-says-340b-platforms- do-not-appear-to-have-been-affected/. 11 Andrew Brownlee, New release from our colleague, Ellie Blalock highlighting some first hand insights from operating the Beacon MFP platform over the course of 1st quarter of MFP Refund requests from CMS. Highlights: - On average, pharmacies receive MFP rebates within 21 days from the date of dispense. - Fewer than 0.5% of MFP claims have been self-identified as 340B by the pharmacy. - MFP/340B duplicate discount risk is $5.2 billion for 2027, of which only $.3B will be addressed through pharmacy self-identification. Apr. 2026. LinkedIn post available at https://www.linkedin.com/feed/update/urn:li:activity:7445890957444632576. April 20, 2026 Page 6 6 Program does not become subject to capture by manufacturers. These controls must be thorough and examine all aspects of the relationships between manufacturers, their vendors, and Covered Entities. For instance, Second Sight has already capitalized on its position as a 340B pricing gatekeeper. For Covered Entity users, Second Sights platforms are only available under unfair, non-negotiable terms designed to benefit BRG/Second Sight and their manufacturer clients and improperly shift risk to Covered Entities.12 As an example, the 340B ESP terms ostensibly limit Second Sights liability to $100,13 and the Beacon 340B Rebate platform terms prohibit Covered Entities from bringing claims on a collective basisa right specifically favored by Congress.14 Based on our observations of the industry, we suspect that manufacturers agents such as Second Sight, IQVIA, and Kalderosas well as manufacturers own employeesare paid a commission based on the number of 340B discounts/rebates that the manufacturer withholds or recovers. Such a relationship clearly aligns the incentives between manufacturers and their agents but does so against the public interest. Aligned incentives such as these are the exact harm that is prohibited under the Anti-Kickback Statute. The only difference is that Covered Entities sit between manufacturers and the Federal healthcare programs that pay for their drugs. If it moves forward with a Rebate Model, HRSA should prohibit commission-based or similar payment arrangements between manufacturers and any intermediary. 2. Manufacturers Conflicts of Interest Are Insurmountable in a Manufacturer-Directed Rebate Model In the attached report, Prof. Courtemanches ultimate conclusion is that the government, not manufacturers, must operate a Rebate Model.15 This conclusion flows from several premises. First, manufacturers have admitted that they use Second Sights systems for more than just Medicaid deduplication.16 For instance, Eli Lilly recently stated, Among other things, this basic claims data [obtained through 340B ESP] permitted us to identify countless instances of Medicaid duplicate 12 Hall Render and others have affirmatively informed HRSA of these concerns through correspondence and formal notice and comment processes. See, e.g., Letter from Todd A. Nova to Chantelle V. Britton (December 4, 2025) (Receipt confirmed December 5, 2025; No response received); see also Hall Render Pharmacy & 340B Collaborative Response to HRSAs Request for Public Comment re 340B Program Notice, Application Process for the 340B Rebate Model Pilot Program (Sept. 8, 2025), pp. 11-12. The 2025 Rebate Pilot demonstrated that, without oversight or input from HRSA, manufacturers intend to condition access to statutorily mandated 340B pricing on participation in third-party platforms including Beacon and corresponding acceptance of unreasonable, non-negotiable terms that require covered entities to agree in writing to waive legal rights and assume non-standard legal, operational, business, and data-governance risks untethered to any demonstrated diversion or duplicate-discount concern. HRSA did not respond to these concerns in implementing the 2025 Rebate Pilot. It must do so now. 13 340B ESP Terms of Use (https://340besp.com/terms-of-use) (last accessed Apr. 17, 2026). 14 See 42 U.S.C. 256b(d)(3)(B)(vi) (requiring that HRSA allow Covered Entities to bring joint claims through the 340B ADR process). 15 Courtemanche Study, pp. 33-34. 16 Courtemanche Study, pp. 10-13. April 20, 2026 Page 7 7 discounts. (emphasis added). Prof. Courtemanche argues that from this statement, it is clear that manufacturers are not just using 340B ESP to address legally prohibited duplicate discounts; they also admit that this data brings profits through other methods. He positswith evidencethat such other methods include withholding compliant discounts, targeting physicians for marketing efforts, lobbying for federal and state legislation, and (for Second Sight) selling Covered Entities data to other marketplace researchers. He also reaches the common-sense conclusion that in a manufacturer-directed Rebate Model, manufacturers would be in a position very similar to an insurance company, with the power to endlessly delay and deny claims regardless of how opaque that determination process may be.17 Based on data from the Kaiser Family Foundation, insurers deny about 19% of all claims, with about 45.5% of these claims denied for administrative or other as the primary factor in denial. If manufacturers were to deny Covered Entities 340B claims at a similar rate, they would find windfall gains of $7 billion, even just from data collected through 340B ESP.18 Further, much like insurance companies, platforms such as 340B ESP and Beacon determine whether a claim is sufficient based on their own (or manufacturers) policies rather than the law itself. Per 340B ESPs Terms of Use, the ESP system is used for the purpose of identifying Ineligible Rebates and evaluating compliance with Participating Pharmaceutical Manufacturer policies.19 It is clear through these terms, manufacturers have the power to shift their standards for a 340B-eligible claim rapidly and unilaterally. Neither Covered Entities nor HRSA currently have tools to curb these efforts, and HRSA should decline to adopt a model that legitimizes this power. A manufacturer-directed Rebate Model would not create a more transparent system, just a more inequitable one. C. The 2025 Rebate Pilot Was Not Meaningfully Different from Manufacturers Unilateral Rebate Models Finally, HHSs change in positions must be addressed. In 2024, HRSA secured an important victory when it successfully resisted manufacturers attempts to launch unauthorized rebate models. HRSAs actions survived review by two judges in the D.C. District Court, and its position stands on solid statutory footing. In those lawsuits, HHS described the harms that could befall safety-net providers and the patients who rely on them if the manufacturers rebate models were allowed to proceed. Those arguments were persuasive both before the D.C. District and other Federal courts. The 2025 Rebate Pilot was almost identical to the manufacturers enjoined models. This alone is cause for concern, as it shows that HHS may simply have picked a side rather than exercising its independent judgment. Further, it is black-letter law that agencies actions may not be arbitrary or capricious. To survive judicial scrutiny, an agency must offer a satisfactory explanation for its 17 See Courtemanche Study, p. 18. 18 Id. 19 340B ESP Covered Entity Portal Terms of Use, 340B ESP (last accessed Apr. 13, 2026) (emphasis added). April 20, 2026 Page 8 8 action[,] including a rational connection between the facts found and the choices made.20 When an agency changes position on prior policy that has engendered serious reliance interests, it is arbitrary and capricious to ignore the facts and circumstances engendered by that prior policy.21 Not only did HRSA fail in 2025 to explain its choice to embrace post-hoc rebates, but it failed to explain why it embraced the model that, less than a year before, it went to the mat to defeat. It would be unlawful for HRSA to adopt a Rebate Model as a general program integrity measure. As explained below, the 340B Statute includes a carefully balanced regime that prioritizes normal Covered Entity operations over manufacturer surveillance, vesting no auxiliary enforcement role to either Covered Entities or manufacturers.22 If it establishes a Rebate Model, HHS must preserve this balance. Since the manufacturers 2024 proposed model would have so drastically altered the Program, HRSA need not even consider it, much less use it as a baseline. Instead, HRSA should define the problem and develop a solution independently, understanding that the manufacturers 2024 proposals were maximalist positions designed solely for manufacturers benefit without input from Covered Entities or other stakeholders. II. What Has Changed Since the Vacatur of the 2025 Rebate Model Proposal A. Manufacturers Continue to Take Every Opportunity to Attack the 340B Program through Federal and State Litigation Since 2025, manufacturers have only intensified their assault the 340B Program through relentless federal and state litigation. In fact, PhRMA explicitly states that one of its four priorities is: Stop the abuse in the 340B hospital markup program Pursue comprehensive reform that prevents abuse and ensures the 340B program lowers medicine costs for low-income patients. Do not stand in the way of private market solutions that would ensure program compliance and limit illegal activity. Viewed alongside with PhRMAs other priorities (Adopt a pro-innovation regulatory and trade agenda, protect the United States from the harms of price setting, and rein in the middlemen to put patients over PBM profits),23 drug manufacturers animus against the 340B Program could not be plainer. 20 Ohio v. Environmental Protection Agency, 603 U.S. 279, 292-93 (alteration in original) (citing Motor Vehicle Mfrs. Assn. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983)). 21 AHA v. Kennedy, Order on Mot. for Prelim. Inj., at *13 (Dec. 29, 2025) (D. Me. Case no. 2:25-cv-00600-LEW). 22 Astra U.S.A., Inc. v. Santa Clara County, 563 U.S. 110, 117 (2011). 23 https://phrma.org/our-agenda (last accessed April 18, 2026). April 20, 2026 Page 9 9 To that end, pharmaceutical manufacturers have repeatedly demonstrated a willingness to pursue aggressive litigation strategies that impose significant burdens on both regulators and safety-net providers. In recent years, manufacturers have filed more than 100 lawsuits focusing on the 340B Program, with about 75 of those lawsuits challenging state laws protecting contract pharmacy arrangements. This litigation has fragmented regulatory oversight, forced state governments to expend substantial resources defending their already enacted statutes, and created more uncertainty and costs for Covered Entities attempting to maintain compliant participation in the program. In many of these suits, manufacturers have gone further by seeking discovery from Covered Entities that are not even parties to the litigation. Manufacturers have issued subpoenas demanding internal 340B policies, compliance documentation, and other sensitive business records from hospitals and health systems. They have deposed Covered Entity personnel, sometimes more than once. They have even pushed the bounds of court-issued protective orders, trying to make confidential business information publicly available by using it at hearings and making little effort to keep the information sealed in response to court inquiries. These tactics substantially increase legal and administrative costs for safety-net providers while offering little to help courts resolve the underlying disputes between manufacturers and state governments. This pattern of conduct demonstrates a willingness by manufacturers to leverage legal processes to obtain operational and compliance information from Covered Entities whenever possible. B. Manufacturers Still Remove PHI from the HIPAA Protective Framework The practical effect of the platforms manufacturers are deployingparticularly those operated by Second Sighthas been to push Covered Entities patient-level information outside of HIPAAs protective framework and into manufacturer-directed environments that are not structured to minimize disclosure, constrain downstream use, or provide meaningful oversight and accountability. Even though the 340B ESP platform has largely remained the same, the Beacon platform used for MFP facilitation has imposed significant and ongoing administrative burdens on Covered Entities. More importantly for purposes of this RFI, the Beacon experience demonstrates a predictable failure mode of any rebate model that relies on Second Sights architecture: it is built around manufacturer access to Covered Entity claims data, with legal justification premised on an expansive reading of HIPAAs payment provisions. If HRSA proceeds with a Rebate Model that permits (or depends on) manufacturers using Second Sights or similar platforms, HRSA should expect the same structural defectsdata exposure, misuse risk, and operational burdensto recur at scale. These HIPAA concerns are not theoretical. For instance, Second Sight relies on an Expert Determination prepared on its behalf to support the claim that the data Covered Entities submit through the Beacon platform constitutes a de-identified dataset. That conclusion may not withstand scrutiny. The determination itself acknowledges that Beacons data architecture permits re-identification, a result that is consistent with 340B ESP and Beacons foundational design. Like the 340B ESP platform, Beacon imposes terms granting Second Sight a universal and perpetual license to Covered Entity data, and it structures data submissions in ways that preserve linkability April 20, 2026 Page 10 10 and usability for manufacturers.24 Accordingly, the asserted de-identification operates not as a meaningful privacy safeguard, but as a legal justification for transferring Covered Entity data into manufacturer-directed systems where it remains directly or indirectly re-identifiable and exploitable with respect to Covered Entity patients and operations. To justify this approach, the Expert Determination relies on HIPAAs payment exception. That reliance is misplaced. For health care providers, HIPAA defines payment as activities undertaken...to obtain or provide reimbursement for the provision of health care.25 A 340B rebate, however, is not reimbursement for care furnished to a patient. It is a retrospective pricing adjustment between a Covered Entity and a manufacturera commercial reconciliation that occurs after the Covered Entity has already furnished care and dispensed drugs under existing payer arrangements. Drug manufacturers have no special place in HIPAA, so if drug rebates are for payment purposes, rebates from any vendor would be, too. Surely, this is exactly the kind of transaction that HIPAA prohibits. The data collection required to support such rebates is therefore not necessary to facilitate payment in the HIPAA sense; rather, it enables manufacturers to monitor and evaluate Covered Entity activity under a federal public health program. HRSA should address this issue directly. It has now been approximately six years since manufacturers first deployed the 340B ESP dragnet, and HHS has never articulated, and a court has never scrutinized, a coherent legal theory explaining why systematic disclosure of Covered Entity claims data to manufacturersparticularly through manufacturer-selected platformsis permissible under HIPAA. If HRSA intends to move forward with any rebate model that depends on manufacturer access to claims-level data, HRSA should expressly state (in the administrative record) the legal basis for that disclosure and explain how it is consistent with HIPAAs limits, including the minimum necessary standard and the core principle that PHI should not be repurposed for commercial advantage.26 Finally, while the Beacon rebate model has not yet taken effect, Covered Entities do not have to speculate about how Beacon will operate in practice. Covered Entities are already experiencing significant challenges with the Beacon MFP facilitation platform, which is operationally and functionally similar to the rebate model platform. Recent experience shows that Beacons design creates friction and error at precisely the point where Covered Entities need reliability and transparency: although the platform allows Covered Entities to designate claims as 340B-eligible 24 Beacon Channel Management, Beacon Rebate Model Terms of Use (Oct. 1, 2025) (https://cm.beaconchannelmanagement.com/pages/terms) (last accessed Apr. 20, 2025). 25 45 C.F.R. 164.501 Payment. 26 This point also underscores a broader structural problem with a manufacturer-directed rebate modelone we address earlier in this comment. As explained above, a rebate model administered through manufacturer-controlled platforms would in practice resemble a new health-insurance-like scheme layered on top of existing payment systems, with manufacturers acting as adjudicators of claims-level eligibility and payment decisions. If that is the policy choice HHS makes, HHS should confront the HIPAA implications head-on: manufacturers should be treated as health plans (or otherwise brought within a HIPAA-regulated role) for purposes of the data flows the model requires, rather than being permitted to operate outside HIPAAs plan framework while invoking HIPAAs payment concepts to justify sweeping data access. April 20, 2026 Page 11 11 with relative ease, that same design has been accompanied by a corresponding increase in manufacturer denials of refund requests, with limited ability to efficiently challenge denials and effectively no recourse when determinations are improper. The burden of resolving these denials falls entirely on Covered Entities. Disputing an improperly denied claim requires a time-intensive, manual process that Covered Entities report can take up to two hours per claim to investigate and resolve. These disputes do not arise in small numbers. Several Covered Entities report having to review and challenge hundreds of denied claims, resulting in thousands of dollars in administrative costs, substantial diversion of staff resources from patient-care functions, and millions of dollars in unpaid MFP refunds. In sum, HRSA should not test or implement any Rebate Model that allows or requires stakeholders to use private technology platforms unless and until HRSA (i) addresses the HIPAA legal theory in the administrative record, including why the payment exception applies to 340B rebates and how disclosures would satisfy HIPAAs minimum-necessary limits; (ii) explains whether manufacturers would be treated as health plans (or otherwise brought within a HIPAA-regulated role) if the model functions as an insurance-like adjudication and payment system; and (iii) resolves the operational and financial failures already demonstrated by Beacons MFP facilitation experience, including the denial and dispute dynamics that have shifted extraordinary administrative burden and financial risk onto Covered Entities. C. Eli Lilly, Novo Nordisk, Exelixis, AstraZeneca, and Bristol Myers Squibbs All- Claims Policies In late 2025, small manufacturer Exelixis announced an all-claims data submission policy for 340B Covered Entities. In the brief time since the 2025 Rebate Pilot was vacated, several large manufacturers have followed suit, conditioning access to statutory 340B pricing on Covered Entities submission of claims-level data. On January 15, 2026, Eli Lilly issued a notice updating its 340B data requirements and mandating Covered Entities to submit claims data for all dispensations of all Lilly drugs, regardless of setting.27 Failure to submit claims-level data through 340B ESP within 45 days of dispense may result in loss of access to 340B pricing for the designated pharmacy until the requested data is submitted. Just recently, Novo Nordisk, AstraZeneca, and Bristol Myers Squibbhave announced similar policies.28 If the 2020-2025 adoption of 340B ESP is to be any guide, we expect these manufacturers are the vanguard; others will follow. these manufacturers These manufacturer policies demonstrate how quickly voluntary transparency requirements can evolve into mandatory data-submission regimes that effectively terminate or suspend participation in portions of the 340B Program. To be clear, when manufacturers demand broad claims-level data and reserve the ability to suspend access even to parts of the 340B Program if those demands are 27 Update to Lillys 340B Distribution Program for In-House Pharmacies (Jan. 15, 2026). 28 Notice Regarding Update to Novo Nordisks Hospital and Grantee 340B Distribution Policy (Mar. 2, 2026); see also AstraZeneca In-House Pharmacy Policy (Apr. 13, 2026). April 20, 2026 Page 12 12 not met, the result is that manufacturers are functioning as a regulatory body, even if it is framed as operational administration in the name of transparency. Professor Courtemanche concludes that under such a regime, manufacturers biggest gains come not from cleaning up noncompliance, but from denying legitimate claims through red tape and obfuscation. He estimates this to be a source of $7 billion in annual savings for manufacturers and additional direct costs for covered entities.29 Additional sources of value for pharmaceutical manufacturers include lobbying, physician targeting, and using the data to sell to other businesses for research purposes. As Prof. Courtemanche notes, pharmaceutical manufacturers have already realized a profit rate of return of 487% from their lobbying regarding drug price negotiations within the One Big Beautiful Bill.30 With the size of the 340B Program, manufacturers can realize billions of dollars from state and federal legislative victories.31 Manufacturers can further utilize this massive dataset to either directly conduct outreach to physicians or leverage gifts in order boost sales in a process known as detailing. According to estimates, the data gained from ESP and Beacon could increase detailing efforts enough to realize $1.98 billion in profits.32 Finally, Second Sight would retain a massive dataset of Medicare and non-Medicare patients data, a substantial advantage over other datasets that they could sell. Here, estimates state that this sort of data could be sublicensed in the five-figure range.33 Together, just these three methods result in several billions of dollars in profits made from directly placing their costs upon Covered Entities. To date, HRSA has failed to acknowledge or address any of these considerations. III. Documentation, Oversight, and Enforcement Safeguards Essential to a Lawful and Workable 340B Rebate Model A. Parity in Documentation and Recordkeeping Obligations Is a Prerequisite to Any Credible Rebate Model Any 340B Rebate Model must be grounded in parity between the documentation and recordkeeping obligations imposed on Covered Entities and those imposed on manufacturers. Under the 340B Statute, Covered Entities are subject to clear and longstanding requirements to maintain auditable records sufficient to demonstrate compliance with statutory prohibitions on diversion and duplicate discounts.34 These obligations are reinforced by HRSAs audit framework, 29 Courtemanche Study, p. 20. 30 Courtemanche Study, p. 24. 31 Courtemanche Study, p. 21. 32 Id. at 25. 33 Id. at 26. 34 See 42 U.S.C. 256b(a)(5)(A)-(B). April 20, 2026 Page 13 13 which expressly contemplates that compliance determinations will rest on contemporaneous, transactionlevel records capable of being reviewed by auditors and regulators.35 By contrast, HRSAs 2025 Rebate Pilot lacked clarity as to what documentation manufacturers would be required to create, retain, or disclose in support of their rebate determinations. That asymmetry presents a fundamental flaw. A Rebate Model cannot function crediblyor lawfully if one party is subjected to rigorous, enforceable recordkeeping standards and audit exposure, while the other is permitted to rely on opaque or discretionary internal processes that are effectively insulated from review. The 340B Statute itself reflects congressional intent that manufacturers pricing and repayment obligations be verifiable and subject to oversight. Section 340B requires manufacturers, as a condition of participation, to report ceiling prices to the Secretary and to offer covered outpatient drugs at or below those prices.36 Where overcharges occur, the statutory and regulatory framework presumes the existence of manufacturerheld data sufficient to evaluate compliance and impose remedies.37 A rebate model that does not impose clear, enforceable documentation and retention obligations on manufacturers comparable to those imposed on covered entities would depart from this structure and erode program integrity. Finally, a rebate model implemented and enforced by manufacturers effectively renders 340B covered entities helpless where since manufacturer transparency exists and covered entities are unable to litigate directly against manufacturers under Astra U.S.A., Inc. v. Santa Clara County.38 If a Rebate Model is implemented, HRSA must consider and meaningfully address how that model will not be subject to manufacturer abuses. B. Documentation Must Permit TransactionLevel Traceability Consistent with the 340B Overcharge and CMP Framework Any manufacturer documentation framework must also align with HRSAs existing overcharge and enforcement regulations by enabling HRSA to trace rebate determinations to specific transactions and orders. Under the current regulations, HRSA may impose civil monetary penalties where a manufacturer knowingly and intentionally charges a covered entity more than the applicable ceiling price.39 The evidentiary standard implicit in that authority necessarily requires 35 See 61 Fed. Reg. 65,406, 65,409-10 (Dec. 12, 1996). 36 42 U.S.C. 256b(a)(1). 37 42 U.S.C. 256b(d)(3)(B)(iii) (requiring procedures through which a covered entity may discover and obtain such information and documents from manufacturers and third parties as may be relevant to demonstrate the merits of a claim that charges for a manufacturer's product have exceeded the applicable ceiling price under this section.). Accord, 42 C.F.R. 10.22. See also 42 C.F.R. 10.10-10.11 (establishing a transaction-level analysis for overcharge violations). 38 Astra USA, Inc. v. Santa Clara County, 563 U.S. 110 (2011). 39 42 C.F.R. 10.11 et seq. April 20, 2026 Page 14 14 the ability to evaluate manufacturer conduct at a level of granularity sufficient to determine whether a particular covered entity paid more than it should have for a particular drug purchase. Highlevel, aggregated, or summary documentation is insufficient for these purposes. HRSA cannot meaningfully assess overcharge allegationsor sustain a CMP determinationwithout the ability to link a manufacturers rebate decision to discrete purchasing events, including the specific covered entity, drug, quantity, price paid, and the manufacturers rationale for approving or denying a rebate for that transaction. The administrative dispute resolution process further underscores this need. Covered entities bringing overcharge claims must submit detailed documentation supporting each claim, and manufacturers are expected to respond with information adequate for the ADR Panel to resolve factual and legal disputes.40 HRSAs own Manufacturer Audit Guidelines reflect this transactionspecific orientation. The Guidelines require manufacturers to possess documentation establishing reasonable cause for alleged violations before initiating audits and to furnish HRSA with supporting materials sufficient to permit independent review. 41 A rebate model that permits manufacturers to rely on nontraceable, posthoc, or algorithmic determinations untethered from underlying transactions would be incompatible with these principles and would leave HRSA without the evidentiary foundation necessary to enforce the statute. C. Robust HRSA Oversight Is Necessary to Avoid an Unconstitutional Delegation of Federal Authority Finally, any rebate model must include meaningful HRSA oversight and enforceable federal standards to avoid an unconstitutional delegation of governmental authority to private actors. Permitting manufacturersor their agentsto make unilateral, opaque rebate determinations without clear regulatory constraints and agency supervision risks running afoul of constitutional principles reflected in the private non-delegation doctrine. At bottom, decisions about whether a covered entity has been made whole for a statutory overcharge, and whether a manufacturer has satisfied its obligations under federal law, are quintessentially governmental determinations that must be governed and reviewable by the agency charged with administering the program. Under the 2025 Rebate Model proposal, manufacturers and their agents would exercise coercive regulatory authority over covered entities, not merely perform ministerial or administrative functions. By reviewing claims-level data, determining rebate eligibility, and controlling whether and when payment is made, manufacturers would make threshold compliance determinations that directly govern whether covered entities receive the statutory benefit of 340B pricing in practice. That authority has binding legal and financial consequences and thus exceeds the type of limited private participation that can be constitutionally tolerated absent close governmental control. 40 See 42 C.F.R. 10.21-10.23. 41 61 Fed. Reg. at 65,409-10. April 20, 2026 Page 15 15 Such an arrangement would fundamentally reverse the allocation of authority established by the 340B Statute. Section 340B is designed as a government-administered pricing regulation enforced through reporting, audit, and remedial authority vested in the Secretarynot as a manufacturer-controlled reimbursement system. Allowing financially interested manufacturers to serve as the primary arbiters of rebate eligibility would displace HRSAs role as regulator and substitute private policy judgments for governmental enforcement.42 Current experience under the Medicare Maximum Fair Price program illustrates these risks. Manufacturers have relied on Second Sight Solutions Beacon MFP platform to process good faith inquiries and refund determinations related to MFP accessibility and payment disputes. That structure has proven inefficient, has inserted an unnecessary intermediary between manufacturers and covered entities, and has created an inherent conflict of interest in which the same private agent both controls the inquiry process and evaluates eligibility for refunds. Covered entities are often left without transparency into decision-making criteria or a clear path to agency review. Notably, manufacturers proposed to repurpose Second Sight Solutions Beacon 340B Rebate platform as part of HRSAs 2025 rebate model proposal. Replicating this approach in the 340B contextabsent robust HRSA oversight, clear documentation standards, and enforceable rules governing manufacturer conductwould magnify existing concerns. Existing manufacturer rebate and repayment policies further demonstrate this risk, as manufacturers have already incorporated privately developed compliance frameworkssuch as separate contract pharmacy policiesinto rebate eligibility determinations, thereby conditioning access to statutory 340B pricing on standards not promulgated through HRSA rulemaking or enforced through HRSA audit authority. A manufacturer-administered rebate model would formalize and expand this private policymaking role, increasing the risk that program limitations will be operationalized through manufacturer discretion rather than federal law. Section 340B vests administration of the program in the Secretary, not in manufacturers or their vendors. HRSA must retainnot relinquishmeaningful control over the standards, documentation, and determinations that govern rebate eligibility and resolution. Clear regulatory guardrails and active federal oversight are therefore not optional features of a rebate model; they are constitutional necessities. D. Other Conditions HRSA Should Consider in Any Rebate Model The fundamental theory supporting HRSAs 2025 Rebate Pilot was that a manufacturer cannot implement a Rebate Model without Secretarial approval. Section 340B contains no textual limits on what conditions the Secretary may place on such approval. Given the substantial hazards presented by any Rebate Model, especially a manufacturer-directed one, HHS should be careful to outline conditions that ensure manufacturer abuses are neither encouraged and protected. Potential conditions that HRSA could impose on any manufacturer opting in to a Rebate Model could include: 42 See 42 U.S.C. 256b(a). April 20, 2026 Page 16 16 1. Requiring the manufacturer to agree to be directly liable to Covered Entities for Rebate- Model-based overcharges through private litigation. This would supplement HRSAs authority to issue binding agency decisions through the ADR process with objective federal and state court oversight. 2. Requiring participating manufacturers to pay a user fee from a portion of their denied rebates. This model addresses the 2025 Rebate Models structural failure that incentivized manufacturers to issue blanket rebate denials. Those denials would have shifted the burden of proof to 340B covered entities who had no meaningful ability to dispute those determinations. This would also generate revenue for HRSA to better administer the 340B Program and create a Federal payment obligation for manufacturers related to the Rebate Model, which should increase Rebate Model discipline. 3. Prohibiting the manufacturer from compensating any employee or vendor involved in the Rebate Model through a contingency or commission structure. This would eliminate the moral hazard of compensating a person for their work in denying 340B discounts or rebates and is consistent with the policies underlying the Anti-Kickback Statute 43 and the Physician Self-Referral Law.44 Currently, there exists no such restriction and 340B covered entities are overburdened responding to manufacturer information fishing expeditions. 4. Requiring the manufacturer to submit to audits by Covered Entities that have reasonable cause to believe that the manufacturer has denied a legitimate 340B rebate request. Such a right could be congruent with the rights and procedures established under HRSAs Manufacturer Audit Guidelines. 5. Requiring the manufacturer to agree that, for the purposes of the 340B Rebate Model, they are a health plan as that term is defined in the HIPAA Privacy Rule, ensuring that the data Covered Entities provide remains within the HIPAA framework. 6. Requiring the manufacturer to agree to work with any data intermediary reasonably selected by Covered Entities, which would create a market for these services and facilitate their compliant and efficient development. 7. Require the manufacturer to ship drugs covered by the Rebate Model to any registered contract pharmacy, ensuring that manufacturers are adequately supporting the health care safety net in exchange for the benefits they would gain from a Rebate Model. 8. Requiring all manufacturers to pay into a HRSA-administered Covered Entity Compensation Fund. Such a fund would hold Covered Entities harmless for manufacturers improper rebate denials and create a collective incentive for manufacturers to eliminate noncompliant denials. 43 42 U.S.C. 1320a-7b(b)(2). 44 42 U.S.C. 1395nn et seq. April 20, 2026 Page 17 17 If HRSA determines that it could not lawfully impose such conditions, it should explain why. If it determines it could lawfully impose such conditions, it should adopt them or explain why it made a different choice. IV. Better Alternatives to a Rebate Model The RFI also states that HRSA seeks comments regarding whether it should implement a rebate model under the 340B Program and how best to operationalize any such rebate framework for stakeholders. 45 We argue that it should not. We welcome this opportunity to provide that requested feedback and hope that HHS meaningfully considers our input. Once again, we agree with HRSA that transparency is a key component of the Program, but we believe the goals of Medicaid and MFP deduplication can be pursued through a government- administered process rather than a manufacturer-controlled one. As described below, a centralized clearinghouse would allow HRSA to define minimum necessary data elements, protect Covered Entities sensitive information, and maintain Federal control over the process. That approach would be far more consistent with the structure of the Program than a manufacturer-specific rebate process administered by private actors. Even better, the methodology and processes already exist within HHS. In short, a Rebate Model would not fix HRSAs concerns regarding transparency in the Program; it would only serve to further shift costs and risks away from manufacturers and onto Covered Entities in contravention of Congressional intent and the law. A. 340B Clearinghouse Model Alternative A 340B Rebate Model is not necessary to deduplicate MFP payments and 340B pricing. For instance, an HHS data clearinghouse that would standardize data submission requirements and access conditions, thereby eliminating the need for manufacturers to impose their own varied and inconsistent models, could achieve HHSs goals in a far more controlled manner. Drug manufacturers suggest that rebates are the only mechanism for collecting the information necessary to deduplicate 340B and MFP claims. This is false and fails, perhaps intentionally, to recognize that 340B patient identification and dispenses, while indeed retroactively determined, are carefully tracked via auditable records that are maintained for at least three years as required by HHS. CMS has already proposed and finalized a 340B claims repository to facilitate its exclusion of 340B drugs from its Part D Inflation Rebate invoices to manufacturers.46 This claims repository operates retrospectively, relying on existing data structures. Other than unabashed manufacturer preference, it is unclear why CMS could not adapt the same technology to deduplicate MFP refunds and 340B claims. Doing so would ensure that Covered Entities and manufacturers could use reliable, government-backed systems to exchange information for 45 91 Fed. Reg. 7287 (Feb. 17, 2026). 46 2026 Physician Fee Schedule Proposed Rule, 90 Fed. Reg. 32,352 (July 16, 2025); see also Physician Fee Schedule Final Rule, 90 Fed. Reg. 49266, 49741 (Nov. 5, 2025). April 20, 2026 Page 18 18 legitimate purposes. The government could also use the clearinghouse to maintain technical and administrative control over this sensitive data, as it did through manufacturers Drug Price Negotiation Program Data Module Agreements. The clearinghouse model would also address cost considerations, since HHS could require that manufacturers that wish to voluntarily participate in the program incur the related costs.47 Although the MFP claims repository has not yet launched, states, including Oregon and Hawaii, have successfully used batch reporting models to deduplicate 340B and Medicaid Drug Rebate Program claims. This model could allow for the submission of a standardized 340B modifier, to identify claims that are identifiable at point-of-sale, then retrospectively collect other data necessary to identify MFP-eligible claims, without requiring 340B Covered Entities to bear unnecessary costs associated with rebate models such as requiring drug purchases at inflated prices. B. Government-Operated Rebate Facilitator At the very least, HRSA should consider a Rebate Model which takes advantage of existing transactions and places a government agent, not private actors, in the deciding role. CMS already provides a similar framework in its Maximum Fair Price (MFP) Medicare Transaction Facilitator (MTF) Data Module (DM). The MTF DM requires dispensing entities to enter into a Data Module User Agreement48 with CMS to enroll. That Agreement includes data use protections requiring the MTF DM Contractor to comply with confidentiality, privacy, and data security requirements, and to limit the use and disclosure of dispensing entity data without including any of the unilateral or self-serving provisions contained in the terms and conditions required to submit data through the manufacturers third-party vendors. Covered Entities should not be required to give up sensitive information to semi-adversarial actors via an unsecure platform in exchange for participation in the 340B Program. In fact, this is not even necessary to address the stated concerns of manufacturers to address MFP and Medicaid deduplication. Rather, the MTF DM provides a suitable framework that could be modified and adapted to suit the needs of all relevant stakeholders in de-duplicating 340B and MFP claims. C. Exercise CMSs MFP Authority Finally, it is concerning and perplexing that it has fallen to HRSA, with its austere budget and limited authority, to police the intersection between the 340B and MFP programs. While HRSA can clearly prevent any manufacturer from imposing a rebate model without prior approval, it is less clear that Section 340B grants HRSA the astonishing authority to make such a model a default for Covered Entities nationwide. With a rebate model poised to affect 25 of the most expensive 47 Plan should include assurances that all costs for data submission through an Information Technology (IT) platform be borne by the manufacturer and no additional administrative costs of running the rebate model shall be passed onto the Covered Entities. Id. at 38,166. 48 See Centers for Medicare and Medicaid Services, Medicare Transaction Facilitator Data Module User Agreement (last accessed March 25, 2026), available at: https://www.cms.gov/files/document/dispensing-entity-mtf-agreement- final.pdf. April 20, 2026 Page 19 19 drugs in the Medicare program,49 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.50 It would seem far more appropriate for CMS to address manufacturers ostensible concerns, which arise because of the MFP Program, through MFP guidance and regulations. If the manufacturers six-year campaign against the 340B Program has proven anything, it is that HRSAs authority will always be challenged. CMS, with its general rulemaking authority, explicit charge to regulate the MFP program through guidance documents, and deep pool of resources, would seem to be in a better position to address these issues. REBATE MODEL RFI RESPONSIVE COMMENTS To help HRSA understand Collaborative members perspectives regarding a potential Rebate Model, we surveyed our members using the RFIs questions as a base. What we learned was alarming. Covered Entities face monumental administrative costs to comply with the ever- changing 340B Program in its current state. The vast majority of respondents anticipate that the costs associated with the Rebate Model would have significant ramifications on patient care. Several Covered Entities reported that they will not be able to purchase MTF drugs, that patients will have restricted access to preferred medications, and that charity care funded by the 340B program will be cut. These effects will be more acute upon rural and smaller safety-net hospitals, who emphasized that they lack the infrastructure and finances necessary to absorb manufacturers costs more than they already have. To limit the burden on our members, we asked each of them to submit a single response for their organization, typically a health system. for each of the statistics below, cost estimates are based by organization, not by a single Covered Entity. When summarizing our survey responses, we separated responding organizations into three groups: Small (representing 1-2 Covered Entities), Medium (3-9 Covered Entities), and Large (representing 11-30+ Covered Entities). Below is a summary of our findings, and a full report is included as Attachment 4. V. Costs to Covered Entities A. Current Administrative Costs Under the Upfront 340B Discount: Even without the Rebate Model taking effect, Covered Entities are under significant pressures because of manufacturers campaign against the 340B Program. Covered Entities are already constantly adapting to frequent manufacturer policy changes, good-faith inquiries, audits, contract-pharmacy restrictions, and numerous third party platform requirements. Anecdotally and 49 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 50 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 20 20 based on the data reported in Attachment 4, it is clear that manufacturers have already deployed much of the bureaucratic red tape predicted by Prof. Courtemanche.51 Our respondents estimated anywhere between $84,000 and up to $20 million in existing costs related to 340B Program operations. Regarding administrative costs including third party administrator fees, respondents pay anywhere between around $29,000 annually for small systems to upwards of $15 million annually for large, multi-Covered-Entity health systems. Additional compliance costs related to the 340B Program were estimated to cost anywhere between $50,000 for small health systems to $15 million for large health systems. The key cost drivers for these health systems were nearly equally identified to be funding for their Third Party Vendors, Staffing, and IT Systems. These key cost drivers also happen to be key characteristics that will increase costs even further under a Rebate Model. B. Administrative Costs Under a Potential 340B Rebate Model Pilot Program In total, when asked how much each organization expects to pay annually to maintain compliance with a rebate model, estimates ranged anywhere from $20,000 to $50 million. Organizations are already bracing for exorbitant start-up costs when preparing for the Rebate Model. Here, the cost is estimated to range anywhere from $500,000 to $16.4 million per organization (less for smaller organizations, more for larger organizations). Organizations attribute these one-time startup costs from engaging legal review of data submission agreements and vendor terms. These costs were mainly attributed almost equally to data reconciliation, data submission, claims processing, audit support. When asked if there were other costs, organizations also mentioned the loss of savings from improperly denied rebates. These losses are not due to miscellaneous or unpredictable factors, but are occurring because of the core characteristics of a rebate model, By their accounts, these costs will be diverted from other areas of care the Covered Entity could be covering. C. Staffing Impacts under a Potential 340B Rebate Model Pilot Program When asked whether the organization would require additional full-time employees or would cause any current full-time employees to reallocate their workload, each and every Covered Entity answered that it would be required. These newly hired positions would need to be filled by 340B analysts and specialists to monitor claims data submissions, investigate rebate denials, manage appeals when rebates are denied, and respond to constantly evolving manufacturer platform requirements. Not only would organizations be required to hire further FTEs to support compliance with the rebate model, but several organizations also stated that they would need to incur more staffing costs for ongoing legal fees and consultant support. Further, the costs to hire new FTEs were included as part of each organizations ongoing annual costs under a rebate model. For all sizes of organizations, from small organizations that only answered for 1 or 2 Covered Entities to 51 Courtemanche Study, p.4. April 20, 2026 Page 21 21 those representing over 30, hiring new, specialized FTEs were part of their estimation to spend anywhere from $20,000 to $50 million dollars annually. D. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program and Data Collection Several organizations noted that their systems are not equipped to submit patient claims data and would likely need to engage with a new TPA or significantly change their TPA in order to comply. Several of these Covered Entities also noted that, because of staffing shortages, that these processes will be onerous. One organization specifically noted that it takes their IT team about 40 to 80 hours to develop reports and transfer claims data for each request. The rebate model would divert a significant amount of time away from important duties for 340B analysts. Already, organizations are so spread thin that they send all outgoing data through their various 340B TPAs in order to give themselves the best chance at remaining compliant with the Program. These organizations also describe that they currently engage in daily, weekly, or monthly self-audits to ensure complete and accurate reporting. This time loss is why, when asked how a claim should be submitted, organizations largely responded that they believe what they already draw from their TPA is onerous enough and should be sufficient for manufacturers. Therefore, devoting more time to adapting to constantly changing IT platforms will inevitably draw resources away from providing critical patient access to the medication they require, as mentioned before. Should a rebate model go into effect, organizations emphasized the need for transparency and compliance on behalf of manufacturers. Right now, organizations are forced to sign up for manufacturer-provided IT platforms such as Beacon or 340B ESP without negotiation. If these platforms are to be required as-is, then organizations would only ask that the manufacturers provide analyses that show that their platform abides by HIPAA and explain the scope of their data use. 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities When asked how many days they would consider a prompt payment period to receive their rebates, the most common answer was that organizations expected a prompt payment within 7 days. A majority of organizations also responded that a rebate-based payment model would alter the timing compared to their current drug wholesaler arrangement. As a result, one respondent estimated that there would be an upfront loss of $2 million and an aggregated cashflow impact of $4 million. For those organizations already operating at a loss, there is not an option to absorb millions of dollars of costs at a time, especially when there is a workable alternative to the type of rebate model previously proposed. 3. Rebate Denials Responding organizations are in support of 340B Program transparency, but they also made it clear that transparency must come with more delineated guardrails. Specifically, when asked if these organizations would feel more comfortable with a Rebate Model if manufacturers were required to provide documentation and a reason for why a claim was denied, 100% of organizations April 20, 2026 Page 22 22 responded affirmatively. And, when asked what standard process elements should be required under a potential 340B Rebate Model, organizations largely answered equally that the most helpful elements would include template forms, clearer timelines, a clear reporting path for improper denials, active investigation processes, and more enforcement of knowing and intentional overcharges. Finally, organizations describe that the ideal rebate model would simply provide consistency so organization can quickly learn and understand how to attain and maintain compliance, and would also provide for some amount of penalty for noncomplying manufacturers. For example, organizations recommended that the government might make nonpayment of a rebate a Stark violation, or a general civil monetary penalty to incentivize prompt payments. Other recommendations included a suggestion that if a manufacturer denies a rebate at a high rate, that this drug might be removed from the Rebate Pilot in the following quarter. While there are a variety of recommendations, the goal is clear, that HHS should demand the same transparency of manufacturers as they do Covered Entities. CONCLUSION We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, HALL, RENDER, KILLIAN, HEATH & LYMAN, P.C. Todd A. Nova T. James Junger 1 ATTACHMENT 1: 340B Data from the ESP and Beacon Platforms Holds Considerable Value for Drug Manufacturers A study by Professor Charles Courtemanche 1 340B Data from the ESP and Beacon Platforms Holds Considerable Value for Drug Manufacturers April 2026 Charles Courtemanche Professor of Economics; Director, Institute for the Study of Free Enterprise Gatton College of Business and Economics University of Kentucky Research Associate, National Bureau of Economic Research Research Fellow, Institute of Labor Economics (IZA) Email: courtemanche@uky.edu Executive Summary Drug manufacturers increasingly require 340B covered entities to submit claims through the Enhanced Services Platform (ESP), which was developed by a company Second Sight Solutions, LLC with extensive connections to the pharmaceutical industry. The same company has also developed the Beacon platform, designed to be used with the rebate model promoted by manufacturers. The purported justification for these actions is to eliminate double discounting, such as when 340B discounts and Medicaid Drug Program rebates are given for the same prescription. However, this report argues that the benefits to pharmaceutical companies of mandating the use of industry-connected platforms and imposing a rebate model extend far beyond this stated purpose. Based on government audit data, I estimate the total amount of double discounting to be $3.13 billion annually, with full utilization of Second Sights platforms having the potential to recover roughly half that amount. In contrast, I estimate that other sources of value not acknowledged by manufacturers avoiding paying valid claims, developing derivative data products for lobbying purposes, targeting and influencing health care providers, and selling licenses to data add up to a much more substantial $9.33 billion per year. This represents over 11% of the total amount of 340B discounts given out annually by manufacturers. I therefore conclude that the combination of manufacturer-mandated data submission platforms with a rebate model reveal an attempt by the pharmaceutical industry to extract information of value from covered entities without providing compensation. This implies a broader goal of reducing the cost of the 340B program by any means possible, as opposed to merely preventing duplicate discounting. Anecdotal evidence from covered entities early experience with Second Sights platforms provides additional support for this viewpoint. 2 I. Introduction The basic premise of economics is that people and organizations should be expected to respond to incentives in ways that suit their own self-interest. In disputes, this points to the need for a neutral decider. We should expect an unfair outcome in a sports event if players from one team also get to be referees, for instance. In the same way, when evaluating the best mechanism for determining the validity of 340B claims, we should expect unfair outcomes if the party empowered with making these decisions stands to gain or lose based on them. While no one disputes that preventing invalid uses of the 340B program such as duplicate discounting is a worthy objective, the only fair solution is for the government to assume the role of data collector and referee. In contrast, the Enhanced Services Platform (ESP) that most drug manufacturers require covered entities to use in order to be eligible for 340B discounts was developed and is administered by Second Sight, LLC, a subsidiary of a company that receives substantial funding from the pharmaceutical industry. The newer Beacon platform, also developed by Second Sight, goes even further and implements a rebate model, which drug manufacturers as rational entities acting in their own self-interest in accordance with basic economic theory could be expected to use to delay or deny as many 340B rebates as possible. In effect, a rebate model switches the default from the 340B discount being granted unless further information reveals it should not be to the discount not being granted unless further information reveals that it should with a company that has a financial relationship with manufacturers deciding whether the information is sufficient. A long literature in economics documents the importance of defaults (Jachimowicz, 2019), and they are likely to be especially important for 340B given the programs historical lack of a robust dispute resolution system (HRSA, 2025b; HRSA, 2026). Drug company actions implicitly acknowledge this point: by 3 spending presumably millions of dollars towards the development of and lobbying for a claims submission platform that utilizes a rebate model, they reveal an expectation that the returns to such a system must be even greater. The combination of a rebate model with a proprietary database with financial ties to the pharmaceutical industry creates conditions similar to those that enable insurance companies to take advantage of their decision-making authority and private data to deny patient claims. In short, by mandating the use of ESP (and eventually Beacon), drug manufacturers are forcing covered entities and contract pharmacies to submit claims data a product of considerable value that is costly to provide with no compensation. Moreover, the terms and conditions of these platforms grant Second Sight the right to sublicense the data and create derivative works at their sole discretion, creating additional value. This report aims to illustrate the potential value to manufacturers by describing and quantifying the different sources of this value. While it is not possible with available information to predict the magnitude of the impacts with certainty, my estimates still suffice to illustrate the point that the value has the potential to be substantial and that much of it comes at the direct expense of covered entities. The report proceeds as follows. I begin by providing background information about the 340B program and the ESP and Beacon platforms. I then turn to the potential sources of value for pharmaceutical manufacturers from mandating use of these platforms and imposing a rebate model. The purported justification for these changes is reducing double discounting, which occurs when 340B discounts and Medicaid Drug Program rebates are erroneously both given for the same prescription. Based on US government audit data, I estimate the total amount of duplicate discounting to be $3.13 billion per year, which is less than 4% of the size of the 340B 4 program. Under plausible assumptions, full utilization of Second Sights data platforms can be expected to recover about $1.57 billion. The other sources of value which are not acknowledged by the pharmaceutical industry combine to be much more substantial. The first of these is the ability to avoid paying valid claims, which is dramatically enhanced by the switching of defaults in the Beacon platform. Avoiding paying valid claims can be done not only through outright denial but also through bureaucratic red tape that is costly for covered entities and contract pharmacies to navigate, ultimately causing them to give up on getting valid claims paid. Assuming similar improper denial patterns to the health insurance industry, I estimate this source of value to be $7 billion per year. The next source of value comes from using derivative data products for the purposes of lobbying policymakers, without covered entities having access to the same underlying data to respond. I estimated this to have an expected value of $352 million, though it could be much larger if the information helps lead to major legislative changes in the 340B program. Additionally, drug companies can use the data to better target and influence health care providers a source of value I estimate at $1.98 billion. Finally, an additional value (estimated at $11.8 million) comes from the ability to sell licenses to the data to other businesses and researchers. Together, these other sources of value sum to $9.33 billion per year, which is almost six times the estimated value from reducing double discounting and almost three times the entire amount of double discounting. It also represents over 11% of the size of the entire 340B program. I therefore conclude that the combination of manufacturer-mandated data submission platforms with a rebate model reveals an attempt by the pharmaceutical industry to extract information of value from covered entities without providing compensation. In contrast to the claims made by the pharmaceutical industry that these changes are merely intended to stop 5 double discounting, their actual value is much larger in size and scope. These sources of value come largely at the expense of covered entities and contract pharmacies, who incur substantial administrative costs to provide the data, face reductions in 340B revenue from claim denials, and are harmed if pharmaceutical industry lobbying efforts are successful. The overall picture that emerges is one of drug companies trying to reduce the burden of the 340B program by any means possible. Covered entities early experiences with Second Sights platforms are consistent with this objective. II. Background A. 340B Program The 340B drug pricing program, established by the Veterans Health Care Act of 1992, aims to improve access to medical care in vulnerable communities without requiring additional federal resources (Health Resources and Services Administration (HRSA), 2024). It enables qualified health care providers, called covered entities, to purchase drugs administered or prescribed in outpatient settings at a discount from pharmaceutical manufacturers. This only applies if the prescription is filled at a pharmacy within the facility or an external pharmacy with which the provider has a 340B contract (contract pharmacy). In such cases, the covered entity receives the usual payment from the patient and/or his or her insurer, for a fee if a contract pharmacy is involved. The covered entity then purchases a replacement drug for the pharmacy at the discounted 340B price, leading to a higher margin than would otherwise be obtained (Government Accountability Office 2018). The 340B program provides a vital source of financing for hospitals and other facilities that are required to treat low-income and uninsured patients regardless of ability to pay. In 2024, an estimated $81.4 million in drug purchases covered by 340B were made (HRSA, 2025a). 6 Arguing that the expansion of contract pharmacy networks has grown the program beyond its original intent, drug companies have unilaterally imposed a number of restrictions, triggering a wave of legislative and legal battles (Courtemanche and Garuccio, 2026). The required use of Second Sights platforms and effort to impose a rebate model are two such examples. While the 340B program has indeed grown substantially since its inception, this was the result of changes to program rules that pharmaceutical manufacturers agreed to via a give-and- take bargaining process. The Medicare Modernization Act (MMA) of 2003 expanded the number of eligible facilities, but it also increased drug company revenues by implementing the Medicare Part D program while prohibiting drug reimportation and price negotiating by the government (Oliver et al., 2004). The Patient Protection and Affordable Care Act of 2010 (ACA) further expanded 340B eligibility (ACA 2010), while concurrent HRSA guidance allowed an unlimited number of contract pharmacies (HRSA, 2010). However, in return, pharmaceutical manufacturers gained access to tens of millions of newly insured customers, while also avoiding the price reductions a single-payer system would have brought (Norman and Karlin-Smith 2016). A recently published review by Courtemanche and Garuccio (2026) examines the scholarly literature to date on the impacts of the 340B program. They cite vast anecdotal and descriptive evidence of covered entities using 340B funds to increase access to care for low- income individuals or expand the scope of services offered. However, they note that there is insufficient causally interpretable evidence available to draw conclusions about other important outcomes. Duplicate discounting has become an important source of contention in the 340B program. This results from the intersection of 340B with the Medicaid Drug Rebate Program, which was established to mitigate the costs to federal and state governments of outpatient drugs 7 dispensed to Medicaid and Medicaid Managed Care patients. When a prescription is eligible for both a 340B discount and a Medicaid rebate, federal law only requires manufacturers to pay one of these. However, the fact that 340B and Medicaid data are split at the point of sale into separate systems managed by different parties can make this challenging to monitor and lead to both discounts being given (Hardaway, 2016). Another source of double discounting is multiple covered entities claiming a 340B discount for the same patient (Nikpay et al., 2024).1 The current process for preventing duplicate discounting is fragmented. For fee-for- service Medicaid, covered entities are expected to identify their facilities on the HRSA- maintained Medicaid Exclusion File, which states can use to flag 340B-purchased drugs so those claims are excluded from state Medicaid rebate requests (Hardaway, 2016). However, HRSA only intends for the Medicaid Exclusion File to be used for fee-for-service Medicaid (HRSA, 2014). For Medicaid Managed Care claims, which became eligible for Medicaid rebates under the Affordable Care Act (ACA), the managed care plans themselves are responsible for preventing duplicate discounting, as opposed to the covered entities. These processes are imperfect, as 25% of over 350 covered entities audited between 2012 and 2015 were found to have at least one duplicate discounting error (Hardaway, 2016). Nonetheless, since being flagged by the audit could result from a single error out of potentially thousands of transactions, the overall percentage of transactions for which an error occurred was presumably much less than 25%. 1 A double discount refers generally to sales where the manufacturer is subject to a discount or rebate under two separate authorities regardless of what those authorities are. In contrast, duplicate discount refers specifically to sales where the manufacturer is subject to the 340B discount and a Medicaid Drug Rebate Program rebate. 8 B. ESP Database The 340B ESP platform utilizes a claims-based algorithm to identify drugs likely subject to both a pharmacy benefit manager discount and a 340B discount, thereby functioning as a duplicate discount prevention tool (Nikpay and Halvorson, 2023). Drug manufacturers require covered entities to submit their contract pharmacies claims data to ESP as a condition of shipping 340B-priced drugs to those pharmacies, with efforts currently being made to extend this requirement to in-house pharmacies as well (Eli Lilly, 2026). Importantly, requiring the submission of data to ESP to receive 340B discounts is an entirely manufacturer-imposed restriction that has no basis in existing 340B law. ESP then links these claims data to Medicaid and commercial rebate data maintained by pharmaceutical manufacturers to identify duplicate discounts (Second Sight Solutions, 2020). Appendix Table 1 at the end of this document provides a list of the data elements that must be reported for each claim (340B ESP, 2024). As of 2022, over 2,200 covered entities had registered on ESP, submitting a total of around 790,000 claims per month. Sixteen of the eighteen drug manufacturers that had imposed conditions on 340B pricing at contract pharmacies were using 340B ESP to administer their policies (Mirga, 2022). While identifying and preventing double discounting is a worthwhile objective, problematic incentives arise from the involvement of pharmaceutical manufacturers with the platform. ESP was developed through the creation of a new company Second Sight Solutions, LLC, which is a subsidiary of the larger consulting firm Berkeley Research Group (BRG) (Young, 2025). The financial relationship between BRG and the pharmaceutical industry is a significant point of controversy. BRG has conducted several studies funded by the Pharmaceutical Research and Manufacturers of America (PhRMA), the main pharmaceutical industry trade group. ESPs Founder and Business Development Lead Aaron Vandervelde, who 9 is also Managing Director at BRG, has authored studies about the 340B program on behalf of PhRMA, and has also done work for the drug-company-led advocacy group AIR 340B and the Community Oncology Alliance (COA). PhRMA, AIR 340B, and COA have cited Vandervelde's research in arguments against the current form of the 340B program. C. Beacon Database Beacon Channel Management, also developed by Second Sight Solutions, enables pharmaceutical manufacturers to transition select 340B drugs from an upfront discount model to a rebate model. The rebate model requires covered entities to purchase drugs at the manufacturers list price, then submit purchase and claims data through the Beacon platform to receive reimbursement for the amount of the 340B discount. Appendix Table 2 lists the data elements that must be reported for each claim (Beacon Support Center, 2025). Since the start of 2026, manufacturers participating in the Medicare Maximum Fair Price (MFP) program have been using a version of the Beacon platform called Beacon MFP (Johnson & Johnson, 2025). Although the Beacon rebate platform is not yet widely in use, this timeline as well as the substantial financial investment in a new platform gives the impression of it being a next- generation version of ESP that adds a new source of savings for pharmaceutical companies: the ability to refuse to pay claims, as opposed to trying to claw back discounts that have already been given. In effect, Beacon puts Second Sight in the position of being judge, jury, and executioner when it comes to denying claims. The conflict of interest given Second Sights entanglements with drug manufacturers raises the question of whether these powers will be used to excessively deny claims or subject covered entities to a process that is so burdensome as to deter submission. The difficulties with the rollout of the ESP platform noted above also raise the question of 10 whether similar glitches could delay the payment of valid claims for a long enough time to cause liquidity problems for providers. III. Value for Pharmaceutical Manufacturers A. Eliminating Double Discounting Drug manufacturers claim that the purpose of Second Sights platforms is to identify double discounting and readily admit that they stand to profit from the ESP systems identification of improper claims. For instance, in Update to Lillys 340B Distribution Program for In-House Pharmacies, Eli Lilly (2026) states that: Among other things, this basic claims data permitted us to identify countless instances of Medicaid duplicate discounts, instances where multiple covered entities sought replenishment on the same unit of 340B program, and to produce the evidence required by HRSA to initiate audits. The starting point for understanding the value of identifying double discounting is to estimate the amount of double discounting that existed prior to the rollout of ESP. Unfortunately, such estimates are scarce. The most widely cited source for the amount of 340B/Medicaid double discounting is Hardaway (2016), who tabulates covered entity audit results from 2012 (when audits began) through 2015 and reports that 25% of entities audited by the Office of Pharmacy Affairs (OPA) had at least one double discounting error. I update his analysis through 2025 using the audit findings listed by HRSA (2026b). Table 1 reports the results. Combining the numbers of total audits and those that found double discounting from 2012 though 2015 replicates Hardaways 25% exactly. Adding in the years through 2025 leads to a very similar rate of 24%. 11 Therefore, the most comprehensive neutral source available indicates that 24% of covered entities had at least some double discounting.2 Table 1 Office of Pharmacy Affairs 340B Covered Entity Audits by Year Year Number of Covered Entities Audited Number with Duplicate Discounting Percentage of Audited Covered Entities with Duplicate Discounting 2012 51 18 35% 2013 94 25 27% 2014 98 23 23% 2015 197 46 23% 2016 199 54 27% 2017 196 49 25% 2018 198 64 32% 2019 198 60 30% 2020 200 41 21% 2021 199 38 19% 2022 198 41 21% 2023 175 44 25% 2024 177 32 18% 2025 115 24 21% Total 2,295 559 24% However, the available summary audit results do not specify the amount of double discounting by these covered entities. To do so, begin by noting that 340B/Medicaid duplicate discounting only occurs for Medicaid patients, so a ceiling can be established by computing the share of covered entity patients on Medicaid. This information is available for 340B hospitals (20%; Popovian et al., 2026), Federally Qualified Health Centers / Community Health Centers (49%; Pillaiet al. 2026), and Ryan White HIV / AIDS Program clinics (39%; Kaiser Family Foundation, 2025). These types of entities are responsible for 78%, 6%, and 3.5% of 340B 2 Between 2015 and 2026, manufacturers conducted 53 audits, finding overcharging in 25 of them. While the rate is higher than that found in the government audits, it is unclear if manufacturer audits were done randomly, as opposed to targeting covered entities with which they had the most suspicion. Adding these 53 additional audits to the data in Table 1 only slightly increases the overall percentage with duplicate discounting to 25%. 12 revenue, respectively (HRSA, 2025c), yielding a weighted average share of Medicaid patients of 23%. Among these Medicaid patients, 70% are on managed care plans and 30% are on fee-for- service Medicaid (Mirga, 2023). Although there are no known estimates of the percentage of drugs prescribed by covered entities to Medicaid patients that are erroneously double discounted, the problem is perceived to be worse for managed care patients (Hardaway, 2016). Therefore, I assume that 50% of covered-entity-prescribed drugs prescribed to Medicaid managed care patients are double discounted, compared to 25% for Medicaid fee-for-service patients. Let AA= the proportion of covered entities with at least one duplicate discount based on audit data, MM= the proportion of patients at these covered entities who are on Medicaid and therefore are possible candidates for duplicate discounting, MMMMMM= the proportion of Medicaid patients on managed care as opposed to fee-for-service, DDDDDD= the proportion of Medicaid managed care 340B prescription fills that are duplicate discounted, and DDDD= the proportion of Medicaid fee-for-service 340B prescription fills that are duplicate discounted. The proportion of all 340B fills given duplicate discounts DD can be expressed as DD= AAMM(MMMMMMDDDDDD+ (1 MMMMMM) DDDD). Calibrating using the above numbers yields DD= 0.24 0.23(0.7 0.5 + (1 0.7) 0.25) = 0.023. In other words, 2.3% of 340B fills receive duplicate discounts. Assuming all the same proportions apply to revenues, we can compute the annual revenue lost by pharmaceutical manufacturers to duplicate discounting by multiplying this percentage by the overall size of the 340B program, $81.4 billion (as noted in Section II). Doing so leads to an estimate of $1.91 billion. 13 As for the other type of double discounting multiple covered entities claiming a discount for the same patient Nikpay et al. (2024) estimate this to occur in 1% to 2% of cases using data from Medicare Part D. Assume that the percentages observed for Medicare Part D are the same for other payors and that these percentages apply to revenue as well as claims. By using the midpoint of the given range (1.5%) and an $81.4 billion size of the 340B program, multiple entities claiming the same discount accounts for $1.22 billion. Adding the two types of double discounting therefore yields $3.13 billion. If ESP is able to identify 100% of double discounting violations and pharmaceutical manufacturers are able to recoup 100% of those losses, then the value to manufacturers would be the full $3.09 billion. However, compete recoupment seems unlikely given the uncertain nature of the dispute process. Therefore, we need to estimate the share of double discounts that can be expected to be recovered once ESP is utilized to its full potential. The proportion of double discounts that can be recovered DD can be modeled as the product of II= the percent of double discounts identified and RR= the rate of recoupment for those that are identified. We are interested in the change in DD from before to after the implementation of Second Sights platforms. Let period 0 represent before and 1 represent after. Therefore, we have DD1 DD0 = II1 RR1 II0 RR0 (1). Since estimates of the four parameters on the right-hand-side of the equation are difficult to find, simplifying assumptions are required. First, note that ESP is explicitly designed to obtain all information necessary to identify all types of double discounting, and the Eli Lilly quote above claims that it is very successful in doing so. Therefore, it is reasonable to assume a very high identification rate. Accordingly, I set II1 = 0.9 (90%). 14 Although there are no known estimates of the rate at which drug manufacturers successfully recovered money lost to double discounting prior to ESP, there are reasons to suspect that it is relatively low. The fact that different parties manage the 340B and Medicaid systems can make it challenging for manufacturers to identify instances of duplicate discounting unless they utilize third-party platforms to link the two data sources (Singh, 2023). Once suspected instances are identified, reaching a resolution is not straightforward. Over 70% of Medicaid beneficiaries are on managed care, and Mirga (2023) describes it as unorthodox and pushing the boundaries to request repayment from covered entities for drugs dispensed to those patients, as covered entities only bear responsibility for fee-for-service Medicaid. Recoupment from the Medicaid Drug Rebate Program is possible via the Dispute Code on the Medicaids Drug Rebate Prior Quarter Adjustment Statement form, but no data are available on how frequently this is done (Centers for Medicare and Medicaid Services, 2023). Manufacturers have the right to file a dispute with HRSA if a private agreement with covered entities or Medicaid is not reached, but they do not appear to have ever successfully done so. In 2024, HRSA finalized a new dispute resolution process that replaced an earlier version that the agency deemed unworkable and that never adjudicated a single claim (HRSA, 2025b). However, as of March 2026, the new process had only resulted in a handful of decisions none related to double discounting (HRSA, 2026). For these reasons, it is reasonable to assume relatively low rates of pre-ESP identification (II0) and recoupment conditional on identification (RR0). I therefore assume that II0 RR0 = 0.1, meaning that only 10% of revenue lost to double discounting was recovered. Calibrating the product of the two parameters allows for more flexibility than calibrating each of them 15 separately. II0 RR0 = 0.1 is consistent with II0 = 0.5 and RR0 = 0.2, the reverse, both being 0.315, and numerous other plausible combinations of values. There is no obvious way to calibrate RR1, the recoupment rate for identified double discounts under full utilization of ESP. Since identifying double discounting is a matter of matching ID numbers from different sources, adjudication should be more straightforward than other types of fraud cases. I therefore assume a relatively high recoupment rate (conditional on identification) of RR1 = 0.67. After making these assumptions, equation (1) becomes DD1 DD0 = 0.9 0.67 0.1 = 0.503. Multiplying this by $3.09 billion yields a value to pharmaceutical manufacturers from reduced double discounting of $1.57 billion. Table 2 explores the sensitivity of this estimate to using plausible higher and lower values of each of the parameters for which calibration was the most arbitrary. These are the rates of duplicate discounting for Medicaid managed care (DMC) and fee-for-service Medicaid (DF) among covered entities with any duplicate discounting, the double-discounting identification rate under full utilization of ESP (II1), the recovery rate for revenue lost to double discounting prior to ESP (II0 RR0), and the recoupment rate conditional on identification (RR1). The first row, in bold, shows the results from my preferred calibration, while the others use alternate parameter values. The next two rows vary the duplicate-discounting rates for the two types of Medicaid to be higher and lower, respectively, while keeping other parameter values the same. The next two rows use higher and lower II1, the next two use higher and lower II0 RR0, and the final two use higher and lower RR1. As the table shows, the range of estimates is from $1.08 billion to $2.14 16 billion. Therefore, even under conservative assumptions, the value to drug companies is over $1 billion. Table 2 Sensitivity Analyses of Value to Manufacturers from Reduced Duplicate Discounting DMC DF II11 II00RR00 RR11 Value 0.5 0.25 0.9 0.1 0.67 $1.57 billion 0.75 0.5 0.9 0.1 0.67 $2.14 billion 0.25 0.1 0.9 0.1 0.67 $1.08 billion 0.5 0.25 1 0.1 0.67 $1.78 billion 0.5 0.25 0.75 0.1 0.67 $1.26 billion 0.5 0.25 0.9 0.2 0.67 $1.26 billion 0.5 0.25 0.9 0 0.67 $1.88 billion 0.5 0.25 0.9 0.1 0.75 $1.80 billion 0.5 0.25 0.9 0.1 0.5 $1.10 billion As an aside, readers familiar with IQVIAs claims of annual double discounting amounts of $20 to $25 billion (Greenwalt, 2022) and subsequently $34 to $37.5 billion (Singh, 2023) might be surprised that I estimated a much lower $3.13 billion. First, note that those estimates are based on wholesale acquisition cost pricing, which inflates amounts compared to the actual 340B prices used by HRSA. To illustrate, HRSA computed the total size of the 340B program to be $66.3 billion in 2023 (Fein, 2024), while IQVIA computed $124 billion in the same year (Martin and Karne, 2024). Scaling Singhs (2023) numbers accordingly yields $18.2 to $20.1 billion. Therefore, IQVIAs different pricing method alone accounts for almost half of the difference between my estimates and theirs. Additionally, IQVIAs claims use vague wording that gives the appearance of being carefully chosen to exaggerate the amount of duplicate discounting. Greenwalt (2022) writes $20-25 billion in duplicate discounts that may not have been owed, while Singh (2023) states $34.0B to $37.5B of sales ... may be at risk for IRA/340B duplicate discounts (italics added). The use of the word may implies a ceiling rather than an exact number. Normally, one would 17 review the methodologies behind these numbers to determine more precisely what may means, but unfortunately the white papers in which the estimates originated which are presumably where the methodologies are described do not appear to be publicly available. Greenwalt (2022) does not provide any source at all for his $20 to $25 billion claim. The link provided by Singh (2023) to support his $34 to $37 billion claim leads to only a one-paragraph summary of the white paper plus a link to a fact sheet, which contains only a single paragraph plus a link to the full report in the white paper, which instead redirects back to the first page. Regardless, it is straightforward to see that these enormous estimates are implausible. As Nguyen and Suresh (2024) state, IQVIAs estimates imply that about 25% of the entire 340B program is duplicate discounting. However, this is at odds with the government audits discussed above that find that 24% of covered entities engaged in any duplicate discounting. All of the 340B revenues at these 24% of covered entities would have to represent duplicate discounting in order to add up to roughly a quarter of the overall size of the program. This is impossible because in order for there to be a second discount, there would have to be a legitimate first discount. Even if this were possible, the entire patient base at these covered entities would have to be on Medicaid in order for all prescription fills to be candidates for duplicate discounting. Even if it were, one would still have to assume that all Medicaid fills were duplicate discounted, including those for fee-for-service. B. Denial of Valid Claims One possible source of value of Second Sights data platforms to drug manufacturers is that the companys conflict of interest has the potential to lead to 340B discounts not being received even when they are appropriate. This is especially likely with the rebate model implemented in Beacon, which effectively switches the default from the 340B discount being 18 granted to not being granted. This would be true of any rebate model, but it is especially concerning when a company connected to the pharmaceutical industry is in control of deciding when the burden of proof has been met that a covered entity qualifies for a rebate. Valid claims could go unpaid in three distinct ways. The first is through software problems and glitches, which are common when rolling out elaborate new data management systems. The widely known problems with the implementation of the Affordable Care Acts Marketplace platform in 2014 provide a prominent example. However, Second Sights conflict of interest amplifies the concern in this case, as the company is incentivized to fix glitches slowly and ineffectively if it means 340B discounts will be delayed or denied or that some covered entities will be deterred from submitting claims. The second way is through the imposition of burdensome administrative requirements, which could deter covered entities and pharmacies from submitting claims, perhaps prevent some from participating in the 340B program at all, or lead to mistakes that result in claims not being processed correctly. To illustrate the latter point, the appendix table shows that no fewer than twelve distinct identification numbers are required in a claim submission, making the odds quite high that mistakes will occur in a meaningful number of cases. It is unclear what sort of technical support will be offered by Second Sight to help correct claims when there are mistakes. However, again, the companys affiliation with pharmaceutical manufacturers creates an incentive for the support to be minimal so that the hassle cost for covered entities and pharmacies becomes too high to pursue correction. The other way valid 340B discounts might not be received is through intentional strategies designed to reject as many claims as possible. Again, Second Sight is not a neutral arbiter. Just as insurance companies are incentivized to find as many ways as possible to reject 19 patients medical claims, drug companies are incentivized to do the same for 340B claims. Their ability to do so would increase exponentially in a rebate model. As stated in the Terms of Use, the ESP system is used for the purpose of identifying Ineligible Rebates and evaluating compliance with Participating Pharmaceutical Manufacturer policies (emphasis added). The latter phrase makes clear that the goal is not only to identify rebates that are ineligible according to the law (duplicate discounting), but also according to rules established unilaterally by the manufacturer that reach well beyond the text of the law (other double discounts). These rules create the potential for claims that are valid according to the law but invalid according to manufacturer rules. The ESP and Beacon portals provide vehicles for imposing these rules by creating algorithms to automate claim evaluations for rebate denial. The enormity of the 340B program means that the value to drug companies from being able to deter or refuse even a relatively small fraction of legally valid claims would likely reach billions of dollars. While it is impossible to quantify all the various ways discussed above in which valid claims may end up not being paid, a rough estimate can be obtained by drawing a parallel with the health insurance industry. In the same way that insurers benefit from claim denials and yet are the ones making those decisions, drug companies benefit from 340B claim denials with Second Sight (with its extensive ties to pharmaceutical groups) making those decisions. A study by Kaiser Family Foundation used ACA Marketplace data to determine that insurers denied 19% of all claims (Long et al., 2026). Lin et al. (2025) find that, when claims denials receive independent medical review, around half are overturned. Of course, those that proceed to independent medical review are likely those denied for medical reasons. However, 20 according to Long et al. (2026), only 5% of in-network claim denials were for that reason. Of the other reasons listed by the study services excluded (13%), member not covered (7%), and enrollee benefit limit reached (5%) appear legitimate. However, the two most frequent reasons for claim denials other reason (36%) and administrative reason (25%) likely largely reflect the sort of bureaucratic, administrative, and technological issues discussed as possible sources of improper denials in ESP. For purposes of this analysis, I assume that half of medical reason denials, all administrative reason denials, and half of other reason denials (given the ambiguity in that category) are improper. These percentages sum to 45.5%. Since 19% of claims are denied, the percentage of total claims that are improperly denied is the product of these two percentages, which is 8.6%. Assume the same improper claim denial percentage applies to 340B ESP, and the percentage of claims is the same as the percentage of costs. With a total 340B program size of $81.4 billion, the dollar amount of improper claim denials comes to $7 billion. This represents not only a benefit to pharmaceutical manufacturers but also a direct cost to covered entities. C. Lobbying Policymakers The pharmaceutical and health product industry spent $4.7 billion on lobbying at the federal level alone between 1999 and 2018. The effectiveness of this lobbying in obtaining more favorable outcomes is well-documented. For instance, Unsal (2016) finds that politically connected firms achieve more medical breakthroughs and receive more government subsidies. Rayfield and Unsal (2019) and Zhou (2023) show that lobbying firms receive less severe recall classifications, with the former also documenting increased product approvals. Lee and Freixanet (2023) find that higher lobbying expenditures are associated with increased annual revenue 21 Garlick (2025) shows that legislative outcomes are more likely to favor the pharmaceutical industry in jurisdictions with higher lobbying activity. Data from Second Sights 340B data platforms have the potential to provide the pharmaceutical industry with valuable new ammunition in its lobbying efforts. Section 3 of the 340B ESP Terms of Use gives Second Sight considerable latitude with how it can utilize the data for purposes beyond simply checking for double discounting (emphasis added): You grant Second Sight a worldwide, sublicensable, non-exclusive, royalty-free, perpetual, irrevocable license to collect, process, disclose, create derivative works of and otherwise use the Covered Entity Claims Data (Data License) for the purposes set forth herein, including specifically pursuant to Sections 3.4 and 3.5, and represent and warrant that you are authorized to grant such Data License on behalf of the Covered Entity (340B ESP, 2024). Therefore, Second Sight retains the right to sublicense the data and create and sell derivative products at their sole discretion without owing covered entities any compensation. Given the conflict of interest discussed in Section II, it is reasonable to assume that the derivative works will be created in a way that spins the data to the benefit of pharmaceutical manufacturers. Who will Second Sight likely sublicense the data to? As further stated in the terms of use (emphasis added): You agree that Second Sight may disclose and sub-license the Covered Entity Claims Data and any other data derived from the interpretation, analysis, and combination of the foregoing data with other data (the Covered Entity Platform Data) to the Participating Pharmaceutical Manufacturers, commercial payers, rebate claims processors or state Medicaid agencies under the same Terms as applicable to us for the 22 purpose of identifying Ineligible Rebates and evaluating compliance with Participating Pharmaceutical Manufacturer policies (340B ESP, 2024). This language provides a reasonable suspicion to believe that derivative works will be distributed to drug companies to use for lobbying purposes and also to insurers, claims processors, and Medicaid agencies in order to influence their decisions in favor of manufacturers. A recent development illustrates this possibility. On April 8, 2026, AbbVie sued HRSA in an attempt to impose its own 340B patient definition (Court Listener, 2026). Almost immediately afterwards, Berkeley Research Group released a PhRMA-funded white paper on patient definitions using claims data (Blalock, 2026). This paper is an updated version of a report that Blalock co-authored with Aaron Vandervelde, the founder of Second Sight (Vandervelde et al., 2023). Given Berkeley Research Groups and Second Sights connections to the pharmaceutical industry, it is not a stretch to anticipate similar real-time derivative works using ESP and Beacon data to be released for the purpose of supporting the industrys position in ongoing legal cases or policy debates. Another aspect of Section 3 of the Terms of Use that reveals motives beyond simply error correction is that Second Sight intends to keep the claims information indefinitely, long after its usefulness for identifying double discounting ends: This Data License survives after termination of the Agreement and shall survive as to any Covered Entity Claims Data that you have submitted on behalf of the Covered Entity or that a TPA (as defined herein) has submitted on behalf of the Covered Entity after such respective dates of submission (340B ESP, 2024). 23 If the sole purpose of the information provided is to identify double discounting and other violations, then it is of no value once claims are determined to be either valid or invalid. Why then would the terms of use make explicitly clear that the data can be retained indefinitely? Clearly the data have other sources of value. One of these may be maintaining the ability to prepare derivative products using data from as far back as necessary to paint drug companies in a positive light and covered entities in a negative light. It is, of course, common in any policy debate for both sides to emphasize the statistics that are most favorable to their point of view, but generally the playing field is level in the sense that the two sides have access to the same underlying information from which they can develop their arguments. The asymmetric data ownership structure imposed by ESP gives Second Sight whose parent company drug manufacturers financially support the ability to generate statistics that might be misleading, without covered entities having the ability to access the same data to refute these statistics or provide context. This is because covered entities will only have access to their own data, not to the universe of data from all covered entities owned by Second Sight. Beyond influencing government policy, covered-entity-provided 340B and Beacon data may also enable the pharmaceutical industry to lobby insurers for favorable formulary inclusion and reimbursement decisions. Claims-derived data on utilization help the industry build pharmacoeconomic models that support inclusion and ensure the real-world representativeness of the analyses used in reimbursement policy (Levine and LeLorier, 2012). Nineteen of 20 industry scientists surveyed by Olson et al. (2003) reported that models had played a role in optimizing the formulary positioning of their products. Section 114 of the 1997 Food and Drug Administration Modernization Act enables drug manufacturers to promote their drugs to 24 formulary decisionmakers, and data-driven promotional materials can be helpful tools to do so (Neumann et al., 2011). While estimated rates of return of lobbying expenditures in the pharmaceutical industry are scarce, one recent example is suggestive of the potential impacts. Poulos (2026) writes that $150 million in industry lobbying in 2025 helped secure $8.8 billion in savings over the next decade ($880 million per year) through rollbacks of drug price negotiation provisions in the One Big Beautiful Bill (OBBB). This implies $730 million in net profits annually per $150 million in expenditures, or a rate of return of 487%. For a program the size of 340B ($81.4 billion per year), any federal legislative victories enabled by ESP/Beacon data would likely increase industry revenue by billions of dollars. Victories at the state level would likely mean millions. To provide a rough estimate of the potential lobbying value of covered-entity-provided ESP/Beacon data, suppose these data create a 20% change of a favorable change in federal legislation of the same magnitude of the OBBB victory ($880 million annually). This yields an expected value of $176 million. Suppose they also enable a 20% chance of legislative victory in each state that is 1/50 of $880 million, or $17.6 million. In expectation, ten states would enact such legislation, making the overall expected value another $176 million. Therefore, the total expected value including both state and federal legislation would be $352 million. While one might argue for a lower probability than 20%, one could also argue that major legislative wins would be much larger than $880 million given the 340B programs size. Also, this analysis ignores any possible value from improved odds of formulary inclusion. D. Physician Targeting Drug companies also direct significant lobbying efforts towards physicians a practice known as detailing. Although direct kickbacks from drug companies to physicians based on 25 prescribing rates are prohibited, manufacturers can still leverage gifts, speaking and consulting fees, research funding, and even ownership interests to exert indirect influence (McCabe Law Firm, 2026). The Physician Payments Sunshine Act, enacted as part of the Affordable Care Act in 2010, required disclosure of industry payments to physicians. However, the CMS Final Rule created significant loopholes, exempting payments for meals at large gatherings, indirect payments for accredited CME programs, drug samples, and discounts or rebates (Lichter, 2015). Direct outreach to physicians is an effective way to boost sales. For instance, In Washington, DC, receiving gifts from pharmaceutical companies led physicians to write more prescriptions, more costly prescriptions, and more branded prescriptions (Roehr, 2017). Brunt (2018) finds that transfers from drug companies to physicians increase prescription costs and the rate of prescribing branded and high-risk drugs. Mehta et al. (2020) shows that payments to physicians increase Pimavanserin prescriptions and Medicare expenditures. Duarte-Garcia et al. (2022) document that payments to rheumatologists increase prescribing probability and Medicare spending. Physician-identifying prescription data, which includes the prescribers name, the drug prescribed, the dose, and prescribing patterns over time, are widely used by pharmaceutical companies to enhance the effectiveness of their outreach efforts (Greene, 2007). Health information organizations (HIOs) purchase de-identified patient prescription records from pharmacies and link them to comprehensive physician databases such as those sold by the American Medical Association to construct prescriber profiles at the individual level (Fugh- Berman, 2008). These profiles can segment physicians by prescribing volume, specialty, receptivity to marketing, and early versus late adoption of new drugs (Gostin, 2012). These data, along with data from pharmacies and medical practices, enable pharmaceutical companies to 26 tailor sales pitches and marketing strategies to individual physicians (Fugh-Berman, 2008). Data- enabled prescriber profiling improves profit margins by up to 3 percentage points and initial drug uptake by 30% (Grande, 2007). The pharmaceutical industry has devoted considerable resources to protecting its ability to obtain and utilize physician data, demonstrating a belief in the value of these data. For instance, when New Hampshire became the first state to prohibit the sale of prescriber information for pharmaceutical sales and marketing purposes in 2006, HIOs challenged the law on commercial free speech grounds (Grande, 2007). A similar argument was made when a 2011 Supreme Court decision Sorrell v. IMS Health struck down a Vermont statute requiring pharmacies to obtain prescriber consent before releasing prescriber-identifying information to data miners (Zimmerman, 2020). The AMA created the Prescribing Data Restriction Program (PDRP) as a compromise, allowing physicians to opt out of having their prescribing data made available to sales representatives. However, fewer than 2% of US physicians registered (Fugh- Berman, 2008). Second Sights platforms provide a valuable new source of physician data that have the potential to enhance the effectiveness of drug manufacturers physician targeting efforts. This is enabled by the inclusion of the prescribers linkable ID code as a claim submission field (340B ESP, 2026). The FAQ only promises that RX number and serialization are de-identified, implying that physician identifiers remain. Since physician identifiers are not necessary to identify improper claims, not de-identifying these providers suggests an additional motive. Information on prescribing physicians and pharmacies would be of enormous value to drug companies. For instance, they would be able to identify high-340B-volume physicians and pharmacies and target them through either direct outreach or changes to rules and regulations. 27 Given pharmaceutical companies expertise in deploying sales representatives to influence the prescribing behavior of physicians, it is not hard to envision them developing similarly effective methods of influencing 340B volume. On a larger scale, drug companies could use ESP data with physician and pharmacy identifiers to conduct market research by implementing certain types of outreach for certain physicians or pharmacies on a randomized basis to determine which approaches are most effective. A study by Carey et al. (2021) finds that the return on investment for pharmaceutical sales visits and payments to physicians could be over 400%. With ESP data, it would be easy for drug companies to conduct similar types of analyses that are specific to 340B. Furthermore, sticks could be used in addition to carrots. Prescribers could be vulnerable to potential retaliation if their prescribing practices are viewed as problematic because they are associated with a covered entity with poor drug purchasing habits. There does not appear to be anything stopping a manufacturer from using the data it sees on specific prescribers and pharmacies to alter its 340B distribution policy and form additional rules about distribution based on acceptable levels of prohibited incidents. Of the empirical studies mentioned earlier in this section, Mehta et al. (2020) presents results in a form that is particularly useful for projecting the possible value of 340B-data- enhanced physician targeting efforts. Among other findings, they report that every $100 in physician payments increased Medicare Pimavanserin expenditures by $175.84 a 76% return on investment. King and Berman (2013) report that the pharmaceutical industry spent $15.7 billion on physician detailing in 2011. Adjusting for inflation using Consumer Price Index data from the Bureau of Labor Statistics, that amount becomes $22.48 billion in 2025$. A 76% return on investment implies an increase in revenue of $39.56 billion. Suppose, conservatively, that 28 covered-entity-provided 340B data in Second Sights platforms increases the effectiveness of detailing efforts by 5%. The revenue would grow to $41.54 billion an increase of $1.98 billion. Therefore, improved physician targeting efforts represent another important source of value. E. Individual Claims Data Data on individual transactions could potentially provide additional value over and above the physician- and facility-level information they convey. Patient-level data enables drug companies to learn more about their customers and the markets for their products. Companies across numerous industries routinely purchase data on customers or potential customers that can provide a strategic business advantage. As shown in the appendix tables listing the information collected by ESP and Beacon, little patient-level data will be collected. Patients are de-identified, and no information on demographic characteristics, diagnoses, or health histories is recorded. However, given the broad licensing terms for the 340B ESP and Beacon platforms, manufacturers could conceivably link the data that they receive to other datasets they maintain using an identifier such as the prescription number. Although individual claims data in this case therefore cannot be used in isolation to understand the individual, they could nonetheless be used for several valuable purposes. These include, for instance, understanding geographic patterns of utilization, whether 340B drugs are filled at in-house or contract pharmacies, how many contract pharmacies are utilized by patients of particular facilities, how far away the contract pharmacies are, and which facilities have the highest double discounting rates. While these sources of value are potentially important, they have likely already been captured to some extent by the categories already discussed, particularly duplicate discounting, lobbying, and physician targeting. I therefore err on the side of caution and do not claim additional value here. That is, the data provided by covered entities is clearly 29 valuable in the aggregate, and the value of any individual claim derives from the manner in which a manufacturer uses it. F. Sublicensing of Data Second Sight retains the right to sublicense the data at its sole discretion. There would be considerable demand among both researchers and businesses for such detailed pharmaceutical claims data. If the Second Sight data platforms are fully utilized to cover the universe of 340B prescriptions, they would have a substantial advantage over other datasets in terms of size, which in turn gives them a wider variety of uses in academic and business research. The only administrative prescription drug dataset of comparable size would be Medicare claims data, which is limited by only having Medicare patients. If the Second Sight dataset were to be made available, the company could expect a wave of scholarly researchers writing grants to government agencies and private foundations in order to fund its purchase. This would, in turn, enable the dataset to be sublicensed for a substantial fee, likely in the five-figure range. Businesses across the health-care industry and beyond would also likely be willing to pay similar amounts for the purpose of market research. This could either take the form of sublicensing the data for their own internal staff to analyze or contracting with Second Sight staff for customized research reports. To estimate the value of such opportunities, I consider another private company that sells extensive health care claims data albeit with a somewhat different scope and prepares customized reports: Trilliant Health (Trilliant Health, 2026). Although the company is private and therefore does not release public financial reports, its annual revenue is estimated at $11.8 million (Bitscale, 2026). Therefore, while the ability to sublicense data or sell data reports to 30 scholarly researchers or other businesses provides tangible value to Second Sight, this value is likely much smaller than the other sources discussed previously. IV. Discussion and Conclusion This report argues that drug manufacturers are unilaterally forcing covered entities to hand over valuable information without compensation by threatening to withhold the 340B discount that is mandated by law. This could be argued to meet the legal definition of extortion: the wrongful use of actual or threatened force, violence, or intimidation to gain money or property from an individual or entity (Chen, 2026). Even further, much of the value of the information comes from the ability to harm these same covered entities through claim denials or lobbying advantages. Moreover, ESP reporting requirements impose substantial administrative burdens on covered entities and pharmacies. In effect, then, the more accurate statement would be that these entities are actually being forced to provide valuable information with negative compensation. If fully implemented, the value from covered-entity-provided information being collected by the drug-industry-connected portals ESP and Beacon can be expected to take several forms. One of these is the stated objective of curbing double discounting, which I estimate to have an annual value of $1.57 billion. However, the other sources of value which are not acknowledged by manufacturers appear to be much more substantial. First, I estimate the ability to avoid paying valid claims to have a value of $7 billion if a rebate model is approved. Second, the opportunity to create derivative data products to use for lobbying purposes has an estimated $352 million value. Next, I estimate $1.98 billion in value from using the data to better target and influence physician prescribing decisions. Finally, a modest additional value of $11.8 million comes from the ability to sell access to the data to researchers in both industry and academia. 31 Combined, these other sources of value add up to $9.33 billion per year almost three times the total amount of double discounting, which I estimate to be $3.13 billion, and over 11% of the size of the entire 340B program. Of course, predicting the impacts of events that have not yet occurred requires a number of strong assumptions, such as that the frequency of denials of valid claims will mirror that of the health insurance industry. Therefore, my estimates should be interpreted as illustrations of potential magnitudes rather than exact forecasts. Nonetheless, the fact that the estimated other sources of value add up to be so much greater than the estimated value from reducing double discounting is strongly suggestive of additional motivations on the part of drug manufacturers. Recent anecdotal evidence provides further support for the hypothesis that the true motive of the pharmaceutical industry is to reduce the financial burden from the 340B program through by any means possible, rather than merely identifying and eliminating errors. First, manufacturers attacks on the program extend far beyond the data platforms and rebate model emphasized in this report. 40 drug companies have imposed distribution limitations, which typically involve attempting to shrink covered entities networks of contract pharmacies (Kodiak, 2026). HRSA responded by sending letters informing manufacturers that these actions violated the 340B statute. This led to lawsuits challenging HRSAs authority to issue these letters, which in turn led to 20 states passing legislation to protect covered entities and contract pharmacy arrangements, which in turn led to dozens of additional lawsuits challenging these state laws. Duplicate discounting is again given as a justification for these restrictions and lawsuits (Congress.gov, 2025; Moldwater et al., 2025). However, the scale of these efforts seems disproportionate to the relatively modest amount of money lost to duplicate discounting. The far 32 more obvious benefit to manufacturers is simply lowering the share of 340B-eligible drugs that are filled at contract pharmacies, thereby reducing the share of drugs given the discount. Additionally, covered entities experience with Second Sights platforms thus far is consistent with the concern expressed in Sections I and IIIA about the companys conflict of interest leading to denial of valid claims and lengthy administrative delays in getting issues resolved. For instance, when manufacturers turned off 340B pricing until covered entities registered with ESP, covered entities reported significant problems and delays with getting 340B pricing restored after registration. This led provider groups to allege that the real purpose of the platform is to undermine the 340B program and to call for the passage of the 340B Protect Act, which would require HRSA to appoint a neutral third party to oversee the claims clearinghouse (True, 2022). More recently, problems have arisen with the implementation of the Inflation Reduction Acts Maximum Fair Price (MFP) refunds for the ten drugs used in Medicare Part Ds pilot program for price negotiations. Manufacturers have been requiring the use of a Beacon spin-off product Beacon MFP to communicate with 340B covered entities regarding MFP refunds (Beacon Channel Management, 2025). According to a letter to the Centers for Medicare and Medicaid Services (CMS) from the President and CEO of Americas Essential Hospitals Jennifer DeCubellis, some manufacturers are denying refund claims via Beacon MFP because they erroneously believe that the claim was already replenished by 340B. This is being done on the basis of proxy information rather than confirmed claim-level 340B status a practice prohibited by CMS in its Medicare Drug Price Negotiation Program final guidance. When covered entities dispute these denials, they are prompted to submit supporting documentation through ESP, which is a new platform for covered entities in states where mandating its use for 340B claims is 33 prohibited (DeCubellis, 2026). This is in spite of the fact that, according to manufacturers, Beacon MFP has the capability to handle the submission of documentation (AstraZeneca, 2025; Novo Nordisk, 2025). The resulting administrative burden imposed on covered entities is substantial, and refunds can be delayed indefinitely, causing liquidity issues for some hospitals (DeCubellis, 2026). In contrast to this convoluted and time-consuming process for correcting errors that were originally made in favor of manufacturers, Beacon MFP offers a simple, streamlined process for errors originally made in favor of covered entities (Johnson & Johnson, 2026). It is important to note that platforms that are genuinely third-party already exist that have been used by manufacturers to identify duplicate discounts (Singh, 2023). To provide one example, Kalderos, founded in 2016, states that they have helped with 70,000 Medicaid Drug Rebate Program claims (2026). This calls into question whether the reason manufacturers chose to require the utilization of Second Sights platforms as opposed to others is because of the companys connection to the drug industry. In short, I conclude based on the available evidence that pharmaceutical manufacturers requiring use of industry-connected data platforms and lobbying for a rebate model are part of a broader effort to shrink the size of the 340B program by as much as possible using all available means. Correcting errors such as double discounting is given as the justification, but this represents a relatively small amount of the financial benefits manufacturers stand to gain. These efforts should come as no surprise, as for-profit companies objective is to maximize profits, and industry lobbying organizations exist to help them achieve that objective. Accordingly, the federal government should step into the role of neutral referee rather than trusting that data 34 platforms developed by a company with extensive ties to the drug industry will serve that purpose. Acknowledgment I acknowledge support for this research from a grant from the Kentucky Hospital Association and a consulting agreement with Hall, Render, Killian, Health, & Lyman, P.C. The author is fully responsible for the content of this report, which did not require approval of the funders. I thank Joseph Garuccio and Venkatesh Suryadevara for valuable research assistance. 35 References 340B ESP (2024). 340B ESP covered entity portal terms of use. Retrieved April 2, 2026, from https://340besp.com/terms-of-use#section3. 340B ESP (2026). Frequently asked questions (FAQs). 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(2019). Physician characteristics, industry transfers, and pharmaceutical prescribing: Empirical evidence from Medicare and the Physician Payment Sunshine Act. Health Services Research, 54, 636649. https://doi.org/10.1111/1475-6773.13064. Carey, C., Lieber, E. M., & Miller, S. (2021). Drug firms payments and physicians prescribing behavior in Medicare Part D. Journal of Public Economics, 197, 104402. https://doi.org/10.1016/j.jpubeco.2021.104402. Centers for Medicare and Medicaid Services (2023). Medicaid drug rebate prior quarter adjustment statement (PQAS). Retried April 15, 2026, from https://www.medicaid.gov/medicaid/prescription-drugs/downloads/form-304a-PQAS.pdf. Chen, J. (2026). Understanding extortion: Threats, examples, and legal implications. Investopedia. Retrieved April 3, 2026, from https://www.investopedia.com/terms/e/extortion.asp. Congress.gov (2025). The 340B drug discount program: Litigation topics and trends. 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Association between payments by pharmaceutical manufacturers and prescribing behavior in rheumatology. Mayo Clinic Proceedings, 97(2), 250- 260. https://doi.org/10.1016/j.mayocp.2021.08.026. Eli Lilly (2026). Update to Lillys 340B distribution program for in-house pharmacies. Retrieved April 3, 2026, from https://cervey.com/wp-content/uploads/2026/01/Comprehensive-Lilly- Notice-to-340B-Covered-Entities-Effective-2-1-26-2-1.pdf. Fein, A.J. (2024). The 340B program reached $66 billion in 2023 up 23% vs. 2022: Analyzing the numbers and HRSAs curious actions. Drug Channels. Retrieved April 15, 2026, from https://www.drugchannels.net/2024/10/the-340b-program-reached-66-billion-in.html. Fugh-Berman, A. (2008). Prescription tracking and public health. Journal of General Internal Medicine, 23, 1277-1280. https://doi.org/10.1007/s11606-008-0630-0. Garlick, A. (2025). Pre-Existing Conditions: How Lobbying Makes American Health Care More Expensive. Oxford, UK: Oxford University Press. https://doi.org/10.1093/9780197813935.001.0001. Grande, D. (2007). Prescriber profiling: Time to call it quits. Annals of Internal Medicine, 146, 751-752. https://www.acpjournals.org/doi/10.7326/0003-4819-146-10-200705150-00010. Greene, J.A. (2007). Pharmaceutical marketing research and the prescribing physician. History of Medicine, 146, 10. https://doi.org/10.7326/0003-4819-146-10-200705150-00008. Greenwalt, L. (2022). Trends to watch through 2023: The 340B drug discount program. IQVIA. Retrieved April 3, 2026, from https://www.iqvia.com/locations/united- states/blogs/2022/03/trends-340b-drug-discount-program. Gostin, L.O. (2012). Marketing pharmaceuticals: a constitutional right to sell prescriber- identified data? Journal of the American Medical Association, 307(8), 787-788. https://10.1001/jama.2012.182. 37 Government Accountability Office (2018). Drug discount program: Federal oversight of compliance at 340B contract pharmacies needs improvement. https://www.gao.gov/assets/d18480.pdf. Hardaway, J. (2016). 340B program puts manufacturers at risk of duplicate drug discounts. P&T: A Peer-Reviewed Journal for Formulary Management. 41(1), 38. https://pmc.ncbi.nlm.nih.gov/articles/PMC4699484/. Health Resources and Services Administration (2010). Notice regarding 340B drug pricing program-contract pharmacy services. US Department of Health and Human Services. https://www.federalregister.gov/documents/2010/03/05/2010-4755/notice-regarding-340b-drug- pricing-program-contract-pharmacy-services. Health Resources and Services Administration (2014). Clarification on use of the Medicaid Exclusion File. US Department of Health and Human Services. https://www.hrsa.gov/sites/default/files/hrsa/opa/clarification-medicaid-exclusion.pdf. Health Resources and Services Administration (2024). 340B drug pricing program. US Department of Health and Human Services. https://www.hrsa.gov/opa. Health Resources and Services Administration (2025a). 2024 340B covered entity purchases. US Department of Health and Human Services. Retrieved April 6, 2026, from https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases. Health Resources and Services Administration (2025b). 340B Administrative Dispute Resolution (ADR). Retrieved April 6, 2026, from https://www.hrsa.gov/opa/340b-administrative-dispute- resolution/340b-adr-decision-summaries. Health Resources and Services Administration (2025c). 2024 340B covered entity purchases. Retrieved April 6, 2026, from https://www.hrsa.gov/opa/updates/2024-340b-covered-entity- purchases. Health Resources and Services Administration (2026a). 340B ADR decision summaries. Retrieved April 6, 2026, from https://www.hrsa.gov/opa/340b-administrative-dispute-resolution. Health Resources and Services Administration (2026b). Program integrity. Retrieved April 6, 2026, from https://www.hrsa.gov/opa/program-integrity. Jachimowicz, J.M., Duncan, S., Weber E., & Johnson E.J. (2019). When and why defaults influence decisions: a meta-analysis of default effects. Behavioural Public Policy, 3(2), 159-186. https://doi:10.1017/bpp.2018.43. Johnson & Johnson (2025). Notice to 340B stakeholders regarding purchases of STELARA, USTEKINUMAB (Unbranded STELARA) and XARELTO. Retrieved April 15, 2026, from https://www.jnj.com/innovativemedicine/us/download/JJHCS%20Notice%20to%20340B%20Sta keholders%20Regarding%20Participation%20in%20HRSA's%20Rebate%20Model%20Pilot.pdf 38 Johnson & Johnson (2026). Self-Identify 340B claims in Beacon MFP to prevent duplicate MFP rebates. Retrieved April 15, 2026, from https://cdn.ymaws.com/www.ascp.com/resource/resmgr/docs/prc/340B_Claims.pdf. Kaiser Family Foundation (2025). The Ryan White HIV/AIDS Program: The basics. Retrieved April 7, 2026, from https://www.kff.org/other/fact-sheet/the-ryan-white-hiv-aids-program-the- basics/. Kalderos (2026). Retrieved April 7, 2026, from https://www.kalderos.com/. Levine, M.A. & LeLorier, J. (2012). Pharmacoepidemiology and Pharmaceutical Reimbursement Policy. Chapter 31, Pharmacoepidemiology, Fifth Edition. West Sussex, UK: Wiley-Blackwell. https://doi.org/10.1002/9781119959946.ch31. Lichter, P.R. (2015). Implications of the Sunshine Act revelations, loopholes, and impact. Opthalmology, 122(4), 653-655. https://10.1016/j.ophtha.2014.12.029. Lin, G., Coffman, J., Douglas, M., & Phillips, K. (2025). Use of independent medical review: Almost one-half of coverage denials overturned. Health Affairs, 45(1), 63-67. https://doi.org/10.1377/hlthaff.2025.00716. Long, M., Lo, J, & Pestaina, K. (2026). Claims denials and appeals in ACA Marketplace plans in 2024. Kaiser Family Foundation. Retrieved April 6, 2026, from https://www.kff.org/patient- consumer-protections/claims-denials-and-appeals-in-aca-marketplace-plans-in-2024/. McCabe Law Firm (2026). Do pharmaceutical companies pay doctors? Retrieved April 10, 2026, from https://whistleblowerlaw.com/do-pharmaceutical-companies-pay-doctors/. Mehta, H.B., Moore, T.J., & Alexander, G.C. (2020). Association of pharmaceutical industry payments to physicians with prescription and Medicare expenditures for Pimavanserin. Psychiatric Services, 72(1), 77-80. https://doi.org/10.1176/appi.ps.202000251. Mirga, T. (2022). Twice as many providers as in May are submitting 340B drug claims data to 340B ESP, Pharma Contractor Says. 340B Report. Retrieved April 3, 2026, from https://340breport.com/twice-as-many-providers-as-in-may-are-submitting-340b-drug-claims- data-to-340b-esp-pharma-contractor-says/. Moldwater, L.M., Hardy, X.G., & Abdie Santiago, M. (2025). Mintz IRA update 340B roundup: states and manufacturers continue to battle over 340B contract pharmacies. National Law Review. Retrieved April 14, 2026, from https://natlawreview.com/article/mintz-ira-update- 340b-roundup-states-and-manufacturers-continue-battle-over-340b. Neumann, P.J., Lin, P., & Hughes, T.E. (2011). US FDA Modernization Act, Section 114. PharmacoEconomics, 29, 687-692. https://doi.org/10.2165/11590510-000000000-00000. 39 Nguyen, T. & Suresh, R. (2024). What you need to know about 340B duplicate discounts. Edgeworth Economics. Retrieved April 6, 2026, from https://www.lexology.com/library/detail.aspx?g=da4e4dc0-0386-4e28-9739-75c9e56962c2. Nikpay, S. & Halvorson, L. (2023). Growing administrative complexity in the 340B program and the rise of third-party administrators, Health Affairs Scholar, 1(5), qxad052. https://doi.org/10.1093/haschl/qxad052. Nikpay, S., Bruno, J., & Carey, C. (2024). Recent court ruling could increase the size and administrative complexity of the 340B program. Health Affairs Scholar, 2(12), qxae157. https://doi.org/10.1093/haschl/qxae157. Norman, B. & Karlin-Smith, K. (2016). The one that got away: Obamacare and the drug industry. Politico. https://www.politico.com/story/2016/07/obamacare-prescription-drugs- pharma-225444. Novo Nordisk (2025). Appendix B: Drug price negotiation program MTF DM primary manufacturer MFP effectuation plan form. Manufacturer completion of CMS form retrieved April 15, 2026, from https://www.cms.gov/files/document/mfp-effectuation-plan-form.pdf. Oliver, T. R., Lee, P. R., & Lipton, H. L. (2004). A political history of Medicare and prescription drug coverage. The Milbank Quarterly, 82(2), 283354. https://doi.org/10.1111/j.0887- 378X.2004.00311.x. Olson, B.M., Armstrong, E.P., Grizzle, A.J., and Nichter, M.A. (2003). Industrys perception of presenting pharmacoeconomic models to managed care organizations. Journal of Managed Care Pharmacy, 9(2): 159-67. https://www.jmcp.org/doi/10.18553/jmcp.2003.9.2.159. Pillai, Akash, Tolbert, Jennifer, & Bell, Clea (2026). Community health center patients, financing, and services. Kaiser Family Foundation. Retrieved April 7, 2026, from https://www.kff.org/medicaid/community-health-center-patients-financing-and-services/. Popovian, R., Sydor, A. M., Czubaruk, K., Walker, M., & Smith, W. (2026). Financial outcomes and community benefit in the 340B Program: Comparing 340B and non-340B hospitals. medRxiv. https://doi.org/10.64898/2026.02.12.26346191. Poulos, J. (2026). How pharmaceutical industry money blocks Congressional drug price reform. Retrieved April 9, 2026, from https://poulos.house/2026/01/17/pharmaceutical-money-blocks- drug-price-reform.html. Rayfield, B. & Unsal, O. (2019). Product recalls, lobbying, and firm value. Management Decision, 57(3): 724-740. https://doi.org/10.1108/MD-06-2017-0581. Roehr, B. (2017). Pharma gifts associated with higher number and cost of prescriptions written. British Medical Journal, 359. https://doi.org/10.1136/bmj.j4979. 40 Second Sight Solutions (2020). Inside 340B ESP. Retrieved April 2, 2026, from https://340besp.com/about. Shalev, L.S. & Freixanet, J. (2023). Higher lobbying expenditures associated with increased annual revenue. Vestnik of St. Petersburg University Management. 22, 1: 61-83. https://api.dspace.spbu.ru/server/api/core/bitstreams/d5a22dca-c168-4bca-837f- e6b01f5e8378/content. Singh, P. (2023). Understanding and tackling the complexities of 340B duplicate discount scrubbing. IQVIA white paper. Available iqvia-340b-duplicate-discount-scrubbing-white-paper- 2023.pdf. Trilliant Health (2026). AI-powered answers for healthcare strategy. Retrieved April 10, 2026, from https://www.trillianthealth.com. True, S. (2022). Part 1: I dont want to go through this nightmare: Frustrations grow over significant delays in restoration of 340B pricing for contract pharmacy purchases. 340B Report. Retrieved April 2, 2026, from https://340breport.com/i-dont-want-to-go-through-this-nightmare- frustrations-grow-over-significant-delays-in-restoration-of-340b-pricing-for-contract-pharmacy- purchases/. Unsal, O. (2016). Two faces of corporate lobbying: Evidence from the pharmaceutical industry. The North American Journal of Economics and Finance, 51, 100858. https://www.sciencedirect.com/science/article/abs/pii/S1062940818302596?via%3Dihub. Vandervelde, A., Brownless, A., & Blalock, E. (2023). Potential impact of a more expansive patient definition post-Genesis. Berkeley Research Group. Retrieved April 15, 2026, from https://media.thinkbrg.com/wp-content/uploads/2023/12/04161705/340B-Genesis-One- pager_2023.pdf. Young, S. (2025). Second Sight Solutions parent company targeted in cyber attack, firm says 340B platforms do not appear to have been affected. 340B Report. Retrieved April 6, 2026, from https://340breport.com/second-sight-solutions-parent-company-targeted-in-cyber-attack-firm- says-340b-platforms-do-not-appear-to-have-been-affected/. Zhou, Y. (2023). The effects of lobbying on the FDAs recall classification. BMC Medical Ethics 24, 41. https://doi.org/10.1186/s12910-023-00921-0. Zimmerman, A.H. (2020). Marketing madness: The disingenuous use of free speech by big data and big pharma to the detriment of medical data privacy. Voices in Bioethics, 6. https://doi.org/10.7916/vib.v6i.5901. 41 Appendix Table 1 Data Collected by ESP Field Data Type Description Contracted Entity ID* Alpha numeric ID that may contain dashes-- starts with 2 or 3 letters The 340B ID of the covered entity where the prescription originated. If the 340B ID contains a suffix, this must be included. Date of Service* Standard Date Formats The date the patient filled their prescription. Please include only the date, as time stamps will flag an error. Date Prescribed* Standard Date Formats The date the prescriber wrote the prescription. Please include only the date, as time stamps will flag an error NDC* Numeric, 11 digits, may contain up to 4 leading zeros The 11-digit National Drug Code which indicates the manufacturer, product, and commercial package size - note that this field must have 11 digits so please include zero padding. Prescriber ID** Numeric, 10 digits, never starts with a leading zero The unique public ID for the prescribing physician. Accepted IDs include the NPI and DEA ID. Prescriber ID Qualifier** Numeric Indicates the type of unique ID provided. A value of "01" indicates NPI, "12" indicates DEA. Quantity* Numeric The number of units in the prescription. Rx Number* Numeric, may contain leading zeros The native (unmodified) prescription number for the prescription as generated by the pharmacy. Service Provider ID* Numeric, 10 digits, never starts with a leading zero The unique public ID for the dispensing pharmacy. Accepted IDs include the NPI, DEA, NCPDP, and Medicaid ID. Service Provider ID Qualifier** Numeric The type of unique ID provider. "01" for NPI, "05" for Medicaid, "07" for NCPDP, and "12" for DEA. Wholesaler Invoice Number Numeric The invoice number assigned by the wholesaler for the replenishment order made by the 340B covered entity. If the 42 claim relates to multiple wholesaler invoices, all invoice numbers should be reported, delimited by commas. Payer BIN** Alpha numeric, may contain leading zeros The bank identification number of the primary payer on the prescription. Payer PCN** Alpha numeric, may contain leading zeros Processor Control Number. Identifier used to determine which processor will handle a prescription drug claim. Ship to Date Standard Date Formats Date when the drug was shipped to the Ship To location. Ship to Location Numeric NPI, DEA, or NCPDP of the pharmacy where the drug was physically shipped. 340B Account Number Alpha numeric Account number assigned by the wholesaler and used for the purchase. Product Serialization Number Numeric Unique ID assigned to the package shipped from the manufacturer to the wholesaler. Fill Number Numeric Indicates the number of times the prescription has been filled as of the current fill. For example, a value of 2 indicates that the prescription has been filled twice and the current fill is the second one. *Indicates a required field for all 340B ESPTM submissions regardless of NDC. **Indicates a field that may be required depending on the manufacturer. Please review the manufacturer policies in the Resources page to learn more. What data elements are deidentified in 340B ESP? The Rx Number and Product Serialization number are de-identified through a HIPAA compliant hashing process known as SHA-3 hashing. An additional layer of security called a salt is applied prior to any data being uploaded to 340B ESPTM. This process was granted an Expert Determination indicating that it meets the definition of a De-Identified Data Set under HIPAA and does not contain PHI. Additional information on this expert determination may be requested by contacting us. The policies on 340B ESP suggest that at least Exelixis, Bristol Myers Squibb, and Gilead will require that prescriber ID be submitted, and more broadly, the dispensing pharmacy is a required submission for all claims. 43 Appendix Table 2 Data Collected by Beacon Field Data Type Description 340B ID* Alpha/Numeric The unique identification number provided by HRSA to the 340B covered entity. Date Prescribed* Standard date formats Date the prescriber wrote the prescription. Date of Service* Standard date formats Date on which the pharmacy filled the prescription. Rx Number* Numeric The native (unmodified) prescription number for the prescription as generated by the pharmacy. Fill Number* Numeric - 0-99 Indicates the number of times a prescription has been filled. NDC-11* Numeric - 11 digits The 11-digit National Drug Code which indicates the manufacturer, product, and the commercial package size. Quantity Dispensed* Numeric The number of units dispensed to the patient. Prescriber ID* Numeric - 10 digits National provider identifier (NPI) of the physician that wrote the prescription. Service Provider ID* Numeric - 10 digits NPI of the pharmacy that filled the prescription. Rx Bin* Numeric - 6 digits Prescription Drug Bank Identification Number. Enables pharmacies to electronically transmit data to the appropriate PBM for processing and reimbursement. Include BIN for the primary payer on the claim. If patient is uninsured or a cash payer, mark 999999 in this field. Rx PCN* Alpha/Numeric Processor Control Number. Identifier used to determine which processor will handle a prescription drug claim. Include PCN for the primary payer on the claim. If patient is uninsured or a cash payer, mark CASH in this field. If there is no PCN, mark NONE in this field. *Indicates a required field What data is de-identified for claims submissions? Rx number, product serialization number and claim number are deidentified. This process was granted an Expert Determination and meets the definition of a De-Identified Data Set under HIPAA. Attachment 2 1 ATTACHMENT 2: PHRMA-FUNDED WHITEPAPERS PUBLISHED BY BERKELEY RESEARCH GROUP Title Date Author(s) PDF URL The Pharmaceutical Supply Chain: Gross Drug Expenditures Realized by Stakeholders January 18, 2017 Aaron Vandevelde and Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2020/06/151329 36/Vandervelde_PhRMA-January- 2020.3.3-Addendum-MM.pdf Measuring the Relative Size of the 340B Program: 20122017 July 13, 2017 Aaron Vandervelde and Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2020/06/190946 27/928_928_Vandervelde_Measur ing340Bsize-July- 2017_WEB_FINAL.pdf Increases in Part B Drug Utilization at Enrolling 340B Hospitals December 2018 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2020/06/011733 52/Part-B-Drug-Utilization- Increase-2018_cleaned.pdf Measuring the Relative Size of the 340B Program: 2018 Update June 2020 Aaron Vandervelde https://media.thinkbrg.com/wp- content/uploads/2020/06/171224 36/BRG-340B- Measuring_2020_cleaned.pdf For-Profit Pharmacy Participation in the 340B Program October 7, 2020 Aaron Vandervelde, Kevin Erb, and Lauren Hurley https://media.thinkbrg.com/wp- content/uploads/2020/10/061507 26/BRG- ForProfitPharmacyParticipation34 0B_2020.pdf Measuring the Relative Size of the 340B Program: 2020 Update June 30, 2022 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2022/06/301248 32/BRG-340B-Measuring-Relative- Size-2022.pdf Measuring the Relative Size of the 340B Program: 2022 Update May 2024 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2022/06/301248 32/BRG-340B-Measuring-Relative- Size-2022.pdf Private Equity and Corporate Investment Activity in 340B August 2024 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2024/08/261303 12/340B_Private-Equity-and- Corporate-Investment- Activity_2024.pdf CMS October 2024 Final Guidance for MFP Effectuation in 2026- 2027: Implications for Duplication with the 340B Channel October 23, 2024 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2024/10/231612 14/BRG-Implications-for- Duplication-with-_the-340B- Channel-2024.pdf Attachment 2 2 Title Date Author(s) PDF URL The Pharmaceutical Supply Chain, 20132023 January 2025 Eleanor Blalock, Mira Ferritto, and Jeannie Taylor https://media.thinkbrg.com/wp- content/uploads/2025/01/061618 50/PhRMA_Supply-Chain-2013- 2023_White-Paper.pdf The Financial Impact to Medicaid from Contract Pharmacy 340B Manufacturer Mandates April 2025 Eleanor Blalock and Carlee Launsbach https://media.thinkbrg.com/wp- content/uploads/2025/04/090721 17/PhRMA-Medicaid-State- Rebates-Whitepaper-2025_F.pdf The Financial Impact to Medicare from the 340B Drug Pricing Program (October 2025) October 2025 Eleanor Blalock and Jeannie Taylor https://media.thinkbrg.com/wp- content/uploads/2025/10/141422 43/The-Financial-Impact-to- Medicare-from-the-340B-Drug- Pricing-Program_Oct2025.pdf Site-of-Care Shift for Physician-Administered Drug Therapies: 2026 Update January 20, 2026 Eleanor Blalock and Carlee Launsbach https://media.thinkbrg.com/wp- content/uploads/2026/02/091126 23/Site-of-Care-Refresh- 2026_02092026.pdf Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027 April 2026 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2026/04/031014 42/Effectuation-of-the-Maximum- Fair-Price-in-2026-and-Outlook- to-2027.pdf 340B Patient Definition and Implications for Duplicate Replenishment April 10, 2026 Eleanor Blalock https://media.thinkbrg.com/wp- content/uploads/2026/04/101413 02/340B-Patient-Definition-and- Implications-for-Duplicate- Replenishment.pdf 1 ATTACHMENT 3 Letter to CMS Regarding Berkeley Research Group Hall, Render, Killian, Heath & Lyman, P.C. 330 East Kilbourn Avenue, Suite 1250 Milwaukee, WI 53202 https://www.hallrender.com Todd A. Nova (414) 721-0464 tnova@hallrender.com T. James Junger (414) 721-0922 jjunger@hallrender.com April 20, 2026 Via Email to MFPMedicareTransactionFacilitator@cms.hhs.gov Centers for Medicare & Medicaid Services U.S. Department of Health & Human Services RE: Improper Disclosure and Use of CMS Data To Whom It May Concern: This letter discloses the improper handling of CMS Data under the Medicare Drug Price Negotiation Program in violation of CMS requirements (Incident). We became aware of the Incident through a review of publicly available records. We are requesting that CMS investigate this issue and take appropriate action against the parties involved to protect Medicare beneficiaries and the dispensing entities they trust with their healthcare information. We submit this letter as legal counsel representing one or more clients. I. Background The Incident involves the apparent disclosure and use of CMS Data, as that term is defined in the Data Use Provisions of the Medicare Transaction Facilitator Data Module User Agreement between CMS and each manufacturer participating in the Medicare Drug Price Negotiation Program (MDPNP) for Initial Payment Applicability Year 2026 (IPAY 2026) (the MTF User Agreement). Capitalized terms not defined in this letter have the meaning assigned to them in the Agreement. Relevant elements of the Data Use Provisions that appear to have been breached include the following. We describe those violations later in this letter. A manufacturer may not use CMS Data to perform any functions not governed by [the] Agreement. 1 De-identified, aggregated, summary-level data may be used only for financial statement forecasting and accounting purposes.2 1 Data Use Provisions, (b)(2)(iii). 2 Id. April 17, 2026 Page 2 A manufacturer may not disclose, use, or reuse CMS data covered by [the] Agreement, except as specified in [the] Agreement or as otherwise required by applicable law or provided by CMS.3 A manufacturer may use CMS Data only for [certain] purposes, including determining whether the manufacturer owes the MFP refund or a 340B discount on a particular claim.4 A manufacturer may not sell, rent, lease, loan, or otherwise grant access to CMS Data[.]5 However, a manufacturer may grant access to CMS data to contracted third parties to assist in exercising the manufacturers rights and responsibilities.6 Such contracted third parties are subject to the same confidentiality and data use requirements set forth in [the Agreement] and the Manufacturer maintains responsibility for ensuring compliance by these third parties with the confidentiality and data use requirements of [the] Agreement.7 Within a manufacturers own organization and the organization of any agents, any access to CMS Data must limited to individuals on a need-to-know basis.8 A manufacturer may not attempt to link records included in CMS data to any individually identifiable source of information...except for the purpose of....determining whether [a] claim was 340B eligible[.]9 This includes but is not limited to attempts to link CMS Data to CMS data file(s) obtained pursuant to activities outside of [the] Agreement.10 II. Description of the Incident The below description is based on publicly available information. Each manufacturer participating in IPAY 2026 has engaged Second Sight Solutions, LLC to assist with determining whether it is required to honor the MFP price or the 340B price on a particular claim.11 Second Sight provides this service through its Beacon MFP platform. Beacon receives MFP rebate [sic] data either directly from the MTF or via the pharmaceutical manufacturer.12 Second Sight Solutions is a subsidiary of Berkeley Research Group (BRG). 13 BRG is a consulting firm that routinely publishes studies and reports funded by the drug industrys main 3 Id., (b)(2)(iv). 4 Id., (b)(2)(i)(b). 5 Id., (b)(2)(iv). 6 Id. 7 Id. 8 Id., (b)(2)(v). 9 Id. (b)(2)(ix). 10 Id. 11 Second Sight Solutions, Beacon MFP Frequently Asked Questions (For products included in the MFP program for 2026, all pharmaceutical manufacturers are utilizing Beacon to support the GFI process.). Available at https://mfp.support.beaconchannelmanagement.com/en/articles/12313677-beacon-mfp-frequently-asked-questions. 12 Id. 13 See S. Young, Second Sight Solutions Parent Company Targeted in Cyber Attack, Firm Says 340B Platforms Do Not Appear to Have Been Affected. 340B Report (Mar. 27, 2025). Available at https://340breport.com/second-sight- April 17, 2026 Page 3 lobbying organization, Pharmaceutical Research and Manufacturers of America. (PhRMA). A Google search limited to thinkbrg.com and the phrase funded by the Pharmaceutical Research and Manufacturers of America revealed at least 15 such publications, not including the one described below. As a result, the relationship between BRG and Second Sight Solutions presents a substantial conflict of interest: Second Sight has access to CMS Data, and BRG has an incentive to use it to benefit PhRMA. That appears to have occurred and resulted in the Incident we are bringing to your attention. This month, BRG published a whitepaper called Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027 (MFP Whitepaper).14 The MFP Whitepaper was funded by the Pharmaceutical Research and Manufacturers of America. Three statements within the MFP Whitepaper are of particular concern. Taken together, they indicate that Second Sight and/or BRG have disclosed, used, and made prohibited derivative works from CMS Data in violation of each IPAY 2026 manufacturers MTF Data Module Agreement and the restrictions noted above. We include below, then discuss, statements of particulate concern in the BRG MFP Whitepaper: Statement 1, Page 1: On average, according to data reported by the MTF to Beacon MFP, when a pharmacy is eligible to receive an MFP rebate, that rebate is paid to the pharmacy within twenty-one days from the date of dispense. Statement 2, Page 2: To date, fewer than 0.5 percent of MFP claims have been self- identified as 340B by the pharmacy via either of these two pathways. Statement 3, Page 2: By comparison, analysis of Medicare Part D Prescription Drug Event (PDE) data suggests that between 10 and 12 percent of claims for 2026 selected drugs are subject to 340B pricing. Statement 1 confirms that someone used CMS Data for a purpose that is not contemplated in the MFP Data Module Agreement, i.e., analysis to determine the average time between the date of dispense and the date of rebate payment for all IPAY 2026 manufacturers. Two scenarios seem likely: either Second Sight performed this analysis and disclosed its results to BRG, or Second Sight disclosed CMS Data to BRG for BRGs use. If the analysis was performed by Second Sight, it constitutes an impermissible use by Second Sight. If performed by BRG, this analysis constitutes impermissible disclosure by Second Sight, impermissible possession by BRG, and impermissible use by BRG. Under the Data Use Provisions, each IPAY 2026 manufacturer is responsible for these violations.15 solutions-parent-company-targeted-in-cyber-attack-firm-says-340b-platforms-do-not-appear-to-have-been-affected/ (paywall). 14 E. Blalock, Update on Effectuation of the Maximum Fair Price in 2026 and Outlook for 2027. Berkeley Research Group (Apr. 2026). Available at https://media.thinkbrg.com/wp-content/uploads/2026/04/03101442/Effectuation- of-the-Maximum-Fair-Price-in-2026-and-Outlook-to-2027.pdf. 15 The term Manufacturer incorporates any third parties that perform required operations on behalf of the Manufacturer pursuant to this Agreement. The Manufacturer shall ensure that any third party fulfilling responsibilities under this Agreement on behalf of the Manufacturer complies with the terms of this Agreement. The April 17, 2026 Page 4 Statement 2 confirms that someone used CMS Data for a purpose that is not contemplated in the MFP Data Module Agreement, i.e., analysis to determine how many MFP claims have been self- identified as 340B. On its face, Statement 2 indicates that the person performing the analysis had to CMS Data for all MFP claims. In addition, Statement 2 indicates that the person performing the analysis linked CMS Data to another identifiable dataset, i.e. data generated by dispensing entities utilizing the Beacon MFP platform, then used the resulting dataset to perform their impermissible analysis. If this were not the case, it is difficult to see how BRG could reach conclusions about self-identification via either of these two pathways. Regarding this violation, two scenarios seem likely: either Second Sight linked CMS Data with its own data, performed this analysis and disclosed its results to BRG, or Second Sight disclosed CMS Data and dispensing entities data to BRG for BRGs use. If the linking and analysis was performed by Second Sight, it constitutes an impermissible linkage and use by Second Sight. If performed by BRG, it constitutes an impermissible disclosure by Second Sight, impermissible possession by BRG, and impermissible linkage and use by BRG. Under the Data Use Provisions, each IPAY 2026 manufacturer is responsible for these violations.16 Statement 3 indicates that BRG has linked, or readily could link, the CMS Data with Medicare Part D Prescription Drug Event (PDE) data. We know that CMSs PDE data is available to legitimate researchers, subject to IRB approval, through ResDAC.17 It is unclear whether BRG came into possession of PDE data through ResDAC or another source. However, BRGs discussion of both datasets in close proximity to one another raises a substantial concern that BRG has or will link them together. It is clear that linking the CMS Data with PDE data would be prohibited by the Data Use Provisions, and each IPAY 2026 manufacturer is or would be responsible for this violation. Collective Impact. The MFP Whitepaper is an advocacy publication funded by PhRMA to influence public opinion. Shortly after publication, well-connected BRG employees promoted it via LinkedIn, with the original post from Mr. Andrew Brownlee being reshared by 17 other people, 15 of whom are BRG employees according to their LinkedIn profiles.18 Preparing and publishing industry-funded opinion pieces constitutes no part of the uses permitted under the MFP Data Module Agreement. Taken together, Statement 1, Statement 2, and Statement 3 confirm that the MFP Whitepaper is an impermissible derivative work created from CMS Data. The use of CMS Manufacturer remains responsible for compliance with all requirements under this Agreement notwithstanding any actions that third parties may perform on the Manufacturers behalf. MTF User Agreement, XI(g). 16 Id. 17 University of Minnesota Research Data Assistance Center, Part D Event. Available at https://resdac.org/cms- data/files/pde. 18 Andrew Brownlee, New release from our colleague, Ellie Blalock highlighting some first hand insights from operating the Beacon MFP platform over the course of 1st quarter of MFP Refund requests from CMS. Highlights: - On average, pharmacies receive MFP rebates within 21 days from the date of dispense. - Fewer than 0.5% of MFP claims have been self-identified as 340B by the pharmacy. - MFP/340B duplicate discount risk is $5.2 billion for 2027, of which only $.3B will be addressed through pharmacy self-identification. Apr. 2026. LinkedIn post available at https://www.linkedin.com/feed/update/urn:li:activity:7445890957444632576. April 17, 2026 Page 5 Data to prepare the MFP Whitepaper violates the Data Use Provisions applicable to each IPAY 2026 manufacturer. III. Recommended Actions To investigate and remediate the Incident, we recommend that CMS do at least the following: 1. Obtain any agreements between IPAY 2026 manufacturers and Berkeley Research Group and Second Sight Solutions, LLC to determine whether appropriate safeguards are in place to protect CMS Data. 2. Cause each IPAY 2026 manufacturer to take the steps outlined by clauses (a) through (d) of Section (b)(2)(x) of the Data Use Provisions. In addition to investigating and remediating the Incident, each manufacturer should be required to fully account for all disclosures of CMS Data to Berkeley Research Group and other entities other than Second Sight Solutions, LLC and make any modifications to its agreement(s) with Second Sight and/or BRG as directed by CMS. Further, each manufacturer should be required to fully account for how it and its vendors are complying with the need-to-know requirements under Section (b)(2)(v). 3. Require each IPAY 2026 manufacturer to disclose the Incident to dispensing entities affected by it. 4. Update its IPAY 2026, 2027, and 2028 Guidance to require that any vendor engaged by a manufacturer to perform services requiring it to possess CMS Data render to CMS a signed acknowledgement that it understands, and agrees to be legally bound by, the Data Use Provisions. 5. Investigate whether BRG came into possession of CMSs Prescription Drug Event data through appropriate means, including whether BRG has complied with any representations made to ResDAC. 6. Impose such penalties upon manufacturers, Second Sight Solutions, and/or Berkeley Research Group as are available and prudent under applicable law, including those enumerated under Section (b)3 of the Data Use Provisions. Thank you for your attention to this important matter. The inappropriate acquisition and use of Medicare beneficiaries data is a vital concern. Enclosed with this letter is a copy of the MFP Whitepaper. We are available to answer any questions you may have. April 17, 2026 Page 6 Best Regards, HALL, RENDER, KILLIAN, HEATH & LYMAN, P.C. Todd A. Nova T. James Junger Enclosure Attachment 4 1 ATTACHMENT 4 Report on Hall Render Pharmacy & 340B Collaborative Survey Results Page 1 of 7 SUMMARY OF SURVEY RESPONSES FROM THE HALL RENDER PHARMACY AND 340B COLLABORATIVE This report consolidates findings from two surveys the Hall Render Pharmacy and 340B Legal Collaborative (Collaborative) conducted on our 340B Covered Entity clients that directly reflect the questions HRSA posed in its RFI. The responses summarized below would accurately represent a sample of the data HRSA is likely to collect from Covered Entities nationally. The first of the Collaborative surveys collected quantitative estimates from about 30 different health systems related to administrative costs, staffing impacts, startup and ongoing expenses, and cash-flow considerations. The second survey collected qualitative, descriptive responses describing operational experience, data infrastructure requirements, staffing capacity, payment timing, and patient access considerations. Respondents to both surveys are all classified as hospital Covered Entities, but they represent a broad range of hospital and health system types, including single-entity hospitals, multi-entity health systems, rural and safety-net providers. The Collaborative surveys allowed our clients to also submit on behalf of as many or few 340B Covered Entities within their health system. Therefore, the cost ranges in these studies can vary widely due to the fact that some health systems were responding on behalf of one Covered Entity, while several others were responding on behalf of over 20 or 30 Covered Entities. Accordingly, when this report provides quantitative data, it separates respondents by small, medium, and large health systems. Small health systems are classified as organizations (HRSAs term) responding on behalf of 1-2 Covered Entities. Medium organizations are those responding on behalf of 3-10 Covered Entities. Finally, large organizations are classified as those responding on behalf of 11-30+ Covered Entities. A. Current 340B Administrative Costs The below table represent answers to three of HRSAs quantitative questions as seen in the headings for small (1-2 Covered Entities), medium (3-10 Covered Entities), and large organizations (11-30+ Covered Entities): Count (orgs) Count (Covered Entities) Minimum (per org) Maximum (per org) Average (per org) HRSA Question: Provide the total number of 340B transactions processed by your organization during the most recent fiscal year Small 10 14 36,000 30,000,000 3,778,000 Medium 8 44 1,000 58,000,000 9,583,000 Large 3 75 215,000 10,000,000 5,072,000 HRSA Question: Estimate administrative costs (in dollars), including costs to third parties regarding contract pharmacies related to the 340B Program. Small 10 14 $ 84,000 $ 20,000,000 $6,530,000 Medium 5 26 $ 85,000 $ 7,451,000 $ 3,079,000 Large 3 75 $ 1,320,000 $ 19,250,000 $ 7,357,000 Page 2 of 7 Count (orgs) Count (Covered Entities) Minimum (per org) Maximum (per org) Average (per org) HRSA Question: Estimate administrative costs (in dollars), including costs to third parties regarding TPAs related to the 340B Program Small 10 14 $ 21,000 $ 15,000,000 $ 3,312,000 Medium 6 31 $ 103,000 $ 19,410,000 $ 4,862,000 Large 4 86 $ 480,000 $ 3,000,000 $ 1,770,000 HRSA Question: Estimate administrative costs (in dollars), including costs to third parties regarding audit compliance costs related to the 340B Program Small 0 0 $ - $ - $ - Medium 6 31 $ 90,000 $ 840,000 $ 288,000 Large 4 86 $ 92,000 $ 2,000,000 $ 798,000 Further questions included the following: Please Identify and rank any key cost drivers for Current Administrative Costs: Respondents qualitative responses added operational context to these cost estimates. They ranked the following categories at 20% to 22% for each option: Staffing, IT Systems, Third Party Vendors, Compliance Activities, and Labor Hours. Identify current measures to ensure data accuracy completeness and consistency. Describe how your organization currently collects, maintains, and retains data related to the 340B Program participation, including whether third party vendors are used: Nearly all respondents stated that they utilize their TPA to collect data and that this data is manually overseen by respondents 340B analysts and staff. Respondents described 340B programs that small, specialized teams manage, often with a single full-time employee supported by part-time pharmacy, informatics, or IT staff. Respondents also noted that these teams already operate at or near capacity and that existing cost structures reflect multi-year investments to meet compliance, reporting, and audit expectations. B. Anticipated One-Time Startup Costs Under a Rebate Model As shown in the table below, respondents estimated that the implementation of a rebate-based payment model would require substantial one-time startup investments. Page 3 of 7 Count (orgs) Count (Covered Entities) Minimum (per org) Maximum (per org) Average (per org) HRSA Question: How much does your organization estimate in additional one-time startup costs because of a rebate program? Small 10 0 $ - $ 2,000,000 $ 360,000 Medium 5 31 $ 50,000 $ 16,400,000 $ 3,590,000 Large 3 86 $ 7,000 $ 500,000 $ 196,000 Further questions included the following: Identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured: Respondents attributed these estimates to system development, vendor configuration, IT integration, staff training, legal review, and initial cash outlays associated with purchasing drugs at WAC prior to rebate recovery. Respondents further identified significant IT development efforts to extract and transmit pharmacy and medical claims data that current systems do not capture in rebate-compatible formats. Organizations also stated that engaging legal review of data submission agreements, vendor terms, and rebate participation requirements would be extremely resource-intensive. C. Ongoing Annual Administrative Costs Respondents consistently anticipated significant recurring administrative cost increases under a rebate model. The table below reflects the anticipated costs health systems expect to face. Count (orgs) Count (Covered Entities) Minimum (per org) Maximum (per org) Average (per org) HRSA Question: How much does your organization estimate in additional annual costs because of a rebate program? Small 11 15 $ 20,000 $ 50,000,000 $5,031,000 Medium 7 38 $ 120,000 $ 13,500,000 $3,231,000 Large 4 86 $ 100,000 $ 5,500,000 $1,463,000 Further questions include the following: Please specify the activities or functions these incremental costs would cover. Respondents attributed these costs nearly equally to rebate tracking and reconciliation, data submission, audit support, and other categories dispute resolution activities, expanded audit requirements, increased TPA fees. Page 4 of 7 If your organization expects to incur incremental costs after the implementation of a potential 340B Rebate Model Pilot Program, please leave a comment below on the impact of these incremental costs. Several qualitative responses indicated that these incremental costs would persist over time rather than decline after initial implementation. Respondents described sustained labor demands to monitor submissions, reconcile payments, investigate denials, manage appeals, maintain documentation, and respond to evolving manufacturer or platform requirements. Respondents emphasized that rebate administration would add to existing compliance responsibilities rather than replace them, requiring parallel workflows on an ongoing basis. Qualitative responses further detailed that Covered Entities are already facing limited internal capacity, particularly among rural and smaller hospitals, and emphasized that rebate administration requires specialized knowledge that general administrative staff cannot easily absorb. Therefore, health systems anticipate that any new FTEs hired in response to the rebate model are typically specialists in the 340B area. Respondents also explained that assigning experienced personnel to rebate-related functions would divert resources from other operational or patient-support activities. Respondents highlighted the time required to recruit and train new staff and noted that workforce shortages in many regions constrain the ability to scale staffing in response to increased administrative workload. D. Staffing and Operational Considerations Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time FTEs or would cause current medical provider FTEs to reallocate workload. Every respondent indicated that a rebate-based model would require additional full-time employees or reallocation of existing personnel. Other qualitative responses regarding staffing difficulties are described in the Ongoing Costs. E. Data Infrastructure, Collection, and IT System Burdens Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing: Respondents identified substantial anticipated changes to data collection practices and IT infrastructure. They reported that rebate models would require new or enhanced systems to extract and transmit pharmacy and medical claims data, internal databases to track expected versus received rebates, and reconciliation tools to identify discrepancies. Respondents identified the inconsistent data platforms and elements that manufacturers collect makes submitting medical claims data particularly challenging. Respondents also indicated that organizations would need to implement both one-time system modifications and ongoing operational processes to maintain data accuracy, completeness, and compliance as program requirements evolve. Respondents raised concerns regarding expanded data sharing requirements under a rebate-based model. Respondents emphasized the importance of limiting data to what is necessary, defining permissible uses of submitted data, executing business associate agreements where appropriate, and holding vendors accountable for security Page 5 of 7 controls and breach notification. Respondents also expressed concern that multiple submission platforms and expanded data transmission also increase cybersecurity risk and administrative oversight requirements. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information: Respondents are most concerned about transparency from manufacturers. They recommended that IT platforms such as 340B ESP and Beacon should be required to indicate the scope of use for the data submitted. These IT platforms should also provide security risk assessments and analyses to show that they comply with HIPAA. And importantly, any government administrator should provide sufficient indemnifications should manufacturers improperly utilize or disclose PHI. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program Several respondents stated that the manufacturers current requests for medical claims data are vague and confusing. Therefore, respondents are hopeful that the data they collect from their TPAs and submit through the ESP platform would already be sufficient to submit for medical claims data. But if respondents do have to submit further claims information, their recommendation is that this data would be readily available from their TPA or other departments, without supplementing with EHR data. F. Cash Flow and Payment Timing Considerations, Rebate Denial Issues What are the payment terms for 340B Outpatient Drugs Under Your Primary Wholesaler Agreement? Respondents identified cash-flow impacts as a primary operational concern associated with a rebate-based payment model. Most organizations currently operate under Net 30, Net 10, or Net 7 wholesaler payment terms and often benefit from prompt-payment discounts. These terms do not differ for 340B versus non-340B drugs. The vast majority of respondents current wholesaler agreements also include discounts and/or incentives for early or prompt payment, which is typically is a 7 day window. Would a Rebate Model alter payment timing compared to current drug wholesaler arrangements? Respondents reported that purchasing drugs at WAC and waiting for rebate reimbursement would alter cash-flow timing and increase exposure to borrowing costs. The Collaborative received only one quantitative response to this question, but that health system ultimately estimated that the loss of wholesaler upfront cost of $2,904,928, and a cash flow impact of WAC acquisition cost with manufacturer rebates at the 340B ceiling price is $4,031,582. Respondents also reported that uncertainty surrounding rebate receipt and dispute resolution could require adjustments to choices regarding inventory levels and purchase practices. Respondents also noted that organizations operating on narrow margins, particularly rural and safety-net hospitals, are particularly sensitive to delayed or uncertain reimbursement. Page 6 of 7 Describe what, if any, standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program. Respondents emphasized the importance of standardized and predictable administrative processes. Respondents cited the need for clear submission requirements, consistent adjudication timelines, defined denial criteria, and structured dispute-resolution pathways. Furthermore, all respondents stated that it would be preferable if the manufacturer were required to explain their denial grounds at the time of denial. A Potential 340B Rebate Model Pilot Program could require that all rebates be paid to the Covered Entity within 10 calendar days of submission. Describe ways that a potential Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. Also describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for Covered Entities. Respondents proposed a variety of recommendations that would address ensuring manufacturer compliance with the 10 day deadline. First, a few respondents noted that manufacturers should face some civil penalties should they not meet their 10 day rebate deadline. Other respondents stated that the manufacturers should be required to pay Covered Entities in advance based on historic 340B pricing purchased by the Covered Entity. Finally, one recommendation states that if a manufacturer denies a disproportionate amount of rebates on a certain drug, that drug should be removed from the Rebate Pilot in the following quarter. G. Additional Patient Access, Rural and Safety-Net Provider Considerations, and Oversight Considerations Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Several respondents stated that a rebate model would cause downstream effects on patient access and service delivery. Respondents noted that reduced or delayed 340B savings could affect funding for medication assistance programs, charity care, and clinical services supported by 340B resources, particularly in underserved communities. Respondents reported that higher upfront drug costs and uncertainty surrounding rebate recovery could prompt organizations to reevaluate inventory practices, restrict formularies, or reconsider offering certain outpatient therapies. Identify any organization-specific factors that could Impact your Organizations ability to participate in a Potential 340B Rebate Model Pilot Program (e.g. rural, small business, community health center, etc.) Respondents described disproportionate impacts on rural hospitals, critical access hospitals, and small safety-net providers. Respondents described limited staffing capacity, constrained financial margins, and heightened vulnerability to cash-flow disruptions. Many emphasized that these organizations lack the infrastructure and financial reserves necessary to absorb sustained administrative and financial volatility associated with rebate-based models. Page 7 of 7 H. Respondents General Recommendations for a More Workable Rebate Model None of the respondents reported that they were aware of an alternative payment model that could mitigate the potential impacts of this rebate model. Many respondents noted that centralized or neutral administrative mechanisms overseen by the government, such as a clearinghouse alternative, could promote consistency and reduce administrative burden for both manufacturers and covered entities. CONCLUSION In sum, the Collaboratives findings indicate that covered entities expect a rebate-based payment model to introduce sustained administrative, staffing, financial, and data management requirements to the already burdensome upfront discount model. While it is certainly true all health system sizes would require increased administrative oversight and financial monitoring, it is the small, rural, safety-net health systems that would feel these burdens the most to the point of considering dropping out of the 340B Program entirely. Conversely, respondents consistently identified transparency and process clarity as essential elements of any potential 340B rebate-based payment model. Respondents emphasized the need for clearly defined data requirements, standardized payment timelines, and objective, well-documented rebate adjudication and denial criteria. Responses indicate that transparent and predictable operational rules would support administrative efficiency and compliance oversight, regardless of model structure.
HRSA-2026-0001-2368Kalihi-Palama Health Center2026-04-20T04:00Z20,882 chars
See attached file(s) Phone: (808) 792-4511 Fax: (808) 841-1265 Kalihi-Palama Health Center Hale Hoola Hou~House of New Life 915 North King Street Honolulu, Hawaii 96817 April 15, 2026 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Kalihi-Palama Health Center (KPHC) and the more than 20,000 patients we serve annually, KPHC appreciates the opportunity to comment on HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. This extension has been vital in enabling our organization to conduct a deep- dive analysis of the operational and financial risks to Community Health Centers (CHCs) in general, and KPHC in particular, posed by the proposed rebate model. The 340B program is foundational to our ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. KPHC is an independent, 501(c)(3) non-profit, organization that plays a crucial role in the Kalihi-Palama community as a provider of health care and social services to patients who typically face significant barriers when accessing health care. KPHC is in the heart of Kalihi-Palama; an urban, inner-city community. Many of the residents are of Native Hawaiian, Asian, and Pacific Islan heritage. They are low-income, vulnerable, and underserved. Summary of Recommendations: In short, KPHC strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should consider creating a neutral claims clearinghouse, which will achieve all HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans[1] must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Summary of Comments: In these comments, KPHC explains: A. The importance of 340B savings to KPHCs ability to provide high-quality, affordable primary care, behavioral health, and dental care to their nearly 20,000 patients statewide who are predominately low-income and uninsured patients, and often in socially isolated communities. B. How a rebate model will create massive cashflow, administrative, and other costs for KPHC, imperiling our financial stability. C. Why the costs due to a rebate model will force KPHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. D. Why HRSA should not impose a mandatory rebate model on CEs and why if the agency insists on doing so, CHCs must be exempted due to their heightened vulnerability. E. The minimum protections that manufacturers must be required to implement if HRSA insists on applying a rebate model to CHCs. F. Why a neutral claims clearinghouse would achieve the same goals as a rebate model without creating the harms. A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured[2]. CHCs provide these patients with access to high- quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law[3] and regulation[4], CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Hawaii, CHCs routinely rely on 340B savings to support services such as care coordination and patient navigation, nutrition support for the hungry, interpretation, and transportation resources to medical and social service appointments. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs B. A rebate model will create massive cashflow, administrative, and other costs for KPHC. Unsustainable cashflow burdens. KPHC estimates it would cost $675,272.91 to purchase the ten 2026 pilot drugs at WAC under the proposed rebate model annually. Currently, our organization spends $103,144.50 annually to purchase these same drugs at the 340B ceiling price. This cost would be 6.5 times the upfront capital required for medication procurement. KPHC estimates it would cost $1,199,848.53 annually to purchase at WAC the additional fifteen pilot drugs in 2027. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect KPHC from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force KPHC to borrow substantial amounts of cash. Also note that KPHC faces substantial difficulty accessing credit from the private market at reasonable interest rates. Our financial strains (including the uncertainty around our Federal grant funding and our low/negative margins) are well known, so any creditor willing to lend to them will charge above-average rates, and many may seek to put Leins on KPHCs buildings and receivables. Massive administrative burdens: A rebate model will require KPHC to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of other pharmacy-related discounts: The rebate pilot will cause KPHC to lose non-340B discounts they currently receive that lower their total drug spending significantly. These include sub-ceiling discounts negotiated by Apexus, Prompt Pay Discounts, Volume Discounts (as KPHC will be incentivized to minimize their inventories to reduce cashflow strains) and Cost of Goods Sold discounts from wholesalers and distributors. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient because they are expired, damaged, etc. Under last years proposed rebate model, KPHC would have been forced to absorb the full WAC price on units that are undispensed, despite the KPHC following all appropriate pharmacy standards. For KPHC, this impact would mean assuming considerable financial risk through increased upfront expenditures, delayed and uncertain reimbursements, and potential gaps in cash flow. These pressures would necessitate difficult operational decisions, including limiting services and reallocating resources away from patient care to cover administrative and financial burdens. Additionally, the model would require significant new administrative infrastructure to manage claims tracking, rebate reconciliation, and compliance oversight. These combined financial burdens would reduce our ability to expand services and respond to the needs of our patient population. C. Reduction in Services: The costs resulting from a rebate model will inevitably force KPHC to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. As required by law and regulation, KPHC invests every penny of 340B savings into services that expand access to care for their medically underserved patients. Thus, any reduction in 340B savings which would clearly occur under a rebate model would force KPHC to scale back services on which their patients currently depend. The impact will extend far beyond affordable pricing on medications and to all types of services underwritten by 340B savings. Stopping dispensing rebate drugs: In the face of these financial pressures, last fall many CHCs (reluctantly) decided to stop purchasing or dispensing drugs subject to the rebate model once it launched on January 1, 2026. Many contract pharmacies including both Walgreens and Walmart publicly announcing they that would also carve-out rebate drugs from 340B starting in the new year. Compared to all other CE types, FQHCs rely most heavily on contract pharmacies, making them most vulnerable to these forced carve-outs. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low- income patients. As discussed above, some CHCs and/or their contract pharmacies may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, KPHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non- adherence, causing rates of avoidable complications and hospitalizations to rise. CHCs have already experienced significant reductions to 340B savings in recent years leading to reductions in services and operations. Some individuals might argue that CHCs are exaggerating how a rebate model will impact their operations and patient access. These claims ignore the financial realities that CHCs have faced, including but not limited to in their 340B programs. For example: o Contract pharmacy restrictions have impacted CHCs more severely than any other CE type, as they are by far the most dependent on contract pharmacies. o Several policies that have had the beneficial impact of lowering overall drug prices (e.g., lifting the AMP cap on Medicaid rebates) have had the unintended side effect of lowering the level of 340B savings available on many drugs that CHCs frequently dispense. o CHCs have not received an inflation-adjustment to their base grants in over a decade. Given these pressures, and one of the highest costs of living in the nation, it is not surprising that CHCs in Hawaii have taken conservative approaches to hiring and salary increases and are forced to slow expansion of care enabling services that patients need to address their whole person health. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burden, reduction in services, harm to patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that KPHC and all CHCs be exempted, as: Disproportionate negative impact: o Medicare-negotiated drugs represent a much larger share of 340B purchases for CHCs than for other types of CEs. This is because all the drugs subject to Medicare negotiation are commonly-prescribed Part D medications, which CHCs frequently dispense. In contrast, hospitals realize much of their 340B savings from Part B drugs (e.g., oncology infusions), while other grantees focus on specialized care areas (e.g., HIV/AIDS, Black Lung) and prescribe few of the drugs subject to negotiation. o CHCs will be the most impacted by contract pharmacies choosing to stop purchasing rebate drugs under 340B: Of all categories of CEs, CHCs are by far the most reliant on contract pharmacies. As a result, they will be most impacted when these pharmacies stop purchasing rebate drugs under 340B. Limited financial resilience: As noted above, CHCs generally lack both the margins and borrowing capacity needed to manage the cashflow demands and increased costs created by a rebate model. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. In the RFI, HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if the agency insists on imposing one on CHCs, it should require manufacturers to incorporate the following protections into their plans: 1. For each rebate drug, a requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense. This policy would go a long way to mitigate the ongoing cashflow issues discussed above. The details are based on the model proposed by Sanofi in November 2024, with two adjustments: Manufacturers should advance CHCs rebates for two packages of each drug, instead of one. For drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two-month period. This two-package or two-month standard should eliminate most cashflow issues by giving CHCs enough time to receive all the rebates for the first package/month before it needs to purchase the third package/month. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. We appreciated that last summers FRN stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities. However, the manufacturer plans that HRSA approved last autumn fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Thus, we urge HRSA, in the strongest possible terms, to require manufacturers to: Fully reimburse CHCs for all costs necessary to implement the pilot, instead of just handpicking a few, and Provide reimbursement promptly and transparently. (We recommend that costs be billed, and reimbursement monthly.) 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed to a patient because they are expired, damaged, etc. Since the creation of the 340B program, CHCs have been able to attribute certain undispensed drugs to 340B (with proper documentation), but the proposed January 2026 pilot contained no mechanism for them to request or receive rebates on undispensed units. This suggests that under a rebate model, CHCs will be forced to absorb the full WAC price on all undispensed units. This could cause CHCs costs to surge and would effectively transfer 340B savings from CHCs back to manufacturers. To avoid this outcome, a manufacturers rebate plan must contain a mechanism for CHCs to receive rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. This is essential to reducing cashflow demands and interest costs on CHCs, because it will significantly speed up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are both: Unnecessary to implement the pilot. Manufacturers have already demonstrated that they do not need BIN/PCN data to identify drugs for 340B purposes, and CMS has explicitly indicated that it does not need BIN/PCN data to implement the IRA Medicare Inflation Rebate Program. Not always available to the covered entity. For example, Walgreens a major contact pharmacy for CHCs in many parts of the country does not make this data available to covered entities. Therefore, requiring CHCs to provide BIN/PCN data to receive a rebate would effectively eliminate the 10 pilot drugs from many CHCs contract pharmacies. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. (For example, in December 2025, each manufacturers established different rules and timelines for handling units of rebate drugs that were unreplenished as of January 1, 2026.) F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burden on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication[5] - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please contact Jan Hasegawa, jhasegawa@kphc.org 808-843-7545. Sincerely, Jan Y. Hasegawa, Pharm D. BS Director of Pharmacy Kalihi-Palama Health Center [1] HRSA requested input on these in the first paragraph of the RFI summary. [2] Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national [3] Section 330(e)(5)(D) of the Public Health Service Act. [4] 45 Code of Federal Register 75.307 Program Income [5] Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619
HRSA-2026-0001-2369Esperanza Health Center Inc2026-04-20T04:00Z43,647 chars
See attached file(s) April 15, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Esperanza Health Center Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Esperanza Health Center Inc anticipates a loss of $80,488.00 due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Esperanza Health Center is a faith-based, bilingual, primary care health center whose North Philadelphia service area includes the largest concentration of Latinos in the city. Esperanza has served this community for over 30 years, and its ongoing commitment to hire clinical staff proficient in the Spanish language and to recruit staff from this community has enabled the health center to provide bilingual, culturally-competent health care. Esperanzas three existing health care facilities provide a comprehensive array of primary care services including adult and pediatric primary and preventive care, medication assisted treatment for opioid use disorder, HIV testing and treatment, obstetric and gynecological services, dental care, mental health and social work services, nutritional counseling, medication dispensaries, and health education outreach for the community. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. 2 The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect the CHCs ability to serve the 52 million patients who rely on us. For Esperanza Health Center in particular, this means it will impact: the 15,120 patients we serve. administrative costs. An additional $80,488.00 spent in the first year alone. the ability to provide low-cost and/or free medications to our patients who already need to overcome multiple social disparities of health. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Esperanza Health Center provided $382,315.38 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Esperanza Health Center anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Esperanza Health Center anticipates an increase of $15,200.00 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Esperanza Health Center estimates needing to add one additional FTE. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. For our health center we estimate $59,488.00. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Two hours daily will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Esperanza Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $2,400 was quoted for only the consultation portion just to see how much will be required simply to reach the baseline of compliance before a single rebate is ever received. Other entities have noted estimates starting at $50,000 for the entire implementation. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 15,120 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $80,488 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools of $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 26 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 26 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in North Philadelphia with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 8 CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 15 https://340bpricing.hrsa.gov/ 9 of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $1,192,298.03 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $44,614.30 to purchase these same drugs at the 340B ceiling price. This represents a 2,572.5% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Esperanza Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our social services department, care management, behavioral health consultants and community health and wellness services. Workforce & Staffing: The administrative burden associated with this pilot requires us to divert critical resources away from direct patient care. For every Rebate Coordinator we are compelled to hire, we lose the ability to fund essential clinical rolessuch as a care management specialist, limiting the support patients need to achieve their health goals, or a Behavioral Health Consultant, which directly contributes to longer wait times for mental health services. 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,673 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Esperanza Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be $10,000 annuallyfunds that are currently dedicated to supporting unreimbursed care. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Esperanza Health Center the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle- down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Esperanza Health Center urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed 11 in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of $88,000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. 13 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Esperanza Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Esperanza Health Center believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Esperanza Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Juan Perez at the following email: juan.perez@esperanzahealth.com. Sincerely, Juan Perez, COO Esperanza Health Center Inc Juan Perez (Apr 20, 2026 20:04:35 EDT) Juan Perez
HRSA-2026-0001-2370Anonymous Anonymous2026-04-20T04:00Z1,561 chars
We have significant concerns regarding the proposed 340B rebate pilot and its impact on the financial stability of our health center. As a Federally Qualified Health Center operating on narrow margins, we do not have the liquidity to front the full cost of medications while awaiting reimbursement. This model introduces a level of financial risk that community health centers are not structured to absorb. Shifting to a rebate-based approach effectively transfers financial burden from manufacturers to providers, increasing operational volatility and constraining our ability to deliver consistent, high-quality care. When financial risk is elevated at the provider level, the consequences are ultimately borne by the communities we serveparticularly patients managing chronic conditions who depend on uninterrupted access to affordable medications. Even modest increases in upfront medication costs can lead to delayed prescription fills or medication non-adherence. These access barriers often go undetected in data until after adverse health outcomes have occurred. Importantly, affordability decisions are made in real time at the pharmacy counternot retroactively through reimbursement mechanisms. Delaying the application of 340B discounts undermines the programs core intent by weakening the ability of safety-net providers to ensure immediate and reliable access to medications. We strongly urge reconsideration of this approach to avoid unintended consequences that would negatively impact both providers and the vulnerable populations they serve.
HRSA-2026-0001-2371CommonSpirit Health, Dignity Health Woodland Memorial Hospital2026-04-20T04:00Z6,307 chars
Please see the attached comments submitted on behalf of Dignity Health Woodland Memorial Hospital, located in Yolo County, California. Woodland Memorial Hospital Hospital Administration 1325 Cottonwood Street Woodland, CA 95695 530.669.5356 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, Dignity Health Woodland Memorial Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, safety-net hospital, we are committed to providing high quality care for the patients in our community with a special focus on those who are most vulnerable or underserved. This RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on Dignity Health Woodland Memorial Hospital that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Dignity Health Woodland Memorial Hospital relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. In FY24 our 340B total cost avoidance/revenue was $7,789,651. This savings allowed us to reinvest in our patients, facility, and our community. Our patient population is diverse, ranging from UC Davis students experiencing food insecurity to the thousands of migrant workers and families who support our local agricultural ecosystem. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Gena Bravo Hospital President As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2372Anonymous2026-04-20T04:00Z52,003 chars
See attached file(s) 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Approximately 2.5M ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Third-party administrator program implementation costs and monthly fees to utilize the split billing software 340B program oversight and governance including SOPs, policy and procedure maintenance, corporate compliance audits, FTE hours for monthly and quarterly 340B committee meetings which include participation from leadership and staff at our covered entities Staffing: 340B Program Director, Managers, Coordinators, Auditors, and Analysts (14 FTEs) 340B consultant fees including the cost for an annual external audit for our five covered entities Fees to contract pharmacies which increase with the cost of the medication (ex. $750 for a specialty medication) Finance, government programs, revenue cycle, and credentialing coordination Both internal and external legal council Information technology resources iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing Labor (monthly audits, WAC analysis, duplicate discount prevention, reconciliation, contract pharmacy compliance, corrective actions, staff oversight, legal) IT systems and maintenance for both third party administrator systems, external vendors, internal business intelligence and electronic health record integrity External vendors including external consultants and workflow integration platforms Specialty pharmacy Outpatient clinics and pharmacies b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. We anticipate approximately $800K in cash flow delays across our system monthly from additional upfront drug costs of the 25 IRA drugs. This does not include potential manufacturer rebate denials that can further extend delays in payment. Over the course of one year, we estimate our health system would be required to front drug manufacturers approximately $4.2M An additional $300K is anticipated in one-time startup costs for additional software investments An additional $50-$100K in additional recurring FTE expenses ii. Describe the methodology and assumptions used to develop these estimates. Additional staffing fees Increased upfront medication costs are calculated using the difference between WAC and 340B for the 25 IRA drugs and multiplied by volume purchased at 340B pricing across the health system. Wholesalers discounts based on terms of payment will affect health system based on cash on hand iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. We anticipate needing to invest in at least one additional full-time employee to accommodate the added administrative burden of managing the rebates via the Beacon platform. Adding to the increasing cost of implementing this rebate model, we also anticipate the need for additional third-party platforms to assist with the management and reconciliation of the rebates. Combined, we estimate these additional resources to amount to approximately $350K-$400K annually. Below is a list of the additional tasks that are known at this time, that would add to the administrative burden: Data submission Beacon troubleshooting Manual tracking and reconciliation Management of denials Manufacturer communications Implementing new audit processes Configuration of new rebate submission workflows including new SOPs, internal controls iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Adopting a process similar to Oregons House Bill 3409, 2025, which outlines retrospective Medicaid claims review by state agencies to deduplicate claims and repayment for any duplicate claim submissions Transparent federal clearinghouse that is not paid for by the drug manufacturers Using CMSs Medicare Transaction Facilitator (MTF) to address nonduplication Prohibition of rebate denials by manufacturers v. Comment on the impact of these incremental costs under your current operations. Additional staffing on the 340B team and the corporate team for increased audit requirements, compliance reviews, and rebate denial management Added vendor services for claims data management and tracking of rebate payments c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Yes ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. At least one full-time additional permanent employee 1. Roles and responsibilities include rebate reconciliation performed electronically and manually, financial reconciliation, drug manufacturer communication around denials and delayed payments, additional audit requirements for this new employee or others on the 340B team Additional work on the IT and finance teams to configure data for submission and reconcile rebate payments to the appropriate covered entity d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Additional third-party platforms with rebate management functionality Additional IT resources to build and maintain reporting for the 340B rebate Implementation of the Beacon platform (legal has not approved terms and conditions) ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. $350-$400K recurring annually for system development, procurement, maintenance and integration and additional FTEs e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Working with state agencies to determine appropriate billing of AAC Financial losses if billed under AAC billing requirements but rebate is denied i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Recurring costs: o Decreased ability to support patient assistance programs to provide patients with free or low-cost medications o Cost of patient readmissions due to lack of medications and population health measures o Additional consultant services with additional audit requirements o FTE hours researching, defining, and building reports to accurately reflect the data fields required by manufacturers One-time costs o Software implementation fees ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). High Medicaid and uninsured patient volume, increases cash flow disruptions and administrative costs Limits our health systems growth to support patients in health care deserts, free standing EDs and maternity care in underserved areas. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Reduced capacity to purchase high-cost specialty drugs will impact the ability to acquire lifesaving medications Delays in initiating patient therapies such as oncology infusions Reduced ability to support uncompensated care for the over 2 million people in our county 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Decreased COG discount from wholesalers Decreased internal rate of return of cash flow; 7.5% internal rate of return Interest that manufacturers will gain from having our cash instead of the covered entity earning interest on those dollars The estimated dollar amount due to the loss of our COG discount is $195K annually b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Currently 7 days o Will need to move to net 30 o This does not differ for non-340B drugs i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our COG is around 6.5% with net 30 ii. State the average number of calendar days within which your organization typically remits payment under these contracts. 30 days c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Our health system will lose the internal rate of return for 10 days (minimum) for the drugs impacted by the IRA d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. If the 10-day payment term is not met, and the claim is not denied, the manufacturers must automatically pay the covered entity for the full rebate amount, preferably with a predetermined fee (interest) e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. The rebate payment must be made within 10 days If the drug manufacturer cannot decide within the 10-day timeframe, payment must be made to the CE automatically A predetermined fee should be added to any payment made from the drug manufacturer to the CE after 10 days (ex. 6% interest fee) Integrate data at the point of dispensation, pay at the time of order. Block chain that everyone has access to. Criteria is met, a token is created, and the 340B purchase is 100% certain. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. We have already invested in one full-time employee just for the management of 340B ESP. This alone has not been sufficient and additional employee hours have been reallocated to 340B ESP as well. The management of the 340B ESP platform has been burdensome and inefficient. Some examples of our experiences thus far include: Wrongful exclusion of 340B pricing due to incorrect reporting between wholesalers, manufacturers, and 340B ESP. The data upload process requires pulling multiple reports from different systems and formatting them for upload, which creates a significant burden in terms of both time and labor. Once data is submitted to ESP, there is minimal transparency regarding which items are conforming versus non-conforming, leaving much of the review process unclear and often reliant on guesswork. There have also been instances where contract pharmacies are flagged for negative balances, but upon further inquiry, these are sometimes identified as errors on ESPs end, and we are advised to disregard them. This leads to confusion and unnecessary use of resources, particularly when the issue does not originate on our side. More recently, negative balances and at-risk pharmacies have remained on reports despite corrective actions. For example, a credit and rebill initiated in February 2026 has yet to be reflected in ESP due to delays in data transmission from our wholesaler. As a result, we experienced a temporary loss of pricing, highlighting ongoing communication gaps between manufacturers, ESP, and the wholesaler. Additionally, we have experienced complications with mixed-use hospitals being incorrectly categorized as in-house pharmacies, resulting in manufacturer warnings about potential pricing removal. Although this was eventually resolved after extensive communication with ESP, it required months of follow-up and investigation. Overall troubleshooting with 340B ESP representatives has been difficult due to the disconnect in understanding 340B verbiage and policies. We are often told to "Please communicate with the appropriate stakeholders" and have to reach out to the manufacturers on our own for resolutions. During fiscal year 2025, we have been financially impacted due to ESPs inefficiencies. This resulted in a total spend of $23,000. These inefficiencies include delays in communication to wholesaler for pricing uploads, delayed contract uploads after the 10-day designation period and incorrectly classifying our mixed- use hospitals as in house retail pharmacies. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Uniform denial template with specific, accurate information for the denial Denial must take place within the 10-day window If a denial cannot be determined within the 10-day window, the rebate payment must be made to the covered entity Transparent dispute resolution involving a neutral third party which includes deadlines for manufacturer response and final decision 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains all data to ensure a compliant, conservative, and transparent 340B Program We use third-party vendors to maintain 340B accumulations and cost savings We are implementing a new third-party vendor to audit100% of our 340B transactions b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). Monthly audits of all 340B areas which include random transactions as well as high risk transactions and areas within the covered entities Third party administrator reconciliation and review Annual external consultant audit of all 340B covered entities Bi-weekly meeting of the 340B team to discuss any program concerns Monthly meeting of the 340B team, health system buyers, and leaders to review 340B audits Quarterly 340B Executive Committee meeting to review 340B audits, data, changes to the program, education, training Quarterly corporate compliance audits of mixed-use, clean sites, and contract pharmacy data Annual 340B buyer training Monthly banking reconciliation and accruals by finance c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. A rebate model would require ongoing additional data collection and reconciliation activities such as tracking, dispute management, claim-level submission, reporting, etc. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. NDC Date of service Quantity Payer Type Covered Entity Identifier In addition, for pharmacy claims: prescription number, NPI, and 340B indicator These data elements are available in electronic health records platforms e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Prohibit patient level data Transparent neutral clearinghouse Strong breach notification Avoid manufacturer bias and influence 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Applying claims indicators and modifiers Conservative approach to the 340B Program to ensure compliance Use of split-billing software that tracks carve-in or carve-out logic Standardized internal audits that are structured to capture random and targeted transactions Standardized oversight and requirements for clean sites Maintenance and review of policies and procedures including non-covered outpatient drugs b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record- maintenance practices. Additional staff hours to implement and provide oversight of claims processed through the MTF Implementation of Willow Ambulatory (WAMB) Widget: We developed and deployed a specialized tracking widget within our EHR (Epic Willow Ambulatory). This tool allows for the real-time identification intervention and tracking of MFP transactions by specific pharmacy location and timeframe. Maintenance of Replenishment Model: We continue to leverage our TPA to screen claims and identify Medicare Part D MFP transactions to ensure non- duplication during the replenishment process. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. The "Double-Lockout" (Remark Code N907): We are increasingly identifying claims flagged with remark code N907, indicating that a 340B ceiling price is lower than the MFP. Access Barriers: We have experienced rejections for the MFP rebate even when a manufacturer restricts 340B pricing to a single designated pharmacy (which we are not) or blocks ADM. In these cases, the pharmacy is legally and operationally unable to access the 340B price yet is simultaneously blocked from the MFP rebate because the claim is technically "340B-eligible." This results in a total loss of both the 340B discount and the MFP rebate. d. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). Reporting "Noise": A high volume of hospital-requested test claims creates significant data clutter, requiring heavy manual oversight to filter out non-revenue claims from genuine MFP transactions. Administrative Bottlenecks: Differentiating between a true negative margin, a test claim, and an expected MFP rebate is labor-intensive and relies on retrospective reconciliation, which hinders real-time auditing. Financial Burden and "Floating" Costs: We are currently required to float the cost of high-dollar medications while waiting for rebates. This creates a persistent risk of the pharmacy never being made 100% whole. De Facto Retroactive Clawbacks: The current environment allows for what is effectively a "preemptive clawback." When rebates are denied based on 340B "eligibility" that cannot be realized, the pharmacy is forced to absorb the financial deficit with no existing mechanism to effectively monitor and recoup the earned reimbursement. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. 340B modifier/indicator 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Transparency that shows total rebates requested, pending, paid, or denied A detailed explanation for a rebate denial A detailed explanation for a rebate pending more than 10 days For an ongoing dispute, a strict timeline for the resolution including detailed notes from the manufacturer b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Monthly: Percentage of claims paid within 10 days listed by manufacturer Percentage of claims denied listed by manufacturer Denial reasons listed by manufacturer Outstanding pending amount to be paid, listed by manufacturer c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Frequency, monthly Assessment, two to three years to see consistent accurate data and trends 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. Transparent data exchange through a neutral clearinghouse or retrospective model could improve program integrity Delays in payment or manufacturer denials will strain health systems capacity to treat underserved patients Health systems may close in rural areas with the increase to their upfront payment for medications b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Yes, if the data includes a 340B indicator. If the indicator is not included, the rebate model will not reliably prevent duplicate discounts ii. Reduce diversion or improper claims; and iii. Increase pricing transparency across stakeholders. If the data is submitted through a platform that is not paid for by the drug manufacturers, then possibly c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Neutral, transparent clearinghouse Retrospective claims review and repayment for any duplicate discounts Understanding that 340B cost savings are not expected to be used for patients in rural areas or go directly back to the underserved or underfunded patient. The cost savings are to be used by the health system for all patients, including the underserved and underfunded, to support healthcare in the community. This could mean creating new health care opportunities in areas that are indigent, but also areas that have already established health care services. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. For covered entities that are safety-net health systems for uninsured and underinsured patients, the rebate model is detrimental. Upfront costs increase (drug prices, additional staff needs including full-time 340B staff, legal, IT, revenue, among others), and health systems will have to make changes to services they are able to provide to their community with 340B cost savings. These services are lifesaving, and the health and wellbeing of our patients and community will suffer as the drug manufacturers make more of a profit. 1. Costs to Covered Entities a. Current Administrative Costs Under the Upfront 340B Discount i. Provide the total number of 340B transactions processed by your organization during the most recent fiscal year. Approximately 2.5M ii. Describe your current administrative costs, including costs to third parties ( e.g., contract pharmacies) related to 340B Program operations and compliance. Third-party administrator program implementation costs and monthly fees to utilize the split billing software 340B program oversight and governance including SOPs, policy and procedure maintenance, corporate compliance audits, FTE hours for monthly and quarterly 340B committee meetings which include participation from leadership and staff at our covered entities Staffing: 340B Program Director, Managers, Coordinators, Auditors, and Analysts (14 FTEs) 340B consultant fees including the cost for an annual external audit for our five covered entities Fees to contract pharmacies which increase with the cost of the medication (ex. $750 for a specialty medication) Finance, government programs, revenue cycle, and credentialing coordination Both internal and external legal council Information technology resources iii. Identify any key cost drivers ( e.g., staffing, IT systems, third-party vendors, compliance activities, labor hours) for current administrative costs. Staffing Labor (monthly audits, WAC analysis, duplicate discount prevention, reconciliation, contract pharmacy compliance, corrective actions, staff oversight, legal) IT systems and maintenance for both third party administrator systems, external vendors, internal business intelligence and electronic health record integrity External vendors including external consultants and workflow integration platforms Specialty pharmacy Outpatient clinics and pharmacies b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program i. Estimate the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. These figures can be measured in terms of hours to complete the activities or in dollar amounts in the aggregate. In addition, the estimation can include administrative and operational costs associated with filing rebate requests for the drugs selected for MFP under MDPNP. We anticipate approximately $800K in cash flow delays across our system monthly from additional upfront drug costs of the 25 IRA drugs. This does not include potential manufacturer rebate denials that can further extend delays in payment. Over the course of one year, we estimate our health system would be required to front drug manufacturers approximately $4.2M An additional $300K is anticipated in one-time startup costs for additional software investments An additional $50-$100K in additional recurring FTE expenses ii. Describe the methodology and assumptions used to develop these estimates. Additional staffing fees Increased upfront medication costs are calculated using the difference between WAC and 340B for the 25 IRA drugs and multiplied by volume purchased at 340B pricing across the health system. Wholesalers discounts based on terms of payment will affect health system based on cash on hand iii. Specify the activities or functions these incremental costs would cover ( e.g., claims processing, data submission, reconciliation, audit support) and what, if any, effect the change of some drugs to a rebate model would have on current administrative costs under the upfront 340B discount. We anticipate needing to invest in at least one additional full-time employee to accommodate the added administrative burden of managing the rebates via the Beacon platform. Adding to the increasing cost of implementing this rebate model, we also anticipate the need for additional third-party platforms to assist with the management and reconciliation of the rebates. Combined, we estimate these additional resources to amount to approximately $350K-$400K annually. Below is a list of the additional tasks that are known at this time, that would add to the administrative burden: Data submission Beacon troubleshooting Manual tracking and reconciliation Management of denials Manufacturer communications Implementing new audit processes Configuration of new rebate submission workflows including new SOPs, internal controls iv. If a potential 340B Rebate Model Pilot Program were structured so as to offset these administrative and operational costs, how could that be achieved and how could such an offset be accurately quantified? Adopting a process similar to Oregons House Bill 3409, 2025, which outlines retrospective Medicaid claims review by state agencies to deduplicate claims and repayment for any duplicate claim submissions Transparent federal clearinghouse that is not paid for by the drug manufacturers Using CMSs Medicare Transaction Facilitator (MTF) to address nonduplication Prohibition of rebate denials by manufacturers v. Comment on the impact of these incremental costs under your current operations. Additional staffing on the 340B team and the corporate team for increased audit requirements, compliance reviews, and rebate denial management Added vendor services for claims data management and tracking of rebate payments c. Staffing Impacts Under a Potential 340B Rebate Model Pilot Program i. Indicate whether implementation of a potential 340B Rebate Model Pilot Program would require additional full-time employees or would cause current medical provider full-time employees to reallocate work hours from medical care to perform administrative functions (quantifying wherever possible). Yes ii. If yes, identify the anticipated number of additional full-time employees; describe their roles, responsibilities, and functions; and indicate whether the FTEs would be temporary or permanent. At least one full-time additional permanent employee Roles and responsibilities include rebate reconciliation performed electronically and manually, financial reconciliation, drug manufacturer communication around denials and delayed payments, additional audit requirements for this new employee or others on the 340B team Additional work on the IT and finance teams to configure data for submission and reconcile rebate payments to the appropriate covered entity d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program i. Describe any new or modified IT systems, software, or data infrastructure that would be required to implement a potential 340B Rebate Model Pilot Program. Additional third-party platforms with rebate management functionality Additional IT resources to build and maintain reporting for the 340B rebate Implementation of the Beacon platform (legal has not approved terms and conditions) ii. Provide estimated costs for system development, procurement, maintenance, or integration that would be required to implement a potential 340B Rebate Model Pilot Program and specify whether any such costs would be one-time or recurring. $350-$400K recurring annually for system development, procurement, maintenance and integration and additional FTEs e. Other Anticipated Costs or Impacts of a Potential 340B Rebate Model Pilot Program Working with state agencies to determine appropriate billing of AAC Financial losses if billed under AAC billing requirements but rebate is denied i. Discretely identify any additional costs to your organization associated with implementation of a potential 340B Rebate Model Pilot Program not otherwise captured above ( e.g., legal review, training, consulting services, reduction in services offered, and specify whether these costs are one-time or recurring. Recurring costs: Decreased ability to support patient assistance programs to provide patients with free or low-cost medications Cost of patient readmissions due to lack of medications and population health measures Additional consultant services with additional audit requirements FTE hours researching, defining, and building reports to accurately reflect the data fields required by manufacturers One-time costs Software implementation fees ii. Identify any organization-specific factors that could impact your organization's ability to participate in a potential 340B Rebate Model Pilot Program ( e.g., rural, small business, community health center). High Medicaid and uninsured patient volume, increases cash flow disruptions and administrative costs Limits our health systems growth to support patients in health care deserts, free standing EDs and maternity care in underserved areas. Identify any specific impacts on access to drugs for patients that may occur as a result of a potential 340B Rebate Model Pilot Program. Reduced capacity to purchase high-cost specialty drugs will impact the ability to acquire lifesaving medications Delays in initiating patient therapies such as oncology infusions Reduced ability to support uncompensated care for the over 2 million people in our county 2. Payment Timing and Potential Cash Flow Impacts for Covered Entities a. Describe with specificity whether payment timing ( e.g., within ten calendar days of submission of a complete claim) under a potential 340B Rebate Model Pilot Program would affect your cash flow, including any financial risks to your organization. Decreased COG discount from wholesalers Decreased internal rate of return of cash flow; 7.5% internal rate of return Interest that manufacturers will gain from having our cash instead of the covered entity earning interest on those dollars The estimated dollar amount due to the loss of our COG discount is $195K annually b. Describe the typical payment terms under your current wholesaler contracts for 340B drugs, including the number of days allowed for payment, and whether those payment terms differ for non-340B drugs. Currently 7 days Will need to move to net 30 This does not differ for non-340B drugs i. Identify any prompt payment incentives or discounts currently offered by drug wholesalers for early payment and the timeframes associated with those incentives. Our COG is around 6.5% with net 30 ii. State the average number of calendar days within which your organization typically remits payment under these contracts. 30 days c. Describe with specificity whether a rebate-based payment model would alter payment timing compared to current drug wholesaler arrangements and indicate whether alternative payment arrangements could mitigate any potential impacts of such a rebate-based payment. Our health system will lose the internal rate of return for 10 days (minimum) for the drugs impacted by the IRA d. A potential 340B Rebate Model Pilot Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission. Describe ways that a potential 340B Rebate Model Pilot Program could be structured to ensure that manufacturers adhere to such a requirement. If the 10-day payment term is not met, and the claim is not denied, the manufacturers must automatically pay the covered entity for the full rebate amount, preferably with a predetermined fee (interest) e. Describe other ways that a potential 340B Rebate Model Pilot Program could be structured to address payment timing and potential cashflow impacts for covered entities. The rebate payment must be made within 10 days If the drug manufacturer cannot decide within the 10-day timeframe, payment must be made to the CE automatically A predetermined fee should be added to any payment made from the drug manufacturer to the CE after 10 days (ex. 6% interest fee) Integrate data at the point of dispensation, pay at the time of order. Block chain that everyone has access to. Criteria is met, a token is created, and the 340B purchase is 100% certain. 3. Rebate Denials a. Under a potential 340B Rebate Model Pilot Program the acceptable grounds for a manufacturer denial of a covered entity rebate request could be limited (for example, limited to denials where a 340B rebate was provided to another covered entity on the same claim) and the manufacturer could be required to provide the covered entity with the rationale and specific documentation for reasons claims are denied. Explain whether your organization believes more specific guardrails should be built into a potential 340B Rebate Model Pilot Program to ensure that denials are limited to appropriate circumstances. We have already invested in one full-time employee just for the management of 340B ESP. This alone has not been sufficient and additional employee hours have been reallocated to 340B ESP as well. The management of the 340B ESP platform has been burdensome and inefficient. Some examples of our experiences thus far include: Wrongful exclusion of 340B pricing due to incorrect reporting between wholesalers, manufacturers, and 340B ESP. The data upload process requires pulling multiple reports from different systems and formatting them for upload, which creates a significant burden in terms of both time and labor. Once data is submitted to ESP, there is minimal transparency regarding which items are conforming versus non-conforming, leaving much of the review process unclear and often reliant on guesswork. There have also been instances where contract pharmacies are flagged for negative balances, but upon further inquiry, these are sometimes identified as errors on ESPs end, and we are advised to disregard them. This leads to confusion and unnecessary use of resources, particularly when the issue does not originate on our side. More recently, negative balances and at-risk pharmacies have remained on reports despite corrective actions. For example, a credit and rebill initiated in February 2026 has yet to be reflected in ESP due to delays in data transmission from our wholesaler. As a result, we experienced a temporary loss of pricing, highlighting ongoing communication gaps between manufacturers, ESP, and the wholesaler. Additionally, we have experienced complications with mixed-use hospitals being incorrectly categorized as in-house pharmacies, resulting in manufacturer warnings about potential pricing removal. Although this was eventually resolved after extensive communication with ESP, it required months of follow-up and investigation. Overall troubleshooting with 340B ESP representatives has been difficult due to the disconnect in understanding 340B verbiage and policies. We are often told to "Please communicate with the appropriate stakeholders" and have to reach out to the manufacturers on our own for resolutions. During fiscal year 2025, we have been financially impacted due to ESPs inefficiencies. This resulted in a total spend of $23,000. These inefficiencies include delays in communication to wholesaler for pricing uploads, delayed contract uploads after the 10-day designation period and incorrectly classifying our mixed- use hospitals as in house retail pharmacies. b. Describe what (if any) standard process elements should be required for rebate denials under a potential 340B Rebate Model Pilot Program, including template forms and timeline for adjudications of improper denials. Uniform denial template with specific, accurate information for the denial Denial must take place within the 10-day window If a denial cannot be determined within the 10-day window, the rebate payment must be made to the covered entity Transparent dispute resolution involving a neutral third party which includes deadlines for manufacturer response and final decision 4. Data Collection by Covered Entities a. Describe how your organization currently collects, maintains, and retains data related to 340B Program participation, including whether third-party vendors are used to carry out some or all of these activities. Our organization collects, maintains, and retains all data to ensure a compliant, conservative, and transparent 340B Program We use third-party vendors to maintain 340B accumulations and cost savings We are implementing a new third-party vendor to audit100% of our 340B transactions b. Identify current measures to ensure data accuracy, completeness, and consistency ( e.g., validation checks, reconciliations, audits). Monthly audits of all 340B areas which include random transactions as well as high risk transactions and areas within the covered entities Third party administrator reconciliation and review Annual external consultant audit of all 340B covered entities Bi-weekly meeting of the 340B team to discuss any program concerns Monthly meeting of the 340B team, health system buyers, and leaders to review 340B audits Quarterly 340B Executive Committee meeting to review 340B audits, data, changes to the program, education, training Quarterly corporate compliance audits of mixed-use, clean sites, and contract pharmacy data Annual 340B buyer training Monthly banking reconciliation and accruals by finance c. Describe whether a potential 340B Rebate Model Pilot Program would change current data collection activities and whether any such changes would be one-time or ongoing. A rebate model would require ongoing additional data collection and reconciliation activities such as tracking, dispute management, claim-level submission, reporting, etc. d. Describe the specific pharmacy and medical claims data elements that should comprise a potential 340B Rebate Model Pilot Program (at both contract pharmacies and in-house pharmacies); whether such data elements are currently available or are readily available; the source(s) for such data; and whether such data is already being furnished to existing third parties. NDC Date of service Quantity Payer Type Covered Entity Identifier In addition, for pharmacy claims: prescription number, NPI, and 340B indicator These data elements are available in electronic health records platforms e. Provide any recommendations for ensuring a potential 340B Rebate Model Pilot Program has the appropriate guardrails in place to mitigate any privacy and security concerns related to patient information and data submission, including any agreements that may be required by third parties. Prohibit patient level data Transparent neutral clearinghouse Strong breach notification Avoid manufacturer bias and influence 5. Manufacturer Efforts to Avoid Duplicate Discounts a. Describe your organization's practices and procedures prior to January 1, 2026, to avoid paying both 340B discounts and Medicaid rebates on the same drug dispense, including data collection and record-maintenance practices. Applying claims indicators and modifiers Conservative approach to the 340B Program to ensure compliance Use of split-billing software that tracks carve-in or carve-out logic Standardized internal audits that are structured to capture random and targeted transactions Standardized oversight and requirements for clean sites Maintenance and review of policies and procedures including non-covered outpatient drugs b. Describe any operational or administrative changes implemented by your organization since January 1, 2026, to avoid paying 340B discounts on drug dispenses subject to a MFP under the MDPNP, including any changes to data collection or record-maintenance practices. Additional staff hours to implement and provide oversight of claims processed through the MTF Implementation of Willow Ambulatory (WAMB) Widget: We developed and deployed a specialized tracking widget within our EHR (Epic Willow Ambulatory). This tool allows for the real-time identification intervention and tracking of MFP transactions by specific pharmacy location and timeframe. Maintenance of Replenishment Model: We continue to leverage our TPA to screen claims and identify Medicare Part D MFP transactions to ensure non-duplication during the replenishment process. c. Describe your organization's experience since January 1, 2026, with identifying drug dispenses to a covered entity for which your organization did not provide access to the MFP under the non-duplication provisions of the MDPNP. The "Double-Lockout" (Remark Code N907): We are increasingly identifying claims flagged with remark code N907, indicating that a 340B ceiling price is lower than the MFP. Access Barriers: We have experienced rejections for the MFP rebate even when a manufacturer restricts 340B pricing to a single designated pharmacy (which we are not) or blocks ADM. In these cases, the pharmacy is legally and operationally unable to access the 340B price yet is simultaneously blocked from the MFP rebate because the claim is technically "340B-eligible." This results in a total loss of both the 340B discount and the MFP rebate. d. Identify any challenges encountered ( e.g., data availability, claim identification, timing mismatches) in identifying potential duplicate discounts under 340B and CMS payment programs ( e.g., Medicare and Medicaid). Reporting "Noise": A high volume of hospital-requested test claims creates significant data clutter, requiring heavy manual oversight to filter out non-revenue claims from genuine MFP transactions. Administrative Bottlenecks: Differentiating between a true negative margin, a test claim, and an expected MFP rebate is labor-intensive and relies on retrospective reconciliation, which hinders real-time auditing. Financial Burden and "Floating" Costs: We are currently required to float the cost of high-dollar medications while waiting for rebates. This creates a persistent risk of the pharmacy never being made 100% whole. De Facto Retroactive Clawbacks: The current environment allows for what is effectively a "preemptive clawback." When rebates are denied based on 340B "eligibility" that cannot be realized, the pharmacy is forced to absorb the financial deficit with no existing mechanism to effectively monitor and recoup the earned reimbursement. e. Identify the minimum data elements you believe are necessary for a manufacturer to identify potential duplicate discounts under 340B and CMS payment programs and the potential for the 340B Rebate Model Pilot Program to be an additional or alternative source for those data elements. 340B modifier/indicator 6. Required Reporting a. What specific data should manufacturers be required to submit (and to what frequency) for HRSA's review to ensure compliance with a potential 340B Rebate Model Pilot Program? Transparency that shows total rebates requested, pending, paid, or denied A detailed explanation for a rebate denial A detailed explanation for a rebate pending more than 10 days For an ongoing dispute, a strict timeline for the resolution including detailed notes from the manufacturer b. What specific manufacturer data should HRSA share publicly (and to what frequency) as a potential 340B Rebate Model Pilot Program progresses? Monthly: Percentage of claims paid within 10 days listed by manufacturer Percentage of claims denied listed by manufacturer Denial reasons listed by manufacturer Outstanding pending amount to be paid, listed by manufacturer c. What should be the frequency and duration of manufacturer data to support the assessment of a potential 340B Rebate Model Pilot Program? Frequency, monthly Assessment, two to three years to see consistent accurate data and trends 7. 340B Program Integrity and Other Potential Benefits of a Rebate Pilot a. Explain whether and how a potential 340B Rebate Model Pilot Program would affect the integrity of the 340B program. Transparent data exchange through a neutral clearinghouse or retrospective model could improve program integrity Delays in payment or manufacturer denials will strain health systems capacity to treat underserved patients Health systems may close in rural areas with the increase to their upfront payment for medications b. Explain whether a rebate-based model would: i. Assist manufacturers in their efforts to avoid paying duplicate discounts under 340B and CMS payment programs; Yes, if the data includes a 340B indicator. If the indicator is not included, the rebate model will not reliably prevent duplicate discounts ii. Reduce diversion or improper claims; and iii. Increase pricing transparency across stakeholders. If the data is submitted through a platform that is not paid for by the drug manufacturers, then possibly c. Provide any recommendations for improving data collection and reporting to strengthen the 340B Program's integrity while minimizing administrative burden. Neutral, transparent clearinghouse Retrospective claims review and repayment for any duplicate discounts Understanding that 340B cost savings are not expected to be used for patients in rural areas or go directly back to the underserved or underfunded patient. The cost savings are to be used by the health system for all patients, including the underserved and underfunded, to support healthcare in the community. This could mean creating new health care opportunities in areas that are indigent, but also areas that have already established health care services. d. Describe any other potential benefits ( e.g., transparency, audit compliance) of a 340B Rebate Model Pilot Program to participants in the 340B Program and to what extent these benefits outweigh any potential costs. For covered entities that are safety-net health systems for uninsured and underinsured patients, the rebate model is detrimental. Upfront costs increase (drug prices, additional staff needs including full-time 340B staff, legal, IT, revenue, among others), and health systems will have to make changes to services they are able to provide to their community with 340B cost savings. These services are lifesaving, and the health and wellbeing of our patients and community will suffer as the drug manufacturers make more of a profit.
HRSA-2026-0001-2373Heartland Alliance Health2026-04-20T04:00Z30,583 chars
See attached file(s)Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org VIA ELECTRONIC SUBMISSION April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: Thank you for the opportunity to provide comments on the Department of Health and Human Services (HHS) Request for Information (RFI) regarding a potential 340B Rebate Model Pilot Program.1 This letter is submitted on behalf of Heartland Alliance Health (HAH), a not-for-profit healthcare organization that works through a network of partner companies to deliver advanced care to medically complex and often underserved patient populations, including through integrated practices designated as Federally Qualified Health Centers (FQHCs). Employing more than 1,000 healthcare professionals across many states, including physicians, pharmacists, nurses, and administrators, HAH is a leader in complex treatments and is committed to providing high-quality care while upholding compliance standards and safeguarding against fraud, waste, and abuse. FQHCs serve as the primary care foundation of HAHs integrated practice model, providing the initial point of access for patients lacking access to traditional provider networks and coordinating referrals as necessary within HAHs premiere specialty network. The 340B Program enables FQHCs to sustain this coordinating role by offsetting the cost of serving predominantly low-income and uninsured patient populations. HAH strongly urges HRSA to exempt FQHCs from any mandatory rebate program. A shift from the upfront discount model that has been operative for more than three decades to a post-sale rebate mechanism would impose severe financial and administrative burdens on non-profit safety net providers like ours, directly undermining the statutory intent of the 340B Program. 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026), HHS Docket No. HRSA-2026-03042. Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org As detailed below, the proposed 340B Rebate Model Pilot Program would: (i) impose disproportionate costs on FQHCs that operate on thin margins and serve the nations most vulnerable patient populations;2 (ii) disregard the settled reliance interests that 340B covered entities have developed over thirty years of upfront-discount operations; (iii) create perverse downstream market incentives that will drive financially distressed practices into vendor-dependent dispensing arrangements over which HRSA exercises no regulatory oversight; and (iv) fail to address the procedural deficiencies that led to the judicial invalidation of HRSAs prior pilot program.3 I. DISPROPORTIONATE BURDEN OF ADMINISTRATIVE AND OPERATIONAL COSTS Absent an exemption, the proposed 340B Rebate Model Pilot Program would require FQHCs to spend significant capital on new administrative functions that do not currently exist. Specialty sites, including FQHCs, that participate in the 340B Program have built their entire operational infrastructurestaffing models, pharmacy workflows, inventory management, and financial planning around the certainty of receiving the 340B ceiling price at the point of purchase. Hiring decisions, drug formulary selections, and patient service offerings are all calibrated to the savings generated by this upfront discount. Dismantling this foundation would require FQHCs to fundamentally restructure operations that have been refined over decades of participation. HRSAs prior estimate of only two hours per week in additional administrative burden is a dramatic underestimate of the true cost to covered entities.4 The American Hospital Association (AHA) has estimated that hospitals would collectively spend 11.2 million hours filing rebate applications under the prior pilot programs structure.5 While this figure reflects the hospital sector specifically, not FQHCs, it underscores the enormous scale of the administrative burden inherent in any rebate mechanism. FQHCs, which operate with far fewer administrative resources than hospitals, would likely face a disproportionally greater per-entity burden. FQHCs lack the institutional infrastructure and back-office capacity that hospitals can leverage to absorb these costs. 2 Geiger Gibson Program in Cmty. Health, George Washington Univ., Community Health Centers in Financial Jeopardy Without Sufficient Federal Funding (Jan. 2024) (finding median health center operating margin of 3.5%, with 54% of health centers operating below 5% margins). 3 See Order, Am. Hosp. Assn v. Kennedy, No. 2:25-cv-00600 (D. Me. Feb. 10, 2026) (vacating 90 Fed. Reg. 36,163, 90 Fed. Reg. 38,165, and the approvals of applications from drug manufacturers submitted pursuant to those notices.). 4 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, 90 Fed. Reg. (Aug. 1, 2025) (HRSA estimated only 2 hours per week in additional work for covered entities). 5 (estimating 11.2 million collective hours hospitals would spend filing rebate applications); see also FierceHealthcare, Hospitals Administrative Burden Under 340B Pilot Far Outstrips Governments Estimates, AHA Says (Dec. 2025). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org FQHCs would, however, be subject to the same categories of administrative burdenclaims processing, data submission, rebate tracking, reconciliation, and dispute resolutionbut would bear these costs without the economies of scale, dedicated compliance departments, or financial reserves available to large hospital systems. The average FQHC operates on thin margins, and many already face workforce shortages that limit their ability to add administrative staff. Imposing new rebate-related obligations on these providers would force an impossible choice between diverting clinical staff to administrative functions and foregoing 340B savings entirely. A. Key Cost Drivers: Rebate Reconciliation and Tracking. Each submitted claim must be tracked through the rebate lifecycle, including submission, acknowledgment, approval or denial, payment, and reconciliation against the expected 340B discount. With potentially thousands of claims per month across multiple manufacturers, this creates a substantial ongoing reconciliation burden. Dispute Resolution and Denial Management. Manufacturer denials, whether for data discrepancies, duplicate discount disputes, or other grounds, require investigation, documentation, and formal challenge. Each denied claim represents not only a lost discount but also the administrative cost of the appeals process. Systems Integration. Many FQHCs operate EHR systems that lack direct integration with their third-party administrators (TPAs), a challenge that is particularly acute for FQHCs because they frequently rely on EHR platforms designed specifically for community health centers that do not natively interface with manufacturer rebate portals or TPA data submission platforms. As a result, much of the claims compilation work required under the proposed rebate model would be manual, introducing both significant labor costs and heightened error risk. IT Systems Modification. Participation in the proposed rebate program requires new or modified IT systems to generate rebate-eligible claims in the required format, transmit data to manufacturer-designated platforms, and track rebate status. HAH estimates [$200K] in one-time system development and integration costs, plus [$150K] in annual maintenance. Compliance and Audit Support. The proposed rebate model introduces new compliance obligations, including documentation requirements, data retention policies, and audit- response procedures. Given that FY 2023 HRSA audits found adverse findings at 63% of covered entities under the existing upfront model, the additional complexity of the proposed rebate mechanism will substantially increase audit risk and the cost of audit preparation.6 6 HRSA, 340B Program Integrity (2024), https://www.hrsa.gov/opa/program-integrity (FY 2023 audits showed 63% of covered entities had adverse findings). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org HAH estimates total incremental administrative costs of [$200K] annually, representing [10% of our current 340B savings on the ten drugs included in HRSAs prior pilot program. If HRSA expands the program to include additional drugs, such as those approved under the Medicare Drug Price Negotiation Program for 2027, these costs will increase proportionally. B. Staffing Impacts Our FQHCs do not currently have the staff that would be required to comply with the proposed rebate program. Implementation would require 1.5-2.0 additional full-time employees dedicated to claims processing, data submission, rebate tracking, and dispute resolution. Alternatively (and more likely, given the hiring constraints that FQHCs face in competitive labor markets), existing clinical and administrative staff would be forced to reallocate work hours from patient care to perform rebate-related administrative functions. FQHCs operate with constrained administrative resources and serve as the primary care home for over 30 million patients nationally, the majority of whom are low-income, uninsured, or underinsured.7 8 Every hour of staff time diverted from clinical care to rebate administration represents a direct reduction in the health care services available to these vulnerable populationsthe very populations that the 340B Program was designed to serve. C. Systems and Infrastructure Like other providers, our FQHCs utilize technological systems and operational infrastructure designed around the upfront discount model. Our EHR, pharmacy management, and billing systems were procured and configured to process 340B transactions at the point of purchase. A shift to the proposed rebate mechanism would require fundamental changes to these systems, including: New data extraction and formatting capabilities to generate claims in manufacturer- required formats; Integration with manufacturer-designated rebate platforms (including the Beacon IT platform operated by Second Sight Solutions, which presented significant operational problems during the prior pilot program); Reconciliation tools to match rebate payments against submitted claims and identify discrepancies; Enhanced reporting capabilities to support audit response and compliance documentation. 7 340B Health, 340B Program Overview (2024), https://www.340bhealth.org/members/340b- program/overview/ (noting 340B savings represent approximately 5% of total annual operating budgets for safety-net providers). 8 NACHC, 340B Drug Pricing Program Overview (2025), https://www.nachc.org/policy- advocacy/policy-priorities/340b-drug-pricing-program/ (describing how FQHCs use 340B savings to fund sliding-fee-scale discounts for uninsured patients and expand access to comprehensive primary care). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org HAHs current TPA integration does not support the automated data extraction and submission that would be required under the proposed rebate model. D. Data Collection and Privacy Concerns During the prior rulemaking process, both HRSA and drug companies asserted that the proposed rebate mechanism would not impose new data-related burdens on covered entities because they already provide required information through 340B ESP. That assertion is incorrect. The data elements required under the proposed rebate model differ materially from those submitted through existing channels. A rebate model requires submission of pharmacy and medical claims data elements, including prescription- level detail, patient identifiers, and payer information, that go well beyond what is currently reported for 340B compliance purposes. This claim is particularly misleading with respect to FQHCs, which face distinct data infrastructure challenges compared to hospital-based covered entities. Moreover, submitting detailed patient data to manufacturers or their designated third-party platforms raises significant privacy and security concerns. HRSA should mandate robust data protection guardrails, including limitations on the use and retention of patient data, encryption requirements, breach notification obligations, and business associate agreement requirements under the Health Insurance Portability and Accountability Act (HIPAA). E. Payment Timing and Cash Flow Impacts Unlike the existing upfront discount mechanism, the proposed rebate model would force FQHCs to effectively provide drug companies interest-free loans, as they purchase drugs at the Wholesale Acquisition Cost (WAC) or higher and await the rebates to which they are entitled under the 340B statute. FQHCs operate on extremely thin margins, with 340B savings representing approximately 5% of total annual operating budgets.9 10 The cash-flow impact of even a ten-day payment lag is substantial for organizations that must meet payroll, maintain drug inventories, and deliver continuous patient care services. In the past, HRSA credited the position of drug companies that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due.11 This claim does not reflect the reality of FQHC operations. Our typical payment terms with wholesalers require remittance within 30 days to qualify for prompt payment discounts. The introduction of the proposed rebate float between the WAC purchase price and the eventual rebate creates a timing mismatch that FQHCs like ours cannot absorb without reducing services or drawing on already limited reserves. 9 Id. 10 340B Participation and Safety Net Engagement Among Federally Qualified Health Centers, PMC (2024), https://pmc.ncbi.nlm.nih.gov/articles/PMC11452821/ (finding increases in 340B-registered locations were associated with increases in total patient volume, uninsured patients, and underserved populations). 11 See Am. Hosp. Assn, Comment Letter on 340B Rebate Model Pilot Program (2025). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org Furthermore, drug companies typically pay rebates to Medicaid on a quarterly basis, which creates a structural expectation among manufacturers that rebate obligations can be settled on a quarterly cadence.12 If this same quarterly payment timing is applied to the proposed 340B Rebate Model Pilot Program, FQHCs would be forced to float the full WAC cost of drugs for up to 90 days. F. Rebate Denials and Dispute Resolution HRSA should implement specific guardrails to ensure that grounds for manufacturer denials are extremely limited. Based on the experience of other rebate programs in the pharmaceutical supply chain, HAH anticipates that manufacturers will use broad denial authority to delay or avoid payment of rebates to which covered entities are legally entitled. Permissible grounds for denial should be restricted to situations in which a 340B rebate was already provided to another covered entity on the same claim, to prevent duplicate discounts without enabling pretextual denials. HRSA must also require that manufacturers provide covered entities with the rationale and specific documentation for every denied claim, and must mandate standardized dispute resolution procedures, including template forms and strict timelines for adjudication. The absence of meaningful dispute resolution protections in the prior pilot program was one of the most significant concerns raised by covered entities. G. Adverse Impacts on Patients and Communities The cumulative effect of the administrative costs, staffing diversions, systems investments, cash-flow burdens, and denial risks described above is that HAHs covered entity will no longer be able to use 340B savings as effectively and comprehensively as HAHs covered entity does under the upfront discount model. As a direct result, our patients and communities will suffer in concrete, measurable ways. Transitioning to a 340B program serving patients experiencing homelessness and those supported by Ryan White programs can impact how consistently and quickly individuals access critical medications and care. Because funding shifts from immediate savings to delayed rebates, there is greater reliance on coordination across Medicaid, sliding fee discounts, and Ryan White resources to avoid gaps in care. For populations facing housing instability, even small disruptions can have significant health consequences, so strong coordination, accurate documentation, and reliable systems are essential to ensure uninterrupted access to medications, care coordination, and supportive services.. HAH serves [serve individuals and families facing significant barriers to care, including those experiencing homelessness, living with chronic conditions such as HIV, and navigating financial instability. Our patients often rely on integrated medical, behavioral health, and supportive services to achieve and maintain stability and improved health outcomes.]. A disproportionate number of our patients are enrolled in Medicare and Medicaid or are uninsured. Any reduction in the services HAH provides as a result of the administrative burden and cash-flow impact of the proposed rebate model will fall most heavily on the populations that the 340B Program was created to serve. 12 ASPE, U.S. Dept of Health & Human Servs., Why Different Purchasers Pay Different Prices for Prescription Drugs (2024) (explaining that upfront discounts provide price certainty at point of purchase while rebate models introduce post-purchase reconciliation risk). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org H. Alternatives to a Rebate Mechanism for 340B/MDPNP Deduplication HAH believes that viable, lawful, and less burdensome alternatives exist. A central rationale offered for the proposed rebate model is the need to deduplicate 340B and Medicare Drug Price Negotiation Program pricing. However, HRSA itself has acknowledged that drug companies have other available options to achieve this objective. This is particularly significant for FQHCs. If deduplication can be accomplished through less burdensome means, there is no justification for subjecting safety-net providers to the full cost and complexity of a rebate mechanism. HAH urges HRSA to adopt a neutral third-party clearinghouse to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits attributed to the proposed rebate mechanism. For these reasons, the existence of workable deduplication alternatives further supports HAHs position that FQHCs should be exempted from any mandatory rebate requirement. II. RELIANCE INTERESTS The RFI invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. This framing rests on a flawed premise. The existence of statutory authority does not imply that the agency will exercise it in a particular manner. As the District of Maine observed, HRSA failed to grapple with the reliance interests that covered entities developed over thirty years of consistent upfront-discount operations.13 Our FQHCs have structured their internal operations, staffing levels, third-party contractual relationships, and long-term financial planning around the upfront discount model. Our 340B savings through upfront discounts are budgeted into operational cash flow, budgeting, forecasting, grant funding allocations, and capital planning. A fundamental shift to the proposed rebate mechanism would disrupt these settled expectations and impose transition costs that HRSA has not adequately considered. Ultimately resulting in delayed revenue, requiring adjustments to cash flow assumptions, program funding strategies, and overall HRSA program budgeting allocations. III. PERVERSE MARKET INCENTIVES: THE REBATE MODEL AS A DRIVER OF VENDOR- DEPENDENT DISPENSING ARRANGEMENTS Beyond the direct costs and burdens described above, HRSA should consider the downstream market distortions that the proposed rebate model will create.14 The cash-flow pressures, administrative 13 Am. Hosp. Assn v. Kennedy, No. 2:25-cv-00600, slip op. at 2238 (D. Me. Dec. 29, 2025) (granting nationwide preliminary injunction and finding HRSA likely violated the APA by failing to adequately consider impacts on safety-net providers and reliance interests). 14 Cmty. Oncology All., Pharmacy Benefit Managers Attack on Physician Dispensing, White Paper (2018), https://communityoncology.org/wp- content/uploads/sites/20/2018/08/PBMs_Physician_Dispensing-WhitePaper_COA_FL.pdf. Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org complexity, and payment uncertainty inherent in the proposed rebate mechanism will drive financially distressed practices to adopt third-party medically integrated dispensing (MID) platforms as a means of generating immediate revenue to bridge the rebate float.15 16 This dynamic creates a perverse incentive structure in which HRSAs own policy drives covered entities into vendor-dependent arrangements that raise independent regulatory concerns and over which HRSA exercises no oversight. These platforms operate under varying business structures, but the common element is a financial relationship between the vendor and the practice in which the vendor provides dispensing infrastructure and the practice captures dispensing revenue.17 The revenue model may involve a recurring platform fee, a percentage of the dispensing margin, or fees structured as technology and software charges rather than revenue-sharing, the latter of which is a fee structure designed to avoid the regulatory characterization of remuneration under the Anti-Kickback Statute (AKS).18 19 Third-party MID platforms market themselves as the solution to this problem. They offer immediate cash generation through in-office dispensing margins, with minimal upfront investment from the practice.20 The result is a predictable migration pathway in which HRSAs rebate policy drives practices into vendor relationships that HRSA neither regulates nor monitors. This has the potential to represent regulatory- induced market distortion.21 15 Trends in Medically Integrated Dispensing Among Oncology Practices, J. Clinical Oncology Oncology Practice (2022), https://ascopubs.org/doi/10.1200/OP.22.00136 (finding the share of community oncologists in MID practices increased from 12.8% to 32.1% between 2010 and 2019). 16 Adam J. Fein, The Top 15 Specialty Pharmacies of 2024, Drug Channels (Apr. 2025) (finding oral/self- injectable specialty drug purchases from non-retail settings increased from 21% in 2017 to 32% in 2024). 17 See, e.g., ProficientRx, https://proficientrx.com; DocRx, Physician Dispensing, https://docrx.com/solution/physician-dispensing/; Advanced Rx, https://www.advanced-rx.com/ (each marketing subscription-based physician dispensing platforms). 18 42 U.S.C. 1320a-7b(b) (Anti-Kickback Statute); see also OIG, Fraud & Abuse Laws: The Five Most Important Federal Laws, https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/. 19 Press Release, House Rx Raises $55 Million to Scale In-Clinic Specialty Pharmacy Model, PR Newswire (2024), https://www.prnewswire.com/news-releases/house-rx-raises-55-million-to-scale-in- clinic-specialty-pharmacy-model-302612560.html. 20 42 U.S.C. 1395nn (Physician Self-Referral Law / Stark Law). 21 DOL-OIG, OWCP Did Not Ensure Best Prices and Allowed Inappropriate, Potentially Lethal Prescriptions in the FECA Program, Report No. 03-23-001-04-431, at 612 (Mar. 31, 2023) (identifying up to $321.26 million in preventable costs and finding 98.7% of fast-acting fentanyl prescriptions were dispensed outside FDA-approved indications). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org IV. PROCEDURAL DEFICIENCIES AND ADMINISTRATIVE PROCEDURE ACT CONCERNS The proposed 340B Rebate Model Pilot Program must also be evaluated against the procedural failures that led to the judicial invalidation of HRSAs prior pilot program. On December 29, 2025, the U.S. District Court for the District of Maine granted a nationwide preliminary injunction halting the program, finding that HRSA likely violated the Administrative Procedure Act (APA) by failing to adequately consider impacts on safety-net providers and reliance interests.22 The courts analysis identified several critical procedural deficiencies, including inadequate consideration of the financial and operational impacts on covered entities, particularly safety-net providers.23 HRSAs current RFI is a positive step toward soliciting stakeholder input. However, the agency must ensure that any future rulemaking addresses this deficiency by conducting rigorous cost-benefit analysis disaggregated by covered entity type and providing covered entities with a meaningful opportunity to comment on specific program features. FQHCs, in particular, were inadequately represented in the prior rulemaking process, and HRSA should take affirmative steps to ensure that the unique circumstances of community health centers are fully considered.24 V. ERISA PREEMPTION CONSIDERATIONS HRSA should also consider the interaction between the proposed rebate model and the Employee Retirement Income Security Act (ERISA) preemption framework. The Supreme Courts decisions in Rutledge v. Pharmaceutical Care Management Association and the Tenth Circuits decision in PCMA v. Mulready have clarified that ERISA does not preempt state laws that regulate PBM practices without mandating particular ERISA plan structures.25 However, a federal rebate mechanism that alters the economics of drug purchasing for covered entities participating in ERISA-governed benefit plans could create design-risk and litigation-risk considerations that HRSA has not addressed.26 Specifically, if the rebate model changes the timing and certainty of 340B savings in a manner that affects how covered entities structure their pharmacy benefit arrangements with ERISA-governed plans, it could 22 See supra note 12, see also 91 Fed. Reg. 7287, 7288 (Feb. 17, 2026) (HRSAs current RFI, issued following the courts vacatur, soliciting comment on precisely the administrative, operational, financial, and reliance-interest concerns the court found HRSA had failed to consider). 23 Id,. slip op. at 28-33; see also supra note 11. 24 See Natl Assn of Cmty. Health Ctrs., Comment Letter on 340B Rebate Model Pilot Program (2025) (noting continued concern about the significant challenges a rebate model would impose on health center pharmacies, given the thin financial margins of health centers and the lack of sufficient capital to purchase drugs at higher prices upfront). 25 29 U.S.C. 1144(a) (ERISA preemption clause); Rutledge v. Pharm. Care Mgmt. Assn, 592 U.S. 80 (2020); Pharm. Care Mgmt. Assn v. Mulready, 78 F.4th 1183 (10th Cir. 2023). 26 Cong. Rsch. Serv., The 340B Drug Discount Program: Litigation Topics and Trends, R48696 (2024). Heartland Alliance Health 4730 N. Winthrop Ave. Chicago, IL 60640 P 773.275.2586 hahealth.org expose covered entities to preemption challenges or create operational conflicts between federal 340B requirements and ERISA plan administration. HRSA should analyze these interactions before finalizing any rebate program design. This concern is particularly relevant to FQHCs, which frequently participate as covered entities in pharmacy benefit arrangements serving their own employeesmany of whom are enrolled in ERISA-governed health plans. FQHCs that use 340B savings to offset the cost of employee pharmacy benefits could face disruption if the proposed rebate model introduces uncertainty into the timing and amount of those savings. Moreover, FQHCs that contract with PBMs to administer pharmacy benefits for their ERISA-governed plans may face conflicting compliance obligations if the rebate model creates tensions between 340B program requirements and ERISA fiduciary duties. HRSA should specifically analyze how the proposed rebate model would interact with FQHCs dual roles as 340B covered entities and ERISA plan sponsors. VI. CONCLUSION For all of the reasons set forth above, HAH respectfully submits that the costs of the proposed Rebate Program will outweigh any expected benefits. Furthermore, HRSA should consider a neutral, third-party clearinghouse that achieves 340B/MDPNP deduplication objectives without imposing the enormous administrative, financial, and operational burdens that the proposed rebate mechanism would place on safety-net providers. If, however, HRSA chooses to move forward with the proposed rebate program, it must, at a minimum: (i) exempt FQHCs and other community health centers from any mandatory rebate requirement; (ii) allow covered entities to comment on the specific features of the program, including the drugs to be included, data requirements, grounds for denial, dispute resolution processes, and other operational details; and (iii) conduct and publish a comprehensive analysis of the downstream market effects of the rebate model, including its impact on the proliferation of vendor-dependent dispensing arrangements. HAH appreciates HRSAs consideration of these comments and looks forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Sincerely, Paul T. Gallese, PT, MBA Chief Executive Officer Heartland Alliance Health
HRSA-2026-0001-2374AbbVie2026-04-20T04:00Z114,915 chars
Please see attached for AbbVie's comments. 1 April 20, 2026 VIA ELECTRONIC FILING TO: www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: AbbVie Inc. (AbbVie) is pleased to provide comments in response to the Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) (RFI), which the Health Resources and Services Administration (HRSA) issued on February 17, 2026.1 AbbVie is a biopharmaceutical company committed to discovering and delivering innovative medicines and solutions that solve serious health issues today and address the medical challenges of tomorrow. We strive to have a remarkable impact on peoples lives across several key therapeutic areas including immunology, oncology, and neuroscience. AbbVie focuses on these areas to accelerate the development of innovative approaches to treat disease and to respond to unmet patient needs. AbbVie has a robust pipeline of potential new medicines, with the goal of finding solutions to address complex health issues and enhance peoples lives. AbbVie provided comments in response to HRSAs initial announcement of an application process for a 340B Rebate Model Pilot Program (Pilot Program) in 2025,2 and intended to participate in the Pilot Program until that program was terminated. Without the ability to offer the 340B price as a rebate, AbbVie has no effective means to deduplicate maximum fair price (MFP) and 340B claims, which poses what is anticipated to be a growing, significant harm to the Company. While AbbVie does not view the 340B statute as requiring HRSA preapproval of a manufacturer rebate model, AbbVie urges HRSA to move quickly toward approving manufacturer proposals to use a Rebate Model. A Rebate Model is the most appropriate and effective means of preventing the duplicate discounts required by both the 340B statute and Inflation Reduction Act (IRA) and curbing other widespread abuses that undermine the 340B Programs patient-focused objectives. 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). 2 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program; Correction, 90 Fed. Reg. 38165 (Aug. 7, 2025). 2 Executive Summary: AbbVie urges HRSA to approve a Rebate Model. Doing so will achieve: Greater Program Integrity: By tying 340B pricing to specific, verified patient dispenses, the Rebate Model is the most effective and efficient way to support statutory compliance by helping to prevent diversion and allowing manufacturers to deduplicate Medicaid and MFP claims. Zero Harm to Covered Entities: The data required is industry-standard (already collected and reported for Medicare/Medicaid/commercial payers). Rebates would be paid within 10 calendar days of a clean claim submission, which is faster than the current replenishment model and provides a way for covered entities to manage without impact to their cash flows. To be successful, the model should allow for: 1. Expeditious Action: HRSA must act immediately to re-approve Rebate Models with an implementation date of no later than July 1, 2026, to support the statutory requirements of the 340B program and the IRAs nonduplication requirements. 2. More Robust Data and Compliance: HRSA should explicitly permit manufacturers to verify 340B rebates based on appropriate claims data fields, not just for MFP deduplication, but also to prevent Medicaid duplicate discounts and documented diversion. 3. Federal Preemption: At least 13 states have passed laws attempting to explicitly prohibit manufacturers from requiring claims data from covered entities. HRSA must clearly articulate that the federal 340B Rebate Model preempts these state laws, as they serve as a direct obstacle to federal program enforcement. Overview: Section I describes the 340B Programs integrity challengesarising from the replenishment model, duplicate discounts, and diversionand explains why the current system is not working. Section II outlines how a Rebate Model would help restore program integrity and have other potential benefits, at no cost to the federal government. Section III explains why a Rebate Model would not burden covered entities, which already collect and report similar data elements under other healthcare programs, and could benefit from faster access to 340B pricing than that available under the prevailing replenishment model. Section IV urges HRSA to clarify that a federal law preempts state laws that prohibit manufacturers from collecting necessary data and interfere with the administrative dispute resolution process. Section V urges HRSA to act expeditiously to balance the interests of all stakeholders, and to avoid significant delays in evaluating and announcing its decision on the new Rebate Model. 3 I. The 340B Program Faces Significant Program Integrity Challenges and Is Rife with Abuse (Questions 5 and 7) The 340B Program has been operating for years beyond statutory authority and serving as a profit-maximizing opportunity for covered entities, rather than as Congress intended: to help ensure that vulnerable patients have appropriate access to care and medicines.3 At the root of many of the program integrity issues discussed below are a lack of transparency and covered entities persistent efforts to maximize their financial benefit from the 340B Program. Covered entities utilize models that perpetuate illegal duplicate discounting and diversion. A key example is the replenishment model, an inventory system that many covered entities and for-profit pharmacies utilize to manage 340B drug purchases. Under a replenishment model, the 340B price is not provided at the point of sale, but rather requested after the fact through a process that shrouds program abuse. More specifically, a covered entity, through its contract pharmacy, uses a neutral inventory to dispense drugs to both 340B patients and non-340B patients alike. Drugs purchased at both the 340B price and at other prices are intermingled within this common inventory. After deciding to seek 340B pricing for an already-dispensed prescriptionsometimes weeks or months laterthe covered entity seeks to replenish its stock at the 340B ceiling price. That 340B-priced drug is then placed back in the common, neutral inventory, intermingled with and indistinguishable from drugs purchased at non-340B prices. When the pharmacy dispenses a drug to a patient, the drug comes out of that neutral inventory and neither the pharmacist, covered entity, nor patient know whether the unit dispensed is a unit for which the covered entity is permitted to receive the 340B price. Eligibility for 340B pricing is thus determined only when the replenishment order is placed, which often occurs weeks, months, or even a year after the prescription is dispensed. More recently, covered entities are adopting novel systems, such as credit-based replenishment models4 and alternative distribution models5 that further reduce transparency and obfuscate the ship to, bill to process established under HRSAs contract pharmacy guidance.6 These distribution models frustrate efforts to identify duplicate discounts and present significant diversion risks. This section describes persistent abuses of the 340B Program, including covered entities seeking statutorily-prohibited duplicate discounts and diverting 340B medicines to individuals 3 H.R. Rep. 102-384(II) at 1012 (1992). The purpose of the federal 340B Program is to reduce pharmaceutical costs for safety-net medical providers and the indigent populations they serve by creating a low-cost source of pharmaceutical medication for the indigent patients themselves. Connor J. Baer, Drugs for the Indigent: A Proposal to Revise the 340B Drug Pricing Program, 57 Wm. & Mary L. Rev. 637, 638 (2015) (footnote omitted). 4 AmeriSource Bergen, Looking for a Way to Remove 340B Inventory Management Burdens, https://www.amerisourcebergen.com/-/media/assets/amerisourcebergen/340b/isp-virtual-replenishment-program- slick.pdf (Leveraging a credit-based approach, 340B drugs are purchased without the need for on-site storage). 5 Verity, Alternative Distribution, https://verity-solutions.com/solution/alternative-distribution/ (Our Alternative Distribution Model (ADM) restores 340B savings benefits by shipping replenished drugs directly to the covered entity, then transferring them to a contract pharmacy for dispensing.). 6 75 Fed. Reg. 10272, 10277 (March 5, 2010). 4 who are not their patients. The current system does not adequately police abuses and creates strong financial incentives for covered entities to violate statutory requirements. A. Governmental and Manufacturer Efforts to Prevent 340B and Medicaid Duplicate Discounts Have Been Ineffective The 340B and Medicaid statutes include a longstanding prohibition on Medicaid and 340B duplicate discounts: It is a violation of the 340B statute to cause a drug manufacturer to pay both a Medicaid rebate and provide a 340B discount on the same unit of drug.7 Despite this clear statutory prohibition, duplicate discounting is pervasive, in part, due to a lack of proper regulatory oversight and adequate means for manufacturers to identify and prevent duplicate discounts. 1. HRSAs Mechanism to Prevent Illegal 340B and Medicaid Duplicate Discounts Is Insufficient HRSAs current approach to preventing 340B and Medicaid duplicate discounts, the Medicaid Exclusion File (MEF), has proven inadequate. Currently, when a covered entity enrolls in the 340B Program, it must inform HRSA whether it will use 340B drugs for its Medicaid fee- for-service patients (carve-in) or whether it will purchase drugs for its Medicaid fee-for-service patients through other mechanisms (carve-out).8 If a covered entity carves-in, the covered entitys billing number will be reflected in the MEF, which notifies state Medicaid agencies that drugs purchased under that billing number are not eligible for a Medicaid rebate. The MEF is of limited utility because the data on the HRSA MEF applies to Medicaid fee-for-service only, and does not apply to Medicaid managed care organizations (MCOs),9 which is the dominant delivery system for people enrolled in Medicaid.10 With approximately 78% of Medicaid beneficiariesmore than 66 million individualsenrolled in risk-based, comprehensive MCOs,11 the MEF captures only about 22% of beneficiaries in fee-for-service or other delivery arrangements. Another significant gap is that the MEF does not list the billing number of a covered entitys contract pharmacy. Although HRSA guidance recommends that covered entities, contract pharmacies, and states develop arrangements to prevent duplicate discounts,12 the Government Accountability Office (GAO) and the Health and Human Services Office of Inspector General (HHS OIG) have found that these policies often fail to prevent duplicate discounts. For example, in a 2020 report, the GAO stressed that HRSAs failure to ensure that covered entities are 7 Public Health Service Act (PHSA) 340B(a)(5). 8 HRSA, Duplicate Discount Prohibition, https://www.hrsa.gov/opa/program-requirements/medicaid-exclusion. 9 HRSA, Duplicate Discount Prohibition, https://www.hrsa.gov/opa/ program-requirements/medicaid-exclusion. 10 KFF, 10 Things to Know About Medicaid Managed Care (Feb. 27, 2025), https://www.kff.org/medicaid/10-things- to-know-about-medicaid-managed-care/ (The latest national Medicaid managed care enrollment data (from 2022) show 75% of Medicaid beneficiaries were enrolled in comprehensive managed care organizations (MCOs).). 11 KFF, 10 Things to Know About Medicaid Managed Care (Feb. 27, 2025), https://www.kff.org/medicaid/10-things- to-know-about-medicaid-managed-care/ (The latest national Medicaid managed care enrollment data (from 2022) show 75% of Medicaid beneficiaries were enrolled in comprehensive managed care organizations (MCOs).). 12 HRSA, Notice Regarding 340B Drug Pricing Program Contract Pharmacy Services, 75 Fed. Reg. 10272, 10278 (March 5, 2010). 5 complying with 340B Program requirements, including the prohibition on duplicate discounts in managed care . . . not only puts drug manufacturers at risk of providing duplicate discounts, but also compromises the integrity of the 340B Program.13 The HHS OIG has expressed similar concerns, emphasizing that claim level methods are needed to identify 340B drug claims and correctly collect rebates for MCO drugs.14 GAOs and HHS OIGs concerns are supported by a Manatt survey, which reviewed states differing approaches to preventing 340B and Medicaid duplicate discounts. 15 According to the survey, 12 states rely solely on the MEF to identify 340B drugs that are billed to Medicaid, with certain states having no policies or guidance for MCOs. The survey also found that there was significant inconsistency in how states identify duplicate discounts at contract pharmacies. The Manatt survey is consistent with AbbVies experience, described further below. We have observed that states also vary in how each operationalizes carve-in and carve-out policies, further complicating efforts to identify Medicaid duplicate discounts. For example, a covered entity may be listed as carved-in on the MEF, but contract pharmacy claims may not be clearly distinguishable at the claim level. Without appropriate actions to enforce federal law requirements and clarify how states, MCOs, and contract pharmacies identify and report 340B claims, duplicate discounts will continue to go undetected at scale imposing unlawful costs on manufacturers and undermining the integrity of both the 340B program and the Medicaid Drug Rebate Program. 2. AbbVies Efforts to Prevent Illegal 340B and Medicaid Duplicate Discounts AbbVies own efforts to prevent illegal duplicate discounts reinforce the stark inadequacy of HRSA oversight of this issue. AbbVies primary method of ensuring that it is not paying both 340B discounts and Medicaid rebates on the same unit of a drug is to review purchase data from covered entities and their contract pharmacies and to identify anomalies. AbbVie has committed substantial resources to this challenge, including employing a team of ten employees and engaging two vendors. The first vendor identifies potential duplicate discounts by comparing state-level Medicaid claim data against 340B chargeback data. However, 340B chargeback data may not contain sufficient identifiers to directly match against Medicaid rebate submissions without supplemental analytics because there is no universally applied 340B indicator that is consistently transmitted at the point of sale or in-state rebate invoicing. This creates particular issues with regard to contract pharmacy arrangements, where AbbVie must perform a secondary analysis with a different vendor to identify whether a claim is expected to be 340B-eligible. To that end, AbbVie has a policy of requiring covered entities to submit claims data for any contract pharmacy locations. This commitment to data transparency aligns with the broader national push for pricing accountability in healthcare most recently reflected in President Trumps Executive Order, 13 GAO, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO-20-212, at 27 (Jan. 2020), https://www.gao.gov/assets/gao-20-212.pdf. 14 OIG, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates, OEI-05-14-00430, at 2 (June 2016), https://oig.hhs.gov/oei/reports/oei-05-14-00430.pdf. 15 Manatt, State Medicaid Programs and 340B: 50-State Survey Results (Oct. 21, 2019), https://www.manatt.com/insights/newsletters/health-highlights/state-medicaid-programs-and-340b-50-state-survey-r. 6 Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information,16 which underscores that opaque arrangements in the healthcare system must be met with greater transparency and accountability. Despite this significant investment in resources, AbbVie has millions in disputed Medicaid duplicate discount claims activity that has remained unresolved for years, largely because covered entities refuse to work with AbbVie to comply with their statutory obligations. Among our biggest challenges is access to data. AbbVies efforts to collect the data necessary to identify and prevent duplicate discounts have faced considerable pushback from covered entities. Although covered entities are statutorily-required to maintain auditable records sufficient to demonstrate compliance with all 340B requirements17, they have refused to provide basic data that would help manufacturers, like AbbVie, identify possible program abuse. Compliant covered entities have nothing to fear from transparency. If a hospital is not engaged in diversion or other 340B abuses, it should welcome the sharing of information necessary to ensure accurate Medicaid rebate payments. Opposition to that disclosure is itself evidence of a problem, and is flatly inconsistent with both the compliance assurances these entities made as a condition of 340B participation and the transparency priorities. As discussed further in Section IV, our claims data policies have also been stymied by state laws prohibiting manufacturers from requiring covered entities to provide claims datalaws that are preempted by Section 340B. As one federal judge noted, when a manufacturer can only request the necessary data from covered entities, a covered entity can simply decline the request and there is not much recourse available to a manufacturer. Instead, covered entitieswho may be engaging in the kind of fraud that the 340B Programs administrative dispute resolution [(ADR)] system is meant to preventwill essentially be the ones determining whether or not they wish to give manufacturers the very data necessary to start such an audit. The 340B Program certainly did not establish a system where the fox guards the hen house.18 Yet such a system has emerged. 16 Exec. Order No. 14221, Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information, 90 Fed. Reg. 11005 (Feb 28, 2025), https://www.federalregister.gov/documents/2025/02/28/2025-03440/making-america-healthy-again-by-empowering- patients-with-clear-accurate-and-actionable-healthcare. 17 PHSA 340B(a)(5)(C) 18 Pharma. Rsch. & Mfrs. of Am. v. Morrisey, 760 F. Supp. 3d 439, 453 (S.D. W. Va. 2024), affd sub. nom., Pharma Rsch. & Mfrs. of Am. v. McCuskey, No. 25-1054, --- F.4th ----, 2026 WL 898259, 2026 U.S. App. LEXIS 9272 (4th Cir. Mar. 31, 2026). 7 AbbVie also experiences challenges accessing timely and complete Medicaid claim-level data from states, which have varying policies. In many states, AbbVie is limited in its ability to accurately match claims; certain states do not routinely provide full claim-level data, provide it in non-standardized formats, or limit key data elements (e.g., prescriber, NPI, contract pharmacy indicator, 340B indicator). Even when AbbVie does identify duplicate 340B and Medicaid rebate claims and provides claim-level evidence, some states have taken the position that the burden of correction rests solely with the covered entity even if the covered entity complied with the states policies (e.g., covered entity is properly listed in the MEF). This can create a structural impasse for manufacturers, like AbbVie, who lack contractual privity with covered entities under the Medicaid Drug Rebate Program, leading to prolonged disputes and delays in repayment. In other circumstances, covered entities refuse to work directly with AbbVie to resolve validated duplicate discounts and direct AbbVie to individual states, each of which has its own process. Of the Medicaid duplicate discounts that AbbVie has been able to identify approximately $250 million remain unresolved with roughly 60% pending for over two years with no sign of resolution. The current system is not working, and as explained below, a Rebate Model would provide an effective and efficient means to prevent illegal 340B/Medicaid duplicate discounts. B. The Inflation Reduction Act Compounds 340B Nonduplication Risks and Increases Financial Exposure The IRA provides that the manufacturer of a selected drug is only required to provide access to the lower of the MFP or the 340B price, but is not required to provide both.19 In guidance, CMS has asserted that responsibility rests on manufacturers [to] ensure that the appropriate price concession is honored.20 At the same time, the IRA guidance establishes a 14-day prompt MFP payment window, which requires Primary Manufacturers to transfer MFP refunds within 14 days of receiving limited claims data elements from the Medicare Transaction Facilitator.21 Significantly, these data elements do not include a mandatory 340B claim identifier or any other information that would constitute sufficient evidence that a claim was 340B-eligible.22 In failing to establish a mechanism to prevent duplication of the MFP and 340B ceiling price, CMS has ignored its obligation to comply with the statutorily-required pricing and nonduplication provisions of the IRA, leaving manufacturers in the untenable position of lacking access to the data necessary to provide such access. The statutes use of the term shall not be required23 does more than delineate the responsibilities of manufacturers participating in both the Medicare Drug Price Negotiation Program (MDPNP) and the 340B program; it also assigns to the agency, as the administrator of the MDPNP, a duty to ensure manufacturers are not subject to 19 Social Security Act (SSA) 1193(d). 20 CMS, Drug Price Negotiation Program: IPAY 2028 Final Guidance, 40.4.5, p. 253 (Sep. 30, 2025) (IPAY 2028 Final Guidance), https://edit.cms.gov/files/document/ipay-2028-final-guidance.pdf. 21 Id. 40.4.1. 22 Id. at 72. See id., tbl. 2 at 219. 23 SSA 1193(d). 8 duplicative discounts under the MDPNP and 340B. A recent article published on 340B Report states that of claims reviewed by a vendor, manufacturers paid duplicate MFP and 340B discounts on 30% of claims.24 BRG has estimated that the cost of duplicative discounts to manufacturers of selected drugs, without mediation, in just 2026 alone, would be over $4 billion.25 Not only are those duplicative discounts prohibited, but they also may result in confiscatory negative pricing for manufacturers. For example, if the wholesale acquisition cost for a drug is $1,000, the MFP is $500, and the 340B ceiling price is $250; a manufacturer would be forced to provide $1,250 in discounts on a drug that cost only $1,000.26 CMSs 14-day prompt pay window means manufacturers must be able to identify in real time whether a drug is eligible for MFP or 340B pricing, or both, and then effectuate that price. Manufacturers who fail to provide access to the MFP by CMSs deadline risk massive civil monetary penalties, equal to 10 times the difference between the amount charged and the MFP for each unit of drug sold.27 The widespread use of replenishment models, however, creates significant logistical challenges. Without timely access to claims information or a requirement for covered entities to identify 340B claims in real time, manufacturers have no way to determine whether a particular prescription was subject to a lower 340B price within the 14-day payment window. Since the IRA passed, AbbVie has invested millions of dollars and countless hours preparing for MFP effectuation. AbbVie engaged in a two-year process, forming an expansive internal team that engaged a specialized vendor, and consistently worked with CMS to build a claims evaluation procedure through which AbbVie would provide the MFP on a unit of a selected drug. AbbVie also has spent years evaluating different options for 340B deduplication, including requiring covered entities to certify claims, a rebate model, and self-identification of 340B claims by covered entities. Without the Rebate Model pilot, manufacturers must resort to estimation methodologies derived from historical 340B purchasing patterns to reasonably determine if a claim may be subject to a 340B ceiling price that is duplicative of the MFP claim. Moreover, the available data is limited it does not and cannot account for situations where more than one covered entity is replenishing the same specific claim at the 340B ceiling price.28 In fact, the primary available 24 340B Report, 40% of Claims Miss the Mark (Mar. 5, 2026), https://340breport.com/40-of-claims-miss-the-mark- sponcon-rxparadigm. 25 BRG, CMS October 2024 Final Guidance for MFP Effectuation in 2026-2027: Implications for Duplication with the 340B Channel (2024), https://media.thinkbrg.com/wp-content/uploads/2024/10/23161214/BRG-Implications-for- Duplication-with-_the-340B-Channel-2024.pdf. 26 In recent litigation, covered entities have suggested that duplicative discounts would only be at issue if manufacturers were to make an MFP available retrospectively, or through a rebate. See Compl. 88, The Am. Hosp. Assn v. Kennedy, No. 25-cv-600 (D. Me.). That is not true. Even if a manufacturer were to provide the purchase of a drug subject to an MFP prospectively that discount would still have to be validated through the MTF as going to an MFP-eligible individual and the manufacturer would still need to determine if that same claim was also the subject of a request for a 340B discount. Because the current status quo does not have a required time period in which covered entities must assert a claim is eligible for a 340B discount, there is no way to determine the duplicative discount within the 14-day period in which manufacturers must provide MFP, regardless of whether the MFP price is provided prospectively or retrospectively. 27 SSA 1197(a). 28 BRG, 340B Patient Definition Implications for Duplicate Replenishment at 2 (2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for- Duplicate-Replenishment.pdf (A recent analysis of Medicare Part D Prescription Drug Event (PDE) data for 2024 9 data field in MFP refund claims that will enable manufacturers to even attempt to predict potential duplicate discounts with 340B is the National Provider Identifier (NPI). But CMS specifically noted in its Final Guidance that NPI alone provides an insufficient basis through which to de- duplicate claims.29 The reality is that manufacturers are not able to identify 340B claims and are certainly paying duplicate discounts. As of April 1, 2026, BRG conservatively estimates that where a claim was eligible for both MFP and a 340B discount, manufacturers to date have paid both rebates in 40% of cases.30 Without a means to identify 340B claims and 15 more drugs becoming subject to MFP next January, this issue will continue to expand. The complexity of deduplication will be further compounded beginning in 2028, when Medicare Part B claims become subject to MFP. This distinction is significant: while 80,000-plus pharmacies submit claims under Part D31, there are over 1.5 million healthcare providers participating in Medicare Part B32 The dramatic expansion in the number of entities to which MFP must be effectuated will substantially increase the logistical burden on manufacturers and further complicates deduplication efforts. An appropriate 340B Rebate Model is the only reliable and effective option to address deduplication. HRSA approved AbbVies application under the prior Pilot Program, which would have provided an effective solution if it had gone into effect. However, MFPs became effective starting on January 1, 2026, and, without the ability to use a Rebate Model, AbbVie has been left without an effective means to deduplicate MFP and 340B claims. AbbVie faces significant harms from this inability to deduplicate 340B/MFP claims, as required under the IRA. Moreover, the lack of a clear and transparent process for nonduplication introduces significant inefficiencies, including the increased risk of disputes over the applicable price for a particular unit. Not only do these disputes delay payments to covered entities and pharmacies, but they also financially burden manufacturers, covered entities, dispensing entities and federal oversight and dispute resolution processes. To date, HHS has failed to establish any forum or mechanism through which disputes arising from MFP determinations can be resolved. Similarly, accurate deduplication would likely decrease the number of complaints regarding MFP availability submitted to the centralized intake system established by CMS by dispensing entities, reducing the burden on CMS to track and investigate such complaints.33 By decreasing the need for these costly and burdensome dispute and complaint procedures, accurate deduplication of MFP and 340B ceiling price through a Rebate Model would increase overall efficiency across HHS. Not to mention that the increased transparency and integrity of the 340B program would likely reduce costs to the federal government across multiple programsincluding Medicare, Medicaid and the 340B program, as discussed throughout this comment. indicates that, if all covered entities used a three-year test to define patient, which many covered entities have now adopted, 20 percent of brand drug PDEs could be replenished by more than one covered entity. (emphasis added)). 29 IPAY 2028 Final Guidance at 254 40.4.5. 30 See supra note 21. 31 90 Fed. Reg. 15792, 15837 (April 15, 2025) (currently approximately 60,000-plus community pharmacies and 80,000-plus dispensing entities in total dispense drugs to Medicare Part D beneficiaries). 32 CMS, Fast Facts at 9 (April 2025), https://data.cms.gov/sites/default/files/2025-04/CMSFastFacts2025_508.pdf (lists 1,523,718 Total Providers) 33 Final Guidance 90.2.2 at 290. 10 We support HRSAs efforts to approve the use of a rebate model and urge the agency to move quickly. In the interim, AbbVie has invested significant time and research into evaluating alternative means by which it could identify duplicate discounts. The Beacon platform has implemented a self-identification option for claims submitted as MFP-eligible. But, BRG estimates that through the first quarter of 2026, only 1.5% of claims have been self-identified as 340B, confirming that such efforts do not work. C. Manufacturers and HRSA Lack Effective Means to Prevent Diversion to Individuals Who Are Not Patients of a Covered Entity The 340B statute prohibits covered entities from selling or otherwise transferring drugs purchased under the 340B Program to a person who is not a patient of the covered entity (a practice known as diversion).34 Congress included that requirement to avoid the clear constitutional problems that would arise if other entities are permitted to participate in the program or benefit from the sale of manufacturers drugs at steeply discounted prices. Unfortunately, HRSA has not enforced Congresss commands, and as a result, manufacturers 340B-discounted drugs are frequently sold or transferred to non-patientsboth individuals who are not eligible to receive drugs at the 340B price and third-party, for-profit entities that are not entitled to participate in the 340B Program. The problem of diversion of 340B-priced drugs to individuals who cannot reasonably be considered patients of the covered entity is well-documented, but HRSA has failed to adequately address it.35 Drug manufacturers are unable to combat diversion effectively because, as discussed above, covered entities do not provide them with the information they need to identify diversion. Manufacturers lack direct access to claims data that may enable them to identify that a drug was dispensed to an individual who is not a patient of the covered entity, and covered entities often intentionally thwart manufacturer efforts to obtain this information to resolve suspected diversion and duplicate discounting.36 For example, manufacturers can investigate suspected diversion through the exercise of their statutory right to audit covered entities, but HRSA does not always approve a manufacturers request to audit a covered entity. And, even in instances where HRSA found a manufacturer had reasonable cause to suspect diversion and approved the audit, covered entities have sued to prevent the manufacturer from exercising its rights.37 Between the lack of 34 PHSA 340B(a)(5)(B). 35 See, e.g., GAO, Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement, GAO-11-836 (Sep. 2011) (recommends that HRSA finalize new, more specific guidance on the definition of a 340B patient.); HHS OIG, Memorandum Report, Contract Pharmacy Arrangements in the 340B Program, OEI-05-00431 (Feb. 2014) (Covered entities in our study reported different methods of identifying 340B- eligible prescriptions, and in some cases their determinations of 340B eligibility differ from one covered entity to another for similar types of prescriptions. This suggests a lack of clarity on how HRSAs patient definition should be applied in contract pharmacy arrangements.). 36 See Pharma Rsch. & Mfrs. of Am. v. McCuskey, No. 25-1054, --- F.4th ----, 2026 WL 898259, 2026 U.S. App. LEXIS 9272, at *31-32 (4th Cir. Mar. 31, 2026) (explaining that a manufacturer will be unable to identify suspected diversion if it is unable to require covered entities to provide claims data). 37 See, e.g., Or. Health & Sci. Univ. v. Engels, No. 24-cv-2184, 2025 WL 1707630 (D.D.C. June 17, 2025). 11 information and covered entity efforts to thwart manufacturers attempts at identifying program abuse, the problem of diversion of 340B-priced drugs currently has no solution. This problem is compounded by the fact that Section 340B does not expressly define the term patient leaving its meaning to be understood through statutory context and the application of tools of statutory construction. In 1996, HRSA issued non-binding guidance providing that an individual is a patient of a covered entity only if: (1) the covered entity has established a relationship with the individual, such that the covered entity maintains records of the individuals health care; (2) the individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and (3) the individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-Qualified Health Center (FQHC) look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this third requirement.38 Under HRSAs 1996 guidance, an individual will not be considered a patient of the covered entity if the only health care service received by the individual from the covered entity is the dispensing of a drug or drugs for subsequent self-administration or administration in the home setting.39 HRSAs definition of the term patient has not changed since 1996, and it sweeps in individuals who cannot reasonably be considered patients of a covered entity consistent with the ordinary meaning of that term. In addition to being ambiguous, HRSAs patient guidance has failed to keep up with technology and changes in healthcare delivery (for example, the widespread use of telemedicine). Further, under the prevailing replenishment model, 340B-priced units inevitably end up in the hands of individuals who are not patients of the covered entitydespite Congress prohibiting covered entities from transfer[ring] the drug to a person who is not a patient of the entity.40 A recent analysis of Medicare Part D Prescription Drug Event (PDE) data for 2024 indicates that, if all covered entities used a three-year test to define patient, which many covered entities have now adopted, 20 percent of brand drug PDEs could be replenished by more than one covered entity.41 From that statutory directive, AbbVie strongly believes that Congress did not contemplate the replenishment model when it created the 340B Program. HRSA audit results confirm significant instances of product diversion among audited covered entities. These abuses demonstrate that covered entities are accruing deeply discounted prices on purchases that are not dispensed to eligible patients. Worse yet, as again recognized by a recent Senate Report, covered entities are not sharing the discounts with the patients they serve or even to accounting for the discounts they receive in any public or transparent way.42 Because their diversion goes undetected and unpunished, covered entities have little incentive to 38 61 Fed. Reg. 55156, 5515758 (Oct. 24, 1996). 39 61 Fed. Reg. at 5515758. 40 PHSA 340B(a)(5)(B). 41 BRG, 340B Patient Definition Implications for Duplicate Replenishment at 2 (2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for- Duplicate-Replenishment.pdf. 42 Senate HELP Committee, Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program (April 24, 2025) (HELP Report), https://www.help.senate.gov/imo/media/doc/final_340b_majority_staff_reportpdf.pdf. 12 (1) enact measures to ensure their 340B-priced drugs end up only in the hands of patients, as Congress intended, and (2) to share discounts with patients. II. A Rebate Model Would Address 340B Program Integrity Issues HRSA must take action to address persistent abuses of the 340B Program. A critical first step would be for HRSA to allow manufacturers to use a Rebate Model. This section describes the structure of a potential Rebate Model, including its potential uses and benefits, the minimum data elements necessary to determine whether a drug is 340B-eligible, the bases for denying rebates, and evaluations to ensure that a Rebate Model is operating as intended and to its fullest potential. A. A Rebate Model is Needed Facilitate Compliance with Statutory Prohibitions Against Duplicate Discounting and Diversion (Question 7) A Rebate Model would provide a mechanism to enforce statutory provisions that prohibit duplicate discounts and bring much-needed transparency to the 340B Program, in line with statutory requirements and HRSAs obligation as the agency charged with administering the 340B Program, at minimal cost to the federal government and covered entities. This section describes potential uses of a Rebate Model. A Rebate Model is needed to facilitate compliance with the 340B duplicate discount prohibitions under Medicaid and the IRA. As discussed in Section I, currently, manufacturers have no reliable method to identify which discount to offer on a particular unit because the current system does not require covered entities to provide manufacturers with claims data. A Rebate Model is the only solution that can provide claims data and operate within the time constraints of the MDPNP to avoid duplicative payments. Under a Rebate Model, a manufacturer can evaluate whether a specific 340B rebate request is for a unit for which another drug discount was already paid. If that is the case, and a statutory duplicate discount prohibition applies (e.g., Medicaid, MFP), the manufacturer can avoid paying duplicate discounts. This is in stark contrast to the prevailing replenishment model, under which manufacturers lack this visibility and are reliant on covered entities to indicate whether a claim has already been subject to a different federal drug program discount. As the D.C. Circuit has noted, [t]he covered entity, the pharmacy, and the third- party administrator often divvy up the spread between the discounted price and the higher insurance reimbursement rate.43 Accordingly, [e]ach of these actors ... has a financial incentive to catalog as many prescriptions as possible as eligible for the discount.44 These financial incentives, combined with delays inherent under the replenishment model, fuel program abuses. When it approved the Pilot Program last year, HRSA declined to permit manufacturers to use the Rebate Model to deny a 340B rebate when appropriate to prevent a Medicaid duplicate discount. Instead, HRSA stated that manufacturers could raise concerns regarding Medicaid 43 Novartis Pharms. Corp. v. Johnson, 102 F.4th 452, 457 (D.C. Cir. 2024). 44 Id. at 45758. 13 duplicate discounts directly with OPA [(the Office of Pharmacy Affairs)] or utilize the 340B statutory mechanisms, such as audits and administrative dispute resolution (ADR)[.]45 While AbbVie appreciates that these mechanisms have an appropriate place in 340B Program integrity, HRSA should not push for costly audits and ADR to resolve disputes when manufacturers can use the data available under a Rebate Model to identify and remedy clear instances of program abuse and statutory violations. Moreover, in a recent report, GAO found that despite repeated recommendations, HRSAs audits do not fully assess compliance with the program requirement that prohibits covered entities from subjecting manufacturers to duplicate discounts, in which drugs are subject to 340B discounted prices and rebates under the Medicaid program.46 Relying on the audit and ADR process to address duplicate discounts is not only inefficient, but also an ineffective use of governmental and stakeholder resources. A Rebate Model could prevent diversion of 340B drugs. A Rebate Model could prevent diversion more effectively than under the prevailing replenishment model, because instead of the pharmacy dispensing from a neutral inventory where drugs purchased at 340B prices and other prices are intermingled and indistinguishable, with a Rebate Model, the drug for which the covered entity requests a rebate is tied to a dispensed claim. This would reduce the risk of diversion, ensuring that 340B-priced drugs go to the individuals whom Congress intended. Given the evidence of increasingly brazen diversion under the 340B statute, including multiple covered entities claiming the same dispense47 and covered entities claiming dispenses for individuals who received care from unrelated providers in other states, it is essential that HRSA take action to address rampant diversion. AbbVie believes that it would be an inefficient and ineffective use of government and stakeholder resources if instances of diversion are adjudicated solely through the ADR process making a Rebate Model a more efficient and reliable means of identifying and resolving instances of diversion. Data from a Rebate Model could allow manufacturers (and HRSA) to identify instances when two covered entities have requested 340B pricing on the same unit of a drug. This practice patently violates the 340B statute, which describes the 340B ceiling price for a unit of drug purchased by a covered entity, not multiple covered entities.48 However, without claims data from a Rebate Model, identifying this illegal and widespread practice would be impossible. B. A Rebate Model Could Provide Additional Benefits to the Government and Stakeholders (Question 7) In addition to the potential uses of a Rebate Model described above, below we identify other potential benefits to the federal government and 340B program stakeholders. Any costs or 45 90 Fed. Reg. at 38166. 46 GAO, 340B Drug Discount Program: Agency Oversight Has Improved, but Actions Needed to Address Weaknesses, GAO-26-108784, at 27 (Oct. 2025), https://www.gao.gov/assets/gao-26-108784.pdf. 47 BRG, 340B Patient Definition Implications for Duplicate Replenishment at 2 (2026), https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Definition-and-Implications-for- Duplicate-Replenishment.pdf (A recent analysis of Medicare Part D Prescription Drug Event (PDE) data for 2024 indicates that, if all covered entities used a three-year test to define patient, which many covered entities have now adopted, 20 percent of brand drug PDEs could be replenished by more than one covered entity. (emphasis added)). 48 PHSA 340B(a)(1). 14 additional burdens under a Rebate Modelwhich would be minimal for the government and covered entitiesare outweighed by the benefits of a Rebate Model. Transparency Can Reduce Cost. A Rebate Model would increase transparency and the integrity of the 340B Program, ultimately reducing costs to the federal government across multiple programsincluding Medicare, Medicaid and the 340B Program. Increased transparency into 340B claims can work hand-in-hand with existing statutory mechanisms to safeguard program compliance. The 340B statute empowers manufacturers who suspect wrongdoing to conduct audits and seek resolution of disputes through a federal 340B ADR process.49 Under current HRSA regulations, a manufacturer may audit a covered entity only when it can furnish documentation which indicates that there is reasonable cause, defined to mean that a reasonable person could believe that a covered entity may have violated the prohibitions on diversion or Medicaid duplicate discounting.50 Thus, a manufacturer must already possess such documentation in order to access the audit and ADR processes. Yet covered entities routinely decline to provide manufacturers, on a voluntary basis, with access to the type of information necessary to obtain HRSAs permission to initiate an audit. A Rebate Model would help address that informational gap, thereby facilitating the effective functioning of the audit and ADR processes. A Rebate Model would increase program transparency, as claims data would be made available to manufacturers for review in a timely manner, reducing unnecessary disputes. The information that a manufacturer would request under a Rebate Model is comparable to the information that covered entities are already obligated to collect under the statute as a condition of receiving access to 340B pricing including pharmacy, medical, and purchase data elements, such as the date of service, the prescriber number, and the account number. Covered entities are required to maintain this data for a set period of timeoften between five to seven years. When audits are needed, Rebate Model claims data will enable manufacturers to provide audit requests to HRSA with supporting claims documentation. A Rebate Model would facilitate more-detailed audit requests, which would allow HRSA to review audit requests with greater ease and reduce back-and-forth communications with manufacturers. Moreover, AbbVie is aware of federal budget constraints regarding 340B Program oversight; a Rebate Model will help streamline processes such that HRSA can do more on a limited budget. Provide a Mechanism for the Government to Exclude 340B Units from Part D Inflation Rebate Calculations. A Rebate Model also could provide a mechanism for excluding 340B units from the Part D inflation rebate calculations, at no cost to the federal government. In the calendar year 2026 Physician Fee Schedule final rule, CMS states that it is unable to precisely identify 340B units at the claim-level based on claims information reported to CMS by the covered entity.51 Because of this, CMS adopted a claims-based estimation methodology to exclude 49 PHSA 340B(a)(5)(C). 50 61 Fed. Reg. 65,406, 65,409 (Dec. 12, 1996). https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution- process-12-12-96.pdf. 51 90 Fed. Reg. 49266, 49740 (Nov. 5, 2025) (emphasis added). 15 340B units starting on January 1, 2026.52 Acknowledging the limitations of an estimation methodology, CMS also established a repository to receive voluntary submissions from covered entities of certain data elements from Part D 340B claims to identify claims that should be excluded from the Part D inflation rebate calculation.53 However, covered entities are unlikely to submit data to the repository voluntarily, and enforcement would require significant governmental resources. Furthermore, this data is unlikely to be available to manufacturers in a way that could enable timely 340B-MFP deduplication. But CMS need not establish complex systems to identify and exclude 340B units from the Part D inflation rebate calculation. A Rebate Model is the solution. Under a Rebate Model, the claims level data that CMS is hoping to collect under a 340B repository will already be available. AbbVie strongly recommends HRSA and CMS coordinate to structure a Rebate Model that supports Part D inflation rebate calculations. A Rebate Model Should be Structured to Benefit Patients. Under the current system, most patients are unaware of the 340B Program54 because the significant discounts that manufacturers provide are very rarely shared with any patient. Generally, the price an insured patient pays for a 340B drug is set by their insurance company, and the price uninsured patients pay for a 340B drug is determined by the pharmacy. If the patient is insured, covered entities and their business partners turn a profit when insurance companies reimburse them at full price for drugs that they bought at the 340B discount.55 A study showed that in North Carolina, [i]ndividual 340B hospitals collected as much as $6,026 in average profits per claim by charging up to 12.7 times their 340B acquisition costs for oncology drugs.56 For instance, patients at one hospital paid an average of $5,353 for the oncology drugs that [the hospital] acquired for an average $517 . . . [or] paid 10.4 times the 340B acquisition costs.57 While some covered entities pass a portion of 340B savings to uninsured and underinsured patients, the reality is that most do not.58 The result is arbitrage revenue. AbbVie believes that a Rebate Model should be structured to encourage covered entities to pass on 340B savings to low-income patients. AbbVie 52 90 Fed. Reg. at 49740. 53 90 Fed. Reg. at 49749. 54 See, e.g., AbbVie Inc. v. Drummond, 808 F. Supp. 3d 1266, 1270 (W.D. Okla. 2025) (referring to the 340B Program as the most important drug pricing scheme virtually no one has heard of). 55 Sanofi-Aventis U.S. LLC v. Dept of Health & Human Servs., 58 F.4th 696, 699 (3d Cir. 2023). 56 North Carolina State Health Plan, Overcharged: State Employees, Cancer Drugs, and the 340B Drug Pricing Program, at 2, https://www.shpnc.gov/documents/overcharged-state-employees-cancer-drugs-and-340b-drug-price- program/download?attachment (last visited Apr. 2, 2026). 57 North Carolina State Health Plan, Overcharged: State Employees, Cancer Drugs, and the 340B Drug Pricing Program, at 2, https://www.shpnc.gov/documents/overcharged-state-employees-cancer-drugs-and-340b-drug-price- program/download?attachment (last visited Apr. 2, 2026) (emphasis added). 58 GAO, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement, GAO-18-480, at 30 (June 2018), https://www.gao.gov/assets/gao-18-480.pdf (Of the 55 covered entities responding to our questionnaire, 30 reported providing low-income, uninsured patients discounts on 340B drugs dispensed at some or all of their contract pharmacies, and 25 said they did not offer discounts at their contract pharmacies. All 30 covered entities providing patients with discounts reported providing discounts on the drug price for some or all 340B drugs dispensed at contract pharmacies. Federal grantees were more likely than hospitals to provide such discounts and to provide them at all contract pharmacies.); OIG, Memorandum Report: Contract Pharmacy Arrangements in the 340B Program, OEI-05-13-00431, at 14 (Feb. 4, 2014), https://oig.hhs.gov/oei/reports/oei-05-13-00431.pdf (Eight of thirty covered entities reported that they do not offer the 340B price to uninsured patients in any of their contract pharmacy arrangements.). 16 recommends that HRSA develop a Rebate Model designed to support vulnerable patients, including through inclusion of a patient definition. A thoughtful rebate approach could bring the 340B Program back in line with the statutory text and intended purpose: to serve the most vulnerable patients. C. Certain Minimum Data Elements Are Necessary to Ensure the Rebate Models Benefits Are Realized (Question 5) AbbVie believes that three categories of data elements are needed to effectuate a successful Rebate Model: pharmacy, medical, and supporting order unit data elements. AbbVie appreciates that the prior Pilot Program included pharmacy and medical claims data elements, and we encourage HRSA to maintain these elements in a future Rebate Model.59 Regardless of the scope of drugs included in a Rebate Model (i.e., just IRA selected drugs or a broader swatch of drugs) it is important to include both pharmacy and medical claims data elements. While the MFP is limited to Part D in initial price applicability years 2026 and 2027, selected drugs may be administered under Medicare Part B or another payers medical benefit, and pharmacy claims fields would not provide a manufacturer with the necessary information to determine whether a 340B rebate is owed in those instances. Moreover, the inclusion of pharmacy and medical claims data elements would facilitate the expansion of a Rebate Model to additional drugs, as discussed in Section II.E.3 of this letter. Further, we strongly encourage HRSA to require the submissions of supporting order unit data elements from the outset of the Rebate Model. In the prior Pilot Program, HRSA did not allow manufacturers to request such data,60 but expressed openness to evaluat[ing] potential incorporation of certain purchase data [a]s the pilot progresse[d].61 AbbVie maintains that data verifying the purchase of each individual unit is critical to a successful Rebate Model, both because proof of purchase is essential for validation of claims data and because of the importance of ensuring payment accuracythat the amount paid in a rebate is tied appropriately to the price the covered entity paid for a drug. Consistent with how manufacturer systems operate under the chargeback model, manufacturers must know the original invoice date of the package sold to determine the appropriate credit (including insofar as Wholesale Acquisition Cost (WAC) may change from time to time or if the covered entity purchased the drug at below WAC pricing). In addition, manufacturers offer various contract prices, made available on covered entities Group Purchasing Organization (GPO) accounts, that can be used to purchase covered outpatient drugs not eligible for the ceiling price. Moreover, while supporting order unit data may be applicable to more than one claim (purchases are generally at the package level, and AbbVie understands that 59 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/ https://www.hrsa.gov/opa/340b-model-pilot-program (available on Dec. 17, 2025). 60 AbbVie 340B Rebate Model Pilot Program Approval Letter, Ex. A to Decl. of E. Scheidler, Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600 (D. Me. Dec. 10, 2025), ECF No. 36-2. 61 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/ https://www.hrsa.gov/opa/340b-model-pilot-program (available on Dec. 17, 2025). 17 claims under the rebate model will be processed at the unit level), existing commercially-standard and readily-available information allows manufacturers to cross-reference that data and validate that a claim is attached to a verified purchase of a product under a Rebate Model. The invoice number and account number will allow manufacturers to correlate the purchases with claims data in order to ensure each claim is attached to a purchase at -a non-340B price. These data elements are already standard, maintained by covered entities and their Third Party Administrators (TPA) under the replenishment model. For those covered entities that do not leverage a TPA and use a physical inventory model, wholesalers readily maintain the necessary information, on behalf of covered entities, that can be provided to manufacturers to ensure accurate rebate payments. AbbVie also requests that HRSA add the following new data fields: (1) Part B Modifier. HRSA should leverage the existing 340B modifier that CMS requires for Medicare Part B drugs. In its Medicare Part B Inflation Rebate Program regulations, CMS requires that covered entities utilize a 340B modifier to identify Medicare Part B drugs acquired at 340B pricing.62 This identifier allows CMS to exclude those 340B units from manufacturer inflation rebate calculations under the IRA. This reporting mechanism operates today across covered entity types and is part of routine Part B medical claims billing. As covered entities already submit this 340B claims data under the Medicare program, it would be reasonable and impose no operational burden for covered entities to also submit this to manufacturers as part of a Rebate Model. This data would provide manufacturers with an existing field that provides pre-payment identification of 340B-discounted units for program integrity purposes. (2) Part D Modifier. Likewise, HRSA should require a 340B modifier for Part D drugs. The National Council for Prescription Drug Programs (NCPDP) standard format includes a 340B modifier,63 and its use is commonly required under Part D and commercial rebate agreements. (3) Any other 340B Modifier. To the extent any additional 340B modifier is required in a federal program, HRSA should require such modifier as a required data field under the 340B Rebate Model. (4) Child Site Modifier. A child site is an outpatient facility, such as an infusion center, located offsite from the main covered entity hospital. Historically, HRSA required child sites to satisfy two conditions before they could receive and dispense 340B-priced drugs: (1) they had to appear on the parent hospitals Medicare cost report, and (2) the 62 42 C.F.R. 427.303(b)(1). 63 NCPDP, 340B Information Exchange Reference Guide, v. 2.0, https://www.ncpdp.org/NCPDP/media/pdf/340B_Information_Exchange_Reference_Guide.pdf?ext=.pdf (NCPDP has developed multiple identifiers that can be used in connection with the exchange of information related to Section 340B, including Submission Clarification Code 420-DK, which [i]ndicates that prior to providing service, the pharmacy has determined the product being billed is purchased [under section 340B].). 18 child site had to be listed in HRSAs Office of Pharmacy Affairs Information System (OPAIS) database.64 These requirements were put in place to prevent diversion of 340B drugs, which may include when a covered entity purchases a drug at the 340B- discounted price for use at a purported child site that, in fact, does not meet the eligibility criteria under HRSAs guidance.65 Although HRSA temporarily waived the child site registration requirement in response to the global covid pandemic,66 covered entities have challenged the agencys decision to reinstate the child site registration policy.67 In light of this judicial decision limiting HRSAs authority to police 340B abuse by child sites, the burden of preventing diversion of 340B drugs through child sites now will fall largely on manufacturers. A child site modifier would provide manufacturers with a means to confirm whether a drug administered at a purported child site is eligible for 340B pricing. Although each of the three categories of necessary data elements that AbbVie is requesting serves a distinct purpose, there is significant overlap among the elements in each category (thus limiting the burden on participating covered entities), as illustrated below, in Table 1. Table 1: Proposed Data Fields 64 See 59 Fed. Reg. 47884, 47886 (Sept. 19, 1994). 65 59 Fed. Reg. at 47886. 66 See 88 Fed. Reg. 73859, 73859 (Oct. 27, 2023). 67 See Albany Med. Health Sys. v. HRSA, No. 23-cv-03252, 2026 WL 592593, at *34 (D.D.C. Mar. 3, 2026). 2025 Pilot Program HRSA- Approved Field Field Description Pharmacy Claims Medical Claims Supporting Order Unit Data Industry Standard[1] Date of Service Identifies date the prescription was filled at a pharmacy or professional services were rendered. Sometimes referred to as the Fill Date. Date Prescribed Date the prescriber wrote the prescription. Always comes on or before the Date of Service. Rx Number Identifier applied to the prescription by the pharmacy. Fill Number Indicates the number of times the prescription has been filled as of the current fill. (E.g., a value of 2 indicates that the prescription has been filled twice and the current fill is the second one.) NDC-11 11-digit National Drug Code which is a unique identifier of the drug dispensed to the patient and sold. Quantity / Quantity Dispensed Number of units (dispensed or sold). 19 AbbVie believes that the requested data elements are consistent with HRSAs expectation that under a Rebate Model, the data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities.68 Thus, the burden associated with a potential 340B Rebate Model Pilot Program data request[] may not be 68 91 Fed. Reg. at 9632, 9633 (Feb. 26, 2026). 2025 Pilot Program HRSA- Approved Field Field Description Pharmacy Claims Medical Claims Supporting Order Unit Data Industry Standard[1] Prescriber ID / Physician ID National provider identifier (NPI) of the prescriber that wrote the prescription or administered the drug. Service Provider ID / Ship-to- Pharmacy ID ID assigned to a pharmacy or provider billing location/ Service facility location of encounter (e.g., NPI of the pharmacy that filled the prescription), also referred to as ship-to pharmacy (NPI). 340B ID HRSA-assigned identifier of the 340B covered entity that purchased the product and designated the prescription as 340B. BIN Number Prescription Drug Bank Identification Number. Enables pharmacies to electronically transmit data to the appropriate PBM for processing and reimbursement. PCN Number Processor Control Number. Identifier used to determine which processor will handle a prescription drug claim. Might say CASH. Group ID Number A unique identifier assigned to a specific insurance plan that covers a group of people. Account Number Account number on the invoice used to make the purchase Invoice Date Date of sales invoice Invoice Number Unique identifier for the invoice Child Site Modifier An indication of whether the 340B drug was dispensed by a child site of a 340B covered entity. Medicare Part B 340B Claims Modifier A claims-level modifier used by 340B covered entities to identify Part B drugs acquired at 340B prices. Part D 340B Modifier A claims-level modifier used by 340B covered entities to identify Part D drugs acquired at 340B prices. 20 significant.69 AbbVie further believes that the requested data elements are the minimum necessary to operate an efficient and successful Rebate Model. D. Rebate Denials Should Be Permitted in Accordance with the 340B Statute and Based on Industry Standard Data Elements (Questions 3 and 4) AbbVie recommends that any rebate payment deadline be triggered only upon submission of complete and validated claims data, according to the HRSA-approved criteria, as verified by the manufacturer. In AbbVies experience validating limited customer data submissions through 340B ESP, we have received incomplete, inaccurate, and encrypted data that required follow-ups with customers to rectify. Basing any timelines or requirements on the receipt of incomplete or inaccurate data would frustrate the intent of a Rebate Model. Further, our proposed approach would be consistent with requirements of other federal healthcare program payments to pay clean claims, including the 30-day window for Medicare Administrative Contractor requiring receipt of all basic information necessary to adjudicate the claim, and all required supporting documentation,70 Medicare Part D claims,71 and Medicaid claims.72 Additionally, under the MDPNP, CMS has made clear that the 14-day payment window does not begin until after validation of claims by the Drug Data Processing System (DDPS) has been completed.73Moreover, allowing a 24 to 48 hour verification period would be reasonable and should not significantly affect the timeliness of rebate payments. Given that claim verification periods are well-established features of other federal healthcare payment 74 there is no basis for subjecting 340B rebate claims to a more burdensome or truncated standard. In the prior Pilot Program notice, HRSA limited 340B rebate denials to MFP deduplication and preventing duplicate covered entity rebate claims on the same 340B purchase.75 AbbVie requests that HRSA also allow rebate denials to ensure compliance with other statutory requirements, including the prohibitions on Medicaid duplicate discounts and diversion. 69 91 Fed. Reg. at 9633. 70 CMS, Medicare Claims Processing Manual, ch. 1 80.2. 71 42 C.F.R. 423.520(b). 72 42 C.F.R. 447.45. 73 CMS, Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028 (Sept. 30, 2025) (Once the data has been verified by the Part D plan sponsor and DDPS, and the MTF DM has verified that a claim has no DDPS edits directly related to MFP-eligibility, the MTF DM will make the claim-level data elements . . . available to the Primary Manufacturer to notify them that the selected drug was dispensed to an MFP-eligible individual. . . . The MTF DMs transmission of the claim-level data elements to the Primary Manufacturer starts the 14-day prompt MFP payment window. Id. at 225.). 74 See, e.g., CMS, Medicare Drug Price Negotiation Program: Final Guidance, Implementation of Sections 1191 1198 of the Social Security Act for Initial Price Applicability Year 2028 and Manufacturer Effectuation of the Maximum Fair Price in 2026, 2027, and 2028, 223, (Sep. 30, 2025), https://www.cms.gov/files/document/ipay-2028- final-guidance.pdf (After the Part D plan sponsor verifies Medicare eligibility and coverage of the selected drug, the plan pays the dispensing entity no more than the MFP plus any dispensing fees for the selected drug. . . . CMS, using DDPS, also performs verification steps to validate that the individual was an eligible Part D enrollee at the time of the claim.). 75 90 Fed. Reg. at 38166. 21 Specifically, AbbVie requests that HRSA permit rebate denials in the following instances: (1) a 340B rebate has already been paid on a particular unit and that same unit is submitted again but by a different covered entity; (2) deduplication for MFP; (3) providing the 340B price would generate an illegal Medicaid fee-for-service or MCO duplicate discount; and (4) instances where the manufacturer has identified diversion. E. AbbVie Supports Mandated Manufacturer Reporting to the Office of Pharmacy Affairs (Question 6) The Pilot Program required drug manufacturers to report certain data regarding the claims they had received and rebates they had paid 21 days after the end of each monthly, reflecting data for the prior month. AbbVie supports a similar requirement with any new Rebate Model. We are confident that consistent reporting and evaluations will highlight the benefits of a Rebate Model, paving the way for its expansion to additional 340B drugs and uses. 1. Manufacturers Should Report Data Directly to HRSA, Not Apexus AbbVie believes that if manufacturers are required to submit data for HRSAs review, those submissions must be made directly to the Office of Pharmacy Affairs (OPA). During the development of the prior Pilot Program, HRSAs Federal Register notice stated that manufacturers would provide periodic reports to OPA, detailing data on purchases provided through rebates, information related to claim delays and denials, and other information that may evaluate the effectiveness of the rebate model.76 But, when HRSA approved AbbVies participation in the Pilot Program, HRSA then said that AbbVie had to submit data to the 340B Prime Vendor, Apexus.77 AbbVie has significant concerns that the draft ICR that accompanies the RFI continues to propose that manufacturers would submit data to the 340B Prime Vendor.78 AbbVie believes such reporting to Apexus is inappropriate, creates conflicts of interest, and raises significant concerns about 340B Program integrity. Apexus is a wholly-owned subsidiary of Vizient, the largest GPO in the United States.79 It is an [i]ndependent[] entity and not . . . an agent of the Federal Government.80 Moreover, Vizient counts many hospital covered entities as clients, stating on its website that its clients make up 97% of academic medical centers in the U.S. [and] more than 69% of the acute care hospitals in the country.81 The conflicts of interest flowing from Apexus relation to Vizient have been scrutinized, including in litigation asserting that Vizient appears to be utilizing its relationship with Apexus to . . . increase its GPO business in ways its competitors cannot.82 Last year, the New York Times published an investigation 76 See 90 Fed. Reg. at 38166. 77 See AbbVie 340B Rebate Model Pilot Program Approval Letter, Ex. A to Decl. of E. Scheidler, Am. Hosp. Assn v. Kennedy, No. 2:25-cv-600 (D. Me. Dec. 10, 2025), ECF No. 36-2. 78 91 Fed. Reg. at 963233. 79 Definitive Healthcare, Top 10 GPOs by Staffed Beds (Oct. 24, 2025), https://www.definitivehc.com/blog/top-10- gpos-by-staffed-beds; Vizient, Frequently Asked Questions, https://www.vizientinc.com/frequently-asked-questions. 80 HRSA 340B Prime Vendor Agreement between HRSA and Apexus, at 1 (eff. Dec. 31, 2019) (Prime Vendor Agreement), available at https://www.hrsa.gov/sites/default/files/hrsa/foia/22f269-apexus-2019-contract.pdf. 81 Vizient, About Us, https://www.vizientinc.com/about-us. 82 Brief for Appellant at 14, AIDS Healthcare Foundation v. Apexus, LLC, (9th Cir. 2023) (No. 23-55425) (dismissed for failure to state a claim) (Vizient leverages Apexus to gain an unfair advantage against its GPO competitors, 22 questioning Apexuss business practices. The article stated that Apexus said its federal contract did not preclude it from developing other businesses, as long as they were not in conflict with the terms of the agreement.83 The article also said that [w]ith exclusive access to sales data, Apexus purchasing optimization team will analyze a hospital systems drug-buying habits and compare them with those of their competitors . . . . In some cases, Apexus will suggest that a hospital buy more 340B drugs or tweak its inventory in ways that can churn more cash.84 More recently, Senate Republicans on the Health, Education, Labor, and Pensions Committee have renewed concerns about Apexuss role in the 340B Program.85 Congress is investigating Apexus out of concern about the serious lack of transparency in the 340B Program.86 Especially in light of this ongoing investigation, it would be inappropriate to further expand Apexuss role in the 340B Program by requiring drug manufacturers with a Rebate Model to report information to Apexus. Reporting directly to OPA will be more efficient, strengthen the federal governments oversight of the 340B Program, and facilitate HRSAs oversight of the Rebate Model. 2. HRSA Should Collect Data on How the Rebate Model is Functioning And its Impact on Patients, At least on a Monthly Basis Substantively, AbbVie supports the manufacturer reports and associated timing that HRSA adopted as part of the prior Pilot Program. This included two reports, both of which were required to be delivered to OPA within 21 days after the end of each monthly, reflecting data for the prior month: Report 1: Data extracts of all previous months 340B Rebate claims to include the following data fields: o Claim submission date o 340B ID o NDC-11 purchased o Quantity o Unit WAC price o Unit 340B Ceiling Price o Unit MFP price o Rebate Amount because certain 340B-eligible hospital covered entities are statutorily prohibited from using GPOs to purchase 340B drugs. Apexus, however, can do so because it is the Prime Vendor and claims it is not a GPO. And, upon information and belief, Apexus has been granted the authority to purchase non-340B drugs at sub-wholesale costs. This allows Apexus/Vizient to unfairly compete with other GPOs, because hospitals will prefer to deal with a single GPO orin some casesbe required to by their drug wholesaler.). 83 Ellen Gabler, How a Company Makes Millions Off a Hospital Program Meant to Help the Poor, N.Y. Times (Jan. 15, 2025), https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. 84 Ellen Gabler, How a Company Makes Millions Off a Hospital Program Meant to Help the Poor, N.Y. Times (Jan. 15, 2025), https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. 85 Letter from Sen. B. Cassidy to C. Hatwig, President, Apexus, LLC (Feb. 1, 2026), available at https://www.help.senate.gov/imo/media/doc/26-02-01_chairman_cassidy_letter_to_apexus_finalpdf.pdf. 86 Id. at 3. 23 Report 2: Set of five data aggregations with the following information: o Aggregated sales by Covered Entity as defined in Section 340B(a)(4) of the Public Health Service Act o Average days from claim submission to rebate payment for all rebates paid o Number of rebates paid after 10 calendar days o Number of rebates denied with denial reasons o Number of selected drug claims determined to be eligible for MFP instead of 340B price as a result of rebate model pilot program o The number of rebates paid out in the reporting period, broken down by 340B drug for which the rebate was paid. AbbVie believes these same reports, at the same reporting frequency, should be required for the Rebate Model. AbbVie further recommends that manufacturers supply HRSA with any suspected diversion, duplicate discounting, or other 340B Program violations identified during the reporting period. This will enable HRSA to evaluate the need for expanded duplicate discount prevention and diversion monitoring. AbbVie also recommends that HRSA take enforcement action including through auditsagainst covered entities who engage in such behavior. Finally, AbbVie supports making public certain information from HRSAs Rebate Model evaluations. Specifically, AbbVie believes HRSA should make public the timeliness of a manufacturers rebate payments; dispute resolution timelines; statistics regarding how many manufacturer rebate denials were due to suspected diversion, evidence of duplicate discounting, or any other reason; a breakdown of whether disputes concerned the administration of the rebate model or eligibility of claims for a 340B rebate; and information related to program integrity, such as the number of times more than one covered entity requested a rebate on the same claim. However, AbbVie requests that HRSA confirm that it will not make public any confidential or proprietary information from drug manufacturers or other 340B Program stakeholders, including but not limited to the 340B ceiling price. AbbVie would be happy to work with HRSA to identify what information falls into those categories. 3. AbbVie Supports Frequent Manufacturer Reporting to OPA Regarding the Rebate Model to Facilitate Expansion of a Rebate Model to More Drugs AbbVie agrees with HRSAs intent to require monthly reporting from manufacturers.87 We further encourage HRSA to regularly and frequently assess the benefits of the Rebate Model, starting as early as the end of the first quarter of its implementation, with regular reevaluations quarterly thereafter. In the accompanying ICR, HRSA suggests that the Rebate Model may be limited to manufacturers with MDPNP Agreements with the Centers for Medicare & Medicaid Services for 87 91 Fed. Reg. at 9633. 24 the initial price applicability years 2026 and 2027.88 Given the benefits of a Rebate Model outside of the IRAincluding preventing Medicaid duplicate discounts and diversionAbbVie believes that a Rebate Model should not be limited to manufacturers with IRA selected drugs. At the very least, if the Rebate Model is initially limited to these manufacturers, it should include both drugs selected and not selected under the IRA. In particular, HRSA should consider including drugs within a class so as not to inadvertently impact prescribing choices based on 340B pricing. Further, once the data shows the Rebate Model is effective and beneficialwhich we are confident that the data will demonstrateHRSA should move quickly to expand the program to include all 340B drugs. A robust data collection with frequent evaluations would allow HRSA to build on the Rebate Model, test improvements to an existing Rebate Model in real time, and support such an expansion of a Rebate Model to additional drugs as soon as possible. More infrequent evaluations would cause all interested parties to miss out on the benefits of a potentially expanded Rebate Model, hurting 340B Program integrity. III. The 340B Rebate Model Would Not Be Burdensome for Covered Entities AbbVie supports a Rebate Model as an effective and efficient means to offer 340B pricing to covered entities. As explained below, we are skeptical of covered entities assertions that a Rebate Model would be costly, given that a Rebate Model would involve covered entities submitting claims-level data that they already collect and report under other healthcare programs. We are equally doubtful that a Rebate Model would create cash flow concerns, and believe that in reality, covered entities likely will access 340B pricing faster after dispenses to patients than under the prevailing replenishment model (which also functions as a retrospective discount). In the rare cases where a Rebate Model is not feasible for a particular covered entity, AbbVie would encourage the affected covered entity to contact our 340B Center of Excellence. AbbVie understands that sometimes there are extenuating circumstances and evaluates each request on a case-by-case basis. AbbVie plans to work with covered entities to understand their hardship request and will determine if a hardship exception is warranted in accordance with AbbVies standard business practices. A. A 340B Rebate Model Would Not Impose Significant Additional Costs on Covered Entities (Questions 1 and 4) Rebates are explicitly authorized under the 340B statute,89 and covered entities already are required to collect and maintain claims data and establish 340B patient eligibility determinations in the normal course. Rebates have been a longstanding mechanism for manufacturers to offer the 340B ceiling price to AIDS Drug Assistance Program (ADAPs),90 which view a Rebate Model as 88 91 Fed. Reg. at 9632. 89 Under Section 340B, a pharmaceutical manufacturer must offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price. PHSA 340B(a)(1). To implement this provision, Section 340B directs the Secretary of Health and Human Services to enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs . . . does not exceed the applicable ceiling price. Id. (emphasis added). 90 63 Fed. Reg. 35239 (June 29, 1998). 25 the gold standard.91 Rebates also are commonly used to facilitate access to reduced pricing to other federal and commercial healthcare programs, such as the Medicaid Drug Rebate Program, the IRA, and TRICARE.92 AbbVie agrees with HRSAs statement in the accompanying ICR that under a Rebate Model, the data submitted by covered entities to manufacturers will be comparable to data already being collected and maintained by covered entities, and therefore the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant.93 Covered entities already transmit similar claims data to various third-parties, such as state Medicaid agencies, health plans, and even provide limited claims data to manufacturers (e.g., on some contract pharmacy claims ) to facilitate reimbursement and certain discount or rebate payment. Federal courts also have recognized that under longstanding HRSA guidance, manufacturers may require information from covered entities and the burden of providing the claims data is minimal.94 The only change under a Rebate Model would be that covered entities would also submit this data to another entity (the 340B Rebate Model vendor). Submitting existing data to a different entity should not require additional full-time employees (FTEs) or significantly change the responsibilities of existing FTEs. Please see Appendix A for more information on industry standard data fields. Moreover, in accordance with 340B statutory requirements, covered entities should already be reviewing 340B transactions for compliance with statutory duplicate discount prohibitions95 and ensuring that there is no diversion of 340B-priced medicines to an individual who is not a patient of the covered entity.96 HRSA guidance also requires covered entities to maintain auditable records97 in anticipation of a potential audit initiated by HRSA or a manufacturer.98 The information that a manufacturer would request under a Rebate Model is comparable to the information that HRSA would request when auditing a covered entity.99 For example, HRSAs sample data request list for covered entity audits includes pharmacy, medical, and purchase data elements, such as the date of service, the prescriber number, and the account number. Put simply 91 Letter from Brandon M. Macsata, CEO, ADAP Advocacy Association, to Chantelle Britton, Director, Office of Pharmacy Affairs, HRSA, Sept. 8, 2025, https://www.regulations.gov/comment/HRSA-2025-0001-0715. 92 See, e.g., 42 U.S. Code 1396r-8 (Medicaid); CMS, Drug Price Negotiation Program: IPAY 2028 Final Guidance (Sep. 30, 2025) (IPAY 2028 Final Guidance), https://edit.cms.gov/files/document/ipay-2028-final- guidance.pdf; TRICARE Retail Refund Program, Manufacturer Policy and Procedures Guide (Apr. 2025) https://health.mil/Reference-Center/Publications/2025/04/25/Manufacturer-Policy-and-Procedure-Guide. 93 91 Fed. Reg. at 9633. 94 Novartis Pharms. Corp. 102 F.4th at 463. 95 PHSA 340B(a)(5)(A); SSA 1903(m)(2)(A)(xiii); SSA 1927(j)(1); SSA 1193(d). 96 PHSA 340B(a)(5)(B). 97 Health Resources & Services Administration, Program Integrity. https://www.hrsa.gov/opa/program-integrity (Covered entities participating in the 340B Drug Pricing Program must maintain accurate records to ensure compliance.). 98 PHSA 340B(a)(5)(C). 99 See 340B Prime Vendor Program, Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities, https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered- entities.pdf. 26 arguments from covered entities that they will incur significant additional costs to collect and process claims data under a Rebate Model are suspect as the collection and processing of such data by covered entities and their vendors is already required for covered entities to ensure they are compliant with 340B program requirements. Covered entities currently engage TPAs to assist with 340B operations and could use TPAs for Rebate Model needs as well. TPAs have broad capabilities and familiarity with Rebate Model claims submissions, so covered entities likely would not need to onboard new vendors and likely would not incur significant additional costs. Multiple TPAs and vendors have already operationalized the infrastructure necessary to support Rebate Model submissions. Covered entities have historically been able to adapt in response to changes in the 340B Program, including by setting up alternative distribution models and engaging third party administrators to assist with 340B operations. For those covered entities that do not leverage a TPA and use a physical inventory model, wholesalers readily maintain the necessary information, on behalf of covered entities, that can be provided to manufacturers to ensure accurate rebate payments. Manufacturers also would incur the bulk of the costs under a Rebate Model, including establishing and maintaining the Rebate Model platform. For example, in the lead-up to the prior Pilot Program, AbbVie engaged Second Sight Solutions, which operates the Beacon platform, to collect the HRSA-approved data elements, apply 340B rebate eligibility criteria, provide transparent reporting, and facilitate 340B rebate payments to covered entities. If HRSA moves forward with a Rebate Model, AbbVie would incur all costs associated with operating Beacon, as well as providing initial set-up and ongoing support and resources at no cost to the covered entity. Through Beacon, AbbVie would offer ongoing technical assistance, customer service, and educational resources to covered entities at no cost, including: detailed technical assistance on the Beacon website that addresses file setup for data element submissions and data templates; training and technical support to covered entities regarding Beacon and to address any questions or concerns regarding the Beacon platform; and a variety of online resources, including pre-recorded and live training sessions, available on their website. Beacon also would provide administrative functionality that would reduce covered entity administrative costs, such as status and reconciliation reporting at no cost to covered entities. The user interface provides the covered entities (and their invited partners) access to 340B rebate model data at no cost that can be customized by the entity and allows for the viewing of multiple organizations data, (if authorized). Ultimately, a Rebate Model could reduce costs for covered entities because it would increase transparency into 340B claims and thus reduce the need for manufacturer-initiated audits. The 340B statute empowers manufacturers who suspect wrongdoing to conduct audits and seek resolution of disputes through a federal 340B ADR system.100 Implementation of a Rebate Model likely would reduce the need for manufacturer audits of covered entities, as claims data would be readily available to manufacturers in close to real-time to identify and resolve disputed claims. As discussed above, when audits are needed, Rebate Model claims data will enable manufacturers to 100 PHSA 340B(a)(5)(C). 27 provide clearer, more robust audit requests to HRSA. Under current HRSA guidance, in order to obtain the agencys approval to conduct an audit, manufacturers must demonstrate that there is reasonable cause to believe that the covered entity is engaged in wrongdoing.101 A Rebate Model would facilitate more detailed audit requests, which would allow HRSA to review audit requests with greater ease and reduce back-and-forth communications with manufacturers. The reduction in the number of audits, claims reversals, and other dispute-related issues could offset any administrative costs to covered entities under the Rebate Model. With respect to deduplication of MFP and 340B claims, without a rebate model, when a claim is reasonably identified as 340B by a manufacturer but has not received a 340B discount, covered entities need to wait for resolution of a good faith inquiry into a dispute over MFP payment and potentially bring the issue to HRSA for resolutionall the while waiting for reimbursement. Regardless, any administrative costs associated with the 340B Program for covered entitiesif any actually existedwould be far outweighed by the programs benefits. While the list price value of 340B purchases in 2024 was $148 billion, the discounted price to covered entities was significantly lower ($81.4 billion).102 This is because manufacturers provide massive discounts to covered entities under the 340B Program. These discounted prices are significantly lower than the prices at which manufacturers sell their products to other purchasers. For the vast majority of drugs, manufacturers participating in the 340B Program must sell their products to covered entities at discounts ranging from at least 23.1% to more than 99.9% of the average market price.103 On average, 340B covered entities receive 59% off of wholesale acquisition cost (WAC).104 Many mandatory 340B ceiling prices are as little as one penny per unit of drug. Covered entities thus reap significant revenue from their participation in the program. It is more than fair for covered entities to assume minimal compliance costs associated with ensuring 340B program integrityagain, assuming there are anyin return for the ability to generate massive amounts of revenue under the program. B. Covered Entities Concerns about Payment Timing and Potential Cash Flow Concerns Are Unfounded (Question 2) 1. Under the Rebate Model, Covered Entities Are Likely to Receive 340B Pricing Faster Than Under the Existing Framework AbbVie believes that requiring rebates to be paid (or if appropriate, denied) within 10 calendar days of a manufacturer receiving complete claims data would be reasonable and would not lead to cash flow concerns for covered entities. The prior Pilot Program would have had a 10- calendar-day deadline, and the current RFI states that [a] potential 340B Rebate Model Pilot 101 61 Fed. Reg. at 65406. 102 Drug Channels Institute, 340B Hit $81 Billion in 2024 (+23%): Why CMS and the IRA Are Poised to Cool the Programs Runaway Growth (Dec. 15, 2025), https://www.drugchannels.net/2025/12/340b-hit-81-billion-in-2024-23- why-cms.html. 103 SSA 1927(c); PHSA 340B(a)(1). 104 BRG, 340B Program at a Glance: 2025, at 1 (2025), https://media.thinkbrg.com/wp- content/uploads/2025/02/19075246/340B-Program-at-a-Glance-2025_F.pdf. 28 Program could require that all rebates be paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission.105 A 10-day rebate payment period would be faster than most 340B discounts are delivered today, particularly because most covered entities and the pharmacies with whom they contract use a replenishment model, which has inherent delays. Eligibility for 340B pricing only is determined when the replenishment order is placed, which often occurs weeks, months, or even a year after the prescription is dispensed, in part because the replenishment order is only placed after the medication is dispensed and sufficient accumulators exist to order (e.g., full package size).106 This is not true under a Rebate Model. Under a Rebate Model, a covered entity would be able to submit requests for 340B pricing in near real-time, shortly after the drug is dispensed to a patient of the covered entity. Access to the 340B price would not depend on use of the entire package and could occur much faster than today (e.g., under the prior Pilot Program, no more than 10 days after submission of a claim).107 Moreover, rebate payments would be sent via electronic funds transfer, directly to the covered entities registered bank account, which provides prompt payment and avoids delays (e.g., due to checks). The transition from a wholesaler chargeback discount model to a Rebate Model framework likely should not affect covered entities cash flow because our understanding is that with a 10- calendar-day deadline, the rebate payment generally would be paid by the time covered entities are required to pay wholesalers.108 Moreover, a 10-calendar-day deadline is far shorter than when rebate payments are due under other programs. For example, Medicaid drug rebate payments are assessed on a quarterly basis and due 37 days after receipt of the invoice,109 and as discussed above, manufacturers of selected drugs have 14 days to pay MFP rebates.110 We understand that payment terms may vary by contract, but urge HRSA to validate timing under the chargeback discount model with wholesalers as we expect the impact to a covered entitys cash flow is hyperbole. A 2025 IQVIA study considered the impact of a Rebate Model on covered entities cash flow and concluded that financing costs under the 340B rebate model are small and unlikely to be a barrier to its use by covered entities.111 The study compared interest rates under different 105 91 Fed. Reg. at 7290. 106 Adam J. Fein, Challenges for Managed Care from 340B Contract Pharmacies, 22 J. of Managed Care & Spec. Pharm. 197 (Mar. 2016), https://pmc.ncbi.nlm.nih.gov/articles/PMC10398234/. 107 Beacon Support Center, Rebate Model Frequently Asked Questions, https://support.beaconchannelmanagement.com/en/articles/9589827-rebate-model-frequently-asked-questions (How long does it take for a 340B rebate payment to be processed and paid?). 108 See SmartSourceRx, Credit and Payment Details, https://www.smartsourcerx.com/credit-and-payment-details. 109 HHS, Medicaid Drug Rebate Program Release No. 7: 50% Rebate Cap Technical Amendment Passed (Apr. 29, 1993), https://www.medicaid.gov/medicaid-chip-program-information/by-topics/prescription-drugs/downloads/rx- releases/mfr-releases/mfr-rel-007.pdf. 110 CMS, Drug Price Negotiation Program: IPAY 2028 Final Guidance, 40.4.1 (Sep. 30, 2025) (IPAY 2028 Final Guidance), https://edit.cms.gov/files/document/ipay-2028-final-guidance.pdf. 111 Chuan Sun, MS, MA, et al, IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1, 13 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact- in-340b-white-paper-2025.pdf. 29 inventory models and found that rebate model interest costs (0.19%) were no larger than under physical inventory models (0.19%).112 For contract pharmacies, rebate model interest costs (0.03%) were lower than physical and credit-based replenishment models.113 IQVIA found that [e]ven under unfavorable assumptions, rebate interest costs remained under 1.2%.114 Last week, IQVIA released an updated version of their study that include all 10 drugs subject to MFP and allowed for shorter wholesaler payment terms, reconfirming the marginal nature of any potential interest costs. The study found that, For all covered entity types, combined annual interest costs are estimated to be $53.7 million, representing 0.40% of the $13.4 billion in combined 340B purchases at WAC for these drugs.115 2. The Beacon Rebate Model Platform Permits Covered Entities to Reconcile 340B Rebate Payments and Ensure Timely Payments The Beacon platform, which AbbVie would use to operationalize a Rebate Model, would allow covered entities to reconcile 340B rebate payments to the submitted 340B eligible claims data, which the Beacon platform makes available for free through a downloadable data report.116 112 Chuan Sun, MS, MA, et al, IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1, 13 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact- in-340b-white-paper-2025.pdf. 113 Chuan Sun, MS, MA, et al, IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1, 13 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact- in-340b-white-paper-2025.pdf. 114 Chuan Sun, MS, MA, et al, IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, at 1 (2025), https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in- 340b-white-paper-2025.pdf. 115 Rory Martin, Chuan Sun & William A. Sarraille, Do 340B Rebates Create a Significant Financial Burden for 340B Providers?, IQVIA White Paper (2026). 116 Beacon Support Center, Rebate Model Frequently Asked Questions, https://support.beaconchannelmanagement. com/en/articles/9589827-rebate-model-frequently-asked-questions (Can my covered entity reconcile 340B rebate payments back to claims submissions?). 30 Beacon also includes a functionality for covered entities to research the 340B rebate status of a particular claim and to initiate a good faith inquiry in the event that a covered entity has not received a 340B rebate that it believes is due.117 Moreover, there are existing pathways under the 340B statute to ensure timely payments under a Rebate Model. For instance, if a manufacturer persistently does not provide timely 340B rebates, HRSA could also consider revoking approval of its Rebate Model or consider other enforcement mechanisms. In guidance on the prior Pilot Program, HRSA stated that [a] manufacturer that is consistently unable to timely resolve rebate reimbursement issues may have its participation in the pilot program revoked.118 Further, disputes over whether a manufacturer provided the 340B price on appropriate claims could be subject to the ADR process. IV. HRSA Must Make Clear that a Rebate Model Preempts State Laws that Restrict Claims Data Collection and Interfere with ADR. When developing a Rebate Model, HRSA must make clear that the federal program preempts any state law that restricts the success of the Program, including by restricting a manufacturers ability to collect claims data. State laws purporting to restrict the use of rebate models or the collection of claims data in connection with the 340B Program unconstitutionally intrude on the objectives of the federal Rebate Model, a program that specifically contemplates that manufacturers will requestand covered entities will submitclaims data.119 To the extent States attempt to apply their state laws to limit or obstruct the Rebate Model, such interference undermines the federal Rebate Model and stands as a direct obstacle to a manufactures ability to participate in the program.120 At least two federal district courts and one federal Court of Appeals have found this to be true, ruling that such restrictions are unconstitutional because they interfere[] with manufacturers ability to conduct audits, which are necessary to launch the HHS- administrated dispute resolution process, and, thereby, frustrate[] the operation of the audit mechanism and thus the enforcement of 340B.121 117 Beacon Support Center, Rebate Model Frequently Asked Questions, https://support.beaconchannelmanagement. com/en/articles/9589827-rebate-model-frequently-asked-questions. 118 HRSA, 340B Rebate Model Pilot Program, http://web.archive.org/web/20251217112038/ https://www.hrsa.gov/opa/340b-model-pilot-program (available on Dec. 17, 2025). 119 The doctrine of federal preemption requires that any state law, however clearly within a States acknowledged power, which interferes with or is contrary to federal law, must yield. Felder v. Casey, 487 U.S. 131, 138 (1988); see also McCulloch v. Maryland, 17 U.S. 316 (1819). 120 Crosby v. Natl Foreign Trade Council, 530 U.S. 363, 37273 (2000) (unanimously concluding federal law preempted a Massachusetts state law [b]ecause [although] a variety of state laws and regulations may conflict with a federal statute, whether because a private party cannot comply with both sets of provisions or because the objectives of the federal statute are frustrated, field preemption may be understood as a species of conflict preemption, . . . where under the circumstances of [a] particular case, [the challenged state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.). 121 Pharm. Rsch. & Mfrs. of Am. v. Morrisey v. McCuskey, No. 25-1054, --- F.4th ----, 2026 WL 898259, 2026 U.S. App. LEXIS 9272, at *31-32 (4th Cir. Mar. 31, 2026); see also Pharm. Rsch. & Mfrs. of Am. v. Morrisey, 760 F. Supp. 3d 439, 453 (S.D. W. Va. 2024); AbbVie v. Drummond, 808 F. Supp. 3d 1266, 1278 (W.D. Okla. 2025). 31 Moreover, States are increasingly passing laws that interfere with the federal program by attempting to regulate the sale and transfer of products at the federal 340B price, changing the terms of participation in the federal program, and prohibiting manufacturers from conditioning the sale of drugs at the federal 340B price on the receipt of covered-entity claims data. To date, at least thirteen States have passed laws containing such restrictions.122 These state laws commonly include exceptions for where such data is required under federal law. Some States have accordingly recognized that their laws do not or cannot prohibit data collection in connection with participation in a federal Rebate Model.123 However, other States have claimed that the exception for federally required data does not apply because the Rebate Model does not explicitly require drug manufacturers to request such information.124 It is thus critical that HRSA make clear that such state-law restrictions are preempted. The U.S. Department of Justice (DOJ) recently filed several amicus briefs on behalf of the United States, urging U.S. Courts of Appeals around the country to strike down state laws that prohibit drug manufacturers from, among other things, requiring covered entities to provide claims data as a condition of the manufacturer offering 340B prices.125 As the brief explains, such state laws improperly interfere with the proper functioning of the federal administrative enforcement scheme.126 Clarification about the Rebate Models preemptive effect will prevent future erroneous interpretations of these state laws, preserving the centrality of federal enforcement and saving the judicial system the effort of having to resolve such disputes. Congress created the 340B Program as an exclusively federal program, overseen by HRSA.127 Such state-law data-collection restrictions also interfere with the 340B Programs ADR process in two distinct ways. First, manufacturers cannot access the ADR process without covered-entity claims data. Such data is crucial to initiate the audit process, a necessary prerequisite to filing an ADR claim.128 Manufacturers must establish reasonable cause that the covered entity is engaging in prohibited activity before HRSA will approve the audit.129 In practice, claims data is the only way that manufacturers are able to establish reasonable cause and manufacturers likely need to require 122 Colo. Rev. Stat. 6-29-105 (Colorado); Me. Rev. Stat. Ann. tit. 24-A, 7753 (Maine); N.D. Cent. Code 43-15.3- 08 (North Dakota); Neb. Rev. Stat. 44-4620 (Nebraska); N.M. Stat. Ann. 26-1-27 (New Mexico); Or. H.B. 2385 (Oregon); R.I. Gen. Laws 5-19.3-3, -5 (Rhode Island); S.D. Codified Laws 58-29G-3 (South Dakota); Tenn. Code Ann. 47-18-136 (Tennessee); Utah Code Ann. 31A-46-311; Vt. Stat. Ann. tit. 18 (Vermont), 4682; W. Va. Code 60A-8-6a (West Virginia). 123 See, e.g., Defs. Mem. of Law at 13-14, Pharma. Research & Mfrs. of Am. v. Arel, No. 25-cv-600 (D. Vt. Sept. 2, 2025) (Attorney General did not oppose entry of a preliminary injunction temporarily blocking claims-data provision of Vermont law, in light of Pilot Program). 124 See, e.g., Br. in Support of Mot. for Prelim. Injunction at 2, AbbVie v. Hilgers, No. 4:25-cv-3089 (D. Neb. Nov. 11, 2025). 125 See, e.g., Br. of the United States as Amicus Curiae, AbbVie v. Weiser, No. 25-1439 (10th Cir. Feb. 25, 2026). 126 Id. at 15. 127 See PHSA 340B(d)(1)(B)(v), (d)(3); Astra USA, Inc. v. Santa Clara Cnty., 563 U.S. 110 (2011). 128 See PHSA 340B(d)(3)(A). 129 61 Fed. Reg. at65407. 32 submission of claims or utilization data as a condition of delivery to contract pharmacies.130 As one federal judge noted, in determining that Oklahomas law prohibiting drug manufacturers from collecting claims data was preempted by Section 340B, without suspicion-raising claims data, how would a manufacturer know to ever ask for an audit? The claims data . . . would be the way to detect possible diversion or double-dipping on discounts. The barrier to access that data created by [the Oklahoma law] thus stands in direct conflict with the 340B Programs dispute resolution mechanism.131 Or, as another federal judge noted in finding West Virginias analogous statute conflicted with Section 340B, if manufacturers cannot require the provision of claims data, there is not much recourse available to the manufacturer. Instead, covered entitieswho may be engaging in the kind of fraud that the 340B Program's ADR system is meant to preventwill essentially be the ones determining whether or not they wish to give manufacturers the very data necessary to start such an audit.132 Second, Congress specifically vested HHS and HRSA exclusive authority to enforce and administer the 340B Program through audits and a federal ADR program.133 In 2024, HRSA recently issued a final rule setting forth additional details of the congressionally prescribed 340B ADR process.134 The final rule established a comprehensive scheme to resolve disputes between manufacturers and covered entities arising under the 340B statute. Under the rule, a 340B ADR Panel within HRSA is tasked with resolving not only disputes about drug prices but also claims that a manufacturer has limited the covered entitys ability to purchase covered outpatient drugs at or below the 340B ceiling pricethe exact issue States are passing laws to purportedly address.135 By vesting enforcement authority solely in HHS, Congress withheld from States the ability to enforce the 340B Programs requirements against manufacturers.136 Auxiliary enforcement mechanisms beyond those contemplated in the federal statute would undermine the agencys efforts to administer both Medicaid and 340B harmoniously and on a uniform, nationwide basis.137 As the DOJ noted in its recent amicus brief, such state laws supplant[] the uniform scheme Congress created by arrogating to the State enforcement authority that properly belongs to the federal government alone. That act of self-aggrandizement conflicts with the scheme Congress designed.138 In sum, as the Fourth Circuit recently noted, such restrictions on the 130 Pharm. Rsch. & Mfrs. of Am. v. Morrisey v. McCuskey, No. 25-1054, --- F.4th ----, 2026 WL 898259, 2026 U.S. App. LEXIS 9272, at *31 (4th Cir. Mar. 31, 2026). 131 AbbVie v. Drummond, 808 F. Supp. 3d 1266, 1278 (W.D. Okla. 2025). 132 Pharm. Rsch. & Mfrs. of Am. v. Morrisey, 760 F. Supp. 3d 439, 453 (S.D. W. Va. 2024). 133 Astra USA, 563 U.S. at 12021. 134 See 89 Fed. Reg. 28643 (Apr. 19, 2024). 135 See 42 C.F.R. 10.3, 10.21; accord id. 10.22(c)(1) (A manufacturer is responsible for obtaining relevant information and documents from any wholesaler or other third party that facilitate the sale or distribution of its drugs to covered entities.). 136 See Astra, 563 U.S. at 12021. 137 Id. 138 Br. of United States, AbbVie v. Weiser, No. 25-1439 at 15 (10th Cir. Feb. 25, 2026). 33 collection of claims data interfere ... at an operational level with HHSs enforcement authority and specific enforcement activity.139 AbbVie believes that some States will continue to enforce restrictions on the collection of claims data even in light of a Rebate Model. Thus, AbbVie requests HRSA issue a statement making clear that the Rebate Model preempts all state laws that attempt to impose different or additional requirements or limitations on manufacturers, such as claims data prohibitions. Such interference with an exclusively federal program violates the Supremacy Clause and will disrupt the integrity of the Rebate Model.140 V. HRSA Must Act Expeditiously to Balance the Interests of All Stakeholders and Announce Its Decision on the New Rebate Model. AbbVie appreciates HRSAs recent efforts following litigation over the Pilot Program. AbbVie respectfully submits that re-approving a Rebate Model should not require a heavy lift. Even the district court in Maine recognized that approval of a Rebate Model would not require extensive additional explanation; HRSA simply needs to provide a well-reasoned explanation of the basis for its decision that responds to objections raised by covered entities and shows that HRSA has balanced the interests at stake. HRSA does not need more process or significant further delays; rather, HRSA needs to act expeditiously and decisively, while supporting its decision with evidence in a written recordmuch of which the agency already possesses. Indeed, given the ongoing nature of manufacturers obligations under the IRA, any significant delays will cause substantial prejudice to manufacturers and other stakeholders. Without delay, therefore, HRSA should issue a decision that (1) re-approves manufacturers Rebate Models, (2) authorizes manufacturers to implement those models by a date certain (i.e., July 1, 2026), and (3) responds to all of the major objections that have been raised by covered entities, whether in comments submitted to HRSA or in litigation. In its decision moreover, HRSA should assemble and cite to specific materials, communications, or other submissions that the agency considered and upon which it relies in reaching its conclusions. The record should include all pertinent material from the initial application-and-approval process. *** AbbVie appreciates the opportunity to provide comments on the Rebate Model. We strongly support the 340B Programs original intent and we thank you for consideration of our comments in an attempt to preserve patient access to lifesaving and life-sustaining medicines. We 139 Pharm. Rsch. & Mfrs. of Am. v. Morrisey v. McCuskey, No. 25-1054, --- F.4th ----, 2026 WL 898259, 2026 U.S. App. LEXIS 9272, at *32 (4th Cir. Mar. 31, 2026). 140 U.S. Const. art. VI, cl. 2. State regulation of the 340B Program violates the Supremacy Clause by impermissibly changing the terms of a federal drug-pricing regimethe federal 340B Programand significantly increasing the cost of participation in that regime. 34 would be pleased to discuss at your convenience. If you have questions, please contact me at hillary.cavanagh@abbvie.com. Sincerely, Hillary Cavanagh Hillary Cavanagh Vice President, US Policy and Analytics On behalf of AbbVie Inc. cc (via Electronic Mail): Chris Klomp Director, Center for Medicare Deputy Administrator Centers for Medicare & Medicaid Services 7500 Security Boulevard Baltimore, MD 21244 35 Appendix A: Industry Standard Forms Table 2: Standard Pharmacy Claim Forms Form Also Known As Description NCPDP D.0 National Council for Prescription Drug Programs standard NCPDP D.0 serves as the universal format used to communicate prescription drug claim data consistently and in real-time by retail, mail-order, hospital outpatient, and specialty pharmacies whenever a prescription is dispensed (e.g. pharmacy packages patient, drug, and cost data into a standardized e-message, transmits it to the payer, and receives an instant approval/denial). Covered entities also rely on it to properly flag and bill drugs purchased under the 340B Drug Program. CMS-1500 HCFA-1500 CMS-1500 is the standard claim form used by healthcare providers in the U.S. to bill insurance companies for medical services. It is used if providers administer drugs in an office setting or by a specialty pharmacy if a drug is billed under a medical benefit. UB-04 / 837I CMS-1450 UB-04 is the standard claim form used by hospitals and facility-based outpatient pharmacies when billing for services as part of a facility claim. It is used if a covered entity administers a drug as part of its services at the facility. Prescription Drug Event PDE PDE is a summary record submitted to CMS for every prescription filled under a Part D plan by the Medicare Prescription Drug Plan. It is not a payment request, but a post-claim data record used to administer Part D and reconcile plan payments. Table 3: AbbVie Rebate Model Data Fields provided for reimbursement to others Data Field Provided for reimbursement NCPDP D.0 CMS-1500 UB-04 PDE Date of Service Yes Field 401-D1 Box 24A FL 45 Yes Date Prescribed Yes Field 414-DE - - - Rx Number Yes Field 402-D2 - - Yes Fill Number Yes Field 403-D3 - - Yes NDC-11 Yes Field 407-D7 Box 24A, shaded area FL43* Yes Quantity / Quantity Dispensed Yes Field 442-E7 Box 24G FL 46 Yes Prescriber ID / Physician ID Yes Field 411-DB Box 17b or Box 24J FL 76 or FL 78 79 Yes Service Provider ID / Ship-to-Pharmacy ID Yes Field 201-B1 Box 32a or Box 33a FL 56 or FL 57 Yes 340B ID No - - - - BIN Number Yes Field 101-A1 - - - PCN Number Yes Field 104-A4 - - - Group Number Yes Field 301-C1 Box 11 & 9a FL62 A-C - Child Site Modifier No - - - - Medicare Part B 340B Claims Modifier Yes N/A Box 24D FL 44 - Part D 340B Modifier Yes Field 420-DK, value "20" - - - *NDC for Medicaid Drug Rebate Reporting
HRSA-2026-0001-2375Unity Care Northwest2026-04-20T04:00Z7,885 chars
See attached file(s) April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA2026 03042) Dear Director Britton, On behalf of Unity Care Northwest, thank you for the opportunity to submit comments on HRSAs Request for Information regarding a potential 340B rebate model. Unity Care Northwest operates service locations in Bellingham and Ferndale, Washington, and provides mobile dental services throughout Whatcom County. Each year, we serve approximately 24,000 patients, nearly one in ten residents of the county. Our patient population is overwhelmingly low-income: more than 50% live at or below 100% of the Federal Poverty Guideline (FPG), over 90% are at or below 200% of FPG, 12% are experiencing homelessness, nearly 3,800 patients require care in a language other than English, over 1,500 are uninsured, and approximately 60% are covered by Medicaid. As a Federally Qualified Health Center, by law and by mission, we are obligated to provide care to all patients regardless of ability to pay. The 340B program is essential to fulfilling this obligation. A rebate-based model would fundamentally undermine our ability to provide affordable medications at the time of care and would create financial and operational risks that our health center, and others like us, cannot absorb. Financially, health centers nationally are operating on razor-thin margins. HRSAs 2024 Uniform Data System shows health centers collectively operated at a 2.1% operating margin, with expenses exceeding revenues (https://data.hrsa.gov/topics/ healthcenters/ uds/overview/national). While 2025 UDS data has been submitted, it is not yet publicly available, limiting stakeholders ability to project current financial capacity. What is clear, however, is that health centers broadly lack the reserves necessary to finance a rebate-based purchasing model. At Unity Care Northwest, the impact would be immediate and severe. In 2025, we spent $7,134,111 purchasing drugs at the 340B price. Under a rebate model, the same drug volume would have required $18,086,137 in upfront Wholesale Acquisition Cost (WAC) spending. Our total 2025 revenues were $51,348,511, while total operating expenses were $50,048,796. The increase in upfront drug costs alone would have created a significant negative cash flow position that our organization could not sustain. Operationally, we use a physical 340B inventory model supported by wholesaler price feeds that automatically populate 340B acquisition costs into our pharmacy system. This structure is essential for compliance with Washington State Medicaid requirements, which mandate Medicaid fee-for-service billing at actual acquisition cost plus a dispensing fee, and for accurate calculation of sliding fee discounts for uninsured and underinsured patients at the point of sale. A rebate model would remove 340B pricing from the wholesaler catalog and pharmacy system, requiring our staff to manually enter and update 340B ceiling prices for every NDC-11 on a quarterly basis. This would introduce substantial compliance risk, increase labor demands, and undermine billing accuracy. HRSA requests detailed system-level and cost estimates in the RFI; however, these data are not reasonably available absent finalized rebate model specifications, standardized manufacturer requirements, and known IT vendor solutions. A rebate model would also create unacceptable risk for patient discounts. Our sliding fee program is calculated using actual 340B acquisition cost and a reduced dispensing fee. Under a rebate model, we would be required to purchase drugs at WAC, dispense them to low-income patients at deeply discounted rates, and then wait for uncertain and potentially denied rebates. If a rebate is delayed or denied, the health center bears the full financial loss. The administrative burden of a rebate model would further strain our operations. We estimate that implementation would require at least one additional full-time employee by 2027 dedicated to rebate submission, tracking, reconciliation, and dispute resolution at an approximate cost of $74,000 annually. These staffing needs would divert resources away from patient-care services. HRSA requests drug and manufacturer-specific administrative cost estimates; such estimates cannot be provided due to the lack of standardized rebate processes, data submission requirements, and denial criteria. Cash flow impacts are unavoidable. We pay our wholesaler on net-7 terms and maintain a physical inventory. Even under best-case assumptions about rebate payment timing, we would be required to pay wholesalers weeks before receiving manufacturer reimbursement, effectively forcing our health center to function as a short-term lender despite operating on razor-thin margins. Illustrative example 1: Unity Care Northwest maintains prescriptions in will-call status for up to 10 days. To reduce the administrative burden of rebate submission, Unity Care Northwest could submit a rebate request after a prescription is picked up by the patient. While this would decrease administrative burden, it will further extend the amount of time between payment to wholesaler for medications purchased and receipt of rebate payment. Illustrative example 2: Unity Care Northwest maintains prescriptions in will-call status for up to 10 days. To reduce the time between claim submission and rebate receipt, Unity Care Northwest could submit a rebate request immediately after a prescription is filled. However, if the patient does not pick up the prescription, the rebate submission would need to be reversed, introducing additional administrative steps and further increased operational burden operational burden. A 340B rebate model would increase the cost of drug purchases for health centers because not all acquisitions of rebate-eligible drugs ultimately result in claims that can be submitted for rebate. As a routine reality of pharmacy operations, some medications become unsuitable for dispensing, such as tablets that break, are dropped, or lose cold-chain integrity for refrigerated products, or are not dispensed before reaching their expiration date. Under the current 340B upfront discount model, damaged or expired medications are documented in auditable records to demonstrate that no diversion occurred, and the financial impact to Unity Care Northwest is limited to the 340B ceiling price. In contrast, under a 340B rebate model, the same damaged or expired inventory would be purchased at WAC, resulting in a significantly higher and unrecoverable cost to Unity Care Northwest. Finally, we are concerned that a rebate model would not improve 340B program integrity. Instead, it would shift financial and administrative risk to safety-net providers while introducing manufacturer-controlled eligibility determinations and denial processes. We support alternatives, such as a neutral national claims clearinghouse, that preserves upfront 340B pricing while addressing duplicate discount concerns without destabilizing covered entities. For these reasons, Unity Care Northwest strongly urges HRSA to exempt Community Health Centers from any 340B rebate model pilot. A rebate-based approach is incompatible with our statutory obligations, financial realities, and mission to ensure health care and prescription access for the most vulnerable patients. Thank you for the opportunity to comment. Please feel free to contact me at lisa.nelson@ucnw.org or 360-788-2682 with any questions. We appreciate HRSAs consideration of the operational and patient-care impacts facing health centers and welcome continued engagement on this issue. Sincerely, Lisa Nelson, PharmD, 340B ACE Chief Pharmacy Officer Unity Care Northwest Bellingham, WA
HRSA-2026-0001-2376SSM Health2026-04-20T04:00Z42,728 chars
Comment from SSM Health APPENDIX TO SSM HEALTH SUBMISSION APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 2 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 3 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2 02 6 2 02 5 2 02 4 2 02 3 2 02 2 2 02 1 2 02 0 2 01 9 2 01 8 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs 12800 Corporate Hill Dr. St. Louis, MO 63131 April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by SSM Health Care Corporation on behalf of its wholly owned subsidiary Covered Entities (SSM Health), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from SSM Health and other Covered Entities. As a health system operating 340B-participating hospitals, SSM Health is a core component of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. SSM Health participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, SSM Healths 340B Program participation enables us to commit material, essential, additional resources per year to the community safety net population we serve. April 20, 2026 Page 2 of 14 Specifically, SSM Health annually provides approximately $149.2 million in Community Benefit in Wisconsin, $25.1 million in Illinois, $198.3 million in Missouri, and $33.1 million in Oklahoma.1 This combined approximate $406 million Community Benefit contribution is strongly supported by the 340B program and would not be possible without it. In addition to resources SSM Health deploys that are categorized as Community Benefit amounts, SSM Health also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, SSM Health wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,2 SSM Health submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH SSM HEALTHS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.3 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor 1 These figures represent the SSM Health Community Benefit numbers tracked and reported for calendar year 2024. 2 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 3 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). April 20, 2026 Page 3 of 14 the MFP price for an MFP-eligible drug,4 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.5 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto SSM Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval,6 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,7 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.8 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to SSM Health when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR SSM HEALTH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected SSM Health. For example, manufacturers have waged an extremely aggressive campaign to limit our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission. Manufacturers have subjected SSM Health to third party subpoenas, direct legal challenges, abusive terms of contracting with mandatory third party services, unilaterally imposed policies attempting to exempt their products from the 340B program, and many other steps. As a result of this campaign, our contract-pharmacy-related savings have been impacted in the past 6 years, directly limiting the extent to which we can support our community. Yet, somehow, this isnt enough for the manufacturers. Manufacturers have also demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of 4 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 5 42 U.S.C. 256b(d)(1)(B)(vi). 6 42 U.S.C. 256b(a)(1). 7 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 8 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 of 14 them have reduced their prices below the 340B ceiling price, and thus we believe they are overcharging us for these drugs every single day. Further, manufacturers employees and contractors such as Kalderos and others have sent us exceptionally overreaching demands. When our operations change (e.g., if we hire a new physician or open a new on-site clinic), we forego 340B purchases to avoid a so-called unusual change in purchases. Manufacturers reach out with lists of questions along the lines of interrogatories and document demands, inappropriately threatening to seek HRSA OPA approval for a manufacturer audit unless their demands are met. A rebate model would only further exacerbate these issues. Additionally, manufacturers challenging contract pharmacy laws have issued subpoenas and sought to depose our personnel, demanding access to SSM Healths policies, contracts, and financial records. These engagements require us to expend scarce human and financial resources on oversight staff, outside legal counsel and more for an unclear benefit. Manufacturer resources can and would be better spent on meeting their own MFP-related obligations instead of compelling our participation in court proceedings. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our SSM Healths pharmacies, manufacturers have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,9 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of SSM Healths purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. 9 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter-to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 of 14 Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or SSM Health trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO SSM HEALTH TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. SSM Health would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]10 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? SSM Health has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs 10 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 of 14 are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS SSM HEALTH TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.11 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE SSM HEALTHS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF SSM HEALTH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE SSM HEALTH FOR THE VALUE OF ITS DATA? One of SSM Healths principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers 11 See 45 C.F.R. 160.103. April 20, 2026 Page 7 of 14 attacking the 340B Program.12 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate SSM Health for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? SSM Health believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. SSM Health urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 12 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate- Investment-Activity_2024.pdf. April 20, 2026 Page 8 of 14 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From SSM Healths perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of SSM Healths patient population, we serve many other patients, including patients with no coverage at all. Requiring SSM Health to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO SSM HEALTH? IF NOT, WHY NOT? As noted above, SSM Health firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve April 20, 2026 Page 9 of 14 patients and fulfill program obligations. SSM Health urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON SSM HEALTH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding SSM Healthto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.13 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. SSM Health has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were rejected in their entirety without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of 13 See 45 C.F.R. 164.501. April 20, 2026 Page 10 of 14 audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.14 With manufacturers noncompliance rate so high, SSM Health is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? SSM Health hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,15 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. SSM Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance, while significant, are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. SSM Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These 14 See the enclosed Appendix for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 15 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 of 14 processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. SSM Health estimates that the lowest possible direct expense associated with the changes associated with a rebate pilot program would be substantial and material to the viability of SSM Healths participation in the 340B program. One-time expenses alone for a rebate pilot program, utilizing the most conservative possible assumptions, are estimated to exceed $55,000 per SSM Health Covered Entity. Actually incurred one-time expenses could greatly exceed this figure, depending on complexity, interoperability, manufacturer conduct and similar considerations. This figure models the costs only for a pilot program. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. These costs cannot be fully estimated at this time but are expected to be substantial and material to the viability of SSM Healths participation in the 340B program. Given the aggressive manufacturer behavior that has been particularly egregious and accelerating over the last six years, SSM Health expects that manufacturers will seek to maximize the imposition of ongoing costs on Covered Entities through inappropriate denials, unsupported audits, data demands and other apparent abuses of the 340B program. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require SSM Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. SSM Health estimates that the lowest possible additional staffing cost would be approximately $28,500 per Covered Entity per year of expansion of the rebate pilot model program. These costs would quickly stagger into a tower of untenable additional staffing cost burdens. Actually incurred staffing costs could greatly exceed these conservative figures, depending on complexity, interoperability, manufacturer conduct, and similar considerations. April 20, 2026 Page 12 of 14 d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. SSM Health estimates that the lowest possible additional technology cost associated with a rebate pilot program would be in excess of $100,000 per Covered Entity per year of expansion of the rebate model program. This figure models the costs only for a pilot program and actually incurred technology costs could greatly exceed these conservative figures, depending on complexity, interoperability, and similar considerations. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. While these costs are difficult to estimate on a disaggregated basis, SSM Health anticipates that the additional costs and burdens associated with data governance would be substantial. e. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, SSM Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budget with predictable costs. This system would be reversed in a rebate model and Covered Entities would need to spend cash upfront for drug acquisition at elevated prices and then wait for processing of rebate claims by manufacturers, which rebates may be subject to inappropriate delay and deduction. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. SSM Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. SSM Health is extremely concerned that the expected net effect of the financial mechanics inherent in the rebate model could cause Covered Entities similar to those that SSM Health operates to suffer substantial losses versus present state. For just a 10-drug pilot program along the lines previously proposed by HHS, SSM Health projects that under modest assumptions of the losses due to time value of money and due to inappropriate manufacturer denials, such losses could easily exceed hundreds of thousands of dollars per hospital Covered Entity annually, or more. Further, SSM Health believes that losses associated with a large-scale rebate program could threaten to completely eliminate the operating margins of Covered Entities similar to those that SSM Health operates. Such a result would be extremely damaging to the communities served by these Covered Entities. April 20, 2026 Page 13 of 14 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independentand realisticmechanism for resolving disputes. Without these safeguards, to say the least, SSM Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, SSM Health would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in SSM Health operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on SSM Health and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. April 20, 2026 Page 14 of 14 Best Regards, Kristin Cannon System Vice President Chief Pharmacy Officer SSM Health
HRSA-2026-0001-2377HealthPoint2026-04-20T04:00Z56,910 chars
Please see attached letter. 4/16/2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthPoint, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Requiring CHCs to purchase medications at full price and wait for rebates, will likely cause significant financial and administrative burden and directly affect CHCs ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, we believe a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical 2 medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 3 Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model could create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Staffing Impact: HealthPoint anticipates needing .25-.50 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model for the first 10 proposed medications and up to a full FTE once all drugs are moved to this model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. HealthPoint anticipated that 10-20 hours of labor costs annually and significantly more when all drugs are required to be in the program. HP estimates of labor cost to be $40,000-$87,000 annually to monitor and administer the requirements. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthPoint urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to 7 Internal NACHC assessment (99 responses). 8 Ibid. 5 wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense so a rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).9 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximate negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all 9https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 6 CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B10 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.11 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data on the first 10 drugs being proposed, we estimate it would cost $400,000 to purchase and float the cost until the rebates begin to be received. This float would be continuous throughout the year. Once all drug purchases move to the model, we estimate our float will be $2.6 million after the first. This amount will be a permanent cashflow drain and is likely to increase over the year(s) as new drugs come to market or if the WAC, 340b pricing spread increases. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial 10 https://340bpricing.hrsa.gov/ 11 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 7 margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. HealthPoint estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $400,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate needs. Resources will be tied up by 10 days based on their estimation and that everything works as planned. a. Financial Impact of Rebate Denials and Delays HealthPoint urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.12 The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. 12 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 8 Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 9 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthPoint strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthPoint believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HealthPoint appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please feel free to contact me at lyohalem@healthpointchc.org. Sincerely, Lisa Yohalem, CEO HealthPoint 4/16/2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of HealthPoint, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Requiring CHCs to purchase medications at full price and wait for rebates, will likely cause significant financial and administrative burden and directly affect CHCs ability to serve the 52 million patients who rely on us. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, we believe a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model could create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Staffing Impact: HealthPoint anticipates needing .25-.50 FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model for the first 10 proposed medications and up to a full FTE once all drugs are moved to this model. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate that they need to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. HealthPoint anticipated that 10-20 hours of labor costs annually and significantly more when all drugs are required to be in the program. HP estimates of labor cost to be $40,000-$87,000 annually to monitor and administer the requirements. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. HealthPoint urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense so a rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximate negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data on the first 10 drugs being proposed, we estimate it would cost $400,000 to purchase and float the cost until the rebates begin to be received. This float would be continuous throughout the year. Once all drug purchases move to the model, we estimate our float will be $2.6 million after the first. This amount will be a permanent cashflow drain and is likely to increase over the year(s) as new drugs come to market or if the WAC, 340b pricing spread increases. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. HealthPoint estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $400,000. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate needs. Resources will be tied up by 10 days based on their estimation and that everything works as planned. Financial Impact of Rebate Denials and Delays HealthPoint urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate de-duplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion HealthPoint strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. HealthPoint believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. HealthPoint appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please feel free to contact me at lyohalem@healthpointchc.org. Sincerely, Lisa Yohalem, CEO HealthPoint
HRSA-2026-0001-2378Moses Lake Community Health Center2026-04-20T04:00Z38,369 chars
See attached file(s) HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 April 15, 2025 Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Moses Lake Community Health Center (MLCHC), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to MLCHC posed by the proposed rebate model. The 340B program is foundational to ML community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: MLCHC anticipates a loss of $1,241,000 from entity-owned pharmacy operations and for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. MLCHC projects $2,839,000 in cost increases in 2026, and $4,727,000 by 2027. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Moses Lake Community Health Center (MLCHC), a nonprofit federally qualified health center organization, was founded in 1978 and incorporated in 1991. MLCHC is the only nonprofit community and migrant health center that provides comprehensive medical, dental, behavioral health and enabling services for the target population in rural central and north Grant County in eastern Washington State. The service area is about 1,600 square miles. The population in the last census was 99,123; MLCHC serves 33% of the entire county. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety- undermines this by placing an immense financial burden on CHCs. HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial For MLCHC in particular, this means it will impact: 138,832 340B transactions/ 32,700 total patients served 340B program administrative costs - $3,077,000 MLCHC invests 340B savings in integrated behavioral health services, case management for our community most medically complex patients, integrated dental and oral health services and medication management. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable -saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life- sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, 1 2 3 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible to provide. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating e upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 4 5 6 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinic administered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: MLCHC provided $1,934,079 in sliding fee discounts in 2025; provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: MLCHC anticipates needing 2.63 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, MLCHC anticipates an increase of at least $75,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 MLCHC estimates additional staff costs for the 2.63 FTE to be $305,520. MLCHC urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. MLCHC estimates that at least $75,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. 7 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. MLCHC currently must reconcile between the Pioneer RX pharmacy system, the AthenaPractice Electronic Health Record and manually enter accounting data into our Sage MIP accounting software. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. MLCHC estimates at least $75,000 on one-time implementation and consulting services.. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend approximately 20 matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 16 pharmacies to increase access to affordable medications. TPA Reliance and Fees: requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 16 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Grant County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part 8 9 10 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. medication, as the 340B price will no longer be reflected offer sliding-fee discounts at the point of purchase. -fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care MLCHC offers a sliding fee discount program to eligible patients to purchase medications on a sliding fee scale. Additionally, MLCHC offers an RX Care Program for patients experiencing unexpected hardship or who are otherwise unable to afford their prescribed medications, regardless of insurance coverage or sliding fee discount status. This program supports patients by covering medication co-pays and deductibles when such costs would prevent access to necessary prescriptions. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 11 12 13 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We -day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. 14 15 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 WAC Purchase to CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. $2,838,957 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $287,520 to purchase these same drugs at the 340B ceiling price. This represents a nearly 1000% increase in upfront capital required for procurement. drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Moses Lake Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue- generating but essential services, such as nurse case management program for chronic condition patients and oral health services. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For psychiatric nurse practitioner staffing directly increasing wait times for mental health appointments. Patient Financial Assistance: - sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we prevents our 4,700 uninsured patients from rationing their insulin or heart medication. Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. MLCHC asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that program by diverting patient-care funds toward interest payments, origination fees, and debt service major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 However, MLCHC estimates its 2027 Annual Rebate Opportunity Cost to be approximately $441,502. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. MLCHC estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,838,957 in 2026, $4,201,533 in 2027 and $4,726,597 in 2028. wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. If we are for - a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays MLCHC urges HRSA to recognize that without rigorous, non- vings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. This represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebate based pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 16 HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 Standardized, publicly defined denial categories with claim level documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10 day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturer defined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. HEALTHCARE WITH A HEART 605 Coolidge Street, Moses Lake, WA 98837 T 509.765.0674 F 509.765.6591 1450 First Avenue SW, Quincy, WA 98848 T 509.787.6423 F 509.787.1988 www.mlchc.org 457 1st Ave NW, Ephrata, WA 98823 T 509.754.6199 Preserve the longstanding upfront discount structure that has defined the 340B program for more than three Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion MLCHC strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B program to allow safety- s, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. MLCHC believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. MLCHC appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact me at sberschauer@mlchc.org. Sincerely, Sheila Berschauer Chief Executive Officer
HRSA-2026-0001-2379Greater New York Hospital Association (GNYHA)2026-04-20T04:00Z31,165 chars
Please see GNYHA's attached comments. April Twenty 2 0 2 6 Thomas J. Engles Administrator Health Resources and Services Administration US Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program HRSA-2026-03042 Dear Administrator Engles: On behalf of the nearly 90 voluntary and public hospitals and health systems participating in the 340B program from the acute care membership of Greater New York Hospital Association (GNYHA), thank you for the opportunity to comment on the Request for Information: 340B Rebate Model Pilot Program published by the Health Resources and Services Administration (HRSA) on February 17, 2026. We appreciate HRSAs commitment to evaluating the operational, financial, and access implications prior to implementing a 340B Rebate Model Pilot. However, as expressed in our September 8, 2025, response to HRSAs initial 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, our member hospitals have grave concerns with imposing a rebate model on the 340B program. Any rebate model would create unavoidable delays in accessing 340B savings and add associated administrative burdens and costs that would erode the 340B programs intended financial benefits and ultimately impact patient care and access. To illuminate the anticipated impact of a 340B rebate model, GNYHA surveyed our member hospitals. The survey data includes responses from 12 organizations representing 67 facilities. The organizations include independent hospitals and large health systems. They include private safety net hospitals, public hospitals and health systems, and large academic health systems. The organizations are located across New York State, including New York City, Long Island, and upstate New York. All respondents estimated significant operational and administrative burden and cost increases if a rebate model were to go into effect. They also described the negative downstream risk for programs and services that provide valuable care to patients, such as medication cost reduction and delivery services and community outreach. Our attached comments address the survey results in greater detail, but the risks of a rebate model are clear. Moreover, as we stated in our previous comments, a rebate model leaves too much discretion to the very parties that deplore the 340B program the most. The 340B program was created to allow providers serving 2 vulnerable populations to stretch scarce resources. Yet these savings come at the expense of drug company profits, and those drug companies have proven time and again that they will stop at nothing to undercut and ultimately end the 340B program. In fact, in the few months since we submitted our September comments manufacturers have levied new types of restrictions on covered entities (including hospitals). Lilly, Novartis and AstraZeneca have introduced policies requiring providers to submit extensive claims data as a condition of accessing 340B discounts. A rebate model would further enable drug companies to benefit at the expense of safety net hospitals and the low-income communities they serve. Most of New Yorks hospitals are covered entities. All are not-for-profit or public/government-owned. They serve high numbers of Medicaid beneficiaries, and even the largest of them have among the slimmest margins in the nation. In 2025, New Yorks hospitals collectively broke even, with 50% of them losing money1 and 30% (about 75 hospitals) requiring extraordinary financial subsidies from New York State to keep their doors open.2 This financial picture will only worsen with implementation of the One Big Beautiful Bill Act, which is expected to have an $8 billion annual impact on New York hospitals. With this Request for Information (RFI), HRSA seeks input on whether it should implement a rebate model and states that it will use the collected information to evaluate if a potential 340B Rebate Model Pilot Program is in the publics interest. Our answer to these queries is an emphatic no. GNYHA urges HRSA to resist manufacturer calls for a rebate model. Safety net hospitals in the 340B program are in no position to float loans to manufacturers while awaiting those same manufacturers determination of whether to provide 340B rebates. Additionally, as more fully addressed in our attached comments, implementing and maintaining a rebate model will add significant costs (both initial and ongoing) and administrative burden for covered entities. Those costs are also additive, meaning they will not displace existing 340B program costs and will erode the very savings the program is intended to generate for safety net providers. In summary, implementing a rebate model could cause significant financial harm to 340B covered entities and the communities they serve. Thank you for considering these comments. Sincerely, Kenneth E. Raske President 1 Joint Association Financial Survey. 2 New York State Division of Budget, SFY 2027 Executive Budget Briefing Book, pg. 70. 3 DETAILED COMMENTS A Rebate Model Introduces the Risk of Significant Harm to 340B Covered Entities and the Communities They Serve. Manufacturers have a long history of limiting access to 340B pricing under the guise of preventing duplicate discounts and diversion. The list of manufacturers imposing limits on covered entities contract pharmacy arrangements is long and growing. And manufacturers already impose onerous administrative and data reporting requirements in attempts to curtail program participation, with the types of limits constantly evolving. Under a rebate model, covered entities would be required to purchase drugs at full cost/without the 340B discount. After a drug is dispensed, covered entities would submit claim data to the manufacturer, which would determine if the dispense is 340B eligible, and pay or deny a rebate in the amount of the 340B discount. In addition to our fundamental objection to requiring safety net hospitals and other providers to float loans to manufacturers, implementing a rebate model imposes significant initial and ongoing costs and burdens on providers. The current 340B program is built around an upfront discount model. As summarized by a GNYHA member safety net hospital that serves an extremely underserved and economically disadvantaged community, the 340B programs upfront discount structure is fundamental to sustaining access to care, supporting uncompensated care, and addressing significant health disparities. Specific rebate model impacts are discussed below. Administrative and Operational Cost Burden. Operating a 340B drug program requires a robust administrative infrastructure. Staffing, technology, third-party administrator (TPA) costs, and compliance activities are reportedly among the largest current cost drivers. Covered entities must identify 340B-eligible claims, track medication inventory, manage vendor relationships, and prepare for HRSA and manufacturer audits. In addition to dedicated personnel and specialized software systems, covered entities engage TPAs to support pharmacy claims processing, data matching, inventory tracking, and compliance monitoring. Current 340B program costs reflect the complexity of ensuring that the program operates with integrity. Any rebate model would require covered entities to make significant additional administrative and operational investments. These would include both upfront, startup costs and ongoing annual expenses across multiple departments. GNYHA members would need to operationalize claims-level tracking and submission, rebate reconciliation and dispute management, enhanced audit and documentation processes, data discrepancy resolution, compliance monitoring, and expanded coordination with manufacturers and vendors, including TPAs. As described above, we surveyed our member hospitals for potential impacts of a 340B rebate model. The results are based on the responses of 12 organizations representing 67 facilities. 4 As shown in Chart 1, all survey respondents stated that initial program implementation, which would include one-time costs of staff training, workflow development, legal review of vendor contracts and new processes, and initial setup, would cause "a great deal" or "a lot" of burden on their organizations. Respondents said the same of ongoing program administration costs, which would includebut are not limited torebate claims data submission, processing and reconciliation, denial management, compliance, and audit support. Chart 1. Increased Burdens: Program Implementation and Administration More granularly, as shown in Chart 2, 92% and 84% of respondents said that IT systems and data infrastructure changes such as system changes, new systems, integration, and data reporting tools would pose a great deal or a lot of burden to their organizations at the outset and on an annual basis, respectively. As shown in Chart 3, 92% of respondents also reported the same of both one-time and ongoing costs for soliciting and managing TPAs, consultants, and other outsourced services. Chart 2. Increased Burdens: IT Systems and Data Infrastructure 5 Chart 3. Increased Burdens: Vendor and External Support It is important to recognize that shifting a portion of 340B drugs to a rebate model introduces a new layer of requirements on top of existing 340B obligations. Covered entities would be required to operate two parallel systems. The rebate model would not reduce current 340B administrative costs. Staffing Impacts. As shown in Chart 4, all survey respondents said that pharmacy/340B program, compliance, and IT departments would experience additional administrative work under a rebate model. 92% said the same of finance departments, and more than half stated that their legal and clinical departments would experience more administrative work. And as noted above, because new rebate processing workloads do not replace existing 340B staffing needs, the new responsibilities are additive, with GNYHA members reporting they cannot be absorbed by existing staff. One safety net hospital flagged that existing administrative and clinical staff might need to shift away from patient care activities to meet increased administrative work demands. Chart 4. Additional Administrative Work by Department . 6 All of our survey respondents noted that their organization would need to hire additional employees under a 340B rebate model. More than half of the systems and individual hospitals surveyed said that they would need to hire at least three full-time equivalents (FTEs), while 17% reported needing at least six new FTEs to meet the additional administrative and operational needs. One institution explained that it already had to hire an additional employee for Medicare Drug Price Negotiation Program (MDPNP) administration and expects to hire more as the list of MDPNP medications grows. This institution also estimates that a 340B rebate model would force them to increase their staff by three to five additional FTEs. Systems and Infrastructure. A 340B rebate model would require covered entities to acquire or modify IT systems, enhance software, and expand data infrastructure across core clinical and financial systems. GNYHA members report that these changes would be essential to support rebatespecific claim identification, submission, reconciliation, and audit readiness. Specific system modifications could include updates to electronic health records (EHR), billing, and pharmaceutical dispensing systems to build new capabilities for generating rebate submission files, as well as segregating rebate claims from standard 340B claims, integrating data across pharmacy and medical systems, and interfacing with manufacturer rebate systems. As shown in Chart 5, all survey respondents stated that 340B program software and data reporting systems would need modifications. The vast majority said the same of pharmacy and claims submission systems, revenue cycle/billing, third-party vendor and EHR systems. And, 75% of all survey respondents said they would likely need to either procure a new vendor/TPA or expand existing TPA services. Chart 5. Required Systems Modifications These IT enhancements will require significant financial investment and staff training. 36% of survey respondents said that they would incur up to $250,000 in one-time costs for IT system development, procurement, modification, integration, or maintenance to support a rebate model implementation, while 36% stated that costs would be between $250,000 and $500,000. 27% indicated one-time costs would be upwards of $1 million. 7 Additionally, there are unique and substantial challenges to reporting medical claims data under a 340B rebate model. All GNYHA survey respondents said that the required data elements for reporting medical claims data are not currently captured by existing systems, while 83% said that vendor/TPA limitations would contribute to difficulty in reporting medical claims data. One safety net hospital explained it would need to contract with a new TPA to support claims submission processes (a capability their hospital currently lacks), which would require added costs and staffing for training and operations. Another system explained that a rebate model would require aggregating and validating information across multiple internal systems that do not currently support the scope of data reporting that would be required under a rebate model. According to another GNYHA member hospital, claims administered by physicians in hospital outpatient departments would require manual reconciliation, contributing to higher administrative burden. Another safety net hospital explained that key data fields for a rebate model, including medical claims data for physician-administered drugs, are not part of the routine data feeds to TPAs. Within the broader survey, only half of respondents had fully automated data feeds between their EHR and 340B vendor/TPA, while the other half required some manual component for data extraction. Data Collection and Reporting. As described above, covered entities collect, maintain, and retain a plethora of 340B-related data for drug purchasing, dispensing, claims validation, and audit and compliance purposes. Specifically, this data may include 340B medication purchase and dispense data, 340B eligibility determinations, and pharmacy oversight information. Many of these functions are supported by vendors. While HRSA and manufacturers have previously suggested that rebate models would not impose new data- related burdens on 340B hospitals, GNYHA members report that a rebate model would require initial system modifications and ongoing operational data collection and reporting. As described by one safety net hospital, a rebate programs claim submission requirements are fundamentally different from the current model. The existing process does not require comprehensive, finalized, claim level billing information. According to another safety net hospital, the rebate model would require it to transmit significantly more granular data to manufacturers than required today, including potentially sensitive patient- and prescriber- level information. System enhancements, new data interfaces, and revised workflows will be needed to facilitate additional claims-level data collection. As shown in Chart 6, all GNYHA survey respondents stated that there would be new, ongoing work related to data validation, data reconciliation, and audit preparation, while at least two-thirds reported one-time setup work for these same tasks. Similarly, 92% of respondents reported that data collection and submission processes, data maintenance and storage, and the use of third-party vendors to support reporting or compliance would require both one-time setup work and ongoing, annual work. 8 Chart 6. New/Expanded Data Collection, Reporting and Compliance Activities GNYHA members have also raised enhanced data concerns, including increased risk of data breaches and the need for additional cybersecurity safeguards and monitoring, new data use agreements, and additional HIPAA and other privacy compliance oversight. Beacon IT Platform Concerns. Because of the Rebate Pilot that was planned to launch January 1, 2026, for which each participating manufacturer selected Beacon as the IT Platform, GNYHA member hospitals are able to report on the challenges they experienced and their concerns about being required to work with a specific vendor. As a threshold matter, they express concerns about the significant data, including protected health information, that covered entities will be required to submit to a vendor that they have not chosen or diligenced. This important feedback is applicable to any vendor in a future rebate model. Survey respondents reported technical, operational, and contractual challenges. Among GNYHAs survey respondents, 82% reported issues with the Beacon platforms system functionality and 73% had concerns with the platforms integration with hospital systems. Operationally, 64% had concerns with the data requirements and customer service and/or support, and 55% cited problems with changing data requirements. Respondents specifically cited security and data privacy concerns, as well as problems contacting Beacons customer service team to resolve issues. Multiple respondents indicated receiving inconsistent and confusing information from Beacon, with shifting expectations around required data elements. This required the respondents to spend valuable time and resources adapting to new requirements with very little notice. Widespread frustration with the contracting process warrants particular focus. 73% of respondents had concerns with Beacons terms and conditions. There was a reported inability to negotiate the terms and conditions, which one respondent said imposed disproportionate risks and liabilities on providers and outlined a dispute resolution process that lacked basic safeguards. Data use and limitation of liability terms were particularly concerning, especially given the patient data being accessed. Significant concerns about Beacons neutrality, tied to larger questions of fairness and transparency in the rebate process, were also expressed. 9 Payment Timing and Cash-Flow Impacts. The 340B program is built around upfront discounts and members rely on the predictability of these discounts in financial planning and budgeting. At best, a rebate model would require covered entities to float loans to manufacturers. Even if all discounts to which covered entities are entitled are eventually paid in the form of rebates, the model would substantially alter payment timing and create cash-flow challenges, with downstream effects on broader fiscal sustainability for covered entities. Currently, covered entities purchase drugs through wholesalers at a 340B discounted price. Under a potential rebate model, covered entities would be required to pay the entire wholesale acquisition cost (WAC), with the 340B discount arriving only after the drug is dispensed, a rebate claim is submitted, and the rebate is processed with the manufacturer. The gap between purchase and rebate receipt may cause covered entities to face higher acquisition costs and create inventory constraints and reduced liquidity, all of which can ultimately affect patient access to essential medications. Delayed, disputed, or incomplete rebate payments will only exacerbate these challenges. In the rebate pilot HRSA proposed for January 1, 2026, and again in this RFI, HRSA contemplates a 10- day payment window from data submission to rebate payment. However, a 10-day payment window from data submission does not alleviate cash flow challenges. As previously noted, 30% of New York hospitals receive special subsidies from New York State to maintain operations, including more than a dozen with fewer than 15 days cash on hand. Any deterioration in their cash position from a 340B rebate model will have significant negative impacts on their ability to continue services. Time between purchase and rebate submission. The time from drug purchase to dispense is often significant. 30% of the survey respondents estimate that it takes 15-30 days on average from the time they acquire a drug to when a rebate claim would be submitted. 50% estimated 31-60 days on average, and 10% estimated 61-90 days. The range of time from purchase to dispense can thus span up to 90 days. We also note that covered entities often do not know if a dispense is eligible at the point of sale and need time to determine eligibility post-dispense, which would further extend the start of the 10-day clock. There are also inherent delays in finalizing medical claims that will create delays in rebate submissions. GNYHA members report that EHR/billing system integration can be complicated and contribute to initial submission delays. And as addressed above, some systems will need to manually submit physician-administered drug claims. Rebate claim processing delays and disputes. Even once the rebate claim is ready for submission, GNYHA members express concerns that rebate payments can and will be delayed for multiple reasons, including disputes about when data submissions are complete and the 10-day window begins. Additionally, members describe issues with erroneous denials and submission errors related to 340B and MDPNP Maximum Fair Price (MFP) manufacturer data submissions processes today. The resolution process is reportedly burdensome and unreasonably slow, and access to 340B pricing is often delayed or denied despite compliance with manufacturer policies. GNYHA members have incurred increased costs to reconcile MDPNP claims, and they anticipate needing a labor-intensive appeals infrastructure to secure 340B savings under a rebate model. 10 In addition to rebate-specific payment concerns, it is important to recognize the recurring prompt pay challenges hospitals face with payers. Converting upfront 340B savings to post-payment rebates also means that providers will need to unnecessarily chase payments to which they are entitled (based on medical claim prompt payment experience, the length of time spent chasing reimbursement can be significant). Combined, these impacts greatly extend the time that covered entities would bear the full, undiscounted cost of the drug from the time of purchase through the undetermined period when it sits in inventory, until the 340B rebate is received. This is a significantly longer period than is addressed by the 10-day timeline proposed in the planned January 1, 2026, rebate model and which HRSA contemplates in this RFI. Moreover, drug wholesalers operate under a wide range of payment terms, including due-on-receipt agreements, and many offer prompt-pay discounts when invoices are paid early. Waiting for receipt of rebate funds before paying wholesalers the WAC amount increases the risk of missing these early-pay discount windows, which raises overall drug acquisition costs. This is especially true for specialty drugs, which reportedly often carry even shorter payment terms. Critically, GNYHA members report that missing prompt-pay discounts for 340B purchases will impact the acquisition costs/discounts for all wholesaler purchasesnot just 340B. Additionally, if 340B rebates are issued by dispense (partial package), but payment is due for full package size, payments to wholesalers will be even further delayed as the full package size rebates accrue over time. GNYHA members use current 340B program savings in their financial planning and to support operating budgets. Because the program provides predictable, real-time savings at the point of purchase, these funds can be directly allocated to support ongoing operations and strategic investments in patient care. One safety net hospital reports using savings to help fund uncompensated care, expand patient services, and sustain programs such as an ER and infusion center serving vulnerable populations. Another notes that even after 340B savings the hospital has a negative operating margin. Thus, the financial ramifications of a rebate model are significant for both the initial set of 25 MDPNP negotiated drugs in 2026 and 2027, and if the model was expanded to a broader set of 340B drugs. As shown in Chart 7, all survey respondents reported that they would likely risk reduced days cash on hand and reduced investment in programs or services, while 89% reported risk of delays or cancellations of capital projects. 78% reported a likely impact on financial liquidity requirements of loans or other financial covenants, and 67% noted likely needing to obtain financing or borrow funds if a rebate model were implemented. One safety net hospital reported that higher upfront drug costs would require it to raise its credit limits with drug wholesalers, increasing financial exposure and resulting in higher purchasing costs due to less favorable borrowing terms. Moreover, rebate delays could cause wholesaler accounts payable to grow substantially, potentially leading to cash flow shortages and account holds. 11 Chart 7. Financial Risks under a 340B Rebate Model Pilot Program. Organizational Impacts. Covered entities use 340B savings to fund safety net services for their communities and provide critical patient services. The financial implications of a rebate model described throughout this letter would ultimately lead to a reduction in patient care services, with patient access to medication among the services being impacted. In response to GNYHAs survey, our members reported various examples of programs and planned projects they would need to scale back or eliminate entirely. These include medication cost-reduction programs and plans to open new pharmacy locations in underserved pharmacy desert areas. One safety net hospital stressed that lost discounts due to data submission issues could prevent it from offering reduced medication prices to patients who are in financial need. Another survey respondent explained that their organizations home medication delivery program, which serves rural patients who may otherwise lose access to essential medications, would be at risk of discontinuation. Access to high-cost therapies would be particularly at risk. GNYHA members also offer a range of medication compliance programs that would be implicated, including community outreach for medication compliance. Beyond programs focused specifically on medication access and compliance, GNYHA member hospitals reported a range of programs including patient care services, emergency rooms, infusion centers, chronic disease management, and care coordination that could be impacted. These ramifications of a rebate model would be contrary to the purpose of the 340B program, which was created to help patients and communities most in need. Instead, the savings would need to be redirected towards substantial administrative costs associated with the rebate model and away from patient care. Any reduction in 340B savings would force difficult decisions, and the community impacts would be immediate and profound. Additional Considerations. We strongly oppose any 340B rebate model and urge HRSA not to move forward with implementing one. However, should HRSA decide to proceed with a rebate model pilot, the below minimum safeguards, many of which we have previously recommended, will be critical. 12 The scope of permissible and prohibited rebate denials must be established. It is imperative that manufacturers be prohibited from denying or challenging rebates based on compliance concerns with manufacturer policy, including but not limited to contract pharmacy restrictions. In the proposed September rebate model, manufacturers would have been prohibited from denying 340B rebates based on diversion or Medicaid duplicate discounts. Yet even with these guardrails there was significant concern that manufacturers would take advantage of a rebate model to effectuate contract pharmacy and other harmful unilateral policy restrictions. Rebate denial parameters must be narrowly and explicitly tailored. Data use must be restricted. There must be strict restrictions on the purposes for which manufacturers and their vendors can use the data submitted by covered entities through a rebate model. Manufacturers and vendors must unequivocally be prohibited from using or disclosing data for any purposes unrelated to rebate payments. Further, a minimum necessary standard should be applied to rebate program data, and HRSA should dictate the required data fields with no manufacturer or vendor additions. Vendors must also be prohibited from including contract terms that require providers to permit the vendor to use and share covered entity data. A clear dispute resolution and oversight process must be developed. This is essential. Covered entities must have recourse when manufacturers deny or delay rebate payments. A meaningful dispute resolution process needs to include a designated complaint process with HRSA or a third partynot with the manufacturer directlyand defined stages and timeframes. Further, HRSA needs to establish enforcement mechanisms for manufacturer noncompliance. Enforcement should be based on complaints and regularly scheduled HRSA audits. An audit protocol is critical for HRSA to have accurate insight into how manufacturers are administering rebates, including denial and delay rates and reasons. HRSA must also establish meaningful consequences for noncompliance, including financial penalties. Manufacturers have little incentive to expedite resolution and disgorge funds and cannot be the arbiter of whether a rebate is appropriate. Protracted disputes and attempts by covered entities to secure the rebates to which they are entitled will only exacerbate the cash flow challenges discussed above. A neutral third party should address MFP and 340B Deduplication. If the purpose of a rebate model is to identify MFP and 340B eligible dispenses for rebate deduplication purposes, this goal could be better met with a clearinghouse model. A single, independent TPA or clearinghouse could provide a portal for data submission, manufacturer review, and payment processing. Centralizing these functions and processes would reduce administrative burden and facilitate consistent enforcement. Importantly, it could help mitigate concerns about manufacturer abuse of a rebate model directly or through their vendors. Thank you for the opportunity to reiterate our concerns with a 340B rebate model. Please contact Emily Leish with any questions.
HRSA-2026-0001-2380National Association of Manufacturers2026-04-20T04:00Z12,566 chars
See attached file(s) 1 April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs The Health Resources and Services Administration (HRSA) 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (Docket No. HRSA- 2026-93942) Dear Director Britton, The National Association of Manufacturers (NAM) appreciates the opportunity to submit comments to the Department of Health and Human Services (HHS) Health Resources and Service Administration (HRSA), Office of Pharmacy Affairs (OPA) in response to its Request for Information (RFI) regarding the potential implementation of a 340B Rebate Model Pilot Program (Docket No. HRSA-2026-93942). The NAM is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturers have a deep commitment to providing health benefits to their workers, even as rising health care costs remain a top challenge for the industry. These benefits are an effective tool to attract and retain employees and to maintain a healthy and productive workforce. Manufacturers know that keeping employees and their families healthy is the right thing to do for the workers who keep America and its economy strong. Seventy percent of manufacturers cited rising health care and insurance costs as their primary concern in the NAMs most recent Manufacturers Outlook Survey.1 Despite this challenge, 95% of manufacturing employees are eligible for health insurance benefits, 80% of whom participate, which underscores the urgent need for action to reduce health care costs for manufacturers and manufacturing workers alike.2 The NAM has long been concerned with the rapid and massive expansion of the 340B program. While manufacturers support original congressional intent of the programto increase access to low-cost prescription drugs and medical care for low-income and underserved populations such expansion has been to increase profits for hospitals and other covered entities. On September 8, 2025, the NAM submitted a comment letter in response to HRSAs request for public comment on its 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (Docket No. HRSA-2025-14619), included in this comment letter as Appendix A, and request that you consider the information included therein as manufacturers response to this RFI. Of note, the second paragraph on the second page of our September 2025 letter includes data that shows the 340B programs contribution to the increase in premiums for employer- 1 National Association of Manufacturers, Q1 2026 Manufacturers Outlook Survey (March 12, 2026). Available at https://nam.org/wp-content/uploads/securepdfs/2026/03/NAM_Q1_2026_Outlook_Write_Up.pdf. 2 Kaiser Family Foundation, 2025 Employer Health Benefits Survey (Oct. 22, 2025). Available at https://files.kff.org/attachment/Employer-Health-Benefits-Survey-2025-Annual-Survey.pdf 2 sponsored insurance (ESI). Manufacturers responses to the NAMs Q4 2025 Manufacturers Outlook Survey demonstrated the extent of premium increases they faced for 2026. Ninety-four percent of manufacturers responded that they expected, or had already seen, an increase in health insurance premiums for 2026. Of those, 11% saw premiums rising by more than 20%, an unsustainable increase that neither manufacturers nor manufacturing workers and their families can afford.3 While the 340B program is not solely responsible for these premium increases, it has contributed significantly to the rising costs of health care for manufacturers in America. The NAM appreciates the OPAs consideration of these comments, including the feedback outlined in Appendix A, and urges the expeditious establishment of a 340B rebate model pilot program. The NAM would be pleased to work with OPA on a pilot program to ensure manufacturers and their workers are not disadvantaged by the 340B program, while ensuring original congressional intent to expand care for low-income and underserved populations. Sincerely, Jess Wysocky Director, Health Care Policy Jake Kuhns Vice President, Domestic Policy 3 National Association of Manufacturers, Q4 2025 Manufacturers Outlook Survey (December 17, 2025). Available at https://nam.org/wp-content/uploads/securepdfs/2025/12/NAM_Q4_2025_Outlook_Write_Up.pdf. Jake Kuhns Vice President, Domestic Policy APPENDIX A September 8, 2025 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: HHS Docket No. HRSA-2025-14619: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program Dear Administrator Engels, The National Association of Manufacturers (NAM) appreciates the opportunity to submit comments to the Department of Health and Human Services (HHS) Health Resources and Service Administration (HRSA), Office of Pharmacy Affairs (OPA) in response to the request for public comment on its 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program. The NAM is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Small and medium-sized manufacturers make up the majority of manufacturing businesses in the United States and employ approximately 40% of manufacturing workers. Manufacturers have a deep commitment to providing health benefits to their workers, even as rising health care costs remain a top challenge for the industry. Sixty percent of manufacturers, and 67% of small manufacturers, cited health care costs as their primary concern in the NAMs most recent Manufacturers Outlook Survey.1 Despite this challenge, 93% of manufacturing employees are eligible for health insurance benefits, which underscores the urgent need for action to reduce health care costs for manufacturers and manufacturing workers alike.2 Employer sponsored insurance (ESI) is the bedrock of the United States health care systemin 2024, 154 million people were covered through ESI.3 In 2023, the NAM released a study, Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care, which took an in-depth look at the progress made by manufacturers in offering ESI, as well as the challenges they continue to face.4 The study found that ESI helps manufacturers effectively attract talent, retain employees, and maintain a healthy and productive workforce. Manufacturers are committed to continuing to offer health insurance to their employees and recommend steps be taken to ease the burden they face. 1 National Association of Manufacturers, Q2 2025 Manufacturers Outlook Survey (May 30, 2025). Available at https://nam.org/2025-second-quarter-manufacturers-outlook-survey/. 2 Kaiser Family Foundation, 2024 Employer Health Benefits Survey (Oct. 9, 2024). Available at https://files.kff.org/attachment/Employer-Health-Benefits-Survey-2024-Annual-Survey.pdf 3 Id. 4 National Association of Manufacturers, Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care (July 2023). Available at https://documents.nam.org/IIHRP/2023%20Health%20Care%20Reportsingles.pdf. 2 One such step is the 340B Rebate Model Pilot Program. The 340B program, intended to provide lower cost medicines and expand care for low-income and underserved patients, has rapidly and massively expanded beyond this intent. Many covered entities have taken advantage of the program to increase their profits, which has become a cost driver of ESI. In fact, 340B is now the second largest federal health care program and is on pace to eclipse Medicare Part D in the coming years.5 The 340B program allows participating hospitals to charge patients commercial insurance the full list price for drugs acquired at 340B prices, which makes patients and employers ineligible to receive a rebate, as it would be a duplicate discount. Patients and employers end up paying more while hospitals keep the spread of full reimbursement by commercial insurance for drugs acquired at the low 340B price. The expansion of this program was associated with approximately $23 billion in additional employer-based healthcare expenses in 2023, of which employees paid about $4.5 billion per year in added insurance premiums.6 That equals approximately $137 in additional annual premium costs for single coverage and $415 for family coverage, or about 8% of the overall increase in employer-based premiums over that period. An IQVIA study found that the 340B program increases drug costs for self-insured employers and their workers by 4.2% due to the manufacturer rebates that are lost when drugs are purchased at the 340B discount price.7 This equals a $5.2 billion increase in healthcare costs for self-insured employers and the 103.4 million workers they employ.8 The study also found that states with a higher density of 340B-affiliated hospital sites have employer premiums that are about 4.5% higher than lower-density states. Overall, the program has led to a massive increase in expenses for employers without the corresponding health outcomes for the patient population it was intended to serve. Manufacturers believe the 340B program is an important tool in expanding care for underserved communities and urge fundamental changes that would restore this program to its core purpose. Abuse of the program in the name of hospital profits has hurt manufacturers and their employees, contributing to the ever-increasing costs of health care for the industry. This pilot program is a critical first step in enhancing program integrity and transparency in a way that makes the 340B program work for everyone. As the 340B program currently operates, manufacturers lose out on negotiated rebates due to factors including duplicate discount issues, limited operational oversight, and lack of regulation. The rebate model pilot program will increase transparency, which will help inform reforms to the 340B program and enable manufacturers to take advantage of negotiated rebates and lower health care costs. Additionally, the rebate model pilot program will demonstrate that a rebate model is feasible, not just for drugs in the Medicare Drug Price Negotiation Program, but for all 340B drugs. The NAM appreciates that OPA is working with pharmaceutical manufacturers to determine the specifics of the pilot program. Such collaboration will ensure greater transparency to the 340B program. While this pilot program is needed, it will not be fully sufficient in reforming the 340B program, and manufacturers will continue to advocate for additional reforms. As a next step, manufacturers 5 BRG, Measuring the Relative Size of the 340B Program. Available at https://media.thinkbrg.com/wp- content/uploads/2022/06/30124832/BRG-340B-Measuring-Relative-Size-2022.pdf 6 National Pharmaceutical Council, The 340B Drug Purchasing Program and Commercial Insurance Premiums. Available at https://www.npcnow.org/sites/default/files/2025-05/340B%20and%20Employer%20Costs%20White%20Paper.pdf 7 IQVIA, The Cost of the 340B Program Part 1: Self-Insured Employers. Available at https://www.iqvia.com/locations/united-states/library/white-papers/the-cost-of-the-340b-program-part-1-self-insured- employers 8 Ibid. 3 recommend and respectfully request that OPA consider quick expansion of the pilot program to all 340B drugs, which would ensure the integrity of the 340B program by increasing transparency and protecting congressional intent. Thoughtful implementation of a program-wide rebate model would support the goals of the 340B program, as safety net hospitals and clinics would continue to be able to stretch their limited resources further and continue to serve vulnerable patients with access to more affordable drugs. The rebate model would also create transparency and accountability to ensure 340B drug prices are used appropriately and the program is not abused. The NAM appreciates OPAs consideration of these comments and looks forward to working with you to ensure the 340B program is fully transparent and no longer taken advantage of at the expense of manufacturers and manufacturing workers. Sincerely, Jake Kuhns Vice President, Domestic Policy
HRSA-2026-0001-2381(no commenter metadata)2026-04-20T04:00Z6,595 chars
See attached file(s) 1 | P a g e April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels, On behalf of the Lac Vieux Desert Band of Lake Superior Chippewa Indians, a federally recognized Indian tribe (LVD) and the Lac Vieux Desert Health Center (LVDHC), a tribally owned and operated health center participating in the 340B Drug Pricing Program under the authority of the Indian Self-Determination and Education Assistance Act, we appreciate the opportunity to submit comments in response to the above-referenced Request for Information. LVD offers these comments in collaboration with LVDHC professionals to address an emerging policy concern affecting Tribal health programs and other covered entities, specifically related to payer practices involving the use of 340B status in reimbursement determinations. I. Emerging Concerns Regarding Payer Practices LVDHC has observed a growing trend in which commercial payers are requesting verification of whether medications were dispensed to 340B-eligible patients as a condition of reimbursement. In certain cases, reimbursement has been delayed or denied pending disclosure of this information. These practices effectively condition payment on 340B status, which introduces new administrative requirements that are not clearly grounded in existing federal program rules. The impact of these requirements extends beyond individual claims and raises broader concerns about the consistency and legality of payer-driven conditions that may affect the financial stability of safety-net providers. LVDHC remains committed to full compliance with all federal requirements governing the 340B Program, including the prevention of diversion and duplicate discounts, as well as maintaining auditable records to demonstrate program integrity. However, current federal guidance does not explicitly require covered entities to disclose 340B status to commercial payers or to condition reimbursement on such disclosure. The absence of clear direction on this issue has resulted in 2 | P a g e inconsistent payer behavior and uncertainty for covered entities seeking to comply with both program requirements and payer expectations. II. Separation Between Program Compliance and Reimbursement Policy The 340B Program establishes rules governing the acquisition and tracking of drugs, while payer reimbursement policies are intended to govern claims adjudication and payment processes. LVDHC is concerned that current payer practices are conflating these distinct frameworks by incorporating 340B-related requirements into reimbursement determinations without clear federal authorization. This lack of clarity creates operational challenges and places covered entities in a position where compliance with one set of expectations may create tension with another. III. Implications for Tribal Health Programs As a Tribal health provider operating under a 638 Annual Funding Agreement and other 638 contracts , LVDHC is entitled to reimbursement from third-party payers pursuant to 25 U.S.C. 1621e. This statutory right of recovery is fundamental to the financial sustainability of our tribal health system. Conditioning reimbursement on 340B status verification raises concerns that such practices may delay or restrict payments in a manner that conflicts with federal law. Tribal health programs like ours depend heavily on third-party revenue, including Medicaid and commercial reimbursement, to offer access to care and essential services for our communities, and any disruption to this revenue stream has direct implications for patient care. IV. Identification of a Policy Gap The issues described above reflect a broader gap in federal policy. While HRSA provides detailed guidance on 340B compliance requirements, there is limited direction regarding how payers may incorporate 340B considerations into reimbursement processes. In the absence of such guidance, payers have developed their own policies, resulting in variability and increased administrative burden for covered entities. For example, stakeholders have expressed concern that additional administrative burdens associated with 340B policy changes could divert resources away from patient care and service delivery. A uniform approach ensure efficiency and avoid continued uncertainty related to reimbursement processes. V. Request for Clarification LVD respectfully requests that HRSA provide clarification on whether it is consistent with the 340B Program for payers to delay or deny reimbursement pending verification of 340B eligibility. LVD also seeks guidance on whether covered entities are required to disclose 340B status to commercial payers as a condition of payment and how Tribal health programs should reconcile payer-imposed requirements with their federal right of recovery under 25 U.S.C. 1621e. Additional clarification regarding the extent to which payer policies may incorporate 340B considerations would assist covered entities in navigating these issues. LVD is concerned that the challenges described in this letter will become more prevalent as payers continue to develop policies related to 340B utilization. Without clear federal guidance, these practices may evolve in ways that increase the administrative complexity and financial 3 | P a g e burden for covered entities that the 340B Rebate Model Pilot Program (HRSA202603042) was purportedly designed to prevent. VI. Conclusion LVD respectfully encourages HRSA to consider issuing formal guidance addressing the role of 340B status in payer reimbursement decisions, the limits of payer-imposed requirements, and the interaction between 340B policy and Tribal recovery rights under federal law. Clarification in these areas would promote consistency, reduce administrative burden, and support the continued ability of Tribal health programs to deliver essential services. LVD appreciates the opportunity to provide these comments and welcomes continued engagement with HRSA on this important issue. Our point of contact for this matter is: Minwewe Valliere Assistant General Counsel/Assistant Prosecutor minwewe.valliere@lvd-nsn.gov Respectfully submitted, James Williams, Jr. Tribal Chairman cc: Tribal Council Tribal Legal Sadie Valliere, LVDHC Health Administrator
HRSA-2026-0001-2382Indiana University Health2026-04-20T04:00Z29,976 chars
See attached file(s) 1 April 16, 2026 The Honorable Thomas J. Engels Administrator, Health Resources and Services Administration Office of Pharmacy Affairs and 340B Program 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Drug Pricing Program Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: I. INTRODUCTION Indiana University Health ("IU Health") respectfully submits these comments in response to the Health Resources and Services Administration's ("HRSA") February 2026 Request for Information ("RFI") regarding a proposed 340B Drug Pricing Program rebate model pilot program, Docket No. HRSA-2026-03042. These comments are submitted on behalf of IU Health by the undersigned 340B Program Director and reflect the organizations direct operational, financial, and patient-care interests as a participating covered entity under the 340B Program. IU Health is one of Indianas largest and most comprehensive health systems, including 7 covered entities and 60 contract pharmacy arrangements across the state. IU Healths 340B Program serves as a critical mechanism enabling the organization to extend care to underserved and low-income patient populations throughout Indiana. IU Healths 340B Program savings allow us to invest in charity care, community outreach programs, and expanded pharmacy services for uninsured and underinsured patients. As the states largest provider of Medicaid services by volume, the 340B Program helps support IU Healths work in continuing to serve Medicaid enrollees. Specifically, by reducing IU Healths expenditures on outpatient drugs across our 15 Indiana hospitals, the Program lowers the costs experienced by these eligible locations, allowing us to continue in our efforts to ensure quality healthcare for some of Indianas most vulnerable. 2 In 2024, IU Health provided nearly $181 million in charity care. Programs like 340B play an important part in our ability to provide this free and reduced care to our patients by ensuring critical medications are accessible and affordable to the patients we serve. Additionally, the 340B Program helps to subsidize healthcare services that we operate at a financial loss, including adult and pediatric pulmonary care, developmental pediatrics, HIV care, Riley Childrens Health Burn Program, transplant services, complex neurosurgery services, and trauma and pharmacy services. And, while no single specific program or initiative is funded solely by the 340B Program, funds not spent on drugs are reallocated to a variety of programming and services in support of our mission. As discussed herein, IU Health respectfully urges HRSA to: (1) preserve the current upfront point-of-purchase discount model; (2) should any rebate framework proceed, HRSA should require a strictly independent administration free from manufacturer alignment; (3) correct the RFI's erroneous conflation of Maximum Fair Price ("MFP") deduplication with 340B duplicate discount prohibitions; and (4) calibrate any pilot program to avoid the administrative, financial, and patient-access harms quantified below. IU Health further submits that HRSAs statutory mandate under the 340B Program is to enable covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384(II), at 12 (1992). Any consideration of a rebate model must give primacy to the needs of covered entities and the patients they serve, not balance those needs against the commercial interests of pharmaceutical manufacturers. The RFIs framing, which appears to weigh the interests of manufacturers and covered entities equally, rests on a flawed premise. HRSAs obligation runs to covered entities and their patients, and any program redesign must be evaluated first and foremost against that statutory purpose. IU Health notes that HRSAs current RFI contemplates a rebate model covering up to 25 drugs (10 subject to Medicare Part D negotiated prices under the Inflation Reduction Act (IRA) in 2026 and 15 additional drugs beginning in 2027). This represents a significant expansion from the 10-drug scope of HRSAs original 2025 rebate pilot. The inclusion of 15 additional drugs means more claims to submit, more rebates to track and reconcile, more working capital to float to drug companies while awaiting statutory discounts, more likely disputes over delays and denials, and therefore less financial capacity for IU Health to spend on patient care and comprehensive health services. The burden estimates throughout these comments reflect this expanded 25-drug scope. 3 II. OPERATIONAL AND FINANCIAL BURDEN OF A REBATE MODEL A. Transition from Point-of-Purchase Discounts; Reliance Interests IU Health has invested substantial resources in building its 340B Program infrastructure around the current upfront, point-of-purchase discount model. This infrastructure includes dedicated FTE pharmacy and compliance staff, proprietary systems for split-billing and eligibility management, and long-standing contractual arrangements with contract pharmacies calibrated to the upfront-discount model. Any transition to a WAC-then-rebate structure would require IU Health to fundamentally restructure these operations, at substantial cost and risk. B. Staffing and FTE Requirements A transition to a rebate model would require IU Health to hire or redeploy significant pharmacy, compliance, and revenue-cycle personnel to manage claim submission, validation tracking, rebate reconciliation, and denial appeals workflows. Based on our preliminary internal assessment, IU Health expects that a full rebate model would require significant incremental FTEs dedicated to rebate administration and reconciliation, representing substantial new, annual personnel costs. These costs are not offset by any efficiency gain under the proposed model, Instead, they represent a net new administrative burden imposed on IU Healths operations. IU Health specifically notes that HRSAs estimate of only five hours per week in additional administrative work to comply with a rebate program covering up to 25 drugs is a gross underestimate. For a health system of IU Healths scale (operating 15 hospitals, 7 covered entities, and 60 contract pharmacy arrangements), the work required to submit claims data across all payer types and all dispensing settings (including in-house pharmacies, contract pharmacies, and provider-based outpatient sites), reconcile rebate payments at the claim level, track and challenge denials, and coordinate with multiple third-party administrators and the rebate platform would far exceed five hours per week. IU Healths preliminary assessment indicates that rebate-related administrative tasks would require multiple dedicated full-time employees. HRSAs five-hour estimate appears to reflect neither the complexity of hospital billing systems nor the scope of a 25-drug rebate program that extends across all payers and all uses of the covered drugs. C. Cash Flow and Working Capital Impact Under the existing upfront discount model, IU Health realizes its 340B savings at the point of purchase, immediately reducing its drug acquisition cost. A transition to a WAC-then- rebate model would require IU Health to pay full Wholesale Acquisition Cost (WAC) at the time of purchase and then await reimbursement of the discount differential through a rebate process. For a health system of IU Healths scale, purchasing approximately $313.6 million in 340B-eligible drugs annually, this represents an estimated working capital 4 burden of $180,942 to $542,827 at any given time, assuming average rebate payment cycles of 30 to 90 days. In addition to this working capital burden, a transition to a WAC-then-rebate model would jeopardize IU Healths ability to maintain prompt payment discounts from its drug wholesalers. IU Health currently receives prompt pay discounts when purchasing drugs through wholesalers. Under a rebate model, IU Health would need to pay the full WAC price before receiving rebates, reducing available cash flow and potentially forcing IU Health to forgo early payment discounts in order to preserve liquidity. The loss of these prompt pay discounts would represent a direct, quantifiable increase in IU Healths overall annual drug expenditures, a cost that is entirely attributable to the rebate model and that would not exist under the current upfront discount structure. IU Health further notes that HRSA has previously credited drug companies assertion that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due. This assertion does not reflect IU Healths actual purchasing and payment cycles. IU Healths wholesaler payment terms and the timing of drug dispensing do not align with a scenario in which rebates would consistently arrive before WAC invoices are due. For drugs maintained in inventory before dispensing, which may take weeks or months, IU Health would be required to pay the WAC invoice well before any rebate claim could even be submitted, let alone paid. HRSA should not rely on manufacturer representations about payment timing that do not reflect the operational realities of hospital drug procurement. D. Technology and Reporting Requirements A rebate model would require IU Health to implement or procure new technology systems capable of submitting claims data in HRSA-specified formats, tracking rebate submissions and responses, maintaining claim level audit trails for dispute resolution, and integrating with the rebate administrator's platform. IU Health anticipates significant incremental system build or vendor engagement costs for initial implementation, plus ongoing annual licensing and maintenance costs. These technology costs do not include the indirect staff time required for system implementation, staff training, and ongoing reconciliation support. IU Health is particularly concerned about the difficulty of providing medical claims data for physician-administered drugs under a rebate model. Unlike pharmacy claims, which flow through established electronic data interchange systems, medical claims for physician-administered drugs are maintained separately within IU Healths electronic health record (EHR) system. IU Healths third-party administrators do not have direct data feeds into the EHR, meaning that extracting and formatting medical claims data for rebate submission would require significant manual work, custom data interfaces, and ongoing 5 reconciliation. Standard hospital billing operations do not allow for immediate submission of this data: medical claims for physician-administered drugs may not be available for weeks or longer after the drug is administered to a patient, due to how hospital bills are created in accordance with applicable billing rules. This inherent delay means that even a 10-day rebate payment window would not prevent significant float periods, because the clock cannot start until the claim data is prepared and submitted. HRSAs assumption that hospitals are already providing this data to third-party administrators is incorrect for medical claims, which represent a substantial portion of 340B-eligible drug utilization in hospital outpatient settings. E. Risk of Manufacturer Rebate Denials IU Health is deeply concerned that a rebate model, particularly one administered through or in reference to manufacturer-aligned platforms, creates a structural risk of arbitrary or pretextual rebate denials. Unlike the current model, where IU Health's statutory right to the ceiling price is realized at purchase, a rebate model interposes a validation and payment process during which a manufacturer (or a manufacturer-aligned administrator) may deny or delay rebate payments based on proprietary 'policies' or interpretations that are not anchored in HRSA-approved standards. IU Health strongly urges HRSA to: (a) prohibit manufacturers from having any discretion to deny rebates for otherwise eligible 340B claims based on their own unilateral policies; and (b) ensure that all disputes regarding denied or delayed rebates that result in a net price above the ceiling are routed through the statutory Administrative Dispute Resolution ("ADR") pathway under 42 C.F.R. Part 10. Moreover, IU Health urges HRSA to go further and prohibit manufacturers from denying any rebates for 340B hospitals entirely. Under a rebate model, manufacturers would receive the claims data they assert they need for program integrity purposes and would retain their existing statutory right to audit covered entities. Given these safeguards, there is no justification for permitting manufacturers to deny individual rebate claims, a process that would impose significant additional administrative burden on safety-net providers who must then dedicate resources to challenging denials and interfacing with manufacturer- aligned vendors. If HRSA nonetheless permits any denials, it must at minimum require manufacturers to provide specific, claim-level explanations sufficient for the covered entity to evaluate and contest the denial, and must ensure that all denied claims are subject to the ADR process. III. CORRECTION OF THE RFI'S ERRONEOUS MFP/DUPLICATE DISCOUNT CONFLATION IU Health calls HRSA's attention to a significant legal error in the RFI's framing. The RFI characterizes Maximum Fair Price ("MFP") deduplication issues as a 'duplicate discount' concern within the meaning of the 340B statute. This characterization is legally incorrect 6 and, if embedded in any resulting program design, risks significant harm to covered entities. The 340B statute's duplicate discount prohibition is Medicaid-specific: it prohibits manufacturers from being required to provide both a 340B price reduction and a Medicaid Drug Rebate Program (MDRP) rebate for the same drug under 42 U.S.C. 256b. This provision is anchored to MDRP rebates and implemented through HRSA's Medicaid Exclusion File (MEF) mechanism. It does not extend to Medicare or commercial claims. MFP nonduplication, by contrast, is a wholly separate legal construct governed by 42 U.S.C. 1320f-2(d), enacted as part of the Medicare Drug Price Negotiation Program (MDPNP). Under that provision, a manufacturer is not required to provide both the MFP and the 340B ceiling price on the same claim when the 340B price is lower; conversely, when the MFP is lower, the manufacturer must provide the MFP at the ceiling price in a 'nonduplicated amount.' This is a distinct Medicare-negotiation rule with different triggers, different statutory authority, and different compliance mechanics than the 340B Medicaid duplicate discount prohibition. Critically, there is no 340B statutory prohibition on a covered entity receiving both a 340B discount and the MFP on the same claim. The obligation to provide the MFP runs solely to the manufacturers, not to covered entities. Any program design that treats MFP deduplication as a 340B duplicate discount issue, or that imposes additional compliance obligations on covered entities to prevent both benefits from flowing to the same claim, would be both legally unfounded and operationally harmful. IU Health respectfully urges HRSA to correct this mischaracterization in any future guidance, rulemaking, or program documentation, and to maintain a strict distinction between Medicaid-based duplicate discount compliance (via the MEF) and MFP nonduplication obligations, which run to manufacturers under a different statutory framework. IV. REQUIREMENT FOR INDEPENDENT ADMINISTRATION If HRSA proceeds with any form of rebate model, IU Health submits that independent administration (meaning administration by an entity wholly free from manufacturer alignment, financial relationships with manufacturers, and manufacturer policy obligations) is not merely preferable but legally and operationally necessary to satisfy both the statutory ceiling-price mandate and the APA's requirement of a reasoned, non-arbitrary administrative design. A. The Conflict of Interest Problem with Manufacturer-Aligned Platforms IU Health is aware that existing commercial platforms, most notably the 340B ESP platform operated by Second Sight (and its associated Beacon rebate-model product), have been positioned as potential rebate administrators. IU Health has serious legal and 7 structural concerns about the use of any such platform in a HRSA-sanctioned rebate model. The public Terms of Use for 340B ESP expressly state that the platform enables analysis of covered entity claims data for pharmaceutical manufacturers to identify ineligible rebates and evaluate compliance with 'Participating Pharmaceutical Manufacturers' policies.' The platform is explicitly designed to serve manufacturer compliance and financial interests, not to serve as a neutral administrator of covered entities' statutory right to the ceiling price. IU Healths direct experience with submitting claims data through 340B ESP for contract pharmacy arrangements confirms these structural concerns. IU Health has encountered significant administrative burdens including: working with multiple third-party administrators to acquire and submit claims data; manual review and editing of claims to ensure eligibility; responding to inaccurate or vague error messages from 340B ESP that provide insufficient information at the pharmacy, account, or NDC level; untimely responses from 340B ESP support requiring multiple follow-up calls; continually verifying that pricing has been restored for hundreds of NDCs across multiple contract pharmacy accounts for each manufacturer; managing the 45-day lookback window for purchases and claims submission; and pricing being dropped for NDCs and contract pharmacies without explanation, requiring follow-up with TPAs, wholesalers, and 340B ESP and pursuit of refunds via the credit/rebill process. A rebate model would dramatically expand these burdens beyond contract pharmacy arrangements to include drug dispenses from in-house pharmacies and drugs administered to patients in the parent hospital and provider-based outpatient sites. Under such a model, manufacturer policies (which vary across manufacturers, may change unilaterally, and are not anchored in HRSA-approved standards) would become embedded eligibility criteria affecting whether and when IU Health receives the statutory ceiling price. This is not independent administration; it is the operationalization of manufacturer- specific constraints as gatekeeping mechanisms to statutory price relief. Such a design would create at a minimum three structural conflicts of interest: A data conflict: IU Health would be required to submit detailed claims and utilization data to an administrator whose terms contemplate disclosure of that data to manufacturers and payers for purposes beyond rebate payment. A rulemaking conflict: eligibility determinations would incorporate manufacturer 'policies' external to HRSA regulations, introducing non-uniform and unpredictable rules that raise serious fairness and due-process concerns. A cash-flow conflict: under a WAC-then-rebate model, delays or denials based on manufacturer platform determinations impose immediate working-capital costs on IU Health while the organization awaits resolution which is a burden courts have already recognized as material. 8 A-1. Operational Experience with the Beacon Platform IU Healths concerns about manufacturer-aligned platforms are not theoretical. During the brief preparation period before HRSAs original rebate pilot, IU Health encountered serious operational problems with Second Sight Solutions Beacon IT platform. These included shifting and inconsistent data submission requirements, problematic Terms and Conditions that raised significant data privacy and security concerns, and inadequate customer service when issues arose. IU Health received confusing and contradictory information from the platform vendor regarding required data fields, particularly for medical claims, and these issues remained unresolved when HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to define the data fields and operational requirements for rebate submission through platforms like Beacon, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. IU Health recommends that HRSA require any rebate program to include appropriate guardrails to mitigate privacy and security concerns related to patient information and data submission, including requirements for Business Associate Agreements and strict data use limitations in any third-party vendor agreements. B. Required Safeguards for Any Administrator IU Health respectfully submits that HRSA should, at minimum, require any rebate model administrator to satisfy the following independence and governance standards: Independence: The administrator must be structurally independent of all pharmaceutical manufacturers, with no manufacturer equity control, board control, or control rights; no manufacturer-paid fees for validation or eligibility functions; and no contractual obligation to operationalize manufacturer policies. Rule Governance: Eligibility determinations must be made solely under uniform, HRSA-approved standards, not manufacturer policies, platform logic, or unilateral manufacturer conditions. Data Use Limitation: Covered entity claims data submitted for rebate validation must be used solely for that purpose and must not be disclosed to manufacturers, payers, or other third parties except as strictly necessary to transmit a validated rebate request and receive payment. IU Health further urges HRSA to explicitly prohibit manufacturers from using covered entity claims data submitted through any rebate program for commercial purposes. IU Health is aware that pharmaceutical companies seek covered entity claims data not only for 340B Program integrity purposes but also to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that secure favorable formulary treatment for their products. This commercial purpose has nothing to do with 340B Program integrity, and covered entities should not be forced to bear the costs of data submission and purchasing drugs at WAC prices in order to assist manufacturers in 9 policing their own commercial agreements. At a minimum, HRSA must require that any rebate claims data submitted by covered entities may not be used by manufacturers or their vendors for any purpose other than processing and paying the rebate. Service-Level Commitments: The administrator must be subject to binding processing timelines, claim level denial explanations tied to HRSA-approved standards, and a 'deemed validation' concept under which a failure to timely respond results in automatic validation. Dispute Resolution Alignment: Any dispute concerning a denied or delayed rebate that results in a net price above the ceiling must be resolvable through the 340B ADR process under 42 C.F.R. Part 10, not through a manufacturer-controlled appeals mechanism. Auditability: The administrator must maintain tamper-evident, claim level records sufficient for HRSA audit and for IU Health to support ADR claims, and must retain such records for a minimum of six years. V. PROPOSED ALTERNATIVES AND IMPLEMENTATION CONSIDERATIONS Consistent with the APA's requirement that agencies consider reasonable alternatives when changing regulatory course, and consistent with HRSA's own request for alternative approaches in the RFI, IU Health proposes the following: A. Enhance Existing Technology-Based Data Validation A traditional rebate model is not necessary to address HRSA's stated data validation and program integrity objectives. Existing and emerging technology enabled approaches including enhanced split-billing platforms, standardized claim level data reporting, and HRSA-administered data matching could support robust compliance validation without forcing covered entities into the cash-flow, administrative, and conflict of interest risks of a WAC-then-rebate structure. IU Health urges HRSA to invest in extending and improving existing mechanisms, particularly the Medicaid Exclusion File, before redesigning the commercial 340B transaction model. In particular, IU Health urges HRSA to consider the model successfully implemented by Oregon Medicaid for preventing Medicaid duplicate discounts. Under Oregons approach, covered entities retrospectively submit limited 340B claims data to the states rebate contractor, which then excludes 340B claims from Medicaid rebate requests to manufacturers. This process achieves the deduplication objective without requiring covered entities to purchase drugs at WAC or submit comprehensive claims data through a manufacturer-controlled rebate platform. A similar retrospective data-matching process could be implemented at the federal level through CMSs Medicare Transaction Facilitator (MTF) to address nonduplication under the Inflation Reduction Act. Compared to a 340B rebate model, these alternatives would more efficiently promote integrity in 340B and 10 consistency with the IRAs nonduplication provision, and would be far less disruptive for 340B providers. Additionally, IU Health supports the position advanced by the American Hospital Association that a neutral, third-party clearinghouse, rather than a rebate mechanism, represents a viable, lawful, and significantly less burdensome alternative to advance 340B/MDPNP deduplication and program integrity. Such a clearinghouse could facilitate data matching and compliance verification without imposing the cash-flow burden, administrative complexity, and manufacturer-aligned gatekeeping risks inherent in a WAC-then-rebate structure. IU Health respectfully submits that HRSA must, at minimum, provide a reasoned explanation for why a third-party clearinghouse is neither viable nor less costly than a rebate mechanism before proceeding with any rebate model. B. If a Rebate Pilot Proceeds, Limit Scope and Build In Safeguards Should HRSA determine that a limited rebate pilot is warranted, IU Health urges the agency to: (i) limit the pilot to a narrow, voluntary subset of covered entities, drug classes, and manufacturer agreements; (ii) require a neutral, HRSA-procured administrator with the independence standards described in Section IV above; (iii) establish a minimum 18-month implementation runway after final program design to allow covered entities to develop necessary systems and workflows; (iv) provide a robust evaluation period before any mandatory broader rollout; and (v) establish a clear ADR pathway for any pilot participant whose net price exceeds the ceiling during the pilot period. C. Timing IU Health notes that even an optimistic implementation timeline for a rebate model could not realistically be achieved before early 2027 and that timeline assumes rapid, well- resourced program design and implementation. Rushing implementation before an adequate administrative record is developed, before independent governance structures are established, and before covered entities have had a reasonable opportunity to build operational capacity would recapitulate the precise deficiencies that led to the injunction in AHA v. Kennedy. VI. CONCLUSION IU Health respectfully urges HRSA to carefully weigh the legal, operational, financial, and patient-access concerns documented in these comments before proceeding with any rebate model implementation. The 340B Program is a critical safety-net mechanism for IU Health's patients. The statutory ceiling-price guarantee must remain meaningful, predictable, and accessible to covered entities without the imposition of the administrative complexity, cash-flow burden, and manufacturer aligned gatekeeping that a poorly designed rebate model would create. 11 Should HRSA nonetheless choose to move forward with developing a rebate program, IU Health submits that HRSA must provide covered entities with an additional opportunity to comment on the specific features and requirements of the final program design. The current RFI process, while appreciated, requires covered entities to estimate costs and burdens without precise knowledge of which drugs will ultimately be included, what data fields will be required, what grounds for denial will be permitted, what dispute resolution processes will be available, and numerous other critical operational details. A failure to permit additional public comment on the specific program design would constitute a failure to consider important aspects of the problem, in contravention of the APAs requirements as articulated in State Farm and as underscored by the courts ruling in AHA v. Kennedy. IU Health is committed to engaging constructively in this process and welcomes the opportunity to provide additional information or participate in any further stakeholder engagement HRSA may convene. Should HRSA have questions regarding any aspect of these comments, please contact the undersigned. Respectfully submitted, Aaron Lee, PharmD, MBA, 340B ACE 340B Pharmacy Director Indiana University Health 390 Airtech Parkway, Suite 106A Plainfield, Indiana 46168 Email: alee15@iuhealth.org Note: Financial projections herein are based on IU Healths December 2025 purchasing data annualized through the FQHC 340B Compliance Rebate Drug Cost Impact Calculator.
HRSA-2026-0001-2383Jericho Road Community Health Center2026-04-20T04:00Z120,274 chars
See attached file(s) RFI-340B rebate Pilot Program Jericho Road Community Health Center April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Jericho Road Community Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Jericho Road Community Health Center anticipates an average loss of $344,117 from entity-owned pharmacy operations due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Jericho Road Community Health Center in particular, this means it will impact: 25,419 patients served $240,000 in current administration costs allocated to 340B program compliance and management The ability to cover our medical practice deficits, specifically in primary care, dentistry, behavioral health and physical therapy We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 340B Rebate Model Operational & Administrative Cost Calculator Description Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 5 To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Jericho Road Community Health Center provided $478,874 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Jericho Road Community Health Center anticipates needing one additional FTE to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Jericho Road Community Health Center anticipates an increase of $20,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Jericho Road Community Health Center aligns with the data from NACHC, in that we would require the equivalent of 1 FTE additional staffing resource to meet the demand for claims reporting and tracking. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Jericho Road Community Health Center estimates this additional hire will cost our organization $60,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Jericho Road Community Health Center estimates 20 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine 7 Internal NACHC assessment (99 responses). 8 Ibid. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 6 drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Jericho Road Community Health Center urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Jericho Road Community Health Center estimates a one-time upfront cost of $20,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 25,419 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $100,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Jericho Road Community Health Center has developed an innovative, systematic approach to claim auditing, whereby we audit 100% of claims. Developing an infrastructure to adapt to a rebate program will require a large investment of time, effort and innovation to ensure we acquire all 340B savings our organization is entitled to receive. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. The one-time integration cost for Jericho Road Community Health Center is estimated to be $10,000-$20,000, similar in rate to interface support purchase through our software vendor. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 7 The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 6 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across two different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Western New York with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 8 Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. . Jericho Road Community Health Center makes drugs affordable for patients, by charging flat rate fees for brand and generic medications, based on Sliding Fee income category. With an increase in upfront cost for medications, the health center will be forced to absorb the cost of honoring financial hardship in real-time, rather than having access to affordable medication cost and transferring this affordability in real-time to the patient. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 9 their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 10 Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,031,305 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $114,425 to purchase these same drugs at the 340B ceiling price. This represents a 1775% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Jericho Road Community Health Center anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as primary care, dentistry, behavioral health and physical therapy. Operating Hours: We anticipate needing to reduce our clinic hours by 10 hours per week, specifically impacting access of care for our patients Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time nurse, decreasing our ability to meet the needs of our patients on the primary care side. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2% uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 11 Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Jericho Road Community Health Center asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Jericho Road Community Health Center estimates its 2027 Annual Rebate Opportunity Cost to be approximately $375,997. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Jericho Road Community Health Center estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $250,378. For 2027, that value will increase to $459,363 and for 2028, a further increase to $548,917. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited resources with the 2026 selected drugs and subsequently take out a line of credit in 2027, with the addition of the 2027 selected drugs. This is not a sustainable solution; the interest costs alone are estimated to be prime (currently 7.25%) + 0.5% annuallyfunds that are currently dedicated to cover the operational costs of medical departments operating at a deficit. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Jericho Road Community Health Center, the risk of our credit limit being reached Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 12 or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Jericho Road Community Health Center urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $203,544. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 13 flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 14 requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 15 A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 16 has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 17 CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions 23 Internal NACHC survey data Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 18 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 19 should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 20 nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts 28 42 U.S.C. 256b(a)(1) 29 Id. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 21 The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan.33 Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.34 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly 30 42 U.S.C. 256b(a)(1) 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 42 U.S.C. 256b(a)(5)(C). Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 22 high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.35 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. For instance, in California, a CHC cannot bill Medicaid until the rebate is processed. If a claim is submitted pre-rebate at the WAC, this could result in overpayment, requiring it to be reversed and resubmitted.36 This demonstrates the infeasibility of a rebate model for many CHCs in states with similar Medicaid billing policies For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.37 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. In New York, Medicaid requires claim level identifiers to be submitted at time of claim submission. Claims for 340B drugs must be submitted 35 See 42 U.S.C 256b(a)(5)(A). 36 https://medi-calrx.dhcs.ca.gov/cms/medicalrx/static- assets/documents/provider/2025/12_A_Claim_Submission_Requirements_340B_Rebate_Model_Pilot_Drugs.pdf 37 C.F.R. 447.518(a). Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 23 at the actual acquisition cost, inclusive of all discounts. If a claim exceeds the 340B ceiling price, it will be denied and must be resubmitted with the correct ingredient cost. Therefore, a CHC cannot bill Medicaid in NYS until the rebate is processed, as the purchase price (WAC) would exceed the 340B ceiling price and therefore would result in overpayment and a subsequent claim denial. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 24 clearinghouse repository.38 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.39 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.40 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.41 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this 38 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 39 42 C.F.R. 447.502 40 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 41 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 25 federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.42 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, 42 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 26 including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.43 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.44 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.45 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, 43 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 44 42 U.S.C. 256b(a)(5)(A)(emphasis added). 45 32 C.F.R. 199.21(q)(2)(iii)(E) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 27 TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.46 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.47 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.48 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.49 They are negotiated with market discounts, including 340B discounts, already 46 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 28 factored into their high drug list prices.50 Drug industry data vendors have reported that such data is highly valuable to manufacturers.51 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.52 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.53 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.54 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.55 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the 50 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 51 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 52 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 53 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 54 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 55 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 29 Third Circuit has made clear, obligations cannot spring from silence.56 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.57 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal AntiKickback Statute and analogous state laws.58 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or 56 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 57 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 58 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 30 transferring 340B drugs to nonpatients.59 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.60And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.61 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate 59 42 U.S.C. 256b(a)(5)(B) 60 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 61 H.R. REP. 102-384, 16 Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 31 this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to sftop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 32 Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be completer and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model62 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. 62 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 33 Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Jericho Road Community Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Jericho Road Community Health Center believes that a 340B Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2 34 rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Jericho Road Community Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Karen Dann, Chief of Ancillary Services, karen.dann@jrchc.org Sincerely, Allana Krolikowski, MD Jericho Road Community Health Center Docusign Envelope ID: A8E968FB-0D86-841B-806E-21F1D1F7E1D2
HRSA-2026-0001-2384Stamford Health2026-04-20T04:00Z72,940 chars
See attached file(s) April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Stamford Health/The Stamford Hospital (Stamford Hospital), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Stamford Hospital and other Covered Entities. As a 340B-participating hospital, Stamford Hospital is a core component of the healthcare safety net in the Stamford community. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Stamford Hospital participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Stamford Hospitals 340B Program participation currently enables us to commit over $64 million additional dollars per year to the Stamford community safety net population we serve and for basic purposes, like paying our nurses, doctors, and other providers. These funds ensure Stamford Health is able to manage its substantial uncompensated care, which was $173M in FY 24 (20.3% of total revenue and 20.5% of total expenses), grow services we know through our Community Health Needs Assessments are unmet needs in our community safety net population, and make critical infrastructure investments to support Stamford Healths high quality of care Stamford Health. Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Stamford Hospital wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. Fundamental Questions Presented by Any 340B Rebate Model In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process, Stamford Hospital submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. Why Does a Manufacturers Interest in Deduplication Outweigh Stamford Hospitals Interest in Caring for Its Patients? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both. More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug, and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug. A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Stamford Hospital and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes. What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Stamford Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? How Could HRSA or Stamford Hospital Trust Manufacturers to Faithfully Adjudicate Covered Entities Rebate Requests? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Stamford Hospital. For example, we have been faced with additional restrictions with manufacturers contract pharmacy restrictions and cumbersome data disclosure requirements. Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission and limiting the extent to which we can support our community. Yet, somehow, this isnt enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Stamford Hospital pharmacy, manufacturers such as Johnson & Johnson, Eli Lilly, Bristol Myers Squibb, and Boehringer Ingelheim have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns, we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Stamford Hospitals purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Stamford Hospital trust them to give up money they are not entitled to? What Tools Would HRSA Make Available to Stamford Hospital to Monitor Manufacturer Compliance? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational functioneligibility decisionsfrom Covered Entities to manufacturers. Stamford Hospital would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. What Commitments Does HRSA Expect Manufacturers to Make in Exchange for the Privilege of Rebate Model Approval? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[] under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. What Steps is HHS Willing to Take to Ensure Manufacturers Meet their 340B Program Obligations? Stamford Hospital has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. What Statute or Regulation Permits Stamford Hospital to Disclose Patients Protected Health Information to Drug Manufacturers Operating Rebate Models? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA. Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? Would Drug Manufacturers Be Permitted to Use Stamford HospitalS Data for Anything Other than MFP Deduplication? If So, What Statute Authorizes HRSA to Require This of Stamford Hospital? If So, Will Manufacturers Be Expected to Reduce the Price on Our 340B Accounts Below the Ceiling Price to Compensate Stamford Hospital for the Value of Its Data? One of Stamford Hospitals principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program. Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Stamford Hospital for that value? Isnt this the exact harm the Takings Clause prohibits? What Changed Between 2024 and 2026 That WOULD JUSTIFY HRSAs Change in Position? Stamford Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Stamford Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. What Law or Policy Would Justify Extending a Rebate Model to All Payers Instead of Limiting it to Medicare Part D? From Stamford Hospitals perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Stamford Hospitals patient population, we serve many other patients, including patients with no coverage at all. Requiring Stamford Hospital to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. What Law or Policy Would Justify Extending a Rebate Model to Physician-Administered Drugs? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. Would Drug Manufacturers Rebate Model Proposals and Any Commitments to HRSA Be Available to Stamford Hospital? If Not, Why Not? As noted above, Stamford Hospital firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Stamford Hospital urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. If a Rebate Model Relies on a Manufacturer-Selected Intermediary, What Terms May the Intermediary Impose on Stamford Hospital? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Stamford Hospitalto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates. Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or-leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for-profit entity. Will HRSA Increase the Number of Manufacturer Audits It Performs Each Year to Include All Manufacturers Operating a Rebate Model AND THEIR COMPLIANCE WITH SUCH MODELS? If Not, Why Not? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023. With manufacturers noncompliance rate so high, Stamford Hospital is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? Why Is a Rebate Model Preferrable to a Government-Backed Clearinghouse or Other Neutral Adjudicator? Stamford Hospital hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates, would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Stamford Hospital encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. Responses to HRSAs Request for Information Costs to covered entities Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Stamford Hospital maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Stamford Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. These new processes will put a strain on hospital staffing, requiring an increase of the 340b compliance team by 200%. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. Payment Timing and Potential Cash Flow Impacts for Covered Entities A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Stamford Hospital purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This reimbursement model will impact prompt pay discounts established with drug wholesalers, and strain cash flow as the hospital floats the difference in pricing until the rebate is paid out. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Stamford Hospital could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. Rebate Denials Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Stamford Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. Data Collection by Covered Entities A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Stamford Hospital would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Stamford Hospitals operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. Conclusion Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Stamford Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on itare at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Kathleen Silard President & CEO Appendix: Summary of HRSAs Audits of Drug Manufacturers One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by Stamford Health/The Stamford Hospital (Stamford Hospital), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from Stamford Hospital and other Covered Entities. As a 340B-participating hospital, Stamford Hospital is a core component of the healthcare safety net in the Stamford community. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. Stamford Hospital participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, Stamford Hospitals 340B Program participation currently enables us to commit over $64 million additional dollars per year to the Stamford community safety net population we serve and for basic purposes, like paying our nurses, doctors, and other providers. These funds ensure Stamford Health is able to manage its substantial uncompensated care, which was $173M in FY 24 (20.3% of total revenue and 20.5% of total expenses), grow services we know through our Community Health Needs Assessments are unmet needs in our community safety net population, and make critical infrastructure investments to support Stamford Healths high quality of care Stamford Health. April 20, 2026 Page 2 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org Ultimately, by increasing costs and likely facilitating manufacturer application of self-serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, Stamford Hospital wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 Stamford Hospital submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH STAMFORD HOSPITALS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). April 20, 2026 Page 3 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto Stamford Hospital and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval,5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program,6 it is important to remember the major questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to Stamford Hospital when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR STAMFORD HOSPITAL TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected Stamford Hospital. For example, we have been faced with additional restrictions with manufacturers contract pharmacy restrictions and cumbersome data disclosure requirements. Manufacturers have greatly limited our ability to serve patients through our contract pharmacies, seriously undermining an important source of revenue that supports our nonprofit mission and limiting the extent to which we can support our community. Yet, somehow, this isnt enough for the manufacturers or, apparently, HHS and HRSA OPA. Manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their drugs. We know this data is valuable to manufacturers, but none of them 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). April 20, 2026 Page 4 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org have reduced their prices below the 340B ceiling price, so they are probably overcharging us for these drugs every single day. We further note that the first year of the MDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our Stamford Hospital pharmacy, manufacturers such as Johnson & Johnson, Eli Lilly, Bristol Myers Squibb, and Boehringer Ingelheim have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price for the dispense, resulting in the manufacturer failing to provide either the MFP payment or the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Finally, a float often occurs at the dispensing pharmacy level under the MDPNP where our pharmacy buys the manufacturers drug at the WAC price and waits for an MDPNP refund. A 340B rebate model would dramatically expand the float, requiring it not just for Part D beneficiaries, but all of Stamford Hospitals purchases. HHS and HRSA OPA have not yet explained whether this cost would be accounted for in a reduced 340B price, and if not, why not. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or Stamford Hospital trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO STAMFORD HOSPITAL TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 5 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. Stamford Hospital would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? Stamford Hospital has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 6 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS STAMFORD HOSPITAL TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE STAMFORD HOSPITALS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF STAMFORD HOSPITAL? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE STAMFORD HOSPITAL FOR THE VALUE OF ITS DATA? One of Stamford Hospitals principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers 10 See 45 C.F.R. 160.103. 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate Stamford Hospital for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? Stamford Hospital believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. Stamford Hospital urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From Stamford Hospitals perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of Stamford Hospitals patient population, we serve many other patients, including patients with no coverage at all. Requiring Stamford Hospital to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. April 20, 2026 Page 8 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO STAMFORD HOSPITAL? IF NOT, WHY NOT? As noted above, Stamford Hospital firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. Stamford Hospital urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON STAMFORD HOSPITAL? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding Stamford Hospital to use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. April 20, 2026 Page 9 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, Stamford Hospital is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 12 See 45 C.F.R. 164.501. 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. April 20, 2026 Page 10 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? Stamford Hospital hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. Stamford Hospital encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissions and contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Stamford Hospital maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 11 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require Stamford Hospital to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. These new processes will put a strain on hospital staffing, requiring an increase of the 340b compliance team by 200%. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, Stamford Hospital purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This reimbursement model will impact prompt pay discounts established with drug wholesalers, and strain cash flow as the hospital floats the difference in pricing until the rebate is paid out. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. Stamford Hospital could be April 20, 2026 Page 12 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, Stamford Hospital will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, Stamford Hospital would be required to generate new claims-level datasets for submission to manufacturers or third-party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in Stamford Hospitals operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on Stamford Hospital and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. April 20, 2026 Page 13 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Sincerely, Kathleen Silard President & CEO April 20, 2026 Page 14 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 Clean Audits Audits with Findings HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price FINDING: FAILED TO OFFER 340B PRICE April 20, 2026 Page 15 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities FINDING: OVERCHARGED COVERED ENTITIES 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data FINDING: FAILED TO SUBMIT PRICING DATA April 20, 2026 Page 16 One Hospital Plaza | PO Box 9317 | Stamford, CT 06904 | StamfordHealth.org 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs FINDING: FAILED TO CALCULATE CEILING PRICE
HRSA-2026-0001-2385Aspirus Health2026-04-20T04:00Z12,474 chars
See attached comment letter. ASPIRUS H EA LT H 2200 Westwood Drive PO Box 1395 Wausau, WI 54401 715.847.2118 800.283.2881 aspirus.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Aspirus Health and our eleven 340B hospitals in Michigan, Minnesota and Wisconsin, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Aspirus Health that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Aspirus and other covered entities have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. We have done our best to provide detailed answers in the limited time available. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the original estimates we had calculated for the 2026 drugs alone due to the increased magnitude in volumes to administratively manage and financially support while awaiting the proposed statutory discount. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Aspirus to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, ASPIRUS H EA LT H 2200 Westwood Drive PO Box 1395 Wausau, WI 54401 715.847.2118 800.283.2881 aspirus.org imposing considerable additional costs that go far above and beyond what we had expected and planned forand far above and beyond what we are experiencing now. We would need to invest hundreds of thousands of dollars annually in Aspirus resources to operationalize and maintain a rebate program. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Our technological systems and operational infrastructure were designed as an upfront discount model. Any shift to a rebate mechanism will require significant costs to change those systems, including but not limited to modifications to pharmacy purchasing and inventory systems, medication charge capture and claim-level tracking, payer adjudication logic, patient eligibility determination, accumulation and reconciliation of rebate-eligible claims, contract renegotiation and adjustment of pharmacy data feeds for external pharmacies, and financial reporting and audit workflows. Support for these changes would require both internal and external vendor resources for implementation with additional unanticipated expense. Data Collection by Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Under the current up-front discount model, 340B ESP reporting is limited to high-level claims and replenishment data used to prevent duplicate discounts at the Medicaid level. In contrast, a rebate-based model may require claim-level, patient-specific, and payer-specific data collection and retention, including detailed drug utilization, charge, payment, and remittance information across multiple billing systems. Covered entities would also be required to support data aggregation, validation, reconciliation, and dispute resolution workflows that do not exist today, significantly expanding the scope, granularity, and operational burden of data collection beyond current 340B ESP reporting. We have countless questions about the process and cost of data collection. Would each manufacturer require a different process? How often would we submit? How would payments flow? We would need to invest hundreds of hours of staff time in preparing for this transition. We would also need to add multiple people within Aspirus to oversee claims submissions and reconciliation, as well as to appeal unpaid rebates. Tracking all of this for 25 different drugs would take a tremendous amount of investment. Adverse Impacts of These Additional Costs and Burdens. The numerous examples of additional administrative expenses quickly erode the financial impact intended of 340B savings to support our communities. Should the proposed model advance, unintended consequences may exist as health systems assess the need to offset the financial impacts of increased overhead to support the change in model. These many costs and burdens add up. The rebate model would introduce uncertainty about program costs as well as the volume of rebates, at a time when health systems throughout the United States are experiencing mounting financial pressure and regulatory complexity. As a result, our patients and community would suffer in concrete ways. We would need to consider the sustainability of programs and services offered at each of our 340B hospitals. In rural areas like those served by Aspirus Health, the ripple ASPIRUS H EA LT H 2200 Westwood Drive PO Box 1395 Wausau, WI 54401 715.847.2118 800.283.2881 aspirus.org effect of the proposed rebate program would likely result in patients having to travel further for or forgo services altogether, at major negative impacts to their health. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via 'rebate or discount." Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Aspirus reasonably relied on this history years ago when designing its internal operations, staffing, third- party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Concerns With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. Upon initial review of the platform's proposed terms of use, several concerns were identified including: The terms were largely non-negotiable, requiring Aspirus to waive industry-standard safeguards in order to access 340B pricing. The terms would have granted Second Sight broad unilateral and even retroactive amendment rights, sharply limited liability despite requiring submission of sensitive operational and banking information, and permitted expansive data-sharing without commensurate protections. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Aspirus, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Our robust approach works. Our 340B compliance framework is mature, comprehensive, and effective. Aspirus employs rigorous internal controls, routine transaction-level monitoring, and ongoing internal audits, supplemented by consistent external audits, to proactively identify and remediate any potential duplication or compliance risk before savings are realized. These 2200 Westwood Drive PO Box 1395 Wausau, WI 54401 715.847.2118 800.283.2881 aspirus.org ASPIRUS H EALTH processes include reconciliation, eligibility validation, and corrective action protocols that are embedded into day-to-day operations. As demonstrated by HRSA audits conducted over the past eight years, our approach successfully ensures program integrity under the existing upfront discount model. This strong compliance record confirms that additional rebate-based mechanisms are unnecessary to address duplication concerns and would add significant burden without commensurate regulatory benefit. Consistent with this record, Aspirus also works collaboratively with manufacturers on er 340B/MDPNP deduplication inquiries to date. These limited, isolated inquiriesand their prompt resolutionunderscore that existing processes are functioning as intended, and that a rebate-based model is not necessary to address duplication concerns. For all of these reasons, Aspirus Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this misguided effort, it must allow Aspirus Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lori Peck, CPA, MBA Interim Senior Vice President Finance/Chief Financial Officer Aspirus Health
HRSA-2026-0001-2386Baptist Health South Forida2026-04-20T04:00Z30,158 chars
See attached file(s) 8900 N Kendall Drive Miami, FL 33176 1 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Baptist Health South Florida (Baptist Health), we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. About Baptist Health South Florida Baptist Health is a not-for-profit health care system dedicated to providing high-quality, cost- effective, compassionate healthcare services. Baptist Health has over 3.5 million patient encounters per year, thanks to a dedicated team of more than 29,000 employees and 4,500+ physicians. Baptist Health operates 11 acute care hospitals and over 100 outpatient centers, urgent care facilities, and physician practices across Miami-Dade, Broward, and Palm Beach counties. Of the 11 hospitals, 10 of which participate in the 340B program as either parent or child-site hospitals (Table 1). 340B Covered Entity 340B ID Baptist Hospital of Miami DSH100008 Bethesda Hospital DSH100002 Doctors Hospital DSH100296 Fishermens Community Hospital CAH101312 Homestead Hospital DSH100125 Mariners Hospital CAH101313 South Miami Hospital DSH100154 West Kendall Baptist Hospital DSH100314 Table 1: 340B Covered Entities (CE) within Baptist Health. Does not reflect child sites. 8900 N Kendall Drive Miami, FL 33176 2 As a long-standing and committed participant in the 340B Drug Pricing Program, Baptist Health appreciates HRSAs continued efforts to strengthen and modernize the program. However, Baptist Health does not support the implementation of a rebate-based model. We believe the programs existing statutory framework provides sufficient safeguards to address integrity concerns without introducing the significant financial, operational, and administrative risks inherent in a rebate structure. Baptist Health is particularly concerned that a rebate-based approach could undermine the long- term sustainability of the 340B Program and disproportionately impact the vulnerable patient populations it is intended to serve, undermining the intent of the program to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Summary of Recommendations At a high level, Baptist Health recommends that HRSA: Preserve upfront discounts as the cornerstone of the 340B Program and avoid transitioning to a rebate-based model that would require covered entities to purchase drugs at Wholesale Acquisition Cost (WAC); and Limit duplicate discount policies strictly to statutory Medicaid requirements and prohibit manufacturers from imposing commercial rebate or data-driven restrictions that impede appropriate 340B utilization; To the extent Baptist Health offers comments on the potential design or operation of a rebate model, such input is provided solely to inform risk mitigation and due diligence should HRSA elect to pursue a rebate model approach. These recommendations should not be construed as support for, or endorsement of, a rebate-based framework: Establish clear, enforceable payment standards for any rebate model, including a guaranteed maximum payment timeframe (e.g., within 10 days of claim approval), electronic and fully traceable payment mechanisms, and defined penalties (such as interest) for late payments; Standardize rebate operations and oversight, including uniform denial categories, consistent documentation requirements for denials, and defined timelines for denial review and adjudication; Implement uniform data standards and robust privacy safeguards, including a standardized data dictionary, minimum security requirements, and clear limitations on the use of protected health information (PHI) and claims data; and Establish a neutral, HRSA-governed claims clearinghouse to centralize data submission, promote consistent manufacturer compliance, and meaningfully reduce administrative burden on covered entities. 8900 N Kendall Drive Miami, FL 33176 3 Baptist Health has endeavored to provide detailed responses in the limited time available. For cost estimation purposes, we have assumed that any future rebate program will include the 10 drugs previously approved under HRSA's original rebate program and those approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. The addition of the 2027 drugs increases our cost estimates accordingly: more drugs and manufacturers means more claims, more rebates to reconcile, more capital tied up awaiting statutory discounts, more disputes, and less money available for patient care. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require Baptist Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Baptist Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospital - and far above and beyond what we are experiencing now. Costs to Covered Entities A. Administrative and Operational Costs The 340B Program's success has long been anchored in its upfront discount mechanism, which delivers immediate and predictable savings to covered entities. A rebate model would require Baptist Health to purchase medications at WAC, often several times more costly than the 340B price, while awaiting reimbursement that may be delayed, disputed, or denied. This introduces significant financial exposure, disrupts cash flow, and risks destabilizing the safety-net services the program is designed to sustain. Beyond the financial impact, a rebate framework would impose considerable administrative and operational complexity. Baptist Health would need to expand its workforce or divert existing staff from core functions to support rebate validation, claims reconciliation, payment tracking, denial management, and formal dispute resolution, each requiring new IT infrastructure, third-party vendor relationships, and system interfaces across multiple stakeholders. The model would also drive a substantial increase in compliance activity: enhanced audit readiness, new documentation standards, and continuous monitoring of manufacturer payment adherence. Multiple data sources and external dependencies would heighten challenges around data consistency and reconciliation, increasing the likelihood of discrepancies and disputes. 8900 N Kendall Drive Miami, FL 33176 4 Denials management alone would become a resource-intensive function requiring dedicated staffing and ongoing oversight. Collectively, these burdens run counter to the intent of Executive Order 14192, "Unleashing Prosperity Through Deregulation." Rather than reducing regulatory complexity, a rebate model would materially increase the direct and indirect costs of administering the 340B Program, diverting critical resources away from patient care and undermining the program's core purpose. B. Staffing Impacts Under a Potential 340B Rebate Program A rebate-based model would materially increase staffing requirements and strain already overextended teams at Baptist Health. Beyond current care delivery and compliance obligations, staff would assume significant new responsibilities: executing data exchange contracts, tracking and validating rebate claims, monitoring payment timelines, and managing denials and dispute resolution. Routine 340B audits already require an all-hands response. A rebate model would far exceed these demands, requiring new workflows, comprehensive training, and sustained personnel effort at every stage of the rebate lifecycle, diverting time and resources away from patient care. Baptist Health is also concerned that regulatory responsibilities, such as ensuring manufacturer payment compliance, could effectively shift to covered entities, further reducing capacity for core clinical services. Baptist Health estimates implementation would require at least three additional full-time employees: two 340B analysts and one pharmacy business analyst. The analysts would compile and submit data files, reconcile claims for payment accuracy, and manage denial follow-up and disputes. The pharmacy business analyst would oversee payment tracking, reconcile incoming funds against submitted claims, and ensure accurate allocation across pharmacy departments. Recruiting and onboarding these roles would take three to four months, complicating timely implementation. HRSA's estimate of approximately five hours per week to administer rebate activities significantly understates the operational reality. Data aggregation and file preparation alone could require more than five hours per session, multiple times per week. Daily effort would also be needed to monitor submissions, reconcile payments, manage denials, and compile dispute documentation, demanding several additional hours per day from dedicated financial staff. 8900 N Kendall Drive Miami, FL 33176 5 C. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Baptist Health's technology and operational infrastructure have been designed around the 340B Program's upfront discount model. Transitioning to a rebate-based framework would require significant system redesign, new process development, and substantial financial investment. Baptist Health currently leverages multiple data feeds, including flat files and real-time ADT integrations, to support its TPA environment. While a rebate model may not initially require entirely new external data feeds, any expanded data requirements would necessitate additional integrations and system modifications. Managing a rebate process internally, particularly for medical claims, would introduce considerable complexity and require new workflows and infrastructure. Medical claims data aggregation is not straightforward. Required data elements exist within the EMR but are not housed in a single, unified dataset; constructing a complete rebate submission would require combining multiple disparate reports in a highly manual, resource-intensive process. Certain historically requested data elements, such as HCPCS codes, ICD-10 diagnoses, and payer identifiers, may also exceed what is operationally necessary for rebate validation and instead create opportunities for inappropriate claim denials. Reliance on claim numbers as a prerequisite for rebate submission presents further challenges. Because claim numbers are generated only after a patient encounter is finalized, submissions would be delayed for observation stays, extended admissions, or encounters transitioning between care settings. The payment timeline would not begin until well after medication dispensing, exacerbating cash flow challenges. From a systems perspective, Baptist Health would need to invest in new or significantly enhanced infrastructure: data exchange interfaces, secure claims transmission, contract management systems, and tools for rebate validation, reconciliation, denial management, and dispute documentation. This would effectively create a new internal cost center dedicated to continuous claims processing and monitoring. Should HRSA pursue a rebate model, it must fully account for both the upfront investment and the ongoing operational costs required to build and sustain this infrastructure. Data Collection by Covered Entities During -HRSAs originally proposed rebate program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. 8900 N Kendall Drive Miami, FL 33176 6 A. Current Data Collection Practices and Challenges Baptist Health currently relies on a combination of internal systems and third-party vendors to collect, maintain, and validate 340B-related data, with workflows designed to ensure audit readiness, data integrity, and regulatory compliance. The health system's TPA identifies 340B-eligible claims across contract pharmacies, entity-owned pharmacies, and hospital dispensing locations, while the internal EHR captures eligible claims from clean-site dispensing environments. Baptist Health performs monthly reconciliation and validation across pharmacy, billing, and TPA-reported data, auditing both targeted and randomly selected dispensations to confirm site eligibility, prescriber eligibility, and supporting documentation. Drug procurement records are also routinely audited to verify correct account designation, and all auditable records are retained for a minimum of three years. Compiling and uploading pharmacy and medical claims to the 340B ESP platform already requires extensive manual review, validation, and formatting, a process that can take up to two business days per submission cycle. Under any rebate framework, Baptist Health would need to build on these existing activities by monitoring WAC purchases for rebate eligibility, tracking and reconciling rebate payments, troubleshooting data discrepancies with rebate vendors, and pursuing good-faith inquiries with manufacturers when rebates are delayed or denied. These responsibilities represent a meaningful ongoing burden, increasing administrative complexity without reducing the current workload associated with 340B claim identification and submission. B. Importance of Clear Data Standards and Privacy Guardrails A rebate-based model would require clear, standardized data requirements and strong privacy protections. HRSA's suggestion that the necessary data aligns with what is already collected significantly understates the actual complexity and burden. Compliance would require Baptist Health to aggregate data from multiple systems, including our TPA and EHR, through manual extraction, validation, and formatting that typically takes two to three business days per submission cycle. Submitting medical claims for a single manufacturer requires generating reports across multiple sites, validating purchase and dispense criteria, and manually completing missing fields such as insurance details, HCPCS codes, and provider identifiers - a process that can involve reviewing thousands of claims monthly. Expanding this across multiple manufacturers would multiply the workload considerably. To mitigate these risks if HRSA implements a rebate model, Baptist Health recommends: A standardized data dictionary with uniform definitions and formats; 8900 N Kendall Drive Miami, FL 33176 7 Robust privacy and security safeguards, including clear data use agreements and minimum security standards; and Explicit guardrails to prevent misuse of data for non-statutory eligibility determinations or inappropriate claim denials. Without these measures, a rebate model would introduce substantial administrative burden and compliance risk for covered entities. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Baptist Health to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. A. Impact of Rebate Payment Timing on Cash Flow Under a rebate model, payment timing would become a primary driver of cash flow risk. Unlike the current upfront discount structure, covered entities would purchase medications at full WAC and wait for reimbursement, creating meaningful financial strain, particularly across high claim volumes. Payment timelines may also exceed commonly cited expectations. Under previously proposed rebate models, the payment clock may not begin until after claim approval rather than at the point of dispensing, extending the reimbursement cycle considerably. This disconnect between cost incurrence and repayment requires covered entities to finance drug expenses for an extended, uncertain period with heightened exposure in cases of delayed, disputed, or denied rebates. To mitigate these risks, any rebate framework must include enforceable payment standards, at minimum: A guaranteed maximum payment timeframe; Automatic payment triggers upon claim validation; Electronic, fully traceable payment methods; and Clear remedies for non-compliance, such as interest penalties on late payments. Absent these safeguards, a rebate model would exacerbate cash flow instability for covered entities and introduce unnecessary financial risk into the 340B Program. 8900 N Kendall Drive Miami, FL 33176 8 B. Ensuring Manufacturer Adherence to the 10-day Requirement A rebate-based framework would require HRSA to establish clear, enforceable operational standards to ensure consistent manufacturer compliance with any defined payment timelines, including a 10-day rebate requirement. Central to this approach would be the development of a standardized, centralized mechanism to accurately timestamp both claim submission and rebate receipt. Such a system would create a uniform and transparent basis for measuring compliance, reduce variability across manufacturers, and alleviate administrative burden on covered entities. Equally important, Baptist Health emphasizes that compliance oversight should not rest solely with covered entities. Requiring providers to track payment timelines and initiate disputes for each delayed or missing rebate would impose an impractical and unsustainable burden. Instead, HRSA should take an active role in monitoring manufacturer performance by implementing tools to identify patterns of delayed payments or non-compliance. In addition, HRSA should apply similar audit rigor to manufacturers as it does to covered entities. Routine oversight, including audits of payment timeliness and appropriate use of claims data, would be essential to ensure accountability and maintain program integrity. C. Additional Safeguards to Address Payment Timing and Cash-Flow Impacts A rebate-based model would require the establishment of strong, standardized safeguards to minimize cash flow disruption for covered entities, including Baptist Health, resulting from delayed rebate payments. To effectively manage these risks, HRSA should implement clear requirements that promote transparency, consistency, and accountability across manufacturers. Key elements should include automated payment status reporting, standardized file formats for rebate determinations, defined documentation requirements for any payment delays, and clear escalation pathways for unresolved or disputed payments. In addition, a centralized dispute resolution mechanismadministered by HRSA or an independent, neutral clearinghousewould be critical to ensure uniformity and prevent variability in manufacturer practices. Together, these safeguards would enhance manufacturer transparency, support consistent implementation, and help mitigate cash flow impacts on covered entities. D. Rebate Denials Any rebate model must establish clear, consistent standards for rebate denials to protect covered entities from unnecessary financial risk and operational uncertainty. Without defined parameters, denial practices could become inconsistent and difficult to challenge. 8900 N Kendall Drive Miami, FL 33176 9 Current experience with platforms such as Beacon's 340B ESP illustrates this concern: manufacturers can select from multiple denial categories, including an "other" category requiring no defined rationale. Denial categories that lack clear justification prevent covered entities from understanding why rebates are withheld and limit their ability to respond or appeal. To address this, HRSA should: Prohibit undefined or open-ended denial categories; Require standardized denial documentation, including a uniform template with clearly defined data elements that manufacturers must provide to substantiate each denial; and Establish defined timelines for denial adjudication comparable to payment timelines, if the payment standard is 10 days, improper denials should be resolved within the same window. Parallel timelines for payment and denial adjudication would reduce financial uncertainty and create a more balanced, predictable process for covered entities. Problems With the Beacon IT Platform Under HRSA's original Rebate Program, participating manufacturers planned to use Second Sight Solutions' Beacon platform. In the weeks available to prepare, Baptist Health encountered serious problems. At the outset, Baptist Health maintains that any entity serving as a data intermediary or clearinghouse for 340B-related activities should be a neutral third party designated by HRSA, independent of both manufacturers and covered entities. Beacon is contracted by pharmaceutical manufacturers and aligned with their objectives, there is limited basis to view it as an impartial intermediary, and this concern would persist under any rebate framework. Baptist Health's experience with Beacon has been consistently challenging: Platform functionality: The 340B ESP and MFP systems are difficult to navigate and operationally inefficient. Under the MDPNP model, claim approvals routinely consume the full 14-day window, or longer, despite available data, which would critically delay fund access under a rebate model. Customer support: Responses lack specificity, resolution pathways are unclear, and issues frequently require repeated follow-up. In some cases, guidance conflicted with broader manufacturer communications. Data transparency: Discrepancies between purchase volumes and claim submissions are difficult to reconcile. Incorrect associations of purchases across pharmacy accounts have taken months to resolve and have recurred after correction. 8900 N Kendall Drive Miami, FL 33176 10 Baptist Health strongly recommends that any future clearinghouse be assigned to a neutral, HRSA- designated entity with no manufacturer affiliation and demonstrated expertise in the 340B Program compliance elements and operations. Efforts To Avoid 340B/MDPNP Duplicate Discounts Baptist Health supports preventing duplicate discounts, and existing statutory protections, particularly those governing Medicaid duplicate discounts under 42 U.S.C. 256b, already provide a clear and effective framework. For this reason, we must distinguish between the already effective statutory requirements and manufacturer-defined "duplicate discounts" arising from commercial PBM arrangements. Manufacturers frequently face rebate-driven formulary pressures that create overlapping rebate scenarios they may characterize as duplicate discounts. These are fundamentally distinct from the statutory Medicaid prohibition and should not be conflated with it. Expanding the definition beyond statutory intent risks shifting responsibility to covered entities for problems driven by manufacturer and PBM contracting practices. Baptist Health has not experienced significant duplicate discount issues under the MDPNP. While deduplication is appropriate, withholding upfront 340B pricing is not a necessary or proportionate solution, as it introduces substantial burden and complexity without clear benefit. Enhancing and standardizing existing processes would more effectively address deduplication needs without unnecessary financial risk to covered entities. If additional infrastructure is required, Baptist Health recommends a neutral, HRSA-designated clearinghouse for standardized data submission and comparison with CMS data. Covered entities should not forgo program savings while awaiting validation. Baptist Health recommends HRSA: Limit duplicate discount safeguards to those expressly required by statute; Prohibit manufacturers from using commercial rebate arrangements or PBM-driven practices as de facto 340B restrictions; and Ensure any rebate model does not expand manufacturer discretion or create new operational burdens on covered entities. Adverse Impacts of These Additional Costs and Burdens The cumulative costs and burdens described above would materially reduce Baptist Health's ability to deploy 340B savings for patient care, with real consequences for the patients and communities we serve. 8900 N Kendall Drive Miami, FL 33176 11 Baptist Health conducted analyses examining the financial and operational effects of moving from upfront discounts to delayed rebate payments. As illustrated in the accompanying chart (Table 2), results show a notable increase in carrying costs, particularly during initial implementation. These reflect real financial exposure, not theoretical projections, and are expected to grow as Baptist Health expands services and serves a larger eligible patient population. *Based on proposed 340B Rebate model; carrying costs are for unknown period There is also meaningful risk that not all rebates would be recovered. Experience with manufacturer-driven processes, including 340B ESP, demonstrates that procedural and administrative barriers do result in denied or unpaid transactions. Such patterns introduce uncertainty that must be factored into any assessment of financial risk under a rebate model. A rebate-based approach does not necessarily improve program integrity and may introduce additional complexity for both covered entities and regulators. Cited benefits, such as reducing diversion, improving pricing transparency, and addressing duplicate discounts, are not guaranteed and may be harder to achieve in a decentralized framework. Meanwhile, covered entities would assume greater operational responsibilities while manufacturers gain more influence over key processes, potentially increasing variability and reducing transparency. Baptist Health urges HRSA to proceed cautiously and ensure any rebate model includes strong safeguards, standardized data requirements, and a neutral, HRSA-governed clearinghouse, while preserving the foundational intent of the 340B Program. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. $2.23 $6.74 $0 $2 $4 $6 $8 $10 Millions Baptist Health Projected Annual Medication Carrying Costs* by IRA Cohort 2026 (10 products) 2027 (15 products) 8900 N Kendall Drive Miami, FL 33176 12 Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency will, or reasonably may, exercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Baptist Health reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savings, all based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Conclusion For all of these reasons, Baptist Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this impractical effort, it must allow Baptist Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Madeline Camejo Vice President of Pharmacy Services | Chief Pharmacy Officer Baptist Health South Florida
HRSA-2026-0001-2387Beaufort Jasper Hampton Comprehensive Health Services, Inc.2026-04-20T04:00Z48,286 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Beaufort Jasper Hampton Comprehensive Health Services, Inc (BJHCHS), I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: BJHCHS anticipates a loss of $380,000 from entity-owned pharmacy operations and a 15% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Beaufort Jasper Hampton Comprehensive Health Services (BJHCHS) was established in 1970 and provides quality, affordable, accessible and comprehensive health services to residents of Beaufort, Hampton, and Jasper counties in South Carolina. The service area, which includes many isolated coastal islands in the Lowcountry of South Carolina, presents some unusual geographic and socioeconomic challenges. As a Federally Qualified Community Health Center (FQHC), BJHCHS operates a comprehensive model providing primary and preventive care for adults and children, obstetric and gynecologic care, dental, pharmacy, nutrition, behavioral and mental health, radiology, case management, and outreach through 11 service delivery sites, 10 school based health centers, 2 administrative sites, and 3 mobile units. The health center also receives funding to serve migratory and seasonal agricultural workers (MSAWs) and Ryan White (RW) Part B, C, D and Housing Opportunities for Persons with AIDS (HOPWA) funding to operate an Early Intervention Services program and supportive services for people living with HIV/AIDS (PLWH). In 2025, BJHCHS served 21,144 total patients with 53,766 medical, 8,579 dental, 1,073 mental health, 1,537 Nutrition, and 1,132 virtual visits. This included 310 MSAW and 264 RW patients receiving services. Almost 95% of patients are at 200% or below of the poverty level. This includes 15% uninsured, 30% with Medicaid, and 20 % with Medicare. I. We Strongly Urge HRSA to Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For BJHCHS in particular, this means it will impact: 72,274 prescriptions and 21,144 patients $2,577,693 current administrative costs for our 340B program 340B revenue used to support almost ALL other services that our Community Health Center provides We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: BJHCHS provided $3,974,363 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: BJHCHS anticipates needing 2.6 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, BJHCHS anticipates an unknown increase to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. While we do not have a dollar amount to place on this anticipated cost, we know it will be significant due to the scope of work that will be required to maintain compliance with a Rebate Model. There is currently not a process or service for reconciling claims through the Beacon platform, so that cost is a complete unknown, even though it will be one of the most essential administrative functions we will have to manage. We will likely be forced to implement a virtual inventory model, which will require the additional cost of a Third Party Administrator (TPA). Previous inquiries into implementing a virtual inventory quoted between $1-$2 fee per prescription. This quote was from 2022, so we could expect that the fees have increased since then. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 BJHCHS currently manages our 340B program with a very limited amount of time and resources, with different functions spread across 3 employees with varying tasks. With the implementation of a Rebate Model, we estimate an increase by 2.4 FTEs to effectively manage and audit the 340B program under this new Rebate Model. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One Midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. BJHCHS estimates an increase in labor costs to increase over $200,000 annually. This additional staffing will require a variety of skill sets including pharmacy operations, auditing, IT, and accounting. The complexity this causes in accounting, purchasing and accounts receivable will require dedicated accounting personnel. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. BJHCHS estimates to expend minimally 5 minutes per claim, which would equate to approximately 6 hours weekly will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. This is in addition to the layers of work added to pull the data from our pharmacy software. BJHCHS currently has 5 entity owned pharmacies and our pharmacy software requires us to log into each stores system to download reports. Those 5 different reports, then have to be uploaded to the Rebate Models platform. BJHCHS urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Additionally, we URGE you to consider a clearinghouse process that would digest the electronic data that is already being transmitted with EVERY dispensed prescription. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. The other customization we added to our software over 5 years ago cost us around $5000. Which we can estimate will be even higher simply to reach the baseline of compliance before a single rebate is ever received, since it is an entirely new process that has never been created or implemented previously. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves over 21,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $585,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Uncertainty remains regarding whether our pharmacy software can adapt to this process. The system was unprepared for the January 1, 2026, Rebate Pilot and has shown little willingness to develop new processes for its relatively small 340B client base. Compared to standard retail operations, 340B pharmacies represent a niche market that often lacks prioritized software support. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 5 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 30 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 30 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. BJHCHS pharmacies leverage the 340B program and sliding fee schedules to ensure medication access for our most vulnerable populations. Shifting to an upfront purchase model threatens to dismantle decades of progress in health equity. As a non-profit Community Health Center (CHC), we operate on razor-thin margins, reinvesting every dollar of 340B savings back into patient care. Under the proposed rebate model, BJHCHS would be forced to carry a multi-million dollar financial burden with no guarantee of timely reimbursement. For example, a 30-day supply of medication that currently costs us $0.30 would suddenly require an upfront acquisition cost of hundreds of dollars. While our mission and sliding fee scale require us to continue dispensing that medication for $2.30 to $14.80, the resulting immediate capital deficit is unsustainable. We are essentially being asked to provide interest-free loans to the multi-trillion dollar 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 pharmaceutical manufacturers, who reported record-breaking revenues last year, at the expense of our operational stability. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost a $2,506,500 increase to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $108,300 to purchase these same drugs at the 340B ceiling price. This represents over a 2214% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, BJHCHS anticipates needing to reduce: 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as patient transportation, community health workers and health educators. Operating Hours: We anticipate needing to reduce our clinic hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund patient support services. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 3,172 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. BJHCHS asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, BJHCHS estimates its 2027 Annual Rebate Opportunity Cost to be approximately $771,553. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. BJHCHS estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $208,875. This is only a representation of the 2026 MFP drugs. If we look at the 2027 MFP drugs, that increase is estimated to be $410,890 and then $537,610 in 2028. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit or utilize limited financial reserves. This is not a sustainable solution. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on BJHCHS, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays BJHCHS urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 8% denial rate would result in a net annual loss of $203,870. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cash flow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion BJHCHS strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. BJHCHS believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. BJHCHS appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Pharmacy Director, Courtney Kaye, PharmD, MBA at ckaye@bjhchs.org. Sincerely, Faith Polkey, MD, MPH Chief Executive Officer Beaufort Jasper Hampton Comprehensive Health Services Courtney Kaye, PharmD, MBA Pharmacy Director Beaufort Jasper Hampton Comprehensive Health Services
HRSA-2026-0001-2388Merck Sharp and Dohme LLC2026-04-20T04:00Z27,138 chars
Please see attached comment letter from Merck Sharp and Dohme LLC. Erin L. Darling Associate Vice President U.S. Policy & Government Relations April 20, 2026 VIA ELECTRONIC FILING https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program and Request for Public Comment; HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Merck Sharp and Dohme LLC (Merck or the Company) is writing in response to the Health Resources and Services Administrations (HRSA) Request for Information: 340B Rebate Model Pilot Program (RFI).1 Merck is a global research-based pharmaceutical and health care company. Through a combination of the best science and state-of-the art clinical development, Merck has produced many important medicines and vaccines. Today, the Company is actively developing a broad portfolio of small molecules, vaccines, and biologic products, with the goal of improving worldwide patient access to important and life-saving therapies. Merck appreciates the opportunity to provide input regarding the potential use of rebates to extend the ceiling price to qualifying covered entities under the 340B Program. A 340B rebate model could address the significant program integrity challenges that have arisen as a result of the growth and complexity of the 340B Program. Consistent with HRSAs RFI objectives, a rebate model would help prevent duplicate discounts between the 340B Program and the Inflation Reduction Act of 2022 (IRA) Medicare drug price-setting program. Specifically, because the IRA precludes manufacturers from providing both the 340B ceiling price and the applicable Maximum Fair Price (MFP) for selected drugs, the proposed rebate model would support statutory compliance and ensure that both programs operate as required by Congress. 1 91 Fed. Reg. 7287 (February 17, 2026). Merck 601 Pennsylvania Ave., NW North Building, Suite 1200 Washington, DC 20004 Tel 202 508 4570 Fax 202 638 3670 2 Indeed, although duplicate discounts are prohibited by the IRA, Merck is deeply concerned about the ability to monitor and prevent duplicate discounts given the size of the 340B Program and the significant instances of duplicate discounting that already exist between the 340B Program and the Medicaid Drug Rebate Program (MDRP). The addition of overlapping discount schemes between the IRA and the 340B Program will continue to exacerbate existing program integrity risks, and the time for a rebate option in the 340B Program is now. Importantly, these issues are not theoretical for Merck the Company has an established MFP for its product JANUVIA in Initial Price Applicability Year (IPAY) 2026 and will have its JANUMET product line included in IPAY 2027. With regard to IPAY 2026, Merck expended significant resources to apply for and receive permission to adopt a rebate model as part of extending the MFP to relevant customers. The discontinuation of that rebate model has required Merck to pivot quickly to avoid duplication of discounts across the MFP and 340B ceiling price, and Mercks experience is that there is no mechanism sufficient to effectively prevent duplication aside from a claims-based rebate model. It is crucial that HRSA act to curb duplicate discounts and covered entity violations of applicable law. To that end, Merck encourages HRSA to adopt a rebate model that utilizes a claims-based approach rather than reliance on any form of estimation to identify 340B units to help prevent statutorily prohibited duplicate discounts. As discussed in detail below, a rebate model can be implemented without imposing undue burdens on stakeholders, including 340B covered entities. The benefits of this approach from a program integrity standpoint far outweigh any modest adjustments to stakeholder participation that may be required. As Mercks experience would indicate, the absence of a rebate model for MFP and 340B deduplication leaves manufacturers without meaningful tools to address this statutory requirement. Merck adopts the comments of its trade organization, the Pharmaceutical Research and Manufacturers of America (PhRMA), and is writing to share its specific experiences related to the 340B Program and with MFP and 340B deduplication for its product JANUVIA, which is included in IPAY 2026. In addition to PhRMAs comments, Merck has responded to a number of HRSAs RFI questions below. RFI Question 1: Costs to Covered Entities A rebate model would not impose undue burden or costs on covered entities. Much of the data that would be necessary to effectuate a rebate model is already easily accessible to covered entities through their Electronic Health Records (EHR), billing, and inventory management systems. As discussed in more detail in response to RFI Question 4 below, covered entities can leverage their existing data collection systems and processes, which would substantially decrease any potential burden associated with HRSA implementing a rebate model. Requiring covered entities to submit data they already collect and is already available through their third-party administrators and billing vendors should not impose any appreciable burden. Even if all data necessary to participate in a rebate model is not maintained in existing electronic systems, any other data necessary to effectuate a rebate model is already tracked by covered entities in order to comply with 340B Program audit requirements. Any modest startup costs for covered entities would be far outweighed by clear program integrity benefits, and HRSA itself has recognized that burdens on covered entities may be minimized by leveraging data that is 3 already maintained.2 Further, should there be any incremental costs to covered entities associated with participation in a rebate model, such costs would be appropriate to ensure a smoother operation of the 340B Program consistent with applicable statutory requirements that preclude payment of duplicate discounts across the MFP and 340B ceiling price. Additionally, as discussed further below, covered entities themselves actually may find benefits to use of a rebate model including because they may receive 340B pricing more quickly under an approach that allows claims on a unit basis (versus on entire packages of covered drugs).3 Covered entity concerns associated with rebate model burdens are significantly overstated, and rebates are a common mechanism used throughout the pharmaceutical supply chain to provide access to discounted pricing. Indeed, the 340B Program largely is an exception to this common practice including with regard to federal programs. For example, beyond their widespread use in commercial agreements, rebates have been used for decades to extend discounted pricing in the Medicaid Drug Rebate Program, the TRICARE retail pharmacy program, Medicare Part D, and under the IRA for extending applicable MFPs. The 340B Program itself also has used rebates for years for AIDS Drug Assistance Program (ADAP) covered entities. As a manufacturer of HIV therapies, Merck has significant firsthand experience with making 340B pricing available to ADAP covered entities through rebates and has found that many ADAP covered entities actually prefer a rebate model. As HRSA is aware, ADAP covered entities have had longstanding voluntary access to a 340B rebate model, and independent data demonstrates the widespread use of 340B rebates by these covered entities. For example, data from the National Alliance of State and Territorial AIDS Directors (NASTAD) from July 2023 found that more than 96% of ADAP covered entities have elected to use a rebate model either exclusively or partially.4 Merck has found that use of the rebate model with ADAP purchasers has been efficient and effective; Merck has received invoices for, processed, and paid tens of millions of dollars of 340B rebates to ADAPs each year for many years. A rebate model would align the 340B Program with how reimbursement typically functions throughout the pharmaceutical supply chain. RFI Question 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities While Merck expects that HRSA will receive responses to this RFI from covered entities containing unsubstantiated claims that a rebate model will result in cash flow issues, these claims are misplaced. Analyses have shown that a rebate model would have a minimal impact on 2 91 Fed. Reg. at 9633 (noting that rebate model burdens may not be significant if covered entities are required to submit data that is comparable to data already being collected and maintained by covered entities through existing third-party vendor relationships or data that is already being provided to manufacturers with respect to certain contract pharmacy policies, in-house pharmacy claims requests, and data elements provided for claims with drugs dispensed under the Medicare Drug Price Negotiation Program.). 3 See HRSA. 340B Rebate Model Pilot Program, available at http://web.archive.org/web/20260102161509/https://www.hrsa.gov/opa/340b-model-pilot-program (noting that [a]ll approved manufacturer plans will issue rebates based at the unit level.). 4 See National Alliance of State and Territorial AIDS Directors, ADAP Medication Purchasing Mechanism as of July 1, 2023 available at https://nastad.org/sites/default/files/2024-03/PDF-ADAP_2024_Table_18_0.pdf. 4 covered entity cash flow.5 As an example, a 2025 IQVIA analysis found that a rebate model requiring payments within ten calendar days (consistent with HRSAs 2025 rebate pilot plan6) would not result in negative cash flow issues for covered entities.7 Indeed, Mercks approved rebate model would have required the company to adhere to the 10-day payment standard for covered entity rebates. Based on Mercks experience, the rebate pilots 10-day payment timeframe is materially faster than what often is required in manufacturer commercial rebate contracts. This timeline is also more rapid than the payment processing deadlines under other federal programs. For example, in the Medicaid Drug Rebate Program, manufacturers are obligated to process state rebate invoices within 30 days of receipt of the invoice. A 10-day rebate timeline for a 340B rebate model is significantly faster than what is provided for under other federal programs and affords covered entities a material benefit relative to commercial contracts and even other federal program stakeholders. Merck urges HRSA to acknowledge the evidence that cash flow concerns by covered entities are overstated and inconsistent with recent analyses and real-world practice. Processing rebates on a per-unit basis also could result in a smoothed or otherwise improved cash flow because covered entities would likely be able to obtain 340B pricing more quickly than under the current replenishment model. As HRSA is aware, 340B drugs today are typically purchased at list price and replaced with purchases at the 340B ceiling price under a replenishment model once an entire package of the medicine has been dispensed or administered to a covered entitys 340B patients. Conversely, under a rebate model, a covered entity may dispense tablets of medication from a bottle to patients and then submit rebate claims on a per-tablet basis as opposed to waiting for the entire bottle to be dispensed to receive a discount. This framework may convey a benefit to covered entities, and Merck again encourages HRSA to acknowledge the real-world implications of a rebate model and not simply take at face value covered entity concerns associated with cashflow. Covered entity comments raising such concerns must be substantiated by evidence, and Mercks understanding is that a rebate model will not harm covered entity cashflow or operations. RFI Question 4: Data Collection by Covered Entities To enable manufacturers to determine a claims 340B rebate eligibility with accuracy, covered entities should be required to provide both retail pharmacy drug data and physician- administered drug data. Merck endorses the claims data elements requested by PhRMA in its comments, and Merck reiterates those data elements in Appendix A for ease of HRSAs 5 See, e.g., Chuan Sun et al., IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white- paper-2025.pdf (finding that a 340B rebate model would not negatively impact covered entity cash flow); see also 3 Axis Advisors LLC, The 340B Rebate Model Cash Flow Analysis (Oct. 2021), https://static1.squarespace.com/static/5c326d5596e76f58ee234632/t/61552ddf1d764676969974d1/1632972256678/ 3_Axis_Report_Kalderos_FINAL_Oct_2021.pdf (finding that a 340B rebate model could be cash flow positive for a covered entity). 6 90 Fed. Reg. 36163 (Aug. 1, 2025) (corrected 90 Fed. Reg. 38165 (Aug. 7, 2025)). 7 Chuan Sun et al., IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program?, https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-flow-impact-in-340b-white-paper- 2025.pdf. 5 reference. Manufacturers need relevant pharmacy and physician claims data to support appropriate claim identification and deduplication, and manufacturers also need a limited set of product purchase data to ensure that covered entity rebate claims tie appropriately to units of a relevant drug that actually were acquired by the covered entity. As noted above, requiring covered entities to report these data elements will not impose a burden. Much of the data is already accessible to covered entities through their existing systems (e.g., EHR, billing, and inventory management). Further, the data elements necessary for rebate processing largely overlap with those required for HRSA audits so covered entities already should be collecting and retaining this information for purposes of their broader 340B Program compliance obligations. Merck therefore believes that HRSA can approve a rebate model that does not impose an undue burden on covered entities given that these customers already clearly maintain the required data. Merck also requests that HRSA specify data retention requirements to ensure that stakeholders maintain data so that it is available in the event of a dispute or audit. RFI Question 5: Manufacturer Efforts to Avoid Duplicate Discounts Merck has invested millions of dollars to monitor claims for the prevention of duplicate discounts but even those expenditures and Mercks best efforts have proven insufficiently effective at eliminating significant instances of duplicate discounting in the 340B Program (including across the MFP and 340B ceiling price). The annual growth of the 340B Program, and the introduction of additional duplicate discounting risk under the IRA, have required a redoubling of Mercks efforts and investment in new resources to help identify and attempt to prevent duplication.8 Despite working with multiple vendors to detect covered entity noncompliance with statutory obligations, Merck still is not able to identify numerous instances of illegal duplicate discounts. Indeed, Mercks experience with claims deduplication lends significant support to the need for a rebate model. For example, Merck has seen an extremely small number of MFP claims flagged as 340B within the Medicare Transaction Facilitator (MTF) for IPAY 2026. While Merck estimates that the percentage of total 340B units is roughly 6% of total JANUVIA purchases, Merck has seen less than 1% of claims flagged as 340B in the MTF. This discrepancy strongly suggests that 340B units for JANUVIA are significantly undercounted in IPAY 2026. An initial analysis of MFP implementation by RxParadigm, a vendor supporting MFP effectuation, highlights the inadequacy of current processes to prevent and detect 340B and MFP duplication. A March 2026 report found that, with respect to just the first 30 days of MFP implementation, 30% of total claims were subject to duplicate payments in which manufacturers 8 A 2025 Congressional Budget Office review found that health care facilities participating in the Prime Vendor Program spent $43.9 billion on 340B drugs in 2021, up from $6.6 billion in 2010. See Congressional Budget Office, Growth in the 340B Drug Pricing Program (Sept. 2025), https://www.cbo.gov/publication/61730. A 2024 IQVIA report found five-year growth of the 340B Program between 2018 and 2023 of 129.4%, more than triple the growth rate of non-340B sales. See Rory Martin & Harish Karne, The 340B Drug Discount Program Grew to $124B in 2023, IQVIA, https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2024/iqvia-update-on-size-of-340b- program-report-2024.pdf. 6 paid both MFP and 340B pricing on the same transaction.9 The average dollar value per duplicate payment in this report was $398, indicating significant overpayment exposure for manufacturers in violation of the IRA.10 These findings highlight the clear need to make an alternative mechanism available for manufacturers, including Merck, to avoid paying both 340B discounts and MFP rebates on submitted claims. A rebate model is the most efficient mechanism available to prevent duplicate payments while posing minimal additional operational burden across the program. Absent a rebate model, Merck is left with inadequate options to prevent duplicate discounts. Merck also recommends that HRSA require all covered entity types to participate in the rebate model. Notably, the majority of 340B sales of Mercks IPAY 2026 product during the 2025 calendar year were to grantee covered entity types, as opposed to hospital covered entities. Including all covered entity types in a rebate model is necessary to prevent duplication of discounts and to bolster 340B Program integrity. A pilot would not sufficiently test the efficiency and utility of the rebate model approach if it does not include all covered entity types, and manufacturers could potentially be subject to significant duplicate discounting risks if the majority of 340B sales for their relevant medicines are excluded from the model. In addition, including all covered entity types in a rebate model helps mitigate the risk of hospital entities purchasing product through other owned or related sites that may be excluded from the rebate model, which would result in manufacturers not receiving the data necessary to detect and prevent payment of duplicate discounts. Artificially limiting a rebate model just to certain entity types would not provide manufacturers or HRSA with sufficient information regarding potential duplicate discounts or the overall benefits and operation of the model itself. RFI Question 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot A rebate model would help safeguard 340B Program integrity by streamlining the way in which stakeholders identify duplicate discounts. The current pay and chase system of providing 340B discounts is insufficient given the size and complexity of the 340B Program, and this approach puts manufacturers in the untenable position of constantly evaluating purchases on a retroactive basis. While Merck recognizes that HRSAs proposal would be to use the rebate model pilot to prevent duplicate discounts between the MFP and 340B ceiling price, the data that covered entities would provide under a rebate model could also be utilized to ensure program integrity across other government programs. For example, compiled data could give HRSA visibility into potential duplicate discounting for the MDRP (i.e., to identify the occurrence of Medicaid rebates paid on the same units that are subject to the 340B ceiling price). Merck therefore encourages HRSA to ensure a broad set of data is available under a rebate model to support future expansion of this approach to administering the 340B Program if it is proven successful. Indeed, Merck encourages HRSA to seek manufacturer input based on experience with any rebate model pilot to evaluate the continued operation and potential expansion of the program. 9 340B Report, Industry Insights, 40% of Claims Miss the Mark (Mar. 5, 2026), https://340breport.com/40-of- claims-miss-the-mark-sponcon-rxparadigm/. 10 Id. 7 Merck strongly believes that a rebate model will help improve program integrity in a way that is not unduly burdensome to any stakeholder. Existing oversight mechanisms have proven insufficiently effective in ensuring that the Program complies with statutory prohibitions on duplicate discounts. Auditing covered entities is an insufficient mechanism given the steps required to establish reasonable cause to audit under HRSAs guidance, and the sheer volume of claims and potential occurrences of duplicate discounting in the 340B Program makes auditing a dramatically ineffective tool. Further, when Merck has initiated audits against covered entities, or even just contacted covered entities for information to resolve potential integrity issues, covered entities have been very slow to respond and have shown an unwillingness to engage in good faith. Some covered entities refuse to cooperate altogether. In recent years, Merck estimates that it has expended an average of over 50 hours per good faith inquiry to attempt resolution of suspected duplicate discounts identified by the Company. Mercks experience suggests that auditing covered entities has not been an effective tool for resolving potential program integrity issues and is often met with resistance from covered entities. For example, Merck in one case initiated a good faith dispute with a covered entity in 2021, received significant pushback and lack of engagement by the covered entity, and subsequently received HRSA approval to audit. This matter remains ongoing five years after Merck initiated its outreach to the covered entity and the protracted period of this engagement has been driven by the covered entitys roadblocks and unwillingness to participate in good faith. A rebate model could circumvent these extraordinary efforts which, as it stands, only potentially could address a sliver of the noncompliance issues in the program. HRSAs own auditing also has not been effective in detecting and preventing duplicate discounts. HRSA audits fewer than one percent of covered entities on an annual basis.11 When HRSA does audit covered entities, it has not successfully audited for compliance with the prohibition against duplicate discounts. As noted in a 2020 U.S. Government Accountability Office report, HRSAs audits are not assessing compliance with the prohibition against duplicate discounts in managed care because the agency has yet to put forth guidance on this issue.12 Good faith engagement with covered entities and the existing audit processes are burdensome, slow, and expensive for manufacturers and have yielded few material improvements in program integrity even prior to the expansion of duplicate discounting risks under the IRA. A rebate model could help to significantly mitigate these risks, even if only intended initially for purposes of deduplication across the MFP and 340B ceiling price. As noted above, should a rebate model prove successful in prohibiting or limiting 340B and MFP duplication, expansion of the model to prevent duplicate discounts across the 340B Program and MDRP would be appropriate and would reflect a substantial improvement in program integrity efforts beyond the existing options to audit or attempt good faith resolution with covered entities. 11 Analysis of HRSA 340B Covered Entity Audits, ADVI (March 2025), https://advi.com/insight/advi-analysis-hrsa- 340b-covered-entity-audits/. 12 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement, GAO (Jan. 2020), https://www.gao.gov/assets/gao-20-212.pdf. 8 * * * Merck appreciates the opportunity to provide input on a 340B rebate model. We support reforms to the 340B Program that align with the purpose of the 340B statute. A rebate model will prevent 340B Program integrity violations and align with the applicable legal requirements that preclude payment of duplicate discounts. Merck looks forward to continuing discussions with HRSA to ensure the success of a rebate model. Indeed, given that Merck intended to operate under an approved rebate model plan for its MFP effectuation for JANUVIA in IPAY 2026, Merck encourages HRSA to move urgently toward adoption of an updated rebate model for MFP and 340B deduplication. As noted throughout this submission, the current ability for manufacturers including Merck to identify duplicate discounts in the 340B Program is very limited. Despite expending significant resources to solve for recurrent instances of covered entity statutory violations, Mercks efforts remain insufficient to fully mitigate duplicate discounts in the 340B Program. Given that stakeholders now are nearly four full months into IPAY 2026, and with IPAY 2027 fast approaching, Merck urges HRSA to move toward adoption of a 340B rebate model that would apply across all covered entity types. Without this mechanism, Merck expects to continue experiencing duplicate discounts across the MFP and 340B ceiling price for its product JANUVIA and that the same issues will occur in IPAY 2027 with Mercks products JANUMET and JANUMET XR. Manufacturers like Merck should not be subject to continuing duplication where material program integrity improvements may be achieved with a rebate model. Thank you for your consideration of this submission. Please feel free to contact me should you have any questions. Sincerely, Erin L. Darling 9 Appendix A: Data elements needed to accurately implement a rebate model Pharmacy Claims Data Medical Claims Data Date of service Date prescribed Rx number Fill number 11 digit National Drug Code (NDC) Quantity Dispensed Prescriber ID Service provider ID 340B ID Rx Bank Identification Number (BIN) Rx Processor Control Number (PCN) 11 digit NDC Quantity Date of service 340B ID Service provider ID Claim number (analogous to Rx number) Health plan ID & health plan name (analogous to Rx BIN & Rx PCN) Rendering physician ID (analogous to Prescriber ID) Claim line number Unit of measure Purchase data elements (for pharmacy and medical claims) Wholesaler Name Wholesaler Account Number Invoice Date Invoice number Ship-to pharmacy NPI 11-digit NDC Package units 340B ID
HRSA-2026-0001-2389HopeHealth2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-2011
HRSA-2026-0001-2390Justin Ott · MI, United States2026-04-20T04:00Z16,612 chars
To Whom It May Concern: Since 2011, nearly the entirety of that time (as well as career) has been involved with the 340B Program in some fashion. My involvement has been diverse in nature having spent time as a covered entity employee, consultant, specialty contract pharmacy, and IT vendor supporting 340B Programs. This background has led to my involvement of collaborating heavily with well over 250 different covered entities and touching another 500 through the form of speaking opportunities, business development efforts, and independent consulting engagements. Navigating the 340B Program these past 15 years has been a true test of fact finding, knowledge sharing, and downright courage knowing every move that is made at the covered entity level will be scrutinized by various lawyers, compliance officers, the government, pharma officials, pundits, and several other people you have never even met. Some of the very smartest and most accomplished executives Ive met in healthcare have gone as far as to admit that 340B is one of the most complicated programs they have ever experienced. While much of what I am writing will be qualitative in nature, I trust that the recipient of this will carefully consider my message to be of good faith and overall constructive in nature. Since 1992, the 340B Program has operated under a guiding statute that laid the groundwork for how the program was going to be run. For nearly 18 years, that program did not experience changes of this magnitude and involvement in the 340B Program was minimal as not much interest was garnered at the time. In 2010, the program expanded considerably due to the Affordable Care Act, a push that granted covered entities the opportunity to stretch their scarce resources even further. This is when you saw the largest movement of covered entities to join the 340B Program as it now became an opportunity that no eligible covered entity could ignore (due to impossible to manage increasing healthcare costs). From there, audits began and interpretative guidance became a standard method to herd the covered entities a certain direction with respect to the 340B Program rules. More law firms, consultants, and data vendors came into existence as more covered entities came into the fold. The 340B Program grew significantly between 2010 and 2020. When assessing what this growth is, be mindful of the source you consume as pharma pundits and covered entities do not measure these dollars the same way. Starting in 2020, pharmaceutical manufacturers began to hit back as hard as they ever have with the manufacturer restrictions, which caused a crippling blow to thousands of covered entities. The main concern was the strongly worded legal threats identified on the Second Sight Solutions website whenever a covered entity signed up to participate in a program they felt was shoved down their throats (which essentially is true given the high quantity of states that have been able to successfully block this from happening to covered entities and pharmacies in their state). News of the Rebate Pilot that ruled most of 2025 in the industry was ground shaking. Thousands of covered entities have been set up to operate their 340B Programs a certain way and this new rebate model was a complete change in how the program operated. Keeping in mind that some of the largest pharmaceutical companies have a Marketing and Communications annual budget that can beat a majority of hospitals and clinics entire book of revenue for a year, for several years at this point the entire mainstream media of anti-340B pundits have done everything they can to paint 340B as the true villain of rising healthcare costs. On the other hand, covered entities are scrambling given that most of them are not in a position to be able to pivot how their 340B Program works to an entirely new model. My full comment is attached as a PDF and I would encourage the reader to continue it there. I offer the impact this will have on the US healthcare system, recommendations for how to accommodate, and more about how many that do not understand how 340B operates are who are steering the public a certain way. Thank you, Justin Ott, MHA To Whom It May Concern: Since 2011, nearly the entirety of that time (as well as career) has been involved with the 340B Program in some fashion. My involvement has been diverse in nature having spent time as a covered entity employee, consultant, specialty contract pharmacy, and IT vendor supporting 340B Programs. This background has led to my involvement of collaborating heavily with well over 250 dierent covered entities and touching another 500 through the form of speaking opportunities, business development eorts, and independent consulting engagements. Navigating the 340B Program these past 15 years has been a true test of fact finding, knowledge sharing, and downright courage knowing every move that is made at the covered entity level will be scrutinized by various lawyers, compliance oicers, the government, pharma oicials, pundits, and several other people you have never even met. Some of the very smartest and most accomplished executives Ive met in healthcare have gone as far as to admit that 340B is one of the most complicated programs they have ever experienced. While much of what I am writing will be qualitative in nature, I trust that the recipient of this will carefully consider my message to be of good faith and overall constructive in nature. The most eective analogy I have used to explain the type of change being proposed is imagining that an entire industry (thousands of sites employing anywhere from hundreds to tens of thousands of employees per site) has been playing the popular board game Candy Land but the federal government has provided mandates to change the game to Chutes and Ladders. You might be eager at this point to not take the remainder of this message seriously but consider the analogy: - Since 1992, the 340B Program has operated under a guiding statute that laid the groundwork for how the program was going to be run. For nearly 18 years, that program did not experience changes of this magnitude and involvement in the 340B Program was minimal as not much interest was garnered at the time. o Candy Land games were being purchased but most buyers would put it on the shelf and hardly play it - In 2010, the program expanded considerably due to the Aordable Care Act, a push that granted covered entities the opportunity to stretch their scarce resources even further. This is when you saw the largest movement of covered entities to join the 340B Program as it now became an opportunity that no eligible covered entity could ignore (due to impossible to manage increasing healthcare costs). o Candy Land gets re-tooled and becomes much more worthwhile to play than ever before all thanks to the federal government. - From there, audits began and interpretative guidance became a standard method to herd the covered entities a certain direction with respect to the 340B Program rules. More law firms, consultants, and data vendors came into existence as more covered entities came into the fold. The 340B Program grew significantly between 2010 and 2020. When assessing what this growth is, be mindful of the source you consume as pharma pundits and covered entities do not measure these dollars the same way. o Candy Land rules started to become published, and households everywhere are attempting to make their Candy Land games their own while scouring the industry for strategies on how to be the best Candy Land players. - Starting in 2020, pharmaceutical manufacturers began to hit back as hard as they ever have with the manufacturer restrictions, which caused a crippling blow to thousands of covered entities. The main concern was the strongly worded legal threats identified on the Second Sight Solutions website whenever a covered entity signed up to participate in a program they felt was shoved down their throats (which essentially is true given the high quantity of states that have been able to successfully block this from happening to covered entities and pharmacies in their state). o Candy Land detractors have determined it is unlawful and a misuse of game rules to allow for the shortcuts in the game to continue to exist. Any Candy Land users identified as using the shortcuts without properly submitting required attestations and data will lose their Candy Land privileges until corrected. - News of the Rebate Pilot that ruled most of 2025 in the industry was ground shaking. Thousands of covered entities have been set up to operate their 340B Programs a certain way and this new rebate model was a complete change in how the program operated. o Beginning January 1, 2026, you will no longer be able to play Candy Land anymore. Instead, you will now only be allowed to play Chutes and Ladders. If you do not have any Chutes and Ladders materials, then you are not permitted to play any game. Your Candy Land game will cease working. - Keeping in mind that some of the largest pharmaceutical companies have a Marketing and Communications annual budget that can beat a majority of hospitals and clinics entire book of revenue for a year, for several years at this point the entire mainstream media of anti-340B pundits have done everything they can to paint 340B as the true villain of rising healthcare costs. On the other hand, covered entities are scrambling given that most of them are not in a position to be able to pivot how their 340B Program works to an entirely new model. o To wrap up the analogy, consider the Candy Land to Chutes and Ladders transition once more: The Candy Land board is useless and makes no sense with this new game None of the pieces or cards work The instructions are rendered useless with this new game You must obtain the Chutes and Ladders board and pieces and learn how to play very quickly (or else) People playing this new game are already finding out it is broken and unreliable to play The 340B public gathers that this decision is part of a broader, long-term plan that fits directly into the Inflation Reduction Act that has already been put into motion. Covered entities dont believe anything that is said in these comments will stop the torpedo heading for their organization (only to repeat each year as more drugs enter the fold). This public comment is the first real genuine interest to hear from hundreds of covered entities. But here are a few more observations I have made during my career: - No 340B covered entity has ever been in a situation where their annual 340B savings exceeded their annual uncompensated care they experience from their patient populations. Definitionally, this would mean covered entities are not abusing the program as so many proclaim. - The impact of deciding to withdraw the Pilot Rebate Program approximately 7 hours prior to its launch has had a significant expense associated with it. This not only is extended to covered entities but also involves vendors, wholesalers, and pharmacies. There has not been any restitution at all in this area, only the request to implement a dierent rebate model in the future. - Pharma sympathizers (e.g., Adam Fein, William Sarraille, Chris Deacon, IQVIA, to name a few) are quick to assess 340B covered entities as needing to be better with the 340B Program but never actually oer what healthcare in the US will look like for American citizens if you dismantle the 340B economy. Here is a summary of what would happen: o Care delivery sites (covered entity locations) within the next 3 years would experience a catastrophic shutdown or merger/acquisition event. I believe this would broadly aect upwards of 30-35% of healthcare delivery sites in the US. None of these sympathizers oer an actual prescription for what patients are to do when these types of shutdowns occur in these communities. o Tens of thousands of healthcare workers in the US would furlough, causing a seismic shift in the unemployment rate in the healthcare industry. o Within the next 5 years, you would see an entirely dierent reason for why US healthcare costs are out of control expensive and likely see a lot of the same sympathizers advocating for change in whatever this reason is. The cherry on top is that none of the individuals can demonstrate actual working experience at a covered entity with these rules (and federal audits mind you), not to mention IQVIAs research papers vastly underrepresent the covered entity community in their research, despite there being thousands of covered entities in the US compared to only hundreds of manufacturers. - Because covered entities do not have the flash (i.e., money) compared to their critics, there has been a severe underrepresentation at the federal level of what is happening in the care delivery sites in the US. Covered entities have been threatened for years to not misuse their 340B savings, which ultimately has caused them to not invest in government aairs surrounding this program. As a result, the federal government only hears from pharma and pharma sympathizers and not the actual covered entities that qualify for the program. - Simply put listen to the American people over the last several years related to their views of the pharmaceutical industry. Secretary Robert F. Kennedy Jr. is an outspoken critic of how big pharma has navigated the US healthcare system since the polio crisis. This is the same pharma that is telling the public that 340B is being abused and riddled with fraud. Not to mention that Secretary Kennedy has openly admitted that a significant shift in the 340B Program would need to be carefully considered given how much of a lifeline it is for rural healthcare providers. To close, I would ask that the following be carefully considered more closely: - The focus has been on the 340B Program as a whole but I would strongly encourage that a rural vs. urban focus be explored. Covered entities in the most rural areas of the US do not nearly cause the pain that is described by pharma with this program. Eliminate 340B in the largest 15 metropolitans in the US (25 miles outward all directions from city center) and restore 340B pre manufacturer exclusions for the rest of the US and you eliminate the risk of care delivery sites consolidating and shutting down in the key communities. Urban providers can then be oset through separate government grants that could be established to help cushion the impact of this decision. - If a rebate model must happen, please institute requirements that pharmaceutical companies must standardize all data requirements to a universal level. It is too diicult for rural hospitals to have to develop various data requirements for the various manufacturers that have slight dierences in how they see these rules unfolding (see 340B ESP requirements). - If a rebate model must happen, outlaw the manufacturer restrictions programs that have occurred since 2020. Again, this is an aim to help cushion the impact towards the new normal. - Audit all manufacturer restriction/rebate model vendors and publish operational requirements and standards in this industry. Today, there is essentially a monopoly with regards to the vendors that facilitate manufacturer restriction/rebate programs today. This needs to be regulated and licensed appropriately. - Implement broader timelines when manufacturers change their policies. Currently, manufacturers can make a significant change in how they handle the restrictions program. For example, Alkermes gave thousands of covered entities less than 3 weeks notice to change from ESP to Truzo, essentially a brand new platform that no covered entity had a reason to use before that notice was given. This is unacceptable and a very great cost mitigation strategy that pharma takes that many in the government dont realize is happening. - Require manufacturers publish what it is they are doing with the millions upon millions of rows of data they have because of the ESP program that has been operating since 2020. There is sensitive data (while not PHI, it is as close to PHI as possible) that originated from these care delivery sites without any knowledge of what it is being used for. When covered entities request this information, manufacturers do not comply. I welcome the chance to speak further on this topic. Justin Ott, MHA
HRSA-2026-0001-2391ASHP2026-04-20T04:00Z66,433 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our over 65,000 pharmacist, pharmacy technician, and pharmacy student members practicing in all settings across the United States, the American Society of Health-System Pharmacists (ASHP) appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). ASHP continues to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective. Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the previously proposed rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. Although HRSA has no authority over the MFP process, we understand that the agency is coordinating closely with CMS. We continue to urge CMS to reconsider its administratively burdensome and unworkable rebate model and institute an upfront discount (see Attachment 1). We urge HRSA to look at the unsuccessful rollout of the IRA rebate process and rethink the imposition of a rebate model for the 340B program. Both IRA Medicare discounts and 340B would be administratively simpler and less prone to manufacturer abuse if implemented as prospective discounts. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide the following guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float purchasing and administrative costs. Our members are reporting that they are currently waiting on, collectively, millions of dollars in rebates for just the first three months of IRA. These unpaid rebate claims are in addition the costs of purchasing the drugs at a higher price (WAC versus 340B). Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Manufacturers had almost total control over how the IRA systems were configured and yet now argue they are unworkable and require this ancillary 340B rebate model. Members have reported numerous problems with the MFP rebates, including mismatched data fields, requests for invoice pricing for all purchases (not just 340B inventory), and a lack of responsiveness from both CMS and certain manufacturers regarding these issues. Allowing manufacturers to expand these problems into the 340B environment is both unnecessary and fiscally irresponsible, especially considering the existence of a much simpler, cost-effective option - the third-party clearinghouse. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials), with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. Many hospitals are sitting on backlogs of 3 or more months worth of unpaid rebates in some cases, up to 50 70% of rebates from certain manufacturers. Rebate payment is then conditioned on access to invoice pricing or other claims data that should not have to be provided. Hospitals have been further frustrated by the Beacon platform, which generates canned responses to queries regarding unpaid rebates, thereby requiring extensive human intervention to even determine the reasons for the claim rejection. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. To best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete, enforceable timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from dictating the implementation of a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos/Truzo should not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. ASHP urges HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Please do not hesitate to contact me at 301-664-8698 or jschulte@ashp.org if ASHP can provide any further information or assist the agency in any way. Sincerely, Jillanne Schulte Wall, J.D. Senior Director, Health & Regulatory Policy Attachment 1: ASHP Memo to CMS re: IRA Negotiated Drug Pricing Framework Mehmet Oz, M.D. Administrator Centers for Medicare & Medicaid Services U.S. Department of Health and Human Services 7500 Security Boulevard Baltimore, MD 21244-8016 RE: Request for CMS to Require Upfront Manufacturer Discounts for Maximum Fair Price Effectuation under the Inflation Reduction Act Dear Administrator Oz: For decades, the American people have been at the mercy of a healthcare system that rewards obscurity and inefficiency. Those defects especially plague the delivery of critical pharmaceutical therapies, which have become more expensive and less available to those who need them most. This Administration understands the mounting crisis facing Americans. That is why it has made reform in this area a priority. One of its chief reforms has been to ensure affordable therapies that Americans in every zip code can access. The American Society of Health-System Pharmacists (ASHP) is committed to the same reform the Administration has been working so hard to implement. Congress and President Trump are on the same page here. The Inflation Reduction Act (IRA) empowers the Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices directly with manufacturers for Medicare beneficiaries and then commissions CMS to ensure that those negotiated prices serve as the Maximum Fair Price offered to beneficiaries, pharmacies, and other providers delivering the therapies. President Trump has likewise issued an Executive Order directing CMS to improve transparency in the IRAs negotiation program and seeking policy recommendations to promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans. The ASHP shares those goals. ASHP is the largest association of pharmacy professionals in the United States, representing 60,000 pharmacists, student pharmacists, and pharmacy technicians in all patient care settings, including hospitals, ambulatory clinics, and health-system community pharmacies. Its members are on the front lines of delivering affordable and clinically appropriate medication to the American people. This makes ASHP well positioned to address the reforms that Congress and the Administration have tasked CMS with implementing. Unfortunately, pharmaceutical manufacturers have halted that progress in its tracks. They have lobbied hard for a negotiation program that leaves manufacturers in control of honoring the Maximum Fair Price. Under the manufacturer-preferred system, manufacturers can force pharmacies and other providers to pay far more than the Maximum Fair Price for the very drugs subject to CMSs price negotiations. Manufacturers may later provide pharmacies with a retrospective rebate, but that puts pharmacies at the mercy of manufacturer discretion, timing, pseudo-regulatory fiat. This is in direct conflict with President Trumps order to make the IRAs drug pricing transparent. By the time pharmacies realize the increasingly illusory benefits of the IRAs negotiation program, the damage is done, and the force of the reforms has been largely lost. ASHP submits this letter to express deep concern regarding this manufacturer-preferred system. CMS should reject that system and instead require manufacturers to apply upfront discountsnot retrospective rebatesto dispensing entities for three reasons: The manufacturer-preferred system of rebates is inconsistent with the text and purpose of the IRA. CMS not only has clear statutory authority to require manufacturers to honor Maximum Fair Prices with upfront discounts, but doing so is also the only way to achieve Congresss objectives. Congress knows how to authorize CMS to use rebates. It chose not to here. The manufacturer-preferred system of rebates is also inconsistent with the Administrations commitments to regulatory simplification, administrative efficiency, and pharmaceutical price transparency. Individual manufacturer rebate plans are administratively cumbersome for both CMS and providers and introduce avoidable variability in the accurate reconciliation of drug prices. Finally, the manufacturer-preferred system of rebates is inconsistent with a sustainable healthcare delivery system. It directly threatens the viability of the very providers on whom the success of the IRAs negotiation program depends. Allowing manufacturers to charge pharmacies prices far above those set by CMS misallocates the statutory responsibility and shifts the cost burden away from the entities on whom Congress placed it. As explained in more detail below, the consequences of the manufacturer-preferred system of rebates are profound and inconsistent with both the Administrations and Congress goals. Congress has empowered CMS to implement a standardized, upfront discount model, and CMS should exercise that authority to realign the program with the IRAs text and purpose. Doing so will harmonize CMS policy with the Administrations deregulatory and drug-pricing transparency priorities. Most importantly, it will safeguard beneficiary access to discounted therapies. I. The IRA neither Requires nor Allows Manufacturers to Saddle Pharmacies with the Cost Burden of the IRAs Drug Price Negotiation Program. Manufacturers are Solely Responsible for Effectuating Maximum Fair Price Section 1191(a) of the Social Security Act directs the Secretary to establish a drug price negotiation program and to enter into agreements with manufacturers of selected drugs under the program. The agreements set a Maximum Fair Price that manufacturers may charge Medicare beneficiaries and dispensers for the negotiated drugs. The IRA leaves no doubt about who is responsible for honoring, and who will benefit from, the Maximum Fair Prices: it is manufacturers who must provide access to the prices both to dispensing entities and to Medicare beneficiaries before . . . any other discount. The IRA nowhere suggests that CMS can shift that obligation to dispensing entities, nor does it provide any basis for allowing manufacturers to require that dispensing entities bear the initial cost burden of the pricing discounts. Quite the opposite. The IRA entitles dispensing entities to those pricing discountsit doesnt make them cash lenders to manufacturers. Rebates Are Inconsistent with Congressional Intent The manufacturers want to flip the IRAs policy objectives on their head by forcing pharmacies to pay inflated prices first and hope for rebates later. But two of Congresss principal goals were to inject price certainty and price transparency for the negotiated drugs. Rebates flunk both of those goals. And we know Congress did not want rebates because it knows very well how to authorize CMS to use rebates. The 340B Drug Pricing Program expressly tells CMS that the amount required to be paid may take into account any rebate or discount. The IRA contains no such language suggesting manufacturers may use rebates to honor a drugs Maximum Fair Price. CMS Has a Clear Model for Upfront Discounts in the 340B Program To be sure, Congress left the details of the IRAs drug price negotiation program to CMS, which has discretion (within limits) to establish procedures to ensure compliance with the statutes requirements. Here, CMS does not need to reinvent the wheel. Instead, it should look to the 340B Drug Pricing Programs use of upfront discounts as the model. The 340B statute has been interpreted under long-standing guidance to require prospective discounts to covered entities. Methods of providing upfront discounts under 340B are well established and dispensing entities have a long history of successfully managing separate 340B inventories and utilizing replenishment models for 340B drugs. Aligning the IRAs drug price negotiation program with the 340B program ensures uniformity, predictability, and efficiencyall things the Administration has worked hard to infuse in government. Manufacturers are already trying to exploit the current misalignment to inject rebates into the 340B program. That regressive step is most effectively rebuffed by establishing a uniform, prospective discount requirement here as well. This approach is legally sound, programmatically efficient, and fully aligned with the legislative intent of the IRA. On the other hand, permitting a manufacturer-preferred system of rebates has the effect of unlawfully shifting a statutory manufacturer obligation onto providers. That contravenes both the letter and the purpose of the law. Without an express statutory directive, CMS lacks the authority to impose such a shift, and the current implementation must be amended to reflect the program Congress legislated. II. The Manufacturer-Preferred System of Rebates Is Misaligned with the Administrations Deregulatory and Price Transparency Initiatives. The Administrations Commitment to Deregulation and Transparency The Administration is intent on reforming the regulatory landscape in healthcare by eliminating unnecessary complexity, increasing administrative efficiency, and improving price transparency. That is why it has issued a series of Executive Orders directing federal agencies to reduce administrative burden, promote regulatory transparency, and advance policies that strengthen Medicares fiscal sustainability. Executive Order 14192, Unleashing Prosperity Through Deregulation, or the 10-for-1 Deregulatory Executive Order, obliges agencies to eliminate outdated or unduly burdensome requirements reduce the overall regulatory burden on the economy. Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First, further directs HHS to implement the IRAs negotiation program in a manner that improves cost savings and transparency and seeks broad policy recommendations that promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans. The Rebate Process Creates Uncertainty and Administrative Complexity Under the manufacturer-preferred system of rebates, pharmacies have no assurance on how or when they will be reimbursed. CMSs program guidance established a Medicare Transaction Facilitator to serve as the primary infrastructure for effectuating the discounts. CMS also plans to create a payment module to provide a clearinghouse that manufacturers may use to provide rebates to dispensing entities, but right now, manufacturers are not required to use the yet-to-be-built payment module. Manufacturers will establish their own systems, rules, and processes for every Medicare negotiated medication they manufacture. By permitting manufacturers to either (1) use the CMS payment module for rebates or (2) develop bespoke rebate mechanisms outside of the CMS system, manufacturers will yield immense control over the process. And one thing is certain, whatever process manufacturers use will shift the administrative burden to providers and CMS itself. If that sounds like regulations on regulations, thats because it effectively is. Manufacturers will impose complex and burdensome red tape on pharmacies that undermine the IRAs objectives at every turn. That also means that CMSs oversight responsibilities will multiply. The agency will need to evaluate and track numerous and varying rebate frameworks across all selected drugs and all participating manufacturers. This duplication of effort is unnecessary and avoidable. It adds compliance risk, consumes federal resources, and detracts from CMSs ability to focus on programmatic integrity and beneficiary outcomes. CMSs Regulatory Relief RFI Recognized the Excessive Burden on Providers CMSs Medicare Regulatory Relief Request for Information (RFI), issued in furtherance of Executive Order 14192, explicitly sought stakeholder input on deregulation to reduce provider burden, streamline compliance obligations, and prioritize policies that enable providers to focus on care delivery rather than administrative complexity. The RFI recognized that policies which require duplicative processes or impose excessive operational costs can drive providers away from federal programs and ultimately undermine patient access and health equity. The manufacturer-preferred system of rebates exemplifies exactly the kind of system CMS identified as problematic in its RFI. It creates variation where uniformity is possible and risks not only increasing overhead costs, but also deterring provider participation. Prospective Discounts Are the Deregulatory, Transparent Alternative A prospective discount requirement, by contrast, will eliminate dozens of redundant processes, streamline regulatory oversight, and ensure the negotiated prices are administered uniformly and transparently. CMS should take this opportunity to realign its implementation with the Administrations regulatory and policy objectives. III. An Upfront Discount Process is Needed to Ensure the IRAs Drug Price Negotiation Program Achieves the Full Range of Benefits Congress Intended The IRAs Drug Pricing Goals are Dependent on Dispenser Participation The IRAs drug pricing provisions reflect a congressional mandate to improve drug price affordability for Medicare beneficiaries and the federal government. The statute is intended to reduce out-of-pocket costs and overall program spending, increase transparency in drug pricing, and ensure Medicare beneficiaries have access to affordable therapies. To achieve its goals, the IRAs negotiation program depends on widespread dispenser participation so that beneficiaries can access negotiated prices through the existing healthcare delivery system without disruption or provider attrition. As CMS itself has noted in program guidance, implementing a timely, administrable, and sustainable mechanism to deliver the Maximum Fair Price to end users is critical to avoiding access barriers. This model presumes seamless integration of the negotiated pricing for all stakeholders. The Rebate Model Threatens Dispenser Participation and Patient Access The manufacturer-preferred system of rebates frustrates that design. Allowing manufacturers to satisfy their statutory obligations through retrospective rebates introduces a fragmented, administratively complex process that delays application of the negotiated price and forces dispensers to assume up-front costs. Rather than a single, streamlined approach, the rebate model generates dozens of manufacturer-specific payment procedures, each with its own reporting requirements, timeframes, and reimbursement pathways. That is nothing but additional red tape designed to increase complexity and will result in decreased provider participation. In contrast, a standardized, prospective discount model will preserve beneficiary access, limit administrative burden, and promote statutory compliancealigning implementation with the laws underlying structure and intent. The IRAs primary drug pricing policy objective is to provide access to affordable prescription drugs to Medicare beneficiaries. As the agency has noted, [t]he law provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening Medicare. But allowing manufacturers to require that dispensing entities seek retrospective reimbursement to recover discounts jeopardizes beneficiary access to these affordable drug prices. The retrospective rebate approach imposes a financial and operational burden on dispensing providers that is incompatible with the goals of the IRA. The manufacturer-preferred system of rebates drives down provider participation, particularly among rural, safety-net, and community-based providers operating on thin margins. Inconsistent reimbursement timelines jeopardize liquidity and introduce substantial financial risk. For smaller providers, that risk is too great to bear. A recent analysis published by the National Community Pharmacists Association (NCPA) demonstrates the significant financial risk facing pharmacies under the manufacturer-preferred system of rebates, including payment delays resulting in $11,000 weekly cashflow loss and $43,000 annual revenue loss. Perhaps most concerningly, a survey of NCPA members found that 93.2 percent of independent pharmacists are considering not stocking, or have already decided not to stock, one or more of the first ten Part D drugs selected for price setting. Those decisions are the logical consequence of prioritizing manufacturers where the IRA does not. And ultimately, Medicare beneficiaries will be denied the IRAs full benefit. Conclusion The manufacturer-preferred system of rebates jeopardizes provider stability, undermines patient access, and exceeds the agencys statutory authority. The IRA does not authorize CMS to allow manufacturers to shift the cost burden of the negotiated prices to dispensers. Allowing manufacturers to effectuate negotiated pricing through a rebate rather than a singular manufacturer-provided upfront discounted price contradicts not only the plain text and structure of the IRA, but also with the Administrations broader policy priorities, including regulatory simplification under the Executive Order 14192 and the commitment to a transparent and efficient prescription drug value chain set forth in President Trumps Executive Order 14273. An upfront discount represents the default method under comparable federal programs, aligns with the IRAs legislative design, eliminates excessive administrative processes, supports provider participation, and ensures the sustainability of the Negotiation Program. ASHP strongly urges CMS to revise its guidance and require a uniform, prospective discount model. ASHP stands ready to support CMS in effectuating this policy shift and ensuring the successful implementation of the IRAs reforms, as well as the Administrations drug pricing policy goals. Please do not hesitate to contact me at 301-664-8698 or jschulte@ashp.org if ASHP can provide any further information or assist the agency in any way. Sincerely, Jillanne Schulte Wall, J.D. Senior Director, Health & Regulatory Policy cc: Stephanie Carlton, Chief of Staff Centers for Medicare & Medicaid Services John Brooks, Deputy Administrator and Chief Policy and Regulatory Officer Centers for Medicare & Medicaid Services Chris Klomp, Deputy Administrator and Director of the Center for Medicare Centers for Medicare & Medicaid Services American Society of Health-System Pharmacists 4500 East-West Highway, Suite 900, Bethesda, MD 20814 (866) 279-0681 ashp.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HRSA202603042) Dear Administrator Engels: On behalf of our over 65,000 pharmacist, pharmacy technician, and pharmacy student members practicing in all settings across the United States, the American Society of Health-System Pharmacists (ASHP) appreciates the opportunity to comment on the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding the 340B Rebate Model Pilot Program (the pilot program or model). ASHP continues to oppose the imposition of any rebate model in the 340B Drug Pricing Program. Payment under the 340B program has always been prospective.1 Shifting to a rebate model, even for a small number of drugs, creates serious risks to a high-functioning program and the patient services that it supports. We believe that manufacturers are using the implementation of the Inflation Reduction Act (IRA) negotiated drug pricing framework as an improper justification for seeking rebates in the 340B program. Structuring both the 340B program and the IRA negotiated pricing programs as prospective discounts would make them more efficient, more consistent with congressional intent, and less prone to manufacture abuse. 1. HRSA Must Consider Alternatives to a Rebate Model. Although we appreciate HRSAs efforts to collect detailed feedback on a rebate model, HRSA must consider alternatives. From its inception, the 340B program has operated as an upfront discount. Covered entities have relied on that program design for almost 40 years, setting up care models around it that have greatly expanded patient access to care services. Although the previously proposed rebate model pilot was explicitly not premised on addressing duplicate discounts, they are a chief manufacturer complaint and almost certainly underpin the manufacturer push for a refund model. However, covered 1 See 58 Fed. Reg. 27289, 27291 (May 7, 1993); see also 63 Fed. Reg. 35239 (June 29, 1998)(allowing a sole exception to the prospective discount for AIDs programs that are structured differently than other covered entities). ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 entities do not have a program integrity problem ample safeguards already exist to address duplicate discounts, including HRSA and manufacturer audits. If HRSA determines that these mechanisms are inadequate, a claims clearinghouse run by an independent third party could help mitigate manufacturer concerns about duplicate discounts while preserving prospective discounts. Under this arrangement, 340B covered entities would continue to receive the upfront 340B price, with any reconciliation post-payment, thereby ensuring that manufacturers bear the costs. This option would also obviate the need for manufacturer-imposed claims data requirements (e.g., the recent Eli Lilly and Novo Nordisk policies that attempt to unilaterally impose extra-statutory program requirements). As the IRA rollout demonstrates, when pharmaceutical manufacturers are given too much control over the design and implementation of a program, they will choose to delay payment obligations through a drawn-out rebate scheme leaving health care providers and their patients to suffer. Although HRSA has no authority over the MFP process, we understand that the agency is coordinating closely with CMS. We continue to urge CMS to reconsider its administratively burdensome and unworkable rebate model and institute an upfront discount (see Attachment 1). We urge HRSA to look at the unsuccessful rollout of the IRA rebate process and rethink the imposition of a rebate model for the 340B program. Both IRA Medicare discounts and 340B would be administratively simpler and less prone to manufacturer abuse if implemented as prospective discounts. II. Rebate Models Unnecessarily Increase Costs and Siphon Healthcare System Resources. If HRSA moves ahead with a rebate model over covered entities objections and in spite of evidence that a rebate model will undermine program efficacy, any model must be piloted on a small scale (i.e., voluntarily and not nationwide) and must be carefully tailored and implemented to avoid causing additional damage to providers and their patients. Any pilot program must include safeguards for covered entities and the 340B program. To accomplish this (short of abandoning the efforts to implement a rebate model, which we continue to urge), HRSA will need to provide the following guarantees to covered entities: HRSA Retains Authority for the Program: Any pilot program must ensure that no authority over program administration is ceded to manufacturers. Ongoing manufacturer efforts to systematically undercut the 340B program highlight the need to close any potential loopholes that could be used to damage the program. Provide a Guarantee of Full Cost Coverage for Covered Entities: We recognize and appreciate HRSAs previous statement that plans must assure that no additional administrative costs of running the rebate model shall be passed on to covered entities. However, assurances alone are insufficient. The previous pilot proposal included no mechanism to account for these expenses, which include costs associated with third party administrators, financing, staff time to manage 340B program changes, and potential legal fees to address denials or claims disputes. Operating what amounts to a secondary 340B program for drugs subject to the rebate model ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 will create significant financial strain at a time when many covered entities, particularly rural providers, face major financial challenges. The rollout of the Maximum Fair Price (MFP) rebates under the IRA illustrates the problems created by a rebate model. Hospitals and health systems are seeing delayed rebate and claims payments, forcing them to float purchasing and administrative costs. Our members are reporting that they are currently waiting on, collectively, millions of dollars in rebates for just the first three months of IRA. These unpaid rebate claims are in addition the costs of purchasing the drugs at a higher price (WAC versus 340B). Further, because claims issues are reported to both CMS and the manufacturers, and each claim must be reported separately, organizations must reconfigure workflows and add FTEs to cover management of the rebates. Manufacturers had almost total control over how the IRA systems were configured and yet now argue they are unworkable and require this ancillary 340B rebate model. Members have reported numerous problems with the MFP rebates, including mismatched data fields, requests for invoice pricing for all purchases (not just 340B inventory), and a lack of responsiveness from both CMS and certain manufacturers regarding these issues. Allowing manufacturers to expand these problems into the 340B environment is both unnecessary and fiscally irresponsible, especially considering the existence of a much simpler, cost-effective option - the third-party clearinghouse. Although manufacturers argue that including only IRA drugs in a pilot limits costs, hospitals will see costs across all non-340B drugs as well because they must account for two separate reimbursement processes (pilot drugs versus non-pilot 340B drugs). For any rebate pilot, HRSA must create a clear mechanism by which covered entities can submit costs and request reimbursement for all new administrative and operational costs associated with any rebate pilot. Ensure Prompt Payment and Impose Penalties for Manufacturer Noncompliance: To ensure that any pilot program is not subject to abuse, penalties for manufacturer noncompliance must be meaningful. This will require a clear definition of noncompliance with civil monetary penalties attached. HRSA must enumerate clear requirements for manufacturers to issue prompt payments (including, but not limited to, delayed rebate payments and improper claims denials), with stringent penalties for noncompliance. Specifically, HRSA should exercise its authority under (d)(1)(B)(vi) of the 340B statute and impose civil monetary penalties (CMP) for each instance of non-compliance, with interest accruing on rebates not paid within the prompt payment window. HRSA must also clarify that manufacturers have no authority to delay or deny claims. Current experience with the MFN rebate process underscores the importance of agency oversight of claims denial. At present, hospitals and other providers have reported a pattern of manufacturer noncompliance with the IRAs prompt payment requirements. Many hospitals are sitting on backlogs of 3 or more months worth of unpaid rebates in some cases, up to 50 70% of ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 rebates from certain manufacturers. Rebate payment is then conditioned on access to invoice pricing or other claims data that should not have to be provided. Hospitals have been further frustrated by the Beacon platform, which generates canned responses to queries regarding unpaid rebates, thereby requiring extensive human intervention to even determine the reasons for the claim rejection. This creates a troubling precedent for the expansion of a rebate into 340B, which would likely magnify the already significant costs of managing the IRA MFP process. Again, this could be avoided by implementing a third-party clearinghouse and maintaining upfront payment. To best ensure prompt payment, HRSA must clarify how it will resolve claims disputes. As HRSA is aware, the 340B administrative dispute resolution (ADR) process has been troubled. Given the financial stakes of the pilot, the dispute resolution process must be efficient and fair. The existing ADR process is slow and ill-equipped to address the rebate issues likely to arise under the pilot. We urge HRSA to establish a separate dispute resolution process that will allow covered entity claims to be fast-tracked. This must include, at minimum, a dedicated HRSA ombudsman or point-of-contact, as well as concrete, enforceable timelines for resolution. Further, manufacturers must be required to cover the legal fees and other administrative costs associated with delayed rebates or improper denials. Establish a Consistent Process for Claims Submission: HRSA must prohibit manufacturers from dictating the implementation of a rebate pilot. Such a permissive structure exposes covered entities to multiple data platforms and processes for rebate submission, including variation in required data fields. This is particularly problematic because some covered entities lack access to BIN and PCN data that could be required by a manufacturer. Because manufacturers can also create bespoke systems for IRA negotiated drug pricing effectuation, this raises the possibility of layering a second set of manufacturer- or drug-specific systems on covered entities. This will further increase administrative costs even beyond what we have noted above. Further, it creates serious concerns about maintaining data integrity and security, especially given recent healthcare data breaches like the one at Change Healthcare. To reduce administrative burden, HRSA should require the use of a single neutral third-party platform for data submission. This entity should have no affiliation with manufacturers (e.g., a platform such as Kalderos/Truzo should not be permitted). Doing so would offer far more control over data security standards, while providing a firewall against manufacturer incursion into sensitive claims data. Provide Objective Program Metrics: As noted above, we believe that opening the door to a rebate model will damage the 340B program, harming patients across the country. There must be objective metrics to gauge success, particularly, as if indicated in previous communications, HRSA intends to consider expanding any pilot. The fact that this determination could be largely premised on manufacturer feedback without fully engaging covered entities is alarming. ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 The consequences of such a fundamental and wholly unnecessary shift in the 340B program should be clearly documented. When evaluating any pilot for continuation, HRSA must consider the total additional costs of the program to covered entities and measure the negative consequences for patients. At minimum, the standards by which the program is evaluated should be publicly available and subject to notice and comment. We appreciate the opportunity to offer our feedback on the RFI. ASHP urges HRSA to abandon the pilot program in favor of other practical, less damaging options. No pilot program should be proposed until HRSA has time to adequately address stakeholder feedback and fully gauge the potential damage to covered entities and their patients from such a precipitous and catastrophic policy shift. Allowing manufacturers to dictate 340B programmatic requirements is misguided. We look forward to working with HRSA to identify practical policy solutions that protect the 340B program and the patients it serves. Please do not hesitate to contact me at 301-664-8698 or jschulte@ashp.org if ASHP can provide any further information or assist the agency in any way. Sincerely, Jillanne Schulte Wall, J.D. Senior Director, Health & Regulatory Policy ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 Attachment 1: ASHP Memo to CMS re: IRA Negotiated Drug Pricing Framework Mehmet Oz, M.D. Administrator Centers for Medicare & Medicaid Services U.S. Department of Health and Human Services 7500 Security Boulevard Baltimore, MD 21244-8016 RE: Request for CMS to Require Upfront Manufacturer Discounts for Maximum Fair Price Effectuation under the Inflation Reduction Act Dear Administrator Oz: For decades, the American people have been at the mercy of a healthcare system that rewards obscurity and inefficiency. Those defects especially plague the delivery of critical pharmaceutical therapies, which have become more expensive and less available to those who need them most. This Administration understands the mounting crisis facing Americans. That is why it has made reform in this area a priority. One of its chief reforms has been to ensure affordable therapies that Americans in every zip code can access. The American Society of Health-System Pharmacists (ASHP) is committed to the same reform the Administration has been working so hard to implement. Congress and President Trump are on the same page here. The Inflation Reduction Act (IRA) empowers the Centers for Medicare & Medicaid Services (CMS) to negotiate drug prices directly with manufacturers for Medicare beneficiaries and then commissions CMS to ensure that those negotiated prices serve as the Maximum Fair Price offered to beneficiaries, pharmacies, and other providers delivering the therapies. President Trump has likewise issued an Executive Order directing CMS to improve transparency in the IRAs negotiation program and seeking policy recommendations to promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans.2 The ASHP shares those goals. ASHP is the largest association of pharmacy professionals in the United States, representing 60,000 pharmacists, student pharmacists, and pharmacy technicians in all patient care settings, including hospitals, ambulatory clinics, and health-system community pharmacies. Its members are on the front lines of delivering affordable and clinically appropriate medication to the 2 Federal Register, Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First. Available at: https://www.federalregister.gov/documents/2025/04/18/2025-06837/lowering-drug-prices-by-once-again- putting-americans-first ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 American people. This makes ASHP well positioned to address the reforms that Congress and the Administration have tasked CMS with implementing. Unfortunately, pharmaceutical manufacturers have halted that progress in its tracks. They have lobbied hard for a negotiation program that leaves manufacturers in control of honoring the Maximum Fair Price. Under the manufacturer-preferred system, manufacturers can force pharmacies and other providers to pay far more than the Maximum Fair Price for the very drugs subject to CMSs price negotiations. Manufacturers may later provide pharmacies with a retrospective rebate, but that puts pharmacies at the mercy of manufacturer discretion, timing, pseudo-regulatory fiat. This is in direct conflict with President Trumps order to make the IRAs drug pricing transparent. By the time pharmacies realize the increasingly illusory benefits of the IRAs negotiation program, the damage is done, and the force of the reforms has been largely lost. ASHP submits this letter to express deep concern regarding this manufacturer-preferred system. CMS should reject that system and instead require manufacturers to apply upfront discountsnot retrospective rebatesto dispensing entities for three reasons: 1. The manufacturer-preferred system of rebates is inconsistent with the text and purpose of the IRA. CMS not only has clear statutory authority to require manufacturers to honor Maximum Fair Prices with upfront discounts, but doing so is also the only way to achieve Congresss objectives. Congress knows how to authorize CMS to use rebates. It chose not to here. 2. The manufacturer-preferred system of rebates is also inconsistent with the Administrations commitments to regulatory simplification, administrative efficiency, and pharmaceutical price transparency. Individual manufacturer rebate plans are administratively cumbersome for both CMS and providers and introduce avoidable variability in the accurate reconciliation of drug prices. 3. Finally, the manufacturer-preferred system of rebates is inconsistent with a sustainable healthcare delivery system. It directly threatens the viability of the very providers on whom the success of the IRAs negotiation program depends. Allowing manufacturers to charge pharmacies prices far above those set by CMS misallocates the statutory responsibility and shifts the cost burden away from the entities on whom Congress placed it. As explained in more detail below, the consequences of the manufacturer-preferred system of rebates are profound and inconsistent with both the Administrations and Congress goals. Congress has empowered CMS to implement a standardized, upfront discount model, and CMS should exercise that authority to realign the program with the IRAs text and purpose. Doing so will harmonize CMS policy with the Administrations deregulatory and drug-pricing transparency priorities. Most importantly, it will safeguard beneficiary access to discounted therapies. ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 I. The IRA neither Requires nor Allows Manufacturers to Saddle Pharmacies with the Cost Burden of the IRAs Drug Price Negotiation Program. A. Manufacturers are Solely Responsible for Effectuating Maximum Fair Price Section 1191(a) of the Social Security Act directs the Secretary to establish a drug price negotiation program and to enter into agreements with manufacturers of selected drugs under the program. The agreements set a Maximum Fair Price that manufacturers may charge Medicare beneficiaries and dispensers for the negotiated drugs. The IRA leaves no doubt about who is responsible for honoring, and who will benefit from, the Maximum Fair Prices: it is manufacturers who must provide access to the prices both to dispensing entities and to Medicare beneficiaries before . . . any other discount. The IRA nowhere suggests that CMS can shift that obligation to dispensing entities, nor does it provide any basis for allowing manufacturers to require that dispensing entities bear the initial cost burden of the pricing discounts. Quite the opposite. The IRA entitles dispensing entities to those pricing discountsit doesnt make them cash lenders to manufacturers. B. Rebates Are Inconsistent with Congressional Intent The manufacturers want to flip the IRAs policy objectives on their head by forcing pharmacies to pay inflated prices first and hope for rebates later. But two of Congresss principal goals were to inject price certainty and price transparency for the negotiated drugs. Rebates flunk both of those goals. And we know Congress did not want rebates because it knows very well how to authorize CMS to use rebates. The 340B Drug Pricing Program expressly tells CMS that the amount required to be paid may take into account any rebate or discount. The IRA contains no such language suggesting manufacturers may use rebates to honor a drugs Maximum Fair Price. C. CMS Has a Clear Model for Upfront Discounts in the 340B Program To be sure, Congress left the details of the IRAs drug price negotiation program to CMS, which has discretion (within limits) to establish procedures to ensure compliance with the statutes requirements. Here, CMS does not need to reinvent the wheel. Instead, it should look to the 340B Drug Pricing Programs use of upfront discounts as the model. The 340B statute has been interpreted under long-standing guidance to require prospective discounts to covered entities. Methods of providing upfront discounts under 340B are well established and dispensing entities have a long history of successfully managing separate 340B inventories and utilizing replenishment models for 340B drugs. Aligning the IRAs drug price negotiation program with the 340B program ensures uniformity, predictability, and efficiencyall things the Administration has worked hard to infuse in government. Manufacturers are already trying to exploit the current misalignment to inject rebates into the 340B program. That regressive step is most effectively rebuffed by establishing a uniform, prospective discount requirement here as well. This approach is legally sound, programmatically efficient, and fully aligned with the legislative intent of the IRA. ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 On the other hand, permitting a manufacturer-preferred system of rebates has the effect of unlawfully shifting a statutory manufacturer obligation onto providers. That contravenes both the letter and the purpose of the law. Without an express statutory directive, CMS lacks the authority to impose such a shift, and the current implementation must be amended to reflect the program Congress legislated. II. The Manufacturer-Preferred System of Rebates Is Misaligned with the Administrations Deregulatory and Price Transparency Initiatives. A. The Administrations Commitment to Deregulation and Transparency The Administration is intent on reforming the regulatory landscape in healthcare by eliminating unnecessary complexity, increasing administrative efficiency, and improving price transparency. That is why it has issued a series of Executive Orders directing federal agencies to reduce administrative burden, promote regulatory transparency, and advance policies that strengthen Medicares fiscal sustainability. Executive Order 14192, Unleashing Prosperity Through Deregulation, or the 10-for-1 Deregulatory Executive Order, obliges agencies to eliminate outdated or unduly burdensome requirements reduce the overall regulatory burden on the economy.3 Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First, further directs HHS to implement the IRAs negotiation program in a manner that improves cost savings and transparency and seeks broad policy recommendations that promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans.4 B. The Rebate Process Creates Uncertainty and Administrative Complexity Under the manufacturer-preferred system of rebates, pharmacies have no assurance on how or when they will be reimbursed. CMSs program guidance established a Medicare Transaction Facilitator to serve as the primary infrastructure for effectuating the discounts.5 CMS also plans to create a payment module to provide a clearinghouse that manufacturers may use to provide rebates to dispensing entities, but right now, manufacturers are not required to use the yet-to-be-built payment module. Manufacturers will establish their own systems, rules, and processes for every Medicare negotiated medication they manufacture.6 By permitting manufacturers to either (1) use the CMS payment module for rebates or (2) 3 Federal Register, Executive Order 14192, Unleashing Prosperity Through Deregulation. Available at: https://www.federalregister.gov/documents/2025/02/06/2025-02345/unleashing-prosperity-through- deregulation 4 Federal Register, Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First. Available at: https://www.federalregister.gov/documents/2025/04/18/2025-06837/lowering-drug-prices-by-once-again- putting-americans-first 5 Section 40.4, Medicare Drug Price Negotiation Program Final Guidance for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027 6 Section 40.4.3, Medicare Drug Price Negotiation Program Final Guidance for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027 ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 develop bespoke rebate mechanisms outside of the CMS system, manufacturers will yield immense control over the process. And one thing is certain, whatever process manufacturers use will shift the administrative burden to providers and CMS itself. If that sounds like regulations on regulations, thats because it effectively is. Manufacturers will impose complex and burdensome red tape on pharmacies that undermine the IRAs objectives at every turn. That also means that CMSs oversight responsibilities will multiply. The agency will need to evaluate and track numerous and varying rebate frameworks across all selected drugs and all participating manufacturers. This duplication of effort is unnecessary and avoidable. It adds compliance risk, consumes federal resources, and detracts from CMSs ability to focus on programmatic integrity and beneficiary outcomes. C. CMSs Regulatory Relief RFI Recognized the Excessive Burden on Providers CMSs Medicare Regulatory Relief Request for Information (RFI), issued in furtherance of Executive Order 14192, explicitly sought stakeholder input on deregulation to reduce provider burden, streamline compliance obligations, and prioritize policies that enable providers to focus on care delivery rather than administrative complexity.7 The RFI recognized that policies which require duplicative processes or impose excessive operational costs can drive providers away from federal programs and ultimately undermine patient access and health equity. The manufacturer-preferred system of rebates exemplifies exactly the kind of system CMS identified as problematic in its RFI. It creates variation where uniformity is possible and risks not only increasing overhead costs, but also deterring provider participation. D. Prospective Discounts Are the Deregulatory, Transparent Alternative A prospective discount requirement, by contrast, will eliminate dozens of redundant processes, streamline regulatory oversight, and ensure the negotiated prices are administered uniformly and transparently. CMS should take this opportunity to realign its implementation with the Administrations regulatory and policy objectives. III. An Upfront Discount Process is Needed to Ensure the IRAs Drug Price Negotiation Program Achieves the Full Range of Benefits Congress Intended A. The IRAs Drug Pricing Goals are Dependent on Dispenser Participation The IRAs drug pricing provisions reflect a congressional mandate to improve drug price affordability for Medicare beneficiaries and the federal government. The statute is intended to reduce out-of-pocket costs and overall program spending, increase transparency in drug pricing, and ensure Medicare beneficiaries have access to affordable therapies. To achieve its goals, the IRAs negotiation program depends on 7 CMS, Unleashing Prosperity Through Deregulation of the Medicare Program (Executive Order 14192)- Request for Information. Available at: https://www.cms.gov/medicare-regulatory-relief-rfi ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 widespread dispenser participation so that beneficiaries can access negotiated prices through the existing healthcare delivery system without disruption or provider attrition. As CMS itself has noted in program guidance, implementing a timely, administrable, and sustainable mechanism to deliver the Maximum Fair Price to end users is critical to avoiding access barriers.8 This model presumes seamless integration of the negotiated pricing for all stakeholders. B. The Rebate Model Threatens Dispenser Participation and Patient Access The manufacturer-preferred system of rebates frustrates that design. Allowing manufacturers to satisfy their statutory obligations through retrospective rebates introduces a fragmented, administratively complex process that delays application of the negotiated price and forces dispensers to assume up-front costs. Rather than a single, streamlined approach, the rebate model generates dozens of manufacturer- specific payment procedures, each with its own reporting requirements, timeframes, and reimbursement pathways. That is nothing but additional red tape designed to increase complexity and will result in decreased provider participation. In contrast, a standardized, prospective discount model will preserve beneficiary access, limit administrative burden, and promote statutory compliancealigning implementation with the laws underlying structure and intent. The IRAs primary drug pricing policy objective is to provide access to affordable prescription drugs to Medicare beneficiaries. As the agency has noted, [t]he law provides meaningful financial relief for millions of people with Medicare by improving access to affordable treatments and strengthening Medicare.9 But allowing manufacturers to require that dispensing entities seek retrospective reimbursement to recover discounts jeopardizes beneficiary access to these affordable drug prices. The retrospective rebate approach imposes a financial and operational burden on dispensing providers that is incompatible with the goals of the IRA. The manufacturer-preferred system of rebates drives down provider participation, particularly among rural, safety-net, and community-based providers operating on thin margins. Inconsistent reimbursement timelines jeopardize liquidity and introduce substantial financial risk. For smaller providers, that risk is too great to bear. A recent analysis published by the National Community Pharmacists Association (NCPA) demonstrates the significant financial risk facing pharmacies under the manufacturer-preferred system of rebates, including 8 Section 40.4, Medicare Drug Price Negotiation Program Final Guidance for Initial Price Applicability Year 2027 and Manufacturer Effectuation of the Maximum Fair Price in 2026 and 2027 9 CMS, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026. Available at: https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated- prices-initial-price-applicability-year-2026 ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 payment delays resulting in $11,000 weekly cashflow loss and $43,000 annual revenue loss.10 Perhaps most concerningly, a survey of NCPA members found that 93.2 percent of independent pharmacists are considering not stocking, or have already decided not to stock, one or more of the first ten Part D drugs selected for price setting.11 Those decisions are the logical consequence of prioritizing manufacturers where the IRA does not. And ultimately, Medicare beneficiaries will be denied the IRAs full benefit. Conclusion The manufacturer-preferred system of rebates jeopardizes provider stability, undermines patient access, and exceeds the agencys statutory authority. The IRA does not authorize CMS to allow manufacturers to shift the cost burden of the negotiated prices to dispensers. Allowing manufacturers to effectuate negotiated pricing through a rebate rather than a singular manufacturer-provided upfront discounted price contradicts not only the plain text and structure of the IRA, but also with the Administrations broader policy priorities, including regulatory simplification under the Executive Order 14192 and the commitment to a transparent and efficient prescription drug value chain set forth in President Trumps Executive Order 14273. An upfront discount represents the default method under comparable federal programs, aligns with the IRAs legislative design, eliminates excessive administrative processes, supports provider participation, and ensures the sustainability of the Negotiation Program. ASHP strongly urges CMS to revise its guidance and require a uniform, prospective discount model. ASHP stands ready to support CMS in effectuating this policy shift and ensuring the successful implementation of the IRAs reforms, as well as the Administrations drug pricing policy goals. Please do not hesitate to contact me at 301-664-8698 or jschulte@ashp.org if ASHP can provide any further information or assist the agency in any way. Sincerely, Jillanne Schulte Wall, J.D. Senior Director, Health & Regulatory Policy cc: 10 NCPA. (January 2025). Unpacking the Financial Impacts of Medicare Drug Price Negotiation Analysis on Pharmacy Cash Flows. Available at: 11 NCPA. (January 2025). Report for January 2025 Survey of Independent Pharmacy Owners/Managers. Available at: https://ncpa.org/sites/default/files/2025-01/1.27.2025-FinalExecSummary.NCPA_.MemberSurvey.pdf ASHP comments re: HRSA 340B Rebate Pilot April 20, 2026 Stephanie Carlton, Chief of Staff Centers for Medicare & Medicaid Services John Brooks, Deputy Administrator and Chief Policy and Regulatory Officer Centers for Medicare & Medicaid Services Chris Klomp, Deputy Administrator and Director of the Center for Medicare Centers for Medicare & Medicaid Services
HRSA-2026-0001-2392Regina Boyle · Sacramento, CA, United States2026-04-20T04:00Z13,587 chars
See attached file(s) Regina M. Boyle Attorney at Law Post Office Box 163479 Sacramento, California 95816-9479 telephone: (916) 930 - 0936 email: rboyle@cliniclaw.com April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: I am an attorney working with Federally Qualified Health Centers (FQHCs) throughout the State of California. I am writing to request that the Health Resources and Services Administration (HRSA) reconsider adoption of a 340B Rebate Model unless and until HRSA and the Centers for Medicare & Medicaid Services (CMS) take steps to ensure coordination of efforts to address the issue of duplicative discounts. The current regulatory environment addressing the non-frivolous 340B duplicate discounts concern is a free-for-all. State Medicaid Agencies, manufacturers, and CMS are all adopting overlapping and wasteful policies without consideration of making improvements to the Medicaid Exclusion File, or adopting a different unified solution that wastes as few health care dollars as possible on non-health care, administrative burdens, while ensuring that manufacturers are treated fairly by State Medicaid Agencies. As stated by the Supreme Court in Astra USA, Inc. v. Santa Clara County-- Congress made HHS administrator of both the Medicaid Drug Rebate Program and the 340B Program, the United States observed, Brief for United Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 2 States as Amicus Curiae 33-34, and [t]he interdependent nature of the two programs' requirements means that an adjudication of rights under one program must proceed with an eye towards any implications for the other, id., at 34. Far from assisting HHS, suits by 340B entities would undermine the agency's efforts to administer both Medicaid and 340B harmoniously and on a uniform, nationwide basis. [Footnote omitted.] Recognizing the County's right to proceed in court could spawn a multitude of dispersed and uncoordinated lawsuits by 340B entities. With HHS unable to hold the control rein, the risk of conflicting adjudications would be substantial. Astra USA, Inc. v. Santa Clara County, 563 U.S. 110, 120 (2011). While the Astra case involved manufacturer overcharges, overcharges are one of the three issues that are solely adjudicated by HRSA, i.e., overcharges, duplicate discounts, and the definition of eligible patients for purposes of the 340B program.1 As if to prove the Justices point, allowing State Medicaid Agencies, manufacturers, CMS, in addition to the properly authorized agency, HRSA, to adopt overlapping duplicate discount policies, has resulted in a conflicting bureaucratic mess, and a waste of health care dollars. For a rebate methodology to work, CMS would have to be involved, and would have to agree to clarify its Outpatient Drug Rule, as well as ensuring that, at least as to 340B drugs, the following was true: 1. Actual acquisition cost is defined literally i.e., the amount that the Covered Entity pays for the drug, with provision for the handling of later received rebates, so that Covered Entities are not put in a position where there are loaning money to Medicaid. 2. Require State Medicaid Agencies to wait for the collection of rebates before requiring the Covered Entity to pay the manufacturers rebate to the State Medicaid Agency, thus prohibiting the forced financing of the Medicaid Program with Health Center funds. 1 42 U.S.C. 256b(d)(3). Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 3 3. Ensure that pharmacy services are reimbursed in a manner consistent with 42 U.S.C. 1396a(bb), whether the State Medicaid Agency uses the PPS methodology or an Alternative Payment Methodology, or both. Furthermore, to avoid subjecting Covered Entities to multiple, overlapping duplicate discount avoidance methodologies, HRSA should only implement the 340B Rebate Model in States or other locations where non-HRSA duplicate discount avoidance mechanisms have been eliminated. This should be the case regardless of whether the drugs are eligible for the Rebate Model. States and manufacturers should currently be using the HRSA Medicaid Exclusion File. To the extent that stakeholders find the MEF lacking, they should engage in a dialogue with HRSA to seek appropriate modifications that do not undermine the Community Health Center Program, or force the diversion of Section 330 grant funds to third parties. While these issues may seem theoretical, they are of particular concern to California Covered Entities for the following reasons: 1. In 2009, Californias Department of Health Care Services incorrectly represented to Californias Legislature that Federal 340B law required that Covered Entities only dispense 340B drugs to their patients, and that Covered Entities were required to seek Medicaid reimbursement at the lesser of actual acquisition cost or the statutory 340B price.2 As a result, CDHCS was successful in enacting Calif. Welfare & Inst. Code 14105.46, implementing these policies. As a result, California Health Centers have experienced significantly increased administrative costs to comply with the new rule. 2. In 2016, CMS issued the Final Rule with a Comment Period associated with the Covered Outpatient Drug (COD) rule. In this Final Rule, CMS acknowledged that HRSA currently administered the 340B program, but CMS went on to erroneously interpret 42 U.S.C. 1396r-8(a)(5)(C) as requiring State Medicaid Agencies to adopt duplicate discount methodologies in their State Medicaid plans addressing the 2 Californias Department of Health Care Services represented to the Legislature that Federal rules require entities dispensing 340B purchased drugs to Medi-Cal enrollees to pass the discount on by only billing Medi- Cal the actual acquisition cost plus the dispensing fee as contained in state statute. This was a reference to the original policy adopted by HRSA, but which was retracted in 2020. Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 4 Medicaid COD rule. This erroneous interpretation of section 1396r-8(a)(5)(C) has also been asserted by Californias Department of Health Care Services as authorizing an expanded role in the administration and oversight of the 340B Program. 3. In 2017, CMS approved a California Medicaid State Plan Amendment that removed references to rebates and which clarified that the above policy required Covered Entities to charge Medicaid the lesser of the actual acquisition cost or the statutory 340B price in effect at the time the drug was dispensed. The result is that in the case of a manufacturer overcharge, Health Center funds are used to pay for a purportedly covered drug that the State reimburses at less than the literal acquisition cost. This is in addition to a forced increase in administrative costs. 4. California law effectively mandates that if a Covered Entity is overcharged by a manufacturer, thus underpaid by the State, it must challenge the States understanding of the proper 340B price in a departmental hearing within CDHCS. This would be a parallel process to the HRSA Administrative Dispute Resolution process. 5. This past December, when HRSA initially considered a Model Rebate Pilot for the 340B Program (see below for full text), Californias Department of Health Care Services (CDHCS) adopted a policy that did the following: a. FQHCs were informed that they were required to hold claims for medications included in the HRSA 340B Rebate Model Pilot Program until the manufacturer rebate has been received by the provider. b. In the event of a delay in receipt of the manufacturers rebate that exceeds six months following the date of service, the reimbursement amount would be reduced as follows: i. Payment reduced by 25% if the claim was received during the seventh through ninth month after the month of service; Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 5 ii. Payment reduced by 50% if the claim is received during the tenth through twelfth month after the month of service; and iii. No payment will be made if the claim is received after the twelfth month following the month of service. Under this policy, a delay in the manufacturers payment of a rebate, for whatever reason, may leave the Covered Entity the sole payer for the purportedly covered drug. In addition, the Covered Entity would be required to finance the cost of the covered drug pending the manufacturers payment of a rebate. CDHS has effectively shifting its rebate collection obligation to the Covered Entities, and managed to avoid paying the costs now to be borne by the Covered Entities. A significant part of the problem with this approach is that CDHCS and CMS have failed to ensure that Health Centers are reimbursed in the manner provided for in 42 U.S.C. 1396a(bb) for pharmacy. Thus there is no disincentive to adopting inefficient, duplicative or unnecessary administrative obligations, since it is only the Covered Entities, their patients, and third-party grantors or other funders who are harmed. Again, a lack of adequate coordination between CMS and HRSA regarding avoidance of duplicate discounts has thrown the program into chaos, wastefully driven up provider administrative costs, and jeopardized the privacy of safety net patient information. Because of this lack of coordination, a wide variety of entities and agencies have adopted policies purporting to address concerns about the improper claiming of duplicate discounts on 340B drugs by State Medicaid Agencies. Because these entities and agencies are uninvolved in the oversight of the Community Health Center Program, and have either little or no understanding of, or interest in advancing, the policies of the Community Health Center Program, the resulting 340B-related policies are frequently either based on an erroneous understanding of the laws administered by HRSA, or are incompatible with the efficient, cost-effective provision of health care to the medically indigent. Adoption of a 340B Rebate without, at a minimum, synching up CMS and HRSA policies with the intention of developing a harmonious, cost-effective and unified approach to Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 6 addressing duplicate discounts, would simply be ensure more waste of HRSA grant funds, the undermining of the Community Health Center Program, and thus I urge you to take the time to address this issue once and for all, and in a way that preserves the 340B and Community Health Center Programs administered by HRSA. Sincerely, LAW OFFICE OF REGINA M. BOYLE By:_______________________________ Regina M. Boyle Letter to The Honorable Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services April 20, 2026 Page No. 7 Full Text of California Department of Health Care Services 340B Rebate Policy (Dec. 11, 2025) Beginning January 1, 2026, providers must delay submission of Medi-Cal Rx and medical claims for medications included in the Health Resources and Services Administration (HRSA) 340B Rebate Model Pilot Program until the manufacturer rebate has been received by the provider. All existing Medi-Cal 340B billing policies remain in effect, including but not limited to: Billing at Actual Acquisition Cost (AAC) as defined in Welfare and Institutions Code,Section 14105.46(d): "A covered entity shall bill an amount not to exceed the entity's actual acquisition cost for the drug, as charged by the manufacturer at a price consistent with Section 256b of Title 42 of the United States Code plus the professional fee pursuant to Section 14105.45 or the dispensing fee pursuant to Section 14132.01." Using the required 340B identifiers and modifiers to prevent duplicate discounts (for example, sec 20, Basis of Cost 08, UD modifier, as applicable by claim type). Compliance with the six-month timely filling requirement following the month of service. Claims submitted to Medi-Cal and Medi-Cal Rx must reflect the net AAC after the rebate is received. Claims submitted at pre-rebate Wholesale Acquisition Cost {WAC) may result in overpayment and must be reversed and resubmitted. Failure to comply with all Medi-Cal Rx and Medi-Cal billing requirements may result in claim denials, audit findings and/or recoupments. For more information, visit the 340B_ Rebate.Model Pilot Program page of the HRSA website.
HRSA-2026-0001-2393Hartford HealthCare2026-04-20T04:00Z26,205 chars
Please see attached. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via Regulations.gov HHS Docket No. HRSA202603042 Re: Request for Information, 340B Rebate Model Pilot Program Dear Administrator Engels, Hartford HealthCare appreciates the opportunity to respond to HRSAs request for information regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Program and, if so, how such a model should be structured. Hartford HealthCare is a nonprofit health system headquartered in Hartford, CT. We participate in 340B as a covered entity through Rural Referral Center and Disproportionate Share Hospitals, and we serve a disproportionately high share of Medicaid insured, underinsured, uninsured patients and play a critical safety net role for low income, medically complex populations. We operate eighteen infusion centers, an in-house specialty pharmacy and an integrated specialty pharmacy program that supports patients receiving high-cost, clinically complex therapies, and we coordinate closely with prescribers, infusion services, and care teams to help patients start therapy on time and stay adherent. Our Bottom Line HRSA should not replace point-of-sale access to 340B pricing with a post-purchase rebate model. For decades, 340B has functioned through upfront pricing at or below the ceiling price at the time of purchase. On an annual basis, the rebate model is projected to impact approximately 22,000 individual claims, requiring hospitals to advance an estimated $89.7 million in payments to drug manufacturers. This requirement would significantly disrupt decades-long business practices under the 340B program that rely on upfront discounts and would ultimately diminish our ability to provide care to our patients. A shift to a rebate model would change when and how the ceiling price is realized and would introduce predictable friction into medication access by making the 340B price contingent on post-dispense claims submission, manufacturer processing, and the possibility of denials and disputes. Even if rebates are ultimately paid, a rebate structure shifts operational and financial risk onto covered entities. For organizations like ours that support vulnerable patients and deliver time-sensitive therapies, that risk shows up as avoidable uncertainty at the moment when clinicians and patients need predictability. Interest In Maintaining Upfront Discounts and Reliance on Point-Of-Sale Pricing HRSA asks whether stakeholders are interested in maintaining the current approach. We are. Our 340B infrastructure, inventory and purchasing workflows, compliance operations, and patient support services are built around receiving 340B pricing at the point of sale. We have reasonably relied on that longstanding operating model in staffing, budgeting, and the design of our pharmacy operations. Administrative, Operational, and Financial Concerns HRSAs RFI appropriately asks for practical details on administrative and operational lift. From our perspective, a rebate model would add a parallel claims-driven workflow on top of existing 340B operations. That lift is not limited to implementation. It would recur with each dispense subject to the model and would require sustained staffing and systems support. For our organization, the major burden categories would include new data extraction and validation processes, new exception handling and reconciliation work, new submission tracking, expanded compliance oversight tied to submission deadlines, and additional IT build and maintenance. Implementing these requirements would necessitate expanded staffing across multiple operational areas, including pharmacy operations, compliance, finance, and information technology. The substantial increase in workload related to claims data submission, rebate tracking, reconciliation, and dispute resolution would exceed our current staffing capacity, requiring the addition of fulltime personnel dedicated to these administrative functions. Absent new resources, we are particularly concerned that experienced pharmacy and revenue cycle staff would be diverted away from patientfacing servicessuch as benefits navigation, financial assistance coordination, patient education, medication adherence support, and care team communicationultimately delaying care, increasing complexity for patients, and reducing the level of support available to those with the greatest needs. We estimate that implementation and ongoing operation of a rebate model would require approximately 2.5 additional full-time employees, including two pharmacy-specific 340B/Financial Program Technicians and a part-time Financial Analyst, at an estimated annual personnel cost of $175,000. In addition to staffing, hospitals would need to invest in new vendor support or technology platforms, resulting in an estimated incremental annual cost of $75,000. Significant consulting, legal, and related expenses are also anticipated to monitor rebate adjudications and challenge determinations and denials, which we estimate at $750,000 annually. In total, these administrative and compliance-related costs are estimated at approximately $1 million per year and would be expected to increase as the rebate model expands in scope and complexity. Cash Flow Impacts and Payment Timing HRSA asks for input on cash flow impacts and whether short payment windows would mitigate those impacts. A rebate model inherently requires covered entities to purchase at higher prices and wait for repayment, tying up working capital that would otherwise support patient care and pharmacy operations. Even if HRSA requires manufacturers to pay rebates within a defined timeframe, the covered entity is still exposed during the period between purchase, dispensing, submission, and repayment. Transitioning to a 340B rebate model would create significant cashflow pressures for our hospitals, including increased reliance on lines of credit, reduced flexibility to purchase and maintain adequate drug inventory, and additional constraints driven by thin operating margins, internal cashreserve policies, and borrowing limitations. These financial pressures would directly affect patients by limiting our ability to provide timely access to medications, offer pointofsale financial assistance, and respond quickly to clinical needs. Over time, such constraints risk delaying treatment, increasing outofpocket costs, and reducing the level of care and support we are able to provide to patients who depend on consistent and affordable access to medications. HRSA should also consider that payment standards only protect covered entities if they are enforceable in practice. A pay-or-deny standard can be undermined if manufacturers can routinely delay payment by treating submissions as incomplete based on shifting or nonstandard requirements. Rebate Denials and Dispute Resolution HRSA asks whether denial guardrails should be more specific and what documentation should be required. A rebate model creates a new point in the process where access to the 340B price can be delayed or denied. Under an upfront purchase approach, the ceiling price is applied at the time of purchase. Under a rebate approach, the covered entity only realizes the 340B price after submitting information and receiving manufacturer approval. If HRSA permits claim denials, even modest denial rates would create a significant operational burden when applied across high-volume claim submissions, requiring extensive rework, follow-up, and reconciliation. From our perspective, the most likely friction points would include disputes over claim completeness and eligibility at the line-item level, inconsistent interpretation of submission requirements among covered entities, manufacturers, and vendors, and processing delays introduced by third-party platforms. These challenges would be particularly pronounced in complex, high-volume settingssuch as physician-administered drugs and hospital outpatient departmentswhere reconciliation is already resource-intensive and largely manual. Ultimately, these administrative disruptions would divert limited clinical and pharmacy resources away from patient care, increasing the risk of delays in medication access, slowing treatment timelines, and reducing the level of support available to patients who rely on timely and coordinated outpatient care. At minimum, denial grounds should be limited to a small set of clearly defined, objective circumstances tied to program rules, with standardized denial codes and standardized documentation requirements. Covered entities should have a rapid reconsideration pathway with firm timelines and a clear escalation mechanism for recurring issues or denial patterns. Data Collection, Privacy, And Security HRSA asks about data collection practices and how privacy and security concerns should be mitigated. A rebate model necessarily expands claims-level data exchange. HRSA should limit data collection to what is necessary to administer the model and should set clear privacy and security expectations, firm retention limits, and strict permitted-use limitations. Manufacturers and their vendors should not be permitted to use covered entity claims data for commercial purposes unrelated to 340B program administration. We are particularly concerned about the sensitivity of claims-level data; contractual and cybersecurity requirements for third-party vendors, increased exposure created by multiple manufacturer platforms, and operational complexity across inpatient/outpatient/specialty pharmacy settings. Required Reporting and Evaluation of Pilot Performance HRSA asks what reporting should be required and how a pilot should be evaluated. If HRSA proceeds, reporting should be standardized and HRSA-governed, with consistent definitions so comparisons are meaningful. HRSA should require enough reporting to monitor whether the model is functioning as intended and to identify systemic problems early, including payment timeliness, denial rates and reasons, and patterns of disputes or rework. Minimum Necessary Guardrails If HRSA elects to test a rebate model despite the concerns above, the pilot should be tightly scoped, time-limited, and structured so that participating covered entities are not forced to finance higher-priced purchases or absorb unpredictable operational burden simply to access the statutory 340B price. HRSA should be clear that a rebate mechanism cannot become a de facto condition on access to 340B pricing, whether through expansion in scope, informal pressure to participate, or operational rules that effectively require covered entities to adopt manufacturer-specific systems to obtain timely repayment. HRSA should establish one uniform operating standard that governs submissions, required fields, error handling, and timelines across all participating manufacturers. A pilot cannot be workable if it relies on manufacturer-by-manufacturer portals, formats, validation rules, or timelines. Without a single HRSA-defined process, covered entities will face a patchwork of requirements that multiplies implementation cost, increases error rates, and creates inconsistent access to repayment. Prompt payment must be enforceable in practice. HRSA should set a clear payment clock that begins only when a submission is complete under uniform HRSA rules and should tightly limit what can be treated as incomplete to avoid repeated resets of the clock. If a manufacturer fails to act within the required timeframe, the default should be approval and payment, not delay. HRSA should also include a defined remedy for late paymentsuch as interest or another consequence that makes the covered entity whole and creates a real incentive for compliance. If HRSA permits denials at all, denial grounds should be narrowly defined, objective, and tied directly to program rules, not to manufacturer preferences or evolving documentation demands. HRSA should require standardized denial codes and standardized documentation requirements so covered entities can correct issues quickly and avoid duplicative rework. HRSA should also establish a fast reconsideration pathway with firm timelines and an escalation mechanism for recurring issues or denial patterns. Without these guardrails, a pilot will predictably turn into ongoing disputes, delayed repayments, and significant administrative diversion away from patient care operations. Conclusion For the reasons above, Hartford HealthCare urges HRSA not to implement a rebate model under the 340B Program. If HRSA proceeds with any pilot, HRSA should adopt strict scope limits and enforceable safeguards so the pilot does not create barriers to access or shift unacceptable operational and financial risk onto covered entities. Thank you for considering our comments. Sincerely, Gerry Boisvert Vice President, Pharmacy Services Hartford HealthCare April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via Regulations.gov HHS Docket No. HRSA202603042 Re: Request for Information, 340B Rebate Model Pilot Program Dear Administrator Engels, Hartford HealthCare appreciates the opportunity to respond to HRSAs request for information regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Program and, if so, how such a model should be structured. Hartford HealthCare is a nonprofit health system headquartered in Hartford, CT. We participate in 340B as a covered entity through Rural Referral Center and Disproportionate Share Hospitals, and we serve a disproportionately high share of Medicaid insured, underinsured, uninsured patients and play a critical safety net role for low income, medically complex populations. We operate eighteen infusion centers, an in-house specialty pharmacy and an integrated specialty pharmacy program that supports patients receiving high-cost, clinically complex therapies, and we coordinate closely with prescribers, infusion services, and care teams to help patients start therapy on time and stay adherent. Our Bottom Line HRSA should not replace point-of-sale access to 340B pricing with a post-purchase rebate model. For decades, 340B has functioned through upfront pricing at or below the ceiling price at the time of purchase. On an annual basis, the rebate model is projected to impact approximately 22,000 individual claims, requiring hospitals to advance an estimated $89.7 million in payments to drug manufacturers. This requirement would significantly disrupt decades-long business practices under the 340B program that rely on upfront discounts and would ultimately diminish our ability to provide care to our patients. A shift to a rebate model would change when and how the ceiling price is realized and would introduce predictable friction into medication access by making the 340B price contingent on post-dispense claims submission, manufacturer processing, and the possibility of denials and disputes. Even if rebates are ultimately paid, a rebate structure shifts operational and financial risk onto covered entities. For organizations like ours that support vulnerable patients and deliver time-sensitive therapies, that risk shows up as avoidable uncertainty at the moment when clinicians and patients need predictability. Interest In Maintaining Upfront Discounts and Reliance on Point-Of-Sale Pricing HRSA asks whether stakeholders are interested in maintaining the current approach. We are. Our 340B infrastructure, inventory and purchasing workflows, compliance operations, and patient support services are built around receiving 340B pricing at the point of sale. We have reasonably relied on that longstanding operating model in staffing, budgeting, and the design of our pharmacy operations. Administrative, Operational, and Financial Concerns HRSAs RFI appropriately asks for practical details on administrative and operational lift. From our perspective, a rebate model would add a parallel claims-driven workflow on top of existing 340B operations. That lift is not limited to implementation. It would recur with each dispense subject to the model and would require sustained staffing and systems support. For our organization, the major burden categories would include new data extraction and validation processes, new exception handling and reconciliation work, new submission tracking, expanded compliance oversight tied to submission deadlines, and additional IT build and maintenance. Implementing these requirements would necessitate expanded staffing across multiple operational areas, including pharmacy operations, compliance, finance, and information technology. The substantial increase in workload related to claims data submission, rebate tracking, reconciliation, and dispute resolution would exceed our current staffing capacity, requiring the addition of fulltime personnel dedicated to these administrative functions. Absent new resources, we are particularly concerned that experienced pharmacy and revenue cycle staff would be diverted away from patientfacing servicessuch as benefits navigation, financial assistance coordination, patient education, medication adherence support, and care team communicationultimately delaying care, increasing complexity for patients, and reducing the level of support available to those with the greatest needs. We estimate that implementation and ongoing operation of a rebate model would require approximately 2.5 additional full-time employees, including two pharmacy-specific 340B/Financial Program Technicians and a part-time Financial Analyst, at an estimated annual personnel cost of $175,000. In addition to staffing, hospitals would need to invest in new vendor support or technology platforms, resulting in an estimated incremental annual cost of $75,000. Significant consulting, legal, and related expenses are also anticipated to monitor rebate adjudications and challenge determinations and denials, which we estimate at $750,000 annually. In total, these administrative and compliance-related costs are estimated at approximately $1 million per year and would be expected to increase as the rebate model expands in scope and complexity. Cash Flow Impacts and Payment Timing HRSA asks for input on cash flow impacts and whether short payment windows would mitigate those impacts. A rebate model inherently requires covered entities to purchase at higher prices and wait for repayment, tying up working capital that would otherwise support patient care and pharmacy operations. Even if HRSA requires manufacturers to pay rebates within a defined timeframe, the covered entity is still exposed during the period between purchase, dispensing, submission, and repayment. Transitioning to a 340B rebate model would create significant cashflow pressures for our hospitals, including increased reliance on lines of credit, reduced flexibility to purchase and maintain adequate drug inventory, and additional constraints driven by thin operating margins, internal cashreserve policies, and borrowing limitations. These financial pressures would directly affect patients by limiting our ability to provide timely access to medications, offer pointofsale financial assistance, and respond quickly to clinical needs. Over time, such constraints risk delaying treatment, increasing outofpocket costs, and reducing the level of care and support we are able to provide to patients who depend on consistent and affordable access to medications. HRSA should also consider that payment standards only protect covered entities if they are enforceable in practice. A pay-or-deny standard can be undermined if manufacturers can routinely delay payment by treating submissions as incomplete based on shifting or nonstandard requirements. Rebate Denials and Dispute Resolution HRSA asks whether denial guardrails should be more specific and what documentation should be required. A rebate model creates a new point in the process where access to the 340B price can be delayed or denied. Under an upfront purchase approach, the ceiling price is applied at the time of purchase. Under a rebate approach, the covered entity only realizes the 340B price after submitting information and receiving manufacturer approval. If HRSA permits claim denials, even modest denial rates would create a significant operational burden when applied across high-volume claim submissions, requiring extensive rework, follow-up, and reconciliation. From our perspective, the most likely friction points would include disputes over claim completeness and eligibility at the line-item level, inconsistent interpretation of submission requirements among covered entities, manufacturers, and vendors, and processing delays introduced by third-party platforms. These challenges would be particularly pronounced in complex, high-volume settingssuch as physician-administered drugs and hospital outpatient departmentswhere reconciliation is already resource-intensive and largely manual. Ultimately, these administrative disruptions would divert limited clinical and pharmacy resources away from patient care, increasing the risk of delays in medication access, slowing treatment timelines, and reducing the level of support available to patients who rely on timely and coordinated outpatient care. At minimum, denial grounds should be limited to a small set of clearly defined, objective circumstances tied to program rules, with standardized denial codes and standardized documentation requirements. Covered entities should have a rapid reconsideration pathway with firm timelines and a clear escalation mechanism for recurring issues or denial patterns. Data Collection, Privacy, And Security HRSA asks about data collection practices and how privacy and security concerns should be mitigated. A rebate model necessarily expands claims-level data exchange. HRSA should limit data collection to what is necessary to administer the model and should set clear privacy and security expectations, firm retention limits, and strict permitted-use limitations. Manufacturers and their vendors should not be permitted to use covered entity claims data for commercial purposes unrelated to 340B program administration. We are particularly concerned about the sensitivity of claims-level data; contractual and cybersecurity requirements for third-party vendors, increased exposure created by multiple manufacturer platforms, and operational complexity across inpatient/outpatient/specialty pharmacy settings. Required Reporting and Evaluation of Pilot Performance HRSA asks what reporting should be required and how a pilot should be evaluated. If HRSA proceeds, reporting should be standardized and HRSA-governed, with consistent definitions so comparisons are meaningful. HRSA should require enough reporting to monitor whether the model is functioning as intended and to identify systemic problems early, including payment timeliness, denial rates and reasons, and patterns of disputes or rework. Minimum Necessary Guardrails If HRSA elects to test a rebate model despite the concerns above, the pilot should be tightly scoped, time- limited, and structured so that participating covered entities are not forced to finance higher-priced purchases or absorb unpredictable operational burden simply to access the statutory 340B price. HRSA should be clear that a rebate mechanism cannot become a de facto condition on access to 340B pricing, whether through expansion in scope, informal pressure to participate, or operational rules that effectively require covered entities to adopt manufacturer-specific systems to obtain timely repayment. HRSA should establish one uniform operating standard that governs submissions, required fields, error handling, and timelines across all participating manufacturers. A pilot cannot be workable if it relies on manufacturer-by-manufacturer portals, formats, validation rules, or timelines. Without a single HRSA- defined process, covered entities will face a patchwork of requirements that multiplies implementation cost, increases error rates, and creates inconsistent access to repayment. Prompt payment must be enforceable in practice. HRSA should set a clear payment clock that begins only when a submission is complete under uniform HRSA rules and should tightly limit what can be treated as incomplete to avoid repeated resets of the clock. If a manufacturer fails to act within the required timeframe, the default should be approval and payment, not delay. HRSA should also include a defined remedy for late paymentsuch as interest or another consequence that makes the covered entity whole and creates a real incentive for compliance. If HRSA permits denials at all, denial grounds should be narrowly defined, objective, and tied directly to program rules, not to manufacturer preferences or evolving documentation demands. HRSA should require standardized denial codes and standardized documentation requirements so covered entities can correct issues quickly and avoid duplicative rework. HRSA should also establish a fast reconsideration pathway with firm timelines and an escalation mechanism for recurring issues or denial patterns. Without these guardrails, a pilot will predictably turn into ongoing disputes, delayed repayments, and significant administrative diversion away from patient care operations. Conclusion For the reasons above, Hartford HealthCare urges HRSA not to implement a rebate model under the 340B Program. If HRSA proceeds with any pilot, HRSA should adopt strict scope limits and enforceable safeguards so the pilot does not create barriers to access or shift unacceptable operational and financial risk onto covered entities. Thank you for considering our comments. Sincerely, Gerry Boisvert Vice President, Pharmacy Services Hartford HealthCare
HRSA-2026-0001-2394Eli Lilly and Company2026-04-20T04:00Z25,970 chars
Please see attached comment. April 20, 2026 VIA ELECTRONIC SUBMISSION Chantelle Britton Director, Ofice of Pharmacy Affairs (OPA) Ofice of Special Health Initiatives, HRSA 5600 Fishers Lane, Mail Stop 10W29 Rockville, MD 20857 Response to HRSA Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Eli Lilly and Company (Lilly) appreciates the opportunity to respond to the Request for Information (RFI) addressing HRSAs proposed 340B Rebate Model Pilot Program.1 As a member of the Pharmaceutical Researchers and Manufacturers Association of America (PhRMA), Biotechnology Innovation Organization (BIO), and National Pharmaceutical Council (NPC), Lilly supports their respective comments on the RFI and encourages HRSA to consider their input. In addition, Lilly offers the following prioritized comments and recommendations on matters of speciic interest to the company. Lilly is committed to discovering and developing innovative treatments for signiicant medical conditions, and just as important, ensuring that these medicines are available and affordable for everyone who needs them, including underinsured and uninsured patients. While the original intent of the 340B program shared this same goal of ensuring patients beneit, the program has been growing at an exponential and unsustainable pace for well over a decade largely without passing on discounts on medicines to patients. Along with this growth, weve seen irsthand how a lack of transparency and meaningful oversight has led to rampant abuse by certain covered entities. Below are just a few examples of recent 340B program abuses: An entity known as Sagebrush obtains an STD grant of $600 per year and then uses that to grant 340B eligibility to dozens of for-proit health clinics, who in turn purchase millions of dollars of drugs completely unrelated to the treatment of STDs at 340B prices.2 The combination of the product replenishment model and explosive growth of contract pharmacies has led to a system where 340B discounts are claimed without any connection to actual patients. These systems have led to absurd results, such as three commonly owned covered entities all retrospectively claiming a 340B discount on the same dispense to the same patient.3 A recent study concluded that up to 28% of all Part D prescriptions could be claimed by multiple covered entities if they employed the patient deinition upheld in Genesis.4 1 91 Fed. Reg. 7287 (Feb. 17, 2026); 91 Fed. Reg. 9632 (Feb. 26, 2026) (extension of deadline for comments on RFI to April 20, 2026). 2 See, Amgen v. Kennedy, No. 24-cv-3571 (D.D.C.). 3 Compl. 152, AbbVie v. Kennedy, No. 26-cv-1190 (D.D.C., Apr. 8, 2026), ECF No. 1. 4 BRG, 340B Patient Deinition and Implications for Duplicate Replenishment, Apr. 2026, available at https://media.thinkbrg.com/wp-content/uploads/2026/04/10141302/340B-Patient-Deinition-and- Implications-for-Duplicate-Replenishment.pdf. RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 2 of 7 While the 340B statute gives manufacturers the right to audit covered entities to address these types of abuses, covered entities openly lout these efforts. As HRSA knows, Lilly attempted to audit two covered entities but ultimately, we were forced to abandon the audits as futile given the covered entities refusal to provide documents from the HRSA-approved audit plans. Covered entities have even sued HRSA to stop audits from occurring in the irst place.5 HRSAs choice for the Prime Vendor Program, Apexus, is reported to be proiting from the program to the tune of $227 million a year at 80% proit margins and inancially encouraging its staff to increase the size of the program,6 actions that have led to a Congressional investigation.7 These are only a few examples demonstrating the abuse and misuse of the program. Against this backdrop of rampant misuse, the introduction of rebate models is a sensible solution to introduce much needed real-time transparency and oversight into the program. More directly, Lilly has long advocated for a 340B rebate model as the only practicable way to effectuate the program and comply with the numerous and growing statutory prohibitions against duplicate discounts across the Medicare and Medicaid programs.8 The problems with preventing duplicate discounts are not limited to the Inlation Reduction Acts (IRA) Maximum Fair Price (MFP) products, but have been prevalent in Medicaid for some time, particularly in Medicaid Managed Care, where HRSA has declined to issue guidance on the process for preventing duplicates, and covered entities in turn disclaimed any responsibility for preventing these duplicates. Accordingly, we strongly urge HRSA not to limit any pilot to MFP-only products and instead to include all manufacturers and all products as a solution to all statutory duplication issues. Short of including all manufacturers in the pilot, we also strongly encourage you to consider including Lilly in this pilot, for the reasons discussed in more detail in section III below. We appreciate that HRSA acknowledges the duplicate discount issue and is taking the irst steps towards attempting to resolve at least some of them through the 340B Rebate Pilot Program. Below is feedback on various aspects of the RFI from Lilly in addition to those from the above- referenced trade groups. I. A Rebate Model Is Necessary to Prevent Duplicate Discounts and Ensure Compliance with Federal Law (RFI Question 7) The single most compelling justiication for a 340B rebate model is the one that should require no justiication at all: compliance with federal law. Congress has enacted ive separate statutory prohibitions against duplicate discounts between the 340B Program and other federal drug pricing programs.9 Despite this unambiguous statutory framework, the federal government has failed 5 See, Ore. Hlth. & Sci. Univ. v. Engels, 2025 U.S. Dist. LEXIS 115494 (D.D.C. June 17, 2025). 6 NY Times, How a Company Makes Millions Off a Hospital Program Meant to Help the Poor (Jan. 15, 2015), available at https://www.nytimes.com/2025/01/15/us/340b-apexus-drugs-middleman.html. 7 See Letter from Senate HELP Committee to Christopher A. Hatwig, President, Apexus, LLC (Feb. 1, 2026), available at https://www.help.senate.gov/imo/media/doc/26-02- 01_chairman_cassidy_letter_to_apexus_inalpdf.pdf. 8 By responding to this RFI, Lilly is not conceding that HRSAs approval is necessary for a manufacturer to launch a rebate model as that issue is still under litigation. See Novartis et al. v. Kennedy, Case No. 25-5177 (D.C. Cir.). 9 42 U.S.C. 256b(a)(5)(A)(i) (Medicaid FFS); 42 U.S.C. 256b(a)(5)(A)(ii) (Medicaid Managed Care, added by ACA 2501(d)); 42 U.S.C. 1395w-3a(i)(5) (Medicare Part B Inlation Rebates); 42 U.S.C. 1395w- 114c(b)(2)(C)(ii) (Medicare Part D Inlation Rebates); 42 U.S.C. 1320f-3(c)(3) (Maximum Fair Price). RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 3 of 7 to establish effective mechanisms to enforce these prohibitionsparticularly in Medicaid Managed Care, where the problem is most acute. The result is a system in which manufacturers are required by statute to provide 340B discounts and, separately, to pay Medicaid rebates and IRA-mandated price concessions, with (as HRSA has acknowledged) no reliable mechanism to prevent the same unit of drug from being subject to both. A rebate model directly addresses this failure. When the Affordable Care Act extended the Medicaid Drug Rebate Program to Medicaid Managed Care in 2010, Congress simultaneously extended the 340B duplicate discount prohibition to the managed care context, directing the Secretary to establish a claims-level mechanism to prevent manufacturers from paying both a 340B discount and a Medicaid managed care rebate on the same unit of drug.10 Fifteen years later, no such claims-level mechanism has been established and instead the agency has deferred responsibility to state Medicaid agencies, even though the vast majority of Medicaid is now administered through managed care. The HHS Ofice of Inspector General has raised longstanding concerns about these duplicate discounts, inding that covered entities lacked adequate processes for avoiding duplicate discounts and that state Medicaid programs only relied on provider-level methods to identify duplicate discounts.11 The GAO has been equally troubled, inding in 2018 that HRSAs audits screened for duplicate discounts only in Medicaid fee-for-service, not managed care, despite managed care accounting for the majority of Medicaid prescriptions.12 In 2020, the GAO found that HRSA did not require covered entities to repay manufacturers for duplicate discounts on Medicaid managed care claims and that CMS itself conducted limited oversight of states prevention efforts.13 The GAO explicitly recommended that HRSA take greater steps to prevent and enforce the duplicate discount prohibition in Medicaid Managed Care. Rather than act on these recommendations, HRSA stopped auditing for Medicaid Managed Care duplicate discounts entirely in 2020 and did not require repayment even when duplicate discounts were identiied.14 The inancial magnitude of this enforcement vacuum is signiicant. Lillys own attempted audits underscore the indings of these federal watchdogs. Using claim level data begrudgingly provided by covered entities and matching these to Medicaid rebate claims provided by states for just two quarters, Lilly identiied more than 90,000 duplicate claims worth millions of dollars. Based on this data, Lilly attempted to audit two covered entities where the initial indings identiied hundreds of duplicate discounts for just four Lilly NDCs. Most troubling, the initial indings also discovered that one covered entity had no mechanism in place to identify Medicaid Managed Care dispenses as 340B despite having the information and a state requirement to provide it with its claim for payment, meaning that 100% of this entitys 340B dispenses to Medicaid Managed Care patients were duplicate discounts. Claims that a rebate requirement imposes new or additional administrative burdens are overstated and inaccurate. The data elements necessary are already maintained in covered entities 10 42 U.S.C. 1396r-8(a)(5)(C). 11 OIG, Contract Pharmacy Arrangements in the 340B Program (OEI-05-13-00431) (February 2014); OIG, State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates (OEI-05-14-00430) (June 2016). 12 GAO, Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement (GAO-18-480) (June 2018). 13 GAO, 340B Drug Discount Program: Oversight of the Intersection with the Medicaid Drug Rebate Program Needs Improvement (GAO-20-212) (January 2020). 14 GAO-20-212 at 2527 (inding HRSA did not require covered entities to repay manufacturers for duplicate discounts on Medicaid managed care claims). RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 4 of 7 pharmacy management systems as a routine part of their operations. Lilly knows this because most covered entities must submit this data today to payers in order to receive reimbursement. The data elements identiied in the initial Rebate Pilot noticedate of service, date prescribed, Rx number, ill number, 11-digit NDCs, quantity dispensed, prescriber ID, service provider ID, and 340B IDare standard pharmacy claim ields that covered entities generate in the ordinary course of dispensing drugs. Requiring their submission as a condition of receiving a 340B rebate imposes no new data collection burden; it simply makes data that already exists available to manufacturers for the purpose of enforcing, in real time, existing statutory requirements. II. Reconciling 340B Rebate Pilot Proposal with Existing Unapproved Rebate Models (RFI Question 7) In the RFI, HRSA reiterates its contention that 340B rebate models require agency approval15 but does not acknowledge the fact that multiple forms of rebate models are currently in existence that covered entities support, without any known HRSA approval. First, as Lilly has long argued, the current prevailing product replenishment model is effectively a rebate model. Covered entities make their initial purchases at WAC and then receive rebates in the form of 340B-priced products for future dispenses. The fact that only the initial purchase is at WAC does not change the fact that 340B replenishments are designed to make the covered entity whole for prior purchases at higher pricesi.e. a rebate.16 Wholesalers also have been operating rebate models for years without HRSA approval or manufacturer awareness.17 Generally, instead of physically replenishing inventory at pharmacies, under this process 340B purchases are replenished virtually through accounting credits/debits. According to the wholesalers, the process results in a non-inventory purchase on the 340B covered entity bill-to/ship to account and generates a credit on the pharmacys non-340B commercial account for the difference in price. These are rebates, plain and simple a post-facto issuance of a credit to account for the difference between acquisition price and the 340B price. Its also clear these programs are not inventory management systems that HRSA has generally said should not be considered rebates their key feature is that there is no physical inventory moving, but instead the 340B price is effectuated through a series of credits and rebate payments made after the fact. Troublingly, because this is a system that involves opaque, behind the scenes accounting, the 340B price is not tied to 340B utilization; instead, a 340B dispense gives rise to the existence of a credit that can be applied to any future purchase rendering it a rebate that is applied to the future sale of a different product. These models are comparable to what some manufacturers (not Lilly) have proposed launching as the 15 91 Fed. Reg. at 7288. As stated above, Lilly continues to disagree with this interpretation. 16 Note, product replenishment is not merely an inventory management model. It is a method of effectuating the 340B price itself. As the statute only permits 340B prices to be effectuated via a rebate or an upfront discount, if HRSA does not agree that product replenishment is a form of rebate it would not be permissible under the statute. Purchasing one unit at WAC, dispensing that unit to a 340B eligible patient, and later purchasing a different unit at 340B pricing to dispense to an ineligible patient does not result in an upfront discount on the actual 340B unit. 17 See, e.g., AmerisourceBergen, Inventory Synchronization Program Guide, available at https://web.archive.org/web/20240426164057/https:/www.amerisourcebergen.com/- /media/assets/amerisourcebergen/pdf/hgs-230633-isp-guide-12dec23-v2.pdf; Fruth, Inc. v. Cardinal Hlth., Inc., No. 3:23-cv-801, 2024 WL 3236314 (S.D.W.V. June 28, 2024). RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 5 of 7 340B Credit Model that HRSA opposed as an unauthorized rebate model.18 The only difference is that under the 340B Credit Model, manufacturers, HRSA, and covered entities would have actual knowledge of and visibility into the underlying transactions and could tie any credits issued to 340B utilization in a manner that facilitates the identiication of statutorily prohibited duplicate discounts. Whether its the product replenishment model or wholesaler credit model, it appears the only throughline is that HRSA permits rebate models when covered entities or other third parties create and beneit from them without actually verifying the transactionsbut not when manufacturers propose to do it transparently. Instead, HRSA has threatened to terminate a manufacturers PPA when a manufacturer, operating transparently with HRSA and covered entities, seeks to exercise their statutory right to effectuate the 340B price through a transparent, uniied rebate system. HRSA must explain why these models do not require approval as part of any RFI or alternatively how it intends to subject these models to similar HRSA approval and evaluation through pilot programs, particularly in light of the lack of transparency with which they operate. III. Need for a Rebate Model is not Limited to MFP Products (RFI Question 5) From HRSAs separate pending Information Collection Request, it appears the agency intends to only include products selected for IRA negotiation in 2026 and 2027 for participation in the 340B rebate pilot.19 Combined with the irst 340B rebate pilot being limited to drugs subject to MFP in 2026, it is clear HRSA views rebate models as a key tool for complying with the statutory prohibition on duplicate discounts in the Medicare Drug Price Negotiation Program. However, 340B rebate models are a tool that can address all prohibited duplicate discounts in one vehicle, as opposed to the current patchwork approach that has been largely ineffective. As discussed above, Medicaid duplicates, particularly Medicaid Managed Care, have been an issue for years and are only growing in number as covered entities continue to expand their 340B usage. Additionally, CMS is only currently estimating Part D inlation rebates and 340B duplicate discounts; the statute requires actual identiication and de-duplication.20 Rebate models provide a holistic solution to all duplicate discount areas, not just those with MFP. HRSA should also consider the impact on its evaluation of the pilot of only including MFP products. The MFP effectuation process itself is new and untested, having only been launched four months ago, and limiting the rebate pilot to just MFP duplicates risks muddying the waters on the source of any potential issues in that process. For example, pharmacies have already noted that there are issues with MFP refunds being delayed.21 Hospitals have also complained about MFP refunds being denied due to the claim being identiied as 340B,22 which is ironic given that these same hospitals oppose both submission of claims data and 340B rebate programs, which would ensure timely payment and accurate identiication of duplicates. In any event, the MFP refund process is 18 Sanoi Tackles 340B Abuse with Innovative Credit Model (Nov. 22, 2024), available at https://www.sanoi.us/en/sanoi-today/your-health/sanoi-tackles-340b-abuse-with-innovative-credit- model. 19 91 Fed. Reg. 9632 (Feb. 26, 2026). 20 90 Fed. Reg. 49,266, 49,740-48 (Nov. 5, 2025). 21 NCPA Asks CMS for Expedited Payments and Other Corrections to MDPNP Following Survey of Independent Pharmacies that Finds Cash Flow Problems (Feb. 27, 2026), available at https://ncpa.org/newsroom/news- releases/2026/02/27/ncpa-asks-cms-expedited-payments-and-other-corrections-mdpnp. 22 Letter from Americas Essential Hospitals to Administrator of Centers for Medicare & Medicaid Services (Mar. 5, 2026), available at https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication- Issue-Letter-to-CMS.pdf. RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 6 of 7 already subject to complaints related to 340B duplicates and limiting a 340B rebate to only MFP products risks having those pre-existing issues falsely attributed to the 340B rebate pilot. To operate an effective pilot, HRSA should consider including non-MFP manufacturers in any rebate pilot, so it can develop data based on a controlled comparison group to determine if any issues are related to the MFP process or are with the 340B rebate process. Lilly does not have any products subject to an MFP until 2028, and the agency has yet to either approve or deny our 2024 proposal to launch a cash replenishment model, and therefore including our company in a rebate pilot would allow HRSA to effectively isolate MFP and non-MFP related effectuation issues. IV. Lillys Experience Disputing Duplicate Medicaid Discounts Demonstrates Why a Rebate Model is Needed (RFI Question 5) Our experience attempting to resolve Medicaid duplicate discounts shows why a 340B rebate model is necessary and overdue. Once potential duplicates are identiied, the process of disputing with the state is cumbersome and rife with data inaccuracies. States will point to the fact that claims were not identiied as 340B in the claims submitted from the covered entity, and the covered entity will say the claims modiier was used but the Medicaid Managed Care organization stripped that information in transmitting to the state, or otherwise dispute the claims were 340B at all without supporting documentation. The lack of data transparency creates a stand-off that can last for years. A rebate model would create the data necessary on the front end to clearly and timely identify claims that were 340B and resolve much of the issues that currently plague the Medicaid rebate dispute system by allowing there to be a single source of truth on the 340B status of claims that all parties can agree to. V. Costs (Real and Perceived) of 340B Rebate Models (RFI Question 1) The primary focus of this RFI is on the purported costs to covered entities. What the RFI does not once ask about, in contrast, are the costs incurred by manufacturersboth under the current regime, and prospectively under a rebate model. The unfair and improper costs incurred by manufacturers in the current product-replenishment regime are vast, for all the reasons explained above. As for the costs to manufacturers of the rebate models, it should be noted that all rebate models proposed to date, including Lillys, would be 100% paid by manufacturers and therefore require no taxpayer funding. At a time when the Administration is focused on reducing fraud and cutting federal spending, this is an important factor, particularly because the costs of operating these models will cost manufacturers millions of dollars per year. Manufacturers incurring the cost is also an important distinction in comparing other alternatives, such as a claims clearinghouse that certain covered entities prefer. Such a model would either require taxpayer funding, or user fees requiring signiicant government resources to operate and assess. Based on experience, we have serious concerns about covered entity gamesmanship impacting the accuracy of such a model. For example, covered entities and their TPA partners are known to manipulate identiication codes and dates on current claims submissions to avoid detection; without a robust, real time enforcement process, the same issue would occur with a clearinghouse. A clearinghouse would also do nothing to address the timing issue that currently plagues duplicate discounts it would still leave manufacturers in a situation where duplicates can be discovered only after the fact, requiring them to chase repayment from either covered entities or a governmental payor. Lilly is concerned that the framing of the questions around the costs of a rebate model fails to recognize certain other realities beyond manufacturers costs. For example, the agency registers a RFI: 340B Rebate Model Pilot Program April 20, 2026 Page 7 of 7 concern with potential incremental cost but does not ask about potential savings to covered entities. For example, Lillys model will provide cash payments directly to covered entities on a weekly basis rather than waiting for product orders to accumulate. It will also provide payment directly to covered entities, rather than contract pharmacies or other partners, putting control back in the hands of the covered entities by empowering them to pay their vendors, rather than waiting for vendors to pay them. As a result, a Kalderos study has shown that covered entities could receive cash payment in a rebate even before they pay the upfront cost for the drug itself.23 IQVIAs research reached the same conclusion, and further found that cash low is either better or equal under a rebate model as compared to the product replenishment model.24 The agencys RFI also fails to address that any upfront change required to adapt the current product replenishment model is completely of the covered entitys own doing. As HRSA has admitted in court ilings25, covered entities implemented product replenishment models without HRSA approval or advance knowledge. HRSA must also consider the signiicant beneits that covered entities receive from the 340B program and not disproportionately weigh incremental costs of administrative changes against a program that generates tens of billions of dollars in revenue for covered entities. Covered entities were willing to hire speciic 340B staff and contract with TPAs for the past 15 years to maximize the program, and they can certainly repurpose those FTEs and TPAs to comply with a rebate model. Ultimately, complying with government programs of any kind requires certain costs. VI. Conclusion We appreciate HRSAs consideration of these comments, as well as those from PhRMA, BIO, and NPC, as it proceeds towards launching a 340B rebate pilot. As always, Lilly remains committed to working with HRSA and other stakeholders to ix the 340B program and believes a rebate model is a key irst step in that direction. Sincerely, Derek L. Asay Senior Vice President Government Strategy & Federal Accounts 23 Kalderos, The Impact of a Direct Discount Model (2024), available at https://gotruzo.com/wp- content/uploads/k-truzo-myth-vs-fact-04-28-2025-1640.pdf. 24 IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? (Dec. 2026), available at https://www.iqvia.com/-/media/iqvia/pdfs/us/white-paper/2025/iqvia-cash-low-impact-in-340b- white-paper-2025.pdf. 25 Def.s Mot. for Summ. J., Premier, Inc. v. HRSA, No. 24-cv-3116 (D.D.C. May 9, 2025), ECF No. 15.
HRSA-2026-0001-2395Eli Lilly and Company2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-2394
HRSA-2026-0001-2396Anonymous Anonymous2026-04-20T04:00Z190,892 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southeast Healthcare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $1.5 million from entity-owned pharmacy operations and a reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Southeast Healthcare is a comprehensive provider of mental health, chemical dependency, healthcare, and homeless services assisting diverse populations regardless of their economic status. With the belief that all people have the capacity to grow and change, we provide our services to people of all ages, cultures, races, religious preferences, genders, and sexual orientations in order 2 to enhance wellness and recovery, thereby improving families, workplaces, and communities. Southeast started our operations as a non-profit in 1978 and have evolved into a leading provider of integrated healthcare inclusive of primary and behavioral healthcare services in 8 Ohio counties. We also offer vocational services, dental services, and operate 2 in-house pharmacies. We are committed to helping our patients live longer, healthier, and more fulfilling lives, regardless of their ability to pay. The 340B program helps us order medications at a lower cost and help us to pass on those savings directly to our patients through the sliding-fee scale for qualifying patients. As a whole, Southeast Healthcare is deeply committed to treating the whole patient and trying to meet all of their healthcare and basic survival needs at an affordable price. This is only made possible through the 340B program and the money that we save from pharmaceutical drug costs that can then be used in other ways to help promote the best possible life and quality of care for our patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Southeast Healthcare in particular, this means it will impact: 14,860 patients filling over 155,000 prescriptions annually It currently costs us at least $6 million/year to run our 340B program and ensure that we are compliant with the program. This includes: o Vendor costs to be able to order, dispense, and maintain our inventory and program integrity o Employee salaries to help review our practices and maintain program integrity o Conference costs to ensure we are up to date and compliant with the program o Drug costs Our 340B Revenue helps to: o Keep drug and appointment costs at a minimum for qualifying patients o Maintain adequate staffing in the pharmacy to help promote a safe workplace for our patients o Help supplement other very important programs for our patients like clinical pharmacy services, MTM services, dentistry, medication assisted treatment 3 programs, community based programs (like outreach for the homeless population and nursing visits for patients that cannot make it in to the office), and improvement programs for patient medication adherence o And more! We are constantly looking for new ways to help innovate our patient experiences to provide the best quality of care possible. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Southeast Healthcare provided sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Southeast Healthcare anticipates needing an increase in 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We will also need extra staff to help with the new manufacturer 340B reporting requirements since we are having to create our own reports from scratch and check them regularly for correct information. We have also had many software difficulties with these programs, requiring everything to take almost double the anticipated time due to having to wait for customer support and troubleshooting on our own. We anticipate that this will cost at least an additional $100,000 in FTEs (this is a VERY conservative estimate). External Vendor Costs: Given increased complexity, Southeast Healthcare anticipates an increase of $10,000/year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate at least 1 more FTE just to handle the rebates due to time required to reconcile all of these claims and ensure we are properly paid the appropriate rebates in time to be able to keep our doors open and keep ordering life-sustaining medications for our patients. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We are personally expecting an increase in costs by >$100,000 annually to help cover the new program requirements and a loss of ~$40,000 on-hand per month to help cover those costs (due to increased drug pricing). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An extra 5 to 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. We would anticipate that this would scale exponentially as more drugs are added to the programs. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Southeast Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. This cost comes from employee salaries that are implementing the program and vendor costs to help us maintain compliance and necessary reviews of claims and rebates. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 155,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis conservatively estimated at $100,000 7 Ibid. 7 annually for staff, and an increase of spending of at least $75,000 for medications in 2026 and an increase of $320,000 in drug costs in 2027. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Since we are an independent pharmacy, we have to create all of the required reports by hand. When the MFP rebate system was introduced, we spent upwards of 20 employee hours per week since the end of November 2025 to create and implement our workflow systems (including creating accounts, creating reports, reviewing data, and attending seminars to ensure we were doing everything correctly). We would have to continue to spend at least this much time to implement the new system for 340B rebate systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We estimate that this will cost us at least $50,000 in vendor costs and employee salaries to set everything up and ensure a proper workflow to maintain compliance. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10+ hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently has 2 in-house pharmacies TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 8 counties in Ohio (Belmont, Carroll, Delaware, Franklin, Harrison, Monroe, Morrow, and Tuscarawas counties) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 10 Internal NACHC survey data 9 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Southeast Healthcare, we use the HHS Sliding Fee Scale based on a patients income and family size to determine a fair price for life-sustaining medications per month. With the 340B Rebate Model Pilot, we would possibly have to adjust prices, or reduce the number of guaranteed covered medications, to help cover overhead costs since we would have ~$40k less on hand for drug costs alone in just a 30-day period. We would also not be able to have as robust of a drug inventory due to credit limits with our vendors, and would likely have to increase the wait time for most patients prescriptions to being ready the next-day instead of same-day. This would have a huge impact on our patients due to their limited transportation opportunities either due to lack of funding for regular bus passes, limits on medical transportation services through their insurance, or the barrier of time to travel to the office in our more rural locations. Many of our patients are unable to afford general healthcare, let alone extra transportation costs due to the organization not being able to afford to keep as many life-sustaining medications on the shelves. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an up front additional $486,322.52 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends ~$657,000 to purchase these same drugs at the 340B ceiling price. This represents a 849839% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Southeast Healthcare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy (specifically focused on Hep C treatment, diabetes care, and integrative healthcare services), community nursing, MTM programs, and more. Operating Hours: We do not currently anticipate a change in our operating hours, but will most likely have to cut staffing to make up for the cost difference. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund pharmacy technician hours, case management staff, additional nursing staff, and more. This will directly increase wait times for patient appointments and prescription filling (possibly by days instead of the usual minutes). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,500+ uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments 12 are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Southeast Helathcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Southeast Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $319,302.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Southeast Healthcare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $147,115.34 in 2027 and $177,455.22 in 2028. With our drug cost increasing by this great amount, this would limit our staffing opportunities, opportunities to have drugs on hand for patients to get the same day as they are prescribed, and open us up to concerns about increased mistakes (due to decreased staffing with the same, if not increasing, demand). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and reduce spending on medication inventory (limiting the amount of medications we would be able to fill for patients the same day as their appointments). This is not a sustainable solution; the interest costs alone are estimated to be astronomicalfunds that are currently dedicated to integrated healthcare activities including clinical pharmacy focusing on diabetes and Hep C care, nursing in the community, and many more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Southeast Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to 13 provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Southeast Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $73,543.55. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 15 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Southeast Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Southeast Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Southeast Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. 16 Sincerely, Southeast Healthcare April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southeast Healthcare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $1.5 million from entity-owned pharmacy operations and a reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Southeast Healthcare is a comprehensive provider of mental health, chemical dependency, healthcare, and homeless services assisting diverse populations regardless of their economic status. With the belief that all people have the capacity to grow and change, we provide our services to people of all ages, cultures, races, religious preferences, genders, and sexual orientations in order to enhance wellness and recovery, thereby improving families, workplaces, and communities. Southeast started our operations as a non-profit in 1978 and have evolved into a leading provider of integrated healthcare inclusive of primary and behavioral healthcare services in 8 Ohio counties. We also offer vocational services, dental services, and operate 2 in-house pharmacies. We are committed to helping our patients live longer, healthier, and more fulfilling lives, regardless of their ability to pay. The 340B program helps us order medications at a lower cost and help us to pass on those savings directly to our patients through the sliding-fee scale for qualifying patients. As a whole, Southeast Healthcare is deeply committed to treating the whole patient and trying to meet all of their healthcare and basic survival needs at an affordable price. This is only made possible through the 340B program and the money that we save from pharmaceutical drug costs that can then be used in other ways to help promote the best possible life and quality of care for our patients. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Southeast Healthcare in particular, this means it will impact: 14,860 patients filling over 155,000 prescriptions annually It currently costs us at least $6 million/year to run our 340B program and ensure that we are compliant with the program. This includes: Vendor costs to be able to order, dispense, and maintain our inventory and program integrity Employee salaries to help review our practices and maintain program integrity Conference costs to ensure we are up to date and compliant with the program Drug costs Our 340B Revenue helps to: Keep drug and appointment costs at a minimum for qualifying patients Maintain adequate staffing in the pharmacy to help promote a safe workplace for our patients Help supplement other very important programs for our patients like clinical pharmacy services, MTM services, dentistry, medication assisted treatment programs, community based programs (like outreach for the homeless population and nursing visits for patients that cannot make it in to the office), and improvement programs for patient medication adherence And more! We are constantly looking for new ways to help innovate our patient experiences to provide the best quality of care possible. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Southeast Healthcare provided sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Southeast Healthcare anticipates needing an increase in 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We will also need extra staff to help with the new manufacturer 340B reporting requirements since we are having to create our own reports from scratch and check them regularly for correct information. We have also had many software difficulties with these programs, requiring everything to take almost double the anticipated time due to having to wait for customer support and troubleshooting on our own. We anticipate that this will cost at least an additional $100,000 in FTEs (this is a VERY conservative estimate). External Vendor Costs: Given increased complexity, Southeast Healthcare anticipates an increase of $10,000/year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate at least 1 more FTE just to handle the rebates due to time required to reconcile all of these claims and ensure we are properly paid the appropriate rebates in time to be able to keep our doors open and keep ordering life-sustaining medications for our patients. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We are personally expecting an increase in costs by >$100,000 annually to help cover the new program requirements and a loss of ~$40,000 on-hand per month to help cover those costs (due to increased drug pricing). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An extra 5 to 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. We would anticipate that this would scale exponentially as more drugs are added to the programs. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Southeast Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. This cost comes from employee salaries that are implementing the program and vendor costs to help us maintain compliance and necessary reviews of claims and rebates. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 155,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis conservatively estimated at $100,000 annually for staff, and an increase of spending of at least $75,000 for medications in 2026 and an increase of $320,000 in drug costs in 2027. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Since we are an independent pharmacy, we have to create all of the required reports by hand. When the MFP rebate system was introduced, we spent upwards of 20 employee hours per week since the end of November 2025 to create and implement our workflow systems (including creating accounts, creating reports, reviewing data, and attending seminars to ensure we were doing everything correctly). We would have to continue to spend at least this much time to implement the new system for 340B rebate systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We estimate that this will cost us at least $50,000 in vendor costs and employee salaries to set everything up and ensure a proper workflow to maintain compliance. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10+ hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently has 2 in-house pharmacies TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 8 counties in Ohio (Belmont, Carroll, Delaware, Franklin, Harrison, Monroe, Morrow, and Tuscarawas counties) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Southeast Healthcare, we use the HHS Sliding Fee Scale based on a patients income and family size to determine a fair price for life-sustaining medications per month. With the 340B Rebate Model Pilot, we would possibly have to adjust prices, or reduce the number of guaranteed covered medications, to help cover overhead costs since we would have ~$40k less on hand for drug costs alone in just a 30-day period. We would also not be able to have as robust of a drug inventory due to credit limits with our vendors, and would likely have to increase the wait time for most patients prescriptions to being ready the next-day instead of same-day. This would have a huge impact on our patients due to their limited transportation opportunities either due to lack of funding for regular bus passes, limits on medical transportation services through their insurance, or the barrier of time to travel to the office in our more rural locations. Many of our patients are unable to afford general healthcare, let alone extra transportation costs due to the organization not being able to afford to keep as many life-sustaining medications on the shelves. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an up front additional $486,322.52 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends ~$657,000 to purchase these same drugs at the 340B ceiling price. This represents a 849839% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Southeast Healthcare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy (specifically focused on Hep C treatment, diabetes care, and integrative healthcare services), community nursing, MTM programs, and more. Operating Hours: We do not currently anticipate a change in our operating hours, but will most likely have to cut staffing to make up for the cost difference. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund pharmacy technician hours, case management staff, additional nursing staff, and more. This will directly increase wait times for patient appointments and prescription filling (possibly by days instead of the usual minutes). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,500+ uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Southeast Helathcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Southeast Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $319,302.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Southeast Healthcare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $147,115.34 in 2027 and $177,455.22 in 2028. With our drug cost increasing by this great amount, this would limit our staffing opportunities, opportunities to have drugs on hand for patients to get the same day as they are prescribed, and open us up to concerns about increased mistakes (due to decreased staffing with the same, if not increasing, demand). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and reduce spending on medication inventory (limiting the amount of medications we would be able to fill for patients the same day as their appointments). This is not a sustainable solution; the interest costs alone are estimated to be astronomicalfunds that are currently dedicated to integrated healthcare activities including clinical pharmacy focusing on diabetes and Hep C care, nursing in the community, and many more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Southeast Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Southeast Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $73,543.55. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Southeast Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Southeast Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Southeast Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Southeast Healthcare April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southeast Healthcare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $1.5 million from entity-owned pharmacy operations and a reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Southeast Healthcare is a comprehensive provider of mental health, chemical dependency, healthcare, and homeless services assisting diverse populations regardless of their economic status. With the belief that all people have the capacity to grow and change, we provide our services to people of all ages, cultures, races, religious preferences, genders, and sexual orientations in order 2 to enhance wellness and recovery, thereby improving families, workplaces, and communities. Southeast started our operations as a non-profit in 1978 and have evolved into a leading provider of integrated healthcare inclusive of primary and behavioral healthcare services in 8 Ohio counties. We also offer vocational services, dental services, and operate 2 in-house pharmacies. We are committed to helping our patients live longer, healthier, and more fulfilling lives, regardless of their ability to pay. The 340B program helps us order medications at a lower cost and help us to pass on those savings directly to our patients through the sliding-fee scale for qualifying patients. As a whole, Southeast Healthcare is deeply committed to treating the whole patient and trying to meet all of their healthcare and basic survival needs at an affordable price. This is only made possible through the 340B program and the money that we save from pharmaceutical drug costs that can then be used in other ways to help promote the best possible life and quality of care for our patients. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Southeast Healthcare in particular, this means it will impact: 14,860 patients filling over 155,000 prescriptions annually It currently costs us at least $6 million/year to run our 340B program and ensure that we are compliant with the program. This includes: o Vendor costs to be able to order, dispense, and maintain our inventory and program integrity o Employee salaries to help review our practices and maintain program integrity o Conference costs to ensure we are up to date and compliant with the program o Drug costs Our 340B Revenue helps to: o Keep drug and appointment costs at a minimum for qualifying patients o Maintain adequate staffing in the pharmacy to help promote a safe workplace for our patients o Help supplement other very important programs for our patients like clinical pharmacy services, MTM services, dentistry, medication assisted treatment 3 programs, community based programs (like outreach for the homeless population and nursing visits for patients that cannot make it in to the office), and improvement programs for patient medication adherence o And more! We are constantly looking for new ways to help innovate our patient experiences to provide the best quality of care possible. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 4 Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 5 The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Southeast Healthcare provided sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Southeast Healthcare anticipates needing an increase in 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We will also need extra staff to help with the new manufacturer 340B reporting requirements since we are having to create our own reports from scratch and check them regularly for correct information. We have also had many software difficulties with these programs, requiring everything to take almost double the anticipated time due to having to wait for customer support and troubleshooting on our own. We anticipate that this will cost at least an additional $100,000 in FTEs (this is a VERY conservative estimate). External Vendor Costs: Given increased complexity, Southeast Healthcare anticipates an increase of $10,000/year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 6 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate at least 1 more FTE just to handle the rebates due to time required to reconcile all of these claims and ensure we are properly paid the appropriate rebates in time to be able to keep our doors open and keep ordering life-sustaining medications for our patients. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.7 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We are personally expecting an increase in costs by >$100,000 annually to help cover the new program requirements and a loss of ~$40,000 on-hand per month to help cover those costs (due to increased drug pricing). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An extra 5 to 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. We would anticipate that this would scale exponentially as more drugs are added to the programs. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Southeast Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. This cost comes from employee salaries that are implementing the program and vendor costs to help us maintain compliance and necessary reviews of claims and rebates. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 155,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis conservatively estimated at $100,000 7 Ibid. 7 annually for staff, and an increase of spending of at least $75,000 for medications in 2026 and an increase of $320,000 in drug costs in 2027. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Since we are an independent pharmacy, we have to create all of the required reports by hand. When the MFP rebate system was introduced, we spent upwards of 20 employee hours per week since the end of November 2025 to create and implement our workflow systems (including creating accounts, creating reports, reviewing data, and attending seminars to ensure we were doing everything correctly). We would have to continue to spend at least this much time to implement the new system for 340B rebate systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We estimate that this will cost us at least $50,000 in vendor costs and employee salaries to set everything up and ensure a proper workflow to maintain compliance. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10+ hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently has 2 in-house pharmacies TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 8 counties in Ohio (Belmont, Carroll, Delaware, Franklin, Harrison, Monroe, Morrow, and Tuscarawas counties) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,8 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.9 Clinic Administered Drugs: The Burden of New Systems Required 8 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 9 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.10 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 10 Internal NACHC survey data 9 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Southeast Healthcare, we use the HHS Sliding Fee Scale based on a patients income and family size to determine a fair price for life-sustaining medications per month. With the 340B Rebate Model Pilot, we would possibly have to adjust prices, or reduce the number of guaranteed covered medications, to help cover overhead costs since we would have ~$40k less on hand for drug costs alone in just a 30-day period. We would also not be able to have as robust of a drug inventory due to credit limits with our vendors, and would likely have to increase the wait time for most patients prescriptions to being ready the next-day instead of same-day. This would have a huge impact on our patients due to their limited transportation opportunities either due to lack of funding for regular bus passes, limits on medical transportation services through their insurance, or the barrier of time to travel to the office in our more rural locations. Many of our patients are unable to afford general healthcare, let alone extra transportation costs due to the organization not being able to afford to keep as many life-sustaining medications on the shelves. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an up front additional $486,322.52 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends ~$657,000 to purchase these same drugs at the 340B ceiling price. This represents a 849839% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Southeast Healthcare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy (specifically focused on Hep C treatment, diabetes care, and integrative healthcare services), community nursing, MTM programs, and more. Operating Hours: We do not currently anticipate a change in our operating hours, but will most likely have to cut staffing to make up for the cost difference. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund pharmacy technician hours, case management staff, additional nursing staff, and more. This will directly increase wait times for patient appointments and prescription filling (possibly by days instead of the usual minutes). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,500+ uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments 12 are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Southeast Helathcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Southeast Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $319,302.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Southeast Healthcare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $147,115.34 in 2027 and $177,455.22 in 2028. With our drug cost increasing by this great amount, this would limit our staffing opportunities, opportunities to have drugs on hand for patients to get the same day as they are prescribed, and open us up to concerns about increased mistakes (due to decreased staffing with the same, if not increasing, demand). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and reduce spending on medication inventory (limiting the amount of medications we would be able to fill for patients the same day as their appointments). This is not a sustainable solution; the interest costs alone are estimated to be astronomicalfunds that are currently dedicated to integrated healthcare activities including clinical pharmacy focusing on diabetes and Hep C care, nursing in the community, and many more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Southeast Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to 13 provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Southeast Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.16 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $73,543.55. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 14 Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse 15 We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Southeast Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Southeast Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Southeast Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. 16 Sincerely, Southeast Healthcare April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Southeast Healthcare, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $1.5 million from entity-owned pharmacy operations and a reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Southeast Healthcare is a comprehensive provider of mental health, chemical dependency, healthcare, and homeless services assisting diverse populations regardless of their economic status. With the belief that all people have the capacity to grow and change, we provide our services to people of all ages, cultures, races, religious preferences, genders, and sexual orientations in order to enhance wellness and recovery, thereby improving families, workplaces, and communities. Southeast started our operations as a non-profit in 1978 and have evolved into a leading provider of integrated healthcare inclusive of primary and behavioral healthcare services in 8 Ohio counties. We also offer vocational services, dental services, and operate 2 in-house pharmacies. We are committed to helping our patients live longer, healthier, and more fulfilling lives, regardless of their ability to pay. The 340B program helps us order medications at a lower cost and help us to pass on those savings directly to our patients through the sliding-fee scale for qualifying patients. As a whole, Southeast Healthcare is deeply committed to treating the whole patient and trying to meet all of their healthcare and basic survival needs at an affordable price. This is only made possible through the 340B program and the money that we save from pharmaceutical drug costs that can then be used in other ways to help promote the best possible life and quality of care for our patients. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Southeast Healthcare in particular, this means it will impact: 14,860 patients filling over 155,000 prescriptions annually It currently costs us at least $6 million/year to run our 340B program and ensure that we are compliant with the program. This includes: Vendor costs to be able to order, dispense, and maintain our inventory and program integrity Employee salaries to help review our practices and maintain program integrity Conference costs to ensure we are up to date and compliant with the program Drug costs Our 340B Revenue helps to: Keep drug and appointment costs at a minimum for qualifying patients Maintain adequate staffing in the pharmacy to help promote a safe workplace for our patients Help supplement other very important programs for our patients like clinical pharmacy services, MTM services, dentistry, medication assisted treatment programs, community based programs (like outreach for the homeless population and nursing visits for patients that cannot make it in to the office), and improvement programs for patient medication adherence And more! We are constantly looking for new ways to help innovate our patient experiences to provide the best quality of care possible. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Southeast Healthcare provided sliding fee discounts, through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Southeast Healthcare anticipates needing an increase in 1-2 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. We will also need extra staff to help with the new manufacturer 340B reporting requirements since we are having to create our own reports from scratch and check them regularly for correct information. We have also had many software difficulties with these programs, requiring everything to take almost double the anticipated time due to having to wait for customer support and troubleshooting on our own. We anticipate that this will cost at least an additional $100,000 in FTEs (this is a VERY conservative estimate). External Vendor Costs: Given increased complexity, Southeast Healthcare anticipates an increase of $10,000/year to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We anticipate at least 1 more FTE just to handle the rebates due to time required to reconcile all of these claims and ensure we are properly paid the appropriate rebates in time to be able to keep our doors open and keep ordering life-sustaining medications for our patients. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. We are personally expecting an increase in costs by >$100,000 annually to help cover the new program requirements and a loss of ~$40,000 on-hand per month to help cover those costs (due to increased drug pricing). Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An extra 5 to 10 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. We would anticipate that this would scale exponentially as more drugs are added to the programs. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Southeast Healthcare urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. At least $50,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. This cost comes from employee salaries that are implementing the program and vendor costs to help us maintain compliance and necessary reviews of claims and rebates. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 155,000+ patients, the total projected increase in expensesincluding labor, IT, and carrying costsis conservatively estimated at $100,000 annually for staff, and an increase of spending of at least $75,000 for medications in 2026 and an increase of $320,000 in drug costs in 2027. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Since we are an independent pharmacy, we have to create all of the required reports by hand. When the MFP rebate system was introduced, we spent upwards of 20 employee hours per week since the end of November 2025 to create and implement our workflow systems (including creating accounts, creating reports, reviewing data, and attending seminars to ensure we were doing everything correctly). We would have to continue to spend at least this much time to implement the new system for 340B rebate systems. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. We estimate that this will cost us at least $50,000 in vendor costs and employee salaries to set everything up and ensure a proper workflow to maintain compliance. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 10+ hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently has 2 in-house pharmacies TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 2 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in 8 counties in Ohio (Belmont, Carroll, Delaware, Franklin, Harrison, Monroe, Morrow, and Tuscarawas counties) with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Southeast Healthcare, we use the HHS Sliding Fee Scale based on a patients income and family size to determine a fair price for life-sustaining medications per month. With the 340B Rebate Model Pilot, we would possibly have to adjust prices, or reduce the number of guaranteed covered medications, to help cover overhead costs since we would have ~$40k less on hand for drug costs alone in just a 30-day period. We would also not be able to have as robust of a drug inventory due to credit limits with our vendors, and would likely have to increase the wait time for most patients prescriptions to being ready the next-day instead of same-day. This would have a huge impact on our patients due to their limited transportation opportunities either due to lack of funding for regular bus passes, limits on medical transportation services through their insurance, or the barrier of time to travel to the office in our more rural locations. Many of our patients are unable to afford general healthcare, let alone extra transportation costs due to the organization not being able to afford to keep as many life-sustaining medications on the shelves. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost an up front additional $486,322.52 per year to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends ~$657,000 to purchase these same drugs at the 340B ceiling price. This represents a 849839% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Southeast Healthcare anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as clinical pharmacy (specifically focused on Hep C treatment, diabetes care, and integrative healthcare services), community nursing, MTM programs, and more. Operating Hours: We do not currently anticipate a change in our operating hours, but will most likely have to cut staffing to make up for the cost difference. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund pharmacy technician hours, case management staff, additional nursing staff, and more. This will directly increase wait times for patient appointments and prescription filling (possibly by days instead of the usual minutes). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,500+ uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Southeast Helathcare asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Southeast Healthcare estimates its 2027 Annual Rebate Opportunity Cost to be approximately $319,302.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Southeast Healthcare estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $147,115.34 in 2027 and $177,455.22 in 2028. With our drug cost increasing by this great amount, this would limit our staffing opportunities, opportunities to have drugs on hand for patients to get the same day as they are prescribed, and open us up to concerns about increased mistakes (due to decreased staffing with the same, if not increasing, demand). Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and reduce spending on medication inventory (limiting the amount of medications we would be able to fill for patients the same day as their appointments). This is not a sustainable solution; the interest costs alone are estimated to be astronomicalfunds that are currently dedicated to integrated healthcare activities including clinical pharmacy focusing on diabetes and Hep C care, nursing in the community, and many more. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Southeast Healthcare, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Southeast Healthcare urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $73,543.55. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Southeast Healthcare strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Southeast Healthcare believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Southeast Healthcare appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. Sincerely, Southeast Healthcare
HRSA-2026-0001-2397Colorado Hospital Association2026-04-20T04:00Z9,214 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of the Colorado Hospital Association (CHA), which represents more than 100 hospitals and health systems across Colorado, we appreciate the opportunity to comment on the Health Resources and Services Administrations (HRSA) Request for Information regarding a potential 340B Rebate Model Pilot Program. CHA strongly opposes the implementation of any rebate-based mechanism within the 340B Program. The existing upfront discount model has functioned effectively for decades and is essential to enabling hospitals to stretch scarce resources, expand access to care, and meet the needs of their communities, just as Congress intended.1 A shift to a rebate model would fundamentally undermine these objectives while imposing substantial administrative, financial, and operational burdens on hospitals. A Rebate Model Would Impose Significant Administrative and Operational Burdens Hospitals have built their 340B infrastructure around an upfront discount model. This infrastructure includes staffing, compliance systems, and vendor relationships. Transitioning to a rebate system would require wholesale redesign of these systems, resulting in substantial one-time and ongoing costs across Colorado hospitals and diverting resources away from patient care. These costs would include: Significant investments in new or modified IT systems to track, submit, and reconcile rebate claims; 1 The 340B Program was intended to enable safety-net care providers to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No. 102-384, pt. 2, at 12 (1992) (Conf. Rep.); Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. at 2, 22, 2627 (D.S.C. Nov. 3, 2023) (Put simply, the purpose of the 340B program was to provide a means to make 340B entities profitable in order for those 340B entities to stretch scarce Federal resources as far as possible.). Increased reliance on third-party administrators (TPAs), including new fees for data integration and claims processing; Additional staffing to manage claims submission, monitor rebate payments, resolve disputes, and ensure compliance; Legal, audit, and consulting costs associated with implementing and maintaining a fundamentally different purchasing model. Contrary to HRSAs estimates, CHA members report that the administrative burden would be substantial and ongoing. The assertion that implementation would require only minimal additional staff time is not realistic given the complexity of claims-level tracking, reconciliation, and dispute resolution across potentially 25 high-cost drugs. Data Collection and Reporting Requirements Are Significantly Underestimated The RFI suggests that hospitals already collect and maintain the data necessary to support a rebate model. This is not accurate. While hospitals maintain 340B compliance systems, the data required for a rebate model, particularly claims-level data tied to dispensing and payer information, often resides across multiple, unintegrated systems. Hospitals would be required to: Extract and reconcile data from electronic health records, pharmacy systems, and billing platforms; Manually compile or validate data not currently captured in a centralized or standardized format; Transmit sensitive data to manufacturers or third-party platforms, raising additional privacy and security concerns. These activities would introduce new, ongoing administrative burdens that do not exist under the current upfront discount model. A Rebate Model Would Create Significant Cash Flow Challenges A rebate-based system would require hospitals to purchase drugs at full price and wait for reimbursement, effectively forcing hospitals to finance pharmaceutical manufacturers obligations under the 340B statute. This shift would: Create material cash flow disruptions, particularly for hospitals operating on thin margins; Require hospitals to maintain significantly higher cash reserves; Potentially jeopardize compliance with financial covenants, including bond requirements and liquidity thresholds; Increase financial risk in cases of delayed, denied, or disputed rebates. Even under a nominal 10-day payment window, hospitals would face meaningful financial strain. In practice, delays, disputes, and administrative errors are inevitable, further exacerbating these challenges. Patient Care and Community Services Would Be Adversely Impacted The increased administrative costs and financial uncertainty associated with a rebate model would directly reduce the resources hospitals are able to invest in patient care. Across Colorado, 340B savings support: Behavioral health services; Oncology and specialty drug access; Rural health infrastructure; Care for uninsured and underinsured patients; Community-based programs addressing social determinants of health. A rebate model would erode these investments. Hospitals may be forced to scale back services, delay capital projects, or limit access to high-cost medications that they can no longer afford to stock upfront. These impacts would be particularly severe in rural and underserved communities, where hospitals already operate under significant financial strain and are often the sole providers of critical services. Hospitals Have Strong Reliance Interests in the Upfront Discount Model Since its inception, the 340B Program has consistently operated through upfront discounts. Hospitals have reasonably relied on this structure in designing their operational, financial, and compliance frameworks. A sudden shift to a rebate model would disrupt these longstanding reliance interests, imposing significant costs without any demonstrated problem with the current system. The existence of statutory authority to implement rebates does not justify abandoning a model that has worked effectively for decades. The 340B Program Is Already Subject to Robust Oversight and Compliance Mechanisms It is important to underscore that the 340B Program already operates under a comprehensive and well- established oversight framework. Drug manufacturers have explicit statutory authority to audit covered entities for diversion and duplicate discounts, and those audits are conducted under HRSA oversight. In addition, HRSA itself regularly audits hospitals and health systems, with meaningful financial and operational consequences when compliance issues are identified. These audits are rigorous, time-intensive, and appropriately thorough. Hospitals are required to respond to detailed data requests that include documentation related to patient eligibility, prescribing providers, outpatient sites, purchasing records, Medicaid billing controls, contract pharmacy oversight, and internal compliance policies. This level of scrutiny demonstrates that hospitals are already subject to significant accountability under the current program structure. HRSA has not identified any systemic compliance failures that would justify such a fundamental restructuring of the program. Given this existing oversight, a rebate model is not necessary to enhance program integrity. Instead, it would layer on additional administrative complexity and cost without addressing any demonstrated gap in compliance or enforcement. A Rebate Model Is Not Necessary to Address Program Integrity or Deduplication HRSA has suggested that a rebate model may be useful for addressing duplicate discounts, including those related to the Medicare Drug Price Negotiation Program. However, CHA believes there are less burdensome and more effective alternatives. Hospitals are already successfully managing deduplication through existing processes and compliance mechanisms. Moreover, a neutral third-party clearinghouse would be a far more efficient and less disruptive approach to addressing any outstanding concerns. A rebate model is not only unnecessary; it would introduce new complexities and risks without solving the underlying issues. Conclusion For all of these reasons, CHA strongly urges HRSA to abandon consideration of a 340B rebate model. The costs and burdens associated with such a model would far outweigh any potential benefits and would ultimately harm the patients and communities the 340B Program is intended to serve. If HRSA nevertheless chooses to proceed, it must provide additional opportunities for stakeholder input once specific program details are developed. At present, hospitals are being asked to comment without critical information regarding program design, data requirements, dispute processes, and enforcement mechanisms. We appreciate the opportunity to provide these comments and welcome continued engagement on this important issue. Sincerely, Jeff Tieman President and CEO
HRSA-2026-0001-2398Allina Health2026-04-20T04:00Z20,640 chars
Dear Administrator Engels: On behalf of Allina Health, this letter is in response to the request for comments on the Department of Health and Human Services (HHS) Request for Information (RFI): 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. We appreciate the opportunity to comment - our letter is attached. Page 1 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Submitted electronically at http://www.regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Allina Health, this letter is in response to the request for comments on the Department of Health and Human Services (HHS) Request for Information (RFI): 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Allina Health does not support a rebate model. As explained below, any rebate mechanism will impose enormous costs and burdens on Allina Health that far outweigh any perceived benefits that might come from it. HRSA must follow the intent of the program, which prioritizes the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Allina Health has relied on for years, is the best way to fulfill that purpose of the 340B program. Allina Health, an integrated health system, is dedicated to the prevention and treatment of illness and enhancing the greater health of individuals, families, and communities throughout Minnesota and western Wisconsin. We serve our communities by providing exceptional care as we prevent illness, restore health, and provide comfort to all who entrust us with their care - regardless of race, color, national origin, sex, age, or disability. As a nonprofit health care system with 28,000 employees, Allina Health cares for patients from beginning to end-of-life through our 90+ clinics, 12 hospital campuses, 16 retail pharmacies, specialty care centers and specialty medical services providing home care, senior transitions, hospice care, and emergency medical transportation services. Page 2 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 Request For Information: 340B Rebate Model Pilot Program The RFI presents multiple questions and invites respondents to provide substantiated facts, research, and evidence in their submissions. For the purpose of estimating operational and financial impacts, Allina Health has assumed that any prospective Rebate Program would be limited to the 10 drugs previously authorized by HRSA for the original 340B Rebate Pilot Program. Should HRSA opt to expand the program to include additional medicationssuch as those approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027the administrative complexity, financial risk, and operational demands outlined below would increase significantly. Every added drug results in a greater volume of claims to submit, increased rebates to monitor and reconcile, more funds required to advance to pharmaceutical companies pending statutory discounts, heightened potential for disputes over delays and denials, and consequently, reduced resources available for Allina Health to allocate toward patient care and comprehensive health services. Administrative and Staffing Costs Under A Potential 340B Rebate Program Any rebate program would require Allina Health to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Allina Health understood that we would incur some reasonable administrative costs. Our internal staffing, program administration, compliance infrastructure, and vendor relations were designed to support an upfront discount model. Our current 340B operations are supported by a team consisting of one Program Manager, three compliance analysts, and one informatics specialist, supplemented by third-party vendor support for split-billing and contract pharmacy administration. These resources are calibrated to an upfront pricing model and are not sufficient to support a rebate-based framework. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a health system with several 340B hospitalsand far above and beyond what we are experiencing now. We strongly disagree with prior estimates suggesting minimal additional workload (e.g., two hours per week). The operational requirements of a claims-based rebate system are substantial and continuous, requiring dedicated staff with specialized expertise in pharmacy operations, finance, and compliance. Allina Health does not currently have sufficient staff to administer a rebate-based 340B program. Based on the functions described below, we anticipate the need to hire additional personnel or reallocate existing staff away from patient care and clinical support activities. Under a rebate model, we estimate: Page 3 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 One-time startup costs of approximately 1,5002,300 labor hours, driven by workflow redesign, system configuration, staff training, and vendor integration. Ongoing administrative costs equivalent to 1.52.0 full-time employees annually, reflecting the need for continuous claims submission, reconciliation, denial management, and financial oversight. These estimates are informed by our experience with other rebate-based programs, including the facilitation of the Medicare Drug Price Negotiation Programs Maximum Fair Price structure. Key ongoing operational functions would include: Claims-level rebate submission and monitoring - Preparation, validation, and submission of rebate requests for each eligible dispense, likely on a frequent cadence to mitigate cash-flow exposure. This function alone is estimated at 0.51.0 FTE annually (1,0002,000 hours). Rebate reconciliation, denial management, and appeals - Identification and resolution of unpaid or denied claims, coordination with manufacturers and vendors, and alignment with internal financial records. Estimated at 0.5 FTE annually (~1,000 hours). Finance and accounting workload - Tracking receivables, monitoring aged balances, and managing cash-flow exposure. Estimated at 300500 hours annually. Audit and compliance oversight - Maintaining claim-level documentation and responding to audits. Estimated at 200300 hours annually. Systems and Infrastructure In addition to labor costs, we anticipate increased expenditures related to IT systems, third-party vendors, legal review, training, and consulting services. Importantly, these costs would erode the financial benefits of the 340B program. Allina Healths current systems and protocols are designed to support upfront discount purchasing and do not currently capture or transmit all data elements required under a rebate model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems and would require: New or significantly modified IT infrastructure to support data extraction, claims submission, tracking, and reconciliation; Development of new interfaces with third-party administrators and manufacturers; Ongoing system maintenance and updates. We estimate approximately $200,000 in system development and implementation costs, in addition to ongoing maintenance expenses. A key challenge is that required data elements are often dispersed across multiple systems and are not currently integrated into vendor platforms. As a result, compliance would likely require significant manual intervention, increasing both cost and risk of error. This existing format is a Page 4 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 product of how the existing 340B program is structured, and further underscores how disruptive a rebate model would be to existing workflows. Data Collection and Reporting During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. Contrary to those assertions, the data required under a rebate model are not currently submitted in a standardized or comprehensive manner through existing systems. Allina Health maintains 340B participation data internally and relies on third-party vendors for split-billing and contract pharmacy administration. A rebate model would require: New processes to aggregate and validate data across multiple systems; Additional data elements not currently captured or transmitted in existing workflows; Ongoing manual processes to reconcile discrepancies. The breadth and sensitivity of the data required under a rebate model introduces significant new risks that are not present under the current 340B framework. To address privacy and security risks, any rebate model must include: Strong data-use limitations for clearinghouses and manufacturers specifying that data is only to be used for purposes of rebate qualifications; Business associate agreements (BAAs) governing data handling; Clear accountability for data, providing protections for covered entities in the event of a security breach. Payment Timing and Cash Flow Impacts A rebate model fundamentally transforms pharmaceutical participation obligations into unprecedented financial risk imposed on covered entities by requiring providers to purchase drugs at Wholesale Acquisition Cost (WAC) and await reimbursement through rebates. This effectively means that covered entities are providing drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Under our current model: Drugs are purchased at or below the 340B ceiling price; Payment terms are predictable; and Cash outflows and inflows are closely aligned. Importantly, prior assertions that the rebate in most instances will be paid before the purchase invoice from a wholesaler for the WAC amount is due are not consistent with our operational reality. Under our current wholesaler contracting structure, the vast majority of our pharmaceutical purchasesincluding both 340B and non-340B drugsare subject to Net 7 payment terms. These terms apply uniformly across our accounts and are triggered by invoice date, not by Page 5 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 dispense activity, reimbursement, or manufacturer adjudication. As a result, payment obligations are fixed and must be met regardless of whether any rebate has been processed or received. In limited cases involving specialty distributors or restricted distribution drugs - which represents a small portion of total purchasing volume - payment terms may extend to Net 30. However, these exceptions do not meaningfully offset the broader liquidity challenges introduced by a rebate model. Under a rebate framework, eligibility for the 340B discount would only be determined after the drug is dispensed, data are compiled and submitted, and the manufacturer completes its validation and adjudication process. Any delays in data acceptance, claim rejection, or dispute resolution would extend the period between initial cash outlay and rebate receipt. Even if rebates are nominally paid within a defined window (e.g., 10 days after claim submission), the total time from drug purchase to rebate receipt would routinely exceed our invoice payment obligations. Additionally, Allina Health participates in prompt-pay programs under which adherence to Net 7 payment terms generates meaningful cost-of-goods discounts from our primary wholesaler. These discounts are supported by the current chargeback system, which enables manufacturers to provide 340B pricing upfront. Transitioning to a rebate-based model would disrupt this structure. In the absence of chargebacks, wholesalers would effectively be financing inventory at WAC without manufacturer offset, and we anticipate this would result in less favorable pricing and reduced cost-of-goods discounts. Any such changes would represent a separate and material financial impact, compounding the liquidity challenges associated with delayed rebates. Therefore, a rebate model would require Allina Health to consistently front the difference between WAC and the 340B ceiling price, creating a persistent and scalable liquidity gap. This gap would be particularly acute for high-cost and specialty drugs and would introduce significant volatility into cash-flow forecasting, as rebate timing would depend on multiple external entities and processes rather than a single, predictable wholesaler invoice. Moreover, inventory management practices further exacerbate this issue. Pharmacies often purchase and hold drugs in advance of patient need, meaning that the time between acquisition and dispense may extend for days or weeks. In these scenarios, the timeline for rebate eligibility and therefore reimbursementwould be further delayed, increasing the duration of financial exposure well beyond any stated rebate payment window. For health systems operating with thin or negative margins, these changes would materially increase financial risk and could place pressure on key metrics such as days cash on hand. The cumulative effect of these factors demonstrates that a rebate model would not merely adjust Page 6 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 payment timingit would fundamentally shift financing responsibility onto covered entities in a manner that is operationally unworkable and financially unsustainable. Denials and Dispute Resolution A rebate-based approach introduces a fundamental imbalance by allowing manufacturers to control payment determinations after the point of sale, exposing covered entities to heightened financial uncertainty and dispute risk. While we fundamentally disagree with this model, any rebate model must include strict guardrails governing manufacturer denials. At a minimum: Denials should be limited to clearly defined and narrow circumstances (e.g., verified duplicate discounts). Manufacturers should be required to provide standardized, claim-level documentation supporting any denial, including key identifiers such as NPI and prescription number. A standardized dispute resolution process with defined timelines should be established. HRSA must also require public reporting of manufacturer rebate denial rates to ensure transparency and accountability by all parties. Critically, covered entities should not bear the financial burden of disputed or improperly denied claims during the adjudication process. A neutral data clearinghouse model would better allocate and distribute this risk. Duplicate Discount Prevention and Alternatives HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Allina Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Allina Health has implemented established, good-faith processes to prevent duplicate discounts across 340B, Medicaid, and MDPNP. These processes are embedded in our operational workflows and reflect ongoing coordination across multiple departments within our organization. Specifically, our organization: Implemented universal UD modifiers on all hospital claims where Medicaid is a payer, including when Medicaid is in the second or third position of responsibility; Page 7 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 Conducts routine audits of our OPAIS records to ensure alignment between listed NPIs and active billing entities, with updates made as needed; Maintains regular coordination between our 340B team, reimbursement team, and credentialing staff to identify and reconcile any changes affecting program eligibility or claim designation. Applies the 20 DK modifier on outpatient prescription claims for our owned retail pharmacies, consistent with state Medicaid carve-in requirements. Through these measures, Allina Health has developed a consistent and reliable framework to identify and prevent duplicate discounts. Importantly, these processes operate within existing claims and compliance workflows and do not require the extensive additional infrastructure contemplated under a rebate model. A rebate model is not necessary to address duplicate discount concerns and would introduce significant additional complexity. Instead, we support the use of a neutral third-party clearinghouse as a more efficient and less burdensome alternative. Adverse Impacts on Patients and Communities The cumulative effect of increased administrative costs, staffing burdens, and financial risk would directly reduce the resources available for patient care. As a result, covered entities may be forced to scale back or eliminate certain patient support programs and reassess service line offerings, particularly those with high drug costs. These impacts would disproportionately affect providers like Allina Health that serve a higher proportion of patients on Medicare and Medicaid and could reduce access to essential medications and services in the communities we serve. Our communities depend on us to be reliable partners beyond the walls of our facilities - our ability to be a trusted ally and resource, may be directly impacted if we lose the ability to capture upfront drug savings under the 340B Program. Conclusion For all of these reasons, Allina Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. Therefore, HRSA should abandon the concept altogether. If, however, HRSA chooses to move forward with this effort, it must allow Allina Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). Page 8 of 8 Allina Health Department of Public Affairs 2925 Chicago Avenue, MR 10785 Minneapolis, MN 55407-1321 On behalf of Allina Health, we appreciate your consideration of these comments and look forward to working with HRSA on this important issue. Please feel free to contact us with any questions. Sincerely, Joe Silversmith Manager, Federal Government Relations and Regulatory Affairs Allina Health
HRSA-2026-0001-2399Rochester Regional Health2026-04-20T04:00Z12,878 chars
Rochester Regional Health Public Comments 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program 100 Kings Highway South Rochester, NY 14617 ROCHESTER REGIONAL HEALTH 100 Kings Highway South, Rochester, NY 14617 April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration (HRSA) U.S. Department of Health and Human Services 5600 Fishes Lane Rockville, MD 20852 Re: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, Docket No. HRSA202514998 Dear Administrator Engels: On behalf of Rochester Regional Health (RRH), an integrated health system with safety net 340B hospitals including: Clifton Springs Hospital & Clinic, Canton-Potsdam Hospital, Gouverneur Hospital, Massena Hospital, Rochester General Hospital, United Memorial Medical Center, and Unity Hospital throughout Rochester, the Finger Lakes Region and New York States North Country, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. The answer is no. As explained below, any rebate mechanism will impose enormous costs and burdens on RRH that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Rochester Regional Health has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Rochester Regional Health has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely ROCHESTER REGIONAL HEALTH 100 Kings Highway South, Rochester, NY 14617 disputes over delays and denials, and therefore less money that RRH can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require RRH to spend significant sums on new administrative costs. When we chose to participate in the 340B program, RRH Health understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Staffing Impacts Under a Potential 340B Rebate Program. Rochester Regional does not currently have the staff needed to comply with a Rebate Program. In order to comply with the current proposals for only the limited number of drugs being proposed, RRH would be required to hire at least three additional full-time employees to manage rebates and disputes for the seven 340B hospitals within the RRH System. This would be $300k annual increase in staffing costs for salary and benefits, training and equipment, as well as the acknowledgment that healthcare staffing is already limited. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Rochester Regional Health has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. This would include financial impact of IT infrastructure with investments of over $125k per year due to needs for additional fees for a rebate portal, IT services, manual implementation within electronic medical records, and modifying arrangements with current third-party software supports. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. The 340B program is a replenishment model. This means that purchases for a claim will be after the dispensing of the medication. The rebate model stipulates that a purchase must occur on a 340B account at the WAC price for the rebate to be paid out. This can be a significant gap in timing as well as being difficult to provide. Internal compliance audits will now be time constrained with additional pressure of accurate and timely rebate submission. Additionally, full-time employees will need to manually submit data to ensure all records have been audited prior to submission. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Rochester Regional Health to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. ROCHESTER REGIONAL HEALTH 100 Kings Highway South, Rochester, NY 14617 Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. To remain compliant, the internal auditing of claims prior to submission must occur. On average this would require 14 days to complete a full months worth of data. The rebates would then be paid within 10 days after submission. This creates a 45-day lag from dispense to rebate being received. Denials will further complicate the timing delay and require additional tracking to dispute. Furthermore, RRH and entities will be forced to increase their cash on hand to cover additional drug expenses through rebate process. To cover the 10 drugs proposed in the 2026 and the additional 15 for 2027, an additional $8M cash on hand would be required at all times. Adverse Impacts of These Additional Costs and Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Rochester Regional Health will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. 340B savings are used to fund copay assistance programs, RRHs Mobile Mammography bus, home delivery services, opioid medication management programs, and assist the health system with uncompensated care expenses for programs that operate at a loss every year due to the underpayment of government payers like Medicare and Medicaid. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. RRH reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. RRH is concerned with submitting PHI data of our patients to a third party system on behalf of pharmaceutical manufacturers. The terms and conditions require health systems to take additional liability for protecting PHI. Additionally, the Beacon platform is not sufficient to provide the needs of the current rebate proposal. Beacon chat and customer service is often unable to be reached. RRH is experiencing issues ROCHESTER REGIONAL HEALTH 100 Kings Highway South, Rochester, NY 14617 through the MFP rebate process and ultimately had to put in a formal complaint regarding the Beacon software. Previous attempts to utilize the data submission of Second Sight Solutions software led to unrelated claims being discussed. This causes significant resource burdens as well as delays. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Rochester Regional Health, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. All of RRHs 340B hospitals have been audited by HRSA without any duplicate discount findings. All claims are audited to prevent duplicate discounts and any required claim identifiers are on claims at submission. For all of these reasons, Rochester Regional Health respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Rochester Regional Health and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Nichole Malec Huss VP, Government Affairs and Chief of Staff Rochester Regional Health
HRSA-2026-0001-2400(no commenter metadata)2026-04-20T04:00Z1,940 chars
See attached file(s) HRSA RFI Response Critical Access Hospital (Kansas) Thank you for the opportunity to comment on the proposed 340B rebate model. This is being submitted on behalf of Ellsworth County Medical Center located in Ellsworth, KS. As a Critical Access Hospital in Kansas, financial stability depends heavily on predictable expense patterns and disciplined monthly budgeting. Drug acquisition costs are planned carefully within narrow operating margins. Under the current 340B structure, IRA-affected medications represent a manageable upfront expense. Under a rebate model, those same drugs would require advancing more than half a million dollars annually before reimbursement, an increase of more than fifteen times current levels. For a rural hospital of our size, that increase is significant. Critical Access Hospitals do not operate with wide financial cushions. Monthly cash management must account for payroll, supply costs, contract services, and emergency fluctuations in patient volume. Increasing upfront drug purchasing requirements by this magnitude introduces volatility into an already tightly managed financial environment. Even when rebate payments are ultimately received, the timing and reconciliation process matters. Delays, discrepancies, or administrative backlogs could create short-term strain that affects operational planning and reserve management. The 340B program currently provides certainty at the time of purchase. Altering that mechanism changes how small rural hospitals forecast expenses and manage ongoing obligations. Any adjustment to the program should account for the budgeting realities of Critical Access Hospitals that serve communities with limited alternative care options. We appreciate HRSAs consideration of these concerns. Sincerely, Brandy Thornton Chief Financial Officer Ph: 785-810-1111 Fax: 785-472-5760 bthornton@ewmed.com www.ewmed.com
HRSA-2026-0001-2401Cabarrus Rowan Community Health Center2026-04-20T04:00Z126,613 chars
Please see the attached for the associated comment. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Cabarrus Rowan Community Health Centers, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: CRCHC anticipates a 24.6% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cabarrus Rowan Community Health Centers, Inc. (CRCHC) was established on June 14, 2006, with a mission to positively impact the health of our community, one patient at a time. CRCHC operates six active brick-and-mortar sites spanning four counties with both urban and rural demographics, two special populations clinics serving migrant and homeless individuals, two active mobile buses providing medical and dental services, and a newly established school-based care program in Wake County. In 2025, CRCHC served 19,381 unique patients across 60,779 total patient encounters. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Cabarrus Rowan Community Health Centers, Inc. in particular, this means it will impact: 12,538 annual 340B transactions serving 19,381 unique patients Current 340B program admin costs: $710,173.90 340B revenue is used to fund our Sliding Fee Scale program, MAC team, MAP program, and the opening of new 2026 clinic sites We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cabarrus Rowan Community Health Centers, Inc. provided $3,608,694 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Cabarrus Rowan Community Health Centers, Inc. anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Cabarrus Rowan Community Health Centers, Inc. anticipates an increase of $24,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Cabarrus Rowan Community Health Centers, Inc. estimates needing 1.5 FTE to manage rebate reporting requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cabarrus Rowan Community Health Centers, Inc. anticipates spending approximately 10 hours per week on rebate claims reporting, with annual staffing costs estimated between $50,000 and $80,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Cabarrus Rowan Community Health Centers, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $24,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 19,381 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $58,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 109 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 109 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rowan County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. A key benefit of our in-house contract pharmacy is that we offer free home delivery for all medications. Our pharmacy provides a wide range of services at no additional cost, including medication synchronization, blister packaging, insurance assessments, and chronic care management. Our goal is to ensure patients have a seamless experience with their medications, removing barriers to adherence for our most vulnerable patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ $1,757,639.60 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $26,250.00 a month to purchase these same drugs at the 340B ceiling price. This represents a 550% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cabarrus Rowan Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Medication Assistance Program (MAP). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,477 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cabarrus Rowan Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cabarrus Rowan Community Health Centers, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,757,639.60. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cabarrus Rowan Community Health Centers, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by ~$150,000.00 per month. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our line of credit with wholesalers and take out a loan. This is not a sustainable solution; the interest costs alone are estimated to be $143,241.51 annuallyfunds that are currently dedicated to hiring additional providers, expanding our OB/womens health program, and launching a weight loss clinic. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cabarrus Rowan Community Health Centers, Inc. , the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Cabarrus Rowan Community Health Centers, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $87,881.98. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Cabarrus Rowan Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cabarrus Rowan Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cabarrus Rowan Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ritchie Glaspy, CCO, rglaspy@crchc.org. Sincerely, Don Holloman Cabarrus Rowan Community Health Centers, Inc. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Cabarrus Rowan Community Health Centers, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: CRCHC anticipates a 24.6% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cabarrus Rowan Community Health Centers, Inc. (CRCHC) was established on June 14, 2006, with a mission to positively impact the health of our community, one patient at a time. CRCHC operates six active brick-and-mortar sites spanning four counties with both urban and rural demographics, two special populations clinics serving migrant and homeless individuals, two active mobile buses providing medical and dental services, and a newly established school-based care program in Wake County. In 2025, CRCHC served 19,381 unique patients across 60,779 total patient encounters. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Cabarrus Rowan Community Health Centers, Inc. in particular, this means it will impact: 12,538 annual 340B transactions serving 19,381 unique patients Current 340B program admin costs: $710,173.90 340B revenue is used to fund our Sliding Fee Scale program, MAC team, MAP program, and the opening of new 2026 clinic sites We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cabarrus Rowan Community Health Centers, Inc. provided $3,608,694 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Cabarrus Rowan Community Health Centers, Inc. anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Cabarrus Rowan Community Health Centers, Inc. anticipates an increase of $24,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cabarrus Rowan Community Health Centers, Inc. estimates needing 1.5 FTE to manage rebate reporting requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cabarrus Rowan Community Health Centers, Inc. anticipates spending approximately 10 hours per week on rebate claims reporting, with annual staffing costs estimated between $50,000 and $80,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Cabarrus Rowan Community Health Centers, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $24,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 19,381 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $58,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 109 pharmacies to increase access to affordable medications. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 109 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rowan County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. A key benefit of our in-house contract pharmacy is that we offer free home delivery for all medications. Our pharmacy provides a wide range of services at no additional cost, including medication synchronization, blister packaging, insurance assessments, and chronic care management. Our goal is to ensure patients have a seamless experience with their medications, removing barriers to adherence for our most vulnerable patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ $1,757,639.60 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $26,250.00 a month to purchase these same drugs at the 340B ceiling price. This represents a 550% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cabarrus Rowan Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Medication Assistance Program (MAP). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,477 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cabarrus Rowan Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 10 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cabarrus Rowan Community Health Centers, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,757,639.60. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cabarrus Rowan Community Health Centers, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by ~$150,000.00 per month. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our line of credit with wholesalers and take out a loan. This is not a sustainable solution; the interest costs alone are estimated to be $143,241.51 annuallyfunds that are currently dedicated to hiring additional providers, expanding our OB/womens health program, and launching a weight loss clinic. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cabarrus Rowan Community Health Centers, Inc. , the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cabarrus Rowan Community Health Centers, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $87,881.98. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 12 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is 13 not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Cabarrus Rowan Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cabarrus Rowan Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cabarrus Rowan Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ritchie Glaspy, CCO, rglaspy@crchc.org. Sincerely, Don Holloman Cabarrus Rowan Community Health Centers, Inc. April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Cabarrus Rowan Community Health Centers, Inc., I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: CRCHC anticipates a 24.6% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Cabarrus Rowan Community Health Centers, Inc. (CRCHC) was established on June 14, 2006, with a mission to positively impact the health of our community, one patient at a time. CRCHC operates six active brick-and-mortar sites spanning four counties with both urban and rural demographics, two special populations clinics serving migrant and homeless individuals, two active mobile buses providing medical and dental services, and a newly established school-based care program in Wake County. In 2025, CRCHC served 19,381 unique patients across 60,779 total patient encounters. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three 2 decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Cabarrus Rowan Community Health Centers, Inc. in particular, this means it will impact: 12,538 annual 340B transactions serving 19,381 unique patients Current 340B program admin costs: $710,173.90 340B revenue is used to fund our Sliding Fee Scale program, MAC team, MAP program, and the opening of new 2026 clinic sites We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, 6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Cabarrus Rowan Community Health Centers, Inc. provided $3,608,694 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Cabarrus Rowan Community Health Centers, Inc. anticipates needing 1.5 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Cabarrus Rowan Community Health Centers, Inc. anticipates an increase of $24,000 in costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. 5 According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Cabarrus Rowan Community Health Centers, Inc. estimates needing 1.5 FTE to manage rebate reporting requirements. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Cabarrus Rowan Community Health Centers, Inc. anticipates spending approximately 10 hours per week on rebate claims reporting, with annual staffing costs estimated between $50,000 and $80,000. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 10 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Cabarrus Rowan Community Health Centers, Inc. urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $24,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 19,381 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $58,000 annually. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 109 pharmacies to increase access to affordable medications. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 109 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Rowan County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 7 A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. A key benefit of our in-house contract pharmacy is that we offer free home delivery for all medications. Our pharmacy provides a wide range of services at no additional cost, including medication synchronization, blister packaging, insurance assessments, and chronic care management. Our goal is to ensure patients have a seamless experience with their medications, removing barriers to adherence for our most vulnerable patients. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 8 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 9 referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ $1,757,639.60 annually to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $26,250.00 a month to purchase these same drugs at the 340B ceiling price. This represents a 550% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Cabarrus Rowan Community Health Centers, Inc. anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our Medication Assistance Program (MAP). Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 2,477 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Cabarrus Rowan Community Health Centers, Inc. asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 10 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Cabarrus Rowan Community Health Centers, Inc. estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,757,639.60. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Cabarrus Rowan Community Health Centers, Inc. estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by ~$150,000.00 per month. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to increase our line of credit with wholesalers and take out a loan. This is not a sustainable solution; the interest costs alone are estimated to be $143,241.51 annuallyfunds that are currently dedicated to hiring additional providers, expanding our OB/womens health program, and launching a weight loss clinic. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Cabarrus Rowan Community Health Centers, Inc. , the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Cabarrus Rowan Community Health Centers, Inc. urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 11 volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $87,881.98. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions 12 CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is 13 not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Cabarrus Rowan Community Health Centers, Inc. strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Cabarrus Rowan Community Health Centers, Inc. believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Cabarrus Rowan Community Health Centers, Inc. appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Ritchie Glaspy, CCO, rglaspy@crchc.org. Sincerely, Don Holloman Cabarrus Rowan Community Health Centers, Inc.
HRSA-2026-0001-2402Centro San Vicente2026-04-20T04:00Z4,921 chars
Chantelle Britton, Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Centro San Vicente, I would like to thank the Health Resources and Services Administration (HRSA) for the opportunity to comment on the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. Centro San Vicente family health centers are federally funded, nonprofit, community health clinics that provide a comprehensive range of health services to ensure quality, compassionate, accessible healthcare. The health and well-being of patients and community are promoted through direct services, training, education, outreach and advocacy. The health center was opened in 1988 to provide accessible and affordable medical care and services to the underserved patients of El Paso to include medical care, health education, counseling, dental care, x-ray, pharmacy and laboratory services. There were millions in sliding fee discounts provided for 2025 alone. Utilization of 340B Savings Centro San Vicente utilizes 340B savings in the following ways: Patient Prescription Discount Program Sliding Fee discounts programs for medical services Ambulatory and Clinical Pharmacy Services to include chronic disease states such as hypertension and diabetes. Prescriptions for patients in transitional facilities MAT (Medication Assisted Treatment)for patients that cannot afford treatment 4,938 Transition Prescriptions given free of charges. 191 MAT Prescriptions given free of charge 40,689 Prescriptions filled on prescription discount program 7,649 Patients received sliding fee discounts Current Operations Costs of 340B Program 110,932 340B transactions/ 13,667 for 2025 Costs to run pharmacy/340 B is over $7M. Estimated Financial Impact of Rebate Model Staffing Impact: Centro San Vicente anticipates needing at least 2 additional FTE, costing our organization an estimated $150K in additional costs. External Vendor Costs: Given increased complexity, Centro San Vicente anticipates an increase of $20,000 to costs for external support vendors. Based on our organizations data, we estimate it would cost $3.9M to purchase these 10 drugs under the proposed rebate model for the year. Currently, our organization only spends $180k per year to purchase these same drugs at the 340B ceiling price. This represents an upfront increase in capital required that is 22 times higher for procurement. Total Cost: For our CHC, which serves 13,667 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $8.4M annually Given our current volume of the 10 selected drugs, even a conservative 5% denial rate would result in a net annual loss of $420K. We calculate the change in our total net savings to our 340B program to be -$3.8M before rebates are received including the decrease in MFP reimbursement for insured patients. Health Center Impacts We do not currently utilize loans and operate on a $3M reserve. If this rebate program goes into effect it would use what we currently have on reserve and we would essentially have no liquidity. Denied rebates would be detrimental to our health center as we are already having to pay $3.9M upfront to purchase medications. This amount is more than what we have on reserves for our health center operations. There would be a need to hire at least 2 FTEs which would increase operational burden by $150K in addition to the $3.9M worth of inventory that we previously purchased for 180K. The implementation of rebate model may make MFP meds difficult to offer to cash paying patients. Conclusion Centro San Vicente strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Centro San Vicente believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Centro San Vicente appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue.
HRSA-2026-0001-2403LifeSpring Health Sytems2026-04-20T04:00Z28,392 chars
I am submitting the following comments on behalf of LifeSpring Health Systems, a Community Health Center (CH) that has participated in the 340B Drug Pricing Program for over five years. As a safety-net provider, our mission is to ensure access to comprehensive, high quality care for all patients, regardless of their ability to pay. The 340B program is essential to fulfilling that mission. Opening Position Statement We do not support the implementation of a rebate-based model within the 340B program. Such a model is inconsistent with the statutory design of upfront discounts and would introduce financial and operational risks that directly undermine patient access. Patient Impact and Statutory Intent The core intent of the 340B program, as established by Congress, is to enable Covered Entities to stretch scarce federal resources in order to: Expand services to vulnerable populations Serve a greater number of uninsured and low-income patients Provide more comprehensive, integrated care Our 340B savings are fully reinvested into expanding access to care in underserved communities. Specifically, through 340B savings, our organization has: Opened two new FQHC clinics in rural, medically underserved areas Established a new high school-based clinic in a rural community Sustained operations and retained critical staff despite declining Medicaid and Medicare reimbursement rates Continued to provide care amid a significant increase in uninsured and unreimbursed patient services These investments directly align with Congressional intent by expanding access points for care and ensuring that vulnerable populations receive needed services. Without 340B, these access points would not exist, and many patients would face substantial barriers to receiving care. Administrative Burden and Operational Impact Significant Administrative Complexity Most FQHC covered entities operate with a single dedicated 340B program manager responsible for all aspects of program compliance, oversight, and operations. Under a rebate based model, this role would expand significantly to include: Identifying eligible claims through a TPA or internal pharmacy system Extracting and formatting claims data for submission Submitting claims to multiple manufacturer operated data platforms Tracking claim status, including approvals and denials Managing appeals or disputes for denied claims Reconciling previously identified 340B claims requiring credit and rebill processes with wholesalers This introduces multiple new workflow steps across separate systems, many of which are not integrated with existing 340B infrastructure, and would be a duplication of effort. This process is not only operationally complex but unsustainable within current staffing models, and would likely require: Investment in additional software solutions Increased reliance on third-party vendors Hiring additional staff dedicated solely to rebate administration and monitoring Financial Impact of Administrative Burden Currently, approximately 72.5% of our 340B savings are already allocated to drug acquisition costs and program administration. (These estimates are based on our current 340B program structure, including the use of third-party administration and existing compliance workflows.) We estimate that implementation of a rebate model would increase operational costs by an additional 1520%, significantly reducing the savings available for reinvestment into patient care. Cash Flow Disruption and Financial Risk A rebate-based model fundamentally shifts the program from upfront discounts to retrospective reimbursement, introducing delays and uncertainty in accessing 340B savings. Delayed or denied rebates would directly impact our ability to: Pay medication wholesalers and 340B vendors in a timely manner Avoid late fees or supply disruptions Maintain patient assistance and outreach programs Sustain clinical services supported by 340B savings For safety-net providers operating on narrow margins, even short delays in reimbursement can result in material cash flow shortages. Increased Reliance on Advanced Data Systems Implementation of a rebate model would require expanded use of: Third-party administrators (TPAs) Manufacturer-required data platforms Additional reporting and validation systems These requirements would increase costs associated with: Vendor contracts Data extraction and reporting System integration and maintenance Importantly, these costs would be incurred without the benefit of upfront 340B discounts, further straining limited resources. PLEASE SEE THE ATTACHED DOCUMENT FOR FULL COMMENTS LifeSpring Health Systems, Jeffersonville, Indiana I am submitting the following comments on behalf of LifeSpring Health Systems, a Community Health Center (CH) that has participated in the 340B Drug Pricing Program for over five years. As a safety-net provider, our mission is to ensure access to comprehensive, high quality care for all patients, regardless of their ability to pay. The 340B program is essential to fulfilling that mission. Opening Position Statement We do not support the implementation of a rebate-based model within the 340B program. Such a model is inconsistent with the statutory design of upfront discounts and would introduce financial and operational risks that directly undermine patient access. Patient Impact and Statutory Intent The core intent of the 340B program, as established by Congress, is to enable Covered Entities to stretch scarce federal resources in order to: Expand services to vulnerable populations Serve a greater number of uninsured and low-income patients Provide more comprehensive, integrated care Our 340B savings are fully reinvested into expanding access to care in underserved communities. Specifically, through 340B savings, our organization has: Opened two new FQHC clinics in rural, medically underserved areas Established a new high school-based clinic in a rural community Sustained operations and retained critical staff despite declining Medicaid and Medicare reimbursement rates Continued to provide care amid a significant increase in uninsured and unreimbursed patient services These investments directly align with Congressional intent by expanding access points for care and ensuring that vulnerable populations receive needed services. Without 340B, these access points would not exist, and many patients would face substantial barriers to receiving care. Administrative Burden and Operational Impact Significant Administrative Complexity Most FQHC covered entities operate with a single dedicated 340B program manager responsible for all aspects of program compliance, oversight, and operations. Under a rebate based model, this role would expand significantly to include: Identifying eligible claims through a TPA or internal pharmacy system Extracting and formatting claims data for submission Submitting claims to multiple manufacturer operated data platforms Tracking claim status, including approvals and denials Managing appeals or disputes for denied claims Reconciling previously identified 340B claims requiring credit and rebill processes with wholesalers This introduces multiple new workflow steps across separate systems, many of which are not integrated with existing 340B infrastructure, and would be a duplication of effort. This process is not only operationally complex but unsustainable within current staffing models, and would likely require: Investment in additional software solutions Increased reliance on third-party vendors Hiring additional staff dedicated solely to rebate administration and monitoring Financial Impact of Administrative Burden Currently, approximately 72.5% of our 340B savings are already allocated to drug acquisition costs and program administration. (These estimates are based on our current 340B program structure, including the use of third-party administration and existing compliance workflows.) We estimate that implementation of a rebate model would increase operational costs by an additional 1520%, significantly reducing the savings available for reinvestment into patient care. Cash Flow Disruption and Financial Risk A rebate-based model fundamentally shifts the program from upfront discounts to retrospective reimbursement, introducing delays and uncertainty in accessing 340B savings. Delayed or denied rebates would directly impact our ability to: Pay medication wholesalers and 340B vendors in a timely manner Avoid late fees or supply disruptions Maintain patient assistance and outreach programs Sustain clinical services supported by 340B savings For safety-net providers operating on narrow margins, even short delays in reimbursement can result in material cash flow shortages. Increased Reliance on Advanced Data Systems Implementation of a rebate model would require expanded use of: Third-party administrators (TPAs) Manufacturer-required data platforms Additional reporting and validation systems These requirements would increase costs associated with: Vendor contracts Data extraction and reporting System integration and maintenance Importantly, these costs would be incurred without the benefit of upfront 340B discounts, further straining limited resources. Increased Manual Oversight and Workflow Burden Despite increased reliance on technology, the rebate process would still require significant manual oversight, including: Monitoring claim submissions and statuses Reviewing discrepancies across systems Managing denials and resubmissions Coordinating across internal teams, TPAs, and manufacturers This level of manual intervention introduces risk for errors, delays, and compliance challenges, particularly in resource-constrained environments. Increased Operational Costs Collectively, these changes would result in: Increased staffing needs Higher vendor and technology costs Expanded administrative overhead These additional expenses would further erode 340B savings and reduce the ability of Covered Entities to invest in patient care services. Data Access, Platform Transparency, and Equity Considerations Many of the data elements currently being requested by manufacturers as part of rebate model pilots are not readily accessible without cost. Covered Entities often rely on Third Party Administrators (TPAs) and other vendors to generate and validate this data, resulting in additional expenses. Additionally, the current rebate model framework raises concerns regarding transparency and neutrality. Manufacturers are utilizing a platform owned and operated by a third party (BRG), through which Covered Entities are expected to submit claims for validation and rebate processing. Under this structure: Covered Entities have limited visibility into how claims are reviewed or denied Claims that have already been validated for 340B eligibility by TPAs must undergo an additional layer of review There is no standardized or transparent dispute resolution process for denied claims This would result in significant duplication of effort across systems that are not interoperable. This structure places Covered Entities in a position of both funding and validating data processes without corresponding transparency or control. Furthermore, many Covered Entities are already submitting claims data to another BRG-operated platform (ESP) to meet manufacturer requirements. The existence of multiple, parallel platforms creates inefficiencies and redundancy. We encourage consideration of: A neutral, standardized data clearinghouse approach Alignment between rebate submission processes and existing platforms such as ESP to avoid duplicate reporting Greater transparency into claim adjudication and denial rationale In addition, long-standing concerns regarding duplicate discounts in Medicaid managed care could be significantly mitigated through improved claims-level transparency. Specifically, requiring Pharmacy Benefit Managers (PBMs) to utilize dedicated BIN, PCN, and group numbers for all Medicaid managed care plans, standardized at the state level. This allows Covered Entities, states, and manufacturers to clearly identify managed care Medicaid claims. This approach would create parity with fee-for-service Medicaid, where claims are more easily identifiable, and would provide a more efficient and transparent solution to preventing duplicate discounts without introducing unnecessary administrative burden on Covered Entities. If manufacturers require access to detailed claims-level data to support their operational models, there should also be a mechanism to compensate Covered Entities for: The cost of data acquisition and reporting The administrative effort required to produce and validate the data Absent such considerations, these requirements place an inequitable financial burden on safety-net providers while benefiting manufacturers. Concerns Regarding Recent Manufacturer Actions We are increasingly concerned about manufacturer imposed restrictions and policy changes that are not grounded in statute but are instead operational barriers to program participation. These include: Limitations on contract pharmacy arrangements Requirements for data submission outside of statutory authority Movement toward rebate based models that create financial and administrative burdens for Covered Entities These actions undermine the intent of the 340B statute and introduce instability into a program that safety-net providers rely on to sustain patient care. It is also important to recognize that 340B pricing is derived from pricing established by manufacturers. Covered Entities do not control drug pricing, yet are being asked to absorb additional operational burdens to validate or support manufacturer-driven initiatives. If HRSA Proceeds with a Rebate Model, the Following Minimum Safeguards Are Essential Upfront discount alternatives or hybrid models to prevent cash flow disruption Strict rebate timelines (e.g., 10 days) with imposed financial penalties if not paid within the required timelines Neutral, standardized, single data submission platform (not manufacturer-specific systems) Prohibition on duplicate validation layers beyond TPA adjudication Transparent denial and appeals processes with defined timelines Reimbursement guarantees to eliminate claim-level uncertainty Need for Strong HRSA Oversight and Enforcement We respectfully urge HRSA to: Enforce the statutory requirements of the 340B program consistently across all stakeholders Provide clear guidance that limits manufacturer actions not explicitly authorized under the statute Oppose rebate-based models that undermine the upfront discount structure of the program Protect the ability of Covered Entities to utilize contract pharmacies to expand patient access Ensure that any data reporting expectations are reasonable, standardized, and do not impose undue financial burden on Covered Entities Promote transparency and neutrality in any data or rebate processing platforms Strong federal oversight is essential to preserving the integrity of the program and preventing erosion through incremental, non-statutory changes. Conclusion The cumulative effect of these administrative, financial, and operational burdens would materially undermine the ability of Covered Entities to fulfill the statutory intent of the 340B program. The 340B program is not simply a financial mechanism, it is a lifeline that enables providers like ours to expand access to care in underserved communities. Our ability to open clinics, retain staff, and continue serving a growing population of uninsured patients is directly tied to the stability of this program. Any changes that increase administrative burden, reduce available savings, or introduce opaque processes will have immediate and tangible consequences for patient access. We urge HRSA to take decisive action to protect the program as established by Congress and ensure that Covered Entities can continue to meet the needs of vulnerable populations without being subject to undue administrative and financial burdens that detract from patient care. Thank you for the opportunity to provide comment and for your continued support of the 340B program. Thomasyna Sweed 340B Program Manager LifeSpring Health Systems, Jeffersonville, Indiana I oversee 340B program operations across multiple federal program types, including FQHC and Ryan White, and am providing these comments based on direct operational experience. I am submitting the following comments on behalf of LifeSpring Health Systems, a Community Health Center (CH) that has participated in the 340B Drug Pricing Program for over five years. As a safety-net provider, our mission is to ensure access to comprehensive, high quality care for all patients, regardless of their ability to pay. The 340B program is essential to fulfilling that mission. Opening Position Statement We do not support the implementation of a rebate-based model within the 340B program. Such a model is inconsistent with the statutory design of upfront discounts and would introduce financial and operational risks that directly undermine patient access. Patient Impact and Statutory Intent The core intent of the 340B program, as established by Congress, is to enable Covered Entities to stretch scarce federal resources in order to: Expand services to vulnerable populations Serve a greater number of uninsured and low-income patients Provide more comprehensive, integrated care Our 340B savings are fully reinvested into expanding access to care in underserved communities. Specifically, through 340B savings, our organization has: Opened two new FQHC clinics in rural, medically underserved areas Established a new high school-based clinic in a rural community Sustained operations and retained critical staff despite declining Medicaid and Medicare reimbursement rates Continued to provide care amid a significant increase in uninsured and unreimbursed patient services These investments directly align with Congressional intent by expanding access points for care and ensuring that vulnerable populations receive needed services. Without 340B, these access points would not exist, and many patients would face substantial barriers to receiving care. Administrative Burden and Operational Impact Significant Administrative Complexity Most FQHC covered entities operate with a single dedicated 340B program manager responsible for all aspects of program compliance, oversight, and operations. Under a rebate based model, this role would expand significantly to include: Identifying eligible claims through a TPA or internal pharmacy system Extracting and formatting claims data for submission Submitting claims to multiple manufacturer operated data platforms Tracking claim status, including approvals and denials Managing appeals or disputes for denied claims Reconciling previously identified 340B claims requiring credit and rebill processes with wholesalers This introduces multiple new workflow steps across separate systems, many of which are not integrated with existing 340B infrastructure, and would be a duplication of effort. This process is not only operationally complex but unsustainable within current staffing models, and would likely require: Investment in additional software solutions Increased reliance on third-party vendors Hiring additional staff dedicated solely to rebate administration and monitoring Financial Impact of Administrative Burden Currently, approximately 72.5% of our 340B savings are already allocated to drug acquisition costs and program administration. (These estimates are based on our current 340B program structure, including the use of third-party administration and existing compliance workflows.) We estimate that implementation of a rebate model would increase operational costs by an additional 1520%, significantly reducing the savings available for reinvestment into patient care. Cash Flow Disruption and Financial Risk A rebate-based model fundamentally shifts the program from upfront discounts to retrospective reimbursement, introducing delays and uncertainty in accessing 340B savings. Delayed or denied rebates would directly impact our ability to: Pay medication wholesalers and 340B vendors in a timely manner Avoid late fees or supply disruptions Maintain patient assistance and outreach programs Sustain clinical services supported by 340B savings For safety-net providers operating on narrow margins, even short delays in reimbursement can result in material cash flow shortages. Increased Reliance on Advanced Data Systems Implementation of a rebate model would require expanded use of: Third-party administrators (TPAs) Manufacturer-required data platforms Additional reporting and validation systems These requirements would increase costs associated with: Vendor contracts Data extraction and reporting System integration and maintenance Importantly, these costs would be incurred without the benefit of upfront 340B discounts, further straining limited resources. Increased Manual Oversight and Workflow Burden Despite increased reliance on technology, the rebate process would still require significant manual oversight, including: Monitoring claim submissions and statuses Reviewing discrepancies across systems Managing denials and resubmissions Coordinating across internal teams, TPAs, and manufacturers This level of manual intervention introduces risk for errors, delays, and compliance challenges, particularly in resource-constrained environments. Increased Operational Costs Collectively, these changes would result in: Increased staffing needs Higher vendor and technology costs Expanded administrative overhead These additional expenses would further erode 340B savings and reduce the ability of Covered Entities to invest in patient care services. Data Access, Platform Transparency, and Equity Considerations Many of the data elements currently being requested by manufacturers as part of rebate model pilots are not readily accessible without cost. Covered Entities often rely on Third Party Administrators (TPAs) and other vendors to generate and validate this data, resulting in additional expenses. Additionally, the current rebate model framework raises concerns regarding transparency and neutrality. Manufacturers are utilizing a platform owned and operated by a third party (BRG), through which Covered Entities are expected to submit claims for validation and rebate processing. Under this structure: Covered Entities have limited visibility into how claims are reviewed or denied Claims that have already been validated for 340B eligibility by TPAs must undergo an additional layer of review There is no standardized or transparent dispute resolution process for denied claims This would result in significant duplication of effort across systems that are not interoperable. This structure places Covered Entities in a position of both funding and validating data processes without corresponding transparency or control. Furthermore, many Covered Entities are already submitting claims data to another BRG-operated platform (ESP) to meet manufacturer requirements. The existence of multiple, parallel platforms creates inefficiencies and redundancy. We encourage consideration of: A neutral, standardized data clearinghouse approach Alignment between rebate submission processes and existing platforms such as ESP to avoid duplicate reporting Greater transparency into claim adjudication and denial rationale In addition, long-standing concerns regarding duplicate discounts in Medicaid managed care could be significantly mitigated through improved claims-level transparency. Specifically, requiring Pharmacy Benefit Managers (PBMs) to utilize dedicated BIN, PCN, and group numbers for all Medicaid managed care plans, standardized at the state level. This allows Covered Entities, states, and manufacturers to clearly identify managed care Medicaid claims. This approach would create parity with fee-for-service Medicaid, where claims are more easily identifiable, and would provide a more efficient and transparent solution to preventing duplicate discounts without introducing unnecessary administrative burden on Covered Entities. If manufacturers require access to detailed claims-level data to support their operational models, there should also be a mechanism to compensate Covered Entities for: The cost of data acquisition and reporting The administrative effort required to produce and validate the data Absent such considerations, these requirements place an inequitable financial burden on safety- net providers while benefiting manufacturers. Concerns Regarding Recent Manufacturer Actions We are increasingly concerned about manufacturer imposed restrictions and policy changes that are not grounded in statute but are instead operational barriers to program participation. These include: Limitations on contract pharmacy arrangements Requirements for data submission outside of statutory authority Movement toward rebate based models that create financial and administrative burdens for Covered Entities These actions undermine the intent of the 340B statute and introduce instability into a program that safety-net providers rely on to sustain patient care. It is also important to recognize that 340B pricing is derived from pricing established by manufacturers. Covered Entities do not control drug pricing, yet are being asked to absorb additional operational burdens to validate or support manufacturer-driven initiatives. If HRSA Proceeds with a Rebate Model, the Following Minimum Safeguards Are Essential Upfront discount alternatives or hybrid models to prevent cash flow disruption Strict rebate timelines (e.g., 10 days) with imposed financial penalties if not paid within the required timelines Neutral, standardized, single data submission platform (not manufacturer-specific systems) Prohibition on duplicate validation layers beyond TPA adjudication Transparent denial and appeals processes with defined timelines Reimbursement guarantees to eliminate claim-level uncertainty Need for Strong HRSA Oversight and Enforcement We respectfully urge HRSA to: Enforce the statutory requirements of the 340B program consistently across all stakeholders Provide clear guidance that limits manufacturer actions not explicitly authorized under the statute Oppose rebate-based models that undermine the upfront discount structure of the program Protect the ability of Covered Entities to utilize contract pharmacies to expand patient access Ensure that any data reporting expectations are reasonable, standardized, and do not impose undue financial burden on Covered Entities Promote transparency and neutrality in any data or rebate processing platforms Strong federal oversight is essential to preserving the integrity of the program and preventing erosion through incremental, non-statutory changes. Conclusion The cumulative effect of these administrative, financial, and operational burdens would materially undermine the ability of Covered Entities to fulfill the statutory intent of the 340B program. The 340B program is not simply a financial mechanism, it is a lifeline that enables providers like ours to expand access to care in underserved communities. Our ability to open clinics, retain staff, and continue serving a growing population of uninsured patients is directly tied to the stability of this program. Any changes that increase administrative burden, reduce available savings, or introduce opaque processes will have immediate and tangible consequences for patient access. We urge HRSA to take decisive action to protect the program as established by Congress and ensure that Covered Entities can continue to meet the needs of vulnerable populations without being subject to undue administrative and financial burdens that detract from patient care. Thank you for the opportunity to provide comment and for your continued support of the 340B program. Thomasyna Sweed 340B Program Manager LifeSpring Health Systems, Jeffersonville, Indiana I oversee 340B program operations across multiple federal program types, including FQHC and Ryan White, and am providing these comments based on direct operational experience.
HRSA-2026-0001-2404Huggins Hospital2026-04-20T04:00Z6,097 chars
Huggins Hospital, a Critical Access Hospital (CAH) in Wolfeboro, NH, is grateful for the opportunity to comment on the DHHS Request for Information: 340B Rebate Model Pilot Program. Please see our attached document for our submission. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Parklawn Building, Room 13N188 Rockville, MD 20857 RE: Request for Information 340B Rebate Model Pilot Program, HHS Docket No. HRSA202603042 Dear Administrator Engels, Huggins Hospital, a Critical Access Hospital (CAH) in Wolfeboro, NH, is grateful for the opportunity to comment on the DHHS Request for Information: 340B Rebate Model Pilot Program. As an answer to whether HRSA should implement a rebate model under the 340B program, we would say no as the current discount model works for our rural hospital and allows us to continue to provide needed services to our community. A rebate model would impose cost and administrative burden for our rural, CAH, putting a strain on our workforce resources. We understand the 340B Program is complex and requires input from various sectors. We would be happy to work with HRSA, DHHS and pharmaceutical manufacturers to come to a solution that would ensure the savings from the discount program continue to support communities in need like the communities served by Huggins Hospital. Below, our team at Huggins Hospital has done their best to provide answers for this RFI. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. Administrative and Operational Concerns. Any rebate program would require Huggins Hospital to spend even more on administrative costs. When we chose to participate in the 340B Program, we understood the need for administrative support and built up our resources accordingly. With added burden and cost, we continue to lose sight of the costsavings and goal of 340B that was set to support our safetynet organizations ability to stretch our resources. We want to stretch our resources to our patients and community, not stretch our resources into more administrative burden. Staffing Impacts Under a Potential 340B Rebate Program. Huggins Hospital does not currently have the staff needed to comply with a rebate program. We estimate much more administrative burden than current estimates by other organizations. To adhere to a rebate pilot program, we would need resources to intervene with our existing processes to manually override purchasing accounts and actively track each drug transaction, claims data submission and followthrough on rebate collection. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Huggins Hospital has designed its technological systems and operational infrastructure for a discount model. A shift to a 2 rebate model would require an increase in operating expenses, including the implementation of a new TPA program to manage our mixeduse transactions that can accept and send claims data. Data Collection by Covered Entities. During the prior iteration of the rebate program, both HRSA and the pharmaceutical manufacturers stated that a rebate mechanism would not impose new datarelated burdens on 340B hospitals. This is not true for Huggins Hospital. Any required submission of claims data, medical or pharmacy, would be an additional burden for our staff across multiple departments. Payment Timing and Potential Cash Flow Impacts/Adverse Impacts of Additional Costs and Burdens. Huggins Hospital operates with a goal of breaking even, financially. Meeting this goal allows our organization to continue to provide Community Benefits such as charity care to those who cannot afford care or who are underinsured. It also allows us to continue to provide primary care services even though we lose millions of dollars a year providing this service to our rural communities. Huggins Hospitals fiscal operating budget for drug expenses accounts for our discount 340B savings and we need every dollar we can receive in order to continue providing needed services in our communities. Reliance Interests. The discount model has shown to be successful for our rural hospital and our community, allowing us to continue to provide primary care and to add new services such as our Cancer Care program that opened in April of 2025. We have truly seen the impact the current discount model for 340B can have on a community. Even in a pilot form, the rebate model will have a detrimental effect on our ability to manage the program. With a rebate model/pilot, we would have to pay wholesale pricing for all 340B drugs in hopes of reclaiming our rebate at some point in the future. With our tight margins, a hope of getting paid is a dangerous position to be in. We already experience the hardships of hoping to get paid in other aspects of the healthcare industry and those models have proven to be unsuccessful for our organization and for our patients. Efforts to Avoid 340B/MDPNP Duplicate Discounts. We support the American Hospital Associations position that there are viable alternatives that could achieve the same potential benefits as a rebate mechanism. To date, Huggins Hospital and our pharmaceutical manufacturer partners in the 340B Program have not had any issues with our transactions. We would prefer a solution that does not damage a successful operation for our organization and our community. If HRSA chooses to move forward with a change to the 340B Program in the future, we ask to be allowed to comment on the specifics of the new program. Thank you. Sincerely, Monika OClair Chief Strategy Officer Huggins Hospital 240 South Main St., Wolfeboro, NH 03894 (603) 5152088 | moclair@hugginshospital.org
HRSA-2026-0001-2405Dolly Parton Children's Hospital2026-04-20T04:00Z9,802 chars
See attached file(s) Dolly Parton Childrens Hospital 340B Rebate Model RFI Response The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: Executive Summary Dolly Parton Childrens Hospital strongly opposes the proposed 340B rebate model, as it is not operationally or fiscally viable within our care delivery model and would materially disrupt access to pediatric care. As a pediatric hospital with a high Medicaid population and significant outpatient pharmacy utilization, our experience reflects that of similarly situated childrens hospitals and regional systems. Key considerations include: Medicaid exposure: Over 63% of our patients are covered by Medicaid, where reimbursement is often at or near acquisition cost, leaving minimal margin to absorb additional delays. Outpatient concentration: Approximately 6080% of our drug spend occurs in outpatient settings, including retail and specialty pharmacy, infusion services, and ambulatory clinics. The rebate model disproportionately impacts these high-volume, low-margin areas. Cash flow risk: A rebate structure requires us to front full drug acquisition costs and wait for reimbursement, effectively creating an interest-free loan to manufacturers. Our current operating margin does not support this level of financial exposure. Program scale: Our 340B program generates savings in the tens of millions of dollars annually, with nearly 17,000 eligible dispenses year-to-date (January through present) in 2026. The majority of these savings are derived from outpatient pharmacy operations. High-cost therapies: We spend over $18 million annually on cystic fibrosis therapies for fewer than 100 patients. A rebate model would significantly increase monthly carrying costs per patient. Administrative burden: Implementation would require new staffing, increased third-party costs, and system changes across multiple electronic health records, diverting resources from patient care. Patient access impact: 340B savings support school-based care, medication access programs, and affordability initiatives. Any reduction in program effectiveness would directly impact vulnerable pediatric populations. For these reasons, we urge HRSA to abandon the rebate model and preserve the upfront discount mechanism. Full Response On behalf of Dolly Parton Childrens Hospital, we appreciate the opportunity to comment on the proposed 340B Rebate Model Pilot Program. We strongly oppose implementation of a rebate model, as it is not operationally or fiscally viable within our care delivery model and would materially disrupt access to pediatric care in our region. The current 340B upfront discount structure allows hospitals like ours to stretch limited resources to support access, expand services, and invest in innovative models of care. A shift to a rebate- based approach would reverse that model by requiring hospitals to assume financial and operational risk that the program was never designed to place on covered entities. Fundamental Misalignment with Pediatric Care Delivery Dolly Parton Childrens Hospital serves a patient population where over 63% are covered by Medicaid. In this environment, reimbursement frequently does not align with the true cost of providing care, particularly in outpatient and pharmacy settings. Our care model is heavily outpatient-focused, with approximately 6080% of our drug spend occurring in outpatient settings, including retail pharmacy, infusion centers, oncology services, and ambulatory clinics. This reflects broader payer and governmental expectations to shift care to lower-cost settings. However, the proposed rebate model introduces a financing structure that directly undermines this approach by requiring hospitals to front drug acquisition costs and wait for reimbursement. Cash Flow and Financial Viability Concerns Under a rebate model, our organization would be required to purchase medications at full cost and wait for rebate payments that are not guaranteed in timing or approval. This effectively forces hospitals to provide an interest-free loan to manufacturers, shifting financial risk away from industry and onto providers already operating within constrained margins. This is not sustainable within our current financial structure. Our health systems year-to-date operating income is approximately $2.5 million, and we do not have the capacity to absorb the level of cash flow variability that a rebate model would introduce. Scale of Program and Financial Exposure The financial exposure is particularly significant for high-cost therapies. For example, our institution spends over $18 million annually on cystic fibrosis therapies for fewer than 100 patients. Under a rebate model, this would increase our carrying costs by thousands of dollars per patient per month, creating sustained and compounding financial pressure. This exposure must be considered in the context of the overall scale and structure of our 340B program. Dolly Parton Childrens Hospital generates 340B savings in the tens of millions of dollars annually, with nearly 17,000 340B-eligible dispenses year-to-date (January through present) in 2026 in our outpatient pharmacies. The majority of these savings are generated through our outpatient retail and specialty pharmacy operations, reflecting both our care model and payer-driven shifts toward outpatient settings. In comparison, acute care outpatient (medical benefit) activity represents a smaller portion of total savings, typically $34 million annually, including approximately $1 million year- to-date. Given this structure, a rebate model would disproportionately impact the highest-volume, lowest- margin segments of our operations. Introducing delay and uncertainty into reimbursement at this scale would materially affect cash flow, increase administrative burden, and reduce the overall effectiveness of the 340B program in supporting patient care. Retail Pharmacy and Medicaid Misalignment Our retail pharmacy operations highlight a critical flaw in the rebate model. We are reimbursed at or near acquisition cost for many Medicaid claims, leaving little to no margin to absorb additional financial delays. Our pharmacy incurs an average cost of approximately $17.50 per prescription to dispense, inclusive of medication delivery, while average Medicaid dispensing fees are approximately $15.00 per prescription. Even excluding delivery, dispensing costs are estimated at $1314 per prescription, leaving minimal margin. A rebate model introduces additional delay on top of this already narrow structure, further misaligning acquisition cost, reimbursement timing, and operational sustainability. As one of the largest Medicaid pharmacy providers in Tennessee, any disruption to our ability to operate sustainably has direct implications for patient access. Administrative and Operational Burden Implementation of a rebate model would require significant new administrative infrastructure. We currently utilize external 340B program support and anticipate increased costs from third-party administrators, as well as the need for at least one additional full-time employee dedicated to reconciliation, claims validation, and dispute resolution. Operationally, our data environment is complex, requiring coordination across multiple electronic health record systems. A rebate model would require additional data extraction, validation, and submission processes, many of which would involve manual intervention and new system integration work. These requirements go well beyond the administrative scope of the current upfront discount model and would divert resources away from patient care. Impact on Patient Access and Community Programs 340B savings are directly reinvested into programs that expand access and improve outcomes for pediatric patients in our community. At Dolly Parton Childrens Hospital, these include: A virtual school-based care program that allows children to access providers during the school day while remaining in class Medication access programs that provide drugs regardless of ability to pay A low-cost inhaler program that improves affordability for patients with chronic respiratory conditions We also continue to invest in expanding access to advanced therapies, including emerging precision medicine and cell and gene therapies, where smaller pediatric populations create natural barriers to program development. The 340B program plays a critical role in enabling hospitals like ours to establish and sustain these services. Any reduction in 340B program effectiveness would require reevaluation of these programs and would directly impact access for the patients and communities we serve. Conclusion For all of these reasons, Dolly Parton Childrens Hospital respectfully submits that the costs and risks associated with a 340B rebate model far outweigh any potential benefits. The proposed model introduces significant financial, operational, and administrative burdens while undermining the fundamental purpose of the 340B program. We urge HRSA to abandon the rebate model concept and preserve the upfront discount mechanism that has supported access to care for vulnerable populations for decades. We appreciate your consideration of these comments and welcome the opportunity to engage further on this issue. Sincerely, Brad Cagle, PharmD, MBA, BCPS Director of Pharmacy Dolly Parton Childrens Hospital
HRSA-2026-0001-2406boston medical center health system2026-04-20T04:00Z86,326 chars
Attached comments on a proposed 340B rebate model pilot program from boston medical center 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Boston Medical Center Health System (BMCHS), we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. BMC Health System is New Englands largest safety-net health system, which includes Boston Medical Center, our flagship academic medical center, two community teaching hospitals (BMC-Brighton and BMC-South), and WellSense Health Plan, which serves over 740,000 members across Massachusetts and New Hampshire. Each year, BMC Health System provides care across more than one million patient visits, including 25,000 inpatient admissions and 120,000 emergency department visits. BMC Health System serves a disproportionately low- income, racially and ethnically diverse patient population from across the region roughly half live at or below the federal poverty level, 70% identify as Black or Hispanic, and approximately one-third are best served in a language other than English. The overwhelming majority of our patients and members are enrolled in MassHealth (combined program for Medicaid and the Childrens Health Insurance Program), Medicare, or subsidized Marketplace coverage. Our hospitals are just the type of entities for which the 340B program was designed and without it, we could not provide the care we do to hundreds of thousands of low-income patients in our region. Thank you for the opportunity to comment on the 340B rebate model currently in pilot form. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has been an essential part of healthcare safety-net financing for decades. For many safety-net hospital systems, including BMCHS, the answer is no. A shift to a rebate-based 340B program would require significant new staffing and administrative infrastructure, create cash flow strain through delayed reimbursements, and ultimately force BMCHS to reduce patient support programs and community services that currently depend on 340B 2 savings. Once health systems invest in adapting to this rebate-based pilot program, a burden many can barely afford, it would naturally pave the road to a wider rebate structure encompassing all drugs. This would effectively dismantle the 340B program as designed by Congress to help protect the viability of providers serving disproportionate numbers of low-income patients. As explained below, any rebate mechanism will impose enormous costs and burdens on BMCHS that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give priority to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which BMCHS has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. BMCHS has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, estimated cost to BMCHS has increased over what we previously estimated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that BMCHS can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require BMCHS to spend significant sums on new administrative costs. When we chose to participate in the 340B program, BMCHS understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. 3 The implementation of a 340B Rebate Model would significantly impact BMCHS financially. We are expecting a considerable cash flow impact of more than $200,000 per delayed discount day for the drugs proposed to be included in the pilot. An internal analysis of a widespread 340B Rebate Model impact shows BMCHS would have to advance more than $51M-$76M of working capital just to purchase the drugs our patients need. These additional financial strains would have a direct impact on the ability to invest in more robust clinical patient care infrastructure. Additional to the significant cash flow impact, the cost of a limited scope 340B Rebate Model implementation is estimated at $1,000,000-$2,000,000 in the first year only. Based on our current 340B program management experience, preparations for the 340B Rebate Model Pilot announced for January 2026, and the observed impact of MFP Rebate model implementation, BMCHS estimates the following incremental costs: 1. Capital Expenditures: Setup Costs - $200,000+: Diversion of Existing Staff (System Readiness Assessment) - Leadership and Cross-functional teams $100,000 (one-time) Executive leadership: systems readiness assessment, success metrics definition, and stakeholder alignment Supply chain operations: workflow redesign and process optimization Finance and revenue cycle: cash flow modeling, accounting structure, and true-up processes for claims submitted vs payments received IT and data analytics: system integration architecture and security compliance Legal and contracting: vendor evaluation, manufacturer agreement renegotiation, and risk assessment Technology Infrastructure Implementation and training implementation cost of $100,000 (one-time) Platform integration framework development and initial build/modification of data pipelines TPA system implementation and integration with pharmacy systems, EHR, split billing platforms, and wholesaler data feeds Data security and HIPAA compliance infrastructure setup Training for all clinical, financial, and operational staff on new regulations and IT platforms External Consulting (Initial Audit and Compliance Assessment) - To be determined once full scope understood (one-time) 4 External consultants supporting initial process auditing and regulatory compliance assessment 2. Permanent Annual Operating Expenses: Recurring Burden Beyond one-time implementation costs, the rebate model creates a permanent drain on organizational resources that continues indefinitely. These recurring OpEx costs reduce operational capacity and funds available for clinical mission and patient care. Permanent Staffing for Program Management - 6.5 Full-Time Equivalents (FTEs) at $100,000 per FTE fully loaded = $650,000 annually (ongoing) Data and Analytics (2 FTEs): Oversee claims submission, data management, and system integration across multiple platforms. Responsibilities include continuous monitoring of MFP claims, validation tracking, exception handling, cross-system reconciliation, and operational dashboard development. The volume and complexity of claims processing cannot be absorbed into existing capacity. Revenue Cycle Reconciliation (1 FTE): Dedicated to payment reconciliation and true-up processes for 50,000+ claims annually (averaging ~1,000 claims/week). This volume requires full-time attention to ensure accuracy, timely payment, and financial integrity. Eligibility and Dispute Management (2 FTEs): Manage ongoing eligibility changes, claim disputes, and manufacturer coordination. IRA program requirements introduce dynamic and labor-intensive verification and dispute pathways that require consistent documentation and cross-party coordination. Compliance and Audit (1 FTE): Manage 340B rebate model compliance, auditing, policy development, and risk mitigation. Given regulatory complexity and audit exposure, this function requires dedicated expertise and continuous oversight. IT Systems Integration (0.5 FTE): Support third-party system integrations, data exchange troubleshooting, and ongoing maintenance across multiple vendors. Coordinating accurate data flow across platforms requires persistent technical oversight. These 6.5 positions address specific, high-volume operational requirements that cannot be absorbed into existing staff capacity. They are essential for ongoing compliance, accurate claims submission, payment reconciliation, regulatory audits, and data integrity. These dedicated resources represent a permanent shift of personnel away from direct patient care or quality improvement activities 5 TPA Licensing and Software Maintenance - $150,000$200,000 annually (ongoing) TPA (Third Party Administrator) platform licensing and support Software maintenance and troubleshooting System updates and compliance with evolving regulatory requirements 3. Operational Transformation Costs not quantified, but significant Beyond capital and recurring staffing costs, the rebate model mandates extensive operational redesign that compounds financial strain and diverts management attention from core clinical mission. Supply Chain Workflow Redesign Strategic management of inventory turns to reduce impact on working capital and cash flow Tracking pricing changes across 25 drugs with hundreds of potential generic NDCs Inventory redesign and purchasing workflow modifications Development of standard operating procedures for all new workflows Program Integrity and Audit Readiness of 340b rebate model Redesign of eligibility and non-eligible charge capture policies Prevention of denials from manufacturers Contract pharmacy alignment and validation protocols IT Systems and Data Security Platform integration framework development Build/modify data pipelines for purchase, dispense, and eligibility data Automation for rebate submission file generation Data security and HIPAA compliance assurance (critical for safety-net organizations handling vulnerable populations) Manufacturer/Legal Renegotiation of manufacturer agreements TPA and various vendor contract review and alignment with operational workflows Legal review of compliance with 340B statute and HRSA guidance Ongoing communication with manufacturers on rebate denials and reconciliation Dispute resolution framework and potential legal action if needed Billing System Redesign and Payer Alignment The rebate model requires extensive billing and claims submission infrastructure changes 6 Charge capture redesign to ensure complete and accurate encounter data Payer identification logic (Medicaid vs. Commercial vs Medicare) Medicaid carve-in/out compliance alignment Coordination between revenue cycle, third party vendors and finance for reimbursement and rebate reconciliation While HRSA proposes 10-day rebate processing timeframes, industry experience with manufacturer rebate programs consistently shows processing times of 12-18 months. As demonstrated above, we would need to invest more than $1M annually in resources dedicated to supporting a 340B Rebate Model, which means we would be operating at negative margins for many of these drugs included in the 340B Rebate Model. Imposinxg additional financial burdens on Disproportionate Share Hospitals at a time when they are already contending with Medicaid cuts that will simultaneously reduce reimbursements and expand the uninsured population is deeply unreasonable and risks forcing many of these hospitals to shut their doors. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force BMCHS to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. BMCHS is a Disproportionate Share Hospital and, similarly to other organizations that participate in the 340B Program, we operate on negative margins year over year providing necessary care regardless of a patients ability to pay. At BMCHS, we are proud to serve as New Englands largest essential health system, ensuring that every patient has access to exceptional care regardless of their income, background, or insurance status. Each year, BMCHS provides care across more than 1 million patient visits, including 25,000 inpatient admissions and 120,000 emergency department visits. Often, we care for a higher percentage of uninsured (10%) or Medicaid populations (40%). This means that we consistently operate with thin to negative margins and cannot absorb any delay in payment. A delay in payment will lead to BMCHS having to secure additional lines of credit to bridge the gap between payment and reimbursement or failing to meet other payment obligations. This would introduce financing or penalty costs that are not accounted for in the program design and could lead to shortfalls in payroll. With weakened cashflow 7 negatively impacting our debt service coverage ratio, there will be a negative impact on credit ratings further increasing borrowing costs. Moreover, with the implementation of MFP in January 2026, we have already experienced that abiding by the payment terms is often impractical for the manufacturers. The complexity of the multitude of platforms used to manage the program, revenue cycle, and payments, can lead to issues with how the payments are sent (e.g., difficulties with sending EFT payments manufacturers experienced) or received. BMCHS is still waiting to receive payments from manufacturers for MFP Rebates due from January (as of April 20th). o In practice, we have experienced MTF receiving data for claims that are filled but not dispensed. As a result, when we attempt to reconcile claims in MTF and the associated MFP Refunds with data from our pharmacy management system (PMS) we are unable to match the claims because the scripts that are filled and later returned to stock don't have any actual net activity (essentially, the transaction would appear as voided or reversed in the PMS). MTF/MFP transactions are a small percentage (5%) of the 340B Rebate volume we wouldve seen if the rebate program had gone into effect. In short, if the reconciliation process for 340B Rebates is similar to the MFP Rebates the scale alone will necessitate dedicated resources to continually investigate the reconciliation process. o BMCHS has also experienced issues with claim level data feeding into the platforms utilized to manage and reconcile payments (Net-Rx and Elevate). This has led to the PSOA holding BMCHS-owed payments until the claim level data is linked and validated. As of April 20th, we have not yet received the MTF payments due to it. o Even if manufacturers manage to comply with the HRSA proposed 10-day rebate processing timeframe, the impact on 340B organizations goes beyond that. While the 10-day period starts with the claim submission on the Rebate Portal, for us, the cycle starts with the drug purchasing. Then, the drug will be dispensed or administered to an eligible patient of the covered entity. The dispensing event could happen within one day of purchasing the drug or 30 or more days. Finally, 340B eligibility determination can take up to 30 additional days to settle. This brings the actual cycle to 40-70 days, making it impossible to have rebate processing aligned with net payment terms. The rebate model would create material risk for us violating our bond covenants. Even with perfect 10-day payment terms, we lack sufficient cash reserves to finance 8 upfront drug purchases while awaiting rebates without depleting our days of cash on hand below covenant thresholds. Real-world experience demonstrates that rebate delays extend to months rather than days, a timeline that could render our organization and many of the nation's most vulnerable hospitals technically insolvent. Staffing Impacts Under a Potential 340B Rebate Program. BMCHS does not currently have the staff needed to comply with a Rebate Program. HRSAs estimate of only 5 additional hours per week to support implementation of the 340B Rebate model for the drugs covered in the IRA Drug Price Negotiation Program (for up to 25 drugs across 2026 and 2027) significantly understates the true operational burden on covered entities such as BMCHS. Based on our internal assessment, the scope and complexity of required activities necessitate substantial, dedicated staffing resourcesnot marginal incremental effort. Specifically, BMCHS anticipates the need for approximately 6.5 full-time equivalents (FTEs) to effectively implement and manage the program. The addition of 6.5 permanent FTEs introduces substantial indirect organizational burden beyond salary and benefits. These specialized roles require dedicated management infrastructure, talent acquisition investments, and cross-functional coordination across data analytics, compliance, revenue cycle, IT, and pharmacy operations. This organizational complexity increases meeting overhead and decision-making cycles, while creating knowledge concentration risk. If key personnel leave, program continuity and regulatory compliance are jeopardized. Critically, these staff represent opportunity costs. The talent, management bandwidth, and organizational focus dedicated to rebate compliance cannot be redirected toward clinical innovation, quality improvement, care expansion, or revenue optimization that advances the organization's core mission. Accordingly, HRSAs estimate does not align with the real-world administrative, technical, and compliance workload required to operationalize the program at scale. To build this capacity and facilitate smooth implementation of the program with decreased impact on our cash flow and margins we would require at least 12 months' notice. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. BMCHS has designed its technological systems and operational infrastructure in reliance 9 on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. The rebate model requires an integrated data infrastructure that the healthcare system fundamentally lacks. The rebate model's dependence on medical claims data exposes a systemic infrastructure failure. In preparation for the initially announced 340B Rebate model, we have identified that our current systems, including the current TPA software, will not be sufficient for submission and reconciliation of data. Our TPA has no direct EHR integration to medical benefit claims, forcing manual data extraction, multi-system reconciliation, and ad-hoc reformatting for rebate submission. This manual workflow is operationally unsustainable and creates material risk of rebate denial and revenue loss. o Medical claims data is fundamentally distributed across incompatible systems. Patient eligibility, site-of-care qualification, provider-encounter linkage, and drug administration detail (J-codes, NDC mappings) lack consistent data structure or governance. Assembling a complete rebate- eligible record requires manual cross-system integration with no standardized validation protocol. o A critical technical mismatch exists: medical claims use HCPCS/J-codes; 340B rebate models require NDC-level precision. Current J-code-to-NDC cross-walking is performed manually using charge description master mapping and pharmacy validationa non-standardized, error-prone process with no authoritative reference. Correcting these systematic mapping errors at scale would require complete rewriting of hospital EHR infrastructure across the entire industry. This represents a structural deficit that 340B hospitals cannot solve independently; it is a healthcare system-wide failure that predates and extends far beyond the 340B program itself. o Medical claims processing inherently introduces delay and post-submission revision. Under a rebate model, this creates a structural risk of incomplete submissions, late submissions, and rework cycles jeopardizing both regulatory compliance and cash recovery. Organizations lack tools to detect mapping errors before rebate denial. Additionally, there are implications of how we best utilize MFP rebates when higher than 340B rebate value, which could cause loss of opportunity for our organization. This would require additional data infrastructure and management complexity that can only be solved with integrating a third party or investing in additional TPA modules. This has been previously quoted at $100,000 upfront implementation 10 fee and $150,000-$200,000 yearly costs based on volume. A wider roll out of the Rebate model would exponentially increase these costs. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We have already established a robust system to collect, maintain, and retain data related to 340B Program participation, involving a combination of internal systems and third-party vendor platforms: o Dispensing and Clinical Data: Pharmacy dispensing data (QS1) and electronic health records (Epic) capture the foundational compliance elements: patient demographics, provider credentials, prescription details, encounter records, drug identifiers (NDC), and dispensing history. o Eligibility and Program Management: A third-party administrator (Sentry) integrates dispensing and encounter data to perform real-time eligibility determination and drug accumulation tracking. Sentry validates claims against four core compliance requirements: patient eligibility, provider eligibility, drug eligibility, site eligibility, and contract eligibility. For contract pharmacy operations, we employ multiple TPA platforms (Sentry, Wellpartner, Walgreens) to ensure coverage across our contract network. Moreover, manufacturers have broadly tightened 340B contract pharmacy access by imposing standardized restrictions. These typically include limiting covered entities to a single contract pharmacy within a defined geographic radius (e.g., 40 miles) when no in-house pharmacy is available, coupled with mandatory claims data submission through 340B ESP. In many cases, manufacturers also restrict replenishment or prohibit contract pharmacy use entirely, materially reducing the flexibility of the original 340B model. o Drug Acquisition and Pricing Data: Purchase order and inventory data are sourced from primary wholesalers and vendors (Cencora, McKesson, Priority) and direct manufacturer purchases. This data tracks drug acquisition costs, inventory movements, and 340B-specific pricing to support program management and financial reporting. o Data Governance and Retention: All data is retained according to organizational data governance policies and regulatory requirements, ensuring availability for internal reviews, compliance monitoring, and external HRSA audits. 11 Data from these systems are regularly pulled and loaded into the organizations internal data warehouse environment. The data pulled from these different source systems are loaded into internal databases and refreshed on a regular frequency to maintain data freshness and to track changes across systems. This centralized system supports reporting, reconciliation, compliance monitoring, and operational analytics related to the 340B program; Additionally, internal and external audits and reconciliation processes are performed to confirm alignment between internal systems and third-party administrators. These processes help identify discrepancies in dispensing records, eligibility determinations, accumulations, and claim processing outcomes. The implementation of a 340B Rebate Model will require implementing changes to all the systems and processes listed above. These changes would cover specific data requirements, reconciliation patterns, decision making on claim submission, and pulling and integrating data from multiple third-party vendors, such as, Trisus, MTF, Beacon, wholesalers, etc. The information required in return would cover: o where in the rebate process a claim currently resides o how it flows through the lifecycle from submitted to reviewed and then approved/denied o expected 340b rebate amount and due date (based on 10-day maximum from submission to payment required) o Payment confirmation data o Payment data matching between multiple platforms o Flagging of potential discrepancies between systems o Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests would be significant as we would have to integrate new data points (often poorly mapped) with the already established systems. Any information detailing where in the process of the 340B Rebate (submission, review, approved/denied, paid/closed) a particular claim resides will be net new data that we dont currently store and therefore dont query. This will create a multi-vendor reconciliation nightmare. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means BMCHS will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. A disruption to the 340B funds could affect our ability to continue to fund a large number of programs (see below) that support our patients' care and increase access 12 to services. As a health system that consistently cares for the most vulnerable, BMCHS relies on strong partnership between government and health system leaders to sustain and expand this work. The challenges our patients face, ranging from housing instability and food insecurity to chronic disease and medication management, require solutions that go beyond the walls of the hospital. A 340B Rebate Model would significantly impact our ability to support these communities in New England, as it would introduce substantial financial and operational strain on an already resource-constrained system. As we believe this pilot leads to widespread use of rebates, we believe the very core things BMCHS does will be affected: We believe widespread use of rebates would put BMCHS at risk of insolvency. Essential systems like ours are operating at negative margins already; we would have no choice but to take immediate, drastic survival measures. These could include closing both of our community hospitals entirely and severely shrinking essential but chronically unprofitable servicessuch as psychiatry, substance use disorder, maternity care and trauma care that we are currently able to sustain because of 340B savings. HRSA and Congress must understand that this is not a hypothetical risk: the rebate model would force the poorest hospitals serving the most vulnerable patients to make exactly these kinds of painful, irreversible decisions. In practical terms, such cuts would mean thousands of Boston-area patients, predominantly low-income, Medicaid, and uninsured individuals, losing access to life-saving mental health care, complex autoimmune disease management, and other specialized services that have no viable alternative in our community. These are precisely the populations and services the 340B program was enacted to protect; shifting to a rebate model would directly undermine the programs core statutory purpose of stretching scarce federal resources to reach more eligible patients. Because essential hospitals exist in every congressional district, human and political consequences would be felt nationwide. Every Member of Congress would hear loudly and repeatedly from their own constituents whose hospitals are forced to close doors or eliminate services for the poorest and sickest patients. Policymakers must therefore be fully prepared to accept the closure or severe contraction of the very institutions that serve the nations most vulnerable communities. These outcomes are not abstract policy trade-offs; they represent a direct and foreseeable result of imposing tens of millions in new costs and cash-flow burdens on hospitals already contending with Medicaid cuts and rising 13 uncompensated care. Far from expanding access to care, a rebate model would shrink it dramatically, which is contrary to everything the 340B program was designed to achieve. In addition to our core programs, more specific programs would be affected as well. We are currently utilizing 340B funds to invest in patient care through ambulatory care programs for medication education and adherence support, embedded clinic staff that support reducing insurance access barriers and increase continuation of care, acute care support, population health management, and medication adherence resources. There is a direct connection between 340B program savings and our ability to fund these critical services. Any disruption to that funding stream would have immediate consequences for patients who rely on our servicesparticularly those who are low-income, Medicare, or Medicaid beneficiaries. These individuals are less likely to have the means or flexibility to seek care elsewhere, and a decrease in access to health services can exacerbate their health conditions. The 340B Rebate model will lead to an increase in interest expense and will require further diversification away from Pharmacy. This program directly impacts cash at DSH organizations that are already in tight liquidity positions. Lack of cash on hand would create significant risks to patient access to medications, particularly high-cost and specialty drugs: We may be unable to consistently stock certain high-priced drugs due to the need to float the difference between acquisition cost and eventual rebate. This is particularly challenging for therapies that can cost thousandsor even tens of thousandsof dollars per treatment Financial pressure may force the hospital to reevaluate which drugs can be maintained on formulary, potentially restricting access to certain therapies or requiring substitution with less optimal alternatives Programs that help patients access medicationssuch as financial assistance, care coordination, and adherence supportare funded in part by 340B savings. Reduced or delayed savings could limit our ability to sustain these programs, further impacting access Concerns over how the 340B Rebate Model Pilot would impact BMCHS in 2026 have already affected our financial planning for the fiscal year 2026. We have already delayed critical updates to our system out of uncertainty that we will have the necessary cash to invest. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain 340B ceiling prices through upfront discounts and whether such 14 reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Since the inception of the 340B Program, it has consistently provided discounts through upfront pricing rather than post-sale rebates. BMCHS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. Changing that would not only create short-term operational disruption for safety net health systems, but also fundamentally alter the economics that these health systems rely on. Problems identified with the program today can be more narrowly addressed through other means; thus, the Secretary should not use statutory authority to create a more fundamental disruption in the upfront rebate model. The rebate model creates a hidden tax on safety-net providers through forced working capital financing. We would be required to finance up to 60 days of inflated prices for our pharmaceutical inventory before reimbursement, which would constitute a substantial burden given that drug spend represents one of our largest cash outflows. Financing this gap through increased debt introduces recurring interest expenses that directly degrade our operating margin. For organizations already operating on thin margins, this permanent interest drain reduces capacity for clinical expansion, graduate medical education, and charity care - the very missions that justify the 340B program. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. The transition to a 340B rebate model requires a scalable, neutral, trusted infrastructure to adjudicate claims, validate eligibility, and reconcile payments across manufacturers, covered entities, and pharmacies. Todays environment lacks a neutral intermediary. Existing platforms, including Beacon and 340B ESP, are operated by a single vendor and are funded by manufacturers, creating questions about incentives, data control, and decision-making neutralityparticularly in areas such as claim validation, access criteria, and dispute resolution In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon's data availability and API connectivity are restricted to third-party vendors, rather than being accessible directly to covered entities. This is an issue for BMC in particular as we have established Business Intelligence infrastructures that allow us to monitor multiple programs in an integrated manner. Without this capability, there is a lack of transparency and gaps in our understanding of the model as a whole. A solution would be to provide covered entities with the ability for direct API access to our own claims data, giving access 15 to covered entities to understand how manufacturers are making their decisions and not just what decision was made. BMCHS position on addressing Duplicate Discount concerns HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on BMCHS, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations (AHAs) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third- party clearinghouse not funded by manufacturers, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third- party clearinghouse is neither viable nor less costly than a rebate mechanism. While a rebate-based model is positioned as a mechanism to improve program integrity, in practice it would provide limited incremental benefit in addressing duplicate discounts, diversion, or pricing transparency, most likely it will introduce new risks, administrative burden, and significant cash-flow issues. Existing 340B safeguards already address these issues, and a rebate model would shift benefit to manufacturers over covered entities. Our organization manages deduplication through established 340B program controls that are already embedded in our pharmacy and billing workflows. These include: o Use of split-billing software to ensure appropriate identification of 340B- eligible claims o Routine validation of payer, patient, and drug eligibility criteria pre and post claim submission o Internal and external audit processes and compliance oversight to detect and correct any and all discrepancies o Coordination across pharmacy, IT, revenue cycle, and compliance teams to resolve issues in real time These processes are well-established, continuously monitored, and aligned with existing 340B program requirements. As a result, they have proven effective in 16 preventing duplicate discounts without requiring additional external reconciliation mechanisms. Given the absence of publicly identified duplication issues, there is no evidence that a rebate model is necessary to address a systemic problem. The current framework already ensures program integrity through proactive controls and routine oversight, without introducing additional financial or administrative burden. Our existing approach is significantly less burdensome than the proposed rebate model. Todays processes are integrated into normal operations and rely on prospective controls In contrast, a rebate model would shift this to a retrospective system requiring: o Claim-by-claim tracking and submission for rebate eligibility o Delayed reimbursement and associated cash flow strain o Ongoing reconciliation, dispute resolution, and payment tracking o Additional staffing across IT, revenue cycle, analytics, and compliance functions This would fundamentally transform a streamlined, preventive process into a labor-intensive, multi-step financial reconciliation system. Our experience demonstrates that current 340B/MDPNP duplication controls are functioning effectively and efficiently. They prevent duplicate discounts without the need for a rebate mechanism and with far less administrative, operational, and financial burden than the proposed model. The 340B Rebate Model grants pharmaceutical manufacturers unprecedented authority over a federal program specifically designed to limit their pricing power. Section 340B of the Public Health Service Acts plain text creates a drug discount program, not the framework for a rebate program. Not only does HRSAs proposal to significantly alter the fundamental premise of the program fly in the face of the statutory text, but potentially violates the Constitutional principle of non-delegation, making manufacturers the arbiters of claim eligibility and inverting the program's fundamental structure and purpose. Drug manufacturers, understandably, have consistently expressed discontent with a program requiring them to sell their products at a discount. But that discontent is the basis and reason for the law. Consequently, manufacturers have demonstrated consistent hostility toward program components they cannot control, particularly contract pharmacy arrangements, and sought ways to limit the use of the components to which they object. Giving manufacturers the authority and flexibility to establish parameters around which 17 claims warrant a rebate is the broad, exploitable opening that manufacturers have long sought to curtail use of this hugely successful program. One consequence of the proposed rebate model is that it would provide the perfect mechanism for manufacturers to eliminate contract pharmacies by simply denying rebates for these arrangements. Multiple ongoing court cases demonstrate manufacturers' determination to limit the use of the 340B Program, often through the unauthorized and illegal imposition of rebate models, despite administrative denial of those requests. We fear that granting this authority to manufacturers will encourage new avenues of manufacturer-imposed hurdles forcing covered entities to spend countless time and dollars chasing discounts or rebates that were inappropriately denied. For all of these reasons, BMCHS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should preserve the current 340B model and adopt existing and viable proposals to address program concerns. Our organization urges policymakers and program stakeholders to prioritize the establishment of an independent third-party clearinghouse model as a fundamental prerequisite for meaningful 340B program improvement. If, however, HRSA chooses to move forward with this flawed effort, it must allow BMCHS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Bhavesh Shah R.Ph VP of Pharmacy 18 Boston Medical Center Health System Bhavesh.shah@bmc.org CC: Alastair Bell MD and Noreen Palinkas 1 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Boston Medical Center Health System (BMCHS), we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. BMC Health System is New Englands largest safety-net health system, which includes Boston Medical Center, our flagship academic medical center, two community teaching hospitals (BMC-Brighton and BMC-South), and WellSense Health Plan, which serves over 740,000 members across Massachusetts and New Hampshire. Each year, BMC Health System provides care across more than one million patient visits, including 25,000 inpatient admissions and 120,000 emergency department visits. BMC Health System serves a disproportionately low- income, racially and ethnically diverse patient population from across the region roughly half live at or below the federal poverty level, 70% identify as Black or Hispanic, and approximately one-third are best served in a language other than English. The overwhelming majority of our patients and members are enrolled in MassHealth (combined program for Medicaid and the Childrens Health Insurance Program), Medicare, or subsidized Marketplace coverage. Our hospitals are just the type of entities for which the 340B program was designed and without it, we could not provide the care we do to hundreds of thousands of low-income patients in our region. Thank you for the opportunity to comment on the 340B rebate model currently in pilot form. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has been an essential part of healthcare safety-net financing for decades. For many safety-net hospital systems, including BMCHS, the answer is no. A shift to a rebate-based 340B program would require significant new staffing and administrative infrastructure, create cash flow strain through delayed reimbursements, and ultimately force BMCHS to reduce patient support programs and community services that currently depend on 340B 2 savings. Once health systems invest in adapting to this rebate-based pilot program, a burden many can barely afford, it would naturally pave the road to a wider rebate structure encompassing all drugs. This would effectively dismantle the 340B program as designed by Congress to help protect the viability of providers serving disproportionate numbers of low-income patients. As explained below, any rebate mechanism will impose enormous costs and burdens on BMCHS that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give priority to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which BMCHS has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. BMCHS has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, estimated cost to BMCHS has increased over what we previously estimated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that BMCHS can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require BMCHS to spend significant sums on new administrative costs. When we chose to participate in the 340B program, BMCHS understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. 3 The implementation of a 340B Rebate Model would significantly impact BMCHS financially. We are expecting a considerable cash flow impact of more than $200,000 per delayed discount day for the drugs proposed to be included in the pilot. An internal analysis of a widespread 340B Rebate Model impact shows BMCHS would have to advance more than $51M-$76M of working capital just to purchase the drugs our patients need. These additional financial strains would have a direct impact on the ability to invest in more robust clinical patient care infrastructure. Additional to the significant cash flow impact, the cost of a limited scope 340B Rebate Model implementation is estimated at $1,000,000-$2,000,000 in the first year only. Based on our current 340B program management experience, preparations for the 340B Rebate Model Pilot announced for January 2026, and the observed impact of MFP Rebate model implementation, BMCHS estimates the following incremental costs: 1. Capital Expenditures: Setup Costs - $200,000+: Diversion of Existing Staff (System Readiness Assessment) - Leadership and Cross-functional teams $100,000 (one-time) Executive leadership: systems readiness assessment, success metrics definition, and stakeholder alignment Supply chain operations: workflow redesign and process optimization Finance and revenue cycle: cash flow modeling, accounting structure, and true-up processes for claims submitted vs payments received IT and data analytics: system integration architecture and security compliance Legal and contracting: vendor evaluation, manufacturer agreement renegotiation, and risk assessment Technology Infrastructure Implementation and training implementation cost of $100,000 (one-time) Platform integration framework development and initial build/modification of data pipelines TPA system implementation and integration with pharmacy systems, EHR, split billing platforms, and wholesaler data feeds Data security and HIPAA compliance infrastructure setup Training for all clinical, financial, and operational staff on new regulations and IT platforms External Consulting (Initial Audit and Compliance Assessment) - To be determined once full scope understood (one-time) 4 External consultants supporting initial process auditing and regulatory compliance assessment 2. Permanent Annual Operating Expenses: Recurring Burden Beyond one-time implementation costs, the rebate model creates a permanent drain on organizational resources that continues indefinitely. These recurring OpEx costs reduce operational capacity and funds available for clinical mission and patient care. Permanent Staffing for Program Management - 6.5 Full-Time Equivalents (FTEs) at $100,000 per FTE fully loaded = $650,000 annually (ongoing) Data and Analytics (2 FTEs): Oversee claims submission, data management, and system integration across multiple platforms. Responsibilities include continuous monitoring of MFP claims, validation tracking, exception handling, cross-system reconciliation, and operational dashboard development. The volume and complexity of claims processing cannot be absorbed into existing capacity. Revenue Cycle Reconciliation (1 FTE): Dedicated to payment reconciliation and true-up processes for 50,000+ claims annually (averaging ~1,000 claims/week). This volume requires full-time attention to ensure accuracy, timely payment, and financial integrity. Eligibility and Dispute Management (2 FTEs): Manage ongoing eligibility changes, claim disputes, and manufacturer coordination. IRA program requirements introduce dynamic and labor-intensive verification and dispute pathways that require consistent documentation and cross-party coordination. Compliance and Audit (1 FTE): Manage 340B rebate model compliance, auditing, policy development, and risk mitigation. Given regulatory complexity and audit exposure, this function requires dedicated expertise and continuous oversight. IT Systems Integration (0.5 FTE): Support third-party system integrations, data exchange troubleshooting, and ongoing maintenance across multiple vendors. Coordinating accurate data flow across platforms requires persistent technical oversight. These 6.5 positions address specific, high-volume operational requirements that cannot be absorbed into existing staff capacity. They are essential for ongoing compliance, accurate claims submission, payment reconciliation, regulatory audits, and data integrity. These dedicated resources represent a permanent shift of personnel away from direct patient care or quality improvement activities 5 TPA Licensing and Software Maintenance - $150,000$200,000 annually (ongoing) TPA (Third Party Administrator) platform licensing and support Software maintenance and troubleshooting System updates and compliance with evolving regulatory requirements 3. Operational Transformation Costs not quantified, but significant Beyond capital and recurring staffing costs, the rebate model mandates extensive operational redesign that compounds financial strain and diverts management attention from core clinical mission. Supply Chain Workflow Redesign Strategic management of inventory turns to reduce impact on working capital and cash flow Tracking pricing changes across 25 drugs with hundreds of potential generic NDCs Inventory redesign and purchasing workflow modifications Development of standard operating procedures for all new workflows Program Integrity and Audit Readiness of 340b rebate model Redesign of eligibility and non-eligible charge capture policies Prevention of denials from manufacturers Contract pharmacy alignment and validation protocols IT Systems and Data Security Platform integration framework development Build/modify data pipelines for purchase, dispense, and eligibility data Automation for rebate submission file generation Data security and HIPAA compliance assurance (critical for safety-net organizations handling vulnerable populations) Manufacturer/Legal Renegotiation of manufacturer agreements TPA and various vendor contract review and alignment with operational workflows Legal review of compliance with 340B statute and HRSA guidance Ongoing communication with manufacturers on rebate denials and reconciliation Dispute resolution framework and potential legal action if needed Billing System Redesign and Payer Alignment The rebate model requires extensive billing and claims submission infrastructure changes 6 Charge capture redesign to ensure complete and accurate encounter data Payer identification logic (Medicaid vs. Commercial vs Medicare) Medicaid carve-in/out compliance alignment Coordination between revenue cycle, third party vendors and finance for reimbursement and rebate reconciliation While HRSA proposes 10-day rebate processing timeframes, industry experience with manufacturer rebate programs consistently shows processing times of 12-18 months. As demonstrated above, we would need to invest more than $1M annually in resources dedicated to supporting a 340B Rebate Model, which means we would be operating at negative margins for many of these drugs included in the 340B Rebate Model. Imposinxg additional financial burdens on Disproportionate Share Hospitals at a time when they are already contending with Medicaid cuts that will simultaneously reduce reimbursements and expand the uninsured population is deeply unreasonable and risks forcing many of these hospitals to shut their doors. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force BMCHS to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. BMCHS is a Disproportionate Share Hospital and, similarly to other organizations that participate in the 340B Program, we operate on negative margins year over year providing necessary care regardless of a patients ability to pay. At BMCHS, we are proud to serve as New Englands largest essential health system, ensuring that every patient has access to exceptional care regardless of their income, background, or insurance status. Each year, BMCHS provides care across more than 1 million patient visits, including 25,000 inpatient admissions and 120,000 emergency department visits. Often, we care for a higher percentage of uninsured (10%) or Medicaid populations (40%). This means that we consistently operate with thin to negative margins and cannot absorb any delay in payment. A delay in payment will lead to BMCHS having to secure additional lines of credit to bridge the gap between payment and reimbursement or failing to meet other payment obligations. This would introduce financing or penalty costs that are not accounted for in the program design and could lead to shortfalls in payroll. With weakened cashflow 7 negatively impacting our debt service coverage ratio, there will be a negative impact on credit ratings further increasing borrowing costs. Moreover, with the implementation of MFP in January 2026, we have already experienced that abiding by the payment terms is often impractical for the manufacturers. The complexity of the multitude of platforms used to manage the program, revenue cycle, and payments, can lead to issues with how the payments are sent (e.g., difficulties with sending EFT payments manufacturers experienced) or received. BMCHS is still waiting to receive payments from manufacturers for MFP Rebates due from January (as of April 20th). o In practice, we have experienced MTF receiving data for claims that are filled but not dispensed. As a result, when we attempt to reconcile claims in MTF and the associated MFP Refunds with data from our pharmacy management system (PMS) we are unable to match the claims because the scripts that are filled and later returned to stock don't have any actual net activity (essentially, the transaction would appear as voided or reversed in the PMS). MTF/MFP transactions are a small percentage (5%) of the 340B Rebate volume we wouldve seen if the rebate program had gone into effect. In short, if the reconciliation process for 340B Rebates is similar to the MFP Rebates the scale alone will necessitate dedicated resources to continually investigate the reconciliation process. o BMCHS has also experienced issues with claim level data feeding into the platforms utilized to manage and reconcile payments (Net-Rx and Elevate). This has led to the PSOA holding BMCHS-owed payments until the claim level data is linked and validated. As of April 20th, we have not yet received the MTF payments due to it. o Even if manufacturers manage to comply with the HRSA proposed 10-day rebate processing timeframe, the impact on 340B organizations goes beyond that. While the 10-day period starts with the claim submission on the Rebate Portal, for us, the cycle starts with the drug purchasing. Then, the drug will be dispensed or administered to an eligible patient of the covered entity. The dispensing event could happen within one day of purchasing the drug or 30 or more days. Finally, 340B eligibility determination can take up to 30 additional days to settle. This brings the actual cycle to 40-70 days, making it impossible to have rebate processing aligned with net payment terms. The rebate model would create material risk for us violating our bond covenants. Even with perfect 10-day payment terms, we lack sufficient cash reserves to finance 8 upfront drug purchases while awaiting rebates without depleting our days of cash on hand below covenant thresholds. Real-world experience demonstrates that rebate delays extend to months rather than days, a timeline that could render our organization and many of the nation's most vulnerable hospitals technically insolvent. Staffing Impacts Under a Potential 340B Rebate Program. BMCHS does not currently have the staff needed to comply with a Rebate Program. HRSAs estimate of only 5 additional hours per week to support implementation of the 340B Rebate model for the drugs covered in the IRA Drug Price Negotiation Program (for up to 25 drugs across 2026 and 2027) significantly understates the true operational burden on covered entities such as BMCHS. Based on our internal assessment, the scope and complexity of required activities necessitate substantial, dedicated staffing resourcesnot marginal incremental effort. Specifically, BMCHS anticipates the need for approximately 6.5 full-time equivalents (FTEs) to effectively implement and manage the program. The addition of 6.5 permanent FTEs introduces substantial indirect organizational burden beyond salary and benefits. These specialized roles require dedicated management infrastructure, talent acquisition investments, and cross-functional coordination across data analytics, compliance, revenue cycle, IT, and pharmacy operations. This organizational complexity increases meeting overhead and decision-making cycles, while creating knowledge concentration risk. If key personnel leave, program continuity and regulatory compliance are jeopardized. Critically, these staff represent opportunity costs. The talent, management bandwidth, and organizational focus dedicated to rebate compliance cannot be redirected toward clinical innovation, quality improvement, care expansion, or revenue optimization that advances the organization's core mission. Accordingly, HRSAs estimate does not align with the real-world administrative, technical, and compliance workload required to operationalize the program at scale. To build this capacity and facilitate smooth implementation of the program with decreased impact on our cash flow and margins we would require at least 12 months' notice. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. BMCHS has designed its technological systems and operational infrastructure in reliance 9 on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. The rebate model requires an integrated data infrastructure that the healthcare system fundamentally lacks. The rebate model's dependence on medical claims data exposes a systemic infrastructure failure. In preparation for the initially announced 340B Rebate model, we have identified that our current systems, including the current TPA software, will not be sufficient for submission and reconciliation of data. Our TPA has no direct EHR integration to medical benefit claims, forcing manual data extraction, multi-system reconciliation, and ad-hoc reformatting for rebate submission. This manual workflow is operationally unsustainable and creates material risk of rebate denial and revenue loss. o Medical claims data is fundamentally distributed across incompatible systems. Patient eligibility, site-of-care qualification, provider-encounter linkage, and drug administration detail (J-codes, NDC mappings) lack consistent data structure or governance. Assembling a complete rebate- eligible record requires manual cross-system integration with no standardized validation protocol. o A critical technical mismatch exists: medical claims use HCPCS/J-codes; 340B rebate models require NDC-level precision. Current J-code-to-NDC cross-walking is performed manually using charge description master mapping and pharmacy validationa non-standardized, error-prone process with no authoritative reference. Correcting these systematic mapping errors at scale would require complete rewriting of hospital EHR infrastructure across the entire industry. This represents a structural deficit that 340B hospitals cannot solve independently; it is a healthcare system-wide failure that predates and extends far beyond the 340B program itself. o Medical claims processing inherently introduces delay and post-submission revision. Under a rebate model, this creates a structural risk of incomplete submissions, late submissions, and rework cycles jeopardizing both regulatory compliance and cash recovery. Organizations lack tools to detect mapping errors before rebate denial. Additionally, there are implications of how we best utilize MFP rebates when higher than 340B rebate value, which could cause loss of opportunity for our organization. This would require additional data infrastructure and management complexity that can only be solved with integrating a third party or investing in additional TPA modules. This has been previously quoted at $100,000 upfront implementation 10 fee and $150,000-$200,000 yearly costs based on volume. A wider roll out of the Rebate model would exponentially increase these costs. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. We have already established a robust system to collect, maintain, and retain data related to 340B Program participation, involving a combination of internal systems and third-party vendor platforms: o Dispensing and Clinical Data: Pharmacy dispensing data (QS1) and electronic health records (Epic) capture the foundational compliance elements: patient demographics, provider credentials, prescription details, encounter records, drug identifiers (NDC), and dispensing history. o Eligibility and Program Management: A third-party administrator (Sentry) integrates dispensing and encounter data to perform real-time eligibility determination and drug accumulation tracking. Sentry validates claims against four core compliance requirements: patient eligibility, provider eligibility, drug eligibility, site eligibility, and contract eligibility. For contract pharmacy operations, we employ multiple TPA platforms (Sentry, Wellpartner, Walgreens) to ensure coverage across our contract network. Moreover, manufacturers have broadly tightened 340B contract pharmacy access by imposing standardized restrictions. These typically include limiting covered entities to a single contract pharmacy within a defined geographic radius (e.g., 40 miles) when no in-house pharmacy is available, coupled with mandatory claims data submission through 340B ESP. In many cases, manufacturers also restrict replenishment or prohibit contract pharmacy use entirely, materially reducing the flexibility of the original 340B model. o Drug Acquisition and Pricing Data: Purchase order and inventory data are sourced from primary wholesalers and vendors (Cencora, McKesson, Priority) and direct manufacturer purchases. This data tracks drug acquisition costs, inventory movements, and 340B-specific pricing to support program management and financial reporting. o Data Governance and Retention: All data is retained according to organizational data governance policies and regulatory requirements, ensuring availability for internal reviews, compliance monitoring, and external HRSA audits. 11 Data from these systems are regularly pulled and loaded into the organizations internal data warehouse environment. The data pulled from these different source systems are loaded into internal databases and refreshed on a regular frequency to maintain data freshness and to track changes across systems. This centralized system supports reporting, reconciliation, compliance monitoring, and operational analytics related to the 340B program; Additionally, internal and external audits and reconciliation processes are performed to confirm alignment between internal systems and third-party administrators. These processes help identify discrepancies in dispensing records, eligibility determinations, accumulations, and claim processing outcomes. The implementation of a 340B Rebate Model will require implementing changes to all the systems and processes listed above. These changes would cover specific data requirements, reconciliation patterns, decision making on claim submission, and pulling and integrating data from multiple third-party vendors, such as, Trisus, MTF, Beacon, wholesalers, etc. The information required in return would cover: o where in the rebate process a claim currently resides o how it flows through the lifecycle from submitted to reviewed and then approved/denied o expected 340b rebate amount and due date (based on 10-day maximum from submission to payment required) o Payment confirmation data o Payment data matching between multiple platforms o Flagging of potential discrepancies between systems o Therefore, the burden associated with a potential 340B Rebate Model Pilot Program data requests would be significant as we would have to integrate new data points (often poorly mapped) with the already established systems. Any information detailing where in the process of the 340B Rebate (submission, review, approved/denied, paid/closed) a particular claim resides will be net new data that we dont currently store and therefore dont query. This will create a multi-vendor reconciliation nightmare. Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means BMCHS will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. A disruption to the 340B funds could affect our ability to continue to fund a large number of programs (see below) that support our patients' care and increase access 12 to services. As a health system that consistently cares for the most vulnerable, BMCHS relies on strong partnership between government and health system leaders to sustain and expand this work. The challenges our patients face, ranging from housing instability and food insecurity to chronic disease and medication management, require solutions that go beyond the walls of the hospital. A 340B Rebate Model would significantly impact our ability to support these communities in New England, as it would introduce substantial financial and operational strain on an already resource-constrained system. As we believe this pilot leads to widespread use of rebates, we believe the very core things BMCHS does will be affected: We believe widespread use of rebates would put BMCHS at risk of insolvency. Essential systems like ours are operating at negative margins already; we would have no choice but to take immediate, drastic survival measures. These could include closing both of our community hospitals entirely and severely shrinking essential but chronically unprofitable servicessuch as psychiatry, substance use disorder, maternity care and trauma care that we are currently able to sustain because of 340B savings. HRSA and Congress must understand that this is not a hypothetical risk: the rebate model would force the poorest hospitals serving the most vulnerable patients to make exactly these kinds of painful, irreversible decisions. In practical terms, such cuts would mean thousands of Boston-area patients, predominantly low-income, Medicaid, and uninsured individuals, losing access to life-saving mental health care, complex autoimmune disease management, and other specialized services that have no viable alternative in our community. These are precisely the populations and services the 340B program was enacted to protect; shifting to a rebate model would directly undermine the programs core statutory purpose of stretching scarce federal resources to reach more eligible patients. Because essential hospitals exist in every congressional district, human and political consequences would be felt nationwide. Every Member of Congress would hear loudly and repeatedly from their own constituents whose hospitals are forced to close doors or eliminate services for the poorest and sickest patients. Policymakers must therefore be fully prepared to accept the closure or severe contraction of the very institutions that serve the nations most vulnerable communities. These outcomes are not abstract policy trade-offs; they represent a direct and foreseeable result of imposing tens of millions in new costs and cash-flow burdens on hospitals already contending with Medicaid cuts and rising 13 uncompensated care. Far from expanding access to care, a rebate model would shrink it dramatically, which is contrary to everything the 340B program was designed to achieve. In addition to our core programs, more specific programs would be affected as well. We are currently utilizing 340B funds to invest in patient care through ambulatory care programs for medication education and adherence support, embedded clinic staff that support reducing insurance access barriers and increase continuation of care, acute care support, population health management, and medication adherence resources. There is a direct connection between 340B program savings and our ability to fund these critical services. Any disruption to that funding stream would have immediate consequences for patients who rely on our servicesparticularly those who are low-income, Medicare, or Medicaid beneficiaries. These individuals are less likely to have the means or flexibility to seek care elsewhere, and a decrease in access to health services can exacerbate their health conditions. The 340B Rebate model will lead to an increase in interest expense and will require further diversification away from Pharmacy. This program directly impacts cash at DSH organizations that are already in tight liquidity positions. Lack of cash on hand would create significant risks to patient access to medications, particularly high-cost and specialty drugs: We may be unable to consistently stock certain high-priced drugs due to the need to float the difference between acquisition cost and eventual rebate. This is particularly challenging for therapies that can cost thousandsor even tens of thousandsof dollars per treatment Financial pressure may force the hospital to reevaluate which drugs can be maintained on formulary, potentially restricting access to certain therapies or requiring substitution with less optimal alternatives Programs that help patients access medicationssuch as financial assistance, care coordination, and adherence supportare funded in part by 340B savings. Reduced or delayed savings could limit our ability to sustain these programs, further impacting access Concerns over how the 340B Rebate Model Pilot would impact BMCHS in 2026 have already affected our financial planning for the fiscal year 2026. We have already delayed critical updates to our system out of uncertainty that we will have the necessary cash to invest. Reliance Interests. The RFI expressly invites comment on reliance interests in continuing to obtain 340B ceiling prices through upfront discounts and whether such 14 reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Since the inception of the 340B Program, it has consistently provided discounts through upfront pricing rather than post-sale rebates. BMCHS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. Changing that would not only create short-term operational disruption for safety net health systems, but also fundamentally alter the economics that these health systems rely on. Problems identified with the program today can be more narrowly addressed through other means; thus, the Secretary should not use statutory authority to create a more fundamental disruption in the upfront rebate model. The rebate model creates a hidden tax on safety-net providers through forced working capital financing. We would be required to finance up to 60 days of inflated prices for our pharmaceutical inventory before reimbursement, which would constitute a substantial burden given that drug spend represents one of our largest cash outflows. Financing this gap through increased debt introduces recurring interest expenses that directly degrade our operating margin. For organizations already operating on thin margins, this permanent interest drain reduces capacity for clinical expansion, graduate medical education, and charity care - the very missions that justify the 340B program. Problems With the Beacon IT Platform. Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. The transition to a 340B rebate model requires a scalable, neutral, trusted infrastructure to adjudicate claims, validate eligibility, and reconcile payments across manufacturers, covered entities, and pharmacies. Todays environment lacks a neutral intermediary. Existing platforms, including Beacon and 340B ESP, are operated by a single vendor and are funded by manufacturers, creating questions about incentives, data control, and decision-making neutralityparticularly in areas such as claim validation, access criteria, and dispute resolution In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Beacon's data availability and API connectivity are restricted to third-party vendors, rather than being accessible directly to covered entities. This is an issue for BMC in particular as we have established Business Intelligence infrastructures that allow us to monitor multiple programs in an integrated manner. Without this capability, there is a lack of transparency and gaps in our understanding of the model as a whole. A solution would be to provide covered entities with the ability for direct API access to our own claims data, giving access 15 to covered entities to understand how manufacturers are making their decisions and not just what decision was made. BMCHS position on addressing Duplicate Discount concerns HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on BMCHS, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the American Hospital Associations (AHAs) position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third- party clearinghouse not funded by manufacturers, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third- party clearinghouse is neither viable nor less costly than a rebate mechanism. While a rebate-based model is positioned as a mechanism to improve program integrity, in practice it would provide limited incremental benefit in addressing duplicate discounts, diversion, or pricing transparency, most likely it will introduce new risks, administrative burden, and significant cash-flow issues. Existing 340B safeguards already address these issues, and a rebate model would shift benefit to manufacturers over covered entities. Our organization manages deduplication through established 340B program controls that are already embedded in our pharmacy and billing workflows. These include: o Use of split-billing software to ensure appropriate identification of 340B- eligible claims o Routine validation of payer, patient, and drug eligibility criteria pre and post claim submission o Internal and external audit processes and compliance oversight to detect and correct any and all discrepancies o Coordination across pharmacy, IT, revenue cycle, and compliance teams to resolve issues in real time These processes are well-established, continuously monitored, and aligned with existing 340B program requirements. As a result, they have proven effective in 16 preventing duplicate discounts without requiring additional external reconciliation mechanisms. Given the absence of publicly identified duplication issues, there is no evidence that a rebate model is necessary to address a systemic problem. The current framework already ensures program integrity through proactive controls and routine oversight, without introducing additional financial or administrative burden. Our existing approach is significantly less burdensome than the proposed rebate model. Todays processes are integrated into normal operations and rely on prospective controls In contrast, a rebate model would shift this to a retrospective system requiring: o Claim-by-claim tracking and submission for rebate eligibility o Delayed reimbursement and associated cash flow strain o Ongoing reconciliation, dispute resolution, and payment tracking o Additional staffing across IT, revenue cycle, analytics, and compliance functions This would fundamentally transform a streamlined, preventive process into a labor-intensive, multi-step financial reconciliation system. Our experience demonstrates that current 340B/MDPNP duplication controls are functioning effectively and efficiently. They prevent duplicate discounts without the need for a rebate mechanism and with far less administrative, operational, and financial burden than the proposed model. The 340B Rebate Model grants pharmaceutical manufacturers unprecedented authority over a federal program specifically designed to limit their pricing power. Section 340B of the Public Health Service Acts plain text creates a drug discount program, not the framework for a rebate program. Not only does HRSAs proposal to significantly alter the fundamental premise of the program fly in the face of the statutory text, but potentially violates the Constitutional principle of non-delegation, making manufacturers the arbiters of claim eligibility and inverting the program's fundamental structure and purpose. Drug manufacturers, understandably, have consistently expressed discontent with a program requiring them to sell their products at a discount. But that discontent is the basis and reason for the law. Consequently, manufacturers have demonstrated consistent hostility toward program components they cannot control, particularly contract pharmacy arrangements, and sought ways to limit the use of the components to which they object. Giving manufacturers the authority and flexibility to establish parameters around which 17 claims warrant a rebate is the broad, exploitable opening that manufacturers have long sought to curtail use of this hugely successful program. One consequence of the proposed rebate model is that it would provide the perfect mechanism for manufacturers to eliminate contract pharmacies by simply denying rebates for these arrangements. Multiple ongoing court cases demonstrate manufacturers' determination to limit the use of the 340B Program, often through the unauthorized and illegal imposition of rebate models, despite administrative denial of those requests. We fear that granting this authority to manufacturers will encourage new avenues of manufacturer-imposed hurdles forcing covered entities to spend countless time and dollars chasing discounts or rebates that were inappropriately denied. For all of these reasons, BMCHS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should preserve the current 340B model and adopt existing and viable proposals to address program concerns. Our organization urges policymakers and program stakeholders to prioritize the establishment of an independent third-party clearinghouse model as a fundamental prerequisite for meaningful 340B program improvement. If, however, HRSA chooses to move forward with this flawed effort, it must allow BMCHS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Bhavesh Shah R.Ph VP of Pharmacy 18 Boston Medical Center Health System Bhavesh.shah@bmc.org CC: Alastair Bell MD and Noreen Palinkas
HRSA-2026-0001-2407Neighborhood Health Association2026-04-20T04:00Z45,667 chars
See attached file(s) April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Neighborhood Health Association, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Neighborhood Health Association expects losses of approximately $500.000 from entity-owned pharmacy operations and $60,000 from contract pharmacy arrangements due to the administrative burden of manual reconciliation Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Neighborhood Health Association of Toledo, Inc. (NHA) is a Federally Qualified Health Center serving Northwest Ohio. NHA provides integrated primary care, dental, behavioral health, and pharmacy services to underserved populations and serves approximately 8,742 patients annually. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions 2 of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Neighborhood Health Association in particular, this means it will impact: Neighborhood Health Association serves approximately 8,742 patients annually, the majority of whom rely on affordable medications through the 340B program Our current 340B administrative costs are $356,938 (personnel only) 340B savings are used to provide discounted medications through a sliding fee scale, support pharmacy operations and staffing, expand access through contract pharmacy partnerships, and fund clinical services for underserved populations. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Neighborhood Health Association provided $1,500,000 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Neighborhood Health Association anticipates needing 3 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Neighborhood Health Association anticipates an increase of [Anticipated Additional Costs Related to Rebate Model] to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program 5 coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Neighborhood Health Association anticipates needing 3 additional FTEs to manage increased regulatory, operational, administrative, and compliance burden under a rebate model Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. 40 hours per week will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plan. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Neighborhood Health Association urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $125,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 9,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. Neighborhood Health Association uses QS1 as its pharmacy software. Today, it works well for dispensing, billing, and basic reporting, but it is not set up to support the type of real-time rebate tracking that would be required under this model. To make this work, we would need to build new connections between our EHR, QS1, and multiple external rebate platforms. This would involve capturing and sending detailed prescription and patient data, matching what we dispense with what we purchase at WAC, and then tracking rebates that may come back later. QS1 would also need additional setup to track 340B eligibility at the prescription level and generate reports that meet different manufacturer requirements. Most of this would require vendor support and added manual work by staff, which increases both complexity and workload. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 20 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 5 Walgreens pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 5 different Walgreens pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Northwest Ohio service 7 area with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.9 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will 9 Internal NACHC survey data 8 force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.10 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.11 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. Neighborhood Health Association provides affordable medications through a sliding fee discount program based on patients income and family size in accordance with federal poverty guidelines. For eligible patients, we significantly reduce out-of-pocket costs by absorbing a portion of the medication cost and charging only a minimal acquisition cost plus a nominal dispensing fee. This ensures that uninsured and underinsured patients can access essential medications regardless of their ability to pay. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).12 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. 10 HRSA FAQ 11 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 12https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendors will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B13 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.14 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 13 https://340bpricing.hrsa.gov/ 14 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $641,678 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $27,662 to purchase these same drugs at the 340B ceiling price. This represents a 2,200% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Neighborhood Health Association anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, including care coordination efforts that support medication access and continuity of care. This includes time spent working with patients on prescription access, resolving insurance and coverage issues, and coordinating with providers to ensure appropriate therapy. We would also need to reduce support for our sliding fee medication program, which directly helps uninsured and low-income patients afford their prescriptions. Operating Hours: We anticipate needing to reduce our clinic hours by 20 hours per week, specifically impacting our working-class patient population who are only able to access care after hours. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund 2 full time clinical positions increasing wait times and decreasing healthcare access for our patients. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 1,130 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments 11 are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Neighborhood Health Association asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Neighborhood Health Association estimates its 2027 Annual Rebate Opportunity Cost to be approximately $700,000. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Neighborhood Health Association estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $53,473 Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit. This is not a sustainable solution; the interest costs alone are estimated to be funds that are currently dedicated to expanding patient access, supporting clinical staffing such as providers and nursing staff, and maintaining affordable care programs for uninsured and underinsured patients. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Neighborhood Health Association, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays 12 Neighborhood Health Association urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.15 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual loss of $100000. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP). Standardized, publicly defined denial categories with claimlevel documentation. Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial 15 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. Manufacturers must bear the burden of establishing that a rebate is not owed. Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. 14 Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Neighborhood Health Association strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Neighborhood Health Association believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Neighborhood Health Association appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Tomia Abia, at tabia@nhainc.org. 15 Sincerely, Doni Miller NEIGHBORHOOD HEALTH ASSOCIATION , CEO
HRSA-2026-0001-2408St. Luke's Health Memorial Livingston2026-04-20T04:00Z6,748 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Lukes Health Memorial Livingston, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based, community hospital serving Polk County and the surrounding East Texas region, we are committed to providing high quality care with a particular focus on low-income, uninsured, or underinsured patients. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Lukes Health Memorial Livingston that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Lukes Health Memorial Livingston relies upon the 340B drug discount program to reduce our outpatient pharmaceutical costs so that we can use more money on the things that matter mostour patients. As a nonprofit entity, we see a large number of low-income, uninsured, and under-insured patients in our facility. The savings generated through 340B allow us to expand access to care, maintain essential service lines, and support programs that directly benefit our most vulnerable patients. These include improving access to medications for patients who might otherwise go without, supporting care coordination for individuals with chronic conditions, and helping ensure that patients discharged from our hospital can continue their treatment safely at home. For many of our patients, transportation challenges, financial constraints, and limited provider availability create real barriers to care. The 340B program helps us bridge those gaps. Any disruption to the programs current structure would directly impact our ability to serve this community. Apr 20, 2026 St. Lukes Health Memorial Livingston HHS Docket No. HRSA-2026-03042 Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Lukes Health Memorial Livingston HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Lukes Health Memorial Livingston As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2409Lee County Cooperative Clinic dba Olly Neal Community Health Center2026-04-20T04:00Z12,179 chars
See attached file(s) Lee County Cooperative Clinic DBA Olly Neal Community Health Center is an FTCA Deemed Facility, registered as a 501(c)(3) nonprofit organization. EIN #71-0413798 ADMINISTRATION/ MAIN SITE 558 West Atkins Boulevard Marianna, AR 72360 (870) 295-5225/ www.ONCHC.org April 20, 2026 Chantelle Britton Director, Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Director Britton: Lee County Cooperative Clinic dba Olly Neal Community Health Center respectfully submits these comments in response to the Health Resources and Services Administrations Request for Information on the 340B Rebate Model Pilot Program. Olly Neal is a federally qualified health center in Marianna, Arkansas, operating both an in-house pharmacy and contract pharmacy arrangements. We have participated in the 340B Drug Pricing Program since December 1992, effectively since the programs inception under the Veterans Health Care Act. For thirty-three years, the upfront discount mechanism through which 340B has operated has been fundamental to our continued ability to deliver care to a patient population whose needs exceed what the resources available to a health center of our size could otherwise sustain. The proposed rebate model would disrupt that arrangement in ways that are not reconcilable with our continued mission. Patient Population Olly Neal served 1,843 patients in the most recent reporting period. Ninety-one percent live at or below 200% of the federal poverty level, and sixty-eight percent live at or below 100%. Twelve percent are uninsured. Twenty percent are enrolled in Medicaid, and twenty-two percent in Medicare. Eighty-seven percent belong to racial or ethnic minority groups. Thirty-six percent of our visits involve enabling services, reflecting the intensity of case management and supportive services our population requires to remain engaged in care. Lee County Cooperative Clinic DBA Olly Neal Community Health Center is an FTCA Deemed Facility, registered as a 501(c)(3) nonprofit organization. EIN #71-0413798 The clinical burden in our patient panel is substantial. Fifty-nine percent of our adult patients are managing hypertension and twenty-eight percent are managing diabetes, with roughly a quarter of those diabetic patients uncontrolled at levels above 9%. These prevalence rates place substantial reliance on consistent, affordable access to chronic-disease medications many of which are on the 2026 and 2027 MFP drug lists. The uninterrupted affordability of those medications is integral to our patients clinical outcomes. Projected Financial Impact Our current 340B acquisition cost on drugs included on the combined 2026 and 2027 MFP lists is $174,000 per year. Under a rebate model, the upfront cost at Wholesale Acquisition Cost on the same drug volume is approximately $1.15 million per year. The difference, approximately $974,000, is the working capital Olly Neal would be required to float to manufacturers every year the rebate mechanism operated. For an organization of our size, with limited inventory buffer and a narrow operating margin, that float is not a manageable cash adjustment. It is a recurring demand against a balance sheet that was not built to absorb it. The 2026 and 2027 MFP drug lists represent 32% of our total 340B program. If the rebate mechanism is extended beyond the MFP list to the full 340B formulary and we see no principled basis for assuming it will remain confined the annual working capital requirement grows to approximately $1.16 million. Olly Neal does not maintain unfunded liquidity at that scale, and no community bank in Lee County will extend a line of credit of that magnitude against the promise of manufacturer reimbursement on contested rebate claims. Especially when we consider the manufacturers holding all the cards, so to speak, are the same manufacturers that have been attacking our access to 340B drugs for the past five years, ignoring federal and state laws along the way. Why should we assume they will be equitable partners under this proposed rebate pilot? Independently, the Medicare Drug Price Negotiation Program has already reduced our 340B revenue by more than 20% in the first quarter of 2026. That compression is already embedded in our 2026 projections. Adding rebate-model cash demands on top of an already-reduced savings stream is the specific policy choice HRSA is being asked to authorize. Wholesaler Credit and Reconciliation Infrastructure Two operational problems surfaced during our preparation for the planned 2026 pilot, and each of them is structural. The first is wholesaler credit capacity. Our wholesaler credit limits on both our in- house and contract pharmacy sides were set based on 340B acquisition pricing. In the weeks preceding the planned pilot start, our wholesalers informed us directly that they were not prepared to extend the credit limits required to operate our 340B accounts at WAC. When credit limits are exceeded, orders are held, replenishment Lee County Cooperative Clinic DBA Olly Neal Community Health Center is an FTCA Deemed Facility, registered as a 501(c)(3) nonprofit organization. EIN #71-0413798 stops, and the 340B program ceases to function. Additional preparation time does not alter this situation. The second is reconciliation infrastructure. Our teams reviewed the third-party vendor interface manufacturers selected for rebate adjudication. The available data and reporting were not sufficient to support a reliable reconciliation process. The vendor cited HIPAA compliance as the basis for its decision not to retain prescription numbers on claims; any vendor entrusted with a function of this magnitude should meet the security requirements necessary to retain and report Rx numbers to system users. Without claim-level detail, denials cannot be matched to dispenses, corrected reason codes cannot be applied, and the cash loop on the transaction cannot be closed. Applied to our 20262027 MFP volume, a five percent denial rate a reasonable planning assumption would place approximately $60,000 at risk each year the mechanism remained in place. Point-of-Sale Mechanics We operate through both a contract pharmacy network and an in-house pharmacy. Our pharmacies dispense to our patients at the 340B price because the ceiling price is reflected in the acquisition cost at the time the prescription is filled. A rebate model changes the extended price our patient receives at the pharmacy. The entity acquires the drug at WAC, and the 340B benefit is reconciled after the fact. We appreciate that HRSA has attempted to address this by proposing an ad hoc ceiling price file for rebate-covered drugs, but our third-party administrators were not in a position to operationalize that file in the few working days of lead time before the planned 2026 start. Three outcomes are possible and none are acceptable. The pharmacy dispenses the WAC-priced 340B drug to the patient, only collecting the 340B copay from the patient, and Olly Neal floats the cost until rebate. The WAC-priced drug adjudicates at the pharmacy counter with a WAC-priced copay and the patient leaves without medication. Or the patient pays the WAC-priced copay and never returns for a refill. None of these outcomes is consistent with how a safety-net provider is supposed to deliver medication to a patient who walked into the clinic that morning. And for the twelve percent of our patients who are uninsured, a WAC-priced copay is not a hypothetical affordability concern it is the difference between filling the prescription and leaving it at the counter. When our patients fifty-nine percent of adults with hypertension, twenty-eight percent with diabetes walk out without those medications, the documented consequences follow: unnecessary hospitalizations, life-threatening thrombotic events, amputations, and early deaths. This problem also presents a direct conflict with Executive Order 14273, which instructs the Department of Health and Human Services to preserve access to 340B pricing at the point of sale for patients who depend upon it, and which conditions future Section 330(e) funding on FQHCs providing discounted insulin to low-income patients at the point of sale. A rebate mechanism, by its architecture, cannot deliver Lee County Cooperative Clinic DBA Olly Neal Community Health Center is an FTCA Deemed Facility, registered as a 501(c)(3) nonprofit organization. EIN #71-0413798 the 340B price at the point of sale. A single policy cannot satisfy both the Executive Order and the rebate model as currently proposed. Administrative Burden HRSAs Information Collection Request estimates the administrative burden of a rebate model at approximately five hours per week per covered entity. That estimate is not consistent with our observations during the 2026 preparatory period. Based on the claims volume across the combined 20262027 MFP list, Olly Neal estimates approximately 0.25 additional full-time-equivalent staff resource dedicated to rebate submission, denial management, reconciliation, and cash forecasting. For an organization our size, even a quarter FTE is a meaningful commitment, and it would be funded from the same resource pool that supports clinical and enabling services. Alternative Path for Deduplication The deduplication objective the rebate model is intended to address is a real policy matter that warrants a less burdensome solution. A neutral, federally administered 340B claims clearinghouse would accomplish that objective without placing drug manufacturers in the position of adjudicating 340B eligibility, without requiring covered entities to float substantial working capital to manufacturers, and without creating the patient access and compliance problems described above. CMS has already begun developing this framework through the 340B claims repository finalized in the CY 2026 Physician Fee Schedule. A second alternative relies on the manufacturer claims data that is already being collected from covered entities. Manufacturers currently require 340B claims data as a condition of 340B access, now even at our in-house pharmacy. While I dont appreciate this manufacturer-imposed requirement, if they are going to be permitted to require it from my organization, they should be instructed to use it for the MFP/340B deduplication process instead of pushing for further control in the mechanism of administering access to the 340B discount through a rebate model. That data is sufficient to support MFP/340B deduplication without the construction of a parallel rebate adjudication infrastructure. One operational refinement is warranted: for new pharmacy accounts, or for existing accounts that do not yet have claims history at the time a data requirement is imposed, manufacturers should be required to accept an attestation of compliance rather than withholding 340B access pending the submission of data that does not yet exist. Request For the reasons set forth above, Olly Neal Community Health Center respectfully requests that HRSA abandon the 340B Rebate Model Pilot Program in its current form; Lee County Cooperative Clinic DBA Olly Neal Community Health Center is an FTCA Deemed Facility, registered as a 501(c)(3) nonprofit organization. EIN #71-0413798 that any rebate mechanism subsequently proposed exempt federally qualified health centers; and that the deduplication question be directed to the neutral clearinghouse framework already under development at CMS, or to the existing manufacturer claims data mechanism with the attestation accommodation described above. Thank you for your consideration. Sincerely, Kellee Farris Chief Executive Officer Lee County Cooperative Clinic dba Olly Neal Community Health Center Marianna, Arkansas 340B ID: CH060060
HRSA-2026-0001-2410Patients Rising2026-04-20T04:00Z18,211 chars
Please see the attached. HRSA 340B Rebate Model RFI Document ID: HRSA-2026-0001-0001 Comment Letter: 340B Rebate Model We, the undersigned patient advocates and patient advocacy organizations from across the United States, write in response to the Health Resources and Services Administrations (HRSA) Request for Information regarding the potential implementation of a rebate model within the 340B Drug Pricing Program. We represent thousands of patients, caregivers, and families navigating a wide range of acute, chronic, and complex health conditions. While our individual experiences vary, we are united in a shared concern: todays 340B program lacks sufficient transparency, accountability, and demonstrable patient benefit. We are specifically responding to HRSAs request for input on how a potential rebate model may impact patient access, transparency, and program integrity and how the agency can ensure that any future model delivers meaningful benefit to patients. Patients Are Too Often Invisible in the 340B Program The 340B program was established to support vulnerable patients by allowing covered entities to stretch scarce resources. However, in practice, many patients remain unaware that they are part of the program at all. Patients are NOT told: When their medications are purchased under the 340B program How the program is intended to benefit them and their community Whether any savings are being passed through to support their care This lack of transparency leaves patients disconnected from a program that depends directly on their treatment and prescriptions. Patients Have a Right to Know and a Right to Understand Their Role If a patients prescription is generating revenue within one of the largest federal drug pricing programs in the country, that patient should not be left in the dark. Patients should be informed when their medications are part of the 340B program and understand whether and how they are personally benefiting from any associated discounts. Transparency is a baseline expectation, not an added feature. Without it, patients cannot make informed decisions about their care or fully understand the financial dynamics surrounding their treatment. Patient Experience Raises Serious Concerns About Financial Harm Through our work with patients and caregivers, we are increasingly seeing situations where individuals receiving care at 340B-participating hospitals and health systems are still facing significant financial hardship. Patients report: Being billed aggressively for care, even after treatment at 340B-covered entities Being sent to collections for medical bills they cannot afford Accumulating substantial medical debt tied to hospital care In some cases, facing financial distress that contributes to bankruptcy These experiences raise serious questions about whether the financial benefits generated through the 340B program are reaching patients in a meaningful way. If a program is intended to support vulnerable patients, it should not coexist with patients struggling under the weight of medical bills tied to that same system. At a minimum, there must be a clear and measurable connection between program participation and reduced financial burden for patients. Considerations for a Potential Rebate Model As HRSA evaluates whether to implement a rebate model, it is critical that patient impact remains central to the analysis. Any rebate-based approach should be carefully evaluated for: Impact on patient access to medications, particularly if changes introduce delays, denials, or new barriers to care Financial implications for patients, including whether savings are passed through or retained within the system Transparency at the point of care, ensuring patients understand when their treatment is part of the 340B program Program integrity, including whether changes improve accountability without creating administrative complexity that affects patient care Opportunities to improve both transparency and program efficiency through simple, real-time solutions. For example, existing pharmacy systems could provide a clear notification on a patients receipt or at the point of sale when a prescription is processed under the 340B program. This type of notification can be implemented without delaying care and would ensure patients are aware, in real time, when their treatment is part of the program. At the same time, rebate processing can be structured to allow timely or provisional reimbursement to covered entities, with reconciliation occurring later. This supports both patient awareness and efficient program operation. Without clear safeguards, structural changes risk further distancing patients from the intended benefits of the program. Patient Safeguards Must Be Non-Negotiable As HRSA evaluates a potential rebate model, it is essential that operational and structural changes do not come at the expense of patients. Any reform, including a rebate-based model, must be implemented in a way that maintains or improves timely patient access to medically necessary medications, without introducing delays, denials, or new barriers to care. Specifically: Patients should not experience delays in accessing medications due to rebate processing, claims validation, or administrative changes Continuity of care must be preserved, and patients who are stable on treatment should not face interruptions due to programmatic or financial model changes Treatment decisions must remain between patients and their licensed healthcare providers, free from non-clinical interference related to administrative or financial structures Transparency must extend beyond institutional reporting and be meaningful at the point of care Any savings generated through the program should result in clear, direct financial benefit to patients Data collection and reporting requirements must protect patient privacy and be designed to minimize administrative burden, without disrupting provider workflow or timely care delivery Transparency between institutions is not enough. Patients must be able to see, understand, and benefit from the program built around their care. A Clear Standard: Measurable Patient Benefit As HRSA considers whether to implement a rebate model or other changes to the program, we urge the agency to anchor its decision-making in a clear and patient-centered standard: Does the 340B program measurably benefit patients? Any future model rebate or otherwise must be evaluated based on its ability to deliver direct, transparent, and meaningful benefit to patients while preserving access, continuity of care, and clinical decision-making. Key Principles for Any 340B Reform We respectfully recommend that HRSA incorporate the following principles into 340B framework: 1. Transparency to Patients: Patients should be informed when they are receiving care or medications through the 340B program. 2. Demonstrable Patient Benefit: Covered entities should be able to show how 340B-generated savings are used to benefit patients directly, including reducing financial burden. 3. Accountability and Reporting: Reporting requirements should ensure program integrity while minimizing administrative burden and avoiding disruption to patient care. 4. Patient-Centered Program Design and Access Protection: Any rebate model or structural change should be evaluated based on its real-world impact on patient access, affordability, continuity of care, and clinical autonomy. Patients Must Be Part of the Process For too long, discussions about the 340B program have been dominated by institutional stakeholders. Patients, the individuals whose care makes the program possible, have too often been left out. Patients do not experience healthcare policy in theory. They experience it in access to medications, affordability, and financial stability. Ensuring that patients are informed participants and not invisible ones is essential to creating trust and accountability in the program. Right now we have a bloated program, with no accountability to the people generating the revenue. Conclusion The 340B program plays a significant role in our healthcare system and with that role comes responsibility. To maintain its credibility and fulfill its original purpose, it must clearly and consistently serve patients and the communities it is intended to support. Patients should not be invisible participants in a program built around their care. They should be informed, included, and meaningfully supported. Together, we respectfully urge HRSA to implement the 340B Rebate Pilot Program with clear patient protections and to ensure that transparency, accountability, and measurable patient benefit are the standard for this and all future 340B policy decisions. Signatories This letter reflects the voices of thousands of patients and caregivers across the country, brought together through individual advocates and patient advocacy organizations to ensure the patient perspective is heard in this process. Together, we respectfully urge HRSA to implement the 340B Rebate Pilot in a way that protects patients and ensures they are informed, included, and meaningfully benefit from the program and to make transparency, accountability, and measurable patient benefit the standard for all future 340B policy decisions. 1. Melissa Griffin, AL-02 2. Jillian Deas, AL-07 3. Brittany Wells, AL-07 4. Marcia Horn, AZ-01, ICAN, International Cancer Advocacy Network 5. Ryan Cooper, AZ-01 6. Donald Wedington-Clark, AZ-03 7. Samantha Ortiz, AZ-03 8. Miguel Ortega, AZ-04 9. Danielle Morales, AZ-05 10. Kelsey White, AZ-06 11. Erica Flores, AZ-07 12. Cameron Ross, AZ-08 13. James Zylstra, AZ-08 14. Sue Ellen Lupien, AR-02 15. Robert Smith, AR-02 16. Pam Krupinsky, CA-01 17. Peter A. Gruber, Jr., CA-03 18. Melissa Moya, CA-06 19. Tomisa Starr, CA-07 20. Maya Shah, CA-12 21. Yuri Cardenas, CA-12 22. Robert Chen, CA-17 23. Nathan Kim, CA-18 24. Emily Chen, CA-19 25. Daljeet Sandhu, CA-19 26. Carla Jimenez, CA-21 27. Maria Gutierrez, CA-22 28. Victor Castillo, CA-25 29. Vanessa Kim, CA-27 30. Heidi Allyce, CA-29 31. Julian Chavez, CA-29 32. Donna Cunningham, CA-30 33. Victor Perez, CA-32 34. Alicia Ramirez, CA-34 35. Sofia Ramirez, CA-35 36. Julian Morales, CA-36 37. Tom Norris, CA-37 38. Luis Martinez, CA-38 39. Angela Nguyen, CA-39 40. Jennifer Lopez, CA-40 41. Natalia Torres, CA-41 42. Isabella Moreno, CA-44 43. Rachel Kim, CA-45 44. Daniel Park, CA-47 45. Nancy Bergman, CA-49 46. Kevin Tran, CA-49 47. Monica Reyes, CA-51 48. Hannah Brooks, CO-01 49. Raewyn Moody, CO-02 50. Taylor Reed, CO-02 51. Samantha Long, CO-04 52. Amanda Boone, CO-05, CF United 53. Madison Cole, CO-05 54. Eric Davidson, CO-06 55. Maria Dastur, CO-07 56. Spencer Gray, CO-07 57. Jeffrey Adamson, CT-01 58. Paula Goodwin, CT-05 59. Nancy Brimhall, FL-01 60. Latoya Harris, FL-05 61. Keith Folsom, FL-07 62. Vanessa Cruz, FL-09 63. Jalen Brooks, FL-10 64. Maggie Senese, FL-11 65. Gabriella Cruz, FL-13 66. Danielle Scott, FL-14 67. Olivia Cruz, FL-16 68. Jennifer Garzia, FL-16 69. Justin Powell, FL-18 70. Jose Rios, FL-20 71. Desiree Love-Holliday, FL-21 72. Devin Gray, FL-23 73. Kiara Bryant, FL-24 74. Diego Torres, FL-26 75. Dorothea Lantz, FL-27 76. Michelle Torbert, FL-28 77. Ralph Maddox, GA-01 78. Terrance Green, GA-02 79. Faith Carter, GA-03 80. Amber Richardson, GA-04 81. Darnell Price, GA-05 82. Monica Pierce, GA-06 83. Kendall Price, GA-06 84. Kimberly Gonzalez, GA-07 85. Maureen Ratliff, GA-07 86. Kayla Thompson, GA-07 87. Tasha Brown, GA-11 88. Dominique Carter, GA-13 89. Devon Harris, GA-14 90. Carmen Mitsuyasu-Gapero, HI-01 91. Sarah Jusselin, ID-01 92. Wayne Jusselin, ID-01 93. Karen Ford, IL-01 94. Malik Johnson, IL-01 95. Marcus Coleman, IL-02 96. Marcus Fields, IL-06 97. Angela Brooks, IL-07 98. Courtney Miles, IL-09 99. Tyrese Jackson, IL-10 100. Patrick OBrien, IL-11 101. Janet Harmon, IL-13 102. Lauren Price, IL-13 103. Kathy Missel, IL-15 104. Lauren Ewing, IN-03 105. Abigail Foster, IN-05 106. Nicole Fisher, IN-07 107. Mike Lane, KS-01 108. Mary Sykes, KY-02 109. Stephanie Ward, KY-03 110. Holly Stewart, KY-04 111. Becky Barnes, KY-06 112. Zachary Cox, KY-06 113. Jolie Lizana, LA-01 114. Terrence Hall, LA-02 115. Aurlisa Isom, LA-02 116. Hillary Golden, LA-03 117. Adele Gradnigo, LA-03 118. Latasha Holt, Ph.D., LA-03 119. Vickie Wilkerson, LA-04 120. Jerome Lewis, MD-03 121. Jamal Washington, MD-04 122. Chantel Davis, MD-05 123. Rick Dowlearn, MD-06 124. Brandon Scott, MD-07 125. Andre Jackson, MD-08 126. Connor Walsh, MA-03 127. Erin Walsh, MA-06 128. Brian McCarthy, MA-08 129. Jody Quinn, MA-09 130. Kayla Miller, MI-01 131. Brian Zbikowski, MI-04 132. Gerald Auth, MI-06 133. Angela Mlot, MI-07 134. DeShawn Carter, MI-08 135. Kathleen Luis, MI-09, Amyloidosis Foundation 136. Andre Thomas, MI-10 137. Mike Zyrek, MI-10 138. Marcus Dunn, MI-11 139. Julie Tazzia, MI-11, Chronic Migraine Awareness 140. Emily Sanders, MI-12 141. Anthony Dorsey, MI-13 142. Andre Lewis, MI-13 143. Samantha Wood, MI-13 144. Sierra James, MI-14 145. Jennifer Andrews, MN-02 146. Omar Hassan, MN-05 147. Derek Simmons, MS-02 148. Ann Smith, MS-02 149. Ashley Green, MO-01 150. Mary Cremer, MO-03 151. Shanta Jones, MO-05 152. Darlene Shelton, MO-08 153. Gennifre Hartman, MT-01 154. Jimmy Crake, NE-01 155. Mary Rogge, NE-01 156. Madison Skyler Bowe, NV-01 157. Kevin Morales, NV-01 158. Ricky Alvarez, NV-03 159. Jason Cruz, NV-04 160. Helen Moore Powell, NV-04 161. Lauren Silverman, NH-01 162. Nancy Reese, NJ-01 163. Mitch Simpson, NJ-01 164. Kathleen Killen, NJ-02 165. Sean OConnor, NJ-05 166. Tanya Singh, NJ-10 167. Victor Alvarez, NM-01 168. Elena Vasquez, NM-02 169. Brittany Diaz, NM-03 170. Deborah Boomhower, NY-01 171. Kristen ONeill, NY-03 172. Ramon Delgado, NY-04 173. Ariana Gomez, NY-07 174. Julio Sanchez, NY-09 175. Rachel Cohen, NY-10 176. Jordan Ellis, NY-11 177. Anthony Rivera, NY-12 178. Tiffany Evans, NY-14 179. Hector Rivera, NY-15 180. Beth Travis, NY-16 181. Brian Wilanowicz, NY-16 182. Kathy Wilanowicz, NY-16 183. Donna Cinelli, NY-19 184. Mikhail gan, NY-19 185. Patt Campbell, NY-20 186. Ellen Collins, NY-21 187. Vincent Chiffy, NY-22 188. Amy Gietzen, NY-26 189. Kenneth Davis, NY-30 190. Derrick Hayes, NC-01 191. Naomi Aziz, NC-03 192. Anthony White, NC-03 193. Megan Powell, NC-04 194. Noah Stewart, NC-07 195. Jasmine Hill, NC-09 196. Deborah Kofoed, NC-10 197. Brandon Price, NC-10 198. Monique Jefferson, NC-12 199. Georgine Robertshaw, NC-13 200. Logan Murphy, OH-01 201. Kevin Prather, OH-02 202. Brianna Clark, OH-03 203. Margaret Scott, OH-05 204. Isaac Green, OH-09 205. Christopher Dunn, OH-11 206. Caleb Foster, OH-12 207. Judith Peter, OH-12 208. Emily Watson, OH-15 209. Jenny Jones, OK-03 210. Kayla Adams, OK-05 211. Lauren La Riva, OR-01 212. Olivia Bennett, OR-03 213. Jennifer Davies, OR-03 214. Anna Salgado, OR-06 215. Carol Adams, PA-01 216. Karen WilkinsonTuthill, PA-01 217. Courtney Blake, PA-02 218. Jordan Bell, PA-03 219. Amy Grove, PA-04 220. Lynn Stevens, PA-04 221. Stephen Young, PA-04 222. Dylan Ross, PA-06 223. Melissa Gensch, PA-07 224. Owen Brooks, PA-08 225. Frieda Savacool, PA-08 226. Jackeline Candelario, PA-09, Friends of the PBC Foundation 227. Andrew Haflett, PA-09 228. Patricia Kross, PA-09 229. Paul Kross, PA-09 230. Giselle Savitski, PA-09 231. Liam Bennett, PA-10 232. John Brown, PA-15, Browns Pharmacy 233. Jessamyn Butler, PA-16 234. Tami Seretti, PA-17 235. Trevor Hill, SC-01 236. Lee Fogle, SC-02, Pulmonary Success Circles 237. Darius Thompson, SC-02 238. Brandon Hughes, SC-05 239. Isaiah Turner, SC-06 240. Kerri Engebrecht, TN-02 241. Lindsey Harper, TN-05 242. Jessica Baladad, TN-07, Feel for Your Life 243. Haley Carter, TN-07 244. Calvin Brooks, TN-08 245. Trevor Banks, TN-09 246. Bradley Bolding, TX-03 247. Jordan Bolding, TX-03 248. Bridget Merrill, TX-03 249. David Merrill, TX-03 250. Michele Rayes, TX-04, HypoPARAthyroidism Association 251. Taylor Samsel, TX-05 252. Bryce Walker, TX-05 253. Marcus Bennett, TX-07 254. Carlos Mendez, TX-09 255. Isabel Flores, TX-11 256. Terrence King, TX-13 257. Jose Delgado, TX-15 258. Michelle Diaz, TX-16 259. Faith Robinson, TX-18 260. Kimberly Dross, TX-20 261. Luis Herrera, TX-20 262. Jackie Melcher, TX-21 263. Alex Romero, TX-21 264. Scott Frazer, TX-24 265. Hector Soto, TX-24 266. Melissa Tison, TX-24 267. Rachel Nessmith, TX-26 268. Victor Santos, TX-28 269. Natalie Cruz, TX-29 270. Alexis Price, TX-30 271. Kay Frazer, TX-31 272. Larry Frazer, TX-31 273. Josh Broderick, TX-37 274. Kim Broderick, TX-37 275. Sam Miller, TX-37, Infusion Access Foundation 276. Jordan Freeman, VA-02 277. Corey Mitchell, VA-03 278. Kyle Simmons, VA-05 279. Jessica Critzer-Fox, VA-07 280. Austin Reed, VA-07 281. Paige Turner, VA-08 282. Lauren Bishop, VA-09 283. Heather Collins, VA-10 284. Greg Josephs, VA-10 285. Evan Berenholtz, VA-11 286. Derek Johnson, VA-11 287. Sandra Merrill, VA-11 288. Terry Wilcox, VA-11, Patients Rising 289. Sophia Kim, WA-02 290. Kaylee Brooks, WA-03 291. Brielle Scott, WA-05 292. Gloria Bray, WA-05 293. Penny Chambers, WA-06 294. Michelene Manion, WA-06 295. Richard Monroe, WA-06 296. Chloe Turner, WA-07 297. Lada Rodzhers, WA-08 298. Tyler Nguyen, WA-09 299. Ethan Park, WA-10 300. Edward Jordan, WV-01 301. Sherri Mills, WV-02 302. Mark Weitkum, WI-01 303. Katie Moureau, WI-02 304. Rosie Maloney, WI-06 305. Lynne Petruzates, WI-07 306. Kellie Gasser, WI-08 307. Jimmy Hartman, WY-05 308. Michelle Stifle, WY-01
HRSA-2026-0001-2411Variety Care2026-04-20T04:00Z12,637 chars
See attached file(s) April 12, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: Thank you for the opportunity to provide feedback on the proposed 340B rebate model. We appreciate HRSAs intent to explore how the proposed model will impact the Americans Congress initially intended to help through the creation of the 340B program. Variety Care is the largest Community Health Center in the state of Oklahoma. In 2025, we provided quality and affordable health care for 88,750 Oklahomans, in 160+ zip codes across the state. Since our inception in 1932, no program has had a greater impact on our ability to serve increasing numbers of uninsured and underinsured individuals than the 340B program. Through 340B savings, our organization has created new programs and expanded services such dental care for underinsured and uninsured adults; helped patients fill life-saving medications such as insulin therapies; and worked with contract pharmacies to help patients living in rural counties fill their prescriptions in their hometown. This letter gives examples of the cost impacts Variety Care would be faced with if a 340B rebate model is implemented, with the knowledge that behind every dollar impact, there is a greater impact to patient care. Under a 340B rebate model, Variety Cares patients will face higher out-of-pocket costs, particularly for high-cost therapies. This could lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. Put simply, the gains weve made in preventative care will be reduced as our patients make the tough decision to forego certain prescriptions, resulting in exacerbation of symptoms of chronic illnesses. These same patients will eventually seek care for their chronic illnesses at more expensive settings such as the emergency room, resulting in higher costs for every American. Cost Impacts Based on our organizations data, we estimate it would cost $3,678,659 to purchase the 10 drugs under the proposed rebate model in 2026. This represents an increase in upfront capital required for procurement, and a loss in 340B savings of $1,051,163 in 2026. Impact to Essential Clinical Services Each year, our patients see approximately $9,962,000 in medical cost savings as a result of Variety Cares 340B reinvestment. By requiring Variety Care to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 88,750 patients who rely on us. Variety Care currently reinvests 340B savings across multiple programs serving patients, where we use 30% of savings ($2,988,600) to provide sliding fee discounts and health care for more than 21,000 uninsured patients in 2025; 25% of the 340B savings ($2,490,500) are reinvested into primary care for our patients; 35% ($3,486,700) are reinvested into providing dental care, in which many of our patients do not have insurance coverage; and finally 10% ($996,200) of 340B savings are reinvested into behavioral health. To offset the upfront cost of drugs, Variety Care would be forced to scale back non-revenue- generating but essential services, such as emergency and regular dental care for children and adults; our mobile dental unit that provides dental care to rural school districts; and our immunization van partnership which provides free immunizations to children at school settings and other community gatherings, for example. Patient access to pharmacy services could be limited As a rebate model would shift the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. For Variety Care patients, this would leave six counties across the state of Oklahoma with fewer to no affordable medication options. Over 17% of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30% of pharmacies that opened from 2010 to 2021 closing by 2021. Administrative Burden Staffing and External Vendor Costs: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Given the increased complexity to operationalize the rebate model in our pharmacy program, we anticipate hiring 1 FTE to support administrative functions. Variety Care anticipates an increase in costs for external support vendors. These vendors will likely include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Closing Under a 340B rebate model, every dollar Variety Care pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. To mitigate the expected rebate pilot impacts detailed in this letter, Variety Care strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Sincerely, Lou Carmichael President and CEO Variety Care April 12, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: Thank you for the opportunity to provide feedback on the proposed 340B rebate model. We appreciate HRSAs intent to explore how the proposed model will impact the Americans Congress initially intended to help through the creation of the 340B program. Variety Care is the largest Community Health Center in the state of Oklahoma. In 2025, we provided quality and affordable health care for 88,750 Oklahomans, in 160+ zip codes across the state. Since our inception in 1932, no program has had a greater impact on our ability to serve increasing numbers of uninsured and underinsured individuals than the 340B program. Through 340B savings, our organization has created new programs and expanded services such dental care for underinsured and uninsured adults; helped patients fill life-saving medications such as insulin therapies; and worked with contract pharmacies to help patients living in rural counties fill their prescriptions in their hometown. This letter gives examples of the cost impacts Variety Care would be faced with if a 340B rebate model is implemented, with the knowledge that behind every dollar impact, there is a greater impact to patient care. Under a 340B rebate model, Variety Cares patients will face higher out-of-pocket costs, particularly for high-cost therapies. This could lead to delays in starting or continuing treatment, and increased non-adherence, causing rates of avoidable complications and hospitalizations to rise. Put simply, the gains weve made in preventative care will be reduced as our patients make the tough decision to forego certain prescriptions, resulting in exacerbation of symptoms of chronic illnesses. These same patients will eventually seek care for their chronic illnesses at more expensive settings such as the emergency room, resulting in higher costs for every American. Cost Impacts Based on our organizations data, we estimate it would cost $3,678,659 to purchase the 10 drugs under the proposed rebate model in 2026. This represents an increase in upfront capital required for procurement, and a loss in 340B savings of $1,051,163 in 2026. Impact to Essential Clinical Services Each year, our patients see approximately $9,962,000 in medical cost savings as a result of Variety Cares 340B reinvestment. By requiring Variety Care to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect our ability to serve the 88,750 patients who rely on us. Variety Care currently reinvests 340B savings across multiple programs serving patients, where we use 30% of savings ($2,988,600) to provide sliding fee discounts and health care for more than 21,000 uninsured patients in 2025; 25% of the 340B savings ($2,490,500) are reinvested into primary care for our patients; 35% ($3,486,700) are reinvested into providing dental care, in which many of our patients do not have insurance coverage; and finally 10% ($996,200) of 340B savings are reinvested into behavioral health. To offset the upfront cost of drugs, Variety Care would be forced to scale back non-revenue-generating but essential services, such as emergency and regular dental care for children and adults; our mobile dental unit that provides dental care to rural school districts; and our immunization van partnership which provides free immunizations to children at school settings and other community gatherings, for example. Patient access to pharmacy services could be limited As a rebate model would shift the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. For Variety Care patients, this would leave six counties across the state of Oklahoma with fewer to no affordable medication options. Over 17% of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30% of pharmacies that opened from 2010 to 2021 closing by 2021. Administrative Burden Staffing and External Vendor Costs: The rebate model creates a reconciliation gap. Our staff must monitor claims across different pharmacy locations to ensure rebates are paid correctly. Given the increased complexity to operationalize the rebate model in our pharmacy program, we anticipate hiring 1 FTE to support administrative functions. Variety Care anticipates an increase in costs for external support vendors. These vendors will likely include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Closing Under a 340B rebate model, every dollar Variety Care pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution. To mitigate the expected rebate pilot impacts detailed in this letter, Variety Care strongly urges HRSA to take the following steps: HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. Sincerely, Lou Carmichael President and CEO Variety Care
HRSA-2026-0001-2412Community Health Centers of the Central Coast2026-04-20T04:00Z99,234 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Centers of the Central Coast I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Community Health Centers of the Central Coast anticipates a loss of $325,000/yr minimally for in-house and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and external vendor costs. If denials are estimated to be 10% of all claims, then we estimate a loss of $686,334.29/yr. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Community Health Centers of the Central Coast, Inc. (CHC) is a 501(c)(3) non-profit network of community health centers serving the residents of Californias Central Coast. Conveniently located throughout San Luis Obispo and northern Santa Barbara counties, our committed team of healthcare professionals are dedicated to maintaining your health and well-being. We offer fully accredited Medical, Dental and Chiropractic care as well as Health Education and Specialty Care. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly 2 reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Community Health Centers of the Central Coast in particular, this means it will impact: 147,649 transactions for 124,834 patients Current admin fees are $2,735,993.00 The 340B Program enables covered entities, such as Federally Qualified Health Centers, to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The 340B Program is beneficial for CHC. Our patients benefit from reduced drug pricing, and cost savings allow CHC to invest in expanded patient services. The 340B Program, after all program expenses (drug costs, related 340B staff salaries and all other related expenses) were deducted, providing additional savings which have allowed CHC to realize its mission of providing quality health care services to the medically underserved community. CHC serves more than 120,000 patients in San Luis Obispo and northern Santa Barbara Counties. The 340B Program has been able to benefit the majority of these patients. Examples of programs that will be made possible through the use of 340B funds are described below: CHC provides free nutrition and disease prevention and management education through regularly scheduled classes. The curriculum covers chronic condition education, proper nutrition, exercise, and healthy lifestyle choices. In addition to group education, CHCs registered dietitians and health educators provide individualized nutrition and lifestyle counseling to support disease prevention and management. These services help patients achieve healthy weight goals, manage chronic conditions, and make sustainable behavior changes that promote overall well-being. CHC also offers educational sessions for staff on integrating these benefits into the Patient-Centered Medical Home model of care, reinforcing coordinated, preventative, and whole-person health services. With an aging population, there are plans to place more emphasis on services for seniors. These services will be developed and using funds from the 340B program, will be offered at low or no cost to insure affordability. These services will include audiology, optometry, selected diagnostic testing, behavioral health, and transportation services. CHC will enhance their current telemedicine capabilities by investing in equipment and expanding their telemedicine provider network. This will help CHC deliver a more robust selection of specialty services, which will be capable of reaching more rural areas. CHC will also pilot Remote Patient Monitoring (RPM) systems and invest in RPM equipment for populations experiencing chronic disease. Transportation Services 3 CHC provides/pays for transportation for underserved populations who lack transportation to obtain health care at CHC facilities. Transportation is necessary for all patient populations especially as many of our patients live in rural areas with decreased access to public transportations. Population Health CHC uses population health software to improve patient outcomes by aggregating data from electronic health records (EHRs), claims, and social determinants of health (SDOH) to identify high-risk groups, close care gaps, and enable proactive and personalized interventions. CHC uses this approach to reach out to CHCs sickest patients and improve health outcomes. Outreach Program Community Health Centers of the Central Coast (CHC) operates a robust community health outreach program aimed at closing the gap in healthcare access for disadvantaged communities on the Central Coast. The CHC Outreach Team provides mobile healthcare outreach services and health service linkage for agricultural workers, the homeless, public housing residents, students, veterans, immigrants, refugees, and other medically underserved and uninsured community members: Collaborating with local Community Based Organizations (CBOs) to provide healthcare resources and care linkage to food distribution centers, low-income and public housing sites, community parks, places of worship, public schools, and agricultural worker housing sites; Providing mobile medical healthcare services for agricultural workers throughout Northern Santa Barbara and San Luis Obispo Counties, in collaboration with local employers, public health departments, Spanish language radio stations, and other CBOs; Providing mobile medical healthcare services (immunizations, hearing, and vision testing) at local schools in Northern Santa Barbara and San Luis Obispo Counties; Conducting Medi-Cal/Health Insurance enrollment and outreach to connect uninsured community members with assistance in attaining, maintaining, or renewing their health coverage; and Providing mobile dental clinics in rural communities, local schools, and homeless shelters to provide preventive dental care services to children and their families. CHC continues to strengthen its Outreach Program to facilitate access to quality healthcare and address the health equity needs of patients outside of traditional clinic settings. Through its efforts, the CHC Outreach Team brings critical services and information directly to community members to ensure that healthcare services are available to all. The CHC Outreach Team will continue to respond to community needs based on a community needs assessment and other tools tailored to the needs of the diverse populations being served with in Northern Santa Barbara and San Luis Obispo Counties. 4 We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 5 The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 6 need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Community Health Centers of the Central Coast provided $17,153,332.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Community Health Centers of the Central Coast anticipates needing another FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Community Health Centers of the Central Coast anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, wholesalers, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. A large percentage of this increase is due to McKesson wholesaler costs. McKesson wholesaler charges every CE an additional 4% Fee on top of the acquisition pricing. If acquisition pricing changes from 340B pricing to WAC, this would greatly increase the amount of fees we have to pay to this wholesaler. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 We estimate that another FTE would have to be hired. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing 7 Internal NACHC assessment (99 responses). 8 Ibid. 7 drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. As we are a healthcare system located in California, we estimate that another FTE would cost $115,000/yr including benefits. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that this program will take 40 hrs to complete, as we will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Community Health Centers of the Central Coast urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $25,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 124,834 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $170,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs ($10,000) to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 6 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 86 pharmacies to increase access to affordable medications. 8 TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 87 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in San Luis Obispo and Northern Santa Barbara Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 11 Internal NACHC survey data 9 disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 10 cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 11 Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ 5,410,344.18 to purchase these 10 drugs under the proposed rebate model. In that same time, our organization spent $437,280.79 to purchase these same drugs at the 340B ceiling price. This represents a 1137% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Community Health Centers of the Central Coast anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as reducing transportation services, outreach program, specialty services such dentistry. We have a mobile health unit which provides immunization and healthcare information to the community which well have to limit or drop entirely. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 10,787 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Community Health Centers of the Central Coast asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. 12 Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Community Health Centers of the Central Coast estimates the late fee (if all invoices are not paid promptly) to be approximately 18% of WAC or $973,861.95. Community Health Centers of the Central Coast estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $377,981.88. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be 5.4% annually or $292,158.59funds that are currently dedicated to womens health and healthcare education. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Community Health Centers of the Central Coast, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Community Health Centers of the Central Coast urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 A major source of potential denials is the 45 day window from the date of dispense to submit information. In order submit this information, the product needs to have been replenished within that 45 day window. The problem is that the 45 day window is too short. For contract pharmacies: 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 The contract pharmacy is in charge of replenishment and many will only replenish when there is need such as Walmart. There are multiple processors between drug being dispensed and CE being given information to submit rebate information including contract pharmacy, TPA, gateway TPA, our own 340B staff, our own medical staff, and the specialty office. If any of these processors linger on a claim, the 45 day limit may have passed resulting in a denial. Drug shortages All these factors, make the possibility that drug replenishment of the 10 IRA drugs could go over the 45 day window. Below is a histogram of the number of days between dispense date and replenishment date at CVS Pharmacies for the 10 IRA drugs for the 2025 calendar year. Approximately, 8% of any claims will not be replenished in 45 days and thus immediately cause a denial beyond our control. Not only will we be unable to collect the savings, but we will have had to purchase the product at WAC pricing. As to why 45 days is chosen, we were told during Beacon webinars that this is the standard amount of time it takes between drug dispense and drug replenishment. However, we can find nowhere in any Google search or consultation with pharmacists where this information comes from. More than likely, 45 days was chosen because it is the submission day limit for manufacturer claims in 0 10 20 30 40 50 60 70 80 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110 115 120 125 130 135 140 145 150 155 160 165 170 175 180 185 190 195 200 Days from Drugs Dispense to Drug Replenishment for CVS Pharmacies (2025 Calendar Year) Number of Instances for 10 IRA Drugs Days from Drug Dispense to Replenishment 45 Day Limit 14 340B ESP, Beacons sister company, and thus completely arbitrary. When we emailed Beacon about what would happen if we submit data after the 45 day limit, their response would be evasive. In conclusion, such a time limit can only benefit the manufacturers as it would increase the likelihood of denials. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual savings loss of $686,334.29 (calculated as denial rate of WAC and lost savings) This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. 15 OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. 16 Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Community Health Centers of the Central Coast strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. [Community Health Centers of the Central Coast believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Community Health Centers of the Central Coast appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Director of 340B: Derek Yip (derek.yip@chccc.org) Sincerely, Ron E. Castle Community Health Centers of the Central Coast April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Centers of the Central Coast I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Community Health Centers of the Central Coast anticipates a loss of $325,000/yr minimally for in-house and contract pharmacy arrangements due to the administrative hurdles of manual reconciliation and external vendor costs. If denials are estimated to be 10% of all claims, then we estimate a loss of $686,334.29/yr. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. Community Health Centers of the Central Coast, Inc. (CHC) is a 501(c)(3) non-profit network of community health centers serving the residents of Californias Central Coast. Conveniently located throughout San Luis Obispo and northern Santa Barbara counties, our committed team of healthcare professionals are dedicated to maintaining your health and well-being. We offer fully accredited Medical, Dental and Chiropractic care as well as Health Education and Specialty Care. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Community Health Centers of the Central Coast in particular, this means it will impact: 147,649 transactions for 124,834 patients Current admin fees are $2,735,993.00 The 340B Program enables covered entities, such as Federally Qualified Health Centers, to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The 340B Program is beneficial for CHC. Our patients benefit from reduced drug pricing, and cost savings allow CHC to invest in expanded patient services. The 340B Program, after all program expenses (drug costs, related 340B staff salaries and all other related expenses) were deducted, providing additional savings which have allowed CHC to realize its mission of providing quality health care services to the medically underserved community. CHC serves more than 120,000 patients in San Luis Obispo and northern Santa Barbara Counties. The 340B Program has been able to benefit the majority of these patients. Examples of programs that will be made possible through the use of 340B funds are described below: CHC provides free nutrition and disease prevention and management education through regularly scheduled classes. The curriculum covers chronic condition education, proper nutrition, exercise, and healthy lifestyle choices. In addition to group education, CHCs registered dietitians and health educators provide individualized nutrition and lifestyle counseling to support disease prevention and management. These services help patients achieve healthy weight goals, manage chronic conditions, and make sustainable behavior changes that promote overall well-being. CHC also offers educational sessions for staff on integrating these benefits into the Patient-Centered Medical Home model of care, reinforcing coordinated, preventative, and whole-person health services. With an aging population, there are plans to place more emphasis on services for seniors. These services will be developed and using funds from the 340B program, will be offered at low or no cost to insure affordability. These services will include audiology, optometry, selected diagnostic testing, behavioral health, and transportation services. CHC will enhance their current telemedicine capabilities by investing in equipment and expanding their telemedicine provider network. This will help CHC deliver a more robust selection of specialty services, which will be capable of reaching more rural areas. CHC will also pilot Remote Patient Monitoring (RPM) systems and invest in RPM equipment for populations experiencing chronic disease. Transportation Services CHC provides/pays for transportation for underserved populations who lack transportation to obtain health care at CHC facilities. Transportation is necessary for all patient populations especially as many of our patients live in rural areas with decreased access to public transportations. Population Health CHC uses population health software to improve patient outcomes by aggregating data from electronic health records (EHRs), claims, and social determinants of health (SDOH) to identify high-risk groups, close care gaps, and enable proactive and personalized interventions. CHC uses this approach to reach out to CHCs sickest patients and improve health outcomes. Outreach Program Community Health Centers of the Central Coast (CHC) operates a robust community health outreach program aimed at closing the gap in healthcare access for disadvantaged communities on the Central Coast. The CHC Outreach Team provides mobile healthcare outreach services and health service linkage for agricultural workers, the homeless, public housing residents, students, veterans, immigrants, refugees, and other medically underserved and uninsured community members: Collaborating with local Community Based Organizations (CBOs) to provide healthcare resources and care linkage to food distribution centers, low-income and public housing sites, community parks, places of worship, public schools, and agricultural worker housing sites; Providing mobile medical healthcare services for agricultural workers throughout Northern Santa Barbara and San Luis Obispo Counties, in collaboration with local employers, public health departments, Spanish language radio stations, and other CBOs; Providing mobile medical healthcare services (immunizations, hearing, and vision testing) at local schools in Northern Santa Barbara and San Luis Obispo Counties; Conducting Medi-Cal/Health Insurance enrollment and outreach to connect uninsured community members with assistance in attaining, maintaining, or renewing their health coverage; and Providing mobile dental clinics in rural communities, local schools, and homeless shelters to provide preventive dental care services to children and their families. CHC continues to strengthen its Outreach Program to facilitate access to quality healthcare and address the health equity needs of patients outside of traditional clinic settings. Through its efforts, the CHC Outreach Team brings critical services and information directly to community members to ensure that healthcare services are available to all. The CHC Outreach Team will continue to respond to community needs based on a community needs assessment and other tools tailored to the needs of the diverse populations being served with in Northern Santa Barbara and San Luis Obispo Counties. We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Community Health Centers of the Central Coast provided $17,153,332.00 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Community Health Centers of the Central Coast anticipates needing another FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Community Health Centers of the Central Coast anticipates an increase of $100,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, wholesalers, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. A large percentage of this increase is due to McKesson wholesaler costs. McKesson wholesaler charges every CE an additional 4% Fee on top of the acquisition pricing. If acquisition pricing changes from 340B pricing to WAC, this would greatly increase the amount of fees we have to pay to this wholesaler. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. We estimate that another FTE would have to be hired. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. As we are a healthcare system located in California, we estimate that another FTE would cost $115,000/yr including benefits. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. We estimate that this program will take 40 hrs to complete, as we will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Community Health Centers of the Central Coast urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. $25,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 124,834 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $170,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. One-Time Integration Costs: We anticipate high upfront costs ($10,000) to pay software vendors for custom API builds and "Price File" reconciliation tools. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 6 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 86 pharmacies to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 87 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in San Luis Obispo and Northern Santa Barbara Counties with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $ 5,410,344.18 to purchase these 10 drugs under the proposed rebate model. In that same time, our organization spent $437,280.79 to purchase these same drugs at the 340B ceiling price. This represents a 1137% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Community Health Centers of the Central Coast anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as reducing transportation services, outreach program, specialty services such dentistry. We have a mobile health unit which provides immunization and healthcare information to the community which well have to limit or drop entirely. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 10,787 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Community Health Centers of the Central Coast asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Community Health Centers of the Central Coast estimates the late fee (if all invoices are not paid promptly) to be approximately 18% of WAC or $973,861.95. Community Health Centers of the Central Coast estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $377,981.88. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be 5.4% annually or $292,158.59funds that are currently dedicated to womens health and healthcare education. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Community Health Centers of the Central Coast, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Community Health Centers of the Central Coast urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. A major source of potential denials is the 45 day window from the date of dispense to submit information. In order submit this information, the product needs to have been replenished within that 45 day window. The problem is that the 45 day window is too short. For contract pharmacies: The contract pharmacy is in charge of replenishment and many will only replenish when there is need such as Walmart. There are multiple processors between drug being dispensed and CE being given information to submit rebate information including contract pharmacy, TPA, gateway TPA, our own 340B staff, our own medical staff, and the specialty office. If any of these processors linger on a claim, the 45 day limit may have passed resulting in a denial. Drug shortages All these factors, make the possibility that drug replenishment of the 10 IRA drugs could go over the 45 day window. Below is a histogram of the number of days between dispense date and replenishment date at CVS Pharmacies for the 10 IRA drugs for the 2025 calendar year. Approximately, 8% of any claims will not be replenished in 45 days and thus immediately cause a denial beyond our control. Not only will we be unable to collect the savings, but we will have had to purchase the product at WAC pricing. As to why 45 days is chosen, we were told during Beacon webinars that this is the standard amount of time it takes between drug dispense and drug replenishment. However, we can find nowhere in any Google search or consultation with pharmacists where this information comes from. More than likely, 45 days was chosen because it is the submission day limit for manufacturer claims in 340B ESP, Beacons sister company, and thus completely arbitrary. When we emailed Beacon about what would happen if we submit data after the 45 day limit, their response would be evasive. In conclusion, such a time limit can only benefit the manufacturers as it would increase the likelihood of denials. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 10% denial rate would result in a net annual savings loss of $686,334.29 (calculated as denial rate of WAC and lost savings) This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Community Health Centers of the Central Coast strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. [Community Health Centers of the Central Coast believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Community Health Centers of the Central Coast appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact our Director of 340B: Derek Yip (derek.yip@chccc.org) Sincerely, Ron E. Castle Community Health Centers of the Central Coast
HRSA-2026-0001-2413St. Joseph's Health Burelson2026-04-20T04:00Z6,421 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Health Burleson, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based community hospital serving Burleson County and the surrounding region, we are committed to delivering high quality, compassionate care with a focus on patients who are low-income, uninsured, or underinsured. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Joseph Health Burleson relies on the 340B program to help offset the cost of outpatient medications and sustain essential services in a community where access to care can be limited. The savings generated through 340B allow us to reinvest directly into patient care, including expanding access to medications, supporting care coordination for patients with chronic conditions, and ensuring continuity of care after discharge. Apr 20, 2026 St. Joseph Health Burleson HHS Docket No. HRSA-2026-03042 Many of our patients face real barriers, including financial constraints, transportation challenges, and limited availability of specialty care in the region. The 340B program helps us close those gaps and maintain a strong, local healthcare presence. Any disruption to the current model would directly affect our ability to meet these needs. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Joseph Health Burleson HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Joseph Health Burleson As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2414UW Health2026-04-20T04:00Z36,577 chars
See attached letter. April 20, 2026 Via Online Submission to www.FederalRegister.gov Chantelle V. Britton, M.P.A, M.S. Director, Office of Pharmacy Affairs Health Resources and Service Administration 5600 Fishers Lane, Mail Stop 14W52 Rockville, MD, 20857 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Director Britton: Thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. This letter, submitted respectfully by University of Wisconsin Hospitals and Clinics Authority (UW Health), responds to many of the questions that are presented in the RFI and raises additional questions that we believe are important for HRSA to consider as it moves forward. At times, the RFI calls for confidential or sensitive information. For those questions, we have provided information to the Hall Render Pharmacy & 340B Collaborative, and we understand that they will aggregate and anonymize the information they receive from UW Health and other Covered Entities. As a 340B-participating hospital, UW Health is a core component of the healthcare safety net in the communities we serve. As such, we are uniquely positioned to be harmed by, and to help the administration understand the likely ramifications of, this matter as well as the anticipated approach we believe drug manufacturers will take if HRSA adopts a rebate model. UW Health participates in the Hall Render Pharmacy & 340B Collaborative, and we support their efforts and comments submitted on this topic. However, we believe it is also important for HHS and HRSA OPA to understand the significant risks to our countrys safety net presented by a 340B rebate model. To that end, we offer our own context, comments and recommendations regarding the RFI. At a high level, UW Healths 340B Program participation enables us to provide invaluable resources to the Madison and Rockford communities safety net populations we serve. UW Health also uses 340B Program savings for basic purposes, like paying our nurses, doctors, and other providers. Ultimately, by increasing costs and likely facilitating manufacturer application of self- serving policies designed to limit access to 340B pricing, a rebate model approved by your Agency would needlessly place a large percentage of those safety net support funds at risk. To the extent legitimate goals related to 340B duplicate discounts or maximum fair price (MFP) duplication require a solution, UW Health wishes to make clear that we support data transparency strategies designed to address those legitimate goals. However, a 340B rebate model is simply not needed to achieve those goals. April 20, 2026 Page 2 This letter proceeds in two parts. First, we ask a number of questions relating to a potential rebate model. Second, we provide responses to many of the questions that HRSA presented through the RFI. Although we understand that other Covered Entities may submit letters using a similar outline, we strongly encourage HRSA to read our letter and each of the others in full, as they will likely raise issues particular to each Covered Entity. FUNDAMENTAL QUESTIONS PRESENTED BY ANY 340B REBATE MODEL In response to the RFIs invitation for stakeholders to submit comments on all aspects of a rebate pilot program implementation under the 340B Program, and to help facilitate HRSAs goal of consider[ing] all aspects of the problem and [ensuring] a fair and transparent comment process,1 UW Health submits the below questions for HRSAs consideration. We believe these questions address fundamental issues that warrant serious consideration before adopting a rebate model. 1. WHY DOES A MANUFACTURERS INTEREST IN DEDUPLICATION OUTWEIGH UW HEALTHS INTEREST IN CARING FOR ITS PATIENTS? In the Agencys 2025 rebate model materials and in the RFI, HRSA stated that the main purpose of a rebate model would be to facilitate deduplication of 340B Program purchases and Medicare Drug Price Negotiation Program (MDPNP) dispenses. When it created the MDPNP, Congress did not modify the 340B statute or grant HRSA additional funding to administer a rebate program. With regard to deduplication, Congress simply said that the agreement between HHS and a manufacturer must require that the manufacturer honor the lesser of the 340B price or the Maximum Fair Pricenot both.2 More importantly, notwithstanding the deduplication provision, Congress placed the compliance burden squarely on the manufacturer, not the government or Covered Entities; manufacturers are subject to civil monetary penalties (CMPs) if they fail to honor the MFP price for an MFP-eligible drug,3 and they are subject to CMPs if they fail to honor the 340B price for a 340B-eligible drug.4 A rebate model would shift this compliance burden and its associated costs from the manufacturerwhere Congress placed itto UW Health and other Covered Entities. Although the 340B statute clearly prohibits any manufacturer from imposing a rebate model without HRSAs approval, 5 HRSAs reliance on this long-ignored parenthetical language to fundamentally reshape the 340B Program is suspect. With a rebate model poised to affect 25 of the most expensive drugs in the Medicare program, 6 it is important to remember the major 1 91 Fed. Reg. 7287, 7289 (Feb. 17, 2026). 2 Inflation Reduction Act of 2022, Pub. L. 117-169, 11001, 136 Stat. 1842 (codified at 42 U.S.C. 1320f-2(d)). 3 Id. at 136 Stat. 1850 (codified at 42 U.S.C. 1320f-6). 4 42 U.S.C. 256b(d)(1)(B)(vi). 5 42 U.S.C. 256b(a)(1). 6 The IPAY 2026 drugs accounted for $56.2 billion in gross Part D costs in 2023 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2026), and the IPAY 2027 drugs April 20, 2026 Page 3 questions doctrine, i.e., when it comes to grants of regulatory authority, Congress does not hide elephants in mouseholes.7 What statute, public policy, or other principle would grant HRSA the authority to so fundamentally shift the compliance burden and financial risk of deduplication to UW Health when Congress, clearly cognizant of the inevitable overlap between 340B Program purchases and MDPNP dispenses, affirmatively chose to place it on manufacturers? 2. HOW COULD HRSA OR UW HEALTH TRUST MANUFACTURERS TO FAITHFULLY ADJUDICATE COVERED ENTITIES REBATE REQUESTS? Any shift to a rebate model would happen in a much broader context. Since 2020, drug manufacturers have mounted an unceasing campaign to shrink and wrest control of the 340B Program from HHS and HRSA OPA. These efforts have directly affected UW Health. For example, manufacturers have limited our ability to serve patients through our contract pharmacies, undermining an important source of revenue that supports our nonprofit mission. We have also been limited as a pharmacy provider from being able to provide contract pharmacy services to other 340B institutions simply because our pharmacy is owned by our Covered Entity. Regarding data disclosures, manufacturers have demanded that we disclose patients protected health information and other confidential information to their vendor and give them the right to monetize that data in order to maintain access to their medications. We understand that data is valuable to manufacturers, but none have reduced their prices below the 340B ceiling price so they are potentially overcharging us for these drugs every single day. Manufacturers have also sent us overreaching demands. When our operations change, we forego 340B purchases to avoid a so- called unusual change in purchases. We further note that the first year of the NDPNP has shown that manufacturers simply cannot be trusted to, and have not, fairly adjudicated rebate requests. For drugs dispensed through our UW Health pharmacy, manufacturers such as Amgen and Boehringer Ingelheim have denied our MDPNP refund requests because they assert without clear evidence the drug was replenished with 340B inventory. This means we have paid the WAC price for a drug and gotten neither the MDPNP refund nor the 340B price as required by law. To resolve this issue, manufacturers agent, Second Sight Solutions, demands that we upload data to its 340B ESP platform for a totally unrelated 340B drug purchase. This is a cumbersome and time-consuming process that has not resulted in any material and efficient resolution. While we know that HRSA OPA and CMS have already been made aware of these concerns,8 we are not aware that any action has been taken. Notably, this self-serving process stands in stark contrast to the process theyve developed for deduplication identified by 340B covered entities. When they mistakenly pay an MDPNP refund for a 340B drug, we simply need to click an Identify as 340B button within Second Sights Beacon software, accounted for $42.5 billion in gross Part D costs in 2024 (CMS Fact Sheet, Medicare Drug Price Negotiation Program: Negotiated Prices for Initial Price Applicability Year 2027). 7 Whitman v. Am. Trucking Assns, 531 U.S. 457 (2001). 8 Letter from J. DeCubellis President & CEO of Americas Essential Hospitals, to Dr. Mehmet Oz, CMS Administrator (Mar. 5, 2026) (https://essentialhospitals.org/wp-content/uploads/2026/03/Deduplication-Issue-Letter- to-CMS.pdf) (last accessed Apr. 9, 2026). April 20, 2026 Page 4 and the manufacturer makes itself whole by offsetting a future purchase. HRSA OPA must consider these risks and explain whether and how it will be capable of monitoring or enforcing manufacturer adherence to any 340B rebate model requirements. Enforcement could stop this bad behavior, but we have seen no evidence that HHS has ever imposed a CMP on a manufacturer for a 340B overcharge, nor has CMS taken any public action against a manufacturer for failing to honor the MDPNP price. When manufacturers already have their payments in-hand, how can HRSA or UW Health trust them to give up money they are not entitled to? 3. WHAT TOOLS WOULD HRSA MAKE AVAILABLE TO UW HEALTH TO MONITOR MANUFACTURER COMPLIANCE? Transparency has become a manufacturer watchword since 2020. In particular, manufacturers argue that they are harmed because they do not have line-of-sight into Covered Entities eligible patient determinations and Medicaid billing practices. One of their first requests in good-faith inquiries is a copy of the Covered Entitys eligible patient policy; clearly, they believe it is important to know how what standards apply to eligible patient determinations. If a rebate model were approved, it would fundamentally shift a key operational function eligibility decisionsfrom Covered Entities to manufacturers. UW Health would be harmed if it did not have line-of-sight into manufacturers rebate eligibility decisions. The system manufacturers use to handle MDPNP disputes, Beacon, is clearly insufficient and run by an organization with inescapable conflicts of interest. HRSA should develop and make available meaningful tools for Covered Entities to monitor manufacturers compliance with their rebate model commitments. 4. WHAT COMMITMENTS DOES HRSA EXPECT MANUFACTURERS TO MAKE IN EXCHANGE FOR THE PRIVILEGE OF REBATE MODEL APPROVAL? Presumably, HRSAs approval of a rebate model would rely on its authority to provide[]9 under the 340B statute. That language is not limited or qualified in any way, and if it is sufficient to support a broad shift toward a rebate model, we presume that HRSA will consider and enumerate the commitments it expects manufacturers to make in exchange. Given that the 340B statute is a remedial statute that places the interests of the public ahead of private manufacturer interests, we believe that HRSA should think broadly about the commitments it can pursue. For instance, it would seem reasonable that if a manufacturer can benefit from a rebate model at all of a Covered Entitys contract pharmacy locations, it should be required to ship its products to all of those contract pharmacies. If HRSA believes this is not reasonable or not lawful, we hope that it will address this issue and explain why if it further pursues a rebate model. 9 42 U.S.C. 256b(a)(1). April 20, 2026 Page 5 5. WHAT STEPS IS HHS WILLING TO TAKE TO ENSURE MANUFACTURERS MEET THEIR 340B PROGRAM OBLIGATIONS? UW Health has seen manufacturers continually pressure the 340B Program through lobbying, litigation, and self-help. It appears that, under current law and budgets, HRSA lacks a set of robust tools and resources to enforce manufacturers compliance with a rebate model. Although CMPs are an option for both 340B overcharges and MDPNP failures, we are not aware of any such investigations even beginning, much less leading to repayments. Beyond CMPs, terminating a manufacturers Pharmaceutical Pricing Agreement is an option in the event of noncompliance. HRSA was willing to take this step against Johnson & Johnson in 2024. What criteria would HRSA apply when determining whether to take enforcement action against a manufacturer under a rebate model? What options other than the ADR processwhich has resulted in only six public decisions since going online in 2021, all of which have favored manufacturerswould be available to 340B covered entities to enforce manufacturer compliance? Is there an acceptable level of noncompliance, and if so, what is it? If HRSA establishes such a level internally but chooses not to share it publicly, what law, policy, or other factors would support that decision? Do those factors outweigh a Covered Entitys interest in knowing what the law is and how it would be enforced? These are serious matters, and they warrant seriousand publicly documentedconsideration. 6. WHAT STATUTE OR REGULATION PERMITS UW HEALTH TO DISCLOSE PATIENTS PROTECTED HEALTH INFORMATION TO DRUG MANUFACTURERS OPERATING REBATE MODELS? Viewed one way, a rebate model would involve manufacturers paying Covered Entities for healthcare services rendered to patients. Manufacturers have long resisted the designation of HIPAA Covered Entity, but this activity may bring them under the definition of a health plan under HIPAA.10 Alternatively, payment of a rebate could be seen as reimbursement for services rendered, bringing the activity under the HIPAA exception for payments to health care providers. We would encourage HRSA to work with its colleagues in the Office for Civil Rights to determine whether either of these is the case. In addition, if manufacturers continue to evade the HIPAA Covered Entity designation, we would also ask what law, policy, or other factors would justify moving patients PHI outside the HIPAA regulatory framework when reasonable alternatives to a rebate model exist? 7. WOULD DRUG MANUFACTURERS BE PERMITTED TO USE UW HEALTHS DATA FOR ANYTHING OTHER THAN MFP DEDUPLICATION? IF SO, WHAT STATUTE AUTHORIZES HRSA TO REQUIRE THIS OF UW HEALTH? IF SO, WILL MANUFACTURERS BE EXPECTED TO REDUCE THE PRICE ON OUR 10 See 45 C.F.R. 160.103. April 20, 2026 Page 6 340B ACCOUNTS BELOW THE CEILING PRICE TO COMPENSATE UW HEALTH FOR THE VALUE OF ITS DATA? One of UW Healths principal concerns with manufacturers campaign against the 340B Program is that their use of our data appears to be entirely undisciplined and unregulated. Manufacturers demand our data, Second Sight Solutions extracts a perpetual license allowing them to use and profit from it, and its parent, Berkeley Research Group, writes PhRMA-funded white papers attacking the 340B Program.11 Manufacturers openly use the data to deny commercial PBM rebates, coopting Covered Entities into enforcing compliance under contracts we have no part in. Although two courts have found that the 340B statute does not outright prevent manufacturers from demanding data, the statute also does not require HRSA to support these efforts. If a rebate model is approved, HRSA should strictly limit manufacturers to using the data for MDPNP deduplication purposes. Any other use could raise important legal questions. For instance, what law would permit HRSA to require Covered Entities to grant these property rights to manufacturers or Second Sight? Furthermore, since the data clearly has value to manufacturers, what is that value, and are they not required to compensate UW Health for that value? Isnt this the exact harm the Takings Clause prohibits? 8. WHAT CHANGED BETWEEN 2024 AND 2026 THAT WOULD JUSTIFY HRSAS CHANGE IN POSITION? UW Health believes it is essential for HRSA to carefully scrutinize and clearly explain any change in policy regarding the permissibility of manufacturer rebate models between 2024 and 2026. In 2024, HRSA firmly established a position against manufacturers unilateral implementation of rebate proposals, emphasizing that any rebate mechanism must receive Secretarial approval and that imposing unapproved rebate models would violate the Public Health Service Act. HRSA underscored the statutory requirement to protect Covered Entities from being forced to pay prices above the 340B ceiling price and cautioned that pursuing rebate models could seriously undermine the 340B Program and put Covered Entities at risk. Along these lines, we note that approved manufacturer rebate plans published as part of the 2025 rebate pilot included qualifications regarding eligible patient and location standards. HRSA did not publish the basis for its approval, the standards which were applied as part of that approval or provide for any meaningful ability of 340B covered entities to dispute determinations, making the 2025 pilot legally insufficient. Any subsequent shift in HRSAs stance should be grounded in substantial changes to law, policy, or public health priorities. UW Health urges HRSA to identify and communicate the factors that might warrant reconsidering its commitment to protecting Covered Entities from rebate models. Without transparent justification, such a change risks undermining trust in HRSAs administration of the program. HRSA must ensure that any policy evolution is based on robust legal authority and 11 By all appearances, Berkeley Research Group feels it is better to hide the fact that PhRMA pays it to produce friendly whitepapers. This footnote mimics the disclosure statement that is typically found on these materials: 7-point light gray font with condensed line spacing. These astroturf tactics are typical for PhRMA, as HRSA should be aware. For an example of BRGs use of this so-called disclosure, see the last page of this document: https://media.thinkbrg.com/wp-content/uploads/2024/08/26130312/340B_Private-Equity-and-Corporate-Investment-Activity_2024.pdf. April 20, 2026 Page 7 demonstrable need, rather than yielding to manufacturer interests, to preserve the integrity and public confidence in its mission. 9. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO ALL PAYERS INSTEAD OF LIMITING IT TO MEDICARE PART D? From UW Healths perspective, there is no clear statutory or policy rationale supporting the extension of a rebate model beyond Medicare Part D to all payers, especially given that the MDPNP is limited to Medicare Part D beneficiaries for 2026 and 2027 and will only ever be extended to Medicare beneficiaries. While Medicare represents a significant segment of UW Healths patient population, we serve many other patients, including patients with no coverage at all. Requiring UW Health to initially overpay for non-Medicare patients drugs, when deduplication mechanisms are only relevant for Medicare transactions, would impose unnecessary financial burdens and introduce inequities. Unless HRSA can articulate a compelling legal or policy justification for such a sweeping expansion, this approach undermines the intent of the 340B Program by forcing Covered Entities to subsidize manufacturer rebates for populations not governed by MDPNP rules, ultimately disadvantaging both providers and patients outside the Medicare framework. 10. WHAT LAW OR POLICY WOULD JUSTIFY EXTENDING A REBATE MODEL TO PHYSICIAN-ADMINISTERED DRUGS? There is currently no clear statutory or regulatory authority that would justify extending a rebate model to physician-administered drugs, especially considering that the Medicare Drug Price Negotiation Program for 2026 and 2027 is limited strictly to pharmacy-dispensed medications. HRSAs 2025 proposal to require rebate models for drugs across all care settings lacked a substantial legal or policy rationale and raised critical questions regarding program alignment and administrative feasibility. Before any rebate model is considered, HRSA should provide a thorough explanation rooted in applicable law and policy, ensuring that stakeholders understand the basis for such a significant shift and are able to evaluate its implications for patient care and program integrity. 11. WOULD DRUG MANUFACTURERS REBATE MODEL PROPOSALS AND ANY COMMITMENTS TO HRSA BE AVAILABLE TO UW HEALTH? IF NOT, WHY NOT? As noted above, UW Health firmly believes that transparency is fundamental to the success and integrity of the 340B Program. Making drug manufacturers rebate model proposals and commitments to HRSA readily available to Covered Entities is essential for ensuring a level playing field and promoting informed participation. If these materials are withheld from public disclosure, Covered Entities will be forced to either rely on HRSA OPAan agency already stretched thinto address questions and concerns individually, or depend on manufacturers to voluntarily share information, which they will have little incentive to do. Should HRSA determine that it is in the public interest to protect manufacturers proposals and commitments from broader disclosure, it is imperative that HRSA clearly explain the rationale for such a decision prior to approving any rebate model so that it can be properly evaluated under April 20, 2026 Page 8 applicable legal standards. Without clarity and openness, Covered Entities will likely face unnecessary uncertainty and operational challenges, undermining their ability to effectively serve patients and fulfill program obligations. UW Health urges HRSA to prioritize openness and fairness in its decision-making process to support all stakeholders and uphold the public trust. 12. IF A REBATE MODEL RELIES ON A MANUFACTURER-SELECTED INTERMEDIARY, WHAT TERMS MAY THE INTERMEDIARY IMPOSE ON UW HEALTH? In 2025, every manufacturer pursuing a rebate model selected Second Sight Solutions Beacon platform as its sole rebate administrator, forcing Covered Entitiesincluding UW Healthto use Beacon or lose access to 340B pricing for 10 of the most expensive Medicare Part D drugs. Beacons Terms and Conditions exploit this monopoly by granting Second Sight a universal and perpetual license to all data submitted by Covered Entities. This raises significant concerns about data privacy and control, as Beacons terms effectively strip Covered Entities of any say over how their information is used or retained. The Beacon platforms overreaching terms of use do not merely facilitate rebate processing; they enable ongoing surveillance and monetization of Covered Entities sensitive data, far beyond what HIPAAs payment exception contemplates.12 Because a 340B rebate is simply a retrospective pricing adjustmentnot payment for patient carethe scope of data collection required by Beacon is unnecessary for reimbursement and instead serves manufacturers interests in monitoring Covered Entities and shrinking the 340B Program. This arrangement exposes Covered Entities to significant operational burdens, including time-intensive disputes over manufacturer denials of eligible claims, and creates a real risk that platforms like Beacon may mishandle or monetize sensitive patient information. UW Health has attempted to negotiate reasonable terms and conditions with Second Sight but those overtures were mostly rejected without justification. If HRSA moves forward with a rebate model, it must carefully consider and explicitly define the terms that would be acceptable for any vendor, including Second Sight, to adopt. HRSA should also recognize that Covered Entities and vendors do not have equal bargaining positions; approving a model similar to that used in 2025 would empower the vendor to impose take-it-or- leave-it terms unless HRSA intervenes to ensure fairness. If permitted without material protections, we ask that HRSA explain the policy behind and basis for any decision to further facilitate the improper monetization of our data and ceding of our legal rights to a private, for- profit entity. 13. WILL HRSA INCREASE THE NUMBER OF MANUFACTURER AUDITS IT PERFORMS EACH YEAR TO INCLUDE ALL MANUFACTURERS OPERATING A REBATE MODEL AND THEIR COMPLIANCE WITH SUCH MODELS? IF NOT, WHY NOT? At present, HRSA audits 200 Covered Entities and only 5 manufacturers each year. These manufacturer audits have revealed rampant problems, with 62% of all audits since 2018 resulting 12 See 45 C.F.R. 164.501. April 20, 2026 Page 9 in findings. The most common violation, overcharging Covered Entities, has occurred in 33% of audits, including in 40% of those done in 2024 and 2025, and in an astonishing 60% of audits done in 2023.13 With manufacturers noncompliance rate so high, UW Health is deeply concerned that a rebate model would empower manufacturers to further abuse the program. One obvious solution would be for HRSA to increase its audit activity over manufacturers, especially those utilizing a rebate model. In deciding whether to pursue a rebate model, HRSA should specify whether these manufacturers will be subject to more frequent audit. If HRSA will not audit these manufacturers more frequently, why not? 14. WHY IS A REBATE MODEL PREFERRABLE TO A GOVERNMENT-BACKED CLEARINGHOUSE OR OTHER NEUTRAL ADJUDICATOR? UW Health hopes that, as it considers this proposal, HRSA will also consider reasonable alternatives. To date, there is no record that it has. HRSA should not assume that a rebate model is necessary for deduplicating MFP payments and 340B pricing. States and Covered Entities have reliably managed deduplication of 340B and Medicaid claims for decades using established practices, including flat-file batch reporting seen in Oregon and Hawaii. These models allow for standardized data submissionsuch as 340B modifiers and other claim detailswithout shifting administrative costs or authority onto private manufacturers or 340B covered entities. Alternatively, a government-backed clearinghouse, like the one already being adopted by CMS to deduplicate 340B and Medicare Part D inflation rebates,14 would further standardize processes, enhance transparency, and ensure enforcement remains with public agencies. Requiring manufacturers to bear related costs would also address financial concerns. UW Health encourages improvements to existing data exchange processes and supports solutions that strengthen transparency and efficiency for all stakeholders. We welcome the opportunity to share our operational experienceincluding use of batch flat-file submissionsand contribute to the development of government-backed systems that advance legitimate program goals. RESPONSES TO HRSAS REQUEST FOR INFORMATION 1. COSTS TO COVERED ENTITIES a. Current Administrative Costs Under the Upfront 340B Discount: Under the current 340B upfront discount model, administrative costs associated with program compliance are relatively predictable and manageable because they are integrated into existing pharmacy, billing, and compliance workflows. UW Health maintains auditable purchasing records, conducts routine internal reconciliations, and utilizes third-party administrators to assist with 13 See Attachment 1 for charts showing these noncompliance rates. All data was sourced directly from HRSA OPAs website through the links on the following page: https://www.hrsa.gov/opa/program-integrity. 14 2026 Physician Fee Schedule Final Rule, 90 Fed. Reg. at 49,936 (Nov. 5, 2025). April 20, 2026 Page 10 contract pharmacy compliance and inventory tracking. These processes are designed around the statutory structure of the program, in which the discounted 340B price is realized at the point of purchase rather than through post-transaction reimbursement. b. Administrative Costs Under a Potential 340B Rebate Model Pilot Program A rebate-based structure would fundamentally alter these operational workflows and increase costs. Instead of relying on established purchasing and reconciliation systems, Covered Entities would be required to monitor drug purchases at wholesale acquisition cost, identify eligible claims after dispensing or administration, submit rebate requests, monitor payment status, reconcile manufacturer responses, and likely dispute improper denials. Each of these steps introduces new operational functions that do not currently exist under the upfront discount structure. These additional activities would require new staff time, and expanded compliance oversight, resulting in significant administrative and financial burdens for safety-net providers. Moreover, these costs would not be limited to a one-time transition period. A rebate model would create ongoing operational expenses, including the continuous management of rebate submissions, monitoring manufacturer responses, resolving disputes, and auditing rebate payments to ensure compliance with program requirements. These recurring costs would divert resources away from patient care and undermine the statutory purpose of the 340B Program, which Congress designed to allow safety-net providers to stretch scarce resources to serve vulnerable populations. c. Staffing Impacts under a Potential 340B Rebate Model Pilot Program Implementation of a rebate-based model would require UW Health to significantly expand staffing devoted to 340B program administration. Current compliance activities are largely focused on maintaining purchasing records, monitoring contract pharmacy activity, and preparing for potential audits. A rebate model would require entirely new operational functions, including claims-level tracking, rebate request submission, payment monitoring, reconciliation, and dispute resolution. d. Systems and Infrastructure for Implementation of a Potential 340B Rebate Model Pilot Program To comply with a rebate model, Covered Entities would likely need to develop or procure new software tools capable of aggregating pharmacy and medical claims data, linking those claims to specific drug purchases, and generating standardized rebate submissions. These systems would also need to interface with manufacturer-designated platforms and potentially multiple third-party vendors. The resulting infrastructure would require significant development costs, integration work, and ongoing maintenance. In addition to these direct technology costs, Covered Entities would need to implement new data governance protocols to ensure the accuracy, security, and proper transmission of claims-level data. April 20, 2026 Page 11 1. PAYMENT TIMING AND POTENTIAL CASH FLOW IMPACTS FOR COVERED ENTITIES A rebate model would significantly alter the financial mechanics of the 340B Program by shifting from an upfront discount structure to a reimbursement-based system. Under the existing model, UW Health purchases drugs at the 340B ceiling price at the time of acquisition, allowing us to manage inventory and budgeting with predictable costs. This financial risk would be particularly acute for high-cost specialty medications or drugs that remain in inventory for extended periods prior to administration. UW Health could be required to carry the full acquisition cost of these drugs for weeks or months before a rebate claim could even be submitted, significantly increasing liquidity pressure. As a safety-net provider operating on thin margins, these cash flow disruptions could affect our ability to maintain adequate drug inventories and provide timely access to medications for our patients. 2. REBATE DENIALS Any rebate-based model would also introduce significant operational uncertainty related to rebate denials and dispute resolution, especially if manufacturers are responsible for reviewing rebate submissions and determining whether claims qualify for payment. Without clear regulatory guardrails and effective dispute resolution and enforcement mechanisms, this process risks becoming inconsistent across manufacturers and vulnerable to improper denials. To ensure fairness and program integrity, any rebate model would need to include standardized adjudication procedures, clear timelines for manufacturer responses, and an independent and realistic - mechanism for resolving disputes. Without these safeguards, UW Health will face significant operational burdens and financial uncertainty when attempting to recover rebates owed under the program. 3. DATA COLLECTION BY COVERED ENTITIES A rebate model would significantly expand the volume and complexity of data that Covered Entities must collect and submit. Instead of maintaining internal compliance records, UW Health would be required to generate new claims-level datasets for submission to manufacturers or third- party platforms. This process would require the integration of pharmacy claims data, medical billing data, purchasing records, and patient eligibility information across multiple systems. In many cases, the data elements required for rebate adjudication would not align with the data currently maintained in UW Healths operational systems. For example, pharmacy claims are often adjudicated in real time, while medical claims may take weeks or months to finalize. These timing differences would make it difficult to provide complete and accurate claims data at the time rebate determinations are required. As a result, Covered Entities could face significant operational challenges in producing the datasets required for rebate submissions. April 20, 2026 Page 12 CONCLUSION Introducing rebates into the broader 340B Program would be a monumental decision with enormous impacts on UW Health and the communities we serve. Notably, a rebate model is entirely unnecessary to achieve MDPNP or Medicaid deduplication and is therefore suspect on its face absent robust treatment and attention to the voluminous concerns noted above. We hope that HRSA will seriously consider and meaningfully address the questions presented in this letter, take account of the information provided by other stakeholders, and reach a solution that protects vulnerable patients. Without due care, our healthcare safety netand the lives who rely on it are at risk. We thank you again for the opportunity to respond to the RFI. We would appreciate any opportunity to discuss our comments further. Best Regards, Brock Dantuma, PharmD, MHA, BCPS, 340B ACE He/Him/His Pharmacy Manager 340B and Supply Chain April 20, 2026 Page 13 APPENDIX: SUMMARY OF HRSAS AUDITS OF DRUG MANUFACTURERS 1 1 3 1 1 1 3 1 4 1 4 2 4 4 4 2 4 1 2026 2025 2024 2023 2022 2021 2020 2019 2018 HRSA'S 340B MANUFACTURER AUDIT RESULTS SINCE 2018 Clean Audits Audits with Findings 1 5 5 4 5 3 4 3 4 1 1 2 1 2 1 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: FAILED TO OFFER 340B PRICE Manufacturer Did Not Fail to Offer 340B Price Manufacturer Failed to Offer 340B Price April 20, 2026 Page 14 2 3 3 1 4 4 3 3 5 2 2 4 1 1 2 2 2 0 2 6 2 0 2 5 2 0 2 4 2 0 2 3 2 0 2 2 2 0 2 1 2 0 2 0 2 0 1 9 2 0 1 8 FINDING: OVERCHARGED COVERED ENTITIES Manufacturer Did Not Overcharge Covered Entities Manufacturer Overcharged Covered Entities 1 5 4 4 4 2 4 3 5 1 1 1 1 3 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO SUBMIT PRICING DATA Manufacturer Submitted Pricing Data Manuafcturer Failed to Submit Pricing Data April 20, 2026 Page 15 2 4 3 4 4 3 5 5 5 1 2 1 1 2 2026 2025 2024 2023 2022 2021 2020 2019 2018 FINDING: FAILED TO CALCULATE CEILING PRICE Manufacturer Determined Ceiling Price for New Drugs Manufacturer Failed to Determine 340B Ceiling Price for New Drugs
HRSA-2026-0001-2415Rush University System for Health2026-04-20T04:00Z27,609 chars
See attached file(s) Page 1 of 7 Pharmacy Office: Kate Schaafsma, PharmD, MS, MBA, FASHP 1520 W. Harrison Street Chicago, IL 60612 Vice President, Chief Pharmacy Officer Office: 872-318-8062 Rush University System for Health | Pharmacy Monday, April 20, 2026 VIA ELECTRONIC MAIL The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 Submitted via: https://www.regulations.gov RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Rush University System for Health (RUSH) is comprised of two covered entities, Rush University Medical Center (RUMC), a disproportionate share hospital and Rush Copley Medical Center (RCMC), a rural referral center. Together, these covered entities serve some of Chicago's most economically diverse patient populations. RUSH respectfully submits these comments in response to HRSA's Request for Information regarding the potential implementation of a rebate model under the 340B Drug Pricing Program. We appreciate HRSA's thoughtful and deliberative approach to evaluating a potential rebate (discount after purchase) model and welcome the opportunity to engage constructively in this dialogue. RUSH offers these comments in the spirit of collaboration and shared stewardship of the 340B Program. Our goal is to contribute practical, data-informed operational insight into how, under the current model, our 340B compliance program effectively prevents duplicate discounts. We hope our perspective helps illuminate how a rebate model could impact a complex health system, so that any future policy decisions are grounded in the realities of how 340B functions at the covered entity level. We believe that incorporating on-the-ground experience can help ensure policy outcomes that are both administratively feasible and consistent with program integrity. We recognize that some form of change may be forthcoming, and our comments are not intended to obstruct that effort. Rather, they are offered to support solutions that minimize unintended operational disruption, preserve resources for patient care, and accurately reflect the complexity of covered entity operations. Where we identify potential challenges, we also suggest alternative approaches that we believe could advance HRSAs objectives in a more targeted and less disruptive manner. I. Costs to Covered Entities RUSHs 340B program is comprised of two covered entities, RUMC and RCMC. To illustrate the magnitude of what a rebate model would require RUSH to finance upfront: our Ambulatory Clinic medications and Cancer Center purchases alone represent a significant increase in millions of dollars respectively in upfront cost at WAC versus 340B pricing. This represents more than a 50% increase in upfront costs for our Ambulatory Clinic Administrations and a nearly 100% increase for our Cancer Center an exposure that would be very difficult to absorb without directly impacting the care we are able to provide to our most vulnerable patients, including those seeking treatment for the most serious illnesses. Page 2 of 7 Current administrative costs under the upfront discount model include our third-party administrators (TPAs) Macrohelix, Wellpartner, and 340B Complete which require both direct fees and significant administrative oversight from our internal team to maintain compliance. These TPAs manage claims and dispensing data, accumulations data, and purchase activity across our internal pharmacy and contract pharmacy arrangements. Additional cost drivers include split billing software maintenance encompassing CDM-to-NDC crosswalk, accumulation monitoring, and daily charge file reconciliation as well as an annual independent mock HRSA audit, invoice auditing, and ongoing provider roster management for 340B eligibility. Shifting to a rebate model requires additional resources to maintain compliance and ensure reconciliation of rebate payment to ensure RUSH is made whole. The data infrastructure for 340B program compliance and for rebate processing are similar in structure but not identical. Downstream data administration to be able to readily respond to manufacturer requests and manage denials would require either consistent upkeep with whatever rebate platform individual manufacturers require, or a reactive effort to locate data when a denial occurs. Either scenario represents a material and ongoing cost increase that would require a material restructuring of current operations. Under a rebate model, RUSH would incur the following incremental administrative and operational costs: Claims data submission to manufacturer rebate portals for pharmacy and medical claims across all 340B settings. This is a new and complex function as pharmacy benefit and medical benefit claims data elements differ in addition to this service is not currently performed for in-house pharmacy or physician-administered drug settings Rebate reconciliation of the claim, interpreting the expected rebate payment and confirming correct rebate received against expected amounts by drug, NDC, and manufacturer Vendor coordination and error resolution with manufacturer-designated rebate platforms, including integration with Beacon Channel Management or equivalent Staff training on new workflows, submission processes, and denial management Audit of rebates received and follow-up on discrepancies or denials, including potential Administrative Dispute Resolution filings with HRSA RUMC currently dedicates 8.5 FTEs to 340B program operations: 4.0 FTEs supporting RUMC as 340B analysts, 1.5 FTEs supporting RCMC 340B analysts, and 1.0 FTE at the director level overseeing 340B and supply chain operations system-wide. Notably, RUSH recently added 2.0 FTEs to the RUMC team in direct response to program changes stemming from the Inflation Reduction Act and ongoing program expansion and those changes do not yet require covered entities to submit claims data. A rebate model would impose claims data submission requirements across all 340B settings and all payers, representing a materially larger operational lift than what prompted those recent additions. Under a rebate model, RUSH analysts who currently divide their time across claims management, compliance monitoring, contract pharmacy oversight, and audit preparation would need to absorb an entirely new set of functions including claims data submission, rebate tracking and reconciliation, denial management, and ongoing self-audits of rebate activity. This reallocation would come directly at the expense of audit and compliance work, the very functions that protect Rush's program integrity to prevent duplicate discounts and HRSA audit readiness. RUSH estimates that absorbing rebate-related functions without degrading existing compliance operations would require approximately 1.5 additional FTEs on a permanent basis. Beyond direct administrative costs, a rebate model would reduce the resources available for patient care programs supported by 340B savings. Every dollar tied up in pre-rebate float and every staff hour redirected to claims reconciliation is a resource no longer available to the provider serving our patients. II. Payment Timing and Cash Flow Impacts Page 3 of 7 RUSH currently receives 340B pricing as an upfront discount at the point of purchase we pay the 340B ceiling price directly to our wholesaler and never carry financial exposure for the difference between WAC and the 340B price. A rebate model would fundamentally reverse this structure. RUSH would be required to purchase the IRA drugs at WAC, carry that full cost in inventory until the drug is dispensed, submit claims data, and then wait to receive a rebate representing the WAC-to-340B price difference. As described in Section I, our Ambulatory Clinic Administrations and Cancer Center alone face additional upfront exposure and this covers only a subset of our 340B settings. Even under an optimistic 10-day rebate payment window, RUSH would be providing a significant, interest-free capital advance to drug manufacturers on a continuous basis, tying up capital that is currently available for patient care operations and that our organization has reasonably relied upon under 340B's 30-year history as an upfront discount program. RUSH currently purchases 340B drugs through McKesson under terms that include a prompt pay discount when payment is remitted upfront. Under a rebate model, Rush would face an impossible operational choice: pay McKesson at full WAC before receiving any manufacturer rebate which would severely compress cash flow or delay payment to preserve liquidity, forfeiting the prompt pay discount entirely. The annual cost of losing that discount on 340B drug purchases subject to the rebate model represents a real, recurring financial loss that would be a direct and permanent consequence of the rebate model, not a one-time transition cost. The cash flow cycle under a rebate model lengthens considerably compared to today's operations: purchase at WAC, hold in inventory, dispense drug, submit claims data, await manufacturer approval, then receive rebate. For physician-administered drugs specifically, standard hospital billing operations mean claims data may not be available for submission until weeks after drug administration, due to how hospital bills are created under applicable billing rules. This extends the float period well beyond even a 10-day rebate window and disproportionately affects academic medical centers like RUSH with significant physician- administered drug volumes. Additionally, covered entities must submit claims within 45 days of dispensing a constraint that, combined with billing delays for physician-administered drugs, creates a compressed submission window that increases the risk of missed claims, denied rebates, and unrecoverable financial losses. If HRSA proceeds with a rebate model, RUSH strongly recommends robust and enforceable manufacturer payment timeliness requirements, including financial penalties for late payments, a standardized and consolidated dispute resolution platform accessible to both covered entities and manufacturers, HRSA oversight authority to audit manufacturer rebate payment records, and a requirement that manufacturers provide specific documented rationale for any payment delays or denials. Rush urges HRSA to consider whether the integrity goals underlying a rebate model can be achieved without requiring covered entities to purchase drugs at WAC. III. Rebate Denials RUSH strongly recommends HRSA to prohibit all rebate denials. In a rebate model, manufacturers would receive the claims data alleged to be required for program integrity purposes and retain their right to audit under the 340B statute prohibition of denials would simply ensure that covered entities are not forced to bear the additional administrative and financial burden of contesting improper denials. If HRSA permits denials, grounds should be explicitly defined, narrowly tailored, and agreed upon by the covered entity in advance. Manufacturers must be prohibited from denying rebates based on alleged Medicaid duplicate discounts or diversion without specific, documented evidence. For any denial process, covered entities need clear and standardized answers to the following at the outset: why access was denied with specific non-vague rationale; what would restore access or resolve the denial; how long the covered entity has to submit a response or additional data; and where to submit the appeal Page 4 of 7 and in what format. Critically, this process must not consist of a fragmented network of different platforms and portals where individual manufacturers unilaterally choose their own requirements. RUSH strongly recommends a consolidated, standardized dispute platform that both covered entities and manufacturers have clear access to, with process elements that are consistent across all manufacturers. This would reduce providing a balanced, consistent and auditable record of denial and dispute activity, reduce administrative burden, and shorten resolution timelines. Rush urgers HRSA to require that any data submission or rebate processing platform used under a rebate model be operated by a truly neutral third-party clearinghouse one with no financial relationship to, or ownership interest by, any drug manufacturer or manufacturer-affiliated entity. This is a significant operational consideration, with fundamental implications for program integrity. Both Beacon Channel Management and 340B ESP are operated by Second Sight Solutions, a manufacturer-affiliated entity. Requiring covered entities to submit sensitive claims data through platforms controlled by manufacturer- affiliated parties gives rise to inherent conflict of interest concerns, as those platforms have a financial incentive to serve the data and business interests of manufacturers rather than the program integrity goals of HRSA or the operational needs of covered entities. Any rebate model that does not mandate a truly neutral clearinghouse could result in manufacturers exercising disproportionate influence over the infrastructure through which covered entities access their own 340B discounts an outcome that may create conflicts with the statutory intent of the program. A neutral clearinghouse would operate as an independent intermediary sitting between covered entities and manufacturers receiving claims data submissions from covered entities, validating eligibility, and transmitting only the minimum necessary data to manufacturers to support rebate processing. The clearinghouse would maintain standardized data submission formats and requirements that apply uniformly across all participating manufacturers, eliminating the current fragmentation where each manufacturer can unilaterally dictate its own portal, data fields, and submission rules. Rebate payments would flow through the clearinghouse rather than directly from manufacturer to covered entity, providing an auditable, centralized record of all transactions, payment timelines, and denial activity. HRSA would have direct oversight access to clearinghouse data, enabling real-time monitoring of manufacturer compliance with payment timeliness requirements and denial guardrails. Covered entities would interact with a single platform regardless of how many manufacturers are involved reducing administrative burden, standardizing workflows, and eliminating the need to maintain relationships with multiple manufacturer- specific systems simultaneously. IV. Data Collection by Covered Entities RUSH currently collects, maintains, and retains 340B program data through a combination of internal systems and third-party vendors. Data is sourced across multiple platforms including EPIC, pharmacy dispensing software, and wholesaler systems. For contract pharmacy operations, RUSH utilizes Macrohelix, Wellpartner, and 340B Complete to manage claims and dispensing data, accumulations data, and purchase activity. RUSH has implemented automated validation checks and eligibility logic to ensure data accuracy, completeness, and consistency. Routine internal audits and an annual independent third-party mock HRSA audit are conducted, with all findings documented and resolved through corrective action plans. Additional controls include monthly self-audits of 340B claims with focused review of high-risk and mixed-use areas, verification that 340B drugs are dispensed only to eligible patients, independent audits of all contract pharmacies, annual policy and procedure updates, and maintenance of invoices, contracts, and patient records for a minimum of five years. Split billing software crosswalk maintenance including CDM code mapping, NDC matching, exclusion list monitoring, and daily charge file import verification is also performed on an ongoing basis. Page 5 of 7 A rebate model would require material changes to current data collection activities. Some changes would be one-time including system setup, data mapping, and workflow redesign. Ongoing changes would include claims submission to manufacturer portals, accuracy verification, data reconciliation, and results monitoring. Covered entities would need to purchase drugs at WAC and submit accurate, detailed claims data within 45 days of dispensing to avoid denials. TPA configuration to submit data directly to Beacon Channel Management or equivalent manufacturer platforms would be required, along with staff training for new submission workflows. Key data sources include HRSA OPAIS for covered entity registration and ceiling prices, Medicaid and CMS Cost Report data for eligibility verification, inpatient pharmacy billing records for prescription and dispense data, TPA reports for contract pharmacy claims and diversion monitoring, and DSCSA compliance data for serialized product tracking across the supply chain. To protect patient privacy and data security under any rebate model, RUSH recommends the following safeguards. Only the minimum necessary patient data should be shared, and patient information should be de-identified where possible. All data should be encrypted and access limited to approved users with documented legitimate purpose. Critically, manufacturers must be explicitly prohibited from using covered entity claims data for any commercial purpose, including PBM formulary management a use entirely unrelated to 340B program integrity and enforceable penalties should be established for violations. V. Manufacturer Efforts to Avoid Duplicate Discounts Prior to January 1, 2026, RUSH prevented duplicate 340B discounts and Medicaid rebates through maintenance of an accurate Medicaid Exclusion File, application of required claim-level identifiers and modifiers including Submission Clarification Code 20 and UD modifiers, use of TPAs to ensure Medicaid carve-out claims did not accumulate to 340B inventory, and regular audits to identify and promptly correct any errors. Since January 1, 2026, RUSH has used available claim status indicators and multiple TPA data reports to identify drug dispenses that were 340B-eligible and did not receive access to the MFP because the 340B ceiling price was lower. This approach follows program rules intended to avoid applying both discounts to the same dispense. RUSHs experience with this process is still developing as the program matures. We are actively monitoring compliance issues and committed to working within the framework as it evolves. Identifying potential duplicate discounts within the compressed timeframes that a rebate model would impose present significant operational challenges not due to a lack of compliance infrastructure at covered entities, but because the underlying data systems across pharmacy, Medicaid and Medicare were not designed to communicate in real time. Rushs current duplicate discount prevention practices are well- documented and effective within the current upfront discount model. The challenges arise when those same processes are expected to operate at a rebate model speed. Pharmacy, Medicaid, and Medicare systems often do not accurately or consistently indicate whether a drug was purchased at 340B pricing. The 340B status of a claim is typically determined retrospectively, making real-time identification difficult, and patient eligibility can be hard to assess at the point of dispensing in mixed-use settings. Inconsistent Medicaid rules across states can result in some drug claims being filed for rebates when they should not be. For Medicare, billing codes are not always applied consistently, complicating the identification of 340B-purchased drugs. MCOs submit utilization data to manufacturers at a lag and often in aggregated form, which conflicts with the real-time billing infrastructure that pharmacy operations are built on and creates timing mismatches that further complicate duplicate discount identification. Drug purchasing, dispensing, eligibility determination, and rebate billing occur at different points in time and frequently do not align. VI. Required Reporting Page 6 of 7 With respect to manufacturer reporting requirements, RUSH recommends that HRSA requires manufacturers to submit data on rebate payment timeliness, denial rates, denial rationale, and claim-level rebate activity on at least a quarterly basis. This data should be subject to HRSA audit and should be used to identify patterns of non-compliance or improper denial practices. RUSH recommends that HRSA make publicly available, on a quarterly basis, aggregate manufacturer data on rebate payment timeliness and denial rates without disclosing covered entity-level or patient-level detail. Public reporting would create accountability for manufacturers and provide HRSA and covered entities with the information needed to identify systemic problems early. If a pilot program is implemented, RUSH recommends the identification of clear and measurable outcomes prior to implementation in addition to a minimum data collection period of two years before HRSA draws conclusions about the program's effectiveness or considers broader implementation. This timeframe would allow sufficient data to accumulate across different drug types, payer mixes, and covered entity settings to support meaningful analysis. VII. Program Integrity and Potential Benefits of a Rebate Pilot RUSH recognizes and shares HRSA's commitment to 340B program integrity. Preventing duplicate discounts, reducing diversion, and ensuring that 340B savings reach the patients and communities the program was designed to serve are goals RUSH fully supports. However, RUSH does not believe a rebate model is the most effective tool to achieve these goals. The integrity challenges HRSA has identified primarily duplicate discounts under Medicaid and nonduplication under the MDPNP are fundamentally data visibility problems. A rebate model addresses this by requiring covered entities to submit detailed claims data post-dispense. But this approach shifts a substantial portion of the operational and financial burden of solving a manufacturer data visibility problem onto covered entities safety-net providers whose resources exist to serve vulnerable patients, not to finance drug manufacturer data infrastructure. A rebate model also introduces its own integrity risks: the added complexity of claims submission, reconciliation, denial management, and multi-vendor coordination creates new opportunities for administrative errors. In a resource-constrained environment, more complexity does not inherently produce more integrity. RUSH currently uses 340B ESP to submit claims data for contract pharmacy arrangements, and our experience with this platform illustrates precisely why expanding rebate-style data submission to all 340B settings would be disproportionately burdensome. Contract pharmacy data submission through 340B ESP already requires significant staff time to manage error resolution, NDC-level pricing verification, lookback window compliance, and follow-up on unexplained pricing drops. Extending this model to in-house pharmacies and physician-administered drugs system-wide would multiply these challenges without a proportional integrity benefit. RUSH acknowledges that a rebate model would generate detailed claims-level data that could increase transparency. However, we urge HRSA to weigh whether that transparency benefit justifies the cost and disruption to covered entities when less burdensome alternatives can generate comparable transparency. RUSH is also deeply concerned about manufacturer misuse of covered entity claims data. Pharmaceutical manufacturers have financial incentives to leverage 340B claims data to manage commercial rebate obligations to pharmacy benefit managers a purpose entirely unrelated to 340B program integrity. HRSA should explicitly prohibit manufacturers from using covered entity rebate claims data for any commercial purpose and establish enforceable penalties for violations. Covered entities should not be expected to bear costs associated with manufacturers' commercial data strategies under the guise of program integrity. Rather than a rebate model, RUSH recommends the following targeted improvements to strengthen program integrity with minimal burden on covered entities. CMS should implement a parallel process through the Medicare Transaction Facilitator to address MDPNP nonduplication at the federal level. HRSA Page 7 of 7 should require manufacturers to publicly report on rebate payment timeliness, denial rates, and denial rationale to enable ongoing monitoring for non-compliance. HRSA should enhance its existing audit infrastructure rather than creating a parallel rebate-based compliance system. These approaches offer more targeted solutions that address the identified problems directly without restructuring a program that has operated effectively on upfront discounts for over 30 years. RUSHs overall assessment is that the costs of a rebate model financial, operational, and in terms of patient care resources diverted materially outweigh the potential integrity and transparency benefits, particularly given that less disruptive alternatives exist that achieve the same goals more precisely. The 340B program exists to stretch scarce resources as far as possible for underserved patients. Every dollar tied up in pre-rebate float, every staff hour redirected from compliance to claims reconciliation, and every dollar spent on new administrative infrastructure is a resource no longer available for the patients this program was designed to serve. VIII. Conclusion RUSH remains committed to the long-term integrity and sustainability of the 340B program and appreciates HRSA's continued engagement with covered entities throughout this process. As HRSA evaluates potential alternatives to the current model, we respectfully offer several considerations that we believe could advance program integrity while minimizing operational disruption for covered entities. In particular, RUSH encourages HRSA to consider building upon existing frameworkssuch as the Oregon Medicaid retrospective claims model and the CMS Medicare Transaction Facilitatorwhich may offer less disruptive pathways than a rebate-based approach. We also believe it is important to ensure that covered entity claims data is protected from use for commercial purposes unrelated to program oversight. Should HRSA determine that a rebate model is necessary, we recommend that any such structure includes clear guardrails, such as limiting manufacturer denials to the narrowest possible circumstances or establishing standardized, centralized dispute resolution processes. Finally, we encourage HRSA to ensure that any policy design fully accounts for the operational complexity of large academic medical centers and safety-net hospitals. We welcome continued dialogue and value the opportunity to provide additional information or operational insight to support HRSAs deliberations. Sincerely, Kate Schaafsma, PharmD, MS, MBA, FASHP Vice President, Chief Pharmacy Officer Rush University System for Health Pharmacy
HRSA-2026-0001-2416TAS340B2026-04-20T04:00Z10,795 chars
See attached file(s) TAS340B respectfully submits the attached response to the Health Resources and Services Administrations Request for Information regarding the 340B Rebate Model Pilot Program. The attached document provides governance-focused observations and structural considerations based on operational experience across covered entity environments. 1 TAS340B Response to HRSA Request for Information 340B Rebate Model Pilot Program April 2026 Prepared by: Jonathan Horn TAS340B Email: jonathan@tasnetwork.org A covered-entity-informed governance initiative I. Executive Framing TAS340B appreciates the opportunity to provide comments in response to the Health Resources and Services Administrations Request for Information regarding a potential 340B Rebate Model Pilot Program. TAS340B is a covered-entity-informed governance initiative focused on promoting standardized, transparent, and auditable 340B operations. TASs perspective is informed by operational observations across covered entity environments, including engagement with stakeholders involved in program execution, compliance, and audit processes. What we are consistently seeing across the market is a lack of alignment in how eligibility is determined, validated, and audited across stakeholders. Covered entities, manufacturers, and vendors are often working from different data inputs, validation approaches, and operational assumptions. While these approaches are generally intended to address program integrity concerns, they are not consistently aligned with one another. From an operational standpoint, there is an opportunity to establish a neutral, standardized framework that aligns with HRSA expectations while also allowing stakeholders to validate outcomes within their respective roles. Without that alignment, variability in interpretation is likely to continue regardless of the pricing mechanism. TAS does not take a position for or against a rebate-based model. However, if such a model is pursued, its effectiveness will depend on whether the underlying operational and validation framework is consistent across stakeholders. 2 II. Operational Model Considerations A rebate-based model introduces a multi-step operational structure that differs from the current upfront discount model. These steps include: Claim identification and submission Eligibility validation Denial adjudication Rebate remittance Reconciliation and audit documentation These steps are interconnected and depend on consistent execution across stakeholders. Covered entities today operate within structured compliance cyclesmost commonly monthly auditsdesigned to validate eligibility deliberately. These cycles are not built for real-time adjudication. They are built for controlled validation over time. Introducing additional dependencies between submission, adjudication, and payment requires alignment with these existing workflows. Without that alignment, operational complexity increases quickly, particularly around reconciliation and dispute tracking. From a cost perspective, covered entities would incur incremental administrative and system- related expenses associated with implementing a rebate-based model. These include additional personnel resources to support claim validation, reconciliation, and dispute management, as well as potential investment in system enhancements or third-party solutions to manage rebate tracking and audit readiness. In practice, differences between internal compliance validation and external data validation frameworks have, in certain cases, resulted in material financial reconciliation exposure. In one such instance, this type of misalignment resulted in a reconciliation impact exceeding $1 million, despite the covered entity operating in good faith based on its interpretation of program requirements. While the magnitude of impact will vary across organizations, these considerations highlight the importance of aligning validation standards prior to implementing claim-level financial adjudication. 3 III. Eligibility Logic & Data Alignment Eligibility determination becomes the central dependency in a rebate-based model. In most operational environments, claim-level data is available shortly after dispenseoften within the next day. This allows covered entities to identify potential eligibility early in the process. However, final validation typically occurs through structured audit cyclesweekly in some cases, but more commonly monthly. These cycles are intentional and allow for deliberate review of eligibility and documentation. This distinction is important. The system is not designed for real-time adjudication. It is designed for structured validation over time. If validation is not occurring in real time, shifting pricing to a rebate-based model does not change when the eligibility decision is made. It introduces a delay in financial realization without improving the underlying determination. We are also seeing increasing misalignment between internal compliance frameworks and external validation systems. In some cases, eligibility determinations that align with HRSA expectations are not recognized within external systems due to differences in data availability, structure, or validation methodology. When that happens, covered entities are forced into retrospective reconciliation and, in some cases, financial adjustmentseven where they operated in good faith. In addition, emerging validation models are requesting data structuressuch as payment-level or transaction-level datathat do not always align with the data used in HRSA audit processes. HRSA audits have historically relied on structured datasets such as TPA-processed records and billing parameters. This creates a situation where covered entities may be compliant under one framework but evaluated under another. 4 From an operational standpoint, maintaining multiple validation frameworks for the same activity is not sustainable. Data collection should also remain aligned with privacy and security expectations, ensuring that only the minimum necessary data is exchanged to support eligibility validation and program integrity. IV. Denial Guardrails & Dispute Framework A rebate-based model introduces a formal denial and adjudication structure that requires consistency to function effectively. Denial categories should be: Clearly defined in advance Limited to program integrity conditions Applied consistently across stakeholders Denials should include: Claim-level identification Clear rationale Sufficient supporting documentation Structured adjudication timelines are also important. Covered entities need predictable timeframes for review, response, and resolution. A tiered dispute framework may include: Initial manufacturer review Documentation exchange Neutral evaluation Escalation for unresolved issues Without clear guardrails, denial practices may vary significantly across stakeholders, increasing administrative burden and reducing comparability across participants. 5 V. Payment Timing, Audit Cycles & Operational Behavior A rebate-based model introduces a fundamental shift in timing. Under the current model, pricing is realized at acquisition. Under a rebate model, pricing is realized after submission, validation, and remittance. At the same time, validation itself is not real-time. Covered entities confirm eligibility through structured audit cycles. This creates a misalignment. If eligibility is not confirmed in real time, delaying pricing does not change when the decision is madeit only delays when the financial outcome is realized. This also changes how work gets done. Covered entities today are structured around deliberate compliance processes. A rebate model introduces pressure to track and recover payments, which can shift operational focus toward reconciliation and recovery activities alongside compliance validation. Over time, that creates tension between moving quickly to recover funds and taking the time needed to validate eligibility correctly. Additionally, validation windows (e.g., 45 days) may work within an upfront discount model, where pricing is already realized, but create extended dependency in a rebate-based model where financial resolution is delayed. Alternative approachessuch as upfront discounting combined with structured post-transaction validation, or use of claim-level indicatorsmay offer pathways to address duplicate discount concerns without introducing extended timing dependencies. 6 VI. Structural Summary & Market Context A central consideration in evaluating a rebate-based model is whether there is a shared and consistently applied definition of an eligible claim at the point it enters the validation and reimbursement process. The 340B Program today relies, in part, on interpretation of operational scenarios that are not uniformly defined across stakeholders. Covered entities operate within structured compliance frameworks, but external validation approaches may apply differing interpretations to the same underlying activity. In a rebate-based environment, these differences become more consequential, as eligibility determinations are directly tied to financial outcomes at the claim level. We are also seeing increasing variability across manufacturers and external validation frameworks in how these scenarios are interpreted and applied. As a result, similar underlying activity may be evaluated differently depending on the validation model used. Data-sharing and validation models have expanded, but they have not consistently restored alignment. In many cases, they have introduced additional layers of control without resolving underlying differences in interpretation. As a result, stakeholders are increasingly operating within parallel frameworks rather than a single, unified standard. Introducing a rebate-based model into this environment adds another layer of dependency on consistent validation and interpretation. Where fragmentation exists, variability is likely to persist regardless of pricing mechanism. From a structural standpoint, the success of any pilot depends on: Standardized eligibility logic 7 Alignment between compliance and validation frameworks Consistent data requirements Defined adjudication structures Predictable timing and reconciliation processes Program integrity outcomes will depend on the consistency and transparency of these elements not pricing structure alone. A rebate model does not inherently resolve misalignment. Without a shared framework, it risks adding complexity to an already fragmented environment.
HRSA-2026-0001-2417National Association of Specialty Pharmacy (NASP)2026-04-20T04:00Z24,770 chars
See attached file(s) April 20, 2026 Submitted electronically: www.regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administraon U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Informaon: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026- 03042 Dear Administrator Engels: The Naonal Associaon of Specialty Pharmacy (NASP) submits these comments in response to the Health Resources and Services Administraon's (HRSA) Request for Informaon (RFI) published in the Federal Register on February 17, 2026, regarding the potenal implementaon of a rebate model under the 340B Drug Pricing Program (HHS Docket No. HRSA-2026-03042; 91 Fed. Reg. 7287). NASP is the naonal professional associaon represenng the full spectrum of specialty pharmacy stakeholders, including specialty pharmacies operang within 340B covered enes and specialty pharmacies serving as 340B contract pharmacies. NASP's membership also includes pharmaceucal manufacturers who parcipate in the 340B program. We are mindful of the legimate interests of all stakeholders in this process and offer these comments with the shared goal of a 340B program that is well-funconing, transparent, and sustainable for every parcipant in the supply chain. NASP respecully urges HRSA to decline to implement a rebate model under the 340B program. As detailed below, a rebate model is expected to impose severe and unjusfiable cash flow burdens on 340B covered enes operang specialty pharmacies; creang dangerous delays in paent access to high-cost specialty medicaons; undermining the foundaonal statutory purpose of the 340B program; and deparng from more than 30 years of consistent agency pracce in a manner inconsistent with the program's statutory framework. If HRSA nonetheless determines to pursue a rebate pilot, NASP urges the agency to adopt robust safeguards NASP Comments April 20, 2026 | Page 2 specifically calibrated to the unique operaonal and financial realies of specialty pharmacy pracce. Background: The 340B Program and the Specialty Pharmacy Context Since its enactment, the 340B Drug Pricing Program has required parcipang manufacturers to sell covered outpaent drugs to eligible covered enes at or below the statutory ceiling price. The program's legislave history is clear and unambiguous: its purpose is to enable covered enes "to stretch scarce Federal resources as far as possible, reaching more eligible paents and providing more comprehensive services." For more than three decades, HRSA has implemented this statutory purpose through a consistent upfront discount modelcovered enes purchase drugs at the 340B ceiling price at the me of sale, without the financial burden of fronng full wholesale acquision cost (WAC) and awaing reimbursement. This upfront discount model has been integral to how covered enes plan operaons, manage cash flow, and fulfill their safety-net missions. Specialty pharmacy plays a central and expanding role within the 340B program. Complex specialty drugsthose treang cancer, autoimmune condions, rare diseases, hepas C, HIV, and other complex condionsrepresent the majority of 340B drug spending, even though specialty prescripons account for a small fracon of total prescripon volume. For hospitals with specialty pharmacies, the 340B discount on specialty drugs can generate significant savings. These savings are reinvested directly into expanded paent services, uncompensated care, clinical staffing, and community health programs. NASP is aware that manufacturers have sought to implement rebate models to address concerns including duplicate discounts and the nonduplicaon provision under the Medicare Drug Price Negoaon Program (MDPNP). NASP acknowledges these as legimate operaonal concerns that deserve a well-designed policy response. However, the rebate model as proposedrequiring covered enes to purchase drugs at WAC and await manufacturer- controlled rebate paymentsis not a proporonate or operaonally sound soluon, parcularly for high-cost specialty medicaons. I. The Rebate Model Would Impose Severe and Unsustainable Cash Flow Burdens Particularly for High-Cost Specialty Drugs NASP's most fundamental concern with any 340B rebate model is its impact on covered enty cash flow, which is especially acute in the specialty drug context. Under a rebate model, a covered enty would be required to purchase specialty drugs at WACwhich for high-cost specialty medicaons can range from tens of thousands to hundreds of thousands of dollars per course of therapyand wait for the manufacturer to process and pay a rebate equal to the difference between WAC and the 340B ceiling price. During this period, the covered enty is effecvely providing an interest-free loan to the manufacturer. NASP Comments April 20, 2026 | Page 3 The magnitude of this burden has been documented by 340B Health, whose 2025 naonal survey1 found that under a rebate model applied to specialty drugs, the average annual "float" per disproporonate-share hospital would be $72.2 million. These figures reflect a program limited to 10 to 25 drugs selected under the Medicare Drug Price Negoaon Program (MDPNP). If the rebate model were expanded more broadlywhich HRSA has signaled as a potenal future direconthe cash flow disrupon for covered enes with specialty pharmacies would be exponenally greater. Specialty pharmacies within hospital systems commonly dispense dozens to hundreds of specialty products. The prospect of funding WAC-level upfront purchases for a broad range of specialty drugs, while waing for manufacturer-controlled rebate melines, would fundamentally destabilize specialty pharmacy operaons within 340B covered enes. 340B Health's survey2 further found that 93 percent of hospitals would face challenges maintaining current levels of uncompensated care; 92 percent would be forced to reduce the free and discounted drugs they provide through their pharmacies; and 77 percent could be forced to close programs enrely if such financial burdens were applied broadly. These are not abstract projeconsthey reflect the on-the-ground financial realies of hospitals and specialty pharmacies operang on thin margins in service to vulnerable populaons. The rebate model also has the potenal to create a dangerous mismatch between payer reimbursement cycles and manufacturer rebate melines. Health-system pharmacies typically receive reimbursement from insurers 1445 days aer claim submission. If manufacturer rebates are delayed and/or denied - the covered enty is forced to absorb the difference between WAC acquision cost and payer reimbursement for extended periods. For high-cost specialty drugs where payer reimbursement may be below WAC (e.g., Medicaid, Medicare Part B), this creates a net cash loss on every dispense unl the rebate is received, if it is received at all. NASP urges HRSA to specifically address the following cash flow quesons in any rebate pilot design: (a) the guaranteed maximum meline within which manufacturers must pay rebates aer dispense; (b) the financial consequencesincluding automac interest chargesif manufacturers fail to pay mely; (c) the prohibion on manufacturers leveraging the rebate process to unilaterally deny or delay otherwise valid 340B claims; and (d) interim bridge financing mechanisms or other safeguards to prevent covered enes from being forced to choose between program parcipaon and operaonal solvency. 1 340B Health, Survey of 340B Hospitals on Financial and Operational Impacts of Drugmaker Rebate Proposals (Feb-Mar 2025); https://www.340bhealth.org/members/research/reports/. 2 Ibid. NASP Comments April 20, 2026 | Page 4 Many health-system specialty pharmacies use 340B savings to offer deeply discounted or free medicaons to uninsured and underinsured paents at the point of sale. Under the current upfront discount model, a specialty pharmacy can acquire high-cost oncology and other specialty medicaons at the 340B ceiling price, oen a fracon of the wholesale acquision cost, and offer those medicaons to cash-paying paents at or near the discounted acquision cost. This point-of-sale assistance makes the difference between access and abandonment for financially vulnerable paents. Under a rebate model, the pharmacy must acquire those same drugs at full WAC and cannot offer a meaningful discount unl the manufacturer rebate is received weeks or months later, if at all. The pharmacy cannot afford to dispense a high-cost specialty medicaon to an uninsured paent at a loss and then wait an indefinite period for rebate reimbursement. This structural change eliminates the financial basis for point-of-sale paent assistance programs and forces vulnerable paents to either pay full WAC, delay therapy, or forgo treatment enrely. For paents facing cancer, transplant rejecon, or other life-threatening condions, such delays are not merely inconvenient, they can be clinically catastrophic. II. The Rebate Model Threatens Timely Patient Access to Specialty Drugs Access to high-cost specialty drugs is me-sensive in ways that disnguish specialty pharmacy from convenonal dispensing. Paents receiving oncology agents, immunosuppressants for transplant, biologics for autoimmune disease, or anretrovirals for HIV cannot afford delays in therapy iniaon or connuaon. The cash flow disrupons described in Secon I translate directly into access barriers: covered enes facing unsustainable upfront purchase costs may restrict their specialty pharmacy formularies, limit the volume of specialty drugs on hand, or cease dispensing certain products enrely. Contract pharmacies face even more acute access risks. Under the exisng upfront discount model, many 340B contract specialty pharmacies can offer point-of-sale discounts to cash- paying paents based on the 340B acquision cost advantage. Under a rebate model, contract pharmacies would be required to dispense drugs at WAC while awaing a rebate paid not to the contract pharmacy but to the covered enty. This structural mismatch eliminates the financial basis for point-of-sale discounts to cash-paying paents at contract pharmaciesdirectly undermining paent access for the most economically vulnerable individuals served by the 340B program. NASP is parcularly concerned that the rebate model, as proposed for MDPNP-negoated drugs, targets precisely the high-cost specialty products for which the 340B discount provides the greatest benefit to paents and providers. The drugs selected for the inial pilot, including oncology agents, ancoagulants, and biologics are among the most costly and clinically crical specialty therapies. Imposing a rebate model on these drugs first concentrates the cash flow and access risks in the most operaonally sensive product categories. NASP Comments April 20, 2026 | Page 5 HRSA's own stated commitment to evaluang "access to drugs for paents" as part of this RFI reinforces the centrality of this concern. NASP urges HRSA to require, as a threshold condion before any rebate pilot, a comprehensive and independently validated assessment of the downstream paent access impacts for specialty drugs dispensed through covered enty specialty pharmacies and 340B contract specialty pharmacies. III. The Rebate Model Raises Serious Statutory and Regulatory Concerns Secon 340B(a)(1) of the Public Health Service Act (42 U.S.C. 256b(a)(1)) requires the Secretary to enter into agreements with manufacturers under which "the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpaent drugs . . . purchased by a covered enty . . . does not exceed" the applicable ceiling price. The statute's parenthecal"taking into account any rebate or discount, as provided by the Secretary"acknowledges that the ceiling price may be effectuated through various mechanisms. However, that parenthecal does not authorize the Secretary to implement any mechanism without regard to the program's core purpose, its legislave history, or more than 30 years of consistent agency pracce. Since the 340B program's incepon, HRSA has consistently required that the discount be provided to covered enes at the point of salean upfront discount. HRSA's own prior guidance3, including statements made in direct response to manufacturer inquiries in 2024, confirmed that unilateral manufacturer implementaon of a rebate model "without prior Secretarial approval would violate secon 340B(a)(1) of the PHS Act." The agency has now proposed to do precisely what it previously characterized as a statutory violaon. The U.S. District Court for the District of Maine's December 29, 2025, preliminary injuncon in American Hospital Association et al. v. Kennedy et al. (No. 25-cv-600) found that HRSA's original rebate pilot program reflected a "departure from [HRSA's] decades-long pracce of requiring upfront discounts on 340B eligible drugs" and that HRSA "failed to follow the APA's basic blueprint." The court further found "fatal" HRSA's failure to evaluate the costs and benefits of the rebate model or to weigh covered enes' decades of reliance on the upfront discount structure. The February 10, 2026, order4 vacang and remanding the pilot program confirms that a rebate model cannot be lawfully implemented without a thorough, transparent, and procedurally proper rulemaking process. 3 U.S. Department of Health, Health Resources and Services Administration (HRSA;, 340B Rebate Model Pilot Program; 90 Fed. Reg. 146 (August 1, 2025). https://www.govinfo.gov/content/pkg/FR-2025-08- 01/pdf/2025-14619.pdf 4 American Hospital Association et al. v. Kennedy et al., No. 2:25-cv-00600-LEW (D. Me. Feb. 10, 2026) (Order on Motion to Vacate and Remand). NASP Comments April 20, 2026 | Page 6 The legislave history of the 340B statute underscores the upfront discount model's centrality to the program's purpose. The program was designed to preserve for safety-net providers the ability to "stretch scarce federal resources." A rebate model that requires covered enes to deploy those scarce resources to fund WAC-level upfront drug purchasesand to spend addional resources on administrave compliance, staffing, and IT infrastructuredirectly inverts the program's purpose. It transforms covered enes from beneficiaries of the program into temporary creditors of pharmaceucal manufacturers. The American Hospital Associaon has esmated5 that compliance with a rebate model for just 10 drugs would require, on average, nearly two full-me employees per hospitalamounng to approximately 11.2 million burden hours across over 2,700 340B hospitals, at an esmated aggregate cost of more than $400 million annually. HRSA's own burden esmates confirm the disproporonate impact: covered enes would bear more than 5,000 mes the annualized burden hours imposed on manufacturers. NASP respecully submits that deploying 340B program savings on administrave compliance with a manufacturer-controlled rebate process rather than on paent services is manifestly counter to the program's purpose. While NASP does not support a rebate model, if HRSA were to proceed, it would be necessary to ensure that any rebate model must, at minimum, fully account for and offset these costs, provide independent adjudicaon of rebate denials, and include enforceable melines and financial penales for delayed payments. IV. Specific Responses to Selected RFI Quesons A. Administrative and Operational Costs (RFI Section 1) Specialty pharmacies within 340B covered enes may face substanal incremental administrave and operaonal costs under a rebate model, if it the model was not run out of a single plaorm across manufacturers. Separate submissions would require a pharmacy to submit claims-level data to mulple separate manufacturer plaormseach with its own formats, melines, and adjudicaon criteriawould require new IT integraons, addional pharmacy staff, and revised dispensing workflows. These costs are parcularly burdensome for specialty pharmacies, which already operate under complex compliance environments addressing state licensure, JCAHO and other accreditaons, PBM contract requirements, and HRSA 340B program integrity rules simultaneously. 5 American Hospital Association, Comment Letter to HRSA; The 340B Rebate Model Pilot Program (Information Collection Request), at 23 (Sept. 30, 2025); https://www.aha.org/lettercomment/2025- 09-30-aha-letter-hrsa-re-340b-rebate-model-pilot-program. NASP Comments April 20, 2026 | Page 7 NASP recommends that HRSA require any rebate pilot to standardize the data submission format and plaorm across all parcipang manufacturers, to prevent the compounding burden of mulple incompable systems. HRSA should require manufacturers to bear the costs of plaorm development, integraon, and ongoing maintenance, and to provide covered enes with direct technical support at no charge. Any startup meline must provide covered enes no less than 12 months from final program design to implementaon, to allow for IT development, staff training, and contract renegoaon. B. Payment Timing and Cash Flow (RFI Section 2) The cash flow impact of a rebate model on specialty pharmacy operaons cannot be overstated. Specialty drugs dispensed through 340B covered enty pharmacies frequently carry WAC prices of $10,000 to $50,000 per month or more per paent. Under a rebate model, the covered enty would be required to purchase these drugs at WACpotenally weeks before any rebate payment is received. Wholesalers oen offer prompt-pay and pre-pay discounts which most hospitals take advantage of, paying in less than 30-days to allows for greater cost of goods discounts. However, standard wholesaler payment terms for specialty drugs are typically 30 days from invoice, but rebate payment melines under the proposed model could extend 30 to 90 days or more from date of dispense, creang a compounding cash flow deficit. NASP strongly supports a guaranteed maximum 10-calendar-day rebate payment meline from data submission, as referenced in RFI Secon 2(d), but notes that the 10- day clock must begin from dispense, not from covered enty submission, to prevent manufacturers from delaying the trigger date. HRSA should require manufacturers to pay interest on rebates not paid within the mandated meline, at a rate equal to the Federal short-term rate plus 3 percentage points, consistent with IRS underpayment interest standards. HRSA should evaluate and publish data on actual rebate payment melines experienced in any pilot, disaggregated by drug and manufacturer, to enable meaningful assessment of cash flow impacts. C. Rebate Denials (RFI Section 3) NASP is deeply concerned that a rebate model would enable manufacturers to unilaterally impose their own interpretaon of 340B paent eligibility through selecve rebate denials, effecvely circumvenng HRSA's statutory authority to administer the program. Under the current upfront discount model, manufacturers cannot deny discounts based on individual paent determinaons. Under a rebate model, manufacturers would gain transacon-level visibility and could deny rebates based on their own, potenally more restricve, definions of paent eligibility, such as requiring specific types of clinical relaonships, excluding paents NASP Comments April 20, 2026 | Page 8 referred from community providers, rejecng contract pharmacy arrangements, or imposing documentaon requirements beyond HRSA's standards. This would create inconsistent, manufacturer-specific eligibility criteria that vary by drug and undermine the uniform naonal program Congress established. Covered enes would face impossible choices between restricng paent access based on manufacturer preferences or risking non-payment aer dispensing. NASP urges HRSA to explicitly prohibit manufacturers from denying rebates based on paent eligibility interpretaons that differ from official HRSA guidance, and to require that covered enes' good-faith paent eligibility determinaons are presumpvely valid unless the manufacturer can demonstrate clear non-compliance with specific HRSA regulatory requirements. Permissible grounds for denial must be narrowly defined in advance by HRSA, not by individual manufacturers, and limited solely to objecve, documentable criteria. HRSA must establish an independent adjudicaon process for denied claims, with binding resoluon melines and enforceable remedies. Manufacturers must bear the administrave burden of idenfying improper claims, not covered enes; the default presumpon must favor rebate payment pending resoluon of any dispute. D. Patient Access to Drugs (RFI Section 1(e)(iii)) NASP specifically urges HRSA to require a comprehensive pre-implementaon paent access assessment for any rebate pilot. Such assessment should evaluate: (1) the impact on covered enes' ability to maintain specialty drug formulary breadth; (2) the effect on point-of-sale discount programs for uninsured and underinsured paents at contract specialty pharmacies; (3) the potenal for specialty drug therapy delays atributable to covered enty cash flow constraints; and (4) the disproporonate impact on rural and underserved populaons served by safety-net specialty pharmacy programs. V. Recommended Alternaves to Achieve Shared Program Integrity Goals NASP recognizes that the concerns movang manufacturer interest in rebate models parcularly duplicate discounts and the MDPNP nonduplicaon provision are legimate and warrant a well-designed policy response. NASP respecully proposes the following alternaves that would advance program integrity without the cash flow, access, and administrave harms associated with a rebate model: Enhanced claims-level data sharing: HRSA should work with covered enes, contract pharmacies, TPAs, and manufacturers to develop a standardized, real-me claims data exchange framework that enables manufacturer idenficaon of 340B-eligible claims without requiring a rebate payment structure. NASP Comments April 20, 2026 | Page 9 Medicaid duplicate discount prevenon technology: Investment in improved data matching between 340B claims and Medicaid managed care encounter data would more directly address the duplicate discount problem without restructuring the enre payment architecture. MDPNP nonduplicaon safe harbors: HRSA and CMS should work jointly to develop a targeted, operaonally feasible framework specifically for addressing the 340B/MFP nonduplicaon provision for MDPNP-negoated drugs, rather than imporng the rebate model into all 340B transacons. Eliminate specialty drugs/pharmacies from parcipaon: if an inial pilot is pursued, it should be restricted to non-specialty medicaons with predictable ulizaon paterns, lower per-unit costs, and lesser paent access risks. Specialty drugs must be explicitly excluded from any inial rebate pilot, with a separate, specialty-specific assessment conducted before any expansion to this category. Conclusion NASP respecully urges HRSA to decline to implement a 340B rebate model pilot at this me. The cash flow disrupon, paent access risks, statutory concerns, and administrave burdens associated with a rebate model are parcularly severe in the specialty pharmacy context and are not outweighed by the program integrity benefits that could be achieved through less disrupve means. The 340B program has served covered enes and their paents effecvely for more than 30 years through the upfront discount model; that model should be preserved and strengthened. If HRSA ulmately determines that a rebate pilot is warranted, NASP urges the agency to: (1) complete a full noce-and-comment rulemaking before implementaon; (2) exclude specialty drugs from any inial pilot scope; (3) mandate standardized, manufacturer-funded data plaorms; (4) guarantee rebate payment melines enforceable by independent adjudicaon; (5) fully offset all incremental covered enty costs; and (6) conduct a robust pre- and post- implementaon assessment of paent access outcomes. NASP appreciates HRSA's expressed commitment to a "methodical and deliberate approach" and strongly cauons against fast implementaon of any rebate pilot. We are available to provide addional informaon or technical assistance as HRSA evaluates the path forward. For addional informaon please contact me at sheila.arquete@naspnet.org. Respecully submited, Sheila Arquete, RPh. President & CEO NASP Comments April 20, 2026 | Page 10
HRSA-2026-0001-2418St. Joseph Health Regional Hospital2026-04-20T04:00Z6,473 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Health Regional Hospital, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Joseph Health Regional Hospital, located in Bryan, Texas, is a full-service, faith-based hospital and the flagship facility of St. Joseph Health, a member of CommonSpirit Health. The hospital serves as a regional referral center for the Brazos Valley and surrounding rural communities, providing a broad range of services including emergency care, cardiovascular services, oncology, and surgical care. As a nonprofit health system, we are committed to improving the health of the communities we serve, with a focus on access to care for low-income, uninsured, and underserved populations. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 St. Joseph Health Regional Hospital HHS Docket No. HRSA-2026-03042 St. Joseph Health Regional Hospital relies on the 340B program to help offset the cost of outpatient pharmaceuticals so that we can invest more directly in the care our patients need every day. As a regional referral center serving the Brazos Valley and surrounding rural communities, we care for many patients who face barriers such as limited income, transportation challenges, and difficulty accessing specialty care. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Joseph Health Regional Hospital HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Joseph Health Regional Hospital As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2419Dartmouth Health2026-04-20T04:00Z18,234 chars
Please see the attached document. April 20, 2026 Via Online Submission to www.Regulations.gov The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: HHS Docket No. HRSA-2026-03042; Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: On behalf of Dartmouth-Hitchcock Health d/b/a Dartmouth Health, a health system serving Northern New England (Dartmouth Health), thank you for the opportunity to respond to HRSA OPAs Request for Information (RFI) regarding a potential 340B rebate model. We respectfully submit Dartmouth Healths comments on behalf of seven of its 340B covered entities (the Covered Entities). While our comments are responsive to many of the items contained within the RFI, given the public nature of the submitted comments, we have excluded specific confidential or sensitive information. We would be pleased to engage directly with HRSA on any follow-up questions. The Covered Entities are: Alice Peck Day Memorial Hospital, a Critical Access Hospital serving the rural Lebanon, New Hampshire region; Cheshire Medical Center, a Rural Referral Center serving the rural southwestern New Hampshire region; Mt. Ascutney Hospital & Health Center, a Critical Access Hospital serving central Vermont and neighboring New Hampshire communities; Mary Hitchcock Memorial Hospital, a Disproportionate Share Hospital and academic medical center with New Hampshires only Level I Adult and Level II Pediatric Trauma Center, serving all of Northern New England (MHMH); New London Hospital, a Critical Access Hospital serving the Lake Sunapee region of rural central New Hampshire; April 20, 2026 Page 2 Southwest Vermont Medical Center, a Rural Referral Center serving rural communities in Vermont, New York, and Massachusetts; and Valley Regional Hospital, a Critical Access Hospital serving rural Sullivan County, New Hampshire. As 340B-participating hospitals, each of the Covered Entities represents a critical part of the healthcare safety net in the rural area it serves. Dartmouth Health has seen first-hand the crucial role that 340B savings play in enabling each of these hospitals to stretch their scarce federal resources to provide necessary care and comprehensive service lines to their patient populations. We also have witnessed an erosion of those savings following a series of manufacturer-imposed constraints on the 340B program, and are concerned that any rebate model, but particularly one that is not developed with care, diligence, and enforceable manufacturer guardrails, will further erode those savings, jeopardizing the Covered Entities ability to continue to provide specialty care in rural areas that need it desperately. Currently, the Covered Entities 340B participation allows them to collectively commit millions of dollars per year to their local communities in the form ofwithout limitationproviding charity care, offsetting Medicaid shortfalls, funding community health, food security, and education initiatives, and subsidizing service lines that otherwise would not be financially feasible to operate. As described below, the implementation of any 340B rebate model will have a significant adverse financial impact upon the Covered Entities, putting at risk a portion of those safety net support funds. A rebate model that is not thoughtfully designed and consistent with the purpose of the 340B program will magnify that risk substantially. To be clear, the Covered Entities are, and always have been, committed to 340B program compliance and would support appropriately tailored government-administered program transparency measures to the extent needed to prevent statutorily-prohibited diversion and duplicate discounts and/or to facilitate deduplicating 340B purchases from Medicare Drug Price Negotiation Program (MDPNP) dispenses. We are, however, gravely concerned that a rebate model resembling what was proposed by HRSA previously would empower manufacturers to unilaterally restrict claims eligibility, withhold legitimate discounts indefinitely, and/or condition discounts on burdensome and unnecessary data requirementsall with little to no meaningful recourse for 340B covered entities. Below, we have outlined some key areas of concern about the impact of any rebate model, along with information on the impact of a rebate model generally on the Covered Entities and suggestions for minimum safeguards should HRSA elect to proceed with a proposed rebate model. 1. Cash Flow Impact Any version of a rebate model will impact the Covered Entities cash flows. In effect, it provides an interest-free loan to manufacturers for the time period during which a covered entity is awaiting the amount of the discount to which it is statutorily entitled. Even if manufacturers adhere strictly to a standard (for purposes of example, ten calendar days) payment window, that remains the case. Currently, the Covered Entities purchase 340B drugs at an upfront 340B-discounted price. Under April 20, 2026 Page 3 the rebate model, the Covered Entities would need to purchase drugs within the scope of the rebate program 1 at WAC/standard acquisition cost absent the 340B discount, wait until the drug is dispensed or administered to an eligible patient, and then submit a claim for a 340B rebate. A manufacturers ten-day payment window under a rebate model begins on the date on which a 340B covered entity submits the rebate claim, but a covered entitys net-new incremental carrying costs under the rebate model (i.e. floating the difference between acquisition cost and the 340B discounted price) begins as of the date of the purchase, and lingers: (i) while the drug held in inventory until a 340B-eligible dispense or administration; (ii) while the rebate claim is prepared and submitted by the covered entity; and (iii) while the manufacturer reviews and adjudicates the claim prior to payment. That represents a significant and adverse sea change in cash flow and liquidityparticularly for 340B covered entities that are already operating on thin margins. To put that impact in perspective, the Covered Entities collectively spend in excess of $560 Million Dollars per year ($1.53 Million per day) for drugsinclusive of 340B-discounted drugs. The In- Scope Drugs represent a significant part of that average spend and subjecting even just those 340B products to a rebate model will raise the collective average daily upfront drug spend of the Covered Entities consequentially. Notably, in a perfect world, that additional outlay would, at best, only be recouped upon the applicable manufacturers timely payment of the full rebate amount within ten days of a covered entitys submission of a rebate claim. Frankly, as discussed further below, the Covered Entities are concerned that a rebate model could invite the opportunity for manufacturers to delay or deny rebate payments and skeptical that payment rates would come close to approaching one hundred percent. We would note that Dartmouth Health is aware that manufacturers have taken the position that a 340B rebate would, in most cases, be paid by a manufacturer to the covered entity before the covered entitys purchase invoice from a wholesaler for the WAC amount is due. That is untrue and presupposes: (i) the covered entitys payment terms; (ii) that the covered entity is only out up to ten days worth of float; and (iii) that the manufacturer will pay the rebate without delay or condition. If, for example, a rebate corresponds to an In-Scope Drug that has been held in inventory for an extended period of time, payment to the wholesaler may be due before the In- Scope Drug is administered/dispensed and/or a rebate claim is submitted to the manufacturer or their agent. 2. Increased Administrative Costs Upon Dartmouth Healths Covered Entities In the current state, the Covered Entities administrative costs associated with 340B program compliance are relatively manageable because they are integrated into existing pharmacy, billing, and compliance workflows. Each Covered Entity maintains appropriate records, utilizes third- party administrators to assist with contract pharmacy compliance and inventory tracking, and engages in routine internal auditing and reconciliation. Dartmouth Healths dedicated 340B Center of Excellence (CoE) supports each Covered Entity in its program compliance and structure. The 1 We understand the proposed scope to be the twenty-five total drugs that HRSA previously approved for its original rebate model and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027 (the In-Scope Products). April 20, 2026 Page 4 work that the Covered Entities and CoE do to ensure compliance are predicated upon an upfront 340B discount structure. Introducing a rebate model will require additional personnel and resources to account for significant changes in staffing and operational workflow. Conservatively, Dartmouth Health believes that to implement and function under a rebate model that includes the In-Scope Drugs, the Covered Entities collectively would need to fund at least an additional 1.6 total FTEs worth of skilled professionals to: Upload rebate claims; Track and reconcile rebate claims; Review reconciliations for correctness and contest improperly denied claims; and Maintain underlying code to manage data element for the rebate model. Those roles would be net-new, salaried, and benefits-eligible. Importantly, the Covered Entities and CoE expect that some of their current employees will have to pivot a portion of their work to support the rebate model. As such, certain of those employees existing duties will have to be shifted to external vendors and/or absorbed by additional net-new employees to ensure resources are not diverted away from important patient care. As the number of In-Scope Drugs grows for a rebate model, the Covered Entities will need to continue to add employees to keep up with the companion increase in rebate claim volume. The frequency with which manufacturers deny or delay rebate claims will have an impact upon personnel needs as well; the more delays or denials, the larger the volume of appeals the Covered Entities and CoE will need to prepare, submit, and track. In shortthe costs of new employees are not tethered to a one-time transition or implementation period. It will be an ongoing net-new expense that the Covered Entities only expect to increase. The CoE has researched potential software tools to aid in rebate tracking and data management and conservatively estimates an upfront cost of six figures, plus ongoing fees. Both the upfront and ongoing personnel and tools needed to implement and maintain a rebate model will carry with them a significant financial burden on the Covered Entitiesone that will be exacerbated by untimely or denied rebate payments. 3. Uncertainties Regarding Rebate Payments The Covered Entities are concerned that a rebate model puts manufacturers squarely in control of determining a 340B rebate claims eligibility for payment. It opens the door for manufacturers to interpret 340B eligibility under their own standards notwithstanding a covered entitys compliance with its own uniformly-administered and appropriate policy for 340B eligibilitycreating both inconsistency across various manufacturers and payment uncertainty for covered entities. Even to the extent HRSA requires manufacturers to pay clean claims without applying subjective judgment on eligibility, we are concerned that an absence of clear enforcement and dispute reconciliation mechanisms will leave the Covered Entities (and all covered entities) vulnerable to delayed payments or payment denials for pretextual administrative reasons. That concern is far from unfounded. A retail pharmacy owned by one of Dartmouth Healths 340B Covered Entities, April 20, 2026 Page 5 MHMH, has experienced significant difficulty in receiving payment on MFP rebate claims submitted to the Beacon MFP Platform owned by Second Sight Solutions. Multiple manufacturers, through their agent Second Sight Solutions, have automatically denied rebate claims within the Platform simply because the pharmacy is owned by MHMH, a 340B covered entity, and the claim is apparently therefore likely to have been replenished with 340B inventory. To overcome the per se assumption that an MFP rebate claim is duplicative of the 340B price, the pharmacy has been instructed to have MHMH upload to Second Sights 340B ESP platform its 340B claims for all purchases reflected in the purchase invoice to which the MFP rebate claim corresponds. The pharmacy has responded to those denials stating that it already has confirmed there is no duplication and the claim is appropriate. Those responses have been unsuccessful essentially holding the rebates hostage and requiring the pharmacy to float the full undiscounted acquisition cost of the drug unless and until MHMH agrees to furnish voluminous and unrelated 340B claims data. With that precedent in mind, we respectfully urge that any proposed rebate model include clear and standardized adjudication processes, prompt payment and response requirements upon manufacturers, and an independent, timely mechanism for resolving claims-level disputes. 4. Data Scope, Protection, and Use Concerns The Covered Entities have concerns about Second Sight Solutions terms of use for its platforms, including the Beacon MFP Platform and 340B ESP, the platform manufacturers have used to implement their unilaterally-imposed contract pharmacy restrictions and attendant data requirements. Of note, Second Sight Solutions terms of use appear to be non-negotiable and, with respect to the Beacon MFP Platform, contain, without limitation, the following concerning provisions: Allowing Second Sight to disclose and sublicense the MFP Rebate Inquiry Data and any other data derived from the interpretation, analysis, and combination of the foregoing data with other data... to [manufacturers], commercial payers, rebate claims processors, HHS, or state Medicaid agencies; Agreeing that the Platform and service is being provided as-is, and that any damages for gross negligence or willful misconduct are limited to $1,000; Carving out manufacturers that are identified when the user signs into the Beacon MFP Platform from the disclaimer of third-party beneficiary rights under the contract; and Allowing for unilateral and retroactive amendment by Beacon. Dartmouth Health and the Covered Entities takes seriously the protection of their data and have robust processes in place to vet any third parties with which they are considering entering into any contract involving data. An inability to negotiate terms, vet a vendor meaningfully to confirm its security protocols, or define limitations on how submitted data can be used or disclosed is inconsistent with any hospitals appropriate data stewardship. It is challenging and concerning for April 20, 2026 Page 6 a 340B covered entity to be faced with holding the line on its standards or losing significant funds associated with discounted pricing to which it is entitled. At a minimum, we urge that any rebate model should include clear requirements that the platform vendor must submit themselves to covered entities standard vendor vetting processes and negotiate individually and meaningfully with covered entities on a services agreement and/or terms of use. Those requirements cannot be vague as 340B covered entities are at a decided bargaining disadvantage given the relative value of the 340B program to them. To that end, we propose that HRSA define and include in any rebate model minimum acceptable terms of use for any platform vendor, including clear restrictions on data use and monetization for purposes outside the strict evaluation of a rebate claim for compliance with the 340B statutes diversion and duplicate discount prohibitions and/or a duplicate MFP and 340B discount. 5. Concerns about Manufacturers Control over the Adjudication Process The prior proposed 340B rebate model pilot was structured to allow manufacturers to select their own platform for rebate claim and data submission. All of the manufacturers who submitted then- successful rebate proposals chose Second Sight Solutions Beacon platform. The selection of a rebate adjudication platform should not sit with manufacturers. As described above, 340B covered entities are already in an imbalanced contracting position with any rebate platform vendor; that imbalance is exponentially larger when the same vendor is being selected and awarded rebate model business by multiple manufacturers. To the extent HRSA proposes to move forward with a rebate model, we urge that a neutral, government-backed clearinghouse be identified and contracted through a competitive RFP in order to standardize rebate criteria, submission and payment processes, promote equal transparency between all stakeholders, and remove incentives for individual vendors to act in the interest of the manufacturer that has engaged them. In sum, shifting to any rebate model would have a significant and adverse financial impact upon the Covered Entities and the communities they serve. While we do not believe a rebate model is required or appropriate to facilitate MDPNP de-duplication nor to ensure compliance with the 340B statutes prohibitions on diversion or Medicaid duplicate discounts, we urge HRSA to meaningfully consider and build into any future approved rebate model guardrails to protect against the broad (and non-exhaustive) concerns we have presented in this letter. Thank you again for the opportunity to respond to the RFI and, again, we welcome a discussion of any follow-up questions you may have. Respectfully, Keith Thomasset Chief Pharmacy Officer, Dartmouth Health
HRSA-2026-0001-2420Ascension2026-04-20T04:00Z12,528 chars
Please see attached. Thank you. The Honorable Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20852 April 20, 2026 Submitted electronically via: https://www.regulations.gov/ RE: Request for Information: 340B Rebate Model Pilot Program Dear Administrator Engels: Ascension appreciates the opportunity to submit comments in response to the Request for Information (RFI) recently issued by the Health Resources and Services Administration (HRSA) entitled Request for Information: 340B Rebate Model Pilot Program (the 340B Rebate Model RFl).1 Global Comments Ascension is one of the nations leading non-profit and Catholic health systems, with a Mission of delivering compassionate, personalized care to all, with special attention to those most vulnerable. In FY2025, Ascension provided $1.7 billion in care to persons living in poverty and other community benefit programs along with $1.8 billion of unreimbursed care for Medicare patients. Across 15 states and the District of Columbia, Ascensions network encompasses approximately 97,000 associates, 23,100 aligned providers, and 91 wholly owned or consolidated hospitals. Ascension also operates 26 senior living facilities and a variety of other care sites offering a range of healthcare services. As a 340B-participating hospital system, Ascension is a cornerstone of the healthcare safety net in the many communities we serve. Our perspective is fundamentally guided by our Mission, which commits us to serving all persons with special attention to those who are poor and vulnerable. This calling gives us a unique perspective on how the proposed changes would impact our patients and allows us to provide the administration with insight into the challenges we anticipate from drug manufacturers under a rebate model. Participation in the 340B Program currently enables Ascension to commit an additional $445 million annually to our communities safety nets, while also supporting fundamental operations and carrying out our Vision to bring health, healing, and hope to all. We are concerned that a HRSA-approved rebate model would increase costs and potentially allow manufacturers to implement restrictive policies that limit access to 340B pricing, unnecessarily jeopardizing a significant portion of this vital safety-net funding. 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026). ascension.org While we understand HRSA is evaluating this shift to manage 340B ceiling prices for drugs subject to Medicare Part D negotiations in 2026 and 2027, Ascension firmly opposes the proposed change. Our dedication to spiritually centered, holistic care requires us to advocate for a compassionate and just society through our actions and our words. Thus, we must share that requiring covered entities to pay the full Wholesale Acquisition Cost (WAC) upfront introduces a substantial cash-flow burden and an unsustainable financial float. This strain threatens the stability of the safety-net and our capacity to provide comprehensive services to the individuals and communities we serve. For over thirty years, the 340B program has operated successfully through a system of upfront discounts. Shifting to a rebate-based model represents a fundamental and unnecessary departure from this proven framework. High HRSA audit compliance and the lack of manufacturer-identified systemic issues leave no justification for dismantling a proven system that successfully enables safety-net providers to serve vulnerable populations. While Ascension fully supports data transparency strategies aimed at preventing duplicate discounts or maximum fair price duplication, a rebate model is not required to achieve those goals. Instead, it forces providers to divert essential funding away from patient care and toward the complex tracking and reconciliation of rebatesadministrative burdens that fail to account for the operational complexity and data collection hurdles inherent in modern healthcare systems. Rather than implementing a burdensome rebate system, we urge HHS to adopt less intrusive alternatives. A retrospective process could effectively address federal non-duplication without forcing covered entities to bear the financial and technical costs of a rebate model. Costs of A Rebate Model Replacing the current 340B upfront discount model with a rebate-based structure would fundamentally destabilize the operational and financial foundations of the program, disrupting decades of established reliance within the Ascension health system. Our entire 340B infrastructure, including inventory management, vendor data sharing, and patient support, is built upon the existing statutory structure where discounts are realized at the point of purchase. Currently, administrative costs are predictable and manageable because compliance is integrated into existing pharmacy and billing workflows. However, a shift to a rebate model would force us to purchase drugs at non-340B prices, tying up critical capital and replacing streamlined systems with an onerous, post-transaction reimbursement process. This would require entirely new operational functions like claims-level tracking, rebate submissions, payment monitoring, and the resolution of manufacturer disputes, necessitating significant investments in specialized software and a massive expansion of administrative staffing. We strongly disagree with HRSAs assessment that these impacts would be minimal; these are not mere transition costs, but permanent financial and administrative burdens that would divert scarce resources away from patient care. Our experience with initial preparation in 2025 for the initially proposed pilot and general experience 340B ESP platform confirms that the resulting administrative burden, driven by inconsistent manufacturer requirements, is both overwhelming and permanent. For example, the notice of the original rebate model in 2025 imposed an overwhelming administrative burden on our organization. Simply registering for participation required a massive mobilization of resources, involving over 100 associates and the submission of more than 170 unique documents. Many of these requirements, such as obscure historical IRS records, far exceed the standard documentation required by HRSA for 340B registrationsuggesting a process designed more for deterrence than for efficiency. Beyond the initial registration, the ongoing requirement to use 340B ESP to secure pricing at both contract and internal pharmacies has created a permanent operational drain. We now employ staff Page 2 of 4 whose entire roles are dedicated to managing this platform and resolving the frequent technical and procedural failures on the vendors end. This level of complexity diverts essential resources away from our mission, transforming a program meant to support patient care into a constant struggle with administrative red tape. Extending this model to all hospital settings, particularly for physician-administered drugs, will create a bottleneck that drains vital resources. Furthermore, the RFI proposes expanding the rebate model to 25 drugsa significant jump from the 10 drugs originally announcedand will further compound Ascensions financial strain by forcing us to purchase even more medications at inflated prices. Data Collection Transitioning to a rebate model would fundamentally alter data management requirements, forcing us to manage a significantly higher volume of complex information. Ascension would move beyond maintaining internal compliance records to the much more demanding task of generating specialized, claims-level datasets for manufacturers and third-party platforms. A shift of this magnitude would require the seamless integration of pharmacy claims, medical billing, purchasing records, and patient eligibility data across various, and often siloed, systems. The practical execution of this model is hindered by the fact that the data required for rebate adjudication often does not match the information stored in Covered Entities current systems. A major challenge lies in the timing: pharmacy claims are typically processed instantly, whereas medical claims can take weeks or even months to finalize. These conflicting timelines would make it exceptionally difficult to provide the accurate, comprehensive data needed for rebate determinations, creating a massive administrative hurdle for Covered Entities. In addition, we dispute the claim that such a radical shift is necessary for program integrity or Medicare Drug Price Negotiation Program deduplication. Current HRSA audits already demonstrate high compliance, and manufacturers have failed to identify systemic integrity issues that would justify dismantling a system that has successfully allowed safety-net providers to stretch limited resources for the vulnerable populations we serve. Rebate Denials The transition to a rebate-based model introduces substantial operational uncertainty and financial volatility, primarily driven by the complexities of rebate denials and the absence of a structured dispute resolution framework. In a system where manufacturers are unilaterally responsible for evaluating claims, the lack of robust regulatory guardrails invites inconsistent application of rules and increases the risk of improper denials. In order to uphold program integrity and ensure impartial participation, any proposed framework must incorporate standardized adjudication protocols, definitive timelines for responses, and an independent mechanism for resolving contested claims. Without essential protections like these, Ascension will be subjected to significant administrative strain, undermining the predictability required to recover funds essential to the programs success. Should HRSA proceed with a rebate program despite our concerns, we respectfully urge the agency to explicitly bar manufacturers from denying rebate claims for 340B hospitalsparticularly those related to alleged Medicaid duplicate discounts or diversionto alleviate the burden on safety-net providers who would otherwise face costly disputes with manufacturer vendors. Under this approach, manufacturers would Page 3 of 4 still receive the claims data required for program integrity and maintain their statutory right to conduct formal audits. Furthermore, if HRSA permits denials, it is imperative that the agency mandates manufacturers to provide specific, transparent details for every instance, enabling hospitals to effectively resolve discrepancies. Ultimately, these safeguards are critical to ensuring the rebate process does not undermine the financial stability the 340B program was established to provide. Conclusion Should HRSA transition toward a rebate model, it is vital that the framework be governed by a neutral third party under the direct oversight of HRSA. Entrusting this system to manufacturer-sponsored entities would create inherent conflicts of interest and impose significant administrative burdens on covered entities. Without independent federal oversight, providers would be forced to divert critical resources toward disputing and navigating the inevitable red tape barriers designed to complicate the discount process. Furthermore, any rebate mechanism must be narrowly tailored to address specific regulatory conflicts, such as the duplicate discount issues arising from the Medicare Part D Inflation Reduction Act (IRA) provisions. HRSAs previous proposals were overly broad, capturing transactions that do not require such intervention. Expanding the rebate model beyond these specific scenarios would force covered entities into an unnecessary and unsustainable financial float, requiring them to carry the burden of higher upfront drug spend for purchases that are entirely irrelevant to the core problem of duplicate discounts. To protect the integrity of the 340B program, the scope must remain limited and the administration strictly impartial. We appreciate your consideration of these comments. If you have any questions, or if there is any additional information we can provide, please contact me at mark.howell1@ascension.org. Sincerely, Mark Howell Vice President, Advocacy Ascension Page 4 of 4
HRSA-2026-0001-2421St. Joseph Health Grimes2026-04-20T04:00Z6,918 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Health Grimes, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Joseph Health Grimes, located in Bryan, Texas, is a full-service, faith-based hospital and the flagship facility of St. Joseph Health, a member of CommonSpirit Health. The hospital serves as a regional referral center for the Brazos Valley and surrounding rural communities, providing a broad range of services including emergency care, cardiovascular services, oncology, and surgical care. As a nonprofit health system, we are committed to improving the health of the communities we serve, with a focus on access to care for low-income, uninsured, and underserved populations. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 St. Joseph Health Grimes HHS Docket No. HRSA-2026-03042 St. Joseph Health Grimes relies on the 340B program to help reduce the cost of outpatient pharmaceuticals so that we can invest more directly in the care our patients need close to home. As a critical access hospital serving a rural community, we care for many patients who face real barriers to healthcare, including long travel distances, limited access to providers, and financial challenges. The savings generated through the 340B program allow us to strengthen services that are essential to our community. We are able to support access to medications for patients who might otherwise delay or forgo treatment due to cost. We invest in care coordination and follow-up services that help patients manage chronic conditions and avoid unnecessary trips back to the hospital. We also enhance access to local services so patients can receive care in their own community rather than traveling far from home. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Joseph Health Grimes HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Joseph Health Grimes As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2422Puerto Rico Primary Care Association2026-04-20T04:00Z12,346 chars
See attached file(s) ASOCIACIN DE SALUD PRIMARIA DE PUERTO RICO, INC. Edificio Alianza #400 Ave. Amrico Miranda Esq. Las Amricas, Ro Piedras, PR 00927 // T. 787.758.3411 (33993399 April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: REQUEST FOR INFORMATION: 340B REBATE MODEL PILOT PROGRAM (HRSA-2026-03042) Submitted via regulations.gov Dear Director Britton: On behalf of the Asociacin de Salud Primaria de Puerto Rico (ASPPR)the Puerto Rico Primary Care Associationwe appreciate the opportunity to submit comments in response to HRSAs Request for Information (RFI) regarding a potential 340B rebate pilot. ASPPR supports Puerto Ricos 21 Community Health Centers (CHCs), which collectively serve more than 474,000 patients across the island. CHCs are a vital component of Puerto Ricos healthcare system, providing primary and preventive care for low-income and underserved populations, serving approximately 1 in 7 people in Puerto Rico. In addition, CHCs have been critical points of access to care during public health emergencies and disasters, ensuring continuity of essential services when they are most needed. Summary of Recommendations: In short, the ASPPR strongly urges HRSA to take the following steps: 1. HRSA should not implement a mandatory rebate model for any 340B covered entities (CEs). 2. Instead of a rebate model, HRSA should create a neutral claims clearinghouse, which will achieve all of HRSAs and manufacturers stated goals for the rebate model without imposing the harms described below. 3. If HRSA insists on pursuing a rebate model, it should categorically exempt CHCs due to their heightened vulnerability to the financial strains it will create. 4. If HRSA insists on allowing manufacturers to impose a rebate model on CHCs, the standards and procedures that... govern the approval of manufacturers rebate plans1 must include at least six safeguards to reduce the negative financial impacts on CHCs and their patients. 1 HRSA requested input on these in the first paragraph of the RFI summary. ASPPR Page 2 of 5 ASOCIACIN DE SALUD PRIMARIA DE PUERTO RICO, INC. Edificio Alianza #400 Ave. Amrico Miranda Esq. Las Amricas, Ro Piedras, PR 00927 // T. 787.758.3411 A. 340B savings underwrite a wide range of services that CHCs low-income patients rely on. CHCs serve as the backbone of the nations safety net. Nationally, in 2024 they served over 32 million patients, 90% of whom had incomes below 200% of the Federal Poverty Level, 18% of whom were uninsured, and millions more who were underinsured2. CHCs provided these patients with access to high-quality, affordable primary care, behavioral health, dental care, and pharmaceuticals regardless of their ability to pay. 340B savings are essential to CHCs financial stability, and their ability to provide these services at affordable rates to their low-income and uninsured patients. Consistent with federal law3 and regulation4, CHCs invest every penny of 340B savings into activities that expand access to care for the underserved populations they care for. 340B savings not only reduce the cost of medication for many patients, but they are also a critical funding source that underwrites many of the services that CHC patients rely on. For example, in Puerto Rico, CHCs routinely rely on 340B savings to support services such as dental care, SUD treatment, mental health services, care coordination and case management, community outreach, among others. As explained below, the rebate model will significantly reduce the level of 340B savings that CHCs will accrue, both directly and indirectly. As every penny of 340B savings goes into expanding access, these reductions in savings will lead directly to reductions in care for CHC patients. As a result, the rebate model will undermine not only patient access to affordable medications, but also the broader system of care that CHCs have built to meet their patients needs. B. A rebate model will create massive cashflow, administrative, and other costs for CHCs. Cashflow burdens. In late 2025, CHCs estimated that their upfront cost to purchase the ten 2026 pilot drugs at WAC would have been between 50 to almost 500 times more than they currently paid for those drugs. Simply requiring manufacturers to pay rebate claims within ten days does NOT protect CHCs from these cashflow strains. This 10-day turnaround addresses only one step in a multi-step financing process; other steps (e.g., waiting for drugs to be dispensed, meeting wholesaler payment deadlines) will still force CHCs to borrow substantial amounts of cash. Administrative burdens: A rebate model will require CHCs to implement IT systems to collect and submit claim-level data, reconcile payments across multiple manufacturers, and manage denials and disputes. It will also require careful financial management to minimize borrowing costs and wholesaler fees. Loss of rebates on undispensed units: Undispensed units are those units of a drug that during the normal and appropriate course of business are not dispensed or administered to a patient 2 Source: https://data.hrsa.gov/topics/healthcenters/uds/overview/national 3 Section 330(e)(5)(D) of the Public Health Service Act. 4 45 Code of Federal Register 75.307 Program Income ASPPR Page 3 of 5 ASOCIACIN DE SALUD PRIMARIA DE PUERTO RICO, INC. Edificio Alianza #400 Ave. Amrico Miranda Esq. Las Amricas, Ro Piedras, PR 00927 // T. 787.758.3411 because they are expired, damaged, etc. Under last years proposed rebate model, CHCs would have been forced to absorb the full WAC price on units that are undispensed, despite the CHC following all appropriate pharmacy standards. C. The costs resulting from a rebate model will force CHCs to scale back services, reduce discounts on drugs, and potentially stop providing rebate drugs entirely resulting in avoidable harm to patients health. Reduction in services: As required by law and regulation, CHCs invest every penny of 340B savings into services that expand access to care for their medically-underserved patients. Thus, every time 340B savings are reduced which would clearly occur under a rebate model CHCs are forced to scale back services on which their patients currently depend. The impacts will extend far beyond affordable pricing on medications, to all the types of services underwritten by 340B savings. Reduced access to affordable drugs for low-income patients: A rebate model will make it much more difficult for CHCs to discount rebate drugs enough to make them affordable for their low- income patients. As discussed above, some CHCs may stop purchasing these drugs under 340B, due to the direct financial costs and the risk of not receiving a rebate. CHCs that continue purchasing them under 340B expect to be forced to offer smaller discounts to their patients, for the same reasons. As a result, CHCs patients will face higher out-of-pocket costs, particularly for high-cost therapies. This will often lead to delays in starting or continuing treatment, and increased non- adherence, causing rates of avoidable complications and hospitalizations to rise. D. CHCs must be exempted from any rebate model due to their heightened vulnerability to the pressures it would create. The concerns described above - e.g., avoidable cash flow demands, administrative burdens, reductions in services, limited access to care for patients - apply to a degree to all 340B CEs, and therefore we strongly urge HRSA not to impose a mandatory rebate model on any covered entities. However, if HRSA insists on proceeding with a rebate model, it is critical that CHCs be exempted, as disproportionate negative impact that will have on the organizations. E. If HRSA insists on forcing CHCs into a rebate model, manufacturers must be required to incorporate at least six CHC protections in their plans. HRSA requests input on the standards and procedures that should govern the approval of manufacturers rebate plans. While we strongly encourage HRSA to exempt CHCs from any rebate model, if HRSA proceeds on a rebate model for CHCs, it should require manufacturers to incorporate the following protections into their plans: ASPPR Page 4 of 5 ASOCIACIN DE SALUD PRIMARIA DE PUERTO RICO, INC. Edificio Alianza #400 Ave. Amrico Miranda Esq. Las Amricas, Ro Piedras, PR 00927 // T. 787.758.3411 1. For each rebate drug, a requirement to advance CHCs enough rebates for cover the greater of two full package sizes or two months worth of dispense. 2. Requirement to reimburse CHCs for all costs incurred due to the rebate pilot -- fully, promptly and transparently. 3. Requirement to provide 340B rebates on a reasonable number of undispensed units. 4. Requirement to provide rebates at the unit level. 5. Prohibition on requiring BINs or PCNs on rebate claims. These two data elements are not necessary to implement the pilot and not always available to the covered entity. 6. Requirement to adhere to standardized administrative rules. There are multiple administrative decisions involved in establishing and operating a rebate model. HRSA should establish a standardized set of procedures and timeframes for these issues and require manufacturers to adhere to them. Failure to do this creates unnecessary confusion and burden, as CEs are forced to track and adhere to each manufacturers unique rules and timelines for the same issue. F. A Neutral Claims Clearinghouse would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose massive cashflow demands and administrative burdens on covered entities (CEs). Fortunately, HRSAs primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP)deduplication5 - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden as the rebate model, through the creation of a 340B Neutral Claims Clearinghouse. Compared to a rebate model, a Neutral Claims Clearinghouse would: Avoid cash-flow and borrowing challenges for CEs. Substantially reduce administrative burden on CEs. By reducing costs on CE, avoid the service reductions that would result from a rebate model. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades. Conclusion In closing, the sustainability of our nations primary care safety netand the ability of their 32 million low-income and uninsured patients to access affordable primary care, behavioral health care, and dental caredepends on HRSAs decisions in this area. A rebate model would directly threaten CHCs 5 Health Resources and Services Administration 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program, August 1, 2025. https://federalregister.gov/d/2025-14619 ASPPR Page 5 of 5 ASOCIACIN DE SALUD PRIMARIA DE PUERTO RICO, INC. Edificio Alianza #400 Ave. Amrico Miranda Esq. Las Amricas, Ro Piedras, PR 00927 // T. 787.758.3411 financial stability and force reductions in the essential services these patients rely on. We appreciate HRSAs commitment to a transparent process and trust the agency will: Carefully consider all stakeholder input, particularly the financial effects a rebate model will have on CHCs, and how this will impact patients who rely on them for primary, behavioral, and dental care. Evaluate less burdensome alternatives -- such as a neutral clearinghouse model -- that achieve program goals without undermining CHCs financial viability or patient access to care. Thank you for your consideration and for your continued commitment to the nations safety net. For further information, please refer requests to dcordero@saludprimariapr.org. Respectfully, Darielys Cordero, DrPH, MPH Executive Director Asociacin de Salud Primaria de Puerto Rico
HRSA-2026-0001-2423St. Luke's Health Memorial Lufkin2026-04-20T04:00Z6,862 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Lukes Health Memorial Lufkin, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program.St. Lukes Health Memorial Lufkin, located in Lufkin, Texas, is a faith-based, nonprofit hospital and a member of CommonSpirit Health. The hospital provides a broad range of healthcare services to patients across Lufkin and the surrounding East Texas region, including emergency care, surgical services, and specialty care. As a community-focused provider, St. Lukes Health Memorial Lufkin is committed to improving access to high-quality care for all patients, including those who are uninsured or underinsured. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 St. Lukes Health Memorial Lufkin HHS Docket No. HRSA-2026-03042 St. Lukes Health Memorial Lufkin relies on the 340B program to help reduce the cost of outpatient pharmaceuticals so that we can invest more directly in the care and services our patients need. As a hospital serving a large portion of East Texas, including many rural communities, we care for patients who often face barriers such as long travel distances, limited access to specialty care, and financial challenges. The savings we receive through the 340B program allow us to strengthen access to care in meaningful ways. We are able to help patients obtain the medications they need to manage chronic conditions, even when cost might otherwise stand in the way. We invest in care coordination and discharge support to ensure patients can safely continue treatment at home. We also support local access to services that reduce the need for patients to travel far outside their community for care. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Lukes Health Memorial Lufkin HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Lukes Health Memorial Lufkin As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2424Access Care of Coastal Texas2026-04-20T04:00Z15,107 chars
We are a Ryan White HIV/AIDS Program provider located in Galveston, Texas. We participate in the 340B Drug Pricing Program. Our organization is dedicated to improving health outcomes and reducing HIV-related disparities for uninsured and underinsured, low-income individuals living with HIV. The 340B program is essential to fulfilling that mission. Opening Position Statement We strongly oppose the implementation of a rebate-based model within the 340B program. Such a model is inconsistent with the statutory design of upfront discounts and would introduce financial, operational, and clinical risks that directly undermine patient access to life-sustaining medications and services. Alignment of Statutory Intent The core intent of the 340B program is to enable Covered Entities to stretch scarce federal resources to expand services and reach more patients. This intent closely aligns with the mission of the Ryan White HIV/AIDS Program, which is focused on improving access to care, ensuring treatment adherence, and reducing disparities among vulnerable populations. 340B is not separate from this mission, it is a critical tool that allows Ryan White providers to deliver comprehensive, life-sustaining care. Patient Impact and Comprehensive Care Through 340B savings, our organization is able to provide essential services to people living with HIV, including: Medication assistance for high-cost, life-saving antiretroviral therapies Access to medications that would otherwise be unaffordable or difficult to obtain Transportation services to ensure patients can attend medical appointments Behavioral health support services Food assistance through pantry programs Community outreach, including free HIV testing events These services are not optional, they are necessary to ensure patients can access care, remain in treatment, and achieve viral suppression. Without 340B, our ability to provide this comprehensive support would be significantly reduced, directly impacting patient outcomes and increasing health disparities. Public Health Impact: Viral Suppression and Prevention Sustained access to antiretroviral therapy is essential for achieving and maintaining viral suppression. When patients are virally suppressed, they not only experience significantly improved health outcomes, but they also do not transmit HIV to others. 340B enables providers to remove barriers to medication access and adherence, directly supporting viral suppression rates within the communities we serve. Any disruption to this model, whether through delayed access, increased administrative burden, or reduced resources, risks interrupting treatment continuity. Interruptions in care can lead to decreased adherence, increased viral loads, and a higher risk of transmission, undermining decades of progress in HIV prevention and treatment. Concerns Regarding Manufacturer Actions We are increasingly concerned about manufacturer-imposed restrictions and policy changes that are not grounded in statute but create operational barriers for Covered Entities. These include: Limitations on contract pharmacy arrangements Requirements for data submission outside statutory authority Movement toward rebate-based models For Ryan White providers, these changes are particularly concerning because continuity of medication access is critical. Any disruption in access to antiretroviral therapy can have immediate and serious consequences for patient health and public health outcomes. It is also important to recognize that 340B pricing is derived from manufacturer-established pricing. Covered Entities do not control these prices, yet, are being asked to take on additional administrative and financial burdens to support manufacturer-driven models. Administrative Burden and Financial Impact Ryan White providers, like many safety-net organizations, operate with limited resources while serving patients with complex medical and social needs. Significant Administrative Complexity Most Ryan White covered entities operate with a single 340B program manager responsible for all aspects of program compliance and operations. Under a rebate-based model, this role would expand significantly to include: Identifying eligible claims through a TPA or internal pharmacy system Extracting and formatting claims data for submission Submitting claims to multiple manufacturer-operated data platforms Tracking claim status, including approvals and denials Managing appeals or disputes for denied claims Reconciling previously identified 340B claims requiring credit and rebill processes Please see attachment for full comments. Access Care of Coastal Texas Ryan White Program Provider 340B Covered Entity We are a Ryan White HIV/AIDS Program provider located in Galveston, Texas. We participate in the 340B Drug Pricing Program. Our organization is dedicated to improving health outcomes and reducing HIV-related disparities for uninsured and underinsured, low-income individuals living with HIV. The 340B program is essential to fulfilling that mission. Opening Position Statement We strongly oppose the implementation of a rebate-based model within the 340B program. Such a model is inconsistent with the statutory design of upfront discounts and would introduce financial, operational, and clinical risks that directly undermine patient access to life-sustaining medications and services. Alignment of Statutory Intent The core intent of the 340B program is to enable Covered Entities to stretch scarce federal resources to expand services and reach more patients. This intent closely aligns with the mission of the Ryan White HIV/AIDS Program, which is focused on improving access to care, ensuring treatment adherence, and reducing disparities among vulnerable populations. 340B is not separate from this mission, it is a critical tool that allows Ryan White providers to deliver comprehensive, life-sustaining care. Patient Impact and Comprehensive Care Through 340B savings, our organization is able to provide essential services to people living with HIV, including: Medication assistance for high-cost, life-saving antiretroviral therapies Access to medications that would otherwise be unaffordable or difficult to obtain Transportation services to ensure patients can attend medical appointments Behavioral health support services Food assistance through pantry programs Community outreach, including free HIV testing events These services are not optional, they are necessary to ensure patients can access care, remain in treatment, and achieve viral suppression. Without 340B, our ability to provide this comprehensive support would be significantly reduced, directly impacting patient outcomes and increasing health disparities. Public Health Impact: Viral Suppression and Prevention Sustained access to antiretroviral therapy is essential for achieving and maintaining viral suppression. When patients are virally suppressed, they not only experience significantly improved health outcomes, but they also do not transmit HIV to others. 340B enables providers to remove barriers to medication access and adherence, directly supporting viral suppression rates within the communities we serve. Any disruption to this model, whether through delayed access, increased administrative burden, or reduced resources, risks interrupting treatment continuity. Interruptions in care can lead to decreased adherence, increased viral loads, and a higher risk of transmission, undermining decades of progress in HIV prevention and treatment. Concerns Regarding Manufacturer Actions We are increasingly concerned about manufacturer-imposed restrictions and policy changes that are not grounded in statute but create operational barriers for Covered Entities. These include: Limitations on contract pharmacy arrangements Requirements for data submission outside statutory authority Movement toward rebate-based models For Ryan White providers, these changes are particularly concerning because continuity of medication access is critical. Any disruption in access to antiretroviral therapy can have immediate and serious consequences for patient health and public health outcomes. It is also important to recognize that 340B pricing is derived from manufacturer-established pricing. Covered Entities do not control these prices, yet, are being asked to take on additional administrative and financial burdens to support manufacturer-driven models. Administrative Burden and Financial Impact Ryan White providers, like many safety-net organizations, operate with limited resources while serving patients with complex medical and social needs. Significant Administrative Complexity Most Ryan White covered entities operate with a single 340B program manager responsible for all aspects of program compliance and operations. Under a rebate-based model, this role would expand significantly to include: Identifying eligible claims through a TPA or internal pharmacy system Extracting and formatting claims data for submission Submitting claims to multiple manufacturer-operated data platforms Tracking claim status, including approvals and denials Managing appeals or disputes for denied claims Reconciling previously identified 340B claims requiring credit and rebill processes This would result in significant duplication of effort across systems that are not interoperable and would introduce multiple new workflow steps beyond current 340B operations. This process is operationally unsustainable within current staffing models and would likely require: Investment in additional software solutions Increased reliance on third-party vendors Hiring additional staff dedicated to rebate administration Financial Impact of Administrative Burden Currently, a significant portion of 340B savings is already reinvested into: Medication costs Program operations and compliance Direct patient support services Based on our current program structure, around 80% of our 340B savings are used to pay for the operations costs of the program. Including the use of third-party administration and existing compliance workflows, we estimate that a rebate-based model would increase operational costs by approximately 1015%, further reducing the resources available for patient care. Cash Flow Disruption and Clinical Risk A rebate-based model shifts the program from upfront discounts to retrospective reimbursement, introducing delays and uncertainty in accessing 340B savings. Delayed or denied reimbursement would directly impact our ability to: Maintain consistent access to antiretroviral medications Pay wholesalers and vendors in a timely manner Sustain patient assistance and adherence programs Maintain continuity of care For Ryan White providers, disruptions in cash flow can translate directly into interruptions in medication access, which can have immediate and serious clinical consequences. Increased Reliance on Data Systems and Manual Oversight Implementation of a rebate model would require expanded use of: Third-party administrators (TPAs) Manufacturer-required data platforms Additional reporting and validation systems This would increase costs related to: Vendor contracts Data extraction and reporting System integration and maintenance Despite increased reliance on technology, the process would still require significant manual oversight, including claim tracking, reconciliation, and dispute resolution, introducing risk for errors, delays, and compliance challenges. Data Access, Transparency, and Platform Concerns Many of the data elements requested by manufacturers under rebate models require Covered Entities to rely on TPAs and external vendors, creating additional costs. Furthermore, the use of manufacturer-aligned platforms raises concerns about transparency and neutrality. Covered Entities have limited visibility into claim determinations and denial processes, even when claims have already been validated for 340B eligibility. This creates duplication of effort and places Covered Entities in a position of both funding and validating data processes without corresponding transparency or control. In addition, many Covered Entities are already submitting claims data to existing platforms such as ESP. The development of additional, parallel systems increases inefficiency and administrative burden. We encourage: A neutral, standardized data clearinghouse approach Alignment across existing platforms to reduce duplication Greater transparency in claim approvals and denial processes A process to compensate Covered Entities for the cost of obtaining claims-level data The Following Minimum Safeguards Are Essential in the Event of a Rebate Program Upfront discount alternatives or hybrid models to prevent cash flow disruption Strict rebate timelines (e.g., 10 days) with financial penalties for delays A neutral, standardized, single data submission platform Prohibition on duplicate validation layers beyond TPA adjudication Transparent denial and appeals processes with defined timelines Reimbursement guarantees to eliminate claim-level uncertainty Need for Strong HRSA Oversight In addition, we respectfully urge HRSA to: Uphold the statutory intent of the 340B program Ensure that manufacturer actions do not impose requirements beyond the scope of the law Oppose rebate-based models that disrupt access to care Protect the ability of Covered Entities to utilize contract pharmacies Promote transparency, standardization, and fairness in any data-related requirements Conclusion For Ryan White providers, 340B is not simply a financial mechanism, it is a critical component of a comprehensive care model that enables patients to access life-saving treatment and supportive services. Maintaining viral suppression is not only essential for individual patient health, it is a cornerstone of public health strategy to prevent the spread of HIV. Any changes that weaken the 340B program risk reversing progress that has taken decades to achieve. The cumulative effect of increased administrative burden, financial instability, and delayed access to medications would materially undermine the ability of providers to deliver consistent, high-quality HIV care. We urge HRSA to take decisive action to preserve the integrity of the program and protect the patients and communities who depend on it. Thank you for the opportunity to provide comments. Access Care of Coastal Texas Ryan White Program Provider 340B Covered Entity
HRSA-2026-0001-2425Northern Arizona Healthcare2026-04-20T04:00Z24,218 chars
See attached file(s) The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Maryland Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA- 2026-03042 Dear Administrator Engels: On behalf of Northern Arizona Healthcares Flagstaff Medical Center and Verde Valley Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. For the reasons set forth below, the answer must be no. As explained below, any rebate mechanism will impose enormous costs and burdens on Flagstaff Medical Center and Verde Valley Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model appears to be based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Flagstaff Medical Center and Verde Valley Medical Center have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Northern Arizona Healthcare has done its best to provide detailed answers in the limited time available. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased compared to those we had calculated for the 2026 drugs alone. As more drugs and drug companies participate, there will be more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, an increased likelihood of disputes over delays and denials, and consequently, fewer resources that Flagstaff Medical Center and Verde Valley Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require Northern Arizona Healthcare to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Northern Arizona Healthcare understood that we would incur some reasonable administrative expenses. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institutions that go well beyond what we had expected and planned for as 340B hospitalsand well beyond what we are experiencing now. Northern Arizona Healthcare estimates it would need to spend a minimum of $50,000 in incremental administrative and operational start-up costs under a 340B Rebate Model Pilot Program. Beyond these start-up costs, Northern Arizona Healthcare expects to spend an additional $65,000 annually in labor costs for claims processing, data submission, reconciliation, audit support, and denial mitigation efforts. This additional 1 FTE burden is due to the rebate program introducing new risks: mis-matched claim data, delayed dispute responses, potential duplicate discount allegations, and increased likelihood of audit flags. As more manufacturers drugs join the rebate model, the burden would only grow. In addition to the internal administrative burden described above, Northern Arizona Healthcare anticipates significant increases in external costs. Navigating varied manufacturer requirements and maintaining compliance with evolving rebate processes would likely necessitate expanded engagement with our Third Party Administrator (TPA), specialized consultants, and external legal counsel. Certain servicesmost notably external legal counselcarry substantial costs, while additional expenses associated with our automated TPA services remain difficult to project, as pricing has not yet been established by the vendor. These external cost pressures would further diminish the financial relief the 340B program is designed to provide to safety-net providers. Collectively, the projected increases in staffing, external consulting, and legal counsel represent a sustained, long-term financial obligation one that is fundamentally inconsistent with the 340B programs core mission of supporting safety-net providers and the vulnerable populations they serve. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Northern Arizona Healthcare to effectively provide drug companies interest-free loans totaling over $34,000 per month as we await the discounts owed under the 340B statute. As additional manufacturers drugs join the rebate model, this financial strain will only increase. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, the delayed discount will have a meaningful impact on our institution and the patients we serve. Given these anticipated cash flow challenges, it is important to consider the downstream effects on our ability to deliver care. Adverse Impacts of These Additional Costs and Burdens All of these many different costs and burdens add up. Unfortunately, this means that Northern Arizona Healthcare will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Northern Arizona Healthcare currently provides $13.1 million annually in charity care. Any disruption in 340B savings will substantially impact our ability to continue such community support. Northern Arizona Healthcare serves more than 700,000 people in communities across the region. It provides comprehensive health care services through Flagstaff Medical Center and Verde Valley Medical Center, as well as through primary care and specialty physician clinics, outpatient surgical centers, Cardiovascular Institute, Cancer Centers of Northern Arizona Healthcare, EntireCare Rehab & Sports Medicine, Childrens Health Center, Orthopedic & Spine Institute, Guardian Air, and Guardian Medical Transport. The 340B savings are a key component in supporting such broad, high-quality health care delivery to northern Arizona. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Northern Arizona Healthcare reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Northern Arizona Healthcare has significant issues with Beacons Terms of Use. Sections 1.a. and 1.d of the Terms of Use appear to enable the CE to deidentify claims data such that it is no longer considered Protected Health Information (PHI) under HIPAA, and that the data is de-identified in accordance with HIPAA using the expert determination method set forth at 45 C.F.R. 164.514(b)(1). Northern Arizona Healthcare requested that Beacon provide that expert determination. Beacon failed to respond to that request. Additionally, Beacon failed to respond to the subsequent request that, if it could not provide the expert determination, to provide the following: The name of the expert that provided the opinion; Confirmation that Second Sight Solutions will maintain a valid opinion for as long as it processes the portal data; Confirmation that the deidentification opinion applies to state consumer privacy laws (e.g., CCPA) in addition to HIPAA; and Confirmation that the data combinations outlined in Sections 3(d) and 3(g) of the Terms of Use will not affect the deidentified status of the resultant data set. Efforts to Address 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Northern Arizona Healthcare, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to address 340B/MDPNP duplicate discounts, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Conclusion For all of these reasons, Northern Arizona Healthcare respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA should therefore abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this proposed approach, it must allow Northern Arizona Healthcare and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, and other guardrails). Failing to permit additional comments on the specific features of the program would be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Scott Waldrop, PharmD System Director of Pharmacy Services Northern Arizona Healthcare The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Maryland Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Northern Arizona Healthcares Flagstaff Medical Center and Verde Valley Medical Center, we are grateful for the opportunity to comment on the Department of Health and Human Services (HHS) Request for Information: 340B Rebate Model Pilot Program. Among other things, this RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. For the reasons set forth below, the answer must be no. As explained below, any rebate mechanism will impose enormous costs and burdens on Flagstaff Medical Center and Verde Valley Medical Center that far outweigh any benefits that might come from it. HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model appears to be based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Preserving the upfront discount mechanism, which Flagstaff Medical Center and Verde Valley Medical Center have relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Northern Arizona Healthcare has done its best to provide detailed answers in the limited time available. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSAs February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased compared to those we had calculated for the 2026 drugs alone. As more drugs and drug companies participate, there will be more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, an increased likelihood of disputes over delays and denials, and consequently, fewer resources that Flagstaff Medical Center and Verde Valley Medical Center can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program Any rebate program would require Northern Arizona Healthcare to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Northern Arizona Healthcare understood that we would incur some reasonable administrative expenses. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institutions that go well beyond what we had expected and planned for as 340B hospitalsand well beyond what we are experiencing now. Northern Arizona Healthcare estimates it would need to spend a minimum of $50,000 in incremental administrative and operational start-up costs under a 340B Rebate Model Pilot Program. Beyond these start-up costs, Northern Arizona Healthcare expects to spend an additional $65,000 annually in labor costs for claims processing, data submission, reconciliation, audit support, and denial mitigation efforts. This additional 1 FTE burden is due to the rebate program introducing new risks: mis-matched claim data, delayed dispute responses, potential duplicate discount allegations, and increased likelihood of audit flags. As more manufacturers drugs join the rebate model, the burden would only grow. In addition to the internal administrative burden described above, Northern Arizona Healthcare anticipates significant increases in external costs. Navigating varied manufacturer requirements and maintaining compliance with evolving rebate processes would likely necessitate expanded engagement with our Third Party Administrator (TPA), specialized consultants, and external legal counsel. Certain servicesmost notably external legal counselcarry substantial costs, while additional expenses associated with our automated TPA services remain difficult to project, as pricing has not yet been established by the vendor. These external cost pressures would further diminish the financial relief the 340B program is designed to provide to safety-net providers. Collectively, the projected increases in staffing, external consulting, and legal counsel represent a sustained, long-term financial obligationone that is fundamentally inconsistent with the 340B programs core mission of supporting safety-net providers and the vulnerable populations they serve. Payment Timing and Potential Cash Flow Impacts Unlike the existing upfront discount mechanism, any rebate mechanism will force Northern Arizona Healthcare to effectively provide drug companies interest-free loans totaling over $34,000 per month as we await the discounts owed under the 340B statute. As additional manufacturers drugs join the rebate model, this financial strain will only increase. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, the delayed discount will have a meaningful impact on our institution and the patients we serve. Given these anticipated cash flow challenges, it is important to consider the downstream effects on our ability to deliver care. Adverse Impacts of These Additional Costs and Burdens All of these many different costs and burdens add up. Unfortunately, this means that Northern Arizona Healthcare will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Northern Arizona Healthcare currently provides $13.1 million annually in charity care. Any disruption in 340B savings will substantially impact our ability to continue such community support. Northern Arizona Healthcare serves more than 700,000 people in communities across the region. It provides comprehensive health care services through Flagstaff Medical Center and Verde Valley Medical Center, as well as through primary care and specialty physician clinics, outpatient surgical centers, Cardiovascular Institute, Cancer Centers of Northern Arizona Healthcare, EntireCare Rehab & Sports Medicine, Childrens Health Center, Orthopedic & Spine Institute, Guardian Air, and Guardian Medical Transport. The 340B savings are a key component in supporting such broad, high-quality health care delivery to northern Arizona. Reliance Interests The RFI expressly invites comment on reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretarys express statutory authority to provide for discounts via rebate or discount. Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Northern Arizona Healthcare reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agencys prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called pilot form. Problems With the Beacon IT Platform Under HRSAs original Rebate Program, the approved drug companies were planning to use Second Sight Solutions Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. Northern Arizona Healthcare has significant issues with Beacons Terms of Use. Sections 1.a. and 1.d of the Terms of Use appear to enable the CE to deidentify claims data such that it is no longer considered Protected Health Information (PHI) under HIPAA, and that the data is de-identified in accordance with HIPAA using the expert determination method set forth at 45 C.F.R. 164.514(b)(1). Northern Arizona Healthcare requested that Beacon provide that expert determination. Beacon failed to respond to that request. Additionally, Beacon failed to respond to the subsequent request that, if it could not provide the expert determination, to provide the following: The name of the expert that provided the opinion; Confirmation that Second Sight Solutions will maintain a valid opinion for as long as it processes the portal data; Confirmation that the deidentification opinion applies to state consumer privacy laws (e.g., CCPA) in addition to HIPAA; and Confirmation that the data combinations outlined in Sections 3(d) and 3(g) of the Terms of Use will not affect the deidentified status of the resultant data set. Efforts to Address 340B/MDPNP Duplicate Discounts HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Northern Arizona Healthcare, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHAs position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to address 340B/MDPNP duplicate discounts, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. Conclusion For all of these reasons, Northern Arizona Healthcare respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA should therefore abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this proposed approach, it must allow Northern Arizona Healthcare and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, and other guardrails). Failing to permit additional comments on the specific features of the program would be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Scott Waldrop, PharmD System Director of Pharmacy Services Northern Arizona Healthcare
HRSA-2026-0001-2426Central Oklahoma Family Medical Center2026-04-20T04:00Z6,834 chars
See attached file(s) HEADQUARTERS | 527 West Third Street | Konawa, OK 74849 | 580-436-5111 | www.cofmc.com April 20, 2026 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program Potential Harm to Rural Health Centers Dear Director Britton, Oklahomas Community Health Centers provide quality, compassionate, and cost-effective care to Oklahomansespecially in rural and underserved areas. I write to you with grave concern about imminent policy changes that threaten to devastate rural health centers like ours. I ask for your urgent attention to the harmful effects of the proposed 340B rebate model. Please accept the attached report as documentation of the severe and disproportionate impact these policies will have on safety net providers. Under the proposed 340B rebate model, health centers such as ours would be required to purchase drugs at the Wholesale Acquisition Cost (WAC) one of the highest price points in the pharmaceutical market, often exceeding what for-profit pharmacies pay. After paying this high upfront cost, we would then face burdensome new data submission requirements that go well beyond existing compliance obligations. The proposed model would compel us to provide pharmaceutical manufacturers with confidential prescription claims data related to 340B drugs billed to commercial insurance payers. These manufacturers would, in turn, deny rebates to those payerswho would then lower our reimbursements to recover their losses. This change would effectively eliminate the value of the 340B program by stripping away savings derived from commercial plans. Meanwhile, the high upfront cost of drugs would constrain our cash flow and hinder our ability to serve a growing population of uninsured and underinsured patients. To be clear, there is no state or federal law that prohibits pharmaceutical manufacturers from paying rebates on 340B drugs billed to commercial payers. Congress intentionally designed the 340B program to allow safety net providers to bill commercial payers as they would for non-340B drugsso that we could reinvest those savings into patient care and essential services. We are already witnessing the early warning signs of the impacts a 340B rebate model would have on rural health centers. Across the state, our health centers are being forced to prepare for downsizing of services and staff. Vital programs such as mental health, obstetrics, dental, and other essential services designed to ensure access and affordability for Oklahomas most vulnerable populations will be sacrificed. If the rebate model proceeds the economic and human toll across Oklahoma will be catastrophic. The Stakes for Oklahoma This change will drastically weaken our ability to provide affordable, accessible care. A rebate model will force health centers to cut programs, close sites, and leave rural Oklahomans without access to life-saving medications. This is not merely a fiscal issueit is a matter of public health and community survival. Our Request We respectfully urge the Executive Administration halt the 340B rebate model pilot and pursue a fairer, more sustainable solutionspecifically, a neutral clearinghouse model that protects both safety net providers and drug manufacturers in a balanced and transparent way. We are aware of one such clearinghouse model already in development. Without decisive action, rural health centers across Oklahoma will face closures, and countless patients will lose access to essential medications and care. With respect and urgency, Brenda Ware, CEO Central Oklahoma Family Medical Center Executive Summary Impact of the 340B Rebate Model on Central Oklahoma Family Medical Center Why It Matters Community Health Centers (CHCs) are the backbone of Oklahomas healthcare safety net. They provide high-quality, affordable care regardless of income or insurance status. The proposed 340B rebate model threatens the financial stability of CHCs by destabilizing pharmacy operations, restricting cash flow, and reducing savings reinvested in care for underserved patients. Without swift executive action, patients will lose access to affordable medications as drugs must be purchased at wholesale acquisition cost (WAC), forcing clinic reductions or closures statewide. Financial Impact at Central Oklahoma Family Medical Center Category Impact Area Details / Estimated Impact 340B Rebate Model 2024 340B Drug Costs $227,798.78 If Purchased at WAC (AWP 20%) $7,513,684.43 Cash Flow Gap +$7.3M upfront Rebate Delay 60120 days (potentially longer with appeals) Liquidity Risk Millions tied up in receivables IRA / Medicare Fair Price e Non-340B Medicare Claims $438,948.01/year cash flow delay (~55 days) 340B Medicare Claims $4,876,806.84/year margin reduction (first 10 drugs) Added Administrative Burden $90,000$100,000/year IT & Training Costs $10,000$15,000/year Operational Consequences Strategic workforce reductions and service line evaluations to identify unsustainable operations without 340B revenue. Adjustments to formularies to remove unaffordable medications, reducing patient access to life-saving treatments. Jeopardized payroll, vendor payments, and reserves under new financial constraints. Grant compliance and debt covenants at risk, with possible rural site closures. Whats at Stake Patients Loss of affordable medication access as drugs must be purchased at full WAC prices. Disruption in chronic care treatment leading to worsening conditions and higher hospitalization rates. Out-of-pocket costs could rise 200400%, causing patients to skip or abandon treatment. Rural and tribal populations face disproportionate harm, worsening health disparities. Communities Job losses and economic decline as CHCs are key rural employers. Reduction or elimination of vital services like dental, behavioral, and maternal care. Longer travel times and reduced preventive care access for patients. Deterioration in community health and preventive care outcomes. Oklahomas Health System ER overload as CHCs reduce services, leading to higher uncompensated care costs. Rising Medicaid and Medicare expenses from delayed or forgone preventive care. Erosion of Oklahomas healthcare safety net and public health infrastructure. Reduced capacity to respond to public health emergencies and maintain vaccination rates. Our Request Suspend implementation of the 340B rebate model until a sustainable solution is established. Protect Oklahomas Community Health Centers from devastating financial and operational harm. Ensure that more than 350,000 Oklahomans continue to have access to affordable, life-saving care.
HRSA-2026-0001-2427St. Joseph's Health Madison2026-04-20T04:00Z6,421 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Health Madison, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. As a faith-based community hospital serving Burleson County and the surrounding region, we are committed to delivering high quality, compassionate care with a focus on patients who are low-income, uninsured, or underinsured. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. St. Joseph Health Madison relies on the 340B program to help offset the cost of outpatient medications and sustain essential services in a community where access to care can be limited. The savings generated through 340B allow us to reinvest directly into patient care, including expanding access to medications, supporting care coordination for patients with chronic conditions, and ensuring continuity of care after discharge. Apr 20, 2026 St. Joseph Health Madison HHS Docket No. HRSA-2026-03042 Many of our patients face real barriers, including financial constraints, transportation challenges, and limited availability of specialty care in the region. The 340B program helps us close those gaps and maintain a strong, local healthcare presence. Any disruption to the current model would directly affect our ability to meet these needs. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Joseph Health Madison HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Joseph Health Madison As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2428St. Joseph's Health Grimes2026-04-20T04:00Z6,918 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA-2026-03042) Dear Administrator Engels, St. Joseph Health Grimes, a member of CommonSpirit Health, appreciates the opportunity to provide comments to the Health Resources and Services Administration (HRSA) on the Request for Information (RFI) related to a 340B Rebate Model Pilot Program. St. Joseph Health Grimes, located in Bryan, Texas, is a full-service, faith-based hospital and the flagship facility of St. Joseph Health, a member of CommonSpirit Health. The hospital serves as a regional referral center for the Brazos Valley and surrounding rural communities, providing a broad range of services including emergency care, cardiovascular services, oncology, and surgical care. As a nonprofit health system, we are committed to improving the health of the communities we serve, with a focus on access to care for low-income, uninsured, and underserved populations. T his RFI asks whether HRSA should implement a rebate model under the 340B program instead of the upfront discount model that has worked successfully for decades. Unequivocally, the answer is no. As explained below, a rebate mechanism will impose enormous costs and burdens on St. Joseph Health Burleson that far outweigh any benefits that might come from it. Indeed, HRSAs own calculations of costs are extraordinary. More fundamentally, HRSAs desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. However, based on its mandate, HRSA must give primacy to the needs of covered entities so that they can stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. We also disagree that HRSA must choose a discount mechanism when the existing process has been in place, and working appropriately, for decades. Preserving the upfront discount mechanism, which our hospital relies upon to reduce drug spending, is the best way to fulfill that purpose of the 340B program. Apr 20, 2026 St. Joseph Health Grimes HHS Docket No. HRSA-2026-03042 St. Joseph Health Grimes relies on the 340B program to help reduce the cost of outpatient pharmaceuticals so that we can invest more directly in the care our patients need close to home. As a critical access hospital serving a rural community, we care for many patients who face real barriers to healthcare, including long travel distances, limited access to providers, and financial challenges. The savings generated through the 340B program allow us to strengthen services that are essential to our community. We are able to support access to medications for patients who might otherwise delay or forgo treatment due to cost. We invest in care coordination and follow-up services that help patients manage chronic conditions and avoid unnecessary trips back to the hospital. We also enhance access to local services so patients can receive care in their own community rather than traveling far from home. Power in the Hands of Manufacturers We are very concerned that a rebate model will give undue power to drug manufacturers who have been very upfront in their dislike of the 340B program. Drug companies will have the power to deny our rebate unilaterally, forcing non-profit entities like safety net hospitals to expend resources on increased tracking, monitoring, and appealresources that would be better spent on serving our patients, paying our caregivers, and updating our facilities. While most manufacturers are likely to act in good faith, the proposed rebate system incentivizes manufacturers to withhold the rebates owed to covered entities. It creates an even more uneven playing field between covered entities and drug manufacturers. Unlike the existing upfront discount mechanism, any rebate mechanism will force covered entities to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have a meaningful impact on our institution and the patients we serve. Higher Costs, No Benefit Our 340B tracking and auditing systems are built upon the existing systems that have been in place for decades, including an up-front discount. We will have to revise these systems, duplicating some to dual-track the drugs that get a back-end rebate, and hire additional staff to ensure compliance and reporting. This will be a significant cost to our health system without a commensurate increase in benefit. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B covered entities. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. By creating a bifurcated system that requires up-front discounts for most drugs but back-end rebates for others, HRSA will create tremendous inefficiency, regulatory burden, and staffing challenges for covered entities. This will increase costs to covered entities. Apr 20, 2026 St. Joseph Health Grimes HHS Docket No. HRSA-2026-03042 We respectfully submit that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Monte J. Bostwick Market President St. Joseph Health Grimes As one of the nations largest nonprofit healthcare organizations, CommonSpirit Health delivers more than 20 million patient encounters annually through more than 2,300 clinics, care sites and 158 hospital-based locations, in addition to its home-based services and virtual care offerings. CommonSpirit has more than 160,000 employees, 45,000 nurses and 25,000 physicians and advanced practice providers across 24 states and contributes more than $5 billion annually in charity care, community benefits, and unreimbursed government programs. Together with our patients, physicians, partners, and communities, we are creating a more just, equitable, and innovative healthcare delivery system. Learn more at commonspirit.org .
HRSA-2026-0001-2429Kapiolani Medical Center for Women and Children2026-04-20T04:00Z17,514 chars
See attached file. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Kapiolani Medical Center for Women and Children (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces Page 2 participating providers drug acquisition costs so they can extend limited resources to support patient care and access. The RFI indicates rebates may be used to support program integrity and to operationalize non- duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same Page 3 volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self- auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Page 4 Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere the hospital does not routinely submit claims data considerable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Kapiolani Medical Center for Women and Children April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Kapiolani Medical Center for Women and Children (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces participating providers drug acquisition costs so they can extend limited resources to support patient care and access. The RFI indicates rebates may be used to support program integrity and to operationalize non-duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self-auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere the hospital does not routinely submit claims dataconsiderable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Kapiolani Medical Center for Women and Children
HRSA-2026-0001-2430Fairview Health Services2026-04-20T04:00Z19,847 chars
Dear Administrator Engels, Fairview Health Services appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Program (340B Program) and, if so, how such a model should be structured. Fairview is a Minneapolis-based nonprofit, integrated health system providing exceptional health care across the full spectrum of medical services through our 90+ clinics and 10 hospitals, four of which participate in the 340B Program M Health Fairview University of Minnesota Medical Center, teaching hospital of the University of Minnesota; M Health Fairview St. Johns Hospital; Fairview Range Medical Center; and Grand Itasca Clinic and Hospital, a Sole Community Hospital. The M Health Fairview Center for Bleeding and Clotting Disorders also benefits from the 340B Program as a designated regional hemophilia treatment center. Fairviews broad care continuum includes academic and community hospitals, primary and specialty care clinics, senior and long-term care facilities, retail and specialty pharmacies, pharmacy benefit management services, rehabilitation centers, mental health care services, home health care services, and an integrated provider network. Fairview urges HRSA not to replace point-of-sale access to 340B pricing with a post-purchase rebate model. For decades, the 340B Drug Pricing Program has functioned as a discount program through upfront pricing at or below the ceiling price at the time of purchase. A shift to a rebate model would change when and how the ceiling price is realized and would introduce predictable friction into medication access by making the 340B price contingent on post-dispense claims submission, manufacturer processing, and the possibility of denials and disputes. A rebate model would give drug manufacturers full control of calculating and paying rebates. Fairview, like many covered entities, is concerned that drug manufacturers would deny rebates based on manufacturer-specific rules. Fairview is concerned a rebate model could result in a drastic reduction in 340B Program savings with limited opportunities for covered entities to appeal. Currently, Fairview is experiencing a 60 percent denial rate on our Maximum Fair Price (MFP) only refund claims for hospitals that participate in the 340B Program, even though the claims are not 340B eligible. We anticipate a rebate model could result in a similar inappropriate denial rate. Even if rebates are ultimately paid, a rebate structure shifts operational and financial risk to covered entities. For organizations like Fairview that support vulnerable patients and deliver time-sensitive therapies, that risk shows up as avoidable uncertainty at the moment when clinicians and patients need predictability. Please see the attached letter for Fairview Health Services' full RFI response. Thank you for consideration of these comments. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via Regulations.gov Re: Request for Information, 340B Rebate Model Pilot Program [HHS Docket No. HRSA2026 03042] Dear Administrator Engels, Fairview Health Services appreciates the opportunity to respond to the Health Resources and Services Administrations (HRSA) request for information (RFI) regarding whether HRSA should implement a rebate model under the 340B Drug Pricing Program (340B Program) and, if so, how such a model should be structured. Fairview is a Minneapolis-based nonprofit, integrated health system providing exceptional health care across the full spectrum of medical services through our 90+ clinics and 10 hospitals, four of which participate in the 340B Program M Health Fairview University of Minnesota Medical Center, teaching hospital of the University of Minnesota; M Health Fairview St. Johns Hospital; Fairview Range Medical Center; and Grand Itasca Clinic and Hospital, a Sole Community Hospital. The M Health Fairview Center for Bleeding and Clotting Disorders also benefits from the 340B Program as a designated regional hemophilia treatment center. Fairviews broad care continuum includes academic and community hospitals, primary and specialty care clinics, senior and long-term care facilities, retail and specialty pharmacies, pharmacy benefit management services, rehabilitation centers, mental health care services, home health care services, and an integrated provider network. Fairview urges HRSA not to replace point-of-sale access to 340B pricing with a post-purchase rebate model. For decades, the 340B Drug Pricing Program has functioned as a discount program through upfront pricing at or below the ceiling price at the time of purchase. A shift to a rebate model would change when and how the ceiling price is realized and would introduce predictable friction into medication access by making the 340B price contingent on post- dispense claims submission, manufacturer processing, and the possibility of denials and disputes. A rebate model would give drug manufacturers full control of calculating and paying rebates. Fairview, like many covered entities, is concerned that drug manufacturers would deny rebates based on manufacturer-specific rules. Fairview is concerned a rebate model could result in a drastic reduction in 340B Program savings with limited opportunities for covered entities to appeal. Currently, Fairview is experiencing a 60 percent denial rate on our Maximum Fair Price (MFP) only refund claims for hospitals that participate in the 340B Program, even though the claims are not 340B eligible. We anticipate a rebate model could result in a similar inappropriate denial rate. Even if rebates are ultimately paid, a rebate structure shifts operational and financial risk to covered entities. For organizations like Fairview that support vulnerable patients and deliver time-sensitive therapies, that risk shows up as avoidable uncertainty at the moment when clinicians and patients need predictability. Interest In Maintaining Upfront Discounts and Reliance on Point-Of-Sale Pricing HRSA asks whether stakeholders are interested in maintaining the current approach. Fairview strongly supports maintaining the current discount structure. Our 340B infrastructure, inventory, and purchasing workflows, compliance operations, and patient support services are built around receiving 340B pricing at the point of sale. We have reasonably relied on that longstanding operating model in staffing, budgeting, and the design of our pharmacy operations. Administrative, Operational, and Financial Concerns HRSAs RFI appropriately asks for practical details on administrative and operational lift. From our perspective, a rebate model would add a parallel claims-driven workflow to existing 340B Program operations. The administrative lift would not be limited to implementation. It would recur with each dispense subject added to the model and would require sustained staffing and systems support. For our organization, the major burden categories would include new data extraction and validation processes, new exception handling and reconciliation work, new submission tracking, expanded compliance oversight tied to submission deadlines, and additional IT infrastructure and maintenance. This would require additional Full Time Employees (FTE), reallocation of existing staff, and expanded reliance on third-party vendors. Fairview has hired a costly third-party vendor to help manage MFP. The annual rate of the vendor is over $200,000 to ensure compliance with MFP policies for 10 drugs. Based on this cost, it could cost Fairview millions to implement a system to manage a 340B rebate model that includes all drugs. Additionally, Fairview would have to hire new FTEs to manage the drug manufacturers denials. As mentioned above, the administrative challenges and cost would not be limited to implementation but would have to be revised and adjusted as drug manufacturers are likely to put new requirements in place and as new drugs enter the market. Finally, we need time to build these systems before a rebate model goes into effect. The systems needed to manage a rebate model do not currently exist and there will be IT costs to implement those. Fairview is particularly concerned that a rebate model would require diverting experienced pharmacy operations and revenue cycle staff away from patient-facing support functions such as benefits navigation, financial assistance coordination, patient education, adherence support, and care team communication. Fairviews anticipated shift in resources away from patient-facing support to burdensome administrative functions is based in part on our experience with manufacturer data submission platforms, including 340B ESP, which have been rife with costly challenges such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. In 2025, to maintain 340B pricing, Fairview had to respond to over 100 drug manufacturer policy changes, which were often made without notifying covered entities. Frequently, Fairview became aware of policy changes when 340B pricing became unavailable. We have dedicated staff just to address these challenges. Fairviews 340B Program Director alone spends an average of 20 hours a week resolving the various challenges related to drug manufacturer data submissions. With rebates applying across all hospital settings not just contact pharmacy the administrative burden and financial risk would significantly increase. Cash Flow Impacts and Payment Timing HRSA asks for input on cash flow impacts and whether short payment windows would mitigate those impacts. A rebate model inherently requires covered entities to purchase at higher prices and wait for repayment, tying up working capital that would otherwise support patient care and pharmacy operations. Even if HRSA requires manufacturers to pay rebates within a defined timeframe, hospitals and other covered entities are still exposed during the period between purchase, dispensing, submission, and repayment. For Fairview, a rebate model would reduce the amount of cash on hand, which would in turn affect our credit score. It would potentially reduce the number of patients who can access cell and gene therapies as Fairview would have to manage cash flow for these high-cost drugs. Fairview would have less flexibility to keep adequate inventory on hand and would need to rely more heavily on just-in-time inventory, which is not always reliable and may lead to delays in patient care. In addition, Fairview receives prompt-pay discounts through wholesalers, and a rebate model could force changes in payment timing that increase our overall drug expense or require changes in our purchasing practices. To maintain these discounts, even if we receive rebates within 10 days of data submission, which is an unlikely timeline, Fairview will have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Fairview is significantly concerned that our organization would not get our Cost of Goods Sold (COGS) discount on drugs since they would be purchased at full price. There would be no spread for the wholesaler, so the wholesaler cannot afford to pass on COGs discounts. COGS discounts are negotiated reductions from drug wholesalers, often calculated as a percentage off the wholesale acquisition cost (WAC), which directly improves gross profit. Rebate Denials and Dispute Resolution HRSA asks whether denial guardrails should be more specific and what documentation should be required. A rebate model creates a new point in the process where access to the 340B price can be delayed or denied. Under an upfront purchase approach, the ceiling price is applied at the time of purchase. Under a rebate approach, the covered entity only realizes the 340B price after submitting information and receiving manufacturer approval. If HRSA permits denials, HRSA should expect that even modest denial rates can generate significant operational burden when submissions occur at claim volume and require rework, follow-up, and reconciliation. From our perspective, the likely friction points would be disputes over claim completeness; inconsistent interpretation of submission rules; delays tied to vendor/platform processing; higher burden for physician-administered drugs or outpatient departments; or increased workload for pharmacy revenue cycle teams. As with the MFP requirements, the administrative burden of developing data required for submission would be significant. For example, putting wholesaler invoice number on each 340B dispense is a daunting task. Currently, Fairview does not have the capability to attach invoice number to 340B dispensed drugs, this is what is being required for MFP rebates that are denied under suspicion that we received a 340B upfront discount. Fairview is working to develop an algorithm; however, this is difficult because of the way credits and rebills, reversals, etc. This data is not easily accessible nor reformatted into a way drug manufacturers would accept. At minimum, denial grounds should be limited to a small set of clearly defined, objective circumstances tied to 340B Program rules, with standardized denial codes and standardized documentation requirements. Covered entities should have a rapid reconsideration pathway with firm timelines and a clear escalation mechanism for recurring issues or denial patterns. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, Fairview urges HRSA to prohibit manufacturers from denying any rebates for 340B hospitals and covered entities. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Data Collection, Privacy, And Security HRSA asks about data collection practices and how privacy and security concerns should be mitigated. HRSA should limit data collection to what is necessary to administer the model and should set clear privacy and security expectations, firm retention limits, and strict permitted- use limitations. Manufacturers and their vendors should not be permitted to use covered entity claims data for commercial purposes unrelated to 340B Program administration. Fairview is particularly concerned about the sensitivity of claims-level data; contractual and cybersecurity requirements for third-party vendors; increased exposure created by multiple manufacturer platforms; or operational complexity across inpatient/outpatient/specialty pharmacy settings. Required Reporting and Evaluation of Pilot Performance HRSA asks what reporting should be required and how a pilot should be evaluated. If HRSA proceeds, reporting should be standardized and HRSA-governed, with consistent definitions so comparisons are meaningful. HRSA should require enough reporting to monitor whether the model is functioning as intended and to identify systemic problems early, including payment timeliness, denial rates and reasons, and patterns of disputes or rework. Minimum Necessary Guardrails If HRSA elects to test a rebate model despite the concerns above, the pilot should be tightly scoped, time-limited, and structured so that participating covered entities are not forced to finance higher-priced purchases or absorb unpredictable operational burden simply to access the statutory 340B price. HRSA should be clear that a rebate mechanism cannot become a de facto condition on access to 340B pricing, whether through expansion in scope, informal pressure to participate, or operational rules that effectively require covered entities to adopt manufacturer-specific systems to obtain timely repayment. HRSA should establish one uniform operating standard that governs submissions, required fields, error handling, and timelines across all participating manufacturers. A pilot cannot be workable if it relies on manufacturer-by-manufacturer portals, formats, validation rules, or timelines. Without a single HRSA-defined process, covered entities will face a patchwork of requirements that multiplies implementation cost, increases error rates, and creates inconsistent access to repayment. HRSA should develop a plan for manufacturers who consistently deny 340B rebates, more than the ineffective dispute resolution process that is currently available. If a manufacturer is not meeting its commitment to 340B, action should be swift and enough to convince the manufacturer to fix its shortcomings. Prompt payment must be enforceable in practice. HRSA should set a clear payment clock that begins only when a submission is complete under uniform HRSA rules and should tightly limit what can be treated as incomplete to avoid repeated resets of the clock. If a manufacturer fails to act within the required timeframe, the default should be approval and payment, not delay. HRSA should also include a defined remedy for late payment, such as interest or another consequence that makes the covered entity whole and creates a real incentive for compliance. If HRSA permits denials at all, denial grounds should be narrowly defined, objective, and tied directly to program rules, not to manufacturer preferences or evolving documentation demands. HRSA should require standardized denial codes and standardized documentation requirements so covered entities can correct issues quickly and avoid duplicative rework. HRSA should also establish a fast reconsideration pathway with firm timelines and an escalation mechanism for recurring issues or denial patterns. Without these guardrails, a pilot will predictably turn into ongoing disputes, delayed repayments, and significant administrative diversion away from patient care operations. Conclusion For the reasons above, Fairview urges HRSA not to implement a rebate model under the 340B Program. A shift to a rebate model would fundamentally change the 340B Program and would create predictable friction into medication access by making the 340B price contingent on post-dispense claims submission, manufacturer processing, and the possibility of denials and disputes. If HRSA proceeds with any pilot, HRSA should adopt strict scope limits and enforceable safeguards so the pilot does not create barriers to access or shift unacceptable operational and financial risk onto covered entities. If you have any questions or need more information regarding these comments, please do not hesitate to contact Briana Parish, Director of Public Policy, at Briana.Parish@fairview.org. Sincerely, John Pastor, PharmD President, Fairview Pharmacy Services Fairview Health Services
HRSA-2026-0001-2431Pali Momi Medical Center2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-2434
HRSA-2026-0001-2432Straub Benioff Medical Center2026-04-20T04:00Z17,522 chars
Please see attached. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Straub Benioff Medical Center (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces participating providers drug acquisition costs so they can extend limited resources to support patient care and access. The RFI indicates rebates may be used to support program integrity and to operationalize non-duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self-auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere the hospital does not routinely submit claims dataconsiderable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Straub Benioff Medical Center Straub Benioff Medical Center | 888 S. King Street | Honolulu, Hawaii 96813 April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Straub Benioff Medical Center (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces participating providers drug acquisition costs so they can extend limited resources to support patient care and access. Page 2 The RFI indicates rebates may be used to support program integrity and to operationalize non- duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. Page 3 A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self- auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere the hospital does not routinely submit claims data Page 4 considerable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Straub Benioff Medical Center
HRSA-2026-0001-2433Children's Hospital Los Angeles2026-04-20T04:00Z8,697 chars
See attached file(s) April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: Childrens Hospital Los Angeles (CHLA) appreciates the opportunity to respond to the Health Resources and Services Administrations Request for Information regarding the 340B Rebate Model Pilot Program, following the Department of Health and Human Services agreement to vacate the prior pilot. CHLA submits these comments to address the deficiencies identified by the Maine court and to inform HRSAs consideration of any future actions affecting the administration of the 340B Drug Pricing Program. CHLA is one of the nations largest freestanding pediatric academic medical centers and a critical safety-net provider for children and families throughout the state of California. A significant majority of our patients are covered by Medicaid or other public programs, and many require highly specialized, resource-intensive care. The 340B Drug Pricing Program is essential to our ability to stretch scarce resources, maintain access to lifesaving outpatient medications, and sustain services that are chronically underfunded yet indispensable to pediatric patient care. For these reasons, CHLA strongly opposes replacing the programs longstanding upfront discount mechanism with a post-sale rebate model. A rebate-based structure would impose significant administrative, financial, and operational burdens on pediatric hospitals while offering no demonstrated benefit that could not be achieved through less disruptive and more lawful means. Most concerning, such a model would undermine the statutory purpose of the 340B program by shifting risk and cost from drug manufacturers to safety-net providers already operating under substantial financial constraints. CHLA already invests significant resources in staff, systems, and oversight to ensure compliance, including dedicated pharmacy, finance, and compliance personnel who manage eligibility determinations, utilization monitoring, and audit preparation throughout the year. Transitioning to a rebate model would require CHLA to establish parallel claims-level tracking and reconciliation workflows to identify rebate-eligible transactions, submit manufacturer-specific data, track payments, and pursue disputesfunctions that do not exist under the current structure. These requirements would necessitate additional staff and new information technology infrastructure and would divert limited institutional resources away from patient care. A rebate model would also disrupt hospital operations by requiring covered entities to purchase outpatient drugs at full list price while awaiting repayment of the statutory 340B discount. For pediatric hospitals already under financial strain, this shift presents meaningful cash-flow risk. In practice, CHLA would be required to advance the full acquisition cost of certain therapies before treatment can proceed, even when reimbursement pathways and rebate timelines remain uncertain. This would directly impact CHLAs pediatric oncology and transplant programs, where access to high-cost outpatient therapies is time-sensitive and clinically essential. For example, the proposed model would require hospitals to purchase medications at a higher price and delay billing until the rebate claim has been processed by the manufacturer, effectively doubling the work required to track charges and payments and increasing compliance risk. Current billing systems are not designed to bill, reverse, and rebill patients across inventory types. Simply put, the upfront cost burden of high-cost outpatient therapiesincluding life-saving gene therapies for rare pediatric conditions, where childrens hospitals serve as the nations primary research and treatment centerscannot be placed upon the very institutions best positioned to deliver that care. In addition to the administrative burden, the increasing complexity and frequency of high-cost drug utilization would have a significant impact on pharmaceutical budgets. The proposed model would require hospitals to wait for manufacturer reimbursement before being able to purchase additional high-cost drugs for patients requiring lifesaving therapy, potentially causing delays in treatment, risks to patient safety, and material fiscal strain. Taken together, supplemental payment delays, high-cost drug cash flow obligations, and rebate reconciliation burdens will place childrens hospitals at compounding financial risk. Billing prescriptions under one inventory type and then reversing and rebilling under another would introduce additional manual tasks for staff, as well as added fees, reconciliation challenges, and inventory tracking issues. These changes would make it more difficult to track, validate, and audit rebate receipt; address errors; pursue payment on denied claims; and challenge erroneous rebate denials. These challenges are compounded by the unique characteristics of pediatric medicine. Weight-based dosing and partial vial use often mean that pediatric hospitals accumulate drug volume more slowly than adult providers. As a result, covered entities may hold unreimbursed inventory for extended periods before meeting thresholds for rebate submission, even though medications have already been administered to patients. A rebate model would further complicate Medicaid billing and duplicate discount prevention. CHLA operates in California, a Medicaid prescription carve-in state with strict billing requirements and limited flexibility. Any model that delays recognition of 340B pricing until after a rebate is issued could result in delayed or denied Medicaid reimbursement and increase the risk that claims cannot be submitted within required timeframes, potentially leaving hospitals to absorb drug costs entirely. Because access to many advanced pediatric therapies is concentrated among a small number of specialized childrens hospitals, the financial risk introduced by a rebate model would not be broadly distributed across the health system but borne disproportionately by providers like CHLA. CHLA is also concerned about the data governance and legal implications of rebate models relying on manufacturer-driven or third-party platforms. Requiring covered entities to submit detailed utilization data under one-sided contractual terms raises concerns regarding patient privacy, cybersecurity, proprietary information, and transparency, particularly where hospitals lack meaningful insight into how submitted data may be used or shared. Importantly, HRSA has recognized that manufacturers have other lawful and less burdensome tools available to address duplicate discount concerns, including claims-based identifiers, state reconciliation arrangements, and third-party clearinghouse approaches. Many childrens hospitals already participate in cooperative models with state Medicaid programs that avoid duplicate discounts without disrupting the core structure of the 340B program. The Maine court emphasized that HRSA must act within its statutory authority, engage in reasoned decision-making, and meaningfully account for the burdens imposed on covered entities. CHLA respectfully submits that a rebate model fails to meet these standards and that the administrative record does not support replacing the upfront discount framework that Congress established. For these reasons, CHLA urges HRSA to abandon the concept of a 340B rebate model and to preserve the existing upfront discount structure. Any major structural changes could require CHLA to re-evaluate its participation in the 340B program. This would be an unfortunate outcome that would increase drug costs for the Medicaid program and reduce access to specialty pediatric care for the vulnerable children these programs are designed to serve. CHLA appreciates the opportunity to provide these comments and looks forward to continued engagement to ensure that the 340B program remains an effective tool for supporting access to care for vulnerable pediatric patients. We welcome the opportunity to discuss these concerns with you in greater detail. If you have questions or would like further information, please reach out to Lindsey Berman at lberman@chla.usc.edu or Abigail Lantz at alantz@chla.usc.edu. Sincerely, Lindsey Berman Associate Vice President Policy & Government Affairs Childrens Hospital Los Angeles
HRSA-2026-0001-2434Wilcox Medical Center2026-04-20T04:00Z17,403 chars
Please see attached. April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Wilcox Medical Center (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces participating providers drug acquisition costs so they can extend limited resources to support patient care and access. The RFI indicates rebates may be used to support program integrity and to operationalize non-duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self-auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere the hospital does not routinely submit claims dataconsiderable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Wilcox Medical Center April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA202603042) Dear Administrator Engels: Wilcox Medical Center (the Hospital), a 340B covered entity, submits these comments in response to HRSAs Request for Information (RFI) regarding the use of post-sale rebates in lieu of point-of-sale 340B pricing. We understand HRSA is considering a rebate model for 25 drugs: 10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. The Hospital recommends that HRSA not adopt a rebate model to replace point-of-sale 340B pricing. For decades, the 340B Program has operated through an upfront discount at purchase. The Hospitals purchasing, inventory, compliance, and financial controls are designed to receive the 340B ceiling price at the time of purchase, not to finance acquisition costs and later seek reimbursement. Replacing upfront discounts with rebates would require end-to-end redesign of 340B operations (purchasing, replenishment, split-billing, and compliance monitoring), expansion of claims-level data exchange, and new reconciliation and dispute processes. Because rebates must be validated and collected per eligible dispense or administration, these requirements would be ongoing rather than one-time. The burden would extend beyond the 25 pilot drugs due to the infrastructure needed to submit, track, reconcile, and dispute rebate claims. A rebate model would add claims-level submissions, rebate tracking, and payment reconciliation that are not required under point-of-sale pricing. These functions require staffing, technology, and third-party support and would redirect resources from clinical operations and patient access initiatives. Even a limited pilot would create recurring administrative workload and cash-flow exposure for hospitals with high outpatient drug volume. 340B hospitals serve low-income and underserved populations, including uninsured patients and patients covered by public programs that often reimburse below cost. The 340B Program reduces participating providers drug acquisition costs so they can extend limited resources to support patient care and access. Page 2 The RFI indicates rebates may be used to support program integrity and to operationalize non- duplication under the Medicare Drug Price Negotiation Program (MDPNP). Covered entities are subject to HRSA oversight, including audits, and manufacturers retain statutory audit rights. If HRSA and CMS identify operational gaps related to Medicaid or MDPNP non-duplication, those gaps can be addressed without converting 340B pricing to a post-sale rebate. For example, state Medicaid agencies can use retrospective identification of 340B claims (via covered entity claim identifiers) to exclude such claims from rebate invoicing; a similar retrospective exclusion approach could be evaluated for MDPNP coordination. A rebate model would require covered entities to transmit claims-level data to manufacturers or their rebate administrators to determine eligibility and prevent duplicate discounts. If HRSA proceeds, it should limit data elements to those necessary for 340B administration and require clear restrictions on secondary use and disclosure. A Rebate Model Would Require Upfront Purchases at Non-340B Prices and Create Financing Risk for Covered Entities Under a rebate model, the Hospital would purchase covered outpatient drugs at a non-340B price, dispense or administer the drug, submit a rebate claim, and await payment of the difference between the acquisition price and the 340B ceiling price. This structure shifts timing and credit risk to covered entities by requiring them to finance the price differential until payment. The effective financing period includes (1) time from purchase to dispense/administration and (2) time from dispense/administration to data submission, validation, and payment. Working capital constraints: Higher upfront costs increase cash requirements while rebates remain outstanding. Higher financing cost and loss of payment terms: Increased liquidity needs may require credit use and may reduce access to prompt-pay pricing. Inventory carrying and waste risk: Higher-value inventory held longer increases carrying cost and exposure to expiration, waste, or replacement. Billing-cycle delay: For outpatient administered drugs, charge capture, coding, and billing may delay rebate submission by weeks. Denial and dispute risk: Data mismatches or eligibility disagreements can delay payment and increase reconciliation and dispute activity. Budget volatility: Savings realized through later payments introduce timing uncertainty for forecasting and program planning. The Hospital relies on wholesaler payment terms and, where available, prompt-pay pricing tied to timely invoice payment. A rebate model increases the gross amount paid upfront for the same volume of drugs, increasing short-term liquidity requirements. Any disruption in payment timing can increase net acquisition cost through lost discounts, fees, or interest expense. Page 3 A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Because the Hospital receives 340B pricing at purchase today, a rebate model would require new processes and controls. The Hospitals experience with manufacturer-operated submission platforms has included error correction, inconsistent validation rules, and limited transparency into determinations affecting 340B pricing. If applied across outpatient settings, these issues would directly affect payment timeliness and increase reconciliation and dispute workload. Administrative workload: Claims submission, rebate tracking, reconciliation, error correction, and dispute management would become ongoing requirements. System and data changes: Additional interfaces and data feeds would be needed to support claims-level submissions from sites that do not currently report; expanded self- auditing would be required to confirm accuracy and eligibility. Staffing diversion: Implementation would require additional dedicated FTEs or reallocation of pharmacy, finance, and compliance staff time from existing functions. Vendor expense: Additional vendors for data aggregation, submission, and reconciliation would add recurring costs. Ongoing financial impact: Recurring administrative costs, combined with delayed reimbursement, would reduce resources available for patient care and community programs. Rebate timing depends on the availability of complete claims data. For drugs administered in outpatient departments, charge capture, coding, and billing often occur after administration and may not be finalized for weeks. If submission requires finalized claim elements, the Hospital would carry the higher acquisition cost during that lag, in addition to any manufacturer validation and payment timeframe. If HRSA Proceeds, the Pilot Should Minimize Denials and Provide Transparent, Standardized Reason Codes If HRSA proceeds, the pilot should limit denial discretion to reduce payment uncertainty and administrative burden. HRSA should require standardized denial categories and reason codes, defined documentation standards, and clear timelines for review and payment to support efficient correction and resolution. A Rebate Model Is Not Necessary for MDPNP Deduplication MDPNP operational issues should be addressed through targeted CMS process improvements rather than by replacing point-of-sale 340B pricing with a rebate model. Since January 1, 2026, the hospital has experienced challenges with 340B/MDPNP deduplication, including data mismatches, limited transparency into manufacturer determinations, and delays or inconsistencies in identifying duplicative claims. Even under the current MDPNP processwhere Page 4 the hospital does not routinely submit claims dataconsiderable staff time has been required to investigate and respond to good faith inquiries challenging improper Medicare refund denials. A 340B rebate model would expand these issues by requiring claims-level submissions for 340B utilization across payers and settings for the applicable drugs. Existing data discrepancies and system constraints would increase the risk of delayed or denied rebates and would expand reconciliation, dispute activity, and potential ADR filings. The result would be increased administrative burden, compliance risk, and cash-flow uncertainty. Thank you for considering our comments. Sincerely, Wilcox Medical Center
HRSA-2026-0001-2435Public Hospital District No. 1 of King County dba Valley Medical Center2026-04-20T04:00Z22,018 chars
Please see attached response to the RFI regarding the 340B Rebate Model Pilot Program from Public Hospital District No. 1 of King County dba Valley Medical Center April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA 202603042) Dear Administrator Engels: Public Hospital District #1 of King County dba Valley Medical Center, located in Renton, WA, which participates in 340B as a covered entity (CE), provides these comments on the Health Resources and Services Administrations (HRSAs) Request for Information (RFI) gathering input on the use of backend rebates to replace upfront 340B discounts. We understand that HRSA is considering developing a rebate model to effectuate 340B ceiling prices for 25 drugs10 subject to Medicare Part D negotiated prices in 2026 and 15 beginning in 2027. Valley Medical Center strongly opposes any shift to a rebate-based model and urges HRSA to maintain the upfront discount structure that has governed 340B for more than 30 years. Our hospital has reasonably relied on receiving 340B pricing through upfront discounts. For decades, the program has operated successfully on this basis, not post-sale rebates; and only recently has HRSA suggested a change which unfortunately appears to be at the encouragement and support of drug manufacturers without input from CEs. Valley Medical Center could not have anticipated HRSA would abruptly consider replacing a longstanding and effective discount system with a rebate approach that would increase costs and administrative burdens for the very providers that Congress intended to benefit from 340B. Our 340B programincluding our process for managing 340B and non-340B drug inventory, the data we share with our third-party vendors, and the resources we have available to support patient care is built around upfront discounts. Moving to a rebate model would disrupt well-established reliance interests grounded in decades of consistent implementation of 340B through upfront discounts. Respectfully, HRSAs assumption that a rebate modeleven one designed with safeguardscould cause only a minimal impact on 340B covered entities is incorrect. A rebate model would impose onerous administrative requirements and costs on covered entities, diverting critical resources from patient care - outcomes that conflict with the program's statutory intent. HRSAs continued consideration of a rebate approach for 340B is deeply concerning and even more so that HRSA is considering putting forth a broader rebate model than the one in HRSAs withdrawn rebate pilot notice. We nonetheless appreciate the opportunity to provide input through this RFI to document the significant costs and harm a rebate model would create for our hospital and the patients we serve. 340B hospitals are a vital health care resource for low-income and underserved populations, especially those that are uninsured or covered by public insurance, which typically pay less than the cost of care. Accordingly, 340B was established to reduce operating costs for participating providers so they can stretch limited resources to maintain and improve care for patients. We disagree with HRSA that rebates would improve 340B program integrity and are needed to ensure deduplication under the Medicare Drug Price Negotiation Program (MDPNP). HRSA already conducts routine audits of covered entities that show minimal compliance issues, and manufacturers have not demonstrated systemic integrity issues in 340B, despite the existing HRSA requirement that CEs work in good faith to resolve manufacturer concerns, and an audit pathway if concerns are not resolved. Nevertheless, there are significantly less burdensome alternatives to rebates that we urge HRSA to implement. The Department of Health & Human Services (HHS) should require state Medicaid agencies to adopt Oregon Medicaids process of preventing Medicaid duplicate discounts by collecting CE data retrospectively, allowing the agency to exclude 340B claims from rebate requests. A similar process at the federal level should be used to address MDPNP nonduplication. We believe it is disingenuous to systematically overhaul the upfront discount structure that has governed 340B for more than 30 years based on manufacturers unfounded claims of rampant duplicate discounts in the program; an overhaul of this magnitude should be done through appropriate congressional legislation. Pharmaceutical companies want to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements that ensure the manufacturers beneficial treatment under the pharmacy benefit managers (PBMs) formulary. This purpose has nothing to do with 340B program integrity and CEs should not have to finance this goal. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. At a minimum, manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. Program integrity is at the center of Valley Medical Centers 340B program which employs a team of experienced 340B analysts that review data transmitted to third-party vendors daily to ensure accuracy including Medicaid duplicate discounts. Target audits are conducted monthly for 340B claims and random audits are conducted quarterly to ensure ongoing program compliance. On an annual basis, there are more than 2 million drug transactions that occur at our institution. The 340B team is deeply engaged involved in pharmacy-related claims billing, with oversight of high dollar and high quantity queues, assistance with patient assistance programs, electronic medical record medication list management in addition to duties noted above related to ongoing audits. The intent of having the 340B team involved in many aspects of pharmacy operations is because of the direct tie to 340B charging and impact on 340B accumulations. This provides an extremely high-level of oversight for compliance within the program. A Rebate Model Would Require 340B Hospitals to Make Upfront Purchases at Higher Prices and Divert Resources from Patient Care to Profitable Drug Manufacturers We understand that HRSAs new rebate policy would cover 25 drugs, 15 more than the version announced in 2025. This means there would be even more drugs that we would have to purchase at significantly higher prices than the 340B price in most cases, maintain the drugs in inventory until dispensed (which could take weeks or months), and then submit data, and wait to receive a rebate representing the difference between the higher price and the 340B price. Even if rebates are paid within 10 days, we would still be forced to provide interest-free loans to drugmakers during the pre-dispense period until a rebate is received well after the drug is dispensed, tying up critical resources that would otherwise be used to support patient care and that our hospital expected would be available for that purpose due to 340Bs long history as an upfront discount program. The increased cost to our organization to purchase the 10 drugs subject to Medicare Part D negotiated prices for 2026 at the wholesale acquisition cost (WAC) as required by the initial rebate pilot is $5.7 million dollars; the additional 15 drugs starting in 2027 will increase that total amount of up front spend to $8 million. This is increasingly challenging at our outpatient pharmacies where operating margins are already razor thin and only worsened by the MDPNP. While we fully support reducing the cost of drugs to our patients, a significant oversight of the MDPNP is pharmacies are reimbursed by Medicare Part D plans at the Maximum Fair Price (MFP) which is essentially at cost to the pharmacy, if it ultimately receives the rebate. The impact to our outpatient pharmacies gross revenue due to reduced reimbursement under the program is a loss of $2.84 million dollars for 2026, increasing to a loss of $4.2 million in 2027. Since the inception of MDPNP in January 2026, we receive an average dispensing fee of $0.75 for each MFP prescription. By eliminating any modest margin our pharmacy used to receive from these Medicare Part D dispenses and requiring us to purchase these drugs at a substantial increased upfront cost (regardless of who they will be dispensed to), significantly increasing our inventory carrying cost, and having to wait for a rebate, which on average is significantly longer than 10 days, it is very difficult to maintain financial viability. The proposed rebate program removes vital operating cash from our organization and gives it to pharmaceutical manufacturers while they determine the merits of whether to issue a rebate. This results in our organization having fewer funds available for charity care at the time of dispensing and having to make difficult decisions on how we fund other programs that assist our most vulnerable patients, as such we strongly oppose this rebate proposal. Additionally, it reduces our organizations overall days cash on hand which is vital to our operational capacity and viability as a critical safety net hospital in our region. An additional unanticipated and detrimental impact of the rebate program is that our organization currently receives prompt pay discounts when purchasing drugs through wholesalers. To maintain those discounts, even if we received rebates within 10 days of data submission, we would have to pay the manufacturers high price before receiving rebates, reducing our cash flow. Alternatively, we could forgo early payment discounts to preserve cash flow, but doing so would cost our organization an estimated $375,000 annually. This impact disrupts decades of business practices built around 340B upfront discounts. A Rebate Model Would Increase Costs for 340B Hospitals and Reduce Resources Available for Patient Care Valley Medical Center has always relied on upfront discounts and never accessed 340B pricing through rebates, making the full scope of rebate-related costs impossible to quantify prior to implementation. Our estimated rebate program costs are informed by our experiences with HRSAs withdrawn rebate pilot and our experience submitting data through 340B ESP related to contract pharmacy claims. We received confusing and inconsistent information from the manufacturers rebate pilot vendor which increased our costs of trying to develop IT solutions to submit the required claims data. These issues remained unresolved until HRSA paused the pilot just days before its scheduled launch. If manufacturers continue to be able to define the data fields required for rebates, the resulting uncertainty will impose significant and ongoing implementation burdens on hospitals. The assertion that the data being required should not increase the burden to covered entities as this data is already available is misguided and misrepresented. It is one thing for an electronic health record to have data available within the system, it is another thing to extract that data in a format required by the manufacturers rebate vendor 340B ESP. The construct of these specific data files is front-end heavy with respect to build, has required several iterative revisions to be accepted by 340B ESP, and will necessitate ongoing file maintenance requiring daily review to ensure proper data submission. Valley Medical Center estimates the cost of this upfront work to be nearly $150,000 including both internal IT resources and third party platforms; with at least another $25,000-$30,000 annually in ongoing costs to maintain these files for submission. Valley Medical Centers experience with manufacturer data submission platforms (e.g., 340B ESP) has been rife with costly challenges, such as addressing errors, inconsistencies, and opaque requirements, with access to 340B pricing often delayed or denied despite compliance with the manufacturers policies. Weve had to dedicate staff hours just to address these issues. With rebates applying across all hospital settings, not just contract pharmacy, the administrative burden and financial risk would increase greatly. Most recently, as it relates to the planned rebate pilot, Beacons MFP platform has presented several challenges to efficiently performing claim management including the inability of the platform to readily identify whether a claim was 340B or not. Since the implementation of the first 10 drugs under the MDPNP in January 2026, we have experienced numerous delays in receiving MFP rebates due in large part to inaccurate data from Beacons MFP platform being transmitted to the MTF platform. Much of this inaccurate data appears to be unsubstantiated assertions by manufacturers that a claim was processed using 340B drug and as such an MFP rebate should not be paid. Since January 2026, our organization has responded to more than 65 good faith inquiries (GFIs), all resulting in acceptance by the manufacturers. These GFIs are not without expense to our organization; the cost to respond to a single GFI ranges from $50 to $300 as each requires claims mapping, invoice retrieval, and back and forth communications. There are also the indirect costs of responding to these GFIs, this is time spent by analysts redirected from 340B program integrity work to manage GFIs. Despite the 340B rebate model not being implemented, our organization is experiencing significant delays with MTF refunds well beyond the proposed 10-14 days that were conveyed under the pilot program. Currently, we have claims that are 60 days and still listed in processing status. Its evident the functionality that is required between the platforms utilized in the MDPNP and proposed rebate pilot are inadequate to provide timely rebates and lack communication to resolve delayed rebates. These are our experiences with just the first 10 drugs in the MDPNP, with an additional 15 drugs being included in January 2027, and the likelihood HRSA will proceed with a 340B rebate pilot regardless of the information from this RFI, we remain very concerned with the lack of transparency and expediency in resolving these issues. An additional concern we have with respect to rebate delays, are those related to drugs administered to patients in outpatient locations of the hospital. Standard hospital operations do not allow for immediate submission of claims data for physician-administered drugs, which hospitals maintain separately from pharmacy claims due to different filling requirements and which may not be available for weeks or longer after the drug is administered to a patient due to how the bills are created by the hospital in accordance with billing rules. For example, a patient receiving ongoing infusion therapy may have a sequence of recurring visits over a period of time that are bundled together and billed periodically on a single institutional claim form, often referred to as a series claim; these types of claims are common and often billed several weeks to months after the initiation of care. As such, a basic understanding of hospital pharmacy operations would identify the incorrect assumptions that have been made related to the timing of pharmacys acquisition of a drug, claims submission, and the availability of a rebate in this setting. Pharmacies that serve outpatient locations of the hospital must carry an adequate inventory of drugs to serve patients. The inventory on hand is purchased in advance of a patient encounter and may remain in inventory for days to several weeks prior to administration, as such, pharmacies will have a significant increase in inventory carrying cost when losing upfront 340B discounts. This coupled with outpatient billing practices for physician-administered drugs will significantly delay the availability of a rebate for a given drug, even if manufacturers are required to pay rebates within 10 days, these claims are often not available for several weeks or longer. Despite assertions by HRSA and manufacturers that the required claims data will be minimally impactful because a CE is already providing that to third-party administrators to qualify 340B claims or to manufacturers to access 340B pricing is an incorrect assumption. The data fields required by a TPA for managing a 340B program that utilizes the current upfront discount at purchasing to manage a 340B virtual inventory for a CE are different than those required under HRSAs first rebate pilot. These differences include claim ID, claim line number, claim modifiers, health plan ID as well as service provider NPI. Additionally, the retrospective qualification of a 340B dispense in a virtual model allows for standardization of data capture across the organization and the criteria used by our TPAs to assess 340B eligibility upon administration with an associated charge is far less than the data fields required for medical claims for the MDPNP. An additional negative consequence of removing the upfront discount is how Medicaid claims must be processed and the additional administrative cost required to individually audit every Medicaid claim. As a CE that carves-in 340B claims for Medicaid in WA state, we are required to pass along the actual acquisition cost of the drug to the state Medicaid agency at the point of sale for retail pharmacy claims. In a rebate model, the acquisition cost of the drug is WAC. However, our state Medicaid agency has informed CEs that we must continue to pass along the 340B acquisition cost of the drug if it is a 340B eligible dispense. This raises a few concerns for Valley Medical Centers outpatient pharmacies; first is that the 340B price will need to be confirmed at each dispense as our acquisition cost is WAC, second, if a manufacturer denies a rebate, our organization is left with a financial loss on that dispense In addition to the numerous challenges outlined previously, we also have had to engage our finance team to assist with tracking MTF refunds, attempting to reconcile them at the claim level with insufficient data, and managing balances related to invalid refunds for claims processed for correction. Valley Medical Center anticipated additional staff hours and resources would be needed to address IRA/MFP requirements, as well as the proposed 340B rebate pilot, however, we did not anticipate the significant challenges we have encountered with the data submission platforms. In addition to reallocation of an existing full time employee, our organization has hired an additional analyst specifically to manage these new processes under the MTF and proposed rebate pilot. We estimate the financial impact to our organization to provide management of the MDPNP and proposed rebate pilot to exceed $350,000 to date. Rebate costs will reduce resources available for patient care. Some of the negative impacts we foresee include less cash on hand for charity care, potential reduction of discounted and/or free drugs at any of our pharmacy locations, as well as a negative impact to community benefits and free services we support. HRSA Should Prohibit All Rebate Denials If HRSA goes forward with developing a rebate program against our recommendation, we urge HRSA to prohibit manufacturers from denying any rebates for 340B hospitals. It would be helpful for HRSA to explicitly ban manufacturers from denials pertaining to alleged Medicaid duplicate discounts and diversion, though we would remain concerned if manufacturers could deny claims for other reasons. Prohibiting denials would help reduce a source of administrative burden and cost for safety-net providers under a rebate model that is expected to stem from having to interface with the manufacturers vendor that would administer approved rebate models. Manufacturers would still receive claims data they allege they need for program integrity purposes and can audit as is their right under the 340B statute. If HRSA is going to permit denials, HRSA should require manufacturers to provide specific details so that we have sufficient information to address the denial. Valley Medical Center is significantly concerned regarding HRSAs requirement to use a rebate platform designed specifically for manufacturers, and by a company that has conducted studies funded by the Pharmaceutical Research and Manufacturers of America (PhRMA), as well as other individual pharmaceutical companies. To participate in HRSAs proposed rebate program, CEs are required to agree to Beacons mandatory and non-negotiable terms and conditions that contain several concerning provisions including broad date-sharing rights, perpetual and irrevocable data rights, limited liability and no recourse for CEs. Given this obvious conflict of interest, we believe it is in the best interest of the 340B program to engage a neutral third party if HRSA decides to proceed with its rebate program. If HRSA is insistent on utilizing Beacon, it should significantly restrict the terms and conditions used for the rebate platform strictly to the purpose of the rebate program and forbid any data sharing. A Rebate Model Is Not Necessary for MDPNP Deduplication Any issues with the MDPNP process can and should be addressed by CMS through targeted improvements rather than a disruptive overhaul of 340B by implementing a rebate model. Thank you for considering our comments. Sincerely, Kenneth Kenyon, PharmD VP Pharmacy Services Public Hospital District #1 of King County dba Valley Medical Center
HRSA-2026-0001-2436Virginia Garcia Memorial Health Center2026-04-20T04:00Z116,030 chars
See attached file(s) April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Virginia Garcia Memorial Health Center, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has allowed our organization to conduct a comprehensive operational and financial analysis of the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report losses from entity-owned pharmacy operations and reduced savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data shows that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. 2 By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Virginia Garcia Memorial Health Center in particular, this impact would include: Our ability to serve over 50,000 patients annually 291,989 prescriptions filled annually at our entity-owned pharmacies An increase in administrative costs, currently totaling $6,616,197.03 A direct strain on our programs funded through 340B savings, including prescription assistance, public health outreach, youth development, school-based care, and clinical pharmacy We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. When the rebate model was last proposed, CHCs were actively preparing their patients for these disruptions through in-pharmacy educational materials and prescription bag stuffers, a signal that the operational and human impact of this change is both imminent and significant. For patients who have spent years achieving stability on a given medication regimen, the prospect of disruption is a threat to their health, safety, and trust in the health care system. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 3 embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 6 2025 UDA Data, HRSA (hrsa.gov) 4 access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Beyond the direct impact on individual patients, the rebate model threatens the broader infrastructure that makes affordable, comprehensive care possible at CHCs. The administrative burden of navigating the new rebate structure, including onboarding staff, conducting provider and patient education, and implementing new protocols, diverts limited staff resources away from direct patient care, disrupts established pharmacy workflows, and risks delays in reimbursement that undermine medication continuity. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar that is no longer available for wraparound services and the full spectrum of care that make a meaningful difference in patients lives. This diversion of time and resources is not a minor inconvenience; it is a structural undermining of the care model that CHCs depend on to serve their communities. If implemented without meaningful safeguards, this model will force CHCs to make impossible choices: cutting programs, limiting operating hours, and fundamentally compromising the mission of a program designed to expand access to care for those who need it most. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. To address manufacturers concerns about duplicate discounts, the Pilot Program would force CHCs to divert even more scarce resources away from patient care. CHCs have already absorbed high administrative and technology costs over the past five and a half years to comply with manufacturers existing contract pharmacy restrictions by submitting data to 340B ESP. Rather than serving as a solution, the pilot program would be a new barrier, further limiting the availability of affordable medications for patients with chronic conditions. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. We urge HRSA to consider the high up-front and ongoing costs of compliance with a potential 340B Rebate Model, which will ultimately impact the most underserved patients nationwide. A. Detailed Administrative/Operational Impact 5 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: In 2025, Virginia Garcia provided 23,143 sliding fee discounts in discounted medications. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Virginia Garcia anticipates needing at least 1.0 additional full-time equivalent (FTE) to manage the increased regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Virginia Garcia anticipates an increase of $ 90,989 needed for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Below are specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. Workforce Impact According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. An estimated 2080 hours (1 FTE) will be required to report and reconcile 340B rebate claims to a third-party platform, assuming alignment with all nine drug manufacturers 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 plans. This represents a significant redirection of workforce capacity away from direct patient care The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Virginia Garcia urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 50,000 patients, the total projected increase in expensesincluding labor, IT, and carrying costsis estimated at $200,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 37 contract pharmacy sites that expand access to affordable medications across our service area. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 37 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Washington County and Yamhill County with no affordable medication options. Over 17 percent of the U.S. population 7 lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. B. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 8 wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on a CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.11 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.12 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. At Virginia Garcia, our sliding fee scale discounts are especially critical for low-income patients in rural communities, where both pharmacy access and medication affordability are limited. CHCs rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy Software systems are not designed to incorporate manually added price files, particularly into a single inventory category. Current pharmacy systems continuously overwrite manually entered 340B prices with every wholesaler price load. Under a rebate model, the wholesaler price file reflects WAC rather than the 340B ceiling price, eliminating the operational ability to determine an accurate discounted patient price at the pharmacy counter. This disconnect forces CHCs to estimate discounts without knowing whether or when a rebate will be paid, exposing them to financial loss if a rebate is denied or delayed and undermining federally required sliding fee discount obligations. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).13 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current 11 HRSA FAQ 12 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 13https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with their consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B14 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.15 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. 14 https://340bpricing.hrsa.gov/ 15 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 Based on our organizations data, we estimate it would cost $5,978,632.68 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $372,440.26 to purchase these same drugs at the 340B ceiling price. This represents a significant 1,500% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Virginia Garcia anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services that are core to our mission, including: o Prescription assistance programs o Clinical pharmacy services supporting chronic disease management o School-based health programs o Community-based public health outreach initiatives Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to invest in direct patient-facing roles such as community health workers, behavioral health providers, or clinical pharmacists, roles that directly improve patient outcomes. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our uninsured patients from rationing their insulin or heart medication. C. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Virginia Garcia asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resources by diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Another complication is that the rebate amount may not match the initial discount offered to the patient, as mentioned above, creating unpredictable financial losses. CHCs must estimate the 11 rebate amount and could potentially undercharge or overcharge patients due to confusion. The shift to WAC pricing disrupts the fundamental mechanics of our pharmacy procurement. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Virginia Garcia estimates its 2027 Annual Rebate Opportunity Cost to be approximately $1,218,698.46. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Rising Costs: Virginia Garcia estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront annual drug spend by $5,606,192.42 in 2026 The following year, our upfront annual drug spend is projected to increase to $7,776,233.66. By 2028, our drug spend would increase to over $9 million. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to scale back on critical programs that have a significant impact to the generational wellbeing of our community. This is not a sustainable financial dynamic, where resources currently dedicated to patient care would instead be tied up in delayed reimbursement systems. The interest costs alone could instead be diverted to school-based health programs that help our youth. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Virginia Garcia as a primary safety-net provider, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys access. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 52 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Virginia Garcia urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without 12 providing the data or documentation CHCs need to understand or contest those decisions.16 The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 15% denial rate would result in a net annual loss of $855,845.97 in 2026. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss. Any delay beyond the 10- day window creates an immediate cash flow crisis. CHCs are particularly worried that the need to purchase drugs at full WAC will cause them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. There is currently no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges Operational Guardrails and Enforcement Framework Taken together, the administrative burden, cashflow exposure, reconciliation complexity, and denial risk associated with a rebate model fundamentally conflict with CHCs operational realities. Without robust guardrails, neutral infrastructure, and enforceable manufacturer accountability, a rebate model would undermine, not strengthen, the integrity of the 340B Program and threaten patient access to essential medications. 16 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 13 If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. A rebate model that relies on retrospective payment and manufacturer discretion without firm controls will inevitably result in delayed reimbursement, inconsistent determinations, and increased denials, placing safetynet providers in untenable financial positions. We request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claimlevel documentation, a specific and permissible basis for denial tied directly to statutory requirements. Within the current MFP models used by manufacturers and their vendor Beacon Channel Management, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. If the manufacturer of their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid, and the manufacturers must revert to the processes described in HRSA 1996 Manufacturer Audit Guidelines, including conducting good faith inquiries and OPA-approved audits.17 The previously proposed rebate construct and the one currently used by manufacturers for MFP de-duplication incentivize rebate denials by imposing a significant, ongoing burden of chasing denied rebates. The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery and fails to align with the 340B program's intent to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.18 Rebate payment timing requirements must apply to both initial and corrected determinations. Experience with existing manufacturerrun MFP deduplication processes demonstrates that, even when a covered entity successfully contests a denial, payment is often delayed for indeterminate periods. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety-net providers it was created to support. We respectfully request that OPA provide a detailed plan to ensure rebates are paid, given the thin financial margins CHCs operate on and the detrimental impact of ongoing delayed payments has on patient care. 17 Manufacturer Audit Guidelines https://www.hrsa.gov/sites/default/files/hrsa/opa/dispute-resolution-process-12-12-96.pdf 18 340B House Report Legislative History. H.R. REP. 102-384(II). 14 Additionally, the Administrative Dispute Resolution (ADR) cannot serve as the primary mechanism for routine rebate disputes; we request that HRSA establish a separate dispute resolution pathway. Current ADR timelines are reported to take up to a year from the time of a review panel assignment. Given the time to complete the review and up to 180 days to return a determination,19 CHCs could be waiting up to 2 years for their issues to be resolved. Given the sheer volume of prescriptions and clinic-administered drugs slated to flow through the rebate program, the current ADR process does not provide a viable solution to address covered entities rebate disputes with manufacturers. HRSA must establish a separate, expedited dispute pathway for rebate denials, with defined timelines, escalation protocols, and agency oversight. HRSA must clearly articulate the resources, authorities, and enforcement mechanisms it will use to ensure manufacturer compliance, including corrective action requirements and potential sanctions for repeated late payments or improper denials. Additionally, we recommend that OPA establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Without explicit enforcement, a rebate pilot risks becoming a system of manufacturer selfpolicing, contrary to HRSAs statutory responsibility to administer and oversee the 340B Program. A. Operational and Enforcement Guardrails HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. These guardrails should include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Firm payment timelines that apply to both initial and corrected determinations; and A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers. B. Enforcement Requirements Resources: HRSA should identify the internal resources and systems it will use to actively monitor manufacturer compliance, including the ability to track payment timeliness, denial rates by category, and dispute outcomes. Covered entities should not be required to police manufacturers behavior through repeated appeals to manufacturers or the administrative dispute resolution process. Dispute Resolution: There must be a formal procedure for when a CHCs data (e.g., from their pharmacy software or 340B accumulators) does not align with the manufacturers accumulation logic. Based on experience with data submissions to 340B ESP, the 19 Administrative Dispute Resolution Regulation, https://www.govinfo.gov/content/pkg/FR-2024-04-19/pdf/2024-08262.pdf 15 manufacturers, through their vendor, are starting with initial purchase data and calculating accumulations based on future dispensations, factoring in unpublished reasonable use timeframes. Virtual inventories operate on eligible 340B dispensations that must reach full package size before purchases are made. Because the logic used by manufacturers and covered entities differs, they can misalign even when the entity is fully compliant with the 340B program requirements. Currently, when this misalignment occurs, manufacturers block an entitys ability to purchase at 340B prices until the entity meets the manufacturers unpublished standards. C. Burden of Proof on Manufacturers Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or IRA statutes and ultimately undermines program integrity. D. Rebate Determinations Must Align with Statutory Patient Definition Any rebate model must preserve the statutory allocation of responsibility for patient eligibility determinations. The 340B statute assigns patient definition and eligibility determinations to covered entities.20 Systems or methodologies that effectively transfer this determination to manufacturers, whether through retrospective algorithms, proxy indicators, or undisclosed purchasehistory logic, exceed statutory authority and introduce nontransparent conditions on access to 340B pricing. HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. Transparency Measures Fully Transparent Manufacturer Decision Processes We appreciate HRSAs commitment to transparency in the 340B Program. Since 2020, manufacturers have imposed several self-declared 340B transparency measures as pricing conditions on covered entities. Unfortunately, while this has increased manufacturers visibility, it has significantly reduced transparency for CHCs. Under the current manufacturer conditions imposed through 340B ESP and the handling of 340B claims for MDPNP, which are in the confidential portion of the manufacturer's effectuation plan, CHCs are subject to an unpublished standard as a condition of 340B pricing, with very limited portions of the determination process shared with CHCs. One example is within MFP effectuation: the manufacturers vendor, Second Sight Solutions, has published a list of pricing codes21 to be utilized to understand the validations performed following the successful transmission of MFP claims data to Beacon MFP. Three of the MFP determination methodologies in the table below highlight this issue. For the recent 340B purchase and aggregate 340B purchase history of the Dispensing Entity scenarios, neither manufacturers nor Beacon has provided clarity on how these are defined or calculated. This leaves CHCs without a 20 Section 340B of the Public Health Service Act, https://www.hrsa.gov/sites/default/files/hrsa/rural-health/phs-act-section- 340b.pdf 21 https://mfp.support.beaconchannelmanagement.com/en/articles/13335320-validation-codes-and-pricing-codes-glossary 16 mechanism to validate manufacturers determinations. We request that all determination processes, eligibility calculations, and any other items involved in the determination process be published in detail for all covered entities. Code Description Type Definition P1 340B Claim Indicator Pricing Claim included a 340B modifier. P2 340B Claim Pricing Claim submitted by the entity as 340B. P3 340B Pharmacy Pricing Claim from a pharmacy with evidence of a recent 340B purchase. P4 340B Prescriber Pricing Prescription written by a 340B prescriber and dispensed by a pharmacy with evidence of a recent 340B purchase. P5 Contract Price Pricing Basis price is a Contract Price. P7 Non SDRA MFR Reprice Pricing Value other than WAC used to determine MFP refund amount. P8 Entity Identified 340B Pricing Claim manually identified as 340B in Beacon by Dispensing Entity. P9 340B Pharmacy Allocation Pricing Claim identified as 340B according to the aggregate 340B purchase history of the Dispensing Entity. V. Limit the 340B Rebate Model Pilot to Retail Pharmacy Claims Only If HRSA moves ahead with a rebate model, we request that the 340B rebate model pilot be limited to retail pharmacy claims only. Limiting the pilot to retail pharmacy claims is not merely a matter of operational convenience; it is essential to prevent unnecessary disruption in areas where no current duplicate discount risk exists. Extending a rebate model to clinicadministered drugs (CADs), where CHCs claims are adjudicated under PPS and not at the drug level, and Medicare negotiated prices do not apply until future years, would impose extraordinary administrative burdens without advancing the stated deduplication goals of the pilot. As HRSA has already stated, there are mechanisms in place to prevent Medicaid duplicate discounts.22 Therefore, a measured, retailonly approach is the minimum safeguard for an untested model. CHCs generally operate under the PPS and do not bill CADs as discrete, lineitem drug claims. Instead, the cost of these drugs is embedded within encounterbased reimbursement. As a result, CHCs do not maintain electronic, claimlevel billing records for CADs that could be readily repurposed for rebate submission or reconciliation. Implementing a rebatebased framework for CADs would require the creation of entirely new data capture, reporting, and reconciliation workflows, rather than incremental modifications to existing systems. In addition, auditable records for CADs are frequently maintained in paper logs or other nonstandard internal documentation, rather than in structured electronic data fields. These recordkeeping practices are designed to support internal controls and HRSA audit requirements, not retrospective rebate processing. A rebate model that requires structured electronic submission to a rebate platform would compel CHCs to convert paperbased records into discrete electronic datasets and maintain parallel documentation systems solely for rebate compliance. This would substantially increase administrative burden and compliance risk without improving program integrity. 22 https://public-inspection.federalregister.gov/2025-14619.pdf?1753965918 17 Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.23 CHCs would need to deploy tracking functionality either within their electronic medical record systems or through standalone software, incur ongoing licensing and maintenance costs, and redesign clinical and administrative workflows. These costs would be additive and ongoing, not one time, and would be incurred even though CADs are not currently billed to Medicare Parts B or D. Furthermore, Medicare Part B negotiated pricing provisions applicable to certain drugs do not take effect until 2028, underscoring the lack of nearterm applicability. Because CADs furnished by CHCs are not billed as discrete Medicare drug claims, there is no current Medicare duplicate discount risk associated with these drugs that would justify imposing a rebatebased reporting and reconciliation framework at this time. To the extent the policy objective relates to the implementation of Medicare drug pricing reforms under the IRA, CADs furnished by CHCs do not currently raise those concerns. Moreover, where manufacturers have concerns about diversion or compliance for CADs, existing statutory mechanisms already include HRSA audits and the ADR process. These tools are specifically designed to address compliance concerns within the 340B Program. Layering a rebate model on top of these established statutory mechanismsparticularly in a context where no discrete billing or nearterm Medicare interaction existswould be duplicative and unnecessary. For these reasons, HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. VI. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs must also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs pride themselves on maintaining compliance with both the Health Center Program requirements and the 340B program, and they adhere to rigorous oversight and compliance processes. Not only do they participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such 23 Internal NACHC survey data 18 as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. CHCs are required to provide sliding fee discounts to patients at or below 200% of the federal poverty level. Currently, CHCs routinely provide discounts to uninsured and underinsured patients, but a rebate model would make this operationally impossible because they rely on wholesale price files to determine the acquisition cost of the drug to calculate a discounted price. In a rebate model, the price file lists the WAC price, making the price unattainable for the patient. If CHCs are included in this pilot, it will be extremely difficult to offer the included medications at a discount. For these reasons, we encourage HRSA to exempt all CHCs from this pilot program. This model does not shift administrative burden; it shifts financial risk from manufacturers to safety-net providers, fundamentally altering the intent of the 340B program. VII. The 340B Rebate Models Incompatibility with Deduplication Efforts A. Medicare Inflation Reduction Act (IRA) Deduplication While we understand that manufacturers investment in a mechanism to deduplicate Medicare IRA maximum fair price (MFP) and the 340B price from the same unit of drug, we are deeply concerned that the previously proposed approach for addressing IRA deduplicationa 340B rebate modelwould create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is not only unnecessary to achieve the goal of deduplication, but also the option that would place the greatest burden on CHCs. Any change in government policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders,24 and a 340B rebate model is not that. Several less burdensome alternatives are available for HHS consideration. As further discussed below, CMS could implement Medicare-only claims data submission to a government vendor or neutral clearinghouse without also requiring an upfront purchase of 340B-priced drugs at WAC prices (i.e., a rebate) or without the requirement to submit commercial claims data, a process CMS is already exploring for purposes of Medicare IRA rebate deduplication through the 340B claims repository finalized as a voluntary model in the CY 2026 Medicare Physician Fee 24 5 U.S.C. 500596; Food & Drug Admin., Least Burdensome Provisions: Concept and Principles (n.d.), https://www.fda.gov/regulatory-information/search-fda-guidance-documents/least-burdensome-provisions-concept-and-principles (last visited Mar. 13, 2026); H.R. REP. 102-384(II)). 19 Schedule.25 This intention was made clear in the CY 2026 Physician Fee Schedule Final Rule: CMS proposed that it would address the possibility of mandatory reporting of data elements to the 340B repository by covered entities in future rulemaking. CMS noted that many covered entities are providers and suppliers regulated by CMS under Title XVIII of the Act, including hospitals receiving DSH payments, CAHs, and FQHCs. CMS noted that it was actively considering options for mandatory reporting to the 340B repository in the near future and recommended that covered entities take advantage of the testing period to prepare for future policy development related to 340B repository reporting.26 If both a 340B rebate model and a 340B claims repository are made mandatory, CHCs will be subject to two new administrative burdens that accomplish nearly identical goals: identifying 340B claims for purposes of the IRA. Many alternative options exist for deduplicating 340B and MFP, and whichever deduplication mechanism is ultimately selected should be the least burdensome that accomplishes the deduplication goal. The 340B Legislative History demonstrates the 340B Statue was written with this intention stating, even going so far as to call out that what will work for an AIDS Drug Assistance Programs (ADAPs) the manufacturer cited example of 340B rebates being workable common practice may not be appropriate for CHCs: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as CHCs, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.27 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. A 340B rebate model not only contradicts principles of good governance but would also directly contradict congressional intent for the 340B Program and the IRA. When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety-net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, is extra-statutory and appears to be punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. A 340B rebate model also fails to align with the IRAs intent. Under the IRA, the manufacturer must provide the lower of the two prices340B or MFPto a covered entity. Under a 340B rebate model, however, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the IRA and imposes a punitive condition on the safety-net provider that it purchase the drug at the highest market price. 25 Medicare and Medicaid Programs; Calendar Year 2026 Payment Policies Under the Physician Fee Schedule, 90 Fed. Reg. 49,266 (2025). 26 CY 2026 PFS, Final Rule, https://www.govinfo.gov/content/pkg/FR-2025-11-05/pdf/2025-19787.pdf 27 H.R. REP. 102-384(II) 20 Moreover, we believe that any government-mandated rebate model for 340B-priced drugs that serves to deduplicate MFP from 340B pricing is inconsistent with HRSAs stated authority. The 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph. Specifically, the 340B statute states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).28 That clause, however, cannot be read in a vacuum. From this clause, HHS has contended that it may authorize manufacturer 340B rebate models. However, HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is confined by the 340B statutes bounds. And such bounds do not include protections against or prevention of duplicate discounting of Medicare claims where 340B pricing and MFP are at issue. Rather, the 340B statute limits the bounds of HRSAs authority, including its alleged rebate authorization authority, to the limitations of the 340B statute, which only provides protections against Medicaid fee-for-service (FFS) duplicate discounts. Accordingly, HRSAs rebate authority under the 340B statute cannot be extended to deduplication of MFP and 340B drug claims. Such an extension would be an ultra vires application of HRSAs alleged rebate authority. Likewise, the IRA does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B statutory ceiling price. That statute merely states that a drugmaker must make available the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price the maximum price that covered entities may permissibly be required to pay for the drug.29 The only rebate mechanism HHS has contended is available to it is found under Section 340B, and, as stated above, Section 340B does not pertain to Medicare claims. Accordingly, HRSAs alleged rebate authority cannot be used as a deduplication tool under the IRA, and drugmakers are not permitted under the IRA or 340B statutes to charge upfront WAC prices for 340B drugs under at least the IRA because the IRA does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. B. Medicaid Duplicate Discounts The 340B rebate pilot is not a legal mechanism for addressing Medicaid FFS duplicate discounts. As stated above, the 340B statute not the IRA cursorily mentions the term rebate in a parenthetical in the first paragraph of that statute. Specifically, it states that the Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary).30 That clause cannot be read in a vacuum. HRSAs authority over the 340B statute, including its alleged ability to implement a 340B rebate model, is limited by the 340B and Medicaid Drug Rebate Program (MDRP) statutes bounds. 28 42 U.S.C. 256b(a)(1) 29 Id. 30 42 U.S.C. 256b(a)(1) 21 The 340B statute only protects drugmakers from Medicaid duplicate discounts. The 340B statutes clause addressing the obligation to prevent duplicate discounts applies only to such discounts under Medicaid FFS plans. That provision states that a covered entity not HHS and not a drug manufacturer shall prevent 340B duplicate discounts in the first instance. Specifically, that provision states that a covered entity[, not HHS or a drugmaker,] shall not request payment under the Medicaid FFS program for a 340B-priced drug.31 Accordingly, only the covered entity may elect whether to bill a 340B drug to Medicaid and how it satisfies its obligation to prevent Medicaid FFS duplicate discounts under the plain language of the 340B statute. The state Medicaid agency may set the state-based requirements for 340B claim identification.32 HRSA and drugmakers may only audit such Medicaid claims after such covered entity election has been made meaning their authority to deduplicate such claims only vests after the 340B drug has already been billed to the Medicaid state plan. Specifically, the 340B statutes audit provision states that a covered entity shall permit the Secretary and the manufacturer . . . to audit . . . the records of the entity that directly pertain to the entitys compliance with the duplicate discount prohibition. Such records must first be generated, and thus such audit authority may reasonably be interpreted as vesting only after the covered entity has exercised its statutory discretion to prevent Medicaid FFS duplicate discounts and has billed a 340B drug claim to a state Medicaid FFS plan.33 However, the 340B statute grants neither HHS nor drugmakers authority to prevent duplicate discounts in the first instance or to requisition related 340B claims data to prevent such discounts before a covered entity elects to bill the claim under applicable state requirements. Congress knew how to furnish such discretion to drugmakers but explicitly chose to grant it to safety-net providers. Nevertheless, the 340B rebate model proposes to illegally usurp the covered entitys statutory responsibility regarding its prevention of Medicaid FFS duplicate discounts. It would illegally transfer that discretion to drugmakers by allowing them to require significantly high upfront pricing and the submission of claims data so that they, not the covered entity, may elect whether a drug is 340B or not, or whether such drug is subject to a Medicaid rebate. This proposed mechanism clearly violates the plain language of the duplicate discount prohibition. And a cursory mention of the term rebate in a parenthetical of the statutes first paragraph does not supplant that plain language.34 Accordingly, the application of a 340B rebate model is illegal under the 340B statute because it shifts the discretion to choose to bill 340B drugs to, and the obligation to prevent duplicate discounts under, Medicaid FFS plans away from the covered entity and gives drugmakers first oversight of such claims. That policy cannot be supported by the text of the 340B statute, the Medicaid Drug Rebate Statute, or their legislative records. 31 Indeed, the 340B statute states that the covered entity may choose options for billing 340B drugs to Medicaid. Specifically, it states that the HHS may develop[][more detailed guidance describing methodologies and options available to covered entities for billing covered outpatient drugs to State Medicaid agencies in a manner that avoids duplicate discounts pursuant to subsection (a)(5)(A). 42 U.S.C. 256b(d)(2)(B)(iii). And the Secretary of HHS may institute a system to ensure that the covered entity does what the statute says its obligated to do prevent duplicate discounts. Id. 32 42 U.S.C. 1396r-8(a)(5)(C)(ii) (Each such single State agency shall provide a means by which a covered entity shall indicate on any drug reimbursement claims form (or format, where electronic claims management is used) that a unit of the drug that is the subject of the form is subject to an agreement under section 256b of this title, and not submit to any manufacturer a claim for a rebate payment under subsection (b) with respect to such a drug.) 33 42 U.S.C. 256b(a)(5)(C). 34 See 42 U.S.C 256b(a)(5)(A). 22 The 340B rebate pilot disrupts CHCs ability to comply with state Medicaid billing requirements. CHCs are also concerned that the proposed rebate pilot will impose significant legal risks and operational burdens on their requirement to appropriately bill 340B drugs to Medicaid plans. Those 340B billing rules require the CHC to determine whether a drug is a 340B drug or a non-340B drug prior to submitting the drug claim with the appropriate billing requirements. However, these billing requirements are virtually impossible to comply with under the rebate pilot because the CHC does not know that a drug is 340B eligible until after the manufacturer has paid the rebate. Specifically, CHCs are required to identify and appropriately charge for 340B drugs when billing Medicaid plans. Those 340B billing requirements vary depending on whether the drug is billed: (1) to Medicaid FFS; or (2) to a Medicaid managed care plan or organization (MCO). The billing requirements vary further depending on whether the drugs are billed under a pharmacy benefit or a medical benefit for each plan type. These requirements create a complex web of billing and reimbursement policies for Medicaid FFS plans, which vary even within a single state. In Oregon, Medicaid billing already includes established safeguards to prevent duplicate discounts. For entity- owned pharmacy transactions, the state relies on HRSAs Medicaid Exclusion File, while provider-administered claims utilize UD modifiers. Additionally, 340B dispensing through contract pharmacies is prohibited under fee-for-service Medicaid in Oregon. These existing mechanisms make a rebate model duplicative and unnecessary for compliance purposes. For Medicaid FFS retail pharmacy claims, federal regulations require states to implement policies where reimbursement is based on the actual acquisition cost (AAC) of a drug, including a separate methodology for 340B drugs compared to non-340B drugs.35 Additionally, states have implemented AAC-based reimbursement for Medicaid FFS medical claims, and some Medicaid MCOs implement AAC-based reimbursement under the terms of their contracts with CHCs for drugs covered under the retail pharmacy and/or medical benefit. When 340B-based AAC is implicated, the CHC is typically required to submit the claim with certain data elements at the point of billing the claim, or the point-of-sale. These required elements are typically the Submission Clarification Code (SCC) 20, which identifies the claim as 340B, and a basis for cost determination code (BOC) 08, which provides the 340B-based AAC for Medicaid to use in determining the reimbursement amount for that claim. A 340B rebate pilot would create significant confusion and legal impossibility for covered entities because it would revoke the covered entitys ability to determine when a 340B drug is used. Specifically, the rebate pilot removes the covered entitys discretion to determine whether a drug is 340B at the point of billing a claim to a Medicaid plan. This is because the 340B rebate model illegally transfers that discretion to drugmakers by authorizing them to determine when a rebate should be paid. And thus, both state Medicaid agencies and CHCs are left confounded about how to intelligibly submit claims data for WAC-priced drugs that may or may not be subject to a 340B rebate at the drugmakers future discretion. Under a 340B rebate model, a drug is not a 340B drug until a manufacturer pays a rebate on the drug, which is long after the claim has been submitted for Medicaid reimbursement. Additionally, the 340B ceiling price is no longer an effective proxy for 340B-based AAC because additional 35 C.F.R. 447.518(a). 23 costs are incurred at the initial purchase at the higher WAC price and through added administrative costs. Under the previous 340B rebate model pilot, HRSA directed covered entities to contact individual state Medicaid agencies for 340B rebate model claim submission policies. Some states provided guidance on how they expected covered entities to bill, but not all did. Even for those states that did provide guidance, such guidance became subject to serious legal challenge and confusion. Of the states that responded, most Medicaid departments would have required covered entities to submit the 340B ceiling price when billing Medicaid if the covered entity believed it would receive a 340B rebate under the drugmakers discretion. But if the drug isnt subject to a rebate in the future, the initial 340B ceiling price claim may have been false. This creates operational, financial, and legal impediments for CHCs. Operationally, CHCs rely on wholesaler price files when submitting a drugs AAC with a Medicaid claim. In a 340B rebate model, the wholesaler price file would provide the WAC, which is the price at which the CHC must purchase the drug. Thus, the 340B price would not be made available through the wholesaler for drugs subject to the 340B rebate model. Pharmacy billing software does not allow the use of an external price file, which would force CHCs to manually insert the 340B AAC for each Medicaid claim, an operationally infeasible endeavor. Adding to the operational burden is the variation between state policies. CHCs that treat patients from different states may have to tailor operations to comply with each states Medicaid policy. Submitting an erroneous Medicaid claim exposes the CHC to significant civil and criminal liability under the False Claims Act. Accordingly, HHS has not only usurped the CHCs authority to prevent duplicate discounts, but it also confers on drugmakers the ability to induce false claims. This is a serious, unjustified, and unprecedented misstep that threatens the stability of the entire 340B program and Medicaid Programs. A 340B rebate model is unduly burdensome. HHSs designing of a rebate model does not require it to authorize drugmakers to charge the nations CHCs one of the highest possible prices to acquire a drug in the first instance. For example, a rebate model could be implemented through upfront discounts and retrospective credits or debits, a neutral clearinghouse, or a government-led clearinghouse repository.36 Some of these ideas are explored later in this letter. This way, the manufacturers rebate liability is adjusted, rather than the local CHC. Multiple states have expressed concerns that a 340B rebate model would effectively change all drugs dispensed or administered by covered entities from 340B-based AAC to WAC-based AAC, thereby increasing costs for state Medicaid agencies. This is because federal regulations define AAC as the agency's determination of the pharmacy providers actual prices paid to acquire drug products marketed or sold by specific manufacturers.37 The definition indicates that Medicaid departments may determine that AAC should be based on the wholesaler pricing files, which would be WAC-based pricing under a 340B rebate model. In submitting comments regarding HRSAs previous 340B rebate model, two states expressed serious concerns about how a 340B rebate model would negatively impact the state for this reason. Specifically, the Pennsylvania Department of Human Services stated, [i]f the AAC for drugs in 36 Ctrs. for Medicare & Medicaid Servs., IPAY 2028 Final Guidance, https://www.cms.gov/files/document/ipay-2028-final- guidance.pdf. 37 42 C.F.R. 447.502 24 the Pilot Program is the covered entitys cost before the 340B rebate, then Medicaid FFS will no longer benefit from the 340B discount and Medicaids cost for these drugs will increase.38 The Oregon Health Authority commented, [i]f Oregons FFS Medicaid program continues to reimburse covered entities at the 340B ceiling price, we will fail to meet the entitys initial cost and will contribute to cash flow problems and financial instability for the impacted safety net providers.39 Furthermore, the 340B rebate model would create legal impossibilities under Medicaid managed care for covered entities, state Medicaid agencies, and Medicaid managed care organizations. The Medicaid statute authorizes only the covered entity to select a 340B drug and bill it to a Medicaid managed care plan. Specifically, 42 U.S.C. 1396r-8(j)(1) states that a drug purchased by a covered entity under the 340B Program is no longer subject to a rebate payment under Medicaid managed care plans. Put differently, that statute grants to the covered entity, not HHS or a drugmaker, the authority to choose to use 340B drugs for Medicaid managed care beneficiaries. By mandating upfront WAC pricing and authorizing drugmakers to choose when to pay a 340B rebate, the discretion is illegally usurped in violation of federal law. Moreover, state Medicaid agencies are required by federal law to implement systems to remove 340B drug utilization data from their rebate invoices charged to drugmakers under Medicaid managed care arrangements. Specifically, 42 C.F.R. 438.3(s)(3) states that states must contract with Medicaid managed care organizations to require that they, not drugmakers or HHS, establish procedures to exclude utilization data for covered outpatient drugs that are subject to discounts under the 340B drug pricing program from the reports submitted to manufacturers for Medicaid rebate payments. Although their policies vary, most states require Medicaid managed care organizations to require covered entities to identify 340B drugs when billing for such claims. As with Medicaid FFS plans, neither the state Medicaid agency nor the CHC may comply with this federal requirement under the proposed 340B rebate model because the discretion regarding how and/or when to identify 340B drug claims under Medicaid managed care arrangements is seized from them and given to drugmakers. This is not only an irresponsible policy; it is also quite a dangerous policy, as it creates a serious impediment to submitting claims that may or may not be later deemed to be false based on a third-party drugmakers decision. Even if CHCs could operationalize a manual claims submission process, either the CHC, the state, or both would be financially burdened by a 340B rebate model. First, 340B-based AAC must account for added actual costs. A 340B rebate model effectively raises the 340B price of a drug above the 340B ceiling price, and such costs must be included in billing state Medicaid plans. This is because the CHC would have to float WAC pricing for each drug and incur additional administrative costs related to claiming a rebate, which are factored into the true actual acquisition cost of a 340B-rebated drug. Second, the CHC may be forced to over-identify claims as 340B because, though a CHC may accurately identify a claim as 340B-eligible, a manufacturer may still refuse the rebate, meaning a CHC would have identified the drug as 340B for Medicaid purposes, received a lower 340B-based reimbursement, but would not receive the benefit of the 340B price 38 [14]: Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0095, https://www.regulations.gov/comment/HRSA-2025-0001-0095. 39 Comment on Agency Information Collection Activities; Proposed Collection; 340B Drug Pricing Program, Docket No. HRSA-2025-0001-0980, https://www.regulations.gov/comment/HRSA-2025-0001-0980. 25 on the claim because a manufacturer unilaterally denied the rebate. This scenario is particularly harmful to CHCs that are required to extend sliding fee discounts to patients at the point of sale before rebate payment. And it raises serious federal questions relating to whether a federal grantee may be required to overpay for drugs.40 It is also harmful to CHCs because wholesalers might not allow the CHC to reprocess a denied rebate at a non-WAC, non-340B price. And, as stated, this raises potential False Claims Act considerations because the CHC submitted a Medicaid claim as 340B when the claim ultimately was not 340B based on the manufacturers subsequent discretionary denial of the 340B rebate. Accordingly, the proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the Administrative Procedure Act and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts in the first instance. i. Adopting a Revised Medicaid Duplicate Discount Prevention Database We strongly recommend that HRSA adopt a publicly available database of Medicaid plan identification information. This database could be called the Medicaid Plan Billing Information Database (MPBID). The MBPID could be created by requiring manufacturers, state Medicaid agencies, and/or Medicaid managed care organizations to submit plan billing information used to identify Medicaid plans. This plan identification information includes the Medicaid plans unique Bank Identification Number (BIN), Processing Control Number (PCN), and Group Number (GRP) to identify those FFS and managed care plans under which a manufacturer may pay a rebate under the MDRP. This information should be published on 340B OPAIS or some other public federal website. This critical recommendation is buttressed by existing requirements that Medicaid plans, including Medicaid managed care plans, use unique BIN and PCN numbers to separate the Medicaid business lines from commercial business lines for pharmacy billing.41 While we appreciate the insinuation that manufacturer processes in the 340B rebate pilot will ensure the prevention of 340B and MDRP duplicate discounts, as stated above, the statutory obligation for the compliance measure falls to the covered entities: A covered entity shall not request payment under title XIX of the Social Security Act for medical assistance described in section 1905(a)(12) of such Act with respect to a drug that is subject to an agreement under this section if the drug is subject to the payment of a rebate to the State under section 1927 of such Act.42 After more than 33 years, CHCs request that HRSA put in place systematic mechanisms to support covered entities compliance with the duplicate discount prohibition by implementing the 40 See, e.g., 31 U.S.C. 3729 (making it illegal to overcharge a federal grantee). 41 42 C.F.R. 438.3(s)(7) The MCO, PIHP, or PAHP must assign and exclusively use a unique Medicaid-specific Bank Identification Number (BIN) and Processor Control Number (PCN) combination, and group number identifiers for all Medicaid managed care enrollee identification cards for pharmacy benefits. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter- C/part-438/subpart-A/section-438.3 42 42 U.S.C. 256b(a)(5)(A)(emphasis added). 26 Medicaid Plan Billing Information Database. To date, the mechanisms in place support HRSA and manufacturer processes for validating and auditing compliance. Systems like the Medicaid Exclusion File fail to provide CHCs and other 340B entities with a mechanism to ensure covered entities comply with the expectation that they will not request payment. The Medicaid Plan Billing Information Database would provide all covered entities with access to accurate Medicaid billing information (including BIN/PCN/GRP). C. TRICARE Duplicate Discounts The 340B rebate pilot would make it difficult to comply with TRICARE expectations because providers will not know whether a drug is 340B until a rebate is paid. The TRICARE Pharmacy Benefits Program, as codified in federal regulations, interacts with the 340B Drug Pricing Program in a manner designed to prevent overlapping federal discounts. The key regulatory provision is found at 32 C.F.R. 199.21, which governs the TRICARE Pharmacy Benefits Program. This regulation incorporates the concept of a covered drug as defined under 38 U.S.C. 8126, which serves as the statutory basis for the Federal Ceiling Price (FCP) program applicable to drugs purchased by certain federal agencies, including those under the TRICARE Program. The TRICARE regulation explicitly excludes from the definition of a covered drug any drug that is dispensed by a pharmacy under the 340B program. If a prescription is purchased under the 340B Program, it is not considered a covered drug for purposes of TRICAREs retail network pricing and TRICAREs manufacturer rebate obligations.43 The effect of this exclusion is to prevent the same prescription from being subject to both the 340B discount and the TRICARE FCP-based pricing, as effectuated through manufacturer rebate requirements. The regulatory structure thus creates a clear separation between the two programs, ensuring that the TRICARE rebate does not apply to a 340B discounted drug. Consistent with the statutory exclusion, TRICARE PBM agreements may obligate participants to identify 340B drugs to prevent the assessment or payment of TRICARE rebates on 340B discounted drugs. Under the 340B rebate pilot, pharmacies would learn of a drugs 340B status only after a manufacturer pays a 340B rebate. Despite a covered entity identifying a claim as 340B-eligible, a manufacturer may reject the 340B rebate request, meaning that a drug identified as 340B by the pharmacy may not be 340B after a manufacturer unilaterally implements rebate policies and denies rebate requests, even if such policy requirements can be found nowhere in state or federal law. The 340B rebate model would therefore impair a covered entitys ability to comply with contractual terms in TRICARE agreements and is likely to lead to many circumstances where the covered entity not only does not get the benefit of the 340B discount, but TRICARE also does not get the benefit of a TRICARE rebate because a manufacturer rejects a 340B rebate request and the covered entity has no mechanism to notify TRICARE of the rebate denial. Ultimately, this will divert resources from both safety-net providers and the health care program for uniformed service members, retirees, and their families. D. Commercial Duplicate Discounts 43 32 C.F.R. 199.21(q)(2)(iii)(E) 27 The requirement for CHCs to provide valuable 340B commercial claims data to pharmaceutical manufacturers cannot be included under the rebate pilot or any federally authorized program. The purpose of the 340B Program is to enable covered entities to stretch scarce federal resources in order to offset the costs of providing care to uninsured and underinsured patients.44 The statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. Commercial claims data is extraordinarily valuable proprietary information to CHCs.45 Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.46 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through subregulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. That data will be used by drugmakers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that drugmakers can obtain better formulary placement for their products and exclude cheaper drug alternatives.47 They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices.48 Drug industry data vendors have reported that such data is highly valuable to manufacturers.49 Further, manufacturers or PBMs have been and would continue to use such data to harm covered entities if covered entities are forced to provide it. This is because manufacturers will use commercial claims data to dispute rebate obligations to commercial PBMs, and those PBMs will then, in turn, discriminate against 340B claims and 340B providers to make up for the lost profit. These PBMs use the data to impose onerous claims identification requirements against covered entities, reduce reimbursement on identified 340B drug claims, restrict networks to exclude CHCs and their pharmacies, restrict patient choice of CHCs and their pharmacies, or all the above. These are widespread practices that fundamentally undermine the core purpose of the 340B Program, which is to permit safety-net providers to generate savings on commercial 340B claims to offset the vast uncompensated and undercompensated services they furnish to our countrys most vulnerable patient populations.50 44 Genesis Health Care, Inc. v. Becerra, No. 4:19-cv-01531-RBH, slip op. (D.S.C. Nov. 3, 2023). 45 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that commercial claims data is worth billions of dollars). 46 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.) 47 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (widely used drug industry data vendor and analytics services provider, Kalderos, identifying that commercial 340B claims data is worth at least . . . $6 billion annually in 2022.) 48 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (stating that 5% of commercial rebates paid by manufacturers are likely duplicates with the 340B Drug Pricing Program meaning a total of roughly $6 billion annually.). 49 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. (rebate data is worth billions). 50 See, e.g., Genesis Health Care, Inc. v. Becerra, 701 F. Supp. 3d 312, 330 (D.S.C. 2023) (stating that the goal of the 340B statute . . . is to make covered entities profitable in the face of the prescription drug price increases that followed the Medicaid Drug Rebate Program and that continue to this day.). 28 Indeed, over 30 states have passed laws to prevent this manufacturer-payer gamesmanship that seeks to usurp the 340B benefit.51 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one. When Congress enacted the 340B statute, it included explicit protection for manufacturers against Medicaid duplicate discounts but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Respectfully, HHS may not unilaterally mandate the transfer of such valuable property outside the bounds of any applicable federal or state law. We contend that HRSA lacks statutory authority to require the submission of commercial claims data. HRSAs authorization of mandatory commercial claims data submission under the rebate pilot exceeds the agencys statutory authority.52 The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing pricing to which they are statutorily entitled. As the District of D.C. explained, Congress therefore constrained the Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.53 Even if the statute were silent on this issue, silence cannot serve as a basis for imposing affirmative obligations on regulated parties. As the Third Circuit has made clear, obligations cannot spring from silence.54 By conditioning access to 340B pricing on the transfer of commercial claims data, HRSA has created a requirement wholly untethered to the statutory text. In addition, the requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act.55 There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. We harbor significant concerns that the 340B rebate models requirement that CHCs furnish valuable commercial claims data to drugmakers in exchange for drug price discounts raises the potential for fraud and abuse. Requiring covered entities to provide valuable data in exchange for preferential pricing not authorized by statute may implicate the federal 51 340B Report, Legislative Map: Contract Pharmacy Protection Bills, https://340breport.com/legislative-map/contract- pharmacy-protection-bill/; 340B Report,Legislative Map: Laws Passed That Prohibit PBM Underpayment, https://340breport.com/legislative-map/laws-passed-that-prohibit-pbm-underpayment/. 52 Pharmaceutical Research & Manufacturers of America v. U.S. Department of Health & Human Services, No. 1:14-cv-01685 (RC) (D.D.C. Oct. 9, 2014). 53 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 54 Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 55 5 U.S.C. 706(2)(A) (federal courts must set aside agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law). 29 AntiKickback Statute and analogous state laws.56 The 340B rebate pilot requires CHCs to provide valuable commercial claims data to manufacturers in exchange for discounted pricing on items (drugs) that may be billed to federal health care programs such as Medicaid or Medicare. This raises fraud and abuse risks and potential violations of the False Claims Act. HRSA cannot lawfully authorize a program that places covered entities at risk of violating federal fraud and abuse laws. For these reasons, the requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the APA, raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. VIII. Alternative Approach: Upfront 340B-Priced Payments to CHCs We respectfully assert that the 340B Rebate Pilot program must be replaced with a program that facilitates upfront 340B-priced drug payments from CHCs. This is because, under the plain language of the 340B statute, it is illegal to transfer discretion to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B Rebate Pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the drugmaker. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such a determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients.57 This is commonly referenced as the diversion prohibition. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those persons. It is reasonable for covered entities that employ or contract with health care professionals because, after all, the health professional is responsible for establishing the patient relationship. Drugmakers do not establish patient relationships. Notwithstanding the clear language of the diversion prohibition, the 340B Rebate Pilot transfers that explicit statutory discretion to drugmakers by allowing them to require upfront pricing and to consider data elements before deciding whether to pay a 340B rebate. Simply put, the 340B Rebate Pilot will determine whether a person is a patient of a covered entity, prior to any audit, and in clear contravention of the plain text of the diversion prohibition. We respectfully contend that the term rebate in the first paragraph of the 340B statute only relates to AIDS Drug Assistance Programs, which are mere payment systems for covering drugs and do not involve the establishment of patient relationships. Specifically, AIDS Drug Assistance Programs are statutorily obligated to pay for drugs after the drug has been prescribed. However, AIDS Drug Assistance Programs do not establish patient relationships because they are not health care 56 42 U.S.C. 1320a-7b (making it illegal to pay remuneration in exchange for items or services billable to federal health care programs.) 57 42 U.S.C. 256b(a)(5)(B) 30 providers that employ or contract with health care professionals to do so. Rather, they act as payers to assist with paying for drugs, among other things. Hence, a rebate model is appropriate for them. Indeed, HRSAs longstanding guidance defining eligible 340B patients explicitly excludes individual[s] registered in a State operated or funded AIDS drug purchasing assistance program [from the requirements of] patient of the covered entity for purposes of this definition if so registered as eligible by the State program.58And the legislative history of the 340B statute supports the position that rebate models, while appropriate for ADAPs, may not be appropriate for CHCs.59 IX. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse (NCC), which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. As described above, a 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities (CEs). Fortunately, the primary goal of the rebate pilot to address 340B and Maximum Fair Price (MFP) deduplication - can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a 340B Neutral Claims Clearinghouse (NCC). A. Benefits of an NCC Under an NCC, CEs would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The NCC would aggregate this data and transmit it to the Medicare Transaction Facilitator, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts; identify potential MFP-340B duplicate discounts under the IRA; share identified 340B units reimbursed by Medicare with CMS for exclusion from Part B and Part D inflation rebates; identify duplicate covered entity claims for 340B discounts on the same prescribed units of drugs (e.g., for patients of both entities); and to provide manufacturers access to a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. A rebate model, on the other hand, would force CHCs to divert resources away from patient care to cover these costs. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. 58 Notice Regarding Section 602 of the Veterans Health Care Act of 1992 Patient and Entity Eligibility, 61 Fed. Reg. 55,156, 55,157 (Oct. 24, 1996) (emphasis added).] 59 H.R. REP. 102-384, 16 31 Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. B. Expansion to Prevent Other Statutorily-Prohibited Duplicate Discounts This letter previously discussed concerns about the practicality of implementing a rebate model and the logistical challenges it would pose for existing duplicate discount identification efforts. An NCC could easily be expanded to include the two other types of statutorily-prohibited discounts: Medicaid Duplicate discounts in Medicaid. State Medicaid programs currently rely on a patchwork of approaches to identify 340B drugs and avoid requesting manufacturer rebates on those claims. These approaches include claim modifiers, manual reconciliation processes, and state-specific clearinghouses. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. This approach would benefit all stakeholders: o State Medicaid agencies would no longer need to build, administer, or finance their own systems to identify 340B claims. Instead, they could rely on a single national data source. o Covered entities would face lower reporting burdens by submitting data to a single system rather than navigating separate state and Federal reporting requirements. o Manufacturers would benefit from a single, standardized system for preventing duplicate Medicaid discounts, replacing the current patchwork of 50 different state processes and data sets. Medicare inflation rebates. CMS also needs 340B claims data to exclude 340B drugs from Medicare inflation rebate assessments sent to manufacturers. CMS is currently developing a voluntary data repository for this purpose and hopes to launch it this fall. Rather than creating another standalone system, CMS could collect this information through the NCC. Because participation in the NCC would be mandatory for covered entities, the resulting data would likely be complete and more accurate than data collected through the voluntary repository CMS is currently developing. C. Importance of Neutrality For an NCC to succeed, it must be widely viewed as neutral and trustworthy by all stakeholders. The 340B program has long been the subject of significant policy disputes among manufacturers, covered entities, and payers. Any national claims data infrastructure will only work if participants trust that it operates independently and does not favor one group of stakeholders over another. If the clearinghouse is perceived as aligned with a particular stakeholder interest, other stakeholders are unlikely to have confidence in the quality of the data it produces or how that data will be used. 32 The experience with the 340B ESP platform illustrates this concern. ESP was developed for and is financed by pharmaceutical manufacturers; its terms and conditions are widely viewed by CEs as favoring manufacturers interests and the platform itself. As a result, many CEs do not view ESP as a neutral system and are reluctant to rely on it as a trusted intermediary for sensitive claims information. This example underscores why neutrality must be a foundational design principle for any national clearinghouse. For these reasons, we recommend that the NCC be developed and administered either directly by the federal government or by an independent contractor selected by, and accountable to, the federal government. A governance structure rooted in federal oversight would provide transparency, independence, and stakeholder confidence, necessary for the NCC to function effectively and serve its intended purpose of preventing duplicate discounts without undermining the intent of the 340B program. D. Types and Use of Data Clear rules must also govern what data the NCC will collect, who may access it, and how it may be used. Key principles should include: Data minimization: CEs should submit only the data necessary to prevent the types of statutorily-prohibited duplicate discounts that the NCC is designed to address. o Allowable data elements should include National Drug Code (NDC), quantity dispensed, date of service, prescription number, dispensing pharmacy identifier (NPI), and covered entity identifier (340B ID). o Prohibited data elements should include patient-identifiable information, diagnosis codes, CPT codes, and other clinical data. Additionally, requests for purchasing data, as originally proposed by Johnson & Johnson in its initial rebate model60 published August 23, 2024, should be prohibited. Manufacturers have already demonstrated ready access to purchasing data, so CHCs should not be burdened with providing it. Manufacturer access: Manufacturers should not require access to this data because the information will be transmitted to the MTF and state Medicaid agencies for the purpose of preventing statutorily prohibited duplication of discounts. Strict confidentiality: Organizations receiving data from the NCC should be prohibited from sharing it with other entities. Purpose limitations: NCC data may only be used to determine whether a claim is eligible for other discounts or rebates. Data may not be used for other purposes, including, but not limited to, utilization management, reimbursement decisions, network participation determinations, or enforcement of restrictions not explicitly authorized by federal statute. No access for PBMs or payers. As previously mentioned, manufacturers can use claims data to dispute rebate obligations to commercial PBMs, and then PBMs will discriminate against 340B claims and 340B providers to make up for the lost profit. E. Bipartisan Congressional Support 60 https://beaconchannelmanagement.com/pages/resources (Johnson & Johnson Policy Documents) 33 Because a neutral clearinghouse offers a cost-effective and low-burden way to prevent statutorily prohibited duplicate discounts, it has received significant bipartisan support in Congress. Examples include: 340B PROTECT 340B Act: This bipartisan House bill, which received over 100 cosponsors in the 2021-22 session, aims to address Medicaid duplicate discount issues through the establishment of a neutral clearinghouse operated by a federal contractor. SUSTAIN 340B Act: The bipartisan Group of Six Senators released draft sections of this bill in early 2024. These sections included a neutral clearinghouse for claims data on both Medicaid and Medicare drugs. 340B ACCESS Act: This bill advocates for an NCC that would encompass all claims, including those from commercial sources. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA require manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Virginia Garcia Memorial Health Center strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Virginia Garcia believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Virginia Garcia Memorial Health Center appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact April Etheridge- Bosworth, Director of Pharmacy (aetheridgebosworth@vgmhc.org). Sincerely, _________________ Gil Muoz, CEO Virginia Garcia Memorial Health Center
HRSA-2026-0001-2437340B Health2026-04-20T04:00Z59,868 chars
See attached file(s) April 20, 2026 Submitted to Federal eRulemaking Portal: https://www.regulations.gov Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane Rockville, MD 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HHS Docket No. HRSA 202603042) Dear Administrator Engels: 340B Health welcomes the opportunity to submit comments in response to the Health Resources and Services Administrations (HRSA) Notice announcing a Request for Information (RFI) pertaining to the development of a 340B rebate model.1 340B Health represents more than 1,600 hospitals and health systems that participate in the 340B program. For over 30 years, drug manufacturers have complied with their legal obligation to offer up-front 340B discounts on drugs covered under the 340B statute. We are disappointed that HRSA continues to pursue a rebate model for 340B despite learning of significant concerns from 340B hospitals, other covered entities, and Congress in response to HRSAs now-withdrawn rebate pilot notice. 340B has served as a critical lifeline for safety-net hospitals and their patients for more than 30 years. Rebates will weaken that lifeline while putting even more money into the pockets of profitable drugmakers. The rebate model that HRSA is evaluating would allow drugmakers to impose post-sale rebates across all payers and uses for 25 drugs subject to Medicare Part D negotiated pricing 10 in 2026 and 15 beginning in 2027.2 This model upends decades of established practice in which manufacturers have met their 340B pricing obligations through the provision of upfront discounts to participating covered entity (CE) providers who reasonably have relied on receiving pricing through upfront 340B discounts. Rather than receiving discounts built into the purchase prices of costly medications, HRSA would allow manufacturers to require CEs to pay significantly higher upfront prices for drugs, submit documentation, and wait for rebates reflecting the difference between the high list price and the 340B discounted price. As explained below, this model disrupts decades of established practices that CEs have built around upfront 1 Health Resources and Services Administration, Notice, Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026) 2 This is 15 more drugs than included in HRSAs withdrawn rebate pilot notice, representing a 150% increase in the number of drugs that would be subject to rebates under this model. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 2 of 18 2 340B discounts and would impose significant costs on CEs, further diminishing already scarce resources available to support patient care. HRSA describes its first rebate pilot notice as a balanced approach to allow for rebates with safeguards that would cause minimal impact to covered entities.3 This approach seems to be based on a false premise that HRSA should be balancing the interests of CEs and manufacturers. Congress anticipated that the Secretary would use the [rebate or discount] that is the most effective and most efficient from the standpoint of each type of covered entity because a mechanism that is appropriate to one type of covered entity, such as community health centers, may not be appropriate to another type, such as State AIDS drug purchasing programs.4 It would be contrary to Congressional intent to replace 340B discounts with rebates when doing so would increase costs and administrative burdens for 340B providers. Rebates would fundamentally alter how hospitals access 340B pricing, replacing a decades- old upfront discount model with a more complex rebate system. This shift could strain cash flow for safety-net hospitals and introduce new administrative burdens, increasing costs and diverting resources from patient care. Such changes would disrupt well-established 340B programs and undermine the programs core purpose, making it implausible that a rebate modelespecially one applied to 25 widely used, high-cost drugswould have only a minimal impact on CEs. 340B Health strongly opposes a 340B rebate model for these reasons and those discussed below and urges HRSA to uphold the integrity of 340B by maintaining the current upfront discount model. If HRSA nevertheless moves forward with a rebate model, we recommend that the agency impose several safeguards, which are discussed in the last section of our comment letter. I. 340B Has Allowed Safety-Net Providers to Provide More Services to More Patients for Over 30 Years; Rebates Models Would Undermine That Success Hospitals participate in 340B only if they can demonstrate that they serve a disproportionately high number of low-income patients or are designated as Critical Access Hospitals. Reflecting these strict eligibility requirements, 340B hospitals provide an outsized share of care to underserved populations, delivering 77% of all hospital care for Medicaid patients and 67% of all uncompensated and unreimbursed care, as well as being more likely to offer a range of specialized services that typically operate at a financial loss, including trauma care, burn treatment, behavioral health, and HIV/AIDS care, than non-340B hospitals.5 340B hospitals 3 91 Fed. Reg. at 7288. 4 House Report 102-384 Part 2 to accompany H.R 2890, (Sept 22, 1992) (emphasis added) 5 Dobson DaVanzo & Associates, 340B DSH Hospitals Serve Higher Share of Patients with Low Incomes. Sept. 2022. https://www.340bhealth.org/files/340B_and_Low_Income_Populations_Report_2022_FINAL.pdf. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 3 of 18 3 provide these services despite experiencing significantly lower operating margins, on average negative, compared to non-340B hospitals.6 As a result of the financial support from 340B, which is funded by pharmaceutical companies at no-cost to taxpayers, 340B hospitals devoted 29% more of their net revenue to low-income and uninsured patients in 2022 than non-340B hospitals, an increase from a 17.5% gap in 2019.7 With razor-thin operating margins and little ability to increase their revenue, 340B allows hospitals to maintain or increase access to health care services that would otherwise be unavailable, such as by bringing physicians into the community across a variety of specialties, adding new clinics in new areas, and other services to help individuals access care, such as transportation, translation, and care coordination services.8 Congresss intent in creating 340B was to reduce the costs of operations for safety-net providers, allowing them to stretch scarce Federal funding as far as possible so that they could reach more eligible patients.9 340B reduces costs, effectively subsidizing safety-net providers, by allowing providers to purchase drugs at a discount and charge insurers, including Medicare, the same rates charged by non-340B providers. In this way, 340B providers generate savings amounting to the difference between the 340B price and the price they would have otherwise paid under their group purchasing organization (GPO) discounts or other commercial price. In addition to supporting safety-net facilities and their patients, 340B plays an important role in curbing drug price increases for all Americans. 340B serves as a significant restraint on drug company pricing for non-340B drugs, resulting in savings of $7 billion from 2013 to 2017 for Medicare Part D alone.10 This is due to the 340B inflationary penalty, which increases the amount of the discount higher than the required 23.1% for brand name drugs when drug companies increase prices faster than inflation. This penalty is most successful in discouraging price increases when a drug company is required to pay both the inflation penalty and a pharmacy benefit manager (PBM) rebate.11 The more drug companies can limit the number of their drugs subject to 340B, the easier it is to continue with sky-high price increases. Given this reality, it is perhaps not surprising that drugmakers have taken unilateral and extreme measures to limit 340B. In 2020, manufacturers unilaterally began restricting CE access to 340B pricing for drugs dispensed to their patients through community and specialty pharmacies. These 6 Dobson DaVanzo & Associates, LLC. 340B DSH Hospitals Increased Uncompensated Care in 2020 Despite Significant Financial Stress. July 2020. https://www.340bhealth.org/files/Dobson_DaVanzo_Op_Margins_and_UC_FINAL.pdf. 7 KNG Health Consulting, 340B Hospitals Increased Contributions to Uncompensated and Unreimbursed Care During the Pandemic (February 2025), https://www.340bhealth.org/files/KNG_Health_Final_Report_February_2025.pdf?_zs=cIhWb1&_zl=4Wb5A 8 340B Health. 340B Health Annual Survey 2022: Vital 340B-Supported Patient Services Threatened as Manufacturer Restrictions Cut Into Savings. July 2023. https://www.340bhealth.org/files/340B_Health_Survey_Report_2022_FINAL.pdf. 9 H.R. Rep. No. 102-384(II), at 12 (1992), 1992 WL 239341. 10 Dickson, Sean. Association Between the Percentage of US Drug Sales Subject to Inflation Penalties and the Extent of Drug Price Increases. Sept. 2020. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2770540. 11 Id. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 4 of 18 4 restrictions allow drugmakers to profit from avoiding 340B penalties on excessive price increases and discounts on pricey specialty drugs while harming patients and stripping rural and safety-net hospitals of significant financial support. The restrictions have diverted billions of dollars directly into manufacturer profits and away from safety-net hospitals and other providers, forcing many hospitals to scale back critical programs and patient services that are unsustainable without 340B resources.12 Replacing up-front discounts with back-end rebates creates costs that could further erode the 340B benefit, undermining safety net hospitals and the patients they serve. II. 340B Hospitals Inventory Management Systems and Business Relationships Created Over the Past 30 Years Are Based on Decades of Reliance on HRSAs Policy of Up-Front Discounts; Rebates Would Require Costly Changes 340B has long operated as a discount-based model, and 340B providers have reasonably relied on that model when building their 340B programs around receipt of upfront discounts. This up- front discount model is deeply embedded in 340B hospital operations, inventory management, financial systems, business arrangements, and compliance frameworks, and providers have come to depend on the predictability and immediacy of upfront discounts. Shifting 340B to a rebate model would require hospitals to undertake extensive and costly structural changes to systems and workflows that have been developed and refined over decades, including fundamental changes to how 340B drug inventory is managed. Prior to last year, HRSA had never proposed or publicly expressed interest in replacing discounts with rebates, reinforcing the reasonableness of hospitals reliance on the existing discount model. A. Rebates Would Force Hospitals to Make Costly Changes to Virtual Inventory Systems 340B hospitals use virtual inventory (replenishment) systems to manage their different inventories for 340B and non-340B drugs, which allows them to maintain a single neutral inventory that can be used for both 340B-eligible patients and patients that are not eligible for 340B (e.g, inpatients). Hospitals lack the space to maintain separate drug inventories, and increases compliance risks due to the potential for human error. Initial purchases of drugs under virtual inventory systems are made at the drugs list price. As drugs are dispensed or administered to inpatients or 340B-eligible outpatients, data elements are fed into split-billing software that records drugs dispensed to 340B patients and non-340B patients. These purchases accumulate under the 340B account and non-340B accounts, and when the hospital has recorded that an entire package of a drug has been dispensed to 340B patients, the hospital repurchases the drug at the 340B price and will continue to replenish that stock by purchasing the drug at the 340B price. A critical feature of the virtual model is that 340B purchases are made after drugs are dispensed/administered to individuals, which helps with 12 340B Health. Drugmakers Pulling $8 Billion Out of Safety-Net Hospitals, More Expected As Growing Numbers Impose or Tighten 340B Restrictions. July 2023. https://www.340bhealth.org/files/Contract_Pharmacy_Financial_Impact_Report_July_2023.pdf. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 5 of 18 5 compliance by ensuring that 340B drugs are purchased only to replenish drugs that were dispensed to 340B-eligible patients Rebates would fundamentally disrupt 340B hospitals reliance on the virtual inventory system in two ways. Manufacturers claim that drugs must be purchased at list price before the drug is dispensed or administered, disrupting the concept of a neutral inventory.13 Manufacturers also want to match each drug purchase at the 340B price to a unique patient to whom that drug was dispensed.14 Hospital systems do not have the ability to match each purchase on an invoice to a unique patient. Requiring hospitals to purchase drugs before dispensing or administering them could force hospitals to pre-buy WAC inventory to ensure sufficient product are on the shelves for 340B patients. This could lead to wasted medications, as patient needs change after purchase. Further, hospitals would need to incur new costs pertaining to tracking dispensation data to ensure it is not submitted to the manufacturers vendor until a WAC purchase occurs in order to avoid discrepancies between purchases and rebate requests that could contribute to rebate delays and denials. If this is required, it could also force hospitals to physically segregate drugs purchased at WAC for 340B purposes, so as not to use high-priced WAC drugs for inpatients instead of lower-cost drugs purchased at a discount through their group purchasing organization. This not only requires sufficient space to maintain two separate inventories, but also adds operational complexity for CEs. Moreover, managing multiple inventories of the same drugs increases the potential for human error, potentially negatively affecting patient access to needed medications.15 Requirements to match each purchase on an invoice to a unique patient would be even more disruptive. Virtual inventory systems receive the amount of a specific drug that was dispensed to a 340B-eligible patient, but do not record unique identifying information for the patient that received that specific drug. Without that patient information, an individual dispense cannot be easily linked to a specific claim. Rather, the accumulation of drug dispenses to 340B patients is recorded, and as the hospitals replenishes those drugs by making purchases at 340B, the accumulated amount decreases. Hospitals can compare the number of drugs accumulated, and 13 Beacon Channel Management, Welcome to Beacon, Aug. 23, 2024 (on file with 340B Health) (stating that [d]ispense or administration of any individual claim must have occurred after the purchase date of the priced invoice.). This language was later modified in November 2025 to state that dispense or administration of any individual claim must have occurred after the purchase date of the WAC purchase or up to seven days prior to the purchase (Beacon Welcome Packet, Page 32, version on file with 340B Heath). 14 Beacon MFP, Good Faith Inquiry Platform Demonstration, https://mfp.support.beaconchannelmanagement.com/en/articles/12834410-good-faith-inquiry-platform- demonstration, last accessed February 6, 2026 (the manufacturers rebate vendor, also their vendor for MFP, stated on a recent webinar that CEs should include all of those claims that were the basis for that 340B purchase, thereby requiring hospitals to tie a unique patients claim to a specific purchase on an invoice). 15 See HRSA Notice Regarding Section 602 of the Veterans Health Care Act of 1992; Contract Pharmacy Services, 61 Fed. Reg. 43549, 43554 (Aug. 23, 1996) (A separate inventory is a wasteful concept with respect to time, space and money. Further, it provides little if any additional security, as a separate inventory only speaks to what is currently on the shelf and not what should be on the shelf.) 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 6 of 18 6 review claim records to confirm that the number is correct, but cannot link each unique drug purchase a the unique patient to whom that drug was dispensed based solely on the systems used for inventory management. The inventory management software is separate from claims management software. If HRSA adopts a rebate model that requires hospitals to match each drug purchased to the individual patient that received the drug or permits manufacturers to deny rebates if hospitals cannot tie the drug identified for a unique patient claim to a specific invoice purchase, hospitals would be forced to start over in developing inventory management software that could meet this requirement throughout their hospital, if this were even possible to develop. Such a significant and fundamental disruption to inventory management systems that were developed in reliance on 30 years of up-front discounts. B. Rebates Could Force 340B Hospitals to Forego Wholesaler Discounts for Prompt Payments Over the more than 30 years that 340B has operated as an up-front discount program, wholesalers developed their own programs to provide additional discounts to 340B hospitals that are able to pay their invoices within a certain number of days after receiving it. These prompt pay incentives are in jeopardy under a rebate model. Since hospitals initially purchase 340B drugs at a the high list price, then have to submit data, and then have to wait to be paid their rebate from the manufacturer (the timing of which is outside their control), hospitals may not have the funds to pay their invoices within the required period to qualify for the highest prompt pay discounts. This puts in jeopardy potentially millions of dollars in revenue. This is yet another example of how rebates would impose costs on 340B hospitals by disrupting settled reliance interests pertaining to 340B implementation as upfront discounts. III. Rebates Would Increase Costs for 340B Hospitals and Reduce Resources Available to Support Low-Income and Other Underserved Patients, Undermining 340Bs Purpose A. Rebates Would Force 340B Hospitals to Make Upfront Purchases at Higher Prices, Which Will Reduce Hospital Cash Flow and Divert Critical Resources to Profitable Drugmakers The rebate model discussed in HRSAs RFI would force 340B providers many of which operate with narrow or even negative margins16 - to purchase 25 high-cost medications at wholesale acquisition cost (WAC) prices higher than 340B, submit documentation, and then wait for a rebate reimbursing the difference between that price and the 340B discount.17 By delaying 16 Dobson DaVanzo & Associates, LLC. 340B DSH Hospitals Increased Uncompensated Care in 2020 Despite Significant Financial Stress. July 2020. https://www.340bhealth.org/files/Dobson_DaVanzo_Op_Margins_and_UC_FINAL.pdf. 17 In some cases, the 340B price could be higher than the WAC price for up to two calendar quarters. This happens when the drugmaker lowers the price of a drug, as it takes two quarters before the impact of that adjustment is incorporated into the 340B ceiling price. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 7 of 18 7 access to 340B pricing, rebates would force hospitals to expend substantially more capital to maintain necessary drug inventories and effectively provide interest-free loans to profitable pharmaceutical manufacturers. This diversion of scarce resources would directly diminish the funds available to support care for low-income, rural, and underserved patients, as well as hospital operations, thereby undermining the fundamental purpose of 340B. Hospitals reported to 340B Health that the average annual float per hospital under HRSAs now-withdrawn Rebate Pilotreflecting the higher cost of having to purchase drugs at WAC rather than receiving upfront discountswould have been approximately $8.6 million per hospital, with disproportionate share (DSH) hospitals facing estimated pre-rebate float amounts ranging from $1.9 million for smaller facilities (less than 150 beds) to $37.2 million for those with 500 or more beds.18 That survey was based on the 10 drugs subject to Medicare Part D price caps beginning in 2026, whereas the rebate model that HRSA is presently evaluating is broader and would apply to an additional 15 drugs that are subject to those price caps beginning in 2027. As a result, the magnitude of the required floatand the associated financial strain on hospitalswould be expected to increase under the expanded scope of the policy. By delaying access to 340B discounts, rebates would require 340B hospitals to spend more to maintain their drug inventories, reducing cash flow for 340B hospitals that already have very low or negative operating margins. This impact exacerbates financial challenges for safety-net hospitals, even if rebates are ultimately received, forcing them to reduce the availability of discounted or free medications and access to patient services for low-income and/or rural patients.19 Hospitals receiving discounts from their wholesalers for prompt payments would have to pay the higher list price before receiving rebate payments in order to maintain those discounts. Hospitals that have 30 days or more to pay their wholesalers could still end up having to pay for rebate drugs purchased at elevated WAC prices before receiving rebate payments, even if manufacturers pay the rebates within 10 days of data submission. After purchasing a rebate drug, that drug would sit in the hospitals inventory until it is dispensed or administered to a patient (which could take weeks or months). Only then could the hospital prepare to submit its rebate claim to a manufacturer to be paid. The amount of time between WAC purchases and dispenses/administrations of rebate drugs could meaningfully increase the cash-flow challenges and harms imposed by the rebate waiting period. The time it would take a hospital to submit data to a manufacturer after dispensing or administering the drug also contributes to the length of the rebate waiting period. Hospitals would be forced to incur costs to mitigate the financial challenges and harms imposed by the waiting period. These include having to forego prompt pay discounts that hospitals receive 18 340B Health, Impact of the 340B Rebate Pilot on 340B Hospitals, Preliminary Survey Results, Sept. 8, 2025, https://www.340bhealth.org/files/FINAL-Summary-of-340B-Health-Survey-Results.docx_9_.8.25.pdf 19 Id. Waiting just 10 days to receive rebates after data submission just for the 10 drugs subject to HRSAs Rebate Pilot would tie up critical resources for 340B hospitals, forcing 58% of hospital respondents to 340B Healths survey to reduce the availability of discounted or free medications. Half of the responding hospitals report needing to reduce access to patient care services for low-income and/or rural patients. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 8 of 18 8 from their wholesalers when delayed access to 340B pricing under a rebate model prevents the hospital from sustaining those early payments. Losing prompt pay discounts can significantly increase overall annual drug expenses for hospitals, further reducing resources available to support patient care and hospital operations. A rebate model could also result in hospitals having to buy smaller packages just so they can dispense the packages more quickly to get rebates faster to try to mitigate cash-flow challenges stemming from rebates and delayed access to 340B pricing. Some might not have the physical space to do so. Further, as discussed in the next section, hospitals would be forced to allocate resources to submit rebate data as quickly as possible, as they cannot obtain rebate payments before submitting the data. B. Rebates Would Force 340B Hospitals to Spend Millions of Dollars on New Requirements to Access 340B Pricing Rebates would require safety-net hospitals to perform new tasks that are unnecessary when accessing pricing through upfront discounts. These include incurring costs to prepare, submit, and track data to request rebates and reconcile payments. HRSA estimated that its initial rebate pilot that would have applied to 10 drugs sold by 9 drugmakers would have imposed at least $200 million in additional annual costs on covered entities resulting from more than 1.5 million hours of labor that HRSA anticipated pharmacists would spend solely on submitting 11 data fields for pharmacy claims to a third-party vendor to request rebates for 340B drugs.20 HRSA estimates that the rebate model for 25 drugs by 13 drug companies would impose 3.8 million hours of labor.21 HRSA says that it expects that having to submit claims data to request rebates may not impose significant burdens on CEs because the required data will be comparable to data already being collected and maintained by CEs through their relationships with third-party vendors or is already being provided to manufacturers with respect to certain contract pharmacy policies and in-house pharmacy claims requests.22 HRSAs assumptions about the rebate data being comparable to what CEs already share with manufacturers and other vendors is incorrect, and reflect significant underestimates of the burden.23 Less than one-third of hospitals reported to 340B Health in a recent survey that they 20 Supporting Statement A, 340B Rebate Pilot. 340B Health noted in comments to HRSA on the ICR that HRSA had likely significantly underestimated the burden because HRSAs estimate was based on incorrect assumptions that covered entities would readily be able to generate the data and HRSAs estimate did not include medical claims data submissions, which 340B hospitals said would impose significant burdens. 21 HRSA, Agency Information Collection Activities: Proposed Collection: Public Comment Request; Information Collection Request Title: 340B Rebate Model Pilot Program Application, Implementation, and Evaluation, OMB Number 0906NEW, 91 Fed. Reg. 9632, 9633 (Feb. 26, 2026). 22 91 Fed. Reg. 9632, 9633 (Feb. 26, 2026). HRSA also states that data is comparable to data for claims dispensed under the Medicare Drug Price Negotiation Program. Part D plans not CEs - submit this data to manufacturers. Regardless, there are key differences in the data fields used to effectuate pricing under the MDPNP for Part D drugs and the data hospitals would have been required to submit under the rebate pilot. Hospitals had concerns about having to report BIN and PCN under the Rebate Pilot because these fields are not always readily available from contract pharmacies. BIN and PCN are not provided to manufacturers under the MDPNP. 23 340B Health Member Survey Costs and Burdens of Submitting 340B Claims Data to Pharmaceutical Companies, Summary Results, Apr. 1, 2026. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 9 of 18 9 are actually providing data for 340B drugs dispensed through their in-house retail pharmacies to retain pricing under manufacturer contract pharmacy policies.24 In addition, a whopping 89% reported that if they were required to submit claims data for their in-house pharmacy dispenses, the burden would be substantially higher than having to submit data only for contract pharmacy dispenses.25 Moreover, nearly half (47%) of hospital respondents to 340B Healths survey do not even share data for all their 340B locations with their third-party vendors (TPAs), and the vast majority of hospitals (87%) report that they would incur moderate to substantial costs if they had to do so.26 Its important to keep in mind that sharing data from new locations will require ongoing costs related to submitting data to third party vendors from locations that do not currently do so, such as clean sites that do use only 340B drugs and thus have no standard business reason to send data to their split-billing vendors. There are also permanent ongoing costs related to maintaining the equipment and regularly auditing each locations to ensure that the systems are working correctly. We also note that based on the data collection fields under HRSAs rebate pilot, hospitals would have been required to submit data they had never had to submit to manufacturers or TPAs, additional costs that were not included in HRSAs estimate. These items included data fields for BIN and PCN for retail claims, as well as all data pertaining to medical claims for drugs administered to patients during hospital outpatient services. In fact, hospitals spent considerable resources trying to develop processes to submit medical claims prior to the January 1 deadline for HRSAs rebate pilot. Mixed-use charge data that hospitals transmit to their split-billing vendors to distinguish 340B (outpatient) drugs from GPO (inpatient) drugs is far more limited in than the information required under the rebate pilot and can be sent soon after the drugs have been administered to the patient. That is not the case for a HRSAs rebate pilot, as manufacturers wanted that data to be based on the actual claim sent to the payer. Hospitals do not submit medical claims immediately after a drug is administered because payers require that all services furnished during the outpatient hospital stay, which can span several days (or longer if patient is admitted and the outpatient charges are required to be included in the final bill), appear on a single claim form. Hospitals must ensure that all services, such as physical therapy, imaging, and other departmental charges, are included on a single, consolidated bill, delaying submission until all departments report their charges to the hospital billing department. Hospitals highlighted that this issue is particularly 24 We understand in-house pharmacy claims requests to refer to demands by manufacturers such as Eli Lilly and Novo Nordisk for CEs to submit claims data for all 340B dispenses, including in-house retail and hospital pharmacies, as a condition of accessing 340B pricing. The minority of hospitals that are submitting claims data to a manufacturer(s) under that type of policy likely only recently began submitting such data considering the data submission timelines for those policies. 25 340B Health Member Survey Costs and Burdens of Submitting 340B Claims Data to Pharmaceutical Companies, Summary Results, Apr. 1, 2026. 26 Id. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 10 of 18 10 acute in surgical and observation areas and warned that it could result in significant financial strain. Due to how the bills are created and maintained by the hospital, some hospitals reported that the rebate data required under HRSAs withdrawn rebate pilot would not be available until months after the drug is administered to the patient. During this time, the hospital could be forced to make additional purchases of the drug at WAC before having the claims data needed to request rebates on the first WAC purchase made under a rebate model. Many hospitals reported that data required under HRSAs rebate pilot to identify individual payers and plans for medical claims did not even populate in their systems. Hospitals often use clearinghouses to finalize billing for medical claims and submit to payers. These clearinghouses use their own data to route to the correct payer. Many hospitals were unable set up a mechanism to transmit these fields by the January 1, even after dedicating extensive resources and involving multiple internal teams (e.g., information technology, pharmacy, business intelligence, and systems integration) to find a solution. Of those that located the data in their systems, only some had time prior to HRSA announcing it was pausing the Rebate Pilot to evaluate whether the data could be integrated into files sent to third-party administrators for rebate claims submissions without disrupting their existing billing systems. Hospitals have hundreds of different accounts for their main hospital, various clinics and the pharmacies that they own and operate whose billing systems could be significantly disrupted because of changes hospitals may need to make to have the required information to request rebates. 340B hospitals have historically relied on upfront discounts and have not accessed 340B pricing through rebate mechanisms, making the full scope of rebate-related costs difficult to quantify. Estimates of these costs are informed by hospitals experience preparing for HRSAs now- withdrawn rebate pilot. During the pilot preparation period, hospitals struggled to obtain clear and consistent information pertaining to the information required for rebate submissions, significantly increasing the cost and complexity of developing IT systems capable of submitting the required claims data. These challenges remain unresolved. If manufacturers are permitted to define rebate data fields without clear, standardized requirements, the resulting uncertainty will impose substantial and ongoing implementation burdens on hospitals.27 Though on a significantly smaller scale compared to rebate claims sharing requirements that would apply across all hospital settings, hospitals experiences submitting contract pharmacy claims data to 340B ESP provide insight into the types of financial and administrative burdens that hospitals would incur having to interface with the manufacturers rebate vendor that would collect rebate claims data. In 2020, several manufacturers began prohibiting hospitals from using contract pharmacies, except when hospitals submitted claims data through a third-party vendor. Nearly all manufacturers used 340B ESP, a platform operated by Second Sight Solutions, LLP. This platform was used to collect and verify claims data in order to authorize covered entities access 27 See Infra. Sec. IV. B. 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 11 of 18 11 to 340B pricing at contract pharmacies. A majority of hospitals that have submitted contract pharmacy claims data to 340B ESP report having to hire new staff (58%) or redeploy existing staff (62%) to manage this process including various issues that arose.28 Even when all data requirements are complied with, access to 340B pricing under these policies has been inconsistent at best. Hospitals continue to report numerous challenges when working with 340B ESP to access 340B pricing under the manufacturers restrictive contract pharmacy policies. These include delayed responses or errors by 340B ESP and/or the manufacturer(s) resulting in the hospital not receiving 340B discounts that they were otherwise entitled to, thereby harming the hospital (85%) and having to conduct follow-up with TPAs, wholesalers, and 340B ESP after pricing dropped for NDCs and contract pharmacies without explanation (95%).29 Hospitals report reduced staffing burdens and being able to reallocate staff and IT resources to 340B compliance if they no longer had to submit claims data to 340B ESP to access 340B pricing under manufacturers contract pharmacy restrictions.30 Despite these ongoing issues that require hospitals to expend additional resources, all of the manufacturers that HRSA approved to participate in the Rebate Pilot planned to use Beacon Channel Management, a unit of Second Sight Solutions LLC, to implement their 340B rebate models. 340B hospitals past experiences submitting claims data under restrictive manufacturer contract pharmacy policies have heightened concerns about delays in receiving rebates. In a prior 340B Health survey, 99% of hospitals that have submitted contract pharmacy claims data, through 340B ESP or other platforms, reported concerns about timely rebate processing.31 In addition, rebates require ongoing reconciliation to track submitted claims, match them to payments received, identify discrepancies, and resolve disputes with manufacturersall of which demand new systems, staff time, and oversight. CEs have reported that these activities would be complex and resource-intensive, often necessitating the engagement of third-party vendors to manage reconciliation process. These added layers of administration introduce significant new costs and operational strain, diverting resources away from patient care and undermining the efficiency of the upfront discount model. C. Added Rebate Costs Would Directly Reduce Access and Services to Low- Income Patients The costs imposed on 340B hospitals by replacing upfront discounts with rebates would reduce resources that would otherwise be available to support care and services for low-income and rural patients. Eighty-nine percent of hospitals report having to reduce access to care for low- 28 340B Health Member Survey Costs and Burdens of Submitting 340B Claims Data to Pharmaceutical Companies, Summary Results, Apr. 1, 2026. 29 Id. 30 Id. 31 340B Health, Impact of the 340B Rebate Pilot on 340B Hospitals, Preliminary Survey Results, Sept. 8, 2025 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 12 of 18 12 income and/or rural patients and 76% expect reductions in discounted/free drugs under a rebate model for just the 10 drugs subject to Medicare negotiated pricing in 2026.32 Rebates threaten to undermine the critical role that 340B hospitals play in providing access to needed care for patients who are uninsured, underinsured, and living with low incomes. More than 70% of hospitals report that rebates would negatively impact their ability to maintain current uncompensated and charity care levels.33 340B providers and Congress have shared concerns to HRSA about the costs a rebate model for only the 10 drugs would impose on their hospitals and the patient services threatened because of diminished CE resources. Rebates applied to more drugs would increase those harmful effects. It is troubling that HRSA not only continues to consider implementing a rebate model for 340B, but is now evaluating a broader rebate model than the one contemplated in its initial rebate pilot notice. Even more concerning because of the significant financial headwinds that 340B hospitals are facing that will make their 340B savings even more critical for supporting care to low-income and other underserved individuals. As patients come off Medicaid rolls in response to incentives in OBBBA - H.R. 1, some 340B hospitals may lose 340B eligibility, due to the reduction in individuals qualifying for Medicaid that is predicted to occur under that new law. Those hospitals and the remaining 340B hospitals will be forced to subsidize care for these newly uninsured individuals. Medicaid reimbursement is also expected to be reduced. 340B hospitals also face cuts to 340B savings for drugs subject to Medicare negotiation, which is expected to steeply increase as new drugs are added annually. Further, as soon as next year, steep cuts for 340B drugs covered under Medicare Part B are expected to be in place beginning in 2027. These combined rapid developments paint a worrying picture for the safety-net providers and their patients that 340B is intended to support. IV. Rebates Are Not Needed to Improve 340B Program Integrity or Deduplicate Under the Inflation Reduction Act and Significantly Less Disruptive Alternatives Would Promote These Objectives A. There Is No Evidence of Systemic Integrity Issues in 340B HRSA says that it is interested in testing a rebate model to evaluate whether rebates would promote 340B program integrity pertaining to Medicaid duplicate discounts and diversion.34 HRSAs interest in testing a rebate model rests on a flawed premise asserted by drugmakers that 340B program integrity is failing. Yet manufacturers have not publicly released any actual data supporting their clams. 32 Id. 33 Id. 34 91 Fed. Reg. 7287, 7288 (Feb. 17, 2026). 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 13 of 18 13 Some manufacturers point to HRSA audit findings of duplicate discounts pertaining to covered entities.35 However, HRSA applies that label data-entry errors, not actual findings of duplicate discounts. HRSA does not determine whether such data entry errors actually resulted in manufacturers paying a rebate on 340B Medicaid claims. In fact, HRSAs routine audits of CEs demonstrate that 340B compliance and integrity is high, including data pertaining to fee-for- service (FFS) Medicaid claims.36 Any allegations by manufacturers of duplicate discounts pertaining to Medicaid managed care organization (MCO) should be addressed to states as they, not 340B providers, are responsible for prevent duplicate discounts pertaining to Medicaid MCO claims.37 We note again, however, that manufacturers have provided no data demonstrating significant duplicate discounts pertaining to Medicaid MCO claims. Even if there was evidence that manufacturers were being subject to Medicaid duplicate discounts which there is not there are far less burdensome alternatives to rebates that would promote 340B program integrity objectives. The Department of Health & Human Services (HHS) could instruct state Medicaid agencies to collect retrospective submissions of 340B claims data from CEs, allowing the agency to identify 340B claims and exclude them from rebate requests to manufacturers. This process has been used successfully for Oregon Medicaid for more than a decade.38 Pharmaceutical companies plan to use CE claims data to avoid paying commercial rebates to pharmacy benefit managers under voluntary agreements.39 Manufacturers pay significant rebates to PBMs in exchange for placement of their drugs on the PBMs formulary, resulting in higher 35 See e.g., Johnson & Johnson Compl, 11 (stating that the Rebate Model would mitigate duplicate discounting between 340B purchases and rebates sought on the same medicines by various other downstream customers, in violation of the 340B statute.). 36 American Hospital Association, More Drug Company Oversight Needed to Maintain Compliance with 340B Program Rules, https://www.aha.org/guidesreports/2025-06-16-more-drug-company-oversight-needed-maintain- compliance-340bprogram-rules. 37 The Centers for Medicare & Medicaid Services (CMS) directs the states to exclude 340B MCO claims from their rebate requests. 42 U.S.C 1396r-8 (j)(1)(A); 18 42 C.F.R. 438.3(s)(3). This fact was recently referred to by a federal court judge that was evaluating manufacturer assertions of CE noncompliance with the 340B statutes duplicate discount provision, noting that, [t]he responsibility for preventing duplications for managed care organizations falls to state Medicaid agencies. Eli Lilly v. Kennedy et al, 2025 WL 1423630 at *9 n.3 (D.D.C. May 15, 2025). 38 See Oregon Health Authority, Retroactive 340B Claims File Instructions, https://www.oregon.gov/oha/HSD/OHP/Tools/340B%20Claims%20File%20Instructions%20and%20Design.docx. For several years, Oregon Medicaid has identified 340B claims using a method that relies upon covered entities or their contractors submitting at regular periods a file with limited 340B claim information directly to the states Medicaid rebate vendor. The Oregon model demonstrates that 340B claim identification is achievable through retrospective file transfers and without imposing costly data sharing requirements on 340B providers that reduce the scarce resources available to them to support patient care. 39 See AbbVies 340B Rebate Pilot Proposal to HRSA (stating that AbbVie believes that rebate models are an effective and efficient way to comply with duplicate discount prohibitions (statutory and contractual) ... it is common for manufacturers contractual agreements with commercial health plans to not require rebates on units subject to the 340B discounted price.); see also Beacon 340B Rebate Model Terms of Use, https://cm.beaconchannelmanagement.com/pages/terms, (stating that [t]he Rebate Platform further enables analysis of this claims data for Manufacturers in order to identify Medicaid, Medicare, TriCare, commercial payer, or other discounts that are ineligible for reimbursement by Manufacturers.). 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 14 of 18 14 volume for the manufacturer.40 Some of these contracts include provisions prohibiting PBMs from claiming rebates from manufacturers for drugs that are purchased at the 340B price. Thus, manufacturers want CE 340B claims data, which they refer to as providing greater transparency in 340B, so that they can enforce their private commercial contracts banning PBMs from collecting rebates on 340B claims.41 This purpose is not related to 340B program integrity nor any 340B statutory objective. The 340B statute does not explicitly permit use of CE claims data by manufacturers for purposes unrelated to obligations created under the statute. CEs would not be aware of how their data was being used nor, if shared by manufacturers with commercial entities, the accuracy of the data shared or other claims made about CE use of 340B. It is possible that such data could be used to CEs detriment. We urge HRSA not to authorize another 340B rebate program that forces safety net providers to bear the cost of data sharing and purchasing drugs at non-340B prices to assist with policing manufacturers commercial agreements. Manufacturers should not be permitted to use CEs rebate claims data for commercial purposes. B. Deduplication Under the Medicare Drug Price Negotiation Program (MDPNP) Can Be Achieved Without Imposing Significant Financial and Administrative Burdens on Safety-Net Providers As of January 1, 2026, manufacturers are required under the MDPNP to offer CEs the lower of the 340B ceiling price or the Maximum Fair Price (MFP) on drugs chosen by Medicare for 10 drugs. HRSA had approved rebate plans submitted by manufacturers for these drugs, though rebates, had they taken effect on January 1, would have applied across all payers and uses of the drugs. HRSA says that it wants to evaluate whether a rebate model that would apply to 25 drugs, including 15 additional drugs that will be subject to negotiation beginning in 2027, would benefit manufacturers participating in the MDPNP. That HRSA is considering changing 30 years of policy to test a rebate model that risks disrupting 340B program operations and diminishing the critical resources on which CEs, the intended beneficiaries of 340B rely, and doing so for the benefit of profitable drugmakers, undermines 340Bs very purpose. Further, rebates are not necessary for deduplication between the MFP and 340B and less burdensome alternatives would promote this objective. A government-led data collection process that would identify 340B claims and exclude them from being submitted to manufacturers, thereby eliminating the possibility of duplication with MFP refunds, is just one alternative that 340B Health has encouraged HHS to adopt. Other alternative models that involve data sharing and that do not involve rebates have been proposed. HHS should pursue those alternatives over a 40 PBMs, Formularies, and Rebates: What Investors Should Know, DrugPatentWatch, July 30, 2025 (https://www.drugpatentwatch.com/blog/pbms-formularies-and-rebates-what-investors- shouldknow/#:~:text=The%20gross%2Dto%2Dnet%20bubble,entities%20in%20the%20supply%20chain.&text=Th e%20s cale%20of%20this%20bubble,their%20medication%20may%20be%20falling.) 41 The Impact of 340B on Commercial Contracts, Pharmaceutical Commerce, Feb. 1, 2024, https://www.pharmaceuticalcommerce.com/view/the-impact-of-340b-on-commercial-contracts 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 15 of 18 15 rebate model that would upend 340B and reduce scarce resources available to 340B providers to support patient care. C. Rebates Cannot Address Compliance With 340B Patient Definition Requirements A rebate model could not be used to assess compliance with patient definition requirements. The 340B statute prohibits covered entities from reselling or otherwise transferring a 340B drug to a person who is not a patient of the covered entity.42 Under HRSAs longstanding patient definition guidelines, an individual will not qualify as a patient of a CE unless the CE maintains health care records and is responsible for the care provided.43 Accordingly, medical records and supporting documentation are essential to determining the extent of a covered entitys responsibility for an individuals care; rebate claims data alone are insufficient for this purpose. The only reliable way to assess potential diversion is through a review of patient records. Covered entities are already required to maintain auditable records demonstrating claim eligibility, which both HRSA and manufacturers are authorized to review under the 340B statute. V. Recommendations if HRSA Ultimately Approves a Rebate Model For the reasons stated above, we urge HRSA not to proceed with a rebate model. If HRSA chooses to proceed with rebates notwithstanding significant disruptions to 340B, increased participation costs for 340B providers and resulting harm to patients, we urge HRSA to implement the following safeguards. A. Prohibit All Rebate Denials HRSA should prohibit manufacturers from issuing any rebate denials. Prohibiting denials based on diversion and Medicaid duplicate discounts would be helpful, but additional safeguards would be needed to protect CEs. Manufacturers have a strong financial incentive to deny 340B rebates, which would require 340B hospitals to spend even more resources to contact them directly, try to resolve the issue, and ultimately have to pursue resolution through the formal ADR process. If manufacturers believe the claim did not comply with 340B or duplicated an MFP refund, they have ample authority to engage the hospital in a good faith inquiry to resolve the issue, and may ultimately audit the hospital and proceed through HRSAs ADR process. Prohibiting rebate denials would bring the rebate model somewhat closer to the current discount model for both CEs and manufacturers. Manufacturers would still gain by receiving 340B-claim- identifying data, meanwhile a no-denial policy would help limit a portion of the new costs providers would be expected to incur to challenge denials. Manufacturers, not CEs, are in the best position to understand the basis for a denial. Similarly, with duplicated MFP refunds, manufacturers may follow IRA procedures, as they are currently doing for the 10 drugs. Any denials that HRSA permits should be pre-approved by HRSA so that manufacturers are clear on 42 42 U.S.C. 256b(a)(5)(B). 43 61 Fed. Reg. 55156 (Oct. 24, 1996). 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 16 of 18 16 the specific documentation they would be required to submit to CEs to support the denial. This information should then be subject to public notice-and-comment. HRSA had approved rebate plans for manufacturers that planned to deny claims that do not comply with their own restrictive contract pharmacy policies. 340B Health maintains that HRSA lacks the legal authority to enforce manufacturer-imposed contract pharmacy restrictions. If rebate denials are allowed on this basis, it is unclear how CEs would even appeal or challenge those denials, nor how HRSA would determine compliance with restrictive policies that it did not issue. Among hospitals that believe they would qualify at least one Rebate Drug through contract pharmacy, 88% reported to 340B Health they would face significant financial harm if such denials were permitted for just the 10 MFP drugs.44 B. All Claims Data Requirements Should Be Pre-Approved by HRSA and Subject to Notice and Comment Requirements Explaining the Specific Information That Would Be Required for Rebate Submissions Hospitals experience preparing for the rebate pilot before a federal court stopped implementation on January 1 underscores why all claims data requirements must be pre- approved by HRSA and subject to public notice-and-comment. HRSAs initial rebate pilot notice did not include medical claims data requirements, yet on October 30, 2025, the agency introduced these additional fields that manufacturers could requiregiving hospitals only 60 days to assess feasibility, with no opportunity to provide input on whether those fields were appropriate or even consistent with 340B statutory and compliance frameworks.45 Compounding this problem, while HRSAs rebate pilot website listed the required data elements, it failed to define them, leaving hospitals to rely on vague definitions and inconsistent and evolving interpretations provided by the manufacturers rebate vendor. This created widespread confusion for CEs about what information was required for rebate submissions, particularly for complex medical claims data. Hospitalsmany of which operate hundreds of billing accounts across hospitals, clinics, and owned pharmacieswere forced, within weeks, to determine whether their systems capture this data or whether significant and potentially disruptive operational changes would be necessary, despite no prior testing or validation. This experience demonstrates that without upfront HRSA approval, clear definitions, and stakeholder input through notice and comment, rebate data requirements risk being unworkable and operationally destabilizing for covered entities. Additionally, if HRSA moves forward with rebates, HRSA should limit data collection to the least amount of information necessary to identify 340B claims. This would not include invoice data to prove 340B drugs were purchased at WAC and prior to the date of dispense. We strongly oppose that burdensome and unnecessary requirement. Providing such data would require retrieval and review of large, complex reports from multiple wholesaler portals containing 44 340B Health, Impact of the 340B Rebate Pilot on 340B Hospitals, Preliminary Survey Results, Sept. 8, 2025 45 Beacon Channel Management, Frequently Asked Questions, Claims Data, https://support.beaconchannelmanagement.com/en/articles/9589827-rebate-model-frequently-asked-questions (last accessed 12/6/25). 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 17 of 18 17 extraneous data just to isolate the required information. With potentially hundreds of thousands of transactions across wholesaler and contract pharmacy relationships, this time-consuming process may need to be repeated daily, increasing the risk of errors and rebate denials. Redirecting staff to manage this task would divert critical resources from patient care. Moreover, this requirement is redundant, as hospitals would have auditable information to confirm the WAC purchase if there were questions or audits by manufacturers, but without the pressure to do so as quickly as required to avoid delayed rebate payments and meet manufacturers data submission timelines. C. HRSA Should Not Approve a Claim Submission Requirement Shorter Than 90 Days We urge HRSA not to approve any rebate claim submission window shorter than 90 days. Submitting data for drugs administered in the hospital setting has never been required under 340B, and hospitals consistently report that these timelines are significantly longer than for retail pharmacy claims, where billing typically occurs at the point of dispensing. In contrast, hospital outpatient drugs are billed alongside all other services provided during a patients stayoften spanning multiple dayson a single claim form. As a result, drug claims are not submitted at the time of administration but only after all associated services are finalized. Hospitals must wait for multiple departments, such as physical therapy, radiology, and other ancillary services, to submit their charges before a complete and accurate bill can be generated. This delay is especially pronounced in surgical and observation settings, where longer stays and more complex care coordination are common, and hospitals have indicated that compressed timelines would create real financial harm. A submission window shorter than 90 days would significantly increase the likelihood that rebate claims are denied simply because the underlying claim has not yet been finalized. While manufacturers may prefer shorter timelines to obtain data needed to administer and enforce their commercial rebate agreements with PBMs, those considerations are unrelated to 340B program requirements and should not dictate timelines that undermine hospitals ability to access 340B pricing. HRSA should be particularly mindful of rebate requirements that restrict CE access to 340B pricing that they are statutorily entitled to. D. HHS Should Require State Medicaid Agencies to Issue Guidance Prior to Rebate Implementation Rebates introduce significant operational challenges for 340B hospitals related to Medicaid billing that HHS should require state Medicaid agencies to address before implementing any rebate model. Prior to withdrawing its Rebate Pilot notice, HRSA advised CEs to work with state Medicaid agencies to determine appropriate billing practices but HRSA did not resolve the issue of how CEs should bill their state Medicaid agencies for 340B rebate drugs purchased at WAC. Hospitals that use 340B drugs for Medicaid patients (carve-in) and whose state Medicaid agencies require CEs to bill at actual acquisition cost (AAC) for drugs acquired under 340B had been unclear as to what their AAC should be. Billing at WAC requires burdensome adjustments by CEs if they receive rebates, whereas billing at 340B risks underpayment if drugmakers deny 340B Health Comments on 340B Rebate Pilot RFI April 20, 2026 Page 18 of 18 18 rebates, which would be costly for CEs purchasing at WAC. HRSA reiterated that CEs must purchase 340B rebate drugs upfront at WAC and that it expects the ultimate acquisition cost to reflect the 340B ceiling price once the rebate is issued, indicating that HRSA anticipated CEs would bill Medicaid using the 340B price. HRSA never addressed the potential risk that CEs could face rebate denials and associated financial losses that they might not be able to recover. If the 340B CEs are subjected to rebates, the Department should address this issue and provide guidance before rebate implementation. Thank you for considering our comments. Please contact me at maureen.testoni@340bhealth.org or Amanda Nagrotsky, Vice President, Legal and Policy, at amanda.nagrotsky@340Bhealth.org, if you have questions or would like to discuss our comments. Sincerely, Maureen Testoni President and Chief Executive Officer 340B Health
HRSA-2026-0001-2438Adrianne Maddux · Denver, CO, United States2026-04-20T04:00Z9,664 chars
HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) DENVER INDIAN HEALTH AND FAMILY SERVICES, INC. 2880 West Holden Place DENVER, CO 80204 PH: (303) 953-6600 FAX: (303) 781-4333 www.dihfs.info April 20, 2026 Thomas J. Engels, Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Submitted electronically via: https://www.regulations.gov RE: HRSA 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Administrator Engels, On behalf Of Denver Indian Health and Family Services, Inc. (DIHFS), we hereby submit our written comments and recommendations in response to the Health Resources and Services Administrations (HRSA) February 17, 2026, Federal Register notice on HRSAs 340B Rebate Model Pilot Program (hereinafter 340B Rebate Program or the Program). 1 Background DIHFS is an IHS-funded UIO dedicated to serving the American Indian and Alaska Native community in the Denver metropolitan area. As a trusted community-based provider, DIHFS delivers culturally responsive health and family services designed to improve access to quality care, promote wellness, and address the unique needs of urban Native populations through holistic and community-centered approaches. Comment DIHFS appreciates the opportunity to comment on HRSAs 340B Rebate Program and thanks HRSA for providing respondents more time to submit written comments by extending the written comment deadline.2 As a general matter, we are concerned that the Program will cause significant administrative and financial burdens for Indian Health Care Providers (IHCPs)- which includes UIOs- and barriers to access to vital medications for American Indian and Alaska Native patients. The United States has a trust obligation to provide health services to maintain and improve the health of American Indian and Alaska Native people.3 The United States owes this trust obligation to American Indian and Alaska Native people no matter where they live4 and contracts with UIOs to fulfill this trust responsibility in 1 Request for Information: 340B Rebate Model Pilot Program, 91 Fed. Reg. 7287 (Feb. 17, 2026), https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for- information-340b-rebate-model-pilot-program. 2 Request for Information: 340B Rebate Model Pilot Program Extension, 91 Fed. Reg. 9632 (Feb. 26, 2026), https://www.federalregister.gov/documents/2026/02/26/2026- 03838/request-for-information-340b-rebate-model-pilot-program-extension. 3 25 U.S.C. 1601(1). 4 S. Rep. No. 100-508, at 25 (1988) (stating that The responsibility for the provision of health care . . . does not end at the borders of an Indian reservation. Rather, government relocation policies which designated certain urban areas as relocation centers for Indians, have in many instances forced Indian people who did not which to leave their reservations to relocate in DENVER INDIAN HEALTH AND FAMILY SERVICES, INC. 2880 West Holden Place DENVER, CO 80204 PH: (303) 953-6600 FAX: (303) 781-4333 www.dihfs.info urban areas.5 There are currently 25 UIOs that participate in the 340B program and changes to the operation of the program could have significant impacts on their ability to serve their communities. DIHFS participates in the federal 340B Drug Pricing Program. . Participation in the 340B program allows our UIO to stretch limited financial resources and reinvest savings directly back into patient care. These program benefits support sustainable pharmacy services, improve access to affordable medications, and help ensure continuity of care for our community. By leveraging 340B savings, our pharmacy services contribute to improved medication adherence, reduced financial barriers for patients, and long-term stability of essential health services for the American Indian and Alaska Native population we serve. Accordingly, we make the following comments and requests in response to the February 17, 2026, Federal Register notice on the 340B Rebate Program. Exempt IHCPs from HRSAs 340B Rebate Program Meaningfully engage with UIOs through formal Urban Confer or UIO listening session Exempt IHCPs from the 340B Rebate Program We request an exemption for Indian Health Care Providers from HRSAs 340B Rebate Program. This is also a Tribal request that has been made by both the Department of Health and Human Services (HHS) Secretarys Tribal Advisory Committee (STAC) and the Centers for Medicaid and Medicare Services (CMS) Tribal Technical Advisory Group. We strongly support this request. Under the 340B Rebate Program, participating UIOs would be required to purchase drugs at full retail price and receive a rebate later. Requiring this financial expense while waiting for manufacturer rebates will severely compromise their ability to purchase necessary medications and sustain their current level of care. A rebate-based 340B program would require our clinic to purchase drugs at full market pricing upfront, rather than receiving 340B discounts at the point of sale. This shift significantly increases short-term drug acquisition costs and places additional pressure on clinic cash flow, particularly for high-cost specialty and infused medications. UIOs are already grossly underfunded, and this additional hardship would cause catastrophic impacts on our operating funds. Savings would only be realized after rebates are submitted, validated, and reimbursed, creating a delay that may extend several months. During this period, the clinic must absorb the full cost of inventory, introducing liquidity risk and financial uncertainty. Variability in rebate timing and potential disputes further complicate budgeting and increase administrative burden. Overall, replacing upfront 340B discounts with delayed rebates shifts financial risk to the clinic, increases upfront purchasing costs, and undermines predictable cash flow needed to sustain UIO services. Additionally, the 340B Rebate Program increases the administrative burden by changing the reimbursement and claims process, and complicates the accounting procedures for UIOs, which disrupts staff capacity and the organizations mission. The 340B rebate program will impose a significant administrative and financial tracking burden on our UIO due to its reliance on post-dispensing reconciliation rather than point-of-sale savings. Limited staff must manually track eligible prescriptions, reconcile pharmacy and Medicaid data, manage rebates receivable, and monitor delayed payments, creating cash-flow and accounting challenges. These activities will divert scarce administrative and finance resources away from patient services and core fiscal management. Overall, the complexity of the rebate model disproportionately will strain UIOs and reduce operational efficiency. Increased financial and operational pressures may affect the sustainability of our pharmacy operations and limit urban areas, and the responsibility for the provision of health care services follows them there.). 5 See 25 U.S.C. 1652. DENVER INDIAN HEALTH AND FAMILY SERVICES, INC. 2880 West Holden Place DENVER, CO 80204 PH: (303) 953-6600 FAX: (303) 781-4333 www.dihfs.info the ability to stock or dispense high-cost medications, jeopardizing access to medications for our American Indian and Alaska Native patients. The federal government owes a trust obligation to ensure the highest possible health status for Indians and urban Indians and to provide all resources necessary to effect that policy.6 In light of this unique federal trust obligation, it is imperative that IHCPs be explicitly exempted from the proposed 340B Rebate Program. Without an exemption, the administrative and financial burden will impede providers ability to deliver on the trust obligation. Meaningfully Engage with UIOs We request HRSA engage meaningfully with UIOs on the Program through formal Urban Confer or UIO listening session. The best practice for engagement with UIOs and UIO leaders is through hosting Urban Confer sessions or UIO listening sessions. An Urban Confer is an open and free exchange of information and opinions that leads to mutual understanding and comprehension; and emphasizes trust, respect, and shared responsibility.7 The IHS currently has a robust policy8 and we encourage HRSA to work with its colleagues at IHS to organize and facilitate a meeting with UIOs. By conferring with us, HRSA will be able to more fully understand the impacts of the Program on us and the urban American Indian and Alaska Native patients we serve. We reiterate our strong support of Tribal sovereignty and the government-to-government relationship between Tribal Nations and the United States. We wish to make clear that we request further engagement with UIOs only to provide HRSA with the information and technical expertise HRSA needs to better serve urban American Indian and Alaska Native communities, and that development of any programming impacting Indian Country can only take place in accordance with the wishes of Tribes. Conclusion DIHFS again appreciates the opportunity to comment on HRSAs 340B Rebate Program. We reiterate the importance of exempting IHCPs- which includes UIOs- from the 340B Rebate Program. Sincerely, Adrianne Maddux Executive Director 6 25 U.S.C. 1602(1). 7 25 U.S.C. 1660d. 8 INDIAN HEALTH SERV., Conferring with Urban Indian Organizations, in INDIAN HEALTH MANUAL (2023), https://www.ihs.gov/ihm/pc/part-5/p5c26/.
HRSA-2026-0001-2439Community Health Net2026-04-20T04:00Z11,261 chars
Comment attached as file April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Net (CHN), we appreciate the opportunity to respond to the Request for Information regarding the proposed 340B Rebate Model Pilot Program. Organizational Perspective Community Health Net is a safety-net provider committed to ensuring access to comprehensive, affordable care for underserved and vulnerable populations. As a participant in the 340B Drug Pricing Program, CHN relies on the programs current structure to sustain essential services, expand access to medications, and address community health needs. CHN, along with many other safety-net providers, has serious concerns about the feasibility and impact of transitioning to a rebate-based model. Fundamental Concern with a Rebate Structure The current 340B framework provides upfront discounts that allow providers like CHN to manage limited resources effectively and respond in real time to patient needs. A rebate model would fundamentally alter this structure by requiring providers to incur higher upfront costs and wait for reimbursement. This shift introduces operational uncertainty and financial risk that is inconsistent with how safety-net providers deliver care. Lack of Key Design Details CHN is concerned that the RFI does not include sufficient detail to allow for a meaningful evaluation of the proposed model. Critical elements remain undefined, including: Scope of drugs and participating manufacturers Claims submission and validation processes Timing and mechanisms for rebate payments Dispute resolution protocols Allocation of administrative responsibility and cost Without this level of specificity, providers cannot accurately assess feasibility or prepare for implementation. Operational and Administrative Impact A rebate model would require CHN to fundamentally redesign existing workflows. Under such a model, CHN would need to: Track eligible prescriptions at a significantly more granular level Submit and monitor rebate claims across multiple entities Reconcile payments and investigate discrepancies Manage denials, delays, and disputes Maintain expanded documentation for compliance and audit readiness These requirements represent a substantial increase in administrative burden and complexity compared to the current point-of-sale discount structure. Staffing Implications To support these additional processes, CHN would need to shift staff capacity toward administrative and financial management functions. This includes expertise in pharmacy operations, compliance oversight, revenue cycle management, and data reconciliation. For a safety-net provider, redirecting staff resources in this way has direct implications for service delivery and organizational focus. Systems and Technology Constraints Implementation of a rebate model would require significant changes to CHNs technology infrastructure, including: Enhanced claims tracking and validation capabilities Integration with manufacturer or third-party rebate platforms Expanded reporting and audit systems These changes would likely require new vendor relationships, system upgrades, and ongoing maintenancefurther increasing operational strain. Cash Flow and Financial Risk The shift from upfront discounts to retrospective rebates would materially affect CHNs cash flow. Instead of realizing savings at the time of purchase, CHN would be required to carry higher acquisition costs while awaiting reimbursement. This introduces uncertainty in both timing and amount of rebate payments, complicates financial planning, and increases exposure to denied or delayed claims. For safety-net providers operating with limited financial flexibility, predictability in funding is essential to sustaining patient services. Impact on Patient Care The administrative and financial pressures associated with a rebate model would inevitably affect patient care. Resources currently used to support access to medications, care coordination, and community-based services could be redirected toward managing rebate processes. CHNs ability to respond quickly and effectively to patient needs depends on a stable and efficient 340B structure. Recommendations Given these concerns, CHN respectfully recommends that HRSA: 1. Provide detailed program design elements prior to further consideration or implementation 2. Ensure that any proposed model does not shift administrative or financial burden onto covered entities 3. Preserve access to 340B pricing in a predictable and timely manner 4. Engage directly with safety-net providers to assess real-world operational feasibility before advancing a pilot Conclusion Community Health Net appreciates the opportunity to provide input on this important issue. However, CHN has significant concerns that a rebate-based approach would introduce operational complexity, financial uncertainty, and unintended consequences for safety-net providers and the patients they serve. We urge HRSA to carefully consider these impacts and to work collaboratively with providers to ensure that any future changes to the 340B program strengthenrather than undermineits ability to support vulnerable communities. If you have any questions, please contact Linda Pinnell via email to lpinnell@community- healthnet.com. Sincerely, Community Health Net Craig Ulmer, CEO 1202 State Street, Erie PA 16501 www.communityhealthnet.org April 20, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: Request for Information: 340B Rebate Model Pilot Program (HRSA-2026-03042) Dear Director Britton: On behalf of Community Health Net (CHN), we appreciate the opportunity to respond to the Request for Information regarding the proposed 340B Rebate Model Pilot Program. Organizational Perspective Community Health Net is a safety-net provider committed to ensuring access to comprehensive, affordable care for underserved and vulnerable populations. As a participant in the 340B Drug Pricing Program, CHN relies on the programs current structure to sustain essential services, expand access to medications, and address community health needs. CHN, along with many other safety-net providers, has serious concerns about the feasibility and impact of transitioning to a rebate-based model. Fundamental Concern with a Rebate Structure The current 340B framework provides upfront discounts that allow providers like CHN to manage limited resources effectively and respond in real time to patient needs. A rebate model would fundamentally alter this structure by requiring providers to incur higher upfront costs and wait for reimbursement. This shift introduces operational uncertainty and financial risk that is inconsistent with how safety-net providers deliver care. Lack of Key Design Details CHN is concerned that the RFI does not include sufficient detail to allow for a meaningful evaluation of the proposed model. Critical elements remain undefined, including: Scope of drugs and participating manufacturers Claims submission and validation processes Timing and mechanisms for rebate payments Dispute resolution protocols Allocation of administrative responsibility and cost Without this level of specificity, providers cannot accurately assess feasibility or prepare for implementation. Operational and Administrative Impact A rebate model would require CHN to fundamentally redesign existing workflows. Under such a model, CHN would need to: Track eligible prescriptions at a significantly more granular level Submit and monitor rebate claims across multiple entities Reconcile payments and investigate discrepancies Manage denials, delays, and disputes Maintain expanded documentation for compliance and audit readiness These requirements represent a substantial increase in administrative burden and complexity compared to the current point-of-sale discount structure. Staffing Implications To support these additional processes, CHN would need to shift staff capacity toward administrative and financial management functions. This includes expertise in pharmacy operations, compliance oversight, revenue cycle management, and data reconciliation. For a safety-net provider, redirecting staff resources in this way has direct implications for service delivery and organizational focus. Systems and Technology Constraints Implementation of a rebate model would require significant changes to CHNs technology infrastructure, including: Enhanced claims tracking and validation capabilities Integration with manufacturer or third-party rebate platforms Expanded reporting and audit systems These changes would likely require new vendor relationships, system upgrades, and ongoing maintenancefurther increasing operational strain. Cash Flow and Financial Risk The shift from upfront discounts to retrospective rebates would materially affect CHNs cash flow. Instead of realizing savings at the time of purchase, CHN would be required to carry higher acquisition costs while awaiting reimbursement. This introduces uncertainty in both timing and amount of rebate payments, complicates financial planning, and increases exposure to denied or delayed claims. For safety-net providers operating with limited financial flexibility, predictability in funding is essential to sustaining patient services. Impact on Patient Care The administrative and financial pressures associated with a rebate model would inevitably affect patient care. Resources currently used to support access to medications, care coordination, and community-based services could be redirected toward managing rebate processes. CHNs ability to respond quickly and effectively to patient needs depends on a stable and efficient 340B structure. Recommendations Given these concerns, CHN respectfully recommends that HRSA: Provide detailed program design elements prior to further consideration or implementation Ensure that any proposed model does not shift administrative or financial burden onto covered entities Preserve access to 340B pricing in a predictable and timely manner Engage directly with safety-net providers to assess real-world operational feasibility before advancing a pilot Conclusion Community Health Net appreciates the opportunity to provide input on this important issue. However, CHN has significant concerns that a rebate-based approach would introduce operational complexity, financial uncertainty, and unintended consequences for safety-net providers and the patients they serve. We urge HRSA to carefully consider these impacts and to work collaboratively with providers to ensure that any future changes to the 340B program strengthenrather than undermineits ability to support vulnerable communities. If you have any questions, please contact Linda Pinnell via email to lpinnell@community-healthnet.com. Sincerely, Community Health Net Craig Ulmer, CEO 1202 State Street, Erie PA 16501 www.communityhealthnet.org
HRSA-2026-0001-2440Adrianne Maddux · Denver, CO, United States2026-04-20T04:00Z32 chars
duplicate of HRSA-2026-0001-2438
HRSA-2026-0001-2441Southwest Care Center2026-04-20T04:00Z6,401 chars
See attached file Re: RFI 340B Rebate Model Pilot Program, HHS Docket No HRSA-2026-03042. Re: Request for Information: 340B Rebate Model Pilot Program HHS Docket No. HRSA-2026-03042 Thank you for the opportunity to comment on the Health Resources and Services Administrations (HRSAs) Request for Information regarding a potential 340B Rebate Model Pilot Program. Costs to Covered Entities A. CURRENT ADMINISTRATIVE COSTS UNDER THE UPFRONT 340B DISCOUNT Our organization is a small community health center with three clinic locations. Each clinic location has an entity-owned, in-house pharmacy within the four walls of the clinic where 340B drugs are purchased and dispensed to eligible health center patients. Our organization does not utilize contract pharmacies to administer any aspect of our health centers 340B program. During the most recent fiscal year, our organizations monthly average is approximately 10,000 340B transactions for 5000 unique health center patients. Current administrative costs include recurring monthly expenses for pharmacy dispensing, compliance management, and enterprise resource planning systems. Our organization does not use a third-party administrator for 340B compliance or operations; instead, all 340B program activities are embedded within our pharmacy department staing model. As a result, the majority of our administrative costs are staing-related and are directly tied to maintaining patient access to medications while ensuring ongoing 340B program compliance and integrity. B. ADMINSTRATIVE COSTS UNDER A POTENTIAL 340B REBATE MODEL PILOT PROGRAM Based on the current operational complexity of our organizations 340B program, it would require 500- 1000 aggregate sta hours across pharmacy operations, compliance, finance, and IT functions over the first 3-6 months, representing approximately 0.3-0.6 FTE during the start-up period. This estimate reflects workflow redesign, sta training, internal control development, and systems configuration required to support rebate-based purchasing and reconciliation. On an ongoing basis, we estimate the rebate model would require an additional 0.5 FTE devoted solely to rebate-based purchasing and reconciliation. Because the 340B rebate model is unprecedented and criteria are undefined, HRSA should recognize and accept that these estimates are inherently uncertain due to the absence of finalized operational rules, drug selection criteria, data standards, and manufacturer participation details. Nonetheless, based on decades of experience operating under the current upfront-discount 340B framework, its clear that even extremely conservative assumptions demonstrate that the rebate pilot would introduce material incremental administrative and operational burden. The administrative and operational costs associated with a rebate model are structural rather than incidental. They arise from fundamental design features of a rebate framework, including retrospective pricing, claim-level data submission, reconciliation, dispute management, and cash-flow tracking. Any attempt to oset these costs would either shift them elsewhere in the system or require the creation of additional administrative mechanisms to quantify, allocate, and monitor such osets. HRSA should recognize that any oset mechanism would either reduce net 340B savings available for patient care, introduce additional layers of reporting and oversight, or fail to fully compensate covered entities for real, ongoing workload activities. The outcome is predictable. For community health centers, the impact of any incremental costs can and will only be adsorbed by reducing patient access to care. C. STAFFING IMPACTS UNDER A POTENTIAL 340B REBATE MODEL PILOT PROGRAM Implementation of a potential 340B Rebate Model Pilot Program would absolutely require additional employees or would cause current full-time employees to reallocate work hours from patient care to perform administrative functions. HRSA has, over the last decade, produced an extensive and consistent body of published research documenting significant stresses aecting the U.S. healthcare system, including workforce shortages, administrative burden, financial fragility, and resulting access challengesparticularly among safety-net and underserved providers. These findings are articulated in multiple HRSA reports and data products, including workforce briefs, projections, and access analyses issued by the National Center for Health Workforce Analysis and the Bureau of Health Workforce. See State of the U.S. Health Care Workforce (2024), Health Workforce Projections: 2023-2028 released in December 2025, Health Professional Shortage (HPSA) data. Considering these findings, this comment urges HRSA to assess whether the structure and premise of this RFI are internally consistent with the agencys own published conclusions. The question of whether a rebate-based 340B model would impose additional burden is largely answered by the agencys existing body of work. The impacts this RFI asks stakeholders to assess are not speculative outcomes dependent solely on implementation design. Rather, they are foreseeable consequences given HRSAs own conclusions regarding system fragility and workforce constraints. Rather than soliciting confirmation of impacts that HRSA has already identified, the agency should ensure that any consideration of a rebate model is constrained byand consistent withits own findings. Failure to do so risks exacerbating the exact workforce and access challenges HRSA has spent years analyzing and attempting to address. In summary, the information provided above demonstrates that the administrative, operational, and staing impacts of a rebate-based 340B model are not theoretical and cannot be meaningfully oset. For community health centers operating with limited margins and documented workforce shortages, any incremental administrative burden diverts resources away from patient care. Accordingly, HRSA should carefully reconsider whether further exploration of a rebate model is consistent with the agencys own workforce and access analyses, which already demonstrate that the safety-net system lacks the capacity to absorb additional complexity without measurable harm to patient access. Thank you for the opportunity to submit these comments.
HRSA-2026-0001-2442Suncoast Community Health Centers Inc2026-04-20T04:00Z87,233 chars
See attached file(s) April 20th, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Suncoast Community Health Centers Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $3,166,238 from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. o Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Best Health Care Under the Sun Our Mission: To Improve the health of our communities. Our Vision: Quality health care for all. Our Values: Integrity Mission before self With empathy and compassion. Weve served Hillsborough County since 1977. As we continue to grow serving Southern and Eastern Hillsborough County, and OB in Lakeland. We are accredited by the Accreditation Association for Ambulatory Health Care (AAAHC) and must uphold strict standards concerning quality patient care. We are a Federally Qualified Community Health Center (FQHC), 501(c)(3) non-profit organization. Suncoast provides care for anyone who wishes to use our services. Patients are seen by appointment or on a walk-in basis provided space is available. 2 What makes us the Best? State-of-the-Art, Full Service Facilities: One Stop Shop: We offer multiple services at many of our facilities including adult and pediatric medical care, dental care, pediatric dental care, x-rays, lab services, pharmacies, podiatry, and more! Skilled, Compassionate Care: Each of our providers, nurses, and medical team members provide exceptional care and service to every one of our patients. Everyone is Welcome! We accept Medicaid HMOs, HCHCP, Medicare, and most insurance plans. Discounts will be given to those who qualify based on family size and household income. I. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Suncoast Community Health Centers Inc in particular, this means it will impact: 76, 904 of 340B transactions or 269,165 patients that our Health Center serves $245,000 of Current admin costs for the 340B program We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. II. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected 3 for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity.1 This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death.2 Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization.3 By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness.4 Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life.5 Impairing access to these drugs could result in exacerbation of the mental health crisis. 1 Richard P, Ku L, Dor A, Tan E, Shin P, Rosenbaum S. Cost savings associated with the use of community health centers. J Ambul Care Manage. 2012 Jan-Mar;35(1):50-9. doi: 10.1097/JAC.0b013e31823d27b6. PMID: 22156955. 2 Cools F, et al. Risks associated with discontinuation of oral anticoagulation in newly diagnosed patients with atrial fibrillation: Results from the GARFIELD-AF Registry. J Thromb Haemost. 2021 Sep;19(9):2322-2334. doi: 10.1111/jth.15415. Epub 2021 Jul 23. PMID: 34060704; PMCID: PMC8390436. 3 Packer, M., et al. (2024). Blinded Withdrawal of Long-Term Randomized Treatment with Empagliflozin or Placebo in Patients with Heart Failure. Circulation. https://www.ahajournals.org/doi/pdf/10.1161/circulationaha.123.065748 4 Substance Abuse and Mental Health Services Administration. (2025). Key substance use and mental health indicators in the United States: Results from the 2024 National Survey on Drug Use and Health (HHS Publication No. PEP25-07-007, NSDUH Series H-60). Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health Services Administration. https://www.samhsa.gov/data/data-we-collect/nsduh-national-surveydrug-use-and-health/national-releases 5 Hauser RA, et al. Long-Term Deutetrabenazine Treatment for Tardive Dyskinesia Is Associated With Sustained Benefits and Safety: A 3-Year, Open-Label Extension Study. Front Neurol. 2022 Feb 23;13:773999. doi: 10.3389/fneur.2022.773999. PMID: 35280262; PMCID: PMC8906841. 4 The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care,6 affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. III. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity- owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. 6 2025 UDA Data, HRSA (hrsa.gov) 5 Sliding Fee Discount: Suncoast Community Health Centers, Inc provided $16,719,009 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Suncoast Community Health Centers, Inc anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Suncoast Community Health Centers, Inc anticipate an increase of $15,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims.7 Suncoast Community Health Centers, Inc estimates an increase of 1.25 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually.8 One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Suncoast Community Health Centers, Inc estimates a cost to hire additional staff to be between $25,000 to $90,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Suncoast Community Health Centers, Inc estimates 25 30 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Suncoast Community Health Centers, Inc urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different 7 Internal NACHC assessment (99 responses). 8 Ibid. 6 software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Suncoast Community Health Centers, Inc estimates a one-time cost of approximate $45,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 76,904 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $65,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Suncoast Community Health Centers, Inc anticipates an estimated One-Time Integration Cost of approximately $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 25 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 pharmacies (total of 26 stores) to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 26 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Southern and Eastern Hillsborough County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already,9 and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021.10 9 Vulnerability Index Approach to Identify Pharmacy Deserts and Keystone Pharmacies | Pharmacy and Clinical Pharmacology | JAMA Network Open | JAMA Network 10 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192?journalCode=hlthaff 7 Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost- effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software.11 Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. A. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. 11 Internal NACHC survey data 8 The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project.12 In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals.13 A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity- owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days).14 Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. 12 HRSA FAQ 13 Such discounts are subject to potential legal and contractual restrictions. https://bphc.hrsa.gov/compliance/compliance- manual/chapter9#footnote10 14https://enlivenhealth.co/blog/year-end-business-health-check-key-metrics-every-pharmacy-owner-should-review 9 Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B15 and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC.16 For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,296,053 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $462,120 to purchase these same drugs at the 340B ceiling price. This represents a 57675% increase in upfront capital required for procurement. 15 https://340bpricing.hrsa.gov/ 16 https://www.cms.gov/files/zip/selected-drug-list-negotiated-prices-also-known-maximum-fair-prices-statutezip.zip 10 This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Suncoast Community Health Centers, Inc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health units that provides primary care services and immunizations to rural migrant areas. Operating Hours: We anticipate needing to reduce our clinic hours 8 per week, specifically impacting our weekend hours, which are mainly the times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 23,552 uninsured patients from rationing their insulin or heart medication. B. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Suncoast Community Health Centers, Inc asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, 11 Suncoast Community Health Centers, Inc estimates its 2027 Annual Rebate Opportunity Cost to be approximately $758,666. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Suncoast Community Health Centers, Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,296,054 by $3,730,865 and by $4,114,091 for year 2026, 2027 and 2028 respectively. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $75,000 annuallyfunds that are currently dedicated to hiring additional nurse practitioners. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Suncoast Community Health Centers, Inc, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. a. Financial Impact of Rebate Denials and Delays Suncoast Community Health Centers, Inc urges HRSA to recognize that without rigorous, non- discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions.17 If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of $2,296,054. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may 17 Application Process for the 340B Rebate Model Pilot Program, 2025-14619 (90 FR 36163) https://www.federalregister.gov/documents/2025/08/01/2025-14619/340b-program-notice-application-process-for-the-340b- rebate-model-pilot-program 12 lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. IV. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. V. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. 13 CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. VI. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Suncoast Community Health Centers, Inc strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments 14 in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Suncoast Community Health Centers, Inc believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Suncoast Community Health Centers, Inc appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Bradley Herremans, CEO/AO, bherremans@suncoast-chc.org. Sincerely, Bradley Herremans, CEO Suncoast Community Health Centers, Inc April 20th, 2025 Chantelle Britton Director Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane Rockville, Maryland 20857 RE: 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program (HHS-2026-03042) Dear Director Britton: On behalf of Suncoast Community Health Centers Inc, I would like to thank the Health Resources and Services Administration (HRSA) for extending the comment deadline to April 20, 2026. This extension has been vital in enabling our organization to conduct a deep-dive analysis of the operational and financial risks to CHCs posed by the proposed rebate model. The 340B program is foundational to CHCs ability to serve the most vulnerable members of our community. However, the proposed shift of responsibility from manufacturers to safety-net providers directly serving patients through a rebate model threatens to destabilize CHC pharmacy operations nationwide. Based on national assessments from NACHC, we know that CHCs are facing staggering impacts: Financial Losses: Nationwide, CHCs report an average loss of $3,166,238 from entity-owned pharmacy operations and a 25% reduction in savings for contract pharmacy arrangements due to the administrative hurdles of manual reconciliation. Projected Cost Increases: CHCs anticipate significant increases in operational costs. National data show that a single mid-sized CHC expects to incur over $3 million in additional costs annually to manage the pilot. Rural Health Center Breakdown: For rural CHCs, these costs are even more devastating. Rural centers invest nearly one-quarter (25%) of their 340B savings in rural-specific infrastructure, such as mobile clinics and telehealth. The Best Health Care Under the Sun Our Mission: To Improve the health of our communities. Our Vision: Quality health care for all. Our Values: Integrity Mission before self With empathy and compassion. Weve served Hillsborough County since 1977. As we continue to grow serving Southern and Eastern Hillsborough County, and OB in Lakeland. We are accredited by the Accreditation Association for Ambulatory Health Care (AAAHC) and must uphold strict standards concerning quality patient care. We are a Federally Qualified Community Health Center (FQHC), 501(c)(3) non-profit organization. Suncoast provides care for anyone who wishes to use our services. Patients are seen by appointment or on a walk-in basis provided space is available. What makes us the Best? State-of-the-Art, Full Service Facilities: One Stop Shop: We offer multiple services at many of our facilities including adult and pediatric medical care, dental care, pediatric dental care, x-rays, lab services, pharmacies, podiatry, and more! Skilled, Compassionate Care: Each of our providers, nurses, and medical team members provide exceptional care and service to every one of our patients. Everyone is Welcome! We accept Medicaid HMOs, HCHCP, Medicare, and most insurance plans. Discounts will be given to those who qualify based on family size and household income. We Strongly Urge HRSA To Exempt CHCs from the 340B Rebate Model Pilot Program. The proposed 340B Rebate Model Pilot Program is a direct threat to CHCs' core mission and a significant departure from the original purpose of the 340B Drug Pricing Program. For over three decades, the 340B program has enabled CHCs to purchase outpatient medications at significantly reduced prices, enabling them to provide affordable and sometimes free medications to millions of low-income and uninsured patients. As congressional intent made clear, the program was created to help safety-net providers stretch scarce Federal resources as far as possible. The proposed rebate model undermines this by placing an immense financial burden on CHCs. By requiring CHCs to purchase medications at full price and wait for rebates, this model would cause significant financial turmoil and directly affect CHCs ability to serve the 52 million patients who rely on us. For Suncoast Community Health Centers Inc in particular, this means it will impact: 76, 904 of 340B transactions or 269,165 patients that our Health Center serves $245,000 of Current admin costs for the 340B program We strongly urge HRSA to exempt CHCs from any rebate model to protect the financial stability of safety-net providers and ensure continued access to care for the most vulnerable patients. Patient Impact Most importantly, a 340B rebate model poses a direct and serious threat to medication access for the vulnerable patients that CHCs serve. For uninsured and underinsured patients who rely on the affordability that the 340B program provides, this model could render critical medications financially out of reach. Patients may be forced to make tough decisions in transitioning to other medications, due to cost or lack of availability, as a direct result of a 340B rebate pilot program. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, and adverse outcomes, particularly for patients managing multiple chronic conditions who have limited alternatives and no other pharmacies close by. We have significant concerns about the impact a 340B Rebate Model Pilot would have on our most vulnerable patients access to life-saving medications. The majority of drugs selected for the MDPNP for 2026 and 2027, and included in the proposed rebate model, are used to manage chronic conditions prevalent in primary care settings, meaning CHC patients will be disproportionately affected. CHCs serve a patient population with a higher burden of chronic conditions compared to private practices, with studies showing a significantly higher prevalence of illnesses like diabetes, hypertension, and obesity. This patient population relies on affordable medications to manage these long-term conditions. We are deeply concerned that implementing a rebate model would cause CHC patients to lose access to essential, life-sustaining therapies. For instance, direct oral anticoagulants (DOACs) such as Xarelto and Eliquis are vital for patients with deep vein thrombosis, pulmonary embolism, and atrial fibrillation. For many of our patients, there are minimal and often less safe alternatives. This is not an optional therapy but a critical tool for survival, as one study showed that discontinuing these drugs leads to a statistically significant increase in the risk of stroke, heart attack, and death. Similarly, the impact on patients requiring SGLT2 inhibitors, such as Farxiga and Jardiance, would be severe. These drugs are a mainstay of primary care for conditions like Type 2 Diabetes, chronic kidney disease, and heart failure, all of which are highly prevalent among our patients. Research has found that even a 30-day withdrawal of these inhibitors increases the annualized risk of cardiovascular death or heart failure hospitalization. By making these drugs unaffordable, the rebate model would effectively deny our patients access to the most effective therapies for managing their chronic illnesses, leading to a predictable increase in preventable hospitalizations. The United States is in the midst of an alarming mental health crisis. Nearly one in four (23.4%) Americans live with a mental illness. Starting in 2027, the MDPNP will include some behavioral health drugs. Vraylar is an atypical antipsychotic; atypical antipsychotics are the mainstay of treatment for Schizophrenia. A rebate model could create regulatory barriers for CHCs seeking to provide this drug to uninsured and underinsured patients. Additionally, the 2027 list includes Austedo, a drug used to treat Tardive Dyskinesia, a common side effect of antipsychotics. Studies have shown that 73% of patients treated with Austedo achieved treatment success, resulting in improved quality of life. Impairing access to these drugs could result in exacerbation of the mental health crisis. The impact on insulin access is particularly alarming and directly conflicts with federal requirements. With over 3 million Americans relying on CHCs for essential diabetes care, affordability of insulin is a matter of life and death. Furthermore, Executive Order #14273 conditions future Section 330(e) funds on CHCs providing low-income patients with access to discounted insulin. There is currently no operational method to provide these discounted medications in a retrospective rebate model. In the proposed model, the wholesaler price file would reflect the full WAC rather than the discounted 340B price. This makes the price unattainable for the patient and precludes CHCs from fulfilling their legal obligation to offer the required discount at the point of care. Imposing a rebate model on CHCs would only weaken the safety-net providers that 52 million Americans rely on for health care. CHCs are required to provide sliding fee discounts to patients with incomes at or below 200% of the federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHCs to provide affordable medications. Without the up-front 340B discount, the drugs included in the pilot would become operationally impossible. This model would create a new and significant barrier, rather than a solution, for our most vulnerable patients, especially those who are uninsured and have limited options for affordable care. Administrative Complexities and Financial Challenges for CHCs The proposed 340B Rebate Model Pilot Program is not only a financial threat to CHCs but also a duplicative and unnecessary administrative burden. HRSA should exempt CHCs from the 340B Rebate Model Pilot because they will incur additional workforce and IT costs to comply with multiple manufacturer rebate requirements. A recent NACHC assessment illustrates that CHCs will incur additional workforce and IT costs to maintain compliance with multiple manufacturer rebate requirements, increasing the burden associated with this rebate pilot program. Similar to navigating manufacturers existing contract pharmacy restrictions, CHCs will need to invest in IT infrastructure upgrades and hire or reassign staff to manage new complexities, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. 340B Rebate Model Operational & Administrative Cost Calculator Description To support CHCs in assessing the financial and operational impact of current manufacturer restrictions and an anticipated rebate model, NACHC worked with their consultant, FQHC 340B Compliance, to create an Operational & Administrative Cost Calculator. The tool aggregates program savings, UDS financial data, staffing, external consulting costs, dispensing/capture activity, and clinicadministered drug tracking models to support operational cost forecasting. CHCs have already experienced steep increases in operational costs given the multitude of manufacturer restrictions, which have now been extended to clinic-administered drugs and entity-owned pharmacies. A refund model will require a significant increase in already-strained operational capabilities. Sliding Fee Discount: Suncoast Community Health Centers, Inc provided $16,719,009 in sliding fee discounts, provided through discounted medications and medical services. We anticipate that our ability to offer sliding fee discounts will decrease significantly under a rebate model. Staffing Impact: Suncoast Community Health Centers, Inc anticipates needing 2.0 additional FTEs to account for the increase in regulatory, operational, administrative, and compliance burden created by a rebate model. External Vendor Costs: Given increased complexity, Suncoast Community Health Centers, Inc anticipate an increase of $15,000 to costs for external support vendors. These vendors may include 340B consultants, legal counsel, program coordination, third-party administrators, electronic medical records, pharmacy software, and reconciliation services. Workforce Impact Below is specific data on the administrative costs that CHCs anticipate, based on thorough planning, review of current business practices, and the costs of implementing new systems and processes. According to an internal NACHC assessment, 47% of responding CHCs estimate needing to hire 0.5 to 1 full-time equivalent (FTE), 36% estimate needing 1 to 2 FTEs, and 7% project needing more than two FTEs to meet the anticipated demand of reporting 340B rebate claims. Suncoast Community Health Centers, Inc estimates an increase of 1.25 FTEs. Additionally, several CHCs estimate the cost to hire additional staff to be between $30,000 to $200,000 annually. One midwestern CHC, serving approximately 12,000 unique patients last year, anticipates annual costs exceeding $3 million, including upfront costs for purchasing drugs in this pilot program, increased labor costs, carrying costs, and potential losses on discounted or expired drugs without rebate recovery. CHCs operate on razor-thin margins, and these additional costs are not an option for many entities. Suncoast Community Health Centers, Inc estimates a cost to hire additional staff to be between $25,000 to $90,000 annually. Depending on the volume of prescriptions a pharmacy fills for the 10 selected drugs, CHCs will face an increased administrative burden in terms of monitoring rebate claims and payments. Suncoast Community Health Centers, Inc estimates 25 30 hours will be required to report 340B rebate claims to a third-party platform, assuming all adhere to the nine drug manufacturers plans. The lack of standardization and likely varying requirements across manufacturers will force CHCs to use multiple internal systems to manage and report the same data, thereby increasing costs and operational burdens. Suncoast Community Health Centers, Inc urges HRSA to require uniformity among eligible manufacturers to mitigate potential administrative and financial burdens associated with receiving timely and appropriate 340B rebates. Pharmacy Software & Third-Party Administration Changes Navigating this pilot requires more than just staff; it requires significant changes to pharmacy software and Third-Party Administrator (TPA) workflows. We encourage HRSA to consider the increased compliance burdens when manufacturers have the flexibility to require varying data submission standards and elements. Additionally, if manufacturers are allowed to select different software platforms, as they currently do with contract pharmacy policies, the administrative burden on CHCs would increase substantially. One-Time Implementation Costs: We anticipate high upfront costs to adapt our pharmacy software, pay for custom dashboard modifications, and design new internal workflows. Suncoast Community Health Centers, Inc estimates a one-time cost of approximate $45,000 will be required simply to reach the baseline of compliance before a single rebate is ever received. Ongoing Operational Fees: Beyond implementation, our TPA and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These are permanent, recurring costs that diminish our 340B savings. Total Cost: For our CHC, which serves 76,904 patients, the total projected increase in expenses, including labor, IT, and carrying costs, is estimated at $65,000 annually. The In-House Pharmacy: The Burden of Deep IT Integration For CHCs that operate their own pharmacies, the rebate model is not a simple accounting change; it is a significant technological disruption. To remain compliant, in-house pharmacy systems will require costly customization to provide real-time, accurate information at the pharmacy counter. System Interoperability: Unlike contract pharmacies that use Third-Party Administrators (TPAs), in-house pharmacies must directly integrate their Electronic Health Record (EHR) and Pharmacy Management System (PMS) with a complex new rebate infrastructure. One-Time Integration Costs: We anticipate high upfront costs to pay software vendors for custom API builds and "Price File" reconciliation tools. Suncoast Community Health Centers, Inc anticipates an estimated One-Time Integration Cost of approximately $75,000. Ongoing Resource Diversion: Staff who currently manage clinical pharmacy services will be forced to spend 25 hours per week manually pulling Purchase Files and Price Files to verify that every rebate check matches the statutory 340B price. The Contract Pharmacy: The Burden of Network Coordination For CHC contract pharmacy partners, the rebate model introduces a new complexity that threatens the very existence of these arrangements. My CHC currently partners with 2 pharmacies (total of 26 stores) to increase access to affordable medications. TPA Reliance and Fees: Navigating manufacturers varying requirements across multiple contract pharmacies requires high-level TPA intervention. We anticipate that our TPAs will pass on the costs of developing rebate-tracking modules to us through increased per-claim fees. Verification Latency: The rebate model creates a reconciliation gap. Our staff must monitor claims across 26 different pharmacy locations to ensure rebates are paid correctly. Risk of Pharmacy Exodus: Because this model shifts the financial risk to the pharmacy, we fear our contract partners will opt out of the 340B program entirely rather than manage the administrative headache. In our region, this would leave patients in Southern and Eastern Hillsborough County with no affordable medication options. Over 17 percent of the U.S. population lives in a pharmacy desert already, and the closings of pharmacies have only exacerbated this, with nearly 30 percent of pharmacies that had been open from 2010 to 2021 closing by 2021. Clinic Administered Drugs: The Burden of New Systems Required Clinic-administered drug (CAD) operations and record-keeping in CHCs are designed in a cost-effective manner that reflects the nuances of CHC billing. Implementing a rebate model for CADs would also require new software, system integration, and staff training. NACHC estimates these costs would range from $30,000 to $50,000 annually and could be much higher, depending on the software. Bundled Payments: The majority of clinic-administered drugs are bundled into the prospective payment system (PPS) billing when administered to patients by CHCs. Because PPS visits are paid at a flat rate, the medications administered in CHCs are often not included on claims billed to payers. Simplified Records: Because CHCs maintain limited inventories of CADs and they are typically not separately billed on claims, it is still common for administration and inventory logs to be maintained on paper, with text documentation in patient visit notes describing what was administered. While the CHCs maintain perpetual inventories and complete administrative records, the fact that the records are often paper imposes the added burden of converting them to electronic data before submitting for rebate. Very few CHC records include electronic medication administration records (eMARs), which are common in hospital electronic medical records (EMRs). Where eMARs are available, they incur an additional cost and often require CHC to pay for a standalone software system. Minimal Risk of Duplicate Discounts: CHCs primarily bill under Medicare Part A, which is not statutorily included in the Medicare Drug Price Negotiation Program (MDPNP). Maximum Fair Prices (MFP) are only applicable to Medicare Part D claims in 2026 & 2027 and then expand to include Medicare Part B claims in 2028. Regarding Medicaid, each state already has mechanisms in place to address duplicate discounts. HRSA should explicitly exclude CADs from any 340B rebate model pilot. At a minimum, such drugs should remain excluded unless and until they are billed as discrete claims by CHCs and a demonstrated duplicate discount risk exists that cannot be addressed through existing statutory mechanisms. Including CADs in a rebate pilot at this stage would impose disproportionate administrative costs, software expenses, and compliance risks on CHCs without corresponding benefits to program integrity or federal oversight. Financial Challenges Under the proposed 340B Rebate Model Pilot, CHCs would be required to purchase drugs at full retail price, also known as the Wholesale Acquisition Cost (WAC). This departure from over 30 years of precedent would drastically diminish CHCs ability to purchase drugs, as the uncertainty of waiting for a manufacturer to approve a rebate would constrain cash flow. CHCs will have to wait to receive their rebate payment after providing medications to their patients. This change will force CHCs to make difficult decisions about how to allocate their limited financial resources, including cutting essential health services, reducing operating hours, or discontinuing services that support patients health outcomes. The proposed 340B Rebate Model Pilot would directly impact CHCs ability to offer patients steeply discounted medications at the point of sale by requiring them to purchase at full WAC pricing upfront. CHCs pharmacies, as well as entity-owned and contract pharmacies, will not have access to the 340B price when the patient needs medication. This will create a very unpredictable process for determining the level of discount and pricing for a patients medication, as the 340B price will no longer be reflected in the pharmacy software from the wholesalers price catalog, since initial purchase prices will be at WAC. The rebate model creates confusion about its impact on CHCs ability to offer sliding-fee discounts at the point of purchase. A rebate model also creates substantial uncertainty about CHCs ability to apply sliding-fee discounts at the point of sale. By statute and regulation, CHCs are required to offer sliding fee discounts for all required and additional health services within the HRSA-approved scope of the project. In line with their mission, CHCs offer flat or sliding-scale discounts on prescription drugs to make them more affordable for low-income individuals. A CHC can adjust the cost of health care services, including medications, based on a patients income and family size. CHCs are particularly worried that the need to purchase drugs at full WAC will cause cash flow issues and potentially lead them to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. While rebates are expected to arrive within 10 days from completed data submissions, the previously proposed rebate pilot allowed covered entities up to 45 days to submit data, meaning the potential time from dispense to rebate can extend to 55 days. The financial impact is further compounded when CHCs have entity-owned pharmacies with physical inventories and must stock their shelves with purchases at WAC. Retail pharmacies typically turn their inventory 10-12 times a year (roughly every 30 days). Assuming a best-case scenario of 15 days to the average 30 days for inventory to turn, CHC pharmacies with physical inventory could be waiting 70-85 days from purchase to rebate under a 45-day data submission cadence. Anecdotal reports from CHC pharmacies suggest a planned cadence of 2-week data submissions for entity-owned pharmacy data. Pharmacies with physical inventory submitting data every 14 days would anticipate a purchase-to-rebate payment time frame of 40 to 55 days. There may be other delays in receiving the full rebate, such as denials, which could create financial strain on CHCs. We appreciate HRSAs requirement for a 10-day timeframe for rebate payments; however, we have concerns about the lack of details regarding enforcement if manufacturers fail to meet this requirement. Based on experience with manufacturer denials related to the current MFP to 340B de-duplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of 14 days from when the status is corrected. We are concerned that in a 340B rebate pilot, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Complicatedly, the rebate amount may not match the initial discount offered to the patient, creating unpredictable financial losses. CHCs must estimate the rebate amount and may undercharge or overcharge patients due to confusion. Furthermore, if the rebate is denied, CHC takes a net loss on the transaction. We respectfully request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within 10 days of both initial and corrected determinations. Lack of access to upfront 340B discounts, along with the high IT/infrastructure costs, will disproportionately impact CHCs and trickle down to patients. It is important to note that many CHCs are currently under financial strain. Nearly half of CHCs operate with fewer than 90 days of cash on hand, and one in four reports has approximately negative five percent (-5%) operating margins. Below, you will find specific data demonstrating the significant increase in financial costs CHCs will incur under a 340B Rebate Model. 340B Rebate Drug Cost Impact Calculator Description To support CHCs in assessing the financial impact of purchasing drugs at the full WAC price, NACHC worked with its consultant, FQHC 340B Compliance, to create another calculator for all CHCs. Financial data and projections are based on a 340B Rebate Drug Cost Impact Calculator, which utilizes CHC-specific purchasing data, 340B and WAC pricing data for the first quarter of 2026 (Q1 2026), and the CMS list of MDPNP selected drugs by NDC. For individual MDPNP Price Applicability Years, the calculator evaluates: Increase Upfront Annual Drug Spend: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026. WAC and 340B prices applied for the overall annual program volume to determine the annual increase in initial drug spend. Cash Flow Impact: WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026 WAC and 340B prices to give overall annual program increase in initial spend reflected at intervals of 30, 45, 60, & 90 days. Represents potential WAC purchase to 340B rebate payment cycles. Inventory models, frequency of data submission, and manual processes for referral claim capture can all influence Covered Entities (CEs) intervals between purchasing a drug at WAC and receiving the Manufacturer Rebate to 340B Ceiling Price. Rebate-Related Opportunity Costs: Based on percentages of loss of prompt pay, purchase volume, and subceiling discounts and anticipated rebate denials as a portion of annual WAC spend (described above). Increase Upfront Drug Spend WAC 340B for 2025 purchases by NDC & volume, reflected in Q1 2026, calculated by NDC, then aggregated at the MDPNP selected drug, manufacturer, and MDPNP Price Applicability Year levels. WAC Purchase to 340B Rebate Payment Wait Period: CHCs must wait to receive a rebate payment after purchasing and dispensing medication to the patient. This delay forces difficult decisions about allocating limited financial resources. Based on our organizations data, we estimate it would cost $2,296,053 to purchase these 10 drugs under the proposed rebate model. Currently, our organization spends $462,120 to purchase these same drugs at the 340B ceiling price. This represents a 57675% increase in upfront capital required for procurement. This increase in costs will have a devastating impact on our organizations ability to maintain an adequate supply of the drugs included in the HRSA 340B Rebate Model Pilot. As previously discussed, our CHC is navigating a difficult financial environment that cannot sustain purchasing drugs at WAC. To cover the upfront cost of purchasing drugs and operationalizing the rebate, Suncoast Community Health Centers, Inc anticipates needing to reduce: Essential Clinical Services: To offset the upfront cost of drugs, we would be forced to scale back non-revenue-generating but essential services, such as our mobile health units that provides primary care services and immunizations to rural migrant areas. Operating Hours: We anticipate needing to reduce our clinic hours 8 per week, specifically impacting our weekend hours, which are mainly the times our working-class and agricultural patients can seek care without losing wages. Workforce & Staffing: The administrative burden of this pilot requires us to divert funds away from clinical staff. For every Rebate Coordinator we are forced to hire, we lose the ability to fund a full-time Community Health Worker or a Behavioral Health Consultant, directly increasing wait times for mental health appointments. Patient Financial Assistance: Our ability to provide medications at zero-pay or deeply discounted rates under our sliding fee scale will be compromised. If the cash is not in our accounts because it is being held by a manufacturer, we cannot provide the bridge support that prevents our 23,552 uninsured patients from rationing their insulin or heart medication. Wholesaler Implications Another concern is that purchasing drugs at full WAC will potentially lead the organizations to exceed wholesaler credit limits, halting their ability to order medications until payments are submitted. For example, some CHCs have suggested that paying for medications upfront at WAC prices would require dipping into limited financial reserves or taking out loans, thereby defeating the purpose of the 340B program. Suncoast Community Health Centers, Inc asserts that taking out a loan or an extended line of credit to fund drug procurement is a high-risk strategy that places our organization in a state of financial limbo. This approach fundamentally defeats the purpose of the 340B programto stretch scarce federal resourcesby diverting patient-care funds toward interest payments, origination fees, and debt service. Relying on credit to float manufacturer rebates is particularly dangerous at a time when all other major revenue sources are unstable. Wholesaler Credit Limits: Purchasing drugs at full WAC will potentially lead organizations to exceed wholesaler credit limits, halting our ability to order medications until payments are submitted. At present, many CHCs are forced to pay invoices before their due dates to remain within their credit limits. Given that CHCs typically operate with extremely limited financial margins, they are often perceived as having higher credit risks, making increases to credit limits difficult or impractical. Discounts: CHCs often receive prompt pay, purchase volume, and sub-ceiling discounts on their drug purchases. Forcing a WAC-upfront model threatens our ability to meet these terms, potentially resulting in the loss of these essential discounts. Due to contractual confidentiality requirements, CHCs are unable to disclose their exact prompt-pay discount. However, Suncoast Community Health Centers, Inc estimates its 2027 Annual Rebate Opportunity Cost to be approximately $758,666. This cost aggregates the estimated financial impact of rebate denials and loss of purchase discounts. Suncoast Community Health Centers, Inc estimates that purchasing the 10 selected drugs at WAC instead of 340B ceiling prices will increase our upfront monthly drug spend by $2,296,054 by $3,730,865 and by $4,114,091 for year 2026, 2027 and 2028 respectively. Every dollar we pay upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. While we wait for rebates, we lose the liquidity necessary to respond to immediate public health crises or facility emergencies. To navigate the rebate model, our organization would be forced to take out a line of credit and/or utilize limited financial reserves. This is not a sustainable solution; the interest costs alone are estimated to be $75,000 annuallyfunds that are currently dedicated to hiring additional nurse practitioners. Forcing CHCs into debt to maintain their drug supply creates an environment of clinical instability. In our region, where patients have no choice but to rely on Suncoast Community Health Centers, Inc, the risk of our credit limit being reached or our reserves being depleted is a direct threat to the communitys safety net. If we are forced into financial limbo, the trickle-down effect is immediate: longer wait times, reduced service availability, and a weakened ability to provide the steeply discounted medications that our 34 million patients across the country depend on. Financial Impact of Rebate Denials and Delays Suncoast Community Health Centers, Inc urges HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B Rebate Pilot allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. If a rebate is denied, the CHC takes a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Given our current volume of the 10 selected drugs, even a conservative 20% denial rate would result in a net annual loss of $2,296,054. This is a sum our CHC cannot absorb, as it represents a direct extraction of resources from our safety net budget. Any reduction in financial resources will directly affect our ability to fulfill the CHC mission of serving all patients, regardless of their ability to pay. The financial harm is compounded by the fact that the 340B price is no longer reflected in the wholesalers price catalog or the pharmacy software at the time of purchase. This forces CHCs to estimate rebate amounts, creating unpredictable financial losses and the potential to undercharge or overcharge patients. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B actual acquisition cost (AAC) billing in fee-for-service Medicaid. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. Without a standardized, transparent, and neutral dispute resolution process, the 340B Rebate Model Pilot functions as an interest-free loan from safety-net providers to multi-billion-dollar manufacturers. These unpredictable denials and delays create serious cash flow issues for CHCs operating on thin margins, which depend on timely reimbursement to sustain services for medically underserved populations. Reconciliation and Rebate Denials Operational Challenges If HRSA proceeds with a rebatebased pricing model, the program must include clear, enforceable operational guardrails to prevent the systematic shifting of financial and administrative risk to covered entities. HRSA must require that any rebate model operate under uniform national standards that limit manufacturer discretion, hold manufacturers accountable, and protect covered entities from financial harm. Recommendations around guardrails include: A presumption that rebate claims are valid unless the manufacturer demonstrates otherwise under statutorily sanctioned duplication of discount prevention (i.e., 340B with MDRP or MDPNP); Standardized, publicly defined denial categories with claimlevel documentation; Rebate payment timing requirements must apply to both initial and corrected determinations. If HRSA adopts a 10day payment requirement, that requirement must run from both the initial determination and any subsequent corrected determination to prevent manufacturers from using dispute processes as a delay mechanism; A clear enforcement framework, including consequences for repeated late payments or improper denials by manufacturers; Manufacturers must bear the burden of establishing that a rebate is not owed; Rebate determinations must align with statutory patient definition: HRSA should explicitly prohibit rebate denial methodologies that rely on manufacturerdefined patient eligibility standards or undisclosed validation criteria. OPA should establish a stakeholder advisory panel to ensure that the feedback and concerns of covered entities are formally and consistently addressed. This panel should include pharmacists with the necessary subject-matter expertise to understand the complexities of pharmacy software, billing, and data components. Existing CHC Compliance Actions CHCs already operate under a comprehensive regulatory framework established through the Health Center Program and the 340B statute to make medications affordable for patients. In alignment with Section 330 of the Public Health Service Act, they utilize a sliding fee discount that adjusts costs based on a patients income and household size, ensuring that no one is denied services due to an inability to pay. CHCs also establish systems for eligibility determination and offer full discounts to individuals at or below 100% of the Federal Poverty Level (FPL). These services would not be possible without the savings generated from the 340B program. CHCs participate in regular Operational Site Visits (OSVs) to verify Health Center Program compliance, and also follow strict 340B compliance protocols, including internal audits, training, and external oversight. CHCs participating in the 340B program are required to report 340B-related information annually through the Uniform Data System (UDS). This includes data on 340B-purchased drugs, associated costs and revenues, and detailed information about the patients served by the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety-net providers that the 340B program was designed to support. CHCs are not the source of misuse in the 340B program; rather, they are national models of compliance. Establishing a National, Neutral Claims Clearinghouse We recommend OPA use a Neutral Claims Clearinghouse, which would produce more accurate deduplication at a tiny fraction of the cost and administrative burden of a rebate model. Compared to HRSAs proposed rebate model, the NCC approach would: Avoid cash-flow and borrowing challenges for CEs by preserving the upfront 340B discount. Substantially reduce administrative burden on CEs by significantly reducing the need for them to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and to manage cashflow issues. Provide manufacturers with the necessary deduplication data within the same 45-day timeframe. Improve rebate accuracy, reducing the time and effort manufacturers and CEs must spend correcting errors. Preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to most CHCs participation in the program. Protect patient access to affordable MFP drugs. If a rebate model were implemented, the resulting cash-flow pressures could force many CHCs to stop purchasing or dispensing MFP drugs altogether. Identify Medicaid Duplicate discounts in Medicaid. An NCC could provide a standardized national approach to preventing duplicate Medicaid discounts by collecting CEs 340B claims data for Medicaid prescriptions and making it available to states. Given the major disruption the 340B rebate program is anticipated to have on CHCs, a system that forces CHCs to provide data that is already accurately and readily available to manufacturers is not only redundant but also adds additional administrative burdens on safety-net providers. It is imperative that HRSA requires manufacturers to leverage existing resources to protect the stability of the safety-net providers that the 340B program was designed to support. Conclusion Suncoast Community Health Centers, Inc strongly urges HRSA to exempt CHCs from any 340B Rebate Model Pilot Program. A 340B rebate program represents a departure from the original intent of the 340B programto allow safety-net providers to stretch scarce Federal resources and provide more comprehensive care. A rebate model would create significant cash flow challenges, forcing CHCs to make difficult decisions about staffing, services, and the range of drugs they can afford to stock. Additionally, CHCs would need to make significant investments in IT infrastructure and staff to comply with rebate requirements and track rebates. It would also create a new barrier for patients, especially uninsured patients, who depend on the up-front 340B discount, making it operationally impossible to provide the sliding fee scale and steeply discounted medications required by law. Suncoast Community Health Centers, Inc believes that a 340B rebate pilot would cause disproportionate harm to patients served by CHCs and other safety net providers. Suncoast Community Health Centers, Inc appreciates the opportunity to respond to this Request for Information on the 340B Rebate Model Pilot, and we look forward to continuing to engage with HRSA on this prominent issue. If you have any questions, please contact Bradley Herremans, CEO/AO, bherremans@suncoast-chc.org. Sincerely, Bradley Herremans, CEO Suncoast Community Health Centers, Inc
HRSA-2026-0001-2443(no commenter metadata)2026-04-21T04:00Z14,615 chars
See Attached Cottage Santa Ynez Valley Cottage Hospital 2050 Viborg Road Solvang, CA 93463 p: 805-688-643 I w: CottageHealth.org April 20, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Via email: thomas.engels@hrsa.hhs.gov Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Santa Ynez Valley Cottage Hospital in Santa Ynez, CA (340B ID: CAH051331), we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." Congress's intention in creating the 340B program was for "manufacturers to provide discounts to safety-net hospitals at the time of sale in order `to stretch scare federal resources as far as possible.'" Am. Hosp. Ass'n v. Kennedy, 164 F.4th 28, 31 (l st Cir. 2026). As explained below, any rebate mechanism will impose enormous, unnecessary costs and burdens on Santa Ynez Valley Cottage Hospital ("SYVCH" or "Hospital") that will far outweigh any benefits that might come from it. Instead of using its resources to provide for underserved patients and community needs, the Hospital will be forced to spend its limited resources to create new infrastructure to process and monitor rebates that benefit pharmaceutical manufacturers. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a The Cottage Health mission is to provide superior health care for and itnprove the health ofour communities through a commitment to our core values of excellence, integrity. and compassion. Page 2 of 5 discount mechanism. HRSA must prioritize the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Santa Ynez Valley Cottage Hospital has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Santa Ynez Valley Cottage Hospital has done its best to provide detailed answers. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimate have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more disputes over delays and denials, and therefore less money that Santa Ynez Valley Cottage Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Santa Ynez Valley Cottage Hospital to spend significant sums on new administrative costs. When we chose to participate in the 340B program, SYVCH understood that we would incur some reasonable administrative costs. We designed our hiring, operations, budgets and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. It's difficult to estimate the impact of the proposed rebate program on hospital operations, but we know from our limited experience with manufacturer's rebate processes that additional time, staff, technology and systems are required (all of which come with additional unreimbursed costs). Specifically, new staff, systems and technology are needed to scrub and submit data, track and monitor reimbursements, resolve data issues and ensure compliance with regulatory requirements. These are net-new functions that do not have current staffing, technology, processes (or funding) to perform. New Tech: Currently, there are no 340B rebate arrangements at Santa Ynez Valley Cottage Hospital. The Hospital has relationships with a few contract pharmacies that fill prescriptions for nine (9) 340B eligible drugs. Manufacturers of these drugs require data submission through 340B ESP (approximately 50 prescriptions per month). The process for submitting data is completely manual as 340B ESP's submission portal requires claims data in a specific format and that portal does not integrate with our Electronic Medical Record (EMR) or 4921-0508-1250, v. 2 Page 3 of 5 Third Party Administrator (TPA) data systems. Processing 50 claims manually is manageable, but only because it is such a small volume. Expanding the scope and breadth of data submission requirements into a rebate modd for ten (10) 340B eligible drugs is not workable with existing information technology systems. 340B ESP's portal requires a manual upload in a format that is not native to the Hospital's EMR or to the system used by the TPA. This means that data from these systems needs to first be extracted and then input into a format acceptable to 340B ESP, which uses different values, abbreviations and nomenclature from the other systems. Once formatted, the data must be reviewed and validated before it is uploaded. Hospital does not have existing technology that can perform the data extraction and upload without significant involvement of staff. If this function is ever to be automated, Hospital will need to procure new technology, which may or may not exist, but which will certainly add to the program administration costs significantly. New Staff: A new rebate system will also require new staff. In addition to new FTEs to manage the data upload and validation, the Hospital will also require finance FTEs to monitor rebate payments, audit and compliance personnel to monitor compliance and manage disputes with manufacturers (either lawyers, consultants or employees) and IT personnel to build interfaces and maintain systems. With 10 new medications there are an estimated 1,350 340B units of these medications ordered weekly. With an unknown amount of audit requests from manufacturers, it is difficult to determine how many audits will be needed on a weekly basis. Based on historic audit requests, we estimate 50 audits per week. Each audit takes approximately 45-60 minutes, or an additional 200 staff hours per week. Unfortunately, 340B staff are hard to recruit, so any new position would require approximately 3-6 months to recruit and an additional 3-6 months to train. None of these new staff will generate offsetting revenue, so the proposed rebate program is purely a cost driver. As the AHA has noted, the rebate program is "a `solution' in search of a problem." And this "solution" generates unnecessary costs. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data- related burdens on 340B hospitals like ours. For example, both insisted that providing claims data isn't a burden to hospitals because already provide this information through 340B ESP. Time and experience with 340B ESP has proven this premise to be wrong. The proposed 340B Rebate Model Pilot Program would change current data collection activities because the requested data is not currently being collected on medical claim forms. As mentioned previously, the IT burden to extract the requested data from medical claims into the potential rebate model takes countless hours without standard data fields and automated extraction tool. At Santa Ynez Valley Cottage Hospital, data for processing rebates is contained in 5 different systems (e.g., split-billing software, electronic medical record, and 3 third-party administrators' systems). Aligning data from these fields requires manual validation on an ongoing basis. Further, 4921-0508-1250, v. 2 Page 4 of 5 in our experience, each manufacturer requires custom data fields, which adds more effort to the process of extracting, formatting and submitting data. There is no uniform data set required, so it is impossible to develop a standardized extraction. Aside from the technical limitations, the agreement/terms and conditions for use of the 340B ESP platform do not comply with health care privacy laws and regulations. These terms and conditions were presented on a "take it or leave it" basis, meaning that covered entities had to choose between access to 340B discounted medications or championing patient privacy. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Santa Ynez Valley Cottage Hospital to effectively provide drug companies interest-free loans while waiting to receive the discounts that we are owed under the 340B statute. Even if drug companies paid rebates within 10 days, delayed receipt of the payment will have meaningfiil impact on our institution and the patients we serve. The 10-day payment delay would require Santa Ynez Valley Cottage Hospital to increase cash on hand and spend more money to access drugs. This would require a shift of cash holdings from interest bearing accounts (a cost of 3.45%, an amount that compounds). The cost would be further compounded by any delays related to manufacturer denials as the Hospital would have to spend weeks or months resolving disputes with manufacturers. Additionally, as invoices from wholesalers must be paid within 7 calendar days, even in a best case scenario where rebates are received within 10 days, the Hospital would still be floating the manufacturer for 3 days. Thus, the proposed 10 calendar days to receive rebates would generate additional expense to Santa Ynez Valley Cottage Hospital. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. First, Second Sight refused to negotiate any of their Terms and Conditions, which include items such as being able to disclose our data without our consent. They refused to engage in conversations about privacy concerns taking a "take it or leave it" approach. Additionally, in our experience using Beacon for the 340B ESP platform for contract pharmacy claims, Beacon has extremely poor customer service. There is no phone number for a help desk (and no contract person/account representative to contact directly). Rather, users are required to send an email to a generic "help" account and await a response. In our experience, e-mail requests take weeks if not longer to receive a response. The lack of responsiveness or assistance for use of a mandatory claims processing system is unacceptable. Yet hospitals have no power to object. 340B ESP and Beacon are the rules of the road for contract pharmacy clairns. Access to 340B discounted medications will surely diminish if this system is expanded to more eligible medications. There will simply be too much friction to try. 4921-0508-1250, v. 2 Page 5 of 5 Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Santa Ynez Valley Cottage Hospital, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Santa Ynez Valley Cottage Hospital respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Santa Ynez Valley Cottage Hospital and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sin rely, Stacy Bratcher Senior Vice President & Chief Legal Officer Cottage Health cc: Senator Adam Schiff Representative Salud Carbajal Chad Golder, American Hospital Association 4921-0508-1250, v. 2
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See Attached The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Valley County Health System Progressive Care with Compassion Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Valley County Health System, Ord, Nebraska, we are grateful for the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Valley County Health System, Ord, Nebraska that far outweighs any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Valley County Health System, Ord, Nebraska has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Valley County Health System, Ord, Nebraska has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026, Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Valley County Health 1 2707 L Street Ord, NE 68862 308.728.4200 888.252.3874 fax: 308.728.7809 www.ValleyCountyHealthSystem.org System, Ord, Nebraska can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Valley County Health System, Ord, Nebraska to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Valley County Health System, Ord, Nebraska understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands added resources, imposing considerable additional costs and burdens on our institution that go far beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. As a stakeholder invested in the integrity of the 340B program, Valley County Health System, Ord, Nebraksa, believes that replacing the long-standing upfront discount model with a rebate-based system will severely jeopardize the ability of covered entities to serve underserved, rural, and vulnerable patient populations. Implementing the HRSA rebate model is expected to increase administrative and operational costs significantly. 1. Severe Financial Disruption and Cash Flow Crisis The 340B program is designed to allow safety-net providers to "stretch scarce resources." Requiring hospitals and clinics to purchase drugs at the full wholesale acquisition priceand wait months for a rebatecreates an untenable cash flow crisis. This "float" model forces nonprofits to function as short-term lenders to pharmaceutical manufacturers, diverting funds from patient care, staff salaries, and community services. 2. Increased Administrative Burdens A rebate model introduces immense administrative complexity, including new data collection requirements for rebates, validation of claims, and navigating manufacturer- specific IT platforms. Our staff is already overstretched, and this model would require significant investment in tracking and disputing late or denied rebates, adding unnecessary cost to the safety net. 3. Negative Impact on Patient Access to Care When financial resources are drained by the increased cost of drugs under a rebate system, patient care is directly affected. Hospitals may be forced to reduce services, limit access to expensive drugs, or decrease staffing levels, which ultimately undermines the statutory purpose of the 340B program. 4. Failure of Previous Pilot Attempts 2 The courts have already intervened to halt previous attempts at this rebate model due to a lack of evidence that the agency considered the disastrous impact on providers. The "threadbare" administrative record of previous attempts suggests that this model is legally and operationally unsound. Staffing Impacts Under a Potential 340B Rebate Program. Valley County Health System, Ord, Nebraska does not currently have the staff needed to comply with a Rebate Program. 1. The rebate model pilot will require Valley County Health System, Ord, Nebraska to devote, on average, up to two full-time equivalents to manage the entire rebate model process. Assuming each full-time employee works 40 hours/week, that would result in nearly 4,160 hours across two full-time employees per year for our hospital to comply with the rebate model. Spending these 340B dollars on administrative compliance with a pilot program, rather than using those funds to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services, is defeating the program's purpose. This is not feasible for our small Critical Access Hospital with the previously mentioned financial strain we would incur. 2. Valley County Health System, Ord, Nebraska would also have to partner with a 3rd party vendor for assistance and guidance to navigate all the proposed changes. This additional fee for service expenditure will create even greater burdens on survivability of rural healthcare facilities. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Valley County Health System, Ord, Nebraska has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. The shift to a rebate model necessitates substantial modifications to existing 340B pharmacy compliance software and EHR systems to manage the following: .1. Claims-Based Receiving System: A new system to track purchased drugs at market price and match them with dispensed claims to calculate expected rebates. 2. Data Normalization and Validation Engines: Systems to align varied formatting between contract/in-house pharmacies and the manufacturer's rebate platform. 3. Dispute Management Tools: Infrastructure designed to handle manufacturer denials and reconcile payments. 3 4. Enhanced Audit Trails: Upgrades to archives to maintain long-term, transaction level records to prove eligibility and prevent duplicate discounts. 5. System Development/Procurement (One-Time): Highly likely involving significant software procurement for updated TPA services. 6. Integration (One-Time): Costs for modifying internal EHR software to feed data to TPA plafforms. 7. Maintenance & Staffing (Recurring): Increased staffing for handling manual data validation and ongoing software licensing for new audit/adjudication tools. Providing medical claims data for a 340B rebate model is extraordinarily complex because TPAs often lack direct, automated feeds into EHR systems. 8. Lack of Direct Feed: Without a direct connection, staff must extract data from the EHR, scrub it to meet 340B eligibility criteria, and manually upload it to the TPA. 9. Data Normalization: Data from different providers must be manually validated to confirm it belongs to the covered entity. 10.Manual Reconciliation: Staff must reconcile discrepancies between the pharmacy dispensing data and the medical encounter data to avoid duplicate discounts. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. The 340B rebate model requires covered entities (CEs) to submit detailed, patient-level claims data to manufacturers to receive rebates, moving away from point-of-sale discounts. Data is primarily transmitted to drug manufacturers and third-party IT platforms like Beacon Jmanaged by Second Sight Solutions), raising significant data privacy and security concerns regarding PHI handling and potential misuse of data to limit 340B eligibility. The complexity of data collection and where the data goes both initially and the final destination are all quite concerning Manufacturer Portals & Third-Party Vendors: Data is submitted to pharmacy benefit managers (PBMs) or third-party vendors (e.g., Beacon) used by manufacturers to manage rebates. 4 2. Manufacturer Audit Teams: Manufacturers use this data to identify "duplicate discounts"checking if a 340B drug was also claimed under Medicaid or Medicare Part Dwhich could be used to justify restricting 340B pricing. 3. HRSA/Government (Potential): Information collected in the pilot program may be analyzed by HRSA to assess the program's efficacy. 4. The Data Security Risk: Concerns exist that sharing detailed prescription data (Rx number, date of service) creates HIPAA compliance risks, as this data can be utilized by manufacturers to identify and reject claims, creating a burden on CE resources. Data Security That is NOT offered by Rebate Program: a. Data Minimization: Limit submitted claims data to only the minimum necessary elements for rebate verification, such as Date of Service, RX number, 11-digit National Drug Code (NDC), Provider ID, and pharmacy identifiers. b. Standardized, Centralized Platform: Establish a centralized, uniform platform managed by HRSA or a neutral third party rather than allowing disparate manufacturer-specific IT systems, reducing the security risks associated with sharing data across multiple platforms. c. HIPAA and Data Privacy Compliance: Ensure all IT platforms and vendors comply strictly with HIPAA regulations, including robust encryption for data in transit and at rest. d Limiting PHI Exposure: Utilize hashed or de-identified data for patient identifiers where possible to prevent unnecessary exposure of Protected Health Information (PHI) to manufacturers. e. Strict Access Controls: Implement stringent access control procedures, including multifactor authentication (MFA) for any personnel accessing the data submission systems. f. Data Retention/Destruction Policies: Establish clear policies for the retention and prompt destruction of patient data once the rebate has been finalized and audited. 5. Massive Administrative Burden: CEs must manage complex, timely, and frequent data submissions, putting a strain on resources. 5 6. Confidentiality Risks: Sensitive, patient-level claims data is shared with competitors (manufacturers), leading to concerns over how this data might be used outside the scope of the pilot. 7. Payment Delays: The model requires payments within 10 days, but concerns persist about manufacturers exploiting the data to delay or deny rebates due to proposed collection process. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Valley County Health System, Ord, Nebraska to effectively provide drug companies with interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, which delayed discount will have meaningful impact on our institution and the patients we serve. Adverse Impacts of These Additional Costs And Burdens. All these many different costs and burdens add up. Unfortunately, that means that Valley County Health System, Ord Nebraska will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. Critical Projects Possibly Paused or Canceled 1. Expansion Initiatives: Urgent renovations, pharmacy expansions, and the construction of new satellite clinics in underserved areas would be canceled due to liquidity constraints. 2. Quality Improvements: Initiatives aimed at reducing hospital-acquired conditions or implementing new EHR modules for better patient safety might be stalled due to lack of capital. 3. Discharge Support Programs: Programs designed to reduce readmissions by ensuring patients have medication upon leaving would be eliminated to cut costs. 4. Access to Life-Saving Drugs: Vulnerable patients, especially those who are uninsured, may be unable to receive, or face higher costs for, lifesaving medications. 5. Worse Health Outcomes: Reduced medication affordability and reduced access to specialists will lead to deterioration of managed conditions, increasing readmissions and mortality for underserved populations. 6 6. Loss of Essential Services: For many communities, 340B hospitals are the only source of specialized care. A 340B reduction could force closures or severe downscaling of services, leaving residents with "care deserts". The 340B rebate model converts a health-care-focused program into a finance-driven administrative burden. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable considering the Secretary's express statutory authority to provide for discounts via 'rebate or discount.- Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Valley County Health System, Ord Nebraska reasonably relied on this history when designing its internal operations, staffing, third- party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. Lacking completeness or existence of the following: 1. Business Associate Agreements (BAAs): Any third-party administrator (TPA), vendor, or clearinghouse used for managing claims, calculating rebates, or facilitating data submission must execute a HIPAA-compliant BAA. 2. Data Use Agreements (DUAs): Specific agreements should define how manufacturers and their agents can use, store, and share the data submitted to them, strictly prohibiting the use of this data for marketing or other unrelated purposes. 3. Confidentiality and Security Clauses: Contractual requirements that mandate TPA compliance with cybersecurity best practices and prompt notification of any breaches to both the covered entity and HRSA. 7 4. Audit Rights: Agreements that explicitly allow covered entities to audit the security practices of third-party vendors managing their rebate data Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clearthat drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Valley County Health System, Ord Nebraska, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all these reasons, Valley County Health Ord, Nebraska respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Valley County Health System Ord Nebraska, and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. SincerPly, a, 7 Zig- 4.(-e--,61(\ Ashley odward CEO Valley County Health System, Ord, Nebraska 8
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See Attached April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration 5600 Fishers Lane, Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program (91 FR 7287) Mr. Engels, On behalf of the CMS Tribal Technical Advisory Group (TTAG), I write to respond to the Health Resources and Services Administration (HRSA) Request for Information (RFI) for the 340B Rebate Model Pilot Program (91 FR 7287). TTAG recognizes that this request follows prior stakeholder concerns regarding implementation of a 340B rebate- based structure, proposed to strengthen oversight and address duplicative discounts. In this context, TTAG supports efforts to strengthen program integrity and financial accountability. However, HRSA should endeavor to achieve its intended goals while preserving the 340B program's core discount structure. The TTAG is very concerned that many tribal healthcare programs do not have funds available to pay for drugs up front and then obtain a rebate, and as a result, will be shut out of the 340B program if it moves to a rebate model. TTAG writes to reiterate that the program trajectory of a rebate-based model presents unresolved financial, operational, and administrative risks that require a full evaluation through formal Tribal Consultation and Urban Confer before further advancement, given its anticipated impact on participating Tribal health facilities. Impacts on the Indian Health System Necessitate Tribal Consultation and Urban Confer Foremost, the proposed rebate model has clear implications for Tribes and UIOs that warrant formal engagement through Tribal consultation, pursuant to Executive Order 13175 and the Department of Health and Human Services' Tribal consultation policy, and Urban Confer. This shift from an upfront discount structure to a retrospective rebate model represents a fundamental change to how the 340B program operates and directly affects the financing and delivery of services within Tribally operated and UIO facilities. TTAG is not aware of any formal engagement on the 340B restructuring and respectfully requests that HRSA initiate Tribal consultation and Urban Confer before advancing any rebate-based framework. The scale and structure of the 340B program underscore the significance of any policy change affecting it. In 2024 alone, covered entities purchased approximately $81.4 billion in outpatient drugs through the 340B program, reflecting its central role in CMS TTAG Letter to Administrator Engels Re: RFI: 340B Rebate Model Pilot Program (91 FR 7287) April 20, 2026 Page 2 of 3 sustaining safety-net care delivery nationwide. HRSA explicitly recognizes that the program enables covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."1 Within this framework, Tribal, IHS-operated entities, and UIOs are recognized participants, with Tribal contract and compact facilities accounting for approximately $87.0 million in 340B purchases in 2024. Although smaller in aggregate volume, this participation reflects the program's inclusion of federally funded Tribal health systems and UIOs as beneficiaries of the national safety-net infrastructure. Ensuring financial accountability within a system of this scale is essential. However, integrity mechanisms cannot come at the cost of the program's ability to function as a reliable financing tool for safety-net providers or the government's trust responsibility to Tribal Nations. Rebate Models are Incompatible with the Indian Health System TTAG remains concerned that the proposed rebate model is financially incompatible with the Indian health system. Indian Health Service (IHS), Tribal, and UIO (I/T/U) facilities operate within a chronically underfunded system that relies heavily on third- party revenue. Many Tribal facilities and UIOs rely on the immediacy of 340B savings to support pharmacy operations, maintain cash flow stability, and sustain access to essential and high-cost medications for patients. The programmatic shift to post- purchase reimbursement, in which providers must cover full acquisition costs upfront with no guarantee of timely or complete rebate recovery, introduces significant financial strain and risk for Tribal and UIO facilities due to the timing gap between acquisition and repayment. The absence of standardized and enforceable manufacturer rebate processes compounds these concerns. In the absence of enforceable standards governing manufacturer reimbursement timelines, compliance, or a clear appeals process for denied claims, this structure introduces significant revenue uncertainty that disproportionately impacts resource-constrained Tribal and UIO facilities. If rebates are delayed, denied, or inconsistently processed, providers must absorb those costs, resulting in direct impacts on facility revenue and financial stability. From a program integrity perspective, this structure increases complexity, creates additional junctures of failure, and shifts financial risk onto providers least able to absorb it. TTAG is also concerned about the administrative feasibility of a rebate model for Tribal facilities and UIOs. The rebate pilot would require additional claims data submission, transaction tracking, and reconciliation across multiple manufacturers and systems. Many Tribal pharmacies, health systems, and UIOs often operate with limited staffing and infrastructure capacity, and these additional requirements would divert resources away from patient care and essential clinical operations. Overextending 1 Health Resources & Services Administration. (2025, December). 2024 340B Covered Entity Purchases. 340B Drug Pricing Program. https://www.hrsa.gov/opa/updates/2024-340b-covered-entity-purchases CMS TTAG Letter to Administrator Engels Re: RFI: 340B Rebate Model Pilot Program (91 FR 7287) April 20, 2026 Page 3 of 3 already limited staff can impact program data accuracy and compliance and threaten overall program participation. TTAG supports efforts to strengthen program integrity and accountability through mechanisms that preserve point-of-sale discounting while minimizing the burden on participating entities. Approaches like standardized claim validation or centralized verification processes may offer more effective paths forward if designed to operate in real-time, ensure consistency across manufacturers, and avoid shifting financial and administrative responsibility onto providers or patients. Any oversight-focused changes should maintain the core 340B structure, ensuring that discounts are available at the point of purchase and that clear, uniform rules and mechanisms for appeals are in place without disrupting service delivery. Conclusion For these reasons, the TTAG strongly urges HRSA to exempt Indian Health Service, Tribal, and UIO providers from any rebate-based 340B pilot model. TTAG emphasizes that any disruption to the 340B program has direct implications for American Indian and Alaska Native patient access in areas that are already largely unserved. 340B savings support access to essential and high-cost medications in Tribal and Urban Indian communities. Therefore, we urge HRSA to conduct formal engagement with Tribes and UIOs through Tribal Consultation and Urban Confer before further consideration or implementation of a rebate model in place of the existing 340B discounts. Sincerely, W. Ron Allen, TTAG Chair Chairman, Jamestown SKlallam Tribe Cc: Mark Cruz, Senior Advisor to the Secretary Rachel Ryan Pedersen, Acting Director, CMS, DTA
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See Attached 1 TO: Mr. Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services Ms. Chantelle Britton Director Office of Pharmacy Affairs, Health Resources and Services Administration U.S. Department of Health and Human Services FROM: Colorado Community Health Network DATE: Apr. 20, 2026 RE: Comments on HRSAs Request for Information: 340B Rebate Model Pilot Program, HHS Docket # HRSA-2026-03042 Colorado Community Health Network (CCHN) is the membership association for the states 21 Federally Qualified Health Centers (FQHCs, also known as Community Health Centers or CHCs), which includes nineteen grantees and two Look-Alikes. As covered entities, all 21 Colorado CHCs participate in the 340B Drug Discount Program, providing access to affordable pharmaceuticals through onsite or contract pharmacies. The proposed rebate model is not an appropriate nor efficient manner to operate the 340B program, as it pulls limited funding and staff time away from patients and towards management of the rebate model. The proposed model would inhibit patient access to affordable prescription medications. CCHN requests HRSA exempt all CHCs from any proposed 340B rebate model, including the one under consideration in HRSAs Request for Information (HHS Docket # 2026- 03042). CCHN opposes any effort by HRSA or the Department of Health and Human Services (HHS) that would create further administrative barriers or financial burdens in the 340B program. CHCs have effective controls in place to ensure 340B discounts are offered to CHC patients, and to avoid duplicate discounts. Ultimately, a 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi-billion-dollar manufacturers. I would like to thank HRSA for extending the comment deadline to enable our organization to conduct the necessary deep-dive analyses of the operational and financial risks to CHCs posed by the proposed 340B rebate model. However, it is not feasible to respond individually to each question, so we have organized our comments to address the most pertinent of the seven main categories that HRSA outlines in the RFI and for which the agency requests feedback and perspective from 340B covered entities and other affected stakeholders. 2 RFI Target Area 1: Costs to Covered Entities Financial impacts With the information available, it is difficult to estimate the cost to Colorados CHCs if they are forced to administer their 340B program through a rebate model. This estimation is made more challenging with the lack of detail on exactly which drugs would be included. As a proxy, in 2024, if the eight CHCs who responded to CCHNs data request had purchased the same volume of the ten drugs currently part of the Medicare Fair Price (MFP) negotiations without the 340B discount, their upfront Wholesale Acquisition Cost (WAC) would have increased by over 7,200%. In 2026, if the rebate model is expanded to the entire 340B program, CHCs in Colorado would face an average increase in upfront cost of over $11 million1. These estimated increases will likely be even greater, because they do not include the necessary investments in IT system upgrades, staffing cost and time, and other administrative expenditures CHCs would need to maintain compliance. Further exacerbating the impact of the proposed rebate model is the fact that, across Colorado, CHCs already are facing unstable and challenging financial realities; 70% of CHCs had negative or breakeven financial operating margins in 2024 and 2025. This will make it impossible to pay the full cost of pharmaceuticals up front. If this rebate model goes forward, Colorado CHCs are planning to: Scale back non-revenue-generating, but essential clinical services, pharmacy services, behavioral health care, and nutrition and wellness education programs; Reduce weekly clinical hours, impacting access to care for patients who juggle long work hours and may only be able to come in for care during extended hours or weekends; Divert and reallocate support staff and funds away from clinical teams to manage the rebate model; and Reduce the discounts passed onto patients, which will further reduce the affordability of prescriptions for them, and could result in poorer health outcomes, due to decreased medication access or potential patient rationing of their prescriptions. Pricing impacts By statute and regulation, CHCs are required to offer sliding fee discounts for all health care services within their HRSA-approved scope of project, including pharmacy services, for patients at or below 200% of the Federal poverty guidelines.2 The proposed 340B rebate model pilot program would directly impact the ability of CHCs to offer patients steeply discounted medications at the point-of-sale by requiring them to purchase medications at the WAC pricing. CHCs currently rely on wholesaler price files to determine acquisition costs and calculate patient discounts in real time. Pharmacy software systems continuously overwrite manually added 340B price files, which is what CHC pharmacies will be forced to accommodate. Further, CHCs use this 340B ceiling price to calculate the accurate discounted patient price, at the pharmacy counter. When the price shown in the pharmacy system is the WAC price, CHCs will not be able to accurately calculate a drugs 340B price for the patient. The rebate model generates uncertainty about its impact on CHCs ability to offer sliding fee discounts at the point of sale and forces them to estimate discounts without knowing whether or 1 Data reported to CCHN by Colorado CHCs 2 42 U.S. Code 254b(k)(3)(G)(i) 3 when a rebate will be paid. This exposes CHCs to additional financial losses if that rebate is denied, delayed, or different than the expected amount entirely undermining the federally required sliding fee discount obligations. Additionally, the lack of real-time 340B pricing presents challenges for compliance with 340B Actual Acquisition Cost (AAC) billing in fee-for-service for Colorados Medicaid program. This may lead to increased Medicaid costs and potential state-level claw-backs, creating a second layer of financial liability for the CHC. When the first rebate model was introduced in the fall of 2025, Colorados Medicaid office indicated that CHCs would be expected to bill the 340B cost for the rebate drugs; when the pharmacy systems can only pull in the WAC pricing file, CHCs must then manually override to include the 340B price and, therefore, ensure proper billing. Without a standardized, transparent, and neutral dispute resolution process, the 340B rebate model pilot program would function as an interest-free loan from safety net providers to multi- billion-dollar manufacturers. Patient impacts While the RFI asks for data on the number of 340B transactions an organization made in the most recent fiscal year, this is an incomplete request: HRSA will not be able to fully and completely grasp the scope of the 340B program, and the reliance that CHCs have on it, solely by asking for information on the number of 340B drugs recently purchased. To more accurately reflect the importance of the 340B program to CHCs across Colorado and their patients, CCHN asked CHCs how many individual eligible patients received prescriptions. More than 250,000 individual eligible patients received prescriptions from the fourteen CHCs that responded to CCHNs survey. Those CHCs spent $36.4 million on those medications, which would have cost $279 million if the CHCs had to purchase them at the upfront WAC. Across the CHCs, they would see an average percentage increase of 468% in upfront costs across their entire 340B program. For many of the patients that CHCs serve, who often manage multiple chronic conditions, the 340B program is a lifeline to affording their medications. The majority of the drugs selected for the Medicare Drug Price Negotiation Program (MDPNP) in 2026 and 2027 and of which some were previously indicated in an earlier proposed rebate model are used to manage chronic conditions prevalent in a primary care setting. This means CHC patients will be disproportionately affected. These patient populations rely on affordable medications to manage long-term conditions, like diabetes, hypertension, and arthritis. Due to cost and availability constraints of these drugs created by the 340B rebate model, patients may be forced to make difficult decisions about transitioning to other medications and may experience reduced access to their first-line treatments. These forced therapeutic interchanges introduce real clinical risk, including medication nonadherence, treatment delays, medication rationing, and adverse outcomes, particularly for those patients managing multiple chronic conditions who have limited alternatives. For patients who have spent years achieving stability on a given medication regimen, the prospect is a direct threat to their health, safety, and trust in the health care system. 4 If a rebate model goes into effect, pharmacies across the state will need to reconsider drug purchasing practices. With the expected upfront cost increase equating to the drugs WAC, it will not make fiscal sense to maintain a stock of certain medications. CHCs have considered no longer carrying these particular medications, carrying them in a severely limited supply, or shifting to purchase them only after the prescription has been made by the patients provider, requiring the patient to return to the clinic or their local pharmacy to pick it up. This fundamental change shifts CHCs away from the same-day model of care they currently operate under, and which serves patients best. Managing multiple chronic conditions, with different medication schedules, is already a complex task. Any changes the proposed rebate model could require patients to return to the CHC or local pharmacy multiple times a week to pick up prescription(s) is too large a burden. Imposing a rebate model on CHCs would weaken the safety net providers that more than 52 million Americans, including more than 850,000 Coloradans, rely on for health care. As stated previously, CHCs are required to provide sliding fee discounts to patients at or below 200% of the Federal poverty guidelines. The same patients who need access to discounted medical services also depend on CHC pharmacies and providers for those affordable medications. Not only does the upfront 340B discount provide a lower, more affordable price for patients, but the savings generated from the 340B program pricing enables CHCs to sustain these lower prices and sliding fee scales for other health care services. The rebate model would create a new and significant barrier, rather than a solution, for the most vulnerable patients, particularly those who are low-income and have insurance with high copayments or deductible or are uninsured, further limiting their options for affordable care. Staffing impacts The administrative time required to collect, collate, and review the data prior to submission to each individual manufacturer, potentially apply for loans, and track the status of the rebates will be onerous and burdensome. Of the fifteen CHCs in Colorado who responded to CCHNs survey in time for submission of this public comment, 87% responded they would require more staff time and dollars to adequately manage a rebate model than their current pharmacy program. To sufficiently and adequately track the submission of the data and the receipt of rebates across in-house and contract pharmacies, it would require an average of about one additional full-time-equivalent (FTE), or about 1,962 staff hours per year, at a cost of nearly $100,000 annually, for each CHC. For one of the larger CHCs, they report this will cost $500,000 per year, stating, if the rebate model went into effect, we would have to lay off employees in order to cover the WAC cost, which will contribute to [a loss in] patient access to care. We would see a negative impact to operations, by having to close locations. Many of these CHCs are also struggling to balance current operations with breakeven or negative margins and may lack the liquidity necessary to be able to hire additional staff. Every FTE that a CHC must hire to participate in the rebate program is a patient support role they will no longer be able to fund, like community health workers, health educators, patient navigators, or translators. Every hour that a pharmacist spends reconciling rebate claims is an hour not spent on medication counseling. Every dollar spent on compliance and administration is a dollar no longer available for wraparound services, and the integrated care patients depend on. This 5 diversion of time and resources is not a minor inconvenience for CHCs to navigate: it is a structural undermining of the care model that CHCs depend on to serve their community. Administrative and operational impacts CHCs will need to hire additional staff and dedicate additional FTE towards managing a rebate model. In addition, CHCs will also need to invest in IT infrastructure upgrades to manage new complexities in the rebate model system, including varying data submission requirements and timelines, payment reconciliations, and dispute processes for denied rebates. Depending on the volume of prescriptions a pharmacy fills for the selected drugs, CHCs will face an increased administrative burden in monitoring rebate claims and payments. The severe upfront and ongoing costs of compliance with a 340B rebate model will ultimately impact the most underserved patients nationwide. To put it mildly, a 340B rebate model will require a significant and impossible increase in already-strained operational capabilities. Managing the rebate model would require significant changes to CHC pharmacy software and third-party administrator workflows. CHCs anticipate high operational costs to adapt their pharmacy software, pay for custom dashboard notifications, and design new, internal workflows. Additionally, beyond implementation, third-party administrator and software vendors will likely charge ongoing service fees to maintain these complex rebate-tracking features. These would be permanent, recurring costs that further diminish 340B savings. For CHCs that own and operate in-house pharmacies, the rebate model does not pose a simple operating change. To remain compliant, in-house pharmacy systems will require costly customizations to provide real-time, accurate information at the pharmacy counter, including updating electronic health records and Pharmacy Management System to interoperate with the new complex rebate model infrastructure, as well as requiring the CHC to account for high upfront cost increases to pay software vendors for custom API builds and price file reconciliation tools. Additionally, for CHCs that contract with pharmacy partners, the rebate model threatens the very existence and possibility of these contract arrangements. It is likely that third-party administrators (TPAs) will pass on the costs of developing rebate-tracking modules to the covered entity, through increased per-claim fees. The more contract pharmacies the CHC partners with, the greater the number of rebate pathways their pharmacy staff need to track in order to ensure rebates are paid correctly and in a timely manner. Ultimately, due to the financial risk that the rebate model shifts to the pharmacy, there is a real possibility that contract pharmacy partners will opt out of the 340B program entirely. Some CHCs in Colorado indicated they will stop prescribing medications subject to a rebate model at a contract pharmacy, to avoid this additional administrative burden and the potential jeopardization of their partnerships with their contract pharmacies. This would significantly limit patient options of accessible, affordable locations to access their medications, particularly in rural communities, and would further harm patients, as they could be left with little to no other alternatives for nearby, affordable pharmacies. RFI Target Area 2: Payment Timing and Potential Cash Flow Impacts for Covered Entities CHCs are very concerned by potential cash flow issues of the proposed rebate model. The financial impacts caused by a 340B rebate model will be further exacerbated by an inability to meet the terms in contracts with wholesalers, such that CHCs must forgo discounts or 6 face the increased likelihood of paying late fees, in addition to unfavorable interest rates or inflexible credit lines, should they attempt to negotiate with wholesalers or banks to increase their borrowing limit. CHCs rely on these discounts and terms outlined in contracts with their wholesalers as they ensure flexibility and additional savings on expensive pharmaceutical products. Due to the expected costs and very high interest rates that CHCs can expect, loans are likely not a solution to avoid or mitigate the damaging impacts of this proposed rebate model pilot program. Borrowing costs to meet the need upfront will be crippling, and CHCs will face significant challenges accessing adequate credit from the private market to apply for a loan with reasonable interest rates. The Small Business Administration offers loans with annual interest rates upwards of 12.5% - this substantial increase would mean that a loan from this Federal agency could add an additional $2.5 million on the average Colorado CHCs expected increase of $19.9 million in upfront cost. Cardinal Healths standard policy is an 18% annual interest rate on all balances that have not been paid off by the 15th of the month following the purchase. Ultimately, relying on loans or credit to float manufacturer rebates is particularly dangerous at a time when all major revenue sources for CHCs are unstable. There is an additional risk that CHCs will exceed their credit limits with their wholesalers if they are forced to purchase medications at the WAC; if this occurs, wholesalers may prevent a CHC from ordering medications until payments are submitted. These companies generally charge a 2% late fee on all balances not paid by the due date. The unknown timelines and schedule of payments outlined in the rebate model, as CHCs will discover a denied rebate only after purchase and dispensing of the medication, will likely make it harder for CHCs to pay on time and increase the likelihood of being forced to pay additional fines. Further, major wholesalers have already made it clear they are not banks and CHCs should not assume wholesaler partners will extend them credit to cover the upfront costs; wholesalers have actively advised CHCs to seek loans. CCHN is also concerned that the rebate model will cause CHCs to lose non-340B discounts they currently receive, which lower their drug spending significantly, including: Loss of sub-ceiling discounts, which reduced the net cost of the ten MFP pilot drugs by an average of 10-15%. These discounts are negotiated by Apexus, which contracts with HRSA as the Prime Vendor to negotiate sub-ceiling discounts on 340B drugs on behalf of covered entities, like CHCs. Loss of prompt payment discounts, which lower CHC total drug cost by 2-5%. Many CHCs time their 340B purchases and payments to ensure that they receive a prompt payment discount from the wholesaler, which can account for up to 5% of the outstanding balance. CHCs will lose these discounts under the rebate model not just on the ten drugs included in the pilot, but on their total drug purchase. Reduced Cost of Goods Sold discounts and other wholesaler discounts, as transferring these ten drugs from 340B pricing to WAC will lead wholesalers to reduce the Cost of Goods Sold discounts offered to CHCs, which aid in reducing CHC costs by an additional 2%. 7 The loss of these discounts pose a very significant challenge in maintaining the inventory on hand needed to serve patients if cash flow impacts from a rebate model...are realized, as one Colorado CHC pharmacy director explained. RFI Target Area 3: Rebate Denials Every dollar that a CHC pays upfront at WAC is a dollar that remains frozen in the manufacturers reconciliation system. It is a dollar that the CHC cannot rely on to provide health care services to patients or respond to immediate public health crises, natural disasters, or facility emergencies. Forcing CHCs into debt to just maintain their drug supply creates an environment of clinical instability with direct patient impacts. In communities across Colorado, where patients rely on CHCs to access care, the risk of the CHCs credit limit being reached or their reserves being depleted is a direct threat to their communitys safety net and patients health. If CHCs are forced into financial instability, the trickle-down effect is immediate and severe: longer wait times, reduced service availability, and a weakened ability to provide steeply discounted medications. We urge HRSA to recognize that without rigorous, non-discretionary safeguards, the rebate model is not a pricing mechanism but a significant financial liability for safety net providers, like CHCs. The current framework allows manufacturers to act as the sole arbiter of a CHCs statutory savings, creating an uncertain environment that results in direct financial harm. The framework proposed in the previously proposed 340B rebate model allowed manufacturers to deny rebate claims based on vague or ambiguous reasons, such as duplicate rebate or MFP deduplication, without providing the data or documentation CHCs need to understand or contest those decisions. The use of a vague other category for denial reasons only added to the confusion, leaving CHCs guessing compliance requirements that they are never clearly told exist. These unpredictable denials often rely on flawed assumptions or automated processes that fail to account for routine pharmacy operations. CHCs are already experiencing issues with incorrect denials around the MFP, as detailed below, and it is anticipated similar issues would arise in the proposed 340B rebate model. If a rebate is denied, the CHC would take a net loss on the transaction, having already paid the full WAC price to the wholesaler and provided the drug to the patient at a steep discount. Any reduction in financial resources will directly affect the ability the CHC to fulfill their mission of serving all patients, regardless of their ability to pay. If the rebate model moves forward, we request that the process for rebate denials align with current statutory, regulatory, and guidance processes. Rebate requests should be presumed valid unless a manufacturer can demonstrate, with claim-level documentation, a specific and permissible basis for denial tied directly to statutory requirements. If the manufacturer or their vendor cannot demonstrate denials aligning with the statutory requirements to prevent duplication of 340B discounts on prescriptions in the Medicaid Drug Rebate Program (MDRP) or MDPNP, rebates must be paid. Rebate delays and lack of enforcement language While the RFI suggests a 10-day timeframe for rebate payments, the lack of enforcement details and the complexity of reconciliation create a high risk of financial loss for CHCs. 8 Any delay beyond the 10-day window creates an immediate cash flow crisis. CCHN is particularly worried that the need to purchase drugs at full WAC will cause CHCs to exceed their credit limits with wholesalers, halting their ability to order medications until payments are submitted. In considering the prior proposed rebate model and details in the RFI, there was, and currently is, no mechanism to penalize manufacturers for late payments or to ensure that CHCs are made whole for the interest lost while capital is frozen in the rebate system. CCHN is concerned about the lack of details regarding enforcement if manufacturers fail to meet this 10-day requirement. Based on experience with manufacturer denials related to the current MFP to 340B deduplication processes, once an entity has contested a denied rebate and the issue is resolved so the CHC can receive the rebate, manufacturers and their vendors have failed to pay the rebate within the MFP standard of fourteen days from when the status is corrected. We are concerned that in a 340B rebate model, manufacturers and their vendor(s) will continue to provide corrected contested rebates for an undefined and unlimited time. Furthermore, if the rebate is denied, the CHC takes a net loss on the transaction. We request that, if a rebate pilot is implemented, manufacturers be required to pay rebates within ten days of both initial and corrected determinations. Negotiation and dispute resolution considerations The onus of battling for every rebate questioned by manufacturers will increase costs for CHCs and likely lead many covered entities to forgo the appropriate statutory 340B discounts due to insufficient personnel to perform the function and general process fatigue. All this added strain on CHCs would create a barrier to patient care delivery. The 340B statute explicitly provides for sanctions for noncompliance, including liability for underpayment of drugs. It also outlines a formal dispute resolution process with HRSA to address grievances. We are concerned that the pilot program fails to provide any such protections, leaving CHCs without recourse if rebates are improperly denied or delayed. Without clear protections, the rebate model pilot program risks becoming a mechanism that benefits manufacturers at the expense of the safety net providers it was created to support. We request that if the rebate model is finalized, HRSA provide a detailed plan to ensure rebates are paid with enforcement mechanisms outlined for incorrect or delayed denials given the thin financial margins CHCs operate on, and the detrimental impact of ongoing delayed or denied payments has on patient care. Manufacturers must bear the burden of establishing that a rebate is not owed. Any approach that requires covered entities to demonstrate compliance beyond existing statutory requirements, particularly where manufacturers control the unpublished algorithms, creates an imbalance not sanctioned by the 340B or Inflation Reduction Act statutes and ultimately undermines program integrity. Beacon Channel Managements Medicare Transaction Facilitator Concerns Across the board, CHCs state that their current experience in working with the Beacon Medicare Transaction Facilitator (MTF) has been nothing short of flawed and frustrating. Within these current MFP models, CHCs are given very limited transparency into the process, and denials are often based on vague reasons tied to arbitrary, unpublished standards created by manufacturers. 9 Success in distributing rebates to covered entities, including CHCs, relies largely on incorrect manufacturer data if similar logic is used to implement a rebate model for the 340B program, as the first proposed rebate model also relied on Beacons technological platform, we have significant fear and concern that rebates will not be received in a timely manner, if at all. RFI Target Area 4: Data Collection by Covered Entities CHCs rigorously maintain compliance with both the Health Center Program requirements and the 340B program, and we adhere to both voluntary and mandated stringent oversight and compliance processes. Not only do CHCs participate in regular Operational Site Visits to verify Health Center Program compliance, but they also follow strict 340B compliance protocols, including internal audits, training, and external oversight. This demonstrates a proven ability to manage 340B with integrity and accountability. In addition to implementing internal best practices, such as regular audits and staff training, CHCs participating in the 340B program are required to report 340B-related information annually through UDS as part of reporting on staff and costs associated with pharmacy services. These reporting requirements provide a clear and consistent picture of how 340B savings are utilized to expand access and improve patient outcomes, consistently demonstrating CHCs exemplary stewardship of the program. Given the compliance infrastructure and strict statutory requirements already in place for CHCs, implementing a rebate model would cause disproportionate harm to CHCs and the patients they serve. The administrative, financial, and operational burdens from such a model would threaten the stability of the safety net providers that the 340B program was designed to support. RFI Target Area 5: Manufacturer Efforts to Avoid Duplicate Discounts In Colorado, Medicaid has a system in place to avoid duplicate discounts and the Medicaid rebate routes to the state, as required by state statute. CHCs maintain up-to-date profiles in the Office of Pharmacy Affairs Information System, so their number of in-house and contract pharmacies are accurate. Additionally, CHCs submit a modifier on each Medicaid claim, so the rebate is appropriately and directly contributed to the state. CHCs carve out the applicable Processor Control Numbers (PCNs) in their agreements with third-party administrators. Prior to Jan. 1, 2026, there was zero possibility of a duplicate discount on a Medicaid claim in Colorado for this reason. CHCs implemented workflows ahead of Jan. 1, 2026, in preparation for the MDPNP, including processes to avoid duplicate discounts. However, there have been continual issues with manufacturers denying claims for being incorrectly flagged for duplicate discount and being unresponsive to inquiries on how to address the findings. As a result, 50% of the CHCs that responded to CCHNs survey decided to stop submitting 340B claims at their contract pharmacies for the ten drugs subject to the MDPNP to avoid any possibility of duplicate discount; many of them saw their claims automatically denied in the Beacon platform. One CHC has even stopped submitting 340B claims for Medicare prescriptions at their in-house pharmacy to avoid any possibility of a duplicate discount. Since Jan. 1, 2026, while we understand that manufacturers investment in a mechanism to deduplicate Medicare MFP and the 340B price from the same unit of drug, the issues shared 10 above demonstrate that it is not working. We are deeply concerned that the previously proposed approach for addressing IRA deduplication a 340B rebate model would create significant administrative, financial, and operational burdens for CHCs. A 340B rebate model is unnecessary to achieve the goal of deduplication and is also the option that would place the greatest burden on CHCs. Any change in policy should seek to accomplish the governments goals in the least burdensome way with the least negative impact on stakeholders. RFI Target Area 6: Required Reporting Commercial insurance claims data The requirement that CHCs provide commercial claims data to pharmaceutical manufacturers in exchange for discounted pricing cannot be included under the rebate pilot or any federally authorized program. HRSAs action exceeds statutory authority, violates the Administrative Procedures Act (APA), raises serious constitutional concerns, and directly undermines the purpose of the 340B statute. The 340B statute authorizes HRSA to administer ceiling pricing requirements; it does not authorize the agency to compel covered entities to surrender valuable proprietary data as a condition of accessing the 340B pricing to which they are statutorily entitled. As the District of D.C. explained, Congress...constrained the [HHS] Secretarys ability to adopt regulations that have the force of law. This denial of general rulemaking authority supports the conclusion that Congress did not mean for the Secretary to create extra-statutory hurdles to 340B participation.3 We believe that Congress did not intend to protect manufacturers or PBMs from their own commercial contracts. Federal law contains no prohibition on commercial duplicate discounts, and Congress expressly chose not to create one: Congress included explicit protection for manufacturers against Medicaid duplicate discounts in the 340B statute but declined to extend that protection to commercial claims. Congresss omission of any comparable protection in the commercial market is therefore meaningful and dispositive. Allowing manufacturers to recapture value through regulatory mechanisms that Congress declined to authorize undermines the 340B programs purpose and contradicts its statutory structure. That data will be used by manufacturers to reduce their rebate payment liabilities to commercial PBMs under contracts between the two private parties. Those contracts are privately negotiated so that manufacturers can obtain better formulary placement for their products and exclude cheaper drug alternatives. They are negotiated with market discounts, including 340B discounts, already factored into their high drug list prices. Drug industry data vendors have reported that such data is highly valuable to manufacturers. Commercial claims data is extraordinarily valuable proprietary information to CHCs. Studies conducted by IQVIA and others demonstrate that pharmaceutical manufacturers and PBMs routinely pay significant sums to obtain access to such data.4 This regulatory action represents the first time in recorded history that the federal government has authorized pharmaceutical manufacturers, through sub-regulatory guidance, to transfer this valuable property away from covered entities and into manufacturers possession without compensation or a valid public use. 3 Albany Med Health System v. Health Resources & Services Administration, No. 23-cv-03252 (APM), slip op. (D.D.C. Mar. 3, 2026). 4 Kalderos, Sightlines Issue No. 3, Double, double, toil and trouble with commercial contracts, www.Kalderos.com (Oct. 2023), Issue No. 3. 11 The 340B statutes design reflects Congresss intent to ensure nondiscriminatory access to discounted drugs, not to insulate manufacturers from commercial pricing dynamics. Further, this requirement is arbitrary, capricious, and not in accordance with applicable law, in violation of the federal Administrative Procedure Act. There is no commercial duplicate discount prohibition for HRSA to enforce, and the agency has failed to articulate a reasoned explanation for how mandating commercial claims data, for the first time in the 340B statutes history, advances the statutory purpose of the 340B Program to enable safety-net providers, including CHCs, to stretch their resources to provide more comprehensive services to more patients. Reporting requirements for manufacturers As described elsewhere in our comment letter, the state of Colorado already has statutory protection in place to avoid duplicate discounts on 340B drugs in the Medicaid program. In that context, the rebate model would be duplicative and unnecessary. A 340B rebate model, as described below, would supersede HRSAs statutory authority in regulating duplicate discounts for 340B and MFP drug dispenses. RFI Target Area 7: 340B Program Integrity and Other Potential Benefits of a Rebate Pilot The ultimate goal of the 340B program, as Congressional intent made clear over thirty years ago, is to help safety net health care providers stretch scarce Federal resources as far as possible, and to provide discounted medications to patients upfront. In fact, pharmaceutical discounts existed before the 340B program was written into statute5: historically, manufacturers participated in providing voluntary discounts for safety net providers; once the Medicaid Drug Rebate Program was introduced and required manufacturers to provide drugs at a discount to state Medicaid programs, manufacturers stopped offering discounted prices to safety net providers. The 340B program was developed in response, to ensure that CHCs and other covered entities can afford the medications their patients need. CHCs are already committed to ensuring their patients see the full benefit of the discounted medication: they are statutorily required to pass the discounted price onto our patients. Not only that, CHCs are required by Federal statute6 and mission to provide services at a sliding fee discount. Operating the 340B program through a rebate model mechanism fundamentally shifts that intent and favors enormous, multinational pharmaceutical manufacturers at the expense of small, local safety net providers. A rebate model allows pharmaceutical manufacturers, with an average financial operating margin of 23.2%7 to not just hold the purse strings, but retain sole decision-making ability, as to whether or not to issue a discount to CHCs in Colorado the majority of whom had negative or breakeven financial operating margins in 2024 and 2025. HRSA, as a federal agency, was given authority to oversee the program and ensure that 340B discounts were provided appropriately rather than retain this responsibility, HRSA is ceding its control to manufacturers, which are inherently biased participants in the 340B program, to force CHCs to be charged one of the highest possible prices to acquire drugs. 5 https://www.commonwealthfund.org/publications/explainer/2025/aug/340b-drug-pricing-program-how-it-works-and-why-its- controversial 6 42 U.S. Code 254b(k)(3)(G)(i) 7 https://www.csrxp.org/wp-content/uploads/2026/01/CSRxP-Margin-Analysis-Chart.pdf 12 Recommendations to protect CHCs HRSA should exempt CHCs from the rebate model. However, if HRSA insists on forcing CHCs into a rebate model, HRSA must ensure manufacturers are required to incorporate the following protections into their rebate model plans: Requirement to advance CHCs enough rebates to cover the greater of two full package sizes or two months worth of dispense in order to mitigate ongoing cashflow issues. Manufacturers should advance CHCs the rebates for two packages of each drug and for drugs that come in single-dispense package sizes, manufacturers should advance enough rebates to cover a CHCs average number of dispenses for that drug over a typical two- month period. Requirement to reimburse CHCs for all costs incurred due to the rebate model, fully, promptly, and transparently; although the first proposed rebate model pilot stated that no additional administrative costs of running the rebate model shall be passed onto the covered entities, HRSA-approved manufacturer plans fell far short of this commitment, as they failed to account for most of the rebate-related costs that CHCs will face. Requirement to provide 340B rebates on a reasonable number of undispensed units, or the units of a drug that, during normal and appropriate course of business, are not dispensed to a patient because they are expired or damaged. If manufacturers are not required to reimburse CHCs for any of these undispensed units, CHCs will be forced to pay upfront WAC and absorb that cost, with no recourse the 340B savings would transfer from the CHCs to the manufacturers, and CHCs costs and financial harms would skyrocket. Requirement to provide rebates at a unit level to reduce cashflow demands and interest costs on CHCs by significantly speeding up how quickly CHCs receive rebate payments for drugs sold in multi-unit packages. Prohibition on requiring BINs (Bank Identification Numbers) or PCNs (Processor Control Numbers) on rebate claims as those data elements are unnecessary to implement a rebate model pilot, as manufacturers have demonstrated they do not need BIN/PCN data to identify drugs for 340B purposes. Further, they are not always available to the covered entity; for instance, Walgreens, a major contract pharmacy partner, does not make this data available to covered entities. Requiring CHCs to provide BIN/PCN data to receive a rebate would functionally eliminate the rebate model pilot drugs from CHCs contract pharmacies. Legal considerations The proposed 340B rebate pilot is unworkable because it creates significant operational and financial uncertainties, creates legal billing compliance impossibilities, and raises potential False Claims Act implications when submitting Medicaid claims for reimbursement for drugs identified as 340B-eligible by the covered entity that are ultimately denied a 340B rebate by drugmakers. HRSAs authorization of this illegal framework would violate the APA and is clearly inconsistent with federal statutes that grant the CHC alone the authority to prevent Medicaid FFS duplicate discounts. a. Patient eligibility determinations Under the plain language of the 340B statute, it is illegal to transfer discretion from the CHC to the manufacturer about CHC patient eligibility. By requiring a CHC to purchase a drug at WAC 13 and allowing a manufacturer to determine whether to pay a 340B rebate based on the data it receives, including data relating to whether a person is a patient of the CHC, the 340B rebate model pilot shifts the authority to ascertain a patient away from the CHC-provider to a non-provider the manufacturer. Specifically, the 340B statute grants the covered entity discretion to determine which of its patients are covered. Importantly, the statute allows HRSA and drugmakers to audit only after such determination has been made. Indeed, the only provision that mentions the term patient in the 340B statute prohibits the covered entity not HHS nor the manufacturer from reselling or transferring 340B drugs to nonpatients. Thus, the statute exclusively grants the covered entity the authority to determine which of its patients are eligible for 340B drugs and requires the covered entity to furnish 340B drugs only to those individuals. b. 340B rebates are an insufficient and illegal means to effectuate deduplication efforts Under a 340B rebate model, a manufacturer can deny a 340B rebate whenever an MFP applies, even when the 340B ceiling price is lower than the MFP. By failing to address that a covered entity has a legal right to the lower of the two prices, a 340B rebate model ignores the protections Congress specifically included in enacting the Inflation Reduction Act and imposes a punitive condition on the safety net provider that it purchase the drug at the highest market price. The Inflation Reduction Act does not include language that permits HRSA to authorize drugmakers to charge prices above the 340B ceiling price. That statute merely states that a drugmaker must make available at the lower of two discounted prices MFP and 340B. It cannot be construed as spontaneously modifying the 340B statutes plain text prohibiting a manufacturer from charging above the 340B ceiling price. The only rebate mechanism HHS has contended is available to it is found under Target Area 340B, which does not pertain to Medicare claims. Accordingly, HRSAs rebate authority should not be used as a deduplication tool under the Inflation Reduction Act, and manufacturers are not permitted under said Act or 340B statute to charge upfront WAC prices for 340B drugs because the Inflation Reduction Act does not contain a 340B rebate pricing mechanism. For these reasons, a 340B rebate model would be an unworkable and burdensome mechanism for addressing 340B-MFP deduplication. c. Protections against undue burden to CHCs The 340B legislative history demonstrates the 340B statue was clearly written with the intention to minimize burden on stakeholders: The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism....The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity.8 The negative implications of a 340B rebate model are well documented, fail to align with legislative intent, and do not meet the least burdensome requirement. 8 H.R. REP. 102-384(II) 14 When enacting the 340B statute, Congress intended for the administration to select the most effective and efficient mechanism for each type of covered entity, but a 340B rebate model is the least effective and least efficient mechanism for CHCs. We respectfully submit that mandating CHCs, the nations primary care safety net backbone, to pay upfront WAC pricing simply because a manufacturer is entitled to make the lower of two discounted price points available, 340B and MFP, under the Inflation Reduction Acts statutory intent, is extra-statutory and appears punitive. Implementing a 340B rebate model, therefore, contradicts the intent of Congress when enacting 340B. Neutral claims data clearinghouse While manufacturers have evidently informed HRSA that a rebate model is the only viable option to avoid paying duplicate discounts on the same unit of drug that is simply not true. A 340B rebate pilot would impose significant cash flow demands and administrative burdens on covered entities. Fortunately, the primary goal of the rebate pilot to address 340B and MFP deduplication can be achieved quickly, without overturning the fundamental structure of the program, and at a fraction of the cost and administrative burden of the rebate model, through the creation of a neutral claims data clearinghouse. Whichever mechanism for deduplicating 340B and MFP drugs is ultimately selected should be the least burdensome, in line with Congressional intent and the legislative history of the 340B program. Under clearinghouse, covered entities would submit standardized claims data to a secure web platform for each MFP drug purchased under 340B and dispensed to a Medicare Part D patient. This data would be submitted within 45 days of the drug's administration or dispensation. The clearinghouse would aggregate this data and transmit it to the MTF, which would use it to identify claims that are ineligible for a Medicare MFP rebate. This clearinghouse could be used to identify potential Medicaid-340B duplicate discounts and potential MFP-340B duplicate discounts under the Inflation Reduction Act. The clearinghouse would be able to share identified 340B units reimbursed by Medicare with the Centers for Medicare and Medicaid Services for exclusion from Part B and D inflation rebates. Duplicate covered entity claims for 340B discounts on the same prescribed unit of drug (e.g. for patients of two different covered entities) could be identified as well in a clearinghouse. Manufacturers would be able access a specified list of claims-level data elements for dispensing of their 340B drugs. Compared to HRSAs proposed 340B rebate model, this clearinghouse approach would avoid cashflow and borrowing challenges by preserving the upfront 340B discount, while providing manufacturers with all the necessary deduplication data within the same 45-day timeframe. It would substantially reduce the administrative burden on covered entities by significantly reducing the time to build and maintain complex rebate compliance systems, and the staff time needed to track and reconcile claims and manage cashflow issues. The clearinghouse would also improve rebate accuracy and, thus, reduce the time and effort manufacturers and covered entities must spend correcting errors or engaging in dispute resolutions. Ultimately, the clearinghouse would preserve the longstanding upfront discount structure that has defined the 340B program for more than three decades and is essential to CHCs participation in the program and, most importantly, protect patient access to affordable medications. 15 We reiterate our request that all CHCs are carved out of the proposed 340B rebate model. Considering that CHCs nationally make up only about 5% of the total 340B program spending, HRSA can successfully and efficiently administer a pilot program without CHCs. Thank you for considering our concerns regarding the significant cost, administrative burden, and negative patient impacts that would arise for CHCs across Colorado as a result of the 340B Drug Discount Program being operated and administered through a rebate model mechanism. While we are grateful the agency is exploring ways to make the 340B program more efficient and ensure that patients see the most benefit from the program, we ultimately request that HRSA exempt all CHCs from this pilot program. Should you have any questions, please reach out to myself, Ross Brooks, President and CEO of CCHN, at rbrooks@cchn.org, or Suzanne Smith, Health Center Operations Director of CCHN, at suzanne@cchn.org. Ross Brooks President and CEO, Colorado Community Health Network
HRSA-2026-0001-2447Kalderos2026-04-20T04:00Z257,508 chars
Please see attached PDF. 1 Submitted electronically via https://www.regulations.gov April 20, 2026 Thomas J. Engels Administrator Health Resources and Services Administration Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20857 Re: Request for Information: 340B Rebate Model Pilot Program No. HRSA 20260001 Dear Administrator Engels: Kalderos appreciates the opportunity to provide comments on the Health Resources and Services Administrations (HRSA or Agency) Request for Information (RFI) on the 340B Rebate Model Pilot Program (Pilot Program) published in the Federal Register on February 17, 2026. Kalderos builds unifying technologies that bring transparency, trust, and efficiency to drug discount and rebate programs, including the Medicaid Drug Rebate Program (MDRP), the 340B Drug Discount Program (340B Program), and the Inflation Reduction Act of 2022 (IRA). Kalderos does so in compliance with applicable laws and regulations as it seeks to solve problems in drug discount and rebate programs by fostering transparency; connecting stakeholders; enabling simple, streamlined communication; and applying machine learning to create smart data science tools. Kalderos is genuinely committed to administering a fair, balanced process assisting providers (including 340B covered entities), payors, and manufacturers to ensure the right drug price is applied to the right transaction. To that end, Kalderos has developed solutions to facilitate coordination between dispensers and manufacturers, while simultaneously ensuring that there are systems in place to identify, dispute, and resolve noncompliance with drug discount and rebate programs. Since 2019, Kalderos has engaged with HRSA to advocate for the implementation of a 340B rebate model and, at the same time, worked with interested covered entities and manufacturers to develop and implement a rebate model. Specifically, beginning in 2019, Kalderos was working with manufacturers to develop a rebate model and even had begun a rebate pilot program involving manufacturers and covered entities. Kalderos was already well aware of the need to improve efficiency and confidence in the 340B system and proposed a rebate model as a mechanism to promote transparency and address instances of non-compliance in the 340B Program. We have attached some of that correspondence with the Agency to this letter to make clear that Kalderos has a long standing and sustained history of engagement and a thoughtful approach to implementation of a rebate model with HRSA. 2 Kalderos newest technology platform, Truzo, is a technology-driven model capable of effectuating discounted pricing directly to covered entities and other dispensers as a rebate and is well-equipped to effectively and securely implement a unit-based 340B rebate model. Multiple manufacturers are already using Truzo to collect claims data, and thousands of covered entities have signed up to the platform. Kalderos would welcome another opportunity to meet with HRSA and conduct an updated functional demonstration of Truzo. It is with this experience that we provide the following comments. * * * I. Benefits of a 340B Rebate Model A 340B rebate model is needed to improve transparency and address non-compliance within the 340B Program. Identifying when the right discount applies to the right dispense, without triggering duplicate discounts, is a challenging problem that requires significant time, money, and resources to solve. Over the years, stakeholders have implemented several different approaches, including claims modifiers and reliance on the Medicaid Exclusion File, to prevent duplicate discounts. Those approaches have proven ineffective. It has been Kalderos experience that, despite an obligation to do so, states (and those third parties working on their behalf) often use these approaches to avoid resolving disputes in good faith and as a justification for instructing Kalderos to simply recoup the duplicate discount(s) from the 340B covered entity. Kalderos has identified approximately $340,000,000 in potential non-compliance for which states have refused to engage in good faith in the dispute resolution process. The duplicate discount problem has also surfaced in the context of Medicare inflation rebates created by the IRA. Under the IRA, manufacturers must pay rebates to Medicare if drug prices rise faster than inflation, but those same drugs may also be subject to 340B discounts or Medicaid rebates, further increasing duplicate discount risk. This risk also arises in the context of the IRAs Maximum Fair Price (MFP). Once a drug is subject to the MFP, manufacturers must provide that MFP price to Medicare, but the same units may still be dispensed through 340B- covered entities or generate Medicaid rebates, raising concerns about duplicate price discounts across federal drug pricing programs. A rebate model would solve these problems. A rebate model will provide conclusive evidence that a given unit of a drug has been afforded a 340B price. This is because the claim level identifiers from the administration/dispense record quickly can be compared to those same identifiers from the MDRP, Medicare inflation rebate, or MFP invoices, thereby preventing a duplicate discount from occurring in the first place. In addition to preventing duplicate discounts, a rebate model permits manufacturers and covered entities to more accurately and efficiently identify instances of diversion.1 This decreases the need for good faith inquiries between manufacturers and covered entities (i) to tie the dispense/administration record back to the claim, (ii) to ensure that the covered entity followed appropriate billing procedures, and (iii) to confirm 1 For the first time, manufacturers will be able to identify certain instances of diversion, namely, diversion through alternative distribution models where a covered entity transfers a drug to an entity that is not a patient. 3 that Medicare or the relevant state Medicaid agency did not submit the same claim for a rebate. A rebate model also will reduce the need for audits and the number of Administrative Dispute Resolution (ADR) claims. Additionally, a rebate model will provide covered entities with more-rapid access to 340B pricing. Indeed, a 340B unit-based rebate payment can provide cash-in-hand before covered entities even remit payment on their wholesaler invoice. Those covered entities using the replenishment model will not be required to wait for full packages of drug product to accumulate before submitting requests for rebate payments, since rebates are based on the quantity of units administered/dispensed. Further, in the case of medications that are unable to be ordered because of shortages or allocation issues, a rebate model permits the covered entity to quickly receive payment for units that have been administered/dispensed as opposed to facing delays under the current replenishment model. Moreover, the rebate model does not deprive covered entities of the 340B price even in the context of duplicate discounts; instead, a rebate model will operate so that manufacturers have the information available to prevent them from paying subsequent additional discounts to which government and/or commercial payors are not entitled. CMS itself has repeatedly emphasized the importance of claims data in resolving disputes,2 noting that the availability of claims level data may reduce the States administrative burdens and expenses for researching and resolving disputes with manufacturers.3 A rebate system thus ensures that stakeholders are confident that the right price is being offered on the right drug in a timely fashion. Some 340B covered entities are resistant to a rebate model, claiming that it would be overly burdensome and lead to high up-front costs that certain covered entities are not able to sustain. These arguments are mistaken. They ignore the actual design and goals of the rebate model. Accepting these arguments at face value would put unsupported allegations above the integrity of the 340B program. Further, courts have made clear that manufacturers can impose claims data requirements as a condition to accessing 340B pricing, and the provision of claims data information under a rebate model is not burdensome for covered entities.4 Under a rebate model, claims data are provided to manufacturers up-front and in real-time. Such information is readily available and matches what covered entities and their third-party administrators typically include when they attempt to match a drug dispensed to a 340B patient. It is also the very same information customarily provided by a pharmacy or a 340B covered entity to secure reimbursement for the drugs from a third-party payor, like Medicare or Medicaid.5 In addition, 2 CMS, Best Practices for Avoiding 340B Duplicate Discounts in Medicaid (Jan. 8, 2020), available at https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib010820.pdf (stating when states provide claims level data to manufacturers, we would expect there to be a reduction in number of disputes due to more accurate information being provided and that manufacturers likely need claims level data for true invoice validation purposes.). 3Id. 4 See e.g., Novartis Pharmaceuticals Corp. v. Johnson, 102 F.4th 452, 463 (D.C. Cir. 2024) 5 For example, see claim-level information pharmacies are required to provide Illinois Medicaid at https://hfs.illinois.gov/content/dam/soi/en/web/hfs/sitecollectiondocuments/d0payersheetilpop20171127.pdf. 4 several of the required data elements are also required by HRSA as part of its routine audit processes for covered entities and are included in the Agencys audit data request list.6 Moreover, this information is customarily provided when managed care entities, hospitals, physicians, retail pharmacies, group purchasing organizations, and states participating in the Medicaid program seek non-340B price concessions pursuant to discount and rebate agreements with manufacturers or other pricing programs. In other words, when providing price concessions, manufacturers routinely seek the information necessary to confirm that program requirements for those price concessions are met. Finally, HRSA has evidence that covered entities are engaging in efforts to adopt so-called alternative distribution models, such as arrangements where pharmacies may be transferring product to covered entities or where a virtual credit/debit model is used instead of shipping product to the contract pharmacy, as set out in HRSAs bill to/ship to contract pharmacy guidance. Alternative distribution channels create a lack of transparency in the system and obfuscate the established process for bill to/ship to arrangements. These models also present significant diversion risks and make diversion or duplicate discount identification impossible without data sharing. A 340B rebate model would help to mitigate these risks, which are becoming more widespread as more covered entities adopt these alternative models. II. Rebate Model Approach Kalderos is pleased that HRSA has announced the new Pilot Program and issued the RFI, and views this as a positive step towards improving transparency and solving non-compliance in the 340B Program. We recognize that HRSA has sought to take a methodical approach to designing the Pilot Program. HRSA had been engaging with stakeholders, including Kalderos, in substantive discussions regarding a 340B rebate model since at least 2019. Over the years, Kalderos has made numerous presentations to HRSA that explain the benefits of a 340B rebate model for all stakeholders. Our meetings in 2019 and later discussed our pilot rebate option with manufacturers and covered entity participants. Throughout our engagements, HRSA officials have asked thoughtful questions and meaningfully participated in discussions with Kalderos, both in face-to- face meetings and over email, regarding the value of a rebate model, particularly for reducing duplicate discounts and other instances of non-compliance in the 340B Program. For reference, we have attached to this letter some of our correspondence with the Agency regarding a 340B rebate model beginning in 2019. Further, we are aware that other industry stakeholders, including pharmaceutical manufacturers, have similarly long-engaged HRSA in discussions about the benefits of a 340B rebate model. This robust administrative history reflects that HRSAs initial announcement of a 340B rebate model pilot program was well-considered and based on years of substantive analysis based 6 See Apexus, Sample HRSA 340B Audit Data Request List (DRL) for Covered Entities, available at https://www.340bpvp.com/Documents/Public/340B%20Tools/sample-hrsa-340b-audit-data-request-for-covered- entities.pdf. 5 on discussions with numerous stakeholders regarding the problems inherent in the current 340B Program and the ways in which a rebate model presents a viable solution to those problems. Accordingly, efforts to try to frame the pilot model as rushed are simply not borne out by the administrative record. III. Administrative Simplicity and Lack of Burden Covered entities often claim that a 340B rebate model will (1) require them to float large sums of money in order to purchase drugs at the list price up front (which they claim is not financially feasible), and (2) will cause undue administrative burden. These claims are unfounded. Across the healthcare system, market participants have utilized rebates as a mechanism to facilitate the accurate and efficient provision of statutory drug prices for many years. For example, state Medicaid agencies rely on rebates provided under the MDRP when developing their budgets, and those rebates are paid well after the agencies pay out reimbursements. Other key players in the healthcare system, including group purchasing organizations (GPOs), wholesalers, and pharmacy benefit managers (PBMs) routinely utilize rebates as a way to provide discounts to hospitals and other downstream purchasers.7 Additionally, outside of the context of the 340B Program, hospitals and other types of covered entities routinely pay full price for drug product up front, and then wait for third-party payors to provide reimbursement for those products in order to receive the discounted price. For example, when certain covered entities buy drugs from manufacturers or wholesalers for inpatient use, the covered entity purchases the drug at the list price and then must wait to receive reimbursement from the patients insurer for the drug. Covered entities are already accustomed to this after-the-fact reimbursement process, and a 340B rebate model would function in the same way. Even within the 340B Program, covered entities claim that they receive an up front discount on 340B drugs. However, in reality, covered entities receive an on-invoice discount meaning a covered entity is issued an invoice when ordering a drug, and then they recognize the discount when they pay that invoice, which often takes more time than processing a rebate. Further, state AIDS Drug Assistance Programs (ADAPs), which are 340B covered entities, have utilized a rebate model to ensure payment of 340B prices for decades. Indeed, HRSA has expressly stated that, for ADAPs, (i) a 340B rebate option is an alternate method of accessing 340B pricing, and (ii) [v]oluntary rebate agreements with covered entities that provide at least the minimum statutory discount and do not contain requirements inconsistent with section 340B and published program guidelines will be considered consistent with the section 340B rebate program.8 7 Within the U.S. healthcare system, rebates are generally considered to be a form of discount. Indeed, rebate is defined for purposes of the discount safe harbor to the federal Anti-Kickback Statute as any discount the terms of which are fixed and disclosed in writing to the buyer at the time of the initial purchase to which the discount applies, but which is not given at the time of sale. 42 C.F.R. 1001.952(h)(4) (emphasis added). 8 63 Fed. Reg. 35239, 35240 (June 29, 1998). 6 Finally, the administrative costs to covered entities associated with implementing a 340B rebate model are minimal. Indeed, a recent study evaluating cash flow models under different 340B drug inventory and rebate mechanisms found that financing costs under the 340B rebate model are small and unlikely to be a barrier to its use by covered entities.9 Further, as discussed in greater detail above, the data required to be provided by covered entities under a rebate model is readily available and customarily provided by them when they submit claims to secure reimbursement for the drugs from third-party payors, like Medicare or Medicaid. Moreover, courts have ruled that manufacturer requirements for covered entities to submit claims data in order to access drugs at the 340B price pose minimal burdens.10 Indeed, covered entities already are required to track these same data elements as a requirement for participation in the 340B program. HRSA has similarly estimated that the burdens imposed on covered entities to provide routine claims data to manufacturers under a 340B rebate model are not substantial, noting in the Information Collection Request regarding the Pilot Program that the burden associated with a potential 340B Rebate Model Pilot Program data requests may not be significant.11 Finally, because a 340B rebate model will simplify the process of identifying when the right discount applies to the right dispense, thereby reducing the potential for duplicate discounts, the model will reduce costs associated with manufacturer good faith inquiries into covered entity compliance with 340B Program requirements, and will reduce the time required by both manufacturers and covered entities to investigate and dispute such claims. Kalderos Truzo platform further reduces the administrative steps required to effectively implement a 340B rebate model. The platform is designed to be fully self-service and many covered entities have reported fully onboarding in less than 10 minutes. Once fully onboarded, covered entities can submit data in near real time. Further, Kalderos platform has the capacity to interface and work with multiple vendors across the spectrum. Kalderos Truzo platform can also address special situations, if necessary. For example, if there are limited scenarios where a covered entity, such as certain FQHCs, may show that implementation of a rebate model presents more than a minimal burden, Kalderos can address those concerns by, for example, providing a different solution that addresses the covered entitys specific circumstances, such as a credit/debit memo option. Finally, Kalderos has a dedicated support team with deep industry knowledge, experience, and technical strength. We have received positive feedback from CEs regarding their experience with Truzo. 9 See IQVIA, How Will a Rebate Model Impact Cash Flow in the 340B Drug Pricing Program? (Dec. 5, 2025), available at https://www.iqvia.com/locations/united-states/library/fact-sheets/how-will-a-rebate-model-impact-cash- flow-in-the-340b-drug-pricing-program. 10 See e.g., Novartis Pharms. Corp. v. Johnson, 102 F.4th 452 (D.C. Cir. 2024); Sanofi Aventis U.S. LLC v. U.S. Dept of Health & Hum. Servs., 58 F.4th 696 (3d Cir. 2023). 11 91 Fed. Reg. 9632, 9633 (Feb. 26, 2026). 7 IV. Scope of Pilot Program HRSA should expand the scope of the Pilot Program beyond just those drug products included on the CMS Medicare Drug Price Negotiation Selected Drugs List and allow all interested manufacturers to participate in the Pilot Program. While there are impending time pressures for certain manufacturers whose products have been selected for participation in the Medicare Drug Price Negotiation Program, HRSA should not rely on the Negotiation Program as its primary criteria for determining which manufacturers are permitted to participate in the Pilot Program for two key reasons: (1) the Pilot may not adequately test rebate model options, and (2) the need for, and the benefit of, a rebate program goes well beyond drugs in the Negotiation Program. First, if the Pilot Program is designed to evaluate the benefits and challenges of a rebate model in the context of the 340B Program, doing so with such a limited scope is less likely to produce reliable results. Such a narrow scope will limit the number of participants and the number of models. This will necessarily provide a skewed sample size that does not represent all options available in the marketplace and will not provide HRSA with a complete view of how rebate models could operate. Restricting the Pilot Program to only those NDC-11s included on the CMS Medicare Drug Price Negotiation Selected Drugs List also drastically limits HRSAs ability to fully evaluate the other benefits of a 340B rebate model unrelated to MFP effectuation and deduplication. Expanding eligibility to a broader range of drug products and dosage forms would allow HRSA to get a more complete picture of how a rebate model would operate in practice, and to evaluate the effectiveness of a rebate model in preventing inappropriate discounts and other instances of non-compliance in the 340B Program. With a majority of 340B utilization occurring in the physician-administered setting, focusing the Pilot Program on drugs primarily dispensed through retail channels and making subsequent assessments on the models feasibility is inappropriate and short-sighted. Second, the need for a 340B rebate model goes beyond drugs subject to Maximum Fair Price (MFP). The 340B Program itself continues to be the subject of widespread non-compliance through duplicate discounts and diversion. Indeed, within the 340B Program, over the past 7 years, Kalderos has identified over $1 billion in duplicates and other errors in discounts. The scope of the duplicate discount problem in Medicaid is greater than what would be expected for just MFP drugs. Indeed, IQVIA estimates that duplicate discounts across Medicaid and 340B claims accounted for about 25% of total 340B drugs sales in 2021, representing approximately $20-25 billion in total.12 While the same issues exist for claims for MFP drugs, given the size and scope of the Medicaid program, the Medicaid duplicate discount problem far exceeds the potential for duplicate discounts for just MFP drugs. Further, the potential for duplicate discounts across Medicare inflation rebate claims is similarly significant and cannot be ignored. Accordingly, given that the same challenges with duplicate discounts apply to non-MFP drugs within the 340B Program, HRSA should not limit the Pilot Program to MFP drugs. 12 IQVIA, Uncover the Invisible Impacts of 340B Discounts (Dec. 2021), https://www.iqvia.com/locations/united- states/blogs/2021/12/uncover-the-invisible-impacts-of-340b-discounts. 8 For these reasons, HRSA should expand the Pilot Program to a greater number of drug products purchased under the 340B Program and should permit any willing manufacturer to apply. V. Data Elements, Privacy, and Operability As discussed in greater detail above, the claims data elements that covered entities would be required to share with manufacturers under a 340B rebate model are the same data elements that many covered entities are already providing to manufacturers through existing data platforms. Although covered entities often claim that such information is protected from disclosure by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), such claims are unfounded, as such data requirements are compliant with HIPAA requirements that permit disclosure for payment purposes.13 We agree that any technology platform utilized to receive and process covered entity claims data under the Pilot Program must have strong privacy and security controls. Further, any platform used to facilitate a 340B rebate model must allow for quick resolution of disputes through the resubmission of any claims that were not initially approved for any reason. Kalderos Truzo platform was developed with robust security infrastructure to ensure technical scalability. Kalderos has invested significant resources so that Truzo incorporates strong cybersecurity threat detection technology and processes, including SOC 1 (Financial) and SOC 2 Type II Security controls with consistent and ongoing security audits that conform to standard HIPAA compliance principles. The platform also includes multi-factor and SSO authentication, which provides enterprise grade security and ease of use. Finally, cloud deployed services ensure that the platform operates at the highest levels of physical and network security, including payments that are transported using signature verification and encryption tools. Accordingly, Truzo has the capabilities and security infrastructure necessary to securely and effectively administer a 340B rebate program. As noted above, we would welcome the opportunity to conduct another demonstration of the platform for HRSA. * * * Thank you for the opportunity to submit these comments in response to the RFI. If you have any questions about these comments, please do not hesitate to contact me at rusty.hensley@kalderos.com. Sincerely, Rusty Hensley Chief Legal and Administrative Officer Kalderos 13 Under 45 C.F.R. 164.506(c)(1), a HIPAA covered entity is permitted to disclose protected health information covered by HIPAA consistent with HIPAA for their own payment purposes. See 45 C.F.R. 164.506(c)(1). Redefining how the business of healthcare performs TM Jeremy Docken 773-934-3672 jdocken@kalderos.com Founder & CEO kalderos.com 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Introduction to kalderos Kalderos delivers technology that solves the Redefining challenges facing the US healthcare system. how the We work with healthcare providers, drug business of manufacturers, payers, and government agencies alike to increase transparency and healthcare restore trust lowering the cost of healthcare performs and enabling everyone to focus on improving the health of people. 1v 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. 2 FOIA Exempt GP, ERP, Contract Management K I API & Integration Introduction to Kalderos Delivery & Applications Kalderos' EDI API & Integration Ledger Coordination & Payment drug discount Spreadsheet Monitoring Claims Data Direct payment Flat File Distribution Validations Two-way -> Data management NCPDP Messaging Payment External API Automation solution Aaetee I Enterprise Administration under development Share & Exchange I State Medicaid, PBM, Part D Plan, Pharmacy LK 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt The AKS rebate proposed rule is designed to fundamentally change the existing rebate discount system into a chargeback system Amending the AKS safe harbors will effectuate the administration's goals by: Introduction to Kalderos HHS Proposal to Excluding from the discount safe harbor protection rebates paid by pharmaceutical manufacturers to PBMs, Part D plans, and Revise AKS Safe Medicaid MCOs; Harbor Creating a new safe harbor protecting prescription drug discounts offered to patients at the point-of-sale; and Protections Creating a new safe harbor to protect certain fixed-fee service arrangements between pharmaceutical manufacturers and PBMs v 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt We anticipate some commenters will oppose the Proposed Rule arguing that it cannot be implemented as a technological and operational matter. Anticipated Comment: Anticipated Comment: Introduction to Kalderos There is no mechanism to effectuate a Pharmacies do not have the working capital chargeback between the point-of-sale and to buy at WAC and sell to a beneficiary at a Anticipated manufacturer currently exists. The existing lower price negotiated by the PBM or Plan. wholesaler chargeback mechanism focuses Community pharmacies, in particular, will be on transfer of title between wholesaler and comments to the unable to continue in operation. pharmacy, not the transfer of title between the pharmacy and patient at the point-of- AKS rule sale. V 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Kalderos' chargeback system provides a credible answer to these concerns, and our goal is to begin testing by September 2019 Kalderos' system will independently validate prices, at the retail pharmacy level, by comparing the price reported by PBM to the pharmacy against the manufacturer's contract management Introduction to Kalderos Kalderos' drug system of record The timeliness of Kalderos' system to evaluate, process, and pay discount point-of-sale discounts will ensure that pharmacies are not financially burdened by the chargeback system management Any errors discovered post-adjudication will be tracked via chargeback accumulators, allowing errors to be corrected when future chargebacks to the pharmacy are processed model 1v 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt AKS Rebate Rule: Part D & Medicaid McO Kalderos Chargeback Model Pro Kalderos' Chargeback E Pharmacy accepts Health Plan Manufacturer approves Manufacturer Kalderos' standard T&C for / TPP discount request, Kalderos discount management notifies PBM & pharmacy (accepting Kalderos' T&C of decision 3 5 for discount management will mirror pharmacy's Manufacturer pays experience of accepting 5 Kalderos discount amount PBM's standard network Kalderos pharmacy terms) Wholesaler PBM Kalderos passes payment to pharmacy Pharmacy submits request for chargeback (calculated as difference between WAC price and total amount collected from PBM & patient with supporting info) Pharmacy Kalderos validates discount 2 request, provides recommendation to manufacturer to pay or deny discount request in accordance with predefined rules set by manufacturer Patient LV 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt 2019 Kalderos LLC, This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Say Hello. Jeremy Docken Founder & CEO 773-934-3672 jdocken@kalderos.com kalderos.com From: Wear, Trevor L. Sent: Tuesday, May 7, 2019 2:51 PM To: 'Shochet, Lisa (CMS/CMCS)'; Jeremy Docken; Kolbe, Elizabeth; Coster, John M. (CMS/CMCS); Forman, Michael (CMS/CMCS); Swears, Whitney (CMS/CMCS); Simananda, Terry B.(CMS/CMCS); Bruce, Tamara L. (CMS/CMCS); Wellington, Andrea (CMS/CMCS); Sarraille, William Subject: RE: CONFIRMED - Call with Bill Sarraille re: Kalderos Attachments: 20190507_CMSUpdate.pdf Hello, Kalderos and Sidley are looking forward to our discussion tomorrow. In advance of the call, we wanted to share the attached slides with you, that will help facilitate the discussion. Thanks, Trevor TREVOR L. WEAR SIDLEY AUSTIN LLP +1 312 853 7101 twear@sidley.com -----Original Appointment----- From: Shochet, Lisa (CMS/CMCS) <Lisa.Shochet@cms.hhs.gov> Sent: Thursday, April 25, 2019 12:52 PM To: Shochet, Lisa (CMS/CMCS); Wear, Trevor L.; Jeremy Docken; Kolbe, Elizabeth; Coster, John M. (CMS/CMCS); Forman, Michael (CMS/CMCS); Swears, Whitney (CMS/CMCS); Simananda, Terry B.(CMS/CMCS); Bruce, Tamara L. (CMS/CMCS); Wellington, Andrea (CMS/CMCS); Sarraille, William Subject: FW: CONFIRMED - Call with Bill Sarraille re: Kalderos When: Wednesday, May 08, 2019 2:00 PM-3:00 PM (UTC-05:00) Eastern Time (US & Canada). Where: Dial-in Web Ex Meeting Link Below Sent with BlackBerry Work (www.blackberry.com) From: Shochet, Lisa (CMS/CMCS) Lisa.Shochet@cms.hhs.gov When: May 8, 2019 at 2:00 PM Subject: CONFIRMED - Call with Bill Sarraille re: Kalderos Location: Dial-in Web Ex Meeting Link Below From: Shochet, Lisa (CMS/CMCS) Sent: Thursday, April 25, 2019 5:12:54 PM UTC To: Shochet, Lisa (CMS/CMCS); Coster, John M. (CMS/CMCS); Forman, Michael (CMS/CMCS); Swears, Whitney (CMS/CMCS); Simananda, Terry B.(CMS/CMCS); Bruce, Tamara L. (CMS/CMCS); Wellington, Andrea (CMS/CMCS); Sarraille, William Subject: CONFIRMED - Call with Bill Sarraille re: Kalderos When: Wednesday, May 8, 2019 6:00 PM-7:00 PM. Where: Dial-in Web Ex Meeting Link Below ***DO NOT DELETE OR CHANGE ANY OF THE TEXT BELOW THIS LINE*** LISA Shochet has scheduled this WebEx meeting. CONFIRMED - Call with Bill Sarraille re: Kalderos Host: LISA Shochet Access Information 1. Please call the following number: WebEx: 1-877-267-1577 2. Follow the instructions you hear on the phone. Your WebEx Meeting Number: 999 050 442 ================================== To join from a Cisco VoIP enabled CMS Region or from CMS Central Office 1. Dial ext. 63100 Enter Meeting Number: Use Meeting WebEx Number provided above. ================================== To join this meeting online 1. Go to https://meetings.cms.gov/orion/joinmeeting.do? MTID=ba689dce60061ae557f6954d4b30b0e9 2. If requested, enter your name and email address. 3. If a password is required, enter the meeting password: (This meeting does not require a password.) 4. Click Join. 5. Follow the instructions that appear on your screen. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ This meeting may be recorded by the host. If you have questions, please contact the host. +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Hosts, need your host access code or key? Go to the meeting information page: https://meetings.cms.gov/orion/meeting/meetingInfo? MTID=44733d720c8abbb06ef28eea63ba360a Delivering the power of collaboration The meetings.cms.gov team Redefining how the business of 2 healthcare performs TM Jeremy Docken 773-934-3672 jdocken@kalderos.com Founder & CEO kalderos.com 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Kalderos & CMS Update Kalderos delivers technology that solves the Redefining challenges facing the US healthcare system. how the We work with healthcare providers, drug business of manufacturers, payers, and government agencies alike to increase transparency and restore trust healthcare lowering the cost of healthcare and enabling performs everyone to focus on improving the health of people. v 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Kalderos & CMS Update What We've Learned Since 2016 Today's Agenda The Role Of Point-Of-Sale Discounts 340B Eligible Claim Info: Key For Compliance How Point-Of-Sale Discounts Can Benefit All Stakeholders Next Steps 5 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOLA mpt What We've Learned Since 2016 LVZ 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 4 FOIA Exempt 5 3 Claims that require Proprietary algorithms additional verification and machine learning from covered entities is applied to flag are delivered to the potential issues entity through Grappa web app What We've Learned Since 2o16 Retroactively Data sets are 2 combined and stored managing 340B in a cloud environment duplicate s discounts Results of validation Disputed claims are tests are delivered to delivered to the manufacturers state for processing through reporting Multiple data sets are used as web app $ sources, including Kalderos proprietary data, state & lo federal data, and manufacturer data 7 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Before e Kalderos, significant duplicate discounts were missed, specifically in regards to managed Medicaid. Below are examples of how Kalderos' retroactive solution has helped three manufacturers identify, verify, and dispute non-compliant discounts more effectively. What We've Learned Since 2016 51% Our retroactive 7 48% solution has been successful 1,327% Pharma X Pharma Y Pharma Z Previously ID'ed Kalderos Newly ID'ed V 6 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Since we launched, we've verified approximately $40M 18% of 340B duplicate discounts What We've Learned Since 2o16 working with covered entities Sources of and states $29M of verified duplicate Medicaid 56% CE-Non MEF discounts, or 74% of all CE-MEF duplicate discounts duplicate CP discovered, originated from pharmacies that were not discounts listed in the Medicaid Exclusion File 25% 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt We hoped that by identifying root causes for why issues were occurring and communicating those issues to other stakeholders, systemic problems would be fixed. This is not happening. State / Where this stands after What we learned Covered Entity communicating issues What We've Learned Since 2016 Ohio / CE & state State encouraged health State unfairly blames Hopewell centers to dispense opioid covered entity for state's FQHC antagonist drugs to failure, and currently is cooperation & Medicaid patients, but did refusing to credit verified not have plan to prevent duplicate discounts coordination is not duplicate discounts getting better California / Significant duplicate Issue has been traced to Riverside DSH discounts related to PBM related to MCO in Riverside DSH pharmacies, region Riverside serves, yet even though Riverside used state refuses to engage claim flags in accordance MCO in dispute resolution with state requirements discussions K 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 8 FOIA Exempt After nearly two years of dispute resolution effort, What We've Learned Since 2o16 significant duplicate Current status discount disputes with states remain unresolved of duplicate $35,000,000 discount recovery Unresolved Disputes $5,000,000 Resolved Disputes Rebate Disputes 7 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt The Role of Point-of-Sale Discounts LVZ 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 10 FOIA Exempt On January 31, 2019 HHS OlG released an advanced print copy of a proposed rule redefining how Medicare Part D and managed Medicaid would provide cost-effective medications to patients The proposed rule, if enacted, would require PBMs and pharmacies The Role of Point-of-Sale Discounts OIG proposed to pass the lower fixed price negotiated by the PBM to the patient at the point-of-sale rule redefines PBM Pharmacy role of PBMs and Must negotiate fixed-price contracts, not % Must honor lower price negotiated on the off of list price beneficiary's behalf at the point-of-sale pharmacies Bona-fide service fee arrangements with Pharmacy to receive a "chargeback" from manufacturers allowed manufacturer to make-up difference between acquisition price and the reduced price Expected to be compensated by payer for collected from patient and PBM/plan's negotiation services via a fixed fee amount reimbursement not based off of list price 7 2019 Kalderos Inc. This document contains confidential and proprietary trade secrets of Kalderos. 11 FOIA Exempt The proposed rule defines chargeback as "a payment made directly or indirectly by a manufacturer to a dispensing pharmacy so that the total payment to the pharmacy ... is at least equal to the price agreed between plan sponsor and manufacturer" By allowing a chargeback to be a direct payment, the The Role of Point-of-Sale Discounts Administration is opening the door for new solutions to enter the Proposed rule market that provide an alternative to the wholesaler / distributor redefined as the chargeback facilitator chargeback to Wholesaler Chargeback Kalderos' Chargeback include point-of- Collects the minimum information Collects whatever information is necessary to necessary to determine which contract ensure right discount, right transaction in price is correct for a customer compliance with law & contract sale discounts Were not designed for point-of-sale Designed to be flexible, handling payer, point- discount effectuation of-sale, and patient discounts Designed to meet needs for wholesalers Designed to solve problems faced by all first, manufacturers second stakeholders Discounts provided as indirect payments, Discounts provided as payments, as desired by potentially causing pharmacies working pharmacies to reduce working capital capital challenges concerns of proposed rule 1 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 12 FOIA Exempt 340B Eligible Claim Info: Key for Compliance LVZ 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 13 FOIA Exempt Shortly after launching Kalderos, we found that providing 340B discounts as point-of-sale discounts could solve the 340B duplicate discount issue 340B Eligible Claim Info: Key to Compliance Moving beyond We came to this conclusion because we found ADAP rebates (which are 340B discounts provided in rebate form) are the easiest retroactive 340B duplicate discount to prevent since ADAP rebates and MDRP discounts are both pharmacy point-of-sale transactions, making it solutions to solve possible to match the ADAP claim with an MDRP claim to prove a 340B duplicate discount occurred 340B duplicate We decided that now was the time to create a mechanism to give discounts the 340B community the option of offering 340B discounts via point-of-sale discounts as an alternative to wholesaler chargebacks LK 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt GP, ERP, Contract Management, Pharmacy Switch API & Integration | 340B Eligible Claim Info: Key to Compliance Delivery & Applications Kalderos' drug discount EDI Aat I Spreadsheet Ledger Coordination & Payment Flat File Claims Data management Monitoring Direct payment Distribution NCPDP Validations Two-way Data External API Messaging solution Payment Aaee l Automation Enterprise Administration Share & Exchange | State Medicaid, PBM, Part D Plan, Pharmacy Vv 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Covered Entity 2 340B Eligible Claim Info: Key to Compliance Other Data Manufact Sources . Preventing duplicate Medicaid discounts Ledger Monitoring & Payment Coordination Facilitatior proactively Discount "request" Transactions are Manufacturer pays or 3 transactions are collected enhanced with rejects discount requests from multiple discount proprietary data and based upon an requestors and organized evaluated using Kalderos' assessment of data into a common ledger validation tests quality and/or compliance with law 7 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt 340B Eligible Claim Info: Key to Compliance Kalderos Chargeback Model Product Pharmacy Acquires Drug Payment Agreement Wholesaler purchases drug Medicaid Manufacturer from manufacturer at WAC Data Product shipped to wholesaler Pharmacy purchases Kalderos PBM Wholesaler product from wholesaler at WAC Wholesaler ships product to pharmacy Pharmacy Patient 7 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt 340B Eligible Claim Info: Key to Compliance Kalderos Chargeback Model Prod Pharmacy Dispenses Drug Pay Patient provides Medicaid PBM reimburses pharmacy Manufacturer 5 Medicaid card to pharmacy in accordance with SPA (FFS) or contract (MCO) Pharmacy runs patient's insurance card through Medicaid reimburses PBM 10 switch, PBM approves 10 for pharmacy payment transaction and returns to E Kalderos pharmacy patient's fixed PBM Wholesaler contract price and co-pay / co-insurance amount, if any Patient pays co-pay / co- insurance + Patient receives drug from Pharmacy 8 pharmacy 8 5 Patient V 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt 340B Eligible Claim Info: Key to Compliance Kalderos Chargeback Model Prod 340B Replenishment Chargeback Pay Covered entity retroactively Ag 11 Manufacturer pays 13 Manufacturer 15 Medicaid classifies script as 340B Kalderos difference and submits 340B between WAC and 340B 12 chargeback request to price 15 Kalderos; resubmits claim to state with claim 16 Kalderos passes payment identifiers if required to pharmacy 1 14 Kalderos 16 Kalderos' validations flag Wholesaler 12 PBM transaction as duplicate 340B + Medicaid and 11 notifies manufacturer of issue 14 Manufacturer decides to 13 11 Pharmacy pay 340B discount instead of the MDRP discount 14 Kalderos notifies pharmacy and PBM/Medicaid that transaction has been re- priced as 340B Patient LK 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt How Point-of-Sale Discounts Can Benefit All Stakeholders LVZ 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 20 FOIA Exempt States, covered entities, and manufacturers are equally frustrated at the challenges of preventing 340B duplicate discounts; no party wants 340B discounts to occur, yet they continue to occur How Point-Of-Sale Discounts Can Benefit All Stakeholders By enabling the exchange of 340B point-of-sale data, all parties The solution to can more easily work together to ensure duplicate discounts are 340B duplicate prevented, and manufacturers can act as the final monitoring control by identifying duplicate discounts before MDRP rebates discounts is are paid technology, not In addition to enabling a significant improvement in 340B and MDRP program compliance, there are additional financial policy benefits to all stakeholders possible by 340B point-of-sale discounts 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 2 FOIA Exempt Covered entities, states, and manufacturers have spent millions of dollars on ineffective 340B duplicate discount prevention; our solution, with costs born largely by manufacturers, will ensure that future process improvement by all parties will lead to common goal of compliance improvement Covered Entity State Manufacturer How Point-Of-Sale Discounts Can Benefit All Stakeholders Cost for Resolving 340B Manufacturers will implementation will duplicate Duplicate discount discounts allocate funds to be minimal, as all after the MDRP improve 340B program covered entities rebate has been paid compliance when they prevention and already maintain by the manufacturers believe their spend will 340B compliance via is time consuming help identify and monitoring controls point-of-sale and costly for states address known issues transactions By enabling states Manufacturers have combined into one "Good faith" and their contractors asked if they could pay manufacturer access to claim level for solutions that are solution inquiries will be data, a common effective for preventing, reduced / eliminated preventative solution not just retroactively as 340B eligibility can be implemented identifying, duplicate known before 340B by contractors and discounts discount paid implemented across states 7 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 22 FOIA Exempt Next Steps LVZ 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. 23 FOIA Exempt 2019 Kalderos Inc., This document contains confidential and proprietary trade secrets of Kalderos. FOIA Exempt Say Hello. Jeremy Docken Founder & CEO 773-934-3672 jdocken@kalderos.com kalderos.com From: Jeremy Docken <jdocken@kalderos.com> Sent: Thursday, August 22, 2019 7:16 AM To: Krista M Pedley, PharmD, MS; Wear, Trevor L.; Sarraille, William; Hardcastle, Elizabeth Kolbe Cc: Herzog, Michelle (HRSA); Garrison, Elizabeth (HRSA) Subject: Re: Proprietary and Confidential Meeting Request 2 Attachments: 20190821_Kalderos_HRSA.pdf Good morning- In case there are HRSA participants who will be calling in, we wanted to provide you with a copy of the slides we will be walking through with you this morning so you could share the slides with any off-site meeting participants. Please see attached. Note that we will be bringing printed copies of the presentation with us to share with your team. We may have someone dialing in on our end. Do you have a conference call number for this meeting already you could share with us? Regards, -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com On Fri, Aug 2, 2019 at 1:15 PM Jeremy Docken <jdocken@kalderos.com> wrote: Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dear Captain Pedley: I hope this email finds you well. I am writing to request a meeting to provide you with an update regarding our point-of-sale chargeback solution under development. During the meeting we'd like to cover: Our current test plan for our point-of-sale chargeback model; Initial covered entity reaction to our model; and Other operational considerations we are working on In addition, we are interested to hear from you and your team any thoughts or suggestions regarding how Kalderos can further assist the agency with program compliance. We are currently available the following days: Thursday, August 22 Friday, August 23 We look forward to hearing from you. In the meantime, please let us know if you have any questions. -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. Redefining how the business of healthcare performs TM Jeremy Docken 773-934-3672 jdocken@kalderos.com Founder & CEO kalderos.com 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt Today's Agenda Intro To Kalderos Redefining Point of Sale Discount Refresher how the CE Onboarding & Payment Process business of Test Plan & Schedule healthcare Initial Covered Entity Reaction performs Open Discussion Vz 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 3 Kalderos delivers technology that solves the Point of Sale Discount Refresher challenges facing the US healthcare system. Redefining We work with healthcare providers, drug how the manufacturers, payers, and government business of agencies alike to increase transparency and healthcare restore trust lowering the cost of healthcare and enabling everyone to focus on improving performs the health of people V 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt Drug Dispensed to Patient Drug qualified as 340B eligible Replenishment Order @ 340B Price Point of Sale Discount Refresher 340B 340B replenishment Decision to replenish @ 340B M price after rebate claims submitted to MFG for payer- timelines do not based rebate work with payer- Payer-Based Rebate based rebates MFG pays rebate Calculate MFG rebate amount & submit to MFG Reimbursement record used for rebate claim VZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Shortly after launching Kalderos, we found that providing 340B discounts as point-of-sale discounts could solve the 340B duplicate discount issue. Point of Sale Discount Refresher Solving the We came to this conclusion because we found ADAP rebates (which are 340B discounts provided in rebate form) are the easiest problem of 340B duplicate discount to prevent since ADAP rebates and MDRP discounts are both pharmacy point-of-sale transactions, making it duplicate possible to match the ADAP claim with an MDRP claim to prove a 340B duplicate discount occurred. discounts We decided that now was the time to create a mechanism to give the 340B community the option of offering 340B discounts via point-of-sale discounts as an alternative to wholesaler chargebacks 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt GP, ERP, Contract Management, Pharmacy Switch API & Integration | Point of Sale Discount Refresher Delivery & Applications Kalderos' drug EDI g discount API & Integration Spreadsheet Ledger Flat File Coordination & Payment management Claims Data > Monitoring NCPDP Distribution Direct payment Data Validations Two-way solution External API Payment Messaging Aabn I Automation Enterprise Administration | Share & Exchange | State Medicaid, PBM, Part D Plan, Pharmacy X 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher Kalderos Chargeback Model Agreement Framework Manufacturer subscribes to Manufacturer notifies Medicaid Manufacturer 3 Kalderos for 340B discount wholesaler it should no effectuation longer effectuate 340B discounts 3 Covered entities and their H 340B TPA / software vendor Kalderos PBM Wholesaler accept Kalderos' terms and conditions for service + Pharmacy Produ Paymer Data H Agreem TPA Patient 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher Kalderos Chargeback Model 340B Discount Payment Covered entity & TPA qualify Kalderos facilitates Medicaid Manufacturer 5 3 transaction as 340B eligible manufacturer payment of and submits claim to Kalderos discount (WAC - 340B) to covered entity Kalderos checks if MDRP 2 H discount already paid by Dispensing-level transaction Kalderos Wholesaler PBM manufacturer. In this case, no data allows manufacturer to MDRP discount had been paid identify and prevent 5 duplicate discounts with Manufacturer reviews 4 3 Medicaid, if necessary Kalderos recommendation to + Pharmacy pay and agrees to pay discount Pa Kalderos notifies covered 4 Dato entity that discount will be H Agre paid & provides payment TPA Patient remittence VK 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOiA Exempt CE Onboarding & Payment Process VK 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 10 We have been successful working with covered entities, who voluntarily participate in "good faith" compliance inquires, due to our deep understanding of 340B and emphasis that compliance is in all stakeholders' best interest CE Onboarding & Payment Process 2,100+ 300,000+ 50 Audit platform is Registered covered Medicaid transactions US states in which currently used by entity users of our reviewed by covered covered entities have Grappa application entities to-date responded to inquiries thousands of covered entities 3,000 2,100 1,000 600 2017 2018 2019 July 2019 EOY (f) Covered Entities on Kalderos Platform k 11 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt CE Onboarding & Payment Process Current/Active Purchasers of 340B Products Kalderos and the Manufacturer will notify covered entities using multiple communication methods of impending change that discounts wil no longer be available via the wholesaler and provide instructions for how the covered entity can register in order to receive discounts moving forward. Notification Letter Notification Email Website 30 days before discounts will no longer be available via wholesalers 30 days before discounts will no longer be available via wholesalers Kalderos will obtain from the Kalderos will attempt to email the AO the Kalderos will maintain a searchable list of manufacturer the 340B IDs of entities who same information included in the products which Kalderos is the 340B purchase products to be facilitated notification letter. The email link will discount effectuator on Kalderos website through our platform as entities who will include a "smart link" allowing the covered Manufacturer will include a notice on their receive notices entity to click on the link to set their website of their decision to use Kalderos password and complete additional Kalderos will mail the Authorizing Official to effectuate 340B discounts and onboarding steps ("AO") per the HRSA database a certified instructions for covered entities how they letter informing the entity the products for can create an account which 340B discounts will be effectuated via Kalderos platform, as well as for instructions for creating an account LV 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 12 Covered entities who have not previously purchased product OR do not have an existing Grappa account will be able to self- CE Onboarding & Payment Process register for a new account Covered entities Registration Website who desire to Covered entity will be able to enter their 340B parent ID into Kalderos receive a 340B website. If no account already exists for the covered entity, the covered entity AO will receive an email with instructions on how to confirm their email discount but have account and complete the registration process* If Kalderos does not have an email address for the AO the entity will be not previously notified that a Kalderos Client Relationship Manager will call the AO at the phone number in the HRSA database to complete the account creation process Kalderos is currently limited by emails that can be obtained via FOIA LV 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 13 CE Onboarding & Payment Process Covered Entity T&C Acceptance & Profile Setup 3 CE Accepts Terms User Pharmacy Setup Payment Account Payment and Conditions Creation Setup Effectuation The AO will be shown the The AO will be able to The AO will verify the list of The AO will provide bank Payments will be made via terms and conditions and invite users to the covered NPIs which are associated information to allow for ACH privacy policy for receiving entity's account and with their owned Kalderos to facilitate an Payment amount will be a discount via Kalderos designate permissions for pharmacies and contract ACH payment from the determined as WAC - 340B platform and will be able to each user pharmacies drug manufacturer to the ceiling/sub-ceiling price accept the terms and covered entity Users designated as Admin The NPI list managed by effective as of the date of conditions electronically users will have the ability to the covered entity will be dispense create an API key which will used to validate future allow for integration with discount requests existing software used by After initial profile set-up, the covered entity directly any Admin-level user will be to Kalderos' system able to update the list of NPIs associated with the covered entity by going to the covered entities profile in the application K 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 14 CE Onboarding & Payment Process Recipient Discount Request Process Timelines Month 1 Month 2 Month 3 First half of the month Second half of the First half of the month Second half of the First half of the month Second half of the : month month month I Batch 1 - Submission Remittance Statement Received Remittance Statement Batch 2 - Submission Received Remittance Statement Batch 3 - Submission & Resubmitted Corrected (Batch 1) Received Batch 4 - Submission & Remittance Statement Resubmitted Corrected (Batch 2) Received 15 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt CE Onboarding & Payment Process Recipient Discount Request Process (Excluding Reversals) 01. Claims submission period and automated 02. Claims reviewed O3. Discount Recipient receives O4. If necessary, correct and resubmit validations performed by Discount Payer Remittance Statement First half of the month H Second half of the Day 31-35 TBD Days month Discount Recipient has the Day 0 opportunity to Correct and Resubmit New request claims that were rejected submission What was What was window starts 0O requested approved and paid Validation 00 Original Discount Tests 0 0 Request must be What was rejected What was adjusted, reversed and not paid Upload Requests approved and paid Requests are collected + via API After Discount Payer has and organized into new paid the Invoice, the -or- B x upcoming invoice Discount Recipient Add New Requests (Discount Payer, receives a Remittance Discount Recipient can Statement after Invoice Discount Recipient Manually O view) includes needed has been paid -or- information to Failed validation tests create a new Upload Requests via and sent to Excluded discount request Software Bucket in the upcoming (e.g. if the claim was already subject to a MDRP discount) 0 Reversed discount request Discount request that has not Discount request that has been Requests that have been Discount requests that have Discount requests that have Discount requests that have yet gone through the initial accepted, passed initial returned to sender be cause passed all available checks been flagged and prioritized been approved for payment automated checks automated checks but not yet they have been rejected, and should be moved to for additional review ready for final review automated or manual payment 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt 16 Test Plan & Schedule LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 17 New Solution Overview & Progress Timeline Details Testing Phase Scope # Products # Covered Entities Validation with a CE that they can submit sample discount data Beta Phase 1* (Manufacturer effort at this stage is limited) CEs will send actual 340B discount requests for 1-2 products Manufacturer will approve/reject requests Beta Phase 2 1-2 1-3 No payments will actually be exchanged (CE will purchase drugs at 340B prices) Full functionality - discount effectuation and payment processing to CEs via Beta Phase 3 Kalderos 1-2 1-3 CEs will purchase in-scope products at list price Expansion to all CEs for in-scope products Soft Launch 2-5 All Incremental addition of products Opening of platform for any manufacturer to participate with any of their General Launch All All retail pharmacy products Kalderos has also initiated conversations with multiple covered entities, a TPA/software vendor, and a contract pharmacy to participate in testing. M 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 18 New Solution Overview & Progress Timeline May June July August September October November December January February March April May June 2019 2020 Manu/CE/Payer Platform Development Product Optimization Payment Processing Implementation General Availability CE signup for beta (NDAs signed w/3) Manu discussions for beta CE Data Validation (Beta 1) CE Data Validation (Beta 2) 340B Discount Effectuation for 1-2 products w/3 CEs(Beta 3) Soft Launch - expansion to allCEs Vv 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Initial Covered Entity Reaction LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 20 Current State Future State Covered entities must accumulate Our solution can pay 340B discounts based on units dispensed, removing enough units to allow for replenishment order lag that currently exists in replenishment model Initial Covered Entity Response Contract pharmacies exercise Our solution pays covered entities Feedback from significant influence over covered 340B discount, not contract entities pharmacies, increasing covered Covered Entities has entity negotiating power with pharmacy chains been positive States blame covered entities for Kalderos will dispute 340B duplicate causing 340B duplicate discounts discounts with states, using data we obtain from discount effectuation, reducing state/covered entity conflicts Covered entities are unsure if drug Our solution allows for compliance- manufacturers will later question if related questions to be addressed claims caused duplicate discounts up-front, reducing need to audit after the fact Vz 21 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Open Discussion LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 22 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Say Hello. Jeremy Docken Founder & CEO 773-934-3672 jdocken@kalderos.com kalderos.com From: Jeremy Docken <jdocken@kalderos.com> Sent: Monday, August 26, 2019 8:26 PM To: Pedley, Krista (HRSA) Cc: Wear, Trevor L.; Sarraille, William; Hardcastle, Elizabeth Kolbe; Herzog, Michelle (HRSA) Subject: Re: Proprietary and Confidential Meeting Request 2 Dear Captain Pedley- Thank you very much for meeting with us last week and for your follow up email. We appreciated meeting with you to provide an update on the Kalderos point-of-sale chargeback model. We are confident that it is consistent with the statute, and we look forward to following up with additional information regarding the model. Thank you, again, for your time. We look forward to continuing to work with you. Regards, -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com On Mon, Aug 26, 2019 at 10:06 AM Pedley, Krista (HRSA) <KPedley@hrsa.gov> wrote: Hello and thank you again for coming in to provide us an update on your work. We continue to appreciate the effort by Kalderos to resolve this complex problem in the market. I would like to reiterate that HRSA believes there still needs to be some policy and legal discussion around the model and what this might mean for a manufacturer to participate and remain compliant. HRSA suggested during the meeting that additional information is provided to better understand the legal position of this approach in order to evaluate the model and its compliance with statutory requirements. Thank you and we look forward to hearing from you (or manufacturers) regarding this matter. Krista M. Pedley, PharmD, MS CAPT, USPHS Director Office of Pharmacy Affairs Healthcare Systems Bureau 301-443-5294 From: Jeremy Docken <jdocken@kalderos.com> Sent: Monday, August 05, 2019 6:06 PM To: Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> Cc: Trevor L. Wear <twear@sidley.com>; William Sarraille <wsarraille@sidley.com>; Kolbe, Elizabeth <ekolbe@sidley.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov> Subject: Re: Proprietary and Confidential Meeting Request 2 Thank you, Captain Pedley. Moving you to bcc to spare your inbox. Hi Betty. 10-10:45 on the 22nd works for us. I will be joined by Trevor Wear in person and Bill Sarraille via telephone. Would you like to send a meeting invite to reserve the time or should I? Regards, Jeremy On Mon, Aug 5, 2019 at 10:27 AM Pedley, Krista (HRSA) <KPedley@hrsa.gov> wrote: Hello and thank you for your email. We are available on August 22nd from 10 10:45. Please let my assistant, Betty Garrison, know if this works for you all and to plan for logistics. Krista M. Pedley, PharmD, MS CAPT, USPHS Director Office of Pharmacy Affairs Healthcare Systems Bureau 301-443-5294 From: Jeremy Docken <jdocken@kalderos.com> Sent: Friday, August 02, 2019 1:15 PM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov>; Trevor L. Wear <twear@sidley.com>; William Sarraille <wsarraille@sidley.com>; Kolbe, Elizabeth <ekolbe@sidley.com> Subject: Proprietary and Confidential Meeting Request 2 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dear Captain Pedley: I hope this email finds you well. I am writing to request a meeting to provide you with an update regarding our point-of-sale chargeback solution under development. During the meeting we'd like to cover: Our current test plan for our point-of-sale chargeback model; Initial covered entity reaction to our model; and Other operational considerations we are working on In addition, we are interested to hear from you and your team any thoughts or suggestions regarding how Kalderos can further assist the agency with program compliance. We are currently available the following days: Thursday, August 22 Friday, August 23 We look forward to hearing from you. In the meantime, please let us know if you have any questions. -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re- transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. From: Wear, Trevor L. Sent: Thursday, September 19, 2019 5:29 AM To: Pedley, Krista (HRSA) Cc: Jeremy Docken; Sarraille, William; Kolbe, Elizabeth; Herzog, Michelle (HRSA); William.Burgess@hhs.gov Subject: Kalderos re: Follow-up to August 22, 2019 Meeting Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dear Captain Pedley: I hope this email finds you well. Thank you again for the helpful meeting on August 22, 2019 and your email dated August 26, 2019. As a follow up to our meeting, we wanted to provide a draft FAQ addressing the legal support of a point- of-sale chargeback model under the 340B program for your review and consideration. The FAQ intends to provide a response in the event that a covered entity inquires whether a manufacturer can effectuate the 340B price through a point-of-sale chargeback. Question: We understand that a 340B point-of-sale chargeback process has been developed. In that process, the covered entity will electronically send a 340B discount request to the processor, instead of a traditional wholesaler. The processor will assess whether a MDRP rebate has already been paid on the same unit, send an electronically invoice to the manufacturer reflecting the discount request, and then facilitate the electronic payment to the covered entity for the discount amount. Similar mechanisms requiring non-340B customers to identify their utilization before payment of a concession exists both in the 340B program, with respect to ADAPs, and outside the 340B program, with respect to concessions paid by manufacturers to pharmacy benefit managers, payers, hospitals, and physicians, as well as state Medicaid agencies. Can a manufacturer require that a covered entity receive the 340B ceiling or sub-ceiling price through a point-of-sale chargeback paid directly from the manufacturer to the covered entity after the covered entity has identified the utilization as being under the 340B program, as opposed to the traditional wholesaler chargeback model? Answer: Pursuant to section 340B(a)(1) of the Public Health Service Act, manufacturers must offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price. The 340B statute and regulations do not mandate whether the 340B ceiling price must be offered through a wholesaler chargeback, point-of-sale chargeback, or rebate mechanism. For example, ADAPs typically receive the 340B ceiling price through a rebate mechanism. Accordingly, HRSA does not dictate how the 340B ceiling price must be offered to covered entities and permits the use of wholesaler chargebacks, point-of-sale chargebacks, or rebates under the 340B program, so long as a given process is not discriminatory to 340B covered entities. If non-340B customers are subject to the same or similar systems, there is no discrimination in employing any one of these mechanisms with 340B covered entities. However, if the same or similar systems are not applied to non-340B customers, a system may be deemed discriminatory. If discriminatory, a manufacturer could be subject to civil monetary penalties under 42 C.F.R. 10.11. We have also been speaking with Dr. Thomas Keane and he requested that we prepare a background letter that speaks to the problem with duplicate discounts in the 340B program, how Kalderos solves that problem, and the legal support for Kalderos model. We plan to share with you a copy of that legal analysis once we share it with Dr. Keane. It notes, for instance, that, in the case where a Medicaid managed care rebate has been paid, after assessing the issue, Kalderos would nevertheless facilitate payment of the 340B discount. In the meantime, please do not hesitate to reach out with any questions or if we can be of any assistance. Best regards, Trevor TREVOR L. WEAR SIDLEY AUSTIN LLP One South Dearborn Chicago, IL 60603 +1 312 853 7101 twear@sidley.com www.sidley.com From: Sarraille, William Sent: Friday, September 20, 2019 2:17 PM To: Thomas.Keane@hhs.gov Cc: 'Jeremy Docken'; Wear, Trevor L. Subject: Letter re: Kalderos Solution to 340B Duplicate Discount Problem Attachments: Kalderos Letter (9.20.19).pdf Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dear Dr. Keane, Thank you again for speaking with us on August 29th. As we discussed, please see attached a background letter that speaks to the problem with duplicate discounts in the 340B program, how Kalderos solves that problem, and the legal support for Kalderos solution. Once you have had a chance to review, we would be happy to schedule a time to discuss to get your thoughts and feedback. Given our ongoing discussions with HRSA, we plan to share this background letter with Captain Pedley today as well. Please do not hesitate to reach out with any questions or if we can be of any assistance. Best regards, Bill WILLIAM A. SARRAILLE Partner SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, DC 20005 +1 202 736 8195 wsarraille@sidley.com www.sidley.com SIDLEY AUSTIN LLP 1501 K STREET, N.W. WASHINGTON, D.C. 20005 +1 202 736 8000 +1 202 736 8711 FAX AMERICA ASIA PACIFIC EUROPE WSARRAILLE@SIDLEY.COM +1 202 736 8195 Sidley Austin (DC) LLP is a Delaware limited liability partnership doing business as Sidley Austin LLP and practicing in affiliation with other Sidley Austin partnerships. Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise September 20, 2019 Dr. Thomas Keane Policy Advisor Immediate Office of the Secretary Department of Health and Human Services 200 Independence Ave. SW Washington, DC 20201 Dear Dr. Keane: Thank you for speaking with us and continuing the dialogue on Kalderos efforts to solve the 340B Programs duplicate discount problem. Below, we discuss the challenges the Department of Health and Human Services (HHS), the Health Resources Services Administration (HRSA), and the 340B Program face with 340B duplicate discounts; how Kalderos will address these challenges; and the legal support for Kalderos solution. Duplicate Discounts are a Significant Problem One of the core challenges that the 340B Program faces is its inability, despite making significant efforts, to identify effectively when Covered Entities and state Medicaid agencies both seek to receive a 340B chargeback and a Medicaid Drug Rebate Program (MDRP) rebate on the same dispensed unit. This intractable problem is referred to as the duplicate discount issue, and it has eroded confidence in the 340B Program. The 340B Statute1 and the MDRP Statue2 prohibit duplicate discounts, meaning that manufacturers are not required to provide a 340B price and a MDRP rebate on the same dispensed unit, but, notwithstanding that, duplicate discounts continue to be a widespread problem, as evidenced by HRSAs own audit findings.3 The duplicate discount problem exists and persists despite the availability of the Medicaid Exclusion File (MEF), which is designed to be used to exclude utilization purchased by Covered Entities at 340B prices from the MDRP rebate process.4 Unfortunately, there can be no debate that the current system is broken. As the Medicaid and CHIP Payment and Access Commission stated in a recent 1 42 U.S.C. 256b(a)(5)(A)(i). 2 42 U.S.C. 1396r-8(j)(1). 3 See HRSA, Program Integrity: FY18 Audit Results, available at https://www.hrsa.gov/opa/program-integrity/audit-results/fy- 18-results.html. For example, in 2018 alone, HRSA found adverse findings relating to duplicate discounts in about a third of covered entity audits. Id. 4 See HRSA, Notice Regarding the Section 340B Drug Pricing ProgramProgram Guidance Clarification, 65 Fed. Reg. 13983, 13984 (Mar. 15, 2000) (stating with respect to the clarification of the use of the MEF to prevent duplicate discounts that[t]his policy release does not apply to the prevention of duplicate discounts that may occur under MCOs.). Page 2 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise report, states have raised concerns that the MEF can be inaccurate or outdated,5 and the MEF does not apply to drugs dispensed by contract pharmacies or to drugs paid for by Medicaid managed care, both of which have expanded significantly over the past decade. 6 These duplicate discounts are inevitably and unnecessarily contributing to higher pharmaceutical costs. The Genesis Case Creates an Inflection Point The recent Genesis case appears to demonstrate that HRSA does not have the ability to ensure compliance through its audit function.7 After HRSA issued a final audit report finding that Genesis failed to provide auditable records and determined that Genesis was no longer eligible to participate in the 340B Program, Genesis filed a complaint questioning HRSAs authority to take those steps. In the face of these allegations, HRSA voided its audit findings and Genesis was readmitted to the 340B Program. Accordingly, with the MEF having failed as a mechanism8 and with HRSAs audit authority called into question, it is clear that the duplicate discount problem cannot be solved without a different solution being identified. At a Breaking Point Further, we are aware that 340B Health is now taking the position that there is no legal authority in the 340B statute to support manufacturers assessing covered entity compliance with the prohibition against duplicate discounts as it relates to 340B MCO claims.9 The threat this creates to the fundamental integrity of the 340B Program is self-evident. Approximately 70 percent of Medicaid enrollment is in managed care. Information from Covered Entities is essential to identify duplicate discounts, as a duplicate discount cannot be identified without knowing that a 340B discount has been taken on the same utilization, a fact that only the Covered Entity knows.10 340B Healths position is intended to prevent the 340B Program or manufacturers from auditing Covered Entities regarding duplicate discounts on managed care utilization, or even asking about that utilization. If Covered Entities need not even participate in efforts to identify managed care duplicate discounts, a broken system will be beyond repair. This reinforces the urgency of the situation, and the need to address it. 5 MACPAC, Issue Brief, The 340B Drug Pricing Program and Medicaid Drug Rebate Program: How They Interact (May 2018), available at https://www.macpac.gov/wp-content/uploads/2018/05/340B-Drug-Pricing-Program-and-Medicaid-Drug-Rebate- Program-How-They-Interact.pdf. 6 Id. 7 Genesis Health Care, Inc. v. Alex M. Azar (U.S. Dist. Ct. S.C. 2019). 8 We also note that HRSA has acknowledged that during an audit HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care. As a result, it cannot ensure compliance with this requirement for the majority of Medicaid prescriptions, which occur under managed care. See GAO, Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement (June 2018). 9 340B Health, Comments to HRSA Proposed Information Collection Request: 340B Drug Pricing Program Reporting Requirements, OMB Number 0915-0176-Extension, 84 Fed. Reg. 28308, (Aug. 18, 2019). 10 See Kaiser Family Foundation, Total Medicaid MCO Enrollment for 2017, available at https://www.kff.org/data- collection/medicaid-managed-care-market-tracker/. Page 3 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Kalderos Solution to the Duplicate Discount Problem Given the intractable nature of the duplicate discount problem, the threat that the Genesis case has effectively eliminated HRSAs audit process as a means to address duplicate discounts, and 340B Healths insistence that the prohibition on duplicate discounts does not apply to Medicaid managed care utilization, the need for a viable solution is critical and urgent. Kalderos is in the advanced stages of developing a technology solution that will address the challenges facing the 340B Program. Kalderos will administer a cooperative manufacturer-covered entity platform providing 340B discounts as point-of-sale chargebacks that will identify and address 340B duplicate discounts fairly and promptly. Kalderos solution would mirror the same, basic process used by most manufacturers to validate existing contract concessions to pharmacy benefit managers (PBMs), payors, hospitals, physicians, and among other valued customers under commercial rebate agreements; AIDS Drug Assistance Programs under 340B agreements; and in processing state Medicaid agency invoices. For drugs of a manufacturer participating in Kalderos solution, Covered Entities would not receive 340B prices through wholesalers, that have not and cannot identify duplicate discounts, but rather through a point-of-sale chargeback that, among other advantages, will make payments directly to Covered Entities. Specifically, when a Covered Entity dispenses to a 340B eligible patient a manufacturers drug participating in Kalderos solution, the Covered Entity will electronically send a discount request to Kalderos, instead of a traditional wholesaler. Upon receipt of the request, Kalderos will assess whether a MDRP rebate has already been paid on the same unit, electronically send an invoice to the manufacturer reflecting the discount request, and then use one or more third-parties to facilitate the payment to the Covered Entity for the discount amount. Covered Entities will generally receive payment within a month of the drug being dispensed. If it turns out that a Medicaid managed care rebate has already been paid, the manufacturer will still authorize the 340B discount and pursue the duplicate rebate from the state. Duplicate discounts will be accurately identified through this process, because Kalderos will be able to verify whether a MDRP rebate has already been paid on the same unit using information Kalderos receives from the manufacturers reflecting MDRP rebate requests. Similarly, once Kalderos has record of a 340B discount payment being made to a Covered Entity, Kalderos can identify when payment of a subsequent MDRP rebate request from a Medicaid agency (particularly on Medicaid manage care utilization) would create a duplicate discount. Using information reflecting both 340B discount and MDRP rebate requests and payments, Kalderos will maintain an auditable ledger that will produce prompt and complete reconciliations. Kalderos will grant both Covered Entities and Medicaid agencies (and their third-party administrators) electronic access to the ledger to ensure transparency and open communication between and among all the relevant parties. This new infrastructure will bring compliance to the 340B Program and lessen the operational demands on Covered Entities and Medicaid agencies in attempting to deal subsequently with duplicate discounts. Page 4 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Legal Support for Kalderos Solution In the Affordable Care Act (ACA), Congress amended the 340B Statute to require participating manufacturers, among other things, to offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.11 Importantly, the statute itself does not dictate how the price must be offered. It does not mandate the use of wholesaler chargebacks, point-of-sale chargebacks, or rebates. Further, no regulations mandate the use of wholesaler chargebacks, point-of-sale chargebacks, or rebates. As the plain language of the statute indicates, Congress wisely enabled manufacturers to use any mechanism they choose to offer the required price.12 The plain language of the 340B Statute speaks only to a requirement that manufacturers offer the ceiling price or a lower price where a drug is made available to any other, non-Covered Entity.13 Thus, the statute does not in any way limit the use of point-of-sale chargebacks. All that the statute, by its express terms, requires is that the 340B price or a lower price be offer[ed].14 Under Kalderos solution, the 340B price, in fact, will be offered to Covered Entities.15 11 42 U.S.C. 256b(a)(1). 12 340B Healths position that Covered Entities have no obligation with respect to duplicate discounts on Medicaid managed care utilization is based on 340B Healths argument that the obligation that Covered Entities not request payment under Medicaid for a drug that is subject to a MDRP rebate is not applicable to Medicaid managed care utilization. 42 U.S.C. 256b(a)(5). We do not need to list the many ways in which 340B Healths arguments are contrary to the plain language of the 340B Statute, because the provision that 340B Health seeks to distinguish is irrelevant to the analysis of Kalderos solution. Kalderos solution is not based on that provision, and the solution is not designed to prevent Covered Entities from making requests for payment under Medicaid. Manufacturers can, under the plain language of the 340B Statute, offer a 340B price, without regard to the mechanism chosen, including an accompanying request that the Covered Entity identify the utilization as, in fact, being 340B in nature. HRSAs anti- discrimination policy, even putting aside the question of the Agencys authority to issue it, only seeks to limit manufacturer action that is discriminatory against Covered Entities. For the reasons provided above, there is nothing discriminatory in the point-of-sale chargeback mechanism. Like other, non- Covered Entities seeking price concessions from a manufacturer, Covered Entities need only confirm that the drug on which it seeks the discount was purchased under the program that generates the discount. 13 42 U.S.C. 256b(a)(1). 14 Id. 15 Kalderos solution also is completely consistent with the remarks of then Chairman Henry Waxman of the House Energy and Commerce Committee at the time the must offer provision was passed: I want to clarify our intent here in cases where there may be a drug shortage. Were not saying that 340B entities automatically go to front of the line, but we are saying manufacturers cannot send them to the back of the line either. With regard to supply shortages and drug availability manufactures must treat 340B entities the same way they treat all other customers. As the legislation moves forward, Im happy to continue working on this language to make sure that our intent is clear and that these integrity revisions improve the 340B program. Statement of Chairman Waxman, House Energy and Commerce Committee Mark-Up of H.R. 3200, Sept. 23, 2009, Video Stream available at http://democrats.energycommerce.house.gov/index.php?q=markup/energy-and-commerce- committee-open-markup-session (last visited Jul. 15, 2011) (transcription) [hereinafter Chairman Waxmans Remarks] (emphasis added). Page 5 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Indeed, the plain language of the statute acknowledges that alternatives to traditional chargebacks may be employed. Although the statute speaks of a single identification system by which Covered Entities may be identified by manufacturers and the Secretary, the statute specifically contemplates multiple mechanisms facilitating the ordering, purchasing, and delivery of covered outpatient drugs.16 The fact that the options for ordering, purchasing, and delivery are not limited to traditional chargebacks is established by the plain language of the statute, which lists chargebacks as a non-exclusive option.17 As noted, while neither the 340B Statute nor the 340B regulations require the use of wholesaler chargebacks, HRSA has issued various sub-regulatory guidances since the 340B Programs inception. In 1994 sub-regulatory guidance, for instance, HRSA stated, without citing statutory authority, [m]anufacturers may not single out covered entities from their other customers for restrictive conditions that would undermine the statutory objective.18 HRSA also stated, manufacturers must not place limitations on the transactions (e.g., minimum purchase amounts) which would have the effect of discouraging entities from participating in the discount program.19 In 2012, HRSA released a 340B Program Notice Release that stated allocation procedures, not relevant here, must demonstrate that 340B providers are treated the same as non-340B providers.20 Kalderos solution is not inconsistent with these statements from HRSA because Kalderos solution is not discriminatory. Kalderos solution, in fact, is entirely consistent with the manner in which many customers that are non-Covered Entities have their price concessions verified for appropriateness. Indeed, non-Covered Entity customers, such as PBMs and payors, participate in similar systems, even though those non-Covered Entity customers have a lower incidence of duplicate discounts. If HRSA were to require only traditional wholesaler chargebacks as a mechanism to effectuate 340B prices, this would constitute, not anti-discrimination, but a preference for Covered Entities over other customers. There is no statutory basis for such a preference.21 It would be an ultra vires act and a violation of the Administrative Procedures Act. The Chairmans intent, directed specifically to drug shortages, supply shortages, and drug availability, will in no way be undermined by Kalderos solution, which in no way restricts a Covered Entitys ability to obtain product. 16 42 U.S.C. 256b(d)(2)(B)(iv). 17 Id. (stating that the mechanisms to order, purchase, and deliver covered outpatient drugs includ[es] chargebacks), see e.g., Fed. Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 100 (1941) ([T]he term including is not one of all- embracing definition, but connotes simply an illustrative application of the general principle); accord Alabama v. North Carolina, 560 U.S. 330, 340-41 (2010); see also Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (The text employs the terms including and such as . . . to indicate the illustrative and not limitative function of the examples given); Masters Pharm., Inc. v. DEA, 861 F.3d 206, 221 (D.C. Cir. 2017) ([I]t is well established that the word include often precedes a list of illustrative examples, rather than an exclusive list of indicia of an identified wrong); Cobell v. Norton, 240 F.3d 1081, 1100 (D.C. Cir. 2001) (It is hornbook law that the use of the word including indicates that the specified list . . . that follows is illustrative, not exclusive) (quoting Puerto Rico Maritime Shipping Auth. v. ICC, 645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981)); United States v. $215,587.22 In U.S. Currency, 306 F. Supp. 3d 213 (D.D.C. 2018) (same). 18 59 Fed. Reg. 25110, 25113 (May 13, 1994). 19 Id. 20 See HRSA, 340B Program Notice Release No. 2011-1.1 (May. 23, 2012), available at https://www.hrsa.gov/opa/programrequirements/policyreleases/nondiscrimination05232012.pdf. 21 Further, Chairman Waxmans comments noted earlier, when addressing the intent of the must offer language from a shortage perspective, specifically disclaimed any intent to create a preference for Covered Entities. Chairman Waxmans Remarks, supra note 12 (noting an intent not to put Covered Entities at the front of the line in a shortage). Page 6 Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise * * * In short, we believe that Kalderos solution using a point-of-sale chargeback is fully consistent with the statutory requirement that manufacturers offer the 340B price to Covered Entities, and we believe that Kalderos solution will do so in a way that is fundamentally more effective than current practice, which has proved itself ineffective and defective. My client would appreciate confirmation that its model is consistent with the statute. Thank you for your review of this important matter. Please feel free to contact me with any questions. Best regards, William A. Sarraille Partner Cc: Jeremy Docken, Founder and CEO, Kalderos, Inc. Trevor Wear, Partner, Sidley Austin LLP Captain Krista Pedley, Director, Office of Pharmacy Affairs, Health Resources and Services Administration William Burgess, Office of General Counsel, Department of Health and Human Services From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Sent: Thursday, September 26, 2019 12:47 PM To: Wear, Trevor L. Cc: Jeremy Docken; Sarraille, William; Hardcastle, Elizabeth Kolbe; Herzog, Michelle (HRSA); Burgess, William (HHS/OGC) Subject: RE: Kalderos re: Follow-up to August 22, 2019 Meeting Hello Thank you for sharing this with us, along with the legal analysis that was shared with Mr. Keane. We plan to review all of the information provided and will plan to respond once we do so. Krista M. Pedley, PharmD, MS CAPT, USPHS Director Office of Pharmacy Affairs Healthcare Systems Bureau 301-443-5294 From: Wear, Trevor L. <twear@sidley.com> Sent: Thursday, September 19, 2019 6:29 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Sarraille, William <wsarraille@sidley.com>; Kolbe, Elizabeth <ekolbe@sidley.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Burgess, William (HHS/OGC) <William.Burgess@hhs.gov> Subject: Kalderos re: Follow-up to August 22, 2019 Meeting Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dear Captain Pedley: I hope this email finds you well. Thank you again for the helpful meeting on August 22, 2019 and your email dated August 26, 2019. As a follow up to our meeting, we wanted to provide a draft FAQ addressing the legal support of a point- of-sale chargeback model under the 340B program for your review and consideration. The FAQ intends to provide a response in the event that a covered entity inquires whether a manufacturer can effectuate the 340B price through a point-of-sale chargeback. Question: We understand that a 340B point-of-sale chargeback process has been developed. In that process, the covered entity will electronically send a 340B discount request to the processor, instead of a traditional wholesaler. The processor will assess whether a MDRP rebate has already been paid on the same unit, send an electronically invoice to the manufacturer reflecting the discount request, and then facilitate the electronic payment to the covered entity for the discount amount. Similar mechanisms requiring non-340B customers to identify their utilization before payment of a concession exists both in the 340B program, with respect to ADAPs, and outside the 340B program, with respect to concessions paid by manufacturers to pharmacy benefit managers, payers, hospitals, and physicians, as well as state Medicaid agencies. Can a manufacturer require that a covered entity receive the 340B ceiling or sub-ceiling price through a point-of-sale chargeback paid directly from the manufacturer to the covered entity after the covered entity has identified the utilization as being under the 340B program, as opposed to the traditional wholesaler chargeback model? Answer: Pursuant to section 340B(a)(1) of the Public Health Service Act, manufacturers must offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price. The 340B statute and regulations do not mandate whether the 340B ceiling price must be offered through a wholesaler chargeback, point-of-sale chargeback, or rebate mechanism. For example, ADAPs typically receive the 340B ceiling price through a rebate mechanism. Accordingly, HRSA does not dictate how the 340B ceiling price must be offered to covered entities and permits the use of wholesaler chargebacks, point-of-sale chargebacks, or rebates under the 340B program, so long as a given process is not discriminatory to 340B covered entities. If non-340B customers are subject to the same or similar systems, there is no discrimination in employing any one of these mechanisms with 340B covered entities. However, if the same or similar systems are not applied to non-340B customers, a system may be deemed discriminatory. If discriminatory, a manufacturer could be subject to civil monetary penalties under 42 C.F.R. 10.11. We have also been speaking with Dr. Thomas Keane and he requested that we prepare a background letter that speaks to the problem with duplicate discounts in the 340B program, how Kalderos solves that problem, and the legal support for Kalderos model. We plan to share with you a copy of that legal analysis once we share it with Dr. Keane. It notes, for instance, that, in the case where a Medicaid managed care rebate has been paid, after assessing the issue, Kalderos would nevertheless facilitate payment of the 340B discount. In the meantime, please do not hesitate to reach out with any questions or if we can be of any assistance. Best regards, Trevor TREVOR L. WEAR SIDLEY AUSTIN LLP One South Dearborn Chicago, IL 60603 +1 312 853 7101 twear@sidley.com www.sidley.com **************************************************************************** ************************ This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************** ************************ From: Jeremy Docken <jdocken@kalderos.com> Sent: Tuesday, December 10, 2019 8:47 AM To: Krista M Pedley, PharmD, MS Cc: Herzog, Michelle (HRSA); Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: Kalderos: Updated slides, suggested next steps Attachments: 20190821_Kalderos_HRSA_With_201911_Additional (1).pdf Hi Captain Pedley- Thank you very much for your time in meeting with us in November. We appreciate your engagement and feedback. As requested, we have attached the slides we presented during the meeting. We note that these are the same slides we presented at the prior meeting on August 21, with one additional slide at the end. In addition, we would be happy to schedule additional meetings to keep you informed of our progress. In the lead up to the initial launch of our chargeback model, we would propose monthly meetings beginning in January and running through March. Once we have launched the model and are working on making it generally available, we could schedule additional meetings. Finally, we continue to appreciate your feedback on our chargeback model. To that end, we would appreciate if we could schedule a brief call that includes our product design team to discuss the lessons learned by HRSA through OPAIS, as discussed at the meeting. Please let us know too if there is certain information that would be helpful for us to provide to you. We also plan to reach out to CMS and certain state Medicaid agencies in the coming weeks. We are speaking with our covered entity beta partners to explore if they would be open to joining us during our meeting with CMS, so that CMS can hear from multiple stakeholders how our solution is both easier on all parties to implement and much more effective at actually preventing duplicate discounts. We look forward to continuing our discussions. In the meantime, please let us know if you have any questions. Many thanks, -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. Redefining how the business of healthcare performs TM Jeremy Docken 773-934-3672 jdocken@kalderos.com Founder & CEO kalderos.com 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt Today's Agenda Intro To Kalderos Redefining Point of Sale Discount Refresher how the CE Onboarding & Payment Process business of Test Plan & Schedule healthcare Initial Covered Entity Reaction performs Open Discussion Vz 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 3 Kalderos delivers technology that solves the Point of Sale Discount Refresher challenges facing the US healthcare system. Redefining We work with healthcare providers, drug how the manufacturers, payers, and government business of agencies alike to increase transparency and healthcare restore trust lowering the cost of healthcare and enabling everyone to focus on improving performs the health of people V 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt Drug Dispensed to Patient Drug qualified as 340B eligible Replenishment Order @ 340B Price Point of Sale Discount Refresher 340B 340B replenishment Decision to replenish @ 340B M price after rebate claims submitted to MFG for payer- timelines do not based rebate work with payer- Payer-Based Rebate based rebates MFG pays rebate Calculate MFG rebate amount & submit to MFG Reimbursement record used for rebate claim VZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Shortly after launching Kalderos, we found that providing 340B discounts as point-of-sale discounts could solve the 340B duplicate discount issue. Point of Sale Discount Refresher Solving the We came to this conclusion because we found ADAP rebates (which are 340B discounts provided in rebate form) are the easiest problem of 340B duplicate discount to prevent since ADAP rebates and MDRP discounts are both pharmacy point-of-sale transactions, making it duplicate possible to match the ADAP claim with an MDRP claim to prove a 340B duplicate discount occurred. discounts We decided that now was the time to create a mechanism to give the 340B community the option of offering 340B discounts via point-of-sale discounts as an alternative to wholesaler chargebacks 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt GP, ERP, Contract Management, Pharmacy Switch API & Integration | Point of Sale Discount Refresher Delivery & Applications Kalderos' drug EDI g discount API & Integration Spreadsheet Ledger Flat File Coordination & Payment management Claims Data > Monitoring NCPDP Distribution Direct payment Data Validations Two-way solution External API Payment Messaging API & Integration Automation Enterprise Administration | Share & Exchange | State Medicaid, PBM, Part D Plan, Pharmacy 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher Kalderos Chargeback Model Agreement Framework Manufacturer subscribes to Manufacturer notifies Medicaid Manufacturer 3 Kalderos for 340B discount wholesaler it should no effectuation longer effectuate 340B discounts 3 Covered entities and their H 340B TPA / software vendor Kalderos PBM Wholesaler accept Kalderos' terms and conditions for service + Pharmacy Produ Paymer Data H Agreem TPA Patient 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Point of Sale Discount Refresher Kalderos Chargeback Model 340B Discount Payment Covered entity & TPA qualify Kalderos facilitates Medicaid Manufacturer 5 3 transaction as 340B eligible manufacturer payment of and submits claim to Kalderos discount (WAC - 340B) to covered entity Kalderos checks if MDRP 2 H discount already paid by Dispensing-level transaction Kalderos Wholesaler PBM manufacturer. In this case, no data allows manufacturer to MDRP discount had been paid identify and prevent 5 duplicate discounts with Manufacturer reviews 4 3 Medicaid, if necessary Kalderos recommendation to + Pharmacy pay and agrees to pay discount Pa Kalderos notifies covered 4 Dato entity that discount will be H Agre paid & provides payment TPA Patient remittence VK 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOiA Exempt CE Onboarding & Payment Process VK 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 10 We have been successful working with covered entities, who voluntarily participate in "good faith" compliance inquires, due to our deep understanding of 340B and emphasis that compliance is in all stakeholders' best interest CE Onboarding & Payment Process 2,100+ 300,000+ 50 Audit platform is Registered covered Medicaid transactions US states in which currently used by entity users of our reviewed by covered covered entities have Grappa application entities to-date responded to inquiries thousands of covered entities 3,000 2,100 1,000 600 2017 2018 2019 July 2019 EOY (f) Covered Entities on Kalderos Platform k 11 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt CE Onboarding & Payment Process Current/Active Purchasers of 340B Products Kalderos and the Manufacturer will notify covered entities using multiple communication methods of impending change that discounts wil no longer be available via the wholesaler and provide instructions for how the covered entity can register in order to receive discounts moving forward. Notification Letter Notification Email Website 30 days before discounts will no longer be available via wholesalers 30 days before discounts will no longer be available via wholesalers Kalderos will obtain from the Kalderos will attempt to email the AO the Kalderos will maintain a searchable list of manufacturer the 340B IDs of entities who same information included in the products which Kalderos is the 340B purchase products to be facilitated notification letter. The email link will discount effectuator on Kalderos website through our platform as entities who will include a "smart link" allowing the covered Manufacturer will include a notice on their receive notices entity to click on the link to set their website of their decision to use Kalderos password and complete additional Kalderos will mail the Authorizing Official to effectuate 340B discounts and onboarding steps ("AO") per the HRSA database a certified instructions for covered entities how they letter informing the entity the products for can create an account which 340B discounts will be effectuated via Kalderos platform, as well as for instructions for creating an account LV 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 12 Covered entities who have not previously purchased product OR do not have an existing Grappa account will be able to self- CE Onboarding & Payment Process register for a new account Covered entities Registration Website who desire to Covered entity will be able to enter their 340B parent ID into Kalderos receive a 340B website. If no account already exists for the covered entity, the covered entity AO will receive an email with instructions on how to confirm their email discount but have account and complete the registration process* If Kalderos does not have an email address for the AO the entity will be not previously notified that a Kalderos Client Relationship Manager will call the AO at the phone number in the HRSA database to complete the account creation process Kalderos is currently limited by emails that can be obtained via FOIA LV 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 13 CE Onboarding & Payment Process Covered Entity T&C Acceptance & Profile Setup 3 CE Accepts Terms User Pharmacy Setup Payment Account Payment and Conditions Creation Setup Effectuation The AO will be shown the The AO will be able to The AO will verify the list of The AO will provide bank Payments will be made via terms and conditions and invite users to the covered NPIs which are associated information to allow for ACH privacy policy for receiving entity's account and with their owned Kalderos to facilitate an Payment amount will be a discount via Kalderos designate permissions for pharmacies and contract ACH payment from the determined as WAC - 340B platform and will be able to each user pharmacies drug manufacturer to the ceiling/sub-ceiling price accept the terms and covered entity Users designated as Admin The NPI list managed by effective as of the date of conditions electronically users will have the ability to the covered entity will be dispense create an API key which will used to validate future allow for integration with discount requests existing software used by After initial profile set-up, the covered entity directly any Admin-level user will be to Kalderos' system able to update the list of NPIs associated with the covered entity by going to the covered entities profile in the application K 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 14 CE Onboarding & Payment Process Recipient Discount Request Process Timelines Month 1 Month 2 Month 3 First half of the month Second half of the First half of the month Second half of the First half of the month Second half of the : month month month I Batch 1 - Submission Remittance Statement Received Remittance Statement Batch 2 - Submission Received Remittance Statement Batch 3 - Submission & Resubmitted Corrected (Batch 1) Received Batch 4 - Submission & Remittance Statement Resubmitted Corrected (Batch 2) Received 15 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt CE Onboarding & Payment Process Recipient Discount Request Process (Excluding Reversals) 01. Claims submission period and automated 02. Claims reviewed O3. Discount Recipient receives O4. If necessary, correct and resubmit validations performed by Discount Payer Remittance Statement First half of the month H Second half of the Day 31-35 TBD Days month Discount Recipient has the Day 0 opportunity to Correct and Resubmit New request claims that were rejected submission What was What was window starts 0O requested approved and paid Validation 00 Original Discount Tests 0 0 Request must be What was rejected What was adjusted, reversed and not paid Upload Requests approved and paid Requests are collected + via API After Discount Payer has and organized into new paid the Invoice, the -or- B x upcoming invoice Discount Recipient Add New Requests (Discount Payer, receives a Remittance Discount Recipient can Statement after Invoice Discount Recipient Manually O view) includes needed has been paid -or- information to Failed validation tests create a new Upload Requests via and sent to Excluded discount request Software Bucket in the upcoming (e.g. if the claim was already subject to a MDRP discount) 0 Reversed discount request Discount request that has not Discount request that has been Requests that have been Discount requests that have Discount requests that have Discount requests that have yet gone through the initial accepted, passed initial returned to sender be cause passed all available checks been flagged and prioritized been approved for payment automated checks automated checks but not yet they have been rejected, and should be moved to for additional review ready for final review automated or manual payment 1v 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt 16 Test Plan & Schedule LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 17 New Solution Overview & Progress Timeline Details Testing Phase Scope # Products # Covered Entities Validation with a CE that they can submit sample discount data Beta Phase 1* (Manufacturer effort at this stage is limited) CEs will send actual 340B discount requests for 1-2 products Manufacturer will approve/reject requests Beta Phase 2 1-2 1-3 No payments will actually be exchanged (CE will purchase drugs at 340B prices) Full functionality - discount effectuation and payment processing to CEs via Beta Phase 3 Kalderos 1-2 1-3 CEs will purchase in-scope products at list price Expansion to all CEs for in-scope products Soft Launch 2-5 All Incremental addition of products Opening of platform for any manufacturer to participate with any of their General Launch All All retail pharmacy products Kalderos has also initiated conversations with multiple covered entities, a TPA/software vendor, and a contract pharmacy to participate in testing. M 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 18 New Solution Overview & Progress Timeline May June July August September October November December January February March April May June 2019 2020 Manu/CE/Payer Platform Development Product Optimization Payment Processing Implementation General Availability CE signup for beta (NDAs signed w/3) Manu discussions for beta CE Data Validation (Beta 1) CE Data Validation (Beta 2) 340B Discount Effectuation for 1-2 products w/3 CEs(Beta 3) Soft Launch - expansion to allCEs Vv 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Initial Covered Entity Reaction LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 20 Current State Future State Covered entities must accumulate Our solution can pay 340B discounts based on units dispensed, removing enough units to allow for replenishment order lag that currently exists in replenishment model Initial Covered Entity Response Contract pharmacies exercise Our solution pays covered entities Feedback from significant influence over covered 340B discount, not contract entities pharmacies, increasing covered Covered Entities has entity negotiating power with pharmacy chains been positive States blame covered entities for Kalderos will dispute 340B duplicate causing 340B duplicate discounts discounts with states, using data we obtain from discount effectuation, reducing state/covered entity conflicts Covered entities are unsure if drug Our solution allows for compliance- manufacturers will later question if related questions to be addressed claims caused duplicate discounts up-front, reducing need to audit after the fact Vz 21 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Open Discussion LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 22 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Say Hello. Jeremy Docken Founder & CEO 773-934-3672 jdocken@kalderos.com kalderos.com November 2019 LVZ 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 3 Following a Claim Through the Manage Platform O1 Discount Request MFG K Pre- Upload Validation via API Tests Failed requests x aggregated and returned 00O O Pre- 000 Requests proceed to Request that Request that Request with Enter Validation Validation and Discount has been has passed auto-override manually Automation Tests 000 submitted ecipient pre-validation DR) 00 00 00 x Request Request Request flagged as flagged as flagged as Suspended Excluded Ready to Pre- Approve Upload E Validation - via file Tests Failed request Request Request Failed requests identified by approved by adjusted and aggregated and Manufacturer Manufacturer approved by Manufacturer returned Z 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt 2019 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt Say Hello. Jeremy Docken Founder & CEO 773-934-3672 jdocken@kalderos.com kalderos.com From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Sent: Friday, January 17, 2020 10:28 AM To: Jeremy Docken Cc: Herzog, Michelle (HRSA); Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: RE: Kalderos: Updated slides, suggested next steps Hello and thank you for reaching out. In terms of what we learned with OPAIS, the most important piece is to ensure proper education and to do so on multiple occasion and in multiple ways. Also consider who will be the person responsible, as the high level folks in the organization are already extremely busy and it may be difficult for them to learn and understand. I think it would be best to check back in once you have the results of the pilot so we can understand how things are working. What is the timeline for that? Thank you. Krista M. Pedley, PharmD, MS CAPT, USPHS Director Office of Pharmacy Affairs Healthcare Systems Bureau 301-443-5294 From: Jeremy Docken <jdocken@kalderos.com> Sent: Tuesday, January 07, 2020 11:46 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; William Sarraille <wsarraille@sidley.com>; Trevor L. Wear <twear@sidley.com>; Kolbe, Elizabeth <ekolbe@sidley.com> Subject: Re: Kalderos: Updated slides, suggested next steps Good morning, Captain Pedley- I am following up on my earlier email. Do you believe it would be valuable for our teams to schedule recurring meetings to ensure we are able to keep you informed of our progress? Additionally, would your team members responsible for the design of the current OPAIS sign-up process be open to sharing lessons learned (regarding authorizing officials use of the application) with our team? Kind regards, Jeremy On Tue, Dec 10, 2019 at 8:46 AM Jeremy Docken jdocken@kalderos.com wrote: Hi Captain Pedley- Thank you very much for your time in meeting with us in November. We appreciate your engagement and feedback. As requested, we have attached the slides we presented during the meeting. We note that these are the same slides we presented at the prior meeting on August 21, with one additional slide at the end. In addition, we would be happy to schedule additional meetings to keep you informed of our progress. In the lead up to the initial launch of our chargeback model, we would propose monthly meetings beginning in January and running through March. Once we have launched the model and are working on making it generally available, we could schedule additional meetings. Finally, we continue to appreciate your feedback on our chargeback model. To that end, we would appreciate if we could schedule a brief call that includes our product design team to discuss the lessons learned by HRSA through OPAIS, as discussed at the meeting. Please let us know too if there is certain information that would be helpful for us to provide to you. We also plan to reach out to CMS and certain state Medicaid agencies in the coming weeks. We are speaking with our covered entity beta partners to explore if they would be open to joining us during our meeting with CMS, so that CMS can hear from multiple stakeholders how our solution is both easier on all parties to implement and much more effective at actually preventing duplicate discounts. We look forward to continuing our discussions. In the meantime, please let us know if you have any questions. Many thanks, -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. From: Jeremy Docken <jdocken@kalderos.com> Sent: Friday, June 26, 2020 9:31 AM To: Keane, Thomas (OS/ASA/IOS) (CTR) Cc: Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: Kalderos//HHS: 6/26/2020 Discussion Agenda Attachments: Sidley-Kalderos-Keane_Teleconference Agenda (6.26.2020) (1).pdf Confidential and Proprietary Not Subject to Release or Disclosure Under FOIA or Otherwise Dr. Keane: Attached please find an agenda for our discussion later today. We look forward to speaking with you. Regards, -- Jeremy Docken CEO M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. Teleconference with Dr. Thomas Keane June 26, 2020 Agenda Update on Kalderos Testing o Kalderos received additional funding and is rapidly scaling up development and operations o Final Beta to test 340B point-of-sale chargeback model and related solution is well underway o General availability is scheduled for September Need for Government Feedback o Important to understand governments position towards Kalderos model with general availability quickly approaching o Kalderos remains confident its model is consistent with the 340B statute and the best option to address the intractable duplicate discount problem Next Steps o Kalderos has a meeting next month with HRSA to provide an update on Beta testing and to solicit feedback o Possible other next steps From: Wear, Trevor L. Sent: Monday, July 13, 2020 3:22 AM To: 'Garrison, Elizabeth (HRSA)'; Pedley, Krista (HRSA); Herzog, Michelle (HRSA); Britton, Chantelle (HRSA); Zadecky, Julie (HRSA); Burgess, William (HHS/OGC); Kurland, Pamela (HHS/OGC); Hargrove, Sherine (HHS/OGC) Cc: Jeremy Docken; Sarraille, William; Hardcastle, Elizabeth Kolbe Subject: RE: OPA Skype Meeting with Kalderos - To Share Testing Results and Align on Next Steps Attachments: Kalderos_HRSA_7.13.20_20200712_Final.pdf Hello everyone, Please find attached slides for our virtual meeting later today. We look forward to the discussion. Thanks, Trevor TREVOR L. WEAR SIDLEY AUSTIN LLP +1 312 853 7101 twear@sidley.com -----Original Appointment----- From: Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> Sent: Thursday, May 28, 2020 11:11 AM To: Garrison, Elizabeth (HRSA); Jeremy Docken; Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe; Pedley, Krista (HRSA); Herzog, Michelle (HRSA); Britton, Chantelle (HRSA); Zadecky, Julie (HRSA); Burgess, William (HHS/OGC); Kurland, Pamela (HHS/OGC); Hargrove, Sherine (HHS/OGC) Subject: OPA Skype Meeting with Kalderos - To Share Testing Results and Align on Next Steps When: Monday, July 13, 2020 1:00 PM-2:00 PM (UTC-05:00) Eastern Time (US & Canada). Where: Skype Meeting ......................................................................................................................................... Join Skype Meeting Trouble Joining? Try Skype Web App Join by phone (301) 480 4255 (NIH MD Bethesda) English (United States) Find a local number Conference ID: 5555088 Forgot your dial-in PIN? |Help ......................................................................................................................................... kalderos Redefining how the business of healthcare performs TM Jeremy Docken jdocken@kalderos.com kalderos.com Founder & CEO 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos 7/13/2020 Kalderos Manage Platform Testing Beta & 2020 Kalderos, Inc. 2 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Duplicate Discounts Remain an Intractable Problem 7/13/2020 1 Agenda 2 Recap of Kalderos Manage Platform 3 Update and Feedback on Beta Testing 4 Plan for General Availability 5 Data Sharing & HRSA Notices Request for Feedback 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Duplicate Discounts Kalderos Manage Platform Remain an Intractable & Beta Testing Problem 2020 Kalderos, Inc. 4 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos $25,000,000 $23,007,451 Duplicate Discounts Remain an Intractable Problem $20,000,000 $17,431,091 Duplicate Discounts $15,000,000 Kalderos Has $10,000,000 Confirmed $5,000,000 to Date $1,022,899 $1,240,287 $0 2016 2017 2018 2019 *YTD in 2020, duplicates discounts Kalderos has confirmed are $11,278,253, which is largely consistent with 2019. We estimate the total size of the duplicate discount problem in 2019 totaled $1.2B 2020 Kalderos, Inc. 5 This docment contains proprietary trade secrets f Kalderos. FOIA Exempt kalderos Recap of Kalderos Mange Kalderos Manage Platform Platform & Beta Testing 2020 Kalderos, Inc. 6 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Audit Manage Live In Beta Recap of Kalderos Manage Platform For Providers, Payers, For manufacturers For Providers, Payers, For manufacturers & Patients & Patients Our Manage platform ensures Review Verify Request Pay the right discount Respond to Validate past drug Request drug Review, coordinate manufacturer discount requests. discounts, respond and d pay drug is applied to the questions regarding Initiate and resolve real-time to discounts at the accuracy & validity of discount disputes as manufacturer point of sale, adjust right transaction. previously paid permitted by law questions regarding prior adjudicated discounts or contract. discount-eligible discounts for error or transaction, price adjustments. and obtain cash payment vs. on-invoice discount. - 2020 Kalderos, Inc. This document contains proprietary trade secrets f Kalderos. FOA Exempt GP, ERP, Contract Management, Pharmacy Switch kalde API & Integration Recap of Kalderos Manage Platform Delivery & Applications Kalderos Manage API & Integration API & Integration EDI Ledger Coordination & Payment Spreadsheet platform Flat File Claims Data Monitoring Direct payment NCPDP Distribution Data Validations Two-way External AP Payment Messaging Automation Enterprise Administration Share & Exchange State Medicaid, PBM, Part D Plan, Pharmacy 2020 Kalderos, Inc. This document contains proprietary trad secret Kalderos. FOIA Exempt kaldero Recap of Kalderos Mange Platform Manage's 340B discount model 340B Discount Payment Health Plan Covered entity & TPA qualify Manufacturer Kalderos facilitates 1 5 /TPP 6 3 transaction as 340B eligible manufacturer payment of 2 5 and submit claim to Kalderos discount (WAC - 340B) to covered entity H Kalderos checks if MDRP 2 Kalderos PBM Wholesaler discount already paid by Dispensing-level transaction 6 5 manufacturer. In this case, no data allows manufacturer to MDRP discount had been paid identify and prevent duplicate 4 discounts with payers H Manufacturer reviews 3 CE Kalderos recommendation to pay and agrees to pay discount Produ Payn Kalderos notifies covered 4 Data Patient entity that discount will be Agre paid & provides payment remittance advice (RAD) 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Update and Feedback Kalderos Manage Platform Beta Testing & Beta Testing on 2020 Kalderos, Inc. 10 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Update and Feedback on Beta Testing Our phased approach to launch # Mfrs # NDCs # CEs Dates Beta Phase Scope Phase 1 Validated that CEs can submit discount request data successfully via Jan - Mar (CE only) API 2 1 2020 Phase 2 CEs sent 340B discount requests for mock NDCs Manufacturers reviewed + approved requests Mar - May max 3 2 (mock) 4 2020 Payments sent via sandbox environment CE still purchased products at 340B price Phase 3 Full functionality - discount effectuation and payment processing to CEs via Kalderos for real NDCs May - Jul ~2 per max 5 4 Products are purchased at WAC or GPO price (if permitted) 2020 General Manage platform rolled out to all CEs who purchase the in-scope September Availability NDCs 1 or more TBD All 2020 2020 Kalderos, Inc. 11 T oc nta propritary rad ce Kaldeos.F Exempt kalderos Summary of Success A CE, with their IT partner, successfully submitted discount requests to the Manage platform via APl. Update and Feedback on Beta Testing Beta Phase 1 Key Activities Overview Successful discount Gathered Validated against request submission continuous acceptance criteria setup feedback CE was able to consistently send The CE and their partner The CE shared several Objective: discount requests with leveraged Kalderos' rounds of feedback with To validate that CEs can submit discount all the required data, publicly available APIs the Kalderos team to request data successfully via APl including reversal and the associated optimize the structure of information documentation to set up the APls and enhance a direct feed from their the documentation existing systems to the Manage platform 2020 Kalderos, Inc. 12 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Key Learnings & Outcomes Hardened API - Based on direct feedback from a CE's IT 1 partner we were able to simplify the APl structure enabling a Update and Feedback on Beta Testing shorter and more effective implementation Beta Phase Key Learnings Enhanced Integration Guide Content - New content was 2 developed for this guide, which will be available publicly to all CEs and their partners, so that they have all the information Objective: they need to implement Kalderos' APIs To validate that CEs can submit discount request data successfully via APl Speedy Implementation - Confirmed that should CE partners, 3 such as s TPAs, choose to do so, they can implement connecting to our APl using existing systems cheaply and quickly 2020 Kalderos, Inc. 13 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Summary of Success CEs and manufacturers simulated the ful effectuation process using real dispensations and mock identifiers. Update and Feedback on Beta Testing Beta Phase 2 Key Activities Overview Successful Delivery of discount Validated payment submission of real requests & process & exchange discount requests completion of The CEs received a mock discount review payment (sandbox) and CEs (inclusive of health Objectives: associated remittance centers, hospitals, and Manufacturers reviewed For CEs to send 340B discount requests for mock advice. STD clinics) pulled real, those requests and the NDCs 340B dispensations results of Kalderos A manufacturer For manufacturers to review + approve requests from their pharmacies to validations to make a confirmed delivery of To send payments via sandbox environment submit discount decision on which to mock payment and requests to a pay. reviewed past invoices. manufacturer via the Manage platform. 14 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Key Learnings & Outcomes Little Effort Required for CEs Update and Feedback on Beta Testing TPA Reports could be Leveraged - Standard TPA reports Beta Phase 2 were used to create basic dispensation reports that matched Key Learnings the format required to upload to the Manage Platform. 3 Simplified CE Requirements - We learned that several CEs still did not know how to obtain 340B price information, so Objectives: the platform was optimized to apply manufacturer-provided 340B prices to CE-provided claims data. For CEs to send 340B discount requests for mock NDCs For manufacturers to review + approve requests Aligned Terminology - Fields and language throughout the To send payments via sandbox environment application was adjusted to better match terminology used in existing CE and manufacturer systems. 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt 15 kalderos Update and Feedback on Beta Testing Feedback from CEs in BP2 was positive, with most Overall feedback commenting that the process was surprisingly simple and intuitive has been positive CEs have been able to successfully submit discounts in all 0 3 ways that are available to do so (in the Ul, via a file upload, and via the API) CEs, without Kalderos assistance, worked with their 0 contract pharmacies to adjust to the new model CEs provided recommendations for enhancements that have been incorporated into our development backlog to be completed before launch The CEs who completed BP2 were eager to move into Phase 3 16 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Update and Feedback on Beta Testing < The Kalderos program will allow covered Overall feedback entities to work with manufacturers to better has been positive control their 340B program and prevent encroachment and excessive fees from contract pharmacies and middlemen". Brian Donahu CFO, Dickinson County Healthcare System 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Kalderos Manage Platform Details & Beta Testing 2020 Kalderos, Inc. 18 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Details Beta phase 3 is driven by two Systems Level Testing Remaining Component Level Testing primary objectives: Actual dispensations and Validate that remaining live payment processing requirements (those not tested in BP1 or BP2) are satisfied prior to launch 19 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos.FOIA Exempt kaldero Beta Phase 3 Details 2 Manufacturers Participants >$2B in annual 340B discounts 4 Covered Entities 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Details Testing db Covered Entities di Manufacturers areas Bank setup, funding, and Bank setup & receipt of funds actual transfer of funds Removal of NDCs from Systems integration current 340B (EDI 844, 845, 849) inventory/purchase processes Workflow implementation Changes to contact pharmacy replenishment Master data management model Price restatements and Day 1 cutover challenges corrections Reporting and audit Roles & permissions requirements Reporting requirements 21 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Plan for General Kalderos Manage Platform Availability & Beta Testing 2020 Kalderos, Inc. 22 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Plan for general availability Kalderos has one committed manufacturer and 0 General three manufacturers in final contracting stages to Availability use the Mange platform once available Date: September 2020 This number is expected to grow quickly based on increasing g interest from manufacturers and positive feedback from covered entities 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Plan for general availability Kalderos has intentionally designed our platform to allow for other An Open technology build their integrations allowing companies s to own custom with and future software and services used easy connection current by Platform manufacturers, covered entities, and government agencies Solution What it means Few restrictions Community API open to state placed on outside innovation Medicaid agencies developers Covered entities and State Medicaid agencies encourage their contract will other receive We unique build their pharmacies have credentials that allow companies to already designed applications that unique them to query data to own implementation avoid causing will work on our duplicate methods that work for discounts platform with FFS or their businesses MCO claims 2020 Kalderos, Inc. 24 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Data Sharing g & HRSA Kalderos Manage Platform Notices & Beta Testing 2020 Kalderos, Inc. 25 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Data Sharing & HRSA Notices We understand that HRSA receives data reports Data Sharing from Apexus as required by the Prime Vendor agreement We would be happy to provide similar data reports to HRSA; please let us know what might be helpful to you 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Data Sharing & HRSA Notices Kalderos will provide HRSA with a letter to be HRSA Notices posted on HRSA's website outlining the Manage platform We will encourage manufacturers to post in advance of transitioning to our platform (e.g., provide 30-day notice) 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Request for Feedback Kalderos Manage Platform & Beta Testing 2020 Kalderos, Inc. 28 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Request for Feedback Long History of Government Communication Date Communication Nature of Communication 2/26/19 HHS Meeting Description of Manage platform and legal and policy basis. 4/8/19 OIG Comment Letter Description of Manage platform and its legal basis. 5/2/19 HRSA Meeting Description of Manage platform and how it will address 340B duplicate discounts. 5/8/19 CMS Meeting Description of Manage platform and how it will address 340B duplicate discounts. 8/22/19 HRSA Meeting Description of Manage platform, timetable for Implementation, and request for HRsA's legal position. 8/29/19 HHS Communication Further discussion of Manage platform and legal basis. 9/19/19 HRSA Communication Proposed FAQ summarizing legal basis for Manage platform. /20/19 HHS Letter Description of Manage platform, policy need for the platform, and legal basis for the platform. 1/21/19 HRSA Meeting Description of Manage platform, timetable for implementation, and request for HRSA's legal position. /4/20 CMS Meeting Further description of Manage platform and timetable for implementation. /13/20 HRSA Communication Update of pilot and HHS communications. /14/20 Questions from HRSA /18/20 Kalderos Response to HRSA Providing additional Information on CMS engagement and pilot and timing for implementation (again noting June or July go live). /13/20 Final HRSA Meeting Final report on pilot completion and reiterated discussion of basis for Manage platform. 020 Kalderos, Inc. 29 document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Request for Feedback Over more than two years of engagement with the government, Kalderos is at the D Status of point of full implementation. During the course of Kalderos' extensive engagement, HRSA has not stated that the D Government Manage platform violates the 340B statute or that a manufacturer using the Manage Engagement platform would be in violation of the statute. We reiterate our repeated, prior requests for HRSA's legal position on whether, in its view, chargebacks are required by the statute, or whether, as Kalderos believes, and has explained in detail, the statute does not dictate the mechanisms by which 340B discounts may be made available. We ask that HRSA provide us a clear written statement of its statutory position by August 13, 2020. We look forward to continuing to work with HRSA in implementing the Mange 0 platform. Consistent with this, we will be providing a letter that HRSA can post describing the O Manage platform for all 340B entities to be able to review. 30 2020 Kalderos, Inc. is docment contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Say Hello. Jeremy Docken jdocken@kalderos.com kalderos.com Founder & CEO 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt From: Keane, Thomas (OS/IOS) <Thomas.Keane@hhs.gov> Sent: Wednesday, August 12, 2020 10:47 AM To: Jeremy Docken Cc: Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: RE: Follow-up: Confidential and Proprietary Sure. Let me set something up. OGC / HRSA are finalizing language for the website. Perhaps we could touch base tomorrow so I can understand the ask? Does 5 pm EST work? From: Jeremy Docken <jdocken@kalderos.com> Sent: Wednesday, August 12, 2020 10:59 AM To: Keane, Thomas (OS/IOS) <Thomas.Keane@hhs.gov> Cc: William Sarraille <wsarraille@sidley.com>; Trevor L. Wear <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com> Subject: Fwd: Follow-up: Confidential and Proprietary Dear Dr. Keane: Thank you for the continued dialogue. We asked you to hold off on our request for a Departmental meeting with the Dep Sec because we were hopeful we would receive a timely response from HRSA. The below email exchange leads me to be worried about that. Unfortunately, we are now at a disadvantage because we have engaged with HRSA, but a competitor chose not to. May I ask you to arrange a Departmental meeting as soon as possible, please? The issue is urgent at this point. Thank you. Jeremy ---------- Forwarded message --------- From: Sarraille, William wsarraille@sidley.com Date: Wed, Aug 12, 2020 at 9:56 AM Subject: RE: Follow-up: Confidential and Proprietary To: Pedley, Krista (HRSA) KPedley@hrsa.gov Cc: Jeremy Docken jdocken@kalderos.com , Wear, Trevor L. twear@sidley.com , Herzog, Michelle (HRSA) MHerzog@hrsa.gov Dear Admiral Pedley: Thank you very much for this response. We appreciate the dedication to the program that you and your colleagues display every day. We want to underscore that time is of the essence at this point. Kalderos proceeded the right way. It was proactive and transparent with HRSA at all times. It has held off, to date, launching the program as we have answered HRSAs questions and supplied additional information. A competitor has not done that and it is now enjoying a competitive advantage as a consequence. We do not believe that is fair. We urge you to address our issue by the date we have discussed with you. Thank you for your consideration. Best regards, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Date: Wednesday, Aug 12, 2020, 10:02 AM To: Sarraille, William <wsarraille@sidley.com> Cc: Jeremy Docken <jdocken@kalderos.com>, Wear, Trevor L. <twear@sidley.com>, Herzog, Michelle (HRSA) <MHerzog@hrsa.gov> Subject: RE: Follow-up: Confidential and Proprietary Hello and thank you for reaching out. I understand that you would all like a response by the 13th. Please know we are working with our Department colleagues to respond as soon as we can. Thank you for your patience. Krista M. Pedley, PharmD, MS RADM, USPHS Assistant Surgeon General Director, Office of Pharmacy Affairs 301-443-5294 Sign up for email updates! From: Sarraille, William <wsarraille@sidley.com> Sent: Monday, August 10, 2020 10:55 PM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Wear, Trevor L. <twear@sidley.com> Subject: Follow-up: Confidential and Proprietary Dear Admiral Pedley, We hope that this finds you and your colleagues well. As we previously have discussed, Kalderos will soon go live with its rebate model. Having addressed all of HRSAs questions, we asked that HRSA state, by August 13, 2020, whether it believed that the model, including the use of rebates, was consistent with the 340B statute. If not, we asked for the reasons for HRSAs conclusions to be shared in writing with us. We also asked that HRSA post Kalderos proposed letter, which explains how the model will operate, on the HRSA website. With August 13 just a few days away, we wanted to contact you and ask about HRSAs status. Thank you. Best regards, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) **************************************************************************** ************************ This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************** ************************ The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. 1 From: Hardcastle, Elizabeth Kolbe Sent: Monday, August 24, 2020 3:20 PM To: Otalora, Nicolas (HHS/IOS) (CTR) Cc: Keane, Thomas (OS/IOS); Callahan, Kenneth (HHS/IOS); Pfundt, Tiffany (OS/IOS); Jeremy Docken; Sarraille, William; Wear, Trevor L. Subject: RE: Follow Up Discussion - HRSA/Kalderos Attachments: Kalderos_HHS_8.26.20.pdf; External Scheduling Request_Kalderos (8.24.2020) 260650798_2.DOCX; 3bclean-control.bin Proprietary and Confidential Nicolas, Please see attached for a completed scheduling request and slides for our discussion. We look forward to speaking Wednesday at 3:30 pm ET. Many thanks, Beth ELIZABETH KOLBE HARDCASTLE Associate pronouns: she/her/hers SIDLEY AUSTIN LLP +1 202 736 8697 ehardcastle@sidley.com From: Otalora, Nicolas (HHS/IOS) (CTR) Sent: Wednesday, August 19, 2020 2:50 PM To: Jeremy Docken Cc: Keane, Thomas (OS/IOS) ; Hardcastle, Elizabeth Kolbe ; Wear, Trevor L. ; Sarraille, William ; Callahan, Kenneth (HHS/IOS) ; Pfundt, Tiffany (OS/IOS) Subject: RE: Follow Up Discussion - HRSA/Kalderos Great, Ill send the calendar invite and please fill out this scheduling request form. Nicolas From: Jeremy Docken <jdocken@kalderos.com> Sent: Wednesday, August 19, 2020 2:46 PM To: Otalora, Nicolas (HHS/IOS) (CTR) <Nicolas.Otalora@hhs.gov> Cc: Keane, Thomas (OS/IOS) <Thomas.Keane@hhs.gov>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Wear, Trevor L. <twear@sidley.com>; Sarraille, William <wsarraille@sidley.com>; Callahan, Kenneth (HHS/IOS) <Kenneth.Callahan@hhs.gov>; Pfundt, Tiffany (OS/IOS) <Tiffany.Pfundt@hhs.gov> Subject: Re: Follow Up Discussion - HRSA/Kalderos 2 Wednesday at 3:30 EST works well for the Kalderos and Sidley teams. Thank you. On Wed, Aug 19, 2020 at 1:06 PM Otalora, Nicolas (HHS/IOS) (CTR) <Nicolas.Otalora@hhs.gov> wrote: Ok, how about Wednesday at 3:30? From: Jeremy Docken <jdocken@kalderos.com> Sent: Wednesday, August 19, 2020 2:01 PM To: Otalora, Nicolas (HHS/IOS) (CTR) <Nicolas.Otalora@hhs.gov> Cc: Keane, Thomas (OS/IOS) <Thomas.Keane@hhs.gov>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Wear, Trevor L. <twear@sidley.com>; Sarraille, William <wsarraille@sidley.com>; Callahan, Kenneth (HHS/IOS) <Kenneth.Callahan@hhs.gov>; Pfundt, Tiffany (OS/IOS) <Tiffany.Pfundt@hhs.gov> Subject: Re: Follow Up Discussion - HRSA/Kalderos Hi Nicolas- Tuesday is a tough one on our end. Can we do anytime wed-fri? Regards, Jeremy On Wed, Aug 19, 2020 at 12:41 PM Jeremy Docken <jdocken@kalderos.com> wrote: Hi Nicolas- We're checking everyone's schedules and will get back to you soon. Many thanks, Jeremy On Wed, Aug 19, 2020 at 12:13 PM Otalora, Nicolas (HHS/IOS) (CTR) <Nicolas.Otalora@hhs.gov> wrote: 3 Sure, how does next Tuesday at 2:30 sound for everyone? From: Keane, Thomas (OS/IOS) <Thomas.Keane@hhs.gov> Sent: Wednesday, August 19, 2020 12:46 PM To: Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Wear, Trevor L. <twear@sidley.com>; Sarraille, William <wsarraille@sidley.com>; Jeremy Docken <jdocken@kalderos.com> Cc: Callahan, Kenneth (HHS/IOS) <Kenneth.Callahan@hhs.gov>; Pfundt, Tiffany (OS/IOS) <Tiffany.Pfundt@hhs.gov>; Otalora, Nicolas (HHS/IOS) (CTR) <Nicolas.Otalora@hhs.gov> Subject: RE: Follow Up Discussion - HRSA/Kalderos The Dep Sec has agreed to a meeting. Tiffany Pfundt, Nick Otalora and Ken Callahan can get this set up. The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. kalderos Redefining how the business of healthcare performs TM Jeremy Docken jdocken@kalderos.com kalderos.com Founder & CEO 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos 8/26/2020 Meeting: SHH Kalderos 340B Rebate Solution 2020 Kalderos, Inc. 2 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos 8/26/2020 1 Duplicate Discounts Remain an Intractable Problem Agenda Recap of Kalderos Solution for 340B Rebates: "340B 2 Pay" Feedback from Covered Entities after 8 Months of 3 Testing 4 Plan for General Availability 5 Data Sharing & HRSA Notices Request for Feedback 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Duplicate Discounts Kalderos 340B Rebate Solution Remain an Intractable Problem 2020 Kalderos, Inc. 4 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos 2020 Duplicate Discounts Remain an Intractable Problem OIG's Top Unimplemented Recommendations: Solutions To Reduce Fraud, Waste, Per HHS OIG, and d Abuse in HHS Programs the Intersection of 340B & Medicaid Remains an Unaddressed Problem U.S. Department of Health and Human Services Office of Inspector General 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 5 kalderos $25,000,000 $23,007,451 Duplicate Discounts Remain an Intractable Problem $20,000,000 $17,431,091 Duplicate Discounts $15,000,000 Kalderos Has $10,000,000 Confirmed $5,000,000 to Date $1,022,899 $1,240,287 $0 2016 2017 2018 2019 *YTD in 2020, duplicates discounts Kalderos has confirmed are $11,278,253, which is largely consistent with 2019. We estimate the total size of the duplicate discount problem in 2019 totaled $1.2B 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Recap of Kalderos Kalderos 340B Rebate Solution Solution for 340B Rebates '340B Pay" 11 2020 Kalderos, Inc. 7 This document contains proprietary trade secrets of Kalderos. FOIA Exempt GP, ERP, Contract Management, Pharmacy Switch kalde API & Integration Recap of Kalderos Rebate Solution Delivery & Applications Kalderos Manage API & Integration API & Integration EDI Ledger Coordination & Payment Spreadsheet platform Flat File Claims Data Monitoring Direct payment NCPDP Distribution Data Validations Two-way External AP Payment Messaging Automation Enterprise Administration Share & Exchange State Medicaid, PBM, Part D Plan, Pharmacy 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kaldero Recap of Kalderos Revate Solution Manage's 340B discount model 340B Discount Payment Health Plan Covered entity & TPA qualify Kalderos payments partner Manufacturer 5 /TPP 6 transaction as 340B eligible enables electronic payment of 5 and submit claim to Kalderos rebate from manufacturer to covered entity H Kalderos checks if MDRP Kalderos PBM Wholesaler discount already paid, and Dispensing-level transaction resolves issues before data allows manufacturer to 5 V duplicate discount occurs identify and prevent 340B duplicate discounts H Manufacturer reviews 3 CE Kalderos recommendation to pay and agrees to pay 340B rebate Prod Pay Kalderos notifies covered Patient Dat entity that rebate will be paid Agr & provides payment remittance advice (RAD) 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Feedback from Covered Entities Kalderos 340B Rebate Solution after 8 Months of Testing 2020 Kalderos, Inc. 10 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kaldero Feedback from Covered Entities 2 Manufacturers Beta Testing Participants >$2B in annual 340B discounts 4 Covered Entities 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Key Learnings & Outcomes Little Effort Required for CEs - Easy for even small covered Feedback from Covered Entities entities to submit rebate requests. Beta Testing Hardened API - Based on direct feedback from a CE's IT Key Learnings partner we were able to simplify the APl structure enabling a shorter and more effective implementation Enhanced Integration Guide Content - New content was 2 developed for this guide, which will be available publicly to all CEs and their partners, so that they have all the information they need to implement Kalderos' APIs Speedy Implementation - Confirmed that should CE partners, 3 such as TPAs, choose to do so, they can implement connecting to our APl using existing systems cheaply and quickly 2020 Kalderos, Inc. 12 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Feedback from Covered Entities < The Kalderos program will allow covered Overall feedback entities to work with manufacturers to better has been positive control their 340B program and prevent encroachment and excessive fees from contract pharmacies and middlemen". Brian Donahu CFO, Dickinson County Healthcare System 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Plan for General Kalderos 340B Rebate Solution Availability 2020 Kalderos, Inc. 14 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Plan for General Availability Kalderos has one committed manufacturer and General three manufacturers in final contracting s stages to Availability Date: use the 340B Pay rebate solution once available September 2020 This number is expected to grow quickly based on increasing g interest from manufacturers and positive feedback from covered entities 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Plan for General Availability Kalderos has i intentionally designed our platform to allow for other An Open technology companies to build their own custom integrations allowing with and future software and services used by easy connection current Platform manufacturers, covered entities, and government agencies Solution What it means Few restrictions Community API open to placed on outside innovation Medicaid agencies developers Covered entities and Medicaid agencies will their contract encourage receive unique We other build their pharmacies have credentials that allow companies to already designed applications that d unique them to query data to own implementation avoid causing duplicate will work on our methods that work for discounts with platform FFS or their businesses MCO claims 2020 Kalderos, Inc. 16 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Data Sharing & HRSA Kalderos 340B Rebate Solution Notices 2020 Kalderos, Inc. 17 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Data Sharing & HRSA Notices We understand that HRSA receives data reports Data Sharing from Apexus as required by the Prime Vendor agreement We would be happy to provide similar data reports to HRSA 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Data Sharing & HRSA Notices Kalderos has provided HRSA with a letter to be HRSA Notices posted on HRSA's website outlining the 340B rebate solution. We will encourage manufacturers to post in advance of transitioning to our platform (e.g., provide 30-day notice) 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Request for Feedback Kalderos 340B Rebate Solution 2020 Kalderos, Inc. 20 This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Request for Feedback Long g History of Government Communication Date Communication Nature of Communication 2/26/19 HHS Meeting Description of 340B rebate solution and legal and policy basis. 1/8/19 OIG Comment Letter Description of 340B rebate solution and its legal basis. /2/19 HRSA Meeting Description of 340B rebate solution and how it will address 340B duplicate discounts. /8/19 CMS Meeting Description of 340B rebate solution and how it will address 340B duplicate discounts. /22/19 HRSA Meeting Description of 340B rebate solution, timetable for Implementation, and request for HRSA's legal position. /29/19 HHS Communication Further discussion of 340B rebate solution and legal basis. 9/19/19 HRSA Communication Proposed FAQ summarizing legal basis for 340B rebate solution. 9/20/19 HHS Letter Description of 34oB rebate solution, policy need for the platform, and legal basis for the platform. 11/21/19 HRSA Meeting Description of 340B rebate solution, timetable for implementation, and request for HRSA's legal position. B/4/20 CMS Meeting Further description of 340B rebate solution and timetable for implementation. 5/13/20 HRSA Communication Update of pilot and HHS communications. /14/20 Questions from HRSA Kalderos Response to HRSA Providing additional Information on CMS engagement and pilot and timing for implementation (again noting June or July go live). /18/20 Final HRSA Meeting Final report on pilot completion and reiterated discussion of basis for 340B rebate solution. /13/20 020 Kalderos, Inc. document contains proprietary trade secrets of Kalderos. FOIA Exempt 21 kalderos Request for Feedback Over more than two years of engagement with the government, Kalderos is at the Status of point of full implementation. During the course of Kalderos' extensive engagement, HRSA has not stated that the Government 340B rebate solution violates the 340B statute or that a manufacturer using our solution would be in violation of the statute. Engagement We reiterate our repeated, prior requests for HRSA's legal position on whether, in its view, chargebacks are required by the statute, or whether, as Kalderos believes, and has explained in detail, the statute does not dictate the mechanisms by which 340B discounts may be made available. We asked that HRSA provide us a clear written statement of its statutory position by August 13, 2020. Consistent with this, we have provided a letter that HRSA can post describing the 340B rebate solution for all 340B entities to be able to review. Delay in receiving feedback from HRSA is putting us at a competitive disadvantage. Kalderos was transparent with HRSA; others appear to have been less so. 22 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Say Hello. Jeremy Docken jdocken@kalderos.com kalderos.com Founder & CEO 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOlA Exempt kalderos Audit Manage Live In Beta Recap of Kalderos Manage Platform For Providers, Payers, For manufacturers For Providers, Payers, For manufacturers & Patients & Patients Our Manage platform ensures Review Verify Pay Request the right discount Respond to Validate past drug Request drug Review, coordinate is applied manufacturer discount requests. discounts, respond and d pay drug d to the questions regarding Initiate and resolve real-time to discounts at the accuracy & validity of discount disputes as manufacturer point of sale, adjust right transaction. previously paid permitted by law questions regarding prior adjudicated discounts or contract. discount-eligible discounts for error or transaction, price adjustments. and I obtain cash payment vs. on-invoice discount. 24 2020 Kalderos, Inc. This document contains proprietary trade secrets f Kalderos. FOA Exmpt kalderos Summary of Success A CE, with their IT partner, successfully submitted discount requests to the Manage platform via APl. Feedback from Covered Entities Beta Testing Key Activities Lessons Learned Successful discount Gathered Validated against request submission continuous acceptance criteria setup feedback CE was able to consistently send The CE and their partner The CE shared several Objective: discount requests with leveraged Kalderos' rounds of feedback with To validate that CEs can submit discount all the required data, publicly available APIs the Kalderos team to request data successfully via APl including reversal and the associated optimize the structure of information documentation to set up the APls and enhance a direct feed from their the documentation existing systems to the Manage platform 2020 Kalderos, Inc. 25 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Update and Feedback on Beta Testing Our phased approach to launch # Mfrs # NDCs # CEs Dates Beta Phase Scope Phase 1 Validated that CEs can submit discount request data successfully via Jan - Mar (CE only) API 2 1 2020 Phase 2 CEs sent 340B discount requests for mock NDCs Manufacturers reviewed + approved requests Mar - May max 3 2 (mock) 4 2020 Payments sent via sandbox environment CE still purchased products at 340B price Phase 3 Full functionality - discount effectuation and payment processing to CEs via Kalderos for real NDCs May - Jul ~2 per max 5 4 Products are purchased at WAC or GPO price (if permitted) 2020 General Manage platform rolled out to all CEs who purchase the in-scope September NDCs TBD Availability 1 or more All 2020 2020 Kalderos, Inc. 26 T documen nais proprietary tae sec Kalderos. FI Exet kalderos Hardened API - Based on direct feedback from a CE's IT 1 Feedback from Covered Entities partner we were able to simplify the APl structure enabling a shorter and more effective implementation Beta Testing Key Lessons Learned Enhanced Integration Guide Content - New content was developed for this guide, which will be available e publicly to all CEs and their partners, so that they have all the information Objective: they need to implement Kalderos' APIs To validate that CEs can submit discount request data successfully via APl Speedy Implementation - Confirmed that should CE partners, 3 such as TPAs, choose to do so, they can implement connecting to our APl using existing systems cheaply and quickly 2020 Kalderos, Inc. 27 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Summary of Success CEs and manufacturers simulated the full effectuation process using real dispensations and mock identifiers. Update and Feedback on Beta Testing Beta Phase 2 Key Activities Overview Successful Delivery of discount Validated payment submission of real requests & process & exchange discount requests completion of The CEs received a mock discount review payment (sandbox) and CEs (inclusive of health Objectives: associated remittance centers, hospitals, and Manufacturers reviewed For CEs to send 340B discount requests for mock advice. STD clinics) pulled real, those requests and the NDCs 340B dispensations results of Kalderos A manufacturer For manufacturers to review + approve requests from their pharmacies to validations to make a confirmed delivery of To send payments via sandbox environment submit discount decision on which to mock payment and requests to a pay. reviewed past invoices. manufacturer via the Manage platform. 28 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Key Learnings & Outcomes Little Effort Required for CEs Update and Feedback on Beta Testing TPA Reports could be Leveraged - Standard TPA reports Beta Phase were used to create basic dispensation reports that matched Key Learnings the format required to upload to the Manage Platform. 3 Simplified CE Requirements - We learned that several CEs still did not know how to obtain 340B price information, so Objectives: the platform was optimized to apply manufacturer-provided 340B prices to CE-provided claims data. For CEs to send 340B discount requests for mock NDCs For manufacturers to review + approve requests Aligned Terminology - Fields and language throughout the 4 To send payments via sandbox environment application was adjusted to better match terminology used in existing CE and manufacturer systems. 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 29 kalderos Update and Feedback on Beta Testing Feedback from CEs in BP2 was positive, with most Overall feedback commenting that the process was surprisingly simple and intuitive has been positive CEs have been able to successfully submit discounts in all 0 3 ways that are available to do so (in the Ul, via a file upload, and via the APl) CEs, without Kalderos assistance, worked with their C contract pharmacies to adjust to the new model CEs provided recommendations for enhancements that 0 have been incorporated into our development backlog to be completed before launch The CEs who completed BP2 were eager to move into 0 Phase 3 30 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Kalderos 340B Rebate Solution Details 2020 Kalderos, Inc. 31 This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Details Beta phase 3 is 2 driven by two Systems Level Testing Remaining Component Level Testing primary objectives: Actual dispensations and Validate that remaining live payment processing requirements (those not tested in BP1 or BP2) are satisfied prior to launch 32 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos Beta Phase 3 Details Testing db Covered Entities ddi Manufacturers areas Bank setup, funding, and Bank setup & receipt of funds actual transfer of funds Removal of NDCs from Systems integration current 340B (EDI 844, 845, 849) inventory/purchase processes Workflow implementation Changes to contact pharmacy replenishment Master data management model Price restatements and Day 1 cutover challenges corrections Reporting and audit Roles & permissions requirements Reporting requirements 33 2020 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt External Scheduling Request Memo for Deputy Secretary Hargan Filled out by: Elizabeth Hardcastle, Associate, Sidley Austin Topics: Kalderos Drug Discount Management Platform Launch Objective: Kalderos has developed a solution to resolve the 340B Drug Discount Programs widespread problem of duplicate discounts. Kalderos solution, called the Drug Discount Management Platform, identifies duplicate discounts before they occur by effectuating 340B discounts through a rebate mechanism. Specifically, covered entities request a 340B discount through the online Kalderos Platform, Kalderos performs validations on the request, such as ensuring the requestor is an authorized covered entity, and Kalderos sends an invoice to the manufacturer who authorizes the payment of 340B discounts to covered entities. Kalderos has tested the solution and has incorporated feedback from both manufacturers and covered entities. Kalderos is preparing to launch September 8th. We believe Kalderos solution solves the most critical, intractable problem with the 340B Program, duplicate discounts, and does so in a way that improves compliance and program integrity for all stakeholders. We have been engaging with the government, both HRSA and CMS, for over 18 months to ensure open and transparent communications regarding Kalderos solution. We have sought a communication confirming that the rebate mechanism is an appropriate way to offer the 340B price. We are confident that the 340B statute permits a rebate mechanism and that we are not prohibited from launching our solution, but we believe that it is important that the government speak to the issue. Why do you want to meet with the Deputy Secretary: We are hoping to discuss Kalderos solution with the Deputy Secretary and understand the governments position with respect to effectuating 340B discounts through a rebate mechanism, including why the government has not yet released a communication on the issue. Point of Contact (Name, Cell and email): Elizabeth Hardcastle, ehardcastle@sidley.com, 419-618-8957 Who will provide Briefing/read ahead materials (please pan on sending 48 hours in advance)? Elizabeth Hardcastle, Associate, Sidley Austin Are all external attendees US Citizens or Legal Permanent Residents? Y/N, if No, please list those attendees below. Yes External Attendees (include bios and pictures): Jeremy Docken, Founder & CEO, Kalderos: https://www.linkedin.com/public- profile/in/jeremydocken?challengeId=AQEt5MdUd1km0AAAAXQiT6DDgc- 2CwhqIhyCAES- ltqmHI2OB6t6KMz7uJ0BjRcsVexUVmZajtD4H1I9vVLxeDku9ILDTRCZFA&submissio nId=ce0dac7a-8b50-2e16-70ea-19693e57ac06 William Sarraille, Partner, Sidley Austin: https://www.sidley.com/en/people/s/sarraille-william-a Trevor Wear, Partner, Sidley Austin: https://www.sidley.com/en/people/w/wear- trevor-l Elizabeth Hardcastle, Associate, Sidley Austin: https://www.sidley.com/en/people/h/hardcastle-elizabeth *If your meeting request is accepted please plan on sending briefing/read ahead material at least 48 hours in advance** From: Sarraille, William Sent: Tuesday, August 25, 2020 12:56 PM To: Pedley, Krista (HRSA) Cc: Herzog, Michelle (HRSA); Jeremy Docken; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: RE: Follow-up: Confidential and Proprietary Attachments: Kalderos re_ HRSA Public Notice (08.25.2020) 259346647_5.DOCX Dear Admiral Pedley: We wanted to follow up on our communications below. We understand that you are working on a response regarding whether you believe that the Kalderos model, including the use of rebates, is consistent with the 340B statute. As we have noted, we are very eager to receive that response. In the meantime, we wanted to provide an updated public notice to post on your website. The content has not changed, but we have updated the terminology used to describe our solution. Thank you for your work and dedication to the 340B program. Best regards, Bill Sarraille WILLIAM A. SARRAILLE Partner SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, DC 20005 +1 202 736 8195 wsarraille@sidley.com www.sidley.com From: Sarraille, William <wsarraille@sidley.com> Sent: Wednesday, August 12, 2020 10:56 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Wear, Trevor L. <twear@sidley.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov> Subject: RE: Follow-up: Confidential and Proprietary Dear Admiral Pedley: Thank you very much for this response. We appreciate the dedication to the program that you and your colleagues display every day. We want to underscore that time is of the essence at this point. Kalderos proceeded the right way. It was proactive and transparent with HRSA at all times. It has held off, to date, launching the program as we have answered HRSAs questions and supplied additional information. A competitor has not done that and it is now enjoying a competitive advantage as a consequence. We do not believe that is fair. We urge you to address our issue by the date we have discussed with you. Thank you for your consideration. Best regards, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Date: Wednesday, Aug 12, 2020, 10:02 AM To: Sarraille, William <wsarraille@sidley.com> Cc: Jeremy Docken <jdocken@kalderos.com>, Wear, Trevor L. <twear@sidley.com>, Herzog, Michelle (HRSA) <MHerzog@hrsa.gov> Subject: RE: Follow-up: Confidential and Proprietary Hello and thank you for reaching out. I understand that you would all like a response by the 13th. Please know we are working with our Department colleagues to respond as soon as we can. Thank you for your patience. Krista M. Pedley, PharmD, MS RADM, USPHS Assistant Surgeon General Director, Office of Pharmacy Affairs 301-443-5294 Sign up for email updates! From: Sarraille, William <wsarraille@sidley.com> Sent: Monday, August 10, 2020 10:55 PM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Wear, Trevor L. <twear@sidley.com> Subject: Follow-up: Confidential and Proprietary Dear Admiral Pedley, We hope that this finds you and your colleagues well. As we previously have discussed, Kalderos will soon go live with its rebate model. Having addressed all of HRSAs questions, we asked that HRSA state, by August 13, 2020, whether it believed that the model, including the use of rebates, was consistent with the 340B statute. If not, we asked for the reasons for HRSAs conclusions to be shared in writing with us. We also asked that HRSA post Kalderos proposed letter, which explains how the model will operate, on the HRSA website. With August 13 just a few days away, we wanted to contact you and ask about HRSAs status. Thank you. Best regards, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) ********************************************************************** ****************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. ********************************************************************** ****************************** Kalderos 340B Pay Solution 340B Rebate Technology to Effectuate 340B Drug Discounted Prices Public Notice Kalderos has developed a 340B rebate solution, 340B Pay, to effectuate 340B drug discounted prices to 340B covered entities. Using the Kalderos 340B Pay solution, 340B covered entities will be able to create an account with the Kalderos Request web application and electronically send a 340B discount request to Kalderos, instead of through a traditional wholesaler. 340B covered entities will be able to submit a 340B discount request on a participating product through the Kalderos 340B Pay solution using multiple alternative methods. After a discount request has been made, Kalderos will assess whether a Medicaid Drug Rebate Program rebate has already been paid on the same unit of product, send an electronic invoice to the manufacturer reflecting the discount request, and recommend a payment outcome to the manufacturer. Using 340B Pay, the manufacturer will then determine whether to authorize an electronic payment through an integrated third party payment provider to the 340B covered entity for the discount amount. When a manufacturer elects to use the Kalderos 340B Pay solution as the mechanism to offer 340B discounts on a product, 340B covered entities will not be able to request the product at the 340B price from wholesalers, though they can continue to obtain the product from wholesalers. Kalderos is committed to assisting all stakeholders with their compliance with 340B Drug Discount Program requirements and to working to improve program integrity. Kalderos model is designed to be as easy and efficient as possible for all 340B covered entity users. Kalderos is happy to work with 340B covered entities, or their agents, on any questions regarding the operation of, and integration with, the Kalderos 340B Pay solution. If you have any questions about this notice or the Kalderos 340B Pay solution, please contact Kalderos at 1-844-930-2322 or info@kalderos.com or visit kalderos.com. From: Sarraille, William <wsarraille@sidley.com> Sent: Monday, September 14, 2020 7:25 PM To: Chang, William (HHS/OGC) <William.Chang@hhs.gov> Subject: RE: Proprietary and Confidential DearMr. Chang: Thank you for continuing to speak with us about this important issue. I indicated during our last conversation that I would respond to the legal question you posed in a subsequent communication. This email constitutes that response. I would be pleased to speak with you further, if you would find that helpful. In your email dated September 2, 2020, you asked for our views about statements in legislative history from H.R. Rep. 102-384 (Sept. 22, 1992) and language in subsection (a) of the 340B statute. You indicated that you were considering whether the legislative history and statutory text support the view that the Secretary can provide, in the Pharmaceutical Pricing Agreement (PPA), that the amount required under the [PPA] must take into account any rebates or discounts that the Secretary has provided for in the [PPA]. As a threshold matter, we note that, even if the Secretary has some authority here, which we believe is limited to the calculation of the amount and not whether discounts or rebates are an acceptable mechanism, it is clear that the current PPA does not limit the use of discounts or rebates. Accordingly, whether the Secretary could limit the use of discounts or rebateswhich, again, we do not believe to be the casethere is no such limitation in effect now, leaving market participants to proceed as they wish, without constraint. Returning to the question you posed, however, we do not believe it would be appropriate to rely on the legislative history to argue in support of Secretarial authority to limit the use of discounts or rebates or any other mechanism market participants may choose to apply. We believe that such reliance would be misplaced because it is not the legislative history for the statute passed by Congress. Even if it were, legislative history cannot alter the meaning of the statutory text. 1. The Legislative History Does Not Authorize HHS to Prohibit Rebates. The legislative history does not authorize HHS to prohibit rebates as a means of satisfying Section 340B(a)(1). Specifically, the legislative history identified in your email does not addresses the bill that Congress enacted into law. Rather, a separate bill was signed into law by the President on November 11, 1992. As the D.C. Circuit explained in an analogous context, [e]ven if the legislative history of the [Affordable Care Act] were probative, the legislative history of a different healthcare bill that never became law is not. Knapp Med. Ctr. v. Hargan, 875 F.3d 1125, 1130 (D.C. Cir. 2017) (rejecting reliance on legislative history of a House bill that never became law even though parts of it were integrated into the Affordable Care Act). Moreover, legislative history cannot lead the court to contradict the legislation itself. Recording Industry of Am. v. Verizon Internet, 351 F.3d 1229, 1237 (D.C. Cir. 2003) (citing Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994)); see also Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2364 (2019) (Even those of us who sometimes consult legislative history will never allow it to be used to muddy the meaning of clear statutory language)). As the court concluded in PhRMA v. U.S. Dept of Health & Human Servs., under the 340B statute, Congress specifically authorized rulemaking in three places: (1) the establishment of an administrative dispute resolution process, (2) the regulatory issuance of precisely defined standards of methodology for calculation of ceiling prices (which is consistent with the statutory language we have been discussing and the plain language interpretation that we have given to it), and (3) the imposition of monetary civil sanctions. 43 F. Supp. 3d 28, 41 (D.D.C. 2014). Congress thus did not grant HHS rulemaking authority to adopt binding rules that would prohibit rebates as a means of implementing 340Bs obligation to provide covered drugs to covered entities at the ceiling price. The Secretary cannot alter the plain text or structure of 340B through resort to legislative history of a bill that Congress did not enact into law. 2. A Rebate Mechanism Is Permitted Under Existing Law, And Departure From that Status Quo Would Require Rulemaking Subject to Judicial Review Even if Section 340B were interpreted to grant the Secretary authority to require a particular mechanism in the PPA for ensuring that covered entities pay no more than the ceiling price, a position which would conflict with both the holding in the PhRMA case and the Supreme Courts decision in Astra USA, Inc. v. Santa Clara County, 563 U.S. 110, 118 (2011) (stating that the PPAs simply incorporate statutory obligations and record the manufacturers agreement to abide by them), the Secretary has not prohibited rebates as the mechanism for doing so. Indeed, the PPA nowhere prohibits rebates or mandates any other mechanism for ensuring that covered entities pay no more than the ceiling price. As such, the legal status quo is that rebates are a permissible mechanism to achieve appropriate prices for covered drugs purchased by covered entities under 340B. Indeed, HRSAs own guidance supports the conclusion that the status quo permits discounts or rebates See, e.g., Notice Regarding Section 602 of the Veterans Health Care Act of 1992Rebate Option, Health Resources and Services Administration, 63 Fed. Reg. 35239, 35239 (June 29, 1998). Under that guidance, [v]oluntary rebate agreements with covered entities that provide at least the minimum statutory discount and do not contain requirements inconsistent with section 340B and published program guidelines [are] considered consistent with the section 340B rebate program. Id. at 35240. Rebates are currently in use, with the Secretarys approval, by State AIDS Drug Assistance Programs (ADAPs). See id. Accordingly, the Secretary can and should reaffirm that rebates are an appropriate mechanism for complying with 340B ceiling prices for covered drugs offered to covered entities. See Indep. Equip. Dealers Assn v. EPA, 372 F.3d 420, 428 (D.C. Cir. 2004) (By restating EPAs established interpretation of the certificate of conformity regulation, the EPA Letter tread no new ground. It left the world just as it found it, and thus cannot be fairly described as implementing, interpreting, or prescribing law or policy); CTIA-Wireless Assn v. FCC, 466 F.3d 105, 110 (D.C. Cir. 2006) (explaining that agency does not reopen a . . . policy determination merely [by] respond[ing] to an unsolicited comment by reaffirming its prior position) (quoting Kennecott Utah Copper Corp. v. U.S. Dept of Interior, 88 F.3d 1191, 1213 (D.C. Cir. 1996)). Adoption of a new understanding of Section 340Bone that would purport you mandate chargebacks or prohibit rebateswould adversely affect the rights and obligations of Kalderos and drug manufacturers that participate in the 340B program, would qualify as a legislative rule, and would thus have to be promulgated through notice-and-comment rulemaking, for which the Secretary does not, in any event, have such authority. See Nat. Res. Def. Council v. Wheeler, 955 F.3d 68, 83 (D.C. Cir. 2020) (quoting Am. Mining Congress v. Mine Safety & Health Admin., 995 F.2d 1106, 1109, 1112 (D.C. Cir. 1993) (A legislative rule is one that has legal effect or, alternately, one that an agency promulgates with the intent to exercise its delegated legislative power by speaking with the force of law.); Natl Min. Assn v. McCarthy, 758 F.3d 243, 250 (D.C. Cir. 2014) (Legislative rules have the force and effect of law and may be promulgated only after public notice and comment); Clean Air Council v. Pruitt, 862 F.3d 1, 9 (D.C. Cir. 2017) ([A]n agency issuing a legislative rule is itself bound by the rule until that rule is amended or revoked and may not alter [such a rule] without notice and comment) (internal quotation marks omitted). Finally, a determination by the Secretary that would purport to limit rebates, contrary to the status quo, would mark the consummation of the agencys decisionmaking process, and would be [an action] by which rights or obligations have been determined, or from which legal consequences will flow. U.S. Army Corps of Engineers v. Hawkes Co., 136 S. Ct. 1807, 1813 (2016) (quoting Bennett v. Spear, 520 U.S. 154, 177-78 (1997)). Departure from the status quo to prohibit a rebate option would be a judicially reviewable final agency action. Id. at 1814. Thank you for your consideration of our perspective. Very truly yours, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) From: Chang, William (HHS/OGC) <William.Chang@hhs.gov> Date: Wednesday, Sep 02, 2020, 9:30 PM To: Sarraille, William <wsarraille@sidley.com> Subject: RE: Proprietary and Confidential Dear Mr. Sarraille: Thank you again for the engagement and your thoughtful response. Regarding legislative history, can you please help me understand the following statements from H.R. 102-384 (Sept. 22, 1992)? The Secretary would have the discretion to determine the mechanism (rebate, point-of-purchase discount, or otherwise) for assuring this price reduction, which would apply only to drugs for which payment is not made separately to the clinic or other protected purchaser by a State Medicaid program. The Committee bill does not specify whether covered entities would receive these favorable prices through a point-of-purchase discount, through a manufacturer rebate, or through some other mechanism. A mechanism that is appropriate to one type of covered entity, such as community health centers, may not be appropriate to another type, such as State AIDS drug purchasing programs. The Committee expects that the Secretary of HHS, in developing these agreements, will use the mechanism that is the most effective and most efficient from the standpoint of each type of covered entity. The statutory provision at issue identifies an agreement with each manufacturer and modifies any rebate or discount with as provided by the Secretary. [A]s provided by the Secretary is part of the description of the amount required under the agreement. In that context, an appropriate definition for provided is to make a proviso or stipulation in the agreement. So isnt it reasonable to read the first sentence to say that the amount required under the agreement must take into account any rebates or discounts that the Secretary has provided for in the agreement? That reading is also consistent with the quoted legislative history. Putting the legal issue aside, we have elevated the policy concerns that you and your client have raised and we are working toward a response as quickly as possible. We appreciate your desire to offer a market-based solution on this important issue. Respectfully, Will Chang Deputy General Counsel 202.819.0810 Legal Assistant: Anya Lewis, Anya.Lewis@hhs.gov From: Sarraille, William <wsarraille@sidley.com> Sent: Tuesday, September 1, 2020 12:11 AM To: Chang, William (HHS/OGC) <William.Chang@hhs.gov> Subject: Proprietary and Confidential Dear Mr. Chang, Thank you for speaking with me at the end of last week. As discussed, I wanted to follow up with my written analysis of the 340B Program statute and the Secretarys authority. In short, based on our review of the 340B Program statute, we believe the Secretary does not have the authority to prescribe how the ceiling price is effectuated to covered entities. The statute does provide for the establishment of a 340B ceiling price and that the ceiling price must be offered. But it does not dictate how the ceiling price is offeredjust that it must be offered. On our call, you had mentioned language found at 42 U.S.C. 256b(a)(1), which states, in part, that [t]he Secretary shall enter into an agreement with each manufacturer of covered outpatient drugs under which the amount required to be paid (taking into account any rebate or discount, as provided by the Secretary) to the manufacturer for covered outpatient drugs . . . purchased by a covered entity ... does not exceed the ceiling price. A plain language reading requires, of course, that the text be read in context. See Bailey v. U.S. 516 U.S. 137, 143 (1995) (we will look not only to the word itself, but also to the statute . . . to determine the meaning Congress intended.). Here, the context establishes that the language is limited to addressing the amount to be paid, not the form that the payment is to take. The central focus of the sentence lies with the key, core phrase the amount required. This core focus on the amount required is reinforced again at the end of the sentence, where the mandate appears that the price paid [can]not exceed the ceiling price. The plain language of the parenthetical contemplates only that the amount calculated will include any rebate or discount. Thus, the Secretary is to determine the amount required by including both rebates and discounts, as he or she determines those amounts should be applied. The Secretary is tasked with determining whether the amount required is present by determining how that amount is reflected after rebates and discounts are considered. But the Secretary is not authorized to determine whether rebates or discounts may be employed. Congress clearly intended and stated that both should be considered in the determination of the amount. Indeed, rebates are mentioned first, showing that this mechanism was, if anything, considered the primary option. Having addressed the amount issueand only that issue in the first sentence of Section 256b(a)(1) it is the next sentence where Congress contemplates the action of extending the ceiling price to covered entities. That sentence states that manufacturers must offer the ceiling price to covered entities (without any further direction or limitation). Specifically, the next sentence states: the manufacturer [must] offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price. The statute does not in any way limit an acceptable offer to one effected through chargebacks. The clause does not say must offer by discount. Congress could have said that, but it did not. Indeed, such a limitation would have been nonsensical in light of the earlier referencethe prior contextto rebates or discounts. Chargebacks, rebates, or other mechanisms are equally satisfactory options to offer a drug at the ceiling price. That is, we believe, the only conclusion that can be drawn from the plain language of the text. In addition, the legislative history of the 340B Program further supports that Congress envisioned the 340B ceiling price being effectuated through both discounts and rebates. Specifically, the 1992 Congressional Record describes the 340B legislation and repeatedly refers to rebates and discounts and to duplicate rebates. See 138 Cong. Rec. 17882 (Oct. 8, 1992). (As an aside, to have further defined or limited (or allowed the Secretary to define or limit) how a manufacturer must offer the ceiling price would not have made sense because the terms chargebacks, rebates, and discounts are not even clearly distinguishable from one another. This fact is supported in the governments recent 2019 proposed rule to remove certain fraud and abuse safe harbor protections, where the government defined chargebacks as a payment made directly or indirectly by a manufacturer to a dispensing pharmacy so that the total payment to the pharmacy for the prescription pharmaceutical product is at least equal to the price agreed upon in writing between the Plan Sponsor under Part D, the Medicaid MCO, or a PBM acting under contract with either, and the manufacturer of the prescription pharmaceutical product. See 84 Fed. Reg. 2340 (Feb. 6, 2019). The chargebacks discussed in this proposed rule are almost indistinguishable from the rebates contemplated by the Kalderos model.) Accordingly, the must offer language does not prohibit the Kalderos model. Manufacturers will be offering drugs at (or below) the ceiling price. Chargebacks, rebates, and other discount mechanisms are common throughout the healthcare system, which Congress was well aware of at the time it drafted this language. The use of a chargeback, rebate, or other discount provided after the purchase does not mean a covered entity was not offered the ceiling price or that the amount to be calculated under the statute was or is not the amount required. Other sections of the statute reinforce the flexibility that exists in the offer of ceiling prices. 42 U.S.C. 256b(d)(2)(B)(iv), for instance, discusses a system for ordering, purchasing, and delivery of 340B drugs which include[s], but is not limited to, chargebacks. The reference to including necessarily requires other mechanisms besides chargebacks. See, e.g., Fed. Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95, 100 (1941) ([T]he term including is not one of all-embracing definition, but connotes simply an illustrative application of the general principle); accord Alabama v. North Carolina, 560 U.S. 330, 340-41 (2010); see also Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (The text employs the terms including and such as . . . to indicate the illustrative and not limitative function of the examples given); Masters Pharm., Inc. v. DEA, 861 F.3d 206, 221 (D.C. Cir. 2017) ([I]t is well established that the word include often precedes a list of illustrative examples, rather than an exclusive list of indicia of an identified wrong); Cobell v. Norton, 240 F.3d 1081, 1100 (D.C. Cir. 2001) (It is hornbook law that the use of the word including indicates that the specified list . . . that follows is illustrative, not exclusive) (quoting Puerto Rico Maritime Shipping Auth. v. ICC, 645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981)); United States v. $215,587.22 In U.S. Currency, 306 F. Supp. 3d 213 (D.D.C. 2018) (same). That reference also does not limit in any way what those other mechanisms may be. Instead, this language requires the Secretary to establish a standardized identification system, which involves the identification of payments for manufacturers, distributors, wholesalers, and covered entities, but the plain language does not in any way limit the application of that identification system to the use of chargebacks. This clause does not permit the Secretary to dictate a chargeback or rebate mechanism for the effectuation of ceiling prices. The statutory reference to mechanisms other than chargebacks in Section 256b(d)(2)(B)(iv) is not limited to ADAPs. It is not limited in any way. Importantly, HRSA has repeatedly acknowledged recently that its authority to issue regulations is limited to specified areas (not relevant here), and that it cannot predicate enforcement on guidance, unless the statute is clear on the applicable question. The plain language of the statute does not limit the means by which 340B ceiling pricing is made available; no such limitation exists under the statute clearly or otherwise. Indeed, even if the Secretary believes he can specify whether both chargebacks and rebates can be used, he should permit both. The intractable problems of duplicate rebates and diversion, documented exhaustively in a host of government reports, HRSAs own audits, and data submitted by manufacturers, can only be addressed if a rebate mechanism is employed. The chargeback mechanism has failed. It is, unfortunately, as simple as that. Consistent with the Administrations focus on market-based solutions to issues in the health care system, the Secretary should let the market employ the full range of mechanisms, as the market determines appropriate, to solve the problems that are rife within a deeply troubled 340B program. In fact, this is a bridge the Secretary has, in our view, already crossed. For many years, some participants in the 340B program have employed a rebate mechanism. The Secretary should not, consistent with the Administrative Procedures Act, allow some participants a mechanism that is denied to others. I hope this analysis is helpful. We look forward to seeing HRSAs statement on this rebate mechanism issue. Best regards, Bill Sarraille Sent with BlackBerry Work (www.blackberry.com) From: Chang, William (HHS/OGC) <William.Chang@hhs.gov> Date: Wednesday, Aug 26, 2020, 10:15 PM To: Sarraille, William <wsarraille@sidley.com> Subject: Re: 340B My cell below. Respectfully, Will Chang Deputy General Counsel 202-690-7741 (o) 202-819-0810 (c) Legal Assistant: Anya Lewis Anya.Lewis@hhs.gov On: 26 August 2020 21:59, "Sarraille, William" <wsarraille@sidley.com> wrote: 700 would be terrific. Where should I reach you? Thank you! Sent with BlackBerry Work (www.blackberry.com) From: Chang, William (HHS/OGC) William.Chang@hhs.gov Date: Wednesday, Aug 26, 2020, 9:07 PM To: Sarraille, William wsarraille@sidley.com Subject: RE: 340B No problem. I am available at 7 730; 930 11. Respectfully, Will Chang Deputy General Counsel 202-690-7741 (o) 202-819-0810 (c) Legal Assistant: Anya Lewis, anya.lewis@hhs.gov From: Sarraille, William <wsarraille@sidley.com> Sent: Wednesday, August 26, 2020 9:00 PM To: Chang, William (HHS/OGC) <William.Chang@hhs.gov> Subject: RE: 340B So sorry. Just seeing. I am on vacation and did not have a connection until a few minutes ago. Is there a good time to speak early tomorrow? Thank you. Sent with BlackBerry Work (www.blackberry.com) From: Chang, William (HHS/OGC) William.Chang@hhs.gov Date: Wednesday, Aug 26, 2020, 3:46 PM To: Sarraille, William wsarraille@sidley.com Subject: 340B Bill: Can we chat briefly to follow up on the 1 pm call? I am available until 4, from 430 530, 6 615, after 630. I dont think this call should be more than 5 mins. Thank you. Respectfully, Will Chang Deputy General Counsel 202 690 7741 (o) 202 819 0810 (c) Legal Assistant: Anya Lewis, anya.lewis@hhs.gov **************************************************************************** ************************ This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************** ************************ From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Sent: Tuesday, November 17, 2020 10:13 AM To: Jeremy Docken Cc: Herzog, Michelle (HRSA); Britton, Chantelle (HRSA); Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: RE: Kalderos Update: Changing rebate model in consideration of covered entity feedback Thank you for the update. We will review the information you have provided. Krista M. Pedley, PharmD, MS RADM, USPHS Assistant Surgeon General Director, Office of Pharmacy Affairs ph: 301-443-5294 kpedley@hrsa.gov Sign up for email updates! From: Jeremy Docken <jdocken@kalderos.com> Sent: Friday, November 13, 2020 9:55 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; William Sarraille <wsarraille@sidley.com>; Trevor L. Wear <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com> Subject: Kalderos Update: Changing rebate model in consideration of covered entity feedback Dear Rear Admiral Pedley: We hope you, your family, and your team members are safe and well. I wanted to provide an update on our Kalderos 340B Pay offering. Based on numerous discussions with covered entities large and small, we have decided to make a fundamental change to 340B Pay. Namely, covered entities will be able to choose whether to use a rebate model or keep their existing upfront discount process for drugs dispensed at their own pharmac(ies). Covered entities will be able to make the choice upon signing up to the Kalderos platform and will also be able to change their choice after initial selection. We heard covered entity concerns that the rebate model could potentially pose issues with their upfront cash flow/working capital. We are making this change to eliminate those concerns. While our own economic analysis did not find a working capital issue with our rebate model, due to the speed and frequency rebates are paid, we empathize with covered entities who are fearful of any changes that may impact working capital during a healthcare and economic crisis. We are confident we can make this change and still be effective in preventing most duplicate discounts originating from covered entity owned pharmacies due to our advanced machine learning processes developed and improved over time since we launched in 2016. Importantly, a rebate model will still need to be used for product dispensed at contract pharmacies. Contract pharmacies remain the most challenging outlet to prevent duplicate discounts, and we believe no other option other than a rebate model will be effective to solve the duplicate discount problem at contract pharmacies. We continue to solicit feedback from all stakeholders to create an equitable solution to the duplicate discount problem. We value the feedback we have received to date from covered entities, state Medicaid agencies, and manufacturers. We did not build our rebate model at the request or direction of manufacturers or covered entities. We are an independent, mission-focused technology company who built our rebate model after years of studying the root causes for duplicate discounts and trying to solve the duplicate discount problem using other methods. Only after exhausting other methods to solve duplicate discounts, we concluded that rebates are the most effective way to improve program compliance. We are committed to listening to the 340B community and implementing changes based upon lessons learned. Exactly what we have done with the change to our model explained in this email. Please let us know if you have any questions about this update, or if you have any other questions since our last meeting. Best regards, -- Jeremy Docken CEO (he/him/his) M: 773 934 3672 | O: 312 855 2030 jdocken@kalderos com kalderos com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. From: Jeremy Docken <jdocken@kalderos.com> Sent: Wednesday, December 9, 2020 9:22 AM To: Krista M Pedley, PharmD, MS Cc: Herzog, Michelle (HRSA); Chantelle Britton; Sarraille, William; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: Kalderos//HRSA: Draft rebate language for your consideration Attachments: Draft Rebate Language for HRSA.docx Good morning Rear Admiral Pedley- We believe that time is rapidly running out to address the intractable problem of duplicate discounts. The problem is now at a critical juncture with the impending implementation of the PBM rebate rule. If there is not a fair, timely method to assess when a 340B price is invalid when claimed in connection with a Part D patient, manufacturers will default to the 340B price and patients will be deprived of the point of sale benefit the Administration seeks to ensure for those patients. I understand that one thought the agency has is that the ADR rule could address the problem of duplicate discounts. However, I am confident the ADR rule alone cannot address the problem. Manufacturers will not be able to initiate an ADR without going through a long, cumbersome audit process, and the ADR process itself is likely to be lengthy, unfortunately. We are genuinely committed to being a fair, even-handed broker administering a fair, balanced process that stays true to the agency's vision for the program. Accordingly, we offer the attached proposed guidance communication for your consideration. It both sets out the legal basis for rebates (the statute requires the 340B price to be offered, but the statute, regulation, and the PPA do not dictate what means are used to offer that price) and reflects a balanced message regarding the need for any rebate mechanism to not be burdensome. In that regard, the proposed guidance notes the Agencys anti-discrimination policy and the cautionary message that, if the mechanism does not result in a required 340B price being provided, civil monetary penalties may be applied. We are happy to offer language indicating that a rebate mechanism must be reasonable and fair to 340B entities because it, in fact, is itself dedicated and committed to this standard. We would be pleased to discuss this suggestion with you. Thank you for your consideration of this request. -- Jeremy Docken CEO (he/him/his) M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. The Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA) has received questions regarding the use of a rebate model to provide the 340B ceiling price to covered entities, as opposed to a wholesaler chargeback method. Pursuant to section 340B(a)(1) of the Public Health Service Act, manufacturers must offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price. The 340B statute, regulations, and the Pharmaceutical Pricing Agreement (PPA) do not dictate whether the 340B ceiling price must be offered through a wholesaler chargeback, rebate, or other mechanism. Accordingly, manufacturers are not limited in how the 340B ceiling price must be offered to covered entities under the 340B program. The mechanism by which the 340B ceiling price is offered is thus left to program participants to determine. In the ADAP context, we noted our view that rebate processes should reflect standard business practices. 63 Fed. Reg. 35239 (June 29, 1998). We believe that such a standard should also be followed for other rebates. If rebate mechanisms are unduly burdensome, HRSA may conclude that they are discriminatory, consistent with HRSAs May 23, 2012 Clarification on Non- Discrimination Policy. 59 Fed. Reg. 25110 (May 13, 1994). Finally, if a manufacturer using a rebate system fails to provide the correct 340B ceiling price, the manufacturer could be subject to civil monetary penalties under 42 C.F.R. 10.11. From: Jeremy Docken <jdocken@kalderos.com> Sent: Monday, December 21, 2020 5:45 PM To: Keane, Thomas (OS/ASA/IOS) (CTR) <Thomas.Keane@hhs.gov> Cc: Chad.Mathis@hhs.gov Subject: 340B & Part D: Implications of new OIG Final Rule on 340B Dr. Keane, Thank you for speaking with me last week regarding the Administrations consideration of a 340B rebate model. As discussed, I wanted to follow up to provide brief bullets on the issue of how only a rebate model will allow the Administrations Part D rebates to be provided to patients at the point-of-sale. On November 30, 2020, HHS OIG issued a final rule that excludes Medicare Part D rebates from protection under the AKS discount safe harbor and creates a new safe harbor for point-of-sale (POS) chargebacks in Medicare Part D. The final rule defines POS chargebacks as a rebate (a point-of-sale chargeback is a payment by a manufacturer made directly or indirectly (through a PBM or other entity) to a dispensing pharmacy equal to the reduction in price agreed upon in writing ...). In order to be protected under the POS discount safe harbor, the discount must be fully reflected in the price of the product when dispensed at the pharmacy. In the preamble to the final rule, OIG recognized the potential for 340B and POS duplicate discounts in Part D, but noted that guidance regarding how to prevent or resolve such duplicate discounts was outside the scope of the OIG final rule. Without a rebate model, manufacturers will have no way of identifying when a duplicate discount will occur and will either (1) have to pay excessive discounts by honoring both a POS chargeback and 340B discount or (2) preemptively denying all Part D POS chargebacks when there is any suspicion that the product may be subject to a 340B discount, meaning that patients would not realize any savings. Consider the following example: Prices: WAC: $500 Part D Discounted Price: $300 340B Ceiling Price: $0.30 When a Part D patient has his or her drug filled at a 340B pharmacy, the pharmacy, which paid $500 for the drug, will request and be approved for a Part D chargeback equaling $200 to get to the discounted $300 price. The patient would pay a lower copayment based on that lower $300 price. Without a 340B rebate / point-of-sale chargeback model, the pharmacy then classifies the dispense as a 340B discounted product and seeks a replenishment from the wholesaler at the 340B price for a discount of $499.70. The manufacturer would have no way of knowing that a Part D POS chargeback was already applied to that dispense and would honor a 340B chargeback to the wholesaler of $499.70. In total, the manufacturer would have paid a $699.70 discount on a $500 drug, raising significant fraud and abuse concerns. With a 340B rebate / point-of-sale chargeback model, the pharmacy then classifies the dispense as a 340B discounted product and seeks a 340B rebate to get to the 340B ceiling price through a third-party rebate provider, such as Kalderos. Armed with the necessary dispense data, the third-party rebate provider can identify that a Part D POS chargeback has already applied and provide the difference between the POS chargeback price and the 340B ceiling price for a discount of $299.70 ($300 - $0.30). Here, the pharmacy receives the correct discount under the 340B program and the patient benefits from the Part D POS chargeback price. If this rebate model cannot be implemented, the outcome is likely to be either (1) both discounts are stacked on top of one another (a total of $699.70 paid to the pharmacy on a drug costing $500), or (2) the manufacturer would deny the Part D POS chargeback on all 340B dispenses, harming the patient by making the patient pay a copayment based on the undiscounted price. I hope this outline is helpful, please let me know if you have any questions or if I can provide any other information. Best, -- Jeremy Docken CEO (he/him/his) M: 773 934 3672 | O: 312 855 2030 jdocken@kalderos.com kalderos com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. From: Jeremy Docken <jdocken@kalderos.com> Sent: Monday, January 04, 2021 3:06 PM To: Eric Hargan <eric.hargan@hhs.gov> Cc: Keane, Thomas (OS/ASA/IOS) (CTR) <Thomas.Keane@hhs.gov>; Chad.Mathis@hhs.gov Subject: 340B Rebates - Follow-up request Dear Deputy Secretary Hargan- We hope you had a great holiday and Happy New Year! I wanted to follow up on our prior discussions in light of the recent HHS OGC Advisory Opinion on contract pharmacies under the 340B Program. As the agency moves forward with requiring contract pharmacy arrangements, it is more important than ever to ensure that the 340B program operates in a manner that is consistent with the statutory prohibition on duplicate discounts. Contract pharmacy arrangements increase the risk of duplicate discounts and the current chargeback model is not effective at preventing them. As we have shared, a rebate model is the only option to ensure that duplicate discounts are prevented, restoring integrity to the 340B program. We urge the government to issue a statement recognizing that a rebate model is an appropriate option under the statute. The Part D PBM rebate rule presents additional urgency to permit a rebate model. Without an opportunity to assess when a 340B price is claimed in connection with a Part D patient, manufacturers will default to the 340B price and deny the Part D discount. As a result, patients will not benefit from the point of sale discount the Administration seeks to ensure for under the rule. Finally, we've noticed an increase in covered entities refusing to participate in good faith inquiries regarding duplicate discounts. Good faith inquiries have been our primary method to-date to prevent duplicate discounts, so a reduction in covered entities participating in good- faith inquiries increases the importance of allowing 340B rebates to prevent duplicate discounts. While we recognize that the transition to the new Administration is upcoming, we hope that you can issue a statement regarding the rebate model now given the challenges of preventing duplicate discounts, the continuation of contract pharmacy arrangements, and the implementation of the Part D PBM rebate rule. The agencys release of the OGC Advisory Opinion on contract pharmacies indicates that clarification statements can be released now. Without a rebate mechanism, duplicate discounts cannot be addressed and the pass through of Part D rebates to consumers will be fundamentally undermined, as manufacturers are forced to recognize 340B duplicate discounts and then deny Part D rebates. Thank you for your consideration and all of your work to support the 340B program. Best regards, -- Jeremy Docken CEO (he/him/his) M: 773.934.3672 | O: 312.855.2030 jdocken@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. From: Sarraille, William Sent: Tuesday, January 26, 2021 9:14 AM To: Krista.Pedley@hrsa.hhs.gov; Michelle.Herzog@hrsa.hhs.gov Cc: jdocken@kalderos.com; Wear, Trevor L.; Hardcastle, Elizabeth Kolbe Subject: Meeting Request Dear Rear Admiral Pedley and Ms. Herzog, We hope this email finds you both well. We appreciate the time you took with Kalderos last year to discuss the rebate model option under the 340B program. We understand that, in light of the change in Administration, there was a view within the government that a communication about the rebate model should be delayed until the new Administration is in place. We are reaching out now to resume our discussions and to request a meeting now that the new Administration has taken office. As we have stated before, Kalderos is genuinely committed to being a fair, even-handed broker administering a fair, balanced process that stays true to the agency's vision for the program. We continue to believe that a rebate model option is the only way to ensure compliance with the 340B prohibition on duplicate discounts. Nonetheless, without a communication from HRSA, some stakeholders are hesitant to move forward with a rebate option. Thank you for your consideration. We look forward to hearing from you. Best regards, Bill WILLIAM A. SARRAILLE Partner SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, DC 20005 +1 202 736 8195 wsarraille@sidley.com www.sidley.com 1 From: Jeremy Docken <jdocken@kalderos.com> Sent: Wednesday, May 5, 2021 2:29 PM To: Garrison, Elizabeth (HRSA) Cc: Pedley, Krista (HRSA); Herzog, Michelle (HRSA); Faria, Aisha (HRSA); Britton, Chantelle (HRSA); Wear, Trevor L.; Hardcastle, Elizabeth Kolbe; Sarraille, William Subject: Re: Kalderos Attachments: Kalderos_HRSA_20210506.pdf m m V Hi Betty, Please find attached the slides Kalderos plans to use during our discussion tomorrow. We look forward to speaking with Admiral Pedley and the team. Many thanks, Jeremy On Mon, Apr 19, 2021 at 11:45 AM Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> wrote: Thanks so much, Lisa. I will set this up and send an invitation shortly. If there is any background information, agenda, etc., please forward as soon as possible. Also, if there are any additional attendees, please let us know as well. Thanks again, and have a great afternoon! Betty Garrison Management Analyst Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Room 8W05A Rockville, MD 20857 Tel: 301-443-2217 2 Email: Egarrison1@hrsa.gov From: Breighner, Lisa M. <lbreighner@sidley.com> Sent: Monday, April 19, 2021 11:30 AM To: Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov>; Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; Wear, Trevor L. <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Sarraille, William <wsarraille@sidley.com>; Faria, Aisha (HRSA) <AFaria@hrsa.gov> Subject: RE: Kalderos Hello, Bill Sarraille is available on May 6, 11:00-11:30 a.m. Thank you. LISA M. BREIGHNER Legal Secretary SIDLEY AUSTIN LLP +1 202 736 8036 lbreighner@sidley.com From: Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> Sent: Monday, April 19, 2021 7:45 AM To: Sarraille, William <wsarraille@sidley.com>; Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; Wear, Trevor L. <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Faria, Aisha (HRSA) <AFaria@hrsa.gov> Subject: RE: Kalderos Good morning, Mr. Sarraille, During the first week of May, Admiral Pedley has the following times available: Monday, May 3 2:00 2:30 pm 2:30 3:00 pm Tuesday, May 4 2:00 2:30 pm 2:30 3:00 pm Thursday, May 6 11:00 11:30 am 11:30 am 12:00 pm Friday, May 7 11:00 11:30 am 11:30 am 12:00 pm Please let us know if any of these times would work. 3 Thanks so much and have a great day!! Betty Garrison Management Analyst Office of Pharmacy Affairs Health Resources and Services Administration 5600 Fishers Lane, Room 8W05A Rockville, MD 20857 Tel: 301-443-2217 Email: Egarrison1@hrsa.gov From: Sarraille, William <wsarraille@sidley.com> Sent: Sunday, April 18, 2021 6:40 PM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; Wear, Trevor L. <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>; Faria, Aisha (HRSA) <AFaria@hrsa.gov>; Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> Subject: RE: Kalderos Thank you so much, Admiral. We look forward to speaking with you. Are there times in the first week of May? Thank you. Best regards, Bill Sent with BlackBerry Work (www.blackberry.com) From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Date: Wednesday, Apr 07, 2021, 3:13 PM 4 To: Sarraille, William <wsarraille@sidley.com> Cc: Jeremy Docken <jdocken@kalderos.com>, Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>, Britton, Chantelle (HRSA) <CBritton@hrsa.gov>, Wear, Trevor L. <twear@sidley.com>, Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com>, Faria, Aisha (HRSA) <AFaria.hrsa@hrsa.gov>, Garrison, Elizabeth (HRSA) <EGarrison1@hrsa.gov> Subject: RE: Kalderos Hello and thank you for reaching out. We are able to meet in a listen only mode so we can hear the updates you have made to your model. Please work with Betty Garrison to provide some possible dates/times in the next few weeks and we can then coordinate on our end. Krista M. Pedley, PharmD, MS RADM, USPHS Assistant Surgeon General Director, Office of Pharmacy Affairs 301-443-5294 Sign up for email updates! From: Sarraille, William <wsarraille@sidley.com> Sent: Tuesday, March 30, 2021 4:00 PM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; Wear, Trevor L. <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com> Subject: RE: Kalderos Dear Rear Admiral Pedley: Thank you for your response. Understanding that you cannot speak to the congressional letter that addresses a rebate option, we would nonetheless like the opportunity to have a call with you. In particular, we would like to use the call to provide an update on recent 340B developments related to Kalderos. We are also hoping to discuss any questions you may have. 5 Please let us know if there is a time in the next week or two that may work for you. Many thanks, Bill WILLIAM A. SARRAILLE Partner SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, DC 20005 +1 202 736 8195 wsarraille@sidley.com www.sidley.com From: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Sent: Wednesday, March 17, 2021 8:00 AM To: Sarraille, William <wsarraille@sidley.com> Cc: Jeremy Docken <jdocken@kalderos.com>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov> Subject: RE: Kalderos Hello Bill HRSA is unable to speak to the referenced letter from Congress. However, if you have updated information to share with HRSA regarding your model, please send those to us as we continue our review. Thank you. Krista M. Pedley, PharmD, MS RADM, USPHS Assistant Surgeon General Director, Office of Pharmacy Affairs 301-443-5294 Sign up for email updates! 6 From: Sarraille, William <wsarraille@sidley.com> Sent: Thursday, March 04, 2021 10:40 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov> Cc: Jeremy Docken <jdocken@kalderos.com> Subject: Kalderos Hello, Admiral Pedley, I hope this finds you well. We understand that the Office of the Secretary was sent a piece of correspondence by some House members. We would like to speak with you about the letter, which we believe contains errors regarding Kalderos. When might be a good time for a call to discuss? Thank you. Best regards, Bill Sent with BlackBerry Work (www.blackberry.com) ************************************************************************************ **************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. ************************************************************************************ **************** The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. 05 06 2021 Redefining g how the business of healthcare performs Jeremy Docken Founder & CEO jdocken@kalderos.com kalderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt kalderos.com Duplicate discounts remain 1 an intractable problem Agenda We changed 340B Pay due to 2 covered entity feedback Responding to covered entities' 3 remaining concerns 4 Data sharing & HRSA notices 5 Request for feedback kalderos 202i Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt 2 Duplicate discounts remain an intractable problem 3 kalderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt v or M $1.6B $1.4B Duplicate discounts remain an intractable problem $1.2B Dollar amount of duplicate discounts Five years of $1B good-faith $800M inquiries lead us $600M to estimate total $400M duplicate $200M discounts exceed $0 $180M $236M $420M $576M $880M $1.24B $1B in 2019 Our good-faith inquiry results suggest that 3-5% of 340B discounts and Medicaid rebates are duplicates. As the 340B program has grown, the financial impact of duplicate discounts has grown, too. As of 2019, that 3-5% adds up to at least $933 million in duplicate discounts, potentially as high as $1.6 billion. Source: Kalderos' Annual Report 4 kalderos 202i Kelderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt We changed 340B Pay as a result of covered entity feedback 5 kalderos 2821 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt We changed 340B Pay as a result of covered entity feedback When we announced 340B Pay to the 340B community in September 2020, some FQHCs asked about what they 340B Pay model now understood might be a working capital impact. allows covered entities Covered entities and certain congressional members shared this feedback with HHS via a November 2020 letter. to choose rebates or By December 2020, we had already made changes to the 340B Pay platform to empower covered entities to choose discounts for their to continue to receive 340B upfront discounts for their own own pharmacies pharmacies, or switch to 340B rebates. We continue to strive to have our platform be a fair, impartial solution that considers needs of stakeholders, just as we have since our company's launch in 2016. kalderos 202i Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Responding to covered d entities remaining concerns kalderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 7 Congress of the United States house of Kepresentatibes Mlashington, DC 20515 Responding to covered entities' remaining concerns February 26, 2021 Acting Secretary Cochran Department of Health and Human Services 200 Independence Ave SW February Washington DC 20201 2021 Dear Acting Secretary Cochran, We write today as leading congressional proponents of the 340B drug discount program to ask you to Furthermore, an information Letter to Acting take immediate action to ensure that manufacturers are prohibited from imposing unilateral changes to the program in direct conflict with congressional intent and decades of written guidance. technology company has allied We were pleased to see 28 attorneys general urge former HHS Secretary Azar to protect the 340B with manufacturers to change poram.We believe hat letter and the Department' Office f General Counsels dvisory opinin released on December 30 and described below, represent some of the most compelling legal arguments the 340B program from one of Secretary Cochran for the actions we ask you to take. As you know, Congress enacted the 3408 Drug Pricing Program in 1992 following the creation of the upfront discounts to post-sale Medicaid Drug Rebate Program. In order for thelr drugs to be covered by Medicald, manufacturers are required to offer discounts to certain public and nonprafit health care organizations known as covered rebates,a change that would entities, including Federally Qualified Health Centers, Ryan White HIV/AlDs Clinics, Medicare/Medicaid Disproportinate Share hospitals, rural hospitals, and children's hospitals. Accorcing to the legislative greatly increase costs for history, Congress's intent in creating the discount program was to "stretch scarce federal resources to reach more eligible patients and provide more comprehensive services." covered entities and give The 340B statute requires drug manufacturers to "offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price. There are no provisions in the statute that allow manufacturers tremendous manufacturers to set conditions or ctherwise impede a provider's ability to access 3408 discounts. The Health Resources and Services Administration (HRSA), which oversees the program, has indicated on leverage over covered multiple occasions, dating back to the early years of the program, that the 340B statute requires We appreciate the dialog, but want manufacturers to provide 340B discounts to covered entities when covered entities purchase drugs to entities. be dispensed through contract pharmacies on a covered entity's behalf.2 to share that this statement is Beginning in the summer of 2020, several drug manufacturers began to announce a range of actions to incorrect, for reasons that we set avoid honoring 340B discounts for certain drugs, many with the highest prices, delivered to covered out in the slides that follow. 1https//portai.ct Manufacturers' Actions Violating 3406 Drug Pricing Program Requlrements] 2 42 U.S.C. 256b(a)(1). 2Notice Regarding Sectlon 602 of the Veterans Health Care Act of 1992: Contract Pharmacy Seruices, 61 Fed. Reg. 49 (Aug. 3, 16) Notice Regardng 340B Drug Pricing ProgramContract haracy Services, 4 Fed. Reg. 10272, 10278 (March 5, 2010). 8 kalderos 2e2i Kelderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Responding to covered entities' remaining concerns 340B Pay provides covered entities better financial outcomes vs. discounts for contract pharmacies Based on our research, we have identified at least three areas where covered entities benefit from 340B rebates vs. discounts for contract pharmacies: 3 Covered entities are paid more Covered entities receive Covered entities have greater quickly and more often larger payments power to stop contract pharmacies from siphoning 340B savings for their own benefit. kalderos 9 2e2i Kalderos. Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt 3XIS Responding to covered entities' remaining concerns Overall, we find the 340B rebate model We commissioned Advisors proposed by Kalderos to be cash flow positive from the perspective of a covered d entity within the assumptions 3 Axis Advisors of our report. Projected positive cash flow is likely resulting from two sources: (1) the increased speed by which the experts in covered entity is able recognize dollars generated from relationships with contract pharmacy (15 days in the rebate 340B REBATE MODEL CASH FLOW ANALYSIS pharmacy model versus 30 days in the existing model) and d (2) the higher payment that economics - to results from n a 340B rebate based on the Prepared for Kalderos Wholesale Acquisition Cost (WAC) March 2021 instead of a commercial Average perform a study Wholesale Price( (AWP)-based reimbursement rate. The sensitivity analysis conducted resulted in positive cash flow for all scenarios tested for the 3 Axis Advisors LLC info@3axisadvisors.com covered I entity, adding a reasonable Page 1 of 33 degree of confidence to this conclusion." kalderos 2021 Kalderos, Ino. This document contains proprietary trade secrets of Kalderos. FoIA Exempt 10 + $83 340B Upfront AWP-17% reimbursement Discount Net Cash + $76 (Excluding TPA and CP Fees) AWP-24% reimbursement Responding to covered entities' remaining concerns - $50 How 340B 340B Price rebates generate Range of net cash generated (range) = $33 to $26 more cash for the covered entity + $84 vs. 340B upfront 340B Rebate WAC (starting point for calculating 340B rebate) Net Cash discounts - $50 (Excluding TPA and CP Fees) 340B Price = $34 Assumptions Net cash generated AWP=$100; WAC=$84, 340B Price=$50 kalderos 11 2021 Kelderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Responding to covered entities' remaining concerns Under a 340B upfront discount model, contract pharmacies generate cash flows by dispensing drugs to patients and Paying 340B rebates collecting proceeds of the sale. Under 340B rebate model, directly covered entities generate cash from rebates for each 340B to the e covered eligible dispense. entity provides s entities Per conversations with covered entities, contract pharmacies use the fact they generate the cash flows as with greater leverage to demand higher fees. negotiating 340B rebates paid to covered entities, not contract power pharmacies, will provide covered entities with greater power to negotiate lower fees, since covered entities, not contract pharmacies, will be paid by the manufacturer. kalderos 12 2021 Kelderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Responding to covered entities' remaining concerns While we disagree with the notion that rebates will give manufacturers "leverage" over covered entities, Improving our we assume some entities are afraid valid rebate for assisting requests will go unpaid. processes As a platform company whose software connects covered entities and manufacturers and covered entities, assisting all parties when a dispute arises is one of our core responsibilities. manufacturers should Our Customer Success and Application Support teams are 340B rebate requests redesigning our processes to ensure we engage with manufacturers and covered entities when rebate requests be denied "fail", in order to avoid disputes from escalating and reducing friction between stakeholders. kalderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt 13 Data sharing & HRSA notices kalderos 14 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Data sharing & HRSA notices Data sharing 3 We understand that HRSA We would be happy to provide This is part of our commitment receives data reports from similar data reports to HRSA; to transparency, which will Apexus as required by the please let us know what might enable HRSA to verify that our Prime Vendor agreement be helpful to you system is ensuring that manufacturers pay what they should and invalid claims (and only invalid claims) fail 15 kalderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Data sharing & HRSA notices 2 HRSA notices We anticipate our first We will encourage manufacturer(s) will be ready manufacturers to post in to move forward with 340B advance of transitioning Pay in June. to our platform (e.g., provide 30-day notice) 16 kalderos 2021 Kelderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Request for feedback kalderos 2621 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 17 Request for feedback Long history of government communication Date Communication Nature of communication 2/26/19 HHS Meeting Description of 340B Pay platform and legal and policy basis. 4/8/19 OIG Comment Letter Description of 340B Pay platform and its legal basis. 5/2/19 HRSA Meeting Description of 340B Pay platform and how it will address 340B duplicate discounts. 5/8/19 CMS Meeting Description of 340B Pay platform and how it will address 340B duplicate discounts. 8/22/19 HRSA Meeting Description of 340B Pay platform, timetable for Implementation, and request for HRSA's legal position. 8/29/19 HHS Communication Further discussion of 340B Pay platform and legal basis. 9/19/19 HRSA Communication Proposed FAQ summarizing legal basis for 340B Pay platform. 9/20/19 HHS Letter Description of 340B Pay platform, policy need for the platform, and legal basis for the platform. 11/21/19 HRSA Meeting Description of 340B Pay platform, timetable for implementation, and request for HRSA's legal position. /4/20 CMS Meeting Further description of 340B Pay platform and timetable for implementation. S/13/20 HRSA Communication Update of pilot and HHS communications. S/14/20 Questions from HRSA 5/18/20 Kalderos Response to HRSA Providing additional Information on CMS engagement and pilot and timing for implementation (again noting June or July go live). 7/13/20 Final HRSA Meeting Final report on pilot completion and reiterated discussion of basis for 340B Pay platform. alderos 2021 Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FOIA Exempt 18 Over more than two years of engagement with the government, Kalderos is at the point of full implementation. Request for feedback During the course of Kalderos' extensive engagement, Status of HRSA has not stated that the 340B Pay violates the 340B statute or that a manufacturer using 340B Pay would be in government violation of the statute. We reiterate our repeated, prior requests for HRSA's legal engagement position on whether, in its view, chargebacks are required by the statute, or whether, as Kalderos believes, and has explained in detail, the statute does not dictate the mechanisms by which 340B prices may be made available. We look forward to continuing to work with HRSA in implementing 340B Pay. We anticipate our first manufacturer customers will be ready to move their products to the platform in June 2021. kalderos 19 202i Kalderos, Inc. This document contains proprietary trade secrets of Kalderos. FoIA Exempt Say Hello Jeremy Docken Founder & CEO jdocken@kalderos.com From: Britton, Chantelle (HRSA) To: Anqie Franks Cc: Rusty Hensley; Wear, Trevor L; Hardcastle, Eizabeth Kolbe; Pedley, Krista (HRSA); Herzog, Michelle (HRSA) Subject: RE: [EXTERNAL] Re: Kalderos Direct Discount Platform Update Date: Wednesday, September 4, 2024 1:01:36 PM EXTERNAL EMAIL - Use caution with links and attachments. Hello Angie thanks for today's discussion. We had an opportunity to review your email regarding Kalderos' Direct Discount Platform which would effectuate the 340B price directly to a covered entity as a rebate. Under the 340B Program, the Pharmaceutical Pricing Agreement (PPA) is between the Secretary of HHS and the manufacturer. To the extent a manufacturer would like to discuss its model for 340B pricing with HRSA, HRSA would engage with the manufacturer directly as it is a party to the PPA and responsible for compliance under the 340B Program. Please let us know if you have any questions. Thank you, Chantelle From: Angie Franks <angie.franks@kalderos.com> Sent: Wednesday, August 28, 2024 6:35 AM To: Pedley, Krista (HRSA) <KPedley@hrsa.gov>; Britton, Chantelle (HRSA) <CBritton@hrsa.gov>; Herzog, Michelle (HRSA) <MHerzog@hrsa.gov> Cc: Rusty Hensley <rusty.hensley@kalderos.com>; Trevor L. Wear <twear@sidley.com>; Hardcastle, Elizabeth Kolbe <ehardcastle@sidley.com> Subject: [EXTERNAL] Re: Kalderos Direct Discount Platform Update Dear HRSA team, We, of course, have seen J&J's announcement about a rebate model and have seen trade press reports on HRSA's response to the announcement. In light of these reports, we wanted to follow up on prior email to ask if there is anything else Kalderos should be considering or anything else HRSA would like to see or learn about our model before going live. We would be happy to meet with you to answer any questions. We are also happy to provide a demonstration of our platform and model. Thank you, Angie On Fri, Aug 9, 2024 at 4:19 PM Angie Franks <angie.franks@kalderos.com> wrote: Dear Rear Admiral Pedley, Director Britton, and Deputy Director Herzog, We are writing to provide an update regarding Kaldeross Direct Discount Platform, our model for effectuating the 340B price directly to covered entities as a rebate. We appreciate your prior engagement as we developed this model a few years ago and soft launched it with a pilot program and a manufacturer with a limited distribution network. At the time of our prior engagement, we believed the 340B Program needed a technology solution like the Direct Discount Platform. That could not be more true today. Both covered entities and manufacturers are concerned about actions taken by each other, and about the regulatory challenges that currently exist. We believe that more needs to be done to help increase transparency and improve compliance to improve program sustainability through reduction of duplicate discounts, diversion, and other compliance challenges. The Direct Discount Platform is that solution. Since our prior engagement, we have continued to work to improve our platform to promote ease of use for all stakeholders and are preparing for launch with a manufacturer in the coming months. We expect multiple manufacturers and covered entities to be using the Direct Discount Platform by years end. The Direct Discount Platform is Needed Now Recent developments related to the IRA and ADR process necessitate a transition to a 340B rebate model. Recent IRA guidance from CMS indicate that CMS and the Medicare Transaction Facilitator (MTF) will be challenged to prevent the duplicate discounts that will inevitably occur as a result of the effectuation of the Maximum Fair Price (MFP), Part B and D inflation rebates, and wastage refunds. CMS has recognized in IRA guidance that a rebate model is necessary and appropriate for the effectuation of the MFP while complying with the duplicate discount prohibitions built into the statute. The use of modifiers will not be the answer to prevent non-compliance, as they are voluntary in some settings and there is no means to enforce their use or ensure they are not lost in the process. Further, none of these new discount programs provide manufacturers a sufficient opportunity to audit, dispute, or recoup duplicative discounts, payments, or rebates. Our Direct Discount Platform is built to ensure compliance with the various government drug discount programs. Our model is ready to launch and will seamlessly address both 340B and Medicare compliance, including with drugs subject to an MFP. We believe it is crucial that the Direct Discount Platform enter the market now to transition the system to rebates in advance of MFPs going live, Part B and D inflation rebates being invoiced, and wastage refunds being collected. Additionally, the new ADR regulations place the burden on manufacturers to obtain relevant information (directly or through third parties) to support or defend a dispute. However, the regulations do not provide a process for manufacturers to comply with this requirement. The existing stakeholders in the process, including wholesalers and third-party administrators, are not agents of manufacturers and are not obligated to provide this information. A rebate model is a means through which a third party, that maintains relationships with both manufacturers and covered entities, is able to gain access to the necessary information in an efficient manner that minimizes the requests made of covered entities and others. Accordingly, changes in the marketplace, as a result of the implementation of the IRA and revised ADR regulations, require comprehensive and easy to use technology solutions, such as the Direct Discount Platform, to ensure compliance. Launch of the Direct Discount Platform Technology-driven approach. Our focus has been, and continues to be, on service as a technology partner to help improve the integrity of the 340B Program for all stakeholders through data transparency and easy-to-use IT platforms. Details of Direct Discount Platform. The Direct Discount Platform will be used for all 340B discount requests. Wholesalers will no longer have to submit chargebacks for a manufacturers covered outpatient drugs on the Platform. Under this approach, claims-level data is exchanged between all parties, ensuring accurate and timely payment of discounts and preventing nearly 100% of non- compliant discounts. Our model builds in compliance checks that ensure that a covered entity is approved for 340B pricing and duplicate discounts across all discount programs can be avoided. Benefits to all 340B stakeholders. Our model was designed to benefit both covered entities and manufacturers. A few of the benefits include: Direct Discount funds are accessible faster to covered entities than in a replenishment system, since there is no wait for accumulations. Since funds flow directly to covered entities, they experience greater control over program funds. All stakeholders can access a central ledger of claim and rebate information, ensuring complete transparency to all parties. Transparency of, and access to, the claims and discount information by covered entities and manufacturers can prevent disputes in the first instance and then ease their resolution, if disputes do arise. Our model is simple for covered entities staff or their agents to operate, as the Direct Discount Platform will work with covered entities existing claims management processes. Resource needs and uncertainty in efforts to ensure compliance are reduced for all stakeholders. Our model can prevent nearly 100% of duplicate discounts across all discount programs. This transparent approach fosters trust and creates positive working relationships between key stakeholders. Covered entities of any size can access the platform on the same terms and conditions as any other covered entity. Our model and platform can be used with other discount or payment programs. Direct Discount Platform Communications and Next Steps As we prepare for launch with a new manufacturer, we will implement a communication plan to provide information and training to stakeholders. Below are the key steps we will take in collaboration with our manufacturer partner: The manufacturer will update their 340B policy notice to include the Direct Discount Platform, with information for covered entities to register on the platform. Kalderos will also post this notice on our website. The manufacturer will notify channel partners of the change and the timing for the change in policy. Kalderos will provide technical assistance to help onboard covered entities, including having an online tutorial for how to sign-up and use the Direct Discount Platform and an active customer service team that can assist covered entities with any issues. Additionally, we will have a help center accessible through the Direct Discount Platform website. * * * We are very excited about the benefits the Direct Discount Platform will bring to covered entities and manufacturers alike. Best regards, Angie Franks -- Angie Franks CEO M: 651.271.2994 angie.franks@kalderos.com kalderos.com The information transmitted by this email is intended only for the person or entity to which it is addressed. This email may contain proprietary, business-confidential and/or trade secret material. If you are not the intended recipient of this message, be aware that any use, review, re-transmission, distribution, reproduction or any action taken in reliance upon this message is strictly prohibited. If you received this in error, please contact the sender and delete the material from all computers. CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and are confident the content is safe.
HRSA-2026-0001-2448(no commenter metadata)2026-04-27T04:00Z7,715 chars
See Attached The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5 600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Syracuse Area Health in Syracuse, Nebraska, we appreciate the opportunity to comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other issues, the RFI asks whether HRSA should implement a rebate model under the 340B Program in place of the longstanding upfront discount model that has functioned effectively for decades. The answer is no. As detailed below, a rebate mechanism would impose substantial administrative, operational, and financial burdens on Syracuse Area Healthburdens that far outweigh any potential benefits. HRSA's own cost estimates underscore the magnitude of these impacts. More fundamentally, the premise that HRSA must balance the interests of covered entities and drug manufacturers when selecting a discount mechanism is incorrect. HRSA's statutory obligation is to prioritize the needs of covered entities so they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount model, which Syracuse Area Health has relied upon for years, is the most effective way to fulfill that purpose. The RFI poses 30 questions and encourages commenters to provide supporting facts, research, and evidence. Syracuse Area Health has responded as comprehensively as possible within the limited time available. For cost-estimation purposes, we assumed that any future Rebate Program would include the 10 drugs previously approved for HRSA's original program, as well as the drugs selected under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, consistent with HRSA's February 25, 2026 Information Collection Request. The addition of the 2027 drugs significantly increases the expected administrative and financial burden. More drugs and more manufacturers mean more claims to submit, more rebates to track and reconcile, more funds advanced to manufacturers while awaiting statutory discounts, more disputes over delays or denials, and ultimately fewer resources available for patient care and community health services. Administrative Costs Under a Potential 340B Rebate Program A rebate model would require Syracuse Area Health to incur substantial new administrative expenses. When we elected to participate in the 340B Program, we anticipated reasonable administrative costs and structured our staffing, operations, and compliance systems around an upfront discount model. Transitioning to a rebate mechanism would require significant new resources and impose burdens far beyond what we planned for as a 340B hospitaland far beyond what we experience today. Staffing Impacts Syracuse Area Health does not currently have the personnel necessary to manage the demands of a rebate-based program. Implementing such a model would require additional staffing and training, diverting resources from patient care. Systems and Infrastructure Our technological systems and operational infrastructure were designed around upfront discounts. A shift to a rebate model would necessitate costly system modifications, new workflows, and expanded data-management capabilities. Data Collection Requirements During the prior iteration of the Rebate Program, both HRSA and drug manufacturers asserted that a rebate model would not impose new data burdens because hospitals already provide the necessary information through 340B ESP. That assertion is incorrect. A rebate mechanism would require additional data collection, validation, and submission processes that do not exist today. Payment Timing and Cash-Flow Impacts Unlike the upfront discount model, a rebate mechanism would require Syracuse Area Health to advance funds to drug manufacturers and wait for reimbursement. Even if manufacturers paid rebates within the previously proposed 10-day window, the delay would create meaningful cash-flow challenges and reduce the resources available for patient services. Adverse Impacts on Patient Care These cumulative costs and burdens would diminish Syracuse Area Health's ability to use 340B savings to support patient care and community health programs. The result would be tangible harm to the patients and communities we serve. Reliance Interests The RFI asks whether covered entities have reasonable reliance interests in continuing to receive 340B ceiling prices through upfront discounts. Respectfully, this framing is flawed. The mere existence of statutory authority to use rebates does not imply that HRSA may or should exercise that authority, particularly when the agency has consistently used upfront discounts since the program's inception. Syracuse Area Health reasonably relied on this longstanding practice when designing operations, staffing, contractual relationships, and financial planning. A fundamental shift to a rebate model would disrupt these settled reliance interests without any demonstrated problem in the current system and at enormous cost to covered entities. 2 Problems With the Beacon IT Platform During the brief preparation period for HRSA' s original Rebate Program, we encountered significant issues with the Beacon IT platform selected by participating manufacturers. These problems further illustrate the operational risks and inefficiencies inherent in a rebate-based approach. Efforts to Avoid 340B/MDPNP Duplicate Discounts HRSA has already acknowledged that drug manufacturers have other viable options to prevent duplicate discounts under the 340B and MDPNP programs. Given the substantial burdens a rebate mechanism would impose on Syracuse Area Health, HRSA should rely on those alternatives. Any other approach would improperly elevate the interests of drug manufacturers over those of covered entities, their patients, and the communities they serve. We also support the American Hospital Association's position that a third-party clearinghouse offers a lawful, effective, and far less burdensome alternative to a rebate model. At a minimum, HRSA must provide a reasoned explanation if it determines that a clearinghouse is not viable or is more costly than a rebate mechanism. Conclusion For all of these reasons, Syracuse Area Health respectfully submits that the costs of any Rebate Program would far outweigh any anticipated benefits. HRSA should abandon the rebate concept entirely and instead adopt a neutral, third-party clearinghouse. If HRSA nonetheless chooses to move forward with this proposal, it must allow Syracuse Area Health and other covered entities to comment on the specific features of the program. While we have provided detailed information to the best of our ability, we do so without clarity on critical elements such as the list of included drugs, required data elements, grounds for rebate denials, dispute-resolution processes, and other essential guardrails. Failing to solicit additional comments on these specifics would amount to a failure to consider important aspects of the issue. We appreciate your consideration of these comments and look forward to continued engagement with HRSA on this matter, which has significant implications for the millions of patients who rely on the 340B Program. Please contact me with any questions. Sincerely, .,''' LIA-'11' .' -i-" CEO Syracuse Area Health Syracuse, Nebraska 3
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See Attached T BothwellM Regional Health Center, April 2, 2026 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 and Request for the Bipartisan Appropriations Letter to Block Implementation of the 340B Model to be signed Dear Administrator Engels: On behalf of Bothwell Regional Health Center, I gratefully take the opportunity to comment on the Department of Health and Human Services' (HMS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no" and we strongly ask for the rebate model to not be implemented. As explained below, any rebate mechanism will impose enormous costs and burdens on Bothwell Regional Health Center located in Sedalia, Missouri that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Bothwell Regional Health Center has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. I have done my best to provide detailed answers in the limited time available to me. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Bothwell Regional Health Center can spend on patient care and comprehensive health care services. GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 I PHONE: 660-826-8833 I WEB: www.brhc.org Bothwell" Regional Health Center Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Bothwell Regional Health Center to spend significant sums on new administrative costs. When we chose to participate in the 340B program, we understood that there were some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Based on the rebate model information provided and using data from our 340B program, Bothwell Regional Health Center anticipates having 4,000 claims to monitor per year to ensure the appropriate funds are returned by the manufacturer. Additionally, over the course of a year, Bothwell will need to "float" (or rather, loan) about 3 million dollars to purchase medications for our patients. It makes no sense to ask rural hospitals; that by default of the 340B registration requirements, are unable to fund the additional upfront costs with purchasing the medications. Once approved for the program, rural hospitals should only be required to submit data for review by the manufacturers. Based on the strict eligibility guidelines and the compliance focused policies and procedures we have implemented in order to run a compliant 340B program, I anticipate having zero rejected rebates based on claim eligibility. If this is the case for the vast majority of rural hospitals, will this mean the model will be terminated? If so, will the manufacturers be required to reimburse our entity for all the administrative costs, loss of programs for our community, increased staffing costs, etc for the year our entity was forced to loan our scarce funds to the manufactures? Staffing Impacts Under a Potential 340B Rebate Program. Bothwell Regional Health Center does not currently have the staff needed to comply with a Rebate Program. The current estimate from HRSA states these additional steps would only require an additional 5 hours of work per week; this is not realistic. A hospital such as ours has multiple contract pharmacies, multiple TPA's handling our claims transmission as well as mixed use inventory. While some of the TPA's are implementing ways of transmitting data to Beacon, Bothwell will still need to monitor the multiple TPA's, input data from our mixed used claims that qualify, manually submit claims from an in house employee pharmacy and monitor finances in case we need to delay orders of especially high WAC priced medications. The increased WAC impact will need to be followed closely and communicated via reports and presentations to our Leadership Team for financial planning. I believe each rebate claim would require approximately 30 minutes of additional attention. With an estimate of 4,000 affected claims, there is no way we could absorb this into our current workload. An additional full time employee is required to ensure we receive full compensation from our WAC GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 I PHONE 660-826-8833 I WEB: www.brhc.org Bothwell' Regional Health Center purchases. This burden placed on hospitals operating on a shoestring budget is unacceptable. Our hospital was just forced to do a reduction in force and expenses, with another round expected by summer. The rebate model would require us to create and fill additional 340B role(s). Each full time employee hired to manage the rebate model would cost Bothwell approximately $55,000/year in compensation and benefits. While I would love to create an opportunity for a member of community, it seems both financially burdensome as well as unjust to hire an employee without knowing the true future of the rebate program. Our purpose is to serve our community, both patients and employees, with integrity. To create a role that may only exist for one year goes against our intent to act with purpose and integrity in all things. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Bothwell Regional Hospital has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Our organization already spent countless hours setting up the necessary data feeds for four separate TPA's. To require us to go back and update the feeds to include the necessary medical data presents yet another financial burden. Bothwell utilizes an external report writer to set up the data transmission files. Since this is an external service provided, the data is not available to research exact time allocation and subsequent hours billed. However, I feel that an estimate of at least $2,000 is accurate. Utilizing an external report writer to set up our initial data feeds was an expected expense with an anticipated large return of value from the savings that would be generated. Requiring an additional expense for new data feeds, just for the opportunity to part with even more of our low cash reserves in hope that our organization will receive a rebate that will net the same amount of savings pre-rebate model goes against the entire goal of the 340B program. Data Collection By Covered Entities. During the prior iteration of the Rebate Program, both HRSA and the drug companies stated that a rebate mechanism would not impose new data-related burdens on 340B hospitals like ours. For example, both insisted that hospitals already provide the required information through 340B ESP. That is incorrect. Two years ago, the State of Missouri passed bill SB 751 340B. This bill has provisions that prohibit manufacturers from denying, restricting or prohibiting the acquisition or delivery of 340B drugs. Therefore, our organization is not required to submit every claim to ESP. We comply with the manufacturers that request to have the claim data through ESP. This is not the entirety of our claim data. Requiring our entity to add yet another step to our already complex 340B program is unduly burdensome to our rural, safety net hospital. Payment Timing And Potential Cash Flow Impacts. Unlike the existing upfront discount mechanism, any rebate mechanism will force Bothwell Regional Heath Center to effectively provide drug GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 I PHONE: 660-826-8833 I WEB. www.brhc.org /i/*\ \ Bothwell' Regional Health Center companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required under the prior iteration of the Rebate Program, that delayed discount will have meaningful impact on our institution and the patients we serve. Bothwell Regional Health Center started our 340B program in October 2023. The planning/implementation phase took close to a year. During the planning phase it was communicated that the first year of program participation would incur more drug spend than "maintenance" years due to the requirement for our DSH hospital to purchase new 340B inventory at WAC cost until 340B accumulations had been established. This was a known and quantifiable expenditure that our organization was able to anticipate. Implementing a rebate model that requires hospitals to again purchase items at WAC places financial stress on the organization with no burden to the manufacturers. The manufacturers already benefited from our initial WAC purchases (vs the lower GPO prices that DSH entities are prohibited from) and now they will benefit again. Although the entity will eventually recoup the difference via a rebate, it is essentially asking financially strapped safety net hospitals to give a loan to multi-billion dollar drug manufacturers. What do the manufacturers plan to do with the funds that they hold for up to 10 days? They will likely achieve a stable and sizeable amount of money in their coffers as the constant money cycle occurs. Wi11 they be able to earn interest on this money while financial burden remains on critical rural hospitals and the vulnerable community they serve? Adverse Impacts of These Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Bothwell Regional Heath Center will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. One such example could be Pomalyst, used to treat Multiple Myelome (blood cancer) and AIDS-related Kaposi Sarcoma. The current 340B purchase price is $9,036.85 per bottle. The WAC purchase price is currently $25,049.70. This will mean Bothwell will have to "float" $16,012.85 per bottle. We currently have two cancer patients on this medication which would require us to plan to spend over $50k each month and then wait for $32k to be refunded to us by the manufacturer. This is just one of the 25 drugs that will be part of the rebate model. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.' Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Bothwell Regional Heath Center reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 j PHONE. 660-826-8833 I WEB: www.brhc.org Bothwell" Regional Health Center the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. While our hospital does not have prior experience with the Beacon platform, I do have concerns. Currently, the hospitals participating in the 340B program use a variety of TPA's. This is beneficial in many ways such as spreading the vast amounts of data transmission through multiple platforms. This ensures that no one program becomes overloaded with data transmissions that may cause program failures and delays. Hospitals also have the ability to change platforms if they feel their current platform is not up to par. Bothwell recently experienced dissatisfaction with our original TPA. We found the customer service lacking and felt that our TPA needs had changed in the two years of our 340B participation. We then researched and chose a new TPA that is a better fit for our 340B program. Requiring all hospitals to use a single platform for the rebate model creates a monopoly with no recourse for entities that may experiences issues with Beacon while desperately waiting on refunds to keep their doors open. Not only will Beacon have sensitive financial information for each entity but patient medical data as well. These two components are highly sought after by cybercriminals and therefore place Beacon at a high risk for cyberattacks. Is Beacon prepared to withstand the increased risk of a cyberattack? How will Beacon protect the entities that are forced to provide such sensitive information from a data breach? Will Beacon face any fines or be forced to reimburse entities for missed refunds if they fail to complete their part of the claim submission process? Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Bothwell Regional Heath Center, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 I PHONE. 660-826-8833 I WEB. www.brhc.org /'/*\ '\' Bothwell Regional Health Center For all of these reasons, Bothwell Regional Heath Center respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Bothwell Regional Heath Center and other covered hospitals to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Lori Wightman Chief Executive Officer Bothwell Regional Health Center GET WELL. STAY WELL. BOTHWELL. 601 East Fourteenth Street I Sedalia, MO 65301 I PHONE 660-826-8833 I WEB: www.brhc.org
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See Attached re\ Shoshone MEDICAL CENTER www shoshonehealth.com r tlX The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 RE: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837, we are grateful forthe opportunityto comment on the Department of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, anyrebate mechanism will impose enormous costs and burdens on Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 that far outweigh any benefits that might comefrom it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 has relied on foryears, is the best wayto fulfill that purpose of the 340B program. Shoshone MEDICAL CENTER www.shoshonehealth.com h 8. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 has done its bestto provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that anyfuture Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for 2026 drugs alone. Afterall, more drugs and more drug companies means more claims to submit, more rebates to track and reconciles, more moneythat we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 can spend on patient care and comprehensive health care services. Administrative Cost Under A Potential 340B Rebate Program. Any rebate program would require Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 to spend significa nt sums on new administrative costs. When we chose to participate in the 340B program, Shoshone Medical Center 25Jacobs Gulch Kellogg, ID 83837 understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additionalcosts and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond whatwe are experiencing now. All new policies would need to be created for a 340B Model Rebate Pilot Program, a new platform would need to be learned to upload data, our TPA would haveto pull reports for us to get the claims data needed instead of our facility pulling and uploading independently, and an extra platform would have to be accessed to match claims from our EHR to the platform creating the need for increased staffing for a small, 25-bed critical access hospital that has to account for every dollar spent and received as it is. Shoshone MEDICAL CENTER www.shoshonehealth.com Ay, Staffing would create current staff to reallocate work hours from medical care to perform administrative functions to accommodatethe increase in auditing and maneuvering of each platform. The increased training and duties would accountfor more than 5 hours perweek which is what HRSA's current estimate is. Manufacturers are asking for other platforms to be used to participate with them in 340B so learning the new systems and staying on top of the changes per manufacturer is at least double that estimate. Staffing Impacts Under a Potential 340B Rebate Program. Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 does not currently have the staff needed to comply with a Rebate Program. Current staff will be reallocated work hours from medical care to perform administrative functions creating the need to hire another FTE. To hire and train another FTE would require several hours of training Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 has designed its technological systems and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. Payment Timing and Potential Cash Flow Impacts. Unlike the existing upfront discount mechanisms, any rebate mechanism willforce Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 to effectively provide drug companies interest-free loans as we await the discounts that we are owed under the 340B statute. Even if drug companies paid within a 10-day period as required underthe prior iteration of the Rebate Program, that delayed discountwill have mea ningful impact on our institution and the patients we serve. There is no guarantee that the manufacturer will not dispute the claim which could take more than 10 days for our facility to receive payment. Adverse Impacts ofThese Additional Costs And Burdens. All of these many different costs and burdens add up. Unfortunately, that means that Shoshone Medical .,.; 1ga 11St roglarn:i th,.. United S tat .1f I.), mc,,t of , u iful'e di- ;Tv ct.% (x) 1, Arica "re\ Shoshone MEDICAL CENTER www.shoshonehealth.com t3 2 Center 25Jacobs Gulch Kellogg, ID 83837 will no longer be ableto use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patient and communitywill suffer in concrete ways. We are the only hospital in our area serving our community. The next closes hospital is 38.6 miles away. Without our 340B program staffing and possible services may have to be cut. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable may-exercise it in a particularmanner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 reasonably relied on this historywhen designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. Afundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and, given the massive costs thatthis disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so - called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare forthe start of that Program, we encountered serious problems with Beacon. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. yc se 101,31 ee, se:: Tod , ) - ;; of the (Jetted Siste,, l)cpprtincat Agncultere :Ate, v Deo - cosi one MEDICAL CENTER Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSAto adopta third-party clearinghouse, ratherthan a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation forwhy the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Shoshone Medical Center 25 Jacobs Gulch Kellogg ID 83837 respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. H RSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. lf, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837 and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the mostdetailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications forthe millions of patients who rely on the 340B Program. Please contact me if you have questions. Elizabeth Zaborski CFO/Authorizing Official Shoshone Medical Center 25 Jacobs Gulch Kellogg, ID 83837
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See Attached The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Mountrail County Medical Center, Stanley ND, we are grateful for the opportunity to comment on the Depai tment of Health and Human Services' (HHS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead of the upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Mountrail County Medical Center, Stanley ND that far outweigh any benefits that might come from it. HRSA's own calculations of costs are extraordinary. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Mountrail County Medical Center, Stanley ND has relied on for years, is the best way to fulfill that purpose of the 340B program. The RFI poses 30 questions and encourages commenters to include supporting facts, research, and evidence in their responses. Mountrail County Medical Center, Stanley ND has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include the 10 drugs that HRSA previously approved for its original Program and those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, per HRSA's February 25, 2026 Information Collection Request. With the addition of the 2027 drugs, our cost estimates have increased over the estimates we had calculated for the 2026 drugs alone. After all, more drugs and more drug companies means more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Mountrail County Medical Center, Stanley ND can spend on patient care and comprehensive health care services. Administrative Costs Under A Potential 340B Rebate Program. Any rebate program would require Mountrail County Medical Center, Stanley ND to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Mountrail County Medical Center, Stanley ND understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Based on the estimation tool provided by 340B health and our own analysis, the initial 10 drugs proposed for the rebate model could potentially cost our facility up to 133,000 in reduction to savings, that is approximately 30% of our program. After looking at the additional drugs proposed to be added the estimate increased to approximately 40% reduction in saving to hour program. This is not an insignificant loss. In addition, due to the very limited human resources available at our facility to administrate these changes we have already incurred a cost of 15,000 (5,000 one-time fee and a 10,000 annual fee) for service to help manage the rebate process. We now also have additional administrative burden by creating additional bank accounts to try help track rebates as they come it. We exclusively use a contract pharmacy arrangement with no in-house retail pharmacy. As a result, we would have to manage claims eligibility, I.R.A. requirements, and rebate requirements status, including submissions, denial, challenges, resubmissions with an extremely limits staff of 3 people total. All these staff members already have primary duties outside of the 340B. These additional burdens will impact other parts of our facility's ability to perform care for our patients. This rebate program will require daily management from multiple people we do not have to track and manage successfully. Some of these duties involve daily tracking of eligible claims, confirming submissions of claims for rebates to the Beacon platform, tracking each claim for rebate approval, tracking whether the claim was paid, working through the resubmission process for claims that were not approved by manufacturers(effectively giving manufacturers control over the process rather than HRSA) 2 properly auditing claims, rebates and payments. The time and cost can conservatively be estimated at between 10,000 and 20,000 a year. Estimate is purely the cost of hours spent administrating. Each of these additional hours is taken away from patient care at our facility. As this rebate program grows and adds additional drugs, the likely impact for our facility is over 50% lose of savings over time. Staffing Impacts Under a Potential 340B Rebate Program. Mountrail County Medical Center, Stanley ND does not currently have the staff needed to comply with a Rebate Program. The amount of time required for this program could require the addition of additional staff to properly manage. Our facility does not have the resources to hire a dedicated 340B manager. Using 5 hours a week would incure a minimum of 10,000 to 20,000 in cost on the very converative side. If we were to successfully hire a 340 B manager the cost would easily double or more. Systems and Infrastructure for Implementation of a Potential 340B Rebate Program. Mountrail County Medical Center, Stanley ND has designed its technological systerns and operational infrastructure in reliance on an upfront discount model. Any shift to a rebate mechanism will force us to incur significant costs to change those systems. We have already implemented the third party adimistrator platform for helping manage the rebate program because we do not have resources to manage it in-house. It is simply impossible for our facility to do any other way. This system is one developed by Craneware group and takes eligible claims we need to manually confirm and send to the beacon platform, it then helps keep track of approved claims. Any un approved claims we will need to go through the resubmission process. We have also had to begin developing our own reporting process and system to keep track of the program in order to ensure compliance with the program and 340B requirements. We do not have an in-house pharmacy so it is not feasible for us to provide medical information along with clairns information. This create a technological and PHI burden we are not able to overcome with our current systems. None of the information from this 3 process with our contract pharmacy feeds back to our HER so there is no mechanism to reconnect the data. It will require a 100% manual process on our part. This is untennable. Adverse Impacts of These Additional Costs And Burdens. A11 of these many different costs and burdens add up. Unfortunately, that means Mountrail County Medical Center, Stanley ND will no longer be able to use our 340B savings as effectively and comprehensively as we did under an upfront discount model. As a result, our patients and community will suffer in concrete ways. The uncertainty of payment will likely prevent or significantly hinder implementation of any outreach or additional patient care programs utilizing 340B fund due to the unreliability of the funds being available as a result of the rebate program Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Mountrail County Medical Center, Stanley ND reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront-discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model and given the massive costs that this disruption will impose on 340B hospitals like ours, there is no reason to switch to a rebate mechanism, even in so- called "pilot" form. Problems With the Beacon IT Platform. Under HRSA's original Rebate Program, the approved drug companies were planning to use Second Sight Solutions' Beacon IT platform to operate the Program. In the few weeks we had to prepare for the start of that Program, we encountered serious problems with Beacon. 4 The Beacon program has been developed for manufacturers, not for Covered Entities, it is not a neutral party in this process and does not operate with the CE best interests in mind. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. Given the tremendous costs that a rebate mechanism will impose on Mountrail County Medical Center, Stanley ND, HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasoned explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. o In 5 years, our facility has had one single event of a possible duplicate discount, it was caught and prevented before any additional payments or issues arose. This event was due to a technical problem with the TPA system due to an outage and not as a result of the way our program functions. For all these reasons, Mountrail County Medical Center, Stanley ND respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third-party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Mountrail County Medical Center, Stanley ND and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. 5 We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have questions. Sincerely, Eric Me11 IT Coordinator/340B Primary Contact Mountrail County Medical Center, Stanley ND 6
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See Attached State of Louisiana OFFICE OF THE GOVERNOR P.O. BOX 94004 BATON ROUGE 70804-9004 Jeff Landry Governor April 8, 2026 Administrator Thomas J. Engels Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Ln. Rockville, MD 20857 Dear Administrator Engels, I am pleased to offer rny strong support for Access Health Louisiana's application to the Health Resources and Services Administration's Service Area CompetitionAdditional Area (SAC-AA) for the St. Gabriel service area. Louisiana continues to face challenges in healthcare access, particularly in underserved and rural communities. Expanding access to comprehensive, community-based care remains critical to improving health outcomes across our state. Access Health Louisiana has demonstrated a proven, patient-centered approach to care, delivering prirnary, behavioral, and preventive services through community health centers, school-based clinics, mobile units, and telehealth. Their model improves access, strengthens care coordination, and reduces unnecessary emergency department use. Additionally, their commitment to workforce development helps ensure Louisiana is prepared to meet future healthcare needs. For these reasons, I fully support Access Health Louisiana's application and their continued efforts to expand high-quality healthcare services in the St. Gabriel community. Thank you for your commitment to expanding care. For Louisiana Jeff Landiy Governor
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See Attached AICH MORRIS COUNTY HOSPITAL Morris County Hospital 600 N Washington Council Grove, KS 66846 (620) 767-6811 Fax (620) 767-5611 The Honorable Thomas J. Engels Administrator Health Resources and Services Administration U.S. Department of Health and Human Services 5600 Fishers Lane Rockville, MD 20852 Re: Request for Information: 340B Rebate Model Pilot Program, HHS Docket No. HRSA-2026-03042 Dear Administrator Engels: On behalf of Morris County Hospital (MCH), Council Grove, KS, we are grateful for the opportunity to comment on the Department of Health and Human Services' (MS) "Request for Information: 340B Rebate Model Pilot Program." Among other things, this RFI asks "whether HRSA should implement a rebate model under the 340B program" instead ofthe upfront discount model that has worked successfully for decades. The answer is "no." As explained below, any rebate mechanism will impose enormous costs and burdens on Morris County Hospital that far outweigh any benefits that might come from it. More fundamentally, HRSA's desire to test a rebate model is seemingly based on the incorrect premise that it must balance the interests of 340B hospitals and drug companies when choosing a discount mechanism. In reality, HRSA must give primacy to the needs of covered entities so that they can "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Preserving the upfront discount mechanism, which Morris County Hospital has relied on for years, is the best way to fulfill the purpose of the 340B program. The RFI poses 30 questions (some are duplicative) and encourages commenters to include supporting facts, research, and evidence in their responses. Morris County Hospital has done its best to provide detailed answers in the limited time available to us. For purposes of estimating costs, we have assumed that any future Rebate Program will include only the 10 drugs that HRSA previously approved for its original Program. If HRSA chooses to include more drugs, such as those that have been approved under the Medicare Drug Price Negotiation Program (MDPNP) for 2027, our costs will increase significantly. After all, more drugs mean more claims to submit, more rebates to track and reconcile, more money that we will need to float to drug companies while we await our statutory discount, more likely disputes over delays and denials, and therefore less money that Morris County Hospital can spend on patient care and comprehensive health care services. Administrative Costs Under a Potential 340B Rebate Program. Any rebate program would require Morris County Hospital, to spend significant sums on new administrative costs. When we chose to participate in the 340B program, Morris County Hospital understood that we would incur some reasonable administrative costs. We designed our hiring, operations, and program administration around an upfront discount model. A shift to a new kind of discount mechanism demands new resources, imposing considerable additional costs and burdens on our institution that go far above and beyond what we had expected and planned for as a 340B hospitaland far above and beyond what we are experiencing now. Estimate and identify the incremental administrative and operational costs your organization would incur under a 340B Model Rebate Pilot Program, distinguishing between one-time startup costs and ongoing costs. o First of all, MCH averages about 300 each 340B eligible scripts filled every month. Our TPA does a very nice job summarizing the costs, payments, and miscellaneous expenses attached to each of these filled prescriptions. But our responsive effort today primarily deals with the aggregate totals of these 300 dispenses, knowing we must pay our pharmacies, our wholesalers, and our consultants for their work in creating these crucial dispenses for our patients' collective benefits. Today it requires three ofus in-house approximately 15-20 collective hours a month to validate these orders and get them paid, confirm proper prices charged to our patients deserving the 340B pricing, and keeping our compliance oversight in good standing. This is because our TPA's software performs the lion's share of the tracking and reporting functions, such that consistent, reliable data is at our fingertips. To alter this entire structure with having to manually account for 300 individual rebates cycling back through Beam and the respective authorizing drug manufacturers will turn our 340B program into a workflow quagmire. The program today pretty well operates seamlessly behind the scenes of all these dispenses, and the three of us who oversee the program have no significant reconciliation efforts outside of the original ordering of the drugs and validating correct pricing at the point of being invoiced. To keep up with constant churn of over 3,600 annual dispenses and determining if we were refunded (or not) the WAC vs. 340B price differential will require an estimated 340 additional labor hours per month, inclusive of time spent on the phone or email with Beam and/or the drug manufacturers chasing the unauthorized or denied rebate dispenses. Denials are what constitute significant administrative hours an estimated 60% of these extra hours! These hours will have to be conducted by the equivalent of a Pharmacy tech or an LPN, individuals who have a comfort level with medications and their intended uses. So, with benefits, two $25/hour FTEs will cost us approximately $8,666 per month, or $104K annually. And this expenditure serves no other additional value to our current efforts that make certain our contracted pharmacy(s) actually recover dollars currently received in the 2-3- day turnaround cycle of medication dispensing and insurance reimbursement. As for our outside consultant, who will help our new hired staffwith questions regarding claims submission and rebate reconciliation, let it be known that they have already levied what amounts to a 25.8% increase in our support fees (over the first three months of 2026) in anticipation of this rebate program kicking off on January 1, 2026, and the extra staff they brought on for the additional oversight. Understanding the impact of lower revenues generated because of the large looming reduction in the Medicare payment rate for the ten initial Maximum Fair Pricing (MFP) drugs effective in January, they switched us to a flat monthly fee vs. a percent of revenue generated. Hence, we are seeing that 25.8% net rate increase for their services what would have cost MCH in January thru March under the % of net profit model, $19,079, actually cost us $24,000 with the fixed rate methodology (see EXHIBIT 2). This was driven up by our consultant's upstaffing for the now delayed rebate plan AND because of the implementation of the Medicare savings plan on those same 10 drugs. With these ten MFP drugs, CMS is already recording substantial savings with their new program, resulting in each respective 340B covered entity suffering substantial hits to their 340B program, even ahead of this unfair rebate consideration. I say enough is enough, and this proposed rebate model needs to die for good, right now! The above two arguments demonstrate the extra hospital borne costs to be incurred by the pending rebate scenario. But this extra cost and effort do not speak to the "relativity" of this topic in the first place...which is that Big Pharma does not like discounting their products for the betterment of covered entities and /or for the Government which has mandated reductions to the 10 MFP MC drugs, already mentioned! Please look closer to the data at the bottom of EXHIBIT 2. Since January 1, 2026, note the percentage change from 2025 to 2026 in insurance paid revenue capture, for the four major players in the 340B contract pharmacy program: 1.) the Drug Companies/Wholesalers for their cost of goods sold are seeing 40.2% of the gross revenues, up from 28.6% in 2025, 2.) the Contracted Pharmacy for their dispensing fees are seeing only 28.9% ofthe gross revenue, down from 33.2% in 2025, largely from the decline in MC payments for the MFP drugs, 3.) the Third Party vendors are seeing 4.8% ofthe gross revenue receipts, up bit from the 3.9% in 2025, and 4.) the Covered Entity (MCH) is seeing only 26.1% of the gross revenue, down from 34.3% in 2025. This is an interesting twist which identifies the margin shifts as a result of the Medicare repricing for the 10 MFP drugs. Pharma didn't lose a thing in this CMS "cost reduction effort" ...only the Dispensing Pharmacy and Hospitals, which generate the referrals and do the work in getting the consumer the medicines! Makes us wonder why the Drug Companies feel so cheated when you can see from these results, they get the largest cut out of the across-the-board book of insurance paid claims! So why should Pharma be listened to with their pursuit of this rebate pilot? Their earning reported year in and year out stack up far higher than 95% ofthe covered entities now serving the American public! By the way all the Morris County Hospital data summarized in EXHIBITS 1-3 is extracted from detailed monthly dispensing reports generated by our two outside compliance vendors / consultants: MacroHelix and Citizen's Medical Center, Colby, KS. The other detrimental financial impact that would be driven by the proposed rebate model for eventually receiving the legislative mandated 340B discounts is the obvious cash flow challenges MCH would have to endure. EXHIBITS 1 and 3 speak to this huge concern. EXHIBIT 1 was created to estimate the additional monthly cash expenditures that WAC pricing would require - $86,001.12... for just the initial bank of 10 drugs. We learned that the approved rebates would have to be paid within ten days, but those are only for the approved dispenses. We do not believe that the rebate plan was created just to delay 100% of the current 340B dispenses. We assumed that 20% of the dispenses would be challenged to one degree or another, causing most of the extra man hours of work which was mentioned above. But even with that delay in payment and/or nonpayment, we determined that our cash position could put us in violation of one of our bond covenants, specifically our current debt service coverage ratio, which requires a ratio of 1.25 (see EXHIBIT 3a without rebate, and EXHIBIT 3b with rebate). This cash flow squeeze would also greatly diminish our ability to pay for untimely repairs and replacement of needed capital or minor equipment. Having days of cash on hand for emergencies has been something we have worked very hard to preserve, and paying WAC prices for a Pharma review function seems totally unfair. As already mentioned, we take staying in compliance with the rigorous 340B OPAIS and 340B ESP standards very seriously. Why do we need another force testing us to make sure we are following their own set of rules...especially when that other force is totally governed by a for-profit- share-holder system?? As stated,...we do not think a rebate model adds anything to overall public or privately owned healthcare services, except considerable disruption. If notable, which it is, compare those administrative costs to your marginal savings from 340B (either total or for those 10 drugs) to show how much this will eat into the benefits of the 340B Program. Back to EXHIBIT 2, you will see that our monthly net margin from 2025 to 2026 is already down 26%, from $88,974 to $70,494. That is a result of reduced payment for the Medicare MFP drugs. To lose up to 20% more from delayed or denied rebate dispenses would likely force us to close some services, even if they are quite valuable to our local population. Obstetrics and/or pulmonary rehab are two services that regularly draw our financial scrutiny, because they are either low volume or seasonal, and they yield negative margins for many months of the year. Our current level of 340B revenues helps to sustain them...but very likely not so if the 340B program keeps on being continually threatened. Reliance Interests. The RFI expressly invites comment on "reliance interests in continuing to obtain the 340B ceiling prices through upfront discounts and whether such reliance interests are reasonable in light of the Secretary's express statutory authority to provide for discounts via `rebate or discount.'" Respectfully, that framing rests on a flawed premise. The mere existence of statutory authority does not imply that the agency willor reasonably mayexercise it in a particular manner. That is especially so here, where the 340B Program has, since its inception, consistently provided discounts through upfront pricing rather than post-sale rebates. Morris County Hospital, Council Grove, KS reasonably relied on this history when designing its internal operations, staffing, third-party contractual relationships, and financial planning for the use of 340B savingsall based on an upfront- discount model. A fundamental switch now would disrupt these settled reliance interests engendered by the agency's prior policy. Absent any identified problems with the upfront discount model, and given the substantial costs that this disruption will impose on 340B Respectfully, hospitals like ours, there is no reason to switch to a rebate mechanism, even in so-called "pilot" form. Efforts To Avoid 340B/MDPNP Duplicate Discounts. HRSA has already made clear that drug companies have other available options to address the need to deduplicate 340B and MDPNP pricing. that is the purpose of the 340B ESP application. Given the tremendous costs that a rebate mechanism will impose on Morris County Hospital, Council Grove, KS, and HRSA should rely on those other options. Any other decision would impermissibly privilege the interests of drug companies over those of covered entities, their patients, and the communities they serve. Likewise, we support the AHA's position that there are viable, lawful, and less burdensome alternatives that could achieve the same potential benefits as a rebate mechanism. In particular, we urge HRSA to adopt a third-party clearinghouse, rather than a rebate mechanism, to advance 340B/MDPNP deduplication, program integrity, and any other potential benefits. At a minimum, HRSA must provide a reasonable explanation for why the third-party clearinghouse is neither viable nor less costly than a rebate mechanism. For all of these reasons, Morris County Hospital, Council Grove, KS respectfully submits that the costs of any Rebate Program will outweigh any expected benefits. HRSA therefore should abandon the concept altogether and embrace a neutral, third- party clearinghouse. If, however, HRSA chooses to move forward with this ill-conceived effort, it must allow Morris County Hospital, Council Grove, KS and other covered entities to comment on the specifics of its new program. While we have endeavored to provide the most detailed information possible, we are doing so without precise knowledge of which drugs will be included in a Rebate Program and many other critical details (e.g., data required, possible grounds for denial of rebates, dispute resolution processes, other guardrails). A failure to permit additional comments on the specific features of the program will be, in effect, a wholesale failure to consider important aspects of the problem. We appreciate your consideration of these comments and look forward to working with HRSA on this important issue, which has profound implications for the millions of patients who rely on the 340B Program. Please contact me if you have further questions. Kevin A. Leeper CEO Morris County Hospital, Council Grove, KS 620-767-6811, x146 EXHIBIT 1 MCH CASH FLOW IMPACT from 340B Rebate Pilot Approved Drugs - Effective 1-1-26 COST REVIEW PER 30 DAY DISPENSE 10 Manufacturers Drug (Only these 11) NDC# Used For Pricing 340B Price Wholesale Price Variance - Rebate Potentlal Aug Dispenses Initial Cash Flow Impact Sept. Dispenses initial Cash Flow Impact Oct. Dispenses Initial Cash Flow Impact Nov. Dispenses initial Cash Flow Impact 3 - Month Cash Impact Bristol Myers Squibb Eliquis 00003089421 10.44 788.25 777.81 44 34,223.64 51 39,668.31 59 45,890.79 119,782.74_, NA Immunex Corp. (Amgen) Enbrel NA NA NA NA NA NA NA NA NA NA NA NA Astra Zeneca AB Farxiga 00310621030 0.31 511.44 511.13 25 12,778.25 24 12,267.12 38 19,422.94 44,468.31 Pharmacyclics (Abbvie) lmbruvica NA NA NA NA NA NA NA NA NA NA NA NA NA Merck Sharp Dohme Januvia 00006022131 46.27 343.15 296.88 2 593.76 2 593.76 1 296.88 1,484.40 Boehringer ingelheim Jardiance 00597015330 0.31 520.42 520.11 51 26,525.61 35 18,203.85 27 14,042.97 58,772.4.3 Novo Nordisk Hasp 00169320415 60.09 581.18 521.09 4 2,084.36 0 0.00 3 1,563.27 3,647.63 Novo Nordisk Novolog 0016975011 37.62 41.60 3.98 4 15.92 4 15.92 1 Janssen Biotech (J&J) Sterela NA NA NA NA NA NA NA NA NA NA NA NA NA Janssen Pharm. (J&J) Xaralto 50458057930 0.31 466.49 466.18 18 8,391.24 12 5,594.16 16 7,458.88 21,444.28 Novartls * Entresto 00078069620 351.44 733.42 381.98 10_ 3,819.80 6 2,291.88 6 2,291.88 8,403.56 Total: 88,432.58 78,635.00 90,967.61 258,003.35 1_Average Extra Monthly Cash Spent: $86,001.12 * - Effective 4-1-2026 REVENUE / MARGIN COST REVIEW PER 30 DAY DISPENSE MCH Net Profit 10 Manufacturers Drug (Only these 11) 3 Months Usage from Above MC Usage at 40% of Total 340B Price Wholesale Price 2026 MC MFP REVENUE Revenue Formerly Paid - 2025 Dlspens Fee Apothecary@ 15+35% Dispens Fee ApothecaryAt new MFP Rate Initial Profit at 340B Rate Initial Profit at AWP Rate Expected Profit After Rebate Expected profitw/ MC's MFP Bristol Myers Squibb Eliquis 154 62 10.44 788.25 231.00 595.00 223.25 95.85 55,641.74 -64,141.00 54,033.98 40,922.66 immunex Corp. (Amgen) Enbrel NA NA NA NA NA NA NA NA NA NA NA NA Astra Zeneca AB Farxiga 87 35 0.31 511.44 178.00 609.00 228.15 77.30 33,106.98 -11,361.33 33,080.01 23,281.65 Pharmacyclics (Abbvie) imbruvica NA NA NA NA NA NA NA NA NA NA NA NA MerckSharp Dohme Januvia 5 2 46.27 343.15 113.00 241.00 99.35 54.55 476.90 -1,007.50 245.55 310.50 Boehringer lngelheim Jardlance 113 45 0.31 520.42 197.00 619.00 231.65 83.95 43,735.52 -15,036.91 43,700.49 31,414.57 Novo Nordisk Fiasp 7 3 60.09 581.18 119.00 586.00 220.10 56.65 2,140.67 -1,506.96 1,720.04 1,229.57 Novo Nordisk Novolog 9 4 37.62 41.60 119.00 148.00 66.80 56.65 392.22 356.40 53.64 306.93 Janssen Blotech (J&J) Sterela NA NA NA NA NA NA NA NA NA NA NA NA Janssen Pharm. (J&J) Xaralto 46 18 0.31 466.49 197.00 595.00 223.25 83.95 17,086.24 -4,358.04 17,071.98 6,903.14 Novartls * Entresto 22 9 351.44 733.42 ._ 295.00 715.00 265.25 118.25 2,162.82 -6,240.74 -5,568.86 1,215.41 Total: 130,743.09 (103,296.08) 120,336.83 81,584.42 " Includes $8K/Mo. Citizen's Fee " includes $8K/Mo. Citizen's Fee " includes $8K /Mo. Citizen's Fee 67.80% Of Former Profit Ave / Month 43,581.03 40,112.28 27,194.81 Annualized: 522,972.36 481,347.32 326,337.66 Minimum Decline in 2026 Rembursement: $155,010 Month RX Revenue Disp Fee 340B Acq Cost EXHIBIT 2 CE initial Profitability Citizen's MH Fee as % of Net Profit CE Net Profit Citizen's MH Less $1i< Fee Fee As of 1 MacroHelix 1-2026 Each Month Jan-25 $233,777.00 $84,621.92 $60,814.46 $88,340.54 $7,067.24 $80,273.30 %of Revenue 36.20% 26.01% 37.79% 8.00% 34 34% Feb-25 $235,518.09 $84,883.40 $58,604.55 $92,030.13 $7,362.41 $83,667.72 %of Revenue 36.04% 24.88% 39.08% 8.00% 35.52% Mar-25 $234,779.71 $84,418.46 $61,624.65 $88,736.60 $7,098.93 $80,637.67 %of Revenue 35.96% 26.25% 37.80% 8.00% 34.35% Apr-25 $205,181.60 $74,236.82 $45,693.03 $85,251.78 $6,820.14 $77,431.64 %of Revenue 36.18% 22.27% 41.55% 8.00% 37.74% May-25 $243,062.65 $87,921.84 $51,545.46 $103,595.44 $8,287.64 $94307.80 %of Revenue 36.17% 21.21% 42.62% 8.00% 38.80% Jun-25 $218,729.11 $79,054.53 $42,312.17 $97,362.43 $7,788.99 $88,573.44 % of Revenue 36.14% 19.34% 44.51% 8.00% 40.49% Jul-25 $276,330.22 $87,526.39 $80,373.76 $108,430.07 $8,674.41 598,755.66 % of Revenue 31.67% 29.09% 39.24% 8.00% 35.74% Aug-25 $286,379.28 $88,752.10 $84,744.86 $112,822.32 $9,025.79 $102.796.53 % of Revenue 30.99% 29.59% 39.40% 8.00% 35.90% Sep-25 $267,208.72 $79,759.32 $85,477.87 $101,971.53 $8,157.72 $92,813.81 %of Revenue 29.85% 31.99% 38.16% 8.00% 34.73% Oct-25 $295,861.34 $89,711.11 $99,755.85 $106,394.38 $8,511.55 $96,882.83 %of Revenue 30.32% 33.72% 35.96% 8.00% 32.75% Nov-25 $251,772.01 $75,550.41 $83,511.06 $92,710.54 $7,416.84 $84,293.70 %of Revenue 30.01% 33.17% 36.82% 8.00% 33.48% Dec-25 $324,824.94 $104,589.42 $124,302.30 $95,933.22 $7,674.66 $87,258.56 %of Revenue 32.20% 38.27% 29.53% 8.00% 26.86% Jan-26 $233,097.98 $67,833.13 $92,532 76 $72,732.09 $5,818 57 $63.732 09 $8,000.00 %of Revenue 29.10% 39.70% 31.20% 8.00% 27.34% Feb-26 $138,403.59 $39,597.49 $56,708 52 $42,097.58 $3.367 81 833.097 58 $8,000.00 %of Revenue 28.61% 40.97% 30.42% 8.00% 23.91% Mar-26 $426,614.98 $125,730.48 $177,229.96 $123,654.54 $9 892 36 $114.654 54 $8,000.00 %of Revenue 29.47% 41.54% 28,99% 8.00% 26.88% Apr-26 $19,078.74 $24,000.00 %of Revenue Inc. Variance: $4,921.26 May-26 %of Revenue Jun-26 Jul-26 Aug-26 % of Revenue 2025 Totals: $3,073,424.67 $1,021,025.72 $878,760.02 $1,173,578.98 $93,886.32 $1 ,067,692.66 $24,000.00 Macro Helix (MH): 100.00% 33.22% 28.59% 38.18% 3.05% 34.74% $256,118.72 $85,085.48 $73,230.00 $97,798.25 $7,823.86 $88,974.39 MCH 340B 340B Acq All 3rd Party CE Net Contract RX RX Revenue Disp Fee Progam Cost Fees Profitability 12 Mos. of 2025 $3,073,424.67 $1,021,025.72 $878,760.02 $119,898.52 $1,067,692.66 %of Revenue 100 00% 33.22% 28.59% 3.90% 34.29% Ave/Month: 5.1. -D 1 1 8 72 $85,085.48 $73,230.00 $9,991.54 $88,974.39 ln 2026 Went to Fixed rate * 3 Mos. of 2026 $798,116.55 $233,161.10 $326,471.24 $24,000.00 $211,484.21 % of Revenue 100.00% 28.92% 40.22% 4.80% 26.06% Ave/ Month: $266,038.85 $77,720.37 $108,823.75 $8,000.00 $70,494.74 ' - If in 2026 the "A of Net Profit" method was used, would only have pd: $19,079 But Paid $24,000 due to Consultant planning for Rebate/MFP Impact. So Rebate/MFP Model has added $4,921 to MCH's consulting cost in 1st 3 mos. of '26! % of Revenue Generated Ave / Month Ave / Month % of Revenue Generated 40.2% $108.823 75 2026 3 Mos. YTD Totals. $326,471.24 < Drug Companies Covered > Entity $211.484.21 $70,494.74 26.1% 28.6% 28.9% $73,230.00 202512 Mos. YTD Totals: $878,760.02 < Drug Companies Covered > Entity $1,067,692.66 $88,974.39 34.3% $77,720.37 2026 3 Mos YTD Totals. $233,161 10 < Partnering Pharmacy 3rd Party > Vendors 524,000 00 $8,000.00 4.8% 33.2% $85,085.48 2025 12 Mos. YTD Totals' $1,021,025 72 < Partnering Pharmacy 3rd Party > Vendors $119,898.52 $9,991 54 3.9% EXHIBIT 3a DEBT SERVICE RATIO IN NON-REBATE MODEL (Pre-WAC) YTD YTD 1/31/2026 2/28/2026 Net income Available for Debt Service Net Income (Loss) 24,481.00 Depreciation and Amortization 62,486.00 Interest Expense 9,848.00 Net Income Available for Debt Service: 96,815.00 Debt Service Payments Interest Bonds Principal Bonds Interest Capital Leases Principal Capital Leases 55,203.75 1,141.46 10,414.18 66,759.39 < See Exhibit 1 Historic Debt Service Coverage Ratio 1.45 #DIV/0! Required Debt Service Coverate Ratio 1.25 1.25 At ratio of 1.45, MCH Comfortably meets its Bond Covenants EXHIBIT 3b DEBT SERVICE RATIO IN REBATE MODEL (w/ WAC) YTD 1/31/2026 Net Income Available for Debt Service Net Income (Loss) 24,481.00 Depreciation and Amortization 62,486.00 Interest Expense 9,848.00 Net Income Available for Debt Service: 96,815.00 Debt Service Payments Interest Bonds Principal Bonds 55,203.75 Interest Capital Leases 1,141.46 Principal Capital Leases 10,414.18 Ave. Mnthly Drug Cost Differential 340B vs WAC 86,000.00 Estimating 80% of scripts to be approved & rebated timely, (68,800.00) meaning 20% will have to be chased down and/or appealed. 83,959.39 New calculation of Debt Service Coverage Ratio 1.15 Required Debt Service Coverate Ratio 1.25 At a ratio of 1.15, MCH Fails to meet its Bond Covenant Obligations.

After a specific commenter’s arguments rather than their raw text? The Arguments tab carries the extracted arguments for the 28-comment sample, each with the commenter’s verbatim words.

Campaign templates — how 2,453 submissions become 1,260 analyses

Organized campaigns send the same letter many times. Before any analysis runs, identical copies are clustered so each distinct letter is read once and its result is inherited by every exact duplicate — no opinion is lost, and nothing is double-counted.

Share of submissions

Exemplars: 1.8%Customized: 23.8%True duplicates: 48.6%Singletons: 25.8%Empty: 0.1%2,453comments

Share of text

Exemplars: 2.3%Customized: 40.9%True duplicates: 2.3%Singletons: 54.6%51,234,877characters
Why both charts matter. True duplicates are 48.6% of submissions but only 2.3% of the text — form-letter campaigns dominate the count while the substance sits in the individually written and customized letters, which are 95.5% of the words. Counting submissions alone would badly misread this record; that is why weight follows evidence, not volume, everywhere in this packet.
TypeWhat it meansSubmissionsShareCharactersShare
Exemplarssent for analysis — the cleanest copy of each form letter441.8%1,173,6882.3%
Customizedsent — a form letter the sender added their own words to58423.8%20,952,05640.9%
True duplicatesnot sent — identical to an exemplar; it inherits that result1,19148.6%1,156,6002.3%
Singletonssent — an individually written submission, no template63225.8%27,952,53354.6%
Emptyexcluded — no readable text20.1%00.0%

2,453 submissions to the docket → 1,260 sent for analysis (1,193 skipped as exact duplicates or empty) → 1,259 extracted, 1 quarantined for exceeding a readable size (a 17-million-character attachment dump). Source: regprep form-letter dedup, run dedup_acd6f7641e897eb3_3small_t20_s2.

Arguments — challenge set

Every extracted argument with quality (AQS), response (RQS), and priority scores. Click a row for the verbatim commenter spans and HRSA’s response. Full corpus ships with the final bundle.

Pilot Notice claims — 878 assertions

Every assertion HRSA advances, with its stated basis and echo screening. Click a row for the verbatim span. agency = overlap flagged as the comment quoting an agency document (discounted).

Pilot Notice references — 242 characterizations of commenter input

Every place the Pilot Notice says what commenters said, with side, resolution status, and cherry-pick weight. Click a row for the verbatim span.

The HRSA Pilot Notice — 37 sections, 204 paragraphs

Paragraphs with a coral edge carry extracted claims or commenter references — hover (or tap) one to see them. Chips count sourced claims (uncited “own assertions” are the paragraph text itself — see the Pilot Notice claims tab) and refs.